Annual Report 2014
Year Ended March 31, 2014

Profile

Seino
SeinoHoldings
HoldingsCo.,
Co.,Ltd.
Ltd.(“the(“theCompany”)
Company”)began
began
businessbusinessasasa atrucking
truckingcompany
companyinin1930
1930andandwaswasincorporated
Gifu
incorporatedinin1946.
1946.Based
Basedininthe
thecitycityofofOgaki,
Ogaki,
Gifu
Prefecture,
Prefecture,we
weare
areaaleading
leadingtrucking
truckingcompany,
company,expanding
expandingin
step
withwiththe thegrowthof theJapanese
economyand andthe thein step
growthof theJapanese
economydevelopment
developmentofofthe
thenation’s
nation’sextensive
extensiveexpressway
expresswaynetwork.
network.
On
On October
October1,1,2005,
2005,thetheCompany
Companytransferredtransferreditsits
transportationtransportationbusinessbusinessand
andotherotheroperations
operationstotoa anew
newcompany—which
company—whichhas
hastakentakenthetheoriginal
originalname
nameSeino
Seino
Transportation
Transportation Co.,
Co.,Ltd.—andLtd.—andwas
wasrenamed
renamedSeino
SeinoHoldings
Co.,Ltd., adopting
Holdings
Co., Ltd. aa pure
pure holding
holdingcompany
companystructure.
structure.
The Seino Group currently consists of the pure holding
company Seino Holdings,
Holdings,59
58 consolidated
consolidatedsubsidiaries
subsidiariesand
and14
14
affiliates engaged in transportationtransportation services,
services,vehicle
vehiclesales,
sales,
merchandise sales, leasingleasing forfor real
real estate
estate services
servicesand
andotherotherservices.
services.
In its mainstay Transportation
In
Transportation Services
Services business,business,thetheCompany has taken steps toCompany
to build
build even
even more
moreconvenientconvenientlogistics systems, all the while
logistics
while adhering
adhering toto itsits“customer-first”“customer-first”
principle. As of March 31, 2013,
principle.
2011, Seino
Seino offers
offersefficientefficienttransportation services throughout
transportation
throughout Japan
Japan via
viaitsits646634domestic
domestic
terminals, a fleet of 23,815
24,321 trucks
trucks andand aa trucking
truckingnetwork
networkthat
that
4,000 routes daily.
averages 5,000
daily. Overseas,
Overseas,Seino
Seinohas
hastransferredtransferredits
itsinternational forwarding
forwarding operations
operations to
toSchenker-Seino
Schenker-SeinoCo.,
Co.,
Ltd., a joint venture
venture establishedestablished with
withSchenker
SchenkerAG
AGininGermany.
Through this alliance, the Company aims to bolster its
competitiveness byCompany
optimizing
thetosynergies
of Seino’s domestic
aims
bolster its
transportation network
and Schenker’s
global network
andcompetitivenessby optimizing
the synergies
cutting-edge IT systems.
of Seino’s domestic transportation network
Seino
Groupandis committed
and Schenker’sTheglobalnetwork
toIT
providingcutting-edge
systems.rapid services thatdeliver total customer satisfaction
and will
proceedthetotal“Road
providing rapid
services
thatdown
deliverto Success”andto becomea highlycustomer satisfaction
will proceed
down
profitablethroughthe “Road to
Success”company
to becomea highly
initiativesthroughto develop
a progressive
profitable company
initiatives
to
ダミーです。
business model
thatmodel
will become
develop a progressive
businessthatwill becomethe
thestandard
standardfor
fornext-generationtransportation
business.
next-generationtransportation
business.

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

Contents
Contents
Financial Highlights
Financial
Highlights

11

To OurTo
Our Shareholders,Shareholders,Customers
CustomersandandFriends
Friends

22

Special FeatureSpecialFeature44

Review ofReviewof Operations
Operations

66

Financial Review
Financial
Review

88

Six-year Summary
Six-year
Summary

99

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

13
13

Notes toNotes
to Consolidated
ConsolidatedFinancial
FinancialStatements
Statements

14
14

Report ofReportof Independent
IndependentAuditors
Auditors

24
24

Seino Group
Seino
Group

25
25

Board of Directors(As of June 26, 2014)
Chairman andChief Executive Officer

Yoshikazu Taguchi

President andChief Operating Officer

Yoshitaka Taguchi

Directors

Takao Taguchi
Shizutoshi Otsuka
Hidemi Maruta
Harumi Furuhashi

Outside Directors

Yuji Tanahashi
Kenjiro Ueno

Standing Statutory Auditors

Takahiko Kumamoto
Shingo Terada

Outside Statutory Auditors

Fumio Kato
Eiji Kasamatsu

SEINO HOLDINGS CO., LTD.

Financial Highlights(Billions of Yen)

For the Years Ended March 31, 2014, 2013 and 2012

Thousands of
U.S. Dollars (Note)

Millions of Yen
CONSOLIDATED BASIS:
Operating revenue
Operating income
Income before income taxes
Net income
Net income per share

2014

2013

2012

2014

¥ 543,407 ¥ 516,185 ¥ 504,277
14,346
13,867
20,18917,574
18,51425,03812,151
12,542
15,490
61.05
63.02
77.85

$ 5,275,796
196,010243,087
150,388
0.76

Millions of Yen

Thousands of
U.S. Dollars (Note)2014

CONSOLIDATED BASIS:
Cash and cash equivalents, and short-term investments ¥ 97,729
Property and equipment, net of accumulated depreciation
270,888
Total assets
542,411Long-term debt and other long-term liabilities
83,676
Net assets
346,339
Net assets per share
1,696.37

2013

2012

2014

¥ 76,934
270,367
510,467
71,594
331,702
1,625.30¥ 64,826
274,475
500,963
74,094
318,650
1,561.32$ 948,825
2,629,981
5,266,126
812,388
3,362,515
16.47

2012

2013

2014

2013

2014

2013

2014

Net income(Billions of Yen)

20
15
10
5
0

(Note) U.S. dollar amounts are translated at ¥103 = U.S. $1, only for the convenience of readers.

2012(Billions of Yen)

350
300
250
200
150

Corporate Data

100
50

(As of March 31, 2014)

0Company 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: 81-584-82-5040
November 1, 1946
¥42,482 million
207,679,783
The First Section of Tokyo Stock Exchange (code 9076)
The First Section of Nagoya Stock Exchange (code 9076)
Mitsubishi UFJ Trust and Banking Corporation
KPMG AZSA LLC

2012

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, 2014 (April 1, 2013 to March 31, 2014) are presented herein.

New Medium-term Management Plan
“JUMPUP 70” 2014/4 -2017/3
In this fiscal year under review, although Japan’s economy began
to show signs of modest recovery due to the reconstruction demandassociated with the Great East Japan Earthquake, factors such as thecontinuously declining financial stability of EU countries, thedeceleration of emerging nations’ economies, the effects of the strong
yen and so on, have given rise to a situation where the future remains
uncertain. In addition, there are signs of economic vitalization due tothe change in political administration at the end of last year, which
has had favorable effects on currency and financial markets, however
this is yet to ripple down to the real economy.
Even in the transportation industry, which is the core business of
the Seino Group, despite slight recovery in the volume of freight
being transported due to restoration of production capabilities andthe rebound after the low standard of the previous year brought about
by the tsunami and earthquake disaster, etc., the level remains low,
and on top of the intensifying competition between industry players,
the burden of high fuel prices is heavy to bear and we have endured

Initiatives and Results for the Fiscal
Year under Review
Amidst such a business environment, the Seino Group has
continued to steadily implement each policy of our medium-term
management plan, now in its second year, entitled “Challenging
towards Change”. At the same time as aiming to achieve numericaltargets, we also exerted efforts to consolidate the strengths of eachgroup company and offer our customers that “extra special luxury”.
In our transportation business, in order to further strengthen ourcompetitiveness in Kyushu, following on from the integration of
Seino Transportation Kyushu and Kyushu Seino Transportation
Company of the previous fiscal year, on April 1, 2012, Kyushu Seino
Transportation and Kyushu Seibu Transportation were integrated.
This is the final move which completes the integration of our
Kyushu network, and we have successfully further improved
transportation quality and customer service in addition to
streamlining redundant elements.
Similarly, on April 1, 2012, Seino Express absorbed Seino
Logistics with the goal of streamlining personnel, vehicles,
equipment and so on. Also, on January 15, 2013, the Seino Groupacquired all the shares of Asahi Conpou (Sumida, Tokyo), which has
a strong performance record with government agencies, making it
our 59th subsidiary. This move means that packaging and sealing
work which had been outsourced until now, is internalized, which
2through a rough period.
Elsewhere, on March 12, 2013, Seino Group entered a businessalliance with Fukuyama Transporting Co., Ltd. (Fukuyama,
Hiroshima) as part of the “Mutual Cooperation Treaty in the case of
Large-Scale Disasters”.
Regarding vehicle sales, in order to strengthen our maintenanceplant network in the Kanto region and contribute to theinternalization of maintenance operations, Tokyo Sharyo (Iruma,
Saitama) was made a subsidiary of Seino Group as of April 1, 2012.
By placing the selection and concentration of operational
resources foremost in this way, we have engaged in a united effort toimprove corporate value while achieving optimization of the groupoverall.
Consequently, we have achieved the following results for thefinancial year under review. An operating revenue of 516,184 million
yen (up 2.4% year-on-year), an operating income of 14, 346 million
yen (up 3.5% year-on-year), ordinary profit of 19,461 million yen(down 1.4% year-on-year) and net income was 12,150 million yen(down 3.1% year-on-year).

will also lead to better efficiency and allow for a multi-layered
operations structure.

