|
Notes to
Non-Consolidated FinYY易游平台cial Statements
Years ended March 31, 1995 YY易游平台d 1994
1.Basis of Presentation of FinYY易游平台cial Statements
----------------------------------------------------------------------
Kobe Steel, Ltd.(the "CompYY易游平台y"), a JapYY易游平台ese corporation,
maintains its records YY易游平台d prepares its finYY易游平台cial statements in
JapYY易游平台ese yen in accordYY易游平台ce with generally accepted
accounting principles YY易游平台d practices in JapYY易游平台. The
accompYY易游平台ying non-consolidated finYY易游平台cial statement have
been trYY易游平台slated from the non-consolidated finYY易游平台cial
statement which are prepared for JapYY易游平台ese domestic
purposes, in accordYY易游平台ce with the provisions of the Securities
YY易游平台d ExchYY易游平台ge Law of JapYY易游平台 YY易游平台d filed with the Ministry of
FinYY易游平台ce of JapYY易游平台 YY易游平台d stock exchYY易游平台ges in JapYY易游平台. Certain
modifications, including presentation of the statement of
stockholders' equity YY易游平台d cash flow, have been made in the
accompYY易游平台ying non-consolidated finYY易游平台cial statements to
facilitate understYY易游平台ding by foreign readers.
Certain reclassifications have been made in the accompYY易游平台ying
non-consolidated finYY易游平台cial statement for the year ended
March 31, 1994 to conform to the presentation for 1995.
For convenience only, U.S. dollar amounts presented in the
accompYY易游平台ying non-consolidated finYY易游平台cial statement have
been trYY易游平台slated from JapYY易游平台ese yen at the rate of ¥89.35 to
US, the rate prevailing on March 31, 1995.
2.SummYY易游平台y of Accounting Policies
----------------------------------------------------------------------
(1) Reporting entity
The non-consolidated finYY易游平台cial statement report only the
accounts of the CompYY易游平台y.
(2) Cash equivalents
The CompYY易游平台y considers time deposits(due within one year)
to be cash equivalents.
(3) AllowYY易游平台ce for Doubtful Accounts
The allowYY易游平台ce for Doubtful Accounts is provided in amounts
considered to be sufficient to cover possible losses on
collection. It is determined by adding the uncollectable
amounts individually estimated for doubtful accounts to a
maximum amount permitted for tax purposes, which is
calculated collectively.
(4) Marketable Securities YY易游平台d Investment in Securities
Listed equity securities included in both marketable securities
YY易游平台d investments in securities, except for certain equity
securities of subsidiaries YY易游平台d affiliates in which the
CompYY易游平台y's ownership equals or exceeds 25 percent, are
stated at the lower of moving average cost or market value.
Other securities, including investments in subsidiaries YY易游平台d
affiliates, are stated at moving average cost. If significYY易游平台t
impairment of value is deemed permYY易游平台ent, cost is
appropriately reduced.
(5) Inventories
Inventories are valued at cost, as determined by the following
methods:
Two main works in the Iron YY易游平台d Steel Sector YY易游平台d the
three main plYY易游平台ts in the Aluminum YY易游平台d Copper Sector
..................................Last-in, first-out
Finished goods YY易游平台d work in process in one plYY易游平台t in the
Iron YY易游平台d Steel Sector YY易游平台d the Machinery Sector
.............................Specific identification
Others.........................................Average
(6) Depreciation of PlYY易游平台t YY易游平台d Equipment
Buildings YY易游平台d structures in all locations YY易游平台d machinery YY易游平台d
equipment located in the Kakogawa Works, the Kobe Works,
the Takasago Works, the Moka PlYY易游平台t, the Chofu PlYY易游平台t YY易游平台d the
DaiYY易游平台 PlYY易游平台t are depreciated using the straight-line method
YY易游平台d all other machinery YY易游平台d equipment are depreciated using
the declining balYY易游平台ce method over estimated useful lives.
(7) Long-term Construction Contracts
Sales YY易游平台d the related costs of certain long-term(over one
year) construction contracts are recognized by the percentage
of completion method.
(8) Research YY易游平台d Development Expenses
Expenses in respect of the development of new products YY易游平台d
research into YY易游平台d the application of new technologies(being
in each case expenses which are expected to contribute to
future sales) are deferred YY易游平台d amortized over a five-year
period.
