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Integrated Report 2020

“Transformation for Sustainable Growth”

Core technologies

For the year ended March 31, 2020

1-11-1 Osaki, Shinagawa-ku, Tokyo

141-8584, Japan

Telephone 81-3-5437-8028

Facsimile 81-3-5437-8029

e-mail [email protected]

URL https://www.mitsui-kinzoku.com/en/

MITSUI MINING & SMELTING CO.,LTD.

CSR Office

THE INCLUSION OF Mitsui Mining & Smelting Co., Ltd. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS,TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A SPONSORSHIP,ENDORSEMENT OR PROMOTION OF Mitsui Mining & Smelting Co., Ltd. BY MSCI OR ANY OF ITS AFFILIATES.THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE MSCI INDEX NAMES ANDLOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITS AFFILIATES.

Integrated Report 2020MITSUI KINZOKU

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In 2019, Mitsui Kinzoku Group reorganized our CSR report and Annual

report and began publishing "Mitsui Kinzoku Integrated Report" to help

stakeholders understand the Group's long-term value creation.

This report describes how the Group will create economical and social

value through the management in our value creation process, focusing

on “the 19 Medium Plan” which began in FY 2019. We believe that

through this report, our stakeholders, including our shareholders and

investors, will be able to ascertain that Mitsui Kinzoku Group is working

to enhance its corporate value in a sustainable manner and striving

toward a sustainable society through our business management.

This report has been edited by referring to the International Integrated

Reporting Framework advocated by the International Integrated

Reporting Council (IIRC), the “Guidance for Integrated Corporate

Disclosure and Company-Investor Dialogues for Collaborative Value

Creation” developed by the Ministry of Economy, Trade and Industry,

and the GRI Sustainability Reporting Standards (GRI Standards).

Details on our financial information can be found in our Securities Report.

Details on our governance information are provided in our Corporate

Governance Report.

［Coverage］

This report focuses on figures for fiscal 2019 (April 2019 – March 2020).

It also contains details of initiatives prior to that period, and initiatives

that are underway for fiscal 2020.

［Scope］

This report covers Mitsui Kinzoku (non-consolidated), as well as

consolidated domestic/overseas subsidiaries. If a non-consolidated

group company is included, details on its scope of application are listed

in the explanatory note for each item.

[Caution concerning forward-looking statements ]

In addition to facts about Mitsui Kinzoku Group past and present, this

report contains decisions, plans and other forward-looking statements

based on information available at the time of writing. Please bear in

mind that social situations in the future, and the actual results of our

business activities, may vary from the forward-looking statements

contained herein.

About Mitsui Kinzoku Integrated Report 2020

https://www.mitsui-kinzoku.com/toushi/lib/yuuka/

https://www.mitsui-kinzoku.com/LinkClick.aspx?fileticket=7agplJM1DcA%3d&tabid=129&mid=1060

[Securities Report] only available in Japanese

[Corporate Governance Report] only available in Japanese

https://www.un.org/sustainabledevelopment/

The SDG icons in this report are used in accordance with the UN SDG guidelines.

11

President and Representative Director

Pursuing Integrated Thinking-based Management

— Fulfilling our social responsibility and cultivating our

business to help solve environmental and social issues

in solidarity with our stakeholders.

［Engineered Materials Sector］

NISHIDA Keiji

As a nonferrous metal manufacturer, we have

cultivated our technologies and know-how and

developed our value chain in our history.

“Material Intelligence” — this is the source of

our value creation.

［Metals Sector］

［Automotive Parts & Components ＝Mitsui Kinzoku ACT Corporation ］

［Business Creation Sector］

Philosophy of Mitsui Kinzoku Group

Throughout our history, which is approaching 150 years since our company was first founded, Mitsui

Kinzoku has experienced many changes and faced many difficulties. The reason why we were able

to overcome these obstacles and continue to this day is because we continuously supplied products

that are helpful to the world by utilizing our “intelligence” that we have fostered over years as a

manufacturer. The central pillar of the business is our corporate philosophy.

04 MITSUI KINZOKU Integrated Report 2019 MITSUI KINZOKU Integrated Report 2019 05

The Management Philosophy was developed and documented in 1984, more than 35 years ago.

It declares that the goal of the Group’s business is contribution to society and sustainable growth.

Grateful to our predecessors for having had the perspective of sustainability, we will pass on the values

they sought to uphold.

Mitsui Kinzoku Group’s mission included in its Management Philosophy

We are a manufacturing company mainly dealing with non-ferrous metal materials and always thinking

about what our strengths are, how we can utilize them effectively, and what value we can create.

With thinking them thoroughly, we pursue our originality and value.

Mitsui Kinzoku in a nutshell

【Corporate Slogan】

Taking full advantage of Material Intelligence

The Code of Conduct defines basic requirements that all executives and employees must comply with

in their daily business activities to make them aware of their social responsibilities so that we can grow

together with our stakeholders.

Specific commitment to implementing the Management Philosophy

[Revision 3rd edition as of July 2016]

Code of ConductThis Code of Conduct applies to all the directors, officers and employees of Mitsui Mining & Smelting Co., Ltd. (Mitsui Kinzoku)

and its Group companies.

9. Demonstration of Leadership by Senior Management

Top management shall recognize that it is their responsibility to realize the spirit of this code, and act on their own

responsibility while demonstrating leadership.

1. Our Social Mission

We shall contribute to society by providing valuable products.

2. Self-Awareness and Social Responsibility as a Member of our Corporate Group

We shall always be mindful of our role as a member of the Mitsui Kinzoku Group and act with dignity and

responsibility, while positively conducting social action programs by facilitating communication with all stakeholders.

3. Compliance

We shall comply with domestic and international laws and regulations as well as our company’s regulations, and

shall act in accordance with the conscience of our society.

4. Fair Business Activities

We shall conduct appropriate business activities based on free and fair competition.

We shall also maintain healthy and transparent relationships with political parties and factions, the government, and

business partners, while making sure not to get involved in corruption.

5. Rejection of Antisocial Forces

We shall resolutely confront antisocial forces and organizations and thoroughly prohibit all relationships with

them.

6. Proactive Information Disclosure and Comprehensive Information Management

We shall proactively and fairly disclose corporate information and comprehensively protect and manage confidential

information, including personal and customer information.

7. Contribution to the Natural Environment

We shall address environmental issues to help realize a sustainable society.

8. Provision of Comfortable Work Environment

We shall provide a safe and comfortable work environment that respects the human rights, personalities, and

uniqueness of our employees, while providing a place where a diverse range of human resources can play an active

role.

“With creativity and productivity,

We, Mitsui Kinzoku Group, will explore products of value to society,

and seek an eternal growth of our group.”

Management Philosophy

We have to enhance our own sustainability in order to fulfill our social responsibility. We advance our

business to respond to the expectations of our stakeholders, while keeping our corporate philosophy

at the center of our business activities to further strengthen our business base. We will contribute to

the realization of a sustainable society through new value creation by enhancing our recognition of

environmental and social issues, and driving our unique innovations.


1874

1913

1943

1968

1951

1953 1966

1949 1958 1972 1990

1989

2006

1963

1977 1985

1989

2000 2005 2013

1959 1962 1968 1976 1980 1991 1999

2016

1970

2010

1943

1981

2012

1962

1962

2000

1995

2010

1976

1987

1986

Sputtering targets

Catalysts

Battery materials

Zinc and Lead

Die casting

Automotive parts

Rolled copper and brass

Rare metals

Copper

Copper foils

Measuring instruments

Mining and Resource development

20182006

1993

2018

1989 2014

1995

2020

Our origin is to develop the resources that are blessings from the earth and perform smelting of nonferrous metal.

We have continued to provide materials and products that are essential to many industries by giving added value to

nonferrous materials through processing and assembly. We will strive to create new value utilizing our core technologies

cultivated by our nonferrous metal smelting business, such as in separation and purification, powder control,

electrochemistry, and solution chemistry.

Our History

Areas that our current core business domains

＊ Lists only major events and initiatives.

Metals business

Others

68.6％

Zinc/Lead/Refined copper/Sulfuric acid 31.4％Sales breakdown

in FY1960

¥29.5 billion＊Non-consolidated sales

Basic materials

52.8％

Zinc/Lead/

Refined copper/

Sulfuric acid/Alloys

Intermediate materials

32.9％

Copper foil/Battery materials/

PVD materials/TAB/Rolled copper/

Rare metals etc.

Assembly processing

14.3％

Automotive components/Die casting/

Catalysts etc.

＊Excludes sales of gold bullion from the

financial statement values of that time.

＊Business segments are shown in the

segments at that time.

Sales breakdown

in FY1990

¥269.6 billion

Mining and basic materials

30.3％

34.8％

19.1％

OthersEngineering/

Other services 15.9％

＊Business segments are shown in

the segments at that time.

Intermediate materialsCopper foil/Battery materials/PVD materials/

TAB/Rolled copper/Rare metals etc.

Zinc/Lead/Refined copper/

Sulfuric acid/Alloys/Ores etc.

Assembly processing

Automotive components/

Die casting/Catalysts etc.Sales breakdown

in FY2000

¥423.7 billion

Acquired Jabaradaira pit at the Kamioka mine

Launched Omuta zinc smelting

plant

Acquired Hibi smelting plant and

Takehara refinery plant

Started full operation at

the Huanzala mine, Peru

Acquired Ohji plant from Special Alloy Co., Ltd.

and established Ohji Metals Co., Ltd.

Established Showa Die-Cast Co., Ltd.

Started technological partnership with

Wilmot Breeden of the U.K. for automotive

door latch production in 1965

Started production of electrolytic

manganese dioxide(EMD) at


Started production of Cadmium

oxide for nickel-cadmium battery

at Hikoshima smelting plant

Started production of battery-use

zinc powder at Kamioka mining plant

Started production of Cerium oxide

abrasive for glass substrate

Started development of transparent

conductive thin films at the Central

Research Laboratory

Started to develop copper foil technology at


Started production of

copper foil at Ageo

Established Oak-Mitsui Inc.

in New York, USA

Started to develop exhaust

gas detoxifying catalysts

technology at the Central

Research Laboratory

Completed Zinc

electrolytic plant

at Kamioka

Established Die-casting division

Established rolled copper division

Sold Catalysts to

Japanese automobile

manufactures

Started production of hydrogen storage

alloy at Takehara refinery plant

Developed non-destructive inspection equipment to measure

the sugar content of fruits and vegetables by applying

technology used for underground resource exploration satellites

Started full-scale operation

at the Pallca mine in Peru

Started mass production of PVD material at Miike rare metal plant

Developed

high density ITO

Established Mitsui Electronic

materials Co., Ltd. in Tai chung,

Taiwan

Established the bonding

factory in Pheongtaek,

South Korea

Established the mass production process of

IGZO, a next generation oxide

semiconductor material

Established Taiwan Copper Foil Co., Ltd. in Nantou, Taiwan

Established Mitsui Copper Foil (Malaysia) SDN.BHD in Selangor, Malaysia

Developed Micro ThinTM

copper foil with carrier film

Developed solid electrolyte for next-

generation lithium-ion batteries

Integrated automotive parts division and Ohi

Seisakusho Co., Ltd., and established Mitsui

Kinzoku ACT Corporation

Started operation at

Kamioka catalyst plant

Established Mitsui Kinzoku Instrumentations

Technology Corporation

Established Pan Pacific Copper Co., Ltd.

jointly with Nippon Mining & Metals Co., Ltd.

Started full operation of recycle-

smelting of lead from waste

batteries at Kamioka

Integrated rolled copper business with that of Sumitomo

Metal Mining and established Mitsui Sumitomo Metal

Mining Brass & Copper Co., Ltd.

Established

GECOM Corp.

in Indiana, USA

Established Ageo plant 2

Expanded the catalyst production

capacity for automobiles at the

five overseas sites

Established catalyst

manufacturing plant in

Zhuhai, China

Started operation at new Zinc

electrolytic plant in Kamioka

Increased production capacity

of Micro ThinTM to 3.9 million m2

per month

Established

automotive parts

division

Established Mitsui Kinzoku Die-Casting

Technology Co., Ltd.

Established MITSUI SIAM

COMPONENTS CO., LTD. in Thailand

Established Hibi Smelting Co., Ltd.


My commitment

Fulfilling our social responsibility and

cultivating our business to help solve

environmental and social issues in

solidarity with our stakeholders

Sustainability is not just a trend or fad but is the strategy for survival.

By transforming ourselves through integrated thinking-based

management, Mitsui Kinzoku Group will be resilient against not just

the coronavirus crisis but also any possible future crises.

Pursuing Integrated


NISHIDA Keiji ＜Profile＞

1980 Joined Mitsui Kinzoku

2008 Head of Finance Department

2011 Director and Chief Financial Officer

2014 Representative Director and Senior Managing Director

2016 President and Representative Director

Thinking-based Management

I would first like to offer my sincere condolences

for people who passed away from COVID-19, as

well as my heartfelt sympathy to everyone

affected by the infection. I would also like to

express my gratitude and respect to the medical

staff and many other individuals who are

combating the spread of the infection.

The global economy in FY2019 had been

recovering moderately overall despite the

concerns about the adverse impact of U.S.–

China trade friction and the decelerating Chinese

economy until the outbreak of the pandemic in

2020, which put a brake on economic activities

and plunged the economy into rapid decline. The

future has become increasingly uncertain, and

the world is confronted with unprecedented

economic and social crises – coronavirus crisis.

Mitsui Kinzoku Group has also been affected

by the pandemic as the state of emergency was

declared in Japan and other countries in which

we operate. The impact on our business

activities was significant particularly in China,

Peru, Malaysia, India, the United States, and

Mexico due to shut-down of manufacturing sites.

We have taken emergency measures promptly

at our sites and in our supply chain to address

the crisis. We put the lives, health, and safety of

our employees and their families first and strive

for continuing our operations. I would like to

express my deep appreciation to our

stakeholders, such as customers, suppliers and

our employees, for understanding our

emergency measures and supporting us in

minimizing the impact on our business.

In the 2019 medium-term management plan (the

19 Medium Plan), Mitsui Kinzoku Group

envisages – by 2024, the year of the 150th

anniversary of its founding – to “be a corporate

group that continually creates and develops

growth products and businesses in our three

core business domains (Engineered Materials,

Metals, and Automotive Components).”

To realize this vision for 2024, we have declared

our commitment to “Transformation for

Sustainable Growth,” which represents pursuing

business management integrated with

sustainability or, in other words, integrated

thinking-based management.

For us, sustainability means sustainability not

just of Mitsui Kinzoku Group but also of society

and the earth. We, therefore, need to meet the

triple bottom line of economic, environmental,

and social sustainability.

In addition to the declaration, we also

published the Integrated Report 2019 and

presented an overall picture of how we can

realize the vision in our value creation process.

By a backcasting approach for the vision, we

clarified the basic direction of the transformation

for sustainable growth through integrated

thinking-based management, as well as the

specific management strategy.

Our goal is clear; we will transform ourselves

into a company that continuously enhances its

value. We will achieve this goal with the strategy

built on the two pillars of business and social

responsibility: offering products and services

from our three core business domains, that will

contribute to solving environmental and social

issues, and endeavoring to minimize negative

impact (risks) of our business activities, which

could arise anywhere in our value chain in the

long term. While outputs from business profits

(economic value) and from fulfilling social

responsibility will generate new corporate value

and help us realize our vision, they will also

generate social value in external environments.

Our social value should contribute to the United

Nations Sustainable Development Goals (SDGs),

particularly SDG 8 “Decent work and economic

growth,” SDG 9 “Industry, innovation and

infrastructure,” SDG 12 “Responsible

consumption and production,” and SDG 13

“Climate action.”

Based on this management strategy, in

FY2019, we implemented measures to develop

and expand sales of MicroThin™ and other 5G-

related products and catalysts for automobile

My commitment


Business management integrated with sustainability

exhaust gases; recycle nonferrous metals; and

adopt ICT for automotive components production

and site management. When it comes to

measures to fulfill social responsibility, we

addressed material environmental, social and

governance risks with high financial impact.

While we were making these efforts, however,

we had to revise down the FY2019 results and

FY2020 targets set out in the 19 Medium Plan

due to the below-plan sales of our main products

and the impact of the pandemic. It is uncertain

when the pandemic will end, and we are facing

extreme difficulty in maneuvering the corporate

group get through this crisis.

Some say that the unexpected pandemic is

causing the greatest ever post-war global

recession. There is also an opinion that the

‘SDGs boom’ is over and company management

is to focus on addressing the crisis with short-

term measures.

However, as President, I believe that, to

overcome this crisis, it is more critical in business

management to take long-term measures based

on the essence of the company and issues of

every level around the world. Therefore, the big-

picture perspective is indispensable for us in

order to reaffirm our Group’s identity which

remains unchanged regardless of the external

environment as well as underlying global issues.

Our business model positioned at the center of

our value creation process involves creating

products and services based on the six capitals.

This business model is sustained by our two

main strengths: Core technologies, such as

those for separation and purification, powder

control, and composite materials, and the

diverse skilled employees who utilize those

technologies. With these strengths, the business

domains operate in their respective positions in

value chains. When taking an overview of these

Redefining our identity

positions, it can be said that they draw a closed

value chain loop where resources are circulated

from the arterial industry to the venous industry

and back to the arterial industry within the one

corporate group. This means we have a core

competence in material cycling and the potential

to help realize a circular economy which is the

world’s ambitious challenge. We must fully

leverage this core competence to create growth

products and businesses that will help solve

environmental and social issues. This represents

the crux of our business model and what our

slogan “Material Intelligence” means. This is

Mitsui Kinzoku Group’s identity.

While the pandemic hit the world hard, 2019 and

2020 also saw many disasters likely caused by

progressing climate change. We may be facing a

crisis in which climate change is intertwined with

other issues in a complicated way. I feel the

sense of crisis behind the SDGs; if humans

continue economic activities in the same way, it

will bring the earth to the brink of destruction. In

the coronavirus crisis, if companies only focus on

the pandemic issue of SDG 3 and think about

the trade-offs on the axis of confrontation

between health and the economy, they may

misjudge the intertwined underlying issues and

fail to take correct actions. The SDGs raise

underlying global issues inclusively and they are

linked with each other. We need to examine and

address the SDGs in an inclusive and integrated

manner.

The SDGs also require all stakeholders to

participate and cooperate with each other. As the

world faces the pandemic, the word “solidarity” is

attracting attention. Solidarity means uniting

efforts among different levels of society, rather

than conflict with each other, in order to

overcome the crisis together. Based on this spirit

of solidarity, ambitious initiatives such as

“Recover Better” and “Green Recovery” have

also been launched.

Big-picture perspective Global issues and solidarity

(July 2020)


My commitment

What we can do NOW

Mitsui Kinzoku Group will advance its

transformation and take long-term measures

through integrated thinking-based management

to achieve our vision. We will examine and

address global issues under the SDGs through

leveraging our identity and reinforcing solidarity

with our stakeholders by promoting market co-

creation and engagement with them. By

considering changes of the external environment

due to the coronavirus crisis, we have revised

the measures taken under the management

strategy and come up with the following four

measures that we will be implementing NOW.

Firstly, we have revised risk management and

the material issues (materiality) related to

sustainability. We started working on the

improvement of our risk management this April

and have identified, from an integrated

perspective, long- and short-term business risks

and business risks in an emergency with

potentially high financial impact. We also have

rebuilt our risk management system that includes

actions against the identified risks, risk

assessment and results review. We will continue

to revise the risk management system in FY2020

as well.

We also have reviewed material issues related

to sustainability in accordance with our

management strategy of business and social

responsibility. More specifically, from among the

long-term environmental and social issues raised

by the SDGs and other initiatives, we have

selected those for which expectations are high

among our stakeholders for us and which pose a

high financial risk to us. They were defined as

materiality that may provide us with long-term

business opportunities and cause long-term

business risks. With these revisions, we have

clarified the basic direction of our sustainability

initiatives and identified financial risks and

opportunities.

Secondly, as part of our specific efforts for

SDG 13 “Climate action,” to which we aim to

contribute, we take part in the “Challenge Zero”

initiative by Keidanren (Japan Business

Federation) and are currently tackling four

innovation challenges. All these challenges take

advantage of our core competence, i.e. our

identity. Their objectives are to deliver

innovations to achieve the production of CO gas,

a useful starting material, from CO2 gas;

development of an all-solid-state battery for

renewable energy storage; better demand

response; and use of alternative fuels to coke in

the imperial smelting process. While

endeavoring to mitigate climate change, we will

beef up our efforts toward a circular economy,

which will lead to achieving SDG 12

“Responsible consumption and production.”

The third measure concerns SDG 8 “Decent

work and economic growth” and SDG 9 “Industry,

innovation and infrastructure.” Because of the

pandemic, the traditional business model in cities

where profits are generated from mass

consumption by people who physically meet is

becoming ineffective. As structural and demand

changes occur in cities and urban innovation

advances, some experts forecast that 5G will be

the future infrastructure of massive innovations in

cities. The 5G-related market is therefore

expected to expand further, and we will re-

examine our plans to make them more

responsive to demand mainly in the copper foil

and engineered powders businesses. We are

working to create new businesses with growth

opportunities and get them into the market.

We also expect that the current movement

toward the future mobility society will continue. In

the automotive components business, we make

sure to respond to the new domains of CASE

(connected, autonomous/automated, shared,

and electric). As urban innovations advance,

base materials, which make up the structural

framework, will remain essential. In the metals

business, we will add copper smelting to the

existing lead, zinc, and precious metals smelting

and refining network to increase synergies and

intensify recycling smelting.

Fourthly, we have placed the R&D and market

co-creation functions, which were formerly a

part of the Engineered Materials Sector, under

corporate control by establishing the Business

Creation Sector in April this year. Our core

competence supported by the two strengths of

core technologies and employees and market

co-creation with stakeholders is the source of

above-mentioned innovations. Our purpose

behind this transfer is to concentrate the two

strengths for business creation and to strengthen

collaboration with stakeholders. By solidifying the

foundation for business creation, we will

establish overwhelming core competence and

deepen our solidarity with stakeholders to create

innovations to address environmental and social

issues.

The coronavirus crisis has been bringing a

significant change to our value chain and may

have a great impact on our business. At the

More resilient and sustainable in a crisis

same time, as the crisis is also changing

traditional mindsets across all levels of society

around the world, we have been more pressed

to put “Transforming Our World,” the core

principle of the SDGs, into action than ever

before. Now is the time the world should

implement drastic reforms to solve issues and

achieve the SDGs by 2030.

Mitsui Kinzoku Group believes that, by

transforming ourselves through integrated

thinking-based management with a long-term

perspective based on global issues, we can

make the Group resilient against not just COVID-

19 pandemic but also any possible future crises.

Sustainability is not just a trend or fad but is the

strategy for survival. Whatever crisis may occur,

we will act together with our stakeholders without

pandering to short-termism. We desire to be a

more sustainable corporate group that cares for

all workers in our value chains, the earth, and

future generations of people and all living things.

MITSUI KINZOKU Integrated Report 2020 15

Intellectual capital

Manufactured capital

Human capital

Financial capital

Natural capital

Input

Social and

Relationship

capital

OutputOutcome

Coretechnologies

14 MITSUI KINZOKU Integrated Report 2020

As a nonferrous metal manufacturer, we have cultivated our technologies and know-how and developed our value chain in our history.

“Material Intelligence” — this is the source of our value creation. We establish overwhelming core competence to create growth

products and business to help solve environmental and social issues. Under the commitment of “Transformation for Sustainable

Growth”, we realize long-term value creation by the integrated management strategy of business and social responsibility.

Our value creation process

Economic,

social and

environmental

issues

＜Major stakeholders＞

・ Shareholders/Investors

・ Customers

・ Suppliers

・ Employees

・ Local communities

・ International organizations/

Government agencies

New social issues

ESG demands from stakeholders (risks and opportunities)

Allocation and strengthening

our management capital based

on materiality

12,197

Engagement with our

employees, suppliers

and local communities

Amount of primary raw materials

Amount of freshwater use

Total energy consumption

（FY2019, Crude oil equivalent）

Consolidated employees

(March 31, 2020)

1,235 thousand tons

44,446 thousand m3

630,634 thousand L

Main sites in Japan

Main overseas sites

Consolidated net assets

¥ 173.2 billion(March 31, 2020)

Number of patents registered

3,828

R&D expenses

¥ 34 billion（Total for FY2019-2021）

External environment Business environment

Business model

Product End Life

Input of

raw materials (increase ratio of

recycled materials)

Materiality review

Formulation of medium-term management plan(Strategy review, resources allocation, setting KPI)

Contributing to

our customers’

processes

Adding value to materials

through our processes

Consumers

・ Separationand purification

・ Powder control

・ Electrochemistry

・ Calcination

・ Solutionchemistry

・ Composite ofmaterials

Continually create and develop growth products and businesses to

help solve environmental and social issues

Mission

・ Engineeredmaterials

・ Metals

・ Automotive parts& components

Business domain

Initiatives to

enhance our

sustainability

Governance(The foundation of our value creation)

・ Market co-creation

・ Develop relationships

with our employees,

suppliers and local

communities

・ Reduction of

GHG emissions

Businessfrom economic,

environmental and

social aspect

Environmental

Social

・ Reduction of

hazardous materials

・ Energy efficiency

・ Response to CASE

・ Material cycling

Responsibility ・ IoT development

・ Circular economy

・ Safe mobility

・ Solving environmental and social issues

Contribution to

Materiality of

risks and

opportunities

Newly created corporate value

Perform

Review

12

27

Sustainability


Stakeholders and materiality

Identification of major stakeholdersMitsui Kinzoku Group has identified major stakeholders in accordance with the eight criteria of ISO 26000. The major stakeholders

are determined as highly likely to be affected by our business activities economically, environmentally, and socially. The earth

environment is considered as being one of our major stakeholders. The SDGs indicate the common social and environmental issues

which these multiple stakeholders are facing.

Mitsui Kinzoku Value Chain

Our major stakeholders

Identification, assessment and review of materialityAmong environmental and social issues raised by the major stakeholders, we identify material issues i.e. materiality. The materiality

can pose ESG risks that affect us financially or can turn out to be our business opportunities that may profit us by offering solutions for

the issues through our business or in our value chains. By responding to risks and opportunities presented by the materiality, we will

implement the integrated management strategy built on the two pillars of business and social responsibility.

＊1 SASB Standards The SASB Standards have been developed by

SASB (Sustainability Accounting Standards Board) for respective industrial

sectors. We utilized the standards for the Metals & Mining category in the

Extractives & Minerals Processing Sector in order to incorporate risks that

are unique to mining.＊2 Amundi ESG general standard

＜Reference＞ Amundi Japan (2018) "Introduction to ESG investment that

will change society", Nikkei Publishing Inc.

Identification FY2016

Assessment FY2017

[1] Selected issues based on the seven core subjects of ISO

26000 and in reference to the GRI guidelines (G4), the SDGs

and questionnaires of CSR assessment organizations

[2] Narrowed down candidate issues from the selected issues

according to the expectations and requests of the major

stakeholders and our CSR progress

[3] Mapped the candidate issues by critical level for

stakeholders and that for Mitsui Kinzoku Group

[4] Identified the 28 materiality which were approved by the

Board of Directors

[1] Assessed the 28 materiality, whether it is risk or opportunity,

from the ESG perspective of the GRI standards in order to

integrate business contribution to solving environmental and

social issues into the management strategy

[2] Linked the materiality to the SDGs

Assessment FY2018

[1] Conducted the materiality assessment in connection to

the 19 Medium Plan to which the integrated thinking-based

management was introduced

[2] Assessed again whether the 28 materiality will have

impacts on our long-term value creation by utilizing the SASB＊1 standard and the ESG general standards＊2 offered by

Amundi

[3] Extracted ESG-risks from them which potentially have

impacts on our business model and finances, and grouped

them as “materiality in the areas of responsibility that relate to

the social & relationship and the natural capitals”

Raw Materials

（Incl. own mines）Supplier

Process

Our Operations Customer

Processes

Use/Consume Product End Life

Stakeholder mapping along the value chain

International organizations Shareholders/Investors ESG assessment bodies Global environment

Initiatives NGO/NPO

Employees

Local communities

Government agencies

Employees

Labor unions

Local communities

Government agencies

Industry groups

Suppliers Customers Consumers Recycling agents

Review FY2019－FY2020

We have reviewed the materiality based on the integrated

management strategy built on the two pillars of business

and social responsibility.

１ Enumerated a wide range of economic, environmental, and

social issues from a long-term perspective

２ Selected issues that are likely to have a long-term impact on

our business and value chains

３ Determined the level of materiality for each issue selected in 2

above according to the degree of the major stakeholders’

expectations and needs regarding our business and their impacts

４ Determined the level of materiality for each issue selected in 2

above at the CSR Committee according to the degree of impact on

our business model and finances

５ Mapped the issues on the two axes of 3 and 4 above (see the

right graph) and identified the ones in the shaded area as material

issues

Ref. The SDGs, the United Nations Global Compact, the GRI Standards and ISO

26000 as issues raised by international organization like the UN and NPOs

Ref. The Management Philosophy, the Code of Conduct, the 19 Medium Plan

Ref.

＜International organizations＞ OECD Due Diligence Guidance for Responsible

Business Conduct

＜Investors＞ The SASB standards, the ESG general standards by Amundi

＜Industrial initiatives＞ The RBA Code of Conduct （Customer/Supplier）,

ICMM 10 Principles, the Charter of Corporate Behavior by Keidanren

Ref. The 19 Medium Plan, the Code of Conduct, the Environmental Action

Plan, the Human Rights Standards, the procurement policy

６ Divided the material issues, based on the integrated

management strategy of business and social responsibility, into

ones that may pose ESG risks (social responsibility) that are likely

to affect us financially and into ones that can turn out to be

business opportunities

７ Classified the issues mapped in the lighter-colored parts in the

graph into a set of issues that supports the progress on the

material issues

８ Received approval from the Board of Directors for the materiality

of ESG risks and business opportunities

Ref. The International Integrated Reporting Framework, the SASB standards

［ B The impact on our business model and finances］

［ＡT

he m

ajo

r sta

kehold

ers

’ expecta

tions a

nd n

eeds］

Materiality

Mitsui Kinzoku Group will work on the materiality and monitor the progress in order to minimize risks and maximize opportunities.

The CSR committee takes the initiative in running the PDCA (plan-do-check-act) cycle of fiscal year. In FY2020, each

department in charge will re-examine material issues to review commitments, key performance indicators (KPI), and plans.

01 Market co-creation

02 Material cycling

03 Response to CASE

04 GHG emissions

05 Energy management

06 Water management ●●

07 Waste and hazardous materials ●●

08 Impacts on biodiversity ●●

09 Health and safety

10 Human rights ●

11 Fair business practices ●

12 Governance ●

Diversity

Health management

Human resources development

Intellectual property

Quality management

Community engagementSocial andrelationship capital

Human capital

Intellectual capital

CSV

Environment

Social

Governance

(Incl. Compliance & Information management）

Opportunities

Risks

Capitals for value creation

Initiatives supporting the progress of the materiality

Materiality

[Category] [Area] [Issues]

Scope of application: All sites, including those for the mining business as well as supply chains. Local communities in mining areas are included for issues marked with ●, suspended and closed mines are included for issues marked with ●.

*

CSV standards：Environmental and social standards of products

See pages 52 to 57 for the report on the progress of the previous 28 materiality.

For Mitsui Kinzoku Group, the integration of sustainability into its business management is what really matters in order to achieve

its vision and continue creating value over the long term. In order to implement the integrated thinking-based management

efficiently, we have identified major stakeholders as well as material issues (materiality) that can have critical influence on the

stakeholders and our business.


