Consolidated Financial Results for the Fiscal Year Ended March 31, 2017
(Japanese Accounting Standards)
May 11, 2017
Name of Listed Company: Mitsubishi Materials Corporation
Listing:
Tokyo Stock Exchange
Stock Code:
5711
URL:
http://www.mmc.co.jp/
Representative: Akira Takeuchi, President
Contact:
Nobuyuki Suzuki, General Manager, Corporate Communications Dept., General Administration Div.,
General Administration Div.
Tel: +81-3-5252-5206
Scheduled date for ordinary general meeting of shareholders: June 28, 2017
Scheduled date of start of dividend payment:
June 1, 2017
Scheduled date of submission of securities report:
June 28, 2017
Supplementary materials for the financial results:
Yes
Investor conference for the financial results:
Yes (For Institutional Investors)(Amounts of less than million yen are omitted.)

1. Results of the Consolidated Fiscal Year Ended March 31, 2017 (From April 1, 2016 to March 31, 2017)(1) Consolidated Results of Operations(Figures in percentages denote the year-on-year change.)
Net salesYear ended March 31, 2017
Year ended March 31, 2016

Operating profit

Net income attributableto owners of parent

Ordinary income

Million yen%

Million yen%

Million yen%

Million yen%

1,304,068
1,417,895

-8.0
-6.5

59,76170,420-15.1-2.0

63,92572,442

-11.8
-10.7

28,352
61,316-53.8
9.2(Note) Comprehensive income: Year ended March 31, 2017: 68,723 million yen (249.5%) Year ended March 31, 2016: 19,664 million yen (-83.7%)

Net income
per share

Diluted net
income per share
Yen

Year ended March 31, 2017
Year ended March 31, 2016

Return on equity

Yen

–
–

216.44468.03(Reference) Equity in earnings of affiliates: Year ended March 31, 2017: 1 million yen

Ordinary income
to total assets

Operating profit
to net sales

%

%

%

4.8
11.1

3.5
3.9

4.6
5.0

Year ended March 31, 2016: 2,188 million yen* The Company consolidated its shares at a 10:1 ratio of its common stock, with an effective date of October 1, 2016. Accordingly, net income per share is calculated on
the assumption that the consolidation of its shares was conducted at the beginning of the previous consolidated fiscal year.

(2) Consolidated Financial Position
Total assets
As of March 31, 2017
As of March 31, 2016

Shareholders’equity ratio

Net assets

Net assets per share

Million yen

Million yen%

Yen

1,896,939
1,793,375

710,195
645,01732.8
31.0

4,743.27
4,238.35(Reference) Shareholders’ equity: As of March 31, 2017: 621,281 million yen

As of March 31, 2016: 555,227 million yen* The Company consolidated its shares at a 10:1 ratio of its common stock, with an effective date of October 1, 2016. Accordingly, net assets per share is calculated on theassumption that the consolidation of its shares was conducted at the beginning of the previous consolidated fiscal year.

(3) Consolidated cash flows
Cash flow fromoperating activities
Year ended March 31, 2017
Year ended March 31, 2016

Cash flow frominvesting activities

Cash flow fromfinancing activities

Cash and cash equivalents
at end of period

Million yen

Million yen%

Yen

115,552
118,685-26,557-29,982-15,703-120,477

132,616
58,482

2. Dividend Payments
Dividends per share(Record date)First
quarter
Yen

Year ended March 31, 2016
Year ended March 31, 2017
Year ending March 31,2018 (Forecast)Secondquarter

Third
quarter

Yen

Yen

Year-end

AnnualTotal dividend
amount(annual)Dividend payout
ratio(consolidated)

Dividends to net
assets(consolidated)

Yen

Yen

Million yen

%

%

–
–

5.00
2.00

–
–

5.00
40.00

10.00
–

13,100
7,859

21.4
27.7

2.4
1.3

–

30.00

–

50.00

80.00

37.4

* The Company consolidated its shares at a 10:1 ratio of its common stock, with an effective date of October 1, 2016. For the amount of dividends at the end of the second
quarter of the fiscal year ended March 31, 2017, the amount prior to the consolidation of shares is stated because the dividends were paid based on the number of shares
before the consolidation of shares.
For the year-end dividend per share in the fiscal year ended March 31, 2017, the amount after the consolidation of shares is stated and a hyphen is written for the annual
dividend because it cannot be simply combined.

3. Forecast (From April 1, 2017 to March 31, 2018)
Net sales
Six months ending
September 30, 2017
Year ending March 31,
2018(Figures in percentages denote the year-on-year change.)

Operating profit

Net income
attributable toowners of parent

Ordinary income

Net income
per share

Million yen%

Million yen%

Million yen%

Million yen%

Yen

750,000

24.3

28,0002.5

25,000-3.9

13,000

-56.0

99.25

1,570,000

20.4

65,0008.8

68,000

6.4

28,000-1.2

213.77

* Notes(1) Significant changes of subsidiaries during the term under review (changes in specific subsidiaries accompanied bya change in the scope of consolidation):
None(2) Changes in accounting policies, changes of accounting estimates and restatement(i)
Changes in accounting policies due to amendments to accounting standards:(ii) Other changes in accounting policies:(iii) Changes in accounting estimates:(iv) Restatements:

Yes
None
None
None

(3) Numbers of issued shares (common stock)(i)
Numbers of issued shares at end of terms (including treasury shares):Year ended March 31, 2017:
131,489,535 sharesYear ended March 31, 2016:
131,489,535 shares(ii)
Numbers of treasury shares at end of terms:
Year ended March 31, 2017:
507,863 sharesYear ended March 31, 2016:
488,618 shares(iii) Average number of shares issued during terms:
Year ended March 31, 2017:
130,993,050 sharesYear ended March 31, 2016:
131,010,198 shares* The Company consolidated its shares at a rate of one share for every 10 shares of its common stock, with October 1, 2016 as the effective date.
Subsequently, the number of issued shares at the end of the term, the number of treasury shares at the end of the term, and the average numberof shares issued during the term are calculated based on the assumption that the consolidation of shares was conducted at the beginning of theprevious consolidated fiscal year.

(Reference) Summary of Non-Consolidated Financial Results
1. Results of the Non-Consolidated Fiscal Year Ended March 31, 2017 (From April 1, 2016 to March 31, 2017)(1) Non-Consolidated Results of Operations(Figures in percentages denote the year-on-year change.)
Net salesYear ended March 31, 2017
Year ended March 31, 2016

Operating profit

Net income%

Million yen%

Million yen%

Million yen%

674,515735,501-8.3-9.3

12,12026,478-54.2
11.7

27,20235,409-23.2-0.8

19,70133,001-40.3-0.6

Net income
per share

Diluted net
income per share
Yen

Year ended March 31, 2017
Year ended March 31, 2016

Ordinary income

Million yen

150.40251.90Yen––* The Company consolidated its shares at a 10:1 ratio of its common stock, with an effective date of October 1, 2016. Accordingly, net income pershare is calculated on the assumption that the consolidation of its shares was conducted at the beginning of the previous consolidated fiscal year.

(2) Non-Consolidated Financial Position
Total assets
As of March 31, 2017
As of March 31, 2016

Net assets

Shareholders’equity ratio

Net assets per share

Million yen

Million yen%

Yen

1,265,120
1,158,968

477,706
435,09437.8
37.5

3,647.06
3,321.25(Reference) Shareholders’ equity:
As of March 31, 2017: 477,706 million yen
As of March 31, 2016: 435,094 million yen* The Company consolidated its shares at a 10:1 ratio of its common stock, with an effective date of October 1, 2016. Accordingly, net assets per
share is calculated on the assumption that the consolidation of its shares was conducted at the beginning of the previous consolidated fiscal year.

