Annual Report 2020
Year Ended March 31,2020

Profile

Seino
Co.,Co.,Ltd. Ltd.
(“the (“theCompany”)
began businessSeinoHoldings
Holdings
Company”)
beganas atrucking
company
in
1930
and
was
incorporatedin1946.
business as a trucking company in 1930 and was Based inincorporated
1946. Based in the city of Ogaki, Gifu
thecity of Ogaki,inGifu
Prefecture,areaaleading
leading
trucking
company,
expandingPrefecture,we
we aretrucking
company,
expandingin step
in step
with thegrowthof theJapanese
economyand thewiththe growthof theJapanese
economyand thedevelopmentof thedevelopment
the nation’s
extensive
expressway
nation’s
extensiveofexpressway
network.
On October
1, 2005,network.
the
On October 1, 2005, the Company transferred its
Company transferred its transportation business and other operationstransportation business and other operations to a new
to a new company—which has taken the original name Seino
company—which has taken the original name Seino
Transportation Co., Ltd.—and was renamed Seino Holdings Co., Ltd.,
Transportation Co., Ltd.—and was renamed Seino
adopting a pure
structure.
HoldingsCo.,holding
Ltd. a company
pure holding
company structure.
The Seino Group currently consists of the pure holding company
Seino Holdings,
consolidated
and 23affiliates engaged
company
Seino81Holdings,
58subsidiaries
consolidated
subsidiaries
and 14intransportation
services,
vehiclesales,
merchandise
sales,
leasingforaffiliates engaged in transportation services, vehicle sales, realestateservices andotherservices.
merchandise
sales,
leasingfor real estate services and otherservices.
In its mainstay Transportation Services business, the Company has
In steps
its mainstay
Transportation
Servicesbusiness,thethe whiletaken
to build evenmore convenientlogistics
systems, allCompanytaken steps toprinciple.
build even more convenientadhering to has
its “customer-first”
logistics
systems,
theSeino
while
adhering
its “customer-first”
As of March
31, all2020,
offersefficienttotransportation
servicesprinciple.
As
of
March
31,
2011,
Seino
offersefficientthroughout Japan via its 715 domestic terminals, a fleet of 24,917 trucks
transportation services throughout Japan via its 634 domestic
and a trucking network that averages 4,000 routes daily.
terminals, a fleet of 24,321 trucks and a trucking network that
In addition, Seino has been carrying out ESG initiatives. Its efforts inaverages 5,000 routes daily. Overseas, Seino has transferred its
thisregard haveforwarding
included: expanding
modal
in which someCo.,international
operations
toshifts
Schenker-Seino
long-distancehaulings
are replaced
railway andLtd.,a joint truck
ventureestablishedwithwith
Schenker
AGferryintransport; starting the operation of double-connected trucks; andintroducing AI-equippedheavy‐duty
trucks.its
Thus, Seino has
Company
aimshybrid
to bolster
increased the size andlabor-saving
capabilitiesofvehiclesto promotecompetitiveness by optimizing thesynergies
of Seino’s
transportation
networkreforms to its transport
methodsdomestic
for addressing
labor shortages
andand Schenker’s
global network andachieving environmental-load
reduction.
cutting-edge
systems.rapid services that
The Seino Groupis committed IT
to providing
deliver total customer satisfaction andproviding rapid
services that deliver total
will proceed down the “Road tocustomer satisfaction and will proceed down
Success” to become a highly profitable
the “Road to Success” to become a highly
company through initiatives to develop
profitable company through initiatives toa progressivebusinessbusiness model
develop a progressivemodelthatthatwillthe standard
will becomebecome
the standard
for fornext-generationtransportation
next-generation transportation business.
business.
Forward-looking Statements:
In this annual report, statements other than historicalfacts are forward-looking statements that reflect theplans and expectations of the Company. These
forward-looking statements involve risks, uncertainties
and other factors that may cause the Company’s
actual results and achievements to differ materiallyfrom those anticipated in these statements.

Contents
Contents
Financial Highlights
Financial
Highlights

11

To Our Shareholders,Shareholders,Customers
CustomersandandFriends
Friends

22

Special FeatureSpecialFeature44

Review ofReviewof Operations
Operations

66

Financial Review
Financial
Review

88

Six-year Summary
Six-year
Summary

99

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

13
13

Notes toto Consolidated
ConsolidatedFinancial
FinancialStatements
Statements

14
14

Report of Independent
IndependentAuditors
Auditors

24
26

Seino Group
Group

25
29

Board of Directors(As of June 25, 2020)
President

Yoshitaka Taguchi

Representative Director

Takao Taguchi

Directors

Yasuhisa Kotera
Hidemi Maruta
Harumi Furuhashi
Nobuyuki Nozu

Outside Directors

Kenjiro Ueno
Meyumi Yamada
Shintaro Takai

Standing Statutory Auditors

Shingo Terada
Nobuhiko Ito

Outside Statutory Auditors

Eiji Kasamatsu
Hiroyuki Masuda

Seino Holdings Co., Ltd.

Financial Highlights

Operating revenue(Billions of Yen)

For the Years Ended March 31, 2020, 2019 and 2018

Thousands of
U.S. Dollars (Note)

Millions of Yen
2020

CONSOLIDATED BASIS:
Operating revenue
Operating income
Profit before income taxes
Net income
Net income per share (yen)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
Net assets per share (yen)

2019

2018

2020

¥ 627,126 ¥ 618,436 ¥ 596,130
31,20927,87929,43933,46330,54539,637
21,216
20,04725,677104.85101.88127.56$ 5,753,450
270,083
363,642
235,568
1.17

Millions of Yen

Thousands of
U.S. Dollars (Note)

2020

2019

2018

¥110,054 ¥ 111,998 ¥ 104,197
310,633
295,321315,984
657,983
628,728
657,243
19,905
21,77617,999426,207405,739
429,915
1,998.90
2,160.50 2,057.98(Note) U.S. dollar amounts are translated at ¥109 = U.S. $1, only for the convenience of readers.

2020$ 1,009,670
2,898,936
6,029,752
165,128
3,944,174
19.82

700
600
500
400
300
0

2018

2019

2020

2019

2020

2019

2020

Net income(Billions of Yen)

30
25
20
15
10
5
0
2018

Net assets(Billions of Yen)

450

400

350

300

Corporate Data
(As of March 31, 2020)

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

250

200
0
Seino Holdings Co., Ltd.
1, Taguchi-cho, Ogaki, Gifu 503-8501, Japan
Tel: 81-584-82-3881 Fax: 81-584-82-5043
November 1, 1946
¥42,482 million
207,679,783
The First Section of Tokyo Stock Exchange (code 9076)
The First Section of Nagoya Stock Exchange (code 9076)
Mitsubishi UFJ Trust and Banking Corporation
KPMG AZSA LLC

2018

1

Annual Report 2020
Message from the Management

To Our Shareholders, Customers and Friends
We would like to take this opportunity to express our appreciation to our stakeholders, including shareholders
and other investors, for the consistent support you have shown us over the years. The results for the fiscal year
ending March, 2020 (April 1, 2019 to March 31, 2020) are presented herein.

Medium-term Management Plan
“Value-Up Challenge 2020”2017/4-2020-3
The following is a brief report on the performance of
Seino Holdings Co., Ltd. for the fiscal year ended March 31,
2020, our 99th term (from April 1, 2019 to March 31, 2020).
Although Japan’s economy in fiscal year under review has
been on a moderate recovery trend due to improvements seenin employment and income environments, there are concerns
about the effects of successive typhoons and other natural
disasters, the consumption tax hike, and the trade friction
between the U.S. and China. In addition, due to the spreadof the novel coronavirus disease (COVID-19), the economy
remained on a recession trend.
In the transportation industry, which is Seino Group’s
mainstay business, domestic freight volume is still on adeclining trend, although efforts to collect appropriate fares
continued. The business environment with management
issues continued, with increasing outsourcing costs due totight labor demand and difficulty in hiring.
Facing such circumstances, the Seino Group steadily
implemented the various measures of the final fiscal year of
the “Value-Up Challenge 2020: Take Off Toward Growth”
medium-term management plan and pushed forward as aunited group to improve our corporate value such as byexpanding the provision of time value to our customers.
As a result, operating revenue for the fiscal year ended
March 31, 2020 was ¥627,126 million (up 1.4% year onyear), and although the effects of proper fare collection
continued in our mainstay transportation business, due tothe impact of the decrease in handled cargo volume,
especially in the second half of the period, operating profit
was ¥29,439 million (down 5.7% year on year), ordinary
profit was ¥31,247 million (down 7.1% year on year), andpartly due to the recording of extraordinary gains on sales of
fixed assets associated with real estate transfers, profit
attributable to owners of parent was ¥25,677 million (up21.0% year on year).

2

Future Outlook
In our outlook for the Japanese economy, we expect thatthe moderate tone of recovery will continue amid theongoing improvement in the employment and income
environments with positive effects also expected fromvarious policy measures. Nevertheless, there are lingering
uncertainties reflecting concerns such as the impact on the
global economy from trade frictions due to the increase inprotectionism and fluctuations in the financial and capital
markets.
Facing such circumstances, the Seino Group will steadily
implement the various measures of the three-year mediumterm management plan “Value-Up Challenge 2020: Take
Off Toward Growth,” which currently in the final fiscal year.
While pursing the maximization of our corporate value, wewill also strive to solve social issues through our business.
In our mainstay Transportation Services Business, wehave started to see the results of our initiatives aimed atreceiving reasonable transport fees and charges, but we also
expect a reduction in the volume of freight handled after the
consumption tax increase and an increase in personnel
expenses and outsourcing costs due to the labor shortage.
Therefore, we will provide web services and shipping
support systems designed to solve customer issues andpropose overall logistics optimizations to further improvetransportation quality and efficiency to link these efforts to
productivity improvements. In addition, we will implementtransportation reform including introduction of heavy
vehicles such as articulated trucks, expansion of modal shifts
and promotion of freight handling separation.
Moreover, we will proactively enhance the facilities andinitiatives which contribute to the recruitment and improved
retention rate of employees as well as maintain sites byrebuilding deteriorating and cramped facilities.
In addition, bearing in mind that the volume of freighttransportation in Japan will shrink as the population declines
and the conditions of low birthrate and aging population
advance, we will also work on international transportation
business including overseas expansion centering on the
Asian region.

In passenger vehicle sales in the Vehicle Sales Business,
we expect that the growth in the number of new vehicles
sold will be eroded by the changes in the social structuresuch as low birthrate and aging population, and declining
car ownership among young adults. As a result, we plan on
keeping the business stable through expanding our portfolioof businesses relating to used car sales, car part sales, vehicle
inspections and automotive repairs while focusing on new
vehicle sales of mini-sized vehicles with small engine
displacement. In truck sales also, we will make efforts to
expand and enhance our portfolio of businesses relating tovehicle inspection and automotive repairs, and carry out
initiatives for used vehicle part sales. We will carry out sales
activities that are locally based while increasing employee
satisfaction in addition to customer satisfaction through store
renovations and introductions of the latest equipment.
In the Merchandise Sales Business and Other Business,
we will expand our sales by strengthening existing businesses
and develop new products designed from the viewpoint of
the customer.
In the Leasing for Real Estate Services Business, we will
work to develop our leasing and sales of idle real estate while
effectively utilizing underutilized real estate.
While making steady efforts to achieve these businesschallenges, the Seino Group will work to strengthen thebusiness foundation and contribute to our customers’
prosperity to achieve further growth.
To all shareholders, we sincerely ask for your ongoing
encouragement and support into the future.
June 2020

Taguchi Yoshitaka,
President and Chief Executive Officer3

Annual Report 2020
Special Feature

Expanding Scope of Operations and Creating New Value
2020 marked the final year of the three-year medium-term
management plan "Value-Up Challenge 2020: Takeoff Toward
Growth." As we pursue the maximization of our value, using thestrength we have cultivated until now, we will swiftly set forth
reform and the spirit of challenge to create new values.

Main Topics for 2020
Opening of Narita Branch

Seino Transportation’s Narita Branch (21-2 Minamisanrizuka, Narita
City, Chiba Prefecture), which had been under construction since lastyear, has been completed, and it opened for business on June 10.
The branch is in a favorable location about a 15-minute drive from
Narita Airport, so, in addition to conventional pick-up and delivery
operations, Seino Transportation is now able to carry out“international intermodal logistics” in which customs clearance,
distribution processing, and storage can all be implemented together.
Thus, the opening of the Narita Branch has made it possible for Seino
Transportation to provide satisfactory services to customers involved
in international cargo transport at an even higher level.

Receipt of Comprehensive Efficiency
Plan certification

Seino Transportation has received Comprehensive Efficiency Plan
certification from the Ministry of Land, Infrastructure, Transport
and Tourism in relation to its initiative in which it performed a modal
shift to RoRo vessels of MOL Ferry Co., Ltd. with regard to truck
transport between its Adachi Branch (Tokyo) and Tosu Branch (Saga
Prefecture). The new transportation course achieves an approximately
39% reduction regarding volume of CO2 emissions and an
approximately 88% reduction regarding on-duty hours of drivers.
In the modal shift on this occasion, transport is by truck between
the Adachi Branch and Port of Tokyo and between the Port of Kanda(Kitakyushu) and Tosu Branch, and there is a switch to marinetransport between the Port of Tokyo and Port of Kanda.

Agreeing to Consider Business
Partnership

Enabling Deliveries Even When
Customers Are Not Home

Coconet Inc. has formed a business partnership with Bitkey Inc.,
which develops and offers smart locks (devices that enable locks to beopened, closed, and managed using smartphones).
Coconet had been facing issues related to making redeliveries after
customers were not at home, and the need for customers to request
such redeliveries was placing a burden on the customers. The business
partnership on this occasion has made it
possible for Coconet delivery personnel
to open automatic-door locks for thedelivery of items to locations designatedby customers inside their building if theproperty has a smart-lock installed, andthis is helping to solve both of theabovementioned challenges.

