TONAMI TRANSPORTATION CO., LTD.
Head Office: 2-12, Showa-machi 3-chome, Takaoka, Toyama Pref., Japan
Phone: 0766-21-1073 Fax: 0766-21-3640

TONAMI TRANSPORTATION CO., LTD.
ANNUAL REPORT 2002

Printed in JapanN O N -C O N S O L I D AT E D F I N A N C I A L H I G H L I G H T S
TONAMI TRANSPORTATION CO., LTD.

Tow years ended March 31, 2002

Thousands of
U.S. dollars

Millions of yen
2001

2002

2002

Service revenues ...................................................................... ¥100,509¥ 98,462$738,927

FOR THE YEAR:

Operating income ....................................................................

1,695

1,942

14,574

Net income (loss) ....................................................................

(8,888)

578

4,338

5.92

$ 0.0444

6.00

6.00

0.0450Total assets ............................................................................... ¥109,261¥109,767$823,767

44,592

334,649

PER SHARE (yen and U.S. dollars):
Net income (loss) .................................................................... ¥ (91.05)
Cash dividends .........................................................................

¥AT YEAR-END:

Total shareholders’ equity .......................................................

44,635

Notes: 1 U.S. dollar amounts presented herein are included solely for convenience. The rate of ¥133.25 = U.S.$1,
prevailing on 29th March, 2002, 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 ofshares outstanding (which represents the number of issued shares less treasury stock.) during each financial
year.

CONTENTS
1
2
4
5
34

PROFILEA MESSAGE FROM THE PRESIDENTB O A R D O F D I R E C T O R S A N D S TAT U T O R Y A U D I T O R S
FINANCIAL SECTIONC O R P O R AT E D ATA

System Distribution –Continually More to Offer

PROFILEOne of Japan’s leading integrated distribution companies,
Tonami has been developing solutions for the distribution
needs of its customers for over 50 years. The pioneer ofcomputerized distribution systems in Japan, the Company
has a highly advanced computerized network system andstrong information technology, and has recently
completed an upgrade of its information network,
including adding mobile connections to all of its vehicles.
In addition to Tonami’s core business of road haulage
services, the Company also offers rail and air freight;
removal; warehousing; marketing, distribution andinformation management; specialty item sales; andcasualty insurance agency services.

1

A

M E S S A G E

F R O MT H E

P R E S I D E N T

PERFORMANCEThe recessionary trend in the Japanese
economy deepened during the fiscal year
under review. Amid a continued slide incommodity prices under a deflationary
trend, the impact of the bursting of the IT
bubble, the terrorist attacks on the UnitedStates, and other events caused substantial
dips in exports and in personal
consumption. In addition, acceleration in
the process of clearing bad debt off
corporate balance sheets also placed
downward pressure on the economy.
Consequently, Japan faced perhaps theharshest economic conditions in recently
history, struggling with a sharp
deterioration in corporate performances, adecline in private sector capital
investment, worsening labor conditions, and a stock market slump.
These difficult economic conditions were reflected in the transportation industry. As
a result of the downturn, mainly in manufacturing-and construction-related freight,
domestic freight tonnage declined for the second consecutive year.
To cope with these circumstances, the Company made organizational changes
aimed at speeding up its response to change in the business environment. In June
2001, Tonami reduced its number of director from 20 to 15. At the same time, theCompany reorganized its 15 business blocks into 12 business blocks and abolishedthe system of block managers also serving as branch managers. Through thesemeasures, we sought to speed up the decision-making process and strengthen
operating efficiency. Tonami made no significant capital expenditures during the
fiscal year under review.
Tonami also took steps to strengthen its sales structure. We integrated the No. 1 andNo. 2 sales divisions into a single Sales Division to improve efficiency. We also
reformed the Logistics Promotion Headquarters into a System Distribution Divisionand centralized its operations in Tokyo to strengthen our system distribution sales
structure.
In our sales activities, we worked to further improve the quality of our transport
services. Concurrently, we targeted acquiring new customers based onstrengthening our sales development, expanding sales of valued addedtransportation services, such as joint delivery systems and recycling of used or
expired documents, and expanding our system distribution business, which
proposes the most appropriate distribution system to customers.
These efforts could not overcome the effect of the weak economy on freight
tonnage, however, and service revenues declined 2.0%, to ¥98.5 billion. Thanks to2

efforts to improve productivity through effective use of our vehicle fleet, a
reduction in outsourcing expenses, and lower operating costs due to greateradministration efficiency, operating income rose 14.6%, to ¥1,942 million. Net
income, at ¥578 million, was lower than expected because of the posting of a loss
on evaluation of investments in securities. Nevertheless, net income was up
substantially from the net loss that the Company recorded in the previous year
mainly as a result of the adoption of a new accounting standard for retirement
benefits.
Looking at divisional performance, in our transportation business, revenues fromroad haulage services decreased 2.8%, accounting for 84.9% of total revenues.
Other transportation business services also declined. Revenues from removal
services dropped 12.0%, revenues from rail forwarding fell 0.1%, and revenues fromother services deceased 4.3%. In our warehousing business, however, revenues
increased 5.8%, contributing 8.8% of total revenues.
OUTLOOK
Although there are signs of recovery in the export market, we expect therecessionary trend to continue in Japan’s economy. Progressive deflation, the bad
debt problem, and other structural issues in the economy coupled with no signs ofrecovery in domestic demand have resulted in predictions of a second consecutive
year of minus growth.
The transportation industry will also have a difficult year, facing a mountain ofissues, such as more stringent environmental and safety regulations, rising fuelprices, and increased premiums for retirement benefit funds.
To guide us in our endeavors, we introduced a new three-year medium-termbusiness plan in the current fiscal year that focuses on increasing costcompetitiveness and earning power. We will take advantage of information
technologies to offer transportation services that provide a high degree of customer
satisfaction, target improved profitability by expanding our system distribution
business, and raise productivity by increasing business efficiency and concentrationof resources. In pursuing these goals, we look forward to the continued support ofour shareholders.
August 2002

Yoshihiro Minami
President and Representative Director
3

BOARDOF

DIRECTORSANDP R E S I D E N T A N D R E P R E S E N TAT I V E
DIRECTOR
Yoshihiro Minami
SENIOR MANAGING DIRECTORS
Yohsuke Konishi
Katsusuke Watanuki
MANAGING DIRECTORS
Hiroki Matsumoto
Kunihiko Shibata
Akiyoshi Kunisada
Kohichi Shimazaki

STATUTORY AUDITORSS TA N D I N G S TAT U T O R Y A U D I T O R S
Yoshitetsu Sasaki
Hisao Saito
Makoto Nagai
S TAT U T O R Y A U D I T O R
Tsutomu Uchii(As of 27th June, 2002)

DIRECTORS
Takeshi Yamagishi
Akira Fune
Tsutomu Chujoh
Noriaki Murata
Iwao Hamano
Kohichi Kishida
Shigeki Sakamoto
Takashi Suzuki

4

F I N A N C I A LS E C T I O N

6 MANAGEMENT DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL POSITION
9 NON-CONSOLIDATED FIVE-YEAR SUMMARY
10 NON-CONSOLIDATED BALANCE SHEETS
12 NON-CONSOLIDATED STATEMENTS OF
INCOME
13 NON-CONSOLIDATED STATEMENTS OF
SHAREHOLDERS’ EQUITY
14 NON-CONSOLIDATED STATEMENTS OF
CASH FLOWS
15 NOTES TO THE NON-CONSOLIDATEDFINANCIAL STATEMENTS
20 REPORT OF THE INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS ON THE NONCONSOLIDATED FINANCIAL STATEMENTS
21 CONSOLIDATED FIVE-YEAR SUMMARY
22 CONSOLIDATED BALANCE SHEETS
24 CONSOLIDATED STATEMENTS OF INCOME
25 CONSOLIDATED STATEMENTS OF
SHAREHOLDERS’ EQUITY
26 CONSOLIDATED STATEMENTS OF
CASH FLOWS
27 NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS
33 REPORT OF THE INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS ON THE
CONSOLIDATED FINANCIAL STATEMENTS

5M A N A G E M E N T DI S C U S S I O N A N D A N A LY S I S O F O P E R AT I O N S A N D F I N A N C I A L P O S I T I O N

A N A LY S I S O F O P E R AT I O N S

Service Revenues

98

99

00

01

98.5

100.5

100.2

101.0

106.7

Billions of yen

02

Revenues from
Road Haulage

Despite the extremely difficult conditions posed by the faltering Japanese
economy, sales declines for the year ended March 31, 2002 were held to 2.0%,
as sales revenues edged down to ¥98.5 billion ($739 million). During the fiscal
year under review, the Company combated the poor business climate with arange of active sales activities to increase revenues while also improving service
quality and operations management.
Looking at performance by division, our major operations, revenues from road
haulage services, decreased 2.8%, to ¥83,579 million, accounting for 84.9% of
total service revenues. Road haulage had slumped during the second half of theprevious fiscal year, and this trend continued throughout the fiscal year underreview. The Company worked hard to contain the decline in road haulage byintroducing a variety of sales efforts and service improvements.

