Consolidated Financial Statements
Yodogawa Steel Works, Ltd.
Years ended March 31, 2011 and 2012
with Independent Auditor’s Report

Yodogawa Steel Works, Ltd.
Consolidated Financial Statements
Years ended March 31, 2011 and 2012

Contents
Independent Auditor’s Report ............................................................................................. 1

Consolidated Financial Statements
Consolidated Balance Sheets............................................................................................... 2
Consolidated Statements of Income .................................................................................... 4
Consolidated Statements of Comprehensive Income (Loss) ............................................... 5
Consolidated Statements of Changes in Net Assets ............................................................ 6
Consolidated Statements of Cash Flows ............................................................................. 8
Notes to Consolidated Financial Statements ..................................................................... 10

Yodogawa Steel Works, Ltd.
Consolidated Balance Sheets
March 31, 2011 and 2012

Millions of yen
2011
2012
AssetsCurrent assets:
Cash and deposits (Notes 3, 5 and 12)
Marketable securities (Notes 3, 5 and 6)
Notes and accounts receivable (Notes 4 and 5):
Unconsolidated subsidiaries and affiliates(Note 23)
Trade
Less allowance for doubtful receivables
Inventories (Note 7)
Deferred income taxes (Note 15)
Other current assets (Note 3)
Total current assets

Property, plant and equipment:
Land (Notes 8, 18 and 24)
Buildings and structures (Notes 8 and 24)
Machinery, equipment and vehicles
Leased assets
Construction in progress
Less accumulated depreciation
Property, plant and equipment, net (Note 25)

Investments and other assets:
Investments in securities (Notes 5, 6 and 12)
Investments in unconsolidated subsidiaries andaffiliates (Note 25)
Deferred income taxes (Note 15)
Other assets (Note 12)
Total investments and other assets

Total assets (Note 25)2¥14,867
15,272¥

22,724
11,309Thousands of
U.S. dollars(Note 2)
2012$

276,481
137,596

10,611
21,453(235)
27,783668
3,181
93,60012,49623,081(198)
25,895804
4,138
100,249

152,038
280,825(2,409)315,063
9,782
50,346
1,219,722

18,81750,641
126,15675
378(148,500)
47,567

18,33749,885124,56785
478(149,701)
43,651

223,105
606,947
1,515,598
1,034
5,816
(1,821,401)
531,099

25,29924,229294,792

4,735
761
3,207
34,002

6,114
546
3,167
34,05674,3896,643
38,533414,357¥ 175,169¥ 177,956$ 2,165,178

Thousands of
U.S. dollars(Note 2)
2012

Millions of yen
2011
2012
Liabilities and net assets
Current liabilities:
Current portion of finance lease obligations
Notes and accounts payable (Notes 4 and 5):
Unconsolidated subsidiaries and affiliates
Trade
Construction
Accrued expenses
Accrued income taxes (Note 15)
Other current liabilities (Note 12)
Total current liabilities
Long-term liabilities:
Accrued retirement benefits for employees(Note 14)
Accrued retirement benefits for directors andcorporate auditors
Guarantee deposits (Note 10)
Finance lease obligations, less current portion
Negative goodwill (Note 25)
Deferred income taxes (Note 15)
Deferred income taxes on land revaluation reserve(Note 15)
Other long-term liabilities
Total long-term liabilities

¥

17

¥

19

$

231

945
14,981
1,042
3,234
561
1,899
22,679791
14,288
1,333
3,467
2,489
3,469
25,856

9,624
173,841
16,21942,18330,28342,207
314,588

7,418

6,988

85,023

58
3,450
42
74
1,048

69
3,282
32
36
652

840
39,932
389
438
7,933

1,041
402
13,533919
406
12,384

11,181
4,939
150,675

23,221
23,73988,28823,221
23,49790,758282,528
285,886
1,104,247(9,275)125,973(9,628)
127,848(117,143)
1,555,518

3,995
1,386
(4,474)907
110
11,967
138,957¥ 175,169

3,817
1,561
(5,293)85
119
11,664
139,716¥ 177,956

46,441
18,993(64,400)
1,034
1,448
141,915
1,699,915$ 2,165,178

Contingent liabilities (Note 13)
Net assets:
Shareholders’ equity (Note 17):
Common stock:
Authorized: 753,814,067 shares in 2011 and2012
Issued: 184,186,153 shares in 2011 and 2012
Capital surplus
Retained earnings (Note 26)
Treasury stock, at cost – 23,913,491 shares in2011 and 24,976,317 shares in 2012
Total shareholders’ equity
Accumulated other comprehensive income (loss):
Unrealized holding gain on securities (Note 6)
Land revaluation reserve (Note 18)
Translation adjustments
Total accumulated other comprehensive income
Stock acquisition rights
Minority interests
Total net assets
Total liabilities and net assets

See accompanying notes to consolidated financial statements.
3

Yodogawa Steel Works, Ltd.
Consolidated Statements of Income
Years ended March 31, 2011 and 2012

Millions of yen
2011
2012
Net sales (Notes 23, 24 and 25)
Cost of sales (Note 24)
Gross profit

Thousands of
U.S. dollars(Note 2)2012

¥ 144,774
126,976
17,798¥ 152,777
132,417
20,360$ 1,858,827
1,611,108
247,719

13,574
4,224

13,946
6,414

169,680
78,039

618
(50)
124
(140)
38
(95)
58

795
(51)
85
49
38
210
(85)

9,673
(620)
1,034
596
462
2,555
(1,034)

(55)

(95)

(1,156)

(91)
–

109
100

1,326
1,217

(798)

(53)

(645)

(51)
(608)

(125)
(18)

(1,521)
(219)

(215)
36
2,995

–
148
7,521

–
1,800
91,507

Income before minority interests

678
468
1,146
1,849

2,816
229
3,045
4,476

34,262
2,786
37,04854,459Minority interests
Net income

(122)
1,727

(632)
3,844

(7,689)46,770

Selling, general and administrative expenses(Notes 17, 19 and 24)
Operating income (Note 25)
Other income (expenses):
Interest and dividend income
Interest expense
Gain on insurance claims
Foreign exchange (loss) gain, net
Amortization of negative goodwill (Note 25)
Equity in (loss) earnings of an affiliate
Gain (loss) on revaluation of derivatives
Expenses related to employees seconded tooverseas unconsolidated subsidiaries(Loss) gain on sales or disposal of property, plantand equipment, net
Gain on compensation
Loss on impairment of investments in securities(Note 6)
Loss on impairment of fixed assets(Notes 8, 24 and 25)
Loss on disaster (Note 9)
Loss on adjustment due to application of
accounting standard for asset retirement
obligations
Other, net (Notes 24 and 25)
Income before income taxes and minority interests
Income taxes (Note 15):
Current
Deferred¥¥$

See accompanying notes to consolidated financial statements.
4

Yodogawa Steel Works, Ltd.
Consolidated Statements of Comprehensive Income (Loss)
Years ended March 31, 2011 and 2012

Millions of yen
2011
2012
Income before minority interests
Other comprehensive income (loss) (Note 16):
Unrealized holding loss on securities
Land revaluation reserve
Translation adjustments
Share of other comprehensive (loss) income of anaffiliate accounted for by the equity method
Total other comprehensive loss
Comprehensive (loss) income
Comprehensive (loss) income attributable to:Shareholders of Yodogawa Steel Works, Ltd.
Minority shareholders of consolidated subsidiaries

Thousands of
U.S. dollars(Note 2)2012

¥ 1,849¥ 4,476$ 54,459(2,084)
–
(528)

(192)
122
(1,587)(2,336)
1,484(19,309)(4)(2,616)¥ (767)44(1,613)¥ 2,863536(19,625)$ 34,834¥¥ 3,003(140)$ 36,537(1,703)

(572)
(195)

See accompanying notes to consolidated financial statements.
5

Yodogawa Steel Works, Ltd.
Consolidated Statements of Changes in Net Assets
Years ended March 31, 2011 and 2012
Millions of yen

Number ofshares issued

Commonstock

CapitalsurplusRetainedearnings

Treasurystock, at
cost

Total
shareholders’equityUnrealized
holding gain
on securities

Land
revaluation
reserve

Translation
adjustments

184,186,153

23,221

23,75588,271(7,429)127,818

6,019

1,321

(4,199)–––(1,645)–(1,645)––

Net income
Acquisition oftreasurystock
Disposition oftreasurystock
Reversal oflandrevaluation
reserve

–

–

–

1,727

–

1,727

–

–

–

–

–

(1,877)(1,877)

–

–

(16)

–

31

–

–

–

(65)

Other changes

–

–

–

¥ 23,221 ¥ 23,739

Balance atApril 1, 2010
Cashdividends

Balance atApril 1, 2011
Cashdividends

184,186,153

Total
accumulated
othercomprehensive
incomeStockacquisitionrightsMinority
interests

Total net
assets3,141

95

12,285

143,339

–

–

–

–

(1,645)

–

–

–

–

–

1,727

–

–

–

–

–

–

(1,877)

15

–

–

–

–

–

–

15

–

(65)

–

–

–

–

–

–

(65)

–

–

–

(2,024)65(275)(2,234)15(318)(2,537)¥ 88,288¥ (9,275)¥ 125,973¥ 3,995¥ 1,386¥ (4,474)

907

¥ 110

¥ 11,967¥ 138,957

¥

–

–

–

(1,597)–(1,597)