24.2 -38.3

-14.1

36.1 -34.8

1.3

52.4 -40.4

12.0

40.7 -44.8

-4.1

10.9％

-0.4％

2.8％

0.9％

2.5％ 2.5％ 2.5％DOE

70 70 70 70

518.7 523.3 537.1

168.2 170.1 164.7

32.4％ 32.5％

30.7％

545.0

166.1

30.5％

40.0 -24.0

16.0

3.6％

2.5％

Director and Senior Executive Officer,

Senior General Manager of Corporate Planning & Control Sector

OSHIMA Takashi

Financial Strategy

Place importance on investment efficiency,

coordinating with the business strategies

to improve our corporate value

Total assets

Net assets

(Billion yen)

(Billion yen)

Trends in consolidated equity ratio

2018

（Forecast）

2019 2020 2021

Years ended March 31

※ We executed a 1-for-10 consolidation of shares, which came into force on

October 1, 2017. Shares from before FY2017 are being provided the dividend

amount per share in accordance with the standard after the share consolidation.

2016 2017 2018 2019 2020（Forecast）

Fiscal

Trends in consolidated dividend on equity (Yen)

Trends in ROE

Cash flow from operating activities

Cash flow from investing activities

Free cash flow

Cash flow (Billion yen)

2016 2017 2018 2019 2020（Forecast）

Fiscal

2016 2017 2018 2019 2020（Forecast）

Fiscal

Mitsui Kinzoku Group upholds the vision of becoming by

2024 a “company that continually creates and develops

growth products and businesses in our three core business

segments (Engineered Materials, Metals, and Automotive

Components).” As a step toward realizing this vision,

during the period of the “16 Medium -Term Plan,” we

actively made investments with a focus on the Engineered

Materials business where there is a strong need for new

product development.

In the current “19 Medium-Term Plan,” which started in the

last fiscal year of 2019, we are sticking to this policy and

continuing to invest in growth products and businesses.

In FY2019, we have invested mainly in the Engineered

Materials business, such as strengthening the catalyst

production system for automobiles and creating a smart

factory to further improve the productivity of electrolytic

copper foil.

The consolidated equity ratio for the end of FY2019 was

30.7%, which fell short of the 34.5% that was initially

planned. We feel an ever stronger need to strengthen our

financial structure, since we are a corporate group that

receives significant impact from changes such as in the

currency exchange rate and the nonferrous metals price,

as well as in the trends of the electrical materials market

for smartphones, which sees a high turnover in product

cycles and dynamic fluctuations in market conditions.

Furthermore, while there is concern over the impact of the

recent spread of COVID-19 infections on each market, we

strongly recognize the necessity.

We will strive to achieve a consolidated equity ratio of 40%,

which is one of our management goals for FY2021, by

maintaining our financial discipline as we strengthen our

management foundation achieved by drawing in the

benefits from the initiatives that we have implemented thus

far through the 19 Medium-Term Plan and by executing

our growth strategy.

Financing policy

In order to prepare for dramatic changes, such as in the

market situation as well as the exchange rate and prices

for nonferrous metals, we will secure a certain level of

liquidity on hand so that we will be able to conduct stable

business operations.

At present, we are increasing cash and deposits by more

than 50% from the end of the previous fiscal year to further

increase liquidity on hand, in order to respond to the

significant changes in the environment caused by the

impact of COVID-19.

Meanwhile, as our 19 Medium-Term Plan includes plans

for making active equipment investments with a focus on

the engineered materials business, we will strive toward

the advantageous financing in a timely manner in

accordance with funding needs, while taking consideration

of various factors including the financial situation and the

interest rate levels.

Management that places awareness

on capital efficiency

As we strive toward “Transform the growth foundation to

achieve vision for 2024” which is the slogan in the 19

Medium-Term Plan, we are strengthening business

monitoring by not only using the traditional management

index, but also evaluating each segment using ROIC

(consolidated return on invested capital).

Although ROE (consolidated return on equity) for FY2019

has not reached the initial plan, we will continue to take

measures to achieve the target of ROE 10% for FY2021.

Dividend policy

Our dividend policy is based on the appropriate distribution

of profits according to our business performance, while

also ensuring that we hold back what is needed for the

future of our business foundation.

Specifically, while we will return profits with the aim of

realizing a consolidated payout ratio of 20% in accordance

with the company’s dividend policy that was announced on

May 9, 2018, we will also place importance on providing

continuous and stable dividends.

As such, we aim to provide dividends at a rate of 2.5%

DOE (consolidated dividend on equity).

In the future, we will review our shareholder return policy in

accordance with the level of progress that we achieve in

strengthening our management foundation and in

improving our financial condition.

Tax policy

Mitsui Kinzoku Group complies with the laws and

regulations of the countries and regions in which we do

business, and conduct our business activities in

accordance with the tax guidelines published by

international organizations such as the OECD (the

Organization for Economic Cooperation and Development).

If countries and regions have preferential taxation systems,

we carefully check the actual situation of our business and

the purpose of the systems, use them appropriately, and

do not take tax avoidance acts that abuse the systems.

When making business decisions, we consider tax matters

and position tax strategy as part of our business strategy.

※ The dividend forecast for FY2020 is not decided. (As of the end of June 2020)

45.0%・

-10.0%・

0.0%・

10.0%・

20.0%・

0.0%・

5.0%・

10.0%・

35.0%・

40.0%・

0.70・

0.80・

0.90・

1.00・

-5.0%・

0.0%・

5.0%・

0.5・

1.0・

1.5・

7.3%

-4.8% -3.2%

19.0%

-4.1%

6.7%

2.5%

8.8%9.5%

3.7%

41.1%

43.9% 44.0% 44.2%45.0%

0.880.88

0.93

0.84

1.00

0.95

4.0%

-2.2%

6.2%

2.2%3.4%

0.981.03

1.10 1.111.15


497.7

0・

100・

200・

300・

400・

500・

600・

10・

20・

30・

40・

0・

0・

5・

10・

15・

20・

25・

0・

100・

50・

0・

10・

20・

30・

40・

84.5

114.3105.0

52.4%

82.4%

18.6

24.7

34.0

473.1 470.0

550.0

18.2

13.010.0

37.0

4.69

1.57

6.0

23.0

-4.9%

1.8%

2.8%

45.0%

1.22

(34.0)

(10.1)

13 Medium-Term Plan: from FY2013 to FY2015, 16 Medium-Term Plan: from FY2016 to FY2018, 19 Medium-Term Plan: from FY2019 to FY2021

Financial Highlights

Trends in major financial indexes in the “13 Medium -Term Plan” and the “16 Medium -Term Plan,”

and the planned values in the “19 Medium -Term Plan”

Sales growth rate

Rate of operating profit on sales

Overseas sales ratio

Total asset turnover ratio

ROA (Return on assets)

Net D/E ratio

Highlights of major financial indexes for the past 11 fiscal years are listed on pages 58-59. Please refer to those pages as well. Other figures of each business segment in the 19 medium-term business plan are listed on pages 22-29.

Net Sales

Operating profit

Profit attributable to owners of parent

Capex (Total for 3 fiscal years)

R&D expenditures (Total for 3 fiscal years)

R&D expenditures in the 19 Medium Plan

Capex in the 19 Medium Plan

2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019[Fiscal] [Fiscal]

2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019[Fiscal] [Fiscal]

2014[Fiscal] 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019[Fiscal]

13 Medium Plan

(Billion yen)

16 Medium Plan 19 Medium Plan

(Plan)

(Billion yen)

13 Medium Plan 16 Medium Plan 19 Medium Plan(Plan)

Engineered

Materials Sector

（28.0）

34.0

(Billion yen)

(Billion yen)

(Billion yen)

(Billion yen)

Investments in growth strategies

（55.0）

(Engineered

Materials Sector)

（28.6%）

105.0

(Billion yen)

FY2019

2018 2019 2020 2021(Forecast) (Plan)

[Fiscal]

2018 2019 2020 2021(Forecast) (Plan)

[Fiscal]

2018 2019 2020 2021(Forecast) (Plan)

[Fiscal]

FY2019


Maximizing the Profitability of Engineered Materials

［ Engineered Materials Sector ］

In addition to maximizing the profitability of our existing businesses, we, as a market co-creation

business entity, will combine the strengths of our engineered materials business, such as core

technologies, know-how, and sales channels, with external strengths and intensify our existing and

peripheral businesses to materialize new products and create new markets.

Business strategy

Copper foil with carrier film

Senior Executive Officer, Engineered Materials Sector

2016

200・

100・

20212017 2018 2019 2020

（Plan）（Outlook）

[Billion yen]

[Fiscal]

145.8

167.2 165.5 167.8 168.0

212.0

2016

30・

20・

20212017 2018 2019 2020

（Plan）

[Billion yen]

15.9

30.6

16.6

13.4 13.0

26.0

10・

Net sales of Engineered Materials Sector

Ordinary income of Engineered Materials Sector

Catalysts for detoxifying exhaust gases Functional powders Sputtering targets IGZO and ITO

OKABE Masato

New business creation operations, which had been

handled by the Engineered Materials Sector until

FY2019, were transferred to under control of the

Business Creation Sector established as a

headquarters function in April this year to make the

operations a corporate-wide mission and accelerate

them.

As the new business creation mission was

separated, the Engineered Materials Sector now

focuses mainly on the business for existing engineered

materials. With the shift to the 5G format globally and

the COVID-19 spread as a background,

communications infrastructure is now undergoing

significant, quantitative and qualitative changes at an

amazing pace. To respond to these changes in a

timely and flexible manner, we are working speedily on

the further sophistication of our engineered materials

that meet the needs of our customers, development of

a mass production system, and enhancement of

delivery services.

At the same time, we are also putting our energy

into the development of new products and the creation

of new markets by capitalizing on a wide lineup of our

engineered material products and internal and external

networks. Although new business creation is

undertaken by the Business Creation Sector as

mentioned above, existing businesses need to pursue

and take advantage of opportunities offered by the

advance of IoT and 5G and the tightening of

environmental regulations to expand their business.

We will identify these opportunities correctly, as well

as promote the development of a system that enables

us to utilize the captured information more efficiently,

enhance our marketing capabilities, and promote

digitization, to achieve the functional enhancement of

the Engineered Materials Sector.

We aim to meet the targets of the medium-term

management plan, which was formulated toward the

ongoing growth of our business, while contributing to

social progress and resolution of social issues through

our valuable engineered materials. Please look forward

to the growth and transformation of our engineered

materials business.

Copper foil with carrier film

Electro-deposited copper foil is used for wiring

material in high-precision circuits. In particular, Mitsui

Kinzoku has a high market share in extremely-thin

copper foils. These products contribute toward

minimizing the sizes of smartphones and enhancing

the advanced functions of electronic products.

90％

For Semiconductor Package Substrate

Buttery material （Hydrogen storage alloy）

Mitsui Kinzoku started providing materials for

batteries in the 1940s. Since then, the company

started developing materials for rechargeable

batteries at an early opportunity, and has been

supplying hydrogen storage alloy for batteries used

in hybrid vehicles since the 1990s.

For hybrid car

Copper powder

Demand for MLCC (multi-layered ceramic capacitors)

is increasing rapidly with the electrification of

automobiles, the increased sophistication of

smartphone functions, and the widespread application

of IoT. We are contributing to this by providing

materials toward the advancement of MLCC, such as

in downsizing and increasing their capacity.

35％

For MLCC

Catalyst for detoxifying exhaust gas

We are contributing toward the maintenance of a

clean environment by detoxifying toxic substances

such as CO and NOX that could cause air pollution.

We are also increasing the supply of catalysts for

four-wheel vehicles that we offer in the world market.

50％

For motorcycle

Indium tin oxide (ITO) targetITO, which is oxidized indium and tin, is an essential

material for creating the transparent conductive film on

liquid crystal displays. We make use of the capabilities

held by Mitsui Kinzoku in creating products that offer a

high level of purity, sintering technologies, and film

formation. We also supply sputtering targets for IGZO.

For LCD display

Cerium oxide abrasive

This is a polishing material that is essential for polishing

high-performance glass, such as optical lens, hard disk

glass substrate, and liquid crystal glass panels. Mitsui

Kinzoku’s strength is not only in nonferrous metal

materials, but also in rare-earth metals.

40％

For glass substrate

Active materials for lithium-ion batteries

Conductive oxide

Tantalum oxide

Niobium oxide

Atomized powder

Solder powder

Fine powder

Copper foil for PWB

Embedded Capacitance Materials for PCB

Various refractories for super-high-temperature furnace

Filtering equipment for molten aluminum

Carriers for electrophotography

Ferrite powder

Iron powders

Oxygen absorber

Rare earth oxides

High Precision Grinding Wheel

Super-abrasive wheel

40％ 35％

[Fiscal]

（Outlook）

Global share

Global share

Global share

Global share

Global share

Global share


SO

W

T・ Pursuit of new levels of quality and create demand

through technological innovations

・ Demand expansion for high-functional products arising

from increased sophistication of market needs

・ Increased demand in final market due to the emergence

of developing countries

・ Increased price competition with manufacturers in

developing countries

・ Stagnant demand due to the rise of protectionism

and spread of infectious diseases

・Increased geopolitical risks affecting overseas

materials procurement

・ Product composition that is susceptible to changes

in the economy

・ Short life cycle of products

・ High-cost structure resulting from multiproduct

production

2020

Strengths

Opportunities

Weaknesses

Threats

＊The figures for FY2021 and FY2022 in the above graphs

do not fully reflect the possible impact of COVID-19 on

demand.

Sales projection for 5G affiliates

（FY2018 = 100）

2018

300・

100・

2019 2020 2022[Fiscal]

100

（Plan）

200・

2016

（Plan）

20222017 2018 2019 2020

（Plan）（Plan）

[Fiscal]

Sales projection for Automotive catalysts

2015

100・

200・

300・

400・

2021

139

233

99

204

500・

2021

100131

200

281313

404

322

436

Vice President, Representative Director,

Executive Vice President, Business Creation Sector

NOU Takeshi

New products required by and useful to society

Business Creation Sector

In order to more effectively create products and businesses in ever increasing numbers,

we established the Business Creation Sector.

We will create new businesses through market co-creation by combining our own strengths of

core technologies, know-how and sales channels with external strengths such as customers and

partner companies.

The Business Creation Sector has been established

as a corporate function. Our mission is to create

new profitable products and businesses in a

problem free and efficient manner. Our focal points

are market co-creation, creation of new

technologies, and development of human resources

capable of creating new businesses.

New business creation operations, which the

Engineered Materials Sector was formerly in charge

of, have been placed under corporate control for

two reasons. One is because the Group’s

investments in new business creation have grown

to the extent that they need to be managed more

systematically on a corporate level. Investments

have been increased about three-fold compared

with the previous medium-term management plan.

The other is because the need to accelerate new

business creation demanded a different

management system and mindset from the previous

ones. It was also considered difficult for the

Engineered Materials Sector to concurrently

manage both new business creation and their

existing products offered and businesses executed

on a global scale.

Mitsui Kinzoku carried out this reorganization at

the halfway point in the medium-term management

plan, but we will make every effort to ensure that

new products and businesses be spawned under

this new framework. One of our pressing tasks is to

put on the market, as early as possible, prioritized

products so that they can be included in the next

medium-term management plan starting in FY2022.

A second pressing task is to create another large-

scale business. It is imperative that we implement

these two tasks at the earliest possible date.

We will work tirelessly toward the goal of

transforming ourselves into a market co-creation

business entity by drawing on Mitsui Kinzoku

Group’s expertise, technology, and “Material

Intelligence”.

Progress of commercialization

of products on new priority themes

[Market development] The material is expected to be put into

practical use in a special application in FY2020.

[Mass production] The mass production technology is being

established in the existing production lines.

A pilot plant is being built aiming to start its operation in January 2021.

Solid electrolyte for all solid-state batteries

HRDP® next-generation material for formation of ultra-fine circuit

[Market development] Multiple electronic device makers are

evaluating samples. The material is expected to be put into

practical use in FY2020 by some customers who evaluate the

samples faster than others.

[Mass production] Currently working on the establishment of

mass production with GEOMATEC Co., Ltd.

Mitsui Kinzoku has invested in Atomis Inc. (Head office: Kyoto-

shi, Kyoto), a spin-off from Kyoto University founded by

Distinguished Professor Susumu Kitagawa, Director of the

Institute for Integrated Cell-Material Sciences (iCeMS)* at Kyoto

University in 1997 to develop new porous materials called metal-

organic frameworks (MOFs).

Through this investment of corporate venture capital, we will

support the manufacturing of MOFs and the expansion of

applications of the materials.

MOFs can also be combined with inorganic materials, which are

one of our strengths, and applied in various new markets in the

environment and energy fields, such as gas absorption,

separation, and storage. We will pursue a broad range of

opportunities by developing valuable products.

Initiatives for Market Co-creation activities in FY2019

＊ iCeMS： A research institute in Kyoto University aiming to create new

interdisciplinary research domain integrating cell science and material science.

・ High quality and high performance product lineup and

sales channels that make use of our core technologies and

know-how

・ Manufacturing and sales structure of being “located at the

consumption site” with a focus on Asia

・Establishment of the Business Continuity Plan with

multiple production sites

[Engineered powders]

We will increase our efforts to expand sales of 5G-related

products that become widespread, and also of abrasives.

We will also strive to develop new products. Our business

unit that deals with powders, which constitute our core

technology, will work to expand our business by launching

new products continuously, in accordance with changeable

market needs and product cycle.

[Catalysts]We will maintain top share in catalysts for two-wheel vehicles

and aim to expand sales of catalysts for four-wheel vehicles.

We will also continue to evaluate further increasing and

strengthening our facilities in response to increasingly

stringent global restrictions against emissions. For GPF

catalysts scheduled for mass production in 2022, we will

continue our efforts to establish the production system.

[Copper foil]We will continue to working on the sales expansion of

MicroThin™ for PKG other than smartphones, such as for

external memories and GPUs, and also for 5G related

products such as electro-deposited copper foils for high-

frequency devices. We will also promote optimization and

smartification of our production sites.

[PVD materials]We formulated plans for improving profitability because of the

deterioration of the business environment. Through measures

aiming at strengthening competitiveness, we will aim to

recover profitability of PVD materials division.

（Plan）（Plan）

(FY2015 = 100)

Cooperation with ventures in the environment and energy fields

The strength of the Metals Sector is that it has accumulated smelting technologies and has multiple smelters.

We will promote optimization of the whole smelting business, further increasing our business value,

by adding copper smelting to the existing lead, zinc, and precious metals smelting and refining network

to increase synergies.


Since the early 1900s, we have owned multiple non-

ferrous metal smelters in Japan. We also have

possessed the consistent process from the mine to the

smelter. Similarly in our overseas operations, we have

not only invested in mines, but also undertaken mine

exploration, development and operation ourselves. We

are one of the few non-ferrous metal smelters to have

done this in Japan.

Extracting lead from scrap batteries and valuable

metals from industrial waste has begun early in the

1990s. We have implemented the process to the

downstream activities, leading to “venous industries.”

Material Stewardship is included in the 10 Principles for

Sustainable Development advocated by the International

Council on Mining & Minerals (ICMM), an international

organization made up of mining and smelting companies.

The aim is to promote the establishment of a material-

cycle society through management of the entire industrial

supply chain from mining, smelting, and processing to

consumption, disposal, recovery and recycling of metal

products. We greatly approve of this principle. It is also in

sync with our activities to date aimed at creating a

sustainable supply chain.

Under our Medium-Term Management Plan, we are

speeding up further the transformation of our business

structure from a non-ferrous metals smelter, which uses

concentrate as raw materials, to a recycling smelter.

We are actively expanding our processing capacity of

complex and refractory zinc ores, increasing lead blast

furnace processing, and strengthening our capacity for

collecting precious metals.

Also, in order to improve metal recovery rate and

recycle more various metals, we will utilize the newly

added copper smelting process and the existing zinc

and lead smelting processes to process intermediate

products generated at our smelting plants.

We aim to expand the capacity of recycle-smelting, to

increase benefits for a sustainable business entity, and

to contribute to the creation of a material cycling society.

2016

200・

100・

20212017 2018 2019 2020

[Billion yen]

139.6

186.5166.6 161.1

176.0163.0

2016

10・

5・

20212017 2018 2019 2020


8.5

5.5

-6.0

3.0

Net sales of Metals Sector

Ordinary income of Metals Sector

FY2019

We increased the quantity of processing lead-based recycled

raw materials and collecting by-product smoothly almost as

planned.

From FY2020 onwardsWe will continue to obtain more diverse raw materials for

recycle and increase the quantity of processing the raw

materials by organically connecting new processing processes

to the existing smelting network.

S

O

W

T

Strengths

Opportunities

Weaknesses

Threats

Share in Japan

Zn (Zinc)

Iron is essential as a basic material for use by

industries and in our livelihood. In addition,

zinc is what protects iron from corrosion. Zinc

powder is widely used not only as a coating

material for steel, but also for die-casting and

other processes of copper.

42％

Pb (Lead)

Lead is acquired from battery scraps and ores,

and because it is easy to process, it is used

mainly for lead storage batteries, as well as for

solder, lead pipes and sheets, X-ray shielding

material, soundproofing material, and more.

35％

（Leading）

（２ｎｄ）

Electrolytic zinc Electrolytic lead

Copper/Zinc base alloys/Antimony trioxide/Gold/Silver/

Sulfuric acid/Bismuth/Zinc ore/Lead ore

Senior Executive Officer, Metals Sector

TSUNODA Satoshi

Mining

・ Know-how of operation of our own zinc mine in Peru over a

long period of time

・ Production of high quality and clean zinc concentrates

Smelting

・Network of eight smelters（Zinc, lead, copper, precious metals)

that makes it possible to process a wide variety of raw materials

・ Presence as a top manufacturer of zinc in Japan

・ Possession of renewable energy (hydropower) facility

Mining

・ Widespread of ICT in operations

・ Stable growth of zinc and copper demand, both globally and

in the long term

Smelting

・ Global expansion of the recycled raw materials market due

to the enhancement of environmental awareness

・ Promotion of the spread of renewable energy worldwide

Mining

・ Increased mining costs caused by lower purity of mined ore.

・ Strengthened restrictions due to the enhancement of

environmental awareness worldwide

Smelting

・ Increased presence of Chinese zinc smelting

・ Gradual decline in domestic demand for zinc and copper

・ Intensifying competition for recycled raw materials worldwide

Mining

・ Increased costs from deepening of mining locations

Smelting

・ Aging of equipment

Total of zinc, lead, and precious metals

-7.0-1.5

-5・

[Fiscal] 2015 2016 2017 2018 2019

50・

55・

60・59％

56％Share in Japan

[Billion yen]

（Outlook）（Plan）

［Metals Sector ］

Recycle-smelting Implementing materials stewardship

Business strategy

（Electrolytic smelting process）

Annual transition of the ratio of recycled raw materials

[Fiscal]

[Fiscal]

Leverage our “Manufacturing Intelligence” and provide continuously “Safety,” “Comfort” and “Amazing Performance.”

Continually enhancing quality and cost competitiveness as well as developing and sales expanding

of automotive mobility products are one of the processes for that purpose.

Contributing to sustainability of the automotive industry has led to the building of a resilient society.

While Mitsui Kinzoku ACT Corporation （hereinafter "ACT")

was established in 2010, Mitsui Kinzoku’s automotive

parts & components business dates back more than half a

century. We first launched into the United States in 1987.

Currently, there are 11 production and supply sites

throughout the world including a site in Morocco that

was completed and started operations in January, 2020.

Our system of regional business units which conduct

business operations in each region is also established.

We have cultivated local human resources at both

operational and management level. Currently the

percentage of employees holding local nationality in

executive officer positions is around 23% and the

percentage of women in management positions is around

21%.

In FY2019, the first year of the current medium-term

management plan, the business environment

deteriorated more than expected due mainly to the

trade friction between the United States and China and

the spread of COVID-19. To survive this severe

environment, in addition to executing the contingency

plan, such as the reduction of fixed costs, globally, the

corporate headquarters and business units are working

closely together to implement the two main strategies

under Vision for 2024－continually enhancing quality

and cost competitiveness and focusing on winning

major contracts to expand sales.

Our vision for 2024 is to be a company that provides

products and services focused on safety, comfort, and

amazing performance through the utilization of our

strength in manufacturing intelligence. We will strengthen

our quality and cost competitiveness by implementing ICT

and other technologies in our production sites to develop

smart factories, in order to improve productivity and

enhance the quality of mass-produced items, as well as to

reduce costs.

Also, we would like to develop high quality products

for door-related components in accordance with CASE,

such as the electrification and automation of mobility,

and propose such products to our customers worldwide

in order to realize the acquisition of large-scale orders

and the expansion of future sales.

By establishing the ACT brand and strengthening

customer trust, we believe we can contribute to

sustainability of the automotive industry.

S

O

W

T

Strengths

Opportunities

Weaknesses

Threats

・ Technological abilities as a manufacturer specializing in components

for the door area

・ Long-term business partnership with outstanding Japanese OEMs

・ Supply chain that enables stable supply on a global scale

・ Integrated production at the major production sites that covers

everything from pressing, resin formation, and assembly

・ Alliance with European OEMs that do not have much business with the

Japanese OEMs who are our customers, and increase sales opportunities

toward European OEMs through joint purchases

・ Increased sales opportunities for our company’s lightweight products and

system products due to the electrification and automation of automobiles

・ High barriers to market entry because of strict demands in terms of

performance and required quality

・ Emergence of giving priority to one’s own country, deceleration of

the automobile market due to trade frictions, increased burden of

customs expenses, changes in the currency exchange rate

・ Market oligopoly by global mega-suppliers

・ Emergence of new customers and competitors from the major

transformation in the automobile industry

・ Deceleration of the automotive market caused by COVID-19

・ In-store share among European and American OEMs

・ Lineup of products for electric sliding doors and backdoor systems

・ Alliance with other companies that complement our own technologies

＜Japan＞Toyota Motor East Japan, Inc. “Quality Control Award”

Hino Motors, Ltd. “Superior Prize of Quality Control”

Achievements in FY2019 Customer awards for our manufacturing sites(Part of the results in FY2019 and no particular order)

Side Door Latch (GA Latch)

Weight of existing products = 1.0

0.85

1.18Strength of existing products = 1.0

We started full-scale production and supply of the GA Latch, a

next-generation side door latch. The GA Latch is smaller, more

lightweight, and higher-strength than existing products and can

be applied in a number of variations. It is also designed in

consideration of assembly workability for both customers and our

company.

2016

200・

20212017 2018 2019 2020


113.2 102.0 104.0

90.6

72.0

104.0

2016

10・

20212017 2018 2019 2020

6.25.5

4.7

0.5

5.0

5・

Net sales of Mitsui Kinzoku ACT group

Ordinary income of Mitsui Kinzoku ACT group

Business strategy

100・

50・

-3.0

Global share

Door Latch for automobile

Major products offered by Mitsui Kinzoku Act

Corporation that have top-level shares in the

world market are mechanical components that

keep the doors firmly in place on the vehicle body.

These parts are constantly required to be made

smaller, more lightweight, and with improved

performance, while also being required to have

the strength to ensure the safety of the people in

the vehicles.

20％around

＜Other countries ＞Dongfeng Liuzhou Motor Co., Ltd. “Advanced supplier award”

GAC Toyota Motor Co., Ltd. “Quality Cooperation Award”

Zhengzhou Nissan Co., Ltd “Excellent service award”

Zhengzhou Nissan Co., Ltd “Long term collaboration Award”

General Motors (Thailand) Co., Ltd. “Quality Award”

TOYOTA CO-OPERATION CLUB (Thailand) “Quality Improvement Award”

Honda De Mexico, S.A. De C.V. “Supplier Performance Award”

Initiatives from FY2020 onwards

We will develop high-quality products for use around doors in

accordance to the electrification and automation of mobility, and to

meet the needs of our customers. We will make proposals on a

global level to our customers in order to acquire large-scale orders,

and thereby realize expanded sales in the future.

Solid progress toward achieving our vision for 2024

[Evolution of our system products]Our latch technologies will be combined with motor, high-

speed communication, sensor, and other new technologies

to give new added-value to our products that will make

ingress and egress from a car easier.

Easy Access Door SystemA system that provides safety, comfort, and amazing performance to

everyone. It allows the elderly and young children alike to get in and

out of the car safely and comfortably.

Automatic door

Sensor devices

Power Sliding Door

Power Back Door


IGATA Hiroshi

Senior Executive Officer of Mitsui Kinzoku,

President and Representative Director of Mitsui Kinzoku ACT Corporation

[Billion yen]

[Billion yen]

（Outlook）（Plan）

Continuous supply contributing to sustainable mobility

［ Automotive Parts & Components ＝ Mitsui Kinzoku ACT Corporation ］

[Fiscal]

[Fiscal]


Capitals as the source of value creation

Mitsui Kinzoku Group maintains and strengthens not only our financial capital

but also our non-financial capitals in order to achieve our business model and enhance our corporate value.

We will develop growth products and businesses by continuously investing in non-financial capitals, which

generates social value.

Workstyle reform (human capital)

There are major changes of external environment underway, such as the decline of the working-age population in Japan

and the advancement of technologies including AI. In this situation, Mitsui Kinzoku Group has been reforming our workstyle

since FY2016 as a means for securing the human resources that will realize value creation of the Group. This workstyle

reform aims to create a work environment where diverse talents can participate actively, regardless of age, gender,

nationality or other attributes.

As people’s lifestyles are expected to diversify in the future, we offer various options to employees so that even those

who are restricted in when and where they can work due to child-rearing, nursing care, medical treatment, and other

reasons can work flexibly and for many years to come. We have also introduced flextime without core working hours,

working from home, and “Premium Friday” campaign, while improving leave-of-absence andreinstatement system.

In FY2019, from November 11, 2019 to

January 30, 2020, Mitsui Kinzoku implemented

trials of working from home in the headquarters,

Osaka office and a part of business site in Ageo,

Saitama, preparing for the introduction of

working from home in FY2020. Thanks to these

trials, we were able to have employees in those

areas shift to working from home in February

2020 in a smooth manner as an emergency

measure against the spread of COVID-19. This

has enabled us to reduce the infection risk for

employees and allow employees with

restrictions on the way they work to continue

working even during the emergency.

Development of human resources who will achieve value creation (human capital)

Mitsui Kinzoku Group develops human resources responsible for realizing value creation of the Group by OJT training and

Off-JT training programs. Especially, on the OJT training for new employees, we appoint OJT instructors and give regular

trainings to them. We offer Off-JT training to supplement the OJT. The Off-JT training aims at developing human

resources capable of creating businesses out of concerns about environmental and social issues. We are working to

expand and improve the Off-JT training programs, including training on how we should respond to ESG and the SDGs in

consideration of the changes in our external environment.

To respond to the spread of COVID-19 infection, we prepared all the training to be available online at the end of

FY2019. New employees in FY2020 received all their training online.

We also attach importance to the self-sustaining career development of employees which may lead to the creation of

new businesses and corporate value, and continuously explore ways to expand and improve support for employees’

career development.

Type of training

・ Programs in line with respective ranks, combining various subjects such as management,

leadership, career development, and CSR

・ Programs of information on management plans, results and various business measures

・ Programs of various themes, such as on equipment maintenance skills, calculating statistics,

intellectual property, and on sales skill-up

・ These programs are reviewed annually in accordance with the changes in external environment

and in-house needs.

・ External training program for candidates of next-generation managers

selected from Executive officers and Managers

・ Training program for next-generation and next-next-generation corporate manager candidates

selected within the corporate group.

・ Dispatch for Rank-based training held by Mitsui Inter-business Research Institute

・ Correspondence courses including e-learning

・ Support foreign languages learning

Acquire the necessary knowledge

and skills for each career stage

Strengthen each employee’s expertise

・ Special training for

corporate manager candidates

・ Interaction with external organizations

Self-sustaining career development

of employees

Rank-based training

Free-choice training

with specific theme

Self-development

support

Training for

selected employees

Purpose Outline

Overview of the Off-JT training programs

Rank-based training with National staff members Internal lecturers providing online training

＊National staff： Local staff in overseas sites

Evaluation of initiatives for human capital (human capital)

Mitsui Kinzoku Group conducts the Employee Satisfaction Survey every three years in order to measure and learn about

satisfaction with workstyle reform and development of human resources, and employee engagement.

The results of the FY2019 survey show that the overall satisfaction level and the satisfaction level with respect to the

corporate group’s human capital measures rose compared to the previous survey in FY2016, indicating that our efforts

were generally evaluated positively. Based on these results, we will advance our human capital management.

