Non-Consolidated Financial Statements
Yodogawa Steel Works, Ltd.
Years ended March 31, 2000 and 2001
with Independent Auditors’ Report

Yodogawa Steel Works, Ltd.
Non-Consolidated Financial Statements
Years ended March 31, 2000 and 2001

Contents

Non-Consolidated Financial Statements
Independent Auditors’ Report on Non-Consolidated Financial Statements.............................. 1
Non-Consolidated Balance Sheets......................................................................................... 2
Non-Consolidated Statements of Income ............................................................................... 4
Non-Consolidated Statements of Shareholders’ Equity........................................................... 5
Notes to Non-Consolidated Financial Statements................................................................... 6

Independent Auditors’ Reporton Non-Consolidated Financial Statements
The Board of Directors and the Shareholders
Yodogawa Steel Works, Ltd.

We have audited the non-consolidated balance sheets of Yodogawa Steel Works, Ltd. as ofMarch 31, 2000 and 2001, and the related non-consolidated statements of income andshareholders’ equity for the two years then ended, all expressed in yen. Our audits were madein accordance with auditing standards, procedures and practices generally accepted and appliedin Japan and, accordingly, included such tests of the accounting records and such other auditing
procedures as we considered necessary in the circumstances.
In our opinion, the accompanying non-consolidated financial statements, expressed in yen,present fairly the financial position of Yodogawa Steel Works, Ltd. at March 31, 2000 and
2001, and the results of its operations for the years then ended in conformity with accounting
principles and practices generally accepted in Japan applied on a consistent basis.
As described in Note 1, Yodogawa Steel Works, Ltd. has adopted new accounting standards
for tax-effect accounting effective the year ended March 31, 2000 and for employees’
retirement benefits, financial instruments and foreign currency translation effective the year ended
March 31, 2001 in the preparation of its non-consolidated financial statements.
The U.S. dollar amounts in the accompanying non-consolidated financial statements with respect
to the year ended March 31, 2001 are presented solely for convenience. Our audit also
included the translation of yen amounts into U.S. dollar amounts and, in our opinion, suchtranslation has been made on the basis described in Note 2.

Osaka, Japan
June 28, 2001
See Note 1 which explains the basis of preparation of the non-consolidated financial
statements of Yodogawa Steel Works, Ltd. under Japanese accounting principles andpractices.

1

Yodogawa Steel Works, Ltd.
Non-Consolidated Balance Sheets
March 31, 2000 and 2001

Millions of yen
2000
2001
AssetsCurrent assets:
Cash and cash equivalents
Short-term investments
Marketable securities (Note 3)
Notes and accounts receivable:
Subsidiaries and affiliates
Trade
Less allowance for doubtful receivables
Inventories (Note 4)
Deferred income taxes (Note 7)
Other current assets
Total current assets
Property, plant and equipment, at cost
(Note 5):Land
Buildings and structures
Machinery, equipment and vehicles
Construction in progress
Less accumulated depreciation
Property, plant and equipment, net
Investments and other assets:
Investments in securities (Note 3)
Investments in and advances to subsidiaries andaffiliates (Note 3)
Deferred income taxes (Note 7)
Other assets
Total investments and other assets

Total assets

2

Thousands of
U.S. dollars(Note 2)
2001

¥ 25,157
2,000
20,729¥ 19,072–
3,132$ 153,931–
25,27819,341
22,041(153)
26,356327
4,241
120,039

