President s Message 03/ / / / / / / / / Q 2Q 3Q FY

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1 Highlights Net Sales 600,000 () Operating Income 10,000 () Ordinary Income 15,000 () 8, ,000 6,000 10, ,000 4,000 5,000 2, / / / /2016 1Q 2Q 3Q FY 03/ / / / /2016 1Q 2Q 3Q FY 03/ / / / /2016 1Q 2Q 3Q FY 03/ / / / / /2017 FY 339, , , , ,141 3Q 248, , , , ,300 2Q 161, , , , ,584 1Q 77,658 99, , , ,650 03/ / / / /2017 FY 1,659 4,523 9,303 9,057 4,224 3Q 2,210 3,478 6,295 7,514 3,741 2Q 1,235 1,538 3,630 4,598 2,896 1Q 447 (140) 1,295 1,863 1,202 03/ / / / /2017 FY 2,744 4,942 10,007 10,003 5,970 3Q 3,078 3,740 6,896 8,806 5,175 2Q 2,040 1,897 4,038 5,518 3,855 1Q 1, ,409 2,033 1,765 Net Income Attributable to Owners of the Parent 4,000 () Net Income per Share 100 (Yen) 3, , , , , ,000 03/ / / /2016 1Q 2Q 3Q FY 03/ / / / /2016 1Q 2Q 3Q FY 03/ / / / / /2017 FY 1,119 1,315 2,775 2,699 (2,511) 3Q 1, ,884 3,828 (8) 2Q 1, ,371 (189) 1Q 1,267 (592) (518) / / / / /2017 FY (59.54) 3Q (0.18) 2Q (4.49) 1Q (14.03) (12.29) Annual Report 39

2 Operating Income to Net Sales (%) 10 Ordinary Income to Net Sales (%) 10 Net Income to Net Sales (%) / / / / / / / / / / / / / / / / / / / /2017 FY / / / / /2017 FY / / / / /2017 FY (0.6) Net Income to Total Assets (%) Return on Equity (%) Shareholders Equity Ratio (%) / / / / / / / / / /2017 FY (1.2) / / / / / / / / / /2017 FY (3.5) 0 03/ / / /2016 1Q 2Q 3Q FY 03/ / / / / /2017 FY Q Q Q Annual Report 40

3 Six-Year Summary Results of Operations (Note 1) Net sales 309, , , , , ,141 $3,914,258 Cost of sales 257, , , , , ,510 3,249,040 Gross profit 51,708 52,315 64,928 76,760 81,149 74, ,218 Selling, general and administrative expenses 45,436 50,656 60,405 67,457 72,092 70, ,565 Operating income 6,272 1,659 4,523 9,303 9,057 4,224 37,653 Income before income taxes 6,673 4,074 5,157 7,687 9,174 4,005 35,700 Net income (loss) attributable to owners of the parent 2,526 1,119 1,315 2,775 2,699 (2,511) (22,378) Sales by Geographical Segment (Note 1) Japan 83,761 74,853 76,212 92,196 83,300 82,816 $738,178 Americas 70,056 77,269 91, , ,666 95, ,454 Europe 76,822 76,157 92, , ,503 93, ,333 East Asia 39,884 54,988 75,074 77,094 85,414 91, ,936 South Asia and Oceania 42,440 60,483 78,476 94,573 93,537 90, ,023 Reconciliation (3,959) (4,701) (7,720) (14,512) (16,604) (15,669) (139,666) Consolidated total 309, , , , , ,141 3,914,258 Consolidated to non-consolidated ratio (times) Position (Note 1) Current assets 93, , , , , ,954 $1,202,901 Current liabilities 52,580 62,025 68,794 85,030 69,682 73, ,956 Equity (Note 2) 57,708 63,263 68,290 76,968 73,032 68, ,325 Total equity 79,558 92, , , , , ,987 Total assets 151, , , , , ,252 1,829,500 Cash Flows (Note 1) Net cash provided by (used in) operating activities 2,719 8,910 6,280 9,345 13,751 (709) $(6,323) Net cash provided by (used in) investing activities (13,901) (9,694) (6,896) (8,504) (6,166) (5,845) (52,103) Net cash provided by (used in) financing activities 2,149 (1,049) 2, (4,304) 1,255 11, Annual Report 41

4 Per Share Yen (Note 1) Basic net income (loss) (59.54) $(0.531) Cash dividends (full year) Net assets 1, , , , , , Key Ratios % Gross profit to net sales Operating income to net sales Cost of sales to net sales Selling, general and administrative expenses to net sales Net income to net sales (0.6) Return on equity (ROE) (3.5) Net income to total assets (1.2) Asset turnover (times) Shareholders equity ratio Other Number of issued and outstanding shares 42,220,800 42,220,800 42,220,800 42,220,800 42,220,800 42,220,800 Notes: 1. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of to $1, the approximate rate of exchange at March 31, Equity ( 68,473 million in 2017) = total equity - non-controlling interests Annual Report 42

5 Consolidated Statements Yusen Logistics Co., Ltd. and Consolidated Subsidiaries Consolidated Balance Sheet March 31, 2017 (Note 1) ASSETS CURRENT ASSETS: Cash and cash equivalents (Note 10) 27,073 32,911 $ 241,314 Time deposits (Note 10) 3,333 6,065 29,705 Trade notes and accounts receivable (Note 10) 88,705 78, ,665 Deferred tax assets current (Note 8) 736 1,158 6,561 Other current assets 16,006 10, ,665 Allowance for doubtful accounts (899) (1,045) (8,009) Total current assets 134, ,155 1,202,901 PROPERTY, PLANT AND EQUIPMENT: Land (Note 3) 15,508 16, ,234 Buildings and structures (Note 3) 48,699 49, ,078 Furniture and fixtures 16,102 16, ,524 Machinery, equipment and vehicles 22,979 21, ,817 Construction in progress 1, ,292 Total 105, , ,945 Accumulated depreciation (53,252) (51,210) (474,657) Total property, plant and equipment 51,976 53, ,288 INVESTMENTS AND OTHER ASSETS: Investments in securities (Notes 4 and 10) 1,155 1,019 10,291 Investments in unconsolidated subsidiaries and affiliated companies (Note 10) 2,288 1,832 20,392 Net defined benefit asset (Note 6) 1, ,948 Goodwill 2,302 2,907 20,516 Deposits 3,553 3,422 31,673 Deferred tax assets non-current (Note 8) 1,991 3,299 17,748 Other assets (Note 3) 5,805 5,050 51,743 Total investments and other assets 18,322 18, ,311 TOTAL 205, ,409 $ 1,829,500 Yusen Logistics Co., Ltd. and Consolidated Subsidiaries Consolidated Balance Sheet March 31, 2017 (Note 1) LIABILITIES AND EQUITY CURRENT LIABILITIES: Trade notes and accounts payable (Note 10) 47,227 41,142 $ 420,954 Short-term loans payable (Notes 5 and 10) 3,457 1,605 30,814 Current portion of long-term debt (Notes 5, 10 and 17) 1,900 5,168 16,937 Accrued income taxes (Note 10) 1,322 1,890 11,787 Accrued bonuses to employees 4,025 4,205 35,873 Deferred tax liabilities current (Note 8) Other current liabilities (Note 17) 15,772 15, ,586 Total current liabilities 73,704 69, ,956 LONG-TERM LIABILITIES: Long-term debt (Notes 5 and 10) 17,353 13, ,675 Accrued pension and severance costs for directors and audit & supervisory board members ,238 Net defined benefit liability (Note 6) 5,626 5,195 50,146 Deferred tax liabilities non-current (Note 8) ,034 Other long-term liabilities 1,287 1,455 11,464 Total long-term liabilities 25,530 21, ,557 EQUITY (Notes 7 and 16): Common stock, no par value authorized; 160,000,000 shares in 2017 and 2016, issued; 42,220,800 shares in 2017 and ,301 4,301 38,337 Capital surplus 4,504 4,490 40,144 Retained earnings 59,028 62, ,143 Treasury stock at cost; 51,778 shares in 2017 and 51,726 shares in 2016 (70) (70) (625) Accumulated other comprehensive income Unrealized gains or losses on available-for-sale securities ,126 Deferred gains or losses on hedges (13) (11) (118) Foreign currency translation adjustments 1,059 2,711 9,445 Pension liability adjustment (687) (904) (6,127) Total 68,473 73, ,325 Non-controlling interests 37,545 36, ,662 Total equity 106, , ,987 TOTAL 205, ,409 $ 1,829,500 See notes to consolidated financial statements Annual Report 43