–

–

–

–

–

–

(1,597)

Net income
Acquisition oftreasurystock
Disposition oftreasurystock
Reversal oflandrevaluation
reserve
Transfer toretainedearnings
from capitalsurplus

–

–

–

3,844

–

3,844

–

–

–

–

–

–

3,844

–

–

–

–

(358)

(358)

–

–

–

–

–

–

(358)

–

–

0

–

5

5

–

–

–

–

–

–

5

–

–

–

(19)

–

(19)

–

–

–

–

–

–

(19)

–

–

(242)

242

–

–

–

–

–

–

–

–

–

Other changes
Balance at
March 31,
2012

–

–

–

–

–

–

(178)

175

(819)

(822)

9

(303)

(1,116)¥ 23,221 ¥ 23,497¥ 90,758¥ (9,628)¥ 127,848¥3,817¥ 1,561¥ (5,293)

85

¥ 119

¥ 11,664¥ 139,716

184,186,153¥

6Yodogawa Steel Works, Ltd.
Consolidated Statements of Changes in Net Assets (continued)
Years ended March 31, 2011 and 2012
Thousands of U.S. dollars (Note 2)

Commonstock

CapitalsurplusRetainedearnings

Treasurystock, at
cost

Total
shareholders’equityUnrealized
holding gain
on securities

Land
revaluation
reserve

Translation
adjustments

Total
accumulated
othercomprehensive
incomeBalance atApril 1, 2011

$ 282,528$ 288,831$ 1,074,194$ (112,848)$ 1,532,705$ 48,607$ 16,863$ (54,435)$ 11,035$ 1,338$ 145,602$ 1,690,680

Cash dividends––(19,431)–(19,431)

–

–

–

–

–

–

(19,431)

Net income––

46,770–46,770

–

–

–

–

–

–

46,770Acquisition oftreasury stock

–

–

–

(4,356)(4,356)

–

–

–

–

–

–

(4,356)

–

0

–

61

61

–

–

–

–

–

–

61

–

–

(231)

–

(231)

–

–

–

–

–

–

(231)

–

(2,945)

2,945

–

–

–

–

–

–

–

–

–

–

–

–

–

–

(2,166)2,130(9,965)(10,001)110(3,687)(13,578)$ 282,528$ 285,886$ 1,104,247$ (117,143)$ 1,555,518$ 46,441$ 18,993$ (64,400)

1,034$ 1,448$ 141,915$ 1,699,915

Disposition oftreasury stockReversal oflandrevaluation
reserve
Transfer toretainedearnings from
capitalsurplus
Other changes
Balance at
March 31,
2012

$

Stock
acquisitionrightsMinority
interests

Total net
assetsSee accompanying notes to consolidated financial statements.
7

Yodogawa Steel Works, Ltd.
Consolidated Statements of Cash Flows
Years ended March 31, 2011 and 2012

Cash flows from operating activities:
Income before income taxes and minority interests
Adjustments for:
Depreciation and amortization
Amortization of negative goodwill
Equity in loss (earnings) of an affiliate
Increase (decrease) in accrued retirement benefits
Increase in accrued bonuses
Increase (decrease) in allowance for doubtfulreceivables
Interest and dividend income
Interest expense(Gain) loss on sales of investments in securities
Loss on impairment of investments in securities
Loss (gain) on sales or disposal of property, plantand equipment, net
Loss on impairment of fixed assets
Decrease (increase) in notes and accounts
receivable(Increase) decrease in inventories
Decrease in notes and accounts payable(Gain) loss on revaluation of derivatives
Other
Subtotal
Insurance claims received
Interest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities¥

Millions of yen
2011
2012

Thousands of
U.S. dollars(Note 2)
2012

2,995

$

¥

7,521

91,507

5,596
(38)
95
113
25

4,881
(38)
(210)
(264)
52

59,387(462)(2,555)(3,212)
633

32
(618)
50
(10)
798

(69)
(795)
51
18
53

(840)
(9,673)
620
219
645

91
51

(109)
125

(1,326)1,521

950(1,528)
(378)
(58)
243
8,409
124
673
(49)
(251)
¥ 8,906(3,673)
1,521
(760)
85
(414)
7,975
85
835
(51)
(871)
¥ 7,973(44,689)
18,506(9,247)
1,034(5,037)
97,031
1,034
10,159(620)(10,597)$ 97,007See accompanying notes to consolidated financial statements.
8

Yodogawa Steel Works, Ltd.
Consolidated Statements of Cash Flows (continued)
Years ended March 31, 2011 and 2012

Millions of yen
2011
2012
Cash flows from investing activities:
Investments in time deposits with a maturity ofmore than three months
Proceeds from time deposits with a maturity ofmore than three months
Proceeds from sales of marketable securities
Purchases of property, plant and equipment
Proceeds from sales of property, plant andequipment
Purchases of intangible fixed assets
Purchases of investments in securities
Payments for investments in unconsolidated
subsidiaries
Proceeds from sales of investments in securities
Payment for loans receivableCollection of loans receivable
Other
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from sales of treasury stock
Purchases of treasury stock
Cash dividends paid to the Company’s
shareholders
Cash dividends paid to minority shareholders ofconsolidated subsidiaries
Other
Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
(Note 3)

¥

(929)

¥

(700)

Thousands of
U.S. dollars(Note 2)
2012$

(8,517)862
800(2,019)813
900(1,904)

9,892
10,950(23,166)

146
(33)
(823)

323
(25)
(920)

3,930
(304)
(11,193)

(245)
146
(462)
410
(1)
(2,148)(1,180)
1,123
(264)
364
1
(1,469)(14,357)
13,663(3,212)4,429
12(17,873)

14(1,874)

5
(355)

61
(4,319)(1,656)(1,609)(19,577)

(113)
(14)
(3,643)(158)(18)(2,135)(1,922)(219)(25,976)

(55)
3,060
26,690(294)
4,075
29,750(3,578)49,580361,966¥ 29,750¥ 33,825$ 411,546

See accompanying notes to consolidated financial statements.
9

Yodogawa Steel Works, Ltd.
Notes to Consolidated Financial Statements
March 31, 2012
1.

Summary of Significant Accounting Policies(a) Basis of preparation
Yodogawa Steel Works, Ltd. (the “Company”) and its domestic subsidiaries maintaintheir books of account and records in accordance with accounting principles generally
accepted in Japan, and its overseas subsidiaries maintain their books of account inconformity with those of their respective countries of domicile.
The accompanying consolidated financial statements of the Company and consolidated
subsidiaries are prepared on the basis of accounting principles generally accepted inJapan, which are different in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards, and have been compiled
from the consolidated financial statements prepared by the Company as required by the
Financial Instruments and Exchange Act of Japan.
In preparing the accompanying consolidated financial statements, certain
reclassifications and rearrangements have been made to the consolidated financial
statements issued domestically in order to present them in a format which is morefamiliar to readers outside Japan.
(b) Basis of consolidation
The accompanying consolidated financial statements include the accounts of theCompany and all subsidiaries over which substantial control is exerted through either
majority ownership of voting stock and/or by other means. All significant
intercompany balances and transactions have been eliminated in consolidation.
An investment in one affiliate (a company over which the Company has the ability to
exercise significant influence) is stated at cost plus equity in its undistributed earnings
or undisposed loss. Consolidated net income or loss includes the Company’s equity inthe current net income or loss of this company after the elimination of unrealizedintercompany profits.
All assets and liabilities of the consolidated subsidiaries are revalued on acquisition, if
applicable. The difference between the cost of investments in subsidiaries and theequity in their net assets at their respective dates of acquisition is amortized over a
period of 5 years on a straight-line basis. Negative goodwill arising from transactions
that occurred on or after April 1, 2010 is credited to income when incurred.
The financial statements of certain consolidated subsidiaries whose fiscal year end is
December 31 have been included in consolidation on the basis of a full fiscal year after
making the appropriate adjustments for significant transactions during the period fromtheir fiscal year end to the Company’s balance sheet date.

10

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

1.

Summary of Significant Accounting Policies (continued)(c) 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 andliabilities denominated in foreign currencies are translated at their historical rates. Allrevenues and expenses associated with foreign currencies are translated at the rates of
exchange prevailing when such transactions were made. The resulting exchange gainor loss is credited or charged to income.
The balance sheet accounts of the overseas consolidated subsidiaries (except for net
assets excluding minority interests) are translated into yen at the rate of exchange in
effect at the balance sheet date. The components of net assets excluding minority
interests are translated at their respective historical rates of exchange. Revenue andexpense accounts are translated into yen at the average rate of exchange in effectduring the year.
Translation adjustments have been presented as a component of net assets in theaccompanying consolidated financial statements.
(d) Cash and 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 into cash subject
to an insignificant risk of any changes in their value and which were purchased with an
original maturity of three months or less.
(e) Securities
The accounting standard for financial instruments requires that securities other thanthose of subsidiaries and affiliates 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 or loss, both realized and unrealized, iscredited or charged to income. Held-to-maturity debt securities are carried atamortized cost. Marketable securities classified as other securities are carried at fairvalue with any changes in unrealized holding gain or loss, net of the applicable income
taxes, reported as a separate component of net assets. Non-marketable securities
classified as other securities are carried at cost. Cost of securities sold is determinedprincipally by the moving average method.
(f) Derivatives
Derivatives are measured at fair value.

