Annual Report 2023
Year Ended March 31,2023

Profile

Seino
Ltd.
(“the
Company”)
began
SeinoHoldings
HoldingsCo.,
Co.,
Ltd.
(“the
Company”)
beganbusinessasatrucking
company
in
1930
and
was
business as a trucking company in 1930 and wasincorporatedinin1946.Based1946. Basedin theof Ogaki,incorporated
in thecitycityof Ogaki,
GifuGifu
Prefecture,wearealeading
trucking
company,
expandingPrefecture, we are a leading trucking company, expanding
in
in
step
with
the
growthoftheJapanese
economyand thestep with the growth of the Japanese economy and thedevelopmentofofthe
thenation’s
nation’s
extensive
expressway
network.
development
extensive
expressway
network.
OnOn
October
1,
2005,
the
Companytransferredits
October 1, 2005, the Company transferred its
transportationbusinessbusinessand
andotherotheroperations
a newtransportation
operations
to atonew
company
company—which has taken the original name Seino—which has taken the original name Seino Transportation Co.,
Transportation Co., Ltd.—and was renamed Seino
Ltd —and was renamed Seino Holdings Co., Ltd adopting a
Holdings Co., Ltd. a pure holding company structure.
pure holding company structure.
The SeinoGroupcurrentlyof thesubsidiaries
pure holdingand 14
company
Seino
Holdings,
58 consists
consolidated
companyengaged
Seino Holdings,
82 consolidated
subsidiaries
and 20affiliates
in transportation
services,
vehicle sales,affiliates
engagedintransportation
services,
vehiclesales,
merchandise sales, leasing for real estate services and othermerchandise sales, real estate leasing services and other services.
services.
In its mainstay
mainstay Transportation
In
TransportationServices
ServicesBusiness,business,thetheCompany
has
taken
steps
to
build
even
more
convenientlogistics
systems, allCompany has taken steps to build even more convenientlogistics
while adhering principle.
to its “customer-first”
the whilesystems,
adheringalltothe
its “customer-first”
principle.
Asyears,of March
31,to2011,
Seinoouroffersefficientfrom
In recentin orderaccelerate
evaluationtransportation
services
throughout
via its
634 domestic
serving as a specialgroupcargo
motorJapan
trucking
companytoterminals,
a fleetof 24,321
trucksand awetrucking
network
thatonserving as “thelogistics
company
Seino,”
have beenworkingaverages
5,000ourroutesdaily.
Overseas,Seino
has transferreditsfully utilizing
logistics
facilities,
as wellas boosting
our spaceinternational
forwarding
operations
toSchenker-SeinoCo.,efficiency and operational efficiency and achievingLtd.,a joint venturewith Furthermore,
Schenker AGwe
inhave beensemi-automation
withestablishedassistive robots.
working on resolving the issues of our customers based on
Company aims to bolster its
customized proposals making use of the functions of our entire
competitiveness by optimizing the synergies
group, and have been
strivingdomestic
to expandtransportation
our revenues throughof Seino’s
networkenhancing our logistics
infrastructure.
and Schenker’s global network and
The Seino Groupis committed
providing rapid services
cutting-edge
IT tosystems.
that deliver total customer
satisfaction
will
proceeddown
providing rapid
servicesandthat
deliver
total
the
“Road
to
Success”
tobecomeacustomer satisfaction and will proceed downhighlyprofitablecompany
throughthe “Road to Success” to become a highly
profitable company
initiatives
toinitiativesthroughto develop
a progressive
develop a progressive
businessthatbusiness modelthat model
will become
will becomethe
thestandard
standardforfor
next-generation
next-generationtransportation
business.
transportation
business.

Forward-looking Statements:
In this annual report, statements other than historicalfacts are forward-looking statements that reflect theplans and expectations of the Company. These
forward-looking statements involve risks, uncertainties
and other factors that may cause the Company’s
actual results and achievements to differ materiallyfrom those anticipated in these statements.

Contents
Contents
Financial Highlights
Financial
Highlights

11

To Our Shareholders,Shareholders,Customers
CustomersandandFriends
Friends

22

Special Feature
Expanding
Scope of Operations and Creating New Value 44
Review of Our
Operations
ExpandingOperations Scope and Creating New Value 66
Financial Review
Financial
Review

88

Six-year Summary
Six-year
Summary

99

Consolidated Balance
Consolidated
BalanceSheets
Sheets1010Consolidated Statements
Consolidated
StatementsofofIncome
Income111112Consolidated Statementsof Comprehensive
Income(Loss) 12
Consolidated
Statementsof Comprehensive
Income12Consolidated Statements
Consolidated
Statements ofofChanges
ChangesininNet
NetAssets
Assets 12
Consolidated Statements
Consolidated
StatementsofofCash
CashFlows
Flows

13
13

Notes toto Consolidated
ConsolidatedFinancial
FinancialStatements
Statements

14
14

Report of Independent
IndependentAuditors
Auditors

24
28

Seino Group
Group

25
32

Board of Directors(As of June28, 2023)
President

Yoshitaka Taguchi

Representative Director

Takao Taguchi

Directors

Yasuhisa Kotera
Hidemi Maruta
Nobuyuki Nozu

Outside Directors

Meyumi Yamada
Shintaro Takai
Yoichiro Ichimaru

Standing Statutory Auditors

Nobuhiko Ito
Osamu Katagiri

Outside Statutory Auditors

Eiji Kasamatsu
Hiroyuki Masuda

Seino Holdings Co., Ltd.

Financial Highlights

Operating revenue(Billions of Yen)

For the Years Ended March 31, 2023, 2022 and 2021

Thousands of
U.S. Dollars (Note)

Millions of Yen
CONSOLIDATED BASIS:
Operating revenue
Operating income
Profit before income taxes
Net income
Net income per share (yen)

2023

2022

2023

2021

¥ 631,508 ¥ 607,658 ¥ 592,046
27,546
24,561
28,502
28,34527,621
31,352
17,256
16,661
19,01394.59
89.31
104.87$ 4,712,746
212,701
233,970
141,888
0.78

Millions of Yen

Thousands of
U.S. Dollars (Note)

2023

2022

2023

2021

CONSOLIDATED BASIS:
Cash and cash equivalents, and short-term investments ¥ 109,752 ¥ 108,489 ¥ 103,054
Property and equipment, net of accumulated depreciation
341,680
334,605
343,227
Total assets
685,267
672,248
703,894
Long-term debt and other long-term liabilities
46,92744,47845,392
Net assets
433,521422,635
449,728
Net assets per share (yen)2,297.61
2,449.98 2,375.05$

819,0442,561,395
5,252,940
338,746
3,356,179
18.28(Note) U.S. dollar amounts are translated at ¥134 = U.S. $1, only for the convenience of readers.

700
600
500
400
300
0

2021

2022

2023

2022

2023

2022

2023

Net income(Billions of Yen)

30
25
20
15
10
5
0
2021

Net assets(Billions of Yen)

450

400

Corporate Data350

(As of March 31, 2023)

Company Name
Head Office
Date of Establishment
Paid-in Capital
Number of Shares Issued
Stock Listings
Transfer Agent
Independent Auditors

Seino Holdings Co., Ltd.
1, Taguchi-cho, Ogaki, Gifu 503-8501, Japan
Tel: 81-584-82-3881 Fax: 81-584-82-5043
November 1, 1946
¥42,482 million
207,679,783
Tokyo Stock Exchange, Prime Market (code 9076)
Nagoya Stock Exchange, Premier Market (code 9076)
Mitsubishi UFJ Trust and Banking Corporation
KPMG AZSA LLC

0

2021

1

Annual Report 2023

Message from the Management

To Our Shareholders, Customers and Friends
We would like to take this opportunity to express our appreciation to our stakeholders, including shareholders
and other investors, for the consistent support you have shown us over the years. The results for the fiscal year
ending March, 2023 (April 1, 2022 to March 31, 2023) are presented herein.

Medium-term Management Plan
“Connecting our values - For the
Prosperity of ourCustomers,”2022/4-2023/3
The following is a brief report on the performance of
Seino Holdings Co., Ltd. for the fiscal year ended March 31,
2023, our 102th term (from April 1, 2022 to March 31,2023).
During the fiscal year under review, although Japanese
economy started to exhibit evidence of normalization ofsocio-economic activities accompanying the easing ofrestrictions on activities due to the novel coronavirus disease(COVID-19), giving rise to expectations of an economic
recovery, the outlook has remained unclear due to soaring
prices for raw materials, resources and energy resulting
mainly from the impact of the situation in Ukraine, in
addition to rising import costs and inflation as a result of therapid depreciation of the yen caused by the widening gap
between interest rates in Japan and the U.S., among otherfactors.
In the transportation industry, which is the mainstay
business of the Seino Group, the volume of freighttransportation in Japan showed signs of recovering, including
a gradual pickup in industrial production overall. However,
due to soaring prices for crude oil and raw materials, supply
constraints and other factors, the conditions surrounding
corporate activities continued to be severe.
Guided by the “Connecting our values - For the
Prosperity of our Customers” three-year medium-term
management plan, which was in its final year, the Seino
Group responded to these conditions by offering value aimed
at resolving the issues faced by customers, and concentrating
its investments on growth areas such as logistics, with all
employees moving forward as one to enhance its corporate
value. The Seino Group has positioned the construction ofan “open public platform” (O.P.P.) that enables mutual
sharing of delivery services between cargo owner companies
and logistics companies and provides customers with onestop, no-stress services as the focus of its group-wide2

strategies, and as part of those efforts, has established a joint
venture, HACOBELL INC., together with RAKSUL INC.
Furthermore, the Seino Group made TIKUTAKUBIN Co.,
Ltd., which was a pioneer in the mail delivery business, a
subsidiary in order to establish a delivery network in thelast-mile field.
As a result, operating revenue for the fiscal year ended
March 31, 2023 was ¥631,508 million (up 3.9% year onyear), operating profit was ¥28,502 million (up 3.5% year onyear), ordinary profit was ¥32,688 million (up 8.0% year onyear), and profit attributable to owners of parent was ¥19,013
million (up 10.2% year on year).

Future Outlook
With regard to the outlook for the Japanese economy
going forward, although production activities are expected togradually pick up as shortages in the supply ofsemiconductors and other parts ease and industrial
production strengthens, we expect that we will need tocontinue closely monitoring the impact from persistently
high resource and energy prices and rising inflation.
In the transportation industry, which is the mainstay
business of the Seino Group, shortages of long-distancetruck drivers and other labor due to the shrinking workforce
have become an issue.
Given such conditions, the Seino Group will work toaddress the low birthrate and aging population,
environmental problems and other social issues we face,based on the slogan “‘Team Green Logistics’ –Creating
Together, Contributing to the Future–.” Amid the need to
optimize the sustainable logistics network, we will work tostrengthen our collaboration with various partners beyond
the boundaries of our current customers, industries andbusiness sectors and co-create “Green Logistics” as a united
team in order to encourage consideration for theenvironment throughout the entire supply chain in line with
the O.P.P. concept.
We have positioned our less-than-truckloadtransportation service as one part of social infrastructure,and in order to ensure that the provision of such service isstable, Seino Transportation Co., Ltd. merged with threegroup companies in April 2023. Through such efforts, wewill work to reduce the number of vehicles with low loads,
boost the operational efficiency for operations of the same
economic zone, and rebuild and optimize the entire
transportation system. In addition, we will collaborate withother companies in the industry while strengthening hub
functions, address the “2024 problem” through “Green
Logistics,” which includes combining modal shifts, andmitigate the risk of being unable to conduct transport
operations, while striving to secure stable earnings.
Furthermore, in the chartered vehicles field, which is a
growth area, we started the “Mitsukaru Charter” (charter
finder) service that enables customers to arrange forchartered vehicles through HACOBELL INC.’s websitethat has an excellent UI/UX. We will carry out sales
activities based on our advantage of being able to offer the
optimal transportation modes that combine less-thantruckload transportation service and other methods.
In order to leverage the advantage of our nationwide
operations, while implementing a cross-functional approach
spanning the entire Seino Group, we will newly establish the
Logistics Department, putting us in good stead to resolve
problems as the “general contact point for customers” andmake proposals on the optimal logistics in cooperation withother companies in the industry. In the specialized fields ofthe electronics, healthcare, automotive battery and othergrowth markets, we will establish three new departments forproviding solution services for each of those industries, andposition these departments as part of our growth strategy of
the Company. We will also invest personnel and othermanagement resources to strengthen our sales capabilities,
aiming to achieve dramatic growth.
In the business of passenger car sales in the Vehicle Sales
Business, TOYOTA COROLLA NETZ GIFU CO., LTD.
will aim to be the dealer shops chosen by customers throughvarious measures, such as working to optimize its dealer
network by carrying out ongoing renovations together with
the new establishment, elimination or consolidation of dealer
shops and service centers based on an analysis of the local
trading area, and introducing license plate recognition
systems for ensuring prompt, personalized service forcustomers visiting the shops. In addition, we will strive toboost productivity by consolidating headquarters functions
and backyard operations and securing personnel, thereby
ensuring profits.

In truck sales, while aiming to increase sales of large
trucks following the resumption of shipments from the
manufacturer, as well as leases, insurance and other financial
products, and small and medium-sized trucks, we will work
to secure earnings by securing a solid number of vehicles byinviting customers to bring their vehicle in early for vehicle
inspections and periodic maintenance and through increased
sales of parts to repair centers and other businesses. In otherareas, we will strive to enhance ES through the introductionof advanced maintenance equipment and other measures,
which should have a positive effect on the retention andrecruitment of mechanics.
In the Merchandise Sales Business, Real Estate Leasing
Services Business, and Other Business, we will take steps toexpand the business domain and strengthen our existing
businesses.
In accordance with our new medium-term management
plan and for the prosperity of our customers, the Seino
Group will work to connect hearts and contribute to the
future by being a corporate group chosen by customers byoffering value that goes beyond logistics, and aim to achieve
further growth.
To all shareholders, we sincerely ask for your ongoing
encouragement and support into the future.
June 2023

Yoshitaka Taguchi,
President and Chief Executive Officer3

Annual Report 2023

Special Feature

Expanding Scope of Operations and Creating New Value
Main Topics for 2023
Visualization of CO₂ emissions

Seino Transportation has added functionality for calculating CO₂
emissions whenever a quote for domestic transport rates is provided
on its website. The company has adopted the revised ton-km method
based on version 3.1 of the Joint Guidelines on Methods for
Calculating Carbon Dioxide Emissions in the Logistics Sector. CO₂
emissions can be calculated both for consolidated cargo transport andfor charter transport.

We are supporting our customers’ efforts tocreate a decarbonized society.

Seino Holdings and RAKSUL
announce joint venture

Seino Holdings and RAKSUL (headquarters: Shinagawa, Tokyo;
president: Yasukane Matsumoto) have established a joint venture (JV)
called HACOBELL (headquarters: Chuo, Tokyo; president: Kenji
Hazama) as a specific measure for developing the “Open Public
Platform” (OPP) to enable shared use of logistics infrastructure byshippers and transport companies and to provide one-stop, stress-freelogistics services. It was also announced that the new company would
join the group on August 8.
HACOBELL’s strengths are in the development of software for
optimizing delivery plan management by shippers and matchingcompanies in support of every level of logistics, from last-miledelivery to trunk line transport. By providing these services and data,
HACOBELL will provide greater convenience for shippers andtransport companies that use the OPP.
At Seino Holdings, we expect that by widely encouraging
participation in the OPP, we can not only solve driver shortages andother societal problems but also promote co-creation with the intent
of achieving sustainable green logistics.

Using the OPP will allow us to solve the problems faced by logistics and society
through co-creation that transcends industry boundaries.
4

Participation in promoting the
adoption of electric vehicles

Seino Transportation is participating in the development andsocietal implementation of an energy management system that
promotes the adoption of electric vehicles in Fukushima Prefecture
and Tokyo. Large-scale societal implementation of this system forfuel cell trucks and electric trucks is taking place in Fukushima
Prefecture and Tokyo in cooperation with automobile manufacturers,
shippers, and logistics companies. Implementation is being carriedout from January 2023 until the end of fiscal 2029. Vehicles accountfor about 80% of the CO₂ emitted in the logistics sector, so in order
to contribute to achieving a decarbonized society, we need to convert
transport vehicles into ZEVs (zero-emission vehicles) that emit noCO₂ while driving. Seino Transportation has put its name forward as
a participating partner.
This program will introduce 580 such vehicles, including large
fuel cell trucks for trunk line logistics and electric commercial lightvans for last-mile deliveries. By integrating energy management with
operational management, we can achieve cost and CO₂ reductions
that are not possible with non-electric vehicles. At Seino
Transportation, we also plan to introduce 45 fuel cell trucks andelectric trucks at our Fukagawa, Tokyo, Omori, and Keihin Terminal
branches. As CO₂ reduction becomes a social issue at the global level,
we will accelerate our efforts toward achieving green logistics,
including our contributions to carbon neutrality.

