ANNUAL REPORT 2002
Year Ended March 31, 2002

Profile

Nippon Light Metal Company Ltd. (NLM), has maintained the position of industry
leader for 63 years. Today, as only fully integrated aluminum manufacturer inJapan, we have comprehensive operations including the: conversion of bauxite
into alumina; generation of electric power for aluminum plants; smelting ofaluminum from alumina; manufacturing, distribution and marketing of
semifinished and finished aluminum and nonaluminum-based products; andproduction and sales of industrial chemicals.
In fiscal 2001, ended March 31, 2002, NLM began rebuilding its income,owing to management structural reforms implemented to date, including thewithdrawal from unprofitable businesses, thorough cost-reduction activities, andother measures to enhance profitability.
In addition to these reforms, new product development under our matrixorganization (development structure spanning the entire organization) andexhaustive daily management control helped NLM turn around from the net loss offiscal 2000 and move into the black in the year under review.

Contents
Consolidated Six-Year Summary .......................................................... 1
To Our Shareholders ........................................................................... 2
Special Feature ................................................................................... 4
Review of Operations .......................................................................... 10
Financial Review ................................................................................. 12
Consolidated Balance Sheets ............................................................... 14
Consolidated Statements of Operations ............................................... 16
Consolidated Statements of Shareholders’ Equity ................................ 17
Consolidated Statements of Cash Flows ............................................... 18
Notes to the Consolidated Financial Statements ................................... 19
Report of Independent Accountants .................................................... 30
Overseas Network ............................................................................... 31
Directors and Officers ......................................................................... 32
Corporate Data ................................................................................... 33

Cautionary Statement
This annual report contains various projections and estimates. Important factors that could alter these projections andestimates include changes in the balance of aluminum supply and demand, fluctuations in the price of aluminum ingot
and foreign exchange rates, as well as shifts in Japanese government policies and regulations. The Company cautions,
therefore, that the projections and estimates contained herein involve risk and uncertainty, and that actual results could
differ materially from those expressed or implied.

32

Consolidated Six-Year Summary
Nippon Light Metal Company, Ltd. and its consolidated subsidiaries
Years ended March 31

Thousands of
U.S. dollars

Millions of yen
1997

1998

1999

2000

2001

2002

2002

For the year:
Net sales ............................................ ¥626,787 ¥617,595 ¥569,036 ¥549,194 ¥565,223 ¥521,861 $3,916,405
Operating profit (loss) ...................... 16,727(574) (4,153)
2,150
12,205 11,723
87,977
Net income (loss) ............................. (1,516) (11,846) (19,248) (14,096) (21,905)
1,518
11,392
At year-end:
Total assets ........................................ 668,954 716,753
Shareholders’ equity.......................... 144,405 131,836
Short-term borrowings andlong-term debt, includingcommercial paper ........................... 279,596 333,052

640,989
93,481

605,346
100,509600,373 564,287
81,478 83,314

4,234,799
625,246

340,445 310,891 298,256 289,872

2,175,400

Per share data (yen and dollars):
Net income (loss) ........................... .. ¥ (2.82) ¥ (22.07) ¥ (40.98) ¥ (31.01) ¥ (41.22)¥ 2.79 $Cash dividends ..................................
2.00
2.00
2.00
2.00
—
1.50
Shareholders’ equity.......................... 269.00 245.59
232.18198.45149.96 153.36

0.02
0.01
1.15

Stock information (TSE) (yen and dollars):
Stock price:
High ............................................ ¥Low .............................................

1.10
0.44

690 ¥
367

480 ¥
133

199 ¥
112

199 ¥
66

116 ¥
69

147 $
59

Note: U.S. dollar amounts have been translated, for convenience only, at the exchange rate of ¥133.25 = U.S.$1.00. See Note 2 of the Notes to the Consolidated
Financial Statements.

Net Sales

Operating Profit (Loss)

Total Assets

750

20

750

600

15

600

450

10

450

300

5

300

150

0

150

0

1997 1998 1999 2000 2001 2002

Billions of yen

Years ended March 31-51997 1998 1999 2000 2001 2002

Billions of yen

Years ended March 31

01997 1998 1999 2000 2001 2002

Billions of yen

As of March 31

1

To Our Shareholders

Shigesato Sato
President and CEO

I would like to take this opportunity to outline the business results and future prospects of
Nippon Light Metal Company, Ltd. (NLM), and its consolidated group companies, as of the closeof fiscal 2001, ended March 31, 2002.
Operating Results
NLM Achieves a Turnaround to Profitability and Declares Dividends
The NLM Group faced a very severe operating environment in fiscal 2001. The Japanese economy sufferedprolonged deflation, while further economic globalization caused changes in the supply-demand structure
and competition intensified in markets in which the Group is active.
Nevertheless, the Group was able to post net income for the fiscal year, following five years of net losses,
and declare dividends of ¥1.50 per share of common stock, after not being able to pay dividends in fiscal
2000. I believe that these achievements confirm the steady success of Groupwide efforts to raise profitability
and respond more flexibly to changes in its operating environment.
Management Structure Reforms Bear Fruit
In an atmosphere of continuing economic sluggishness, the NLM Group has successfully shifted toward a
multi-core business structure based on its business concept of expanding high-value-added components andend products while reinforcing the traditional material business by using its resources related to aluminum,
alumina and carbon.
In the year under review, demand for materials used in information technology (IT) devices dropped
significantly after the bursting of the IT bubble. However, the NLM Group achieved strong performances inareas in which it maintains leading market positions, which drove the return to profitability. These businesses include chemicals, panel systems, aluminum powder and paste, van- and truck-outfitting operationsof Nippon Fruehauf Co., Ltd., and housings for cellular and mobile telecommunications base stations of
NLM ECAL Company, Ltd.
Meanwhile, wholly owned Shin Nikkei Company, Ltd., continues to impressively improve its results.
Since I took over as president of NLM in April 2001, I have constantly emphasized the importance of handson management, getting all employees and managers, including myself, directly in touch with NLM management issues. Under a new operating structure also implemented in April 2001, Shin Nikkei has made notable
strides in implementing hands-on management. Under their new president, Shin Nikkei’s people now better
understand their businesses, enabling them to build an integrated organization linking manufacturing,marketing and sales. Shin Nikkei has also reinforced its strategies to boost overall efficiency and ensure2

customer satisfaction. Furthermore, that company’s “central nervous system,” or head office organization, ismore closely linked with the “epidermal nerves,” or the sales people who work directly with customers. As aresult, Shin Nikkei’s quality and delivery performance now rival those of leading competitors.
New Mid-Term Management Plan Commences
In fiscal 2001, we initiated specific programs under the NLM Group Mid-term Management Plan, formulated
in November 2001.
In the months and years ahead, Shin Nikkei will continue to step up its internally driven reformation
activities. Specifically, that company is taking a two-pronged approach to establish foundations for profitability. One is to bolster marketing efforts to improve the profitability of its building materials operations. The
other is to cut costs.
In the aluminum extrusion and fabricated products operations of NLM, we will carry out radical reforms. For example, we will thoroughly control income and losses at each business unit, foster innovative
employees who can meet the challenge of the new, and install these people in positions of responsibility inbusiness promotion.
Based on the idea that there are “no profits without a competitive edge,” we will actively allocate resources to businesses with high potential. In addition, by pursuing more efficient, dynamic development
activities, we will generate strong new products and businesses.
Amid prolonged deflation in Japan, improving our cost structure is an important management issue. We
intend to devote ourselves to reducing procurement and distribution costs, centered on the activities of NLM
and Shin Nikkei.
Forecast for Fiscal 2002
In fiscal 2002, the NLM Group plans to steadily implement specific programs under the Mid-term Management Plan, and aims to achieve consolidated ordinary profit of ¥10.0 billion and net income of ¥7.0 billion.
Specific activities will include cost cutting and rationalization at Shin Nikkei, centered on that company’s
building materials operations, thereby improving its profitability by ¥4.0 billion. In our aluminum extrusionbusiness, we seek to add more than ¥1.0 billion to the bottom line. This will be by contracting fixed costs,
particularly by retiring two extrusion machines and their related facilities, rationalizing human resources,
and spinning off these operations to Nikkeikin Act Company, Ltd., a new wholly owned subsidiary. We also
foresee enhanced profitability in our capacitor foils, the foil operations of wholly owned Toyo Aluminium
K.K., and our sheet operations in line with a recovery in the market for IT-related products.
However, such factors as deflation in Japan and intensifying competition will make price reductions
inevitable. We plan to combat this situation by streamlining labor, distribution and procurement activities,
thus meeting the income targets I have outlined.
I look forward to the continuing support and understanding of our shareholders as we drive toward ourgoals.
June 27, 2002

Shigesato Sato
President and CEO
3

Special Feature

What Is Different? What Will We Change in the Future?
A year has passed since the NLM Group began operations under a new management structure.
Shigesato Sato, president and CEO of NLM, discusses what has changed in the past year,
and what changes he foresees NLM making in the years ahead.

Q. What was the first thing on your mind when you became president last year?
A. My first thoughts were that the NLM Group already possessed many seeds that could
sprout into new businesses and products, and that we must turn this potential into profitability.
I also knew that my mission as president was to foster a continuously circulating process thatwould build strong business results into the future. Turning potential into reality requires that
we point out where the Group should head, and how to get there. Meanwhile, each business
unit needs to exercise firm management control to strengthen our near-term performance. I
believed that the completion of these two tasks would significantly improve our results.

Q. What did you consider first to reach these objectives?
A. First, I wanted to formulate our Mid-term Management Plan and strictly manage results
on a monthly basis. We devised that plan to present the optimal form of the NLM Group,
obliging every employee in a position of responsibility to back up strategic plans.
By managing profits and losses on a monthly basis, the plan plants the seeds of individual
responsibility for reaching targets. In addition, I urged our people to think in terms of competitiveness and strategy, and actively make all of resources, particularly our people, integral
to our strategy. This kind of thinking leads to the development of executives who can manage
our technologies, organization and human resources.
Cementing these two concepts in the Group culture was the main theme of my first year
as president. I think we have made definite steps forward to our goals. I feel positive about
our progress.
However, to ensure profitability in the medium and long term, we must modify our business structure, create powerful products to build a competitive edge, and implement widespread reforms in our corporate culture. I think we have only just scratched the surface.

