ANNUAL REPORT 2019 Year Ended March 31, 2019

ANNUAL REPORT 2019 Year ended March 31, 2019

Nihonbashi Dia Building 19-1 Nihonbashi, 1-chome Chuo-ku, Tokyo 103-8630, Japan http://www.mitsubishi-logistics.co.jp

005_0808001371908.indd 1 2019/09/20 17:41:25 Company Profile (As of March 31, 2019)

Headquarters and Branches Headquarters Chuo-ku, Tokyo Branches Tokyo, Yokohama, Nagoya, Osaka, Kobe and Fukuoka Date of Establishment April 15, 1887 Capital ¥22,393,986,570 Number of Shares Issued 87,960,739 Authorized Shares 220,000,000 Number of Employees 926 people (parent only; not including 125 people on leave and seconded outside of the Company. There are also 132 temporary employees and 627 seconded and contracted employees from outside the Company.) 4,466 people (on a consolidated basis; not including 49 people on leave and seconded outside of the Group. There are also 1,419 temporary employees and 1,207 seconded and contracted employees from outside the Group.) Stock Exchange Listing First Section of the Tokyo Stock Exchange Securities Code 9301

Major Shareholders Shareholder name Number of shares (Thousands) Shareholding ratio (%) The Master Trust Bank of Japan, Ltd. (trust account) 12,707 14.5 Japan Trustee Services Bank, Ltd. (trust account) 6,710 7.7 Meiji Yasuda Life Insurance Company 5,153 5.9 MITSUBISHI ESTATE CO., LTD. 3,665 4.2 Kirin Holdings Company, Limited 2,966 3.4 Tokio Marine & Nichido Fire Insurance Co., Ltd. 2,915 3.3 MUFG Bank, Ltd. 1,864 2.1 Japan Trustee Services Bank, Ltd. (trust account 9) 1,791 2.0 Contents State Street Bank and Trust Company 505001 1,671 1.9 AGC Inc. 1,657 1.9 1 ... To Our Shareholders Notes: 1. MUFG Bank, Ltd. has set 750 thousand shares of the Company as trust funds for retirement benefits for which voting rights are reserved, in addition to the 2 ... Summary of the Mitsubishi Logistics Group New Medium-term Management Plan FY2019-2021 shares stated in the table above. 2. The Company’s treasury shares (334,099 shares) were excluded in the calculation of the percentage of shares held. 5 ... Topics Directors and Corporate Auditors (As of June 27, 2019) 8 ... Overview of the Mitsubishi Logistics Group Position Name Responsibilities and/or Primary Occupation 9 ... Independent Auditor’s Report Chairman of the Board Akio Matsui President* Masao Fujikura 10 ... Consolidated Balance Sheets Managing Director Yoshiji Ohara Responsible for Harbor Transportation Business Managing Director Hitoshi Wakabayashi 12 ... Consolidated Statements Of Income Responsible for Warehousing & Distribution Business, General Manager, Warehousing & Distribution Business Division Managing Director Yasushi Saito Responsible for Accounting & Financing and Information System 13 ... Consolidated Statements Of Comprehensive Income Managing Director Shinji Kimura Responsible for Planning, Technical and Real Estate Business Managing Director* Saburo Naraba Responsible for General Affairs, Corporate Communications, Personnel, and Internal Audit 14 ... Consolidated Statements Of Changes In Net Assets Managing Director Hiroshi Nishikawa Responsible for International Transportation Business, General Manager, International Business Coordination Chamber 15 ... Consolidated Statements Of Cash Flows Director Minoru Makihara Director Koji Miyahara Senior Advisor, Nippon Yusen Kabushiki Kaisha 17 ... Notes To Consolidated Financial Statements Director Tatsuo Wakabayashi Chairman, Mitsubishi UFJ Trust and Banking Corporation 45 ... Company Pro le Director Toshifumi Kitazawa Vice Chairman of the Board, Tokio Marine & Nichido Fire Insurance Co., Ltd. Director Tatsushi Nakashima General Manager, Nagoya Branch Director Akira Yamao General Manager, Planning & Business Coordination Division Director Akio Miura General Manager, International Transportation Business Division Standing Corporate Auditor (full time) Tohru Watanabe Corporate Auditor (full time) Mikine Hasegawa Corporate Auditor Yohnosuke Yamada Lawyer Corporate Auditor Kenji Sakurai Certified Public Accountant Corporate Auditor Hiroshi Imai Notes: 1. Directors with an asterisk (*) are Representative Directors. 2. Of Directors, Mr. Minoru Makihara, Mr. Koji Miyahara, Mr. Tatsuo Wakabayashi and Mr. Toshifumi Kitazawa are Outside Directors as stipulated by Article 2, item 15 of the Companies Act. The Company designated them as independent officers as stipulated by Tokyo Stock Exchange, Inc. and registered them with the said Exchange. 3. Of Corporate Auditors, Mr. Mikine Hasegawa, Mr. Yohnosuke Yamada and Mr. Kenji Sakurai are Outside Corporate Auditors as stipulated by Article 2, item 16 of the Companies Act. The Company designated them as independent officers as stipulated by Tokyo Stock Exchange, Inc. and registered them with the said Exchange. 4. Mr. Akio Matsui, Chairman of the Board, concurrently serves as President of Japan Warehousing Association Inc. 45

005_0808001371908.indd 2 2019/09/20 17:41:26 To Our Shareholders

We would like to express our sincere gratitude for your continued support and patronage. I hereby report the business overview of the Mitsubishi Logistics Group for the 216th fiscal term (from April 1, 2018, to March 31, 2019). During the fiscal year under review, in the global economy, while the economy in China slowed moderately, steady economic recovery continued in the United States, and the economy in Europe also gradually recovered despite some signs of weakness. Japan, despite some weakness, recovered moderately with consistently improved employment environment, a recovery in consumer spending and an increase in capital expenditure. In these economic situations, the business environment surrounding the Group remained difficult in the warehousing and harbor transportation business in the Logistics Segment due to intensifying competition with other companies and increased costs owing to labor shortages and other factors, despite an increase in freight volume. The Real Estate Segment, meanwhile, remained relatively strong with partial rising trend in rent due to improvement in demand for rental office buildings and others. Japanese economy, despite some weakness for the time being, is Under these circumstances, Mitsubishi Logistics Corporation also expected to continue gradual recovery supported by and its subsidiaries and affiliates (collectively, the “Group”) continuous improvement of employment and income promoted aggressive marketing activities. In the Logistics environment and implementation of various government policies. Segment, we made efforts including the expansion of distribution In this economic climate, under the business environment operations especially for pharmaceuticals, and expansion surrounding the Group, harsh situations continue in the reinforcement of operational bases overseas. In the Real Estate warehousing & distribution business and harbor transportation Segment, we focused our efforts on securing tenants, and business due to the intensified competition and an increase in maintaining and improving rent levels. Meanwhile, we cost resulting from labor shortage and such despite a moderate endeavored to improve business performance thorough cost increase in freight volume. Meanwhile, due to concern over management and further improvement of efficiency in business decline in demand for rental office buildings, the improvement in operations. business condition is expected to remain moderate in the real As a result, revenue for the fiscal year under review estate business. amounted to 227,185 million yen, an increase of 11,778 million Under these circumstances, the Group has formulated a new yen, or 5.5% from the previous fiscal year. In the Logistics vision “MLC2030 Vision” to be accomplished in 2030, and by Segment, revenue increased due to an increase in freight handled giving first priority to “contributing to the improvement of in the warehousing & distribution, land transportation, harbor customer’s value,” we aim to be a corporate group that continues transportation and international transportation businesses, and to be selected by customers both in Japan and overseas as a also in the Real Estate Segment, revenue increased due to the logistics company that consistently handles the supply chain rising occupancy rate of the real estate leasing business and an from procurement to distribution and sales as a partner of increase in condominiums sold. On the other hand, cost of customers. services overall increased 11,232 million yen, or 5.8% from the As for the year-end dividend for the fiscal year ended March previous fiscal year to 203,825 million yen. In the Logistics 31, 2019, which is the first year of the New Medium-term Segment, operational and transportation consignment costs and Management Plan FY2019-2021, we intend to distribute a year- such increased as freight handled increased, and the initial cost end dividend of ¥30 per share to further enhance shareholder until stable operation associated with the start of operations at a returns and maintain stable dividend while taking into new distribution center was borne. In the Real Estate Segment, consideration the level of retained earnings as well as profit for real estate sales costs increased in line with an increase in the period under review. As a result, when considering the condominiums sold. Selling, general and administrative expenses reverse stock split with an effective date of October 1, 2017, the increased 306 million yen, or 2.9% from the previous fiscal year annual dividend per share including the interim dividend of ¥15 to 10,699 million yen primarily due to increases in personnel per share totals ¥45, which is an increase of ¥17 from the expenses and depreciation and amortization. previous fiscal year. As a result, operating income increased 239 million yen, or As for dividends for the fiscal year ending March 31, 2020, 1.9% year on year to 12,660 million yen, reflecting the rise in which are based on the above basic policy to respond to income in the Real Estate Segment, despite a slight decline in shareholders’ consistent support barring any extraordinary income in the Logistics Segment. Ordinary income increased circumstances, both the interim dividend and the year-end 1,172 million yen, or 7.3% to 17,333 million yen due partially to dividend will be ¥30 per share. The annual dividend per share increases in dividend income and equity in earnings of will be ¥60, up ¥15 compared with the previous fiscal year. unconsolidated subsidiaries and affiliates. Profit attributable to We look forward to your continued support and owners of parent increased 1,047 million yen, or 10.0% from the encouragement. previous fiscal year to 11,564 million yen despite posting loss on June 2019 disaster, primarily due to an increase in gain on sale of marketable securities and investments in securities. Masao Fujikura, President With respect to the prospects of the world economy, despite concern for the trend of trade issue and the future of the Chinese economy, the steady recovery in the United States will likely continue, while moderate recovery trend in Europe are expected.

010_0808001371908.indd 1 2019/09/20 16:48:09 Summary of the Mitsubishi Logistics Group New Medium-term Management Plan FY2019-2021

With a view to further enhancing its corporate value, the Group has formulated a new medium-term management plan covering the three- year period that ends in the fiscal year ending March 31, 2022. I. A Review of the Management Plan FY2016-2018 The Management Plan FY2016-2018, which concluded in the fiscal year ended March 31, 2019, aimed to enhance corporate value and strengthen growth potential in line with the basic strategies of “expanding the domestic and overseas integrated logistics business and strengthening the business foundations,” “expanding the Real Estate Business centered on building leases,” and “strengthening the Group management foundations.” During the period of the management plan, the Logistics Segment implemented measures that included the establishment of domestic distribution centers in Osaka and Kobe, etc. and an overseas distribution center in Indonesia. In the Real Estate Segment, we started up several business projects as planned. However, revenue and operating income fell short of our targets for the final year of the management plan of 240,000 million yen and 15,500 million yen, respectively, partly due to delays in domestic and overseas expansion of business domains and structural improvements including organizational restructuring, and an insufficient response to changes in the external environment such as intensified competition in Japan and overseas, as well as increased costs against a backdrop of the labor shortage. Under these circumstances, as part of the Group’s future growth plans through proactive and bold innovation(*1), we formulated the MLC2030 Vision(*2) and the New Medium-term Management Plan FY2019-2021. (*1) Innovation = the “creation of value” that brings changes to customers’ business and society. (*2) MLC2030 Vision = goals that the Group aims to accomplish by 2030 (MLC is the abbreviation of Mitsubishi Logistics Corporation).

II. The MLC2030 Vision 1. Goal For more than 130 years since our establishment, the Group has been contributing to the creation of a prosperous and sustainable society through logistics businesses with a focus on warehousing. Going forward, the Group has conceived the following MLC2030 Vision to ensure that we continue to conduct customer-oriented operations and become an innovator in future society while simultaneously striving to become a corporate group that remains the partner of choice for customers in Japan and abroad.

Contributing to the improvement of customer’s value is a matter of priority, and we offer comprehensive logistics solutions to the management of customer’s supply chains as their partner, from procurement to distribution/sales.

