Mitsubishi Steel Mfg : Matters Excluded from Paper-Based Documents Delivered to Shareholders

This document has been translated from the Japanese original FOR REFERENCE PURPOSES ONLY. In the event of any discrepancy between this translated document and the Japanese original, THE ORIGINAL SHALL PREVAIL. Mitsubishi Steel Mfg. Co., Ltd. assumes NO RESPONSIBILITY for this translation or for direct, indirect or any other forms of damages arising from this translation.

Matters Excluded from Paper-Based Documents Delivered to Shareholders

99th Fiscal Year (April 1, 2022 - March 31, 2023)

1. Notes to the Consolidated Financial Statements
2. Notes to the Non-consolidated Financial Statements

Mitsubishi Steel Mfg. Co., Ltd.

Pursuant to the provisions of laws and regulations and Article 14 of the Articles of Incorporation, among the matters for which measures for providing information in electronic format are to be taken, matters not provided in the paper-based documents delivered to shareholders are posted in this information.

Notes to the Consolidated Financial Statements

(April 1, 2022 - March 31, 2023)

(Notes on Significant Information Regarding the Preparation of Consolidated Financial Statements)

1.	Scope of consolidation
	(1) Number of consolidated subsidiaries:	18
	Names of major consolidated subsidiaries:	MSSC CANADA INC.
		MSSC US INC.
		MSSC Ahle GmbH
		MSM NINGBO SPRING CO., LTD.
		MSM Philippines Mfg. INC.
		MSM SPRING INDIA PVT. LTD.
		MSSC MFG MEXICANA, S.A. DE C.V.
		MSM (THAILAND) CO., LTD.
		PT. JATIM TAMAN STEEL MFG.
		Mitsubishi Steel Muroran Inc.
		Mitsubishi Nagasaki Machinery Mfg. Co.,
		Ltd.
		Ryokoh Express Co., Ltd.
2.	Application of the equity method
	(1) Number of affiliates accounted for under the equity method:	3
	Name of affiliates accounted for under the equity method:
		Hokkai Iron & Coke Corporation

CROFT PROPERTIES HOLDINGS, INC.

Stumpp Schuele & Somappa Auto Suspension Systems Pvt. Ltd.

(2) Affiliate not accounted for under the equity method:

Name of major affiliate:

Dai-ichi Heat Muroran Co., Ltd.

Companies not accounted for under the equity method are excluded from the scope of application of the equity method as their impact on net income (amount corresponding to interests), retained earnings (amount corresponding to interests), etc. is not only minuscule individually but is also insignificant as a whole.

- 1 -

3. Matters for the fiscal year for consolidated subsidiaries

Shown below are consolidated subsidiaries with a balance sheet date other than the balance sheet date for the Company's consolidated accounts (March 31 of each year):

	Closing date
PT. JATIM TAMAN STEEL MFG.	December 31
MSSC MFG MEXICANA, S.A. DE C.V.	December 31
MSM NINGBO SPRING CO., LTD.	December 31
Shanghai Ryoutan Machinery Co., Ltd.	December 31
MSSC Ahle GmbH	December 31
MSM (THAILAND) CO., LTD.	February 28

In preparing consolidated financial statements, the Company uses data as of the subsidiary's closing date, and makes the necessary adjustments to reflect important transactions that occurred between the subsidiary's closing date and the consolidation date.

4. Accounting policies

1. Valuation standards and methods of principal assets
2. 1. Securities Available-for-sale securities
      Those other than stocks, etc. for which market prices are not available:

	The present market value is recorded based on the market
	prices, etc., on the last day of the period. (Valuation
	differences are incorporated into net assets in full. Selling
	prices were computed based on the moving-average
	method.)
Stocks, etc. for which market prices are not available:
	Stated at cost mainly using the moving-average method.
(ii) Derivatives:	Market value method
(iii) Inventories:	Stated at cost based mainly on the periodic average method

(method in which book values are lowered based on declines in profitability).

(2) Depreciation and amortization methods of principal depreciable assets

(i) Property, plant and equipment (excluding leased assets):

The Company depreciates property, plant and equipment (excluding leased assets) using mainly the declining- balance method.

