Profile

Seino
Co.,Co.,Ltd. Ltd.
(“the (“theCompany”)
began businessSeinoHoldings
Holdings
Company”)
beganas atrucking
company
in 1930 and
was incorporated
in 1946.
business
as a trucking
company
in 1930 and
was Based inincorporated
1946.
Based inof Ogaki,
thecity of Ogaki,inGifu
Prefecture,
we theare acity
leading
truckingGifu
Prefecture,wearealeading
trucking
company,
expandingcompany, expanding in step with the growth of the Japanese
in
step
with
the
growthoftheJapanese
economyand theeconomy and the development of the nation’s extensive expressway
development of the nation’s extensive expressway network.
network.
OnOnOctober
theCompany
Companytransferredits
October 1,
1, 2005,
2005, thetransferred
its transportationtransportation
businessandotheroperations
tonewbusiness and other operations to a new company—whichahastaken thecompany—which
has
taken
the
original
nameSeino
original name Seino Transportation Co., Ltd —and was renamed Seino
Transportation Co., Ltd.—and was renamed Seino
Holdings Co., Ltd adopting a pure holding company structure.
Holdings Co., Ltd. a pure holding company structure.
The Seino Group currently consists of the pure holding company
Seino Holdings, 82 consolidated subsidiaries and 20 affiliates engaged incompany Seino Holdings, 58 consolidated subsidiaries and 14
transportation
services,
vehicle sales, merchandise
real sales,
estate leasing
affiliates
engagedin transportation
services,sales,
vehicleservices and otherservices.
merchandise
sales,
leasing for real estate services and otherIn
itsmainstay
Transportation
Services Business, the Company has
services.
taken
steps
to
build
even
more
convenientlogistics
systems, all
In its mainstay Transportation Services
business,thethe while
adhering
toits“customer-first”
principle.
Company has taken steps to build even more convenient
As of March
31, all2022,
offersefficienttotransportation
services
logistics
systems,
theSeino
while
adhering
its “customer-first”
principle.
of viaMarch
31,
2011, Seino
offersefficientthroughoutAsJapan
its 734
domestic
terminals,
a fleetof 25,514 trucks
transportation
services
throughoutJapan
viadaily.
its 634 domestic
and a trucking networkthat
averages 6,000
routesterminals,
fleet inoforder
24,321
trucks andtruckingfrom
network
In recentayears,
to accelerate
our aevaluation
servingthat
as aaverages
5,000 routes
Overseas,
has astransferredits
special groupcargo
motordaily.
trucking
companySeino
to serving“the logistics
international
forwarding
operations
Schenker-Seino
Co.,company Seino,”
we have beenworking onto
fully
utilizing our logistics
Ltd.,a joint
ventureestablished
Schenker
AG infacilities,
as wellas boosting
our spacewith
efficiency
and operational
efficiency and achieving semi-automation with assistive robots.
Company aims to bolster its
Furthermore, we have been working on resolving the issues of ourcompetitiveness by optimizing the synergies
customers based on customized proposals making use of the functions ofof Seino’s domestic transportation network
our entire group, and have been striving to expand our revenues throughand Schenker’s global network andenhancing our logistics
infrastructure.
cutting-edge
IT systems.
The Seino Group is committed toproviding
rapidthat
servicesthat deliver
providing rapid services
deliver
total
total
customersatisfaction
and willcustomer satisfaction and will proceed
down
proceeddown“Road toSuccess” tothe “Road to
Success”
tothe
becomea highly
become a throughhighly profitablecompany
profitable company
initiatives
todevelop a progressive
businessmodel athat
through initiatives
to develop
will becomeprogressive
the standard
for model that willbusinessnext-generationtransportation
becomethe standard forbusiness.
next-generation transportation
business.
Forward-looking Statements:
In this annual report, statements other than historicalfacts are forward-looking statements that reflect theplans and expectations of the Company. These
forward-looking statements involve risks, uncertainties
and other factors that may cause the Company’s
actual results and achievements to differ materiallyfrom those anticipated in these statements.

Contents
Contents
Financial Highlights
Financial
Highlights

11

To Our Shareholders,Shareholders,Customers
CustomersandandFriends
Friends

22

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

66

Financial Review
Financial
Review

88

Six-year Summary
Six-year
Summary

99

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

13
13

Notes toto Consolidated
ConsolidatedFinancial
FinancialStatements
Statements

14
14

Report ofof Independent
IndependentAuditors
Auditors

24
28

Seino Group
Group

25
32

Board of Directors(As of June 28, 2022)
President

Yoshitaka Taguchi

Representative Director

Takao Taguchi

Directors

Yasuhisa Kotera
Hidemi Maruta
Nobuyuki Nozu

Outside Directors

Meyumi Yamada
Shintaro Takai
Yoichiro Ichimaru

Standing Statutory Auditors

Nobuhiko Ito
Osamu Katagiri

Outside Statutory Auditors

Eiji Kasamatsu
Hiroyuki Masuda

Seino Holdings Co., Ltd.

Financial Highlights

Operating revenue(Billions of Yen)

For the Years Ended March 31, 2022, 2021 and 2020

Thousands of
U.S. Dollars (Note)

Millions of Yen
2022

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

2021

2022

2020

¥ 607,658 ¥ 592,046 ¥ 625,627
24,561
29,69727,546
27,621
39,89528,345
16,661
25,84817,25689.31
128.41
94.59$ 4,980,803
225,787
232,336
141,443
0.78

Millions of Yen

Thousands of
U.S. Dollars (Note)

2022

2021

600

500

400

300

0

2020

2021

2022

2021

2022

2021

2022

2022

2020

CONSOLIDATED BASIS:
Cash and cash equivalents, and short-term investments ¥ 108,489 ¥ 103,054 ¥ 110,054
Property and equipment, net of accumulated depreciation
334,605
315,984
341,680
Total assets
672,248654,533
685,267
Long-term debt and other long-term liabilities
44,47817,99946,927
Net assets
422,635
432,813433,521
Net assets per share (yen)2,175.29
2,375.05 2,297.61

700

Net income$

889,2542,800,656
5,616,943
384,648
3,553,451
19.47(Note) U.S. dollar amounts are translated at ¥122 = U.S. $1, only for the convenience of readers.

(Billions of Yen)

30
25
20
15
10
5
0
2020

Net assets(Billions of Yen)

450

400

Corporate Data350

(As of April 4, 2022)

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

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

0

2020

1

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, 2022 (April 1, 2021 to March 31, 2022) are presented herein.

Medium-term Management Plan
“Connecting our values - For the
Prosperity of ourCustomers,”2021/4-2023/3
The following is a brief report on the performance of
Seino Holdings Co., Ltd. for the fiscal year ended March 31,
2022, our 101th term (from April 1, 2021 to March 31,2022).
During the fiscal year under review, the economy of Japan
had been expected to see a resurgence in economic activity asa result of progress in vaccinations for novel coronavirus
disease (COVID-19), but due to the emergence of newvariants of the virus, amongst other factors, the outlook
remained unclear throughout the period.
In the transportation industry, which is the mainstay
business of the Seino Group, there were concerns about the
impact on corporate profits of supply constraints, soaring
prices for crude oil and raw materials, and other factors, but
personal consumption and industrial production entered amoderate recovery trend, and some positive signs were visible
with regard to the volume of freight transportation in Japan.
Guided by the concepts of the “Connecting our values For the Prosperity of our Customers” three-year
mediumterm management plan, which was in its second
year, the Seino Group responded to these conditions byoffering value aimed at resolving the issues faced bycustomers, and concentrating its investments on growthareas such as logistics, with all employees moving forward as
one to enhance its corporate value.
As part of that, the Group prioritized achieving finer
granularity within its delivery network for the major
conurbations of the Tokyo metropolitan area and the Kinki
metropolitan area, which comprise the major sources ofconsumption. In addition, in preparation for establishing
three temperature zone logistics, the Company madesubsidiaries of KANTO LOGITEC CO., LTD.
(headquartered in Hidaka City, Saitama Prefecture), and
MARUKYU UNYU CO., LTD. (headquartered in Itogun, Wakayama Prefecture), which have particular strengths
2

in supporting the three temperature zones of frozen, chilled,
and dry.
As a result, operating revenue for the fiscal year ended
March 31, 2022 was ¥607,658 million (up 2.6% year onyear), operating income was ¥27,546 million (up 12.2% year
on year), ordinary profit was ¥30,269 million (up 9.1% year
on year), and profit attributable to owners of parent was¥17,256 million (up 3.6% year on year).

Future Outlook
With regard to the outlook for the Japanese economy
going forward, the effects of various policies being
implemented and improvements in overseas economies are
expected to bring about a recovery in business conditions,but the outlook is predicted to remain uncertain due to theimpact of such factors as resurgences in infections andsoaring prices for raw materials.
In the transportation industry, which is the mainstay
business of the Seino Group, there are concerns about risingfuel prices caused by the increase in crude oil prices, andlabor shortages, including shortages of long-distance drivers.
However, with capital investment expected to accelerate andindustrial production projected to be strong, the recovery
trend in the volume of freight transportation in Japan,
centered on production-related freight, is forecast to become
clearer.
Under such conditions, in preparation for the building ofan efficient and flexible logistics platform in theTransportation Services Business by the Group as a whole,
we will restructure our main route timetables in order toachieve optimal overall operational efficiency.
In order to accelerate our transition from “Less-thantruckload Seino” to “Logistics Seino,” we will make full useof distribution facilities while improving spatial and task
efficiency, and implementing initiatives for semi-automation
through the use of assistive robots. We will also use thefunctions of the entire Group to create order-made proposals
that resolve customer problems.

Moreover, we will further broaden the application of EDI
to contribute to the customer’s use of information, which will
open the way to improved operational efficiency, while also
driving transportation reforms by promoting modal shifts,
moving to heavier vehicles and taking other labor-saving
measures.
In other areas, we will rebuild deteriorating facilities andaccelerate the use of cashless operations, seek to strengthen
recruitment and improve retention rates by promoting
working style reforms and health management, implement
measures for a sustainable society, including reductions in
our CO2 emissions in preparation for achieving carbon
neutrality, and execute brand strategies to raise awareness of
the Company.
Because competition between channels is intensifying as aresult of the introduction of Toyota vehicles being sold inparallel with all other models, in the Vehicle Sales Business
we are working to become the supplier chosen by customers
through the implementation of such measures as ongoing
renewal of stores and service workshops, and theintroduction of number plate recognition systems to speed up
our response to visiting customers. Furthermore, we aremoving forward with the optimization of our sales network
through a program of establishing new stores andconsolidating existing stores, based on analysis of the local
trading area. In truck sales, delivery delays for new vehicles
are expected to continue, and so we will work to secure
earnings through sales of used vehicle and by conducting
inspections and maintenance. In other areas, we will strive toenhance ES by introducing advanced maintenanceequipment and improving the working environment, whichshould have a positive effect on the recruitment and retentionof mechanics.
In the Merchandise Sales Business, Real Estate Leasing
Services Business, and Other Business, we will take steps toexpand the business domain and strengthen our existing
businesses.
In accordance with the three-year medium-term
management plan, the Seino Group will continue tocontribute to the prosperity of customers, and to achieve
further growth by implementing measures that result in thehappiness of people everywhere.
To all shareholders, we sincerely ask for your ongoing
encouragement and support into the future.

Yoshitaka Taguchi,
President and Chief Executive Officer

June 20223

Special Feature

Expanding Scope of Operations and Creating New Value
Main Topics for 2022
Acceptance of Ukrainian refugees

Seino Holdings has decided to offer opportunities for housing andemployment to Ukrainian refugees. The company will prepare
employee dormitories for refugees who have been recognized by theJapanese government, and will consider offering available jobs to
those who are seeking them. The company’s acceptance of refugees on
this occasion is based on its desire to provide “smiles” and “happiness”
to all people.

Establishment of dispensing pharmacy
inside distribution center

Nohi Seino Transportation (head office: Seki City, Gifu
Prefecture; president: Shinji Komori), together with Minacolor (headoffice: Chiyoda-ku, Tokyo; president: Shinya Kina), has jointly
developed a dispensing pharmacy that accommodates online
pharmaceutical services, within its distribution center in Hakusan
City, Ishikawa Prefecture.
The dispensing pharmacy single-handedly offers drugadministration guidance from pharmacists, and the supply ofpharmaceutical products for shipment nationwide.
Dispatched pharmacists. Items ranging
from category-1 pharmaceutical products
to quasi-pharmaceutical products arehandled, and online users can order thesefrom anywhere throughout the country.

First introduction of EV trucks

Seino Transportation has marked a new in-house first by
introducing two EV (electric) trucks at its Ichikawa Branch. This ispart of a joint project aimed at green distribution together with
Schenker Seino (head office: Shinagawa-ku, Tokyo; CEO: Siew-Wei
Ong), and starting in April, these trucks will be utilized exclusively
for delivering the products of customers who are electronics
manufacturers.

Marukyu Transport made part ofSeino Holdings group

Seino Holdings has made Marukyu Transport (head office:Katsuragi-cho, Wakayama Prefecture) part of its group. Marukyu
Transport specializes in the handling of food products and beverages
centering on the Hanwa region between Osaka and Wakayama, andthis includes offering transportation, warehousing, centers, andprocessing operations at both normal and low temperatures. In recent
years, the company has been expanding its B2B terminal delivery
operations for the three temperature zones of “frozen,” “chilled,” and“dry,” with service 24 hours a day, 365 days a year. Making Marukyu
Transport part of the group is part of a focused effort to increase thedensity of delivery networks in Japan’s three major metropolitan areas.
Based on strengthening networks for deliveries in the abovementioned
three temperature zones, and developing synergies with groupcompanies in the Hanwa region, customers will be provided withmore stable lead times and lower costs going forward.

