INFORMATION The document following this cover sheet exists solely to provide...

Transcription

INFORMATION
The document following this cover sheet exists solely to provide English translations of selected
information in the original Japanese text and the documents attached to the Notice of Ordinary General
Meeting of Shareholders for reference only.
The original Japanese text of the Notice of Ordinary General Meeting of Shareholders should be
available to foreign shareholders at their respective sub-custodians in Japan. Please contact your
custodian with your voting instructions as soon as possible.
Shareholders who hold one thousand or more shares of record on the original register of shareholder
as of March 31, 2011 will be invited to attend the meeting.
Notice of the 124th Ordinary General Meeting of Shareholders
The 124th Fiscal Year
Report
From April 1, 2010,
to March 31, 2011
Nippon Yusen Kabushiki Kaisha
Notes: 1. The forecast incorporates certain assumptions the Company regarded as rational
expectations at the time this report was announced. Actual results could differ materially
from those projected figures.
2. Fractions of amounts and the numbers of shares in this report are rounded down.
3. ( ) indicates minus.
4. Amendments to the description in this report are shown on the “IR Event”, “General
Shareholders Meeting” page in the “Investor Relations” tab of our website.
1
To Our Shareholders
June 1, 2011
Notice of the 124th Ordinary General Meeting of Shareholders
We would like to offer our heartfelt condolences to all those affected by the Great East Japan Earthquake
and sincerely hope for a swift recovery.
You are cordially invited to attend the 124th Ordinary General Meeting of Shareholders of Nippon Yusen
Kabushiki Kaisha to be held as follows.
When attending the meeting, please submit the enclosed Voting Form (grass green colored) at the
reception desk on arrival at the meeting.
If you are unable to attend the meeting, you may exercise your voting rights by either of the methods
described below. Please review the Reference Documents for the General Meeting of Shareholders
shown in the following pages (pp. 4 through 27) and exercise your votes.
Voting by Mail
Please indicate your vote for or against each of the proposals on the enclosed Voting Form, and return the
form by 5:00 p.m. Japan Time, Wednesday, June 22, 2011.
Voting via an electromagnetic method (such as the Internet, etc.)
If you exercise votes via the Internet, please review the "Guidance on the Exercise of Votes via
electromagnetic method (such as the Internet, etc.)" as described in pages 79 and 80 and exercise your
vote by 5:00 p.m. Japan Time, Wednesday, June 22, 2011.
Yours faithfully
Nippon Yusen Kabushiki Kaisha
ISIN
SEDOL
TSE
JP3753000003
6643960
9101
Yasumi Kudo
President
2
1. Date:
10:00 a.m., Thursday, June 23, 2011
2. Place:
The Prince Park Tower Tokyo, second basement level Ballroom
4-8-1 Shiba Koen, Minato-ku, Tokyo
3. Agenda of the Meeting:
Matters to be reported:
1) The Business Report for the 124th Fiscal Year (from April 1, 2010 to
March 31, 2011), the Consolidated Financial Statements and the results
of audits of the Consolidated Financial Statements by the Independent
Auditor and the Board of Corporate Auditors
2) Unconsolidated Financial Statements for the 124th Fiscal Year (from
April 1, 2010 to March 31, 2011)
Proposals to be resolved:
Proposal No.1:
Proposal No.2:
Proposal No.3:
Proposal No.4:
Proposal No.5:
Notes:
Appropriation of surplus
Election of thirteen Directors
Election of two Corporate Auditors
Payment of Directors’ bonuses
Renewal of measures for large-scale purchases of NYK share
certificates (takeover defense measures) for the purpose of securing
and enhancing corporate value and the common interests of
shareholders
The Reference Documents for the General Meeting of Shareholders, and the Business Report,
the Consolidated Financial Statements, the Unconsolidated Financial Statements that should
be attached to the Notice of Convocation are as described from page 4 to page 27 and page
32 to page 78.
4. Items relating to the exercise of votes:
(1) If you make no selection as to approval/disapproval for the respective proposals, you shall be
deemed to have expressed intent to give approval as to the proposals.
(2) In the event that the exercise of votes is duplicated by both the method of mailing the Voting
Form and via the Internet, the exercise of votes via the Internet shall be deemed valid. In
addition, in the event that votes are exercised via the Internet two or more times, the most recent
exercise of votes shall be deemed valid.
(3) If you are unable to attend the Ordinary General Meeting of Shareholders, you may exercise
your votes by appointing one proxy who shall be a shareholder with votes present at the
meeting; provided that, the shareholder or his/her proxy shall submit to the Company a
document evidencing his/her power of representation.
5. Method to announce the revision of the content:
If the need arises to revise the content of the Reference Documents for the General Meeting of
Shareholders, Business Report, Unconsolidated Financial Statements and/or Consolidated Financial
Statements, the revised items will be announced on our website
(http://www.nyk.com/english/release/IR_meeting.html)
.
3
Reference Documents for the General Meeting of Shareholders
Proposals and references
Proposal No.1:
Appropriation of surplus
The Company regards a continuous and stable return of profits to shareholders as one of the most
important management issues.
The Company proposes to distribute a year-end dividend of ¥5.00 per share as indicated below,
taking comprehensive consideration for the dividend payout ratio and the Company's business
outlook, while retaining an appropriate level of internal reserves for future business development of
not only shipping business but also other businesses and to address the changing market conditions.
Accordingly, the total dividend for the fiscal year including the interim dividend of ¥6.00 per share
amounts to ¥11.00 per share, an increase of ¥7.00 per share from the previous fiscal year.
1.
Items relating to year-end dividends
(1) Type of dividend property
Cash
(2) Items relating to the appropriation of dividend property to shareholders and total amount
¥5.00 per share of Company common stock, total amount ¥8,484,611,370
(3) Date of validity of dividends of surplus
June 24, 2011
4
Proposal No.2:
Election of thirteen Directors
The term of office of all incumbent Directors (thirteen (13) Directors) will expire upon conclusion of
this meeting.
The Company therefore recommends and proposes the following thirteen (13) candidates for
election as Directors.
No.
1
Career summary, responsibilities and
significant concurrent positions
Name
(Date of birth)
Koji Miyahara
(December 3,
1945)
April 1970
April 1996
June 2000
April 2002
June 2002
June 2003
April 2004
April 2006
April 2009
2
Yasumi Kudo
(November 14,
1952)
April 1975
June 1998
April 2002
June 2004
April 2006
April 2008
April 2009
3
Masahiro Kato
(May 29, 1952)
April 1977
April 2002
April 2004
April 2006
June 2007
April 2009
Joined the Company
General Manager of Management
Coordination Group
Director
Director and Corporate Officer
Managing Director and Corporate Officer
Senior Managing Director and Corporate
Officer (Representative Director
thereafter)
President and Corporate Officer
President, President Corporate Officer
Chairman, Chairman Corporate Officer
(to the present)
Significant concurrent positions
Vice-Chairman of Nippon Keidanren
(scheduled)
President of The Japanese Shipowners'
Association
Chairman of Japan Federation of Freight
Industries
Number of the
Company’s
shares held
90,192 shares
Joined the Company
55,039 shares
General Manager, Semi-Liner Group
Corporate Officer
Representative Director, Senior Managing
Corporate Officer
Representative Director, Executive
Vice-President Corporate Officer
President, President Corporate Officer
(to the present)
Joined the Company
40,846 shares
General Manager of Car Carrier Group
Corporate Officer
Managing Corporate Officer
Director, Managing Corporate Officer
Corporate Officer (to the present)
Responsibilities
Chief Executive of Automotive
Transportation Headquarters, Chief
Executive of Energy Division, Chief
Executive of Cruise Headquarters,
Chairman of Tramp Shipping Strategy
Committee
5
No.
Name
(Date of birth)
Number of the
Company’s
shares held
4
Hidenori Hono
April 1978
(February 11, 1956) April 2002
April 2004
April 2006
June 2008
April 2009
Joined the Company
47,344 shares
General Manager of Petroleum Group
Corporate Officer
Responsibilities
Chief Executive of Dry Bulk Division
5
Tadaaki Naito
(September 30,
1955)
April 1978
April 2004
April 2005
April 2007
June 2008
April 2009
Joined the Company
34,808 shares
General Manager of Petroleum Group
Corporate Officer
Responsibilities
Chief Executive of Management Planning
Headquarters, Chief Financial Officer
6
Masamichi
Morooka
(September 20,
1952)
April 1975
April 2001
Joined the Company
40,894 shares
President, NYK LINE (NORTH
AMERICA) INC.
Corporate Officer
Director, Senior Managing Corporate
Officer
Responsibilities
Chief Executive of Technical
Headquarters, Chairman of Technical
Strategy Committee, Executive Chief of
Environmental Management
April 2003
June 2005
April 2006
April 2008
April 2010
7
Naoya Tazawa
(October 27, 1955)
April 1978
April 2002
April 2005
April 2007
June 2009
April 2010
Joined the Company
34,454 shares
General Manager of Human Resources
Group
Corporate Officer
Responsibilities
Chief Executive of General Affairs/CSR
Headquarters, Chief Compliance Officer
6
No.
8
9
10
Name
(Date of birth)
Toshinori
Yamashita
(November 29,
1951)
April 1975
April 2000
Hiroshi Hiramatsu
(February 20,
1956)
April 1978
April 2004
Kenji Mizushima
(April 21, 1956)
April 1979
April 2007
April 2005
April 2008
April 2010
June 2010
April 2006
April 2008
June 2009
April 2008
June 2009
11
Yukio Okamoto
(November 23,
1945)
Number of the
Company’s
shares held
Joined the Company
35,752 shares
General Manager of Steaming Coal
Group
Corporate Officer
Senior Managing Corporate Officer
Responsibilities
Chief Executive of Global Logistics
Headquarters, Chairman of IT Strategy
Committee, Chief Information Officer
Joined the Company
General Manager of Corporate Planning
Group
Corporate Officer
(to the present)
Responsibilities
Accounting and Finance Division
31,355 shares
Joined the Company
Corporate Officer, General Manager of
Container Trade Management Group
(to the present)
Responsibilities
Liner Trade Division
19,225 shares
April 1968
January 1991
March 1991
Joined Japan’s Ministry of Foreign Affairs 21,236 shares
Retired from the Ministry
President of OKAMOTO ASSOCIATES,
INC. (current position)
November 1996 Special Advisor to the Prime Minister
March 1998
Retired from the above mentioned
position
September 2001 Special Advisor to the Cabinet Secretariat
April 2003
position
Special Advisor to the Prime Minister
March 2004
position
June 2008
Outside Director (to the present)
President of OKAMOTO ASSOCIATES,
INC.
Outside Director of MITSUBISHI
MATERIAL CORP.
Outside Corporate Auditor of
MITSUBISHI MOTORS CORP.
7
No.
Name
(Date of birth)
April 1984
April 1992
Joined BANK OF JAPAN
Joined THE JAPAN RESEARCH
INSTITUTE, LTD.
April 1994
Chief Researcher of THE JAPAN
RESEARCH INSTITUTE, LTD.
April 2000
Senior Researcher of THE JAPAN
RESEARCH INSTITUTE, LTD.
September 2001 Visiting Professor, Graduate School of
Keio University
June 2006
Counselor of THE JAPAN RESEARCH
INSTITUTE, LTD. (current position)
June 2008
Outside Director (to the present)
Counselor of THE JAPAN RESEARCH
INSTITUTE, LTD.
Outside Director of the Enterprise
Turnaround Initiative Corporation of
Japan (ETIC)
12
Yuri Okina
(March 25, 1960)
13
*Hitoshi Nagasawa April 1980
(January 22, 1958) April 2004
April 2007
April 2009
Joined the Company
General Manager of LNG Group
Corporate Officer
Managing Corporate Officer (to the
present)
Responsibilities
Energy Division
Number of the
Company’s
shares held
17,005 shares
22,810 shares
The asterisk (*) indicates newly nominated candidate for a Director.
Notes: 1. No transactions or special interests exist between the Company and any of the above
candidates for Directors.
2. Mr. Yukio Okamoto and Ms. Yuri Okina are candidates for the Company’s Outside
Directors as stipulated in Article 2, Item 15 of the Corporation Law. In the event that they
are elected as Directors of the Company, they will continuously be reported as the
Independent Directors as required by Tokyo and other Japanese stock exchanges with the
purpose of protecting general shareholders.
3. The Company is proposing the election of Mr. Yukio Okamoto as an Outside Director in
order to reflect his extensive knowledge and insight as an expert of international affairs in
the management of the Company and believes that his knowledge and insight will
contribute to the management of the Company.
4. The Company is proposing the election of Ms. Yuri Okina as an Outside Director in order to
reflect her extensive knowledge and insight as an expert of economic and financial
conditions in the management of the Company and believes that her knowledge and
insight will contribute to the management of the Company.
5. Mr. Yukio Okamoto concurrently serves as an Outside Director of MITSUBISHI
MATERIALS CORP. The company was one of the joint developers of Osaka Amenity Park
Residence Tower, a condominium in Osaka City, and was issued a business suspension
order in June 2006 regarding the sales of the condominium in violation of the Building Lots
and Buildings Transaction Business Law that the company did not notify buyers of the
countermeasure construction for soil contamination at the site before the construction.
In October 2008, MITSUBISHI MATERIALS CORP. received a cease and desist order and
a surcharge payment order from the Japan Fair Trade Commission for violation of the
Antitrust Law regarding the purchase of molten metal, etc. from the local governments
during the period between March 2004 and July 2007.
In April 2010, MITSUBISHI MATERIALS CORP. received an instruction from Mie
prefectural authorities to suspend the use of certain facilities of Yokkaichi Plant, which
8
manufactures polycrystalline silicon, as the company was engaged in producing
high-pressure gas without obtaining the necessary permit under the High Pressure Gas
Safety Act.
In addition, in March 2011, it was found that some of facilities in some factories of
MITSUBISHI MOTORS CORP., for which he has been serving as an Outside Corporate
Auditor, had been used without necessary reporting, etc., under applicable environmental
laws and regulations.
Mr. Okamoto was not involved in the matters subject to these orders. He regularly provides
his opinions in relation to compliance in a timely manner, and after the occurrence of the
case, he has been working on enhancing the Company’s compliance system with various
measures, including reviewing the Company’s initiatives to prevent the recurrence of such
incident.
6. Mr. Yukio Okamoto and Ms. Yuri Okina will have served as Outside Directors of the
Company for three years at the conclusion of this meeting.
7. The Company has established the provisions in the Articles of Incorporation to the effect
that it may enter into a liability limitation agreement with Outside Directors, and has actually
entered into the liability limitation agreement with each of Outside Directors. In the event
that the proposed election of Mr. Yukio Okamoto and Ms. Yuri Okina is approved, the
Company will continue to have the liability limitation agreement with each of them as
stipulated in Article 33 of the existing Articles of Incorporation pursuant to Article 427,
Paragraph 1 of the Corporation Law. The liability limit based on the contract shall be the
liability limit set in advance in the amount of ¥20 million or more or the liability limit
stipulated by law, whichever is greater.
Proposal No.3:
Election of two Corporate Auditors
The term of Corporate Auditors Yukio Ozawa and Hidehiko Haru will expire upon conclusion of this
meeting.
The Company therefore recommends and proposes the following two (2) candidates for election as
Corporate Auditors.
The Board of Corporate Auditors has previously given its approval.
No.
1
Career summary and
Name
(Date of birth)
*Mikitoshi Kai
(July 7, 1951)
April 1976
August 2000
April 2007
March 2011
Joined the Company
General Manager of New Frontier Group
Corporate Officer
Retired as Corporate Officer
9
Number of the
Company’s
shares held
62,432 shares
No.
2
Career summary and
Name
(Date of birth)
*Fumio Kawaguchi
(September 8,
1940)
Notes: 1.
2.
3.
4.
Number of the
Company’s
shares held
Joined Chubu Electric Power Company,
0 shares
Incorporated
June 1997
Director, General Manager of Purchasing
& Contracting Department of Chubu
Electric Power Company, Incorporated
December 1999 Managing Director, General Manager of
Nagoya Regional Office of Chubu Electric
Power Company, Incorporated
June 2001
President & Director of Chubu Electric
Power Company, Incorporated
June 2006
Chairman of the Board of Directors of
Chubu Electric Power Company,
Incorporated
June 2010
Advisor of Chubu Electric Power
Company, Incorporated (to the present)
Chairman of Chubu Economic
Federation,
Chairman of Chubu Industrial and
Regional Advancement Center
The asterisks (*) indicate newly nominated candidates for Corporate Auditors.
No transactions or special interests exist between the Company and any of the above
candidates for Corporate Auditors.
Mr. Fumio Kawaguchi is a candidate for the Company’s Outside Corporate Auditor as
stipulated in Article 2, Item 16 of the Corporation Law. In the event he is elected as
Corporate Auditor of the Company, he will be reported as the Independent Auditor as
required by Tokyo and other Japanese stock exchanges with the purpose of protecting
general shareholders.
The Company is proposing the election of Mr. Fumio Kawaguchi as an Outside Corporate
Auditor in order to reflect his extensive knowledge and insight as an expert of corporate
management in the audit of the Company and believes that his knowledge and insight will
contribute to the audit of the Company.
The Company has established the provisions in the Articles of Incorporation to the effect
that it may enter into a liability limitation agreement with Outside Corporate Auditors, and
has actually entered into the liability limitation agreement with each of Outside Corporate
Auditors. In the event that the proposed election of Mr. Fumio Kawaguchi is approved, the
Company will have the liability limitation agreement with him as stipulated in Article 43 of
the existing Articles of Incorporation pursuant to Article 427, Paragraph 1 of the
Corporation Law. The liability limit based on the contract shall be the liability limit set in
advance in the amount of ¥20 million or more or the liability limit stipulated by law,
whichever is greater.
Proposal No.4:
April 1964
Payment of Directors’ bonuses
The Company proposes to pay bonuses amounting to a total of ¥143,000,000 to the eleven (11)
Directors (excluding two (2) Outside Directors) who are in office as of the end of the fiscal year taking
into account the Company’s achievement in the fiscal year, the amount of bonuses paid to Directors
in past years and other factors.
10
Proposal No.5:
Renewal of measures for large-scale purchases of NYK share certificates
(takeover defense measures) for the purpose of securing and enhancing
corporate value and the common interests of shareholders
The Company introduced the “Measures for Large-scale Purchases of NYK Share Certificates for
the Purpose of Securing and Enhancing Corporate Value and the Common Interests of
Shareholders(Takeover Defense Measures)” (the “Current Plan”) with the approval of its
shareholders at the Company’s 121st Ordinary General Meeting of Shareholders held on June 24,
2008, and the effective period of the Current Plan is until the end of the Company’s 124th Ordinary
General Meeting of Shareholders to be held on June 23, 2011 (the “Ordinary General Meeting of
Shareholders”).
The Board of Directors of the Company (the “Board”) has, even after the introduction of the Current
Plan, continuously reviewed how the Current Plan should be, including whether or not to continue the
Current Plan, from the viewpoint of securing and enhancing corporate value and common interests of
shareholders in light of the changes in social and/or economic conditions, various trends and
progress in various discussions regarding takeover defense measures.
As a result of such review, the Company has determined in its Board’s meeting held on May 13,
2011 that the Company will revise part of the “basic policy regarding the modality of those who control
the Company’s financial and business policy decisions” as defined in Article 118, Item 3 of the
Enforcement Regulations of the Corporation Law (the “Basic Policy”) and that the Company will, on
the condition that they are approved by the shareholders at the Ordinary General Meeting of
Shareholders, renew the “Measures for Large-scale Purchases of NYK Share Certificates for the
Purpose of Securing and Enhancing Corporate Value and the Common Interests of Shareholders”
after partially revising it (the renewed plan after partial revision shall hereinafter be referred to as the
“Plan”).
Accordingly, the Company requests that the Plan be approved by shareholders. The contents of
the Plan are as described in following Chapter 1.
In the event the Plan has been approved, its effective period shall be until the time of the
conclusion of the 127th Ordinary General Meeting of Shareholders to be held in June, 2014.
Following are the major revisions made to the Plan from the Current Plan and all such revisions are
for the purpose of increasing clarity and transparency of application of the Plan.
(1)
Have set a time limit for the provision of supplemental or additional information in case the
Board or the Independent Committee requests the Large-scale Purchasers (as defined below
in Chapter 1, 2. (1)) for such provision.
(2)
Have set a time limit for the provision of information in case the Independent Committee
requests the Board for such provision.
(3)
Have changed the Independent Committee’s review period from business days to calendar
days.
(4)
Have further limited the cases where it should fall under the category of the Abusive Acquirer
(as defined below in Chapter 1, 2. (5)), in which case countermeasures may be implemented.
(5)
With respect to the Large-scale Purchases (as defined below in Chapter 1, 2. (1)) where there
is a risk of damage to corporate value or the common interests of shareholders, have limited
the cases where countermeasures may be implemented to those Large-scale Purchases
where there is a risk of damaging corporate value or the common interests of shareholders
significantly, and have omitted examples to simplify such part of the Plan.
(6)
Have clearly specified that cash shall not be delivered to part of the persons owning the stock
acquisition rights when implementing the countermeasures.
Four Corporate Auditors including two Outside Corporate Auditors have expressed their opinion
that the Plan is reasonable.
The contents of the Basic Policy determined by the Company at the abovementioned Board’s
meeting, the contents of special measures that will help achieve the Basic Policy, purpose of the Plan,
Plan's impact on shareholders and investors, etc., the Board decision regarding the Plan and the
11
reasons therefor, and names and career summaries of candidates for Independent Committee
members (who will be requested to continuously stay as members of the Independent Committee) at
the introduction of the Plan shall be as in Chapter 2 below.
Chapter 1
1.
Contents of the Plan
Outline of the Plan
The Plan is outlined as follows. Large-scale Purchasers (as defined in 2. (1) below) cannot
commence a Large-scale Purchase until: (i) a Large-scale Purchaser has provided necessary
and sufficient information concerning the Large-scale Purchase to the Board and the
Independent Committee (explained in (a) below), (ii) the Board has provided necessary and
sufficient information to the Independent Committee, (iii) the prescribed period for deliberation
and report by the Independent Committee has elapsed, and (iv) the Board or the general meeting
of shareholders makes a resolution concerning whether to implement the countermeasures.
(a)
Establishment of the Independent Committee
The Company shall establish the Independent Committee to deliberate and submit a
recommendation or other report to the Board on whether or not it is appropriate to implement
countermeasures against the Large-scale Purchase upon consultation by the Board, as a
consultative body to secure the corporate value of the Company and its corporate group (“the
NYK Group”) and the common interests of the shareholders. The Independent Committee shall
be composed of at least three members with thorough knowledge of a company’s management,
economics and/or legal issues. The names and career summaries of the current three
Independent Committee members are as in Chapter 2, 6. Of the three members, Mr. Okamoto
and Ms. Okina are both Independent Officers reported to Tokyo and other Japanese stock
exchanges and Mr. Hirayama is an attorney who has no relationships with the Company as a
corporate counsel, and all of these members have no conflict of interests with the shareholders.
As for the current three Independent Committee members, we intend to continue to elect them as
the committee members after the Plan has been approved at the Ordinary General Meeting of
Shareholders.