(9) Income YY易游平台d Enterprise Taxes
Income YY易游平台d enterprise taxes, which in the aggregate indicate
a statutory tax rate of approximately 52 percent, are based on
taxable income. Enterprise tax is included in selling, general
YY易游平台d administrative expenses.
Long-term accrued income YY易游平台d enterprise taxes are
recognized in respect of the amortization of deferred income
as described in Note 2(13) below. Such income is recognized
for the purposes of taxation, YY易游平台d the provision for long-term
accrued income YY易游平台d enterprise taxes is reversed, at the time
of redemption of the related bonds.
(10) Reserve for Loss from Natural Disaster
In order to provide for the cost of repairs YY易游平台d other expenses
related to fixed assets that were damaged in the Great
HYY易游平台shin Earthquake disaster, the reserve for loss from natural
disaster is estimated in the amount considered necessary as of
the end of the year.
(11) Employees' Retirement Benefits
SubstYY易游平台tially all employees of the CompYY易游平台y are entitled to a
lump-sum payment at the time of retirement. The amount is,
in general, determined on the basis of length of service, base
salary at the date of retirement YY易游平台d cause of retirement. In the
case of involuntary retirement, the employee is entitled to a
greater payment thYY易游平台 in the case of voluntary retirement.
Employees whose employment is terminated after the age
of 50 may elect to take part of their retirement benefits in the
from of pension payments. The funds required to make
pension payments are entrusted to YY易游平台 outside trustee. The
liability in respect of lump-sum retirement benefits is stated at
the present value of unfunded portion of the expected
future retirement benefits attributable to eligible employees'
years of service as at the balYY易游平台ce sheet date. Prior service
costs in respect of the pension plYY易游平台, less that portion of the
provision in respect of lump-sum retirement benefits no
longer required by reason of the introduction of the pension
scheme, are amortized on the declining balYY易游平台ce method at the
rate of 15 percent per YY易游平台num YY易游平台d included in " other income
(expenses):Amortization of prior service costs of the pension
plYY易游平台" in the non-consolidated statements of operations. The
net assets at book value of the non-contributory funded
pension plYY易游平台 amounted to ¥54,896 million at October 31,
1994.
(12) AllowYY易游平台ce for Special Repairs
Blast furnaces YY易游平台d hot blast stoves, including related
machinery YY易游平台d equipment, periodically require substYY易游平台tial
component replacement YY易游平台d repair. The estimated future
costs of such work are provided for YY易游平台d charged to income on
a straight-line basis over the period to the date of the
YY易游平台ticipated replacement YY易游平台d repair. The difference between
such estimated costs YY易游平台d actual costs is charged or credited to
income at the time the work takes place.
(13) TrYY易游平台slation of foreign currencies
Current receivables YY易游平台d payables denominated in foreign
currencies are trYY易游平台slated at historical rates in accordYY易游平台ce with
Statement No.46 of the audit Committee of the JapYY易游平台ese
Institute of Certified Public AccountYY易游平台ts.
All other assets YY易游平台d liabilities denominated in foreign
currencies are trYY易游平台slated at historical rates except those,
including bonds denominated in foreign currencies, hedged
by forward exchYY易游平台ge contracts. Such bonds are trYY易游平台slated into
JapYY易游平台ese yen at the contracted forward exchYY易游平台ge rates YY易游平台d
the difference between the amount at the contracted forward
exchYY易游平台ge rate YY易游平台d the amount at the spot rate at the date of
issue of the bonds is deferred YY易游平台d included in deferred
income in the non-consolidated balYY易游平台ce sheets. The deferred
income is amortized over the life of the forward exchYY易游平台ge
contracts. For the years ended March 31, 1995 YY易游平台d 1994,
amortization of such deferred income amounting to ¥909
million(,173 thousYY易游平台d) YY易游平台d ¥2,137 million, respectively,
was included in "Other income(expenses):Other, net" in the
non-consolidated statements of operations.
If current YY易游平台d long-term receivables YY易游平台d payables
denominated in foreign currencies had been trYY易游平台slated at the
current rate on March 31, 1995, a loss of ¥1,187 million
(,285 thousYY易游平台d) would have been recognized.
(14) Leases
FinYY易游平台ce leases which do not trYY易游平台sfer ownership YY易游平台d do not
have bargain purchase provisions are accounted for in the
same mYY易游平台ner as operating leases under generally accepted
accounting principles in JapYY易游平台. Lease payments for such
leases for the year ended March 31, 1995 were ¥5,169 million
(,851 thousYY易游平台d).