Opening of Inzai Distribution
Warehouse

With the objectives expanding logistics revenues andstrengthening logistics-transportation functions, Seino
Transportation has started operating its Inzai Distribution
Warehouse as an external warehouse of its Funabashi Branch.
The three stories of the Inzai Distribution Warehouse have a
combined warehouse area of 5,840 tsubo (1 tsubo = 3.31 square
meters), and since usage is possible starting at the small scale of 500
to 1,000 tsubo, it will be possible to meet the various logistics needsof customers. Furthermore, since the warehouse is a 15-minute drivefrom the Funabashi Branch, it will be possible to provide
comprehensive logistics services that include transportation.
For the Inzai Distribution Warehouse, Seino Transportation has
rented the entire building of “Odakyu Real Estate Logistics Center
Inzai,” the first logistics facility in which Odakyu Real Estate (headoffice: Shibuya-ku, Tokyo; president: Ichiro Kaneko) has been
involved.

Inzai City has excellent access to central Tokyo and Narita Airport, and thus thewarehouse is expected to be key for import and export products.
Seino Transportation is working on reducing CO₂ emissions in order to realize adecarbonized society.
4Reopening of Sagamihara Branch

Seino Transportation has relocated its Sagamihara Branch andreopened it on the fifth floor of “GLP ALFALINK Sagamihara 1,”
which has been constructed by GLP Japan (head office: Minato-ku,
Tokyo; president: Yoshiyuki Chosa).
The Sagamihara Branch now has a home-related area more than
three times that of its previous location, which was considered to be
cramped, and it has newly added the territories of Midori-ku,
Sagamihara City and Machida City.
The logistics warehouse has a warehouse area of 2,400 tsubo, andit consists of seven sections that are numbered from “D-1” to “D-7”(255 tsubo to 445 tsubo). The warehouse can be used on a section
basis, which is difficult for large warehouses that are used by multiple
companies, and thus it is able to provide streamlined warehouse usagethat is in accordance with the challenges and needs of customers.

The warehouse is equipped with four vertical transporters, two freight elevators,
and four dock levelers.

Start of operation of Kangaroo Liner TF60

The “Kangaroo Liner” is a mixed-block train that Seino
Transportation started operating in 2018. As part of initiatives aimed at a
“modal shift” from cargo transport by truck to cargo transport by railway,
which has a low environmental impact, the Kangaroo Liner has been
operating along two routes, with the SS60 operating between Osaka andSendai, and the NF64 operating between Nagoya and Fukuoka. On thisoccasion, operation along a third route has been started by the TF60,
which operates between Tokyo and Higashi-Fukuyama.
The Kangaroo Liner TF60 is comprised of 20 cars (with 15 belonging
to the Seino Group) and carries 30 31-foot containers, and it runs at a top
speed of 100 km/h along the approximately 779 km between Tokyo
Freight Terminal and Higashi-Fukuyama Station. Operation of the TF60
will result in a decrease in CO₂ emissions of 8,083 tons per year. These
efforts by the Seino Group are expected to not only contribute to theachievement of carbon neutrality, but also help with alleviating shortagesof truck drivers and reforming ways of working.

Switching to free-address system at
Ogaki Head Oﬃce

As part of efforts to reform ways of working, Seino Transportation
has introduced a “free-address system” (system that allows employees
to freely change their workspace) at its Ogaki Head Office. On thesecond-floor, where the office area is located, a large center table androws of multiple desks have been set up, and free seating without any
barriers between departments has been established. After employees
arrive at the company, they can take items such as their computer outof their personal locker, and do work at any seat that they like.
Furthermore, cafeterias and meeting rooms have been made into
open “free spaces” that can be used by individuals or groups.
Window-facing counter seats, where it is possible to concentrate insolitude, and bench seats, where groups of employees can comfortably
hold meetings, have also been made available.
Seino Transportation hopes that the elimination of barriers
between departments will enhance interdepartmental collaboration,and lead to the creation of new innovations.

It is hoped that ways of working that are freefrom preconceived notions will lead to thecreation of new innovations.

Recommended logistics operators for
Expo 2025 Osaka, Kansai

A joint venture between Seino Holdings and Hankyu Hanshin
Express (head office: Kita-ku, Osaka City; president: Kazuhiro
Tanimura), as well as Schenker Seino, have been selected as therecommended logistics operators for Expo 2025 Osaka, Kansai,
which will be held from April 13 to October 13, 2025.
Seino Holdings and Hankyu Hanshin Express, which have been in acapital and business alliance since 2018, will utilize their respective
strengths to comprehensively offer international transport, customsclearance, and other logistics-related services to expo participants,
who will include countries, regions, organizations, and companies.

5

Expanding Our Operations Scope and Creating New Value
Transportation Services BusinessIn the Transportation Services Business, we based ouroperations on the Seino Group’s nationwide transportationand delivery network, in accordance with the medium-term
management plan, while utilizing the logistics resources ofother companies. We also began offering the “Ippo” logistics
concierge service which introduces and proposes the optimal
solution for the customer.
In this service the Company acts as the contact point for
distribution, selects one of its partners, and handles everythingfrom communications to inquiries such as tracking. It has
been well received as a one-stop solution for resolving thedifficulties faced by customers.
At Seino Transportation Co., Ltd., the core company of
the Transportation Services Business, we have been seeking tostrengthen our sales structures by increasing the number ofplanners and working to receive reasonable transport fees. In
addition, we implemented initiatives to win new customers
and raise the percentage of continuing shipments in order tosecure higher volumes of cargo handled. These included
utilizing the Customer Management System, which centrally
manages customer information, and the Seino Yuso Navi Pro
service, which proposes the optimal transportation mode forthe volume and size of customer cargo.
On the other hand, we have continued our efforts toimprove the operational efficiency for regular scheduled routes

and the efficiency of sorting and loading, as well as optimizing
costs so that they are correlated with the volume of cargohandled, with the aim of ensuring more stable profits. We also
took steps to reduce CO2 emissions, mitigate the shortage oftruck drivers, and reform working styles, such as by launching
our third round-trip route mixed-block train, “KangarooLiner TF60,” which operates between Tokyo Freight
Terminal and Higashi Fukuyama station.
In terms of expansion efforts, Seino Transportation Co.,
Ltd. opened the Inzai distribution warehouse (Inzai City,
Chiba Prefecture), and the Ryugasaki branch (Inashiki-gun,Ibaraki Prefecture), as well as relocating the Sagamihara
branch (Sagamihara City, Kanagawa Prefecture) and the
Nagoya-Nishi branch (Ama City, Aichi Prefecture). Seino
Super Express Co., Ltd. relocated the Yokaichi sales office(Higashiomi City, Shiga Prefecture), while Nohi Seino
Transportation Co., Ltd. opened the Kakamigahara
Kawashima distribution center (Kakamigahara City, Gifu
Prefecture). In this way we worked to strengthen our logistics
infrastructure and expand our earnings.
As a result of the above, operating revenue for this segment
was ¥453,253 million (up 2.8% year on year) and operating
profit was ¥21,108million (up 14.9% year on year).

Vehicle Sales BusinessIn the business of passenger car sales in the Vehicle Sales
Business, in addition to ongoing store renewals to improvecustomer satisfaction, we implemented measures such as
campaigns to take advantage of new model introduction
effects, and proposals for early replacement through the use ofresidual value installment sales. However, the business wasaffected by semiconductor shortages, delivery delays caused byconstraints on parts supply resulting from the spread of
COVID-19 in Southeast Asia, and other problems, leading tovolume sales of new vehicles recording a year-on-year decline.
Used vehicle sales also recorded a year-on-year decline involumes, due to the reduction in traded-in vehicles caused bydelivery delays of new vehicles and difficulties in sourcing
caused by the rising market. However, the increase in retailprices for new vehicles caused by the delivery delays, and therise in the auction market, resulted in higher operating
revenue and gross profit. In the service division, as well as
focusing on initiatives to increase contact with customers by
6

inviting them to bring their vehicles in with the aim ofincreasing the efficiency of workshop visits, we worked tosecure earnings by strengthening proposals for accessory
products.
Truck sales were affected by production adjustments
resulting from semiconductor and parts shortages in a similar
way to passenger vehicle sales, but domestic new vehicle sales
recorded a year-on-year increase. In addition to strengthening
used vehicle sales, we worked to secure earnings byencouraging customers to visit the workshop for preventive
maintenance and working to bring outsourced operations
in-house.
In terms of office expansion efforts, Toyota Corolla Gifu
Co., Ltd. rebuilt the headquarters and Gifu branch (Gifu
City).
As a result of the above, operating revenue for this segment
was ¥98,221 million (down 0.1% year on year) and operating
profit was ¥4,491 million (down 6.1% year on year).

Merchandise Sales Business
The Merchandise Sales Business engages in the sale of fuel,paper and paper products, and other products. Sales ofdomestic tissue paper increased, but due to a decline inoperating revenue from fuel, amongst other factors, operating

revenue for this segment was ¥30,754 million (down 0.9% year
on year), although cost reductions and other efforts resulted inoperating profit of ¥789 million (up 7.8% year on year).

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

As a result of the above, operating revenue for this segment
was ¥2,013 million (up 8.0% year on year), and operating
profit was ¥1,509 million (up 1.0% year on year).

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

Operating revenue for this segment was ¥23,417 million (up18.7% year on year), and operating profit was ¥1,194 million(up 145.8% year on year).

Operating Revenue by Business Segment(Millions of yen)
FY Ended March 31, 2022

FY Ended March 31, 2021

Results

Results

Composition

Composition

Year-on-YearTransportation services

453,25374.6%

441,091

74.5%

2.8%

Vehicle sales

98,221

16.2%

98,334

16.6%(0.1%)

Merchandise sales

30,754

5.1%

31,0345.3%(0.9%)

Real estate leasing services

2,013

0.3%

1,865

0.3%

8.0%

Others23,417

3.8%

19,722

3.3%

18.7%

Total

607,658

100.0%

592,046

100.0%

2.6%

Operating Income by Business Segment(Millions of yen)
FY Ended March 31, 2022

FY Ended March 31, 2021

Results

Results

Composition

Composition

Year-on-YearTransportation services

21,10876.6%

18,375

74.8%

14.9%

Vehicle sales

4,491

16.3%

4,781

19.4%

(6.1%)

789

2.9%

732

3.0%

7.8%

Real estate leasing services

1,509

5.5%

1,495

6.1%

1.0%

Others

1,194

4.3%

486

2.0%

145.8%

Total

29,091105.6%

25,869105.3%

12.5%

Elimination(1,545)(5.6%)(1,308)(5.3%)—

Consolidated

27,546100.0%

24,561100.0%

12.2%

Merchandise sales

7

Financial Review
Operating Result

Financial Position

The consolidated sales of Seino Holdings for the fiscal
year ended March 2022 amounted to ¥607,658 million (a2.6% increase from the previous fiscal year). This was mainly
due to the fact that in home delivery cargo in thetransportation industry, our Group’s main business, there
were causes for concern, such as the impact of supply
constraints and soaring prices of crude oil and raw materials
on company revenues. Meanwhile, this was partially offset byrecovery trends regarding personal consumption andindustrial production, the appearance of positive signs related
to domestic cargo volumes, and efforts to expand revenues
through increasing logistics infrastructure.
Due to the above-mentioned factors, while sales costs
increased to ¥536,079 million, which was a 1.9% increase
from the previous fiscal year, the ratio of operating costs tosales stood at 88.2%, a 0.6% decrease from the previous fiscal
year.
Sales, general, and administrative expenses came to¥44,033 million (a 5.8% increase from the previous fiscal
year) due to an increase in salaries linked to businessperformance and a rise in bonuses resulting from an increasein transport volumes, and operating profit came to ¥27,546
million.
Current net income before taxes and other adjustments
increased by 2.6% from the previous fiscal year to ¥28,345
million, and current net income rose by 3.6% from theprevious fiscal year to ¥17,256 million.
Current net income per share stood at ¥94.59, and returnon equity was 4.1%. Annual cash dividend per share rose to¥29.00, which marked a 7.4% increase from the previous
fiscal year, and thus the dividend payout ratio amounted to
30.7%.

Total assets at the end of the current consolidated fiscal
year amounted to ¥685,267 million, which marked anincrease of ¥13,019 million from the end of the previous
consolidated fiscal year. The main factors were an increase in
cash and deposits, the acquisition of new land and buildings,
and an increase in the market value of marketable securities
held. Liabilities totaled ¥251,746 million, which marked a¥2,133 million increase from the end of the previous
consolidated fiscal year. Furthermore, net assets increased by¥10,886 million from the end of the previous consolidated
fiscal year to reach ¥433,521 million due to a rise in retained
earnings.

Cash Flows

Cash flow from operating activities amounted to ¥45,528
million, marking an increase of ¥6,843 million from theprevious consolidated fiscal year, due to factors such asincreases in depreciation expenses and the amount of
impairment losses.
Cash flow from investment activities came to −¥31,794
million, which was a ¥3,828 million increase from theprevious consolidated fiscal year. This was the result of factors
such as an acquisition of investment securities and an
acquisition of a new consolidated subsidiary.
Cash flow from financial activities fell by ¥2,609 million
from the previous consolidated fiscal year to ¥7,882 million,
and this was the result of factors such as the absence oflarge-scale acquisitions of treasury stock.
As a result of the above, cash and cash equivalents in thecurrent consolidated fiscal year increased by ¥5,842 million
from the previous consolidated fiscal year to ¥99,525 million.

