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ANNUAL REPORT 2011Year ended March 31, 2011
19-1 Nihonbashi, 1-chome Chuo-ku, Tokyo 103-8630, Japanhttp://www.mitsubishi-logistics.co.jp
005_0808001372309.indd 1 2011/09/14 10:54:16名称未設定-1 1 2011/09/16 9:16:58
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Company Profile (As of March 31, 2011)
Headquarters and Branches
Headquarters: Chuo-ku, Tokyo
Branches: Tokyo, Yokohama, Nagoya, Osaka, Kobe and Fukuoka
Date of Establishment April 15, 1887
Capital ¥22,393,986,570
Number of Shares Issued 175,921,478
Authorized Shares 440,000,000
Number of Employees 832 persons (parent only; not including 158 employees temporarily on loan to other companies. There are also 62 temporary employees, as well as 574 persons temporarily loaned or dispatched within the Group and those from outside the Group companies and accepted by the Company)
4,283 persons (on a consolidated basis; not including 58 employees temporarily on loan to companies outside the Group. There are also 1,235 temporary employees, as well as 1,068 persons temporarily loaned or dispatched from outside the Group companies and accepted by the Company)
Stock Exchange Listing First Section of the Tokyo Stock Exchange
First Section of the Osaka Securities Exchange
Securities Code 9301
Major ShareholdersShareholder’s Name Number of Shares Held (Thousands) Shareholding Ratio (%)Japan Trustee Services Bank, Ltd. (trust account) 11,839 6.8Meiji Yasuda Life Insurance Company 9,707 5.5The Master Trust Bank of Japan, Ltd. (trust account) 9,683 5.5Tokio Marine & Nichido Fire Insurance Co., Ltd. 8,603 4.9MITSUBISHI ESTATE CO., LTD. 7,331 4.2Kirin Holdings Company, Limited 6,921 3.9The Bank of Tokyo-Mitsubishi UFJ, Ltd. 3,728 2.1JPMorgan Securities Japan Co., Ltd. 3,592 2.0ASAHI GLASS CO., LTD. 3,315 1.9Mitsubishi Corporation 3,205 1.8
Notes:1. The Bank of Tokyo-Mitsubishi UFJ, Ltd. has set 1,500,000 Mitsubishi Logistics’ shares as trust funds for retirement benefits for which voting rights are
reserved, in addition to the shares stated in the table above.2. The “Shareholding ratio” is calculated after excluding treasury stock (562,898 shares).
Notes:1. Directors with an asterisk (*) are representative directors.2. Minoru Makihara, Jiro Nemoto and Shigemitsu Miki are Outside Directors as stipulated in the Companies Act Article 2, Item 15. The Company designated them as independent
directors as required by the rules of the Tokyo Stock Exchange and the Osaka Securities Exchange, and reported it to both the Exchanges.3. Michio Izumi, Yohnosuke Yamada, and Saburo Horiuchi are Outside Corporate Auditors as stipulated in the Companies Act Article 2, Item 16. The Company designated them as
independent corporate auditors as required by the rules of the Tokyo Stock Exchange and the Osaka Securities Exchange, and reported it to both the Exchanges.
Directors and Corporate Auditors (As of June 29, 2011)Position Name Responsibilities and/or Primary OccupationChairman of the Board Naoshi BanPresident* Tetsuro OkamotoManaging Director* Fumio Takeda Responsible for General Affairs, Corporate Communications, Personnel, and PlanningManaging Director Atsuki Hashimoto Responsible for Technical and Real Estate BusinessManaging Director Makoto Sakaizawa Responsible for Warehousing & Distribution and Harbor Transportation BusinessManaging Director Koji Yoneyama Responsible for International Transportation BusinessManaging Director Yuichi Hashimoto Responsible for Accounting & financing, Information System, and Internal AuditDirector Minoru Makihara Senior Corporate Advisor, Mitsubishi CorporationDirector Jiro Nemoto Chief Board Advisor, Nippon Yusen Kabushiki KaishaDirector Shigemitsu Miki Senior Advisor, The Bank of Tokyo-Mitsubishi UFJ, Ltd.Director Kenji Irie General Manager, Technical DivisionDirector Yoshinori Watabe General Manager, Warehousing & Distribution DivisionDirector Akio Matsui General Manager, Personnel DivisionDirector Masato Hoki General Manager, Yokohama BranchStanding Corporate Auditor Tohru WatanabeStanding Corporate Auditor Michio IzumiCorporate Auditor Yohnosuke Yamada LawyerCorporate Auditor Shunkyo Harada Managing Director, Kyodo Soko CorporationCorporate Auditor Saburo Horiuchi Certified Public Accountant
Contents Contents ...
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To Our Shareholders
On the Great East Japan Earthquake
Topics
Overview of the Mitsubishi Logistics Group
Independent Auditor’s Report
Consolidated Balance Sheets
Consolidated Statements Of Income
Consolidated Statements Of Comprehensive Income
Consolidated Statements Of Changes In Net Assets
Consolidated Statements Of Cash Flows
Notes To Consolidated Financial Statements
Company Pro�le
1
2
2
4
5
6
8
9
10
11
13
37
005_0808001372309.indd 2 2011/09/14 10:54:18
37
Company Profile (As of March 31, 2011)
Headquarters and Branches
Headquarters: Chuo-ku, Tokyo
Branches: Tokyo, Yokohama, Nagoya, Osaka, Kobe and Fukuoka
Date of Establishment April 15, 1887
Capital ¥22,393,986,570
Number of Shares Issued 175,921,478
Authorized Shares 440,000,000
Number of Employees 832 persons (parent only; not including 158 employees temporarily on loan to other companies. There are also 62 temporary employees, as well as 574 persons temporarily loaned or dispatched within the Group and those from outside the Group companies and accepted by the Company)
4,283 persons (on a consolidated basis; not including 58 employees temporarily on loan to companies outside the Group. There are also 1,235 temporary employees, as well as 1,068 persons temporarily loaned or dispatched from outside the Group companies and accepted by the Company)
Stock Exchange Listing First Section of the Tokyo Stock Exchange
First Section of the Osaka Securities Exchange
Securities Code 9301
Major ShareholdersShareholder’s Name Number of Shares Held (Thousands) Shareholding Ratio (%)Japan Trustee Services Bank, Ltd. (trust account) 11,839 6.8Meiji Yasuda Life Insurance Company 9,707 5.5The Master Trust Bank of Japan, Ltd. (trust account) 9,683 5.5Tokio Marine & Nichido Fire Insurance Co., Ltd. 8,603 4.9MITSUBISHI ESTATE CO., LTD. 7,331 4.2Kirin Holdings Company, Limited 6,921 3.9The Bank of Tokyo-Mitsubishi UFJ, Ltd. 3,728 2.1JPMorgan Securities Japan Co., Ltd. 3,592 2.0ASAHI GLASS CO., LTD. 3,315 1.9Mitsubishi Corporation 3,205 1.8
Notes:1. The Bank of Tokyo-Mitsubishi UFJ, Ltd. has set 1,500,000 Mitsubishi Logistics’ shares as trust funds for retirement benefits for which voting rights are
reserved, in addition to the shares stated in the table above.2. The “Shareholding ratio” is calculated after excluding treasury stock (562,898 shares).
Notes:1. Directors with an asterisk (*) are representative directors.2. Minoru Makihara, Jiro Nemoto and Shigemitsu Miki are Outside Directors as stipulated in the Companies Act Article 2, Item 15. The Company designated them as independent
directors as required by the rules of the Tokyo Stock Exchange and the Osaka Securities Exchange, and reported it to both the Exchanges.3. Michio Izumi, Yohnosuke Yamada, and Saburo Horiuchi are Outside Corporate Auditors as stipulated in the Companies Act Article 2, Item 16. The Company designated them as
independent corporate auditors as required by the rules of the Tokyo Stock Exchange and the Osaka Securities Exchange, and reported it to both the Exchanges.
Directors and Corporate Auditors (As of June 29, 2011)Position Name Responsibilities and/or Primary OccupationChairman of the Board Naoshi BanPresident* Tetsuro OkamotoManaging Director* Fumio Takeda Responsible for General Affairs, Corporate Communications, Personnel, and PlanningManaging Director Atsuki Hashimoto Responsible for Technical and Real Estate BusinessManaging Director Makoto Sakaizawa Responsible for Warehousing & Distribution and Harbor Transportation BusinessManaging Director Koji Yoneyama Responsible for International Transportation BusinessManaging Director Yuichi Hashimoto Responsible for Accounting & financing, Information System, and Internal AuditDirector Minoru Makihara Senior Corporate Advisor, Mitsubishi CorporationDirector Jiro Nemoto Chief Board Advisor, Nippon Yusen Kabushiki KaishaDirector Shigemitsu Miki Senior Advisor, The Bank of Tokyo-Mitsubishi UFJ, Ltd.Director Kenji Irie General Manager, Technical DivisionDirector Yoshinori Watabe General Manager, Warehousing & Distribution DivisionDirector Akio Matsui General Manager, Personnel DivisionDirector Masato Hoki General Manager, Yokohama BranchStanding Corporate Auditor Tohru WatanabeStanding Corporate Auditor Michio IzumiCorporate Auditor Yohnosuke Yamada LawyerCorporate Auditor Shunkyo Harada Managing Director, Kyodo Soko CorporationCorporate Auditor Saburo Horiuchi Certified Public Accountant
Contents Contents ...
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To Our Shareholders
On the Great East Japan Earthquake
Topics
Overview of the Mitsubishi Logistics Group
Independent Auditor’s Report
Consolidated Balance Sheets
Consolidated Statements Of Income
Consolidated Statements Of Comprehensive Income
Consolidated Statements Of Changes In Net Assets
Consolidated Statements Of Cash Flows
Notes To Consolidated Financial Statements
Company Pro�le
1
2
2
4
5
6
8
9
10
11
13
37
005_0808001372309.indd 2 2011/09/14 10:54:18名称未設定-1 2 2011/09/16 9:16:59
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I wish to express my heartfelt sympathy to all those who were affected by the Great East Japan Earthquake which occurred on March 11. I pray for the early restoration and reconstruction of the affected areas.
I hereby report the business overview of the Mitsubishi Logistics Group for the 208th fiscal term, the year ended March 31, 2011.
During the year under review, the global economy was characterized by overall strength in emerging countries such as China and the trend toward a moderate recovery in the United States and Europe as well. The Japanese economy followed a mild recovery path as a result of an increase in exports and production spurred by economic growth in emerging countries, and steady consumer spending. However, the sense of uncertainty about the future increased due to the impact of the Great East Japan Earthquake that struck on March 11, 2011.
In these economic conditions, the business environment surrounding the Group remained difficult in the mainstay business segments of “Logistics” and “Real Estate.” For Logistics, the warehousing and port and harbor operations business was adversely affected by the logistics rationalization despite an expansion of export/import freight volumes. For Real Estate, the vacancy rate increased and the rent level partially decreased for some rental office buildings and commercial facilities due to the weak demand-supply relationship.
Under these circumstances, the Mitsubishi Logistics Group promoted aggressive marketing activities. In Logistics, we mainly strove to extend distribution center operations for pharmaceuticals and expand and reinforce operational bases overseas. In Real Estate, we focused our efforts on securing good tenants, maintaining and improving rent levels, and facilitating operations of the Yokohama Dia Building, which started leasing floor space in the second half of the previous fiscal year. Meanwhile, we endeavored to further improve business performance via thorough cost management and efficiency improvement of diverse business operations.
In an effort to expand the logistics business, we made a tender offer for the shares of Fuji Logistics Co., Ltd. As a result of the completion of settlement in late September 2010, Fuji Logistics Co., Ltd. and 10 of its subsidiaries became consolidated subsidiaries of the Company at the end of the second quarter. (The subsidiaries were included on the balance sheets from the second quarter and on the statements of income from the second half in the third quarter).
As a result, revenue for the Logistics segment for the year under review increased substantially and revenue for the Real Estate segment decreased modestly from the previous fiscal year, amounting to a combined ¥175,879 million, an increase of ¥27,532 million, or 18.6%, from the previous fiscal year. In Logistics, revenue increased significantly partly because cargo movement recovered in each business of warehousing, trucking, port and harbor operations, and international transportation, and also because Fuji Logistics Co., Ltd. and its subsidiaries were included as consolidated subsidiaries from the second half. In Real Estate, revenue decreased slightly from the previous fiscal year partly due to factors such as a decrease in orders for design and construction work despite the full-year contribution of the Yokohama Dia Building.
Cost of services on the whole increased ¥24,063 million, or 18.3%, year over year to ¥155,831 million, partly due to increases in operational and transportation costs, and personal expenses in Logistics, reflecting an increase in freight volume and the inclusion of Fuji Logistics Co., Ltd. and its subsidiaries as consolidated subsidiaries, and an increase in depreciation due to the full-year operation of the Yokohama Dia Building despite a decrease in design and construction work costs owing to a contraction in orders for design and construction work in Real Estate. Selling, general and administrative expenses increased ¥1,585 million, or 25.2%, year over year to ¥7,883 million, reflecting the inclusion of Fuji Logistics Co., Ltd. and its subsidiaries as consolidated subsidiaries.
As a consequence, operating income increased ¥1,883 million, or 18.3%, year over year to ¥12,164 million, reflecting the rise in revenue for the Logistics segment and the slight
increase in revenue for the Real Estate segment, and ordinary income increased ¥2,175 million, or 18.9%, to ¥13,688 million additionally due to an increase in dividends income. Consolidated net income rose ¥867 million, or 14.2%, from the previous fiscal year to ¥6,973 million despite the posting of extraordinary losses such as loss on earthquake disaster resulting from the damage caused by the Great East Japan Earthquake.
In the coming year, the global economy is expected to continue showing solid performance in emerging countries such as China, and a moderate recovery is anticipated in the United States and Europe. As for the Japanese economy, there are concerns about economic slowdown due to the impact of decrease in production activities and power shortage stemming from the damage caused by the Great East Japan Earthquake.
In this economic climate, while the business conditions surrounding the Group are uncertain due to the effects of the Great East Japan Earthquake, they are expected to remain harsh in view of the effects of stagnant growth in freight volume and the logistics rationalization in the warehousing and port and harbor operations business, as well as the weak supply-demand relationship and intensifying competition in the real estate industry.