Future Outlook
The outlook for Japan’s economy is that, despite the heightened
mentality regarding economic recovery backed by the effects of an
improved export environment, proactive economy rehabilitation
policies and bold financial policies, there are still many problems
such as unstable, uncertain foreign economies, geopolitical risk, thedefining of new economic growth strategies promoted as government
measures and so on, and it is thought it will take time until the real
economy is back on a steady, stable course.
In our core business of transportation, there is still the trend of ashrinking market and the strengthening of social regulations such asenvironmental restrictions and the prolonged high fuel prices, etc.,
are causing significant strain on management. Meanwhile, issues
such as a shortage of drivers and an aging population across theindustry on the whole are beginning to surface, and we believe thatthe harsh business environment will continue.
Amidst this climate, this year, the final year of our medium-term
management plan entitled “Challenging towards Change”, in
addition to delivering precise instruction so that each group company
may achieve their individual directives with certainty, we also intend

to exert efforts in the selection and concentration of management
resources in order to earnestly drive expansion and development ofour businesses.
In the transportation business, while continuing to remain
focused on securing the planned profit, we will also engage inactivities with the reorganization of our subsidiaries in our sight, aspart of an effort to strengthen competitiveness of our group evenfurther and establish a profitable framework.
Also, regarding the business alliance with Fukuyama
Transporting Co., Ltd., we will do our best to expand the scope of
this alliance to achieve more real results, contribute to the local
community and improve the corporate value of both companies.
In regards to passenger vehicle sales, as a part of promoting sales
which do not primarily focus on new vehicle sales but also include
strengthening our service framework for business expansion andpromotion of used parts, the Seino Group will introduce a vehicle
inspection reservation management system to achieve appropriate
work management and time reduction.
In our truck sales business, we will focus on further strengthening
our maintenance plant network in the Kanto region in order toincrease profitability of our vehicle maintenance business.
Amidst a rapidly evolving, dynamic business environment, inorder to crystallize the strengths of our 59 group companies andachieve solid results, Seino will adhere to our company slogan of“Execution”, and ensure various measures are boldly implemented
based on self-motivated action.

Corporate GovernanceYoshikazu Taguchi
Chairman and Chief Executive Officer

Seino employs a corporate auditor system. As of March 31, 2013,
the Board of Directors consisted of 8 directors, including 2 outside
directors. In addition to making swift and appropriate decisions onsuch important matters as business restructuring and strategic
investments, the Board of Directors is strengthening auditing
functions and achieving greater management transparency.
The company also has 4 corporate auditors, including 2 outside
auditors. Auditors are committed to improving compliance andenhancing the trust that society has in the company through suchactivities as attending meetings of the Board of Directors,
conferences of directors and other important gatherings, and auditing
business execution.

To Our Shareholders
In keeping with our basic business policy, Seino seeks to enhanceshareholders’ equity and improve profitability from a long-term
perspective, while maintaining stable dividends. This fiscal year,
Seino has maintained a regular annual cash dividend per share of¥11, the same as for the previous fiscal year.
Through the implementation of our new medium-term
management plan, we aim to be the top commercial freighttransportation company in Japan while at the same time raising
corporate and shareholder value. We ask our shareholders, customers
and friends for your continued understanding and support.

Yoshitaka Taguchi
President and Chief Operating Officer

3

Special Feature

Expanding Our Operations Scope and Creating New ValueThe Seino Group established “Challenging towards Change”, amedium-term management plan beginning in the fiscal year of2012, and vigorously promoted the forming of new systems whichmatch group company functions and customers to provide alogistics service which “connects to the needs” of all customers. In
addition, the Seino Group has strove to become a corporation
where each of its individual companies is the one chosen bycustomers in their respective industries, thereby building an
unshakeable business foundation.
The following outlines initiatives implemented by respective
business groups in the fiscal year of 2013.

Business Group Initiatives
Transportation Services/Business Group
Business Alliance with Fukuyama
Transporting

On March 12th, Seino Holdings signed a basic agreement
relating to construction of a strategic logistics system and entereda business alliance with Fukuyama Transporting (headquarteredin Fukuyama city, Hiroshima prefecture).
The alliance consists of the following two items. 1) Mutual
cooperation in the event of a large-scale disaster, and 2) Provisionof eco delivery. The first item involves mutual cooperation
regarding seven items including mutual utilization of logistics
facilities in disaster-affected regions with the goal of continuinglogistics operations and early recovery. The second item involves
providing a “Joint batch delivery service” with the goal of solving
problems for customers, society and industry.

Planet-friendly Initiative - Lending
Roofs for Solar Power Generation

As part of its environmental initiatives, Seino Holdings haslent the roofs of 18 of its logistics facilities to Orix Corporation(Minato ward, Tokyo) for the installation of solar power
generation equipment to start a new power generation initiative.
The annual power generation is predicted to be enough forapproximately 1580 households. By continuing to lend roofs
which satisfy installation conditions, we plan to advance ourinitiatives which consider the planet environment.

Participating in a Regional Disaster Drill

At the request of the Gifu Truck Association, one vehicle from
Seino Transportation’s Gifu branch took part in a regional
disaster drill on February 7th.
This was part of the first ever comprehensive drill program
carried out by the Cabinet Office and related institutions of the
Chubu prefectures in preparation for a Nankai megathrustearthquake, and involved practicing emergency transportation ofrelief goods, etc. at the venue.

Installation of a Device Integrating
Digital Tacographs and Drive
Recorders in all Vehicles

In the name of safer driving, Seino Transportation has begun
introducing devices which integrate digital tacographs and drive
recorders.
By utilizing these devices, not only can driving control
managers and drivers easily look back over driving records, they
can also receive audio advice. Moreover, in the unlikely event ofan accident, this device isuseful in identifying thecause using visual records
and helping to prevent
reoccurrence. We plan tohave this device installed on
all vehicles by March ofnext year.

Commencement of Monitoring-type
Proxy Shopping

Coconet (headquartered in Chuo ward, Tokyo) has begun a
new service called “Oyakokonet” which involves staff visiting thehomes of people on a regular basis and informing their family,
who live far away, by email, etc. of the person’s condition. If theperson’s family pays a monthly membership fee of 880 yen, theCoconet staff member will also go shopping for the person they
are monitoring. The service will
start in Minami and Jyonan wardsof Fukuoka city, then gradually berolled out across Japan. This
service is also adopted as a“Service for People in Need of
Shopping Support” by the
Ministry of Economy, Trade andIndustry.

Vehicle Sales & Other Businesses
Strengthening Sales – Establishmentof our 2nd Philippine’s Branch

On July 12th, Subic GS Auto, a joint venture formed by Gifu
Hino Motor (headquartered in Anpachi, Gifu prefecture) andKilton Motors, established their second store in the center of4Manila, the capital of the Philippines.
The demand for trucks in the Philippines is high in line withthe country’s strong economic growth and the market is starting
to shift from used to new cars. As such, the second location wasestablished following the establishment of the first location in Julyof last year in an effort to strengthen new truck sales in the
country.

Toyota Home Gifu - New
Construction and Relocation of
Headquarters

Strengthening Sales Framework within
Trading Zone – New Construction and
Relocation of the Seki Branch

Netz Toyota Gifu (headquartered in Hashima, Gifu
prefecture) newly constructed and relocated its Seki branch on
April 12th. This was part of efforts to strengthen their sales
framework by expanding their trading zone to the north-easternpart of Gifu city.
This move was spurred on not only by the deterioration of theold location and the confined space of the original land block, butalso in order to acquire a trading zone which differed to theneighboring Seki Higashi branch.
The new store is located alongside a national highway with ahigh traffic volume and is anticipated to attract a high number ofcustomers due to being part of a collection of commercial
facilities.

On March 27th, Toyota Home Gifu (headquartered in Gifu
city, Gifu prefecture) established a new show room displaying
house designs, interior and so on in an area easily accessible. The
new location is in a great environment which attracts large
volumes of people, and is in close proximity to the Museum ofFine Arts, Gifu and the library. The show room will be used tostrengthen the appeal of the Toyota Home brand.
Toyota Home headquarters has been relocated to the second
floor above the show room. The third floor of the building has aroom for seminars on building a home, etc. and will strengthen
Toyota Home’s response to diversifying customer needs.

Simpler Logistics Control – Sales
Launch of 2 New Systems

JMS Gifu – Opening of Tajimi StoreJMS Gifu (headquartered in Kakamigahara city, Gifu
prefecture) has opened a new JMS Tajimi store as a new concept
car accessory and car maintenance store which targets women,
families and couples.
The store is located in a commercial complex, making it easy
for people to casually go in and look around. It also features a
joint café which services authentic coffee. Moreover, real vehicles
are used in the store, with a sales floor where customers can easily
imagine the various situations their cars will be in depending on
the season.

In autumn, Seino Information Service (Taguchicho, Ogakicity) launched the sale of a production performance control system“SPENCER” and transportation management system “ASPITS”.
SPENCER is a system that can do everything from factory
inventory control to process control and cost management andachieves “visualization” of the production floor. It also enables
prevention of task oversights, assesses inventory and helps toreduce labor costs. ASPITS is a system which makes it possible toassess the location of delivery vehicles, issue automatic
notifications to recipients and so on. The systems can be easily
installed at low cost by simply preparing a smartphone or mobile
phone with GPS in vehicles and an intranet environment in
administration offices.
In the future, these systems will be sold externally with theaim of acquiring new orders and expanding business areas.