Development of intellectual property (IP) human resources (intellectual & human capitals)

In 1988, the then Ministry of Labor (currently Ministry of Health, Labor and Welfare) identified the need to develop the

lifelong professional ability of businesspersons to enable them to respond to rapid economic and social changes toward

the 21st century. One of the recommendations made by the ministry for businesspersons was to acquire a qualification.

For companies, the functions of qualification and certification

tests can be roughly classified into the following four groups:

Mitsui Kinzoku Group has, for many years, been encouraging

employees to acquire qualifications (Pollution Control Manager,

and others) based on Function 1. In 2017, we started to bear the

whole or part of the expenses of employees required for acquiring

an IP-related qualification, such as examination fee, textbooks,

lecture registration fee, and transportation cost, to fill Functions 2

and 3. By allowing all employees, regardless of their position, job,

or whether or not the qualification is related to their job, to benefit

from this policy, we will develop and secure many IP human

resources.

1. Function that responds to a requirement under law or

is necessary for transactions in the industry

2. Function that promotes the acquisition of knowledge and skills

3. Function that allows the company to show its employees’

professional expertise externally

4. Function that complements the evaluation of each employee’s

professional ability at the company

３

６

６

１７

The number of employees with IP qualification

in Mitsui Kinzoku Group

1st grade Certified Specialist

2nd grade Certified Specialist of IP Management(including 2nd grade The Examination of Proficiency in Intellectual Property)

Patent attorney

Back office/Administrative departments

Engineering departments

R&D departments

IP departments

Effective R&D management (intellectual & human capitals)

The source of continuous growth and the core competence for Mitsui Kinzoku Group is in research and development

toward the creation of new businesses. We strategically invest in R&D while also implementing stage-gate management.

Research themes that have been narrowed down by considering market needs (including environmental and social issues)

and commercialization potential are moved forward into the research stage. Research resources such as human resources

are allocated to the selected research in the research stage intensively. We will enhance our opportunities to create new

businesses by focusing on the areas that have high potential to proceed steadily from research to development,

commercialization, and market launch.

＊ Trends in R&D expenses are listed on page 21.

52.2%44.6%

Survey result in FY2019Survey result in FY2016

Q How satisfied are you with your

present work/company/workplace?

Q How satisfied are you with your

present work/company/workplace?

[Outline of survey]1．Target: 7,433 employees at Mitsui Kinzoku domestic consolidated (including employees transferred overseas and agency workers)

2. Method: Anonymous online or written survey

3. Contents： Evaluation/awareness of Mitsui Kinzoku Group, actual status and awareness of operations and workplace, evaluation of superiors,

employee's feelings and attitude toward their job and the corporate group.

4. Period： From October 29 to November 15, 2019

5. Response rate: 87.7%


Corporate governance

The foundation of our value creation

Mitsui Kinzoku recognizes that “corporate governance is a mechanism for ensuring transparent and fair

decision-making that proceeds in a prompt and decisive manner, taking into account the standpoints of

all stakeholders, including shareholders, customers, employees, and local communities.”

Corporate governance, which is one of the most important issues in business management, is about

establishing a management organization and mechanism and taking necessary measures to achieve the

management philosophy. Corporate governance is the foundation for sustaining the long-term value

creation of Mitsui Kinzoku Group.

Corporate Governance System

The Board of Directors is comprised of Executive Directors and Outside Directors. The board conducts appropriate and

accurate supervision of the business execution performed by the individual Executive Directors. In addition, Corporate

Auditors attend the Board of Directors and audit the decision-making process of the board and the performance of duties

by the Directors.

Directors and Board of Directors

The Directors supervise the execution of business operations. Important issues are shared in advance among the

Directors and discussed deliberately at the meetings of the Board of Directors. In order to make swift decisions and to

strengthen the supervision function of the board, the decision-making processes on certain items are entrusted to

Executive Officers and their performances are supervised by the board.

The term for the Board of Directors, as stated in our articles of incorporation, is one year. From FY2019, a mutual election

method has been introduced for appointment of the chairperson of the board. The chairperson is elected among the

Directors, and we strengthen the monitoring function of the board over the execution of operations. The mutual election

method enables to appoint the chairperson of the board from Outside Directors who are independent of execution and to

ensure clearer separation of supervision and execution functions.

General Meeting of Shareholders

Election/DismissalElection/Dismissal Election/Dismissal

Board of Directors Outside Directors

Financial AuditAuditCooperation

Involvement/Participation

Election/Dismissal/Supervision

Audit

Corporate Governance System of Mitsui Kinzoku

・Nomination Review Committee

・Compensation Committee

Board ofCorporate Auditors

External Accounting Auditor

President

Executive Council

Executive Officers

Internal Audit Committee

Audit Audit

Internal Audit Dept.

Cooperation

CSR Committee

Cooperation

・ Hotline Management Committee

・ Export Screening Committee

・ Supreme Safety and Environmental

Meeting

Survey/InstructionBusiness Units AffiliatesCorporate

The Corporate Governance Guidelines defining our fundamental principles regarding corporate governance is available on our website.

https://www.mitsui-kinzoku.com/Portals/0/images/en/toushi/management/governance/cgguideline_e.pdf

Executive Officers

President and Representative Director not only assumes

executive management responsibilities, but also executive

responsibilities for business operations of Mitsui Kinzoku Group.

Representative Directors and Executive Directors concurrently

serve as Senior Executive Officers for Mitsui Kinzoku.

Board of Corporate Auditors

and External Accounting Auditor

Corporate Auditors perform audits on the performance of

the Directors in accordance with the auditing plan

determined by the Board of Corporate Auditors. Corporate

Auditors strengthen their cooperation with Accounting

Auditors by receiving accounting audit plans and audit

results, as well as exchanging opinions regularly.

Internal Audit Committee and Internal Audit Dept.

In order to strengthen our internal control function, Mitsui

Kinzoku has an Internal Audit Committee chaired by an

Outside Director, which reports directly to the board. The

Internal Audit Dept. conducts internal audits. The

Department is equipped with personnel with specialized

knowledge and they perform audits regarding the group-

wide compliance with laws and regulations, as well as the

operating situation of the internal control system.

The Internal Audit Committee evaluates the results of

internal audits and checks the progress of corrective

measures for concerns raised by the audits. The

committee reports audit results to the Board of Directors

via the Internal Audit Dept.

Organization structure

The structure of each organization is as follows;

（As of July 1, 2020 - Number of female directors: 0; Number of female auditors: 1 )

NISHIDA Keiji

NOU Takeshi

HISAOKA Isshi

OSHIMA Takashi

KIBE Hisakazu

MATSUNAGA Morio

MIURA Masaharu

TOIDA Kazuhiko

MISAWA Masayuki

KUTSUNAI Akira

ISHIDA Toru

TAKEGAWA Keiko

President, Representative Director

Vice President, Representative Director

Director

Director

Director

Outside Director

Outside Director

Outside Director

Corporate Auditor

Corporate Auditor

Outside Corporate Auditor


◎

〇

〇

〇

〇

〇

〇

〇

◎

〇

〇

〇

〇

〇

〇

◎

〇

〇

〇

◎

〇

〇

◎

〇

〇

〇

〇

〇

〇

〇

◎

〇

◎＝ Chairperson 〇＝Member of Committee （Chairperson of the Board of Directors is elected from among the Directors.）

（ー% ）

（100%）

（100%）

（100%）

（100%）

（100%）

（100%）

（ー%）

（ー%）

（92%）

（）＝Attendance rate in FY2019 ＊１ Not listed since being newly appointed

（ー% ）

＊1

＊1

＊1

（81%）

＊1

Board of Directors

Board ofCorporate Auditors

NominationReview Committee

Compensation Committee

Executive Council

Internal Audit Committee

※ Auditors attend at the board meetings.

※Outside Auditors attend at the Nomination Review Committee and Compensation Committee in the role of advisers.

※ The Internal Audit Committee includes the general manager of the Internal Audit Dept. as a member and Corporate and Outside Corporate Auditors

as observers.

Name Positison

Expertise possessed by the Directors

NISHIDA Keiji

Name Title/PositionsCorporate

management

Business

strategies

Finance and

accounting

Technological

research/

development

Legal affairs

and risk

managementInternationality

NOU Takeshi

HISAOKA Isshi

OSHIMA Takashi

KIBE Hisakazu

MATSUNAGA Morio

TOIDA Kazuhiko

MIURA Masaharu

President,

Representative Director


Executive Vice President, Senior General

Manager of Business Creation Sector

Director, Senior Executive Officer,

Chief Environmental Safety Officer

Director, Senior Executive Officer, Senior General

Manager of Corporate Planning & Control Sector,

General Manager of Corporate Planning Department

Director, Senior Executive Officer,

Senior General Manager of Affiliates

Coordination Strategic Sector

Outside Director

Outside Director

Outside Director

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

●

[Business Execution]


Election policy of Directors and Auditors

Mitsui Kinzoku establishes a Nomination Review

Committee as an optional organization. The Committee

reviews candidates to serve as directors or auditors by

their capabilities, knowledge and personalities. Based on

the result of the review, those who are deemed capable of

satisfactorily fulfilling the responsibilities are named as

candidates for nomination by the board.

Compensation policy of Directors and Auditors

(1) Criteria for determining the amounts of compensation

The amounts of Directors’ basic compensation and

performance payments are determined by the

Compensation Committee, to which the decision is

entrusted by the Board of Directors. Decisions on the

amounts are made through deliberations at the committee

in a fair and transparent manner, within the limits approved

at the Annual General Meeting of Shareholders and based

on the company’s compensation standard policy.

Auditors’ compensation is determined by the conference of

Auditors, and the total volume of Auditors’ compensation

falls in the range approved at the Annual General Meeting

of Shareholders.

(2) Composition of compensation

Compensation for Directors consists of base

compensation and performance payments. Base

compensation is calculated based on that of the President

and by applying the ratio according to the title, taking into

consideration the Company’s performance, the general

level in Japan, and other factors comprehensively.

Performance payments are calculated by using

consolidated ordinary income as the performance

indicator and is determined (calculated by addition and

subtraction) by the evaluation corresponding to the

performance of the business for which the Director is

responsible. Outside Directors and Auditors who are

uninvolved in business execution do not receive

performance payments.

The payment ratio of the compensation provided to the

Directors (excluding Outside Directors) has been

determined, by way of how the system is designed, as

being 60% in basic compensation and 40% in

performance payments .

This ratio changes as performance payments vary

according to the company’s financial performance.

Notes:

1. At the 80th Annual General Meeting of Shareholders held on June 29, 2005, shareholders approved a limit on compensation paid to Directors of ¥60 million

per month (not including compensation for their services as employees).

2. At the 80th Annual General Meeting of Shareholders held on June 29, 2005, shareholders approved a limit on compensation paid to Corporate Auditors of

¥15 million per month.

3. At the time of resolution regarding above Notes 1 and 2, there were eleven (11) Directors and four (4) Corporate Auditors.

4. At the meeting of the Board of Directors held on April 22, 2014, it was resolved to discontinue the system of bonuses for Directors and to calculate the

Directors’ compensation by adding performance payments linked to results in addition to a fixed base compensation. This does not apply to the Outside

Directors to whom the Company will pay the base compensation only, without the addition of a performance payment. The total volume of Directors’

compensation would be within the limit already approved at the 80th Annual General Meeting of Shareholders held on June 29, 2005. The total amount of

Directors’ compensation will be determined by the Compensation Committee chaired by an Outside Director and composed mainly of the President, the

Director in charge of Human Resources, and the Outside Corporate Auditors as advisors.

Director (excluding Outside Director)

Corporate Auditor (excluding Outside Corporate Auditor)

Outside Director/Outside Corporate Auditor

4

2

6

194

50

53

Total amount of Compensation by type (millions of yen)

138

50

53

55

-

-

NumberTotal Compensation

（millions of yen)Classification

Performance paymentsBase compensation

Total compensation paid to Directors and Auditors

Election of Outside Directors

We endeavor to ensure the independence of the supervision and auditing functions from our company and to incorporate

the perspectives of diverse stakeholders. Mitsui Kinzoku appointed a new Outside Director with management experience

on June 26, 2020.

Mr. TOIDA Kazuhiko has experience as a business executive, having been engaged in a wide range of work at Nissan Motor Co., Ltd.,

including product planning, sales promotion, and launch of a sales company. In addition, he has experience as a Representative Director

and President of FALTEC Co., Ltd. The Company judges that his wealth of experience is expected to contribute to the strengthening of the

Group’s supervisory functions.

Reasons for the NominationPositionName

Mr. MATSUNAGA Morio has specialized knowledge of engineering and experience of organizational management as a

university professor and the president of a national university corporation. The Company judges that by utilizing his wealth of

experience he can further contribute to the strengthening of the Group’s management oversight and supervisory functions.

Outside

DirectorMATSUNAGA Morio

Mr. MIURA Masaharu has a wealth of knowledge and experience in legal circles as a public prosecutor and a lawyer.

The Company judges that by utilizing his wealth of experience he can further contribute to the strengthening of the Group’s

management oversight and supervisory functions.

Outside

DirectorMIURA Masaharu

Outside

DirectorTOIDA Kazuhiko

ISHIDA Toru Outside

Corporate

Auditor

Mr. ISHIDA Toru has held key positions in which he has contributed to development of commerce and industry over the years.

He served as Director-General, the Industrial Science and Technology Policy and Environment Bureau, METI and Commissioner,

Agency for Natural Resources and Energy, METI and currently serves as President, The Japan Chamber of Commerce and

Industry and President, The Tokyo Chamber of Commerce and Industry. The Company judges he can reflect his experience and

specialized knowledge in auditing of the Company and believes he is a suitable person for the position of Corporate Auditor.

Ms. TAKEGAWA Keiko served as Director, Public Relations Office and Director General, Gender Equality Bureau at the Cabinet

Office and has a wealth of knowledge and experience through her engagement in formulation and implementation of policies

such as promotion of women’s participation and advancement. Although she has never been directly involved in management of

a company, the Company judges that she can utilize her wealth of experience in auditing of the Company and believes she is a

suitable person for the position of Corporate Auditor.

Outside

Corporate

Auditor

TAKEGAWA Keiko

＊ The profile of Directors and Auditors is listed on pages 96-97.

TAKEGAWA Keiko


MISAWA Masayuki KUTSUNAI Akira ISHIDA Toru

Corporate Auditor Outside Corporate AuditorCorporate Auditor

TOIDA Kazuhiko

Outside Director

KIBE Hisakazu MATSUNAGA Morio MIURA Masaharu

Director Outside DirectorOutside Director

OSHIMA Takashi

Director

NISHIDA Keiji NOU Takeshi HISAOKA Isshi

President,


Vice President,


（as of June 30, 2020）

Director


Internal control system

A summary of the decisions made at the meetings of the

Board of Directors, regarding the business structure for

the appropriate business operation of Mitsui Kinzoku

Group in compliance with laws and regulations and the

corporate ethics, is available on our website.

https://www.mitsui-kinzoku.com/en/toushi/management/governance/

Effectiveness Assessment of the Board of Directors

We assess the effectiveness of the Board of Directors

every year to ensure the continuous enhancement of the

board’s function. In FY2018, we had an independent

organization conduct the assessment. In FY2019, we

conducted self-assessment, which included a review of

past results.

(1) Implementation method

An interview with each Director based on a questionnaire

survey filled out in advance.

(2) Main contents of the questionnaire・ Involvement of the Board of Directors in the

enhancement of corporate governance・ Involvement of the Board of Directors in the formulation

of medium-term management plans and the addressing of

critical issues・ Operation of the Board of Directors (including the

Nomination Review Committee and the Compensation

Committee)

(3) Outline of results

The results show that, while further improvement is

required mainly in terms of the enhancement of the

monitoring function, a higher evaluation than in the

previous assessment was given to the way the Board of

Directors is involved in the formulation of the medium-

term management plans and the addressing of critical

issues. The Board of Directors was judged overall as

contributing to the promotion of corporate governance.

There was also an opinion pointing out the increasing

need for our unique efforts to strengthen governance

based on the Corporate Governance Code, and it was

shared among all the Directors.

The Board of Directors will fully examine issues identified

in the assessment for further improvement of the functions

of the board, and follow up on the issues as part of the

assessments in the next term and thereafter.

Effectiveness Assessment of the Board of Corporate

Auditors

We introduced self-assessment of the effectiveness of the

Board of Corporate Auditors in FY2019. The main aims

are to assess their audit activities, reflect assessment

results in the audit plan of the following fiscal year and

improve the quality of audits. The results of the

assessment are reported to the Board of Directors.

(1) Implementation method

All the Corporate Auditors discussed and checked the

effectiveness of the board based on a self-assessment

questionnaire survey filled out by each Corporate Auditor.

(2) Main contents of the questionnaire・Effectiveness of their response to the Corporate

Governance Code・ Effectiveness of the three-type audits

・ Effectiveness of the way they respond to misconduct,

such as material legal violation and inappropriate

accounting practices

(3) Outline of results

While the effectiveness of the Board of Corporate Auditors

was found to be maintained, some issues, including one

related to collaboration with group auditors, were identified.

We will reflect the issues identified in the audit plan of the

next fiscal year for further improvement of effectiveness.

ICT governance

Mitsui Kinzoku formed a project team for the

reinforcement of ICT governance of the Group in FY2019.

The team led various activities including the establishment

of ICT-related rules to reduce such risks as cyberattack

and information leak. We will continue to strengthen our

ICT governance mainly through the newly created

Information and Communication Technology Dept.

Regarding Directors’ (excluding Outside Directors)

compensation, trends in the amount of compensation for

one year from the conclusion of General Meetings of

Shareholders, the beginning of the term, are as stated on

the left.

(excluding Outside Directors)

-112.84

（91st）310.47

（92nd）

112.39

（93rd）177.55

（94th）

197

232

154

207

197 197

138 138

34

16

68

July 2016 -

June 2017

July 2017 -

June 2018

July 2018 -

June 2019

Ordinary income（hundred millions of yen)

Compensation

for officers（millions of yen）

■ Base compensation

■ Performance payments

・The ratio of base compensation to performance

payments was changed in July 2018.

・The number of Directors (excluding Outside Directors)

for each term is as follows.

Linkage between the amount of compensation to Directors and ordinary income

91st term: 4, 92nd term: 4, 93rd term: 4, 94th term: 4

July 2019 -

June 2020


Risk management

Mitsui Kinzoku Group is working on the improvement of its risk management organization and system to

enhance its ability to respond to risks that may threaten business and the Group’s continuity.

Our approach

Mitsui Kinzoku Group has identified, from an integrated

perspective, long- and short-term business risks and

business risks in an emergency. These risks potentially

have high financial impact that may threaten business and

corporate group’s continuity. To remove or minimize the

impact of these risks, we are working on the improvement

of the Group’s comprehensive risk management

organization and system in order to enhance our ability to

respond to the business risks.

Risk management system

In 2020, Mitsui Kinzoku Group identified business risks

from a comprehensive perspective and rebuilt the risk

management system which includes planning measures

against the risks, implementation, and review. Initiatives

based on the system will be reviewed by the Board of

Directors at least annually and as needed.

The Group’s risk management is managed by the

Senior Executive Officer who serves as the head of

Corporate Planning & Control Sector. Units assigned to

be in charge of each type of risk act as a secretariat,

under which relevant units or sites provide their

cooperation.

Measures against COVID-19

Mitsui Kinzoku Group classifies large-scale infection and

large-scale natural disaster as risks that can become

urgent when they emerge. If these risks emerge, we put

the human lives first and strive for protecting our assets,

maintaining supply chains, and achieving the early

recovery and continuity of operations in accordance with

the Group’s emergency response rules.

The spread of COVID-19 has caused major restrictions

on our operations in some overseas sites of the Group,

but we are striving to minimize the impact on our business

through our appropriate emergency risk management.

Since COVID-19 began to spread worldwide in January

this year, we have immediately taken measures to prevent

infection, such as wearing face masks, disinfecting

workplaces, restricting employees’ movement, and urging

office workers to work from home, based on the basic

policy of human life first. We have tightened the measures

in phases in line with the heightening of the alert level in

each country. In the meantime, as the spread of infection

was judged as an emergency situation that may have a

huge adverse impact on our business, we have set up a

countermeasures headquarters headed by President to

address the crisis in a way that matches the changing

situation.

Measures to prevent the spread of infection

(February 2020-)・ Office workers are urged to work from home as a

general rule.・Working hours are staggered and temperature

checking before commuting is made mandatory. ・ Employees’ overseas and domestic travel is prohibited

in principle.・Meetings, training, and other events are suspended or

conducted online.・ Online recruiting

・We follow the guidelines established by each country

to prevent infection.

Business continuity plan (BCP)・ The effectiveness of the existing BCP has been

examined and the BCP has been modified in response to

COVID-19.・ Products for which production is affected due to

government regulations and disrupted supply chains are

produced at another backup site (while the BCP is

activated).・ Operations have been suspended at multiple sites in

Japan by utilizing the Employment Adjustment Subsidy

program.

Temperature checking at the entrance （Malaysia）


It has been four years since I was appointed Outside Director at

Mitsui Kinzoku. During these years, I have seen many changes

at the company. One major change is the computerization of the

internal infrastructure. Much work was processed on a paper

basis previously but has been shifted to the use of electronic

databases. As can be seen in some business units, the

personnel in manufacturing sites are beginning to rely on their

database, rather than their experience, when making decisions.

The other major change is R&D. The direction of research

investments has become clearer than four years ago under the

initiative of Vice President Nou. I can feel that the company is

becoming more future-oriented, and this is undoubtedly

enlivening young researchers’ spirits. Researchers generally

tend to prefer doing everything by themselves for their research,

but in the case of promising research, they are supposed to

collaborate from an early stage with the staff promoting

commercialization. At Mitsui Kinzoku, the R&D function and the

manufacturing operation interact with each other from an early

stage of the Stage-Gate process to advance projects. I think this

is a very good approach.

Needless to say, there is no business without customers. R&D is

meaningless unless its progress matches the speed required by

customers. The sales force knows such customer needs. If the

speed required by customers and the direction in what they want

to do are not shared with the R&D function, R&D efforts may not

lead to commercialization.

In addition, the company’s technologies alone cannot produce

anything. It is important to exploit good external technologies by,

for instance, utilizing venture capital. I think this is worth taking a

little risk for. We are currently gaining experience and beginning

to achieve a balanced use of our own and external technologies.

Material manufacturers have the power to change the world. If

young researchers at material manufacturers like us proactively

anticipate the needs of parts manufacturers and develop

materials, the results can be amazing products. Correctly

identifying and meeting the needs of the times can result in the

creation of a world-leading product in the field.

Micro Thin, an extremely-thin copper foil, is a good example.

This invention has become a successful business for us today.

This is thanks to R&D achievements and knowledge

accumulated through our predecessors’ painstaking efforts. If

researchers at the company look into the future when developing

something, it, of course, does not guarantee success but is no

doubt more likely to lead to the creation of a world-leading

product.

We are currently developing a number of promising

technologies at present, but there are various risks that need to

be addressed for their commercialization. Winning the

competition is not easy. To win, we must keep sowing seeds

while looking into the future. But when doing so, we also must

decide the best time to harvest. It is of great importance to keep

closely watching market growth and plan the rollout of the

product at the most effective timing.

As the advance sharing of information with the Board of

Directors has become a common practice, it has become easier

for Outside Directors to keep updated on projects. For instance,

we can get information on projects in their early stages at open

labs, and when they reach a commercialization stage, we are

given more specific details during officer training. As I myself am

an expert in engineering, I can provide technical opinions in

different research stages. Other Directors can also make

comments from a business management perspective. Because

the Board of Directors is the final decision-making body, they

inevitably spend much time deliberating matters required by law

to be resolved. However, Directors are now given opportunities

to receive information and have discussions in advance,

facilitating the board to make much more informed, final

decisions.

In declining organizations, the opinion “why change something

that is going well?” is often voiced. Such organizations tend to

reject any extra change or idea that could make things better. To

avoid this, external advice is important for the execution of

business. My role at Mitsui Kinzoku is to offer opinions based on

my experience and expertise which reflect the current situation of

the company.

As the chair of the Compensation Committee, I will also work

hard to optimize the compensation system to keep everyone

motivated at work. It is hoped that Executive Officers will think

more about their successors from a longer-term perspective,

rather than just focusing on their own tenures.

Sowing seeds

with a view to future needs

MATSUNAGA MorioOutside Director

Postdoctoral fellow at the University of Tennessee in 1977. After serving

as a professor of engineering, he was the president of Kyushu Institute of

Technology from 2010 to 2016. Since June 2016, he has been an outside

director of the Company.

When I was appointed Outside Corporate Auditor in 2013, I was

amazed by the broad range of businesses Mitsui Kinzoku is

involved in.

As mining resources are almost depleted in Japan, it is only

natural for the company to make inroads into various business

domains in search of new opportunities. However, I had not

known that the business lineup includes even electrolytic copper

foils and catalysts until I became directly involved in the company.

I also realized that the employees are very earnest. I felt strongly

that they are behind-the-scenes people underpinning the

ceaseless supply of materials.

This behind-the-scenes environment is familiar to me because it

is similar to the environment in which I grew up. My father was

doing civil engineering work at an electric power company and

involved mainly in dam construction for hydropower plants. The job

may not have been a major one at an electric power company, but

I thought it was an essential job that builds a foundation on which

the company can continue its business. I was proud of my father.

The same can be said about a prosecutor, which I spent many

years working as. Legal work can hardly be seen from outside.

Soon after I became a prosecutor, I was told by a senior

colleague that a prosecutor’s job is like cleaning a ditch; when a

problem occurs in society, we must somehow clean it up.

Although it is difficult to see from outside what prosecutors do,

their job is indispensable for society. And so is the job of Mitsui

Kinzoku. I feel that my current job at this company is an

extension of the path I have been on in my life.

I am sometimes asked what changed after I became Outside

Director from Outside Corporate Auditor.

Outside directors are responsible for building a robust system

without such flaws that may be pointed out by corporate auditors,

while corporate auditors’ job is to hold directors to account in the

case that there is any deficiency in the system.

As is well known, outside directors do not engage in the

execution of operations. Outside directors are, under the current

corporate law system, expected to contribute to the sound

management of the company by properly monitoring the

directors’ execution of operations. While their functions partly

overlap those of corporate auditors, their standpoint is totally

different from that of corporate auditors as they check the

company’s internal control on the execution side.

As the chair of the Internal Audit Committee, I am also involved

in audits conducted by the Internal Audit Department. Internal

audits are becoming increasingly important. The best practices

of both internal audits and Corporate Auditor audits and the

establishment of an effective internal control system constitute

the foundation of proper governance.

A corporate auditors’ job is similar to a prosecutors’ job. Internal

audits at companies have a creative aspect as their goal is not

just to find deficiencies but to help improve the system for the

better. They are even expected to help create a system that

“prevents mud from building up in the ditch in the first place.”

Each Director of the board at Mitsui Kinzoku has a distinctive

specialty, such as technology or R&D, and extensive business

experience. I try to offer opinions based on my knowledge and

experience as a lawyer. From my experience as a prosecutor, I

believe that checking to prevent any problem from occurring is

really important.

I know many shareholder litigation cases involving other

companies. To never allow such cases to happen at Mitsui

Kinzoku, I always think about what we need to watch out for to

ensure proper execution of operations. Governance and

compliance are the backbone of all business operations. We

need the strong backbone to maintain sound and effective

corporate management.

I am also the chair of the Nomination Review Committee. As

with the Internal Audit Committee, this committee is also a place

where lively discussions take place.

Decisions on to whom we should entrust the company’s future

cannot be made by an outside person alone. In order for an

outside person to make such decisions, there must be an

appropriate system that allows the person to access the

necessary information that can be used as a basis for decision

making. During the past seven years at Mitsui Kinzoku, and

since when I was an observer of the Nomination Review

Committee, I have had opportunities to meet many people on

such occasions as audits in various business locations. These

opportunities have allowed me to build up a fairly good amount

of information that may be useful for decision making. Needless

to say, as an Outside Director, I always ensure fairness in

personnel selection. I will also ensure appropriate decision

making by exchanging information with people at the company.

Mitsui Kinzoku must be led by capable personnel who are

motivated to support the company throughout their lives. This

company has an adequate system in place for developing such

personnel.

Fateful encounter

behind the scenes

MIURA MasaharuOutside Director

Appointed the prosecutor in 1975. Served as the Immigration Bureau

Director of the Ministry of Justice and the Public Prosecutor General of the

Fukuoka High Public Prosecutors Office. Registeredas a lawyer in 2011.

Outside auditor of the Company since 2013, and he has been an outside

director of the Company since 2019.



Occupational health and safety

Mitsui Kinzoku Group holds that occupational health and safety is essential for business continuity.

We provide a safe worksite environment not only for our employees

but also for cooperative companies, contractors, and visitors to plants.

Policy and management system

Mitsui Kinzoku Group is committed to creating a safe and

comfortable work environment. This is based on our

Basic Policy on Health and Safety, in which it states that

“ensuring the health and safety of all people working for

Mitsui Kinzoku Group is the most important element for

conducting business activities.” We also believe that the

development of a corporate culture that places health and

safety first will lead to increasing productivity and

reducing operational and business risks, and even to

strengthening our relationship of trust with employees

and solidifying our business foundation in the medium to

long term.

Environmental and Safety Management System

President

Chief Environmental and Safety Officer

Environmental and Safety Supervisory Manager

(General Manager of the Environmental

and Safety Dept.)

Chief Environmental and Safety Administrator

(Senior Executive Officer of the sector)

Supreme Safety and

Environmental Meeting

Chief Environmental

and Safety Administrator

(Head of site)

(Business Sectors

(Operation sites)

Health and safety management system

Mitsui Kinzoku Group adopted the occupational health

and safety management system, OHSAS 18001, for

major sites. Currently, we are working to sequentially

change this to ISO 45001 certification. For small-sized

sites, we developed an internal certification system.

At each site we work to realize an upward spiral motion

by going through the PDCA cycle in accordance with the

management system. Improvements to the issues

identified by the review are incorporated into measures

such as risk assessments and health and safety training.

We implement internal safety audits both in Japan and

overseas in order to confirm the operational situation of

the management system at the manufacturing sites. The

internal safety auditing body checks for compliance with

laws and regulations, such as regarding the notifications,

inspections, and measurements, in addition to pointing

out hazardous places and following up on improvements

made.

Health and safety training

Mitsui Kinzoku Group conducts health and safety training

for employees regularly to increase their level of

awareness of health and safety, ensure thorough

compliance with health and safety regulations, and

cultivate a corporate culture that places health and safety

first.

Promotion of the lockout system

Mitsui Kinzoku Group defines the “President’s policy on

Important health and safety issues” every year that raises

key initiatives for the following year. The President’s policy

for 2020 gives priority to preventative management. As

one of the actions to achieve this, a lockout system has

been introduced within the Group.

Occupational accidents could occur caused by human

errors, such as accidently switching on a machine whose

Training for instructors of the lockout system

Purposes

Expand knowledge on health and safety across the Group (Knowledge required for each position, key initiatives in the year, good practices, latest trends）

Promote compliance with safety rules and improve risk perception at manufacturing sites

Major training programs

・ New employee training・ Rank-based safety training・ Laws and regulations lecture・ Hands-on training at other companies・ Lecture by an external lecturer・ Training for instructors of the lock out system*

・ ”Kiken Yochi” activity(hazard prediction) ・ Experiential risk training・ Risk assessment training・ Safety communication activity・ Safety equipment training・ Emergency training(fire/earthquake）

＊ Newly introduced in 2019

operation has been suspended for cleanup, refueling,

inspection, repair, adjustment, construction, or other work.

The lockout system is a system that shuts off and locks the

power source of mechanical devices to prevent

occupational accidents that could occur due to erroneous

operation and protects the safety of workers.