Under these circumstances, the Mitsubishi Logistics Group will strive for sustainable growth by expanding both the domestic and overseas logistics businesses in tandem and the real estate business with an emphasis on building leases, in line with the Medium-term Management Plan (2010–2012), which was formulated in April 2010. Furthermore, we will engage in the early creation of synergy with Fuji Logistics Co., Ltd. and its subsidiaries which joined the Group at the end of the second quarter through the tender offer for shares, as well as appropriately respond to short-, medium- and long-term changes to the logistics and real estate businesses resulting from the effects of the Great East Japan Earthquake.
As for the distribution of profits of Mitsubishi Logistics for the year ended March 31, 2011, we intend to distribute a year-end dividend of ¥6 per share, taking into account operating results for the year. As a result, the annual dividend per share, including the interim dividend of ¥6 per share, totals ¥12, the same as that for the previous fiscal year.
As for dividends for the fiscal year ending March 31, 2012, based on the basic dividend policy of stably distributing dividends with due regard to the profitability level, the interim dividend and the year-end dividend will be ¥6 per share, respectively, and the annual dividend per share therefore will be ¥12, unless any exceptional circumstances take place.
We look forward to your continued support and encouragement.
June 2011
Tetsuro Okamoto, President
To Our Shareholders
010_0808001372309.indd 1 2011/09/09 10:56:37
2
On the Great East Japan Earthquake Topics
The status of damage and responses by the Group to the Great East Japan Earthquake, which occurred on March 11, are as follows.
The Group has warehousing facilities (floor area of approximately 24,000 m2, about 2% of total floor area in Japan) in Sendai, Miyagi Prefecture, which was affected by the Great East Japan Earthquake, and engages in businesses such as the warehousing and distribution business and the trucking business. Some of the warehousing facilities in that area were damaged by the earthquake and the ensuing tsunami while some of the stored cargo collapsed, got wet, and suffered other damage. Also, some of the Group’s facilities in the Tokyo metropolitan area, such as warehouses and rental buildings, and stored cargo were also damaged.
There were no casualties among the Group’s employees.In order to deal with this earthquake, the Company set up the
“Great East Japan Earthquake Response Headquarters” at the headquarters of the Company immediately after the earthquake occurred with the President as the head, supported affected employees, and engaged in the early restoration of operations.
As a result of these efforts, in the Tokyo metropolitan area, we completed restoration work shortly after the occurrence of the earthquake, and returned to normal operations. Also, in the Sendai area, we resumed operations in earnest at the end of April.
We responded to urgent requests by our customers for the import and transportation of relief supplies and the transfer of inventory bases, among other things, in the logistics business, as well as to requests for the continuation and early restoration of operations in the real estate business by promptly confirming the status of damage to buildings and equipment and working to ensure safety.
Each of the Group companies and its officers and employees made a donation totaling approximately ¥50 million to support initiatives for the recent earthquake.
Mascots of Fuji Logistics Co., Ltd.FUJI-Pack’n (left) and Logi’e (right)
Completion of Acquisition Process for Shares of Fuji Logistics Co., Ltd.
The Company made a tender offer for the shares of Fuji Logistics Co., Ltd. (hereinafter “Fuji Logistics”), and made Fuji Logistics and its subsidiaries the Company’s consolidated subsidiaries on September 24, 2010. Thereafter, the Company initiated a purchase of shares from minority shareholders who did not subscribe to the tender offer (i.e. a squeeze out), and completed the initially scheduled acquisition process for the shares of Fuji Logistics. As a result of the series of processes, the Company’s shareholding ratio has become 95.0%.
Following the conversion of Fuji Logistics into the Company’s subsidiary, the Company and Fuji Logistics have established a committee for the purpose of building a collaborative system for both companies required for the early creation of synergy, deepened mutual understanding, as well as identified and resolved issues. These initiatives have already produced concrete results, such as mutual utilization of the domestic logistics facilities of both companies and the development of joint sales to customers.
Owing to the inclusion of Fuji Logistics and its subsidiaries in the Company’s consolidated subsidiaries following the tender offer of this time, the contribution of Fuji Logistics and its subsidiaries to the Company’s performance will be factored in, and the corporate performance goals under the Group’s Medium-term Management Plan (2010–2012) will be revised as follows.
Corporate Performance Goals (FY2012 consolidated basis)Operating revenue: ¥233 billionOperating income: ¥15.1 billionOrdinary income: ¥15.8 billionNet income for the year: ¥8.8 billion
In order to “Respond to globalization by expanding domestic and overseas logistics businesses in tandem” as declared in the Medium-term Management Plan (2010–2012), we will further pursue initiatives aimed at the early creation of synergy in the future.
010_0808001372309.indd 2 2011/09/09 10:56:38
3
Flow of Global clinical trial
Compiles clinical trial data and submits
simultaneous applications for
approval in Japan and overseas
Pharmaceuticalcompany
Clinical Supply
The Company
The Company
Japan
The Company’s partner
Delivery
Collection
Delivery
Collection
Overseas
Medical Institution
Clinical trial Approvalreview
Launch ofnew drug
Medical Institution
Japan
Overseas
Pharmaceuticalcompany
Approvedx x, xxxx
Ministry of Health,
Labour and Welfare
Approvedx x, xxxx
Local authorities
Mitsubishi Logistics
Mitsubishi Logistics
Expansion of Logistics Operations for Investigational New Drugs in Japan and Overseas
The Company has engaged in the storage and distribution of pharmaceuticals on consignment from Japanese and foreign pharmaceutical companies for approximately 30 years, and the Company is now expanding logistics operations for investigational new drugs by using such know-how.
Investigational new drugs are drugs under development as potential new medicines and in the clinical test phase in which their safety and efficacy are being confirmed. Prompted by the deregulation of 2008, logistics companies have been allowed to distribute on consignment investigational new drugs to medical institutions. Until such deregulation, pharmaceutical companies
had been distributing such drugs to medical institutions on their own. Taking advantage of this opportunity, the Company commenced logistics operations for investigational new drugs by leveraging the high-quality services it cultivated over many years of handling pharmaceuticals.
Amid the globalization of the pharmaceuticals business, Global clinical trial conducted simultaneously at medical institutions in various countries is increasing for the purpose of realizing the early launch of new drugs in two or more countries. The Company is coping with this trend in clinical trial overseas by forming partnerships with leading local logistics companies and will endeavor to further expand operations mainly in Asia.
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Overview of the Mitsubishi Logistics Group (As of March 31, 2011)
Mitsubishi Logistics Corporation
Logistics
Consolidated Subsidiaries (47 companies)
Subsidiaries and Af�liates Accounted for by the Equity Method (2 companies)
Real Estate
Tohoku Ryoso Transportation Co., Ltd.Sairyo Service Co., Ltd.Tokyo Dia Service Co., Ltd.Dia Systems CorporationRyoso Transportation Co., Ltd.Unitrans Ltd.Keihin Naigai Forwarding Co., Ltd.Touryo Kigyo Co., Ltd.Fuji Logistics Co., Ltd.*Tokyo Juki Transport Co., Ltd.*SII Logistics Inc.*Fuji Logistics Operations Co., Ltd.*Fuji Logistics Support Co., Ltd.*Kinko Service Co., Ltd.Chubu Trade Warehousing Co., Ltd.Meiryo Kigyo Co., Ltd.Ryoyo Transportation Co., Ltd.Kyokuryo Warehouse Co., Ltd.Hanryo Kigyo Co., Ltd.Nagato Lines Co., Ltd.Shinryo Koun Co., Ltd.Naigai Forwarding Co., Ltd.Kyushu Ryoso Transportation Co., Ltd.Monryo Transport CorporationHakuryo Koun Co., Ltd.Seiho Kaiun Kaisha., Ltd.Saryo Service Co., Ltd.Mitsubishi Logistics America CorporationMitsubishi Warehouse California CorporationMitsubishi Logistics Europe B.V.Fuji Logistics Europe B.V.*Shanghai Linghua Logistics Co., Ltd.Fuji Logistics (China) Co., Ltd.*Fuji Logistics (Dalian F.T.Z.) Co., Ltd.*Fuji Logistics (Shanghai) Co., Ltd.*Mitsubishi Logistics Hong Kong Ltd.Fuji Logistics (H.K.) Co., Ltd.*Mitsubishi Logistics Thailand Co., Ltd.P.T. Mitsubishi Logistics IndonesiaFuji Logistics Malaysia SDN.BHD.*
Dia Buil-Tech Co., Ltd.Yokohama Dia Building Management CorporationChubo Kaihatsu Co., Ltd.Nagoya Dia Buil-Tech Co., Ltd.Osaka Dia Buil-Tech Co., Ltd.Kobe Dia Service Co., Ltd.Kobe Dia Maintenance Co., Ltd.
Note: Effective from the 208th fiscal term, the year ended March 31, 2011, those companies marked with an asterisk (*) have been included as consolidated subsidiaries.
Nippon Container Terminals Co., Ltd.Kusatsu Soko Co., Ltd.
Major Businesses Logistics:Warehousing and Distribution: Storage of outsourced cargo in warehouses and bringing in/delivery thereof
to/from warehouses by cargo handlingTrucking: Transportation using trucksPort and harbor operations: Coastal and in-vessel cargo handling at ports and harborsInternational transportation: Handling of international freight deliveries (including marine freight
transportation in Japan)
Real Estate: Buying, selling, leasing, and management of real estate, as well as contracting of construction work, and design and supervision thereof
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Consolidated Balance Sheets
The accompanying notes are an integral part of these statements.
March 31, March 31,
ASSETS 2011 2010 2011(Millions of yen) (Thousands of U.S. dollars)
(Note 1)
CURRENT ASSETS:
Cash and deposits (Notes 2 and 3) ¥ 22,779 ¥ 26,289 $ 273,951
Marketable securities (Notes 2, 3 and 4) 3,000 3,000 36,079
Notes and accounts receivable (Notes 3 and 5) 32,339 22,104 388,924
Allowance for doubtful accounts (77) (99) (926)
32,262 22,005 387,998
Real estate held for sale 7,235 3,699 87,011
Deferred income taxes (Note 6) 2,189 1,953 26,326
Other 3,205 971 38,545
TOTAL CURRENT ASSETS 70,670 57,917 849,910
PROPERTY AND EQUIPMENT (Notes 9, 10 and 16):
Land 61,281 57,062 736,993
Buildings and structures 326,186 313,433 3,922,862
Machinery and equipment 30,383 27,208 365,400
Transportation equipment 8,013 7,305 96,368
Construction in progress 294 223 3,536
426,157 405,231 5,125,159
Less accumulated depreciation (249,015) (228,199) (2,994,768)
NET PROPERTY AND EQUIPMENT 177,142 177,032 2,130,391
INVESTMENTS AND OTHER ASSETS:
Investments in unconsolidated subsidiaries and affiliates 4,547 4,419 54,684
Investments in securities (Notes 3, 4 and 10) 75,716 85,131 910,595
Long-term loans receivable 851 872 10,235
Intangible assets 10,522 8,943 126,542
Goodwill 2,099 – 25,244
Deferred income taxes (Note 6) 3,201 1,789 38,497
Other 5,704 5,745 68,599
Allowance for doubtful accounts (26) (125) (313)
TOTAL OTHER ASSETS 102,614 106,774 1,234,083
¥ 350,426 ¥ 341,723 $ 4,214,384
011_0808001372309.indd 6 2011/09/13 9:53:28
7
The accompanying notes are an integral part of these statements.
LIABILITIES AND NET ASSETS March 31, March 31,
2011 2010 2011(Millions of yen) (Thousands of U.S. dollars)
(Note 1)
CURRENT LIABILITIES:
Short-term bank loans and current maturities of long-term
debt (Notes 10 and 11) ¥ 20,328 ¥ 14,016 $ 244,474
Notes and accounts payable (Notes 3 and 5) 25,832 18,300 310,667
Income taxes payable 2,380 2,457 28,623
Allowance for loss on disaster 601 – 7,228
Other (Notes 6, 10 and 11) 4,253 3,823 51,149
TOTAL CURRENT LIABILITIES 53,394 38,596 642,141
LONG-TERM LIABILITIES:
Long-term debt, less current maturities (Notes 10 and 11) 31,188 35,376 375,081
Deposits on long-term leases (Notes 3, 5 and 10) 29,363 30,687 353,133
Retirement benefits (Note 12) 17,005 13,732 204,510
Deferred income taxes (Note 6) 13,316 17,266 160,144
Other (Note 11) 353 155 4,246
TOTAL LONG-TERM LIABILITIES 91,225 97,216 1,097,114
TOTAL LIABILITIES 144,619 135,812 1,739,255
CONTINGENT LIABILITIES AND COMMITMENTS(Notes 15 and 16)
NET ASSETS
SHAREHOLDERS’ EQUITY:
Common stock
authorized – 440,000,000 shares,
issued – 175,921,478 shares, 22,394 22,394 269,321
Capital surplus 19,618 19,618 235,935
Retained earnings 139,322 134,421 1,675,550
Treasury stock (689) (654) (8,286)
TOTAL SHAREHOLDERS’ EQUITY 180,645 175,779 2,172,520
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
Net unrealized holding gains on securities 25,195 30,458 303,006
Foreign currency translation adjustments (1,978) (1,621) (23,788)
TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME 23,217 28,837 279,218
MINORITY INTERESTS 1,945 1,295 23,391
TOTAL NET ASSETS 205,807 205,911 2,475,129
¥ 350,426 ¥ 341,723 $ 4,214,384
011_0808001372309.indd 7 2011/09/13 9:53:29
8
Consolidated Statements Of Income
The accompanying notes are an integral part of these statements.
