Profile
Seino Holdings Co., Ltd. (“the Company”) began
business as a trucking company in 1930 and wasincorporated in 1946. Based in the city of Ogaki, Gifu
Prefecture, located nearly at the center of the Japanesearchipelago, we are a leading trucking company, expanding instep with the growth of the Japanese economy and thedevelopment of the nation’s extensive expressway network. On
October 1, 2005, the Company transferred its transportation
business and other operations to a new company—which hastaken the original name Seino Transportation Co., Ltd.—and was
renamed Seino Holdings Co., Ltd., adopting a pure holding
company structure.
The Seino Group currently consists of the pure holding
company Seino Holdings, 49 consolidated subsidiaries and 14
affiliates engaged in transportation services, vehicle sales, leasing
for real estate services and other services.
In its mainstay transportation services business, the Company
has taken steps to optimize its network, all the while adhering to its“customer-first” principle. As of March 31, 2008, Seino offers
efficient transportation services throughout Japan via its 416
domestic terminals, a fleet of 21,479 trucks and a trucking networkthat average 5,000 routes daily. Overseas, Seino has transferred its
international forwarding operations to Schenker-Seino Co., Ltd., ajoint venture established with Schenker AG in Germany. Throughthis alliance, the Company aims to bolster its competitiveness by
optimizing the synergies of Seino’s domestic transportation
network and Schenker’s global network and cutting-edge IT
systems.
The Seino Group focuses on its three core businesses: theLess-Than-Truck Load (LTL) commercial cargo transportation
business, the logistics business and thevehicle sales business. The Group iscommitted to providing rapid services
that deliver total customer satisfaction
and will proceed down the “Road to
Success” to become a highly profitablecompany through initiatives to develop
a progressive business model that will
become the standard for next-generationtransportation 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
Financial Highlights

1

To Our Shareholders, Customers and Friends

2

Status of New G5 Plan

4

CSR Topics

6

Review of Operations

8

Financial Review

10

Six-year Summary

11

Consolidated Balance Sheets

12

Consolidated Statements of Operations

13

Consolidated Statements of Changes in Net Assets

14

Consolidated Statements of Cash Flows

15

Notes to Consolidated Financial Statements

16

Report of Independent Auditors

24

Seino Group

25

Board of Directors(As of June 26, 2008)
Chairman andChief Executive Officer
Yoshikazu Taguchi

Outside Directors
Yuji Tanahashi
Kenjiro Ueno

President andChief Operating Officer
Yoshitaka Taguchi

Standing Statutory
Auditors
Yoshio Matsuoka
Takahiko Kumamoto

Directors
Takao Taguchi
Yoshiataka Nasuno
Mitsuo Mekata
Shizutoshi Otsuka
Hidemi Maruta

Outside Statutory
Auditors
Fumio Kato
Eiji Kasamatsu

Seino Holdings Co., Ltd.

Financial Highlights

For the Years Ended March 31, 2008, 2007 and 2006

(Billions of Yen)

Thousands of
U.S. Dollars 2

Millions of Yen
2008

CONSOLIDATED BASIS:
Operating revenue
Operating income
Income (loss) before income taxes and minority interests
Net income (loss)

2007

2008

2006

¥ 451,978 ¥ 449,486 ¥ 427,520 $ 4,519,780
9,925
99,25010,796
10,082
13,383
133,830
14,579(1,188)
6,018
60,1808,797(8,334)

Net income (loss) per share (in the whole yen and U.S. dollars):-Basic¥-Diluted

30.27 ¥−

44.71 ¥−

(43.35)
−

$

0.30
−

2006

2007

2008

Net (loss) income(Billions of Yen)

20

Thousands of
U.S. Dollars 2

Millions of Yen
2008

2007

2006

2008

15
10
5

CONSOLIDATED BASIS:
Cash and cash equivalents, and short-term investments
Property and equipment, net of accumulated depreciation
Total assets
Long-term debt and other long-term liabilities
Net assets¥ 54,299 ¥ 52,421 ¥ 62,582
240,444242,374
225,815457,871
468,006
446,933
70,842
76,17869,689293,985
292,848
278,916$ 542,990
2,404,440
4,578,710
708,420
2,939,850

Net assets 3 per share (in the whole yen and U.S. dollars)¥1,445.62 ¥1,451.36 ¥1,420.60

$

14.46

0
-5
-10
2006

2007

2008

2007

2008

(Billions of Yen)

(Notes) 1. Yen and U.S.dollar amounts have been rounded off to the nearest whole number.
2. U.S. dollar amounts are translated at ¥100 = US$1, solely for the convenience of readers.
3. For details regarding net assets for the fiscal years ended March 31, 2007 and 2008, see (b) on page 17.

Corporate Data
(As of March 31, 2008)

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

2006

Seino Holdings Co., Ltd.
1, Taguchi-cho, Ogaki, Gifu 503-8501, Japan
Tel: 81-584-82-3881 Fax: 81-584-82-5040
November 1, 1946
¥42,482 million
207,679,783
The First Section of Tokyo Stock Exchange (code 9076)
The First Section of Nagoya Stock Exchange (code 9076)
Mitsubishi UFJ Trust and Banking Corporation
AZUSA Audit Corporation1

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 they have shown us over the years. We
are pleased to present the results for the fiscal year ended March 31, 2008 (from April 1, 2007 to
March 31, 2008).

� Operating Environment
The Japanese economy was able to sustain amoderate trend of growth in the fiscal year underreview. Solid corporate earnings backed by firm
capital investment and increased exports
outweighed negative factors such as the subprime
loan crisis and surging prices of crude oil and otherraw materials.
In the transportation industry, however,competition with other companies intensified inline with lackluster demand. Consistently high fuelcosts could not be reflected in freight charges, and awidespread labor shortage developed.
Consequently, the operating environment continued
to be extremely challenging.

� Initiatives Taken During Fiscal 2008 and
Results
In this environment, the Seino Groupendeavored to expand its business by primarily
focusing on the G5 (Group 5) Plan, the Group’s
medium-term management plan (which ran from
April 2005 to March 2008). The plan was in its
final year and focused on the Group’s three corebusinesses: the Less-than-Truck Load (LTL)commercial cargo transportation business, thelogistics business and the vehicle sales business.
Under the company slogan “Advance,” wetook action with passion. This slogan expresses our
expectation that everyone will undertake their workwith foresight, speed and enthusiasm.
The Group also increased the number ofsectional meetings held for Group companies tostreamline the organizational structure and improve
management efficiency. In addition, we reviewed
operating systems and areas beyond Group
company boundaries to share management
resources and consolidate overlapping back-office
operations.
Despite these initiatives, consolidated

2

operating revenue for the year under review
increased only 0.6% from the previous year to¥451,978 million. Operating income declined 8.1%
to ¥9,925 million and net income fell 31.6% to¥6,018 million.

� CS Improvement Plan, the Group’s New
Medium-Term Management Plan
In the transportation industry, the Seino
Group’s core business segment, the total volume of
freight handled is unlikely to increase given the
reduction in public works investment and slower
growth in personal spending. The operating
environment is also expected to remain difficult,reflecting consistently high fuel prices, investments
to meet safety and environmental standards andintensified competition with other industry players.
Although the transportation services businessis facing a difficult management environment, assummarized above, actual total domestic freight
distributed via trucks, including both commercial
and private trucks, is believed to amount to 5.3
billion tons annually. To capture a share of thisimmense volume, we will focus on our new
medium-term management plan, the CS
Improvement Plan (which runs from April 2008 to
March 2011). By concentrating on the two main
themes, namely (1) increase earnings by collecting
appropriate freight charges, pursuing efficiency
gains and managing cost budgets, and (2) secure
earnings by managing existing shipping clients,
acquiring new clients and expanding sales of“Designated Time” products, we will continue toimprove management efficiency and establish a
profitable structure.
In the vehicle sales business, with ever-greater
competition among dealers, there are concerns thatsales of new vehicles are likely to be sluggish. In
response, the Company will aim to expand themarket through M&A and offer new businesses andservices to generate steady revenue streams.

As a result of these measures, the Company
anticipates operating revenue of ¥460,000 million
and net income of ¥8,500 million for the term
ending on March 31, 2009.

� Corporate GovernanceSeino employs a corporate auditor system. As
of March 31, 2008, the Board of Directors consistedof nine directors, including two outside directors. In
addition to making swift and appropriate decisions
on such important matters as business restructuring
and strategic investments, the Board of Directors istaking important steps to strengthen auditing
functions and achieve greater managementtransparency.
The Company also has four corporate auditors,
including two outside auditors. Auditors arecommitted to improving compliance and enhancing
the trust that society has in the Company throughsuch activities as attending meetings of the Boardof Directors, conferences of directors and otherimportant gatherings, and carrying out auditing
operations.

� To Our Shareholders

August 2008

Yoshikazu Taguchi
Chairman and Chief Executive Officer

In keeping with its basic business policy,
Seino seeks to enhance shareholders’ equity andimprove profitability from a long-term perspective,
while maintaining stable dividends. Accordingly,
Seino has maintained a regular annual cash
dividend per share of ¥11.00 for the fiscal year
ended March 31, 2008, the same amount as in theprevious year.
In accordance with its new medium-term
management plan, management is fully committed
to making Seino the preeminent commercial freighttransportation company in Japan, while at the sametime raising corporate and shareholder value. We
ask our shareholders, customers and friends fortheir continued support.
Yoshitaka Taguchi
President and Chief Operating Officer3

Status of New G5 Plan
Striving to Achieve the Goals of the CS Improvement Plan, the New Three-Year Medium-Term
Management Plan — Summary of the G5 Plan and endeavors in each business
Fiscal 2008 was the final year of the G5 Plan, the Group’s former three-year medium-term
management plan. To establish a more robust corporate structure, each division of the Group acted
to enhance efficiency, create added value and improve customer satisfaction (CS). The results of theG5 Plan and our efforts to achieve the goals of the CS Improvement Plan, the Group’s new
three-year management plan, are as follows.

Seino Holdings
� G5 Plan Results
In line with the G5 Plan, the Group’s medium-term
management plan from April 2005, we sought to achieve a
ratio of operating income to operating revenue of 5% by theclose of the fiscal year ended March 31, 2008. As part of its
business strategy, the Group took initiatives across the board
to create added value based on its solid cooperative structurewith Seino Holdings at the center of Group management.
We also worked tirelessly to reduce costs and improvecustomer satisfaction by requiring Group employees todeliver on time and with precision.
Unfortunately, however, we were unable to achieve ourtargets. The ratio of operating income to operating revenue
for the fiscal year ended March 31, 2008 was 2.2%. In thetransportation services business, competition with otherindustry players intensified, and the volume of cargohandled was lower than expected due to the macro
economy slowing further. In the vehicle sales business,competition among dealers became increasingly fierce,meaning operating revenue did not meet expected targets.
New car sales declined, reflecting cautious consumer
spending due to the rising prices of gasoline and other fuels.
Since our efforts to reduce costs were not able to offset thesenegative factors, operating income was lower than forecast.
On the policy front, we produced tangible outcomes byimproving route operation and expanding sales of“Designated Time” products. With respect to route operation
improvements, although the amount of cargo handled by theend of March 2008 was 105.0% of the March 2005 total, wewere able to limit the number of services to 99.6%. The
volume of highly profitable “Designated Time” products
soared to 281.3% versus the March 2005 level, while thecollection and recovery volume rose to 131.3%. Althoughrevenue in the logistics business and the warehouse area also
increased to 134.0% and 119.3%, respectively, we need tofurther accelerate growth.

� The Plan to Improve CS, the Group’s New
Three-Year Medium-Term Management Plan
The Seino Group has formulated its CS Improvement
Plan, a new medium-term management plan that will4commence in the fiscal year ending March 31, 2009. The
goals of the new plan are to improve customer satisfaction
and increase the Group’s corporate value by shifting the
focus from quantity to quality, based on providing services
that customers will value.
Specifically, we will implement the following initiatives:
Expand the logistics business: As a freight forwardercapable of one-stop receipt of orders, we will expand ourservices by designing and proposing optimum logistics
services for customers. Specifically, we will manage theoverall supply chain for customers at our distribution
management centers, leveraging the Seino Group’s IT
networks to optimize customer distribution and inventories.
Improve transportation quality: To improve customer
satisfaction and become a preferred provider oftransportation services, we will promote regular services andincreasing the cargo shipments of our main routes, and work
to improve operational accuracy and pursue efficiency gains.
Bolster other businesses: We will expand our vehicle sales
business, strengthen our temporary staffing business andimprove the efficiency of overlapping operations by effective
use of management resources and introducing sharedservices.

