ANNUAL REPORT 2012 - maruzenshowa.co.jp · Financial Highlights ... tion brought about by the...

ANNUAL REPORT 2012

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Financial Highlights

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

Income (Loss) before income taxes ..........................

Net income(Loss) .........................................................

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

Property and equipment-net ......................................

Shareholders' equity ...................................................

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

Note:The amount in U.S. dollars was translated at the rate of ¥82=US$1,the effective rate at March 31, 2012. 　　 See Note 2 of Notes to Financial Statements

￥ 87,1214,4572,654

94,16541,92455,5693,235

￥ 85,6023,0371,834

92,66143,38653,9793,214

＄ 1,062,45154,35332,365

1,148,353511,268677,670

Operating Revenues Composition

Millions of yen2012　　　　2011

Thousands ofU.S. dollars

(Note 2)2012

Physical distribution ....................................................

Operations inside factories ........................................

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

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

951,939193,03643,951

1,188,926

898,365178,40248,475

1,125,243

780,304165,17044,182

989,658

832,000171,32940,597

1,043,926

841,280178,93942,219

1,062,451

Year ended March 31,　2008 2009 2010 2011 2012

(Thousands of U.S. dollars)

20122008 2009 2010 2011

16.8

79.2

4.0

800,000

850,000

900,000

950,000

1,000,000

1,050,000

1,100,000

1,150,000

1,200,000

1,250,000

1,300,000

1,350,000

For the year ended March 31, 2012 Operating revenues and Total assets (Millions of U.S.dollars)

Physical distributionOperations inside factories

OtherTotal

79.2%16.8%4.0%

100.0%

Message From The Management

I Business Review

1. Developments and accomplishments in busi-ness services by the Group

In this consolidated fiscal year under review, although there was demand fueled by recon-struction projects due to the Great East Japan Earthquake and recovery in corporate productiv-ity was seen, there are still plenty of reasons for concern, including the worldwide economic stagna-tion brought about by the European Debt Crisis, the prolonged deflationary trend and the continu-ing severe employment environment, as well as the yen appreciation and sharp rise in crude oil prices, and the extremely severe situation continued.

Meanwhile, in the logistics industry as well, environment has continued to be extremely severe.

Transportation volume of international cargo remained at the same level due to a decrease of export cargo, despite a steady trend of import cargo. Moreover, domestic cargo transport was affected seriously by the Great East Japan Earthquake, with a continuing decline that shows no signs of a bottom in the weak recovery of pro-duction and consumption after the disaster, and on top of that there has been the continuing spike in the price of fuel for trucking.

In these circumstances, the Company Group formulated its 4th Medium-term Management Program for the three years starting FY2010, and has been implementing this program. In this consolidated fiscal year, as the second year of the Program, based on the focal measures: (1) growth in sales, (2) maintenance and improvement of logis-tics quality, and (3) reinforcement of corporate infrastructure; the Company named enhancement of efforts for “expansion of sales through 3PL (third party logistics: logistics bulk original con-tracting business) business, global logistics busi-ness and diversification of customer industries” as guiding principles, and also established a new Logistics Quality Environment Department in April last year, thus steadily executing the second-

year tasks with group-wide efforts to improve logistics and environmental quality, in working to achieve its earnings target.

As a result, consolidated sales for this fiscal year totaled JPY 87,121 million, a 1.8% increase from the preceding term, operating income totaled JPY 4,213 million, up 14.9% over the preceding term, and ordinary income totaled JPY 4,683 mil-lion, up 17.3% year-on-year. Net income increased by 44.7% year-on-year, to JPY 2,654 million, due to the fact that in the preceding fiscal year large amount of valuation loss on investment securi-ties and disaster losses due to the East Japan Earthquake Disaster were recorded.

The business conditions for each segment are as follows:

Logistics Operations For freight transportation operations, there was

an overall increase in revenue, with an increase in the volume of transport handled in the Kanto region due to an increase in handling of exports of construction equipment products and parts, despite a decrease in production by customers as a result of the Great Earthquake and a decrease in resin-related handling, as well as an increase in the volume of transport handled for chemical paints and daily miscellaneous goods, etc. in the Kansai Region.

In harbor transportation operations there was an overall increase in revenue. In the Kanto region, although the deterioration in nonferrous metal market conditions was very significant and there was a decrease in importing volume handled, there were increases in handling of exports related to construction machinery products and parts, and imports and exports of housing construction mate-rials. In addition, there was an increase in the han-dling of machine tool relocation operations oriented to China.

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In warehousing operations, in the Kanto region, there was a drastic decrease in import volume han-dled due to the deterioration of nonferrous metal market conditions, resulting in a huge decrease in both storage volume and operations, and also a severe decrease in air cargo storage handling, how-ever there was an increase in handling of carbon raw materials, food salts, and construction machin-ery related handling, etc. In the Chubu Region as well, the volume of plastics and nursing care goods, etc. handling increased, and after all there was an overall increase in revenue.

In train transportation operations there was in an overall increase in revenue due to increased JR container handling volumes such as for insulation materials, etc. in the Kanto region.