4

Seino Holdings has agreed to hold discussions with SG Holdings
regarding a tie-up involving joint operation, joint delivery, and so on
across company frameworks. This is aimed at the provision ofsustainable and highly convenient logistics services even amid theongoing harsh business environment, which is caused by driver
shortages, soaring labor costs, and other issues arising from population
decline and the declining birthrate and aging population.
Currently, subcommittees are checking trial operations andverifying effectiveness, and next, courses and areas where deployment
is possible will be selected going forward.

Introducing Vehicle No. 1 Ahead of
Other Companies

In advance of other companies, Seino Transportation has
introduced the “Hino Profia Hybrid,” which was developed by Hino
Motors, Ltd. and is the world’s first heavy-duty truck equipped with ahybrid system, and it held a vehicle-delivery ceremony for “Vehicle
No. 1” of this model.
The Profia Hybrid achieves high-level environmental performanceand leading fuel efficiency for a heavy-duty truck by having AI forecast
the travel load and then implement optimal hybrid control, and Seino
Transportation’s most recent result for this model is 5.3 km/L.
Vehicle No. 1 is being used for operation on the route between the
Ogaki Branch and Yamaguchi Branch, and Seino Transportation willconsider further introducing this model after verifying the operating
results of Vehicle No. 1.

Transporting Relief Supplies toDisaster-Stricken Areas

In response to a request from the government related to Typhoon
Hagibis, which directly hit the Kanto area in October, Seino
Transportation carried out the transport of relief supplies to disasterstricken areas as a “designated public institution” in accordance with
the Basic Act on Disaster Management.
Seino Transportation arranged for the provision of chartered vehicles
to Seino Express, and then transported 6,000 pieces of long-lasting breadfrom a factory in Kagoshima to the Prefectural Central Comprehensive
Disaster Risk Reduction Center in Mito City, which serves as a wide-areacargo transport base for Ibaraki Prefecture. In addition, Seino
Transportation transported pre-packaged curry and processed quickcooking rice to locations such as Nagano City and Koriyama City.

Transport of Taiko Drum to National Festival

Seino Super Express handled the transporting of a large taiko drumfrom Okunitama Shrine (Fuchu City, Tokyo) that was to be used at the“National Celebration for His Majesty the Emperor’s Accession to theThrone,” which took place at the Imperial Palace Outer Garden.
In order to smoothly transport this traditional, valuable large taiko drum,
which is usually never transported outside of the shrine, Director Shimazaki
and other staff created a trolly matching the shape of the taiko drum
independently by hand, and thetransport to the Imperial Palace
Outer Garden was completed
without any problems. Thus, Seino
Super Express aims to solve theproblems of customers by offering
the transport of special products.

Implementing Verification of Drone
Logistics in Shimonoseki City

Seino Holdings carried out Japan’s first “social-implementation
experiment on drone logistics in skies over private land” in Shimonoseki
City, Yamaguchi Prefecture in collaboration with TrueBizon, Ltd.
(headquartered in Chuo-ku, Fukuoka City; President Mamoru Masumoto),
Shimonoseki City, and other entities.
During the experiment on this occasion,
products with a weight of 1 kg were airtransported by drone to destinations 2.5 km away
for customers living in mountainous areas. It is
hoped that drone logistics combined with existingland transport can become a new means oflogistics for “shopping refugees” (persons who
have difficulty shopping for daily necessities) and
residents of sparsely-populated areas.

Establishing Japan’s First Fund
Specializing in Logistics

Together with Spiral Innovation Partners LLP (headquartered in Minatoku, Tokyo; Representative Partner Hiroshi Oka), Seino Holdings has jointly
established the “Logistics Innovation Fund,” Japan’s first “fund specializing in
logistics-business areas” in which investments are made in start-up companies
in peripheral areas of logistics, and has invested in the fund. The main
objectives of establishing the fund were utilizing Seino’s own assets to support
the businesses of start-up companies, and increasing the efficiency ofoperations by introducing cutting-edge technologies at logistics worksites.
Going forward, Seino Holdings
will make an effort to engage inco-creation with the start-up
companies that are investment
destinations with a view toachieving mutual businessexpansion.

5

Annual Report 2020

Expanding Our Operations Scope and Creating New Value
Transportation Services BusinessIn the Transportation Services Business, based on our
medium‒term management plan, we set “providing value tocustomers” as our strategic vision, and in order to solve
customers’ problems, we provided time value and shipping
work support using web services, and made proposals for theoverall optimization utilizing logistics functions.
At Seino Transportation Co., Ltd., the core company of
the Transportation Services Business group, we collected
appropriate fares for “continuous” “value provision”, and also
focused on securing the volume of freight handled throughcapturing and keeping new freight consignors by providing astable transportation network by diagramming route flights,
and by leading to improvement of business efficiency andincreased customer convenience by proposing electronic dataexchange that digitizes transaction business from orders to
payments.
On the other hand, we worked to increase the size and savelabor of vehicles by expanding modal shifts to switch part oflong-distance routes to transportation by railways and ferries
and by starting operation of articulated trucks, and large
hybrid trucks equipped with AI. By promoting transportation
reform as measures for labor shortages, we also worked on
ESG, which leads to a reduced environmental burden.

Furthermore, in order to secure personnel in the declining
working population, we are working to enhance the benefits
package such as by the introduction of a license acquisition
subsidy system and a stock benefit trust (J-ESOP) for
employees, while also shortening working hours through labor
reform and reducing the operational burden, such as by the
introduction of a long-term vacation system that includes
annual paid vacation in Golden Week holidays, Bon vacationand the year-end and New Year holidays.
In terms of business expansion, Seino Transportation Co.,
Ltd. newly established the Narita branch (Narita city, Chiba
prefecture), expanded the Osaka Nishi branch (Minato ward,
Osaka city), newly established the STC Gyotoku (61 employee
dormitories: Ichikawa city, Chiba prefecture), and Seino Super
Express Co., Ltd. is expanding and relocating the Yashiro
freight center (Kato City, Hyogo Prefecture). As a result of theabove, operating revenue for this segment was ¥466,473
million, up 0.9% year on year, and operating profit was¥23,339 million, down 4.6% year on year.

Vehicle Sales BusinessIn the business of passenger car sales during the fiscal year
under review, we aimed to further improve customer
satisfaction by renewing stores and improving the service
system to become number “one” in the region. In addition, thenumber of new car sales increased year on year throughvarious efforts including campaigns centered on support cars,
early replacement proposals by utilizing residual value
installment sales, and sales efforts taking advantage of theeffects of new vehicle model launches. However, in used
vehicle sales, due in part to the impact of the reduction intrade-in vehicles, the number of vehicles sold were lower thanthat of the previous fiscal year. In the service division, we
strove to secure revenues by promoting vehicle inspections andvehicle maintenance and garage services, as well as the sales of
products that lead to repeat visits such as maintenancepackages and automotive coatings.
In truck sales, we worked to expand sales in order toincrease the number of customers and the number of owned
vehicles, but as demand for light trucks ran out, the number of
new vehicles sold in Japan in the current fiscal year was
6slightly lower than that of the previous fiscal year.
In office expansion efforts, Netz Toyota Gifu Co., Ltd.
carried out a full renovation of the Shinsei branch (Motosu
City, Gifu Prefecture), and Gifu Hino Motors Co., Ltd.
carried out a full renovation of the Anpachi Officemaintenance factory (Anpachi Town, Gifu Prefecture) andthe Ogaki Branch (Ogaki City, Gifu Prefecture).
As a result of the above, operating revenue for this segment
was ¥104,664 million, up 2.4% year on year, and operating
profit was ¥4,353 million, down 10.3% year on year.

Merchandise Sales Business
The Merchandise Sales Business engages in the sale of fuel,paper and paper products, and other products. Operating
revenue for this segment was ¥32,868 million, down 1.9% year

on year, partly due to the impact of a fall in sales unit prices
for fuel sales. Operating profit was ¥871 million, up 5.0% year
on year.

Leasing for Real Estate Services BusinessIn the Leasing for Real Estate Services Business, we areoperating the former truck terminal and store sites, which had
been replaced mainly due to the impact of urban development
and increasingly cramped conditions, as rental apartments.

As a result of the above, operating revenue for this segment
was ¥1,732 million (up 4.9% year on year), and operating
profit was ¥1,383 million (up 3.6% year on year).

Other Business
Our Other Business segment includes the information
services business, the housing sales business, the construction
contract business, the passenger transportation business, andthe personnel services business. Operating revenue for thissegment was ¥21,389 million (up 15.2% year on year), andoperating profit was ¥688 million (down 23.7 % year on year).

Operating Revenue by Business Segment(Millions of yen)
FY Ended March 31, 2020

FY Ended March 31, 2019

Results

Results

Composition

Composition

Year-on-YearTransportation Services

466,47374.4%

462,459

74.8%

0.9%

Vehicle sales

104,66416.7%

102,234

16.5%

2.4%

Merchandise sales

32,868

5.2%

33,5185.4%(1.9%)

Leasing for Real-estate Services

1,732

0.3%

1,651

0.3%

4.9%

Others21,389

3.4%

18,574

3.0%

15.2%

Total

627,126

100.0%

618,436

100.0%

1.4%

Operating Income by Business Segment(Millions of yen)
FY Ended March 31, 2020

FY Ended March 31, 2019

Results

Results

Composition

Composition

Year-on-YearTransportation Services

23,33979.3%

24,47578.4%(4.6%)

Vehicle sales

4,353

14.8%

4,851

15.5%

(10.3%)

871

3.0%

829

2.7%

5.0%

1,383

4.7%

1,334

4.3%

3.6%

Others

688

2.3%

902

2.9%

(23.7%)

Total

30,634104.1%

32,391103.8%(5.4%)

Elimination(1,195)(4.1)(1,182)(3.8%)—

Consolidated

29,439100.0%

31,209100.0%(5.7%)

Merchandise sales
Leasing for Real-estate Services

7

Annual Report 2020

Financial Review
Operating Results

totaled ¥227,328 million, which marked a ¥4,447 million
increase from the end of the previous consolidated fiscal year.
Furthermore, net assets grew by ¥3,708 million from the endof the previous consolidated fiscal year to reach ¥429,915
million. The main factors behind this included a rise inretained earnings.

The consolidated sales of Seino Holdings for the fiscal
year ended March 2020 amounted to ¥627,126 million (a1.4% increase from the previous fiscal year). This was due tofactors such as a rise in shipping-fare per unit resulting fromthe effects of initiatives aimed at the receipt of appropriate
shipping fares.
Operating costs amounted to ¥555,298 million, which
was a 1.6% increase from the previous fiscal year, due tofactors such as a rise in outsourcing costs regarding vehicles
used. Meanwhile, the ratio of operating costs rate to sales
stood at 88.5%, a 0.2% increase from the previous fiscal year.
Selling, general, and administrative expenses came to¥42,389 million (a 4.1% increase from the previous fiscal
year) due to a rise in labor costs. In spite of this, operating
profit came to ¥29,439 million.
Also, partly due to extraordinary gains related to the saleof land, current net income before taxes and otheradjustments increased by 18.5% from the previous fiscal yearto ¥39,637 million, and current net income rose by 21.0%
from the previous fiscal year to ¥25,677 million.
Current net income per share stood at ¥127.56, and returnon equity was 6.1%. Annual cash dividend per share rose to¥39.00, which marked a 21.9% increase from the previous
fiscal year.

Cash Flows

Cash flow from operating activities amounted to ¥34,964
million, marking a decline of ¥13,045 million from theprevious consolidated fiscal year, due to an increase incorporate income taxes paid, decrease in trade notes andaccounts receivable, and other factors.
Cash flow from investment activities came to -¥18,053
million, which was a ¥4,477 million decrease from theprevious consolidated fiscal year. This was because eventhough proceeds from the repayment of negotiablecertificates of deposit decreased, proceeds from the sales ofintangible assets increased accompanying the sale of the landof the former Tokyo Branch.
Cash flow from financial activities rose by ¥14,728 million
from the previous consolidated fiscal year to -¥21,922 million
resulting from an increase in expenditures due to theacquisition of treasury stock.
As a result, cash and cash equivalents in the current
consolidated fiscal year fell by ¥4,980 million from theprevious consolidated fiscal year to ¥93,482 million.