5Expanding Our Operations Scope and Creating New Value
Transportation Services
In our transportation service business, we exerted ourefforts to increase income and secure profit by further
enhancing our main business of small volume, consolidatedroute deliveries as well as activities based on our medium-term
management plan such as expansion of our logistics business,sales expansion of “time-providing products”, improving
transportation fee collection ratio, as well as improving
loading ratio of routes and transportation quality.
Apart from this, we have responded to globalization by
providing an environment where we can offer our customers
the benefits of PPP (Pusan Platform Project) which utilizes
the new Busan port, Korea - part of the free trade zone, in aneffort to improve efficiency of the overall supply chain.
In the roll out of our bases, the new construction andrelocation of Shikoku Seino Transportation’s Tokushimabranch (Itano, Tokushima prefecture) has contributed to
improving operations efficiency and customer service as well
as sales enhancement.
Seino Transportation, as the center firm, in addition tofurther improving customer service by creating a soundtransportation cycle and providing customers with reliabletransportation ability excelling in all aspects of time, service
and accuracy, has poured efforts into acquiring new customers,
charging for out-of-pocket-expenses and services, andcollecting appropriate fares and fuel surcharges in order tosecure income. At the same time we have adequately
controlled expenses to correlate with the amount of materials
and secured stable profit.
Moreover, Seibu Transportation, which oversees ourgroup’s express and air freight services (trading name changed
to “Seino Super Express Co., Ltd” as of April 1st, 2014), haspromoted the expansion of express services as its core businessto expand profit and adequately control expenses.
The results were operating revenue of ¥393,320 million, up
5.9% year-on-year, and an operating income of ¥12,778
million, up 84.7% year-on-year.

Vehicle Sales
Passenger vehicle sales were down in the first half of theyear due to termination of the eco-car subsidization scheme,
however after this downturn reached its lowest, we saw theeffects of introducing new vehicle models from September
onwards, and as a result of focusing on locally-based sales
activities when demand was high due to the rush before theconsumption tax hike, we sold more new vehicles than thesame period of the preceding year.
Meanwhile, used car sales greatly exceeded those of thesame period from the previous year due to proactive sales
promotion activities such as holding large-scale events anddistributing direct mail, in addition to strengthening ourwholesales to a favorable auction market.
In truck sales, the number of new vehicles sold was higher

than the same period of the preceding year due to a steadydemand created by an increase in construction investment andfreight movement. Moreover, we strengthened our businesses
such as vehicle inspection and parts sales. Also, the sale ofused parts got firmly on track in line with our recycle parts
center becoming fully operational.
Regarding the roll out of our bases, Netz Toyota Gifu
newly built and relocated their Seki store (Seki city, Gifu
prefecture) and carried out full renovations on their Tajimi
store (Tajimi city, Gifu prefecture) in an effort to improve
operations efficiency and customer service.
The results were operating revenue of ¥100,568 million, up
4.6% year-on-year, and an operating income of ¥5,351
million, down 1.7% year-on-year.

Merchandise Sales
In merchandise sales, Seino sells merchandise best
represented by fuel, paper and paper products. In addition to
the sale of our mainstay product, fuel, we saw steady
performance in the sale of paper products, transportation

6

materials and cellphones.
The results were operating revenue of ¥33,305 million, up
2.6% year-on-year, and an operating income of ¥730 million,
down 0.8% year-on-year.

Leasing for Real Estate Services
In this business, we strove to effectively utilize
management resources by leasing vacant store and truck
terminal lots for which alternative measures had been taken
due primarily to the impact of urban development and lack ofspace.
Operating revenue was ¥1,421 million, down 1.2% yearon-year, and operating income was ¥1,221 million, up 0.6%
year-on-year.

Other
Among information-related services, housing sales,
construction consignment, taxi service and labor dispatch
services, performances of information-related services andlabor dispatch services were strong.

The results were operating revenue of ¥14,791 million, up
1.3% year-on-year, and an operating income of ¥544 million,
up 10.1% year-on-year.

Operating Revenue by Business Segment(Millions of yen)
FY3/13

FY3/14
Results

Composition

Results

Composition

Year-on-YearTransportation Services

393,32072.4%

371,546

72.0%

5.9%

Vehicle Sales

100,569

18.5%

96,148

18.6%

4.6%

Merchandise Sales

33,306

6.1%

32,457

6.3%

2.6%

Leasing for Real Estate Services

1,421

0.3%

1,438

0.3%

(1.2%)

Other

14,791

2.7%

14,596

2.8%

1.3%

Total

543,407100.0%

516,185

100.0%

5.3%

Composition

Year-on-Year

Operating Income by Business Segment(Millions of yen)
FY3/14
Results

FY3/13Composition

Results

Transportation Services

12,779

63.3%

6,918

48.2%

84.7%

Vehicle Sales

5,352

26.5%

5,442

37.9%

(1.7%)

731

3.6%

736

5.1%

(0.8%)

1,222

6.1%

1,215

8.5%

0.6%

Other

544

2.7%

495

3.5%

10.1%

Total

20,628102.2%

14,806103.2%

39.3%

Elimination(439)(2.2%)(460)(3.2%)—

Consolidated

20,189100.0%

14,346100.0%

40.7%

Merchandise Sales
Leasing for Real Estate Services

7

Financial Review
Operating Results(US$2,154,107 thousand) compared with the previous fiscal
year-end. Total fixed assets increased 2.2% from the previous
fiscal year-end to ¥320,538 million (US$3,112,019 thousand).
Total current liabilities increased 4.5% compared with theprevious fiscal year-end to ¥112,396 million (US$1,091,223
thousand). This was due primarily to accrued expenses andincome tax payable.
Long-term liabilities increased 16.9% from the previous
fiscal year-end to ¥83,676 million (US$812,389 thousand).
The main factors behind this result were increased in longterm and employee retirement benefits.
Net assets rose 4.4% from the previous fiscal year-end to¥346,339 million (US$3,362,514 thousand). The major factor
was an increase in retained earnings derived from the postingof net income. Shareholders’ equity decreased 1.2 percentage
point to 62.2%.

Consolidated operating revenue for Seino Holdings for the
fiscal year ended March 31, 2014 increased 5.3% from theprevious fiscal year to ¥543,407 million (US$5,275,796
thousand). This was due to increased sales in all segments.
Operating costs of revenues increased 4.8% from theprevious fiscal year to ¥490,002 million (US$4,757,301
thousand). The ratio of operating costs to operating revenue
was 90.2%, down 0.4 percentage point from the previous fiscal
year.
Selling, general and administrative expenses decerase 3.0%
to ¥33,216 million (US$322,485 thousand), while operating
income increased 40.7% to ¥20,189 million (US$196,010
thousand).
Other income (expenses) stood at ¥4,849 million(US$47,077 thousand). Key positive factors were theimpairment loss on fixed assets of ¥440 million (US$4,272
thousand).
As a result, income before income taxes and minority
interests amounted to ¥25,038 million (US$243,087
thousand), up 42.5% year-on-year. Net income increased
42.5% to ¥15,490 million (US$150,388 thousand).
Net income per share was ¥77.85 (US$0.76), and return on
equity was 4.5%. Annual cash dividends per share weremaintained at ¥11.00 (US$0.11), the same as in the previous
fiscal year.

Cash FlowsNet cash provided by operating activities increased¥1,411million compared with the previous fiscal year to¥27,500million (US$266,990 thousand) due mainly toincrease in trade receivables in the previous fiscal year.
Net cash used in investing activities increased¥6,501million compared with the previous fiscal year to¥33,567million (US$325,893 thousand) due primarily to anincrease in short-term investments.
Net cash used in financing activities increased¥10,133million compared with the previous fiscal year to¥7,552million (US$73,321 thousand).
Consequently, cash and cash equivalents at end of year
increased ¥1,502 million compared with the previous fiscal
year to ¥65,557 million (US$539,388 thousand).

Financial Position

Total assets at the end of the fiscal year under review were¥542,411 million (US$5,266,126 thousand), up 6.3% versus
the previous fiscal year-end.
Total current assets increased 12.7% to ¥221,873 million

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

Shareholders’ equity ratio

(%)

(%)

(%)

5

5

80

4

4

3

3

2

2

1

1

0

0

-1

-1

-2

-2

-3

-3

-4

-4

-5

8

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

2009

2010

2011

2012

2013

2014

-5

60

40

20

2009

2010

2011

2012

Operating income to operating revenue

Net income (loss) to total assets

Net income (loss) to operating revenue

Return on equity ratio

2013

2014

0

2009

2010

2011

2012

2013

2014

SEINO HOLDINGS CO., LTD. and Consolidated Subsidiaries

Six-year Summary

For the Years Ended March 31, 2014, 2013, 2012, 2011, 2010 and 2009
Millions of Yen
2014
For the year:
Operating revenue:
Transportation services
Vehicle sales
Merchandise sales
Leasing for real estate services
Other
Operating costs
Selling, general andadministrative expenses
Operating income
Net income (loss)
At year-end:
Current assets
Total assets
Current liabilities
Short-term borrowings
Long-term debt, including current maturities
Net assets

¥

2013

543,407393,320
100,569
33,306
1,421
14,791490,002¥2012

516,185
371,546
96,14832,457
1,438
14,596
467,596¥2011

504,277
370,592
87,75530,144
1,416
14,370457,512¥2010

497,612368,771
87,075
27,104
1,429
13,233452,263¥

2009

485,808
362,628
87,132
21,7791,265
13,004445,845¥433,766
316,341
78,722
23,302
1,187
14,214
397,826

