[Translation: Please note that the following purports to be an excerpt translation from theJapanese original Business Report and Financial Statements prepared for the convenience ofshareholders outside Japan. However, in the case of any discrepancy between the translation and
the Japanese original, the latter shall prevail.]

BUSINESS REPORT(For the Period from April 1, 2015 through March 31, 2016)
1. Particulars Concerning the State of the Group(1) Business Developments[The Group’s operating profit and ordinary income decreased, affected by such factors as adownturn in copper prices and lower domestic demand for cement.]
During the fiscal year ended March 31, 2016, the economics of China and otheremerging markets showed signs of weakness, and economic growth slowed in other countries,
including the United States.
In the Japanese economy, employment and income conditions improved, but lackluster
personal consumption and production caused the economy to decelerate from midway throughthe year.
Looking at the Mitsubishi Materials Group’s operating environment, although foreignexchange markets were generally characterized by year-on-year yen depreciation the Group
was affected by such factors as a decrease in copper and other key metal prices, as well as afall in the overall demand for cement in Japan.
Against this backdrop, the Group embarked on the medium-term management plan
(FY2015–2017), “Materials Premium 2016—Challenge to become the world’s leadingbusiness group.” This plan defines the groupwide growth strategies of “Fortifying thefoundation for growth,” “Strengthening global competitiveness” and “Pursuing a recyclingbased business model.” The Group continued to implement a variety of measures based onthese strategies, such as the expansion of overseas bases—particularly in Asia, and underwent
a process of business selection and focus, among other activities.
As a result, consolidated net sales for the fiscal year amounted to ¥1,417,895 million,
down 6.5% from the previous fiscal year. Operating profit decreased 2.0% to ¥70,420 million,
and ordinary income decreased 10.7% to ¥72,442 million. Net income attributable to ownersof the parent increased 9.2% to ¥61,316 million, due in part to the posting of extraordinary
income in relation to the sale of some of the Group’s holdings of common stock in SUMCO－

1 －Corporation.
On a non-consolidated basis, net sales amounted to ¥735,501 million, down 9.3% from theprevious fiscal year. Operating profit increased 11.7% to ¥26,478 million, ordinary income
decreased 0.8% to ¥35,409 million, and net income decreased 0.6% to ¥33,001 million.
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 allshareholders as one of our most important priorities. Accordingly, our policy is to makedecisions on profit appropriation based on comprehensive consideration of various 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,
2016, decided to distribute a year-end dividend of ¥5. And with an interim dividend of ¥5, theCompany made the full-year dividend for the fiscal year under review of ¥10 per share (up ¥2from the preceding fiscal year).

－

2 －Below is a report of the Group’s performance by business segment.
● Cement[Despite lower sales volumes in Japan and China, recovering demand in the United States led
to higher sales in the Cement business and boosted operating profit.]
In the domestic cement business, overall demand declined and sales volumes decreased.
Although earthquake reconstruction demand was firm in the Tohoku area, in otherregions the business was affected by a decline in public works and labor shortages in theconstruction industry, which led to project delays. In the United States, with cement demand
continuing on a recovery trend sales volumes increased in Southern California, centering onsuch private-sector categories as residential housing and commercial facility construction.
Selling prices rose in the country, and production costs were down year on year, as electricity
and fuel costs fell throughout the year, and the Group’s efforts to curtail repair costs weresuccessful in reducing these expenses. In China, sales volumes decreased substantially due tofalling demand for real estate investment in Shandong.
As a result, sales and operating profit increased for the segment. Ordinary income roseyear on year, due to the increase in operating profit.
Consolidated net sales in the Cement business amounted to ¥197,500 million, up 2.2%
from the previous fiscal year. Operating profit rose 15.8% to ¥20,131 million and ordinary
income increased 17.8% to ¥19,710 million.
● Metals[In the copper business, operating profit increased as a result of lower operating costs andhigher production in Japan. Operating profit in the gold and other valuable metals businessdeclined due to lower palladium prices, among other factors. In the copper and copper alloy
products business, operating profit fell, due in part to lower sales of products for the
automobile sector.]
In the copper business, net sales fell but operating profit rose. The business wasaffected by lower copper prices and a decrease in sales of purchased items, as well as atemporary suspension of operations at PT. Smelting in Indonesia from mid-June 2015 to early
September due to equipment trouble. However, operating costs fell and production in Japan
increased, as the Naoshima Smelter & Refinery underwent no periodic furnace repairs during
the term.
In the gold and other valuable metals business, net sales increased but operating profit
fell due to higher ore grades, which led to increased production, but the business was affected－

3 －by lower palladium prices and other factors.
In the copper and copper alloy products business, both net sales and operating profit
decreased, because sales of products for automobiles, semiconductors and others fell.
Consequently, the overall business recorded year-on-year decreases in net sales andoperating 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.
Consolidated net sales in the Metals business amounted to ¥688,721 million, down
15.1% from the previous fiscal year. Operating profit fell 2.4% to ¥24,247 million andordinary income decreased 17.7% to ¥27,048 million.
● Advanced Materials & Tools[Operating profit in the cemented carbide products business increased, owing to theconversion of Mitsubishi Hitachi Tool Engineering, Ltd., to a consolidated subsidiary. In thehigh-performance metal products business, operating profit declined due to a decrease in thenumber of consolidated subsidiaries.]
In the cemented carbide products business, demand was robust in Japan and overseas,
particularly in Europe and the United States. Against this backdrop, we conducted proactive
sales promotions. These factors, plus the addition of Mitsubishi Hitachi Tool Engineering, Ltd.
(formerly Hitachi Tool Engineering, Ltd.) as a consolidated subsidiary in April 2015, led toincreases in net sales and operating profit.
In the high-performance metal products business, although sales of products for the
automobile sector hovered at a steady level in North America, both net sales and operating
profit decreased as sales volumes in Japan declined. Among other factors, Hitachi Metals
MMC Superalloy, Ltd. (formerly MMC Superalloy Corporation) transitioned to an equitymethod affiliate of the Group from a consolidated subsidiary in July 2014.
Consequently, this segment recorded higher sales overall, while operating profit
decreased. Ordinary income fell year on year, owing to lower operating profit and a decreasein the foreign exchange gain.
Consolidated net sales in the Advanced Materials & Tools business amounted to¥151,668 million, up 12.6% from the previous fiscal year. Operating profit fell 4.2% to¥16,022 million and ordinary income decreased 9.7% to ¥14,965 million.
● Electronic Materials & Components[Operating profit in the advanced materials and chemical products business decreased as aresult of lower sales, for products for smartphones, among others. In the electronic－

4 －components business, operating profit fell due to lower sales of products for household
appliances. In the polycrystalline silicon business, operating profit increased thanks to higher
sales.]In the advanced materials and chemical products business, despite the steady progressin sales of semiconductor manufacturing equipment-related products and products forautomotive glass, sales of LSI products for smartphones and products for hybrid automobiles
decreased, causing both net sales and operating profit to fall.
In the electronic components business, sales of products for telecommunications
equipment expanded. However, costs rose due to investments in new products and sales of
products for household appliances were down. As a result, net sales were up but operating
profit fell.
In the polycrystalline silicon business, operations were temporarily suspended at the
Yokkaichi Plant from early January to late-June of 2014. In the year under review, however,the plant continued with normal operations, leading to an increase in sales. As a result, both
net sales and operating profit rose.
Owing to the abovementioned factors, net sales rose for the segment, but operating profit
decreased. Ordinary income decreased due to a decline in operating profit.
Consolidated net sales in the Electronic Materials & Components business amounted to¥70,254 million, up 4.8% from the previous fiscal year. Operating profit decreased 28.8% to¥3,184 million and ordinary income fell 12.8% to ¥6,339 million.
● Aluminum[Demand in the aluminum cans business increased. In the rolled aluminum and processedaluminum products business, demand was down for products for automobiles. Operating
profit for the overall Aluminum business decreased due to a higher cost of materials.]
In the aluminum cans business, demand increased for both bottle cans and regular cans.
On the other hand, the cost of materials increased.
In the rolled aluminum and processed aluminum products business, demand was down
for products for automobiles and products used in solar cells, while demand for products usedin aluminum cans increased.
As a result, net sales and operating profit were down year on year for the aluminumbusiness. Ordinary income decreased year on year, due to the decrease in operating profit.
Consolidated net sales in the Aluminum business amounted to ¥158,665 million, down
0.5% from the previous fiscal year. Operating profit fell 24.0% to ¥4,327 million and ordinary
income also decreased 29.1% to ¥3,641 million.

－

5 －● Others[Operating profit in the energy-related business increased as a result of higher sales related tonuclear power. In the home appliance recycling business, operating profit fell due to lower
processing volumes and other factors.]
In the energy-related business, while stagnant market conditions caused coal sales tofall, sales related to nuclear power increased. Sales and income both rose as a result.
In the home appliance recycling business, net sales and operating profit were down, due
to a reduction in the handling volume owing to the lack of impact from last-minute demand
after the increase in the consumption tax rate and a decline in metal scrap prices.
With the exception of the energy-related and home appliance recycling businesses, as awhole net sales fell while operating profit increased.
As a result, in the entire Others business, both net sales and operating profit rose year on
year. Ordinary income also rose, boosted by the increase in operating profit.
Consolidated net sales in the Others business amounted to ¥243,268 million, up 0.8%
from the previous fiscal year. Operating profit rose 10.5% to ¥10,331 million and ordinary
income increased 0.4% to ¥9,936 million.

－

6 －Sales, operating profit and ordinary income for each business segment of the Group were as
follows:
Business
Segment

CementMetalsAdvanced
Materials &Tools
Electronic
Materials &Components
Aluminum

OthersElimination
andCorporate
Assets or
Expenses

Item
Net Sales
Operating Profit
Ordinary Income
Net Sales
Operating Profit
Ordinary Income
Net Sales
Operating Profit
Ordinary Income
Net Sales
Operating Profit
Ordinary Income
Net Sales
Operating Profit
Ordinary Income
Net Sales
Operating Profit
Ordinary Income
Net Sales
Operating Profit

90th Period
91st Period
YOY(April 2014– March 2015) (April 2015– March 2016)
ChangeAmountAmount(%)% of Total% of Total(¥ Millions)(¥ Millions)
193,300
12.7
197,500
13.9
2.2
17,38524.2
20,131
28.6
15.8
16,72920.6
19,71027.2
17.8
811,633
53.5
688,72148.6(15.1)
24,852
34.6
24,24734.4(2.4)
32,851
40.5
27,04837.3(17.7)
134,6478.9
151,668
10.7
12.6
16,72423.3
16,02222.8(4.2)
16,57920.4
14,96520.7(9.7)
67,005
4.4
70,254
5.0
4.8
4,471
6.2
3,184
4.5
(28.8)
7,273
9.0
6,339
8.8
(12.8)
159,427
10.5
158,665
11.2
(0.5)
5,695
7.9
4,327
6.1
(24.0)
5,139
6.3
3,641
5.0
(29.1)
241,22415.9
243,268
17.2
0.8
9,350
13.0
10,331
14.7
10.5
9,899
12.2
9,936
13.7
0.4
(89,972)(5.9)(92,182)(6.5)
2.5(6,607)(9.2)(7,823)(11.1)
18.4

Ordinary Income(7,378)(9.1)(9,199)(12.7)

24.7

Net Sales
Operating Profit
Ordinary Income

1,517,265
71,87181,093

100.0
100.0
100.0

1,417,895
70,42072,442

100.0
100.0
100.0

(6.5)
(2.0)
(10.7)(Note)

Total
Note:

Net sales, operating profit and ordinary income resulting from transactions among the Business divisions
have been deducted in the “Elimination and Corporate Assets or Expenses” items.

