Summary of Consolidated Financial Results for the 1st quarter ending of the fiscal year June 30, 2019 [Based on IFRS]
November 9, 2018
Company name: ZERO CO., LTD.
Stock code:
9028
URL: http://www.zero-group.co.jp/
Representative:
President & CEO
Takeo Kitamura
Inquiries:
Director and Manager of Group Strategies Headquarters Toshihiro Takahashi
Scheduled Date of Submission of Quarterly Report:
November 12, 2018
Scheduled date to commence dividend payments:
Preparation of supplementary material on quarterly financial results:
No
Holding of quarterly financial results meeting:No

Stock Exchange Listing: Tokyo

TEL 044-520-0106(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the 1st quarter ending of the fiscal year June 30, 2019 (From July 1, 2018 to September 30, 2018)(1) Consolidated operating results (cumulative)

Sales revenue

1Q FY2018
1Q FY2017

Millions of yen
20,93919,348Operating income
%
8.2
4.4

Millions of yen
351
1,133

Basic quarterly earnings per share

Profit before tax

%
∆69.0
∆5.7

Millions of yen
344
1,131

%
∆69.5
∆8.7

Quarterly income
Millions of yen
21
658

Millions of yen
23659% Millions of yen
∆96.5
∆37
∆4.2
710

%
17.0

Diluted quarterly earnings per share

Yen
1.39
39.72

1Q FY2018
1Q FY2017

%
∆96.8
∆4.3

(Percentages indicate year-on-year changes)
Profit attributable toTotal comprehensive
owners of parent
income of the quartercompany

Yen
1.38
39.69

(2) Consolidated financial position
Total assets
Millions of yen
37,49738,2901Q FY2018
FY2017

Equity attributable to owners ofparent company

Total capitalMillions of yen
21,795
22,119Equity ratio attributable to ownersof parent company

Millions of yen
21,785
22,108

%
58.1
57.7

2. Cash dividends
1st quarter-end
Yen
FY2017FY2018Annual dividends per share
3rd quarter-end

2nd quarter-end-----

FY2018 (forecast)

Yen
15.00
15.00

Fiscal year-end

Yen

Total

---

Yen
17.10

Yen
32.10

---

18.10

33.10

(Note) Amendment from the most recently announced dividend forecast: No
3. Forecast of consolidated financial results for the year ending June 30, 2019 (From July 1, 2018 to June 30, 2019)
Sales revenue
Full year

Millions of yen
84,000Operating income%
3.2

Millions of yen
4,300(Note) Revisions from the most recently released business forecast: No(Percentages indicate year-on-year changes)
Profit attributable to owners
Basic earnings per shareof parent company

Profit before tax%
4.5

Millions of yen
4,280

%
4.5

Millions of yen
2,200

%
3.3

Yen
132.56

(Note)(1) Changes in significant subsidiary companies during the current quarter (Changes in the specific subsidiary companies following changes in the scope of
consolidation): No
New  Co. (Company name),
Exclusions  Co. (Company name)(2) Changes in accounting policies, changes in accounting estimates Changes in the accounting policies required by IFRS Changes in the accounting policies due to other reasons Changes in the accounting estimates(3) Number of issued shares (common shares)
 Total number of issued shares at the end of theperiod (including treasury shares)
 Number of treasury shares at the end of the period
 Average number of shares during the period(total up to this quarter)

:
:
:

Yes
No
No

1Q FY2018

17,560,242 shares

FY2017

17,560,242 shares

1Q FY2018
1Q FY2018

1,030,367 shares
16,626,875 shares

FY2017
1Q FY2017

1,030,367 shares
16,595,875 shares

Earnings summary is not within the scope of the quarterly review by a certified public accountant or auditor
Explanation of the proper use of financial results forecast and other notes
The earnings forecast, and other forward-looking statements herein are based on the information currently available to the Company and certain assumptions that the Company
considers reasonable. The actual results may differ significantly from these forecasts due to a wide range of factors such as economic status of the major domestic andinternational markets or exchange rates fluctuation.

o Attached Documents – Table of Contents
1.

2.

Regular information regarding the settlement of the current quarter …………………………………………………….

2(1) Explanation regarding the operating results …………………………………………………………………………………….

2(2) Explanation regarding the financial status ……………………………………………………………………………………….