(b)
Request to Large-scale Purchasers for Large-scale Purchase Information
In the event of a Large-scale Purchase of the NYK Share Certificates, we require that the
Large-scale Purchaser provide information, prior to the Large-scale Purchase, concerning the
purpose and terms, etc. of the Large-scale Purchase with the Explanation of Purchase (as
defined in 2. (2) below). If the Explanation of Purchase is submitted, the Board will send it to the
Independent Committee and will consult on whether or not it is appropriate to implement
countermeasures, etc. In addition, the Independent Committee may also request for further
provision of information to the Large-scale Purchaser if it deems necessary; provided, however,
that a prescribed time limit has been set with respect to the request of further provision of
information after the submission of the Explanation of Purchase.
(c)
Request for provision of information, etc. to the Board
The Independent Committee may also request for provision of any information necessary for
evaluating the Large-scale Purchase to the Board; provided, however, that a prescribed time limit
has also been set for such request.
(d)
Deliberation and report by the Independent Committee
The Independent Committee shall conduct deliberation based on the information, etc. provided
from the Large-scale Purchaser and the Board pursuant to (b) and (c) above and shall prepare
and submit to the Board its report within the prescribed period.
(e)
Resolution by the Board
In the event that the Board determines that a Large-scale Purchaser does not comply with the
procedures provided by the Plan, upon obtaining the Independent Committee’s recommendation
12
in favor of implementing the countermeasures (as defined in 2. (5) below), the Board may adopt a
resolution to implement the countermeasures. If the Independent Committee finds that such
Large-scale Purchaser is an Abusive Acquirer (as defined in 2. (5) below) and recommends
implementing the countermeasures, then the Board may adopt a resolution to implement the
countermeasures, as a general rule, without obtaining a resolution of the general meeting of
shareholders. If the Independent Committee determines that there is a risk that the Large-scale
Purchase will significantly damage the corporate value or the NYK Group’s common interests of
the shareholders and recommends implementing the countermeasures, then the Board may
convene a general meeting of shareholders and, after a resolution to implement the
countermeasures is passed at the general meeting of shareholders, adopt a resolution to
implement the countermeasures.
(f)
Countermeasures
The Board will choose a countermeasure, as against the Large-scale Purchase, which the
Board determines the most appropriate method as of that timing, taking into consideration the
opinion of the Independent Committee, and is necessary and appropriate to secure, soundly
enhance and protect the NYK Group’s corporate value and the common interests of the
shareholders, such as the allotment of stock acquisition rights without consideration (the
“Allotment of Stock Acquisition Rights (Without Consideration)”); provided, however, that, even if
the selected countermeasure is issuance of stock acquisition rights, cash will not be delivered to
part of the owners of the stock acquisition rights.
2.
Procedures from the commencement of a Large-scale Purchase to resolution as to whether or
not to implement the countermeasures
(1)
Large-scale Purchases to which the procedures as set forth in this Plan are applicable
The procedures provided by the Plan apply to each of following purchases, etc. which will be
carried out without the consent of the Board (such purchases referred to herein as a “Large-scale
Purchase” and the persons or entities carrying out the Large-scale Purchase shall be referred to
herein as the “Large-scale Purchaser”).
(a) Any Purchase, etc.1, with which Holding Ratio2 of the Share Certificates, etc.3 issued by NYK
(the “NYK Share Certificates”) of the Holder4 and Joint Holders, etc.5 becomes 20% or more.
(b) Any Tender Offer6, with which the sum of Ownership Ratio7 of the Share Certificates, etc. with
respect to the NYK Share Certificates of the person or entity launching the Tender Offer and that
of the Special Related Parties, etc.8 becomes 20% or more.
1
“Purchase, etc.” is defined in Article 27-2(1) of the Financial Instruments and Exchange Law.
“Holding Ratio of the Share Certificates, etc. ” is defined in Article 27-23(4) of the Financial Instruments and Exchange Law;
provided however, that the number of overlapping Share Certificates, etc. shall be excluded.
3
“Share Certificates, etc.” is defined in Article 27-23(1) of the Financial Instruments and Exchange Law (in the case of 2.
(1)(a)) or in Article 27-2(1) of the Financial Instruments and Exchange Law (in the case of 2. (1)(b)) or both (in the case of the
others).
4
“Holder(s)” is defined in Article 27-23(1), which includes those deemed as Holder(s) pursuant to Article 27-23(3), of the
Financial Instruments and Exchange Law.
5
“Joint Holder(s), etc.” is defined in Article 27-23(5), which includes those deemed as Joint Holders pursuant to Article
27-23(6) of the Financial Instruments and Exchange Law as well as any other persons or entities having relationships with
Holders and/or Joint Holders which is similar to that between Holders and Joint Holders.
6
“Tender Offer” is defined in Article 27-2(6) of the Financial Instruments and Exchange Law.
7
“Ownership Ratio of the Share Certificates, etc.” is defined in Article 27-2(8) of the Financial Instruments and Exchange
Law; provided however, that the number of overlapping Share Certificates, etc. shall be excluded.
8
“Special Related Party(-ies), etc.” is defined in Article 27-2(7) of the Financial Instruments and Exchange Law, as well as
persons or entities having relationship with the tender offerors and/or Special Related Party(-ies) which is similar to that
between the tender offerors and Special Related Party(-ies); provided however, that, persons or entities provided for in Article
3(2) of the Cabinet Office Regulations concerning Disclosure of a Tender Offer by Persons or Entities other than the Issuer
shall be excluded from the persons or entities provided for in Article 27-2(7)(i) of the Financial Instruments and Exchange
Law.
2
13
(2) Request to Large-scale Purchaser for Large-scale Purchase Information
A Large-scale Purchaser is required to submit to the Company a letter of intention (the “Letter
of Intention”) in Japanese in the format determined by the Company in which the Large-scale
Purchaser is requested to disclose the name, address, the governing law of incorporation, name
of representative, domestic contact information of the Large-scale Purchaser and an outline of
the proposed Large-scale Purchase, and to state that it will comply with the procedures provided
by the Plan before launching a Large-scale Purchase.
Within ten (10) days of receipt of the Letter of Intention from the Large-scale Purchaser, the
Company will issue a list of the information that is necessary and sufficient for the shareholders’
determination, and for the Board and the Independent Committee to form an opinion (the
“Large-scale Purchase Information”) to the Large-scale Purchaser. Subsequently, the
Large-scale Purchaser is required to provide documentation setting forth the Large-scale
Purchase Information (the “Explanation of Purchase”; if any additional or supplemental
information is provided upon request from the Board or the Independent Committee, shall also
include such information; hereinafter the same). In the event that the Board receives the
Explanation of Purchase, the Board will promptly send it to the Independent Committee and will
consult on whether or not it is appropriate to implement countermeasures against the Large-scale
Purchase.
If the Board or the Independent Committee determines that the contents described in such
Explanation of Purchase is insufficient, they may request the Large-scale Purchaser to provide
information to supplement or add to the Explanation of Purchase by setting forth a time limit for
such reply. The Board or the Independent Committee may request for provision of supplemental
or additional information (the “Provision of Additional Information”) more than once depending on
the necessity, however, even in such case, the period during which the Provision of Additional
Information may be requested shall be sixty (60) days at maximum from the date the Large-scale
Purchaser first submitted the Explanation of Purchase, and the time limit for the reply shall also
be set within such sixty (60) days; provided, however, that, if an extension of the period is
requested from the Large-scale Purchaser, such period may be extended as necessary, without
restriction on the period above.
Although details of the Large-scale Purchase Information may vary depending on the attributes
of the Large-scale Purchaser, purpose, and details of the Large-scale Purchase, in general, the
Large-scale Purchase Information includes the following information.
(a) Outline (which includes the information regarding business, capital structure and experiences
related to any business similar to that of the NYK Group) of the Large-scale Purchaser and
persons or entities who act in concert with the Large-scale Purchaser in relation to the
Large-scale Purchase (which includes the Special Related Party(-ies), etc and Joint Holders,
etc.).
(b) The purposes, methods and terms of the Large-scale Purchase (which includes information
related to the purchase price; i.e., type and amount of compensation, timing, structure of related
transactions, legality of the methods of, and the feasibility of the Large-scale Purchase).
(c) The basis for determination of the purchase price of the Large-scale Purchase.
(d) The source of funds for the Large-scale Purchase (including information on the name of the
provider of the funds (which includes the persons or entities who virtually provide the funds) and,
the status and plans of security interest placed on the NYK Share Certificates or other assets
held by the Large-scale Purchaser in relation to the funds and terms of any fund-raising
transactions).
(e) The basic management policy, management structure, business plan, equity plan, dividend policy,
asset management plan, and measures to concretely affect these policies (the “Business
Measures”) of the NYK Group which the Large-scale Purchaser intends to adopt after the
completion of the Large-scale Purchase.
14
.
(f) Matters relating to the consolidation, coalition, etc. between the businesses carried out by the
Large-scale Purchaser and those by the NYK Group companies and specific measures to avoid
potential conflicts of interest between the Large-scale Purchaser and the NYK Group.
(g) Policies dealing with the employees, customers, suppliers, and other stakeholders of the NYK
Group which the Large-scale Purchaser intends to adopt after the completion of the Large-scale
Purchase.
(h) Measures to adopt for sustained and continued enhancement of the corporate value of the NYK
Group after the completion of the Large-scale Purchase and the basis for such enhancement.
(i) Specific measures to adopt to avoid conflicts of interest between the Large-scale Purchaser and
other shareholders of the Company if such conflict arises.
(j) Such other matters which the Board or the Independent Committee deems reasonably
necessary.
(3) Request for provision of information, etc. to the Board from the Independent Committee
In the event that the Explanation of Purchase is submitted from the Large-scale Purchaser, the
Independent Committee may also request to the Board to provide the Board’s opinion for the
Large-scale Purchase and the Explanation of Purchase, the Business Measures determined by
the Board, materials to support the accuracy and legitimacy of such matters, alternative
proposals or other information which the Independent Committee deems necessary or sufficient
by setting forth a time limit for reply of such request. The period during which such request for
provision of information may be made shall be thirty (30) days at maximum from the date the
submission of the Explanation of Purchase is completed to the Board and the Independent
Committee from the Large-scale Purchaser, and the time limit for the reply shall also be set within
such thirty (30) days.
(4)
Consultation and negotiation with the Large-scale Purchaser
If the Board deems appropriate, it may consult with, or negotiate on an improvement of the
terms and conditions concerning the Large-scale Purchase with the Large-scale Purchaser, or
present an opinion or alternative proposal of the Board to the shareholders.
In addition, if the Independent Committee deems appropriate, it may also consult with the
Board and the Large-scale Purchaser.
(5)
Deliberation and report by the Independent Committee
The Independent Committee shall hold deliberations on consultations by the Board concerning
whether or not it is appropriate for the Company to implement the countermeasures against the
Large-scale Purchase based on the Explanation of Purchase submitted by the Large-scale
Purchaser, information provided by the Board, and further based on the results of consultations
with the Board or the Large-scale Purchaser, prepare a report within sixty (60) days from the date
on which submission of the Explanation of Purchase from the Large-scale Purchaser to the
Board and the Independent Committee is completed and provision of information from the Board
to the Independent Committee is completed (provided that such period may be extended for an
additional thirty (30) days, at the maximum, if the Independent Committee determines that it is
inevitable due to, for example, difficulties in making the decision within the period initially set) (the
“Independent Committee Review Period”) and submit the report to the Board.
In the case where the Independent Committee determines that (i) the Large-scale Purchaser is
a Large-scale Purchaser who does not comply with the procedures provided in the Plan (the
“Procedurally Non-compliant Purchaser”), (ii) the Large-scale Purchaser is an Abusive Acquirer,
or (iii) there is a risk that the Large-scale Purchase will significantly damage the NYK Group’s
corporate value or the common interests of the shareholders, then the Independent Committee
shall submit the report, “We recommend the implementation of countermeasures.” (the
15
“Implementation Recommendation”). In the case where the Independent Committee determines
that there is not a risk that the Large-scale Purchase will significantly damage the NYK Group’s
corporate value or the common interests of the shareholders, then the Independent Committee
shall submit the report, “We recommend that countermeasures not be implemented.” (the
“Non-implementation Recommendation”). The Independent Committee may also submit neither
an Implementation Recommendation nor a Non-implementation Recommendation and may give
any other report that the Independent Committee determines appropriate.
The Board shall give the utmost respect to any of the above-mentioned report.
An Abusive Acquirer shall mean a Large-scale Purchaser who conducts a Large-scale
Purchase, which is determined to obviously and significantly damage the NYK Group’s corporate
value or the common interests of the shareholders and, specifically, which falls within any of the
following:
(a) a person who implements a Large-scale Purchase, for the main purpose of selling the shares
back to the Company or those related to the Company at a high price by boosting the share price
of the Company.
(b) a person who implements a Large-scale Purchase, for the main purpose of the Large-scale
Purchaser or its affiliates acquiring assets necessary for the Company to perform its business
(including, in addition to tangible assets, intangible assets, such as intellectual property,
know-how, confidential corporate information, important trading partners and customers).
(c) a person who implements a Large-scale Purchase, for the main purpose of using the Company
assets (the meaning of which is as described in (b)) as security for, or the source of repayment of,
the debts of the Large-scale Purchaser or its affiliates.
(d) a person who implements a Large-scale Purchase, for the main purpose of selling valuable
assets, including real property and shares that are not directly used by the Company in its current
business and then using the profits from those sales to issue a high priced dividend or using the
high priced dividend to quickly increase the share price of the Company and then sell off its
shares in the Company at a high price.
However, even if the purpose of the Large-scale Purchaser literally falls under (c) or (d) above,
we will not implement the above countermeasures just for that reason.
(e) a person who implements a Large-scale Purchase, under which there is a risk of a coercive
two-tier purchase, (meaning implementing a Large-scale Purchase of Share Certificates, etc.
based on a public tender offer where the second-tier purchase conditions are set less favorably
than the first-tier purchase conditions) or any other purchase whereby the holder of NYK Share
Certificates are, in practice, forced to sell their Share Certificates in the Company.
(6)
Resolution by the Board
(a)
Resolution to implement countermeasures against a Procedurally Non-compliant Purchaser
When the Board has determined that the Large-scale Purchaser falls under the category of the
Procedurally Non-compliant Purchaser, it may, upon obtaining an Implementation
Recommendation from the Independent Committee, adopt a resolution to implement
countermeasures.
(b)
Resolution to implement countermeasures against an Abusive Acquirer
When the Independent Committee makes an Implementation Recommendation following a
determination that the Large-scale Purchaser is an Abusive Acquirer, the Board may, as a
general rule, adopt a resolution to implement countermeasures without obtaining a resolution of
the general meeting of shareholders. In addition, even in that case, if, after taking into
consideration such matters as the contents of the Large-scale Purchase and the circumstances
necessary to determine whether or not to implement countermeasures, the Board finds it
appropriate, then it may adopt such resolution after obtaining a resolution of the general meeting
16
of shareholders.
(c) Resolution to implement countermeasures against a Large-scale Purchase that poses a risk of
significantly damaging the corporate value or the common interests of shareholders
When the Independent Committee makes an Implementation Recommendation following a
determination that the Large-scale Purchase poses a risk of significantly damaging the NYK
Group’s corporate value or the common interests of the shareholders, the Board may convene a
general meeting of shareholders and upon obtaining a resolution of the general meeting of
shareholders to approve the implementation of countermeasures, and may adopt a resolution to
implement countermeasures against the Large-scale Purchase.
(d)
Resolution not to implement countermeasures
When the Board determines it necessary, it may adopt a resolution not to implement
countermeasures against the Large-scale Purchaser. When the Independent Committee makes
a Non-implementation Recommendation, the Board shall give utmost respect to such
recommendation.
(e)
Period prior to Board resolution
Regardless of whether the Independent Committee has submitted an Implementation
Recommendation or Non-implementation Recommendation or any other report it deems
appropriate, the Board, promptly after its receipt of the Independent Committee’s report, shall
adopt either a resolution to implement countermeasures, a resolution not to implement
countermeasures or a resolution to convene a general meeting of shareholders.
(7)
Cancellation, suspension or change after commencing implementation of countermeasures
Even after the Board determines the implementation of countermeasures in accordance with
the Plan, the Board may determine to cancel, suspend or change the implementation of such
countermeasures in the event that (a) the Large-scale Purchaser cancels the said Large-scale
Purchase, (b) there has occurred a change with respect to the facts upon which the decision to
implement the countermeasures were premised, and, as a result, that it has been determined
that the Large-scale Purchase poses no risk of damaging the NYK Group’s corporate value or the
common interests of shareholders. As a matter of illustration, in the event that, for example, an
Allotment of Stock Acquisition Rights (Without Consideration) is chosen as a countermeasure,
and after determination of the shareholders who are eligible for an allotment of rights, the Board
determines to cancel or suspend the implementation of the countermeasure following the
occurrence of any of the situations mentioned above, then Allotment of Stock Acquisition Rights
(Without Consideration) may be so cancelled or suspended during the period until the date
immediately preceding the effective date of the Allotment of the Stock Acquisition Rights (Without
Consideration), and if the Board’s determination is made during the period after the Allotment of
Stock Acquisition Rights (Without Consideration) but prior to the commencement date of the
exercise period of the said rights, then the Company may, among other things, acquire the share
acquisition rights, without the payment of any consideration.
(8)
Public announcement of information
The Company shall make timely disclosures in accordance with laws and ordinances and
financial instruments exchange rules and regulations, and shall make public announcement of
the information listed in each item below at the time prescribed in each item below:
(a) the submission of the Letter of Intention or the Explanation of Purchase from the Large-scale
Purchaser, or the completion of the submission of the Explanation of Purchase:
The Directors will make public announcement without delay after the Board receives the
submission of Letter of Intention or the Explanation of Purchase from the Large-scale Purchaser,
or after the submission of the Explanation of Purchase has been completed.
(b) the contents of the Explanation of Purchase, and the opinion and the Business Measures
provided by the Board to the Independent Committee, to the extent found appropriate by the
17
Independent Committee:
The Directors will make public announcement at the time decided by the Independent
Committee for public announcement.
(c) the contents of the reports of Third Party Experts (as defined in Chapter 2, 5-2,(e) below) and the
report of the Independent Committee, to the extent found appropriate by the Independent
Committee:
The Directors will make public announcement without delay after the Board’s receipt of the
report of the Independent Committee.
(d) the extension of the Independent Committee Review Period, or the decision to implement, not
implement, cancel, suspend or change a countermeasure (including the reasons for and a
summary of such decision):
The Directors will make public announcement without delay after a decision for extension of
the Independent Committee Review Period, or a decision for implementation,
non-implementation, cancellation, suspension or change of countermeasures, is made.
(e) when convening a general meeting of shareholders with respect to the implementation of
countermeasures, such fact, the date and place of the general meeting of shareholders, and the
summary of agendas and proposals:
The Directors will make public announcement without delay after the decision for convocation
of the general meeting of shareholders is made.
(9)
General meeting of shareholders
Even when the Independent Committee has submitted an Implementation Recommendation
because it has determined that the Large-scale Purchaser is an Abusive Acquirer, the Board may
hold a general meeting of shareholders to confirm the intentions of the shareholders of the
Company as to whether to implement countermeasures against the Large-scale Purchase. In
addition, a general meeting of shareholders shall be held when the Board has determined, after
taking into consideration such matters as the contents of the Large-scale Purchase and the
circumstances necessary to determine whether or not to implement the countermeasures, that it
is appropriate to confirm the intentions of the shareholders.
Further, the Board, when the Independent Committee submitted an Implementation
Recommendation because it has found that the Large-scale Purchase poses a risk of
significantly damaging the NYK Group’s corporate value or the common interests of shareholders,
shall hold a general meeting of shareholders to confirm the intensions of the shareholders as to
whether or not to implement the countermeasures against the Large-scale Purchase.
In either of the situations set forth above, the Board shall hold a general meeting of
shareholders as soon as reasonably practicable given the applicable laws and regulations and
the practice to determine shareholders based on notices concerning all shareholders
(sokabunushi-tsuchi) by Japan Securities Depository Center, Inc. after adopting a resolution to
convene a general meeting of shareholders for such purpose.
3.
Countermeasures
The Board will choose a countermeasure, as against the Large-scale Purchase, which the
Board determines the most appropriate method as of that timing, taking into consideration the
opinion of the Independent Committee, and is necessary and appropriate to secure, soundly
enhance and protect the NYK Group’s corporate value and the common interests of the
shareholders, such as the Allotment of Stock Acquisition Rights (Without Consideration). A
general outline of the terms of the Allotment of Stock Acquisition Rights (Without Consideration),
as a countermeasure, is set forth in pages 26 and 27, however, in the event of the actual
issuance of stock acquisition rights, such matters as the exercise period and conditions of
exercise may be established by taking into consideration the effect as a countermeasure against
the Large-scale Purchase, such as establishing a condition for the exercise of the stock
acquisition rights, to the effect that any right holder who belongs to a Specified Shareholders
18
Group9 which holds total voting rights of no less than a certain percentage cannot exercise the
stock acquisition rights. However, even if the issuance of stock acquisition rights is selected as
the countermeasure, cash will not be delivered to part of the owners of stock acquisition rights.
4.
Effectuation of Plan, effective period of Plan, and abolition or amendment of Plan
At the Ordinary General Meeting of Shareholders, we will confirm the intentions of the
shareholders regarding the Plan, and upon receiving shareholder approval of the same, the Plan
shall go into effect. The effective period of the Plan shall be until the time of the conclusion of the
ordinary general meeting of shareholders relating to the last business year ending within three (3)
years following the conclusion of this Meeting; provided, however, that the Plan shall be
abolished, even during the effective period of the Plan, at the time of the adoption at a general
meeting of shareholders of a resolution for the abolition of the Plan or at the time that the Board,
with the approval from the Independent Committee, adopts a resolution to abolish the Plan.
Furthermore, the Board may, even during the effective period of the Plan, upon receiving
approval of the Independent Committee and within the scope of the intentions given in the
approval at the corresponding general meeting of shareholders, amend or change the Plan (a) in
the event of the occurrence of the enactment or amendment of laws and ordinances or financial
instruments exchange rules and regulations, or issuance of important court judgments relevant to
the Plan and when it is appropriate to reflect such enactment, amendment and/or judgments, or
(b) when it is appropriate to make wording revisions in order to correct clerical mistakes.
Upon abolition or change of the Plan, the Company shall promptly make a public
announcement of the fact that such abolition or change was made, and in the case of change,
other matters, including the contents of the change.
Chapter 2
Contents of Basic Policy, etc.
The contents of Basic Policy determined by the Company at the abovementioned Board meeting,
contents of special measures that will help achieve the Basic Policy, purpose of the Plan, Plan's
impact on shareholders and investors, etc., the Board decision regarding the Plan and the reasons
therefor, and name and career summary of candidates for Independent Committee members of the
Plan shall be as follows.
1.
Contents of Basic Policy
The Company believes that it is necessary for persons or entities who control the Company’s
financial and business policy, to understand the corporate philosophy of the NYK Group as described
below. In this way, they can be leaders who enable the NYK Group to secure and enhance its
corporate value and common interests of shareholders.
The NYK Group conducts all its daily corporate activity based on the “NYK Group Mission
Statement”, which is: “Through safe and dependable monohakobi (transport), we contribute to the
betterment of societies throughout the world as a comprehensive global-logistics enterprise offering
ocean, land and air transportation”.
The concept of “comprehensive global-logistics enterprise” that the NYK Group has adopted is a
business structure whose goal is to build on ocean transport business, integrating land distribution
businesses such as land transport and warehousing businesses, along with air transport business,
terminal operations, and the like, thus forming an organic and well-integrated, full-service business
with a global scale, combining shipping with value added service to customers and striving diligently
to minimize the impact of fluctuations in market conditions of the ocean transport business.
