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, 2012 will be invited to attend the meeting.
Notice of the 125th Ordinary General Meeting of Shareholders
The 125th Fiscal Year
Report
From April 1, 2011,
to March 31, 2012
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.
1
Greetings from the President
I would like to express my sincere gratitude to our shareholders for their understanding and
support for NYK Group’s corporate activities.
For the consolidated fiscal year (FY2011), the NYK Group’s consolidated revenues decreased
from the previous fiscal year by 6.3% to ¥1,807.8 billion and we incurred an operating loss of ¥24.1
billion and recurring loss of ¥33.2 billion. Although the NYK Group’s consolidated results for the
upcoming periods are expected to recover, we have posted net loss of ¥72.8 billion due primarily to a
reversal of deferred tax assets of the Company in accordance with the related accounting standard.
However, this reversal of deferred tax assets does not have any impact on our cash flow. Currently,
we have reduced Directors’ compensation and have been endeavoring to improve our earnings
through intensified cost-cutting across various fields and rigorous screening of new capital
investments.
Looking back at the business environment in the current fiscal year, we saw a decline in transport
demand, chiefly in the automobile industry, as a result of The Great East Japan Earthquake last
March and the Thai floods from last summer. Meanwhile, the shipping market continued to languish
as overcapacity generally persisted, and Europe’s financial crisis exacerbated the situation. Other
factors that adversely affected our earnings include yen appreciation and a sharp rise in bunker oil
prices, reflecting international instability. Since the beginning of 2012, however, moderately
encouraging signs have emerged in the Japanese shipping industry’s operating environment
heading into the upcoming period. Most notably, the U.S. economy has been exhibiting signs of
improvement, including reduced unemployment rate, and the extremely strong yen has eased
somewhat against other currencies.
In April 2011, the NYK Group initiated a three-year medium-term management plan titled “More
Than Shipping 2013”. We have since been executing our strategy to link Asian growth with the world.
In April 2012, we were forced to revise the plan’s performance targets in response to changes in the
external environment, particularly exchange rates and market prices. Nonetheless, we still have
absolute confidence in the growth prospects of Asian and other emerging market economies and
believe that continuing to execute our management plan’s strategy without modification will lead to
improvement in our earnings.
Specifically, in the global logistics business, which mainly transports consumer goods, we will
adopt a moratorium on ordering new container ships and continue to migrate to a light-asset
business model, where we meet demand by leasing ships as needed. Additionally, with shipping
lines facing increasing difficulty in differentiating their services amid the growing prevalence of
alliances, the NYK Group will capture rapidly growing logistics demand, mainly in Asia, by further
strengthening our land-based contract logistics*1 capabilities.
In the bulk shipping business, we anticipate recovery in demand for automobile transport. Our car
carrier division aims to enhance the value-added of its services by optimally and fuel-efficiently
deploying and operating its fleet while building inland transport networks and terminal operations in
emerging market economies, in accordance with our “Traditional Shipping with Value Added
Strategies”. Additionally, we will steadily expand our fleets in response to economic demand in
growth markets such as LNG transport and offshore oil services. In the LNG transport business,
global demand growth and exports of U.S. shale gas are key focal points. Our offshore business
encompasses vessels that serve the upstream segment of the oil industry, including shuttle tankers,
drillships, and FPSOs*2. We expect the dry bulk carrier division and tanker division to remain beset
by an adverse environment for the time being due to oversupply of shipping capacity, but demand
from Asia and other emerging market economies is growing solidly and we will cultivate customers
overseas.
Amid such a drastically changing operating environment, our “More Than Shipping 2013” plan’s
strategy of expanding businesses with stable freight rates assumes particular importance. The NYK
Group will continue to focus on growing such businesses by winning long-term contracts across all of
our operating segments. We will endeavor on a Group-wide basis to improve our earnings, tapping
into our collective wisdom to lessen the impact of freight rate movements of containerized cargo and
the impact of market price fluctuations on contractually uncommitted bulk carriers and tankers.
Given such an operating environment, we plan to propose a fiscal year-end dividend of ¥2.00 per
share.
2
Regarding dividends for the upcoming period, we are planning interim and year-end dividends of
¥2.00 per share, for an annual dividend of ¥4.00 per share (a consolidated payout ratio of 29.5%),
based on a forecast of consolidated results for revenues of ¥2,000.0 billion, operating income of
¥50.0 billion, recurring profit of ¥40.0 billion, and net income of ¥23.0 billion.
We do appreciate our shareholders’ further understanding and support.
*1 Contract logistics is the service of providing day-to-day logistics functions (e.g., inventory
management, storage, delivery) pursuant to long-term contracts.
*2 An FPSO (floating production, storage and offloading) unit is a floating facility that produces
crude oil or gas from undersea oil or gas fields, stores it, and offloads it directly onto tankers.
May 2012
Yasumi Kudo
President
3
To Our Shareholders
May 29, 2012
Notice of the 125th Ordinary General Meeting of Shareholders
To the Shareholders of Nippon Yusen Kabushiki Kaisha:
You are cordially invited to attend the 125th 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 (orange 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. 6 through 11) 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, Tuesday, June 19, 2012.
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 25 and 26, and exercise
your vote by 5:00 p.m. Japan Time, Tuesday, June 19, 2012.
Yours faithfully
Nippon Yusen Kabushiki Kaisha
ISIN
SEDOL
TSE
JP3753000003
6643960
9101
Yasumi Kudo
President
4
1. Date:
10:00 a.m., Wednesday, June 20, 2012
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:
Proposals to be resolved:
Proposal No.1:
Proposal No.2:
Proposal No.3:
Notes:
1) The Business Report for the 125th Fiscal Year (from April 1, 2011 to
March 31, 2012), 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 125th Fiscal Year (from
April 1, 2011 to March 31, 2012)
Appropriation of surplus
Election of thirteen Directors
Election of one Corporate Auditor
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 6 to page 11 and page
14 to page 34.
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, Consolidated Financial
Statements and/or items in this Notice, the revised items will be announced on “General Shareholders
Meeting” page in “IR Event” of our website (http://www.nyk.com/english/release/IR_meeting.html).
.
5
Reference Documents for the General Meeting of Shareholders
Proposals and references
Proposal No.1:
Appropriation of surplus
For the current consolidated fiscal year, the Company recorded consolidated net loss which
resulted in decrease in the amount of retained earnings despite efforts by the Company to prevent it.
However, the Company regards a continuous and stable return of profits to shareholders as one of
the most important management issues. Therefore, the Company proposes to distribute a year-end
dividend of ¥2.00 per share as indicated below, taking comprehensive consideration for retaining an
appropriate level of internal reserves for further upheaval in the business environment and other
relevant factors. Accordingly, the total dividend for the fiscal year including the interim dividend of
¥2.00 per share amounts to ¥4.00 per share.
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
¥2.00 per share of Company common stock, total amount ¥3,392,642,514
(3) Date of validity of dividends of surplus
June 21, 2012
6
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
April 2012
4
Hidenori Hono
April 1978
(February 11, 1956) April 2002
April 2004
April 2006
June 2008
April 2009
Number of the
Company’s
shares held
110,818 shares
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
Joined the Company
82,678 shares
General Manager, Semi-Liner Group
Corporate Officer
Managing Director and 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
58,361 shares
General Manager of Car Carrier Group
Corporate Officer
Managing Corporate Officer
Director, Managing Corporate Officer
Corporate Officer
Representative Director, Executive
Vice-President Corporate Officer
(to the present)
Responsibilities
Chief Executive of Cruise Headquarters,
Automotive Transportation Headquarters,
Dry Bulk Division, and Energy Division
Joined the Company
65,395 shares
General Manager of Petroleum Group
Corporate Officer
Corporate Officer (to the present)
Responsibilities
Chief Executive of Dry Bulk Division
7
No.
Name
(Date of birth)
Number of the
Company’s
shares held
5
Tadaaki Naito
(September 30,
1955)
April 1978
April 2004
April 2005
April 2007
June 2008
April 2009
Joined the Company
56,222 shares
General Manager of Petroleum Group
Corporate Officer
Responsibilities
Chief Executive of Global Logistics
Headquarters, Chief Executive of
Technical Headquarters, Chairman of IT
Strategy Committee, Chief Information
Officer
6
Naoya Tazawa
April 1978
(October 27, 1955) April 2002
Joined the Company
49,425 shares
General Manager of Human Resources
Group
Corporate Officer
Responsibilities
Chief Executive of General Affairs/CSR
Headquarters, Chief Compliance Officer
April 2005
April 2007
June 2009
April 2010
7
Kenji Mizushima
(April 21, 1956)
April 1979
April 2007
April 2008
June 2009
April 2012
8
9
Hiroshi Hiramatsu
(February 20,
1956)
April 1978
April 2004
April 2006
April 2008
June 2009
Hitoshi Nagasawa April 1980
(January 22, 1958) April 2004
April 2007
April 2009
June 2011
Joined the Company
29,552 shares
Corporate Officer, General Manager of
Container Trade Management Group
Responsibilities
Chief Executive of Management Planning
Headquarters, Chief Financial Officer
Joined the Company
General Manager of Corporate Planning
Group
Corporate Officer
(to the present)
Responsibilities
Accounting and Finance Division
44,258 shares
Joined the Company
General Manager of LNG Group
Corporate Officer
(to the present)
Responsibilities
Chief Executive of Energy Division
40,485 shares
8
No.
Name
(Date of birth)
Number of the
Company’s
shares held
10
Yukio Okamoto
(November 23,
1945)
April 1968
January 1991
March 1991
Joined Japan’s Ministry of Foreign Affairs 34,136 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.
11
Yuri Okina
(March 25, 1960)
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)
27,325 shares
12
*Koichi Chikaraishi
(April 19, 1957)
April 1980
April 2003
Joined the Company
25,623 shares
General Manager of Petroleum Product
and LPG Group
Corporate Officer
(to the present)
Responsibilities
Vice-Chief Executive of Dry Bulk Division
April 2009
April 2012
13
April 1981
*Shunichi
April 2004
Kusunose
(October 20, 1958) April 2009
April 2012
Joined the Company
General Manager of Car Carrier Group
Corporate Officer
(to the present)
Responsibilities
Chief Executive of Automotive
Transportation Headquarters
27,985 shares
The asterisk (*) indicates newly nominated candidates for Directors.