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

2017

2018

2019

2020

2021

2022

-1

20

2017

2018

2019

2020

Operating income to operating revenue

Net income (loss) to total assets

Net income (loss) to operating revenue

Return on equity ratio

2021

2022

0

2017

2018

2019

2020

2021

2022

SEINO HOLDINGS CO., LTD. and Consolidated Subsidiaries

Six-year Summary

For the Years Ended March 31, 2022, 2021, 2020, 2019, 2018 and 2017
Millions of Yen
2022
For the year:
Operating revenue:
Transportation services
Vehicle sales
Merchandise sales
Real estate leasing 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

¥

2021

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

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

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

617,162
462,459
100,960
33,518
1,651
18,574545,253¥2017

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

567,539422,870
100,237
27,7491,543
15,140502,63944,03327,546
17,256

41,63324,561
16,661

42,38929,697
25,84840,71331,196
21,20839,05527,87920,04737,783
27,117
18,206245,578685,267
109,980
3,241
46,927433,521242,711672,248
110,993
4,471
44,478422,635

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

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

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

Yen
Per share data:
Net (loss) income:-BasicCash dividends¥

Number of shares issued

94.59
29.00

¥

207,679

89.31
27.00

¥

128.41
39.00¥

104.81
32.00

Thousands
207,679

207,679¥

101.88
30.00

¥

92.09
27.00

207,679

207,679

207,679

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

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

4.5
2.8
2.5
4.1
62.7
223.3
58.6
30.7

4.1
2.8
2.5
3.9
62.4
218.7
59.5
30.2

4.7
4.1
3.9
6.1
65.1
222.6
52.0
30.4

Debt equity ratio

Payout ratio

(%)

(%)

(%)

240

120

50

Current ratio

200

40

90

160
30
120

60

20
80
30

10

40

0

2017

2018

2019

2020

2021

2022

0

2017

2018

2019

2020

2021

2022

0

2017

2018

2019

2020

2021

2022

9

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Balance Sheets
March 31, 2022 and 2021

Thousands of
U.S. dollars
2022

Millions of yen
2022
Assets:Current assets:
Cash and cash equivalents (Note 3)
Short-term investments (Notes 3 and 5)
Trade receivables (Note 3)
Contract assets
Inventories (Note 4)
Other current assets
Allowance for doubtful accounts
			
Total current assets¥

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

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

2021¥¥

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$

815,779
73,475
972,533
8,615
92,10653,262(2,836)2,012,934

680,129(338,449)
341,680

661,221(326,616)
334,605

5,574,828(2,774,172)
2,800,656

40,137
20,631
11,126
14,78341,074
17,865
11,48013,938

328,992
169,107
91,197
121,172

94,932
672,248803,353$ 5,616,943

4,471
2,187
48,641
15,895
3,827$

11,332¥

93,683
9,371
120,402—
13,544
5,924(213)
242,71198,009685,267

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

10,575¥¥92,88535,972110,993

26,565
21,336400,943
130,918
44,992
29,762
246,959
901,475

44,32482,328
3,707
1,611
5,242
198

42,291
81,439
3,628
1,570
5,448
143

363,312674,820
30,385
13,20542,9671,623

1,356
251,746

1,078
249,613

11,1152,063,492

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

42,482
81,626321,179(35,498)
409,789348,213
663,4432,728,369(304,418)
3,435,607

14,620(122)(3,542)(208)
10,7483,629
433,521685,267

15,344(122)(4,890)
(860)
9,472
3,374
422,635
672,248

119,836(1,000)

—

3,000

3,023

24,590Commitments and contingent liabilities (Notes 13 and 14)
Net assets:
Shareholders’ equity (Note 15):
		 Common stock: 794,524,668 shares authorized and 207,679,783 shares issued
		 Capital surplus
		 Retained earnings
		 Less treasury stock at cost: 26,677,070 shares in 2022 and 25,203,489 shares in 2021
			
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

¥

¥

(29,033)(1,705)88,09829,746
3,553,451$ 5,616,943

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Income
For the Years Ended March 31, 2022, 2021 and 2020

2020

Thousands of
U.S. dollars
2022

625,627$ 4,980,803

Millions of yen
2022
Operating revenue (Note 20)¥

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

607,6582021¥

592,046¥

536,079
44,033580,11227,546525,852
41,633
567,485
24,561

553,541
42,389595,930
29,697

4,394,090
360,926
4,755,016
225,787

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

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

788
(458)
(40)
(5)
516
12
15,457
26
(26)
(542)
—
(5,634)104
10,19839,895

7,041(3,566)(1,877)—49
795(5,500)254
12,787(9,352)
—
—
5,918
6,549
232,336

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

11,813(1,115)
10,698

11,272(496)
10,776

13,222965
14,187

96,828(9,140)87,688

			

17,647

16,84525,708144,648

			

Operating income

Other income (expenses):
Interest and dividend income
Interest expense(Loss) gain on investments in partnerships
Commission for purchase of treasury shares
Subsidy income
Subsidies for employment adjustment(Loss) gain on sale or disposal of property and equipment
Gain on sale of investment securities
Share of profit (loss) of entities accounted for using equity method
Impairment loss on fixed assets (Notes 2(i) and 20)
Loss on valuation of shares of subsidiaries and associates
Provision for share-based remuneration
Miscellaneous, net
			Profit before income taxes

ProfitProfit (Loss) attributable to noncontrolling interests
			Profit attributable to owners of parent¥

391
17,256¥

184
16,661¥(140)
25,848$

U.S. dollars

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

¥

94.59
88.78
29.00

¥

89.31
89.29
27.00

3,205
141,443¥

128.41
—
39.00

$

0.78
0.73
0.23

See accompanying Notes to Consolidated Financial Statements.
11

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Comprehensive Income
For the Years Ended March 31, 2022, 2021 and 2020

2020

Thousands of
U.S. dollars
2022¥

25,708$144,648¥(2,794)(1,178)45(92)(4,019)21,689$(5,484)
11,024402
4,541
10,483
155,131

Millions of yen
2022

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¥

17,647

¥

(669)
1,345
49
554
1,279
18,926¥

18,531395

2021¥

16,845

¥

5,383
627
(51)
(58)
5,901
22,746¥

22,560186¥

21,797(108)$

151,893
3,238

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2022, 2021 and 2020

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, 2019 207,679,783 ¥ 42,482 ¥ 83,748 ¥ 292,883 ¥ (4,452) ¥ 414,661 ¥ 12,708 ¥ (114) ¥ (4,397) ¥(579) ¥ 7,618 ¥ 6,655 ¥ 428,934
Profit attributable to owners of parent———
25,848—25,848——————25,848Cash 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 than
—
—
—
—
—
—
(2,810)5(1,216)(24)(4,045)(6)(4,051)shareholders’ equity
Balance at March 31, 2020 207,679,783
42,482
83,744
312,202 (15,837) 422,591
9,898
(109)
(5,613)
(603)
3,573
6,649
432,813
Profit attributable to owners of parent———
16,661—
16,661——————
16,661
Cash dividends———(7,684)—(7,684)——————(7,684)Purchases of treasury stock andfractional shares, net——
3— (19,661)(19,658)
—
—
—
—
—
—
(19,658)
Change in treasury shares of parent arising fromtransactions with noncontrolling shareholders——(2,121)——(2,121)——————(2,121)
Net changes in items other than
—
—
—
—
—
—
5,446
(13)
723
(257)
5,899
(3,275)
2,624
shareholders’ equity
Balance at March 31, 2021 207,679,783
42,482
81,626321,179 (35,498) 409,789
15,344(122)(4,890)
(860)
9,472
3,374
422,635
Cumulative effects of changes in
—
—
—
(517)
—
(517)
—
—
—
—
—
2
(515)
accounting policies
Restated balance at March 31, 2021 207,679,783
42,482
81,626
320,662 (35,498) 409,272
15,344(122)(4,890)
(860)
9,472
3,376
422,120
Profit attributable to owners of parent———
17,256—
17,256——————
17,256
Cash dividends———(5,057)—(5,057)——————(5,057)Purchases of treasury stock andfractional shares, net
—
—
(8)
—
(1,641)(1,649)——————(1,649)Change in treasury shares of parent arising fromtransactions with noncontrolling shareholders
—
—
(678)
—
—
(678)
—
—
—
—
—
—
(678)
Net changes in items other than
—
—
—
—
—
—
(724)
—
1,348
652
1,276
253
1,529
shareholders’ equity
Balance at March 31, 2022 207,679,783 ¥ 42,482 ¥ 80,940 ¥ 332,861 ¥ (37,139) ¥ 419,144 ¥ 14,620 ¥ (122) ¥ (3,542) ¥(208) ¥ 10,748 ¥ 3,629 ¥ 433,521
Balance at March 31, 2021
Cumulative effects of changes inaccounting policies
Restated balance at March 31, 2021
Profit attributable to owners of parent
Cash dividends
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, 2022

12

Thousands of U.S. dollars$ 348,213 $ 669,066 $2,632,615 $(290,967) $3,358,927 $ 125,770 $ (1,000) $ (40,082) $ (7,049) $ 77,639 $ 27,655 $ 3,464,221—
348,213—————(4,238)(4,238)669,066 2,628,377 (290,967) 3,354,689 125,770—
141,443—
141,443——(41,451)—(41,451)——(1,000)———(40,082)———(7,049)———77,639——1727,672——(4,221)3,460,000
141,443(41,451)

—

(66)

—

(13,451)(13,517)

—

—

—

—

—

—

(13,517)—(5,557)——(5,557)

—

—

—

—

—

—

(5,557)—————(5,934)—
11,0495,344
10,4592,074
12,533$ 348,213 $ 663,443 $2,728,369 $(304,418) $3,435,607 $ 119,836 $ (1,000) $ (29,033) $ (1,705) $ 88,098 $ 29,746 $ 3,553,451

See accompanying Notes to Consolidated Financial Statements.

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Cash Flows
For the Years Ended March 31, 2022, 2021 and 2020

2020

Thousands of
U.S. dollars
2022

39,895$

Millions of yen
2022
Cash flows from operating activities:
Profit before income taxes¥
Adjustments for:		Depreciation
		 Impairment loss on fixed assets
		 Amortization of goodwill
		 Net increase in employee retirement benefit liability
		 Loss (gain) on sale or disposal of property and equipment
		 Share of (profit) of entities accounted for using equity method
		 Loss (profit) on investments in partnerships
		 Gain on sale of investment securities
		 Loss on valuation of shares of subsidiaries and associates
		 Net provision for accrued severance indemnities for directors and corporate
auditors		 (Decrease) increase in provision for share-based remuneration
		 Net provision for directors’ stock payments(Increase) decrease in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Other, net				 Subtotal
Interest and dividends received
Interest paid
Income taxes paid				 Net cash provided by operating activities
Cash flows from investing activities:
Increase in property and equipment
Increase in long-term investments and loans
Decrease in property and long-term investments
Decrease (increase) in short-term investments
Purchase of shares of subsidiaries resulting in change in scope of
consolidation (Note 16)
Proceeds from purchase of shares of subsidiaries resulting in change inscope of consolidation				 Net cash used in investing activities
Cash flows from financing activities:
Increase in long-term debt
Repayment of long-term debt
Net decrease in short-term borrowings
Payments from changes in ownership interests in subsidiaries that do not
result in change in scope of consolidation
Proceeds from share issuance to noncontrolling shareholders
Dividends paid to shareholders
Dividends paid to noncontrolling interests
Purchases of treasury stock, net of disposals
Other, net				 Net cash used in financing activities				 Effect of exchange rate changes on cash and cash equivalents				 Net increase (decrease) in cash and cash equivalents				 Cash and cash equivalents at beginning of year				 Cash and cash equivalents at end of year

¥

2021

28,345¥27,621¥

232,336

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

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

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

41
(206)
(1,151)1,808
1,434(1,989)54,984
1,063(417)(10,102)45,528

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

52
5,634
56
2,414
(691)
(6,185)(666)
49,9691,204(445)(15,764)
34,964(9,434)
14,82011,754(16,303)450,688
8,713(3,418)(82,803)373,180(29,383)(1,760)433
468(35,453)(1,000)
1,652
7,093

(34,693)(3,937)
23,641(2,916)(240,844)(14,426)
3,549
3,836

(1,631)

(258)

(148)

(13,369)

79(31,794)—(27,966)—(18,053)648(260,606)

11,036(9,588)(480)

25,389(1,039)(422)

200(1,815)(1,138)90,459(78,590)(3,934)(781)
4(4,928)(84)(1,813)(1,248)(7,882)(10)
5,842
93,683
99,525(5,518)—(7,492)(71)(19,998)(1,340)(10,491)(27)
201
93,482
93,683—21(6,524)(52)(11,385)(1,229)(21,922)31(4,980)98,462
93,482(6,402)
33(40,393)(689)(14,861)(10,230)(64,607)(82)
47,885
767,894
815,77955¥