* These financial results are outside the scope of audit procedures.
* Explanation about the proper use of financial forecasts and other special notes(Notes concerning forward-looking statements, etc.)
The operating results forecasts and other forward-looking statements contained in this report are based on information currently
available to the Company, as well as certain assumptions that the Company has judged to be reasonable. As such, they do notconstitute an assurance that the Company promises to achieve these projected results. Therefore, readers are advised to note that theactual results may vary materially from the forecasts due to a variety of factors.
Please see “(1) Overview of operating results, Outlook for the year ending March 31, 2018” of “1. Overview of Operating Resultsand Financial Position” on page 4 for the assumptions about consolidated earnings forecasts.
(Procedure for obtaining supplementary information on financial results and financial briefing)
Mitsubishi Materials Corporation plans to hold a financial briefing for institutional investors on Thursday, May 11, 2017. The
materials used at this briefing are disclosed on the TDnet and the Company’s web page at the time that the financial results areannounced.

Contents

1. Overview of Operating Results and Financial Position ...................................................................... 2(1) Overview of operating results ................................................................................................................ 2(2) Overview of financial position .............................................................................................................. 5(3) Basic profit distribution policies and dividend payments for the current and next fiscal years ............ 6(4) Business and other risks ........................................................................................................................ 6
2. Management Policies ........................................................................................................................ 10(1) Basic Policy for the Group Management............................................................................................. 10(2) Target Management Indicators and Medium- to Long-term Management Strategy and Issues to Be
Addressed ............................................................................................................................................ 10
3. Basic Concept of Selection of Accounting Standards ....................................................................... 12
4. Consolidated Financial Statements.................................................................................................... 13(1) Consolidated balance sheet .................................................................................................................. 13(2) Consolidated statement of income and consolidated statements of comprehensive income ............... 15
Consolidated statement of income ...................................................................................................... 15
Consolidated statements of comprehensive income ........................................................................... 16(3) Consolidated statement of changes in equity....................................................................................... 17(4) Consolidated statement of cash flows.................................................................................................. 19
Segment information........................................................................................................................... 21
Per-share information.......................................................................................................................... 27
Important Subsequent Events ............................................................................................................. 28–1–

1. Overview of Operating Results and Financial Position(1) Overview of operating results1) Overview of performance
During the consolidated fiscal year under review, there was an economic slowdown in China, Thailand andIndonesia in Asia. However, in the United States, the economy remained on a modest recovery track.
In the Japanese economy, employment and income conditions were on the road to recovery during theconsolidated fiscal year under review. However, consumer spending and capital expenditure grew at asluggish pace.
Regarding the business environment for the Mitsubishi Materials Group, foreign exchange markets werecharacterized by year-on-year yen appreciation, and the Group was affected by such factors as a decrease in
prices of copper and other major metals and a fall in overall demand for cement in Japan.
Under these circumstances, the Mitsubishi Materials Group continued to implement measures based on thegroup-wide growth strategies set out in its medium-term management plan (FY2015-2017) “Materials
Premium 2016 – Challenge to become the world's leading businesses group”: “Fortifying the foundation forgrowth,” “Strengthening global competitiveness,” and “Pursuing a recycling-based business model,” andsought business development in overseas markets while promoting business selection and concentration.
As a result, consolidated net sales for the fiscal year under review totaled ¥1,304,068 million, down 8.0%
year on year. Operating profit declined 15.1% year on year, to ¥59,761 million, and ordinary income
decreased 11.8%, to ¥63,925 million. Net income attributable to owners of parent was ¥28,352 million, down
53.8% year on year.
2) Overview by business segments(Cement)

Net sales
Operating profit
Ordinary income

FY 2016
197.5
20.1
19.7

FY 2017
177.5
20.9
20.5

(Billion yen)
Increase / Decrease (%)-19.9(-10.1%)
0.7(3.9%)
0.8(4.1%)The sales volume decreased in Japan because of a decline in demand throughout the market, chiefly
reflecting a delay in construction work mainly due to labor shortages and sluggish growth in demand in theprivate sector in the Tokyo area. Business restructuring also had a negative effect on sales.
In the United States, the sales volume of ready-mixed concrete increased due to aggressive sales in Southern
California. The sales volume of cement also increased thanks to the rise in the sales volume of ready-mixed
concrete. The sales price of cement rose following its review.
In China, the sales volume declined due to restrictions on production activities at cement factories, etc. as acountermeasure against severe air pollution and a decline in demand associated with real estate investment inShandong Province. In the overall Cement business, cement production amounted to 11.6 million tons,
unchanged from the level a year ago.
As a result, net sales decreased and operating profit increased year on year for the entire Cement business.
Ordinary income also increased because of the rise in operating profit.

–2–

(Metals)

Net sales
Operating profit
Ordinary income

FY 2016
688.7
24.2
27.0

FY 2017
629.4
17.3
27.5

(Billion yen)
Increase / Decrease (%)-59.2(-8.6%)-6.8(-28.4%)
0.4(1.7%)In the copper business, net sales and operating profit declined, primarily reflecting year-on-year yen
appreciation and a fall in sulfuric acid prices. Copper cathode production for the entire Metals businessamounted to 543 thousand tons, up 31 thousand tons from the previous fiscal year.
In the gold and other valuable metals business, net sales decreased while operating profit increased, reflecting
a decrease in production due to a fall in the contained amount in ore, which was offset by cost reductions.
In the copper and copper alloy products business, net sales declined while operating profit increased mainly
due to a yen appreciation, despite an increase in the sales volume of products for automobiles, and other uses.
As a result, the entire Metals business posted year-on-year decreases in net sales and operating profit.
Ordinary income for the segment increased because of the increases in dividend income and equity inearnings of affiliates.
(Advanced Materials & Tools)

Net sales
Operating profit
Ordinary income

FY 2016
151.6
16.0
14.9

FY 2017
143.4
11.7
9.9

(Billion yen)
Increase / Decrease (%)-8.2(-5.4%)-4.2(-26.5%)-5.0(-33.8%)In the cemented carbide products business, net sales and operating profit declined due to year-on-year yen
appreciation in addition to a fall in overseas sales.
In the high-performance alloy products business, sales of products for automobiles remained firm in North
America, but lower sales in Japan caused net sales and operating profit to decline.
As a result, the overall Advanced Materials & Tools business recorded year-on-year decreases in net sales
and operating profit. Ordinary income declined due to the decrease in operating profit.
(Electronic Materials & Components)

Net sales
Operating profit
Ordinary income

FY 2016
70.2
3.1
6.3

FY 2017
63.0
2.4
2.8

(Billion yen)
Increase / Decrease (%)-7.1(-10.2%)-0.7(-22.9%)-3.5(-55.8%)In the advanced materials and chemical products business, net sales decreased while operating profit
increased because sales of products related to semiconductor manufacturing equipment and chemical
products for hybrid vehicles remained strong, although sales of products for LSIs for smartphones and power
modules were down.
In the electronic components business, both net sales and operating profit increased, reflecting a higher
volume of sales of products for home appliances and optical communication related equipment despite a–3–

lower volume of sales of products for information and telecommunications equipment.
The polycrystalline silicon business recorded a decline in net sales and operating profit due to a fall in sales.
As a result, the entire Electronic Materials & Components business registered year-on-year declines in net
sales and operating profit. Ordinary income dropped as a result of decreases in operating profit and equity inearnings of affiliates.
(Aluminum)