9
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. In October 2008, the company 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
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 both Companies’ compliance systems with
various measures, including reviewing the Companies’ 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 four 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 as stipulated in
Article 33 of the Articles of Incorporation established under Article 427, Paragraph 1 of the
Corporation Law setting forth that the liability under Article 423, Paragraph 1 of the same
Law shall be the liability limit of ¥20 million or the liability limit stipulated by law, whichever
is greater, as long as the Outside Director performs his/her duty in good faith and without
gross negligence on his/her part. 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.
10
Proposal No.3:
Election of one Corporate Auditor
The term of Corporate Auditor Takaji Kunimatsu will expire upon conclusion of this meeting.
The Company therefore recommends and proposes the following one (1) candidate for election as
Corporate Auditor.
The Board of Corporate Auditors has previously given its approval.
Career summary and
Name
(Date of birth)
April 1967
July 1996
Number of the
Company’s
shares held
Joined Prime Minister’s Office
0 shares
Director-General of Personnel Bureau,
Management and Coordination Agency
*Mitsuoki Kikuchi
July 1997
Director-General of the Secretariat of the
(August 21, 1943)
Agency
July 1999
Vice-Minister of the Agency
January 2001
position
April 2001
President, the National Archives of Japan,
an Independent Administrative Institution
July 2009
Advisor of the National Archives of Japan
(to the present)
The asterisk (*) indicates a newly nominated candidate for Corporate Auditor.
Notes: 1. No transactions or special interests exist between the Company and Mr. Mitsuoki Kikuchi.
2. Mr. Mitsuoki Kikuchi 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 Outside
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.
3. The Company is proposing the election of Mr. Mitsuoki Kikuchi as an Outside Corporate
Auditor in order to reflect his extensive experiences as a senior government officer and
insight accumulated through such experiences in the audit of the Company and believes
that his experiences and insight will contribute to the audit of the Company.
4. 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 as stipulated in Article 43 of the Articles of Incorporation established under Article
427, Paragraph 1 of the Corporation Law setting forth that the liability under Article 423,
Paragraph 1 of the same Law shall be the liability limit of ¥20 million or the liability limit
stipulated by law, whichever is greater, as long as the Outside Corporate Auditor performs
his/her duty in good faith and without gross negligence on his/her part. In the event that the
proposed election of Mr. Mitsuoki Kikuchi is approved, the Company will conclude such
liability limitation agreement with him.
11
Business segment results
12
Assets by business segment
(In 100 millions of yen)
The 122nd term The 123rd term The 124th term The 125th term
(current term)
FY2008
FY2009
FY2010
FY2010
Liner Trade
Terminal and
Harbor Transport
Global
Logistics Air Cargo
Transportation
Logistics
2,984
2,758
2,593
2,615
1,318
1,359
1,381
1,584
714
643
599
697
1,976
2,084
2,152
2,052
12,453
12,376
13,027
12,956
Cruises
397
332
273
281
Real Estate
512
567
538
545
Other
4,925
5,075
5,075
4,575
Total
25,282
25,198
25,642
25,309
Adjustments
(4,569)
(3,127)
(4,374)
(4,087)
Consolidated
20,712
22,071
21,268
21,222
Bulk Shipping
Others
Notes: 1. Business segment results show figures before elimination of internal transactions between
segments.
2. 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).
3. From this fiscal year, we have revised some parts of operations and services associated with
“Terminal and Harbor Transport”, “Logistics”, and “Bulk Shipping” in conjunction with the realignment
of the NYK Group’s Logistics business. Any changes from this review are not reflected in the above
stated segment results for the 122nd, 123rd, and 124th terms.
Additionally, starting from this fiscal year, the eight business segments have been divided and
presented as the three categories of the Global Logistics, Bulk Shipping, and Others, as indicated in
the above table.
13
The 125th Ordinary General Meeting of Shareholders
Documents attached to the Notice of Ordinary General Meeting of Shareholders
Business Report (From April 1, 2011 to March 31, 2012)
1. Overview of Operations for NYK Group
(1) Business Progress and Results
1)
Business Progress and Results for Current Fiscal Year
The global economy in the current fiscal year showed a weak overall recovery tendency after
enormous damage to supply chains in key manufacturing businesses in Japan including automotive
and electrical manufacturers as a result of the Great East Japan Earthquake and the Thai floods,
which also had a significant impact on seaborne cargo volume.
In Europe, there has been a growing sense of insecurity with regard to the financial system since
the financial crisis in Greece and other areas, and the U.S. has not seen sufficient economic
recovery in the current fiscal year.
There were also many issues of concern in the economies of emerging countries that are driving
the global economy, including China’s real estate market bubble and the slowdown of India’s
economic expansion.
Under such challenging business conditions, the consolidated results in the FY2011 were
revenues of ¥1,807.8 billion (6.3% decrease over the previous year), operating loss of ¥24.1 billion,
recurring loss of ¥33.2 billion, as the NYK Group recorded a drop in year-on-year revenue and
posted a loss. Although the NYK Group’s consolidated results for the upcoming periods are
expected to recover, net loss of ¥72.8 billion was posted due primarily to a reversal of deferred tax
assets of the Company in accordance with the related accounting standard.
The reversal of deferred tax assets represents the necessary accounting treatment associated
with the unconsolidated net loss recorded by the Company as of the end of the current fiscal year
due mainly to losses in the shipping business and the future estimated taxable income of the
Company. As this accounting treatment does not entail a cash charge, it will not impact the
Company’s cash flow in any way.
2)
Overview of the Business Segments
I. Global Logistics
(i) Liner Trade
With the frequent introduction of newly built large containerships and upgrading of services by
other companies, the amount of space supplied far exceeded the transport volume, leading to a
major drop in freight rate levels across the board on the Pacific, European, and Central and South
American container routes. Although efforts were made to reduce costs such as thorough
implementation of slow-steaming to cut down on fuel oil consumption, rationalization of services by
reorganizing alliances, and promotion of a light-asset business model, performance declined
significantly, in spite of a year-on-year increase in cargo volume, due to the increasing price of fuel
and the continuing sharp yen appreciation and others. On the other hand, we took measures to meet
logistics demand in areas of growth, by establishing new services between China and India, and
between Asia and the Middle and Near East, where economies continue to grow.
The conventional liner routes operated by NYK-HINODE LINE, LTD. posted a loss due to a delay
in the start of transportation of modules for LNG project, and the suspension of shipping routes in
Africa due to the piracy problem.
(ii) Terminal and Harbor Transport
Handling volumes at domestic and overseas container terminals continued to increase due to the
worldwide recovery in container transport volume. As a result, the NYK Group’s terminal and harbor
transport business, including tag boat business and others, recorded increased revenues and profits
over the previous period.
14
(iii) Air Cargo Transportation
NIPPON CARGO AIRLINES CO., LTD. (NCA) experienced a revenue decline compared to the
previous period largely as a result of a rise in fuel prices coupled with slowdown in airfreight
shipments from Japan and Asia due mainly to uneasiness in European countries. However, NCA
remained profitable by actively pursuing continuous cost reductions and nimbly redeploying aircraft
to capture urgent transport demand in the aftermath of the Great East Japan Earthquake and the
Thai floods.
(iv) Logistics
Although the handling volume of air and seaborne cargo was down in most regions as supply
chains worldwide suffered damages resulting from the Great East Japan Earthquake, transport
volumes have since shown a recovery tendency. There was a temporary downturn in transport
volume of cargo from Asia due to the effect of the Thai floods, but we were able to improve revenues
by taking in demand related to reconstruction. Logistics operations were adversely affected by the
North American and European economic slowdown despite the various cost-cutting efforts. As a
result of above, the logistics segment as a whole achieved increased profits despite a decline in
revenues over the previous period.
The Company and YUSEN LOGISTICS CO., LTD. have nearly completed the final phase of their
business integration, which had been promoted in a step-by-step manner since October 2010, with
the April 2012 merger of their Chinese, Malaysian, and Indonesian operations. Going forward, the
logistics segment will continue to develop network linkages among the sea, land, and air business
networks, improve asset efficiency, and effectively utilize its human resources.
II. Bulk Shipping
In the car carrier division, finished automobile transport operations were significantly affected by
the two disruptions in the automobile manufacturing supply chain resulting from the Great East
Japan Earthquake and the Thai floods. Despite recovery efforts by manufacturers who increased
production during the second half of the fiscal year, the number of vehicles transported inevitably
declined, and performance results were also down compared to the previous period. Six new large
vessels were added to the fleet during the current fiscal year, while four aging vessels were laid up
and sold for scrap or redelivered.
In the auto logistics business, we pressed ahead with finished automobile terminal operations in
China, Thailand, Singapore, and Europe, while expanding the scale of finished automobile land
transport business, delivery logistics center operations, and the PDI* business in emerging countries
such as China, India, and nations in Southeast Asia.
*Note: PDI (Pre-Delivery Inspection) business provides maintenance and inspection service
prior to delivery to the dealer.
In the dry bulk carrier division, although transport volume was up, growth in seaborne cargo
traffic slowed relative to the previous fiscal year in response to record high prices for iron ore and
coal. On the other hand, the volume of completed new bulkers reached its highest ever level, and
shipping tonnage increased significantly, climbing to four times the volume of the disposed vessels.
With the sentiment of an oversupply in bulk carriers, market conditions for the current fiscal year fell
below those of the previous period in freight rates across all regions and types of bulk carriers. In
particular, market conditions for capesize bulkers were at a low level from the beginning of the fiscal
year, falling below those for small-medium bulkers. In September, the capesize bulker market
skyrocketed, and the balance among vessel types was temporarily normalized; however, the market
plummeted again this year to levels below those for small-medium bulker market. Performance
results for the dry bulk carrier division decreased year-on-year for all vessel types, with capesize
bulkers in particular recording a significant deterioration in profit/loss.
In the situation surrounding the tanker division, economic growth in emerging countries drove up
global demand for energy, while the effect of the “Arab Spring” heightened geopolitical risk in the
Middle East and North Africa, and the problems in Iran escalated, causing greater uncertainty
regarding the energy supply. As a result, oil prices approached record highs, and seaborne cargo
volumes for crude oil and petroleum products were only slightly up compared to the previous period.