Tikutakubin joined Seino Group on
September 1

Tikutakubin (headquarters: Nerima, Tokyo) and its affiliatedsubsidiary Tikutakubin (headquarters: Chiba City, Chiba Prefecture)joined the Seino Group on September 1, and Shuji Kawai, an
executive officer at Seino Holdings, was appointed the company’s
president. Tikutakubin is a pioneer in mail delivery and postal
services, with branches in Tokyo, Saitama, Chiba, and Hokkaido.
Since its establishment in 1980, the company has been a pioneer inthe mail delivery industry through the adoption of a proprietaryproduct tracking and management system, and it has also built alast-mile delivery network with high customer satisfaction.
The public has been ordering individual items online more
frequently due in part to the COVID-19 pandemic, and product sizes
have been getting smaller year by year, leading to an increase indeliveries of items that can be delivered to mailboxes. These factors
will allow us to develop home delivery infrastructure that will
facilitate new lifestyles and help to solve social issues by combining
the trunk line delivery network of Seino Holdings with the last-miledelivery network that is one of Tikutakubin’s strengths.

Amagasaki Branch’s Nishibayashi wins
the Prime Minister’s Award at the
National Truck Driver Contest

Hitoshi Nishibayashi, a sales
team leader at the Seino
Transportation Amagasaki Branch,
received the Prime Minister’sAward for the best overall scoreacross all categories at the 54th
National Truck Driver Contest.
The competition involved 126
truck drivers selected from thetrucking associations of the various
prefectures. The contestants
competed in advanced driving
Sales leader Hitoshi Nishibayashi says
skills that are required ofcommercial truck drivers and were he just drove the way he always does.
tested on specialized knowledge
related to relevant laws and regulations as well as truck design.
This is the first time an employee of the Seino Group has won thePrime Minister’s Award.

Seino obtains CEIV Pharma certification
at Narita International Airport

The Tikutakubin logo

Paper by Seino employee wins Digital
Practice Paper Award

A Seino employee has received two awards for its paper “Relieving
Labor Shortages at Logistics Sites and Implementing Telework”: theInformation Processing Society of Japan’s Digital Practice Paper
Award and the IBM Knowledge Mall Award for Excellence. The
paper was written by Takeaki Yoshida, a member of the BRAISGroup within the LLP Division at Seino Information Service(location: Taguchicho, Ogaki City; president: Hideki Hayashi).
Yoshida’s solutions for workplace visualization and remotecommunication through the use of a logistics cockpit received highacclaim, and on September 15, he gave a lecture and participated in apanel discussion at Keio University.

The Information Processing Society ofJapan’s Digital Practice Paper Award is avery prestigious accolade awarded only to
one paper per year.

Seino Transportation has
obtained the CEIV Pharma quality
certification for air transport ofpharmaceutical products from theInternational Air Transport
Association (IATA) at Narita
International Airport. CEIV
Pharma is a globally accepted
standard for the air transport ofpharmaceuticals. Going forward,
Seino Transportation will develop asystem for integrated domestic andinternational transport ofpharmaceuticals, which requiretemperature control.

Right: Sentaro Hattori, Director in
charge of the Logistics Department,
accepting the certification

The establishment of one of Gifu
Prefecture’s largest Toyota dealershipchainsToyota Corolla Gifu has merged with Netz Toyota Gifu to form
Toyota Corolla Netz Gifu (headquarters: Gifu City; president: Takao
Taguchi). Following changes to make all Toyota models available
through all Toyota dealership chains nationwide, these twocompanies had been preparing for this merger, which would form oneof the largest dealership chains in Gifu with 60 new car dealerships,
14 used car dealerships, 2 dealerships selling both new and used cars,
and 1,446 employees. Going forward, Toyota Corolla Netz Gifu aims
to improve its services to ensure the peace of mind and trust of its
customers, based on the idea of putting customers first.
5Annual Report 2023

Expanding Our Operations Scope and Creating New Value
Transportation Services Business
Based on the medium-term management plan, the Seino
Group transformed to “Logistics Seino” while promoting
efficiency in our mainstay special mixed freight transportation
service “Less-than-truckload Seino,” and securing stableprofits. In order to contribute to our customers’ value chains,
we leveraged the advantage of our nationwide operations
without being limited to the Seino Group’s domains andstrove to strengthen our sales in logistics fields with potential
for growth, such as by aiming to develop advanced logistics
specialized for the electronics and healthcare businesscategories. By collaborating with warehouse business operators
nationwide, sharing information on available space, andcombining outsourcing of logistics operations, we optimized
the overall logistics from the viewpoint of the customer, anddeveloped our “Mitsukaru Souko” (warehouse finder) service
for minimizing the time for opening logistics sites.
At Seino Transportation Co., Ltd., the core company of
the Transportation Services Business group, we rebuilt
deteriorating facilities and invested in renovations forextending the useful lives of facilities, while making full use ofthis company’s logistics and transportation function. We

worked to translate these efforts into winning new cargoowner companies and raising the percentage of continuing
shipments, thereby securing higher volumes of cargo handled.
Moreover, in response to the so-called “2024 problem”
resulting from limits being placed on the maximum numberof hours that drivers can work overtime, we promoted
reasonable transport fees, mainly in the long-distance category
where costs will increase and in the heavy-load category where
profitability is low, and worked to secure profits. In addition,
we promoted diagramming for establishing a system of ontime route departures that does not depend on the volume ofcargo handled, as well as utilized unit-load transport andother measures to improve the efficiency of the entire
transport operation and optimized costs so that they arecorrelated with the volume of cargo handled. We also took
steps to reduce CO2 emissions and reform working styles,
such as launching operation of articulated trucks at the Nishi
Hiroshima branch and Kita Osaka branch.
As a result of the above, operating revenue for this segment
was ¥474,702 million (up 4.7% year on year) and operating
profit was ¥21,870 million (up 3.6% year on year).

Vehicle Sales BusinessIn the business of passenger car sales, amid the intensifying
competition between channels as a result of the introductionof a system where all Toyota dealers nationwide sell the full
lineup of Toyota vehicles, we merged two subsidiaries inJanuary 2023 and established TOYOTA COROLLA NETZ
GIFU CO., LTD., aiming to be the dealer shops chosen bycustomers. As the largest Toyota dealer group in Gifu
Prefecture, we put our customers first and aim to provide an
improved level of service in which they can feel reassured andtrust. Along with ongoing renovations to dealer shops toincrease customer satisfaction, we also engaged in otherefforts, including launching promotions that take advantage ofthe effects of introducing new models and making early
replacement proposals through the use of residual value
installment sales. Although new vehicle sales were lower thanthose in the previous year due to the global semiconductor
shortage and repeated shutdowns of manufacturers
accompanying stoppages in the supply of parts, because thenumber of vehicles allocated to the dealer shops increased
starting from the fourth quarter and the profit per vehicle rosedue to an increase in the number of high-priced models sold,
both revenue and profit increased compared to the previous
year. Moreover, used vehicle sales also recorded a year-on-year
6

decline in volumes, due to a reduction in the number of
traded-in vehicles caused by delivery delays of new vehicles
and difficulties in procuring vehicles caused by the risingmarket. However, the increase in retail prices caused bydelivery delays of new vehicles, and the rise in the auction
market, resulted in higher operating revenue. In the service
division, we strove to secure earnings through vehicle
inspections and vehicle maintenance and garage services, aswell as through sales of products, such as maintenancepackages that lead to repeat visits, and expanding the lineup ofrecommended products.
In truck sales, although new vehicle sales recorded a yearon-year decrease due to the suspension of vehicle shipments asa result of the issue regarding the manufacturer’s misconduct
concerning engine certification, we worked to secure earnings
by increasing used vehicle sales utilizing a used vehicle sales
network, encouraging customers to visit the workshop for
preventive maintenance and working to bring outsourced
inspection and maintenance operations in-house.
As a result of the above, operating revenue for this segment
was ¥94,209 million (down 4.1% year on year) and operating
profit was ¥4,709 million (up 4.9% year on year).

Merchandise Sales Business
The Merchandise Sales Business engages in the sale of fuel,paper and paper products, and other products. As a result of
the above, operating revenue for this segment was ¥33,518

million (up 9.0% year on year) and operating profit was ¥800
million (up 1.4% year on year).

Real Estate Leasing Services BusinessIn the Real Estate Leasing Services Business, we mainly
work to make maximum use of the potential of real estate byleasing the sites of former truck terminals, stores, and otherlocations.

As a result of the above, operating revenue for this segment
was ¥2,192 million (up 8.9% year on year), and operating
profit was ¥1,615 million (up 7.0% year on year).

Other Business
The Other Business segment includes the information
services business, the housing sales business, the construction
contract business, and the personnel services business.

Operating revenue for this segment was ¥26,887 million (up14.8% year on year), and operating profit was ¥1,174 million(down 1.7% year on year).

Operating Revenue by Business Segment(Millions of yen)
FY Ended March 31, 2023

FY Ended March 31, 2022

Results

Results

Composition

Composition

Year-on-YearTransportation services

474,70275.2%

453,253

74.6%

4.7%

Vehicle sales

94,20914.9%98,221

16.2%(4.1%)

Merchandise sales

33,5185.3%

30,754

5.1%

9.0%

Real estate lesing services

2,192

0.3%

2,013

0.3%

8.9%

Others

26,887

4.3%

23,417

3.8%

14.8%

Total

631,508

100.0%

607,658

100.0%

3.9%

Operating Income by Business Segment(Millions of yen)
FY Ended March 31, 2023

FY Ended March 31, 2022

Results

Results

Composition

Composition

Year-on-YearTransportation services

21,87076.7%

21,108

76.6%

3.6%

Vehicle sales

4,709

16.5%

4,491

16.3%

4.9%

800

2.8%

789

2.9%

1.4%

Real estate lesing services

1,615

5.7%

1,509

5.5%

7.0%

Others

1,174

4.1%

1,194

4.3%

(1.7%)

Total

30,168105.8%

29,091105.6%

3.7%

Elimination(1,666)(5.8%)(1,545)(5.6%)—

Consolidated

28,502100.0%

27,546100.0%

3.5%

Merchandise sales

7Annual Report 2023

Financial Review
Operating Results

Financial Position

The consolidated sales of Seino Holdings for the fiscal
year ended March 31, 2023 amounted to ¥631,508 million (a3.9% increase from the previous fiscal year). This was mainly
due to growth in our logistics and charter divisions within
our transportation business as well as contributions made by
newly consolidated subsidiaries.
Meanwhile, because of the sharp increase in raw material
prices and energy prices due to the impact of the Ukraine
invasion and an abrupt increase in material prices due to thelarge disparity in American and Japanese interest rates, sales
costs rose by ¥554,998 million, a 3.5% increase from theprevious fiscal year, but the ratio of operating costs to sales
stood at 87.9%, a 0.3% decrease from the previous fiscal year.
Sales expenses and general administrative expenses cameto ¥48,008 million (a 9.0% increase from the previous fiscal
year) due to an increase in salaries linked to businessperformance resulting from an increase in product volume aswell as higher personnel expenses related to newly
consolidated subsidiaries, and operating profit came to¥28,502 million.
Current net income before tasks and other adjustments
increased by 10.6% from the previous fiscal year to ¥31,352
million, and current net income rose by 10.2% from theprevious fiscal year to ¥19,013 million.
Current net income per share stood at ¥104.87, and returnon equity was 4.3%. The annual cash dividend per share roseto ¥56.00, which marked a 93.1% increase from the previous
fiscal year, and thus the dividend payout ratio amounted to53.4%. This is because our dividend policy is to have either adividend on equity (DOE) ratio of 2.4% or a consolidated
dividend payout ratio of 30%, whichever is higher.

Operating income to operating revenue
Net income (loss) to operating revenue

Cash Flows

Cash flow from operating activities amounted to ¥39,274
million, marking a decrease of ¥6,254 million from theprevious consolidated fiscal year, due to factors such as anincrease in inventories and a decrease in trade payables.
Cash flow from investment activities came to −¥29,589
million, which was a ¥2,205 million decrease from theprevious consolidated fiscal year. This was the result of factors
such as decreases in expenditures for acquiring tangible andintangible fixed assets and decreases in expenditures foracquiring subsidiary shares in conjunction with a change inconsolidation scope.
Cash flow from financial activities rose by ¥290 million
from the previous consolidated fiscal year to −¥8,172 million.
This result of factors such as an increase in dividends paid.
As a result of the above, cash and cash equivalents in thecurrent consolidated fiscal year increased by ¥1,540 million
from the previous consolidated fiscal year to ¥101,065
million.

Net income (loss) to total assets
Return on equity ratio

Shareholders’ equity ratio

(%)

(%)

(%)

8

8

80

7

7

6

6

5

5

4

4

3

3

2

2

1

1

0

0

-1

8

Total assets at the end of the current consolidated fiscal
year amounted to ¥703,894 million, which marked anincrease of ¥18,627 million from the end of the previous
consolidated fiscal year. The main factors were an increase in
cash and deposits and an increase in the market value of
inventories and marketable securities held. Liabilities totaled¥254,166 million, which marked a ¥2,420 million increase
from the end of the previous consolidated fiscal year.
Furthermore, net assets increased by ¥16,207 million fromthe end of the previous consolidated fiscal year to reach¥449,728 million due to a rise in retained earnings.

2018

2019

2020

2021

2022

2023

-1

60

40

20

2018

2019

2020

2021

Operating income to operating revenue

Net income (loss) to total assets

Net income (loss) to operating revenue

Return on equity ratio

2022

2023

0

2018

2019

2020

2021

2022

2023

SEINO HOLDINGS CO., LTD. and Consolidated Subsidiaries

Six-year Summary

For the Years Ended March 31, 2023, 2022, 2021, 2020, 2019 and 2018
Millions of Yen
2023
For the year:
Operationg revenue:
Transportation services
Vehicle sales
Merchandise sales
Real estate leasing services
Other
Operating costs
Selling,general andadministative expences
Operating income
Net income (loss)
At year end:
Current assets
Total assets
Currrent liabolities
Short-term borrowings
Longterm debt, including current maturities
Net asset¥

2022

631,508
474,702
94,20933,5182,192
26,887554,998¥

2021

607,658
453,253
98,22130,754
2,013
23,417536,079¥2020

592,046
441,091
98,33431,034
1,865
19,722525,852¥2019

625,627
466,473
103,165
32,868
1,732
21,389553,541¥2018

617,162
462,459
100,960
33,518
1,651
18,574545,253¥

596,130
443,168
103,342
31,575
1,599
16,446529,196

48,00828,502
19,01344,03327,546
17,256

41,63324,561
16,661

42,38929,697
25,84840,71331,196
21,20839,05527,87920,047

255,432
703,894
112,967
4,760
45,392449,728

245,578685,267
109,980
3,241
46,927433,521242,711672,248
110,993
4,471
44,478422,635

248,332
654,533
111,582
4,130
17,999432,813251,683
657,983
130,357
5,470
19,905428,934

243,883
628,728
125,871
3,610
21,776
405,739Yen
Per share data:
Net (loss) income:-BasicCash dividends¥

Number of shares issued

104.87
56.00¥

207,679

94.59
29.00

¥

89.31
27.00

¥

128.41
39.00

Thousands
207,679

207,679¥

104.81
32.00¥

101.8830.00

207,679

207,679

207,679

4.7
4.1
3.9
6.1
65.1
222.6
52.0
30.4

5.0
3.4
3.2
5.2
63.8
193.1
55.2
30.5

4.7
3.3
3.2
5.2
63.4
193.8
55.9
29.4

Percent
Ratios:Operating income to operation revenue
Net income (loss) to operating revenue
Net income (loss) to total assets
Return on equity ratio
Shareholders’ equity ratio
Current ratio
Dept equity ratio
Payout ratio

4.5
3.0
2.7
4.3
63.2
226.1
57.1
53.4

4.5
2.8
2.5
4.1
62.7
223.3
58.6
30.7

4.1
2.8
2.5
3.9
62.4
218.7
59.5
30.2

Current ratio

Debt equity ratio

Payout ratio

(%)

(%)

(%)

120

60

240

50

200
90

160

40

120

30

60

80

20
30

40

0

10

2018

2019

2020

2021

2022

2023

0

2018

2019

2020

2021

2022

2023

0

2018

2019

2020

2021

2022

2023

9

Annual Report 2023

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Balance Sheets
March 31, 2023 and 2022

Millions of yen
2023
Assets:Current assets:
Cash and cash equivalents (Note 3)
Short-term investments (Notes 3 and 5)
Trade receivables (Note 3)
Contract assets
Inventories (Note 4)
Other current assets
Allowance for doubtful accounts
			
Total current assets¥

Property and equipment (Notes 6, 7 and 9):
At costAccumulated depreciation			Net property and equipment
Investments and other assets:
Investment securities (Notes 3 and 5)
Investments in and long-term loans to affiliates and nonconsolidated subsidiaries (Note 5)
Goodwill
Deferred tax assets (Note 18)
Other assets
			