Year ended March 31, Year ended March 31,
2011 2010 2009 2011(Millions of yen) (Thousands of U.S. dollars)
(Note 1)
REVENUE ¥ 175,880 ¥ 148,347 ¥ 160,977 $ 2,115,213
COST OF SERVICES 155,832 131,768 143,851 1,874,107
Gross profit 20,048 16,579 17,126 241,106
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 7,884 6,298 5,804 94,816
Operating income 12,164 10,281 11,322 146,290
OTHER INCOME (EXPENSES):
Interest and dividend income 1,605 1,477 2,216 19,302
Interest expense (741) (840) (1,259) (8,911)
Gain on sale of marketable securities and investments
in securities12 120 26 144
Loss on revaluation of marketable securities and investments
in securities(437) (746) (1,506) (5,255)
Loss on disposal of property and equipment, net (945) (320) (651) (11,365)
Non-recurring depreciation – – (530) –
Impairment loss (Note 14) – (321) (393) –
Equity in earnings of unconsolidated subsidiaries and
affiliates229 140 134 2,754
Indemnity income of exiting facilities for lease (Note 13) – 40 1,058 –
Loss on earthquake disaster (681) – – (8,190)
Other, net 233 440 248 2,802
(725) (10) (657) (8,719)
Income before income taxes and minority interests 11,439 10,271 10,665 137,571
INCOME TAXES (Note 6)
Current 4,744 4,746 5,155 57,054
Deferred (354) (552) (990) (4,257)
4,390 4,194 4,165 52,797
Income before minority interests 7,049 6,077 6,500 84,774
MINORITY INTERESTS IN LOSSES (EARNINGS) OF
CONSOLIDATED SUBSIDIARIES (76) 29 (35) (914)
NET INCOME ¥ 6,973 ¥ 6,106 ¥ 6,465 $ 83,860
AMOUNTS PER SHARE: Yen U.S. dollars (Note 1)
Net income ¥ 39.78 ¥ 34.82 ¥ 36.87 $ 0.48
Diluted net income ¥ – ¥ – ¥ – $ –
Cash dividends applicable to the year ¥ 12.00 ¥ 12.00 ¥ 12.00 $ 0.14
011_0808001372309.indd 8 2011/09/13 9:53:29
9
Year ended March 31, Year ended March 31,
2011 2010 2009 2011(Millions of yen) (Thousands of U.S. dollars)
(Note 1)
INCOME BEFORE MINORITY INTERESTS
OTHER COMPREHENSIVE INCOME: ¥ 7,049 ¥ – ¥ – $ 84,774
Valuation difference on available-for-sale securities (5,240) – – (63,019)
Foreign currency translation adjustments (372) – – (4,474)
Share of other comprehensive income of associates
accounted for using the equity method (16) – – (192)
Total other comprehensive income (Note 7) (5,628) – – (67,685)
COMPREHENSIVE INCOME (Note 7) ¥ 1,421 ¥ – ¥ – $ 17,089
Comprehensive income attributable to:
Comprehensive income attributable to owners of the parent ¥ 1,353 ¥ – ¥ – $ 16,271
Comprehensive income attributable to minority interests 68 – – 818
The accompanying notes are an integral part of these statements.
Consolidated Statements Of Comprehensive Income
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Consolidated Statements Of Changes In Net Assets
The accompanying notes are an integral part of these statements.
Common Stock
Shares AmountCapitalsurplus
Retainedearnings
Treasurystock
Net unrealizedholding gainson securities
Deferredlosses onhedges
Foreign currency
translationadjustments
Minorityinterests
(Thousands of shares)
(Millions of yen)
Balance at March 31, 2008 175,921 ¥22,394 ¥19,623 ¥125,101 ¥(595) ¥44,961 ¥ (81) ¥(1,119) ¥ 982Net income for the year – – – 6,465 – – – – –Cash dividends – – – (2,105) – – – – –Increase due to change in the number of consolidated subsidiaries – – – 256 – – – – –
Purchase of treasury stock – – – – (54) – – – –Sale of treasury stock – – (5) – 23 – – – –Adjustment from revaluation of available-for-sale securities – – – – – (28,356) – – –
Adjustment from revaluation of derivatives – – – – – – 65 – –
Adjustment from translation of foreign currency financial statements – – – – – – – (551) –
Decrease in minority interests – – – – – – – – (71)Balance at March 31, 2009 175,921 ¥22,394 ¥19,618 ¥129,717 ¥(626) ¥16,605 ¥ (16) ¥(1,670) ¥ 911Net income for the year – – – 6,106 – – – – –Cash dividends – – – (2,105) – – – – –Increase due to change in the number of consolidated subsidiaries – – – 703 – – – – –
Purchase of treasury stock – – – – (29) – – – –Sale of treasury stock – – (0) – 1 – – – –Adjustment from revaluation of available-for-sale securities – – – – – 13,853 – – –
Adjustment from revaluation of derivatives – – – – – – 16 – –
Adjustment from translation of foreign currency financial statements – – – – – – – 49 –
Increase in minority interests – – – – – – – – 384Balance at March 31, 2010 175,921 ¥22,394 ¥19,618 ¥134,421 ¥(654) ¥30,458 ¥ – ¥(1,621) ¥1,295Net income for the year – – – 6,973 – – – – –Cash dividends – – – (2,105) – – – – –Increase due to mergers of unconsolidated subsidiary – – – 33 – – – – –
Purchase of treasury stock – – – – (36) – – – –Sale of treasury stock – – (0) – 1 – – – –Adjustment from revaluation of available-for-sale securities – – – – – (5,263) – – –
Adjustment from translation of foreign currency financial statements – – – – – – – (357) –
Increase in minority interests – – – – – – – – 650Balance at March 31, 2011 175,921 ¥22,394 ¥19,618 ¥139,322 ¥(689) ¥25,195 ¥ – ¥(1,978) ¥1,945
CommonStock
Capitalsurplus
Retainedearnings
Treasurystock
Net unrealizedholding gainson securities
Deferredlosses onhedges
Foreign currency
translationadjustments
Minorityinterests
Balance at March 31, 2010 $269,321 $235,935 $1,616,609 $(7,865) $366,301 $ – $(19,495) $15,574Net income for the year – – 83,860 – – – – –Cash dividends – – (25,316) – – – – –Increase due to mergers of unconsolidated subsidiary – – 397 – – – – –
Purchase of treasury stock – – – (433) – – – –Sale of treasury stock – (0) – 12 – – – –Adjustment from revaluation of available-for-sale securities – – – – (63,295) – – –
Adjustment from translation of foreign currency financial statements – – – – – – (4,293) –
Increase in minority interests – – – – – – – 7,817Balance at March 31, 2011 $269,321 $235,935 $1,675,550 $(8,286) $303,006 $ – $(23,788) $23,391
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Consolidated Statements Of Cash Flows
The accompanying notes are an integral part of these statements.
Year ended March 31, Year ended March 31,
2011 2010 2009 2011(Millions of yen) (Thousands of U.S. dollars)
(Note 1)
CASH FLOWS FROM OPERATING ACTIVITIES:
Income before income taxes and minority interests ¥ 11,439 ¥ 10,271 ¥ 10,665 $ 137,571
Depreciation and amortization 13,654 12,091 11,219 164,209
Non-recurring depreciation – – 530 –
Impairment loss – 321 393 –
Decrease in retirement benefits (851) (29) (402) (10,235)
Loss on revaluation of marketable securities and
investments in securities437 746 1,506 5,255
Gain on sales of marketable securities and
investments in securities(12) (106) (26) (144)
Losses on disposal of property and equipment 252 135 252 3,031
Equity in earnings of unconsolidated subsidiaries
and affiliates(229) (140) (134) (2,754)
Interest and dividend income (1,605) (1,477) (2,216) (19,302)
Interest expense 741 840 1,259 8,912
Decrease (increase) in notes and accounts receivable (844) (836) 4,404 (10,150)
Decrease (increase) in real estate held for sale (3,535) (2,915) 9 (42,514)
Increase (decrease) in notes and accounts payable 730 1,253 (3,872) 8,779
Decrease in deposits payable (1,484) (287) (2,036) (17,847)
Other, net 1,041 (35) (205) 12,519
Subtotal 19,734 19,832 21,346 237,330
Interest and dividend income received in cash 1,628 1,503 2,273 19,579
Interest expense paid in cash (722) (958) (1,133) (8,683)
Income taxes paid in cash (4,990) (4,492) (5,549) (60,012)
NET CASH PROVIDED BY OPERATING ACTIVITIES 15,650 15,885 16,937 188,214
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash investment to time deposits (912) (521) (489) (10,968)
Cash return from time deposits 644 289 1,029 7,745
Acquisition of property and equipment (5,936) (23,065) (24,689) (71,389)
Proceeds from sales of property and equipment 33 58 59 397
Acquisition of marketable securities and
investments in securities(148) (404) (672) (1,780)
Proceeds from sales of marketable securities and
investments in securities535 1,227 1,622 6,434
Acquisition of investments in subsidiaries resulting in
change in scope of consolidation (Note 2)(8,006) – – (96,284)
Payments for additional acquisition of subsidiaries’ shares (427) – – (5,135)
Other, net (20) 45 (17) (241)
NET CASH USED IN INVESTING ACTIVITIES (14,237) (22,371) (23,157) (171,221)
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The accompanying notes are an integral part of these statements.
Year ended March 31, Year ended March 31,
2011 2010 2009 2011(Millions of yen) (Thousands of U.S. dollars)
(Note 1)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term bank loans 7,510 1,985 2,055 90,319
Repayments of short-term bank loans (4,052) (2,061) (2,134) (48,731)
Proceeds from long-term debt 500 8,315 20 6,013
Repayments of long-term debt (5,798) (3,023) (2,834) (69,729)
Issue of bonds – – 14,000 –
Redemption of bonds – (10,000) – –
Dividends paid (2,104) (2,104) (2,104) (25,304)
Other, net (156) (83) (64) (1,876)
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES(4,100) (6,971) 8,939 (49,308)
Effect of exchange rate changes on cash and cash equivalents (162) 26 (189) (1,948)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS(2,849) (13,431) 2,530 (34,263)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR (Note 2)28,160 39,642 36,728 338,665
INCREASE IN CASH AND CASH EQUIVALENTS DUE TO:
Newly consolidated subsidiary at beginning of year – 1,949 384 –
Merger’s of unconsolidated subsidiary 38 – – 457
CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 2) ¥ 25,349 ¥ 28,160 ¥ 39,642 $ 304,859
Consolidated Statements Of Cash Flows
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BASIS OF PRESENTING CONSOLIDATED FINANCIAL
STATEMENTS
The accompanying consolidated financial statements of Mitsubishi Logistics Corporation (“the Company”) have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Law and its related accounting regulations, and in conformity with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different in certain respects as to application and disclosure requirements of International Financial Reporting Standards.
The accounts of overseas subsidiaries are based on their accounting records maintained in conformity with generally accepted accounting principles prevailing in the respective countries of domicile. The accompanying consolidated financial statements have been restructured and translated into English from the consolidated financial statements of the Company prepared in accordance with Japanese GAAP and filed with the appropriate Local Finance Bureau of the Ministry of Finance as required by the Japanese Financial Instruments and Exchange Law. Some supplementary information included in the statutory Japanese language consolidated financial statements, but not required for fair presentation, is not presented in the accompanying consolidated financial statements.
The translation of the Japanese yen amounts into U.S. dollars are included solely for the convenience of readers outside Japan, using the prevailing exchange rate at March 31, 2011, which was ¥83.15 to U.S. $1. The convenience translations should not be construed as representations that the Japanese yen amounts have been, could have been, or could in the future be, converted into U.S. dollars at this or any other rate of exchange.
CONSOLIDATION
In consolidation, all significant inter-company transactions, account balances and unrealized profits are eliminated. Differences between the acquisition costs and underlying net equities of investments in consolidated subsidiaries are recorded as goodwill in the consolidated balance sheets and amortized over 5 to 10 years on a straight-line basis. Any immaterial amounts are fully recognized as expenses as incurred. The effect on retained earnings and net income of unconsolidated subsidiaries and affiliates not accounted for on the equity method is immaterial to the consolidated financial statements and those investments are carried at cost, adjusted for any substantial and non-recoverable decline in value.
The number of consolidated subsidiaries and affiliates accounted for on the equity method at March 31, 2011, 2010 and 2009 was as follows:
March 31,
2011 2010 2009
Consolidated subsidiaries 47 36 25
Unconsolidated subsidiaries
and affiliates under the equity
method 2 2 9
Fuji Logistics Co., Ltd. and its 10 subsidiaries became consolidated subsidiaries due to the acquisition of stock in the current fiscal year.
CONSOLIDATED STATEMENTS OF CASH FLOWS
In preparing the consolidated statements of cash flows, cash on hand, readily-available deposits and short-term highly liquid investments with negligible risk of changes in value and maturities not exceeding six months at the time of purchase are considered to be cash and cash equivalents.
CONVERSION OF ASSETS AND LIABILITIES
DENOMINATED IN FOREIGN CURRENCIES
Receivables and payables denominated in foreign currencies are translated into Japanese yen at the year-end rates.
Gains or losses resulting from conversion are credited or charged to income as incurred.
DERIVATIVES AND HEDGE ACCOUNTING
Accounting standard for financial instruments requires companies to state derivative financial instruments at fair value and to recognize changes in the fair value as gains and losses unless derivative financial instruments are used for hedging purposes.
If derivative financial instruments are used as hedges and meet certain hedging criteria, the Company and its consolidated subsidiaries defer recognition of gains and losses resulting from changes in fair value of derivative financial instruments until the related losses and gains on the hedged items are recognized.
However, in cases where forward foreign exchange contracts are used as hedges and meet certain hedging criteria, forward foreign exchange contracts and hedged items are accounted for in the following manner,
(1) If a forward foreign exchange contact is executed to hedge an existing foreign currency receivable and payable, (i) the difference, if any, between the Japanese yen amount
of the hedged foreign currency receivable or payable translated using the spot rate at the inception date of the contract and the book value of the receivable or payable is recognized in the statement of income in the period which includes the inception date, and
(ii) the discount or premium on the contract (that is, the difference between the Japanese yen amount of the contract translated using the contracted forward rate and that translated using the spot rate at the inception
Notes To Consolidated Financial Statements
NOTE 1 – SUMMARY OF ACCOUNTING POLICIES
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date of the contract) is recognized over the term of the contract.
(2) If a forward foreign exchange contract is executed to hedge a future forecasted transaction denominated in foreign currency, the future transaction will be recorded using the contracted forward rate, and no gains or losses on the forward foreign exchange contract are recognized.Also, if interest rate swap contracts are used as hedges and
meet certain hedging criteria, the net amount to be paid or received under the interest rate swap contract is added to or deducted from the interest on the assets or liabilities for which the swap contract was executed.
The following summarizes hedging derivative financial instruments used by the Company and its consolidated subsidiaries and hedged items.
Hedging instruments: Foreign exchange contracts and interest rate swap contracts.