The Company believes that this comprehensive global-logistics enterprise is a business structure
that not only demonstrates concern for the public good, seeking to fulfill the role of providing part of
the infrastructure of a global society, but also maximizes the NYK Group’s corporate value and the
common interests of shareholders. We adopted this philosophy as the foundation for the
management strategies of the NYK Group, and since then we have worked diligently to develop and
deepen it.
9
Any person or entity falling under Holder(s) of Share Certificates, etc., a Joint Holders, etc., a person or entity who makes a
Purchase as defined in Article 23-2(1) of the Financial Instruments and Exchange Law and/or any Special Related Parties, etc.
thereof.
19
In the business field of ocean transport, at present the NYK Group is actively investing in ships and
vessels, to say nothing of the field of transporting natural resources, which is expanding in step with
the economic growth of emerging countries etc. Similarly, in our land distribution business, we are
working hard to expand our service network, expand business in emerging regions, and establish a
sales platform based on a customer-oriented philosophy, centered around integrated logistics service
strategy. In our air transport business, we are continuing to invest, for example in the introduction of
state-of-the-art equipment. By providing these transport modes of sea, land, and air, and satisfying
customers by combining shipping with value added service, the Company is aiming to further develop
as a comprehensive global-logistics enterprise group.
Further, the NYK Group recognizes that an enterprise has a social existence and could not exist
without our shareholders and investors, as well as our customers, society itself, our group employees,
and any other stakeholders. We also recognize that it is our corporate social responsibility (CSR) that
is the foundation of management and the very source of the NYK Group’s corporate value. The NYK
Group is working to give back to society from our management resources and profits and to deepen
our CSR management, for example by actively enforcing the environmental measures and safety
programs that form the foundation of our “comprehensive global-logistics” concept.
The NYK Group, by continuing to develop as a comprehensive global-logistics enterprise group
having a strong commitment to CSR management, aims to secure and enhance its corporate value
and common interests of shareholders.
As a publicly listed firm, the Company believes that when deciding whether or not to allow a
Large-scale Purchase by a specific party, sufficient information should be provided to the Company’s
shareholders and then the matter should be referred to them for a final decision. A Large-scale
Purchase, which will contribute to secure and enhance the NYK Group’s corporate value and
common interests of shareholders is not something that should be denied.
However, we cannot deny that among Large-scale Purchases, there are those (a) where the time
and/or information needed for shareholders to evaluate the content, etc. of a Large-scale Purchase
and for the Board to form opinions and, when necessary, to offer an alternative proposal, is not
provided, (b) that are abusive because the NYK Group’s corporate value and common interests of
shareholders have not been considered but only the benefit to the purchasing party itself has, and (c)
where the terms and conditions of purchase contains a risk of damage to the NYK Group’s corporate
value and the common interests of shareholders.
In view of the point made in the opening paragraph of the Basic Policy, the Company believes the
party making these kinds of purchase actions is not an appropriate party who controls the Company’s
financial and business policy. For this reason we have decided to take reasonable countermeasures
against such purchase action in a continuous manner, within the limits allowed by laws and
regulations, the Company’s articles of incorporation, etc.
2.
Special measures that will help achieve the Basic Policy
As special measures that will contribute to achieving the Basic Policy, as explained below, the
Company intends to create and implement a new medium-term management plan, to strengthen
corporate governance, and to proceed with a stable return of profits to our shareholders, while
considering even more the balance with our requirement for investment funds.
Because all of these measures are intended to secure and enhance the NYK Group’s corporate
value and common interests of shareholders, the Board believes that these actions are consistent
with the Basic Policy described in 1. above, will not impair common interests of shareholders, and are
not simply measures taken for the purpose of maintaining the officers’ positions.
2-1. Creating and implementing the new medium-term management plan, “More Than Shipping 2013”
On March 31, 2011, we created and announced a medium-term management plan, “More Than
Shipping 2013” to cover the period from April 2011 until March 2014. We present to our shareholders,
investors, and other stakeholders a roadmap that, following this new medium-term management plan,
will result in new growth for the NYK Group and will provide for upgrading the foundation needed to
support that growth. In this way we intend to maximize the NYK Group’s corporate value and common
interests of shareholders.
Under the new medium-term management plan “More Than Shipping 2013”, we will, with the
20
subtitle “Grow with Asia, Expand across the Globe”, combine traditional shipping with value added
strategies to achieve further growth by taking in Asian growth.
Strategic Pillars under “More Than Shipping 2013”
Leverage Logistics Capabilities
Effectively capture Asia’s growing transportation needs
2. Utilize Auto Logistics Capabilities
Actively respond to all auto transport supply chain needs in Asia
3. Employ Technical Capabilities
Secure highly advance energy transportation business
4. Leverage Global Network
Proactively expand overseas natural resources and energy transport business
1.
In the “More Than Shipping 2013” plan, the targets for its final year, which ends in March 2014, are
to achieve revenues of ¥2,300 biillion, recurring profit of ¥130 billion, and net income of ¥95 billion, on
a consolidated basis. In addition, for the year ending in March 2017, we have set as our targets sales
of ¥2,700 billion, recurring profit of ¥170 billion, and net income for the period of ¥125 billion.
For details on the new medium-term plan, “More Than Shipping 2013”, please see the materials
separately announced on March 31, 2011.
2-2. Strengthening corporate governance, the foundation for securing and enhancing corporate value
and common interests of shareholders.
With the objective of securing and enhancing corporate value and common interests of
shareholders, we are working to build management structures and systems with a high level of
transparency. We recognize maintenance of corporate governance as an important subject and
constantly review it.
We have introduced a management committee system and tried to stimulate the Board by
reducing the number of Directors. At present we have thirteen (13) Directors. Also, we have
continuously strived, as a rule, to send convocation notices of a general meeting of shareholders
three weeks in advance of holding the meeting, so that shareholders have ample time to consider
proposals. Upon the introduction of the Current Plan, to ensure an even higher level of
management transparency and to strengthen the Board’s management monitoring function, at
the Company’s 121st Ordinary General Meeting of Shareholders held on June 24, 2008, the
Company has asked its shareholders to elect Outside Directors having a high level of
independence and to amend the Articles of Incorporation to provide that Directors shall serve for
a period of one year and has received their approval. This point shall be the same even after the
Current Plan is renewed to the Plan. The Company’s two Outside Directors and its two Outside
Corporate Auditors are all Independent Directors/Auditors reported to the Tokyo and other
Japanese stock exchanges and are highly independent from the Company and should not have
conflict of interests with the shareholders of the Company.
2-3. Stable return of profits to shareholders in consideration of balance with the requirement for
investment funds
The Company maintains the basic policy of continuously making dividend payments, based on
thorough consideration of payout ratio, the Company’s forecasted business performance, etc. We
also consider requirements for future business development, such as the expansion and
improvement not only of our traditional business of ocean transport but also of other businesses,
and we bear in mind the level of internal reserves needed to withstand fluctuations in market
conditions. Under the new mid-term management plan, “More Than Shipping 2013”, we have set
the target payout ratio (on a consolidated basis) at 25%.
3.
Purpose of the Plan
The Company, as described in 1. above, aims to secure and enhance the NYK Group’s
corporate value and the common interests of the shareholders by growing as a comprehensive
global-logistics enterprise based on the strong recognition that CSR is fundamental to the
21
Company’s operations. Consequently, we believe that persons or entities controlling the financial
and business policy decisions of the Company should be those who understand such NYK
Group’s fundamental corporate philosophy and who can secure and enhance the NYK Group’s
corporate value and common interests of the shareholders. From this perspective, the Current
Plan was adopted in 2008 for the purpose of preventing Large-scale Purchases of NYK Share
Certificates that have a risk of damage to the NYK Group’s corporate value or common interests
of the shareholders and now, the Current Plan is to be renewed as the Plan with partial revisions.
However, as described above in 1., the final decision as to whether Large-scale Purchases of
NYK Share Certificates would have a risk of damage to the NYK Group’s corporate value or
common interests of the shareholders and therefore whether to implement the countermeasures
should rest with the shareholders of the Company. However, in order for the shareholders to
make a proper decision, it is essential that shareholders receive sufficient information about the
identity of the Large-Scale Purchaser, the purpose and any conditions of, and the source of funds
for, carrying out the Large-scale Purchase, as well as the management policies and business
plans for the NYK Group following the Large-scale Purchase, and it is the duty of the Board that
is entrusted the company management by the shareholders to gather this information and
provide it to all of the shareholders. Under certain circumstances, it may also be the duty of the
Board to provide alternatives to the Large-scale Purchaser’s management policies and business
plans to the shareholders and to leave the decision to them. Regardless, if a person conducting a
Large-scale Purchase fails to provide sufficient information, the Board should as a general rule
swiftly implement the countermeasures so as not to significantly damage the NYK Group’s
corporate value or the common interests of the shareholders. In this regard, this rule should also
apply in the event that a Large-scale Purchaser is an Abusive Acquirer who only pursues its own
interest without considering the NYK Group’s corporate value and the common interests of the
shareholders, such as the one who demands that the Company buy back at a premium the
shares that it had acquired, the one who tries to acquire the assets of the Company at a low price
after temporarily gaining control of the Company, or the one who, for all practical purposes,
coerces the other shareholders into selling their shares, etc.
Furthermore, if it is believed that there is a risk of damaging the NYK Group’s corporate value
or the common interests of the shareholders significantly, then it is appropriate for the
shareholders to be entrusted with making the final determination of whether to implement the
countermeasures or not even in consideration of the Board’s duty to manage the Company to
secure the corporate value and the common interests of the shareholders.
In addition, in this process, it is also necessary to adopt measures to prevent the unlikely event
that the Board takes any arbitrary actions.
The Plan is to reasonably accommodate the above mentioned requirements, and secure and
enhance the NYK Group’s corporate value and the common interests of the shareholders.
We hereby notes that we have not as of May 13, 2011 received any proposals for Large-Scale
Purchases.
4.
Plan’s impact on shareholders and investors, etc.
4-1 Introduction
The Plan ensures that the shareholders and investors of the Company will receive the
information necessary to decide whether to accept or reject the Large-scale Purchase, and the
opinion of the Board, which is responsible for the current management of the Company, and
furthermore, it may also contribute to ensuring the chance of the Company’s shareholders and
investors to receive alternative proposals. The foregoing will make possible a proper decision by
the Company’s shareholders and investors, based upon sufficient information, as to whether to
accept or reject the Large-scale Purchase, thereby securing and enhancing the corporate value
and the common interests of shareholders. Accordingly, we believe that this Plan, forming the
basis for proper investment decision-making by the Company’s shareholders and investors,
contributes to the interests of the Company’s shareholders and investors.
As described in Chapter 1, 2. above, since the Company’s response to the Large-scale
Purchase will differ depending upon whether or not the Large-scale Purchaser complies with the
22
procedures provided in the Plan, shareholders and investors of the Company should pay
attention to the timely disclosures made by the Company and acts of the Large-scale Purchaser.
4-2 Impact on shareholders and investors at time of effectuation of the Plan
As no countermeasures, including the Allotment of Stock Acquisition Rights (Without
Consideration), will be implemented at the time of effectuation of the Plan, there will be no direct
specific impact on the Company’s shareholders or investors at the time of effectuation of the
Plan.
4-3
5.
5-1
Impact on shareholders and investors at time of implementation of countermeasures
In the event that the Large-scale Purchaser fails to comply with the procedures provided in the
Plan, the Board may, for the purpose of protecting the corporate value and the common interests
of shareholders, implement the countermeasures permitted under the Corporation law and other
laws and/or the Company’s Articles of Incorporation. However, because of the structure of the
countermeasures, we do not anticipate that a situation will arise where the Company’s
shareholders and investors (excluding the Large-scale Purchaser who is engaged in the
Large-scale Purchase which is the subject of the implementation of the countermeasures and its
Specified Shareholders Group) will sustain any particular economic loss or loss of legal rights.
When the Board determines to take specific countermeasures, it will make timely and appropriate
disclosures of the same in accordance with applicable laws and ordinances and financial
instruments exchange rules and regulations.
In the event that an Allotment of Stock Acquisition Rights (Without Consideration) is
implemented as a countermeasure, shareholders will be required to pay a certain amount of
money within a specified period of time in order to acquire the new stock pursuant to an exercise
of the stock acquisition rights. In addition, when the Board determines that the Company shall
acquire the stock acquisition rights, the Company may issue new stock to the shareholders in
consideration for the acquisition of the stock acquisition rights, without payment of an amount of
money equal to the exercise price. The details of such procedure will be separately announced in
accordance with the laws and ordinances when it is actually determined to issue the stock
acquisition rights.
In the event that the Company’s Board determines to cancel the issuance of the stock
acquisition rights or to acquire, for no consideration, the stock acquisition rights already issued,
then the dilution of each stock’s value will not occur, and there is a possibility that shareholders
and investors who sell or purchase the Company’s shares on the premise of a dilution of the
Company’s stock value occurring after ex-rights date for an Allotment of Stock Acquisition Rights
(Without Consideration) will sustain unexpected losses due to stock value fluctuation.
The Board decision regarding the Plan and the reasons therefor
The Plan’s consistency with Basic Policy
The Plan is to allow the Company to request to the Large-scale Purchaser to provide
information necessary for the shareholders to decide whether to accept or reject such
Large-scale Purchase, allow the Board to convey the contents of such information to the
shareholders and further allow the Board to present alternative proposals to the shareholders as
necessary when a Large-scale Purchase of NYK Share Certificates is conducted. Further, it
makes possible the implementation of countermeasures in order to secure and enhance the
corporate value and the common interests of shareholders (a) in the event that the Large-scale
Purchaser fails to provide the same, or (b) in the event that the Large-scale Purchaser is an
Abusive Acquirer. Even in the case that the foregoing does not apply to the Large-scale Purchase,
the Plan provides a method for convening a general meeting of shareholders to directly seek
shareholder decision as to whether or not to implement countermeasures where there is a risk
that the Large-scale Purchase will significantly damage the corporate value and the common
interests of shareholders. Therefore, we believe the Plan to be consistent with the Basic Policy.
5-2 The Plan does not damage the common interests of shareholders, and it does not have as its
23
purpose the maintenance of the position of the current executives
The Board believes that the Plan does not damage the common interests of shareholders, and
that it does not have as its purpose the maintenance of the position of the current executives. In
addition to the points described above in 5-1., the reasons for this are as follows:
(a) Satisfaction of the requirements set forth in the Guidelines for the Takeover Defensive Measures.
The Plan satisfies the three principles set forth in the “Guidelines Concerning Takeover
Defensive Measures for Securing and Ensuring Corporate Value and the Common Interests of
Shareholders” announced by the Ministry of Economy, Trade and Industry and the Ministry of
Justice on May 27, 2005 (which are, (i) the principle of securing and enhancing corporate value
and the common interests of shareholders, (ii) the principle of prior disclosure and reflection of
the will of shareholders, and (iii) the principle of ensuring necessity and proportionality). Further,
the Plan reflects the contents of the report, “Takeover Defensive Measures in Light of Recent
Environmental Changes”, which was publicly announced by the Corporate Value Study Group of
the Ministry of Economy, Trade and Industry on June 30, 2008.
(b) The Plan places importance on the will of the shareholders (general meeting of shareholders
resolution and Sunset Clause).
At the Ordinary General Meeting of Shareholders scheduled to be held in June of this year, we
will confirm the intentions of the shareholders regarding the appropriateness of the Plan. The
effective period of the Plan shall be until the time of the conclusion of the ordinary general
meeting of shareholders relating to the last business year ending within three years following the
conclusion of the Ordinary General Meeting of Shareholders, and the Plan shall be automatically
abolished unless the approval of the shareholders at a general meeting of shareholders held by
that time is obtained for continuation of the Plan.
Furthermore, at the ordinary general meeting of shareholders held on June 24, 2008, the
Board has sought the judgment of the shareholders on amendment of the Company’s articles of
incorporation, which was to change the term of directorship to one year, and has obtained their
approval. By this amendment, the intention of the shareholders as to whether or not to abolish the
Plan can be confirmed through the election of Directors at subsequent ordinary general meetings
of shareholders.
(c) Reasonableness, clarity, strictness, etc. of necessary requirements for purchaser against whom
countermeasures are to be implemented.
In the Plan, reasonable, clear and strict necessary requirements have been established with
regards to the Procedurally Non-compliant Purchaser and an Abusive Acquirer against whom
countermeasures may be implemented by Board resolution. In addition, the decision to
implement countermeasures against a Large-scale Purchaser who is found to pose a risk of
significantly damaging the corporate value or the common interests of shareholders is to be
made by resolution at a general meeting of shareholders.
(d) Decision by highly independent company outsiders, and information disclosure.
In the Plan, the Board may determine the implementation of countermeasures against a
Procedurally Non-compliant Purchaser upon obtaining a recommendation from the Independent
Committee, despite the fact that the determination as to whether the necessary requirements for
Procedurally Non-compliant Purchaser have been satisfied or not being straightforward and there
being little room for an arbitrary decision to be made. With respect to determination of whether a
Large-scale Purchaser is an Abusive Acquirer or not, and whether to implement
countermeasures against such acquirer, such matters are entrusted to the determination of the
Independent Committee composed of persons who are not only independent of the Company’s
management but also are with thorough knowledge of a company’s management, economics
and/or legal issues (of the three Independent Committee members, the two are Independent
Directors reported to Tokyo and other Japanese stock exchanges, and the other one is an
attorney who has no relationships with the Company as a corporate counsel; therefore, all are
highly independent from the Company and have no risk of having conflict of interests with the
24
shareholders), and the Board shall adopt necessary resolutions by giving utmost respect to the
recommendations of the Independent Committee. Therefore, room for arbitrary decision by the
Board is eliminated to the furthest extent possible.
The Plan also provides that if the Independent Committee finds that a Large-scale Purchaser
poses a risk of significantly damaging the corporate value or the common interests of
shareholders, the determination of the general meeting of shareholders as to whether or not to
implement countermeasures against the Large-scale Purchaser must be sought, making it
impossible for the Board to make an arbitrary decision in the matter.
(e)
Securing of Third Party Expert opinions.
In the event of the appearance of a Large-scale Purchaser, the Independent Committee may,
at the Company’s expense, obtain opinions of persons with expert knowledge, experience and
information, such as financial advisors, certified public accountants and lawyers (the “Third Party
Experts”). Moreover, to the extent found appropriate by the Independent Committee, we will
publicly announce the recommendations of the Independent Committee and an outline of the
Third Party Expert opinions which led to such recommendations.
(f)
Public announcement of information.
We will, publicly announce submission of the Letter of Intention or the Explanation of Purchase
from the Large-scale Purchaser, etc. at the time as provided in the Plan. To the extent found
appropriate, we will publicly announce the contents of the Explanation of Purchase, the opinion
and the Business Measures presented to the Independent Committee by the Board, the contents
of the Third Party Expert opinions, and Independent Committee’s report at an appropriate time as
provided in the Plan.
(g)
The Plan is not a “dead-hand”-type or “slow-hand”-type takeover defensive measure.
The Plan is designed such that it can be abolished by directors nominated by a Large-scale
Purchaser and elected at a general meeting of shareholders, and thus, it is not a
“dead-hand”-type takeover defense measure (i.e., a takeover defensive measure the
implementation of which cannot be prevented even if a majority of the constituent members of the
Board is replaced). Moreover, as described above in 2-2., the term of Directors is one year and
therefore, the Plan is not a “slow-hand”-type takeover defensive measure (i.e., a takeover
defensive measure which requires the passage of time to prevent its implementation because it is
not possible to replace all of the constituent members of the Board at one time).
6. Name and career summary of candidates for Independent Committee members of the Plan
The following three members are planned candidates for the member of Independent
Committee at the initial introduction of the Plan.
[Name]
Yukio Okamoto
[Date of Birth]
November 23, 1945
* As Yukio Okamoto is also a candidate for Outside Director as in Proposal 2, please see the
applicable portions of the relevant Proposal for his career summary and other information
(page 7, candidate No. 11).
[Name]
Yuri Okina
[Date of Birth]
March 25, 1960
* As Yuri Okina is also a candidate for Outside Director as in Proposal 2, please see the
applicable portions of the relevant Proposal for her career summary and other information
(page 8, candidate No. 12).
[Name]
[Date of Birth]
[Career Summary]
Seigo Hirayama
April 15, 1934
April 1964
April 2000
25
Registered as a lawyer in Tokyo Bar
Association
Vice President of Japan Federation of Bar
Association,
President of Tokyo Bar Association
March 2001
Retired from the above mentioned positions
April 2006
President of Japan Federation of Bar
Association
March 2008
Retired from the above mentioned position
Notes: 1. No transactions or special interests exist between the Company and any of the above
candidates for the committee member.
2. In the event that election of Mr. Yukio Okamoto, and Ms. Yuri Okina as Directors is
approved, they will continuously be reported as the Independent Directors as
required by Tokyo and other Japanese stock exchanges with the purpose of
protecting general shareholders.
3. Mr. Seigo Hirayama has no consulting agreement with the Company.
Literature
Outline of Allotment of Stock Acquisition Rights (Without Consideration)
1.
Shareholders eligible for allotment of stock acquisition rights and terms of issuance.
Stock acquisition rights shall be allotted, without consideration, to shareholders noted or
recorded in the shareholders registry as at the end of the record date to be set by the Board at
the ratio of one stock acquisition right per every common share of the Company owned by such
shareholders (excluding, however, common shares owned by the Company).
2.
Class and number of shares to be acquired upon exercise of stock acquisition rights.
The class of the shares to be acquired upon exercise of the stock acquisition rights shall be
common shares of the Company, and the total number of shares to be acquired upon exercise of
the stock acquisition rights shall not exceed the number of shares calculated by deducting the
total number of issued and outstanding common shares of the Company (excluding the common
shares owned by the Company) from the total number of shares authorized to be issued of the
Company, each as of the record date to be set by the Board. The number of shares to be
acquired upon exercise of each stock acquisition right (the “Subject Number of Shares”) shall be
the number separately determined by the Board; provided, however, that appropriate adjustment
shall be made in the event of a share split or share consolidation of the shares of the Company.
3.
Total number of stock acquisition rights to be issued.
The total number of stock acquisition rights to be issued shall be the number separately
determined by the Board. The Board may cause the allotment of stock acquisition rights to occur
over the course of multiple allotments.
4.
Amount of assets to be contributed (or amount to be paid) upon exercise of each stock
acquisition right.
Amount of assets to be contributed (or amount to be paid) upon exercise of each stock
acquisition right shall be the amount determined by the Board, which shall be equal to or more
than 1 Yen.
5.
Restrictions on transfer of stock acquisition rights.
The acquisition of a stock acquisition right by way of assignment shall be subject to the
approval of the Board.
6.
Conditions for exercise of stock acquisition rights.
In principle, any person belonging to a Specified Shareholders Group, a group with a voting
rights ratio of 20% or more (the “Large-scale Purchaser Group”), shall not be able to exercise any
stock acquisition rights. Under the applicable foreign laws and regulations, if a person located in
the territorial jurisdiction governed by such laws and regulations is required to comply with certain
prescribed procedures in order to exercise the stock acquisition rights, then, in principle, such
person shall not be able to exercise the stock acquisition rights (provided, however, that certain
26
persons such as those able to take advantage of an exclusion from application of such foreign
laws and regulations shall be able to exercise their stock acquisition rights, and, as set forth in 8.
below, the stock acquisition rights owned by such certain persons may also be acquired by the
Company in exchange for shares of the Company). Moreover, a person who has failed to provide
the document in the Company’s prescribed form confirming such matters as such person not
belonging to a Large-scale Purchaser Group (excluding, however, those persons whom the
Company has not requested to provide such document) shall not be able to exercise their stock
acquisition rights. The detail for such conditions shall be separately determined by the Board.