－

7 －(2) Status of Group Financing
During the fiscal year under review, the Group raised funds primarily through theissuance of commercial paper and borrowings from banks. Debts (including corporate bonds)
as of the end of the fiscal year amounted to ¥526,308 million, down ¥104,563 million from ayear earlier.

(3) Status of Group Capital Expenditures
The Group determines its capital expenditures by carefully selecting investment casesin the fields where future profit and growth are expected while working to reduce interestbearing debt.
In the fiscal year under review, total capital expenditures amounted to ¥78,103 million,
which consisted mainly of maintenance and repairs of existing facilities in each business, aswell as reinforcement and streamlining of production facilities.
Capital expenditures by business segment in the fiscal year under review were as
follows:● Cement
The Group carried out development work related to limestone mine in Japan, as well as
maintenance and repairs on existing facilities mainly in Japan and the United States.
Capital expenditures in this business amounted to ¥17,561 million.
● Metals
The Group carried out maintenance and repair work at copper smelting and processing
facilities in Japan, and conducted construction related to the processing of precious metal
scrap (E-scrap).
Capital expenditures in this business amounted to ¥22,968 million.
● Advanced Materials & Tools
The Group carried out reinforcement and streamlining work in order to meet the increasing
demand in this business as a whole, as well as maintenance and repair work at existing
facilities.
Capital expenditures in this business amounted to ¥17,674 million.
● Electronic Materials & Components
The Group reinforced its production facilities for products for electronic materials &components, especially semiconductor-related products, and carried out maintenance andrepair work at existing facilities.
Capital expenditures in this business amounted to ¥3,535 million.

－

8 －● Aluminum
The Group reinforced its production facilities for aluminum beverage cans and carried out
maintenance and repair work at existing facilities.
Capital expenditures in this business amounted to ¥7,196 million.
● Others
The Group carried out maintenance and repair work at existing facilities.
Capital expenditures in this business amounted to ¥9,166 million.

－

9 －(4) Trends of Assets and Profit and Loss Accounts
1. The Group’s Trends of Assets and Profit and Loss Accounts (Consolidated)(¥ millions, except per share data)

Net Sales

88th Period
89th Period
90th Period
91st Period(April 2012 – (April 2013 – (April 2014 – (April 2015 –March 2013) March 2014) March 2015) March 2016)
1,287,251
1,414,796
1,517,265
1,417,895

Operating Profit

52,50066,281

71,87170,420Ordinary Income

74,41476,90281,09372,442Net Income Attributable to
Owners of the Parent

36,94852,55156,14761,316Net Income per Share

28.19

40.10

42.85

46.80

Net Assets

466,231525,707629,514645,017

Net Assets per Share309.17348.54420.36423.83

Total Assets

1,811,767

1,778,505

1,898,157

1,793,375

2. The Company’s Trends of Assets and Profit and Loss Accounts (Non-consolidated)(¥ millions, except per share data)

Net Sales

88th Period
89th Period
90th Period
91st Period(April 2012 – (April 2013 – (April 2014 – (April 2015 –March 2013) March 2014) March 2015) March 2016)
673,632
735,558
810,505
735,501

Operating Profit

18,281

23,18023,70826,478

Ordinary Income

54,332

42,13435,69935,409Net Income

44,73842,37733,19333,001Net Income per Share

34.13

32.33

25.33

25.19

Net Assets

373,683

398,674

432,265

435,094

Net Assets per Share

285.10304.22329.91

332.13

Total Assets

1,256,038

1,177,558

1,252,174

1,158,968－

10 －(5) Priorities for the Group
1. Group Priorities[We aim to become the “world’s leading businesses group,” based on the growthstrategies of fortifying the foundation for growth, strengthening global competitivenessand pursuing a recycling-based business model.]Overall, the Group sees signs for concern in the global economy due to a downturn in
China and other emerging markets, despite the prospect of gradual economic recovery
centered on Europe and the United States.
We believe the Japanese economy will continue its modest recovery, buoyed by
improvements in employment and income conditions, but recognize that overseas economic
trends pose a risk of negatively affecting the Japanese economy.
The Group expects its operating environment be affected by a backlash to yen
appreciation in foreign exchange markets, as well as ongoing uncertainty about key metal
prices.
Against this backdrop, the Group is implementing various measures to enhance
corporate value, based on its “long-term management policy,” which looks toward the
beginning of 2020s, and its medium-term management plan (FY2015-2017), “Materials
Premium 2016—Challenge to become the world’s leading business group,” described below.
(i) Long-Term Management Policy
In recent years, the business environment has dramatically changed because of a more
complex worldwide economy, diversified social needs, and an acceleration of the speed oftechnical innovations. In this situation, the Group is striving “to become the world’s leadingbusiness group committed to supporting recycling-oriented society through materials
innovation, with use of our unique and distinctive technologies, by the early 2020s” toward
the beginning of the 2020s in order to securely implement the corporate philosophy “For
People, Society and the Earth.”
Based on this policy, each operation of the Group commits to create valuable products
and services with our unique technologies and to take an important position in the industry
and market.
(ii) Management policy in the medium-term management plan (FY2015–2017)
Our medium-term management plan “Materials Premium 2016” is positioned as a firststep to focus on strengthening our infrastructure to become the world’s leading business group,
which is defined in our long-term management policy, and we have set the followings as the

－

11 －

growth strategies for the overall Group.
a. 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 operational frameworks which contribute to the growth of
the Group business.
Further, we will continue to work to improve our financial position by raisingprofitability through business selection and focus, while accelerating growth by executing
strategic investments worth ¥100 billion over the three-year period, focusing on M&A andexpansion in production and sales locations in the overseas countries. We are also working to
improve profitability through an ongoing process of business selection and focus, whichshould continue to improve our financial structure.
b. Strengthening global competitiveness
Focusing on expanding our current production and sales locations in the overseas
countries as well as developing new production and sales locations mainly in the 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 ourcompetitiveness.
c. 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 thebusiness model to circulate wastes to the upstream market for utilization.
Through the “Materials Premium” plan, which derives from our unique strength as aconglomerate, we will facilitate the recycling of waste that has so far been hard to process sothat we can contribute to the sustainable growth of society.

－

12 －

2. Priorities in Each Business●Cement
In the domestic cement business, the demand outlook is unclear. Nevertheless,shipments in relation to earthquake reconstruction are expected to be firm, and a number oflarge-scale projects are slated to commence. These include projects related to the upcoming
Olympic Games and construction of a linear Shinkansen (in some sections). As a result, in
fiscal 2016 total domestic demand for cement is expected to remain at the previous year’slevel of approximately 43 million tons. Under these circumstances, we will work to securesales volumes by steadily implementing initiatives to benefit from demand related to largescale projects.
In the U.S. cement business, we anticipate continuing recovery in demand, driven by
growth in the private sector. Against this backdrop, we will endeavor to bolster sales andprofits by boosting sales volume and engaging in further price revisions.
In the Chinese cement business, we see few signs that market conditions are improving. We
will continue with a host of initiatives aimed at increasing sales and profits, such as securing
orders for new infrastructure projects, ensuring appropriate pricing and curtailing production
costs.

●Metals
We see the demand outlook for copper ore as unclear, due to the prospect of aslowdown in the Chinese economy.
Copper prices are low at present, mainly due to economic deceleration in China. We
will continue to monitor market trends, along with price trends in the foreign exchange andstock markets.
In processed copper products, we anticipate a gradual recovery in demand forautomotive and other products.
Under these conditions, we will continue working to lower our breakeven point in themetals 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 difficultto-handle waste and increasing E-Scrap processing volumes. Through these efforts, the Group
expects to improve profits in the Metals segment. In the processed copper products business,
we will continue to increase profitability by enhancing sales competitiveness through

－

13 －

accelerated development of alloys, drawing on our technological and development capabilities.

●Advanced Materials & Tools
In the cemented carbide products business, we expect the deceleration of the Chinese
economy to lead to a delayed market recovery for orders. That said, over the medium to longterm we expect demand to expand, particularly among our customer base in the automotive
and aircraft industries.
Under these circumstances, we will augment our sales bases and expand our sales
network for cemented carbide products, pursue highly efficient and sophisticated productdevelopment and further reinforce our technical service structure. Furthermore, we willcontinue working to stabilize our sourcing of tungsten—a key constituent of cemented carbide
products—by improving the recycling ratio and through other efforts to diversify procurement
sources.
Turning to the high-performance metal products business, we expect demand for our mainstay
sintered products to increase in line with growth in the automotive industry. The Group will
work to increase earnings by augmenting its overseas production bases in addition toenhancing productivity at production plants in Japan.

●Electronic Materials & Components
In the advanced materials business, the demand outlook for semiconductor-related
products and products for solar cells is opaque. We also expect a decrease in demand for partsfor hybrid vehicles, but are working to expand sales of products to non-automotive industries.
Going forward, we aim to remain a step ahead of customers’ needs in each of the markets inwhich we participate. We will strive to augment revenues and profits by making full use of
our core technological capabilities, and strengthening our sales competitiveness and ourability to make proposals to clients.
In the electronic components business, sales of products for household appliances are
falling as Chinese economic growth decelerates. In response, we are reinforcing our sales
structure in emerging markets and, through new investments, working to increase sales of
products for refrigerators, vehicles and industrial equipment. We will continue working tostrengthen our business structure by introducing new products early and further reducing costs.
In polycrystalline silicon, we are endeavoring to establish a stable and efficient
operating structure, bolster quality and reduce costs, thereby creating a business structure that

－

14 －

will enable us to ensure profits even when demand levels are low.

●Aluminum
In the aluminum cans business, while working to increase our stability of orders forregular cans, we are working to expand sales of bottle cans. We will make an effort topromote advantageous procurement of raw materials, stable product quality and cost
reductions.
In the rolled aluminum and processed aluminum products business in Japan, we will
work to stabilize orders of can materials and products for automobiles and electronic materials.
We will also endeavor to expand sales of automotive products overseas, where demand is
expected to rise.
Throughout this business, costs are highly susceptible to fluctuations in raw materials prices,
so we are mounting a number of initiatives on this front.
We will actively promote the Group’s ongoing initiatives in the business of recycling
used aluminum cans.

We ask for the ongoing support and cooperation of shareholders as we implement
these measures with the aim of consolidating the collective potential of the Group andcreating value as an integrated business entity.

－

15 －

(6) Major Business Activities of the Group (as of March 31, 2016)
The major business activities of the Group are production and sales of cement andready-mixed concrete and other products; refining, production and sales of copper, gold, silver
and other metals; production and sales of cemented carbide products and high-performance
metal products; production and sales of advanced materials, chemical products, electronic
components and polycrystalline silicon; and production and sales of aluminum beverage cans ,rolled aluminum and processed aluminum products ,etc. The major products and services ofeach business are as follows:Business Division
CementMetalsAdvanced Materials& Tools
Electronic Materials& Components
Aluminum

OthersMajor Products
Ordinary Portland cement and various other types of cements, cement-basedsolidification materials, aggregate, ready-mixed concrete, secondary cement
products.
Copper, gold, silver, lead, tin, zinc alloy, sulfuric acid, processed copper
products (copper cakes, billets, copper alloy products, wire rods, etc.)
Cemented carbide products (cemented carbide tools, cement carbide alloy,etc.), high-performance metal products (sintered products, precision forging
products, etc.)
Advanced materials (fine materials for assembly, sputtering targets, precision
silicon products, columnar crystal silicon, insulating circuit substrates, etc.),chemical products (fluorine chemical products, conductive coatings, etc.),
electronic components (surge absorbers, thermistor sensors, chip antennas,etc.), polycrystalline silicon, silane gas, etc.
Bodies, ends and caps of aluminum beverage cans, rolled aluminum products,
processed aluminum products, etc.
Energy related (coal, geothermal and hydro-power generation, nuclear fuelcycling business (consignment of surveys, research, design and operations,etc.)), precious metals (precious metals products, jewelry, etc.), environmental
and recycling related (recycling of home appliances, etc.), real estate (realestate development, leasing, management, trading, forestry), others(engineering, geological surveys, resource exploration, and consulting, etc.)