15
Meanwhile, looking at the volume of completed new carriers, VLCC (Very Large Crude Oil Carriers)
rose to their highest ever level, and small-medium tankers were on a par with the previous period.
However, disposal of vessels was not progressing, and an oversupply in tankers has not been
resolved. In response to the sentiment of an oversupply in tankers, the market situation experienced
a downward trend in the first half of the fiscal year, and, although VLCC market conditions recovered
suddenly due to alternative procurement of crude oil resulting from economic sanctions against Iran
in the second half of the fiscal year, market conditions for petroleum products tankers were sluggish.
LNG market conditions turned favorable, with considerable growth in demand for transport. The
offshore business took delivery of its first drillship and began preparing for its operation.
Performance was down in the tanker division as a whole, which recorded a year-on-year decrease in
revenue and posted a loss.
III. Others
(i) Cruises
In the North American market, Crystal Cruise experienced sluggish sales as U.S. consumer
sentiment was dampened by global economic uncertainties such as the financial crisis in Europe. In
the Japanese market, Asuka Cruise’s sales also decreased, largely as a result of the Great East
Japan Earthquake. The cruises segment's overall revenues declined and its loss worsened relative
to the previous period, partly due to higher bunker oil prices.
(ii) Real Estate and Other Business Services
The real estate business’s revenues and profits decreased from the previous period in the wake
of a decline in rents due to a slump in market conditions.
In other business services, the trading business including the NYK TRADING CORPORATION
achieved revenue growth by virtue of higher prices for bunker oil, its main product. Overall, the other
business services segment achieved year-on-year revenue growth, and a profit was posted.
Please refer to the “Business segment results” given on page 12.
3)
Safety and Environment
At the core of the NYK Group’s management is the principle of ensuring the safe operation of its
vessels and conservation of environment. 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 where the Company participates in management, and which
graduated its first class in September of last year. 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.
Moreover, the NYK Group is also actively developing innovative environmental technology
together with its wholly owned subsidiary MTI to realize environmental-load reducing and
energy-conserving vessels. 9 technology-development projects were selected by the Ministry of
Land, Infrastructure, Transport and Tourism (MLIT) for subsidies during 2011 in the ministry’s
“Support for Technology Development for Curtailing CO2 from Marine Vessels”. One of the target
projects is a capesize bulker equipped with the world’s first hybrid turbocharger*, which has been
launched into service, and its energy conserving effect is now being verified during an actual voyage.
*Note: The hybrid turbocharger is a device that uses the energy of exhaust gas emitted from the
engine to rotate a turbine at high speed, then drives a compressor by the turbine, and finally
supplies combustion air to the engine. While utilizing waste energy, a turbocharger boosts the
output power of the engine by enabling it to aspirate at a level higher than that for the original
engine displacement. In addition to these basic functions, a hybrid turbocharger utilizes the extra
16
rotational power generated by the turbine for electric power generation.
(2) Financing and Capital Investment Activities
The Group acquired necessary funds for the current fiscal year mainly from its own assets,
borrowing from financial institutions, and by issuing corporate bonds. Borrowed funds as of March 31,
2012 (including corporate bonds) totaled ¥1,067.1 billion, an increase of ¥85.1 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 ¥309.2 billion. In the above mentioned two businesses, we made
investment of ¥27.2 billion and ¥253.1 billion respectively, primarily for ship construction and other
facilities. Other than above, we made investment of ¥4.7 billion for terminal equipment, towing
vessels and the like in the terminal and harbor transport business, ¥10.0 billion for aircraft in the air
cargo transportation business, ¥5.9 billion for transportation equipment and information system
development in the logistics business, ¥2.6 billion in the cruises business, ¥4.0 billion in the real
estate business, and ¥1.3 billion in other business services.
The Company made a resolution at the Board of Directors’ meeting held on May 31, 2012 which
enables it to issue unsecured straight bonds for a maximum amount of ¥60 billion. Based on this
resolution, the Company determined on June 12, 2012 to issue such bonds for a total amount of ¥40
billion.
(3) Management Perspectives
1)
Dealing with Rapidly Changing External Conditions
The business environment surrounding the NYK Group changed dramatically due to the Great
East Japan Earthquake in March of last year, the Thai floods last summer, the financial crisis in
Europe, the sharp rise of the yen, the soaring price of fuel, and other factors.
The NYK Group is taking measures to improve business performance and overcome the drastic
changes in the environment by striving to reduce costs across the board, including cutting back on
fuel consumption. We are diligently implementing initiatives such as reorganization of shipping
routes, including alliance mergers, for container vessels; enhancing the utilization of aircraft
operated by NIPPON CARGO AIRLINES, CO., LTD., in the air cargo transportation business;
organizing and optimizing the fleet by canceling chartered ships and disposing of aging vessels in
the bulk shipping business; and fundamentally revising sales strategies in the cruises business.
Furthermore, we have reduced Directors’ compensation, and in February of this year commenced a
three-pronged project to eliminate waste, inconsistency, and irrationality in all business operations
throughout the company, including management sections, in a campaign to create a strong and
competitive organization through unremitting structural reform.
As for the business climate that lies ahead, we cannot expect much from Europe and the U.S.
where growth is low; however, expanding consumption in Asian countries will be a dynamic force for
strong growth, and we believe that expansion of consumption in Asian countries, home to more than
half the world’s population, will be the driver of global economic growth.
In the “More than Shipping 2013” medium-term management plan announced last year, the NYK
Group committed itself to taking in the rapid growth in Asia, aiming to expand the high added-value
business with stable freight rates, and combining traditional shipping with value-added strategies.
Going forward, we will further enhance our efforts to put these strategies into practice.
Specifically, we will take in the rapidly expanding cargo business centered on Asia, by further
strengthening functions of land-based contract logistics* of the global logistics business, focusing on
consumer commodities.
With regard to the bulk shipping business, we are working to optimize positioning and operation
of vessels while focusing on fuel efficiency in the car carrier division where demand is expected to
recover, and at the same time, enhancing the terminal business and the inland transport network in
emerging countries as part of the strategy to “combine traditional shipping with value-added
strategies”, in the aim of improving the added value of our services. In addition, we will press ahead
17
with steady enhancement of the fleet in response to actual demand in the growth fields of LNG
transport, which requires advanced technological capacity, and the offshore business. In the dry bulk
carrier and tanker divisions, although market conditions are expected to remain challenging for some
time due to the gap between supply and demand for shipping capacity, demand is steadily growing in
Asia and emerging countries in other regions and we are pursuing the cultivation of customers
overseas.
Through these measures, the NYK Group will devote the united strength of the entire Group to its
greatest challenge, the improvement of performance.
*Note: Contract logistics is the service of providing day-to-day logistics functions (e.g., inventory
management, storage, delivery) pursuant to long-term contracts.
2)
Environmental Issue Initiatives
Taking environmental conservation as one of the most vital management issues, the NYK Group
aims to reduce CO2 emissions by 10% by 2015, compared to 2010. Based on a long term vision, we
are working to implement changes to the environmentally friendly business model, including the
development of innovative environmental technologies such as the “NYK Super Eco-ship 2030”, and
reduction of fuel consumption through instant sharing of information between land and sea and the
pursuit of optimal operation of vessels. In addition, we are putting efforts into environmental
measures in advance of regulation such as installation of ballast water management system.
3)
CSR (Corporate Social Responsibility) Management Strengthening
Recognizing that CSR is the foundation that supports growth strategies, the NYK Group will
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 the highest-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”.
In light of the experience of the Great East Japan Earthquake during the current fiscal year, we
revised and reinforced our disaster preparation measures and business continuity plan (BCP). We
will continue our endeavors to live up to the expectations of local communities, those involved in our
businesses, and all our stakeholders in the future as well.
(4) Financial Position and Results of Operation
1)
Consolidated Financial Position and Results of Operation
Category
Revenues
Recurring profit (loss)
Net income (loss)
Net income (loss) per share
Total Assets
Equity
Equity per share
(In millions of yen)
The 122nd
term
The 123rd
term
The 124th
term
The 125th
term
(current term)
FY2008
FY2009
FY2010
FY2011
2,429,972
1,697,342
1,929,169
1,807,819
140,814
(30,445)
114,165
(33,238)
56,151
(17,447)
78,535
(72,820)
45.73 (yen)
(12.71) (yen)
46.27 (yen)
(42.92) (yen)
2,071,270
2,207,163
2,126,812
2,122,234
581,237
703,394
728,094
622,490
443.16 (yen)
389.46 (yen)
403.46 (yen)
341.54 (yen)
18
Note:
Net income (loss) per share is calculated on the basis of the average number of shares outstanding in
each fiscal year, and equity per share is calculated on the basis of the total number of shares
outstanding at each term end. In addition, the total number of issued shares excludes the number of
treasury stock.
19
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
The level of freight rates improved due to rapid recovery in container transport volumes in the first half of
the fiscal year, and performance in the car carrier division recovered steadily throughout the year, leading
to increased revenue and profit posted in the marine transport business. Performance improved in the
logistics, and terminal and harbor transport businesses due to an increase in handling volumes, and the
air cargo transportation business also posted a profit. As a result, performance was up from the previous
period for each profit/loss figure.
The 125th fiscal year (current term)
Conditions in the current fiscal year are described in the preceding “Business Progress and Results” (on
page 14-17).
Regarding assets and profit and loss of each segment, refer to “Business segment results” and “Assets by
business segment” on page 13.
2)
Unconsolidated Financial Position and Results of Operation
Category
Revenues
Recurring profit (loss)
Net income (loss)
Net income (loss) per share
Total Assets
Equity
Equity per share
Note:
The 122nd
term
The 123rd
term
The 124th
term
The 125th
term
(current term)
FY2008
FY2009
FY2010
FY2011
1,240,421
808,125
970,318
915,862
113,190
(31,696)
58,815
(43,873)
16,076
(7,212)
26,741
(64,855)
13.09 (yen)
(5.26) (yen)
15.76 (yen)
(38.22) (yen)
1,138,526
1,408,463
1,442,434
1,450,772
408,989
526,351
534,894
456,199
333.09 (yen)
310.01 (yen)
315.21 (yen)
268.93 (yen)
Net income (loss) per share is calculated on the basis of the average number of shares outstanding in
each fiscal year, and equity per share is calculated on the basis of the total number of shares
outstanding at each term end. In addition, the total number of issued shares excludes the number of
treasury stock.