6 Yusen Logistics Co., Ltd. and Consolidated Subsidiaries Consolidated Statement of Income Year Ended March 31, 2017 Yusen Logistics Co., Ltd. and Consolidated Subsidiaries Consolidated Statement of Comprehensive Income Year Ended March 31, 2017 (Note 1) NET SALES 439, ,816 $ 3,914,258 COST OF SALES 364, ,667 3,249,040 Gross profit 74,631 81, ,218 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Note 13) 70,407 72, ,565 Operating income 4,224 9,057 37,653 OTHER INCOME (EXPENSES): Interest and dividend income ,747 Interest expense (326) (431) (2,903) Foreign currency exchange gain net 1, ,439 Share of profit of entities accounted for using equity method Gain on negative goodwill ,171 Compensation income 433 3,859 Impairment loss (Note 3) (1,439) (1,003) (12,829) Special retirement expenses (936) (8,340) Loss on step acquisitions (153) (1,368) Other net ,301 (Note 1) NET INCOME (LOSS) (522) 5,769 $ (4,653) OTHER COMPREHENSIVE INCOME (Note 14): Unrealized gains or losses on available-for-sale securities 139 (189) 1,240 Deferred gains or losses on hedges (4) (25) (35) Foreign currency translation adjustments (2,625) (9,158) (23,399) Pension liability adjustment ,641 Share of other comprehensive income of entities accounted for using equity method (15) (79) (138) Total other comprehensive income (2,321) (9,377) (20,691) COMPREHENSIVE INCOME (2,843) (3,608) $(25,344) TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the parent (3,801) (2,990) $ (33,885) Non-controlling interests 958 (618) 8,541 See notes to consolidated financial statements. Other income (expenses) net (219) 117 (1,953) INCOME BEFORE INCOME TAXES 4,005 9,174 35,700 INCOME TAXES (Note 8): Current 2,600 3,217 23,174 Deferred 1, ,179 Total income taxes 4,527 3,405 40,353 NET INCOME (LOSS) (522) 5,769 (4,653) NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS 1,989 3,070 17,725 NET INCOME (LOSS) ATTRIBUTABLE TO OWNERS OF THE PARENT (2,511) 2,699 $ (22,378) Yen PER SHARE: Basic net income (loss) per share (Note 16) (59.54 ) $ (0.531) Cash dividends See notes to consolidated financial statements Annual Report 44

7 Yusen Logistics Co., Ltd. and Consolidated Subsidiaries Consolidated Statement of Changes in Equity Year Ended March 31, 2017 Thousands Outstanding Number of Shares of Common Stock Common Stock Capital Surplus Retained Earnings Treasury Stock Unrealized Gains or Losses on Available-for-sale Securities Accumulated Other Comprehensive Income Deferred Foreign Gains or Currency Losses on Translation Hedges Adjustment Pension Liability Adjustments Total Noncontrolling Interests Total Equity BALANCE, MARCH 31, ,169 4,301 4,733 60,340 (70) ,968 (705) 76,968 36, ,904 Net income attributable to owners of the parent for the year ended March 31, ,699 2,699 2,699 Cash dividends ( 20.0 per share) (844) (844) (844) Purchase of treasury stock (0) (1) (1) (1) Disposal of treasury stock Change of scope of consolidation (2) Adjustment due to change in the fiscal period of consolidated subsidiaries Change in ownership interest of parent due to transactions with non-controlling interests (244) (244) (244) Net changes of items other than shareholders' equity (188) (12) (5,257) (199) (5,656) (326) (5,982) BALANCE, MARCH 31, ,169 4,301 4,490 62,303 (70) 212 (11) 2,711 (904) 73,032 36, ,642 Net loss attributable to owners of the parent for the year ended March 31, 2017 (2,511) (2,511) (2,511) Cash dividends ( 18.0 per share) (801) (801) (801) Purchase of treasury stock (0) (0) (0) (0) Change of scope of consolidation Change of scope of equity method Adjustment due to change in the fiscal period of consolidated subsidiaries (80) (80) (80) Adjustment due to change in the fiscal period of entities accounted for using equity method (5) (5) (5) Change in ownership interest of parent due to transactions with non-controlling interests Net changes of items other than shareholders' equity 139 (2) (1,652) 217 (1,298) 935 (363) BALANCE, MARCH 31, ,169 4,301 4,504 59,028 (70) 351 (13) 1,059 (687) 68,473 37, , Annual Report 45

8 Yusen Logistics Co., Ltd. and Consolidated Subsidiaries Consolidated Statement of Changes in Equity Year Ended March 31, 2017 Common Stock Capital Surplus Retained Earnings Treasury Stock (Note 1) Accumulated Other Comprehensive Income Deferred Foreign Gains or Currency Losses on Translation Hedges Adjustment Unrealized Gains or Losses on Available-for-sale Securities Pension Liability Adjustments Total Noncontrolling Interests Total Equity BALANCE, MARCH 31, 2016 $ 38,337 $ 40,020 $ 555,338 $ (624) $ 1,889 $ (100) $ 24,163 $ (8,062) $ 650,961 $ 326,324 $977,285 Net loss attributable to owners of the parent for the year ended March 31, 2017 (22,378) (22,378) (22,378) Cash dividends ($0.160 per share) (7,142) (7,142) (7,142) Purchase of treasury stock (1) (1) (1) Change of scope of consolidation Change of scope of equity method Adjustment due to change in the fiscal period of consolidated subsidiaries (715) (715) (715) Adjustment due to change in the fiscal period of entities accounted for using equity method (45) (45) (45) Change in ownership interest of parent due to transactions with non-controlling interests Net changes of items other than shareholders' equity 1,237 (18) (14,718) 1,935 (11,564) 8,338 (3,226) BALANCE, MARCH 31, 2017 $ 38,337 $ 40,144 $ 526,143 $ (625) $ 3,126 $ (118) $ 9,445 $ (6,127) $ 610,325 $ 334,662 $ 944,987 See notes to consolidated financial statements Annual Report 46

9 Yusen Logistics Co., Ltd. and Consolidated Subsidiaries Consolidated Statement of Cash Flows Year Ended March 31, 2017 Yusen Logistics Co., Ltd. and Consolidated Subsidiaries Consolidated Statement of Cash Flows Year Ended March 31, 2017 (Note 1) OPERATING ACTIVITIES: Income before income taxes 4,005 9,174 $ 35,700 Adjustments for: Depreciation and amortization 5,430 6,254 48,403 Loss (gain) on sale of property, plant and equipment, net (84) (249) (749) Impairment loss 1,439 1,003 12,829 Compensation income (433) (3,859) Special retirement expenses 936 8,340 Loss (gain) on step acquisitions 153 1,368 Amortization of goodwill ,208 Share of loss (profit) of entities accounted for using equity method (109) (38) (970) Increase (decrease) in allowance for doubtful accounts (58) 51 (519) Increase (decrease) in net defined benefit liability 363 (723) 3,233 Interest and dividend income (420) (444) (3,747) Interest expense ,903 Loss (gain) on foreign currency exchange, net (140) 211 (1,251) Loss (gain) on sale of investments in securities (0) (11) (0) Decrease (increase) in trade notes and accounts receivable (11,186) 11,160 (99,708) Increase (decrease) in trade notes and accounts payable 7,266 (4,904) 64,762 Other net (5,598) (2,819) (49,888) Total 2,138 19,422 19,055 Interest and dividend received ,288 Interest paid (314) (434) (2,795) Paid expenses related to antitrust law (1,753) Income taxes paid (3,014) (3,952) (26,871) Net cash provided by (used in) operating activities (709) 13,751 (6,323) INVESTING ACTIVITIES: Payments into time deposits (7,400) (9,022) (65,963) Proceeds from withdrawal of time deposits 10,147 7,377 90,442 Lending of loans receivable (43) (36) (384) Collection of loans receivable Purchase of property, plant and equipment (6,808) (5,434) (60,682) Proceeds from sale of property, plant and equipment ,374 Purchase of investments in securities (691) (93) (6,156) Proceeds from sale of investments in securities Purchase of investments in subsidiaries resulting in change in scope of consolidation (555) (4,950) Proceeds from purchase of investments in subsidiaries resulting in change in scope of consolidation Payments for transfer of business (188) (267) (1,674) Other net (530) (267) (4,725) (Note 1) FORWARD (6,554) 7,585 $ (58,426) FINANCING ACTIVITIES: Short-term loans payable, net 1,721 (1,347) 15,343 Proceeds from long-term loans payable 6,137 3,365 54,699 Repayment of long-term debt (5,626) (4,666) (50,150) Repayment of obligations under finance lease (127) (170) (1,135) Proceeds from share issuance to non-controlling shareholders 254 2,263 Cash dividends paid (801) (844) (7,140) Cash dividends paid to non-controlling interests (299) (425) (2,668) Payments from changes in ownership interests in subsidiaries that do not result in change in scope of consolidation (3) (222) (25) Other net (1) 5 (1) Net cash provided by (used in) financing activities 1,255 (4,304) 11,186 FOREIGN CURRENCY TRANSLATION ADJUSTMENTS ON CASH AND CASH EQUIVALENTS (590) (2,709) (5,257) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (5,889) 572 (52,497) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 32,911 32, ,353 CASH AND CASH EQUIVALENTS OF NEWLY CONSOLIDATED SUBSIDIARIES, BEGINNING OF YEAR INCREASE (DECREASE) IN BEGINNING BALANCE OF CASH AND CASH EQUIVALENTS DUE TO CHANGES IN FISCAL PERIODS OF CONSOLIDATED SUBSIDIARIES (18) 33 (160) CASH AND CASH EQUIVALENTS, END OF YEAR 27,073 32,911 $ 241,314 See notes to consolidated financial statements. Net cash provided by (used in) investing activities (5,845) (6,166) (52,103) FORWARD (6,554) 7,585 $ (58,426) 2017 Annual Report 47