In other business operations incidental to logistics, there was an overall decrease: there was an increase in coasting vessel revenues, with increased handling of cereals. In oceangoing vessel revenues, due to a decrease in nonferrous metal import handling, revenue decreased. In aircraft revenues, there was an increase as a result of the shifting of plant-related handing from marine trans-portation to aircraft transportation; while in pack-aging revenues, there was dramatic decrease in revenues due to a decrease in operational volume as a result of the Great Earthquake, changes in the system of charges, and decreased handling of video-related equipment.

Yard Operations and Mechanical Cargo Handling In yard operations, although there was a

decrease in handling due to downsizing of resi-dential equipment related operations and transfer in the Chubu region, there was an increase in new orders received and in handling volume for construction machinery related assembly opera-tions in the Kanto region, as well as an increase in operational volume accompanying restoration from the Great Earthquake, and as a result revenue increased overall.

In mechanical cargo handling there was an increase in revenue due to increase in crane proj-

ects.

Other Operations In construction operations there was a dramatic increase in revenue due to large-scale relocation projects in the Kanto region. In real estate rental revenues, there was a decrease due to the comple-tion of contracts in the Kansai region.

2. Issues to be Addressed The Japanese economy seems to be still in an

unpredictable situation due to concern over the worldwide economic slowdown, the crude oil cost increase and the prolonged appreciation of the yen.

In this environment, the Group is in the final year of the 4th Medium-term Management Program, aiming at circulation of the growth cycle,

“reinforcement of infrastructure, improvements of quality and expansion of sales” towards "over 100 billion yen in consolidated sales." It is predicted that the prolonged yen appreciation will drive overseas relocation or overseas procurement by corporations, but the Group aims to create a cor-porate culture that can handle fluctuating circum-stances flexibly and properly without becoming optimistic or pessimistic over short-term changes. For this goal, all workers of the Group will make concerted efforts by taxing their ingenuity, work-ing hard on focal measures, and making the utmost efforts to achieve "over 100 billion yen in consoli-dated sales" at an early stage.

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4

MASAYOSHI NOGUCHIChairman

Board of DirectorsChairman Masayoshi noguchi *President Toshiyuki Asai *Senior Managing Director Keiji Onishi *Managing Director Masahiro NakamuraManaging Director Kiyoshi SuzukiManaging Director Saburo NoguchiManaging Director Hidetsugu UeyamaDirector Kiyoshi TakadaDirector Yu KinoshitaDirector Haruo SuzukiDirector Hitoshi Kayama Director Tetuzou ImamuraDirector Masaya NakanoDirector Hideaki SuzukiDirector Kenichi IshikawaDirector Shuichi TakahashiOutside Director Akinobu NaitoStanding Statutory Auditor Masaharu YamagataStanding Statutory Auditor Masuo YokotaStatutory Audito Hiroshi SaitoStatutory Audito Masumi Okabe

(As of June 29, 2012)*Representive Directors

TOSHIYUKI ASAIPresident

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Maruzen Showa Unyu Co., Ltd. commenced harbor cargo transportation services in Yokohama in 1931. Subsequently establishing operations centers based in the major cities of Tokyo, Osaka, Kobe, Nagoya, etc., respective licenses were suc-cessively secured for the conducting of domestic transportation services which have continued to expand, year after year. Today there are 169 busi-ness offices throughout Japan and we are also operating 41 domestic subsidiary companies in related operations. Overseas subsidiary corporations have been established in Hongkong and Los Angeles in the U.S. in 1974. An office for a representative has

been opened in Beijing in 1985. The Taiwan office in Taipeh has been replaced in 1996 by a local corpo-ration under the name of Taisho Co., Ltd. A second office for a representative has now been opened in China, this time in Shanghai in 1995. In 1996, a local entity was established in Singapore as ‘Maruzen Showa Singapore Pte. Ltd.’ In 1997, a local entity was established in Xuzhou, China as “Xuzhou Maruzen Foreign Trade Transportation Co., Ltd.” In 2006 Maruzen Showa (GZ) Co.,Ltd~in Guanydong,China. These overseas offices reflect our objective to achieve “upgraded transportation services by sea, land and air” on a global basis.

These operations utilize trucks for regional cargo transportation within and between the vari-ous districts or areas, to fully utilize their advan-tage in speed. Our organization, besides providing cargo transportation services between and within the large cities of Tokyo, Yokohama, Osaka, Kobe, etc. operates long distance trucking services to every possible location throughout the country.Our trucking operations also provide door to door package delivery services and domestic moving services. The operations are in fact, the largest of our varied company services which have evolved from

the growth and development from our warehouses and distribution centers, and by linking up to the harbor cargo transportation services, railway express agency services, domestic maritime and air cargo services, detailed and diversified trans-portation services are made available to all of our customers. The cargo handling equipment and facilities retained for these operations as of the 31st March 2012 consisted of 17 truck terminals and 997 units of trucks, tank lorries, trailers, etc. (inclusive of all subsidiaries and affiliates.)