176,147
9,352
14,66423,9185,500(12,787)
1,877
(254)
—

40
(26)
—

¥

336
(1,689)451$

See accompanying Notes to Consolidated Financial Statements.
13

SEINO HOLDINGS CO., LTD. and Subsidiaries

Notes to Consolidated Financial Statements
1. Basis of Consolidated Financial
Statements
The accompanying consolidated financial statements of SEINO
HOLDINGS CO., LTD. (the “Company”) and its subsidiaries (together
with the Company, the “Seino Group”) have been prepared in accordancewith the provisions set forth in the Financial Instrument and Exchange
Law of Japan and its related accounting regulations and in conformity withaccounting principles generally accepted in Japan (“Japanese GAAP”),
which are different in certain respects as to application and disclosure
requirements from International Financial Reporting Standards (“IFRS”).
The accompanying consolidated financial statements have been
restructured and translated into English from the consolidated financial
statements of the Company prepared in accordance with Japanese GAAP
and filed with the appropriate Local Finance Bureau of the Ministryof Finance as required by the Financial Instrument and Exchange Law
of Japan. Certain supplementary information included in the statutory
Japanese language consolidated financial statements, but not required
for fair presentation, is not presented in the accompanying consolidated
financial statements.
The translation of the Japanese yen amounts into U.S. dollar amounts
is included solely for the convenience of readers outside Japan, using theapproximate exchange rate prevailing at March 31, 2022, which was ¥122 to
U.S. $1.00. The translation should not be construed as a representation that
the Japanese yen amounts have been, could have been or could in the future
be converted into U.S. dollars at this or any other rate of exchange.

consolidation.
Nonconsolidated subsidiaries are excluded from the scope of
consolidation because they are all small in scale, and any total amount interms of their total assets, operating revenue and profit or loss (amountcorresponding to the Company’s ownership interest) as well as retained
earnings (amount corresponding to the Company’s ownership interest) andothers does not significantly affect the consolidated financial statements.
The consolidated financial statements include the accounts of theoverseas subsidiary prepared under IFRS in accordance with Practical
Issues Task Force (“PITF”) No. 18, “Practical Solution on Unification of
Accounting Policies Applied to Foreign Subsidiaries for Consolidated
Financial Statements,” issued by the Accounting Standards Board of Japan(“ASBJ”).
(b)

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

(c)

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

(d)

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

(e)

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

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

(g)

Property and equipment and depreciation
Property and equipment, including significant renewals and additions,
are stated at cost. Property and equipment of the Company and certain
subsidiaries are depreciated by the straight-line method for buildings andvehicles and by the declining balance method for other property.
Property and equipment of other subsidiaries have been depreciatedprincipally by the declining balance method, except for buildings acquired
on and after April 1, 1998, property held for lease and facilities attached
to buildings and structures acquired on and after April 1, 2016. Buildings
acquired on and after April 1, 1998 and facilities attached to buildings andstructures acquired on and after April 1, 2016 by the domestic subsidiaries
are depreciated by the straight-line method. Some of the subsidiaries
capitalize property for which the cost was not less than ¥100,000 but below¥200,000 and depreciate it over three years on a straight-line basis.
The Seino Group, as lessee, capitalizes assets used under finance leases,

2. Summary of Significant Accounting
Policies(a)Principles of consolidation
The accompanying consolidated financial statements include theaccounts of the Company and all of its subsidiaries. Investments insignificant affiliates are accounted for by the equity method. Investments
in affiliates not accounted for by the equity method are stated at cost.
Differences between the acquisition cost of investments in subsidiaries andthe underlying equity in their net assets, adjusted based on the fair value atthe time of the acquisition, are deferred as goodwill and amortized over theestimated useful life, 5-15 years, on a straight-line basis. All intercompany
transactions and accounts have been eliminated on consolidation.
Under accounting standards for consolidation, a subsidiary is defined as
an enterprise which is controlled by another enterprise and is a majority(more than 50%) owned enterprise or a 40% to 50% owned enterprise thatmeets certain criteria. An affiliated company is defined as an enterprise inwhich the investor has significant influence and is an enterprise other thana subsidiary that is a 20% or more owned enterprise or a 15% to less than
20% owned enterprise that meets certain criteria. For each of the years
ended March 31, 2022, 2021 and 2020, there were six companies that were
not a more than 50% owned enterprise but were nevertheless classified as
subsidiaries based on the judgment of the Company in accordance with theapplicable accounting standards.
The number of subsidiaries and affiliates for the years ended March 31,
2022, 2021 and 2020 was as follows:
Subsidiaries:
Domestic
Overseas
Affiliates accounted for by the equity method
Nonconsolidated subsidiaries
Affiliates stated at cost

2022

2021

2020

76
6
6
1
13

76
6
6
1
14

76
5
6
2
15

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. Futaba
Kogyosho Co., Ltd., the Company’s subsidiary, changed its fiscal year ended
on June 30 to March 31. Significant transactions for the period between
the subsidiary’s year-end and the Company’s year-end are adjusted for on

14

except for certain immaterial or short-term finance leases accounted for as
operating leases. Depreciation of leased assets capitalized in finance leasetransactions as lessee is computed by the straight-line method over thelease term as the useful life with the assumption of no residual value. The
leased property of a certain subsidiary engaged in leasing operations as
lessor is recorded at cost in property and equipment in the accompanying
consolidated balance sheets under operating lease accounting and isdepreciated over the term of the lease contract by the straight-line method
to the amount equal to the estimated disposal value at the lease termination
date.
Expenditures on maintenance and repairs are charged to operating
income as incurred. Upon the disposal of the property, the cost andaccumulated depreciation are removed from the accounts and any gain orloss is recorded as income or expense.
(h)Intangible assets
Intangible assets are amortized on a straight-line basis. Software, whichis included in intangible assets, is amortized using the straight-line method
over the estimated useful life of five years.

(i)

Accounting standard for impairment of fixed assets
The Company and its domestic subsidiaries have adopted the“Accounting Standard for Impairment of Fixed Assets” issued by theBusiness Accounting Council of Japan and the related practical guidanceissued by ASBJ. The standard requires that fixed assets be reviewed for
impairment whenever events or changes in circumstances indicate that thecarrying amount of an asset may not be recoverable. An impairment loss is
to be recognized in the income statement by reducing the carrying amountof the impaired asset or group of assets to the recoverable amount, to bemeasured as the higher of the asset’s net selling price or value in use. Fixed
assets include intangible assets as well as land, buildings and other forms
of property and are to be grouped at the lowest level for which there are
identifiable cash flows distinguishable from other groups of assets. For the
purpose of recognition and measurement of impairment loss, fixed assets
are grouped into cash-generating units, such as operating business branches
other than idle or unused property. The method used to group assets tomeasure impairment of fixed assets in the transportation services segment,
excluding some consolidated subsidiaries, is a method that groups assets by
the entire segment. At March 31, 2022, 2021 and 2020, recoverable amountsof assets were measured based on value in use using discounted future cash
flows at interest rates principally of 3.5%, 4.8% and 8.7%, respectively, or
net selling prices using primarily appraisal valuations. As a result, the Seino
Group recognized impairment loss as follows:
Millions of yen
2022

Property subject toimpairment:

8 businessbranchesand 2 idle
properties

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

2021

2020

1 businessbranch

371 ¥
549
221
1,141 ¥

6 businessbranchesand 1 idle
property

54 ¥
—
—
54 ¥

Thousandsof U.S.
dollars
2022

359 $
129
54
542 $

3,041
4,500
1,811
9,352

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

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

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

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

(m)

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

(n)Accounting for revenue and expenses recognition
The Seino Group has adopted the Accounting Standard for
Revenue Recognition (ASBJ Statement No. 29, March 30, 2020) andthe Implementation Guidance on Accounting Standard for Revenue
Recognition (ASBJ Guidance No. 30, March 26, 2021). In relation torecognition of revenue from contracts with customers, the nature ofprincipal performance obligations for major businesses of the Seino Groupand the typical timing of the satisfaction of those performance obligations(i.e., typical timing of revenue recognition) are as follows:
The Seino Group divides the business segment by products and services
based on the main businesses of each subsidiary into “Transportation
Services Business,” “Vehicle Sales Business,” “Merchandise Sales Business”
and “Real Estate Leasing Services Business”.
The Transportation Services Business is the motor truck transportation
business, home delivery service, house moving service and charter service
mainly for small-lot commercial cargo. In addition, this business includes
the consigned freight forwarding business, and delivery to cargo by using
the various mode of transportation such as airlines, railways, ocean freight,
etc. The Seino Group provides mainly domestic transportation services.
Transportation revenue is recognized as the related performance obligations
are satisfied, as the control of the promised services is continuouslytransferred to the customer.
The Vehicle Sales Business focuses mainly on sales and repair services
for passenger cars and trucks. The performance obligations are satisfied at
the time the related vehicles are registered and owned by the customers.
Regarding new and used vehicles sales, the performance obligations are
satisfied at the time the car is registered, and revenue is recognized as theperformance obligations are satisfied. For installment sales, transaction
prices are based on the contract with the customer that distinguishes
between financial components and other. Interest equivalent, a financial

15

component method, is recognized as revenue based on the contract periodwith the customer, and other transaction prices are recognized as revenue
at the time of inspection. In regard to repair services, the performanceobligations are satisfied at the time of completion of the repair work.
The Merchandise Sales Business sells fuel and paper products. With thesales of products, the time from dispatching the goods until the inspection
process at the customer side is not long. Therefore, the revenue will berecognized at the time the goods are shipped. In fuel sales, transactions oflight oil and delivery tax as agent, the transaction price is calculated basedon the net amount after deducting the amount to be paid to the other party
from the amount of consideration received from the customer.
The Real Estate Leasing Services Business focuses mainly on leasing
car parking, mansions and land used as truck terminals and branches in thepast. We recognize revenue according to the agreement with the customers.
Generally, payment is received within approximately one month fromthe time the performance obligation is satisfied. In the installment sales inthe Vehicle Sales Business, however, payment is generally received within arange of three to five years depending on the agreement.
(o)Income taxes
Income taxes are accounted for by the asset-liability method. Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the carrying amounts of existing assets
and liabilities and their respective tax bases and operating loss carryforwards.
Deferred tax assets and liabilities are measured using the enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.

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

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

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

(s)

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

(t)

16

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
The Company and some of its domestic consolidated subsidiaries willtransition from the consolidated taxation system to the group tax sharing
system from the year ending March 31, 2023. Having regard to Paragraph
3 of the 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), however, the Company
and its domestic consolidated subsidiaries do not follow Paragraph 44 of
Implementation Guidance on Tax Effect Accounting (ASBJ Guidance No.
28, February 16, 2018) but apply provisions of pre-amended tax laws whencalculating the amounts of deferred tax assets and liabilities that relate totransitioning to the group taxation system and related amendments of tax
laws for transitioning to the single tax payment system. Practical Solution
on the Accounting and Disclosure Under the Group Tax Sharing System(PITF No. 42, August 12, 2021), which sets out accounting and disclosureof corporation and local taxes and tax effect accounting under the grouptax sharing system, will be applied from the beginning of the year ending
March 31, 2023.
(u)Changes in accounting policy
Application of Accounting Standards, etc. for Revenue Recognition
The Implementation Guidance on Accounting Standard for Revenue
Recognition (ASBJ Statement No. 29, issued on 31 March 2020, hereinafterreferred to as “Revenue recognition accounting standards”) will be applied
from the beginning of the current fiscal year.
We decided to recognize revenue when the promised goods or services
are transferred to the customer and recognize as revenue the amount
expected to be received at the time of completing the transfer of thepromised goods or service. In the Transportation business, we haverecognized revenue when we received the freight from customer, but forsatisfying the performance obligations, we decided to change the revenue
recognition. Certain subsidiaries have recognized the total sum received
from the customers as revenue. However, we considered the duties related
to providing the goods and the services to the customer and changed fromrecognizing the total sum received from the customer to the net value after
deducting the amount which we have to pay to the third party as an agent.
The application of revenue recognition accounting standards, etc., is inaccordance with the transitional treatment stipulated in Paragraph 84 of therevenue recognition accounting standards.
As a result, on the consolidated statements of income and comprehensive
income for the fiscal year ended March 31, 2022, “Operating revenue”
decreased by ¥15,001 million, “Operating costs” decreased by ¥15,396
million, both “Operating income” and “Income before income taxes”
increased by ¥395 million and “Retained earnings at the beginning balance”
decreased by ¥516 million, “Basic net income per share” increased by ¥1.43
and “Diluted net income per share” increased by ¥1.35 compared with theamounts that would have been reported without the change.
In the consolidated balance sheet for the previous fiscal year, “Trade
receivables,” which were shown in “Current assets,” will be changed from“Trade receivables” and “Contract assets” from the fiscal year ended March
31, 2022. “Other current liabilities,” which was presented in “Current
liabilities,” is now included in “Contract liabilities” and “Other current
liabilities” from the current fiscal year. However, in accordance with thetransitional treatment stipulated in Paragraph 89-2 of the AccountingStandard for Revenue Recognition, no reclassification has been applied forthe previous fiscal year in accordance with the new presentation method.
The impact on segment information is described in the related section.
In accordance with the transitional treatment stipulated in Paragraph89-3 of the Accounting Standard for Revenue Recognition, notes on“Revenue Recognition” related to the previous fiscal year are not included.
Application of Accounting Standard for Fair Value Measurement
The Company has applied the Accounting Standard for Fair Value
Measurement (ASBJ Statement No. 30, July 4, 2019, hereinafter the “Fair
Value Measurement Standard”) and other standards from the beginningof the current fiscal year and will prospectively apply the new accounting
policies stipulated by the Fair Value Measurement Standard, etc., in
accordance with the transitional treatment provided in Paragraph 19 of the
Fair Value Measurement Standard and Paragraph 44-2 of the AccountingStandard for Financial Instruments (ASBJ Statement No. 10, July 4, 2019).
This application has had and is expected to have no significant effect onthe consolidated financial statements. However, in accordance with thetransitional treatment provided in Paragraph 7-4 of the Implementation
Guidance on Disclosures about Fair Value of Financial Instruments (ASBJ
Guidance No. 19, July 4, 2019), notes pertaining to the previous fiscal year
are not presented.
Change in revenue recognition for the sale of vehicles
Toyota Corolla Gifu Co., Ltd. and Netz Toyota Gifu Co., Ltd.,subsidiaries of the Company, have changed their methods of revenue
recognition for new and used vehicles from an installment sales method toa more principle sales basis. This change has been effective from the fiscal
year ended March 31, 2021. The catalyst for the change in accounting policy
was the strengthening of installment sales being positioned as an importantmeasure in the formulation of The New Medium-term Management
Policy, which started from the fiscal year ended March 31, 2021, against abackground of intensifying sales competition with other companies inducedby the beginning of the handling of all models on all four channels of
Toyota dealers. For vehicle sales, installment sales are becoming increasingly
important because the option to purchase vehicles with installment
payments will lead to the acquisition of new customers by offeringpurchasing methods that flexibility respond to customer requirements, suchas residual value type installment payments and deferred payments. It will
also provide an incentive for those customers to purchase from us when it istime for them to replace their vehicles. The risk of bad debts in the advancepayment method and the collection guarantee method, which are currently
the main methods handled, is extremely low, and represents an improvementin business management systems and system structure. Thus, adopting thissales standard will more accurately reflect the profit and loss situation.
As a result, compared with the figures prior to the retroactive applicationof the revised revenue recognition method, the following changes havebeen made. On the consolidated statements of income and comprehensive
income for the fiscal year ended March 31, 2020, “Operating revenue”
decreased by ¥1,499 million, “Operating costs” decreased by ¥1,757 million,
both “Operating income” and “Income before income taxes” increased by¥258 million, “Income taxes deferred” increased by ¥87 million, “Profit
attributable to owners of parent” increased by ¥171 million and “Basic net
income per share” increased by ¥0.85. The impact on segment information
is described in the related sections.
(v)