10 Yusen Logistics Co., Ltd. and Consolidated Subsidiaries Notes to Consolidated Statements Year Ended March 31, BASIS OF PRESENTING CONSOLIDATED FINANCIAL STATEMENTS The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in the Japanese Companies Act and Instruments and Exchange Act and their related accounting regulations and in conformity with accounting principles generally accepted in Japan ("Japanese GAAP"), which are different in certain respects as to application and disclosure requirements of International Reporting Standards. In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to the consolidated financial statements issued domestically in order to present them in a form which is more familiar to readers outside Japan. In addition, certain reclassifications have been made in the 2016 consolidated financial statements to conform to the classifications used in The consolidated financial statements are stated in Japanese yen, the currency of the country in which Yusen Logistics Co., Ltd. (the "") is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of to $1, the approximate rate of exchange at March 31, Such translations should not be construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Consolidation The consolidated financial statements as of March 31, 2017, include the accounts of the and its 77 significant (75 in 2016) subsidiaries (together, the "Group") listed below: Consolidated Subsidiaries Equity Ownership Percentage* 1 Capital Stock* 1 Yusen Logistics (Americas) Inc % USD 70,976 thousand Yusen Logistics (Hong Kong) Limited HKD 55,000 thousand Yusen Global Freight Management Limited * 2 HKD 11,000 thousand Yusen Logistics (Singapore) Pte.Ltd SGD 16,950 thousand Yusen Logistics (Benelux) B.V * 3 EUR 50 thousand Yusen Logistics (Deutschland) GmbH * 3 EUR 2,638 thousand Yusen Logistics (Australia) Pty.Ltd * 4 AUD 15,478 thousand Yusen Logistics (Canada) Inc CAD 5,000 thousand Yusen Logistics (France) S.A.S * 3 EUR 14,185 thousand Yusen Logistics (Taiwan) Ltd * 5 TWD 157,398 thousand Beijing Yusen Freight Service Co.,Ltd * 2 CNY 9,312 thousand Yusen Logistics (Italy) S.P.A * 3 EUR 2,872 thousand PT. Yusen Logistics Indonesia 67.62* 6 USD 3,048 thousand Yusen Logistics (Europe) B.V EUR 39,493 thousand Yusen Logistics (Korea) Co.,Ltd KRW 2,000 million Shanghai Yusen Freight Service Co.,Ltd * 2 CNY 16,457 thousand Yusen Logistics (SAO Region) Co.,Ltd. * * 7 THB 10,000 thousand Yusen Logistics International (Vietnam) Co.,Ltd * 8 USD 600 thousand Yusen Logistics Philippines, Inc PHP 500,000 thousand Guangdong Yusen Freight Service Co.,Ltd * 2 CNY 8,009 thousand Yusen Logistics (India) Private Limited 51.00* 9 INR 1,094 million Shanghai Yusen Logistics Service (W.G.Q.) Co.,Ltd * 2 CNY 5,380 thousand Suzhou Yusen Logistics Service Co.,Ltd * 2 CNY 6,844 thousand Consolidated Subsidiaries Equity Ownership Percentage* 1 Capital Stock* 1 Yusen Logistics (UK) Ltd * 3 GBP 44,130 thousand Yusen Logistics (Iberica) S.A * 3 EUR 585 thousand Yusen Logistics (Polska) Sp.z o.o * 3 PLN 2,400 thousand Yusen Logistics (Hungary) KFT * 3 HUF 12,420 thousand Yusen Logistics (Edam) B.V * 10 EUR 18 thousand Yusen Logistics (Czech) s.r.o * 3 CZK 431,729 thousand Yusen Logistics (Vietnam) Co.,Ltd * 11 VND 6,375 million NANHAI BUSINESS SOLUTIONS PTE LTD * 12 SGD 100 thousand Yusen Logistics & Kusuhara Lanka (Pvt.) Ltd LKR 6,500 thousand Yusen Logistics RUS LLC * 3 RUB 1,000 thousand Yusen Logistics Center,Inc * 13 PHP 85,000 thousand Yusen Logistics (Thailand) Co.,Ltd * 14 THB 70,000 thousand PT. Puninar Yusen Logistics Indonesia IDR 172,588 thousand Yusen Logistics Do Brasil Ltda BRL 50,912 thousand Yusen Logistics (China) Co.,Ltd CNY 158,047 thousand PT. Yusen Logistics Solutions Indonesia IDR 67,488 thousand TASCO Berhad 55.38* 15 MYR 100,000 thousand Baik Sepakat Sdn Bhd * 16 MYR 250 thousand Tunas Cergas Logistik Sdn Bhd * 16 MYR 250 thousand Emulsi Teknik Sdn Bhd * 16 MYR 250 thousand TASCO Express Sdn Bhd * 16 MYR 100 thousand Maya Kekal Sdn Bhd * 16 MYR 0 thousand Precious Fortunes Sdn Bhd * 16 MYR 8,000 thousand Trans-Asia Shipping Pte Ltd * 16 SGD 100 thousand Piala Kristal (M) Sdn Bhd 51.22* 17 MYR 205 thousand Omega Saujana Sdn Bhd 51.22* 17 MYR 205 thousand Titian Pelangi Sdn. Bhd * 16 MYR 3,380 thousand Yusen Logistics (Shenzhen) Co.,Ltd. * * 2 CNY 11,430 thousand Double Wing Spirit Service Co.,Ltd * 18 THB 7,000 thousand Yusen Real Estate (Hai Phong) Co.,Ltd * 12 VND 126,216 million Yusen Logistics (Mexico), S.A. de C.V * 19 MXN 170,568 thousand Yusen Logistics and Transportation (Vietnam) Co.,Ltd * 8 VND 2,104 million Yusen Logistics (Argentina) S.A ARS 18 thousand Xiamen Yusen Logistics Service Co.,Ltd * 2 CNY 4,132 thousand YAS Real Estate (Vietnam) Co.,Ltd * 2 VND 47,916 million Yusen Logistics (Middle East) L.L.C AED 300 thousand Yusen Logistics (Bangladesh) Ltd BDT 10,000 thousand Yusen Inci Lojistik ve Ticaret A.S. * * 20 TRY 29,864 thousand Transfreight Automotive Logistics Europe Ltd. * * 21 GBP 592 thousand Transfreight Automotive Logistics Europe S.A.S. * * 22 EUR 3,040 thousand Yusen Logistics (Cambodia) Co.,Ltd. * * 12 USD 500 thousand Yusen Keihin Trans Co., Ltd JPY 36 million Yusen Logistics (Kitakanto) Co., Ltd JPY 50 million Yusen Logistics (Tsukuba) Co., Ltd JPY 50 million Yusen Logistics (Shinshu) Co., Ltd JPY 50 million Yusen Logistics (Tohoku) Co., Ltd JPY 30 million Yusen Logistics (Kyushu) Co., Ltd JPY 30 million Yusen Logistics (Chugoku) Co., Ltd JPY 30 million Yusen Logistics (Hokuriku) Co., Ltd JPY 20 million Yusen Logitec Co., Ltd JPY 20 million Yusen Travel Co., Ltd JPY 270 million Ryowa Diamond Air Service Co., Ltd * 23 JPY 50 million Yusen Loginet Co., Ltd JPY 20 million Transcontainer Limited JPY 100 million 2017 Annual Report 48

