ANNUAL R EP O RT 2019Year Ended March 31, 2019Japan Oil Transportation Co.,Ltd.

To Our Shareholders

Shift for the Next
We fulfill our responsibility to the futurewith thorough safety and high-quality service
Before presenting the business report for the 102nd term (April 1, 2018 to March 31, 2019), I would like totake this opportunity to thank our shareholders for your support throughout the year.
Going forward, we expect the tone of moderate recovery in the Japanese economy to continue, but on theother hand there are concerns about the impact of the consumption tax hike scheduled for October 2019,
and the increasingly uncertain outlook for overseas economies.
In the logistics industry, challenging conditions are expected to continue due to such factors as the problemof truck driver shortages and a rise in personnel costs.
Also, we expect the progressing consolidation and rationalization of oil manufacturing companies to havevarious effects on the JOT Group in the future.
Amid these conditions, the JOT Group companies are working together as a united group to achieve theobjectives of the medium-term management plan under the slogan “Shift for the Next - We fulfill ourresponsibility to the future with thorough safety and high-quality service.”
In Fiscal 2019, the second year of the medium-term
management plan, increases in fuel and personnel costs andthe impact of natural disasters, etc. led to profits
undershooting initial forecasts, but in Fiscal 2020, the finalyear of the plan, we will further promote the initiatives
implemented thus far, seeking to achieve our targets of net
sales of ¥33 billion or more, operating income of ¥1.2 billion
or more, and ordinary income of ¥1.5 billion or more.
In parallel with these initiatives, in order to maintain thestability of transportation we will continue our focus on
improving the employment environment to secure drivers
and on expanding the number of vehicles, while also striving
to further enhance safety education to provide a high-quality
service going forward that customers can use without worry.
I continue to count on your generous support andcooperation.

Shoichiro Hara
President and Representative Director1

ANNUAL REPORT 2019

August 2019

Results for the 102nd term (Consolidated)
With the aim of achieving the objectives of the medium-term management plan (Fiscal 2018 - Fiscal 2020),
the JOT Group worked to strengthen profitability by maintaining and expanding its transportation market
share, promote growth areas such as LNG transportation, hydrogen transportation, and international
chemical transportation, and improve productivity through increased collaboration among the JOT Group.
We also focused on securing truck drivers and on expanding the number of vehicles, with the aim ofmaintaining a stable transportation operation.
As a result, net sales in the fiscal year under review showed a year-on-year increase of 3.9%, to ¥34,240
million, and operating income fell by 17.5% year-on-year to ¥1,009 million, due to increases in fuel costs
and in personnel and other expenses. Ordinary income fell by 10.4% year-on-year to ¥1,315 million, andprofit attributable to owners of parent fell by 19.8% year-on-year to ¥831 million.

Net Sales

(Millions of yen)

Operating Income
1,150

30,960100th term
- Fiscal 2017

32,951101st term
- Fiscal 2018

Profit Attributable to Owners(Millions of yen)of Parent
1,014

100th term
- Fiscal 2017

102nd term
- Fiscal 2019

1,467

101st term
- Fiscal 2018

102nd term
- Fiscal 2019

Total Assets / Net Assets
(Millions of yen)

32,26017,919101st term
- Fiscal 2018

Ordinary Income

100th term
- Fiscal 2017

Net Assets

34,111

1,315

19,163

101st term
- Fiscal 2018

100th term
- Fiscal 2017

101st term
- Fiscal 201819,110102nd term
- Fiscal 2019

102nd term
- Fiscal 2019

Dividend Per ShareFirst six months (Interim period)

33,279(Millions of yen)

1,467

1,009

Total Assets

1,037
831

100th term
- Fiscal 2017

1,224

34,240102nd term
- Fiscal 2019

(Millions of yen)

(Yen)
Year-end8080804040404040

40

100th term
- Fiscal 2017

101st term
- Fiscal 2018

102nd term
- Fiscal 2019

*Effective October 1, 2016, we undertook a 1-for-10 stock
consolidation, and the presented interim dividend for the
100th term is calculated based on the number of shares postconsolidation.