To introduce the lockout system, a promotion project

team made up of members from the Environment & Safety

Department and technical and machinery managers of

each site was launched in FY2018. In FY2019 the lockout

standard was established as the standard of operation of

the system. Sixty managers of the sites have been trained

as instructors, who, in turn, have provided training to

applicable workers at their respective sites, using video

materials created by the company, to ensure that the

lockout system will be operated effectively across all the

sites. Lockout kits including locks have also been made

available for use at the sites gradually to begin the full-scale

operation of the system. From FY2020, we will review and

improve the system regularly to maintain their effective

operation in order to prevent occupational accidents.

Lock out of valves

Health and safety support against COVID-19

Mitsui Kinzoku Group strives to ensure the health and

safety of employees when an emergency occurs. With the

spread of COVID-19 in Japan and overseas, we are

giving first priority to the safety and peace of mind of

employees and taking measures to ensure health and

safety in their workplaces.

Safety performance in 2019

The frequency rate of accidents of Mitsui Kinzoku as well

as domestic consolidated affiliates exceeded the average

for the manufacturing industry as also for the non-ferrous

metal manufacturing industry. We are analyzing the

causes of accidents and taking measures for recurrence

prevention.

For office workers

For workers at manufacturing sites

・ Provided information about health management and mental health

care for working from home

・ Provided information on how to set up an environment for working

from home

・ Took measures to both prevent heat stroke and avoid the “Three Cs.” *

・ Thoroughly disseminated rules for wearing masks in hot environments

・ Shared disaster prevention precautions when restarting operations

・ Emergency measures (fever/heat stroke)

＊ “Three Cs.”: Abbreviation for “closed spaces, crowded places and

close-contact settings”, which is presented by the Ministry of Health,

Labor and Welfare of Japan.

0・

10・

20・

30・

2017 2018 20192015 2016

14

22 23

10

27

12

31

5

21

1

17

0・

10・

20・

2017 2018 20192015 2016

7

1211 11

13

8

1

13 13

6

9

2019

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

0.18

2016 2017 20192015

0.010.02

0.01

0.03

2018

0.03

0.00

1.00

2.00

3.00

2016 20172015

1.39

1.14

1.53

1.23

1.18

2018

Safety performance in 2019

Trends in the number of accidents in sites in Japan

※ Including accidents that occurred in cooperative companies and contractors

Trends in the number of accidents in overseas sites

※ Including accidents that occurred in cooperative companies and contractors

Serious accidents Not requiring days offRequiring days off

Serious accidents Not requiring days offRequiring days off

※ Not including accidents that occurred in cooperative companies and contractors

Frequency rate of accidents

※ Not including accidents that occurred in cooperative companies and contractors

Severity rate of accidents

Mitsui Kinzoku

Domestic consolidated

affiliates

Overseas consolidated

affiliates

The entire Group

Average of manufacturing

industry (Japan)

Average of manufacture

of non-ferrous (Japan)

The values shown in the graph are for the entire Mitsui Kinzoku Group

as a whole

Mitsui Kinzoku

Domestic consolidated

affiliates

Overseas consolidated

affiliates

The entire Group

Average of manufacturing

industry (Japan)

Average of manufacture

of non-ferrous (Japan)


Initiatives for environmental issues

Changes in the Earth’s environment may affect Mitsui Kinzoku Group’s business.

We strive to reduce the negative impact on the environment brought about by our business activities

because we recognize that it constitutes a great risk to our business.

Environmental management

Mitsui Kinzoku Group has established the Supreme

Safety & Environmental Meeting as a place to deliberate

and determine the most important matters related to

safety and the environment. Guidelines and action plans

determined at the Meeting are spread to each site by the

Environmental and Safety Supervisory Manager (General

manager of the Environmental and Safety Dept.) under

the direction of the Chief Environmental and Safety

Officer. Each site that operates under ISO14001 has a

chief person that serves as the person responsible for

managing environmental and safety, and who makes

sure that the required actions are being reliably executed.

Response to climate change

Mitsui Kinzoku Group considers climate change as an

important change in our external environment which may

affect the continuity of our business. As our businesses

include non-ferrous smelting, electrolytic copper foil, and

other businesses with high energy consumption, we are

well aware of the impacts of energy consumption and

greenhouse gas (GHG) emissions from business

activities on climate change. We are also concerned that

these matters may have impacts on our Group’s business

model and financial condition as climate change

accelerates. With these as a background, Mitsui Kinzoku

Group is striving to curb its GHG emissions and review its

energy usage, among other efforts, to reduce risks

associated with climate change. We will also take

advantage of opportunities related to climate change by

creating products that will contribute to the reduction of

GHG emissions and that will meet our environmental

criteria to be certified as our environmental contribution

products.

The Basic Environmental Policy

and the Environmental Action Plan

In 2001, Mitsui Kinzoku Group established the Basic

Environmental Policy and the Environmental Action Plan.

In response to the Paris Agreement as well as the

expansion of ESG investment, we revised the basic

policy and the action plan in 2018, in order to strengthen

our Group's efforts to address environmental issues. In

the action plan, we have assessed the negative impacts

of our business activities on stakeholders in our value

chains and set targets for activities with significant

impacts, on which we will focus our efforts to reduce their

environmental footprint. In 2019, we held briefings to

explain our action plan to ensure that its details are

known throughout the Group. We will also make sure that

plans of each site reflect the targets set in the action plan

to promote their achievement.

1 Establishment and improvement of environmental

management system

2 Reduction of environmental footprint

Establishment and improvement of environmental management system at

each site according to the form and scale of business

・ Prevention of global warming

・ Effective resource utilization and waste reduction

・ Reduction of emissions of environmental pollutants

・ Utilization of renewable energy

・ Appropriate utilization and management of water resources

・ Biodiversity conservation

・ Thorough management of mine closure

3 Development and provision of environmental contribution products

4 Emergency measures

5 Education/public relations/social contribution activities

Development of environmental contribution products and market expansion

Preparation of well-organized emergency manuals for disasters and

accidents and continuous improvements of them

・ Strengthening environmental education

・ Disclosure of environmental information

・ Dialogue with stakeholders

While recognizing the conservation of the global environment as one of

the most important management issues, we will act with consideration for

environmental conservation in all aspects of our business activities.

（Revised in April 2018）

Basic Environmental Policy

[Principle]

1 We will make efforts to prevent environmental contamination and reduce

negative environmental impacts by complying with laws and regulations,

assessing the impact of our business activities on the environment,

including with regard to biodiversity, and setting necessary self-standards.

[Policies]

2 We will improve the organization and system to promote the environmental

preservation activities at each site and company of the Mitsui Kinzoku Group.

3 We will strive to address climate change and reduce wastes and

the emission of environmental pollutants by setting targets.

4 As a commitment to sustainable use of natural resources and conservation

of biodiversity, we will actively promote the introduction of environmentally-

friendly technologies, materials, and the development of environmentally

conscious products and solutions.

5 We will continuously improve the environmental management system

by regularly implementing an audit.

6 We will raise awareness of all people working in the Mitsui Kinzoku Group

by emphasizing the importance of environmental conservation through

environmental education and awareness raising.

These policies apply to all the directors, officers and employees of Mitsui Kinzoku

and its Group companies.

Outline of the Environmental Action Plan

（Revised in April 2018）

Reduction of GHG emissions

In FY2019, we adopted a new calculation method of GHG

emissions in line with the global trend of response to

climate change. The method allows us to reflect our

avoided emissions through the creation and use of

renewable energy. Based on this calculation method, in

June this year, we reset our GHG emissions reduction

target by FY2030 over FY2013 levels at 26%, from the

previous 7%, including avoided emissions from renewable

energy use.

Our activities to reduce GHG emissions are driven by

the Energy-Saving Committee, a group-wide organization

chaired by the Chief Environmental and Safety Officer.

The committee promotes the reduction of energy

consumption and the increase of renewable energy

generation, while also providing education within the

Group and keeping us updated on the trends in Japan

and overseas, in order to achieve our long-term targets.

The committee also reviews its policies as needed based

on the previous year’s performance and deploys them

across the sites.

In April this year, a new dedicated organization for

energy management was established. The organization

specializes in duties related to energy, including identifying

opportunities to save energy and create renewable energy

at each site, investigating and addressing the technical

issues of the sites, and verifying the effects of the efforts

exerted by the sites on the reduction of their energy

consumption. The organization will also collaborate with the

corporate planning department of the company to propose

to the senior management investments necessary for

projects and activities.

0・

500・

1,000・

1,500・

2.000・

2015 2016 2017 2018 2019

1,233.81,337.3

1,758.41,691.7

407.4

402.9

1,247.61,351.0

384.5

1,307.2

1,650.5

Creation of renewable energy

While keeping stable operation of existent renewable energy

facilities, Mitsui Kinzoku Group works to introduce new

renewable energy power generation projects as well as increase

the ratio of renewable energy in its energy usage.

Kamioka Mining and Smelting Co., Ltd. completed the

renewal construction work for five of its ten hydroelectric power

plants in FY2018 and started full-scale operation from FY2019.

The Copper Foil Division has newly installed solar power

generation facilities at the sites in Ageo (Japan) and Taiwan with

capacity of 10kW and 830kW respectively and started operation

in April this year.

0・

100・

200・

300・

400・

2015 2016 2017 2018 2019

（GWh）

352.7

272.3

236.7

376.8

421.8

215.5

111.5 100.4

194.9

291.4

137.2

157.7

133.3

178.8

127.3

3.1 3.0 3.1 3.1

Solar power generation equipment, Taiwan Copper Foil Co., Ltd.

CO2 emissions from energy consumption

Total of

overseas

sites

（thousand t-CO2）

Total of

domestic

sites

※ Emission amounts from overseas sites have been

added to the total amount starting FY2017.

※ We have received an independent practitioner’s assurance

for the figures for FY2019 in this information to which is

attached.

※ Figures for CO2 emissions from energy consumption

were calculated using emission factors derived in a manner

conforming to the “Act on Promotion of Global Warming

Countermeasures.” CO2 emissions derived from purchased

electricity in Japan were calculated using the latest basic

emission factors of electric power suppliers. For emission

factors overseas, the per-country emission factors “CO2

emission factors from electricity” reported by the

International Energy Agency (IEA) were used.

[Fiscal]

Total power generation using renewable energy

Total Hydraulic Geothermal Photovoltaic

[Fiscal]


Prevent air and water pollution

Each manufacturing site of Mitsui Kinzoku Group monitors

the following in accordance with laws, regulations and

ordinances and voluntary standards: Sulfur oxide (SOx)

emissions produced on the combustion of fossil fuels

containing sulfur, nitrogen oxide (NOx) emissions from

boilers, incinerators and other combustion equipment, and

particulate matter, as well as water quality including BOD

and COD which indicate the level of organic material in

wastewater. We work on gathering and managing the

monitoring results from each site, and sharing the

initiatives and the technologies within the Group.

Appropriate utilization and management of water

Mitsui Kinzoku Group strives to reduce and recycle water

used in the business operations. Water-related risks that

could have an impact on our business have not become

apparent as of today, but we will advance efforts to

evaluate water-related risks from multiple perspectives

that include physical risks, such as the drying up of water

resources and the lack of sufficient amounts of water, as

well as regulatory risks related to the use of water. These

efforts will also help us reduce the risks in our business.

The amount of the circulated water usage through

reusing and recycling was 30,967 thousand m3. The total

amount of water use was 44,446 thousand m3, which is

11.3% less than the previous year.

Reduction of chemical substance emissions

Each manufacturing site of the Group files the release and

the transfer amount of chemical substances to the

government under the Act on Confirmation, etc. of

Release Amounts of Specific Chemical Substances in the

Environment and Promotion of Improvements to the

Management Thereof (Law concerning Pollutant Release

and Transfer Register [PRTR] ). The management of

hazardous chemical substances contained in products

has become an essential requirement. We also respond

to the guidelines for chemical substances contained in

products, such as the RoHS Directive and the REACH

regulations required by customers.

We aim to reduce the emission amount of

environmental pollutants in accordance with the

Environmental Action Plan, including our overseas sites.

We continuously strive to collect and replace chemical

substances that may cause environmental pollution. Thus

we focus on reducing and removing use of such chemical

substances from our products.

Initiatives to reduce waste

We strive to reduce the amount of waste generated in our

business activities, and also conduct efforts to develop

technology toward reusing and recycling.

In the Environmental Action Plan revised in 2018, we

are committed to reducing the generation of waste

throughout the Group and set a target basic at each

business site.

Of the amount of byproducts in FY2019, 44% within

Japan and 9% overseas were recycled and used either

within or outside of our Group.

Use of recycled raw materials

Mitsui Kinzoku Group works on the recycling of waste by

using resources as effectively as possible. During this

process, it is essential that we establish and improve

separation and purification technologies in accordance

with the materials, as well as make technological

improvements and renew existing manufacturing

equipment for each production process. At the same time,

we develop and intensify a network for collecting recycled

raw materials.

Development and release of environmental

contribution products

According to the Environmental Action Plan, a group-wide

team was established to develop the environmental

contribution product program in 2019. The team has

discussed the basic direction of the program and decided

how it will be operated.

Under this program, we conduct lifecycle assessments

for products of our Group to assess their positive and

negative impact on the environment and society

throughout their lifespan from raw materials to final

product disposal. Products that meet certain criteria are

certified as environmental contribution products. The

program aims at expanding the development and release

of certified products as solutions to environmental and

social issues, such as the reduction of GHG emissions,

conservation of ecosystems and resources, and

improvement of quality of life, to enhance sustainability of

our business.

Breakdown of water use (FY2019)

Other freshwater

Seawater

thousandｍ3

Groundwater

(including underflow water)

Rainwater

Industrial water

(supplied from offsite)

Tap water

43.8%

1.2%

16.0%

6.9%

21.0%

44,446

1.1%10.1%

Surface water

(rivers and others)

＊ Partially changed the classification method since FY2019.

56.9%

0.8%

39.6%63,936

0.9%

1.7%

Sewage and others

Discharged

into sea

Discharged

into rivers

thousandｍ3

Breakdown of wastewater (FY2019)

others

Injected into deep wells


Revised the amount of wastewater for FY2018 disclosed last year

from 48,194 thousand m3 to 74,700 thousand m3.

・10,000

・5,000

・0

・15,000

・20,000

・25,000

839.0 857.0

19,775.8 1,941.1

7,554.0 0.5

・100

・0

・200

・300

・200

・100

・0

・300

・400

・500

136.1

259.7

76.0 60.1

104.8 154.9

104.9

472.2

202.2

21,716.9

7,554.5

1,696.0

（ｔ）

198.2

462.0

101.5

3.9

10.2

3.4

（ｔ）

BOD load

COD load

Soot and dust

NOX emission

SOX emission

Emissions to the water (FY2019)

Emissions to the atmosphere (FY2019)

Reused(for the same purpose)

Amount of circulated water usage (FY2019)

Recycled

Reused（for different purposes）

Sites in Japan Overseas sites



（thousand m3）

＊ Changed the calculation method since FY2019.

59.7%

25.1%

2,067.7

10.2%

3.8%

1.2%

Breakdown of usage by type of raw material (FY2019)

Unused products,

intermediate products

and parts manufactured

or processed by other

companies

Materials recycled from waste

of products once used

thousand tons

Unused products,

intermediate products and

parts manufactured or

processed in the Group

518 thousand tons

212 thousand tons

79 thousand tons

Processing stage defective articles

and processing losses

24 thousand tons


Rivised the total amount of raw materials for FY2018 disclosed

last year from 1,390.0 thousand tons to 2,119.0 thousand tons.

1,235 thousand tons

Unused natural

resources

such as ore

404.3

451.2

0・

100・

200・

300・

400・

2015 2016 2017 2018 2019

87.1 99.1 120.4 114.9

500・ 458.3

93.0

2015 2016 2017 2018 2019

0・

1,000・

2,000・

3,000・

1,828 1,978

2,435

2,104.3

1,889.2

615 550 551

223.8 311.7

1,042.0 943.2

0.0 0.0

released transferred

Volume of chemical substances released and transferred

(tons/year)

Amount of waste generation (thousand tons)


Sites in Japan

Overseas sites released transferred

＊ Added the amounts of overseas sites from FY2018.

＊ Revised the values for sites in Japan for FY2018 disclosed

last year.

[Fiscal]

[Fiscal]

＊ Added the amounts of overseas sites from FY2017.

＊ The major waste of overseas sites is tailings generated from mines.


Compliance Respect for Human Rights

Compliance management system

Mitsui Kinzoku Group ensures that all executives and employees are fully aware of compliance. The

General Manager of the Corporate Planning Department is responsible for group-wide compliance and

the Legal Department takes initiative in enforcing it.

The situation on compliance is monitored as part of audits by the Internal Audit Department under the

Internal Audit Committee which is directly controlled by the Board of Directors. The Internal Audit

Department shares the audit results with the board members.

Code of Conduct

Mitsui Kinzoku Group considers compliance as not only being compliant with the rules and regulations,

but also being compliant with social norms, corporate ethics, common sense, and morals that may not

necessarily have defined codes but expected by society.

The Code of Conduct defines the common values that are shared by all executives and employees.

The Code is available in local languages and distributed to all sites. The Legal Department has

compiled the “Compliance Guidebook” which explains main points in practicing the Code. The

guidebook is translated into local languages in corporation with local staff members and distributed to

overseas sites.

Compliance trainings

Our compliance programs are included in new employees training, regular rank-based trainings and

trainings for newly appointed directors and auditors for affiliate companies. We also hold compliance

trainings with local lawyers at overseas sites. In addition, we conduct seminars specialized for specific

topics. In FY2019, we held a compliance seminar at one site in Vietnam. In Japan, seminars on

information management and “Act Concerning Special Measures for Correcting Practices Impeding

Consumption Tax Pass-on, etc.” were held at each site.

Mitsui Kinzoku Hotline

Mitsui Kinzoku Group sets a whistle-blower system for internal stakeholders and a consultation desk for

external stakeholders. All stakeholders can report compliance violations such as anti-competitive

practices, corruption/bribery, human rights abuse, and negative impacts on the environment. We secure

the anonymity of whistleblowers and they are protected from unfair treatment.

All executives and employees can report a concern either to the company’s office or to the external

law firm through Mitsui Kinzoku Hotline (MHL). MHL is widely disseminated among them through

compliance trainings and the Compliance Guidebook. We also set a whistleblowing system for our

affiliated companies. The system is consigned to a law firm in China and is available in Chinese.

For external stakeholders including suppliers, we set up the Compliance Consultation Desk on our

website.

Reported issues are regularly passed on to Corporate Auditors, with the anonymity of the reporter

ensured, and comprehensively reported to the Board of Directors.

Prevent anti-competitive practices and corruption/bribery

Article 4 of the Code of Conduct stipulates “Fair Business Activities.” The Compliance Guidebook

specifies fair business activities and requires all executives and employees to implement them: the

establishment and implementation of a system that ensures compliance with the Antimonopoly Act,

appropriate procurement, maintaining fair and transparent relationships, and prohibition of bribery and

corruption.

In FY2019, there were no reports of punitive legal action taken against Mitsui Kinzoku with respect to

anti-competitive practices and bribery.

The human rights policy and the human rights

standards

Mitsui Kinzoku Group approaches human rights issues

based on our Human Rights Policy. In July 2019, we

defined our “Human Rights Standards” as our approach

to major risks and prioritized stakeholders who could

potentially be affected in our businesses. This Human

Rights Standard serves as a code for our human rights

due diligence. We will further strengthen our efforts to

address human rights issues by establishing detailed

regulations on the Standards.

Human rights training

We are conducting human rights training to increase

awareness of our Group’s Human Rights Policy and

promote the correct understanding of human rights. In

FY2019, we conducted training within Japan in the

rank-based training. We also conducted human rights

training for employees at one affiliated company. With

regards to overseas sites, we conducted human rights

training and gave explanations on the human rights

due diligence toward employees including the persons

responsible for human resources at two sites in

Indonesia and one site in Malaysia. In FY2020, we will

conduct further educational training at major sites

within Asia.

[Human Rights Policy］ [Human Rights Standards]

https://www.mitsui-kinzoku.com/en/csr/society/humanrights/

Addressing human rights

Mitsui Kinzoku Group is implementing due diligence

based on the Human Rights Standard by giving priority

to human rights risks in our businesses and supply

chain, as well as to the mining-specific human rights

risks. Please see the following pages for more details.

Labor relations

Mitsui Kinzoku Group respects freedom of association

and collective bargaining. Mitsui Kinzoku and major

affiliates in Japan have a respective labor unions

under the Mitsui Mining & Smelting Workers Union.

Based on the union shop agreement, all general

employees become members of the labor unions.

About half of the other consolidated affiliates in Japan

have labor unions.

Among global consolidated affiliates, 12 affiliates

have labor unions. A labor-management council and a

labor-management round-table conference are

regularly held to communicate with workers. In

FY2019, no strikes or lockouts lasting more than a

week occurred in Mitsui Kinzoku Group.

[Supply chain management］ Page 48-49

[Mining business] Page 50

Human rights due diligence

In FY2019 we conducted the human rights due

diligence using a self-check sheet (SAQ) regarding all

employees, including non-regular employees and

indirect employees at three sites among the major

sites in Japan and at three sites overseas. We

assessed SAQ results and conducted on-site surveys

and hearings.

As a result, we did not find any major risks,

including any forced labor or child labor risks. For

areas that were found to require improvements, we

provided feedback and implemented corrective

measures. The due diligence will be newly performed

at sites of the consolidated domestic subsidiaries and

major sites within Asia during FY2020.

＜Main areas that were improved＞

・ Lecture on labor management for employees

promoted to management positions （at overseas sites)

※ Information on labor unions at several sites is unavailable

due to legal requirements.

6,317

66%

7,439

49%

13,756

57%

Total employees

Coverage rate

Employees covered by collective bargaining agreements

4,161 3,655 7,816

Sites in Japan Overseas Total


Supply chain management

Responsibility for our supply chain

Mitsui Kinzoku Group recognizes that negative social and

environmental impacts in our Group’s supply chain may

pose risks for our business. We will fulfill our responsibility

by implementing initiatives for sustainability in the supply

chain according to the requests from our stakeholders.

The Procurement Policy

Mitsui Kinzoku Group respects the globally recognized

codes and guidance, such as the United Nations Global

Compact. We formulated the Mitsui Kinzoku Group

procurement policy in which we declare to fulfill our social

responsibilities in human rights and labor, health & safety,

ethics, and on the environment, based on ensuring legal

compliance throughout our procurement activities. The

procurement policy consists of the basic procurement

policy as our basic commitment and the procurement

guidelines that gives specific instructions for executing the

basic procurement policy. Detailed items in the guidelines

follow the objectives of the RBA＊Code of Conduct.

Response to emergency in our supply chain

Mitsui Kinzoku Group is working to manage procurement

risks to ensure continuous operation even in an

emergency. In 2020, the spread of COVID-19 has

affected production and logistics operations of

manufacturing sites in our supply chain due to lock-down

and other restrictions. To address procurement risks, we

are regularly checking and reporting the conditions of

supply from suppliers to watch out for any risk of delivery

delay or supply disruption. In the case that there is any

risk of delay or disruption, we are swiftly taking measures

such as switching to another manufacturing site of

supplier, procurement from multiple suppliers, searching

for stock on the market, and adoption of alternatives, to

minimize the impact on our production lines.

Supplier due diligence

Mitsui Kinzoku Group conducts supplier due diligence to

mitigate risks in our supply chain. We request suppliers to

implement our procurement policy and assess their

implementation status in the supplier due diligence.＊ RBA ＝ The Responsible Business Alliance

Responsible minerals sourcing

As a corporate group in the minerals supply chain, Mitsui

Kinzoku Group promotes responsible minerals sourcing.

Along with the heightened global interest in responsible

minerals procurement, relevant risks are expanding. The

scope of target risks is expanding to environment and

human rights issue, target areas are widening to

CAHRAs*4 and other minerals such as cobalt and silver

are included as target minerals. Mitsui Kinzoku Group is

addressing such emerging demands by working in close

partnership with industry groups and other organizations,

such as the RMI*5. In October 2019, we formulated the

“Responsible Mineral Sourcing Policy” as a

comprehensive policy for our mineral sourcing, which

covers the “Conflict Minerals Policy” *6.

With regards to the tantalum smelting business, based

on the RMAP*7 by the RMI, we have been receiving third

party audits every year since 2011 and have been

acquiring RMAP Conformant status. We are also a

member of ITSCI*8, a program for achieving due diligence

in the tantalum mineral supply chain and engaging with

our suppliers.

In the smelting business of gold or silver, we defined

the “Gold and Silver Supply Chain Policy” and are

performing initiatives in accordance with the LBMA*9 ’s

guidance that is based on the OECD Guidance.

Regarding the target suppliers selected according to the

LBMA’s guidance, we conduct supplier evaluation every

year by risk investigation and assessment, such as the

check of the origin of mineral sourcing and the

transportation route. An independent third party certifies

that all the processed gold and silver in our plants have

been sourced from areas that are not associated in any

way with the conflict zones. The results of this audit are

reported to the LBMA. The report of guarantee issued by

the auditing company, and the report submitted to LBMA,

are disclosed on our website.

For non-smelting business activities, we participate in

the Responsible Minerals Trade Working Group by JEITA

(Japan Electronics and Information Technology Industries

Association) and engage with downstream companies in

the supply chain, as well as global initiatives such as RMI

through JEITA.

＊6 Conflict Minerals Policy : Mitsui Kinzoku Group’s policy on the way it responses to the issue of conflict minerals as defined in the U.S. Dodd–Frank Act. Under

this policy, we are committed not to use any conflict minerals sourced from the Democratic Republic of the Congo or nine surrounding countries, which are a source

of funds for armed groups accused of human rights abuses and violence.

Result of supplier SAQ in FY2019

42565％25％

10％

The SAQ was completed by 425 suppliers (80%) by

FY2019. Of these suppliers, those ranked “C” were

found to be underperforming particularly in the areas

of ethics and the environment.

Suppliers meeting in Thailand (Mitsui Kinzoku ACT Corporation)

suppliers

B rank(middle risk)

A rank(low risk)

C rank(high risk)

Supply chain management system

The supply chain management system is formulated as

follows: The senior executive officer in charge of supply

chain is appointed as chief person responsible for our

procurement. The Supply Chain Committee of the Group

has been organized under the chief person, which

consists of the representatives of each department.

Senior Executive Officer

in Charge of Supply Chain

Procurement manager

of each division or group

company

Supply Chain Committee

Members elected from

each procurement dept.

IGATA HiroshiSecretariat

CSR Office

Buyer or person in charge

of procurement of each

division or group company

Medium- and long-term target（the first cycle from FY2017 to the end of FY2020）

Rate of implementation of a Self-Assessment

Questionnaire (SAQ) to the critical suppliers：100%

Notification of the procurement policy;

request for the implementation of the

policy in suppliers’ operations

All suppliers*1

Overview of our due diligence (scope/measures)

＊1：Including—in addition to raw material suppliers— indirect materials

suppliers such as temporary staff agencies, contractors, outsourced

services, carriers, warehouses, and equipment suppliers.

・Receipt of the signed agreement form

to our procurement policy

・Notification of the procurement policy;

request for implementing the policy

Critical suppliers*2

Our procurement staff

and others in charge of

procurement operations

[Performance in FY2019］

・Explained about the procurement policy in our Group:

180 participants・Notified the procurement policy: 4,929 suppliers

・Received the singed agreement form: 511 critical

suppliers・Conducted supplier SAQ: 425 critical suppliers

(including 97 indirect materials suppliers)・SAQ completion rate among critical suppliers (progress

on the target): 80%・Implemented selection criteria for new suppliers: 4 trial

suppliers

[Plan for FY2020］

・Achieve 100% of SAQ completion rate among the

critical suppliers ・Interview with C-ranked suppliers of SAQ and take

necessary corrective actions・Analyze SAQ results and risk assessment

・Set the new target for FY2021 to FY2024

・Notify the procurement policy to our suppliers and

receive the singed agreement form the critical suppliers・Introduce the selection criteria for new suppliers

・Assessment by utilizing the Self-

Assessment Questionnaire (SAQ) *3

・Assessment of implementation of the

policy in the human rights due diligence

＊2：Suppliers with a critical impact on our Group’s business, which meet

the following criteria:

(1) Top 80% of suppliers by our procurement value

(2) Suppliers supplying products that have no alternatives or

strategically important parts/components

(3) Suppliers operating in regions in which CSR risk is considered high

＊3 : A questionnaire with 46 questions prepared in accordance with our

procurement guidelines

＊4 CAHRAs : Conflict Affected and High-Risk Areas

＊5 RMI : Responsible Minerals Initiative

＊7 RMAP : Responsible Minerals Assurance Process

＊8 ITSCI : International Tin Supply Chain Initiative

＊9 LBMA : The London Bullion Market Association

Mining business

Mitsui Group first started mining operations in the Kamioka area in 1874, and ever since, Mitsui Kinzoku has

been in the mining business for more than 140 years. We currently have our own developed mines in operation

in Peru: the Huanzala Mine and the Pallca Mine. In Japan, many of the mines have already suspended or

terminated operations, and we are continuing to manage these suspended or closed mines.

Relationships with the local communities

around the mines

We recognize that the mining business has a particularly

large impact on the surrounding environment and the

local communities. As such, based on the mining-specific

risks as recognized by such institutions as the ICMM

Principles and SASB, we strive in our efforts to establish

a relationship of co-existence and mutual prosperity with

the local communities, and to be respectful of human

rights. Since FY2017, we have been conducting annual

surveys on human rights and environment at the mines

for which we hold an investment ratio of more than 50%,

using a self-assessment check sheet for sites engaged in

mining activities.

We also place importance on our engagement with the

local communities around the mines, and are continuing

to address the needs of the communities, such as by

developing infrastructure, providing educational aid, and

offering support for agriculture and livestock. In FY2019, we signed an agreement with Llamac Village, a local

community near the Pallca Mine, regarding

comprehensive local support to be provided by the

company until 2022. Under this agreement, we

implement various support projects, including bridge and

road repair and guidance on artificial insemination

techniques for cattle.

Migration and resettlement

We manage human rights risks, such as the relocation of

indigenous people and local residents, for the mines in

which our investment ratio exceeds 50%. None of these

mines are located and operated on land owned by

indigenous people or in their neighboring areas. No local

residents were forced to relocate to another area due to

the development of these mines.

Artisanal and Small-scale Mining (ASM)

There are no ASM activities in the operation areas of the

Huanzala Mine, Pallca Mine and the Akeshi Mine

(Kagoshima, Japan). Although we found ASM activities in

a neighborhood located outside of the Huanzala Mine

operating area, we confirmed that the discovered ASM

activities do not pose a risk to our business.

Grievance mechanism

Compania Minera Santa Luisa that operates the

Huanzala Mine and the Pallca Mine holds meetings with

the local government and the community organizations

on an as-needed basis. These meetings are held to listen

to complaints and opinions from the local community and

to resolve the raised issues. There is also a grievance

mechanism system to address conflicts between the

company and local residents that could affect the

operation of the mines. In the event of such a conflict, a

discussion with local residents is held with the attendance

of a third party, such as the Ministry of Energy and Mines

of Peru. No such conflicts occurred in FY2019.Details of the group-wide approach are described on

page 46.


24-hour water quality monitoring at all drains

Construction of a debris barrier as a road improvement （Near Llamac Village）

Appropriate management of water

The Huanzala Mine and Pallca Mine manage the

drainage of water in accordance with the EIA (Estudio

Impacto Ambiental = Environmental impact study) and in

compliance with the relevant legislation. For the Huanzala

Mine, where acidic water is generated in the mine due to

an abundance of sulfide of iron in ore, we focus

particularly on thorough neutralization treatment of the

water. We continue to promote these and other efforts by

utilizing ISO14001. The flotation plant at the Huanzala

Mine is also advancing efforts to recycle water and striving

to reduce the amount of water being used.

Wastewater management in Huanzala Mine

・ Acid mine drainage is gathered and processed centrally

・ Neutralization treatment at the mine-attached plant

・ Maintain a pH level within the range of effluent standards with 24-hour monitoring

・ Monthly water quality testing at 14 nearby locations

Neutralizationof acid water

Management at the drains

Environmental monitoring

・ Analyze the concentration of heavy metals in drained water every three days

Appropriate management of the tailings dam

In the flotation process, slurry type wastes called tailings

are generated. The facility to storage “tailings” is called

“tailings dam”. An accident at the tailings dam could have

an enormous impact on the surrounding environment

and community. Mitsui Kinzoku Group regards the

leakage incidents of tailings dams as one of the major

risks in the mining business and manages tailings dams

in accordance with applicable technical guidelines and

manuals. The amount of tailings for FY2019 was 471,041 tons*.