－

16 －

(7) The Group’s Major Plants and Business Offices (as of March 31, 2016)
1. The Company
1-3-2, Otemachi, Chiyoda-ku, Tokyo
Head office
CementMetalsAomori Plant, Iwate Plant, Yokoze Plant (Saitama),
Higashitani Mine (Fukuoka), Kyushu Plant (Fukuoka)
Akita Refinery, Naoshima Smelter & Refinery (Kagawa),
Ikuno Plant (Hyogo), Sakai Plant (Osaka)

Advanced Materials Tsukuba Plant (Ibaraki), Gifu Plant, Akashi Plant (Hyogo),& Tools
Plants and others
Electronic Materials Sanda Plant (Hyogo), Ceramics Plant (Saitama), Yokkaichi& Components Plant (Mie)

Branch (office)Saitama Property Management Office,Human Resources Development Center (Saitama),
Others
Production Engineering Center (Saitama)
Energy Project & Technology Center (Saitama)
Sapporo Branch, Tohoku Branch (Miyagi), Nagoya Branch,
Osaka Regional Head Office, Kyushu Branch (Fukuoka)
Central Research Institute (Ibaraki)

R&D centers
Overseas offices Vancouver Office (Canada), Chile Office, London Office (United Kingdom)
Notes 1, 2 and 3

Note 1: The Fiji Office was closed on May 14, 2015.
Note 2: The Southeast Asia Business Support Center (Thailand) was closed on June 30, 2015.
Note 3: The Sydney Office (Australia) was closed on March 31, 2016.

－

17 －

2. Major Subsidiaries
Business Division
CementMetalsAdvanced Materials& Tools 2)
Electronic Materials& Components
Aluminum
OthersName of Subsidiaries 1)
MCC Development Corp. (U.S.), Robertson’s Ready Mix, Ltd. (U.S.),
Mitsubishi Cement Corp. (U.S.)PT Smelting (Indonesia), Mitsubishi Shindoh Co., Ltd., (Tokyo),
Mitsubishi Cable Industries, Ltd. (Tokyo), Onahama Smelting & Refining Co.,
Ltd. (Tokyo), Sambo Metals Corp. (Osaka)
Diamet Corp. (Niigata), MMC Hartmetall GmbH (Germany),
Mitsubishi Hitachi Tool Engineering, Ltd. (Tokyo)
Mitsubishi Polycrystalline Silicon America Corp. (U.S.),
Mitsubishi Materials Electronic Chemicals Co., Ltd. (Akita),
MMC Electronics (HK) Ltd. (China)
Universal Can Corp. (Tokyo), Mitsubishi Aluminum Co., Ltd. (Tokyo),
MA Packaging Co., Ltd. (Tokyo)
Mitsubishi Materials Trading Corp. (Tokyo),
Mitsubishi Materials Techno Corp. (Tokyo), Dia Consultants Co., Ltd. (Tokyo),
Mitsubishi Materials Real Estate Corp. (Tokyo), Materials’ Finance Co., Ltd.
(Tokyo)Note 1: Words within parentheses in the table denote the regions (for domestic subsidiaries) or countries (for overseas
subsidiaries) where each subsidiary's head office is located.
Note 2: Mitsubishi Hitachi Tool Engineering, Ltd., became a consolidated subsidiary on April 1, 2015.

－

18 －

(8) The Status of Employees (as of March 31, 2016)
1. Status of Employees of the Group (Consolidated)
Business Division

Number of EmployeesNote 1

Cement4,166 (decreased by 189)

Metals5,443 (increased by 101)

Advanced Materials & Tools Note 26,829 (increased by 954)

Electronic Materials & Components

1,574 (increased by 157)

Note 3

Aluminum

2,758 (-)

Others3,199 (increased by 178)

All Companies (for the whole Group) Note 4667 (increased by 22)

Total

24,636 (increased by 1,223)

Note 1: Employee numbers within parentheses denote the change from the previous fiscal year-end.
Note 2: Employee numbers were up in the Advanced Materials & Tools business mainly due to the impact of newly
consolidated subsidiaries: Mitsubishi Hitachi Tool Engineering, Ltd., MMC Hitachi Tool Engineering EuropeGmbH and MMC Hitachi Tool Engineering (Shanghai), Ltd.
Note 3: Employee numbers were up in the Electronic Materials & Components business due partly to the impact ofconverting MMC Electronics Lao Co., Ltd., and MMC Shanghai Co., Ltd. to consolidated subsidiaries.
Note 4: Employees stated for all companies (for the whole Group) are attached to administrative divisions that cannot
be demarcated within a specific business division.

2. Status of Employees of the Company (Non-consolidated)
Number of Employees
YOY Change
Average Years of
Average Age (years)(persons)(persons)
Employment (years)
4,525

Up 77

－

41.2

19 －

17.5

(9) The State of Major Subsidiaries and Affiliates (as of March 31, 2016)
1. The State of Major Subsidiaries
Percentage ofPaid-in
Ownership
Name of the Company
Line of Business
Capital(including indirectownership) (%)

PT Smelting

326 million U.S.
dollars 1)

60.5

Production and sales of electrolytic
copper in Indonesia

MCC Development
Corp.
Onahama Smelting &Refining Co., Ltd.

811 million U.S.
dollars 1), 2),70.0

Investment in ready-mixed concretebusinesses in the U.S.

6,999 million yen

55.7

80 million yen

100.0

1,500 million yen

100.0

70 million U.S.
dollars 1), 2)

67.0

328 million U.S.
dollars 1)

100.0

Production and sales of polycrystalline
silicon for semiconductors in the U.S.

30 million yen

100.0

Financingaffiliates

8,196 million yen

87.7

Production and sales of rolled andprocessed aluminum products

8,713 million yen

100.0

21,815 million yen

100.0

1,455 million yen

51.0

1,042 million yen

100.0

393 million yen

100.0

4,500 million yen

100.0

Sambo Metals Corp.
Diamet Corp.
Mitsubishi Cement
Corp.
Mitsubishi
Polycrystalline
Silicon America Corp.
Materials’ FinanceCo., Ltd.
Mitsubishi AluminumCo., Ltd.
Mitsubishi ShindohCo., Ltd.
Mitsubishi Cable
Industries, Ltd.
Mitsubishi Hitachi
Tool Engineering, Ltd.
Mitsubishi Materials
Techno Corp.
Mitsubishi Materials
Trading Corp.
Mitsubishi Materials
Real Estate Corp.

－

20 －

Production and sales of electrolytic
copperSales of processed copper products andprocessed copper alloy products
Production and sales of sinteredproducts
Production and sales of cement in thesouth-west area of the U.S.

theCompany

andits

Processing and sales of copper andcopper alloy
Production and sales of optical andelectronic components, cables forelectricity and communication
Production and sales of cemented
carbide tools
Technical construction and civilengineering; production and sales ofindustrial machinery
Sales of the Company’s products andother non-ferrous metal products
Sales and leasing of real estateUniversal Can Corp.

8,000 million
yen

80.0

Robertson’s
Ready Mix, Ltd.

32 million U.S.
dollars 1), 2)

100.0

Production and sales of aluminum
beverage cans
Production and sales of ready-mixed
concrete and aggregate in the southwest area of the U.S.

Note 1: Paid-in capital is shown.
Note 2: This company closes accounts in December. For that reason, paid-in capital as of December 31, 2015 is listed,
but there is no change in the paid-in capital as of March 31, 2016.

－

21 －

2) The State of Major Affiliates
Name of the Company

Percentage ofPaid-in Capital
Ownership(Million Yen) (including indirect

Line of Businessownership) (%)

Ube-Mitsubishi Cement
Corp.

8,000

50.0

NM Cement Co., Ltd

7,001

30.0

Kobelco & Materials
Copper Tube Co., Ltd.

6,000

45.0

138,718

18.4

1)

2)

P.S. Mitsubishi
Construction Co., Ltd

4,218

33.5

Hitachi Metals MMC
Superalloy, Ltd.

3,808

49.0

SUMCO Corp.

Sales of cement and cement
related products
Investment in Nghi Son Cement
Corp. (Vietnam)
Production and sales of copper
tubes and fabricated copper tubes
Production and sales of siliconwafers for semiconductors
Pre-stressed concrete works, civilengineering and sales of concrete
products
Production and sales of special
heat resistant alloys, corrosion
resistant alloys, special copper
alloys and other non-ferrous
metal materials

Note 1: Due to changes in investment in April and May 2015, SUMCO Corporation’s capital increased from ¥136,607 million to ¥138,718
million.
Note 2: As indicated in the clause below entitled “(10) Acquisition or disposal of shares, equity interests or share options in othercompanies,” the Company’s stake in SUMCO Corporation has decreased to 18.4% due to the sale of some of its holdings of common
stock.

－

22 －(10) Acquisition or disposal of shares, equity interests or share options in othercompanies
1) On April 1, 2015, based on a resolution passed at Board of Directors meeting on September
26, 2014, the Company acquired from Hitachi Metals, Ltd., 51% of the issued shares in
Hitachi Tool Engineering, Ltd. (now Mitsubishi Hitachi Tool Engineering, Ltd.), making thiscompany a consolidated subsidiary of the Company.
2) Based on a resolution passed at a Board of Directors meeting on March 3, 2015, theCompany conducted a sale by offering a portion of its common stock of SUMCO Corporation
with a delivery date of April 28, 2015. In accordance with a resolution passed at the same
Board of Directors meeting, on May 11, 2015, the Company received a redemption of all its
holdings of class shares (preferred shares) of SUMCO Corporation. In addition, due to theexercise of the Green Shoe option by SMBC Nikko Securities Inc., the Company sold aportion of its common shares held in SUMCO Corporation to SMBC Nikko Securities Inc.,
with a paymentdate of May 27, 2015.
(11) The Group’s Major Lenders (as of March 31, 2016)
Company Shares held by the Lender
Borrowed
Major Lenders
AmountPercentage of
Number of Shares Held
(Million Yen)

(Thousand)Shareholding (%)

122,214

24,651

1.9

82,098

11,5940.9

Mizuho Bank, Ltd.

36,1241,570

0.1

The Norinchukin Bank

16,7875,001

0.4

The Hachijuni Bank, Ltd.

16,1112,238

0.2

The Bank of Tokyo-Mitsubishi
UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation

Note: Percentages of shareholding were calculated after deducting treasury shares (4,862,944 shares).