010_0808001371908.indd 2 2019/09/20 16:48:09 2. Growth strategy The Group will take the following steps under its growth strategy to achieve the MLC2030 Vision. (1) Establish a customer-oriented support system The Group will establish a customer-oriented support system with a focus on the medical/health care, food/beverage, and machinery/electrical machine industries as priority areas, and will take on comprehensive supply chain challenges as the customer’s partner. Through these efforts, the Group will seek to expand its business domain and boost its market share. (2) Expand overseas businesses The Group will move forward with system enhancements to support customer supply chains in the medical/health care and food/beverage industries and strengthen its forwarding business with demand for high quality cold chains expected to grow in a number of regions such as Southeast Asia (ASEAN). (3) Secure stable profits in the port and harbor transportation and real estate businesses The Group will further enhance the competitiveness of its port and harbor transportation business by leveraging its cargo handling services, the efficiency of which is ranked among the highest globally, while at the same time developing complexes and facilities and boosting its operational capability in the real estate business. By doing so, it will seek to secure stable profits. (4) Improve operational processes and further utilization of new technologies The Group will review the operational processes of all businesses and facilitate efficient operations by utilizing new technologies such as IoT, AI and robotics. Through these efforts, it aims to improve service quality and production efficiency. (5) Strengthen the Group management base The Group aims for growth by strengthening cost competitiveness through organizational management across the Company and its Group companies and securing/developing human resources, particularly in the priority areas.

III. Mitsubishi Logistics Group New Medium-term Management Plan for FY2019-FY2021 1. Positioning of the New Medium-term Management Plan for FY2019-FY2021 The Group positions the relevant three-year period as the first stage to make a step toward achieving the MLC2030 Vision and will focus on the following measures. (1) Strengthening the business foundations of the priority areas (2) Establishing a system that leverages new technologies (3) Maintaining competitiveness in the port and harbor transportation business (4) Developing complexes and other facilities for the real estate business and improving the organizational structure thereof to strengthen operational capabilities (5) Bolstering production efficiency through more efficient operational processes and other means (6) Improving operational conditions to reform workstyles and creating innovation (7) Increasing shareholder returns (8) Promoting CSR-oriented management

010_0808001371908.indd 3 2019/09/20 16:48:09 2. Financial objectives and financial strategy (1) For financial targets in the fiscal year ending March 31, 2022, the Group aims to achieve the operating revenue of 240.0 billion yen and operating income of 14.5 billion yen. (2) With respect to the raising of funds for new investments, the Group seeks to boost its financial leverage through a range of measures such as borrowings and the issuance of corporate bonds, while following a principle of maintaining financial soundness. 3. Investment plan The Group plans to make investments totalling approximately 100.0 billion yen (50.0 billion yen for logistics and 50.0 billion yen for real estate) during the term of this plan. 4. Shareholder return The Group will further enhance shareholder return programs through dividend increases and share buybacks. (1) The Group will seek to achieve a dividend on equity of 2% in the fiscal year ending March 31, 2022, the final year of the Plan, while following the principle of maintaining stable dividend payments, namely, a dividend per share of at least 60 yen per year during the term of this plan. (2) The acquisition of treasury shares totalling approximately 15.0 billion yen will be carried out in a flexible manner during the term of the Plan. 5. Corporate governance The Group continues to improve programs to institute effective corporate governance.

[Reference] Comparison between FY2021 Targets and FY2018 Results Consolidated figures (Unit: billion yen) FY18/FY21 ratio FY2018 FY2021 Amount of change Rate of change Operating Total 227.1 240 +12.9 +5.7% Revenue Logistics 190.4 198.7 +8.3 +4.4% Real estate 38.6 43.6 +5.0 +13.0% Elimination of (1.9) (2.3) (0.4) – inter-segment transactions Operating Income Total 12.6 14.5 +1.9 +15.1% Logistics 7.6 9.2 +1.6 +21.1% Real estate 10.7 10.7 0 0% Total group costs (5.7) (5.4) +0.3 – Ordinary Income 17.3 17.1 (0.2) (1.2%) EBITDA 25.6 30.1 +4.5 +17.6% (operating income + depreciation)

010_0808001371908.indd 4 2019/09/20 16:48:09 Topics

Construction at the Seishin Distribution Center (Phase 2) in Kobe

The Company started construction on the Seishin Distribution Center (Phase 2) within the site of the Kobe Logistics Center (Suma-ku, Kobe). The decision was made to expand the Center in response to an increase in freight handled at the Seishin Distribution Center (Phase 1), which was completed in March 2018. The construction is scheduled to be completed in November 2019. The Seishin Distribution Center is located adjacent to the Fusehata JCT on Kobe-Awaji-Naruto Expressway, an ideal spot as a distribution base in western Japan. The Center has been designed to share the spiral rampway with the Phase I building which allow vehicles to access every Conceptual image upon completion floor to address the high-frequency shipping of cargo. In addition, as with the Phase 1 building, under the concept of a “Disaster-Resistant and Eco-Friendly Warehouse,” solar power generation equipment has been installed and LED lighting adopted throughout the building to reduce the environmental burden. By adopting a seismic-isolated structure and installing emergency power generators, the Seishin Distribution Center is designed to have a high capability to respond to a natural disaster in order to support customers’ business continuity from the aspect of logistics in the event of a disaster such as an earthquake. The Company will capture logistics needs accurately and strive to expand its business in western Japan.

Outline of the Seishin Distribution Center (Phase 2) (1) Location: within the Kobe Logistics Center, in Suma-ku, Kobe (2) Total floor area: approx. 57,400 m2 (four-story building) (3) Purpose of the use: Distribution center for food products, chemical products and daily necessities, etc. (4) Construction period: October 2018 to November 2019 (planned)

010_0808001371908.indd 5 2019/09/20 16:48:10 Joint Establishment of a Holding Company with Nippon Yusen Kabushiki Kaisha

The Company jointly established MY Terminals Holdings, Limited (“the new company”) with Nippon Yusen Kabushiki Kaisha (“Nippon Yusen”) in order to strengthen its harbor transportation business, and carried out a management integration to make the domestic port shipping business subsidiaries in the Nippon Yusen Group wholly-owned subsidiaries under the new company. The Company will work together with Nippon Yusen to improve the quality of the harbor transportation business conducted by the subsidiaries under the new company and to provide stable services in the future.

Outline of the new company (1) Name of company: MY Terminals Holdings, Limited (2) Location of headquarters: Chiyoda-ku, Tokyo (3) Principal business: Management of companies (affiliate companies) (4) Date of establishment: December 13, 2018 (5) Capital: 10 million yen (49% equity participation by the Company; equity-method affiliate)

Completion of S-GATE NIHONBASHI-HONCHO, a Disaster-Resistant, Environmentally-Friendly Office Building

The Company had been undertaking construction on S-GATE NIHONBASHI- HONCHO, an office building located in Nihonbashi-Honcho, Chuo-ku, Tokyo and its first real estate development joint project with THE SANKEI BUILDING CO., LTD. Construction was completed on October 31, 2018, and leasing of the building began on November 1 of the same year. The building is located in an office area with a concentration of companies from wide-ranging industries, including financial institutions, pharmaceutical companies and medical facilities, with excellent access to Mitsukoshimae Station on the Tokyo Metro, Nihombashi Station on the Tokyo Metro and Toei Subway, Ningyocho Station on the Tokyo Metro and Toei Subway, and Shin-Nihombashi Station on JR. Although the building is medium-scale with each floor area of approximately 620 m2, it features the same level of facilities and services as a high-grade, large- scale office building, including an emergency power generator capable of transmitting electric power to tenants’ rooms, and a private rooftop terrace for the exclusive use of tenants. S-GATE NIHONBASHI-HONCHO Outline of S-GATE NIHONBASHI-HONCHO (1) Location: Nihonbashi-Honcho, Chuo-ku, Tokyo (2) Total floor area: approx. 8,500 m2 (eleven-story building)

010_0808001371908.indd 6 2019/09/20 16:48:10 Acquisition of Halal Certification for Warehousing and Domestic Transportation in Indonesia

P.T. Mitsubishi Logistics Indonesia and P.T. Dia-Jaya Forwarding Indonesia (both consolidated subsidiaries of the Company) have acquired halal certification from a certification body in Indonesia. Both companies are providing services addressing temperature-controlled logistics for foods and other items originating from the MM2100 Distribution Center, which was built in 2017 on the outskirts of Jakarta. This acquisition of certification for storage and other warehouse-related operations at the distribution center and for land transportation within Indonesia has enabled the supply of halal-compliant cold-chain services in the country where Muslims account for the majority of the population. The Group provides halal-compliant logistics services to Japanese manufacturers in Indonesia, including customers who lease the factory buildings on the premises of the distribution center, and will strive to expand logistics operations in Indonesia relating to food products, cosmetics, and pharmaceuticals.

Halal-compliant distribution center (MM2100 Distribution Center) Halal-compliant refrigerated transport vehicles

Overview of the Halal Certification

(1) Name of company P.T. Mitsubishi Logistics P.T. Dia-Jaya Forwarding Indonesia (Business outline) Indonesia(Warehousing) (Forwarding, NVOCC, land transportation) (2) Applicable business Warehousing & delivery, storage and Land transportation within Indonesia distribution processing at MM2100 Distribution Center (3) Date of acquisition June 7, 2018 October 24, 2018

010_0808001371908.indd 7 2019/09/20 16:48:11 Overview of the Mitsubishi Logistics Group (As of March 31, 2019)

Mitsubishi Logistics Corporation

Logistics Real Estate Consolidated Subsidiaries (51 companies)

Tohoku Ryoso Transportation Co., Ltd. Dia Buil-Tech Co., Ltd. Sairyo Service Co., Ltd. Yokohama Dia Building Management Corporation Dia Pharmaceutical Network Co., Ltd. Tokyo Dia Service Co., Ltd. Chubo Kaihatsu Co., Ltd. Dia Systems Corporation Nagoya Dia Buil-Tech Co., Ltd. Ryoso Transportation Co., Ltd. Unitrans Ltd. Osaka Dia Buil-Tech Co., Ltd. Keihin Naigai Forwarding Co., Ltd. Kobe Dia Maintenance Co., Ltd. Touryo Kigyo Co., Ltd. Fuji Logistics Co., Ltd. T’ACT Co., Ltd. Tokyo Juki Transport Co., Ltd. SII Logistics Inc. (Note) * Company marked with an asterisk was Fuji Logistics Support Co., Ltd. included as a consolidated subsidiary from the Kinko Service Co., Ltd. current ﬁscal year Chubu Trade Warehousing Co., Ltd. Meiryo Kigyo Co., Ltd. Ryoyo Transportation Co., Ltd. Kyokuryo Warehouse Co., Ltd. Hanryo Kigyo Co., Ltd. Shinryo Koun Co., Ltd. Naigai Forwarding Co., Ltd. Kyushu Ryoso Transportation Co., Ltd. Monryo Transport Corporation Hakuryo Koun Co., Ltd. Seiho Kaiun Kaisha., Ltd. Saryo Service Co., Ltd. Mitsubishi Logistics America Corporation Mitsubishi Warehouse California Corporation Mitsubishi Logistics Europe B.V. Fuji Logistics Europe B.V. Mitsubishi Logistics China Co., Ltd. Shanghai Linghua Logistics Co., Ltd. * Shanghai Linghua Qingsheng Logistics Co., Ltd. Shanghai Qingke Warehouse Management Co., Ltd. Shanghai Lingyun Global Forwarding Co., Ltd. Fuji Logistics (China) Co., Ltd. Fuji Logistics (Dalian F.T.Z.) Co., Ltd. Fuji Logistics (Shanghai) Co., Ltd. Mitsubishi Logistics Hong Kong Ltd. Fuji Logistics (H.K.) Co., Ltd. Mitsubishi Logistics Thailand Co., Ltd. P.T. Mitsubishi Logistics Indonesia P.T. Dia-Jaya Forwarding Indonesia Fuji Logistics Malaysia SDN. BHD.

Subsidiaries and Af liates Accounted for by the Equity Method (3 companies)

* MY Terminals Holdings, Limited (Note) * Company marked with an asterisk was included as Kusatsu Soko Co., Ltd. an equity-method afﬁliate from the current ﬁscal year (Nippon Jupiter Global Limited Container Terminals Co., Ltd, which became a wholly owned subsidiary of MY Terminals Holdings, Limited was excluded.)

