Japan Transcity Corporation
Consolidated Financial Statements
March 31, 2011 and 2010

Independent Auditors' Report

To the Board of Directors of Japan Transcity Corporation :We have audited the accompanying consolidated balance sheets of Japan Transcity Corporation and its
consolidated subsidiaries as of March 31, 2011 and 2010, and the related consolidated statements ofincome, comprehensive income, changes in net assets and cash flows for the years then ended
expressed in Japanese yen. These consolidated financial statements are the responsibility of theCompany’s management. Our responsibility is to independently express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonablebasis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Japan Transcity Corporation and its consolidated subsidiaries as ofMarch 31, 2011 and 2010, and the results of their operations and their cash flows for the years thenended, in conformity with accounting principles generally accepted in Japan.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to theyear ended March 31, 2011 are presented solely for convenience. Our audit also included thetranslation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has been
made on the basis described in Note 1 to the consolidated financial statements.

KPMG AZSA LLC
Nagoya, Japan
June 29, 2011

Japan Transcity Corporation and Consolidated Subsidiaries
Consolidated Balance Sheets
March 31, 2011 and 2010

Millions of yen
2011
2010
Current assets:
Cash and cash equivalents (Note 3)
Short-term investments (Notes 3, 4 and 5)
Trade receivables (Note 3) :Notes
Accounts
Allowance for doubtful accounts¥

Inventories
Deferred tax assets (Note 10)
Other current assets
Total current assets

Property and equipment (Note 5):Land
Buildings and structures
Machinery and equipment
Vehicles and vessels
Construction in progress
Total property and equipment
Less accumulated depreciation
Net property and equipment

Investments and other assets:
Investment securities (Notes 3, 4 and 5)
Investments in unconsolidated subsidiaries andaffiliates
Deferred tax assets (Note 10)
Lease deposits
Other assets
Allowance for doubtful accounts
Total investments and other assets

Total assets¥

11,457431

10,878395$

138,036
5,193

508
12,035(17)
12,52696
477
1,453
26,440545
11,732(23)
12,25496480
1,333
25,436

6,121
145,000(205)
150,916
1,156
5,747
17,506
318,554

30,13847,714
11,945
6,857
96,654(48,332)
48,32230,15047,07011,981
6,922
34
96,157(46,269)
49,888363,108
574,868
143,916
82,614
1,164,506(582,313)
582,193

5,104

5,728

61,494

4,396
639
956
2,655
(14)
13,736

3,937
621
931
2,021
(16)
13,222

52,964
7,699
11,51831,988(169)
165,494

88,498See accompanying Notes to Consolidated Financial Statements.

-2-¥

Thousands of
U.S. dollars
2011¥

88,546$

1,066,241

Millions of yen
2011
2010
Current liabilities:
Short-term borrowings (Notes 3 and 5)¥
Current maturities of long-term debt (Notes 3 and 5)
Trade payables (Note 3) :Notes
Accounts
Accrued expenses
Income taxes payable
Other current liabilities
Total current liabilities
Long-term debt (Notes 3 and 5)
Employee retirement benefit liability (Note 6)
Guarantee deposits received (Note 3)
Deferred tax liabilities for revaluation
Deferred tax liabilities (Note 10)
Accrued severance indemnities for directors andcorporate auditors
Other long-term liabilities
Total liabilities
Commitments and contingent liabilities (Notes 8 and 9)
Net assets (Note 7):
Shareholders’ equity:
Common stock: 240,000,000 shares authorized
and 67,142,417 shares issued
Capital surplus
Retained earnings
Less treasury stock, at cost: 2,446,140 shares in2011 and 2,179,265 shares in 2010
Total shareholders’ equity
Accumulated other comprehensive income:Net unrealized gains on available-for-salesecurities
Land revaluation decrement
Foreign currency translation adjustment
Total accumulated othercomprehensive income
Minority interests
Total net assets
Total liabilities and net assets

¥

-3-

3,751
885

¥

4,058
3,599

Thousands of
U.S. dollars
2011$

45,193
10,663

1,293
6,211
7,504
1,612
705
1,429
15,886

1,135
5,861
6,996
1,530
844
1,552
18,57915,57874,83190,40919,422
8,494
17,217
191,398

22,833
1,666
3,807
5,277
773

21,220
1,853
3,935
5,281
883

275,096
20,07245,86863,578
9,313

40
579
50,86143
540
52,334482
6,976
612,783

8,428
6,734
24,3398,428
6,735
22,458

101,542
81,133
293,241(1,015)38,486(944)
36,677(12,229)
463,687267(2,024)(158)

642(2,019)
(110)

3,217
(24,385)(1,904)(1,915)
1,066
37,637(1,487)
1,022
36,212(23,072)
12,843
453,458

88,498¥88,546$

1,066,241

Japan Transcity Corporation and Consolidated Subsidiaries
Consolidated Statements of Income
For the Years Ended March 31, 2011 and 2010

Operating revenue (Note 12)¥

Operating costs and expenses(Notes 6 and 9)
Operating income

Millions of yen
2011
2010

Thousands of
U.S. dollars
2011

80,854$¥76,446974,145

77,001
3,853

73,0793,367

927,723
46,422

196
(378)

205
(388)

2,361
(4,554)

561

289

6,759

(179)
(79)
(113)
8

(89)
80
97

(2,156)(952)(1,362)
96

3,861

3,464

46,518

Income taxes:
Current
Deferred
Total income taxes

1,241
125
1,366

1,074
292
1,366

14,952
1,506
16,458

Income before minority interests

2,495

2,098

30,060

68

21

819

Other income (expenses):
Interest and dividend income
Interest expenses
Equity in net earnings of unconsolidated
subsidiaries and affiliates
Loss on sale or disposal of property andequipment
Impairment loss on fixed assets (Note 2(i))
Other, net
Income before income taxes andminority interests

Less minority interests in net income of
consolidated subsidiaries
Net income

¥

2,427

¥

2,077

$

Yen
Per share:
Net income:-BasicCash dividends

¥

37.43
8.50

See accompanying Notes to Consolidated Financial Statements.

-4-¥

29,241

U.S. dollars

31.98
8.50

$

0.45
0.10

Japan Transcity Corporation and Consolidated Subsidiaries
Consolidated Statements of Comprehensive Income
For the Years Ended March 31, 2011 and 2010

Millions of yen
2011
2010
Income before minority interests
Other comprehensive income:Net unrealized gains on available-for-salesecurities
Foreign currency translation adjustment
Share of other comprehensive income ofassociates accounted for using equity
methodTotal other comprehensive income
Comprehensive income

Comprehensive income attributable to:
Owners of the Company
Minority interests

¥

¥

¥

2,495

2,098

$

30,060

(378)
(57)

200
66

(4,554)
(687)

(0)
(435)
2,060

0
266
2,364

(0)
(5,241)
24,8192,004
56

See accompanying Notes to Consolidated Financial Statements.

