Japan Transcity Corporation
Semi-Annual
Consolidated Financial Statements(Unaudited)

September 30, 2007

Japan Transcity Corporation and Consolidated Subsidiaries
Consolidated Balance Sheets

Current assets:
Cash and cash equivalents
Short-term investments
Trade receivables:
Notes
Accounts
Allowance for doubtful accounts

Millions of Yen
September 30,
March 31,2007
2007
(Unaudited)Thousands of
U.S. Dollars
September 30,
2007(Unaudited)¥$

Inventories
Deferred tax assets
Other current assets
Total current assets
Property and equipment, at cost:
Land
Buildings and structures
Other
Less, accumulated depreciation
Net property and equipment
Investments and other assets:
Investment securities
Investments in unconsolidated subsidiaries andaffiliates
Deferred tax assets
Lease deposits
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total assets¥

See accompanying Notes to Consolidated Financial Statements.

12,159104¥

12,946
703

105,730905

971
13,850(19)
14,80291
240
1,791
29,187974
13,673(19)
14,62891
236
1,529
30,133

8,443
120,435(165)
128,713791
2,087
15,574
253,800

27,774
44,391
18,53790,702(42,952)
47,75027,762
42,143
19,81089,715(42,125)
47,590241,513
386,009
161,191
788,713(373,495)
415,218

9,334

10,236

81,165

3,083
538
886
1,788
(49)
15,580

2,976
505
935
1,527
(50)
16,12926,8094,678
7,704
15,548(426)
135,478

92,517¥93,852$804,496

Current liabilities:
Short-term borrowings
Current maturities of long-term debt
Trade payables:
Notes
Accounts

Millions of Yen
September 30,
March 31,2007
2007
(Unaudited)Thousands of
U.S. Dollars
September 30,
2007(Unaudited)¥$

Accrued expenses
Income taxes payable
Other current liabilities
Total current liabilities
Long-term debt
Employee retirement benefit liability
Guarantee deposits received
Deferred tax liabilities for revaluation
Accrued severance indemnities for directors andcorporate auditors
Other long-term liabilities
Total liabilities
Net assets:
Common stock
Capital surplus
Retained earnings
Less, treasury stock, at cost
Total shareholders' equity
Valuation and translation adjustments
Minority interests
Total net assets
Total liabilities and net assets

¥

2,700
9,363

¥

2,710
1,136

23,47881,418

1,528
6,100
7,628
1,803
724
2,427
24,645

1,454
6,476
7,930
1,759
463
2,710
16,70813,28753,044
66,331
15,678
6,296
21,104
214,305

16,891
3,302
4,323
5,281

25,634
3,872
4,381
5,281

146,878
28,71337,59145,922368
1,039
55,849489
1,228
57,593

3,200
9,035
485,644

8,428
6,738
19,316(416)
34,066
1,159
1,443
36,668

8,428
6,738
18,253(138)
33,2811,628
1,350
36,25973,28758,591
167,965(3,617)296,226
10,07812,548318,852

92,517¥93,852$804,496Japan Transcity Corporation and Consolidated Subsidiaries
Consolidated Statements of Income (Unaudited)
For the Six Months Ended September 30, 2007 and 2006

Operating revenue (Note 5)¥

Operating costs and expenses (Note 5)
Operating income
Other income (expenses):
Interest and dividend income
Interest expenses
Equity in net earnings of unconsolidated
subsidiaries and affiliates
Other, net
Income before income taxes and minority
interests
Income taxes:
Current
Deferred
Total income taxes
Less, minority interests in net income of consolidated
subsidiaries
Net income¥

Millions of Yen
2007
2006

Thousands of
U.S. Dollars
2007

42,605$¥41,41540,353
2,252

39,0652,350

350,896
19,583

105
(216)

88
(198)

913
(1,878)

138
(4)
23

114
6
10

1,200
(35)
200

2,275

2,360

19,783

736
118
854

653
240
893

6,400
1,026
7,426

57

97

496

1,364

¥

1,370

$

Yen
Per share:
Net income :-Basic-Diluted
Cash dividends¥

See accompanying Notes to Consolidated Financial Statements.