Hedged items: Foreign currency assets and liabilities and interest rates of bank loans.
The hedge effectiveness of foreign exchange contracts accounted for in the above manner and that of interest rate swaps meeting specific hedging criteria are not evaluated at the end of the period.
The Company and its consolidated subsidiaries use foreign exchange contracts and interest rate swap contracts for the purpose of managing the exposure to fluctuations in foreign currency exchange and interest rates of bank loans, respectively.
The Company and its consolidated subsidiaries don’t enter into derivatives for speculative purposes.
TRANSLATION OF FOREIGN CURRENCY STATEMENTS
The balance sheets of overseas subsidiaries are translated into Japanese yen at the rate of exchange at the balance sheet date of the subsidiaries, which is December 31, 2010, except for shareholders’ equity accounts, which are translated based on historical rates. The year-end rate of the subsidiaries is also used for translation of income, expenses and net income for the year. The resulting translation adjustments are presented as “Foreign currency translation adjustments” in the accompanying consolidated financial statements.
ALLOWANCE FOR DOUBTFUL ACCOUNTS
Notes and accounts receivable, including loans and other receivables, are valued by providing a reserve by applying a percentage based on the actual rate of bad debts incurred in the past plus an amount based on individually estimated uncollectible receivables.
SECURITIES
Available-for-sale securities (see explanation (d) below) with available fair market values are stated at fair market value. Unrealized gains and unrealized losses on these securities are reported, net of applicable income taxes, as a separate component of net assets. Realized gains and losses on sale of
such securities are computed using moving-average cost. Available-for-sale securities with no available fair value are stated at moving-average cost. Equity securities issued by unconsolidated subsidiaries and affiliates which are not consolidated or accounted for using the equity method are stated at moving-average cost.
Upon the accounting standard for financial instruments, all companies are required to examine the intent of holding each security and classify those securities as (a) securities held for trading purposes (hereafter, “trading securities”), (b) debt securities intended to be held to maturity (hereafter, “held-to-maturity debt securities”), (c) equity securities issued by subsidiaries and affiliates, and (d) for all other securities that are not classified in any of the above categories (“available-for-sale securities”).
The Company and its consolidated subsidiaries only hold those securities classified as equity securities issued by subsidiaries and affiliates, and available-for-sale securities.
If the market value of available-for-sale securities declines significantly, such securities are stated at fair market value and the difference between fair market value and the book value is recognized as loss in the period of the decline. For equity securities with no available fair market value, if the net asset value of the investee declines significantly, such securities are required to be written down to the net asset value with the corresponding losses in the period of decline. In these cases, such fair market value or the net asset value will be the book value of the securities at the beginning of the next year.
REAL ESTATE HELD FOR SALE
Real estate held for sale is stated at cost determined using the specific identification cost method. In case that the net selling value falls below the acquisition cost at the end of the period, real estate held for sale is carried at the net selling value on the balance sheet.
INCOME TAXES
Income taxes consist of corporation, enterprise and inhabitants taxes. The provision for income taxes is computed based on the pretax income of the Company and each of its consolidated subsidiaries with certain adjustments required for consolidated and tax purposes. The asset and liability approach is used to recognize deferred tax assets and liabilities for loss carryforwards and the expected future tax consequences of temporary differences between the book value and the tax bases of assets and liabilities. Valuation allowances are recorded to reduce deferred tax assets based on the assessment of the realizability of the tax benefits.
PROPERTY AND EQUIPMENT, DEPRECIATION
Property and equipment are stated at cost. Depreciation of depreciable assets, except for warehouse facilities (buildings) and leased commercial facilities (buildings), is computed on a declining- balance method over the estimated useful lives based
Notes To Consolidated Financial Statements
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on the Corporate Income Tax Law in Japan. Depreciation of warehouse facilities (buildings) is computed on a straight-line method over the estimated useful lives based on the Corporate Income Tax Law in Japan. Depreciation of leased commercial facilities (buildings) is computed on a straight-line method over the economic useful lives of the assets (20-year period is considered to be a standard economic useful life, however it varies depending on the contract terms etc.).
The cost and accumulated depreciation applicable to assets retired or otherwise disposed of are eliminated from the related accounts and the gains or losses on disposal is credited or charged to income. Expenditures for new facilities and those which substantially increase the useful lives of existing property and equipment are capitalized. Maintenance, repair and minor renewals are charged to expense as incurred.
Effective April 1, 2008 the Company and its consolidated domestic subsidiaries have depreciated warehouse facilities (buildings) by a straight-line method over the estimated useful lives based on the Corporate Income Tax Law in Japan.
The Company and its consolidated domestic subsidiaries had applied a declining-balance method over the estimated useful lives based on the Corporate Income Tax Law in Japan for depreciation of warehouse facilities (buildings). However, there is very little relation between the profit performance and the increase of elapsed years in warehouse facilities (buildings). Thus, the Company and its consolidated domestic subsidiaries changed, on the occasion of starting up four new large-size logistics facilities, its depreciation method of warehouse facilities (buildings) to the straight-line method over the estimated useful lives based on the Corporate Income Tax Law in Japan. This change was made for the purpose of improving the matching of revenue and costs by evening out the depreciation expenses.
In addition, the Company and its consolidated domestic subsidiaries depreciate the book value of warehouse facilities (buildings) that passed over the useful lives as of April 1, 2008 to nil, as non-recurring depreciation presented in the statements of income.
Because of the change, depreciation expenses included in COST OF SERVICES decreased by ¥491 million and recorded ¥530 million as non-recurring depreciation. As a result, operating income is increased by ¥491 million and income before income taxes and minority interests is decreased by ¥39 million for the year ended March 31, 2009 as compared with the previous method. The effect on this change to segment information is mentioned in Note 19.
INTANGIBLE ASSETS
Intangible assets are amortized on a straight-line method.The capitalized computer software costs for internal use
are amortized on the straight-line method over the estimated useful lives (five years).
FINANCE LEASES
Property and equipment capitalized under finance lease, except for the finance leases which do not transfer ownership of the leased property to the lessee, are arrangements depreciated over the estimated useful lives or the lease term of the respective assets.
As permitted, finance leases which commenced prior to April 1, 2008 and have been accounted for as operating leases, continue to be accounted for as operating leases with disclosure of certain “as if capitalized” information.
Prior to April 1, 2008, the Company and its consolidated domestic subsidiaries accounted for finance leases which do not transfer ownership of the leased property to the lessee as operating leases with disclosure of certain “as if capitalized” information in the notes to the consolidated financial statements.
On March 30, 2007, the Accounting Standards Board of Japan issued Statement No. 13, “Accounting Standard for Lease Transactions” and Guidance No. 16 “Guidance on Accounting Standard for Lease Transactions”. The new accounting standards require that all finance lease transactions be treated as capital leases.
Effective April 1, 2008, the Company and its consolidated domestic subsidiaries adopted the new accounting standards for finance leases commencing after March 31, 2008 and capitalized assets used under such leases, except for certain immaterial or short-term finance leases, which are accounted for as operating leases. There was no effect on this change to operating income and income before income taxes and minority interests for the year ended March 31, 2009.
ALLOWANCE FOR BONUSES FOR DIRECTORS
The Company provides allowance for bonuses for directors based on the estimated amounts of payment.
ALLOWANCE FOR LOSS ON DISASTER
The Company and its consolidated subsidiaries provide the allowance for loss on disaster for the restoration of fixed assets damaged by the Great East Japan Earthquake.
RETIREMENT BENEFITS AND PENSION PLAN
(1) Employees’ severance and retirement benefits
The Company and its consolidated domestic subsidiaries provide two types of post-employment benefit plans, unfunded lump-sum payment plans and funded contributory defined benefit pension plans, under which employees severing their connection with the Company and its consolidated subsidiaries on retirement are entitled to lump-sum retirement benefit payments or pension payments based on pay rates, length of service and certain other factors. And the Company and its consolidated domestic subsidiaries provide defined contribution pension plan.
The Company and its consolidated subsidiaries provided allowance for employees’ severance and retirement benefits based on the estimated amounts of projected benefit obligation and the fair value of the plan assets at year-end.
Actuarial gains and losses are recognized in statement of
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income using the straight-line method over 5-16 years, beginning the following fiscal year of recognition. Prior services costs are recognized in statement of income using the straight-line method over 5 years.
Effective from the fiscal year ended March 31, 2010, the Company and its consolidated domestic subsidiaries adopted the “Partial Amendments to Accounting Standard for Retirement Benefits (Part 3)” (Accounting Standards Board of Japan (“ASBJ”) Statement No.19 issued on July 31, 2008). The new accounting standard requires domestic companies to use the rate of return on long-term government or gilt-edged bonds as of the end of the fiscal year for calculating the projected benefit obligation of a defined-benefit plan. Previously, domestic companies were allowed to use a discount rate determined by taking into consideration fluctuations in the yield of long-term government or gilt-edged bonds over a certain period. This change had no impact on the consolidated financial statements for the year ended March 31, 2010.
The Company changed the tax-qualified pension plans and a part of lump-sum payment plans to defined benefit pension plans and defined contribution pension plans at October 1, 2009. The Company adopts “Accounting for Transfer between Retirement Benefit Plans” (Financial Accounting Standards Implementation Guidance No.1 issued on January 31, 2002).
Because of the change, for the year ended March 31, 2010, labor cost included in COST OF SERVICES decreased by ¥70 million and SELLING, GENERAL AND ADMINISTRATIVE EXPENSES decreased by ¥19 million. As a result, operating income and the income before income taxes and minority interests increased by ¥89 million.
The effect on this change to segment information is mentioned in Note 19.
(2) Officers’ severance and retirement benefits
Officers’ (directors and corporate statutory auditors) severing their connection with certain consolidated domestic subsidiaries on retirement are entitled to lump-sum retirement benefit payments based on pay rates, length of services and certain other factors.
Retirement benefits to officers of certain consolidated domestic subsidiaries are provided based on the Company’s rules which have been approved by the Board of Directors. Such obligations are not funded.
NET ASSETS
The Japanese Corporate Law (“the Law”) became effective on May 1, 2006, replacing the Japanese Commercial Code (“the Code”). The Law is generally applicable to events and transactions occurring after April 30, 2006 and for fiscal years ending after that date.
Under Japanese laws and regulations, the entire amount paid for new shares is required to be designated as common stock. However, a company may, by a resolution of the Board of Directors, designate an amount not exceeding one-half of the price of the new shares as additional paid-in capital, which is
included in capital surplus in the accompanying consolidated balance sheets.
Under the Law, in cases where a dividend distribution of surplus is made, the smaller of an amount equal to 10% of the dividend or the excess, if any, of 25% of common stock over the total of additional paid-in capital and legal earnings reserve must be set aside as additional paid-in capital or legal earnings reserve. Legal earnings reserve is included in retained earnings in the accompanying consolidated balance sheets.
Under the Code, companies were required to set aside an amount equal to at least 10% of the aggregate amount of cash dividends and other cash appropriations as legal earnings reserve until the total of legal earnings reserve and additional paid-in capital equaled 25% of common stock.
Under the Code, legal earnings reserve and additional paid-in capital could be used to eliminate or reduce a deficit by a resolution of the shareholders’ meeting or could be capitalized by a resolution of the Board of Directors. Under the Law, both of these appropriations generally require a resolution of the shareholders’ meeting.
Additional paid-in capital and legal earnings reserve may not be distributed as dividends. Under the Code, however, on condition that the total amount of legal earnings reserve and additional paid-in capital remained equal to or exceeded 25% of common stock, they were available for distribution by resolution of the shareholders’ meeting. Under the Law, all additional paid-in capital and all legal earnings reserve may be transferred to other capital surplus and retained earnings, respectively, which are potentially available for dividends.
The maximum amount that the Company can distribute as dividends is calculated based on the non-consolidated financial statements of the Company in accordance with Japanese laws and regulations.
The appropriations are not accrued in the consolidated financial statements for the corresponding period, but are recorded in the subsequent accounting period after shareholders’ approval has been obtained.
Retained earnings at March 31, 2011 include amounts representing year-end cash dividends of ¥1,052 million ($12,652 thousand), ¥6.0 ($0.07) per share, which were approved at the shareholders’ meeting held on June 29, 2011.
PER SHARE INFORMATION
Net income per share is computed based upon the weighted average number of shares outstanding during each fiscal year. Diluted net income per share assumes that outstanding convertible bonds were converted into common stock at beginning of the period at the current conversion price.
Cash dividends per share have been presented on an accrual basis and include dividends to be approved after the balance sheet date, but applicable to the year then ended.
Information on diluted net income per share for the years ended March 31, 2011, 2010 and 2009 are not disclosed as no shares which dilute net income per share are outstanding for the years ended March 31, 2011, 2010 and 2009.
Notes To Consolidated Financial Statements
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CHANGES IN THE ACCOUNTING POLICIES
Adoption of accounting standard for asset retirement obligations
Effective from the fiscal year ended March 31, 2011, the Company and its consolidated domestic subsidiaries adopted the “Accounting Standard for Asset Retirement Obligations” (Accounting Standards Board of Japan (“ASBJ”) Statement No.18 issued on March 31, 2008) and the “Guidance on Accounting Standard for Asset Retirement Obligations” (ASBJ Guidance No.21 issued on March 31, 2008).
This change has a little impact on the consolidated statement of income.
Adoption of accounting standard for business combinations
Effective from the fiscal year ended March 31,2011, the Company and its consolidated domestic subsidiaries adopted the “Accounting Standard for Business Combinations” (Accounting Standards Board of Japan (“ASBJ”) Statement No.21 issued on December 26, 2008) , the “Accounting Standard for Consolidated Financial Statements” (Accounting Standards Board of Japan (“ASBJ”) Statement No.22 issued on December 26, 2008) , the “Accounting Standard for Equity Method”
(Accounting Standards Board of Japan(“ASBJ”) Statement No.16 issued on December 26, 2008) and the “Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures” (ASBJ Guidance No.10 issued on December 26, 2008).
RECLASSIFICATION
Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications had no impact on previously reported results of operations or retained earnings.
ADDITIONAL INFORMATION
Effective from the fiscal year ended March 31, 2011, the Company has applied “Accounting Standard for Presentation of Comprehensive Income” (Accounting Standards Board of Japan (“ASBJ”) Statement No.25, issued on June 30, 2010).