-5-¥

Thousands of
U.S. dollars
2011

¥

¥

2,322
42

$

$

24,144675

Japan Transcity Corporation and Consolidated Subsidiaries
Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2011 and 2010
Shareholders' equity
Number ofshares ofcommonstock issued

Balance at March 31, 2009
Net income for the year
Cash dividends
Purchase of treasury stock and fractional shares, net
Net changes other than shareholders’ equity
Balance at March 31, 2010
Net income for the year
Cash dividends
Purchase of treasury stock and fractional shares, net
Reversal of land revaluation decrement
Net changes other than shareholders’ equity
Balance at March 31, 2011

67,142,417
67,142,417
67,142,417

Common
stock

¥

¥

8,428
8,428
8,428

Capitalsurplus¥¥6,735 ¥
6,735
(1)
6,734 ¥

Retainedearnings

20,933
2,077(552)
22,458
2,427
(551)
5
24,339

Accumulated other comprehensive income
Total
accumulated
Foreign
Net unrealizedothercurrencyLand
Total
gains onTreasury shareholders’ available-for- revaluationtranslation comprehensive
incomeadjustment
stock
equitysale securities decrement
Millions of yen

¥

¥

(941)
(3)
(944)
(71)
(1,015)¥¥35,155
2,077
(552)
(3)
36,677
2,427
(551)
(72)
5
38,486

¥

¥

444
198
642
(375)
267

¥

(2,019)(2,019)(5)(2,024)¥$ (24,325)(60)$ (24,385)

$

¥

¥

(156)
46
(110)
(48)
(158)

¥

(1,326)(578)(1,904)$¥

Minority
interests(1,731)244(1,487)(428)(1,915)¥(17,916)(5,156)(23,072)$¥

Total net
assets

1,021
1
1,022
44
1,066

¥

12,313530
12,843$ 436,289
29,241(6,639)(867)
60(4,626)$ 453,458¥

34,445
2,077
(552)
(3)
245
36,212
2,427
(551)
(72)
5
(384)
37,637

Thousands of U.S. dollars
Balance at March 31, 2010
Net income for the year
Cash dividends
Purchase of treasury stock and fractional shares, net
Reversal of land revaluation decrement
Net changes other than shareholders’ equity
Balance at March 31, 2011

$ 101,542$ 101,542$$

81,145 $ 270,579
29,241(6,639)(12)
60
81,133 $ 293,241$ (11,374)(855)$ (12,229)

See accompanying Notes to Consolidated Financial Statements.

-6-$ 441,892
29,241(6,639)(867)
60$ 463,687

$

$

7,735
(4,518)
3,217

$

$

$

Japan Transcity Corporation and Consolidated Subsidiaries
Consolidated Statements of Cash Flows
For the Years Ended March 31, 2011 and 2010

Millions of yen
2011
2010
Cash flows from operating activities:
Income before income taxes and minority interests
Adjustments for:
Depreciation
Net reversal of employee retirement benefit liability
Loss on sale or disposal of property and equipment
Impairment loss on fixed assets
Increase in trade receivables(Increase) decrease in inventories
Increase in trade payables
Increase in prepaid pension cost
Other, net
Sub-totalInterest and dividend received
Interest paid
Income taxes paid
Net cash provided by operating activities

¥

3,861

¥

3,464

Thousands of
U.S. dollars
2011$

46,518

2,880
(186)
179
79
(315)
(0)
435
(456)
(831)
5,646
280
(380)
(1,364)
4,182

3,121
(164)
89
(1,281)
22
852
(332)
(189)
5,582
248
(388)
(378)
5,064

34,699(2,241)
2,156
952(3,795)(0)
5,241(5,494)(10,012)68,024
3,374(4,578)(16,434)
50,386

Cash flows from investing activities:
Increase in property and equipment and intangible assets
Decrease in property and equipment and intangible assets
Increase in investments in subsidiaries
Increase in short-term investments
Other, net
Net cash used in investing activities(1,360)
26
(1)
(39)
(57)
(1,431)(2,771)
138
(10)
(141)
(325)
(3,109)(16,385)
313
(12)
(470)
(687)
(17,241)

Cash flows from financing activities:
Increase in long-term debt
Repayment of long-term debt
Redemption of bonds(Decrease) increase in short-term borrowings
Purchase of treasury stock and fractional shares, net
Dividends paid
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

2,500
(3,599)
(307)
(72)
(551)
(112)
(2,141)(31)
579
10,87811,4572,000(2,073)(1,500)
397
(3)
(552)
(83)
(1,814)35
176
10,702
10,87830,120(43,361)(3,699)(867)(6,639)(1,349)(25,795)
(374)
6,976
131,060
138,036¥

See accompanying Notes to Consolidated Financial Statements.

-7-

¥

$

Japan Transcity Corporation and Consolidated Subsidiaries
Notes to Consolidated Financial Statements

1. Basis of Consolidated Financial Statements
The accompanying consolidated financial statements of Japan Transcity Corporation (the“Company”) and its consolidated subsidiaries (together with the Company, the “Japan Transcity
Group”) have been prepared in accordance with the provisions set forth in the Financial Instrumentand Exchange Law of Japan and its related accounting regulations and in conformity withaccounting principles generally accepted in Japan (“Japanese GAAP”), which are different incertain respects as to application and disclosure requirements from International Financial
Reporting Standards.
The accounts of the Company’s overseas subsidiaries are based on their accounting records
maintained in conformity with generally accepted accounting principles prevailing in therespective countries of domicile. The accompanying consolidated financial statements have been
restructured and translated into English from the consolidated financial statements of the Company
prepared in accordance with Japanese GAAP and filed with the appropriate Local Finance Bureauof the Ministry of Finance as required by the Financial Instrument and Exchange Law of Japan.
Certain 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.
Comparative figures have been reclassified to conform to the current year’s presentation.
The translation of the Japanese yen amounts into U.S. dollar amounts is included solely for theconvenience of readers outside Japan, using the prevailing exchange rate at March 31, 2011, which
was approximately ¥83 to U.S. $1.00. The translation should not be construed as a representationthat 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.
2. Summary of Significant Accounting Policies(a) Principles of consolidation
The accompanying consolidated financial statements include the accounts of the Company and its
significant subsidiaries. Investments in significant unconsolidated subsidiaries and affiliates areaccounted for by the equity method. Investments in unconsolidated subsidiaries and affiliates notaccounted for by the equity method are stated at cost. Differences between the acquisition cost ofinvestments in subsidiaries and the underlying equity in their net assets, adjusted based on the fairvalue at the time of acquisition, are principally deferred as goodwill and amortized over five years
or recognized as gain on negative goodwill.
The number of consolidated subsidiaries, unconsolidated subsidiaries and affiliates for the years
ended March 31, 2011 and 2010 was as follows:
2011
2010
Consolidated subsidiaries:
Domestic
24
24
Overseas33
Unconsolidated subsidiaries and affiliates accounted forby the equity method
66Unconsolidated subsidiaries stated at cost
14
14
Affiliates stated at cost
5
5