Net sales
Operating profit
Ordinary income

FY 2016
158.6
4.3
3.6

FY 2017
155.9
7.8
7.4

(Billion yen)
Increase / Decrease (%)-2.7(-1.7%)
3.5(82.2%)
3.8(105.4%)In the aluminum can business, sales volume of bottle cans increased, and raw material costs declined.
In the rolled aluminum and processed aluminum products business, sales volume of products for automobiles
increased. However, net sales declined due to falling market metal prices.
In the entire Aluminum business, energy costs were lower.
As a result, the entire Aluminum business posted a decrease in net sales and an increase in operating profit
year on year. Ordinary income increased due to the rise in operating profit.
(Others)

Net sales
Operating profit
Ordinary income

FY 2016
243.2
10.3
9.9

FY 2017
218.2
10.1
7.1

(Billion yen)
Increase / Decrease (%)-25.0(-10.3%)-0.2(-2.0%)-2.7(-27.8%)In the energy-related business, electricity sales volume rose due to the completion of upgrade work on somehydroelectric power plants. However, sales of coal and nuclear energy-related services fell, resulting in
decline in net sales and an increase in operating profit.
In the “E-waste” (used electronics and electrical products) recycling business, net sales and operating profit
declined, reflecting fluctuation in the recycling unit cost of valuables despite a high volume of recycling.
Total net sales and operating profit in the entire Others business excluding the energy-related business andthe “E-waste” (used electronics and electrical products) recycling business declined.
In the overall Others business, net sales and operating profit also fell from a year earlier. Ordinary income
decreased due to the decrease in operating profit and an increase in the share of loss of entities accounted forusing the equity method.
Orders received for nuclear energy and engineering-related services amounted to ¥83.5 billion, up ¥22.8
billion year on year. The order backlog at the end of the period was ¥42.5 billion, up ¥24.5 billion from ayear earlier.
3) Outlook for the year ending March 31, 2018
Although the U.S. economy is expected to grow steadily, the future of the global economy is uncertain,reflecting concern over a slowdown in certain economic indicators in the United States, the political situationin the Korean Peninsula, a downturn in the Chinese economy, and the political trends in Europe and the–4–United States.
We believe the Japanese economy will continue its modest recovery, buoyed by improvements in theemployment and income conditions, but recognize that there may be a downside risk due to overseas politicaland economic trends.
Turning to the Group’s operating environment, the Japanese economy appears to be recovering on the back ofgrowth in exports, etc. However, the recent yen appreciation, rising oil prices and uncertainty over trends inmajor metal prices give cause for concern.
Against this backdrop, the Group will strive to improve its corporate value by implementing the measures
outlined in “2. Management Policies.”
For the fiscal year ending March 31, 2018, our consolidated operating performance forecasts predict net salesof ¥1,570.0 billion, operating profit of ¥65.0 billion, ordinary income of ¥68.0 billion and net income
attributable to owners of parent of ¥28.0 billion on the assumption of average exchange rates of ¥113/USD
and ¥120/EUR and a copper price of 260¢/lb.

(2) Overview of financial position
Total assets at the end of the consolidated fiscal year under review stood at ¥1,896.9 billion, up ¥103.5 billion
from the end of the previous consolidated fiscal year. This result was mainly due to an increase in cash anddeposits.
Total liabilities were ¥1,186.7 billion, an increase of ¥38.3 billion from the end of the previous consolidated
fiscal year. This was mainly due to an increase in provision for environmental measures.
The cash flows during the consolidated fiscal year under review and their causes are as follows.
(Cash flow from operating activities)
Net cash provided by operating activities amounted to ¥115.5 billion (a decrease in net cash provided of ¥3.1
billion from the previous fiscal year). This fall was primarily due to decreases in income before income taxes
and notes and accounts receivable-trade.
(Cash flow from investing activities)
Net cash used in investing activities totaled ¥26.5 billion (a decrease in net cash used of ¥3.4 billion from theprevious fiscal year). This cash was primarily used for outlays related to capital expenditure.
(Cash flow from financing activities)
Together, operating and investing activities produced a net inflow of ¥88.9 billion, which was mainly applied
to the repayment of loans payable. Accordingly, net cash used in financing activities was ¥15.7 billion (adecrease in net cash used of ¥104.7 billion from the previous fiscal year).
As a result of the above, as well as effect of exchange rate change and other factors, the balance of cash andcash equivalents at March 31, 2017 stood at ¥132.6 billion, up ¥74.1 billion from March 31, 2016.
Below is a summary of the major cash flow indicators.
FY 2013
FY 2014
FY 2015
FY 2016
Shareholders’ Equity ratio (%)
22.4
25.7
29.0
31.0
Shareholders’ Equity ratio on a
19.4
21.6
27.9
23.2
market-value basis (%)
Ratio of interest-bearing debt to
7.1
6.5
6.0
4.6
cash flow
Interest coverage ratio
9.0
10.2
12.9
16.5
Shareholders’ Equity ratio:
Shareholders’ equity/Total assets
Shareholders’ Equity ratio on a market-value basis: Market capitalization /Total assets
Ratio of interest-bearing debt to cash flow:
Interest-bearing debt/Cash flow
Interest coverage ratio:
Cash flow/Interest payments–5–

FY 2017
32.8
23.3
4.7
23.3

(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 sharesissued and outstanding at year-end (after deducting Treasury share).
(Note 3) Cash flow is based on the cash flow from operating activities in the Consolidated Statements ofCash 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 for the current and next fiscal years
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 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 11, 2017, decided to
distribute a year-end dividend of ¥40.
The Company consolidated its shares at a 10:1 ratio of its common stock, with an effective date of October 1,
2016. Recalculated in light of this consolidation of shares, the interim dividend of ¥2 is equal to ¥20 yen,which, combined with the year-end dividend of ¥40, results in a full-year dividend for the year ended March 31,2017 of ¥60 per share (down ¥40 yen from the preceding fiscal year).
During the period of the Medium-Term Management Strategy, from FY2018 to FY2020, the Company isemphasizing the distribution of consecutive dividends even if the Company’s performance is changed. The
Company will pay annual dividends 80 yen per share during the FY2018-2020 period. If the consolidated
dividend payout ratio is lower than 25%, however, the Company will temporarily increase the dividend orpurchase treasury stock. Under this policy, the Company plans to pay a dividend of ¥80 per share (¥30 interim
dividend and ¥50 year-end dividend) for the fiscal year ending March 31, 2018.

(4) Business and other risks
Because the Group, as stated in “4. Consolidated Financial Statements, Segment Information,” is engaged in a
broad variety of business activities, its business results and financial standing are influenced by all kinds offactors such as political affairs, economy, weather, market conditions, currency movements, and laws andordinances, both inside and outside the country. Listed below are 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 11, 2017.
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, while 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 factors such as changes of theconditions of the world economy, rapid changes in clients’ markets, changes in clients’ market share, andchanges in clients’ business strategies or product development trends may influence the sales of the productsof the Group. Especially the automobile industry and IT-related industry are exposed to intense competitionin the area of prices and technical development, and while the Group takes every precaution endeavoring to–6–

reduce the costs and develop new products and technologies, in cases where we cannot appropriately respondto the changes in industries and clients’ 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 denominatedin foreign 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 thearea of inventories, there is the risk of rates for nonferrous metals and exchange fluctuation influencing thematerial costs in the 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 theacquisition cost of these raw materials and mineral fuel can be influenced by fluctuation of market prices,
exchange rate, 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 thebusiness results and financial standing of the Group may be influenced by conditions of the semiconductor
market.
5) Interest-bearing debt
In the term ended March 31, 2017, the interest-bearing debt of the Group of ¥528.2 billion yen (which is thesum total of short-term loans payable, current portion of bonds payable, bonds payable, and long-term loans
payable; same below if there are no explanatory notes) accounts for 27.8% of the total assets. Although weare making efforts to improve the financial standing by reducing inventories, asset sales, etc., the futurefinancial situation may affect the business results and financial standing of the Group.
6) Guaranty of liabilities
In the term ended March 31, 2017, the Group has undertaken ¥28.8 billion guaranty of liabilities against
monetary liabilities of affiliated companies, which are not included in the scope of consolidation. In cases
where a situation arises in the future in which we are requested to fulfill these guaranties of liabilities, thismay affect business results and financial standing of the Group.
7) 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.
8) Retirement benefit expenses and obligations
Employees’ retirement benefit expenses and obligations are calculated based on assumptions and conditions
mainly derived from actuarial 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, butlosses caused by declines in the discount rate or operations with pension assets may affect the future
expenses and obligations posted by the Group.
9) Environmental regulations, etc.
In each business establishment in and outside the country, the Group makes efforts to control pollution,
including air pollution, waste water pollution, soil pollution, and groundwater pollution, in accordance with–7–