11 * 1 as of March 31, 2017 * 2 owned % by Yusen Logistics (Hong Kong) Limited * 3 owned % by Yusen Logistics (Europe) B.V. * 4 owned 32.04% by the, 18.93% by Yusen Logistics (Singapore) Pte.Ltd. * 5 owned 57.20% by the, 38.10% by Yusen Logistics (Hong Kong) Limited * 6 owned 8.88% by the, 58.74% by Yusen Logistics (Singapore) Pte.Ltd. * 7 owned 49.00% by Yusen Logistics (Singapore) Pte.Ltd., 46.00% by Yusen Logistics (Thailand) Co., Ltd. * 8 owned 49.00% by Yusen Logistics (Singapore) Pte.Ltd. * 9 owned 31.53% by the, 19.47% by Yusen Logistics (Singapore) Pte.Ltd. * 10 owned % by Yusen Logistics (Benelux) B.V. * 11 owned 99.00% by Yusen Logistics (Singapore) Pte.Ltd. * 12 owned % by Yusen Logistics (Singapore) Pte.Ltd. * 13 owned % by Yusen Logistics Philippines, Inc. * 14 owned 33.46% by the, 10.80% by Yusen Logistics (SAO Region) Co.,Ltd. * 15 owned 31.39% by the, 23.99% by Yusen Logistics (Singapore) Pte.Ltd. * 16 owned % by TASCO Berhad * 17 owned 51.22% by TASCO Berhad * 18 owned 80.00% by Yusen Logistics (Thailand) Co., Ltd. * 19 owned 93.08% by the, 6.92% by Yusen Logistics (Americas) Inc. * 20 owned 60.00% by Yusen Logistics (Europe) B.V. * 21 owned % by Yusen Logistics (UK) Ltd. * 22 owned % by Yusen Logistics (France) S.A.S. * 23 owned 99.17% by Yusen Travel Co., Ltd. * 24 became a newly consolidated company as a result of a merger with Yusen Logistics Turkey Lojistik Hizmetleri Limited Sirketi and the Group owned the majority of shares * 25 became newly consolidated companies as a result of the acquisition of the stock * 26 became a newly consolidated company since materiality has increased * 27 changed its company name in this fiscal year Under the control or influence concept, those companies in which the, directly or indirectly, is able to exercise control over operations are fully consolidated, and those companies over which the Group has the ability to exercise significant influences are accounted for by the equity method. ETA TOO, INC. was excluded from the scope of consolidation due to liquidation. Yusen Logistics Turkey Lojistik Hizmetleri Limited Sirketi was merged into Yusen Inci Lojistik ve Ticaret A.S. and excluded from the scope of consolidation. Investments in four (three in 2016) unconsolidated subsidiaries and two (three in 2016) affiliated companies are accounted for by the equity method. Investments in the remaining unconsolidated subsidiaries and affiliated companies are stated at cost, which is determined by the moving-average method. If the equity method of accounting had been applied to the investments in these companies, the effect on the accompanying consolidated financial statements would not be material. The excess of the cost of an acquisition over the fair value of the net assets of the acquired subsidiary at the date of acquisition is being amortized using the straight-line method over a period not exceeding 20 years. All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized profit included in assets resulting from transactions within the Group is eliminated. b. Accounting period The s accounting period begins each year on April 1 and ends the following year on March 31. During the fiscal year ended March 31, 2017, December 31 was used by 13 consolidated subsidiaries listed below as the closing date for their financial statements. Yusen Logistics (Mexico), S.A. de C.V. *1 Yusen Logistics (Argentina) S.A. *1 Yusen Logistics Do Brasil Ltda. *1 Beijing Yusen Freight Service Co.,Ltd. *1 Guangdong Yusen Freight Service Co.,Ltd. *1 Yusen Logistics (Shenzhen) Co.,Ltd. *1 Shanghai Yusen Logistics Service (W.G.Q.) Co.,Ltd. *1 Suzhou Yusen Logistics Service Co.,Ltd. *1 Xiamen Yusen Logistics Service Co.,Ltd. *1 Yusen Logistics RUS LLC *2 Yusen Logistics (China) Co.,Ltd. *2 Shanghai Yusen Freight Service Co.,Ltd. *2 PT. Yusen Logistics Indonesia *2 * 1 Necessary adjustments have been made to address transactions that occurred between closing dates different to that of the and March 31. * 2 They provide financial statements based on provisional settlement of accounts as of March 31 to facilitate preparation of the consolidated financial statements. From the fiscal year ended March 31, 2017, in order to provide more appropriate disclosures in the consolidated financial statements, Yusen Logistics RUS LLC has changed to a method in which they prepare provisional financial statements as of the consolidated fiscal year end of March 31, for consolidation purposes. In accordance with this change, the consolidated financial statements are prepared based on the statements of income for twelve-month fiscal periods from April 1, 2016 to March 31, 2017 of those subsidiaries. Profit or loss for the period from January 1, 2016 to March 31, 2016 has been incorporated as an adjustment of retained earnings. c. Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated Statements In May 2006, the Accounting Standards Board of Japan ("ASBJ") issued ASBJ Practical Issues Task Force ("PITF") No. 18, "Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for the Consolidated Statements," the accounting policies and procedures applied to a parent company and its subsidiaries for similar transactions and events under similar circumstances should in principle be unified for the preparation of the consolidated financial statements. However, financial statements prepared by foreign subsidiaries in accordance with either International Reporting Standards or generally accepted accounting principles in the United States of America ( Accounting Standards Board Accounting Standards Codification "FASB ASC") tentatively may be used for the consolidation process, except for the following items that should be adjusted in the consolidation process so that net income is accounted for in accordance with Japanese GAAP, unless they are not material: (1) amortization of goodwill; (2) scheduled amortization of actuarial gain or loss of pensions that has been recorded in equity through other comprehensive income; (3) expensing capitalized development costs of R&D; and (4) cancellation of the fair value model of accounting for property, plant and equipment and investment properties and incorporation of the cost model of accounting. d. Cash Equivalents Cash equivalents are short-term investments that are readily convertible into cash and that are exposed to insignificant risk of changes in value. Cash equivalents include time deposits which mature or become due within three months of the date of acquisition. e. Investments in Securities Securities are classified into three categories, depending on management's intent: trading, available-for-sale, or held-to-maturity. The classifies all investments in securities as available-for-sale securities. Marketable available-for-sale securities are reported at fair value, with unrealized gains and losses, net of applicable taxes, reported under accumulated other comprehensive income in a separate component of equity. Non-marketable available-for-sale securities are stated at cost determined by the moving-average method. For other than temporary declines in fair value, non-marketable investment securities are reduced to net realizable value by a charge to income. f. Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment of the and domestic consolidated subsidiaries is computed substantially by the declining balance method at rates based on the estimated useful lives of the assets, except for the buildings and structures acquired on or after April 1, 2016 which are depreciated by the straight line method. The depreciation of property, plant and equipment of foreign consolidated subsidiaries is generally computed by the straight line method over the estimated useful lives of the assets. The range of useful lives is principally as follows: Buildings and structures Furniture and fixtures Machinery, equipment and vehicles 3 60 years 2 20 years 4 6 years 2017 Annual Report 49

12 g. Other Assets Amortization of intangible assets included in other assets is computed by the straight-line method. Software for internal use is amortized over a five-year period. h. Long-lived Assets The Group reviews its long-lived assets for impairment whenever events or changes in circumstance indicate the carrying amount of an asset or asset group may not be recoverable. An impairment loss is recognized if the carrying amount of an asset or asset group exceeds the sum of the undiscounted future cash flows expected to result from the continued use and eventual disposition of the asset or asset group. The impairment loss is measured as the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of the discounted cash flows from the continued use and eventual disposition of the asset or the net selling price at disposition. i. Allowance for Doubtful Accounts The Group provides an allowance for doubtful accounts based on the aggregated amount of estimated credit losses for doubtful receivables, plus an amount for receivables other than doubtful receivables calculated using historical write off experience over a certain period. j. Accrued Bonuses to Employees Employees are paid bonuses in July and December of every year. The bonuses include amounts for services rendered during the previous fiscal year which are recorded as accrued bonuses on the balance sheet as of the respective fiscal year-end. k. Retirement and Pension Plans Employee's retirement and pension plans The liability for employees' retirement benefits is accounted for based on projected benefit obligations and plan assets at the balance sheet date. In calculating projected benefit obligations, the expected amount of retirement benefits attributed to a period up to the current fiscal year is primarily determined based on a benefit formula basis. Actuarial gains and losses are amortized in the year following the year in which the gains and losses arise by the straight-line method over a certain period (8-10 years) which is not more than the average remaining service period of employees. Past service costs are recognized in profit or loss in full in the fiscal year in which they arise. Retirement allowance for directors and audit & supervisory board members Retirement allowance for directors and audit & supervisory board members for certain subsidiaries are recorded to state the liability at the amount that would be required if all directors and audit & supervisory board members retired at each balance sheet date. l. Income Taxes The provision for income taxes is computed based on the pretax income included in the consolidated statement of income. The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred taxes are measured by applying currently enacted tax laws to the temporary differences. m. Treasury Stock Under the Japanese Companies Act, the is allowed to acquire its own shares to the extent that the aggregate cost of treasury stock does not exceed the maximum amount available for dividends. Treasury stock is stated at cost in the equity of the accompanying consolidated balance sheet. Net gain on disposal of treasury stock is presented under "Capital surplus'' in the equity of the accompanying consolidated balance sheet. n. Foreign Currency Transactions All short-term and long-term monetary receivables and payables denominated in foreign currencies are translated into Japanese yen at the exchange rates at the balance sheet date. The foreign exchange gains and losses from translation are recognized in the consolidated statement of income. o. Foreign Currency Statements The balance sheet accounts of foreign consolidated subsidiaries and foreign subsidiaries accounted for by the equity method are translated into Japanese yen at the current exchange rate as of the balance sheet date except for equity, which is translated at the historical rate. Differences arising from such translations are shown as "Foreign currency translation adjustments" under accumulated other comprehensive income in a separate component of equity. Revenue and expense accounts of foreign consolidated subsidiaries are translated into Japanese yen at the average exchange rates. p. Derivatives The Group uses derivative financial instruments to manage its exposures to fluctuations in foreign exchange and interest rates. Foreign exchange forward contracts are utilized by the Group. The Group does not enter into derivatives for trading or speculative purposes. Derivative financial instruments and foreign currency transactions are classified and accounted for as follows: (1) all derivatives are recognized as either assets or liabilities and measured at fair value, and gains or losses on derivative transactions are recognized in the consolidated statement of income and (2) for derivatives used for hedging purposes, if derivatives qualify for hedge accounting because of high correlation and effectiveness between the hedging instruments and the hedged items, gains or losses on derivatives are deferred until maturity of the hedged transactions. The foreign exchange forward contracts employed to hedge foreign exchange exposures in the Group's operating activities are measured at the fair value and the unrealized gains or losses are recognized in consolidated statement of income. q. Accounting Changes and Error Corrections In December 2009, the ASBJ issued ASBJ Statement No. 24 Accounting Standard for Accounting Changes and Error Corrections and ASBJ Guidance No. 24 Guidance on Accounting Standard for Accounting Changes and Error Corrections. Accounting treatments under this standard and guidance are as follows: (1) Changes in Accounting Policies - When a new accounting policy is applied following revision of an accounting standard, the new policy is applied retrospectively, unless the revised accounting standard includes specific transitional provisions. When the revised accounting standard includes specific transitional provisions, an entity shall comply with the specific transitional provisions. (2) Changes in Presentation - When the presentation of financial statements is changed, prior-period financial statements are reclassified in accordance with the new presentation. (3) Changes in Accounting Estimates - A change in an accounting estimate is accounted for in the period of the change if the change affects that period only, and is accounted for prospectively if the change affects both the period of the change and future periods. (4) Corrections of Prior Period Errors - When an error in prior-period financial statements is discovered, those statements are restated. This accounting standard and the guidance are applicable to accounting changes and corrections of priorperiod errors, which are made from the beginning of the fiscal year that begins on or after April 1, r. Per Share Net assets per share are computed based on the outstanding shares of common stock at relevant balance sheet dates. s. Basic net income per share is computed by dividing net income available to shareholders by the weighted-average number of shares of common stock outstanding for the period. Diluted net income per share for the years ended March 31, 2017 and 2016, is not presented since the had no securities with a dilutive effect. Cash dividends per share presented in the accompanying consolidated statement of income are dividends applicable to the respective years including dividends to be paid after the end of the year. Change in Accounting Standard Application of Practical Solution on a change in depreciation method due to Tax Reform 2016 Pursuant to an amendment to the Corporate Tax Act, the adopted Accounting Standards Board of Japan Practical Issues Task Force No. 32 Practical Solution on a change in depreciation method due to Tax Reform 2016 and changed the depreciation method for building improvements and structures acquired on or after April 1, 2016, from the declining-balance method to the straight-line method. As a result, the effect from this accounting change was immaterial. t. Changes in presentation Consolidated statement of Income Prior to April 1, 2016, the "Subsidy income" was separately presented in the other income (expenses) section of the consolidated statement of income. Since during this fiscal year ended March 31, 2017, the materiality of the amount decreased, such amount is now included in "Other-net" within the other income (expenses) section of the consolidated statement of income. The amount previously presented as "Subsidy income" for the year ended March 31, 2016, was 151 million Annual Report 50