22,052
23,392(130)
27,520422
2,506
97,966

177,982
188,797(1,049)222,115
3,406
20,226790,686

18,49440,198
101,932
3,436(105,074)
58,986

18,27041,877
103,567
134(106,587)
57,261

147,457
337,990
835,892
1,082(860,266)
462,155

1,018

17,867

144,205

14,024
1,097
1,586
17,725

12,922685
1,674
33,148104,294
5,529
13,510267,538¥ 196,750¥ 188,375$1,520,379

Millions of yen
2000
2001
Liabilities and shareholders ’ equity
Current liabilities:
Short-term bank loans (Note 5)
Current portion of long-term debt (Note 5)
Notes and accounts payable:
Subsidiaries and affiliates
Trade
Construction
Accrued expenses
Accrued income taxes (Note 7)
Reserve for loss on restructuring
Other current liabilities
Total current liabilities
Long-term liabilities:
Long-term debt (Note 5)
Accrued retirement benefits
Guarantee deposits (Note 5)
Total long-term liabilities

Thousands of
U.S. dollars(Note 2)
2001

¥ 10,000–¥ 9,780
5,000$

78,93540,355

2,087
19,868
2,180
3,444
80
269
1,971
39,8992,359
21,204
1,044
3,342
29
–
2,010
44,76819,040171,138
8,426
26,973234–
16,223361,324

15,0007,582
1,454
24,036

5,000
7,550
1,252
13,80240,35560,936
10,105111,396

23,221–
23,4973,250
82,847
132,815¥196,750–
23,221
23,497
3,402
79,685
129,805¥188,375–
187,417
189,645
27,457643,140
1,047,659$1,520,379

Contingent liabilities (Note 10)
Shareholders’ equity (Note 6):
Common stock, ¥50 par value:
Authorized:
March 31, 2000 - 781,945,000 shares
March 31, 2001 - 772,439,000 shares
Issued:March 31, 2000 - 212,317,086 shares
March 31, 2001 - 202,811,086 shares
Additional paid-in capital
Legal reserve (Note 11)
Retained earnings (Note 11)
Total shareholders’ equity
Total liabilities and shareholders’ equity

See accompanying notes to non-consolidated financial statements.
3

Yodogawa Steel Works, Ltd.
Non-Consolidated Statements of Income
Years ended March 31, 2000 and 2001

Millions of yen
2000
2001
Net sales
Cost of sales
Gross profit¥117,382
99,396
17,986¥111,066
93,455
17,611$896,416
754,277
142,139

16,995991

16,515
1,096

133,293
8,846

1,186
(420)
2,332
(332)
162

1,528
(373)
991
(392)
2,301

12,333(3,010)
7,998(3,164)
18,571(328)(1,266)
(269)

(176)
–
–

(1,421)
–
–

–
–

1,627
(725)

13,132(5,851)

–
179
2,235

(2,087)(2,123)
1,667(16,844)(17,136)
13,454

867
(37)
830
1,405

236
318
554
1,113

1,905
2,566
4,471
$ 8,983

Selling, general and administrative expenses(Note 8)Operating income
Other income (expenses):
Interest and dividend income
Interest expense
Gain on sales of securities
Loss on revaluation of securities
Gain on sales of property, plant and equipment
Loss on disposal of property, plant andequipment
Loss on liquidation of a subsidiary
Provision for reserve for loss on restructuring
Gain on contribution of securities to employees’
retirement benefit trust
Loss on restructuring
Net retirement benefit obligation at transition(Note 1(l))
Other, net
Income before income taxes
Income taxes (Note 7):
Current
Deferred
Net income¥¥

U.S. dollars(Note 2)

Yen
Amounts per share:
Net income
Cash dividends

Thousands of
U.S. dollars(Note 2)
2001

¥6.44
7.00

¥5.35
7.00

$0.04
0.06

See accompanying notes to non-consolidated financial statements.
4

Yodogawa Steel Works, Ltd.
Non-Consolidated Statements of Shareholders’ Equity
Years ended March 31, 2000 and 2001