Principal Business Logistics Segment Warehousing & Distribution Business Business conducting storage and handling of incoming and outgoing cargo, etc. at warehouses containing consigned items Land Transportation Business Business conducting transport and usage transport, etc. by freight automobiles Harbor Transportation Business Business conducting coastal cargo handling and onboard cargo handling, etc. at ports International Transportation Business Business conducting handling of international product transport, etc. (including handling domestic marine cargo transport)

Real Estate Segment Business conducting consignment, design and oversight of purchase, leasing, management and construction of real estate 8

010_0808001371908.indd 8 2019/09/20 16:48:11 9

011_0808001371908.indd 9 2019/09/30 10:20:07 Consolidated Balance Sheets

March 31, March 31, ASSETS 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) (Note 1) CURRENT ASSETS: Cash and deposits (Notes 2 and 4) ¥41,337 ¥38,330 $372,439 Marketable securities (Notes 2, 4 and 5) 2,000 2,000 18,020

Notes and accounts receivable (Notes 3, 4 and 6) 44,745 41,499 403,144 Allowance for doubtful accounts (41) (45) (369) 44,704 41,454 402,775 Real estate held for sale 14,332 11,712 129,129 Other 2,185 2,106 19,686 TOTAL CURRENT ASSETS 104,558 95,602 942,049

PROPERTY AND EQUIPMENT (Notes 9, 10, 14 and 16): Land 89,571 86,750 807,019 Buildings and structures 387,661 378,607 3,492,756 Machinery and equipment 39,236 38,466 353,509 Transportation equipment 9,116 8,825 82,134 Construction in progress 2,068 3,539 18,632 527,652 516,187 4,754,050 Accumulated depreciation (308,152) (300,779) (2,776,395) NET PROPERTY AND EQUIPMENT 219,500 215,408 1,977,655

INVESTMENTS AND OTHER ASSETS: Investments in non-consolidated subsidiaries and affiliates 20,628 7,405 185,855 Investments in securities (Notes 4 and 5) 114,342 119,693 1,030,201 Long-term loans receivable 517 514 4,658 Intangible assets (Note 14) 14,058 14,601 126,660 Goodwill 630 950 5,676 Deferred income taxes (Note 7) 2,915 2,866 26,264 Other 5,448 5,013 49,085 Allowance for doubtful accounts (21) (21) (189) TOTAL INVESTMENTS AND OTHER ASSETS 158,517 151,021 1,428,210 ¥482,575 ¥462,031 $4,347,914

The accompanying notes are an integral part of these statements.

011_0808001371908.indd 10 2019/09/30 10:20:07 LIABILITIES AND NET ASSETS March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) (Note 1) CURRENT LIABILITIES: Short-term bank loans and current maturities of long-term debt (Notes 4, 10 and 11) ¥31,467 ¥19,130 $283,512 Notes and accounts payable (Notes 3, 4 and 6) 37,480 33,153 337,687 Income taxes payable 2,717 2,265 24,480 Other (Notes 10 and 11) 3,526 3,312 31,769 TOTAL CURRENT LIABILITIES 75,190 57,860 677,448

LONG-TERM LIABILITIES: Long-term debt, less current maturities (Notes 4, 10 and 11) 55,236 52,782 497,666 Deposits on long-term leases (Notes 4, 6 and 10) 20,680 21,947 186,323 Retirement benefits (Note 12) 10,237 11,159 92,234 Deferred income taxes (Note 7) 21,871 23,468 197,054 Other (Note 11) 256 265 2,307 TOTAL LONG-TERM LIABILITIES 108,280 109,621 975,584 TOTAL LIABILITIES 183,470 167,481 1,653,032

CONTINGENT LIABILITIES (Note 15)

NET ASSETS SHAREHOLDERS’ EQUITY: Common stock authorized – 220,000,000 shares, issued – 87,960,739 shares, 22,394 22,394 201,766 Capital surplus 19,565 19,567 176,277 Retained earnings 197,675 188,651 1,781,016 Treasury shares (845) (842) (7,613) TOTAL SHAREHOLDERS’ EQUITY 238,789 229,770 2,151,446 ACCUMULATED OTHER COMPREHENSIVE INCOME Net unrealized holding gains on securities 57,098 60,874 514,443 Foreign currency translation adjustments 234 960 2,108 Remeasurements of defined benefit plans 46 143 414 TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME 57,378 61,977 516,965 NON-CONTROLLING INTERESTS 2,938 2,803 26,471 TOTAL NET ASSETS 299,105 294,550 2,694,882 ¥482,575 ¥462,031 $4,347,914

The accompanying notes are an integral part of these statements.

011_0808001371908.indd 11 2019/09/30 10:20:08 Consolidated Statements Of Income

Year ended March 31, Year ended March 31, 2019 2018 2017 2019 (Millions of yen) (Thousands of U.S. dollars) (Note 1) REVENUE ¥227,186 ¥215,408 ¥208,719 $2,046,905 COST OF SERVICES 203,826 192,594 185,574 1,836,436 Gross profit 23,360 22,814 23,145 210,469 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 10,699 10,393 10,397 96,396 Operating income 12,661 12,421 12,748 114,073 OTHER INCOME (EXPENSES): Interest and dividend income 3,742 2,874 2,272 33,715 Interest expense (491) (602) (635) (4,424) Gain on sale of marketable securities and investments 990 369 37 8,920 in securities (Note 5) Gain (loss) on revaluation of marketable securities and (519) 9 (28) (4,676) investments in securities Gain (loss) on disposal of property and equipment (716) (876) (639) (6,451) Impairment loss (Note 14) (69) (147) (194) (622) Compensation income 261 – 353 2,352 Equity in earnings of non-consolidated subsidiaries and 1,535 1,403 526 13,830 affiliates Indemntity income of exiting facilities for lease – – 210 – (Note 13) Foreign exchange gains (losses) (528) (267) 825 (4,757) Other, net (74) 186 321 (667) 4,131 2,949 3,048 37,220 Profit before income taxes 16,792 15,370 15,796 151,293 INCOME TAXES (Note 7) Current 4,890 4,843 4,544 44,058 Deferred 106 (145) 489 955 4,996 4,698 5,033 45,013 Profit 11,796 10,672 10,763 106,280 PROFIT ATTRIBUTABLE TO NON-CONTROLLING INTERESTS (231) (154) (98) (2,081) PROFIT ATTRIBUTABLE TO OWNERS OF PARENT ¥11,565 ¥10,518 ¥10,665 $104,199

AMOUNTS PER SHARE: Yen U.S.dollars (Note 1) Profit attributable to owners of parent ¥132.03 ¥120.07 ¥121.75 $1.19 Cash dividends applicable to the year ¥45.00 ¥21.00 ¥14.00 $0.41

The accompanying notes are an integral part of these statements.

011_0808001371908.indd 12 2019/09/30 10:20:08 Consolidated Statements Of Comprehensive Income

Year ended March 31, Year ended March 31, 2019 2018 2017 2019 (Millions of yen) (Thousands of U.S. dollars) (Note 1) PROFIT ¥11,796 ¥10,672 ¥10,763 $106,280 OTHER COMPREHENSIVE INCOME: Net unrealized holding gains (losses) on securities (3,844) 9,470 11,170 (34,634) Foreign currency translation adjustments (713) 101 (702) (6,424) Remeasurements of defined benefit plans (96) 221 387 (865) Share of other comprehensive income of affiliates (21) (119) (64) (189) accounted for using the equity method Total other comprehensive income (Note 8) (4,674) 9,673 10,791 (42,112)

COMPREHENSIVE INCOME (Note 8) ¥7,122 ¥20,345 ¥21,554 $64,168

Comprehensive income attributable to: Comprehensive income attributable to owners of parent ¥6,965 ¥20,162 ¥21,463 $62,753 Comprehensive income attributable to non-controlling interests 157 183 91 1,415

The accompanying notes are an integral part of these statements.

011_0808001371908.indd 13 2019/09/30 10:20:08 Consolidated Statements Of Changes In Net Assets

Common Stock Foreign Net unrealized currency Remeasurements Capital Retained Treasury holding gains translation of defined Non-controlling Shares Amount surplus earnings shares on securities adjustments benefit plans interests (Thousands (Millions of yen) of shares) Balance at March 31, 2016 175,921 ¥22,394 ¥19,618 ¥172,200 ¥(807) ¥40,282 ¥1,703 ¥(450) ¥2,584 Cash dividends – – – (2,103) – – – – – Profit attributable to owners of – – – 10,665 – – – – – parent Purchase of treasury shares – – – – (26) – – – – Disposal of treasury shares – – 0 – 1 – – – – Change in treasury shares of parent arising from transactions with – – (51) – – – – – – non-controlling shareholders Changes other than to stockholders’ – – – – – 11,141 (728) 385 63 equity, net Share consolidation –––––––– – Balance at March 31, 2017 175,921 ¥22,394 ¥19,567 ¥180,762 ¥(832) ¥51,423 ¥ 975 ¥ (65) ¥2,647 Cash dividends – – – (2,629) – – – – – Profit attributable to owners of – – – 10,518 – – – – – parent Purchase of treasury shares – – – – (10) – – – – Disposal of treasury shares – – 0 – 0 – – – – Change in treasury shares of parent arising from transactions –––––––– – with non-controlling shareholders Changes other than to stockholders’ – – – – – 9,451 (15) 208 156 equity, net Share consolidation (87,961) – – – – – – – – Balance at March 31, 2018 87,961 ¥22,394 ¥19,567 ¥188,651 ¥(842) ¥60,874 ¥ 960 ¥ 143 ¥2,803 Cash dividends – – – (2,541) – – – – – Profit attributable to owners of – – – 11,565 – – – – – parent Purchase of treasury shares – – – – (3) – – – – Disposal of treasury shares – – 0 – 0 – – – – Change in treasury shares of parent arising from transactions – – (2) – – – – – – with non-controlling shareholders Changes other than to stockholders’ – – – – – (3,776) (726) (97) 135 equity, net Balance at March 31, 2019 87,961 ¥22,394 ¥19,565 ¥197,675 ¥(845) ¥57,098 ¥ 234 ¥ 46 ¥2,938

Foreign Net unrealized currency Remeasurements Common Capital Retained Treasury holding gains translation of defined Non-controlling Stock surplus earnings shares on securities adjustments benefit plans interests (Thousands of U.S. dollars) (Note 1) Balance at March 31, 2018 $201,766 $176,295 $1,699,712 $(7,586) $548,464 $8,649 $1,288 $25,255 Cash dividends – – (22,895) – – – – – Profit attributable to owners of parent – – 104,199 – – – – – Purchase of treasury shares – – – (27) – – – – Disposal of treasury shares – 0 – 0 – – – – Change in treasury shares of parent arising from – (18) – – – – – – transactions with non-controlling shareholders Changes other than to stockholders’ equity, net – – – – (34,021) (6,541) (874) 1,216 Balance at March 31, 2019 $201,766 $176,277 $1,781,016 $(7,613) $514,443 $2,108 $ 414 $26,471 The accompanying notes are an integral part of these statements. 14

011_0808001371908.indd 14 2019/09/30 10:20:08 Consolidated Statements Of Cash Flows

Year ended March 31, Year ended March 31, 2019 2018 2017 2019 (Millions of yen) (Thousands of U.S. dollars) (Note 1) CASH FLOWS FROM OPERATING ACTIVITIES: Profit before income taxes ¥16,792 ¥15,370 ¥15,796 $151,293 Depreciation and amortization 12,996 12,747 12,925 117,092 Impairment loss 69 147 194 622 Decrease in retirement benefits (922) (1,228) (1,343) (8,307) Gain (loss) on revaluation of marketable securities and 501 (44) 21 4,514 investments in securities Gain on sales of marketable securities and (990) (369) (37) (8,920) investments in securities Loss on disposal of property and equipment 434 404 261 3,910 Equity in earnings of non-consolidated subsidiaries (1,535) (1,403) (526) (13,830) and affiliates Interest and dividend income (3,742) (2,874) (2,272) (33,715) Interest expense 491 602 635 4,424 Decrease (increase) in notes and accounts receivable (3,415) (4,476) (2,797) (30,769) Decrease (increase) in real estate held for sale (2,620) (1,866) 1,122 (23,606) Increase (decrease) in notes and accounts payable 4,214 1,914 1,871 37,967 Increase (decrease) in deposits payable 866 752 (1,038) 7,803 Other, net 136 2,078 (808) 1,226 Subtotal 23,275 21,754 24,004 209,704 Interest and dividend income received in cash 5,028 5,575 2,542 45,301 Interest expense paid in cash (516) (567) (611) (4,649) Income taxes paid in cash (4,435) (5,281) (4,468) (39,959) NET CASH PROVIDED BY OPERATING ACTIVITIES 23,352 21,481 21,467 210,397