Financial Position

Total assets at the end of the current consolidated fiscal
year amounted to ¥657,243 million, which marked a decreaseof ¥740 million from the end of the previous consolidated
fiscal year. The main factors behind this included the factthat even though cash and deposits increased due to a rise ingains from sale of fixed assets, securities decreased due to therepayment of negotiable certificates of deposit. Liabilities

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

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

Shareholders’ equity ratio

(%)

(%)

(%)

8

8

80

7

7

6

6

5

5

4

4

3

3

2

2

1

1

0

0

60

40

-1

8

2015

2016

2017

2018

2019

2020

-1

20

2015

2016

2017

2018

Operating income to operating revenue

Net income (loss) to total assets

Net income (loss) to operating revenue

Return on equity ratio

2019

2020

0

2015

2016

2017

2018

2019

2020

SEINO HOLDINGS CO., LTD. and Consolidated Subsidiaries

Six-year Summary

For the Years Ended March 31, 2020, 2019, 2018, 2017, 2016 and 2015
Millions of Yen
2020
For the year:
Operating revenue:
Transportation services
Vehicle sales
Merchandise 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

¥

2019

627,126
466,473
104,664
32,868
1,732
21,389555,298¥2018

618,436
462,459
102,234
33,518
1,651
18,574
546,514¥2017

596,130
443,168
103,342
31,575
1,599
16,446529,196¥2016

567,539422,870
100,237
27,7491,543
15,140502,639¥2015

555,457
416,113
94,441
28,0291,472
15,402492,802¥542,452
398,972
95,351
32,6991,401
14,029487,664

42,38929,43925,67740,71331,20921,21639,05527,87920,04737,783
27,117
18,206

36,46926,186
18,86433,402
21,386
14,456249,831657,243
117,457
4,130
17,999429,915

251,683
657,983
130,357
5,470
19,905426,207

243,883
628,728
125,871
3,610
21,776
405,739

232,792594,264
106,479
2,704
26,468381,299

221,278
579,565
104,207
2,768
25,293371,007

221,338
548,525
101,829
2,519
10,125363,314Yen
Per share data:
Net (loss) income:-BasicCash dividends¥

Number of shares issued

127.5639.00¥

207,679

104.8532.00¥

101.88
30.00

¥

92.09
27.00

¥

Thousands
207,679
207,679

207,679

94.87
28.00

¥

72.67
21.00

207,679

207,679

4.7
3.3
3.3
5.3
63.0
212.3
57.2
29.5

3.9
2.7
2.6
4.2
64.5
217.4
52.4
28.9

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

4.7
4.1
3.9
6.1
64.4
212.7
53.7
30.6

5.0
3.4
3.2
5.2
63.8
193.1
55.2
30.5

4.7
3.3
3.2
5.2
63.4
193.8
55.9
29.4

4.8
3.2
3.1
4.9
63.1
218.6
56.8
29.3

Debt equity ratio

Payout ratio

(%)

(%)

(%)

240

120

50

Current ratio

200

40

90

160
30
120

60

20
80
30

10

40

0

2015

2016

2017

2018

2019

2020

0

2015

2016

2017

2018

2019

2020

0

2015

2016

2017

2018

2019

2020

9

Annual Report 2020
SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Balance Sheets
March 31, 2020 and 2019

Millions of yen
2020
Assets:Current assets:
Cash and cash equivalents (Note 3)
Short-term investments (Notes 3 and 5)
Trade receivables (Note 3)Inventories (Note 4)
Other current assets
Allowance for doubtful accounts
		
Total current assets¥

Property and equipment (Notes 6, 7 and 9):
At costAccumulated depreciation		Net property and equipment
Investments and other assets:
Investment securities (Notes 3 and 5)
Investments in and long-term loans to affiliates and nonconsolidated subsidiaries (Note 5)
Goodwill
Deferred tax assets (Note 17)
Employee retirement benefit asset (Note 12)
Other assets
		
Total investments and other assets
		
Total assets
Current liabilities:
Short-term borrowings (Notes 3, 9, 10 and 11)
Current portion of long-term debt (Notes 3, 9 and 11)
Trade payables (Note 3)
Accrued expenses
Income taxes payable
Other current liabilities
		
Total current liabilities

93,482
16,572
120,546
13,7785,715(262)
249,8312019
98,462
13,536
120,895
13,168
5,819(197)
251,683$

638,007(322,023)
315,984

631,291(320,658)
310,633

5,853,275(2,954,339)
2,898,936

34,563
16,876
13,094
16,727—38,725
15,736
14,63016,47514

317,092
154,826
120,128
153,459—

95,667
657,983

838,789$ 6,029,752

5,470
2,609
54,414
16,772
7,376
43,716130,357$¥

10,168¥¥Long-term debt (Notes 3, 9 and 11)
Employee retirement benefit liability (Note 12)
Asset retirement obligations (Note 8)
Accrued severance indemnities for directors and corporate auditors
Provision for share-based remuneration
Provision for directors’ stock payments
Deferred tax liabilities (Note 17)
Other long-term liabilities
		
Total liabilities

Thousands of
U.S. dollars
2020

91,428657,243

4,130
2,342
48,711
16,352
4,822
41,100117,457

10,087¥¥

857,633
152,037
1,105,926
126,404
52,431(2,404)2,292,027

93,28437,89021,486446,890150,018
44,239377,064
1,077,587

15,657
79,784
3,568
1,508
5,634
97

17,29675,486
3,053
1,457
—
42

143,642
731,963
32,734
13,83551,688890

1,183
227,328

1,151
231,776

10,8532,085,578

42,482
83,744309,304(15,837)
419,693

42,482
83,748290,156(4,452)411,934

389,743768,294
2,837,651(145,294)
3,850,394

9,898
(109)
(5,613)
(603)
3,573
6,649
429,915
657,243

12,708(114)(4,397)
(579)
7,618
6,655
426,207657,983

90,807(1,000)

2,440

2,934

22,386

Commitments and contingent liabilities (Notes 13 and 14)
Net assets:
Shareholders’ equity (Note 15):
		 Common stock: 794,524,668 shares authorized and 207,679,783 shares issued
		 Capital surplus
		 Retained earnings
		 Less treasury stock at cost: 11,762,469 shares in 2020 and 3,814,170 shares in 2019			Total shareholders’ equity
Accumulated other comprehensive income
		 Net unrealized gains on available-for-sale securities
		 Land revaluation decrement
		 Retirement benefit adjustment
		 Foreign currency translation adjustments
			
Total accumulated other comprehensive income
Noncontrolling interests			
Total net assets
			
Total liabilities and net assets
See accompanying Notes to Consolidated Financial Statements.
10

¥

¥

(51,495)(5,532)32,78061,0003,944,174$ 6,029,752

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Income
For the Years Ended March 31, 2020, 2019 and 20182018

Thousands of
U.S. dollars
2020

596,130$ 5,753,450

Millions of yen
2020
Operating revenue (Note 21)¥

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

627,126

2019¥

618,436¥555,298
42,389597,687
29,439546,51440,713587,227
31,209529,196
39,055568,251
27,8795,094,477
388,890
5,483,367
270,083

788
(458)
(40)
516
15,457
26
(26)
(542)
96
—
(5,634)15
10,19839,637

716
(334)
(69)
91
436
478
874
(1,236)
51
88
—
1,159
2,254
33,463

709
(231)
(33)
157
596
292
(472)
(191)
509
63
—
1,267
2,666
30,545

7,229(4,202)(367)
4,734
141,807
239(239)(4,973)881—(51,688)138
93,559363,642

Income taxes (Note 17):
Current
Deferred		Total income taxes

13,222878
14,10014,582(2,215)
12,367

11,984(1,443)
10,541

121,303
8,055
129,358

		

25,53721,09620,004

234,284

		

Operating income

Other income (expenses):
Interest and dividend income
Interest expense
Loss on investments in partnerships
Subsidy income
Gain on sale or disposal of property and equipment
Gain on sale of investment securities
Share of (loss) profit of entities accounted for using equity method
Impairment loss on fixed assets (Notes 2(i) and 21)
Compensation received for the exercise of eminent domain
Gain on negative goodwill (Note 21)
Provision for share-based remuneration
Miscellaneous, net
		Profit before income taxes

Profit(Loss) profit attributable to noncontrolling interests
		Profit attributable to owners of parent

¥

(140)
25,677¥(120)
21,216¥(43)
20,047¥127.56—39.00¥

104.85—32.00(1,284)
235,568
U.S. dollars

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

101.88
98.48
30.00

1.17
—
0.35

See accompanying Notes to Consolidated Financial Statements.
11

Annual Report 2020
SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Comprehensive Income
For the Years Ended March 31, 2020, 2019 and 20182018

Thousands of
U.S. dollars
2020¥

20,004$

234,284

¥

3,144
888
24
(35)
4,021
24,025$(25,633)(10,807)413(844)(36,871)
197,413Millions of yen
2020
ProfitOther comprehensive income (Note 18):
Net unrealized gains on available-for-sale securities
Remeasurements of defined benefit plans, net of tax
Foreign currency translation adjustments
Share of other comprehensive income of affiliates accounted for using equity method		
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Noncontrolling interests¥

25,537¥(2,794)(1,178)45(92)(4,019)21,518¥21,626
(108)

2019
¥

21,096¥(1,965)
1,513
(53)
(256)
(761)
20,335¥20,471(136)¥

24,046(21)$

198,404(991)

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2020, 2019 and 2018

Shareholders’ equity
Accumulated other comprehensive income
Total
Number of
Net unrealized
Foreignshares of
Total
gains onLand
Retirement currency accumulated
Non
other
common Common Capital Retained Treasury shareholders’ available-for- revaluation benefit translation comprehensive controlling Total net
stock issued stock
surplus earnings
stock
equity sale securities decrement adjustment adjustments income
interests
assetsMillions of yen
Balance at March 31, 2017 207,679,783 ¥ 42,482 ¥ 80,631 ¥ 260,275 ¥ (12,554) ¥ 370,834 ¥ 11,574 ¥ (114) ¥ (6,785) ¥(311) ¥ 4,364 ¥ 6,101 ¥ 381,299
Profit attributable to owners of parent———
20,047—20,047——————20,047
Cash dividends———(5,328)—(5,328)——————(5,328)
Reversal of land revaluation decrement
—
—
—
—
—
—
—
—
—
—
—
—
—
Purchases of treasury stock and
—
—
1,275
—
3,598
4,873
—
—
—
—
—
—
4,873
fractional shares, net
Change in treasury shares of parent arising from
—
—
134
—
—
134
—
—
—
—
—
—
134
transactions with noncontrolling shareholders
Net changes in items other than
—
—
—
—
—
—
3,142
—
851
7
4,000
714
4,714
shareholders’ equity
Balance at March 31, 2018 207,679,783
42,482
82,040274,994(8,956) 390,560
14,716(114)(5,934)
(304)
8,364
6,815
405,739
Profit attributable to owners of parent———
21,216—
21,216——————
21,216
Cash dividends———(6,054)—(6,054)——————(6,054)
Reversal of land revaluation decrement
—
—
—
—
—
—
—
—
—
—
—
—
—
Purchases of treasury stock andfractional shares, net
—
—
1,704
—
4,504
6,208
—
—
—
—
—
—
6,208
Change in treasury shares of parent arising fromtransactions with noncontrolling shareholders
—
—
4
—
—
4
—
—
—
—
—
—
4
Net changes in items other thanshareholders’ equity
—
—
—
—
—
—
(2,008)
—
1,537
(275)
(746)
(160)
(906)
Balance at March 31, 2019 207,679,783
42,482
83,748290,156(4,452) 411,934
12,708(114)(4,397)
(579)
7,618
6,655
426,207
Profit attributable to owners of parent———
25,677—25,677——————25,677
Cash dividends———(6,524)—(6,524)——————(6,524)
Reversal of land revaluation decrement
—
—
—
(5)
—
(5)
—
—
—
—
—
—
(5)
Purchases of treasury stock andfractional shares, net———— (11,385)(11,385)
—
—
—
—
—
—
(11,385)
Change in treasury shares of parent arising fromtransactions with noncontrolling shareholders
—
—
(4)
—
—
(4)
—
—
—
—
—
—
(4)
Net changes in items other thanshareholders’ equity
—
—
—
—
—
—
(2,810)5(1,216)(24)(4,045)(6)(4,051)
Balance at March 31, 2020 207,679,783 ¥ 42,482 ¥ 83,744 ¥ 309,304 ¥ (15,837) ¥ 419,693 ¥ 9,898 ¥ (109) ¥ (5,613) ¥(603) ¥ 3,573 ¥ 6,649 ¥ 429,915

12

Balance at March 31, 2019
Profit attributable to owners of parent
Cash dividends
Reversal of land revaluation decrement
Purchases of treasury stock andfractional shares, net
Change in treasury shares of parent arising fromtransactions with noncontrolling shareholders
Net changes in items other thanshareholders’ equity
Balance at March 31, 2020

Thousands of U.S. dollars$ 389,743 $ 768,330 $2,661,982 $ (40,844) $3,779,211 $ 116,587 $ (1,046) $ (40,339) $ (5,312) $ 69,890 $ 61,055 $ 3,910,156——
235,568—
235,568——————
235,568——(59,853)—(59,853)
—
—
—
—
—
—
(59,853)
—
—
(46)
—
(46)
—
—
—
—
—
—
(46)
—

—

— (104,450)(104,450)

—

—

—

—

—

—

(104,450)

—

(36)

—

—

(36)

—

—

—

—

—

—

(36)

—

—

—

—

—

(25,780)

46(11,156)(220)(37,110)(55)(37,165)$ 389,743 $ 768,294 $2,837,651 $(145,294) $3,850,394 $ 90,807 $ (1,000) $ (51,495) $ (5,532) $ 32,780 $ 61,000 $ 3,944,174

See accompanying Notes to Consolidated Financial Statements.