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 the dumps in accordance with the Mine Safety Act. However, in cases where related laws arerevised or permissible greenhouse gas emission volumes are limited, the Group may need to bear new
expenses.
10) Overseas operations, etc.
The Group has production bases, sales bases, and other bases in 32 countries and regions abroad and foreign
sales account for 42.3% 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 ofmanagement policies of local cooperators and partners.
11) Intellectual property rights
The Group fully recognizes the importance of intellectual property rights and makes efforts to protect them,but in cases 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 Group handles the intellectual property rights held by other companies with the greatest possiblecare, in cases where it is established that we have infringed on the intellectual property rights held by othercompanies and have to pay liabilities, such as compensation for damages, this may also affect the businessresults and financial standing of the Group.
12) Quality of the products
The Group takes all possible measures regarding quality control, striving to offer our clients products of highquality. However, in cases where due to unforeseen circumstances we need to conduct a large-scale recall,this may affect the business results and financial standing of the Group.
13) Occupational health and safety, equipment accidents, etc.
The Group takes thoroughgoing measures to prevent occupational accidents and incidents involving
production machinery. Our efforts span both intangible aspects such as management frameworks foroccupational health, safety, security and accident prevention, and tangible approaches such as operational andmaintenance management and improving the safety of equipment. In the event of a major accident at work or
an accident to the equipment, this may affect business results and financial standing of the Group.
14) 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.
15) 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 businessconducted by the Group presently or in the past within the country or in foreign countries.

–8–16) Procurement of electricity
The business results and financial standing of the Group may be influenced by increases in the prices forelectricity resulting from such factors as cost increases of imported fossil fuels due to the suspension ofoperation of nuclear power stations and increases in charges for renewable energy.
17) Other matters
In addition to the above, the business results and financial standing of the Group may be influenced bychanges in trade practices, terrorist attacks, wars, epidemics, earthquakes, flood and other natural disasters,
and other unexpected circumstances.

–9–2. Management Policies(1) Basic Policy for the Group Management
The vision of the Group is to “We will become the leading business group committed to creating a sustainable
world through materials innovation, with the use of our unique and distinctive technologies, for People,
Society and the Earth.” based on a corporate philosophy of “for People, Society and the Earth.”(2) Target Management Indicators and Medium- to Long-term Management Strategy and Issues
to Be Addressed
The Group will pursue a number of measures to enhance its corporate value by developing the Long-Term
Management Policy, which looks ahead 10 years, and the Medium-term Management Strategy for
FY2018-FY2020, as described below.
1) Long-term Management Policy
The businesses of the Group have set the Medium- to Long-Term Targets (the company in the future) and theGroup-wide Policy as the Long-Term Management Policy as described below, to realize the vision describedin the Basic Policy for the Group Management in (1) above.
<Medium- to Long-term Targets (the company in the future)>- Leading company in domestic and overseas key markets- Achieving high profitability and efficiency- Achieving growth that exceeds the market growth rate
<Group-wide Policy>- Optimization of business portfolio- Comprehensive efforts to increase business competitiveness- Creation of new products and businesses
2) Management Policies in the Medium-Term Management Strategy (for FY2018 - FY2020)
In the Medium-Term Management Strategy, we will pursue the Group-Wide Policy set in the Long-termManagement Policy. To achieve a “accommodation to changes in the external environment” and the “Build astructure focusing on strategy,” which were the issues in the previous Medium-Term Management Plan, we
have made the shift from the “Medium-Term Management Plan” centering on financial plans in the past to
the “Medium-Term Management Strategy” focusing on the planning and implementation of growthstrategies.
a. Optimization of business portfolio
The Company will classify its business into three categories: stable growth business, growth promotion
business and profitability restructuring business, and will promote selection and concentration and improve
capital efficiency after determining a direction geared to the characteristics of each business and clarifying
any issues. Stable growth business consists of the cement, metals (smelting), recycling and renewable energy
businesses, and in this category, the Company will aim to strengthen its business foundations by maintaining
and improving cost competitiveness. Growth promotion business consists of the metals (copper and copper
alloy) and advanced materials & tools businesses, and here the Company will seek business development inadjacent fields and global markets to outperform market growth. Profitability restructuring business consistsof the electronic materials & components and aluminum businesses. In this category, the Company will work
promptly to solve issues and define the future direction of growth.

– 10 –

b. Comprehensive efforts to increase business competitivenessWe will improve and innovate “manufacturing” in the business divisions through the optimal use oftechnology management resources by enhancing the support system by the corporate divisions. With this, wewill make comprehensive efforts to increase our business competitiveness by promoting “Differentiation”
and “New development,” such as the development of new products and new manufacturing technologies, tobecome an entity that is one step ahead of other companies through early responses to changes in the businessenvironment.
c. Creation of new products and businesses
To foster businesses that will become a future revenue foundation and create new businesses, we will create
and foster new products and new businesses that will become the core for sustainable growth by positioning
important social needs the Company should meet are identified as next-generation vehicles, internet of things(IoT) and artificial intelligence (AI), and building a rich, sustainable society. The Company plans to createand develop new products and new businesses that are vital for sustainable development.
In addition, we will promote specific measures, with the following items as key strategies.
- Achieve growth through innovation- Create value by building a recycling-oriented society- Increase the company’s market presence through investment for growth- Increase efficiency through continuous improvement<Issues in each business>● Cement Business
In Japan, domestic demand for cement is expected to exceed the year-earlier level and stand at approximately
42 million tons, given that the construction of large projects including those related to the Olympic Games in2020 and the linear Chuo Shinkansen (in some sections) are expected to gain momentum. Under thesecircumstances, we will work to secure sales volumes by steadily taking in demand for cement for the large
projects.
In the United States, we expect the demand for cement and ready-mixed concrete to maintain its upward
momentum, driven by increasing construction demand in the private sector. With these developments as a
backdrop, we will seek to increase sales and profits by targeting an increase in sales volume of cement andready-mixed concrete and further price revisions.
● Metals Business
While copper prices currently remain firm, we will keep a close watch on the market trends going forward,
along with the foreign exchange and the stock market conditions.
In copper & copper alloy products, demand of products for automobiles and other products is expected toremain stable.
In this environment, we will continue to seek a shift toward a more solid structure less susceptible to pricefluctuations by lowering the breakeven point through a reduction in energy costs and fixed cost. In copper
smelting and refining, we will also make efforts to improve earnings by expanding recycling operations
through building a system able to increase the treating volume of E-Scrap and treat difficult-to-be-processed
waste, etc., while initiatives to achieve stable operations at smelters in Japan and overseas. In copper & copper
alloy products, we will continue to increase profitability by enhancing sales competitiveness through theaccelerated development of alloys, drawing on our technological and development capabilities.