7.
Exercise period of stock acquisition rights.
The commencement date of the exercise period shall be a day separately determined by the
Board in the resolution approving the Allotment of Stock Acquisition Rights (Without
Consideration) (hereinafter, such commencement date of the exercise period being referred to as
“Exercise Period Commencement Date”), and the exercise period shall be the period separately
determined by the Board in the resolution approving the Allotment of Stock Acquisition Rights
(Without Consideration), which shall be no shorter than one month and no longer than three
months; provided, however, that if the last day of the exercise period falls on a non-business day
at the place where the payment upon exercise is made, the immediately preceding business day
shall instead be the last day of the period.
8. Acquisition of stock acquisition rights by the Company.
(1) Anytime on or before the day immediately preceding the Exercise Period Commencement Date,
the Company may, in the event that the Board determines it is appropriate to acquire the stock
acquisition rights without consideration, acquire all of the stock acquisition rights without
consideration on the date separately determined by the Board.
(2) On the date separately determined by the Board, the Company may acquire all of the stock
acquisition rights that remain unexercised on the day immediately preceding the day separately
determined by the Board, which are owned by persons other than (i) a person belonging to a
Large-scale Purchaser Group or (ii) a person who fails to provide, on or prior to the date of
acquisition, the document in the Company’s prescribed form confirming such matters as such
person not belonging to a Large-scale Purchaser Group (excluding, however, those persons
whom the Company has not requested to provide such document), and in exchange for each
stock acquisition right, the Company may deliver the Subject Number of Shares of shares of the
Company.
Furthermore, in the event that, on or after such date of acquisition, the Board recognizes that a
person who does not belong to a Large-scale Purchaser Group exists among persons owning
stock acquisition rights (provided that upon such recognition, the Company may request such
person to provide the document in the Company’s prescribed form set forth in the first paragraph
of this 8(2)), the Company may acquire, on the date separately determined by the Board, which
date shall be after the aforementioned date of acquisition, all of the stock acquisition rights owned
by such person that remain unexercised on or before the day immediately preceding the day
separately determined by the Board, and in exchange for each stock acquisition right, the
Company may deliver the Subject Number of Shares of the Company’s share. The same shall
apply thereafter.
When setting forth conditions for acquisition, the Company may (i) exclude from the targets of
acquisition the stock acquisition rights held by persons belonging to the Large-scale Purchaser
Group whose voting rights ratio is 20% or more or (ii) treat such persons differently from other
persons with respect to the consideration for acquisition, etc. However, even if the stock
acquisition rights held by the persons above are included in the targets of acquisition, cash shall
not be delivered to such persons above as consideration for such acquisition.
27
Greetings from the President
I would like to express my gratitude to our shareholders for their understanding and support for
NYK Group’s corporate activities. I would also like to extend my sincere condolences to all those
who have been affected by the Great East Japan Earthquake, and our sincere hope for the swift
recovery.
For the consolidated fiscal year (FY2010), the NYK Group reported a year-on-year increase in
revenue for the first time in two years, with consolidated revenues of ¥1,929.1 billion, operating
income of ¥122.3 billion, recurring profit of ¥114.1 billion, and net income of ¥78.5 billion. The global
economy has been treading a gradual path to recovery from the effects of the Lehman Shock. In the
shipping and logistics businesses, transport volumes and freight rates have picked up thanks to
strong growth in emerging countries. In particular, liner trade for transporting products and consumer
goods and air cargo transportation have recovered to beyond-anticipated levels. However, the
added impact of the Great East Japan Earthquake on the global economy, along with sluggish
performance in container transport volumes for Europe and the U.S. and changes in the market
conditions for bulk shipping, has cast uncertainty as to whether a sustainable business recovery can
be secured going forward.
To overcome the drastically changing business environment, the NYK Group completed an
Emergency Structural Reform Project called “Yosoro”* and set up a new 3-year medium-term
management plan called “More Than Shipping 2013” which started from April 2011.
*Note: The term “Yosoro” is a command given by a captain of a vessel meaning “Steady at full
ahead”. That is to say, the project has been named “Yosoro” to emphasize that the NYK
Group intends to overcome difficulties and continue to advance forward toward its goals.
The shipping and logistics businesses are growth industries that are expanding in proportion to
growth in the economy and population, but they are also greatly affected by changes in market
conditions in accordance with demand and supply. Further, there is limitation in securing the lead by
competing freight rate alone when there is not notably large difference in the hard side of
vessel-based transport services. To ensure that the NYK Group continues to be the customers’
choice within such a business environment, we need to differentiate our transport services on the
soft side with additional benefits and also establish a business structure that can minimize the
impacts of changes in market conditions. This is the essential gist of “More Than Shipping 2013”,
which goes beyond the framework of the conventional shipping business. The key to growth is
providing highly convenient transport services by leveraging the NYK Group’s network in Asia, which
is seeing an increase in transport volumes.
Therefore, in the “More Than Shipping 2013”, we will combine traditional shipping with value
added strategies with the subtitle of “Grow with Asia, Expand across the Globe”. We will strive for
further growth by taking in Asian growth, and by expanding the high value added business with
stable freight rates. Specifically, we have raised the following four key strategies of 1) Leverage
Logistics Capabilities: Effectively capture Asia’s growing transportation business, 2) Utilize Auto
Logistics Capabilities: Actively respond to all auto transport supply chain needs in Asia, 3) Employ
Technical Capabilities: Secure highly advance energy transportation business, and 4) Leverage
Global Network: Proactively expand overseas natural resources and energy transport business. The
targets for the consolidated results for its final year, which ends in March 2014, are to achieve
revenues of ¥2,300 billion, recurring profit of ¥130 billion and net income of ¥95 billion. Looking
further ahead, the targets for the consolidated results for the year ending March 2017 are revenues
of ¥2,700 billion, recurring profit of ¥170 billion, and net income of ¥125 billion. We will work together
as one towards achieving our medium-term management plan.
We plan to propose a fiscal year-end dividend of ¥5.00 per share (a total annual dividend of
¥11.00 per share including interim dividend). Regarding dividends for the upcoming period (FY2011),
consolidated net income is presently forecast to be around ¥34 billion; so we are able to set the
ongoing consolidated payout ratio of 25%. However, we are currently not able to state a specific rate,
and aim to notify our shareholders of the exact payout ratio by the release of the first quarter results
scheduled for the end of July this year, after further assessing performance trends for the time being.
We do appreciate our shareholders’ further understanding and support.
June 2011
Yasumi Kudo
President
28
Business segment results
(1) Liner Trade
(In 100 millions of yen)
The 121st term The 122nd term The 123rd term The 124th term
(current term)
FY2007
FY2008
FY2009
FY2010
6,664
5,953
3,780
4,621
Operating income (loss)
115
(243)
(517)
333
Recurring profit (loss)
114
(258)
(554)
302
Revenues
(2) Bulk Shipping
(current term)
FY2007
FY2008
FY2009
FY2010
10,391
10,870
7,334
7,964
1,784
1,727
457
663
1,741
1,689
366
604
Revenues
(3) Logistics
(current term)
FY2007
FY2008
FY2009
FY2010
5,269
4,481
3,417
3,909
160
48
11
67
171
51
15
77
Revenues
(4) Terminal and Harbor Transport
(current term)
FY2007
FY2008
FY2009
FY2010
Revenues
1,513
1,320
1,102
1,224
110
60
33
70
94
51
29
66
29
(5) Cruises
(current term)
FY2007
FY2008
FY2009
FY2010
467
442
351
358
52
13
(37)
(23)
50
11
(40)
(26)
Revenues
(6) Air Cargo Transportation
(current term)
FY2007
FY2008
FY2009
FY2010
Revenues
1,026
794
625
872
(220)
(179)
(153)
86
(232)
(188)
(151)
78
(7) Real Estate
(current term)
FY2007
FY2008
FY2009
FY2010
115
117
121
114
34
36
37
32
41
43
49
43
Revenues
(8) Other Business Services
(current term)
FY2007
FY2008
FY2009
FY2010
Revenues
2,050
2,078
1,559
1,635
(18)
(15)
(13)
(6)
2
6
(17)
(4)
Note: Figures are before elimination of internal transactions between segments.
30
Ratio of revenues
Air Cargo Transportaion Real Estate
0.6%
4.2%
Cruises
1.7%
Other
7.9%
Liner Trade
22.3%
Terminal and Harbor Transport
5.9%
Logistics
18.9%
Bulk Shipping
38.5%
Assets by business segment
(current term)
FY2007
FY2008
FY2009
FY2010
3,171
2,984
2,758
2,593
12,901
12,453
12,376
13,027
(3) Logistics
(4) Terminal and Harbor
Transport
(5) Cruises
2,475
1,976
2,084
2,152
1,487
1,318
1,359
1,381
443
397
332
273
(6) Air Cargo Transportation
1,092
714
643
599
613
512
567
538
(8) Other Business Services
5,461
4,925
5,075
5,075
Total
27,645
25,282
25,198
25,642
Adjustments
(4,785)
(4,569)
(3,127)
(4,374)
Consolidated
22,860
20,712
22,071
21,268
(1) Liner Trade
(2) Bulk Shipping
(7) Real Estate
Note: Content of adjustments includes adjustments for receivables and assets regarding internal transactions
between segments, and corporate assets. Corporate assets mainly include surplus operating funds of
the Company (cash and deposits).
31
The 124th Ordinary General Meeting of Shareholders
Documents attached to the Notice of Ordinary General Meeting of Shareholders
Business Report (From April 1, 2010 to March 31, 2011)
1. Overview of Operations for NYK Group
(1) Business Progress and Results
1)
Business Progress and Results for Current Fiscal Year
The global economy for the current fiscal year has been on a gradual path to recovery since the
world economic crisis of September 2008. As a result, growth rates improved over the previous
period, and amounts for trade for the current fiscal year also switched to positive levels from negative
growth in the previous year. Personal consumption in advanced nations including Japan and the U.S.
showed a robust recovery, and emerging countries maintained their strong economic growth backed
by voracious personal consumption, proactive fiscal spending and an influx of foreign capital.
However, the impact of the Great East Japan Earthquake that occurred in March 2011 will no doubt
have a major impact on the current economy as well as medium- to long-term energy policies and
other measures. As such, the outlook of the global economy from hereon is unclear.
Under such business conditions, the consolidated results in the FY2010 was significantly
improved to record revenues of ¥1,929.1 billion (13.7% increase over the previous year), operating
income of ¥122.3 billion, recurring profit of ¥114.1 billion, and net income of ¥78.5 billion to post
profits.
2)
Overview of the Business Segments
(i) Liner trade
Freight rates continued to recover as the demand and supply balance improved, and at the same
time, the introduction of additional vessels on non-scheduled voyages and other initiatives to expand
earnings helped to significantly boost revenues; as a result, we were able to achieve significant
increase over the previous period and to posted profits. In the second half, an ease in demand and
supply saw a fall in freight rates, as the effects of soaring fuel prices and the strong yen were felt.
The Pacific, European, Atlantic, Oceania and Central and South American container routes, as
well as the Asian routes posted profits mainly thanks to recovery in freight rates, streamlining of
services, and cost reduction such as slow-steaming. However, on the conventional liner routes
operated by NYK-HINODE LINE, LTD., revenues and profits were down from the previous period
because of low cargo level, surge in fuel price, strong yen, and the like.
Also, in November 2010 the Company took over intra-Asia liner business from TOKYO
SENPAKU KAISHA, LTD.
(ii) Bulk Shipping
► Car Carrier Transportation
Finished automobile transport operations are starting to show signs of recovery from the effects
of the global economic crisis the year before last, and although results have not returned to pre-crisis
levels, the number of transported vehicles topped the previous period’s units. While 12 vessels were
newly delivered during the period, 4 aging vessels which had been laid up were sold for scrap to
adjust the fleet. Together with conservation of fuel and efficient allocation of the vessels, as a result,
the performance was improved compared to the previous period.
The auto logistics business conducted finished automobiles transport operations in China and
finished automobiles terminal businesses in China, Thailand, Singapore and Europe. The NYK
Group also aggressively expanded its businesses to leverage the growing demand of emerging
countries in Asia, such as India.
32
► Bulk/Energy Resources Transportation
<Bulk Carriers> In addition to developing countries like China or India, demand for energy and
steel increased steadily in the developed countries and seaborne cargo volumes increased.
Meanwhile, the volume of completed new carriers reached its highest ever level, and there were
increasingly strong sentiments of an oversupply in bulk carriers. Market conditions remained at
favorably high levels in the first half, but declined in the second half mainly due to the large volume of
capesize bulkers. The full year results showed an increase in revenues but a fall in profits. This is
because small-medium vessels under the panamax bulker size outperformed the previous period,
while results deteriorated for capesize bulkers. NYK GLOBAL BULK CORP., which operates handy
bulk carriers, reported an increase in both revenues and profits from the previous period, thanks to
brisk transport volume in Asia/Pacific region.
<Tanker> Petroleum demand rebounded in tandem with the economic recovery, leading to an
increase in seaborne cargo volumes of both crude oil and petroleum products. Meanwhile, regarding
shipping capacity, despite the scrapping or retrofitting of tankers due to international covenants
limiting the use of single-hull tankers, there was still a large volume of completed new carriers, which
failed to erode the sentiment of an oversupply in tankers. As for market conditions, although tankers
for both crude oil and petroleum products experienced some volatility, they remained at high levels in
the first half. In the second half, seasonal factors such as demand for heater fuel was expected to
drive vessel demand; but as tankers that had been converted for floating storage returned to the
market, the sentiment of oversupply resurged and market conditions on the whole were stagnant.
Full year results for tanker division including LNG carriers showed a decline in both revenues and
profits over the previous period. We have also invested in the Norwegian company KNUTSEN
OFFSHORE TANKERS ASA and have begun our foray into the shuttle tanker business of deep-sea
oilfields, which is considered to be one of the growth areas.
(iii) Logistics
In the NYK Logistics sector (logistics division excluding the air forwarding service sector), an
upturn in the transport volumes of major customers in the logistics and manufacture of the Asian
region coupled with efforts to cut costs and improve the efficiency of businesses operations in each
country resulted in an increase in both profits and revenues over the previous period. Regarding the
YUSEN LOGISTICS CO., LTD. in the air forwarding service sector, despite spiraling fuel prices and
air freight rates driving down profitability, efforts to bolster air freight demand saw results for this
sector exceed the previous period’s levels. Overall, both revenues and profits of the logistics
business increased from the previous period.
NYK commenced discussions with YUSEN AIR & SEA SERVICE CO., LTD. for realignment and
merger of our logistics business with their company on the basis of a basic agreement concluded on
February 25, 2010. On October 1, 2010, YUSEN AIR & SEA SERVICE CO., LTD. merged domestic
logistics business of NYK LOGISTICS (JAPAN) CO., LTD., which is the wholly owned subsidiary of
NYK, and changed its trade name to YUSEN LOGISTICS CO., LTD. NYK and YUSEN LOGISTICS
CO., LTD. entered into a basic agreement on December 22, 2010, for the integration of our overseas
businesses, and have started to successively merge these businesses abroad in and after January
2011.
(iv) Terminal and Harbor Transport
Handling volumes at domestic and overseas container terminals increased from those of the
previous period due to the worldwide recovery in container transport volume. As a result, the NYK
Group’s terminal and harbor transport business, including towage operations, recorded increased
revenues and profits over the previous period.
(v) Cruises
The severe business climate continued for both the U.S. market’s Crystal Cruise and the
Japanese market’s Asuka Cruise, as uncertainty remained over the financial situation in European
states, unemployment rates in the U.S. hovered, economic recovery is slow in Japan at high levels.
33
However, efforts to bolster sales and cut costs helped to raise revenues over the previous period
and reduce any losses incurred.
(vi) Air Cargo Transportation
NIPPON CARGO AIRLINES CO., LTD.(NCA) focused on securing profitability and enhancing
customer services via various initiatives including actively developing routes in response to a rise in
airfreight demand that began in the second half of the previous fiscal year, and revising freight rates to
normal levels in stages, as well as realizing cost reductions, improving its load factor, and expanding
the use of charter business. As a result, NCA achieved significant improvements in performance
over the previous period and posted a profit.
(vii) Real Estate and Other Business Services
A slump in market conditions for the real estate business saw a fall in rental rates. Coupled with
the increase of vacancy rates for some buildings, it resulted in a fall in both revenues and profits.
Regarding other businesses, manufacturing and processing businesses such as BOLTECH CO.,
LTD. saw an increase in revenues and posted a profit, thanks to higher orders for vessels and
onshore work as well as robust fuel additive sales, while, the trading business including the NYK
TRADING CORPORATION recorded a rise in revenues to decrease losses as a whole.
Please refer to the “Business segment results” given on pages 29 and 30.
3)
Safety and Environment
At the core of the NYK Group’s management is the principle of ensuring the safe operation of its
vessels. The NYK Group remains committed to providing safe and secure marine transport services
based on its unique safety management system NAV9000, along with other initiatives such as the
Near Miss 3000 campaign to raise awareness of safety issues on site. The NYK Group will continue
to contribute to environmental conservation efforts and carry out safe and secure marine transport
activities.
The NYK Group has affiliations with various maritime universities throughout the world including
a maritime college in the Philippines, which has adopted the Company’s unique education program
for fostering seafarers into its curriculum. Through these affiliations and programs, the NYK Group is
working towards fostering highly skilled mariners in bases around the world to secure human
resources that will enable the completely safe passage of its vessels.
In addition to this, the NYK Group is also actively developing innovative environmental
technology together with its wholly owned subsidiary MTI (Monohakobi Technology Institute) to
realize environmental-load reducing and energy-conserving vessels. 7 technology-development
projects are selected continuously from the previous year by the Ministry of Land, Infrastructure,
Transport and Tourism (MLIT) for subsidies during 2010 in the ministry’s “Support for Technology
Development for Curtailing CO2 from Marine Vessels”, these projects are positively advancing their
technological development with the support of the MLIT. We have launched into service the module
carrier for overseas transport equipped with the world’s first air-lubrication system using an air-blower*,
one of the target businesses, and are currently verifying its energy conserving effects during an
actual voyage.
*Note: This system will generate bubbles by supplying air using an electric blower to the vessel
bottom, thus reducing the frictional resistance between the vessel’s bottom and the seawater.
4)
NYK Group report on damage resulting from the Great East Japan Earthquake, and aid
activities provided by the Group to the disaster areas
Three bulk coal carriers that were docked in three ports in Fukushima Prefecture were damaged
by the tsunami. Specifically, the “SHIRAMIZU” at Soma Port and the “SHIROUMA” at Haranomachi
Port were run aground and the vessels were damaged, while the “CORAL RING” at Onahama Port
was rendered inoperable by the damage. Fortunately, all crew members of the three carriers were
rescued safely.
Also, about 1,000 containers in the Sendai and Hachinohe areas were damaged by the
34
earthquake and tsunami.
The NYK Group has provided various support to the disaster areas such as monetary donations,
provision of aid supplies, and the free transport of materials via vessels and container trailers.
(2) Financing and Capital Investment Activities
The NYK Group acquired necessary funds for the current fiscal year primarily by its own financial
assets, and the borrowings from financial institutions, as well as funds obtained by an increase in
capital in the previous fiscal year. Borrowed funds as of March 31, 2011 (including corporate bonds)
totaled ¥981.9 billion, a decrease of ¥99.8 billion on the previous fiscal year.
The total capital investment of the NYK Group, which was based principally around the liner trade
and bulk shipping businesses, was ¥278.5 billion. In the above mentioned two businesses, we made
investment of ¥45.9 billion and ¥217.8 billion, respectively, primarily for ship construction and other
facilities. Other than above, we made investment of ¥6.4 billion for transportation equipment and
information system development in the logistics business, ¥4.8 billion for towing vessels and the like
in the terminal and harbor transport business, ¥1.9 billion in the cruise business, ¥0.3 billion for
aircraft in the air cargo transport business, ¥0.2 billion in the real estate business, and ¥0.8 billion in
other business.
(3) Management Perspectives
1)
Dealing with Rapidly Changing External Conditions
In an effort to overcome the severe business environment, the NYK Group completed its 2-year
Emergency Structural Reform Project “Yosoro”* from January 2009 to carry out drastic reviewing of
profit structures and management systems. Also, in October 2009, the Group reviewed its previous
medium-term management plan. Within this, the NYK Group restructured its business portfolio by
reviewing its various divisions to determine those that require a revision of their strategy and those
that need reinforcement. From April 2011, we implemented our new mid-term management plan,
“More Than Shipping 2013”. This new plan is focused on achieving growth by taking in Asian growth
and expanding the high value added business with stable freight rates to combine traditional
shipping with value added strategies. Specifically, we have raised the following four key strategies of
1) Leverage Logistics Capabilities: Effectively capture Asia’s growing transportation needs, 2) Utilize
Auto Logistics Capabilities: Actively respond to all auto transport supply chain needs in Asia, 3)
Employ Technical Capabilities: Secure highly advance energy transportation business, and 4)
Leverage Global Network: Proactively expand overseas natural resources and energy transport
business. Although we are concerned about the impact of the Great East Japan Earthquake that
occurred this March on possibly stagnating the export of automobiles and other products, we will
steadily continue to build our business portfolio, including growth fields such as the offshore
business, and expand our international operations focused especially on Asia.
*Please see note in the middle of page 28.
2)
Environmental Issue Initiatives
The NYK Group places environmental conservation as one of its most important management
principles, and is developing a revolutionary environmental technology on the basis of a long-term
vision such as “NYK Super Eco-ship 2030”. We are continuing with our efforts toward an
environmentally friendly business model that includes curbing greenhouse gas emissions by
promoting slow streaming to reduce bunker oil consumption.
3)
CSR (Corporate Social Responsibility) Management Strengthening
We have revised the NYK Line Business Credo to reflect the current thinking that is taking hold
internationally, which states that all organizations should recognize and carry out their social
responsibility in working towards building a sustainable society.
35
The NYK Group will, with a global perspective, continue to strengthen its CSR management built
on the three keys of “Sound and highly transparent management”, “Safe, environmental-friendly
operations”, and “Workplaces that instill pride”. Regarding the first key of “Sound and highly
transparent management”, this involves building a system for internal control and compliance. The
NYK Group regards the second key of “Safe, environmental-friendly operations” as a high-priority
issue. To secure safety, the Group focuses on raising awareness of the safe passage of vessels,
and setting up and promoting procedures for accident prevention, while focuses on reducing the
greenhouse gas emissions of both vessels and non-vessels for environment. Regarding the
“Workplaces that instill pride”, it refers to efforts to create good relationships with all stakeholders
and to improve service quality through the practice of the NYK Group Values of “Integrity, Innovation
and Intensity”.
(4) Major Corporate Realignment of the NYK Group
1)
As of October 1, 2010, the Company merged with the wholly-owned subsidiary TAIHEIYO
KAIUN CO., LTD. and acquired all of the company’s rights and duties.
2)
The Company’s consolidated subsidiary, YUSEN AIR & SEA SERVICE CO., LTD., took over a part
of the logistics business of the Company’s wholly owned subsidiary, NYK LOGISTICS (JAPAN) CO.,
LTD., as of October 1, 2010. Also, on the same day YUSEN AIR & SEA SERVICE CO., LTD. changed its trade name to
YUSEN LOGISTICS CO., LTD.
