2010
Annual Report
For the year ended March 31, 2010

TONAMI HOLDINGS CO., LTD.

a

Capitalizing on expertise originally gained in the road haulage industry,
the Tonami Group has always been a trailblazer in the field of logistics.
We were among the first in the industry to introduce computer systems.
In recent years, we have taken systematized distribution services fully
utilizing IT to new heights. In particular, our third-party logistics (3PL),
which offers companies the optimum solutions to their logistics needs,
has enabled us to cultivate a loyal and growing customer base.
We intend to bring the accumulated expertise and business know-how
of the Tonami Holdings Group into full play not only in the field of logistics but also in related businesses and new fields.
We strive to offer value-added services that transcend the traditional
conception of logistics. As a pioneer with strengths in information processing, we are committed to delivering value a stride ahead.
By vigorously engaging in initiatives and businesses that contribute to
local communities and the environment, we aim to be an enterprise needed and welcomed by society. We are convincedthat it is a big stride toward realization of our vision:“More Than Transportation.”

We Want to Deliver Value a Stride Ahead

Contents
1 Consolidated Financial Highlights
2 To Our Shareholders and Investors
5 Corporate Governance
8 Corporate Social Responsibility Activities
9 Financial Section
34 Consolidated Subsidiaries
35 Board of Directors and Corporate Auditors
35 Corporate Data

Forward-Looking Statements
This annual report includes forward-looking statements that represent Tonami’s assumptions and expectations in light of currently available
information. These statements reflect industry trends, clients’ situations and other factors, and involve risks and uncertainties which may
cause actual performance results to differ from those discussed in the forward-looking statements in accordance with changes in thebusiness environment.

bConsolidated Financial Highlights
TONAMI HOLDINGS CO., LTD.
AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2010 and 2009
Thousands of
U.S. dollars(Note 1)Millions of yen
2010
2009

2010

FOR THE YEAR:
Operating revenues:¥113,601¥126,930$1,215,504

103,339

114,646

1,105,703

Information processing

2,950

2,829

31,564

Others

7,312

9,455

78,237

Operating income

734

670

7,854

Net income

702

244

7,511

Net income, basic

¥7.73

¥2.69

$0.0827

Net income, diluted

7.42

2.47

0.0794

Cash dividends

4.00

5.00

0.0428¥115,502¥113,141$1,235,844

45,22944,882483,940

Logistics

PER SHARE (Yen and U.S. dollars):

AT YEAR-END:
Total assets
Total net assets

Notes: 1. U.S. dollar amounts presented herein are included solely for convenience. The rate of ¥93.46 = U.S.$1, prevailing on March 31, 2010,
has been used for the translation into U.S. dollar amounts.
2. The computation of net income per share of common stock is based on the weighted average number of shares outstanding (which
represents the number of issued shares less treasury stock.) during each financial year.

Operating Revenues by
Business Segment
150(Billions of yen)

Operating Income

3

Net Income (Loss) and
Net Income (Loss) per Share, Basic(Billions of yen)

3.0

(Billions of yen)

(Yen)

30

100

2

1.5

15

50

1

0

0

0

’06

’07

’08

’09

’10

0

’06

’07

’08

’09

’10

-10.0

’06

’07

’08

’09

’10

-100

Net Income (Loss) (Left scale)
Net Income (Loss) per Share, Basic (Right scale)

Logistics
Information processing
Others01

To Our Shareholders and Investors

Chairman, Yoshihiro Minami

President, Katsusuke Watanuki

Operating Environment and Business Results

During the fiscal year ended March 31, 2010, the deterioration of the Japanese economy halted,
partly owing to the impact of a series of economic stimulus measures by the government. However,the situation remained challenging because of the appreciation of the yen and increasing deflationary pressure coupled with sluggish corporate earnings, curtailment of capital investment, and aworsening of the employment situation.
The distribution industry continued to operate in a tough business environment. Although freight
volumes edged upward as exports picked up, a decisive recovery of domestic freight volumes did
not materialize.
In these circumstances, the Tonami Group strove to expand the logistics-related businesses centering on the truck transport business, the freight forwarding business, and the third-party logistics(3PL) business. However, operating revenues decreased 10.5% from the previous year to ¥113.6 billion.
With regard to profits, operating income increased 9.6% to ¥734 million, reflecting lower fuelcosts owing to a decline in fuel prices, reduction of fixed expenses through work sharing, and cost
reductions achieved by reviewing operations. Net income soared 187.3% to ¥702 million partly as aresult of a marked improvement of non-operating income.
Total annual dividends for the year ended March 2010 amount to ¥4 per share, including theinterim dividend of ¥2 per share.
Regarding the results by segment, operating revenues from logistics-related businesses were
¥103,339 million, a decrease of 9.9% from the previous year. Although logistics demand showedsigns of recovery in the fourth quarter, reflecting our efforts to expand transactions with existingcustomers and to cultivate new customers, weak demand affecting the main operations, namely,
road haulage, 3PL, and harbor transport, in the first three quarters was not fully offset.
Operating revenues from the information processing business increased 4.3% from the previous
year to ¥2,950 million.
Operating revenues from other businesses, which include automobile repair and merchandising,decreased 22.7% to ¥7,312 million.

02

Outlook for the Year Ending March 2011

The recovery of the Japanese economy is expected to proceed at a moderate pace led by exports
spurred by growth of the emerging economies.
In the distribution industry, despite the anticipated export-led recovery, the outlook for domestic
freight volumes is unclear. In view of intensifying competition among logistics service providers in asevere business environment, further consolidation of the industry through tie-ups and M&A is inprospect.
Regarding international logistics, the trend is definitely toward the upgrading of international
logistics centers in high-growth emerging economies to meet the increasingly sophisticated needs ofcustomers.
The year to March 2011 is the final year of the Group’s 18th three-year medium-term businessplan. Throughout its businesses, the Group will emphasize selection and focus in current operations. We will deploy IT to integrate logistics information, covering goods receipt/goods issue, storage, transport and distribution, warehouse management, and delivery routes, in order to enhance
our ability to propose logistics solutions that give our customers the advantage in terms of operational efficiency and reduced costs. Moreover, we intend to strengthen the fundamentals of ourbusiness by expanding its scope.
While strengthening complementary functions among operations of Group companies, we willseek to broaden the base of the business by promoting M&A and alliances as well as through development of international logistics services.
In the fiscal year ending March 2011, we will continue reshaping our operations with a view tostrengthening the fundamentals through improvement of profitability. As a result, we expect torecord operating revenues of ¥115.0 billion, an increase of 1.2% year on year, operating income of¥1,280 million, an increase of 74.3%, and net income of ¥710 million, an increase of 1.2%.
We will continue making a concerted effort to raise business performance so as to meet the
expectations of our shareholders. In all our endeavors, we will be grateful for your continued support.
June 2010

Yoshihiro Minami
Chairman and Representative Director

Katsusuke Watanuki
President and Representative Director

03Operating Subsidiaries and Affiliates
Group companies that support
business activities in Asia

Group companies that support
domestic business operations

Transportation business:
Tonami Transportation and other companies

Warehousing business:

Tonami Transportation
Keishin Warehouse
Tonami Global Logistics and other companies

CP system:

Keishin System Research

Financial services:

Tonami Transportation
Tonami Global Logistics
Keishin Warehouse

Tonami Business Service

Temporary staffing:
Tonami Staff Support

Hokkaido Tonami Transportation
Tonami Computer Center

ANAN-TP Co., Ltd.
(Nationwide Shirobo JSE Courier)

Gosei Tonami Transportation
Fukui Tonami Transportation
Ishikawa Tonami Transportation
Niigata Tonami Transportation
Zento Transportation
Takaoka Transportation
Takefu Transportation

Shonan Tonami Transportation
Kanto Tonami Transportation
Kanagawa Tonami Transportation
Ibaragi Tonami Transportation
Saitama Tonami Transportation

Osaka Tonami Transportation
Kawai Transportation
Kansai Tonami Transportation

Chukyo Tonami Transportation
Touto Transportation

Tonami Trading, Toyo Gomu Hokuriku Hanbai, Toyama Jizake Hanbai,
Toyo Tire Toyama shop, ATS, Jessco, Takaoka Cable Network, Shogawa Kanko, etc.

Tonami Logistics Solutions

Physical distribution
consulting functions

Physical distribution
network functions

Procurement logistics

Production logistics

Raw materials (Parts etc.)
manufacturers

Factories

Environmental
logistics

Consumers

Goods returned, repairs,
waste, etc.

In-house logistics

Warehouses, distribution
centers

Sales logistics
Destinations in Japan

Wholesalers, retailers
Overseas suppliers

ExportImportDestinations overseas

International logistics
Systematized distribution (3PL), information sharing
Supply chain management (SCM)

Information systemdevelopment functions

Operational functions04

Corporate GovernanceIn line with the adoption of a pure holding company system, at a meeting of the Board of Directors held on
October 1, 2008, the Company passed a resolution concerning a basic policy for internal control systems.
The Company, with the Internal Control Committee in a central role, is constructing sound internal control
systems based on the policy with the aim of increasing the corporate value of the Tonami Holdings Group.

Description of Management Organization and State of Development of Internal Control Systems

1) Basic Explanation of the Management Organization
The Board of Directors of the Company is the organization responsible for important matters concerning business policy and business strategy. It convenes, in principle, once a month in accordancewith the Board of Directors Regulations.
Meetings of the Board of Directors are held, in principle, once a month, and as necessary, enabling
the directors to attain mutual understanding and engage in mutual supervision of the execution ofbusiness. The Board of Directors utilizes the services of outside experts as necessary to prevent violations of the law or the Articles of Incorporation.
The Company employs a corporate auditor system as part of its internal control framework. The
Board of Corporate Auditors consists of five corporate auditors (two standing corporate auditors andthree outside corporate auditors). The corporate auditors audit the legality of the directors’ actions
by attending meetings of the Board of Directors and other important meetings, by offering theiropinions, and by other means.
The corporate auditors, including the outside corporate auditors, audit the execution of businessby the directors in accordance with the auditing policy and task assignments decided by the Board of
Corporate Auditors.
In the event that a director discovers a violation of the law or the Articles of Incorporation on thepart of another director, the director is required to promptly report the violation to the corporate
auditors and the Board of Directors and a remedy will be sought. The Company has an internal
auditing unit, the Internal Audit Office, which is an organization independent of the business units.
The Company has established the Tonami Group Employee Code of Conduct as the foundation of
the Group’s compliance system. In order to promote construction of internal control systems, theCompany has established the Internal Control Committee, which is chaired by the president, and its
subordinate organizations: the Internal Control Supervisor Committee and the Internal Control
Office. The Company has established the Compliance Committee, a compliance control organization, and the Business Risk Management Committee, the cornerstone of the risk management
structure, for control, operation and provision of training in order to maintain and enhance internal
control systems.
In order to ensure appropriateness of operations of operating subsidiaries, the Company has established the Tonami Group Employee Code of Conduct and the Group Operation Regulations, which
apply to all operating subsidiaries of the Group. The Group’s individual operating subsidiaries haveestablished their own regulations based on the Group Operation Regulations.
With regard to administration of operating subsidiaries, the Group Company Administration
Procedures specify matters requiring approval by the headquarters and those to be reported.