4

Q. Would you give us some specific examples of change in the NLM Group?
A. Firstly, we established the Strategic Committee For Product Commercialization and Business Development, whose task is to take the lead in applying resources from throughout the
NLM Group to create new business opportunities. We also made headway in integrating management of development activities, comprehensively cultivating our markets and shortening
lead times in product development. Several new business units emerged under the leadershipof young and mid-level employees. One of our aims is to empower employees who would notnormally enjoy the chance under a line management system. I have high hopes that we will
revitalize our human resources, and reform our corporate culture.
Secondly, the awareness of employees responsible for the success of each plan has risen
throughout the NLM Group, so that, even if monthly results slide, they can come up with andimplement countermeasures more quickly.
I believe that any organization can function well if top management takes a hands-on approach to its operational issues and provide optimal leadership.

Q. In today’s constant change, what are your thoughts on the development and treatment of
employees, the people who make growth possible?

A. I expect our employees to have the competitive capabilities required in business activities.
I think that the fundamental point here is that individuals make the effort to learn. On theother hand, employees cannot self-develop if we don’t give them opportunity to face newchallenges. This is why I believe that we must strike a balance between the desire of individual employees to build their careers and the paths and opportunities we provide.

5One of my concerns is that the number of passive young employees could expandin the NLM Group. To prevent this situation from arising, we are ensuring that ourpeople interact with the marketplace. I want to maximize opportunities for dynamic,
go-getting employees.
To translate words into action, our executives must clearly understand that their objective is to pursue competitive superiority and profitability. This stance should be the basis ofevery corporate activity. Only companies that deliver on those objectives can win and truly
foster talented employees.

Q. What path do you envision for the NLM Group?
A. I want innovation, reform and the spirit of challenge to drive our corporate culture. Constant reform is crucial amid constant change. Companies fail when they stop reforming.
Because change in the business world originates in the marketplace, we must remain
fully in touch with our markets, or pursue hands-on management, while always thinking fromthe point of view of the market, or take a market-in approach to our activities.
In order to ensure that what I mentioned above becomes a reality, the Company will planand control its business activities using “competitive edge in the marketplace” as a measurement tool.
In personnel management, we will actively put our most dynamic and flexible young employees in touch with the marketplace and assign those who succeed to positions of responsibility throughout our organization.
Under our Mid-term Management Plan, we aim to achieve consolidated net sales of ¥590
billion and ordinary profit of ¥23 billion by fiscal 2006. To meet these targets, we must increase the number of businesses in which we lead competitively. The most important tasks
before us are fully implementing each of the plans I have outlined, enriching the Company
with the spirit of innovation and challenge, and establishing a corporate culture that provides
all employees with opportunities to actively pursue their careers.

6Mid-Term Management Plan (Implemented on November 22, 2001)

Management Targets

The management philosophy of the NLM Group is to pursue management

Net Salesthat balances the needs of our shareholders, customers, suppliers, employ600

ees and the regional community, and earns the respect of society. We established the NLM Group Mid-term Management Plan based on the awareness

580

that we must build a strong corporate structure through the ongoing implementation of organizational reforms.

560

This is the action plan for all Group management. We are thus prioritizing our business pursuits, including the withdrawal from unprofitable op-540

erations. We are also setting in motion plans to further strengthen
profitability, thereby reinforcing our ability to respond effectively to changes
in our operating environment and build a solid Group structure with high

520

2001

2003

2006

Billions of yen 530

550

590

growth potential.

Following is an outline of the Mid-term Management Plan.(Figures
are presented on a consolidated basis).

Vision1. We will become a corporate group of highly profitable businesses. We
will make great strides in improving our profitability and financial

Operating Profit
32

structure.
2. In business areas subject to structural problems, we will create cost24

structures that can withstand market contractions.
3. We will fully utilize our internal resources, develop our aluminum-16

based businesses, and contribute widely to society by providing prod8

ucts and services that address the issues of the 21st century, as
represented by the evolution of a recycling-based society, the increasing

0

2001

2003

2006

Billions of yen 1224

32

population of the elderly and expanding needs for amenities in general.

7Action Plans

1. Revitalizing the Building Materials Business (Shin Nikkei)

Ordinary Profit

We will establish firm foundations for profitability in this business based
24on the assumption of 900,000 housing starts annually. Through costcutting and other measures, we will make this business profitable by18

fiscal 2003.
12

2. Improving the Structure of the Extrusion Products Business
6(1) Tactical elimination of extrusion facilities
As a structural improvement initiative in our extrusion products

0

2001

2003

2006

Billions of yen 4.5

17

23

operations, which has surplus facilities and equipment, we retired
six production lines in fiscal 2000 and two extrusion machines infiscal 2001. We will do away with another two facilities in the firsthalf of fiscal 2002.

(2) Reinforcing cost-competitivenessWe will shift extrusion production, which is currently spreadthroughout the NLM Group, to highly cost-competitive plants. By
Number of Employees

the end of fiscal 2002, we will spin off NLM’s extrusion business
into a subsidiary. We will also integrate the Group’s extrusion prod-

13,500ucts sales operations.
13,0003. Reducing Overall Costs
12,500By cutting the Group’s procurement and logistics spending, reducing
variable expenses through productivity enhancement, and decreasing

12,000labor and other fixed costs, we will cut the Group’s overall expenditure
11,5008

by ¥21 billion by fiscal 2006.
2001

2003

2006

13,00012,50012,0004. Making Strong Business Stronger

Interest-Bearing Debt

(1) Actively applying internal resources400

We will apply internal resources to business areas in which we holdcompetitive edges so they can dominate the marketplace.

(2) Spinning off panel system operations

300

200

To respond more flexibly to changes in the marketplace, realize more
efficient management and strengthen the foundations of profitability, we

100

will spin off our Panel Systems Division into a subsidiary, by October
0

2001

2003

2006

Billions of yen 300

280

230

2002.

5. Creating Solid New Products and Businesses
The NLM Group has worked from the core Strategic Committee For
Product Commercialization and Business Development to create new
products and businesses. Under the Mid-term Management Plan, newproducts and businesses should generate about ¥8.0 billion in operating profit, or around 25% of the total, by fiscal 2006.
Return on Capital Employed(ROCE)
10.0

Financial Targets

1. Reduce interest-bearing debt by ¥70.0 billion, to ¥230 billion,by the end of fiscal 2006

7.5

5.0

2.5

2. Achieve a return on capital employed of more than 8%, in fiscal 2006

0

%

2001

2003

2006

3.0

6.6

8.6

9

Review of Operations

Aluminum Ingot and Chemicals
In its alumina andchemicals operations,
NLM responded swiftly
to changes in the market environment byreinforcing production
for highly promisingproducts, such asaluminum hydroxide
High-purity aluminum ingots
for flame retardants
and organic chloride
chemicals for functional materials. Although shipments of aluminum hydroxide, chlorides and otherproducts were strong, sales plunged for high-valueadded products, including low-soda alumina usedprimarily as a base material for electro-ceramics andwhite aluminum hydroxide used in artificial marble,
owing to the IT recession.
In aluminum and aluminum alloy operations, shipments were strong in the major client category of automobile manufacturing, but the sluggish economic
environment led to a significant drop in sales, particularly in Southeast Asia.
As a result of these factors, sales of aluminum ingots
and chemicals declined 7.0%, or ¥6.4 billion, to ¥84.8
billion. Operating profit decreased 34.4%, or ¥2.9 billion, to ¥5.6 billion.

High-quality alumina

10

Aluminum Sheet and Extrusions
In our aluminum sheet
operations, the increasing use of aluminum in
new automobiles, partially to reduce vehicle
weight, sustained favorable shipments to theautomobile manufacturing industry. However,significantly lower
This vehicle frame incorporates
NLM’s aluminum extrusion
demand for aluminummaterials.
foil stock for capacitors,
aluminum plate for semiconductor production equipment
and other IT-related products caused sales to decline
notably. Sales of other products also suffered from slow
demand.
In our aluminum extrusion business, marketing that
focused on promoting higher-value-added products led toa surge in sales in the automobile components and othercategories. On the other hand, lackluster demand for IT
and construction products greatly lowered sales of major
products, such as pipe stock and general-purpose materials. Our shipments of extrusion products for trucks werebasically unchanged from the previous year.
In this environment, our sales of aluminum sheet andextrusion products fell 21.4%, or ¥14.8 billion, to ¥54.2
billion. We also posted an operating loss of ¥620 million,
compared with an operating profit of ¥1.4 billion in fiscal
2000.
Fabricated Products and Others
In aluminum foil, aluminum powder and paste,
our sales of aluminum
powders and pastes
decreased in Japan, but
sales of new products
grew, while exports tocountries in the Association of South East Asian
Aluminum paste
Nations (ASEAN) andEast Asia were favorable.
Our sales of high-purity

aluminum foil for capacitors declined considerably under
the influence of the IT recession.
In our transportation-related business, new productdevelopment, successful efforts to win customers and atrend toward manufacturing lighter trucks supported an
overall rise in revenues from special-equipping operations for vans and trailers, offsetting a decline in sales ofstandard trucks. Sales of automobile-related products
slipped slightly in fiscal 2001, owing mainly to suchfactors as our partial transfer of air-conditioner capacitor
production to subsidiary Nikkei Heat Exchanger Company, Ltd. In our shaped parts activities, shipments fell fora new-model brake caliper we introduced in fiscal 2000,
but we began accepting orders for new products, particularly for automobile parts.
In electronic materials, large inventory adjustments in
sectors related to IT forced NLM to adjust production ofanodized aluminum foil for electrolytic capacitors, greatly
lowering sales.
Orders for landscape engineering products slid owing
to a reduction in public investment under the Japanese
government’s structural reform programs. Intensifiedcompetition caused prices to plunge, creating an extremely severe operating environment. We transferredsales activities in this category to Sumikei-Nikkei Engineering Co., Ltd., our 50-50 joint venture with Sumitomo
Light Metal Industries, Ltd., on August 1, 2000. NLM’ssales since that time have been to the joint venture.
In our panel systems business, sales of commercial
freezers and refrigerators were favorable in the first half
to supermarkets, convenience stores, food-processing
plants and other businesses subject to Hazardous Analysis
and Critical Control Point (HACCP) regulations. Althoughsuch issues as Bovine Spongiform Encephalopathy (BSE),or “mad cow disease,” led to a drop in private-sector
capital investment in the second half, sales for the year increased. On the other hand, despite vigorous marketing
efforts, shipments of our clean rooms declined, as semiconductor and liquid crystal device (LCD) manufacturers
decided to postpone or cancel large facility investments
amid the IT recession.
Sales decreased in NLM’s other processed products andrelated businesses. Shipments declined for numerous
products in the temporary construction and industrial