20
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
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.
The 125th fiscal year (current term)
Performance declined due to sluggish cargo demand for container vessels, added to a drop in freight rate
levels because of the volume of new large carriers completed. Transport volume of automobiles stalled as
a result of the impact of the Great East Japan Earthquake and the Thai floods, and continuing supply
pressure from newly completed carriers meant no improvement in market conditions for dry bulkers and
tankers, which remained stagnant. As a result, losses were posted for each profit/loss figure.
(5) Principal Business of the Consolidated (as of March 31, 2012)
Liner trade, terminal and harbor transport, air cargo transportation, logistics, bulk shipping, cruises, real
estate and other business services.
(6) Principal Business Offices (as of March 31, 2012)
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
21
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
(7) Status of Principal Lenders of NYK (as of March 31, 2012)
Lender
Outstanding Balance (Millions of yen)
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
87,530
NIPPON LIFE INSURANCE CO.
84,293
MEIJI YASUDA LIFE INSURANCE CO.
54,018
DEVELOPMENT BANK OF JAPAN INC.
47,676
SUMITOMO LIFE INSURANCE CO.
26,840
THE DAI-ICHI LIFE INSURANCE CO.,LTD.
17,156
THE NORINCHUKIN BANK
18,675
CHIBA BANK, LTD．
16,254
NATIONAL MUTUAL INSURANCE FEDERATION OF
AGRICULTURAL COOPERATIVES
12,284
SUMITOMO MITSUI BANKING CO.
Note:
8,761
In addition to the above, the Company has a total of ¥100,150 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.
22
(8) Employees (as of March 31, 2012)
1)
Employees of the Consolidated
Number of employees Year-on-year change
(persons)
(persons)
Segment
Global Logistics
Liner Trade
4,003
(87)
Terminal and Harbor Transport
2,731
368
Air Cargo Transportation
Logistics
Bulk Shipping
Cruises
Others
Real Estate
Other
Company-wide (common)
Total
Note:
2)
737
21
16,155
(407)
2,294
368
486
28
64
2
1,737
(163)
291
7
28,498
137
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
1,248
3
[seamen on land out of above]
[241]
[7]
343
(16)
1,591
(13)
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.
23
(9) State of Vessels of the Consolidated (as of March 31, 2012)
Business Segments
Type of vessel
Segment
Container ships (including
semi-container ships)
Liner Trade
Owned
Chartered
Total
Owned
Other
Chartered
Bulk carriers (Capesize)
Bulk carriers (Handysize)
Bulk Shipping
Car carriers
Cruises
Cruise ships
Note:
9
198,504
10
173,657
372,161
Chartered
77
14,539,078
112
21,041,640
Owned
39
3,327,491
Chartered
54
4,474,423
Total
93
7,801,914
Owned
53
2,155,552
Chartered
96
4,365,530
149
6,521,082
Owned
13
584,622
Chartered
43
2,264,639
Total
56
2,849,261
Owned
33
549,708
Chartered
88
1,623,924
121
2,173,632
53
9,100,706
Chartered
32
3,860,535
Total
85
12,961,241
Owned
25
1,857,692
3
228,211
Total
28
2,085,903
Owned
17
160,067
Chartered
26
372,857
Total
43
532,924
Owned
2
13,417
Chartered
1
8,160
Total
3
21,577
310
25,783,535
Owned
Total
4,239,412
5,572,626
6,502,562
Chartered
Other
98
129
19
Owned
LNG carriers
1,333,214
35
Total
Tankers
31
Total
Total
Wood Chip carriers
K/T (dwt)
Owned
Total
Bulk carriers (Panamax)
Number of
vessels
Chartered
528
36,150,426
Total
838
61,933,961
The number of vessels in possession includes shared vessels; their deadweight tonnages include the
weight of other owners’ portions.
24
(10) Status of Major Business Combination (as of March 31, 2012)
1)
Changes and results of business combinations
NYK Group is engaged in business in eight segments consisting of liner trade, terminal and harbor
transport, air cargo transportation, logistics, bulk shipping, cruises, real estate, and other business
services.
NYK Group has 675 consolidated subsidiaries and 120 equity-method companies as of March 31,
2012.
For changes and results of business combinations, see the preceding “Business Progress and
Results” (on page 14-17) and “Financial Position and Results of Operation” (on page 18-20).
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 419 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
59.77 Freight forwarding business, etc.
¥934 million
80.30 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
Oceanian areas
US$4 million
£81.49 million
SP$12.8 million
A$8.4million
US$86.388 million,
(total of 102 companies)
100.00
¥20,717 million
(all companies)
Vessel owning and chartering
(total of 318 companies)
Notes: 1. Percentage of voting rights includes indirect holdings.
2. ADAGIO MARITIMA S.A. and 419 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.
25
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
30.02
Marine transportation business
NS UNITED KAIUN KAISHA,
LTD.
KYOEI TANKER CO., LTD.
Note:
Main Operations
Percentage of voting rights includes indirect holdings
(11) Other significant matters on operations for NYK Group
1)NIPPON CARGO AIRLINES CO., LTD. (NCA), wholly owned subsidiary, received a notification in
November 2010 from the Korean Fair Trade Commission of a charge to be levied as a violation of the
Korean Fair Trading Law. NCA finds some contents to be unacceptable and filed an appeal for its
cancellation in December 2010. However, NCA received the judgment that the part of its appeal was
dismissed on May 16, 2012. As a result of our review of the judgment, we appealed to the Supreme Court
on June 1,2012.
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. Although YUSEN LOGISTICS CO., LTD. appealed against the two orders
and filed a motion for the commencement of hearings with the JFTC in April 2009, the motion was
denied in July 2011. YUSEN LOGISTICS CO., LTD. then appealed against this decision and filed an
action for revocation in August 2011 and the case is currently under litigation.
2. Status of Shares (as of March 31, 2012)
(1) Total number of shares authorized to be issued
2,983,550,000 shares
(2) Number of shares issued
1,696,321,257 shares
Note:
The numbers exclude 4,229,731 shares of treasury stock.
(3) Number of shareholders
152,411 persons
(increased by 4,348 from the previous year)
26
(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)
117,232
6.91
JAPAN TRUSTEE SERVICES BANK, LTD. (Trust account)
105,999
6.25
THE MASTER TRUST BANK OF JAPAN, LTD. (MITSUBISHI HEAVY
INDUSTRIES, LTD. ACCOUNT (RETIREMENT ALLOWANCE
TRUSTEE ACCOUNT))
54,717
3.23
TOKIO MARINE & NICHIDO FIRE INSURANCE CO., LTD.
46,435
2.74
JAPAN TRUSTEE SERVICES BANK, LTD. (Trust account 9)
45,343
2.67
MEIJI YASUDA LIFE INSURANCE CO.
34,973
2.06
SSBT OD05 OMNIBUS ACCOUNT – TREATY CLIENTS
34,168
2.01
MIZUHO CORPORATE BANK, LTD.
22,867
1.35
TRUST & CUSTODY SERVICES BANK, LTD. (4 Securities trust
accounts)
22,000
1.30
NATIONAL MUTUAL INSURANCE FEDERATION OF
AGRICULTURAL COOPERATIVES
21,962
1.29
Note:
Investment ratio was computed excluding total treasury stock of 4,229,731 shares.
(5) Treasury Stock
Shares held as of the end of the preceding term
Common Stock
3,628,714 (shares)
Common Stock
718,524 (shares)
Shares purchased in the current term
Less-than-One-Unit Share Purchased
Total price of acquisition
140,604,805
(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
117,507 (shares)
23,671,612
(yen)
None
Common Stock
27
4,229,731 (shares)
3. Status of Stock Acquisition Rights, etc. (as of March 31, 2012)
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
89 units (initially 11,000 units)
Common stock
572,008 shares
Class and number of shares subject to stock
acquisition rights
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
Note:
October 4, 2006 to September 10, 2026
Some of the corporate bonds above were subject to advanced redemption on September 20, 2011.
28
4. Executives of NYK
(1) Directors and Corporate Auditors (incumbents from June 24, 2011 to March 31, 2012)
Position
Name
Chairman,
Chairman Corporate
Officer
Koji Miyahara
President,
President Corporate
Officer
Yasumi Kudo
Representative
Director,
Senior Managing
Corporate Officer
Responsibilities and significant concurrent positions
Vice-Chairman of Nippon Keidanren
Masahiro Kato
Chief Executive of Automotive Transportation
Headquarters, Chief Executive of Energy Division,
Chief Executive of Cruise Headquarters,
Hidenori Hono
Chief Executive of Dry Bulk Division
Tadaaki Naito
Chief Executive of Management Planning Headquarters
Masamichi Morooka Chief Executive of Technical Headquarters
Naoya Tazawa
Chief Executive of General Affairs/CSR Headquarters
Toshinori Yamashita Chief Executive of Global Logistics Headquarters
Hiroshi Hiramatsu
Director,
Managing Corporate
Officer
Kenji Mizushima
Hitoshi Nagasawa
Outside Director
(part-time,
Independent Director)
Corporate Auditor
(full-time)
Outside Corporate
Auditor (part-time,
Independent Auditor)
Yukio Okamoto
Yuri Okina
Accounting and Finance Division
Liner Trade Division
Vice-Chief Executive of Energy 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)
Naoki Takahata
Mikitoshi Kai
Takaji Kunimatsu
Chairman of HEM-NET:EMERGENCY MEDICAL
NETWORK OF HELICOPTER AND HOSPITAL
Representative Director of Crime Victims Assistance
Fund, Public Interest Incorporated Foundation
Fumio Kawaguchi
Advisor of Chubu Electric Power Company, Incorporated
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. Takaji Kunimatsu and Fumio Kawaguchi are Outside Corporate
Auditors as stipulated in Article 2, Item 16, of the Corporation Law.
3. Of significant concurrent positions as executive officers or outside officers of Outside Directors and
Corporate Auditors, the Company has business relations with MITSUBISHI MATERIALS CORP.
such as coal transport transactions and with MITSUBISHI MOTORS CORP. such as automobile
29
transport transactions. The Company has no particularly notable business relations with the other
significant concurrent positions.
