ANNUAL REPORT 2012 · 2013. 7. 18. · 37 Company Profile (As of March 31, 2012) Headquarters and Branches Headquarters: Chuo-ku, Tokyo Branches: Tokyo, Yokohama, Nagoya, Osaka, Kobe

ANNUAL REPORT 2012Year ended March 31, 2012

Tokyo Dia Building 28-38, Shinkawa, 1-chome, Chuo-ku, Tokyo 104-0033 Japan http://www.mitsubishi-logistics.co.jp

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Company Profile (As of March 31, 2012)

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 830 persons (parent only; not including 162 employees temporarily on loan to other companies. There are also 75 temporary employees, as well as 585 persons temporarily loaned or dispatched within the Group and those from outside the Group companies and accepted by the Company)

4,386 persons (on a consolidated basis; not including 63 employees temporarily on loan to companies outside the Group. There are also 1,277 temporary employees, as well as 1,031 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) 11,862 6.8The Master Trust Bank of Japan, Ltd. (trust account) 10,058 5.7Meiji Yasuda Life Insurance Company 9,707 5.5Tokio Marine & Nichido Fire Insurance Co., Ltd. 7,775 4.4MITSUBISHI ESTATE CO., LTD. 7,331 4.2Kirin Holdings Company, Limited 6,921 3.9The Bank of Tokyo-Mitsubishi UFJ, Ltd. 3,728 2.1ASAHI GLASS CO., LTD. 3,315 1.9Mitsubishi Corporation 3,205 1.8Takenaka Corporation 3,010 1.7

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 (571,403 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 28, 2012)Position Name Responsibilities and/or Primary OccupationChairman of the Board Naoshi BanPresident* Tetsuro OkamotoManaging Director Makoto Sakaizawa Responsible for Technical, Harbor Transportation and Real Estate BusinessesManaging Director Koji Yoneyama Responsible for International Transportation BusinessManaging Director Yuichi Hashimoto Responsible for Accounting & Financing, Information System, and Internal AuditManaging Director Yoshinori Watabe Responsible for Warehousing & Distribution BusinessManaging Director* Akio Matsui Responsible for General Affairs, Corporate Communications, Personnel, and Planning; and General Manager, Personnel DivisionDirector 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 Masato Hoki General Manager, Yokohama BranchDirector Kazuhiko Takayama General Manager, Nagoya BranchDirector Takanori Miyazaki General Manager, Kobe 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

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To Our Shareholders

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

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2

4

5

6

8

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10

11

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We are obliged to you for your continued support and patronage.I hereby report the business overview of the Mitsubishi

Logistics Group for the 209th fiscal term (the year ended March 31, 2012).

During the year under review, the global economy was characterized by slowing growth rates in emerging countries such as China and economic sluggishness in Europe against a backdrop of the debt crisis despite a moderate recovery that continued in the United States. Although a sense of economic deceleration strengthened, affected by the decline in exports and production due to the impact of the Great East Japan Earthquake along with the fall in consumer spending, the Japanese economy subsequently showed signs of recovery owing to the effect of stimulus policy and other factors.

In these economic conditions, the business environment surrounding the Group remained difficult in the mainstay business segments of “Logistics” and “Real Estate.” For Logistics, businesses such as the warehousing and port and harbor operations businesses were adversely affected by a decline in export freight volume and the logistics rationalization despite an expansion of import freight volume. For Real Estate, the vacancy rate did not improve and the rent level partially decreased for some rental office buildings.

Under these circumstances, the Mitsubishi Logistics Group appropriately responded to a review of distribution bases at its customers, which was triggered by the occurrence of the Great East Japan Earthquake, and promoted aggressive marketing activities. In Logistics, we strove to extend distribution center operations especially 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. Meanwhile, we endeavored to further improve business performance via thorough cost management and efficiency improvement of diverse business operations.

Moreover, in an effort to expand the logistics business, we entered into a three-party business alliance agreement with Japan Airlines Co., Ltd., and its subsidiary Jupiter Global Limited. As the Company subsequently accepted the allocation of new shares to a third party conducted by Jupiter Global Limited in late August 2011, Jupiter Global Limited has been included in the category of affiliates accounted for by the equity method of the Company from the end of the second quarter.

As a result, revenue for the Logistics segment for the year under review increased and revenue for the Real Estate segment also increased, amounting to a combined ¥203,697 million, an increase of ¥27,818 million, or 15.8%, from the previous fiscal year. In Logistics, revenue rose because freight volumes increased in each business of warehousing, trucking and international transportation, and Fuji Logistics Co., Ltd. and its subsidiaries were included as consolidated subsidiaries from the second half of the previous fiscal year. In Real Estate also, revenue increased mainly due to the posting of revenue from condominium sales despite the negative effect of decline in demand for office buildings.

Cost of services on the whole increased ¥25,813 million, or 16.6%, year over year to ¥181,645 million, partly due to increases in operational and transportation consignment costs, personnel expenses and facility rental expenses in Logistics, reflecting an increase in freight volume and the inclusion of Fuji Logistics Co., Ltd. and its subsidiaries as consolidated subsidiaries, and the posting of costs for real estate sales in Real Estate. Selling, general and administrative expenses increased ¥1,635 million, or 20.7%, year over year to ¥9,519 million, reflecting the inclusion of Fuji Logistics Co., Ltd. and its subsidiaries as consolidated subsidiaries.

As a consequence, operating income increased ¥369 million, or 3.0%, year over year to ¥12,533 million, reflecting the profit growth for both the Logistics and Real Estate segments. Ordinary income increased ¥820 million, or 6.0%, to ¥14,508 million additionally due to an increase in dividends income. Consolidated net income rose ¥591 million, or 8.5%, from the previous fiscal year to ¥7,564 million despite a reversal of

deferred tax assets resulting from a reduction in the effective statutory tax rate due to changes in the taxation system because extraordinary losses such as the loss on disposal of fixed assets decreased in addition to the posting of loss on earthquake disaster resulting from the damage caused by the Great East Japan Earthquake as an extraordinary loss item in the previous fiscal year.

In the coming year, the global economy is expected to continue the slowing trend in the growth rate in emerging countries such as China and sluggishness is expected to linger in Europe although a moderate recovery is anticipated in the United States. The Japanese economy is expected to experience a moderate recovery mainly due to an increase in public investment to meet the demand for reconstruction from the Great East Japan Earthquake despite concerns about economic slowdown overseas and the impact of yen appreciation.

In this economic climate, the business conditions surrounding the Group are expected to remain harsh in view of the effects of the logistics rationalization in the logistics industry such as the warehousing and port and harbor operations business despite a moderate increase expected for freight volumes, 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 current Medium-term Management Plan (2010–2012), which was formulated in April 2010. Furthermore, we will engage in the early creation of synergies with Fuji Logistics Co., Ltd., its subsidiaries, and Jupiter Global Limited, 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, 2012, 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, 2013, 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 2012

Tetsuro Okamoto, President

To Our Shareholders

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Topics

Construction of Eco-Friendly and Disaster-Resistant Warehouses

The Company started construction of three buildings that will serve as disaster-resistant and ecofriendly warehouses to support its

customers in their efforts to continue their businesses in the event of a disaster while responding to requirements for the global

environment. The warehouses will be capable of resisting earthquakes and other natural disasters thanks to the latest earthquake-resistant

structure whose index values exceed those specified by the Building Standards Act, etc. They also have high environmental performance

such as the installation of photovoltaic power generation equipment and the adoption of LED lighting.