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Cash Flows
For the Years Ended March 31, 2020, 2019 and 20182018

Thousands of
U.S. dollars
2020

30,545$

Millions of yen
2020
Cash flows from operating activities:
Profit before income taxes¥
Adjustments for:		Depreciation
		 Impairment loss on fixed assets
		 Amortization of goodwill
		 Gain on negative goodwill
		 Net increase in employee retirement benefit liability
		 Gain on sale or disposal of property and equipment
		 Share of loss (profit) of entities accounted for using equity method
		 Loss on investments in partnerships
		 Gain on sale of investment securities
		 Net provision (reversal) for accrued severance indemnities for directors andcorporate auditors
		 Increase in provision for share-based remuneration
		 Net provision for directors’ stock payments
Decrease (increase) in trade receivables(Increase) decrease in inventories(Decrease) increase in trade payables
Other, net				 Subtotal
Interest and dividends received
Interest paid
Income taxes paid				 Net cash provided by operating activities
Cash flows from investing activities:
Increase in property and equipment
Increase in long-term investments and loans
Decrease in property and long-term investments(Increase) decrease in short-term investments
Purchase of shares of subsidiaries resulting in change in scope of
consolidation (Note 16)				 Net cash used in investing activities
Cash flows from financing activities:
Increase in long-term debt
Repayment of long-term debt
Net (decrease) increase in short-term borrowings
Proceeds from share issuance to noncontrolling shareholders
Dividends paid to shareholders
Dividends paid to noncontrolling interests
Purchases of treasury stock, net of disposals
Other, net				 Net cash used in financing activities				 Effect of exchange rate changes on cash and cash equivalents				 Net (decrease) increase in cash and cash equivalents				 Cash and cash equivalents at beginning of year				 Cash and cash equivalents at end of year

¥

2019

39,637¥33,463¥363,642

20,198
542
1,636
—
2,501
(15,457)
26
40
(26)

19,001
1,236
1,437
(88)
2,929
(436)
(874)
69
(478)

17,775
191
1,165
(63)
2,518
(596)
472

52

(174)

(203)

477

5,634
56

—
—
(6,914)(2,270)6,489
2,000
50,8501,109(232)(10,440)
41,287

51,688
513

914
(691)
(6,185)
1,092
49,9691,204(445)(15,764)
34,964

—
42
(845)
1,491
2,585
865
60,223974(264)(12,924)
48,0098,385(6,339)(56,743)
10,018458,431
11,046(4,082)(144,624)
320,771(34,693)(3,937)
23,641(2,916)(30,620)(3,956)
2,686
10,474(18,556)(11,748)
3,540
1,687

(318,285)(36,119)
216,890(26,752)(148)(1,114)(1,195)(1,358)(18,053)(22,530)(26,272)(165,624)

200(1,815)(1,138)21(6,524)(52)(11,385)(1,229)(21,922)31(4,980)98,462
93,482790(1,731)595
48(6,054)(38)
357(1,161)(7,194)(37)
18,24880,214
98,462—(3,191)903
936(5,328)
(38)
393
(855)
(7,180)13
7,848
72,36680,214

1,835(16,652)(10,440)
193(59,853)(477)(104,450)(11,275)(201,119)284(45,688)903,321$ 857,633

¥

33
(292)

¥

185,303
4,973
15,009—22,945(141,807)
239
367
(239)

See accompanying Notes to Consolidated Financial Statements.
13

Annual Report 2020
SEINO HOLDINGS CO., LTD. and Subsidiaries

Notes to Consolidated Financial Statements
1. Basis of Consolidated Financial
Statements
The accompanying consolidated financial statements of SEINO HOLDINGS
CO., LTD. (the “Company”) and its subsidiaries (together with the Company, the“Seino Group”) have been prepared in accordance with the provisions set forth in
the Financial Instrument 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 to applicationand disclosure requirements from International Financial Reporting Standards(“IFRS”).
The accompanying consolidated financial statements have been restructured
and translated into English from the consolidated financial statements of theCompany prepared in accordance with Japanese GAAP and filed with theappropriate Local Finance Bureau of the Ministry of Finance as required by
the Financial Instrument and Exchange Law of Japan. Certain supplementary
information included in the statutory Japanese language consolidated financial
statements, but not required for fair presentation, is not presented in theaccompanying consolidated financial statements.
The translation of the Japanese yen amounts into U.S. dollar amounts
is included solely for the convenience of readers outside Japan, using theapproximate exchange rate prevailing at March 31, 2020, which was ¥109 to
U.S. $1.00. The translation should not be construed as a representation that
the Japanese yen amounts have been, could have been or could in the future beconverted into U.S. dollars at this or any other rate of exchange.

2. Summary of Significant Accounting
Policies(a)

The accompanying consolidated financial statements include the accounts of
the Company and all of its subsidiaries. Investments in significant affiliates areaccounted for by the equity method. Investments in affiliates not accounted for by
the equity method are stated at cost. Differences between the acquisition cost ofinvestments in subsidiaries and the underlying equity in their net assets, adjusted
based on the fair value at the time of the acquisition, are deferred as goodwill andamortized over the estimated useful life, 5-15 years, on a straight-line basis. Allintercompany transactions and accounts have been eliminated on consolidation.
Under accounting standards for consolidation, a subsidiary is defined as anenterprise which is controlled by another enterprise and is a majority (more than50%) owned enterprise or a 40% to 50% owned enterprise that meets certain
criteria. An affiliated company is defined as an enterprise in which the investor
has significant influence and is an enterprise other than a subsidiary that is a 20%
or more owned enterprise or a 15% to less than 20% owned enterprise that meets
certain criteria. For each of the years ended March 31, 2020, 2019 and 2018, there
were six companies that were not a more than 50% owned enterprise but were
nevertheless classified as subsidiaries based on the judgment of the Company inaccordance with the applicable accounting standards.
The number of subsidiaries and affiliates for the years ended March 31, 2020,2019 and 2018 was as follows:
2020

2019

2018

76
5
6
2
15

75
6
7
15

70
6
7
14

The Company and most of its subsidiaries have a fiscal year that ends on
March 31. The overseas subsidiary closes its books on December 31. One
subsidiary has a fiscal year that ends on October 31 and provisionally prepares
financial statements as of January 31. In addition, one subsidiary has a fiscal yearthat ends on June 30 and provisionally prepares financial statements as of March
31. Significant transactions for the period between the subsidiary’s year-end andthe Company’s year-end are adjusted for on consolidation.
Nonconsolidated subsidiaries are excluded from the scope of consolidation
because they are all small in scale, and any total amount in terms of their
total assets, operating revenue and profit or loss (amount corresponding to
the Company’s ownership interest) as well as retained earnings (amountcorresponding to the Company’s ownership interest) and others does not
significantly affect the consolidated financial statements.
The consolidated financial statements include the accounts of the overseas

14

(b)

(c)

(d)

Principles of consolidation

Subsidiaries:
Domestic
Overseas
Affiliates accounted for by the equity method
Nonconsolidated subsidiaries
Affiliates stated at costsubsidiary prepared under IFRS in accordance with Practical Issues Task Force(“PITF”) No. 18, “Practical Solution on Unification of Accounting Policies
Applied to Foreign Subsidiaries for Consolidated Financial Statements,” issued
by the Accounting Standards Board of Japan (“ASBJ”).

(e)Cash and cash equivalents

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

Investments and marketable securities

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

Accounting for derivatives

Derivative transactions are omitted due to their insignificance to the operationof the Seino Group’s business.

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 of certain doubtfulor troubled receivables and a general reserve for other receivables based on thehistorical loss experience for a certain past period.

(f)Inventories(g)

Property and equipment and depreciation

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

Property and equipment, including significant renewals and additions, arestated at cost. Property and equipment of the Company and certain subsidiaries
are depreciated by the straight-line method for buildings and vehicles and by the
declining balance method for other property.
Property and equipment of other subsidiaries have been depreciatedprincipally by the declining balance method, except for buildings acquired on andafter April 1, 1998, property held for lease and facilities attached to buildings andstructures acquired on and after April 1, 2016. Buildings acquired on and after
April 1, 1998 and facilities attached to buildings and structures acquired on andafter April 1, 2016 by the domestic subsidiaries are depreciated by the straightline method. Some of the subsidiaries capitalize property for which the cost was
not less than ¥100,000 but below ¥200,000 and depreciate it over three years on astraight-line basis.
The Seino Group, as lessee, capitalizes assets used under finance leases, except
for certain immaterial or short-term finance leases accounted for as operatingleases. Depreciation of leased assets capitalized in finance lease transactions as
lessee is computed by the straight-line method over the lease term as the usefullife with the assumption of no residual value. The leased property of a certain
subsidiary engaged in leasing operations as lessor is recorded at cost in property
and equipment in the accompanying consolidated balance sheets under operatinglease accounting and is depreciated over the term of the lease contract by thestraight-line method to the amount equal to the estimated disposal value at thelease termination date.
Expenditures on maintenance and repairs are 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 expense.

(h)

(i)

Intangible assets

Intangible assets are amortized on a straight-line basis. Software, which isincluded in intangible assets, is amortized using the straight-line method over theestimated useful life of five years.

The Company and its domestic subsidiaries have adopted the "AccountingStandard for Impairment of Fixed Assets" issued by the Business Accounting
Council of Japan 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 an asset
may not be recoverable. An impairment loss is to be recognized in the income
statement by reducing the carrying amount of the impaired asset or group ofassets to the recoverable amount, to be measured as the higher of the asset’s net
selling price or value in use. Fixed assets include intangible assets as well as land,buildings and other forms of property and are to be grouped at the lowest level
for which there are identifiable cash flows distinguishable from other groupsof 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. The method used to group assets
to measure impairment of fixed assets in the transportation services segment,
excluding some consolidated subsidiaries, is a method that groups assets by theentire segment. At March 31, 2020, 2019 and 2018, recoverable amounts ofassets were measured based on value in use using discounted future cash flows at
interest rates principally of 8.7%, 8.2% and 7.5%, respectively, or net selling prices
using primarily appraisal valuations. As a result, the Seino Group recognizedimpairment loss as follows:

2020

Property subject toimpairment:

6 businessbranchesand 1 idle
property

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

2019

6 businessbranchesand 3 idle
properties

359 ¥
129
54
542 ¥

2018

8 businessbranchesand 2 idle
properties

676 ¥
543
17
1,236 ¥

Thousandsof U.S.
dollars
2020

181 $
10
—
191 $

3,294
1,184
495
4,973

Accumulated impairment loss has been directly deducted from the applicable
assets.

(k)(l)

Accounting standard for impairment of fixed assets

Millions of yen(j)Special Taxation Measures Law, Reserve Under Special Laws and Reserve for
Retirement Benefits to Directors and Corporate Auditors.”

(m)

(n)

(o)

(p)

(q)

(r)

Employee retirement benefits

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

(s)

Severance indemnities for directors and corporate auditors

The Seino Group pays severance indemnities to directors and corporate
auditors subject to the approval of the shareholders. Certain subsidiaries provide
for accrued severance indemnities for directors and corporate auditors at theamount that would have been payable if the directors and corporate auditors had
retired at the end of the fiscal year based on internal rules, in accordance with
the Japanese Institute of Certified Public Accountants (“JICPA”) Audit andAssurance Committee Report No. 42, “Treatment for Auditing of Reserve Under(t)

Provision for share-based remuneration

To provide for the delivery of the Company’s shares to employees inaccordance with the regulations on the delivery of shares, the estimated amountof share-based remuneration to be paid at the end of the current fiscal year isrecorded.

Provision for directors’ stock payments

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

Revenue recognition for freight charges

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

Income taxes

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

Enterprise taxes

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

Appropriation of retained earnings

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

Translation of foreign currency accounts

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

Per share data

Basic net income per share is computed by dividing income available tocommon shareholders by the weighted average number of shares of common
stock outstanding during the respective year, retroactively adjusted for stock splits.
Unless there is an anti-dilutive effect, diluted net income per share is calculated toreflect the potential dilution assuming that all convertible bonds are converted at
the time of issue. Diluted earnings per share for the fiscal years ended March 31,
2020 and 2019 are not shown because there were no potentially dilutive shares.
Cash dividends per share shown for each fiscal year in the accompanying
consolidated statements of income represent dividends declared as applicable to
the respective years.

Adoption of consolidated taxation system

The Company and some of its subsidiaries have adopted the consolidated
taxation system, with the Company as the taxable parent company.
(Additional information)
Application of tax effect accounting for the transition from the consolidated

15

Annual Report 2020

tax payment system to the group taxation system
With regard to Paragraph 3 of “Practical Solution on the Treatment of Tax
Effect Accounting for the Transition from the Consolidated Taxation System to
the Group Tax Sharing System” (PITF No. 39, March 31, 2020), the Company
and its domestic consolidated subsidiaries did not follow Paragraph 44 of the“Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No.
28, February 16, 2018) but applied provisions of pre-amended tax laws whencalculating the amounts of deferred tax assets and liabilities that related totransitioning to the group taxation system and related amendments of tax laws
for transitioning to the single tax payment system.

(u)accounting estimates of items that have the potential to materially affect thefinancial statements of the following fiscal year by the accounting estimates madein the financial statements of the current fiscal year.

Effective date

Effective from the end of the consolidated fiscal year ending March 31, 2021.
“Accounting Standard for Accounting Policy Disclosures, Accounting
Changes and Error Corrections” (ASBJ Statement No. 24, March 31, 2020)

Overview

The purpose of this accounting standard is to provide an outline of theaccounting principles and procedures adopted for cases in which the applicationof the relevant accounting standards is not clear.

Changes in presentation method(i)

Accounting policies issued but not yet adopted“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29,
March 31, 2020 (hereinafter, “Statement No. 29”)) and Implementation
Guidance on Accounting Standard for Revenue Recognition” (ASBJ
Guidance No. 30, March 31, 2020 (hereinafter, “Guidance No.30”))

Effective date

Effective from the end of the consolidated fiscal year ending March 31, 2021.

(ii) Change in presentation method(Consolidated Statements of Income)
Effective from the fiscal year under review, “Subsidy income,” which had
been included in “Miscellaneous, net” for the previous fiscal year, has beenpresented separately because of its increased importance. The Consolidated
Statements of Income for the fiscal years ended March 31, 2019 and 2018
were reclassified to conform to the change in presentation. As a result,¥1,250 million recorded in “Miscellaneous, net” for the fiscal year ended
March 31, 2019 was reclassified to “Subsidy income” of ¥91 million and“Miscellaneous, net” of ¥1,159 million. In addition, ¥1,424 million recorded
in “Miscellaneous, net” for the fiscal year ended March 31, 2018 wasreclassified to “Subsidy income” of ¥157 million and “Miscellaneous, net” of¥1,267 million.

Overview

The International Accounting Standards Board (IASB) and the U.S. Financial
Accounting Standards Board (FASB) collaborated on a project to develop asingle, comprehensive revenue recognition model and jointly issued new revenue
recognition standards “Revenue from Contracts with Customers” (IFRS 15
published by IASB and Topic 606 published by FASB) in May 2014. IFRS 15 iseffective for annual reporting periods beginning on and after 1 January 2018 andTopic 606 is effective for annual reporting periods beginning after December 15,
2017.
The Accounting Standard Board of Japan (ASBJ) also developed a newrevenue recognition standard and issued Statement No. 29 together with
Guidance No. 30. ASBJ’s basic policy in developing the new revenue recognition
standard was to first incorporate the core principle of IFRS 15 in the light ofimproving the international comparability of financial statements and then add
additional alternative treatments to the extent that international comparability
would not be significantly impaired in circumstances in which business practices
in Japan need to be considered.