– 11 –

● Advanced Materials & Tools BusinessIn the cemented carbide products, there are signs of recovery in the Chinese and North American markets, andwe expect demand to increase, particularly among our main customer base in the automobile and aerospaceindustries over the medium to long term. Under these circumstances, we will add to sales bases and production
bases and will expand our sales network. We will strive to promote sales, focusing on activities for receiving
orders by industry and increasing direct sales to end users. Furthermore, we will continue working to stabilize
our sourcing of tungsten, a key constituent, by improving the recycling ratio and through other efforts todiversify procurement sources.
Turning to the high-performance alloy products, we expect demand for our mainstay sintering parts to increasein line with growth in the automobile industry. The Group will work to increase earnings mainly by enhancing
productivity at production locations.
● Electronic Materials & Components BusinessIn the advanced materials and chemical products, sales of products related to semiconductor manufacturing
equipment are expected to remain firm. In addition, because demand of products for power modules is also
increasing, opportunities to receive orders is expected to increase. We will strive to enhance profitability byusing our core technological capabilities and strengthening our sales competiveness and our ability to makeproposals to customers, always remaining a step ahead of customers’ needs in each market.
In the electronic components, sales remain solid thanks to rising sales of products for home appliances andoptical communication related equipment, although sales of products for information and telecommunications
equipment are declining. In addition, we plan to expand sales of new surge protective devices (SPD). We willcontinue working to strengthen our business structure by introducing new products quickly and continuing to
reduce costs.
In polycrystalline silicon, we will strive to improve quality and reduce costs by establishing a safety andefficient operating structure, thereby creating a business foundation able to ensure profits even when demand isweak.
● Aluminum BusinessIn the aluminum beverage cans, we will seek to achieve stable orders for regular cans and expand sales ofaluminum bottle cans, our strategic products. We will also promote the advantageous procurement of raw
materials, stable product quality and cost reduction.
In the rolled and processed aluminum products, we will endeavor to secure orders of products for beveragecans, automobiles and electronic materials in Japan. Overseas, we will work to expand sales of products forautomobiles where demand is expected to increase.
We will also actively promote the recycling business of used aluminum cans.

3. Basic Concept of Selection of Accounting Standards
We are currently working to understand the content of the International Financial Reporting Standards (IFRS)
and investigating and examining the impact of the IFRS on the Group. At this stage, however, we have yet todetermine when we will adopt the IFRS.

– 12 –

4. Consolidated Financial Statements(1) Consolidated balance sheet
As of March 31, 2016
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Gold receivable
OthersAllowance for doubtful accounts(Million yen)
As of March 31, 201760,123233,09385,082
83,69489,875
10,35289,360133,104(2,155)

141,264
213,343
85,878
101,643
100,757
9,375
110,458
107,284(2,537)

782,530

867,469

Non-current assets
Property, plant and equipment
Buildings and improvements, net
Machinery, equipment and vehicles, net
Land, net
Construction in progress
Other, net

155,277
209,769
268,634
21,76914,786

154,828
213,586
260,805
23,091
13,914

Total property, plant and equipment

670,237

666,226

48,986
17,03243,43615,13866,01958,574

212,606
342
34,32433,385(6,070)252,067
393
26,42531,332(5,549)274,588

304,669

1,010,845

1,029,470

1,793,375

1,896,939

Total current assets

Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Net defined benefit asset
Deferred tax assets
OthersAllowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets– 13 –

As of March 31, 2016
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of bonds payable
Income taxes payable
Deferred tax liabilities
Provision for bonuses
Gold payable
Provision for loss on disposal of inventories
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Provision for directors' retirement benefits
Provision for loss on business of subsidiaries andassociates
Provision for environmental measures
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Net defined benefit liability
Other(Million yen)
As of March 31, 2017

110,596
200,527
25,1007,037
138
13,114
231,667626
107,511

114,502203,819
15,00016,154352
12,880241,406
637
101,910696,319

706,665

40,000260,681
1,628

55,000254,411
1,365

1,760

4,137

13,35815,26526,53263,54429,26732,56823,52625,59056,03727,443452,038

480,079

1,148,358

1,186,744

119,457
92,266
303,026(1,953)

119,457
92,422
333,526(2,017)

512,797543,390

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans

21,645(199)
34,282
3,647(16,946)

55,226888
34,930(1,418)(11,735)

Total accumulated other comprehensive income

42,43077,89189,78988,913

Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity

Non-controlling interests
Total net assets
Total liabilities and net assets– 14 –

645,017710,195

1,793,375

1,896,939

(2) Consolidated statement of income and consolidated statements of comprehensive income
Consolidated statement of income(Million yen)

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating profit
Interest income
Dividend income
Rent income on non-current assets
Equity in earnings of affiliates
Other
Total non-operating profit
Non-operating expenses
Interest expenses
Loss on retirement of non-current assets
Rent expenses on non-current assets
Settlement expenses of remaining business in mines
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Gain on sales of non-current assets
Insurance income
Gain on change in equity
Gain on redemption of investment securities
Other
Total extraordinary income
Extraordinary losses
Provision for environmental measures
Impairment loss
Loss on valuation of investment securities
Loss on business withdrawal
Loss on suspension of operations
Other
Total extraordinary losses
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to owners of parent

Year Ended March 31, 2016
(Apr. 1, 2015–Mar. 31, 2016)
1,417,895
1,204,322
213,573
143,152
70,420– 15 –

Year Ended March 31, 2017
(Apr. 1, 2016–Mar. 31, 2017)
1,304,068
1,104,402
199,665
139,904
59,761

589
9,019
5,005
2,188
4,895
21,699587
14,692
4,863
1
2,666
22,811

6,694
3,366
3,174
2,865
3,576
19,67772,442

4,922
4,076
3,061
3,565
3,020
18,64663,925

19,1886,322
5,224
10,464
1,234
3,508
45,942

19,072
16,545
2,400
–
–
503
38,522

10,841
3,610
2,539
7,517
2,628
8,568
35,70582,68017,905(2,760)15,14467,536
6,219
61,31623,912
9,977
5,049
–
–
3,924
42,86359,584
24,594(583)
24,01135,5737,220
28,352

Consolidated statements of comprehensive income(Million yen)
Year Ended March 31, 2016
(Apr. 1, 2015–Mar. 31, 2016)
Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Revaluation reserve for land
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Equity in earnings of affiliates
Total other comprehensive income
Comprehensive income(Breakdown)Comprehensive income attributable to owners ofparentComprehensive income attributable tonon-controlling interests– 16 –

Year Ended March 31, 2017
(Apr. 1, 2016–Mar. 31, 2017)67,53635,573(21,165)
1,044
1,490
(11,326)(14,369)(3,544)33,676635–(6,009)4,758
88(47,872)

33,15019,66468,723

16,451

62,777

3,212

5,946

(3) Consolidated statement of changes in equity
Year Ended March 31, 2016 (Apr. 1, 2015–Mar. 31, 2016)(Million yen)
Shareholders' equity

Capital stock
Balance at beginning of current
periodCumulative effects of changes
in accounting policies
Restated balance
Changes of items during period
Dividends of surplus
Net income attributable toowners of parent
Reversal of revaluation
reserve for land
Increase associated with theincrease number ofconsolidated subsidiaries
Increase associated with thedecrease number of equity
method affiliates
Purchase of treasury shares
Disposal of treasury shares
Retirement of treasury shares
Change in ownership interestof parent due to transactions
with non-controlling interests
Net changes of items otherthan shareholders' equity

Capital surplus

Retained earnings

92,272

252,858

119,457

Treasury share

Total shareholders'equity(1,865)