The range of useful lives of main property, plant and equipment is as follows:

Buildings and structures

8 - 33 years

Machinery, equipment and vehicles 4 - 14 years

(ii) Intangible assets (excluding leased assets):

The Company amortizes intangible assets (excluding

- 2 -

leased assets) using the straight-line method.

The range of useful lives and the amortization period of main intangible assets are as follows:

Software (in-house use)

5 years

(iii) Leased assets (including right-of-use assets):

Leased assets associated with finance leases in which ownership of the leased assets is not transferred to the lessee.

The straight-line method is used assuming the lease period equals the estimated useful life and the residual value at the end of the lease term is nil.

The financial statements of overseas consolidated subsidiaries were prepared in accordance with International Financial Reporting Standards ("IFRS") and U.S. Generally Accepted Accounting Principles ("GAAP"). International Financial Reporting Standard 16 Leases ("IFRS 16") and U.S. Accounting Standard Update (ASU) 2016-02 Leases ("ASU 2016-02") were applied to the subsidiaries.

Under IFRS 16 and ASU 2016-02, any lease for a lessee is recorded under assets or liabilities on the balance sheet as a general rule. The straight-line method is used for amortizing right-of-use assets recorded under assets.

In addition, in "(Lease transactions)", lease transactions under IFRS 16 and ASU 2016-02 are classified into finance leases in which ownership of the leased assets is not transferred to the lessee.

1. Accounting standards for principal provisions and allowances
2. 1. Allowance for doubtful accounts:

In order to provide for potential credit losses due to accounts receivable being difficult to collect, loans receivable, etc., allowances of the estimated unrecoverable amounts are reported based on historical loan loss rates for general claims, and on an individual basis for specific receivables including doubtful receivables.

(ii) Provision for directors' retirement benefits:

With respect to some consolidated subsidiaries, in order to provide for the payment of retirement benefits for directors, an allowance in the amount to be paid at the end of the fiscal year is reported as required by internal rules.

(iii) Provision for loss on business liquidation:

Expected amount at the end of the current consolidated fiscal year is recorded in order to prepare for the benefits paid to employees who have been employed for a certain period which will arise in the future due to restructuring of a production system in the North America consolidated subsidiary.

- 3 -

(4) Other significant information for the preparation of Consolidated Financial Statements

(i) Hedge accounting method:

Deferral hedge accounting is used. In addition, special treatment is applied to interest rate swap contracts that meet the requirements for special treatment.

(ii) Accounting method for retirement benefits:

In order to provide for the payment of employee retirement benefits, the Company reports the amount of the retirement benefit obligations less pension assets at the end of the consolidated fiscal year under review as net defined benefit liability (or net defined benefit asset if the amount of pension assets exceeds the amount of retirement benefit obligations).

In the calculation of retirement benefit obligations, the benefit formula has been used to attribute expected benefits to periods until the end of the consolidated fiscal year under review.

Prior service costs are expensed using the straight-line method based on a certain number of years (mainly 12 years) within the average remaining service years of the employees when incurred in each fiscal year.

Actuarial differences are expensed from the following fiscal year as incurred using the straight-line method based on a certain number of years (mainly 12 years) within the average remaining services years of the employees when incurred in each fiscal year.

Unrecognized actuarial differences and unrecognized prior service costs have been recorded under remeasurements of defined benefit plans under accumulated other comprehensive income in net assets upon adjustment of tax effects.

In some of the Company's subsidiaries in North America, non-pensionpost-retirement health benefits are treated similarly to retirement benefits, i.e. their total amounts are estimated and allocated on the basis of the employee's years of service, and due to their similar nature to retirement benefits, have been included in net defined benefit liability.

(iii) Recording standards of revenue related to sales of products:

We and our consolidated subsidiaries manufacture and sell specialty steel, springs, fabricated materials, etc., and with respect to sales of such products, we determine that the performance obligations are fulfilled at the time the customer obtains control over such products and we recognize the revenue of such products.

For domestic sales, revenue is recognized at the time of shipment because the period from the time of shipment until control of the product is transferred to the customer is normal.

- 4 -