Total investments and other assets
			
Total assets
Current liabilities:
Short-term borrowings (Notes 3, 9, 10 and 11)
Current portion of long-term debt (Notes 3, 9 and 11)
Trade payables (Note 3)
Accrued expenses
Income taxes payable
Contract liabilities
Other current liabilities
			
Total current liabilities

101,065
8,687
119,242
1,289
16,3889,206(445)
255,432

2022
99,525
8,964
118,649
1,051
11,237
6,498(346)
245,578$

692,238(349,011)
343,227

680,129(338,449)
341,680

5,165,955(2,604,560)
2,561,395

38,747
26,544
11,603
15,65040,137
20,631
11,126
14,783

289,157
198,090
86,589116,791

98,009685,267

785,336$ 5,252,940

3,241
2,603
48,915
15,972
5,489
3,631
30,129109,980$¥

12,691¥¥Long-term debt (Notes 3, 9 and 11)
Employee retirement benefit liability (Note 12)
Asset retirement obligations (Note 8)
Accrued severance indemnities for directors and corporate auditors
Provision for share-based remuneration
Provision for directors’ stock payments
Deferred tax liabilities (Note 18)
Other long-term liabilities
			
Total liabilities

Thousands of
U.S. dollars
2023

105,235
703,894

4,760
2,490
49,875
16,1096,691
3,873
29,169112,967

11,332¥¥754,216
64,828889,866
9,619
122,299
68,702(3,321)
1,906,209

94,70935,522
18,582372,202120,216
49,93328,903
217,679
843,037

42,902
83,138
3,839
1,833
5,054
180
2,960
1,293
254,166

44,32482,328
3,707
1,611
5,242
198
3,000
1,356
251,746

320,164
620,433
28,64913,67937,717
1,343
22,0909,649
1,896,761

42,48280,874346,416(36,422)433,350

42,48280,940332,861(37,139)
419,144

317,030
603,537
2,585,194(271,806)
3,233,955

13,763(97)(2,849)677
11,4943
4,881
449,728
703,894

14,620(122)(3,542)(208)
10,748—3,629
433,521685,267

102,709(724)

Commitments and contingent liabilities (Notes 13 and 14)
Net assets:
Shareholders’ equity (Note 15):
		 Common stock: 794,524,668 shares authorized and 207,679,783 shares issued
		 Capital surplus
		 Retained earnings
		 Less treasury stock at cost: 26,109,781 shares in 2023 and 26,677,070 shares in 2022
			
Total shareholders’ equity
Accumulated other comprehensive income
		 Net unrealized gains on available-for-sale securities
		 Land revaluation decrement
		 Retirement benefit adjustment
		 Foreign currency translation adjustments
			
Total accumulated other comprehensive income
Share acquisition rights
Noncontrolling interests			
Total net assets
			
Total liabilities and net assets
See accompanying Notes to Consolidated Financial Statements.
10

¥

¥

(21,261)

5,052
85,77623
36,425
3,356,179$ 5,252,940

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Income
For the Years Ended March 31, 2023, 2022 and 2021

2021

Thousands of
U.S. dollars
2023

592,046$ 4,712,746

Millions of yen
2023
Operating revenue (Note 22)¥

Operating costs and expenses (Note 12):
Operating costs
Selling, general and administrative expenses

631,508

2022¥

607,658¥

554,998
48,008603,006
28,502536,079
44,033580,11227,546525,852
41,633
567,485
24,5614,141,776
358,269
4,500,045
212,701

978
(424)
(348)
—
32
25
(1,088)
147
2,446
(787)
(18)
584
1,303
2,850
31,352

859
(435)
(229)
—
6
97
(671)
31
1,560
(1,141)——
722
799
28,345

1,350
(408)
189
(90)
310
597
(652)
1,011
443
(54)
(383)
—
747
3,060
27,621

7,298(3,164)(2,597)—239
186(8,119)1,097
18,254(5,873)
(134)
4,358
9,724
21,269233,970

Income taxes (Note 18):
Current
Deferred			Total income taxes

12,628(736)
11,892

11,813(1,115)
10,698

11,272(496)
10,776

94,239(5,493)88,746

			

19,46017,647

16,845145,224

			

Operating income

Other income (expenses):
Interest and dividend income
Interest expense(Loss) gain on investments in partnerships
Commission for purchase of treasury shares
Subsidy income
Subsidies for employment adjustment
Loss on sale or disposal of property and equipment
Gain on sale of investment securities
Share of profit of entities accounted for using equity method
Impairment loss on fixed assets (Notes 2(i) and 22)
Loss on valuation of shares of subsidiaries and associates
Compensation received for the exercise of eminent domain
Miscellaneous, net
			Profit before income taxes

ProfitProfit attributable to noncontrolling interests
			Profit attributable to owners of parent¥

447
19,013¥391
17,256¥

184
16,661$

U.S. dollars

Yen
Per share:
Profit attributable to owners of parent-Basic-Diluted
Cash dividends¥

104.87
98.40
56.00

¥

94.59
88.78
29.00

3,336
141,888

¥

89.31
89.29
27.00

$

0.78
0.73
0.41

See accompanying Notes to Consolidated Financial Statements.
11

Annual Report 2023

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Comprehensive Income
For the Years Ended March 31, 2023, 2022 and 2021

2021

Thousands of
U.S. dollars
2023¥

16,845$145,224

¥

5,383
627
(51)
(58)
5,901
22,746$(6,410)
5,552
925
5,642
5,709
150,933

Millions of yen
2023

ProfitOther comprehensive income (Note 19):
Net unrealized gains on available-for-sale securities
Remeasurements of defined benefit plans, net of tax
Foreign currency translation adjustments
Share of other comprehensive income of affiliates accounted for using equity method			
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Noncontrolling interests

2022

¥

19,460

¥

(859)
744
124
756
765
20,225¥

19,734491¥

17,647

¥

(669)
1,345
49
554
1,279
18,926¥

18,531395¥

22,560186$

147,269
3,664

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2023, 2022 and 2021

Shareholders’ equity
Accumulated other comprehensive income
Total
Number of
Net unrealized
Foreignshares of
Total
gains onLand Retirement currency accumulated
Share
other
common Common Capital Retained Treasury shareholders’ available-for- revaluation benefit translation comprehensive acquisition Noncontrolling Total net
stock issued stock surplus earnings stock
equity sale securities decrement adjustment adjustments income
rightsinterests
assetsMillions of yen
Balance at March 31, 2020 207,679,783 ¥ 42,482 ¥ 83,744 ¥ 312,202 ¥ (15,837) ¥ 422,591 ¥ 9,898 ¥ (109) ¥ (5,613) ¥ (603) ¥ 3,573 ¥— ¥ 6,649 ¥ 432,813
Profit attributable to owners of parent———
16,661—
16,661
—
—
—
—
—
—
—
16,661
Cash dividends———(7,684)—(7,684)
—
—
—
—
—
—
—
(7,684)Purchases of treasury stock andfractional shares, net——
3— (19,661) (19,658)
—
—
—
—
—
—
— (19,658)
Change in treasury shares of parent arising fromtransactions with noncontrolling shareholders——(2,121)——(2,121)
—
—
—
—
—
—
—
(2,121)
Net changes in items other than
—
—
—
—
—
—
5,446
(13)
723
(257)
5,899
—
(3,275)
2,624
shareholders’ equity
Balance at March 31, 2021 207,679,783
42,482
81,626 321,179 (35,498) 409,789 15,344(122) (4,890)
(860)
9,472
—
3,374 422,635
Cumulative effects of changes in
—
—
—
(517)
—
(517)
—
—
—
—
—
—
2
(515)
accounting policies
Restated balance at March 31, 2021 207,679,783
42,482
81,626 320,662 (35,498) 409,272 15,344(122) (4,890)
(860)
9,472
—
3,376 422,120
Profit attributable to owners of parent———
17,256—
17,256
—
—
—
—
—
—
—
17,256
Cash dividends———(5,057)—(5,057)
—
—
—
—
—
—
—
(5,057)Purchases of treasury stock andfractional shares, net
—
—
(8)
—
(1,641) (1,649)
—
—
—
—
—
—
—
(1,649)Change in treasury shares of parent arising fromtransactions with noncontrolling shareholders
—
—
(678)
—
—
(678)
—
—
—
—
—
—
—
(678)
Net changes in items other than
—
—
—
—
—
—
(724)
—
1,348
652
1,276
—
253
1,529
shareholders’ equity
Balance at March 31, 2022 207,679,783
42,48280,940 332,861 (37,139) 419,144 14,620(122) (3,542)(208) 10,748—
3,629 433,521
Profit attributable to owners of parent———
19,013—19,013
—
—
—
—
—
—
—
19,013
Cash dividends———(5,432)—(5,432)
—
—
—
—
—
—
—
(5,432)
Reversal of land revaluation decrement
—
—
—
(26)
—
(26)
—
—
—
—
—
—
—
(26)
Purchases of treasury stock andfractional shares, net
—
—
(58)
—
717
659
—
—
—
—
—
—
—
659
Change in treasury shares of parent arising fromtransactions with noncontrolling shareholders
—
—
(8)
—
—
(8)
—
—
—
—
—
—
—
(8)
Net changes in items other than
—
—
—
—
—
—
(857)
25
693
885
746
3
1,252
2,001
shareholders’ equity
Balance at March 31, 2023 207,679,783 ¥ 42,482 ¥ 80,874 ¥ 346,416 ¥ (36,422) ¥ 433,350 ¥ 13,763 ¥(97) ¥ (2,849) ¥677 ¥ 11,494 ¥3 ¥ 4,881 ¥ 449,728

Balance at March 31, 2022
Profit attributable to owners of parent
Cash dividends
Reversal of land revaluation decrement
Purchases of treasury stock andfractional shares, net
Change in treasury shares of parent arising fromtransactions with noncontrolling shareholders
Net changes in items other thanshareholders’ equity
Balance at March 31, 2023
12

Thousands of U.S. dollars$ 317,030 $ 604,030 $ 2,484,037 $ (277,157) $ 3,127,940 $ 109,104 $ (910) $ (26,433) $ (1,552) $ 80,209 $—— 141,888— 141,888
—
—
—
—
—
—
— (40,537)— (40,537)
—
—
—
—
—
—
—
(194)
—
(194)
—
—
—
—
—

— $ 27,082 $3,235,231—— 141,888—— (40,537)
—
—
(194)

—

(433)

—

5,351

4,918

—

—

—

—

—

—

—

4,918

—

(60)

—

—

(60)

—

—

—

—

—

—

—

(60)

—
—
—
—
—
(6,395)$ 317,030 $ 603,537 $ 2,585,194 $ (271,806) $ 3,233,955 $ 102,709 $See accompanying Notes to Consolidated Financial Statements.

186
5,172
(724) $ (21,261) $

6,604
5,567
5,052 $ 85,776 $

23
9,343
14,933
23 $ 36,425 $3,356,179

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Cash Flows
For the Years Ended March 31, 2023, 2022 and 2021

Millions of yen
2023
Cash flows from operating activities:
Profit before income taxes¥
Adjustments for:		Depreciation
		 Impairment loss on fixed assets
		 Amortization of goodwill
		 Net increase in employee retirement benefit liability
		 Loss on sale or disposal of property and equipment
		 Share of (profit) of entities accounted for using equity method
		 Loss (profit) on investments in partnerships
		 Gain on sale of investment securities
		 Loss on valuation of shares of subsidiaries and associates
		 Net provision for accrued severance indemnities for directors and corporate
auditors
		 Decrease in provision for share-based remuneration
		 Net provision for directors’ stock payments
Decrease (increase) in trade receivables(Increase) decrease in inventories(Decrease) increase in trade payables
Other, net				 Subtotal
Interest and dividends received
Interest paid
Income taxes paid				 Net cash provided by operating activities
Cash flows from investing activities:
Increase in property and equipment
Increase in long-term investments and loans
Decrease in property and long-term investments
Decrease in short-term investments
Purchase of shares of subsidiaries resulting in change in scope of
consolidation (Note 16)
Proceeds from purchase of shares of subsidiaries resulting in change inscope of consolidation				 Net cash used in investing activities
Cash flows from financing activities:
Increase in long-term debt
Repayment of long-term debt
Net decrease in short-term borrowings
Payments from changes in ownership interests in subsidiaries that do not
result in change in scope of consolidation
Proceeds from share issuance to noncontrolling shareholders
Dividends paid to shareholders
Dividends paid to noncontrolling interests
Purchases of treasury stock, net of disposals
Other, net				 Net cash used in financing activities				 Effect of exchange rate changes on cash and cash equivalents				 Net increase in cash and cash equivalents				 Cash and cash equivalents at beginning of year				 Cash and cash equivalents at end of year¥

31,3522022¥

28,3452021¥

27,621Thousands of
U.S. dollars
2023$

233,970

21,555
787
2,193
1,809
1,088
(2,446)
348
(147)
18

21,490
1,141
1,789
2,918
671
(1,560)229(31)—

20,352
54
1,639
2,611
652
(443)
(189)
(1,011)383

160,858
5,873
16,366
13,5008,119(18,254)
2,597(1,097)
134

149
(188)

62
(185)
46
(767)
214
(451)
(447)
50,141
1,258(389)(12,325)
38,685

1,112(1,403)

1,447(5,030)(134)(1,015)51,7681,414(446)(13,462)
39,27441(206)
55(1,151)1,808
1,434(1,989)54,984
1,063(417)(10,102)45,528

10,799(37,537)(1,000)(7,575)386,328
10,552(3,328)(100,463)
293,089(24,931)(4,781)
60
272(29,383)(1,760)433
468(35,453)(1,000)
1,652
7,093

(186,052)(35,679)
448
2,030

(685)

(1,631)(258)(5,112)476(29,589)79(31,794)—(27,966)

3,552(220,813)

630(2,031)(482)

11,036(9,588)(480)

25,389(1,039)
(422)

4,701
(15,157)(3,597)(15)—(5,252)(144)
527(1,405)(8,172)27
1,540
99,525101,065(781)
4(4,928)(84)(1,813)(1,248)(7,882)(10)
5,842
93,683
99,525(5,518)—(7,492)(71)(19,998)(1,340)(10,491)(27)
201
93,482
93,683(112)—(39,194)(1,074)
3,933(10,485)(60,985)201
11,492742,724754,216

(18)

¥

¥

(134)

$

See accompanying Notes to Consolidated Financial Statements.
13

Annual Report 2023

SEINO HOLDINGS CO., LTD. and Subsidiaries

Notes to Consolidated Financial Statements
1. Basis of Consolidated Financial
Statements
The accompanying consolidated financial statements of SEINO
HOLDINGS CO., LTD. (the “Company”) and its subsidiaries (together
with the Company, the “Seino Group”) have been prepared in accordancewith the provisions set forth in the Financial Instrument and Exchange
Law of Japan and its related accounting regulations and in conformity withaccounting principles generally accepted in Japan (“Japanese GAAP”),
which are different in certain respects as to application and disclosure
requirements from International Financial Reporting Standards (“IFRS”).
The accompanying consolidated financial statements have been
restructured and translated into English from the consolidated financial
statements of the Company prepared in accordance with Japanese GAAP
and filed with the appropriate Local Finance Bureau of the Ministryof Finance as required by the Financial Instrument and Exchange Law
of Japan. Certain supplementary information included in the statutory
Japanese language consolidated financial statements, but not required
for fair presentation, is not presented in the accompanying consolidated
financial statements.
The translation of the Japanese yen amounts into U.S. dollar amounts
is included solely for the convenience of readers outside Japan, using theapproximate exchange rate prevailing at March 31, 2023, which was ¥134 to
U.S. $1.00. The translation should not be construed as a representation that
the Japanese yen amounts have been, could have been or could in the future
be converted into U.S. dollars at this or any other rate of exchange.

earnings (amount corresponding to the Company’s ownership interest) andothers does not significantly affect the consolidated financial statements.
The consolidated financial statements include the accounts of theoverseas subsidiary prepared under IFRS in accordance with Practical
Issues Task Force (“PITF”) No. 18, “Practical Solution on Unification of
Accounting Policies Applied to Foreign Subsidiaries for Consolidated
Financial Statements,” issued by the Accounting Standards Board of Japan(“ASBJ”).
(b)

Cash and cash equivalents
The Seino Group considers highly liquid debt instruments purchasedwith an original maturity of three months or less to be cash equivalents.

(c)

Investments and marketable securities
The Seino Group classifies certain investments in debt and equity
securities as “held-to-maturity,” “trading” or “available-for-sale.” Theclassification determines the respective accounting method applied as
stipulated by the accounting standard for financial instruments. Heldto-maturity securities are stated at amortized cost. Marketable securities
with market quotations for available-for-sale securities are stated atfair value, and net unrealized gains and losses on these securities arereported as accumulated other comprehensive income in net assets, net of
applicable income taxes. Gains and losses on the disposition of availablefor-sale securities are computed based on the moving average method.
Nonmarketable securities without available market quotations for availablefor-sale securities are carried at cost determined by the moving averagemethod. Adjustments in carrying values of individual securities are charged
to income through write-downs when a decline in value is deemed otherthan temporary. Investments in partnerships are stated at the amount of net
assets attributed to the ownership percentage of the Company.