Endeavors of Each Business
The Seino Group has been taking action in response totargeted items in the CS Improvement Plan since thebeginning of the fiscal year ended March 31, 2008.
Representative efforts are as follows.

Transportation Services
� Businesses Restructured in the Kyushu Region
Showa Seino Transportation Co., Ltd., a subsidiary of
Seino Holdings Co., Ltd., which operates transportation
services in part of the Kyushu region, changed its trading
name to Kyushu Seino Transportation Co., Ltd. as of March
1, 2008. As of April 1, it took over most of the business of
Sengoku Seino Transportation Co., Ltd., which also operates
a logistics business in part of the Kyushu region. Althoughboth companies have conducted transportation services in
Kyushu, the two business areas overlapped and were thus
inefficient. With this takeover, we will aim to provide moreconsistent transportation services to customers using ournationwide network. In addition, we will further improve
efficiency and make effective use of management resources
by consolidating the networks of both companies in the
Kyushu region through the transfer of the business from
Sengoku Seino Transportation Co., Ltd.

� Ichikawa Logistics Center Opened
The Ichikawa Logistics Center of Seino Transportation
Co., Ltd. in the city of Ichikawa, Chiba Prefecture, wascompleted and began operating on August 17, 2007. This is
the Group’s 18th as well as largest logistics center. It has
excellent access to Narita International Airport, Tokyo(Haneda) International Airport and Ohi Pier in the Port ofTokyo, and is efficient for deliveries to commercial businessareas of Tokyo.
The Center’s storage
facilities conform to thestandards of the Transported
Asset Protection Association(TAPA). It is fully equippedwith security and monitoring
systems, meaning that it is
optimized to carry out
logistics operations forhigh-value products such as high-tech goods. We will
improve the efficiency of our logistics operations by offering
integrated services, including cargo storage, distribution,
processing and nationwide transportation and delivery. We
will also aim to expand our logistics services for foreign
affiliated companies through our business and marketingcollaboration with Schenker-Seino Co., Ltd.

� Kangaroo Business Centers Opened
Seino Transportation Co., Ltd. has 12 locations in central
Tokyo where large trucks can stop. We have also established
two new Kangaroo Business Centers as satellite offices incentral Tokyo business districts, which began operating on
February 14.
Seino Transportation plans to establish KangarooBusiness Centers in eight business
districts of Tokyo by the end of
2008. This will mean that they will
be able to provide morecustomer-oriented services, such as
faster delivery and pickup in eacharea. Since the centers do not use
trucks for delivery, this willcontribute to alleviating traffic jams
on streets in Tokyo and benefit theenvironment.

� Two New Branches Opened
The new Nagano branch of Seino Transportation Co.,
Ltd., which was under construction, was completed andbegan operating on February 4, 2008. It is situated in a prime
location only a three-minute drive from an expressway

interchange. It has an area of 21,800m2, 2.2 times the size ofthe former Nagano branch. Since the new branch has aplatform equipped with automatic sorting machines andstorage quarters with an air-conditioned distribution
processing room, further service improvement is anticipated.
In addition, Tokai Seino Transportation Co., Ltd.
integrated its Taketoyo and Tokai branches into the newly
opened Chita branch in Aichi Prefecture on February 18,
2008. Given that companies are expanding onto the Chita
Peninsula due to the benefits of the Central Japan
International Airport, freight loading is expected to increaseon the peninsula, one of the branch’s operating areas. The
new branch is therefore expected to become an important
operating base for handling international and air cargo andthe logistics business.

Vehicle Sales and Other Businesses� Business Restructuring within Gifu Hino
Motor Co., Ltd. and Asahi Enterprise Co., Ltd.
By way of a business
transfer, Gifu Hino MotorCo., Ltd. acquired the Kaizu
Maintenance Factory and the
Minokamo MaintenanceFactory from Asahi
Enterprise Co., Ltd., a Seino
Group company engaged inused car auctions. Gifu Hinobegan operations in the factories on April 1, 2008.
Through this transfer, overlapping businesses inside theGroup were consolidated, and Asahi Enterprise can now
concentrate on operating its used car auction and export
businesses. We will promote efficient business operations,with each company focusing on its core competencies.

� Commencement of Bus Operations
Suito Taxi Co., Ltd. obtained a contract for the community
bus service initiated by the city of Ichinomiya, Aichi
Prefecture, and began operating the service in November
2007. The company operates two routes: one connects
Ichinomiya Station and the city’s hospitals, while the otherruns from Ichinomiya Station to areas which previously had
no public transport. Both routes have made a promising start,
with a total of 4,500 passengers using the routes in
November.

5CSR Topics
Commitment as a Corporate Citizen
Companies in the Seino Group strive to fulfill their corporate social responsibilities as a criticalmanagement issue that must be addressed to meet the expectations of all stakeholders and earn society’s
trust as a corporate citizen. The following section briefly introduces the activities of Seino Group
companies, which aspire to preserve the global environment, ensure safety, show respect for humanity
and coexist with local communities.

� The Environment
Transportation GroupThe Seino Transportation Group is committed toinnovation in its vehicles and transportation systems. To
promote conservation of the global environment, we also
focus on environmentally friendly and energy-saving
operations.
● Introducing environmentally friendly vehicles
We have introduced low-emission vehicles, such as
natural gas vehicles, hybrid vehicles and electric
forklifts. In particular, we are adopting hybrid
vehicles in an effort to reduce CO 2 emissions.
● Shifting transportation modes
We seek to both save energy and maintain service
levels by facilitating a shift in transport modes,
combining road transportation with shipping by railand sea.
● Achieving efficient transportation
We save energy by improving load efficiency byincreasing and decreasing the number of truck routes;
using large vehicles; and reviewing maintransportation routes along with responding tochanges in freight loading during trucking
off-seasons.
● Developing an energy-saving and environmentallyfriendly vehicle fleet
We take comprehensive measures such as adopting
cylinder cowling, adopting energy-saving tires andreducing vehicle weight.
● Environmentally friendly and energy-saving
driving
We are fully committed to practicing “eco-driving” atevery level to minimize the adverse effect on theenvironment.

6

Seino Tsu-un Transportation Co., Ltd.
Received Award in Eco-Driving Contest
In December
2007, Seino Tsu-un
Transportation Co.,
Ltd. participated inan eco-driving
contest held by the
Ministry of theEnvironment and theEnvironmental
Restoration andConservation Agency of Japan (ERCA). The Company
won a prize for actively promoting eco-driving. Since
2003, all Seino Tsu-un Transportation employees havefocused on eco-driving skills. In 2007, in particular, theCompany worked to raise employee awareness throughactivities such as providing “Eco-Driving Experience
Seminars” for all sales drivers from the head office,disclosing fuel consumption data by vehicle type, groupand individual drivers, and soliciting eco-driving
slogans. As a result, fuel consumption for fiscal 2007
improved 117.08% for 11-ton trucks and 122.78% fortrailers compared with fiscal 2003.

� Safety
Seino Transportation Co., Ltd.
Kangaroo Campaign
From October 1, 2007, Seino Transportation Co.,
Ltd. ran the month-long Kangaroo Campaign, whichemphasized improvements in safety. Marking the
campaign’s 41st year, in 2007 the Company focused on
raising the awareness of safety among employees. By
doing so, the Company aims to prevent accidents,
thereby protecting our drivers, our customers’ packages
and vehicles. Throughout the campaign, safety is our top
priority.
Prior to the Kangaroo Campaign, the Company
conducted a voluntary safe driving assessment on
September 22, 2007 in the Yoro Service Area inboundand outbound parking facilities of the Meishin
Expressway. We reminded the drivers of the 453 trucks
in operation to inspect their vehicles, fasten their safety
belts, check their uniforms and adhere to the speed limit.

residents and Seino Transportation employees will
participate in various tree-planting activities. Ogaki City
has plans to thin the cedar and cypress forest with thehelp of financial assistance provided by the Taguchi
Fukujukai Foundation, after which they will plant young
maple and Japanese cherry trees that local residents havegrown from seedlings.

� Information Security and the Environment
Confidential Document Collection Boxes with GPS
On September 10, 2007, Seino Transportation Co.,
Ltd. launched the Confidential Document Collection Box
service. This service involves collection and destructionof confidential documents such as personal informationfrom companies and government offices in special
cardboard boxes
A Seino Transportation driver delivers the special
cardboard boxes to customers free of charge and collects
them when full. The documents are then shredded anddissolved at a paper manufacturing company andrecycled into containerboard. Thereafter, a “Certificate
of Destruction” is issued to customers. A global
positioning system (GPS) terminal is attached to eachbox in order that its location can be accurately
determined until destruction is complete. It is the firstservice in the industry to collect confidential documents
in boxes fitted with GPS, ensuring customers can use
this service with reassurance.

� The Environment and Local Communities
Taguchi Fukujukai Foundation
Forest Creation Agreement with Gifu Prefecture andOgaki CityOn February 25, the Taguchi Fukujukai Foundation(President: Yoshikazu Taguchi, Chairman of Seino
Holdings Co., Ltd.) collaborated with Gifu Prefecture
and Ogaki City in an environmental initiative to plant aforest in Ogaki City. The agreement is based on the“Creating Forests in
Cooperation with
Companies” project
created by Gifu
Prefecture.
Over the next
seven years, local

7

Review of Operations
The performance of each of our business segments is outlined below.

Transportation Services

conservation awareness and the Personal Information Protection
Act, we developed and launched the Confidential Document
Collection Box service with GPS, an industry first.
The Group also opened the Ichikawa Logistics Center,the largest in the Group, and expanded its logistics business forforeign affiliated companies in collaboration with SchenkerSeino Co., Ltd.
With respect to its overseas strategy, the Company
launched its Overseas Division to bolster its international
logistics business by increasing the amount of imported andexported cargo generated from the domestic sales network.
This stems from the rapid growth of international logistics,
particularly in Asia.
In addition, the Company enhanced its service networkby establishing the new Nagano branch in Suzaka City, Nagano
Prefecture, and integrating the Taketoyo and Tokai branches
into the newly opened Chita branch in Aichi Prefecture. We also
launched more customer-oriented services such as faster delivery
and pickup by establishing two Kangaroo Business Centers, as
satellite offices in central Tokyo business districts. The center
provides market-oriented pickup and delivery services.
As indicated above, the Company sought not only to secure
earnings based on sales with an emphasis on profits but also tobolster customer satisfaction by improving delivery, operations
and information accuracy. In addition, the Transportation Group
introduced innovations in the cost structure by raising theefficiency of its operational processes, route operation and backoffice operations. We also promoted eco-driving as a meansof promoting environmental conservation by reducing fuelconsumption and harmful emissions.

Operating revenue in the Transportation Services segment
increased 1.3% from the previous year to ¥331,862 million(US$3,319 million), mainly because the segment was able tosecure similar cargo volumes to the previous year. Operations
were, however, affected by rising crude oil prices despite ourefforts to reduce costs through improved efficiency, resulting in
a 19.7% decline in operating income to ¥4,458 million (US$45
million).
Our Transportation Services segment consists of two
key businesses, the first of which is our Less-than-Truck
Load (LTL) commercial cargo transportation business and thesecond of which is our logistics business. During the term, we
stepped up our sales activities with a core focus on these two
mainstay businesses. For instance, we expanded cargo services
for small businesses, promoted the collection of appropriate
freight charges, boosted sales of “Designated Time” products,
acquired new shipping clients and improved our market
share with existing clients. In the logistics business, our sales
operations took a proactive approach, strongly promoting third
party logistics (3PL) and supporting customer supply chain
management (SCM).
In particular, with respect to “Designated Time” products,
we concentrated our focus on enhancement by launching New
Business Delivery for delivery of packages by the next morning;
Super 9.10 for delivery by 9 a.m. or 10 a.m. the next morning;
Kangaroo Super-Express Delivery for delivery within the same
day using the Shinkansen; and JITBOX Charter Delivery fordelivery of medium-lot freight within the designated time for
middle and long distances.
Capturing potential demand in response to environmental
Operating Revenue by Business Segment
Fiscal 2008

8

(Millions of yen)
Fiscal 2007

Results

Composition

Results

Composition

Year-on-YearTransportation
Services

331,86273.4%

327,574

72.9%

1.3%

Vehicle Sales

85,53718.9%

85,54919.0%(0.0)%

Leasing forReal Estate
Services

1,146

0.3%

1,079

0.2%

6.2%

Other

33,433

7.4%

35,2847.9%(5.2)%

Total

451,978

100.0%

449,486

100.0%

0.6%

Vehicle Sales

robust demand. However, these efforts were not able tooffset the weaker sales of large and midsize trucks.
Passenger vehicle sales continued to be impacted by
the difficult environment. Overall demand contracted
significantly, reflecting a declining birthrate, the trend
away from car use and surging gasoline prices. Under
these circumstances, the vehicle sales group worked toreduce sales costs per vehicle across the board and improve
efficiency and customer satisfaction by actively promoting
fully remodeled minivans and new wagon models tocustomers. As a result, the profit per vehicle increased fromthe previous year, while sales of new vehicles declined year
on year. In addition, the automobile supplies business grew,with our second outlet commencing operations.