33,21820,18915,49034,243
14,346
12,15132,89813,867
12,542

33,023
12,326
8,449

33,342
6,621
9,477

32,607
3,333
3,391

221,873
542,411112,396
2,465
10,214346,339

196,803
510,467
107,1712,473
314
331,702

186,255
500,963108,2192,475
565
318,650

166,726
487,701
97,614
2,515
648
307,806

165,451484,674
96,433
2,315
982
301,792

150,140
439,372
82,996
2,135
1,462
291,564Yen
Per share data:
Net (loss) income:-BasicCash dividends¥

Number of shares issued

77.85
11.00

¥

207,679

61.05
11.00

¥

63.02
11.00

¥

42.44
11.00

¥

Thousands
207,679
207,679

207,679

47.60
11.00

¥

17.03
11.00

207,679

207,679

1.4
2.0
2.0
3.2
60.7
171.6
62.1
23.2

0.8
0.8
0.8
1.2
64.9
180.9
51.8
65.1

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

3.7
2.9
2.9
4.5
62.2
197.4
57.7
14.1

Current ratio
(%)

200

2.8
2.4
2.4
3.7
63.4
183.6
55.3
18.0

2.7
2.5
2.5
4.0
62.0
172.1
58.7
17.5

2.5
1.7
1.7
2.8
61.6
170.8
59.9
26.2

Debt equity ratio

Payout ratio

(%)

(%)

120

70
60

160

50

90

40
30

120

20

60

10

80

0

30

40

-10
-20

0

2009

2010

2011

2012

2013

2014

0

2009

2010

2011

2012

2013

2014

-30

2009

2010

2011

2012

2013

2014

9

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Balance Sheets
March 31, 2014 and 2013

Millions of yen
2014
Assets:Current assets:
Cash and cash equivalents (Note 3)
Short-term investments (Notes 3 and 5)
Trade receivables (Note 3)Inventories (Note 4)
Deferred tax assets (Note 14)
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 (Note 5)
Deferred tax assets (Note 14)
Employee retirement benefit asset (Note 10)

Other assets				Total investments and other assets
Total assets

Current liabilities:
Short-term borrowings (Notes 3 and 9)
Current portion of long-term debt (Notes 3 and 9)
Trade payables (Note 3)
Accrued expenses
Income taxes payable
Other current liabilities
		
Total current liabilities¥¥

Long-term debt (Notes 3 and 9)
Employee retirement benefit liability (Note 10)

Provision for employee retirement benefits (Note 10)

Asset retirement obligations (Note 8)
Accrued severance indemnities for directors and corporate auditors
Deferred tax liabilities (Note 14)
Negative goodwill (Note 16)
Other long-term liabilities
		
Total liabilities

55,55742,172
106,846
8,281
4,863
4,348
(194)
221,8732013

Thousands of
U.S. dollars
2014

54,05522,879102,618
8,588
4,627
4,285
(249)
196,803$539,526(268,638)
270,888533,295(262,928)
270,367

5,238,117(2,608,136)
2,629,981

25,231
3,297
10,9901,569
8,563
49,650542,411

21,816
2,994
9,487
—
9,000
43,297510,467

244,961
32,010106,699
15,233
83,135
482,038$ 5,266,126

2,473
137
57,767
12,3362,377
32,081
107,171

$

2,465
81
57,58813,325
6,680
32,257112,396¥¥¥539,388409,437
1,037,340
80,39847,21442,213(1,883)
2,154,107

23,932
786
559,107
129,369
64,854313,175
1,091,223

10,13360,707
—
2,508
1,493
8,475
3
357
196,072

177—
56,591
2,478
1,490
7,463
3,045
350
178,765

98,379589,388—
24,35014,49582,282
29
3,466
1,903,612

42,482
74,261
222,861(8,687)
330,917

42,482
74,261
209,561(8,612)
317,692

412,447
720,980
2,163,699(84,340)
3,212,786

7,922
(133)
(1,068)
(163)
6,558
8,864
346,339
542,411

6,172
(133)
—
(264)
5,775
8,235
331,702510,467

76,913(1,291)(10,369)(1,583)
63,67086,0583,362,514$ 5,266,126

Commitments and contingent liabilities (Notes 11 and 12)
Net assets:
Shareholders’ equity (Note 13):
Common stock: 794,524,668 shares authorized and 207,679,783 shares issued
Capital surplus
Retained earnings
Less treasury stock at cost: 8,741,295 shares in 2014 and 8,660,804 shares in 2013		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
Minority interests		
Total net assets
		
Total liabilities and net assets
See accompanying Notes to Consolidated Financial Statements.
10

¥

¥

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Income
For the Years Ended March 31, 2014, 2013 and 20122012

Thousands of
U.S. dollars
2014504,277$ 5,275,796

Millions of yen
2014
Operating revenue (Note 16)¥

Operating costs and expenses (Note 10):
Operating costs
Selling, general and administrative expenses

543,4072013¥

516,185¥

490,00233,216523,218
20,189467,596
34,243501,839
14,346457,51232,898490,410
13,867

4,757,301
322,485
5,079,786
196,010

538
(24)
104
7
435
3,042
(440)
(20)
—
(48)
—
—
1,255
4,849
25,038

473
(31)
259
2
249
3,055
(2,199)
(20)
—
—
36
—
1,404
3,228
17,574

624
(38)
18
115
28
3,255
(1,093)
(22)
149
—
—
(421)
2,032
4,647
18,514

5,223
(233)
1,010
68
4,223
29,534(4,272)
(194)
—
(466)
—
—
12,18447,077243,087

Income taxes (Note 14):
Current
Deferred		Total income taxes

10,188(1,095)
9,093

6,544
(1,498)
5,046

7,655
(2,028)
5,627

98,912(10,631)
88,281

		

15,945

12,52812,887

154,806

		

Operating income

Other income (expenses):
Interest and dividend income
Interest expense
Gain on sale or disposal of property and equipment
Gain on sale of investment securities
Equity in net income of affiliates
Amortization of negative goodwill (Note 16)
Impairment loss on fixed assets (Notes 2(i) and 16)
Loss on write-down of investment securities
Gain on abolishment of retirement benefit plan (Note 10)
Bond issuance cost
Gain on negative goodwill (Note 16)
Special extra retirement payments (Note 10)
Miscellaneous, net
		Income before income taxes and minority interests

Income before minority interests

Minority interests in net income of subsidiaries		
Net income¥

455
15,490¥377
12,151¥

345
12,542

Yen

$

4,418
150,388

U.S. dollars

Per share:

Net income:-Basic-Diluted		
Cash dividends

¥

77.85
76.56
11.00

¥

61.05
—
11.00

¥

63.02
—
11.00

$

0.76
0.74
0.11

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, 2014, 2013 and 20122012

Thousands of
U.S. dollars
2014¥12,887

$

¥

221
(44)
—
177
13,064

Millions of yen
2014
Income before minority interests¥
Other comprehensive income (Note 15):
Net unrealized gains on available-for-sale securities
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¥
Minority interests

2013

15,945
1,767
101
4
1,872
17,817
17,340477¥

12,528

¥

2,667
96
2
2,765
15,293¥

14,909384¥

154,806
17,155981$$

12,719345

18,175
172,981
168,350
4,631

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2014, 2013 and 2012

Shareholders’ equity
Number ofshares ofcommon Common Capitalstock issued stock
surplus

Accumulated other comprehensive income

Total
Net unrealized
Foreign
Total
gains onLand
Retirement currency accumulated
other
Retained Treasury shareholders’ available-for- revaluation benefit translation comprehensive Minority
earnings
stock
equity sale securities decrement adjustment adjustments income
interests

Total net
assetsMillions of yen
Balance at April 11, 2011
207,679,783 ¥ 42,482 ¥ 74,266 ¥ 189,207 ¥Net income for the year———
12,542
Cash dividends———(2,189)
Reversal of land revaluation decrement———
39
Sales of treasury stock andfractional shares, net
—
—
(5)
—
Net changes in items other thanshareholders’ equity————
Balance at March 31, 2012 207,679,783
42,482
74,261
199,599
Net income for the year———
12,151
Cash dividends———(2,189)Purchases of treasury stock andfractional shares, net————
Net changes in items other thanshareholders’ equity————
Balance at March 31, 2013 207,679,783
42,482
74,261
209,561
Net income for the year———
15,490Cash dividends———(2,189)
Reversal of land revaluation
decrement———(1)
Purchases of treasury stock andfractional shares, net————
Net changes in items other thanshareholders’ equity————
Balance at March 31, 2014 207,679,783 ¥ 42,482 ¥ 74,261 ¥ 222,861 ¥(8,606) ¥ 297,349 ¥ 3,288 ¥—
12,542——(2,189)——39—(93) ¥— ¥
—
—
—
—
—
—

(316) ¥ 2,879 ¥ 7,578 ¥ 307,806———
12,542———(2,189)
—
—
—
39

3

(2)

—

—

—

—

—

—

(2)

—
(8,603)———
307,739
12,151(2,189)

221
3,509
—
—

(39)
(132)
—
—

—
—
—
—

(44)
(360)
—
—

138
3,017
—
—

316
7,894
—
—

454
318,650
12,151(2,189)

(9)

(9)

—

—

—

—

—

—

(9)

—
(8,612)———
317,692
15,490(2,189)

2,663
6,172
—
—

(1)
(133)
—
—

—
—
—
—

96
(264)
—
—

2,758
5,775
—
—

341
8,235
—
—

3,099
331,702
15,490(2,189)

—

(1)

—

—

—

—

—

—

(1)

(75)

(75)

—

—

—

—

—

—

(75)