13 u. Additional information Guidance on Recoverability of Deferred Tax Assets The applied ASBJ Guidance No. 26, "Guidance on Recoverability of Deferred Tax Assets," effective April 1, There was no impact from this for the year ended March 31, Acquisition of companies through share acquisition In January 2017, TASCO Berhad, a subsidiary of the in Malaysia, has reached agreements to acquire Gold Cold Transport Sdn Bhd and one other company, cold chain logistics provider in Malaysia. 1. Purpose of the acquisition The purpose is to support growth and business expansion by making a full-scale entry into the cold chain logistics segment in Malaysia and combining ocean and air cargo transport with contract logistics. 2. Name of the company to be acquired, description of its business (1) Name: Gold Cold Transport Sdn Bhd and one other company (2) Description of business: Cold chain business 2017 Annual Report 51

14 3. LOSS ON IMPAIRMENT OF FIXED ASSETS The Group reviewed its long-lived assets for impairment as of the year ended March 31, 2017 and 2016, and as a result, recognized an impairment loss of 1,439 million ($12,829 thousand) and 1,003 million as other expenses for the year ended March 31, 2017 and 2016 respectively. The impairment loss of 1,439 million for the year ended March 31, 2017 was recorded on certain buildings and land in Osaka, Japan. The Group reduced the book value of these assets to their recoverable amounts due to a significant decline in market value of certain fixed assets which were planned to be disposed of by sale. Assets in use comprised 84 million for buildings and 1,355 million for land. The recoverable amounts of those assets planned to be disposed by sale were measured at their net selling price determined by quotation from a third party vendor. The impairment loss of 1,003 million for the year ended March 31, 2016 was recorded on a certain operating system in Hong Kong, China. The Group reduced the book value of this asset to its recoverable amount due to earlier retirement than originally planned. The recoverable amount of this asset was measured at its value in use. The value in use is calculated based on the projected future cash flows discounted at a rate of 3.86%. 4. INVESTMENTS IN SECURITIES The cost and aggregate fair values of the investments classified as "available-for-sale securities" at March 31, 2017 and 2016, are as follows: (1) Available-for-sale securities for which market quotations are available: Fair Value (Carrying Fair Value (Carrying Fair Value (Carrying Cost Amount) Difference Cost Amount) Difference Cost Amount) Difference Securities for which market value exceeds cost Equity securities $ 2,734 $ 6,564 $ 3,830 Government bonds Securities for which market value does not exceed cost Equity securities (10 ) (19) (92) Total $ 3,601 $ 7,343 $ 3,742 (2) Proceeds from sale of available-for-sale securities and total amounts of gain and loss on sale of available-for-sale securities: Proceeds from sale of available-for-sale securities 0 72 $ 3 Total amount of gain on sale of available-for-sale securities Total amount of loss on sale of available-for-sale securities 2017 Annual Report 52

15 5. SHORT-TERM LOANS PAYABLE AND LONG-TERM DEBT Short-term loans payable at March 31, 2017, consisted of notes to financial institutions and bank overdrafts. The weighted-average interest rates applicable to the short-term loans payable were 3.40% and 1.44% at March 31, 2017 and 2016, respectively. Long-term debt at March 31, 2017 and 2016, consisted of the following: Loans from banks and other financial institutions, due serially to 2027 with average interest rates of 1.11% (2017) and 1.00% (2016); Collateralized Unsecured 18,877 18,568 $ 168,261 Finance lease obligations ,351 Total 19,253 18, ,612 Less current portion (1,900) (5,168) (16,937) Long-term debt, less current portion 17,353 13,660 $ 154,675 Annual maturities of long-term debt including finance lease obligations at March 31, 2017, were as follows: Year Ending March ,900 $ 16, ,250 20, , ,000 8, and thereafter 13, ,659 Total 19,253 $ 171,612 As is customary in Japan, the maintains substantial deposit balances with banks with which it has borrowings. Such deposit balances are not legally or contractually restricted as to withdrawal. General agreements with respective banks provide, as is customary in Japan, that additional collateral must be provided under certain circumstances if requested by such banks and that certain banks have the right to offset cash deposited with them against any long-term or short-term debt or obligation that becomes due and, in case of default and certain other specified events, against all other debt payable to the banks. The has never been requested to provide any additional collateral. 6. RETIREMENT AND PENSION PLANS The and certain domestic consolidated subsidiaries have a non-contributory funded defined benefit pension plan and an unfunded retirement benefit plan. Certain of the s domestic consolidated subsidiaries have a contributory funded defined contribution pension plan, while certain foreign consolidated subsidiaries have either a non-contributory funded defined benefit pension plan or a contributory funded defined contribution pension plan. In addition, a certain domestic consolidated subsidiary participates in a multiemployer plan for which the cannot reasonably calculate the amount of plan assets corresponding to the contributions made by the. Therefore, it is accounted for using the same method as a defined contribution plan. For the years ended March 31, 2017 and Defined Benefit Plan (1) The changes in projected benefit obligation for the years ended March 31, 2017 and 2016, are as follows: Balance at beginning of year 18,731 19,404 $ 166,955 Current service cost 1,129 1,068 10,063 Interest cost ,697 Actuarial gains and losses 828 (304) 7,376 Benefits paid (1,044) (1,225) (9,302) Past service cost (10) Others (810) (593) (7,219) Balance at end of year 19,137 18,731 $ 170,570 (2) The changes in plan assets for the years ended March 31, 2017 and 2016, are as follows: Balance at beginning of year 14,368 15,254 $ 128,065 Expected return on plan assets ,647 Actuarial gains and losses 653 (722) 5,817 Contributions from the employer ,200 Benefits paid (745) (889) (6,644) Others (866) (699) (7,713) Balance at end of year 14,739 14,368 $ 131, Annual Report 53

16 (3) Reconciliation between the liability recorded in the consolidated balance sheet and the balances of projected benefit obligation and plan assets as of March 31, 2017 and 2016, is as follows: Funded projected benefit obligation 14,190 14,724 $ 126,477 Plan assets (14,739) (14,368) (131,372) (549) 356 (4,895) Unfunded projected benefit obligation 4,947 4,007 44,093 Net liability (asset) for defined benefit obligation 4,398 4,363 $ 39,198 Net defined benefit liability 5,626 5,195 $ 50,146 Net defined benefit asset (1,228) (832) (10,948) Net liability (asset) for defined benefit obligation 4,398 4,363 $ 39,198 (4) The components of net periodic benefit costs for the years ended March 31, 2017 and 2016, are as follows: Current service cost 1,129 1,068 $ 10,063 Interest cost ,697 Expected return on plan assets (409) (449) (3,647) Amortization of actuarial gains and losses ,767 Amortization of past service cost (10) Others Net periodic benefit costs 1,460 1,380 $ 13,018 (5) Amounts recognized in other comprehensive income (before income tax effect) in respect of defined retirement benefit plans for the years ended March 31, 2017 and 2016, are as follows: (6) Amounts recognized in accumulated other comprehensive income (before income tax effect) in respect of defined retirement benefit plans as of March 31, 2017 and 2016, are as follows: Unrecognized actuarial gains and losses (1,197) (1,464) $ (10,676) Total (1,197) (1,464) $ (10,676) (7) Plan assets as of March 31, 2017 and 2016 (a) Components of plan assets Plan assets consisted of the following: Equity investments 46 % 50 % Debt investments General account Others Total 100 % 100 % (b) Method of determining the expected rate of return on plan assets The expected rate of return on plan assets is determined considering the long-term rates of return which are currently expected and expected in the future from the variety of asset portfolio components. (8) Assumptions used for the years ended March 31, 2017 and 2016, are set forth as follows: Discount rate Principally % Principally % Expected rate of return on plan assets Principally % Principally % 2. Defined Contribution Plan The amount of contributions which certain consolidated subsidiaries (including the multi-employer pension plan of the welfare pension insurance fund accounted for similar to the defined contribution plans) contributed under the defined contribution plan is 801 million ($7,139 thousand) and 772 million for the years ended March 31, 2017 and 2016, respectively. Actuarial gains and losses $ 2,378 Total $ 2, Annual Report 54