Initiatives to conserve biodiversity

The areas surrounding the Huanzala Mine and Pallca Mine,

which are situated at an elevation of over 3,000 meters, are

home to flora and fauna that are unique to that particular

environment. Both mines practice underground mining, so

they have limited impact on the surface above the grounds.

However, in order to minimize the effects of mine

development and operations, we make sure to process the

acidic water properly, and also conduct environmental

baseline surveys and bio habitat surveys. From 2019, due to

the construction work to expand the tailings dam, we have

conducted the transplant of the wetland vegetation group

(bofedal) at the Huanzala Mine, which has been performed in

partnership with experts and affiliated government agencies.

In addition, since 2018, we have been distributing pamphlets

to the local residents on animal and plant protection, thereby

providing information on initiatives being implemented toward

the preservation of biodiversity.

* Ores mined at the Pallca Mine are being processed at the flotation

plant at the Huanzala Mine, and therefore, the amount of tailings at

the Huanzala Mine includes the amount originating from the Pallca

Mine.

１ 13

Overview of tailings dam management

Technical policies of the ministerial decree defining technical

standards of mining facilities (The Ministry of Economy, Trade

and Industry)

・ Monitoring of seepage level and water quality

(in-house expert / once a year to twice a month *)

・ inspection tour (in-house expert / once a year to twice

a month*)

・ 12 of the 13 dams have extremely low risks of major collapses

or downstream damages, even in the event of a massive-scale

earthquake

・ One tailings dam was found to be non-conforming by an

evaluation in FY2019 and is scheduled to be reinforced against

earthquakes in FY2020

＊The frequency is appropriate to the risk of each tailings dam

・ Monitoring of seepage level and water quality

(in-house expert / monthly)

・ Seepage level monitoring and tilt measurement

(outside experts / every three months)

Technology guidelines and manuals

（The Ministry of Energy and Mines）

No stability problems, even if the area is hit by a major

earthquake of a level that only happens once every

500 years

Country

Number of dams

Management Guidelines

Approaches to safety

Result of

stability evaluations

Peru Japan

＊ Nippon Caserones Resources Co., Ltd., which became an affiliate company based on the equity method (investment ratio of 32.2%) from FY 2020, is operating

the Caserones Copper Mine in Chile through SCM Minera Lumina Copper Chile. The scope of disclosure for this report is for mines in which our investment ratio

exceeds 50%.

Management of suspended and closed mines

Even for mines that have been suspended or closed,

wastewater processing and disposal management

continue to be performed in compliance with the Mine

Safety Act and related environmental laws. We are

managing the maintenance of the tailings dams and the

former mine entrance, conducting neutralization treatment

of acid mine drainage that includes heavy metals, and

performing the monitoring of water quality. We also visit

and check the area, as well as perform environmental

audits, on a regular basis in order to make sure that the

mines are being properly managed.

Closure plan

In the mining business, we have drawn up closure plans

of mines subject to applicable laws, and guarantee or

accumulate expenses for closure to minimize the impact

and risk after closure.

Iwaizumi Town,

Iwate

Iwate Mine

Kushikino Mine

Akeshi Mine

Hashima Mine

Yuhsui Town, Kagoshima

Ohnoyama Mine

Izumo City, Shimane

Udo Mine

Ohda City, Simane

Iwami Mine

Hida City, Gifu

Kamioka Mine

Ono City, Fukui

Nakatatsu Mine

Ichikikushikino City,

Kagoshima

Minami kyushu city,

Kagoshima

Ichikikushikino City,

Kagoshima

※ The amount of accumulated funds for the Akeshi Mine indicated in the table is that

for a tailings dam located at a refinery related to the mine.

Huanzala Mine (Peru)

Palｌca Mine (Peru)

Akeshi Mine (Kagoshima, Japan)

Planned

Planned

Not planned

Closure planMine

8.5million US dollars

2.3million US dollars

249.1million yen ※

Amount of guaranteed/accumulated

expenses （FY2019)

Mines that are in operation and suspended in Japan

Mines in operation (including those partially operating)

Suspended mines

List of material issues with the commitments, the performance in FY2019 and the plan for FY2020.

01

02

03

04

05

06

07

08

09

Materiality Policies

［Commitment］Ideal Goals Plan for FY2019 Performance in FY2019 and self assessment Implementation plan for FY2020

◎

◎

○

○

◎

〇

〇

〇

(Same as 07)

Progress of Material Issues

MITSUI KINZOKU Integrated Report 2020 5352 MITSUI KINZOKU Integrated Report 2020

Related SDGs

［Organizational Governance］Strengthen ofcorporate governance

Full enforcement of compliance

Information management

Spread CSR throughout the Group

［Human rights］Human rights due diligence

Prohibition of child labor/forced labor

［ Labor Practices ］Diversity

Employee engagement

Occupational health and safety

Corporate

Governance

Guidelines

Code of Conduct

Code of Conduct

Basic CSR Policy

Human Rights Policy

Human Rights Policy

Code of Conduct

Basic Policy for

Human Resources

Development

Basic Policy on Health

and Safety

Implementation of the

Corporate Governance Code

and enhancement of

deliberations by the Board of

Directors

Spreading of compliance

awareness group-wide

Establishment of a

management system for

confidential information at

sites beside priority sites

Establishment of the CSR

promotion system and each

site’s taking the initiative

Understanding of the actual

situation of the Group’s sites

and addressing human rights

risks through human rights

due diligence

Improvement of the work

environment so that all

employees can play an

active role

Creation of workplaces

where employees feel

fulfilled in their work

Ensuring fundamental safety at

all sites and training employees

to improve compliance with rules

and increase their risk sensitivity,

eliminate repeated disaster by

preventive management of

sharing information of disaster

cases in the Group

△： Not achieved as planned

○： Achieved as planned

◎： Achieved more than planned

（1）Review the implementation of the revised

Corporate Governance Code

（2）Conduct follow-up on the results of the evaluation

on the effectiveness of the Board of Directors

（3） Implement the evaluation on the effectiveness of

the Board of Directors

（1）Conduct compliance seminars at overseas sites

（2）Disseminate information about the Compliance

Guidebook through legal audits and training, and

others

（3）Conduct compliance training for the management

executives, individually to Directors and Auditors

（4） Conduct compliance awareness survey

（1）Make a review of confidential information at

affiliated sites. Discuss what method and system

would be most suitable for each site

（2） Inform all employees of the information

management regulations and their compliance

ensured

（3）Organize and implement rules related to ICT

governance

（1）Conduct the CSR Caravan at major sites in Asia

（1）Continue training on human rights (including

prohibition of child labor/forced labor) and also conduct

it at sites in Asia

（2）Conduct human rights DD at major sites in Japan

and major overseas sites

（3） Review the results from the survey conducted in

2018 at mines (more than 50% of investment ratio),

discuss corrective measures and continue the survey

（1）Continue providing training and promoting

information related to diversity issues

（2）Continue career management training

（3） Give shape to details in the report on the

workstyle reform project

（4） Conduct attitude survey toward management-level

employees and female employees, and consider

countermeasures

（5） Enhance measures to give support toward career

development, with a focus on the development of

career consultants

（6） Continuously implement work hour CA in the

committee, performed by the labor and management

at each site

（1）Conduct the 2nd employee satisfaction survey

（1）Deploy the implementation of the lockout system

（2）Promote the horizontal deployment of lessons

learned from disasters at other companies

（3） Provide trainings and thoroughly implement

measures to prevent the reoccurrence of high-risk

disasters

（1）（2） Shortened the Directors’ term of office to one year. A

mutual election method has been introduced for appointment of

the chairperson of the Board. Explained about the lack of female

Directors in Corporate Governance Report

（3）The Board of Directors self-evaluated its effectiveness

（1）Held at one site in Vietnam

（2）Conducted legal audits and followed up the results. Prepared

Compliance Guidebook in corporation with local staff at Vietnam

and Malaysia and distributed them

（3）Conducted as planned. Compliance trainings in regular rank-

based trainings

（4） Conducted as planned

（1）Considered management methods at each site of Engineered

Materials Sector. Informed employees with the methods and

constructed the management system

（2）Continuing at each site

（3） Organized ICT project team, established ICT governance-

related rules and constructed ICT management system

（1）Conducted at two sites in Indonesia and one site in Malaysia

（1）Conducted as planned. Approx. 180 employees joined at

regular rank-based trainings. Approx. 30 employees joined at one

site in Japan. Approx. 60 employees joined at sites in Malaysia

and Indonesia

（2）Conducted as planned. Three sites in Japan and three

overseas sites (Postponed some parts due to COVID-19)

（3） (Details are listed on P.50)

（4） Established “Mitsui Kinzoku Group Human Rights Standards”

（1）Conducted as planned. Diversity trainings at the regular rank-

based training and two sites in Japan. Disseminated information

through in-house magazines and intranet

（2）Conducted in regular rank-based trainings (Postponed some

parts due to COVID-19)

（3）（5） Organized workstyle reform task force. Considered

specific measures in each subcommittee meetings

（4） An attitude survey regarding workplace environment, work life

balance and benefits


（1）Conducted as planned (Details are listed on P.31)

（1）Conducted as planned

（2）Conducted as planned. The occurrence rate of continual

disaster did not decrease

（3） Conducted as planned. Zero serious disaster

・ Review on initiatives for corporate governance code

・ Follow-up the results of effectiveness evaluation of the Board of

Directors (Consider reinforcing our own governance system)

・ Effectiveness evaluation of the Board of Directors

・ Compliance seminars at overseas sites

・ Thoroughly disseminate Compliance Guidebook thorough legal

audits and trainings

・ Compliance trainings individually for Directors and Auditors

・ Reconsider whistle-blower system

・ Check confidential information of other business units and affiliated

companies. Consider the management system corresponding to each

department

・ Hold information management seminar in order to disseminate

information management regulations (including online seminar)

・ Construct information management system focusing on ICT

utilization

・ CSR caravan at major sites in Asia (including online caravan)

・ Human rights training at sites in Japan and Asia

・ Human rights DD at affiliated sites in Japan and major overseas

sites

・ Make detailed rules for “Mitsui Kinzoku Group Human Rights

Standards”

・ Review FY2019 survey results of mines (more than 50% of

investment ratio), consider corrective measures and conduct another

survey

・ Construct diversity training system and reinforce information

dispatching scheme

・ Continue career management trainings and consider enriching the

contents

・ Consider measures for supporting workplace diversity and career

development. Reflect the results of employee satisfaction survey in the

measures

・ Introduce return to work system and temporary leave system for

employees who follow spouses’ job transfer

・ Continue working time CA by committees by the labor and

management side at each site

・ Analyze the results of employee satisfaction survey in detail and

consider corrective measures

・ Regular employee engagement surveys for new employees

・ Fix the lock out system

・ Promote intrinsic safety of facilities and reinforcing management

systems in order to reduce risks leading to serious disasters

・ Implement intrinsic safety of facilities and preventive management

in order to prevent continuous disasters

［Assessment standards］

10

11

12

13

14

15

16

17

18

19

〇

〇

〇

◎

△

〇

△

○

△

〇


Health management

Develop human resources

［Environment］Reduce GHG emissions

Creation of renewable energy

Sustainable water use

Wastewater management

Sustainable use ofraw materials/resources

Recycling and managementof waste

Biodiversity conservation

Management of mine closure

Basic Policy on

Health and Safety

Basic Policy for

Human Resources

Development

Basic Environmental

Policy

Basic Environmental

Policy

Basic Environmental

Policy

Basic Environmental

Policy

Basic Environmental

Policy

Basic Environmental

Policy

Basic Environmental

Policy

Basic Environmental

Policy

Improvement of the work

environment based on the

stress check survey

Making full use of the abilities

of each employee

Setting Group-level targets

and focusing strategic efforts

Stable generation of

renewable energy at the

existing facilities and

completion of Kamioka

hydroelectric power facilities

Setting and achieving a

target amount of water intake

Setting and achieving a

target water quality

Striving for zero emissions

and development of products

with reduced use of resources

Striving for resource

circulation in the business

activities including recycle-

smelting

Implementation of an action

plan for biodiversity

(Japan)

Development and

implementation of a

management plan for

suspended or closed mines

(overseas)

Works before mines closure

（1）Centrally Control and utilize information on

employees’ health

（2） Prevent sickness in mental health by the utilization

of stress checks

（1）Continue strengthening efforts in the training of new

employees (volunteer training, overseas training)

（2）Further improve training programs regarding

advanced technology, workstyle reform-related issues,

business skills, and others

（3） Continue and improve education toward

management candidates

（4） Strengthen development of global human resources

(promote participation of locally hired staff in the rank-

based training)

（1）Establish a management system for reducing GHG

emissions of the entire Group

（2） Identify the Scope 3 GHG emissions

（1）Determine the status of operations using renewable

energy

（2）Determine the progress of the refurbishment of

Kamioka Hydroelectric Power Station’s facilities.

（3） Study the issuance of CO2 credits

（1）Monitor the total amount of water intake, the amount

of recycled water, and the amount of reused water by

water source

（2）Set intensity targets for water

（1）Monitor the amount of wastewater and water quality

by destination of discharged wastewater and manage

targets

（2）Encourage acquisition of Pollution Control Manager

Certification and improvement of skills of qualified

employees

（3）Conduct key environmental audits for wastewater

management

（1）Set a target ratio of recycled raw materials used

（1）Set an individual target for reduction in generated

waste

（1）Develop a specific action plan for efforts

（2）Continue studies and protection of rare species in

the development areas

(Japan)

（1） Develop and implement a plan for maintenance and

management of suspended mines

（2） Develop and implement plans for construction work

at each site to strengthen facilities against torrential rain

（3） Conduct follow-up studies on closed mines (sites for

where the studies were not performed in 2018)

（4） Conduct voluntary studies at one site on the stability

analysis of the tailings dam

(Overseas)

（5） Implement works before closing a mine along the

mine closing plan

（1）Prepared centralized management system of employees’ health information

at major sites in Japan

（2）Shared the results of stress check and next action plan with Health and

Safety Committee and Executive Council

（3） Selected as the 2020 Certified Health and Productivity Management

Organization Recognition Program (Mitsui Kinzoku non-consolidated)


（2）Held a lecture on advanced technology. Expanded trainings on effective

working style and business skills


（4） Conducted as planned (Postponed some parts due to COVID-19)


（2）Grasped the amount of CO2 emissions by waste treatment. Answered CDP

(grade D)


（2）Completely adapted to Feed-in Tariff (FIT). The facilities are operating

（3）Conducted as planned. Decided to give priority to energy reduction and

deferred issuance of credits from the result of the study

（1）Surveys at each site on the amount of water intake by resources, the effect

of business activities on water resource, and the amount of recycled and

reused water

（2）Collected the information on current status of the whole group

（1） Current situation survey on business sites areas in order to set a goal for

water quality management

・ Grasped the amount of discharged water

・ Grasped the upper limit regulations of the amount of discharged water

・ Grasped the quality of discharged water



（1）Grasped the rate of usage of recycled materials. Disseminated the

Environmental Action Plan including related information

（1）Grasped the amount of waste and the situation of waste reducing initiatives.

Disseminated Environmental Action Plan including related information

（1）Understood issues and current status of initiatives at each site. Internal

trainings as a previous step toward creating action plan

（2）Conducted as planned (Huanzala Mine, Peru)

(Japan)


（2）Conducted as planned (six constructions)

（3） Conducted as planned (24 mining areas)

（4） Conducted as planned (one survey)

(Overseas)


・ Centrally manage and utilize employees’ health information

・ Improve workplace environment by utilizing stress check results in order to

prevent sickness in mental health

・ Enrich new employees training program, try online trainings

・ Renew training curriculum regarding workstyle reform and business skills

・ Trainings for executive candidates through regular rank-based trainings and

external trainings. Improve the quality of internal trainings for executive

candidates and follow-up trainings for those who have finished the trainings

・ Support overseas sites to establish training system

・ Consider implementation method for training programs (including online)

・ Disseminate Mitsui Kinzoku Group’s target for reducing CO2 emissions

from energy consumption and set goals for each site

・ Expand scope 3 boundary

・ Monitor the operation status of renewable energy facilities

・ Consider and plan new renewable energy projects

・ Grasp the amount of water intake by resources

・ Check the effects of business activities on water resources at each site

・ Grasp the amount of recycled and reused water

・ Management goal setting for each site

・ Grasp the amount of discharged water

・ Grasped the upper limit regulations of the amount of discharged water

・ Grasp the quality of discharged water

・ Set management goals at each site according to regional characteristics

・ Set a target ratio of recycled materials used for each business site

・ Set a target for reduction in generated waste for each business site

・ Collect the information on issues and current status of initiatives at each site

・ Make action plan for initiatives referring to practices and guidance

documents inside and outside Mitsui Kinzoku Group

・ Conserve rare living things of developing areas (Huanzala Mine, Peru)

(Japan)

・ Maintenance and management of suspended mines

・ Reinforcement construction of facilities for heavy rain

・ Take countermeasures so that nobody enters the mine mouth of closed

mines

・ Earthquake resistance construction to improve stability of tailings dam

(Overseas)

・ Remove sediments at former Waste Rock Dumps

・ Tree planting at former Waste Rock Dumps

※ Overseas initiatives may be postponed due to COVID-19


［Commitment］Ideal Goals Plan for FY2019 Performance in FY2019 and self assessment Implementation plan for FY2020Related SDGs

20

21

22

23

24

25

26

27

28

△

〇

○

〇

○

○

○

○

○


Development of standards for

environmental contribution

products and setting of

targets

Anti-corruption and anti-

bribery awareness

Compliance with the

Antimonopoly Act, the

Subcontract Act, and laws

related to anti-competitive

practices

Fulfill responsibility to reduce

risks in supply chains

Spreading awareness and

maximum utilization of

intellectual property group-

wide

Change to a company that, in

cooperation with stakeholders,

creates a succession of new

products utilizing our “material

intelligence”

Utilization of the Mitsui

Kinzoku’s smelters network

and increase of the collection

of recycle-materials,

processing capacity, and the

number of processing metals

Establishment of the ACT

brand by ensuring “Safety,”

“Comfort” and “Amazing

Performance" using our

manufacturing intelligence

Local communities

understand and trust our

business activities through

social contribution activities

Basic Environmental

Policy

Code of Conduct

Code of Conduct

Procurement Policy

Conflict Minerals

Policy

President’s policy

regarding intellectual

property

Basic CSR Policy

Basic CSR Policy

Basic CSR Policy

Code of Conduct

Environmental contribution products

［Fair Operating Practices］Anti-corruption and anti-bribery

Prohibit of anti-competitive practices

CSR procurement

Intellectual property

［Consumer Issues］Co-creation in markets for new engineered materials

Materials stewardship(recycle-smelting)

Supply productsfor sustainable mobility

［Community involvement］Contribution to local communities

（1）Establish an organization to implement programs

for environmental contribution products

（2）Design internal certification

（1）Prepare and use a written agreement on

prohibition of corruption and bribery for the sites in

Taiwan and other Asian countries

（2）Assess a sample of a basic transaction from CSR

perspectives

（3） Develop a manual on anti-bribery

（1）Continue legal audit and feedback at all sites of

the Group

（2）Continue training related to fair operating

practices

(Details are listed on P.48-49)

（1） Support surveys on new projects

（2） Secure intellectual property rights and use

intellectual property

（3） Provide education on intellectual property and

establish an intellectual property infrastructure

(improvement of the specifications)




（1）Social contribution activities take root in the Group.

Promoting activities according to plan at each site

（1）（2）Organized a team and discussed an original system for

environmental contribution products. Decided the outline of system

operation

（1）Conducted as planned (Taiwan). Follow-up at the sites in China


（3） Hearings for manual preparation

（1）Completed the audit of approving authorities at all sites in Japan

and follow the audit results. Legal audit at three sites in Japan, one

overseas site

（2）Antimonopoly law seminar for Mitsui Kinzoku Group. Held seminars

on “Act Concerning Special Measures for Correcting Practices

Impeding Consumption Tax Pass-on, etc.” at the sites in Japan


（1）Supported Business Planning Dept. of Engineered Materials Sector

（2）Acquired 107 patent rights / year

（3） Held basic skills training 10 times (for beginner, middle, and

advanced class)

（4） Reconstructed system according to business improvement




（1）Conducted as planned. The number of sites that engaged in

contribution to community increased by 10% from FY2018

・ Start training Life Cycle Assessment practitioners

・ Prepare and use a written agreement on anti-bribery at the sites in

Indonesia and Vietnam

・ Prepare an anti-bribery manual

・ Legal audit and follow the results for target sites

・ Hold training on fair business activities (including online)


・ Support investigation on new business (Business Creation Sector)

・ Apply for patents that can be highly proved to be infringed

・ Continue and improve training on intellectual property (for working

from home)

・ Stably operate the intellectual property management system for

working from home




・ Consider next action plan according to the situation of community-

contributing initiatives at each site


［Commitment］Ideal Goals Plan for FY2019 Performance in FY2019 and self assessment Implementation plan for FY2020Related SDGs

(And other goals)

2020

473,109

13,037

9,318

1,566

33,999

28,970

10,125

36,107

(34,833)

1,274

537,119

173,255

157,296

233,070

27.43

2,884.68

70

255.2

2.5

0.9

1.8

1.22

30.7

2014

441,046

25,743

13,656

3,662

27,160

24,178

5,795

38,003

(72,128)

(34,125)

503,825

169,867

156,280

218,500

64.12

2,816.71

40

62.4

1.5

2.4

2.9

1.26

31.9

2013

417,219

16,557

16,194

9,910

22,601

23,952

5,867

38,058

(47,208)

(9,150)

438,072

155,049

154,397

180,372

173.51

2,565.60

30

17.3

1.1

7.1

3.8

1.13

33.5

2010

392,364

27,881

25,639

13,899

15,186

26,119

4,941

19,610

(17,823)

1,787

416,541

121,300

121,375

191,514

243.20

1,948.20

30

12.3

1.4

13.5

6.2

1.34

26.7


11-Year Summary of Selected Financial Data

※ The company conducted a share consolidation to change its share unit from 10 shares to 1 share on October 1, 2017. Past figures have been calculated

assuming the share consolidation took place in 2009.

Consolidated Financial Highlights

Net sales

Operating income

Ordinary income


Capital expenditures

Depreciation

Research and Development expenditures

Cash flows from operating activities

Cash flows from investing activities

Free cash flows

Total assets

Net assets

Shareholders' equity

Interest-bearing debt

Per share of common stock

EPS（Earnings per share）※

BPS（Net assets per share）※

Cash dividends per share ※

Dividend payout ratio

DOE（Dividend on equity ratio）*

Financial Ratios

ROE（Return on equity）

ROA（Return on assets）

Net D/E ratio

Equity ratio

Yen

Yen

Yen

％

％

％

％

％

2011

446,487

30,208

34,010

21,160

21,829

22,707

4,623

22,545

(26,286)

(3,741)

411,027

134,452

140,817

171,459

370.25

2,203.82

60

16.2

2.4

17.8

8.2

1.17

30.6

2012

431,058

20,903

19,168

11,531

29,226

22,781

4,967

30,992

(31,039)

(47)

413,106

140,175

148,840

169,263

201.78

2,306.12

30

14.9

1.2

9.0

4.7

1.15

31.9

2015

473,274

31,835

21,096

17,237

28,906

25,146

6,265

37,245

(26,418)

10,827

538,646

207,106

170,994

210,390

301.81

3,449.10

60

19.9

2.0

9.6

4.0

0.98

36.6

2016

450,553

11,137

(11,284)

(20,926)

28,446

25,066

6,575

50,397

(26,395)

24,002

484,800

179,566

146,469

191,733

(366.41)

2,968.55

60

-

2.3

(11.4)

(2.2)

1.03

35.0

2017

436,330

38,461

31,047

18,674

37,718

24,414

7,163

24,218

(38,300)

(14,082)

518,981

184,421

161,713

207,421

326.98

3,046.41

70

21.4

2.5

10.9

6.2

1.10

33.5

2018

519,215

49,529

11,239

(708)

40,509

26,634

8,015

52,436

(40,376)

12,060

518,705

178,652

157,271

208,418

(12.40)

2,945.20

70

-

2.5

(0.4)

2.2

1.11

32.4

2019

497,701

18,222

17,755

4,691

36,119

27,964

9,523

40,696

(44,843)

(4,147)

523,315

179,673

159,207

216,878

82.15

2,977.84

70

85.2

2.5

2.8

3.4

1.15

32.5

Millions of yenMitsui Mining and Smelting Company, Limited and Consolidated Subsidiaries

Years ended March 31

＊ In calculating the DOE (Dividend on Shareholders' Equity), we have changed the shareholders' equity from the average of the term to the shareholders'

equity at the end of the term. Along with this, the figures for the previous years have been changed this time.

Financial ReviewThe forward-looking statements contained in this section represent the Company’s judgment as of March 31, 2020.

Financial position

Total assets increased ¥13.8 billion from the previous fiscal year-end

to ¥537.1 billion. The change was mainly attributable to increases of

¥11.1 billion in cash and deposits and ¥9.7 billion in inventories, offset

by decreases of ¥7.2 billion in notes and accounts receivable.

Total liabilities increased ¥20.2 billion from the previous fiscal year-

end to ¥363.8 billion. This change was mainly attributable to

increases of ¥16.1 billion in short- and long-term borrowings, straight

bonds and commercial paper, and ¥2.3 billion in notes and accounts

payable, among others.

Total net assets decreased ¥6.4 billion from the previous fiscal year-

end to ¥173.2 billion. This decrease mainly reflected the recording of

¥1.5 billion in profit attributable to owners of parent and ¥1.8 billion in

deferred gains on hedges, net of tax, partially offset by a decrease of

¥3.9 billion in dividends of surplus, ¥4.2 billion in foreign currency

translation adjustments and ¥0.9 billion in net unrealized losses on

securities, net of tax, among others.


Overview of fiscal 2019

On a consolidated basis, the Company's net sales during fiscal 2019,

ended March 31, 2020, decreased ¥24.5 billion (4.9%) from the

previous fiscal year, to ¥473.1 billion. Operating income decreased

¥5.1 billion (28.5%) from the previous fiscal year to ¥13.0 billion. This

was mainly because of a decrease in sales volume of core products in

each business, despite a favorable factor in the launch of feed-in tariff

operation for the hydroelectric power generation service in Kamioka in

the Metals Business.

Ordinary income decreased by ¥8.4 billion (47.5%) year on year to

¥9.3 billion. This was mainly attributable to the recording of investment

losses on equity method amounting to ¥1.4 billion.

In extraordinary items, the Group recorded extraordinary losses such

as a loss on disposal of property, plant and equipment of ¥2.1 billion.

After accounting for taxation expenses and profit attributable to non-

controlling interests, the profit attributable to owners of parent

decreased by ¥3.1 (66.6%) billion to ¥1.5 billion.

Cash flows

Net cash provided by operating activities was ¥36.1 billion, a

decrease of ¥4.5 billion from the previous fiscal year. This was

primarily attributable to cash provided of ¥5.7 billion in profit before

income taxes, ¥28.9 billion in depreciation and amortization, an

increase of ¥10.2 billion in notes and accounts payable and an

increase of ¥5.2 billion in income taxes refund. This was partially

offset by an increase of ¥12.4 billion in inventories, ¥6.7 billion in

income taxes paid, among others.

Net cash used in investing activities amounted to ¥34.8 billion, a

decrease of ¥10.0 billion from the previous fiscal year. Expenditures

mainly consisted of ¥29.4 billion for the acquisition of property, plant

and equipment and other assets and ¥3.3 billion for purchases of

investment securities.

Net cash provided by financing activities totaled ¥11.2 billion, an

increase of ¥8.3 billion from net cash used in the previous fiscal year.

This change was mainly attributable to a ¥17.0 billion increase in

short- and long-term borrowings, straight bonds and commercial

paper, and a ¥3.9 billion payment for cash dividends. As a result of

the above, cash and cash equivalents, including foreign currency

translation adjustments, increased 11.1 billion from the end of the

previous fiscal year to ¥32.6 billion

- Cash flow trends are explained in detail on page 19.

- The changes in major financial indicators are explained in detail on page 20-21.

- See page 22-29 for details on the main business segments.

- Please see page 21 for the forecasts for FY2020 and FY2021.

2019

¥ 36,412

324

2,600

9,022

1,232

23

―

327

2,239

14,761

180,969

122,368

1,025

502

2,775

878

927

ー

3,341

26,404

4,447

162,672

343,641

42,129

22,631

95,069

(622)

159,207

1,607

(1,976)

11,524

(308)

10,847

9,618

179,673

¥ 523,315

2019

¥ 21,536

85,387

5,885

111,753

841

24,110

(179)

249,336

33,711

184,982

385,567

3,768

11,492

57,249

676,772

(486,914)

189,857

53,529

10,833

8

446

5,765

4,625

9,050

(137)

84,121

¥ 523,315

36,334

3,258

16,333

58,098


Assets

Current assets:

Cash and deposits (Notes 5 and 15)

Notes and accounts receivable (Note 15):

Trade

Unconsolidated subsidiaries and affiliates

Inventories (Note 3)

Derivatives (Notes 15 and 16)

Other current assets

Less: Allowance for doubtful accounts

Total current assets

Property, plant and equipment (Note 7):

Land

Buildings and structures

Machinery and equipment

Leased assets

Construction in progress

Others

Less: Accumulated depreciation

Total property, plant and equipment

Investments and other assets:

Investment securities (Notes 4 and 15):


Others

Loans receivable:


Others

Deferred tax assets (Note 14)

Asset for retirement benefits (Note 17)

Others

Less: Allowance for doubtful accounts

Total investments and other assets

Total assets

Liabilities and Net Assets

Current liabilities:

Notes and accounts payable (Note 15):

Trade


Others

Short-term borrowings and commercial papers (Notes 6 and 15)

2020

¥ 32,677

78,523

5,455

121,514

2,167

22,729

(212)

262,856

34,245

187,204

388,292

6,031

12,067

55,277

683,118

(493,993)

189,124

9,429

56,551

―

435

5,174

3,769

9,855

(78)

85,137

¥ 537,119

38,975

2,942

17,881

69,459

Current portion of long-term debt (Notes 6 and 15)

Current portion of lease liabilities

Accrued income taxes

Accrued expenses

Provision for product warranties

Provision for loss on construction contracts

Provision for improvement of business structure

Provision for loss on disposal of inventories

Derivative liabilities (Notes 15 and 16)

Other current liabilities

Total current liabilities

Long-term liabilities:

Long-term debt (Notes 6 and 15)

Lease liabilities

Directors' and corporate auditors' retirement benefits

Deferred tax liabilities (Note 14)

Provision for environmental countermeasures

Provision for preventing environmental pollution

in mineral, mining, and other operations

Provision for loss on litigation

Asset retirement obligations (Note 21)

Liability for retirement benefits (Note 17)

Other long-term liabilities

Total long-term liabilities

Total liabilities

Commitments and contingent liabilities (Note 8)

Net Assets (Note 9):

Shareholders' equity:

Common stock:

Authorized - 190,000 thousand shares in 2020 and in 2019

Issued - 57,296 thousand shares in 2020 and in 2019

Capital surplus

Retained earnings

Less: Treasury stock

190 thousand shares in 2020 and 189 thousand shares in 2019

Total shareholders' equity

Accumulated other comprehensive income:

Net unrealized gains on securities, net of tax

Deferred gains (losses) on hedges, net of tax

Foreign currency translation adjustments

Accumulated adjustments for retirement benefit (Note 17)

Total accumulated other comprehensive income

Non-controlling interests in consolidated subsidiaries

Total net assets

Total liabilities and net assets

2020

¥ 28,727

485

1,986

8,785

1,147

80

2

321

1,423

13,820

186,040

134,883

2,652

598

1,260

803

722

116

3,727

26,776

6,281

177,823

363,863

42,129

22,631

93,159

(623)

157,296

659

(174)

7,275

(322)

7,436

8,522

173,255

¥ 537,119

Consolidated Balance SheetsMitsui Mining and Smelting Company, Limited and Consolidated Subsidiaries

Years ended March 31, 2018 and 2019

Millions of yen

Millions of yen

See accompanying notes to consolidated financial statements.