—
—
1,750
(8,687) ¥ 330,917 ¥ 7,922 ¥—(1,068)(133) ¥ (1,068) ¥

101
783
629
1,412
(163) ¥ 6,558 ¥ 8,864 ¥ 346,339

Thousands of U.S. dollars
Balance at March 31, 2013
Net income for the year
Cash dividends
Reversal of land revaluation decrement
Purchases of treasury stock andfractional shares, net
Net changes in items other thanshareholders’ equity
Balance at March 31, 2014

$ 412,447 $ 720,980 $2,034,573 $ (83,612) $3,084,388 $ 59,922 $ (1,291) $—— 150,388— 150,388———— (21,252)— (21,252)
—
—
—
—
(10)
—
(10)
—
—
—

—

(728)

(728)

—

—

—

—

—

—

(728)

—
—
—
—
— 16,991— (10,369)
980
7,602
6,107
13,709$ 412,447 $ 720,980 $2,163,699 $ (84,340) $3,212,786 $ 76,913 $ (1,291) $ (10,369) $ (1,583) $ 63,670 $ 86,058 $ 3,362,514

See accompanying Notes to Consolidated Financial Statements.
12—— $ (2,563) $ 56,068 $ 79,951 $ 3,220,407————
150,388————(21,252)
—
—
—
—
(10)

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Cash Flows
For the Years Ended March 31, 2014, 2013 and 20122012

Thousands of
U.S. dollars
2014

18,514$

Millions of yen
2014
Cash flows from operating activities:
Income before income taxes and minority interests
		Adjustments for:			Depreciation
			 Impairment loss on fixed assets
			 Amortization of negative goodwill
			Amortization of goodwill
			 Gain on negative goodwill
			Bond issuance cost			 Net increase in employee retirement benefit liability
			 Net increase in provision for employee retirement benefits			 Gain on sale or disposal of property and equipment
			 Equity in net income of affiliates			 Loss on write-down of investment securities
			 Gain on sale of investment securities
			 Net provision (reversal) for accrued severance indemnities for directors
and corporate auditors
			 Decrease in provision for loss on disaster
Increase in trade receivables(Increase) decrease in inventories(Decrease) increase in trade payables
Other, net				 Subtotal
Interest and dividend received
Interest paid
Income taxes paid				Net cash provided by operating activities¥

25,0382013¥

17,574¥

243,087

14,317440(3,042)
67
—
48
1,148
—
(104)
(435)
20
(7)

14,486
2,199(3,055)
499
(36)
—
—
1,317
(259)
(249)
20
(2)

15,324
1,093(3,255)
503
—
—
—
249
(18)
(28)
22
(115)

139,000
4,272(29,534)650—
466
11,146—(1,010)(4,223)
194
(68)

3
—
(4,265)
(205)
(184)
(56)
32,783660(24)(5,919)27,500

20
(51)
(525)
324
1,312
1,337
34,911620(31)(9,411)
26,089(4)(134)(7,738)(2,422)6,612
2,494
31,097755(38)(6,907)
24,907

29—(41,408)(1,990)(1,786)(543)
318,282
6,407(233)(57,466)
266,990

Cash flows from investing activities:
Increase in property and equipment
Increase in long-term investments and loans
Decrease in property and long-term investments
Increase in short-term investments
				Net cash used in investing activities(14,835)(1,162)
1,722(19,292)(33,567)(12,539)
(288)
1,389
(15,628)(27,066)(14,555)
(425)
1,441
(187)
(13,726)(144,029)(11,281)
16,718(187,301)(325,893)

Cash flows from financing activities:
Increase in long-term debt
Repayment of long-term debt
Net decrease in short-term borrowings
Dividends paid to shareholders
Dividends paid to minority shareholders
Purchases of treasury stock, net of disposals
Other, net
				Net cash provided by (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

10,002(120)(8)(2,189)
(37)
(76)
(20)
7,552
17
1,502
54,05555,557—(257)(4)(2,189)
(39)
(9)
(83)
(2,581)18(3,540)57,59554,055

—
(192)
(56)
(2,189)
(30)
(2)
(103)
(2,572)(6)
8,603
48,992
57,595

97,107(1,165)(78)(21,252)
(359)
(738)
(194)
73,321
165
14,583524,805539,388

¥

¥

¥

$

See accompanying Notes to Consolidated Financial Statements.
13

SEINO HOLDINGS CO., LTD. and Subsidiaries

Notes to Consolidated Financial Statements
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. The
Company has consolidated the overseas subsidiary’s financial statements as ofits year-end because the difference between its fiscal year-end and that of theCompany was not more than three months. Significant transactions for theperiod between the subsidiary’s year-end and the Company’s year-end were
adjusted for on consolidation.
The consolidated financial statements include the accounts of the overseas
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”).

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
with accounting principles generally accepted in Japan (“Japanese
GAAP”), which are different in certain respects as to applicationand disclosure requirements from International Financial ReportingStandards (“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.
Certain comparative figures have been reclassified to conform to thecurrent year’s presentation.
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, 2014, which was ¥103
to U.S. $1.00. The translation should not be construed as a representationthat 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.

(a-ii) Corporate separation for the year ended March 31, 2012

On April 1, 2011, the Company restructured the transportation
business in the Kyushu region. Seino Transportation Co., Ltd., asubsidiary, underwent a corporate separation in which its transportation
business in Kyushu region was transferred to the newly foundedsubsidiary, Kyushu Seino Transportation Co., Ltd. The Company
applied ASBJ Statement No. 21, “Accounting Standard for Business
Combinations,” revised on December 26, 2008, and ASBJ Guidance No.
10, “Guidance on Accounting Standard for Business Combinations andBusiness Divestitures,” revised on December 26, 2008, and accounted forthe separation as a business transaction under common control.

(a-iii) Corporate separation and merger for the year ended March
31, 2013.

2. Summary of Significant Accounting Policies(a-i) 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
and the underlying equity in their net assets, adjusted based on thefair value at the time of the acquisition, are deferred as goodwill andamortized over five years on a straight-line basis. From April 1, 2010,
negative goodwill resulting from business combinations, measured by
the excess of the underlying equity in the net assets over the acquisition
cost, is credited to income. Negative goodwill resulting from acquisitions
incurred prior to April 1, 2010, however, is amortized over five years on astraight-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 amajority (more than 50%) owned enterprise or a 40% to 50% owned
enterprise that meets certain criteria. An affiliated company is defined
as an enterprise in which the investor has significant influence and is anenterprise other than a subsidiary that is a 20% or more owned enterpriseor a 15% to less than 20% owned enterprise that meets certain criteria.
For the years ended March 31, 2014, 2013 and 2012, the number ofthe companies that were not more than 50% owned enterprises, butwere nevertheless classified as subsidiaries based on the judgment of theCompany in accordance with the accounting standards was one.
The number of subsidiaries and affiliates for the years ended March
31, 2014, 2013 and 2012 was as follows:
Subsidiaries:
Domestic
Overseas
Affiliates accounted for by the equity method
Affiliates stated at cost

14

2014

2013

2012

58
1
4
10

58
1
4
10

58
1
4
9

(b)
(c)

(d)
(e)

Effective on April 1, 2012, Kyushu Seibu Transportation Co., Ltd.
(“Kyushu Seibu”), a subsidiary, underwent a corporate separation inwhich its transportation business in the Kyushu region was transferred
to Kyushu Seino Transportation Co., Ltd. At the same time, Kyushu
Seibu was merged into Seibu Transportation Co., Ltd., anothersubsidiary. These subsidiaries had been engaged in the transportation
service business, and the Company was aiming to increase service
efficiencies for transportation services and to integrate the operationsof these subsidiaries in the Kyushu region of Japan. The transactions
were accounted for as business transactions under common control inaccordance with ASBJ Statement No. 21 and ASBJ Guidance No. 10.

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.

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 as stipulatedby the accounting standard for financial instruments. Held-to-maturity
securities are stated at amortized cost. Marketable securities with market
quotations for available-for-sale securities are stated at fair value, and net
unrealized gains and losses on these securities are reported as accumulated
other comprehensive income in net assets, net of applicable income
taxes. Gains and losses on the disposition of available-for-sale securities
are computed based on the moving average method. Nonmarketablesecurities without available market quotations for available-for-salesecurities are carried at cost determined by the moving average method.
Adjustments in carrying values of individual securities are charged toincome through write-downs when a decline in value is deemed otherthan temporary.

Accounting for derivatives

As of March 31, 2014 and 2013, the Seino Group did not hold nor
had it issued any derivative instruments.

Allowance for doubtful accounts

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

(f)Inventories

Millions of yen

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

Property subject toimpairment:(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 and property held for lease. Buildings
acquired on and after April 1, 1998 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, capitalize assets used under finance leases,
except for certain immaterial or short-term finance leases accounted for
as operating leases. Depreciation of leased assets capitalized in financelease transactions as lessee is computed by the straight-line method
over the lease 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 the operatinglease accounting and is depreciated over the lease contract terms by thestraight-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.
(Changes in accounting policies with amendment of respective law
or regulation that are not distinguishable from changes in accounting
estimates)
From the year ended March 31, 2013, in accordance with theamendment in Corporate Tax Law, the Company and its domestic
subsidiaries have changed its depreciation method for property andequipment. Assets acquired on or after April 1, 2012 are depreciatedusing the method prescribed in the amended Corporate Tax Law. The
effects of this change on profit or loss for the year ended March 31, 2013
were not material.