3(3) Explanation regarding future forecast information such as consolidated performance forecast ……………..

4

Summarized quarterly consolidated statement and the main notes ……………………………………………………….

5(1) Summarized quarterly consolidated statement of financial position ……………………………………………………

5(2) Summarized quarterly consolidated profit and loss statement …………………………………………………………..

7(3) Summarized quarterly consolidated statement of comprehensive income …………………………………………..

8(4) Summarized quarterly consolidated statement of changes in equity …………………………………………………..

9(5) Summarized quarterly consolidated statement of cash flow ……………………………………………………………...

10(6) Notes regarding the summarized quarterly consolidated statement …………………………………………………..

12(Notes regarding the premise of a going concern) …………………………………………………………………………..

12(Changes in accounting policy) …………………………………………………………………………………………………..

12(Segment information) ………………………………………………………………………………………………………………….

13

－

1 －

1.

Regular information regarding the settlement of the current quarter(1) Explanation regarding the operating results
Japan’s economy during the consolidated cumulative period of the first quarter continued to recover gradually;
personal consumption is also being improved with steady employment and income environment, but things
remains unclear due to the uncertainty of the foreign economic situation, beginning with the trade problem.
In the automobile industry, the number of new vehicles sold has increased favorably at 101.0% compared tothe consolidated cumulative period of the same quarter from the previous year (hereinafter referred to as thesame quarter from the previous year); because of the sales increase of the new light vehicle model; the numberof registered used cars has remained the same compared to the same quarter from the previous year.
While promoting strategic and flexible sales activity and business operations in response to changes in themarket environment in each of the business segments, our group is working to develop new businesses focusing
on next generation mobility, increasing foreign visitors to Japan, and the growth of the foreign economy toprepare for the shrinkage of the domestic automobile market. Also, we are continuing our efforts to strengthengroup synergy, transport reforms, efforts to strengthen compliance, and reform the work style; however, thebusiness environment is severe due to the insufficient number of drivers caused by shortages of labor supply anddemand in the logistics industry as well as the increase in wages and recruitment cost, high fuel prices, and theincreased cost relative to compliance response such as compliance vehicle restrictions and street handling.
The business results of our group during the consolidated cumulative period of the first quarter are as follows:sales revenue of 20.939 billion yen (108.2% compared to the same quarter from the previous year) andoperating profit of 351 million yen (31.0% compared to the same quarter from the previous year). Also, theearnings before taxes were 344 million yen (30.5% compared to the same quarter from the previous year), andthe earnings of the quarter attributable to the owners of the parent company were 23 million yen (3.5%compared to the same quarter from the previous year).
Number of units related to domestic distribution of automobiles
July of 2017 to
September of 2017

Domestic
Number of newvehicles soldDomestic
manufacturer(out of this, Nissan
Motor)
Foreign manufacturer
Total number of newvehicles soldNumber of used
vehicles registered
Registered vehicles
Light vehicles
Total number of used
vehicles registered
Number of vehicles
permanently deleted

July of 2018 toSeptember of 2018

Compared to theprevious year*1

1,201,117

1,214,818

101.1%*1(152,344)(154,836)（101.6%)*2

76,92676,312

99.2%

1,278,043

1,291,130

101.0%*3

917,190

898,70798.0%*4

692,570

710,988

102.7%

1,609,760

1,609,695

100.0%

45,722

44,18996.6%

July of 2017 to September of
2017

July of 2018 to September of
2018

Compared to theprevious year*1

1,193,933

1,143,939

95.8%

*5

345,781358,472

103.7%*3

ExportNew vehicles ofdomestic
manufacturers
Used vehicles(registered vehicles)

Units: vehicles*1 Calculated from Japan Automobile Industry Association statistics *2 Calculated from Japan Automobile Importers’ Association
statistics *3 Calculated from Japan Automobile Dealers Association statistics *4 Calculated from Japan Mini Vehicles Association
statistics *5 Trial calculated from the number of export deleted registered vehicles in the Japan Automobile Dealers Association
statistics－