Thousands of
U.S. dollars(Note 2)
2001

Millions of yen
2000
2001
Common stock
Balance at beginning and end of the year

¥23,221¥23,221$187,417

Additional paid-in capital
Balance at beginning and end of the year

¥23,497¥23,497$189,645¥ 3,089¥ 3,250$ 26,230161¥ 3,250152¥ 3,402

1,227$ 27,457¥85,803¥82,847$668,660

1,405

1,113

8,983

1,387

–

–

1,544
60
161
3,983
¥82,847

1,470
50
152
2,603
¥79,685

11,864403
1,227
21,009$643,140

Legal reserve
Balance at beginning of the year
Add:
Transfer from retained earnings
Balance at end of the year
Retained earnings
Balance at beginning of the year
Add:
Net income
Cumulative adjustment arising frominitial adoption of tax-effect accounting(Note 1(k))
Deduct:Cash dividends paid
Bonuses to directors and statutory auditors
Transfer to legal reserve
Retirement of treasury stock
Balance at end of the year

See accompanying notes to non-consolidated financial statements.
5

Yodogawa Steel Works, Ltd.
Notes to Non-Consolidated Financial Statements
March 31, 2001

1. Summary of Significant Accounting Policies(a) Basis of Preparation
The accompanying non-consolidated financial statements of Yodogawa Steel Works, Ltd.
(the “Company”) have been prepared in accordance with accounting principles andpractices generally accepted and applied in Japan, which may differ in certain material
respects from accounting principles and practices generally accepted in countries andjurisdictions other than Japan, and have been compiled from those prepared by theCompany as required under the Securities and Exchange Law of Japan.
In addition, the notes to the non-consolidated financial statements include information which
is not required under accounting principles generally accepted in Japan but is presented
herein as additional information.
Certain reclassifications of previously reported amounts have been made to thenon-consolidated financial statements for the year ended March 31, 2000 to conform themto the 2001 presentation. Such reclassifications had no effect on net income orshareholders’ equity.
(b) Foreign Currency Translation
Monetary assets and liabilities denominated in foreign currencies are translated into yen at
the rates of exchange in effect at the balance sheet date. Other assets and liabilities
denominated in foreign currencies are translated at their historical rates. All revenues andexpenses associated with foreign currencies are translated at the rates of exchange
prevailing when such transactions were made. The resulting exchange losses and gains arecharged or credited to income.
Effective April 1, 2000, the Company adopted a revised accounting standard for foreign
currency translation. The effect of the adoption of the revised standard on the
non-consolidated financial statements was immaterial for the year ended March 31, 2001.
(c) Cash Equivalents
Cash and cash equivalents consist of cash on hand, deposits with banks withdrawable on
demand, and short-term investments which are readily convertible to cash subject to an
insignificant risk of changes in their value and which were purchased with an original maturityof three months or less.

6

Yodogawa Steel Works, Ltd.
Notes to Non-Consolidated Financial Statements (continued)

1. Summary of Significant Accounting Policies (continued)(d) Securities
Up to the year ended March 31, 2000, marketable securities were stated at the lower ofcost or market, cost being determined by the moving average method, and securities otherthan marketable securities were stated at cost determined by the moving average method.
Effective April 1, 2000, the Company adopted a new accounting standard for financial
instruments which requires that securities be classified into three categories: trading
securities, held-to-maturity debt securities or other securities. Under this standard, trading
securities are carried at fair value and gain and loss, both realized and unrealized, arecharged to income. Held-to-maturity debt securities are carried at their amortized cost.
Marketable securities classified as other securities are carried at fair value with changes in
unrealized holding gain or loss, net of the applicable income taxes, reported as a separate
component of shareholders’ equity. Non-marketable securities classified as othersecurities are carried at cost.
As permitted under the new standard, the Company has postponed recording marketablesecurities classified as other securities at fair value, from the current year, to the year ending
March 31, 2002. The following pro forma amounts represent the carrying value, fair value,
unrealized holding gain (net of the applicable income taxes) and the deferred tax liability (theapplicable income taxes on the unrealized holding gain), which would have been reflected in
the non-consolidated balance sheet as of March 31, 2001 if marketable securities classified
as other securities were carried at fair value:

Carrying value
Fair value
Unrealized holding gain
Deferred tax liability

Millions of yen

Thousands of
U.S. dollars¥20,833
31,3346,091
4,410$168,144
252,897
49,16035,593As of April 1, 2000, the Company assessed its intent in holding its securities, classified themas “held-to-maturity debt securities” and “other securities,” and accounted for the securities
at March 31, 2001 in accordance with the new standard referred to above. As a result,securities of ¥17,599 million ($142,042 thousand), which had been included in marketablesecurities at March 31, 2000, were reclassified to investments in securities as of April 1,
2000. The effect of the adoption of this standard for financial instruments was to increase
income before income taxes by ¥1,428 million ($11,525 thousand).

7

Yodogawa Steel Works, Ltd.
Notes to Non-Consolidated Financial Statements (continued)

1. Summary of Significant Accounting Policies (continued)(e) Inventories
Finished goods, work in process and raw materials are stated at cost principally determinedby the last-in, first-out method. Supplies are stated at cost determined by the first-in,
first-out method.
Real estate held for sale is stated at cost determined by the specific identification method.
(f) Property, Plant and Equipment and Depreciation
Property, plant and equipment is stated on the basis of cost.
Depreciation of property, plant and equipment is calculated by the declining-balancemethod over the useful lives of the respective assets, except that the straight-line method isapplied to buildings (except for structures attached to the buildings) acquired subsequent toApril 1, 1998.
The useful lives adopted for calculating depreciation are principally as follows:
Buildings and structures
Machinery, equipment and vehicles

3 to 50 years
4 to 17 years

Significant renewals and additions are capitalized at cost. Maintenance and repairs arecharged to income as incurred.
(g) Intangible Assets
Intangible assets are stated on the basis of cost. Amortization is calculated by thestraight-line method over the useful lives of the respective assets.
(h) Allowance for Doubtful Receivables
Up to the year ended March 31, 2000, the Company provided an allowance for doubtfulreceivables principally at an estimated aggregate amount of probable bad debts plus the
maximum amount permitted to be charged to income under the Corporation Tax Law ofJapan.
Effective April 1, 2000, the Company has adopted a new accounting standard for financial
instruments. Under this accounting standard, the Company has provided an allowance for
doubtful receivables at an amount calculated based on the Company’s historical experienceof bad debts on ordinary receivables plus an additional estimate of probable specific bad
debts from customers experiencing financial difficulties. The aggregate effect of the
adoption of the new standard is disclosed in Note 1(d), “Securities.”8

Yodogawa Steel Works, Ltd.
Notes to Non-Consolidated Financial Statements (continued)

1. Summary of Significant Accounting Policies (continued)(i) Research and Development Expenses and Computer Software
Research and development expenses are charged to income as incurred.
Expenditures relating to the development of computer software intended for internal use arecharged to income when incurred, unless these are deemed to contribute to the generationof future income or cost savings. Such expenditures are capitalized as assets andamortized by the straight-line method over their estimated useful life of five years.
(j) Leases
The Company leases certain equipment under noncancelable leases referred to as financeleases. Finance leases other than those which transfer the ownership of the leased
property to the Company are accounted for as operating leases.
(k) Income Taxes
Up to the year ended March 31, 1999, deferred income taxes were not provided for timing
differences in the recognition of income and expenses for financial and tax reporting
purposes.
Effective April 1, 1999, the Company adopted tax-effect accounting for the interperiod
allocation of income taxes. The cumulative effect of this change in method of accounting
was reported as “Cumulative adjustment arising from initial adoption of tax-effectaccounting” in the non-consolidated statement of shareholders’ equity for the year ended
March 31, 2000. The effect of this change was that deferred income taxes - current
assets, deferred income taxes - non-current assets, and retained earnings at March 31,
2000 increased by ¥327 million, ¥1,097 million and ¥2,374 million, respectively, and net
income for the year then ended increased by ¥37 million.
(l) Retirement Benefits
Employees of the Company are covered by an employees’ retirement benefit plan and an
employees’ pension plan. The employees’ retirement benefit plan provides for payment of
a lump-sum amount determined by reference to the basic salary, length of service andconditions under which the termination occurs. The employees’ pension plan, which is afunded non-contributory plan, partially covers the benefits under the employees’ retirement
benefit plan to employees who retire after fifteen or more years of service.