370,479

20.44
19.38
4.00

¥

11,861

U.S. Dollars

20.52
19.42
4.00

$

0.18
0.17
0.03

Japan Transcity Corporation and Consolidated Subsidiaries
Consolidated Statements of Changes in Net Assets (Unaudited)
For the Six Months Ended September 30, 2007 and 2006
Shareholders' equity
Number ofcommonshares issued

Commonstock

Balance at March 31, 2006
Net income for the period
Cash dividends
Bonuses to directors and corporate auditors
Purchase of treasury stock and fractional shares, net
Net changes other than shareholders’ equity
Balance at September 30, 2006

67,019,610
67,019,610¥

Balance at March 31, 2007
Net income for the period
Cash dividends
Purchase of treasury stock and fractional shares, net
Net changes other than shareholders’ equity
Balance at September 30, 2007

67,142,417
67,142,417

¥

¥

¥

Capitalsurplus

8,411
8,411

¥

8,428
8,428

¥

¥

¥

Retainedearnings

6,720
6,720

¥

6,738
6,738

¥

¥

¥

Valuation and translation adjustments
Foreign
Net unrealized
Total
Land
Total
currency
gains onvaluation andTreasuryshareholders' available-for- revaluationtranslationtranslation
stock
equitydecrement
adjustment
sale securities
adjustments
Millions of Yen

16,256
1,370
(301)
(46)
17,279¥18,2531,364(301)
19,316

¥

¥

¥

(28)
(98)
(126)

(138)
(278)
(416)

¥

¥

¥

¥

31,359
1,370
(301)
(46)
(98)
32,28433,281
1,364
(301)
(278)
34,066

¥

¥

¥

¥

4,467
(651)
3,816

¥

¥

(2,018)(2,018)

¥

¥

3,589
(534)
3,055

¥

(2,018)(2,018)¥31,209(4,644)26,565$ (17,548)$ (17,548)

$

¥

¥

(9)
8
(1)

¥

¥

57
65
122

¥

496
565
1,061

$

¥

2,440
(643)
1,797

Minority
interests

¥

¥

1,628
(469)
1,159

¥

14,157(4,079)10,078

$

¥

1,201
66
1,267

Total net
assets¥¥35,000
1,370
(301)
(46)
(98)
(577)
35,348

1,350
93
1,443

¥

11,739809
12,548$ 315,296
11,861(2,618)(2,417)(3,270)$ 318,852¥

36,259
1,364
(301)
(278)
(376)
36,668

Thousands of U.S. Dollars
Balance at March 31, 2007
Net income for the period
Cash dividends
Purchase of treasury stock and fractional shares, net
Net changes other than shareholders’ equity
Balance at September 30, 2007$$

73,28773,287$$58,591
58,591$ 158,722
11,861(2,618)$ 167,965$$(1,200)(2,417)(3,617)$ 289,400
11,861(2,618)(2,417)$ 296,226

Note: The number of authorized common shares at March 31, 2007 and September 30, 2007 was 240,000,000 shares, respectively.
The number of shares of treasury stock at March 31, 2007 and September 30, 2007 was 275,911 shares and 803,756 shares, respectively.

See accompanying Notes to Consolidated Financial Statements.

-4-

$

$

$

$

$

Japan Transcity Corporation and Consolidated Subsidiaries
Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended September 30, 2007 and 2006

Cash flows from operating activities:
Income before income taxes and minority interests
Adjustments for:
Depreciation
Net reversal for employee retirement benefit liability
Increase in prepaid pension cost
Increase in trade receivables(Increase) decrease in inventories
Decrease in trade payables
Other, net
Sub-totalInterest and dividend received
Interest paid
Income taxes paid
Net cash provided by operating activities¥

Cash flows from investing activities:
Increase in property and equipment and intangibles
Decrease in short-term investments
Other, net
Net cash used in investing activities
Cash flows from financing activities:
Repayment of long-term debt
Decrease in short-term borrowings
Dividends paid
Other, net
Net cash used in financing activities
Effect of exchange rate changes on cash andcash equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of
periodCash and cash equivalents at end of period

See accompanying Notes to Consolidated Financial Statements.

