Consolidated Financial Results for the Year Ended March 31, 2015
Mitsubishi Materials Corporation
Tokyo, JapanMay 12, 2015
Stock code:
Shares listed:
URL:
Representative:
For further information please contact:

5711
Tokyo Stock Exchange
http://www.mmc.co.jp/
Mr. Akira Takeuchi, President
Mr. Naoya Sasaki, Manager, Corporate Communications & IR Dept.
Tel: +81-3-5252-5206
June 26, 2015
June 1, 2015
June 26, 2015
Yes
Yes (For Corporate Investors)

Scheduled date of Ordinary General Meeting of Shareholders:
Scheduled date of start of dividend payment:
Scheduled date of filing of financial statements:
Supplementary materials for financial results:
Investor conference for financial results:

1. Results of the year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)(1) Results of operations:(Millions of yen)
(Percentage changes relative to previous corresponding period)
Net sales

Operating profit

7.2 (%)¥71,871

8.4 (%)

Ordinary income

Net income

Year ended Mar. 31, 2015

¥1,517,265¥81,093

5.5 (%)¥56,147

6.8 (%)

Year ended Mar. 31, 2014
(Note) Comprehensive income¥1,414,796
9.9 (%) ¥66,281 26.3 (%) ¥76,902
Year ended Mar. 31, 2015: 120,954 million yen (43.0%)
Year ended Mar. 31, 2014:
84,565 million yen (-6.3%)

3.3 (%)¥52,55142.2 (%)(Yen)
Net income
per share

Diluted net
income per share

Year ended Mar. 31, 2015¥42.85
Year ended Mar. 31, 2014¥40.10(Reference) Equity losses and earnings of affiliates

Net income/shareholders’ equity

11.1 (%)
12.2 (%)
Year ended Mar. 31, 2015:
Year ended Mar. 31, 2014:

Ordinary income/total assets

4.4 (%)
4.3 (%)
6,557 million yen
4,377 million yen

Operatingprofit/net sales
4.7 (%)
4.7 (%)(2) Financial position:

As of Mar. 31, 2015
As of Mar. 31, 2014
(Reference) Shareholders’ equity

Shareholders’ equity
ratio(Millions of yen)
Shareholders’ equity
per share

Total assets

Net assets¥1,898,157¥629,514

29.0 (%)¥420.36¥1,778,505
As of Mar. 31, 2015:
As of Mar. 31, 2014:¥525,707
550,762million yen
456,749 million yen

25.7 (%)¥348.54(3) Cash flows:
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Year ended Mar. 31, 2015

¥108,070¥(42,366)¥(42,273)

Year ended Mar. 31, 2014

¥102,932¥(44,863)¥(69,329)(Millions of yen)
Cash and cash
equivalents at endof year¥92,079¥62,078

2. Dividend payments(Yen)
Dividends per share
First

SecondThird

quarterquarterquarterYear ended
Mar. 31, 2014
Year ended
Mar. 31, 2015

Year-end

AnnualTotal dividends(Annual)Dividend ratio(Consolidated)

Dividends/
net assets(Consolidated)

-

¥2.00

-

¥4.00

¥6.00

¥7,863 million

15.0 (%)

1.8 (%)

-

¥3.00

-

¥5.00

¥8.00

¥10,482million

18.7 (%)

2.1 (%)

-

¥5.00

-

¥5.00

¥10.00Year ending
Mar. 31, 201620.2 (%)(Forecast)

3. Forecast (From April 1, 2015 to March 31, 2016)
OperatingprofitNet sales
Six months ending
September 30, 2015
Year ending March 31,
2016¥770,000(Millions of yen)
(Percentage changes relative to previous corresponding period)
Net income
Net income per
attributable toOrdinary income
Shareowners of theparent2.5 (%)¥36,000 5.8 (%)¥38,500 -3.9 (%)¥41,000 76.4 (%)¥31.29 (yen)¥1,580,000 4.1 (%)¥85,000 18.3 (%)¥92,000 13.4 (%)¥65,000 15.8 (%)¥49.61 (yen)Notes:(1) Significant changes of subsidiaries during the period (including changes in scope of consolidation): None
(2) Changes in accounting policies; changes in accounting estimates; restatements(i) Changes in accounting policies due to amendment of accounting standards: Yes(ii) Other changes in accounting policies: Yes(iii) Changes in accounting estimates: Yes(iv) Restatements: None
(3) Number of issued shares (common stock)(i) Number of issued shares at end of year (including treasury shares)
Year ended March 31, 2015:
1,314,895,351 sharesYear ended March 31, 2014:
1,314,895,351 shares(ii) Number of treasury shares at end of year
Year ended March 31, 2015:
4,677,305sharesYear ended March 31, 2014:
4,449,074 shares(iii) Average number of shares during the period
Year ended March 31, 2015:
1,310,342,256 sharesYear ended March 31, 2014:
1,310,573,898 shares(Reference) Summary of nonconsolidated financial results
Nonconsolidated results of operations of the year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)(1) Nonconsolidated results of operations:(Millions of yen)
(Percentage changes relative to previous corresponding period)
Net sales

Operating profit

Ordinary income

Net income

Year ended Mar. 31, 2015

810,505

10.2 (%)

23,7082.3 (%)

35,699-15.3 (%)

33,193-21.7 (%)

Year ended Mar. 31, 2014

735,558

9.2 (%)

23,18026.8 (%)

42,134-22.5 (%)

42,377-5.3 (%)

Year ended Mar. 31, 2015
Year ended Mar. 31, 2014

Net Income per share

Diluted net income per share

25.33 (yen)32.33 (yen)-(2) Nonconsolidated financial position:(Millions of yen)

As of Mar. 31, 2015
As of Mar. 31, 2014
(Reference) Shareholders’ equity

Shareholders’ equity
ratio

Total assets

Net assets

1,252,174

432,265

34.5 (%)

398,674
432,265million yen
398,674 million yen

33.9 (%)

1,177,558
As of Mar. 31, 2015:
As of Mar. 31, 2014:

Shareholders’ equity
per share
329.91 (yen)304.22 (yen)Indication regarding the situation of audit procedures
As of the disclosure of these financial results, audit procedures of the financial statements pursuant to the Financial
Instruments and Exchange Act are in progress.
Appropriate use of business forecasts and other special items(Notes regarding descriptions of earnings forecasts and other forward-looking statements, etc.)
Earnings forecasts and other forward-looking statements in this document are based on information currently available
to the Company’s management and certain assumptions judged rational, and we do not promise that the forecasts in thisreport will be achieved. Accordingly, there might be cases in which actual results materially differ from forecasts of thisreport. To use assumptions for forecasts, see (3) Outlook for the Year Ending March 31, 2016 (page 4) under “1. Analysis
of Business Results and Financial Position (1) Analysis of Business Results”.
(Method of obtaining supplementary information to and contents of the financial results briefing)
Mitsubishi Materials Corporation is scheduled to hold financial results briefing for institutional investors on May 14,2015 (Thursday). Supplementary information to the financial results to be used in this briefing is being released on
TDnet and on the Company’s website with the announcement of the consolidated financial results for the year ended
March 31, 2015.

Contents

1. Analysis of Business Results and Financial Position .........................................................................................P2(1) Analysis of Business Results .................................................................................................................. P2(2) Analysis of Financial Position ................................................................................................................ P4(3) Basic Profit Distribution Policies and Dividend Payments .................................................................... P5(4) Business and Other Risks ........................................................................................................................ P6
2. Management Policies ......................................................................................................................................... .P8(1) Basic Group Management Policies ......................................................................................................... P8(2) Target Management Indicator, Medium- and Long-term Management Strategies
and Issues to Be Addressed ................................................................................................................... .P8
3. Basic Perspective on Selection of Accounting Standards ............................................................................... P11
4. Consolidated Financial Statements ................................................................................................................. P12(1) Consolidated Balance Sheets ..................................................................................................................... P12(2) Consolidated Statement of Operations and Consolidated Statement of Comprehensive Income
Consolidated Statement of Operations ............................................................................................... P14
Consolidated Statement of Comprehensive Income ........................................................................... P15(3) Statement of Changes in Consolidated Shareholders’ Equity .................................................................. P16(4) Consolidated Statements of Cash Flows ..................................................................................................... P19(5) Segment Information .................................................................................................................................. P21(6) Per-share Information ................................................................................................................................. P26(7) Important Subsequent Events ...................................................................................................................... P26