Accounting policies issued but not yet adopted
Implementation Guidance on Accounting Standard for Fair Value
Measurement (ASBJ Guidance No. 31, June 17, 2021)(i) Outline
With regard to the June 17, 2021 revision to the Implementation
Guidance on Accounting Standard for Fair Value Measurement(ASBJ Guidance No. 31), as of the ASBJ announcement on July4, 2019, consideration regarding the calculation of fair value ofinvestment trusts was expected to require a certain period of time fordiscussions with stakeholders, etc., and notes regarding the fair valueof investments in partnerships, etc., was regarded as requiring a certain
amount of consideration. Therefore, this implementation guidance thatwas to take around one year to consider after the announcement of
the Accounting Standard for Fair Value Measurement was revised andannounced accordingly.
(ii) Scheduled date of application
Scheduled to be applied from the start of the fiscal year ending
March 31, 2023.
(iii) Effect of application
The Company is currently evaluating the effect of applying the
Implementation Guidance on the Accounting Standard for Fair Value
Measurement on its consolidated financial statements.

(w)

Changes in presentation methods
Consolidated Statements of Income
Effective from the fiscal year ended March 31, 2021, “Subsidies for
employment adjustment” and “Commission for purchase of treasury
shares,” which had been included in “Miscellaneous, net” for the fiscal year

ended March 31, 2020, have been presented separately because of theirincreased importance. In addition, “Compensation received for the exerciseof eminent domain” has been included in “Miscellaneous, net” because ofits decreased importance. The Consolidated Statements of Income forthe fiscal years ended March 31, 2020 were reclassified to conform to thechange in presentation. As a result, ¥15 million and ¥96 million recorded
in “Miscellaneous, net” and “Compensation received for the exercise ofeminent domain,” respectively for the fiscal year ended March 31, 2020
were reclassified to “Subsidies for employment adjustment” of ¥12 million,“Commission for purchase of treasury shares” of negative ¥5 million and“Miscellaneous, net” of ¥104 million.
(x)

Additional information(i) Stock Compensation for Directors
The Company has introduced a Board Benefit Trust (“BBT”) for
the Company’s directors, excluding outside directors, (the “Eligible
Directors”). The objective of the plan is to focus the Eligible Directors’
mindset towards enhancing the medium- to long-term corporate valueof the Company by clarifying the link between the compensation of
the Eligible Directors and the Company’s share value so that Eligible
Directors share with the shareholders not only the benefits of rising
share prices, but also the risks associated with falling shares. The Plan isa stock compensation plan whereby the Company’s shares are acquired
through a trust (the trust set up based on the Plan is hereinafterreferred to as the “Trust”) using funds contributed by the Company ascapital, and the acquired shares and money in the amount equivalent
to the value of the Company’s shares converted at market value (the“Company’s Shares, Etc.”) are granted to Eligible Directors throughthe Trust according to their positions or the like, pursuant to thepredetermined Rules on Stock Benefits for Directors. In principle, theCompany’s Shares, etc. are provided to Eligible Directors at the time ofretirement from a position of Eligible Director of the Company.
The shares of the Company held by the Trust were accounted
for as treasury stock under net assets. The assets, liabilities, income
and expenses of the Trust were consolidated in the accompanying
consolidated financial statements. The book value and number ofshares held by the Trust at March 31, 2022 and 2021 were ¥171 million($1,401 thousand) and 87 thousand shares and ¥171 million and 87
thousand shares, respectively.
(ii) The Stock Benefit Trust ( J-ESOP)In the Company and some of its subsidiaries, for the purpose ofenhancing the motivation for rising share prices, the Employee Stock
Ownership Plan ( J-ESOP) for employees who meet the prescribed
requirements has been introduced.
The Stock Benefit Trust ( J-ESOP) is an incentive plan that grants
the Company’s shares to employees of some companies in the groupthat satisfy the requirements of the Policy on Stock Compensationprescribed in advance by the Company. These companies will award
points to Eligible Employees based on their length of service andindividual degree of contribution and the like and will grant the
number of Company’s shares equivalent to the awarded points when
the terms and conditions are met and vested rights are granted. The
shares granted to Eligible Employees, including future shares, will beacquired using cash funds contributed in advance to the trust accountestablished trust & Custody Services Bank, Ltd., and will be managed
separately as trust assets.
In addition, ¥5,634 million was recorded in “Provision for sharebased remuneration” for the fiscal year ended March 31, 2020 because
there was the cost for the points awarded based on length of service
completed by the fiscal year ended March 31, 2019.
The shares of the Company held by the Trust were accounted
for as treasury stock under net assets. The assets, liabilities, income
and expenses of the Trust were consolidated in the accompanying
consolidated financial statements. The book value and number of shares
held by the Trust at March 31, 2022 and 2021 were ¥6,649 million($54,500 thousand) and 4,611 thousand shares and ¥6,822 million and
4,731 thousand shares, respectively.

17

(iii) Employee Shareholding Incentive Plan (E-Ship®)
The Company has introduced an Employee Shareholding
Incentive Plan (E-Ship®) for the welfare of its employees. The planis an incentive plan that covers all employees participating in the
Shareholding Association.
Under the plan, the Company, as the trustor, entered into a specified
trust cash funding agreement (the “E-Ship Agreement”) with a trustbank as trustee to set up the trust (the “E-Ship Trust”). The E-Ship
Trust purchases the number of shares of the Company that the
Shareholding Association expects to purchase over the next four years
and subsequently sells them periodically over a four-year period to the
Shareholding Association in accordance with certain conditions andmethods stipulated in the E-Ship Agreement. At the end of the trust
period, the E-Ship Trust’s retained earnings, the accumulation of net
gain on sales of its shares, are distributed to the eligible employees inaccordance with the E-Ship Agreement. For its part, the Company
guarantees any retained loss and the accumulation of net loss on thesales of its shares and will pay off any amount of outstanding debt at
the end of the trust period as it guarantees the debt of E-Ship Trust.
The shares of the Company held by the E-Ship Trust are accounted
for as treasury stock under net assets. The assets, liabilities, income andexpenses of the E-Ship Trust were consolidated in the accompanying
consolidated financial statements. The book value and number ofshares held by the E-Ship Trust at March 31, 2022 was ¥1,813 million($14,861 thousand) and 1,590 thousand shares. The book value of bankloans of the E-Ship Trust recorded in the consolidated balance sheet asof March 31, 2022 was ¥1,821 million ($14,926 thousand).

3. Financial Instruments(a) Qualitative information on financial instruments(i) Policies on financial instruments
The Seino Group has implemented a Cash Management Systemfor effective investments and funding. Pursuant to this system, theCompany invests in short-term, low-risk instruments in accordancewith its internal fund management rules. The Company procures
funds mainly through financing such as bank loans and the issuanceof convertible bonds for investments in facilities, taking immediateliquidity into consideration.
(ii) Details of financial instruments and Risks
Trade receivables are exposed to the credit risk of customers. Someof the subsidiaries have receivables in foreign currency and are exposed
to foreign currency fluctuation risk.
Marketable and investment securities, which consist of held-tomaturity securities and equity securities of business entities with which
the Seino Group has business relationships, are exposed to stock
market fluctuation risk.
Trade payables have general terms and conditions and are mostly
due within one year. However, some of the subsidiaries have trade
payables denominated in foreign currency, which exposes them toforeign currency fluctuation risk.
Some bank loans and convertible bonds are used principally forcapital investments and are partially exposed to interest rate fluctuation
risk.
(iii) Risk Management for Financial Instruments
Monitoring of credit risk
In accordance with internal policies for credit risk management, eachsubsidiary monitors the creditworthiness of its customers and manages
the terms and conditions of payment, due dates and remaining balances
to reduce credit risk. With held-to-maturity securities, the Company
invests in bonds that have been highly rated by credit rating agencies
in accordance with its internal fund management rules. As a result, therisk is insignificant.

18

Monitoring market risk
The Board of the Directors regularly monitors market risk
using management methods which comply with internal market
risk management rules. For marketable securities, the Seino Group
monitors market prices every quarter and reviews the market conditions
and the financial position of and business relationship with the issuers.
Monitoring liquidity risk
The Company has a Cash Management System with its subsidiaries
and becomes the paying agent for the subsidiaries under the system.
The subsidiaries report their cash flow projections to the Company.
The Company has sufficient bank credit lines, including credit lines
with overdraft facilities, enabling the Seino Group to manage liquidity
risk.
(iv) Supplemental information on fair values
The fair value of financial instruments reflects variable factors and is,therefore, subject to change depending on different assumptions used.
(b) Fair values of financial instruments
The fair and carrying values of the financial instruments included in the
consolidated balance sheets at March 31, 2022 and 2021 other than thosefor which the fair value was extremely difficult to determine, are set forth in
the table below.

At March 31, 2022:(*2)
Short-term investments
Investment securities
		Total assets
Convertible bonds
Long-term bank loans
			Total liabilities

At March 31, 2021: (*3)
Short-term investments
Investment securities
			Total assets
Convertible bonds
Long-term bank loans
			Total liabilities

Carrying value

Fair value
Millions of yen

¥

8,964
36,60945,573¥25,2009,821
35,021

¥

¥
¥
¥

¥

¥

Convertible bonds
Long-term bank loans
			Total liabilities

¥—
—
¥—

24,775
9,716
34,491¥(425)
(105)
¥
(530)

Fair value
Millions of yen

¥

9,371
37,54846,919¥25,2508,280
33,530

¥

¥
¥

¥

¥

Carrying value
At March 31, 2022: (*2)
Short-term investments
Investment securities
			Total assets

8,964
36,60945,573Carrying value¥

Difference

Difference

9,371
37,54846,919¥——¥—

25,7758,156
33,931

¥525
(124)
¥
401

Fair value

Difference

Thousands of U.S. dollars$$$$

73,475300,074
373,549$

206,557
80,500287,057$$$

73,475300,074
373,549$——$—

203,074
79,639282,713$(3,483)(861)$(4,344)Note 1: Cash and cash equivalents, trade receivables, short-term borrowings,
trade payables and the current portion of long-term bank loans areomitted because they are stated at the carrying amount as these aresettled in the short term and with fair values approximately equal
to the carrying amount.
Note 2: Unlisted equity securities and investments in partnerships stated at
the amount of net assets attributed to the ownership percentage are
not included in the table above for the year ended March 31, 2022.
Note 3: Investments that's fair values were extremely difficult to determine
are not included in the table above for the year ended March 31,2021.

(i) The following were unlisted equity securities and investments inpartnerships stated at the amount of net assets attributed to theownership percentage:
Thousands of
U.S. dollars
2022

Millions of yen

2022

2021

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

¥
¥

1,766
1,762
3,528

¥
¥

1,672
1,854
3,526

$
$

14,475
14,443
28,918(ii) The redemption schedule for financial assets with maturities at
March 31, 2022 was as follows:

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

¥—
—
—
¥—

Total
¥36,416
3,119
11,000¥50,535

99,525
8,964
88,342¥——29,668

¥—
—
639

¥—
—
—

—
196,831

¥

—
639

—
¥—

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

Investment trusts were not included in the table above. The amount of
the investment trusts reported in the consolidated balance sheet was ¥74
million ($607 thousand) in financial assets.