-5-¥

Millions of Yen
2007
2006

Thousands of
U.S. Dollars
2007

2,275

$

¥

2,360

19,783

1,394
(569)
(300)
(137)
(1)
(315)
(634)
1,713
144
(213)
(482)
1,162

1,331
(437)
(489)
26
(626)
229
2,394
129
(191)
(1,394)938

12,122(4,948)(2,609)(1,191)(9)(2,739)(5,513)
14,896
1,252(1,852)(4,192)
10,104(1,489)
600
55
(834)

(1,064)6
5(1,053)(12,948)5,218
478(7,252)

(575)
(10)
(301)
(283)
(1,169)

(359)
(26)
(301)
(99)
(785)

(5,000)(87)(2,618)(2,460)(10,165)

54
(787)

15
(885)

469
(6,844)

12,946
12,159¥14,332
13,447$

112,574
105,730

Japan Transcity Corporation and Consolidated Subsidiaries
Notes to Consolidated Financial Statements
Information for the six months ended September 30, 2007 and 2006 was unaudited.
1.

Basis of Presentation(a) Basis of presenting 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 Instruments and Exchange Law ofJapan and its related accounting regulations, and in conformity with accounting principles generally
accepted in Japan for interim reporting, which are different in certain respects as to application anddisclosure requirements of International Financial Reporting Standards. These consolidated financial
statements are compiled from the original consolidated financial statements in Japanese prepared by
the Company as required by the Financial Instruments and Exchange Law of Japan and submitted to
the Director of Kanto Finance Bureau of Japan.
The translation of the Japanese yen amounts into U.S. dollars are included solely for the convenienceof readers outside Japan, using the prevailing approximate exchange rate at September 30, 2007,
which was ¥115 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.

(b) Principles of consolidation
The accompanying consolidated financial statements include the accounts of the Company and its
significant subsidiaries. Investment in significant unconsolidated subsidiaries and affiliates isaccounted for by the equity method. Investment in unconsolidated subsidiaries and affiliates notaccounted for by the equity method is stated at cost. The number of consolidated subsidiaries,
unconsolidated subsidiaries and affiliates for the six months ended September 30, 2007 and 2006 was
as follows:
2007
2006
Consolidated subsidiaries
Unconsolidated subsidiaries and affiliates, accounted
for by the equity method
Unconsolidated subsidiaries, stated at cost
Affiliates, stated at cost

27

27

5
14
4

5
13
4

The accompanying consolidated financial statements included the accounts of overseas consolidated
subsidiaries (three subsidiaries in 2007 and 2006). Overseas consolidated subsidiaries adopt
accounting principles generally accepted in their countries, and no adjustments to conform toaccounting principles generally accepted in Japan have been made to their financial statements on
consolidation as allowed under accounting principles generally accepted in Japan.

(c) Accounting policies
These unaudited semi-annual consolidated financial statements should be read in conjunction with theaudited consolidated financial statements for the year ended March 31, 2007. There were no changes
in accounting policies that were applied in the accompanying consolidated financial statements for thesix months ended September 30, 2007 from those for the year ended March 31, 2007, except for thefollowing paragraphs.

-6-

(Change in depreciation method)
In accordance with the amendment of the Corporate Tax Law of Japan, effective April 1, 2007, theCompany and its domestic consolidated subsidiaries changed the depreciation method of property andequipment acquired on and after April 1, 2007 to the method based on the amended Corporate Tax
Law of Japan. As a result, operating income and income before income taxes and minority interests
for the six months ended September 30, 2007 decreased by ¥27 million ($235 thousand), respectively,
as compared with the previous accounting method.
(Additional information)
As for the property and equipment acquired before April 1, 2007, from the current six months ended
September 30, 2007, their residual value are depreciated over five years using the straight-line method
after the fiscal year in which the depreciable limit is reached. This change resulted in decreases inoperating income by ¥55 million ($478 thousand) and income before income taxes and minority
interests by ¥60 million ($522 thousand), respectively.

2.

Contingent Liabilities
At September 30, 2007 and March 31, 2007, the Japan Transcity Group was contingently liable forguarantees of indebtedness principally of affiliates in the amounts of ¥1,201 million ($10,443
thousand) and ¥1,349 million, respectively.