9

Yodogawa Steel Works, Ltd.
Notes to Non-Consolidated Financial Statements (continued)

1. Summary of Significant Accounting Policies (continued)(l) Retirement Benefits (continued)
Up to the year ended March 31, 2000, accrued retirement benefits were stated at theamount which would be required to be paid if all employees covered by the retirement
benefit plan voluntarily terminated their employment at the balance sheet date, less the assetsof the pension plan.
Effective April 1, 2000, the Company adopted a new accounting standard for retirement
benefits. In accordance with this standard, accrued retirement benefits for employees at
March 31, 2001 have been provided mainly at an amount calculated based on theretirement benefit obligation and the fair value of the pension plan assets as of March 31,
2001, as adjusted for unrecognized actuarial loss. The retirement benefit obligation is
attributed to each period by the straight-line method over the estimated years of service ofthe eligible employees. The net retirement benefit obligation at transition of ¥2,087 million($16,844 thousand) has been fully charged to income for the year ended March 31, 2001.
The effect of the adoption of the new standard for retirement benefits was to decrease
income before income taxes by ¥582 million (¥4,697 thousand) for the year ended March
31, 2001.
Actuarial gain and loss are amortized in the year following the year in which the gain or loss
is recognized by the straight-line method over 10 years, which is within the estimatedaverage remaining years of service of the eligible employees.
The directors and statutory auditors of the Company are customarily entitled to lump-sum
payments under the unfunded retirement benefit plan. The provision for retirement benefits
for directors and statutory auditors has been made at an estimated amount based on the
Company’s internal rules.
(m) Hedge Accounting
Under the new accounting standard for financial instruments effective April 1, 2000, gain orloss on derivatives designed as hedging instruments is deferred until the loss or gain on theunderlying hedged item is recognized. Interest rate swaps which meet certain conditions
are accounted for as if the interest rates applied to the swaps had originally applied to theunderlying debt and others. Receivables and payables hedged by forward foreignexchange contracts which meet certain conditions are translated at the corresponding
foreign exchange contract rates.

10

Yodogawa Steel Works, Ltd.
Notes to Non-Consolidated Financial Statements (continued)

1. Summary of Significant Accounting Policies (continued)(n) Amounts Per Share
The computation of non-consolidated net income per share is based on the weighted
average number of shares of common stock outstanding during each year.
Cash dividends per share represent the cash dividends declared as applicable to therespective years.

2. U.S. Dollar Amounts
The translation of yen amounts into U.S. dollar amounts is included solely for convenience, as amatter of arithmetic computation only, at the rate of ¥123.90 = U.S.$1.00, the approximate
exchange rate prevailing on March 31, 2001. The translation should not be construed as arepresentation that yen have been, could have been, or could in the future be, converted into U.S.
dollars at the above or any other rate.