Due
after
10 years(ii) F inancial instruments other than those recorded on the consolidatedbalance sheets at fair value

93,683
9,371
88,961¥——30,687

¥—
—
754

¥—
—
—

—
192,015

¥

—
754

—
¥—

128
29,796116
30,803¥¥

Level 1Thousands of U.S. dollars
Level 2
Level 3At March 31, 2022:
Investment securities
		Equity securities $ 298,492 $——		Bonds
25,566—
90,164
		Other				 Total assets $ 298,492 $ 115,730

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

$—
—
—
$—

Millions of yen
Level 2
Level 3
¥24,775
9,716¥ 34,491

¥—
—
¥—

Thousands of U.S. dollars
Level 2
Level 3Total
$ 298,492
25,566
90,164$ 414,222

Total¥ 24,775
9,716¥ 34,491

Total

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

At March 31, 2022:
Convertible bonds$——Long-term bank loans
			Total liabilities $—$——
243,180

$—
—
5,238

$—
—
—

Note: Valuation Techniques and Inputs Used in Calculating Fair Value

1,049$ 244,229

$

—
5,238

—
$—

At March 31, 2022:
Cash and cash equivalents $815,779
Short-term investments
73,475Trade receivables
724,115
Investment securities—– bonds and other$ 1,613,369(iii) For the repayment schedule for long-term bank loans at March 31,
2022, see Note 9, “Short-term Borrowings and Long-term Debt.”(c)

At March 31, 2022:
Investment securities
		Equity securities ¥		Bonds
		Other				 Total assets ¥Level 1Due
after
10 years

Due within
1 year
At March 31, 2021:
Cash and cash equivalents ¥Short-term investments
Trade receivables
Investment securities– bonds and other¥(i) F inancial instruments recorded on the consolidated balance sheet atfair value

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

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

When multiple inputs that have a significant effect on the fair value
calculation are used, the fair value is classified into the lowest level fromwhich significant inputs were used.

Classification and breakdown of the fair value of financial
instruments
The fair value of financial instruments is classified into the following
three levels based on the observability and materiality of the inputs used to
calculate the fair value.
Level 1: Fair value based on observable (unadjusted) quoted market prices
in active markets for identical assets or liabilities.
Level 2: Fair value calculated using inputs other than Level 1 inputs thatare directly or indirectly observable.
Level 3: Fair value calculated using significant unobservable inputs$ 203,074
79,639$ 282,713

$—
—
$—

$ 203,074
79,639$ 282,713

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

19

4. Inventories
Inventories at March 31, 2022 and 2021 were as follows:
Millions of yen

Merchandise and finished products
Work in process
Raw materials and supplies

2022
¥
9,760
681
796
¥ 11,237

2021¥ 11,335
1,492
717¥ 13,544

Thousands of
U.S. dollars
2022$ 80,000
5,582
6,524
$ 92,106

Equity securities of affiliates andnonconsolidated subsidiaries
Investments in partnerships ofnonconsolidated subsidiaries

Millions of yen

2021

Thousands of
U.S. dollars
2022¥

17,001¥

15,127$ 139,353¥

3,630
20,631¥

2,738
17,865$2022

6. Property and Equipment
At March 31, 2022 and 2021, property and equipment consisted of thefollowing:

5. Investments
At March 31, 2022 and 2021, short-term investments consisted of thefollowing:
Millions of yen

2022

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

—
—
8,964
8,964

2021

¥

¥

600
600
8,771
9,371

Thousands of
U.S. dollars
2022
$

$

—
—
73,47573,475

2021

Thousands of
U.S. dollars
2022

37,367112
70
37,5493,525
41,074$ 298,492
967
615
300,074
28,918$ 328,992

Millions of yen

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

2022¥

36,416118
75
36,6093,528¥ 40,137¥¥

Marketable securities classified as available-for-sale are stated at fairvalue with unrealized gains and losses excluded from current earnings andreported as a net amount within the net assets account until realized. At
March 31, 2022 and 2021, gross unrealized gains and losses for marketablesecurities classified as available-for-sale were as follows:
Cost

At March 31, 2021:
Equity securities
Bonds
Other

At March 31, 2022:
Equity securities
Bonds
Other

¥
¥
¥
¥

Gross
Gross
unrealized unrealized
gains
lossesMillions of yen

15,065109
27
15,201¥

15,041
109
627
15,777¥¥¥

21,8669
48
21,923¥22,5613
43
22,607¥¥¥

Fair andcarrying
value(515) ¥ 36,416
—
118
—
75
(515) ¥ 36,609(235) ¥——
(235) ¥

37,367112
670
38,149Thousands of U.S. dollars$ 123,483
893
222$ 124,598$ 179,230
74
393$ 179,697$$(4,221) $ 298,492
—
967
—
615
(4,221) $ 300,074

At March 31, 2022 and 2021 investments in and long-term loans toaffiliates and nonconsolidated subsidiaries consisted of the following:

20

Thousands of
U.S. dollars
2022

Millions of yen

At March 31, 2022 and 2021, investment securities consisted of thefollowing:

At March 31, 2022:
Equity securities
Bonds
Other

29,754
169,1072022

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

2021

¥ 185,077 ¥ 184,672 $ 1,517,025
310,519
297,141
2,545,238
114,468
111,823
938,262
50,35247,726
412,721
4,623
6,205
37,89315,09013,654
123,689
680,129
661,2215,574,828(338,449)(326,616)(2,774,172)
Less accumulated depreciation
		 Total property and equipment ¥ 341,680 ¥ 334,605 $ 2,800,656

One of the consolidated subsidiaries elected to carry out a one-timerevaluation to restate the cost of land used for business operations at values
reassessed on March 31, 2002, reflecting adjustments for land shape andother factors based on appraisal values issued by the Japanese National
Tax Agency in accordance with the Law Concerning Revaluation ofLand. According to the law, the excess of the original book value over
the reassessed value, net of the tax effect and minority interest portions,is recorded in net assets as land revaluation decrement account in theaccompanying consolidated balance sheets. At March 31, 2022 and 2021,
the difference between the carrying values of land used for business
operations after revaluation over the current market values of the land at
the fiscal year-end amounted to ¥1,851 million ($15,172 thousand) and¥2,099 million, respectively.

7. Real Estate for Rent
Some of the Company’s subsidiaries own land and facilities for rent at
locations where the business branches were closed or redeployed branches
used to be. The carrying values in the consolidated balance sheets, changes
during the years ended March 31, 2022 and 2021 and the fair values of therental properties were as follows:
Millions of yen

Carrying value at the beginning of year ¥Net changes during the year¥
Carrying value at the end of year
Fair value at the end of year *¥2022
18,242
1,422
19,66427,5692021
17,057
1,185¥ 18,242¥ 26,155¥

Thousands of
U.S. dollars
2022$ 149,524
11,656$ 161,180$ 225,975

Note: * F air value was measured at the estimated value based principally on areal estate appraisal or property tax bases.
Profit and loss recorded for rental properties for the fiscal years ended
March 31, 2022 and 2021 were as follows:
Millions of yen

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

¥

¥

2022
2,013
512
1,501

¥

(402) ¥

2021
1,865
378
1,487
—

Thousands of
U.S. dollars
2022$ 16,500
4,197
12,303$(3,295)

8. Asset Retirement Obligations
Asset retirement obligations are based upon estimated future restoration
obligations pursuant to real estate lease agreements and land leasehold rights
agreements mainly for logistics terminals. The asset retirement obligations
are calculated based upon the useful life designated by law or the estimateduseful life period and are discounted by the yield rate of government bonds.
Asset retirement obligations for the years ended March 31, 2022 and2021 were as follows:
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

2022
¥
3,628
8
44

¥

2021
¥
3,589
1
44

44
(7)
—
3,717 ¥

Thousands of
U.S. dollars
2022$ 29,738
65
360

43
361
(38)
(57)
(11)
—
3,628 $ 30,467

9. Short-term Borrowings and Long-term Debt

At March 31, 2022 and 2021, respectively, the following assets were
pledged as collateral for certain long-term debt:

Unsecured bank overdrafts with interest
rates ranging from 0.257% to 0.975%¥
per annum at March 31, 2022
Secured bank overdrafts with interest rates
0.900% per annum at March 31, 2022
Short-term bank loans, unsecured withinterest rates ranging from 0.175%
to 2.950% per annum at March 31, 2022
¥

2022

430

2021

¥

430

50
2,761
3,241

Thousands of
U.S. dollars
2022
$

100

¥

3,941
4,471

3,524
410

$

22,631
26,565At March 31, 2022, the Company and certain subsidiaries had unsecured
overdraft agreements with 12 banks. Under the agreements, the Company
and the subsidiaries were entitled to withdraw up to ¥37,380 million($306,393 thousand). The Company and the subsidiaries were not obligatedto pay commitment fees on the unused portions of the overdraft facilities.
At March 31, 2022 and 2021, long-term debt consisted of the following:
2021

Thousands of
U.S. dollars
2022

25,250$Millions of yen

Zero coupon convertible bonds due
March 2026, including unamortizedpremiums (¥200 million ($1,639
thousand) at March 31, 2022)
Loans from government agencies andbanks, repayable through 2035, withinterest rates ranging from 0.210% to
2.448% per annum at March 31, 2022:
		Secured
		Unsecured
Capitalized lease obligations
Less current portion

2022¥ 25,200¥

206,557

Thousands of
U.S. dollars
2022

1,117
413
—
—

$

2022
Land
Buildings and structures
Cash and deposits
Shares of subsidiaries and associates
Long-term loans receivable fromsubsidiaries and associates

¥

2021

¥

3,261
1,007
1,355
1,133

—

9,156
3,385
—
—

350

—

The aggregate annual maturities of long-term debt as of March 31, 2022
were as follows:Year ending March 31,
2023
2024
2025
2026
2027
Thereafter

At March 31, 2022 and 2021, short-term borrowings consisted of thefollowing:
Millions of yen

Millions of yen

Millions of yen
¥
2,603
2,290
2,000
28,662
1,724
9,448
¥
46,727

Thousands of U.S.
dollars$
21,336
18,771
16,393234,934
14,131
77,443$383,008

10. Commitment Line Agreement
Consolidated subsidiary Kanto Transportation Co., Ltd. had acommitment line agreement of ¥1,000 million as of March 31, 2021 toensure its access to financing. The Company also had a commitment line
agreement of ¥50,000 million as of March 31, 2021. These commitmentline agreements had been canceled and terminated, respectively, as of the
fiscal year ended March 31, 2022.

11. Financial Covenants
Consolidated subsidiary Kanto Transportation Co., Ltd. was a party to a
syndicated loan agreement and commitment line agreement that included
the following financial covenants.
1.	The operating loss on a consolidated basis of Kanto Transportation
Co., Ltd. before amortization of goodwill is allowed on the profit andloss 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,
noncontrolling interests and deferred gains and losses on hedges) on
the balance sheets on a consolidated basis of Kanto Transportation
Co., Ltd. is required to be equal to or greater than 80% of equity on
the balance sheet as of the previous fiscal year at March 31, 2017 orlater.
Remaining balances of debt were as follows:
Millions ofyen

580
10,462
10,68546,927(2,603)¥ 44,324 ¥

8,478

768
9,982
44,478(2,187)42,291 $

4,754

85,75587,582
384,648(21,336)
363,312Current portion of long-term debt
Long-term debt

2021
800
7,500
¥ 8,300¥

21

12. Employee Retirement Benefits
The Company and its subsidiaries have mainly unfunded defined
benefit plans with rules and regulations determined by the Company andeach subsidiary. In addition, some subsidiaries have Smaller Enterprise
Retirement Allowance Mutual Aid or Specific Retirement Allowance
Mutual Aid. Also, the Company and certain subsidiaries have defined
contribution plans.
Other subsidiaries have funded defined benefit plans. One company
belongs to a comprehensive employee pension fund for the defined benefit
corporate pension plan. One company has established a retirement benefit
payment trust. Some of the consolidated subsidiaries have joined a multiemployer welfare pension fund plan. Those for which it is impossible tocalculate in a rational manner the amount of the pension assets whichcorresponds to the amount of the contributions are accounted for in thesame way as the defined contribution pension plan. The retirement benefit
obligation of certain subsidiaries was calculated using the simplified method
as permitted by the accounting standard for employee retirement benefits.
As of and for the year ended March 31, 2022 and 2021, defined benefit
plans, including plans applying the simplified method were as follows:(a) Movements in retirement benefit obligation:
Thousands of
U.S. dollars
2022
2021
2022
¥ 85,852 ¥ 84,213 $ 703,705
4,310
4,347
35,328
196
193
1,607
(70)
537
(574)
(2,866)(3,382)(23,492)(650)(52)(5,328)20(4)164¥ 86,792 ¥ 85,852 $ 711,410
Millions of yen

At the beginning of year
Service cost
Interest cost
Actuarial differences
Benefits paid
Past service cost
OthersAt the end of year(b) Movements in plan assets:
Thousands of
U.S. dollars
2022
2021
2022
At the beginning of year¥
4,413 ¥
4,429 $ 36,172
Actuarial differences
179
103
1,467
Contributions paid by the employer
2
2
16
(130)
(121)
(1,065)
Benefits paid
¥ 4,464 ¥4,413 $ 36,590
At the end of year
Millions of yen(c) Reconciliation from retirement benefit obligation and plan assets toemployee retirement benefit asset or liability:
Thousands of
U.S. dollars
2022
2021
2022
Funded retirement benefit obligation ¥7,737 ¥
7,853 $ 63,418
Plan assets(4,464)(4,413)(36,590)
3,273
3,440
26,828
Unfunded retirement benefit obligation
79,05577,999647,992
Net employee retirement benefit liability ¥ 82,328 ¥ 81,439 $ 674,820
Millions of yen

Employee retirement benefit liability
82,328—
Employee retirement benefit asset
Net employee retirement benefit liability ¥ 82,328¥

81,439—81,439674,820—$ 674,820(d) Net periodic retirement benefit expenses, including plans applying
the simplified method:
Thousands of
U.S. dollars
2022
2021
2022
Service cost¥
4,310 ¥
4,347 $ 35,328
Interest cost
196
193
1,607
Amortization of actuarial differences
1,237
1,406
10,139
(86)
(71)
(705)
Amortization of past service cost
5,657 ¥
5,875 $ 46,369
Net periodic retirement benefit expenses ¥Millions of yen(e) Retirement benefit adjustment included in other comprehensive
income, before tax effects:
Thousands of
U.S. dollars
2022
2021
2022
¥
(564) ¥
19 $
(4,623)(1,485)(972)(12,172)¥ (2,049) ¥(953) $ (16,795)
Millions of yen

Past service cost
Actual differences
Total balance(f ) Retirement benefit adjustment in accumulated other comprehensive
income, before tax effects:
Thousands of
U.S. dollars
2022
2021
2022
Past service cost yet to be recognized ¥ (1,006) ¥(442) $
(8,246)
Actuarial differences yet to be recognized
6,002
7,488
49,197
Total balance¥
4,996 ¥
7,046 $ 40,951
Millions of yen(g) Plan assets(i) Plan assets comprise:Cash and cash equivalents
Bonds
Equity securities
Total*

2022
10%
1%
89%
100%

Percent

2021
12%
1%
87%
100%

Note: * F or the fiscal years ended March 31, 2022 and 2021, the assets of theretirement benefit payment trust constituted 98% of total plan assets.
(ii) Long-term expected rate of return
Current and target asset allocations, historical and expected
returns on various categories of plan assets have been considered indetermining the long-term expected rate of return.
(h) Actuarial assumptions
The principal actuarial assumptions (expressed as weighted averages):
Discount rateLong-term expected rate of return2022(mainly) 0.1%
0.0%

2021
(mainly) 0.1%
0.0%(i) Defined contribution plan
Required contributions to the contribution plans of the Company andcertain consolidated subsidiaries were ¥359 million ($2,943 thousand) and¥312 million for the years ended March 31, 2022 and 2021, respectively.