Ibaraki No. 3 Distribution Center (Osaka) …………………………………………………………………………………………

(1) Location Ibaraki City, Osaka Prefecture (Approx. 2 km from the Ibaraki I.C. of MEISHIN EXPRESSWAY)

(2) Total floor area Approx. 17,600 m2 (4 floors above ground)(3) Purpose for use Warehouse exclusively for pharmaceuticals(4) Major equipment and specifications Photovoltaic power generation equipment (350

kW), LED lighting in entire building, air-conditioning in all rooms (using high-efficiency air-conditioning equipment), emergency power generator and dust-proof specifications for all floors

(5) Construction period Construction started in November 2011, and completion is planned for October 2012

Ibaraki No. 3 Distribution Center (Rendering)

Daito Distribution Center (Osaka) …………………………………………………………………………………………………

(1) Location Daito City, Osaka Prefecture (Approx. 2 km from the Daito-Tsurumi I.C. and approx. 3 km from the Kadoma I.C. of KINKI EXPRESSWAY)

(2) Total floor area Approx. 11,500 m2 (5 floors above ground)(3) Purpose for use Distribution center for Zojirushi Corporation(4) Major equipment and specifications Photovoltaic power generation equipment (85 kW),

LED lighting and dust-proof specifications for all floors

(5) Construction period Construction started in March 2012, and completion is planned for December 2012

Daito Distribution Center (Rendering)

Misato No. 2 Distribution Center (Saitama) ………………………………………………………………………………………

(1) Location Misato City, Saitama Prefecture (Approx. 3 km from the Misato Junction, the nodal point of SHUTO (METROPOLITAN) EXPRESSWAY, JOBAN EXPRESSWAY and TOKYO-GAIKAN EXPRESSWAY)

(2) Total floor area Approx. 26,500 m2 (4 floors above ground)(3) Purpose for use Warehouse exclusively for pharmaceuticals(4) Major equipment and specifications Photovoltaic power generation equipment (530

kW), LED lighting in entire building, air-conditioning in all rooms (using high-efficiency air-conditioning equipment), emergency power generator and dust-proof specifications for all floors

(5) Construction period Construction started in April 2012, and completion is planned for February 2013

Misato No. 2 Distribution Center (Rendering)

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Establishment of a Subsidiary Specializing in Pharmaceuticals Transportation

The Company established Dia Pharmaceutical Network Co., Ltd. (hereinafter

“NewCo”), a subsidiary specializing in transporting pharmaceuticals. NewCo

started its business in January 2012.

Two dedicated pharmaceuticals transportation companies, which have a

strong business base in the Kanto region and the Kansai region, respectively,

have an investment ratio of 15% each in NewCo’s capital.

The Company has engaged in the storage and distribution of

pharmaceuticals on consignment from Japanese and foreign pharmaceutical

companies for approximately 30 years to provide high-quality logistics

operations for pharmaceuticals. With NewCo’s start of operations, we will

endeavor to improve the quality of delivery and distribution of

pharmaceuticals in order to meet customers’ needs such as thorough

temperature control, enhanced traceability and crisis-management measures.

The Company will provide consistent and sophisticated services ranging

from the operation of distribution centers for pharmaceuticals to the

transportation and distribution thereof.

Started Reconstruction of the Nihonbashi Dia Building, an Eco-Friendly, Disaster-Resistant Office Building

In October 2011, the Company started reconstruction of the Edobashi Soko

Building (Nihonbashi, Chuo-ku, Tokyo), which had been used as the

Company’s head office and trunk room for storage.

The construction of the renewed Nihonbashi Dia Building is planned to

be completed in August 2014. The building has 18 floors above ground and

one basement floor with a total floor area of approximately 30,000m2 and is

approximately 90 meters in height; the upper floors are dedicated rental

office floors, whereas the lower floors will be used as the head office of the

Company and a trunk room. The reconstruction was also designed to

conserve the appearance of the former Edobashi Soko Building, which was

designated as one of the “Selected Historical Buildings of Tokyo

Metropolitan Government,” as much as possible.

In light of the experience of the Great East Japan Earthquake, the

Nihonbashi Dia Building is structured to be highly resistant to earthquakes

by installing seismic isolators. In addition, electric rooms and vital facilities

are installed on the upper floors to prepare for water damage and emergency

power generators are installed to cope with long-term power outage.

Furthermore, this state-of-the-art, disaster-proof, urban building is designed

as a core base for corporate business continuity taking into account

circumstances where many people may be left in the city without the means

to return home.

The building proactively addresses the mitigating environmental load

on the Earth by setting our energy reduction ratio target of approximately

45%. Accordingly, our environmental initiative for this building will receive the highest “Rank S” certification in the Comprehensive

Assessment System for Building Environment Efficiency (CASBEE) and the “AAA Evaluation,” the highest score in the Tokyo

Metropolitan Government’s energy efficiency labeling system.

Outline of NewCo ……………………………(1) Company name Dia Pharmaceutical Network Co., Ltd.(2) Location of headquarters Yashio City, Saitama Prefecture(3) Major businesses Trucking(4) Date of establishment November 1, 2011(5) Capital ¥100 million (the Company’s investment ratio: 70%)

Logo mark of NewCo

Nihonbashi Dia Building (Rendering)

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Overview of the Mitsubishi Logistics Group (As of March 31, 2012)

Mitsubishi Logistics Corporation

Logistics

Consolidated Subsidiaries (48 companies)

Subsidiaries and Af�liates Accounted for by the Equity Method (3 companies)

Real Estate

Tohoku Ryoso Transportation Co., Ltd.Sairyo Service Co., Ltd.Dia Pharmaceutical Network 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 209th fiscal term, the year ended March 31, 2012, the company marked with an asterisk (*) has been included as a consolidated subsidiary.

Note: Effective from the 209th fiscal term, the year ended March 31, 2012, the company marked with an asterisk (*) has been included as an affiliate accounted for by the equity method.

Nippon Container Terminals Co., Ltd.Kusatsu Soko Co., Ltd.Jupiter Global Limited*

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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The accompanying notes are an integral part of these statements.

March 31, March 31,

ASSETS 2012 2011 2012(Millions of yen) (Thousands of U.S. dollars)

(Note 1)

CURRENT ASSETS:

Cash and deposits (Notes 2 and 4) ¥23,813 ¥22,779 $ 289,731

Marketable securities (Notes 2, 4 and 5) 5,000 3,000 60,835

Notes and accounts receivable (Notes 3, 4 and 6) 44,320 32,339 539,238

Allowance for doubtful accounts (69) (77) (840)

44,251 32,262 538,398

Real estate held for sale 2,498 7,235 30,393

Deferred income taxes (Note 7) 2,050 2,189 24,942

Other 1,717 3,205 20,891

TOTAL CURRENT ASSETS 79,329 70,670 965,190

PROPERTY AND EQUIPMENT (Notes 9, 10 and 16):

Land 66,069 61,281 803,857

Buildings and structures 325,114 326,186 3,955,639

Machinery and equipment 30,521 30,383 371,347

Transportation equipment 7,929 8,013 96,472

Construction in progress 575 294 6,996

430,208 426,157 5,234,311

Less accumulated depreciation (257,468) (249,015) (3,132,595)

NET PROPERTY AND EQUIPMENT 172,740 177,142 2,101,716

INVESTMENTS AND OTHER ASSETS:

Investments in unconsolidated subsidiaries and affiliates 6,475 4,547 78,781

Investments in securities (Notes 4, 5 and 10) 72,729 75,716 884,889

Long-term loans receivable 835 851 10,159

Intangible assets 11,106 10,522 135,126

Goodwill 1,878 2,099 22,849


Other 5,202 5,704 63,292

Allowance for doubtful accounts (33) (26) (401)

TOTAL OTHER ASSETS 101,201 102,614 1,231,305

¥353,270 ¥350,426 $ 4,298,211

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LIABILITIES AND NET ASSETS March 31, March 31,

2012 2011 2012(Millions of yen) (Thousands of U.S. dollars)

(Note 1)

CURRENT LIABILITIES:

Short-term bank loans and current maturities of long-term

debt (Notes 4,10 and 11) ¥ 15,799 ¥ 20,328 $ 192,225

Notes and accounts payable (Notes 3, 4 and 5) 29,565 25,832 359,715

Income taxes payable 2,840 2,380 34,554

Allowance for loss on disaster – 601 –

Other (Notes 7 and 10) 3,898 4,253 47,427

TOTAL CURRENT LIABILITIES 52,102 53,394 633,921

LONG-TERM LIABILITIES:

Long-term debt, less current maturities (Notes 4,10 and 11) 37,991 31,188 462,234

Deposits on long-term leases (Notes 4, 6 and 10) 23,803 29,363 289,609

Retirement benefits (Note 12) 16,769 17,005 204,027


Other 322 353 3,918

TOTAL LONG-TERM LIABILITIES 89,632 91,225 1,090,546

TOTAL LIABILITIES 141,734 144,619 1,724,467

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 22,394 272,466

Capital surplus 19,618 19,618 238,691

Retained earnings 144,782 139,322 1,761,552

Treasury stock (696) (689) (8,468)

TOTAL SHAREHOLDERS’ EQUITY 186,098 180,645 2,264,241

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Net unrealized holding gains on securities 25,634 25,195 311,887

Foreign currency translation adjustments (2,128) (1,978) (25,891)

TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME 23,506 23,217 285,996

MINORITY INTERESTS 1,932 1,945 23,507

TOTAL NET ASSETS 211,536 205,807 2,573,744

¥ 353,270 ¥350,426 $ 4,298,211

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Year ended March 31, Year ended March 31,

2012 2011 2010 2012(Millions of yen) (Thousands of U.S. dollars)

(Note 1)

REVENUE ¥203,698 ¥175,880 ¥148,347 $ 2,478,379

COST OF SERVICES 181,645 155,832 131,768 2,210,062

Gross profit 22,053 20,048 16,579 268,317

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 9,520 7,884 6,298 115,829

Operating income 12,533 12,164 10,281 152,488

OTHER INCOME (EXPENSES):

Interest and dividend income 2,090 1,605 1,477 25,429

Interest expense (748) (741) (840) (9,101)

Gain on sale of marketable securities and investments

in securities– 12 120 –

Gain (loss) on revaluation of marketable securities and

investments in securities21 (437) (746) 256

Loss on disposal of property and equipment, net (315) (945) (320) (3,833)

Impairment loss (Note 14) (304) – (321) (3,699)

Equity in earnings of unconsolidated subsidiaries and

affiliates224 229 140 2,725

Indemnity income of exiting facilities for lease (Note 13) 303 – 40 3,687

Loss on earthquake disaster – (681) – –

Other, net (Note 12) (38) 233 440 (462)

1,233 (725) (10) 15,002

Income before income taxes and minority interests 13,766 11,439 10,271 167,490

INCOME TAXES (Note 7)

Current 5,331 4,744 4,746 64,862

Deferred 892 (354) (552) 10,853

6,223 4,390 4,194 75,715

Income before minority interests 7,543 7,049 6,077 91,775

MINORITY INTERESTS IN LOSSES (EARNINGS) OF

CONSOLIDATED SUBSIDIARIES 21 (76) 29 256

NET INCOME ¥ 7,564 ¥ 6,973 ¥ 6,106 $ 92,031

AMOUNTS PER SHARE: Yen U.S. dollars (Note 1)

Net income ¥ 43.16 ¥ 39.78 ¥ 34.82 $ 0.53

Cash dividends applicable to the year ¥ 12.00 ¥ 12.00 ¥ 12.00 $ 0.15

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(Note 1)

INCOME BEFORE MINORITY INTERESTS ¥ 7,543 ¥ 7,049 ¥ – $ 91,775

OTHER COMPREHENSIVE INCOME:

Valuation difference on available-for-sale securities 439 (5,240) – 5,341

Foreign currency translation adjustments (166) (372) – (2,020)

Share of other comprehensive income of affiliates

accounted for using the equity method11 (16) – 135

Total other comprehensive income (Note 8) 284 (5,628) – 3,456

COMPREHENSIVE INCOME (Note 8) ¥ 7,827 ¥ 1,421 ¥ – 95,231

Comprehensive income attributable to:

Comprehensive income attributable to owners of the parent ¥ 7,855 ¥ 1,353 ¥ – $ 95,571

Comprehensive income attributable to minority interests (28) 68 – (340)



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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, 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) ¥1,945Net income for the year – – – 7,564 – – – – –Cash dividends – – – (2,104) – – – – –Increase due to mergers of unconsolidated subsidiary – – – – – – – – –

Purchase of treasury stock – – – – (9) – – – –Sale of treasury stock – – 0 – 2 – – – –Adjustment from revaluation of available-for-sale securities – – – – – 439 – – –

Adjustment from translation of foreign currency financial statements – – – – – – – (150) –

Increase in minority interests – – – – – – – – (13)Balance at March 31, 2012 175,921 ¥22,394 ¥19,618 ¥144,782 ¥(696) ¥25,634 ¥ – ¥(2,128) ¥1,932

CommonStock

Capitalsurplus

Retainedearnings

Treasurystock

Net unrealizedholding gainson securities

Deferredlosses onhedges

Foreign currency

translationadjustments

Minorityinterests

(Thousands of U.S. dollars) (Note 1)Balance at March 31, 2011 $272,466 $238,691 $1,695,121 $(8,383) $306,546 $ – $(24,066) $23,665Net income for the year – – 92,031 – – – – –Cash dividends – – (25,600) – – – – –Increase due to mergers of unconsolidated subsidiary – – – – – – – –

Purchase of treasury stock – – – (110) – – – –Sale of treasury stock – 0 – 25 – – – –Adjustment from revaluation of available-for-sale securities – – – – 5,341 – – –

Adjustment from translation of foreign currency financial statements – – – – – – (1,825) –

Increase in minority interests – – – – – – – (158)Balance at March 31, 2012 $272,466 $238,691 $1,761,552 $(8,468) $311,887 $ – $(25,891) $23,507

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(Note 1)

CASH FLOWS FROM OPERATING ACTIVITIES:

Income before income taxes and minority interests ¥ 13,766 ¥11,439 ¥10,271 $ 167,490

Depreciation and amortization 13,568 13,654 12,091 165,081

Impairment loss 304 – 321 3,699

Decrease in retirement benefits (221) (851) (29) (2,689)

Loss (gain) on revaluation of marketable

securities and investments in securities(21) 437 746 (256)

Gain on sales of marketable securities and

investments in securities(4) (12) (106) (49)

Loss on disposal of property and equipment 187 252 135 2,275

Equity in earnings of unconsolidated subsidiaries and

affiliates(224) (229) (140) (2,725)