11. Analysis of Business Results and Financial Position(1) Analysis of Business Results
1) Results for the Year Ended March 31, 2015
During the fiscal year ended March 31, 2015, overall the global economy headed toward modest recovery
thanks to a steady ongoing U.S. economic rebound. In Asia, however, economic growth continued to slow in
China and other countries.
In spite of the negative impact of last-minute demand after the increase in the consumption tax rate, overall
the Japanese economy sustained a gradual recovery, thanks to improvement in such areas as employment andincome.
Looking at the Mitsubishi Materials Group’s operating environment, ongoing yen depreciation affectedbusiness overall. Meanwhile, the Group faced such negative factors as construction delays and falling prices ofcopper and other key metals in overseas markets.
Against this backdrop, the Group embarked on the medium-term management plan (FY2015–2017),“Materials Premium 2016—Challenge to become the world’s leading business group.” This plan defines thegroupwide growth strategies of “Fortifying the foundation for growth,” “Strengthening global competitiveness”
and “Pursuing a recycling-based business model.” The Group continued to implement a variety of measures
based on these strategies, established new overseas bases—particularly in Asia, and underwent a process ofbusiness selection and focus, among other activities.
As a result, consolidated net sales for the fiscal year amounted to ¥1,517,265 million, up 7.2% from theprevious fiscal year. Operating profit increased 8.4% to ¥71,871 million, and ordinary income increased 5.5% to¥81,093 million. Net income increased 6.8% to ¥56,147 million.
2) Overview of Segments
The Company revised its reporting segments during the year ended March 31, 2015. Details are provided in“4. (5) Segment Information.” Figures below for the preceding fiscal year have been retroactively adjusted toaccord with the post-revision segments.
(Cement)
Net sales
Operating profit
Ordinary income

FY 2014¥190.119.1¥18.8

FY 2015¥193.3
17.3¥16.7(Billions of yen)
Increase/decrease (%)¥3.1(1.6%)(1.7)(-9.0%)¥(2.0)(-11.1%)In the domestic cement business, overall demand declined and sales volumes decreased, except for export sales.
Contributing factors included labor shortages in the construction industry, which led to unsuccessful bids for public
works and delays on private-sector works projects, as well as a downturn in housing construction. In the UnitedStates, bad weather at the beginning and end of the year in Southern California led to construction delays andbusiness policies emphasizing selling prices, both contributed to driving down sales volumes. In China, demandremained robust thanks to a high-speed rail construction project in Shandong Province and new airport construction.
However, sales volumes declined as a result of a falloff in demand related to real-estate investment. In the entire
cement business, production amounted to 12.0 million tons, down 0.3 million ton from the previous fiscal year.
Revised selling prices on cement and ready-mixed concrete boosted sales in the United States, although
operating costs increased.
As a result, sales increased for the segment as a whole, while operating profit fell.
Overall, ordinary income fell year on year, due to the decline in operating profit, among other factors.

(Metals)
Net sales
Operating profit
Ordinary income

FY 2014¥728.1
23.9¥38.0

FY 2015¥811.624.8¥32.8(Billions of yen)
Increase/decrease (%)¥83.4(11.5%)
0.8(3.7%)¥(5.1)(-13.6%)In the copper business, domestic smelters and refineries experienced higher electricity and other operating costs.
In addition, the Naoshima Smelter and Refinery underwent regularly scheduled furnace repairs. However,substantial production increases at PT Smelting in Indonesia helped drive up sales and profits. For the segment as
a whole, copper cathode production amounted to 555 thousand tons, up 41 thousand tons from the previous fiscal
2year.
In gold and other valuable metals, sales and profit both increased as a result of higher production volumes,
stemming from higher ore grades.
In processed copper products, sales of products for automobiles increased, but sales of products for nuclear
power stations fell. Consequently, sales rose but profit fell.
Consequently, the overall business recorded year-on-year increases in net sales and operating profit.
Ordinary income for the overall segment was down from the preceding fiscal year, due to lower dividend
income and equity in earnings of affiliates.

(Advanced Materials & Tools)
Net sales
Operating profit
Ordinary income

FY 2014¥145.814.0¥13.9

FY 2015¥134.6
16.7¥16.5(Billions of yen)
Increase/decrease (%)¥(11.2)(-7.7%)
2.6(18.7%)¥2.5(18.4%)

In cemented carbide products, net sales and operating profit both increased thanks to higher demand in Japan andoverseas, particularly the United States, Europe and Southeast Asia, as well as proactive sales promotion efforts.
In high-performance alloy products, sales and profits were down. Sales of products for automobiles
remained favorable, notably for North America. However, costs rose in tandem with increases in production
capacity. Other contributing factors were the fact that Mitsubishi Materials C.M.I. Corporation (now NIDEC
SANKYO CMI CORPORATION) was excluded from the Mitsubishi Materials Group’s subsidiaries in January
2014, while MMC Superalloy Corporation (now Hitachi Metals MMC Superalloy, Ltd.) became an equitymethod affiliate of the Group in July 2014.
Consequently, this segment recorded lower sales overall, while operating profit increased. Ordinary income
rose year on year, owing to higher operating profit.

(Electronic Materials & Components)
Net sales
Operating profit
Ordinary income

FY 2014
¥67.7
4.0
¥2.1

FY 2015
¥67.0
4.4
¥7.2

(Billions of yen)
Increase/decrease (%)¥(0.7)(-1.1%)
0.4(11.7%)¥5.0(231.3%)In the advanced materials business, sales of products related to semiconductor manufacturing equipment
were solid, but sales of products used in smartphone LSIs and displays decreased. Sales of products for hybrid
automobiles also declined. This situation led to higher sales but lower profits.
The electronic components business saw increases in both net sales and operating profit, benefiting fromincreased sales of products for household appliances.
In polycrystalline silicon and chemical products, sales of polycrystalline silicon decreased. However,depreciation and amortization expenses for the Yokkaichi Plant diminished, as impairment losses were recordedon assets at the Yokkaichi Plant in the preceding fiscal year, and sales of automotive chemical products increased.
Sales in this area consequently fell, while profit increased.
Owing to the abovementioned factors, net sales fell for the segment as a whole, but operating profit grew.
For the segment overall, ordinary income rose year on year, buoyed by the increase in operating profit andhigher equity in earnings of affiliates.

3

(Aluminum)
Net sales
Operating profit
Ordinary income

FY 2014¥151.55.5¥4.7

FY 2015¥159.4
5.6¥5.1(Billions of yen)
Increase/decrease (%)¥7.8(5.2%)
0.1(2.4%)¥0.3(8.4%)In the aluminum cans business, demand increased for regular cans—mainly for beer-like beverages.
Demand for bottle cans for black coffee and tea-based beverages also expanded.
In rolled aluminum and processed aluminum products, demand for products used in solar cells declined,
but demand for automotive products expanded.
Overall, the aluminum segment saw an uptick in energy and material costs.
As a result, net sales and operating profit were up year on year for the overall aluminum business.
Ordinary income for the overall business increased year on year, bolstered by the rise in operating profit.

(Others)
Net sales
Operating profit
Ordinary income

FY 2014¥238.77.3¥8.0

FY 2015¥241.2
9.3¥9.8(Billions of yen)
Increase/decrease (%)¥2.4(1.0%)
1.9(26.6%)¥1.8(22.5%)In the energy-related business, coal sales were down but sales related to nuclear power increased, resulting inlower sales but increased profits.
In the “E-waste” (used electronics and electrical products) recycling business, sales and profits were down,
due to a reduction in the handling volume owing to a reduced impact from last-minute demand after the increasein the consumption tax rate.
Orders for nuclear energy and engineering services amounted to ¥68.6 billion, up ¥3.1 billion from theprevious fiscal year. The order backlog at the end of the period was ¥29.6 billion, up ¥4.7 billion from a year
earlier.