3.

Subsequent Event
On November 13, 2007, the Board of Directors of the Company declared interim cash dividends of ¥4
per share to shareholders of record as of September 30, 2007, which amounted to ¥265 million ($2,304
thousand) in aggregate.

-7-4. Segment Information

The Japan Transcity Group’s operations are classified into two major segments: Integrated logistics services and other services.
Information by industry segment for the six months ended September 30, 2007 and 2006 was as follows:Integrated logistics
services
For the six months ended September 30, 2007:
Operating revenue:
External customers
Inter-segment sales
Total operating revenue
Operating costs and expenses
Operating income

For the six months ended September 30, 2006:
Operating revenue:
External customers
Inter-segment sales
Total operating revenue
Operating costs and expenses
Operating income

¥

¥

¥

¥

41,891
14
41,90539,7382,167

40,582
14
40,59638,404
2,192

Others

¥

¥

¥

¥

714
625
1,339
1,285
54

833
689
1,522
1,382
140

Total
Millions of Yen

¥

¥

¥

¥

42,605639
43,24441,023
2,221

Elimination¥¥

41,415703
42,11839,786
2,332

¥

¥

(639)
(639)
(670)
31

(703)
(703)
(721)
18

Consolidated

¥

¥

¥

¥

42,60542,60540,353
2,252

41,41541,41539,065
2,350

Thousands of U.S. Dollars
For the six months ended September 30, 2007:
Operating revenue:
External customers
Inter-segment sales
Total operating revenue
Operating costs and expenses
Operating income$$

364,270
121
364,391
345,548
18,843

$

$

6,209
5,435
11,644
11,174470$$

370,479
5,556
376,035
356,722
19,313$$(5,556)(5,556)(5,826)
270$$

370,479
370,479
350,896
19,583

Geographic segment information is not shown, as operating revenue of overseas consolidated subsidiaries was not material.
Information for overseas sales is not disclosed, as such sales were not material(Change in depreciation method)
As disclosed in Note 1(c), the Company and its domestic consolidated subsidiaries changed the depreciation method of property and equipment acquired on
and after April 1, 2007 to the method based on the amended Corporate Tax Law of Japan. This accounting change principally resulted in a decrease inoperating income for “Integrated logistics services” segment, as compared with the previous accounting method.

(Additional information)
As also described in Note 1(c), as for the property and equipment acquired before April 1, 2007, from the current six months ended September 30, 2007, theirresidual value are depreciated over five years using the straight-line method after the fiscal year in which the depreciable limit is reached.

As a result, for thesix months ended September 30, 2007, operating income for the "Integrated logistics services" segment and for the "Others" segment decreased by ¥48
million ($417 thousand) and ¥7 million ($61 thousand), respectively.

-8-5. Condensed Financial Statements of Japan Transcity Corporation (Parent)
Presented below are the condensed non-consolidated balance sheets, non-consolidated statements
of income and changes in net assets of Japan Transcity Corporation, the parent company.
Non-Consolidated Balance Sheets
Japan Transcity Corporation (Parent)

Thousands of
U.S. Dollars

Millions of Yen
September 30,
2007(unaudited)
Current assets:
Cash and cash equivalents
Short-term investments
Trade receivables, net of allowance for
doubtful accounts
Inventories
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

¥

¥

8,812
38

March 31,2007¥

10,51038

September 30,
2007(unaudited)$

76,626330

14,07316
2,062
25,001
66,965(28,986)
37,97913,86626
1,981
26,421
66,131(28,439)
37,692

122,374
139
17,931
217,400
582,304(252,052)
330,252

8,703

9,557

75,678

3,507
841
1,728
(49)
14,73077,710

3,499
891
1,442
(50)
15,33979,45230,496
7,313
15,026(426)
128,087
675,739¥$

Current liabilities:
Short-term borrowings
Current maturities of long-term debt
Trade payables
Accrued expenses
Income taxes payable
Deferred tax liabilities
Other current liabilities
Total current liabilities
Long-term debt
Employee retirement benefit liability
Deferred tax liabilities for revaluation
Deferred tax liabilities
Accrued severance indemnities for directors
and corporate auditors
Other long-term liabilities
Total liabilities
Net assets:
Common stock
Capital surplus
Retained earnings
Less, treasury stock, at cost
Total shareholders' equity
Valuation and translation adjustments
Total net assets
Total liabilities and net assets