ANNUAL REPORT 20192

Segment overview (consolidated)
Business description

OilTransportation
Business

High-Pressure
Gas
Transportation
Business

Chemical andContainer
Transportation
Business

Other
Business

3

Overview of the period

Making use of two
different modes oftransportation, namely
rail tank cartransportation, whichenables thetransportation of highvolumes at low cost andwith little environmental
impact, and truck transportation, which is agile and flexible,
the JOT Group conducts transportation of fuel oils such as
gasoline, diesel, and kerosene.

Net sales - ¥17,017 million

The JOT Group conducts
multimodaltransportation by tanker
truck and rail tankcontainers. We link ourcustomers’ satellite
stations and plants, etc.,
to LNG import terminals
around Japan, as well as
to domestic gas fields.

Net sales - ¥8,494 million

In the chemicaltransportation business, theJOT Group is developing
the leasing of containers
for the transport of liquidand powder chemicals andfoodstuffs, as well as
multimodal transportation,
combining various methods of transportation.

Net sales - ¥8,549 million

In the containertransportation business,
the JOT Group is also
engaged in rental andleasing of various types ofrail containers, such as for
agricultural products, foodproducts, industrialproducts, and courier services, in order to meet the needs of ourcustomers.

With regard to the solar
power generation
business, there arecurrently four solar power
plants located aroundJapan.

ANNUAL REPORT 2019Operating income - ¥997 million
In the oil transportation business, faced with the movetowards consolidation and rationalization by oil
manufacturing companies, we took aggressive steps tomaintain and expand our share of the transportation market,
growing both net sales and operating income by revising
freight for our main customers.
As a result, net sales in the oil transportation business rose by
8.1% year-on-year to ¥17,017 million, and operating income
rose by 64.6% year-on-year to ¥997 million.

Operating income - ¥96 million
In the high-pressure gas transportation business, our efforts
to expand new LNG transportations resulted in higher netsales, but due to increases in fuel costs and in personnel andother expenses, operating income fell.
As a result, net sales in the high-pressure gas transportation
business rose by 0.6% year-on-year to ¥8,494 million, andoperating income fell by 79.5% year-on-year to ¥96 million.

Operating loss - ¥151 million
In the chemical transportation business, besides the growthof domestic transportation as a result of proactive
development of sales activities, rate restoration forinternational transportation resulted in a net sales increase.
In the container transportation business, suspension offreight train services caused by natural disasters such as thetorrential rain that hit western Japan in July 2018, and theimpact of poor growth of vegetable crops in the Hokkaido
region, led to a fall in net sales.
As a result, net sales in the chemical and containertransportation business showed a year-on-year fall of 0.4%
to ¥8,549 million.
Moreover, with regard to profits, the fall in net sales caused
by natural disasters, etc., and increases in expenses related toinvestments led to an operating loss of ¥151 million,
compared to operating income of ¥89 million for theprevious fiscal year.

Net sales - ¥179 million
Operating income - ¥66 million
In the solar power generation business, net sales fell by 1.1%
year-on-year to ¥179 million, but operating income rose by
16.5% year-on-year to ¥66 million due to reductions inexpenses.

TOPICS & COLUMN
Chemical transportation business : Topics for Fiscal 2019
- Introduction of new, low-height ISO tank containers
The chemical transportation business of the JOT Group leases mainly ISO tank containers, which conform to international standards.
We have recently developed a new type of low-height ISO tank container for customers considering replacement of old tanker trucks orlooking for new transport means.
By further restricting the height of containers to less than 2 meters, lower than the previous containers used, we achieved a height close tothat of tanker trucks, and also succeeded in reducing the weight.
In addition, by providing toolboxes, hose cases and folding ladders as standard features, instead of as options as had previously been, wemanaged to reduce the time required for conversion of new containers.
In Fiscal 2019 we brought in 30 containers, which have been met by praise from customers. Going forward we plan to increase thisnumber further.
The JOT Group will continue to develop a variety of containers to meet the needs of customers in the future, and put all our efforts into
initiatives to further expanding the business platform.