Interest and dividend income (2,090) (1,605) (1,477) (25,429)

Interest expense 748 741 840 9,101

Increase in notes and accounts receivable (11,626) (844) (836) (141,453)

Decrease (increase) in real estate held for sale 4,736 (3,535) (2,915) 57,623

Increase in notes and accounts payable 704 730 1,253 8,566

Decrease in deposits payable (1,644) (1,484) (287) (20,002)

Other, net (102) 1,041 (35) (1,242)

Subtotal 18,081 19,734 19,832 219,990

Interest and dividend income received in cash 2,168 1,628 1,503 26,378

Interest expense paid in cash (716) (722) (958) (8,712)

Income taxes paid in cash (4,902) (4,990) (4,492) (59,642)

NET CASH PROVIDED BY OPERATING ACTIVITIES 14,631 15,650 15,885 178,014

CASH FLOWS FROM INVESTING ACTIVITIES:

Cash investment to time deposits (684) (912) (521) (8,321)

Cash return from time deposits 647 644 289 7,872

Acquisition of property and equipment (11,547) (5,936) (23,065) (140,492)

Proceeds from sales of property and equipment 203 33 58 2,470

Acquisition of marketable securities and

investments in securities(1,699) (148) (404) (20,672)

Proceeds from sales of marketable securities and

investments in securities269 535 1,227 3,273

Acquisition of investments in subsidiaries

resulting in change in scope of consolidation– (8,006) – –

Payments for additional acquisition of subsidiaries’ shares – (427) – –

Other, net 332 (20) 45 4,039

NET CASH USED IN INVESTING ACTIVITIES (12,479) (14,237) (22,371) (151,831)

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(Note 1)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from short-term bank loans 2,246 7,510 1,985 27,327

Repayments of short-term bank loans (5,038) (4,052) (2,061) (61,297)

Proceeds from long-term debt 1,050 500 8,315 12,775

Repayments of long-term debt (989) (5,798) (3,023) (12,033)

Issue of bonds 10,000 – – 121,669

Redemption of bonds (5,000) – (10,000) (60,835)

Dividends paid (2,104) (2,104) (2,104) (25,599)

Other, net (172) (156) (83) (2,092)

NET CASH PROVIDED BY (USED IN)

FINANCING ACTIVITIES(7) (4,100) (6,971) (85)

Effect of exchange rate changes on cash and cash equivalents (77) (162) 26 (937)

NET INCREASE (DECREASE) IN CASH AND

CASH EQUIVALENTS2,068 (2,849) (13,431) 25,161

CASH AND CASH EQUIVALENTS AT

BEGINNING OF YEAR (Note 2)25,349 28,160 39,642 308,420

INCREASE IN CASH AND CASH EQUIVALENTS DUE TO:

Newly consolidated subsidiary at beginning of year – – 1,949 –

Merger’s of unconsolidated subsidiary – 38 – –

CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 2) ¥27,417 ¥25,349 ¥28,160 $333,581


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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 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, 2012, which was ¥82.19 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 Company holds 51% of voting rights of MLC ITL Logistics Company Limited, however, the other shareholder’s agreement is necessary to decide important policies of finance and trade. Therefore, the Company does not treat MLC ITL Logistics Company Limited as its subsidiary.

The number of consolidated subsidiaries and affiliates accounted for on the equity method at March 31, 2012, 2011 and 2010 was as follows:

March 31,

2012 2011 2010

Consolidated subsidiaries 48 47 36

Unconsolidated subsidiaries

and affiliates under the equity

method 3 2 2

Dia Pharmaceutical Network Co., Ltd., which the Company established in the current fiscal year, became a consolidated subsidiary.

The Company underwrote capital increase of Jupiter Global Limited through a third-party allotment of new shares. As a result, Jupiter Global Limited became an affiliate accounted for on the equity method.

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


NOTE 1 – SUMMARY OF ACCOUNTING POLICIES

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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 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, 2011, 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.


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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 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.

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.

ALLOWANCE FOR BONUSES FOR DIRECTORS

The Company provides allowance for bonuses for directors based on the estimated amounts of payment.

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 statements of income using the straight-line method over 5 to 16 years, beginning the following fiscal year of recognition. Prior services costs are recognized in statements of income using the straight-line method over 5 to 15 years.

(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 each entity’s rules.

NET ASSETS

Under the Japanese Corporate Law (“the Law”) 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 Law, legal earnings reserve and additional paid-in capital could be used to eliminate or reduce a deficit or could be capitalized by a resolution of the shareholders’ meeting.

Additional paid-in capital and legal earnings reserve may not be distributed as dividends. 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, 2012 include amounts representing year-end cash dividends of ¥1,052 million ($12,800 thousand), ¥6.0 ($0.07) per share, which were approved at the shareholders’ meeting held on June 28, 2012.

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PER SHARE INFORMATION

Net income per share is computed based upon the weighted average number of shares outstanding during each fiscal year.

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 is not disclosed as no shares which dilute net income per share are outstanding for the years ended March 31, 2012, 2011 and 2010.

ADDITIONAL INFORMATION

The Company and its consolidated domestic subsidiaries adopted “Accounting Standard for Accounting Changes and Error Corrections” (Accounting Standards Board of Japan (“ASBJ”) Statement No.24 issued on December 4, 2009) and “Guidance on Accounting Standard for Accounting Changes and Error Corrections” (ASBJ Guidance No.24, issued on December 4, 2009) for accounting changes and corrections of prior period errors which are made after April 1, 2011.


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, 2012 and 2011 were as follows:

March 31, March 31,


Cash and deposits ¥23,813 ¥22,779 $289,731

Add money funds invested in bonds and domestic certificates

of deposits 5,000 3,000 60,835

Less time deposits with maturities exceeding six months (1,417) (1,398) (17,241)

Current assets other (money deposited) 21 968 256

Cash and cash equivalents ¥27,417 ¥25,349 $333,581

NOTE 2 – CASH AND CASH EQUIVALENTS

As financial institutions in Japan were closed on March 31, 2012, notes receivable of ¥48 million ($584 thousand) and notes payable of ¥120 million ($1,460 thousand) were settled on the following business day, April 2, 2012 and accounted for accordingly.

NOTE 3 – EFFECT OF BANK HOLIDAY ON MARCH 31, 2012

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, a consolidated subsidiary utilizes interest rate swap contracts as hedging instruments for each loan contract to attempt to avoid such risk of a part of long-term debts.

NOTE 4 – FINANCIAL INSTRUMENTS

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It is prescribed that approval by the manager of each entity’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, 2012, 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, 2012 March 31, 2012

Bookvalue Fair value Difference


(Millions of yen) (Thousands of U.S. dollars)Assets

(1) Cash and deposits ¥ 23,813 ¥ 23,813 ¥ – $ 289,731 $ 289,731 $ –

(2) Notes and accounts receivable 41,623 41,623 – 506,424 506,424 –

(3) Marketable securities 5,000 5,000 – 60,835 60,835 –

(4) Investment in securities (available-for-sale securities) 70,395 70,395 – 856,491 856,491 –

¥ 140,831 ¥ 140,831 ¥ – $ 1,713,481 $ 1,713,481 $ –

Liabilities

(1) Notes and accounts payable ¥ 20,876 ¥ 20,876 ¥ – $ 253,997 $ 253,997 $ –

(2) Short-term bank loans 11,561 11,561 – 140,662 140,662 –

(3) Bonds 29,000 30,090 1,090 352,841 366,103 13,262

(4) Long-term debt *1 13,230 13,328 98 160,968 162,161 1,193

(5) Deposits on long-term leases 1,000 831 (169) 12,167 10,110 (2,057)

(6) Derivatives – – – – – –

¥ 75,667 ¥ 76,686 ¥ 1,019 $ 920,635 $ 933,033 $ 12,398

*1 This includes long-term loans payable due within one year.