materials category because of the sluggish economic environment and intensified price competition. However, customer confidence in our technological capabilities wasreflected in increased orders for maintenance equipmentfor nuclear power facilities and investments in truck-related products. Sales of containers (aluminum mini-kegs
for beer) decreased, owing to the increasing popularity of
low-malt liquor. In activities related to housings, particularly for cellular telephone and mobile communications
base stations, preparations for third-generation cellular
telephone services contributed to a large increase insales. Sales were sluggish for other products in this segment, owing primarily to the stagnant economy and deflationary pressures.
As a result of the aforementioned factors, sales in the
fabricated products and others segment fell 8.0%, or¥18.1 billion, to ¥207.7 billion. Operating profit was
down 11.9%, or ¥1.3 billion, to ¥9.5 billion.
Building Materials
Group sales of housing
construction materials
slipped, as housing starts
in Japan decreased 3.3%
from the previous year,
to 1.2 million, the second consecutive year of
decline. The harsh operating environment was
exacerbated by decreasThe Gate City Osaki Building inTokyo adopts Shin Nikkei‘sing prices of new homes,
aluminum building materials.
which forced prices of
construction materials down. In this environment, the
NLM Group, particularly Shin Nikkei, worked to redresstransaction prices in the building materials business, which
was hit particularly hard by price reductions. We also
strove to cut distribution costs while raising product quality to improve profitability.
As a result of these activities, although sales in this segment decreased 2.3%, or ¥4.1 billion, to ¥175.2 billion,
operating profit was ¥328 million, against an operating
loss of ¥5.3 billion in fiscal 2000. This success represents
the first operating profit from building materials activities
in five years.

11Financial Review

Overview

product categories also performed worse than the fiscal

In fiscal 2001, ended March 31, 2002, the Japanese

2000 and the prices fell . As a result, consolidated net

economy performed poorly, due to both the prolonged IT

sales decreased 7.7%, or ¥43.4 billion, to ¥521.9 billion

recession and the sluggishness of the world economy,($3,916 million).
The cost of sales fell 9.2%, or ¥42.2 billion, to ¥419.2

following the terrorist attacks in the U.S. Against thisbackdrop, the performance of Japanese corporate sectorbillion ($3,146 million), and the cost of sales ratio

deteriorated amidst declining business investment,slipped 1.3 percentage points, to 80.3%. Cost-reduction

increased job-cuts and falling personal income which

efforts and a variety of activities to boost profitability

dampened consumer-spending and accelerated thehelped NLM reduce selling, general and administrative

domestic recession.

expenses 0.7%, or ¥656 million, to ¥90.9 billion ($683

In the face of this difficult operating environment,

million). This limited the percentage fall in operating

shipments from the aluminum industry fell due to lower

profit to 3.9%, or ¥482 million, to ¥11.7 billion ($88

demand in the construction, IT and other industries.

million).
Non-operating income declined 0.4%, or ¥33 million,

Generally speaking, weak domestic demand andto ¥8.3 billion ($62 million), primarily because of

intensified price competition hampered profitability.

decrease in equity in earnings of affiliated companies
Earnings and Expenses

despite a ¥1.3 billion increase in amortization of negative

NLM saw a sharp fall in shipments of foil stock for

goodwill due to reorganization of Shin Nikkei into a

capacitors due to the IT recession, while all otherwholly owned subsidiary in August 2000.

Net Sales By Segment

Total Shareholders’ Equity

750

150

20

600

120

16

450

90

12

300

60

8

150

30

4

0

1998

1999

2000

2001

2002

0

1998

1999

2000

2001

2002

Equity Ratio

0

1998

1999

2000

2001

2002

* including intersegment transactions
Billions of yen

Years ended March 31■ Aluminum Ingot and Chemicals■ Aluminum Sheet and Extrusions■ Fabricated Products and Others■ Building Materials

12

Billions of yen

As of March 31%

As of March 31

Non-operating expenses were lower by 13.7%, or ¥2.4

volume of materials and components procurement in line

billion, to ¥15.2 billion ($114 million), due in part to awith weak demand and less production, notes and¥1.7 billion decline in the amortization of transition

accounts payable-trade decreased significantly, andobligation for employee retirement benefits after theinterest-bearing debt fell 2.8%, or ¥8.4 billion, to ¥289.9

effort of restructuring the entity in fiscal 2000. In thisbillion ($2,175 million).

environment, ordinary profit augmented 65.3%, or ¥1.9
billion, to ¥4.8 billion ($36 million).
The Company posted special gains of ¥1.7 billion ($13

Shareholders’ equity increased 2.3%, or ¥1.8 billion, to¥83.3 billion ($625 million), largely due to higher net
income of ¥1.5 billion. Shareholders’ equity per share of

million), primarily due to the sales of the fixed assets.

common stock was ¥153.36 ($1.15), and the sharehold-

Furthermore, in fiscal 2001, the company did not incurers’ equity ratio rose 1.2 percentage points to 14.8%.

massive special losses caused by restructuring. Therefore,

Because NLM adopted the market-valuation method for

NLM was able to turn around a consolidated net loss offinancial instruments in its accounting procedures from

¥21.9 billion in fiscal 2000, into a consolidated net

fiscal 2001, it posted unrealized gains of ¥324 million on

income of ¥1.5 billion ($11 million). Net income perinvestments held in other securities. NLM decreased its

share of common stock was ¥2.79 ($0.02).

additional paid-in capital while it transferred ¥7.7 billion

Achieving its first net income in six years, cash
dividends of ¥1.50 ($0.01) per share of common stock

into retained earnings on the consolidation for its settlement of losses in fiscal 2000.

for fiscal 2001 were approved at the ordinary general
meeting of shareholders of the Company held on June 27,

Cash Flows2002.

Cash and cash equivalents at the end of the fiscal year
were up ¥5.9 billion, to ¥47.6 billion ($357 million).

Assets, Liabilities and Shareholders’ Equity

Net cash provided by operating activities totaled ¥26.7

Total assets decreased 6.0%, or ¥36.1 billion, to ¥564.3

billion ($200 million), due to ¥6.1 billion ($46 million)

billion ($4,235 million). Current assets dropped 7.7%,

profit in income before income taxes and minority

or ¥25.6 billion, to ¥305.8 billion ($2,295 million), dueinterest plus sharply reduced notes and accounts

primarily to a decrease of ¥24.2 billion in notes andreceivable-trade and the depreciation and amortization.

accounts receivable-trade which fell in line with the drop

Net cash used for investing activities totaled ¥12.3

in net sales. As a result of lower capital expenditures, thebillion ($92 million). While cash was generated by sales

Company decreased its fixed assets by ¥5.0 billion.

of investment securities, it was consumed in net for theInvestments and other assets fell ¥6.0 billion from thepurchase of fixed assets.

previous term, due in part to a ¥1.7 billion decrease of

Net cash used for financing activities totaled ¥9.4

investment securities, resulting from sales of stocks.

billion ($71 million). While cash came in from such

Total liabilities shrank 7.4%, or ¥38.1 billion, to¥476.6 billion ($3,577 million). Because of a drop in the

categories as proceeds from long-term debt, theredemption of bonds caused a rise of cash going-out.

13

Consolidated Balance Sheets
Nippon Light Metal Company, Ltd. and its consolidated subsidiaries
As of March 31, 2001 and 2002

Thousands of
U.S. dollars(Note 2)Millions of yen

2001
2002
2002
ASSETS
Current assets:
Cash and deposits (Notes 4 and 7) ................................................................. ¥ 40,497 ¥ 48,755 $ 365,891
172,598
1,295,295
Notes and accounts receivable—trade (Notes 7 and 14) ............................... 196,792
73,381
550,702
Inventories (Note 5)....................................................................................... 78,133
4,324
32,450
Deferred income taxes (Note 9) .....................................................................
3,932
10,64479,880
Other current assets (Notes 4 and 6) ............................................................ 15,486
Allowance for doubtful accounts ...................................................................
(3,462)(3,889)(29,186)

Total current assets .............................................................................

331,378

305,813

2,295,032

Fixed assets:
Property, plant and equipment (Notes 7 and 12)—
Buildings and structures ........................................................................... 135,090
Machinery and equipment ....................................................................... 297,498
Land ......................................................................................................... 64,198
Construction-in-progress ..........................................................................
3,888
Accumulated depreciation ....................................................................... (299,010)

136,737
302,900
64,7842,800(310,540)

1,026,169
2,273,171
486,184
21,013(2,330,507)

201,664

196,681

1,476,030

Intangible fixed assets ...................................................................................

3,436

3,941

29,576

Investments and other assets:
Investment securities (Notes 6 and 7) ......................................................
Long-term loans receivable .......................................................................
Deferred income taxes (Note 9) ...............................................................
Other assets .............................................................................................
Allowance for doubtful accounts ...............................................................

40,175
2,974
10,126
17,471(6,851)

38,515–
8,237
19,143(8,043)

289,043–
61,816143,662(60,360)

63,89557,852434,161

268,995

258,474

1,939,767¥ 600,373 ¥ 564,287 $ 4,234,799
The accompanying notes are an integral part of these statements.

14

LIABILITIES, MINORITY INTEREST IN CONSOLIDATED
Millions of yen
2001
2002
SUBSIDIARIES AND SHAREHOLDERS’ EQUITYCurrent liabilities:
Short-term borrowings and current portion of long-term debt (Note 7) ........ ¥152,333 ¥179,307
112,569
Notes and accounts payable—trade ............................................................... 136,401
Other current liabilities (Note 9)................................................................... 44,132
42,856
Total current liabilities .......................................................................