2019

¥ 5,177

(1,056)

3,917

(2,228)

243

(987)

¥ (111)

¥ 5,066

4,616

449

2019

¥ 497,701

424,325

73,376

55,153

18,222

1,998

(1,605)

875

(2,194)

718

(259)

(467)

17,755

―

64

(1,769)

20

(909)

(2,592)

15,162

8,792

1,191

9,984

5,177

486

¥ 4,691

Yen

¥ 82.15

70.00


Net sales (Note 13)

Cost of sales (Notes 3 and 11)

Gross profit

Selling, general and administrative expenses (Notes 10 and 11)

Operating income

Non-operating income (expenses):

Interest and dividend income

Interest expense

Foreign exchange gains (losses)

Investment losses on equity method

Real estate rent

Other, net

Ordinary income (Note 13)

Extraordinary income (losses):

Gain on sale of investment securities

Gain on sale of property, plant and equipment (Note 12)

Loss on sale and disposal of property, plant and equipment (Note 12)

Insurance claim income

Other, net (Note 12 and 19)

Profit before income taxes

Income taxes (Note 14):

Current

Deferred

Profit

Profit attributable to non-controlling interests

Profit (loss) attributable to owners of parent

Amounts per share of common stock:

Basic earnings (loss) per share (Note 18)

Cash dividends applicable to the year

2020

¥ 473,109

403,460

69,648

56,611

13,037

1,643

(1,749)

(2,241)

(1,429)

708

(651)

(3,719)

9,318

(812)

175

(2,286)

484

(1,084)

(3,523)

5,794

5,267

(1,185)

4,082

1,712

146

¥ 1,566

Yen

¥ 27.43

70.00

Net income

Other comprehensive income:

Net unrealized losses on securities, net of tax

Deferred gains (losses) on hedges, net of tax

Foreign currency translation adjustments

Remeasurements of defined benefit plans, net of tax

Share of other comprehensive income

of associates accounted for using equity method

Total other comprehensive income (Note 22)

Comprehensive income

(Breakdown)

Comprehensive income attributable to owners of parent

Comprehensive income attributable to non-controlling interests

2020

¥ 1,712

(898)

1,757

(4,346)

(36)

(63)

(3,588)

¥ (1,875)

¥ (1,844)

(31)

Consolidated Statements of OperationsMitsui Mining and Smelting Company, Limited and Consolidated Subsidiaries

Years ended March 31, 2019 and 2020 Millions of yenMillions of yen

Consolidated Statements of Comprehensive IncomeMitsui Mining and Smelting Company, Limited and Consolidated Subsidiaries




Common

stock

Balance at April 1, 2018

Cash dividends paid


Effect of changes in accounting period

of consolidated subsidiaries

Acquisition of treasury stock

Change of scope of consolidation

Change in ownership interest of parent due to

transactions with non-controlling shareholders

Net changes of items other than

shareholders' equity

Balance at March 31, 2019


Cash dividends paid





Change of scope of consolidation






¥42,129

¥42,129

¥22,648

(16)

¥22,631

¥93,113

(3,997)

4,691

1,324

(61)

¥95,069

¥(619)

(2)

¥(622)

¥157,271

(3,997)

4,691

1,324

(2)

(61)

(16)

¥159,207

¥13,532

(2,007)

¥11,524

¥(519)

210

¥(308)

¥10,922

(74)

¥10,847

¥10,459

(840)

¥9,618

¥178,652

(3,997)

4,691

1,324

(2)

(61)

(16)

(915)

¥179,673

¥2,606

(998)

¥1,607

¥(4,696)

2,720

¥(1,976)

2019

Net

unrealized gains

on securities,

net of tax

Deferred

gains(losses)

on hedges,

net of tax

Foreign

currency

translation

adjustments

Accumulated

adjustments

for retirement

benefit

Total

accumulated

other

comprehensive

income

Non-controlling

interests

in consolidated

subsidiaries

Total

net assets

(Note 9)

Total

shareholders‘

equity

Treasury

stock

Retained

earnings

Capital

surplus

Common

stock

Millions of yen


Consolidated Statements of Changes in Net AssetsMitsui Mining and Smelting Company, Limited and Consolidated Subsidiaries



Cumulative effects of changes in accounting policy

Restated balance

Cash dividends paid











Cumulative effects of changes in accounting policy

Restated balance

Cash dividends paid










¥42,129

42,129

¥42,129

¥22,631

22,631

(0)

¥22,631

¥95,069

155

95,224

(3,997)

1,566

366

¥93,159

¥(622)

(622)

(1)

¥(623)

¥159,207

155

159,363

(3,997)

1,566

366

(1)

(0)

¥157,296

¥11,524

11,524

(4,249)

¥7,275

¥(308)

(308)

(13)

¥(322)

¥10,847

10,847

(3,410)

¥7,436

¥9,618

9,618

(1,096)

¥8,522

¥179,673

155

179,829

(3,997)

1,566

366

(1)

(0)

(4,507)

¥173,255

¥1,607

1,607

(948)

¥659

¥(1,976)

(1,976)

1,801

¥(174)

2020

Net

unrealized gains

on securities,

net of tax

Deferred

gains(losses)

on hedges,

net of tax

Foreign

currency

translation

adjustments

Accumulated

adjustments

for retirement

benefit

Total

accumulated

other

comprehensive

income

Non-controlling

interests

in consolidated

subsidiaries

Total

net assets

(Note 9)

Total

shareholders‘

equity

Treasury

stock

Retained

earnings

Capital

surplus

Millions of yen

Number of shares

of common stock

issued (Thousands)

57,296

57,296

Number of shares

of common stock

issued (Thousands)

57,296

57,296

2019

12,805

18,504

(22,699)

(403)

10,000

(10,000)

(3,997)

(1,147)

(188)

2,873

(567)

(1,840)

22,377

(2)

990

¥ 21,524

2019

¥ 15,162

27,964

―

(2)

1,706

271

2,194

18

58

(1,998)

1,605

7,764

2,366

(2,764)

(644)

53,705

2,875

(1,623)

(15,268)

582

425

40,696

(1,339)

―

―

(35,280)

260

(1,313)

(6,645)

(525)

(44,843)


Cash flows from operating activities:


Depreciation and amortization

Loss on impairment of fixed assets (Note 19)

Loss (gain) on sale of property, plant and equipment, net （Note 12）

Loss on disposal of property, plant and equipment （Note 12）

Foreign exchange losses (gains)


Increase (decrease) in allowance for doubtful accounts

Increase (decrease) in liability for retirement benefits

Interest and dividend income

Interest expense

Decrease (increase) in notes and accounts receivable

Decrease (increase) in inventories

Increase (decrease) in notes and accounts payable

Other, net

Subtotal

Interest and dividend received

Interest paid

Income taxes paid

Income taxes refund

Other, net

Net cash provided by operating activities

Cash flows from investing activities:

Purchases of investment securities

Proceeds from sale of investment securities

Proceeds from sales of shares of subsidiaries resulting

in change in scope of consolidation

Acquisition of property, plant and equipment and other assets

Proceeds from sale of property, plant and equipment

Payments for retirement of property, plant and equipment and other assets

Decrease (increase) in short-term loans receivable, net

Other, net

Net cash used in investing activities

2020

¥ 5,794

28,970

363

(43)

2,154

262

1,429

36

755

(1,643)

1,749

1,540

(12,416)

10,286

(2,657)

36,580

2,131

(1,762)

(6,772)

5,221

708

36,107

(3,315)

39

1,136

(31,412)

624

(1,319)

(40)

(546)

(34,833)

Cash flows from financing activities：

Net change in short-term borrowings and commercial papers

Proceeds from long-term debt

Repayment of long-term debt

Repayment of lease liabilities

Issuance of bonds

Redemption of straight bonds

Cash dividends paid

Dividends paid to non-controlling interests

Other, net

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of year

Effect of exclusion of consolidated subsidiaries

Effect of changes in accounting period of consolidated subsidiaries

Cash and cash equivalents at end of year (Note 5)

2020

12,269

31,271

(26,479)

(714)

10,000

(10,000)

(3,997)

(1,064)

(51)

11,232

(584)

11,923

21,524

ー

(781)

¥32,666

Consolidated Statements of Cash FlowsMitsui Mining and Smelting Company, Limited and Consolidated Subsidiaries

Years ended March 31, 2019 and 2020 Millions of yenMillions of yen



Notes to Consolidated Financial StatementsMitsui Mining and Smelting Company, Limited and Consolidated Subsidiaries


1. Basis of Presenting Consolidated Financial Statements

The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in the Japanese

Financial Instruments and Exchange Law and its related accounting regulations, and in conformity with accounting principles generally

accepted in Japan (“Japanese GAAP”), which are different in certain respects as to application and disclosure requirements of

International Financial Reporting Standards. The accounts of consolidated overseas subsidiaries are prepared in accordance with either

International Financial Reporting Standards or U.S. generally accepted accounting principles, with adjustments for the specified four

items as applicable.

The accompanying consolidated financial statements have been restructured and translated into English (with some expanded

descriptions) from the consolidated financial statements of Mitsui Mining and Smelting Company, Limited (“the Company”) prepared in

accordance with Japanese GAAP and filed with the appropriate Local Finance Bureau of the Ministry of Finance as required by the

Financial Instruments and Exchange Law. Some supplementary information included in the statutory Japanese language consolidated

financial statements, but not required for fair presentation, is not presented in the accompanying consolidated financial statements.

Amounts less than one million yen have been rounded down in the presentation of the accompanying consolidated financial

statements. As a result, the totals in yen shown herein do not necessarily agree with the sums of the individual amounts.

The translation of the Japanese yen amounts into U.S. dollars is included solely for the convenience of readers outside Japan, using

the prevailing exchange rate at March 31, 2020, which was ¥108.81 to U.S. $1. The convenience translations should not be construed

as representations that the Japanese yen amounts have been, could have been, or could in the future be, converted into U.S. dollars at

this or any other rate of exchange.

2. Summary of Significant Accounting Policies

(a) Consolidation

The consolidated financial statements include the accounts of the Company and its 51 significant subsidiaries (the "Companies"). One

subsidiary was excluded from the scope of consolidation from the fiscal year ended March 31, 2020 due to a decrease of its materiality

to the consolidated financial statements. All significant intercompany transactions, accounts and unrealized profits among the

Companies have been eliminated in consolidation. Investments in the 10 significant affiliates which the Company and its subsidiaries

are able to influence, in a material degree, their financial and operating decision-making, are accounted for by the equity method after

the elimination of unrealized intercompany profits. Investments in the remaining unconsolidated subsidiaries and affiliates are not

accounted for by the equity method because of their immaterial effect on the consolidated financial statements. Such investments,

therefore, are carried at cost, adjusted for any substantial and non-recoverable decline in value, and income from such unconsolidated

subsidiaries and affiliates is recognized only when the Companies receive dividends.

In the elimination of investments in subsidiaries, the assets and liabilities of the subsidiaries, including the portion attributable to

minority shareholders, are recorded based on the fair value at the time when the Company acquired control of the respective

subsidiaries.

The consolidation difference between acquisition cost and net assets at the date of acquisition is shown as goodwill and amortized

mainly over five years. Negative goodwill is recognized as profit on the acquisition date.

The balance sheet date of the 7 significant subsidiaries is December 31. As the difference between their balance sheet date and the

consolidated balance sheet date does not exceed three months, they are consolidated on the basis of their financial statements for the

fiscal year ended December 31. We have made necessary adjustments for significant transactions that have occurred in the period

between their balance sheet date and the consolidated balance sheet date.

In addition previously, other 7 subsidiaries were consolidated on the basis of their financial statements for the fiscal year ended

December 31. From the fiscal year ended March 31, 2020, these subsidiaries provided financial statements based on provisional

settlement of accounts as of March 31, for the purpose of a more appropriate disclosure.

The impact of the above changes on profit and loss for 3 months from January 1, 2019 to March 31, 2019 was reflected directly to

retained earnings in the fiscal year ended March 31, 2020. As a result, retained earnings increased by ¥366 million ($3,363 thousand).

(b) Foreign currency translation

Revenues and expenses are translated at the rates of exchange prevailing when transactions are made. Monetary claims and liabilities

denominated in foreign currencies are generally translated into each reporting currency at the rates of foreign exchange prevailing at

the balance sheet dates and the resulting translation gains or losses are included in earnings.

All assets and liabilities of consolidated foreign subsidiaries are translated into Japanese yen at the rates prevailing at their balance

sheet dates and revenues and expenses of consolidated foreign subsidiaries are translated into Japanese yen at the average

exchange rates prevailing during the year. The resulting translation adjustments are shown as “Foreign currency translation

adjustments,” a component of net assets.

(c) Cash and cash equivalents

In the accompanying consolidated statements of cash flows, cash and cash equivalents include cash on hand, demand deposits and

short-term investments with maturities of three months or less from the date of acquisition which have high liquidity and negligible risk of

price fluctuation.

(d) Marketable securities, investment securities and investments in unconsolidated subsidiaries and affiliates other than

those accounted for by the equity method

Securities owned by the Companies are classified into:(1) securities intended to be held to maturity (hereafter, “held-to-maturity

securities”), (2) equity securities issued by subsidiaries and affiliated companies, or (3) all other securities that are not classified as

trading securities or in any of the above categories (hereafter, “available-for-sale securities”).

Held-to-maturity securities are stated at amortized cost. Equity securities issued by subsidiaries and affiliated companies which are

not consolidated or accounted for using the equity method are mainly stated at average cost. Available-for-sale securities with fair

market values are stated at fair market values, and the corresponding unrealized holding gains or losses, net of applicable income

taxes, are reported as a component of net assets. Realized gains and losses on sale of such securities are computed using average

cost or moving-average cost. Other available-for-sale securities with no available fair market value are mainly stated at average cost

(e) Derivative transactions and hedge accounting

The Companies generally state derivative financial instruments at fair value and recognize changes in the fair value as gains or losses

unless they are used for hedging purposes and qualified for hedge accounting.

If derivative financial instruments are used as hedges and meet certain hedging criteria, gains or losses resulting from changes in

their fair value are generally deferred as a component of accumulated other comprehensive income in the consolidated balance sheet,

and charged to income when the related gains or losses on the hedged items are recognized.

All derivative contracts are based on actual demand and not for trading in the short term or for speculation.

For currency swap contracts, interest rate swap contracts, metal forward contracts and fuel forward contracts, the Companies

evaluate hedge effectiveness by comparing the cumulative changes in cash flows or the changes in fair value of the hedged items with

the corresponding changes in the hedging derivative instruments.

The evaluation of effectiveness is skipped for currency forward contracts that are believed to have high hedge effectiveness, such as

in cases where hedging instruments and hedged items share the same important characteristics.

(f) Inventories

Inventories are stated primarily at lower of cost or net selling value based on the following methods:

The Company:

Metals Sector, Catalysts Division

Subsidiaries:

Mitsui Kinzoku ACT Corporation, Kamioka Mining & Smelting Co., Ltd. (except for the metal powders factory), Hachinohe

Smelting Co., Ltd. and others

: First-in, first-out method

The Company:

Copper Foil Division

: Moving average method

The Company:

Engineered Materials Sector (except for Catalysts Division and Copper Foil Division), Affiliates Coordination Strategic Sector

Subsidiaries:

The metal powders factory of Kamioka Mining & Smelting Co., Ltd., Nippon Yttrium Co., Ltd., Mitani Shindo Co., Ltd. and others

: Average method

Overseas subsidiaries

: Average method or first-in, first-out method

(g) Property, plant and equipment

Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment is generally computed by the declining-

balance method based on the estimated durable years of these depreciable assets, except the straight-line method is applied to：(1)

buildings, excluding building fixtures, acquired since April 1, 1998, and building fixtures and structures, which were acquired since April

1, 2016. (2) certain plant facilities of the Company and (3) property, plant and equipment of certain consolidated subsidiaries. The

durable years of these assets generally range from 7 to 50 years for buildings, 3 to 60 years for structures and 2 to 20 years for

machinery and equipment.

Leased assets used under finance leases and capitalized, are depreciated over the lease terms of respective assets by the straight-

line method.

(h) Allowance for doubtful accounts

The Company and consolidated subsidiaries provide an allowance for doubtful accounts in an amount sufficient to cover probable

losses on collection by estimating individually uncollectible amounts and applying a percentage based on historical data to the

remaining accounts.

(i) Provision for product warranties

Reserve for product warranties is provided to accrue estimated costs of repairing products free of charge, based on individually estimated

amounts which are reliably measurable or the amounts computed by the ratio of actual repair costs which correspond to net sales.


(t) Reclassification

Certain prior year amounts have been reclassified to conform to the 2020 presentation. These changes had no impact on previously

reported results of operations or shareholders' equity.

(u) Accounting of consumption tax

Consumption tax generally withheld upon sale, as well as that paid for purchases of goods or services, is recorded as a liability or an

asset, and is excluded from the relevant revenue, costs or expenses.

(Changes in accounting policy)

Certain consolidated subsidiaries overseas which apply U.S. GAAP have adopted Accounting Standards Update (“ASU”) No.2014-09,

“Revenue from Contracts with Customers” from the beginning of the fiscal year ending March 31, 2020.

ASU No. 2014-09 calls for an entity to recognize revenue to depict the transfer of promised goods or services to customers in an

amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Certain

consolidated subsidiaries overseas adopted the method by which the cumulative effect of retrospectively applying this standard was

recognized at the date of initial application.

The impact of applying this standard on consolidated financial statements is immaterial.

(Standards and guidance not yet adopted)

The following standard and guidance were issued but not yet adopted.

- “Accounting Standard for Revenue Recognition” (ASBJ Statement No.29, March 31, 2020)

- “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No.30, March 31, 2020)

(1) Overview

The above standard and guidance provide comprehensive principles for revenue recognition. Under the standard and guidance,

revenue is recognized by applying following 5 steps:

Step1: Identify contract(s) with customers.

Step2: Identify the performance obligations in the contract.

Step3: Determine the transaction price.

Step4: Allocate the transaction price to the performance obligation in the contract.

Step5: Recognize revenue when (or as) the entity satisfies a performance obligation.

(2) Adoption date

The Company will adopt the above standard and guidance from the beginning of the fiscal year ending March 31, 2022.

(3) Effects of the application of the standards

The Company and its consolidated domestic subsidiaries are currently in the process of determining the effects of these new standards

on the consolidated financial statements.

Following accounting standards and guidance are those issued but not yet adopted.

- “Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019)

- “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, July 4, 2019)

- “Accounting Standard for Measurement of Inventories” (ASBJ Statement No. 9, July 4, 2019)

- “Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019)

- “Implementation Guidance on Disclosures about Faire Value of Financial Instruments” (ASBJ Guidance No.19, March 31, 2020)

(1) Overview

In order to enhance comparability with internationally recognized accounting standards, “Accounting Standard for Fair Value

Measurement” and “Implementation Guidance on Accounting Standard for Fair Value Measurement” (together, hereinafter referred to

as “Fair Value Accounting Standards”) were developed and guidance on methods measuring fair value was issued. Fair Value

Accounting Standards are applicable to the fair value measurement of the following items:

- Financial instruments in “Accounting Standard for Financial Instruments”; and

- Inventories held for trading purposes in “Accounting Standard for Measurement of Inventories.”

Additionally “Implementation Guidance on Disclosures about Faire Value of Financial Instruments” was revised and it established new

notes of the breakdowns of every fair value of financial instruments and other.

(2) Adoption date

Fair Value Accounting Standards and guidance will be effective from the beginning of the consolidated fiscal year ending March 31,

2022.

(j) Provision for improvement of business structure

Provision for improvement of business structure is provided to accrue estimated costs of improvement of business structure by

consolidating production facilities and other measures.

(k) Provision for loss on disposal of inventories

Provision for loss on disposal inventories is provided to accrue estimated costs of disposal of inventories, such as by-products and other

materials.

(l) Employees’ retirement benefits

The Companies provided employees' retirement benefits based on the estimated amounts of projected benefit obligation and the fair

value of the plan assets at the balance sheet date. The liabilities and expenses for employees' retirement benefits are determined

based on the amounts actuarially calculated using certain assumptions.

Prior service costs are amortized by the straight-line method over periods of 1 to 5 years which are within the average remaining

years of service of the employees.

Actuarial differences are amortized primarily from the year in which the actuarial differences are incurred by the straight-line method

over periods of 1 to 12 years which are within the average remaining years of service of the employees.

(m) Directors’ and corporate auditors’ retirement benefits

Directors and corporate auditors are generally entitled to receive retirement benefits based on the Companies’ internal rules. Their

retirement benefits are accrued at the amount required to be paid in accordance with the internal rules if the directors and corporate

auditors retired at the balance sheet date.

(n) Provision for environmental countermeasures

With enactment of the legislation about special measures concerning the proper treatment of PCB (polychlorinated biphenyl) waste, the

Company and its domestic subsidiaries provide for environmental countermeasures to accrue estimated cost of disposal of PCB waste.

Furthermore, estimated cost of soil improvement and preventing environmental pollution is charged to this account.

(o) Provision for preventing environmental pollution in mineral, mining, and other operations

Provision for preventing environmental pollution in mineral, mining, and other operations is provided to accrue estimated cost of

preventing the environmental pollution following the termination of use of mineral, mining, and other facilities.

(p) Research and development expenses

Research and development expenses are charged to expenses when incurred.

(q) Accounting for revenues on construction contracts

Recognition of net sales and cost of sales of completed construction contracts

Construction contracts whose outcome can be estimated reliably: Percentage-of-completion method

Other construction contracts: Completion-of-contract method

(r) Income taxes

The Companies recognize tax effects of temporary differences between the financial statement basis and the tax basis of assets and

liabilities. The provision for income taxes is computed based on the pretax income of each of the Companies, with certain adjustments

required for consolidation and tax purposes.

The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of

temporary differences.

The Company has adopted the consolidated tax return system for the calculation of income taxes. Under the consolidated tax return

system, the Company consolidates all wholly owned domestic subsidiaries based on the Japanese tax regulations.

Application of tax effect accounting for the transition from the consolidated tax payment system to the group taxation system

Having regard to paragraph 3 of “Practical Solution on the Treatment of Tax Effect Accounting for the Transition from the Consolidated

Taxation System to the Group Tax Sharing System” (PITF No.39, March 31, 2020), the Company and its domestic consolidated

subsidiaries did not follow paragraph 44 of “Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28, February 16,

2018) but applied provisions of pre-amended tax laws when calculating the amounts of deferred tax assets and liabilities that relate to

transitioning to the group taxation system and related amendments of tax laws for transitioning to the single tax payment system.

(s) Earnings per share, diluted earnings per share and cash dividends per share

Earnings per share is computed based on the weighted-average number of shares of common stock outstanding during the respective

fiscal year.

Diluted earnings per share is not presented as there were no shares with dilutive effects in 2019 and 2020.

Cash dividends per share represent the historical amount applicable to the respective year.

74 MITSUI KINZOKU Integrated Report 2020

(3) Effects of the application of the standards

The Company and its consolidated domestic subsidiaries are currently in the process of determining the effects of these new standards

on the consolidated financial statements.

- “Accounting Standard for Accounting Policy Disclosures, Accounting Changes and Error Corrections” (ASBJ Statement No. 24,

March 31, 2020)

(1) Overview

The objective is to present an overview of accounting principles and procedures used when a relevant accounting standard is unclear.

(2) Effective date

The standards will be effective for the end of annual periods ending on or after March 31, 2021.

- “Accounting Standard for Disclosure of Accounting Estimates” (ASBJ Statement No.31, March 31, 2020)

(1) Overview

The objective is to present financial statement users with information to understand the details of accounting estimate items in financial

statements for the current fiscal year that have a material risk on financial statements for the following fiscal year.

(2) Effective date

The standards will be effective for the end of annual periods ending on or after March 31, 2021.

(Changes in presentation)

(1) Consolidated statements of income

“Reversal of provision for environmental countermeasures” that had been included separately under “Extraordinary income (losses)” in

the previous fiscal year did not exceed ten percent of the total amount of extraordinary income, and has therefore been presented

under “Other, net” under “Extraordinary income (losses)” in the current fiscal year.

“Environmental expenses” and “Loss on disaster” that had been included separately under “Extraordinary income (losses)” in the

previous fiscal year did not exceed ten percent of the total amount of extraordinary losses, and has therefore been presented under

“Other, net” under “Extraordinary income (losses)” in the current fiscal year.

The presentation for the year ended March 31, 2019 was reclassified to reflect this change to the comparative information.

As a result, ¥21 million that was presented as “Reversal of allowance for environmental countermeasures” and ¥(156) million that was

presented as “Environmental expenses” and ¥(336) million that had been presented as “Loss on disaster” and ¥(438) million that had

been presented as “Other, net” under “Extraordinary income (losses)” in the consolidated statements of income for the year ended

March 31, 2019 has been restated as “Other, net” of ¥(909) million.

(Additional information)

Mitsui Kinzoku Group continued business activities while implementing strict measures following the COVID-19 outbreak, but impacts

such as decreased net sales are expected as a result of halted operations at some overseas bases and other factors.

The COVID-19 outbreak will have wide-reaching effects on economies and business activities, and it is difficult to predict such factors

as how it will spread and how long it will take to get under control. Therefore, in estimating the recoverability of deferred tax assets and

other, the Company will consider such things as external information available as of the end of the current fiscal year and assume that

the impact of COVID-19 will continue for a certain period of the year ending March 31, 2021.

MITSUI KINZOKU Integrated Report 2020 75

3. Inventories

Inventories at March 31, 2019 and 2020 consisted of the following:

Write-downs, net of reversal of write-downs recognized during the prior fiscal year, are included in the cost of sales for the fiscal years

ended March 31, 2019 and 2020 respectively as follows:

4. Securities

(a) Acquisition costs and book values of available-for-sale securities with fair value as of March 31, 2019 and 2020 were as follows:

(b) Available-for-sale securities sold for the years ended March 31, 2019 and 2020 were as follows:

5. Amounts of Cash and Cash Equivalents

Amounts of cash and cash equivalents at March 31, 2019 and 2020 were reconciled with cash and deposits as follows:

Merchandise and finished goods

Work in process

Raw materials and supplies

Total

2019

¥36,061

30,392

45,299

¥111,753

2020

¥41,081

29,536

50,897

¥121,514

Cost of sales

Total

2019

¥1,648

¥1,648

2020

¥1,202

¥1,202

Cash and deposits

Time deposits with maturities exceeding

three months from the date of deposit

Total : Cash and cash equivalents

2019

¥21,536

(11)

¥21,524

2020

¥32,677

(11)

¥32,666

Year ended March 31, 2019

Securities whose book value exceeds acquisition cost:

Stocks

Subtotal

Securities whose book value does not exceed acquisition cost:

Stocks

Subtotal

Total

Book value

¥4,348

4,348

1,030

1,030

¥5,379

Acquisition cost

¥2,007

2,007

1,238

1,238

¥3,246

Difference

¥2,341

2,341

(208)

(208)

¥2,133


Securities whose book value exceeds acquisition cost:

Stocks

Subtotal

Securities whose book value does not exceed acquisition cost:

Stocks

Subtotal

Total

Book value

¥2,579

2,579

1,586

1,586

¥4,166

Acquisition cost

¥1,370

1,370

1,870

1,870

¥3,240

Difference

¥1,209

1,209

(284)

(284)

¥925

Total sale amount

Gains

Losses

2019

¥－

－

－

2020

¥39

23

－

Stocks

Stocks

Stocks

Millions of yen

Millions of yen

Millions of yen

Millions of yen

Millions of yen


6. Short-Term Borrowings and Long-Term Debt

Inventories at March 31, 2019 and 2020 consisted of the following:

Long-term debt at March 31, 2019 and 2020 consisted of the following:

The aggregate annual maturities of long-term debt at March 31, 2020 were as follows:

The 0.76% yen unsecured straight bonds due in 2020 were issued on November 28, 2013 by the Company.

The 0.39% yen unsecured straight bonds due in 2020 were issued on December 15, 2015 by the Company.





7. Pledged Assets

Assets pledged as collateral for long-term debt at March 31, 2019 and 2020 were as follows:

Government-owned banks and government agencies,

maturing through 2027 at interest rates ranging from 0.900%

to 2.200% at March 31, 2020:

Secured

Unsecured

Less: Current portion

1,166

－

158,780

36,412

¥122,368

708

－

163,611

28,727

¥134,883

Banks, insurance companies and other financial institutions,

maturing through 2026 at interest rates ranging from 0.200%

to 10.220% at March 31, 2020:

Secured

Unsecured

900

96,714

621

102,282

0.22 % yen unsecured straight bonds due in 2024







2019

¥ －

10,000

10,000

10,000

10,000

10,000

10,000

2020

¥10,000

10,000

10,000

10,000

10,000

－

10,000

Short-term bank loans, generally represented by short-term notes

and bank overdrafts, bore interest at annual rates ranging from

0.310% to 9.432% and from 0.230% to 9.632% at March 31, 2019

and 2020, respectively.

Commercial paper with interest at annual rate of (0.01)% and 0.05%

at March 31, 2019 and 2020, respectively.

2019

¥51,598

6,500

¥58,098

2020

¥44,459

25,000

¥69,459

Year ending March 31,

2021

2022

2023

2024

2025

Thereafter

Total

Millions of yen

¥28,727

25,657

40,140

27,776

38,612

2,696

¥163,611

Property, plant and equipment, net book value

2019

¥7,846

¥7,846

2020

¥7,339

¥7,339

Millions of yen

Millions of yen

Millions of yen

9. Net Assets

Under the Japanese Company Law, the entire amount paid for new shares is required to be designated as common stock. However, a

company may, by a resolution of the board of directors, designate an amount not exceeding one-half of the price of the new shares as

additional paid-in-capital, which is included in capital surplus.

The Japanese Company Law provides that an amount equal to 10 % of cash dividends and other cash appropriations of retained

earnings must be set aside as a legal earnings reserve included in retained earnings until the total amount of capital surplus and the

legal earnings reserve equals 25% of common stock.

The excess of the total amount of capital surplus and the legal earnings reserve over 25% of common stock can be transferred to

retained earnings by a resolution of the shareholders, which may be available for dividends.

The maximum amount that the Company can distribute as dividends is calculated based on the unconsolidated financial statements of

the Company in accordance with the Japanese Company Law.

（a） Shares issued and outstanding

Changes in number of shares issued and outstanding during the year ended March 31, 2019 and 2020 were as follows:

（b）Dividends

Dividends paid for the year ended March 31, 2020 were as follows:

Dividends included in the retained earnings at March 31, 2020 and to be paid in subsequent periods were as follows:

10. Selling, General and Administrative Expenses

Principal items of selling, general and administrative expenses for the years ended March 31, 2019 and 2020 were as follows:

8. Contingent Liabilities

Contingent liabilities at March 31, 2019 and 2020 were as follows:

Notes receivable discounted

Notes and accounts receivable securitized with recourse

Loans guaranteed


Others

2019

¥270

584

116,820

343

¥118,019

2020

¥219

427

107,863

289

¥108,798


Increase during the year

Decrease during the year

Balance at March 31 and April 1, 2019

Increase during the year

Decrease during the year


Shares of common stock

(Thousands)

57,296

－

－

57,296

－

－

57,296

Shares of treasury stock

(Thousands)

188

0

－

189

0

－

190

Approved at the shareholders' meeting held on June 27, 2019

Total

Millions of yen

¥3,997

¥3,997

Approved at the shareholders' meeting held on June 26, 2020

Total

Millions of yen

¥3,997

¥3,997

Freightage related expenses

Salaries

Bonus and retirement pay

Provision for bonuses

Provision for directors' and corporate auditors' bonuses

Retirement benefit expenses

Provision for directors' and corporate auditors' retirement benefits

Provision for product warranties

Depreciation expense

Research and development/Exploration expenses

2019

¥9,758

10,046

2,401

1,610

31

1,307

120

72

2,028

8,232

2020

¥9,794

10,070

2,188

1,703

－

2,114

124

17

2,166

8,508

Millions of yen


12. Explanatory notes on extraordinary profit and loss

(a) Gain on sale of property, plant and equipment

11. Research and Development Expenses

Research and development expenses included in production cost and selling, general and administrative expenses amounted to

¥9,523 million and ¥10,125 million ($93,052 thousand) for the years ended March 31, 2019 and 2020, respectively.