11

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

1.

Summary of Significant Accounting Policies (continued)(g) Inventories
Inventories of the Company and its domestic consolidated subsidiaries are principallystated at the lower of cost or net selling value, cost being determined by the averagemethod. Inventories of one of the overseas consolidated subsidiaries are stated at thelower of cost or net selling value, cost being determined by the moving averagemethod.
(h) Property, plant and equipment and depreciation (except for leased assets)
Depreciation of property, plant and equipment is calculated by the declining-balancemethod over the estimated useful lives of the respective assets, except that thestraight-line method is applied to buildings (other than structures attached to thebuildings) acquired on or after April 1, 1998.
Depreciation of property, plant and equipment at one of the overseas consolidated
subsidiaries is calculated by the straight-line method.
The useful lives adopted for calculating depreciation are principally as follows:
Buildings and structures
Machinery, equipment and vehicles

3 to 60 years
3 to 36 years

Significant renewals and additions are capitalized at cost.
are charged to income as incurred.

Maintenance and repairs(i) Intangible assets and amortization (except for leased assets)
Intangible assets are stated on the basis of cost. Amortization is calculated by thestraight-line method over the estimated useful lives of the respective assets.
(j) Research and development costs and computer software
Research and development costs are charged to income as incurred.
Expenditures relating to the development of computer software intended for internal
use are charged to income when incurred, unless these are deemed to contribute to thegeneration of future income or cost savings. Such expenditures are capitalized asassets and amortized by the straight-line method over their estimated useful life of 5
years.

12

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

1.

Summary of Significant Accounting Policies (continued)(k) Leases
Leased assets under finance lease transactions which do not transfer ownership of theleased assets to the lessee are depreciated to a residual value of zero by the straight-line
method using the contract term as the useful life. Among the finance leasetransactions which do not transfer ownership of the leased assets to the lessees, thosethat started on or before March 31, 2008 are accounted for in the same manner as
operating leases.
(l) Allowance for doubtful receivables
The Company and its consolidated subsidiaries provide an allowance for doubtfulreceivables at an amount calculated based on their historical experience of bad debts on
ordinary receivables plus an additional estimate of probable specific bad debts from
customers experiencing financial difficulties.
(m) Income taxes
Deferred income taxes are provided for temporary differences between the balances ofassets and liabilities for financial reporting purposes and the corresponding balances
for tax reporting purposes.
(n) Retirement benefits
Accrued retirement benefits for employees are provided principally at an amountcalculated based on the retirement benefit obligation less the fair value of the pension
plan assets as adjusted for unrecognized actuarial gain or loss and unrecognized priorservice cost. The retirement benefit obligation is attributed to each period by thestraight-line method over the estimated remaining years of service of the eligible
employees.
Actuarial gain or loss is amortized in the year following the year in which the gain orloss is recognized principally by the straight-line method over a period of principally
10 years, which is within the estimated average remaining years of service of theeligible employees.
Prior service cost is being amortized as incurred by the straight-line method over a
period of principally 10 years, which is within the estimated average remaining yearsof service of the eligible employees.

13

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

1.

Summary of Significant Accounting Policies (continued)(n) Retirement benefits (continued)
The directors and corporate auditors of the Company’s domestic consolidated
subsidiaries have customarily been entitled to lump-sum payments under the unfunded
retirement benefit plans. The provision for retirement benefits for directors andcorporate auditors has been made at an estimated amount based on the Company’s oreach consolidated subsidiary’s internal rules.
(o) Recognition of revenues and costs of construction contracts
Revenues and costs of construction contracts of which the percentage of completioncan be reliably estimated, are recognized by the percentage-of-completion method.
The percentage of completion is calculated at the cost incurred as a percentage of theestimated total cost. The completed-contract method continues to be adopted forcontracts for which the percentage of completion cannot be reliably estimated.
(p) Hedge accounting
Gain or loss on derivatives designated as hedging instruments is deferred until the loss
or gain on the underlying hedged items is recognized. Receivables hedged byforward foreign exchange contracts which meet certain conditions are translated at thecorresponding foreign exchange contract rates.
Supplementary Information
Effective the year ended March 31, 2012, the Company and its consolidated subsidiaries
applied “Accounting Standard for Accounting Changes and Error Corrections” (AccountingStandards Board of Japan (“ASBJ”) Statement No.24 issued on December 4, 2009) and“Guidance on Accounting Standard for Accounting Changes and Error Corrections” (ASBJ
Guidance No.24 issued on December 4, 2009).

2.

U.S. Dollar Amounts

The translation of yen amounts into U.S. dollar amounts is included solely for theconvenience of readers outside Japan and has been made at the rate of ¥82.19 = U.S.$1.00,
the approximate exchange rate prevailing on March 31, 2012. The translation should not
be construed as a representation 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.

14

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

3.

Cash and Cash Equivalents

A reconciliation of cash and deposits shown in the accompanying consolidated balance
sheets to cash and cash equivalents shown in the accompanying consolidated statements ofcash flows at March 31, 2011 and 2012 is presented as follows:
Thousands ofMillions of yen
U.S. dollars
2011
2012
2012
Cash and deposits
Investment trust funds included in“Marketable securities”
Beneficiary interests in trusts included in“Other current assets”
Time deposits with a maturity of morethan three months
Cash and cash equivalents

4.

¥ 14,867¥ 22,724$ 276,481

14,302

10,303125,356

1,000

1,000

12,167(419)¥ 29,750(202)¥ 33,825(2,458)$ 411,546

Notes Receivable and Notes Payable

Although the balance sheet date for the year ended March 31, 2012 fell on a bank holiday,
notes receivable, unconsolidated subsidiaries and affiliates of ¥89 million ($1,083
thousand), notes receivable, trade of ¥759 million ($9,235 thousand), notes payable, tradeof ¥434 million ($5,280 thousand), and notes payable, construction of ¥44 million ($535
thousand) with maturity date of March 31, 2012 were excluded from the respectivebalances but were settled on the next business day.

5.

Financial Instruments

Overview(a) Policy for financial instruments
In consideration of plans for capital investment, the Company and its consolidated
subsidiaries (collectively, the “Group”) primarily utilize cash in hand. In case of alack of cash in hand, the Group raises funds by bank borrowings and bond issuances.
The Group manages temporary cash surpluses through low-risk financial assets. The
Group uses derivatives for the purpose of reducing risk and does not enter into
derivatives for speculative purposes. In addition, compound financial instrumentsthat contain embedded derivatives are utilized by the Group in order to manage surplus
funds.

15

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

5.

Financial Instruments (continued)

Overview (continued)(b) Types of financial instruments and related risk
Trade receivables, notes and accounts receivables, are exposed to credit risk in relation
to customers. In addition, the Group is exposed to foreign currency exchange risk
arising from trade receivables denominated in foreign currencies.
Investments in securities and marketable securities are exposed to market risk. The
former is composed of mainly held-to-maturity debt securities and the shares ofcommon stock of other companies with which the Group has business relationships.
The latter is composed of mainly negotiable certificates of deposits and commercial
paper.
Trade payables, notes and accounts payable, have payment due dates within six months.
The Group is exposed to foreign currency exchange risk arising from trade payables
denominated in foreign currencies. In case of financing, the interest rate for short-termborrowings is fixed.
Regarding derivatives, the Group enters into forward foreign exchange contracts to
reduce the foreign currency exchange risk arising from trade receivables denominatedin foreign currencies.
Information regarding the method of hedge accounting is found in Note 1(p).

16

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

5.

Financial Instruments (continued)

Overview (continued)(c) Risk management for financial instruments
Regarding trade receivables, each related division monitors the credit worthiness of
their main customers periodically, and monitors due dates and outstanding balances bycustomer. In addition, the Company and its domestic consolidated subsidiaries aremaking efforts to identify and mitigate risks of bad debts from customers who havefinancial difficulties.
The overseas consolidated subsidiary requests customers to issue non-cancelable lettersof credit to hedge credit risk.
The Group only acquires held-to-maturity debt securities and commercial paper issuedby companies with high credit ratings or sound credit profiles. Accordingly, theGroup believes that the credit risk deriving from such securities is insignificant. The
Group also believes that the credit risk of derivatives is insignificant as the Group
enters into derivative transactions only with financial institutions with high credit
ratings.
For trade receivables denominated in foreign currencies, the Group enters into forward
foreign exchange contracts to hedge the risks arising from fluctuations in foreignexchanges rates.
For marketable securities and investments in securities, the Group periodically reviews
the fair value of such financial instruments and the financial position of the issuers.
In addition, the Group continuously evaluates whether or not securities other than thoseclassified as held-to-maturity debt securities should be maintained taking into accounttheir fair value and relationships with the issuers.
The Group has established policies for approving and reporting the purpose, nature,counterparty, inherent risk, limit on loss and the level of risk of each transaction.
Under these policies governing derivatives, trading is not entered into for speculative
purposes.
Based on a report from each division, the Group prepares and updates its cash flowplans on a timely basis and maintains adequate solvency to manage liquidity risk. In
order to provide for unexpected cash requirements, the Company has entered into theline-of-credit agreements with certain financial institutions and its overseas
consolidated subsidiary is able to obtain short-term borrowings from certain financial
institutions.

17

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

5.