Operating revenue was ¥85,537 million (US$855
million), which was almost in line with the previous
year, while operating income amounted to ¥3,872 million(US$39 million), a 24.1% increase year on year. This partly
reflected improved efficiency in truck sales and the profit
achieved per car in passenger vehicle sales.
In truck sales, sales of large and midsize trucks declinedin the face of weaker replacement demand, reflecting risingfuel costs. In this environment we stepped up our sales
activities, which led to increased sales of small trucks. We
also boosted the utilization rate of our 24-hour maintenancefactory and held regular used vehicle auctions to meet

Leasing for Real Estate Services

reasons such as urban development projects or a lack ofavailable land, the old site is leased out to maximize thebenefits of management resources. Companies outside
the Transportation Group also engage in leasing as themost effective means to generate returns from their assets.
Key examples of this have been the former Yotsubashi(Osaka City), Shinmachi (Osaka City) and Fukui (Fukui
Prefecture) terminals.

Operating revenue totaled ¥1,146 million (US$11
million), a 6.2% increase from the previous year, while
operating income stood at ¥971 million (US$10 million),up 7.3% year on year.
In this business segment, when terminals of severaltransportation group companies, including Seino
Transportation Co., Ltd., are relocated to other sites for

Other

information services. Operating revenue declined 5.2%
from a year earlier to ¥33,433 million (US$334 million),and operating income fell 21.3% year on year to ¥1,014
million (US$10 million).

This business segment consists of sales of merchandise
such as fuels and residential properties as well as

Operating Income by Business Segment
Fiscal 2008

(Millions of yen)
Fiscal 2007

Results

Composition

Results

Composition

Year-on-YearTransportation
Services

4,458

44.9%

5,555

51.5%

(19.7)%

Vehicle Sales

3,872

39.0%

3,121

28.9%

24.1%

Leasing forReal Estate
Services

971

9.8%

905

8.4%

7.3%

Other

1,014

10.2%

1,288

11.9%

(21.3)%

Total

10,315103.9%

10,869100.7%(5.1)%

Elimination(390)(3.9)%(73)(0.7)%

̶Consolidated

9,925

100.0%

10,796100.0%(8.1)%

9Financial Review
Operating Results
Consolidated operating revenue for Seino Holdings forthe fiscal year ended March 31, 2008 increased 0.6% fromthe previous year to ¥451,978 million (US$4,520 million).
Contributing factors included a marginal rise in operating
revenue in the Transportation Services business segment
due to cargo volume being practically level with last year,
and operating revenue in the Vehicle Sales business segment
remaining on a par with last year’s results.
Operating costs rose 0.5% to ¥410,579 million (US$4,106
million). The ratio of operating costs to operating revenue was
90.8%, down 0.1 percentage point.
Selling, general and administrative expenses increased 3.9%
to ¥31,474 million (US$315 million), while operating income
fell 8.1% to ¥9,925 million (US$99 million). Contributing
factors included the rise in fuel costs and chartered truck fees in
the Transportation Services segment.
Other income stood at ¥3,458 million (US$35 million). A
key positive factor was the amortization of negative goodwill of¥4,357 million (US$44 million), while a major negative factor
was a ¥3,315 million (US$33 million) impairment loss on fixed
assets.
As a result, income before income taxes and minority
interests reached ¥13,383 million (US$134 million), down 8.2%
year on year. Net income of ¥6,018 million (US$60 million) wasrecorded, a decrease of 31.6% from the previous fiscal year.
Net income per share was ¥30.27 (US$0.30), and return on
equity was 2.1%. Annual cash dividends per share were maintainedat ¥11.00 (US$0.11), the same as in the previous term.

Financial Position
Total assets at the end of the fiscal year under review were¥457,871 million (US$4,579 million), down 2.2% versus the

Cash FlowsNet cash provided by operating activities increased ¥2,052
million (US$21 million) to ¥19,572 million (US$196 million).
Major factors were a decrease in trade receivables and income
taxes paid, despite an increase in inventories.
Net cash used in investing activities declined ¥3,058 million(US$31 million) to ¥13,694 million (US$137 million), primarily
because of a reduction in payments made for the acquisition of
investment securities.
Net cash used in financing activities decreased ¥11,924
million (US$119 million) to ¥2,755 million (US$28 million). This
result reflected a decline in the repayment of long-term debt.
Consequently, cash and cash equivalents at end of year rose
¥3,130 million (US$31 million) to ¥45,884 million (US$459
million).

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

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

Shareholders’ equity ratio

(%)

(%)

(%)

4

8
7
6
5
4
3
2
1
0
-1
-2
-3
-4
-5
-6
-7
-8
-9

80

3
2
1
0
-1
-2
-3
-4
-5
-6

10

previous year.
Total current assets dipped 0.7% to ¥168,475 million(US$1,685 million). Net property and equipment fell 0.8% to¥240,444 million (US$2,404 million), mainly reflecting a ¥7,850
million (US$79 million) decline in investment securities.
Total current liabilities fell 6.0% to ¥93,044 million(US$930 million), primarily because of a decline in trade
payables and short-term borrowings.
Long-term liabilities dropped 7.0% to ¥70,842 million(US$708 million) as a result of a decrease in deferred tax
liabilities and negative goodwill.
Total shareholders’ equity rose 1.9% to ¥282,854 million(US$2,829 million). Major factors included an increase inretained earnings derived from the posting of net income. The
shareholders’ equity ratio rose 1.7 percentage points to 62.9%.

2003

2004

2005

2006

2007

2008

60

40

20

2003

2004

2005

2006

Operating income to operating revenue

Net (loss) income to total assets

Net (loss) income to operating revenue

Return on equity ratio

2007

2008

0

2003

2004

2005

2006

2007

2008

Seino Holdings Co., Ltd. and Consolidated Subsidiaries

Six-year Summary

For the Years Ended March 31, 2008, 2007, 2006, 2005, 2004 and 2003

Millions of Yen
2008
For the year:
Operating revenue:
Transportation services
Vehicle sales
Leasing for real estate services
Other
Operating costs
Selling, general andadministrative expenses
Operating income
Net income (loss)
At year-end:
Current assets
Total assets
Current liabilities
Short-term borrowings
Long-term debt, including current maturities
Net assets*

¥

2007

451,978
331,862
85,5371,146
33,433
410,579* For details regarding net assets for the fiscal years ended
March 31, 2007 and 2008, see (b) on page 17.

¥

2006

449,486
327,574
85,5491,079
35,284
408,395¥

2005

427,520
307,888
82,334
1,004
36,294
386,995¥

2004

423,833
307,264
98,2595,268
13,042
381,970¥2003

417,705
300,645
97,155
5,483
14,422375,403¥409,399
297,514
93,322
5,938
12,625368,866

31,4749,925
6,018

30,295
10,796
8,797

30,443
10,082(8,334)29,816
12,047
14,273

29,637
12,665
13,43930,33910,194
13,622

168,475
457,871
93,044
2,465
2,114

169,706
468,006
98,9803,700
3,435

161,208
446,933
92,8004,371
8,247

164,129
470,492
91,252
4,815
17,974

183,933
494,743
112,668
31,17018,341

166,861494,583
142,085
14,59061,839293,985

292,848

278,916

283,352

272,694

238,825Yen
Per share data:
Net (loss) income:-Basic-Diluted
Cash dividends

¥

30.27
—
11.00

¥

44.71
—
11.00

¥

(43.35)
—
11.00

¥

72.26
70.67
11.00

¥

76.11
63.33
11.00

¥

77.47
63.41
11.00

Thousands
Number of shares issued

207,679

207,679

207,679

198,631

198,631

176,820

2.8
3.4
3.0
5.1
60.2
179.9
53.1
15.1­­­­

3.0
3.2
2.7
5.3
55.1
163.3
68.4
14.2

2.5
3.3
2.8
5.8
48.3
117.4
92.6
14.2

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

2.2
1.3
1.3
2.1
62.9
181.1
56.9
36.6

Current ratio
(%)

200

2.4
2.0
1.9
3.1
61.2
171.5
61.2­­­­
24.5­­­­

2.4
(1.9)
(1.9)
(3.0)
62.4
173.7
58.3­­­­(25.5)­­­­

Debt equity ratio

Payout ratio

(%)

(%)

120

40
30

160

90

20

120

10
60
0

80

0

-10

30

40

-20

2003

2004

2005

2006

2007

2008

0

2003

2004

2005

2006

2007

2008

-30

2003

2004

2005

2006

2007

2008

11

Seino Holdings Co., Ltd. and Subsidiaries

Consolidated Balance Sheets
March 31, 2008 and 2007

Millions of yen
2008
Assets:Current assets:
Cash and cash equivalents
Short-term investments (Notes 3 and 5)
Trade receivables
Inventories
Deferred tax assets (Note 10)
Other current assets
Allowance for doubtful accounts
		
Total current assets¥

45,884
8,415
87,943
7,301
4,435
15,114(617)
168,475

2007¥

Thousands of
U.S. dollars(Note 1)
2008

42,753
9,668
90,153
6,694
4,560
16,631(753)
169,706$

458,840
84,150879,430
73,01044,350151,140(6,170)1,684,750

Property and equipment (Notes 4 and 5):
At costAccumulated depreciation		Net property and equipment

452,055(211,611)
240,444446,628(204,254)
242,374

4,520,550(2,116,110)
2,404,440

Investments and other assets:
Investment securities (Note 3)
Investments in and long-term loans to affiliates (Note 3)
Deferred tax assets (Note 10)
Other assets
		
Total investment and other assets
		
Total assets

26,076
3,427
10,446
9,003
48,952457,871

33,926
3,593
10,3808,027
55,926
468,006

260,760
34,270104,460
90,030489,520$ 4,578,710

3,700
1,023
66,317
13,0604,445
10,43598,980$Current liabilities:
Short-term borrowings (Note 5)
Current portion of long-term debt (Note 5)
Trade payables
Accrued expenses
Income taxes payable
Other current liabilities (Note 10)		Total current liabilities¥¥

Long-term debt (Note 5)
Employee retirement benefit liability (Note 6)
Accrued severance indemnities for directors and statutory auditors
Deferred tax liabilities (Note 10)
Negative goodwill
Other long-term liabilities
		
Total liabilities

2,465
649
61,705
12,481
4,870
10,874
93,044¥¥24,6506,490
617,050
124,810
48,700108,740
930,440

1,465
48,694
1,684
7,636
11,181
182
163,886

2,412
48,652723
9,563
14,642
186
175,158

14,650486,940
16,84076,360111,810
1,820
1,638,860

42,482
74,266
174,671(8,565)282,854
4,979
6,152
293,985
457,871

42,48273,582
171,034(9,557)
277,5418,810
6,497
292,848
468,006

424,820742,660
1,746,710(85,650)
2,828,540
49,79061,5202,939,850$ 4,578,710

Commitments and contingent liabilities (Notes 7 and 8)
Net Assets:
Shareholders’ equity (Note 9):
Common stock: 794,524,668 shares authorized and 207,679,783 shares issued
Capital surplus
Retained earnings
Less, treasury stock at cost: 8,572,508 shares in 2008 and 10,382,693 shares in 2007
		Total shareholders’ equity
Accumulated gains from valuation and translation adjustments
Minority interests		
Total net assets
		
Total liabilities and net assets
See accompanying Notes to Consolidated Financial Statements.