4. Of Corporate Auditors, Mr. Naoki Takahata served as a Director in charge of financial affairs of NYK
and has considerable expertise in finance and accounting.
5. Retired Director and Corporate Auditors and newly appointed Director and Corporate Auditors
during the current fiscal year are as follows:
<Retirement>
Director
Yasushi Yamawaki
Corporate Auditor
(full-time)
Corporate Auditor
(part-time)
Yukio Ozawa
Hidehiko Haru
(Retired at the expiration of his term in office on Jun. 23,
2011)
2011)
2011)
<New appointment>
Hitoshi Nagasawa
(Appointed on Jun. 23, 2011)
Corporate Auditor (full-time)
Corporate Auditor (part-time)
Mikitoshi Kai
Fumio Kawaguchi
6. As of April 1, 2012, Executive Corporate Officers who also serve as Directors are relocated as
follows:
<As of March 31, 2012>
Representative Director, Senior Managing Masahiro Kato
Corporate Officer
<After relocation>
Representative Director,
Executive Vice-President
Corporate Officer
Representative Director, Senior
Kenji Mizushima
Representative Director, Senior Managing Masamichi Morooka
Corporate Officer
Director
Representative Director, Senior Managing Toshinori Yamashita Director
Corporate Officer
7. The Company filed Mr. Yukio Okamoto, Ms. Yuri Okina, Mr. Takaji Kunimatsu and Mr. Fumio
Kawaguchi 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, 2012)
Position
Name
Chairman,
Chairman Corporate Officer
Koji Miyahara
President,
President Corporate Officer
Yasumi Kudo
Representative Director,
Executive Vice-President Corporate Officer
Masahiro Kato
Hidenori Hono
Tadaaki Naito
Corporate Officer
Naoya Tazawa
Kenji Mizushima
30
Position
Name
Hiroshi Hiramatsu
Director,
Hitoshi Nagasawa
Hiroshi Hattori
Fukashi Sakamoto
Koichi Akamine
Takashi Abe
Yasuo Tanaka
Koichi Chikaraishi
Shunichi Kusunose
Takuji Nakai
Hidetoshi Maruyama
Yoko Wasaki
Masahiro Samitsu
Kunihiko Miyoshi
Yuji Isoda
Kenichi Miki
Hitoshi Oshika
Corporate Officer
Kazuo Ogasawara
Chak Kwok Wai
Keizo Nagai
Tsutomu Shoji
Yoshiyuki Yoshida
*Kazuo Kato
*Eiichi Takahashi
*Susumu Tanaka
Notes: 1. Corporate Officers retired as of March 31, 2012 are as follows:
Masamichi Morooka, Toshinori Yamashita, and Yasuyuki Usui
2. The asterisks (*) indicate newly appointed Corporate Officers on April 1, 2012.
3. Mr. Kazuo Kato concurrently serves as Director and Managing Corporate Officer of the Company’s
consolidated subsidiary, YUSEN LOGISTICS CO., LTD.
31
(3) Remuneration Paid to Executives
Category
Number of
persons
remunerated
Yearly
remuneration
Total Amount of
remuneration
paid
Bonus
Directors
[Outside Directors out of
above]
14
[2]
¥553 million
[¥37 million]
-
¥553 million
[¥37 million]
Corporate Auditors
[Outside Corporate Auditors
out of above]
6
[3]
¥90 million
[¥24 million]
-
¥90 million
[¥24 million]
Total
[Outside Executives out of
above]
20
[5]
¥643 million
[¥61 million]
-
¥643 million
[¥61 million]
Notes: 1. Amount of remuneration payment to the Directors includes the remuneration to one Director who
retired during the fiscal year.
2. Amount of remuneration payment to the Corporate Auditors includes the remuneration to two
Corporate Auditors who retired during the fiscal year.
3. There is no payment of bonus for Directors for the 125th term.
4. 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 ¥95 million retirement benefit for termination to one Director 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,
Takaji Kunimatsu
(Appointed on Mar. 13, 2008)
Corporate Auditor
(Part-time, Outside Corporate Auditor,
Fumio Kawaguchi
Status of Attendance and Stating of Opinions
Attended all 14 meetings of the Board of Directors held
during this fiscal year (100% 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 Board of Directors (100% of
attendance rate) and all the 17 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.
Attended all the 11 meetings of the Board of Directors
(100% of attendance rate) and all the 13 meetings of the
Board of Corporate Auditors since his assumption of office,
and when necessary made statements mainly from his
considerable experience in corporate management and
financial policies, etc.
32
(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, according to Articles 33 and 43
of the Articles of Incorporation stipulated in accordance with Article 427, Paragraph 1 of the same Law.
Based on these agreements, liability for damages is limited to ¥20 million 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
¥164 million
Total of cash and other financial profits payable by the Company and its
subsidiaries to the Independent Auditor
¥309 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.
33
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 29,
2012 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.
34
(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 thorough 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 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, which aims to develop as
a comprehensive global-logistics enterprise having a strong commitment to CSR management, and to
enable the NYK Group to secure and enhance its corporate value and common interests of the
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. However, we cannot deny that among
Large-scale Purchase, there are those (a) where the time and/or information needed for shareholders and
the board of directors of the Company is not provided, (b) that are abusive because only the benefit to the
purchasing party itself has been considered, and (c) where there is a risk of damage to the Company’s
corporate value and common interests of shareholders. The Company believes that the party making
such kind of purchase action is not an appropriate party who controls the Company’s financial and
business policy.
(2) Outline of specifics of special measures that will help achieve the Basic Policy
1)
Medium-term management plan
The Company formulated four (4) strategic pillars under “More Than Shipping 2013”, the Company’s
three-year medium-term management plan starting from April 2011, to achieve further growth by taking in
Asian growth. The Company revised the numerical targets of this plan in April of this year due to the
upheaval in management environment surrounding the shipping and logistics businesses, but there has
been no change to the strategic pillars.
2)
Corporate governance
The Company aims to improve transparency of its corporate management and to enhance the function
of the Board of Directors while strengthening its function to monitor management by implementing several
measures including introduction of Corporate Officers system and reduction in the number of Directors,
appointment of two (2) Outside Directors, and reduction of the Directors’ term of office to one (1) year.
Further, a notice of the general meeting of shareholders is sent three (3) weeks before the meeting is held,
providing our shareholders with sufficient time to consider proposals.
3)
Dividend policy
The Company maintains the Basic Policy of continuously making stable dividend payments, based on
thorough consideration of payout ratio, the Company’s forecast 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.
35
(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
The Company adopted “Measures for Large-scale Purchases of NYK Share Certificates for the
Purpose of Securing and Enhancing Corporate Value and the Common Interests of Shareholders” at the
121st Ordinary General Meeting of Shareholders of the Company held in June 2008 and renewed it for
three (3) years with partial revision at the 124th Ordinary General Meeting of Shareholders of the
Company held in June 2011.
The outline of the Plan is as follows:
1) Large-scale Purchases to which the Plan is applied shall be any purchases, etc. or tender offers
which will be carried out without the consent of the Board with which the ratio of holding or
ownership of the Company’s share certificates becomes 20% or more.
2) A Large-scale Purchaser is required to submit to the Company a letter of intention prior to
undertaking the Large-scale Purchase. Upon receipt of the Letter of Intention, the Board will
request the Large-scale Purchaser to submit the Explanation of Purchase setting forth required
information regarding the Large-scale Purchase.
3) 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
(3) members of the Outside Directors and outside experts, and consult with the Independent
Committee as to whether or not it is appropriate to implement the countermeasures against the
Large-scale Purchase. The Independent Committee shall prepare the report making
Implementation
Recommendation,
Non-implementation
Recommendation
or
other
recommendation within sixty (60) days as a general rule from the date on which the submission of
the Explanation of Purchase is completed. The Board shall give utmost respect to such
recommendations.
4) The Board may:
a. adopt a resolution to implement countermeasures with obtaining an Implementation
Recommendation of the Independent Committee when the Large-scale Purchaser does not comply
with the required procedures;
b. as a general rule, adopt a resolution to implement countermeasures without obtaining a resolution
of the general meeting of shareholders when the Independent Committee makes an
Implementation Recommendation following a determination that the Large-scale Purchaser is an
Abusive Acquirer; and
c. convene a general meeting of shareholders and upon obtaining a resolution to approve the
implementation of countermeasures, and may adopt a resolution to implement countermeasures
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.
5) The Board shall choose a countermeasure, as against the Large-scale Purchase, which the Board
determines the most appropriate method as of that timing, such as the Allotment of Stock
Acquisition Rights (Without Consideration), taking into consideration the opinion of the
Independent Committee. However, no cash shall be provided to a part of holders of the Stock
Acquisition Rights even when the Stock Acquisition Rights will be issued.
(4) The Board Decision and the Reasons regarding the measures stated in (2) and (3)
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, and as the measures stated in (3)
satisfies the principles set forth in published guidelines and reports regarding takeover defense measures
( “Guidelines Concerning Takeover Defensive Measures for Securing and Ensuring Corporate Value and
36
the Common Interests of Shareholders”, the Ministry of Economy, Trade and Industry and the Ministry of
Justice dated May 2005, and “Takeover Defense Measures in Light of Recent Environmental Changes”,
Corporate Value Study Group dated June 2008) and thus is appropriate in its contents, 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 purposes the maintenance of the position of
the current executives.
Note: For more detail of the above, please refer to the Company’s IR News “Renewal 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)” (http://www.nyk.com/english/release/1414/IR_110513_2.html) dated May 13,
2011.