(b) Loss on sale of property, plant and equipment

(c) Loss on disposal of property, plant and equipment

(d) Provisions included in other, net of extraordinary losses

13. Segment Information

The operations of the Companies for the years ended March 31, 2019 and 2020 were summarized as follows:

(a) Overview of reportable segments

"The reportable segments of the Company are those units for which separate financial statements can be obtained among the

constituent units of the Company and which are regularly examined by the Board of Directors for decisions on the allocation of

management resources and for assessing business performance.

The Company has business sectors categorized by products and services in head office, and each business sector plans business

strategies comprehensively and operates business activities domestically and internationally.

As a result, the Company reports four segments: Engineered Materials, Metals, Automotive Parts & Components, and Affiliates

Coordination, based on business sectors categorized by products and services."

(b) Basis for Calculating amounts of net sales, profit or loss, assets, and other items by reported segments

Accounting procedure for reported segments, excluding the handling treatment for converting the income, expenses and assets of

overseas subsidiaries into Japanese currency, is mostly the same as procedures indicated in 2. Summary of Significant Accounting

Policies. The handling treatment for converting the income, expenses and assets of overseas subsidiaries into Japanese currency is

mainly based on anticipated exchange rates at the time budgets were formulated. Profit for reported segments is based on ordinary

income. Sales for inter-segment are based on actual market prices.

Provision for allowance for doubtful accounts

2019

¥21

2020

¥－

Millions of yen



Others

Total

2019

¥655

963

87

¥1,706

2020

¥283

1,256

614

¥2,154

Millions of yen



Land

Others

Total

2019

¥3

46

－

12

¥62

2020

¥－

59

36

35

¥132

Millions of yen



Land

Others

Total

2019

¥4

20

－

39

¥64

2020

¥2

58

67

47

¥175

Millions of yen

Sales:

Outside customers

Inter-segment

Total

Segment profit

Segment assets


Amortization of goodwill and negative goodwill

Interest income

Interest expense

Investment gains (losses) on equity method

Investment for companies accounted for using

the equity method

Increase in property, plant and equipment, and

intangible assets

Engineered

Materials

¥158,950

6,524

165,474

16,608

158,160

10,991

－

201

769

369

3,862

14,395

Metals

¥142,796

23,843

166,640

(6,039)

205,482

9,191

－

279

1,122

(3,349)

29,139

12,054

Automotive

Parts &

Components

¥104,026

－

104,026

4,689

59,321

4,183

－

101

184

－

－

5,013

Affiliates

Coordination

¥89,825

37,079

126,904

4,881

94,536

2,508

－

136

215

753

14,446

2,841

Total

¥495,599

67,447

563,047

20,140

517,500

26,876

－

719

2,292

(2,225)

47,447

34,305

Adjustment

¥2,102

(67,447)

(65,345)

(2,385)

5,815

1,088

－

(419)

(686)

31

(40)

1,814

Consolidated

¥497,701

－

497,701

17,755

523,315

27,964

－

299

1,605

(2,194)

47,407

36,119


Reported segments

Millions of yen

(c) Information on amounts of net sales, profit or loss, assets, and other items by reported segments

Segment information as of and for the fiscal year ended March 31, 2019, which was restated in conformity with reorganization, was as

follows:

(a) Amounts of adjustment are as follows::

Notes：

(b) Segment profit (loss) is adjusted to be consistent with ordinary income (loss) shown on the consolidated statements of operations.

(1) Adjustments of sales to outside customers is the difference mainly in the conversion process to the Japanese currency of sales of overseas

subsidiaries.(The difference between the anticipated exchange rates at the time budgets were formulated and the average exchange rates during the year)

Adjustment to segment profit, which amounted to ¥(2,385) million, consists mainly of ¥(2,084) million for Company-wide costs that do not belong to

any reportable segments, ¥895 million for adjustment of inventories and ¥(1,802) million for adjustment of fixed assets.

Company-wide costs are mainly general and administrative expenses and research expenses that do not belong to any reportable segments.

(2) Adjustment to segment assets, which amounted to ¥5,815 million, consists of ¥(14,642) million for offset of receivables to the corporate administrative

department, ¥(18,432) million for offset of inter-segment receivables, ¥47,822 million for Company-wide assets that do not belong to any reportable

segments and ¥(8,932) million for other adjustment.

Company-wide assets are mainly assets in head office that do not belong to any reportable segments.

Sales:

Outside customers

Inter-segment

Total

Segment profit

Segment assets


Amortization of goodwill and negative goodwill

Interest income

Interest expense

Investment gains (losses) on equity method

Investment for companies accounted for using

the equity method

Increase in property, plant and equipment, and

intangible assets

Engineered

Materials

¥160,673

7,153

167,826

13,394

183,389

11,221

－

248

989

380

4,145

14,929

Metals

¥139,850

21,273

161,123

(1,472)

186,665

9,504

－

496

703

(1,935)

27,154

9,494

Automotive

Parts &

Components

¥90,581

－

90,581

469

56,628

4,308

－

70

181

－

－

4,017

Affiliates

Coordination

¥82,405

27,510

109,916

1,445

89,956

2,609

－

145

216

288

14,336

3,230

Total

¥473,510

55,937

529,447

13,837

516,639

27,643

－

960

2,090

(1,266)

45,636

31,672

Adjustment

¥(400)

(55,937)

(56,338)

(4,519)

20,480

1,326

－

(514)

(341)

(163)

(200)

2,326

Consolidated

¥473,109

－

473,109

9,318

537,119

28,970

－

446

1,749

(1,429)

45,436

33,999


Reported segments

Millions of yen

Segment information as of and for the fiscal year ended March 31, 2020 was as follows:


Loss on impairment of fixed assets

Engineered Materials

¥64

Metals

¥153

Automotive Parts &

Components

¥145

AffiliatesCoordination

¥－

Elimination・Corporate

¥－

Consolidated

¥363


Property, plant and equipment

Japan

¥137,488

Asia

¥38,598

North America

¥6,577

Other Areas

¥7,192

Consolidated

¥189,857


Sales

Japan

¥273,724

China

¥69,893

Asia(Except China)

¥94,734

North America

¥41,790

Other Areas

¥17,559

Consolidated

¥497,701

(a) Amounts of adjustment are as follows:

Notes：

(b) Segment profit (loss) is adjusted to be consistent with ordinary income (loss) shown on the consolidated statements of operations.

(1) Adjustments of sales to outside customers is the difference mainly in the conversion process to the Japanese currency of sales of overseas subsidiaries.

(The difference between the anticipated exchange rates at the time budgets were formulated and the average exchange rates during the year)

Adjustment to segment profit, which amounted to ¥(4,519) million, consists mainly of ¥(3,437) million for Company-wide costs that do not belong to

any reportable segments, ¥(676) million for adjustment of inventories and ¥(535) million for adjustment of fixed assets.

Company-wide costs are mainly general and administrative expenses and research expenses that do not belong to any reportable segments.

(2) Adjustment to segment assets, which amounted to ¥20,480 million, consists of ¥(12,403) million for offset of receivables to the corporate

administrative department, ¥(14,073) million for offset of inter-segment receivables, ¥50,547 million for Company-wide assets that do not belong to

any reportable segments and ¥(3,590) million for other adjustment.

Company-wide assets are mainly assets in head office that do not belong to any reportable segments.


【Related information】

Information by area: Millions of yen


Sales

Japan

¥260,353

China

¥60,193

Asia(Except China)

¥95,655

North America

¥38,502

Other Areas

¥18,404

Consolidated

¥473,109


Property, plant and equipment

Japan

¥137,576

Asia

¥38,217

North America

¥5,148

Other Areas

¥8,182

Consolidated

¥189,124

【Information on loss on impairment of fixed assets by reported segments】

【Information on amortization of goodwill and amortized balance by reported segments】

【Information on gain on negative goodwill by reported segment】

Millions of yen


Not applicable.


Not applicable.


Not applicable.


Not applicable.


Not applicable.

14. Income Taxes

The Company and its domestic subsidiaries are subject to a number of taxes based on income, which, in the aggregate, indicate

statutory rates in Japan of approximately 30.5% for the fiscal years ended March 31, 2019 and 2020.

1．Significant components of the Companies' deferred tax assets and liabilities as of March 31, 2019 and 2020 were as follows:

Deferred tax assets:

Excess bad debt expenses

Excess accrued bonuses to employees

Excess product warranties

Liability for retirement benefits

Provision for environmental countermeasures

Loss on impairment of fixed assets

Depreciation in excess of limit

Enterprise taxes Accrued

Unrealized profits and losses

Operating loss carryforward for tax purposes (b)

Net unrealized losses on securities

Deferred losses on hedges

Other

Subtotal

Valuation allowance for operating loss carryforward for tax purposes (b)

Valuation allowance for deductible temporary differences

Valuation allowance-total (a)

Total deferred tax assets

Deferred tax liabilities:

Net unrealized gains on securities

Deferred gains on hedges

Retained earnings of foreign subsidiaries

Asset for retirement benefits

Excess depreciation for tax purposes

Other

Total deferred tax liabilities

Net deferred tax assets (liabilities)

2019

¥ 84

1,451

253

8,058

258

2,449

1,802

129

3,299

9,695

70

684

6,425

34,662

(8,452)

(13,027)

(21,479)

¥ 13,182

¥ (679)

(252)

(4,016)

(1,460)

(2,129)

(1,653)

(10,192)

¥ 2,989

2020

¥ 76

1,473

241

8,220

235

2,419

1,474

183

3,392

8,894

117

416

6,839

33,984

(6,576)

(12,842)

(19,418)

¥ 14,566

¥ (350)

(662)

(4,379)

(1,238)

(2,347)

(1,675)

(10,653)

¥ 3,913

(a) Valuation allowance decreased by ￥2,061 million. The main reasons for the decrease were decreases in valuation allowance of

￥1,704 million due to Oak-Mitsui, Inc., which had been a consolidated subsidiary in the previous fiscal year but was excluded from

consolidation in the current fiscal year.

(b) Operating loss carryforward for tax purposes and its deferred tax assets by expiration periods.

Millions of yen

(2019)

Operating loss carryforward for tax purposes (1)

Valuation allowance

Net deferred tax assets

2020

¥1,173

(1,132)

40

2021

¥317

(310)

7

2022

¥1,184

(821)

362

2023

¥153

(153)

－

2024

¥678

(676)

2

2025 and

beyond

¥6,187

(5,357)

829

Total

¥9,695

(8,452)

1,243

(1) Carryforward tax loss shown in the above table is after multiplying the statutory tax rate.

Millions of yen

(2020)

Operating loss carryforward for tax purposes (1)

Valuation allowance

Net deferred tax assets

2021

¥302

(171)

130

2022

¥1,208

(372)

835

2023

¥143

(142)

0

2024

¥136

(130)

5

2025

¥1,321

(429)

891

2026 and

beyond

¥5,783

(5,329)

453

Total

¥8,894

(6,576)

2,317

(1) Carryforward tax loss shown in the above table is after multiplying the statutory tax rate.

Millions of yen


Assets:

(a) Cash and deposits

(b) Notes and accounts receivable

(c) Investment securities

Total

Liabilities:

(a) Notes and accounts payable

(b) Short-term borrowings and commercial papers

(c) Current portion of long-term debt

(d) Long-term debt

Total

Derivative transactions

Book value

¥ 21,536

91,273

11,441

¥ 124,251

55,926

58,098

36,412

122,368

¥ 272,805

¥ (1,398)

Fair value

¥ 21,536

91,273

10,912

¥ 123,721

55,926

58,098

36,550

122,762

¥ 273,337

¥ (1,398)

Difference

¥ －

－

(529)

¥ (529)

－

－

138

393

¥ 532

¥ －

Notes: Derivative assets and liabilities are on net basis. Items that are net liabilities are shown in parenthesis.

2019

30.5

1.7

(109.7)

111.8

4.4

29.1

(2.1)

65.8


Management system for market risk

For foreign currency exchange rate risk from foreign currency denominated trade receivables, currency forward contracts are used on

a certain portion of the positions that are, as a general rule, the net amount of foreign currency denominated trade receivables. For

foreign currency exchange rate risk from foreign currency denominated trade payables, currency forward contracts are used on a

certain portion of the positions that are, as a general rule, the net amount of foreign currency denominated trade payables. Moreover,

the Companies also entered into interest rate swaps to hedge their loans payable against interest rate risk.

For stock market fluctuation risk of investment securities, the Companies keep track of the market prices and investees’ (business

partners) financial condition and review continuously the possession situation of stocks in view of the relationship with business

partners.

Derivative transactions entered into by the Companies are implemented and controlled based on the Company’s internal policies.

Management system for liquidity risk of financing

The Company's Finance & Accounting Department manages the risk through the preparation of the Companies' financial plans with

group financing.

2．The following table summarizes the significant differences between the statutory effective tax rate and the tax rate calculated based

on the Company's consolidated financial statements for the fiscal years ended March 31, 2019 and 2020.

Statutory effective tax rate

Permanent difference due to non-deductible expense

Permanent difference due to non-taxable income

Effect of elimination of intercompany dividends received


Valuation allowance

Others

Tax rate calculated based on the Companies' consolidated financial statements

2020

30.5

4.8

(51.9)

52.1

7.5

23.6

3.7

70.4

%

%

%

%

15. Financial Instruments

(a) Qualitative information on financial instruments

1. Policy of financial instruments management

The Companies raise funds primarily through bank loans and the issuance of commercial paper and bonds. The Companies manage

surplus funds utilizing financial assets with high degrees of safety. The Companies use derivatives to reduce risk as described below

and do not enter into speculative trading.

2. Description of financial instruments and risk

Trade receivables-notes and accounts receivable are exposed to the credit risks of customers. As the Companies are expanding their

business globally, certain foreign currency denominated trade receivables are exposed to foreign currency exchange rate fluctuation

risk. For this risk, currency forward contracts are used on a certain portion of the amount of foreign currency denominated trade

receivables less the amount of respective foreign currency denominated trade payable. Investment securities are mainly stocks issued

by companies that have business relationships, and are exposed to stock market fluctuation risk.

The majority of trade payables-notes and accounts payable have payment due dates of less than one year. A portion of foreign

currency denominated trade payables-notes and accounts are denominated in foreign currencies in association with the import of raw

materials and others and are thus exposed to foreign currency exchange rate fluctuation risk. For this risk, currency forward contracts

are used on a certain portion of the positions that are, as a general rule, the net amount of trade payables denominated in the

respective foreign currencies. Short-term borrowings and commercial papers are raised mainly for operating activities while long-term

debt (in principle within 5 years) is raised mainly for capital investments. Loans with floating interest are exposed to interest rate

fluctuation risk, for long-term debt with floating interest, derivative transactions (interest rate swap contracts) are used for certain long-

term loans in each loan agreement in order to hedge the risk of fluctuating interest rates and to make interest expenses fixed.

Regarding derivative transactions, the Companies used currency forward contracts and swaps to hedge transactions, such as future

sales of commodities (mainly basic metals) and future purchases of inventories (mainly imported materials) in foreign currencies, and to

hedge their foreign currency denominated assets and liabilities against foreign currency exchange risk. For those transactions, the

Companies apply the deferred hedge method or the matching treatment method as hedge accounting methods except for transactions

held by certain foreign subsidiaries, and for certain transactions to hedge assets and liabilities denominated in foreign currencies

against foreign currency exchange risk.

The Companies also entered into interest rate swap contracts to hedge their loans payable against interest rate fluctuation risk. For

those transactions, the Companies apply the deferred hedge method or the exceptional accrual method for interest rate swaps as

hedge accounting methods except for transactions held by certain foreign subsidiaries.

Further, the Companies utilized metal forward contracts and fuel forward contracts to reduce the Companies' exposure to fluctuations

in material prices. For those transactions, the Companies apply the deferred hedge method as hedge accounting methods except for

transactions held by certain foreign subsidiaries. With regard to hedging instruments, hedged items, hedging policies and evaluation of

hedge effectiveness, please refer to “Notes to Consolidated Financial Statements - 2.Summary of Significant Accounting Policies - (e)

Derivative transactions and hedge accounting.”

Derivative transactions are exposed to market risks from fluctuations in fair value and to credit risks from breach of contract due to

counter parties' insolvency or other reasons. Market risks of the Companies' currency forward and swap contracts, interest rate swap

contracts and metal forward contracts refer to the risks from fluctuations in exchange rates, interest rates and metal prices.

3. Description of risk management system for financial instruments

Management system for credit risk

With regard to the credit risk for trade receivables-notes and accounts receivable, due dates and balances are managed for each

customer and the credit status of major customers is kept track of on a semiannual basis.

In order to mitigate credit risk for derivative transactions, the Companies conduct business only with highly rated financial

institutions and trading companies.

4. Supplementary explanation regarding fair value of financial instruments

The fair value of financial instruments is measured based on the market price, if available, or reasonably estimated value if a market

price is not available. As reasonably estimated value is estimated based on certain assumptions, it might differ if different assumptions

are used.

In addition, the contract amount of the derivative transactions described below in "Notes to Consolidated Financial Statements -

16.Derivative Transactions" does not represent the market risk of the derivative transactions.

(b) Fair value of financial instruments

The carrying amounts of book value, fair value, and differences as of March 31, 2019 and 2020 were as follows. In addition, financial

instruments, of which it is extremely difficult to measure the fair value, are not included (Please refer to "Notes 2. Financial instruments

whose fair value is extremely difficult to measure").


Assets:



(c) Investment securities

Total

Liabilities:

(a) Notes and accounts payable

(b) Short-term borrowings and commercial papers

(c) Current portion of long-term debt

(d) Long-term debt

Total

Derivative transactions

Book value

¥ 32,677

83,979

10,544

¥ 127,201

59,799

69,459

28,727

134,883

¥ 292,870

¥ 744

Fair value

¥ 32,677

83,979

10,295

¥ 126,953

59,799

69,459

28,807

135,030

¥ 293,097

¥ 744

Difference

¥ －

－

(248)

¥ (248)

－

－

80

147

¥ 227

¥ －

Notes: Derivative assets and liabilities are on net basis. Items that are net liabilities are shown in parenthesis.

Millions of yen

April 1, 2019 to

March 31, 2020

¥ 21,536

91,273

－

¥ 112,809

April 1, 2020 to

March 31, 2024

¥ －

－

－

¥ －

April 1, 2024 to

March 31, 2029

¥ －

－

－

¥ －

April 1, 2029

and thereafter

¥ －

－

240

¥ 240




(c) Investment securities:

Available-for-sale securities with maturity date

Bonds(domestic government and municipal bonds)

Total


Derivative transactions:

Notes:

1. Method of estimating fair value of financial instruments

Assets:

(a) Cash and deposits and (b) Notes and accounts receivable:


Regarding Cash and deposits and Notes and accounts receivable, book value is used as fair value, because these instruments have short maturity so

that fair value approximates book value.

Liabilities:

(a) Notes and accounts payable and (b) Short-term borrowings and commercial papers:

Fair value of investment securities equals quoted market price. Fair value of debt securities equals quoted market price or provided price by financial

institutions. For the situation from the point of view of holding purposes, please refer to "Notes to Consolidated Financial Statements - 4. Securities."

(c) Current portion of long-term debt and (d) Long-term debt:

Regarding Notes and accounts payable and Short-term borrowings and commercial papers, book value is used as fair value, because these

instruments have short maturity so that fair value approximates book value.

Fair value of long-term bank loans is based on the present value of future cash flows discounted using the current borrowing rate for similar debt of a

comparable maturity.

Fair value of corporate bonds is based on the present value of future cash flows discounted using the indicated rate in secondary markets.

(a) Contract amount, fair value, unrealized gain or loss, and others are described in “Notes to Consolidated Financial Statements - 16. Derivative Transactions."

2. Financial instruments whose fair value is extremely difficult to measure

Classification

Unlisted equity securities

Nonpublic domestic bonds

2020

¥ 55,196

240

Consolidated balance sheet amount Millions of yen

Above are not included in "(c) Investment securities" because there is no market value and it is extremely difficult to measure the fair value.

3. The redemption schedule for money claim and held-to-maturity debt securities with maturity dates subsequent to the consolidated

balance sheets date

4. The redemption schedule for corporate bonds, long-term debt, and other interest-bearing debt with maturity dates subsequent to the

consolidated balance sheets date

Please refer to "Notes to Consolidated Financial Statements - 6. Short-Term Borrowings and Long-Term Debt."

April 1, 2020 to

March 31, 2021

¥ 32,677

83,979

－

¥ 116,657

April 1, 2021 to

March 31, 2025

¥ －

－

－

¥ －

April 1, 2025 to

March 31, 2030

¥ －

－

－

¥ －

April 1, 2030

and thereafter

¥ －

－

240

¥ 240





Available-for-sale securities with maturity date

Bonds(domestic government and municipal bonds)

Total

16. Derivative Transactions

(a) Derivative transactions for which hedge accounting had not been applied as of March 31, 2019 and 2020 were as follows:

Currency-related derivatives

Type

Forward contracts:

Selling:

U.S. dollars: Contract amounts

Due over one year

Fair value

Net unrealized gains (losses)

2020

¥1,356

-

(22)

(22)

Notes: Fair values of currency forward contracts are based on future exchange rates or prices provided by financial institutions.

Millions of yen

2019

¥ 52,681

240

Millions of yen

(b) Derivative transactions for which hedge accounting had been applied as of March 31, 2019 and 2020 were as follows:

Currency-related derivatives

Type Hedged items

Forward contracts:

Selling: Accounts receivable


Due over one year

Fair value

Buying: Accounts payable


Due over one year

Fair value

Euros: Contract amounts

Due over one year

Fair value

Thailand bhat: Contract amounts

Due over one year

Fair value

Indonesia rupiah: Contract amounts

Due over one year

Fair value

Malaysia ringgit: Contract amounts

Due over one year

Fair value

2020

¥15,546

228

0

¥1,298

-

4

¥26

-

(0)

¥826

68

(33)

¥356

-

(50)

¥353

-

2

Notes:

Currency-related derivatives for which hedge accounting had been applied

(a) The deferred hedge method is applied as a hedge accounting method.

(b) Fair values of currency forward contracts and currency swap contracts are based on future exchange rates or prices

provided by financial institutions.

Millions of yen

2019

¥1,498

-

(10)

(10)

2019

¥15,007

2,568

(137)

¥1,610

-

17

¥33

-

(0)

¥ -

-

-

¥ -

-

-

¥ -

-

-


Type Hedged items

Forward contracts: Raw materials and finished goods

Selling:

Zinc: Contract amounts

Due over one year

Fair value

Lead: Contract amounts

Due over one year

Fair value

Silver: Contract amounts

Due over one year

Fair value

Copper: Contract amounts

Due over one year

Fair value

Buying:

Zinc: Contract amounts

Due over one year

Fair value

Lead: Contract amounts

Due over one year

Fair value

Copper: Contract amounts

Due over one year

Fair value

Coal: Contract amounts

Due over one year

Fair value

2020

¥7,906

-

2,009

¥803

-

(5)

¥ -

-

-

¥225

-

(17)

¥1,621

-

(85)

¥2,474

-

(215)

¥4,170

1,615

(710)

¥971

450

(132)

Commodities-related derivatives

Notes:

(a) The deferred hedge method is applied as a hedge accounting method.

(b) Fair value of metal forward contracts is based on forward prices provided by trading companies.

Millions of yen

Type Hedged items

Forward contracts:

Selling: Accounts receivable


Due over one year

Fair value

Buying: Accounts payable


Due over one year

Fair value

2020

¥174

-

(Note b)

¥1

-

(Note b)

Notes:

Currency-related derivatives for which exceptional accrual method had been applied

(a) The exceptional accrual method for currency-related derivatives is applied as a hedge accounting method.

(b) For certain accounts receivable for which currency forward contracts are used to hedge the foreign currency exchange

rate fluctuation risk, fair value of derivative financial instruments is included in fair value of the accounts receivable as

hedged items, because those currency forwards contracts are treated in combination with the respective accounts

receivable with the exceptional accrual method for currency forward contracts.

2019

¥230

-

(Note b)

¥2

-

(Note b)

Millions of yen

2019

¥23,222

7,494

(1,648)

¥1,576

-

31

¥635

-

19

¥17

-

0

¥2,354

-

185

¥2,225

-

(19)

¥5,813

3,296

163

¥ -

-

-

17. Employees' Retirement Benefits

The Company and its consolidated domestic subsidiaries provide two retirement benefit plans for employees, an unfunded retirement

plan and a funded retirement plan, under which all eligible employees are entitled to benefits based on their length of service and basic

rate of pay at the time of termination.

(a) Changes in retirement benefit obligations

Defined benefit plans

(b) Changes in plan assets

(c) Reconciliation from retirement benefit obligations and plan assets to liability (asset) for retirement benefits

(d) Retirement benefit costs

Balance at the beginning of the fiscal year

Service cost

Interest cost

Actuarial loss (gain)

Benefits paid

Past service costs (benefits)

Decrease by exclusion of consolidated subsidiaries

Other

Balance at the end of the fiscal year


Expected return on plan assets

Actuarial gain (loss)

Contributions paid by the employer

Benefits paid

Decrease by exclusion of consolidated subsidiaries

Other


Funded retirement benefit obligations

Plan assets

Unfunded retirement benefit obligations

Net liability for retirement benefits at the end of the fiscal year

Liability for retirement benefits

Asset for retirement benefits

Net liability for retirement benefits at the end of the fiscal year

Service cost

Interest cost

Expected return on plan assets

Net actuarial loss (gain) amortization

Past service costs amortization

Total retirement benefit costs for the fiscal year

2020

¥46,633

3,026

149

108

(2,139)

3

(1,249)

(17)

¥46,514

2020

¥24,854

692

(1,475)

1,030

(656)

(912)

(25)

¥23,507

2020

¥20,410

(23,507)

(3,096)

26,103

23,006

26,776

(3,769)

¥23,006

2020

¥3,026

149

(692)

1,464

6

¥3,952

Millions of yen

2019

¥46,264

2,606

148

(152)

(2,081)

(0)

(58)

(93)

¥46,633

2019

¥24,346

637

(505)

999

(648)

－

26

¥24,854

2019

¥20,941

(24,854)

(3,913)

25,692

21,779

26,404

(4,625)

¥21,779

2019

¥2,606

148

(637)

568

63

¥2,748


(e) Remeasurements of defined benefit plans

(f) Accumulated adjustments for retirement benefit

(g) Plan assets

1. Plan assets comprise:

(h) Actuarial assumptions

The principal actuarial assumptions at March 31, 2019 and 2020 are as follows:

2. Long-term expected rate of return

Current and target asset allocations, historical and expected returns on various categories of plan assets have been

considered in determining the long-term expected rate of return.

Defined contribution plans

Contributions to defined contribution plans amounted to ¥792 million and ¥907 million for the years ended March 31, 2019 and 2020,

respectively.

18. Earnings per Share of Common Stock

Earnings per share of common stock at March 31, 2019 and 2020 were as follows:

Regarding diluted earnings per share, no figures for diluted earnings per share have been disclosed because no latent shares existed.

Past service costs

Actuarial gain (loss)

Total remeasurements of defined benefit plans for the fiscal year

Prior service costs that are yet to be recognized

Net actuarial losses that are yet to be recognized

Total balance at the end of the fiscal year

Bonds

Equity securities

General insurance funds

Other

Total

2020

¥2

(78)

¥(76)

2020

¥－

427

¥427

2020

36%

26%

33%

5%

100%

Discount rate

Long-term expected rate of return

2020

0.0%-0.9%

Mainly 3.4 %

Millions of yen



Profit

(Millions of yen)

¥1,566

Weighted-average shares

(Thousands)

57,106

Profit per share

(Yen)

¥27.43

2019

¥63

215

¥278

2019

¥2

348

¥351

2019

34%

31%

31%

4%

100%

2019

0.0%-0.9%

Mainly 3.0 %



Profit

(Millions of yen)

¥4,691

Weighted-average shares

(Thousands)

57,107

Profit per share

(Yen)

¥82.15

19. Loss on impairment of fixed assets

The Company recognized impairment losses on the manufacturing facilities and the idle assets as extraordinary losses for the fiscal

years ended March 31, 2019 and 2020 as follows:


Not applicable.

Grouping of assets used for business purposes is based on plant- and product-specific units based on management accounting

classifications. And idle assets are grouped by individual assets. The Company planned to restructure and discontinue the

operations relevant to the impaired manufacturing facilities due to the reduce in profitability, and reduced their book values to the

recoverable amounts, which were measured at memorandum value since it is difficult to continue to use them for other operations

or to sell them.The book value of the idle assets held to sale were reduced to net realizable value, which were measured at the estimated sales

price. Further, the book values of the other idle assets were reduced to the recoverable amounts, which were measured at

memorandum value since it is difficult to continue to use them for other operations or to sell them.


Location

Ohta City,

Shimane Prefecture

Ishikawa District

Fukushima Prefecture

Others

Total

Major use

Manufacturing facilities

Idle assets

Idle assets

Millions of yen

¥112

40

0

153

69

52

23

145

64

¥363

Asset category



Other

Subtotal


Land

Intangible fixed Assets

Subtotal

Machinery and equipment etc.

20. Related Party Transactions

(a) Related party transactions

1. The Company owns 32.2% of outstanding shares of Pan Pacific Copper Co., Ltd., which produces and sells products related to

copper refining and smelting business.The transaction amount for the fiscal years ended March 31, 2019 and 2020 and account balance as of March 31, 2020 with

Pan Pacific Copper Co., Ltd. was as follows:

Millions of yen

2. SCM Minera Lumina Copper Chile is an affiliate of MFN Investment LLC.

MFN Investment LLC is an affiliate of the Company.

The transaction amount for the fiscal years ended March 31, 2019 and 2020 with SCM Minera Lumina Copper Chile was as

follows:

Millions of yen

Guarantees of bank loans

Increase in short -term loans receivable, net

Short term loans receivable

2020

¥85,864

¥129

¥6,445

Guarantees of bank loans

2020

¥21,218

2019

¥90,302

¥6,575

¥6,575

2019

¥25,135

(b) Note about significant related parties

In the fiscal year ended March 31, 2020, Pan Pacific Copper Co., Ltd. was recognized as significant related party and the

summary of its financial statements was as follows:

Pan Pacific Copper Co., Ltd.

Millions of yen

Total current assets

Total non-current assets

Total current liabilities

Total long-term liabilities

Total net assets

Net sales


Profit (loss)

2020

¥266,113

200,353

268,170

82,281

116,014

713,696

3,337

1,602

2019

¥308,844

194,686

330,690

58,280

114,560

733,965

10,003

6,782


21.Asset Retirement Obligations


Asset retirement obligations that are recorded in the consolidated balance sheet

(a) Overview of asset retirement obligations

- Obligation to restore a closed mine to its original state required by the Mine Closure Law overseas

- Obligation to eliminate asbestos caused by dismantling a building (business asset) under the Act on Asbestos Health Damage Relief

- Obligation to restore a vacated office or other facility to its original state based on a real estate lease agreement

(b) Basis for calculating amounts of the asset retirement obligations

(Mines)

Compania Minera Santa Luisa S.A. has recognized asset retirement obligations in accordance with International Financial Reporting

Standards, by estimating closure costs based on mine closure plans under mine closure legislation and regulations in Peru. With regard

to estimate of asset retirement obligations, a discount rate of 1.92% is used, and the expected period up to payment is based on

number of recoverable years from launch of operations and estimated between 3 and 21 years from the next fiscal year.