3) Outlook for the Year Ending March 31, 2016
Overall, the global economy is expected to see a continued modest recovery, led by advanced countries, althougheconomic growth is expected to slow in China and other emerging markets.
The Japanese economy is expected to continue enjoying a gradual recovery, with lower crude oil prices
and the impact of yen depreciation contributing to improvements in corporate earnings and the employment andincome environment.
The Group expects its operating environment be characterized by firm private-sector housing investment
and capital investment centering on large corporations supported by domestic economic recovery. At the sametime, uncertainty persists with regard to current price decreases on copper and other key metals.
Against this backdrop, the Group strive to grow by implementing the measures outlined in “2.
Management Policies.”
In this environment, for the fiscal year ending March 31, 2016, our consolidated operating performance
forecasts call for net sales of ¥1,580 billion, operating profit of ¥85 billion, ordinary income of ¥92 billion and net
income attributable to owners of the parent of ¥65 billion.
(2) Analysis of Financial Position
At March 31, 2015, total assets amounted to ¥1,898.1 billion, up ¥119.6 billion from a year earlier, mainly due toan increase in cash and deposits.
Total liabilities increased ¥15.8 billion, to ¥1,268.6 billion, primarily because of an increase in notes andaccounts payable–trade.
(Cash Flows from Operating Activities)
Net cash provided by operating activities amounted to ¥108.0 billion, up ¥5.1 billion from the previous fiscal
year. This rise was due mainly to robust performance.
4

(Cash Flows from Investing Activities)
Net cash used in investing activities totaled ¥42.3 billion, down ¥2.4 billion from the previous fiscal year. This
cash was primarily used for outlays related to capital investments.
(Cash Flows from Financing Activities)
Together, operating activities and investing activities produced a net inflow of ¥65.7 billion, which was mainly
applied to the redemption of bonds. Accordingly, net cash used in financing activities was ¥42.2 billion, down ¥27.0
billion from the previous fiscal year.
As a result of the above, as well as exchange rate changes and other factors, the balance of cash and cash
equivalents at March 31, 2015, stood at ¥92.0 billion, up ¥30.0 billion from March 31, 2014.
Below is a summary of major cash flow indicators.

Equity ratio (%)
Equity ratio on a marketvalue basis (%)
Ratio of interest-bearing
debt to cash flow
Interest coverage ratio

March 31,
2011
18.7

March 31,
2012
20.0

March 31,
2013
22.4

March 31,
2014
25.7

March 31,
2015
29.0

20.1

19.6

19.4

21.6

27.9

7.1

8.0

7.1

6.5

6.0

7.8

8.3

9.0

10.2

12.9

Equity ratio:
Equity ratio on a market-value basis:
Ratio of interest-bearing debt to cash flow:
Interest coverage ratio:

Shareholders’ equity/Total assets
Total value of shares at market price/Total assets
Interest-bearing debt/Cash flow
Operating cash flow/Interest payments(Note 1) All indicators are calculated on a consolidated basis.
(Note 2) Market capitalization is based on the year-end share price multiplied by the number of shares issued andoutstanding at year-end (after deducting treasury stock).
(Note 3) Cash flow is based on the net cash provided by operating activities in the Consolidated Statements of Cash
Flows.
(Note 4) Interest-bearing debt covers all interest-bearing debt in the Consolidated Balance Sheets. Interest payments
are based on the amounts shown in the Consolidated Statements of Cash Flows.

(3) Basic Profit Distribution Policies and Dividend Payments
Based on its Articles of Incorporation, the Company is to distribute surpluses following resolutions at Board of
Directors meetings. We regard the distribution of profits to all shareholders as one of our most important priorities.
Accordingly, our policy is to make decisions on profit appropriation based on comprehensive consideration ofvarious factors related to overall management, such as income over the relevant period, retained earnings, andfinancial position. Based on this policy, the Board of Directors, at its meeting on May 12, 2015, decided to distributea year-end dividend of ¥5 and an interim dividend of ¥3, resulting in a full-year dividend for the year ended March
31, 2015, of ¥8 per share (up ¥2 from the preceding fiscal year).
Dividend payments for the year ending March 31, 2016 are expected to amount to ¥10 per share (¥5interim dividend plus ¥5year-end dividend).

5(4) Business and Other Risks
Because the Group, as stated in “4. Consolidated Financial Statements (5). (Segment Information),” is engaged ina broad variety of business activities, its business results and financial standing are influenced by all kinds of factors,
such as political affairs, economy, weather, market conditions, currency movements, and laws and ordinances bothin and outside the country. Listed below are the factors that may have a particularly substantial impact on the Group.
Please note that although the matters listed in this section contain items related to the future, these items havebeen chosen as of May 12, 2015.
1) Corporate reorganization
The Group is always engaged in selection and concentration of its various businesses, actively investing
management resources in businesses with high profitability, at the same time actively conducting revisions,reorganizations, and restructuring of its businesses always ready to consider possibilities regarding collaboration
with other companies. The business results and financial standing of the Group may be influenced by this process.
2) Market and customer trends
The Group offers products and services to all kinds of industries, and due to such factors as changes of the conditionsof the world economy, rapid changes in clients’ markets, changes in clients’ market share, and changes in clients’business strategies or product development trends may influence the sales of the products of the Group. Especiallythe automobile industry and the IT-related industry are exposed to intense competition in the area of prices andtechnical development, and while the Group takes every precaution endeavoring to reduce the costs and develop
new products and technologies, in cases where we cannot appropriately respond to the changes in industries andclients’ markets, the business results of the Group may be affected.
3) Rates for nonferrous metals, exchange fluctuation, etc.
In the Metals business, dividends from mines the Group made capital subscriptions into that are denominated inforeign currency, which are the main sources of profits, as well as smelting expenses, etc., are influenced by rates
for nonferrous metals, exchange fluctuations, and conditions of ore purchasing. Furthermore, in the area of
inventories, there is a risk of rates for nonferrous metals and exchange fluctuation influencing the material costs inthe period from the procurement of the ore to the production and sales of the metals.
Also, such items as nonferrous metals used as raw materials in the Aluminum business and the Advanced
Materials & Tools business as well as coal in the Cement business are international merchandise, and the acquisition
cost of these raw materials and mineral fuel can be influenced by fluctuation of market prices, exchange rates, ocean
freight, etc. for nonferrous metals and coal.
4) Trends in the conditions of the semiconductor market
The Group supplies electronic materials, polycrystalline silicon, etc. for the semiconductor industry, and is also
engaged in the silicon wafer business for semiconductors in the SUMCO Corporation, which is an equity-method
affiliate, and business results and financial standing of the Group may be influenced by conditions of thesemiconductor market.
5) Interest-bearing debt
In the term ended March 31, 2015, the interest-bearing debt of the Group was ¥630.8 billion yen (which is the sum
total of short-term loans payable, current portion of bonds payable, commercial papers, bonds payable, and longterm loans payable; same below if there are no explanatory notes) amounting to 33.2% of the total assets. And
although we are making efforts to improve the financial standing by reducing inventories, asset sales, etc., the futurefinancial situation may affect business results and financial standing of the Group.
6) Important matters related to fund procurement
Among the loans payable of the Group such as syndicated loans there are some loans, for which we contractuallypromised the maintenance of shareholders’ equity above a certain level. In cases where the Company or the Group
cannot keep these assurances due to changes for the worse of our financial situation or certain other factors, there isa risk of a duty to repay such loans before the term of payment being generated, and depending on the subsequent
steps these situations may impact the fund procurement of the Group.
7) Guaranty of liabilities
In the term ended March 31, 2015, the Group has undertaken a ¥35.4 billion yen guaranty of liabilities against
monetary liabilities of affiliated companies, which are not included in the scope of consolidation. In cases, where asituation arises in the future, in which we are requested to fulfill these guaranties of liabilities, this may affectbusiness results and financial standing of the Group.
68) Fluctuations of the market value of assets
The business results and financial standing of the Group may be influenced by fluctuations in the market value of
securities, land, and other assets possessed.
9) Retirement benefit expenses and obligations
Employees’ retirement benefit expenses and obligations are calculated based on assumptions and conditions mainly
derived from mathematical calculations. In setting these assumptions and conditions, we take into consideration
employees’ average remaining length of service, long-term interest on the Japanese government bonds, as well as
the status of pension assets including shares contributed to trust funds, but losses caused by declines in the discountrate or operations with pension assets may affect the future expenses and obligations posted by the Group.
10) Environmental regulations, etc.
In each business establishment in and outside the country, the Group makes efforts to control pollution, including
air pollution, wastewater pollution, soil pollution, and groundwater pollution, in accordance with environmental
laws and ordinances, and in dealing with abandoned mines within the country is endeavoring to control mine
pollution by, for example, preventing water pollution from mine water or conducting security management of thedumps in accordance with the Mine Safety Law. However, in cases where related laws are revised or permissible
greenhouse gas emission volume are limited, the Group may need to bear new expenses.
11) Overseas operations, etc.
The Group has production bases, sales bases, and other bases in 29 countries and regions abroad, and foreign sales
amount to 39.5% of its consolidated sales. Business results and financial standing of the Group may be influenced
by political/economic conditions, exchange rates at each country as well as changes of trading/commercial
regulations, mining policies, environmental regulations, systems of taxation, other unforeseen changes of laws or
regulations as well as differences of interpretation thereof, and changes of management policies of local cooperatorsand partners.
12) Intellectual property rights
The Group fully recognizes the importance of intellectual property rights and makes efforts to protect them, but incases where the measures to protect the same are insufficient, or in cases where our rights are illegally infringed on,
this may affect the business results and financial standing of the Group. At the same time, although the Grouphandles the intellectual property rights held by other companies with the greatest possible care, in cases where it isestablished that we have infringed on the intellectual property rights held by other companies and have to pay
liabilities, such as compensation for damages, this also may affect the business results and financial standing of theGroup.
13) Quality of the products
The Group takes all possible measures regarding the quality control, striving to offer our clients products of highquality. However, in cases where due to some unforeseen circumstances we need to conduct a large-scale recall, thismay affect the business results and financial standing of the Group.
14) Occupational health and safety, equipment accidents, etc.
The Group takes thoroughgoing measures to prevent occupational accidents and accidents to production machinery.
Our efforts span both intangible aspects such as management frameworks for occupational health, safety, security
and accident prevention, and tangible approaches such as operational and maintenance management and improving
the safety of equipment. In the event of a major accident at work or an accident to the equipment occurs, this may
affect business results and financial standing of the Group.
15) Management of information
The Group strives to ensure thoroughness in the management of information, including the handling of personal
information, but in cases where a leak of information or some other accident to information occurs, damage to our
reputation in society or other factors may affect the business results and financial standing of the Group.
16) Lawsuits, etc.
The business results and financial standing of the Group may be influenced by rulings, amicable settlements,
verdicts, etc. related to lawsuits, disputes, and other legal procedures, in which the Group is one of the parties
concerned at present, or will be one of the parties concerned in the future in relation to the business conducted by
the Group presently or in the past within the country and in foreign countries.
717) Procurement of electricity
The business results and financial standing of the Group may be influenced by increases in prices for electricity
resulting from such factors as cost increases of imported fossil fuels due to the suspension of operation of nuclear
power stations and increases in charges for renewable energy.
18) Other matters
In addition to the above, the business results and financial standing of the Group may be influenced by changes oftrade practices, terrorist attacks, wars, epidemics, earthquakes and other natural disasters, and other unexpectedcircumstances.