Thousands of
U.S. dollars(Note 2)
2002

$1,345,644
844,795
321,621332,866

334,732

2,512,060

Long-term liabilities:
Long-term debt (Note 7) ................................................................................ 145,923
Accrued pension and severance costs (Note 8) .............................................. 18,654
Negative goodwill (Note 3) ............................................................................
9,166
Other long-term liabilities (Note 9) ................................................................
8,065

110,565
20,042
5,240
6,023

829,756
150,409
39,32445,201

181,808

141,870

1,064,690

Minority interest in consolidated subsidiaries ..........................................

4,221

4,371

32,803

Shareholders’ equity;
Common stock—
Authorized: 1,600,000,000 shares
543,350,370 shares .........................................................
Issued:Additional paid-in capital ..............................................................................
Revaluation surplus (Note 10) .......................................................................
Retained earnings (Note 11) ..........................................................................
Net unrealized gains on securities .................................................................
Foreign currency translation adjustment .......................................................
Less: treasury stock, at cost ............................................................................

39,08532,300493
10,032–(432)(0)

39,08524,569493
19,428
324
(578)
(7)

293,321
184,3833,700
145,801
2,432(4,338)(53)

81,47883,314625,246¥600,373¥564,287$4,234,799

Contingent liabilities (Note 14)15

Consolidated Statements of Operations
Nippon Light Metal Company, Ltd. and its consolidated subsidiaries
For the years ended March 31, 2001 and 2002

Thousands of
U.S. dollars(Note 2)Millions of yen
2001

2002

2002

Net sales .......................................................................................................... ¥565,223
Cost of sales ..................................................................................................... 461,413
Gross profit ................................................................................................. 103,810
Selling, general and administrative expenses ............................................ 91,605
Operating profit ......................................................................................... 12,205
Non-operating income:Interest income .............................................................................................
249
Amortization of negative goodwill ..................................................................
2,594
Equity in earnings of affiliated companies......................................................
751
Foreign currency exchange gain, net .............................................................
1,106
Other ..........................................................................................................
3,658
Total non-operating income .....................................................................
8,358
Non-operating expenses:
Interest expense .............................................................................................
6,519
Equity in losses of affiliated companies...........................................................
—
Amortization of transition obligation for employee retirement benefits (Note 8).........
4,499
Other ..........................................................................................................
6,639
Total non-operating expenses ................................................................. 17,657
Ordinary profit ...........................................................................................
2,906
Special gains:
Gain on sale of fixed assets ............................................................................
1,531
Gain on sale of investment securities .............................................................
529
Total special gains ......................................................................................
2,060
Special losses:
Loss on devaluation of investment securities..................................................
4,222
Equity in loss of an affiliated company ...........................................................
8,682
Loss on disposal of fixed assets ......................................................................
4,471
Exchange loss on investment securities ..........................................................
4,415
Additional retirement allowance for early retirement program .......................
2,335
Suspension expenses ......................................................................................
872¥521,861
419,189
102,672
90,94911,723$3,916,405
3,145,884
770,521682,544
87,977

156
3,926
—
—
4,243
8,325

1,171
29,464——
31,84262,477

6,257
141
2,797
6,048
15,243
4,805

46,957
1,058
20,99145,388114,394
36,060

924
810
1,734

6,934
6,079
13,013

463
—
—
—
—
—

3,475
—
—
—
—
—

Total special losses ................................................................................... 24,997
Income (loss) before income taxes and minority interest................... (20,031)
Income taxes (Note 9)—current ......................................................................
3,293—deferred .....................................................................
(640)
2,653
Minority interest in income (loss) of consolidated subsidiaries .............
(779)
Net income (loss) ..................................................................................... (¥ 21,905)

463
6,076
2,916
1,163
4,079
479
¥ 1,518

3,475
45,59821,883
8,728
30,611
3,595
11,392Per share of common stock:
Net income (loss) ........................................................................................ (¥Cash dividends .............................................................................................. ¥The accompanying notes are an integral part of these statements.

16$

U.S. dollars(Note 2)

Yen

41.22) ¥
1.— ¥

2.79
1.50

$
$

0.02
0.01

Consolidated Statements of Shareholders’ Equity
Nippon Light Metal Company, Ltd. and its consolidated subsidiaries
For the years ended March 31, 2001 and 2002

Millions of yen

Number ofshares issued

Commonstock

Balance at March 31, 2000 ...................................
Net loss ..........................................................
Cash dividends ...................................................
Directors’ and statutory auditors’ bonuses ..........
Stock issued under exchange offering (Note 3) .....
Inclusion in consolidation of unconsolidated
subsidiaries .....................................................
Affiliated company newly accounted forby the equity method .......................................
Foreign currency translation adjustment .............
Net decrease in treasury stock ............................

510,825,514¥37,458¥30,837

32,524,856

1,627

1,463

Balance at March 31, 2001 ...................................
Net income ........................................................
Directors’ and statutory auditors’ bonuses ..........
Transfer from additional paid-in capital toretained earnings ............................................
Inclusion in consolidation of unconsolidated
subsidiaries .....................................................
Net unrealized gains on securities (Note 6) .........
Foreign currency translation adjustment .............
Net increase in treasury stock .............................

543,350,370

Balance at March 31, 2002 ...................................

543,350,370

Additional
Revaluation
paid-in capitalsurplus¥493

Retainedearnings

Net unrealized
gains onsecurities

Foreigncurrencytranslation
adjustment

¥ —

¥—

¥32,123(21,905)(1,013)(37)

Treasurystock(¥402)

358
506
(432)
402
¥39,085¥32,300¥493(7,731)¥10,032
1,518
(42)

¥—

(¥432)

(¥ 0)

7,731
189
324
(146)
(7)

¥39,085¥24,569¥493¥19,428¥ 324(¥578)(¥ 7)

Thousands of U.S. dollars (Note 2)

Number ofshares issued

Commonstock

Revaluation
Additional
surpluspaid-in capital

Retainedearnings

Balance at March 31, 2001 ...................................
Net income ........................................................
Directors’ and statutory auditors’ bonuses ..........
Transfer from additional paid-in capital toretained earnings ............................................
Inclusion in consolidation of unconsolidated
subsidiaries .....................................................
Net unrealized gains on securities (Note 6) .........
Foreign currency translation adjustment .............
Net increase in treasury stock .............................

543,350,370 $293,321 $242,402$3,700 $ 75,287
11,392(315)(58,019)58,019Balance at March 31, 2002 ...................................

543,350,370 $293,321 $184,383

Net unrealized
gains onsecurities$—

Foreigncurrencytranslation
adjustment($3,242)

Treasury
stock

($ 0)

1,418
2,432
(1,096)(53)$3,700 $145,801$ 2,432($4,338)($53)

The accompanying notes are an integral part of these statements.

17

Consolidated Statements of Cash Flows
Nippon Light Metal Company, Ltd. and its consolidated subsidiaries
For the years ended March 31, 2001 and 2002

Thousands of
U.S. dollars(Note 2)Millions of yen
2001

Cash flows from operating activities:
Income (loss) before income taxes and minority interest .............................. (¥20,031)
Depreciation and amortization ....................................................................... 19,368
Amortization of negative goodwill ..................................................................
(2,594)
Loss on disposal of fixed assets ......................................................................
4,471
Gain on sale of fixed assets, net ...................................................................... (1,531)
Gain on sale of investment securities .............................................................
(529)
Exchange loss on investment securities ..........................................................
4,415
Loss on devaluation of investment securities..................................................
4,222
Increase in accrued pension and severance costs..........................................
1,438Interest and dividend income ........................................................................
(494)
Interest expense .............................................................................................
6,519
Equity in losses of affiliated companies...........................................................
7,931(Increase) decrease in notes and accounts receivable—trade ....................... (3,396)(Increase) decrease in inventories ................................................................. (5,796)
Increase (decrease) in notes and accounts payable—trade .......................... 16,304
Other..............................................................................................................
202
Sub total ........................................................................................... 30,499
Interest and dividend income received ...........................................................
986
Interest paid ................................................................................................... (6,555)
Income taxes paid .........................................................................................
(2,232)
Net cash provided by operating activities ................................... 22,698
Cash flows from investing activities:
Decrease in time deposits..............................................................................
198
Payments for purchase of investment securities ..............................................
(640)
Proceeds from sale of investment securities ..................................................
1,542
Payments for purchase of fixed assets............................................................ (14,167)
Proceeds from sale of fixed assets .................................................................
3,347(Increase) decrease in long-term loans receivable ........................................
181
Other ..........................................................................................................
219
Net cash used for investing activities ..........................................
(9,320)Cash flows from financing activities:
Decrease in short-term borrowings ................................................................ (1,113)
Proceeds from long-term debt....................................................................... 13,829
Payments of long-term debt ............................................................................ (25,925)
Proceeds from sale of treasury stock .............................................................
447
Cash dividends paid by the Company .............................................................
(1,012)
Cash dividends paid to minority interest .........................................................
(42)
Other ..........................................................................................................
(472)
Net cash used for financing activities .......................................... (14,288)
Effect of exchange rate changes on cash and cash equivalents ........................
96
Net increase (decrease) in cash and cash equivalents ....................................
(814)
Cash and cash equivalents at beginning of year............................................... 41,912
Cash and cash equivalents of newly consolidated subsidiaries ........................
585
Cash and cash equivalents at end of year (Note 4) .................... ¥41,683

The accompanying notes are an integral part of these statements.