05

2) The Relationship between the Management Organization and Internal Control
General Meeting of Shareholders
Election

Election

Auditing

Attorney
OpinionBoard of Directors(Representative directors)(Directors)

Election

Board of Corporate Auditors(Corporate auditors)(Outside corporate auditors)
Reporting

Reporting

Independent auditors

Internal Audit Office
Auditing

Supervision

Business Execution
Internal Control Committee(Internal Control Office)Internal auditing

Human Resource
Management Group

Business Planning OfficeCompliance Committee

Business Administration Group

Business Risk Management
Committee

Internal
controlInternal
controlPlanformulation,
reporting

Policypresentation,plan approvalGroup operating subsidiaries

3) Description of Management Organization and State of Development of Internal Control Systems
With regard to the design of its internal control systems, the Company has established a basic policy
concerning business risk management for the Tonami Group and is working to appropriately
respond to various types of risk that might have an effect on the operation of operating subsidiaries,
in order to stabilize the fundamentals of the Group and, should a business risk materialize, to minimize the impact and as far as possible ensure that neither a business loss nor a social loss is incurred.
The Company recognizes the importance of legal compliance and has established the Compliance
Committee to ensure compliance. The Company has appointed compliance promotion officers toinculcate corporate ethics and compliance among the officers and employees of the Group’s operating subsidiaries based on the Tonami Group Employee Code of Conduct and engages in educationand holds briefings concerning compliance.
To promote the detection of potential violations in business activities and prevent their occurrence, the Company is establishing a compliance structure to ensure reporting on the state ofcompliance implementation, swift correction of any violations that occur, and the devising of measures to prevent recurrence.
The executive officers strive to promptly execute business in accordance with the basic policy
decided by the Board of Directors, and, as necessary, obtain and refer to advice from certified public
accountants, attorneys, and other specialists concerning compliance matters.
The Company has put in place a structure enabling a rapid response to changes in the businessenvironment and strives to ensure sound management. To this end, the Group’s operating subsidiaries have established their own regulations based on the Group Operation Regulations and theCompany conducts administration of operating subsidiaries in accordance with the Group Company
Administration Procedures that specify matters requiring approval by the headquarters and those to
be reported.
The Internal Audit Office conducts internal audits to verify whether business is executed appropriately and efficiently. It reports to the corporate auditors and the Board of Directors.

064) State of Internal Auditing and Auditing by Corporate Auditors
The Internal Audit Office (four personnel) of the Company is an internal auditing unit independentof the business units and its staff assists with the work of the corporate auditors. As a means of
ensuring the Internal Audit Office’s independence from the Board of Directors, Internal Audit Office
staff changes are decided by the Board of Directors after being approved by the Board of Corporate
Auditors. The Internal Audit Office conducts periodic and unscheduled internal audits of theCompany’s business, reports to the corporate auditors and the Board of Directors, and requests
improvements.
The Company’s corporate auditors exchange information with the independent auditors, cooperate with the Internal Audit Office, conduct appropriate audits, and hold periodic meetings of theBoard of Corporate Auditors.
One standing corporate auditor and three outside corporate auditors possess significant expertiseon financial and accounting matters gained through their experience over many years.
5) Relationships between Outside Directors and Outside Corporate Auditors
The Company does not elect outside directors.
In accordance with the Companies Act, the Company has elected five corporate auditors of whomthree are elected from outside the Company in order to strengthen auditing from the third-party
standpoint without being involved in execution of the business of the Company.
The Company considers that corporate auditors who do not execute business and are independent
are conducting appropriate auditing of the supervisory function of the Board of Directors, the mainfunction of the Board of Directors.
State of Development of the Risk Management Structure

In accordance with the Tonami Group Business Risk Management Regulations, the president serves
as the Chief Risk Management Officer, risk management officers are appointed for each type of risk,
and a risk management structure is established. In the event of unforeseen circumstances, in accordance with the Tonami Group Large-scale Disaster Response Regulations and the Tonami Group
Emergency Response Regulations, the Company will establish an Emergency Response
Headquarters, which will be headed by the president. The Company will mount a rapid and appropriate response in accordance with the regulations and put in place a structure to prevent the spreadof damage and minimize damage.
To ensure the propriety of business at Group companies, the Company has established the Tonami
Group Employee Code of Conduct, conduct guidelines that apply to all Group companies. Group
companies have established regulations based on the code of conduct.
With regard to subsidiary management, matters requiring parent company approval and reportingare specified in the Management Council Regulations and subsidiaries are managed in accordancewith the Subsidiary Management Regulations.
In the event that a director discovers a violation of the law or another important matter related tocompliance in a Group company, the director is required to report the matter to a corporate auditor.
In the event that a subsidiary finds that the administration by the Company or management instructions issued by the Company violate the law or becomes aware of another compliance-related
problem, the subsidiary is required to report the matter to the Internal Audit Office or theCompliance Office. The Internal Audit Office or the Compliance Office promptly reports the matterto a corporate auditor so that the corporate auditor can express an opinion and request improvement
measures.
The Company has established the Tonami Group Internal Reporting Regulations as a Group-wide
internal reporting system concerning violations of the law and other matters related to compliance.
The Company will have no relationships with antisocial forces. The Company will take resoluteaction against any undue claims or actions by antisocial forces on the basis of cross-organizational
cooperation in close collaboration with the police and other external specialist organizations and will
never provide any benefit to antisocial forces.
07Corporate Social Responsibility Activities

Basic Policy on Corporate Social Responsibility Activities
Adhering to the action principle “Ensure compliance throughout business activities,” through selection and focus andreinforcement of the fundamentals, the Tonami Holdings Group endeavors to create value through the logistics business and fulfill its corporate social responsibility (CSR).
It is essential to ensure transportation safety, give consideration to the environment, ensure legal compliance andcompliance with other rules, respect human rights, and contribute to local communities. As a logistics expert, we areresolved to fulfill these responsibilities by adhering to corporate ethics, ensuring compliance with laws and regulations, and enhancing corporate governance.
In business activities, with the objective of achieving customer satisfaction, we are endeavoring to become anenterprise that contributes to the development of society and strives to protect the environment and where employees
can achieve job satisfaction, take pride in their work, and are motivated.
In view of the increasing concern about the impact of CO2 emissions on climate, the Group recognizes the urgent
need for more efficient use of energy. The Group is making a concerted effort involving all employees to minimize thewaste of energy throughout its business activities. This effort involves improved logistics efficiency, introduction of
low-pollution vehicles, modal shift, and our initiative to promote environmentally friendly driving through the introduction of digital tachographs.
The Environmental Division is spearheading the Group’s efforts centered on the theme “Society and theEnvironment” with the aim of contributing to establishment of a recycling-based society. Our Ecolock System supports locally self-sufficient recycling of resources. Also, as we are a certified wide-area waste disposal agent under the
Ministry of the Environment’s certification system, we can implement highly efficient, recycling activities covering an
extensive geographical area.
At present, we are working to realize practical application of the Ecozo System, which is used for proposing the
optimum recycling route for industrial waste, positioning it at the heart of our environmental logistics. We have filed
a business model patent application for the Ecozo System.
We intend to reinforce our commitment to CSR by executing socially responsible business activities in accordancewith our mission: to achieve corporate growth while protecting the environment for future generations. Throughcontinuous and sustainable activities, we strive to enhance corporate value and fulfill our social responsibility to
stakeholders.
Principal CSR Initiatives and State of Implementation
Environmental Protection Activities
Recognizing that environmental protection is a crucially important theme
that concerns the maintenance of the ecosystem, under the principle,“Contribute to society through transportation and strive to protect the environment,” we will act in accordance with the following policies.
1. We will do the following to mitigate environmental pollution caused byprovision of transportation services:(A) We will introduce environmentally friendly vehicles.
This truck runs on natural gas(B) We will practice environmentally friendly driving.
(C) We will create eco-friendly distribution systems through greater efficiency in distribution.
(D) We will establish a recycling system to contribute to establishment of a recycling-based society.
(E) We will promote development and provision of environmentally friendly products.
Annual social and(F) We will make ongoing efforts to save resources and energy and to achieve improvements every day.
environmental report
2. We will ensure compliance with environment-related laws and regulations at the national and municipal levels and other requirements that the Company undertakes to fulfill in its efforts to protect theenvironment.
3. We will set specific environmental objectives and environmental goals, conduct periodic reviews, andwork to achieve continuous improvement of environmental management systems.
4. We will communicate these policies to all employees through internal environmental education andawareness raising initiatives. At the same time, we will disclose these policies to the public. We will also
vigorously participate in environmental protection activities in local communities.