91.3

86.2

85.6

86.0

83.6

Billions of yen

98

99

00

01

02

Revenues from
Warehousing

98

99

00

01

8.7

8.2

8.0

8.1

8.4

Billions of yen

02

Revenues from warehousing, Tonami’s second largest operations, grew 5.8%, to¥8,709 million, contributing 8.8% of total service revenues. Because of its
sophisticated systems, the Company continues to be confident that demand willremain firm for its warehousing services. Revenues from removal services,which generated 1.7% of total services revenues, declined 12.0%, to ¥1,717
million. Revenues from rail forwarding services, which contributed 1.4% of total
service revenues, edged down marginally, to ¥1,332 million, demonstrating thatrail freight continues to provide an attractive option to trucking routes becauseof more reliable scheduling and highly competitive services. Revenues fromother services rose 4.3%, to ¥3,122 million, accounting for 3.2% of total service
revenues during the fiscal year in review.
Cost of services declined 2.2%, to ¥93,679 million ($703 million). Selling,
general and administration expenses fell 5.5%, to ¥2,841 million ($21.3 million).
Overall, operating income expanded 14.6%, to ¥1,942 million ($14.6 million).
Other income and expenses improved substantially to a net expense of ¥613
million ($4.6 million) compared with ¥16,610 million in the previous fiscal year.
A sharp decline in others expenses from ¥16,408 million to ¥474 million ($3.6
million) was mainly responsible for this improvement. Interest and dividend
income decreased 25.1%, to ¥322 million ($2.4 million) while interest expenses
dropped 9.0%, to ¥364 million ($2.7 million). Income before income taxes,
therefore, amounted to ¥1,329 million ($10.0 million) compared with a loss of¥14,915 million a year earlier. Income taxes for the period increased 31.1%, to¥1,422 million ($10.7 million) while deferred income taxes dropped significantly
6Operating Income
1.27

1.54

1.70

1.94

Billions of yen
1.30

to ¥671 million ($5.0 million). Consequently, the Company recorded net incomeof ¥578 million ($4.3 million) compared with a loss of ¥8,888 million in theprevious fiscal year. Net income per share was ¥5.92 ($0.0444) compared with aloss per share of ¥91.05 in the previous year.

98

99

00

01

02

Net property and equipment declined slightly, to ¥60,023 million ($450 million)
because of disposal or sale of assets (?). Machinery and tools and vehicles
increased somewhat, and construction in progress was minimal. Tonami
continued to maintain its policy of limiting capital investment to essential areas,such as the maintenance of its haulage and warehousing network.
Investments and other assets decreased 4.8%, to ¥14,308 million ($107 million)
primarily of a loss on devaluation of marketable securities. On the other hand,
deferred tax assets increased 13.7%, to ¥4,132 million ($31.0 million).
Net Income/Net Income per Share
0.23
2.29
0.55
5.59
0.91
9.29

Current assets increased 9.6%, to ¥35,436 million ($266 million), principally as aresult of an increase in cash, which rose 74.4%, to ¥6,618 million ($49.7
million). Marketable securities edged up 11.0%, to ¥7,823 million ($58.7
million). Among trade receivables, notes and accounts receivable declined 5.6%,
to ¥17,900 million ($134 million).

98

99

00

01

02

Capital Expenditures
4.80

3.48

4.12

0.82

Billions of yen
6.35

Current liabilities rose 2.2%, to ¥28,434 million ($213 million). Accounts payable
decreased 4.2%, to ¥7,489 million ($56.2 million). Income tax payable soared
161.4%, to ¥873 million ($6.6 million), mainly because of the Company’s returnto profitability. Other current liabilities increased 5.4%, to ¥5,571 million ($41.8
million). The current ratio increased to 1.25 from 1.16 in the previous year. This
improvement was mainly due to the relative increase in current assets,principally the large growth in cash.

(8.89)(91.05)0.58
5.92

Billions of yen/yen

A N A LY S I S O F F I N A N C I A L P O S I T I O N

98

99

00

01

02

Long-term liabilities edged down slightly, to ¥36,741 million ($276 million),reflecting the declines in long-term debt, less current portion and deferred tax
liabilities to ¥9,688 million ($72.7 million) and ¥5,640 million ($42.3 million),
respectively. Employees’ severance and retirement benefits rose 2.4%, to¥21,365 million ($160 million).
Shareholders’ equity edged down 0.1%, to ¥44,592 million ($335 million),
because of a 1.1% decline in retained earnings, to ¥6,471 million ($48.6 million)
due to the payment of cash dividends. Unrealized gain from revaluation of landremained at ¥7,872 million ($59.1 million). Reflecting the small decrease in7

shareholders’ equity, the equity ratio fell marginally to 40.6% compared with
40.9% in the previous fiscal year.

Total Assets
109.8

109.3

120.7

98.9

100.0

Billions of yen

A N A LY S I S O F C A S H F L O W S

98

99

00

01

02

Cash and cash equivalents at beginning of period were ¥9,842 million ($73.9
million). Net cash provided by operating activities amounted to ¥5,549 million($41.6 million), up ¥60 million from the previous fiscal year. There was only asmall increase in net cash provided by operating activities despite the net
income posted in comparison with a loss in the previous fiscal year because theloss in prior year had been offset by a substantial increase in accrued
employees’ severance and retirement benefits. Among other significant items incash flow from operating activities, depreciation and amortization was ¥2,532
million ($19.0 million), down 23.4%.

Shareholders’ Equity

98

99

00

01

44.6

44.6

54.0

49.4

49.5

Billions of yen

02

Net Cash Provided by Operating Activities

Net cash used in investing activities amounted to ¥490 million ($3.7 million)
compared with net cash provided in the previous fiscal year. The main
contributor to this reversal was proceeds from sales of marketable securities,
which decreased ¥8,178 million, to ¥803 million ($6.0 million). Purchase ofproperty and equipment fell ¥3,616 million, to ¥948 million ($7.1 million).
Net cash used in financing activities amounted to ¥1,039 million ($7.8 million)
compared with ¥13,846 million a year earlier. The principal reason for thisdecline was the lack of the ¥18,823 million redemption in bonds recorded in
the previous fiscal year. Among fund procurement, increase in short-term loans
amounted to ¥80 million ($0.6 million) and proceeds from long-term debt
amounted to ¥533 million ($4.0 million). Cash and cash equivalents at the endof the period, therefore, increased by ¥4,020 million ($30.2 million) to ¥13,862
million ($104 million), providing adequate liquidity for operations.

4.19

5.49

5.55

Billions of yen

00

01

02

8

NON-CONSOLIDATED FIVE-YEAR SUMMARY TONAMI TRANSPORTATION CO., LTD

Years ended 31st March

Thousands of
U.S. dollars

Millions of yen
1998

1999

2000

2001

2002

2002

Service revenues .......................................................

¥106,736¥100,962¥100,291¥100,509¥ 98,462$738,927

Cost of services .........................................................

102,871

97,01996,07095,80893,679703,032

and administrative expenses ..................................

2,562

2,675

2,678

3,006

2,841

21,321

Operating income .....................................................

1,303

1,268

1,543

1,695

1,942

14,574

Income (loss) before income taxes ..........................

922

1,486

2,061

(14,915)

1,329

9,974

Net income (loss) ......................................................

226

551

910

(8,888)

578

4,338

Capital expenditures .................................................

6,350

4,794

3,483

4,117

823

6,176

Depreciation expenses .............................................

4,064

3,687

3,458

3,305

2,532

19,002

Net income (loss) ......................................................

¥ 2.29¥ 5.59¥ 9.29¥(91.05)¥ 5.92$0.0444

Cash dividends ..........................................................

7.50

6.75

6.00

6.00

6.00

0.0450Total current assets ...................................................

¥ 41,589¥ 40,617¥ 48,404¥ 32,346¥ 35,436$265,936

Net property and equipment ....................................

47,60848,217

61,731

61,88360,023

450,454

Total assets ................................................................

99,95998,901

120,697

109,261

109,767

823,767

Total current liabilities ..............................................

27,136

26,21045,971

27,82428,434

213,388

current portion thereof ...........................................

23,301

23,32420,70636,802

36,741

275,730

Total shareholders’ equity ........................................

49,52249,36754,02044,63544,592

334,649

Number of share outstanding (thousand) ...............

98,41098,41097,61097,61097,610

Number of employees ..............................................

6,195

5,952

5,757

5,636

5,548

RESULTS OF OPERATIONS:

Selling, general

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

YEAR-END FINANCIAL POSITION:

Long-term liabilities, excluding of

OTHER YEAR-END DATA:

9NON-CONSOLIDATED BALANCE SHEETSTONAMI TRANSPORTATION CO., LTD

As of 31st March, 2001 and 2002

Thousands of
U.S. dollars(Note 1)Millions of yen
2001

2002

2002

6,618

$ 49,666

ASSETS
Current assets:
Cash ..............................................................................................................................................

¥ 3,794¥

Marketable securities (Note 3) ....................................................................................................

7,050

7,823

58,709Notes and accounts (Notes 7 and 10) ...................................................................................

18,971

17,900134,334

Less: allowance for doubtful accounts ..................................................................................

(45)

(46)

(345)

Inventories ...................................................................................................................................

152

142

1,066

Deferred tax assets (Note 6) .......................................................................................................

365

549

4,120

Other current assets .....................................................................................................................

2,059

2,450

18,386

Total current assets .......................................................................................................

32,34635,436

265,936

Land ..............................................................................................................................................

35,96835,968269,928

Buildings and structures ..............................................................................................................

40,366

40,588

304,600

Machinery and tools ....................................................................................................................

5,537

5,868

44,038

Vehicles ........................................................................................................................................

22,425

19,761

148,300

Construction in progress .............................................................................................................

0

1

8

Less: accumulated depreciation ..................................................................................................

(42,413)(42,163)(316,420)

Net property and equipment ........................................................................................

61,88360,023

450,454

Investments in securities (Note 5) ..............................................................................................

5,222

4,511

33,854

Investments in subsidiaries and affiliates ...................................................................................

1,776

1,584

11,887Loans to employees .....................................................................................................................

28

27

203

Deferred tax assets (Note 6) .......................................................................................................

3,565

4,054

30,424

Others ...........................................................................................................................................

4,441

4,132

31,009Total investments and other assets ..............................................................................

15,032

14,308107,377

Total assets ....................................................................................................................

¥109,261¥109,767$823,767

Trade receivables:

Property and equipment (Notes 4 and 5):

Investments and other assets:

The accompanying Notes are an integral part of these statements.

10Thousands of
U.S. dollars(Note 1)Millions of yen
2001

2002

2002

Short-term bank loans (Note 5) ..................................................................................................