-8-

All intercompany accounts and transactions have been eliminated on consolidation.
The accompanying consolidated financial statements include the accounts of overseas consolidated
subsidiaries (three subsidiaries in 2011 and 2010). These overseas consolidated subsidiaries close
their books at December 31, three months earlier than the Company and the domestic consolidated
subsidiaries. The Company consolidated the overseas subsidiaries’ financial statements as of theiryear-end. Significant transactions for the period between the subsidiaries’ year-end and theCompany’s year-end are adjusted for on consolidation.
(Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial
Statements)
The “Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements” (Practical Issues Task Force(“PITF”) No. 18) requires that
accounting policies and procedures applied by a parent company and its subsidiaries to similartransactions and events under similar circumstances should, in principle, be unified for the
preparation of the consolidated financial statements. PITF No. 18, however, as a tentative measure,allows a parent company to prepare consolidated financial statements using foreign subsidiaries’
financial statements prepared in accordance with either International Financial ReportingStandards or U.S. generally accepted accounting principles. In this case, adjustments for thefollowing six items are required in the consolidation process so that their impact on net income isaccounted for in accordance with Japanese GAAP unless the impact is immaterial.
(a) Goodwill not subject to amortization(b) Actuarial gains and losses of defined-benefit retirement plans recognized outside profit or loss(c) Capitalized expenditures for research and development activities(d) Fair value measurement of investment properties and revaluation of property, plant andequipment and intangible assets(e) Retrospective treatment of changes in accounting policies(f) Accounting for net income attributable to minority interests
The accounts of overseas consolidated subsidiaries were prepared in accordance with either
International Financial Reporting Standards or U.S. generally accepted accounting principles, withadjustments for the specified six items.
(New accounting standard for equity method of accounting for investments)
Effective April 1, 2010, The Company adopted the “Accounting standard for Equity Method of
Accounting for Investments” (Accounting Standards Board of Japan (“ASBJ”) Statement No. 16,
March 10, 2008 and “Practical Solution on Unification of Accounting Policies Applied to
Associates for Using the Equity Method” (PITF No. 24, March 10, 2008). In accordance with thisapplication, the Company made necessary adjustments in preparing the consolidated financial
statement. The adoption of this standard did not have a material effect on income or loss for theyear ended March 31, 2011.
(New accounting standard for business combination)
Effective April 1, 2011 the Company adopted the “Accounting Standard for Business
Combinations” (ASBJ Statement No. 21, December 26, 2008), “Accounting Standard forConsolidated Financial Statements” (ASBJ Statement No. 22, December 26, 2008) and “Guidanceon Accounting Standard for Business Combinations and Accounting Standard for Business
Divestitures” (ASBJ Guidance No. 10, December 26, 2008).
(b) Cash equivalents
The Japan Transcity Group considers cash equivalents to be highly liquid debt instrumentspurchased with an original maturity of three months or less.

-9-(c) Investments and marketable securities
The Japan Transcity Group classifies certain investments in debt and equity securities as“held-to-maturity”, “trading” or “available-for-sale”, the classification of which determines therespective accounting method as stipulated by the accounting standard for financial instruments.
Marketable securities with available market quotations for available-for-sale securities are stated atfair value and net unrealized gains or losses on these securities are reported as a component of net
assets, net of applicable income taxes. Gains and losses on the disposition of available-for-salesecurities are computed based on the moving-average method. Non-marketable securities without
available market quotations for available-for-sale securities are carried at cost determined by themoving-average method. Adjustments in carrying values of individual securities are charged toincome through write-downs when a decline in value is deemed other than temporary.
(d) Accounting for derivatives
Derivatives are valued at fair value, if hedge accounting is not appropriate or where there is no
hedging designation, and the gains or losses on the derivatives are recognized in current earnings.
According to the special treatment permitted by the accounting standard for financial instruments,
hedging interest rate swaps are accounted for on an accrual basis and recorded net of interest
expenses generated from the hedged borrowings if certain conditions are met.
(e) Inventories
Inventories consisted of supplies and other.
method.

Supplies are stated at cost, using the moving-average(f) Allowance for doubtful accounts
An allowance for doubtful accounts is provided at the aggregate amount of estimated credit loss
based on an individual financial review of certain doubtful or troubled receivables and a generalreserve for other receivables calculated based on historical loss experience for a certain past
period.
(g) Property and equipment, and depreciation (except for leases)
Property and equipment, including significant renewals and additions, are stated at cost, anddepreciated principally by the declining-balance method at rates based on the estimated useful lifeof the asset. Buildings acquired on and after April 1, 1998 are depreciated by the straight-line
method. Property with the cost of not less than ¥100,000 but below ¥200,000 each is capitalized
and depreciated over three years on a straight-line basis.
Expenditures on maintenance and repairs are charged to operating income as incurred.
The capital gains directly offset against the acquisition costs of tangible fixed assets to obtain tax
benefits were ¥100 million ($1,205 thousand) for the year ended March 31, 2011 and 2010.
(h) Accounting for leases
Prior to April 1, 2008, the Company and its domestic consolidated subsidiaries accounted forfinance leases which do not transfer ownership of the leased property to the lessee as operatingleases with disclosure of certain “as if capitalized” information in the notes to the consolidated
financial statements.
On March 31, 2007, the ASBJ issued Statement No. 13, “Accounting Standard for Lease
Transactions” and Guidance No. 16, “Guidance on Accounting Standard for Lease Transactions”.
The new accounting standards require that all finance lease transactions be treated as capital- 10 -

leases. As permitted, finance leases which commenced prior to April 1, 2008 and have beenaccounted for as operating leases, continue to be accounted for as operating leases with disclosureof certain “as if capitalized” information.

(i) Accounting standard for impairment of fixed assets
The Company and its domestic consolidated subsidiaries adopted the“Accounting Standard for
Impairment of Fixed Assets”issued by the Business Accounting Council of Japan and the related
practical guidance issued by ASBJ. The standard requires that fixed assets be reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount of anasset may not be recoverable. Impairment loss is to be recognized in the income statement by
reducing the carrying amount of the impaired asset or group of assets to the recoverable amount,measured as the higher of the asset’s net selling price or value in use. Fixed assets include land,buildings and other forms of property as well as intangible assets, and are to be grouped at thelowest level for which there are identifiable cash flows. For the purpose of recognition andmeasurement of impairment loss, fixed assets are principally grouped into cash-generating units
such as regional business divisions, other than idle or unused property. For the year ended March
31, 2011, the Japan Transcity Group recognized impairment loss as follows:
Millions of
Yen
Buildings and structures to be disposed
Machinery and equipment to be disposed¥¥