Encouraging local people to take up
badminton

Social Contributions
We are eager to contribute to local communities through various activities as a corporate citizen.
Our social contribution activities include participation involuntary clean-up campaigns, such as “neighborhood adoption” programs promoted by local government, and the donation of vehicles to social welfare facilities through theestablishment of the Tonami Shozyukai foundation.
We transport relief supplies when natural disasters occur.
The Tonami Transportation badminton club offers badmintoncoaching as a local sports promotion activity.
08

A clean-up in progressFinancial Section

10

Consolidated Five-Year Summary

11

Consolidated Financial Review

14

Consolidated Balance Sheets

16

Consolidated Statements of Income

17

Consolidated Statements of Changes in Net Assets

18

Consolidated Statements of Cash Flows

19

Notes to the Consolidated Financial Statements

09Consolidated Five-Year Summary
TONAMI HOLDINGS CO., LTD
AND CONSOLIDATED SUBSIDIARIES
Years ended March 31

2009

2010

Thousands of
U.S. dollars
2010

2006

2007

Millions of yen
2008

Operating revenues¥129,098¥130,020¥130,188¥126,930¥113,601$1,215,504

Operating cost

120,924

122,065

121,875

119,596

106,522

1,139,760

Selling, general and administrative expenses

6,117

5,936

6,426

6,664

6,345

67,890Operating income

2,057

2,019

1,887

670

734

7,854

Net income (loss)(5,050)

1,889

(911)

244

702

7,511

Depreciation expenses

2,508

2,650

2,594

2,848

3,157

28,993¥ (10.03) ¥

2.69

RESULTS OF OPERATIONS:PER SHARE (yen and U.S. dollars):
Net income (loss)
Cash dividends¥ (56.02) ¥ 20.77

¥

7.73

$

0.0827

6.00

6.00

6.00

5.00

4.00

0.0428¥ 40,682¥ 40,425¥ 36,017¥ 34,702¥ 33,860$ 362,294

Net property and equipment

64,45062,75862,194

66,63369,447743,067

Total assets

121,577

119,341

112,511113,141

115,5021,235,844

Total current liabilities

36,00434,50936,991

34,24832,617

348,994

Long-term liabilities, excluding of current portion thereof

37,99536,50929,55834,011

37,656

402,910

Total net assets

47,02948,32345,96244,88245,229483,940

7,278

7,129

7,310

7,361

7,235

YEAR-END FINANCIAL POSITION:
Total current assets

OTHER YEAR-END DATA:
Number of employees

10Consolidated Financial Review

Forward-looking statements in the discussion below represent the best judgment of the Tonami HoldingsGroup (the Company and its consolidated subsidiaries) as of the end of the fiscal year under review.

Significant Accounting Policies and Estimates

The consolidated financial statements of the Tonami Holdings Group have been prepared in accordance withaccounting principles generally accepted in Japan. Estimates used in the preparation of the consolidated financial statements that may affect the reported amounts of assets and liabilities on the closing date and the reported revenues and expenses for the reporting period are principally deferred tax assets, the allowance for
doubtful accounts, the severance and retirement benefits, and income taxes. These estimates are subject tocontinuous, reasonable assessment.
Estimates, judgments, and assessments are made on the basis of factors that are deemed reasonable in lightof past performance and conditions. However, since estimates invariably involve uncertainties, actual results
may differ from the estimates.

Analysis of Consolidated Operating Results
Overview

During the fiscal year ended March 31, 2010, although the domestic shipping index for the period fromJanuary to March 2010 showed a clear upturn compared with that for the period from October to December
2009 and that for the same period of the previous year, a decisive recovery for the full year did not materialize. Consequently, operating revenues decreased.
On the other hand, operating income increased as a result of improved productivity through the overhaulof business processes, reduced costs by cutting fixed costs, and reduced burden thanks to a decline in fuelprices.
Operating Revenues

Unit freight charges in the mainstay road haulage operations and the freight forwarding operations was lower
than the prior-year level from the second half of the previous fiscal year onward. Despite the Group’s efforts to
expand the 3PL business and other businesses, operating revenues decreased 10.5% or ¥13,329 million fromthe previous year to ¥113,601 million.
Composition of Operating Revenues
Percentage pointchange from theprevious year

Composition

Logistics:
Road haulage operations and freight forwarding operations
Warehousing operations
Harbor transport operations
Information processing business
Other businesses

+0.7
+1.2
+0.3
−0.8
+0.4
−1.1

91.0%
67.6
18.7
4.7
2.6
6.4

Operating Cost

Operating cost decreased 10.9% or ¥13,074 million from the previous year as a result of a decrease in variable
costs, which reflects lower operating revenues, reduced fuel costs thanks to a decline in diesel fuel prices,
reduced costs through the overhaul of business processes, and efforts to reduce fixed costs through work sharing.
The ratio of operating cost to operating revenues decreased 0.4 percentage points from the previous year.
Sales of Logistics

Operating Revenues

150(Billions of yen)

150

Sales of Information
Processing(Billions of yen)

3

100

100

2

50

50

1

0

’06

’07

’08

’09

’10

0

’06

11

’07

’08

’09

’10

0

(Billions of yen)

’06

’07

’08

’09

’10

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased 4.8% or ¥319 million from the previous year because,
whereas expenses associated with the change to the holding company system were recorded for the previous
year, no such expenses were recorded for the year under review, and because of the overhaul of administrative
operations.
Operating Income

Operating income increased ¥64 million from the previous year to ¥734 million. The aggregate amount of operating cost and selling, general and administrative expenses decreased 10.6% year on year and operating revenues decreased 10.5%. As a result, the ratio of operating income to operating revenues was 0.6%, an increase of
0.1 percentage points from the previous year.
Net Income

Net income amounted to ¥702 million, an increase of ¥458 million from the previous year.

Analysis of Cash Flows

Cash and cash equivalents for the year under review decreased ¥1,116 million from the previous year to¥10,360 million as a result of net cash provided by operating activities amounting to ¥4,226 million, net cashused in investing activities amounting to ¥3,488 million, and net cash used in financing activities amounting to¥1,854 million.
Cash Flows from Operating Activities

Net cash provided by operating activities totaled ¥4,226 million, an increase of ¥2,506 million from the previous year.
Principal items were income before income taxes and minority interests amounting to ¥1,234 million anddepreciation and amortization amounting to ¥3,157 million.
Cash Flows from Investing Activities

Net cash used in investing activities totaled ¥3,488 million, an increase of ¥1,687 million from the previous
year.
The principal item was payments of ¥3,198 million for the purchase of property and equipment.
Cash Flows from Financing Activities

Net cash used in financing activities totaled ¥1,854 million, an increase of ¥1,773 million from the previous
year.
While proceeds from long-term debt amounted to ¥2,600 million, cash outflows included redemption ofbonds amounting to ¥2,500 million, repayment of long-term debt amounting to ¥1,632 million, and dividends
paid amounting to ¥363 million.

Analysis of the Financial Position
AssetsCurrent assets were ¥33,860 million, a decrease of ¥2.4% from the previous fiscal year-end. This decrease wasmainly attributable to a ¥987 million decrease in cash and time deposits.
Noncurrent assets amounted to ¥81,642 million, an increase of 4.1%. This increase was attributable to anincrease in property and equipment, including a ¥2,653 million increase in land and a ¥1,789 million increasein leased assets.
As a result, total assets amounted to ¥115,502 million, an increase of 2.1% from the previous fiscal year-end.
Liabilities

Current liabilities amounted to ¥32,617 million, a decrease of 4.8% from the previous fiscal year-end. While
short-term bank loans increased ¥1,082 million, the current portion of convertible bond-type bonds with stockacquisition rights decreased ¥2,500 million.
Sales of Others

15

Net Income (Loss)

Operating Cost andOperating Income(Billions of yen)

150

(Billions of yen)

3

3.0

10

100

2

1.5

5

50

1

0

0

-10.0

0

’06

’07

’08

’09

’10

0

’06

’07

’08

’09

Operating cost (Left scale)Operating income (Right scale)

12

’10

(Billions of yen)

’06

’07

’08

’09

’10

Long-term liabilities amounted to ¥37,656 million, an increase of ¥10.7% from the previous fiscal year-end.
This increase was mainly attributable to a ¥1,932 million increase in long-term debt and a ¥1,781 million
increase in lease obligations.
As a result, total liabilities amounted to ¥70,273 million, an increase of 3.0% from the previous fiscal year-end.
Net Assets

Net assets amounted to ¥45,229 million, an increase of 0.8% from the previous fiscal year-end. The main factor
was a ¥342 million increase in retained earnings.

Risk Factors

The business environment in which the Tonami Holdings Group operates entails the risk of difficulty in absorbing cost increases due to such factors as further increases in the price of crude oil and interest rate increases thatexceed expectations.
There is also risk of difficulty in absorbing cost increases due to the further strengthening of environmental
regulations, such as regulations on diesel engine vehicle emissions and for ensuring compliance with stricter
safety regulations. In addition, the ability to recoup investment may be impeded because of factors such as deteriorating business conditions experienced by customers or the suspension of business transactions with customers.
Should any serious problems occur, such as a vehicle accident, there is a risk of loss of customer confidence
and public trust that could have an adverse impact on the Tonami Holdings Group’s business activities and business results.
In the event that the retention, development and recruitment of human resources indispensable for businessexpansion do not progress as envisaged in the growth strategy, strategic tie-ups including acquisition and capital
partnerships do not develop as planned, or that social risks materialize with respect to the Group’s overseas
business expansion, there may be an adverse impact on the Group’s business activities and business results.
The Group handles a huge amount of customer information. In the event of leakage of information, the credibility of the Group may be undermined and claims may be made for damages against the Group. In the event of
trouble concerning IT systems, there may be an adverse impact on the Group’s business results and financial
condition.
In the event that impairment becomes necessary in accordance with the impairment accounting applicable to
fixed assets for business use or there is a great change in the estimates for future taxable income, reversal ofdeferred tax assets will be required, and, as a result, there may be an adverse impact on the Group’s businessresults and financial position.