12

¥

¥

Seino Holdings Co., Ltd. and Subsidiaries

Consolidated Statements of Operations
For the Years Ended March 31, 2008, 2007 and 2006

2006

Thousands of
U.S. dollars(Note 1)
2008

427,520$ 4,519,780

Millions of yen
2008
Operating revenue (Note 12)¥

Operating costs and expenses (Notes 6 and 12):
Operating costs
Selling, general and administrative expenses		Operating income

Other income (expenses):
Interest and dividend income
Interest expenses
Gain (loss) on sale or disposal of property and equipment
Gain on sale of investment securities
Equity in net income (loss) of affiliates
Amortization of negative goodwill
Impairment loss on fixed assets (Note 2 (l))
Provision for severance indemnities for directors and statutory auditors (Note 2 (n))
Loss on liquidation or sale of subsidiaries and affiliates
Miscellaneous, net
		Income (loss) before income taxes and minority interests

Income taxes:
Current
Deferred		Total income taxes
Minority interests in net income (loss) of subsidiaries		
Net income (loss)¥

451,9782007¥

449,486¥

410,579
31,474442,053
9,925

408,395
30,295
438,690
10,796

386,995
30,443
417,438
10,082

4,105,790
314,740
4,420,530
99,250

831
(137)
546
896
17
4,357
(3,115)(1,073)
(26)
1,162
3,458
13,383

825
(164)
(386)
(368)
4,181
(1,727)
1,422
3,783
14,579

2,008
(243)
(458)
16
(485)
8,518
(21,924)
(136)
1,434
(11,270)(1,188)

8,310(1,370)
5,460
8,960
170
43,570(31,150)(10,730)(260)
11,62034,580133,830

5,951
742
6,693

5,912
(295)
5,617

6,644
1,178
7,822

59,5107,420
66,930

672
6,018

¥

165
8,797

¥

(676)
(8,334)

¥

30.27
11.00

¥

44.71
11.00

6,720
60,180U.S. dollars(Note 1)Yen
Per share:
Net income (loss)
Cash dividends$¥(43.35)
11.00

$

0.30
0.11

See accompanying Notes to Consolidated Financial Statements.

13

Seino Holdings Co., Ltd. and Subsidiaries

Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2008, 2007 and 2006

Number ofshares ofcommonCommonstock issued
stock

CapitalsurplusRetainedearnings

Net unrealized ForeignLandgains oncurrency
Total
revaluation available-for- translation Treasury shareholders’decrement sale securities adjustments stock
equityMillions of yen
Balance at March 31, 2005
198,631,167 ¥ 42,482 ¥ 64,895 ¥ 175,227 ¥ (379) ¥Net loss for the year———
(8,334)—
Stocks issued under stock-for-stock
9,048,616
—
8,489
—
—
exchange offerings (Note 2(a-ii))
Cash dividends———(2,129)—Bonuses to directors and statutory
—
—
—
(75)
—
auditors
Reversal of land revaluation
—
—
—
(84)
84
decrement
Net change in unrealized gains onavailable-for-sale securities, net of
applicable income taxes
—
—
—
—
—
Translation adjustments
—
—
—
—
—
Purchase of treasury stock andincrease in treasury stock held bygroup companies, net
—
—
(31)
(115)
—
Balance at March 31, 2006
207,679,783 ¥ 42,482 ¥ 73,353 ¥ 164,490 ¥ (295) ¥4,916 ¥—

(577) ¥ (3,212) ¥ 283,352——(8,334)

—

—

3,143

11,632———(2,129)

—

—

—

(75)

—

—

—

—

4,944
—

—
175

—
—

4,944
175

—
9,860 ¥— (10,503) (10,649)(402) ¥ (10,572) ¥ 278,916

Shareholders’ equity
Number ofshares ofcommonCommonstock issued
stock

CapitalsurplusRetainedearnings

Accumulated gains from valuation and translation adjustments
Net unrealized
Foreign Total accumulated
gains from
Total
gains onLand
currency
andTreasury shareholders’ available-for- revaluation translation valuation
Minority Total net
translation
stock
equitysale securities decrement adjustments adjustments interests
assetsMillions of yen
Balance at March 31, 2006
207,679,783 ¥ 42,482 ¥ 73,353 ¥ 164,490 ¥ (10,572) ¥ 269,753 ¥ 9,860 ¥ (295) ¥(402) ¥ 9,163 ¥ 5,528 ¥ 284,444
Net income for the year
—
—
—
8,797
—
8,797
—
—
—
—
—
8,797
Treasury stock reissued under stockfor-stock exchange offerings (Note
2 (a-ii))
—
—
229
—
1,105
1,334
—
—
—
—
—
1,334
Cash dividends———(2,151)—(2,151)—————(2,151)
Bonuses to directors and statutory
auditors
—
—
—
(102)
—
(102)
—
—
—
—
—
(102)
Fractional shares acquired, net
—
—
—
—
(90)
(90)
—
—
—
—
—
(90)
Net changes other than shareholders’equity
—
—
—
—
—
—
(376)
(23)
46
(353)
969
616
Balance at March 31, 2007
207,679,783 ¥ 42,482 ¥ 73,582 ¥ 171,034 ¥ (9,557) ¥ 277,541 ¥ 9,484 ¥ (318) ¥(356) ¥ 8,810 ¥ 6,497 ¥ 292,848
Net income for the year
—
—
—
6,018
—
6,018
—
—
—
—
—
6,018
Cash dividends———(2,161)—(2,161)—————(2,161)
Decrease in retained earnings
through inclusion of additional
affiliate accounted for by the equity
method
—
—
—
(207)
—
(207)
—
—
—
—
—
(207)
Reversal of land revaluation
decrement
—
—
—
(13)
—
(13)
—
—
—
—
—
(13)
Sales of treasury stock and fractional
shares, net
—
—
684
—
992
1,676
—
—
—
—
—
1,676
Net changes other than shareholders’equity——————(3,929)13
85(3,831)(345)(4,176)
Balance at March 31, 2008
207,679,783 ¥ 42,482 ¥ 74,266 ¥ 174,671 ¥ (8,565) ¥ 282,854 ¥ 5,555 ¥ (305) ¥(271) ¥ 4,979 ¥ 6,152 ¥ 293,985
Thousands of U.S. dollars (Note 1)
Balance at March 31, 2007
$424,820 $735,820 $ 1,710,340 $ (95,570) $ 2,775,410 $ 94,840 $ (3,180) $ (3,560) $ 88,100 $ 64,970 $ 2,928,480
Net income for the year——
60,180—60,180—————60,180Cash dividends——(21,610)—(21,610)—————(21,610)Decrease in retained earnings throughinclusion of additional affiliate
accounted for by the equity nethod——(2,070)—(2,070)—————(2,070)
Reversal of land revaluation
decrement
—
—
(130)
—
(130)
—
—
—
—
—
(130)
Sales of treasury stock and fractional
shares, net
—
6,840
—
9,920
16,760—————16,760Net changes other than shareholders’equity————— (39,290)130
850 (38,310) (3,450)(41,760)
Balance at March 31, 2008
$424,820 $742,660 $ 1,746,710 $ (85,650) $ 2,828,540 $ 55,550 $ (3,050) $ (2,710) $ 49,790 $ 61,520 $ 2,939,850
See accompanying Notes to Consolidated Financial Statements.

14

Seino Holdings Co., Ltd. and Subsidiaries

Consolidated Statements of Cash Flows
For the Years Ended March 31, 2008, 2007 and 2006

Millions of yen
2008

2007

2006

Thousands of
U.S. dollars(Note 1)
2008

Cash flows from operating activities:
Income (loss) before income taxes and minority interests¥
Adjustments for:		 Depreciation
		 Impairment loss on fixed assets
		 Amortization of negative goodwill
		 Net provision for employee retirement benefit liability
		 (Gain) loss on sale or disposal of property and equipment
		 Equity in net (income) loss of affiliates
		 Gain on sale of investment securities
		 Net provision (reversal) for accrued severance indemnities for directors andstatutory auditors
Decrease (increase) in trade receivables(Increase) decrease in inventories(Decrease) increase in trade payables
Increase in beneficial interest in trusts in relation to trade payables
Other, net
				Sub-totalInterest and dividend received
Interest paid
Income taxes paid				Net cash provided by operating activities

17,016
3,115(4,357)
41
(546)
(17)
(896)

16,253
1,727(4,181)
1,442
386
368
—

14,66021,924(8,518)
1,154
458
485
(16)

170,160
31,150(43,570)410(5,460)(170)(8,960)961
1,565(1,373)(4,675)(51)697
24,863852(138)(6,005)
19,572(33)(3,432)
1,976
6,193(11,714)(293)
23,271824(169)(6,406)
17,520(48)(3,412)(3,308)976—
1,554
24,721
2,083(243)(6,819)19,7429,610
15,650(13,730)(46,750)
(510)
6,970
248,630
8,520(1,380)(60,050)
195,720

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
				Net cash (used in) provided by investing activities(19,066)
(644)
3,516
2,500
(13,694)(16,310)(3,768)
1,448
1,877(16,753)(15,164)
(302)
7,045
14,832
6,411(190,660)(6,440)35,16025,000(136,940)—(1,473)(1,237)(2,162)
(41)
2,158
—
(2,755)8
3,131
42,753

1(8,689)(3,755)(2,151)(7)(86)
8(14,679)8(13,904)
55,22660(9,806)(457)(2,129)(103)(9,098)(1)(21,534)
1
4,620
50,606—(14,730)(12,370)(21,620)(410)
21,580—(27,550)80
31,310427,530

Cash flows from financing activities:
Increase in long-term debt
Repayment of long-term debt
Net decrease in short-term borrowings
Dividends paid to shareholders
Dividends paid to minority shareholders
Purchases of treasury stock, net of sales
Other, net
				Net cash used in financing activities				
Effect of exchange rate changes on cash and cash equivalents				
Net increase (decrease) in cash and cash equivalents				Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents upon inclusion of additional
subsidiaries in consolidation¥				
Cash and cash equivalents at end of year

13,383—45,884¥¥

14,5791,431
42,753¥¥(1,188)—55,226¥¥

133,830—
458,840

See accompanying Notes to Consolidated Financial Statements.

15

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 preparedin accordance with the provisions set forth in the Financial Instruments
and Exchange Law of Japan and its related accounting regulations
and in conformity with accounting principles generally accepted inJapan (“Japanese GAAP”), which are different in certain respects as toapplication and disclosure requirements from International Financial
Reporting Standards.
The accounts of the Company’s overseas subsidiaries are basedon their accounting records maintained in conformity with generally
accepted accounting principles prevailing in the respective countriesof domicile. The accompanying consolidated financial statements havebeen restructured and translated into English from the consolidated
financial statements of the Company prepared in accordance withJapanese GAAP and filed with the appropriate Local Finance Bureauof the Ministry of Finance as required by the Financial Instruments andExchange 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.
Certain comparative figures have been reclassified to conform tothe current year's presentation.
The translation of the Japanese yen amounts into U.S. dollars is
included solely for the convenience of readers outside Japan, using
the prevailing approximate exchange rate at March 31, 2008, whichwas ¥100 to US$1.00. The translation should not be construed as arepresentation that the Japanese yen amounts have been, could havebeen or could in the future be converted into U.S. dollars at this or any
other rate of exchange.

2. Summary of Significant Accounting Policies(a-i) Principles of consolidation

The accompanying consolidated financial statements include
the accounts of the Company and all of its subsidiaries. Investments
in significant affiliates are accounted for by the equity method.
Investments in affiliates not accounted for by the equity method arestated at cost. Differences between the acquisition cost of investments
in subsidiaries and the underlying equity in their net assets are adjusted
based on the fair value at the time of the acquisition, deferred as
goodwill or negative goodwill and amortized over five years on astraight-line basis. All intercompany transactions and accounts havebeen eliminated.
Under accounting standards for consolidation, a subsidiary isdefined as an enterprise which is controlled by another enterprise and isa majority (more than 50%) owned enterprise or a 40% to 50% owned
enterprise that meets certain criteria. In addition, an affiliated company
is defined as an enterprise in which the investor has significant influenceand is an enterprise other than a subsidiary that is a 20% or more owned
enterprise or 15% to 19% owned enterprise that meets certain criteria.
For the years ended March 31, 2008, 2007 and 2006, the number of thecompanies that were not more than 50% owned enterprises, but were
nevertheless classified as subsidiaries based on the judgment of theCompany in accordance with the accounting standards was two, fiveand five, respectively.
The number of subsidiaries and affiliates for the years ended March
31, 2008, 2007 and 2006 was as follows:
Subsidiaries:
Domestic
Overseas
Affiliates accounted for by the equity method
Affiliates stated at cost

2008

2007

2006

47
2
3
11

46
4
2
8

39
4
6
10

The Company’s overseas subsidiaries close their books at
December 31 every year, three months earlier than the Company
and its domestic subsidiaries. The Company has consolidated theoverseas subsidiaries’ financial statements as of their year-end because
the difference between the fiscal year-ends was not more than threemonths. Significant transactions for the period between subsidiaries’
year-end and the Company’s year-end are adjusted for on consolidation.
The overseas subsidiaries adopt accounting principles generally
accepted in their respective countries (see Note 1). No adjustments toconform to accounting principles generally accepted in Japan have been
made to their financial statements on consolidation, as allowed underJapanese GAAP effective at the current fiscal year-end.