Thousands of
U.S. Dollars

4 $
75
79 $

48
904
952

(j) Revaluation of land
In accordance with the Law Concerning Revaluation of Land (“Law”), the Company elected the
one-time revaluation to restate the cost of land used for the Company’s business at values
rationally reassessed effective on March 31, 2002, reflecting adjustments for land shape and otherfactors and based on municipal property tax bases. According to the Law, an amount equivalent to
the tax effect on the difference between the original book value and the reassessed value isrecorded as deferred tax liability for revaluation account. The rest of the difference, net of the tax
effect and minority interests portion, is recorded as a component of the net assets section in theland revaluation decrement account in the accompanying consolidated balance sheets. At March 31,
2011 and 2010, the difference between the carrying value of land used for the Company’s businessafter reassessment and the current market value at the fiscal year-end amounted to ¥8,203 million($98,831 thousand) and ¥7,826 million, respectively.
(k) Employee retirement benefits
Employees who terminate their service with the Japan Transcity Group are entitled to retirement
benefits generally determined by current basic rates of pay, length of service and conditions underwhich the termination occurs.
In accordance with the accounting standard for employee retirement benefits, the Japan Transcity
Group recognizes retirement benefits for employees, including pension cost and related liability,
based on actuarial present value of projected benefit obligation using the actuarial appraisal
approach and the value of pension plan assets available for benefits at the fiscal year-ends.
Unrecognized actuarial differences as changes in the projected benefit obligation or pension plan
assets resulting from the experience different from that assumed and from changes in theassumptions are amortized on a straight-line basis over ten years, a period within the remaining- 11 -

service years of the employees, from the year after which they arise. Unrecognized prior service
cost is amortized using the straight-line method over ten years from the year in which it occurs.
(l) Accrued severance indemnities for directors and corporate auditors
Some domestic consolidated subsidiaries may pay severance indemnities to directors and corporate
auditors, which are subject to the approval of the shareholders. Some domestic consolidated
subsidiaries have provided for the full amount of the liabilities for directors’ and corporate
auditors’ severance indemnities at the respective balance sheet dates.
(m) Translation of foreign currency accounts
Receivables, payables and securities, other than stocks of subsidiaries and certain other securities,
are translated into Japanese yen at year-end exchange rates. Transactions in foreign currencies arerecorded at the prevailing exchange rates on the transaction dates. Resulting translation gains orlosses are included in current earnings.
For financial statement items of overseas consolidated subsidiaries, all asset and liability accounts
are translated into Japanese yen by applying the exchange rates in effect at the fiscal year-end.
All income and expense accounts are translated at the average rates of exchange prevailing during
the fiscal year. Translation differences are reported as foreign currency translation adjustment in acomponent of net assets in the accompanying consolidated balance sheets.
(n) Income taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets andliabilities are recognized for the future tax consequences attributable to differences between the
carrying amounts of existing assets and liabilities and their respective tax bases and operating loss
carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates isrecognized in the period that includes the enactment date.
(o) Enterprise taxes
The Japan Transcity Group records enterprise taxes based on the “added value” and “capital”
amounts when levied as size-based corporate taxes for local government enterprise taxes, which
are included in selling, general and administrative expenses.
(p) Appropriations of retained earnings
Cash dividends are recorded in the fiscal year when a proposed appropriation of retained earnings
is approved by the Board of Directors and/or shareholders.
(q) Per share data
Basic net income per share is computed by dividing income available to common shareholders by
the weighted-average number of shares of common stock outstanding during the fiscal year.
Diluted net income per share is computed assuming convertible bonds were converted at the timeof issue unless having anti-dilutive effects. Cash dividends per share for each fiscal year in theaccompanying consolidated statements of income represent dividends declared by the Company asapplicable to the respective years. Diluted net income per share is not presented as of March 31,
2011 and 2010 due to not having any dilutive shares.

- 12 -

(r) Accounting standard for asset retirement obligations
In March 2008, the ASBJ published a new accounting standard for asset retirement obligations, ASBJ
Statement No. 18, “Accounting Standard for Asset Retirement Obligations”, and ASBJ Guidance No.
21, “Guidance on Accounting Standard for Asset Retirement Obligations” effective for years beginningon or after April 1, 2010. Under this accounting standard, an asset retirement obligation is defined as alegal obligation imposed either by law or contract that results from the acquisition, construction,
development and the normal operation of a tangible fixed asset and is associated with the retirement ofsuch tangible fixed asset. The adoption of this standard did not have a material effect on operating
income, and income before income tax and minority interests decreased by ¥49 million ($590 thousand)for the year ended March 31, 2011.

(s) Consolidated Statements of Comprehensive Income(Additional information)
Effective March 31, 2011, the Company adopted the “Accounting Standard for Presentation ofComprehensive Income” (ASBJ Statement No. 25 on June 30, 2010) and “Revised AccountingStandard for Consolidated Financial Statements” (ASBJ Statement No. 22, revised on June 20,2010).
As a result, the Company has presented the consolidated statement of comprehensive income in the
consolidated financial statements for the fiscal year ended March 31, 2011.
The consolidated balance sheets and the consolidated statements of changes in net assets for 2010
have been modified in conformity with the new presentation rules of 2011. In addition, theCompany prepared the consolidated statements of comprehensive income for 2010 as well as thatfor 2011.
(t) Consolidated Statements of income
With the application of the “Cabinet Office Ordinance Revising the Regulations on Financial
Statements” (Cabinet Office Ordinance No. 5 on March 24, 2009) under the “Accounting Standard
for Consolidated Financial Statements (ASBJ Statement No. 22 on December 26, 2008),” theaccount item “Income before minority interests” was included from the fiscal year under review.
3.

Fair values of financial instruments(Additional information)
Effective from the fiscal year ended March 31, 2010, the Company and its domestic subsidiaries
adopted the revised Accounting Standard, “Accounting Standard for Financial Instruments”(ASBJ Statement No. 10 revised on March 10, 2008) and the “Guidance on Disclosures about Fair
Value of Financial Instruments” (ASBJ Guidance No. 19 revised on March 10, 2008). Information
on financial instruments for the year ended March 31, 2011 and 2010 required pursuant to therevised accounting standards is as follows.
(a) Qualitative information on financial instruments① Policies for using financial instruments
The capital operation of the Company is limited to short-term deposits and the Company
raises capital through bank loans and bond issuances. Derivative instruments are mainly
used for hedging against variable interest rate risk and to compensate a loss when an
earthquake occurs, and not for speculation.
② Details of financial instruments, risks, and risk management system
Trade receivables (notes and accounts) carry a credit risk of trading partners. Regarding
the said risk, pursuant to internal regulations of the Company, the due dates and balances
are managed appropriately for each counterparty and the credit risks of the main trading
partners are identified every half year.