17 7. EQUITY Japanese companies are subject to the Companies Act of Japan (the "Companies Act"). The significant provisions in the Companies Act that affect financial and accounting matters are summarized below: a. Dividends Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to the year-end dividend upon resolution at the shareholders meeting. For companies that meet certain criteria such as: (1) having a Board of Directors, (2) having independent auditors, (3) having an Audit & Supervisory Board, and (4) the term of service of the directors is prescribed as one year rather than two years of normal term by its articles of incorporation, the Board of Directors may declare dividends (except for dividends in kind) at any time during the fiscal year if the company has prescribed so in its articles of incorporation. The meets all the above criteria. Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles of incorporation of the company so stipulate. The Companies Act provides certain limitations on the amounts available for dividends or the purchase of treasury stock. The limitation is defined as the amount available for distribution to the shareholders, but the amount of net assets after dividends must be maintained at no less than 3 million. b. Increases/Decreases and Transfer of Common Stock, Reserve, and Surplus The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (a component of retained earnings) or as additional paid-in capital (a component of capital surplus) depending on the equity account charged upon the payment of such dividends until the total of aggregate amount of legal reserve and additional paid-in capital equals 25% of the common stock. Under the Companies Act, the total amount of additional paid-in capital and legal reserve may be reversed without limitation. The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capital surplus, and retained earnings can be transferred among the accounts under certain conditions upon resolution of the shareholders. c. Treasury Stock and Treasury Stock Acquisition Rights The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stock by resolution of the Board of Directors. The amount of treasury stock purchased cannot exceed the amount available for distribution to the shareholders which is determined by a specific formula. Under the Companies Act, stock acquisition rights are presented as a separate component of equity. The Companies Act also provides that companies can purchase both treasury stock acquisition rights and treasury stock. Such treasury stock acquisition rights are presented as a separate component of equity or deducted directly from stock acquisition rights. 8. INCOME TAXES The and domestic consolidated subsidiaries are subject to Japanese national and local income taxes which, in the aggregate, resulted in a normal effective statutory rate of approximately 30.9% and 33.1% for the years ended March 31, 2017 and 2016, respectively. The tax effects of significant temporary differences resulted in deferred tax assets and liabilities at March 31, 2017 and 2016, are as follows: Deferred tax assets: Net defined benefit liability 1,545 1,430 $ 13,774 Accrued bonuses to employees ,405 Accrued enterprise tax Accrued pension and severance costs for directors and audit & supervisory board members ,310 Allowance for doubtful accounts Depreciation ,422 Tax loss carryforwards 5,458 4,038 48,647 Loss on impairment of fixed assets ,974 Loss on revaluation of investments in securities Loss on write-down of golf club membership Stock of affiliated company ,045 Other ,523 Total 9,906 7,985 88,302 Less valuation allowance (6,355) (2,530) (56,645) Total deferred tax assets 3,551 5,455 31,657 Deferred tax liabilities: Depreciation ,322 Net defined benefit asset ,275 Other ,790 Total deferred tax liabilities 1,614 1,430 14,387 Net deferred tax assets 1,937 4,025 $ 17, Annual Report 55

18 The reconciliation of the difference between the normal effective statutory tax rate and the actual effective tax rate reflected in the accompanying consolidated statements of income for the years ended March 31, 2017 and 2016 is as follows: LEASES Normal effective statutory tax rate 30.9% 33.1% Adjustments: Entertainment expenses and other non-deductible permanent differences Dividend income not taxable (10.6) (1.8 ) Per share levy of local tax Effect of elimination of intercompany dividends received Lower income tax rates applicable to income in certain foreign countries (13.9) (11.2 ) Valuation allowance on deferred tax Equity in earnings of affiliated companies and unconsolidated companies (0.8) (0.1 ) Effect of tax reduction 1.6 Amortization of goodwill Other net Actual effective tax rate 113.0% 37.1% The Group has various lease agreements whereby the Group acts as lessee. The minimum rental commitments under non-cancelable operating leases at March 31, 2017 and 2016, were as follows: Due within one year 11,478 10,325 $ 102,307 Due after one year 26,186 21, ,413 Total 37,664 31,652 $335, FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES In March 2008, the ASBJ revised ASBJ Statement No. 10 Accounting Standard for Instruments and issued ASBJ Guidance No. 19 Guidance on Accounting Standard for Instruments and Related Disclosures. This accounting standard and the guidance were applicable to financial instruments and related disclosures at the end of the fiscal years ending on or after March 31, The Group applied the revised accounting standard and the new guidance effective March 31, (1) Group policy for financial instruments The Group limits the use of financial instruments for fund management purposes to short-term bank deposits. It is the basic policy of the Group to use the cash management system operated within the Group and bank loans to fund its ongoing operations. Derivatives are used, not for speculative purposes, but to manage exposure to financial risks as described in (2) below. (2) Nature and extent of risks arising from financial instruments Receivables such as trade notes and trade accounts are exposed to customer credit risk. Although receivables in foreign currencies are exposed to the market risk of fluctuation in foreign currency exchange rates, the position, net of payables in foreign currencies, is hedged by using forward foreign currency contracts. Investment securities, mainly equity securities of customers and suppliers of the Group, are exposed to the risk of market price fluctuations. Payment terms of payables, such as trade notes and trade accounts, are less than one year. Although payables in foreign currencies are exposed to the market risk of fluctuation in foreign currency exchange rates, those risks are netted against the balance of receivables denominated in the same foreign currency as noted above. Loans, principally from financial institutions, in short-term loans payable are mainly for financing related to business transaction. Loans, principally from financial institutions, in long-term debt are mainly for financing related to investment in property. Derivatives, which are forward foreign currency contracts, are used to manage exposure to market risks from changes in foreign currency exchange rates of receivables and payables. Please see Note 11 for more details about derivatives. (3) Risk management for financial instruments Credit risk management Credit risk is the risk of economic loss arising from a counterparty s failure to repay or service debt according to the contractual terms. The Group manages its credit risk from receivables on the basis of internal guidelines, which include monitoring of payment term and balances of major customers by each business administration department to identify the default risk of customers in the early stage. The maximum credit risk exposure of financial assets is limited to their carrying amounts as of March 31, Market risk management (foreign exchange risk and interest rate risk) Foreign currency trade receivables and payables are exposed to market risk resulting from fluctuations in foreign currency exchange rates. Such foreign exchange risk is hedged principally by forward foreign currency contracts. In addition, when foreign currency trade receivables and payables are expected from forecasted transactions, forward foreign currency contracts may be used under the limited contract term of a quarter of a year. Investment securities are managed by monitoring market values and financial position of issuers on a regular basis. The Group executes and manages derivative transactions according to the internal guidelines which prescribe the authority and the limit for each transaction. Counterparties to these derivative transactions are limited to major financial institutions in order to mitigate credit risks Annual Report 56

19 Liquidity risk management Liquidity risk comprises the risk that the Group cannot meet its contractual obligations in full on maturity dates. The Group manages its liquidity risk by holding adequate volumes of liquid assets, along with adequate financial planning by the corporate treasury department. (4) Fair values of financial instruments Fair values of financial instruments are based on quoted prices in active markets. If quoted prices are not available, other rational valuation techniques are used instead. As the valuation of financial instruments requires various assumptions, the fair values of financial instruments are subject to change when different assumptions are used. Please see Note 11 for fair value information for derivatives. (a) Fair value of financial instruments March 31, 2017 Carrying Amount Fair Value Unrealized Gain/Loss Cash and cash equivalents 27,073 27,073 Time deposits 3,333 3,333 Trade notes and accounts receivable 88,705 88,705 Investments in securities: Available-for-sale securities Total 119, ,935 Trade notes and accounts payable 47,227 47,227 Short-term loans payable 3,457 3,457 Accrued income taxes 1,322 1,322 Long-term debt 19,253 19, Total 71,259 71, March 31, 2016 Carrying Amount Fair Value Unrealized Gain/Loss Cash and cash equivalents 32,911 32,911 Time deposits 6,065 6,065 Trade notes and accounts receivable 78,512 78,512 Investments in securities: Available-for-sale securities Total 118, ,164 Trade notes and accounts payable 41,142 41,142 Short-term loans payable 1,605 1,605 Accrued income taxes 1,890 1,890 Long-term debt 18,828 19, Total 63,465 63, March 31, 2017 Carrying Amount Fair Value Unrealized Gain/Loss Cash and cash equivalents $ 241,314 $ 241,314 Time deposits 29,705 29,705 Trade notes and accounts receivable 790, ,665 Investments in securities: Available-for-sale securities 7,343 7,343 Total $1,069,027 $1,069,027 Trade notes and accounts payable $ 420,954 $ 420,954 Short-term loans payable 30,814 30,814 Accrued income taxes 11,787 11,787 Long-term debt 171, ,877 $ 2,265 Total $ 635,167 $ 637,432 $ 2,265 Note: Current portion of long-term debt is included in "Long-term debt." Current assets and liabilities The fair value of all current assets and liabilities (cash and cash equivalents, time deposits, trade notes and accounts receivable, trade notes and accounts payable, short-term loans payable, current portion of long-term debt, and accrued income taxes) is considered to be equivalent to their carrying amount due to their short-term maturities. Investments in securities (available-for-sale securities) The fair values of investments in securities are measured at the quoted market price of the stock exchange for the equity instruments, and at the quotes obtained from the financial institution for certain debt instruments. For information on securities classified by holding purpose, please refer to Note 4. Long-term debt -Long-term loans payable Long-term loans payable with variable interest rates are stated at book value as the interest rate on these loans reflects the market rate in the short term and their market values approximate book values. Long-term loans payable with fixed interest rates are stated at present value. The present value is calculated by discounting a periodically divided portion of the principal and interest of these loans*, using the assumed rate applied to a similar loan. *As to the long-term loans payable related to the interest rate swap agreements that meet the requirements for exceptional accounting (Refer to Note 11, Derivatives ), the total amount of principal and interest income at the post-swap rate is applied. - Lease obligations The fair value of lease obligations approximates carrying amount Annual Report 57