(a-ii) Stock-for-stock exchange agreements with the subsidiaries
On May 17, 2005, the Company entered into stock-for-stock
exchange agreements with four subsidiaries in order to increase theCompany’s respective equity share in the subsidiaries to 100%. The
agreements were subsequently approved by the shareholders at theannual general meeting of the Company and the respective companies

16

held in June 2005. In accordance with this agreement, on October
1, 2005 (the stock-for-stock exchange date), the Company newly
issued 9,048,616 shares of the Company’s common stock and reissued
3,234,381 shares of treasury stock at various exchange rates representing
a certain number of shares of the Company’s common stock (see below)
for one share of common stock to their respective minority shareholdersof each of the four subsidiaries.
Details of the stock-for-stock exchange transactions with thesubsidiaries were as follows:
Exchange rate representing thenumber of shares of common
stock of the Company for one
share of common stock of thesubsidiaries(shares)
Toyota Corolla Gifu Co., Ltd. (“Corolla”)
Gifu Hino Motor Co., Ltd. (“Hino”)
Netz Toyota Gifu Co., Ltd. (“Netz”)
Netz Toyota Centro Gifu Co., Ltd. (“Centro”)

1.68
1.11
27.80
5.12

Unaudited financial information of the four subsidiaries as of andfor the six months ended September 30, 2005 was as follows:
Corolla

Hino
Netz
Millions of yen

Operating revenue¥ 17,172 ¥ 12,663 ¥ 9,383 ¥
Net (loss) income for the period
(540)
(148)
103
Total assets
35,85828,274
11,992
Net assets
28,184
17,069
7,083

Centro

4,990
(421)
7,035
2,680

On October 1, 2006, the Company exercised a stock-for-stock
exchange transaction with an affiliate, Hokkaido Seino Transportation
Co., Ltd. (“Hokkaido Seino”), in order to increase the Company’s
equity share in the affiliate from 39.05% to 100%. This reorganization
is expected to strengthen the integration of the Seino Group, improve
efficiency, and enable the group to adapt to the change in the businessenvironment with greater mobility and flexibility. On October 1, 2006,
the Company reissued 438,840 shares of the Company’s treasury stock
to the shareholders of the affiliate at the exchange rate of 0.24 sharesof the Company’s treasury stock for one share of common stock of
the affiliate. As a result of this transaction, negative goodwill of ¥147
million was recorded as the excess of the underlying equity in the fairvalue of the acquired net assets over the acquisition cost of ¥533 million.
The assets acquired and liabilities assumed of Hokkaido Seino as of
October 1, 2006 were as follows:
Millions of yen
Assets:Current assets
Non-current assets
			 Total assets
Liabilities:
Current liabilities
Non-current liabilities
			 Total liabilities

¥
¥
¥
¥

2,831
5,628
8,459
4,247
2,021
6,268

Unaudited information about the transactions effect on the
consolidated operational results of the Seino Group for the year ended
March 31, 2007, assuming this transaction had been completed as ofApril 1, 2006 (the beginning of the fiscal year), was as follows:
Operating revenue
Operating loss
Net loss

Millions of yen
¥
2,576
(116)
(75)

In addition, on October 1, 2006, the Company exercised a stockfor-stock exchange transaction with its subsidiary, Seino Information
Service Co., Ltd., in order to increase the Company’s equity share in
the subsidiary to 100%. On October 1, 2006, the Company reissued
673,128 shares of the Company’s treasury stock at the exchange rate of
280.47 shares of the Company’s treasury stock for 1 share of common
stock of the subsidiary. As a result of this transaction, negative goodwillof ¥31 million was recognized as the excess of the underlying equity inthe net assets of the subsidiary over the acquisition cost of ¥814 million.

2003, and the Accounting Standards Board of Japan (“ASBJ”) issued
the “Accounting Standard for Business Divestitures (ASBJ Statement
No. 7)” on December 27, 2005 and the implementation guidance,“Guidance on Accounting Standard for Business Combinations andAccounting Standard on Business Divestitures (ASBJ Guidance No.
10),” on December 22, 2006. The Seino Group adopted these standards
effective from the year ended March 31, 2007. This accounting change
had no material effect on the operational results of the Seino Group.

(b) Accounting standard for presentation of net assets inbalance sheet(a-iii) Acquisition for the current fiscal year

During the year ended March 31, 2008, the Company acquired
additional common shares of Izu Seino Transportation Co., Ltd. (“IzuSeino”), and Izu Seino became a 51% owned subsidiary of the Company
effective April 1, 2007. The assets and the liabilities of Izu Seino as of
the initial consolidation by the Company were as follows.
Thousands of
U.S. dollars

Millions of yen
Assets:Current assets
Non-current assets
Goodwill
			 Total assets
Liabilities:
Current liabilities
Non-current liabilities
			 Total liabilities

¥
¥
¥
¥

73
63
74
210
58
152
210

$
$
$
$

(c)

730
630
740
2,100
580
1,520
2,100

(a-iv) Acquisitions for the years 2006 and 2007

For the year ended March 31, 2007, the Company acquired an
additional equity share of Shikoku Seino Transportation Co., Ltd.
(“Shikoku Seino”), which was previously an affiliate accounted for by
the equity method, and Shikoku Seino became a subsidiary. The assets
and liabilities of Shikoku Seino as of the initial consolidation were as
follows.

¥
¥
¥
¥

(e)

3,941
9,033
12,974
4,987
5,966
10,953

During the year ended March 31, 2007, the Company acquired
additional common shares of two affiliates, Showa Seino Transportation
Co., Ltd. (“Showa Seino”) and Hinomaru Seino Transportation Co.,
Ltd. (“Hinomaru Seino”), and the companies became subsidiaries of theCompany effective October 1, 2006. The assets and liabilities as of theinitial consolidation of the companies were as follows.

Current assets¥
Non-current assets
Current liabilities
Non-current liabilities
Goodwill
Minority interests
Less, equity interests previously
held by the Company
			 Additional acquisition costs ¥Showa
Hinomaru
Seino
Seino
Millions of yen
1,977
¥
1,238
3,528
3,275
(2,193)(1,319)(5,152)(2,168)
387
33
—
(498)
1,463
10

¥

(a-v) Accounting standard for business combinations

(382)
179

The Business Accounting Council of Japan (“BACJ”) issued the“Accounting Standard for Business Combinations” on October 31,

Accounting standard for statement of changes in net assets

Effective from the year ended March 31, 2007, the Seino
Group adopted the accounting standard, “Accounting Standard forStatement of Changes in Net Assets” (ASBJ Statement No. 6), and theimplementation guidance for the accounting standard for statementof changes in net assets (ASBJ Guidance No. 9), and prepared theaccompanying consolidated statements of changes in net assets forthe years ended March 31, 2008 and 2007 in accordance with thesestandards. The accompanying consolidated statement of changes in
net assets for the year ended March 31, 2006, which was voluntarily
prepared for inclusion in the consolidated financial statements, has notbeen adapted to the new presentation rules.

(d) Cash and cash equivalents

Millions of yen
Assets:Current assets
Non-current assets
			 Total assets
Liabilities:
Current liabilities
Non-current liabilities
			 Total liabilities

Effective from the year ended March 31, 2007, the Seino Group
adopted the new accounting standard, “Accounting Standard for
Presentation of Net Assets in the Balance Sheet” (ASBJ Statement No.
5), and the implementation guidance for the accounting standard forpresentation of net assets in the balance sheet (ASBJ Guidance No. 8.)
The consolidated balance sheets prepared in accordance with
the new standards comprise three sections, which are the assets,
liabilities and net assets sections. The consolidated balance sheet
reported pursuant to the previous presentation rules comprised theassets, liabilities, minority interests and shareholders’ equity sections.
Under the new standards, the following items are presented differently
from the previous reporting. Under the previous presentation rules,
companies were required to present minority interests between the noncurrent liabilities and the shareholders’ equity sections. If the previous
accounting method had been applied for the consolidated balance sheet
at March 31, 2007, equity would have amounted to ¥286,351 million.

(f)
(g)

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

Investments and marketable securities

The Seino Group classifies certain investments in debt and equity
securities as “held-to-maturity,” “trading” or “available-for-sale,”whose classification determines the respective accounting method 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 at fairvalue, and net unrealized gains or losses on these securities are reported
as a component of net assets, net of applicable income taxes. Gains andlosses on the disposition of available-for-sale securities are computed
based on the moving-average method. Nonmarketable securities
without available market quotations for available-for-sale securities arecarried at cost determined by the moving-average method. Adjustments
in carrying values of individual securities are charged to income throughwrite-downs, when a decline in value is deemed other than temporary.

Accounting for derivatives

At March 31, 2008 and 2007, the Seino Group did not hold or had
not issued any derivative transactions.

Allowance for doubtful accounts

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

(h) Inventories(i)

Inventories for supplies are principally stated at moving-average
cost, and inventories for vehicles and work-in-process are principallystated at cost determined by the specific identification method.

Property and equipment and depreciation

Property and equipment, including significant renewals andadditions, are stated at cost. Property and equipment of the Company
and certain subsidiaries are depreciated by the straight-line method forbuildings and vehicles and by the declining-balance method for otherproperty.
Property and equipment of other subsidiaries have been principally
depreciated by the declining-balance method, except for buildings
acquired on and after April 1, 1998 and the property held for leases.

17

(j)

Buildings acquired on and after April 1, 1998 by the domestic
subsidiaries are depreciated by the straight-line method. Some of thesubsidiaries capitalize property for which the cost of which is not lessthan ¥100,000 and below ¥200,000 and depreciate it over three years on
a straight-line basis.
The leased property of a certain subsidiary engaged in leasing
operations as lessor is recorded at cost as property held for leases. The
property was included in property and equipment in the accompanying
consolidated balance sheets and is depreciated over the lease
contract terms by the straight-line method to the amount equal to theestimated disposal value at the lease termination date. Expenditure on
maintenance and repairs is charged to operating income as incurred.
Upon the disposal of the property, the cost and accumulated depreciation
are removed from the accounts and any gain or loss is recorded asincome or expenses.
In accordance with the amendment of the Corporation Tax Law ofJapan, effective from the year ended March 31, 2008, the Company andits domestic subsidiaries changed the depreciation method of property
and equipment acquired on and after April 1, 2007 to the method
pursuant to the amended Corporation Tax Law of Japan. As a result, as
compared with the previous accounting method, operating income andincome before income taxes and minority interests decreased by ¥432
million ($4,320 thousand), respectively, for the year ended March 31,
2008.
As for property and equipment acquired before April 1, 2007, theCompany and its domestic subsidiaries previously depreciated up to thedepreciable limit of 5% of the acquisition cost in accordance with the
Corporation Tax Law of Japan. Effective from the year ended March
31, 2008, the remaining residual value is depreciated over five years
using the straight-line method from the fiscal year following the year
in which the depreciable limit of 5% of the acquisition cost is reached,pursuant to the amended Corporation Tax Law of Japan. As a result,operating income and income before income taxes and minority interests
decreased by ¥693 million ($6,930 thousand), respectively, for theyear ended March 31, 2008, as compared with the previous accounting
method.

Employees who terminate their service with the Seino Group areentitled to retirement benefits generally determined by reference tocurrent basic rates of pay, length of service and conditions under which
the termination occurs.
In accordance with the accounting standard for employee retirement
benefits, the Seino Group has recognized the retirement benefits for
employees, including pension cost and related liability, based on theactuarial present value of projected benefit obligation using the actuarial
appraisal approach and the fair value of pension plan assets available forbenefits at the fiscal year-end. Unrecognized actuarial differences fromchanges in the projected benefit obligation or the value pension plan
assets resulting from the experience different from that assumed andfrom changes in assumptions are amortized on a straight-line basis overprincipally ten years, a period within average remaining service years of
employees from the following year in which they arise. Unrecognizedprior service cost is amortized using the straight-line method overprincipally ten years, a period within the average remaining service
years of employees from the year in which it occurs.

(n) Severance indemnities for directors and statutory auditors

For financing leases that do not transfer ownership of the leased
property to the lessee during the term of the lease, the leased property of
the Company and its domestic subsidiaries, as lessee, is not capitalized
and the related rental and lease expenses are charged to income as
incurred as accepted by the “Opinion Concerning Accounting Standard
for Leases” issued by BACJ and the related practical guideline issued by
the Japanese Institute of Certified Public Accountants (“JICPA”).
Intangible assets are amortized on a straight-line basis. Software,
which is included in intangible assets, is amortized using the straightline method over the estimated useful life of five years.