- 13 -

Although investments in securities are exposed to market price fluctuation risk, theCompany regularly understands the fair values of shares of companies with which theCompany has business relationships.
Trade payables (notes and accounts) are due within one year.
With regard to loans payable, short-term borrowings are mainly used to raise capital for
operating dealings and long-term debt fund capital investment.
Loans with a variable interest rate involve the risk of interest rate fluctuation. For hedging
purposes, the Japan Transcity Group is a party to derivative instruments such as interest
rate swap contracts in the normal course of business to reduce its own exposure tofluctuations in interest rates. The method of evaluating the effectiveness of the hedge isomitted because of the exceptional treatment of interest rate swaps.
Guarantee deposits received is mainly deposited money for golf club memberships.
The Company entered into a derivative contract with financial institutions of highcreditworthiness to reduce credit risk.
The Japan Transcity Group controls liquidity risk associated with operating payables andloans by cash management systems which control the capital of the group unitary.
③ Supplemental information on fair values
Contract amounts of derivative instruments in “Fair value of financial instruments” donot show its own marketable price.
(b) Fair values of financial instruments
Book values of the financial instruments included in the consolidated balance sheet and theirvalues at March 31, 2011 and 2010 are as follows. Some financial instruments are excluded
because it is extremely difficult to identify their fair values.
Consolidatedbalance sheet
amounts

At March 31, 2011:(1) Cash and cash equivalents(2) Short-term investments(3) Trade receivables(4) Investment securities
Marketable securities
Total assets(1) Trade payables(2) Short-term borrowings(3) Long-term debt
Total liabilities
At March 31, 2010:(1) Cash and cash equivalents(2) Short-term investments(3) Trade receivables(4) Investment securities
Marketable securities
Total assets(1) Trade payables(2) Short-term borrowings(3) Long-term debt
Total liabilities¥

11,457431
12,543
4,302
28,7337,504
3,751
23,71834,973¥¥¥¥

10,878395
12,277
4,924
28,474
6,996
4,058
24,81935,873¥¥¥- 14 -

Fair value
Millions of yen

¥

¥
¥

¥

¥

¥
¥

¥

11,457431
12,543
4,302
28,7337,504
3,751
23,71834,973

10,878395
12,277
4,924
28,474
6,996
4,058
24,78735,841

Difference

¥

¥
¥

¥

¥

¥
¥

¥

0
0

(32)
(32)

Consolidatedbalance sheet
amounts

At March 31, 2011:(1) Cash and cash equivalents(2) Short-term investments(3) Trade receivables(4) Investment securities
Marketable securities
Total assets(1) Trade payables(2) Short-term borrowings(3) Long-term debt
Total liabilities

$

$
$

$

Fair value
Thousands of U.S. dollars

138,036
5,193
151,12151,831
346,181
90,40945,193285,759
421,361$$$$

138,036
5,193
151,12151,831
346,181
90,40945,193285,759
421,361

Difference

$

$
$

$

0
0

Note 1. Method of calculating fair value of financial instruments and other mattersconcerning securities and derivatives.
Assets(1) Cash and cash equivalents, (2) Short-term investments and (3) Trade receivables
The carrying values of cash and cash equivalents, short-term investments and tradereceivable are approximate fair values because of their short maturities.
(4) Investment securities
The fair values of listed equity shares in investment securities are based on quoted
market prices. For matters concerning securities according to the purpose for which
they are held, please see Note 4.
Liabilities(1) Trade payables and (2) Short-term borrowings
The carrying values of trade payables and short-term borrowings are approximate
fair values because of their short maturities.
(3) Long-term debt
The fair value of long-term debt is computed on the basis of the total amount ofprincipal and interest discounted at the interest rate applicable to new loans carrying
the same conditions.
Derivatives① Derivative transactions to which hedge accounting is not applied: Not applicable.
② Derivative transactions to which hedge accounting is applied: The contract
amount or amount equivalent to the principal set forth in the contract as of theconsolidated closing date are as follows:
Thousands of
U.S. dollars
Millions of yen
2011
2010
2011
Contract amount¥
17,860¥18,189215,181＄Contract amount due
17,844
15,689214,988
after one year
Fair value
(263)
(278)
(3,169)
Method of hedge accounting: Exceptional treatment of interest rate swap
Type of derivative transaction: Interest rate swap (fixed rate payment, floating rate receipt)
Hedged item: Long-term debt
The Company uses the price presented by financial institution.

- 15 -

Note 2. Financial instruments whose fair value cannot be reliably determined.
Thousandsof U.S.
Millions of yen
dollars
2011
2011
2010
Non-marketable securities
¥
802
¥
804
$
9,663
(*1)
Guarantee deposits received
¥
3,807
¥
3,935
$
45,867(*2)
Derivative relating to
¥
14
¥
14
$
169
earthquakes (*3)(*1) It is extremely difficult to determine the fair values of non-marketable securities
because they do not have quoted market prices and their future cash flow cannot be
estimated. Therefore, they are excluded from (4) Investment securities.
(*2)

It is extremely difficult to determine the fair values of guarantee deposits received
because their scheduled redemption cannot be estimated.

(*3)

During the year ended March 31, 2007, the Company entered into a derivative
contract relating to earthquakes for hedging purposes. The outstanding contract
amount was ¥300 million ($3,614 thousand) at March 31, 2011 and 2010,
respectively. As the fair value for such a contract is not considered determinable,that derivative contract has not been accounted for at fair value.

Note 3. Scheduled redemption amounts after the consolidated closing date for monetaryclaims and securities with maturity period.
Due in one
year or less

Cash and cash equivalents
Short-term investments
Trade receivables
Total

4.

¥

¥

Due after
Due in one
Due after
one yearyear or lessone year
Millions of yen
2011
2010
11,457¥¥ 10,878¥
431
395
12,543
12,277
24,431¥¥ 23,550¥-

Due in one
Due after
year or lessone yearThousands of U.S. dollars
2011$ 138,036$
5,193
151,121$ 294,350$-

Investments
At March 31, 2011 and 2010, short-term investments consisted of time deposits with an original
maturity of more than three months.
At March 31, 2011 and 2010, investment securities consisted of the following:
Millions of yen
2011
2010
Marketable securities:
Equity securities
Other

¥

Other non-marketable securities¥- 16 -

4,282
20
4,302
802
5,104

¥

¥

Thousands of
U.S. dollars
2011

4,916 $
8
4,924
804
5,728 $

51,590241
51,831
9,663
61,494

Marketable investment securities classified as available-for-sale are stated at fair value withunrealized gains and losses excluded from the current earnings and reported as a net amount within
the net assets account until realized. At March 31, 2011 and 2010, gross unrealized gains andlosses for marketable securities classified as available-for-sale were as follows:

Cost

Available-for-sale securities at March 31, 2011:
Equity securities
¥
3,758
Other
22
¥
3,780
Available-for-sale securities at March 31, 2010:
Equity securities
¥
3,762
Other
10
¥
3,772

Cost
Available-for-sale securities at March 31, 2011:
Equity securities$
45,277
Other
265$
45,542
5.