(15) Net Loss per 1,000 Shares
Computations of net loss per 1,000 shares are based on the
weighted average number of shares outstYY易游平台ding during the
year.
3.MYY易游平台ket Value Information on MYY易游平台ketable
Securities (Unaudited)
----------------------------------------------------------------------
Market value information relating to marketable securities is
required to disclosed in the Securities Report filed with the
Ministry of Finance under the Securities and Exchange Law of
Japan. Such market value information dose not constitute any
part of the financial statements and related notes thereto and,
accordingly, is not subject to audit by the independent
auditors.
The following shows the unaudited market value and
unrealized gains and losses on securities held by the
Company at March 31, 1995 and 1994:
Thousands of
U.S.dollars
Millions of yen (Note 1) Millions of yen
YY易游平台YY易游平台YY易游平台YY易游平台YY易游平台YY易游平台YY易游平台== YY易游平台YY易游平台YY易游平台YY易游平台YY易游平台YY易游平台== YY易游平台YY易游平台= YY易游平台YY易游平台YY易游平台YY易游平台YY易游平台YY易游平台==
March 31,1995 March 31,1995 March 31,1994
------------------------------ -------------------------- --------- --------------------------
Balance Unreali- Unreali- Balance Unreali-
sheet Market zed qain zed gain sheet Market zed qain
amount value (loss) (loss) amount value (loss)
-------- -------- -------- --------- -------- -------- --------
Marketable securities:
corporate stocks............ ¥175,592 ¥207,639 ¥32,047 8,668 ¥199,686 ¥273,762 ¥74,076
Bonds....................... 5 7 2 22 5 8 3
-------- -------- -------- --------- -------- -------- --------
175,597 207,646 32,049 358,690 199,691 273,770 74,079
-------- -------- -------- --------- -------- -------- --------
Investments in securities:
Corporate stocks............ 44,001 76,770 32,769 366,749 39,642 87,228 47,586
Other....................... - - - - 593 465 (128)
-------- -------- -------- --------- -------- -------- --------
44,001 76,770 32,769 366,749 40,235 87,693 47,458
-------- -------- -------- --------- -------- -------- --------
Total......................... ¥219,598 ¥284,416 ¥64,818 5,439 ¥239,926 ¥361,463 ¥121,537
YY易游平台YY易游平台 YY易游平台YY易游平台 YY易游平台YY易游平台 YY易游平台YY易游平台= YY易游平台YY易游平台 YY易游平台YY易游平台 YY易游平台YY易游平台
-------- -------- -------- --------- -------- -------- --------
These amounts do not include unlisted stocks. The
Company does not have any outstanding options or futures
transactions.
4.Short-Term Borrowings YY易游平台d Long-Term Debt
----------------------------------------------------------------------
Short-term borrowings at March 31, 1995 and 1994 consisted
of the following:
Thousands of
U.S.YY易游平台
Bank loans............................................... ¥239,286 ¥173,046 ,678,075
Commercial paper......................................... 102,000 143,000 1,141,578
---------- ---------- -----------
¥341,286 ¥316,046 ,819,653
========== ========== ===========
---------- ---------- -----------
Long-term Debt at March 31, 1995 and 1994 consisted of the
following:
Thousands of
U.S.YY易游平台
7.7% to 8.2% mortgage bonds, due 1995.................... ¥ 10,400 ¥ 27,600 $ 116,396
3.9% domestic mortgage bonds with warrants, due 1994..... - 50,000 -
4.875% U.S. dollar bonds with warrants, due 1994......... - 47,478 -
2.8% domestic bonds with warrants, due 1995.............. 50,000 50,000 559,597
4.5% U.S. dollar bonds with warrants, due 1996........... 48,626 48,626 544,219
Floating rate(Libor plus 0.2%) notes due 1996............ 20,000 20,000 223,839
2.65% to 7.1% yen bonds, due 1996 through 2003........... 370,000 310,000 4,141,018
Loans, principally from banks and insurance
companies, due serially through 2020................... 219,325 230,924 2,454,673
---------- ---------- -----------
718,351 784,628 8,039,742
Less current portion..................................... 91,348 146,982 1,022,361
---------- ---------- -----------
¥627,003 ¥637,646 ,017,381
========== ========== ===========
---------- ---------- -----------
Mortgage bonds totaling ¥10,400 million(6,396
thousand) at March 31, 1995 were secured by enterprise
mortgages, which give the holders a security interest in all
assets subordinate to that of present or future secured
creditors but senior to that of general unsecured creditors.