13. Contingent Liabilities
At March 31, 2022 and 2021, the Seino Group was contingently
liable for trade notes and discount notes endorsed to affiliates and third
parties and for guarantees, including substantial guarantees, principally ofindebtedness of third parties in the aggregate amount of ¥1,100 million($9,016 thousand) and ¥1,002 million, respectively.

2214. Lease Commitments

16. Revenue Recognition

As lessee, the Seino Group has entered into various rental and leaseagreements for land and buildings to be used for truck terminals andwarehouses that are generally cancelable with a few months advance notice,
except for certain operating lease agreements. The aggregate minimum
future lease payments for such noncancelable operating lease agreements,
including the imputed interest portion, as lessee at March 31, 2022 and2021 were as follows:

Operating leases:
Due within one year
Due after one year

Millions of yen

2021

Thousands of
U.S. dollars
2022

1,594
12,323
13,917

1,032
8,388
9,420

$ 13,066
101,008$ 114,074

2022
¥
¥

¥
¥

A certain subsidiary engaged in leasing operations as lessor enters into
various lease agreements with third parties principally for vehicles. The
leases are categorized as operating leases. At March 31, 2022 and 2021, theaggregate future minimum lease commitments to be received for such noncancelable lease agreements, including the imputed interest, were as follows:

Operating leases:
Due within one year
Due after one year

Millions of yen

Thousands of
U.S. dollars
2022

402
2,584
2,986

$

2022
¥
¥

2021

¥
¥

393
2,754
3,147

3,295
21,180$ 24,475(a) Disaggregating revenue from contracts with customers
The disaggregation of revenue from contracts with customers is describedin the segment section.
(b) Basis for understanding revenue arising from contracts with customers
The Seino Group recognizes revenue by applying the following five-step
approach.
Step 1: Identify the contract with the customer.
Step 2: Identify the performance obligations in the contract.
Step 3: Determine the transaction price.
Step 4: Allocate the transaction price to the performance obligations in thecontract.
Step 5: Recognize revenue when (or as) the entity satisfies a performanceobligation.
Basic information in understanding revenue is as stated in Note 2(n),“Accounting for revenue and expense recognition.”(c) The satisfaction of performance obligations based on the contracts withcustomers and cashflows arising from such contracts and the amountand timing of revenue arising from contracts with customers existing at
the end of the current fiscal year expected to be recognized in and after
the following fiscal year(i) Contract asset and contract liability balancesMillions of yen

15. Net Assets
Under the Japanese Corporate Law (the “Law”) and regulations, theentire amount paid for new shares is required to be designated as common
stock. However, a company may, by a resolution of the Board of Directors,
designate an amount not exceeding one half of the price of the new sharesas additional paid-in capital, which is included in capital surplus.
Under the Law, in cases in which a dividend distribution of surplus ismade, the smaller of an amount equal to 10% of the dividend or the excess,if any, of 25% of common stock over the total of additional paid-in capitaland legal earnings reserve must be set aside as additional paid-in capitalor legal earnings reserve. Legal earnings reserve is included in retained
earnings in the accompanying consolidated balance sheets.
Under the Law, legal earnings reserve and additional paid-in capital
could be used to eliminate or reduce a deficit by a resolution of theshareholders' meeting. Additional paid-in capital and legal earnings reserve
may not be distributed as dividends. All additional paid-in capital andall legal earnings reserve may be transferred to other capital surplus andretained earnings, respectively, which are potentially available for dividends.
At March 31, 2022 and 2021, 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 ($34,934
thousand) at March 31, 2022 and 2021.
The maximum amount that the Company can distribute as dividends
is calculated based on the non-consolidated financial statements of theCompany in accordance with Japanese laws and regulations.
During the year ended March 31, 2022, the Company paid interim
dividends of ¥11 per share, amounting to ¥2,060 million ($16,885
thousand). In addition, at the annual shareholders’ meeting held on June 28,2022, the shareholders approved cash dividends of ¥18 per share, amounting
to ¥3,371 million ($27,631 thousand). The appropriation had not been
accrued in the consolidated financial statements as of March 31, 2022 assuch appropriations are recognized in the period in which they are approvedby the shareholders.

2022

Receivables from contracts withcustomers beginning balance
Receivables from contracts withcustomers ending balanceContract assets beginning balanceContract assets ending balanceContract liabilities beginning balanceContract liabilities ending balance¥

118,038
118,650
366
1,051
4,371
3,631

Thousands of U.S.
dollars
2022$

967,525
972,541
3,000
8,615
35,82829,762

The amount of revenue recognized in the current period fromperformance obligations that were satisfied in prior periods was ¥3,396
million ($27,836 thousand).
Contract assets consist mainly of unbilled work-in-progress receivables
related to revenue recognized based on the progress in the softwareand construction business. In addition, Contract assets are increased by
the recognition of revenue and decreased by the transfer to receivables
arising from contracts with customers when the Companies’ rights to theconsideration become unconditional upon invoicing or delivery. Contract
liabilities consist primarily of advances received from customers on car
sales and repair services. Contract liabilities are increased by the receipt ofadvances from customers and decreased by the reversal of such advances
upon the recognition of revenue.
(ii) Transaction price allocated to remaining performance obligations
Year ending March 31,
2023
2024
2025
Thereafter
Total

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

Thousands of U.S.
dollars
2022$
18,066
4,148
1,393
16
$
23,62323

At the end of the current fiscal year, the total transaction price allocatedto unsatisfied performance obligations was ¥2,882 million ($23,623
thousand). The transaction price was mainly for car repair service contracts
in the Vehicle Sales Business, in which revenue is expected to be recognizedat each six-month legally mandated inspection. The initial contract period
is for three years, followed two-year periods.
The Company and its consolidated subsidiaries apply the practical
expedient to transaction prices allocated to the remaining performanceobligations of one year or less and long-term contracts of the Transportation
Services Business and have the right to receive amounts of considerationthat correspond to the value to the customer for the portion of performancecompleted to date.
Therefore, pursuant to Paragraph 19 of the Implementation Guidanceon Accounting Standard for Revenue Recognition, revenue is recognizedat the amount the companies are entitled to claim and is not presented.
In addition, there are no material amounts of consideration arising fromcontracts with customers that are not included in the transaction prices.

Percentage of pretax
income
2022
2021
29.9%
29.9%

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
Other
Effective income tax rate

0.2
(0.2)
2.5
2.0
(1.6)
0.3

0.2
(0.5)
2.6
1.9
(0.5)
1.3

4.2
0.4
37.7%

4.2
(0.1)
39.0%

18. Comprehensive Income

17. Income Taxes
The tax effects of temporary differences that give rise to a significant
portion of deferred tax assets and liabilities at March 31, 2022 and 2021
were as follows:
Millions of yen

2022

2021

Thousands of
U.S. dollars
2022

Deferred tax assets:
Employee retirement benefit liability ¥ 28,608 ¥ 28,356 $ 234,492
Enterprise tax accruals
570
394
4,672
Accrued bonuses
4,045
4,039
33,156
Intercompany capital gains
1,314
1,301
10,771
Operating loss carryforwards
854
811
7,000
Loss on assets transferred
1,957
1,807
16,041
Impairment loss on fixed assets
12,343
12,208101,172
Allowance for doubtful accounts
231
202
1,893
6,656
6,854
54,557
Other
56,57855,972
463,754(15,241)(15,096)(124,926)
Less valuation allowance
41,33740,876
338,828
Deferred tax liabilities:
Deferred capital gains
8,540
8,599
70,000
Unrealized gains on available-forsale securities
6,240
6,447
51,148Valuation adjustments forconsolidation
11,221
11,214
91,9753,553
3,701
29,123Other
29,55429,961
242,246¥ 11,783 ¥ 10,915 $
96,582
Net deferred tax assets

In assessing the realizability of deferred tax assets, management of the
Seino Group considers whether some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets
is dependent upon the generation of the future taxable income during theperiods in which those temporary differences become deductible. At March
31, 2022 and 2021, a valuation allowance was provided to reduce deferred
tax assets to the extent that the management believed that the amount of
the deferred tax assets was not realizable.

24

The reconciliation of the statutory tax rate and the effective tax rate forthe years ended March 31, 2022 and 2021 was as follows:

Amounts reclassified to net income (loss) in the current period thatwere recognized in other comprehensive income in the current or previous
periods and the tax effects for each component of other comprehensive
income for the years ended March 31, 2022, 2021 and 2020 were as follows:

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

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

2022

Millions of yen
2021

2020

Thousands of
U.S. dollars
2022(854) ¥ 8,453 ¥ (4,090) $(22)(1,034)
300
(876)
7,419
(3,790)207(2,036)
996
(669)
5,383
(2,794)

49
—
49
—
49

2022

(51)
—
(51)
—
(51)

45
—
45
—
45

402
—
402
—
402

2021

2020

Thousands of
U.S. dollars
2022

(382)
1,335
953
(326)
627

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

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

(7,000)(180)(7,180)
1,696(5,484)

Shares of other comprehensive
income of affiliates accounted forusing equity method:
Increase (decrease) during the year
608
(73)
(88)
(54)
15
(4)
Reclassification adjustments
Subtotal
554
(58)
(92)
		Total other comprehensive income ¥ 1,279 ¥ 5,901 ¥ (4,019) $

7,369
9,426
16,795(5,771)
11,024

4,984
(443)
4,541
10,483

19. Business Combinations
Acquisition of equity interest in subsidiary
The Board of Directors meeting held August 7, 2020 determined that
the Company 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(2) Schedule
April 1, 2022 resolution date of Board of Directors regarding
the merger and the companies concerned in the absorption-typemerger.
April 1, 2022 is the execution date of contract.
(3) Date of Business Combination
April 1, 2023 is the planned business combination date.

(1) Name and business description of acquired company
Name of acquired company: Kanto Transportation Co., Ltd.
Description of business: Transportation services(4) Name of the company after Business Combination
Seino Transportation Co., Ltd. will be the name of the company
after the business combination.

(2) Date on which business combinations was effectAugust 27, 2020(5) Other matters related to the transaction
The Company owns all the shares of the surviving company andthe absorbed companies. Therefore, the Company will neither
issue new shares nor allot outstanding shares in this businesscombination.

(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
noncontrolling shareholders under common control, based on ASBJ
Statement No. 21, “Accounting Standard for Business Combinations”
and ASBJ Guidance No. 10, “Guidance on Accounting Standard
for Business Combinations and Accounting Standard for Business
Divestitures,” issued on September 13, 2013.

2. Overview of accounting treatment
The purpose of this merger is the optimization of transportation
efficiency by restructuring the trunk line diagram.
Pursuant to the Accounting Standard for Business Combinations(Accounting Standards Board of Japan (ASBJ) Statement No.
21, issued on January 16, 2019 and the Guidance on AccountingStandard for Business Combination and Accounting Standard forBusiness Divestitures (ASBJ Guidance No. 10, issued on January 16,2019), the absorption-type merger will be treated as a transaction
under common control.