462,723805
119,457

92,272

253,664805(1,865)463,529(13,101)(13,101)

61,31661,316

843

843

304

304

(89)
1

(0)

(89)
1

(5)

–
119,457

Total changes of items during period

Balance at end of current period

(5)

(5)
92,26649,362
303,026(88)(1,953)49,268
512,797

Accumulated other comprehensive income
Valuation
Deferred
Revaluationdifference on
gains or losses reserve foravailable-foron hedges
landsale securities

Balance at beginning of current
periodCumulative effects of changes
in accounting policies
Restated balance
Changes of items during period
Dividends of surplus
Net income attributable toowners of parent
Reversal of revaluation
reserve for land
Increase associated with theincrease number ofconsolidated subsidiaries
Increase associated with thedecrease number of equity
method affiliates
Purchase of treasury shares
Disposal of treasury shares
Retirement of treasury shares
Change in ownership interestof parent due to transactions
with non-controlling interests
Net changes of items otherthan shareholders' equity
Total changes of items during period

Balance at end of current period

42,717(1,025)33,856

Foreigncurrencytranslation
adjustment

15,746

Total
NonRemeasureaccumulated controllingments ofother
definedinterests
comprehensive
benefit plansincome(3,256)88,03978,751

Total net
assets629,514805

42,717(1,025)33,856

15,746(3,256)88,03978,751

630,319(13,101)
61,316
843
304

(89)
1

(5)
(21,071)826

426(12,099)(13,690)(45,608)

11,038(34,570)(21,071)
21,645

826
(199)

426
34,282(12,099)
3,647(13,690)(16,946)(45,608)
42,43011,03889,78914,697645,017– 17 –

Year Ended March 31, 2017 (Apr. 1, 2016–Mar. 31, 2017)(Million yen)
Shareholders' equity

Capital stock
Balance at beginning of current
periodCumulative effects of changes
in accounting policies
Restated balance
Changes of items during period
Dividends of surplus
Net income attributable toowners of parent
Reversal of revaluation
reserve for land
Increase associated with theincrease number ofconsolidated subsidiaries
Increase associated with thedecrease number of equity
method affiliates
Purchase of treasury shares
Disposal of treasury shares
Retirement of treasury shares
Change in ownership interestof parent due to transactions
with non-controlling interests
Net changes of items otherthan shareholders' equity

Treasury share

Total shareholders'equityCapital surplus

Retained earnings

119,457

92,266

303,026(1,953)

512,797

119,457

92,266

303,026(1,953)

512,797(9,170)(9,170)28,35228,352(1,165)(1,165)

127

127

12,355

12,355
(63)

(63)
(0)
(0)

(0)
(0)
157

–
119,457

Total changes of items during period

Balance at end of current period

157

156
92,42230,499333,526(63)(2,017)30,592
543,390

Accumulated other comprehensive income
Valuation
Deferred
Revaluationdifference on
gains or losses reserve foravailable-foron hedges
landsale securities

Balance at beginning of current
periodCumulative effects of changes
in accounting policies
Restated balance
Changes of items during period
Dividends of surplus
Net income attributable toowners of parent
Reversal of revaluation
reserve for land
Increase associated with theincrease number ofconsolidated subsidiaries
Increase associated with thedecrease number of equity
method affiliates
Purchase of treasury shares
Disposal of treasury shares
Retirement of treasury shares
Change in ownership interestof parent due to transactions
with non-controlling interests
Net changes of items otherthan shareholders' equity
Total changes of items during period

Balance at end of current period

Foreigncurrencytranslation
adjustment

Total
NonRemeasureaccumulated controllingments ofother
definedinterests
comprehensive
benefit plansincomeTotal net
assets21,645(199)

34,282

3,647(16,946)

42,43089,789645,017

21,645(199)

34,282

3,647(16,946)

42,43089,789645,017(9,170)28,352(1,165)
127

12,355
(63)
(0)
(0)
157
33,581

1,087

647(5,066)

5,211

35,460(876)

34,58433,581
55,226

1,087
888

647
34,930(5,066)(1,418)5,211(11,735)

35,46077,891(876)
88,91365,177710,195– 18 –

(4) Consolidated statement of cash flows
Year Ended March 31, 2016
(Apr. 1, 2015–Mar. 31, 2016)
Cash flow from operating activities
Income before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for loss on business of
subsidiaries and associates
Increase (decrease) in provision for environmental
measures
Increase (decrease) in net defined benefit liability anddirectors' retirement benefits
Interest and dividend income
Interest expenses
Share of (profit) loss of entities accounted for using
equity method
Loss (gain) on sales of property, plant and equipment
Loss on retirement of non-current assets
Impairment loss
Loss on business withdrawal
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Loss (gain) on redemption of investment securities
Loss (gain) on change in equity
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventories
Proceeds from sales of gold bullion
Purchase of gold bullion
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 non-current liabilities
Other
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes (paid) refund
Net cash provided by (used in) operating activities– 19 –(Million yen)
Year Ended March 31, 2017
(Apr. 1, 2016–Mar. 31, 2017)82,68056,395
4,447

59,58456,748
4,048

(38)

(173)

552

3,021

8,799

19,210

1,136

(761)

(9,609)6,694(15,279)
4,922(2,188)(1)(5,863)
3,366
3,610
7,517
(18,164)
2,539(1,234)(10,464)(16,431)
4,076
9,977
–
(19,014)
5,049––(3,519)14,49838,913
79,994(77,114)
17,373(32,982)
79,991(79,599)
9,374(16,188)

8,818

3,105
(25,230)(20)(15,745)
131,743
12,139(7,173)(18,023)
118,685(2,202)
1,961
697
4,870
120,406
16,426(4,962)(16,317)
115,552

(Million yen)
Year Ended March 31, 2016
(Apr. 1, 2015–Mar. 31, 2016)
Cash flow from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Proceeds from redemption of investment securities
Purchase of shares of subsidiaries
Proceeds from sales of shares of subsidiaries
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Proceeds from sales of shares of subsidiaries resulting
in change in scope of consolidation
Payments for withdrawal from business
Proceeds from transfer of business
Payments of loans receivableCollection of loans receivable
Other
Net cash provided by (used in) investing activities
Cash flow from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Increase (decrease) in commercial papers
Proceeds from issuance of bonds
Redemption of bonds
Purchase of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests
Other
Net cash provided by (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
Cash and cash equivalents at end of period– 20 –

Year Ended March 31, 2017
(Apr. 1, 2016–Mar. 31, 2017)(71,469)
19,110(2,897)(2,922)
32,98718,000(132)–(76,838)
24,359(1,283)(494)
32,915–(2,224)
0(15,572)

–

455

2,157

(7,548)–(1,100)1,942(834)(29,982)–
2,176(2,253)
128(5,199)(26,557)(28,243)
31,433(79,917)(5,000)–(20,040)(90)(13,101)(1,989)(3,527)(120,477)

11,15542,066(54,488)–
30,000(25,100)(65)(9,170)(6,201)(3,899)(15,703)(2,803)(55)(34,577)
92,07973,23758,482980

896

58,482

132,616

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 review by the Board of Directors todetermine the allocation of management resources and evaluate business results.
The Company has adopted an internal-company structure, and each internal company and each businessdivision and department carry out their business activities by formulating comprehensive strategies in Japanand overseas for the products and services they handle.
Therefore, the Company consists of segments according to products and services based on the internal
companies and positions five businesses, namely Cement, Metals, Advanced Materials & Tools, Electronic
Materials & Components, and Aluminum with high importance in the business divisions and departments as
the reporting segments.
(2) Types of products and services belonging to each reporting segment
The main products in each business are as follows.
(i) Cement
Cement, cement-related products, ready-mixed concrete, aggregates(ii) Metals
Copper smelting and refining (copper, gold, silver, sulfuric acid, etc.),
copper & copper alloy products(iii) Advanced Materials & Tools
Cemented carbide products, high-performance alloy products(iv) Electronic Materials & Components Advanced materials, electronic components, polycrystalline silicon,
chemical products(v) Aluminum
Aluminum beverage cans, rolled and processing aluminum products
2. Method of calculating the amounts of net sales, income and losses, assets, liabilities and other items for eachreporting segment
Figures for income in the reporting segments are based on ordinary income.
Internal revenues and transfers between segments are based on actual market prices.
(Application of Practical Solution regarding in depreciation method due to Tax Reform 2016)
As stated in “Changes in accounting policies,” the Company has applied the “Practical Solution on a change indepreciation method due to Tax Reform 2016” from the consolidated fiscal year under review. It also changed
the depreciation method for facilities attached to buildings and structures that were acquired on or after April 1,
2016, switching from the declining-balance method to the straight-line method.
The impact of this change on segment income for the consolidated fiscal year under review is minor.