Millions of Yen
September 30,
March 31,
2007
2007
(unaudited)Thousands of
U.S. Dollars
September 30,
2007(unaudited)

¥

$

¥

4,259
8,973
8,286
869
450
177
1,887
24,901
12,316
2,201
5,281
899

¥

4,547
713
8,350
862
173
203
2,174
17,022
20,827
2,770
5,281
1,078

37,03578,026
72,052
7,556
3,913
1,539
16,409216,530
107,096
19,13945,922
7,817

320
246
46,164434
288
47,7002,783
2,139
401,426

8,428
6,738
15,943(416)
30,693853
31,546
77,7108,428
6,738
15,355(138)
30,383
1,369
31,75279,45273,28758,591
138,635(3,617)
266,896
7,417
274,313675,739¥$

Non-Consolidated Statements of Income (Unaudited)Japan Transcity Corporation (Parent)
For the Six Months Ended September 30, 2007 and 2006

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
2007
2006

Thousands of
U.S. Dollars
2007

39,821$¥

38,47738,372
1,449

36,9991,478

333,670
12,600

184
(163)
(1)
20
1,469

159
(143)
12
28
1,506

1,600
(1,417)(9)174
12,774

439
141
580

387
229
616

3,817
1,226
5,043

889

¥

890

Yen
Per share:
Net income :-Basic-Diluted
Cash dividends¥

346,270

13.32
12.62
4.00

¥

$

7,731

U.S. Dollars

13.32
12.60
4.00

$

0.12
0.11
0.03

Non-Consolidated Statements of Changes in Net Assets
Japan Transcity Corporation (Parent)
For the Six Months Ended September 30, 2007 and 2006

Shareholders’ equity

Common stock

Balance at March 31, 2006
Net income for the period
Cash dividends
Bonuses to directors and corporate auditors
Purchase of treasury stock and fractional shares, net
Net changes other than shareholders’ equity
Balance at September 30, 2006¥

Balance at March 31, 2007
Net income for the period
Cash dividends
Purchase of treasury stock and fractional shares, net
Net changes other than shareholders’ equity
Balance at September 30, 2007

¥

¥

¥

8,411
  8,411
8,428
8,428

Total
Retainedshareholder’
Treasury stock
Earnings
equity        Millions of Yen

Capital surplus

¥

¥
¥

¥

6,720
6,720
6,738
6,738

Valuation and translation adjustments
Net unrealized
Total
Land
valuation andgains ontranslation
available-forrevaluation
sale securities
decrement
adjustments

¥

¥
¥

¥

14,271
890
(301)
(46)
14,814¥

15,355889(301)
15,943

¥

¥

¥

(28)
(98)
(126)

¥

(138)
(278)
(416)

¥

¥

¥

29,374
890
(301)
(46)
(98)
29,819¥30,383
889
(301)
(278)
30,693

¥

¥

¥

4,208
(591)
3,617

¥

3,387
(516)
2,871

¥

¥

¥

(2,018)(2,018)¥(2,018)(2,018)

¥

¥

¥

Total
net assets

2,190
(591)
1,599

¥

1,369
(516)
853

¥

¥

¥

31,564
890
(301)
(46)
(98)
(591)
31,41831,752
889
(301)
(278)
(516)
31,546

Thousands of U.S. Dollars                           Balance at March 31, 2007
Net income for the period
Cash dividends
Purchase of treasury stock and fractional shares, net
Net changes other than shareholders’ equity
Balance at September 30, 2007$$

73,28773,287$$58,591
58,591$$

133,522
7,731(2,618)
138,635$$(1,200)(2,417)(3,617)$$264,200
7,731(2,618)(2,417)
266,896$$

29,452(4,487)
24,965$$(17,548)(17,548)$$

11,904(4,487)
7,417

$

$

276,104
7,731(2,618)(2,417)(4,487)274,313