2 －The segment business results are as follows.
1) Automobile related businesses
Vehicle transportation of the core business, somewhat decreased due to natural disasters despite advancing
sales activities in response to the oligopolisation of used car sales by new car dealers and major used car dealers
toward expanding transactions of the new vehicle and used vehicle transportation in Japan; exports of second
hand cars increased due to a review of marketing strategies and achievement of system reconstruction, andsales in the automobile-related business as a whole also increased.
With the completion to establish regional block companies, restructuring of the transportation system has
been accelerated including subsidiaries and cooperating companies; we are working to achieve optimal operationof the distribution network throughout Japan and are striving for thorough cost management. Meanwhile, profits
for automobile-related businesses have decreased overall due to reinforcement of transportation strength inpreparation for increased taxes under circumstances such as the decreased load ratio caused by the reinforced
response to vehicle restriction laws, promoting efforts to reform the work style to reduce total working hours,
increased cost accompanying the relocation of bases to construct an effective distribution system, increasedlabor costs / employment costs caused by insufficient number of drivers, increased fuel prices, increased numberof material vehicles, and increased vehicle costs to handle deterioration.
As a result, the sales revenue for automobile related businesses overall was 14.986 billion yen(107.7% compared to the same quarter from the previous year), and the segment revenue was 580 million
yen (47.9% compared to the same quarter from the previous year).
2) Human resource businessWith the labor demand being tightened accompanying the economic recovery, the difficulty in employment inlarge cities and the increase in personnel expenses have become serious matters; therefore, the regional shift fromlarge cities and reinforcement of the sales system for each region has been promoted by our group, and the
product portfolio has been reviewed strategically and continuously. In addition to the fact that shuttle contracts anddriver dispatch have transitioned steadily, participation in the airport field has increased revenues and profits.
As a result, the sales revenue for the overall human resource business was 4.579 billion yen (113.2% comparedto the same quarter from the previous year), and the segment revenue was 155 million yen (112.5% compared tothe same quarter from the previous year).
3) General cargo business
The revenue of transportation / warehouse business has increased with the implementation of cargo that was
shifted to land transportation due to the disaster in the West Japan region in addition to the expansion oftransactions with existing customers, but the revenue for the cargo handling business has decreased due to the
reduction in automobile cargo and coal cargo, and the revenue for the general cargo business has decreased
overall. In addition to the decreased revenue in the cargo handling business, the initial investment in the CKD
business into which we entered has caused decreased revenue.
As a result, the sales revenue of the overall general cargo business was 1.373 billion yen (99.1% compared tothe same quarter from the previous year), and the segment revenue was 173 million yen (68.7% compared tothe same quarter from the previous year).
Also, company expenses not included in the report segments above (expenses related to our company’s
management divisions) were calculated in the “adjustment amount” as indicated in “2. Summarized quarter
consolidated statement (segment information)” and were 558 million yen.
(2) Explanation regarding financial status
1) Status of assets, debts, and capital(Assets)
Liquid assets decreased 966 million yen (5.4%) compared to the end of the previous accounting
period of consolidation and were 16.781 billion yen.
This is mainly because the cash and cash equivalents decreased 1.324 billion yen even withinventory asset increasing by 335 million yen.
Non-liquid assets increased 173 million yen (0.8%) compared to the end of the previous accounting
period of consolidation and were 20.715 billion yen.
This is mainly because tangible property such as vehicles increased 240 million yen.
As a result, total assets decreased 792 million yen (2.1%) compared to the previous accounting
period of consolidation and were 37.497 billion yen.
(Liabilities)
Liquid liabilities have decreased 257 million yen (2.2%) compared to the previous accounting
period of consolidation and were 11.430 billion yen.
This is mainly due to the unpaid corporate income tax decreasing by 891 million yen even with theloans increasing by 553 million yen.
Non-liquid liabilities have decreased 211 million yen (4.7%) compared to the previous accounting
period of consolidation and were 4.271 billion yen.
As a result, total liabilities have decreased 468 million yen (2.9%) compared to the previous
accounting period of consolidation and were 15.72 billion yen.
－