Effective date

Effective from the beginning of the fiscal year ending March 31, 2022

Effects of application

The Company and its consolidated domestic subsidiaries are in the processof determining the effects of these new standards on the consolidated financial
statements.
“Accounting Standard for Fair Value Measurement” (ASBJ Statement No.
30, July 4, 2019)“Implementation Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Guidance No. 31, July 4, 2019)“Accounting Standard for Measurement of Inventories” (ASBJ Statement
No. 9, July 4, 2019)“Accounting Standard for Financial Instruments” (ASBJ Statement No. 10,
July 4, 2019)“Implementation Guidance on Disclosures about Faire Value of Financial
Instruments” (ASBJ Guidance No. 19, March 31, 2020)

Overview

In order to enhance comparability with internationally recognizedaccounting standards, “Accounting Standard for Fair Value Measurement”
and “Implementation Guidance on Accounting Standard for Fair Value
Measurement” (together, hereinafter referred to as the “Fair Value AccountingStandards”) were developed and guidance on the methods to use for measuring
fair value was issued. The Fair Value Accounting Standards are applicable to thefair value measurement of Financial instruments in the “Accounting Standard
for Financial Instruments” and inventories held for trading purposes in the“Accounting Standard for Measurement of Inventories.”

Effective date

The Fair Value Accounting Standards and the related guidance will beeffective from the beginning of the consolidated fiscal year ending March 31,2022.
“Accounting Standard for Disclosure of Accounting Estimates” (ASBJ
Statement No. 31, March 31, 2020)

Overview

The purpose of this accounting standard is to promote the disclosure of
information that contribute to financial statement users’ understanding of

16

(v)

Additional information(i)

Employee Shareholding Incentive Plan (E-Ship®)
The Company has introduced an Employee Shareholding Incentive Plan
(E-Ship®) for the welfare of its employees. The plan is an incentive planthat covers all employees participating in the Shareholding Association.
Under the plan, the Company, as the trustor, entered into a specified trust
cash funding agreement (the “E-Ship Agreement”) with a trust bank astrustee to set up the trust (the “E-Ship Trust”). The E-Ship Trust purchases
the number of shares of the Company that the Shareholding Association
expects to purchase over the next three years and subsequently sells them
periodically to the Shareholding Association in accordance with certain
conditions and methods stipulated in the E-Ship Agreement over the threeyear period. At the end of the trust period, the E-Ship Trust’s retained
earnings, the accumulation of net gain on sales of its shares, are distributed
to the eligible employees in accordance with the E-Ship Agreement. For its
part, the Company guarantees any retained loss, the accumulation of net loss
on sales of its shares, and will pay off the amount of outstanding debt at theend of the trust period as it guarantees the debt of E-Ship Trust.
The shares of the Company held by the E-Ship Trust are accounted foras treasury stock under net assets. The assets, liabilities, income and expensesof the E-Ship Trust were consolidated in the accompanying consolidated
financial statements. The book value and number of shares held by the
E-Ship Trust at March 31, 2019 were ¥607 million and 455 thousand
shares, respectively. The book value of bank loans of the E-Ship Trust
recorded in the consolidated balance sheet as of March 31, 2019 was ¥384
million, respectively.
The E-Ship Trust was terminated on March 26, 2020.

(ii) Stock Compensation for Directors
The Company has introduced a Board Benefit Trust (“BBT”) for theCompany’s directors, excluding outside directors, (the “Eligible Directors”).
The objective of the plan is to focus the Eligible Directors’ mindset
towards enhancing the medium- to long-term corporate value of theCompany by clarifying the link between the compensation of the Eligible
Directors and the Company’s share value so that Eligible Directors sharewith the shareholders not only the benefits of rising share prices, but also
the risks associated with falling shares. The Plan is a stock compensation
plan whereby the Company’s shares are acquired through a trust (the trust
set up based on the Plan is hereinafter referred to as the “Trust”) using funds
contributed by the Company as capital, and the acquired shares and moneyin the amount equivalent to the value of the Company’s shares converted
at market value (the “Company’s Shares, Etc.”) are granted to Eligible
Directors through the Trust according to their positions or the like, pursuant
to the predetermined Rules on Stock Benefits for Directors. In principle,
the Company’s Shares, etc. are provided to Eligible Directors at the time ofretirement from a position of Eligible Director of the Company.
The shares of the Company held by the Trust were accounted for astreasury stock under net assets. The assets, liabilities, income and expensesof the Trust were consolidated in the accompanying consolidated financial
statements. The book value and number of shares held by the Trust at
March 31, 2020 and 2019 were ¥181 million ($1,660 thousand) and 91
thousand shares and ¥181 million and 91 thousand shares, respectively.
(iii) The Stock Benefit Trust ( J-ESOP)In the Company and some of its subsidiaries, for the purpose ofenhancing the motivation for rising share prices, the Employee Stock
Ownership Plan ( J-ESOP) for employees who meet the prescribed
requirements has been introduced.
The Stock Benefit Trust ( J-ESOP) is an incentive plan that grants
the Company’s shares to employees of some companies in the group thatsatisfy the requirements of the Policy on Stock Compensation prescribedin advance by the Company. These companies will award points to Eligible
Employees based on their length of service and individual degree ofcontribution and the like and will grant the number of Company’s sharesequivalent to the awarded points when the terms and conditions are met
and vested rights are granted. The shares granted to Eligible Employees,
including future shares, will be acquired using cash funds contributed inadvance to the trust account established trust & Custody Services Bank,
Ltd., and will be managed separately as trust assets.
In addition, ¥5,634 million ($51,688 thousand) was recorded in “Provision
for share-based remuneration” for the fiscal year ended March 31, 2020
because there was the cost for the awarded points based on their length ofservice by previous consolidated fiscal year.
The shares of the Company held by the trust were accounted for astreasury stock under net assets. The assets, liabilities, income and expensesof the Trust were consolidated in the accompanying consolidated financial
statements. The book value and number of shares held by the trust at March
31, 2020 was ¥6,991 million ($64,138 thousand) and 4,848 thousand shares.
(iv) Accounting estimates associated with the spread of COVID-19
The Company group expects the negative impact of the novel coronavirus
on its businesses. This is because there will be a significant economic
slowdown due to the stagnation of production and a consumption activity
after the state of emergency has been declared in Japan. In addition, the endof the spread of COVID-19 infection is unclear now.
The Company group’s accounting is based on certain assumptions inaccounting treatment concerning the recoverability of deferred tax assets andimpairment losses, etc. In the Transportation Services Business, it is assumed
that movement restrictions due to the declaration of the emergency will be
gradually lifted from May 2020, and that production activity will gradually
recover after December 2020. In the vehicle sales business, it is assumed that
80% of the passenger cars and 70% of the trucks and buses will be sold in
the fiscal year 2020 compared to the fiscal year 2019.
However, there are many uncertainties over the impact of COVID-19
which could affect the Group’s financial position and operating results forthe fiscal year ending March 31, 2021.

3. Financial Instruments(a) Qualitative information on financial instruments(i) Policies on financial instruments

The Seino Group has implemented a Cash Management System foreffective investments and funding. Pursuant to this system, the Company
invests in short-term, low-risk instruments in accordance with its internalfund management rules. The Company procures funds mainly throughindirect financing such as bank loans for investments in facilities, taking
immediate liquidity into consideration.

(ii) Details of financial instruments and Risks

Trade receivables are exposed to the credit risk of customers. Some of thesubsidiaries have receivables in foreign currency and are exposed to foreign
currency fluctuation risk.
Marketable and investment securities, which consist of held-to-maturity
securities and equity securities of business entities with which the Seino
Group has business relationships, are exposed to stock market fluctuationrisk.
Trade payables have general terms and conditions and are mostly due
within one year. However, some of the subsidiaries have trade payables
denominated in foreign currency, which exposes them to foreign currency
fluctuation risk.

Some bank loans and convertible bonds are used principally for capital
investments and are partially exposed to interest rate fluctuation risk.

(iii) Risk Management for Financial Instruments
Monitoring of credit risk

In accordance with internal policies for credit risk management, eachsubsidiary monitors the creditworthiness of its customers and manages
the terms and conditions of payment, due dates and remaining balances toreduce credit risk. With held-to-maturity securities, the Company invests
in bonds that have been highly rated by credit rating agencies in accordancewith its internal fund management rules. As a result, the risk is insignificant.

Monitoring market risk

The Board of the Directors regularly monitors market risk using
management methods which comply with internal market risk management
rules. For marketable securities, the Seino Group monitors market prices
every quarter and reviews the market conditions and the financial positionof and business relationship with the issuers.

Monitoring liquidity risk

The Company has a Cash Management System with its subsidiaries
and becomes the paying agent for the subsidiaries under the system.
The subsidiaries report their cash flow projections to the Company. The
Company has sufficient bank credit lines, including credit lines withoverdraft facilities, enabling the Seino Group to manage liquidity risk.

(iv) Supplemental information on fair values

The fair values of financial instruments are based on their market prices.
The fair values of financial instruments with no available market prices are
determined by using prices calculated with alternative methods. However,since certain assumptions are used in the computation of these estimates, theresults may be different if alternative assumptions are used.

(b) Fair values of financial instruments

The fair and carrying values of the financial instruments included in the
consolidated balance sheets at March 31, 2020 and 2019, other than those forwhich the fair value was extremely difficult to determine, are set forth in the tablebelow.

At March 31, 2020:
Cash and cash equivalents
Short-term investments
Trade receivables
Investment securities
			Total assets

Carrying value

Fair value
Millions of yen¥

93,482
16,572
120,546
30,175
260,775¥

4,130
48,711¥¥

Short-term borrowings¥
Trade payables
Current portion of long-termbank loans
Long-term bank loans
			Total liabilities¥

At March 31, 2019:
Cash and cash equivalents
Short-term investments
Trade receivables
Investment securities
			Total assets

2,342
9,180
64,363¥¥93,482
16,571
120,546
30,175
260,774

¥—
(1)
—
—
¥(1)

4,130
48,711

¥—
—

2,342
9,055
64,238

—
(125)
(125)

Carrying value

Fair value
Millions of yen¥

98,462
13,536
120,895
34,444
267,337¥

5,470
54,414¥¥

Short-term borrowings¥
Trade payables
Current portion of long-termbank loans
Long-term bank loans¥
			Total liabilities

1,391
10,371
71,646¥¥

Difference¥

Difference

98,462
13,536
120,895
34,444
267,337

¥—
—
—
—
¥—

5,470
54,414

¥—
—

1,391
10,263
71,538

—
(108)
(108)

¥

17

Annual Report 2020

Carrying value
At March 31, 2020:
Cash and cash equivalents
Short-term investments
Trade receivables
Investment securities
			Total assets

Fair value

Difference

Thousands of U.S. dollars$$

857,633
152,037
1,105,926
276,835
2,392,431$

37,890446,890$

Short-term borrowings$
Trade payables
Current portion of long-termbank loans
Long-term bank loans$
			Total liabilities

21,486
84,220590,486$$

857,633
152,028
1,105,926
276,835
2,392,422

$—
(9)
—
—
$(9)

37,890446,890$——21,486
83,073589,339—(1,147)(1,147)$

Notes:(1) M ethods used to determine the fair value of financial instruments are as
follows:
Assets:Cash and cash equivalents
As these instruments are settled within a short term, their fair value
and carrying value are nearly identical, and their carrying values are
assumed as their fair values.
Trade receivables
The fair value of installment sales receivables is measured by the
carrying amount, which is based on the present value of future cash
flows through maturity discounted using an estimated credit risk
adjusted interest rate. The carrying amounts of trade receivables
other than installment sale receivables approximate fair value becauseof the short maturity of these instruments.
Short-term investments and investment securities
The fair value of marketable securities equals the quoted market
price, if available. The fair value of debt securities equals thequoted market price or the price provided by financial institutions.
Marketable and investment securities classified according to the
purpose for which they are held are described in Note 5.
Liabilities:
Trade payables
As these instruments are settled within a short term, their fair values
and carrying values are nearly identical, and their carrying values are
assumed as their fair values.
Short-term borrowings and current portion of long-term bank loans
As these instruments are settled within a short term, their fair values
and carrying values are nearly identical, and their carrying values are
assumed as their fair values.
Long-term bank loans
The fair value of long-term debt is based on the present value of
future cash flows discounted using the current borrowing rate forsimilar debt of comparable maturity.
(2) The following were not included in the table above because the fair value
was extremely difficult to determine:
Millions of yen

2020

2019

Thousands of
U.S. dollars
2020

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

18(3) The redemption schedule for financial assets with maturities at March 31,
2020 was as follows:
Due after Due after
1 year
5 years
throughthrough
5 years
10 yearsMillions of yen

Due
after
10 years¥——
31,344¥ 31,344

¥—
—
731
¥
731

¥—
—
2
¥
2

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

Due
after
10 years$——
287,560$ 287,560

$—
—
18
$
18

Due within
1 year
At March 31, 2020:
Cash and cash equivalents ¥Short-term investments
Trade receivables¥

93,482
16,57488,469198,525

At March 31, 2020:
Cash and cash equivalents $857,633
Short-term investments
152,055
811,642
Trade receivables$ 1,821,330

$—
—
6,706
$ 6,706(4) F or the repayment schedule for long-term bank loans at March 31, 2020,
see Note 9, “Short-term Borrowings and Long-term Debt.”