37
Consolidated Financial Statements
1. Consolidated Balance Sheet (As of March 31, 2012)
Item
Amount
Assets
Current assets
1,580,336
Liabilities
Current liabilities
Notes and operating accounts
payable-trade
Current portion of bonds
Short-term loans payable
Income taxes payable
Deferred tax liabilities
Advances received
Provision for bonuses
Provision for directors’ bonuses
Provision for losses related to
antitrust law
Other
1,186,543
Noncurrent liabilities
541,180
Cash and deposits
154,075
Notes and operating accounts
receivable-trade
196,333
Short-term investment securities
Inventories
Deferred and prepaid expenses
Deferred tax assets
Other
283
60,884
58,866
4,562
68,960
Allowance for doubtful accounts
(2,786)
Noncurrent assets
Vessels, property, plant and
equipment
Vessels, net
Buildings and structures, net
Aircraft, net
Machinery, equipment and
vehicles, net
Equipment, net
Land
769,402
74,748
4,068
165,002
45,000
97,846
6,788
3,106
53,951
7,461
280
1,436
71,619
1,047,250
205,445
710,892
29,692
15,861
6,316
Provision for directors’ retirement
benefits
Provision for periodic dry docking
of vessels
2,000
63,280
Leasehold right
Software
Goodwill
Other
Investments and other assets
Investment securities
Long-term loans receivable
3,409
7,486
23,531
3,895
355,470
246,857
16,228
6,798
Other
89,008
Allowance for doubtful
accounts
(3,422)
Total Assets
452,492
Provision for retirement benefits
234,976
4,628
38,322
Deferred assets
Bonds payable
Long-term loans payable
Amount
29,121
Construction in progress
Other, net
Intangible assets
Deferred tax assets
Item
716
2,122,234
Provision for losses related to
antitrust law
Other
Total Liabilities
Equity
Shareholders’ capital
Common stock
Capital surplus
Retained earnings
Treasury stock
Accumulated other comprehensive
income
Valuation difference on
available-for-sale securities
Deferred gains or losses on
hedges
Foreign currency translation
adjustments
Pension liability adjustment of
foreign subsidiaries and affiliates
Minority interests
Total Equity
Total Liabilities and Equity
38
18,218
1,728
63,412
1,499,743
687,722
144,319
155,623
389,767
(1,988)
(108,380)
21,876
(52,306)
(77,466)
(484)
43,148
622,490
2,122,234
2. Consolidated Statement of Income (From April 1, 2011 to March 31, 2012)
Amount
Item
Revenues
1,807,819
Cost and expenses
1,661,112
Gross profit
146,707
Selling, general and administrative expenses
170,831
Operating loss
(24,124)
Non-operating income
Interest income
2,836
Dividends income
4,231
Equity in earning of unconsolidated subsidiaries and
affiliates
2,164
Other
5,312
14,543
Non-operating expenses
Interest expenses
16,209
Foreign exchange losses
2,345
Other
5,102
Recurring loss
23,657
(33,238)
Extraordinary income
Gain on sales of noncurrent assets
16,034
Gain on sales of investment securities
3,501
Other
6,033
25,569
Extraordinary loss
Loss on sales of noncurrent assets
5,035
Impairment loss
5,511
Loss on cancellation of chartered vessels
4,020
Loss on valuation of investment securities
3,513
Other
5,198
Loss before income taxes and minority interests
23,280
(30,948)
Income taxes-current
13,941
Income taxes-deferred
25,221
Loss before minority interests
39,162
(70,110)
Minority interests in net income
2,710
Net loss
(72,820)
39
3. Consolidated Statement of Changes in Consolidated Equity (From April 1, 2011 to March 31, 2012)
Shareholders’ capital
Item
Common
stock
Capital
surplus
Retained
earnings
Treasury
stock
Total
shareholders’
capital
Accumulated other comprehensive income
Pension
Total
Valuation
liability
Accumuladifference Deferred
Foreign
Minority
adjustment
ted other
on
gains or
currency
interests
of foreign
compreheavailable- losses on translation
subsidiansive
for-sale
hedges adjustments
ries and
income
securities
affiliates
Balance at beginning of the
770,349
(85,721)
43,466
144,319
155,658
472,277
(1,905)
24,846
(43,182)
(67,385)
period
Changes of items during the
period
Dividends from surplus
(11,878)
(11,878)
Net loss
(72,820)
(72,820)
Purchase of treasury stock
(140)
(140)
Disposal of treasury stock
23
(34)
57
Adjustment due to change in
the fiscal periods of
60
60
consolidated subsidiaries
Change of scope of
295
295
consolidation
Change of scope of equity
332
332
method
Gain on change in equity
1,340
1,340
Other
160
160
Net change of items other than
(22,659)
(318)
(2,969)
(9,124)
(10,081)
(484)
shareholders’ capital
Total change of items during the
(82,626)
(22,659)
(318)
—
(34)
(82,509)
(82)
(2,969)
(9,124)
(10,081)
(484)
period
Balance at end of current
144,319
155,623
389,767
(1,988)
687,722
21,876
(52,306)
(77,466)
(484) (108,380)
43,148
period
Note: Gain or loss on change in equity in the Consolidated Statement of Changes in Equity is due to the organizational restructuring, which accompanied the integration of overseas
businesses with YUSEN LOGISTICS CO., LTD., NYK’s consolidated subsidiary.
40
Total
Equity
728,094
(11,878)
(72,820)
(140)
23
60
295
332
1,340
160
(22,977)
(105,603)
622,490
(For reference)
4. Summary of Consolidated Statement of Cash Flow (From April 1, 2011 to March 31, 2012)
Amount
Item
Net cash provided by (used in) operating activities
29,837
Net cash provided by (used in) investing activities
(139,402)
Net cash provided by (used in) financing activities
72,159
Effect of exchange rate change on cash and cash equivalents
(1,324)
Net increase (decrease) in cash and cash equivalents
(38,730)
Cash and cash equivalents at beginning of period
189,685
Increase (decrease) in cash and cash equivalents resulting from change of scope of
consolidation
Increase (decrease) in beginning balance of cash and cash equivalents resulting
from change in fiscal period of consolidated subsidiaries
556
(174)
151,336
Cash and cash equivalents at end of period
Note: This statement is not covered by the audit reports.
41
5. Notes to Consolidated Financial Statements
(1) Basis of presenting consolidated financial statements
1)
Scope of Consolidation
(i)
Number of Consolidated subsidiaries: 675
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 419 vessel owning companies.
Changes in the current fiscal year are as follows:
GLOBAL KEEPER S.A. and 15 other companies were included within the scope of consolidation
as they were newly established.
JAPAN MAINTENANCE & REPAIR CO., LTD. and 11 other companies were included within the
scope of consolidation as their total assets, revenues, net income and retained earnings, etc.
increased in importance.
LAEM CHABANG INTERNATIONAL RORO TERMINAL LTD. and 8 other companies were
included within the scope of consolidation due to the acquisition of shares.
AMSTERDAM PORT INVESTMENTS B.V. previously an affiliate accounted for by the equity
method, became a consolidated subsidiary due to the additional acquisition of shares.
TOKYO SENPAKU KAISHA, LTD. and 35 other companies were excluded from the scope of
consolidation, as they were liquidated.
NCT SERVICE CO., LTD. was excluded from the scope of consolidation, as it merged with
JAPAN MAINTENANCE & REPAIR CO., LTD. as of April 1, 2011.
NYK LOGISTICS (AMERICAS) INC. was excluded from the scope of consolidation, as it merged
with YUSEN LOGISTICS (AMERICAS) INC. as of April 1, 2011.
MONDIA ARRAS S.A.S. and NYK LOGISTICS (CHARLEROI) S.A. were excluded from the scope
of consolidation, as they merged with YUSEN LOGISTICS (BELGIUM) N.V. as of April 1, 2011.
NYK LOGISTICS (EUROPE CONTINENT) B.V. was excluded from the scope of consolidation, as
it merged with YUSEN LOGISTICS (EUROPE) B.V. as of April 1, 2011.
YUSEN AIR & SEA SERVICE (BENELUX) B.V. was excluded from the scope of consolidation, as
it merged with YUSEN LOGISTICS (BENELUX) B.V. as of April 1, 2011.
YUSEN AIR & SEA SERVICE (ITALIA) S.R.L. was excluded from the scope of consolidation, as it
merged with YUSEN LOGISTICS (ITALY) S.P.A. as of April 1, 2011.
NYK LOGISTICS (TAIWAN) CO., LTD. was excluded from the scope of consolidation, as it
merged with YUSEN LOGISTICS (TAIWAN) LTD. as of April 1, 2011.
NYK LOGISTICS (ASIA) PTE. LTD. was excluded from the scope of consolidation, as it merged
with YUSEN LOGISTICS (SINGAPORE) PTE. LTD. as of April 1, 2011.
YUSEN AIR & SEA SERVICE (FRANCE) S.A.R.L. was excluded from the scope of consolidation,
as it merged with YUSEN LOGISTICS (FRANCE) S.A.S. as of May 2, 2011.
NYK LOGISTICS (AMERICAS) INC. (INSD) was excluded from the scope of consolidation, as it
merged with YUSEN LOGISTICS (AMERICAS) INC. as of July 1, 2011.
NYK LOGISTICS (PHILIPPINES) INC. was excluded from the scope of consolidation, as it
merged with YUSEN LOGISTICS (PHILIPPINES) INC. as of July 1, 2011.
YUSEN AIR & SEA SERVICE (DEUTSCHLAND) GMBH was excluded from the scope of
consolidation, as it merged with YUSEN LOGISTICS (DEUTSCHLAND) GMBH as of October 1,
2011.
YUSEN AIR & SEA SERVICE (INDIA) PVT. LTD. was excluded from the scope of consolidation,
as it merged with YUSEN LOGISTICS (INDIA) LTD. as of October 1, 2011.
(ii) Name of principal unconsolidated subsidiaries
There is no principal unconsolidated subsidiary to be noted.
(iii) Reason for exclusion from the scope of consolidation
42
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.
(iv) 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.
(v) 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.
2)
Application of equity method
(i)
Number of affiliates accounted for by the equity method
unconsolidated subsidiaries: 10
affiliates: 110
Name of principal affiliates accounted for by the equity method:
NS UNITED KAIUN KAISHA, LTD., KYOEI TANKER CO., LTD.
Changes during this fiscal year are as follows:
KNUTSEN NYK OFFSHORE TANKERS 1 AS and 3 other companies were included within the
scope of application of the equity method, as they were newly established.
NIMIC SHIP HOLDING CO., LTD. and 6 other companies were included within the scope of
application of the equity method, as their net income and retained earnings, etc. increased in
importance.
AMSTERDAM PORT INVESTMENTS B.V. previously an affiliate accounted for by the equity
method, was excluded from the scope of application of equity method, as it was included within
the scope of consolidation due to additional acquisition of shares.
BADAK LNG TRANSPORT, INC. and 1 other company were excluded from the scope of
application of the equity method, as they were liquidated.