Strategic Position and Outlook

The recovery of the Japanese economy is expected to proceed at a moderate pace led by exports spurred by
growth of the emerging economies.
In the distribution industry, despite the anticipated export-led recovery, the outlook for domestic freight volumes is unclear. In view of intensifying competition among logistics service providers in a severe business environment, further consolidation of the industry through tie-ups and merger & acquisition is in prospect.
Regarding international logistics, the trend is definitely toward the upgrading of international logistics centersin high-growth emerging economies to meet the increasingly sophisticated needs of customers.
In the final year of the Group’s 18th three-year medium-term business plans, the Group will emphasize selection and focus in current operations. We will deploy IT to integrate logistics information, covering goods
receipt/goods issue, storage, transport and distribution, warehouse management, and delivery routes, in order toenhance our ability to propose logistics solutions that give our customers the advantage in terms of operational
efficiency and reduced costs. Moreover, we intend to strengthen the fundamentals of our business by expanding
its scope.
While strengthening complementary functions among operations of Group companies, we will seek to broaden the base of the business by promoting M&A and alliances as well as through development of international
logistics services.
Net Cash Used in Investing
Activities

Net Cash Provided byOperating Activities
6(Billions of yen)

0(Billions of yen)

Total Assets andNet Assets
150

4

-2

100

2

-4

50

0

’06

’07

’08

’09

’10

-6

’06

’07

’08

’09

’10

0

(Billions of yen)

’06

’07

Total assets
Net assets

13

’08

’09

’10

Consolidated Balance Sheets
TONAMI HOLDINGS CO., LTD.
AND CONSOLIDATED SUBSIDIARIESAs of March 31, 2010 and 2009ASSETS

Thousands of
U.S. dollars(Note 1)
2010

Millions of yen
2010
2009

Current assets:
Cash and time deposits¥ 10,511¥ 11,498$ 112,465

—

—

—

19,714

19,654

210,935

(32)

(39)

(342)

Investments in lease assets

325

227

3,477

Inventories

609

673

6,516

Marketable securities (Note 11)
Trade receivables:
Notes and accounts (Note 5)
Less: allowance for doubtful accounts

Deferred tax assets (Note 15)

671

645

7,180

2,062

2,044

22,06333,86034,702362,294Land

40,39737,744432,238

Buildings and structures

20,871

22,142

223,316

Machinery and vehicles

2,257

2,447

24,149Leased assets

5,252

3,463

56,195Construction in progress

—

147

—

Other

670

690

7,169

69,447

66,633743,067

5,718

4,964

61,181

Deferred tax assets (Note 15)

749

1,301

8,014

Goodwill

—

361

—

5,728

5,180

61,288Other current assets
Total current assets

Property and equipment (Notes 3, 4, 6 and 9):

Total property and equipment

Investments and other assets:
Investments in securities (Note 11)

Other
Total investments and other assets
Total assets
The accompanying Notes are an integral part of these statements.

14

12,195

11,806130,483¥115,502¥113,141$1,235,844

LIABILITIES AND NET ASSETS

Thousands of
U.S. dollars(Note 1)
2010

Millions of yen
2010
2009

Current liabilities:
Short-term bank loans (Note 4)¥ 14,023¥ 12,941$ 150,043

1,108

1,216

11,855

—

2,500

—

Trade notes and accounts payable

9,811

10,001

104,975

Lease obligations

1,117

769

11,952

497

399

5,318

Current portion of long-term debt (Note 4)
Current portion of bonds with stock acquisition rights (Note 4)

Income taxes payable
Other current liabilities

6,061

6,422

64,851

32,61734,248348,994

Long-term debt, less current portion thereof (Note 4)

10,336

8,404

110,593

Lease obligations

4,895

3,114

52,375

Deferred tax liabilities from revaluation reserve for land (Note 6)

5,455

5,455

58,367

Total current liabilities
Long-term liabilities:

Employees’ severance and retirement benefits (Note 13)

15,306

15,643

163,771Retirement benefits for directors and corporate auditors

190

211

2,033

Negative goodwill

385

4

4,119

Other long-term liabilities

1,089

1,180

11,652

Total long-term liabilities

37,65634,011

402,910

Total liabilities

70,273

68,259751,904

Net assets
Shareholders’ equity (Note 14):
Common stock:
Authorized: 299,200,000 shares in 2010
299,200,000 shares in 2009
Issued: 97,610,118 shares in 2010
14,183

14,183

151,755

Capital surplus

97,610,118 shares in 2009

11,682

11,682

124,995

Retained earnings

14,734

14,392

157,650

Treasury stock, at cost: 6,822,582 shares in 2010
6,803,610 shares in 2009
Total shareholders’ equity(2,012)(2,008)(21,528)

38,587

38,249412,872

Valuation and translation adjustments:
Unrealized gain on securities
Revaluation reserve for land (Note 6)
Total valuation and translation adjustments

480

233

5,136

5,787

5,787

61,920

6,267

6,020

67,056

375

613

4,012

45,22944,882483,940¥115,502¥113,141$1,235,844

Minority interests:
Minority interests
Total net assets
Total liabilities and net assets

15

Consolidated Statements of Income
TONAMI HOLDINGS CO., LTD.
AND CONSOLIDATED SUBSIDIARIESFor the years ended March 31, 2010 and 2009
Thousands of
U.S. dollars(Note 1)
2010

Millions of yen
2010
2009

Operating revenues:
Operating revenues¥113,601¥126,930$1,215,504

113,601

126,930

1,215,504

106,522

119,596

1,139,760

6,345

6,664

67,890112,867

126,260

1,207,650

734

670

7,854

Interest and dividend income

237

322

2,536

Equity in earnings of unconsolidated subsidiaries and affiliates

62

89

663

Loss on sale of property and equipment, net

(110)

(257)

(1,177)

Interest expenses

(344)

(363)

(3,681)

Impairment losses

—

(145)

—

Other, net

655

831

7,008

500

477

5,349

1,234

1,147

13,203Current

852

852

8,674

Deferred

22

22

224

509

874

5,446

23

29

246

Operating costs and selling, general and administrative expenses:
Operating cost (Note 16)
Selling, general and administrative expenses (Note 16)
Operating income
Other income and expenses:

Income before income taxes and minority interests
Income taxes (Note 15):

Minority interests
Net income¥

The accompanying Notes are an integral part of these statements.

16

702

¥

244

$

7,511

Consolidated Statements of Changes in Net Assets
TONAMI HOLDINGS CO., LTD.
AND CONSOLIDATED SUBSIDIARIESFor the years ended March 31, 2010 and 2009

Millions of yen
Shares ofcommonstock(thousands)

Balance as at March 31, 2008

Cash dividends applicable tothe year (¥6.00 per share)
Net income
Treasury stock
Sales of treasury stock
Net changes in items other thanshareholders’ equity

Balance as at March 31, 2009

Cash dividends applicable tothe year (¥5.00 per share)
Net income
Increase in retained earnings due to sales ofinvestments in consolidated subsidiaries
Treasury stock
Net changes in items other thanshareholders’ equity

Balance as at March 31, 2010

Commonstock

CapitalsurplusRetainedearnings

97,610 ¥14,183 ¥12,229 ¥14,148
(545)

244

(2)

Treasury
stock

Total
Total
Unrealized Revaluation valuation andshareholders’ gain on
reservetranslation Minority
equitysecurities
for land adjustments interests¥(2,001) ¥38,559(14)
7¥1,020¥5,787

(545)
244
(14)
5

¥6,807¥596 ¥45,962

—

(545)
244
(14)
5

(787)
¥6,02017(770)¥613 ¥44,882

97,610 ¥14,183 ¥11,682 ¥14,392—¥(2,008) ¥38,249

(363)
702

(363)
702

(363)
702

4
(4)

4
(4)

4

(4)

—
97,610 ¥14,183 ¥11,682 ¥14,734 ¥(2,012) ¥38,587(787)¥233 ¥5,787

Total
net assets

247
¥480

¥5,787247¥6,267(238)
8¥375 ¥45,229

Thousands of U.S. dollars (Note 1)
Commonstock

Balance as at March 31, 2009

Cash dividends applicable tothe year ($0.0535 per share)
Net income
Increase in retained earnings due to sales ofinvestments in consolidated subsidiaries
Treasury stock
Net changes in items other thanshareholders’ equity

Balance as at March 31, 2010

CapitalsurplusRetainedearnings

Treasury
stock

Total
Total
Unrealized Revaluation valuation andshareholders’ gain on
reservetranslation Minority
equitysecurities
for land adjustments interests$151,755 $124,995 $153,985 $(21,482) $409,253(3,887)
7,511
41

(46)

17

$6,563 $480,231(3,887)
7,511(3,887)
7,511

41
(46)

41
(46)

—
$151,755 $124,995 $157,650 $(21,528)$412,872

The accompanying Notes are an integral part of these statements.

$2,495 $61,920 $64,415

Total
net assets

2,641
2,641
$5,136 $61,920 $67,056(2,551)90$4,012 $483,940

Consolidated Statements of Cash FlowsTONAMI HOLDINGS CO., LTD.
AND CONSOLIDATED SUBSIDIARIESFor the years ended March 31, 2010 and 2009

Millions of yen
2010
2009

Cash flows from operating activities:
Net income before income taxes and minority interests
Depreciation and amortization
Impairment losses
Loss on disposal of property and equipment
Loss (gain) on sales of investments in securities
Loss on devaluation of investments in securities
Loss on devaluation of golf club memberships
Amortization of goodwill
Equity in earnings of unconsolidated subsidiaries and affiliates(Decrease) increase in allowance for doubtful accounts
Decrease in employees’ severance and retirement benefits
Decrease in directors’ and corporate auditors’ retirement benefits
Increase (decrease) in accrued bonuses to employees
Interest and dividend income
Interest expenses(Increase) decrease in trade receivables
Decrease (increase) in inventories
Decrease increase in accounts payable
Increase (decrease) in accrued consumption taxes
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities

Thousands of
U.S. dollars(Note 1)2010$ 13,203
33,777
—
1,175
0

—
104
(62)
(57)
(396)
(18)
20
(237)
344
(11)
58
(189)
447
186
4,697
237
(355)
(355)
4,224

¥ 1,147
2,848
145
257
(855)
297
22
112
(89)
9
(899)
(3)
(73)
(322)
363
1,515
(131)
(2,187)
(323)
380
2,213
919
(332)
(1,080)1,720

Cash flows from investing activities:
Purchase of time deposits
Proceeds from redemption of time deposits
Proceeds from sales of marketable securities
Purchase of property and equipment
Proceeds from sales of property and equipment
Purchase of investments in securities
Proceeds from sales of investments in securities
Proceeds from redemption of investments in securities
Proceeds from acquisition of investments in subsidiaries
Proceeds from sales of investments in subsidiaries
Payments for acquisition of subsidiaries resulting in changes in scope of consolidation
Investments in loans receivable
Proceeds from collection of loans receivable
Other, net
Net cash used in investing activities

(138)
18
—
(3,198)
71
(198)
11
50
31
6
(35)
(250)
300
(156)
(3,488)(27)
37
20(3,305)
210
(69)
910
500
—
—
0
(23)
34
(88)
(1,801)(1,477)
193—(34,217)765(2,118)
116
535
328
61
(378)
(2,676)
3,215(1,668)(37,321)

Cash flows from financing activities:
Net decrease in short-term loans
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from issuance of bonds
Redemption of bonds
Proceeds from sales of treasury stock
Purchase of treasury stock
Dividends paid
Dividends paid to minority interests
Repayment of lease obligations
Net cash used in financing activities

950
2,600
(1,632)—(2,500)
—
(4)
(363)
(4)
(900)
(1,853)

3,432
3,094
(1,327)3,000(7,000)
5
(14)
(545)
(10)
(716)
(81)

10,15927,819(17,463)—(26,749)—(46)(3,887)(46)(9,631)(19,844)(1,117)
11,476¥10,359(162)
11,638¥11,476(11,949)
122,790$110,841

Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 8)
The accompanying Notes are an integral part of these statements.