(d)

Accounting for derivatives
Derivative transactions are omitted due to their insignificance to theoperation of the Seino Group's business.

(e)

Allowance for doubtful accounts
Allowance for doubtful accounts is provided for at the aggregate amountof estimated credit loss based on an individual financial review of certain
doubtful or troubled receivables and a general reserve for other receivables
based on the historical loss experience for a certain past period.

(f)Inventories
Inventories for merchandise, products, raw materials and supplies arestated principally at the lower of moving average cost or net realizable value,
and inventories for vehicles and work-in-process are stated principally at
the lower of specific identification cost or net realizable value.

(g)

Property and equipment and depreciation
Property and equipment, including significant renewals and additions,
are stated at cost. Property and equipment of the Company and certain
subsidiaries are depreciated by the straight-line method for buildings andvehicles and by the declining balance method for other property.
Property and equipment of other subsidiaries have been depreciatedprincipally by the declining balance method, except for buildings acquired
on and after April 1, 1998, property held for lease and facilities attached
to buildings and structures acquired on and after April 1, 2016. Buildings
acquired on and after April 1, 1998 and facilities attached to buildings andstructures acquired on and after April 1, 2016 by the domestic subsidiaries
are depreciated by the straight-line method. Some of the subsidiaries
capitalize property for which the cost was not less than ¥100,000 but below¥200,000 and depreciate it over three years on a straight-line basis.
The Seino Group, as lessee, capitalizes assets used under finance leases,
except for certain immaterial or short-term finance leases accounted for as
operating leases. Depreciation of leased assets capitalized in finance leasetransactions as lessee is computed by the straight-line method over thelease term as the useful life with the assumption of no residual value. The
leased property of a certain subsidiary engaged in leasing operations as
lessor is recorded at cost in property and equipment in the accompanying
consolidated balance sheets under operating lease accounting and isdepreciated over the term of the lease contract by the straight-line method

2. Summary of Significant Accounting
Policies(a)Principles of consolidation
The accompanying consolidated financial statements include theaccounts of the Company and all of its subsidiaries. Investments insignificant affiliates are accounted for by the equity method. Investments
in affiliates not accounted for by the equity method are stated at cost.
Differences between the acquisition cost of investments in subsidiaries andthe underlying equity in their net assets, adjusted based on the fair value atthe time of the acquisition, are deferred as goodwill and amortized over theestimated useful life, 5-15 years, on a straight-line basis. All intercompany
transactions and accounts have been eliminated on consolidation.
Under accounting standards for consolidation, a subsidiary is defined as
an enterprise which is controlled by another enterprise and is a majority(more than 50%) owned enterprise or a 40% to 50% owned enterprise thatmeets certain criteria. An affiliated company is defined as an enterprise inwhich the investor has significant influence and is an enterprise other thana subsidiary that is a 20% or more owned enterprise or a 15% to less than
20% owned enterprise that meets certain criteria. For each of the years
ended March 31, 2023, 2022 and 2021, there were six companies that were
not a more than 50% owned enterprise but were nevertheless classified as
subsidiaries based on the judgment of the Company in accordance with theapplicable accounting standards.
The number of subsidiaries and affiliates for the years ended March 31,
2023, 2022 and 2021 was as follows:
Subsidiaries:
Domestic
Overseas
Affiliates accounted for by the equity method
Nonconsolidated subsidiaries
Affiliates stated at cost

2023

2022

2021

76
6
6
1
13

76
6
6
1
13

76
6
6
1
14

The Company and most of its subsidiaries have a fiscal year that ends
on March 31. The overseas subsidiary closes its books on December 31.
Significant transactions for the period between the subsidiaries’ year-end
and the Company’s year-end are adjusted for on consolidation.
Nonconsolidated subsidiaries are excluded from the scope of
consolidation because they are all small in scale, and any total amount interms of their total assets, operating revenue and profit or loss (amountcorresponding to the Company’s ownership interest) as well as retained14

to the amount equal to the estimated disposal value at the lease termination
date.
Expenditures on maintenance and repairs are charged to operating
income as incurred. Upon the disposal of the property, the cost andaccumulated depreciation are removed from the accounts and any gain orloss is recorded as income or expense.
(h)Intangible assets
Intangible assets are amortized on a straight-line basis. Software, whichis included in intangible assets, is amortized using the straight-line method
over the estimated useful life of five years.

(i)

Accounting standard for impairment of fixed assets
The Company and its domestic subsidiaries have adopted the“Accounting Standard for Impairment of Fixed Assets” issued by theBusiness Accounting Council of Japan and the related practical guidanceissued by ASBJ. The standard requires that fixed assets be reviewed for
impairment whenever events or changes in circumstances indicate that thecarrying amount of an asset may not be recoverable. An impairment loss is
to be recognized in the income statement by reducing the carrying amountof the impaired asset or group of assets to the recoverable amount, to bemeasured as the higher of the asset’s net selling price or value in use. Fixed
assets include intangible assets as well as land, buildings and other forms
of property and are to be grouped at the lowest level for which there are
identifiable cash flows distinguishable from other groups of assets. For the
purpose of recognition and measurement of impairment loss, fixed assets
are grouped into cash-generating units, such as operating business branches
other than idle or unused property. The method used to group assets tomeasure impairment of fixed assets in the transportation services segment,
excluding some consolidated subsidiaries, is a method that groups assets by
the entire segment. At March 31, 2023, 2022 and 2021, recoverable amountsof assets were measured based on value in use using discounted future cash
flows at interest rates principally of 4.7%, 3.5% and 4.8%, respectively, or
net selling prices using primarily appraisal valuations. As a result, the Seino
Group recognized impairment loss as follows:
Thousandsof U.S.
dollars2023

Millions of yen
2023

Property subject toimpairment:

10 businessbranchesand 2 idle
properties

Impairment loss recorded for:land¥
buildings and structuresother property¥

2022

8 businessbranchesand 2 idle
properties

275 ¥
505
7
787 ¥

2021
1 businessbranch

371 ¥
549
221
1,141 ¥

54 $
—
—
54 $

2,052
3,769
52
5,873

Accumulated impairment loss has been directly deducted from theapplicable assets.
(j)

Employee retirement benefits
Employees who terminate their service with the Seino Group are entitled
to retirement benefits determined generally by reference to basic rates of pay
at the time of termination, length of service and conditions under which thetermination occurs.
The Seino Group has recognized retirement benefits for employees,
including pension cost and related liability, based on the actuarial present
value of retirement benefit obligation using the actuarial appraisal approachand the fair value of pension plan assets available for benefits at the fiscal
year-end. In the calculation of the retirement benefit obligation, theexpected retirement benefits are attributed to the period up to the endof the respective fiscal year based on the straight-line method. Actuarial
differences arising from changes in the retirement benefit obligation or thevalue of pension plan assets resulting from actual outcomes different fromthat which were assumed and from changes in the assumptions themselves
are amortized on a straight-line basis over principally ten years, a period
within the average remaining service years of employees, from the year
following the year in which they arise. Past service cost is amortized using

the straight-line method over principally ten years, a period within the
average remaining service years of employees, from the year in which it
occurs.
(k)

Severance indemnities for directors and corporate auditors
The Seino Group pays severance indemnities to directors and corporate
auditors subject to the approval of the shareholders. Certain subsidiaries
provide for accrued severance indemnities for directors and corporate
auditors at the amount that would have been payable if the directors
and corporate auditors had retired at the end of the fiscal year based oninternal rules, in accordance with the Japanese Institute of Certified Public
Accountants (“JICPA”) Audit and Assurance Committee Report No. 42,“Treatment for Auditing of Reserve Under Special Taxation Measures
Law, Reserve Under Special Laws and Reserve for Retirement Benefits to
Directors and Corporate Auditors.”(l)

Provision for share-based remuneration
To provide for the delivery of the Company’s shares to employees inaccordance with the regulations on the delivery of shares, the estimatedamount of share-based remuneration to be paid at the end of the fiscal year
is recorded.

(m)

Provision for directors’ stock payments
Provision for directors’ stock payments has been provided for stock award
debt based on regulations for awarding stock, which is prepared for futureawards of the company shares to its directors, excluding outside directors.

(n)Accounting for revenue and expenses recognition
The Seino Group has adopted the Accounting Standard for
Revenue Recognition (ASBJ Statement No. 29, March 30, 2020) andthe Implementation Guidance on Accounting Standard for Revenue
Recognition (ASBJ Guidance No. 30, March 26, 2021). In relation torecognition of revenue from contracts with customers, the nature ofprincipal performance obligations for major businesses of the Seino Groupand the typical timing of the satisfaction of those performance obligations(i.e., typical timing of revenue recognition) are as follows:
The Seino Group divides the business segment by products and services
based on the main businesses of each subsidiary into “Transportation
Services Business,” “Vehicle Sales Business,” “Merchandise Sales Business”
and “Real Estate Leasing Services Business”.
The Transportation Services Business is the motor truck transportation
business, home delivery service, house moving service and charter service
mainly for small-lot commercial cargo. In addition, this business includes
the consigned freight forwarding business, and delivery to cargo by using
the various mode of transportation such as airlines, railways, ocean freight,
etc. The Seino Group provides mainly domestic transportation services.
Transportation revenue is recognized as the related performance obligations
are satisfied, as the control of the promised services is continuouslytransferred to the customer.
The Vehicle Sales Business focuses mainly on sales and repair services
for passenger cars and trucks. The performance obligations are satisfied at
the time the related vehicles are registered and owned by the customers.
Regarding new and used vehicles sales, the performance obligations are
satisfied at the time the car is registered, and revenue is recognized as theperformance obligations are satisfied. For installment sales, transaction
prices are based on the contract with the customer that distinguishes
between financial components and other. Interest equivalent, a financial
component method, is recognized as revenue based on the contract periodwith the customer, and other transaction prices are recognized as revenue
at the time of inspection. In regard to repair services, the performanceobligations are satisfied at the time of completion of the repair work.
The Merchandise Sales Business sells fuel and paper products. With thesales of products, the time from dispatching the goods until the inspection
process at the customer side is not long. Therefore, the revenue will berecognized at the time the goods are shipped. In fuel sales, transactions oflight oil and delivery tax as agent, the transaction price is calculated basedon the net amount after deducting the amount to be paid to the other party
from the amount of consideration received from the customer.
The Real Estate Leasing Services Business focuses mainly on leasing
car parking, mansions and land used as truck terminals and branches in thepast. We recognize revenue according to the agreement with the customers.

15

Annual Report 2023

Generally, payment is received within approximately one month fromthe time the performance obligation is satisfied. In the installment sales inthe Vehicle Sales Business, however, payment is generally received within arange of three to five years depending on the agreement.

16

(o)

Income taxes
Income taxes are accounted for by the asset-liability method. Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the carrying amounts of existing assets
and liabilities and their respective tax bases and operating loss carryforwards.
Deferred tax assets and liabilities are measured using the enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.

(p)Enterprise taxes
The Seino Group records local corporate enterprise taxes based on the“added value” and “capital” amounts when levied as size-based corporate
taxes for local government enterprise taxes, which are included in selling,
general and administrative expenses.

(q)Appropriation of retained earnings
Cash dividends are recorded in the fiscal year during which a proposed
appropriation of retained earnings is approved by the Board of Directors
and/or shareholders.

(r)Translation of foreign currency accounts
Receivables, payables and securities, other than stocks of subsidiaries, aretranslated into Japanese yen at the exchange rates prevailing at the fiscal
year-end. Transactions in foreign currencies are recorded based on theprevailing exchange rates on the transaction dates. Resulting translation
gains and losses are included in current earnings.
In respect to the financial statement items of overseas subsidiaries, allasset, liability, income and expense accounts are translated into yen by
applying the exchange rates in effect at the fiscal year-end. Translationdifferences, after allocations of portions attributable to noncontrollinginterests, are reported as foreign currency translation adjustments in acomponent of net assets on the accompanying consolidated balance sheets.

(s)

Per share data
Basic net income per share is computed by dividing income available
to common shareholders by the weighted average number of shares ofcommon stock outstanding during the respective year, retroactively adjusted
for stock splits. Unless there is an anti-dilutive effect, diluted net income
per share is calculated to reflect the potential dilution assuming that all
convertible bonds are converted at the time of issue.
Cash dividends per share shown for each fiscal year in the accompanying
consolidated statements of income represent dividends declared as
applicable to the respective years.

(t)

Changes in accounting policy
Application of Accounting Standards, etc. for Revenue Recognition
The Implementation Guidance on Accounting Standard for Revenue
Recognition (ASBJ Statement No. 29, issued on March 31, 2020,
hereinafter referred to as “Revenue recognition accounting standards”) will
be applied from the beginning of the previous fiscal year.
We decided to recognize revenue when the promised goods or services
are transferred to the customer and recognize as revenue the amount
expected to be received at the time of completing the transfer of thepromised goods or service. In the Transportation business, we haverecognized revenue when we received the freight from customer, but forsatisfying the performance obligations, we decided to change the revenue
recognition. Certain subsidiaries have recognized the total sum received
from the customers as revenue. However, we considered the duties related
to providing the goods and the services to the customer and changed fromrecognizing the total sum received from the customer to the net value after
deducting the amount which we have to pay to the third party as an agent.
The application of revenue recognition accounting standards, etc., is inaccordance with the transitional treatment stipulated in Paragraph 84 of therevenue recognition accounting standards.
As a result, on the consolidated statements of income and comprehensive
income for the fiscal year ended March 31, 2022, “Operating revenue”

decreased by ¥15,001 million, “Operating costs” decreased by ¥15,396
million, both “Operating income” and “Income before income taxes”
increased by ¥395 million and “Retained earnings at the beginning balance”
decreased by ¥516 million, “Basic net income per share” increased by ¥1.43
and “Diluted net income per share” increased by ¥1.35 compared with theamounts that would have been reported without the change.
In the consolidated balance sheet for the previous fiscal year, “Trade
receivables,” which were shown in “Current assets,” will be changed from“Trade receivables” and “Contract assets” from the fiscal year ended March
31, 2022. “Other current liabilities,” which was presented in “Current
liabilities,” is now included in “Contract liabilities” and “Other current
liabilities” from the current fiscal year. However, in accordance with thetransitional treatment stipulated in Paragraph 89-2 of the AccountingStandard for Revenue Recognition, no reclassification has been applied forthe previous fiscal year in accordance with the new presentation method.
The impact on segment information is described in the related section.
In accordance with the transitional treatment stipulated in Paragraph89-3 of the Accounting Standard for Revenue Recognition, notes on“Revenue Recognition” related to the previous fiscal year are not included.
Application of Accounting Standards for Fair Value Measurement
The Company and its subsidiaries apply “Implementation Guidance on
Accounting Standard for Fair Value Measurement” (ASBJ Guidance No.
31, June 17, 2021) since the year ended March 31, 2023 and prospectively
apply the new accounting policies under ASBJ Guidance No. 31 inaccordance with the transitional provisions set out in Paragraph 27-2 of
ASBJ Guidance No. 31.
Within the notes of “Financial Instruments,” where disclosure is made bylevel of fair values of financial instruments, information on investment funds
relevant to the year ended March 31, 2022 is not provided in accordancewith Paragraph 27-3 of the ASBJ Guidance No. 31.
(u)Accounting policies issued but not yet adopted
Accounting Standard for Current Income Taxes (ASBJ Statement No.
27, October 28, 2022, ASBJ)
Accounting Standard for Presentation of Comprehensive Income (ASBJ
Statement No. 25, October 28, 2022, ASBJ)
Guidance on Accounting Standard for Tax Effect Accounting (ASBJ
Guidance No. 28, October 28, 2022, ASBJ)(1) Overview
The transfer of JICPA’s practical guidelines on tax effect accounting
to ASBJ was completed with the issuance of standards and guidance
including ASBJ Statement No. 28, Partial Amendments to AccountingStandard for Tax Effect Accounting (hereinafter collectively referred
to as “ASBJ Statement No. 28, etc.”) in February 2018. During theirdeliberations, it had been determined that the following two issues
would be further discussed subsequent to the issuance of ASBJ
Statement No. 28. The above standards and guidance were issued as aresult of the discussions on the two issues below:
Categories in which income tax expense should be recorded (taxes
on other comprehensive income)Tax effects associated with sales of shares of subsidiaries, etc. (i.e.,shares of subsidiaries or affiliates) when the group taxation regime isapplied(2) Effective date
The standards and guidance will be effective from the beginning of
the fiscal year ending March 31, 2025.
(3) Effects of application of the standards and guidance
The effects of the application of Accounting Standard for Current
Income Taxes, etc., on the consolidated financial statements are
currently under evaluation.