¥ 13,440¥ 13,520$101,463

Current portion of long-term debt (Note 5) ...............................................................................

533

578

4,338

Accounts payable (Note 7) ..........................................................................................................

7,819

7,489

56,203

Deposits from employees ...........................................................................................................

413

403

3,024

Income taxes payable ..................................................................................................................

334

873

6,551

Other current liabilities ................................................................................................................

5,285

5,571

41,809Total current liabilities ..................................................................................................

27,82428,434

213,388

Long-term debt, less current portion thereof (Note 5) ..............................................................

10,267

9,688

72,705

Deferred tax liabilities from revaluation of land (Note 11) .......................................................

5,640

5,640

42,327

Employees’ severance and retirement benefits ..........................................................................

20,85821,365160,338

Other long-term liabilities ...........................................................................................................

37

48

360

Total long-term liabilities ..............................................................................................

36,802

36,741

275,730

Total liabilities ...............................................................................................................

64,626

65,175489,118

97,610,118 shares in 2002 ...................................................................................

14,183

14,183

106,439

Additional paid-in capital ............................................................................................................

14,687

14,687110,221

Legal reserve ................................................................................................................................

1,228

1,261

9,463

Unrealized gain from revaluation of land (Note 11) .................................................................

7,872

7,872

59,077Retained earnings ........................................................................................................................

6,542

6,471

48,563

Unrealized gain from securities ..................................................................................................

123

120

901

Treasury stock, at cost (Note 3) ..................................................................................................

—

(2)

(15)

Total shareholders’ equity ............................................................................................

44,63544,592

334,649

Total liabilities and shareholders’ equity .....................................................................

¥109,261¥109,767$823,767

LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent liabilities:

Long-term liabilities:

Contingent liabilities (Note 9)

Shareholders’ equity (Note 12):
Common stock:
Authorised: 299,200,000 shares in 2001
299,200,000 shares in 2002
Issued, par value ¥50 per share:
97,610,118 shares in 2001

11

NON-CONSOLIDATED STATEMENTS OF INCOME

TONAMI TRANSPORTATION CO., LTD.

For the two years ended 31st March, 2002

Thousands of
U.S. dollars(Note 1)Millions of yen
2001

2002

2002

¥100,509¥98,462$738,927

Cost of services (Notes 7 and 13) ...............................................................................................

95,80893,679703,032

Selling, general and administrative expenses (Note 13) ...........................................................

3,006

2,841

21,321

98,81496,520724,353

1,695

1,942

14,574

Interest and dividend income (Note 7) ......................................................................................

430

322

2,417

Gain on disposal of property and equipment, net ....................................................................

(232)

(97)

(728)

Interest expenses .........................................................................................................................

(400)

(364)

(2,732)Others ...........................................................................................................................................

(16,408)(474)(3,557)(16,610)(613)(4,600)(120,378)

1,329

9,974

Current ..........................................................................................................................................

1,085

1,422

10,672

Deferred .......................................................................................................................................

(7,112)(671)(5,036)(6,027)

751

5,636

Service revenues (Note 7) .............................................................................................................
Operating costs and expenses:

Operating income ..........................................................................................................................

Other income and expenses:

Income (loss) before income taxes ............................................................................................
Income taxes (Note 6):

Net income (loss) ...........................................................................................................................

¥ (8,888)¥

578

The accompanying Notes are an integral part of these statements.

12¥ (91.05)

4,338

U.S. dollars(Note 1)Yen

Net income (loss) per share of common stock .......................................................................

$¥ 5.92$0.0444NON-CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITYTONAMI TRANSPORTATION CO., LTD.

For the two years ended 31st March, 2002

Millions of yen
Sharesof commonstock(thousands)

Balance as at 31st March, 2000 ............................

97,610Commonstock

Additional
paid-in
capital¥14,183¥14,687

Unrealized
Legal gain fromreserve revaluation

Retainedearnings¥1,166¥15,964¥8,020Net income ............................................................

Unrealized
gain fromsecurities

Treasurystock(8,888)Cash dividends applicable tothe year (¥6.00 per share) ..................................

(585)

Transfer to legal reserve .......................................

62

Unrealized gain from revaluation of land ...........

(62)
(148)

148

Unrealized gain from securities ...........................

¥123

Bonuses to directors and statutory auditors ........
Balance as at 31st March, 2001 ............................

(35)
97,61014,183

14,687

1,228

7,872

Net income ............................................................

6,541

123

578

Cash dividends applicable tothe year (¥6.00 per share) ..................................

(586)

Transfer to legal reserve .......................................

33

(33)

Unrealized gain from revaluation of land ...........
Unrealized gain from securities ...........................

(3)

Treasury stock .......................................................

¥(2)

Bonuses to directors and statutory auditors ........
Balance as at 31st March, 2002 ............................

(30)
97,610¥14,183¥14,687¥1,261¥7,872¥ 6,471

¥120

¥(2)

Unrealized
gain fromsecurities

Treasurystock

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

Balance as at 31st March, 2000 ............................

Additional
paid-in
capital$106,439 $110,221

Unrealized
Legal gain fromreserve revaluation$8,750Retainedearnings$60,188 $119,805

Net income ............................................................

(66,702)

Cash dividends applicable tothe year ($0.0450 per share) ..............................

(4,390)Transfer to legal reserve .......................................

465

Unrealized gain from revaluation of land ...........

(465)(1,111)

1,111

Unrealized gain from securities ...........................

$923

Bonuses to directors and statutory auditors ........
Balance as at 31st March, 2001 ............................

(263)
106,439

110,2219,215

Net income ............................................................

59,07749,096923

4,338

Cash dividends applicable tothe year ($0.0450 per share) ..............................

(4,398)Transfer to legal reserve .......................................

248

(248)

Unrealized gain from revaluation of land ...........
Unrealized gain from securities ...........................

(22)

Treasury stock .......................................................

$(15)

Bonuses to directors and statutory auditors ........
Balance as at 31st March, 2002 ............................
The accompanying Notes are an integral part of these statements.

(225)$106,439 $110,221

13$9,463$59,077 $ 48,563

$901

$(15)

NON-CONSOLIDATED STATEMENTS OF CASH FLOWSTONAMI TRANSPORTATION CO., LTD.

For the two years ended 31st March, 2002

Millions of yen

Thousands of
U.S. dollars(Note 1)

2001

2002

Cash flows from operating activities:
Net income (loss) before income taxes ......................................................................................
Depreciation and amortization ...................................................................................................
Loss on disposal of property and equipment ............................................................................
(Gain) loss on sales of marketable securities .............................................................................
Gain on sales of investments in securities .................................................................................
Loss on devaluation of investments in securities .......................................................................
Loss on devaluation of golf club memberships .........................................................................
Increase in allowance for doubtful accounts .............................................................................
Decrease in employees’ retirement benefits ..............................................................................
Increase in accrued employees’ severance and retirement benefits .........................................
(Decrease) increase in accrued bonuses to employees ............................................................
Interest and dividend income .....................................................................................................
Interest expenses .........................................................................................................................
Decrease in trade receivables .....................................................................................................
(Increase) decrease in inventories ..............................................................................................
Decrease in accounts payable ....................................................................................................
(Decrease) increase in accrued consumption taxes ..................................................................
Other, net ....................................................................................................................................
Subtotal ....................................................................................................................................
Interest and dividends received ..................................................................................................
Interest paid .................................................................................................................................
Income taxes paid .......................................................................................................................
Net cash provided by operating activities ........................................................................

¥(14,915)
3,305
232
(30)
(25)
421
183
202
(4,533)
20,858
(238)
(430)
398
509
(6)
(203)
(70)
1,556
7,214
430
(398)
(1,757)
5,489¥ 1,329
2,532
97
0
(138)
747
99
247
—
507
23
(322)
361
1,071
9
(332)
108
129
6,467
322
(361)
(879)
5,549

Cash flows from investing activities:
Purchase of time deposits ...........................................................................................................
Proceeds from redemption of time deposits ..............................................................................
Purchase of marketable securities ..............................................................................................
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 .......................................................................
Investments in loans receivable ..................................................................................................
Proceeds from collection of loans receivable ............................................................................
Other, net ....................................................................................................................................
Net cash provided by (used in) investing activities .........................................................

(178)
360
(2,609)8,981(4,564)
587
(643)
307
(668)
738
278
2,589

(198)
316
(200)
803
(948)
60
(776)
766
(1,443)
1,283
(153)
(490)

(1,486)2,371(1,501)
6,026(7,114)450(5,824)
5,749(10,829)
9,629(1,148)(3,677)

Cash flows from financing activities:
Increase in short-term loans ........................................................................................................
Proceeds from long-term debt ....................................................................................................
Repayments of long-term debt ...................................................................................................
Redemption of bonds ..................................................................................................................
Dividends paid .............................................................................................................................
Other, net .....................................................................................................................................
Net cash used in financing activities .................................................................................

1,760
4,250
(450)
(18,823)(586)
3(13,846)80
533(1,066)—(586)—(1,039)601
4,000(8,000)—(4,398)—(7,797)

Effect of exchange rate change on cash and cash equivalents ............................................
Net (decrease) increase in cash and cash equivalents ...........................................................
Cash and cash equivalents at beginning of year .....................................................................
Cash and cash equivalents at end of year .................................................................................

—(5,767)
15,609¥ 9,842

—
4,020
9,842
¥13,862—
30,17073,860$104,030

The accompanying Notes are an integral part of these statements.

14

2002

$

9,974
19,002728
0(1,036)
5,606
743
1,854
—
3,805
173
(2,417)
2,709
8,038
68
(2,492)810
968
48,5332,417(2,709)(6,597)41,644NOTES TO THE NON-CONSOLIDATED FINANCIAL STATEMENTS

1.