CASH FLOWS FROM INVESTING ACTIVITIES: Cash investment to time deposits (311) (729) (599) (2,802) Cash return from time deposits 881 912 1,410 7,938 Acquisition of property and equipment (19,886) (22,814) (23,472) (179,169) Proceeds from sales of property and equipment 251 54 342 2,261 Acquisition of marketable securities and investments (13,981) (41) (39) (125,966) in securities Proceeds from sales of marketable securities and 1,256 372 53 11,316 investments in securities Other, net 4 27 35 36 NET CASH USED IN INVESTING ACTIVITIES (31,786) (22,219) (22,270) (286,386)

The accompanying notes are an integral part of these statements. 15

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Year ended March 31, Year ended March 31, 2019 2018 2017 2019 (Millions of yen) (Thousands of U.S. dollars) (Note 1) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from short-term bank loans ¥19,148 ¥13,311 ¥ 2,022 $172,520 Repayments of short-term bank loans (8,902) (13,224) (1,965) (80,205) Proceeds from long-term debt 12,900 100 5 116,227 Repayments of long-term debt (1,349) (9,858) (5,387) (12,154) Redemption of bonds (7,000) – – (63,069) Issue of bonds – 15,900 – – Dividends paid (2,541) (2,629) (2,104) (22,894) Other, net (189) (181) (391) (1,703) NET CASH PROVIDED BY (USED IN) 12,067 3,419 (7,820) 108,722 FINANCING ACTIVITIES

EFFECT OF EXCHANGE RATE CHANGES ON CASH (242) (22) (114) (2,181) AND CASH EQUIVALENTS NET INCREASE (DECREASE) IN CASH AND CASH 3,391 2,659 (8,737) 30,552 EQUIVALENTS CASH AND CASH EQUIVALENTS AT 39,581 36,922 45,659 356,618 BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 2) ¥42,972 ¥39,581 ¥36,922 $387,170

The accompanying notes are an integral part of these statements.

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NOTE 1 – SUMMARY OF ACCOUNTING POLICIES

BASIS OF PRESENTING CONSOLIDATED FINANCIAL March 31, STATEMENTS The accompanying consolidated financial statements of 2019 2018 2017 Mitsubishi Logistics Corporation (the “Company”) have been Consolidated subsidiaries 51 51 52 prepared in accordance with the provisions set forth in the Non-consolidated subsidiaries Japanese Financial Instruments and Exchange Law and its and affiliates accounted for by related accounting regulations, and in conformity with accounting principles generally accepted in Japan (“Japanese the equity method 3 3 3 GAAP”), which are different in certain respects as to application and disclosure requirements of International Financial Reporting CONSOLIDATED STATEMENTS OF CASH FLOWS Standards. In preparing the consolidated statements of cash flows, cash on The accompanying consolidated financial statements have hand, readily-available deposits and short-term highly liquid been restructured and translated into English from the investments with negligible risk of changes in value and consolidated financial statements of the Company prepared in maturities not exceeding six months at the time of purchase are accordance with Japanese GAAP and filed with the appropriate considered to be cash and cash equivalents. Local Finance Bureau of the Ministry of Finance as required by the Japanese Financial Instruments and Exchange Law. Some CONVERSION OF ASSETS AND LIABILITIES supplementary information included in the statutory Japanese DENOMINATED IN FOREIGN CURRENCIES language consolidated financial statements, but not required for Receivables and payables denominated in foreign currencies are fair presentation, is not presented in the accompanying translated into Japanese yen at the year-end rates. consolidated financial statements. Gains or losses resulting from conversion are credited or The translations of Japanese yen amounts into U.S. dollars charged to income as incurred. are included solely for the convenience of readers outside Japan, using the prevailing exchange rate at March 31, 2019, which was DERIVATIVES AND HEDGE ACCOUNTING ¥110.99 to U.S. $1. The convenience translations should not be The accounting standard for financial instruments requires construed as representations that the Japanese yen amounts have companies to state derivative financial instruments at fair value been, could have been, or could in the future be converted into and to recognize changes in fair value as gains and losses unless U.S. dollars at this or any other rate of exchange. derivative financial instruments are used for hedging purposes. If derivative financial instruments are used as hedges and CONSOLIDATION meet certain hedging criteria, the Company and its consolidated In consolidation, all significant inter-company transactions, subsidiaries defer recognition of gains and losses resulting from account balances and unrealized profits are eliminated. changes in fair value of derivative financial instruments until Differences between the acquisition costs and underlying net related gains and losses on the hedged items are recognized. equities of investments in consolidated subsidiaries are recorded However, in cases where forward foreign exchange as goodwill in the consolidated balance sheets and amortized contracts are used as hedges and meet certain hedging criteria, over 5 to 10 years on a straight-line basis. Any immaterial forward foreign exchange contracts and hedged items are amounts are fully recognized as expenses as incurred. The effect accounted for in the following manner. on retained earnings and net income of non-consolidated subsidiaries and affiliates not accounted for by the equity method (1) If a forward foreign exchange contract is executed to hedge is immaterial to the consolidated financial statements, and an existing foreign currency receivable and payable: investments therein are carried at cost after adjusting for any (i) The difference, if any, between the Japanese yen substantial and non-recoverable decline in value. amount of the hedged foreign currency receivable or The Company holds 51% of voting rights in MLC ITL payable translated using the spot rate at the inception Logistics Company Limited, however, the other shareholders’ date of the contract and the book value of the agreement is necessary to decide important policies on finance receivable or payable is recognized in the statements of and trade. Therefore, the Company does not treat MLC ITL income in the period which includes the inception date; Logistics Company Limited as its subsidiary. and The numbers of consolidated subsidiaries and non- (ii) The discount or premium on the contract (that is, the consolidated subsidiaries and affiliates accounted for by the difference between the Japanese yen amount of the equity method at March 31, 2019, 2018 and 2017 were as contract translated using the contracted forward rate follows: and that translated using the spot rate at the inception date of the contract) is recognized over the term of the contract. 17

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(2) If a forward foreign exchange contract is executed to reported, net of applicable income taxes, as a separate hedge a future forecasted transaction denominated in component of net assets. Realized gains and losses on sale of foreign currency, the future transaction will be recorded such securities are computed using moving-average cost. using the contracted forward rate, and no gains or losses Available-for-sale securities with no available fair value are on the forward foreign exchange contract are recognized. stated at moving-average cost. Equity securities issued by non- Also, if interest rate swap contracts are used as hedges and consolidated subsidiaries and affiliates which are not meet certain hedging criteria, the net amount to be paid or consolidated or accounted for using the equity method are stated received under the interest rate swap contract is added to or at moving-average cost. deducted from the interest on the assets or liabilities for which Under the accounting standard for financial instruments, the swap contract was executed. all companies are required to examine their intent for holding The following summarizes hedging derivative financial each security and classify those securities as (a) securities held instruments used by the Company and its consolidated for trading purposes (hereinafter, “Trading Securities”), (b) debt subsidiaries and hedged items. securities intended to be held to maturity (hereinafter, “Held-to- Hedging instruments: Foreign exchange contracts and maturity Debt Securities”), (c) equity securities issued by interest rate swap contracts. subsidiaries and affiliates, and (d) all other securities that are not Hedged items: Foreign currency assets and liabilities and classified in any of the above categories (“Available-for-sale interest rates of bank loans. Securities”). The hedge effectiveness of foreign exchange contracts The Company and its consolidated subsidiaries only hold accounted for in the above manner and that of interest rate swaps those securities classified as equity securities issued by meeting specific hedging criteria are not evaluated at the end of subsidiaries and affiliates and Available-for-sale Securities. the period. If the market value of Available-for-sale Securities The Company and its consolidated subsidiaries use foreign declines significantly, such securities are stated at fair market exchange contracts and interest rate swap contracts for the value, and the difference between fair market value and the book purpose of managing the exposure to fluctuations in foreign value is recognized as loss in the period of decline. For equity currency exchange and interest rates of bank loans, respectively. securities with no available fair market value, if the net asset The Company and its consolidated subsidiaries do not value of the investee declines significantly, such securities are enter into derivatives for speculative purposes. required to be written down to the net asset value with the corresponding losses recognized in the period of decline. In TRANSLATION OF FOREIGN CURRENCY STATEMENTS these cases, such fair market value or the net asset value will be The balance sheets of overseas subsidiaries are translated into the book value of the securities at the beginning of the next year. Japanese yen at the rate of exchange at the balance sheet date of the subsidiaries, which is December 31, except for shareholders’ REAL ESTATE HELD FOR SALE equity accounts, which are translated based on historical rates. Real estate held for sale is stated at cost determined using the The year-end rate of the subsidiaries is also used for translation specific identification cost method. In case the net selling value of income, expenses and net income for the year. The resulting falls below the acquisition cost at the end of the period, real translation adjustments are presented as “foreign currency estate held for sale is carried at the net selling value on the translation adjustments” and “non-controlling interests” in the balance sheet. accompanying consolidated financial statements. INCOME TAXES ALLOWANCE FOR DOUBTFUL ACCOUNTS Income taxes consist of corporation, enterprise and inhabitants To provide for losses resulting from unrecoverable claims such taxes. Income taxes for recognition are computed based on the as accounts and loans receivable, allowance for doubtful pretax income of the Company and each of its consolidated accounts is recorded based on the historical write-off rate for subsidiaries with certain adjustments required for consolidated ordinary receivables, and based on expected uncollectable and tax purposes. The asset and liability approach is used to amounts individually for receivables. recognize deferred tax assets and liabilities for loss carryforwards and expected future tax consequences of SECURITIES temporary differences between the book value and the tax bases Available-for-sale securities (see explanation (d) below) with of assets and liabilities. Valuation allowances are recorded to available fair market values are stated at fair market value. reduce deferred tax assets based on the assessment of Unrealized gains and unrealized losses on these securities are realizability of tax benefits.

011_0808001371908.indd 18 2019/09/30 10:20:08 DEPRECIATION (2)Provision for directors’ retirement benefits (1)Property and equipment (excluding leased assets) To provide for payments of retirement benefits for directors at Property and equipment are stated at cost. The declining-balance certain consolidated subsidiaries, amounts to be paid at the end method is applied. of the current fiscal year are recorded, based on entity’s rules. Warehouse facilities (actual buildings), commercial facilities for lease (actual buildings) and facilities and structures NET ASSETS attached to buildings acquired on or after April 1, 2016 are Under the Japanese Corporate Law (the “Law”) and regulations, calculated using the straight-line method. Furthermore, useful the entire amount paid for new shares is required to be lives are estimated according to stipulations of the Corporation designated as common stock. However, a company may, by a Tax Act, and lives for commercial facilities for lease (actual resolution of the board of directors, designate an amount not buildings) are determined with a standard of 20 years, taking into exceeding one-half of the price of the new shares as additional account the lease agreement period, etc. paid-in capital, which is included in capital surplus in the accompanying consolidated balance sheets. (2)Intangible assets (excluding leased assets) Under the Law, in cases where a dividend distribution of The straight-line method is applied. surplus is made, the smaller of an amount equal to 10% of the Computer software for internal use is amortized over the dividend or the excess, if any, of 25% of common stock over the estimated internal useful life (5 to 10 years) using the straight- total of additional paid-in capital and legal earnings reserve must line method. be set aside as additional paid-in capital or legal earnings reserve. Legal earnings reserve is included in retained earnings (3)Leased assets in the accompanying consolidated balance sheets. Leased assets held under finance lease which do not transfer Under the Law, legal earnings reserve and additional paid- ownership to the lessee are depreciated using the straight-line in capital could be used to eliminate or reduce a deficit or method with no residual value over the lease term of the leased capitalized by a resolution at the shareholders’ meeting. assets. Additional paid-in capital and legal earnings reserve may not be distributed as dividends. Under the Law, all additional ALLOWANCE FOR BONUSES FOR DIRECTORS paid-in capital and all legal earnings reserve may be transferred The Company provides allowance for bonuses for directors to other capital surplus and retained earnings, respectively, which based on the estimated amounts of payment. may potentially become available as dividends. The maximum amount that the Company can distribute as RETIREMENT BENEFITS AND PENSION PLAN dividends is calculated based on the non-consolidated financial (1) Employees’ severance and retirement benefits statements of the Company in accordance with Japanese laws The Company and its consolidated subsidiaries have adopted and regulations. defined benefit plans which include unfunded lump-sum Appropriations are not accrued in the consolidated payment plans and funded contributory defined benefit pension financial statements for the corresponding period, but are plans. Furthermore, the Company and its consolidated recorded in the subsequent accounting period after shareholders’ subsidiaries provide a defined contribution pension plan. approval has been obtained. The Company and its consolidated subsidiaries provide Retained earnings at March 31, 2019 included amounts allowance for employees’ severance and retirement benefits representing year-end cash dividends of ¥2,629 million ($23,687 based on the estimated amounts of projected benefit obligation thousand) at ¥30.0 ($0.27) per share, which were approved at the and the fair value of the plan assets at year-end. Some shareholders’ meeting held on June 27, 2019. consolidated subsidiaries apply the simplified methods for the calculation of retirement benefit obligations and employees’ PER SHARE INFORMATION severance and retirement benefit expenses. Basic earnings per share is computed based upon the weighted Upon calculating the retirement benefit obligation, the average number of shares outstanding during each fiscal year. estimated benefit obligation is attributed to the period up until Cash dividends per share are presented on an accrual basis the fiscal year on a benefit formula basis. Actuarial calculation and include dividends to be approved after the balance sheet differences are amortized using the straight-line method over a date, but applicable to the year then ended. certain period (5 to 15 years) within the average remaining years Information on diluted earnings per share is not disclosed of service of employees, beginning from the fiscal year following as no shares which diluted earnings per share were outstanding the incurred year. Prior service costs are recognized using the for the years ended March 31, 2019, 2018 and 2017. straight-line method over a certain period (15 years) within the As the Company carried out a reverse stock split at a ratio average remaining years of service of employees, beginning of one share for every two shares of common stock, with an from the incurred year. effective date of October 1, 2017, basic earnings per share of the Group and the Company are calculated based on the assumption

