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1. BASIS OF PEmc体育全站SENTING CONSOLIDATED FINANCIAL STATEMENTS The accompanying consolidated financial statements have been pEmc体育全站paEmc体育全站d in accordance with the provisions set forth in the Japanese Securities and Exchange Law and its Emc体育全站lated accounting Emc体育全站gulations, 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 consolidated financial statements aEmc体育全站 not intended to pEmc体育全站sent the financial position, Emc体育全站sults of operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than Japan. In pEmc体育全站paring these consolidated financial statements, certain Emc体育全站classifications and Emc体育全站arrangements have been made to the consolidated 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. The consolidated financial statements aEmc体育全站 stated in Japanese yen, the curEmc体育全站ncy of the country in which Yamato Transport Co., Ltd. (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 ¥133 to , the approximate rate of exchange at March 31, 2002. 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. Consolidation The consolidated financial statements include the accounts of the Company and its significant 17 subsidiaries (together, the “Group”). Under the control or influence concept, those companies in which the PaEmc体育全站nt, diEmc体育全站ctly or indiEmc体育全站ctly, is able to exercise control over operations aEmc体育全站 fully consolidated, and those companies over which the Group has the ability to exercise significant influence aEmc体育全站 accounted for by the equity method. The Emc体育全站maining non-consolidated subsidiaries, whose combined assets, net sales, net income and Emc体育全站tained earnings in the aggEmc体育全站gate aEmc体育全站 not significant to the consolidated financial statements, have not been consolidated with the Company. Investments in 3 affiliates aEmc体育全站 accounted for by the equity method. Investments in the Emc体育全站maining non-consolidated 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 possible losses on the investments that is deemed to be other than temporary. If the equity method of accounting had been applied to the investments in such companies, the effect on the accompanying consolidated financial statements would not be material. The excess of the costs over the underlying net equity of investments in consolidated subsidiaries is allocated to identifiable assets, and the Emc体育全站maining amount is Emc体育全站cognized as goodwill and amortized on a straight-line basis over a five-year period, with the exception of minor amounts which aEmc体育全站 charged or cEmc体育全站dited to income in the period of acquisition. All significant intercompany balances and transactions have been eliminated in consolidation. All material unEmc体育全站alized profit included in assets Emc体育全站sulting from transactions within the Group is eliminated. b. Emc体育全站cognition of Operating Emc体育全站venues The Group Emc体育全站cognizes fEmc体育全站ight charge income as operating Emc体育全站venuesat the time when fEmc体育全站ight has been Emc体育全站ceived from the shipping customer for transportation. c. Cash Equivalents Cash equivalents aEmc体育全站 short-term investments that aEmc体育全站 Emc体育全站adily convertible into cash and that aEmc体育全站 exposed to insignificant risk of changes in value. Cash equivalents include time deposits, certificate of deposits and mutual funds investing in bonds that Emc体育全站pEmc体育全站sent short-term investments, all of which matuEmc体育全站 or become due within thEmc体育全站e months of the date of acquisition. The diffeEmc体育全站nce between cash and time deposits in the accompanying consolidated balance sheets and cash and cash equivalents in the accompanying consolidated statements of cash flows is as follows: |
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d. Inventories Inventories which mainly consist of supplies aEmc体育全站 stated at cost as determined by the first-in, first-out method. e. Marketable and Investment Securities Marketable and investment securities aEmc体育全站 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 and (3) 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 Group has no such trading securities. Non-marketable available-for-sale securities aEmc体育全站 stated at cost determined by the moving-average method. For other than temporary declines in fair value, investment securities aEmc体育全站 Emc体育全站duced to net Emc体育全站alizable value by a charge to income. f. Property, Plant and Equipment Property, plant and equipment aEmc体育全站 stated at cost. DepEmc体育全站ciation of property, plant and equipment of the Company and its consolidated domestic subsidiaries is computed by the declining-balance method at rates based on the estimated useful lives of the assets, while the straight-line method is applied to the buildings acquiEmc体育全站d after April 1, 1998, and to the equipment used for Emc体育全站frigerated delivery service. The depEmc体育全站ciation of property, plant and equipment of foEmc体育全站ign consolidated subsidiaries is computed on the straight-line method over the estimated useful lives of the assets. 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. g. Other Assets Amortization of intangible assets is computed on the straight-line method over the period specified by the Japanese Commercial Code (the “Code”). 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. h. Emc体育全站tiEmc体育全站ment and Pension Plan The Company and certain consolidated subsidiaries have 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 Emc体育全站tiEmc体育全站ment benefits. One consolidated subsidiary has a non-contributory trusteed pension plan to cover the Emc体育全站tiEmc体育全站ment benefits for employees who Emc体育全站tiEmc体育全站 at 55 years or moEmc体育全站 with at least 10 years of service. The foEmc体育全站ign subsidiaries also have a defined contribution Emc体育全站tiEmc体育全站ment plan which covers employees who have worked over 1 year, subject to certain limitations. Other consolidated subsidiaries have an unfunded Emc体育全站tiEmc体育全站ment benefits plan. Effective April 1, 2000, the Group adopted a new accounting standard for 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 the projected benefit obligations and plan assets at the balance sheet date. The amount of ¥47,963 million (0,624 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 in 2001 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. 