20 Derivatives The fair value information for derivatives is included in Note 11. (b) instruments whose fair value cannot be reliably determined Carrying Amount Investments in unconsolidated subsidiaries and affiliated companies 2,288 1,832 $ 20,392 Investments in equity instruments that do not have a quoted market price in an active market ,948 Total 2,619 2,175 $ 23,340 Due after Due after one year five years Due in one through through Due after March 31, 2017 year or less five years ten years ten years Cash and cash equivalents $ 241,314 Time deposits 29,705 Trade notes and accounts receivable 790,665 Investments in securities: Available-for-sale securities with contractual maturities $ 374 Total $1,061,684 $ 374 (5) Maturity analysis for financial assets and securities with contractual maturities Due after Due after one year five years Due in one through through Due after March 31, 2017 year or less five years ten years ten years Cash and cash equivalents 27,073 Time deposits 3,333 Trade notes and accounts receivable 88,705 Investments in securities: Available-for-sale securities with contractual maturities 42 Total 119, Due after Due after one year five years Due in one through through Due after March 31, 2016 year or less five years ten years ten years Cash and cash equivalents 32,911 Time deposits 6,065 Trade notes and accounts receivable 78,512 Investments in securities: Available-for-sale securities with contractual maturities Total 117, Annual Report 58

21 11. DERIVATIVES The Group enters into foreign exchange forward contracts, interest rate swaps and currency swaps to reduce the exposure to fluctuations in interest rate risks and foreign exchange rates associated with certain assets and liabilities denominated in foreign currencies. All derivative transactions are entered into to hedge interest and foreign currency exposures incorporated within the Group's business. Accordingly, market risk in these derivatives is basically offset by opposite movements in the value of hedged assets or liabilities. Because the counterparties to these derivatives are limited to major international financial institutions, the Group does not anticipate any losses arising from credit risk. Derivative transactions entered into by the Group have been made in accordance with internal policies which regulate their authorization. The Group had the following derivative contracts outstanding at March 31, 2017 and 2016: Derivative transactions to which hedge accounting is not applied. Currency related Contracts Contracts Contracts Outstanding Outstanding Outstanding Contracts Due Over Contracts Due Over Contracts Due Over Outstanding One Year Fair Value Outstanding One Year Fair Value Outstanding One Year Fair Value Foreign currency forward contracts: Selling Euro 144 (8 ) $ 1,281 $ (71 ) Selling British pound $ 493 $ 4 Selling Canadian dollar 334 (2 ) $ 2,979 $ (18 ) Buying U.S. dollar 786 (7 ) 838 (1 ) $ 7,008 $ (59 ) Buying Singapore dollar 1, (26 ) $ 10,915 $ 444 Buying Japanese yen (58 ) $ 1,884 $ 1,884 $ (515 ) Buying Hong Kong dollar 116 (1 ) 148 (1 ) $ 1,036 $ (7 ) Buying Euro 9 0 Buying Canadian dollar $ 2,982 $ 15 Buying Taiwan dollar 1, $ 12,736 $ 535 Currency swaps: Receipts - U.S. dollar, payments - Japanese yen 1,420 4 $ 12,660 $ 36 Receipts - Singapore dollar, payments - U.S. dollar (60 ) (46 ) $ 4,226 $ 3,672 $ (533 ) Receipts - Thai baht, payments - Euro (10 ) $ 8,149 $ 182 Receipts - Thai baht, payments - Japanese yen 2, (31 ) $ 23,537 $1,036 Total 10, , (95 ) $ 89,886 $ 5,556 $1,049 Fair values are calculated using the prices offered by transacting financial institutions Annual Report 59

22 Derivative transactions to which hedge accounting is applied. (1) Currency related Contracts Contracts Contracts Outstanding Outstanding Outstanding Contracts Due Over Contracts Due Over Contracts Due Over Hedged Item Outstanding One Year Fair Value Outstanding One Year Fair Value Outstanding One Year Fair Value Derivative transactions qualifying for general accounting policies, deferral hedge accounting Currency swaps: Receipts - U.S. dollar, payments - Malaysian Ringgit Long-term debt 1, , $10,946 $ 7,509 $ 1,643 Total 1, , $10,946 $ 7,509 $ 1,643 Fair values are calculated using the prices offered by transacting financial institutions. (2) Interest related Contracts Contracts Contracts Outstanding Outstanding Outstanding Contracts Due Over Contracts Due Over Contracts Due Over Hedged Item Outstanding One Year Fair Value Outstanding One Year Fair Value Outstanding One Year Fair Value Interest-rate swap derivative transactions qualifying for exceptional accounting Interest-rate swaps: Receipts floating, payments fixed Long-term debt 2,707 2,606 (74) 2,811 2,710 (125) $24,127 $23,227 $(658 ) Total 2,707 2,606 (74) 2,811 2,710 (125) $24,127 $23,227 $(658 ) Fair values are calculated using the prices offered by transacting financial institutions Annual Report 60

23 12. COMMITMENTS AND CONTINGENT LIABILITIES The Group was contingently liable for guarantees of trade payables and bank loans owed mainly by their unconsolidated subsidiaries and affiliated companies in the amount of 151 million ($1,345 thousand) and 267 million at March 31, 2017 and 2016, respectively. 13. BREAKDOWN OF SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses for the years ended March 31, 2017 and 2016, are summarized as follows: U.S. dollars Labor and payroll cost 33,781 35,266 $301,108 Provision for accrued bonuses to employees 2,909 3,241 25,926 Provision for accrued pension and severance costs for: Employees 1,406 1,319 12,530 Directors and audit & supervisory board members ,471 Provision for doubtful accounts ,351 Depreciation 1,982 2,335 17,667 Other 30,012 29, ,512 Total 70,407 72,092 $627, COMPREHENSIVE INCOME For the years ended March 31, 2017 and 2016 The components of other comprehensive income consist of the following: Unrealized gain (loss) on available-for-sale securities Gains arising during the year 164 (223) $ 1,462 Reclassification adjustments to profit or loss (0 ) (2) (0) Amount before income tax effect 164 (225) 1,462 Income tax effect (25 ) 36 (222) Total 139 (189) 1,240 Deferred gains or losses on hedges Gains arising during the year (4 ) (7) (35) Reclassification adjustments to profit or loss (18) Amount before income tax effect (4 ) (25) (35) Income tax effect Total (4 ) (25) (35) Foreign currency translation adjustments Adjustments arising during the year (2,625 ) (9,158) (23,399) Reclassification adjustments to profit or loss Amount before income tax effect (2,625 ) (9,158) (23,399) Income tax effect Total (2,625 ) (9,158) (23,399) Pension liability adjustment Adjustments arising during the year (156 ) (379) (1,389) Reclassification adjustments to profit or loss ,767 Amount before income tax effect ,378 Income tax effect (83 ) 73 (737) Total ,641 Share of other comprehensive income of entities accounted for using equity method Gains arising during the year (59 ) (79) (525) Reclassification adjustments to profit or loss Total (15 ) (79) (138) Total other comprehensive income (2,321 ) (9,377) $ (20,691) 2017 Annual Report 61

24 15. SEGMENT INFORMATION For the years ended March 31, 2017 and 2016 Under ASBJ Statement No. 17, "Accounting Standard for Segment Disclosures" and ASBJ Guidance No. 20, "Guidance on Accounting Standard for Segment," an entity is required to report financial and descriptive information about its reportable segments. Reportable segments are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components of an entity about which separate financial information is available and such information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Generally, segment information is required to be reported on the same basis as is used internally for evaluating operating segment performance and deciding how to allocate resources to operating segments. 1. Description of reportable segments The Group s reportable segments are those for which separate financial information is available and regular evaluation by the s management is being performed in order to decide how resources are allocated among the Group. The Group mainly provides global logistics services. In order to provide its services over a large region, the regional headquarters which are located in Japan, U.S.A., Netherlands, Hong Kong, and Singapore control the group companies in Japan, Americas, Europe, East Asia, and South Asia and Oceania, respectively. Thus, the Group s reportable operating segments are based on geographical service providing structures, which consist of five regions: Japan, Americas, Europe, East Asia, and South Asia and Oceania. 2. Methods of measurement for the amounts of sales, profit (loss), assets, liabilities, and other items for each reportable segment The accounting policies of each reportable segment are consistent with those disclosed in Note 2, Summary of Significant Accounting Policies. about sales, profit (loss), assets, liabilities, and other items is as follows. Reportable Segment 2017 South Asia and Oceania Total Reconciliation Consolidated Total Japan Americas Europe East Asia Sales Sales to external customers 80,718 90,924 90,969 87,850 88, , ,141 Intersegment sales/transfers 2,098 5,049 2,972 3,578 1,972 15,669 (15,669) Total 82,816 95,973 93,941 91,428 90, ,810 (15,669) 439,141 Segment profit (loss) (1,850) (505) 691 1,166 4,817 4,319 (95) 4,224 Segment assets 61,657 33,944 43,293 36,078 70, ,682 (40,430) 205,252 Other: Depreciation , ,176 5,430 5,430 Amortization of goodwill Investments in unconsolidated subsidiaries and affiliate companies accounted for by the equity method * ,072 Increase in property, plant and equipment and intangible assets 1,328 1, ,861 6,696 6, Annual Report 62