Low-height ISO tank container

Folding ladder

Introduction to high-pressure gas transportation business (LNG transportation)
LNG transportation at the JOT Group began with tanker truck transportation in 1984, followed by rail transportation in 2000, which wascharacterized by the first use of LNG tank containers in Japan.
LNG stands for Liquefied Natural Gas, which is created by extracting natural gas from gas or oil fields. This is then separated, purified, andrefrigerated to a temperature of -162°C. Because its CO2 emissions are low, LNG is attracting attention as an environmentally friendly and cleansource of energy.
By liquefying, its volume can be reduced to approximately 1/600th of the gas volume, allowing for efficient transportation.
For the transportation of LNG, which is a hazardous substance, the JOT Group has established a specialized training center. Here, in addition toobtaining the necessary knowledge for these operations, personnel utilize a real LNG tanker truck and training-use piping devices to practice theirskills in realistic conditions.
With regard to transportation, we are proud to have the largest domestic transportation share for LNG, the result of approximately 30 locations
nationwide in combination with partner companies.
Going forward, we will focus all our energies on safe and certain transport, while maintaining a keen awareness of our role as an expert in thetransportation of LNG, which as a clean energy source is expected to see further growth in demand.

LNG tanker truck

Practicing skills at the training center

ANNUAL REPORT 20194

Consolidated Financial Statements (Summarized)
Japan Oil Transportation Co., Ltd. and its Consolidated Subsidiaries

CONSOLIDATED BALANCE SHEETS
AssetsCurrent assets:
Cash and deposits
Notes and accounts receivable - trade
Inventories
OtherTotal current assets
Non-current assets:
Property, plant and equipment
Buildings and structures
Machinery, equipment and vehicles
Containers
LandLease assets
Construction in progress
OtherIntangible assets
Software
Other
Investments and other assets
Investment securities
Deferred tax assets
Other
Total non-current assets
Total assets

Millions ofU.S. dollars

Millions of yen

As of March 31, 2019 and 2018

2018

2019

2019

¥ 2,856
3,922
38
571
7,388

¥ 2,046
3,672
166
485
6,371

$
18.4
33.1
1.5
4.4
57.4

20,316
1,869
3,846
3,052
5,486
5,917
59
84
62
60
2
6,343
5,201
633
509
26,723¥34,111

21,155
2,003
4,034
3,232
5,513
6,213
92
65
98
41
57
5,653
4,437
712
504
26,908¥
33,279

190.6
18.1
36.3
29.1
49.7
56.0
0.8
0.6
0.9
0.4
0.5
50.9
40.0
6.4
4.5
242.4
$299.8
Millions ofU.S. dollars

Millions of yen

Liabilities
Current liabilities:
Notes and accounts payable - trade
Short-term loans payable
Lease obligations
Accrued expenses
Income taxes payable
Provision for bonuses
Provision for directors' bonuses
Other
Total current liabilities
Long-term liabilities:
Lease obligations
Deferred tax liabilities
Reserve for vehicle repairs
Net defined benefit liability
Other
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Capital surplus
Retained earnings
Treasury shares, at cost
Accumulated other comprehensive income
Net unrealized gains on other securities
Deferred gains or losses on hedges
Remeasurements of defined benefit plans
Total net assets
Total liabilities and net assets
5ANNUAL REPORT 2019