3. Fair Value of Securities
Information with respect to marketable securities at March 31, 2000 and 2001 is disclosed on aconsolidation basis. See Note 3 to the consolidated financial statements.
Information with respect to the carrying and fair value of and unrealized loss on marketablesecurities included in investments in subsidiaries as of March 31, 2001 is summarized as follows:

Investments in
subsidiaries

Millions of yen
Carrying
Unrealized
value
Fair value
loss

Thousands of U.S. dollars
Carrying
Unrealized
value
Fair valueloss¥11,310$91,283¥8,712¥(2,598)$70,314$(20,969)

11

Yodogawa Steel Works, Ltd.
Notes to Non-Consolidated Financial Statements (continued)

4. Inventories
Inventories at March 31, 2000 and 2001 were as follows:
Thousands of
U.S. dollars
2001

Millions of yen
2000
2001
Finished goods
Work in process
Raw materials and supplies
Real estate held for sale

¥15,243
3,813
7,128
172
¥26,356¥16,652
3,554
7,185
129
¥27,520$134,399
28,68457,991
1,041$222,115

5. Short-Term Bank Loans, Long-Term Debt and Guarantee Deposits
Short-term bank loans represent overdrafts at annual interest rates of approximately 0.58% and0.846% at March 31, 2000 and 2001, respectively.
Long-term debt at March 31, 2000 and 2001 was as follows:
Thousands of
U.S. dollars
2001

Millions of yen
2000
2001
1.8% unsecured bonds, payable inyen, due 2003
2.0% unsecured bonds, payable inyen, due 2004
Unsecured loans from banks and an
insurance company, due 2002, at aninterest rate of 1.72%
Less current portion¥ 5,000¥ 5,000$ 40,355

5,000

–

–

5,000
15,000–¥15,000

5,000
10,000(5,000)¥ 5,000

40,35580,710(40,355)$ 40,355

The aggregate annual maturities of long-term debt subsequent to March 31, 2001 aresummarized as follows:
Millions of yen

Thousands of
U.S. dollars¥ 5,000$40,355

Year ending March 31,
2002

12

Yodogawa Steel Works, Ltd.
Notes to Non-Consolidated Financial Statements (continued)

2003

5,000
¥10,000

40,355$80,71013

Yodogawa Steel Works, Ltd.
Notes to Non-Consolidated Financial Statements (continued)

5. Short-Term Bank Loans, Long-Term Debt and Guarantee Deposits (continued)
The assets pledged as collateral for short-term bank loans at March 31, 2001 were as follows:

Property, plant and equipment, at net book value

Millions of yen

Thousands of
U.S. dollars¥32,495$262,268

Guarantee deposits consisted principally of guarantee deposits from tenants at annual interest
rates ranging from 1% to 4%. The aggregate annual maturities of guarantee deposits
subsequent to March 31, 2001 are summarized as follows:
Millions of yen

Thousands of
U.S. dollars

Year ending March 31,
2002
2003
2004
2005
2006
2007 and thereafter

¥

4
4
4
4
–
1,236
¥1,252

$

32
32
32
32
–
9,977
$10,105

6. Shareholders ’ Equity
The Commercial Code of Japan provides that an amount equivalent to at least 10% of cash
dividends paid and bonuses to directors and statutory auditors, and exactly 10% of interim cash
dividends paid be appropriated to the legal reserve until such reserve equals 25% of statedcapital. The Code also provides that neither additional paid-in capital nor the legal reserve isavailable for dividends but both may be used to reduce or eliminate a deficit by resolution of theshareholders or may be transferred to stated capital by resolution of the Board of Directors.

7. Income Taxes
Income taxes applicable to the Company comprise corporation, enterprise and inhabitants’ taxes
which, in the aggregate, resulted in a statutory tax rate of approximately 42.0% for the years
ended March 31, 2000 and 2001.

14

Yodogawa Steel Works, Ltd.
Notes to Non-Consolidated Financial Statements (continued)

7. Income Taxes (continued)
A reconciliation of the statutory tax rate and the effective tax rates for the years ended March 31,
2000 and 2001, as a percentage of income before income taxes, is as follows:

Statutory tax rate
Non-deductible expenses
Non-taxable income
Foreign tax credit
Per capita portion of inhabitants’ taxes
Other
Effective tax rates