3)
As of November 1, 2010, the Company took over the intra-Asia liner business operated by the wholly
owned subsidiary, TOKYO SENPAKU KAISHA, LTD.
(5) Financial Position and Results of Operation
1)
Consolidated Financial Position and Results of Operation
(In millions of yen)
The 121st
term
The 122nd
term
The 123rd
term
The 124th
term
(current term)
FY2007
FY2008
FY2009
FY2010
2,584,626
2,429,972
1,697,342
1,929,169
198,480
140,814
(30,445)
114,165
Net income (loss)
114,139
56,151
(17,447)
78,535
92.93 (yen)
45.73 (yen)
(12.71) (yen)
46.27 (yen)
2,286,013
2,071,270
2,207,163
2,126,812
Category
Revenues
Net income (loss) per share
Total Assets
Net Assets
Net Assets per share
Note:
679,036
581,237
703,394
728,094
519.51 (yen)
443.16 (yen)
389.46 (yen)
403.46 (yen)
Net income (loss) per share is calculated on the basis of the average number of shares outstanding
(excluding treasury stock) in each fiscal year, and net assets per share is calculated on the basis of the
total number of shares (excluding treasury stock) outstanding at each term end. In addition, the total
number of issued shares excludes the number of treasury stock.
The 121st fiscal year
Significant increases in both revenue and profits were recorded in the shipping segment due to the stable
results produced by rate restoration initiatives in liner trade an increase in handling volumes handled
produced by expansion of fleet scale, and favorable market conditions of dry-bulk carriers. In each of the
36
three major non-shipping segments, results were up from the previous fiscal year due to an increase in
handling volumes. In the air cargo transportation business, losses increased as a result of an inability to
absorb increased repair costs on aging equipment and the rise in bunker oil prices. Record high values
were reported for each profit/loss figure.
The 122nd fiscal year
The global economic slump generated by the U.S. financial crisis saw conditions take a rapid change for
the worse in the dry bulk carriers’ market, which had posted record high results in May 2009. Freight
charges fell for container vessels, which had made a steady recovery in the first half, and transport
volume was also stagnant. As a result, the marine transport business posted a decline in both revenues
and profits. In the logistics, Terminal and Harbor Transport, and Air Cargo Transportation businesses also,
the effects of the economic downturn saw handling volumes decrease and performance fall under that of
the previous period for each profit/loss figure.
The 123rd fiscal year
The global economic slump continuing on from the previous period has seen a dramatic reduction in trade
volumes, as business results were at an all-time low. Stagnant performance in container transport and a
fall in freight rates along with stagnant conditions in the tanker market and a delayed recovery in
automobile transport volumes impacted performance in the first half, and although there were signs of a
gradual upturn in the second half, the shipping business recorded substantial falls in both revenues and
profit and posted a loss. Results for the logistics, terminal and harbor transport, and air cargo
transportation businesses also deteriorated, as handling volumes failed to pick up. As a result, losses
were posted for each profit/loss figure.
The 124th fiscal year (current term)
Conditions in the current fiscal year are described in the preceding “Business Progress and Results” (on
pages 32-35).
Regarding assets and profit and loss of the Group, refer to “Business segment results” and “Assets by
business segment” on page 29-31.
2)
Unconsolidated Financial Position and Results of Operation
Category
Revenues
Net income (loss)
Net income (loss) per share
Total Assets
Net Assets
Net Assets per share
Note:
The 121st
term
The 122nd
term
The 123rd
term
The 124th
term
(current term)
FY2007
FY2008
FY2009
FY2010
1,312,566
1,240,421
808,125
970,318
106,135
113,190
(31,696)
58,815
75,920
16,076
(7,212)
26,741
61.81 (yen)
13.09 (yen)
(5.26) (yen)
15.76 (yen)
1,301,423
1,138,526
1,408,463
1,442,434
497,154
408,989
526,351
534,894
404.83 (yen)
333.09 (yen)
310.01 (yen)
315.21 (yen)
Net income (loss) per share is calculated on the basis of the average number of shares outstanding
(excluding treasury stock) in each fiscal year, and net assets per share is calculated on the basis of the
total number of shares (excluding treasury stock) outstanding at each term end. In addition, the total
number of issued shares excludes the number of treasury stock.
The 121st fiscal year
Despite surging bunker oil prices and stronger yen, we recorded significant increases in revenues and
profits over the previous fiscal year, due to the increase in cargo volume and recovery of freight rates to a
certain degree in the liner trade, favorable market conditions of dry-bulk carriers in the bulk shipping, and
cost reduction in all segments.
37
The 122nd fiscal year
Market conditions changed dramatically in the wake of the global economic slowdown generated by the
financial crisis in the U.S., while rate restoration initiatives produced stable results in liner trade and the
best ever results for the dry bulk carriers’ market were recorded in May. As a result of the sudden slump in
market conditions and ensuing stagnation in cargo traffic and drop in freight rates, revenues and profits
with the exclusion of recurring profit were down from the previous fiscal year.
The 123rd fiscal year
In the liner business, both transport volume and freight rates floundered in the first half; however, a pickup
in transport volume and subsequent resurge in demand and supply in the second half facilitated a
recovery in freight rates. As for the bulk shipping business, the tanker market continued to slump and
there was a delayed resurge in transport volume for automobile transport. This resulted in a drastic fall in
revenues over the previous period and a loss posted for each profit/loss figure.
The 124th fiscal year (current term)
A pick up in container transport volumes and a rebound in freight rates saw performance improve in the
first half. The number of completed automobiles also recovered steadily, but in the second half conditions
in the dry bulk and tanker markets gradually started to slump. However, the favorable results in the first
half helped to achieve major gains in revenues and a profit posted for each profit/loss figure.
(6) Principal Business of the Consolidated (as of March 31, 2011)
Liner trade, bulk shipping, logistics, terminal and harbor transport, cruises, air cargo transportation, real
estate and other business services.
(7) Principal Business Offices (as of March 31, 2011)
1)
NYK
Category
Location
Head Office
Yusen Bldg., 3-2, Marunouchi 2 Chome, Chiyoda-ku,
Tokyo
Branch Offices
Yokohama Branch Office (Yokohama City), Nagoya
Branch Office (Nagoya City), Kansai Branch Office
(Kobe City), Kyushu Branch Office (Fukuoka City) and
Taipei Branch Office (Taiwan)
Overseas resident and representative offices
Johannesburg, Dubai, Doha, Jedda, Beijing, Moscow
and Saint Petersburg
2)
Principal subsidiaries
Name of company
Location of head office or country
NYK GLOBAL BULK CORP.
Chiyoda-ku, Tokyo
NIPPON CARGO AIRLINES CO., LTD.
Minato-ku, Tokyo
HACHIUMA STEAMSHIP CO., LTD.
Kobe City
NYK-HINODE LINE, LTD.
Chiyoda-ku, Tokyo
NYK CRUISES CO., LTD.
Yokohama City
NYK TRADING CORP.
Minato-ku, Tokyo
YUSEN LOGISTICS CO., LTD.
Minato-ku, Tokyo
UNI-X CORP.
Shinagawa-ku, Tokyo
NYK GROUP AMERICAS INC.
U.S.A.
NYK GROUP EUROPE LTD.
U.K.
NYK GROUP SOUTH ASIA PTE. LTD.
Singapore
NYK GROUP OCEANIA PTY. LTD.
Australia
38
(8) Status of Principal Lenders of NYK (as of March 31, 2011)
Lender
Outstanding Balance (Millions of yen)
NIPPON LIFE INSURANCE CO.
75,502
DEVELOPMENT BANK OF JAPAN INC.
53,573
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
53,417
MEIJI YASUDA LIFE INSURANCE CO.
39,034
SUMITOMO LIFE INSURANCE CO.
30,488
THE DAI-ICHI MUTUAL LIFE INSURANCE CO.
18,498
THE NORINCHUKIN BANK
16,084
CHIBA BANK, LTD．
13,716
NATIONAL MUTUAL INSURANCE FEDERATION OF
AGRICULTURAL COOPERATIVES
12,612
SUMITOMO MITSUI BANKING CO.
Note:
9,642
In addition to the above, the Company has a total of ¥79,961 million loans from a syndicate of banks led
by The Bank of Tokyo-Mitsubishi UFJ, Ltd., but these loans are not included in the outstanding
borrowings from each of the banks.
(9) Employees (as of March 31, 2011)
1)
Employees of the Consolidated
Number of employees Year-on-year change
(persons)
(persons)
Segment
Liner Trade
4,090
(107)
Bulk Shipping
1,926
159
16,562
382
Logistics
Terminal and Harbor Transport
2,363
(3,601)
Cruises
458
(27)
Air Cargo Transportation
716
(38)
62
3
1,900
(72)
284
2
28,361
(3,299)
Real Estate
Other
Company-wide (common)
Total
Note:
2)
Employees included in “Company-wide (common)” belong to administrative divisions that cannot be
classified to a specific segment.
Employees of the Unconsolidated
Number of employees Year-on-year change
(persons)
(persons)
Segment
Employees on land duty
1,245
(10)
[seamen on land out of above]
[234]
[(6)]
359
(18)
1,604
(28)
Employees on sea duty
Total
Note:
The number of employees includes those loaned to other companies and excludes those loaned to the
Company from other companies.
39
(10) State of Vessels of the Consolidated (as of March 31, 2011)
Business Segments
Type of vessel
Segment
Container ships (including
semi-container ships)
Liner Trade
Owned
Bulk carriers (Handysize)
100
4,250,258
5,225,026
8
168,377
10
173,657
Total
18
342,034
Owned
37
6,737,515
Chartered
72
13,482,457
109
20,219,972
Owned
38
3,204,562
Chartered
51
4,132,245
Total
89
7,336,807
Owned
48
1,933,377
Chartered
98
4,333,908
Total
Wood Chip carriers
Bulk Shipping
Car carriers
146
6,267,285
Owned
14
629,956
Chartered
43
2,227,550
Total
57
2,857,506
Owned
31
536,915
Chartered
87
1,533,412
118
2,070,327
52
8,961,277
Total
Owned
Tankers
LNG carriers
Cruises
Chartered
34
4,160,514
Total
86
13,121,791
Owned
26
1,904,788
3
228,211
Total
29
2,132,999
Owned
19
200,011
Chartered
28
395,120
Total
Chartered
Other
Cruise ships
47
595,131
Owned
2
13,417
Chartered
1
8,160
Total
3
21,577
300
25,264,963
Owned
Total
Note:
974,768
125
Total
Bulk carriers (Panamax)
25
Chartered
Chartered
Bulk carriers (Capesize)
K/T (dwt)
Total
Owned
Other
Number of
vessels
Chartered
527
34,925,492
Total
827
60,190,455
The number of vessels in possession includes shared vessels; their deadweight tonnages include the
weight of other owners’ portions.
40
(11) Status of Major Business Combination (as of March 31, 2011)
1)
Changes and results of business combinations
NYK Group is engaged in business in eight segments consisting of liner trade and bulk shipping as its
core businesses, logistics, terminal and harbor transport, cruises, air cargo transportation, real estate, and
other business services.
NYK Group has 687 consolidated subsidiaries and 112 equity-method companies as of March 31,
2011.
For business progress and results of NYK Group, see the preceding “Business Progress and Results”
(on pages 32-35), “Major Corporate Realignment of the NYK Group” (on page 36) and “Financial Position
and Results of Operation” (on page 36-38).
2)
Status of principal subsidiaries
Name of company
NYK GLOBAL BULK CORP.
NIPPON CARGO AIRLINES
CO., LTD.
HACHIUMA STEAMSHIP
CO., LTD.
NYK-HINODE LINE, LTD.
Common Stock
¥4,150 million
¥1,246 million
NYK GROUP EUROPE
LTD.
NYK GROUP SOUTH ASIA
PTE. LTD.
NYK GROUP OCEANIA
PTY. LTD.
ADAGIO MARITIMA S.A.
And 428 other vessel
owning companies
74.72 Marine transportation business
¥2,100 million
NYK TRADING CORP.
NYK GROUP AMERICAS
INC.
100.00 Air cargo transportation business
¥500 million
¥2,000 million
Main Operations
¥50,574 million
NYK CRUISES CO., LTD.
YUSEN LOGISTICS CO.,
LTD.
UNI-X CORP.
NYK’s Share
of Voting
Rights (%)
Ownership and operation of cruise
100.00
ships
Sales of petrochemical products,
78.20
etc.
¥4,301 million
59.80 Freight forwarding business, etc.
¥934 million
80.18 Harbor transportation business
Controlling subsidiaries engage in
marine transportation and global
100.00
logistics businesses, etc. in North
and South American area
100.00 marine transportation and global
logistics businesses, etc. in Europe
100.00
logistics businesses, etc. in
Southern Asian area
100.00
logistics businesses, etc. in
Oceania areas
US$4 million
£81.49 million
SP$12.8 million
A$8.4million
US$86.577 million,
(total of 106 companies)
100.00
¥21,358 million
(all companies)
Vessel owning and chartering
(total of 323 companies)
Notes: 1. Percentage of voting rights includes indirect holdings.
2. ADAGIO MARITIMA S.A. and 428 other vessel owning companies are consolidated subsidiaries
that are fully owned by the NYK Group and are incorporated in Panama, Singapore and Liberia, etc.
for the purpose of owning and chartering vessels. Vessels time-chartered from the said companies
by the NYK Group constitute an important part of the fleet of vessels operated by the NYK Group.
41
3)
Status of principal affiliates
Name of company
Common Stock
NYK’s Share of
Voting Rights (%)
¥10,300 million
18.94
Marine transportation business
¥2,850 million
30.03
Marine transportation business
NS UNITED KAIUN KAISHA,
LTD.
KYOEI TANKER CO., LTD.
Note:
Main Operations
Percentage of voting rights includes indirect holdings
(12) Other significant matters on operations for NYK Group
1) The NIPPON CARGO AIRLINES CO., LTD.(NCA), wholly owned subsidiary, has been under
investigation by the European and Korean authorities on suspicion of forming a price cartel in the air
cargo transport service. With regard to the European investigation, the subsidiary received a
statement notifying the end of the investigation in November 2010 from the European Commission.
Meanwhile, in November 2010, NCA received a notification from the Korean Fair Trade Commission of
a charge to be levied as a violation of the Korean Fair Trading Law. However, NCA finds this charge to
be partially unacceptable and filed an appeal for its cancellation in December 2010.
2) NYK’s consolidated subsidiary YUSEN LOGISTICS CO., LTD., received a cease and desist order and
an order for payment of administrative surcharge from the Japan Fair Trade Commission (“JFTC”) in
March 2009, for alleged violations of Article 3 of the Act on Prohibition of Private Monopolization and
Maintenance of Fair Trade (prohibition of unreasonable restraints on trade) related to international air
freight forwarding business. Following the notice, the Company began to take action against the two
orders in April 2009 requesting the JFTC for the commencement of hearings. Although these
proceedings were completed in July 2010, a decision on the matter has not yet been reached.
2. Status of Shares (as of March 31, 2011)
(1) Total number of shares authorized to be issued
2,983,550,000 shares
(2) Number of shares issued
1,696,922,274 shares
Note:
The numbers exclude 3,628,714 shares of treasury stock.
(3) Number of shareholders
148,063 persons
(decreased by 4,633 from the previous year)
42
(4) Major shareholders (Top 10)
Capital contribution to the
Company
Name
Number of
Ratio of
shares held
shareholding
(in thousands)
(%)
THE MASTER TRUST BANK OF JAPAN, LTD. (Trust account)
118,146
6.96
JAPAN TRUSTEE SERVICES BANK, LTD. (Trust account)
100,624
5.93
THE MASTER TRUST BANK OF JAPAN, LTD. (MITSUBISHI HEAVY
INDUSTRIES, LTD. ACCOUNT (RETIREMENT ALLOWANCE
TRUSTEE ACCOUNT))
54,717
3.22
TOKIO MARINE & NICHIDO FIRE INSURANCE CO., LTD.
51,283
3.02
JAPAN TRUSTEE SERVICES BANK, LTD. (Trust account 9)
46,444
2.74
THE BANK OF NEW YORK MELLON AS DEPOSITORY BANK FOR
DEPOSITORY RECEIPT HOLDERS
36,787
2.17
MEIJI YASUDA LIFE INSURANCE CO.
34,973
2.06
SSBT OD05 OMNIBUS ACCOUNT – TREATY CLIENTS
30,409
1.79
MIZUHO CORPORATE BANK, LTD.
22,867
1.35
NATIONAL MUTUAL INSURANCE FEDERATION OF
AGRICULTURAL COOPERATIVES
21,459
1.26
Note: Investment ratio was computed excluding total treasury stock of 3,628,714 shares.
(5) Treasury Stock
Shares held as of the end of the preceding term
Common Stock
2,686,920 (shares)
Common Stock
160,983 (shares)
Shares purchased in the current term
Less-than-One-Unit Share Purchased
Acquisition of Shares of Lost Shareholders
(as of July 29, 2010)
Total price of acquisition
Common Stock
Total price of acquisition
56,771,256
(yen)
811,115 (shares)
290,379,170
(yen)
Shares disposed in the current term
Common Stock
Less-than-One-Unit Share Sold
Total price of disposition
Shares lapsed in the current term
Shares held as of the end of the fiscal term
30,304 (shares)
10,733,166
(yen)
None
Common Stock
43
3,628,714 (shares)
3. Status of Stock Acquisition Rights, etc. (as of March 31, 2011)
Following is the status as of the end of this fiscal year of corporate bonds with stock acquisition rights
issued under the Corporation Law.
Name
Date of resolution of issuance
Euro Yen Contingent Conversion Zero Coupon
Convertible Bonds with Acquisition Rights due 2026
August 31, 2006
Date of issuance
September 20, 2006
Number of stock acquisition rights
11,000 units
Class and number of shares subject to stock
acquisition rights
Common stock
70,697,722 shares
Amount to be paid upon exercise of stock
acquisition rights (exercise price)
¥777.96 per share
Amount to be capitalized upon exercise of stock
acquisition rights
¥388.98 per share
Exercise period of stock acquisition rights
October 4, 2006 to September 10, 2026
44
4. Executives of NYK
(1) Directors and Corporate Auditors (incumbents from June 24, 2010 to March 31, 2011)
Position
Chairman,
Chairman Corporate
Officer
Director,
Executive
Vice-Chairman
Corporate Officer
President,
President Corporate
Officer
Representative
Director,
Senior Managing
Corporate Officer
Name
Koji Miyahara
Yasushi Yamawaki
Responsibilities and significant concurrent positions
President of The Japanese Shipowners' Association,
Chairman of Japan Federation of Freight Industries
Outside Corporate Auditor of AOC Holdings, Inc
Yasumi Kudo
Chief Executive of Bulk/Energy Resources
Transportation Headquarters
Masahiro Kato
Chief Executive of Automotive Transportation
Headquarters, Chief Executive of Cruise Headquarters,
Energy Division
Hidenori Hono
Dry Bulk Transportation Division
Tadaaki Naito
Chief Executive of Management Planning Headquarters
Masamichi Morooka
Naoya Tazawa
Chief Executive of Technical Headquarters
Chief Executive of General Affairs/CSR Headquarters
Toshinori Yamashita Chief Executive of Global Logistics Headquarters
Director,
Managing Corporate
Officer
Outside Director
(part-time,
Independent Director)
Corporate Auditor
(full-time)
Outside Corporate
Auditor (part-time,
Independent Auditor)
Hiroshi Hiramatsu
Kenji Mizushima
Yukio Okamoto
Yuri Okina
Accounting and Finance Division
Liner Trade Division
President of OKAMOTO ASSOCIATES, INC., Outside
Director of MITSUBISHI MATERIAL CORP., Outside
Corporate Auditor of MITSUBISHI MOTORS CORP.
Counselor of THE JAPAN RESEARCH INSTITUTE,
LTD., Outside Director of the Enterprise Turnaround
Initiative Corporation of Japan (ETIC)
Yukio Ozawa
Naoki Takahata
Hidehiko Haru
Takaji Kunimatsu
Outside Corporate Auditor of JX Holdings, Inc.
Chairman of HEM-NET:EMERGENCY MEDICAL
NETWORK OF HELICOPTER AND HOSPITAL
Notes: 1. Of Directors, Mr. Yukio Okamoto and Ms. Yuri Okina are Outside Directors as stipulated in Article 2,
Item 15, of the Corporation Law.
2. Of Corporate Auditors, Messrs. Hidehiko Haru and Takaji Kunimatsu are Outside Corporate Auditors
as stipulated in Article 2, Item 16, of the Corporation Law.
3. Of significant concurrent positions of Outside Directors and Corporate Auditors, the Company has
business relations with MITSUBISHI MATERIALS CORP. such as coal transport transactions, with
MITSUBISHI MOTORS CORP. such as automobile transport transactions, and with JX Nippon Oil &
45
Energy Corporation, a wholly-owned subsidiary of JX Holdings, Inc., such as marine fuel oil and
tanker ship leasing transactions. The Company has no particularly notable business relations with
the other significant concurrent positions.
4. Of Corporate Auditors, Messrs. Yukio Ozawa and Naoki Takahata served as Directors in charge of
financial affairs of NYK and have considerable expertise in finance and accounting. Corporate
Auditor, Mr. Hidehiko Haru served as a Director in charge of financial affairs of the other listed
company for many years and has considerable expertise in finance and accounting.
5. Retired Directors and a newly appointed Director during the current fiscal year are as follows:
<Retirement>
Director, Board
Counselor
Takao Kusakari
Director
Hiromitsu
Kuramoto
Director
Shinji Kobayashi
Director, Managing
Hiroshi Hattori
Corporate Officer
(Retired at the expiration of his term in office on Jun. 23,
2010)
2010)
2010)
2010)
<New appointment>
Toshinori Yamashita
Corporate Officer
(Appointed on Jun. 23, 2010)
6. As of April 1, 2011, Executive Corporate Officers who also serve as Directors are relocated as
follows:
As of March 31, 2011
After relocation
Director, Executive Vice-Chairman
Yasushi Yamawaki
Director
Corporate Officer
7. The Company filed Mr. Yukio Okamoto, Ms. Yuri Okina, Mr. Hidehiko Haru and Mr. Takaji
Kunimatsu as its Independent Directors/Auditors with Tokyo and other Japanese stock exchanges.
Listed companies are required to secure the Independent Directors/Auditors who play roles in
safeguarding general investors.