Reconciliation of cash and deposits in the consolidated balance sheets and cash and cash equivalents in the consolidated statements of cash flows as of March 31, 2011 and 2010 were as follows:
March 31, March 31,
2011 2010 2011(Millions of yen) (Thousands of U.S. dollars)
Cash and deposits ¥22,779 ¥26,289 $273,951
Add money funds invested in bonds and domestic certificates
of deposits 3,000 3,000 36,079
Less time deposits with maturities exceeding six months (1,398) (1,129) (16,813)
Current assets other (money deposited) 968 – 11,642
Cash and cash equivalents ¥25,349 ¥28,160 $304,859
NOTE 2 – CASH AND CASH EQUIVALENTS
For the year ended March 31, 2011, Fuji Logistics Co., Ltd. and its 10 consolidated subsidiaries were acquired. Assets and liabilities of these companies at the time of consolidation, acquisition cost and the expense (net amount) required for the acquisition of the subsidiaries were as follows:
Amount
(Millions of yen) (Thousands of U.S. dollars)
Current assets ¥12,455 $149,789
Fixed assets 11,971 143,969
Goodwill 2,111 25,388
Current liabilities (9,895) (119,002)
Long-term liabilities (5,424) (65,231)
Minority interests (937) (11,269)
Acquisition cost 10,281 123,644
Cash and cash equivalents of the acquired companies (2,275) (27,360)
Expense required for acquisition ¥ 8,006 $ 96,284
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1. CONDITIONS OF FINANCIAL INSTRUMENTS(1) Policy for using financial instruments
The Company and its consolidated subsidiaries raises the necessary funds in accordance with the performance plans and the capital investment plans mainly by bank loans or issuance of bonds. Temporary cash surplus, if any, are invested in highly-secured deposits, public bonds and corporate bonds. Derivatives are used, not for speculative purposes, but for actual demand.
(2) Details of financial instruments used, risks, and risk managementNotes and accounts receivable are exposed to credit risk of customers. Against the credit risk, the Company and its consolidated subsidiaries performs due date and balance controls for each customer in accordance with internal customer credit management rules and regularly screens customers’ credit status.
Stocks as investments in securities are subject to risk of changes in market price. They are mainly stocks issued by companies to have business relations. The Company and its consolidated subsidiaries grasp the fair values of the stocks at regular intervals, and the fair values are reported to each board of directors meeting.
The account derived from operating expenses, notes and accounts payable, is all settled within a year, and subject to risk of liquidity. The Company and its consolidated subsidiaries hedge that risk by timely reconsideration of monthly financial plans.
Short-term bank loans are mainly funds raising related to trade, otherwise long-term debts are mainly funds raising related to investments, in property and equipment. Because long-term debts with floating interest rates are subject to risk of fluctuation of these rates, it is probable that the Company utilizes interest rate swap contracts as hedging instruments about each loan contract to attempt to fix interest rates. (The Company does not utilize interest rate swap contracts now because the importance of amount of loans with floating interest rates is minor.)
It is prescribed that approval by the manager of the Company’s finance section is necessary for execution and management of such a derivative transaction in accordance with the Company’s policy about transaction authority, limit on the amount and the others.
(3) Supplemental information on fair valuesFair values of financial instruments comprise values determined based on market prices and values determined reasonably when there is no market price. Since variable factors are incorporated in computing the relevant fair values, such fair values may vary depending on the different assumptions.
2. FAIR VALUES OF FINANCIAL INSTRUMENTSBook value on the consolidated balance sheets, fair values, and differences as of March 31, 2011, were as follows. Moreover, items for which it is extremely difficult to determine fair values are not in the following table (see(Note 2)).
March 31, 2011 March 31, 2011
Bookvalue Fair value Difference
Bookvalue Fair value Difference
(Millions of yen) (Thousands of U.S. dollars)Assets(1) Cash and deposits ¥ 22,779 ¥ 22,779 ¥ – $ 273,951 $ 273,951 $ –
(2) Notes and accounts receivable 30,107 30,107 – 362,081 362,081 –
(3) Marketable securities 3,000 3,000 – 36,079 36,079 –
(4) Investment in securities (available-for-sale securities) 73,144 73,144 – 879,663 879,663 –
¥ 129,030 ¥ 129,030 ¥ – $ 1,551,774 $ 1,551,774 $ –
Liabilities
(1) Notes and accounts payable ¥ 19,374 ¥ 19,374 ¥ – $ 233,001 $ 233,001 $ –
(2) Short-term bank loans 14,368 14,368 – 172,796 172,796 –
(3) Bonds *1 24,000 24,984 984 288,635 300,469 11,834
(4) Long-term debt *2 13,149 13,297 148 158,136 159,916 1,780
(5) Deposits on long-term leases 6,174 5,940 (234) 74,251 71,437 (2,814)
(6) Derivatives – – – – – –
¥ 77,065 ¥ 77,963 ¥ 898 $ 926,819 $ 937,619 $ 10,800
*1 This includes long-term bonds payable due within one year.*2 This includes long-term loans payable due within one year.
NOTE 3 – FINANCIAL INSTRUMENTS
Notes To Consolidated Financial Statements
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(Note 1) Calculation method of fair values of financial instruments and the matter concerning securitiesAssets:(1) Cash and deposits (2) Notes and accounts receivable (3) Marketable securities
The relevant book values are used because the settlement term of the above item are short and their fair values are almost the same as their book values.
(4) Investment in securities (available-for-sale securities)The fair values of stocks are determined using the quoted price at the stock exchange and the fair values of bonds are
determined using the market price. The information of securities categorized by holding purposes is described a NOTE 4 “SECURITIES”.
Liabilities:(1) Notes and accounts payable (2) Short-term bank loans
The relevant book values are used because the settlement term of the above item are short and their fair values are almost the same as their book values.
(3) BondsThe fair values of bonds issued by the Company are calculated by the market price.
(4) Long-term debtLong-term debt with a floating interest rate has condition that the interest rate is reformed every certain period. So the
relevant book values are used because the fair values are almost the same as the book values. And long-term debt with a fixed interest rate is calculated by the present value of the amount of principal and interest money discounted using the current borrowing rate for similar debt of a comparable maturity.
Long-term loans payable with floating interest rates are subject to special treatment of interest rate swaps (See NOTE 17), and their fair values are calculated by discounting the total amount of principal and interest that have been recorded together with the said interest rate swap by interest rates that would reasonable be estimated to apply to a similar loan.
(5) Deposits on long-term leasesDeposits on long-term leases are calculated by the present values of future cash flows discounted using risk free rate.
(6) DerivativesThe information is described at NOTE 17 “DERIVATIVE TRANSACTIONS”
(Note 2) Non-listed stocks and others (book value is ¥2,634 million ($31,678 thousand)) are not included in “Assets (4) Investment in securities (available-for-sale securities)”, because they have no market price, they cannot estimate future cash flow, and it is extremely difficult to measure the fair values. Moreover, the Deposits on long-term leases admitted that it is extremely difficult to measure the fair values because it cannot estimate the future cash flow (book value is ¥23,189 million ($278,882 thousand)) are not included in “Liabilities (5) Deposits on long-term leases” . Investments in unconsolidated subsidiaries and affiliates (book value is ¥4,471 million ($53,770 thousand)) are not included in above list.
(Note 3) The redemption schedule for money claim and securities with contractual maturities.
Millions of yen
One year or less
One to five years
Five to ten years
Over ten years
Cash and deposits ¥22,779 ¥ – ¥ – ¥ –
Notes and accounts receivable 30,107 – – –
Marketable securities (Certificate of deposits) 3,000 – – –
Investment in securitiesAvailable-for sale securities with maturities (public bonds) 14 77 – –
¥55,900 ¥77 ¥ – ¥ –
Thousands of U.S. dollars
One year or less
One to five years
Five to ten years
Over ten years
Cash and deposits $273,951 $ – $ – $ –
Notes and accounts receivable 362,081 – – –
Marketable securities (Certificate of deposits) 36,079 – – –
Investment in securitiesAvailable-for sale securities with maturities (public bonds) 168 926 – –
$672,279 $926 $ – $ –
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(Note 4) Repayment schedule of bonds,long-term debts, and deposits on long-term leases.
Millions of yen
One year or less
One to two years
Two to three years
Three to four years
Four to five years
Over five years
Bonds ¥5,000 ¥ – ¥ – ¥5,000 ¥7,000 ¥7,000
Long-term debt 961 4,122 4,721 1,011 386 1,948
Deposits on long-term leases – 5,174 – – – 1,000
¥5,961 ¥9,296 ¥4,721 ¥6,011 ¥7,386 ¥9,948
Thousands of U.S. dollars
One year or less
One to two years
Two to three years
Three to four years
Four to five years
Over five years
Bonds $60,132 $ – $ – $60,132 $84,185 $ 84,185
Long-term debt 11,557 49,573 56,777 12,159 4,642 23,428
Deposits on long-term leases – 62,225 – – – 12,026
$71,689 $111,798 $56,777 $72,291 $88,827 $119,639
Book value on the consolidated balance sheets, fair values, and differences as of March 31, 2010, were as follows. Moreover, items for which it is extremely difficult to determine fair values are not in the following table (see (Note 2)).
March 31, 2010
Bookvalue Fair value Difference
(Millions of yen)Assets(1) Cash and deposits ¥ 26,289 ¥ 26,289 ¥ –
(2) Notes and accounts receivable 20,245 20,245 –
(3) Marketable securities 3,000 3,000 –
(4) Investment in securities (available-for-sale securities) 82,484 82,484 –
¥ 132,018 ¥ 132,018 ¥ –
Liabilities
(1) Notes and accounts payable ¥ 14,112 ¥ 14,112 ¥ –
(2) Short-term bank loans 8,893 8,893 –
(3) Bonds 24,000 24,827 827
(4) Long-term debt*1 16,499 16,526 27
(5) Deposits on long-term leases 6,450 6,166 (284)
¥ 69,954 ¥ 70,524 ¥ 570
*1 This includes long-term loans payable due within one year.
Notes To Consolidated Financial Statements
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(Note 1) Calculation method of fair values of financial instruments and the matter concerning securitiesAssets:(1) Cash and deposits (2) Notes and accounts receivable (3) Marketable securities
The relevant book values are used because the settlement term of the above item are short and their fair values are almost the same as their book values.
(4) Investment in securities (available-for-sale securities)The fair values of stocks are determined using the quoted price at the stock exchange and the fair values of bonds are
determined using the market price. The information of securities categorized by holding purposes is described at NOTE 4 “SECURITIES”.
Liabilities:(1) Notes and accounts payable (2) Short-term bank loans
The relevant book values are used because the settlement term of the above item are short and their fair values are almost the same as their book values.
(3) BondsThe fair values of bonds issued by the Company are calculated by the market price.
(4) Long-term debtLong-term debt with a floating interest rate has condition that the interest rate is reformed every certain period. So the
relevant book values are used because the fair values are almost the same as the book values. And long-term debt with a fixed interest rate is calculated by the present value of the amount of principal and interest money discounted using the current borrowing rate for similar debt of a comparable maturity.
(5) Deposits on long-term leasesDeposits on long-term leases are calculated by the present values of future cash flows discounted using risk free rate.
(Note 2) Non-listed stocks and others (book value is ¥2,743 million) are not included in “Assets (4) Investment in securities (available-for-sale securities)”, because they have no market price, they cannot estimate future cash flow, and it is extremely difficult to measure the fair values. Moreover, the Deposits on long-term leases admitted that it is extremely difficult to measure the fair values because it cannot estimate the future cash flow (book value is ¥24,237 million) are not included in “Liabilities (5) Deposits on long-term leases”.Investments in unconsolidated subsidiaries and affiliates (book value is ¥4,284 million) are not included in above list.
(Note 3) The redemption schedule for money claim and securities with contractual maturities.
Millions of yen
One year or less
One to five years
Five to ten years
Over ten years
Cash and deposits ¥26,289 ¥ – ¥ – ¥–
Notes and accounts receivable 20,245 – – –
Marketable securities (Certificate of deposits) 3,000 – – –
Investment in securitiesAvailable-for sale securities with maturities (public bonds) 4 586 18 –
¥49,538 ¥586 ¥18 ¥–
(Note 4)Repayment schedule of bonds, long-term debts, and deposits on long-term leases.
Millions of yen
One year or less
One to two years
Two to three years
Three to four years
Four to five years
Over five years
Bonds ¥ – ¥5,000 ¥ – ¥ – ¥5,000 ¥14,000
Long-term debt 5,123 554 3,636 4,234 891 2,061
Deposits on long-term leases – 276 5,174 – – 1,000
¥5,123 ¥5,830 ¥8,810 ¥4,234 ¥5,891 ¥17,061
(Additional information)Effective from the fiscal year ended March 31, 2010, the Company and its consolidated subsidiaries adopted the revised Accounting Standard, “Accounting Standard for Financial Instruments” (Accounting Standards Board of Japan (“ASBJ”) Statement No.10 revised on March 10, 2008) and the “Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No.19 revised on March 10, 2008).
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Notes To Consolidated Financial Statements
At March 31, 2011, acquisition costs, book values stated at fair values and net unrealized holding gains (losses) of available-for-sale securities were as follows:
March 31, 2011 March 31, 2011
Bookvalue
Acquisition cost
Unrealized holding gains
(losses)Bookvalue
Acquisition cost
Unrealized holding gains
(losses)(Millions of yen) (Thousands of U.S. dollars)
Securities with book values exceeding
acquisition costs:
Stocks ¥67,588 ¥24,102 ¥43,486 $812,845 $289,862 $522,983
Bonds 91 88 3 1,094 1,058 36
Other – – – – – –
67,679 24,190 43,489 813,939 290,920 523,019
Other securities:
Stocks 5,465 6,420 (955) 65,724 77,210 (11,486)
Bonds – – – – – –
Other – – – – – –
5,465 6,420 (955) 65,724 77,210 (11,486)
¥73,144 ¥30,610 ¥42,534 $879,663 $368,130 $511,533
Non-listed stocks and others (book value is ¥2,634 million ($31,678 thousand)) were not included in the above list. Because they are admitted that it is extremely difficult to estimate for fair values (there are no market price and cannot estimate the future cash flow).