TRUCK HAULING OPERATIONS

Lines Of Business

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HARBOR TRANSPORTATION

OPERATIONS INSIDE FACTORIES

7

WAREHOUSING

OTHERS

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INTERNATIONAL MULTIPLE INTEGRATED TRANSPORTATION

The inauguration of a third party logistics systemThe 3rd party logistics system named MLP (Maruzen

Logistics Partner) system has inaugurated operations in December 2004.

This new system utilizes the latest Internet technology and has been architecturally structured to globally accommodate the economy and thereby provide its customers with the necessary tools as the best possible logistics partner.(The system is comprised of the 3PL information center, warehouse management,transport and delivery management, customs clearance management for sea cargo/ bonded warehouse/import and export procedures)

The Maruzen Showa Freight Transportation Group as

an overall integrated logistics group is prepared to undertake the overall general logistics requirements of its customers and aims to provide the best and most complete information pertaining to the logistic requirements of its customers and undertake all the operations involved to concentrate their operations in seeking the cheapest logistic costs possible, covering warehousing costs, cargo status reports, etc. and up to date cargo related information services for the best ultimate concentration of the customers' requirements.

The Maruzen Showa Freight Transportation Group proceeds to revolutionize the flow of business with the application of this new concept in logistics.

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MARUZEN SHOWA UNYU CO., LTD.Consolidated Statements of Income and Retained EarningsFor the Years Ended March 31, 2012 and 2011

Operating revenues:Physical distribution .........................................................................Operations inside factories ..............................................................Other ................................................................................................... Total operating revenues .......................................................

Operating cost and expenses:Operating costs .................................................................................Gross Profit ........................................................................................Selling, general and administrative expenses ..............................Operating income ..............................................................................

Other income(expenses):Interest and dividends income ........................................................Interest and discount charges .........................................................Income(Loss) on disposal of fixed assets, net ..............................Other, net ............................................................................................ Income(Loss) before income taxes .....................................

Income taxes:Current ................................................................................................Deferred .............................................................................................. Total income taxes ........................................................................... Minority interests ...............................................................................Net income(Loss) .............................................................................

Retained earnings:Beginning of year ..............................................................................Net income(Loss) ..............................................................................Others .................................................................................................

Appropriations: Cash dividends ..............................................................................End of year .........................................................................................

Per share:amountsShareholder's equity .........................................................................Net income(Loss) ..............................................................................Cash dividends applicable to the year ..........................................

￥68,98514,6733,462

87,121

79,2917,8303,6164,213

251(259)(23)275

4,457

1,640134

1,77428

2,654

37,8842,654

84

(830)39,792

¥619.83¥ 29.32¥ 9.00

￥68,22414,0493,327

85,600

78,2797,3223,6553,667

312(259)(47)

(636)3,037

1,215(26)

1,18913

1,834

36,7881,834

-

(738)37,884

¥594.62¥ 20.25¥ 8.00

＄841,280178,93942,220

1,062,451

966,96395,48844,09851,378

3,061(3,159)

(280)3,354

54,354

20,0001,634

21,634341

32,366

462,00032,366 1,024

(10,122)485,268

U.S.dollars＄ 7.559＄ 0.358＄ 0.110


(Note 2)2012


Yen

Assts Current assets:

Cash .........................................................................................................Short-term investments(Note 3) ...........................................................Accounts and notes receivable ............................................................Allowance for doubtful accounts .........................................................Inventories ...............................................................................................Prepaid expenses ...................................................................................Deferred tax assets ................................................................................Other current assets............................................................................... Total current assets ...................................................................

Investments and other assets:Investments in advances .......................................................................Investments in securities ....................................................................... Total investments and other assets ......................................

Other assets:Deferred tax assets ................................................................................Other .........................................................................................................Allowance for doubtful accounts ......................................................... Total assets .................................................................................

Property and equipment, at cost(Note 5) : Land ..........................................................................................................Buildings and structures ........................................................................Vehicles ...................................................................................................Machinery and equipment .....................................................................Tools, furniture and fixture ....................................................................Lease assets ..........................................................................................Net property and equipment .................................................................Construction in progress .......................................................................Accumulated depreciation ....................................................................Intangible fixed assets ........................................................................... Total assets .................................................................................

LiabilitiesCurrent liabilities:

Short-term loans(Note 4) .......................................................................Curret portion of long-term debt(Note 5) ............................................Bonds due within one year ...................................................................Accounts and notes payable ................................................................Accrued expenses ..................................................................................Income taxes payable ............................................................................Other current liabilities .......................................................................... Total current liabilities .............................................................Bonds payable ........................................................................................Long-term debt(Note 5) ........................................................................Defrred tax liabilities ..............................................................................Retirement and severance benefits .....................................................Other non-current liabilities ................................................................... Total liabilities .............................................................

Minority interest .................................................................................................

Shareholders' Equity(Note 8) :Authorized, 197, 000 thousand sharesIssued, 2011-98, 221 thousand shares 2010-98, 221 thousand shares .............................................

Additional paid-in capital ..................................................................................Retained earnings ..............................................................................................Unrealized gain on available for sale securities............................................Treasury stack ....................................................................................................Translation adjustment ......................................................................................