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that the reverse stock split was conducted at the beginning of the Step 5: Recognize revenue when (or as) the entity satisfies fiscal year ended March 31, 2017. a performance obligation. The annual dividend per share for the fiscal year ended (2) Effective date March 31, 2018, amounting to ¥21.0, is a total of the interim Effective from the beginning of the fiscal year ending dividend per share of ¥7.0 and the year-end dividend per share of March 31, 2022. ¥14.0. As the Company carried out a reverse stock split at a ratio (3) Effects of the application of the standards of one share for every two shares of common stock, with an The Company and its consolidated domestic subsidiaries effective date of October 1, 2017, the interim dividend per share are currently in the process of determining the effects of of ¥7.0 is the amount before the reverse stock split and the year- these new standards on the consolidated financial end dividend per share of ¥14.0 is the amount after the reverse statements. stock split.

CHANGES IN PRESENTATION (Changes due to the Application of “Partial Amendments to Accounting Standard for Tax Effect Accounting”) In accordance with the application of “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28, February 16, 2018), from the beginning of the fiscal year, presentation have been changed so that deferred income tax assets are presented as investments and other assets, and deferred income tax liabilities are presented as long-term liabilities. As a result, “deferred income taxes” of ¥1,695 million that were included in “current assets,” and “deferred income taxes” of ¥1 million that were included in “other” under “current liabilities” in the consolidated balance sheet for the previous consolidated fiscal year are included in “deferred income tax assets” of ¥2,866 million under “investments and other assets,” and “deferred income tax liabilities” under “long-term liabilities” of ¥23,468 million. Due to the effect of offsetting “deferred income tax assets” and “deferred income tax liabilities” with the same tax authority, total assets for the previous consolidated fiscal year decreased by ¥1,143 million.

STANDARDS AND GUIDANCE NOT YET ADOPTED The following standard and guidance were issued but not yet adopted. • “Accounting Standard for Revenue Recognition” (ASBJ Statement No.29, March 30, 2018) • “Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No.30, March 30, 2018) (1) Overview The above standard and guidance provide comprehensive principles for revenue recognition. Under the standard and guidance, revenue is recognized by applying following 5 steps: Step 1: Identify contract(s) with customers. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligation in the contract. 20

011_0808001371908.indd 20 2019/09/30 10:20:08 NOTE 2 – CASH AND CASH EQUIVALENTS Reconciliation of cash and deposits in the consolidated balance sheets and cash and cash equivalents in the consolidated statements of cash flows as of March 31, 2019, 2018 and 2017 were as follows: March 31, March 31, 2019 2018 2017 2019 (Millions of yen) (Thousands of U.S. dollars) Cash and deposits ¥41,337 ¥38,330 ¥37,841 $372,439 Time deposits with maturities over six months (365) (749) (919) (3,289) Money funds invested in bonds and domestic 2,000 2,000 – 18,020 certificates of deposits Cash and cash equivalents ¥42,972 ¥39,581 ¥36,922 $387,170

NOTE 3 – EFFECT OF THE MARCH 31, 2019, BANK HOLIDAY With respect to accounting for notes maturing at the end of the fiscal year, they are settled on the clearance date. As the consolidated fiscal year end date fell on a bank holiday, the following notes maturing on the fiscal year end date were included in the balance as of the end of the fiscal year. March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Notes receivable ¥109 ¥40 $982 Notes payable ¥ 2 ¥20 $ 18

NOTE 4 – FINANCIAL INSTRUMENTS 1. CONDITIONS OF FINANCIAL INSTRUMENTS (1) Policy for using financial instruments The Company and its consolidated subsidiaries raise necessary funds in accordance with their performance plans and capital investment plans mainly by bank loans or issuance of bonds. Temporary cash surplus, if any, are invested in highly-secured deposits, public bonds and corporate bonds. Derivatives are used not for speculative purposes but based on actual demand.

(2) Details of financial instruments used, risks and risk management Notes and accounts receivable are exposed to credit risk of customers. Against such credit risk, the Company and its consolidated subsidiaries perform due date and balance controls for each customer in accordance with internal customer credit management rules and regularly screen customers’ credit status. Stocks as investments in securities are subject to risk of changes in market price. They are mainly stocks issued by companies with which the Company and/or its consolidated subsidiaries have business relations. The Company and its consolidated subsidiaries ascertain the fair values of stocks at regular intervals, and the fair values are reported at each board of directors meeting. The account derived from operating expenses, notes and accounts payable, is all settled within a year, and subject to risk of liquidity. The Company and its consolidated subsidiaries hedge such risk by timely reconsideration of monthly financial plans. Short-term bank loans are obtained mainly for financing related to trade. Otherwise, long-term debts are obtained mainly for financing related to investments in non-current assets. Because long-term debts with floating interest rates are subject to risk of fluctuation of these rates, one consolidated subsidiary utilizes interest rate swap contracts as hedging instrument for each loan contract to attempt to avoid such risk found in long-term debts. It is prescribed that approval by the manager of each entity’s finance section is necessary for execution and management of such derivative transaction in accordance with the Company’s policy on authorizing transactions, limiting the amount and others. 21

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(3) Supplemental information on fair values Fair values of financial instruments comprise values determined based on market prices and values determined reasonably when there is no market price available. Since variable factors are considered in computing the relevant fair values, such fair values may vary depending on different factors used.

2. FAIR VALUES OF FINANCIAL INSTRUMENTS The amounts posted on the consolidated balance sheet, the fair values, and the differences thereof as of March 31, 2019 and 2018 are as follows. Items whose fair values are extremely difficult to measure are not included in the following table (see (Note 2)). March 31,2019 March 31,2019 Consolidated Consolidated balance sheet balance sheet amount Fair value Difference amount Fair value Difference (Millions of yen) (Thousands of U.S. dollars) Assets (1) Cash and deposits ¥41,337 ¥41,337 ¥– $372,439 $372,439 $– (2) Notes and accounts receivable 40,603 40,603 – 365,826 365,826 – (3) Marketable securities 2,000 2,000 – 18,020 18,020 –

(4) Investment in securities (available- 113,203 113,203 – 1,019,939 1,019,939 – for-sale securities) ¥197,143 ¥197,143 ¥– $1,776,224 $1,776,224 $–

Liabilities (1) Notes and accounts payable ¥27,397 ¥27,397 ¥– $246,842 $246,842 $– (2) Short-term bank loans 20,995 20,995 – 189,161 189,161 – (3) Bonds payable 36,000 36,472 472 324,354 328,606 4,252 (4) Long-term loans payable *1 29,708 29,858 150 267,664 269,015 1,351 (5) Deposits on long-term leases 1,165 1,181 16 10,496 10,641 145 (6) Derivatives – – – – – – ¥115,265 ¥115,903 ¥638 $1,038,517 $1,044,265 $5,748 *1: Including current maturities of long-term debt. March 31, 2018 Consolidated balance sheet amount Fair value Difference (Millions of yen) Assets (1) Cash and deposits ¥38,330 ¥38,330 ¥– (2) Notes and accounts receivable 37,633 37,633 – (3) Marketable securities 2,000 2,000 – (4) Investment in securities (available-for-sale securities) 118,543 118,543 – ¥196,506 ¥196,506 ¥–

Liabilities (1) Notes and accounts payable ¥23,838 ¥23,838 ¥– (2) Short-term bank loans 10,753 10,753 – (3) Bonds payable 43,000 43,464 464 (4) Long-term loans payable *1 18,159 18,248 89 (5) Deposits on long-term leases 1,165 1,162 (3) (6) Derivatives – – – ¥96,915 ¥97,465 ¥550 *1: Including current maturities of long-term debt. 22

011_0808001371908.indd 22 2019/09/30 10:20:09 (Note 1) Calculation method of fair values of financial instruments and securities & derivative transactions Assets: (1) Cash and deposits (2) Notes and accounts receivable (3) Marketable securities Relevant consolidated balance sheet amounts are used because the settlement term of the above items is short and their fair values approximate their consolidated balance sheet amounts. (4) Available for-sale securities in investment in securities The fair values of stocks are determined using the quoted price at the stock exchange, and the fair values of bonds are determined using the market price. Information on securities categorized by holding purpose is described in NOTE 5 (SECURITIES).

Liabilities: (1) Notes and accounts payable (2) Short-term bank loans Relevant consolidated balance sheet amounts are used because the settlement term of the above items is short and their fair values approximate their consolidated balance sheet amounts. (3) Bonds payable The fair values of bonds issued by the Company are calculated using the market price. (4) Long-term loans payable Long-term loans payable with floating interest rates require that the interest rates be amended at certain periods of time. Therefore, relevant book values are used because their fair values approximate their book values. Long-term loans payable with fixed interest rates are calculated using the present value of the amount of principal and interest discounted using the current borrowing rate for similar loans of comparable maturity. Certain long-term loans payable with floating interest rates are subject to special treatment of interest rate swaps (See NOTE 17). Therefore, the fair values of such long-term loans payable are calculated by discounting the total amount of principal and interest that have been recorded together with said interest rate swap by an interest rate that would reasonably be estimated to apply to a similar loan. (5) Deposits on long-term leases Deposits on long-term leases are calculated by the present value of future cash flows discounted using a risk-free rate. (6) Derivatives Information on this item is described in NOTE 17 (DERIVATIVE TRANSACTIONS).

(Note 2) Book value of financial instruments on the consolidated balance sheets for which it is extremely difficult to determine the fair value March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Unlisted securities and others *1 ¥21,376 ¥ 8,197 $192,594 Deposits on long-term leases *2 ¥19,515 ¥20,782 $175,827

*1 Unlisted securities are not included in “(4) Investment in securities (available-for-sale securities)” under “Assets” because they have no market price and their fair values are extremely difficult to measure. Non-consolidated subsidiary stocks and affiliate stocks are included. *2 Deposits on long-term leases are not included in “(5) Deposits on long-term leases” under “Liabilities” because their future cash flows cannot be estimated and their fair values are extremely difficult to measure.