18

2002

2002

¥ 6,076$ 45,598

18,542(3,926)
—
(924)
(810)
—
463
1,376
(462)
6,257
141
24,811
4,842(22,479)
1,454
35,361
661(6,389)(2,948)26,685

139,152(29,464)—(6,934)(6,079)—3,475
10,326(3,467)
46,957
1,058
186,199
36,338(168,698)
10,912
265,373
4,961(47,947)(22,124)200,263

8
(611)
2,977
(15,235)
1,259
(289)
(359)
(12,250)

60(4,585)22,341(114,334)
9,448(2,169)(2,694)(91,933)(2,724)
41,678(47,575)
15
(2)
(395)
(413)
(9,416)156
5,175
41,683736¥47,594(20,443)
312,780(357,036)113(15)(2,964)(3,099)(70,664)
1,171
38,837
312,818
5,523$357,178

Notes to the Consolidated Financial Statements
Nippon Light Metal Company, Ltd. and its consolidated subsidiaries

1. SIGNIFICANT ACCOUNTING POLICIES:(a) Basis of presenting financial statements —The accompanying consolidated financial statements of Nippon Light Metal Company, Ltd. (“the Company”) and its consolidated subsidiaries(together “the Companies”) are prepared in accordance with accounting principles generally accepted in Japan, which are different in certain
respects from the application and disclosure requirements of International Accounting Standards. The notes to the consolidated financial
statements include financial information which is not required under accounting principles generally accepted in Japan, but is presented herein as
additional information. In addition, the consolidated statements of shareholders’ equity are not required in Japan, but are presented herein as
additional information. The accompanying consolidated financial statements include certain reclassifications and modifications for the purpose ofpresenting them in a form more familiar to readers outside Japan.
(b) Consolidation and investments in affiliated companies —The consolidated financial statements include the accounts of the Company and, with minor exceptions, companies substantially controlled by theCompany. All significant intercompany transactions and accounts are eliminated.
Investments in significant companies where the Company has significant influence over management are stated at cost plus the Company’s
share of undistributed earnings.
The difference between the cost and the underlying net equity of investments in consolidated subsidiaries or affiliates accounted for by theequity method has been allocated to identifiable assets based on fair market value at the date of acquisition. Any unassigned residual amount isrecognized as goodwill and deferred or amortized on a straight-line basis over the effective period, with the exception of minor amounts which arecharged to income in the year of acquisition.
Negative goodwill, recognized on the integration of a subsidiary company, Shin Nikkei Company, Ltd. for the year ended March 31, 2001, isbeing amortized on a straight-line basis over a 3-year period.
(c) Translation of foreign currencies —All monetary assets and liabilities denominated in foreign currencies, whether long-term or short-term, are translated into Japanese yen at theexchange rates prevailing at the balance sheet date. Resulting gains and losses are included in net profit or loss for the period.
Assets and liabilities of foreign subsidiaries and affiliates are translated into Japanese yen at the exchange rates prevailing at the balance sheet
date. Profit and loss accounts for the year are translated into Japanese yen using the average exchange rate during the year. The resulting
translation adjustments are accounted as a component of “Shareholders’ equity”, except for the minority interest portion which is allocated to“Minority interest in consolidated subsidiaries”.
(d) Cash and cash equivalents —“Cash and cash equivalents” in the consolidated statements of cash flows comprise cash on hand, bank deposits available for withdrawal on
demand and short-term investments with an original maturity of three months or less and which represent a minor risk of fluctuations in value.
(e) Inventories —Inventories are principally stated at cost, determined by the moving-average method, except for costs related to construction-type-contracts which
are specifically identified.
(f) Financial Instruments —i) Derivatives —All derivatives are stated at fair value with changes in fair value being included in the net profit or loss of the year in which they arise, except forderivatives designated as hedging instruments (see (iii) Hedge accounting).
ii) Securities —Securities held by the Company and its subsidiaries are classified into ‘Held-to-maturity debt securities’, ‘Investments in equity securities issued byunconsolidated subsidiaries and affiliates’ and ‘Other securities’.
‘Held-to-maturity debt securities’, that the Company and its subsidiaries intend to hold to maturity are stated at cost, after accounting for any
premium or discount on acquisition which is amortized over the period to maturity.
‘Investments in equity securities issued by unconsolidated subsidiaries and affiliates’ are accounted for using the equity method. Exceptionally,
investments in certain unconsolidated subsidiaries and affiliates are stated at cost because the effect of application of the equity method would be
immaterial.

19

Until the year ended March 31, 2001, ‘Other securities’ for which market quotations are available were stated at cost. However, effective fromthe year ended March 31, 2002, the Company and its domestic subsidiaries adopted the new Japanese accounting standard for financial instruments which affected the valuation method used for ‘Other securities’ with available market quotations. Under the new standard, ‘Other securities’
for which market quotations are available are stated at fair value as of the end of the year with net unrealized gains or losses being included as aseparate component of shareholders’ equity, net of related taxes. Realized gains and losses on sales are determined using the average cost method
and are included in the net profit or loss for the period. As a result of adoption of the new standard, “Investment securities”, ‘Deferred income
taxes’ included under “Other long-term liabilities”, “Minority interest in consolidated subsidiaries” and “Net unrealized gains on securities”
increased by ¥819 million ($6,147 thousand), ¥193 million ($1,448 thousand), ¥23 million ($173 thousand), and ¥324 million ($2,432
thousand), respectively, and “Deferred income taxes” included under “Investments and other assets” decreased by ¥279 million ($2,094 thousand), as compared with the amounts which would have been reported if the previous standard had been applied consistently.
‘Other securities’ for which market quotations are not available are stated at cost, except as stated in the paragraph below.
In cases where the fair value of ‘Held-to-maturity debt securities’, ‘Investments in equity securities issued by unconsolidated subsidiaries andaffiliates’ or ‘Other securities’ has declined significantly and such impairment of value is not temporary, such securities are written-down to fairvalue and the resulting losses are included in the net profit or loss for the period.
iii) Hedge accounting —The Companies use derivatives to reduce the Companies’ exposure to the risk of fluctuations in foreign exchange rates, interest rates, and the priceof aluminum ingot in the market. Derivatives designated as hedging instruments by the Companies are principally forward exchange contracts,
interest rate swap contracts and aluminum ingot forward contracts. The related hedged items are trade accounts receivable and payable, long-termbank loans, debt securities issued by the Companies, and sales or purchases of aluminum ingot. Thus, the Companies’ purchases of hedging
instruments are limited to, at maximum, the amounts of the hedged items.
Gains or losses arising from changes in the fair value of the derivatives designated as ‘hedging instruments’ are deferred as an asset or liability
and included in net profit or loss in the same period in which the gains and losses on the hedged items or transactions are recognized. The
Companies use interest rate swaps to hedge their interest rate risk exposure. Amounts receivable or payable related to the swaps are recorded ininterest expense of the underlying depts.
The Companies evaluate the effectiveness of their hedging activities by reference to the accumulated gains or losses on the hedging instruments and the related hedged items from the commencement of the hedges.
(g) Allowance for doubtful accounts —The allowance for doubtful accounts is estimated by applying the average percentage of actual bad debts in the past to the balance of receivables.
In addition, an amount deemed necessary to cover uncollectable receivables is provided on an individual account basis.
(h) Property, plant and equipment and depreciation —Property, plant and equipment are stated at cost. Depreciation is computed principally using the straight-line method at rates based on theestimated useful lives of the respective assets.
(i) Accrued pension and severance costs —“Accrued pension and severance costs” represents the estimated present value of projected benefit obligations in excess of the fair value of the plan
assets, except for the unrecognized transition amount and unrecognized actuarial differences. The unrecognized transition amount is being
amortized on a straight-line basis over 12 years, except for the unrecognized transition amount in respect of retired employees to whom the early
retirement program applied which was amortized at the time of their retirement. The unrecognized actuarial differences are being amortized on adeclining-balance basis over 12 years from the year following that in which they arise.
(j) Lease transactions —Under Japanese accounting practices, finance leases are capitalized in principle. However, finance leases without an option to transfer ownership ofthe leased assets to the lessee may be accounted for as operating leases subject to appropriate footnote disclosure. Therefore, the Companies charge
or credit periodic lease payments and receipts to income as incurred.
(k) Income taxes —Income taxes of the Company and its domestic subsidiaries consist of corporate income taxes, local inhabitants taxes and enterprise taxes. The
Company and its subsidiaries adopt the deferred tax accounting method. Income taxes are determined using the asset and liability approach,whereby deferred tax assets and liabilities are recognized in respect of temporary differences between the tax basis of assets and liabilities and those
as reported in the financial statements.

20(l) Research and development expenses and computer software —Research and development expenses are charged to income as incurred. Expenditure relating to computer software developed for internal use ischarged to income as incurred, except in case where it contributes to the generation of income or to future cost savings. In these cases it iscapitalized and amortized using the straight-line method over its estimated useful life, which is no longer than 5 years.
(m) Appropriation of retained earnings –The Japanese Commercial Code provides that appropriations of retained earnings require the approval of shareholders at an ordinary general
meeting. Appropriations of retained earnings are, therefore, not reflected in the consolidated financial statements for the year to which they relate
but are recorded in the consolidated financial statements in the subsequent fiscal year after shareholders’ approval has been obtained.
(n) Net income (loss) and dividends per share —Net income (loss) per share of common stock, shown in the accompanying consolidated statements of operations, is computed based on theweighted average number of shares outstanding during the respective year. Cash dividends per share, shown in the accompanying consolidated
statements of operations, represents dividends declared as applicable to the respective fiscal year.
(o) Reclassifications —Certain reclassifications of previously reported amounts have been made to conform with current classifications.
2. U.S. DOLLAR AMOUNTS:
The rate of ¥133.25 = U.S.$1, the approximate current rate prevailing on March 31, 2002, has been used for the purpose of presentation of the U.S.
dollar amounts in the accompanying consolidated financial statements. These amounts are included solely for convenience and should not be
construed as representations that the yen amounts actually represent, or have been or could be converted into, U.S. dollars. The amounts shown in
U.S. dollars are not intended to be computed in accordance with generally accepted translation procedures.
3. INTEGRATION OF A SUBSIDIARY COMPANY:
On August 1, 2000, a subsidiary company Shin Nikkei Company, Ltd. (“SNC”), engaged in manufacturing and sale of building material, became awholly-owned subsidiary of the Company through exchange offer procedures. Prior to the exchange offer procedures, the Company owned 66.7% ofcommon stock of SNC. The share exchange ratio was one share of SNC for 0.86 shares of the Company. The exchange was accounted for using thepurchase method. As a result, “Negative goodwill” increased by ¥11,776 million, “Minority interest in consolidated subsidiaries” decreased by¥14,866 million, “Common stock” increased by ¥1,627 million, and “Additional paid-in capital” increased by ¥1,463 million. Negative goodwill
on this transaction is being amortized on a straight-line basis over a 3-year period.
4. CASH AND CASH EQUIVALENTS:
A reconciliation of “Cash and cash equivalents” to the accounts disclosed on the balance sheets at March 31, 2001 and 2002 is as follows:
Thousands of
U.S. dollars

Millions of yen

Cash and deposits ...............................................................................................................................
Time deposits with maturity in excess of 3 months ..........................................................................
Commercial paper included in “Other current assets” ..............................................................................
Cash and cash equivalents .................................................................................................................

