Kintetsu World Ex : Announcement of the establishment of a joint venture in India

Announcement of the establishment of a joint venture in India

This is to announce that we will establish a joint venture in India with Gati Ltd. (hereinafter referred to as Gati), a distribution services company in India, as resolved at the board meeting held on February 13, 2012, as follows:
1. Reason for the Establishment of the Joint Venture
The KWE Group has carried out business operations, mainly in the field of international freight forwarding services. In July 1997, the Kintetsu World Express (India) Pvt. Ltd. (KWE India) in India was established. To further boost the volume of Indian cargo we handle on a global scale in future, we have decided to establish a company through joint investment with Gati, a major distribution services company in India.
Gati, established in 1989, provides a wide variety of distribution services, including logistics, international freight forwarding, vessel operations services, with domestic freight forwarding (truck, air, and railroad)/door-to-door delivery services as its core business. As for domestic freight forwarding services, the company provides high value-added delivery services India-wide, such as the fixed-delivery-time service, automated messaging service to send POD (Proof of Delivery) information to respective clients' terminal devices via GPS, and others. Gati has about
4,000 trucks in operation and more than 500 district offices in India.
This alliance, which will combine the KWE Group's global network and Gati's high-quality domestic distribution services, is expected to increase the handling volume in the Indian business on a global scale.
In the rapidly growing Indian market, the KWE Group, spearheaded by KWE India, will actively promote sales together with the joint venture, work to enhance its presence in the Indian distribution business, improve its global competitiveness, and expand the business.
2. Overview of the Joint Venture
(1) Company name Gati- Kintetsu Express Private Ltd. (2) Head Office To be determined
(3) Representative To be determined
(4) Description Domestic freight forwarding services
logistics (to be planned for business succession from Gati) (5) Capital To be determined
(6) Founded (Scheduled for) April 2012
(7) Investment ratio 70% by Gati, 30% by the KWE Group
(8) Investment amount of our group Approx. 2.7 billion INR (9) Fiscal year ends in June
3. Overview of the Joint Venture Partner
(1) Company name Gati Ltd. (listed in the Indian Stock Exchanges)
(2) Head Office 1-7-293, M.G.Road, Secunderabad - 500 003, India
(3) Representative Mahendra Agarwal / CEO
(4) Description Domestic freight forwarding services (truck, air, and railroad),
door-to-door delivery services, logistics, international freight forwarding, vessel operations services, etc.
(5) Capital 172.3 million INR
(6) Business performance for the latest business year (June 2011) Consolidated revenue 12,094million INR
Profit before tax 237 million INR (7) Founded 1989
(8) Number of employees Approx 3,500
(9) Relations with KWE
There is currently no capital, business and personal relationship to note.
4. Schedule
Board meeting resolution February 13, 2012
Joint venture agreement signing February 13, 2012
Joint venture establishment & Start of operation April 2012 (scheduled)
5. Future prospects
The establishment of the above joint venture will not affect the consolidated financial statements of our company for the financial year ending in March 2012.