(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.
(iv) Noteworthy matters concerning procedures in the application of the equity method
For 4 affiliates accounted for by the equity method whose closing dates of account fell on
December 31, pro forma financial statements as of the closing date of the consolidated
statements were used. For affiliates other than those mentioned above whose closing dates were
different from that of the consolidated statements, financial statements as of the closing date of
account of the respective companies were used.
3)
Fiscal year for consolidated subsidiaries
For the consolidated subsidiaries whose closing dates of account were different from those 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 49 consolidated subsidiaries whose closing dates of account fell on December 31. For 2
consolidated subsidiaries whose closing dates of account fell on December 31, pro forma financial
43
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 KYUSHU INDUSTRY &
TRANSPORTATION CO., LTD. changed its closing date from February 28 to March 31, and the
Company’s consolidated subsidiary NYK AUTO LOGISTICS (THAILAND) CO., LTD. and 1 other
company 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 Equity.
The name of a major company which closes the books on December 31 is as follows:
NYK LOGISTICS (CHINA) 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 equity 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
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 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
44
(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
fiscal term are calculated based on internal rules as for
certain 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
(1) NYK’s consolidated subsidiary, YUSEN LOGISTICS
CO., LTD. has recorded a provision for possible future
losses associated with U.S. antitrust laws in the amount
estimated as of the present time. Moreover, 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.
(2) NYK’s consolidated subsidiary, NIPPON CARGO
AIRLINES CO., LTD. has recorded a provision for
possible future losses associated with Korean Fair
Trading Law.
(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 cost relating to vessels in operation and
vessel lease fees, along with lending vessel fees corresponding to these, the Company has
mainly adopted the voyage completion method, which considers from the place of departure
45
to the place of return as one unit.
(vi) 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 hedge accounting, the
Company adopts the Deferred Hedge Method. Furiate-shori (designated hedge accounting
treatment) is applied to currency swaps and forward foreign exchange contracts that meet the
required conditions of such treatment, while Tokurei-shori (special accounting treatment) is
applied to interest rate swaps, etc., that meet the required conditions of such treatment.
Interest rate swaps, etc., 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,
investments in overseas subsidiaries and other foreign currency denominated transactions
including scheduled 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. However,
interest rate swaps, etc., that are subject to special accounting treatment are excluded from the
evaluation.
(vii) Method of amortization of goodwill and period of amortization
Goodwill is amortized equally each year over 5 to 20 years.
(viii) Other significant matters in the preparation of the consolidated financial statements
i. Accounting for interest expenses
Interest expenses are generally charged to income as incurred. However, interest expenses
incurred in the construction of certain assets are capitalized and included in the costs of assets
when a construction period is substantially long; the amount of interest incurred in such a period
is significantly material; and certain conditions apply.
ii. Accounting for consumption taxes
Consumption taxes are accounted for by the tax exclusion method.
(2) Additional information
The Company has applied the “Accounting Standard for Accounting Changes and Error Corrections” (The
Accounting Standards Board of Japan (“ASBJ”) Statement No. 24, December 4, 2009) and the “Guidance
on Accounting Standard for Accounting Changes and Error Corrections” (ASBJ Guidance No. 24,
December 4, 2009) to accounting changes and corrections of prior period errors that were made on or
after the beginning of the current fiscal year.
(3) Notes to Consolidated Balance Sheet
1)
Breakdown of inventories
Merchandise and finished goods
Work in process
Raw materials and supplies
2,386 million yen
506 million yen
57,991 million yen
46
2)
Assets pledged as collateral and obligations relating to collateral
(i)
Assets pledged as collateral
Cash and deposits
Short-term investment securities
Other current assets
Vessels
Buildings and structures
Aircraft
Machinery, equipment and vehicles
Land
Total
(ii) Obligations relating to collateral
Notes and operating accounts payable-trade
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
281 million yen
33 million yen
213 million yen
84,661 million yen
3,290 million yen
1,495 million yen
389 million yen
5,747 million yen
7,798 million yen
103,910 million yen
46 million yen
11,015 million yen
52,524 million yen
63,586 million yen
833,461 million yen
26 million yen
119,435 million yen
1,488 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 39,383 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 June 2021.
(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
20,633 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 November
2018.
(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 Equity
1)
Class and number of issued and outstanding shares at term-end
Common stock
1,700,550,988 shares
47
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, 2011
Board of Directors’
Meeting
October 31, 2011
Common stock
Total
8,484
5
3,393
2
Base date
Effective
date
March 31,
2011
June 24,
2011
September 30, November 22,
2011
2011
11,878
(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 20, 2012,
matters regarding dividends of common stock are submitted as follows:
1) Total dividend
3,392 million yen
2) Dividend per share
2 yen
3) Base date
March 31, 2012
4) Effective date
June 21, 2012
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, 2012 are
described below.
Financial instruments whose market values appear to be extremely difficult to determine are not
included in the table.
48
Consolidated
balance sheet
amount (*3)
(i) Cash and deposits
(ii) Notes and operating accounts
receivable-trade
Allowance for doubtful accounts (*1)
154,075
154,075
—
194,322
—
886
125,094
13,695
16,228
(1)
16,226
852
125,094
8,403
(33)
—
(5,291)
17,111
884
[165,002]
[165,002]
[45,000]
[97,846]
[205,445]
[710,892]
[31,416]
[45,000]
[97,846]
[213,622]
[727,410]
[31,416]
(2,010)
194,322
(v) Notes and operating accounts
payable-trade
(vi) Current portion of bonds
(vii) Short-term loans payable
(viii) Bonds payable
(ix) Long-term loans payable
(x) Derivatives transactions (*2)
(*2)
(*3)
Balance (*3)
196,333
(iii) Short-term investment securities and
investment securities
Stocks of subsidiaries and affiliates
(iv) Long-term loans receivable
Allowance for doubtful accounts (*1)
(*1)
Market Values
(*3)
—
—
—
[8,177]
[16,517]
—
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 [ ].
Notes: 1
Calculation method for the market value of financial instruments and matters concerning
marketable securities and derivatives transactions
(i)
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.
(ii) 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.
(iii) Short-term investment securities and 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.
(iv) Long-term loans receivable
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.
49
(v) Notes and operating accounts payable, (vi) current portion of bonds and (vii) short-term loans
payable
values approximate book values.
(viii) Bonds payable
The market value of the corporate bonds issued by NYK is calculated based on the market price.
(ix) 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.
(x) 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.
2 Stocks of subsidiaries and affiliates (recorded amount on the consolidated balance sheet is
85,935 million yen) and unlisted shares (recorded amount on the consolidated balance sheet is
21,530 million yen) are not included in “(iii) Short-term investment securities and 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, 2012 was
3,825 million yen (major income and expenses associated with these investment and rental
properties were recorded as revenues and cost and expenses, respectively).
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
39,745
Increase
(decrease) in
current fiscal year
3,071
50
Market value as of
Balance at current
fiscal year-end
42,817
the consolidated
accounting date
102,089
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 of
4,044 million yen due to the acquisition of real estate, and decreases of 994 million yen due to
depreciation and 932 million yen due to the sales of real estate.
3 The market values as of the closing date of the consolidated statements 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) Equity per share
2) Net loss per share
341.54 yen
42.92 yen
(8) Other notes
The fraction of amounts less than the indicated unit is rounded down.
(9) Notes on significant subsequent events
Not applicable
51
Unconsolidated Financial Statements
1. Unconsolidated Balance Sheet (As of March 31, 2012)
Item
Assets
Current assets
Cash and deposits
Accounts receivable-trade
Short-term loans receivable
Inventories
Deferred or prepaid expenses
Receivable from agencies
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
Long-term loans receivable
Lease receivables
Other investments, etc.