－

23 －

2. Articles Concerning Stock (as of March 31, 2016)(1) Total number of authorized shares: 3,400,000,000 (no change from the previous fiscal
year-end)(2) Total number of issued shares: 1,314,895,351 (no change from the previous fiscal yearend)(3) Number of shareholders: 109,379 (decreased by 4,819 from the previous fiscal year-end)
This includes 77,918 shareholders with voting rights (decreased by 3,656 from the previous
fiscal year-end).
(4) Major Shareholders
Name of Shareholders

Number of Shares Held(Thousand)Japan Trustee Services Bank, Ltd.
(Trust account)
The Master Trust Bank of Japan, Ltd.
(Trust account)
National Mutual Insurance
Federation of Agricultural
Cooperatives
Meiji Yasuda Life Insurance
Company

Percentage ofShareholding (%)

85,997

6.6

53,8204.1

31,351

2.4

31,018

2.4

MSIP CLIENT SECURITIES

30,0582.3

The Bank of Tokyo-Mitsubishi UFJ,Ltd.

24,651

1.9

Mitsubishi Heavy Industries, Ltd.

19,0001.5

Mitsubishi Estate Co., Ltd.

17,397

1.3

STATE STREET BANK WEST
CLIENT-TREATY 505234

17,263

1.3

Nippon Life Insurance Company

16,736

1.3

Note: Percentages of shareholding were calculated after deducting treasury shares (4,862,944 shares).

－

24 －

3. Articles Concerning the Company’s Executives(1) Directors and Audit and Supervisory Board Members (as of March 31, 2016)
Important Positions
Position and
Title
Name
of Other
Responsibilities
Organizations
Representative Director
ChairmanHiroshi Yao

Representative Director
President

Akira
TakeuchiRepresentative Director
Executive Vice
President

Toshinori
Kato

Representative Director
Executive Vice
President

Akio
Hamaji

Representative Director
Managing Director

Osamu Iida

Representative Director
Managing Director

Naoki Ono

Assistant to the President
President, Cement Company

Representative Director
Managing Director

Nobuo
ShibanoDirector

Yukio
OkamotoAssistant to the President
President, Materials’ Financeresponsible for:Co., Ltd.
Internal Audit; Finance & Accounting
Representative Director,
Okamoto Associates, Inc.2);
Outside Director, Nippon
Yusen Kabushiki Kaisha(NYK Line)3); Outside
Director, NTT DATA
Corporation4)
Senior Advisor, Dai-Ichi
Life Research Institute Inc.5)
Outside Director, Innotech
Corporation6)
Outside Director, Gunosy
Inc.7), 8)

1) 18)

Director

TakashiMatsumoto1) 18)

General Operation of the Company
Assistant to the President
CEO, PT. Smelting

responsible for:
Crisis Management
Assistant to the President
responsible for:Procurement & Logistics; Aluminum
Business; Affiliated Corporations
Business
Assistant to the President
President, Metals Company
responsible for:
Safety&Health;Corporate
Production Engineering

－

25 －

Outside Director, P.S.
Mitsubishi Construction Co.,Ltd.

Audit & Supervisory
Board Member(Standing)

Keisuke
Yamanobe

Audit & Supervisory
Board Member(Standing)

Akihiko
MinatoAudit & Supervisory
Board Member(Standing)Toshikazu
Murai

Audit & Supervisory
Board Member
Audit & Supervisory
Board Member

10)

9)

11) 12) 18)

Senior Advisor, Mitsubishi
UFJ Trust and Banking
Corporation14)

Akio
Utsumi11) 13) 18)

15) 16)

Naoto Kasai

Representative Lawyer,
Kasai Sogo Law Office 17)11) 18)－26 －Note 1: Mr. Yukio Okamoto and Mr. Takashi Matsumoto are Outside Directors as defined in Article 2, Paragraph 15of the Companies Act.
Note 2: There is no business relationship between the Company and Okamoto Associates, Inc.
Note 3: There is a business relationship for the transportation of coal between the Company and NYK Line.
Note 4: There is a business relationship for the provision of IT services between the Company and NTT DATA
Corporation.
Note 5: There is no business relationship between the Company and Dai-Ichi Life Research Institute Inc.
Note 6: There is no business relationship between the Company and Innotech Corporation.
Note 7: Director, Mr. Takashi Matsumoto was appointed Outside Director of Gunosy Inc. on August 27, 2015.
Note 8: There is no business relationship between the Company and Gunosy Inc.
Note 9: Audit & Supervisory Board Member Mr. Keisuke Yamanobe has experience as Director of the Company,
responsible for accounting and finance, and has extensive knowledge of finance and accounting.
Note 10: Audit & Supervisory Board Member Mr. Keisuke Yamanobe stepped down as Outside Audit & Supervisory
Board Member of SUMCO Corporation on March 29, 2016.
Note 11: Audit & Supervisory Board Members Mr. Akihiko Minato, Mr. Akio Utsumi and Mr. Naoto Kasai are
Outside Audit & Supervisory Board Members as defined in Article 2, Paragraph 16 of the Companies Act.
Note 12: Audit & Supervisory Board Member Mr. Akihiko Minato has experience in think-tank management and has
extensive knowledge of finance and accounting.
Note 13: Audit & Supervisory Board Member Mr. Akio Utsumi has experience in management at financial
institutions and has extensive knowledge of finance and accounting.
Note 14: There is a business relationship between the Company and Mitsubishi UFJ Trust and Banking Corporation
for borrowing funds from it, providing debt guarantee to it, and entrusting the Company's pension funds to it.
Note 15: Audit & Supervisory Board Member Mr. Akio Utsumi stepped down as Outside Audit & Supervisory Board
Member of Mitsubishi Estate Co., Ltd., on June 26, 2015.
Note 16: There is a business relationship for real estate rental and leasing between the Company and Mitsubishi
Estate Co., Ltd.
Note 17: There is no business relationship between the Company and Kasai Sogo Law Office.
Note 18: The Company has notified the Tokyo Stock Exchange, Inc. that Mr. Yukio Okamoto and Mr. Takashi
Matsumoto are Independent Directors, and that Mr. Akihiko Minato, Mr. Akio Utsumi and Mr. Naoto Kasai
are Independent Auditors in accordance with the regulations, respectively. (An Independent
Director/Auditor is an Outside Director/Audit & Supervisory Board Member who is unlikely to haveconflicts of interest with general shareholders.)

The following Directors have been given new titles or posted to new positions shown below on April
1, 2016.

－27 －TitleRepresentative Director
Executive Vice President

Representative Director
Executive Vice President
Director, Senior
Executive Councilor
Director

Name

Position andResponsibilities

Important Positionsof Other
Organizations

Assistant to the President
President, Metals Company
Osamu
responsible for:
Iida
Corporate Production Engineering;Aluminum Business
Assistant to the President
OutsideDirector,
P.S.
President, Cement Company
Mitsubishi Construction Co.,
Naoki Ono responsible for:Ltd.
Environment & CSR, Resources

Toshinori
Kato
Akio
HamajiPresident, Mitsubishi AluminumCo., Ltd.

－

28 －(Reference) The following Executive Officers had assumed office as of April 1, 2016:
Title
Name
Position and Responsibilities
Senior Executive
Officer
Senior Executive
Officer
Senior Executive
Officer
Senior Executive
Officer
Senior Executive
Officer
Senior Executive
Officer

Kimball McCloud

President, Mitsubishi Cement Corp.
President, MCC Development Corp.
Chairman, Robertson’s Ready Mix, Ltd.
Vice President, Cement Company

Chitoshi Mori

Chairman & President, Mitsubishi Materials (Shanghai)
Corp.

Yoshihiko Kimura

Responsible for: System Strategy; Corporate Research& Development

Yasunobu Suzuki

General Manager, Corporate Strategy Div.

Hikaru Kimura

Responsible for: General Affairs; Human Resources;
Safety & Health; Affiliated Corporations BusinessPresident, Advanced Materials & Tools Company,
Responsible for: Procurement & Logistics
President, Electronic Materials & Components
Company
Responsible for Safety & HealthVice President, Advanced Materials & Tools Company

Fumio Tsurumaki

Senior Executive
Officer

Soichi Fukui

Executive Officer
Executive Officer

Dairiku Matsumoto
Kenji Shimamura
Kazuhiro Kishi

Executive Officer

Kiyoshi Furukawa

Executive Officer

Executive Officer

Tatsuro Mizuno
Shinichi Nakamura
Junichi Harada
Yoshikazu Yasui

Executive Officer

Kazuki Mizushima

Executive Officer

Hiroshi Nojiri

Executive Officer

Naotoshi Kumano

Executive Officer

Shigemitsu
Fukushima

Executive Officer

Makoto Shibata

Executive Officer

Tetsuro Sakai

Executive Officer

Executive Officer
Executive Officer

General Manager, General Affairs Dept.
Vice President, Cement Company
Vice President, Electronic Materials & Components
Company
Vice President, Cement Company
General Manager, Tsukuba Plant
General Manager, Aluminum Div.
General Manager, Human Resources Dept.
General Manager, Corporate Research & Development
Dept.
General Manager, Corporate Marketing & Overseas
Business Development Dept., Corporate Strategy Div.
General Manager, Corporate Culture Innovation Dept.,
Corporate Strategy Div.
General Manager, Health & Safety Dept.
General Manager, Environment & Energy Business
Unit
Vice President, Metals Company

－

29 －

Executive Officer

Susumu Sasaki

General Manager, Corporate Strategy Dept., Corporate
Strategy Div.

Executive Officer

Nobuhiro
Takayanagi

Vice President, Metals Company

－

30 －

(2) Outline of the Content of Limited Liability Agreement
Provisions of the Articles of Incorporation allow the Company to execute with
Directors (excluding those who are Executive Directors, etc.) and Audit & Supervisory Board
Members agreements limiting liability for damages in accordance with Article 427, Paragraph
1, of the Companies Act. In accordance with the provisions, the Company has concluded
Limited Liability Agreements with two Outside Directors and five Audit & Supervisory Board
Members. The outline of the Agreements is as follows.
1. Limited Liability Agreement with Directors (excluding those who are Executive Directors,
etc.)
With respect to liability as described in Article 423, Paragraph 1 of the Companies Act,if Directors (excluding those who are Executive Directors, etc.) performs their duties in goodfaith and without gross negligence, the Directors shall be liable to the Company for damages
only to the extent of minimum liability as set out in Article 425, Paragraph 1 of theCompanies Act. The Company shall indemnify the Directors for damages in excess of theamount of the liability.
2. Limited Liability Agreement with Audit & Supervisory Board Members
With respect to liability as described in Article 423, Paragraph 1 of the Companies Act,if the Audit & Supervisory Board Members perform their duty in good faith and without grossnegligence, the Audit & Supervisory Board Members shall be liable to the Company fordamages only to the extent of minimum liability as set out in Article 425, Paragraph 1 of theCompanies Act. The Company shall indemnify the Audit & Supervisory Board Members fordamages in excess of the amount of the liability.

－

31 －

(3) Directors and Audit & Supervisory Board Members’ Remuneration
Position
Directors (of which
Outside Directors)
Audit &
Supervisory Board
Members (of which
Outside Audit &Supervisory Board
Members)

Remuneration by Type(Millions of yen)

Total Amount of
Remuneration(Millions of yen)

Number of
Executives(persons) 1)

Basic 4)

Bonus 5)507 2)
(34)

384
(34)

122

11
(2)

138 3)
(62)

138
(62)

－

5
(3)

Note 1: The number of Directors includes two Directors whose term ended during the fiscal year under review. There
are nine Directors and five Audit & Supervisory Board Members as of the end of the fiscal year under review.
Note 2: It was resolved at the 82nd Ordinary General Meeting of Shareholders held on June 28, 2007 that the amountof remuneration to Directors should not exceed ¥49 million per month (excluding salaries as employees for
Directors who also serve as employees), including remuneration not exceeding ¥4 million for Outside
Directors.
Note 3: It was resolved at the 82nd Ordinary General Meeting of Shareholders held on June 28, 2007 that the amountof remuneration to Audit & Supervisory Board Members should not exceed ¥17 million per month.
Note 4: Of the basic remuneration for Directors, stock-based remuneration is ¥31 million.
Note 5: It was resolved at the 81st Ordinary General Meeting of Shareholders held on June 29, 2006 that the amountof bonuses for Directors other than Outside Directors should not exceed ¥170 million per annum.