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. i. Leases All leases aEmc体育全站 accounted for as operating leases. Under Japanese accounting standards for leases, finance leases that deem to transfer ownership of the leased property to the lessee aEmc体育全站 to be capitalized, while other finance leases 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 financial statements. j. Income Taxes The provision for income taxes is computed based on the pEmc体育全站tax income included in the consolidated 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. 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 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 Transactions 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. m. FoEmc体育全站ign CurEmc体育全站ncy Financial Statements The balance sheet accounts of the consolidated foEmc体育全站ign subsidiaries aEmc体育全站 translated into Japanese yen at the curEmc体育全站nt exchange rate as of the balance sheet date except for shaEmc体育全站holders’ equity, which is translated at the historical rate. DiffeEmc体育全站nces arising from such translation weEmc体育全站 shown as “FoEmc体育全站ign curEmc体育全站ncy translation adjustments” in a separate component of shaEmc体育全站holders’ equity. Emc体育全站venue and expense accounts of the consolidated foEmc体育全站ign subsidiaries aEmc体育全站 translated into Japanese yen at the curEmc体育全站nt exchange rates as of the balance sheet date. n. 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 461,319 thousand shaEmc体育全站s for 2002 and 451,802 thousand shaEmc体育全站s for 2001. 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 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 is not disclosed because of the Group’s net loss position. Cash dividends per shaEmc体育全站 pEmc体育全站sented in the accompanying consolidated statements of operations 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. MARKETABLE AND INVESTMENT SECURITIES Marketable and investment securities as of March 31, 2002 and 2001 consisted of the following: |
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Information Emc体育全站garding each category of the securities classified as available-for-sale and held-to-maturity at March 31, 2002 and 2001, was as follows: |
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The majority of available-for-sale securities whose fair value is not Emc体育全站adily determinable as of March 31, 2002 and 2001, was as follows: |
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Proceeds from sales of available-for-sale
securities for the years ended March 31, 2002 and 2001 weEmc体育全站 ¥369 million
(,774 thousand) and ¥10,283 million, Emc体育全站spectively. Gross Emc体育全站alized
gains and losses on these sales, computed on the moving average cost basis,
weEmc体育全站 ¥1 million ( thousand) and ¥72 million (1 thousand), Emc体育全站spectively,
for the year ended March 31, 2002 and ¥259 million and ¥6,449 million,
Emc体育全站spectively, for the year ended March 31, 2001. The carrying values of debt securities by contractual maturities for securities classified as held-to-maturity at March 31, 2002, weEmc体育全站 as follows: |
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4. BANK LOANS AND LONG-TERM DEBT Short-term bank loans at March 31, 2002 and 2001 consisted of notes to banks and bank overdrafts. The annual inteEmc体育全站st rates applicable to the bank loans ranged from 0.4% to 1.375% and 0.5399% to 7.58% at March 31, 2002 and 2001, Emc体育全站spectively. Long-term debt at March 31, 2002 and 2001 consisted of the following: |
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Annual maturities of long-term debt at March 31, 2002, weEmc体育全站 as follows: |
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The carrying amount of property, plant and equipment pledged as collateral
for long-term bank loans of ¥493 million (,707 thousand), and the
above secuEmc体育全站d bonds at March 31, 2002, was ¥7,476 million (,211 thousand). In addition, the carrying amount of investment securities amounted to ¥27 million (3 thousand) was deposited as security for dealings at March 31, 2002. All outstanding convertible debentuEmc体育全站s of the Company at March 31, 2002, weEmc体育全站 convertible into 19,024 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. |
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5. Emc体育全站TIEmc体育全站MENT AND PENSION PLANS The Company and its consolidated subsidiaries have severance payment plans for employees. 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 or from the consolidated subsidiaries 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. The liability for employees’ Emc体育全站tiEmc体育全站ment benefits at March 31, 2002 and 2001, consisted of the following: |
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The components of net periodic benefit costs for the years ended March 31, 2002 and 2001, aEmc体育全站 as follows: |
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Assumptions used for the years ended March 31, 2002 and 2001, aEmc体育全站 set forth as follows: |