2. Management Policies(1) Basic Group Management Policies
In order to accelerate its corporate philosophy, “For People, Society and the Earth,” in a stable way, the Group
sets out the objective “to become the world’s leading business group committed to supporting recyclingoriented society through materials innovation, with use of our unique and distinctive technologies, by the early2020s.”(2) Target Management Indicator, Medium- and Long-Term Management Strategies and Issues to Be
Addressed
Each operation of the Group commits to create valuable products and services with our distinctive technologies
and to occupy an important position in each industry and market, so that we can “Challenge to become theworld’s leading business group” defined in the above “(1) Basic Group Management Policies.” In addition, forthe purpose of focusing on fortifying the foundation to accomplish the above objective, we have set thefollowings as the growth strategies for the overall Group in the “Materials Premium 2016–Challenge to become
the world’s leading business group.”
Further, we will continue to work to improve our financial position by raising profitability throughbusiness selection and focus, while accelerating growth by executing strategic investments worth ¥100 billion
over the three-year period focusing on M&A and expansion in production and sales locations in overseas
countries.
1) Fortifying the foundation for growth
Setting the motto “Safety and Health are First” as our first priority, we will enhance our safety management
systems and foster our corporate philosophy and culture to value safety so that we will secure stable operationalframeworks which contribute to the growth of the Group business.
2) Strengthening global competitivenessBy focusing on expanding our current production and sales locations in the overseas countries and developing
the new production and sales locations mainly in emerging countries, we will acquire new business in growing
global markets.
Furthermore, by conducting strategic marketing in the automotive and electronics industries, we will gain
access to new customers and markets so that we can boost our competitiveness.
3) Pursuing a recycling-based business model
The Group operates its business widely across the upstream (sources), midstream (materials) and downstream(processed products) markets. In addition, we will pursue the business model to circulate wastes to the
upstream market for utilization.
Through the “Material Premium” plan, which derives from our unique strength as a conglomerate, we will
facilitate the recycling of waste that that has so far been hard to process so that we can contribute to thesustainable growth of society.
The medium-term management plan mentioned above sets the following targets for the fiscal year ending
March 31, 2017: consolidated operating profit of ¥100 billion, consolidated ordinary income of ¥110 billion,
ROA of 6% and a net D/E ratio of 1.0 time or lower (assumed conditions: exchange rates of ¥100/USD and¥130/EUR and an LME copper price of 300¢/lb.)<Priorities in each business>● Cement
8

In the domestic cement business, public-sector demand is forecast to fall as the Japanese government reduces
spending on public works. On the other hand, in the Tokyo metropolitan area we anticipate construction
related to the upcoming Olympic Games, and favorable corporate earnings should fuel private-sector capital
investment. Consequently, we expect domestic demand to remain largely unchanged from its level in thefiscal year ended March 31, 2015. Under these circumstances, we will work to secure sales volumes bysteadily implementing initiatives to benefit from demand related to earthquake disaster reconstruction andlarge-scale projects leading up to the Olympics.
In the U.S. cement business, we will endeavor to boost sales volume and revise prices upward in
response to an expected demand recovery centered on the private sector as the U.S. economy steadilyrebounds. We will also endeavor to reduce manufacturing costs through stable operations, leading toincreased profitability.
In the Chinese cement business, demand related to real estate investment is unlikely to recover. Thissituation is causing market competition to grow more pronounced. Amid these conditions, we will endeavor
to adjust prices, mainly on high-quality products. We will simultaneously work to curtail manufacturing andselling costs in an aim to shore up profitability.
● Metals
We see the demand outlook for copper ore as unclear, as economic growth is leveling off in China and otheremerging markets, while the U.S. economy is recovering steadily.
Copper prices are relatively low at present. We will continue to monitor market trends, along with pricetrends in the foreign exchange and stock markets.
In processed copper products, we anticipate continued firm demand for automotive products.
Under these conditions, we will continue working to lower our breakeven point in the metals business by
reducing energy costs and suppressing fixed expenses. Through these efforts, we aim to build a solid
constitution that is impervious to price fluctuations. In copper smelting, we will work toward stable
operations at smelters in Japan and overseas while expanding recycling operations by building a processing
structure that can manage difficult-to-handle waste. By boosting revenues from waste treatment, the Group
expects to improve segment profits. In the processed copper products business, we will continue to increase
profitability by enhancing sales competitiveness through accelerated development of alloys, drawing on our
technological and development capabilities.
● Advanced Materials & Tools
In the cemented carbide products business, a certain sense of stagnation is evident due to falling levels of
economic growth in China and other emerging markets. That said, overall orders are trending upward, andover the medium to long term we expect demand to expand, particularly among our customer base in theautomotive and aircraft industries.
Under these circumstances, we will strengthen our high-performance, high-precision productdevelopment for cemented carbide products, and scale up our engineering service organization. We will alsoendeavor to step up our sales activities by augmenting our sales locations and extending our sales network,
notably in emerging markets. Furthermore, we will continue working to stabilize our sourcing of tungsten—akey constituent of cemented carbide products—by improving the recycling ratio and through other efforts todiversify procurement sources.
Turning to the high-performance alloy products business, in July 2014 MMC Superalloy Corporation’s
status changed from a consolidated subsidiary to being an equity-method affiliate, which is expected toreduce revenues and earnings in the short term. However, the Group will work to increase earnings byaugmenting its overseas production locations in response to anticipated growth in demand for sinteredproducts in tandem with expansion in the automotive industry.
● Electronic Materials & Components
In the advanced materials business, we expect sales of products for solar cells to remain strong for theforeseeable future. The demand outlook for semiconductor-related products, however, is opaque. Productdemand for hybrid automobiles is expected to decrease, due in Japan to the consumption tax hike and in the
United States to sluggish sales of hybrid automobiles. However, product demand in non-automotive
industries is expected to grow. Going forward, we aim to remain a step ahead of customers’ needs in each of
the markets in which we participate. We will strive to augment revenues and profits by making full use of ourcore technological capabilities, and strengthening our sales competitiveness and our ability to make client
proposals.
In the electronic components business, sales of products for household appliances are falling as Chinese
economic growth levels off, but we are working to increase sales of products for industrial equipment and9vehicles. We will continue working to strengthen our business structure by enhancing our sales structure in
emerging markets, introducing new products early and further reducing costs.
In polycrystalline silicon and chemical products, operations were suspended at the Yokkaichi Plant
following an explosion and fire on January 9, 2014. The plant went back on line on June 30, 2014, operatingwith a safety control system in place and with redoubled efforts to ensure operational stability.
● Aluminum
In the aluminum cans business, although we do not expect demand in the overall domestic drinks market toincrease substantially, we are working to increase our stability of orders for regular cans, and working
proactively to expand sales of aluminum bottle cans—a strategic product—for black coffee and tea-based
beverages. We will also continue making an active effort to promote advantageous procurement of raw
materials, stable product quality and cost reductions.
In the rolled aluminum and processed aluminum products business, we will work to stabilize orders of
can materials and products for automobiles and electronic materials. We will also endeavor to expand salesof automotive products overseas.
We will contribute to the establishment of a recycling-oriented society by actively promoting the Group’s
ongoing initiatives in the business of recycling used aluminum cans.