Gross
Gross
unrealized
unrealized
gains
lossesMillions of yen

Fair andcarrying
value

¥

(347)
(2)
(349)

¥

(219)
(2)
(221)

¥

¥

¥
¥

871
871

1,373
1,373

¥
¥

¥
¥

¥

¥

4,282
20
4,302

4,916
8
4,924

Gross
Gross
unrealized
unrealized
gains
lossesThousands of U.S. dollars

Fair andcarryingvalue$$ 51,590
241$ 51,831$

10,494
10,494$ (4,181)(24)$ (4,205)

Short-term Borrowings and Long-term Debt
At March 31, 2011 and 2010, short-term borrowings consisted of the following:
Millions of yen
2011
2010
Short-term bank loans and bank overdrafts withinterest rates ranging from 0.43% to 0.95%
per annum at March 31, 2011:
Unsecured¥

3,751 ¥

Thousands of
U.S. dollars
2011

4,058 $

45,193At March 31, 2011 and 2010, long-term debt consisted of the following:
Millions of yen
2011
2010
Long-term loans from banks and other financial
institutions due through 2022 with interest rates
ranging from 0.86% to 6.97% per annum at
March 31, 2011:
Collateralized¥
UnsecuredLess current maturities¥- 17 -

348
23,37023,718(885)
22,833¥¥378
24,441
24,819(3,599)21,220Thousands of
U.S. dollars
2011

$

$

4,193
281,566
285,759(10,663)
275,096

The aggregate annual maturities of long-term debt at March 31, 2011 were as follows:
Millions ofThousands ofYear ending March 31,
yen
U.S. dollars
2012
2013
2014
2015
2016
2017 and thereafter

¥

885 $
7,723
4,073
1,125
7,962
1,950
23,718 $¥10,66393,04849,072
13,554
95,92823,494
285,759

The aggregate annual maturities of long-term lease obligations at March 31, 2011 were as follows:
Millions ofyenYear ending March 31,
2012
2013
2014
2015
2016
2017 and thereafterThousands of
U.S. dollars

130 $
116
93
48
18
23
428 $

¥

¥

1,566
1,398
1,120
578
217
277
5,156

At March 31, 2011 and 2010, the following assets were pledged as collateral:
Millions of yen
2011
2010
Time deposits included in short-term
investments
Buildings and structures
Investment securities

¥

32
649
12

¥

Thousands of
U.S. dollars
2011

32 $
696
-

386
7,819
145

As is customary in Japan, substantially all loans from banks (including short-term loans) are madeunder general agreements which provide that, at the request of the relevant bank, the Japan
Transcity Group is required to provide collateral or guarantors (or additional collateral or
guarantors, as appropriate) with respect to the loans and that all assets pledged as collateral undersuch agreements will be applicable to all present and future indebtedness to the bank concerned.
The Japan Transcity Group has not received such requests. The general agreements further providethat the banks have the right, as indebtedness matures or becomes due prematurely by reason ofdefault thereon, to offset deposits at the banks against indebtedness due to the banks.
6.

Employee Retirement Benefits
The Company has defined benefit retirement plans. Some of the consolidated subsidiaries have
similar retirement benefit plans. In addition, two consolidated subsidiaries have a defined
contribution pension plan in certain pension funds organized by others.

- 18 -

The following table reconciles the benefit liability and net periodic retirement benefit expense asat or for the years ended March 31, 2011 and 2010:
Thousands ofMillions of yen
U.S dollars
2011
2010
2011
Reconciliation of benefit liability:
Projected benefit obligation
Less fair value of pension plan assets at endof yearUnrecognized actuarial differences (loss)
Unrecognized prior service cost of
retroactive benefits granted by the pension
plan amendment
Accrued retirement and severance benefits
Prepaid pension cost
Net amount of employee retirement
benefit liability recognized on the
consolidated balance sheets
Note:

¥

¥

11,249¥12,014$

135,530(9,411)
1,838(1,695)(9,565)2,449(1,723)(113,385)
22,145(20,422)

298
441
1,225

358
1,084
769

3,590
5,313
14,759

1,666

¥

1,853

$

20,072

Projected benefit obligation of the consolidated subsidiaries was calculated using thesimplified calculation method as permitted by the accounting standard for employee
retirement benefits.

Thousands of
U.S dollars
2011

Millions of yen
2011
2010
Components of net periodic retirement benefit expense:¥
Service cost
Interest cost
Expected return on pension plan assets
Amortization of actuarial differences
Amortization of prior service cost
Net periodic retirement benefit expense
¥

495 ¥
202
(174)
(60)
319
782 ¥

446
223
(155)
(60)
437
891

$

$

5,964
2,434
(2,096)
(723)
3,843
9,422

Major assumptions used in the calculation of the above information for the years ended March 31,
2011 and 2010 were as follows:

Method to attribute the projected benefits tothe periods of service
Discount rate
Expected rate of return on pension plan assets
Amortization of actuarial differences
Amortization of prior service cost
7.

2011

2010

Straight-line method
2.0%
2.0%
10 years
10 years

Straight-line method
2.0%
2.0%
10 years
10 years

Net Assets
The Japanese Corporate Law (“the Law”) became effective on May 1, 2006, replacing the former
Japanese Commercial Code. The Law is generally applicable to events and transactions occurring- 19 -

after April 30, 2006 and for fiscal years ending after that date.
Under Japanese laws and regulations, the entire amount paid for new shares is required to be
designated as common stock. However, a company may, by a resolution of the Board of Directors,
designate an amount not exceeding one-half of the price of the new shares as additional paid-in
capital, which is included in capital surplus.
Under the Law, in cases where a dividend distribution of surplus is made, the smaller of an amountequal 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 capitalor legal earnings reserve. Legal earnings reserve is included in retained earnings in theaccompanying consolidated balance sheets.
Under the Law, legal earnings reserve and additional paid-in capital can be used to eliminate or
reduce a deficit by a resolution of the shareholderｓ’meeting. Additional paid-in capital and legal
earnings reserve may not be distributed as dividends. 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.
At March 31, 2011 and 2010, respectively, capital surplus principally consisted of additional
paid-in capital. In addition, retained earnings included legal earnings reserve of the Company inthe amount of ¥1,200 million ($14,458 thousand) at March 31, 2011 and 2010, respectively.
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 andregulations.
During the year ended March 31, 2011, the Company paid interim dividends of ¥4.00 per share.
In addition, at the annual shareholders’ meeting held on June 29, 2011, the shareholders approved
cash dividends of ¥4.50 per share, amounting to ¥291 million ($3,506 thousand). These
appropriations have not been accrued in the consolidated financial statements as of March 31, 2011as such appropriations are recognized in the period in which they are approved by the shareholders.
8.

Contingent Liabilities
At March 31, 2011 and 2010, the Japan Transcity Group was contingently liable for guarantees ofindebtedness of others in the amounts of ¥803 million ($9,675 thousand) and ¥994 million,
respectively. Such amounts included the guarantees of indebtedness of 50%owned affiliates in theamount of ¥438 million ($5,277 thousand) and ¥601 million at March 31, 2011 and 2010,
respectively.

9.

Lease Commitments
The Japan Transcity Group leases, as lessee, land and buildings to be used for office spaces andwarehouses principally under long-term cancelable or non-cancelable operating lease agreements.
The Japan Transcity Group also leases computer equipment, other equipment and vehicles underleases which are not generally cancelable.
Total rental and lease expenses, including cancelable and non-cancelable leases, for the years
ended March 31, 2011 and 2010 were ¥6,512 million ($78,458 thousand) and ¥6,241 million,
respectively. For the years ended March 31, 2011 and 2010, the lease expenses for non-cancelable
lease agreements which were categorized as financing leases amounted to ¥447 million ($5,386
thousand) and ¥491 million, respectively.