Basis of presenting financial statements(d) Property and equipment and intangible assets

The accompanying non-consolidated financial statements
have been prepared from accounting records maintainedby Tonami Transportation Co., Ltd. (the “Company”) in
conformity with the Securities and Exchange Law of Japanand accounting principles generally accepted in Japan.
However, in order to facilitate understanding for readers
outside Japan, certain reclassifications have been made to
the non-consolidated financial statements prepared fordomestic purposes.
U.S. dollar amounts presented in the financial
statements are included solely for convenience and should
not be construed as representations that Japanese yenamounts have been or could in the future be converted
into U.S. dollars. The rate of ¥133.25 = U.S.$1, prevailing on
29th March, 2002, has been used for the translation into
U.S. dollar amounts in the financial statements.
2.

TONAMI TRANSPORTATION CO., LTD.

Property and equipment are stated at cost. However, underJapanese tax law, capital gains arisen from disposals andother similar transactions are deducted from the cost of theproperty and equipment acquired in substitution.
Depreciation of property and equipment is computedby the declining-balance method, except for buildings andstructures. The buildings and structures are depreciated by
the straight-line method.
The ranges of useful lives of principal property andequipment are as follows:
Buildings and structures .............. 2-50 years
Machinery and vehicles ............... 2-15 years
Amortization of intangible assets is principally
computed using the straight-line method on thepresumption of having no salvage value.
Cost of software for internal use is amortized by thestraight-line method over the estimated useful years (fiveyears).

Summary of significant accounting policies(a) Non-consolidation(e) Leases

The accompanying non-consolidated financial statements
include only the accounts of the Company.
Investments in subsidiaries and affiliates are stated at
cost.

Finance leases, except those leases for which theownership of the leased assets is considered to betransferred to the lessee, are accounted for by the method
similar to that applicable to ordinary operating leases.

(b) Marketable securities and investments insecurities(f) Employees’ severance and retirement benefits
The Company’s employees are entitled to a lump-sum
payment upon retirement or severance of employment. In
order to provide for the employees’ severance andretirement benefits, the Company provided the liability forseverance and retirement benefits, which is included in theliability section of the non-consolidated balance sheets,
based on the estimated amounts of projected benefit
obligation and plan assets at the balance sheet dates.
Actuarial gains and losses are recognized in expenses
using the straight-line method over 12 years (a certain
period not exceeding the employees’ average remaining
service lives commencing with the next year as occurred).

Securities for which market value is readily determinable
are stated at market value as of the end of the year withunrealized gains and losses, not reflected in earnings but
directly reported as a separate component of shareholders’equity. The cost of such securities sold is determined by
the moving-average method.
Securities for which market value is not readily
determinable are stated at moving average cost.
(c) Allowance for doubtful accounts
Allowance for doubtful accounts is provided in an amountsufficient to cover possible losses on collection. Suchamount is computed by applying the rate of actual losses
on collection experienced in the past with respect togeneral trade receivables and by individually reviewing
their collectibility with respect to certain doubtfulreceivables.

(g) Stock issue expenses
Stock issue expenses are charged to income as incurred.

15

(h) Income taxes

5.

Short-term bank loans and long-term debt

Income taxes consist of corporation, enterprise, andinhabitants taxes.
The Company recognizes tax effects of temporary
differences between the financial statement basis and theincome tax basis of assets and liabilities.

(a) Short-term bank loans
Short-term bank loans as at 31st March, 2001 and 2002
were as follows:—
Millions of yen(i) Net income per share of common stockThousands of
U.S. dollars

2001

2002

2002

Secured ........................................

¥3,474¥ 3,474$26,071

The computation of net income per share of common stockis based on the weighted average number of shares
outstanding (which represents the number of issued sharesless treasury stock.) during each financial year.

Unsecured ...................................

9,966

10,04675,392(j) Statements of cash flows

Long-term debt as at 31st March, 2001 and 2002 was asfollows:—

Interest rates range from 0.706% to 1.500%.
(b) Long-term debt

Cash and cash equivalents include cash on hand, 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 whenpurchased.
3.

Millions of yen
2001

2002

2002

straight bonds due 2003 ........... ¥ 7,000¥ 7,000$52,533

1,867

14,011

2.05% ¥7 billion unsecured
1.700%-2.100% loans from

Supplementary information

financial institutions
due 2003 to 2007

Treasury stock

Secured ...................................

Effective as at 31st March, 2002, the Company reclassified
treasury stock into the bottom line of shareholders’ equity
section in accordance with the revised regulations on
financial statements. The treasury stock was previously
included in current assets and amounting to ¥0 million.
4.

Thousands of
U.S. dollars

2,000

Unsecured ..............................

1,800

1,400

10,507

Total ...................................

10,80010,26777,051Less amount due within one year ...

533

578

4,338

¥10,267¥ 9,689$72,713

The maturity date of the ¥7 billion 2.05% unsecured straightbonds, issued in September 1999 is 16th September, 2003.
The annual maturities of long-term debt outstanding as
at 31st March, 2002 were as follows:—

Property and equipment

As stated above, capital gains arisen from disposals andother similar transactions are deducted from the cost of
property and equipment acquired in substitution. The
amount deducted in the cost of property and equipment
was ¥271 million ($2,034 thousand) and ¥269 million($2,019 thousand) as at 31st March, 2001 and 2002,
respectively.

Millions of yen

Thousands of
U.S. dollars

2003 .............................................

¥ 578$ 4,338

2004 .............................................

7,578

56,871

2005 .............................................

578

4,338

2006 .............................................

378

2,837

2007 and thereafter .....................

1,155

8,668

Year ending 31st March,16

Significant differences between the statutory tax rate
and the Company’s effective tax rate after applying thedeferred tax accounting for the years ended 31st March,
2001 and 2002 are as follows:—(c) Pledged assets
As at 31st March, 2002, Property and equipment having a
net value of ¥21,983 million ($164,976 thousand) was
pledged as collateral for short-term bank loans and longterm debt (including current portion of long-term debt),
and investment in securities of ¥209 million ($1,568
thousand) was pledged as collateral for short-term bankloans.
6.

Statutory tax rate................................................

2002

41.7%

41.7%

(0.3)

3.2

Increase (decrease) in tax resulting from:
Nondeductible expenses including
entertainment, etc. ..................................
Nontaxable income including dividends

Income taxes

As described in Note 2(h), the Company recognizes tax
effects of temporary differences between the financial
statement basis and the income tax basis of assets andliabilities.
Significant components of deferred tax assets andliabilities are as follows:—

2001

2002

2002

¥ 215

¥ 327

$ 2,454

received deduction, etc. .........................

0.3

(3.2)

Per capita portion of inhabitant taxes......

(0.0)

14.6

Other .........................................................

(1.3)

0.2

Effective tax rate ................................................

40.4%

56.5%

7.

Thousands of
U.S. dollars

Millions of yen

Accounts and transactions with subsidiaries andaffiliates

As at 31st March, 2002, the Company had 25 subsidiaries
and 9 affiliates.
Receivables from, payables to, and transactions withthese subsidiaries and affiliates are summarized asfollows:—

Deferred tax assets:
Excess bonuses accrued ........

2001

Excess employees' severance andretirement benefits accrued

7,290

7,682

57,651Other .......................................

244

363

2,724

Millions of yen

Gross deferred tax assets ..

7,750

8,372

62,829

2001

2002

2002

Thousands of
U.S. dollars

Valuation allowance ..............

—

—

—

Notes and accounts receivable ..

¥ 422

¥ 327

$ 2,454

Total deferred tax assets ...

7,750

8,372

62,829Loans receivable .........................

904

1,123

8,428

Accounts payable ........................

1,829

1,544

11,587

(88)

(86)

(645)

Deferred tax liabilities:
Unrealized gain from securities

Thousands of
U.S. dollars

Reserve under Special Taxation
Measures Law ......................

(3,733)(3,683)(27,640)

Total deferred tax liabilities....

(3,821)(3,769)(28,285)

Net deferred tax assets ....................

¥3,929¥4,603$34,544

Millions of yen

Income taxes applicable to the Company consist of
corporation, enterprise, and inhabitant taxes, which, inaggregate, resulted in a statutory tax rate of 42% for theyears ended 31st March, 2001 and 2002, respectively.

17

2001

2002

2002

Service revenues .........................

¥2,273¥2,109$15,827

Cost of services ...........................

7,563

7,038

52,818Interest income ...........................

29

25

188

8.

Finance leases

11. Revaluation of land

The amount of lease payment under finance lease for theyear ended 31st March, 2001 and 2002 were ¥554 million($4,158 thousand) and ¥1,339 million ($10,049 thousand),
respectively.
The amount of future lease payments of finance leases
as at 31st March, 2001 and 2002 were as follows:—

In accordance with the Law concerning Revaluation ofLand enacted on 31st March, 1998, the Company has
revaluated its owned land used for business operations as
at 31st March, 2002 and reported unrealized gain fromrevaluation of land in shareholders’ equity section.
The revaluated book value of land was determinedbased on the value of land registered on the cadastres ortheir supplementary records, which are provided by the
Local Tax Law under the Law Cencerning Revaluation ofLand, with making reasonable adjustments.

Thousands of
U.S. dollars

Millions of yen
2001

2002

2002

Due within one year ...................

¥ 968¥1,594$11,963

Due after one year ......................

3,318

4,621

34,679¥4,286¥6,215$46,642Millions of yen

Thousands of
U.S. dollars

Difference between the fair market value

9.

of revaluated land at 31st March, 2002

Contingent liabilities

and the revaluated book value ....................

¥4,417$33,148

As at 31st March, 2002, the Company was contingently
liable as follows:—
Millions of yen

12. Shareholders’ equity

Thousands of
U.S. dollars

Year-end dividends shall be approved at a meeting ofshareholders held after the end of each financial year andinterim dividends may be declared by the Board of
Directors held after the end of each first six month period,
respectively.
In accordance with the Commercial Code, year-end
dividends and the related appropriation of retained
earnings are not reflected in the financial statements at theend of the financial year, but are recorded at the time they
are approved.