(4) Policy regarding the determination of remuneration
1. Directors
We make it a basic policy to appropriately link the remuneration for Directors tocorporate performance and performance of individual Directors. The remuneration for Directors
is comprised of basic remuneration and bonuses (not paid to part-time Directors).
Firstly, the amount of basic remuneration is determined in accordance with the title
and performance of each Director.
The portion of basic remuneration is paid as stock-based remuneration (not paid to
Outside Directors) and used for purchasing the Company's shares through the Company's
director shareholding association. The Company's shares acquired based on the remuneration
cannot be sold at least during each Director's term of office. This aims to link the remuneration

－

32 －

to medium- and long-term corporate performance.
Secondly, the amount of bonuses, as remuneration linked to short-term corporate
performance, is determined at the end of the fiscal year by making as indicators consolidated net
income and ordinary income during the fiscal year and taking into consideration performance ofindividual Directors. The bonuses can be reduced or removed entirely depending on businessconditions and the amount of dividends for the fiscal year when bonuses are paid.
2. Audit & Supervisory Board Members
The remuneration for Audit & Supervisory Board Members is set at an appropriate
level based on discussions among them and is not linked to corporate performance in light of
the fact that they assume the responsibility for auditing the execution of duties by Directors as
an independent body entrusted by shareholders.

－

33 －

(5) Major Activities of Outside Directors and Auditors
StatusClassification

Name

Major Activities

Outside Director

Yukio Okamoto

Outside Director

Takashi Matsumoto

Outside Audit &Supervisory Board
MemberAkihiko Minato

Outside Audit &Supervisory Board
MemberAkio Utsumi

Outside Audit &Supervisory Board
MemberNaoto Kasai－

Mr. Yukio Okamoto participated in all 16 meetings ofthe Board of Directors held during the fiscal year underreview. Mr. Okamoto provides well-informed opinions
concerning general management as a Director and wellinformed opinions on international affairs as an
informed specialist on such fields, when necessary.
Mr. Takashi Matsumoto participated in 12 of the 13
meetings of the Board of Directors held following his
appointment on June 26, 2015. Mr. Matsumoto provides
well-informed opinions as a director with insight related
to administrative and fiscal policy, finance and othergeneral aspects of the economy, when necessary.
Mr. Akihiko Minato participated in all 16 meetings ofthe Board of Directors and all 15 meetings of the Audit& Supervisory Board held during the fiscal year underreview. Mr. Minato provides well-informed opinions as
an Audit & Supervisory Board Member, based onabundant experience as a manager in a think-tank andAudit & Supervisory Board Member, etc. and extensive
knowledge concerning business management, whennecessary.
Mr. Akio Utsumi participated in all 16 meetings of theBoard of Directors and all 15 meetings of the Audit &Supervisory Board held during the fiscal year underreview. Mr. Utsumi provides well-informed opinions as
an Audit & Supervisory Board Member, based onabundant experience as a manager in a financial
institution and extensive knowledge concerningbusiness management, when necessary.
Mr. Naoto Kasai participated in all 16 meetings of theBoard of Directors and all 15 meetings of the Audit &Supervisory Board held during the fiscal year underreview. Mr. Kasai provides well-informed opinions as
an Audit & Supervisory Board Member, based onabundant experience as an lawyer and extensive
knowledge concerning business management, whennecessary.

34 －4. Articles Concerning Accounting Auditor(1) Name of the Accounting Auditor: KPMG AZSA LLC(2) Remuneration of Accounting Auditor for the Year Ended March 31, 2016
AmountContent of the Remuneration(a) Remuneration paid by the Company to Accounting Auditors(b) Total amount of monetary and other property benefits paid by
the Company and its subsidiaries (including the above-mentioned)

145 million yen1)
384 million yen

Note 1: The Company has not subdivided the amount of remuneration for auditing based on the Financial Instruments
and Exchange Act and the amount of remuneration for auditing based on the Companies Act. In the Auditing
Agreement entered with the Accounting Auditor it is not possible to substantially subdivide the two. This
amount thus includes auditing remuneration based on the Financial Instruments and Exchange Law. The
Audit & Supervisory Board has agreed upon this amount taking into consideration the basis for calculatingcompensation, the status of execution of duties of the accounting auditor in the previous business year andthe opinions of Directors and other related internal departments.
Note 2: Among the major subsidiaries of the Company, PT Smelting, MCC Development Corp., Mitsubishi Cement
Corp., Mitsubishi Polycrystalline Silicon America Corp., and Robertson’s Ready Mix, Ltd. use the services
of auditing corporations (including auditors who have the appropriate auditing qualifications abroad) otherthan the services of KPMG AZSA LLC., to audit accounting related documents (in accordance with theCompanies Act and the Financial Instruments and Exchange Act and the applicable laws of the concerned
foreign countries’ own legislations).

(3) Content of Non-Auditing Duties
The Company subcontracts “Financial Due Diligence Work” and other duties (nonauditing duties) to the Accounting Auditor that are other than the duties of Article 2,
Paragraph 1 of Certified Public Accountants Act.
(4) Policy on Dismissal or Non-reappointment of the Accounting Auditor
Except in cases of dismissal of the Accounting Auditor by the Audit & Supervisory
Board as stipulated in Article 340 of the Companies Act, the Company’s Audit &Supervisory Board shall as a general rule decide on an agenda item regarding the decision not
to reappoint or to dismiss the Accounting Auditor in the event it is recognized that it isdifficult for the Accounting Auditor to execute its duties appropriately. Based on this decision,
the Company’s Board of Directors shall propose this at the General Meeting of Shareholders.

－

35 －

5. Systems to Ensure Appropriate Business Operations and the Status of Operation ofThose Systems●Fundamental Policy
The Company’s Board of Directors has resolved the following fundamental policy
regarding the establishment of systems to ensure appropriate business operations.
(1) Systems to Ensure Execution of Duties by Directors and Employees in Conformity
with Laws and Articles of Incorporation
1. The Company shall determine the Code of Conduct and internal regulations that should beobserved by the directors and employees and establish corporate ethics and a compliancesystem.
2. The Company shall determine execution of duties through the Board of Directors,
Corporate Strategy Committee and other committees in accordance with laws, Articles ofIncorporation, and internal regulations and others. In addition, the legal department and therelative department shall carry out the preliminary review of specific significant matters.
3. The Company shall determine the general policies and plans, etc., concerning complianceat the Meetings of the Board of Directors. In addition, the Company shall appoint a
Director in charge of compliance and establish a committee related to CSR (corporatesocial responsibility) and a division responsible for compliance. The Company shall also
enforce cross-divisional compliance promotion activities (including internal education) for
the whole Company.
4. The Company shall establish a reporting desk to deal with particulars related to problems
that may arise over compliance.
5. The Company shall enforce periodical auditing concerning the state of compliance in eachdivision by the division in charge of internal audits.
6. In accordance with its Code of Conduct, the Company shall establish internal structures toensure appropriate actions under its policy of resolutely rejecting any involvement
whatsoever with anti-social forces.
(2) Systems for Preservation and Management of Information Related to the Executionof Duties of Directors
The Company shall properly preserve and manage the minutes of the Meetings ofBoard of Directors, meetings of Corporate Strategy Committee and other significant
information, based on legislation, Articles of Incorporation and internal regulations and

－

36 －

policies.

－

37 －

(3) Regulations and Other Systems Concerning Risk Management
1. The Company shall deliberate carefully on significant matters through the Board of
Directors, Corporate Strategy Committee, and other decision-making bodies based on
legislations, Articles of Incorporation, internal regulations and others. In addition, theCompany shall carry out preliminary review of significant matters by legal and otherrelated departments based on the internal regulations and others in order to identify risks
and prevent risk elicitation and manifestation.
2. The Company shall determine the internal regulations, policies, and plans related to generalrisk management at the Meetings of the Board of Directors. In addition, the Company shallappoint the Director in charge of risk management and establish a committee related to
CSR and a division responsible for risk management, and shall enforce cross-divisionalrisk management promotion activities for the whole Company.
3. The Company shall determine the various internal regulations and others and enforce
suitable management concerning individual risks, including financial transaction risk,
credit transaction risk and information leakage risk.
4. The Company shall enforce suitable management based on the legislation and ordinances
concerning work-related accidents.
5. The Company shall build a communication system with the aim of preventing damage from
accidents on a massive scale, natural disasters or terrorism, and establish an organization to
respond to such events.
6. The Company shall enforce periodical auditing concerning the state of risk management ineach division by the division in charge of internal audits.
(4) Systems to Ensure Efficient Execution of Duties by Directors
1. The Company shall determine rationally the areas of responsibility of each of the Directors
and let the Executive Officers assist the Directors in their execution of duties in accordancewith the executive officers system. In addition, the Company shall determine the areas of
responsibility and authority of each body and division in accordance with the internal
regulations and others.
2. The Company shall determine the management plan, allocate suitable management
resources and authority among the various divisions to achieve the plan, and require thosedivisions to formulate their own specific plans. In addition, the Directors shall suitably
verify the progress state of the plan of each division and take appropriate measures when

－

38 －

necessary.
3. The Company shall enforce periodic auditing concerning the efficiency of the execution ofduties of each division by the division in charge of internal audit.

－

39 －

(5) Systems to Ensure Appropriate Operations by the Corporate Group Comprising theCompany and its Subsidiaries
1. The Company shall aim to establish corporate ethics and build a Group compliance and risk
management system (including an internal education system) to promote compliance andrisk management activities by the Group, including subsidiaries, based on codes of conduct
and internal regulations that are applied consistently throughout the Group.
2. Concerning each subsidiary, the Company shall aim to improve the soundness andefficiency of management of the subsidiary, and by extension the whole Group, bydetermining a response liaison division within the Company. The concerned division shallconsult and exchange information with the subsidiary concerning specific significant
matters.
3. The Company shall establish various regulations related to internal controls concerning
financial reporting. The Company shall also establish assessment mechanisms for thoseinternal controls and build a system to ensure the accuracy of the Group’s financial reports.
4. In addition to the above-mentioned 1, 2 and 3, the Company shall enforce periodic auditing
concerning compliance, risk management and the efficiency of management of subsidiaries
by the division in charge of internal audit of the Company.
(6) Particulars Concerning Employees assigned to assist Audit & Supervisory Board
Members, Such Employees’ Independence from Directors, and Particulars
Concerning Ensuring the Effectiveness of Instructions by Audit & Supervisory
Board Members to Such Employees
The Company shall establish a division and assign dedicated members to support theoperations of the Audit & Supervisory Board Members. In addition, the Company shallobtain the consent of the Audit & Supervisory Board concerning transfer of such employees
and consult with the Audit & Supervisory Board concerning assessment and evaluation ofthem.
(7) Systems for Reporting to Audit & Supervisory Board Members and for Ensuringthat People Making Reports Shall Not Experience Disadvantageous Treatment as a
Result of This Reporting
1. The Directors and employees shall swiftly report appropriate information to the Audit &Supervisory Board Members or to the Audit & Supervisory Board in accordance with themethod stipulated in legislations and the internal regulations of the Company, in the case

－

40 －

where there is considerable damage to the Company’s operations in areas for which they
are responsible or the possibility of significant impact on the Company. In addition, thesame shall apply in the event that Audit & Supervisory Board Members request a reportabout business operations.
2. In the event of a report by a Director or employee of the Company or its subsidiary to thereporting desk on a compliance-related problem, the department in charge of the reporting
desk shall in principle report the content of such report to the Audit & Supervisory Board
Members.
3. The division in charge of internal auditing of the Company shall report to the Audit &Supervisory Board Members important items heard from Directors and employees of theCompany and its subsidiaries, as well as important items from audit results.
4. The disadvantageous treatment of people reporting to the Audit & Supervisory Board
Members and the Audit & Supervisory Board (including people reporting indirectly
through others) because of such reporting shall be prohibited, and such prohibition shall bemade known throughout the Company and its subsidiaries.