2018

2019

2019

¥ 2,033
433
1,531
576
332
707
84
990
6,690

¥2,021
538
1,699
784
216
696
100
849
6,908

$18.2
4.9
15.3
7.1
2.0
6.3
0.9
7.7
62.2

4,433578
244
2,566
434
8,258
¥14,948

4,559
351
286
1,583
479
7,260
¥14,169

41.1
3.2
2.6
14.3
4.3
65.4
$127.7

17,762
1,661
290
15,845
(35)
1,400
1,497
(3)
(93)
19,163¥34,111

18,3281,661
290
16,412
(35)
781
908
(0)
(127)
19,110¥33,279

165.1
15.0
2.6
147.9
(0.3)
7.0
8.2
(0.0)
(1.1)
172.2
$299.8

CONSOLIDATED STATEMENTS OF INCOME
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Rent income on fixed assets
Gain on sales of non-current assets
Share of profit of entities accounted for using equity method
Other
Non-operating expenses
Interest expenses
Rent expenses on fixed assets
Loss on sales and retirement of non-current assets
Other
Ordinary income
Extraordinary income
Extraordinary expenses
Profit before income taxes
Income taxes - current
Income taxes - deferred
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent2018

2019

2019

¥
32,951
29,797
3,154
1,930
1,224
500
098256622657
257
73
91
51
40
1,467
269
45
1,692
590
64
1,037
—
¥
1,037

¥34,240
31,144
3,095
2,086
1,009
558
0116
256
51
43
89
252
73
93
39
46
1,315
70
97
1,288
503
(47)
831
—
¥831

$308.5
280.6
27.9
18.8
9.1
5.0
0.0
1.1
2.3
0.5
0.4
0.8
2.3
0.7
0.8
0.4
0.4
11.9
0.6
0.9
11.6
4.5
(0.4)
7.5
—
$7.5

CONSOLIDATED STATEMENTS OF CASH FLOWSMillions ofU.S. dollars

Millions of yen

Years ended March 31, 2019 and 2018

Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
Effect of exchange rate change on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Millions ofU.S. dollars

Millions of yen

Years ended March 31, 2019 and 2018

2018

2019

2019

¥ 4,223(2,979)
(691)
(8)
544
2,311
¥ 2,856¥3,547(3,150)(1,213)7(810)
2,856¥2,046$32.0(28.4)(10.9)
0.1(7.3)
25.7$18.4

Note: The approximate exchange rate in effect on March 31, 2019 was ¥110.99 = U.S. $1.

ANNUAL REPORT 20196Corporate Information

Company Profile (As of March 31, 2019)
Company Name:Japan Oil Transportation Co., Ltd.

Established:

March 27, 1946

Head Office:

WEST BLDG. Gate City Ohsaki
11-1, Ohsaki 1-chome, Shinagawa-ku, Tokyo 141-0032, Japan
TEL: 81-3-5496-7671
URL: https://www.jot.co.jp/en

Paid-in Capital:¥1,661 million

Number of Employees: 1,494 (consolidated); 159 (non-consolidated)

Primary Business1. Transportation of oil products (gasoline, kerosene, etc.) by rail tank car and truck
2. Transportation of high-pressure gas (LNG, etc.) by rail container, truck, and intermodal transportation
3. Transportation of petrochemical and related products by rail container, truck, and domestic and international intermodal transportation;leasing of a range of containers
4. Rental and leasing of railway refrigerated containers and freezer containers and related items
5. Solar power generation business

Major Subsidiaries (As of March 31, 2019)
Paid-in
CapitalEquityOwnership

ENEX, Inc.

¥100 million

100.0%

Trucking transportation of oil products, high-pressure gas, and related
products, disaster prevention at petroleum industry complexes

Kinki Oil Transportation Co., Ltd.

¥ 75 million

100.0%

Trucking transportation of oil products, high-pressure gas, andrelated products

NICHIYU CO., LTD.

¥ 40 million

100.0%

Sales and leasing of rail vehicle and container accessories, insurance
agencyNew J’s Co., Ltd.

¥ 48 million

100.0%

Trucking transportation of petrochemical and related products,
automobile services

JK TRANS Co., Ltd.

¥100 million

100.0%

Trucking transportation of oil products, petrochemical andrelated productsCompany NamePrimary BusinessJapan Oil Transportation Co., Ltd.
WEST BLDG. Gate City Ohsaki
11-1, Ohsaki 1-chome, Shinagawa-ku, Tokyo 141-0032, Japan
Printed in Japan