– 21 –

3. Information relating the amounts of net sales, income and losses, assets, liabilities and other items for eachreporting segment
Year ended March 31, 2016 (from April 1, 2015 to March 31, 2016)(Million yen)
AdvancedElectronic
Materials & Materials & Aluminum
Tools
Components

CementMetals(1) Outside customers

194,113680,431

133,550

56,374(2) Within consolidated
group

3,386

8,290

18,117

Total

Amountreported in
Adjustment
consolidated
amountfinancialstatements

OthersTotal

156,854

196,570

1,417,895–

1,417,895

13,8801,810

46,697

92,182(92,182)–
1,417,895

Net sales

197,500

688,721

151,668

70,254

158,665

243,268

1,510,077(92,182)

Segment income

19,71027,048

14,965

6,339

3,641

9,936

81,642(9,199)72,442

Segment assets

353,523

654,099

221,620

107,402

149,446

190,276

1,676,370

117,005

1,793,375

Segment liabilities

179,737

496,729

127,677

98,322

114,552

144,438

1,161,459(13,100)

1,148,358

Depreciation

12,33515,757

11,257

3,428

7,322

3,511

53,612

2,782

56,395

Amortization of
goodwill

3,191

－

1,248

－

－

7

4,447

－

4,447

Other items

Interest income

74

327

71

117

11

435

1,038

(448)

589

Interest expenses

1,923

2,014

1,078

999

712

935

7,664

(969)

6,694

Share of profit or lossof entities accounted
for using equity
method1,358(3,351)

610

4,152

107

(607)

2,270

(81)

2,188

Investment in equity
method affiliates

20,33817,877

5,936

39,980740

13,96598,839(165)

98,674

Increase in property,
plant and equipment
and intangible assets

17,561

22,96817,674

3,535

7,196

6,079

75,016

3,087

78,103

Notes: 1. “Others” includes nuclear energy-related services, environmental and recycling-related business, real estatebusiness, and engineering-related services.
2. “Adjustment amount” of segment income of -¥9,199 million includes the elimination of intersegment transactionsof -¥61 million and corporate expenses of -¥9,138 million which are not distributed to the reporting segments.
Corporate expenses consist mainly of general and administrative expenses that do not belong to the reporting
segments, basic experiment and research expenses, and financial revenue and expenses.
3. “Adjustment amount” of segment assets of ¥117,005 million includes the elimination of intersegment transactionsof -¥32,763 million and corporate assets of ¥149,768 million which are not distributed to the reporting segments.
Corporate assets consist mainly of assets pertaining to the administrative divisions that do not belong to thereporting segment and assets for basic experiment and research.
4. “Adjustment amount” of segment liabilities of -¥13,100 million includes the elimination of intersegment
transactions of -¥23,597 million and corporate liabilities of ¥10,497 million which are not distributed to thereporting segments. Corporate liabilities consist mainly of liabilities pertaining to the administrative divisions that
do not belong to the reporting segment and liabilities in basic experiment and research.
5. “Adjustment amount” of the increase in property, plant and equipment and intangible assets of ¥3,087 million
consists mainly of capital expenditure of Central Research Institute.
6. Segment income has been adjusted together with ordinary income on the consolidated statements of income.

– 22 –

Year ended March 31, 2017 (from April 1, 2016 to March 31, 2017)(Million yen)
AdvancedElectronic
Materials & Materials & Aluminum
Tools
Components

CementMetals(1) Outside customers

174,361

621,313

126,834

56,472(2) Within consolidated
group

3,205

8,157

16,581

Total

Amountreported in
Adjustment
consolidated
amountfinancialstatements

OthersTotal

154,017

171,069

1,304,068–

1,304,068

6,614

1,944

47,177

83,680(83,680)–
1,304,068

Net sales

177,566

629,470

143,415

63,087

155,962

218,246

1,387,748(83,680)

Segment income

20,52027,513

9,913

2,802

7,480

7,177

75,407(11,481)

63,925

Segment assets

345,604

685,941

212,347

134,817150,770

183,453

1,712,934

184,005

1,896,939

Segment liabilities

168,274

520,075

120,358

85,767

111,069

133,179

1,138,725

48,0181,186,744

Depreciation

11,463

16,041

11,873

3,442

7,323

3,706

53,851

2,896

56,748

Amortization of
goodwill

2,798

–

1,243

–

–

6

4,048

–

4,048

Other items

Interest income

93

340

21

163

13

323

956

(369)

587

Interest expenses

1,513

1,686

934

840

672

744

6,391

(1,469)4,922

Share of profit or lossof entities accounted
for using equity
method

914

357

158

1,293

118

(2,878)

(35)

36

1

Investment in equity
method affiliates

20,65314,143

5,922

1,768

840

10,94954,277(155)

54,122

Increase in property,
plant and equipment
and intangible assets

20,517

19,33914,719

2,946

8,658

4,185

70,367

5,318

75,685

Notes: 1. “Others” includes nuclear energy-related services, environmental and recycling-related business, real estatebusiness, and engineering-related services.
2. “Adjustment amount” of segment income of -¥11,481 million includes the elimination of intersegment transactionsof -¥44 million and corporate expenses of -¥11,436 million which are not distributed to the reporting segments.
Corporate expenses consist mainly of general and administrative expenses that do not belong to the reporting
segments, basic experiment and research expenses, and financial revenue and expenses.
3. “Adjustment amount” of segment assets of ¥184,005 million includes the elimination of intersegment transactionsof -¥31,781 million and corporate assets of ¥215,786 million which are not distributed to the reporting segments.
Corporate assets consist mainly of assets pertaining to the administrative divisions that do not belong to thereporting segment and assets for basic experiment and research.
4. “Adjustment amount” of segment liabilities of ¥48,018 million includes the elimination of intersegment
transactions of -¥26,673 million and corporate liabilities of ¥74,692 million which are not distributed to thereporting segments. Corporate liabilities consist mainly of liabilities pertaining to the administrative divisions that
do not belong to the reporting segment and liabilities in basic experiment and research.
5. “Adjustment amount” of the increase in property, plant and equipment and intangible assets of ¥5,318 million
consists mainly of capital expenditure of Central Research Institute.
6. Segment income has been adjusted together with ordinary income on the consolidated statements of income.

