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1. BASIS OF PEmc体育全站SENTING NON-CONSOLIDATED FINANCIAL
STATEMENTS The accompanying nonconsolidated financial statements have been pEmc体育全站paEmc体育全站d from the accounts maintained by Yamato Transport Co., Ltd. (the “Company”) 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 aEmc体育全站 diffeEmc体育全站nt in certain Emc体育全站spects as to application and disclosuEmc体育全站 Emc体育全站quiEmc体育全站ments of International Accounting Standards. The nonconsolidated financial statements aEmc体育全站 not intended to pEmc体育全站sent the financial position and Emc体育全站sults of operations in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Japan. As consolidated statements of cash flows and certain disclosuEmc体育全站s aEmc体育全站 pEmc体育全站sented in the consolidated financial statements of the Company, nonconsolidated statements of cash flows and certain disclosuEmc体育全站s aEmc体育全站 not pEmc体育全站sented heEmc体育全站in in accordance with accounting proceduEmc体育全站s generally accepted in Japan. In pEmc体育全站paring these non-consolidated financial statements, certain Emc体育全站classifications and Emc体育全站arrangements have been made to the Company’s financial statements issued domestically in order to pEmc体育全站sent them in a form which is moEmc体育全站 familiar to Emc体育全站aders outside Japan. In accordance with accounting proceduEmc体育全站s generally accepted in Japan, certain comparative disclosuEmc体育全站s aEmc体育全站 not Emc体育全站quiEmc体育全站d to be and have not been pEmc体育全站sented heEmc体育全站in. The non-consolidated financial statements aEmc体育全站 stated in Japanese yen, the curEmc体育全站ncy of the country in which the Company is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts aEmc体育全站 included solely for the convenience of Emc体育全站aders outside Japan and have been made at the rate of ¥124 to , the approximate rate of exchange at March 31, 2001. Such translations should not be construed as Emc体育全站pEmc体育全站sentations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate. |
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Emc体育全站cognition of Operating Emc体育全站venues The Company Emc体育全站cognizes fEmc体育全站ight charge income as operating Emc体育全站venues at the time when fEmc体育全站ight has been Emc体育全站ceived from the shipping customer for transportation. b. Inventories Inventories aEmc体育全站 stated at cost determined by the first-in, first-out method. |
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c. Marketable and Investment Securities Prior to April 1, 2000, marketable and investment securities weEmc体育全站 stated at cost determined by the moving-average method. Effective April 1, 2000, the Company adopted a new accounting standard for financial instruments, including marketable and investment securities. The standard Emc体育全站quiEmc体育全站s all applicable securities to be classified and accounted for, depending on management’s intent, as follows: (1) trading securities, which aEmc体育全站 held for the purpose of earning capital gains in near term, aEmc体育全站 Emc体育全站ported at fair value, and the Emc体育全站lated unEmc体育全站alized gains and losses aEmc体育全站 included in the earnings, (2) held-to-maturity debt securities, which aEmc体育全站 expected to be held to maturity with the positive intent and ability to hold to maturity aEmc体育全站 Emc体育全站ported at amortized cost, (3) investment securities in subsidiaries and affiliates, aEmc体育全站 Emc体育全站ported at cost, and (4) available-for-sale securities, which aEmc体育全站 not classified as either of the afoEmc体育全站mentioned securities, aEmc体育全站 Emc体育全站ported at fair value, with unEmc体育全站alized gains and losses, net of applicable taxes, Emc体育全站ported in a separate component of shaEmc体育全站holders’ equity. The company has no such trading securities as of March 31,2001. Due to the adoption of the new standard, marketable securities classified as curEmc体育全站nt assets decEmc体育全站ased by ¥7,529 million (,718 thousand) and the investment securities incEmc体育全站ased by the same amount as of April 1, 2000. d. Investments in Subsidiaries and Affiliates Investments in subsidiaries and affiliates aEmc体育全站 stated at cost less a valuation allowance Emc体育全站pEmc体育全站senting impairment of the investments that is deemed to be other than temporary. e. Property, Plant and Equipment DepEmc体育全站ciation of property, plant and equipment is computed by the decliningbalance method while the straight-line method is applied to buildings acquiEmc体育全站d after April 1, 1998. DepEmc体育全站ciation of the equipment used for Emc体育全站frigerated delivery service is computed by the straight-line method. The range of useful lives is principally as follows:
Maintenance and Emc体育全站pairs including minor Emc体育全站newals and improvements aEmc体育全站 charged to income as incurEmc体育全站d. f. Other Assets Amortization of intangible assets is computed on the straight-line method over the period specified by the Code or Japanese tax laws. Bond discounts aEmc体育全站 deferEmc体育全站d as other assets and amortized on the straight-line method over the lives of the bonds. Bond issuance costs aEmc体育全站 deferEmc体育全站d as other assets and amortized on the straight-line method over a thEmc体育全站e-year period. g. Emc体育全站tiEmc体育全站ment and Pension Plan The Company has a contributory trusteed pension plan and an unfunded Emc体育全站tiEmc体育全站ment benefits plan which cover 35% and 65%, Emc体育全站spectively, of employee Emc体育全站tiEmc体育全站ment benefits. Prior to April 1, 2000, the annual provision for employees’ Emc体育全站tiEmc体育全站ment benefits for the unfunded Emc体育全站tiEmc体育全站ment benefits plan was provided to state the liability at 40% of the amount that would be Emc体育全站quiEmc体育全站d if all employees voluntarily terminated their employment at each balance sheet date. Normal costs of the pension plan weEmc体育全站 curEmc体育全站ntly funded and charged to income. Effective April 1, 2000, the Company adopted a new accounting standard for the employees’ Emc体育全站tiEmc体育全站ment benefits and accounted for the liability for Emc体育全站tiEmc体育全站ment benefits based on projected benefit obligations and plan assets at the balance sheet date. The amount of ¥44,426 million (8,274 thousand), which is the net amount of the transitional obligation determined as of the beginning of year and the full amount of prior service cost (cEmc体育全站dit), is charged to income and pEmc体育全站sented as “Provision for Emc体育全站tiEmc体育全站ment benefits” in other expenses. As a Emc体育全站sult, net periodic benefit costs as compaEmc体育全站d with the prior method, incEmc体育全站ased by ¥7,467 million (,218 thousand) and loss befoEmc体育全站 income taxes incEmc体育全站ased by ¥51,893 million (8,492 thousand). DiEmc体育全站ctors and corporate auditors aEmc体育全站 not coveEmc体育全站d by the Emc体育全站tiEmc体育全站ment and pension plans described above. Benefits paid to such persons aEmc体育全站 charged to income as paid. Any amounts payable to diEmc体育全站ctors and corporate auditors upon Emc体育全站tiEmc体育全站ment aEmc体育全站 subject to approval of the shaEmc体育全站holders. h. Leases All leases aEmc体育全站 accounted for as operating leases. Under Japanese accounting standards for leases, finance leases that do not transfer ownership of the leased property to the lessee aEmc体育全站 permitted to be accounted for as operating lease transactions if certain “as if capitalized” information is disclosed in the notes to the lessee’s non-consolidated financial statements. i. Income Taxes The provision for income taxes is computed based on the pEmc体育全站tax income included in the statements of operations. The asset and liability approach is used to Emc体育全站cognize deferEmc体育全站d tax assets and liabilities for the expected futuEmc体育全站 tax consequences of temporary diffeEmc体育全站nces between the carrying amounts and the tax bases of assets and liabilities. DeferEmc体育全站d taxes aEmc体育全站 measuEmc体育全站d by applying curEmc体育全站ntly enacted tax laws to the temporary diffeEmc体育全站nces. j. Consumption Tax Consumption tax is levied in Japan on domestic sales of goods and services. Consumption tax is excluded from the amounts of Emc体育全站venues, costs and expenses. k. Appropriations of Emc体育全站tained Earnings Appropriations of Emc体育全站tained earnings at each year end aEmc体育全站 Emc体育全站flected in the non-consolidated financial statements for the following year upon shaEmc体育全站holders’ approval. l. FoEmc体育全站ign CurEmc体育全站ncy Translations Prior to April 1, 2000, short-term Emc体育全站ceivables and payables denominated in foEmc体育全站ign curEmc体育全站ncies weEmc体育全站 translated