Guarantees for employees’
housing loans ...........................
Others ..........................................

¥

16
1,339

$

120
10,049

10. Trade notes maturing on bank holiday at the endof yearAs financial institutions in Japan were closed on 31st
March, 2002, trade notes maturing on 31st March, 2002
were accounted for as if they were settled at that date.
The amount of trade notes maturing as at 31st March,
2002 was as follows:—
Millions of yen

Trade notes receivable ...................................

¥471

13. Supplementary income information
Supplementary income information for the two years ended
31st March, 2002 is as follows:—

Thousands of
U.S. dollars$3,535
Millions of yen

18

Thousands of
U.S. dollars

2001

2002

2002

Depreciation expenses ...............

¥3,305¥2,532$19,002

Lease and rental ..........................

3,195

3,290

24,69014. Subsequent event
The annual shareholders’ meeting of the Company, which
was held on 27th June, 2002, duly approved the following
appropriations of retained earnings existing as at 31st
March, 2002:—

Dividends (¥3.00 per share) .......

Millions of yen

Thousands of
U.S. dollars¥293$2,19930

225

Bonuses to directors andstatutory auditors ......................

19

REPORT OF THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
ON THE NON-CONSOLIDATED FINANCIAL STATEMENTS
OF THE COMPANY
To the Board of Directors ofTonami Transportation Co., Ltd.

We have examined the non-consolidated balance sheets of Tonami Transportation Co.,
Ltd. as at 31st March, 2001 and 2002 and the related non-consolidated statements ofincome, shareholders’ equity and cash flows for the years then ended.
Our examinations were made in accordance with auditing standards generally
accepted in Japan and, accordingly, included such tests of the accounting records andsuch other auditing procedures as we considered necessary in the circumstances.
In our opinion, the non-consolidated financial statements referred to above present
fairly the non-consolidated financial position of Tonami Transportation Co., Ltd. as at
31st March, 2001 and 2002 and the results of its operations and cash flows for the years
then ended, in conformity with accounting principles generally accepted in Japanapplied on a consistent basis.
As described in Notes 3 to the non-consolidated financial statements, Tonami
Transportation Co., Ltd. has reclassified “treasury stock” into the bottom line ofshareholders’ equity section from asset section in accordance with the revised
regulations on financial statements.
The United States dollar amounts shown in the accompanying non-consolidated
financial statements have been translated solely for convenience. We have reviewed
this translation and, in our opinion, the non-consolidated financial statements
expressed in yen have been translated into dollars on the basis described in Note 1.
Effective as at 1st July, 2001, Century Ota Showa & Co. changed its name to Shin
Nihon & Co.

Shin Nihon & Co.
Toyama Prefecture, Japan
27th June, 2002

20

CONSOLIDATED FIVE-YEAR SUMMARYTONAMI TRANSPORTATION CO., LTD
AND CONSOLIDATED SUBSIDIARIES

Years ended 31st March

Thousands of
U.S. dollars

Millions of yen
1998

1999

2000

2001

2002

2002

Operating revenues ...................................................

¥125,164¥116,829¥117,794¥118,166¥118,515$889,418

Operating cost ...........................................................

117,180

108,979

108,902109,672

110,302827,782

Selling, general and administrative expenses ..........

5,950

5,906

6,480

6,090

5,755

43,189Operating income .....................................................

2,034

1,944

2,412

2,404

2,458

18,447

Net income (loss) ......................................................

411

124

1,276

(8,786)

720

5,403

Depreciation expenses .............................................

4,996

4,470

4,216

4,092

3,303

24,788¥ 4.18¥ 1.26¥13.04¥(90.02)¥ 7.38$0.0554

Total current assets ...................................................

¥ 46,458¥ 44,610¥ 52,002¥ 37,583¥ 40,245$302,026

Net property and equipment ....................................

52,54553,431

66,99067,16065,330490,282

Total assets ................................................................

110,144

108,546

130,284

120,696

120,759

906,259

Total current liabilities ..............................................

32,85531,57951,113

34,11334,184

256,540

current portion thereof ...........................................

24,57824,88422,07538,87638,802

291,197

Total shareholders’ equity ........................................

52,13951,491

56,431

47,11347,170353,997

—

—

7,142

7,075

6,952

RESULTS OF OPERATIONS:PER SHARE (yen and U.S. dollars):
Net income (loss) ......................................................

YEAR-END FINANCIAL POSITION:

Long-term liabilities, excluding of

OTHER YEAR-END DATA:
Number of employees ..............................................

21

CONSOLIDATED BALANCE SHEETS TONAMI TRANSPORTATION CO., LTD.
AND CONSOLIDATED SUBSIDIARIESAs of 31st March, 2001 and 2002

Thousands of
U.S. dollars(Note 1)Millions of yen
2001

2002

2002

8,183

$ 61,411

ASSETS
Current assets:
Cash and time deposits ...............................................................................................................

¥ 5,348¥

Marketable securities (Notes 3 and 4) ........................................................................................

7,052

7,823

58,709Notes and accounts (Note 9) .................................................................................................

22,36921,022

157,763

Less: allowance for doubtful accounts .................................................................................

(78)

(76)

(570)

Inventories ...................................................................................................................................

573

602

4,518

Deferred tax assets (Note 6) .......................................................................................................

611

800

6,004

Other current assets .....................................................................................................................

1,708

1,891

14,191

Total current assets .......................................................................................................

37,58340,245302,026

Land ..............................................................................................................................................

37,64437,644

282,507

Buildings and structures ..............................................................................................................

23,591

22,719170,499

Machinery and vehicles ................................................................................................................

5,309

4,350

32,645Construction in progress .............................................................................................................

0

1

8

Other ............................................................................................................................................

616

616

4,623

Total property and equipment .....................................................................................

67,16065,330490,282

Investments in securities (Notes 3, 4, and 5) .............................................................................

6,262

5,639

42,319Deferred tax assets (Note 6) .......................................................................................................

3,657

4,187

31,422Foreign currency translation adjustments (Note 2) ....................................................................

311

4

30

Others ...........................................................................................................................................

5,723

5,354

40,180Total investments and other assets ..............................................................................

15,953

15,184113,951

Total assets ....................................................................................................................

¥120,696¥120,759$906,259

Trade receivables:

Property and equipment (Notes 4 and 5):

Investments and other assets:

The accompanying Notes are an integral part of these statements.

22

Thousands of
U.S. dollars(Note 1)Millions of yen
2001

2002

2002

Short-term bank loans (Note 5) ..................................................................................................

¥ 15,640¥ 15,809$118,642

Current portion of long-term debt (Note 5) ...............................................................................

979

781

5,861

Notes and accounts payable (Note 9) ........................................................................................

10,3199,535

71,557

Income taxes payable ..................................................................................................................

485

1,021

7,662

Other current liabilities ................................................................................................................

6,690

7,038

52,818

Total current liabilities ..................................................................................................

34,11334,184

256,540

Long-term debt, less current portion (Note 5) ...........................................................................

11,112

10,49578,762

Deferred tax liabilities from revaluation of land (Note 10) .......................................................

5,640

5,640

42,326

Employees’ severance and retirement benefits ..........................................................................

21,96922,496

168,826

Other long-term liabilities ...........................................................................................................

155

171

1,283

Total long-term liabilities ..............................................................................................

38,87638,802

291,197

Total liabilities ...............................................................................................................

72,98972,986

547,737

Minority interests ..........................................................................................................................

594

603

4,525

97,610,118 shares in 2002 .................................................................................

14,183

14,183

106,439

Additional paid-in capital ............................................................................................................

14,687

14,687110,222

LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent liabilities:

Long-term liabilities:

Contingent liabilities (Note 8)
Shareholders’ equity (Note 11):
Common stock:
Authorised: 299,200,000 shares in 2001
299,200,000 shares in 2002
Issued, par value ¥50 per share:
97,610,118 shares in 2001

Unrealized gain from revaluation of land (Note 10) .................................................................

7,872

7,872

59,077Retained earnings ........................................................................................................................

10,23810,307

77,351

Unrealized gain from securities ..................................................................................................

133

123

923

Treasury stock, at cost .................................................................................................................

(0)

(2)

(15)

Total shareholders’ equity ............................................................................................

47,11347,170353,997

Total liabilities, minority interests, and shareholders’ equity .....................................

¥120,696¥120,759$906,259

23

CONSOLIDATED STATEMENTS OF INCOME TONAMI TRANSPORTATION CO., LTD.
AND CONSOLIDATED SUBSIDIARIESFor the two years ended 31st March, 2002

Thousands of
U.S. dollars(Note 1)Millions of yen
2001

2002

2002

¥118,166¥118,515$889,418

118,166

118,515889,418

Operating cost (Note 12) .............................................................................................................

109,672

110,302827,782

Selling, general and administrative expenses (Note 12) ...........................................................

6,090

5,755

43,189115,762

116,057

870,971

2,404

2,458

18,447

Interest and dividend income .....................................................................................................

423

363

2,724

Loss on sells of property and equipment, net ...........................................................................

(227)

(107)

(803)

Interest expenses .........................................................................................................................

(467)

(424)

(3,182)Others, net ...................................................................................................................................

(17,094)(531)(3,985)(17,365)(699)(5,246)(14,961)

1,759

13,201

Current ..........................................................................................................................................

1,409

1,726

12,953

Deferred .......................................................................................................................................

(7,526)(708)(5,313)(6,117)

1,018

7,640

Minority interests ..........................................................................................................................

(58)

21

158

Net income (loss) ...........................................................................................................................

¥ (8,786)

Operating revenues:
Operating revenues .....................................................................................................................

Operating costs and selling, general and administrative expenses:

Operating income ..........................................................................................................................

Other income and expenses:

Income (loss) before income taxes and minority interests ..................................................
Income taxes (Note 6):¥

720

The accompanying Notes are an integral part of these statements.