(v)

Additional information(i) Stock Compensation for Directors
The Company has introduced a Board Benefit Trust (“BBT”) for
the Company’s directors, excluding outside directors, (the “Eligible
Directors”). The objective of the plan is to focus the Eligible Directors’
mindset towards enhancing the medium- to long-term corporate valueof the Company by clarifying the link between the compensation of
the Eligible Directors and the Company’s share value so that Eligible
Directors share with the shareholders not only the benefits of rising

share prices, but also the risks associated with falling shares. The Plan isa stock compensation plan whereby the Company’s shares are acquired
through a trust (the trust set up based on the Plan is hereinafterreferred to as the “Trust”) using funds contributed by the Company ascapital, and the acquired shares and money in the amount equivalent
to the value of the Company’s shares converted at market value (the“Company’s Shares, Etc.”) are granted to Eligible Directors throughthe Trust according to their positions or the like, pursuant to thepredetermined Rules on Stock Benefits for Directors. In principle, theCompany’s Shares, etc. are provided to Eligible Directors at the time ofretirement from a position of Eligible Director of the Company.
The shares of the Company held by the Trust were accounted
for as treasury stock under net assets. The assets, liabilities, income
and expenses of the Trust were consolidated in the accompanying
consolidated financial statements. The book value and number ofshares held by the Trust at March 31, 2023 and 2022 were ¥234 million($1,746 thousand) and 151 thousand shares and ¥171 million and 87
thousand shares, respectively.
(ii) The Stock Benefit Trust ( J-ESOP)In the Company and some of its subsidiaries, for the purpose ofenhancing the motivation for rising share prices, the Employee Stock
Ownership Plan ( J-ESOP) for employees who meet the prescribed
requirements has been introduced.
The Stock Benefit Trust ( J-ESOP) is an incentive plan that grants
the Company’s shares to employees of some companies in the groupthat satisfy the requirements of the Policy on Stock Compensationprescribed in advance by the Company. These companies will award
points to Eligible Employees based on their length of service andindividual degree of contribution and the like and will grant the
number of Company’s shares equivalent to the awarded points when
the terms and conditions are met and vested rights are granted. The
shares granted to Eligible Employees, including future shares, will beacquired using cash funds contributed in advance to the trust accountestablished trust & Custody Services Bank, Ltd., and will be managed
separately as trust assets.
The shares of the Company held by the Trust were accounted
for as treasury stock under net assets. The assets, liabilities, income
and expenses of the Trust were consolidated in the accompanying
consolidated financial statements. The book value and number of shares
held by the Trust at March 31, 2023 and 2022 were ¥6,482 million($48,373 thousand) and 4,495 thousand shares and ¥6,649 million and
4,611 thousand shares, respectively.
(iii) Employee Shareholding Incentive Plan (E-Ship®)
The Company has introduced an Employee Shareholding
Incentive Plan (E-Ship®) for the welfare of its employees. The planis an incentive plan that covers all employees participating in the
Shareholding Association.
Under the plan, the Company, as the trustor, entered into a specified
trust cash funding agreement (the “E-Ship Agreement”) with a trustbank as trustee to set up the trust (the “E-Ship Trust”). The E-Ship
Trust purchases the number of shares of the Company that the
Shareholding Association expects to purchase over the next four years
and subsequently sells them periodically over a four-year period to the
Shareholding Association in accordance with certain conditions andmethods stipulated in the E-Ship Agreement. At the end of the trust
period, the E-Ship Trust’s retained earnings, the accumulation of net
gain on sales of its shares, are distributed to the eligible employees inaccordance with the E-Ship Agreement. For its part, the Company
guarantees any retained loss and the accumulation of net loss on thesales of its shares and will pay off any amount of outstanding debt at
the end of the trust period as it guarantees the debt of E-Ship Trust.
The shares of the Company held by the E-Ship Trust are accounted
for as treasury stock under net assets. The assets, liabilities, income andexpenses of the E-Ship Trust were consolidated in the accompanying
consolidated financial statements. The book value and number of shares
held by the E-Ship Trust at March 31, 2023 and 2022 were ¥1,299
million ($9,694 thousand) and 1,140 thousand shares and ¥1,813
million and 1,590 thousand shares, respectively. The book value of bankloans of the E-Ship Trust recorded in the consolidated balance sheet
as of March 31, 2023 and 2022 were ¥1,258 million ($9,388 thousand)and ¥1,821 million, respectively.

3. Financial Instruments(a) Qualitative information on financial instruments(i) Policies on financial instruments
The Seino Group has implemented a Cash Management Systemfor effective investments and funding. Pursuant to this system, theCompany invests in short-term, low-risk instruments in accordancewith its internal fund management rules. The Company procures
funds mainly through financing such as bank loans and the issuanceof convertible bonds for investments in facilities, taking immediateliquidity into consideration.
(ii) Details of financial instruments and Risks
Trade receivables are exposed to the credit risk of customers. Someof the subsidiaries have receivables in foreign currency and are exposed
to foreign currency fluctuation risk.
Marketable and investment securities, which consist of held-tomaturity securities and equity securities of business entities with which
the Seino Group has business relationships, are exposed to stock
market fluctuation risk.
Trade payables have general terms and conditions and are mostly
due within one year. However, some of the subsidiaries have trade
payables denominated in foreign currency, which exposes them toforeign currency fluctuation risk.
Some bank loans and convertible bonds are used principally forcapital investments and are partially exposed to interest rate fluctuation
risk.
(iii) Risk Management for Financial Instruments
Monitoring of credit risk
In accordance with internal policies for credit risk management, eachsubsidiary monitors the creditworthiness of its customers and manages
the terms and conditions of payment, due dates and remaining balances
to reduce credit risk. With held-to-maturity securities, the Company
invests in bonds that have been highly rated by credit rating agencies
in accordance with its internal fund management rules. As a result, therisk is insignificant.
Monitoring market risk
The Board of the Directors regularly monitors market risk
using management methods which comply with internal market
risk management rules. For marketable securities, the Seino Group
monitors market prices every quarter and reviews the market conditions
and the financial position of and business relationship with the issuers.
Monitoring liquidity risk
The Company has a Cash Management System with its subsidiaries
and becomes the paying agent for the subsidiaries under the system.
The subsidiaries report their cash flow projections to the Company.
The Company has sufficient bank credit lines, including credit lines
with overdraft facilities, enabling the Seino Group to manage liquidity
risk.
(iv) Supplemental information on fair values
The fair value of financial instruments reflects variable factors and is,therefore, subject to change depending on different assumptions used.
(b) Fair values of financial instruments
The fair and carrying values of the financial instruments included in the
consolidated balance sheets at March 31, 2023 and 2022 other than thosefor which the fair value was extremely difficult to determine, are set forth in
the table below.

17Annual Report 2023

Carrying value
At March 31, 2023: (*2)
Short-term investments
Investment securities
		Total assets

¥

8,687
34,96843,655¥

Convertible bonds
Long-term bank loans
			Total liabilities¥

25,1509,388
34,538¥Carrying value
At March 31, 2022: (*2)
Short-term investments
Investment securities
			Total assets¥¥

Convertible bonds
Long-term bank loans
			Total liabilities¥¥

Fair value
Millions of yen¥¥¥¥

Difference

8,687
34,96843,655¥——¥—24,962
9,223
34,185¥

Fair value
Millions of yen

8,964
36,60945,573¥25,2009,821
35,021¥¥¥

Carrying value

Difference

8,964
36,60945,573¥——¥—24,775
9,716
34,491¥

Fair value

Difference

Thousands of U.S. dollars

At March 31, 2023: (*2)
Short-term investments
Investment securities
			Total assets

64,828260,955
325,783$$

Convertible bonds
Long-term bank loans
			Total liabilities$

187,687
70,059257,746

$

$
$
$
$

64,828260,955
325,783$——$—186,284
68,828255,112$(1,403)(1,231)(2,634)$Note 1: Cash and cash equivalents, trade receivables, short-term borrowings,
trade payables and the current portion of long-term bank loans areomitted because they are stated at the carrying amount as these aresettled in the short term and with fair values approximately equal tothe carrying amount.
Note 2: Unlisted equity securities and investments in partnerships stated at
the amount of net assets attributed to the ownership percentage are
not included in the table above.
(i) The following were unlisted equity securities and investments inpartnerships stated at the amount of net assets attributed to theownership percentage:
Millions of yen

2023

2022

Thousands of
U.S. dollars
2023

Carrying value:
Unlisted equity securities, otherthan those of affiliates
Investments in partnerships

¥
¥

1,863
1,916
3,779

¥
¥

1,766
1,762
3,528

$
$

13,903
14,29928,202(ii) The redemption schedule for financial assets with maturities at
March 31, 2023 was as follows:
Due after Due after
1 year
5 years
throughthrough
5 years
10 yearsMillions of yen

Due
after
10 years

101,065
8,687
89,920¥——
28,713

¥—
—
609

¥—
—
—

—
199,672140
28,853

—
609

—
¥—

Due within
1 year
At March 31, 2023:
Cash and cash equivalents ¥Short-term investments
Trade receivables
Investment securities– bonds and other
¥

18

¥

¥

99,525
8,964
88,342¥——29,668

¥—
—
639

¥—
—
—

—
196,831

¥

—
639

—
¥—

Due after Due after
1 year
5 years
Due within
throughthrough
1 year
5 years
10 yearsThousands of U.S. dollars

Due
after
10 years$——
214,276

$—
—
4,545

$—
—
—

1,045
$ 215,321

$

—
4,545

—
$—

At March 31, 2023:
Cash and cash equivalents $754,216
Short-term investments
64,828671,045
Trade receivables
Investment securities—– bonds and other$ 1,490,089

(425)
(105)
(530)

¥

Due
after
10 years

At March 31, 2022:
Cash and cash equivalents ¥Short-term investments
Trade receivables
Investment securities– bonds and other
¥

(188)
(165)
(353)

¥

Due after Due after
1 year
5 years
throughthrough
5 years
10 yearsMillions of yen

Due within
1 year128
29,796¥(iii) For the repayment schedule for long-term bank loans at March 31,
2023, see Note 9, “Short-term Borrowings and Long-term Debt.”(c)Classification and breakdown of the fair value of financial
instruments
The fair value of financial instruments is classified into the following
three levels based on the observability and materiality of the inputs used to
calculate the fair value.
Level 1: Fair value based on observable (unadjusted) quoted market prices
in active markets for identical assets or liabilities.
Level 2: Fair value calculated using inputs other than Level 1 inputs thatare directly or indirectly observable.
Level 3: Fair value calculated using significant unobservable inputs
When multiple inputs that have a significant effect on the fair value
calculation are used, the fair value is classified into the lowest level fromwhich significant inputs were used.
(i) F inancial instruments recorded on the consolidated balance sheet atfair value

At March 31, 2023:
Securities andinvestment securities
		Equity securities ¥		Bonds
		Other				 Total assets ¥

At March 31, 2022:
Securities andinvestment securities
		Equity securities ¥		Bonds
		Other¥			Total assets

Level 1Millions of yen
Level 2
Level 334,816 ¥—
—
3,137
—
15
34,816 ¥3,152

Level 1

¥—
—
—
¥—

Millions of yen
Level 2
Level 336,416 ¥—
—
3,119
—
11,00036,416 ¥ 14,119

¥—
—
—
¥—

Total

¥ 34,816
3,137
15¥ 37,968

Total¥ 36,416
3,119
11,000¥ 50,535

Investment trusts were not included in the table above. The amount of
the investment trusts reported in the consolidated balance sheet was ¥74
million in financial assets for the fiscal year ended March 31, 2022.

Level 1

Thousands of U.S. dollars
Level 2
Level 3At March 31, 2023:
Securities andinvestment securities$ 259,821 $—Equity securities—
23,410		Bonds—112
		Other				 Total assets $ 259,821 $ 23,522

$—
—
—
$—

Total

$ 259,821
23,410112$ 283,343(ii) F inancial instruments other than those recorded on the consolidatedbalance sheets at fair value
Millions of yen
Level 2
Level 3

Level 1At March 31, 2023:
Convertible bonds¥——Long-term bank loans
			Total liabilities ¥—¥24,962
9,223¥ 34,185

Millions of yen
Level 2
Level 3

Level 1At March 31, 2022:
Convertible bonds¥——Long-term bank loans
			Total liabilities ¥—Level 1At March 31, 2023:
Convertible bonds$——Long-term bank loans
			Total liabilities $—

¥—
—
¥—

¥24,775
9,716¥ 34,491

¥—
—
¥—

Thousands of U.S. dollars
Level 2
Level 3
$ 186,284
68,828$ 255,112

$—
—
$—

5. Investments
At March 31, 2023 and 2022, short-term investments consisted of thefollowing:

Time deposits with an original maturity¥of more than three months¥

Total¥24,775
9,716¥34,491

Total$ 186,284
68,828$ 255,112

Note: Valuation Techniques and Inputs Used in Calculating Fair Value
Investment securities
Listed stocks are valued using quoted market prices. Since listed stocks
are traded in active markets, their fair value is classified as Level 1 fair value.
Bonds and other are classified as Level 2 fair value because they are tradedinfrequently, and there prices are not considered quoted prices in an active
market.
Convertible bonds
Convertible bonds are based on prices quoted by correspondent financial
institutions and are classified as Level 2 fair value because they are tradedinfrequently, and there prices are not considered quoted prices in an active
market.
Long-term bank loans
The fair value of long-term debt is based on the present value of future
cash flows discounted using the current borrowing rate for similar debt ofcomparable maturity and is classified as Level 2 fair value.

Marketable securities:
Equity securities
Bonds
Other
		 Total marketable securities
Other non-marketable securities

Millions of yen

Merchandise and finished products
Work in process
Raw materials and supplies

2023
14,502974
912¥ 16,388
¥

2022
9,760
681
796
¥ 11,237¥

Thousands of
U.S. dollars
2023$ 108,224
7,269
6,806
$ 122,299

8,687
8,687

$
$

¥
¥

8,964
8,964

64,82864,828Millions of yen

2022

Thousands of
U.S. dollars
2023

34,816137
1534,9683,779
38,74736,416118
75
36,6093,528
40,137$ 259,821
1,022
112
260,955
28,202$ 289,157

2023
¥

¥

¥

¥

Marketable securities classified as available-for-sale are stated at fairvalue with unrealized gains and losses excluded from current earnings andreported as a net amount within the net assets account until realized. At
March 31, 2023 and 2022, gross unrealized gains and losses for marketablesecurities classified as available-for-sale were as follows:
Gross
Gross
unrealized unrealized
gains
lossesMillions of yen

Cost
At March 31, 2023:
Equity securities
Bonds
Other
At March 31, 2022:
Equity securities
Bonds
Other

At March 31, 2023:
Equity securities
Bonds
Other

¥
¥
¥
¥

14,753119
13
14,885¥¥

15,065109
27
15,201¥¥

20,55718
2
20,577
21,8669
48
21,923¥¥¥¥

Fair andcarryingvalue(494) ¥——
(494) ¥

34,816137
1534,968(515) ¥——
(515) ¥

36,416118
75
36,609Thousands of U.S. dollars$ 110,097
888
97$ 111,082$ 153,411
134
15$ 153,560$$(3,687) $ 259,821
—
1,022
—
112
(3,687) $ 260,955

At March 31, 2023 and 2022 investments in and long-term loans toaffiliates and nonconsolidated subsidiaries consisted of the following:
Millions of yen

2022

Thousands of
U.S. dollars
2023

21,892¥

17,001$ 163,373

4,652¥ 26,544¥

3,630
20,631

34,717$ 198,090

4. Inventories
Inventories at March 31, 2023 and 2022 were as follows:

Thousands of
U.S. dollars
2023

2022

At March 31, 2023 and 2022, investment securities consisted of thefollowing:Total¥24,962
9,223¥34,185

Millions of yen

2023

Equity securities of affiliates andnonconsolidated subsidiaries
Investments in partnerships ofnonconsolidated subsidiaries

2023
¥

19

Annual Report 2023

6. Property and Equipment
At March 31, 2023 and 2022, property and equipment consisted of thefollowing:
Millions of yen

2023

Property and equipment, at cost:
Land
Buildings and structures
VehiclesMachinery and equipment
Construction in progress
Other

2022

Thousands of
U.S. dollars
2023¥ 187,960 ¥ 185,077 $ 1,402,687
320,726
310,519
2,393,477
114,751
114,468
856,351
51,44550,352
383,918
2,672
4,623
19,94014,68415,090109,582
692,238
680,129
5,165,955(349,011)(338,449)(2,604,560)
Less accumulated depreciation
		 Total property and equipment ¥ 343,227 ¥ 341,680 $ 2,561,395

One of the consolidated subsidiaries elected to carry out a one-timerevaluation to restate the cost of land used for business operations at values
reassessed on March 31, 2002, reflecting adjustments for land shape andother factors based on appraisal values issued by the Japanese National
Tax Agency in accordance with the Law Concerning Revaluation ofLand. According to the law, the excess of the original book value over
the reassessed value, net of the tax effect and minority interest portions,is recorded in net assets as land revaluation decrement account in theaccompanying consolidated balance sheets. At March 31, 2023 and 2022,
the difference between the carrying values of land used for business
operations after revaluation over the current market values of the land at the
fiscal year-end amounted to ¥2,084 million ($15,552 thousand) and ¥1,851
million, respectively.