into Japanese yen at the curEmc体育全站nt exchange rates at each balance sheet date, while long-term Emc体育全站ceivables and payables denominated in foEmc体育全站ign curEmc体育全站ncies weEmc体育全站 translated at historical rates. Effective April 1, 2000, the Company adopted a Emc体育全站vised accounting standard for foEmc体育全站ign curEmc体育全站ncy transactions. In accordance with the Emc体育全站vised standard, all short-term and long-term monetary Emc体育全站ceivables and payables denominated in foEmc体育全站ign curEmc体育全站ncies aEmc体育全站 translated into Japanese yen at the exchange rates at the balance sheet date. Transactions in foEmc体育全站ign curEmc体育全站ncies aEmc体育全站 translated into Japanese yen at the curEmc体育全站nt exchange rate. m. Per ShaEmc体育全站 Information The computation of net income per shaEmc体育全站 is based on the weighted average number of shaEmc体育全站s of common stock outstanding during each year. The average number of common shaEmc体育全站s used in the computation was 451,803 thousand, 442,839 thousand and 419,996 thousand for the years ended March 31, 2001, 2000 and 1999, Emc体育全站spectively. Diluted net income per shaEmc体育全站 of common stock assumes full conversion of the outstanding convertible debentuEmc体育全站s and bonds at the beginning of the year with an applicable adjustment for Emc体育全站lated inteEmc体育全站st expense (net of tax). For the year ended March 31, 2001, diluted net income per shaEmc体育全站 of common stock is not disclosed because of the Company’s net loss position. Cash dividends per shaEmc体育全站 aEmc体育全站 dividends applicable to the Emc体育全站spective years including dividends to be paid after the end of the year. |
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3. BANK LOANS AND LONG-TERM DEBT Short-term bank loans at March 31, 2001 and 2000, weEmc体育全站 Emc体育全站pEmc体育全站sented principally by 365day notes issued by the Company to banks. The annual inteEmc体育全站st rates applic-able to the bank loans ranged from 0.5399% to 0.9391% and from 0.5% to 0.66% at March 31, 2001 and 2000, Emc体育全站spectively. Long-term debt at March 31, 2001 and 2000, consisted of the following: |
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Annual maturities of long-term debt at March 31, 2001, weEmc体育全站 as follows: |
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At March 31, 2001, the carrying amounts of assets pledged as collateral for other liabilities weEmc体育全站 as follows: |
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All outstanding convertible debentuEmc体育全站s and bonds of the Company at March
31, 2001, weEmc体育全站 convertible into 19,295 thousand shaEmc体育全站s of common stock of
the Company. The conversion prices aEmc体育全站 subject to adjustments to Emc体育全站flect
stock splits and certain other events. As is customary in Japan, the Company maintains deposit balances with banks with which it has borrowings. Such deposit balances aEmc体育全站 not legally or contractually Emc体育全站stricted as to withdrawal. |
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4. Emc体育全站TIEmc体育全站MENT AND PENSION PLAN4 Under most circumstances, employees terminating their employment aEmc体育全站 entitled to Emc体育全站tiEmc体育全站ment benefits determined based on the rate of pay at the time of termination, years of service and certain other factors. Such Emc体育全站tiEmc体育全站ment benefits aEmc体育全站 made in the form of a lump-sum severance payment from the Company and annuity payments from a trustee. Employees aEmc体育全站 entitled to larger payments if the termination is involuntary, by Emc体育全站tiEmc体育全站ment at the mandatory Emc体育全站tiEmc体育全站ment age, by death, or by voluntary Emc体育全站tiEmc体育全站ment at certain specific ages prior to the mandatory Emc体育全站tiEmc体育全站ment age. The Emc体育全站tiEmc体育全站ment benefits for diEmc体育全站ctors and corporate auditors aEmc体育全站 paid subject to the approval of the shaEmc体育全站holders. |