Financial Instruments (continued)

Overview (continued)(d) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market prices, if
available. When there are no quoted market prices available, fair value is reasonably
estimated. Since various assumptions and factors are reflected in estimating the fairvalue, different assumptions and factors could result in different fair value.
Estimated Fair Value of Financial Instruments
Carrying value of financial instruments on the consolidated balance sheets, estimated fairvalue and unrealized loss as of March 31, 2011 and 2012 are shown in the following table.
The following table does not include financial instruments for which it is extremely
difficult to determine the fair value.

Assets:Cash and deposits
Notes and accounts receivable
Unconsolidated subsidiaries and affiliates
Trade
Marketable securities and investments insecurities
Total assets
Liabilities:
Notes and accounts payable
Unconsolidated subsidiaries and affiliates
Trade
Total liabilities

Carrying value

Millions of yen
2011
Estimated
fair value¥ 14,867¥ 14,867

10,611
21,453

10,611
21,453––32,070¥ 79,001

31,659¥ 78,590(411)¥ (411)

¥

¥

¥

945
14,981¥ 15,926

945
14,981¥ 15,926

Unrealized loss
¥

¥

–

–
–
–

18

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

5.

Financial Instruments (continued)

Estimated Fair Value of Financial Instruments (continued)

Carrying value

Millions of yen
2012
Estimated
fair value¥ 22,724¥ 22,724

12,49623,081

12,49623,081––

28,293¥ 86,594

27,917¥ 86,218(376)¥ (376)¥¥¥

Assets:Cash and deposits
Notes and accounts receivable
Unconsolidated subsidiaries and affiliates
Trade
Marketable securities and investments insecurities
Total assets
Liabilities:
Notes and accounts payable
Unconsolidated subsidiaries and affiliates
Trade
Total liabilities

791
14,288¥ 15,079

791
14,288¥ 15,079

Unrealized loss
¥

¥

–

–
–
–

Thousands of U.S. dollars
2012
Estimated
Carrying value
fair value
Unrealized loss
Assets:Cash and deposits
Notes and accounts receivable
Unconsolidated subsidiaries and affiliates
Trade
Marketable securities and investments insecurities
Total assets
Liabilities:
Notes and accounts payable
Unconsolidated subsidiaries and affiliates
Trade
Total liabilities$

276,481$

276,481$–

152,038
280,825

152,038
280,825––

344,239$ 1,053,583

339,664$ 1,049,008(4,575)$ (4,575)

$

$

$

$

9,624
173,841
183,465$

9,624
173,841
183,465

$

–
–
–

19

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

5.

Financial Instruments (continued)

Estimated Fair Value of Financial Instruments (continued)
Calculation method of estimated fair value of financial instruments is as follows:
Cash, deposits, notes and accounts receivable
Since these items are settled in a short period of time, their carrying value approximates thefair value.
Marketable securities and investments in securities
The fair value of equity securities is based on quoted market prices. The fair value of debt
securities is based on either quoted market prices or the prices provided by the financial
institutions making markets in these securities. For information on securities classified byholding purpose, please refer to Note 6.
Notes and accounts payable
Since this item is settled in a short period of time, its carrying value approximates the fairvalue.
The carrying value of financial instruments without determinable market value at March 31,
2011 and 2012 is presented as follows:

Unlisted stocks
Money trusts
Negotiable certificates of deposit
Investment in a limited liability
partnership
Preferred stocks
Total

Millions of yen
2011
2012
¥
304
¥
297
4,303
3,804
3,000
2,000

Thousands of
U.S. dollars
2012$ 3,61346,28324,334361
533¥ 8,501

3,492
10,427$ 88,149

287
857¥ 7,245

Because no quoted market price is available, it is extremely difficult to determine the fairvalue. Therefore, the above financial instruments are not included as part of the amounts
presented in the preceding fair value of financial instruments table.

20

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

5.

Financial Instruments (continued)

Estimated Fair Value of Financial Instruments (continued)
The redemption schedule for monetary assets and investments by maturity dates at March
31, 2011 and 2012 is as follows:
Millions of yen
2011
Due in one
year or less
Deposits
Notes and accounts receivable
Marketable securities andinvestments in securities
Held-to-maturity debt securities
National and local
government bonds
Corporate bonds
Other marketable securities withmaturities
Other
Total

¥ 14,798
32,064¥––Due after five
years throughten years¥––

Due after ten
years
¥

–
–

70
7,900

410
–

–
500

–
2,500

7,100
¥ 61,932

–
¥ 410

–
¥ 500

–
¥ 2,500

Due in one
year or less
Deposits
Notes and accounts receivable
Marketable securities andinvestments in securities
Held-to-maturity debt securities
National and local
government bonds
Corporate bonds
Other marketable securities
with maturities
Bonds
Other
Total

Due after one
year throughfive years¥ 22,681
35,577

Millions of yen
2012
Due after one Due after five
year through years throughfive years
ten years
¥

–
–

¥

–
–

Due after
ten years
¥

–
–

6
5,500

10
–

20
500

–
2,500

–
5,600
¥ 69,364

300
–
¥ 310

200
–
¥ 720

–
–
¥ 2,500

21

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

5.

Financial Instruments (continued)

Estimated Fair Value of Financial Instruments (continued)
Thousands of U.S. dollars
2012
Due in one
year or less
Deposits
Notes and accounts receivable
Marketable securities andinvestments in securities
Held-to-maturity debt securities
National and local
government bonds
Corporate bonds
Other marketable securities withmaturities
Bonds
Other
Total

$ 275,958
432,863

Due after one
year throughfive years$––

Due after five
years throughten years$––

Due after ten
years
$

–
–

73
66,918

122
–

243
6,084

–
30,417–
68,135$ 843,947

3,650–$ 3,772

2,433
–
8,760

–
–
$ 30,417$

22

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

6.

Securities

Marketable securities classified as held-to-maturity debt securities at March 31, 2011 and2012 are summarized as follows:

Carrying value
Securities whose estimated fair value
exceeds their carrying value:
Government bonds
Corporate bonds
Securities whose estimated fair value does
not exceed their carrying value:
Corporate bonds
Total

Securities whose estimated fair value
exceeds their carrying value:
Government bonds
Corporate bonds

¥

¥

485
1,834
2,319

¥

5
5
10

8,827
8,827
¥ 11,136

8,405
8,405
¥ 10,724

(422)
(422)
¥ (412)Carrying value

Millions of yen
2012
Estimated
fair value

Unrealized gain
(loss)¥

Securities whose estimated fair value does
not exceed their carrying value:
Government bonds
Corporate bonds
Total

480
1,829
2,309

Millions of yen
2011
Estimated
Unrealized gain
fair value(loss)

¥

16
1,433
1,449

20
6,742
6,762
8,211

¥

¥

16
1,461
1,477

¥

0
28
28

20
6,339
6,359
7,836

(0)
(403)
(403)
¥ (375)23

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

6.

Securities (continued)
Thousands of U.S. dollars
Carrying
value

Securities whose estimated fair value
exceeds their carrying value:
Government bonds
Corporate bonds
Securities whose estimated fair value
does not exceed their carrying value:
Government bonds
Corporate bonds
Total

$

195
17,435
17,630243
82,03082,273$ 99,903

2012
Estimated
fair value

Unrealized
gain (loss)$

195
17,775
17,970$243
77,127
77,37095,340(0)(4,903)(4,903)$ (4,563)

$

0
340
340

Other securities with determinable market value at March 31, 2011 and 2012 aresummarized as follows:
Millions of yen
2011
Carrying
value

Unrealized
gain (loss)

9,847
490
10,337¥ 16,406
497
16,903¥ 6,559
7
6,566

3,589
500
97
4,186
¥ 14,523

3,436
500
95
4,031
¥ 20,934

(153)
–
(2)
(155)
¥ 6,411

Acquisition
costs
Securities whose carrying value exceeds
their acquisition costs:
Equity securities
Corporate bonds
Securities whose carrying value does notexceed their acquisition costs:
Equity securities
Corporate bonds
Other
Total

¥

24

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

6.

Securities (continued)
Millions of yen
2012
Carrying
value

Unrealized
gain (loss)

8,742
500
9,242

¥ 15,322
503
15,825¥ 6,580
3
6,583

4,561
501
98
5,160
¥ 14,402

3,659
501
97
4,257
¥ 20,082

(902)
–
(1)
(903)
¥ 5,680

Acquisition
costs
Securities whose carrying value exceeds
their acquisition costs:
Equity securities
Corporate bonds
Securities whose carrying value does notexceed their acquisition costs:
Equity securities
Corporate bonds
Other
Total

¥

Thousands of U.S. dollars
2012
Acquisition
Carrying
Unrealized
costs
value
gain (loss)
Securities whose carrying value exceeds
their acquisition costs:
Equity securities
Corporate bonds
Securities whose carrying value does notexceed their acquisition costs:
Equity securities
Corporate bonds
Other
Total

$ 106,363
6,084
112,447$ 186,422
6,120
192,542$ 80,059
36
80,09555,493
6,096
1,192
62,781$ 175,228

44,5186,096
1,180
51,794$ 244,336(10,975)–(12)(10,987)$ 69,108

Sales of securities classified as other securities for the years ended March 31, 2011 and2012 are summarized as follows:
Thousands ofMillions of yen
U.S. dollars
2011
2012
2012
Sales
¥ 121
¥ 138
$ 1,679
Aggregate gain
54
37
450
Aggregate loss
(29)
(42)
(511)

25

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

6.