25 Reportable Segment 2016 South Asia and Oceania Total Reconciliation Consolidated Total Japan Americas Europe East Asia Sales Sales to external customers 81, , ,744 80,153 91, , ,816 Intersegment sales/transfers 2,012 4,497 2,759 5,261 2,075 16,604 (16,604) Total 83, , ,503 85,414 93, ,420 (16,604) 469,816 Segment profit (loss) (60) ,395 6,248 9,163 (106) 9,057 Segment assets 58,626 32,108 40,442 28,783 66, ,861 (26,452) 200,409 Other: Depreciation , ,388 6,254 6,254 Amortization of goodwill Investments in unconsolidated subsidiaries and affiliate companies accounted for by the equity method * ,220 Increase in property, plant and equipment and intangible assets ,913 5,478 5, Reportable Segment South Asia Japan Americas Europe East Asia and Oceania Total Reconciliation Consolidated Total Sales Sales to external customers $ 719,480 $ 810,446 $ 810,843 $ 783,042 $790,447 $3,914,258 $3,914,258 Intersegment sales/transfers 18,698 45,008 26,490 31,894 17, ,666 $ (139,666) Total 738, , , , ,023 4,053,924 (139,666) 3,914,258 Segment profit (loss) $ (16,491) $ (4,497) $ 6,159 $ 10,389 $ 42,938 $ 38,498 $ (845) $ 37,653 Segment assets $ 549,577 $ 302,561 $ 385,888 $ 321,580 $ 630,267 $2,189,873 $ (360,373) $1,829,500 Other: Depreciation 7,477 6,736 10,048 4,748 19,394 48,403 48,403 Amortization of goodwill 1, , ,379 Investments in unconsolidated subsidiaries and affiliate companies accounted for by the equity method *1 1,658 3,911 5,569 3,984 9,553 Increase in property, plant and equipment and intangible assets 11,835 14,212 6,529 1,602 25,506 59,684 59, Annual Report 63

26 Notes: 1. The breakdown for the reconciliation of each item for the years ended March 31, 2017 and 2016, is as follows: Sales: Elimination of intersegment transactions (15,669) (16,604) $ (139,666) Total (15,669) (16,604) $ (139,666) Segment profit: Elimination of intersegment transactions Amortization of goodwill (96) (108) $ (858) Others Total (95) (106) $ (845) Segment asset: Elimination of intersegment receivables and payables (22,047) (11,528) $ (196,512) Elimination of intersegment investments and equity accounts (19,863) (19,826) (177,044) Common assets *2 1,564 4,988 13,939 Others (84) (86) (756) Total (40,430) (26,452) $ (360,373) *1: The reconciliation column for investments in unconsolidated subsidiaries and affiliated companies accounted for by the equity method contains investments which are not attributable to any reportable segment. *2: The common assets mainly consisted of cash and deposits and investment securities. 2. Segment profit (loss) is reconciled to operating income in the consolidated statement of income Annual Report 64

27 Related information 1. about services The Group has omitted information about services as of March 31, 2017 and 2016, as sales to external customers in air and sea cargo is over 90% of consolidated sales. 2. about geographical areas (1) Sales 2017 Japan Americas Europe East Asia South Asia and Oceania Others Total U.S.A. China 79,737 91,243 83,789 91,073 88,115 75,255 88, , Japan Americas Europe East Asia South Asia and Oceania Others Total U.S.A. China 80, , , ,951 80,426 74,337 91, , Japan Americas Europe East Asia South Asia and Oceania Others Total U.S.A. China $ 710,736 $ 813,289 $ 746,853 $ 811,772 $ 785,411 $ 670,784 $ 793,045 $ 5 $ 3,914,258 Notes: (1) Sales are classified by country or region based on the location of customers. (2) Hong Kong is included in China Annual Report 65

28 (2) Property, plant and equipment 2017 Japan Americas Europe East Asia South Asia and Oceania Total U.S.A. Thailand Malaysia 7,181 9,201 7,862 10,728 2,065 22,801 10,318 4,980 51, Japan Americas Europe East Asia South Asia and Oceania Total U.S.A. Thailand Malaysia 8,737 8,443 7,863 11,843 2,205 22,665 10,031 5,687 53, Japan Americas Europe East Asia South Asia and Oceania Total U.S.A. Thailand Malaysia $ 64,012 $ 82,014 $ 70,077 $ 95,626 $ 18,403 $ 203,233 $ 91,972 $ 44,393 $ 463,288 (3) about major customers The Group has omitted information about major customers, as sales to any particular customer is not over 10% of consolidated sales at March 31, 2017 and (4) about loss on impairment of fixed assets 2017 Japan Americas Europe East Asia South Asia and Oceania Total 1,439 1, Japan Americas Europe East Asia South Asia and Oceania Total 1,003 1, Japan Americas Europe East Asia South Asia and Oceania Total $ 12,829 $ 12, Annual Report 66

29 (5) about balance of goodwill 2017 South Asia Elimination Japan Americas Europe East Asia and Oceania / Corporate Total Goodwill at March 31, , , South Asia Elimination Japan Americas Europe East Asia and Oceania / Corporate Total Goodwill at March 31, , , South Asia Elimination Japan Americas Europe East Asia and Oceania / Corporate Total Goodwill at March 31, 2017 $11,278 $ 3,321 $3,522 $ 2,395 $20, Annual Report 67

30 16. PER SHARE INFORMATION Per share information for the years ended March 31, 2017 and 2016, is summarized as follows: Yen Net assets per share 1, , $ Basic net income (loss) per share (59.54 ) (0.531 ) Diluted net income per share is not presented since net loss per share was recorded for the year ended March 31, 2017 and there were no securities with a dilutive effect for the years ended March 31, 2017 and Per share information is computed based on the following: Net income (loss) attributable to owners of the parent (2,511) 2,699 $ (22,378) Net income (loss) attributable to owners of the parent not subject to distribution to common shareholders Net income (loss) attributable to owners of the parent subject to current and future distribution to common stock (2,511) 2,699 (22,378) Outstanding Number of Shares of Common Stock Weighted-average shares for the period 42,169,022 42,168, Annual Report 68

31 17. RELATED PARTY TRANSACTIONS (1) The transaction between the and related parties There were no significant transactions between the and related parties for the year ended March 31, Major transactions between the and related parties for the year ended March 31, 2017 are as follows: For the year ended March 31, 2017 Transaction for the Year Balance at end of Year Type of Related Party Name Address Amount of Capital Nature of Ownership Interest (%) Relationship Description of the Transactions Millions of Yen Account Name Millions of Yen Parent company Nippon Yusen Kabushiki Kaisha Chiyoda-ku, Tokyo 144,319 million Ocean transportation business Owned Direct Indirect 0.06 Transfer of funds Transfer of funds 3,043 27,120 Receipt of Interest 1 9 Other current assets (CMS deposits) Other current assets (Interest receivable) 3,750 33, Notes: policy on terms and conditions Interest on loans and transfer of funds are decided in consideration of the market rate. The transaction amount in yen for transferring funds is calculated as the average of the period Annual Report 69

32 (2) The transaction between the Group and related parties Major transactions between the Group and related parties for the years ended March 31, 2017 and 2016 are as follows: For the year ended March 31, 2017 Type of Related Party Name Address Subsidiary of a common parent Subsidiary of a common parent NYK INTERNATIONAL PLC NYK INTERNATIONAL (USA) INC. U.K. U.S.A. Amount of Capital $ 32,285 thousand $ 2,161 thousand Nature of Ownership Interest (%) Relationship Finance Financing Finance Financing Description of the Transactions Transaction for the Year Millions of Yen Transfer of funds 1,318 11,748 Payment of interest 9 84 Transfer of funds 809 7,207 Payment of interest 5 46 Account Name Other current liabilities (CMS deposits) Other current liabilities (accrued interest payable) Other current liabilities (CMS deposits) Other current liabilities (accrued interest payable) Balance at end of Year Millions of Yen 530 4, , For the year ended March 31, 2016 Type of Related Party Name Address Subsidiary of a common parent Subsidiary of a common parent NYK INTERNATIONAL PLC NYK INTERNATIONAL (USA) INC. U.K. U.S.A. Amount of Capital $ 32,285 thousand $ 2,161 thousand Nature of Ownership Interest (%) Relationship Finance Financing Finance Financing Description of the Transactions Transaction for the Year Millions of Yen Transfer of funds 2,252 19,982 Loan (net amount) Payment of interest (1,104) (9,796) Transfer of funds 1,914 16,985 Payment of interest Account Name Other current liabilities (CMS deposits) Current portion of long-term debt Other current liabilities (accrued interest payable) Other current liabilities (CMS deposits) Other current liabilities (accrued interest payable) Balance at end of Year Millions of Yen 623 5, Notes: policy on terms and conditions Interest on loans and transfer of funds are decided in consideration of the market rate. The transaction amount in yen for transferring funds is calculated as the average of the period. about the parent company Nippon Yusen Kabushiki Kaisha (Listed on the Tokyo Stock Exchange and Nagoya Stock Exchange) 2017 Annual Report 70

33 18. SUBSEQUENT EVENT The made an appropriation of retained earnings, proposed by the board of directors and approved by shareholders at the general meeting on June 23, 2017, as follows: Independent Auditor s Report Cash dividends ( 9 ($0.08) per share) 380 $ 3, Annual Report 71