3. Details to be reported in the acquisition of equity interest in
subsidiary
The acquisition price is not disclosed due to the confidentiality
obligation of 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 ¥2,124 million

20. Subsequent Events(Merger among consolidated subsidiaries)
At the meeting of the Board of Directors held on April 1, 2022, Seino
Transportation Co., Ltd. resolved to conduct an absorption type merger,
with Seino Transportation Co., Ltd. as the surviving company and Kanto
Seino Transportation Co., Ltd. Nohi Seino Transportation Co., Ltd. andTokai Seino Transportation Co., Ltd., as the absorbed companies.
1. Overview of the transaction(1) Names and businesses of the combining Companies
Name of the surviving Company: Seino Transportation Co., Ltd.
Business: Transportation services
Names of the absorbed Companies: Kanto Seino Transportation
Co., Ltd., Nohi Seino Transportation Co., Ltd., Tokai Seino
Transportation Co., Ltd.
Business: Transportation services

2521. Segment Information
(a)

(b)
(c)

General information about reportable segments
The reportable segments are constituent business units of the Seino Group for which separate financial information is obtained and examined regularly by the
Board of Directors to evaluate business performance. The Seino Group has established the “Business Promotion Department” as a holding company. Each subsidiaryplans and operates each business under its control. In addition, some of the subsidiaries engage in real estate leasing services to make good use of their facilities.
Therefore, the Seino Group consists of business segments that are based on the business conducted by each subsidiary. The Seino Group’s reportable segments are“transportation services,” “vehicle sales,” “merchandise sales” and “real estate leasing services.”
Basis of measurement about reportable segment profit or loss, segment assets and other material items
The principles of segment accounting are basically the same as those described in Note 2, “Summary of Significant Accounting Policies.” Intersegment sales andtransfer amounts are based on market prices.
Information about reportable segment profit or loss, segment assets and other material items and information about the disaggregation of revenue fromcontracts with customers
Information about reportable segment for the years ended March 31, 2022, 2021 and 2020 is summarized as follows:

Transportation Vehicle sales
services (*6)(*5)
For the year 2022:
Operating revenue:
		Revenue from contracts with customers ¥452,453 ¥
96,907
		Other revenue
800
1,314
		External customers
453,253
98,221
		 Intersegment sales and transfers
1,978
10,918
			Total operating revenue
455,231
109,139
Segment income (*2)¥
21,108 ¥4,491

Real estateleasing services

Other (*4, 6)

Total

Adjustments(*1)

Consolidated¥

30,754 ¥—30,754
13,52744,281789 ¥Millions of yen— ¥23,111 ¥
2,013
306
2,013
23,417
—
9,402
2,013
32,8191,509 ¥
1,194 ¥

603,225 ¥4,433
607,658
35,825643,483
29,091 ¥— ¥——(35,825)(35,825)(1,545) ¥603,225
4,433
607,658—
607,658
27,546¥

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

528,218 ¥
18,978
1,559

119,782 ¥2,038
1

17,120 ¥62—

19,631 ¥
182—

50,760 ¥663
229

735,511 ¥21,923
1,789(50,244) ¥(433)—

685,267
21,4901,789

16,691
28,685

81
4,005

—
46

—
931

—
728

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

16,77033,768¥441,091 ¥1,852
442,943
18,375 ¥513,548 ¥17,973
1,409

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

31,034 ¥14,64745,681732 ¥
15,772 ¥64—

1,865 ¥—
1,865
1,495 ¥
19,083 ¥99—

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

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

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

14,78534,811

78
3,945

—
69

—
1,749

—
641

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

14,86240,581

466,473 ¥2,458
468,931
23,339 ¥509,749 ¥
17,8901,407

103,165 ¥10,488113,653
4,611 ¥
117,624 ¥1,873
132,868 ¥18,79051,658871 ¥
15,498 ¥60—

1,732 ¥—
1,732
1,383 ¥
17,305 ¥83—

21,389 ¥16,25137,640688 ¥
49,270 ¥698
228

625,627 ¥47,987
673,61430,892 ¥709,446 ¥
20,604
1,636— ¥(47,987)(47,987)(1,195) ¥(54,913) ¥(406)—

625,627—625,627
29,697654,533
20,198
1,636

14,521
26,602

43
4,581

—
130

—
3,496

—
1,281

14,56436,090(2)(573)

14,56235,517For the year 2021:
Operating revenue:
		External customers
		 Intersegment sales and transfers
			Total operating revenue
Segment income (*2)¥

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

For the year 2020:
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

Transportation Vehicle sales
services (*6)(*5)
For the year 2022
Operating revenue:
		Revenue from contracts with customers $ 3,708,631 $
794,320
		Other revenue
6,557
10,770		External customers
3,715,188805,090
		 Intersegment sales and transfers
16,21389,492
			Total operating revenue
3,731,401
894,582
Segment income (*2)$ 173,016 $
36,812
Segment assets (*3)
$ 4,329,656
Depreciation
155,557
Amortization of goodwill
12,779Investments in affiliates accounted forusing the equity method
136,811
Increase in tangible and intangible fixed assets
235,123

26

Merchandise
sales (*6)$

Merchandise
sales (*6)$$

252,082—
252,082
110,877
362,959
6,467

Real estateleasing services

Other (*4, 6)

Total

Adjustments(*1)

Consolidated

Thousands of U.S. dollars$— $ 189,434 $ 4,944,467 $— $ 4,944,467
16,5002,509
36,336—36,336
16,500191,943
4,980,803—
4,980,803—
77,066
293,648(293,648)—
16,500269,009
5,274,451(293,648) 4,980,803$
12,369 $9,787 $ 238,451 $(12,664) $ 225,787

981,820 $
16,705
8

140,328 $508—

160,910 $
1,492
—

664
32,828

—
377

—
7,631

416,065 $ 6,028,779 $
5,434
179,696
1,877
14,664—
5,967

137,475
281,926(411,836) $ 5,616,943(3,549)176,147—
14,664(16)(5,139)137,459
276,787

Note: *1) The adjustments column in the table above represents principally the elimination of intersegment transactions and balances, except for (*2) and (*3).
*2) Segment income is reconciled to operating income in the accompanying consolidated statements of income. Segment income in the adjustments column represents unallocated general corporate
expenses which were not assigned to specific reportable segments, net of intersegment transactions.
*3) S egment assets in the adjustments column represent unallocated general corporate items which were not assigned to specific reportable segments, including items such as cash and short-term andlong-term investments in securities, net of intersegment balances.
*4) 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.

*5) A s described in Note 2(u), “Summary of Significant Accounting Policies – Changes in accounting policy”, consolidated subsidiaries Toyota Corolla Gifu Co., Ltd. and Netz Toyota Gifu Co., Ltd.
previously recognized revenue primarily by an installment sales method. Effective from fiscal year end March 31, 2021, the revenue recognition method was changed to a more principle sales
basis. As a result of this change, compared with figures prior to the retroactive application, net sales and segment income (loss) for the fiscal year end March 31, 2020, changed as follows: in
Vehicle sales, “Operating revenue External customers” decreased by ¥1,499 million, and “Segment income” increased by ¥258 million. In addition, “Segment assets” decreased by ¥2,120 million.
*6) A s described in Note 2(u), “Summary of Significant Accounting Policies – Changes in accounting policy”, the Company has applied the Accounting Standard for Revenue Recognition (ASBJ
Statement No. 29, March 31, 2020), etc. from the beginning of the fiscal year under review and changed the accounting treatment for revenue recognition. According to those changes, comparedwith the amounts that would have been reported with previous accounting treatment, in the Transportation business, “External customers” decreased by ¥12,482 million and “Segment income”
decreased by ¥40 million. In Merchandise sales, “ External customers” decreased by ¥3,790 million. In Other, “External customers” increased by ¥1,272 million , and “Segment income” increasedby ¥436 million.

(d)Related Information(i) Information about products and services
The Company has not disclosed information about products and services here because the Company has disclosed the same information above.
(ii) Information about geographic areas
Operating revenue
The Company has omitted the disclosure of operating revenue by geographic area because operating revenue to external customers in Japan accounts for morethan 90% of the amount of operating revenue reported in the consolidated statements of income.
Property and equipment
The Company has omitted the disclosure of property and equipment by geographic area because property and equipment in Japan account for more than
90% of the amount of property and equipment reported in the consolidated balance sheets.
(iii) Information about major customers
The Company has not disclosed information about major customers because no customer contributed 10% or more to operating revenue in the consolidated
statements of income.
(iv) Information on impairment loss by reportable segments:
Impairment loss:
For the year 2022
For the year 2021
For the year 2020
Impairment loss:
For the year 2022

Transportation
services

Vehicle sales

Merchandise
sales

Real estateleasing services

¥

110 ¥
—
129

207 ¥
54
80

Millions of yen
— ¥
291 ¥
—
—
—
66

$

901 $

1,697 $

Thousands of U.S. dollars— $2,385 $

Other

Total

533 ¥
—
267

1,141
54
542

4,369 $

9,352(v) Information on goodwill by reportable segments:
For the year 2022
Amortization of goodwill

Transportation
services¥

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

As of March 31, 2021
Balance of goodwill
For the year 2020
Amortization of goodwill¥

As of March 31, 2020
Balance of goodwill
For the year 2022
Amortization of goodwill
As of March 31, 2022
Balance of goodwill

Merchandise
sales

1,559 ¥

1 ¥

10,846—

1,410 ¥

Real estateleasing services

Millions of yen
— ¥

Other

Total

— ¥

229 ¥

1,789

—

—

280

11,126

1 ¥

— ¥

— ¥

228 ¥

1,639

10,971

1

—

—

508

11,4801,407 ¥

1 ¥

— ¥

— ¥

228 ¥

1,636

12,355

2

—

—

737

13,094

Vehicle sales

Merchandise
sales

Real estateleasing services

Transportation
services$

Vehicle sales

12,779 $Thousands of U.S. dollars
8 $
— $
— $

88,902———

Vehicle sales

Merchandise
sales

Real estateleasing services

Other

Total

1,877 $

14,664

2,295

91,197(iv) Information on gain on negative goodwill by reportable segments:
Gain on negative goodwill:
For the year 2022
For the year 2021
For the year 2020
Gain on negative goodwill:
For the year 2022

Transportation
services

¥

12 ¥
—
—

Transportation
services

$

98 $

— ¥
—
—
Vehicle sales

Millions of yen— ¥——Merchandise
sales

Other

— ¥
—
—

Real estateleasing services

Thousands of U.S. dollars
— $
— $
— $

Total

— ¥
—
—
Other

12
—
—
Total

— $

98

27

Report of Independent Auditors
IIndependent Auditor’s Report
To the Board of Directors of
SEINO HOLDINGS CO., LTD.:
OpinionWe have audited the accompanying consolidated financial statements of SEINO HOLDINGS CO., LTD. (“the Company”)
and its consolidated subsidiaries (collectively referred to as “the Group”), which comprise the consolidated balance sheets as
at March 31, 2022 and 2021, and the consolidated statements of income, statements of comprehensive income, statements ofchanges in net assets and statements of cash flows for each of the years in the three-year period ended March 31, 2022, andnotes, comprising a summary of significant accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated
financial position of the Group as at March 31, 2022 and 2021, and its consolidated financial performance and its consolidated
cash flows for the years then ended in accordance with accounting principles generally accepted in Japan.

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

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

28

The key audit matter

How the matter was addressed in our audit

As described in Note 21, “Segment Information” to thefinancial statements, operating revenue from transportation
services provided to external customers for the current fiscal
year was ¥453,253 million. The motor truck transportation
revenue of Seino Transportation Co., Ltd., the core companyof the Transportation Services Business group, accounted for
49% of the operating revenue.
Based on transportation contracts, the motor truck
transportation revenue is recognized as the related
performance obligations are satisfied.

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

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

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

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

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

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

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

Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31,
2022 are presented solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts
and, in our opinion, such translation has been made on the basis described in Note 1 of the Notes to the consolidated financial
statements.

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

Kuniyoshi Iwata
Designated Engagement Partner
Certified Public Accountant

Shigeki Kondo
Designated Engagement Partner
Certified Public Accountant

Hideki Saito
Designated Engagement Partner
Certified Public Accountant
KPMG AZSA LLC
Nagoya Office, Japan
September 30, 2022
31

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

Clients
Collection anddelivery

Vehiclessales and repairs

Sales

Services

Real estateleasing

Domestic transportation

Vehicle sales

Merchandise sales

Real estate leasing

Seino Transportation Co., Ltd.
*1
Hokkaido Seino Transportation Co., Ltd. *1
Tohoku Seino Transportation Co., Ltd. *1
Kobaun Co., Ltd.
*1
Niko warehouse Co., Ltd.
*1
Kanto Seino Transportation Co., Ltd.
*1
Seino Super Express Co., Ltd.
*1
Kanagawa Seino Transportation Co., Ltd. *1
Izu Seino Transportation Co., Ltd.
*1
Nohi Seino Transportation Co., Ltd.
*1
Tokai Seino Transportation Co., Ltd.
*1
Mie Seino Transportation Co., Ltd.
*1
Hinomaru Seino Transportation Co., Ltd. *1
Shikoku Seino Transportation Co., Ltd. *1
Kyushu Seino Transportation Co., Ltd. *1
Okinawa Seino Transportation Co., Ltd. *1
Seino Tsu-un Transportation Co., Ltd.
*1
Seino Express Co., Ltd.
*1
Seino 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
LIVING PRO-SEED, INC.
*1
ASAHI CONPOU CO., LTD.
*1
Kanto Transportation Co., Ltd.
*1
Osaka Kosoku Nyuhai Corporation*1
KCS Co., Ltd.
*1
Izumikawa Transportation Co., Ltd.
*1
Showa Reizo Co., Ltd.
*1LOCCO Co., Ltd.
*1
KANTO LOGITEC CO., LTD.
*1
MARUKYU UNYU CO., LTD.
*1
Saitama Seino Transportation Co., Ltd. *2
Tokyo Seino Transportation Co., Ltd.
*2
Mikawa Seino Transportation Co., Ltd.
Ensyu 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
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

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

Seino Transportation Co., Ltd.
OthersMarchandise
sales

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

Transportation
services

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

OthersSeino Holdings Co., Ltd.

32

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