(o)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
BACJ and the related practical guidance issued by ASBJ. The standard
requires that fixed assets be reviewed for impairment whenever eventsor changes in circumstances indicate that the carrying amount of anasset may not be recoverable. An impairment loss shall be recognizedin the income statement by reducing the carrying amount of impaired
asset or group of assets to the recoverable amount to be measured as
the higher of the asset’s net selling price or value in use. Fixed assets
include land, buildings and other forms of property, as well as intangible
assets, 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 businessbranches, other than idle or unused property. At March 31, 2008, 2007
and 2006, recoverable amounts of assets were measured based on value
in use calculated using discounted future cash flows at interest rates
principally of 4.7%, 5.4% and 4.7%, respectively, or net selling prices
primarily using appraisal valuations. As a result, the Seino Group
recognized impairment loss for the property of 48 business branches,
6 idle properties and goodwill for the year ended March 31, 2008, forthe property of 38 business branches, 4 idle properties and goodwill
for the year ended March 31, 2007, and for the property of 69 businessbranches and 14 idle properties for the year ended March 31, 2006 as
follows:
Millions of yen

18(m) Employee retirement benefits

Leases(k) Intangible assets(l)Accumulated impairment losses have been directly deducted fromthe applicable assets.

Buildings and structures ¥Land
Other property
Goodwill
¥

2008

574 ¥
2,443
3
95
3,115 ¥

2007

2006

Thousands of
U.S dollars
2008

90 ¥ 2,016 $ 5,740
1,227
19,65324,430
23
255
30
387
—
950
1,727 ¥ 21,924 $ 31,150

The Seino Group may pay severance indemnities to directors andstatutory auditors that are subject to the approval of the shareholders.
Until March 31, 2007, although some of the subsidiaries provided for
accrued severance indemnities at the full amount of the liabilities of
directors’ and statutory auditors’ benefits at the respective balance sheet
dates, the Company and other subsidiaries did not provide accrued
severance indemnities for directors and statutory auditors, and theseamounts were charged to income when paid. Effective from the year
ended March 31, 2008, the Company and other subsidiaries changed
the accounting method to provide for accrued severance indemnities
for directors and statutory auditors at the amount that would be payable
if the directors and corporate auditors retired at the end of the fiscal
year based on internal rules, in accordance with the JICPA Audit andAssurance Committee Report No. 42, “Treatment for Auditing ofReserve Under Special Taxation Measures Law, Reserve Under Special
Laws and Reserve for Retirement Benefits to Directors and Corporate
Auditors,” issued by JICPA on April 13, 2007. As a result, the amountof ¥1,073 million ($10,730 thousand) attributable to the prior years wasrecorded as other expenses in the accompanying consolidated statementsof operations, and operating income and income before income taxes
and minority interests for the year ended March 31, 2008 decreased by¥161 million ($1,610 thousand) and ¥1,235 million ($12,350 thousand),
respectively, as compared with the previous accounting method.

Income taxes

Income taxes are accounted for by the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the carrying amountsof existing assets and liabilities and their respective tax bases andoperating loss carryforwards. Deferred tax assets and liabilities aremeasured using the enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected tobe recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in the period that includes theenactment date.

(p) Revenue recognition for freight charges

The Seino Group recognizes freight charges as revenue when
freight is received for shipment. In relation to its revenue recognition,
the Seino Group records freight charges from customers and paid tointerline carriers as operating revenue and operating costs and expenses,
respectively.

(q) Revenue recognition for installment sale commissions(r)

Effective from the year ended March 31, 2007, the Seino Groupchanged the accounting method for income classification to record
installment sale commissions in the income statement from otherincome to operating revenue. This change resulted from the increasein the importance of such commission income under recent businessdevelopments of the Seino Group and for comparative purposes for
information of competitors. As a result, as compared with the previous
accounting method, operating income increased by ¥1,044 million,
although there was no effect on income before income taxes andminority interests for the year ended March 31, 2007.

Revenue recognition for vehicle sales

Effective April 1, 2006, the Seino Group changed the accounting
method for the recognition of vehicle sales. From the year ended March
31, 2007, the Seino Group recognizes vehicle sales when a vehicle isregistered rather than when a vehicle is delivered to the customers, thepractice under the previous accounting method. This accounting change
was made for comparative purposes for information of competitors and

(s)

(t)

for the improvement in the accounting treatments under the businessreorganization of the Seino Group. As a result, as compared with theprevious accounting method, operating revenue increased by ¥854
million, and operating income and income before income taxes andminority interests increased by ¥110 million, respectively, for the year
ended March 31, 2007.

Enterprise taxes

The Seino Group records local corporate enterprise taxes calculated
based on the “added value” and “capital” amounts when levied as sizebased corporate taxes for local government enterprise taxes, which areincluded in selling, general and administrative expenses.

Accounting standard for directors’ bonus

From the year ended March 31, 2007, the Seino Group adopted
the “Accounting Standard for Directors’ Bonus (ASBJ Statement No.
4)” issued by ASBJ on November 29, 2005. The standard requires thatthe directors’ bonuses, including those for statutory auditors, shall be
accounted for as expense in the accounting period in which such bonuses
are accrued. Until the year ended March 31, 2006, bonuses to directors
and statutory auditors were recorded as part of the appropriation ofretained earnings in the fiscal year when a proposed appropriation ofretained earnings for directors’ bonuses was approved by the Board of
Directors and/or shareholders. Because the Seino Group has accruedsuch bonuses, operating income and income before income taxes andminority interests decreased by ¥111 million, respectively, for the year
ended March 31, 2007, as compared with the previous accounting
method.

(u) Appropriation of retained earnings

Cash dividends are recorded in the fiscal year during which a
proposed appropriation of retained earnings is approved by the Boardof Directors and/or shareholders. See Note 2(t) for the accounting for(v)

bonuses to directors and statutory auditors.

Translation of foreign currency accounts

Receivables, payables and securities, other than stocks ofsubsidiaries and certain other securities, are translated into Japanese
yen at the exchange rates prevailing at the fiscal year-end. Transactions
in foreign currencies are recorded based on the prevailing exchange
rates on the transaction dates. Resulting translation gains and losses areincluded in the current earnings.
In respect of the financial statement items of overseas subsidiaries,
all asset, liability, income and expense accounts are translated into
yen by applying the exchange rates in effect at the fiscal yearend. Translation differences, after allocating to portions attributable
to minority interests, are reported as foreign currency translation
adjustments in a component of net assets on the accompanying
consolidated balance sheets.

(w) Per share data

Basic net income (loss) per share is computed by dividing income(loss) available to common shareholders by the weighted-average
number of shares of common stock outstanding during the respective
year. Diluted net income per share is computed as if warrants or stock
options were exercised at the beginning of the relevant year or (if later)on their first exercise date and as if the funds obtained thereby wereused to purchase common stock at the average market price during therespective year under the treasury stock method. Diluted net income pershare is not disclosed as Seino Group had no diluted common shares forthe years ended March 31, 2008, 2007 and 2006.
Cash dividends per share shown for each fiscal year in theaccompanying consolidated statements of operations represent dividends
declared as applicable to the respective years.

3. Investments
At March 31, 2008 and 2007, short-term investments consisted of
the following:
Millions of yen

Marketable securities:¥
Bonds
		 Total marketable securities
Other nonmarketable securities
Time deposits with an original
maturity of more than three months
¥

2008
1,252
1,252
—
7,163
8,415

2007
¥

¥

1,907
1,907
2,000
5,761
9,668

Thousands of
U.S dollars

2008

$

$

12,52012,520—71,63084,150At March 31, 2008 and 2007, investment securities consisted of
the following:
Millions of yen

2008

Marketable securities:
Equity securities¥ 19,918
Bonds
4,214
168
Other
			 Total marketable securities
24,300
1,776
Other nonmarketable securities¥ 26,076

2007¥ 26,411
5,430
225
32,066
1,860¥ 33,926

Thousands of
U.S dollars

2008$ 199,180
42,1401,680
243,000
17,760$ 260,760

At March 31, 2008 and 2007, the fair value of marketablesecurities classified as held-to-maturity and the related net unrealized
gains were as follows:
Carrying
value

Fair value

Net unrealized
gains

Millions of yen
Bonds included in investment securities:
At March 31, 2008¥
At March 31, 2007
Bonds included in investment
securities:
At March 31, 2008

$

200 ¥
202 ¥
2
500
499
(1)
Thousands of U.S. dollars
2,000

$

2,020

follows:$

20

Marketable securities classified as available-for-sale are stated atfair value with unrealized gains and losses excluded from the current
earnings and reported as a net amount within the net assets accountuntil realized. At March 31, 2008 and 2007, gross unrealized gains andlosses for marketable securities classified as available-for-sale were as

Cost

At March 31, 2008:
Equity securities
Bonds
Other
At March 31, 2007:
Equity securities
Bonds
Other
At March 31, 2008:
Equity securities
Bonds
Other

Gross
Gross
unrealized unrealized
gains
lossesMillions of yen

Fair andcarrying
value¥

9,566 ¥ 10,859 ¥
5,272
27
133
43
¥ 14,971 ¥ 10,929 ¥(507) ¥ 19,918
(33)
5,266
(8)
168
(548) ¥ 25,352¥(45) ¥ 26,411
(80)
6,837
6)
225
(131) ¥ 33,473

9,536 ¥ 16,920 ¥
6,876
41
133
98
¥ 16,545 ¥ 17,059 ¥Thousands of U.S. dollars$ 95,660 $ 108,590 $ (5,070) $ 199,180
52,720270(330)
52,660
1,330
430
(80)
1,680
$ 149,710 $ 109,290 $ (5,480) $ 253,520

Expected maturities of held-to-maturity and available-for-sale debt
securities at March 31, 2008 were as follows:
Thousands of
U.S. dollars

Millions of yen
Due in one year or less¥Due after one year through five years
Due after five years through ten years
Due after ten years
¥

1,250
2,817
1,000
400
5,467

$

$

12,50028,17010,0004,000
54,670At March 31, 2008 and 2007, investments in and long-term loans
to affiliates consisted of the following:
Millions of yen

Investments, accounted for by theequity method for significant
affiliates and at cost for others ¥Interest bearing long-term loans
¥

2008
3,382
45
3,427

2007
¥
¥

3,541
52
3,593

Thousands of
U.S dollars

2008$ 33,820450$ 34,270

19

4. Property and Equipment
At March 31, 2008 and 2007, property and equipment consisted of
the following:Thousands of
U.S dollars

Millions of yen

2007
2008
2008
Property held for own use, at cost:Land¥ 131,631 ¥ 131,250 $ 1,316,310
202,232
Buildings and structures
205,671
2,056,710
87,755
Vehicles
88,699886,990
24,121
Machinery and equipment
25,295
252,950553
300
30Construction in progress
445,911
4,513,260
451,326
Less, accumulated depreciation (211,110) (203,786) (2,111,100)
		 Sub-total
242,125
240,216
2,402,160
Property held for leases, at cost:
Vehicles, equipment and other
717
729
7,290
(468)
(5,010)(501)
Less, accumulated depreciation
249
228
2,280
		 Total property and equipment ¥ 240,444 ¥ 242,374 $ 2,404,440

One of the consolidated subsidiaries elected to carry out a onetime revaluation to restate the cost of land used for business operations
at values reassessed on March 31, 2002, reflecting adjustments forland shape and other factors based on appraisal values issued by theJapanese National Tax Agency in accordance with the Law Concerning
Revaluation of Land. According to the Law, the excess of the original
book values over reassessed values, net of the tax effect and minority
interests portion, is recorded in net assets as land revaluation decrementin the accompanying consolidated balance sheets. At March 31, 2008
and 2007, the difference between the carrying values of land used forthe business operations after revaluation over the current market valueof the land at the fiscal year-end amounted to ¥1,595 million ($15,950
thousand) and ¥1,281 million, respectively.