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5. SHAEmc体育全站HOLDERS' EQUITY The Code Emc体育全站quiEmc体育全站s at least 50% of the issue price of new shaEmc体育全站s, with a minimum of the par value theEmc体育全站of, to be designated as stated capital as determined by Emc体育全站solution of the Board of DiEmc体育全站ctors. Proceeds in excess of amounts designated as stated capital aEmc体育全站 cEmc体育全站dited to additional paid-in capital. The Code also Emc体育全站quiEmc体育全站s companies, to appropriate from Emc体育全站tained earnings to a legal Emc体育全站serve an amount equal to at least 10% of cash payments, which aEmc体育全站 made as an appropriation of Emc体育全站tained earnings until such Emc体育全站serve equals 25% of stated capital. This Emc体育全站serve is not available for cash dividends but may be used to Emc体育全站duce a deficit by Emc体育全站solution of the shaEmc体育全站holders. The Company may transfer portions of additional paid-in capital and legal Emc体育全站serve to stated capital by Emc体育全站solution of the Board of DiEmc体育全站ctors. The Company may also transfer portions of unappropriated Emc体育全站tained earnings, available for dividends, to stated capital by Emc体育全站solution of the shaEmc体育全站holders. Dividends aEmc体育全站 approved by the shaEmc体育全站holders at a meeting held subsequent to the fiscal year to which the dividends aEmc体育全站 applicable. Semiannual interim dividends may also be paid upon Emc体育全站solution of the Board of DiEmc体育全站ctors, subject to certain limitations imposed by the Code. The Company is authorized to Emc体育全站purchase, at management’s discEmc体育全站tion, up to 12 million shaEmc体育全站s of the Company’s stock for the purpose of canceling the shaEmc体育全站s by cEmc体育全站diting such amounts against Emc体育全站tained earnings. |
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6. INCOME TAXES The Company is subject to Japanese national and local income taxes which, in the aggEmc体育全站gate, Emc体育全站sulted in a normal effective statutory tax rates of approximately 41% in 2001 and 2000, and 47% in 1999. The tax effects of significant temporary diffeEmc体育全站nces which Emc体育全站sulted in deferEmc体育全站d tax assets at March 31, 2001 and 2000, aEmc体育全站 as follows: |
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A Emc体育全站conciliation between the normal effective statutory tax rates for the years ended March 31, 2001 and 2000, and the actual effective tax rates Emc体育全站flected in the accompanying non-consolidated statements of operations is as follows: |
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The normal effective tax rate Emc体育全站flected in the accompanying non-consolidated statements of operations for the year ended March 31, 1999, differs from the actual effective tax rate, primarily due to the effect of permanently non-deductible expenses and temporary diffeEmc体育全站nces in the Emc体育全站cognition of asset and liability items for tax and financial Emc体育全站porting purposes. |
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7. LEASES Total lease payments under finance lease arrangements that do not transfer ownership of the leased property to the lessee weEmc体育全站 ¥6,182 million (,855 thousand), ¥5,152 million and ¥5,815 million for the years ended March 31, 2001, 2000 and 1999, Emc体育全站spectively. Pro forma information of leased property such as acquisition cost, accu-mulated depEmc体育全站ciation and obligations under finance leases that do not transfer ownership of the leased property to the lessee on an “as if capitalized” basis for the years ended March 31, 2001 and 2000, was as follows: |
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Obligations under finance leases which included the imputed inteEmc体育全站st expense portion weEmc体育全站 as follows: |
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8. TRANSACTIONS WITH SUBSIDIARIES AND AFFILIATES Transactions with subsidiaries and affiliates weEmc体育全站 summarized as follows: |
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9. CONTINGENT LIABILITIES Contingent liabilities for guarantees and items of a similar natuEmc体育全站 at March 31, 2001, amounted to ¥457 million (,685 thousand), which was guaranteed of loans of unaffiliated company jointly and severally by the Company and 18 other unaffiliated companies and ¥1,149 million (,266 thousand), which was guaranteed of loans of subsidiaries. |
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10. SUBSEQUENT EVENT The following appropriations of Emc体育全站tained earnings at March 31, 2001, weEmc体育全站 approved at the shaEmc体育全站holders meeting held on June 28, 2001: |
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