(2) Corporate Officers (For reference) (as of April 1, 2011)
Position
Name
Chairman,
Chairman Corporate Officer
Koji Miyahara
President,
President Corporate Officer
Yasumi Kudo
Masahiro Kato
Hidenori Hono
Tadaaki Naito
Representative Director,
Senior Managing Corporate Officer
Masamichi Morooka
Naoya Tazawa
Toshinori Yamashita
Hiroshi Hiramatsu
Director,
Kenji Mizushima
Hiroshi Hattori
46
Position
Name
Fukashi Sakamoto
Hitoshi Nagasawa
Koichi Akamine
Takashi Abe
Yasuyuki Usui
Takuji Nakai
Hidetoshi Maruyama
Yoko Wasaki
Yasuo Tanaka
Masahiro Samitsu
Koichi Chikaraishi
Kunihiko Miyoshi
Corporate Officer
Yuji Isoda
Shunichi Kusunose
Kenichi Miki
Hitoshi Oshika
Kazuo Ogasawara
Chak Kwok Wai
*Keizo Nagai
*Tsutomu Shoji
*Yoshiyuki Yoshida
Notes: 1. Corporate Officers retired as of March 31, 2011 are as follows:
Yasushi Yamawaki, Takatake Naraoka, Mikitoshi Kai, Takao Ito, and Naoyuki Ohno
2. The asterisks (*) indicate newly appointed Corporate Officers on April 1, 2011.
47
(3) Remuneration Paid to Executives
Category
Number of
persons
remunerated
Yearly
remuneration
Bonus
Total Amount of
remuneration
paid
Directors
[Outside Directors out of
above]
17
[2]
¥568 million
[¥38 million]
¥143 million
[-]
¥711 million
[¥38 million]
Corporate Auditors
[Outside Corporate Auditors
out of above]
4
[2]
¥90 million
[¥24 million]
-
¥90 million
[¥24 million]
Total
[Outside Executives out of
above]
21
[4]
¥658 million
[¥62 million]
¥143 million
[-]
¥801 million
[¥62 million]
Notes: 1. Amount of remuneration payment to the Directors (excluding the Outside Directors) includes the
remuneration to four Directors who retired during the fiscal year.
2. The bonus amount for the Directors is planned to be proposed as Directors’ bonuses in the 124th
Ordinary General Meeting of Shareholders.
3. The proposal to pay retirement benefits for termination resulting from the abolition of the retirement
benefits scheme for directors and corporate auditors was approved by the Shareholders at the 118th
Ordinary General Meeting of Shareholders held on June 28, 2005. Based on the resolution, the
Company paid a ¥304 million retirement benefit for termination to two Directors who retired during
the fiscal year. The retirement benefit is not included in the “Total Amount of remuneration paid”
shown above.
(4) Status of Major Activities of Outside Executives
Name
Director
(Part-time, Outside Director, Independent
Director)
Yukio Okamoto
Director
(Part-time, Outside Director, Independent
Director)
Yuri Okina
Corporate Auditor
(Part-time, Outside Corporate Auditor,
Hidehiko Haru
Corporate Auditor
(Part-time, Outside Corporate Auditor,
Takaji Kunimatsu
(Appointed on Mar. 13, 2008)
Status of Attendance and Stating of Opinions
Attended 13 out of 14 meetings of the Board of Directors
held during this fiscal year (93% of attendance rate), and
when necessary made statements mainly based on his
extensive knowledge and insight as an expert of
international affairs.
Attended 13 out of 14 meetings of the Board of Directors
held during this fiscal year (93% of attendance rate), and
when necessary made statements mainly based on her
extensive knowledge and insight as an expert of economic
and financial issues.
Attended all the 14 meetings of the Board of Directors
(100% of attendance rate) and all the 15 meetings of the
Board of Corporate Auditors held during this fiscal year, and
when necessary made statements mainly from his
considerable experience in corporate management and
financial policies, etc.
Attended all the 14 meetings of Board of Directors (100% of
attendance rate) and all the 15 meetings of the Board of
Corporate Auditors held during this fiscal year, and when
necessary made statements mainly from his considerable
experience in government service.
48
(5) Liability Limitation Agreement with Outside Executives
The Company has signed agreements with all the Outside Executives respectively limiting their liability
for damages in terms of Article 423, Paragraph 1 of the Corporation Law. Based on these agreements,
liability for damages is limited to predetermined amount of ¥20 million or more or the minimum amount
prescribed by law, whichever is higher.
5. Independent Auditor
(1) Name of Independent Auditor
Deloitte Touche Tohmatsu LLC
(2) Compensation paid to Independent Auditor for the fiscal year under review
Category
Total amount paid
Compensation paid for the fiscal year under review
¥172 million
Total of cash and other financial profits payable by the Company and its
subsidiaries to the Independent Auditor
¥325 million
Notes: 1. The audit contract between NYK and the Independent Auditor does not separate the compensation
for the audit based on the Corporation Law from the compensation for the audit based on the
Financial Instruments and Exchange Act. Therefore, the aforementioned amount includes the
compensation for the audit, etc. based on the Financial Instruments and Exchange Act.
2. The Company pays the Independent Auditor fees for advice, instruction, etc. that related to
International Financial Reporting Standards (IFRS), which are services other than the services as
stipulated in Article 2, Paragraph 1 of the Certified Public Accountants Law (non-audit service).
3. Among our principal subsidiaries, NYK-HINODE LINE, LTD., UNI-X CORP., NYK GROUP
AMERICAS INC., NYK GROUP EUROPE LTD., NYK GROUP SOUTH ASIA PTE. LTD. and NYK
GROUP OCEANIA PTY. LTD. undergo audits of statutory documents by CPAs or audit corporations
other than the Independent Auditor of NYK (including persons who have qualifications equivalent to
these qualifications in foreign countries) (limited to audit pursuant to the Corporation Law or Financial
Instruments and Exchange Act (including foreign laws equivalent to these laws))
(3) Company Policy regarding dismissal or decision not to reappoint the Independent
Auditor
Article 340 of the Corporation Law stipulates that the Board of Corporate Auditors shall be entitled to
dismiss the Independent Auditor for reasons stipulated therein. In addition, when it is reasonably
recognized that the Independent Auditor is no longer able to execute its duties in an appropriate manner,
NYK, subject to prior consent of, or request from, the Board of Corporate Auditors, will offer a resolution to
the Shareholders’ Meeting to the effect of dismissal of, or a decision not to reappoint, the Independent
Auditor.
49
6. Matters on Structures to Ensure Proper Execution of Business Operations
The Company adopted a new resolution with respect to structures to ensure proper execution of
business operations based on the Corporation Law at the meeting of Board of Directors on March 31,
2011 as follows.
► Outlines of Resolutions of Board of Directors
(1) Directors execute duties in compliance with the laws and Articles of Incorporation in accordance
with the clear allocation of authority and procedures based on in-house rules. The Company
recognizes that fulfillment of social responsibility is fundamental to management, and has
determined the NYK Group Mission Statement, the NYK Line Business Credo and Code of
Conduct. Directors have adopted NYK Group Value as conduct guidelines for executing them, and
take a leading role in observing these conduct guidelines. In addition, in order to ensure
compliance with the laws and proper execution of business by the Directors, the Company has
established in-house systems such as the Internal Control Committee and Compliance Committee,
etc.
(2) Documents and other information relating to execution of duties by the Directors are stored and
managed properly according to in-house rules.
(3) The Company has established sections dedicated to maintaining awareness of company-wide
risks. These sections seek to identify and evaluate risks on a regular basis, to implement proper
countermeasures and to raise employees’ awareness of risk management by educational
methods such as e-learning based on an internal regulation regarding management of danger of a
loss. The Company has formulated a basic plan to ensure business continuity and the outline for
the implementation of the plan, with the view of coping with large-scale disasters. In addition, the
Company performs thorough risk management relating to safe operation of vessels and
environmental preservation.
(4) Directors of the Company are performing efficient duty execution by clear distribution of authorities
and decision-making rules, and activation of electronic-decision system. Moreover, the Board of
Directors makes a resolution on issues stipulated by laws or ordinances or by the Article of
Incorporation and important management issues.
(5) In order to ensure the conformance of duties by employees of the Company with laws,
Compliance Committee meetings are held on a regular basis and Compliance Total Check Month
has been implemented. A consultation channel and an internal report channel have been installed,
and Compliance Training has been held regularly. With the object of preventing the violation of
global-based antitrust laws, the Company has established a section which specializes in the
promotion of a variety of educational activities for the Company and Group companies.
(6) The Company applies NYK Group Mission Statement and Group Value to the overall group. In
order to ensure proper operations by the NYK Group, the Company will instruct each group
company further preparation for an internal control system. The Company has established a
committee which controls global group management, aiming at ensuring sound and efficiency
improvements of group companies. A representative director serves as the chairman of the
committee. Additionally, an internal audit division has been established and internal audits are
being carried out for the Company and group companies.
(7) The Company has established a Corporate Auditor’s Staff Chamber as an assistant for Corporate
Auditors, and allocates full-time staff. Personnel evaluation of full-time staff is performed by
full-time Corporate Auditors.
(8) Board of Directors has ensured an environment in which the Corporate Auditors can conduct
effective audits. Corporate Auditors participated in Board of Directors meetings and other major
meetings, peruse and examine important documents relating to business execution, and
implement proper auditing.
(9) Corporate Auditors exchange information with Independent Auditor and internal audit division,
making efforts to collaborate in auditing, and ensure systems to improve the effectiveness and
efficiency of each audit.
50
(10) The Company has established an internal control system designed to ensure the properness of
financial statements under the Financial Instruments and Exchange Act, and conducts
effectiveness assessment on its operations.
(11) The Company consolidates a system for the elimination of antisocial forces and supports efforts to
sever all ties to these forces. We have an in-house post dedicated to providing consultation
services, with the intention of collecting and disclosing information on anti-social forces
appropriately, through closer coordination with external specialized institutions. We also view the
issue as one of the most important compliance matters and conduct continuous activities to
enhance knowledge and raise awareness.
7. Basic policy regarding the modality of those who control the Company’s financial and
business policy decisions
(1) Outline of the content of the Basic Policy
The NYK Group conducts all its daily corporate activity based on the “NYK Group Mission Statement”,
which is: “Through safe and dependable monohakobi (transport), we contribute to the betterment of
societies throughout the world as a comprehensive global-logistics enterprise offering ocean, land and air
transportation”. Further, the NYK Group has been working to give back to society from our management
resources and profits and to deepen the CSR management, for example by actively enforcing the
environmental measures and safety programs that form the foundation of our “comprehensive
global-logistics” concept. By continuing to develop as a comprehensive global-logistics enterprise group
having a strong commitment to CSR management, the Group aims to maintain and increase its corporate
value and common interests of shareholders.
The Company believes that it is necessary for persons or entities who control the Company’s financial
and business policy, to do so in accordance with the corporate philosophy of the Group. In this way, they
can be leaders who enable the NYK Group to maintain and increase its corporate value and common
interests of shareholders.
In light of this, we have no intention of completely objecting to a Large-scale Purchase by a specific
party, on the condition that such a purchase is deemed to contribute to maintaining and increasing its
corporate value and common interests of shareholders in accordance with the corporate philosophy of the
Group. We also value the idea that the final decision on such a purchase shall reflect the entire opinions of
our shareholders on this matter, given that sufficient time and information is provided. However, we cannot
deny that among Large-scale Purchase, there are those (a) where the time and/or information needed for
shareholders to evaluate the content, etc. of the purchase and for the board of directors of the Company
to offer an alternative proposal, is not provided, (b) that are abusive because the Company’s corporate
value and common interests of shareholders have not been considered but only the benefit to the
purchasing party itself has, and (c) where there is a risk of damage to the Company’s corporate value and
common interests of shareholders, such as cases where the purchase is one whose conditions of
purchase, etc. are unsuitable considering the intrinsic value of the Company.
In view of the NYK Group’s corporate philosophy, the Company believes that the party making these
kind of purchase action is not a party who enables the NYK Group to maintain and increase its corporate
value and common interests of shareholders, thus not an appropriate party who controls the Company’s
financial and business policy.
(2) Outline of special measures that will help achieve the Basic Policy
The NYK Group proceeded its 3-year medium-term management plan, “New Horizon 2010” starting
from fiscal 2008 in accordance with the Group’s corporate principles outlined in (1) above. Within the
severe economic climate, the NYK Group revised the numerical targets of this plan twice, and in January
2009 the Group embarked on a 2-year Emergency Structural Reform Project “Yosoro”*. Through this plan,
the Company carried out the implementation of bold structural reforms based on optimization of fleet scale,
cost reductions and a drastic review of profit structures and sales systems, aiming to develop a system
which is able to accommodate dramatically changed external conditions and to develop a medium- to
long-term growth strategy.
51
The Company has appointed Corporate Officers to activate the Board of the Company by reducing the
number of Directors. In 2008, the Company appointed two new Outside Directors with a high level of
independence and reduced the Directors’ term of office to one year, aiming to establish highly transparent
corporate management and enhance the Board of Directors’ management monitoring function. Further, a
notice of the general meeting of shareholders is sent three weeks before the meeting is held, providing
our shareholders with sufficient time to consider proposals.
In addition, the Company maintains the Basic Policy of continuously making stable dividend payments,
based on thorough consideration of payout ratio, the Company’s forecasted business performance, etc.
We also consider requirements for future business development, such as the expansion and improvement
not only of our traditional business of marine transport but also of other businesses, and we bear in mind
the level of internal reserves needed to withstand fluctuations in market conditions.
*Please see note in the middle of page 28.
(3) Outline of measures to prevent the control of the Company’s financial and business
policy decisions by inappropriate persons or entities in light of the Basic Policy
As a specific approach to prevent the control of the Company’s financial and business policy decisions
by, inappropriate persons or entities in light of the Basic Policy described in (1), at the meeting of the
Board of Directors held on March 27, 2008, the Company approved the adoption of “Measures for
Large-scale Purchases of NYK Share Certificates for the Purpose of Securing and Enhancing Corporate
Value and the Common Interests of Shareholders (Takeover Defense Measures)” (hereinafter referred to
as the “Plan”). The Plan was approved by the shareholders of the Company at the 121st Ordinary General
Meeting of Shareholders of the Company held on June 24, 2008 (hereinafter referred to as the “121st
Ordinary General Meeting of Shareholders”.
The outline of the Plan is as follows:
1)
Large-scale Purchases to which the Plan is applied
The procedures provided by the Plan apply to each of following purchases, etc. which will be carried
out without the consent of the Board (such purchases hereinafter referred to as a “Large-scale Purchase”
and the persons or entities carrying out the Large-scale Purchase shall be hereinafter referred to as the
“Large-scale Purchaser”).
a. Any Purchase, etc., with which Holding Ratio of the Share Certificates, etc. issued by the Company
(the “NYK Share Certificates”) of the Holder and Joint Holders, etc. becomes 20% or more.
b. Any Tender Offer, with which the sum of Ownership Ratio of the Share Certificates, etc. with
respect to the NYK Share Certificates of the person or entity launching the Tender Offer and that of
the Special Related Parties, etc. becomes 20% or more.
2)
Request to Large-scale Purchaser for Large-scale Purchase Information
A Large-scale Purchaser is required to submit to representative director of the Company a letter of
intention (the “Letter of Intention”) prior to undertaking the Large-scale Purchase in Japanese in the format
determined by the Company in which the Large-scale Purchaser is requested to disclose an outline of the
proposed Large-scale Purchase, and to state that it will comply with the procedures provided by the Plan.
Upon receipt of the Letter of Intention, the Board will request the Large-scale Purchaser to provide the
information that is necessary and sufficient for the shareholders’ determination, and for the Board and the
Independent Committee to form an opinion (the “Large-scale Purchase Information”), and the Large-scale
Purchaser is required to submit documentation setting forth the Large-scale Purchase Information (the
“Explanation of Purchase”).
3)
Recommendation by the Independent Committee
Upon receipt of the Explanation of Purchase from the Large-scale Purchaser, the Board will
immediately submit the document to the Independent Committee, which consists of at least three
members of the Outside Directors and outside experts, and consult with the Independent Committee as to
52
whether or not it is appropriate to implement the countermeasures against the Large-scale Purchase and
other matters. Currently, Outside Directors Mr. Yukio Okamoto and Ms. Yuri Okina, and Mr. Seigo
Hirayama, who is an attorney and former President of the Japan Federation of Bar Associations, have
been appointed by the Company as members of the Committee.
In the case where the Independent Committee determines that (i) the Large-scale Purchaser is a
Large-scale Purchaser who does not comply with the procedures provided in the Plan (the “Procedurally
Non-compliant Purchaser”), (ii) the Large-scale Purchaser is an Abusive Acquirer as defined in the Plan,
or (iii) there is a risk that the Large-scale Purchase will damage the corporate value or the common
interests of the shareholders of the NYK Group, then the Independent Committee shall submit the report,
“We recommend the implementation of countermeasures.” (the “Implementation Recommendation”). In
the case where the Independent Committee determines that there is not a risk that the Large-scale
Purchaser will damage the corporate value or the common interests of the shareholders of the NYK
Group, then the Independent Committee shall submit the report, “We recommend that countermeasures
not be implemented”. (the “Non-implementation Recommendation”). The Independent Committee may
submit neither an Implementation Recommendation nor a Non-implementation Recommendation and
may give any other report that the Independent Committee determines appropriate. The Board shall give
the utmost respect to any of the above-mentioned report.
The Independent Committee shall prepare the report within sixty (60) business days as a general rule
from the date on which the submission of the Explanation of Purchase is completed.
4)
Implementation of Countermeasures
a. When the Large-scale Purchaser is a Procedurally Non-compliant Purchaser and thus the
Independent Committee recommends the implementation of countermeasures, the Board may
adopt a resolution to implement countermeasures without obtaining a resolution of the general
meeting of shareholders.
b. When the Independent Committee makes an Implementation Recommendation following a
determination that the Large-scale Purchaser is an Abusive Acquirer, the Board may, as a general
rule, adopt a resolution to implement countermeasures without obtaining a resolution of the general
meeting of shareholders.
c. When the Independent Committee makes an Implementation Recommendation following a
determination that the Large-scale Purchase poses a risk of harm to the corporate value or the
common interests of the shareholders of the NYK Group, the Board may convene a general
meeting of shareholders and upon obtaining a resolution of the general meeting of shareholders to
approve the implementation of countermeasures, may adopt a resolution to implement
countermeasures against the Large-scale Purchase.
d. When the Board determines it necessary, it may adopt a resolution not to implement
countermeasures against the Large-scale Purchaser. When the Independent Committee makes a
Non-implementation Recommendation, the Board shall give utmost respect to such
recommendation.
In addition, after taking into consideration the details of the Large-scale Purchase and the
circumstances where it is necessary to determine whether or not to implement countermeasures, if the
Board believes it appropriate, it may convene a general meeting of shareholders to confirm their opinions.
The Board shall choose a countermeasure, as against the Large-scale Purchase, which the Board
determines the most appropriate method as of that timing, taking into consideration the opinion of the
Independent Committee, such as the Allotment of Stock Acquisition Rights (Without Consideration).
5)
Effective Period of Plan
The effective period of the Plan is until the time of the conclusion of the ordinary general meeting of
shareholders relating to the last business year ending within three years following the conclusion of the
121st Ordinary General Meeting of Shareholders.
53
(4) The Board Decision and the Reasons regarding the measures stated in (2)
As the primary purpose of any of the measures stated in (2) is to secure and enhance the corporate
value and the common interests of the shareholders of the NYK Group, the Board of the Company
believes that they are following the Basic Policy stated in (1) and do not damage the common interests of
shareholders, and that they do not have as their purpose the maintenance of the position of the current
executives.
(5) The Board Decision and the Reasons regarding the measures stated in (3)
The Board of the Company believes that the measures stated in (3) are following Basic Policy stated in
(1), and the Plan does not damage the common interests of shareholders, and that it does not have as its
purpose the maintenance of the position of the current executives. The reasons are stated below:
a. This Plan has been adopted for the purpose of securing and enhancing the corporate value and the
common interests of shareholders of the NYK Group.
b. The Plan satisfies any of the principles set forth in the “Guidelines Concerning Takeover Defensive
Measures for Securing and Ensuring Corporate Value and the Common Interests of Shareholders”
announced by the Ministry of Economy, Trade and Industry and the Ministry of Justice on May 27,
2005.
c. The Plan places importance on the will of the shareholders as it has been approved by the
shareholders at the 121st Ordinary General Meeting of Shareholders.
d. The Independent Committee has been established to deliberate and submit a recommendation or
other report to the Board on whether or not it is appropriate to implement the countermeasures
against the Large-scale Purchase. The Board shall give the utmost respect to recommendations of
the Independent Committee.
e. The Company shall publicly announce the submission of the Letter of Intention or the Explanation
of Purchase from the Large-scale Purchaser and, to the extent found appropriate, the contents of
the Independent Committee’s report at an appropriate time, so that the transparency is ensured in
execution of the Plan.
f. Requirements for implementing the countermeasures are reasonable, clear and strict.
g. The Plan is neither a so-called “dead-hand”-type takeover defense measure (i.e., a takeover
defensive measure the implementation of which cannot be prevented even if a majority of the
constituent members of the Board is replaced) nor a “slow-hand”-type takeover defensive measure
(i.e., a takeover defensive measure which requires the passage of time to prevent its
implementation because it is not possible to replace all of the constituent members of the Board at
one time).
This Plan is effective until the closing of the 124th Ordinary General Meeting of Shareholders
(hereinafter, “the Ordinary General Meeting of Shareholders”), scheduled for June 23, 2011. Therefore,
the Board of Directors' meeting held on May 13, 2011 decided to revise some sections of its content,
taking into account factors such as practical developments on measures to prevent possible
takeovers after the introduction of the Plan. However, the revision will be effective on the condition of
approval by the shareholders at the 124th Ordinary General Meeting of Shareholders, where it will be
presented as a proposal on the meeting agenda.