Total Shareholders' equity .............................................................Total liabilities and shareholders' equity .....................................

See the accompanying Notes to the Consolidated Financial Statements.

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MARUZEN SHOWA UNYU CO., LTD.Consolidated Balance Sheets March 31, 2012 and 2011


(Note 2)2012


￥ 7,069 5,399 18,479

(19)116466605

1,19133,306

23012,46712,697

155,490

(27)5,478

18,35957,5369,2119,985

618941

96,650208

(54,934)757

94,165

￥ 8,5321,256

299,5311,9871,1362,008

24,479144

10,5741,470

5281,400

38,595

81

9,1177,848

39,792(2,465)1,525(328)

55,488￥ 94,165

￥ 6,000 5,614 17,145

(65)112469670864

30,809

19111,84912,040

195,314

(31)5,302

18,35457,4469,1629,900

612751

96,22541

(52,880)1,122

92,661

￥ 8,5971,252

14 8,6571,690

9732,265

23,44872

11,0221,5511,0041,584

38,681

101

9,1177,848

37,884(2,174)1,511(308)

53,878￥ 92,661

＄ 86,20765,841

225,354(232)

1,4155,6837,378

14,524406,171

2,805152,037154,841

18366,951

(329)66,805

223,890701,659112,329121,768

7,53711,476

1,178,6592,537

(669,927)9,232

1,148,354

＄ 104,04915,317

354116,23224,23213,85424,488

298,5241,756

128,95117,9276,439

17,073470,671

988

111,18395,707

485,268(30,061)18,598(4,000)

676,683＄ 1,148,354

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MARUZEN SHOWA UNYU CO., LTD.Consolidated Statements of Cash Flows For the Years Ended March 31, 2012 and 2011

Cash flows from operating activities:income(Loss) before income taxesAdjustments to reconcile income before income

taxes to net cash provided by operating activities: Depreciation ........................................................................................Decrease (Increase) in accounts an notes receivables ...............Decrease (Increase) other assets ....................................................Increase (Decrease) in accounts and notes payables ................Increase (Decrease) in consumption tax, etc ................................Increase (Decrease) in other liabilities ...........................................Gain on sale of property and equipment ........................................Gain (loss) on sale of investments of securities ...........................Loss on sale of property and equipment ........................................Payment of bonuses to officers .......................................................Dividend and interest income ..........................................................Interest expenses ............................................................................... Other appraisal loss ...........................................................................Other ....................................................................................................Sub total ..............................................................................................

Interest and dividend received ..............................................................Compensation received for transfer .....................................................Interest paid .............................................................................................Income taxes paid ...................................................................................

Net cash provided by operating activities: ........................

Cash flows from investing activities:Acquisition of investments in securities ..............................................Proceeds on sale of other investments in securities ........................Proceeds on sale of property and equipment .....................................Acquisition of property and equipment ................................................Acquisition of intangibles ......................................................................Proceeds on sale of other investments ...............................................Acquisition of other investments ..........................................................Collection of short-term loans receivable ...........................................Expense by having acquired the stocks of subsidiary company ..... Other ......................................................................................................... Net cash used in investing activities .....................................

Cash flows from financing activities:Increase in short-term debt ....................................................................Decrease in short-term debt ..................................................................Increase in long-term debt .....................................................................Repayment of long-term debt ................................................................Proceeds on sale of reasury stocks .....................................................Acquisition of treasury stocks ...............................................................Payment of ｃ onvertible bond ..............................................................Bond payable ...........................................................................................Payment of dividends .............................................................................Other .........................................................................................................

Net cash used in financing activities ..................................

Effect of exchenge rate changes on cash and cach equivalents ..............Net decrease in cash and cash equivalents ..................................................Cash and cash equivalent at beginning of year ............................................Cash and cash equivalent at beginning of year of new consolidated subsidiary ..........................................................Cash and cash equivalent at end of year ......................................................

￥ 4,457

2,929 (1,316)

(52)933 162 (529)

- 107 22 (2)

(252)259 - (167)

6,551 272 -

(261)(1,454)5,108

(794) - 38

(982)(49)

655 (848)

85 -

(321)(2,216)

15 (109)867

(1,281) - - - 110 (830)(481)

(1,709)

(23)1,159

11,599

109 12,868

￥ 3,037

3,139 (597)(17)

143 (183)(395)

- 439 46 1

(313)259 -

206 5,765

334 -

(260)(484)

5,354

(991) -

151 (3,344)

(179)843 (737)

31 - (41)

(4,267)

100 (154)

3,345 (1,127)

- -

(5,000) -

(738)(147)

(3,721)

(44)(2,679)

14,279

- 11,599

$ 54,354

35,720 (16,049)

(634)11,378 1,976 (6,451)

0 1,305

268 (24)

(3,073)3,159

- (2,037)79,890 3,317

0 (3,183)

(17,732)62,293

(9,683)0

463 (11,976)

(598)7,988

(10,341)1,037 -

(3,915)(27,024)

183 (1,329)10,573 (15,622)

- -

0 1,341

(10,122)(5,866)

(20,841)

(280)14,134

141,451

1,329 156,927


(Note 2)2012


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MARUZEN SHOWA UNYU CO., LTD.Notes to Consolidated Financial Statements March 31, 2012 and 2011

The consolidated financial statements include the accounts of the Company and its 24 and 24 significant subsidiaries at March 31,2012 and 2011, respectively.All significant intercompany accounts and transactions unrealized profit among Companies if any, have been

eliminated from the consolidated financial statements.Some subsidiaries, which has no material effect on the consolidated financial statements of the Companies, has been excluded from the consolidated financial statements.