7. Real Estate for Rent
Some of the Company’s subsidiaries own land and facilities for rent at
locations where the business branches were closed or redeployed branches
used to be. The carrying values in the consolidated balance sheets, changes
during the years ended March 31, 2023 and 2022 and the fair values of therental properties were as follows:
Millions of yen

Carrying value at the beginning of year ¥Net changes during the year¥
Carrying value at the end of year
Fair value at the end of year *¥2023
19,664463
20,12730,1932022
18,242
1,422¥ 19,664¥ 27,569¥

Thousands of
U.S. dollars
2023$ 146,746
3,455$ 150,201$ 225,321

Note: * Fair value was measured at the estimated value based principally on areal estate appraisal or property tax bases.
Profit and loss recorded for rental properties for the fiscal years ended
March 31, 2023 and 2022 were as follows:
Millions of yen

Operating revenue
Operating costs
Income from rental operations
Loss on disposal of rental property
and other

¥

¥

2023
2,192
583
1,609

¥

(20) ¥

2022
2,013
512
1,501

Thousands of
U.S. dollars
2023$ 16,358
4,351
12,007(402) $At the beginning of year
New consolidations
New obligations
Changes in estimated obligations
and accretion
Settlement payments
Other
At the end of year¥¥

Asset retirement obligations are based upon estimated future restoration
obligations pursuant to real estate lease agreements and land leasehold rights
agreements mainly for logistics terminals. The asset retirement obligations
are calculated based upon the useful life designated by law or the estimateduseful life period and are discounted by the yield rate of government bonds.
Asset retirement obligations for the years ended March 31, 2023 and2022 were as follows:

2023
3,717
8
116

¥

43
(48)
3
3,839 ¥

2022
3,628
8
44

Thousands of
U.S. dollars
2023$ 27,739
60
865

44
321
(7)
(358)
—
22
3,717 $ 28,649

9. Short-term Borrowings and Long-term Debt
At March 31, 2023 and 2022, short-term borrowings consisted of thefollowing:
Millions of yen

Unsecured bank overdrafts with interest
rates ranging from 0.275% to 0.992%¥
per annum at March 31, 2023
Secured bank overdrafts with interest rates
0.900% per annum at March 31, 2023
Short-term bank loans, unsecured withinterest rates ranging from 0.152% to0.992% per annum at March 31, 2023
¥

2023

1,130

2022

¥

430

50
3,580
4,760

Thousands of
U.S. dollars
2023
$

8,433

50

¥

2,761
3,241

373

$

26,71635,522At March 31, 2023, the Company and certain subsidiaries had unsecured
overdraft agreements with 11 banks. Under the agreements, the Company
and the subsidiaries were entitled to withdraw up to ¥37,330 million($278,582 thousand). The Company and the subsidiaries were not obligatedto pay commitment fees on the unused portions of the overdraft facilities.
At March 31, 2023 and 2022, long-term debt consisted of the following:

Zero coupon convertible bonds due
March 2026, including unamortizedpremiums (¥150 million ($1,119
thousand) at March 31, 2023)
Loans from government agencies andbanks, repayable through 2047, withinterest rates ranging from 0.210% to5.850% per annum at March 31, 2023:
		Secured
		Unsecured
Capitalized lease obligations
Less current portion

Millions of yen

2022

Thousands of
U.S. dollars
2023¥

25,15025,200$187,687¥505
10,0589,679
45,392(2,490)42,902 ¥10,462
10,68546,927(2,603)44,324 $75,05972,231
338,746(18,582)
320,164

2023

¥

580

3,769

At March 31, 2023 and 2022, respectively, the following assets were
pledged as collateral for certain long-term debt:(149)

8. Asset Retirement Obligations

20

Millions of yen

Millions of yen

Thousands of
U.S. dollars
2023

1,227
396

$

2023
Land
Buildings and structures

¥

2022

¥

1,117
413

9,157
2,955

The aggregate annual maturities of long-term debt as of March 31, 2023
were as follows:Year ending March 31,
2024
2025
2026
2027
2028
Thereafter

Millions of yen
2,490
2,235
28,985
1,876
1,784
7,872
¥
45,242¥Thousands of
U.S. dollars$
18,582
16,679216,306
14,00013,31458,746$337,627

10. Commitment Line Agreement
Consolidated subsidiary Tikutakubin Co., Ltd. (Nerima Ward, Tokyo)
had a facility agreement in the amount of ¥2,000 million ($14,925
thousand) as of March 31, 2023 to ensure its access to financing. In
addition, Tikutakubin Co., Ltd.’s outstanding balance of borrowings under
the agreement was ¥2,000 million ($14,925 thousand) on March 31, 2023.

11. Financial Covenants
Consolidated subsidiary Tikutakubin Co., Ltd. (Nerima Ward, Tokyo) isa party to a syndicated loan agreement that included the following financial
covenants.
1.	The amount of equity on the balance sheets of Tikutakubin Co., Ltd.
(Nerima Ward, Tokyo) is required to be equal to or greater than 75%
of equity on the balance sheet as of the fiscal year ended March 31,
2019 and the previous fiscal year ended March 31, 2020 or later.
2.	An ordinary loss on the profit and loss statement of Tikutakubin Co.,
Ltd. (Nerima Ward, Tokyo) is not allowed for the two consecutive
years as of the fiscal year ended March 31, 2020 or later.
Remaining balances of debt were as follows:
Millions of yen

Short-term borrowings
Current portion of long-term debt
Long-term debt

2023
2,000
85
489
¥
2,574
¥

2022
—
—
—
¥
—
¥

Thousands of
U.S. dollars
2023$ 14,926
634
3,649$ 19,209

12. Employee Retirement Benefits
The Company and its subsidiaries have mainly unfunded defined
benefit plans with rules and regulations determined by the Company andeach subsidiary. In addition, some subsidiaries have Smaller Enterprise
Retirement Allowance Mutual Aid or Specific Retirement Allowance
Mutual Aid. Also, the Company and certain subsidiaries have defined
contribution plans.
Other subsidiaries have funded defined benefit plans. One company
belongs to a comprehensive employee pension fund for the defined benefit
corporate pension plan. One company has established a retirement benefit
payment trust. Some of the consolidated subsidiaries have joined a multiemployer welfare pension fund plan. Those for which it is impossible tocalculate in a rational manner the amount of the pension assets whichcorresponds to the amount of the contributions are accounted for in thesame way as the defined contribution pension plan. The retirement benefit
obligation of certain subsidiaries was calculated using the simplified method
as permitted by the accounting standard for employee retirement benefits.
As of and for the year ended March 31, 2023 and 2022, defined benefit
plans, including plans applying the simplified method were as follows:(a) Movements in retirement benefit obligation:
Thousands of
U.S. dollars
2023
2022
2023
¥ 86,792 ¥ 85,852 $ 647,702
4,342
4,310
32,403
199
196
1,485
284
(70)
2,119
(4,078)(2,866)(30,433)
—
(650)
—
128
20
955
¥ 87,667 ¥ 86,792 $ 654,231
Millions of yen

At the beginning of year
Service cost
Interest cost
Actuarial differences
Benefits paid
Past service cost
OthersAt the end of year(b) Movements in plan assets:
Thousands of
U.S. dollars
2023
2022
2023
At the beginning of year
¥ 4,464 ¥4,413 $ 33,313
343
179
2,560
Actuarial differences2
2
15
Contributions paid by the employer
(280)
(130)
(2,090)Benefits paid¥
4,529 ¥
4,464 $ 33,798
At the end of year
Millions of yen(c) Reconciliation from retirement benefit obligation and plan assets toemployee retirement benefit asset or liability:
Thousands ofMillions of yen
U.S. dollars
2023
2022
2023
Funded retirement benefit obligation ¥7,844 ¥
7,737 $ 58,537
Plan assets(4,529)(4,464)(33,798)
3,315
3,273
24,739Unfunded retirement benefit obligation
79,82379,055595,694
Net employee retirement benefit liability ¥ 83,138 ¥ 82,328 $ 620,433
Employee retirement benefit liability
Employee retirement benefit asset
Net employee retirement benefit liability ¥83,138—
83,138¥82,328—82,328620,433—$ 620,433(d) Net periodic retirement benefit expenses, including plans applying
the simplified method:
Thousands ofMillions of yen
U.S. dollars
2023
2022
2023
Service cost
¥ 4,342 ¥
4,310 $ 32,403
Interest cost
199
196
1,485
Amortization of actuarial differences
1,164
1,237
8,687
(91)
(86)
(679)
Amortization of past service cost
5,614 ¥
5,657 $ 41,896
Net periodic retirement benefit expenses ¥(e) Retirement benefit adjustment included in other comprehensive
income, before tax effects:

Past service cost
Actual differences
Total balance

Thousands ofMillions of yen
U.S. dollars
2023
2022
2023
¥
91 ¥
(564) $
679
(1,223)(1,485)(9,127)¥ (1,132) ¥ (2,049) $(8,448)21

Annual Report 2023(f ) Retirement benefit adjustment in accumulated other comprehensive
income, before tax effects:
Thousands ofMillions of yen
U.S. dollars
2023
2022
2023
Past service cost yet to be recognized ¥(914) ¥ (1,006) $(6,821)
Actuarial differences yet to be recognized
4,779
6,002
35,664
Total balance¥
3,865 ¥
4,996 $ 28,843

2023
5%
1%
94%
100%

Cash and cash equivalents
Bonds
Equity securities
Total*

Percent

2022
10%
1%
89%
100%

Note: * For the fiscal years ended March 31, 2023 and 2022, the assets of theretirement benefit payment trust constituted 98% of total plan assets.
(ii) Long-term expected rate of return
Current and target asset allocations, historical and expected
returns on various categories of plan assets have been considered indetermining the long-term expected rate of return.
(h) Actuarial assumptions
The principal actuarial assumptions (expressed as weighted averages):2023(mainly) 0.1%
0.0%

Discount rateLong-term expected rate of return2022(mainly) 0.1%
0.0%(i) Defined contribution plan
Required contributions to the contribution plans of the Company andcertain consolidated subsidiaries were ¥369 million ($2,754 thousand) and¥359 million for the years ended March 31, 2023 and 2022, respectively.

13. Contingent Liabilities
At March 31, 2023 and 2022, the Seino Group was contingently
liable for trade notes and discount notes endorsed to affiliates and third
parties and for guarantees, including substantial guarantees, principally ofindebtedness of third parties in the aggregate amount of ¥221 million ($1,649
thousand) and ¥1,100 million, respectively.

411
2,513
2,924

$

2023
¥
¥

2022

¥
¥

402
2,584
2,986

$

3,067
18,754
21,821

Under the Japanese Corporate Law (the “Law”) and regulations, theentire amount paid for new shares is required to be designated as common
stock. However, a company may, by a resolution of the Board of Directors,
designate an amount not exceeding one half of the price of the new sharesas additional paid-in capital, which is included in capital surplus.
Under the Law, in cases in which a dividend distribution of surplus ismade, the smaller of an amount equal to 10% of the dividend or the excess,if any, of 25% of common stock over the total of additional paid-in capitaland legal earnings reserve must be set aside as additional paid-in capitalor legal earnings reserve. Legal earnings reserve is included in retained
earnings in the accompanying consolidated balance sheets.
Under the Law, legal earnings reserve and additional paid-in capital could
be used to eliminate or reduce a deficit by a resolution of the shareholders’meeting. Additional paid-in capital and legal earnings reserve may not be
distributed as dividends. All additional paid-in capital and all legal earnings
reserve may be transferred to other capital surplus and retained earnings,
respectively, which are potentially available for dividends.
At March 31, 2023 and 2022, capital surplus consisted principally of
additional paid-in capital. In addition, retained earnings included legal
earnings reserve of the Company in the amount of ¥4,262 million ($31,806
thousand) at March 31, 2023 and 2022.
The maximum amount that the Company can distribute as dividends
is calculated based on the non-consolidated financial statements of theCompany in accordance with Japanese laws and regulations.
During the year ended March 31, 2023, the Company paid interim
dividends of ¥11 per share, amounting to ¥2,060 million ($15,373
thousand). In addition, at the annual shareholders’ meeting held on June 28,2023, the shareholders approved cash dividends of ¥45 per share, amounting
to ¥8,431 million ($62,918 thousand). The appropriation had not been
accrued in the consolidated financial statements as of March 31, 2023 assuch appropriations are recognized in the period in which they are approvedby the shareholders.

16. Revenue Recognition(a) Disaggregating revenue from contracts with customers
The disaggregation of revenue from contracts with customers is describedin the segment section.

14. Lease Commitments
As lessee, the Seino Group has entered into various rental and leaseagreements for land and buildings to be used for truck terminals andwarehouses that are generally cancelable with a few months advance notice,
except for certain operating lease agreements. The aggregate minimum
future lease payments for such noncancelable operating lease agreements,
including the imputed interest portion, as lessee at March 31, 2023 and2022 were as follows:
Millions of yen

Thousands of
U.S. dollars
2023

2,768
14,266
17,034

$

2023
¥
¥

2022

¥
¥

1,594
12,323
13,917

20,657
106,462$ 127,119

A certain subsidiary engaged in leasing operations as lessor enters into
various lease agreements with third parties principally for vehicles. The
leases are categorized as operating leases. At March 31, 2023 and 2022, theaggregate future minimum lease commitments to be received for such noncancelable lease agreements, including the imputed interest, were as follows:

22

Thousands of
U.S. dollars
2023

15. Net Assets(g) Plan assets(i) Plan assets comprise:

Operating leases:
Due within one year
Due after one year

Operating leases:
Due within one year
Due after one year

Millions of yen(b) Basis for understanding revenue arising from contracts with customers
The Seino Group recognizes revenue by applying the following five-step
approach.
Step 1: Identify the contract with the customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the performance obligations in thecontract.
Step 5: Recognize revenue when (or as) the entity satisfies a performanceobligation.
Basic information in understanding revenue is as stated in Note 2(n),“Accounting for revenue and expense recognition.”(c) The satisfaction of performance obligations based on the contracts withcustomers and cashflows arising from such contracts and the amountand timing of revenue arising from contracts with customers existing at
the end of the current fiscal year expected to be recognized in and after
the following fiscal year

17. Stock Options(i) Contract asset and contract liability balances
2022

Thousands of
U.S. dollars
2023

1. Expenses related to stock options and gain on reversal of stock acquisitionrightsNot applicable¥ 118,038$ 885,448

2. Details of stock options

118,650

889,866

366
1,051
4,371
3,631

7,843
9,619
27,09728,903

Millions of yen

2023

Receivables from contracts with¥ 118,650
customers beginning balance
Receivables from contracts with
119,242
customers ending balanceContract assets beginning balance
1,051
Contract assets ending balance
1,289
Contract liabilities beginning balance
3,631
Contract liabilities ending balance
3,873

The amount of revenue recognized in the current period fromperformance obligations that were satisfied in prior periods was ¥2,554
million ($19,060 thousand) and ¥3,396 million for the years ended March
31, 2023 and 2022, respectively.
Contract assets consist mainly of unbilled work-in-progress receivables
related to revenue recognized based on the progress in the softwareand construction business. In addition, Contract assets are increased by
the recognition of revenue and decreased by the transfer to receivables
arising from contracts with customers when the Companies’ rights to theconsideration become unconditional upon invoicing or delivery. Contract
liabilities consist primarily of advances received from customers on car
sales and repair services. Contract liabilities are increased by the receipt ofadvances from customers and decreased by the reversal of such advances
upon the recognition of revenue.
(ii) Transaction price allocated to remaining performance obligations
Year ending March 31,
2024
2025
2026
Thereafter
Total

Millions of yen
2023
¥
1,701
402
174
9
¥
2,286

Year ending March 31,
2023
2024
2025
Thereafter
Total

Millions of yen
2022
¥
2,204
506
170
2
¥
2,882

Thousands of
U.S. dollars
2023$
12,694
3,000
1,299
67
$
17,060

The total transaction price allocated to unsatisfied performanceobligations was mainly for car repair service contracts in the Vehicle Sales
Business, in which revenue is expected to be recognized at each six-monthlegally mandated inspection. The initial contract period is for three years,
followed by two-year periods.
The Company and its consolidated subsidiaries apply the practical
expedient to transaction prices allocated to the remaining performanceobligations of one year or less and long-term contracts of the Transportation
Services Business and have the right to receive amounts of considerationthat correspond to the value to the customer for the portion of performancecompleted to date.
Therefore, pursuant to Paragraph 19 of the Implementation Guidanceon Accounting Standard for Revenue Recognition, revenue is recognizedat the amount the companies are entitled to claim and is not presented.
In addition, there are no material amounts of consideration arising fromcontracts with customers that are not included in the transaction prices.