54
Consolidated Financial Statements
1. Consolidated Balance Sheet (As of March 31, 2011)
Item
Assets
Current assets
Cash and deposits
Notes and operating accounts
receivable-trade
Short-term investment securities
Inventories
Deferred and prepaid expenses
Deferred tax assets
Other
Allowance for doubtful accounts
Noncurrent assets
Vessels, property, plant and
equipment
Amount
562,457
152,568
182,276
45,619
53,734
53,342
15,061
62,526
(2,672)
1,562,429
1,150,901
Vessels, net
Buildings and structures, net
Aircraft, net
Machinery, equipment and
vehicles, net
Equipment, net
Land
707,819
75,561
4,271
Construction in progress
262,227
Other, net
Intangible assets
Leasehold right
Software
Goodwill
Other
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
4,244
32,225
2,974
6,797
19,064
3,388
379,302
270,301
18,575
10,029
Other
Allowance for doubtful
accounts
Deferred assets
Total Assets
Item
Amount
Liabilities
Current liabilities
Notes and operating accounts
payable-trade
Short-term loans payable
Income taxes payable
Deferred tax liabilities
Advances received
Provision for bonuses
Provision for directors’ bonuses
Other
Noncurrent liabilities
Bonds payable
Long-term loans payable
Provision for retirement benefits
401,728
157,835
97,641
10,680
873
42,096
8,210
438
83,952
996,989
251,059
627,054
10,070
15,294
29,361
Provision for directors’ retirement
benefits
2,077
5,647
61,768
Provision for periodic dry docking
of vessels
18,473
Provision for losses related to
antitrust law
Other
Total Liabilities
71,230
1,398,718
Net Assets
Shareholders’ capital
Common stock
Capital surplus
Retained earnings
Treasury stock
770,349
144,319
155,658
472,277
(1,905)
Accumulated other comprehensive
income
(85,721)
Valuation difference on
available-for-sale securities
Deferred gains or losses on
hedges
84,083
(3,686)
1,925
2,126,812
1,728
Foreign currency translation
adjustments
Minority interests
Total net assets
Total Liabilities and Net Assets
55
24,846
(43,182)
(67,385)
43,466
728,094
2,126,812
2. Consolidated Statement of Income (From April 1, 2010 to March 31, 2011)
Amount
Item
Revenues
1,929,169
Cost and expenses
1,622,045
Gross profit
307,124
Selling, general and administrative expenses
184,777
Operating income
122,346
Non-operating income
Interest income
1,973
Dividends income
4,105
Equity in earning of unconsolidated subsidiaries and
affiliates
6,387
Other
5,433
17,900
Non-operating expenses
Interest expenses
16,826
Foreign exchange losses
4,865
Other
4,389
Recurring profit
26,081
114,165
Extraordinary income
Gain on sales of noncurrent assets
12,091
Gain on sales of investment securities
7,217
Reversal of provision for losses related to antitrust law
3,883
Other
7,766
30,959
Extraordinary loss
Loss on sales of noncurrent assets
2,801
Loss on valuation of investment securities
9,470
Loss on cancellation of chartered vessels
8,019
Other
11,646
Income before income taxes and minority interests
31,938
113,187
Income taxes-current
15,861
Income taxes-deferred
15,286
31,148
Income before minority interests
82,038
Minority interests in net income
3,503
Net income
78,535
56
3. Statement of Changes in Consolidated Statement of Net Assets (From April 1, 2010 to March 31, 2011)
Shareholders’ capital
Item
Balance as of March 31, 2010
Changes of items during the
period
Dividends from surplus
Net income
Purchase of treasury stock
Disposal of treasury stock
Adjustment due to change in
the fiscal periods of
consolidated subsidiaries
Change of scope of
consolidation
Change of scope of equity
method
Merger in affiliates accounted
for by equity method
Other
Net change of items other than
shareholders’ capital
Total change of items during the
period
Balance as of March 31, 2011
Common
stock
144,319
Capital
surplus
155,663
Retained
earnings
Treasury
stock
Total
shareholders’
capital
Accumulated other comprehensive income
Total
Valuation
difference Deferred
Foreign Accumula- Minority
gains or
currency ted other interests
on
available- losses on translation comprehehedges adjustments
nsive
for-sale
income
securities
(45,192)
42,162
30,007
(30,155)
(45,044)
Total net
assets
(1,576)
706,424
(347)
16
(13,577)
78,535
(347)
10
(13,577)
78,535
(347)
10
404
404
404
(76)
(76)
(76)
(480)
(480)
(480)
(832)
(832)
(832)
408,017
(13,577)
78,535
(5)
286
287
1
703,394
287
(5,161)
(13,027)
(22,340)
(40,529)
1,304
(39,224)
-
(5)
64,260
(329)
63,925
(5,161)
(13,027)
(22,340)
(40,529)
1,304
24,700
144,319
155,658
472,277
(1,905)
770,349
24,846
(43,182)
(67,385)
(85,721)
43,466
728,094
57
(For reference)
4. Summary of Consolidated Statement of Cash Flow (From April 1, 2010 to March 31, 2011)
Amount
Item
Net cash provided by (used in) operating activities
174,585
Net cash provided by (used in) investing activities
(162,781)
Net cash provided by (used in) financing activities
(100,161)
Effect of exchange rate change on cash and cash equivalents
(6,041)
Net increase (decrease) in cash and cash equivalents
(94,400)
Cash and cash equivalents at beginning of period
281,660
Increase (decrease) in cash and cash equivalents resulting from change of scope of
consolidation
460
Increase (decrease) in cash and cash equivalents resulting from merger of
subsidiaries
226
Increase (decrease) in beginning balance of cash and cash equivalents resulting
from change in fiscal period of consolidated subsidiaries
1,737
189,685
Cash and cash equivalents at end of period
Note: This statement is not covered by the audit reports.
58
5. Notes to Consolidated Financial Statements
(1) Basis of presenting consolidated financial statements
1)
Scope of Consolidation
(i)
Number of Consolidated subsidiaries: 687
Name of principal consolidated subsidiaries
NYK GLOBAL BULK CORP., NIPPON CARGO AIRLINES CO., LTD., HACHIUMA STEAMSHIP
CO., LTD., NYK-HINODE LINE, LTD., NYK CRUISES CO., LTD., NYK TRADING CORP.,
YUSEN LOGISTICS CO., LTD., UNI-X CORP., NYK GROUP AMERICAS INC., NYK GROUP
EUROPE LTD., NYK GROUP SOUTH ASIA PTE. LTD., NYK GROUP OCEANIA PTY. LTD.,
ADAGIO MARITIMA S.A. and other 428 vessel owning companies.
Changes in the current fiscal year are as follows:
BURNEY JAPAN CO., LTD. and 10 other companies were included within the scope of
consolidation as they were newly established.
KYUSHU INDUSTRY & TRANSPORTATION CO., LTD. and 15 other companies were included
within the scope of consolidation as their total assets, revenues, net income and retained earnings,
etc. increased in importance.
LCL GRINDROD PTY LTD. and 1 other company were excluded from the scope of application of
the equity method and included within the scope of consolidation, as their total assets, revenues,
net income and retained earnings, etc. increased in importance.
NYK LOGISTICS (UK) CONSUMER & RETAIL LTD. and 40 other companies were excluded from
the scope of consolidation, as they were liquidated.
HOYO KAIUN SANGYO K.K. was excluded from the scope of consolidation, as it merged with
WING MARITIME SERVICE CORPORATION as of April 1, 2010.
COOL PETROLEUM AB was excluded from the scope of consolidation, as it merged with
NYKCOOL AB as of April 22, 2010.
TAIHEIYO KAIUN CO., LTD. was excluded from the scope of consolidation, as it merged
with NYK as of October 1, 2010.
(ii)
(iii)
(iv)
(v)
2)
THE MARUNOUCHI POLESTAR CO., LTD. and 8 other companies were excluded from the
scope of consolidation, due to the sale of shares.
Name of principal unconsolidated subsidiaries
There is no principal unconsolidated subsidiary to be noted.
Reason for exclusion from the scope of consolidation
Total assets, total sum of revenues and total equity amount out of net income and total equity
amount of retained earnings, etc. of unconsolidated subsidiary are all small compared to total
assets, total sum of revenues, total equity amount out of net income and total equity amount of
retained earnings of consolidated companies, and do not have a material effect on the
consolidated statutory report as a whole, and this is why they are excluded from the scope of
consolidation.
Name of the company that is not a subsidiary of NYK despite NYK holds a majority of voting rights
of the company in its own calculation: NYK ARMATEUR S.A.S.
Reason for not making the company a subsidiary
Though NYK holds a majority of voting rights of NYK ARMATEUR S.A.S. in its own calculation,
NYK does not actually control the decision-making body of the company due to the agreement
regarding decisions on significant finance and sales or business policies. Therefore, we classify
the company an affiliate accounted for by the equity method.
Application of equity method
(i)
Number of affiliates accounted for by the equity method
unconsolidated subsidiaries: 11
affiliates: 101
Name of principal affiliates accounted for by the equity method:
NS UNITED KAIUN KAISHA, LTD., KYOEI TANKER CO., LTD.
59
Changes during this fiscal year are as follows:
CHARLESTON GATE, LLC was included within the scope of application of the equity method, as
it was newly established.
YAMATO GLOBAL LOGISTICS JAPAN CO., LTD. and 5 other companies were included within
the scope of application of the equity method, as their net income and retained earnings, etc.
increased in importance.
KNUTSEN NYK OFFSHORE TANKERS AS and 32 other companies were included within the
scope of application of equity method, due to the acquisition of shares.
LCL GRINDROD PTY LTD. and 1 other company were excluded from the scope of application of
equity method, as their total assets, revenues, net income and retained earnings, etc. increased in
importance.
(ii) Name of principal unconsolidated subsidiaries and affiliates that are not accounted for by the
equity method
There is no principal unconsolidated subsidiary or affiliate to be noted.
(iii) Reason for exclusion of the scope of application of the equity method
Net income and total equity amount of retained earnings, etc. of unconsolidated subsidiaries and
affiliates that are not accounted for by the equity method are small compared to net income and
total equity amount of retained earnings of consolidated companies and companies that are
accounted for by the equity method, and impact on retained earnings, etc., is minor, and as a
whole do not have a material effect on the consolidated statutory report, and this is why they are
excluded from the scope of application of the equity method.
3)
Fiscal year for consolidated subsidiaries
For the consolidated subsidiaries whose closing dates of account were different from that of the
consolidated statements, financial statements as of the closing date of account of respective
companies were used for the purpose of consolidation. Necessary consolidation adjustments have
been made to account for significant events, if any, that took place between the two dates. There
were 41 consolidated subsidiaries whose closing dates of account fell on December 31 and 1
consolidated subsidiary whose closing date of account fell on February 28. For 2 consolidated
subsidiaries whose closing dates of account fell on December 31, pro forma financial reports as of
the closing date of the consolidated statements were used for the purpose of consolidation.
From this consolidated fiscal year, the Company’s consolidated subsidiary YUSEN AIR & SEA
SERVICE (USA) INC. and other 21 companies changed their closing dates from December 31 to
March 31.
The impact of the change in closing date on retained earnings is stated in the Consolidated
Statement of Changes in Net Assets.
(i) The name of a major company which closes the books on December 31 is as follows:
NYK LOGISTICS (CHINA) CO., LTD.
(ii) The name of a company which closes the book on February 28 is as follows:
KYUSHU INDUSTRY & TRANSPORTATION CO., LTD.
4)
Accounting policies
(i)
Standards and methods of valuation of significant assets
Securities
Bonds held to maturity
Amortized cost method (primarily straight-line method)
Available-for-sale securities
Securities with market value
Securities without market value
Derivatives
Primarily, market value method based on the average
market price during the month before the closing date, etc.
(Differences in valuation are included directly in net assets
and costs of securities sold are calculated primarily using
the moving-average method)
Primarily, stated at cost using the moving-average method
Market value method
60
Inventories
Primarily, stated at cost using the moving-average method
(reducing book value in accordance with declines in
profitability)
(ii) Depreciation methods for significant depreciable assets
Vessel, property, plant and equipment (except for lease assets)
Primarily, the straight-line method pursuant to the
provisions of the Corporation Tax Law
Assets for which the purchase price is more than 100,000
yen but less than 200,000 yen are generally depreciated in
equal allotments over 3 years based on the Japanese
Corporation Tax Law.
Intangible assets (except for lease assets)
(Software)
Primarily, straight-line method based on useful life of five
years in-house
(Other intangible fixed assets)
Primarily, the straight-line method pursuant to the
provisions of the Corporation Tax Law
Lease assets
(Lease assets arising from ownership-transfer finance leases)
Identical to depreciation method applied to self-owned
noncurrent assets
(Lease assets arising from non-ownership-transfer finance leases)
Straight-line method that assumes a useful life is equal to
the lease period and an estimated residual value is zero
The conventional accounting treatment will still apply to non-ownership-transfer finance leases
that commenced before March 31, 2008 to apply revised accounting standard for lease
transactions.
(iii) Disposition method of significant deferred assets
Stock issuance cost
Amortized equally each month over the three years
Bond issuance cost
Amortized equally each month over the period of
redemption of the bond
(iv) Standards of accounting for significant allowances and provisions
Estimated uncollectible amounts are calculated using
historical data for trade receivables and individually
considering the probability of collection for doubtful
receivables.
Provided for bonus payments to employees based on
estimated amounts of future payments attributed to the
fiscal year
Provision for director’s bonuses
Provided for bonus payments to directors based on
estimated amounts of future payments attributed to the
fiscal year
Provision for retirement benefits is calculated based on the
estimates of retirement benefit obligations and pension
assets as of the end of the fiscal year.
Prior service cost is amortized primarily by the straight-line
method over a certain period (8 years) which is not more
than the average remaining service period of employees.
Unrecognized actuarial differences are amortized in the
year following the year in which the gain or loss is
recognized primarily by the straight-line method over a
certain period (8 years) which is not more than the average
remaining service period of employees.
Provision for directors’ retirement benefits
Provision for directors’ retirement benefits at the end of
61
fiscal term are calculated based on internal rules as for 51
consolidated subsidiaries.
Provision for periodic dry docking of vessels
Provision for periodic dry docking of vessels is calculated
based on future estimated amount for periodic dry docking
of vessels.
Provision for losses related to antitrust law
NYK’s consolidated subsidiary, YUSEN LOGISTICS CO.
LTD., has recorded a provision in preparation for the order
to pay an administrative surcharge for alleged violations of
Article 3 of the Act on Prohibition of Private Monopolization
and Maintenance of Fair Trade, in the amount of the
administrative surcharge based on this order.
(v) Standards of accounting for important income and expenses
Standards of accounting for revenue and expenses of the shipping operation
Container ships
For freight rate and transportation costs, the Company has mainly adopted the intermodal
transportation percentage of completion basis, which is posted in accordance with the elapse
of the transportation period of the individual cargo.
Other than container ships
For freight rates, transportation costs, and vessel lease fees of short-term chartered vessels,
in addition to vessel cost relating to vessels in operation and vessel lease fees of long-term
chartered vessels, along with lending vessel fees corresponding to these, the Company has
mainly adopted the voyage completion method, which considers from place of departure to
the place of return as one unit.
(vi) Accounting method for interest expenses
Interest expenses are generally charged to expenses on an accrual basis. However, interest
expenses associated with the vessels under construction which will fall into the category of
long-term and significant valued business assets and fulfill certain conditions, are included in the
acquisition costs of business assets.
(vii) Significant hedge accounting
For the derivative financial instruments used to offset the risks of assets and liabilities due to
fluctuations in interest rates, foreign currency exchange rates and cash flow, the Company applies
hedge accounting. In addition, hedge accounting is also applied to derivative financial instruments
used to mitigate the risks of price fluctuations in fuel procurement, etc. For the hedge accounting,
the Company adopts a Deferred Hedge Method that requires the Company to mark the derivative
financial instruments, effective as hedges, to market, and to defer the valuation loss/gain. For the
currency swap contracts and forward foreign exchange contracts that meet the required
conditions of the accounting standard, the Company translates hedged foreign currency assets
and liabilities at the rate stipulated in respective contracts. For the interest rate swap contracts
and interest rate cap contracts that meet specified conditions of the accounting standard, the
related interest differentials paid or received under the contracts are included in the interest
income/expenses of the hedged financial assets and liabilities.
Interest rate swaps are used to hedge the loans payable and bonds payable against possible
changes in interest rates, while currency swap, forward exchange contracts and foreign currency
denominated assets/liabilities are used to hedge monetary assets and liabilities and other foreign
currency denominated transactions against possible changes in exchange rates. Swap
transactions are used to hedge fuel oil against possible fluctuations in price. Semi-annually, the
Company evaluates effectiveness of hedging transactions by comparing accumulated changes in
market price and cash flows of hedging transactions with those of the hedged transactions,
provided that interest rate swap and interest rate cap transactions that are subject to special
accounting treatment as noted above are excluded from the evaluation.
62
(viii) Consumption taxes
Consumption taxes are accounted for by the tax exclusion method.
(ix) Method of amortization of goodwill and period of amortization
Goodwill is amortized equally each year over 5 to 20 years.
(2)
Changes in accounting policy
1) Changes in principles and procedures for accounting
(a) Application of “Accounting Standard for Equity Method of Accounting for Investments” and
“Practical Solution on Unification of Accounting Policies Applied to Associates Accounted for
Using the Equity Method”
Effective from this fiscal year, the Company has adopted “Accounting Standard for Equity Method
of Accounting for Investments” (The Accounting Standards Board of Japan (“ASBJ”) Statement
No. 16, announced on March 10, 2008) and “Practical Solution on Unification of Accounting
Policies Applied to Associates Accounted for Using the Equity Method” (ASBJ Practical Issues
Task Force No. 24, March 10, 2008). This accounting change has no impact on the profits and
losses.
(b) Application of “Accounting Standard for Asset Retirement Obligations”, etc.
Effective from this fiscal year, the Company has adopted “Accounting Standard for Asset
Retirement Obligations” (ASBJ Statement No. 18, March 31, 2008) and “Guidance on Accounting
Standard for Asset Retirement Obligations” (ASBJ Guidance No. 21, March 31, 2008). The impact
of the application of these standards on profit and loss, and the changes in the amount of asset
retirement obligations due to the commencement of the application of these standards are
negligible.
(c) Application of “Accounting Standard for Business Combinations”, etc.
Effective from this fiscal year, the Company has adopted “Accounting Standard for Business
Combinations” (ASBJ Statement No. 21, December 26, 2008), “Accounting Standard for
Consolidated Financial Statements” (ASBJ Statement No. 22, December 26, 2008), “Partial
amendments to Accounting Standard for Research and Development Costs” (ASBJ Statement No.
23, December 26, 2008), “Revised Accounting Standard for Business Divestitures” (ASBJ
Statement No. 7, revised on December 26, 2008), “Revised Accounting Standard for Equity
Method of Accounting for Investments” (ASBJ Statement No. 16, announced on December 26,
2008) and “Revised Guidance on Accounting Standard for Business Combinations and
Accounting Standard for Business Divestitures” (ASBJ Guidance No. 10, December 26, 2008).
2) Changes in presentation
(a) Due to the amendments to the Corporate Calculation Regulations, the Company, starting from
this fiscal year, “Income before minority interests” is presented in the Consolidated Statement of
Income.
(b) Due to the amendments to the Corporate Calculation Regulations, the Company, starting from
this fiscal year, amounts previously presented as “Valuation and translation adjustments” in the
Consolidated Balance Sheet and the Consolidated Statement of Changes in Net Assets are now
presented as “Accumulated other comprehensive income”.
(3) Notes to Consolidated Balance Sheet
1)
Breakdown of inventories
Merchandise and finished goods
Work in process
Raw materials and supplies
2,808 million yen
461 million yen
50,464 million yen
63
2)
Assets pledged as collateral and obligations relating to collateral
(i)
Assets pledged as collateral
Cash and deposits
Marketable securities
Other current assets
Vessels
Buildings and structures
Aircraft
Machinery, equipment and vehicles
Equipment
Land
Other tangible fixed assets
Software
Other investments, etc
Total
(ii) Obligations relating to collateral
Notes and operating accounts payable-trade
Short-term loans payable
Other current liabilities
Long-term loans payable
Other noncurrent liabilities
Total
3)
Accumulated depreciation of tangible fixed assets
4)
Contingent liability
(i) Notes receivable discounted and endorsed
(ii) Guarantee obligations
(iii) Amount of joint obligations borne by the other joint obligors
174 million yen
39 million yen
668 million yen
58,555 million yen
4,338 million yen
1,703 million yen
225 million yen
113 million yen
7,343 million yen
17 million yen
0 million yen
9,291 million yen
223 million yen
82,696 million yen
45 million yen
11,755 million yen
33 million yen
31,220 million yen
19 million yen
43,075 million yen
812,465 million yen
1 million yen
97,937 million yen
3,041 million yen
(iv) Certain operating lease agreements that the consolidated subsidiaries concluded on their
respective vessels incorporate a residual value guarantee clause. The maximum amount of
potential future payment under the guarantee obligation is 37,065 million yen. These guarantees
may be paid if the subsidiaries choose to return the leased property rather than exercise an
option to buy it. The operating lease agreement will expire by December 2018.
(v) Some operating lease agreements that NYK and NIPPON CARGO AIRLINES CO., LTD., a
consolidated subsidiary of NYK, concluded on its aircraft incorporate a residual value guarantee
clause. The maximum amount of potential future payment under the guarantee obligation is
25,858 million yen. The companies may pay the guarantee if they choose to return the leased
properties at the end of the lease term. The operating lease agreement will expire by December
2013.
(vi) NYK’s consolidated subsidiary NIPPON CARGO AIRLINES CO., LTD. (“NCA”) has been filed a
damage suit without specific amount of damage (class action lawsuit) in the U.S. on suspicion of
forming a price cartel in the air cargo transport service, etc. Regarding the result of the class
action lawsuit, there is a possibility of exerting an impact on NCA’s operating results, but it is
difficult to predict these results reasonably.
(4) Notes to Consolidated Statement of Changes in Net Assets
1)
Class and number of issued and outstanding shares at term-end
Common stock
1,700,550,988 shares
64
2)
Matters concerning dividends
(i)
Amount of dividend payment
Resolution
Class of stock
Total dividend Dividend per
(millions of yen) share (yen)
Ordinary General Meeting
of Shareholders
Common stock
June 23, 2010
Board of Directors’
Meeting
October 29, 2010
Common stock
Total
3,395
2
10,182
6
Base date
Effective
date
March 31,
2010
June 24,
2010
September 30, November 22,
2010
2010
13,577
(ii) Dividend for which base date is in the current consolidated fiscal year but effective date for
dividend is in the following fiscal term
As a proposal at the Ordinary General Meeting of Shareholders to be held on June 23, 2011,
matters regarding dividends of common stock are submitted as follows:
1) Total dividend
8,484 million yen
2) Dividend per share
5 yen
3) Base date
March 31, 2011
4) Effective date
June 24, 2011
Resource for dividends are planned to be retained earnings.
(5) Notes to financial instruments
1)
Matters concerning financial instruments
The NYK Group primarily uses short-term deposits for the management of its funds, and raises funds
through borrowings from financial institutions including banks or corporate bonds. It aims to mitigate
the credit risk of customers associated with notes and operating accounts receivable-trade, in
accordance with its credit control procedures and other rules. Investment securities consist primarily
of shares and those shares with market quotations are basically stated by using the market value
method, based on the average market value during one month before the closing date. As a result,
the fluctuations in the stock market and other related factors may have an impact on the NYK
Group’s business performance and financial standings. Proceeds from the loans payable and
corporate bonds are used to finance capital investment requirements for the acquisition of vessels,
aircraft, transportation-related facilities, etc. and working capital requirements for business activities.
The Company enters into interest rate swap agreements and similar instruments to hedge against
the risk of interest rate fluctuations. Meanwhile, the NYK Group makes it a principle to implement
derivatives transactions within the scope of commercial needs, in accordance with its internal rules
and regulations.
2)
Matters concerning the market value of financial instruments
The stated values of financial instruments on the consolidated balance sheet, their market values
and differences between balance sheet amount and market values as of March 31, 2011 are
described below.
Financial instruments whose market values appear to be extremely difficult to determine are not
included in the table.
65
Consolidated
balance sheet
amount (*3)
(i) Cash and deposits
(ii) Notes and operating accounts
receivable-trade
Allowance for doubtful accounts (*1)
152,568
152,568
—
180,953
—
46,512
136,950
14,505
18,575
(958)
17,616
46,512
136,950
9,979
(0)
—
(4,525)
18,413
797
[157,835]
[157,835]
[97,641]
[251,059]
[627,054]
[50,228]
[97,641]
[258,637]
[643,513]
[50,228]
(1,323)
180,953
(v) Notes and operating accounts
payable-trade
(vi) Short-term loans payable
(vii) Bonds payable
(viii) Long-term loans payable
(ix) Derivatives transactions (*2)
(*2)
(*3)
Balance (*3)
182,276
(iii) Short-term and long term investment
securities
Stocks of subsidiaries and affiliates
(iv) Long-term loans receivable
Allowance for doubtful accounts (*1)
(*1)
Market Values
(*3)
—
—
[7,577]
[16,458]
—
The separately recorded provisions for allowance for doubtful accounts on notes and operating accounts
receivable-trade and long-term loans receivable are subtracted from the above amounts.
Derivatives transactions are stated at their total value subtracted for debts and credits.
The value of financial instruments recorded as liabilities are shown in [ ].
Note: 1. Calculation method for the market value of financial instruments and matters concerning
marketable securities and derivatives transactions
(i)
(ii)
(iii)
(iv)
(v)
Cash and deposits
These assets are stated at book value, as they are settled in the short term and their market
values approximate book values.
Notes and operating accounts receivable-trade
values approximate book values. Doubtful receivables are stated at adjusted book value. The
expected amount of loan losses on these assets are calculated based on either the present value
of expected future cash flows or expected recoverable amount of their collateral securities or
guarantees; hence their market values approximate their balance sheet values at the
consolidated accounting date less the current expected amount of loan losses.