1. Significant Accounting Policies (a) Basis of presenting the consolidated financial statements

The accompanying consolidated financial statements have been prepared from the accounts maintained by Maruzen Showa Unyu Co., Ltd. (the "Companies")and consolidiaries in accordance with the provisions set forth in the Japanese Commercial Code (the "Code") and in conformity with accounting principles and practices generally accepted in Japan, which are different in certain

respects as to application and disclosure requirements from that of International Accounting Standards.The consolidated financial statements are not intended to present the consolidated financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Japan.

(b) Principles of consolidation

The Company has provided for doubtful accounts at the maximum deductible amount for tax purposes, plus an

additional amount as deemed necessary. (c) AIlowance for doubtful accounts

Supplies are stated at cost, determined by the last method, other inventories are stated, determined by the

individually identified cost method. (d) Inventories

Previously, finance leases that do not transfer the ownership of the leased property to the lessee at the expiration of the lease were recorded as operating leases, however, since “Accounting Standards for Lease Transactions” (ASBJ Statement No. 13 (June 17, 1993 (the First Subcommittee of Business Accounting Council), revised on March 30, 2007)) and “Financial Guidance on Accounting Standards for Lease Transactions” (ASBJ Guidance No. 16 (January 18, 1994 (Japanese Institute of Certified Public Accountants, Accounting Standards Committee), revised on March 30, 2007)) began to be applied pertaining to fiscal years starting on or after

April 1, 2008, our Group adopted these new accounting standards from the current fiscal year, and we have accounted for lease transactions as ordinary sales and purchase transactions. Note that for finance leases that do not transfer the ownership of the leased property to the lessee at the expiration of the lease, with transaction commencement dates before the initial year of adoption of these standards, the previous method of operating lease accounting has continued to be used.There was no impact from this change on income for the current fiscal year.

(f) Accounting Standards for Lease Transactions

① Tangible fixed assetsThe declining-balance method is mainly applied; provided, however, that the straight-line method is applied to buildings that the Company acquired on or

after April 1, 1998 (excluding building equipment). Main service lives are as follows: Buildings and structures 2 to 65 years Machinery and equipment 2 to 17 years

(e) Depreciation methods for significant depreciable assets

② Significant changes in accounting principlesUseful lives for machinery and equipment of the Company and its domestic consolidated subsidiaries were changed to those in conformance with the present asset use status, as a result of the revisions of Corporation Tax Law in FY2008.

Consequently, useful life for overall machinery and equipment, which is 2-17 years, was not changed, however, depending on the type of the asset, useful life has been extended.

13

Long-term debt denominated in foreign currency is translated into Japanese yen at forward foreign exchange contract rate. Gain on forward exchange contracts are

deferred and credited to current income over the contract period.

(j) Translation of debt denominated in foreign currencies

Net income per share is based on the weighted average number of shares of common stock outstanding during the respective year. Fully diluted net income per share

additionally assumes the conversion of the convertible bonds.

(k) Net income per share

The Company maintains its accounting records in yen. The dollar amounts included in the non-consolidated financial statements and notes thereto represent the arithmetical results of translating yen into dollars on a basis of \82=U.S.$1, the approximate effective rate of exchange at March 31,2012.

The inclusion of such dollar amounts is solely for convenience and is not intended to imply that yen and assets and liabilities originating in yen have been or could be readily converted, realized or settled in dollars at ¥82 = U.S.$1 or at any other rate.

2. U.S. Dollar Amounts

At March 31,2012 and 2011 short-term investments consisted of the following:

Short-term bonds........................................................................................

3. Short-term Investments

5,399￥ 5,399

5,614￥ 5,614

65,841$ 65,841


2012Millions of yen

2012　　　　2011

At March 31,2012 and 2011, investments in securities consisted of the following:

Marketable equity securities ......................................................................Other equity securities ............................................................................... Bonds and other .........................................................................................

Market value of marketable equity securities ..................................................

4. Investments in Securities

￥ 8,1514,272

44

￥ 12,467

￥ 7,7683,954

127

￥ 11,849

$ 99,40252,098

537

$ 152,037


2012Millions of yen

2012　　　　2011

Cash dividends, transfers to legal reserve and bonuses to directors and statutory auditors are recorded in the

financial year when a proposed appropriation of retained earnings is approved by the shareholders.

(i) Appropriation of retained earnings

The Company has adapted the assets-liability method of tax effect amounting to recognize the effect, of all temporary differences in the recognition of tax basis

assets, and liabilities and their financial reporting amounts.