－

41 －

(8) Particulars on Policies Related to the Handling of Expenses or Obligations Incurred
during the Execution of Duties by Audit & Supervisory Board Members
The Company shall provide budgetary provisions for expenses necessary for audits by
Audit & Supervisory Board Members. In addition, in the event of requests for the paymentof such expenses by Audit & Supervisory Board Members, prescribed procedures shall befollowed and payment made promptly.
(9) Other Systems to Ensure Effective Auditing by Audit & Supervisory Board Members
1. Audit & Supervisory Board Members and Representative Directors shall exchange theiropinions periodically and when deemed necessary.
2. Audit & Supervisory Board Members shall be provided with the opportunity to attend
Board of Directors Meetings and other significant meetings of the Company.
● Overview of Operational Status
Principal initiatives to secure the operation of systems to ensure appropriate business
operations are indicated below.
(1) Initiatives Related to Compliance
1. The Company and its subsidiaries share a corporate code of conduct (“The 10 Articles of
Our Code of Conduct”) aimed at ensuring sound corporate activities that comply with laws
and regulations and are in accordance with social mores. Awareness of this code of conduct
is instilled throughout the Group.
2. Based on regulations related to CSR, the CSR Committee—which is chaired by the
President and whose secretariat is the CSR Department—meets regularly. In addition todeliberating annual policies and plans related to overall compliance activities, thecommittee shares and evaluates the status of compliance within the Group and reports thathave been submitted to the internal reporting desk. The Company and its subsidiaries work
together to ensure consistent CSR training throughout the Group and address compliancerelated issues.
(2) Initiatives Related to Risk Management
1. The above-mentioned CSR Committee deliberates annual policies and plans related tooverall risk management. In addition, each fiscal year the committee specifies risk-related
initiatives to be undertaken by individual company departments and individual subsidiaries

－

42 －

in an effort to enact risk management activities with regard to measures to reduce theserisks.
2. Regarding work-related accidents, meetings of the Zero Accident Committee and Group
Safety Meetings are convened to decide on management priorities and share information
about legal updates, thereby endeavoring to ensure an appropriate response.
3. The Company formulates manuals and business continuity plans (BCPs) prescribing action
guidelines in the event of large-scale accidents, natural disasters or terrorism. In addition,
the Crisis Management Committee meets during normal times and times of crisis alike toprevent damage from spreading.

－

43 －

(3) Initiatives Related to Enhancing Management Soundness and Efficiency
1. The Company formulates medium-term management plans and annual budgets and strives
to appropriately allocate management resources and responsibilities among its various
departments. The status of significant business execution is reported to the Board of
Directors.
2. By clearly indicating the scope of responsibility of executives with ranks of Managing
Director or Senior Executive Officer or above, as well as the operational responsibilities
and authority of individual departments, the Company strives to ensure the appropriatenessof an accelerated decision-making and business execution.
3. For each subsidiary, the Company determines a response liaison division within the
Company. That division receives reports on significant investment projects andcompliance-related problems, and consults and exchanges information with the subsidiaryon such matters.
(4) Initiatives Related to Internal Audits
Based on an annual audit plan, the Internal Audit Department conducts periodic auditsof the compliance, risk management and management efficiency of internal divisions andsubsidiaries and reports the results of these audits to the Board of Directors.
(5) Initiatives Related to Audits by Audit & Supervisory Board Members
1. Audit & Supervisory Board Members attend meetings of the Board of Directors, Corporate
Strategy Committee and other important meetings, visit Company offices and exchange
opinions with Representative Directors.
2. Audit & Supervisory Board Members periodically receive reports of internal audit results
and reports submitted to the internal reporting desk.
3. Dedicated members are allocated to the Audit & Supervisory Board Member AssistanceDept. Audit & Supervisory Board Members’ opinions are taken into account with regard to
the assignment and evaluation of personnel assigned to this department, in the aim ofenhancing the effectiveness of audits by the Audit & Supervisory Board Members.

－

44 －

(Reference) Status of Corporate Governance<Fundamental Policy>
In accordance with its corporate code of conduct (“The 10 Articles of Our Code of
Conduct”), through fair business activities the Company seeks to ensure its sustainable
development and maximize its corporate value. For this purpose, the Group recognizes theimportance of efficient and transparent management and is steadily undertaking measuresthat fully realize its corporate governance. The figure below shows the corporate
governance structure regarding management decision-making and oversight, and businessexecution and audit in the Company.
Overview of the Corporate Governance System

General Meeting of Shareholders
Appointment/
Dismissal

Appointment/
Dismissal

Board of Directors
Management decision-making
and oversightAppointment/
Dismissal
Oversight

Appointment/
Dismissal

Audit & Supervisory Board
Operational and financial audits

Audit & Supervisory
Board Member
Assistance Dept.
DeMembers
AssistanceIndependent Accountants
Accounting audit
Department

Corporate Strategy
Committee
Deliberation on
important matters

CSR Committee
Deliberation on CSR activities

Representative Directors
and Executive Officers
Business execution

Internal Audit
Department
Internal audit

Headquarters and InHouse Companies

－

45 －

CSR Department

6. Fundamental Policy Concerning the Control of the Company(1) Fundamental Policy on Parties in Control of Decisions Concerning the Company’s
Finance and Operating Policies
As a general rule, the control of the Company should be determined through free market
transactions in the Company’s shares on the Stock Exchanges. As a matter of course, theCompany believes that the decision to accept or decline a proposal for a Large-Scale
Acquisition of shares (Defined in (3) 2. (i) below. The same applies below.) should be
ultimately left to the individual shareholders of the Company.
However, there are some Large-Scale Acquisitions of shares that do not contribute to thecorporate value and the common interests of the shareholders, and by extension the medium
and long-term shareholder value (hereinafter referred to as medium- and long-term
shareholder value) of the Company, such as those that obviously harm the medium- and longterm shareholder value, and those that essentially force shareholders to sell their shares, etc. In
addition, unless the party carrying out a Large-Scale Acquisition of the Company’s shares isproperly aware of the Company’s management environment, understands the sources of its
corporate value, and aims to ensure and improve these factors in the medium and long terms,
the Company’s medium and long term shareholder value may possibly be harmed.
Furthermore, while it can go without saying that the freedom of all shareholders’investment behavior should be respected to the degree that is possible, the Company believes
that there is not always adequate time or procedures to obtain and to study the informationnecessary for its shareholders to assess whether a fixed Large-Scale Acquisition is appropriate
in today’s domestic takeover bids, and that there is a possibility of that conflicting with theCompany's medium and long-term shareholder value.
Therefore, the Company believes that it is not appropriate for a party conducting a LargeScale Acquisition of shares that could possibly harm the Company’s medium and long-term
shareholder value as described above, to be one that dominates Company’s finance andoperating policies decisions. Therefore, the Company believes that it is necessary to maintaina framework to secure the necessary time and information for its shareholders to assess
whether the acquisition is appropriate, in order to deter acquisitions that conflict with theCompany's medium- and long-term shareholder value, and to negotiate with potential
Acquirers on behalf of the shareholders.
(2) Overview of Special Measures to Ensure the Implementation of the Fundamental
Policy－46 －The Company has been developing its various businesses by utilizing technologies
accumulated through its origin, metal and coal mining operations, to form an integrated
business entity involved in Cement, Metals, Advanced Materials & Tools, Electronic
Materials & Components and Aluminum businesses. The Company has a fundamental
corporate philosophy of contribution to society through its various business activities, and has
supplied basic materials indispensable to people’s lives as a comprehensive basic materials
manufacturer. Moreover, the Company has made consistent efforts to create an affluent
society toward helping reduce environmental impact and establishing a resource-recycling
social system. The Company will continue striving to underpin and enhance the medium- andlong-term shareholder value. In addition to advancing its business activities, the Company
will achieve this by earning the further trust of all stakeholders—including shareholders,
employees, customers, local communities, suppliers and many other related parties—while
maintaining a harmonious coexistence with society.
In this environment, the Group is striving “to become the world’s leading business group
committed to supporting recycling-oriented society through materials innovation, with use of
our unique and distinctive technologies” in our long-term management policy toward the
beginning of the 2020s. In the future, we will implement various measures using “Fortifying
the foundation for growth,” “Strengthening global competitiveness,” and “Pursuing a
recycling-based business model” as the three growth strategies for the overall Group in our
medium-term management plan (FY2015–2017) “Materials Premium 2016—Challenge to
become the world’s leading business group” in order to realize our objective of becoming “theworld’s leading business group.”(3) Overview of Efforts to Prevent Inappropriate Parties from Assuming Control ofDecisions Relating to the Company’s Financial and Operating Policies
The Company, in conformity with its corporate philosophy and various policies outlined in(2) above, shall continue pursuing maximization of the medium- and long-term shareholder
value in the future. At the same time, however, it may not be possible to ignore the potential of
Large-Scale Acquisitions by third parties that may harm the medium- and long-term
shareholder value, as described in (1) above. Therefore, at its meeting held on May 10, 2013,
the Board of Directors passed a resolution entitled “Renewal of the Countermeasures to LargeScale Acquisition of the Company’s Shares (Takeover Defense Measures),” (hereinafter called
the “New Countermeasures”), which is a modified version of a plan previously in place. The
New Countermeasures received approval at the 88th Ordinary General Meeting of

－

47 －

Shareholders held on June 27, 2013.
An outline of the New Countermeasures is given below. For more details, please refer tothe May 10, 2013 press release entitled “Renewal of the Countermeasures to Large-Scale
Acquisition of the Company’s Shares (Takeover Defense Measures)” posted on the
Company’s website (Japanese language only):
http://www.mmc.co.jp/corporate/ja/news/press/2013/13-0510.pdf
1. Fundamental Policy of the New Countermeasures
For the purpose of preserving and enhancing the medium- and long-term shareholder
value, the Company has set out Countermeasures to Large-Scale Acquisition of theCompany’s Shares (Takeover Defense Measures) incorporating procedures to be observed bya party carrying out or who plans to carry out a Large-Scale Acquisition of the Company’s
shares. The Company shall warn such parties in advance that there are procedures with which
they will be required to comply, that the Company may, in certain circumstances, takeprotective measures against the acquisition, and the Company shall, in certain circumstances,
actually take protective measures against the acquisition.
2. New Countermeasures Details(i) Targeted Large-Scale Acquisitions
The New Countermeasures shall apply in cases where there is an acquisition of sharecertificates, or the like of the Company that falls under a. or b. below or any similar action(hereinafter referred to as a “Large-Scale Acquisition”). Any party carrying out or proposing aLarge-Scale Acquisition (the “Acquirer”) must comply with procedures predetermined in the
New Countermeasures.
a. An acquisition that would result in the holding ratio of share certificates, etc., of a holder
amounting to 20% of more of the share certificates, etc., issued by the Company
b. A tender offer that would result in the ownership ratio of share certificates, etc., of theshare certificate relating to the tender offer, and the owning ratio of share certificates, etc.,
of a person having a special relationship totaling at least 20% of the share certificates, etc.,
issued by the Company.
(ii) Prior Submission of Letter of Intent to the Company
The Acquirer will submit a statement in Japanese (hereinafter referred to as a “Letter ofIntent”) to the Board of Directors such as a promise to observe the procedures prescribed in