24¥(90.02)

5,403

U.S. dollars(Note 1)Yen

Net income (loss) per share of common stock .......................................................................

$

¥7.38

$0.0554

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY TONAMI TRANSPORTATION CO., LTD.
AND CONSOLIDATED SUBSIDIARIESFor the two years ended 31st March, 2002

Millions of yen
Sharesof commonstock(thousands)

Balance as at 31st March, 2000 .........................

97,610Commonstock

Additional
paid-in
capitalUnrealized
gain fromrevaluation

Retainedearnings¥14,183¥14,687¥8,020¥19,541

Net income ........................................................

Unrealized
gain fromsecurities

Treasurystock(8,786)

Cash dividends applicable tothe year (¥6.00 per share) ..............................

(586)

Unrealized gain from revaluation of land ........

148

148

Unrealized gain from securities ........................

¥133

Bonuses to directors and statutory auditors ....

(78)

Decrease due to the increase of affiliates
accounted for by the equity method .............
Balance as at 31st March, 2001 .........................

(1)
97,61014,183

14,687

7,872

Net income ........................................................

10,238

133

720

Cash dividends applicable tothe year (¥6.00 per share) ..............................

(586)

Unrealized gain from revaluation of land ........
Unrealized gain from securities ........................

(10)

Treasury stock ...................................................

¥(2)

Bonuses to directors and statutory auditors ....
Balance as at 31st March, 2002 .........................

(65)
97,610¥14,183¥14,687¥7,872¥10,307

¥123

¥(2)

Thousands of U.S. dollars (Note 1)

Balance as at 31st March, 2000 .........................

Commonstock

Additional
paid-in
capitalUnrealized
gain fromrevaluation

Retainedearnings$106,439$110,222$60,188$146,649

Net income ........................................................

Unrealized
gain fromsecurities

Treasurystock(65,936)

Cash dividends applicable tothe year ($0.0450 per share) ..........................

(4,398)

Unrealized gain from revaluation of land ........

(1,111)

1,111

Unrealized gain from securities ........................

$998

Bonuses to directors and statutory auditors ....

(585)

Decrease due to the increase of affiliates accounted forby the equity method .....................................
Balance as at 31st March, 2001 .........................

(8)
106,439

110,22259,077

Net income ........................................................

76,833998

5,403

Cash dividends applicable tothe year ($0.0450 per share) ..........................

(4,398)

Unrealized gain from revaluation of land ........
Unrealized gain from securities ........................

(75)

Treasury stock ...................................................

$(15)

Bonuses to directors and statutory auditors ....
Balance as at 31st March, 2002 .........................

(488)$106,439

The accompanying Notes are an integral part of these statements.

25$110,222$59,077$ 77,351

$ 923

$(15)

CONSOLIDATED STATEMENTS OF CASH FLOWS TONAMI TRANSPORTATION CO., LTD.
AND CONSOLIDATED SUBSIDIARIESFor the two years ended 31st March, 2002

Millions of yen

Thousands of
U.S. dollars(Note 1)

2001

2002

2002

Cash flows from operating activities:
Net income (loss) before income taxes and minority interests ................................................
Depreciation and amortization ...................................................................................................
Loss on disposal of property and equipment ............................................................................
(Gain) loss on sales of marketable securities .............................................................................
Gain on sales of investments in securities .................................................................................
Loss on devaluation of investments in securities .......................................................................
Loss on devaluation of golf club memberships .........................................................................
Amortization of foreign exchange translation adjustments .......................................................
Equity in earnings of associated companies ..............................................................................
Increase in allowance for doubtful accounts .............................................................................
Decrease in employees’ retirement benefits ..............................................................................
Increase in employees’ severance and retirement benefits .......................................................
(Decrease) increase in accrued bonuses to employees ............................................................
Interest and dividend income .....................................................................................................
Interest expenses .........................................................................................................................
(Increase) decrease in trade receivables ....................................................................................
Increase in inventories ................................................................................................................
Increase (decrease) in accounts payable ...................................................................................
(Decrease) increase in accrued consumption taxes ..................................................................
Other, net .....................................................................................................................................
Subtotal ....................................................................................................................................
Interest and dividends received ..................................................................................................
Interest paid .................................................................................................................................
Income taxes paid .......................................................................................................................
Net cash provided by operating activities ........................................................................

¥(14,961)
4,081
227
(40)
(23)
428
235
20
(87)
239
(4,738)21,969
(278)
(337)
467
(640)
(46)
810
(69)
1,319
8,576
337
(467)
(2,158)
6,288¥ 1,759
3,303
106
2
(134)
557
123
307
(134)
132
—
527
0
(228)
422
1,347
(30)
(784)
93
197
7,565
228
(422)
(1,191)
6,180$ 13,201
24,788795
15(1,005)
4,180
923
2,304
(1,006)
991
—
3,955
0
(1,711)
3,167
10,109
(225)
5,884
698
1,478
56,773
1,711(3,167)(8,938)46,379Cash flows from investing activities:
Purchase of time deposits ...........................................................................................................
Proceeds from redemption of time deposits ..............................................................................
Purchase of marketable securities ..............................................................................................
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 purchase of investments in a newly consolidated subsidiary ..........................
Investments in loans receivable ..................................................................................................
Proceeds from collection of loans receivable ............................................................................
Other, net .....................................................................................................................................
Net provided by (used in) investing activities .................................................................

(356)
619
(2,188)9,000(5,298)
627
(599)
321
15
(751)
798
(601)
1,587

(494)
569
(200)
803
(1,649)
84
(756)
778
—
(651)
590
(171)
(1,097)(3,707)
4,270(1,501)
6,026(12,375)
630(5,674)
5,839—(4,886)
4,428(1,283)(8,233)

Cash flows from financing activities:
Net increase (decrease) in short-term loans ...............................................................................
Proceeds from long-term debt ....................................................................................................
Repayment of long-term debt .....................................................................................................
Redemption of bonds ..................................................................................................................
Dividends paid .............................................................................................................................
Dividends paid to minority interests ..........................................................................................
Net cash used in financing activities .................................................................................

2,158
4,746
(1,165)(18,823)(578)(8)(13,670)(118)
742(1,135)—(578)(8)(1,097)

(886)
5,569
(8,518)—(4,338)(60)(8,233)

Effect of exchange rate change on cash and cash equivalents .............................................
Net (decrease) increase in cash and cash equivalents ............................................................
Cash and cash equivalents at beginning of year .....................................................................
Cash and cash equivalents at end of year .................................................................................

—(5,794)
16,980¥ 11,186—
3,986
11,187¥15,173—
29,913
83,956$113,869

The accompanying Notes are an integral part of these statements.

26

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS TONAMI TRANSPORTATION CO., LTD.
AND CONSOLIDATED SUBSIDIARIES

1.

Basis of presenting financial statements(d) Property and equipment and intangible assets

The accompanying consolidated financial statements havebeen prepared from accounting records maintained by
Tonami Transportation Co., Ltd. (the “Company”) and its
consolidated subsidiaries in conformity with the Securities
and Exchange Law of Japan and accounting principles
generally accepted in Japan. However, in order to facilitate
understanding for readers outside Japan, certain
reclassifications have been made to the consolidated
financial statements prepared for domestic purposes.
U.S. dollar amounts presented in the financial
statements are included solely for convenience and should
not be construed as representations that Japanese yenamounts have been or could in the future be converted
into U.S. dollars. The rate of ¥133.25 = U.S.$1, prevailing on
29th March, 2002, has been used for the translation into
U.S. dollar amounts in the financial statements.
2.

Property and equipment are stated at cost. However, underJapanese tax law, capital gains arisen from disposals andother similar transactions are deducted from the cost of theproperty and equipment acquired in substitution.
Depreciation of property and equipment is computedby the declining balance method, except for buildings andstructures. The buildings and structures are depreciated by
the straight-line method.
The ranges of useful lives of principal property andequipment are as follows:
Buildings and structures .............. 2-50 years
Machinery and vehicles ............... 2-15 years
Amortization of intangible assets is principally
computed using the straight-line method on thepresumption of having no salvage value.
Cost of software for internal use is amortized by thestraight-line method over the estimated useful years (fiveyears).

Summary of significant accounting policies(a) Consolidation(e) Leases

The accompanying consolidated financial statements
include the accounts of the Company and its 25 significant
majority-owned subsidiaries for the year ended March 31,
2002 (25 for 2001).
All significant intercompany accounts and transactions
have been eliminated in consolidation.
Nine of the investments in unconsolidated subsidiaries
or affiliates (10 for 2001) are accounted for by the equity
method.

Finance leases other than those which are deemed totransfer the ownership of the leased assets to lessee areaccounted for by the method similar to that applicable toordinary operating leases.
(f) Employees’ severance and retirement benefits
The Company’s employees are entitled to a lump-sum
payment upon retirement or severance of employment. In
order to provide for the employees’ severance andretirement benefits, the Company and its consolidated
subsidiaries provided the liability for severance andretirement benefits, which is included in the liability sectionof the consolidated balance sheet, based on the estimatedamounts of projected benefit obligation and plan assets atthe balance sheet dates.
Actuarial gains and losses are recognized in expenses
using the straight-line method over 12 years (a certain
period not exceeding the employees’ average remaining
service lives commencing with the next year as occurred).

(b) Marketable securities and investments insecurities
Securities for which market value is readily determinable
are stated at market value as of the end of the year withunrealized gains and losses, not reflected in earnings but
directly reported as a separate component of shareholders’equity. The cost of such securities sold is determined by
the moving-average method.
Securities for which market value is not readily
determinable are stated at moving average cost.

(g) Stock issue expenses(c) Allowance for doubtful accounts

Stock issue expenses are charged to income as incurred.