011_0808001371908.indd 23 2019/09/30 10:20:09 Notes To Consolidated Financial Statements

(Note 3) The redemption schedule for monetary claims and securities with contractual maturities March 31, 2019 Millions of yen One year One to Five to Over or less five years ten years ten years Cash and deposits ¥41,337 ¥ – ¥ – ¥ – Notes and accounts receivable 40,603 – – – Marketable securities (certificate of deposits) 2,000 – – – ¥83,940 ¥ – ¥ – ¥ –

March 31, 2018 Millions of yen One year One to Five to Over or less five years ten years ten years Cash and deposits ¥38,330 ¥ – ¥ – ¥ – Notes and accounts receivable 37,633 – – – Marketable securities (certificate of deposits) 2,000 – – – ¥77,963 ¥ – ¥ – ¥ –

March 31, 2019 Thousands of U.S. dollars One year One to Five to Over or less five years ten years ten years Cash and deposits $372,439 $– $– $– Notes and accounts receivable 365,826 – – – Marketable securities (certificate of deposits) 18,020 – – – $756,285 $– $– $–

011_0808001371908.indd 24 2019/09/30 10:20:09 (Note 4) Repayment schedule of short-term bank loans, bonds payable, long-term loans and deposits on long-term leases March 31, 2019 Millions of yen One year One to Two to Three to four Four to Over or less two years three years years five years five years Short-term bank loans ¥20,995 ¥– ¥– ¥– ¥– ¥– Bonds payable 5,000 5,000 5,000 – 5,000 16,000 Long-term loans 5,472 5,345 444 11,842 6,248 357 Deposits on long-term leases – – – – – 1,165 ¥31,467 ¥10,345 ¥5,444 ¥11,842 ¥11,248 ¥17,522

March 31, 2018 Millions of yen One year One to Two to Three to four Four to Over or less two years three years years five years five years Short-term bank loans ¥10,753 ¥– ¥– ¥– ¥– ¥– Bonds payable 7,000 5,000 5,000 5,000 – 21,000 Long-term loans 1,377 5,573 5,246 345 5,056 562 Deposits on long-term leases – – – – – 1,165 ¥19,130 ¥10,573 ¥10,246 ¥5,345 ¥5,056 ¥22,727

March 31, 2019 Thousands of U.S. dollars One year One to Two to Three to four Four to Over or less two years three years years five years five years Short-term bank loans $189,161 $– $– $– $– $– Bonds payable 45,049 45,049 45,049 – 45,049 144,158 Long-term loans 49,302 48,158 4,000 106,694 56,293 3,217 Deposits on long-term leases – – – – – 10,496 $283,512 $93,207 $49,049 $106,694 $101,342 $157,871

011_0808001371908.indd 25 2019/09/30 10:20:09 Notes To Consolidated Financial Statements

NOTE 5 – SECURITIES At March 31, 2019, acquisition costs, consolidated balance sheet amount stated at fair values and net unrealized holding gains (losses) of Available-for-sale Securities were as follows: March 31, 2019 March 31, 2019 Consolidated Unrealized Consolidated Unrealized balance sheet Acquisition holding gains balance sheet Acquisition holding gains amount cost (losses) amount cost (losses) (Millions of yen) (Thousands of U.S. dollars) Securities with book values exceeding acquisition costs: Stocks ¥108,138 ¥24,905 ¥83,233 $974,304 $224,390 $749,914 108,138 24,905 83,233 974,304 224,390 749,914 Other securities: Stocks 5,064 5,800 (736) 45,626 52,257 (6,631) 5,064 5,800 (736) 45,626 52,257 (6,631) ¥113,202 ¥30,705 ¥82,497 $1,019,930 $276,647 $743,283

Unlisted securities and others (book value being ¥1,145 million ($10,316 thousand)) were not included in the above list because the identification of their fair values is deemed extremely difficult due to the absence of market values and inability to estimate future cash flows.

In the year ended March 31, 2019, the amounts of sale, related gains and related losses of Available-for-sale Securities were as follows: March 31, 2019 March 31, 2019 Amount of Related Related Amount of Related Related sale gains losses sale gains losses (Millions of yen) (Thousands of U.S. dollars) Stocks ¥1,256 ¥990 ¥ – $11,316 $8,920 $ – ¥1,256 ¥990 ¥ – $11,316 $8,920 $ –

At March 31, 2018, acquisition costs, consolidated balance sheet amount stated at fair values and net unrealized holding gains (losses) of Available-for-sale Securities were as follows: March 31, 2018 Consolidated Unrealized Acquisition holding gains balance sheet cost amount (losses) (Millions of yen) Securities with book values exceeding acquisition costs: Stocks ¥115,610 ¥27,160 ¥88,450 115,610 27,160 88,450 Other securities: Stocks 2,933 3,334 (401) 2,933 3,334 (401) ¥118,543 ¥30,494 ¥88,049

011_0808001371908.indd 26 2019/09/30 10:20:09 Unlisted securities and others (book value being ¥1,156 million ($10,881 thousand)) were not included in the above list because the identification of their fair values is deemed extremely difficult due to the absence of market values and inability to estimate future cash flows.

In the year ended March 31, 2018, the amounts of sale, related gains and related losses of Available-for-sale Securities were as follows: March 31, 2018 Amount of Related Related sale gains losses (Millions of yen) Stocks ¥372 ¥369 ¥ – ¥372 ¥369 ¥ –

NOTE 6 – RECEIVABLES FROM AND PAYABLES TO NON-CONSOLIDATED SUBSIDIARIES AND AFFILIATES Significant receivables from and payables to non-consolidated subsidiaries and affiliates at March 31, 2019 and 2018 were as follows: March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Notes and accounts receivable ¥159 ¥193 $1,433 Notes and accounts payable ¥830 ¥794 $7,478 Deposits on long-term leases ¥ 26 ¥ 26 $ 234

NOTE 7 – INCOME TAXES Income taxes in the accompanying consolidated statements of income comprise corporation, enterprise and inhabitants’ taxes. The aggregated statutory tax rate was approximately 30.6%, 30.9% and 30.9% for the years ended March 31, 2019, 2018 and 2017, respectively. Information on reconciliation of tax rates for the year ended March 31, 2019, 2018 and 2017 were not disclosed as difference between the statutory tax rate and the effective tax rate was not more than 5% of the statutory tax rate.

011_0808001371908.indd 27 2019/09/30 10:20:09 Notes To Consolidated Financial Statements

Significant components of the Company and its consolidated subsidiaries’ deferred income tax assets and liabilities as of March 31, 2019 and 2018 were as follows: March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Deferred income tax assets: Enterprise taxes payable ¥209 ¥188 $1,883 Allowance for investment loss 5 16 45 Allowance for doubtful accounts 26 26 234 Accrued bonuses 949 899 8,550 Retirement benefits 3,113 3,395 28,048 Depreciation 6,520 6,276 58,744 Impairment loss 2,350 2,516 21,173 Other 2,138 1,862 19,263 15,310 15,178 137,940 Valuation allowance (1,216) (1,022) (10,956) Total deferred income tax assets 14,094 14,156 126,984 Deferred income tax liabilities: Net unrealized holding gains on securities (25,045) (26,729) (225,652) Reserve for reduction entry (7,140) (7,122) (64,330) Other (865) (907) (7,793) Total deferred income tax liabilities (33,050) (34,758) (297,775) Net deferred income tax liabilities ¥(18,956) ¥(20,602) $(170,791)

011_0808001371908.indd 28 2019/09/30 10:20:09 NOTE 8 – STATEMENTS OF COMPREHENSIVE INCOME Amounts reclassified to net income for the years ended March 31, 2019, 2018 and 2017 were recognized in other comprehensive income in the current or previous periods, and tax effects for each component of other comprehensive income were as follows: Year ended March 31, Year ended March 31, 2019 2018 2017 2019 (Millions of yen) (Thousands of U.S. dollars) Net unrealized holding gains (losses) on securities Increase (Decrease) during the year ¥(5,102) ¥13,651 ¥16,144 $(45,968) Reclassification adjustments (450) (7) (37) (4,055) Sub-total, before tax (5,552) 13,644 16,107 (50,023) Tax effect 1,708 (4,174) (4,937) 15,389 Sub-total, net of tax (3,844) 9,470 11,170 (34,634)

Foreign currency translation adjustments Increase (Decrease) during the year (713) 101 (702) (6,424)

Remeasurements of defined benefit plans Increase (Decrease) during the year (68) 431 547 (613) Reclassification adjustments (70) (113) 11 (630) Sub-total, before tax (138) 318 558 (1,243) Tax effect 42 (97) (171) 378 Sub-total, net of tax (96) 221 387 (865)

Share of other comprehensive income of affiliates accounted for using the equity method Increase (Decrease) during the year (21) (119) (64) (189)

Total other comprehensive income ¥(4,674) ¥ 9,673 ¥10,791 $(42,112)

011_0808001371908.indd 29 2019/09/30 10:20:09 Notes To Consolidated Financial Statements

NOTE 9 – REAL ESTATE FOR RENT For the year ended March 31, 2019 The Company and some of its consolidated subsidiaries have some investments and rental property such as office buildings for rent (including land) in Tokyo and other regions. For the year ended March 31, 2019, profit and loss concerning investments and rental property comprised lease profit of ¥11,295 million ($101,766 thousand), subsidy income of ¥221 million ($1,991 thousand), loss on disposal of non-current assets of ¥185 million ($1,667 thousand) and loss on disaster of ¥19 million ($171 thousand).

Information on fair value of investment and rental property included in the consolidated financial statements at March 31, 2019 is as follows: Amount on the consolidated balance sheet Fair value April 1, 2018 Decrease March 31, 2019 March 31, 2019 (Millions of yen) ¥94,123 (¥1,101) ¥93,022 ¥359,231

Amount on the consolidated balance sheet Fair value April 1, 2018 Decrease March 31, 2019 March 31, 2019 (Thousands of U.S. dollars) $848,031 ($9,920) $838,111 $3,236,607

Note: 1. The amount on the consolidated balance sheet is the amount obtained by deducting accumulated depreciation from acquisition cost. 2. Concerning net amount of increase and decrease in book value, the main factor for the increase was the costs incurred for maintenance and renewal of existing facilities amounting to ¥5,683 million ($51,203 thousand), and the main factor for the decrease was the depreciation of ¥5,759 million ($51,888 thousand). 3. Fair value as of March 31, 2019 was the amount mainly based on appraisal by an external real estate appraiser.

For the year ended March 31, 2018 The Company and some of its consolidated subsidiaries have some investments and rental property such as office buildings for rent (including land) in Tokyo and other regions. For the year ended March 31, 2018, profit and loss concerning investments and rental property comprised lease profit of ¥10,649 million, subsidy income of ¥211 million, loss on disposal of non-current assets of ¥629 million and compensation for eviction of ¥94 million.

Information on fair value of investment and rental property included in the consolidated financial statements at March 31, 2018 is as follows: Amount on the consolidated balance sheet Fair value April 1, 2017 Decrease March 31, 2018 March 31, 2018 (Millions of yen) ¥95,598 (¥1,475) ¥94,123 ¥331,837

Note: 1. The amount on the consolidated balance sheet is the amount obtained by deducting accumulated depreciation from acquisition cost. 2. Concerning net amount of increase and decrease in book value, the main factor for the increase was the costs incurred for maintenance and renewal of existing facilities amounting to ¥5,761 million, and the main factor for the decrease was the depreciation of ¥6,128 million. 3. Fair value as of March 31, 2018 was the amount mainly based on appraisal by an external real estate appraiser.

011_0808001371908.indd 30 2019/09/30 10:20:09 NOTE 10 – COLLATERAL ASSETS The net book values of the assets pledged as collateral at March 31, 2019 and 2018 were as follows: March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Land ¥1,042 ¥1,085 $9,388 Buildings and structures 14 12 126 ¥1,056 ¥1,097 $9,514

Liabilities secured by the pledged assets mentioned above at March 31, 2019 and 2018 were as follows: March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Short-term bank loans ¥300 ¥300 $2,703 Other in current liabilities 192 225 1,730 Long-term loans payable 2,387 6,514 21,506 Deposits on long-term leases 1,000 1,000 9,010 ¥3,879 ¥8,039 $34,949

011_0808001371908.indd 31 2019/09/30 10:20:09 Notes To Consolidated Financial Statements

NOTE 11 – SHORT-TERM BANK LOANS AND LONG-TERM DEBT Short-term bank loans outstanding at March 31, 2019 and 2018 were ¥20,995 million ($189,161 thousand) and ¥10,753 million, respectively, and the annual interest rates of short-term bank loans were 0.310% to 10.750% and 0.310% to 10.750%, respectively.