3 －(Equity)
Total equity decreased 324 million yen (1.5%) compared to the previous accounting period of
consolidation and was 21.795 billion yen.
This is mainly because of the decrease of 245 million yen in the retained earnings due to dividendsof surplus, etc.
2) Cash flow status
Cash and cash equivalents (hereinafter referred to as “funds”) at the end of the consolidated
accounting period of the first quarter decreased 1.324 billion yen compared to the previous consolidated
accounting fiscal year and were 3.949 billion yen.
Each cash flow status category during the consolidated cumulative period of the first quarter andtheir causes is as follows.
(Cash flow through sales activities)
Funds used as a result of sales activities were 1.010 billion yen (there was an income of 335 million
yen during the same period of the previous year).
The main itemization for income was 420 million yen for depreciation and amortization expenses,
and the main itemization for expenses was 1.230 billion yen of the payment amount for the corporate
income tax.
(Cashflow through investment activities)
Funds used as a result of investment activities were 405 million yen (there was an expense of
1.175 billion yen during the same period of the previous year).
The main itemization for expenses was 387 million due to the acquisition of tangible fixed assets
and investment property and 77 million yen due to the acquisition of intangible assets.
(Cashflow through financial activities)
The funds obtained through financial activities was 92 million yen (there was an expense of
696 million yen during the same period of the previous year).
The main itemization for income was an increased amount of 600 million yen from short term loans,and the main itemization for expenses was the payment amount of 282 million for dividends.
(3) Explanation regarding the future forecast information such as consolidated business forecast
No revision has been made from the consolidated business forecast published on August 10, 2018.
The result and business circumstances during the consolidated cumulative period of the first quarter, wasroughly as expected. The second half of the fiscal year, it will be expected last minute demand for new car sales’
transportation before consumption tax raise and accompanying used car transportation. To meet the demand, thepreparation cost increased in the first half, it is expected that this fiscal year profit has tendency to move to thesecond half of the fiscal year.

－

4 －

2.

Summarized quarter consolidated statements and the main notes(1) Summarized quarterly consolidated statement of financial position(Units: million yen)
End of the previous
consolidated accounting year
(June 30, 2018)

End of the consolidated
accounting period of the firstquarter (September 30, 2018)

Cash and cash equivalents

5,273

3,949

Operating receivables and other credits

11,160

11,224Inventory assets

512

847

Other financial assets

131

58

Other liquid assets

670

702

17,748

16,781

Tangible fixed assets

10,827

11,067

Goodwill and intangible assets

2,865

2,883

Investment property

3,511

3,477

964

953

Other financial assets

1,943

1,856

Other illiquid assets

122

124

Deferred tax assets

307

352

Total illiquid assets

20,542

20,715

Total assets

38,29037,497

AssetsLiquid assets

Total liquid assets
Illiquid assets

Investment accounting processed with equity
method－5 －(Units: million yen)
End of the previous
consolidated accounting year
(June 30, 2018)

End of the consolidated
accounting period of the firstquarter (September 30, 2018)

6,436

6,674

Loans

702

1,255

Other financial liabilities

723

709

Unpaid corporate income tax, etc.

1,296

404

Other liquid liabilities

2,530

2,387

11,687

11,430262

230

Other financial liabilities

1,849

1,815

Debts related to retirement benefits

1,838

1,689

Other illiquid liabilities

313

338

Deferred tax liabilities

219

197

Total illiquid liabilities

4,483

4,271

Total liabilities

16,17015,702

Capital

3,390

3,390

Capital surplus

3,305

3,320

Treasury stock

△687

△687

416

325

15,682

15,436

22,10821,785

Non-controlling interest

11

9

Total Equity

22,11921,795

Total liabilities and equity

38,29037,497

Liabilities and Equity
Liabilities
Liquid liabilities
Trade liability and other payable

Total liquid liabilities
Illiquid liabilities
Loans

EquityOther component of funds
Earned surplus
Total equity belonging to the owners of theparent company

－

6 －

(2)

Summarized quarter consolidated profit and loss statement(Units: million yen)

Consolidated cumulative period Consolidated cumulative period
for the previous first quarterof this first quarter(from July 1, 2017 to(from July 1, 2018 toSeptember 30, 2017)
September 30, 2018)
Sales revenue

19,34820,939

Cost of sales△16,172△18,537

3,175

2,401

△2,091△2,277

Other earnings

61

239

Other expenses

△11

△12

1,133

351

16

2

△19

△13

1

4

1,131

344

△472

△323

658

21

Owners of the parent company

659

23

Non-controlling

△0

△1

658

21

Basic profits of the quarter of each share (yen)

39.72

1.39

Profits of the quarter for each share after
dilution (yen)