(h) Income Taxes

The company provided allowance for employees' severance and retirement benefits as of the balance sheet dates based on the estimated amounts of projected benefit obligation and the fair value of plan assets at these dates.Unrecognized actuarial gains or losses are amortized using

the straight-line method over certain period (10 years) that does not exceed the remaining average service period from the date incurred.Amortization of unrecognized actuarial gains or losses begins in the year following that in which incurred.

(g) Retirement benefits

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The Company pledged the following assets as collateral for the above-mentioned long-term debt as March 31, 2012:

Property and equipument, principally land and buildings ...........................................................................................

6. Leases

￥ 1,412 $ 17,220


2012Millions of yen

2012

At March 31,2012, the repayment plan of the above-mentioned long-term debt for the next three years was as follows:

For the year ending March 312013 .........................................................................................................2014 .........................................................................................................2015 .........................................................................................................After 2016 ...............................................................................................

￥ 5,951668

3,457497

￥ 10,573

$ 72,5738,146

42,1596,061

$ 128,939


2012Millions of yen

2012

At March 31, 2012 and 2011, long-term debt consisted of the following:

Loans front banks principally collateralized ............................................. Less, current portion .................................................................................

￥ 10,574(1,256)

￥ 11,022(1,252)

$ 128,951(15,317)


2012Millions of yen

2012　　　　2011

At March 31,2012 and 2011, short-term loans consisted of the following:

Unsecured notes payable to banks due one year .............................................

5. Short-term Loans and Long-term Debt.

￥ 8,532 ￥ 8,597 $ 104,049


2012Millions of yen

2012　　　　2011

Notes on fixed assets used by lease1. Finance lease transactions(lessor)

Finance leases that do not transfer the ownership of the leased property to the lessee at the expiration of the lease① Details of lease assets Tangible fixed assets Vehicle equipment in logistics business② Depreciation method of lease assets

Depreciation is based on the straight-line method over the lease term of the leases assets, the residual value of which is zero.

Note that for finance leases that do not transfer the ownership of the leased property to the lessee at the expiration of the lease, with transaction commencement dates before March 31, 2008, the previous method of operating lease accounting has continued to be used, and contents thereof shall be as follows:

Acquisition cost, accumulated depreciation, net book value, depreciation expense, and interest expense on the leases assets consisting primarily of machinery and equipment, if capitalized, would have been as follows:

Acquisition cost ........................................................................................Accumulated depreciation ........................................................................Net book value ..........................................................................................Depreciation expense ................................................................................Interest expense ........................................................................................

￥ 1,203￥ 1,166￥ 36￥ 130￥ 14

$ 14,671$ 14,220$ 439$ 1,585$ 171


2012Millions of yen

2012

15

The shareholders approved a proposal at the annual meeting on June 28, 2012 to distribute cash dividends in

the aggregate amount of ¥369 million ($ 4,500 thousand).

8. Shareholders' Equity

At March 31, 2012, the Company was contingently liable for trade notes discounted at banks and endorsed to third parties in the ordinary course of business and for guarantees of loans by the Company's major shareholder and subsidiaries in the amounts of ¥68 million ($829 thousand) and ¥634 million ($7,732thousand), respectively. The Company has made various rental and lease agreements

for office spaces, houses for employees and warehouses which are generally cancelable with a few months notice and also non-cancelable lease agreements for computer equipment, telecopiers, copying machines, personal computers, pallets and forklifts. Such rent and lease charges are summarized in Note 9.

7. Commitments and Contingent Liabilities

The amount of outstanding future lease payments due at March 31, 2012 and 2011, including the portion of interest thereon, were as follows:

Future lease payment Within one year .......................................................................................Over one year ..........................................................................................Total one year ..........................................................................................

￥ 324

36

￥ 13850

188

$ 39049

439


2012Millions of yen

2012　　　　2011

Depreciation is based on the straight-line method over the lease term of the leases assets, the residual value of which is zero. Interest is computed based on the allocation of the excess amount of total lease payments over the acquisition cost of leased assets, using the interest method.

Lease rental expenses on finance lease contracts without ownership-transfer for the years ended March 31, 2012 and 2011, were as follows:

Lease rental expenses................................................................................. ￥ 144 ￥ 240 $ 1,756


2012Millions of yen

2012　　　　2011

The Law on Partial Revision of the Income Tax Law to Construct a Tax System That Responds to Changes in the Business World (Law No. 114, 2011) and the Law on Special Measures to Secure Funding to Implement Reconstruction Measures in the Wake of the Great East Japan Earthquake (Law No. 117, 2011) were promulgated on December 2, 2011. These provisions lower the corporate tax rate and levy a special corporate tax for reconstruction for consolidated accounting years beginning on or after April 1, 2012. With these revisions, a temporary change applies in the normal effective statutory tax rate used to calculate deferred-tax assets and deferred-tax liabilities. This temporary change applies from the consolidated accounting year beginning on or after April 1, 2012, reducing the rate from 40.6% to 37.9%, until the consolidated accounting year beginning on or after April 1, 2014, when it is expected to be cancelled. A temporary change to 35.5% applies at this point, and is expected to be cancelled for the consolidated accounting year beginning on or after April 1, 2015.