(1) S tock options that existed in the year ended March 31, 2023 were as
follows:

Stock Option #1
Stock Option #2
Company (Subsidiaries)
Hacobell Inc.
Hacobell Inc.
Title and number of grantees
1 director and 29 officers 1 director and 2 officers(Subsidiaries)
Number of stock options 7,461 common shares
3,349 common shares
Grant date
March 28, 2023
March 28, 2023
Conditions for vesting*1*1
Requisite service period
No provisions
No provisions
From March 28, 2023 to From March 28, 2023 to
Exercise period
March 27, 2033
March 27, 2033

Note:*1 Conditions for vesting are as follows:(a) W hen exercising stock acquisition rights, the person who holds thestock acquisition rights or stock acquisition rights to exercise (hereinafterreferred to as the “Rights Holder”) subject to the condition that theacquisition events specified in each item of conditions’ have not occurred,
the exercise of the stock acquisition rights for which an acquisition event
has occurred shall not be permitted. However, this does not apply if
Hacobell Inc. specifically approves the exercise.
(b) The Rights Holder shall not be able to exercise the stock acquisitionrights until Hacobell Inc. shares are listed on any financial instruments
exchange. However, this does not apply if Hacobell Inc. specificallyapproves the exercise.
(c) Stock acquisition rights shall be exercised in units of one stockacquisition right, and the partial exercise of each stock acquisition rightshall not be permitted.
(2) Stock option activity during the year ended March 31, 2023 was asfollows:
Company (Subsidiaries)
Before vested
As of March 31, 2022
GrantedForfeited
VestedOutstanding
After vested
As of March 31, 2022
GrantedForfeited
VestedOutstanding(3) Price information is as follows:
Company (Subsidiaries)
Exercise price
Average stock price at exercise
Fair value at the grant date

Stock Option #1
Hacobell Inc.

SharesStock Option #2
Hacobell Inc.

—
7,461
—
—
7,461

—
3,349
—
—
3,349

—
—
—
—
—

—
—
—
—
—

Yen
Stock Option #1
Stock Option #2
Hacobell Inc.
Hacobell Inc.
35,00035,000————3. Assumptions used to measure fair value of stock options
Because Hacobell Inc. was an unlisted company, the stock options were
measured based on their intrinsic value instead of their market value. The
intrinsic value of each stock option is estimated based on comparable
multiple valuation methods.

23

Annual Report 2023

4. Estimation of the number of vested stock options
Because it is difficult to reasonably estimate the number of stock options
that will expire in the future, the actual number of forfeited stock options isused.
5. Total intrinsic value of stock options(1) The total intrinsic value of the stock options as of March 31, 2023 waszero.
(2) The total intrinsic value of the stock options exercised during the year
ended March 31, 2023 was not applicable.

18. Income Taxes
The tax effects of temporary differences that give rise to a significant
portion of deferred tax assets and liabilities at March 31, 2023 and 2022
were as follows:
Millions of yen

Thousands of
U.S. dollars
2023

2023
2022
Deferred tax assets:
Employee retirement benefit liability ¥ 28,769 ¥ 28,608 $618
570
Enterprise tax accruals
4,013
4,045
Accrued bonuses
1,231
1,314
Intercompany capital gains
1,033
854
Operating loss carryforwards
2,062
1,957
Loss on assets transferred
12,331
12,343
Impairment loss on fixed assets
298
231
Allowance for doubtful accounts
6,682
6,656
Other
57,03756,578(15,884)(15,241)
Less valuation allowance
41,153
41,337
Deferred tax liabilities:
8,104
8,540
Deferred capital gains
Unrealized gains on available-forsale securities
5,774
6,240
Valuation adjustments forconsolidation
11,222
11,221
3,363
3,553
Other
28,46329,554¥ 12,690 ¥ 11,783 $Net deferred tax assets

214,694
4,612
29,9489,186
7,709
15,38892,022
2,224
49,866425,649(118,537)
307,11260,47843,09083,74625,097
212,411
94,701

In assessing the realizability of deferred tax assets, management of the
Seino Group considers whether some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets
is dependent upon the generation of the future taxable income during theperiods in which those temporary differences become deductible. At March
31, 2023 and 2022, a valuation allowance was provided to reduce deferred
tax assets to the extent that the management believed that the amount of
the deferred tax assets was not realizable.
The reconciliation of the statutory tax rate and the effective tax rate forthe years ended March 31, 2023 and 2022 was as follows:

Japanese statutory tax rate
Increase (decrease) due to:Permanently nondeductible expenses
Tax exempt income
Local minimum taxes - per capita levy
Amortization of goodwill
Equity in net income of affiliates
Changes in valuation allowance
Different tax rates applied to the consolidated
subsidiaries
Tax credit for salary growth
Other
Effective income tax rate

0.3
(0.2)
2.4
2.2
(2.3)
1.8

0.2
(0.2)
2.5
2.0
(1.6)
0.3

4.1
(0.2)
(0.1)
37.9%

4.2
—
0.4
37.7%

The Company and some of its domestic consolidated subsidiaries haveadopted the group tax sharing system from the fiscal year ended March 31,
2023. In addition, corporation tax and local corporation tax, as well as theirtax effects, are accounted for and disclosed in accordance with Practical
Solution on the Accounting and Disclosure under the Group Tax Sharing
System (PITF No. 42, August 12, 2021).

19. Comprehensive Income
Amounts reclassified to net income (loss) in the current period thatwere recognized in other comprehensive income in the current or previous
periods and the tax effects for each component of other comprehensive
income for the years ended March 31, 2023, 2022 and 2021 were as follows:
2023

Millions of yen

Net unrealized gains on availablefor-sale securities:(Decrease) increase during the year ¥ (1,417) ¥92
Reclassification adjustments
Subtotal, before tax(1,325)466
Tax effectSubtotal, net of tax(859)
Foreign currency translation
adjustments:
Increase (decrease) during the year
Reclassification adjustments
Subtotal, before tax
Tax effectSubtotal, net of tax

Retirement benefit adjustment:
Increase (decrease) during the year
Reclassification adjustments
Subtotal, before tax
Tax effectSubtotal, net of tax
Shares of other comprehensive
income of affiliates accounted forusing equity method:
Increase (decrease) during the year
Reclassification adjustments
Subtotal
		Total other comprehensive income ¥24

Percentage of pretax
income
2023
2022
29.9%
29.9%

124
—
124
—
124

2023

2022

Thousands of
U.S. dollars
2023(854) ¥ 8,453 $ (10,575)(22)(1,034)
687
(876)
7,419
(9,888)207(2,036)
3,478
(669)
5,383
(6,410)

49
—
49
—
49

Millions of yen

59
1,073
1,132
(388)
744

2021

(51)
—
(51)
—
(51)

2022

2021

899
1,150
2,049
(704)
1,345

(382)
1,335
953
(326)
627

925
—
925
—
925
Thousands of
U.S. dollars
2023

754
608
(73)
2
(54)
15
756
554
(58)
765 ¥ 1,279 ¥ 5,901 $

440
8,008
8,448
(2,896)
5,552

5,627
15
5,642
5,709

20. Business Combinations(Merger among consolidated subsidiaries)
At the meeting of the Board of Directors held on April 4, 2022, theCompany resolved to conduct an absorption type merger with Netz Toyota
Gifu Co., Ltd. as the surviving company and Toyota Corolla Gifu Co., Ltd.
as the absorbed company.
1. Overview of the transaction(1) N ames and businesses of the combining Companies
Name of the surviving Company: Netz Toyota Gifu Co., Ltd.
Business: Vehicle dealership
Name of the absorbed Company: Toyota Corolla Gifu Co., Ltd.
Business: Vehicle dealership(2) D ate of Business Combination
January 1, 2023
(3) N ame of the company after business combination
Toyota Corolla Netz Gifu Co., Ltd.
2. Overview of accounting treatment
Pursuant to the Accounting Standard for Business Combinations
Accounting Standards Board of Japan (ASBJ) Statement No.
21, issued on January 16, 2019 and the Guidance on AccountingStandard for Business Combination and Accounting Standard forBusiness Divestitures (ASBJ Guidance No. 10, issued on January 16,2019), the absorption-type merger was treated as a transaction undercommon control.

21. Subsequent Events(Merger among consolidated subsidiaries)
At the meeting of the Board of Directors held on April 1, 2022, Seino
Transportation Co., Ltd. resolved to conduct an absorption type merger,
with Seino Transportation Co., Ltd. as the surviving company and Kanto
Seino Transportation Co., Ltd., Nohi Seino Transportation Co., Ltd. andTokai Seino Transportation Co., Ltd., as the absorbed companies.
1. Overview of the transaction(1) N ames and businesses of the combining Companies
Name of the surviving Company: Seino Transportation Co., Ltd.
Business: Transportation services
Names of the absorbed Companies: Kanto Seino Transportation
Co., Ltd., Nohi Seino Transportation Co., Ltd., Tokai Seino
Transportation Co., Ltd.
Business: Transportation services(2) Schedule
April 1, 2022 resolution date of Board of Directors regarding
the merger and the companies concerned in the absorption-typemerger.
April 1, 2022 was the execution date of contract.
(3) D ate of Business Combination
April 1, 2023
(4) N ame of the company after Business Combination
Seino Transportation Co., Ltd.
(5) O ther matters related to the transaction
The Company owns all the shares of the surviving company
and the absorbed companies. Therefore, the Company neither
issued new shares nor allotted outstanding shares in this businesscombination.
2. Overview of accounting treatment
Pursuant to the Accounting Standard for Business Combinations
Accounting Standards Board of Japan (ASBJ) Statement No.
21, issued on January 16, 2019 and the Guidance on AccountingStandard for Business Combination and Accounting Standard forBusiness Divestitures (ASBJ Guidance No. 10, issued on January 16,2019), the absorption-type merger will be treated as a transaction
under common control.
(Cancellation of treasury shares)
The Board of Directors of the Company resolved at its meeting heldon June 12, 2023 matters concerning the Company’s cancellation of its
common stock pursuant to the provisions of the Articles of Incorporation
as applied pursuant to Article 178 of the Business Corporation Law asdetailed below.
(1) Class of shares
Common stock(2) Number of shares
20,000,000 shares (9.6% of the total number of shares
outstanding prior to the retirement)(3) Scheduled dateJune 27, 2023
(Share repurchase)
The Board of Directors of the Company resolved at its meeting held on
June 12, 2023 matters concerning the Company’s repurchase of its common
stock pursuant to the provisions of the Articles of Incorporation as applied
pursuant to Article 459, Paragraph 1, Item 1 of the Business Corporation
Law as detailed below.
1. Reason for share repurchase
To implement flexible capital policies in response to changes in thebusiness environment
2. Details of the repurchase(1) Class of shares to be repurchased
Common stock(2) Total number of shares that may be repurchased:
21,000,000 shares (maximum), 11.2% of issued shares excluding
treasury stock(3) Aggregate repurchase price¥30,000 million ($223,881 thousand) (maximum)(4) Period of repurchase
June 13, 2023 to June 12, 2024
(Changes in dividend policy)
The Board of Directors of the Company resolved at its meeting heldon June 12, 2023 to change the Company’s policy for dividends as detailed
below. In addition, the policy change will be effective from the second
quarter dividends of the fiscal year ending March 31, 2024.
(1) Before change
The Company positions profit of shareholders as an importantmanagement policy. It has a basic policy of implementing interim
dividends, paying annual dividends of 11 yen per share or higher
in principle and maintaining a DOE (dividend on equity) ratio of
2.4% or a consolidated payout ratio of around 30%, whichever ishigher, while enhancing shareholder capital with a mid-to longterm view and improving profitability. In addition, maximum
dividends is a consolidated payout ratio of 100%, expect for
paying annual dividends of 11 yen per share or higher.
(2) After change
The Company positions profit of shareholders as an importantmanagement policy. It has a basic policy of implementing interim
dividends, paying annual dividends with a DOE (dividend on
equity) ratio of 4.0% or higher.

25

Annual Report 2023

22. Segment Information
(a)

(b)
(c)

General information about reportable segments
The reportable segments are constituent business units of the Seino Group for which separate financial information is obtained and examined regularly by the
Board of Directors to evaluate business performance. The Seino Group has established the “Business Promotion Department” as a holding company. Each subsidiaryplans and operates each business under its control. In addition, some of the subsidiaries engage in real estate leasing services to make good use of their facilities.
Therefore, the Seino Group consists of business segments that are based on the business conducted by each subsidiary. The Seino Group’s reportable segments are“transportation services,” “vehicle sales,” “merchandise sales” and “real estate leasing services.”
Basis of measurement about reportable segment profit or loss, segment assets and other material items
The principles of segment accounting are basically the same as those described in Note 2, “Summary of Significant Accounting Policies.” Intersegment sales andtransfer amounts are based on market prices.
Information about reportable segment profit or loss, segment assets and other material items and information about the disaggregation of revenue fromcontracts with customers
Information about reportable segment for the years ended March 31, 2023, 2022 and 2021 is summarized as follows:

Transportation Vehicle sales
services (*5)
For the year 2023:
Operating revenue:
		 Revenue from contracts with customers ¥473,340 ¥
92,444
		Other revenue
1,362
1,765
		External customers
474,702
94,209
		 Intersegment sales and transfers
2,468
6,265
			Total operating revenue
477,170
100,474
Segment income (*2)¥
21,870 ¥4,709
Segment assets (*3)¥
Depreciation
Amortization of goodwill
Investments in affiliates accounted forusing the equity method
Increase in tangible and intangible fixed assets

For the year 2022:
Operating revenue:
		 Revenue from contracts with customers ¥		Other revenue
		External customers
		 Intersegment sales and transfers
			Total operating revenue
Segment income (*2)¥
Segment assets (*3)¥
Depreciation
Amortization of goodwill
Investments in affiliates accounted forusing the equity method
Increase in tangible and intangible fixed assets

For the year 2021:
Operating revenue:
		External customers
		 Intersegment sales and transfers
			Total operating revenue
Segment income (*2)¥¥

Segment assets (*3)¥
Depreciation
Amortization of goodwill
Investments in affiliates accounted forusing the equity method
Increase in tangible and intangible fixed assets

Real estateleasing services

Other (*4, 5)

Total

Adjustments(*1)

Consolidated¥

33,518 ¥—33,51814,31047,828800 ¥Millions of yen— ¥26,522 ¥
2,192
365
2,192
26,887
—
8,664
2,192
35,551
1,615 ¥
1,174 ¥

625,824 ¥
5,684
631,508
31,707663,215
30,168 ¥— ¥——(31,707)(31,707)(1,666) ¥625,824
5,684
631,508—
631,508
28,502551,653 ¥
18,977
1,978116,607 ¥2,097—

17,406 ¥61—

19,927 ¥228—

51,097 ¥625
215

756,690 ¥
21,9882,193(52,796) ¥(433)—

703,894
21,555
2,193

21,59323,752

87
3,681

—
41

—
158

—
670

21,68028,302(2)(324)

21,67827,978452,453 ¥800
453,253
1,978
455,231
21,108 ¥528,218 ¥
18,978
1,559

96,907 ¥1,314
98,221
10,918109,139
4,491 ¥
119,782 ¥
2,038
1

30,754 ¥—30,754
13,52744,281789 ¥
17,120 ¥
62
—

— ¥
2,013
2,013
—
2,013
1,509 ¥
19,631 ¥
182—

23,111 ¥306
23,417
9,402
32,8191,194 ¥
50,760 ¥663
229

603,225 ¥4,433
607,658
35,825643,483
29,091 ¥735,511 ¥21,923
1,789

— ¥
—
—
(35,825)(35,825)(1,545) ¥(50,244) ¥(433)—

603,225
4,433
607,658—
607,658
27,546685,267
21,4901,789

16,691
28,685

81
4,005

—
46

—
931

—
728

16,772
34,395(2)(627)

16,77033,768441,091 ¥1,852
442,943
18,375 ¥513,548 ¥17,973
1,409

98,334 ¥10,025
108,359
4,781 ¥
121,051 ¥1,939
1

31,034 ¥14,64745,681732 ¥
15,772 ¥64—

1,865 ¥—
1,865
1,495 ¥
19,083 ¥99—

19,722 ¥8,918
28,640486 ¥50,396 ¥702
229

592,046 ¥
35,442
627,488
25,869 ¥719,850 ¥
20,7771,639— ¥(35,442)(35,442)(1,308) ¥(47,602) ¥(425)—

592,046—
592,046
24,561
672,248
20,352
1,639

14,78534,811

78
3,945

—
69

—
1,749

—
641

14,863
41,215(1)(634)

14,86240,581

Transportation Vehicle sales
services
For the year 2023
Operating revenue:
		Revenue from contracts with customers $ 3,532,388 $
689,881		Other revenue
10,164
13,172
		External customers
3,542,552
703,053
		 Intersegment sales and transfers
18,41846,753
			Total operating revenue
3,560,970
749,806
Segment income (*2)$ 163,209 $
35,142
Segment assets (*3)
$ 4,116,813
Depreciation
141,619
Amortization of goodwill
14,761
Investments in affiliates accounted forusing the equity method
161,142
Increase in tangible and intangible fixed assets
177,254

26

Merchandise
sales (*5)$¥

Merchandise
sales

$

$

250,134—
250,134
106,791
356,925
5,970

Real estateleasing services

Other (*4)

Total

Thousands of U.S. dollars$— $197,925 $ 4,670,328 $
16,3582,724
42,41816,358200,649
4,712,746—
64,657
236,619
16,358265,306
4,949,365$
12,052 $8,761 $ 225,134 $

870,201 $15,649—129,896 $455—

148,709 $
1,702
—

649
27,470

—
306

—
1,179

Adjustments(*1)

Consolidated— $ 4,670,328—
42,418—4,712,746(236,619)—(236,619)
4,712,746(12,433) $ 212,701

381,321 $ 5,646,940 $ (394,000) $ 5,252,940
4,664
164,089(3,231)
160,858
1,605
16,366—
16,366—
5,000

161,791
211,209(15)(2,418)

161,776
208,791

Note: *1) The adjustments column in the table above represents principally the elimination of intersegment transactions and balances, except for (*2) and (*3).
*2) Segment income is reconciled to operating income in the accompanying consolidated statements of income. Segment income in the adjustments column represents unallocated general corporate
expenses which were not assigned to specific reportable segments, net of intersegment transactions.
*3) Segment assets in the adjustments column represent unallocated general corporate items which were not assigned to specific reportable segments, including items such as cash and short-term andlong-term investments in securities, net of intersegment balances.