39.69

1.38

Profit on sales
Selling costs and administrative costs

Operating profit
Financial profit
Financial expenses
Investment gain / loss through equity method
Earnings before tax
Corporate income tax expenses
Profits of the quarter

Attribution of the profits of the quarter:interestProfits of the quarter

Profits of the quarter for each share

－

7 －

(3)

Summarized quarter consolidated statement of comprehensive income(Units: million yen)
Consolidated cumulative
Consolidated cumulative period
period for the previous firstof this first quarter
quarter (from July 1, 2017 to(from July 1, 2018 toSeptember 30, 2017)
September 30, 2018)

Profits of the quarter

658

21

Remeasurement of defined benefit system

032

Financial assets measured by fair value
through other comprehensive income

－

△76

0

△44

40

－

10

△14

50

△14

51

△59

710

△37

Owners of the parent company

711

△36

Non-controlling interest△0△1Comprehensive income of the quarter

710

△37

Other comprehensive income
Items not transferring over to net income andloss

Total of the items not transferring over to net
income and loss
Items which may be transferred over to net
income and loss
Fluctuation of fair value of the assets which
can be sold
Other comprehensive income equity ofaffiliated company accounted for by theequity method
Total of the items which may be transferredover to net income and loss
Other comprehensive income after tax
deduction
Comprehensive income of the quarter

Attribution of the comprehensive income of thequarter:

－

8 －

(4)

Summarized quarter consolidated statement of changes in equity
Consolidated accounting period of the previous first quarter (from July 1, 2017 to September 30, 2017)(Units: million yen)
Equity attributing to the owners of the parent company
Other components of funds

Balance on July 1, 2017

CapitalCapitalsurplusTreasury
stock

3,390

3,271

△687

Fluctuationof fair
value offinancialassetswhich canbe sold

RemeasurementofdefinedbenefitsystemTotal othercomponentsof funds

△81

364

-

283

14,403

20,661

11

20,672

-

659

659

△0

658

Profits of the quarter
Other comprehensive income
Comprehensive income ofthe quarter--

Total equity
attributing Non-controlling Total equity
interest
to theowners ofthe parent
company

Conversion
differenceof businessactivities
overseas-

Earnedsurplus

10

40

0

51

10

40

0

51

659

711

-

△609

△609

△609
14

Dividends of the surplus

51

Share-based paymenttransactions, etc.

14

-

14

Transactions with Noncontrolling interest, etc.

△1

-

△1

Transfer from other capitalcomponent to earned surplus

△0

△0

0

-

51
710

△0

1

-

Total of transactions, etc.,with the owners

-

12

-

-

-

△0

△0

△609

△597

1

△595

Balance on September 30, 2017

3,390

3,284

△687

△70

404

-

334

14,453

20,774

13

20,787

Consolidated accounting period of the this first quarter (from July 1, 2018 to September 30, 2018)(Units: million yen)
Equity attributing to the owners of the parent company
Other components of funds

Balance on July 1, 2018
Cumulative effectamount due to changeof accounting method
Carrying amount withthechangeinaccounting
methodreflected

CapitalCapitalsurplusTreasury
stock

3,390

3,305

△687

3,390

3,305

△687

Conversion
differenceof businessactivities
overseas

Fluctuationof fair valueof financial
assetswhich canbe sold

Financialassetsmeasuredby fairvaluethroughothercomprehensive
profits

Remeasurement ofdefinedbenefitsystemTotal othercomponentsof funds

△47

464

-

-

416

15,682

22,108

△464

464

-

△18

△18

-

464

416

15,66422,08911

22,101

-

23

23

△1

21

△47

-

Profits of the quarter
Other
comprehensive
incomeComprehensive
income of thequarter

△14

-

-

-

△14

-

Balance on
September 30, 201822,119
△18

32

△59

△76

32

△59

23

△36

-

△282

△282

△282

14

14

-

14

△59

-

Transfer from othercapital component toearned surplus
Totaltransactions, etc.
with the owners

11

△76

Dividends of surplus
Share-based
paymenttransactions, etc.