103. Basic Perspective on Selection of Accounting Standards
We are currently researching and considering the International Financial Reporting Standards (IFRS),
working to understand their content and judge what impact their adoption would have on the Group. At thisstage, no date has been set for their adoption.

11

4. Consolidated Financial Statement(1) Consolidated Balance Sheets[March 31, 2015 and 2014](Millions of yen)
As of March 31, 2014

As of March 31, 2015

Current Assets:
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred income taxes
Gold bullion on loan
Other
Allowance for doubtful accounts
Total Current Assets

63,486
219,016
81,516100,280
103,155
10,924
93,635104,293(1,843)
774,465

93,152230,874
85,100107,093
104,539
11,747100,169
137,855(2,129)868,403

Noncurrent Assets:
Property, Plant and Equipment:
Building and structures, net
Machinery and equipment, net
Land, net
Construction in progress
Other, net
Total Property, Plant and Equipment

153,369
187,634
273,048
22,51014,009650,571

151,794
197,114273,589
17,476
15,060655,034

38,816
9,410
48,226

41,249
11,68652,936

250,576
19
31,25530,356(1,168)(5,797)305,241
1,004,039
1,778,505

265,052242
30,11133,352(1,168)(5,807)321,783
1,029,753
1,898,157

ASSETS

Intangible Assets:
Goodwill
Other
Total Intangible Assets
Investments and Other Assets:
Investment securities
Retirement benefit assets
Deferred income taxes
Other
Allowance for investment loss
Allowance for doubtful accounts
Total Investments and Other Assets
Total Noncurrent Assets
Total Assets

12

(Millions of yen)
As of March 31, 2014

As of March 31, 2015

Current Liabilities:
Notes and accounts payable-trade
Short-term loans payable
Current portion of bonds payable
Commercial papers
Income taxes payable
Deferred tax liabilities
Accrued bonuses
Gold payable
Allowance for loss on disposal of inventories
Other
Total Current Liabilities

106,656
256,098
40,0009,576
648
11,975
212,760
923
99,878738,518

128,375
252,197
20,040
5,000
9,545
275
12,362
227,505
844
121,670
777,817

Noncurrent Liabilities:
Bonds payable
Long-term loans payable
Reserve for directors’ retirement benefits
Reserve for loss on subsidiaries and affiliates
Reserve for environmental measures
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Net defined benefit liability
Other
Total Noncurrent Liabilities
Total Liabilities

85,140268,605
1,740
1,698
4,117
31,65032,53252,78736,007514,279
1,252,797

65,100288,534
1,758
1,458
4,547
26,65928,44939,662
34,655490,825
1,268,643

119,457
92,272
207,354(1,782)
417,302

119,457
92,272
252,858(1,865)
462,723

31,972
218
32,907(12,348)(13,302)39,447
68,957525,707
1,778,505

42,717(1,025)33,856
15,746(3,256)88,03978,751
629,514
1,898,157

LIABILITIESNET ASSETS
Shareholders’ Equity:
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total Shareholders’ Equity
Accumulated Other Comprehensive Income:
Valuation difference on securities available for sale
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total Accumulated Other Comprehensive Income
Minority interests
Total Net Assets
Total Liabilities and Net Assets

13

(2) Consolidated Statement of Operations and Consolidated Statement of Comprehensive Income
Consolidated Statement of Operations[For the year ended March 31, 2014 and 2015](Millions of yen)

Net Sales
Cost of Sales
Gross Profit
Selling, General and Administrative Expenses
Operating Profit
Non-Operating Profit:
Interest income
Dividends income
Equity in earnings of affiliates
Rent income on noncurrent assets
Other
Total Non-Operating Profit
Non-Operating Expenses:
Interest expenses
Expenses for rent in undertaking
Loss on disposal of property, plant and equipment
Expenses for settlement of remaining business in mine
Other
Total Non-Operating Expenses
Ordinary Income
Extraordinary Income:Gain on sales of noncurrent assets
Gain on sales of marketable securities and investments insecurities
Gain on contribution of securities to retirement benefit trust
Other
Total Extraordinary Income
Extraordinary Losses:
Loss on valuation of investment securities
Loss on impairment
Other
Total Extraordinary Loss
Income before Income Taxes
Corporate Income Taxes and Business Tax
Income Tax Adjustments
Total Income Taxes
Income before Minority Interests
Minority Interests in Income
Net Income

14Year Ended Mar. 31, 2014

Year Ended Mar. 31, 2015

(Apr. 1, 2013–Mar. 31, 2014)(Apr. 1, 2014–Mar. 31, 2015)

1,414,796
1,220,333
194,463
128,181
66,281

1,517,265
1,313,259
204,006
132,135
71,871916
18,964
4,377
4,559
3,221
32,038607
15,293
6,557
4,966
3,884
31,309

9,686
3,399
2,755
2,704
2,873
21,41876,902

8,233
3,234
3,183
3,589
3,845
22,086
81,093

4,334

8,749

32,078

1,694

10,9493,796
51,1582,308
12,752850
32,308
9,555
42,71485,346
16,5099,956
26,46558,8806,328
52,551

9,278
499
8,439
18,21775,62819,649(5,574)
14,07461,553
5,406
56,147

Consolidated Statement of Comprehensive Income[For the Year Ended March 31, 2014 and 2015](Millions of yen)

Income before Minority Interests
Other Comprehensive Income
Valuation difference on securities available for sale
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Adjustments for retirement benefits
Equity in earnings of affiliates
Total other comprehensive income
Comprehensive Income(Breakdown)Comprehensive income attributable to owners of theparent company
Comprehensive income attributable to minority
interests

15

Year Ended Mar. 31, 2014

Year Ended Mar. 31, 2015

(Apr. 1, 2013–Mar. 31, 2014)(Apr. 1, 2014–Mar. 31, 2015)

58,88061,553(8,513)572
28,032
5,594
25,68584,565

10,691(1,434)
2,801
33,215
11,7142,411
59,401
120,954

70,864

106,600

13,701

14,354

(3) Statement of Changes in Consolidated Shareholders’ Equity
Year Ended Mar. 31, 2014 (Apr. 1, 2013–Mar. 31, 2014)(Millions of yen)
Shareholders’ equity
Capital stock
Balance at beginning of period

Capital surplus

Retained earnings

Treasury stock

Total
shareholders’equity119,457

92,272

158,456(1,692)

368,495

119,457

92,272

158,456(1,692)

368,495

Cumulative impact of changes
in accounting policies
Balance at beginning of
period, reflecting changes inaccounting policies
Change during the year
Cash dividends from retained
earnings
Net income
Decrease from write-downsof land revaluation excess(7,864)(7,864)52,551

52,551

1,923

1,923

281

281

2,005

2,005

Increase due to change offiscal term of consolidated
subsidiaries
Increase from rise in numberof consolidated subsidiaries
Acquisition of treasury stock
Disposition of treasury stock

(0)

(0)

(92)

(92)

2

1

Net change in items otherthan shareholders’ equity
Total change during the year
Balance at end of period-(0)48,897(90)

48,806

119,457

92,272

207,354(1,782)

417,30216

Accumulated other comprehensive income
Valuationdifference
on securities
available forsale

Balance at beginning of period

Deferred
gains orlosses onhedges

Revaluati
on reserve
for landForeigncurrencytranslation
adjustment

Total
Remeasurements

Accumulated

Minority

Total netof defined

otherinterests

assetsbenefit planscomprehensive
income40,516(1,189)34,830(37,422)-

36,73561,001

466,23140,516(1,189)34,830(37,422)-

36,73561,001

466,231

Cumulative impact of changes
in accounting policies
Balance at beginning of
period, reflecting changes inaccounting policies
Change during the year
Cash dividends from retained(7,864)

earnings
Net income

52,551

Decrease from write-downs

1,923

of land revaluation excess
Increase due to change offiscal term of consolidated

281

subsidiaries
Increase from rise in number

2,005

of consolidated subsidiaries
Acquisition of treasury stock(92)