Securities (continued)

Sales of securities classified as held-to-maturity debt securities for the year ended March 31,
2012 are summarized as follows:

Sales
Costs of securities sold
Aggregate gain

Millions of yen
2012
¥ 405
401
4

Thousands of U.S. dollars
2012$ 4,928
4,879
49

The sales of held-to-maturity debt securities by a consolidated subsidiary resulted from thefavorable impact of a rise in the price of the Japanese national government bonds.
There were no sales of securities classified as held-to-maturity debt securities for the year
ended March 31, 2011.
The Group recorded losses on impairment of investments in securities with determinable
market value of ¥231 million and ¥53 million ($645 thousand) for the years ended March
31, 2011 and 2012, respectively.

7.

Inventories

The following is a summary of inventories at March 31, 2011 and 2012:

Finished goods
Work in process
Raw materials and supplies

Millions of yen
2011
2012
¥ 11,530¥ 13,112
3,849
3,427
12,4049,356¥ 27,783¥ 25,895

Thousands of
U.S. dollars
2012$ 159,533
41,696
113,834$ 315,063

26

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

8.

Loss on Impairment of Fixed Assets

The Company and its consolidated subsidiaries recognized loss on impairment of fixed
assets for the years ended March 31, 2011 and 2012 as follows:

Location
Kure City,
Hiroshima Prefecture
Miyazaki City,
Miyazaki Prefecture
Gobou City,
Wakayama
Prefecture
Village of Hakuba,
Nagano Prefecture
Ishioka City,
Ibaraki Prefecture
Nerima City,
Tokyo Prefecture
Suzaka City,
Nagano Prefecture
Mikuni City,
Fukui Prefecture
Hiki District, Saitama
Prefecture
Total

Use
Idle assets

Classification
Land

Idle assets

Land

Idle assets

Land

Idle assets

Land

Idle assets

Land

Idle assets

Buildings

Idle assets

Land

Idle assets

Land

Idle assets

Land

Millions of yen
2011
2012
¥

Thousands of
U.S. dollars
2012

8

¥ 10

$

122

–

107

1,302

–

5

61

0

1

12

1

2

24

–

0

0

0

0

0

7

–

–

35
¥ 51

–
¥ 125

–
$ 1,521

The Company and its consolidated subsidiaries group fixed assets by management segment,each of which continuously records cash receipts and payments. They group idle assets
not utilized in their operations on an individual asset basis.
Consequently, the Company and its consolidated subsidiaries have written down the
carrying values of the idle assets owned by the Company and its consolidated subsidiaries
for the years ended March 31, 2011 and 2012, which are not expected to be utilized in the
future, to their respective net recoverable values, and have recorded a related loss on
impairment of fixed assets of ¥51 million and ¥125 million ($1,521 thousand) for the years
ended March 31, 2011 and 2012, respectively. This loss on impairment of fixed assets
consisted of land of ¥51 million for the year ended March 31, 2011, and land of ¥125
million ($1,521 thousand) and buildings of ¥0 million ($0 thousand) for the year ended
March 31, 2012. The recoverable amounts of these assets are measured at estimatedselling value, at a valuation assessed for property tax purposes or at the comparable
published land prices.

27

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

9.

Loss on DisasterIn connection with the Great East Japan Earthquake in March 2011, the Group recorded aloss on disaster consisting of fixed costs for manufacturing incurred during suspensions ofoperations of its plants and a provision for repair expense for property, plant and equipment
for the year ended March 31, 2011 and repair expense for property, plant and equipment for
the year ended March 31, 2012.

10. Guarantee Deposits
Guarantee deposits consisted of interest-free deposits, most of which were golf-clubmembership deposits, and interest-bearing deposits, which were principally deposits from
customers at average annual interest rates of 0.73% and 0.8% at March 31, 2011 and 2012,
respectively.
Interest-free deposits and interest-bearing deposits at March 31, 2011 and 2012 were as
follows:

Interest-free deposits
Interest-bearing deposits

Millions of yen
2011
2012
¥ 2,765¥ 2,581685
701¥ 3,450¥ 3,282

Thousands of
U.S. dollars
2012$ 31,403
8,529$ 39,932

11. Line-of-credit Agreements
In order to achieve more efficient and flexible financing, the Company has concluded
line-of-credit agreements with certain financial institutions. The status of these lines ofcredit at March 31, 2011 and 2012 was as follows:

Millions of yen
2011
2012
Lines of credit
Credit utilized
Available credit¥ 20,200–¥ 20,200¥ 19,450–¥ 19,450

Thousands of
U.S. dollars
2012$ 236,647–$ 236,647

28

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

12. Pledged Assets
Assets pledged as collateral for indebtedness at March 31, 2011 and 2012 are summarized
as follows:

Cash and deposits
Investments in securities
Other assets

Millions of yen
2011
2012
¥ 60
¥ 60
16
16
167
167
¥ 243
¥ 243

Thousands of
U.S. dollars
2012
$ 730
195
2,032
$ 2,957

Indebtedness secured by these assets as collateral was ¥51 million and ¥52 million ($633
thousand), a component of other current liabilities at March 31, 2011 and 2012
respectively.

13. Contingent Liabilities
The Company was contingently liable for guarantees of borrowings from financial
institutions and others of an unconsolidated subsidiary in the aggregate amount of ¥58
million ($706 thousand) at March 31, 2012.

14. Retirement Benefits
The Company and its domestic consolidated subsidiaries have two types of defined benefit
retirement plans: a defined benefit pension plan and a lump sum payment plan. Moreover,
one of overseas consolidated subsidiaries has a defined benefit pension plan. Additional
severance payments may also be provided at the time an employee leaves the Company andits domestic consolidated subsidiaries. Furthermore, the Company has adopted aretirement allowance trust.

29

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

14. Retirement Benefits (continued)
The funded and accrued status of the employees’ defined-benefits retirement plans of theGroup, and the amounts recognized in the accompanying consolidated balance sheets at
March 31, 2011 and 2012 are summarized as follows:

Retirement benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
Unrecognized actuarial loss
Unrecognized prior service cost
Net retirement benefit obligation
Prepaid pension costAccrued retirement benefits

Millions of yen
2011
2012
¥ (12,779)¥ (12,597)
3,929
3,768
(8,850)(8,829)
2,134
2,484
(16)
(15)
(6,732)(6,360)686628¥ (7,418)¥ (6,988)

Thousands of
U.S. dollars
2012$ (153,267)
45,845(107,422)
30,223(183)(77,382)
7,641$ (85,023)

As permitted under the accounting standards for retirement benefits, certain domestic
consolidated subsidiaries calculate accrued retirement benefits for their employees bysimplified methods.
The components of retirement benefit expenses for the years ended March 31, 2011 and2012 are outlined as follows:

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial loss
Amortization of prior service cost
Total

Millions of yen
2011
2012
¥ 627
¥ 580
245
236
(88)
(73)
317
187
–
(2)
¥ 1,101¥ 928

Thousands of
U.S. dollars
2012$ 7,057
2,871
(888)
2,275
(24)
$ 11,291

The retirement benefit expenses of certain domestic consolidated subsidiaries calculated bysimplified methods have been included in service cost in the above table.
The assumptions used in accounting for the above benefit plans for the years ended March
31, 2011 and 2012 were as follows:

Discount rate
Expected rates of return on plan assets

2011
Principally 2.0%
Principally 2.1%

2012
Principally 2.0%
Principally 2.0%30

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

15. Income Taxes
Income taxes applicable to the Company and its domestic consolidated subsidiaries
comprise corporation, enterprise and inhabitants’ taxes which, in the aggregate, resulted ina statutory tax rate of approximately 40.5% for the years ended March 31, 2011 and 2012.
A reconciliation of the statutory tax rate and the effective tax rate for the year ended March
31, 2011 as a percentage of income before income taxes and minority interests is asfollows:

Statutory tax rate
Permanently non-deductible expenses
Per capita portion of inhabitants’ taxes
Difference in tax rates applicable to the overseas consolidated
subsidiary
Cash dividends received from the overseas consolidated
subsidiary
Adjustments of accounting standards applied by the overseas
consolidated subsidiary
Foreign tax credit
Tax loss carryforwards of consolidated subsidiaries
Valuation allowance
Permanently non-taxable income
Tax credit for research and development costs
Reversal of land revaluation reserve
Equity in loss of an affiliate
Other
Effective tax rate

2011
40.5 %
1.0
1.8
(1.7)
0.9
1.1
0.7
3.9
(4.2)
(2.7)
(0.6)
(0.9)
(1.2)
(0.3)
38.3 %A reconciliation of the statutory tax rate and the effective tax rate for the year ended March
31, 2012 was omitted because the difference between these rates was less than 5% of thestatutory tax rate.