March 31, 2011


(Millions of yen)Assets

(1) Cash and deposits ¥ 22,779 ¥ 22,779 ¥ –

(2) Notes and accounts receivable 30,107 30,107 –

(3) Marketable securities 3,000 3,000 –

(4) Investment in securities (available-for-sale securities) 73,144 73,144 –

¥ 129,030 ¥ 129,030 ¥ –

Liabilities

(1) Notes and accounts payable ¥ 19,374 ¥ 19,374 ¥ –

(2) Short-term bank loans 14,368 14,368 –

(3) Bonds*1 24,000 24,984 984

(4) Long-term debt*1 13,149 13,297 148

(5) Deposits on long-term leases 6,174 5,940 (234)

¥ 77,065 ¥ 77,963 ¥ 898

*1 These accounts include bonds and long-term loans payable due within one year.

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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 5 “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 debt

Long-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) Book value of the financial instruments on the consolidated balance sheets for which it is extremely difficult to determine fair values.

March 31, March 31,


Non-listed stocks*1 ¥ 8,700 ¥ 7,104 $105,852

Deposits on long-term leases*2 22,803 23,189 277,443

*1 Non-listed stocks are not included in “Assets (4) Investment in securities (available-for-sale securities)”, because they have no market price and it is extremely difficult to measure the fair values. Unconsolidated subsidiary stocks and affiliate stocks are included.*2 Deposits on long-term leases are not included in “Liabilities (5) Deposits on long-term leases”, because they cannot estimate the future cash flow and it is extremely difficult to measure the fair values.

(Note 3) The redemption schedule for money claim and securities with contractual maturities.

March 31, 2012Millions of yen

One year or less

One to five years

Five to ten years

Over ten years

Cash and deposits ¥23,813 ¥ – ¥ – ¥ –

Notes and accounts receivable 41,623 – – –

Marketable securities (Certificate of deposits) 5,000 – – –

Investment in securities

Available-for sale securities with maturities (public bonds) 10 67 – –

¥70,446 ¥67 ¥ – ¥ –

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One year or less

One to five years

Five to ten years

Over ten years

Cash and deposits ¥22,779 ¥ – ¥ – ¥ –





¥55,900 ¥77 ¥ – ¥ –

March 31, 2012Thousands of U.S. dollars

One year or less

One to five years

Five to ten years

Over ten years

Cash and deposits $289,731 $ – $ – $ –





$857,112 $815 $ – $ –

(Note 4) Repayment schedule of bonds, long-term debts and deposits on long-term leases.


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 ¥ 7,000 ¥ – ¥17,000

Long-term debt 4,239 4,862 1,024 581 769 1,755

Deposits on long-term leases – – – – – 1,000

¥ 4,239 ¥ 4,862 ¥6,024 ¥ 7,581 ¥ 769 ¥19,755


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

March 31, 2012Thousands 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 $ – $ – $ 60,835 $ 85,168 $ – $206,838

Long-term debt 51,575 59,156 12,459 7,069 9,356 21,353

Deposits on long-term leases – – – – – 12,167

$51,575 $ 59,156 $73,294 $92,237 $ 9,356 $240,358

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At March 31, 2012, acquisition costs, book values stated at fair values and net unrealized holding gains (losses) of available-for-sale securities were as follows:

March 31, 2012 March 31, 2012

Bookvalue

Acquisition cost

Unrealized holding gains

(losses)Bookvalue

Acquisition cost


(losses)(Millions of yen) (Thousands of U.S. dollars)

Securities with book values exceeding

acquisition costs:

Stocks ¥67,516 ¥27,056 ¥40,460 $821,462 $329,188 $492,274

Bonds 77 75 2 937 913 24

Other – – – – – –

67,593 27,131 40,462 822,399 330,101 492,298

Other securities:

Stocks 2,802 3,416 (614) 34,092 41,562 (7,470)

Bonds – – – – – –

Other – – – – – –

2,802 3,416 (614) 34,092 41,562 (7,470)

¥70,395 ¥30,547 ¥39,848 $856,491 $371,663 $484,828

Non-listed stocks and others (book value is ¥2,403 million ($29,237 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, 2012, the amount of sale, related gains and related losses of available-for-sale securities were as follows:

March 31, 2012 March 31, 2012

The amount of sale

Relatedgains

Related losses

The amount of sale

Relatedgains

Related losses

(Millions of yen) (Thousands of U.S. dollars)

Stocks ¥234 ¥4 ¥ – $2,847 $49 $ –

Bonds 14 – – 170 – –

Other 21 – – 256 – –

¥269 ¥4 ¥ – $3,273 $49 $ –

Total write-down of available-for-sale securities with available fair values amounted to ¥81 million ($986 thousand) in the year ended March 31, 2012.

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 – SECURITIES

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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

Bookvalue

Acquisitioncost


(losses)(Millions of yen)

Securities with book values exceeding acquisition costs:

Stocks ¥67,588 ¥24,102 ¥43,486

Bonds 91 88 3

Other – – –

67,679 24,190 43,489

Other securities:

Stocks 5,465 6,420 (955)

Bonds – – –

Other – – –

5,465 6,420 (955)

¥73,144 ¥30,610 ¥42,534

Non-listed stocks and others (book value is ¥2,634 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, 2011, the amount of sale, related gains and related losses of available-for-sale securities were as follows:

March 31, 2011

The amountof sale

Relatedgains

Relatedlosses

(Millions of yen)

Stocks ¥ 21 ¥ 2 ¥ 0

Bonds 514 10 –

Other – – –

¥535 ¥12 ¥ 0

Total write-down of available-for-sale securities with available fair values amounted to ¥234 million 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.

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NOTE 7 – 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, 2012, 2011 and 2010, respectively.

Reconciliation from the statutory tax rate to the effective tax rate for the year ended March 31, 2012 and 2011 were as follows:

March 31, 2011

2012 2011

Statutory tax rate 40.7% 40.7%

Entertainment expense etc.

not deductible for Japanese tax purposes1.3 1.3

Dividends etc.

not taxable for Japanese tax purposes(4.0) (3.5)

Inhabitant taxes 0.7 0.9

Write down of deferred income tax assets at end of period by tax

rate changes6.2 –

Other 0.3 (1.0)

Effective tax rate 45.2% 38.4%

Information on reconciliation of the tax rates for the years ended March 31, 2010 is 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.