(h) Intangible assets

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

(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 thatthe carrying amount of an asset may not be recoverable. An impairment
loss shall be recognized in the income statement by reducing the carrying
amount of the impaired asset or group of assets to the recoverable
amount to be measured as the higher of the asset’s net selling priceor 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 fromother groups of assets. For the purpose of recognition and measurementof impairment loss, fixed assets are grouped into cash-generating units
such as operating business branches other than idle or unused property.
At March 31, 2014, 2013 and 2012, recoverable amounts of assets were
measured based on value in use calculated using discounted future cash
flows at interest rates principally of 1.7%, 1.9% and 2.5%, respectively,or net selling prices using primarily appraisal valuations. As a result, theSeino Group recognized impairment loss as follows:

Impairment loss recorded:

2014

2013

2012

20 businessbranchesand 4 idle
properties

42 businessbranchesand 5 idle
properties

36 businessbranchesand 9 idle
properties

for land¥396 ¥for buildings and structures44—for other property
¥
440 ¥

(j)

2,174 ¥
20
5
2,199 ¥

Thousandsof U.S.
dollars
2014

845 $ 3,845
244
427
4 —
1,093 $ 4,272

Accumulated impairment losses have been directly deducted from theapplicable assets.

Employee retirement benefits

Employees who terminate their service with the Seino Group areentitled to retirement benefits generally determined by reference to basic
rates of pay at the time of termination, length of service and conditions
under which the termination occurs.
The Seino Group has recognized retirement benefits for employees,
including pension cost and related liability, based on the actuarial present
value of retirement benefit obligation using the actuarial appraisal
approach and the fair value of pension plan assets available for benefits
at the fiscal year-end. In the calculation of the retirement benefit
obligation, the expected retirement benefits are attributed to the period
up to the end of the respective fiscal year based on the straight-line
method. Actuarial differences arising from changes in the retirement
benefit obligation or the value of pension plan assets resulting from
actual outcomes different from that which were assumed and fromchanges 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 theyarise. Past service cost is amortized using the straight-line method overprincipally ten years, a period within the average remaining service yearsof employees from the year in which it occurs.
Effective from the year ended March 31, 2014, the Company andits domestic subsidiaries have applied the Accounting Standard for
Retirement Benefits (ASBJ Statement No. 26, revised on May 17,
2012 (hereinafter, “Statement No. 26”)) and Guidance on AccountingStandard for Retirement Benefits (ASBJ Guidance No. 25, revised on
May 17, 2012 (hereinafter, “Guidance No. 25”)), except Article 35 ofStatement No. 26 and Article 67 of Guidance No. 25, and accordingly,
actuarial differences and past service cost that had yet to be recognizedin profit or loss have been recognized as retirement benefit adjustmentof accumulated other comprehensive income within net assets, after
adjusting for tax effects, and the difference between retirement benefit
obligations and plan assets has been recognized as employee retirement
benefit asset or liability in the balance sheet. In accordance with
Article 37 of Statement No. 26, this accounting change has not been
retrospectively applied to the financial statements in prior years, andthe effect of the change in accounting policies arising from the initial
application has been recognized in retirement benefit adjustment inaccumulated other comprehensive income.
As a result of the application, at March 31, 2014, the Seino Group
recognized employee retirement benefit asset in the amount of ¥1,569
million ($15,233 thousand) and employee retirement benefit liability inthe amount of ¥60,707 million ($589,388 thousand). Also, accumulated
other comprehensive income was ¥1,068 million ($10,369 thousand) lessand minority interests ¥188 million ($1,825 thousand) more at March
31, 2014 than the amounts that would have been reported without thechange.
Until the year ended March 31, 2013, unrecognized actuarial
differences and unrecognized past service cost were not recognizedin the balance sheet under the previous standard, and the difference
between the retirement benefit obligation and plan assets adjusted bysuch unrecognized amounts was recorded as “Provision for employee
retirement benefits” in the accompanying consolidated balance sheet.

15

(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. The Company andcertain 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 on internal rules, in accordance with the Japanese Institute ofCertified 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)

(p)

(q)

(r)

(s)

16

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 ofexisting 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. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in the period that includes the promulgation date.

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.

Appropriation of retained earnings

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

Translation of foreign currency accounts

Receivables, payables and securities, other than stocks of subsidiaries
and certain other securities, are translated into Japanese yen at theexchange rates prevailing at the fiscal year-end. Transactions in foreign
currencies are recorded based on the prevailing exchange rates on thetransaction dates. Resulting translation gains and losses are included incurrent 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 minority interests,
are reported as foreign currency translation adjustments in a componentof net assets on the accompanying consolidated balance sheets.

Per share data

Basic net income per share is computed by dividing income available
to common shareholders by the weighted average number of sharesof common stock outstanding during the respective year, retroactively
adjusted for stock splits. Unless there is an anti-dilutive effect, diluted
net income per share is calculated to reflect the potential dilution
assuming that all convertible bonds are converted at the time of issue.
Diluted net income per share is not disclosed as Seino Group had no
dilutive common shares for the years ended March 31, 2013 and 2012.
Cash dividends per share shown for each fiscal year in theaccompanying consolidated statements of income represent dividends
declared as applicable to the respective years.

Adoption of consolidated taxation system

Effective from the fiscal year ended March 31, 2013, the Company
and some of its subsidiaries have adopted the consolidated taxation
system, with the Company as the taxable parent company. Effective

Adoption of Accounting Standards for Accounting
Changes and Error Corrections

The Company and its domestic subsidiaries have adopted “AccountingStandards for Accounting Changes and Error Corrections” (ASBJ
Statement No. 24, issued on December 4, 2009) and “Guidance on
Accounting Standard for Accounting Changes and Error Corrections”(ASBJ Guidance No. 24, issued on December 4, 2009) for accountingchanges and corrections of prior period errors made after the beginningof the fiscal year ended March 31, 2012.

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

(o)

(t)

Revenue recognition for freight charges(m) Bond issuance cost(n)from the fiscal year ended March 31, 2012, accounting treatment andpresentation regarding deferred taxes are based on ASBJ PITF No. 5,“Practical Solution on Tax Effect Accounting Under the Consolidation
Taxation System (Part1)” and ASBJ PITF No. 7, “Practical Solution
on Tax Effect Accounting under the Consolidation Taxation System(Part 2),” under the assumption that the Company would adopt theconsolidated taxation system, as the Company received approval from
Commissioner of the National Tax Agency of Japan to adopt theconsolidated taxation system effective from the following year.

(u)

Accounting standard issued but not yet adopted

ASBJ statement No. 26 and ASBJ Guidance No. 25 have been issued
but not yet adopted or early adopted in these consolidated financial
statements.
(1) Major changes due to the issuance of the above new standard andrelated guidance are as follows:In determining the method of attributing expected benefit to periods,
the revised standard allows a choice between the benefit formula
method and the straight-line method. The revised standard also
amends the method for determining the discount rate.
(2) Effective dates
Amendments related to determination of retirement benefit
obligations and current service costs are effective from the beginningof the fiscal year ending March 31, 2015 and are not retrospectively
applied to the consolidated financial statements in prior years.
(3) Effect of application of the standard
The Company and its domestic subsidiaries are currently inthe process of determining the effects of these standards on the
consolidated financial statements.

3. Financial Instruments
Information on financial instruments for the years ended March 31,
2014 and 2013 is set forth below.
(1) Qualitative information on financial instruments(a) Policies on Financial Instruments
			The Seino Group implements its Cash Management System foreffective investments and funding. The Company invests in low-risk andshort-term instruments in accordance with its internal fund management
rules. The Company raises funds mainly through indirect financing suchas bank loans for investments in facilities taking immediate liquidity into
consideration.
(b) 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 toforeign 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 them
denominated in foreign currency, which exposes them to foreign currency
fluctuation risk.
			Some bank loans and convertible bonds are used principally forcapital investments and are partially exposed to interest rate fluctuation
risk.
(c) Risk Management for Financial Instruments(1) Monitoring of credit risk
			In accordance with internal policies for credit risk management,each subsidiary monitors the creditworthiness of its customers
and manages the terms and conditions of payment, due dates andremaining balances to reduce such risk. Regarding held-to-maturity

securities, the Company invests in high credit-rating bonds inaccordance with its internal fund management rules. As a result, therisk is de-minimis.
		(2) Monitoring market risk
			The Board of the Directors regularly monitors market risk basedon 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 relationshipwith the issuers.
		(3) 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 overdrafts,
enabling the Seino Group to manage liquidity risk.
(d) Supplemental information on fair values
The fair values of financial instruments are based on their market
prices. The fair values of financial instruments with no available market
prices are determined by using prices calculated in a reasonable manner.
However, since certain assumptions are used in the computation of thereasonable estimates, the result may be different if alternative assumptions
are used.
(2) Fair values of financial instruments
		The fair and carrying values of the financial instruments included in
the consolidated balance sheets at March 31, 2014 and 2013, other thanthose for which the fair value was extremely difficult to determine, are set
forth in the table below.
Carrying value

At March 31, 2014:
Cash and cash equivalents ¥Short-term investments
Trade receivables
Investment securities¥
			Total assets
Trade payables¥
Short-term borrowings
Convertible bonds
Long-term bank loans,including current portion¥
			Total liabilities

Trade payables¥
Short-term borrowings
Long-term bank loans,including current portion¥
			Total liabilities

Difference

55,557 ¥42,172
106,846
23,189227,764 ¥55,55742,172
106,846
23,189227,764

57,588 ¥2,465
10,04557,588 ¥—2,465 —10,545500

163
70,261 ¥163 —
70,761 ¥500

Carrying value

At March 31, 2013:
Cash and cash equivalents ¥Short-term investments
Trade receivables
Investment securities¥
			Total assets