- 20 -

The aggregate future minimum payments for non-cancelable operating leases and financing leases,
including the imputed interest, at March 31, 2011 and 2010 were as follows:
Thousands of
U.S. dollars
2011

Millions of yen
2011
2010
Operating leases:
Due within one year
Due after one year

¥

705
1,784
2,489

¥

Financing leases (Contracted before March 31, 2008):
Due within one year¥376
Due after one year
1,130
¥
1,506

¥

742
2,591
3,333

¥
¥

448
1,506
1,954

¥

$

8,494
21,49429,988$$4,530
13,615
18,145$

10. Income Taxes
The tax effects of temporary differences that gave rise to a significant portion of the deferred tax
assets and liabilities at March 31, 2011 and 2010 were as follows:

Millions of yen
2011
2010
Deferred tax assets:
Enterprise tax accruals¥
Accrued bonuses to employees
Employee retirement benefit liability
Accrued severance indemnities for directors andcorporate auditors
Long-term accounts payable
Intercompany capital gains
Net operating loss carryforwards
Impairment loss on fixed assets
Other
Less valuation allowance
Deferred tax assets
Deferred tax liabilities:
Deferred capital gain
Unrealized gains on available-for-salesecurities
Other
Deferred tax liabilities
Net deferred tax assets¥- 21 -

57
405
1,125

¥

66
407
1,355

Thousands of
U.S. dollars
2011
$

687
4,879
13,554

17
77
272
204
1,217
370
3,744
(1,585)
2,159

18
72
275
196
1,187
330
3,906
(1,582)
2,324

205
928
3,277
2,458
14,663
4,458
45,109(19,097)
26,012

1,169

1,215

14,084

212
435
1,816
343

466
425
2,106
218

2,554
5,241
21,8794,133¥$

At March 31, 2011 and 2010, deferred tax assets and liabilities were as follows:

Millions of yen
2011
2010
Deferred tax assets:
Current
Non-current
Deferred tax liabilities:
Non-current

¥

477
639
773

¥

480
621
883

Thousands of
U.S. dollars
2011
$

5,747
7,699
9,313

In assessing the realizability of deferred tax assets, management of the Japan Transcity Groupconsiders whether some portion or all of the deferred tax assets will not be realized. The ultimate
realization of deferred tax assets is dependent upon the generation of the future taxable income
during the periods in which those temporary differences become deductible. At March 31, 2011
and 2010 a valuation allowance was provided to reduce the deferred tax assets to the extent thatmanagement believes that the deferred tax assets were realizable.
A reconciliation of the difference between the Japanese statutory effective tax rate and the actual
effective income tax rate on pre-tax income reflected in the accompanying consolidated statements
of income for the year ended March 31, 2011 was as follows:
Percentage ofpre-tax income
Japanese statutory effective tax rate
40.1%
Increase (decrease) due to:Permanently non-deductible expenses
1.2
Tax exempt income(1.9)
Local minimum taxes per capita levy
1.0
Equity in net earnings of unconsolidated
subsidiaries and affiliates
(5.8)
Other
0.8
Actual effective income tax rate
35.4%
A reconciliation for the year ended March 31, 2010 was not disclosed because the difference was
immaterial.

- 22 -

11. Related Party Transaction
ASBJ Statement No. 11, “Accounting Standard for Related Party Disclosures” and ASBJ
Guidance No. 13, “Guidance on Accounting Standard for Related Party Disclosures” issued by
the Accounting Standards Board of Japan on October 17, 2006, require certain additional related
party disclosures. Pursuant to their accounting standards, information on Chubu Coal Center Co.,
Ltd. is disclosed for the year ended March 31, 2011 and 2010.

Millions of yen
2011
2010

Thousands of
U.S. dollars
2011

Total current assets
Total fixed assets

¥
¥

711 ¥
10,209 ¥739 $10,494 $

8,566
123,000

Total current liabilities
Total fixed liabilities¥¥

2,618 ¥
2,877 ¥

2,842 $
3,422 $

31,542
34,663

Total net assets¥

5,425 ¥

4,969 $

65,361

Operating revenue
Income before income taxes
Net income¥¥¥

3,227 ¥
1,064 ¥
635 ¥

3,013 $
757 $
452 $

38,88012,8197,651- 23 -

12.

Segment Information
1. General information about reportable segments
The reportable segments are constituent business units of the Japan Transcity Group for which separate financial information is obtained, and they
are examined regularly by the Board of Directors to evaluate business performance. The Japan Transcity group carry on mainly integrated
logistics services that consist of warehousing, coastal shipping, trucking and international multimodal transportation. Therefore the Japan
Transcity group’s reported segment is “Integrated logistics services”.
2. Basis of measurement about reported segment profit, segment assets and other material items
The principle of the accounting for the segment is presented on an operating income basis. Intersegment operating revenues or transfer amounts isbased on the market price.
3. Information about reported segment profit, segment assets and other material items
Information by segment for years ended March 31, 2011 and 2010 was as follows:Integrated logistics
services
For the year ended March 31, 2011:
Operating revenue:
External customers
Intersegment sales
Total operating revenue
Operating income
Identifiable assets
Depreciation
Capital expenditures
Impairment loss on fixed assets
Amortization of negative goodwill
Negative goodwill
For the year ended March 31, 2010:
Operating revenue:
External customers
Intersegment sales
Total operating revenue
Operating income
Identifiable assets
Depreciation
Capital expenditures
Amortization of negative goodwill
Negative goodwill¥

Others79,78425
79,8093,734¥¥

87,217
2,827
1,533
79
22
33

¥

¥

¥
¥

Total
Millions of yen

1,070
1,194
2,264
222

¥

¥

2,398
53
91
-

75,00624
75,0303,218¥

87,407
3,071
2,773
23
55

¥

¥

¥

Adjustment

80,854
1,219
82,073
3,956¥¥

89,615
2,880
1,624
79
22
33

1,440
1,016
2,456
159

¥

2,211
50
4
-

¥

¥

¥

Consolidated(1,219)(1,219)
(103)

¥

¥

(1,117)-¥88,498
2,880
1,624
79
22
33

76,446
1,040
77,486
3,377¥(1,040)(1,040)(10)¥

76,44676,446
3,367

89,618
3,121
2,777
23
55

¥

¥

¥

- 24 -(1,072)-¥¥¥80,85480,854
3,853

88,546
3,121
2,777
23
55

Integrated logistics
services
For the year ended March 31, 2011:
Operating revenue:
External customers
Intersegment sales
Total operating revenue
Operating income$$

Identifiable assets
Depreciation
Capital expenditures
Impairment loss on fixed assets
Amortization of negative goodwill
Negative goodwill$

961,253301
961,554
44,9881,050,807
34,06018,470952
265
398

Others
Total
Adjustment
Thousands of U.S. dollars$

12,892
14,38527,277
2,675$$

28,892
639
1,096
-

$

$
$

974,145
14,686
988,83147,663$

1,079,699
34,69919,566
952
265
398

$

$

Consolidated(14,686)(14,686)(1,241)$(13,458)-$

974,145974,145
46,422$

1,066,241
34,69919,566952
265
398(Additional information)
Effective April 1, 2010, the Company adopted the “Accounting Standard for Disclosures about Segments of an Enterprise and RelatedInformation” (ASBJ Statement No. 17 on March 27, 2009) and “Guidance on Accounting Standard for Disclosures about Segments of anEnterprise and Related Information” (ASBJ Guidance No.20, issued on March 21, 2008).