As a result of these changes in tax rates, the amount of deferred-tax liabilities (the amount deducted from deferred-tax assets) is reduced by ¥180 million; the amount of corporate-tax and other adjustments is reduced by ¥53 million; and the balance of losses on revaluation of other marketable securities is increased by ¥126 million.

9. Revision of amount of deferred-tax assets and deferred-tax liabilities as a result of changes in the corporate-tax and other tax rates

16

MARUZEN SHOWA UNYU CO., LTD.Non-Consolidated Statements of Income and Retained EarningsFor the Years Ended March 31, 2012 and 2011

Operating revenues:Truck hauling ...................................................................................Operations inside factories ............................................................Harbor transportation ......................................................................Warehousing ....................................................................................Other ................................................................................................. Total operating revenues ......................................................

Operating costs and expenses:Salaries payrolls and fringe benefits ............................................Outside carriers freight charges ....................................................Outside contractor'fee ....................................................................Fuels .................................................................................................Depreciation .....................................................................................Other ................................................................................................. Total operating costs and expenses ...................................Operating incom ..............................................................................

Other income(expenses):Interest and dividends income ......................................................Interest and discount charges .......................................................Income (Loss) on disposal of fixed assets, net ..........................Write-down of investment in securities ........................................Miscellanceus,net ...........................................................................

Income(Loss) before income taxes ......................................

Income taxes:Current ..............................................................................................Deferred ............................................................................................Total income taxes .........................................................................Net income (Loss) ...........................................................................

Retained earnings:Beginning of year ............................................................................Net income .......................................................................................

Appropriations: Cash dividends ............................................................................ End of year ...................................................................................

Per share:amountsNet income (Loss) ...........................................................................Fully diluted .....................................................................................Cash dividends applicable to the year ........................................

￥ 27,06713,09410,8979,075

11,91972,052

7,358 23,836 29,544

330 2,073 5,402

68,543 3,509

337 221 (50)

(107)(387)

14 3,523

(1,310)(134)

(1,444)2,079

32,417 2,079

(830)¥ 33,666

¥ 22.56 -

¥ 9.00

￥ 26,99012,325 10,872 8,634

11,92370,744

7,891 24,015 27,955

310 2,271 5,367

67,809 2,935

341 213 (63)

(438)(769)(716)2,219

890 (2)

(886)1,332

31,822 1,332

(738)¥ 32,417

¥ 14.44 -

¥ 8.00

$ 330,085159,683132,890110,671145,354878,683

89,732290,683360,293

4,02425,28065,878

835,890 42,793

4,1102,695(610)

(1,305)(4,720)

171 42,963

(15,976)(1,634)

(17,610)25,353

395,32925,353

(10,122)$410,560

0.2750.0000.110


(Note 2)2012


U.S.dollarsYen

17

MARUZEN SHOWA UNYU CO., LTD.Non-Consolidated Balance Sheets March 31, 2012 and 2011

Assts Current assets:

Cash .........................................................................................................Short-term investments(Note 3) ...........................................................Accounts and notes receivable ............................................................Allowance for doubtful accounts .........................................................Inventories ...............................................................................................Prepaid expenses ...................................................................................Deferred income taxes ..........................................................................Other current assets............................................................................... Total current assets ....................................................................

Investments and other advances: Investments in advances .......................................................................Investments in securities .......................................................................

Other assets:Other ......................................................................................................... Total investment and other assets ...........................................

Property and equipment,at costLand ..........................................................................................................Buildings and structures ........................................................................Vehicles ...................................................................................................Machinery and equipment .....................................................................Tools, furniture and fixture ....................................................................Lease assets ........................................................................................... Construction in progress .......................................................................Accumulated depreciation ....................................................................Intangible asset....................................................................................... Net property and equipment ...................................................... Total assets .................................................................................

LiabilitiesCurrent liabilities:

Short-term loans ..................................................................................... Current portion of long-term debt ......................................................... Accounts and notes payable ................................................................Accrued expenses ..................................................................................Income taxes payable ............................................................................Other current liabilities .......................................................................... Total current liabilities ..............................................................

Bonds payable .................................................................................................... Long-term debt .................................................................................................... Deferred tax liabilities........................................................................................Retirement and severance benefits ................................................................. Other non-current liabilities .............................................................................. Total liabilities .........................................................................Commitments and contingent liabilitiesShareholders' Equity(Note 8) :Common stock, ￥50 par value($0. 38)

Authorized, 197, 000 thousand sharesIssued,2011-98,221 thousand shares 2010-98,221 thousand shares ................................................

Additional paid-in capital ..................................................................................Legal reserve.......................................................................................................Retained earnings ..............................................................................................Unrealized gain on marketable securities ......................................................Treasury stack ....................................................................................................

Total Shareholders' equity .............................................................Total liabilities and shareholders' equity .....................................