NOTE 6 – RECEIVABLES FROM AND PAYABLES TO UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES

Significant receivables from and payables to unconsolidated subsidiaries and affiliates at March 31, 2012 and 2011 were as follows:

March 31, March 31,


Notes and accounts receivable ¥160 ¥ 197 $1,947

Notes and accounts payable ¥628 ¥ 946 $7,641

Deposits on long-term leases ¥512 ¥1,341 $6,229

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Significant components of the Company and its consolidated subsidiaries’ deferred income tax assets and liabilities as of March 31, 2012 and 2011 were as follows:

March 31, March 31,


Deferred income tax assets:

Accrued enterprise tax ¥ 227 ¥ 218 $ 2,763

Loss on investments in securities 59 109 718

Allowance for doubtful accounts 19 31 231

Accrued employees’ bonuses 1,109 1,189 13,493

Retirement benefits 5,833 6,619 70,970

Depreciation 5,795 5,978 70,507

Impairment loss 3,052 3,491 37,133

Other 2,596 3,547 31,585

18,690 21,182 227,400

Valuation allowance (1,194) (1,430) (14,528)

Total deferred income tax assets 17,496 19,752 212,872

Deferred income tax liabilities:

Net unrealized holding gains on securities (14,169) (17,294) (172,393)

Reserves deductible for Japanese tax purposes (8,617) (9,924) (104,842)

Other (404) (466) (4,916)

Total deferred income tax liabilities (23,190) (27,684) (282,151)

Net deferred income tax liabilities ¥ (5,694) ¥ (7,932) $ (69,279)

The “Act for Partial Revision of the Income Tax Act, etc. for the Purpose of Creating a Taxation System that Responds to Changes in Economic and Social Structures” and the “Act on Special Measures for Securing the Financial Resources Necessary to Implement Measures for Reconstruction Following the Great East Japan Earthquake” were promulgated in Japan on December 2, 2011. Accordingly the statutory income tax rates utilized for the measurement of deferred tax assets and liabilities expected to be settled or realized from April 1, 2012 to March 31, 2015 and on or after April 1, 2015 were changed from 40.7% to 38.0% and 35.6%, respectively. As a result of this change, net deferred tax liabilities decreased by ¥1,172 million ($14,260 thousand) as of March 31,2012 and net unrealized holding gains on securities as of March 31,2012 and deferred income tax expense recognized for the year then ended increased by ¥2,027 million ($24,662 thousand) and ¥855 million ($10,403 thousand), respectively.

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NOTE 8 – STATEMENTS OF COMPREHENSIVE INCOME

Amounts reclassified to net income in the current period that were recognized in other comprehensive income in the current or previous periods and tax effects for each component of other comprehensive income are as follows:

Year ended March 31, 2012

Millions of yen Thousands of U.S. dollars

Valuation difference on available-for-sale securities

Decrease during the year ¥(2,767) $(33,666)

Reclassification adjustments 81 986

Sub-total, before tax (2,686) (32,680)

Tax (expense) or benefit 3,125 38,021

Sub-total, net of tax 439 5,341

Foreign currency translation adjustments

Decrease during the year (166) (2,020)

Share of other comprehensive income of

affiliates accounted for using the equity method

Increase during the year 11 135

Total other comprehensive income ¥ 284 $ 3,456


NOTE 9 – INVESTMENT AND RENTAL PROPERTY

For the year ended March 31, 2012The 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, 2012, the profit and loss concerning investment and rental property is composed of lease profit ¥10,026 million ($121,986 thousand), subsidy income ¥210 million ($2,555 thousand), indemnity income of exiting facilities for lease ¥298 million ($3,626 thousand) and loss on disposal of property and equipment ¥135 million ($1,643 thousand).

Information about fair value of investment and rental property included in the consolidated financial statement at March 31, 2012, was as follows:

Book value Fair valueMarch 31, 2011 Increase/(Decrease) March 31, 2012 March 31, 2012

(Millions of yen)¥83,869 ¥(5,147) ¥78,722 ¥250,889


(Thousands of U.S. dollars)$1,020,428 $(62,623) $957,805 $3,052,549

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 ¥1,562 million ($19,005 thousand), and the main factor of decrease was depreciation ¥7,357 million ($89,512 thousand).

3. Fair value as of March 31, 2012, is the amount that is mainly based on the evaluation document by a real estate appraiser outside the Company.

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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, subsidy income ¥201 million, loss on disposal of property and equipment ¥367 million and loss on earthquake disaster ¥268 million.

Information about fair value of investment and rental property included in the consolidated financial statement at March 31, 2011, was as follows:


(Millions of yen)¥88,860 ¥(4,991) ¥83,869 ¥266,815

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, and the main factor of decrease was depreciation ¥7,689 million.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.

NOTE 10 – PLEDGED ASSETS

The net book value of pledged assets at March 31, 2012 and 2011 was as follows:

March 31, March 31,


Land ¥1,085 ¥1,104 $13,201

Buildings and structures 544 640 6,619

Investments in securities 67 87 815

¥1,696 ¥1,831 $20,635

Liabilities secured by the pledged assets mentioned above at March 31, 2012 and 2011 were as follows:

March 31, March 31,


Short-term bank loans ¥ 950 ¥ 963 $ 11,559

Other in current liabilities 576 608 7,008

Long-term debt 6,618 6,726 80,521

Deposits on long-term leases 1,638 1,797 19,929

¥9,782 ¥10,094 $119,017

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Short-term bank loans outstanding at March 31, 2012 and 2011 were ¥11,561 million ($140,662 thousand) and ¥14,368 million, respectively, and generally represented by short-term bank loans with interest at annual rates of 0.43% to 4.02% and 0.43% to 10.75%, respectively.

Long-term debt at March 31, 2012 and 2011 consisted of the following:

March 31, March 31,


Loans from banks, insurance companies and other in

generally secured, 0. 53%-2.55% and 0.53%-3.4418%

per annum

¥13,230 ¥13,149 $160,968

Balance in lease obligations 392 404 4,769

1.17% yen bonds due 2011, unsecured – 5,000 –

1.67% yen bonds due 2014, unsecured 5,000 5,000 60,835



0.933% year bonds due 2019, unsecured 5,000 – 60,835

1.230% yen bonds due 2021, unsecured 5,000 – 60,835

42,622 37,553 518,580

Less current portion (4,402) (6,102) (53,559)

¥38,220 ¥31,451 $465,021

The aggregate annual maturities of long-term debt at March 31, 2012 were as follows:

Year ending March 31, Amount(Millions of yen) (Thousands of U.S. dollars)

2013 ¥ 4,239 $ 51,575

2014 4,862 59,156

2015 1,024 12,459

2016 581 7,069

2017 769 9,356

2018 and thereafter 1,755 21,353

¥13,230 $160,968

The aggregate annual maturities of lease obligation at March 31, 2012 were as follows:

Year ending March 31, Amount(Millions of yen) (Thousands of U.S. dollars)

2013 ¥163 $1,983

2014 120 1,460

2015 62 754

2016 35 426

2017 12 146

2018 and thereafter – –

¥392 $4,769

NOTE 11 – SHORT-TERM BANK LOANS AND LONG-TERM DEBT

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NOTE 12 – RETIREMENT BENEFITS AND PENSION PLAN

The liabilities for retirement benefits included in the liability section of the consolidated balance sheets as of March 31, 2012 and 2011 consists of the following:

March 31, March 31,


Projected benefit obligation ¥26,610 ¥28,273 $323,762

Less fair value of pension assets (9,566) (11,633) (116,389)

Unfunded projected benefit obligation 17,044 16,640 207,373

Unrecognized net actuarial loss (1,084) (578) (13,189)

Unrecognized prior service costs 452 571 5,500

Employees’ retirement benefits 16,412 16,633 199,684

Retirement benefits to directors and corporate

statutory auditors357 372 4,343

Liability for retirement benefits ¥16,769 ¥17,005 $204,027

Included in the consolidated statements of income for the years ended March 31, 2012, 2011 and 2010 are severance and retirement benefit expenses for employees comprising of the following:



Service costs-benefits earned during the year ¥1,209 ¥1,155 ¥ 984 $14,710

Interest cost on projected benefit obligation 556 485 420 6,765

Expected return on pension assets (223) (190) (149) (2,713)

Amortization of actuarial gains and losses 216 (44) 106 2,628

Amortization of prior service costs (166) (163) (82) (2,020)

Contributions to defined contribution plans 133 127 73 1,618

Severance and retirement benefit expenses for employees ¥1,725 ¥1,370 ¥1,352 $20,988

The discount rate and the rate of expected return on pension assets used by the Company and its consolidated subsidiaries are 1.7-2.5% and 2.0-2.5% for 2012, 2.5% and 2.0-2.5% for 2011, 2.5% and 2.0% for 2010, 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.