– 23 –

[Related information]
Year ended March 31, 2016 (from April 1, 2015 to March 31, 2016)
1. Information by product and service
The note is omitted because the same information is disclosed in the Segment Information.
2. Information by region(1) Net sales(Million yen)Japan

The UnitedStatesEurope

Asia

Other

Total

910,894

116,555

30,414345,356

14,673

1,417,895(2) Property, plant and equipment(Million yen)Japan

The UnitedStatesEurope

Asia

Other

Total

542,148

90,4901,878

33,972

1,747

670,237

1. Categories of country and region are based on geographical proximity.
2. Main countries and regions belonging to categories other than the United States(1) Europe
Germany, the United Kingdom, Spain and France(2) Asia
Indonesia, South Korea, Malaysia, Singapore, China, Taiwan, Hong Kong and Thailand(3) Other
Australia, Canada and Brazil

3. Information by main customer
The note is omitted because there is no customer who accounts for 10% or more of net sales in the
consolidated statement of income.
Year ended March 31, 2017 (from April 1, 2016 to March 31, 2017)
1. Information by product and service
The note is omitted because the same information is disclosed in the Segment Information.
2. Information by region(1) Net sales(Million yen)Japan

The UnitedStatesEurope

Asia

Other

Total

752,169

133,646

37,851

366,916

13,484

1,304,068(2) Property, plant and equipment(Million yen)Japan

The UnitedStatesEurope

Asia

Other

Total

538,516

86,544

1,982

37,525

1,656

666,226

1. Categories of country and region are based on geographical proximity.
2. Main countries and regions belonging to categories other than the United States(1) Europe
Germany, the United Kingdom, Spain and France(2) Asia
Indonesia, South Korea, Malaysia, Singapore, China, Taiwan, Hong Kong and Thailand(3) Other
Australia, Canada and Brazil

3. Information by main customer
The note is omitted because there is no customer who accounts for 10% or more of net sales in the
consolidated statement of income.

– 24 –

[Information relating to impairment losses of noncurrent assets by reporting segment]
Year ended March 31, 2016 (from April 1, 2015 to March 31, 2016)(Million yen)

Impairment
loss

CementMetals329

1,818

AdvancedElectronic
Materials & Materials &Tools
Components–

Aluminum

Others

Total

–

1,368

3,516

–

Corporate orGrand totalelimination

93

3,610

(Note) Adjustment of impairment loss of ¥93 million consists mainly of the impairment loss of assets for rent.

Year ended March 31, 2017 (from April 1, 2016 to March 31, 2017)(Million yen)

Impairment
loss

CementMetals36

183

AdvancedElectronic
Materials & Materials &Tools
Components

7,045

Aluminum

Others

Total

–

519

9,484

1,699

Corporate orGrand totalelimination

493

9,977

(Note) Adjustment of impairment loss of ¥493 million consists mainly of the impairment loss of assets for rent.

[Information relating to amortization and unamortized balance of goodwill by reporting segment]
Year ended March 31, 2016 (from April 1, 2015 to March 31, 2016)(Million yen)
CementMetalsAdvancedElectronic
Materials & Materials &Tools
Components

Aluminum

OthersCorporate orGrand totalelimination

Total

Amortizationin the fiscal
year ended
March 31,
2016

3,191

–

1,248

–

–

7

4,447

–

4,447

Unamortizedbalance at theend of the
fiscal year
ended March
31, 2016

37,969–11,006––

10

48,986–48,986

The amortization and the unamortized balance of negative goodwill arising from business combination, etc.
conducted before April 1, 2010 are as follows.
(Million yen)
CementAdvancedElectronic
Materials & Materials &Tools
Components

Metals

Aluminum

OthersCorporate orGrand totalelimination

Total

Amortizationin the fiscal
year ended
March 31,
2016

–

–

–

–

–

–

–

–

–

Unamortizedbalance at theend of the
fiscal year
ended March
31, 2016

–

2,221

–

–

–

–

2,221

–

2,221

– 25 –

Year ended March 31, 2017 (from April 1, 2016 to March 31, 2017)(Million yen)
CementMetalsAdvancedElectronic
Materials & Materials &Tools
Components

Aluminum

OthersCorporate orGrand totalelimination

Total

Amortizationin the fiscal
year ended
March 31,
2017

2,798

–

1,243

–

–

6

4,048

–

4,048

Unamortizedbalance at theend of the
fiscal year
ended March
31, 2017

33,676

–

9,756

–

–

2

43,436–43,436

The amortization and the unamortized balance of negative goodwill arising from business combination, etc.
conducted before April 1, 2010 are as follows.
(Million yen)
CementAdvancedElectronic
Materials & Materials &Tools
Components

Metals

Aluminum

OthersCorporate orGrand totalelimination

Total

Amortizationin the fiscal
year ended
March 31,
2017

–

–

–

–

–

–

–

–

–

Unamortizedbalance at theend of the
fiscal year
ended March
31, 2017

–

2,221

–

–

–

–

2,221

–

2,221

[Information relating to gain on bargain purchase by reporting segment]
Year ended March 31, 2016 (from April 1, 2015 to March 31, 2016)
Not applicableYear ended March 31, 2017 (from April 1, 2016 to March 31, 2017)
Not applicable– 26 –

Per-share information

Net assets per share
Net income per share

Year ended March 31, 2016
(from April 1, 2015
to March 31, 2016)
4,238.35 yen
468.03 yen

Year ended March 31, 2017(from April 1, 2016
to March 31, 2017)
4,743.27 yen
216.44 yen(Notes) 1. Diluted net income per share is not stated because there are no dilutive shares.
2. A consolidation of shares of the Company’s common stock at a 10:1 ratio was conducted, with aneffective date of October 1, 2016. Associated with this, net assets per share and net income per share
are calculated on the assumption that the consolidation of shares was conducted at the beginning of
the previous fiscal year.
3. The basis for the calculation of net income per share is as follows.
Year ended March 31, 2016
Year ended March 31, 2017(from April 1, 2015
(from April 1, 2016
to March 31, 2016)
to March 31, 2017)
Net income per share
Net income attributable to owners of parent
61,31628,352(million yen)Amount not attributable to ordinary shareholders––(million yen)
Net income attributable to owners of parent
61,31628,352
pertaining to common stock (million yen)
Average number of shares issued during terms(thousand shares)

131,010– 27 –

130,993

Important Subsequent Events(Business Combination by Acquisition Method)
The Company signed a share transfer agreement dated September 28, 2016, with Luvata Espoo Oy and its two
subsidiaries, for the acquisition of the Special Products Division (“Luvata SP”) of the Luvata Group throughequity acquisition and business transfer.
On May 2, 2017, the Company acquired Luvata SP through a subsidiary, MMC Copper Products Oy.
1. Overview of the Business Combination(1) The acquired company and the description
Acquired companies: 14 companies belonging to Luvata SP
Business: Manufacture and sale of copper processed products(2) Main reason for the business combination
The purpose of the business combination is to accelerate the global expansion of the Copper & Copper
Alloy Products business of the Company by pursuing various synergies though the business andcustomer bases of the Special Products Division of Luvata and to lead it to the establishment of ahigh-profitable business structure(3) Date of the business combination
May 2, 2017(4) Legal form of the business combination
Acquisition of shares and business transfer(5) Name of the companies after the business combination
No change(6) Percentage of voting rights acquired
100%(7) Main grounds for deciding on the acquisition of the companies
The Company came to practically control the acquired companies.
2. Acquisition Cost and Breakdown
Consideration for acquisition: cash and deposits of 40,129 million yen (approximation)
Acquisition cost:
40,129 million yen (approximation)(Note) The amount above is calculated from the acquisition cost in euro, 335 million euros, using theexchange rate on March 31, 2017. The amount may change due to price adjustments, among otherreasons.
3. Goodwill Generated, Reason for Goodwill, Amortization Method, and Amortization Period
Being calculated
4. Breakdown of Assets Accepted and Liabilities Assumed on the Date of Business Combination
Being calculated– 28 –