5. Short-term Borrowings and Long-term Debt
At March 31, 2008 and 2007 short-term borrowings consisted of
the following:
Millions of yen

2008
Unsecured bank overdrafts withinterest rates ranging from
0.95% to 1.45% per annum at
March 31, 2008¥
Short-term bank borrowings,
principally unsecured andrepresented by notes withinterest rates ranging from0.525% to 1.875% per annumat March 31, 2008¥

2007

Thousands of
U.S dollars

2008

25

2,440
2,465

¥

¥

55

3,645
3,700

$

$

250

24,40024,650Millions of yen

2008

Less, current portion

20

¥

827

2007

Thousands of
U.S dollars

2008

$

8,270

1,656
1,204
98
83
3,435
2,114
(1,023)(649)
1,465 ¥ 2,412 $

12,040830
21,140(6,490)14,650¥

1,681

Thousands of
U.S dollars

Millions of yen

2008

At March 31, 2008, the Company and certain subsidiaries
had unsecured overdraft agreements with 11 banks. Under suchagreements, the Company and these subsidiaries were entitled towithdraw up to ¥53,840 million ($538,400 thousand). The Company
and the subsidiaries were not obligated to pay commitment fees on theunused portions of such overdraft facilities.
At March 31, 2008 and 2007, long-term debt consisted of thefollowing:

Loans from banks, partly secured,
due through 2017 repayable on an
installment basis with interest rates
ranging from 0.943 % to 2.5% perannum at March 31, 2008¥
Loans from government agencies,
principally mortgage,
repayable on an installment
basis with interest rates
ranging from 0.504% to 3.6%
per annum at March 31, 2008
Other

At March 31, 2008 and 2007, the following assets were pledged ascollateral for certain short-term borrowings and long-term debt in theaggregate amount of ¥1,968 million ($19,680 thousand) and ¥3,129
million, respectively:

Land¥
Buildings and structures
Time deposits included in shortterm investments

7,804
4,615

2008

2007
¥

7,936
4,990

11

11

$

78,04046,150110

The aggregate annual maturities of long-term debt as at March 31,
2008 were as follows:Year ending March 31,
2009
2010
2011
2012
2013
Thereafter

Millions of yen
¥
649
469
328
190
165
313
¥
2,114

Thousands of
U.S. dollars
$
6,490
4,690
3,280
1,900
1,650
3,130
$
21,1406. Employee Retirement Benefits
The Company and its domestic subsidiaries have defined benefit
plans. The following table reconciles the benefit liability as of March
31, 2008 and 2007:
Millions of yen

2008

2007

Thousands of
U.S dollars

2008

Reconciliation of benefit liability:
Projected benefit obligation¥ 54,113 ¥ 56,400 $ 541,130
Less, fair value of pension plan
(2,428)(1,899)(18,990)
assets at end of year
53,972
52,214522,140Less, unrecognized actuarial
differences (loss)(2,926)(1,799)(17,990)
Less, unrecognized past
(2,394)(1,721)(17,210)service cost
Net amounts of employee
retirement benefit
liability recorded on the
consolidated balance sheets¥ 48,694 ¥ 48,652 $ 486,940
Notes: 1. P rojected benefit obligation of certain subsidiaries wascalculated using the simplified calculation method aspermitted by the accounting standard for employee retirement
benefits.
2. Some of the Company’s subsidiaries participate in a certain
corporate pension plan under the multi-employer pension
program established by other employers, together withthe subsidiaries. As the information that the pension plan
assets calculated based on the proportionate contributions
made by the subsidiaries is not available, the Seino Group
records the related required contributions to the pension
plan as net periodic retirement benefit expense for the period
in accordance with the amended accounting standard for
employee retirement benefits (ASBJ Statement No. 14). The
above table excluded the portion for the pension plan assets
under the multi-employer pension program. The information
for the funded status of the entire corporate pension plan
available at the latest calculation period-end was as follows:

7.

Thousands of
U.S. dollars

Millions of yen
Pension plan assets at March 31,
2007
Related benefit obligation under
the program		 Plan surplus¥

20,925$

209,250¥(18,110)2,815$(181,110)
28,150

Ratio of the subsidiaries’ payroll to¥
the totals in the entire plan

39.6%

The components of net periodic retirement benefit expenses for theyears ended March 31, 2008, 2007 and 2006 were as follows:
Millions of yen

Net periodic retirement
benefit expenses:
Service cost¥
Interest cost
Expected return on
pension plan assets
Amortizationof actuarial
differences
Amortization of past
service cost
Total retirement
benefit expenses ¥Thousands of
U.S dollars
2008

2008

2007

2006

2,844 ¥
1,084

2,760 ¥
1,033

2,492 $ 28,440
925
10,840

(42)

(34)

(22)

(420)

553

494

482

5,530

294

335

295

2,940

4,733 ¥

4,588 ¥

4,172 $ 47,330

Major assumptions used in the calculation of the above information
for the years ended March 31, 2008, 2007 and 2006 were as follows:
2008

2008

2007

Method attributing the projected Straight- Straight-line Straight-line
benefits to periods of services line method
methodmethodDiscount rate
2.0%
2.0%
2.0%
Expected rate of return on
pension plan assets
2.0%
2.0%
2.0%
10 years
Amortization of past service principally principally
10 yearscost
10 years
Amortization of actuarial
principally principally principally
10 years
10 yearsdifferences
10 yearsContingent Liabilities
At March 31, 2008 and 2007, the Seino Group was contingently
liable for trade notes endorsed to affiliates and third parties,
and for guarantees, including substantial guarantees, principallyof indebtedness of affiliates and third parties in the aggregate
amounts of ¥2,462 million ($24,620 thousand) and ¥3,059 million,
respectively.

8. Lease Commitments
The Seino Group has entered into various rental and leaseagreements for land and buildings to be used for truck terminals
and warehouses which are generally cancelable with a few months'
advance notice and non-cancelable lease agreements for computerequipment and radio facilities with two-to-nine year contract terms
as lessee. The aggregate minimum future lease payments for suchnon-cancelable lease agreements, including the imputed interest
portion, as at March 31, 2008 and 2007 were as follows:
Millions of yen

Due within one year
Due after one year

2008
525
666
¥ 1,191

¥

2007
735
949
¥ 1,684¥

Thousands of
U.S dollars

2008
5,250
6,660
$ 11,910$

A certain consolidated subsidiary engaged in leasing operations,as lessor, entered into various lease agreements principally for vehicles
with third parties. The leases were categorized as financing leases.
At March 31, 2008 and 2007, the aggregate future minimum leasecommitments to be received for such non-cancelable lease agreements,
including the imputed interest, were as follows:

Millions of yen

2008
164
221
¥
385

¥

Due within one year
Due after one year

2007
175
233
¥
408

¥

Thousands of
U.S dollars

2008
1,640
2,210
$ 3,850$

In addition to the above, a certain consolidated subsidiary engaged
in leasing operations leases property as lessee and leases the same
property to affiliates and the third parties as lessor. At March 31, 2008
and 2007, the future minimum commitments under such agreements,
including the imputed interest portion, were as follows:
Minimum rentals
Minimum rentals
to be paid to be received to be paid to be received
Millions of yen
Thousands of U.S. dollars

At March 31, 2008:
Due within one year ¥Due after one year
¥

7 ¥
—
7 ¥

7 $
—
7 $

At March 31, 2007:
Due within one year ¥Due after one year
¥

145 ¥
33
178 ¥

157
35
192

70 $
—
70 $

70
—
70

21

9. Net Assets(a)		

The Japanese Corporate Law (“the Law”) became effective on
May 1, 2006, replacing the former Japanese Commercial Code. The
Law is generally applicable to events and transactions occurring after
April 30, 2006 and for fiscal years ending after that date.
		
Under Japanese laws and regulations, the entire 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 shares asadditional paid-in capital, which is included in capital surplus.
		
Under the Law, in cases where a dividend distribution of surplus
is made, the smaller of an amount equal to 10% of the dividendor the excess, if any, of 25% of common stock over the total of
additional paid-in capital and legal earnings reserve must be set
aside as additional paid-in capital or legal earnings reserve. Legalearnings 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 capitalsurplus and retained earnings, respectively, which are potentiallyavailable for dividends.
		
At March 31, 2008 and 2007, respectively, capital surplus
principally consisted of additional paid-in capital. In addition, retained

earnings included legal earnings reserve of the Company in the amountof ¥4,262 million ($42,620 thousand) at March 31, 2008 and 2007,
respectively.
		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.
(b)		 On July 1, 2005, Seino implemented a rights plan using stockacquisition rights and a trust mechanism (”trust-type rights plan”) asa means of dealing with the acquisition of the Company’s common
stock resulting in a particular shareholder holding more than 20% of
the Company’s common stock and proposals of acquisition without
the prior approval of the Board of Directors, and issued stockacquisition rights to The Sumitomo Trust & Banking Co., Ltd. at
no charge as part of the plan based on the approval of shareholders
at the annual general meeting of shareholders in June 2005. Up to397,262,334 shares of common stock would be issuable at a certain
price for the exercise of these stock acquisition rights for the period
from July 1, 2005 to June 30, 2008.
(c)		 At the annual shareholders’ meeting held on June 26,
2008, the shareholders approved cash dividends of ¥11 pershare, amounting to ¥2,195 million ($21,950 thousand). The
appropriations have not been accrued in the consolidated
financial statements as of March 31, 2008 as such appropriations
are recognized in the period in which they are approved by theshareholders.

10. Income Taxes
The tax effects on temporary differences that give rise to asignificant portion of deferred tax assets and liabilities at March 31,
2008 and 2007 were as follows:
Millions of yen

Thousands of
U.S dollars

2007
2008
2008
Deferred tax assets:
Employee retirement benefit liability ¥ 20,243 ¥ 20,226 $ 202,430
Enterprise tax accruals
370
337
3,370
Accrued bonuses
3,768
3,633
36,330Intercompany capital gains
902
978
9,780
Operating loss carryforwards
674
1,388
13,880Loss on assets transferred
1,511
1,049
10,490
Impairment loss on fixed assets
10,08910,968109,680
Allowance for doubtful accounts
1,252
164
1,640
2,423
4,165
41,650Other
41,21542,925429,250(15,877)(16,992)(169,920)
Less, valuation allowance
25,33825,933259,330
Deferred tax liabilities:
Deferred capital gains
6,278
6,443
64,430
Unrealized gains on availablefor-sale securities
6,734
4,107
41,0706,953
8,140
81,400
Valuation adjustments for consolidation
19,965
18,690186,900¥ 7,243 ¥ 5,373 $ 72,430
Net deferred tax assets
At March 31, 2008 and 2007, deferred tax assets and liabilities
were recorded as follows:
Millions of yen

Deferred tax assets:
Current
Non-current
Deferred tax liabilities:
Current
Non-current

2008
¥

4,435
10,446
2
7,636

2007
¥

Thousands of
U.S dollars

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 the periods in which those temporary differences become
deductible. At March 31, 2008 and 2007, a valuation allowance
was provided to reduce the deferred tax assets to the extent that the
management believed that the amount of the deferred tax assets was notrealizable.
A reconciliation of the differences between the Japanese statutory
effective tax rate and the actual effective income tax rate on pretax
income reflected in the accompanying consolidated statements ofoperations for the year ended March 31, 2008 was as follows:
Percentage of pretax income

Japanese statutory effective tax rate
Increase (decrease) due to:Permanently nondeductible expenses
Tax exempt income
Local minimum taxes-per capita levy
Amortization of negative goodwill
Changes in valuation allowance
Other
Actual effective income tax rate

40.4%
0.9
(0.7)
4.2
(13.1)
16.5
1.8
50.0%

Reconciliation for the year ended March 31, 2007 and 2006 was
not disclosed because the difference was not material for the year ended
March 31, 2007 and the Seino Group recorded a net loss for the year
ended March 31, 2006.

2008

4,560
10,380$ 44,350
104,460

4
9,563

20
76,36011. Subsequent Event

22

Pursuant to the resolution by the Board of Directors of theCompany on February 13, 2008, on April 1, 2008, Kyushu Seino
Transportation Co., Ltd., a subsidiary of the Company, took over mostof the transportation business of Sengoku Seino Transportation Co.,
Ltd., acquiring the vehicles and operational assets and assuming theliabilities such as employee retirement benefit liability. In addition,
Kyushu Seino Transportation Co., Ltd. also acquired land and buildings
from Iwasaki Corporation and Shiratsuyu Company, Ltd. on April 1,

2008. This business transfer is expected to strengthen the integrationof the Seino Group and improve optimization and efficiency byintegrating the Kyushu area into one huge network and making uniform
homogeneous the services of the Seino Group. The consideration forthis transaction amounted to approximately ¥5,400 million ($54,000
thousand), and goodwill of approximately ¥2,000 million ($20,000
thousand) will be recorded in the year ending March 31, 2009.