Fuji Logistics Co., Ltd. participated in Fuji Electric’s corporate pension fund at the end of March, 2012. A part of the fund

employed certain fund management services of AIJ Investment Advisors Co., Ltd. At this time, it has turned out that the majority of the

funds under management are missing. The Company made a reasonable estimate of the amount of the pension funds expected to have

been lost and recorded an extraordinary loss of ¥218 million ($2,652 thousand).

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Indemnity income of existing facilities for lease represents mainly income from cancellation of equipment leases in real estate facilities for the year ended March 31, 2012. For the year ended March 31, 2010, that represents mainly income from cancellation of leased real estate facilities and commercial facilities by tenants.

NOTE 13 – INDEMNITY INCOME OF EXITING FACILITIES FOR LEASE

NOTE 14 – IMPAIRMENT LOSS

The impairment loss for the year ended March 31, 2012 and 2010 consists of the following:March 31, 2012

Asset group Location Asset type Millions of yen Thousands of U.S. dollar

Warehouse facilities Hakata, Fukuoka CityBuildings, structures

and others¥304 $3,699

March 31, 2010Asset group Location Asset type Millions of yen

Commercial facilities for rent

Takasago City, Hyogo Prefecture

Land, building and others

¥321

As of March 31, 2012 and 2010, 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, 2012, the Company and its consolidated subsidiaries recognized the impairment loss amounting to ¥304 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.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.

At March 31, 2012 and 2011, the balances of guarantee for loans amounted to ¥2,615 million ($31,817 thousand) and ¥2,774 million, respectively.

NOTE 15 – CONTINGENT LIABILITIES

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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,


Machinery and equipment and other

Purchase price equivalents ¥657 ¥1,219 $7,994

Accumulated depreciation equivalents 587 963 7,142

Book value equivalents ¥ 70 ¥ 256 $ 852

Purchase price equivalents were calculated using the inclusive-of-interest method.

(b) Lease commitments

March 31, March 31,


Due within one year ¥63 ¥189 $767

Due after one year 7 67 85

¥70 ¥256 $852

Lease commitments as lessee were calculated using the inclusive-of-interest method.

(c) Lease payments and Depreciation equivalents



Lease payments ¥200 ¥300 ¥367 $2,433

Depreciation equivalents ¥200 ¥300 ¥367 $2,433

(d) Calculation method of depreciation equivalents

Depreciation 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,


Buildings and structures and other

Purchase price ¥3,382 ¥3,382 $41,149

Accumulated depreciation 2,021 1,892 24,590

Book value ¥1,361 ¥1,490 $16,559

NOTE 16 – LEASE TRANSACTIONS

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(b) Lease commitments

March 31, March 31,


Due within one year ¥ 145 ¥ 138 $ 1,764

Due after one year 1,911 2,056 23,251

¥2,056 ¥2,194 $25,015

(c) Rental income, Depreciation and Interest income equivalents



Rental income ¥275 ¥275 ¥294 $3,346

Depreciation ¥129 ¥134 ¥148 $1,570

Interest income equivalents ¥137 ¥144 ¥151 $1,667

(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, 2012 and 2011 were as follows:

March 31, March 31,


Due within one year ¥ 2,970 ¥ 3,104 $ 36,136


¥15,806 ¥18,409 $192,311

(LESSOR LEASES)Future minimum lease receipts under non-cancelable operating lease as of March 31, 2012 and 2011 were as follows:

March 31, March 31,


Due within one year ¥13,387 ¥14,420 $162,879


¥35,316 ¥36,185 $429,687

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NOTE 17 – DERIVATIVE TRANSACTIONS

1. Derivative transactions to which hedge accounting is not applied at March 31, 2012 and 2011None

2. Derivative transactions to which hedge accounting is applied at March 31, 2012 and 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 derivatives

Type of transaction : Interest rate swap, receive floating, pay fixedMajor hedged items : Long-term debt

March 31, March 31,


Notional amount ¥660 ¥780 $8,030

Portion due after one year included herein ¥240 ¥660 $2,920

Fair value (Note) – – –

Note: 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.

Type and number of shares outstanding and treasury stock for the years ended March 31, 2012 and 2011 were as follows:

Shares outstanding Treasury stock

Type of shares Common stock Common stockNumber of shares: (Shares)


Balance at beginning of year 175,921,478 632,099

Increased in the accounting period – 9,722

Decreased in the accounting period – (1,217)

Balance at end of year 175,921,478 640,604


Balance at beginning of year 175,921,478 599,657

Increased in the accounting period – 33,895

Decreased in the accounting period – (1,453)

Balance at end of year 175,921,478 632,099

NOTE 18 – CHANGES IN NET ASSETS

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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, 2012 was as follows:

Approvals by Ordinary general shareholders meeting The Board of Directors meeting

Approval date June 29, 2011 October 31, 2011

Type of shares Common stock Common stock

Total amount of dividends ¥1,052 million ($12,800 thousand) ¥1,052 million ($12,800 thousand)

Dividends per share ¥6.0 ($0.07) ¥6.0 ($0.07)

Record date March 31, 2011 September 30, 2011

Effective date June 30, 2011 December 1, 2011

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 ¥1,052 million

Dividends per share ¥6.0 ¥6.0

Record date March 31, 2010 September 30, 2010

Effective date June 30, 2010 December 2, 2010

(b) Dividends whose record date is attributable to the accounting period ended March 31, 2012 but to be effective after the said accounting period were as follows:

Approvals by Ordinary general shareholders meeting

Approval date June 28, 2012

Type of shares Common stock

Funds for dividends Retained earnings

Total amount of dividends ¥1,052 million ($12,800 thousand)

Dividends per share ¥6.0 ($0.07)

Record date March 31, 2012

Effective date June 29, 2012

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For the year ended March 31, 2012 and 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, 2012, is as follows:

March 31, 2012

Logistics Real estate Total Adjustment *1 Consolidated *2(Millions of yen)

Revenues:

Non-affiliated customer ¥ 157,925 ¥ 45,773 ¥ 203,698 ¥ – ¥ 203,698

Intersegment 391 1,304 1,695 (1,695) –

158,316 47,077 205,393 (1,695) 203,698

Segment income 5,020 11,620 16,640 (4,107) 12,533

Segment assets ¥ 162,929 ¥ 101,586 ¥ 264,515 ¥ 88,755 ¥ 353,270

Depreciation and amortization ¥ 5,835 ¥ 7,526 ¥ 13,361 ¥ 207 ¥ 13,568

Amortization of goodwill ¥ 220 ¥ – ¥ 220 ¥ – ¥ 220Investments in affiliates accounted for by the equity

method¥ 5,571 ¥ – ¥ 5,571 ¥ – ¥ 5,571

Impairment loss ¥ 304 ¥ – ¥ 304 ¥ – ¥ 304

Increase in tangible and intangible fixed assets ¥ 9,007 ¥ 1,868 ¥ 10,875 ¥ 74 ¥ 10,949