(Related information)
1. Information about product and service
Coastalshipping

Warehousing
For the year ended March 31, 2011:
Operating revenue to external customers:¥

30,618¥21,130

Trucking
Millions of yen¥

17,311

International
multimodaltransportation

¥

Total

10,725¥79,784

129,217$

961,253

Thousands of U.S. dollars
For the year ended March 31, 2011:
Operating revenue to external customers:$

368,892$

254,578$

208,566$

2. Information about geographic areas(1) Operating revenue
The Company has omitted disclosure of operating revenue because operating revenue to external customers in Japan account for more than
90% of the amount of operating revenue reported in the consolidated statements of income.
(2) Property, plant and equipment
The Company has omitted disclosure of property, plant and equipment because property, plant and equipment in Japan account for morethan 90% of the amount of property, plant and equipment reported in the consolidated balance sheets.
3. Information about major customers
The Company has not disclosed information about major customers because no customer had contributed by 10% or more to operating
revenue in the consolidated statements of income.

(Gains arising from negative goodwill)
Effective from the fiscal year ended March 31, 2011, the Company has omitted information by segment on gains arising from negative
goodwill due to the negligible importance of this information.

- 25 -

13. Condensed Financial Statements of Japan Transcity Corporation (Parent)
Presented below are the condensed nonconsolidated balance sheets, nonconsolidated statements ofincome and changes in net assets of Japan Transcity Corporation, the parent company.
Nonconsolidated Balance Sheets(Unaudited)Japan Transcity Corporation (Parent)

Millions of yen
2011
2010
Current assets:
Cash and cash equivalents
Short-term investments
Trade receivables, net of allowance for
doubtful accounts
Inventories
Deferred tax assets
Other current assets
Total current assets
Property and equipment, at costLess accumulated depreciation
Net property and equipment
Investments and other assets:
Investment securities
Investments in and long-term loans to
subsidiaries and affiliates
Lease deposits
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total assets¥¥- 26 -

9,466¥

Thousands of
U.S. dollars
2011

37

9,054
36

11,95320
275
1,371
23,12273,695(33,231)
40,464

11,62517
269
1,361
22,36273,555(31,951)
41,604

144,012241
3,313
16,518278,578
887,892(400,374)
487,518

4,686

5,298

56,458

3,915
921
2,553
(254)
11,82175,407

3,730
893
1,970
(15)
11,87675,842

47,169
11,09630,759(3,060)142,422908,518¥$$

114,048446

Thousands of
U.S. dollars

Millions of yen
2011
Current liabilities:
Short-term borrowings
Current maturities of long-term debt
Trade payables
Accrued expenses
Income taxes payable
Other current liabilities
Total current liabilities
Long-term debt
Employee retirement benefit liability
Deferred tax liabilities for revaluation
Deferred tax liabilities
Other long-term liabilities
Total liabilities¥

Net assets:
Shareholder’s equity:
Common stock
Capital surplus
Retained earnings
Less treasury stock, at cost
Total shareholders' equity

2010

7,248
572
7,834
775
503
1,355
18,287
19,603
664
5,277
705
490
45,026

¥

7,094
3,269
7,508
761
595
1,360
20,587
17,675
776
5,281
813
459
45,591

2011$

87,325
6,892
94,3869,337
6,060
16,325
220,325
236,181
8,000
63,5788,494
5,903
542,481

8,428
6,734
17,996(1,015)32,143

8,428
6,735
17,430(944)
31,649101,542
81,133
216,819(12,229)
387,265

262

621

3,157

(2,024)(2,019)(24,385)(1,762)30,38175,407(1,398)30,25175,842(21,228)
366,037
908,518

Accumulated losses from valuation
adjustment:
Net unrealized gains on available-for-salesecurities
Land revaluation decrement
Total accumulated losses fromvaluation adjustment
Total net assets
Total liabilities and net assets¥- 27 -¥$

Nonconsolidated Statements of Income (Unaudited)Japan Transcity Corporation (Parent)
For the Years Ended March 31, 2011 and 2010¥

Operating revenue
Operating costs and expenses
Operating income
Other income (expenses):
Interest and dividend income
Interest expenses
Miscellaneous, net
Income before income taxes
Income taxes:
Current
Deferred
Total income taxes
Net income¥

Millions of yen
2011
2010

Thousands of
U.S. dollars
2011

75,771$¥

71,39173,184
2,587

69,111
2,280

881,735
31,169

307
(314)
(516)
(523)
2,064

278
(313)
(27)
(62)
2,218

3,698
(3,783)(6,217)(6,302)
24,867

830
122
952

683
216
899

10,0001,469
11,469

1,112

¥

1,319

Yen
Per share:
Net income:-BasicCash dividends¥- 28 -

912,904

17.15
8.50

¥

$

13,398

U.S. dollars

20.31
8.50

$

0.21
0.10

Nonconsolidated Statements of Changes in Net Assets(Unaudited)Japan Transcity Corporation (Parent)
For the Years Ended March 31, 2011 and 2010

Shareholders’ equity

Common stock

Balance at March 31, 2009
Net income for the year
Cash dividends
Purchase of treasury stock and fractional shares, net
Net changes other than shareholders’ equity
Balance at March 31, 2010
Net income for the year
Cash dividends
Purchase of treasury stock and fractional shares, net
Reversal of Land revaluation decrement
Net changes other than shareholders’ equity
Balance at March 31, 2011

¥

¥

¥

8,428
8,428
8,428

¥

¥

¥

6,735
6,735
(1)
6,734

Total
shareholder’s
Treasury stock
equityMillions of yen

Retained
Earnings

Capital surplus

¥

¥

¥

16,663
1,319(552)
17,430
1,112
(551)
5
17,996

Accumulated (losses) gains from valuation adjustment
Total
Net unrealized
accumulated
losses fromgains onLand
available-forvaluation
revaluation
sale securities
decrement
adjustment

¥

¥

¥

（941）
(3)
(944)
(71)
(1,015)¥¥¥30,885
1,319
(552)
(3)
31,649
1,112
(551)
(72)
5
32,143

¥

¥

¥

434
187
621
(359)
262

¥

¥

¥

(2,019)(2,019)(5)(2,024)¥¥¥(1,585)
187(1,398)(364)(1,762)Total
net assets

¥

¥

¥

29,300
1,319
(552)
(3)
187
30,251
1,112
(551)
(72)
5
(364)
30,381Thousands of U.S. dollars
Balance at March 31, 2010
Net income for the year
Cash dividends
Purchase of treasury stock and fractional shares, net
Reversal of Land revaluation decrement
Net changes other than shareholders’ equity
Balance at March 31, 2011$$

101,542
101,542$$

81,145(12)
81,133$$210,000
13,398(6,639)60
216,819$$- 29 -(11,374)(855)(12,229)$$

381,313
13,398(6,639)(867)
60
387,265

$

$

7,482
(4,325)
3,157

$

$

(24,325)(60)(24,385)$$(16,843)（4,385）(21,228)$$

364,470
13,398(6,639)(867)
60(4,385)366,037