2001

2002

2002

¥40,497(1,343)
2,529¥41,683¥48,755(1,271)
110¥47,594$365,891(9,538)825$357,178

5. INVENTORIES:
Inventories at March 31, 2001 and 2002 comprised the following:Thousands of
U.S. dollars

Millions of yen

Finished products ...............................................................................................................................
Work-in-process, including costs related to construction-type-contracts ........................................
Raw materials and supplies ...............................................................................................................

2001

2002

2002

¥26,184
38,72913,220¥78,133¥25,340
36,001
12,040¥73,381$190,169
270,176
90,357$550,702

21

6. MARKETABLE SECURITIES AND INVESTMENT SECURITIES:(a) ‘Held-to-maturity debt securities’ with available market value —The aggregate carrying amount, market value and gross unrealized gains and losses of ‘Held-to-maturity debt securities’ with available market
values at March 31, 2001 and 2002 were as follows:
Millions of yen
2001
Carrying
amountCorporate bonds ..................................................................................................

Unrealized
gains¥2,005

Unrealized
losses¥0¥33Marketvalue¥1,972Millions of yen
2002

Corporate bonds ..................................................................................................

Carrying
amountUnrealized
gains

Unrealized
losses¥2,000¥—¥62

Marketvalue¥1,938

Thousands of U.S. dollars
2002

Corporate bonds ..................................................................................................

Carrying
amountUnrealized
gains

Unrealized
lossesMarketvalue$15,009

$ —–

$465

$14,544(b) ‘Other securities’ with available market value —The aggregate cost, carrying amount and gross unrealized gains and losses of ‘Other securities’ with available market values at March 31, 2002
were as follows:
Millions of yen
2002

Equity securities ..................................................................................................
Other ....................................................................................................................

Cost

Unrealized
gains

Unrealized
lossesCarrying
amount¥6,848209¥7,057¥1,888—¥1,888¥1,01175¥1,086¥7,725134¥7,859Thousands of U.S. dollars
2002

Equity securities ..................................................................................................
Other ....................................................................................................................

Cost

Unrealized
gains

Unrealized
lossesCarrying
amount$51,392
1,568$52,960$14,169—$14,169$7,587563$8,150$57,974
1,005$58,979

Disclosure of the above information for the fiscal year ended March 31, 2001 is not required.
(c) The realized gains and losses on sale of ‘Other securities’ during the years ended March 31, 2001 and 2002 were as follows:
Thousands of
U.S. dollars

Millions of yen
2001

Selling amount ..................................................................................................................................
Realized gains on sale .......................................................................................................................
Realized losses on sale .......................................................................................................................

22

¥776
529
—

2002

2002

¥614
105
44

$4,608788
330

(d) The carrying amounts of ‘Held-to-maturity securities’ and ‘Other securities’ without available market values at March 31, 2001 and
2002, were as follows:
Thousands of
U.S. dollars

Millions of yen
2001(1) ‘Held-to-maturity securities’:
Domestic debt securities privately offered ..................................................................................
(2) ‘Other securities’:
Equity investments in non-public companies ...........................................................................
Other ..........................................................................................................................................

2002

2002

¥ 125

¥

135

$ 1,013

11,3952,606

11,45459

85,959443(e) The redemption schedules for maturity of debt securities at March 31, 2001 and 2002 were as follows:
Millions of yen
2001
Due within
one year

Debt securities:
Government and municipal bonds .............................................................
Corporate debt securities ..............................................................................
Other .............................................................................................................
Other ....................................................................................................................

Due after one year, but Due after five years, but
within five years
within ten years

¥ 128
2,000
500
209
¥2,837

¥ —
2,000
—
28
¥2,028

¥—
—
—
2
¥ 2

Due after morethan ten years

¥125
—
—
—
¥125

Millions of yen
2002
Due within
one year

Debt securities:
Government and municipal bonds .............................................................
Corporate debt securities ..............................................................................
Other .............................................................................................................
Other ....................................................................................................................

¥110
—
—
—
¥110

Due after one year, but Due after five years, but
within five years
within ten years

¥

—
2,010
—
235
¥2,245

¥—
—
—
2
¥ 2

Due after morethan ten years

¥125
—
—
—
¥125

Thousands of U.S. dollars
2002
Due within
one year

Debt securities:
Government and municipal bonds .............................................................
Corporate debt securities ..............................................................................
Other .............................................................................................................
Other ....................................................................................................................

$826
—
—
—
$826

Due after one year, but Due after five years, but
within five years
within ten years$—
15,084—
1,764$16,848

$—
—
—
15
$15

Due after morethan ten years

$938
—
—
—
$938

23

7. SHORT-TERM BORROWINGS AND LONG-TERM DEBT:“Short-term borrowings” at March 31, 2002 bore interest at annual rates ranging from 0.580% to 3.420% and represented generally bank loans or
short-term notes maturing at various dates within one year.
“Long-term debt” at March 31 comprised the following:Thousands of
U.S. dollars

Millions of yen
2001

Loans, principally from banks and insurance companies due from 2001 to 2014
with interest rates ranging from 1.000% to 8.020%:
Secured ......................................................................................................................................
Unsecured....................................................................................................................................
Loans, principally from banks and insurance companies due from 2002 to 2014
with interest rates ranging from 0.800% to 8.020%:
Secured ......................................................................................................................................
Unsecured....................................................................................................................................
Unsecured 2.90% Bonds due November 7, 2002, redeemable before due date ................................
Unsecured 2.45% Bonds due December 5, 2001, redeemable before due date .................................
Unsecured 2.75% Bonds due December 5, 2002, redeemable before due date .................................
Unsecured 2.45% Bonds due January 10, 2002, redeemable before due date ..................................
Unsecured 2.65% Bonds due February 10, 2004, redeemable before due date ................................
Unsecured 2.40% Bonds due February 10, 2003, redeemable before due date ................................
Unsecured 2.45% Bonds due July 25, 2003, redeemable before due date .........................................
Unsecured 2.675% Bonds due August 20, 2004, redeemable before due date ..................................
Unsecured 2.175% Bonds due September 11, 2002, redeemable before due date ............................
Unsecured 2.00% Bonds due June 22, 2001, redeemable before due date ........................................
Unsecured 2.40% Bonds due July 19, 2002, redeemable before due date .........................................
Unsecured 1.25% Bonds due July 20, 2006, redeemable before due date .........................................
......................................................................................................................................
Less: portion due within one year ......................................................................................................
Total long-term debt ..........................................................................................................................

2002¥ 43,164
46,825¥——
10,00010,00010,00010,00010,00010,00010,00010,00010,000
5,000
7,000
—
191,989(46,066)¥145,923

40,64859,59410,000—10,000—10,00010,00010,00010,00010,000
—
7,000
9,000
186,242(75,677)¥110,565

—
—

2002

$

—
—

305,051447,234
75,047—75,047—75,04775,04775,04775,04775,047—52,53367,542
1,397,689(567,933)$ 829,756

Differences between the issue price and the principal amount are credited or charged to income at the time of issue.
A summary of assets pledged as collateral for “Short-term borrowings” and “Long-term debt” at March 31, 2002 is as follows:
Millions of yen

Cash and deposits ............................................................................................................................................................
Notes and accounts receivable—trade ..........................................................................................................................
Property, plant and equipment .......................................................................................................................................
Investment securities ......................................................................................................................................................

¥

Thousands of
U.S. dollars

233
332
112,303568$ 1,7492,492
842,799
4,263

Millions of yen

Thousands of
U.S. dollars¥ 75,677
42,901
32,135
13,203
16,666
5,660¥186,242$ 567,933
321,959
241,163
99,084125,073
42,477$1,397,689

The aggregate annual maturities of “Long-term debt” beyond March 31, 2002 are as follows:
Years ending March 31
2003 .................................................................................................................................................................................
2004 .................................................................................................................................................................................
2005 .................................................................................................................................................................................
2006 .................................................................................................................................................................................
2007 .................................................................................................................................................................................
Thereafter ........................................................................................................................................................................

24

8. RETIREMENT BENEFIT PLANS:The Company and its domestic subsidiaries have defined benefit tax qualified pension plans and a non-contributory plan covering substantially all
employees. Additional benefits may be granted to employees according to the conditions under which termination occurs. Certain foreignsubsidiaries have defined contribution plans.
“Accrued pension and severance costs” as of March 31, 2001 and 2002 can be analyzed as follows:
Thousands of
U.S. dollars

Millions of yen

Projected benefit obligations .............................................................................................................
Fair value of plan assets .....................................................................................................................
Unrecognized transition amount ......................................................................................................
Unrecognized actuarial differences ...................................................................................................
Prepaid pension expenses ..................................................................................................................
Accrued pension and severance costs ................................................................................................

2001

2002

2002

(¥67,577)
21,161(46,416)
25,067
2,695(18,654)—(¥18,654)(¥70,936)
21,279(49,657)
22,308
7,343(20,006)
36(¥20,042)($532,353)
159,692(372,661)
167,415
55,107(150,139)
270($150,409)

The net pension cost related to retirement benefits for the years ended March 31, 2001 and 2002 was as follows:
Thousands of
U.S. dollars

Millions of yen

Service cost ......................................................................................................................................
Interest cost ......................................................................................................................................
Expected return on plan assets ..........................................................................................................
Amortization of transition amount ...................................................................................................
Amortization of unrecognized actuarial differences .........................................................................
Net pension cost .................................................................................................................................
*1

*1

2001

2002

¥3,797
1,793
(628)
4,499
—
¥9,461¥4,141
1,748
(568)
2,797
455
¥8,573

2002$31,077
13,118(4,263)20,991
3,415$64,338

The above figures include an amount of ¥2,098 million and ¥546 million ($4,098 thousand) for the years ended March 31, 2001
and 2002, respectively, in respect of employees who retired during the respective fiscal years under the eary retirement program.
These amounts were amortized at the time of employees’ retirement.
Assumptions used in calculation of the above information were as follows:
2001

Discount rate ......................................................................................................................................
Expected rate of return on plan assets ...............................................................................................
Method of attributing the projected benefits to periods of employee service ....................................
Amortization of unrecognized actuarial differences .........................................................................
Amortization of transition amount ...................................................................................................