Long-term debt at March 31, 2019 and 2018 consisted of the following: March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Loans from banks, insurance companies and others, generally secured, between 0.470%-3.520% and 0.550%-3.520% ¥29,708 ¥18,159 $267,664 Balance in lease obligations 264 298 2,378 2.080% yen bonds due 2018, unsecured – 7,000 – 0.933% yen bonds due 2019, unsecured 5,000 5,000 45,049 1.230% yen bonds due 2021, unsecured 5,000 5,000 45,049 0.442% yen bonds due 2021, unsecured 5,000 5,000 45,049 0.734% yen bonds due 2024, unsecured 5,000 5,000 45,049 0.210% yen bonds due 2024, unsecured 8,000 8,000 72,079 0.340% yen bonds due 2027, unsecured 8,000 8,000 72,079 65,972 61,457 594,396 Less current portion (5,584) (8,517) (50,311) ¥60,388 ¥52,940 $544,085

The aggregate annual maturities of long-term loans at March 31, 2019 were as follows: Year ending March 31, Amount (Millions of yen) (Thousands of U.S. dollars) 2020 ¥ 5,472 $ 49,302 2021 5,344 48,148 2022 444 4,000 2023 11,842 106,694 2024 6,248 56,293 2025 and thereafter 358 3,227 ¥29,708 $267,664

The aggregate annual maturities of lease obligation at March 31, 2019 were as follows: Year ending March 31, Amount (Millions of yen) (Thousands of U.S. dollars) 2020 ¥112 $1,009 2021 71 640 2022 43 387 2023 30 270 2024 8 72 2025 and thereafter 0 0 ¥264 $2,378

011_0808001371908.indd 32 2019/09/30 10:20:09 NOTE 12 – RETIREMENT BENEFITS AND PENSION PLAN 1. Defined benefit plan (1) Movement in retirement benefit obligations, except for plans to which the simplified methods have been applied

March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Balance at beginning of year ¥21,671 ¥21,654 $195,252 Service cost-benefits earned during the year 1,093 1,112 9,848 Interest cost on projected benefit obligation 161 160 1,451 Actuarial loss (gain) (34) (117) (306) Benefits paid (1,264) (1,138) (11,389) Balance at end of year ¥21,627 ¥21,671 $194,856

(2) Movements in plan assets, except for plans to which the simplified methods have been applied

March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Balance at beginning of year ¥15,142 ¥13,946 $136,427 Expected return on plan assets 303 279 2,730 Actuarial gain (loss) (103) 314 (928) Contributions from the Group 1,319 1,270 11,884 Benefits paid (826) (767) (7,442) Other 102 100 919 Balance at end of year ¥15,937 ¥15,142 $143,590

(3) Defined benefit plans to which the simplified methods have been applied

March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Balance at beginning of year ¥4,454 ¥4,501 $40,130 Retirement benefit costs 433 460 3,901 Benefits paid (390) (397) (3,514) Contributions from the Group (126) (126) (1,135) Other (1) 16 (9) Balance at end of year ¥4,370 ¥4,454 $39,373

011_0808001371908.indd 33 2019/09/30 10:20:09 Notes To Consolidated Financial Statements

(4) Reconciliations between retirement benefit obligations and plan assets and liability for retirement benefits, including for plans to which the simplified methods have been applied March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Funded retirement benefit obligations ¥19,037 ¥19,048 $171,520 Pension assets (17,181) (16,332) (154,798) 1,856 2,716 16,722 Unfunded retirement benefit obligations 8,203 8,267 73,908 Total net liability (asset) for retirement benefits at end of year ¥10,059 ¥10,983 $ 90,630 Liability for retirement benefits *1 ¥10,059 ¥10,983 $ 90,630 Total net liability (asset) for retirement benefits at end of year ¥10,059 ¥10,983 $ 90,630 *1 Directors’ retirement benefits of ¥178 million ($1,604 thousand) as of March 31, 2019 and ¥176 million as of March 31, 2018 are not included in the above.

(5) Severance and retirement benefit expenses for employees Year ended March 31, Year ended March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Service cost-benefits earned during the year *1 ¥ 962 ¥ 987 $ 8,667 Interest cost on projected benefit obligation 161 160 1,451 Expected return on plan assets (303) (279) (2,730) Amortization of actuarial gains (67) (110) (604) Amortization of prior service costs (3) (3) (27) Severance and retirement benefit expenses based on simplified methods 433 460 3,901 Severance and retirement benefit expenses for employees ¥1,183 ¥1,215 $10,658 *1 Contributions from employees are not included.

(6) Remeasurements of defined benefit plans, before tax March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Prior service costs ¥ (3) ¥ (3) $ (27) Actuarial gains (losss) (135) 321 (1,216) Total ¥(138) ¥318 $(1,243)

(7) Remeasurements of defined benefit plans March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Prior service costs that are yet to be recognized ¥(21) ¥ (24) $(189) Actuarial losses that are yet to be recognized (22) (157) (198) Total ¥(43) ¥(181) $(387)

011_0808001371908.indd 34 2019/09/30 10:20:10 (8) Pension assets (a) Pension assets comprise: March 31, 2019 2018 General account 34% 36% Equity securities 23% 30% Bonds 36% 32% Other 7% 2% Total 100% 100%

(b) Long-term expected rate of return Current and target asset allocations and current and expected returns on various categories of plan assets have been considered in determining the long-term expected rate of return.

(9) Actuarial assumptions The principal actuarial assumptions at March 31, 2019 and 2018 were as follows: Year ended March 31, 2019 2018 Discount rate 0.3%-0.9% 0.3%-0.9% Long-term expected rate of return 2.0% 2.0%

2. Defined contribution plan The required contribution amount of the Company and its consolidated subsidiaries to the defined contribution plan at March 31, 2019 and 2018 were ¥257 million ($2,316 thousand) and ¥248 million, respectively.

NOTE 13 – INDEMNITY INCOME OF EXITING FACILITIES FOR LEASE Indemnity income of exiting facilities for lease represented mainly income from cancellation of leased commercial facilities in Yokohama and Kobe and leased real estate facilities in Nagoya for the year ended March 31, 2017.

NOTE 14 – IMPAIRMENT LOSS The Company recognized impairment loss in the following asset group for the year ended March 31, 2019, 2018 and 2017 :

Year ended March 31, 2019 Use Location Type Millions of yen Thousands of U.S. dollars

Warehouse facilities Yokkaichi City, Mie Building and others ¥69 $622

Year ended March 31, 2018 Use Location Type Millions of yen

Warehouse facilities Kobe City, Hyogo Building and others ¥99

Fukuoka City, Warehouse facilities Building and others ¥11 Fukuoka Building, software and Warehouse facilities The Netherlands ¥37 others

011_0808001371908.indd 35 2019/09/30 10:20:10 Notes To Consolidated Financial Statements

Year ended March 31, 2017 Use Location Type Millions of yen Rent of real estate Osaka City, Building ¥194 facilities Osaka

In calculating impairment loss, assets are grouped by the smallest level that generates a cash flow independent from other assets or asset groups. The above asset group has decided to rebuild, book values for assets related to said asset groups have been reduced to the recoverable amounts, and the reduction amount of ¥69 million ($622 thousand) (¥64 million ($568 thousand) in buildings, and ¥5 million ($54 thousand) in others) has been recorded as impairment loss in extraordinary losses. The recoverable amounts are measured based on value in use, and are considered to be zero since future cash flow cannot be expected.

NOTE 15 – CONTINGENT LIABILITIES At March 31, 2019 and 2018, the balances of guarantee for loans amounted to ¥987 million ($8,893 thousand) and ¥1,101 million, respectively.

NOTE 16 – LEASE TRANSACTIONS 1. OPERATING LEASES (LESSEE LEASES) Future minimum lease payments under non-cancelable operating lease as of March 31, 2019 and 2018 were as follows: March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Due within one year ¥ 4,518 ¥ 2,589 $ 40,706 Due after one year 14,120 11,235 127,219 ¥18,638 ¥13,824 $167,925

(LESSOR LEASES) Future minimum lease receipts under non-cancelable operating lease as of March,31 2019 and 2018 were as follows: March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Due within one year ¥12,618 ¥12,192 $113,686 Due after one year 12,708 10,239 114,497 ¥25,326 ¥22,431 $228,183

011_0808001371908.indd 36 2019/09/30 10:20:10 2. FINANCE LEASES INITIATED BEFORE APRIL 1, 2008 (LESSOR LEASES) Finance lease transactions without the transfer of ownership (1) Purchase price, accumulated depreciation and book value March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Buildings and structures and other Purchase price ¥1,372 ¥1,372 $12,361 Accumulated depreciation 747 705 6,730 Book value ¥ 625 ¥ 667 $ 5,631

(2) Lease commitments March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Due within one year ¥ 36 ¥ 34 $ 324 Due after one year 1,051 1,088 9,470 ¥1,087 ¥1,122 $9,794

(3) Rental income, depreciation and interest income equivalents Year ended March 31, Year ended March 31, 2019 2018 2017 2019 (Millions of yen) (Thousands of U.S. dollars) Rental income ¥111 ¥111 ¥274 $1,000 Depreciation ¥ 42 ¥ 43 ¥110 $ 378 Interest income equivalents ¥ 77 ¥ 79 ¥ 94 $ 694

(4) Calculation of interest income equivalents The excess of total rental income and estimated residual value over acquisition costs is regarded as an amount representing interest income equivalents and is allocated to each period using the interest method.

011_0808001371908.indd 37 2019/09/30 10:20:10 Notes To Consolidated Financial Statements

NOTE 17 – DERIVATIVE TRANSACTIONS 1. Derivative transactions to which hedge accounting is not applied None

2. Derivative transactions to which hedge accounting is applied

Interest rate-related derivatives Hedge accounting method : Interest income or expense on the hedged items reflects net amount to be paid or received under the derivatives Type of transaction : Interest rate swap, receive floating, pay fixed Major hedged itemes : Long-term debt March 31, March 31, 2019 2018 2019 (Millions of yen) (Thousands of U.S. dollars) Notional amount ¥100 ¥100 $901 Portion due after one year included herein – ¥100 – Fair value (Note) – – –

Note: With respect to interest rate swap contracts which meet certain conditions, fair values of the interest rate swap contracts are included in the fair values of the relevant long-term loans payable, since they are used for recording long-term loans payable as hedged items.

NOTE 18 – CHANGES IN NET ASSETS The types and numbers of shares outstanding and treasury shares for the years ended March 31, 2019, 2018 and 2017 were as follows: Shares outstanding Treasury shares Type of shares Common stock Common stock Number of shares: (Shares) Year ended March 31, 2019 Balance at beginning of year 87,960,739 367,583 Increase during the year – 1,170 Decrease during the year – (53) Balance at end of year 87,960,739 368,700 Year ended March 31, 2018 Balance at beginning of year 175,921,478 728,344 Increase during the year – 5,208 Decrease during the year (87,960,739) (365,969) Balance at end of year 87,960,739 367,583 Year ended March 31, 2017 Balance at beginning of year 175,921,478 712,459 Increase during the year – 16,643 Decrease during the year – (758) Balance at end of year 175,921,478 728,344

Increase in the number of shares was due to purchases of less-than-one-unit shares. Decrease in the number of shares was due to sales of less-than-one-unit shares.

011_0808001371908.indd 38 2019/09/30 10:20:10 Matters related to dividends were as follows:

(a) Dividends payment Dividends payment during the year ended March 31, 2019 was as follows: Approval at Annual general meeting of shareholders Meeting of the Board of directors Approval date June 28, 2018 October 31, 2018 Type of shares Common stock Common stock Total dividends ¥1,227 million ($11,055 thousand) ¥1,314 million ($11,839 thousand) Dividends per share ¥14.0 ($0.13) ¥15.0 ($0.14) Record date March 31, 2018 September 30, 2018 Effective date June 29, 2018 December 3, 2018 Dividends payment during the year ended March 31, 2018 was as follows: Approval at Annual general meeting of shareholders Meeting of the Board of directors Approval date June 29, 2017 October 31, 2017 Type of shares Common stock Common stock Total dividends ¥1,402 million ¥1,227 million Dividends per share ¥8.0 ¥7.0 Record date March 31, 2017 September 30, 2017 Effective date June 30, 2017 December 1, 2017 Dividends payment during the year ended March 31, 2017 was as follows: Approval at Annual general meeting of shareholders Meeting of the Board of directors Approval date June 29, 2016 October 31, 2016 Type of shares Common stock Common stock Total dividends ¥1,052 million ¥1,051 million Dividends per share ¥6.0 ¥6.0 Record date March 31, 2016 September 30, 2016 Effective date June 30, 2016 December 1, 2016

(b) Dividends payment whose record date is attributable to the accounting period ended March 31, 2019 but which becomes effective after said accounting period is as follows: Approval at Annual general meetings of shareholders Approval date June 27, 2019 Type of shares Common stock Source of dividends Retained earnings Total dividends ¥2,629 million ($23,687 thousand) Dividends per share ¥30.0 ($0.27) Record date March 31, 2019 Effective date June 28, 2019

Note: 1. The Cash dividends per share for the year ended March 31, 2017 includes $2.0 commemorative dividend in celebration of the 130th anniversary of the Company’s establishment. 2. Dividend per share whose record date is March 31, 2018 takes into consideration the reverse stock split at a ratio of one share for every two shares of common stock, with an effective date of October 1, 2017.