Deferred assets
Stock issuance cost
Bond issuance cost
Total Assets
Amount
441,075
60,765
64,842
208,530
39,737
48,611
8,821
22,865
(13,099)
1,008,980
185,489
75,299
20,364
546
403
123
1,700
28,911
58,140
16,351
12,358
511
2,977
503
807,138
129,381
273,844
318,632
34,740
56,280
(5,742)
716
178
538
1,450,772
52
Item
Amount
Liabilities
Current liabilities
Accounts payable-trade
Current portion of bonds
Lease obligations
Account payable
Income taxes payable
Advance received
Deposits received
Payable to agencies
Other current liabilities
Noncurrent liabilities
Corporate bonds
Lease obligations
Provision for periodic dry
docking of vessels
Other noncurrent liabilities
Total liabilities
Equity
Shareholders’ equity
Common stock
Capital surplus
Capital reserve
Other capital surplus
Retained earnings
Earned surplus reserve
Other retained earnings
Reserve for dividends
Reserve for special
depreciation
Reserve for advanced
depreciation
Other reserves
Retained earnings carried
forward
Treasury stock
Valuation and translation
adjustments
Net unrealized holding gain on
available-for-sale securities
Deferred gains/losses on
hedge
Total Equity
Total Liabilities and Equity
262,465
68,518
45,000
61,594
6
2,374
86
804
29,861
44,279
766
1,655
7,518
732,106
205,445
487,767
46
211
23,523
15,113
994,572
436,376
144,319
154,394
151,691
2,702
139,644
13,146
126,497
50
132
5,384
118,324
2,606
(1,982)
19,823
21,308
(1,485)
456,199
1,450,772
2. Unconsolidated Statement of Income (From April 1, 2011 to March 31, 2012)
Amount
Item
Revenue from shipping operation
909,449
Shipping operation expenses
935,236
Shipping operation loss
(25,787)
Revenue from other business
6,413
Other business expenses
4,420
Other business income
1,993
Gross operating loss
(23,794)
General administrative expenses
36,549
Operating loss
(60,343)
Non-operating income
Interest and dividends income
29,967
Other non-operating income
3,014
32,981
Non-operating expenses
Interest expenses
10,577
Other non-operating expenses
5,933
Recurring loss
16,510
(43,873)
Extraordinary gains
Gain on sales of noncurrent assets
8,692
Gain on sales of investment securities
3,381
Gain on liquidation of subsidiaries and affiliates
2,953
Gain on insurance adjustment
2,179
Other extraordinary gains
1,019
18,227
Extraordinary losses
Loss on disposal of noncurrent assets
32
Provision for allowance for doubtful accounts
7,004
Loss on valuation of stocks of subsidiaries and affiliates
2,499
Loss on valuation of investment securities
2,719
Loss on cancellation of chartered vessels
4,020
Other extraordinary losses
2,954
Loss before income taxes
19,231
(44,876)
Income taxes-current
1,909
Income taxes-deferred
18,069
Net loss
19,979
(64,855)
53
3. Unconsolidated Statement of Changes in Equity (From April 1, 2011 to March 31, 2012)
Capital surplus
Item
Balance at beginning of
fiscal year
Changes during fiscal year
Dividends from retained
earnings
Reversal of special
depreciation reserve
Provision of special
Reversal of reserve for
overseas investment loss
advanced depreciation
Provision of reserve for
Net loss
Acquisition of treasury
stock
Disposition of treasury
stock
Net changes other than
shareholders’ equity during
fiscal year
Total change during fiscal
year
Balance at end of the fiscal
year
Common stock
144,319
Capital reserve
151,691
Other capital
surplus
Earned surplus
reserve
2,737
13,146
Retained earnings
Reserve for
Reserve for
Reserve for
special
overseas
dividends
depreciation investment loss
50
224
0
Reserve for
advanced
depreciation
4,531
(105)
12
(0)
(335)
1,188
(34)
—
—
144,319
151,691
(34)
2,702
54
—
—
13,146
50
(92)
132
(0)
—
853
5,384
Item
Balance at beginning of
fiscal year
Changes during fiscal year
Dividends from retained
earnings
Reversal of special
Provision of special
overseas investment loss
Provision of reserve for
Net loss
Acquisition of treasury
stock
Disposition of treasury
stock
Net changes other than
shareholders’ equity during
fiscal year
Total change during fiscal
year
Balance at end of fiscal
year
Retained earnings
Retained earnings
Other reserves
carried forward
118,324
80,101
Treasury stock
(1,899)
23,876
(2,210)
Total equity
534,894
(11,878)
105
—
—
(12)
—
—
0
—
—
335
—
—
(1,188)
—
(77,495)
2,606
—
(64,855)
(64,855)
(140)
(140)
(140)
57
23
23
(64,855)
118,324
513,227
(11,878)
(11,878)
—
Total
shareholders’
equity
Valuation and translation
adjustments
Net unrealized
holding gain on
Deferred gains/
available-for-sale losses on hedge
securities
(82)
(1,982)
55
(2,568)
724
(1,843)
(76,851)
(2,568)
724
(78,694)
436,376
21,308
(1,485)
456,199
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 equity 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
6)
Amortized equally each month over the three years
Amortized equally each month over the period of redemption
of bond
Standards of accounting for allowances and reserves
Estimated uncollectible amounts are calculated using
historical data for trade receivables and individually
56
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 hedge accounting, the
Company adopts the Deferred Hedge Method. Furiate-shori (designated hedge accounting
treatment) is applied to currency swaps and forward foreign exchange contracts that meet the
required conditions of such treatment, while Tokurei-shori (special accounting treatment) is applied to
interest rate swaps, etc., that meet the required conditions of such treatment. Interest rate swaps, etc.,
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, investments in overseas subsidiaries and other
foreign currency denominated transactions including scheduled 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. However, interest rate swaps, etc., that are subject to special accounting
treatment are excluded from the evaluation.
57
9)
Consumption taxes are accounted for by the tax exclusion method.
(2) Additional information
The Company has applied the “Accounting Standard for Accounting Changes and Error Corrections”
(ASBJ Statement No. 24, December 4, 2009) and the “Guidance on Accounting Standard for Accounting
Changes and Error Corrections” (ASBJ Guidance No. 24, December 4, 2009) to accounting changes and
corrections of prior period errors that were made on or after the beginning of the current fiscal year.
(3) 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)
83 million yen
17,381 million yen
1,097 million yen
14,256 million yen
32,818 million yen
1,722 million yen
9,086 million yen
10,808 million yen
269,664 million yen
955,662 million yen
2,762 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
226,370 million yen
358,184 million yen
61,380 million yen
3,131 million yen
58
(4) Notes to unconsolidated statement of income
Transactions with subsidiaries and affiliates
Operating transactions
Revenues (revenue from shipping operation, revenue from other business)
19,708 million yen
Expenses (shipping operation expenses, other business expenses, general administrative
expenses)
217,412 million yen
Transactions other than operating transactions
36,369 million yen
(5) Notes to unconsolidated statement of changes in equity
Class and number of treasury stock at term-end
Common stock
4,229,731 shares
(6) Notes on tax effect accounting
The major cause of deferred tax assets is loss on software, and the major cause for deferred tax liabilities
is net unrealized holding gain on available-for-sale securities.
(7) Notes on fixed asset leasing
Other than the fixed assets posted in the unconsolidated balance sheet, the Company owns 183 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.
59
(8) Notes concerning transactions with related parties
Subsidiaries and affiliates, etc.
Category
Company
Subsidiary NIPPON CARGO
AIRLINES CO., LTD.
Ratio of
holding of
voting rights,
etc. (or ratio of
voting rights
held) (%)
Holding
Directly 100.0
Detail of
relationship
Capital support
Concurrent service
as executives
Debt guarantee, etc.
Contents of
transaction
Provision of loans
(Note 1)
Acceptance of interest
(Note 2)
Transaction
amount
(millions of
yen)
Account item
9,605 Short-term loans
receivable
Term-end
balance
(millions
of yen)
90,486
582 Other current
104,311 assets
20
—
814 Short-term loans
receivable
—
Subsidiary NYK FTC
(SINGAPORE) PTE.
LTD.
Holding
Directly 100.0
Subsidiary NYK GLOBAL BULK
CORP.
Holding
Directly 100.0
Capital support
Concurrent service
as executives
Subsidiary CRYSTAL SHIP
THREE (BAHAMAS)
LTD.
Holding
Directly 100.0
Debt guarantee, etc. Debt guarantee, etc.
(Note 2)
16,609
—
—
Subsidiary NYK LNG FINANCE
CO., LTD.
Holding
Directly 100.0
Concurrent service (Note 2)
as executives
16,578
—
—
Subsidiary SAGA SHIPHOLDING
(NORWAY) AS
Holding
(Note 2)
Indirectly 100.0
30,417
—
—
Subsidiary NYK BULKSHIP
(ATLANTIC) N.V.
Holding
(Note 2)
Indirectly 100.0
15,832
—
—
Subsidiary Vessels owning,
chartering related
companies
ADAGIO MARITIMA
S.A. and other 331
companies
Holding
Directly 100.0
(310
companies)
Capital support
Acceptance of interest
(Note 2)
Interest payment
33,716 Other current
assets
22
32 Deposits received
Capital support
Lease of vessels
(Note 3)
NYK ARMATEUR
S.A.S.
17,032
Short-term loans
receivable
37,433
Long-term loans
receivable
270,450
14,189 Lease
receivables
(within 1 year)
4,526
Lease
receivables
Affiliate
60,653
34,740
Indirectly 100.0 Debt guarantee, etc. Debt guarantee, etc.
(Note 2)
499,884
—
—
(22 companies) Contract of
chartering ships
130,245
—
—
29,450
—
—
Holding
Indirectly 60.0
Payment of charterage
(Note 4)
(Note 2)
Transaction conditions and policies on determination of transaction conditions
Notes: 1. Conditions of lending funds are determined by taking into consideration the market rate. The
Company has not accepted security.
2. Guarantee fee for debt guarantee, etc. is determined by taking into consideration the form of
guarantee.
3. Ship lease payments are determined by taking into account the amount equivalent to the cost of the
ship.
4. Cost equivalent amounts accrued by subsidiaries are paid as vessel lease fees.
(9) Note on per-share information
1) Equity per share
2) Net loss per share
268.93 yen
38.22 yen
60
(10) Notes on a company subject to consolidated dividend restrictions
After the final day of the final business year, which coincides with the final day of the current fiscal year,
the Company shall become a company subject to consolidated dividend restrictions.
(11) Other notes
The fraction of amounts less than the indicated unit is rounded down.
(12) Notes on significant subsequent events
Not applicable
61
Guidance on the Exercise of Votes via electromagnetic method (such as the Internet, etc.)
<Concerning procedures for exercise of votes via the Internet, etc.>
If you exercise your vote via the Internet, please confirm the following before exercising your vote.
If you are attending the meeting, exercising your vote either by written form (Voting Form) or via
the Internet is not necessary.
1.
Website to use for exercising votes
(1) Exercise of votes via the Internet may be done by accessing the website for exercising
votes (http://www.evote.jp/) designated by the Company using a PC, smartphone or mobile
phone (i-mode, EZweb or Yahoo! Keitai)* with Internet connection (access is unavailable
between 2:00 a.m. and 5:00 a.m. Japan Time everyday).
(2) Please note that you may not be able to exercise votes via the Internet using PC or
smartphone depending on your Internet environment such as use of firewall, anti-virus
software or proxy servers.
(3) Please use i-mode, EZweb or Yahoo! Keitai service for exercise of votes via the Internet
using mobile phone. For security reasons, mobile phones that cannot accommodate
encrypted data transmission (SSL transmission) and transmission of mobile phone
information may not be used.
(4) Shareholders using the Internet voting option are requested to complete the required voting
procedures by 5:00 p.m. Japan Time on Tuesday, June 19, 2012, and exercising your votes
as early as possible will be appreciated. Please contact the help desk described on the next
page for inquiries.
*Note: “i-mode” is a trademark or registered trademark of NTT DOCOMO, INC., “EZweb” is a
trademark or registered trademark of KDDI CORPORATION, and “Yahoo!” is a trademark or
registered trademark of YAHOO! INC. of the U.S.
The Internet connection for exercise of votes using mobile phone may be
established by having a mobile phone with a bar-code reader read the “QR
code” shown on the left. For details of operation, please refer to the users’
manual for your mobile phone.
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 website for exercising votes 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.
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 (including cases where the votes are
exercised two times or more by using more than one PC, smartphone or mobile phone),
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
(Internet connection charges, etc.) shall be the responsibility of the shareholder. In addition,
expenses such as packet communication fees and other fees which are associated with the use of
a mobile phone shall be the responsibility of the shareholder.
62
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 (operators are available)
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
(operators are available)
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.
63

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