In the year ended March 31, 2011, the amount of sale, related gains and related losses of available-for-sale securities were as follows:
March 31, 2011 March 31, 2011
The amount of sale
Relatedgains
Related losses
The amount of sale
Relatedgains
Related losses
(Millions of yen) (Thousands of U.S. dollars)
Stocks ¥ 21 ¥ 2 ¥0 $ 252 $ 24 $0
Bonds 514 10 – 6,182 120 –
Other – – – – – –
¥ 535 ¥12 ¥0 $6,434 $144 $0
Total write-down of available-for-sale securities with available fair values amounted to ¥234 million ($2,814 thousand) in the year ended March 31, 2011.
If the fair values of available-for-sale securities declines over 30% compared with its acquisition costs, the decline is recognized as significant. In this case, the Company and its consolidated subsidiaries write-down the book value of the securities considering possibilities for recovery of the fair value.
NOTE 4 – SECURITIES
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At March 31, 2010, acquisition costs, book values stated at fair values and net unrealized holding gains (losses) of available-for-sale securities were as follows:
March 31, 2010
Bookvalue
Acquisitioncost
Unrealized holding gains
(losses)(Millions of yen)
Securities with book values exceeding acquisition costs:
Stocks ¥77,963 ¥25,972 ¥51,991
Bonds 608 593 15
Other – – –
78,571 26,565 52,006
Other securities:
Stocks 3,913 4,522 (609)
Bonds – – –
Other – – –
3,913 4,522 (609)
¥82,484 ¥31,087 ¥51,397
Non-listed stocks and others (book value is ¥2,743 million) were not included in the above list. Because they are admitted that it is extremely difficult to estimate for fair values (there are no market price and cannot estimate the future cash flow).
In the year ended March 31, 2010, the amount of sale, related gains and related losses of available-for-sale securities were as follows:
March 31, 2010
The amountof sale
Relatedgains
Relatedlosses
(Millions of yen)
Stocks ¥ 148 ¥120 ¥ –
Bonds 1,007 – –
Other 73 – 14
¥1,228 ¥120 ¥14
Total write-down of available-for-sale securities with available fair values amounted to ¥760 million in the year ended March 31, 2010.
If the fair values of available-for-sale securities declines over 30% compared with its acquisition costs, the decline is recognized as significant. In this case, the Company and its consolidated subsidiaries write- down the book value of the securities considering possibilities for recovery of the fair value.
NOTE 5 – RECEIVABLES FROM AND PAYABLES TO UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES
Significant receivables from and payables to unconsolidated subsidiaries and affiliates at March 31, 2011 and 2010 were as
follows:
March 31, March 31,
2011 2010 2011(Millions of yen) (Thousands of U.S. dollars)
Notes and accounts receivable ¥ 197 ¥ 205 $ 2,369
Notes and accounts payable ¥ 946 ¥1,016 $11,377
Deposits on long-term leases ¥1,341 ¥1,618 $16,127
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NOTE 6 – INCOME TAXES
The Company and its domestic consolidated subsidiaries are subject to a number of different income taxes which, in the aggregate, reflect a statutory tax rate of approximately 41% for the years ended March 31, 2011, 2010 and 2009, respectively.
Reconciliation from the statutory tax rate to the effective tax rate for the year ended March 31, 2011 was as follows:
March 31, 2011
Statutory tax rate 40.7%
Entertainment expense etc.
not deductible for Japanese tax purposes1.3
Dividends etc.
not taxable for Japanese tax purposes(3.5)
Inhabitant taxes 0.9
Other (1.0)
Effective tax rate 38.4%
Information on reconciliation of the tax rates for the years ended March 31, 2010 and 2009 are not disclosed as difference between the statutory tax rate and the effective tax rate was less than 5% of the statutory tax rate for the years ended March 31, 2010 and 2009.
Significant components of the Company and its consolidated subsidiaries’ deferred income tax assets and liabilities as of March 31, 2011 and 2010 were as follows:
March 31, March 31,
2011 2010 2011(Millions of yen) (Thousands of U.S. dollars)
Deferred income tax assets:
Accrued enterprise tax ¥ 218 ¥ 207 $ 2,622
Loss on investments in securities 109 9 1,311
Allowance for doubtful accounts 31 66 373
Accrued employees’ bonuses 1,189 895 14,300
Retirement benefits 6,619 5,312 79,603
Depreciation 5,978 5,412 71,894
Impairment loss 3,491 3,533 41,984
Other 3,547 3,559 42,658
21,182 18,993 254,745
Valuation allowance (1,430) (1,425) (17,198)
Total deferred income tax assets 19,752 17,568 237,547
Deferred income tax liabilities:
Net unrealized holding gains on securities (17,294) (20,900) (207,986)
Reserves deductible for Japanese tax purposes (9,924) (10,021) (119,351)
Other (466) (180) (5,604)
Total deferred income tax liabilities (27,684) (31,101) (332,941)
Net deferred income tax liabilities ¥ (7,932) ¥ (13,533) $ (95,394)
Notes To Consolidated Financial Statements
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NOTE 7 – STATEMENTS OF COMPREHENSIVE INCOME
Comprehensive income for the year ended March 31, 2010 was as follows:
Amount(Millions of yen)
Comprehensive income attributable to owners of the parent ¥20,043
Comprehensive income attributable to minority interests 11
¥20,054
Other comprehensive income for the year ended March 31, 2010 was as follows:
Amount(Millions of yen)
Net unrealized holding gains on securities ¥13,881
Deferred losses on hedges 16
Foreign currency translation adjustments 72
Share of other comprehensive income of affiliates accounted for
using the equity method8
¥13,977
NOTE 8 – BUSINESS COMBINATIONS
For the year ended March 31, 2011
The Company acquired the 91.9% shares of Fuji Logistics Co., Ltd. on September 24, 2010. The details of this acquisition were as follows:1. Name of acquired company, description of its business, main reasons for undertaking the business combination, date and legal
structure of business combination, name of combined entity after business combination, ratio of acquired voting rights, and main basis behind the determination of the acquiring company(1) Name of acquired company and description of its business
Name of acquired company :Fuji Logistics Co., Ltd.Description of business :Logistics
(2) Main reasons for undertaking business combinationIn the Medium-term management plan carried out since April 2010, the Company set a first basic policy, “Respond to globalization by expanding domestic and overseas logistics businesses in tandem”.Fuji Logistics Co., Ltd. has established the stable base of customers with know-how of handling electric equipments as a logistics supplier affiliated with manufacturers, and has made efforts to increase outside sales ratio and expand business scope by focusing on 3PL service.
Through discussion with Fuji Logistics Co., Ltd., the Company confirmed that its basic mind about logistics businesses is consistent with Fuji logistics Co., Ltd., and concluded that the Company and Fuji Logistics Co., Ltd. have the highly complementary relationship by sharing domestic and foreign warehouses of both companies and using transportation function of both companies mutually.
By receiving Fuji Logistics Co., Ltd. as an important member of the Company’s group, the Company expects suitable synergy on revenue expansion and on cost reduction by increasing efficiency.
(3) Date of business combinationSeptember 24, 2010
(4) Legal structure of business combinationAcquisition of shares by cash
(5) Name of combined entity after business combinationFuji Logistics Co., Ltd.
(6) Ratio of acquired voting rights91.9%
(7) Main basis behind the determination of the acquiring companyThe Company acquired the shares of Fuji Logistics Co., Ltd. by cash
2. Period of operating result of the acquired company included in the consolidated financial statementsFrom October 1, 2010 to March 31, 2011
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3. Acquisition cost detail
Amount(Millions of yen) (Thousands of U.S. dollars)
Purchase price ¥10,042 $120,770
Other direct costs for the acquisition 239 2,874
Acquisition cost ¥10,281 $123,644
4. Amount of goodwill, cause of goodwill, amortization method, amortization period(1) Amount of goodwill: ¥2,111 million ($25,388 thousand)(2) Cause of goodwill: As the acquisition cost exceeded the net amount allocated to acquired assets and assumed liabilities,
the difference has been posted as goodwill.(3) Amortization method and amortization period
Straight-line method for 10 years
5. Total assets acquired and liabilities assumed on the date of business combination and the main components thereof
Amount(Millions of yen) (Thousands of U.S. dollars)
Current assets ¥12,455 $149,789
Fixed assets 11,971 143,969
Total assets ¥24,426 $293,758
Amount(Millions of yen) (Thousands of U.S. dollars)
Current liabilities ¥ 9,895 $119,002
Long-term liabilities 5,424 65,231
Total liabilities ¥15,319 $184,233
6. Estimated impact on the consolidated statements of income for the year ended March 31, 2011, assuming that the business combination was completed on April 1, 2010, was as follows:
Amount(Millions of yen) (Thousands of U.S. dollars)
Revenue ¥17,728 $213,205
Net income ¥ 77 $ 926
These amounts were calculated as the difference between information on revenue and income calculated on the assumption that the business combination was completed on April 1, 2010 and information on revenue and income contained in the consolidated statements of income of the acquiring company. The above estimated amounts of impact have not been audited.
NOTE 9 – INVESTMENT AND RENTAL PROPERTY
For the year ended March 31, 2011The Company and a part of its consolidated subsidiaries have some investment and rental property like an office buildings for rent (including lands) in Tokyo and other regions. For the year ended March 31, 2011, the profit and loss concerning investment and rental property is composed of lease profit ¥10,758 million ($129,381 thousand), subsidy income ¥201 million ($2,417 thousand), loss on disposal of property and equipment ¥367 million ($4,414 thousand), and loss on earthquake disaster ¥268 million ($3,223 thousand).
Notes To Consolidated Financial Statements
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Information about fair value of investment and rental property included in the consolidated financial statement at March 31, 2011, was as follows:
Book value Fair valueMarch 31, 2010 Increase/(Decrease) March 31, 2011 March 31, 2011
(Millions of yen)¥88,860 ¥(4,991) ¥83,869 ¥266,815
Book value Fair valueMarch 31, 2010 Increase/(Decrease) March 31, 2011 March 31, 2011
(Thousands of U.S. dollars)$1,068,671 $(60,024) $1,008,647 $3,208,839
Note:1. Book value is the net amount of the acquisition cost and the accumulated depreciation.2. Concerning net amount of increase and decrease of book value, the main factor of increase was maintenance and renewal of
existing facilities ¥2,792 million ($33,578 thousand), and the main factor of decrease was depreciation ¥7,689 million ($92,471 thousand).
3. Fair value as of March 31, 2011, is the amount that is mainly based on the evaluation document by a real estate appraiser outside the Company.
For the year ended March 31, 2010The Company and a part of its consolidated subsidiaries have some investment and rental property like an office buildings for rent (including lands) in Tokyo and other regions. For the year ended March 31, 2010, the profit and loss concerning investment and rental property is composed of lease profit ¥10,718 million, indemnity income of existing facilities for rent ¥40 million, loss on disposal of property and equipment ¥202 million, and impairment loss ¥321 million.
Information about fair value of investment and rental property included in the consolidated financial statement at March 31, 2010, was as follows:
Book value Fair valueMarch 31, 2009 Increase/(Decrease) March 31, 2010 March 31, 2010
(Millions of yen)¥74,433 ¥14,427 ¥88,860 ¥273,801
Note:1. Book value is the net amount of the acquisition cost and the accumulated depreciation.2. Concerning net amount of increase and decrease of book value, the main factor of increase was acquisition of real estate
(construction of Yokohama Dia Building and others) ¥21,053 million, and the main factors of decrease were depreciation ¥6,255 million and impairment loss ¥321 million.
3. Fair value as of March 31, 2010, is the amount that is mainly based on the evaluation document by a real estate appraiser outside the Company.
(Additional Information) Effective from the fiscal year ended March 31, 2010, the Company and its consolidated subsidiaries adopted the “Accounting Standard for Disclosures about Fair Value of Investment and Rental Property” (Accounting Standards Board of Japan (“ASBJ”) Statement No.20 issued on November 28, 2008) and the “Guidance on Accounting Standard for Disclosures about Fair Value of Investment and Rental Property” (ASBJ Guidance No.23 issued on November 28, 2008) for the years ending on or after March 31, 2010.
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Short-term bank loans outstanding at March 31, 2011 and 2010 were ¥14,368 million ($172,796 thousand) and ¥8,893 million, respectively, and generally represented by short-term bank loans with interest at annual rates of 0.43% to 10.75% and 0.8447% to 4.7%, respectively.
Long-term debt at March 31, 2011 and 2010 consisted of the following:
March 31, March 31,
2011 2010 2011(Millions of yen) (Thousands of U.S. dollars)
Loans from banks, insurance companies and other in
generally secured,
0. 53%-3.4418% and 0.9623%-2.55% per annum ¥13,149 ¥16,499 $158,136
Balance in lease obligations 404 213 4,859
1.17% yen bonds due 2011, unsecured 5,000 5,000 60,132
1.67% yen bonds due 2014, unsecured 5,000 5,000 60,132
1.75% yen bonds due 2015, unsecured 7,000 7,000 84,185
2.08% yen bonds due 2018, unsecured 7,000 7,000 84,185
37,553 40,712 451,629
Less current portion (6,102) (5,185) (73,385)
¥31,451 ¥35,527 $378,244
NOTE 11 – SHORT-TERM BANK LOANS AND LONG-TERM DEBT
NOTE 10 – PLEDGED ASSETS
The net book value of pledged assets at March 31, 2011 and 2010 was as follows:
March 31, March 31,
2011 2010 2011(Millions of yen) (Thousands of U.S. dollars)
Land ¥1,104 ¥1,104 $13,277
Buildings and structures 640 719 7,697
Investments in securities 87 93 1,046
¥1,831 ¥1,916 $22,020
Liabilities secured by the pledged assets mentioned above at March 31, 2011 and 2010 were as follows:
March 31, March 31,
2011 2010 2011(Millions of yen) (Thousands of U.S. dollars)
Short-term bank loans ¥ 963 ¥ 861 $ 11,581
Other in current liabilities 608 640 7,312
Long-term debt 6,726 6,941 80,890
Deposits on long-term leases 1,797 1,957 21,612
¥10,094 ¥ 10,399 $121,395
Notes To Consolidated Financial Statements
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NOTE 12 – RETIREMENT BENEFITS AND PENSION PLAN
The aggregate annual maturities of long-term debt at March 31, 2011 were as follows:
Year ending March 31, Amount(Millions of yen) (Thousands of U.S. dollars)
2012 ¥ 961 $ 11,557
2013 4,122 49,573
2014 4,721 56,777
2015 1,011 12,159
2016 386 4,642
2017 and thereafter 1,948 23,428
¥13,149 $158,136
The aggregate annual maturities of lease obligation at March 31, 2011 were as follows:
Year ending March 31, Amount(Millions of yen) (Thousands of U.S. dollars)
2012 ¥141 $1,696
2013 127 1,527
2014 90 1,082
2015 31 373
2016 13 157
2017 and thereafter 2 24
¥404 $4,859
The liabilities for retirement benefits included in the liability section of the consolidated balance sheets as of March 31, 2011 and 2010 consists of the following:
March 31, March 31,
2011 2010 2011 (Millions of yen) (Thousands of U.S. dollars)
Projected benefit obligation ¥28,273 ¥22,730 $340,024
Less fair value of pension assets (11,633) (9,641) (139,904)
Unfunded projected benefit obligation 16,640 13,089 200,120
Unrecognized net actuarial loss (578) (265) (6,951)
Unrecognized prior service costs 571 734 6,867
Employees’ retirement benefits 16,633 13,558 200,036
Retirement benefits to directors and corporate
statutory auditors 372 174 4,474
Liability for retirement benefits ¥17,005 ¥13,732 $204,510
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NOTE 14 – IMPAIRMENT LOSS
Indemnity income of existing facilities for lease represents mainly income from cancellation of leased real estate facilities and commercial facilities by tenants for the year ended March 31, 2010. For the year ended March 31, 2009, that represents mainly income from cancellation of leased warehouse facilities and equipments of commercial facilities by tenants.