NOTE 19 – SEGMENT INFORMATION

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March 31, 2012

Logistics Real estate Total Adjustment *1 Consolidated *2(Thousands of U.S. dollars)

Revenues:

Non-affiliated customer $ 1,921,462 $ 556,917 $ 2,478,379 $ – $ 2,478,379

Intersegment 4,757 15,866 20,623 (20,623) –

1,926,219 572,783 2,499,002 (20,623) 2,478,379

Segment income 61,078 141,380 202,458 (49,970) 152,488

Segment assets $ 1,982,346 $ 1,235,990 $ 3,218,336 $ 1,079,875 $ 4,298,211

Depreciation and amortization $ 70,994 $ 91,568 $ 162,562 $ 2,519 $ 165,081

Amortization of goodwill $ 2,677 $ – $ 2,677 $ – $ 2,677Investments in affiliates accounted for by the equity

method$ 67,782 $ – $ 67,782 $ – $ 67,782

Impairment loss $ 3,699 $ – $ 3,699 $ – $ 3,699

Increase in tangible and intangible fixed assets $ 109,587 $ 22,728 $ 132,315 $ 901 $ 133,216

*1 The adjustments are as follows; (1) The adjustments of negative ¥4,107 million ($49,970 thousand) in segment income include inter-segment eliminations of

¥28 million ($340 thousand) and corporate expenses of negative ¥4,135 million ($50,310 thousand) not distributed to any reportable segments. The corporate expenses are mainly general and administrative expenses not attributable to any reportable segments.

(2) The adjustments of ¥88,755 million ($1,079,875 thousand) in segment assets are corporate assets not distributed to any reportable segments. The corporate assets mainly consist of surplus funds (cash and marketable securities), long-term investments (investments in securities), and assets which belong to the administrative department of the Company.

(3) The adjustments of ¥74 million ($901 thousand) for increase of property, plant and equipment and intangible assets mainly consist of the capital investment for the administrative department of the Company.

*2 Segment income is reconciled to operating income described in the consolidated statement of income.

Reportable segment information for the year ended March 31, 2011, is as follows:

March 31, 2011

Logistics Real estate Total Adjustment *1 Consolidated *2(Millions of yen)

Revenues:


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


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

*1 The adjustments are as follows; (1) The adjustments of negative ¥3,917 million in segment income include inter-segment eliminations of ¥30 million and

corporate expenses of negative ¥3,947 million not distributed to any reportable segments. The corporate expenses are mainly general and administrative expenses not attributable to any reportable segments.

(2) The adjustments of ¥90,089 million in segment assets are corporate assets not distributed to any reportable segments. The corporate assets mainly consist of surplus funds (cash and marketable securities), long-term investments (investments in securities), and assets which belong to the administrative department of the Company.

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(3) The adjustments of ¥124 million for increase of property, plant and equipment and intangible assets mainly consist of the capital investment for the head office and others.

*2 Segment income is reconciled to operating income described in the consolidated statements of income.

Segment information for the years ended March 31, 2010 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 is shown in “For the years ended March 31, 2010”.

4. Impairment loss by reportable segment

March 31, 2012

Logistics Real estate Total Adjustment Consolidated(Millions of yen)

Impairment loss ¥ 304 ¥ – ¥ 304 ¥ – ¥ 304

March 31, 2012

Logistics Real estate Total Adjustment Consolidated(Thousands of U.S. dollars)

Impairment loss $ 3,699 $ – $ 3,699 $ – $ 3,699

5. Amortization and unamortized balance of goodwill by reportable segment

March 31, 2012


Amortization of goodwill ¥ 220 ¥ – ¥ 220 ¥ – ¥ 220

Unamortized balance ¥ 1,878 ¥ – ¥ 1,878 ¥ – ¥ 1,878

March 31, 2011


Amortization of goodwill ¥ 106 ¥ – ¥ 106 ¥ – ¥ 106

Unamortized balance ¥ 2,099 ¥ – ¥ 2,099 ¥ – ¥ 2,099

March 31, 2012

Logistics Real estate Total Adjustment Consolidated(Thousands of U.S. dollars)

Amortization of goodwill $ 2,677 $ – $ 2,677 $ – $ 2,677

Unamortized balance $ 22,849 $ – $ 22,849 $ – $ 22,849

For the years ended March 31, 2010The 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 was as follows:

March 31, 2010

Logistics Real estate Total

Elimination or corporate assets

or expenses Consolidated(Millions of yen)

Revenues:


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


Impairment loss ¥ – ¥ 321 ¥ 321 ¥ – ¥ 321

Capital expenditures ¥ 1,704 ¥ 21,507 ¥ 23,211 ¥ 34 ¥ 23,245

Geographical information and overseas revenue were omitted as they were immaterial to the consolidated financial statements.

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Company Profile (As of March 31, 2012)

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 830 persons (parent only; not including 162 employees temporarily on loan to other companies. There are also 75 temporary employees, as well as 585 persons temporarily loaned or dispatched within the Group and those from outside the Group companies and accepted by the Company)

4,386 persons (on a consolidated basis; not including 63 employees temporarily on loan to companies outside the Group. There are also 1,277 temporary employees, as well as 1,031 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) 11,862 6.8The Master Trust Bank of Japan, Ltd. (trust account) 10,058 5.7Meiji Yasuda Life Insurance Company 9,707 5.5Tokio Marine & Nichido Fire Insurance Co., Ltd. 7,775 4.4MITSUBISHI ESTATE CO., LTD. 7,331 4.2Kirin Holdings Company, Limited 6,921 3.9The Bank of Tokyo-Mitsubishi UFJ, Ltd. 3,728 2.1ASAHI GLASS CO., LTD. 3,315 1.9Mitsubishi Corporation 3,205 1.8Takenaka Corporation 3,010 1.7

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 (571,403 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 28, 2012)Position Name Responsibilities and/or Primary OccupationChairman of the Board Naoshi BanPresident* Tetsuro OkamotoManaging Director Makoto Sakaizawa Responsible for Technical, Harbor Transportation and Real Estate BusinessesManaging Director Koji Yoneyama Responsible for International Transportation BusinessManaging Director Yuichi Hashimoto Responsible for Accounting & Financing, Information System, and Internal AuditManaging Director Yoshinori Watabe Responsible for Warehousing & Distribution BusinessManaging Director* Akio Matsui Responsible for General Affairs, Corporate Communications, Personnel, and Planning; and General Manager, Personnel DivisionDirector 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 Masato Hoki General Manager, Yokohama BranchDirector Kazuhiko Takayama General Manager, Nagoya BranchDirector Takanori Miyazaki General Manager, Kobe 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

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To Our Shareholders

Topics

Overview of the Mitsubishi Logistics Group

Independent Auditor’s Report







Company Pro�le

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ANNUAL REPORT 2012Year ended March 31, 2012

Tokyo Dia Building 28-38, Shinkawa, 1-chome, Chuo-ku, Tokyo 104-0033 Japan http://www.mitsubishi-logistics.co.jp

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Documents

ANNUAL REPORT 2012 · 2013. 7. 18. · 37 Company Profile (As of March 31, 2012) Headquarters and Branches Headquarters: Chuo-ku, Tokyo Branches: Tokyo, Yokohama, Nagoya, Osaka, Kobe