18¥ 1,234
3,157
—
110
0
7

72

—
1,116
(659)
(607)
(4,239)(189)
214(2,532)
3,680
(115)
621
(2,020)4,787
1,995
50,2792,532(3,797)(3,798)45,216

Notes to the Consolidated Financial Statements
TONAMI HOLDINGS CO., LTD.
AND CONSOLIDATED SUBSIDIARIES

1 Basis of presenting financial statements
The accompanying consolidated financial statements have been prepared based on the accounts maintained by
Tonami Holdings Co., Ltd. (the “Company”) and consolidated subsidiaries in accordance with accounting principles generally accepted in Japan, which differ in certain respects as to the application and disclosure requirements of International Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been
made to the Company’s consolidated financial statements issued domestically in order to present them in a format which is more familiar to readers outside Japan. In addition, certain reclassifications have been made in the2009 financial statements to conform to the classifications used in 2010.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which theCompany is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts areincluded solely for the convenience of readers outside Japan and have been made at the rate of ¥93.04 to U.S.$1,
the approximate rate of exchange at March 31, 2010. Such translations should not be construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.

2 Summary of significant accounting policies(a) Consolidation

The accompanying consolidated financial statements as of March 31, 2010 include the accounts of theCompany and its 30 (31 in 2009) consolidated subsidiaries and 6 (5 in 2009) affiliates accounted for by theequity method.
Under the control or influence concept, those companies in which the Company, directly or indirectly, isable to exercise control over operations are fully consolidated, and those companies over which the Company
has the ability to exercise significant influence are accounted for by the equity method. A subsidiary which isconsidered to be insignificant as a whole in view of total assets, operating revenues, net income and retained
earnings is excluded from the scope of consolidation, nor accounted for by the equity method.
The difference between the cost of an acquisition and the fair value of the net assets of the acquired subsidiary at the date of acquisition is being equally amortized over a period of 5 years or 20 years after incurred.
However, if the amount is immaterial, it is fully charged to income at the date of acquisition.
All significant intercompany balances and transactions have been eliminated in consolidation.
(b) Marketable securities and investments in securities

Securities, except for investments in unconsolidated subsidiaries and affiliates, are classified as trading securities, held-to-maturity securities or other securities. Trading securities are carried at fair value. Held-to-maturity
securities are carried at amortized cost. Marketable securities classified as other securities are carried at fairvalue with any unrealized gain or loss reported as a separate component of net assets, net of taxes.
Non-marketable securities classified as other securities are carried at cost determined by the moving-averagemethod.
Cost of securities sold is determined principally by the moving average method.
(c) Inventories

Inventories are stated at the lower of cost, determined principally by the last purchase price method or partiallyby the specific identification method, or net selling value.
(d) Derivatives

Derivative financial instruments are stated at fair value.
Interest-rate swaps which meet specific matching criteria and qualify for hedge accounting treatment are not
re-measured at market value; however, the differentials paid or received under the respective swap agreements
are recognized and included as interest expense or income.
(e) Property and equipment and intangible assets

Property and equipment are stated at cost. However, under Japanese tax law, capital gains arisen from disposals
and other similar transactions are deducted from the cost of the property and equipment acquired in substitution.
Depreciation of property and equipment, except for leased assets, is computed by the declining balancemethod over the useful life of the assets as determined by law, except for buildings and structures, which are
depreciated by the straight-line method.
19

The ranges of useful lives of principal property and equipment are as follows:
Buildings and structures . . 2—65 years
Machinery and vehicles . . . 2—17 years
Leased assets under the finance lease arrangements which do not transfer ownership of the leased assets tothe lessee are depreciated by the straight-line method over the respective lease periods without residual values.
However, if the guaranteed salvage value is specified in the lease contracts, they are depreciated by thestraight-line method considering such salvage value.
Finance leases which commenced prior to April 1, 2008 and do not transfer ownership of the leased assets
are accounted for as operating lease transactions as before.
Amortization of intangible assets is principally computed using the straight-line method on the presumptionof having no salvage value.
(f) Allowance for doubtful accounts

Allowance for doubtful accounts is provided in an amount sufficient to cover possible losses on collection.
Said amount is computed by applying the rate of actual losses on collection experienced in the past withrespect to general trade receivables and by individually reviewing their collectibility with respect to certain
doubtful receivables.
(g) Employees’ severance and retirement benefits

Full-time employees of the Company and its consolidated subsidiaries are entitled to a lump-sum payment
upon retirement or severance of employment. In order to provide for the employees’ severance and retirement
benefits, the Company and its consolidated subsidiaries assume a liability for severance and retirement benefits,
which is included in the liability section of the consolidated balance sheet, based on the estimated amounts ofprojected benefit obligation and plan assets at the balance sheet dates.
Past service costs are recognized in expenses using the straight-line method over 9 years (a period notexceeding the employees average remaining service years) commencing with the year incurred.
Actuarial gains and losses are recognized in expenses using the straight-line method over 9 years (a period
not exceeding the employees’ average remaining service years) commencing with the year following theiroccurrence.
(Change in accounting policy)
Effective the year ended March 31, 2010, the Company adopted ASBJ Statement No. 19 “Partial
Amendments to Accounting Standard for Retirement Benefits (Part 3)”, issued by the ASBJ in July 2008.
Under the previous accounting standard, the Company could use a rate considering the yield during certain
period as the discount rate to be applied in computing the projected benefit obligation, but decided to use thediscount rate determined by reference to market yields at the end of the fiscal year pursuant to the amended
accounting standard. There is no effect of this change on operating income and income before income taxes
and minority interests, since unrecognized actuarial difference is to be amortized from the following year. The
unrecognized amount of projected benefit obligation incurred from the adoption of the amended accounting
standard amounts to ¥202 million ($2,167 thousand) at March 31, 2010.
(Additional information)
Prior to April 1, 2009, past service costs and actuarial gains and losses had been recognized over 10 years.
However, as a result of the review on the employees’ remaining service years, the recognition period waschanged from 10 years to 9 years effective the year ended March 31, 2010. As a result of this change, as compared to the previous accounting treatment, operating income and income before income taxes and minority
interests for the year ended March 31, 2010 decreased by ¥217 million (US$2,329 thousand).
The effect on the segment information is described in Note 18, “Segment Information”.
(h) Retirement benefits for directors and corporate auditors

Some consolidated subsidiaries provide necessary payments to directors and corporate auditors at the end of
the fiscal year determined according to internal company rules to a reserve for retirement benefits for directors
and corporate auditors.
(i) Foreign currency translation

All monetary assets and liabilities denominated in foreign currencies are translated into yen at the current
exchange rates at the balance sheet date, and any gain or loss on translation is credited or charged to income.

20

(j) Income taxes

Income taxes consist of corporate income tax, inhabitant taxes and enterprise tax.
The Company and its consolidated subsidiaries recognize tax effects of temporary differences between the
carrying amounts of assets and liabilities for tax and financial reporting.
(k) Cash equivalents

Cash equivalents include deposits placed with banks on demand and highly liquid investments with insignificant risk of changes in value which have maturities of three months or less when purchased.
(l) Net income per share

Basic income per share is computed using the weighted-average number of shares of common stock outstanding, which represents the number of issued shares less treasury stock, during each year.

3 Property and equipment
Depreciable property is stated at the net book value in the consolidated balance sheets. The amounts of accumulated depreciation were ¥51,972 ($556,098 thousand) million and ¥47,818 million on March 31, 2010 and2009, respectively.
Capital gains resulting from disposals and other similar transactions are deducted from the cost of property
and equipment acquired in substitution. The amounts deducted from the cost of property and equipment were¥195 million ($2,083 thousand) and ¥195 million on March 31, 2010 and 2009, respectively.

4 Short-term bank loans and long-term debt(a) Short-term bank loans

Short-term bank loans as at March 31, 2010 and 2009 were as follows:—
Millions of yen
2010
2009

SecuredUnsecured¥ 3,453
10,570¥ 3,010
9,931

Thousands of
U.S. dollars
2010$ 36,946
113,097

Interest rates range from 0.655% to 2.550%.
(b) Long-term debt

Long-term debt as at March 31, 2010 and 2009 was as follows:—
Millions of yen
2010
2009

0.00% ¥2.5 billion unsecured convertible bond type-bonds
with stock acquisition rights due 2009
2.11% ¥3.0 billion unsecured straight bonds due 2013
1.000%-3.300% loans from financial institutions due 2011 to 2015
and thereafter
SecuredUnsecured
Total
Less: amount due within one year

Thousands of
U.S. dollars
2010

—
3,000

¥ 2,500
3,000

$

1,675
6,769
11,444
1,108¥10,336

989
5,631
12,1203,716¥ 8,404

17,922
72,427
122,448
11,855$110,593¥—32,099The maturity date of the ¥3.0 billion 2.11% unsecured straight bonds, issued in June 2008 is June 5, 2013.
The annual maturities of long-term debt outstanding as at March 31, 2010 are as follows:—
Year ending March 31,

Millions ofyen

Thousands of
U.S. dollars

2011
2012
2013
2014
2015 and thereafter¥1,108
778
632
2,481
3,445

$11,855
8,324
6,762
26,54636,86221

(c) Pledged assets

Property and equipment having a net value of ¥15,166 million ($162,272 thousand) was pledged as collateralfor short-term bank loans and long-term debt as at March 31, 2010.