Disposition of treasury stock

1

Net change in items other(8,543)

1,407(1,923)25,073(13,302)

2,711

7,956

10,668

Total change during the year

(8,543)

1,407(1,923)25,073(13,302)

2,711

7,956

59,475

Balance at end of period

31,972

218

32,907(12,348)(13,302)39,447

68,957525,707than shareholders’ equity

17

Year Ended Mar. 31, 2015 (Apr. 1, 2014–Mar. 31, 2015)(Millions of yen)
Shareholders’ equity
Capital stock
Balance at beginning of period
Cumulative impact ofchanges in accounting
policies
Balance at beginning of period,
reflecting changes inaccounting policies
Change during the year
Cash dividends from retained
earnings
Net income
Decrease from write-downsof land revaluation excess
Increase from rise in numberof consolidated subsidiaries
Decrease due to addition ofequity-method affiliates
Acquisition of treasury stock
Disposition of treasury stock
Net change in items otherthan shareholders’ equity
Total change during the year
Balance at end of period

Capital surplus

119,457

Retainedearnings

92,272

Treasury stock

207,354(1,782)

Total
shareholders’equity417,302(3,611)
119,457

92,272

203,742(3,611)(1,782)

413,690(9,172)(9,172)56,14756,147

1,861

1,861

327

327

(46)

(46)
(84)
1

(84)
1

(83)
(1,865)49,033
462,723(0)
119,457(0)92,272

49,116
252,858

Accumulated other comprehensive income
Valuationdifference
on securities
available forsale

Balance at beginning of period
Cumulative impact ofchanges in accounting
policies
Balance at beginning of period,
reflecting changes inaccounting policies
Change during the year
Cash dividends from retained
earnings
Net income
Decrease from write-downsof land revaluation excess
Increase from rise in numberof consolidated subsidiaries
Decrease due to addition ofequity-method affiliates
Acquisition of treasury stock
Disposition of treasury stock
Net change in items otherthan shareholders’ equity
Total change during the year
Balance at end of period

31,972

Deferred
gains orlosses onhedges218

Revaluation
reserve forland

32,907

Foreigncurrencytranslation
adjustment(12,348)

Remeasur

Total

ements of

Accumulated

Minority

Total net

definedotherinterests

assetsbenefitcomprehensive

plansincome68,957525,707(13,302)39,447(3,611)
31,972

218

32,907(12,348)(13,302)39,447

68,957522,095(9,172)56,147
1,861
327
(46)
(84)
1
10,745(1,244)949

28,095

10,046

48,591

9,793

58,385

10,74542,717(1,244)(1,025)949
33,85628,095
15,746

10,046(3,256)

48,591
88,0399,793
78,751

107,418
629,51418

(4) Consolidated Statements of Cash Flows[For the year ended March 31, 2014 and 2015](Millions of yen)

Cash Flows from Operating Activities:
Income before income taxes
Depreciation and amortization
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts andreserves
Increase (decrease) in allowance for investment loss
Increase (decrease) in reserve for loss on business of affiliate
Increase (decrease) for environmental measures
Increase (decrease) in net defined benefit liability and reserve fordirectors’ retirement benefits
Interest and dividends income
Interest expenses
Loss (gain) on sales of property, plant and equipment
Loss on disposal of property, plant and equipment
Loss on impairment
Loss (gain) on sales of marketable securities and investments insecurities
Loss (gain) on valuation of investment securities
Gain on contribution of securities to retirement benefit trust
Decrease (increase) in notes and accounts receivables-trade
Decrease (increase) in inventories
Proceeds from sales of gold bullion deposited from customers
under consuming bailment My Gold Plan
Payment for purchases of gold bullion from market for customer
under My Gold Partner
Decrease (increase) in other current assets
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in accrued expenses
Increase (decrease) in other current liabilities
Increase (decrease) in other noncurrent liabilities
Equity losses (earnings) of affiliates
Other, net
SubtotalInterest and dividends income received
Interest expenses paid
Income taxes refund (paid)
Net Cash Provided by Operating Activities

19

Year Ended Mar. 31, 2014

Year Ended Mar. 31, 2015

(Apr. 1, 2013–Mar. 31, 2014)(Apr. 1, 2014–Mar. 31, 2015)

85,34657,4283,070

75,62853,911
2,835

(402)

(54)

(580)
(27)
(139)

395

(1,837)(4,187)(19,880)
9,686(4,254)2,755
32,308(15,900)
8,233(8,208)3,183
499(31,553)(1,696)850(10,949)
751
3,296

9,278
(12,246)(8,613)76,961

77,188(82,771)(76,957)(10,486)(3,290)(6,439)3,247(341)(4,377)
7,227
105,597
21,438(10,046)(14,056)
102,932(13,741)
16,767
8,616
10,904(369)(6,557)(5,561)
113,347
17,399(8,392)(14,283)
108,070

(Millions of yen)

Cash Flows from Investing Activities:
Purchase of investment securities
Proceeds from sales of investment securities
Payments for lending
Proceeds from repayment of lending
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Payments for purchase of consolidated subsidiaries’ shares
Proceeds from sales of shares of subsidiaries
Proceeds from sales of investments in subsidiaries resulting inchange in scope of consolidation
Other, net
Net Cash Used in Investing Activities
Cash Flows from Financing Activities:
Net increase (decreases) in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Increase (decrease) in commercial papers
Payments for redemption of bonds payable
Proceeds from issuance of bonds
Cash dividends paid
Purchase of treasury stock
Cash dividends paid to minority shareholders
Other, net
Net Cash Used in Financing Activities
Effect of Exchange Rate Change on Cash and Cash
Equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Increase (Decrease) in Cash and Cash Equivalents Resulting
from Change of Scope of Consolidation
Increase (Decrease) in Cash and Cash Equivalents Resulting
from Change of Fiscal Term of Subsidiaries
Cash and Cash Equivalents at End of Period

20

Year Ended Mar. 31, 2014

Year Ended Mar. 31, 2015

(Apr. 1, 2013–Mar. 31, 2014)(Apr. 1, 2014–Mar. 31, 2015)(3,678)40,213(1,433)
1,152(63,816)
11,400(1,303)(31,289)-(2,116)
5,490(1,775)
5,781(54,821)
7,448(3,237)
(471)
229

4,335

1,506

(442)
(44,863)(399)(42,366)(30,544)
100,057(111,075)(26,000)
15,100(7,864)(106)(5,652)(3,242)(69,329)

14,862
100,361(105,638)
5,000(40,000)(9,172)(88)(4,317)(3,279)(42,273)

8,094

5,837

(3,165)63,29929,26862,078

2,007

732

(62)

-

62,07892,079(5) Segment Information[Segment Information]
1. Overview of reporting segments(1) Method of determining reporting segments
The reporting segments of Mitsubishi Materials Corporation are those units of the Company for which
separate financial statements are available and which are subject to regular inspection for the use of theBoard of Directors in determining the allocation of resources and evaluating business results.
The Company has adopted an internal-company structure. As such, each internal company, business
unit and division proposes comprehensive strategy for operations both in Japan and overseas with respect
to the products and services it handles, and carries out operations on that basis.
Therefore, the Company divides its reporting segments according to individual products and services,
based on the internal-company structure. These reporting segments are Cement, Metals, Advanced
Materials & Tools, Electronic Materials & Components, and Aluminum, the last of these being
particularly important among the operations of each business unit and division.
In line with a reorganization conducted on April 1, 2014, we reclassified the business handling
precious metal bullion from the “Others” segment to the “Metals” segment.
Segment information for the preceding fiscal year has been modified to reflect this change.
(2)

Types of product and service belonging to each reporting segment
The main products in each business are as follows.
ready-mixed
concrete,
1) Cement
Cement,cement-related-products,
aggregates
2) Metals
Copper smelting (copper, gold, silver, sulfuric acid, etc.),
processed-copper products
3) Advanced
Cemented carbide products, high-performance alloy products
Materials & Tools
4) Electronic Materials &Advanced materials, electronic components, polycrystalline
Components
silicon, chemical products5) Aluminum

Aluminum cans, rolled-aluminum products, processed aluminumproducts

2. Method of calculation of amounts in net sales, income/loss, assets, liabilities and other items for eachreporting segment
The accounting methods used in reporting business segments are the same as applied in “Basic important
items for preparation of the consolidated financial statements.”
Figures for income from reporting segments are based on ordinary income.
Internal income and transfers between segments are based on actual market prices.