4. Inventories
Inventories at March 31, 2020 and 2019 were as follows:
Millions of yen

Merchandise and finished products
Work in process
Raw materials and supplies

2020
11,731
1,279
768¥ 13,778¥

2019
11,485831
852¥ 13,168¥

Thousands of
U.S. dollars
2020$ 107,624
11,734
7,046$ 126,404

5. Investments
At March 31, 2020 and 2019, short-term investments consisted of thefollowing:

Marketable securities:¥
Bonds and other		 Total marketable securities
Time deposits with an original maturityof more than three months¥

Millions of yen

Thousands of
U.S. dollars
2020

8,207
8,207

2,100
2,100

$

11,436
13,53676,743$ 152,037

2020

8,365
16,572

2019¥¥75,29475,294At March 31, 2020 and 2019, investment securities consisted of the following:
¥
¥

1,470
2,918
4,388

¥
¥

1,926
2,355
4,281

$
$

13,486
26,771
40,257

2019

Thousands of
U.S. dollars
2020

34,276108
60
34,444
4,281
38,725$ 276,349—
486
276,835
40,257$ 317,092

Millions of yen

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

2020¥

30,122—
53
30,175
4,388¥ 34,563¥¥

At March 31 2020, the fair value of marketable securities classified as held-tomaturity and the related net unrealized gains were as follows:
Carrying
value
At March 31, 2020
Securities with fair value exceeding
carrying amount:
Bonds
¥
Other
Securities with fair value not exceeding
carrying amount:
Bonds
¥
Other
¥

—
—

¥

—
—

¥

—
—

3,000
3,000
6,000

¥

3,000
2,999
5,999

¥

—
(1)
(1)

¥

¥

—
—

$

—
—

$

—
—

27,52327,52355,046$27,52327,51455,037

$

—
(9)
(9)

$

$

Marketable securities classified as available-for-sale are stated at fair value
with unrealized gains and losses excluded from current earnings and reported
as a net amount within the net assets account until realized. At March 31, 2020
and 2019, gross unrealized gains and losses for marketable securities classified asavailable-for-sale were as follows:
Gross
Gross
unrealized unrealized
gains
lossesMillions of yen

Cost
At March 31, 2020:
Equity securities
Bonds
Other
At March 31, 2019:
Equity securities
Bonds
Other

At March 31, 2020:
Equity securities
Bonds
Other

¥
¥
¥
¥

15,381118
2,127
17,626¥¥

15,585
118
2,127
17,830¥¥15,294—26
15,32018,824—33
18,857¥

Fair andcarrying
value(553) ¥ 30,122
(11)
107
—
2,153
(564) ¥ 32,382¥¥(133) ¥
(10)—(143) ¥¥

34,276108
2,160
36,544

Thousands of U.S. dollars$ 141,110
1,083
19,514$ 161,707$ 140,312—238$ 140,550$$(5,073) $ 276,349
(101)
982
—
19,752(5,174) $ 297,083

At March 31, 2020 and 2019 investments in and long-term loans to affiliates
and nonconsolidated subsidiaries consisted of the following:
2019

Thousands of
U.S. dollars
2020

Millions of yen

Equity securities of affiliates andnonconsolidated subsidiaries
Investments in partnerships ofnonconsolidated subsidiaries

2020¥ 15,238¥

15,736$ 139,798

1,638
16,876¥—
15,73615,028$ 154,826¥

At March 31, 2020 and 2019, property and equipment consisted of thefollowing:

Fair value
Difference
Millions of yen

Thousands of U.S. dollars

At March 31, 2020
Securities with fair value exceeding
carrying amount:
Bonds
$
Other
Securities with fair value not exceeding
carrying amount:
Bonds
$
Other
$

6. Property and Equipment
Thousands of
U.S. dollars
2020

Millions of yen

2020

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

2019

¥ 174,108 ¥ 176,941 $ 1,597,321
287,332
281,227
2,636,073
111,382
109,563
1,021,853
47,74846,390438,055
5,604
5,417
51,413
11,833
11,753
108,560
638,007631,291
5,853,275(322,023)(320,658)(2,954,339)
Less accumulated depreciation
310,633 $ 2,898,936
		 Total property and equipment ¥ 315,984

One of the consolidated subsidiaries elected to carry out a one-timerevaluation to restate the cost of land used for business operations at values
reassessed on March 31, 2002, reflecting adjustments for land shape and otherfactors based on appraisal values issued by the Japanese National Tax Agency inaccordance with the Law Concerning Revaluation of Land. According to thelaw, the excess of the original book value over the reassessed value, net of the tax
effect and minority interest portions, is recorded in net assets as land revaluation
decrement account in the accompanying consolidated balance sheets. At March
31, 2020 and 2019, the difference between the carrying values of land used forbusiness operations after revaluation over the current market values of the land at
the fiscal year-end amounted to ¥2,549 million ($23,385 thousand) and ¥2,746
million, respectively.

7. Real Estate for Rent
Some of the Company’s subsidiaries own land and facilities for rent at
locations where the business branches were closed or redeployed branches used
to be. The carrying values in the consolidated balance sheets, changes during theyears ended March 31, 2020 and 2019 and the fair values of the rental properties
were as follows:
Thousands of
U.S. dollars
2019
2020
¥ 14,622 $ 128,037(666)
28,449¥ 13,956 $ 156,486¥ 18,583 $ 202,211

Millions of yen

Carrying value at the beginning of year ¥Net changes during the year¥
Carrying value at the end of year
Fair value at the end of year *¥2020
13,956
3,101
17,05722,041

Note: * Fair value was measured at the estimated value based principally on a realestate appraisal or property tax bases.
Profit and loss recorded for rental properties for the fiscal years ended March
31, 2020 and 2019 were as follows:
Millions of yen

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

¥

¥

2020
1,732
357
1,375

¥

(463) ¥

2019
1,651
329
1,322

Thousands of
U.S. dollars
2020$ 15,890
3,275
12,615(435) $

(4,248)

8. Asset Retirement Obligations
Asset retirement obligations are based upon estimated future restoration
obligations pursuant to office rental agreements. The asset retirement obligations
are calculated based upon the useful life designated by law or the estimated officerental period and are discounted by the yield rate of government bonds.
Asset retirement obligations for the years ended March 31, 2020 and 2019were as follows:19Annual Report 2020

Millions of yen

At the beginning of year
New consolidations
New obligations
Changes in estimated obligations
and accretion
Settlement payments
Other
At the end of year

¥

¥

2020
3,065
—
498

¥

2019
2,963
—
55

Thousands of
U.S. dollars
2020$ 28,119
—
4,569

42

46

386

(4)
(12)
3,589 ¥

(19)
20
3,065 $

(37)
(110)
32,927

9. Short-term Borrowings and Long-term Debt
At March 31, 2020 and 2019, short-term borrowings consisted of thefollowing:Thousands of
U.S. dollars
2020

Millions of yen

Unsecured bank overdrafts with interest
rates ranging from 0.269% to 1.300%¥
per annum at March 31, 2020
Secured bank overdrafts with interest rates
0.900% per annum at March 31, 2020
Short-term bank loans, secured withinterest rates ranging from 0.526% to0.526% per annum at March 31, 2020
Short-term bank loans, unsecured withinterest rates ranging from 0.158% to6.300% per annum at March 31, 2020
¥

2020

530

2019

¥

3,965

$

4,862

100

—

918

500

525

4,587

3,000
4,130

¥

980
5,470

$

27,52337,890At March 31, 2020, the Company and certain subsidiaries had unsecured
overdraft agreements with 13 banks. Under the agreements, the Company andthe subsidiaries were entitled to withdraw up to ¥39,730 million ($364,495
thousand). The Company and the subsidiaries were not obligated to pay
commitment fees on the unused portions of the overdraft facilities.
At March 31, 2020 and 2019, long-term debt consisted of the following:
Millions of yen

Loans from government agencies andbanks, repayable through 2025, withinterest rates ranging from 0.530% to4.650% per annum at March 31, 2020:
SecuredUnsecured
Capitalized lease obligations
Less current portion¥¥

Thousands of
U.S. dollars
2020

2020

2019

9,298 ¥
849
7,852
17,999(2,342)
15,657 ¥10,369 $
1,393
8,143
19,905(2,609)17,296 $85,303
7,788
72,037
165,128(21,486)
143,642

At March 31, 2020 and 2019, respectively, the following assets were pledged ascollateral for certain long-term debt:
Millions of yen

Thousands of
U.S. dollars
2020

3,261
1,087
1,232
1,133

$

2020
Land
Buildings and structures
Cash and deposits
Shares of subsidiaries and associates
Long-term loans receivable fromsubsidiaries and associates

20

¥

550

2019

¥

5,175
1,442
1,246
1,133
760

29,917
9,972
11,303
10,394
5,046

The aggregate annual maturities of long-term debt as of March 31, 2020 wereas follows:Year ending March 31,
2021
2022
2023
2024
2025
Thereafter

Millions of yen
¥
2,342
2,031
8,661
978
635
3,352
¥
17,999Thousands of U.S.
dollars$
21,486
18,63379,4598,972
5,826
30,752$
165,128

10. Commitment Line Agreement
Consolidated subsidiary Kanto Transportation Co., Ltd. had a commitmentline agreement of ¥2,000 million ($18,349 thousand) as of March 31, 2020 toensure its access to financing. The outstanding balance of borrowings under thisagreement was ¥500 million ($4,587 thousand) at March 31, 2020.

11. Financial Covenants
Consolidated subsidiary Kanto Transportation Co., Ltd. is a party to a
syndicated loan agreement and commitment line agreement that includes thefollowing financial covenants.
1.	The operating loss on a consolidated basis of Kanto Transportation Co.,
Ltd. before amortization of goodwill is allowed on the profit and loss
statement for the two consecutive years as of the previous fiscal year at
March 31, 2017 or later.
2.	The amount of equity (except subscription rights to shares, noncontrollinginterests and deferred gains and losses on hedges) on the balance sheets
on a consolidated basis of Kanto Transportation Co., Ltd. is required tobe equal to or greater than 80% of equity on the balance sheet as of theprevious fiscal year at March 31, 2017 or later.
Remaining balances of debt were as follows:
Millions of yen

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

2020
500
800
8,300
¥
9,600
¥

2019
500
800
9,100
¥ 10,400¥

Thousands of
U.S. dollars
2020
$
4,587
7,339
76,147$ 88,073

12. Employee Retirement Benefits
The Company and its subsidiaries have mainly unfunded defined benefit
plans with rules and regulations determined by the Company and each subsidiary.
In addition, some subsidiaries have Smaller Enterprise Retirement Allowance
Mutual Aid or Specific Retirement Allowance Mutual Aid. Also, the Company
and certain subsidiaries have defined contribution plans from this fiscal year.
Other subsidiaries have funded defined benefit plans. One company belongs
to a comprehensive employee pension fund for the defined benefit corporate
pension plan. One company has established a retirement benefit payment trust.
Some of the consolidated subsidiaries have joined a multi-employer welfare
pension fund plan. Those for which it is impossible to calculate in a rationalmanner the amount of the pension assets which corresponds to the amount of
the contributions are accounted for in the same way as the defined contribution
pension plan. The retirement benefit obligation of certain subsidiaries wascalculated using the simplified method as permitted by the accounting standard
for employee retirement benefits.
As of and for the year ended March 31, 2020 and 2019, defined benefit plans,
including plans applying the simplified method were as follows:

(a) Movements in retirement benefit obligation:
Thousands of
U.S. dollars
2020
2019
2020
¥ 82,281 ¥ 81,375 $ 754,871
4,324
4,287
39,670
189
185
1,734
463
653
4,248
(3,467)(2,999)(31,808)419(1,258)
3,844
4
38
37
¥ 84,213 ¥ 82,281 $ 772,596
Millions of yen

At the beginning of year
Service cost
Interest cost
Actuarial differences
Benefits paid
Past service cost
OthersAt the end of year(b) Movements in plan assets:

At the beginning of year
Actuarial differences
Contributions paid by the employer
Benefits paid
At the end of year

Thousands ofMillions of yen
U.S. dollars
2020
2019
2020
¥ 6,809 ¥6,572 $ 62,468(2,240)329(20,550)
2
2
18
(142)
(94)
(1,303)¥
4,429 ¥
6,809 $ 40,633(c) R econciliation from retirement benefit obligation and plan assets toemployee retirement benefit asset or liability:
Thousands ofMillions of yen
U.S. dollars
2020
2019
2020
Funded retirement benefit obligation ¥7,500 ¥
7,037 $ 68,807
Plan assets(4,429)(6,809)(40,633)
3,071
228
28,174
Unfunded retirement benefit obligation
76,71375,244
703,789
Net employee retirement benefit liability ¥ 79,784 ¥ 75,472 $ 731,963
Employee retirement benefit liability
Employee retirement benefit asset
Net employee retirement benefit liability ¥79,784—79,784¥75,486(14)
75,472

731,963—$ 731,963(d) N et periodic retirement benefit expenses, including plans applying thesimplified method:
Thousands of
U.S. dollars
2020
2019
2020
Service cost
¥ 4,324 ¥
4,287 $
39,670Interest cost
189
185
1,734
Amortization of actuarial differences
1,487
1,427
13,642(173)(59)(1,587)
Amortization of past service cost
5,827 ¥
5,840 $ 53,459
Net periodic retirement benefit expenses ¥Millions of yen(e) R etirement benefit adjustment included in other comprehensive income,before tax effects:

Past service cost
Actual differences
Total balance

Thousands ofMillions of yen
U.S. dollars
2020
2019
2020
¥
592 ¥ (1,200) $
5,431
1,215
(1,102)
11,147¥
1,807 ¥ (2,302) $ 16,578(f ) Retirement benefit adjustment in accumulated other comprehensive
income, before tax effects:
Thousands of
U.S. dollars
2020
2019
2020
Past service cost yet to be recognized ¥(461) ¥ (1,052) $(4,229)Actuarial differences yet to be recognized
8,459
7,244
77,605
Total balance¥
7,998 ¥
6,192 $ 73,376
Millions of yen(g) Plan assets(i) Plan assets comprise:
2020
15%
1%
84%
100%

Cash and cash equivalents
Bonds
Equity securities
Total*

Percent

2019
10%
1%
89%
100%

*99% of total plan assets consisted of the assets of the retirement benefit
payment trust.
(ii) Long-term expected rate of return
Current and target asset allocations, historical and expected returns on
various categories of plan assets have been considered in determining
the long-term expected rate of return.
(h) Actuarial assumptions
The principal actuarial assumptions (expressed as weighted averages):
2020
0.1%
0.0%

Discount rate (mainly)
Long-term expected rate of return

2019
0.1%
0.0%

(i) Defined contribution plan
Amounts of required contributions to the contributions plans of the Company
and certain consolidated subsidiaries were ¥241 million ($2,211 thousand) for theyear ended March 31, 2020.