￥ 3,7485,399

15,070(17)84

331384

3,22228,221

4,5168,956

4,87918,349

16,74749,3913,8419,448

451178199

(43,794)685

37,14683,718

7,817955

8,8051,404

953583

20,517144

10,102 1,453

368931

33,515

9,1177,8441,658

32,009(1,871)1,445

50,202￥83,718

￥ 3,2075,614

14,170(66)83

327463

2,50926,307

4,4678,493

4,70817,668

16,74249,3593,8969,372

450116

2(42,228)

992 38,70082,688

7,817964

8,0401,459

745735

19,76072

10,161 1,529

8341,120

33,476

9,1177,8441,658

30,761(1,580)1,412

49,212￥82,688

＄ 45,70765,841

183,780(207)

1,0244,0374,683

39,293344,159

55,073109,219

59,500223,792

204,232602,32946,841

115,2205,5002,1712,427

(534,073)8,354

453,0001,020,951

95,32911,646

107,37817,12111,6217,112

250,2071,756

123,195 17,7194,487

11,353408,719

111,18395,65920,219

390,354(22,816)17,621

612,220＄1,020,951



(Note 2)2012

● Tokyo Office1-12-7 Shiba, Minato-Ku, Tokyo 105-0014SHIBAITTUCHOUME BLDG…5FPhone:(03)6722-4500 Fax:(03)6722-4510

★ Marujyu Unyu Soko Co., Ltd.★ Maruzen Mito Unyu Co., Ltd. ★ Maruzen Hokkaido Unyu Co., Ltd.★ Maruzen Keihin Butsuryu Co., Ltd.★ Maruzen Kawasaki Butsuryu Co., Ltd.★ Maruzen Kashima Butsuryu Co., Ltd.★ Maruzen Chubu Butsuryu Co., Ltd.★ Maruzen Kansai Butsuryu Co., Ltd.★ Showa Distribution K.K★ Showa Alumi Service Co., Ltd.★ SAS Logistics Co.,Ltd.★ Maruzen Keiyo Butsuryu Co., Ltd.★ Smile Line Distribution Co.,Ltd.★ Bushu Distribution Co.,Ltd.★ Maruzen Koun Co.,Ltd.★ Kokusai Bulk Terminal Co., Ltd.★ Maruzen Shoji Co., Ltd.

Marusho Automobile Industry Co., Ltd.Kashima Tank Terminal Co., Ltd.

★ Maruzen Ryutsu Service Co., Ltd.Maruzen Co-op Co., Ltd.Maruso Unyu Co., Ltd.Maruzen Kawasaki Unyu Co., Ltd.

★ Maruzen Kyushu Unyu Co., Ltd. Maruzen Kita-Kanto Ryutsu Co., Ltd.Maruzen Chiba Ryutsu Co., Ltd.

★ Maruzen Ibaraki Ryutsu Co., Ltd.★ Maruzen Kansai Ryutsu Co., Ltd.★ Maruzen Chubu Ryutsu Co., Ltd.★ Maruzen Transpack Co., Ltd.

★ Maruzen of America, Inc.Maruzen Showa (Hong Kong) Ltd.Maruzen Showa (Taiwan) Co.,Ltd.Maruzen Showa Singapore Pte Ltd.Maruzen Showa Logistics Co.,Ltd.

United Thai Logistics Co.,Ltd.United Thai Warehouse Co.,Ltd.Unithai Logistics(Vietnam) CorpXuzhoh Maruzen Sinotrans Co., Ltd.

● Tokyo Marine Branch3-30-1 Kaigan, Minato-Ku, Tokyo 108-0022Phone:(03)5443-6777 Fax:(03)5443-6839● Kawasaki Branch 2-2-20 Sakuramoto, Kawasaki-Ku,Kawasaki 210-0833Phone:(044)277-0200 Fax:(044)288-4708● Kashima Branch 2774-23 Sunayama,Kamisu-si,Ibaraki .314-0255Phone:(0479)40-1111 Fax:(0479)40-1110● Chubu Branch 3-16-4 Meieki, Nakamura-Ku, Nagoya 450-0002 TAIYOUSEIMEIMEIEKI BLDG.,6FPhone:(052)581-1501 Fax:(052)581-1505

● Kansai Branch 9-13 Nozaki-Cho, Kita-Ku, Osaka 530-0055 UMEDA OUGIMACHIDORI BLDG.,4FPhone:(06)6361-5331 Fax:(06)6361-5337

● Export Processing Center1-3 Sachiura, Kanazawa-Ku, Yokohama 236-0003Phone:(045)774-0022 Fax:(045)774-0026

● Harbor Transport Dept.6 Daikoku-Futo, Tsurumi-Ku, Yokohama 230-0054Phone:(045)505-3300 Fax:(045)505-3320

● Plant Engineering Division12-2 Minato-Cho, Kawasaki-Ku, Kawasaki 210-0807Phone:(044)244-5371 Fax:(044)244-7399

● Narita Distribution Center2313-4 Iwayama Shibayama-Machi Sanbu-Gun,Chiba 289-1608Phone:(0479)70-8580 Fax:(0479)77-3721

● Kanto Branch 1-39-14 shinkoyasu kanagwa-ku yokohama 221-8530Phone:(045)434-3555 Fax:(045)434-3553

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