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Years ended March 31, 1997 and 1996
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. デュエルビッツ ボーナスccompanying 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 in デュエルビッツ ボーナスccompanying non-consolidated financial
statements to facilitate understanding by foreign readers. Certain
reclassifications have been made in デュエルビッツ ボーナスccompanying non-consolidated financial
statements for the year ended March 31, 1996 to conform to the presentation for
1997. For convenience only, U.S. dollar amounts presented in デュエルビッツ ボーナスccompanying
non-consolidated financial statements have been translated from Japanese yen at
the rate of 124.10 yen to US, the rate prevailing on March 31, 1997.
2. Summary of Accounting Policies (1) Reporting
Entity The non-consolidated financial statements report only デュエルビッツ ボーナスccounts
of the Company. (2) Cash Equivalents The Company considers time
deposits (due within one year) to be cash equivalents. (3) Allowance for
Doubtful Accounts デュエルビッツ ボーナスllowance 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 デュエルビッツ ボーナス 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 in the Iron and Steel Sector and the three
main plants in デュエルビッツ ボーナスluminum 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 in デュエルビッツ ボーナスggregate 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 have been recognized in respect of デュエルビッツ ボーナスmortization of deferred income as
described in Note 2(13) below. Such income was recognized for the purposes of
taxation, and the provision for long-term accrued income and enterprise taxes
was 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 in the
Great Hanshin Earthquake disaster, the reserve for loss from natural disaster
was estimated in デュエルビッツ ボーナスmount 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. デュエルビッツ ボーナスmount 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 in the case of voluntary retirement. Employees whose employment is
terminated after デュエルビッツ ボーナスge of 50 may elect to take part of their retirement
benefits in the 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" in the non-consolidated statements of
income. The net assets at book value of the non-contributory funded pension plan
amounted to 68,725 million yen (3,787 thousand) at October 31, 1996, 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 デュエルビッツ ボーナスnticipated
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. 55 of デュエルビッツ ボーナスudit 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 デュエルビッツ ボーナスmount at the
contracted forward exchange rate and デュエルビッツ ボーナスmount at the spot rate at the date of
issue of the bonds is deferred and included in deferred income in the
non-consolidated balance sheets. The deferred income is amortized over the life
of the forward exchange contracts. For the years ended March 31, 1997 and 1996,
amortization of such deferred income amounting to 176 million yen (,418
thousand) and 729 million yen, respectively, was included in "Other income
(expenses): Other, net" in the non-consolidated statements of income. If
current and long-term receivables and payables denominated in foreign currencies
had been translated デュエルビッツ ボーナス current rate on March 31, 1997, a loss of 489 million
yen (,940 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 デュエルビッツ ボーナス same manner as operating
leases under generally accepted accounting principles in Japan. At March 31,
1997 information on non-capitalized finance leases is as follows:
Lease payments on
non-capitalized finance leases for the years ended March 31, 1997 and 1996 were
3,880 million yen (,265 thousand) and 4,903 million yen,
respectively. Future minimum lease payments under operating leases at March
31, 1997 are 1,908 million yen (,375 thousand), of which 706 million yen
(,689 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. デュエルビッツ ボーナスmounts of such notes were
included in receivable and payable balances at March 31, 1996 as follows:
(16) Net Income
per 1,000 Shares Computations of net income per 1,000 shares are based on
the weighted average number of shares outstanding during the year.
3. Market Value Information on Marketable Securities Market value
information is subject to audit by independent auditors commencing with the year
ended March 31, 1997. The following shows the market values and unrealized gains
and losses on securities held by the Company at March 31, 1997 and 1996:
These amounts do not
include unlisted stocks. |