13. Contingent Liabilities
At March 31, 2020 and 2019, the Seino Group was contingently liable fortrade notes and discount notes endorsed to affiliates and third parties and forguarantees, including substantial guarantees, principally of indebtedness of third
parties in the aggregate amount of ¥1,205 million ($11,055 thousand) and ¥1,261
million, respectively.

14. Lease Commitments
As lessee, the Seino Group has entered into various rental and leaseagreements for land and buildings to be used for truck terminals and warehouses
that are generally cancelable with a few months advance notice, except for certain
operating lease agreements. The aggregate minimum future lease payments forsuch noncancelable operating lease agreements, including the imputed interest
portion, as lessee at March 31, 2020 and 2019 were as follows:

Operating leases:
Due within one year
Due after one year

Millions of yen

Thousands of
U.S. dollars
2020

965
7,829
8,794

$

2020
¥
¥

2019

¥
¥

763
2,161
2,924

$

8,853
71,82680,679A certain subsidiary engaged in leasing operations as lessor enters into
various lease agreements with third parties principally for vehicles. The leases
are categorized as operating leases. At March 31, 2020 and 2019, the aggregate
future minimum lease commitments to be received for such non-cancelable leaseagreements, including the imputed interest, were as follows:21

Annual Report 2020

Millions of yen

Operating leases:
Due within one year
Due after one year

2020
¥
¥

391
2,978
3,369

2019

¥

206
398
604

¥

Thousands of
U.S. dollars
2020
$

3,587
27,321$ 30,908

15. Net Assets
Under the Japanese Corporate Law (the “Law”) 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 as additional
paid-in capital, which is included in capital surplus.
Under the Law, in cases in which a dividend distribution of surplus ismade, the smaller of an amount equal to 10% of the dividend or the excess, ifany, of 25% of common stock over the total of additional paid-in capital andlegal earnings reserve must be set aside as additional paid-in capital or legal
earnings reserve. Legal earnings reserve is included in retained earnings in theaccompanying 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 betransferred to other capital surplus and retained earnings, respectively, which arepotentially available for dividends.
At March 31, 2020 and 2019, capital surplus consisted principally of
additional paid-in capital. In addition, retained earnings included legal earnings
reserve of the Company in the amount of ¥4,262 million ($39,101 thousand) at
March 31, 2020 and 2019.
The maximum amount that the Company can distribute as dividends is
calculated based on the non-consolidated financial statements of the Company inaccordance with Japanese laws and regulations.
During the year ended March 31, 2020, the Company paid interim dividendsof ¥11 per share, amounting to ¥2,232 million ($20,477 thousand). In addition,at the annual shareholders’ meeting held on June 25, 2020, the shareholders
approved cash dividends of ¥28 per share, amounting to ¥5,624 million ($51,596
thousand). The appropriation had not been accrued in the consolidated financial
statements as of March 31, 2020 as such appropriations are recognized in the
period in which they are approved by the shareholders.

16 Consolidated Statements of Cash Flows
During the year ended March 31, 2019, stock subscription rights were
exercised, and the related convertible bonds were converted to common stock
without any cash settlement. Details of the movement resulting from the exerciseof the stock subscription rights are as follows:
Millions of yen

2020
Gain on disposal of treasury stock
Decrease in treasury stock
Decrease in convertible bonds

¥

—
—
—

2019

¥

1,619
4,232
5,851

Thousands of
U.S. dollars
2020
$

—
—
—

17. Income Taxes
The tax effects of temporary differences that give rise to a significant portionof deferred tax assets and liabilities at March 31, 2020 and 2019 were as follows:

Millions of yen

Deferred tax assets:
Employee retirement benefit liability ¥Enterprise tax accruals
Accrued bonuses
Intercompany capital gains
Operating loss carryforwards
Loss on assets transferred
Impairment loss on fixed assets
Allowance for doubtful accounts
Other
Less valuation allowance
Deferred tax liabilities:
Deferred capital gains
Unrealized gains on available-forsale securities
Valuation adjustments for consolidation
Employee retirement benefit asset
Other
Net deferred tax assets

¥

2020

2019

Thousands of
U.S. dollars
2020

27,794 ¥ 26,286 $
532
743
4,139
4,178
1,220
1,203
642
566
1,675
1,437
12,274
13,508
205
192
5,837
3,474
54,31851,587(14,774)(15,503)
39,54436,084

254,991
4,881
37,972
11,1935,890
15,367
112,605
1,881
53,550498,330(135,541)
362,789

8,488

5,032

77,872

4,412
11,460—897
25,257
14,287

5,408
11,523
5575
22,543
13,54140,477105,138—
8,229
231,716
131,073¥$

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, 2020 and 2019, avaluation allowance was provided to reduce deferred tax assets to the extent thatthe management believed that the amount of the deferred tax assets was notrealizable.
The reconciliation of the statutory tax rate and the effective tax rate for theyears ended March 31, 2020 and 2019 was as follows:

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

Percentage of pretax
income
2020
2019
29.9%
29.9%
0.3
(0.2)
1.8
1.4
0.0
(2.0)
4.4
(0.0)
0.0
35.6%

0.4
(0.2)
2.1
1.4
(0.9)
0.3
4.2
(0.2)
0.0
37.0%

18. Comprehensive Income
Amounts reclassified to net income (loss) in the current period that wererecognized in other comprehensive income in the current or previous periods andthe tax effects for each component of other comprehensive income for the years
ended March 31, 2020, 2019 and 2018 were as follows:
Millions of yen

Thousands of
U.S. dollars
2020

2020
2019
2018
Net unrealized gains on availablefor-sale securities:(Decrease) increase during the year ¥ (4,090) ¥ (2,250) ¥ 4,795 $ (37,523)
300
(450)
(292)
2,752
Reclassification adjustments
Subtotal, before tax(3,790) (2,700)
4,503(34,771)996
735(1,359)9,138
Tax effectSubtotal, net of tax(2,794)(1,965)
3,144(25,633)

22

Foreign currency translation
adjustments:
Increase (decrease) during the year
Reclassification adjustments
Subtotal, before tax
Tax effectSubtotal, net of tax

Retirement benefit adjustment:(Decrease) increase during the year
Reclassification adjustments
Subtotal, before tax
Tax effectSubtotal, net of tax

2020

24
—
24
—
24

413
—
413
—
413

2019

2018

Thousands of
U.S. dollars
2020

934
1,368
2,302
(789)
1,513

(120)
1,467
1,347
(459)
888

(28,642)
12,064(16,578)
5,771(10,807)

2019

45
—
45
—
45

2020

2018

Thousands of
U.S. dollars
2020

Millions of yen

(53)
—
(53)
—
(53)

Millions of yen(3,122)
1,315(1,807)629(1,178)

Shares of other comprehensive
income of affiliates accounted forusing equity method:
Decrease during the year
(88)
(4)
Reclassification adjustments
Subtotal(92)
		Total other comprehensive income ¥ (4,019) ¥

(245)
(33)
(807)
(11)
(2)
(37)
(256)
(35)
(844)
(761) ¥ 4,021 $ (36,871)

19. Subsequent Events
Share Repurchase
The Board of Directors of the Company resolved at its meeting held on May
13, 2020 matters concerning the Company’s repurchase of its common stock
pursuant to the provisions of the Articles of Incorporation as applied pursuant
to Article 459, Paragraph 1, Item 1 of the Business Corporation Law, as detailed
below.
Reason for share repurchase
To improve capital efficiency and implement flexible capital policies in
response to changes in the business environment
Class of shares to be repurchased
Common stock
Total number of shares that may be repurchased:
20,000,000 shares (maximum), 9.96% of issued shares excluding treasury
stock
Aggregate repurchase price¥ 20,000 million ($183,486 thousand) (maximum)
Period of repurchase
May 14, 2020 to December 23, 2020
Disposal of Treasury Stocks as Compensation for Granting of Restricted
Shares to the Company’s Directors
On July 3, 2020, the Company resolved to dispose of its treasury stocks as
restricted share-based remuneration and executed the disposal on July 31, 2020 as
follows.
1. Overview of the Disposal of Treasury stocks(1) Disposal date(2) Class and number ofshares to be disposed(3) Disposal value(4) Total disposal value(5) Method of offer or
disposal(6) Method of contribution

July 31, 2020
Ordinary shares of the Company: 121,250
shares¥1,382 per share¥167,567,500
Allotment of specified restricted shares
In-kind contribution of monetarycompensation receivables or monetary
receivables(7) Acquirers of disposed
shares, number of suchacquirers and number ofshares to be disposed(8) Other

Seino Holdings’ Member of the Board(including Outside Board Members): 9 persons
111,500 shares
Seino Holdings’ subsidiary Member of theBoard: 2 persons 9,750 shares
Disposal of Treasury Stocks is conditioned on
the taking effect of the securities registration
statement filed in accordance with the
Financial Instruments and Exchange Act.

2. Purpose of and Reasons for the Disposal
The Company resolved at a meeting of its Board of Directors held on May 12,
2017, to introduce a restricted share-based remuneration plan (the “Remuneration
Plan”) in order to provide an incentive for Members of the Board including
Outside Board Members (“Eligible Board Members”), of the Company and its
subsidiary to sustainably increase corporate value and in order to further promoteshared values with shareholders.
Moreover at the 96th Ordinary General Meeting of Shareholders heldon June 28, 2017, monetary compensation not exceeding 600 million yen
per year, including 100 million yen per year for Outside Board Members andexcluding the amount of employee’s salary paid to a Member of the Board who
concurrently holds an employee post was approved. The amount shall be paid to
Eligible Board Members as monetary compensation to serve as the property to
be contributed for the acquisition of shares with transfer and other restrictions(“restricted shares”) pursuant to the Remuneration Plan. The transfer restriction
period for restricted shares is to be the period specified by the Board of Directorsof the Company and its subsidiary and is to be a period between three to six years
from the day on which the shares are allotted.
Acquisition of equity interest in subsidiary
The Board of Directors meeting held August 7, 2020 determined that theCompany Group purchase all of the shares of Kanto Transportation Co., Ltd.
from Karita Kanto limited partnership, etc., because the joint holding period had
expired.
1. Overview of transaction(1) Name and business description of acquired company
Name of acquired company: Kanto Transportation Co., Ltd.
Description of business: Transportation services(2) Date on which business combinations was effectAugust 27, 2020(3) Legal form of equity combination
Acquisition of equity interest from noncontrolling shareholders(4) Name of company after business combination
Kanto Transportation Co., Ltd.
(5) Other matters with regard to transaction
The voting right ratio will be 100% by acquiring additional shareswith a voting right ratio of 50%.
2. Overview of accounting treatment
The acquisition will be accounted for as a transaction with noncontrollingshareholders under common control, based on ASBJ Statement No. 21,“Accounting Standard for Business Combinations” and ASBJ GuidanceNo. 10, “Guidance on Accounting Standard for Business Combinations
and Accounting Standard for Business Divestitures,” issued on September
13, 2013.
3. Details to be reported in the acquisition of equity interest in subsidiary
The acquisition price is not disclosed due to the confidentiality obligationof the contract.
4. Details about change in shareholders’ equity by transaction with
noncontrolling shareholders(1) Main reason for change in capital surplus
Acquisition of equity interest in subsidiary(2) Amount of decrease in capital surplus due to transaction with
noncontrolling shareholders
The amount of decrease in capital surplus due to transactions with
noncontrolling shareholders is under evaluation at the time of theconsolidated financial statements.

23

Annual Report 2020

20. Segment Information(a)

General information about reportable segments

The reportable segments are constituent business units of the Seino Group for which separate financial information is obtained and examined regularly by the Board of
Directors to evaluate business performance. The Seino Group has established the “Business Promotion Department” as a holding company. Each subsidiary plans and operates
each business under its control. In addition, some of the subsidiaries engage in real estate leasing services to make good use of their facilities. Therefore, the Seino Group consistsof business segments that are based on the business conducted by each subsidiary. The Seino Group’s reportable segments are “transportation services,” “vehicle sales,” “merchandise
sales” and “real estate leasing services.”

(b)

(c)

Basis of measurement about reportable segment profit or loss, segment assets and other material items

The principles of segment accounting are basically the same as those described in Note 2, “Summary of Significant Accounting Policies.” Intersegment sales and transfer
amounts are based on market prices.