21

3. Information related to sales, income/loss, total assets, total liabilities, and other items for reporting segment
For the year ended March 31, 2014 (From April 1, 2013 to March 31, 2014)(Millions of yen)
CementMetalsAdvanced
Materials &Tools¥186,545¥718,082¥116,516

3,653

10,092

Total

190,199

Segment
incomeElectronic
Materials &Components

Amountindicated inthestatements ofincomeAdjustment
amountAluminum

OthersTotal¥49,882¥150,296¥193,472¥1,414,796-¥1,414,796

29,381

17,842

1,267

45,289107,527(107,527)-

728,175

145,898

67,724

151,564

238,761

1,522,324(107,527)

1,414,796

18,81338,024

13,999

2,195

4,739

8,081

85,854(8,951)

76,902

Segment assets

353,263

659,302

184,998

118,325

146,698

200,496

1,663,085

115,419

1,778,505

Segment
liabilities

209,216

528,457

116,088

142,896

114,466

143,704

1,254,829(2,031)

1,252,797

Depreciation
andamortization

10,45818,441

9,316

5,827

8,015

3,131

55,1892,238

57,428

Amortization of
goodwill

2,431

654

24

-

-

20

3,131

(60)

3,070

208

602

53

66

10

295

1,237

(321)

916

-

-

38

-

-

-

38

-

38

2,705

3,154

1,153

2,178

876

1,115

11,184(1,498)

9,686

1,663

2,561

28

159

212

(250)

4,375

2

4,377

17,66818,028312

52,498656

25,973

115,137(224)

114,912¥13,144¥19,544¥16,775¥3,189¥7,374¥3,572¥63,600¥2,344¥65,944

Net sales(1)Outside
Customers(2)Within
Consolidated
Group

Other items

Dividend
incomeAmortization ofnegativegoodwillInterest
expenses
Equity inearnings ofaffiliates
Investment toequity method
affiliate
Increase intangible andintangible
noncurrent
assets

Notes:
1. “Others” includes nuclear energy-related services, environmental and recycling-related business, realestate business, and engineering-related services.
2. Included in the segment income adjustment amounted (-¥8,951 million) are segment eliminations (¥859
million) and corporate expenses that cannot be allocated to specific segments (-¥9,810 million).
Corporate expenses consist mainly of management-related costs, basic experimental research costs, andfinancial income/expenses.
3. Included in the segment assets adjustment amounted (¥115,419 million) are segment eliminations(-¥39,661 million) and corporate assets that cannot be allocated to specific segments (¥155,080 million).
Corporate assets consist mainly of management-related assets and basic experimental research assets.
4. Included in the segment liabilities adjustment amounted (-¥2,031 million) are segment eliminations(-¥34,268 million) and corporate liabilities that cannot be allocated to specific segments (¥32,237 million).
Corporate liabilities consist mainly of management-related liabilities and basic experimental researchliabilities.
5. Adjustment of increase of property, plant and equipment and intangible assets (¥2,344 million) consist
mainly of investment in Central Research Institute.
6. Segment income has been adjusted together with ordinary income on the consolidated statements ofincome.
22

For the year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)(Millions of yen)
Advanced
Materials &Tools

Electronic
Materials &Components

Aluminum

OthersAmountindicated inthestatements ofincomeAdjustment
amountCementMetals

Total(1)Outside
Customers

189,674

803,394

113,534

56,009157,271

197,380

1,517,265-

1,517,265(2)Within
Consolidated
Group

3,625

8,239

21,112

10,9952,156

43,843

89,972(89,972)-

Total

193,300

811,633

134,647

67,005

159,427

241,224

1,607,238(89,972)

1,517,265

Segment
income16,72932,851

16,579

7,273

5,139

9,899

88,472(7,378)81,093

Segment assets

365,120

713,346

179,009126,124

154,021

195,517

1,733,139

165,017

1,898,157

Segment
liabilities

194,371557,872

98,426140,132

118,556

142,949

1,252,309

16,333

1,268,643

Depreciation
andamortization

10,99918,851

8,083

3,398

7,044

3,134

51,5102,400

53,911

Amortization of
goodwill

2,789

-

35

-

-

10

2,835

-

2,835

98

369

64

88

12

328

963

(355)

607

-

-

29

-

-

-

29

-

29

2,290

2,627

1,164

1,698

812

1,008

9,601

(1,367)

8,233

1,210

300

378

4,348

174

152

6,566

(8)

6,557

19,85919,236

5,591

56,151881

15,284

117,003(199)

116,804

16,74815,278

9,424

2,904

6,789

3,443

54,587

3,048

57,636

Net sales

Other items

Dividend
incomeAmortization ofnegativegoodwillInterest
expenses
Equity inearnings ofaffiliates
Investment toequity method
affiliate
Increase intangible andintangible
noncurrent
assets

Notes:
1. “Others” includes nuclear energy-related services, environmental and recycling-related business, realestate business, and engineering-related services.
2. Included in the segment income adjustment amounted (-¥7,378 million) are segment eliminations (¥404
million) and corporate expenses that cannot be allocated to specific segments (-¥7,783 million). Corporate
expenses consist mainly of management-related costs, basic experimental research costs, and financial
income/expenses.
3. Included in the segment assets adjustment amount (¥165,017 million) are segment eliminations(-¥40,257 million) and corporate assets that cannot be allocated to specific segments (¥205,275 million).
Corporate assets consist mainly of management-related assets and basic experimental research assets.
4. Included in the segment liabilities adjustment amount (¥16,333 million) are segment eliminations(-¥40,620 million) and corporate liabilities that cannot be allocated to specific segments (¥56,954 million).
Corporate liabilities consist mainly of management-related liabilities and basic experimental researchliabilities.
5. Adjustment of increase of property, plant and equipment and intangible assets (¥3,048 million) consist
mainly of investment in Central Research Institute.
6. Segment income has been adjusted together with ordinary income on the consolidated statements ofincome.

23

[Reference information]
I. For the year ended March 31, 2014 (From April 1, 2013 to March 31, 2014)
1. Information by Product/Service
Omitted because the same information is written in the Segment Information.
2. Information by Region(1) Net sales(Millions of yen)Japan
922,214U.S.
86,519Europe25,352

Asia
368,404

Other
12,305

Total
1,414,796(2) Property, plant and equipment(Millions of yen)Japan
530,631

U.S.
79,206

Europe1,272

Asia
37,111

Other
2,349

Total
650,571

1. Categories for the countries and regions are geographically proximity-based.
2. Main countries and regions belong to the categories other than U.S.
(1) Europe: Germany, United Kingdom, Spain, France(2) Asia: Indonesia, South Korea, Malaysia, Singapore, China, Taiwan, Hong Kong, Thailand(3) Other: Australia, Canada, Brazil
3. Information by Customer
Omits because no customers account for 10% or more of net sales in the Consolidated Statement of Operations.
II.

For the year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)

1. Information by Product/Service
Omits because the same information is written in the Segment Information.
2. Information by Region(1) Net sales(Millions of yen)Japan
917,811

U.S.
96,701

Europe25,812

Asia
462,596

Other
14,343

Europe1,509

Asia
37,076

Other
2,104

Total
1,517,265(2) Property, plant and equipment(Millions of yen)Japan
522,297

U.S.
92,047

Total
655,034

1. Categories for the countries and regions are geographically proximity-based.
2. Main countries and regions belong to the categories other than U.S.
(1) Europe: Germany, United Kingdom, Spain, France(2) Asia: Indonesia, South Korea, Malaysia, Singapore, China, Taiwan, Hong Kong, Thailand(3) Other: Australia, Canada, Brazil
3. Information by Customer
Omits because no customers account for 10% or more of net sales in the Consolidated Statement of Operations.

24[Information related to Impairment Loss of Noncurrent Assets by Reported Segment]
For the year ended March 31, 2014 (From April 1, 2013 to March 31, 2014)(Millions of yen)
CementAdvanced
Materials& Tools

MetalsElectronic
Materials &Components

Aluminum

OthersCorporate or

Totalelimination

Loss on impairment
203
4,077
27,261
21833 32,398(Note) Adjustments of loss on impairment (-¥90 million) consist mainly of that of goodwill.