NOTE 13 – INDEMNITY INCOME OF EXITING FACILITIES FOR LEASE
Included in the consolidated statements of income for the years ended March 31, 2011, 2010 and 2009 are severance and retirement benefit expenses for employees comprising of the following:
Year ended March 31, Year ended March 31,
2011 2010 2009 2011(Millions of yen) (Thousands of U.S. dollars)
Service costs-benefits earned during the year ¥1,155 ¥ 984 ¥1,177 $13,890
Interest cost on projected benefit obligation 485 420 437 5,833
Expected return on pension assets (190) (149) (176) (2,285)
Amortization of actuarial gains and losses (44) 106 (262) (529)
Amortization of prior service costs (163) (82) − (1,960)
Contributions to defined contribution plans 127 73 − 1,527
Reversal of retirement benefit − − (77) −
Severance and retirement benefit expenses for employees ¥1,370 ¥1,352 ¥1,099 $16,476
The discount rate and the rate of expected return on pension assets used by the Company and its consolidated subsidiaries are 2.5% and 2.0-2.5% for 2011, 2.5% and 2.0% for 2010 and 2009, respectively. The estimated amount of all retirement benefits to be paid at the future retirement date is allocated equally to each service year using the estimated number of total service years and point basis.
The impairment loss for the year ended March 31, 2010 and 2009 consists of the following:
March 31, 2010Asset group Location Asset type Millions of yen
Commercial facilities for rent
Takasago City, Hyogo Prefecture
Land, building and others
¥321
March 31, 2009Asset group Location Asset type Millions of yen
Warehouse facilities
Higashi nada, Kobe City
Buildings and Structures
¥ 87
Unused land Ichikawa City, Chiba Prefecture
Land306
¥393
As of March 31, 2010 and 2009, the Company and its consolidated domestic subsidiaries classified fixed assets by cash generating units which were considered to be independent from cash flows of other groups and recognized impairment loss on certain groups of assets.
For the year ended March 31, 2010, the Company and its consolidated subsidiaries recognized the impairment loss amounting to ¥321 million as other expense in the consolidated statements of income by devaluating the book value of each fixed asset to its recoverable amount.
The recoverable amount of commercial facilities for lease is its net realizable value based on an amount determined by valuations made in accordance with real estate appraisal standards.
For the year ended March 31, 2009, the Company and its consolidated subsidiaries recognized the impairment loss amounting to ¥393 million as other expense in the consolidated statements of income by devaluating the book value of each fixed asset to its recoverable amount.
The recoverable amounts of warehouse facilities are value in use.The recoverable amount of unused land is its net realizable value based on an amount determined by valuations made in accordance
with real estate appraisal standards.
Notes To Consolidated Financial Statements
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Prior to April 1, 2008, the Company and its consolidated domestic subsidiaries accounted for finance leases which do not transfer ownership of the leased property to the lessee as operating leases.
FINANCE LEASES(LESSEE LEASES)Finance lease transactions without ownership transfer to lessee (a) Purchase price equivalents, Accumulated depreciation equivalents, and Book value equivalents
March 31, March 31,
2011 2010 2011(Millions of yen) (Thousands of U.S. dollars)
Machinery and equipment and other
Purchase price equivalents ¥1,219 ¥1,650 $14,660
Accumulated depreciation equivalents 963 1,094 11,581
Book value equivalents ¥ 256 ¥ 556 $ 3,079
Purchase price equivalents were calculated using the inclusive-of-interest method.
(b) Lease commitments
March 31, March 31,
2011 2010 2011(Millions of yen) (Thousands of U.S. dollars)
Due within one year ¥189 ¥299 $2,273
Due after one year 67 257 806
¥256 ¥556 $3,079
Lease commitments as lessee were calculated using the inclusive-of-interest method.
(c) Lease payments and Depreciation equivalents
Year ended March 31, Year ended March 31,
2011 2010 2009 2011(Millions of yen) (Thousands of U.S. dollars)
Lease payments ¥300 ¥367 ¥396 $3,608
Depreciation equivalents ¥300 ¥367 ¥396 $3,608
(d) Calculation method of depreciation equivalentsDepreciation equivalents are computed on a straight-line method over the lease period without residual value.
(LESSOR LEASES)Finance lease transactions without ownership transfer to lessee (a) Purchase price, Accumulated depreciation and Book value
March 31, March 31,
2011 2010 2011(Millions of yen) (Thousands of U.S. dollars)
Buildings and structures and other
Purchase price ¥3,382 ¥3,382 $40,673
Accumulated depreciation 1,892 1,758 22,754
Book value ¥1,490 ¥1,624 $17,919
At March 31, 2011, the balance of guarantee for loans amounted to ¥2,774 million ($33,361 thousand).
NOTE 15 – CONTINGENT LIABILITIES
NOTE 16 – LEASE TRANSACTIONS
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NOTE 17 – DERIVATIVE TRANSACTIONS
For the year ended March 31, 20111. Derivative transactions to which hedge accounting is not applied at March 31, 2011
None2. Derivative transactions to which hedge accounting is applied at March 31, 2011
Interest rate related derivativesHedge accounting method : Interest income or expense on the hedged items reflects net amount to be paid or received under the derivativesType of transaction : Interest rate swap, receive floating, pay fixedMajor hedged items : Long-term debt
(b) Lease commitments
March 31, March 31,
2011 2010 2011(Millions of yen) (Thousands of U.S. dollars)
Due within one year ¥ 138 ¥ 131 $ 1,660
Due after one year 2,056 2,194 24,726
¥2,194 ¥2,325 $26,386
(c) Rental income, Depreciation and Interest income equivalents
Year ended March 31, Year ended March 31,
2011 2010 2009 2011(Millions of yen) (Thousands of U.S. dollars)
Rental income ¥275 ¥294 ¥304 $3,307
Depreciation ¥134 ¥148 ¥165 $1,612
Interest income equivalents ¥144 ¥151 ¥160 $1,732
(d) Calculation of interest income equivalents The excess of total rental income and estimated residual value over acquisition costs is regarded as amounts representing
interest income equivalents and is allocated to each period using the interest method.
OPERATING LEASES(LESSEE LEASES)Future minimum lease payments under non-cancelable operating lease as of March 31, 2011 and 2010 were as follows:
March 31, March 31,
2011 2010 2011(Millions of yen) (Thousands of U.S. dollars)
Due within one year ¥ 3,104 ¥ 2,338 $ 37,330
Due after one year 15,305 8,908 184,065
¥18,409 ¥11,246 $221,395
(LESSOR LEASES)Future minimum lease receipts under non-cancelable operating lease as of March 31, 2011 and 2010 were as follows:
March 31, March 31,
2011 2010 2011(Millions of yen) (Thousands of U.S. dollars)
Due within one year ¥14,420 ¥14,365 $173,421
Due after one year 21,765 27,600 261,756
¥36,185 ¥41,965 $435,177
Notes To Consolidated Financial Statements
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Type and number of shares outstanding and treasury stock for the years ended March 31, 2011 and 2010 were as follows:
Shares outstanding Treasury stock
Type of shares Common stock Common stock
Number of shares: (Shares)
Balance at April 1, 2009 175,921,478 572,829
Increased in the accounting period – 27,728
Decreased in the accounting period – (900)
Balance at March 31, 2010 175,921,478 599,657
Increased in the accounting period – 33,895
Decreased in the accounting period – (1,453)
Balance at March 31, 2011 175,921,478 632,099
Increase in the number of shares was due to purchases of less-than-one-unit shares. Decrease in the number of shares was due to sales of less-than-one-unit shares.
Matters related to dividends were as follows: (a) Dividends payment Dividends payment during the year ended March 31, 2011 was as follows:
Approvals by Ordinary general shareholders meeting The Board of Directors meeting
Approval date June 29, 2010 October 29, 2010
Type of shares Common stock Common stock
Total amount of dividends ¥1,052 million ($12,652 thousand) ¥1,052 million ($12,652 thousand)
Dividends per share ¥6.0 ($0.07) ¥6.0 ($0.07)
Record date March 31, 2010 September 30, 2010
Effective date June 30, 2010 December 2, 2010
Dividends payment during the year ended March 31, 2010 was as follows:
Approvals by Ordinary general shareholders meeting The Board of Directors meeting
Approval date June 26, 2009 October 30, 2009
Type of shares Common stock Common stock
Total amount of dividends 1,052 million ¥1,052 million
Dividends per share ¥6.0 ¥6.0
Record date March 31, 2009 September 30, 2009
Effective date June 29, 2009 December 2, 2009
NOTE 18 – CHANGES IN NET ASSETS
March 31, 2011
(Millions of yen) (Thousands of U.S. dollars)
Notional amount ¥780 $9,381
Portion due after one year included herein ¥660 $7,937
Fair value (Note 1) – –
Note:1. With respect to interest rate swap contracts which meet certain conditions, fair values of the interest rate swap contracts are
included in the fair values of the relevant long-term loans payable, since they are used for recording long-term loans payable as hedged items.
For the year ended March 31, 2010None
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For the year ended March 31, 20111. General information about reportable segmentsThe Company’s reportable segments are components for which separate financial information is available, and evaluated regularly by the Board of Directors in determining allocation of management resources and in assessing performance.
The Company decided its reportable segments by considering resemblance between the business activities of the Company and its consolidated subsidiaries from the aspects of business type, business nature, method of providing service, market of service and other. The Company has two reportable segments, “Logistics” and “Real estate”.
Each segment is composed by following business:Logistics: - Warehousing, Transportation, Port-terminal operation and International freight forwarding.Real estate:- Rental for office buildings and sales for real estate.
2. Basis of measurement about reported segment revenue, segment income, segment assets and other material itemsThe accounting methods of business segments reported are consistent with those stated in Note 1 “SUMMARY OF ACCOUNTING POLICIES”.
Segment income or loss is based on the figures of operating income or loss. Amounts for inter-segment transactions or transfers are calculated based on market prices.3. Information about reported segment revenue, segment income, segment assets and other material itemsReportable segment information for the year ended March 31, 2011, is as follows:
March 31, 2011
Logistics Real estate Total Adjustment Consolidated(Millions of yen)
Revenues:
Non-affiliated customer ¥ 139,663 ¥ 36,217 ¥ 175,880 ¥ – ¥ 175,880
Intersegment 401 1,112 1,513 (1,513) –
140,064 37,329 177,393 (1,513) 175,880
Segment income 4,974 11,107 16,081 (3,917) 12,164
Segment assets ¥ 157,962 ¥ 102,375 ¥ 260,337 ¥ 90,089 ¥ 350,426
Depreciation and amortization ¥ 5,430 ¥ 8,023 ¥ 13,453 ¥ 201 ¥ 13,654
Amortization of goodwill ¥ 106 ¥ – ¥ 106 ¥ – ¥ 106Investments in affiliates accounted for by the equity method ¥ 3,764 ¥ – ¥ 3,764 ¥ – ¥ 3,764
Increase in tangible and intangible fixed assets ¥ 4,425 ¥ 1,974 ¥ 6,399 ¥ 124 ¥ 6,523
NOTE 19 – SEGMENT INFORMATION
(b) Dividends whose record date is attributable to the accounting period ended March 31, 2011 but to be effective after the said accounting period were as follows:
Approvals by Ordinary general shareholders meeting
Approval date June 29, 2011
Type of shares Common stock
Funds for dividends Retained earnings
Total amount of dividends ¥1,052 million ($12,652 thousand)
Dividends per share ¥6.0 ($0.07)
Record date March 31, 2011
Effective date June 30, 2011
Notes To Consolidated Financial Statements
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March 31, 2011
Logistics Real estate Total Adjustment Consolidated(Thousands of U.S. dollars)
Revenues:
Non-affiliated customer $ 1,679,651 $ 435,562 $ 2,115,213 $ – $ 2,115,213
Intersegment 4,823 13,373 18,196 (18,196) –
1,684,474 448,935 2,133,409 (18,196) 2,115,213
Segment income 59,819 133,578 193,397 (47,107) 146,290
Segment assets $1,899,723 $ 1,231,209 $ 3,130,932 $ 1,083,452 $ 4,214,384
Depreciation and amortization $ 65,304 $ 96,488 $ 161,792 $ 2,417 $ 164,209
Amortization of goodwill $ 1,275 $ – $ 1,275 $ – $ 1,275 Investments in affiliates accounted for by the equity method $ 45,268 $ – $ 45,268 $ – $ 45,268
Increase in tangible and intangible fixed assets $ 53,217 $ 23,740 $ 76,957 $ 1,491 $ 78,448
Segment information for the years ended March 31, 2010 and 2009 based on the revised Accounting standard, “Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” (Accounting Standards Board of Japan (“ASBJ”) Statement No.17, issued on March 27, 2009 ) and the “Guidance on Disclosures about Segments of an Enterprise and Related Information” ( ASBJ Guidance No.20, issued on March 21, 2008) is omitted because approximately the same information for the years ended March 31, 2010 and 2009 is shown in For the years ended March 31, 2010 and 2009.4. Amortization and unamortized balance of goodwill by reportable segment
March 31, 2011
Logistics Real estate Total Adjustment Consolidated(Millions of yen)
Amortization of goodwill ¥ 106 ¥ – ¥ 106 ¥ – ¥ 106
Unamortized balance ¥ 2,099 ¥ – ¥ 2,099 ¥ – ¥ 2,099
March 31, 2011
Logistics Real estate Total Adjustment Consolidated(Thousands of U.S. dollars)
Amortization of goodwill $ 1,275 $ – $ 1,275 $ – $ 1,275
Unamortized balance $ 25,244 $ – $ 25,244 $ – $ 25,244
(Additional information)Effective from the fiscal year ended March 31, 2011, the Company and its consolidated subsidiaries adopted the “Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” (Accounting Standards Board of Japan (“ASBJ”) Statement No.17, issued on March 27, 2009) and the “Guidance on Disclosures about Segments of an Enterprise and Related Information” (ASBJ Guidance No.20, issued on March 21, 2008).