================================================================================
A summary of the terms for exercise of the detachable warrants was as follows:
================================================================================
Warrants originally issued with 2.8% 4.5%
bonds bonds
------------- -------------
Exercise period: On and after Jul. 15, '91 Jul. 10, '91
To Jun. 16, '95 Jun. 12, '96
Exercise price, which is subject to adjustment in certain circumstances ¥531.0(.94) ¥531.0(.94)
The aggregate annual maturities of long-term debt were as follows:
Thousands of
Million U.S.dollars
Years ending March 31 of yen (Note 1)
==================================================================== ========== ===========
1996................................................................ ¥ 91,348 ,022,361
1997................................................................ 119,069 1,332,613
1998................................................................ 106,178 1,188,338
1999 and thereafter................................................. 401,756 4,496,430
---------- -----------
¥718,351 ,039,742
========== ===========
---------- -----------
At March 31, 1995 assets pledged as collateral for short-
term borrowings and long-term debt were as follows:
Thousands of
Million U.S.dollars
of yen (Note 1)
==================================================================== ========== ===========
Marketable securities, investment securities and investment in
subsidiaries and affiliates....................................... ¥13,479 0,856
Plant and equipment-net of accumulated depreciation................. 36,426 407,678
---------- -----------
¥49,905 8,534
========== ===========
---------- -----------
Secured short-term borrowings and long-term debt.................... ¥34,777 9,222
---------- -----------
5.YY易游平台ockholders' Equity
----------------------------------------------------------------------
Under the Commercial Code of JapYY易游平台, the entire amount of
the issue price of shares is required to be accounted for as
stated capital, although a compYY易游平台y may, by resolution of its
board of directors, account for YY易游平台 amount not exceeding one-
half of the issue price of the new shares as additional paid-in
capital.
The Commercial Code of JapYY易游平台 provides that YY易游平台 amount
equal to at least 10 percent of YY易游平台y disbursement as YY易游平台 appro-
priation of retained earnings in each period shall be appro-
priated as a legal reserve until the reserve equals 25 percent of
the amount of common stock. This reserve is not available for
dividends, but may be used to reduce a deficit by a resolution
of the stockholders or may be capitalized by a resolution of
the board of directors.
6.GYY易游平台eral Reserve
----------------------------------------------------------------------
The Special Taxation Measures Law of Japan permits the
Company to take certain reserves as tax deductions. Such
reserves, which are provided by appropriation of unappropr-
iated retained earnings and included in general reserve, are
deductible from taxable income, but must be restored to
taxable income in the future.
Such reserves at March 31, 1995 and 1994 were as follows:
Thousands of
U.S.YY易游平台
Reserve for replacement of properties.................... ¥30,616 ¥31,247 2,652
Reserve for possible losses on overseas investments...... 187 327 2,093
Reserve for special depreciation......................... 188 237 2,104
---------- ---------- -----------
¥30,991 ¥31,811 6,849
========== ========== ===========
---------- ---------- -----------
7.Sales to YY易游平台d Purchases from Subsidiaries YY易游平台d Affiliates
----------------------------------------------------------------------
Sales to and purchases from subsidiaries and Affiliates for the
years ended March 31, 1995 and 1994 were as follows:
Thousands of
U.S.YY易游平台
Sales.................................................... ¥414,765 ¥381,268 ,642,026
Purchases................................................ 291,621 266,556 3,263,805
---------- ---------- -----------
8.DisaYY易游平台er Casualty Loss
----------------------------------------------------------------------
The Company suffered extensive damage to fixed assets and
incurred related cost of production stoppage and repairs in the
Great Hanshin Earthquake of January 17, 1995, as follows:
Thousands of
Million U.S.YY易游平台
Destroyed plant and equipment....................................... ¥ 5,149 $ 57,627
Repairs and removal of debris....................................... 6,972 78,030
Fixed costs during production stoppage.............................. 15,271 170,912
Provision for loss from natural disaster(Note 2(10))................ 31,700 354,785
Other related expenses.............................................. 5,052 56,542
---------- -----------
¥64,144 7,896
========== ===========
---------- -----------
9.ContingYY易游平台t Liabilities
----------------------------------------------------------------------
At March 31, 1995 the Company was contingently liable as follows:
Thousands of
Million U.S.YY易游平台
Trade notes discounted.............................................. ¥66,526 4,555
Guarantees of loans................................................. 4,104 45,932
|
http://www.kobelYY易游平台.YY易游平台m