5 Contingent liabilities
As at March 31, 2010, the Company was contingently liable as follows:—
Notes endorsed
OthersMillions ofyen

Thousands of
U.S. dollars

¥ 20
429

$ 2144,590

6 Revaluation reserve for land
In accordance with the Law concerning Revaluation of Land enacted on March 31, 1998, the Company has
revaluated its owned land used for business operations as at March 31, 2000 and reported a revaluation reserve
for land under “Net assets”.
The revaluated book value of land was determined based on the value of land registered on the cadastres ortheir supplementary records, which are provided by the Local Tax Law under the Law Concerning Revaluationof Land, after making reasonable adjustments.
Difference between the fair market value of revalued land at March 31, 2010
and the revalued book value

Millions ofyen

Thousands of
U.S. dollars¥10,491$112,251

7 Overdraft facility and credit line commitment agreements
The Company has entered into overdraft facility and credit line commitment agreements with ten banks for the
purpose of efficient procurement of working capital.
Outstanding balance of unused credit concerning overdraft facility and credit line commitment agreements
at March 31, 2010, was as follows:
Maximum credit line of overdraft facility and commitment agreement
Used credit
Total

Millions ofyen

Thousands of
U.S. dollars¥4,000—¥4,000$42,799—$42,799

The agreements include restrictive financial covenants requiring net assets as of the fiscal year end to exceed
predetermined amount.

8 Cash flow statements
Reconciliation of cash and time deposits shown in the consolidated balance sheets and cash and cash equivalents shown in the consolidated statements of cash flows as at March 31, 2010 and 2009 are as follows:—
Millions of yen
2010
2009

Cash and time deposits
Time deposits with maturities exceeding three months
Cash and cash equivalents¥10,511(151)¥10,360¥11,498(22)¥11,476

Thousands of
U.S. dollars
2010$112,465(1,619)$110,846

9 Finance leases(a) Finance leases other than those which are deemed to transfer the ownership of the leased assets to the lessee•Contents of leased assets: Tangible fixed assets (mainly, machinery, equipment and vehicles for distribution
related business)•Depreciation method: Leased assets are depreciated by the straight-line method over the respective lease
periods without residual values. However, if the guaranteed salvage value is specified in the lease contracts,
they are depreciated by the straight-line method considering such salvage value.
(b) Finance lease transactions which commenced prior to April 1, 2008 and do not transfer ownership of theleased assets to the lessee are accounted for as operating lease transactions as before.
22

The following are pro forma amounts of the acquisition costs, accumulated depreciation, accumulated
impairment losses and net book value of leased property if they were capitalized as of March 31, 2010 and2009 for finance leases accounted for as operating leases:—Millions of yen
2010
2009

Acquisition costs:
Machinery and tools
Other assets
Accumulated depreciation:
Machinery and tools
Other assets
Accumulated impairment losses:
Machinery and tools
Other assets¥ 9,473
5,837¥15,310¥12,857
5,866¥18,723$101,359
62,455$163,814¥ 6,481
1,738¥ 8,219¥ 8,049
1,518¥ 9,567$ 69,345
18,596$ 87,941

¥

¥

$

¥
Net book value:
Machinery and tools
Other assets

Thousands of
U.S. dollars
2010

—
756
756

¥ 2,992
3,343¥ 6,335

—
756
756

—
8,089
$ 8,089¥ 4,808
3,592¥ 8,400$ 32,014
35,769$ 67,783¥Amounts of depreciation expense equivalents and interest expense equivalents for the years ended March 31,
2010 and 2009 are as follows:—
Millions of yen
2010
2009

Depreciation expense
Interest expense¥1,816228¥2,279292

Thousands of
U.S. dollars
2010$19,431
2,440

Lease payments relating to finance leases accounted for as operating leases amounted to ¥2,136 million($22,851 thousands) and ¥2,634 million, which were equal to the depreciation expense of the leased assets
computed by the straight-line method over the lease terms, for the years ended March 31, 2010 and 2009,
respectively.
In the year ended March 31, 2006, impairment losses on leased assets amounting to ¥756 million were recorded.
Since these leased assets are off-balance-sheet, the equivalent amount is included in “Other long-term liabilities”.
Impairment losses on leased assets is realized over the lease term. In the fiscal year ended March 31, 2010 and2009, reversal of impairment losses on leased assets amounting to ¥42 million ($449 thousand) was recorded.
Future minimum lease payments (including the interest portion thereon) and the balance of impairment
losses on leased assets as at March 31, 2010 and 2009 for finance leases accounted for as operating leases are
summarized as follows:—
Millions of yen
2010
2009

Due within one year
Due over one year
Total¥ 1,694
5,376¥ 7,070¥ 546

Impairment losses on leased assets¥ 2,000
7,073¥ 9,073¥ 588

Thousands of
U.S. dollars
2010$ 18,125
57,522$ 75,647$ 5,842(c) Operating leases
Millions of yen
2010
2009

Due within one year
Due over one year
Total

¥

274
3,574
¥ 3,848
23

¥

274
3,847
¥ 4,121

Thousands of
U.S. dollars
2010$ 2,932
38,241$41,173

10 Financial instruments and related disclosures
The Company adopted ASBJ Statement No. 10 “Accounting Standard for Financial Instruments” and ASBJ
Guidance No. 19 “Guidance on Disclosures about Fair Value of Financial Instruments” issued by the ASBJ in
March 2008 and discloses about information regarding financial instruments, fair value of financial instruments
and maturities of financial instruments.
(a) Financial instruments
The Group invests cash surplus, if any, in low risk financial assets and raises funds for short-term working
fund by bank borrowings. For capital investment, the Group raises necessary funds in light of capital investment plan by bank borrowings or issuance of corporate bonds. Derivatives are employed to mitigate the riskof fluctuations in interest rates, and not used for speculative purposes.
Trade receivables such as notes and accounts are exposed to customer credit risk. For such credit risk, theGroup has established the risk management system to monitor and control payment term and balances ofcustomers.
Investments in securities such as equity securities are exposed to the market risk of fluctuation in market
prices, but major components are equity securities issued by the business partners and their fair values are
periodically reported to the in-charge directors.
Trade payables and loans are exposed to the liquidity risk, but the Group controls such liquidity risk by
the monthly cash management plans prepared by each company.
(b) Fair value of financial instruments
The carrying amount, fair value and the related difference of the financial instruments as of March 31, 2010
are as follows:

Assets:Cash and time deposits
Trade receivables – notes
Trade receivables – accounts
Investments in securities (other securities)
Total assets
Liabilities:
Trade notes payable
Trade accounts payable
Short-term bank loans
Bonds
Lease obligations
Long-term debt
Total liabilities
Derivatives:

Carrying
amountMillions of yen
2010
Fair
value

¥10,511
3,218
16,496
3,453¥33,678¥10,511
3,218
16,496
3,453¥33,678

¥

¥

893
8,918
14,023
3,000
6,012
8,444
¥41,290
—

893
8,918
14,023
3,040
6,939
8,633
¥42,446—

Difference

—
—
—
—
—
—
—
—
40
927
189
¥1,156—

Thousands of U.S. dollars
2010
Carrying
Fair
Difference
amountvalue

Assets:Cash and time deposits
Trade receivables – notes
Trade receivables – accounts
Investments in securities (other securities)
Total assets
Liabilities:
Trade notes payable
Trade accounts payable
Short-term bank loans
Bonds
Lease obligations
Long-term debt
Total liabilities
Derivatives:
24$112,465
34,432
176,503
36,946$360,346$112,465
34,432
176,503
36,946$360,346

$

$

9,555
95,420150,043
32,09964,327
90,349$441,793—

9,555
95,420150,043
32,527
74,246
92,371$454,162
—

—
—
—
—
—
—
—
—
428
9,919
2,022
$12,369—For cash and time deposits, trade receivables-notes and trade receivables-accounts, the carrying amount is presented
as the fair value since the carrying value approximates the carrying amount.
For investments in securities, the fair value of equity securities is determined using the quoted price of the stock
exchanges. Unlisted equity securities whose fair value is extremely difficult to identify in the carrying amount of¥2,265 million ($24,235 thousand) are not included in the above table.
For trade notes payable, trade accounts payable and short-term bank loans, the carrying amount is presented as
the fair value since these items mature in a short time period.
For bonds, lease obligations and long-term debt, the fair value is determined using the present value of aggregatedprincipal and interest discounted at a rate assumed if the new loans or lease arrangements were made.
For derivatives, please see Note 12 “Derivative transactions”.
(c) Information about maturities of financial instruments
Annual maturities of monetary receivables and other securities with contractual maturities as of March 31, 2010
are as follows:
Millions of yen

Time deposits
Trade receivables-notes
Trade receivables-accounts
Investments in securities (other securities with contractual maturities)
Total

Due in one
year

Due after one
year throughfive years

Due after five
years throughten years¥10,476
3,218
16,496—¥30,190

¥—
—
—
68
¥ 68

¥—
—
—
9
¥9

Due in one
year

Time deposits
Trade receivables-notes
Trade receivables-accounts
Investments in securities (other securities with contractual maturities)
Total

Thousands of U.S. dollars
Due after one Due after five
year through years throughfive years
ten years$112,091
34,432
176,503—$323,026

$ —
—
—
728
$728

$—
—
—
96
$ 96

Due after two Due after three
years through years throughthree years
four years

Due after four
years throughfive years

Due after
ten years

¥—
—
—
—
¥—

Due after
ten years

$—
—
—
—
$—

Annual maturities of monetary payables as of March 31, 2010 are as follows:
Millions of yen

Bonds
Lease obligations
Long-term debt
Total

Due in one
year

Due after one
year throughtwo years

¥ —
1,117
1,108
¥2,224

¥ —
1,133
778
¥1,911

Due in one
year

Due after one
year throughtwo years$—
11,952
11,855$23,807$—12,123
8,324$20,447

¥ —
1,183
631
¥1,814¥3,0001,130
2,482¥6,612

¥

—
290
2,879
¥3,169Due after
five years

¥ —
1,159
566
¥1,725

Thousands of U.S. dollars

Bonds
Lease obligations
Long-term debt
Total

25

Due after two Due after three
years through years throughthree years
four years$—
12,658
6,752$19,410$32,099
12,091
26,557$70,747

Due after four
years throughfive years

$

—
3,103
30,805$33,908

Due after
five years$—
12,400
6,056$18,456

11 Marketable securities and investments in securities
No trading securities or held-to-maturity securities were held at March 31, 2010 or 2009. Securities classified
as other securities are included in “marketable securities” and “investments in securities” in the accompanying
consolidated balance sheets.
The components of unrealized gain or loss on marketable securities classified as other securities at March 31,
2010 are summarized as follows:—

Unrealized gain:
StocksBonds:
Corporate bonds
Other
Other
Unrealized loss:
StocksBonds:
Corporate bonds
Other
Other
Total

Carrying
value

Millions of yen
2010
Acquisition
costs¥2,752¥1,902

¥850

—
—
—

—
—
—

—
—
—

623

728

(105)