31

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

15. Income Taxes (continued)
The significant components of the deferred tax assets and liabilities of the Group at March
31, 2011 and 2012 are summarized as follows:
Thousands ofMillions of yen
U.S. dollars
2011
2012
2012
Deferred tax assets:
Accrued retirement benefits¥ 2,450¥ 2,079$ 25,295
Allowance for doubtful receivables
98
62
754
Accrued enterprise taxes
68
175
2,129
Accrued bonuses
335
333
4,052
Valuation loss on inventories
170
296
3,601
Foreign tax credits
404
404
4,915
Tax loss carryforwards
783
582
7,081
Loss on impairment of investments insecurities and golf-club memberships
914
844
10,269Loss on impairment of fixed assets
167
147
1,789
1,112
888
10,805
Other
Gross deferred tax assets
6,501
5,810
70,690(2,768)(2,399)(29,189)
Less valuation allowance
Total deferred tax assets
3,733
3,411
41,501
Deferred tax liabilities:
Dividends from an overseas
consolidated subsidiary
Unrealized holding gain on securities
Land revaluation reserve
Reserve for deferred taxation oncontributions for acquisition of property
Other
Total deferred tax liabilities
Net deferred tax liabilities(36)(2,358)(1,041)(113)(1,782)(919)(1,375)(21,681)(11,181)

(823)
(135)
(4,393)
¥
(660)

(694)
(124)
(3,632)¥(221)(8,444)(1,509)(44,190)$ (2,689)

The “Act for Partial Revision of the Income Tax Act etc. for the Purpose of Creating
Taxation System Responding to Changes in Economic and Social Structures” (Act No. 114
of 2011) and the “Act for Special Measures for Securing Financial Resources Necessary to
Implement Measures for Reconstruction following the Great East Japan Earthquake” (ActNo.117 of 2011) were promulgated on December 2, 2011 and the staged reduction of thenational corporate tax rate and a special reconstruction corporate tax will apply to corporate
tax effective for fiscal years beginning on or after April 1, 2012.

32

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

15. Income Taxes (continued)
In line with these revisions, the Company changed the statutory tax rate to calculatedeferred tax assets and liabilities from 40.5% to 37.9% for temporary differences expected
to be realized during the period from the fiscal year beginning on April 1, 2012 to the fiscal
year beginning on April 1, 2014. Similarly, the Company changed the statutory tax rate tocalculate deferred tax assets and liabilities from 40.5% to 35.5% for temporary differences
expected to be realized during the fiscal year beginning on April 1, 2015 and thereafter.
The effect of the announced reduction of the effective statutory tax rate was to increase net
deferred tax assets (after netting deferred tax liabilities) by ¥30 million ($365 thousand),increase unrealized holding gain on securities by ¥280 million ($3,407 thousand) anddecrease income taxes-deferred by ¥250 million ($3,042 thousand) as of and for the year
ended March 31, 2012. In addition, the impact also decreased deferred income taxes onland revaluation reserve by ¥129 million ($1,570 thousand) and increased land revaluation
reserve by ¥166 million ($2,020 thousand) as of March 31, 2012.

16. Other Comprehensive Loss
Reclassification adjustments and tax effects of other comprehensive loss for the year ended
March 31, 2012 are summarized as follows:

Unrealized holding loss on securities:
Loss arising during the year
Reclassification adjustments
Before tax effectTax effectTotal
Land revaluation reserve:
Tax effectTranslation adjustments:
Amount arising during the year
Share of other comprehensive income of an affiliate
accounted for by the equity method:Amount arising during the year
Total

Millions of yen
2012
¥
(842)
75
(767)
575
(192)

Thousands of
U.S. dollars
2012$ (10,245)
913(9,332)
6,996(2,336)

122

1,484

(1,587)(19,309)44¥ (1,613)

536$ (19,625)

33

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

17. Shareholders’ Equity
The Corporation Law of Japan (the “Law”) provides that an amount equal to 10% of theamount to be disbursed as distributions of capital surplus (other than the capital reserve)
and retained earnings (other than the legal reserve) be transferred to the capital reserve andthe legal reserve, respectively, until the sum of the capital reserve and the legal reserve
equals 25% of the capital stock account. Such distributions can be made at any time byresolution of the shareholders, or by the Board of Directors if certain conditions are met.
The legal reserve of the Company was nil at March 31, 2011 and 2012.
Stock options
Stock option expenses charged to income for the years ended March 31, 2011 and 2012amounted to ¥29 million and ¥19 million ($231 thousand), respectively.
In accordance with the former Commercial Code of Japan (“the Code”), a stock option planfor certain directors and executive officers of the Company was approved at the annual
general meeting of the shareholders held on June 29, 2004. Under the terms of this plan,
up to 81,000 shares of common stock were granted at ¥1 ($0.01) per share. The options
became exercisable on July 13, 2004 and are scheduled to expire on June 29, 2024.
In accordance with the Code, a stock option plan for certain directors and executive officersof the Company was approved at the annual general meeting of the shareholders held on
June 29, 2005. Under the terms of this plan, up to 62,000 shares of common stock were
granted at ¥1 ($0.01) per share. The options became exercisable on July 15, 2005 and arescheduled to expire on June 29, 2025.
In accordance with the Code, a stock option plan for certain directors and executive officersof the Company was approved at the annual general meeting of the shareholders held on
June 29, 2006. Under the terms of this plan, up to 53,000 shares of common stock were
granted at ¥1 ($0.01) per share. The options became exercisable on August 1, 2006 andare scheduled to expire on June 29, 2026.
In accordance with the Law, a stock option plan for certain directors and executive officersof the Company was approved at a meeting of the Board of Directors held on July 17, 2007.
Under the terms of this plan, up to 43,000 shares of common stock were granted at ¥1($0.01) per share. The options became exercisable on August 2, 2007 and are scheduled
to expire on June 29, 2027.

34

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

17. Shareholders’ Equity (continued)
In accordance with the Law, a stock option plan for certain directors and executive officersof the Company was approved at a meeting of the Board of Directors held on July 15, 2008.
Under the terms of this plan, up to 60,000 shares of common stock were granted at ¥1($0.01) per share. The options became exercisable on July 31, 2008 and are scheduled to
expire on June 29, 2028.
In accordance with the Law, a stock option plan for certain directors and executive officersof the Company was approved at a meeting of the Board of Directors held on July 15, 2009.
Under the terms of this plan, up to 69,000 shares of common stock were granted at ¥1($0.01) per share. The options became exercisable on July 31, 2009 and are scheduled to
expire on June 29, 2029.
In accordance with the Law, a stock option plan for certain directors and executive officersof the Company was approved at a meeting of the Board of Directors held on July 15, 2010.
Under the terms of this plan, up to 102,000 shares of common stock were granted at ¥1($0.01) per share. The options became exercisable on July 30, 2010 and are scheduled to
expire on June 29, 2030.
In accordance with the Law, a stock option plan for certain directors and executive officersof the Company was approved at a meeting of the Board of Directors held on July 15, 2011.
Under the terms of this plan, up to 98,000 shares of common stock were granted at ¥1($0.01) per share. The options became exercisable on August 2, 2011 and are scheduled
to expire on June 29, 2031.
Treasury stock
Movements in treasury stock during the years ended March 31, 2011 and 2012 aresummarized as follows:

Treasury stock

April 1, 2010
18,479,353

Treasury stock

April 1, 2011
23,913,491

Number of shares
2011
Increase
Decrease
5,497,138
63,000
Number of shares
2012
Increase
Decrease
1,073,702
10,876

March 31, 2011
23,913,491

March 31, 2012
24,976,317

35

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

18. Land Revaluation
At March 31, 2000 and 2002, certain consolidated subsidiaries and an affiliate revalued
their land held for business use in accordance with the “Law on Land Revaluation.”
Differences on land revaluation have been accounted for as land revaluation reserve under
net assets and are stated at the Company’s share of the net amount of the relevant tax effect.
The method followed for land revaluation was determined in accordance with the“Enforcement Act Concerning Land Revaluation.”
The fair value of the land revalued at March 31, 2000 and 2002 was less than thecorresponding carrying value by the following amounts at March 31, 2011 and 2012:Land revalued at March 31, 2000
Land revalued at March 31, 2002

Millions of yen
2011
2012
¥ (255)¥ (280)(454)(521)¥ (709)¥ (801)Thousands of
U.S. dollars
2012$ (3,407)(6,339)$ (9,746)

A certain portion of land revalued at March 31, 2000 and 2002 is related to real estate forinvestment and rental at March 31, 2011 in the amounts of ¥14 million and ¥125 million,
respectively.
A certain portion of land revalued at March 31, 2000 and 2002 is related to real estate forinvestment and rental at March 31, 2012 in the amounts of ¥15 million ($183 thousand) and¥196 million ($2,385 thousand), respectively.

19. Research and Development Costs
Research and development costs included in selling, general and administrative expenses
totaled ¥456 million and ¥457 million ($5,560 thousand) for the years ended March 31,
2011 and 2012, respectively.