Short-term and long term investment securities
Shares are stated at the stock exchange quoted price and bonds are stated at either the stock
exchange quoted price or the price presented by transacting financial institutions.
Long-term loans receivable with variable interest rates are stated at book value. The interest rate
on these assets reflects the market rate in the short term, therefore their market values
approximate book values. Those with fixed-interest rates are stated at market value, which is
calculated by discounting the principal and interest using the assumed rate applied to a similar
type of new loan. Meanwhile, doubtful receivables are stated at adjusted book value. The
expected amount of loan losses on these assets are calculated based on either the present value
of expected future cash flows or expected recoverable amount of their collateral securities or
guarantees; hence their market values approximate their balance sheet values at the
consolidated accounting date less the current expected amount of loan losses.
Notes and operating accounts payable and (vi) short-term loans payable
66
values approximate book values.
(vii) Bonds payable
The market value of the corporate bonds issued by NYK is calculated based on the market price.
(viii) Long-term loans payable
Long-term loans payable with variable interest rates are stated at book value, as the interest rate
on these loans reflects the market rate in the short term and their market values approximate book
values. Meanwhile, long-term loans payable with fixed-interest rates are stated at present value.
The present value is calculated by discounting a periodically divided portion of the principal and
interest of these loans (*), using the assumed rate applied to a similar loan.
(*) As to the long-term loans payable involved in the interest rate swap agreement that meet the
requirements for exceptional treatment, the total amount of its principal and interest income at
the post-swap rate is applied.
(ix) Derivatives transactions
NYK and its subsidiaries enter into interest-rate swap agreements to hedge against the risk of
fluctuations in interest rates relating to their loans payable, corporate bonds, etc.; close currency
futures, currency swap and similar instrument deals to hedge against the risk of fluctuations in
exchange rates associated with their foreign currency-denominated debts and credits; and deal in
fuel oil swap, freight (charterage) futures and similar instrument contracts to hedge against the
fluctuations in fuel oil and charterage. The market value of these derivatives transactions at the
consolidated accounting date is calculated based on the price presented by transacting financial
institutions, etc.
Notes: 2 Stocks of subsidiaries and affiliates (recorded amount on the consolidated balance sheet
is 94,082 million yen) and unlisted shares (recorded amount on the consolidated balance
sheet is 23,869 million yen) are not included in “(iii) Short-term and long term investment
securities”, as their market values appear to be extremely difficult to determine.
(6) Notes to investment and rental properties
1)
Matters concerning investment and rental properties
NYK and some of its consolidated subsidiaries own office buildings and other properties for lease
(including land) in the metropolis of Tokyo and other areas.
2)
Matters concerning the market price of leased properties
Income and expenses from the relevant investment and rental properties as of March 31, 2011 was
3,977 million yen (major income and expenses associated with these investment and rental
properties were recorded as revenues and cost and expenses, respectively), and income and
expenses from sales was 2,414 million yen (primarily recorded as extraordinary gains).
The recorded amount on the consolidated balance sheet, amount of increase (decrease), and
market value of the relevant investment and rental properties on the consolidated accounting date
are shown below.
Consolidated balance sheet amount
Balance at previous fiscal
year-end
39,308
Increase
(decrease) in
current fiscal year
437
67
Market value as of
Balance at current
fiscal year-end
39,745
the consolidated
accounting date
102,553
Notes: 1
Consolidated balance sheet amount represents the original acquisition cost less accumulated
depreciation and impairment losses.
2 The amount of increase (decrease) in the current fiscal year primarily includes an increase (2,901
million yen) due to a change in the intended purpose of a property and a decrease (1,040 million
yen) due to sales.
3 The market values as of the end of the current fiscal year are based on amounts (including amounts
adjusted on the basis of indexes, etc.) calculated principally with reference to the Real Estate
Appraisal Standard.
(7) Note on per-share information
1) Net assets per share
2) Net income per share
403.46 yen
46.27 yen
(8) Other notes
The fraction of amounts less than the indicated unit is rounded down.
(9) Notes on significant subsequent events
Not applicable
68
Unconsolidated Financial Statements
1. Unconsolidated Balance Sheet (As of March 31, 2011)
Item
Assets
Current assets
Cash and deposits
Accounts receivable-trade
Short-term loans receivable
Short-term investment securities
Inventories
Deferred or prepaid expenses
Receivable from agencies
Deferred tax assets
Other current assets
Noncurrent assets
Tangible fixed assets
Vessels
Buildings
Structures
Machinery and equipment
Vehicles
Equipment and fixtures
Land
Construction in progress
Intangible fixed assets
Goodwill
Leaseholds
Software
Other intangible fixed assets
Investments and other assets
Stocks and equity in
subsidiaries and affiliates
Lease receivables
Other investments, etc.
Deferred assets
Stock issuance cost
Bond issuance cost
Total Assets
Amount
474,634
34,593
61,254
240,886
45,000
34,491
41,095
8,587
7,052
17,036
(15,361)
965,874
166,267
53,302
21,326
603
567
43
1,016
27,576
61,830
18,207
14,609
511
2,983
103
781,399
141,690
259,813
314,332
22,334
51,504
(8,275)
1,925
445
1,480
1,442,434
69
Item
Amount
Liabilities
Current liabilities
Accounts payable-trade
Short-term bank loans
Lease obligations
Account payable
Income taxes payable
Advance received
Deposits received
Payable to agencies
Provision for directors’ bonuses
Other current liabilities
Noncurrent liabilities
Corporate bonds
Long-term debts
Lease obligations
Provision for periodic dry
docking of vessels
Other noncurrent liabilities
Total liabilities
Net Assets
Shareholders’ equity
Common stock
Capital surplus
Capital reserve
Other capital surplus
Retained earnings
Earned surplus reserve
Other retained earnings
Dividends reserve
Special depreciation
reserve
Reserve for overseas
investment loss
Reserve for advanced
depreciation
Other reserves
Retained earnings carried
forward
Treasury stock
Valuation and translation
adjustments
204,306
61,919
44,787
5
2,493
138
20,021
60,244
659
2,567
143
11,325
703,233
251,059
419,280
46
15,455
652
16,739
907,540
513,227
144,319
154,428
151,691
2,737
216,378
13,146
203,231
50
224
0
4,531
118,324
80,101
(1,899)
21,666
Net unrealized holding gain on
available-for-sale securities
23,876
Deferred gains/losses on hedge
(2,210)
Total net assets
Total Liabilities and Net Assets
534,894
1,442,434
2. Unconsolidated Statement of Income (From April 1, 2010 to March 31, 2011)
Amount
Item
Revenue from shipping operation
963,349
Shipping operation expenses
872,828
Shipping operation income
90,520
Revenue from other business
6,969
Other operating expenses
4,922
Other business income
2,046
Gross operating income
92,567
General administrative expenses
38,344
Operating income
54,223
Non-operating income
Interest and dividends income
16,879
Other non-operating income
2,662
19,542
Non-operating expenses
Interest expenses
10,153
Other non-operating expenses
4,796
Recurring profit
14,950
58,815
Extraordinary gains
Gain on sales of noncurrent assets
498
Gain on sales of investment securities
7,176
Gain on liquidation of subsidiaries and affiliates
1,884
Other extraordinary gains
1,706
11,266
Extraordinary losses
Loss on disposal of noncurrent assets
256
Provision for allowance for doubtful accounts
11,898
Loss on devaluation of investment securities
10,537
Other extraordinary losses
6,549
Income before income taxes
29,243
40,838
Income taxes-current
(57)
Income taxes-deferred
14,154
Net income
14,096
26,741
70
3. Unconsolidated Statement of Changes in Net Assets (From April 1, 2010 to March 31, 2011)
Capital surplus
Item
Balance as of March 31,
2010
Changes during fiscal year
Dividends from retained
earnings
Reversal of special
depreciation reserve
Reversal of reserve for
overseas investment loss
advanced depreciation
Net income
Acquisition of treasury
stock
Disposition of treasury
stock
Net changes other than
shareholders’ equity during
fiscal year
Total change during fiscal
year
2011
Common stock
144,319
Capital reserve
151,691
Other capital
surplus
Earned surplus
reserve
2,742
13,146
Retained earnings
Reserve for
Special
Dividends
depreciation
overseas
reserve
reserve
investment loss
50
330
0
Reserve for
advanced
depreciation
4,870
(105)
(0)
(339)
(5)
—
—
144,319
151,691
(5)
2,737
71
—
—
(105)
13,146
50
224
(0)
0
(339)
4,531
Item
2010
Changes during fiscal year
Dividends from retained
earnings
Reversal of special
depreciation reserve
overseas investment loss
advanced depreciation
Net income
Acquisition of treasury
stock
Disposition of treasury
stock
Net changes other than
shareholders’ equity during
fiscal year
Total change during fiscal
year
2011
Retained earnings
Retained earning
Other reserves
carried forward
118,324
66,493
Treasury stock
(1,568)
26,813
(863)
Total net assets
526,351
(13,577)
105
—
—
0
—
—
339
—
13,608
80,101
—
26,741
26,741
(347)
(347)
(347)
16
10
10
26,741
118,324
500,400
(13,577)
(13,577)
—
Total
shareholders’
equity
Valuation and translation
adjustments
Net unrealized
holding gain on
Deferred gains/
available-for-sale losses on hedge
securities
(2,937)
(1,346)
(4,283)
(330)
12,827
(2,937)
(1,346)
8,543
(1,899)
513,227
23,876
(2,210)
534,894
72
4. Notes to Unconsolidated Financial Statements
(1) Notes on matters relating to significant accounting policies
1)
Standards and methods of valuation of securities
Stock of subsidiaries and affiliates
Securities with market value
Securities without market value
2)
Amortized cost method (straight-line method)
Stated at cost using the moving-average method
Market value method based on the average market price
during the month before the closing date, etc. (Differences in
valuation are included directly in net assets and costs of
securities sold are calculated using the moving-average
method)
Standards and method of valuation of derivative transaction
Market value method
3)
Standards and methods of valuation of inventories
Bunker oil
Articles for ships and other
4)
devaluating book values corresponding to
profitability)
Stated at cost using the first-in, first-out method
devaluating book values corresponding to
profitability)
(method of
decreased
(method of
decreased
Depreciation methods fixed assets
Tangible fixed assets (except for lease assets)
Vessels and building
Straight-line method pursuant to the provisions of the
Corporation Tax Law
Other tangible fixed assets
Declining-balance method pursuant to the provisions of the
Corporation Tax Law
Intangible fixed assets (except for lease assets)
Goodwill
Amortized equally within 20 years
Software
Straight-line method based on useful life in-house (5 years)
Other intangible fixed assets
Straight-line method pursuant to the provisions of the
Corporation Tax Law
Lease assets
(Lease assets arising from ownership-transfer finance leases)
Identical to depreciation method applied to self-owned
noncurrent assets
(Lease assets arising from non-ownership-transfer finance leases)
Straight-line method that assumes a useful life is equal to the
lease period and an estimated residual value is zero
The conventional accounting treatment will still apply to non-ownership-transfer finance leases that
commenced before March 31, 2008 to apply revised accounting standard for lease transactions.
5)
Disposition method of deferred assets
Stock issuance cost
Bond issuance cost
Amortized equally each month over the three years
Amortized equally each month over the period of redemption
of bond
73
6)
Standards of accounting for allowances and reserves
Estimated uncollectible amounts are calculated using
historical data for trade receivables and individually
considering the probability of collection for doubtful
receivables.
Provided for bonus payments to employees based on the
estimated amounts of future payments attributed to the fiscal
year
Provision for director’s bonuses
Provided for bonus payments to directors based on the
estimated amounts of future payments attributed to the fiscal
year
Reserve for employees’ retirement benefits is calculated
based on estimates of retirement benefit obligations and
pension assets as of the end of the fiscal term.
Prior service cost is amortized primarily by the straight-line
method over a certain period (8 years) which is not more than
the average remaining service period of employees.
Unrecognized actuarial differences are amortized in the year
following the year in which the gain or loss is recognized
primarily by the straight-line method over a certain period (8
years) which is not more than the average remaining service
period of employees.
Provision for periodic dry docking of vessels
Reserve for periodic dry docking of vessels is calculated
based on future estimated amount for periodic dry docking of
vessels.
7)
Standards of accounting for income and expenses
Container ships
Other than container ships
8)
For freight rate and transportation costs, the Company has
adopted the intermodal transportation percentage of
completion basis, which is posted in accordance with the
elapse of the transportation period of the individual cargo.
For freight rates, transportation costs, vessel cost relating to
vessels in operation and vessel lease fees, along with lending
vessel fees corresponding to these, the Company has
adopted the voyage completion method, which considers from
place of departure to the place of return as one unit.
Hedge accounting
For the derivative financial instruments used to offset the risks of assets and liabilities due to
fluctuations in interest rates, foreign currency exchange rates and cash flow, the Company applies
hedge accounting. In addition, hedge accounting is also applied to derivative financial instruments
used to mitigate the risks of price fluctuations in fuel procurement, etc. For the hedge accounting, the
Company adopts a Deferred Hedge Method that requires the Company to mark the derivative
financial instruments, effective as hedges, to market, and to defer the valuation loss/gain. For the
currency swap contracts and forward foreign exchange contracts that meet the required conditions of
the accounting standard, the Company translates hedged foreign currency assets and liabilities at the
rate stipulated in respective contracts. For the interest rate swap contracts that meet specified
conditions of the accounting standard, the related interest differentials paid or received under the
contracts are included in the interest income/expenses of the hedged financial assets and liabilities.
Interest rate swaps are used to hedge the loans payable and bonds payable against possible
changes in interest rates, while currency swap, forward exchange contracts and foreign currency
denominated assets/liabilities are used to hedge monetary assets and liabilities, investment in foreign
74
subsidiaries and other foreign currency denominated transactions against possible changes in
exchange rates. Swap transactions are used to hedge fuel oil against possible fluctuations in price.
Semi-annually, the Company evaluates effectiveness of hedging transactions by comparing
accumulated changes in market price and cash flows of hedging transactions with those of the
hedged transactions, provided that interest rate swap transactions that are subject to special
accounting treatment as noted above are excluded from the evaluation.
9)
Consumption taxes are accounted for by the tax exclusion method.
10) Changes in significant accounting policies
Effective from this fiscal year, the Company has adopted “Accounting Standard for Business
Combinations” (ASBJ Statement No. 21, December 26, 2008), “Partial amendment to Accounting
Standard for Research and Development Costs” (ASBJ Statement No. 23, December 26, 2008),
“Accounting Standard for Business Divestitures” (ASBJ Statement No. 7, December 26, 2008), and
“Guidance on Accounting Standard for Business Combinations and Accounting Standard for
Business Divestitures” (ASBJ Guidance No. 10, December 26, 2008).
(2) Notes to Unconsolidated Balance Sheet
1)
Assets pledged as collateral and obligations relating to collateral
(i)
Assets pledged as collateral
Cash and deposits
Vessels
Stocks and equity in subsidiaries and affiliates
Total
(ii) Obligations relating to collateral
Short-term borrowings
Long-term borrowings
Total
2)
Accumulated depreciation of tangible fixed assets
3)
Contingent liability
Guarantee obligations
Amount of joint obligations borne by the other joint obligors
4)
84 million yen
8,733 million yen
1,097 million yen
13,209 million yen
23,125 million yen
1,231 million yen
1,207 million yen
2,438 million yen
292,481 million yen
966,902 million yen
4,528 million yen
Claims and liabilities toward subsidiaries and affiliates (except for as presented in item
categories)
Short-term monetary claims
Long-term monetary claims
Short-term monetary liabilities
Long-term monetary liabilities
254,815 million yen
341,842 million yen
67,559 million yen
1,643 million yen
75
(3) Notes to Unconsolidated Statement of Income
Transactions with subsidiaries and affiliates
Operating transactions
Revenues (revenue from shipping operation, revenue from other business)
23,493 million yen
Expenses (shipping operation expenses, other operating expenses, general administrative
expenses)
207,383 million yen
Transactions other than operating transactions
35,451 million yen
(4) Notes to Unconsolidated Statement of Changes in Net Assets
Class and number of treasury stock at term-end
Common stock
3,628,714 shares
(5) Notes on tax effect accounting
Major causes of deferred tax assets are loss on devaluation of fixed assets and the amount that exceeds
the deductible amount for allowance for doubtful accounts etc., and major cause for deferred tax liabilities
is net unrealized holding gain on available-for-sale securities.
(6) Notes on fixed asset leasing
Other than the fixed assets posted in the unconsolidated balance sheet, the Company owns 199 thousand
units of containers as major fixed assets used under finance leases other than those that transfer the
ownership of the leased property to the lessee at the conclusion of the lease.
76
(7) Notes concerning transactions with related parties
1)
Subsidiaries and affiliates, etc.
Category
Company
Ratio of
holding of
voting rights,
etc. (or ratio of
voting rights
held) (%)
Subsidiary NYK FTC
(SINGAPORE) PTE.
LTD.
Holding
Directly 100.0
Subsidiary NIPPON CARGO
AIRLINES CO., LTD
Holding
Directly 100.0
Detail of
relationship
Contents of
transaction
Capital support
Acceptance of interest
Debt guarantee, etc.
(Note 1)
Capital support
Acceptance of interest
Concurrent service Debt guarantee, etc.
as executives
(Note1)
Subsidiary NYK GLOBAL BULK
CORP.
Holding
Directly 100.0
Capital support
Concurrent service
as executives
Receipt of funds
(Note 2)
Subsidiary TOKYO SENPAKU
KAISHA, LTD.
Holding
Directly 100.0
Acquisition of
business
Acquisition of business
(Note 3)
Interest payment
Payment for
acquisition of business
Transaction
amount
(millions of
yen)
Account item
996 Short-term loans
receivable
23,423 Other current
assets
94,967
2
590 Short-term loans
receivable
116,096 Other current
assets
80,880
20
1,739 Deposits received
50
Term-end
balance
(millions
of yen)
24,494
—
—
—
—
11,136
—
—
Subsidiary CRYSTAL SHIP
THREE (BAHAMAS)
LTD.
Holding
Directly 100.0
Debt guarantee, etc. Debt guarantee, etc.
(Note 1)
18,384
—
—
Subsidiary NYK LNG FINANCE
CO., LTD.
Holding
Directly 100.0
(Note 1)
17,894
—
—
Subsidiary SAGA SHIPHOLDING
(NORWAY) AS
Holding
(Note 1)
Indirectly 100.0
18,353
—
—
Subsidiary Vessels owning,
chartering related
companies (Note 7)
ADAGIO MARITIMA
S.A. and other 340
companies
Holding
Directly 100.0
(322
companies)
Capital support
Provision of loans
(Note 4)
Lease of vessels
(Note 5)
122,848 Short-term loans
receivable
45,262
Long-term loans
receivable
263,564
15,596 Lease
receivables
(within 1 year)
2,743
Lease
receivables
Affiliate
NYK ARMATEUR
S.A.S.
22,334
Indirectly 100.0 Debt guarantee, etc. Debt guarantee, etc.
(Note 1)
537,655
—
—
(19 companies) Contract of
chartering ships
129,118
—
—
31,303
—
—
Holding
Indirectly 60.0
Payment of charterage
(Note 6)
(Note 1)
Transaction conditions and policies on determination of transaction conditions
Notes: 1. Guarantee fee for debt guarantee, etc. is determined by taking into consideration the form of
guarantee.
2. Conditions for the receipt of funds are determined by taking into consideration the market rate. The
funds are not secured by collateral.
3. The Company received the transfer of the intra-Asia liner business from TOKYO SENPAKU KAISHA,
LTD. as of November 1, 2010. Payment amount for acquisition was decided by negotiation based on
the result of evaluation of external institution.
4. Conditions of lending funds are determined by taking into consideration the market rate. The
Company has not accepted security.
5. Ship lease payments are determined by taking into account the amount equivalent to the cost of the
ship.
6. Cost equivalent amounts accrued by subsidiaries are paid as vessel lease fees.
7. The Company has set aside a total of 17,376 million yen as allowance for doubtful accounts for the
loans to subsidiaries. Moreover, the Company has set aside a total of 11,781 million yen as
provision for allowance for doubtful accounts in the current fiscal year.
77
2)
Transactions which involve conflict of interest between the Directors or Controlling
Shareholders and NYK
There are no significant transactions which involve such conflict of interest.
(8) Note on per-share information
1) Net assets per share
2) Net income per share
315.21 yen
15.76 yen
(9) Other notes
The fraction of amounts less than the indicated unit is rounded down.
(10) Notes on significant subsequent events
Not applicable
78
Guidance on the Exercise of Votes via electromagnetic method (such as the Internet, etc.)
1.
Website to use for exercising votes
(1) To exercise votes via the Internet, please access the website (http://www.evote.jp/)
designated by the Company using a PC with Internet connection (access is unavailable
between 2:00 a.m. and 5:00 a.m. Japan Time everyday).
Note: Votes cannot be exercised by mobile telephone, PDA, game machine, etc.
(2) Please note that you may not be able to exercise votes via the Internet depending on your
Internet environment including security settings.
(3) Shareholders using the Internet voting option are requested to complete the required voting
procedures by 5:00 p.m. Japan Time on Wednesday, June 22, 2011, and exercising your
votes as early as possible will be requested to enable votes to be tallied.
2.
Method for exercising votes via the Internet
(1) Please access the website for exercising votes (http://www.evote.jp/), enter the login ID and
temporary password recorded on the Voting Form and then enter your vote for each
proposal according to the instructions on the screen.
(2) We request that you change the temporary password on the Voting Form in order to prevent
improper access by persons other than the shareholder (so-called “spoofing”) or alteration
of the content of your voting selections.
(3) You will be provided with a new login ID and temporary password each time a General
Meeting of Shareholders is convened.
3.
Disposition of votes in the event that votes are exercised two or more times
(1) In the event that the exercise of votes is duplicated by both the method of mailing the Voting
Form and via the Internet, the exercise of votes via the Internet shall be deemed valid.
(2) If votes are exercised multiple times via the Internet, only the last recorded entry shall be
counted.
4.
Expenses incurred when accessing the website for the Exercise of Votes
Please note that expenses incurred when accessing the website for the Exercise of Votes (dial-up
connection charges, telephone charges, communication charges, etc.) shall be the liability of the
shareholder.
79
5.
Contacts for inquiries
For inquiries concerning systems, etc.
Mitsubishi UFJ Trust and Banking Corporation
Corporate Agency Division (help desk)
Phone: 0120-173-027 (toll-free within Japan)
Hours: 9:00-21:00 Japan Time
For all other inquiries
Mitsubishi UFJ Trust and Banking Corporation
Corporate Agency Division
Phone: 0120-232-711 (toll-free within Japan)
Hours: 9:00-17:00 Japan Time (excluding Saturdays, Sundays and public holidays)
To the Institutional Investors:
Institutional investors may use the Electronic Proxy Voting Platform for Institutional Investors
managed by ICJ, Inc. as an electronic method for the exercise of votes at the General Meeting of
Shareholders of the Company.
80

INFORMATION The document following this cover sheet exists solely to provide...

Transcription

Similar documents

Notice of Annual Meeting of Shareholders

CMKM DIAMONDS, INC.

The Board of Directors of Qatar Fuel (WOQOD) is pleased to invite

CMKM DIAMONDS, INC.

History

View Report - Financial Center Credit Union

1. The different purposes of organisations

Sanrio Company, Ltd.