(90)

Grand total

32,308For the year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)(Millions of yen)
CementAdvanced
Materials& Tools

MetalsElectronic
Materials &Components

Aluminum

OthersCorporate or

Total

Loss on impairment
120
155
25
22
144
(Note) Adjustment of loss on impairment (¥31 million) consist mainly of that of idle assets.

elimination

467

31

Grand total

499[Information related to Amortization of Goodwill and Unamortized Balance by Reported Segments]
For the year ended March 31, 2014 (From April 1, 2013 to March 31, 2014)(Millions of yen)
CementAmortization for theyear ended Mar. 31,
2014
Balance on Mar. 31,
2014

MetalsAdvanced
Materials& Tools

Electronic
Materials &Components

Aluminum

OthersCorporate or

Totalelimination

Grand total

2,431

654

24

-

-

20

3,131

(60)

3,070

38,727

-

67

-

-

38

38,833(16)

38,816

Amortization of negative goodwill and unamortized balance incurred from a business combination before April 1,2010 are as below.
(Millions of yen)
CementAmortization for theyear ended Mar. 31,
2014
Balance on Mar. 31,
2014

MetalsCorporate

Advanced
Materials &Tools

Electronic
Materials &Components

Aluminum

OthersTotal

orGrand totalelimination

-

-

38

-

-

-

38

-

38

-

2,221

29

-

-

-

2,250

-

2,250

For the year ended March 31, 2015 (From April 1, 2014 to March 31, 2015)(Millions of yen)
CementAmortization for theyear ended Mar. 31,
2015
Balance on Mar. 31,
2015

MetalsAdvanced
Materials &Tools

Electronic
Materials&
Components

Aluminum

Corporate
OthersTotalorelimination

Grand
total

2,789

-

35

-

-

10

2,835

-

2,835

41,127

-

107

-

-

20

41,255(5)41,249Amortization of negative goodwill and unamortized balance incurred from a business combination before April 1,2010 are as below.
(Millions of yen)
CementAmortization for theyear ended Mar. 31,
2015
Balance on Mar. 31,
2015

MetalsCorporate

Advanced
Materials &Tools

Electronic
Materials &Components

Aluminum

OthersTotal

orGrand totalelimination

-

-

29

-

-

-

29

-

29

-

2,221

-

-

-

-

2,221

-

2,221

25

[Information on negative goodwill generated for each reporting segment]
For the year ended March 31, 2014 (April 1, 2013 to March 31, 2014)
None
For the year ended March 31, 2015 (April 1, 2014 to March 31, 2015)
None(6) Per-Share Information
Year Ended Mar. 31, 2014
(Apr. 1, 2013–Mar. 31, 2014)

Net assets per share¥348.54
Net income per share¥40.10Note:- Net income per share after dilution is not indicated, as no diluted shares exist.
- The standards used to calculate net income per share are as follows.
Net income per share
Net income(Millions of yen)Amounts not attributable toordinary shareholders (millions ofyen)
Net income for common stock(Millions of yen)
Average number of shares
outstanding during the period(thousands of shares)

Year Ended Mar. 31, 2015
(Apr. 1, 2014–Mar. 31, 2015)¥420.36¥42.85

Year Ended Mar. 31, 2014
(Apr. 1, 2013–Mar. 31, 2014)

Year Ended Mar. 31, 2015
(Apr. 1, 2014–Mar. 31, 2015)

52,55156,147--52,55156,147

1,310,573

1,310,342(7) Important Subsequent Events:
1. Business Combination through Acquisition(1) Overview of the Business Combination(i) Name and business of the acquired company
Name of the acquired company: Hitachi Tool Engineering, Ltd.
Business: Manufacturing and sales of tips, cutting tools, wear‒resistant products, tools for urban development, andvarious machine tools made of specialty steels, carbide alloys, etc.
(ii) Principal purpose of the business combination
The purpose of this combination is to strengthen the base of the Company's cemented carbide products businessthrough expansion of Hitachi Tool’s leading-edge lineup of cemented carbide products, which enable highprecision, high-efficiency and high-speed processing, as well as its proposal ability for processing complicatedshapes for a variety of materials.
(iii) Date of the business combination
April 1, 2015(iv) Legal form of the business combination
Acquisition of shares for cash consideration(v) Name following the business combination
Mitsubishi Hitachi Tool Engineering, Ltd.
(vi) Ratio of voting rights acquired
51%(vii) Grounds for deciding on the company to be acquired
By acquiring shares in Hitachi Tool Engineering, Ltd., the Company holds 51% of voting rights.
(2) Items Related to Calculation of the Acquisition Cost
Acquisition cost of the company to be acquired
Consideration for acquisition (share purchase consideration): ¥22,083 million(Note) The above-mentioned amount is an estimate at the time of acquisition. The actual amount may vary according tofuture price adjustments.
(3) Items Related to Allocation of the Acquisition Cost(i) Breakdown of principal amounts of assets acquired and liabilities assumed on the date of the combination
AssetsCurrent assets: ¥16,153 million

26

Noncurrent assets: ¥13,899 million
Total: ¥30,052 million
Liabilities
Current liabilities: ¥8,787 million
Noncurrent liabilities: ¥2,581 million
Total: ¥11,368 million(Note) The above-stated amounts are simple totals, including those of subsidiaries, and are at present estimates.
(ii) Amount of goodwill generated, reason for generation, method of amortization and amortization period
At present, amounts are undetermined, as the allocation of the acquisition cost is not yet complete. Furthermore, themethod of amortization and amortization period have not yet been determined.
2. Significant Sales of Shares in Affiliated Companies
At a Board of Directors Meeting on March 3, 2015, a resolution was passed by the Company based on the publicly
announced “Capital Increase and Restructuring Plan” (the “Plan”) and “New Medium-Term Management Strategy,”
resolved by the Board of Directors of SUMCO Corporation (“SUMCO”), an equity-method affiliate of the Company, at a
meeting on the same date. The resolutions involved the conclusion of a “Memorandum of Understanding Concerning theTreatment of Class Stock” (the “MOU”) defining items necessary to the treatment of SUMCO’s class stock and the policy
for disposing of a portion of the common stock of SUMCO that the Company holds in the event of a public equity
offering taking place as part of the Plan. Thereafter, based on a resolution passed at a Board of Directors meeting of
SUMCO on April 2, 2015, issuance of common stock of SUMCO through a public equity offering with a payment date ofApril 27 was conducted and a portion of the Company’s common stock of SUMCO was sold through the offering, with adelivery date of April 28. In addition, based on the MOU, through the exercise of a put option by the Company, theCompany received a cash payment in consideration of Class A stock held by the Company and Class B stock on May 11,
2015. On the same day, the Company received a cash payment in consideration for Class B stock. The purpose for
conducting this transaction and the impact on the Company’s operating performance are described below.
(1) Reason
The Company reached the decision that SUMCO’s accomplishment of the “Plan” as well as support for its management
policy promoting the New Medium-Term Management Strategy, will contribute to the maintenance and improvement of
SUMCO’s corporate value. In addition, the Company decided that disposing of a portion of the common stock of
SUMCO that the Company holds in concurrence with the public equity offering would also accord with the group
strategy and financial strategy of the Company.
(2) Name and Business of the Affiliated Company and the Content of Its Transactions with the Company
Name: SUMCO Corporation
Business: Business: Manufacture and sale of silicon wafers for semiconductors
Content of transactions: Sale of polycrystalline silicon to the affiliated company(3) Gain or Loss on Change in Equity Associated with the Public Equity Offering
Gain on change in equity: ¥10,300 million (estimate)(4) Number of Shares Sold, Sale Price and Gain or Loss on Sale
Number of shares sold (Note 1): 16,951,900 shares
Sale price: ¥30,639 million
Gain or loss on sale
Gain on sales of investment securities: ¥18,438 million (estimate)(Note 1)
The number of shares sold that is mentioned above does not include the number of shares which the Company has
granted to SMBC Nikko Securities Inc. in relation to the secondary offering through overallotment to additionally receive
the common stock of SUMCO through the Green Shoe option (ceiling: 1,310,100 shares, exercise deadline: May 20,2015).
(5) Gain or Loss on Redemption of Class Shares
Gain on redemption of investment securities: ¥1,311 million (estimate)(6) Percentage of Ownership Before and After the Above-Mentioned Public Equity Offering and Sale of Shares
Before the public equity offering and sale of shares: 27.8%
After the public equity offering and sale of shares (Note 2): 18.8%

27

(Note 2) SUMCO remains an equity-method affiliate of the Company both immediately before and immediately after the
public equity offering and sale of shares.

28