36

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

20. Leases
The following pro forma amounts represent the acquisition costs, accumulated depreciationand net book value of the leased assets at March 31, 2011 and 2012, which would havebeen reflected in the accompanying consolidated balance sheets if finance leases other thanthose which transfer the ownership of the leased assets to the Group (currently accounted
for as operating leases) were capitalized:
Millions of yen
Acquisition
costs

2011
Accumulated
depreciation

Net book
value

¥ 62

¥ 51

¥ 11

Machinery,equipment andvehiclesAcquisition
costs

2012
Accumulated
depreciation

Net book
value

¥ 31

¥ 27

¥4

Thousands of U.S dollars
2012
Acquisition Accumulated Net bookcosts
depreciation
value
Machinery,equipment andvehicles

$ 377

$ 329

$ 48

The related lease payments and depreciation for the years ended March 31, 2011 and 2012were as follows:

Lease payments
Depreciation

Millions of yen
2011
2012
¥ 16
¥ 11
16
11

Thousands of
U.S. dollars
2012
$ 134
134

Depreciation is calculated by the straight-line method over the respective lease terms
assuming a nil residual value.
No loss on impairment has been recorded on leased assets for the years ended March 31,
2011 and 2012.
The related future minimum lease payments (including the interest portion thereon)
subsequent to March 31, 2012 under finance leases other than those which transfer theownership of the leased assets to the Group are summarized as follows:Year ending March 31,
20132014 and thereafter

Millions of yen
¥ 2
2
¥ 4

Thousands of
U.S. dollars
$ 24
24
$ 48

37

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

21. Derivatives
The open currency-related derivatives positions not designated as hedging instruments at
March 31, 2012 are as follows:
Thousands of
New Taiwan dollars

Type of transaction
Over-the-counter transactions
Forward foreign exchange contracts:
Selling USD

Millions of yen
2012

Thousands of
U.S. dollars

Contract value(notional
principal amount)Contract value
over one year

Estimated
Fair Value

UnrealizedGain

Estimated
Fair Value

UnrealizedGain

TWD 174,802

TWD –

¥2

¥ 2

$ 24

$ 24

Fair value is based on the prices obtained from a financial institution.
The open currency-related derivatives positions designated as hedging instruments at
March 31, 2011 and 2012 are as follows:
Millions of yen
2011

Method ofhedge accounting
Allocation method
for forward foreignexchange contracts

Method ofhedge accounting
Allocation method
for forward foreignexchange contracts

Hedge transactions
and major hedged items

Contract
value(notional
principal
amount)Contract
value over
one year

Forward foreign exchange contracts:
Selling USD, Accounts receivable

¥ 518

¥ –

Hedge transactions
and major hedged items
Forward foreign exchange contracts:
Selling USD, Accounts receivable

2012

Estimated
fair value

Contract
value(notional
principal
amount)Contract
value over
one year

Estimated
fair value

¥ –

¥ 719

¥ –

¥ –

Thousands of U.S. dollars
2012
Contract
value(notional
Contractprincipal
value over
Estimatedamount)one yearfair value$ 8,748$ –$ –The fair value of forward foreign exchange contracts that qualify for deferral hedge
accounting is included in the carrying value of hedged accounts receivable.

38

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

22. Amounts per Share
Amounts per share at March 31, 2011 and 2012 and for the years then ended were as
follows:
Yen
Net assets
Net income:
Basic
DilutedCash dividends

2011¥ 791.65

2012¥ 803.55

U.S. dollars
2012$ 9.77

10.57
10.55
10.00

24.07
24.01
10.00

0.29
0.29
0.12

Amounts per share of net assets are computed based on the number of shares of common
stock outstanding at the year end.
Basic net income per share is computed based on the net income attributable toshareholders of common stock and the weighted-average number of shares of common
stock outstanding during the year. Diluted net income per share is computed based on the
net income available for distribution to the shareholders and the weighted-average numberof shares of common stock outstanding during each year after giving effect to the dilutive
potential of shares of common stock to be issued upon the exercise of stock acquisitionrights.
Cash dividends per share represent the cash dividends proposed by the Board of Directors
as applicable to the respective years together with the interim cash dividends paid.

23. Transactions with Related Parties
Transactions and balances with related parties as of and for the years ended March 31, 2011
and 2012 are summarized as follows:
Transactions
Name ofaffiliated company

Type of transaction
Sales

Millions of yen
2011
2012
¥ 27,279¥ 30,560

Thousands of
U.S. dollars
2012$ 371,821

Balances
Sadoshima
Corporation
Account nameNotes and accounts
receivable

Millions of yen
2011
2012
¥

9,989

¥ 11,086

Thousands of
U.S. dollars
2012$ 134,883

The Company owns 50.0% of the voting rights of Sadoshima Corporation, a steel productwholesaler for the Company. Certain of its board members serve concurrently as board
members of the Company. Selling prices of products are determined based on pricenegotiations each fiscal year, after considering market prices, overall costs and theCompany’s proposals regarding desired prices.
39

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

24. Investment, Rental and Idle Properties
The Company and certain consolidated subsidiaries own office buildings, land, and parking
lots as rental properties and idle properties mainly in Osaka Prefecture, other domestic
areas and Taiwan.
The carrying value in the consolidated balance sheets at March 31, 2011 and 2012 and thecorresponding fair value of rental properties and idle properties are as follows:2010
Rental properties and idle
properties
Properties of which a part areused as rental properties
Total¥ (129)¥ 4,745¥ 9,006

5,002¥ 9,876(115)¥ (244)

4,887¥ 9,632

11,796¥ 20,802

Millions of yen
Carrying value
Net change
2012

Fair value
2012¥ 4,745¥ (319)¥ 4,426¥ 8,620

4,887¥ 9,632(69)¥ (388)4,818¥ 9,244

9,641¥ 18,261

Thousands of U.S. dollars
Carrying value
Net change
2012

Fair value
2012

2011
Rental properties and idle
properties
Properties of which a part areused as rental properties
Total

Fair value
2011¥ 4,874

2011
Rental properties and idle
properties
Properties of which a part areused as rental properties
Total

Millions of yen
Carrying value
Net change
2011$ 57,732$ (3,881)$ 53,851$ 104,879

59,460$ 117,192(840)$ (4,721)

58,620$ 112,471

117,301$ 222,180

40

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

24. Investment, Rental and Idle Properties (continued)
The carrying value represents the acquisition cost less accumulated depreciation andcumulative impairment loss.
The components of net change in carrying value for the year ended March 31, 2011
included decreases mainly due to impairment loss recognized in the amount of ¥9 million,translation adjustments in the amount of ¥35 million, disposal of buildings in the amount of¥29 million and depreciation of buildings in the amount of ¥170 million.
The components of net change in carrying value for the year ended March 31, 2012
included decreases mainly due to impairment loss recognized in the amount of ¥125 million($1,521 thousand), translation adjustments in the amount of ¥99 million ($1,205 thousand)and depreciation of buildings in the amount of ¥160 million ($1,947 thousand).
Fair value of domestic rental properties are principally measured based on the real-estateappraisal assessed by the external real-estate appraiser. However, unless the appraisal orindicators that are regarded to reflect the fair value of the properties appropriately change
significantly since the date of acquisition or the date of the latest appraisal, the Company
and certain domestic consolidated subsidiaries measure the fair value of the properties
based on such appraisal or indicators obtained previously and adjusted as appropriately.
Fair value of rental properties in Taiwan is measured based on the property prices
announced by the government.
Revenues, costs and expenses relevant to investment, rental and idle properties for the years
ended March 31, 2011 and 2012 are as follows:
Millions of yen
2011
Rental revenues¥ 1,048

Rental costs¥ 617

Difference¥ 431

Other gain (loss), net
on sales and others¥ (39)

Millions of yen
2012
Rental revenues¥
850

Rental costs¥ 598

Difference¥ 252

Other gain (loss), net
on sales and others¥ 66

Thousands of U.S. dollars
2012
Rental revenues$ 10,342

Rental costs$ 7,276

Difference$ 3,066

Other gain (loss), net
on sales and others
$ 803

41

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

24. Investment, Rental and Idle Properties (continued)
The rental revenues and rental costs for certain properties of which only a part are used asrental properties are not included in the above table because the Company and certain
consolidated subsidiaries use a portion of these properties for the purposes of rendering
services and conducting management activities. The rental revenues are recorded under
net sales or other income and the rental costs are recorded under cost of sales, selling,
general and administrative expenses or other, net, as part of other expenses, in the
consolidated statements of income.

25. Segment Informationi)Outline of segment information
The reportable segments of the Group are components for which discrete financial
information is available, and whose operating results are regularly reviewed by the
Board of Directors of the Company in order to make decisions about resource
allocation and to assess business performance.
The Group’s business units are divided by the similarity of the products or services
sold by each business unit. Each business unit develops its own strategies andoperates its businesses independently.
Therefore, the Group consists four reportable segments based on business units: “Steel
Sheet Segment,” “Roll Segment,” “Grating Segment” and “Real Estate Segment.”
The “Steel Sheet Segment” engages in the manufacture and sale of cold rolled steel,polished hoop steel, hot dip galvanizing steel sheets, painted hot dip galvanizing steel
sheets, other construction materials, building materials and exterior products and others
and in designing and engineering of construction work. The “Roll Segment” engages
in the manufacture and sale of rolls for iron, steel and non-ferrous products and others.
The “Grating Segment” engages in the manufacture and sales of gratings. The “RealEstate Segment” engages in the sale, purchase and lease of real estate such as buildings
and car parking lots.

ii) Calculation methods used for net sales, income or loss, assets and other items ofeach reportable segment
The accounting policies of the segments are substantially the same as those describedin the summary of significant accounting policies in Note 1. In addition, segment
income (loss) is adjusted to be consistent with operating income in the consolidated
statements of income.