3.0%
3.0%
Straight-line basis
Mainly 12 years
12 years

2002

2.5%
3.0%
Straight-line basis
Mainly 12 years
12 years25

9. INCOME TAXES:
The Company and its domestic subsidiaries are subject to a number of different taxes based on income which, in aggregate, indicate a statutory
effective tax rate of approximately 42% for the years ended March 31, 2001 and 2002.
Tax losses can be carried forward for a five-year period for offset against future taxable income.
Significant components of deferred tax assets and liabilities at March 31, 2001 and 2002 were as follows:
Thousands of
U.S. dollars

Millions of yen

Deferred tax assets:
Tax loss carry forwards ...............................................................................................................
Accrued pension and severance costs .........................................................................................
Allowance for doubtful accounts ................................................................................................
Loss on write-down of investment securities ..............................................................................
Loss on disposal of fixed assets ...................................................................................................
Others ......................................................................................................................................
Total gross deferred tax assets .............................................................................................
Valuation allowance ...................................................................................................................
Total deferred tax assets, net of valuation allowance .........................................................
Deferred tax liabilities:
Depreciation ................................................................................................................................
Others ......................................................................................................................................
Total gross deferred tax liabilities .......................................................................................
Net deferred tax assets ........................................................................................................................

2001

2002

2002

¥ 20,199
5,270
2,399
6,571
3,425
8,413
46,277(31,782)
14,495¥ 26,890
6,472
2,895
1,849
1,731
7,056
46,893(34,043)
12,850$ 201,801
48,57021,726
13,876
12,991
52,953351,917(255,482)
96,435

(87)
(465)
(552)
¥ 13,943

(80)
(516)
(596)
¥ 12,254(600)(3,873)(4,473)$ 91,962

A reconciliation of the difference between the statutory tax rate and the effective income tax rate for the year ended March 31, 2002 is asfollows:
2002

Statutory tax rate ................................................................................................................................................................
Increase (decrease) in taxes resulting from:
Permanently non-deductible expenses ......................................................................................................................
Amortization of negative goodwill .............................................................................................................................
Equalization inhabitants taxes ..................................................................................................................................
Increase in valuation allowance ................................................................................................................................
Other ............................................................................................................................................................................
Effective income tax rate ...................................................................................................................................................

42.0%
7.3
(27.1)
9.4
37.2
(1.7)
67.1%

As a result of the “Loss before income taxes and minority interest” for the year ended March 31, 2001, a breakdown for fiscal 2001 is not
required to be presented.

10. REVALUATION SURPLUS:
On March 31, 2000, as permitted by the Land Revaluation Law, an equity affliate of the Company revalued its land used for business purposes.
As a result of this revaluation, the Company recognized as its share of the revaluation surplus the equity portion of the affiliate’s revaluation
surplus net of related taxes.

2611. APPROPRIATIONS OF RETAINED EARNINGS:
The following appropriation was approved at the ordinary general meeting of shareholders of the Company held on June 27, 2002.

Millions of yen

Thousands of
U.S. dollars¥815$6,116

Cash dividends.................................................................................................................................................................

12. LEASE TRANSACTIONS:The Companies charge or credit to income periodic lease payments and receipts for finance leases that do not have options to transfer ownership ofthe leased assets to the lessee. Such periodic lease payments and receipts under finance lease contracts totaled ¥2,113 million and ¥1,961 million($14,717 thousand), and ¥142 million and ¥101 million ($758 thousand), respectively, for the years ended March 31, 2001 and 2002. Future lease
payments and receipts under the Companies’ finance leases and non-cancelable operating leases, including amounts representing interest, at
March 31, 2001 and 2002 were as follows:
Thousands of
U.S. dollars

Millions of yen

Lease payments:
Due within one year ....................................................................................................................
Due beyond one year ..................................................................................................................
......................................................................................................................................
Lease receipts:
Due within one year ....................................................................................................................
Due beyond one year ..................................................................................................................
......................................................................................................................................

2001

2002

2002

¥2,382
3,027¥5,409¥1,7572,134¥3,891$13,186
16,015$29,201

¥ 288
294
¥ 582

¥ 236
163
¥ 399

$1,771
1,223$2,994

Leased assets under the Companies’ finance leases, where lessors retain ownership of leased assets, are accounted for as operating leases by theCompanies. If such leases had been capitalized, then the cost of the assets and the related accumulated depreciation at March 31, 2001 and 2002
would have been as follows:
Millions of yen
2001
Cost

Buildings and structures .......................................................................................
Machinery and equipment ...................................................................................
Intangible fixed assets ...........................................................................................

¥ 74
8,890
156
¥9,120

Accumulated
depreciation

¥ 59
4,793
77
¥4,929Net
amount

¥ 15
4,097
79
¥4,191Thousands of
U.S. dollars

Millions of yen
2002

Buildings and structures .......................................................................................
Machinery and equipment ...................................................................................
Intangible fixed assets ...........................................................................................

2002

Cost

Accumulated
depreciation

Net
amount

26
7,561
155
¥7,742

¥ 13
4,504
86
¥4,603

¥ 13
3,057
69
¥3,139¥Net
amount$97
22,942
518$23,557

27

The depreciation amount for these leased assets computed on the straight-line method over the period of the leases would have been ¥2,113
million and ¥1,961 million ($14,717 thousand) for the years ended March 31, 2001 and 2002, respectively.
Fixed assets, excluding sub-leased assets, which are leased to other companies under finance leases without options to transfer ownership ofthe leased assets to the lessee at March 31, 2001 and 2002, were as follows:
Millions of yen
2001
Cost

Machinery and equipment ...................................................................................

Accumulated
depreciation

¥153

Net
amount¥107¥46
Thousands of
U.S. dollars

Millions of yen
2002
Cost

Machinery and equipment ...................................................................................

2002

Accumulated
depreciation

¥147

Net
amount¥96

Netamount¥51$383

The depreciation amount for these leased assets computed on the straight-line method over the period of the leases would have been ¥105
million and ¥90 million ($675 thousand) for the years ended March 31, 2001 and 2002, respectively.
13. DERIVATIVES:
In the normal course of business, the Company and its subsidiaries enter into various derivative financial instruments in order to manage theexposure resulting from fluctuations in foreign currency exchange rates, interest rates and the prices of aluminum ingot in the market. The
Companies do not hold or issue derivative financial instruments for trading purposes.
The following are the interest rate swap contracts at March 31, 2002 that have been recognized as a suspension of the hedges. Accordingly, thenet unrealized gain was credited to income.
Thousands of
U.S. dollars

Millions of yen
2002
Contract
amountInterest rate swap contracts:
Variable-rate into fixed-rate obligations ............................
Fixed-rate into variable-rate obligations ...........................

¥11,000.*1
11,000.*1

Estimated
fair value¥298.*2(84.)*2

2002
Unrealized
gain/(loss)

¥141
(73)

Contract
amountEstimated
fair value

Unrealized
gain/(loss)$82,552
82,552$2,236(630)$1,058(548)*1 The “Contract amount” represents the nominal amount of the interest rate swap contracts.
*2 The fair values of the interest rate swap contracts were estimated using quotes from brokers, and represent the discounted
amounts of net future cash flows.
Any derivatives to which hedge accounting is applied are excluded from the above table.
14. CONTINGENT LIABILITIES:Contingent liabilities at March 31, 2002 for loans guaranteed and other guarantees given in the ordinary course of business amounted to ¥27,069
million ($203,144 thousand), including ¥6,027 million ($45,231 thousand) shared by other joint guarantors, and ¥5,383 million ($40,398
thousand) for notes discounted.
15. SEGMENT INFORMATION:
The Companies operate within four distinct industry segments mainly in Japan: “Aluminum ingot and chemicals”, “Aluminum sheet andextrusions”, “Fabricated products and others” and “Building materials”.
The “Aluminum ingot and chemicals” segment supplies aluminum primary and remelted ingot used for various industrial materials, andproduces a wide spectrum of aluminas and alumina hydrates ranging from raw materials to basic materials for ceramic compounds.
The “Aluminum sheet and extrusions” segment produces sheet, coil, and extrusion products consisting primarily of shapes, tubes and rods.
The “Fabricated products and others” segment produces a variety of products which include, among others, aluminum foil, aluminum
powder, wing bodies for transport vehicles, automobile components and electronic materials.

28

The “Building materials” segment produces a wide range of materials including sashes, curtain walls, and doors and fences for commercial
and residential construction.
“Corporate items” includes general and administrative expenses and other expenses not specifically related to business segments.
Export sales and operations outside Japan are insignificant.
Information by industry segment for the years ended March 31, 2001 and 2002 were as follows:
Millions of yen
2001
Aluminumingot andchemicals

Sales:
Customers ...........................................
Intersegment ......................................
Total ............................................
Operating expenses ...................................
Operating profit (loss) ..............................
Identifiable assets ......................................
Depreciation ..............................................
Capital expenditures .................................

¥ 91,172
51,026142,198
133,675¥ 8,523¥ 98,350¥ 2,849¥ 3,153

Aluminum
sheet andextrusions¥69,006
26,39595,401
94,022¥ 1,379¥91,520¥ 3,289¥ 2,620

Fabricatedproducts
and others

Building
materials¥225,763
20,731
246,494
235,683¥ 10,811¥213,424¥ 6,067¥ 7,198¥179,282
1,697
180,979
186,264(¥ 5,285)¥200,581¥ 7,069¥ 4,644

Eliminationor
corporate items¥ —(99,849)(99,849)(96,626)*1(¥ 3,223)(¥ 3,502)*2
¥
94
¥
47

Consolidated¥565,223—
565,223
553,018¥ 12,205¥600,373¥ 19,368¥ 17,662*1 Netting of corporate items...¥3,207 million *2 Netting of corporate items...¥26,484 million
Millions of yen
2002

Sales:
Customers ...........................................
Intersegment ......................................
Total ............................................
Operating expenses ...................................
Operating profit (loss) ..............................
Identifiable assets ......................................
Depreciation ..............................................
Capital expenditures .................................