－

48 －

the New Countermeasures, before executing the Large-Scale Acquisition.
(iii) Provision of Information
When the Acquirer submits the Letter of Intent, the Company will send to the Acquirer anInformation List that details all the information necessary to be initially submitted. The
Acquirer will submit to the Company adequate information pursuant to the Information List.
The Board of Directors shall require the Acquirer to submit the information within the
period set by the Board (the “Information Provision Requirement Period”), which is 60 days
following the sending of the above-mentioned Information List, and the Board of Directors’
Evaluation Period (Defined in (v) below. This also applies below.) shall commence
immediately upon the expiration of the Information Provision Requirement Period. However,
if a request for an extension based on a plausible reason is received from the Acquirer, theInformation Provision Requirement Period may be extended as needed up to a maximum of
30 days. Alternatively, if the Board of Directors determines that the information submitted by
the Acquirer is sufficient, then the Information Provision Requirement Period will be ended
forthwith and the Board of Directors’ Evaluation Period will commence, even if it is before
the expiration of the Information Provision Requirement Period.
(iv) Disclosure of Information
The Company will disclose the fact that there has been a proposal by an Acquirer toobtain Large-Scale Acquisition, and describe the background. Furthermore, if there isinformation deemed to be required by judgment of the shareholders, that information will be
disclosed at a time that is deemed to be appropriate.
Also, in the event that the Company Board of Directors judges that the information
provided by the Acquirer is adequate, the Acquirer will be notified (hereinafter referred to as“Notice of Completion of Providing Information”) of that quickly and that will be disclosed.
(v) Establishment of Board of Directors’ Evaluation Period
The Company Board of Directors will begin evaluating and considering the Large-Scale
Acquisition after Notice of Completion of Providing Information or when the Information
Provision Requirement Period has ended. The period for the Company Board of Directors toevaluate, consider, negotiate, form opinions or to offer an alternative proposal (hereinafterreferred to as “Board of Directors’ Evaluation Period”) will be a maximum of 60 days or a
maximum of 90 days depending on the status of the Large-Scale Acquisition.

－

49 －

However, the Board of Directors’ Evaluation Period may be extended by a maximum of
30 days when deemed necessary by the Board of Directors, or when recommended by an
Independent Committee.
(vi) Consulting with an Independent Committee
When countermeasures are invoked in the New Countermeasures, in order to eliminate
arbitrary decisions by the Company Board of Directors, an Independent Committee will be
setup composed of only people who are independent of executive personnel that conductbusiness operations for the Company.
In the event that the Acquirer has not observed the procedures defined in the New
Countermeasures, or when it is found that the Large-Scale Acquisition of shares by the
Acquirer will cause notable damage to the medium and long term shareholder value of theCompany, the Company Board of Directors can consult with the Independent Committee
about whether to invoke countermeasures when it is judged appropriate to invokecountermeasures.
(vii) Recommendation by Independent Committee Concerning the Invocation ofCountermeasures
When there has been consultation by the Company Board of Directors regarding whether
to invoke countermeasures, the Independent Committee will make recommendations for theCompany Board of Directors regarding whether to invoke countermeasures.
(viii) Resolution by the Board of Directors
The Company Board of Directors will comply to the degree possible with therecommendation of the Independent Committee outlined in (vii) above, and will implement a
resolution to invoke countermeasures.
(ix) Holding a Shareholders Meeting to Confirm Their Intent
Excluding instances when it is notably difficult to convene a general meeting ofshareholders, for the following reasons, the Company Board of Directors can debate bills forinvoking countermeasures by convening a general meeting of shareholders (hereinafter theshareholders’ meeting is referred to as the “Shareholders Meeting to Confirm Their Intent”).
a. When the Independent Committee makes a recommendation concerning the invocation of

－

50 －

countermeasures that is conditional upon receiving prior approval at a general meeting ofshareholders; andb. The Board of Directors deems that it is appropriate to confirm the intent of allshareholders.
The Board of Directors shall pass a resolution to invoke countermeasures in compliance withthe resolution passed at the Shareholders Meeting to Confirm Their Intent.
(x) Period to Start Large-Scale Acquisition
When it has been determined by the Company Board of Directors to convene theShareholders Meeting to Confirm Their Intent, the Acquirer may not start Large-Scale
Acquisition until the Company Board of Directors has implemented a resolution to invoke thecountermeasures based on the resolution of the Shareholders Meeting to Confirm Their Intent.
Also, when the Shareholders Meeting to Confirm Their Intent has not been convened, it ispossible to start the Large-Scale Acquisition only after the Board of Directors’ Evaluation
Period has passed.
(xi) Termination or Withdrawal of Countermeasures
In the event that invoking the countermeasures was decided, the Company Board of
Directors can consult with the Independent Committee regarding whether to terminate orwithdraw the countermeasures for the following reasons.
a. When the Acquirer has terminated or withdrawn the Large-Scale Acquisition; andb. Changes occurred in the facts that presumed judgment of whether to invoke thecountermeasures, and the circumstances are considered not to be appropriate formaintaining the invoked countermeasures in view of ensuring and enhancing theCompany's medium and long-term shareholder value.
The Company Board of Directors will resolve to terminate or withdraw thecountermeasures when it is judged inappropriate to maintain the countermeasures, complying
to the degree possible with the recommendation of the Independent Committee.
(xii) Specific Content of the Countermeasures in the New Countermeasures
As a countermeasure invoked in accordance with the New Countermeasures, the Company
shall, in principle, exercise the gratis allotment of stock acquisition rights.
Such stock acquisition rights shall be allotted to shareholders as of the allotment date. One
right will be allotted per common stock of the Company. Under the New Countermeasures, the

－

51 －

Company intends to attach conditions that the Acquirer or other ineligible parties that meet criteria
specified separately may not exercise the stock acquisition rights. Further, the Company plans to
attach conditions that enable the Company to acquire the stock acquisition rights allotted topersons other than ineligible parties and, in exchange, issue one common stock of the Company
per such stock acquisition right.

(xiii) Effective Period, Abolition, or Amendment of the New Countermeasures
The New Countermeasures shall be effective until the closing of the 91st Ordinary
General Meeting of Shareholders of the Company, to be held in June 2016.
Also, even before expiration of the effective period, the New Countermeasures will beabolished immediately, for the following reasons.
a. When a general meeting of shareholders of the Company passes a resolution to abolish the
New Countermeasures; andb. When the Board of Directors passes a resolution to abolish the New Countermeasures.
Also, the Company can change the New Countermeasures within a scope that does not violate thebasic policy for formalities in line with revisions to laws and ordinances and the like.
(4) Determination by the Board of Directors, and the Reasons thereof, that the Measuresin (2) above are in Accordance with the Basic Policy in (1) above and as such do notHarm the Common Interests of Shareholders or Aim to Maintain the Status of theCompany’s Officers
The Board of Directors has determined that the measures in (2) above are in accordancewith the basic policy in (1) above. Such reason is that, by securing and enhancing theCompany’s medium- and long-term shareholder value through the measures in (2) above, andappropriately reflecting it in the value of the Company’s shares, it will become difficult to
conduct a Large-Scale Acquisition that adversely affects the Company’s medium- and longterm shareholder value.
Accordingly, the Board of Directors has determined that the measures in (2) above do notharm the common interests of the Company’s shareholders and are not aimed to maintain thestatus of the Company’s officers.
(5) Determination by the Board of Directors, and the Reasons thereof, that the Measuresin (3) above are in Accordance with the Basic Policy in (1) above and as such do notHarm the Common Interests of Shareholders or Aim to Maintain the Status of the

－

52 －

Company’s Officers
The measures in (3) above prevent inappropriate parties, in the context of the basic policyin (1) above, from controlling decisions on policies relating to the Company’s finances andoperations. Such reason is that, by enabling the Company to invoke countermeasures against
an Acquirer who does not provide sufficient information or does not accede to a request for
securing a sufficient period for their examination etc., the Company may prevent a LargeScale Acquisition that will significantly harm the Company’s medium- and long-term
shareholder value. Additionally, the measures in (3) above are implemented with the objectiveof securing and enhancing the Company’s medium- and long-term shareholder value, and inline with such objective, to have the Acquirer provide the necessary information beforehand
concerning the Large-Scale Acquisition that said Acquirer intends to make so that therequired period of time is secured for evaluating and examining, etc., the details thereof.
Furthermore, a variety of systems and procedures are in place to ensure the reasonablenessand fairness of the measures in (3) above for the reason that these measures contain aprocedure for confirming the intent of all shareholders, establish an Independent Committee
comprising highly independent members, give utmost respect to the Committee’s
recommendation, establish reasonable and objective criteria for the invocation ofcountermeasures, and eliminate arbitrary judgments by the Board of Directors by basing the
invocation of countermeasures on a resolution passed at a Shareholders Meeting to Confirm
Their Intent.
Accordingly, the Board of Directors determines that the measures in (3) above are inaccordance with the basic policy in (1) above, and do not harm the common interests of theCompany’s shareholders and are not aimed at maintaining the status of the Company’s
officers.
The effective period of these New Countermeasures ends at the conclusion of the 91st
Ordinary General Meeting of Shareholders of the Company scheduled for June 29, 2016
(hereinafter, “This Ordinary General Meeting of Shareholders”). After considering the pros
and cons of its renewal, the Board of Directors judges there to be an ongoing need formeasures to ensure and enhance medium- and long-term shareholder value. On this basis, theCompany’s Board of Directors held on May 12, 2016, has resolved to renew the New
Countermeasures, with partial amendments, based on an agenda item for approval byshareholders at This Ordinary General Meeting of Shareholders.

－

53 －

In this Business Report, the figures for financial amounts and number of shares arerounded down to the nearest stated unit. Figures for ratios have been rounded up or down to
the nearest stated decimal place.