42

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

25. Segment Information (continued)iii) Information on net sales, income or loss, assets and other items of each reportablesegment
Information by reportable segment for the years ended March 31, 2011 and 2012 are as
follows:
Millions of yen
Year ended March 31, 2011

Net sales
Sales to third
partiesInter-segment
sales andtransfers
Total
Segment income(loss)
Segment assets

Steel Sheet
Segment

Reportable Segments
Roll
Grating Real Estate
Segment Segment Segment

Sub-Total

Other

Total

¥ 133,463¥ 4,147¥ 3,261¥ 1,023¥ 141,894¥ 2,880¥ 144,774¥–¥ 144,774

1¥ 133,464–¥ 4,147–¥ 3,261493¥ 1,516494¥ 142,388

2,637¥ 5,5173,131¥ 147,905(3,131)¥ (3,131)–¥ 144,774¥ 4,163¥ 95,056¥ 284¥ 4,401¥(1)¥ 3,381¥ 823¥ 8,666¥ 5,269¥ 111,504¥
49¥ 6,951¥ 5,318¥ 118,455¥ (1,094)¥ 56,714¥ 4,224¥ 175,169

¥

¥

¥

¥

¥

¥

¥

¥

Other items
Depreciation
andamortization¥
Investment in an
affiliateaccounted forby the equity
methodIncrease inproperty, plantand equipment
and intangible
assets

4,746

420

91

96

5,353

178

5,531

Adjustments
andeliminations

65

Consolidated

5,596

2,920

–

284

2

3,206

–

3,206

–

3,206

1,875

109

198

17

2,199

99

2,298

26

2,324

43

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

25. Segment Information (continued)
Millions of yen
Year ended March 31, 2012

Net sales
Sales to third
partiesInter-segment
sales andtransfers
Total
Segment income(loss)
Segment assets
Other items
Depreciation
andamortization
Investment in
an affiliate
accounted forby the equity
methodIncrease inproperty, plantand equipment
and intangible
assetsReportable Segments
Steel Sheet
Roll
Grating Real Estate
Segment Segment Segment
Segment

Sub-Total

Other

Total

¥ 140,660¥ 5,053¥ 3,147¥886¥ 149,746¥ 3,031¥ 152,777¥–¥ 152,777–¥ 140,660–¥ 5,053–¥ 3,147479¥ 1,365479¥ 150,225

2,759¥ 5,790

3,238¥ 156,015(3,238)¥ (3,238)–¥ 152,777¥ 6,383¥ 99,804¥ 519¥ 4,498¥ (141)¥ 3,263¥ 706¥ 8,559¥ 7,467¥ 116,124¥
52¥ 7,034¥ 7,519¥ 123,158¥ (1,105)¥ 54,798¥ 6,414¥ 177,956

¥

¥

¥

¥

¥

¥

¥

¥

¥

4,109

347

118

85

4,659

161

4,820

Adjustments
andeliminations

61

Consolidated

4,881

3,117

–

301

2

3,420

–

3,420

–

3,420

1,711

366

27

19

2,123

62

2,185

29

2,214

Adjustments
andeliminations

Consolidated

Thousands of U.S. dollars
Year ended March 31, 2012

Net sales
Sales to third
partiesInter-segment
sales andtransfers
Total
Segment income(loss)
Segment assets

Steel Sheet
Segment

Reportable Segments
Roll
Grating Real Estate
Segment Segment Segment

Sub-Total

Other

Total

$ 1,711,400$ 61,480 $ 38,289 $ 10,780$ 1,821,949$ 36,878$ 1,858,827$–$ 1,858,827–$ 1,711,400

–
–
5,828
$ 61,480 $ 38,289 $ 16,608

5,828$ 1,827,777

33,569$ 70,447

39,397$ 1,898,224(39,397)$ (39,397)–$ 1,858,827$ 77,661$ 1,214,308$ 6,315 $ (1,716) $ 8,590$ 54,727 $ 39,701 $ 104,137$
90,850$ 1,412,873$
633$ 85,582$
91,483$ 1,498,455$ (13,444)$ 666,723$
78,039$ 2,165,178$ 4,222 $ 1,436 $$

56,686$ 1,959$$$

Other items
Depreciation
andamortization$
Investment in an
affiliateaccounted forby the equity
methodIncrease inproperty, plantand equipment
and intangible
assets49,994

1,034

58,645742

59,38737,924

–

3,662

25

41,611–

41,611–

41,611

20,818

4,453

328

231

25,830755

26,585353

26,93844

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

25. Segment Information (continued)
Net sales categorized by country and region based on locations of customers within theGroup for the years ended March 31, 2011 and 2012 are summarized as follows:Japan¥ 88,338

Millions of yen
2011
TaiwanOther¥ 21,582¥ 34,854

Total¥ 144,774Japan¥ 98,561

Millions of yen
2012
TaiwanOther¥ 23,993¥ 30,223

Total¥ 152,777Japan$ 1,199,185

Thousands of U.S. dollars
2012
TaiwanOther$ 291,921$ 367,721

Total$ 1,858,827

Property, plant and equipment, net, categorized by geographical area at March 31, 2011 and2012 are summarized as follows:Japan¥ 35,994

Millions of yen
2011
TaiwanOther¥ 11,573¥ –Total¥ 47,567Japan¥ 33,949

Millions of yen
2012
TaiwanOther¥ 9,635¥ 67

Total¥ 43,651

Thousands of U.S. dollars

2012
Japan
$ 413,055

Taiwan$ 117,229

Other
$ 815

Total
$ 531,09945

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

25. Segment Information (continued)
Net sales to major customers for the years ended March 31, 2011 and 2012 are as follows:

Millions of yen
2011
2012

Customer nameSadoshima
Corporation¥ 27,279¥ 30,560

Thousands of
U.S. dollars
2012

Related Segments“Steel Sheet Segment,”“Grating Segment,”“Real Estate Segment”
and “Other”$ 371,821

Loss on impairment of fixed assets by reportable segment for the years ended March 31,
2011 and 2012 are summarized as follows:

Steel Sheet
Segment
Loss on impairment of
fixed assets

¥

¥ –

9

Steel Sheet
Segment
Loss on impairment of
fixed assets

¥

–

$

–

¥ –

¥ –

¥ 0

Millions of yen
Year ended March 31, 2012
Reportable Segments
Roll
Grating
Real Estate
Segment Segment
Segment
Other¥ –Steel Sheet
Segment
Loss on impairment of
fixed assets

Millions of yen
Year ended March 31, 2011
Reportable Segments
Roll
Grating
Real Estate
Segment Segment
Segment
Other

¥ –

¥ –

¥ 0

Thousands of U.S. dollars
Year ended March 31, 2012
Reportable Segments
Roll
Grating
Real Estate
Segment Segment
Segment
Other
$ –

$ –

$ –

$

0

Adjustments andeliminations

Total

¥ 42

¥ 51

Adjustments andeliminations

Total

¥ 125

¥ 125

Adjustments andeliminations

Total$ 1,521$ 1,52146

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

25. Segment Information (continued)
The amortization and balance of negative goodwill by reportable segment as of and for theyears ended March 31, 2011 and 2012:

Amortization
Balance at the year end

Amortization
Balance at the year end

Amortization
Balance at the year end

Steel Sheet
Segment¥ 13
39

Millions of yen
Year ended March 31, 2011
Reportable Segments
Roll
Grating
Real Estate
Segment Segment
Segment
Other
¥ 0
¥ 0
¥ –
¥ 21
0
1
–
24

Adjustments andeliminations
¥ 4
10

Total
¥ 38
74

Steel Sheet
Segment¥ 14
26

Millions of yen
Year ended March 31, 2012
Reportable Segments
Roll
Grating
Real Estate
Segment Segment
Segment
Other
¥ 0
¥ 0
¥ –
¥ 21
0
1
–
3

Adjustments andeliminations
¥ 3
6

Total
¥ 38
36

Steel Sheet
Segment$ 170
316

Thousands of U.S. dollars
Year ended March 31, 2012
Reportable Segments
Roll
Grating
Real Estate
Segment Segment
Segment
Other
$ 0
$ 0
$–
$ 256
0
12
–
37

Adjustments andeliminations
$ 36
73

Total
$ 462
438

47

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

25. Segment Information (continued)
Negative goodwill credited to income by reportable segment for the years ended March 31,
2011 and 2012 are summarized as follows:
Millions of yen
Year ended March 31, 2011
Reportable Segments
Steel Sheet
Roll
Grating
Real Estate
Segment Segment Segment
Segment
Other
Negative goodwill
credited to income

¥

5

¥

0

¥

0

¥

–

¥

1

Millions of yen
Year ended March 31, 2012
Reportable Segments
Steel Sheet
Roll
Grating
Real Estate
Segment Segment Segment
Segment
Other
Negative goodwill
credited to income

¥

3

¥

0

¥

0

¥

–

¥

0

Thousands of U.S. dollars
Year ended March 31, 2012
Reportable Segments
Steel Sheet
Roll
Grating
Real Estate
Segment Segment Segment
Segment
Other
Negative goodwill
credited to income

$ 37

$

0

$

0

$

–

$

0

Adjustments andeliminations

Total

¥

¥ 8

2

Adjustments andeliminations

Total

¥

¥ 4

1

Adjustments andeliminations

Total

$ 12

$ 49

Negative goodwill was credited to income for the years ended March 31, 2011 and 2012
due to purchases of a subsidiary’s shares and recorded under other, net, as part of otherexpenses in the consolidated statements of income.

26. Subsequent Event
The following distribution of retained earnings of the Company, which has not beenreflected in the accompanying consolidated financial statements for the year ended March
31, 2012, was approved at a meeting of the Board of Directors held on May 11, 2012:

Cash dividends of ¥5 ($0.06) per share

Millions of yen¥ 802

Thousands of
U.S. dollars$ 9,758

48