—
19
59
¥3,453—100
60¥2,790

—
(81)
(1)
¥663

Unrealized
gain (loss)

Thousands of U.S. dollars
2010
Carrying
Acquisition
Unrealized
value
costs
gain (loss)

Unrealized gain:
StocksBonds:
Corporate bonds
Other
Other
Unrealized loss:
StocksBonds:
Corporate bonds
Other
Other
Total

$29,446$20,351$9,095

—
—
—

—
—
—

—
—
—

6,666

7,789

(1,123)—203
631$36,946

—
1,070
642
$29,852

—
(867)
(11)
$7,094The components of unrealized gain or loss on marketable securities classified as other securities at March 31,
2009 are summarized as follows:—
Carrying
value

Unrealized gain:
Stocks (Note 1)
Bonds:
Corporate bonds
Other
Other
Unrealized loss:
Stocks (Note 1)
Bonds:
Corporate bonds
Other (Note 2)
Other
Total

26

Millions of yen
2009
Acquisition
costs

Unrealized
gain (loss)¥1,724¥1,176

¥548

—
—
—

—
—
—

—
—
—

1,151

1.319

(168)

—
19
50
¥2,944—100
50¥2,645

—
(81)
0
¥299

Note 1: Equity securities with fair value, classified as other securities, are restated at the fair value and related
loss on impairment in an amount of ¥244 million is charged to income for the year ended March 31,
2010. Equity securities whose fair value is 50% or less than the acquisition cost are necessarily restated
at fair value and those whose fair value is between 50% and 30% of the acquisition cost are restated atfair value, if they are judged to be unrecoverable considering the trend of the market value for the pastcertain period and performances of the issuers.
Note 2: “Other” refers to compound financial instruments and the difference between the acquisition cost andcarrying value in an amount of ¥17 million is charged as a loss. “Acquisition costs” refer to the originalacquisition costs.
Non-marketable securities classified as other securities at March 31, 2010 and 2009 amounted to ¥1,074
million ($11,492 thousand) and ¥1,069 million, respectively.
Proceeds from sales of securities classified as other securities amounted to ¥10 million ($107 thousand) and¥1 million for the years ended March 31, 2010 and 2009, respectively.

12 Derivative transactions(a) Derivative transactions to which hedge accounting is not applied
There is no applicable transaction.
(b) Derivative transactions to which hedge accounting is applied
Hedge accounting method : Special treatment for interest rate swaps
Type of transactions : Interest rate swaps:
Fixed rate payment/Floating rate receipt
Major hedged item : Long-term debt
Millions of yen
2010
2009

Contract amount Total
Due after one year
Fair value¥5,895
5,680*¥4,5004,500*

Thousands of
U.S. dollars
2010$63,075
60,775**The fair value is regarded to be included in the fair value of the long-term debt as hedged instruments, since
the interest rate swaps which qualify for hedge accounting and meet specific criteria are not remeasured at market value, but the differentials paid or received under the swap agreements are recognized and included ininterest expenses or income (special treatment).

13 Employees’ severance and retirement benefits
Employees who terminate their service with the Company and consolidated subsidiaries are, in most cases,
entitled to pension annuity payments or to a lump-sum severance payment determined by reference to thebasic rate of pay, length of service and the conditions under which the termination occurs.
The Company and certain consolidated subsidiaries have defined benefit plans, including a lump-sum payment plan and a contributory welfare pension plan and an approved retirement annuity plan. The Company
revised its pension plans and shifted them to a cash balance plan (money market-interest-rate linked type) on
June 1, 2004.
The projected benefit obligation and the funded status of the plans summarized as follows:—
Millions of yen
2010
2009

Projected benefit obligation
Plan assets
Net unrecognized amount
Employees’ severance and retirement benefits

27¥(20,563)
3,072
2,186
¥(15,305)¥(19,429)
2,662
1,124
¥(15,643)

Thousands of
U.S. dollars
2010$(220,019)
32,87023,390$(163,759)

The net unrecognized amounts were as follows:—
Thousands of
U.S. dollars
2010

Millions of yen
2010
2009

Unrecognized benefit obligation:
Adjustment for actuarial assumptions
Past service cost
Net unrecognized amounts¥4,243(2,058)¥2,185¥ 3,718(2,594)¥ 1,124$45,399(22,020)$23,379

The components of net periodic pension and severance costs excluding the employees’ contributory portion
were as follows:—
Thousands of
U.S. dollars
2010

Millions of yen
2010
2009

Service cost
Interest cost on projected benefit obligation
Expected return on plan assets
Amortization of adjustment for actuarial assumptions
Amortization of past service cost
Net periodic pension and severance costs¥ 792
471
(61)
1,141
(582)
¥1,761¥ 773
494
(23)
740
(472)
¥1,512

2010

2009

1.3%
2.5%

2.5%
2.5%

$ 8,474
5,040
(653)
12,208(6,227)$18,842

The assumptions used were as follows:—
Discount rates
Expected rates of return on plan assets

14 Net assets
The Company Law provides that an amount equal to at least 10% of the aggregate amount to be distributed as
cash dividends or cash appropriations must be transferred to the legal reserve until the additional paid-in capital, which is part of the capital surplus account, and the legal reserve, which is part of retained earnings, equals
25% of the common stock account. Transfers from the legal reserve to common stock, additional paid-in capital, and other reserves may be made by resolution of the shareholders. Under the Company Law, distributionsof reserves to shareholders may be made at any time by resolution of the shareholders. The Company’s Articles
of Incorporation also provide that the Board of Directors may make distributions to shareholders based on a
resolution of the Board of Directors, provided that such distributions are limited to once per fiscal year.
(a) Information concerning changes in net assets

Treasury stock
Class of shares

Common stock (shares)

At March 31, 2009

Increase

Decrease

At March 31, 2010

6,803,610

18,972—

6,822,582

Reason for the change:
The increase attributable to the purchase of shares less than one unit: 18,972 shares
Stock acquisition rights
Class of shares to beissued or transferred
upon exercise of stockacquisition rights

Company name

Tonami
Holdings
Co., Ltd.

Stock acquisitionrights granted
in 2004

Commonstock

Number of shares to be issued or transferred upon exercise of stock acquisition rights
At March
31, 2009

8,012,820

Increase—

Decrease

8,012,820

At March
31, 2010

Balance at
March 31, 2010
(millions of yen)——

The number of shares to be issued or transferred upon exercise of stock acquisition rights is the number of
exercisable stock acquisition rights.
Stock acquisition rights granted in 2004 pertain to yen-denominated convertible bond type-bonds withstock acquisition rights.

28

(b) Stock options(1) Details of the stock options
Company nameDate of resolution
Category and number of individuals to whom
stock options were granted*2

Class of shares and number of stock options
granted (shares) notes 1 and 2
Grant dateConditions for vesting
Eligible service period
Exercisable period

Tonami Holdings Co., Ltd.
June 29, 2005
Directors of the Company: 12
Corporate auditors of the Company: 5
Executive officers of the Company: 11
Chairmen and presidents of consolidated subsidiaries who weredeemed eligible by the directors of the Company: 22
Common stock: 1,340,000
August 9, 2005
Not definedNot defined
From July 1, 2007, to June 30, 2010

Notes:
1. The number is converted to the number of shares for presentation.
2. Individuals to whom stock options were granted and the number of stock options granted are those at thetime of resolution.
(2) Scale of stock options and changes
1) Number of stock options
Company nameDate of resolution
Prior to vesting:
At beginning (shares)
Granted (shares)
Expired (shares)
Vested (shares)
Unvested (shares)
After vesting:
At beginning (shares)
Vested (shares)
Exercised (shares)
Expired (shares)
Unexercised (shares)

Tonami Holdings Co., Ltd.
June 29, 2005
—
—
—
—
—
1,040,000——
180,000
860,000

2) Unit priceCompany nameDate of resolution
Exercise price (yen)Average stock price upon exercise (yen)Fair value on the grant date (yen)Tonami Holdings Co., Ltd.
June 29, 2005
393
—
—

29

15 Income taxes
As described in Note 2(j), the Company and its consolidated subsidiaries recognizes tax effects of temporary
differences between the carrying amounts of assets and liabilities for tax and financial reporting.
Significant components of deferred tax assets and liabilities were as follows:—
Millions of yen
2010
2009

Deferred tax assets:
Excess bonuses accrued
Excess employees’ severance and retirement benefits accrued
Excess loss on impairment of tangible fixed assets (except for leased assets)
Accumulated loss on impairment of leased assets
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized gain on securities
Reserve under Special Taxation Measures Law
Total deferred tax liabilities
Net deferred tax assets

Thousands of
U.S. dollars
2010¥ 490
6,174
3,398
221
780
11,063(4,333)6,730¥ 348
6,300
3,493
237
1,390
11,768(4,503)7,265$ 5,243
66,06036,3582,365
8,346
118,372(46,362)
72,010(301)(5,009)(5,310)¥1,420(214)(5,105)(5,319)¥ 1,946(3,221)(53,595)(56,816)$15,194

Income taxes applicable to the Company consist of corporate income tax, inhabitant taxes and enterprise tax.
Significant differences between the statutory tax rate and the Company’s effective tax rate after applying thedeferred tax accounting for the years ended March 31, 2010 and 2009 were as follows:—

Statutory tax rate
Increase (reduction) in tax resulting from:
Nondeductible expenses including entertainment, etc.
Nontaxable income including dividends received deduction, etc.
Per capita portion of inhabitant taxes
Equity in earnings of affiliates
Elimination of dividends received from consolidated subsidiaries, etc.
Change in valuation allowance related to deferred tax assets
Other
Effective tax rate

2010

2009

40.43%

40.43%

2.86(7.77)
18.47(2.02)
13.33(20.54)(1.61)
43.15%

8.08(38.97)
20.93(3.15)
37.42
7.96
3.54
76.24%

16 Supplementary income information
Supplementary income information for the years ended March 31, 2010 and 2009 is as follows:—
Millions of yen
2010
2009

Depreciation expenses
Lease and rental

Thousands of
U.S. dollars
2010¥2,8486,456¥3,157
6,101$33,779
65,27917 Amounts per share
Amounts per share of common stock for the years ended March 31, 2010 and 2009 were as follows:—
Yen

Net income per share:
Basic
DilutedCash dividends
Net assets per share:

30

2010

2009

¥ 7.73
7.42
4.00¥494.05¥ 2.692.47
5.00¥487.51

U.S. dollars
2010$0.0827
0.07940.0428$5.2862

Cash dividends per share represent the cash dividends paid during the respective years together with the interim cash dividends paid.
Basis for the calculation of net assets per share for the years ended March 31, 2010 and 2009 were as follows:—
Millions of yen
2010
2009

Total net assets as reported on the consolidated balance sheets
Deduction:
Adjusted net assets allocated in common stock:
Minority interests
Number of shares of common stock issued
Number of shares of common stock in treasury
Number of shares of common stock outstanding at the end ofyear on which net assets per share is calculated

Thousands of
U.S. dollars
2010¥44,882$483,940

44,85444,269375
613
Shares97,610,118 97,610,118
6,822,582
6,803,610

479,927
4,012¥45,229

90,787,536

90,806,508

Basis for the calculation of basic and diluted net (loss) income per share for the years ended March 31, 2010
and 2009 was as follows:—
Millions of yen
2010
2009

Net income available to shareholders of common stock:
Net income
Net income not available to shareholders of common stock(of which appropriation of bonuses to directors
and corporate auditors)
Net income available to shareholders of common stock
Weighted-average number of shares of common stock outstanding (shares)
Diluted net income available to shareholders of common stock:
Adjustments to net income:(of which commission for bonds)
Incremental number of shares of common stock(of which stock acquisition rights)

Common stock equivalents not included in calculation ofdiluted net income per share due to their non-dilutive effectThousands of
U.S. dollars
2010

¥244
—

$7,511
—

(—)
(—)
702
244
90,797,062 90,822,202

(—)
7,511

—
(—)
3,710,045(3,710,045)—(—)
8,012,820(8,012,820)

—
(—)

*1

*2

¥702
—

*1 (Stock option)
Stock options approved at the annual shareholders’ meeting of the Company held on June 29, 2005
(The number of stock acquisition rights was 860.)*2 (Stock option)
Stock options approved at the annual shareholders’ meeting of the Company held on June 29, 2005
(The number of stock acquisition rights was 1,040.)

31

18 Segment information
The Company’s business segments consist of logistics related services classified as Logistics, information processing operations classified as Information processing, and other services classified as Others.
A summary of segment information by industry segment for the years ended March 31, 2010 and 2009 was
as follows:—
For the year ended March 31, 2010

Millions of yen
Logistics

Information
processing¥103,339
58
103,397
103,621¥ (224)¥2,950
200
3,150
2,720
¥ 430Eliminations(Note 1)

Consolidated¥113,601
6,096
119,697
119,636¥
61¥
—(6,096)(6,096)(6,769)¥ 673¥113,601—
113,601
112,867¥
734¥119,614¥ 3,157¥—¥ 4,144¥(4,112)
¥
0
¥
—
¥
(5)

¥115,502¥ 3,157¥
0¥ 4,139

Eliminations(Notes 1 and 2)

Consolidated

OthersTotal¥ 7,312
5,838
13,15013,295¥ (145)

Assets, depreciation, impairment losses and capital expenditures:
Identifiable assets¥102,888¥1,738 ¥ 14,988
Depreciation¥ 2,922¥ 161 ¥
74
Impairment losses¥—¥ — ¥—
Capital expenditures¥ 3,907¥ 202 ¥
35

Operating revenues:
Outside customers
Inter segment sales
Total
Costs and expenses
Operating income (loss)

For the year ended March 31, 2009

Millions of yen
Logistics

Information
processing

OthersTotal¥114,646
17
114,663
114,901¥ (238)¥2,829
326
3,155
2,720
¥ 435¥ 9,455
7,794
17,24917,062¥
187¥126,930
8,137
135,067
134,683
¥
384

¥
—
(8,137)(8,137)(8,423)¥ 286¥126,930—
126,930
126,260¥
670

Assets, depreciation, impairment losses and capital expenditures:
Identifiable assets¥ 98,373¥1,471 ¥ 15,083
Depreciation¥ 2,570¥ 145 ¥
143
Impairment losses¥145¥ — ¥—
Capital expenditures¥ 7,687¥ 115 ¥
45¥114,927¥ 2,858¥
145¥ 7,847¥(1,786)
¥ 10
¥
—
¥
3

¥113,141¥ 2,848¥
145¥ 7,850

Eliminations(Notes 1 and 2)

Consolidated

Operating revenues:
Outside customers
Inter segment sales
Total
Costs and expenses
Operating income (loss)

For the year ended March 31, 2010

Operating revenues:
Outside customers
Inter segment sales
Total
Costs and expenses
Operating income (loss)

Thousands of U.S. dollars
Logistics

Information
processing$1,105,703
621
1,106,324
1,108,720$ (2,396)$31,564
2,140
33,704
29,103$ 4,601

OthersTotal$ 78,237 $1,215,504
62,46565,226
140,7021,280,730
142,253
1,280,077$ (1,551) $
653

Assets, depreciation, impairment losses and capital expenditures:
Identifiable assets$1,100,877$18,596 $160,368
Depreciation$ 31,265$ 1,723 $
792
Impairment losses
$
—
$
— $
—
Capital expenditures$ 41,804$ 2,161 $
374$1,279,842$ 33,779$—$ 44,340$— $1,215,504(65,226)—(65,226) 1,215,504(72,427) 1,207,650$ 7,201 $
7,854$(43,997)
$
0
$
—
$
(53)

$1,235,844$ 33,779$0$ 44,287

Note 1. Corporate assets included in the column “Eliminations” mainly consist of surplus working funds (cashand marketable securities), long-term investment funds (investments in securities), and other assets
which belong to the administrative department, amounting to ¥18,427 million ($197,165 thousand) and¥14,115 million for the years ended March, 2010 and 2009, respectively.

32

Note 2. Change in accounting method(Actuarial gains and losses on severance and retirement benefits)
As discussed in Note 2.g, prior to April 1, 2009, past service costs and actuarial gains and losses had
been recognized over 10 years. However, as a result of the review on the employees’ remaining service
years, the recognition period was changed from 10 years to 9 years effective the year ended March 31,
2010. As a result of this change, as compared to the previous accounting treatment, costs and expenses
of “Logistics”, “Information processing” and “Others” increased by ¥208 million ($2,221 thousand), ¥2
million ($24 thousand) and ¥8 million ($84 thousand), respectively and operating income increase by
the same amount.
The three business segments mainly consist of the following services:
Logistics : Road haulage, freight forwarding, warehousing, and harbor transport and customs services
Information processing : Information processing
Others : Vehicle maintenance, casualty insurance, merchandising and commissioned sales and purchases,
leasing, mail order services, and other businesses
Neither geographical segment information nor overseas sales have been presented because none of theCompany’s consolidated subsidiaries are domiciled outside Japan, and the Company and its consolidated subsidiaries had no overseas sales for the years ended March 31, 2010 and 2009.

19 Subsequent events
Cash dividends

The annual shareholders’ meeting of the Company, which was held on June 29, 2010, duly approved the payment of dividends as followed:—
Cash dividends (¥2.00 per share)

33

Millions ofyen

Thousands of
U.S. dollars¥182$1,947

Consolidated Subsidiaries

Logistics
Company NameBusiness Line

Tonami Transportation Co., Ltd.

Road haulage

Keishin Warehouse Co., Ltd.

Warehousing

Zento Transportation Co., Ltd.

Road haulage

Osaka Tonami Transportation Co., Ltd.

Road haulage

Fukui Tonami Transportation Co., Ltd.

Road haulage

Ishikawa Tonami Transportation Co., Ltd.

Road haulage

Gosei Tonami Transportation Co., Ltd.

Road haulage

Kansai Tonami Transportation Co., Ltd.

Road haulage

Kanto Tonami Transportation Co., Ltd.

Road haulage

Kanagawa Tonami Transportation Co., Ltd.

Road haulage

Ibaraki Tonami Transportation Co., Ltd.

Road haulage

Chukyo Tonami Transportation Co., Ltd.

Road haulage

Shonan Tonami Transportation Co., Ltd.

Road haulage

Kawai Transportation Co., Ltd.

Road haulage

ATS Co., Ltd.

Road haulage

Takefu Transportation Co., Ltd.

Road haulage

Saitama Tonami Transportation Co., Ltd.

Road haulage

Niigata Tonami Transportation Co., Ltd.

Road haulage

Anan Transportation Co., Ltd.

Road haulage

Nationwide Shirobo JSE Courier Co., Ltd.

Road haulage

Tonami Global Logistics Co., Ltd.

Harbor transport service

Daiichi Warehouse Co., Ltd.

Warehousing

Information Processing and Others
Company NameBusiness Line

Tonami Trading Co., Ltd.

Trading Company

Toyo Gomu Hokuriku Hanbai Co., Ltd.

Sale of tires

Toyama Jizake Hanbai Co., Ltd.

Sale of liquor

Keishin System Research Co., Ltd.

Development and sale of software

Tonami Staff Support Co., Ltd.

Detached service

Tonami Business Service Co., Ltd.

Financial service

Toyo Tire Toyama shop Co., Ltd.

Sale of tires

Tonami Automobile Technology Research Institute Co., Ltd.

Automobile technology R&D

34

Board of Directors and Corporate Auditors

Chairman and Representative Director
Yoshihiro Minami
President and Representative Director
Katsusuke Watanuki
Senior Managing Director
Kohichi Kishida
Directors
Shigeki Sakamoto
Yasuo Terabayashi
Yoshinobu Watanabe
Shigeyuki Okada
Yoshimi Nagahara
Kazuo Takata

Standing Corporate Auditors
Mitsuo Matsuda
Masafumi Takebe
Corporate Auditors
Shinichiro Inushima
Toshio Yaeda
Yohji Ishiguro(As of June 29, 2010)

Corporate Data

Issued and Outstanding Shares		
97,610,118 shares

Head Office2-12, Showa-machi 3-chome, Takaoka,
Toyama Prefecture 933-8788, Japan
Phone: (0766) 32-1073
Fax: (0766) 32-1077
Tokyo Office
3-8, Higashinihonbashi 3-chome, Chuo-ku,
Tokyo 103-0004, Japan
Phone: (03) 3664-5403
Fax: (03) 3664-5405
Date of Established

June 1943

Common Stock¥14,183 million

35

Shareholders

7,297

Employees

61(As of March 31, 2010)

TONAMI HOLDINGS CO., LTD.
URL:http://www.tonamiholdings.co.jp/

Printed in Japan on recycled paper