011_0808001371908.indd 39 2019/09/30 10:20:10 Notes To Consolidated Financial Statements

NOTE 19 – SEGMENT INFORMATION For the year ended March 31, 2019, 2018 and 2017 1. General information about reportable segments The Company’s reportable segments are components for which separate financial information is available, and evaluated regularly by the board of directors in determining allocation of management resources and in assessing performance. The Company decided its reportable segments by considering similarities between the business activities of the Company and its consolidated subsidiaries from the aspects of business type, business nature, method of providing service, market of service and others. The Company has two reportable segments - “logistics” and “real estate.” Each segment operates the following businesses. Logistics: - Warehousing & distribution, land transportation, harbor transportation and international transportation. Real estate: - Rental of office buildings and sale of real estate

2. Basis of measurement about reported segment revenue, segment income, segment assets and other material items The accounting methods of business segments reported are consistent with those stated in NOTE 1 (SUMMARY OF ACCOUNTING POLICIES). Segment income is based on the figures of operating income. Amounts for inter-segment transactions or transfers are calculated based on market prices. As the Company applied “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ Statement No. 28, February 16, 2018), etc., from the beginning of the fiscal year under review, segment assets of the Group in the fiscal year ended March 31,2018 are amounts after applying the accounting standard etc., retroactively.

3. Information about reported segment revenue, segment income, segment assets and other material items Reportable segment information for the year ended March 31, 2019 is as follows: March 31, 2019 Logistics Real estate Total Adjustment *1 Consolidated *2 (Millions of yen) Revenues: Non-affiliated customer ¥189,695 ¥37,491 ¥227,186 ¥– ¥227,186 Intersegment 740 1,188 1,928 (1,928) – 190,435 38,679 229,114 (1,928) 227,186 Segment income 7,609 10,783 18,392 (5,731) 12,661 Segment assets ¥229,908 ¥113,854 ¥343,762 ¥138,813 ¥482,575 Depreciation and amortization ¥6,955 ¥5,778 ¥12,733 ¥263 ¥12,996 Amortization of goodwill ¥294 ¥– ¥294 ¥– ¥294 Investments in affiliates accounted for by the equity method ¥ 19,559 ¥– ¥19,559 ¥– ¥19,559 Increase in property and equipment and intangible assets ¥ 12,195 ¥5,433 ¥17,628 ¥ 409 ¥18,037

011_0808001371908.indd 40 2019/09/30 10:20:10 March 31, 2019 Logistics Real estate Total Adjustment *1 Consolidated *2 (Thousands of U.S. dollars) Revenues: Non-affiliated customer $1,709,118 $337,787 $2,046,905 $– $2,046,905 Intersegment 6,667 10,704 17,371 (17,371) – 1,715,785 348,491 2,064,276 (17,371) 2,046,905 Segment income 68,555 97,153 165,708 (51,635) 114,073 Segment assets $2,071,430 $1,025,804 $3,097,234 $1,250,680 $4,347,914 Depreciation and amortization $ 62,663 $ 52,059 $ 114,722 $ 2,370 $117,092 Amortization of goodwill $2,649 $– $2,649 $– $2,649 Investments in affiliates accounted for by the equity 176,223 $ – $ 176,223 $ – $ 176,223 method $ Increase in property and equipment and intangible assets $ 109,875 $ 48,950 $ 158,825 $ 3,685 $ 162,510

*1: The adjustments were as follows; (1) The adjustment of negative ¥5,731 million ($51,635 thousand) in segment income included inter-segment eliminations of ¥22 million ($198 thousand) and corporate expenses of negative ¥5,753 million ($51,833 thousand) not distributed to any reportable segments. Corporate expenses were mainly general and administrative expenses not attributable to any reportable segments. (2) The adjustment of ¥138,813 million ($1,250,680 thousand) in segment assets was for corporate assets not distributed to any reportable segments. Corporate assets mainly consisted of surplus funds (cash and marketable securities), long-term investments (investments in securities) and assets which belong to the administrative department of the Company.

*2: Segment income was reconciled to operating income as described in the consolidated statements of income.

Reportable segment information for the year ended March 31, 2018 is as follows: March 31, 2018 Logistics Real estate Total Adjustment *1 Consolidated *2 (Millions of yen) Revenues: Non-affiliated customer ¥180,559 ¥34,849 ¥215,408 ¥– ¥215,408 Intersegment 718 1,177 1,895 (1,895) – 181,277 36,026 217,303 (1,895) 215,408 Segment income 7,663 10,181 17,844 (5,423) 12,421 Segment assets ¥209,915 ¥111,359 ¥321,274 ¥140,757 ¥462,031 Depreciation and amortization ¥6,365 ¥6,143 ¥12,508 ¥239 ¥12,747 Amortization of goodwill ¥299 ¥– ¥299 ¥– ¥299 Investments in affiliates accounted for by the equity 6,365 ¥– ¥6,365 ¥– ¥6,365 method ¥ Increase in property and equipment and intangible assets ¥17,130 ¥4,453 ¥21,583 ¥– ¥21,583

*1: The adjustments were as follows: (1) The adjustment of negative ¥5,423 million in segment income included inter-segment eliminations of ¥21 million and corporate expenses of negative ¥5,444 million not distributed to any reportable segments. Corporate expenses were mainly general and administrative expenses not attributable to any reportable segments. (2) The adjustment of ¥141,862 million in segment assets was for corporate assets not distributed to any reportable segments. Corporate assets mainly consisted of surplus funds (cash and marketable securities), long-term investments (investments in securities) and assets which belong to the administrative department of the Company.

011_0808001371908.indd 41 2019/09/30 10:20:10 Notes To Consolidated Financial Statements

*2: Segment income was reconciled to operating income as described in the consolidated statements of income.

Reportable segment information for the year ended March 31, 2017 is as follows: March 31, 2017 Logistics Real estate Total Adjustment *1 Consolidated *2 (Millions of yen) Revenues: Non-affiliated customer ¥167,198 ¥41,521 ¥208,719 ¥ – ¥208,719 Intersegment 710 1,373 2,083 (2,083) – 167,908 42,894 210,802 (2,083) 208,719 Segment income 6,662 11,720 18,382 (5,634) 12,748 Depreciation and amortization ¥6,367 ¥6,347 ¥12,714 ¥211 ¥12,925 Amortization of goodwill ¥297 ¥ – ¥297 ¥ – ¥297 Investments in affiliates accounted for by the equity method ¥7,800 ¥ – ¥7,800 ¥ – ¥7,800 Increase in property and equipment and intangible assets ¥11,907 ¥15,034 ¥26,941 ¥395 ¥27,336

*1: The adjustments were as follows: (1) The adjustment of negative ¥5,634 million in segment income included inter-segment eliminations of ¥17 million and corporate expenses of negative ¥5,651 million not distributed to any reportable segments. Corporate expenses were mainly general and administrative expenses not attributable to any reportable segments. (2) The adjustment of ¥121,541 million in segment assets was for corporate assets not distributed to any reportable segments. Corporate assets mainly consisted of surplus funds (cash and marketable securities), long-term investments (investments in securities) and assets which belong to the administrative department of the Company. (3) The adjustment of ¥395 million for increase in property and equipment and intangible assets mainly consisted of capital investment by the administrative department of the Company.

*2: Segment income was reconciled to operating income as described in the consolidated statements of income.

011_0808001371908.indd 42 2019/09/30 10:20:10 4. Related information (1) Information about products and services Information is omitted, as the classification is the same as that for reportable segments.

(2) Information about geographic areas The information about geographic areas as of and for the years ended March 31, 2019, 2018 and 2017 is as follows:

(a) Revenues Year ended March 31, Year ended March 31, 2019 2018 2017 2019 (Millions of yen) (Thousands of U.S. dollars) Revenues: Japan ¥202,093 ¥191,567 ¥187,647 $1,820,822 Other 25,093 23,841 21,072 226,083 ¥227,186 ¥215,408 ¥208,719 $2,046,905

Note: Revenues are classified by country and region based on customer location.

(b) Property and equipment Information is omitted, as the balance of property and equipment located in Japan amounts to more than 90% of the total balance of property and equipment.

(3) Information about major customers Information is omitted, as there is no major non-affiliated customer who accounts for 10% or more of the revenues on the consolidated statements of income.

5. Impairment loss by reportable segment March 31, 2019 Logistics Real estate Total Adjustment Consolidated (Millions of yen) Impairment loss ¥69 ¥– ¥69 ¥– ¥69

March 31, 2018 Logistics Real estate Total Adjustment Consolidated (Millions of yen) Impairment loss ¥147 ¥– ¥147 ¥– ¥147

March 31, 2017 Logistics Real estate Total Adjustment Consolidated (Millions of yen) Impairment loss ¥– ¥194 ¥194 ¥– ¥194

March 31, 2019 Logistics Real estate Total Adjustment Consolidated (Thousands of U.S. dollars) Impairment loss $622 $– $622 $– $622

011_0808001371908.indd 43 2019/09/30 10:20:10 Notes To Consolidated Financial Statements

6. Amortization and unamortized balance of goodwill by reportable segment

March 31, 2019 Logistics Real estate Total Adjustment Consolidated (Millions of yen) Amortization of goodwill ¥294 ¥– ¥294 ¥– ¥294 Unamortized balance ¥630 ¥– ¥630 ¥– ¥630

March 31, 2018 Logistics Real estate Total Adjustment Consolidated (Millions of yen) Amortization of goodwill ¥299 ¥– ¥299 ¥– ¥299 Unamortized balance ¥950 ¥– ¥950 ¥– ¥950

March 31, 2017 Logistics Real estate Total Adjustment Consolidated (Millions of yen) Amortization of goodwill ¥297 ¥– ¥297 ¥– ¥297 Unamortized balance ¥1,237 ¥– ¥1,237 ¥– ¥1,237

March 31, 2019 Logistics Real estate Total Adjustment Consolidated (Thousands of U.S. dollars) Amortization of goodwill $2,649 $– $2,649 $– $2,649 Unamortized balance $5,676 $– $5,676 $– $5,676

NOTE 20 – SIGNIFICANT SUBSEQUENT EVENTS At the meeting of the Board of Directors held on April 26, 2019, the Company resolved matters relating to the purchase of treasury shares pursuant to the provisions of Article 156 of the Companies Act, which is applied by replacing certain terms pursuant to the provisions of Article 165, Paragraph 3 of the Companies Act.

1. Reasons for purchasing treasury shares In accordance with the policy of returning profits to shareholders in the New Medium-term Management Plan FY2019–2021 announced on March 22, 2019, the Company will flexibly purchase treasury shares.

2. Details of the matters concerning purchase (1) Type of shares to be purchased Common stock of the Company (2) Total number of shares to be purchased 2,000,000 shares (maximum) (Ratio to the total number of issued shares (excluding treasury shares): 2.3% (3) Total purchase price of shares 5 billion yen (maximum) (4) Purchase period May 7, 2019 - September 30, 2019 (5) Purchase method Market purchase on the Tokyo Stock Exchange

011_0808001371908.indd 44 2019/09/30 10:20:10 Company Profile (As of March 31, 2019)

005_0808001371908.indd 2 2019/09/20 17:41:26 ANNUAL REPORT 2019 Year ended March 31, 2019

Nihonbashi Dia Building 19-1 Nihonbashi, 1-chome Chuo-ku, Tokyo 103-8630, Japan http://www.mitsubishi-logistics.co.jp

005_0808001371908.indd 1 2019/09/20 17:41:25