Total
equity Non-controlling Total
attributinginterest
equityEarnedto thesurplusowners ofthe parent
company

△32

△32

32

-

△59

△1

△37

-

14

-

-

-

-

△32

△32

△250

△268

-

△268

3,390

3,320

△687

△62

-

387

-

325

15,436

21,785

921,795－9 －(5) Summarized quarter consolidated cash flow statements(Units: million yen)

Consolidated cumulative Consolidated cumulative period
period for the previous firstof this first quarter
quarter (from July 1, 2017 to(from July 1, 2018 toSeptember 30, 2017)
September 30, 2018)
Cash flow through operating activities
Profits of the quarter

658

21

Depreciation and amortization costs

300

420

Interest earned and dividend△6△5Interest expense

15

13

Investment gain / loss through equity method△1△4Corporate income tax expenses

472

323

Increase / decrease of operating receivables(△ is an increase)

121

△25

△197

△335

Increase / decrease of trade liability(△ is a decrease)

80

168

Increase / decrease of debt related toretirement benefits (△ is a decrease)

△57

△96

Other

△222

△252

Subtotal

1,163

227

6

5

Interest payment amount

△15

△13

Payment amount of corporate income tax△820△1,230335△1,010△401△387

Income through the sales of tangible fixed
assets and investment properties

50

Expense through acquisition of intangible
assets△79△77

Expense through loans△2△1

Income through collection of loans

134

Expense through transfer of business

△697

－

Other

△13

55

△1,175△405

Increase / decrease of inventory assets(△ is an increase)

Amount of interest and dividend received

Cash flow through operating activities

Cash flow through investment activities
Expenses through acquisition of tangible fixed
assets and investment properties

Cash flow through investment activities

－

10 －

(Units: million yen)
Consolidated cumulative Consolidated cumulative period
period for the previous firstof this first quarter
quarter (from July 1, 2017 to(from July 1, 2018 toSeptember 30, 2017)
September 30, 2018)
Cash flow financial activities
Net increase or decrease of short-term loans (△is a decrease)

300

600

Expense through repayment of long-term loans

△236

△78

Payment of finance lease debts

△150

△146

Payment amount of dividend

△609

△282

Cash flow through financial activities

△696

92

Increase / decrease of cash and cash equivalents(△ is a decrease)△1,537△1,324

Carrying amount of cash and cash equivalents

8,101

5,273

Balance of cash and cash equivalents at the endof the quarter

6,564

3,949

－

11 －

(6) Notes related to summarized quarter consolidated financial statements(Notes regarding the premise of a going concern)
There are no applicable matters.
(Changes in company policies)
The important company policies applicable to this consolidated quarterly financial statement summary will be
the same company policies applicable to the consolidated financial statements of the previous consolidated
accounting year excluding the below.
Our group has applied the following standards starting this first quarter of the consolidated accounting period.
Standard and interpretation guideSummary
Revisions regarding recognition and measurementof financial assets / financial debts, depletion of