Information about reportable segment profit or loss, segment assets and other material items

Information about reportable segment for the years ended March 31, 2020, 2019 and 2018 is summarized as follows:

For the year 2020:
Operating revenue:
		External customers
		 Intersegment sales and transfers
			Total operating revenue
Segment income (*2)

Transportation
services¥¥

Segment assets (*3)¥
Depreciation
Amortization of goodwill
Investments in affiliates accounted forusing the equity method
Increase in tangible and intangible
fixed assets
For the year 2019:
Operating revenue:
		External customers¥
		 Intersegment sales and transfers
			Total operating revenue
Segment income (*2)¥
Segment assets (*3)¥
Depreciation
Amortization of goodwill
Investments in affiliates accounted forusing the equity method
Increase in tangible and intangible
fixed assets
For the year 2018:
Operating revenue:
		External customers¥
		 Intersegment sales and transfers
			Total operating revenue
Segment income (*2)¥

Vehicle sales

Real estateleasing services

Other (*4)

466,473 ¥2,458
468,931
23,339 ¥104,664 ¥10,488115,152
4,353 ¥

32,868 ¥18,79051,658871 ¥Millions of yen
1,732 ¥
21,389 ¥—16,251
1,732
37,6401,383 ¥
688 ¥

509,749 ¥
17,890
1,407

119,744 ¥1,873
115,498 ¥60—

17,305 ¥83—

14,52143—

26,602

4,581

462,459 ¥2,301
464,760
24,475 ¥504,189 ¥
16,950
1,273

Total

Adjustments(*1)

Consolidated

627,126 ¥
47,987675,11330,634 ¥— ¥(47,987)(47,987)(1,195) ¥627,126—
627,126
29,43949,270 ¥698
228

711,566 ¥
20,604
1,636(54,323) ¥(406)—

657,243
20,198
1,636——

14,564(2)

14,562

130

3,496

1,281

36,090(573)

35,517102,234 ¥
11,247
113,481
4,851 ¥
119,982 ¥
1,761
133,518 ¥21,49155,009829 ¥
15,672 ¥50—

1,651 ¥—
1,651
1,334 ¥
13,752 ¥84—

18,574 ¥15,871
34,445902 ¥
49,637 ¥529
163

618,436 ¥
50,910669,346
32,391 ¥703,232 ¥
19,374
1,437— ¥(50,910)(50,910)(1,182) ¥(45,249) ¥(373)—

618,436—
618,436
31,209657,983
19,001
1,437

15,064

42

—

—

—

15,106(2)

15,10433,398

4,652

118

20

1,779

39,967(526)

39,441

443,168 ¥2,046
445,214
20,965 ¥467,226 ¥
15,654
1,150

103,342 ¥9,606
112,948
4,922 ¥
117,088 ¥
1,918
1

31,575 ¥20,62952,204810 ¥
15,590 ¥38—

1,599 ¥—
1,599
1,239 ¥
13,484 ¥62—

16,446 ¥12,717
29,163921 ¥
43,952 ¥446
14596,130 ¥44,998641,128
28,857 ¥657,340 ¥18,1181,165— ¥(44,998)(44,998)(978) ¥
(28,612) ¥(343)—

596,130—
596,130
27,879628,728
17,775
1,165

—

—

—

3,098

Segment assets (*3)¥
Depreciation
Amortization of goodwill
Investments in affiliates accounted for
3,052
46
using the equity method
Increase in tangible and intangible
20,152
2,930
fixed assets
Transportation Vehicle sales
For the year 2020
services
Operating revenue:
		External customers$ 4,279,569 $ 960,220
		 Intersegment sales and transfers
22,55096,220			Total operating revenue
4,302,119
1,056,440
Segment income (*2)$
214,119 $
39,936
Segment assets (*3)
$ 4,676,596
Depreciation
164,128
Amortization of goodwill
12,908Investments in affiliates accounted forusing the equity method
133,220
Increase in tangible and intangible
244,055
fixed assets

24

Merchandise
sales

92

Merchandise
sales

$

458

Real estateleasing services

1,444
Other (*4)

25,076
Total

(3)
(373)

Adjustments
(*1)

3,095
24,703
Consolidated

Thousands of U.S. dollars
15,890 $ 196,229 $ 5,753,450 $— $ 5,753,450—
149,092
440,247(440,247)—
15,890345,321
6,193,697(440,247)
5,753,450
12,688 $
6,312 $ 281,046 $(10,963) $ 270,083$

301,542 $
172,385473,927
7,991 $

$ 1,098,569 $
17,1849

142,184 $550—

158,761 $
762
—

395

—

—

—

133,615(19)

133,596

42,0281,193

32,073

11,752

331,101(5,257)

325,844452,018 $ 6,528,128 $
6,404
189,028
2,092
15,009(498,376) $ 6,029,752(3,725)
185,303—
15,009Note: *1) The adjustments column in the table above represents principally the elimination of intersegment transactions and balances, except for (*2) and (*3).
*2) Segment income is reconciled to operating income in the accompanying consolidated statements of income. Segment income in the adjustments column represents unallocated general
corporate expenses which were not assigned to specific reportable segments, net of intersegment transactions.
*3) Segment assets in the adjustments column represent unallocated general corporate items which were not assigned to specific reportable segments, including items such as cash andshort-term and long-term investments in securities, net of intersegment balances.
*4) Other segment represents the business segment not included in the reportable segments and includes the information services business, the housing sales business, the passenger
transportation business and other business.

(d)Related Information(i)

Information about products and services
The Company has not disclosed information about products and services here because the Company has disclosed the same information above.
(ii) Information about geographic areas
Operating revenue
The Company has omitted the disclosure of operating revenue by geographic area because operating revenue to external customers in Japan accounts for more than 90%of the amount of operating revenue reported in the consolidated statements of income.
Property and equipment
The Company has omitted the disclosure of property and equipment by geographic area because property and equipment in Japan account for more than 90% of theamount of property and equipment reported in the consolidated balance sheets.
(iii) Information about major customers
The Company has not disclosed information about major customers because no customer contributed 10% or more to operating revenue in the consolidated statements
of income.
(iv) Information on impairment loss by reportable segments:
Impairment loss:
For the year 2020
For the year 2019
For the year 2018
Impairment loss:
For the year 2020

Transportation
services

Vehicle sales

Merchandise
sales

¥

129 ¥
869
100

80 ¥
302
22

$

1,183 $

734 $Real estateleasing services

Millions of yen
— ¥
—
—

Other

Total

66 ¥
28
69

267 ¥
37
—

542
1,236
191

Thousands of U.S. dollars
— $
606 $

2,450 $

4,973(v) Information on goodwill by reportable segments:
For the year 2020
Amortization of goodwill

Transportation
services¥

As of March 31, 2020
Balance of goodwill
For the year 2019
Amortization of goodwill¥

As of March 31, 2019
Balance of goodwill
For the year 2018
Amortization of goodwill¥

As of March 31, 2018
Balance of goodwill
For the year 2020
Amortization of goodwill$

Merchandise
sales

1,407 ¥

1 ¥

12,3552

1,273 ¥

Real estateleasing services

Millions of yen
— ¥

Other

Total

— ¥

228 ¥

1,636

—

—

737

13,094

1 ¥

— ¥

— ¥

163 ¥

1,437

13,762

3

—

—

865

14,6301,150 ¥

1 ¥

— ¥

— ¥

14 ¥

1,165

13,953

3

—

—

125

14,081

Vehicle sales

Merchandise
sales

Real estateleasing services

Transportation
services

As of March 31, 2020
Balance of goodwill

Vehicle sales

12,908 $Thousands of U.S. dollars
9 $
— $
— $

113,349

18——

Vehicle sales

Merchandise
sales

Real estateleasing services

Other

Total

2,092 $

15,0096,761

120,128(iv) Information on gain on negative goodwill by reportable segments:
Gain on negative goodwill:
For the year 2020
For the year 2019
For the year 2018
Gain on negative goodwill:
For the year 2020

Transportation
services

¥

— ¥
—
—

Transportation
services

$

— $

— ¥
—
—
Vehicle sales

Millions of yen— ¥——Merchandise
sales

Other

— ¥
—
—

Real estateleasing services

Thousands of U.S. dollars
— $
— $
— $

Total

— ¥
88
63
Other

—
88
63
Total

— $

—

25

Annual Report 2020

Report of Independent Auditors
Independent Auditor’s Report
To the Board of Directors of
SEINO HOLDINGS CO., LTD.:
OpinionWe have audited the accompanying consolidated financial statements of SEION HOLDINGS CO., LTD. (“the Company”) and its
consolidated subsidiaries (collectively referred to as “the Group”), which comprise the consolidated balance sheets as at March 31, 2020 and
2019, and the consolidated statements of income, statements of comprehensive income, statements of changes in net assets and statements ofcash flows for each of the years in the three-year period ended March 31, 2020, and notes, comprising a summary of significant accounting
policies, other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial positionof the Group as at March 31, 2020 and 2019, and its consolidated financial performance and cash flows for the years then ended in accordancewith accounting principles generally accepted in Japan.

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

Responsibilities of Management and Corporate auditors and the board of corporate auditors for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting
principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern in accordance with accounting principles generally accepted in Japan and using
the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Corporate auditors and the board of corporate auditors are responsible for overseeing the directors’ performance of their duties including thedesign, implementation and maintenance of the Group’s financial reporting process.

26

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

Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2020 are presented
solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion, such translation
has been made on the basis described in Note 1 of the Notes to the consolidated financial statements.

27

Annual Report 2020

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

Kuniyoshi Iwata
Designated Engagement Partner
Certified Public Accountant

Hiroyuki Kato
Designated Engagement Partner
Certified Public Accountant

Akihisa Jijiwa
Designated Engagement Partner
Certified Public Accountant
KPMG AZSA LLC
Nagoya Office, Japan
September 30, 202028

Seino GroupThe Seino Group consists of Seino Holdings Co., Ltd. and 81 consolidated subsidiaries, 2 nonconsolidated subsidiaries,
and 21 affiliates. The Seino Group operates in five business segments: transportation services, vehicle sales, merchandise
sales, leasing for real estate services and other services. The business relationship in the Seino Group is as follows.

Clients
Collection and
Delivery

VehiclesSales and Repairs

Sales

Services

Real Estate
Leasing

Domestic Transportation

Vehicle Sales

Merchandise Sales

Leasing for Real Estate

Seino Transportation Co., Ltd.
*1
Hokkaido Seino Transportation Co., Ltd. *1
Tohoku Seino Transportation Co., Ltd. *1
Kobaun Co., Ltd.
*1
Niko warehouse Co., Ltd.
*1
Kanto Seino Transportation Co., Ltd.
*1
Seino Super Express Co., Ltd.
*1
Kanagawa Seino Transportation Co., Ltd. *1
Izu Seino Transportation Co., Ltd.
*1
Nohi Seino Transportation Co., Ltd.
*1
Tokai Seino Transportation Co., Ltd.
*1
Mie Seino Transportation Co., Ltd.
*1
Hinomaru Seino Transportation Co., Ltd. *1
Shikoku Seino Transportation Co., Ltd. *1
Kyushu Seino Transportation Co., Ltd. *1
Okinawa Seino Transportation Co., Ltd. *1
Seino Tsu-un Transportation Co., Ltd.
*1
Seino Express Co., Ltd.
*1
Seino Hikkoshi 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
S&N Logistics Co., Ltd.
*1
Toyo Co., Ltd.
*1
Katsunuma Transportation Co., Ltd.
*1
Darumaya Transportation Co., Ltd.
*1
Central Logistics Co., Ltd.
*1
Eco Alliance Co., Ltd.
*1
COCONET CO., LTD.
*1
GENie Co., Ltd.
*1
INTENTS Inc.
*1
ASAHI CONPOU CO., LTD.
*1
Kanto Transportation Co., Ltd.
*1
Osaka Kosoku Nyuhai Corporation*1
KCS Co., Ltd.
*1
Izumikawa Transportation Co., Ltd.
*1
Showa Reizo Co., Ltd.
*1
Saitama Seino Transportation Co., Ltd. *2
Tokyo Seino Transportation Co., Ltd.
*2
Mikawa Seino Transportation Co., Ltd.
Ensyu Seino Transportation Co., Ltd.
Kumamoto Seino Transportation Co., Ltd.
Tango Seino Transportation Co., Ltd.

Toyota Corolla Gifu Co., Ltd. *1
Gifu Hino Motor Co., Ltd. *1
Netz Toyota Gifu Co., Ltd. *1
Asahi Enterprise Co., Ltd. *1*1
Jms Gifu Co., Ltd.
Shiga Hino Motor Co., Ltd. *1
Seino Auto Service Kanto *1
Co., Ltd.
Seino Auto Lease Co., Ltd. *1*1
Tokyo Sharyou Co., Ltd.
*1
Unicla Jiko Co., Ltd.
*1
Subic GS Auto, Inc.
KILTON SEINO HOLDING Co., Ltd. *2
Toyota Gifu Parts Dsitributor Co., Ltd.

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

Seino Transportation Co., Ltd.
OthersMarchandise
sales

Leasing forReal Estate Services

VehicleSales

Information Services
Seino Information
Service Co., Ltd.

*1

Japan Logistics
Development Co.,
Ltd.

*1

OthersInternational Transportation
Seino Logix Co., Ltd.
*1
United-Seino Transportation(Malaysia) Sdn. Bhd.
*1
Seino Customs Clearance Service Co., Ltd. *1
Seino(Thailand) Co., Ltd.
*1
Seino Saha Logistics Co., Ltd. *1
PT Seino Indomobil Logistics Services *1
Hankyu Hanshin Express Co., Ltd.
*2
Schenker-Seino Co., Ltd.
*2
PT Seino Indomobil Logistics *2
REX Logistics Co., Ltd.
*3SIRACHA TRANSPORT CO., LTD.
Box Charter Co., Ltd.
Cosmo Hokuriku Haiso Center Co., Ltd.
Gifu Truck Kogyo Co., Ltd.
Aishin Sangyo Co., Ltd.
Ogaki School Lunch Support Co., Ltd.
LOCCO Co., Ltd.

Transportation
Services

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

OthersSeino Holdings Co., Ltd.
Note *1: Consolidated subsidiaries
81*2: Affiliates (under the equity method)
6*3: Nonconsolidated subsidiaries
2
Companies except those mentioned above are affiliates under the cost method. 15

29

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