*4) O ther segment represents the business segment not included in the reportable segments and includes the information services business, the housing sales business, the passenger transportation
business and other business.
*5) A s described in Note 2(t), “Summary of Significant Accounting Policies – Changes in accounting policy”, the Company has applied the Accounting Standard for Revenue Recognition (ASBJ
Statement No. 29, March 31, 2020), etc. from the beginning of the previous fiscal year under review and changed the accounting treatment for revenue recognition. According to those changes,
compared with the amounts that would have been reported with previous accounting treatment, in the Transportation business, “External customers” decreased by ¥12,482 million and “Segment
income” decreased by ¥40 million for the year ended March 31, 2022. In Merchandise sales, “External customers” decreased by ¥3,790 million for the year ended March 31, 2022. In Other, “Externalcustomers” increased by ¥1,272 million , and “Segment income” increased by ¥436 million for the year ended March 31, 2022.

(d)Related Information(i) Information about products and services
The Company has not disclosed information about products and services here because the Company has disclosed the same information above.
(ii) Information about geographic areas
Operating revenue
The Company has omitted the disclosure of operating revenue by geographic area because operating revenue to external customers in Japan accounts for morethan 90% of the amount of operating revenue reported in the consolidated statements of income.
Property and equipment
The Company has omitted the disclosure of property and equipment by geographic area because property and equipment in Japan account for more than
90% of the amount of property and equipment reported in the consolidated balance sheets.
(iii) Information about major customers
The Company has not disclosed information about major customers because no customer contributed 10% or more to operating revenue in the consolidated
statements of income.
(iv) Information on impairment loss by reportable segments:
Impairment loss:
For the year 2023
For the year 2022
For the year 2021
Impairment loss:
For the year 2023

Transportation
services

Vehicle sales

Merchandise
sales

Real estateleasing services

¥

392 ¥
110
—

395 ¥
207
54

Millions of yen
— ¥
— ¥
—
291
—
—

$

2,925 $

2,948 $

Thousands of U.S. dollars
— $
— $

Other

Total

— ¥
533
—

787
1,141
54

— $

5,873

(v) Information on goodwill by reportable segments:
For the year 2023
Amortization of goodwill

Transportation
services¥

As of March 31, 2023
Balance of goodwill
For the year 2022
Amortization of goodwill¥

As of March 31, 2022
Balance of goodwill
For the year 2021
Amortization of goodwill¥

As of March 31, 2021
Balance of goodwill
For the year 2023
Amortization of goodwill
As of March 31, 2023
Balance of goodwill

Merchandisesales

1,978 ¥

— ¥11,537—

1,559 ¥

Real estateleasing services

Millions of yen
— ¥

Other

Total

— ¥

215 ¥

2,193

—

—

66

11,603

1 ¥

— ¥

— ¥

229 ¥

1,789

10,846

—

—

—

280

11,126

1,410 ¥

1 ¥

— ¥

— ¥

228 ¥

1,639

10,971

1

—

—

508

11,480

Vehicle sales

Merchandise
sales

Real estateleasing services

Transportation
services$

Vehicle sales

14,761 $Thousands of U.S. dollars
— $
— $
— $

86,097———

Vehicle sales

Merchandise
sales

Real estateleasing services

Other

Total

1,605 $

16,366492

86,589(iv) Information on gain on negative goodwill by reportable segments:
Gain on negative goodwill:
For the year 2023
For the year 2022
For the year 2021
Gain on negative goodwill:
For the year 2023

Transportation
services

¥

— ¥
12
—

Transportation
services

$

— $

— ¥
—
—
Vehicle sales

Millions of yen— ¥——Merchandise
sales

Other

— ¥
—
—

Real estateleasing services

Thousands of U.S. dollars
— $
— $
— $

Total

— ¥
—
—
Other

—
12
—
Total

— $

—

27

Annual Report 2023

Report of Independent Auditors
Independent Auditor’s Report
To the Board of Directors of
SEINO HOLDINGS CO., LTD.:
OpinionWe have audited the accompanying consolidated financial statements of SEINO HOLDINGS CO., LTD. (“the Company”)
and its consolidated subsidiaries (collectively referred to as “the Group”), which comprise the consolidated balance sheets as
at March 31, 2023 and 2022, and the consolidated statements of income, statements of comprehensive income, statements ofchanges in net assets and statements of cash flows for each of the years in the three-year period ended March 31, 2023, andnotes, comprising a summary of significant accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated
financial position of the Group as at March 31, 2023 and 2022, and its consolidated financial performance and its consolidated
cash flows for the years then ended in accordance with accounting principles generally accepted in Japan.

Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities under thosestandards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of
our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of theconsolidated financial statements in Japan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.

Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated
financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Testing of the effectiveness of IT controls relevant to recognizing the motor truck transportation revenue

28

The key audit matter

How the matter was addressed in our audit

As described in Note 22, “Segment Information” to thefinancial statements, operating revenue from transportation
services provided to external customers for the current fiscal
year was ¥474,701 million. The motor truck transportation
revenue of Seino Transportation Co., Ltd., the core companyof the Transportation Services Business group, accounted for
50% of the operating revenue.
Based on transportation contracts, the motor truck
transportation revenue is recognized as the related
performance obligations are satisfied.

For a series of data, we obtained an understanding of
the information flow, data processing and automatedinternal controls within the IT system from the beginningof a transaction to the recognition of the motor truck
transportation revenue with the assistance of IT specialists
within our firm. In addition, we tested the effectiveness ofcertain internal controls required for stable operation of theIT system. Furthermore, we performed the procedures set
forth below by involving IT specialists within our firm totest the operating effectiveness of certain significant internal
controls:

While each transportation transaction amount is small in the
motor truck transportation business, a large volume is traded
every day, and the motor truck transportation revenue, whichis the consideration of those transactions, is recognizedbased on the data processed and recorded by the system. In
calculating freight charges, which provided the basis for the
motor truck transportation revenue, detailed conditions are
determined for each customer by distance or direction, orby weight, and then complicated calculations are performed
based on the conditions.
As described above, recognition of the motor freighttransportation revenue is highly dependent on the IT system
and may have a significant effect on financial reporting if
there are defects or failures in the system, or data is notprocessed as expected.
We, therefore, determined that our testing of theeffectiveness of IT controls relevant to recognizing the motor
truck transportation revenue was of most significance in our
audit of the financial statements for the current fiscal year,
and accordingly, a key audit matter.

• We tested the operating effectiveness of certain internal
controls to prevent unintended changes or falsification ofprograms and data within the system;• In order to test the operating effectiveness of application
controls for the automatic calculation of freight charges, werecalculated the freight charges for a sample of transactions
by distance or direction, or by weight, and assessed theaccuracy of data processing through the IT system; and• In order to test the operating effectiveness of application
controls relevant to the automatic calculation of the total
amount of daily freight charges by store location andautomatic recognition of the motor truck transportation
revenue, we recalculated a sample of journal entries thatwere recorded automatically and assessed the accuracy ofdata processing through the IT system.

Other Information
The other information comprises the information included in the Annual Report but does not include the consolidated financial
statements, the financial statements, and our auditor’s report thereon. The other information is expected to be made available
to us after the date of this auditor’s report. Management is responsible for the other information. Corporate auditors and theboard of corporate auditors are responsible for overseeing the directors’ performance of their duties with regard to the design,
implementation and maintenance of the reporting process for the other information.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form ofassurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

Responsibilities of Management and Corporate Auditors and the Board of Corporate Auditors for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance withaccounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable
the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue asa going concern, disclosing, as applicable, matters related to going concern in accordance with accounting principles generally
accepted in Japan and using the going concern basis of accounting unless management either intends to liquidate the Group or
to cease operations, or has no realistic alternative but to do so.
29Annual Report 2023

Corporate auditors and the board of corporate auditors are responsible for overseeing the directors’ performance of their duties
with regard to the design, implementation and maintenance of the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonableassurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with auditing standards
generally accepted in Japan will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of our audit in accordance with auditing standards generally accepted in Japan, we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override ofinternal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances, while the objective of the audit is not to express an opinion on the effectiveness of the Group’s internal
control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’sreport. However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate whether the presentation and disclosures in the consolidated financial statements are in accordance withaccounting standards generally accepted in Japan, the overall presentation, structure and content of the consolidated
financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within
the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervisionand performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with corporate auditors and the board of corporate auditors regarding, among other matters, the planned
scope and timing of the audit, significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide corporate auditors and the board of corporate auditors with a statement that we have complied with relevant
ethical requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
30

From the matters communicated with corporate auditors and the board of corporate auditors, we determine those mattersthat were of most significance in the audit of the consolidated financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our reportbecause the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.

Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31,
2023 are presented solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts
and, in our opinion, such translation has been made on the basis described in Note 1 of the Notes to the consolidated financial
statements.

Interest required to be disclosed by the Certified Public Accountants Act of Japan
We do not have any interest in the Group which is required to be disclosed pursuant to the provisions of the Certified Public
Accountants Act of Japan.

Shigeki Kondo
Designated Engagement Partner
Certified Public Accountant
Hideki Saito
Designated Engagement Partner
Certified Public Accountant
Masaki Yamada
Designated Engagement Partner
Certified Public Accountant
KPMG AZSA LLC
Nagoya Office, Japan
September 29, 2023

31

Annual Report 2023

Seino GroupThe Seino Group consists of Seino Holdings Co., Ltd. and 82 consolidated subsidiaries, 1 nonconsolidated subsidiary,and 19 affiliates. The Seino Group operates in five business segments: transportation services, vehicle sales, merchandise
sales, real estate leasing services and other services. The business relationship in the Seino Group is as follows.

Clients
Collection anddelivery

Vehiclessales and repairs

Sales

Services

Real estateleasing

Domestic transportation

Vehicle sales

Merchandise sales

Real estate leasing

Seino Transportation Co., Ltd.
*1
Hokkaido Seino Transportation Co., Ltd. *1
Tohoku Seino Transportation Co., Ltd. *1
Kobaun Co., Ltd.
*1
Niko warehouse Co., Ltd.
*1
Kanto Seino Transportation Co., Ltd.
*1
Seino Super Express Co., Ltd.
*1
Kanagawa Seino Transportation Co., Ltd. *1
Izu Seino Transportation Co., Ltd.
*1
Nohi Seino Transportation Co., Ltd.
*1
Tokai Seino Transportation Co., Ltd.
*1
Mie Seino Transportation Co., Ltd.
*1
Hinomaru Seino Transportation Co., Ltd. *1
Shikoku Seino Transportation Co., Ltd. *1
Kyushu Seino Transportation Co., Ltd. *1
Okinawa Seino Transportation Co., Ltd. *1
Seino Tsu-un Transportation Co., Ltd.
*1
Seino Express Co., Ltd.
*1
Seino Tokyo Express Co., Ltd.
*1
Seino Nagoya Express Co., Ltd.
*1
Seino Osaka Express Co., Ltd.
*1
Seino ST Service Co., Ltd.
*1
S&N Logistics Co., Ltd.
*1
Toyo Co., Ltd.
*1
Katsunuma Transportation Co., Ltd.
*1
Darumaya Transportation Co., Ltd.
*1
Central Logistics Co., Ltd.
*1
Eco Alliance Co., Ltd.
*1
COCONET CO., LTD.
*1
GENie Co., Ltd.
*1
INTENTS Inc.
*1
LIVING PRO-SEED, INC.
*1
ASAHI CONPOU CO., LTD.
*1
Kanto Transportation Co., Ltd.
*1
Osaka Kosoku Nyuhai Corporation*1
KCS Co., Ltd.
*1
Izumikawa Transportation Co., Ltd.
*1
Showa Reizo Co., Ltd.
*1LOCCO Co., Ltd.
*1
KANTO LOGITEC CO., LTD.
*1
MARUKYU UNYU CO., LTD.
*1HACOBELL INC.
*1
TIKUTAKUBIN Co., Ltd. [TOKYO] *1
TIKUTAKUBIN Co., Ltd. [CHIBA]*1
TIKUPOS Co., Ltd.
*1
Saitama Seino Transportation Co., Ltd. *2
Tokyo Seino Transportation Co., Ltd.
*2

Gifu Hino Motor Co., Ltd. *1

Seino Trading Co., Ltd. *1
Seino Sangyo Co., Ltd. *1

Seino Transportation Co., Ltd.
OthersAsahi Enterprise Co., Ltd. *1

Marchandise
sales

Real estateleasing services

TOYOTA COROLLA NETZ GIFU Co., Ltd. *1
Shiga Hino Motor Co., Ltd. *1
Seino Auto Lease Co., Ltd. *1
Tokyo Sharyou Co., Ltd.

*1

Subic GS Auto, Inc.

*1

Unicla Jiko Co., Ltd.

*1KILTON SEINO HOLDING Co., Ltd. *2

Vehiclesales

Information services
Seino Information
Service Co., Ltd.

*1

Japan Logistics
Development Co.,
Ltd.

*1

International transportation

OthersSeino Logix Co., Ltd.
*1
United-Seino Transportation(Malaysia) Sdn. Bhd.
*1
Seino Customs Clearance Service Co., Ltd. *1
Seino(Thailand) Co., Ltd.
*1
Seino Saha Logistics Co., Ltd. *1
PT Seino Indomobil Logistics Services *1
Seino Super Express USA, Inc. *1
Hankyu Hanshin Express Co., Ltd.
*2
Schenker-Seino Co., Ltd.
*2
PT Seino Indomobil Logistics *2
REX Logistics Co., Ltd.
SIRACHA TRANSPORT CO., LTD.

Suito Travel Co., Ltd. (Passenger transportation, Travel agency) *1
Seino Engineering Co., Ltd. (Construction)*1
Seino Family Co., Ltd. (Insurance agency service)*1
Seino Staff Service Co., Ltd. (Personnel service)*1
Toyota Home Gifu Co., Ltd. (Housing sales)*1Asahi Create Co., Ltd. (Comprehensive printer), Advertising agency *1
Seino Business Support Co., Ltd. (Business support services) *1
Seino Ecotrading Inc. (Wholesale of recycled resources)*1
Nihon Oroshiuri Shiire Network Co., Ltd. (Collection agency) *1
Seino Financial Co., Ltd. (Settlement service representative) *1
Shin-ota Taxi Co., Ltd. (Taxi)*1
Kani Taxi Co., Ltd. (Taxi)*1
Tajimi Taxi Co., Ltd. (Taxi)*1
VECTORONE Inc. (EC support)*1
Seino Driving School Co., Ltd. (Driving school)*1
Futaba Kogyosho Co., Ltd. (Pipe work)*1
Fuze Co., Ltd. (Pipe work)*1
Moe Agrifarm Co., Ltd. (Agriculture, Sales)*1
Logistics Innovation Fund*3
Toyota Rent-A-Lease Gifu Co., Ltd. (Rental and lease)
Gifu Automotive Dealer Plaza Co., Ltd. (Rental office)Eparksweets Inc. (EC support)

Mikawa Seino Transportation Co., Ltd.
Ensyu Seino Transportation Co., Ltd.
Kumamoto Seino Transportation Co., Ltd.
Tango Seino Transportation Co., Ltd.
Box Charter Co., Ltd.
Gifu Truck Kogyo Co., Ltd.
Aishin Sangyo Co., Ltd.
Ogaki School Lunch Support Co., Ltd.

Transportation
services

OthersSeino Holdings Co., Ltd.

32

Note *1: Consolidated subsidiaries
82*2: Affiliates (under the equity method)
6*3: Nonconsolidated subsidiaries
1
Companies except those mentioned above are affiliates under the cost method. 13

Seino Holdings Co., Ltd.
1, Taguchi-cho, Ogaki, Gifu 503-8501 , Japan