IFRS No. 9

Financial products

IFRS No. 15

Profits generated from contracts
with clientsfinancial assets, accounting standards for generichedge
Revisions of accounting process regarding profit
recognition(Application of IFRS No. 9 “financial products”)
Our group has applied IFRS No. 9 “financial products” (hereinafter referred to as “IFRS No. 9”) starting the firstquarter of this consolidated accounting period. At our group, retrospective restatement for the previous
consolidated accounting year as a transitional measure is not conducted using IAS No.39 financial products; wehave implemented a method which recognizes the cumulative effects due to the application of this standard on
the first application date.
At our group, the classification of financial assets has been changed based on the facts and status existing on
the first application date due to the application of IFRS No. 9.
Our group has classified non-derivative financial assets as financial assets measured at fair value throughfinancial assets, profit or loss or other comprehensive income measured with amortized cost. Also, nonderivative financial debts are classified as financial debts measured by amortized cost.
All financial assets are classified as financial assets measured by amortized cost if they satisfy the below
requirements.
Are held in a business model for the purpose of holding financial assets to recover contractual cash flows
Cash flows which are only payment of interest on principal and principal balances, generated on the designatedday based on the contract requirements of the financial asset.
Financial assets aside from the financial assets measured by amortized cost are classified as financial assets
measured by fair value. Equity instruments measured by fair value are under the irrevocable option in which
the fluctuation after the fair value is displayed in other comprehensive income and are classified as equity
instruments measured by fair value through other comprehensive income, excluding equity instruments held
through the purpose of selling which must be measured by fair value through net profit / loss.
Also, in IFRS No. 9, the depletion of financial assets will change from “generation of loss model” to “forecasted
credit loss model” of IAS No. 39 “Financial products: recognition and measurement”. Our group conducts anevaluation at the end of the consolidated accounting period on whether the credit risk regarding the financial
assets has increased significantly from the time of initial recognition; if the credit risk has not increased
significantly from the time of initial recognition, the amount equivalent to 12 months of forecast credit loss isrecognized as the allowance for bad debts. On the other hand, if the credit risk has increased significantly fromthe time of initial recognition, the amount equivalent to the forecasted credit loss for the whole period isrecognized as the allowance for bad debts. However, the allowance for bad debts for operating receivables notcontaining major financial factors is always recognized as the amount equivalent to the forecasted credit loss
for the entire period regardless of the presence of significant increase in credit risk from the time of initialrecognition. The forecasted credit loss is estimated through a method which reflects the changes in credit
information, past due information of credit, etc.
Due to the application of this standard, compared to the case in which the prior accounting standard is applied,the operating receivables and other credit have decreased 21 million yen, deferred tax asset has increased 3
million yen, and the earned surplus has decreased 18 million yen at the beginning of the first quarter of thisconsolidated accounting period on the summary of the consolidated quarterly statement of financial position.
(Application of IFRS No. 15 “Profit generated from contracts with clients”)
Our group has applied IFRS No. 15 “Profits generated from contracts with clients” (published in May of 2014)
and “Clarification of IFRS No. 15” (published in April of 2016) (hereinafter collectively referred to as “IFRS No.
15”) starting the first quarter of this consolidated accounting period. Accompanying the application of IFRS No.
15, profits are recognized based on the 5-step approach indicated below.
Step 1: Identify contracts with clients
Step 2: Identify the performance obligation of the contract

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Step 3: Calculate the transaction amount
Step 4: Distribute the transaction price to the performance obligation in the contract
Step 5: Recognize the profits when a business satisfies the performance obligation
The profits provided from the main duties of our group are calculated from the transportation of automobiles in
automobile related businesses, temporary employee placement in human resource business, cargo handling in
general cargo business, and transportation of general consumer goods. In the case it is defined in the contractthat the performance obligation is to be satisfied at one point through delivery of products, goods in custody,
etc., the profits are recognized when the task is complete and the products and goods in custody, etc. aredelivered. In the case in which provision of services is required throughout a certain period of time, profits arerecognized in consideration of the duration.
Also, there are no major effects on our group’s business results or financial status through the application ofthese standards.
(Segment information)
The segment information of our group is as follows.
Consolidated cumulative period of the previous first quarter (from July 1, 2017 to September 30, 2017)(Units: million yen)

Adjustment
amount(note)

Total amounton thesummarized
quarter
consolidate
financialstatements

19,348－19,348

100

334

△334

－

4,261

1,487

19,682△334

19,348

138

253

1,604

△471

1,133

Automobile
relatedbusinesses

Human
resourcebusinesses

Generalcargobusinesses

13,916

4,045

1,386

17

216

Total

13,933

Segment revenue (operating profit)

1,213

Total

Sales revenue
Sales revenue from externalcustomers
Sales revenue between segments(Note) The △471 million yen adjustment amount in the segment profits includes the company cost △471 million yen
and 0 million yen of transaction elimination between segments. The company cost is an expense related to
management division of our company not belonging to the reporting segment.
Consolidated cumulative period of this first quarter (from July 1, 2018 to September 30, 2018)(Units: million yen)

Adjustment
amount(note)

Total amounton thesummarized
quarter
consolidate
financialstatements

20,939－20,939

98

331

△331

－

4,804

1,472

21,270△331

20,939

155

173

910

△558

351

Automobile
relatedbusinesses

Human
resourcebusinesses

Generalcargobusinesses

14,986

4,579

1,373

8

225

Total

14,994

Segment revenue (operating profit)

580

Total

Sales revenue
Sales revenue from externalcustomers
Sales revenue between segments(Note) The △558 million yen adjustment amount in the segment profits includes the company cost △558 million yen
and 0 million yen of transaction elimination between segments. The company cost is an expense related to
management division of our company not belonging to the reporting segment.

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