In addition, during the fiscal year ended March 31, 2020, the company revised its estimate of mine closure costs, no longer using the

2.69% discount rate used in the previous fiscal year. As a result, there was a increase of ¥93 million ($854 thousand) in the balance of

asset retirement obligations compared with before the change.

(Asbestos)

The expected periods of time before removal expenses at the time of dismantling is estimated between 1 and 31 years depending on

each asset. The companies use rates between (0.13)% and 2.30% as a discount rate to estimate the amount of asset retirement

obligations.

In the fiscal year ended March 31, 2020, the Company gained the ability to reasonably estimate future removal expenses for

asbestos building materials, as it obtained new information about these removal expenses. Accordingly, the Company has derived a

new estimate of these removal expenses and has recorded the expenses as asset retirement obligations. The resulting increase of

￥535 million ($4,916 thousand) has been added to the balance of asset retirement obligations.

(Real estate lease agreements)

The companies reasonably estimate the amount of lease deposits from real estate lease agreements that they cannot expect to finally

recover, and record the portion of this amount allocated to the fiscal year ended March 31, 2020 as expenses, instead of recording

them as asset retirement obligations under liabilities.

The companies use periods of time between 4 and 21 years from the date of occupancy to estimate the amount of the expenses.

The companies estimate the uncollectible amount of lease deposits as ¥85 million ($781 thousand) in the fiscal year ended March 31,

2020.

(c) Changes in the total amount of these asset retirement obligations in the fiscal years ended March 31, 2019 and March 31, 2020

Millions of yen


Increase due to acquisition of property, plant and equipment

Adjustments due to the passage of time

Decrease from execution of asset retirement obligations

Increase from changes of estimates

Impact of foreign currency translation


2020

¥ 3,341

0

83

(249)

629

11

¥ 3,816

22.Consolidated Statements of Comprehensive Income


Amounts reclassified to net income in the current period that were recognized in other comprehensive income in the current or previous

periods and tax effects for each component of other comprehensive income were as follows:

Millions of yen

Net unrealized gains (losses) on securities:

Increase (decrease) during the year

Reclassification adjustments

Subtotal, before tax

Tax (expense) or benefit

Subtotal, net of tax

Deferred gains (losses) on hedges:

Increase (decrease) during the year





Foreign currency translation adjustments:

Increase(decrease) during the year



Remeasurements of defined benefit plans:






Share of other comprehensive income of associates

accounted for using equity method:




Total other comprehensive income

2020

¥(1,211)

(21)

(1,233)

334

(898)

3,383

(1,226)

2,157

(400)

1,757

(5,007)

660

(4,346)

(104)

28

(76)

39

(36)

(590)

527

(63)

¥(3,588)

23. Subsequent events

1. Business combination by the acquisition of the shares

The Company approved a resolution to acquire all outstanding shares of Hibi Smelting Co., Ltd. (Hibi Smelting) at a meeting of the

Board of Directors held on February 12, 2020 with transactions of 1) Pan Pacific Copper Co., Ltd. (PPC), investment in which are

accounted for by the equity method as a joint investment company with JX Nippon Mining & Metals Corporation (JX), transfers a part of

its operations to Hibi Smelting, which is newly established by PPC through an absorption-type company split, 2) PPC transfers its

shares of Hibi Smelting to the Company and JX as dividend in kind, and 3) the Company acquires all shares of Hibi Smelting held by JX.

These transactions were executed on April 1, 2020. In addition, Hibi Kyodo Smelting Co., Ltd. (Hibi Kyodo), investment in which had

been accounted for by the equity method, became a consolidated subsidiary as Hibi Smelting acquired the shares of Hibi Kyodo

previously held by PPC.

(1) Overview of business combination

1) Name and business of acquired company

a. Hibi Smelting Co., Ltd.

Main business operations: Smelting and refining of electric copper and other materials as a consignee and consignor

b. Hibi Kyodo Smelting Co., Ltd.

Main business operations: Smelting and refining of electric copper and other materials as a consignee

2019

¥ 3,065

－

66

(156)

538

(171)

¥ 3,341

2019

¥(1,542)

－

(1,542)

485

(1,056)

3,626

772

4,398

(481)

3,917

(2,228)

－

(2,228)

76

202

278

(35)

243

(2,035)

1,048

(987)

¥(111)


2) Primary reasons for business combination

The Company and JX established PPC in October 2000 as a joint sales company for their copper products. Then on April 1, 2006, the

two companies transferred their respective copper refining and smelting functions to PPC and integrated their production operations,

with the aim to be more competitive through consolidated operation. In doing so, they established in PPC the capability of providing a

full range of copper-related services, from resources development and raw materials procurement to smelting and refining and product

sales, an arrangement that has continued to the present.

Since the integration of production operations, the Company had been pursuing synergies in its existing lead, zinc, and precious

metals smelting and refining network, while JX had been reviewing the role of smelting and refining business as it sought to strengthen

downstream business segments. In this manner, the Company and JX had been developing their own separate business strategies in

seeking to expand earnings. At this time, the Company and JX have judged that by making independent use of the respective smelting

and refining facilities for their own particular business portfolios, the Company and JX, being thoroughly familiar with the distinctive

features and nature of each of the facilities, will be better able to make the existing copper smelting and refining functions more

competitive.

Accordingly, after April 1, 2020, the Company and JX will separately manage the copper smelting and refining facilities at the

subsidiaries owned by each company. Specifically, the Company will manage the Hibi Smelter, a smelting and refining facility previously

managed by PPC, and the Hibi Kyodo Tamano Smelter (63.51% previously owned by PPC). Meanwhile, JX will manage the

Saganoseki Smelter & Refinery and Hitachi Refinery.

3) Date of business combination

April 1,2020

4) Legal form of business combination

An absorption-type company split in which PPC is the splitting company and Hibi Smelting is the successor company. PPC will transfer

the shares of Hibi Smelting as dividends in kind and JX will transfer its shares of Hibi Smelting to the Company.

5) Percentage of voting rights acquired

a. Hibi Smelting Co., Ltd. (established on February 3, 2020)

Percentage of voting rights held before the business combination: 32.20% (indirectly held)

Percentage of additional voting rights acquired on the date of business combination: 67.80%

Percentage of voting rights after the acquisition: 100.00% (directly held)

b. Hibi Kyodo Smelting Co., Ltd.

Percentage of voting rights held before the business combination: 20.45% (indirectly held)

Percentage of additional voting rights acquired on the date of business combination: 43.06% (indirectly held)

Percentage of voting rights after the acquisition: 63.51% (indirectly held)

6) Basis for determining the acquiring company

The Company was determined to be the acquiring company as a result of consideration for the percentage of voting rights held by the

Company in Hibi Smelting and Hibi Kyodo .

(2) Acquisition cost and each major class of consideration transferred

Fair value of common shares previously held by the Company on the date of business combination: ￥1,352 million

Cash consideration: ￥2,800 million

Total acquisition cost: ￥4,152 million

(3) Difference between the acquisition cost of the acquired company and the total amount of the consideration transferred for

the acquisition

Not yet determined.

(4) Acquisition-related costs

Remuneration and fees for advisory and other services ￥10 million

(5) Amount of goodwill recognized, the factors that making up goodwill recognized, amortization method and useful life

Not yet determined.

(6) Amounts recognized as of the acquisition date for each major class of the assets acquired and the liabilities

Not yet determined.

2. Gains (losses) on sales of investment securities

The Company approved a resolution at a meeting of the Board of Directors held on February 12, 2020 that 1) PPC transfers a part of its

operations to JX Metals Smelting Co., Ltd. (JX Smelting), which is newly established by PPC through an absorption-type company split,

2) PPC transfers its shares of JX Smelting to the Company and JX as dividend in kind, and 3) JX and JX Smelting conduct the share

exchange with cash consideration so that JX acquires all outstanding shares of JX Smelting. The reasons for this transaction are

described in the aforementioned “1. (1) 2) Primary reasons for business combination.”

As a result of the aforementioned share exchange, the shares of JX Smelting held by the Company was transferred to JX and the

Company received cash from JX. Accordingly, the Company will record a gains (losses) on sales of investment securities in its

consolidated financial statements for the fiscal year ending March 31, 2021.

(1) Name of company to make cash payment to the Company

JX Nippon Mining & Metals Corporation

(2) Date of share exchange

April 1,2020

(3) Name and business of the company whose shares was transferred

JX Metals Smelting Co., Ltd.

Main business operations: Smelting and refining of electric copper, etc. as consignee

(4) Number of shares transferred, cash consideration, gains or losses and percentage of ownership after the share exchange

a. Number of shares transferred

3,220 shares

b. Cash Consideration

￥13,700 million

c. The gains or losses are not determined.

d. Percentage of ownership after share exchange: －%


Profile of Directors and Corporate Auditors （As of June 2020）

April 1980

June 2010

June 2011

February 2012

April 2014

January 2016

April 2016

Entered the Company

Executive Officer, General Manager of Finance &

Accounting Department

Director, Senior Executive Officer, CFO,

General Manager of Corporate Management

Department and Finance & Accounting Department

Director, Senior Executive Officer, CFO,

General Manager of Corporate Management

Department

Representative Director, Senior Managing Director,

Senior Managing Executive Officer, CFO, General

Manager of Corporate Management Department,

Senior General Manager of Copper Business

Strategic Division, Metals Sector

Representative Director, Senior Managing Director,

Senior Managing Executive Officer, CFO

President and Representative Director (current

positions)

April 1986

June 2010

October 2013

April 2014

April 2015

June 2015

October 2015

April 2016

April 2020

Entered the Company

President and Representative Director of Mitsui

Copper Foil (Malaysia) Sdn. Bhd.

General Manager of Recycling Business Promotion Group,

Metals, Minerals & Engineering Sector

Executive Officer, Senior General Manager of Technology

Management Division, Metals & Recycling Division, Metals

Sector

Executive Officer, Deputy Senior General Manager

of Engineered Materials Sector, General Manager

of Business Planning Group, Engineered Materials

Sector

Director, Senior Executive Officer, Deputy Senior

General Manager of Engineered Materials Sector,

General Manager of Business Planning Group,

Engineered Materials Sector

Director, Senior Executive Officer, Senior General

Manager of Engineered Materials Sector, General

Manager of Business Planning Group, Engineered

Materials Sector

Representative Director, Managing Director, Senior

Executive Officer,

Senior General Manager of Engineered Materials

Sector

Vice President, Representative Director, Executive

Vice President, Senior General Manager of

Business Creation Sector (current positions)


Executive Vice President


NISHIDA Keiji

NOU Takeshi

April 1980

January 2010

June 2010

November 2010

June 2011

June 2013

April 2014

April 2015

October 2015

April 2016

April 2018

April 2019

Entered the Company

General Manager of Specialty Foil Division

Executive Officer, Deputy Senior General Manager of

Copper Foil Sector, General Manager of Specialty Foil

Division

Executive Officer, Senior General Manager of Copper Foil

Sector, General Manager of Specialty Foil Division

Senior Executive Officer, Senior General Manager of

Electronic Materials Sector, General Manager of Specialty

Foil Division

Director, Senior Executive Officer, Senior General Manager

of Electronic Materials Sector

Director, Senior Executive Officer, Deputy Senior General

Manager of Engineered Materials Sector


of Engineered Materials Sector

Director, Senior Executive Officer, Deputy Senior General

Manager of Metals Sector


of Metals Sector


of Metals Sector, Chief Environmental Safety Officer

Director, Senior Executive Officer, Chief Environmental

Safety Officer (current positions)

Director and Senior Executive Officer

HISAOKA Isshi

April 1981

October 2009

April 2013

June 2013

April 2014

June 2014

January 2016

April 2016

Entered the Company

President and Representative Director of MCS, Inc.

Deputy Senior General Manager of Materials & Applications Sector,

General Manager of Affiliates Coordination Division

Executive Officer, Deputy Senior General Manager of Materials &

Applications Sector, General Manager of Affiliates Coordination

Division

Executive Officer, Senior General Manager of Affiliates


Director, Senior Executive Officer, Senior General Manager of

Affiliates Coordination Strategic Sector

Director, Senior Executive Officer, CRO, Senior General Manager

of Corporate Planning & Control Sector, General Manager of

Corporate Planning Department, Corporate Planning & Control

Sector


Corporate Planning & Control Sector, General Manager of

Corporate Planning Department, Corporate Planning & Control

Sector (current positions)


OSHIMA Takashi

April 1985

April 2009

October 2013

April 2014

June 2014

October 2015

January 2016

April 2018

June 2020

Entered the Company

General Manager of Finance & Accounting Department,

Automotive Parts & Components Division, Parts Production Sector


Planning & Administrative Sector, General Manager of Planning

Department, Mitsui Kinzoku ACT Corporation

Executive Officer, Assistant to Senior General Manager of Metals

Sector

Executive Officer of the Company,

Director, Executive Officer of Pan Pacific Copper Co., Ltd.

Senior Executive Officer, Deputy Senior General Manager of

Affiliates Coordination Strategic Sector

Senior Executive Officer, Senior General Manager of Affiliates

Coordination Strategic Sector, General Manager of Copper

Business Strategic Division, Metals Sector

Senior Executive Officer, Senior General Manager of Affiliates



Affiliates Coordination Strategic Sector (current positions)


KIBE Hisakazu

August 1977

September 1996

April 2003

April 2010

June 2016

June 2016

June 2018

Postdoctoral fellow, The University of Tennessee

Professor, Faculty of Engineering, Kyushu Institute of

Technology

Professor, Department of applied science for

integrated system engineering, Kyushu Institute of

Technology

President, Kyushu Institute of Technology

Chairperson of the Board of Director, Kitakyushu

Foundation for the Advancement of Industry, Science and

Technology (current position)

Outside Director of the Company (current position)

Outside Auditor of KROSAKI HARIMA CORPORATION

(current position)

Outside Director

MATSUNAGA Morio

April 1975

August 2002

September 2004

June 2007

January 2010

May 2011

May 2011

June 2013

June 2014

May 2015

June 2019

Adopted as Prosecutor

Chief Prosecutor of Naha District Public Prosecutors Office

Director-General of the Immigration Bureau, the Ministry of

Justice

Chief Prosecutor of Osaka District Public

Prosecutors Office

Superintending Prosecutor of Fukuoka High Public

Prosecutors Office

Professional registration in Japan as lawyer

With KAWAKAMI Law Office

Outside Corporate Auditor of the Company

Outside Director of OUG Holdings Inc. (current position)

Launched GINZA-CHUO Law Office


Outside Director

MIURA Masaharu

April 1975

July 1999

April 2001

April 2005

April 2009

April 2009

April 2010

April 2017

June 2017

April 2018

June 2020

Entered Nissan Motor Co., Ltd.

General Manager of Domestic Parts Department, Parts

Division, Nissan Motor Co., Ltd.

Senior Vice President, Global Aftersales Business, Nissan

Motor Co., Ltd.

Senior Vice President, Japan Marketing & Sales, Chairman

of MC-Dealer, Nissan Motor Co., Ltd.

Executive Vice President, FALTEC Co., Ltd.

Chairman and Board Director, ALTIA Co., Ltd.

Representative Director, President and CEO, FALTEC Co.,

Ltd.

Chairman of the Board and Representative Director,

FALTEC Co., Ltd.

Senior Adviser, FALTEC Co., Ltd.

Executive Board Member, Rikkyo Educational Corporation

(current position)


Outside Director

TOIDA Kazuhiko

April 1981

July 2008

July 2009

December 2012

July 2014

July 2018

April 2019

June 2019

June 2019

April 2020

Entered Prime Minister’s Office (Presently Cabinet Office)

Deputy Director General for Policies on Cohesive Society,

Cabinet Office

Deputy Director General for Gender Equality Bureau,

Cabinet Office

Director, Public Relations Office, Cabinet Office

Director General, Gender Equality Bureau

Counsellor for Scientific Research Organizations, Policy

Planning Division, Secretariat of the Science Council of

Japan

Professor, Showa Women’s University (current position)

Outside Corporate Auditor of the Company

(current position)

Outside Director of Nippon Telegraph and Telephone

Corporation(current position)

Dean of Faculty of Global Business and Director of Institute

of Women's Culture of Showa Women’s University(current

positions)


TAKEGAWA Keiko

April 1982

April 2014

April 2015

January 2020

June 2020

Entered the Company

General Manager of Copper Foil Division, Engineered

Materials Sector, General Manager of Strategic Production

Planning Department, Copper Foil Division, Engineered

Materials Sector

Executive Officer, General Manager of Copper Foil Division,

Engineered Materials Sector

Executive Officer, General Manager of Copper Foil Division,

Engineered Materials Sector, General Manager of Business

Planning Group, Copper Foil Division, Engineered Materials

Sector

Corporate Auditor of the Company (current position)

Corporate Auditor

MISAWA Masayuki

April 1975

July 2003

September 2005

July 2007

July 2008

January 2011

June 2013

June 2014

December 2015

June 2018

Entered Ministry of International Trade and Industry

(Presently Ministry of Economy, Trade and Industry)

Director General for Policy Planning and Coordination,

Minister’s Secretariat, METI

Director-General, Trade and Economic Cooperation Bureau,

METI

Director-General, Industrial Science and Technology Policy

and Environment Bureau, METI

Commissioner, Agency for Natural Resources and Energy,

METI

Advisor, Tokyo Electric Power Company, Incorporated

(TEPCO)

Director, Japan Alcohol Trading Co., LTD

Vice President, Japan Alcohol Trading CO., LTD

President, The Japan Chamber of Commerce and Industry

(current position)

President, The Tokyo Chamber of Commerce and Industry

(current position)

Outside Corporate Auditor (current position)


ISHIDA Toru

April 1984

February 2012

June 2014

April 2017

June 2018

April 2020

June 2020

Entered the Company

General Manager of Finance & Accounting Department

General Manager of Administration Department, Metals

Sector

Executive Officer, General Manager of Investor Relations

and Corporate Communications Department, Corporate

Planning &Control Sector

Executive Officer, General Manager of Investor Relations

and Corporate Communications Department, Corporate

Planning & Control Sector, Finance & Accounting

Department, Corporate Planning & Control Sector

Executive Officer, General Manager of Corporate

Communications Department, Corporate Planning & Control

Sector, General Manager of Finance & Accounting

Department, Corporate Planning & Control Sector

Corporate Auditor of the Company (current position)

Corporate Auditor

KUTSUNAI Akira


Breakdown of consolidated employees by employment status and employment contract type （as of the end of FY2019）

Open-ended workforce contract

Fixed-term contract

Total

Supervised workers

Total workforce

※ Since the calculation method is different from the one for temporary employees stated in the annual securities report, the total number of employees is not in accord.

Full-time

Part-time

Total

Full-time

Part-time

Total

Male

8,650

3

8,653

885

29

914

9,567

697

10,264

Female

3,824

6

3,830

317

20

337

4,167

1,086

5,253

Total

12,474

9

12,483

1,202

49

1,251

13,734

1,783

15,517

Male

4,844

354

603

2,810

42

8,653

Female

784

255

386

2,360

45

3,830

Male

443

0

2

469

0

914

Female

123

0

2

212

0

337

Total

6,194

609

993

5,851

87

13,734

Japan

North America

South and Central America

Asia

Europe

Total

Breakdown of consolidated employees by employment contract （as of the end of FY2019）

Fixed-term contractOpen-ended workforce contract

Male

8

2,119

2,127

Female

2

1,050

1,052

Male

703

4,522

5,225

Female

86

2,480

2,566

Male

534

1,681

2,215

Female

28

521

549

Total

1,361

12,373

13,734

Managerial

Non-managerial

Total

Breakdown of consolidated employees by position （as of the end of FY2019）

30-49 years old 50 years of age or overUnder 30 years of age

Percentage of managers holding local nationality in overseas sites （as of the end of FY2019）

North America

South and Central America

Asia

Europe

Total

79.2%

74.1%

82.4%

100.0%

82.0%

Male

190

775

24.5%

18

43

41.9%

160

199

80.4%

534

1,161

46.0%

9

11

81.8%

911

2,189

41.6%

Female

57

154

37.0%

2

12

16.7%

165

193

85.5%

455

691

65.8%

1

4

25.0%

680

1,054

64.5%

Male

162

2,986

5.4%

11

166

6.6%

49

289

17.0%

163

1,866

8.7%

6

21

28.6%

391

5,328

7.3%

Female

46

426

10.8%

2

110

1.8%

79

172

45.9%

113

1,783

6.3%

3

13

23.1%

243

2,504

9.7%

Male

75

1,762

4.3%

7

136

5.1%

0

101

0.0%

4

180

2.2%

1

9

11.1%

87

2,188

4.0%

Female

17

214

7.9%

1

132

0.8%

4

22

18.2%

6

97

6.2%

0

28

0.0%

28

493

5.7%

Total

547

6,317

8.7%

41

599

6.8%

457

976

46.8%

1,275

5,778

22.1%

20

86

23.3%

2,340

13,756

17.0%

New hires

Total employees

Rate of hiring

New hires

Total employees

Rate of hiring

New hires

Total employees

Rate of hiring

New hires

Total employees

Rate of hiring

New hires

Total employees

Rate of hiring

New hires

Total employees

Rate of hiring

Japan

North America

Asia

Europe

Total

New employee hires by region （as of the end of FY2019）


※ Since the calculation method is different from the one for consolidated employees, the total number of employees is not in accord.

South and

Central America

Male

39

775

5.0%

20

43

46.5%

175

199

87.9%

275

1,161

23.7%

8

11

72.7%

517

2,189

23.6%

Female

15

154

9.7%

5

12

41.7%

183

193

94.8%

288

691

41.7%

1

4

25.0%

492

1,054

46.7%

Male

69

2,986

2.3%

23

166

13.9%

68

289

23.5%

238

1,866

12.8%

9

21

42.9%

407

5,328

7.6%

Female

29

426

6.8%

14

110

12.7%

107

172

62.2%

157

1,783

8.8%

2

13

15.4%

309

2,504

12.3%

Male

182

1,762

10.3%

39

136

28.7%

8

101

7.9%

18

180

10.0%

3

9

33.3%

250

2,188

11.4%

Female

24

214

11.2%

35

132

26.5%

7

22

31.8%

13

97

13.4%

0

28

0.0%

79

493

16.0%

Total

358

6,317

5.7%

136

599

22.7%

548

976

56.1%

989

5,778

17.1%

23

86

26.7%

2,054

13,756

14.9%

Departures

Total employees

Turnover rate

Departures

Total employees

Turnover rate

Departures

Total employees

Turnover rate

Departures

Total employees

Turnover rate

Departures

Total employees

Turnover rate

Departures

Total employees

Turnover rate

Japan

North America

Asia

Europe

Total

Employee turnover by region （as of the end of FY2019）


※ Since the calculation method is different from the one for consolidated employees, the total number of employees is not in accord. Departures include “retirement at

the age limit” and “expiration of contract period”.

South and

Central America


0.0・

10.0・

20.0・

30.0・

40.0・

50.0・

0.0・

2.0・

4.0・

6.0・

8.0・

10.0・

0.0・

10.0・

20.0・

30.0・

40.0・

14.8%

22.2%

35.4%40.0%

1.1%1.3%

7.8% 7.6%

8.3% 8.5%

30.4% 30.7%

10.0%

31.1%

1.0%

7.8%

15.8%

40.1%37.4%

20.0%

7.0%

1.5%

30.5%

11.1%

1.6・

1.8・

2.0・

2.2・

2.4・

1.83%

2.04%2.01%

2.32%

39,776

50,351

86,790

113,210

79.0％ 76.7％

0.0・

5.0・

10.0・

15.0・

20.0・

16.715.9

11.012.4

15.2

13.8 14.0

15.3

10.0・

12.0・

14.0・

16.0・

18.0・

14.5%

13.0%

14.0%

Research &

Education

Culture & TraditionDisaster support

Infrastructure

development

Others

30.7%

1.5%

17.7%2.9%

35.0%

12.2%

［FY2019］

150.0million yen

40.6%

19.3%

2015 2016 2017 20192018

7.9%

2.2%

30.3%

11.4%

2.10%

14.7%

2015 2016 2017 20192018

2015 2016 2017 20192018

2015 2016 2017 20192018 2015 2016 2017 201920182015 2016 2017 20192018

previous fiscal year 77.1％ previous fiscal year 72.6％

13.7

16.8Percentage of high stress

Proportion of women as a percentage of new hires Percentage of employees with disabilities

（Mitsui Kinzoku, Non-consolidated）

Mitsui Kinzoku consolidated

Mitsui Kinzoku

Fiscal Fiscal

Proportion of women in management positions



Mitsui Kinzoku

Mitsui Kinzoku

Fiscal

Fiscal

Rate of taking paid leave

Total paidleave taken

Total paid leavegranted

[Mitsui Kinzoku] [Domestic total]

Proportion of women as a percentage of total employees Overtime hours

［Hours/month per employee］

Mitsui Kinzoku Domestic total

Fiscal

Results of stress check (Percentage of high stress)

（Target : Directly hired employees of Mitsui Kinzoku and

the domestic consolidated affiliates, including expatriate workers）

＊The check has been conducted since FY2016.

Environmental

preservation

Fiscal

Mitsui Kinzoku Group breakdown of the amount

67

8

75

143

17

160

4

8

12

13

16

29

87

10

97

127

20

147

1

10

11

1

20

21

69

7

76

130

17

147

2

7

9

3

17

20

5

10

15

13

15

28

5

10

15

13

15

28

0

0

0

0

0

0

2

0

2

2

6

8

2

0

2

2

6

8

0

0

0

0

0

0

2

7

9

4

15

19

2

7

9

4

15

19

0

0

0

0

0

0

Return to work and retention rates after parental leave

※ Ended: Employees whose parental leave ended.Returned: Employees that returned to work after ended.

Retired： Employees that separated from employment in twelve months after returning.

Parental leave

※ Employees that took advantage: Employees that took parental leave in the relevant fiscal year of those entitled.

FY2017 FY2019FY2018

Employees that entitled to leave

Employees that took advantage





Male

Female

Total

Male

Female

Total

Mitsui Kinzoku

Domestic total

FY2017 FY2019FY2018

Ended Returned Retired Ended Returned Retired Ended Returned Retired

Male

Female

Total

Male

Female

Total

Mitsui Kinzoku

Domestic total

2016 2017 2018 Fiscal

0・

100・

200・

300・

400・

500・

2019

207190 188

212243

367351

385

343

2015

2015 2016 2017 Fiscal2019

ISO9001 （Japan）

ISO9001 （Overseas）

IATF16949 （Japan）

IATF16949 （Overseas）

0・

20・

40・

60・

48 50 5053

2015 2016 2017 Fiscal2019

0・

20・

40・

60・

80・

100・100

85.7

68.4

55.748.7 48.1

＊ The values are expressed as relative values, with the data of FY2013 being 100.

2013 2014

2016 2017 2018 Fiscal20190・

10・

20・

30・

40・

50・

35.6

52.7

39.4

30.6

43.2 42.3

49.2 52.0

7.2 6.5

4.04.9

2015

60・

59.7

12.8%（7.7）

10.2%（6.1）

10.6%（6.3）

66.3%（39.6）

63.7%（1,077.8）

26.0%（439.1）

2.2%（37.4）

8.0%（135.3）

0.04% （0.6）

77.3%（1,307.2）

21.0%（355.6）

1.7%（28.0）

0.1%（0.9） 0.1% （1.5）

・0.0%

・20%

・40%

・60%

・80%

・100%

・0.0%

・20%

・40%

・60%

・80%

・100%

Scope 1 Scope 2 Scope 1 Scope 2

45.3% 54.7%

55.1% 44.9%

10.0% 90.0%

36.9% 63.1% 60.3% 39.7%

45.3% 54.7%

57.5% 42.5%

14.1% 85.9%

34,400

FY2019

t-CO2

（15,581）

45.3%

Japan

54.7%

（18,820）

2016 2017 2018 Fiscal20192015

0・

5,000・

10,000・

15,000・

20,000・

25,000・

30,000・


380

＊ Changed the calculation method and revised the values for previous years.

3,828 48.0%（1,837）

6.2%（238）

13.2%（504）

11.5%（439）

4.3% （166）

6.7%（258）

10.1%（386）

2018

54

52.7

2018

22.1

53.3

6.4

12.2

＊ The scope of data calculation covers only the transportations

which are designated as Specified Consigner by the Act on the

Rational Use of Energy.

＊ For the emission factors, the emission intensity database for calculating

GHG emissions of organizations throughout the supply chain, Japan‘s

Ministry of the Environment and Ministry of Economy, Trade and Industry

(Ver. 2.6 and Ver. 3.0) was referenced.

CO2 emissions by waste treatment （t-CO2/year)CO2 emissions in logistics （Non-consolidated, t-CO2/year)

Overseas

Breakdown by scope of CO2 emissions by region Breakdown by scope of CO2 emissions by business unit

Japan

Asia

America

Europe

Global

Metals

Engineeredmaterials

Automotive parts& components

Affiliatescoordination

Group-wide

Breakdown of CO2 emissions by business unitBreakdown of CO2 emissions by region

Japan

Europe

FY2019

thousand t-CO2

America (North, South and Central America)

Asia(except Japan)

MetalsEngineered

materials

Automotive parts

＆components

Affiliates coordinationMitsui Kinzoku Head Office andadministrative sites

FY2019

thousand t-CO2

Other business sectors

OverseasJapan Number of patents registered globally

Japan

Republic of

Korea

United States

Europe

the others

Taiwan

China

Number of patent applications

Number of operating sites with certifications Number of claims at sites that hold QA meetings

Environment-related capital expenditures (Japan)

Environmental management expenses (Japan)

Environment-related capital expenditures (overseas)

Environmental management expenses (overseas)

＊ Added the data of overseas sites from FY2017.

＊ Revised the values for FY2018 disclosed last year.

Waste treatmentoutsourcing expenses

Energy expenses

Maintenance andrepair expenses

Others(Labor cost, office commodity

expenses, etc.)

FY2019

100 million yen

＊ We have received an independent practitioner’s assurance for

the figures for FY2019 in this information to which is attached.

Environment-related capital expenditures and environmental

management expenses (Hundred million yen)

Break down of environmental management expenses

1,691.7 1,691.7

93.4%6.6%36.8% 63.2%

17,748

20,846 20,63619,518 19,306

Corporate profile and Stock information（as of March 31, 2020）

Corporate profile

Stock information

The Master Trust Bank of Japan, Ltd. (Held in trust account)

Japan Trustee Services Bank, Ltd. (Held in trust account)

JP MORGAN CHASE BANK 385632

JPMorgan Securities Japan Co., Ltd.

Mitsui Kinzoku Employees’ Shareholding Association

Japan Trustee Services Bank, Ltd. (Held in trust account 5)

JP MORGAN CHASE BANK 385151

SMBC Nikko Securities Inc.

Mitsui Kinzoku Business Partners’ Shareholding Association

SOCIETE GENERALE PARIS/BT REGISTRATION MARC/OPT

5,926

4,718

2,187

1,246

1,105

1,086

944

735

679

657

10.37

8.26

3.83

2.18

1.93

1.90

1.65

1.28

1.19

1.15

Major shareholders （Top 10）

Number of shares held (Thousands) Percentage of total (%)Shareholder

＊Percentages of shares held are calculated based on the total number of shares issued and outstanding (excluding 190,255 shares in treasury).

Financial institutions

Securities firms

Other Japanese corporations

Individualsand others

Treasury stock

Overseascorporationsand others

17,976

4,750

3,097

190

14,857

16,424

31.37％

8.29％

5.41％

25.93％

28.67％

0.33％


Subsidiaries 51

Affiliates 10

Company name MITSUI MINING & SMELTING CO., LTD.

Established May 1, 1950

Subsidiaries and affiliates

Paid-in capital 42,129 million yen

Employees Consolidated 12,197 Non-consolidated 2,030

Head office 1-11-1 Osaki, Shinagawa-ku, Tokyo 141-8584 Japan

Telephone +81-3-5437-8000

Facsimile +81-3-5437-8029

Total number of authorized shares 190,000,000 shares

Total number of outstanding shares 57,296,616 shares

Number of shareholders 37,542

Share breakdown (Thousands of shares)

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