－

54 －

Consolidated Balance Sheets[As of March 31, 2016](Millions of yen)
Item

AmountItem

Amount[LIABILITIES][ASSETS]
Current Assets:

782,530

Current Liabilities:

696,319

Cash and deposits

60,123

Notes and accounts payable-trade110,596

Notes and accounts receivable-trade

233,093

Short-term loans payable

200,527

Merchandise and finished goods

85,082Current portion of bonds payable

25,100Work in process

83,694

Income taxes payable

7,037

Raw materials and supplies

89,875

Deferred tax liabilities

138

Deferred income taxes

10,352

Accrued bonuses

13,114

Gold bullion on loan

89,360Gold payable

231,667

Other

133,104

Allowance for loss on disposal of inventories

Allowance for doubtful accounts(2,155)Other

626
107,5111,010,845

Noncurrent Liabilities:

452,038

Property, Plant and Equipment:

670,237

Bonds payable

40,000

Building and structures, net

155,277

Long-term loans payable

260,681

Machinery and equipment, net

209,769

Reserve for directors’ retirement benefits

Land, net

268,634

Reserve for loss on subsidiaries and affiliates

1,760

Construction in progress

21,769Reserve for environmental measures

13,358Other, net

14,786

Deferred tax liabilities

15,265

Deferred tax liabilities for land revaluation

26,53266,019Net defined benefit liability

63,544

Goodwill

48,986

Other

Other

17,032

Noncurrent Assets:

Intangible Assets:

1,628

29,267
Total Liabilities

1,148,358[NET ASSETS]
Investments and Other Assets:
Investment securities

Shareholders’ Equity:

512,797274,588

Capital stock

119,457

212,606

Capital surplus

92,266

Retained earnings

303,026

Treasury stock(1,953)Retirement benefit assets

342

Deferred income taxes

34,324Other

33,385

Allowance for doubtful accounts(6,070)

Accumulated Other Comprehensive Income:
Valuation difference on securities

42,43021,645available for sale
Deferred gains or losses on hedges(199)

Revaluation reserve for land

34,282Foreign currency translation adjustment

3,647

Remeasurements of defined benefit plans(16,946)

Non-controlling interests
Total Net Assets
Total Assets

Total Liabilities and Net Assets

1,793,375

Note: All amounts less than one million yen are rounded down.

55

89,789645,017
1,793,375

Consolidated Statements of Operations[For the year ended March 31, 2016](Millions of yen)
Item

AmountNet Sales

1,417,895

Cost of Sales

1,204,322

Gross Profit

213,573

Selling, general and administrative expenses

143,152

Operating Profit

70,420Non-Operating Profit:

21,699Interest income

589

Dividends income

9,019

Equity in earnings of affiliates

2,188

Rent income on noncurrent assets

5,005

Other

4,895

Non-Operating Expenses:

19,677

Interest expenses

6,694

Expenses for rent in undertaking

3,174

Loss on disposal of property, plant and equipment

3,366

Expenses for settlement of remaining business in mine

2,865

Other

3,576

Ordinary Income

72,442Extraordinary Income:

45,942Gain on sales of marketable securities and investments in securities

19,188Gain on changes in equity

10,464Gain on sales of noncurrent assets

6,322

Gain on redemption of investment securities

1,234

Insurance proceeds

5,224

Other

3,508

Extraordinary Losses:

35,705

Loss on valuation of investment securities

2,539

Loss on impairment

3,610

Loss on business withdrawal

7,517

Loss on suspension of operations

2,628

Provision for environmental measures

10,841

Other

8,568

Income before Income Taxes

82,680

Corporate income taxes, resident taxes and business tax

17,905

Income taxes adjustments(2,760)Net Income

67,536Net Income attributable to non-controlling interests

6,219

Net Income attributable to owners of the parent

61,316

Note: All amounts less than one million yen are rounded down.

－

56 －

Statement of Changes in Consolidated Shareholders’ Equity[For the year ended March 31, 2016](Millions of yen)
Shareholders’ Equity
Capital stock

Capital surplus

Retained earnings

119,457

92,272

252,858

Balance as of April 1, 2015
Cumulative impact of changes inaccounting policies
Balance at beginning of period, reflectingchanges in accounting policies
Change during the year
Cash dividends from retained earnings
Net income attributable to owners of theparentDecrease from write-downs of land
revaluation excess
Increase from rise in number ofconsolidated subsidiaries
Acquisition of treasury stock
Disposition of treasury stock
Changes in equity of the parent company
related to transactions with noncontrolling interests
Net change in items other thanshareholders’ equity
Total change during the year
Balance as of March 31, 2016

Treasury stock

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(5)
92,266(5)

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

Accumulated Other Comprehensive Income

Balance as of April 1, 2015
Cumulative impact of changes inaccounting policies
Balance at beginning of period,
reflecting changes in accounting
policies

Valuationdifferenceonsecurities
available
for sale

Deferred
gains orlosses on
hedge

Revaluation
reserve forland

Foreigncurrencytranslation
adjustments

42,717(1,025)33,856

15,746

Remeasur
Total
ements ofotherdefinedcomprehenbenefitsiveplansincome(3,256)88,039NoncontrollingInterests

Total Net
Assets

78,751

629,514805

42,717(1,025)33,856

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

630,319

Change during the year
Cash dividends fromretained earnings
Net income attributable toowners of the parent
Decrease from write-downs ofland revaluation excess
Increase from rise in number ofconsolidated subsidiaries(13,101)
61,316843
304

Acquisition of treasury stock(89)

Disposition of treasury stock

1

Change in equity of the parent
company related to transactions
with non-controlling interests
Net change in items other thanshareholders’ equity(5)(21,071)826

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

11,038(34,570)

Total change during the year

(21,071)826

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

11,038

14,697

Balance as of March 31, 2016

21,645(199)

34,282

3,647(16,946)

42,43089,789645,017

Note: All amounts less than one million yen are rounded down.

57Balance Sheets[As of March 31, 2016](Millions of yen)
Item

AmountItem[ASSETS]
Current Assets:
Cash and deposits
Notes receivable
Accounts receivable
Merchandise and finished goods
Work in process
Raw materials and supplies
Advanced payment
Prepaid expenses
Short-term loans receivables
Other receivables
Gold bullion on loan
Gold bullion in custody
Deferred income taxes
Other
Allowance for doubtful accounts

391,663
7,826
3,262
80,24833,48635,28736,88020,005916
1,533
11,36289,36063,688
3,039
5,610
(846)

Noncurrent Assets:
Property, Plant and Equipment:
Buildings
Structures
Machinery and equipment
Vessels
Vehicles and delivery equipment
Tools, furniture and fixtures
Land
Lease assets
Construction in progress
TimberIntangible Assets:
Mining rights
SoftwareLease assets
Other

767,304
298,736
55,68329,16870,3590
1022,206
132,421
751
6,957
1,084
3,856
454
3,034
81
286

Investments and Other Assets:
Investment securities
Securities of affiliates

464,71290,584359,276

Bonds of affiliates

4

Investments

66

Investments in affiliates
Long-term loans receivable
Long-term loans to affiliates
Deferred income taxes
Other
Allowance for investment loss
Allowance for doubtful accounts
Total Assets

6,798
17
5,648
334
7,527
(365)
(5,182)
1,158,968[LIABILITIES]Current Liabilities:
Notes payable
Accounts payable
Short-term loans payable
Current portion of bonds payable
Lease obligation
Other payables
Accrued expenses
Income taxes payable
Advance received
Progress payment received
Unearned revenue
Accrued bonuses
Employee deposits
Facilities related notes payable
Other facilities related payables
Assets removal liabilities
Gold payable
Other
Noncurrent Liabilities:
Bonds payable
Long-term loans payable
Lease obligation
Deferred tax liabilities for revaluation
Provision for retirement benefits
Reserve for loss on subsidiaries and affiliates
Reserve for environmental measures
Assets removal liabilities
Guarantee deposits received
Other
Total Liabilities[NET ASSETS]
Shareholders’ Equity:
Capital stock
Capital surplus
Capital reserve
Other capital surplus
Retained earnings
Other retained earnings
Reserve for advanced depreciation of noncurrent assets
Deposit for mining search
Reserve for loss on specified business restructuring
investment
Earned surplus carried forward
Treasury stock
Valuation and Translation Adjustments:
Valuation difference on securities available for sale
Deferred gains or losses on hedges
Revaluation reserve for land
Total Net Assets
Total Liabilities and Net Assets

Note: All amounts less than one million yen are rounded down.

－

58 －

Amount450,309
1,463
31,896
87,87925,000437
6,035
26,285
1,941
3,727
6
79
5,224
9,149
1,342
13,36312
231,667
4,797
273,564
40,000177,426746
22,6979,207
1,252
13,358
444
4,441
3,988
723,873
387,097
119,457
113,001
85,65427,347
156,584
156,584
5,724
20
2,707
148,131(1,946)47,997
19,400295
28,301
435,094
1,158,968

Statements of Operations[For the year ended March 31, 2016](Millions of yen)

Item

AmountNet Sales

735,501

Cost of Sales

662,975

Gross Profit

72,525

Selling, general and administrative expenses

46,046

Operating Profit

26,478

Non-Operating Profit:

22,004

Interest income

362

Dividends income

14,139Rent income on noncurrent assets

4,714

Miscellaneous revenue

2,787

Non-Operating Expenses:

13,073

Interest expenses

3,185

Expenses for rent in undertaking

3,157

Expenses for settlement of remaining business in mine

2,636

Loss on disposal of property, plant and equipment

1,748

Miscellaneous losses

2,346

Ordinary Income

35,409Extraordinary Income:

22,767

Gain on sales of subsidiaries and affiliates' stocks

14,330Gain on sales of noncurrent assets

5,437

Gain on redemption of affiliates' stocks

3,000

Other

0

Extraordinary Losses:

25,216

Provision for environmental measures

10,841

Loss on business of subsidiaries and affiliates

7,548

Loss on valuation of stocks of subsidiaries and affiliates

3,435

Other

3,390

Income before Income Taxes

32,960

Corporate income taxes, resident taxes and business tax

6,190

Income taxes adjustments(6,231)Net Income

33,001

Note: All amounts less than one million yen are rounded down.

59

Statement of Changes in Shareholders’ Equity[For the year ended March 31, 2016](Millions of yen)
Shareholders’ Equity
Capital surplus

Retained earnings
Other retained earnings

Capitalstock

Balance as of April 1,
2015

119,457

Capitalreserve

Other
capitalsurplusTotal
capitalsurplusReserveforadvanceddepreciatio
n ofnoncurrent
assets85,65427,347113,001

Treasury
stock

Total
shareholders’equity(1,858)366,457

Deposit forminingsearchReservefor loss on
specifiedbusiness
restructuringinvestment

Earnedsurpluscarriedforward

4,659

163

2,640

128,392

135,856

1,324

20(1,345)

－

－

(259)

(163)

356

－

－

(13,101) (13,101)(13,101)

Total
retainedearnings

Change during the year
Provision of voluntary
retained earnings
Reversal of voluntary
retained earnings
Cash dividends fromretained earnings

67

Net income
Decrease from writedowns of land
revaluation excess
Acquisition of treasury
stock
Disposition of treasurystock
Net change in items
other thanshareholders’ equity
Total change during theyear
Balance as of March 31,
2016

(0)

(0)

33,00133,00133,001

828

828

828
(89)

(89)

1

1

－

－

(0)

(0)

1,064

(143)

67

19,73920,728(88)

20,639119,457

85,65427,347113,001

5,724

20

2,707

148,131

156,584(1,946)

387,097(Millions of yen)
Valuation and Translation Adjustments

Balance as of April 1, 2015

Valuationdifference on
securities available
for sale

Deferred gains orlosses on hedges

Revaluation
reserve for land

Total valuation andtranslation
adjustments

Total Net Assets

38,990(1,036)27,85465,807432,265

Change during the year
Provision of voluntary retained
earnings
Reversal of voluntary retained
earnings
Cash dividends fromretained earnings
Net income
Decrease from write-downs of land
revaluation excess
Acquisition of treasury stock－－(13,101)
33,001828(89)

Disposition of treasury stock
Net change in items other thanshareholders’ equity
Total change during the year

(19,589)

1,332

446

(17,810)(17,810)(19,589)

1,332

446

(17,810)2,829

Balance as of March 31, 2016

19,400295

28,301

47,997435,0941

Note: All amounts less than one million yen are rounded down.

－

60 －