For the years ended March 31, 2010 and 2009The Company and its consolidated subsidiaries are primarily in operation with the following two businesses.
(1) Logistics business:Warehousing, transportation, port-terminal operation and international freight forwarding
(2) Real estate business:Rental for office buildings and sales for real estate
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Business segment information for the years ended March 31, 2010 and 2009 was as follows:
March 31, 2010
Logistics Real estate Total
Elimination or corporate assets
or expenses Consolidated(Millions of yen)
Revenues:
Non-affiliated customer ¥ 111,902 ¥ 36,445 ¥ 148,347 ¥ – ¥ 148,347
Intersegment 378 1,103 1,481 (1,481) –
112,280 37,548 149,828 (1,481) 148,347
Operating expenses 108,917 26,592 135,509 2,557 138,066
Operating income ¥ 3,363 ¥ 10,956 ¥ 14,319 ¥ (4,038) ¥ 10,281
Identifiable assets ¥ 131,893 ¥ 104,287 ¥ 236,180 ¥ 105,543 ¥ 341,723
Depreciation and amortization ¥ 5,346 ¥ 6,544 ¥ 11,890 ¥ 201 ¥ 12,091
Impairment loss ¥ – ¥ 321 ¥ 321 ¥ – ¥ 321
Capital expenditures ¥ 1,704 ¥ 21,507 ¥ 23,211 ¥ 34 ¥ 23,245
March 31, 2009
Logistics Real estate Total
Elimination or corporate assets
or expenses Consolidated(Millions of yen)
Revenues:
Non-affiliated customer ¥ 124,417 ¥ 36,560 ¥ 160,977 ¥ – ¥ 160,977
Intersegment 333 1,089 1,422 (1,422) –
124,750 37,649 162,399 (1,422) 160,977
Operating expenses 120,886 26,207 147,093 2,562 149,655
Operating income ¥ 3,864 ¥ 11,442 ¥ 15,306 ¥ (3,984) ¥ 11,322
Identifiable assets ¥ 131,464 ¥ 87,115 ¥ 218,579 ¥ 97,803 ¥ 316,382
Depreciation and amortization ¥ 4,820 ¥ 6,208 ¥ 11,028 ¥ 191 ¥ 11,219
Impairment loss ¥ 87 ¥ 306 ¥ 393 ¥ – ¥ 393
Capital expenditures ¥ 19,601 ¥ 3,475 ¥ 23,076 ¥ 345 ¥ 23,421
The effect for the year ended March 31, 2010 of the change of past-employment plans, as mentioned in RETIREMENT BENEFITS AND PENSION PLAN in Note 1, is to decrease operating expenses by ¥55 million in the logistics business by ¥15 million in the real estate business and by ¥19 million in adjustment and to increase operating income by the same amount, respectively.
The effect for the year ended March 31, 2009 of the change of accounting policy for depreciation method of warehouse facilities(buildings), as mentioned in PROPERTY AND EQUIPMENT, DEPRECIATION in Note 1, is to decrease operating expenses and depreciation and amortization by ¥491 million in the logistics business and to increase operating income by the same amount. And the Company and its consolidated domestic subsidiaries account for the non-recurring depreciation by ¥530 million. As a result, identifiable assets in the logistics business decreased by ¥39 million.
Geographical information and overseas revenue were omitted as they were immaterial to the consolidated financial statements.
Notes To Consolidated Financial Statements
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Company Profile (As of March 31, 2011)
Headquarters and Branches
Headquarters: Chuo-ku, Tokyo
Branches: Tokyo, Yokohama, Nagoya, Osaka, Kobe and Fukuoka
Date of Establishment April 15, 1887
Capital ¥22,393,986,570
Number of Shares Issued 175,921,478
Authorized Shares 440,000,000
Number of Employees 832 persons (parent only; not including 158 employees temporarily on loan to other companies. There are also 62 temporary employees, as well as 574 persons temporarily loaned or dispatched within the Group and those from outside the Group companies and accepted by the Company)
4,283 persons (on a consolidated basis; not including 58 employees temporarily on loan to companies outside the Group. There are also 1,235 temporary employees, as well as 1,068 persons temporarily loaned or dispatched from outside the Group companies and accepted by the Company)
Stock Exchange Listing First Section of the Tokyo Stock Exchange
First Section of the Osaka Securities Exchange
Securities Code 9301
Major ShareholdersShareholder’s Name Number of Shares Held (Thousands) Shareholding Ratio (%)Japan Trustee Services Bank, Ltd. (trust account) 11,839 6.8Meiji Yasuda Life Insurance Company 9,707 5.5The Master Trust Bank of Japan, Ltd. (trust account) 9,683 5.5Tokio Marine & Nichido Fire Insurance Co., Ltd. 8,603 4.9MITSUBISHI ESTATE CO., LTD. 7,331 4.2Kirin Holdings Company, Limited 6,921 3.9The Bank of Tokyo-Mitsubishi UFJ, Ltd. 3,728 2.1JPMorgan Securities Japan Co., Ltd. 3,592 2.0ASAHI GLASS CO., LTD. 3,315 1.9Mitsubishi Corporation 3,205 1.8
Notes:1. The Bank of Tokyo-Mitsubishi UFJ, Ltd. has set 1,500,000 Mitsubishi Logistics’ shares as trust funds for retirement benefits for which voting rights are
reserved, in addition to the shares stated in the table above.2. The “Shareholding ratio” is calculated after excluding treasury stock (562,898 shares).
Notes:1. Directors with an asterisk (*) are representative directors.2. Minoru Makihara, Jiro Nemoto and Shigemitsu Miki are Outside Directors as stipulated in the Companies Act Article 2, Item 15. The Company designated them as independent
directors as required by the rules of the Tokyo Stock Exchange and the Osaka Securities Exchange, and reported it to both the Exchanges.3. Michio Izumi, Yohnosuke Yamada, and Saburo Horiuchi are Outside Corporate Auditors as stipulated in the Companies Act Article 2, Item 16. The Company designated them as
independent corporate auditors as required by the rules of the Tokyo Stock Exchange and the Osaka Securities Exchange, and reported it to both the Exchanges.
Directors and Corporate Auditors (As of June 29, 2011)Position Name Responsibilities and/or Primary OccupationChairman of the Board Naoshi BanPresident* Tetsuro OkamotoManaging Director* Fumio Takeda Responsible for General Affairs, Corporate Communications, Personnel, and PlanningManaging Director Atsuki Hashimoto Responsible for Technical and Real Estate BusinessManaging Director Makoto Sakaizawa Responsible for Warehousing & Distribution and Harbor Transportation BusinessManaging Director Koji Yoneyama Responsible for International Transportation BusinessManaging Director Yuichi Hashimoto Responsible for Accounting & financing, Information System, and Internal AuditDirector Minoru Makihara Senior Corporate Advisor, Mitsubishi CorporationDirector Jiro Nemoto Chief Board Advisor, Nippon Yusen Kabushiki KaishaDirector Shigemitsu Miki Senior Advisor, The Bank of Tokyo-Mitsubishi UFJ, Ltd.Director Kenji Irie General Manager, Technical DivisionDirector Yoshinori Watabe General Manager, Warehousing & Distribution DivisionDirector Akio Matsui General Manager, Personnel DivisionDirector Masato Hoki General Manager, Yokohama BranchStanding Corporate Auditor Tohru WatanabeStanding Corporate Auditor Michio IzumiCorporate Auditor Yohnosuke Yamada LawyerCorporate Auditor Shunkyo Harada Managing Director, Kyodo Soko CorporationCorporate Auditor Saburo Horiuchi Certified Public Accountant
Contents Contents ...
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To Our Shareholders
On the Great East Japan Earthquake
Topics
Overview of the Mitsubishi Logistics Group
Independent Auditor’s Report
Consolidated Balance Sheets
Consolidated Statements Of Income
Consolidated Statements Of Comprehensive Income
Consolidated Statements Of Changes In Net Assets
Consolidated Statements Of Cash Flows
Notes To Consolidated Financial Statements
Company Pro�le
1
2
2
4
5
6
8
9
10
11
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37
Company Profile (As of March 31, 2011)
Headquarters and Branches
Headquarters: Chuo-ku, Tokyo
Branches: Tokyo, Yokohama, Nagoya, Osaka, Kobe and Fukuoka
Date of Establishment April 15, 1887
Capital ¥22,393,986,570
Number of Shares Issued 175,921,478
Authorized Shares 440,000,000
Number of Employees 832 persons (parent only; not including 158 employees temporarily on loan to other companies. There are also 62 temporary employees, as well as 574 persons temporarily loaned or dispatched within the Group and those from outside the Group companies and accepted by the Company)
4,283 persons (on a consolidated basis; not including 58 employees temporarily on loan to companies outside the Group. There are also 1,235 temporary employees, as well as 1,068 persons temporarily loaned or dispatched from outside the Group companies and accepted by the Company)
Stock Exchange Listing First Section of the Tokyo Stock Exchange
First Section of the Osaka Securities Exchange
Securities Code 9301
Major ShareholdersShareholder’s Name Number of Shares Held (Thousands) Shareholding Ratio (%)Japan Trustee Services Bank, Ltd. (trust account) 11,839 6.8Meiji Yasuda Life Insurance Company 9,707 5.5The Master Trust Bank of Japan, Ltd. (trust account) 9,683 5.5Tokio Marine & Nichido Fire Insurance Co., Ltd. 8,603 4.9MITSUBISHI ESTATE CO., LTD. 7,331 4.2Kirin Holdings Company, Limited 6,921 3.9The Bank of Tokyo-Mitsubishi UFJ, Ltd. 3,728 2.1JPMorgan Securities Japan Co., Ltd. 3,592 2.0ASAHI GLASS CO., LTD. 3,315 1.9Mitsubishi Corporation 3,205 1.8
Notes:1. The Bank of Tokyo-Mitsubishi UFJ, Ltd. has set 1,500,000 Mitsubishi Logistics’ shares as trust funds for retirement benefits for which voting rights are
reserved, in addition to the shares stated in the table above.2. The “Shareholding ratio” is calculated after excluding treasury stock (562,898 shares).
Notes:1. Directors with an asterisk (*) are representative directors.2. Minoru Makihara, Jiro Nemoto and Shigemitsu Miki are Outside Directors as stipulated in the Companies Act Article 2, Item 15. The Company designated them as independent
directors as required by the rules of the Tokyo Stock Exchange and the Osaka Securities Exchange, and reported it to both the Exchanges.3. Michio Izumi, Yohnosuke Yamada, and Saburo Horiuchi are Outside Corporate Auditors as stipulated in the Companies Act Article 2, Item 16. The Company designated them as
independent corporate auditors as required by the rules of the Tokyo Stock Exchange and the Osaka Securities Exchange, and reported it to both the Exchanges.
Directors and Corporate Auditors (As of June 29, 2011)Position Name Responsibilities and/or Primary OccupationChairman of the Board Naoshi BanPresident* Tetsuro OkamotoManaging Director* Fumio Takeda Responsible for General Affairs, Corporate Communications, Personnel, and PlanningManaging Director Atsuki Hashimoto Responsible for Technical and Real Estate BusinessManaging Director Makoto Sakaizawa Responsible for Warehousing & Distribution and Harbor Transportation BusinessManaging Director Koji Yoneyama Responsible for International Transportation BusinessManaging Director Yuichi Hashimoto Responsible for Accounting & financing, Information System, and Internal AuditDirector Minoru Makihara Senior Corporate Advisor, Mitsubishi CorporationDirector Jiro Nemoto Chief Board Advisor, Nippon Yusen Kabushiki KaishaDirector Shigemitsu Miki Senior Advisor, The Bank of Tokyo-Mitsubishi UFJ, Ltd.Director Kenji Irie General Manager, Technical DivisionDirector Yoshinori Watabe General Manager, Warehousing & Distribution DivisionDirector Akio Matsui General Manager, Personnel DivisionDirector Masato Hoki General Manager, Yokohama BranchStanding Corporate Auditor Tohru WatanabeStanding Corporate Auditor Michio IzumiCorporate Auditor Yohnosuke Yamada LawyerCorporate Auditor Shunkyo Harada Managing Director, Kyodo Soko CorporationCorporate Auditor Saburo Horiuchi Certified Public Accountant
Contents Contents ...
...
...
...
...
...
...
...
...
...
...
...
To Our Shareholders
On the Great East Japan Earthquake
Topics
Overview of the Mitsubishi Logistics Group
Independent Auditor’s Report
Consolidated Balance Sheets
Consolidated Statements Of Income
Consolidated Statements Of Comprehensive Income
Consolidated Statements Of Changes In Net Assets
Consolidated Statements Of Cash Flows
Notes To Consolidated Financial Statements
Company Pro�le
1
2
2
4
5
6
8
9
10
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005_0808001372309.indd 2 2011/09/14 10:54:18名称未設定-1 3 2011/09/16 9:16:59
ANNUAL REPORT 2011Year ended March 31, 2011
19-1 Nihonbashi, 1-chome Chuo-ku, Tokyo 103-8630, Japanhttp://www.mitsubishi-logistics.co.jp
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