2000

2001

42.0%
2.6
(6.0)
(3.2)
2.4
(0.7)
37.1%

42.0%
3.4
(8.3)
(3.8)
3.1
(3.2)
33.2%

Deferred income taxes reflect the tax effect of the temporary differences between the amounts of
the assets and liabilities recorded for financial and tax reporting purposes. The significant
components of the Company’s deferred tax assets and liabilities as of March 31, 2000 and2001 are summarized as follows:
Millions of yen
2000
2001
Deferred tax assets:
Accrued retirement benefits for
employees
Accrued retirement benefits for
directors and statutory auditors
Accrued bonuses
Allowances for doubtful receivables
Excess foreign tax deduction
Loss on revaluation of securities
Reserve for losses on restructuring
Other
Total deferred tax assets
Deferred tax liabilities:
Reserve for deferred taxation oncontributions for acquisition ofproperty
Total deferred tax liabilities
Net deferred tax assets

Thousands of
U.S. dollars
2001¥1,426¥1,520$12,268

452
159
123
–
–
113
114
2,387

484
165
127
161
161
–
35
2,653

3,906
1,332
1,025
1,299
1,299
–
284
21,413

(963)
(963)

(1,546)(1,546)(12,478)(12,478)¥1,424¥1,107$ 8,935
15

Yodogawa Steel Works, Ltd.
Notes to Non-Consolidated Financial Statements (continued)

8. Research and Development Expenses
Research and development expenses included in selling, general and administrative expenses forthe years ended March 31, 2000 and 2001 were as follows:
Thousands of
U.S. dollars
2001

Millions of yen
2000
2001
¥573

¥490

$3,955

9. Leases
The following pro forma amounts present the acquisition costs, accumulated depreciation and net
book value of the leased property as of March 31, 2000 and 2001, which would have beenreflected in the balance sheets if finance leases other than those which transfer the ownership ofthe leased property to the Company (which are currently accounted for as operating leases)
were capitalized:
Millions of yen
2000
Acquisition Accumulated
costs
depreciation
Machinery,equipment
and vehicles

¥297

¥166

Net book
value

¥131

2001
Acquisition Accumulated
costs
depreciation

¥317

¥199

Net book
value

¥118

Thousands of U.S. dollars
2001
Acquisition Accumulated Net bookcosts
depreciation
value
Machinery,equipment
and vehicles$2,558$1,606$952

The related lease payments and depreciation expense for the years ended March 31, 2000 and2001 were as follows:
Millions of yen
2000
2001
Lease payments
Depreciation expense

¥59
59

¥67
67

Thousands of
U.S. dollars
2001
$541
541

16

Yodogawa Steel Works, Ltd.
Notes to Non-Consolidated Financial Statements (continued)

Depreciation is calculated by the straight-line method over the respective lease terms.

17

Yodogawa Steel Works, Ltd.
Notes to Non-Consolidated Financial Statements (continued)

9. Leases (continued)
The related future minimum payments (including the interest portion thereon) subsequent toMarch 31, 2001 under finance leases other than those which transfer the ownership of the leased
property to the Company are summarized as follows:
Thousands ofMillions of yen U.S. dollars
Year ending March 31,
20022003 and thereafter

¥ 48
70
¥118

$387
565
$952

10. Contingent Liabilities
At March 31, 2001, the Company had the following contingent liabilities:
Thousands ofMillions of yen U.S. dollars
Guarantees of housing loans of employees andindebtedness of a subsidiary
Contingent liability for in-substance defeasance on
bonds

¥ 163

$ 1,316

5,002

40,371

11. Subsequent Event
The following appropriations of retained earnings, which have not been reflected in theaccompanying non-consolidated financial statements for the year ended March 31, 2001, wereapproved at a shareholders’ meeting held on June 28, 2001:

Cash dividends of ¥3.5 ($0.03) per share
Transfer to legal reserve
Bonuses to directors and statutory auditors

Millions of yen

Thousands of
U.S. dollars

¥710
76
50

$5,730613
404

18