Allowance for doubtful accounts is provided in an amountsufficient to cover possible losses on collection. Suchamount is computed by applying the rate of actual losses
on collection experienced in the past with respect togeneral trade receivables and by individually reviewing
their collectibility with respect to certain doubtfulreceivables.

(h) Remeasurement of assets and liabilities of
consolidated subsidiaries
Assets and liabilities of the consolidated subsidiaries are
remeasured using the full fair value method.

27

Acquisition costs and book values of securities withavailable market values as of 31st March, 2002 aresummarized as follows:—(i) Amortization of consolidation difference
Differences between the acquisition cost and theunderlying net equity of subsidiaries at the time ofacquisition are amortized on the straight-line basis over theperiod of five or 20years.
When their amounts are, however, not significant, thedifferences are fully charged or credited to income at thedates of acquisition.

Securities with book values
exceeding acquisition costs:
Acquisition cost .............................
Book value ....................................
Securities with book values
not exceeding acquisition costs:
Acquisition cost .............................
Book value ....................................

(j) Income taxes
Income taxes consist of corporation, enterprise, andinhabitants taxes.
The Company and its consolidated subsidiaries
recognize tax effects of temporary differences between thefinancial statement basis and the income tax basis of assets
and liabilities.

4.

Millions of yen

Thousands of
U.S. dollars

2002

2002

¥1,606
2,103$12,053
15,782¥2,043
1,757$15,332
13,186

Property and equipment

Depreciable property is stated at the net book value in the
consolidated balance sheets. The amounts of accumulated
depreciation were ¥49,417 million ($370,859 thousand) and¥49,513 million ($371,580 thousand) on 31st March, 2001
and 2002, respectively.
Capital gains arisen from disposals and other similartransactions are deducted from the cost of property andequipment acquired in substitution. The amount deductedin the cost of property and equipment was ¥271 million($2,034 thousand) and ¥269 million ($2,019 thousand) on
31st March, 2001 and 2002,respectively.

(k) Net income per share of common stock
The computation of net income per share of common stock
has been based on the weighted average number of shares
outstanding (which represents the number of issued sharesless treasury stock.) during each financial year.
(l) Statements of cash flows
Cash and cash equivalents include cash on hand, 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 whenpurchased.

5.

Short-term bank loans and long-term debt(m) Foreign currency translation(a) Short-term bank loans

The Company and its consolidated subsidiaries adopted therevised accounting standards for foreign currencytranslation.

Short-term bank loans as at 31st March, 2001 and 2002
were as follows:—

3.

Millions of yen

Marketable securities and investments insecurities

Acquisition cost and book value of securities with available
market values as at 31st March, 2001 are summarised asfollows:—

Securities with book values
exceeding acquisition costs:
Acquisition cost .............................
Book value ....................................
Securities with book values
not exceeding acquisition costs:
Acquisition cost .............................
Book value ....................................

Millions of yen

Thousands of
U.S. dollars

2001

2001

¥2,226
2,860$16,705
21,463¥1,4191,013$10,649
7,602

2001

2002

2002

Secured ........................................ ¥ 4,495¥ 4,662$34,987

Unsecured ...................................

11,14883,662

11,145Interest rates range from 0.7% to 3.2%.

28

Thousands of
U.S. dollars

(b) Long-term debt

6.

Long-term debt as at 31st March, 2001 and 2002 was asfollows:—

As described in Note 2(j), the Company and its
consolidated subsidiaries recognizes tax effects of
temporary differences between the financial statement basis
and the income tax basis of assets and liabilities.
Significant components of deferred tax assets andliabilities are as follows:—

Millions of yen

Thousands of
U.S. dollars

2001

2002

2002

straight bonds due 2003............ ¥ 7,000¥ 7,000$52,533

2.05%¥7 billion unsecured

Income taxes

institutions due 2002 to 2007
Secured ...................................

2,646

2,348

17,621

Unsecured................................

2,445

1,928

14,469Total ...................................

12,091

11,276

84,623

979

781

5,861

¥11,112¥10,495$78,762

Excess bonuses accrued ........

2002

2002

¥ 260

¥ 385

$ 2,889

Excess employees’ severance andLess: amount due within

Millions of yen

Thousands of
U.S. dollars

2003 .............................................

¥ 781$ 5,861

2004 .............................................

7,830

58,762

2005 ..............................................

766

5,749

2006 ..............................................

470

3,527

2007 and thereafter .....................

1,272

9,546

retirement benefits accrued ...

7,684

8,090

60,713

Other .......................................

190

323

2,424

Gross deferred tax assets ....

8,135

8,798

66,026

Valuation allowance ..............

—

—

—

Total deferred tax assets .....

8,135

8,798

66,026

(94)

(88)

(660)

Measures Law ......................

(3,772)(3,722)(27,933)

Total deferred tax liabilities .

(3,867)(3,810)(28,593)

Net deferred tax assets ..................

¥4,267¥4,988$37,433

Deferred tax liabilities:

The maturity date of the ¥7 billion 2.05% unsecured straightbonds, issued in September 1999 is 16th September, 2003.
The annual maturities of long-term debt outstanding as
at 31st March, 2002 were as follows:—
Year ending 31st March,

2001

Deferred tax assets:

and thereafter

one year ....................................

Thousands of
U.S. dollars

Millions of yen

0.6%–6.1% loans from financial

Unrealized gain from securities
Reserve under Special Taxation

Income taxes applicable to the Company consist of
corporation, enterprise, and inhabitant taxes, which, inaggregate, resulted in a statutory tax rate of 42% for theyears ended 31st March, 2001 and 2002, respectively.
Significant differences between the statutory tax rate
and the Company’s effective tax rate after applying thedeferred tax accounting for the years ended 31st March,
2001 and 2002 are as follows:—(c) Pledged assets
Property and equipment having a net value of ¥23,159
million ($173,801 thousand) was pledged as collateral for
short-term bank loans and long-term debt, and investment
in securities of ¥220 million ($1,651 thousand) was pledged
as collateral for short-term bank loans as at 31st March,
2002.

2001

2002

41.6%

41.6%

(0.5)

4.0

received deduction, etc. ........................

0.3

(2.5)

Per capita portion of inhabitant taxes......

(1.4)

11.5

Equity in earnings of affiliates ..................

0.2

(3.2)

Statutory tax rate................................................
Increase (reduction) in tax resulting from:
Nondeductible expenses including
entertainment, etc. ..................................
Nontaxable income including dividends

Other ..........................................................
Effective tax rate ................................................

29

0.7

6.5

40.9%

57.9%

7.

Finance leases

The revaluated book value of land was determinedbased on the value of land registered on the cadastres ortheir supplementary records, which are provided by the
Local Tax Law under the Law Cencerning Revaluation ofLand, with making reasonable adjustments.

The amount of lease payment under finance lease for theyear ended March 31, 2001 and 2002 were ¥656 million($4,923 thousand) and ¥1,429 million ($10,724 thousand),
respectively. Future lease payments of finance leases as at
March 31, 2001 and 2002 were as follows:—
Millions of yen

Due within one year ...................
Due after one year ......................

8.

Millions of yen

Thousands of
U.S. dollars

2001

2002

2002

¥1,074¥1,679$12,601

3,524

4,740

35,572¥4,598¥6,419$48,173

Difference between the fair market valueof revalued land at 31st March, 2002
and the revalued book value ......................

Notes discounted with banks .....

¥ 319$ 2,394

Guarantees for employees’
housing loans ...........................

16

120

Notes endorsed ...........................

80

600

Others ..........................................

1,592

11,947

9.

12. Supplementary income information
Supplementary income information for the year ended 31st
March, 2001 and 2002 is as follows:—

Trade notes maturing on bank holiday at the endof yearMillions of yen

As financial institutions in Japan were closed on 31st
March, 2002, trade notes maturing on 31st March, 2002
were accounted for as if they were settled at that date.
The amount of trade notes maturing as at 31st March,
2002 was as follows:—
Millions of yen

Thousands of
U.S. dollars

Trade notes receivable ...............

¥526$3,947

Trade notes payable ...................

47

353

$33,148

Year-end dividends shall be approved at a meeting ofshareholders held after the end of each financial year andinterim dividends may be declared by the Board of
Directors held after the end of each first six month period,
respectively.
In accordance with the Commercial Code, year-end
dividends and the related appropriation of retained
earnings are not reflected in the financial statements at theend of the financial year, but are recorded at the time they
are approved.

As at 31st March, 2002, the Company were contingently
liable as follows:—
Thousands of
U.S. dollars¥4,417

11. Shareholders’ equity

Contingent liabilities

Millions of yen

Thousands of
U.S. dollars

Thousands of
U.S. dollars

2001

2002

2002

Depreciation expenses ...............

¥4,092¥3,303$24,788

Lease and rental ..........................

4,763

4,882

36,638

13. Subsequent event
The annual shareholders’ meeting of the Company, which
was held on 27th June, 2002, duly approved the following
appropriations of retained earnings existing as at 31st
March, 2002:—

10. Revaluation of land
In accordance with the Law concerning Revaluation ofLand enacted on 31st March, 1998, the Company has
revaluated its owned land used for business operations on
31st March, 2002 and reported unrealized gain fromrevaluation of land in shareholders’ equity section.

Dividends (¥3.00 per share) .......

Millions of yen

Thousands of
U.S. dollars¥293$2,19930

225

Bonuses to directors andstatutory auditors ......................

30

14. Segment Information
The Company’s business segments consist of logistics related services classified as Logistics and non-logistics services
classified as Others.
A summary of segment information by industry segment for the two years ended 31st March 2002 is as follows:—
For the year ended 31st March, 2001
Millions of yen
Logistics

OthersTotal

Eliminations(Notes 1 and 2)

Consolidated

Net sales:
Outside customers ..................................................
Inter segment sales .................................................
Total ....................................................................
Costs and expenses .....................................................
Operating income ........................................................