12. Segment Information
The Seino Group operates in four business segments: transportation services, vehicle sales, leasing for real estate services and other services. Information byindustry segment for the years ended March 31, 2008, 2007 and 2006 was summarized as follows:
Transportation

For the year 2008:services
Operating revenue:
		 External customers¥
331,862
1,669
		 Inter-segment sales			
Total operating revenue
333,531
329,073
Operating costs and expenses
¥
4,458
			
Operating income

Vehicle sales¥¥

Leasing for realestate services

85,537
8,473
94,01090,138
3,872

¥

¥

1,146
—
1,146
175
971

Other

Millions of yen¥
33,43339,64473,07772,063
¥
1,014

Total

¥

¥

Elimination

451,978
49,786
501,764
491,449
10,315¥¥

Consolidated—(49,786)(49,786)(49,396)(390)¥

451,978—
451,978442,053
9,925¥

Identifiable assets¥
Depreciation
Impairment loss on fixed assets
Capital expenditures

338,843
15,2692,713
17,923¥85,364
1,690
386
1,915

¥

9,623
45
—
—

¥

29,830
268
16
277

¥

463,660
17,272
3,115
20,115¥(5,789)
(256)
—
(461)

¥

457,871
17,016
3,115
19,654

For the year 2007:
Operating revenue:
		 External customers¥
		 Inter-segment sales			
Total operating revenue
Operating costs and expenses¥
Operating income

327,574
1,705
329,279
323,724
5,555¥

85,54910,18095,72992,608
3,121

¥

1,079
—
1,079
174
905

¥

35,28436,57871,862
70,574
1,288¥

449,486
48,463497,949
487,080
10,869¥—(48,463)(48,463)(48,390)(73)¥

449,486—
449,486
438,690
10,796

Identifiable assets¥
Depreciation
Impairment loss on fixed assets
Capital expenditures

338,669
14,555
1,619
14,435¥

86,114
1,601
97
1,675

¥

9,260
49
—
—

¥

27,385
304
11
171

¥

461,428
16,5091,727
16,281

¥

6,578
(256)
—
(255)

¥

468,006
16,253
1,727
16,026

For the year 2006:
Operating revenue:
		 External customers¥
		 Inter-segment sales			
Total operating revenue
Operating costs and expenses¥
Operating income

307,8881,768
309,656
303,782
5,874¥

82,334
9,153
91,487
89,333
2,154

¥

1,004
—
1,004
167
837

¥

36,29435,71972,01370,786
1,227¥

427,520
46,640474,160
464,068
10,092¥—(46,640)(46,640)(46,630)(10)¥

427,520—
427,520
417,438
10,082

Identifiable assets¥
Depreciation
Impairment loss on fixed assets
Capital expenditures

308,671
12,897
17,794
13,478¥

83,101
1,533
1,991
2,959

¥

9,015
45
2,129
2

¥

29,178
413
10
120

¥

429,965
14,88821,924
16,559¥16,968
(228)
—
(276)

¥

¥

¥

Transportation

For the year 2008:services
Operating revenue:
		 External customers$ 3,318,620
16,690		 Inter-segment sales			
Total operating revenue
3,335,310
3,290,730
Operating costs and expenses$
44,580Operating income

Identifiable assets$ 3,388,430
Depreciation
152,690
Impairment loss on fixed assets
27,130179,230
Capital expenditures
Notes:

Vehicle sales

$

$
$

¥

¥

¥

¥

Leasing for realestate services

855,370
84,730940,100
901,380
38,720$853,640
16,9003,860
19,150

$

$

Other

¥

¥

$

298,300
2,680
160
2,770

¥

Total

Thousands of U.S. dollars
11,460$334,330$ 4,519,780—
396,440
497,860
11,460730,770
5,017,640
1,750
720,630
4,914,490
9,710$
10,140$103,150

96,230450——¥$ 4,636,600
172,720
31,150201,150

Elimination

$

$
$

¥

¥

446,933
14,66021,924
16,283

Consolidated—(497,860)(497,860)(493,960)(3,900)$ 4,519,780—
4,519,780
4,420,530$
99,250(57,890)(2,560)—(4,610)$ 4,578,710
170,160
31,150196,540

1. Identifiable assets in the elimination column represent unallocated general corporate items which are not assigned to a particular industry segment such as cash
and short-term and long-term investment securities, net of inter-segment balances.
2. Accounting changes:(Change of accounting method for depreciation of property and equipment)
As disclosed in Note 2(i), effective from the year ended March 31, 2008, the Company and its domestic subsidiaries changed the depreciation method for property and equipment
acquired on after April 1, 2007 to the method pursuant to the amended Corporation Tax Law of Japan. As a result, as compared with the previous accounting method, operating incomeof the “transportation services” segment, “vehicle sales” segment and “other” segment decreased by ¥352 million ($3,520 thousand), ¥68 million ($680 thousand) and ¥12 million($120 thousand) for the year ended March 31, 2008. In addition, from the year ended March 31, 2008, the residual value of property and equipment acquired before April 1, 2007 isdepreciated over five years using the straight-line method from the fiscal year following the year in which the depreciable limit (5% of the acquisition cost) is reached pursuant to theamended Corporation Tax Law of Japan. As a result, operating income of the “transportation services” segment, “vehicle sales” segment, “leasing for real estate services” segment and“other” segment decreased by ¥653 million ($6,530 thousand), ¥29 million ($290 thousand), ¥2 million ($20 thousand) and ¥9 million ($90 thousand) for the year ended March 31,
2008, respectively, as compared with the previous accounting method.

(Change of accounting method for severance indemnities for directors and statutory auditors)

As also described in Note 2(n), until March 31, 2007, the Company and some of the subsidiaries did not provide accrued severance indemnities for directors and statutory auditorsand such amounts were charged to income when paid. Effective from the year ended March 31, 2008, the Company and such subsidiaries changed the accounting method to provide
accrued severance indemnities for directors and statutory auditors As a result, as compared with the previous accounting method, operating income of the “transportation services”
segment, “vehicle sales” segment, “other” segment and “elimination” column decreased by ¥94 million ($940 thousand), ¥6 million ($60 thousand), ¥41 million ($410 thousand) and¥20 million ($200 thousand) for the year ended March 31, 2008, respectively.

(Change of accounting method for revenue recognition for installment sale commissions)

As disclosed in Note 2(q), effective from the year ended March 31, 2007, the Seino Group changed the accounting method of income classification to record installment salecommissions. As a result, as compared with the previous accounting method, operating income of the “vehicle sales” segment increased by ¥1,044 million for the year ended March 31,
2007.

(Change of accounting method for revenue recognition for vehicle sales)

As described in Note 2(r), effective April 1, 2006, the Seino Group changed the accounting method for vehicle sales recognition. As a result, as compared with the previous
accounting method, operating revenue and operating income of the “vehicle sales” segment increased by ¥854 million and ¥110 million for the year ended March 31, 2007, respectively.

(Accounting standard for directors’ bonus)

As disclosed in Note 2(t), from the year ended March 31, 2007, the Seino Group has adopted the accounting standard for directors’ bonuses. As a result, as compared with theprevious accounting method, operating income of the “transportation services” segment, “vehicle sales” segment and “other” segment decreased by ¥35 million, ¥50 million and ¥26
million for the year ended March 31, 2007, respectively.

Geographic segment information is not shown because operating revenue and total assets of the overseas subsidiaries were not material in the years ended March
31, 2008, 2007 and 2006. Information for overseas sales is not disclosed because such sales were not material.

23

Report of Independent Auditors
Independent Auditors’ Report
To the Board of Directors of
SEINO HOLDINGS CO., LTD.:

We have audited the accompanying consolidated balance sheet of SEINO HOLDINGS CO., LTD. (the “Company”)
and its subsidiaries (together with the Company, the “Seino Group”) as of March 31, 2008, and the related consolidated
statements of operations, changes in net assets and cash flows for the year then ended, all expressed in Japanese yen.
These consolidated financial statements are the responsibility of the Seino Group’s management. Our responsibility is toindependently express an opinion on these consolidated financial statements based on our audits. The consolidated financial
statements of the Seino Group as of March 31, 2007 and 2006 were audited by other auditors who have ceased operations
and whose report dated June 26, 2007 expressed an unqualified opinion on those statements.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates madeby management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinon.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, theconsolidated financial position of the Seino Group as of March 31, 2008, and the consolidated results of its operations andits cash flows for the year then ended, in conformity with accounting principles generally accepted in Japan.
Without qualifying our opinion, we draw attention to the following:(1) As discussed in Note 2(n) to the consolidated financial statements, effective from the year ended March 31, 2008, theCompany and some of its subsidiaries changed the accounting method for severance indemnities for directors and statutory
auditors.
(2) As discussed in Note 11 to the consolidated financial statements, on April 1, 2008, Kyushu Seino Transportation Co.,
Ltd., a subsidiary of the Company, took over most of the transportation business of Sengoku Seino Transportation Co., Ltd.
and acquired land and buildings from other companies.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31,
2008 are presented solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts
and, in our opinion, the translation was made on the basis described in Note 1 of the Notes to the Consolidated Financial
Statements.

KPMG AZSA & Co.
Nagoya, Japan
June 26, 200824

Seino GroupThe Seino Group consists of Seino Holdings Co., Ltd. and 49 consolidated subsidiaries and 14 affiliates. The Seino Group
operates in four business segments, transportation services, vehicle sales, real-estate leasing services and other services.
Business relationship in the Seino Group is as follows.

Clients
Collection and
Delivery

VehiclesSales and Repairs

Domestic
Transportation

Vehicle Sales

Seino Transportation Co., Ltd.
*1
Hokkaido Seino Transportation Co., Ltd. *1
Iwate Seino Transportation Co., Ltd.
*1
Miyagi Seino Transportation Co., Ltd.
*1
Kanto Seino Transportation Co., Ltd.
*1
Kanagawa 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 Hikkoshi Co., Ltd.
*1
Seino Hokkaido Express Co., Ltd.
*1
Seino Tokyo Express Co., Ltd.
*1
Seino Hokuriku Express Co., Ltd.
*1
Seino Nagoya Express Co., Ltd.
*1
Seino Osaka Express Co., Ltd.
*1
Seino ST Service Co., Ltd.
*1
Seino Logistics Hokkaido Co., Ltd.
*1
S&N Logistics Co., Ltd.
*1
Saitama Seino Transportation Co., Ltd. *2
Tokyo Seino Transportation Co., Ltd.
*2
Mikawa Seino Transportation Co., Ltd.
Ensyu Seino Transportation Co., Ltd.
Takuma Seino Transportation Co., Ltd.
Seino Kanagawa Express Co., Ltd.
Tango Seino Transportation Co., Ltd.
Box Charter Co., Ltd.

Sales andServices

Real Estate
Leasing

Information Services

Toyota Corolla Gifu Co., Ltd. *1
Gifu Hino Motor Co., Ltd. *1
Netz Toyota Gifu Co., Ltd. *1
Netz Toyota Centro Gifu Co., Ltd. *1
Asahi Enterprise Co., Ltd. *1*1
Jms Gifu Co., Ltd.
Toyota Gifu Parts Dsitributor
Co., Ltd.

Seino Information
Service Co., Ltd.

*1

Japan Logistics
Development Co.,
Ltd.

*1

Real Estate Leasing Services
Seino Transportation Co., Ltd.
etc.

R e a l Es ta t e
Le a s ing

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

Ve h i c leS ale sOthersInternational
Transportation
Seino Logix Co., Ltd.

*1

United-Seino Transportation(Malaysia) Sdn. Bhd.

*1

Seino Customs Clearance
Service Co., Ltd.

*1

Schenker-Seino Co., Ltd.

*2

Asahi Bangkok Co., Ltd.

Asahi Leasing Co., Ltd. (Rental and lease)*1
Asahi Agency Co., Ltd. (Advertising agency)*1
Seino Do Brasil Armazens Gerais Ltda. (Storage)*1
Suito Taxi Co., Ltd. (Passenger transportation)*1
Seino Engineering Co., Ltd. (Construction)*1
Seino Family Co., Ltd. (Insurance agency service)*1
Asahi Travel Service Co., Ltd. (Travel agency)*1
Seino Staff Service Co., Ltd. (Personnel service)*1
Toyota Home Gifu Co., Ltd. (Housing sales)*1Asahi Create Co., Ltd. (Comprehensive printer)*1
Seino Business Support Co., Ltd. (Business support services) *1
Toyota Rent-A-Lease Gifu Co., Ltd. (Rental and lease)
Gifu Automotive Dealer Plaza Co., Ltd. (Rental office)

O the rTra n s p o rtatio n
S erv ice s

SEINO HOLDINGS Co., Ltd.
Note *1: Consolidated subsidiaries
49*2: Affiliates (under the equity method)
3
Companies except those mentioned above are affiliates 11
under the cost method.

25