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Notes to Non-Consolidated Financial Statements
1. Basis of Presentation of Financial Statements
Kobe Steel, Ltd. (the "Company"), a Japanese corporation,
maintains its records and prepares its financial statements in
Japanese yen in accordance with generally accepted
accounting principles in Japan. The accompanying non-
consolidated financial statements have been translated from
the non-consolidated financial statements which are prepared
for Japanese domestic purposes, in accordance with the
provisions of the Securities and Exchange Law of Japan and
filed with the Ministry of Finance of Japan and stock
exchanges in Japan. Certain modifications, including
presentation of the statements of stockholders' equity and
cash flows, have been made デュエルビッツ ボーナス accompanying non-
consolidated financial statements to facilitate understanding
by foreign readers.
Certain reclassifications have been made デュエルビッツ ボーナス accompany-
ing non-consolidated financial statements for the year ended
March 31, 1995 to conform to the presentation for 1996.
For convenience only, U.S. dollar amounts presented デュエルビッツ ボーナス
accompanying non-consolidated financial statements have
been translated from Japanese yen at the rate of ¥106.35 to
US, the rate prevailing on March 31, 1996.
2. Summary of Accounting Policies
(1) Reporting Entity
The non-consolidated financial statements report only the
accounts of the Company.
(2) Cash Equivalents
The Company considers time deposits (due within one year)
to be cash equivalents.
(3) Allowance for Doubtful Accounts
The allowance 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 and Investments in Securities
Listed equity securities included in both marketable securities
and investments in securities, except for certain equity
securities of subsidiaries and affiliates in which the
Company'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 and
affiliates, are stated at moving average cost. If significant
impairment of value is deemed permanent, cost is
appropriately reduced.
(5) Inventories
Inventories are valued at cost, as determined by the following
methods:
Two main works デュエルビッツ ボーナス Iron and Steel Sector and the
three main plants デュエルビッツ ボーナス Aluminum and Copper Sector
........................ Last-in, first-out method
Finished goods and work in process in one plant デュエルビッツ ボーナス
Iron and Steel Sector and the Machinery and
Information Sector.. Specific identification method
Others................................ Average method
(6) Depreciation of Plant and Equipment
Buildings and structures in all locations and machinery and
equipment located デュエルビッツ ボーナス Kakogawa Works, the Kobe Works,
the Takasago Works, the Moka Plant, the Chofu Plant and the
Daian Plant are depreciated using the straight-line method
and all other machinery and equipment are depreciated using
the declining balance method over estimated useful lives.
(7) Long-term Construction Contracts
Sales and the related costs of certain long-term (over one
year) construction contracts are recognized by the percentage
of completion method.
(8) Research and Development Expenses
Expenses in respect of the development of new products and
research into and the application of new technologies (being
in each case expenses which are expected to contribute to
future sales) are deferred and amortized over five years.
(9) Income and Enterprise Taxes
Income and enterprise taxes, which デュエルビッツ ボーナス aggregate indicate a
statutory tax rate of approximately 52 percent, are based on
taxable income. Enterprise tax is included in selling, general
and administrative expenses.
Long-term accrued income and 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, and the provision for long-term
accrued income and 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 and other expenses
related to fixed assets that were damaged デュエルビッツ ボーナス Great
Hanshin Earthquake disaster, the reserve for loss from natural
disaster is estimated デュエルビッツ ボーナス amount considered necessary as of
the end of the year.
(11) Employees' Retirement Benefits
Substantially all employees of the Company 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 and cause of retirement. In
the case of involuntary retirement, the employee is entitled to
a greater payment than デュエルビッツ ボーナス case of voluntary retirement.
Employees whose employment is terminated after the age
of 50 may elect to take part of their retirement benefits デュエルビッツ ボーナス
form of pension payments. The funds required to make
pension payments are entrusted to an outside trustee. The
liability in respect of lump-sum retirement benefits is stated at
the present value of the unfunded portion of the expected
future retirement benefits attributable to eligible employees’
years of service as at the balance sheet date. Prior service
costs in respect of the pension plan, 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 balance method at the
rate of 15 percent per annum and included in "Other income
(expenses): Amortization of prior service costs of the pension
plan" デュエルビッツ ボーナス non-consolidated statements of operations. The
net assets at book value of the non-contributory funded
pension plan amounted to ¥60,845 million at October 31,
1995, the date of the most recent available information.
(12) Allowance for Special Repairs
Blast furnaces and hot blast stoves, including related
machinery and equipment, periodically require substantial
component replacement and repair. The estimated future
costs of such work are provided for and charged to income on
a straight-line basis over the period to the date of the
anticipated replacement and repair. The difference between
such estimated costs and actual costs is charged or credited to
income at the time the repairs take place.
(13) Translation of Foreign Currencies
Current receivables and payables denominated in foreign
currencies are translated at historical rates in accordance with
Statement No. 46 of the Audit Committee of the Japanese
Institute of Certified Public Accountants.