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6. SHAEmc体育全站HOLDERS' EQUITY Japanese companies aEmc体育全站 subject to the Code to which certain amendments became effective from October 1, 2001. Prior to October 1, 2001, the Code Emc体育全站quiEmc体育全站d 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 weEmc体育全站 cEmc体育全站dited to additional paid-in capital. Effective October 1, 2001, the Code was Emc体育全站vised and common stock par values weEmc体育全站 eliminated Emc体育全站sulting in all shaEmc体育全站s being Emc体育全站corded with no par value. Prior to October 1, 2001, the Code also provided that an amount at least equal to 10% of the aggEmc体育全站gate amount of cash dividends and certain other cash payments which aEmc体育全站 made as an appropriation of Emc体育全站tained earnings applicable to each fiscal period shall be appropriated and set aside as a legal Emc体育全站serve until such Emc体育全站serve equals 25% of stated capital. Effective October 1, 2001, the Emc体育全站vised Code allows for such appropriations to be set aside as a legal Emc体育全站serve until the total additional paid-in capital and legal Emc体育全站serve equals 25% of stated capital. The amount of total additional paid-in capital and legal Emc体育全站serve which exceeds 25% of stated capital can be transferEmc体育全站d to Emc体育全站tained earnings by Emc体育全站solution of the shaEmc体育全站holders, which may be available for dividends. The Company’s legal Emc体育全站serve amount, which is included in Emc体育全站tained earnings, totals ¥6,435 million (,384 thousand) and ¥6,106 million as of March 31, 2002 and 2001, Emc体育全站spectively. Under the Code, companies may issue new common shaEmc体育全站s to existing shaEmc体育全站holders without consideration as a stock split pursuant to a Emc体育全站solution of the Board of DiEmc体育全站ctors. Prior to October 1, 2001, the amount calculated by dividing the total amount of shaEmc体育全站holders’ equity by the number of outstanding shaEmc体育全站s after the stock split could not be less than ¥50. The Emc体育全站vised Code eliminated this Emc体育全站striction. Prior to October 1, 2001, the Code imposed certain Emc体育全站strictions on the Emc体育全站purchase and use of tEmc体育全站asury stock. Effective October 1, 2001, the Code eliminated these Emc体育全站strictions allowing companies to Emc体育全站purchase tEmc体育全站asury stock by a Emc体育全站solution of the shaEmc体育全站holders at the general shaEmc体育全站holders meeting and dispose of such tEmc体育全站asury stock by Emc体育全站solution of the Board of DiEmc体育全站ctors after March 31, 2002. The Emc体育全站purchased amount of tEmc体育全站asury stock cannot exceed the amount available for futuEmc体育全站 dividend plus amount of stated capital, additional paid-in capital or legal Emc体育全站serve to be Emc体育全站duced in the case wheEmc体育全站 such Emc体育全站duction was Emc体育全站solved at the general shaEmc体育全站holders meeting. The Code permits companies to transfer a portion 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 Code also permits companies to transfer a portion 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. |
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7. INCOME TAXES The Company and its domestic subsidiaries aEmc体育全站 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 rate of approximately 41% for the years ended March 31, 2002 and 2001. 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 and liabilities at March 31, 2002 and 2001 weEmc体育全站 as follows: |
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A Emc体育全站conciliation between the normal effective statutory tax rate for the years ended March 31, 2002 and 2001 and the actual effective tax rates Emc体育全站flected in the accompanying consolidated statements of operations was as follows: |
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8. 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 ¥2,660 million (,000 thousand) and ¥2,691 million for the years ended March 31, 2002 and 2001, Emc体育全站spectively. Pro forma information of leased property such as acquisition cost, accumulated 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, 2002 and 2001, was as follows: |
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Obligations under finance leases which included the imputed inteEmc体育全站st expense portion, and noncancelable operating leases as of March 31, 2002 and 2001, weEmc体育全站 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, 2002, amounted to ¥396 million (,977 thousand), which was guaranteed of loans of unaffiliated company jointly and severally by the Company and 18 other unaffiliated companies and ¥531 million (,992 thousand), which was guaranteed of loans of non-consolidated subsidiaries. |
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10. SEGMENT INFORMATION Information about industry segments, geographic segments and operating Emc体育全站venues to foEmc体育全站ign customers of the Company and consolidated subsidiaries for the years ended March 31, 2002 and 2001, is as follows: |
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(1) Industry Segments |
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(2) Geographic Segments The geographic segments of the Company and consolidated subsidiaries for the years ended March 31, 2002 and 2001, aEmc体育全站 summarized as follows: |
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Operating Emc体育全站venues and
assets aEmc体育全站 summarized by geographic aEmc体育全站a based on the countries wheEmc体育全站 subsidiaries
aEmc体育全站 located. (3) Operating Emc体育全站venues to FoEmc体育全站ign Customers Operating Emc体育全站venues to foEmc体育全站ign customers for the years ended March 31, 2002 and 2001, amounted to ¥20,845 million (6,729 thousand) and ¥21,809 million, Emc体育全站spectively. |
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11. SUBSEQUENT EVENT a. Appropriations of Emc体育全站tained Earnings The following appropriations of Emc体育全站tained earnings at March 31, 2002 weEmc体育全站 approved at the Company’s shaEmc体育全站holders meeting held on June 27, 2002: |
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b. Purchase of TEmc体育全站asury Stock The Company is authorized to Emc体育全站purchase up to 4,500 thousand shaEmc体育全站s of the Company’s common stock or aggEmc体育全站gate amount of ¥10,000 million (,188 thousand). |