¥109,04011
109,051
107,733¥ 1,318¥ 9,126
4,094
13,22011,962¥ 1,258¥118,166
4,105
122,271
119,695¥ 2,576¥—(4,105)(4,105)(3,933)¥ (172)¥118,166—
118,166
115,762¥ 2,404

Assets, depreciation and capital expenditures:
Identifiable assets: ..................................................
Depreciation: ..........................................................
Capital expenditures: ..............................................

¥ 96,148¥ 3,948¥ 4,751¥ 8,958
¥ 144
¥ 147

¥105,106¥ 4,092¥ 4,898¥15,589¥11¥
17¥120,695¥ 4,081¥ 4,881

For the year ended 31st March, 2002
Millions of yen
Logistics

OthersTotal

Net Sales:
Outside customers ..................................................
Inter segment sales .................................................
Total ....................................................................
Costs and expenses .....................................................
Operating income ........................................................

¥106,679
16
106,695
105,270¥ 1,425¥11,836
4,140
15,976
14,803¥ 1,173¥118,515
4,156
122,671
120,073¥ 2,598¥—(4,156)(4,156)(4,016)¥(140)¥118,515—
118,515
116,057¥ 2,458

Assets, depreciation and capital expenditures:
Identifiable assets: ..................................................
Depreciation: ..........................................................
Capital expenditures: ..............................................

¥ 90,704¥ 3,135¥ 1,397¥ 8,104
¥ 179
¥ 279

¥ 98,808¥ 3,314¥ 1,676¥ 21,951¥
11¥
9¥120,759¥ 3,303¥ 1,667

31

Eliminations(Notes 1 and 2)

Consolidated

For the year ended 31st March, 2001
Thousands of U.S. dollars
Logistics

OthersTotal

Eliminations(Notes 1 and 2)

Consolidated

Net Sales:
Outside customers ..................................................
Inter segment sales .................................................
Total ....................................................................
Costs and expenses .....................................................
Operating income ........................................................

$818,311
83
818,394
808,503$ 9,891$68,488
30,724
99,212
89,771$ 9,441$886,799
30,807
917,606
898,274$ 19,332$—(30,807)(30,807)(29,516)$ (1,291)$886,799—
886,799
868,758$ 18,041

Assets, depreciation and capital expenditures:
Identifiable assets: ..................................................
Depreciation: ..........................................................
Capital expenditures: ..............................................

$721,561$ 29,629$ 35,655$67,227$ 1,081$ 1,103$788,788$ 30,709$ 36,758$116,991
$
83
$
128

$905,779$ 30,627$ 36,630

For the year ended 31st March, 2002
Thousands of U.S. dollars
Logistics

OthersTotal

Eliminations(Notes 1 and 2)

Consolidated

Net Sales:
Outside customers ..................................................
Inter segment sales .................................................
Total ....................................................................
Costs and expenses .....................................................
Operating income ........................................................

$800,593
120
800,713790,019$ 10,694$ 88,825
31,070119,895
111,092$ 8,803$889,418
31,190920,608
901,111$ 19,497$—(31,190)(31,190)(30,140)$ (1,050)$889,418—
889,418
870,971$ 18,447

Assets, depreciation and capital expenditures:
Identifiable assets: ..................................................
Depreciation: ..........................................................
Capital expenditures: ..............................................

$680,705$ 23,527$ 10,484$60,818$ 1,344$ 2,094$741,523$ 24,871$ 12,578$164,736$83$
68$906,259$ 24,788$ 12,510

Note 1. Operating cost and expenses included in the column “Eliminations” mainly consist of those charged by the generalaffairs and finance divisions of the Company, amounting to ¥204 million ($1,531 thousand) and ¥190 million ($1,426
thousand) for the years ended March 31, 2001 and 2002, respectively.
Note 2. Corporate assets included in the column “Eliminations” mainly consist of surplus working fund (cash and marketablesecurities), long-term investment fund (investments in securities), and other assets which belong to the administrative
department, amounting to ¥22,981 million ($172,465 thousand) and ¥28,181 million ($211,490 thousand) for the years
ended March 31, 2001 and 2002, respectively.
The two business segments mainly consist of the following services:
Logistics ...... Road haulage, freight forwarding, warehousing, and harbor transport and customs services
Others ......... Vehicle maintenance, casualty insurance, leasing, merchandising and commissioned sales andpurchases, travel services, mail order services, travel inn, and other businesses
Neither geographical segment information nor overseas sales have been presented because any of the Company’s
consolidated subsidiaries are not located outside Japan, and the Company and its consolidated subsidiaries have notoverseas sales for the years ended March 31, 2001 and 2002.
32

REPORT OF THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
ON THE CONSOLIDATED FINANCIAL STATEMENTS
OF THE COMPANY AND ITS CONSOLIDATED SUBSIDIARIESTo the Board of Directors ofTonami Transportation Co., Ltd.

We have examined the consolidated balance sheets of Tonami Transportation Co., Ltd.
and its consolidated subsidiaries as at 31st March, 2001 and 2002 and the related
consolidated statements of income, shareholders’ equity and cash flows for the years
then ended.
Our examinations were made in accordance with auditing standards generally
accepted in Japan and, accordingly, included such tests of accounting records andsuch other auditing procedures as we considered necessary in the circumstances.
In our opinion, the consolidated financial statements referred to above present
fairly the consolidated financial position of Tonami Transportation Co., Ltd. and its
consolidated subsidiaries as at 31st March, 2001 and 2002 and the results of theiroperations and cash flows for the years then ended, in conformity with accounting
principles generally accepted in Japan applied on a consistent basis.
The United States dollar amounts shown in the accompanying consolidated
financial statements have been translated solely for convenience. We have reviewed
this translation and, in our opinion, the consolidated financial statements expressed inyen have been translated into dollars on the basis described in Note 1.
Effective as at 1st July, 2001, Century Ota Showa & Co. changed its name to Shin
Nihon & Co.

Shin Nihon & Co.
Toyama Prefecture, Japan
27th June, 2002

33

CORPORATE DATAHead Office

Consolidated Subsidiaries

2-12, Showa-machi 3-chome, Takaoka,
Toyama Prefecture 933-8566, Japan
Phone: (0766) 21-1073
Fax: (0766) 21-3640

Kanto Tonami Transportation Co., Ltd.
Road haulage
Gosei Tonami Transportation Co., Ltd.
Road haulage

Tokyo OfficeOsaka Tonami Transportation Co., Ltd.
Road haulage

3-8, Higashinihonbashi 3-cyome, Chuo-ku,
Tokyo 103-0004, Japan
Phone: (03) 3664-5401
Fax: (03) 3664-5405

Date of Establishment
June 1943

Common Stock

Shonan Tonami Transportation Co., Ltd.
Road haulage
Ibaraki Tonami Transportation Co., Ltd.
Road haulage
Fukui Tonami Transportation Co., Ltd.
Road haulage¥14,183 million

Ishikawa Tonami Transportation Co., Ltd.
Road haulage

Issued and Outstanding Shares
97,610,118 shares

Kanagawa Tonami Transportation Co., Ltd.
Road haulage

Shareholders

Kansai Tonami Transportation Co., Ltd.
Road haulage

9,426

Employees
5,548

Terminals

Zento Transportation Co., Ltd.
Road haulage
Takefu Transportation Co., Ltd.
Road haulage

89

Kawai Transportation Co., Ltd.
Road haulage

Warehouses
42

Chukyo Tonami Transportation Co., Ltd.
Road haulage

Motor Vehicles

Saitama Tonami Transportation Co., Ltd.
Road haulage

5,580(As of 31st March, 2002)

ATS Co., Ltd.
Road haulage
Niigata Tonami Transportation Co., Ltd.
Road haulage
Nihon Unyu Co., Ltd.
Harbor transport
Kokusai Kyodo Logistics Co., Ltd.
Warehousing
Tonami Trading Co., Ltd.
Trading Company
Toyo Gomu Hokuriku Hanbai Co., Ltd.
Sale of tires
Shogawa Kanko Co., Ltd.
Travel inns
Toyama Jizake Hanbai Co., Ltd.
Sale of liquor
Tonami Automobile Technology Research Institute Co., Ltd.
Automobile technology R&D
Toyo Tire Toyama shop Co., Ltd.
Sale of tires
Toyo Shinso Co., Ltd.
Sale of bed-clothes34

N O N -C O N S O L I D AT E D F I N A N C I A L H I G H L I G H T S
TONAMI TRANSPORTATION CO., LTD.

Tow years ended March 31, 2002

Thousands of
U.S. dollars

Millions of yen
2001

2002

2002

Service revenues ...................................................................... ¥100,509¥ 98,462$738,927

FOR THE YEAR:

Operating income ....................................................................

1,695

1,942

14,574

Net income (loss) ....................................................................

(8,888)

578

4,338

5.92

$ 0.0444

6.00

6.00

0.0450Total assets ............................................................................... ¥109,261¥109,767$823,767

44,592

334,649

PER SHARE (yen and U.S. dollars):
Net income (loss) .................................................................... ¥ (91.05)
Cash dividends .........................................................................

¥AT YEAR-END:

Total shareholders’ equity .......................................................

44,635

Notes: 1 U.S. dollar amounts presented herein are included solely for convenience. The rate of ¥133.25 = U.S.$1,
prevailing on 29th March, 2002, 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 ofshares outstanding (which represents the number of issued shares less treasury stock.) during each financial
year.

CONTENTS
1
2
4
5
34

PROFILEA MESSAGE FROM THE PRESIDENTB O A R D O F D I R E C T O R S A N D S TAT U T O R Y A U D I T O R S
FINANCIAL SECTIONC O R P O R AT E D ATA

TONAMI TRANSPORTATION CO., LTD.
Head Office: 2-12, Showa-machi 3-chome, Takaoka, Toyama Pref., Japan
Phone: 0766-21-1073 Fax: 0766-21-3640

TONAMI TRANSPORTATION CO., LTD.
ANNUAL REPORT 2002

Printed in Japan