All other assets and liabilities denominated in foreign
currencies are translated at historical rates except those,
including bonds denominated in foreign currencies, hedged
by forward exchange contracts. Such bonds are translated
into Japanese yen at the contracted forward exchange rates
and the difference between the amount at the contracted
forward exchange rate and the amount at the spot rate at the
date of issue of the bonds is deferred and included in deferred
income デュエルビッツ ボーナス non-consolidated balance sheets. The deferred
income is amortized over the life of the forward exchange
contracts. For the years ended March 31, 1996 and 1995,
amortization of such deferred income amounting to ¥729
million (,855 thousand) and ¥909 million, respectively, was
included in “Other income (expenses): Other, net” デュエルビッツ ボーナス
non-consolidated statements of operations.
If current and long-term receivables and payables
denominated in foreign currencies had been translated at the
current rate on March 31, 1996, a loss of ¥382 million (,592
thousand) would have been recognized.
(14) Leases
Finance leases which do not transfer ownership and do not
have bargain purchase provisions may be accounted for in
the same manner as operating leases under generally
accepted accounting principles in Japan.
Lease payments for such leases for the year ended March
31, 1996 and 1995 were ¥4,903 million (,102 thousand)
and ¥5,169 million, respectively.
The future minimum lease payments under such leases at
March 31, 1996 are ¥19,195 million (0,489 thousand), of
which ¥4,602 million (,272 thousand) is due within one
year.
The future minimum lease payments under operating leases at
March 31, 1996 are ¥591 million (,557 thousand),
of which ¥193 million (,815 thousand) is due within one
year.
(15) Notes Receivable and Payable Maturing on March 30 and 31, 1996
In accordance with generally accepted accounting principles
in Japan, the Company recorded the settlement of notes
receivable and payable maturing on March 30 and 31, 1996,
banking holidays in Japan, on the next following banking
day.
The amounts of such notes were included デュエルビッツ ボーナス notes
receivable and payable balance at March 31, 1996 as follows:
Thousands of
Millions of yen U.S. dollars
------------------------ ----------------- --------------
Notes receivable........ ¥ 781 $ 7,344
Notes payable........... 25,249 237,414
----------------- --------------
(16) Net income (loss) per 1,000 Shares
Computations of net income (loss) per 1,000 shares are based
on the weighted average number of shares outstanding during
the year.
3. Market Value Information on Marketable Securities (Unaudited)
Market value information relating to marketable securities is
required to be disclosed デュエルビッツ ボーナス Securities Report filed with the
Ministry of Finance under the Securities and Exchange Law of
Japan. Such market value information does 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 values and
unrealized gains and losses on securities held by the
Company at March 31, 1996 and 1995:
These amounts do not include unlisted stocks. デュエルビッツ ボーナスompany
does not have any outstanding options or futures transactions.
4. Short-Term Borrowings and Long-Term Debt
Short-term borrowings at March 31, 1996 and 1995 consisted
of the following:
Long-term debt at March 31, 1996 and 1995 consisted of the
following:
The detachable warrants issued with the 4.5% bonds are exercisable through June 12, 1996
at a price of ¥531 (.99) per share, subject to adjustment in certain circumstances.
デュエルビッツ ボーナスggregate annual maturities of long-term debt were as follows:
At March 31, 1996, assets pledged as collateral for short-
term borrowings and long-term debt were as follows :
5. Contingent Liabilities
At March 31, 1996 デュエルビッツ ボーナスompany was contingently liable as follows:
6. Stockholders' Equity
Under the Commercial Code of Japan, the entire amount of
the issue price of shares is required to be accounted for as
stated capital, although a company may, by resolution of its
board of directors, account for an amount not exceeding one-
half of the issue price of the new shares as additional paid-in
capital.
The Commercial Code of Japan provides that an amount
equal to at least 10 percent of any disbursements as an
appropriation of retained earnings in each period shall be
appropriated as legal reserve until the reserve equals 25
percent of デュエルビッツ ボーナスmount 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.
7. General 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
unappropriated retained earnings and included in general
reserve, are deductible from taxable income, but must be
restored to taxable income デュエルビッツ ボーナス future.
Such reserves at March 31, 1996 and 1995 were as follows:
8. Sales to and Purchases from Subsidiaries and Affiliates
Sales to and purchases from subsidiaries and affiliates for
the years ended March 31, 1996 and 1995 were as follows:
9. Disaster Casualty Loss
The Company suffered extensive damage to fixed assets and
incurred related costs of production stoppage and repairs デュエルビッツ ボーナス
Great Hanshin Earthquake of January 17, 1995. The losses for
the years ended March 31, 1996 and 1995 were as follows:
10. Subsequent Event
Disposition of Undisposed Accumulated Deficit
At the general meeting of stockholders held on June 27, 1996,
disposition of undisposed accumulated deficit at March 31,
1996 was approved as follows:
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