Aluminumingot andchemicals

Aluminum
sheet andextrusions

Fabricatedproducts
and others

Building
materials¥ 84,775
44,795
129,570
123,981¥ 5,589¥ 95,847¥ 2,921¥ 2,984¥54,239
24,84979,08879,708(¥ 620)¥78,617¥ 3,007¥ 2,437¥207,652
18,713
226,365
216,841¥ 9,524¥201,230¥ 5,632¥ 5,610¥175,195
3,179
178,374
178,046¥
328¥184,200¥ 6,901¥ 3,856

Eliminationor
corporate items

Consolidated¥—¥521,861(91,536)—(91,536)
521,861(88,438)*1 510,138(¥ 3,098)¥ 11,723¥ 4,393 *2 ¥564,287¥
81¥ 18,542¥
60¥ 14,947*1 Netting of corporate items...¥3,063 million *2 Netting of corporate items...¥32,080 million
Thousands of U.S. dollars
2002

Sales:
Customers ..........................................
Intersegment ......................................
Total ............................................
Operating expenses ...................................
Operating profit (loss) ..............................
Identifiable assets .....................................
Depreciation ..............................................
Capital expenditures .................................

Aluminumingot andchemicals

Aluminum
sheet andextrusions

Fabricatedproducts
and others

Building
materials$636,210
336,173
972,383
930,439$ 41,944$719,302$ 21,921$ 22,394$407,047
186,484593,531
598,184($ 4,653)$589,996$ 22,567$ 18,289$1,558,364
140,435
1,698,799
1,627,324$ 71,475$1,510,169$ 42,266$ 42,102$1,314,784
23,858
1,338,642
1,336,180$
2,462$1,382,364$ 51,790$ 28,938

Eliminationor
corporate items

Consolidated$— $3,916,405(686,950)—(686,950) 3,916,405(663,699)*1 3,828,428($ 23,251) $ 87,977$ 32,968 *2 $4,234,799$
608 $ 139,152$
450 $ 112,173*1 Netting of corporate items...$22,987 thousand *2 Netting of corporate items...$240,750 thousand

29

Report of Independent Accountants

June 27, 2002
To the Board of Directors of
Nippon Light Metal Company, Ltd.
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, shareholders’ equity andof cash flows, expressed in Japanese yen, present fairly in all material respects the financial position of Nippon Light Metal Company, Ltd. and its
consolidated subsidiaries at March 31, 2001 and 2002, and the results of their operations and their cash flows for the years then ended inconformity with accounting principles generally accepted in Japan. These consolidated financial statements are the responsibility of theCompany’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our auditsin accordance with auditing standards generally accepted in Japan, which require that we plan and perform the audits to obtain reasonableassurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used andsignificant estimates made by management, and evaluating the overall consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for the opinion expressed above.
As discussed in Note 1(f) to the accompanying consolidated financial statements, effective from the year ended March 31, 2002, the Company
and its domestic subsidiaries adopted the new Japanese accounting standard for financial instruments, which affected the valuation method
used for “Other securities” with available market guotations.
The U.S. dollar amounts shown in the accompanying consolidated financial statements have been translated solely for convenience. We havereviewed this translation and, in our opinion, the consolidated financial statements expressed in Japanese yen have been translated into U.S.
dollars on the basis described in Note 2 to the consolidated financial statements.

Notice to Readers
The accompanying consolidated financial statements are not intended to present the financial position and the results of operations and of cash flows in accordance with accounting
principles and practices generally accepted in countries and jurisdictions other than Japan. Accordingly the accompanying consolidated balance sheets and the related consolidated
statements of operations, shareholders’ equity and of cash flows and their utilization are not designed for those who are not informed about Japanese accounting principles, procedures andpractices.
The standards, procedures and practices utilized in Japan to audit such financial statements may differ from those generally accepted in countries and jurisdictions other than Japan.

30

Overseas Network
Overseas Subsidiaries
and Affiliates
North America
Nikkei North America
Aluminum Inc.
Ohio, U.S.A.
Phone: 1-216-463-5565
Trading and marketing(100%)
Toyal America Inc.
Illinois, U.S.A.
Phone: 1-815-740-3037
Aluminum powder and paste(100%)
Alcan Nikkei Asia Holdings
LimitedBermudaPhone: 1-441-295-3550
Holding company for investment with
Alcan in Southeast Asia and China(40%)

EuropeToyal Europe Société Anonyme
Bedous, France
Phone: 33-5-59-983535
Aluminum powder and paste(100%)

East Asia
Alcan Nikkei Korea Limited
Seoul, Korea
Phone: 82-2-777-9195
Trading and marketing(51%) 1
Nonfemet International(China-Canada-Japan)
Aluminium Co., Ltd.
Shenzhen, China
Phone: 86-755-661-1569
Extrusion 2
Alcan Nikkei China Limited
Hong Kong, SAR, China
Phone: 852-2522-3001
Trading and marketing(51%)
Nippon Light Metal (Hong Kong)
LimitedHong Kong, SAR, China
Phone: 852-2541-5563
Building materials(100%)Southeast Asia
Alcan Nikkei Asia Company
LimitedMalaysia
Phone: 60-3-7954-5286
Management of invested companies inSoutheast Asia
(40%)
Alcan Nikkei Siam Limited
Bangkok, Thailand
Phone: 66-2-529-0136
Aluminum sheet, foil 3

Alcom Nikkei Specialty
Coatings Sdn. Bhd.
Malaysia
Phone: 60-3-3342-2234
Pre-coated finstock 5
Amalgamated Aluminium
and Alloys Sdn. Bhd.
Malaysia
Phone: 60-3-341-9500
Aluminum alloys(35%)
Nikkei Singapore Aluminium
Pte. Ltd.
Singapore
Phone: 65-222-8991
Trading and marketing(100%)
Daiki Nikkei Thai Co., Ltd.
ThailandPhone: 66-3821-4631
Aluminum alloys(35%)
1Interest held through Nikkei Hong
Kong Aluminium Co., Ltd., which is
100% owned by NLM

245%; Interest held through Alcan
Nikkei Asia Holdings Limited (ANAH)

333%; Interest held through ANAH
37%; Interest held through Nikkei
Holdings Pte. Ltd., which is 100% owned
by ANAH

459.15%; Interest held through ANAH

551%; Interest held through Aluminium
Company of Malaysia Bhd.
49%; Interest held through ANAH

Aluminium Company of
Malaysia Bhd.
Malaysia
Phone: 60-3-7956-1588
Aluminum sheet, foil, extrusions 4(As of March 31, 2002)31

Directors and Officers

Directors

Officers

Yukoh Masuda

Shigesato Sato

Chairman of the Board

President
Chief Executive Officer

Shigesato Sato
President
Representative Director

Yoshisato Hiratsuka
Executive Vice President
Senior Executive Officer

Yoshisato Hiratsuka
Akihiko Hayashi
Kimihito Kakitani
Takashi Ishiyama

Akihiko Hayashi
Executive Vice President
Senior Executive Officer

Kimihito Kakitani

Kazuyuki Hasegawa

Senior Executive Officer

Hisao Kobayashi

Shigeru Kohmura

Ariyoshi Okumura

Executive Officer

Glen R. Lucas

Michio Hara
Executive Officer

Auditors
Hideaki Nagaoka
Hajime Hosokawa
Yasuyuki Wakahara
Seiichi Takeda

Takashi Ishiyama
Executive Officer

Motoi Kobayashi
Executive Officer

Yoshinobu Hiki
Executive Officer

Takamichi Sakai
Executive Officer

Teruo Miyashita
Koji Kawakami
Tsuyoshi Nakajima
Toshikazu Wasa
Mitsuru Ishihara
Yoshiaki Kurihara(As of June 27, 2002)
32

Corporate Data

Head Office
NYK Tennoz Building
2-20, Higashi-Shinagawa 2-chome
Shinagawa-ku, Tokyo 140-8628, Japan
http://www.nikkeikin.co.jp
Phone: 03-5461-9333
Fax: 03-5461-9344
E-mail: nlmmaster@nikkeikin.co.jp
EstablishedMarch 30, 1939
Paid-In Capital¥39,085 million
Shares of Common Stock
Authorized: 1,600,000,000
Issued: 543,350,370
Number of Shareholders
56,348Stock Exchange Listings
Tokyo, Osaka and three other domestic
stock exchanges
Transfer Agent of Common Stock
The Chuo Mitsui Trust & Banking Co.,Ltd.
Last Shareholders’ Meeting
June 27, 2002

Major Shareholders
Alcan Nikkei Asia Holdings Ltd.
(8.39%)
Dai-Ichi Kangyo Bank, Ltd.
(3.71%)
Asahi Mutual Life Insurance Co.
(3.64%)
Industrial Bank of Japan, Ltd.
(3.46%)The Sumitomo Trust & Banking
Co., Ltd.
(3.22%)The Chuo Mitsui Trust & Banking Co., Ltd.
(3.08%)The Light Metal Educational
Foundation, Inc.
(2.74%)
Namekawa Aluminum Co., Ltd.
(2.67%)
Nikkei-Keiyu-Kai(2.09%)
Itochu Co., Ltd.
(2.05%)

Major Domestic AffiliatedCompanies
Shin Nikkei Company, Ltd.
Aluminum sashes, construction materials1
Nippon Fruehauf Co., Ltd.
Aluminum vans, trucks, trailers, marine
containers(51%)
Toyo Aluminium K.K.
Aluminum foil, powder and paste(100%)
Riken Light Metal Industrial Co., Ltd.
Aluminum construction materials(100%)
Nippon Electrode Co., Ltd.
Carbon for iron and steel blast furnaces
and for aluminum smelting, and othertypes of carbon(100%)
Nikkei Sangyo Co., Ltd.
Aluminum welding rods, various kinds ofcontract work
(98.6%)
Nikkei Information System Co., Ltd.
Computer operation under contract,
marketing office(100%)
Nikkei Logistics Co., Ltd.
Transport, warehousing 2
Nikkei Products Co., Ltd.
Sales of household utensils(100%)
Nikkei Extrusions Co., Ltd.
Aluminum extruded products(100%)
198%; Direct interest by NLM
2%; Interest held through Nikkei Sangyo Co., Ltd.
246%; Direct interest by NLM
44%; Interest held through Shin Nikkei Co., Ltd.
10%; Interest held through Nippon Fruehauf Co., Ltd.

(As of March 31, 2002)
33

Nippon Light Metal Company, Ltd.
NYK Tennoz Building,
2-20, Higashi-Shinagawa 2-chome
Shinagawa-ku, Tokyo 140-8628, Japan
http://www.nikkeikin.co.jp

Printed in Japan