Fair value
Millions of yen

¥—
—
—
—
¥—

Fair value
Millions of yen

Difference

54,055 ¥22,879102,618
19,753
199,305 ¥54,05522,879102,618
19,753
199,305

¥—
—
—
—
¥—

57,767 ¥2,473

57,767 ¥—2,473 —289
60,529 ¥288
60,528 ¥(1)(1)

Carrying value
Fair value
Difference
Thousands of U.S. dollars

At March 31, 2014:
Cash and cash equivalents $ 539,388 $ 539,388 $—Short-term investments
409,437
409,437 —
Trade receivables
1,037,340
1,037,340 —
Investment securities
225,136
225,136 —$ 2,211,301 $ 2,211,301 $—			Total assets
Trade payables$
Short-term borrowings
Convertible bonds
Long-term bank loans,including current portion$
			Total liabilities

559,107 $23,932
97,524559,107 $—
23,932 —
102,378
4,854

1,583
682,146 $1,583 —687,000 $4,854

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

Thousands of
U.S. dollars¥$ 14,971
4,854$ 19,825

2014
Carrying value:
Unlisted equity securities,
other than those of affiliates ¥ 1,542
500
Preferred equity securities¥ 2,042

2013

¥

1,563
500
2,063

2014

iii) 	The redemption schedule for financial assets with maturities at
March 31, 2014 were as follows:

Due in 1 year

At March 31, 2014:
Cash and cash equivalents ¥Short-term investments
Trade receivables
Investment securities –		bonds and other¥

Due after Due after
1 years
5 years
through 5
throughyears
10 yearsMillions of yen

Dueafter 10years

55,557 ¥— ¥— ¥42,172——
83,57922,089
1,178

—
—
—

—
300
—
181,308 ¥ 22,389 ¥ 1,178 ¥——Due after Due after
1 years
5 years
through 5
through
Due in 1 yearyears
10 yearsThousands of U.S. dollars

Due
after 10years

At March 31, 2014:
Cash and cash equivalents $ 539,388 $— $— $Short-term investments
409,437——
Trade receivables
811,447
214,456
11,437
Investment securities –
—
2,913
—
		bonds and other$ 1,760,272 $ 217,369 $ 11,437 $

—
—
—
—
—

17

iv) For the repayment schedule for convertible bonds and long-termbank loans at March 31, 2014, see Note 9, “Short-term Borrowingsand Long-term Debt.”

4. Inventories
Inventories at March 31, 2014 and 2013 were as follows.
Millions of yen

Merchandise and finished products ¥Work in process
Raw materials and supplies
¥

2014
6,429
1,068
784
8,281

2013
7,118
771
699
¥ 8,588¥

Thousands of
U.S. dollars

2014$ 62,417
10,3697,612$ 80,398

5. Investments
At March 31, 2014 and 2013, short-term investments consisted of thefollowing:
Millions of yen

2014Marketable securities:¥ 28,000
Bonds and other		 Total marketable securities
28,000Time deposits with an original
maturity of more than three months 14,172¥ 42,172

2013

Thousands of
U.S. dollars

2014¥ 10,000
10,000$ 271,845
271,845

12,879¥ 22,879

137,592$ 409,437

At March 31, 2014 and 2013, investment securities consisted of thefollowing:
Millions of yen

2014Marketable securities:
Equity securities¥ 22,793
Bonds
302
94
Other
		 Total marketable securities
23,1892,042
Other non-marketable securities¥ 25,2312013¥ 19,327
302
124
19,753
2,063¥ 21,816

Thousands of
U.S. dollars

2014$ 221,291
2,932
913
225,136
19,825$ 244,961

Marketable securities classified as available-for-sale are stated at fairvalue with unrealized gains and losses excluded from current earnings
and reported as a net amount within the net assets account until realized.
At March 31, 2014 and 2013, gross unrealized gains and losses formarketable securities classified as available-for-sale were as follows:
Cost

At March 31, 2014:
Equity securities
Bonds
Other
At March 31, 2013:
Equity securities
Bonds
Other
At March 31, 2014:
Equity securities
Bonds
Other

Gross
Gross
unrealized unrealized
gains
lossesMillions of yen

Fair andcarrying
value

Thousands of
U.S. dollars

3,297
—
3,297

$ 32,010—$ 32,010

2014

2013

¥
¥

2,985
9
2,994

2014

6. Property and Equipment
At March 31, 2014 and 2013, property and equipment consisted of
the following:
Millions of yen

Thousands of
U.S. dollars

2014
2013
2014
Property and equipment, at cost:Land¥ 169,567 ¥ 169,794 $ 1,646,282
Buildings and structures
234,410232,569
2,275,825
Vehicles99,387
98,136964,922
Machinery and equipment
33,23932,106
322,709
Construction in progress
2,642
252
25,650
281
438
2,729
Other
539,526
533,295
5,238,117
Less accumulated depreciation (268,638) (262,928) (2,608,136)
		 Total property and equipment ¥ 270,888 ¥ 270,367 $ 2,629,981
One of the consolidated subsidiaries elected to carry out a onetime revaluation to restate the cost of land used for business operations
at values reassessed on March 31, 2002, reflecting adjustments forland shape and other factors based on appraisal values issued by theJapanese National Tax Agency in accordance with the Law Concerning
Revaluation of Land. According to the law, the excess of the original
book value over reassessed value, net of the tax effect and minority
interests portions, is recorded in net assets as land revaluation decrement
account in the accompanying consolidated balance sheets. At March 31,
2014 and 2013, the difference between the carrying values of land used
for business operations after revaluation over the current market valuesof the land at the fiscal year-end amounted to ¥1,756 million ($17,049
thousand) and ¥1,643 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, 2014 and 2013 and the fair values of the rental properties wereas follows:
Millions of yen

Thousands of
U.S. dollars¥

9,621 ¥ 13,224 ¥300
228,05441¥ 37,975 ¥ 13,267 ¥(52) ¥ 22,793
—
302
(1)
28,094(53) ¥ 51,189

2014
Carrying value at the beginning of year ¥ 13,643
11
Net changes during the year
Carrying value at the end of year ¥ 13,654
Fair value at the end of year *¥ 18,084¥

8,784 ¥ 10,639 ¥
300
2
10,09927¥ 19,183 ¥ 10,668 ¥(96) ¥ 19,327
—
302
(2)
10,124(98) ¥ 29,753

Note: * Fair value was measured at the reasonable estimated value based
principally on a real estate appraisal or property tax bases.

$ 93,408 $ 128,388 $
2,913
19
272,369399$ 368,690 $ 128,806 $(505) $ 221,291—
2,932(10) 272,758(515) $ 496,981

Thousands of U.S. dollars

At March 31, 2014 and 2013 investments in and long-term loans toaffiliates consisted of the following:

18

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

Millions of yen

2013
2014
¥ 13,888 $132,456
(245)
107
¥ 13,643 $132,563¥ 17,609 $ 175,573

Profit and loss recorded for rental properties for the fiscal years ended
March 31, 2014 and 2013 were as follows:
Millions of yen

Thousands of
U.S. dollars

2014
2013
2014
Operating revenue¥ 1,421 ¥ 1,438 $ 13,796
218
241
2,116
Operating costs
1,203
1,197
11,680
Income from rental operations
Gain(loss) of disposal of rental
property and other¥(156) ¥
(707) $ (1,515)

8. Asset Retirement Obligations
Asset retirement obligations are based upon estimated future
restoration obligations pursuant to office rental agreements. The asset
retirement obligations are calculated based upon the useful life designatedby law or the estimated office rental period and are discounted by theyield rate of government bonds.
Asset retirement obligations for the years ended March 31, 2014 and2013 were as follows:
Millions of yen

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

¥

¥

2014
2,478
38

¥

45
(24)
—
2,537 ¥

2013
2,463
5

Thousands of
U.S. dollars

2014$ 24,058
369

43
437
(39)
(233)
6
—
2,478 $ 24,631

9. Short-term Borrowings and Long-term Debt
At March 31, 2014 and 2013, short-term borrowings consistedof the following:
Millions of yen

Unsecured bank overdrafts withinterest rates of 1.3% per annum¥at March 31, 2014.
Short-term bank loans, unsecured
with interest rates ranging
from 0.246% to 1.475% perannum at March 31, 2014
¥

2014

2013

25

¥

33

2,440
2,465

¥

2,440
2,473

Thousands of
U.S. dollars

2014

$

243

23,689$ 23,932

At March 31, 2014, the Company and certain subsidiaries
had unsecured overdraft agreements with 13 banks. Under
such agreements, the Company and these subsidiaries wereentitled to withdraw up to ¥43,910 million ($426,311 thousand).
The Company and the subsidiaries were not obligated to pay
commitment fees on the unused portions of such overdraft facilities.
At March 31, 2014 and 2013, long-term debt consisted of thefollowing:
Millions of yen

Thousands of
U.S. dollars

2014
2013
2014
Zero coupon convertible bonds
due October 2018, including
unamortized premium (2014 — $ 97,524¥45 million ($437 thousand)) ¥ 10,045 ¥Loans from government agencies
and banks, repayable due
through 2017, with interest rates
ranging from 0.95% to 3.1% perannum at March 31, 2014:
		Secured
105
227
1,020
		Unsecured
58
62
563
6
25
58
Capitalized lease obligations
10,214314
99,165
(81)
(137)
(786)
Less current portion¥ 10,133 ¥177 $ 98,379
At March 31, 2014, the current conversion prices of zero coupon
convertible bonds due in 2018 were ¥1,515 per share and were
subject to adjustment in certain circumstances, including in theevent of a stock split. At March 31, 2014, the number of sharesof common stock necessary for conversion of all convertible bonds
outstanding was approximately 7 million.
At March 31, 2014 and 2013, respectively the following assets
were pledged as collateral for certain long-term debt:

Millions of yen

Thousands of
U.S. dollars

3,238
1,210

$

2014
Land
Buildings and structures

¥

2013

¥

2014

3,926
1,593

31,437
11,748The aggregate annual maturities of long-term debt as of March 31,
2014 were as follows:Year ending March 31,
2015
2016
2017
2018
2019
ThereafterThousands ofMillions of yen
U.S. dollars
¥
81
$
786
34
330
8
78
6
58
10,002
97,10738369¥
10,169$98,728

10. Employee Retirement Benefits
At March 31, 2014, The Company and its domestic subsidiaries
had mainly unfunded defined benefit plans, with rules andregulations determined by each subsidiary. In addition, somedomestic subsidiaries had Smaller Enterprise Retirement Allowance
Mutual Aid or Specific Retirement Allowance Mutual Aid.
Other subsidiaries had funded defined benefit plans. One
company belonged to a comprehensive employees’ pension fund
for the defined benefit corporate pension plan. One company had
established a retirement benefit payment trust.
The retirement benefit obligation of certain subsidiaries wascalculated using the simplified calculation method as permitted by
the accounting standard for employee retirement benefits.
As of and for the year ended March 31, 2014, defined benefit
plans, including plans applying the simplified method were as
follows:i) Movement in retirement benefit obligations:
Balance at April 1, 2013
Service cost
Interest cost
Actuarial differences
Benefits paid
Past service cost
Balance at March 31, 2014

Millions of yen¥¥

64,8783,596
581
42(3,867)
24
65,254

Thousands of U.S.
dollars$$

629,883
34,913
5,641
408(37,544)233
633,534ii) Movements in plan assets:
Millions of yen

Balance at April 1, 2013¥
Actuarial differences
Contributions paid by the employer
Benefits paid¥
Balance at March 31, 2014

2,792
3,383
5
(64)
6,116

Thousands of U.S.
dollars$$

27,107
32,84549(622)
59,379iii) Reconciliation from retirement benefit obligations and plan assets toemployee retirement benefit asset or liability:
Millions of yen

Funded retirement benefit obligations ¥Plan assets
Unfunded retirement benefit obligations
Net employee retirement benefit(asset)/liability at March 31, 2014 ¥Employee retirement benefit liability
Employee retirement benefit asset
Net employee retirement benefit(asset)/liability at March 31, 2014 ¥Thousands of U.S.
dollars

4,750(6,116)(1,366)60,504$

46,117(59,379)(13,262)
587,417

59,138$574,155

60,707(1,569)59,138589,388(15,233)$

574,155
19iv)	Net periodic retirement benefit expenses, including plans applying
the simplified method:
Millions of yen

Service cost¥
Interest cost
Amortization of actuarial differences
Amortization of past service cost
Net periodic retirement benefit
expenses for the fiscal year¥
ended March 31, 2014

Thousands of U.S.
dollars

3,596
581
553
226

$

34,913
5,641
5,369
2,194

4,956

$

48,117v)	Retirement benefit adjustment in accumulated other comprehensive
income, before tax effects:
Millions of yen

Past service cost that yet to be recognized ¥Actuarial differences yet to be recognized
Total balance at March 31, 2014 ¥

(232)
1,631
1,399

Thousands of U.S.
dollars$(2,252)
15,835
13,583$

Percent

1%
99%
100%

2. Long-term expected rate of return
Current and target asset allocations, historical and expected
returns on various categories of plan assets have been considered
in determining the long-term expected rate of return.
vii) Actuarial assumptions
	The principal actuarial assumptions at March 31, 2014 (expressed asweighted averages):
1.0%
0.0%

The following table reconciles the benefit liability as of March
31, 2013:
Reconciliation of benefit liability:
Retirement benefit obligation
Less fair value of pension plan assets at end of year

Millions of yen¥

64,878(2,792)62,08631(5,526)

Unrecognized past service cost
Unrecognized actuarial differences (loss)
Net amounts of provision for employee retirement
benefits recorded on the consolidated balance¥
sheets56,591

The components of net periodic retirement benefit expenses forthe years ended March, 2013 and 2012 were as follows:
Millions of yen

Net periodic retirement benefit expenses:
Service cost¥
Interest cost
Expected return on pension plan assets
Amortization of actuarial differences
Amortization of past service cost
Gain on abolishment of retirement benefit plan*
Special extra retirement payments*¥
			 Total retirement benefit expenses

2013

3,288
1,141
—
204
304
—
—
4,937

2012

¥

¥

3,243
1,173
(1)
715
247
(149)
421
5,649

Note: *	Some of the subsidiaries abolished the lump-sum retirement benefit
plans for the year ended March 31, 2012. Then, these transactions
were accounted for in accordance with the implementation guidance
20

2013
Method attributing the projected Straight-line
methodbenefits to periods of services
Discount rate
principally 1.0%
Expected rate of return on—
pension plan assets
principally
Amortization of past service cost
10 years
Amortization of actuarial
principally
10 yearsdifferences

2012
Straight-line
method2.0%
2.0%

principally
10 yearsprincipally
10 years

11. Contingent Liabilities

12. Lease Commitments*99% of total plan assets consisted of a retirement benefit payment
trust.

Discount rateLong-term expected rate of return

Major assumptions used in the calculation of the above
information for the years ended March 31, 2013 and 2012 were as
follows:

At March 31, 2014 and 2013, the Seino Group was contingently
liable for trade notes endorsed to affiliates and third parties andfor guarantees, including substantial guarantees, principally ofindebtedness of third parties in the aggregate amount of ¥1,660
million ($16,117 thousand) and ¥1,767 million, respectively.

vi) Plan assets
1. Plan assets comprise:
Bonds
Equity securities
Total*of accounting for transfer between retirement benefit plans and gain
on abolishment of retirement benefit plan was recorded as otherincome. In addition, some subsidiaries paid special extra retirement
benefits under the early retirement program for the year ended
March 31, 2012.

As lessee, the Seino Group has entered into various rental and leaseagreements for land and buildings to be used for truck terminals andwarehouses which are generally cancelable with a few months' advancenotice, except for certain operating lease agreements. The aggregate
minimum future lease payments for such non-cancelable operating leaseagreements, including the imputed interest portion, as lessee at March
31, 2014 and 2013 were as follows:
Millions of yen

Finance leases:
Due within one year
Due after one year

2014
¥

460
1,209
¥ 1,669

2013

¥
¥

523
1,237
1,760

Thousands of
U.S. dollars

2014$ 4,466
11,738$ 16,204

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, 2014 and2013 the aggregate future minimum lease commitments to be received
for such non-cancelable 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

287
566
853

$

2014
¥
¥

2013

¥
¥

268
580
848

2014

2,787
5,495
$ 8,282

13. Net Assets(a)		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 capitaland all legal earnings reserve may be transferred to other capital surplus
and retained earnings, respectively, which are potentially available fordividends.
			
At March 31, 2014 and 2013, 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 ($41,379
thousand) at March 31, 2014 and 2013.
			The maximum amount that the Company can distribute as dividends
is calculated based on the non-consolidated financial statements of theCompany in accordance with Japanese laws and regulations.
(b) At the annual shareholders’ meeting held on June 26, 2014, theshareholders approved cash dividends of ¥11 per share, amounting to¥2,189 million ($21,252 thousand). The appropriation has not been
accrued in the consolidated financial statements as of March 31, 2014as such appropriations are recognized in the period in which they areapproved by the shareholders.

14. Income Taxes
The tax effects of temporary differences that give rise to a significant
portion of deferred tax assets and liabilities at March 31, 2014 and 2013
were as follows:
Millions of yen

Thousands of
U.S. dollars

2014
2013
2014
Deferred tax assets:
Employee retirement benefit liability ¥ 22,111 ¥ 21,015 $ 214,670
Enterprise tax accruals
524
336
5,087
Accrued bonuses
3,587
3,467
34,825Intercompany capital gains
1,044
1,028
10,136
Operating loss carryforwards
383
590
3,718
Loss on assets transferred
1,433
1,471
13,913
Impairment loss on fixed assets
14,774
14,929143,437
Allowance for doubtful accounts
136
173
1,320
4,318
4,383
41,923
Other
48,31047,392
469,029(18,282)(18,820)(177,495)
Less valuation allowance
30,02828,572
291,534
Deferred tax liabilities:
Deferred capital gains
5,774
5,870
56,058
Unrealized gains on available4,241
3,363
41,175for-sale securities
Valuation adjustments for
12,137
12,373
117,835
consolidation
Employee retirement benefit asset
192
—
1,864
306
315
2,971
Other
22,65021,921
219,903¥ 7,378 ¥ 6,651 $ 71,631
Net deferred tax assets
At March 31, 2014 and 2013, deferred tax assets and liabilities wererecorded as follows:
Millions of yen

Deferred tax assets:
Current
Noncurrent
Deferred tax liabilities:
Current
Noncurrent

2014¥ 4,863
10,990
—
8,475

2013

¥

Thousands of
U.S. dollars

2014

4,627
9,487

$ 47,214106,699—
7,463—
82,282In assessing the realizability of deferred tax assets, management of the
Seino Group considers whether some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets
is dependent upon the generation of the future taxable income during
the periods in which those temporary differences become deductible. At
March 31, 2014 and 2013, a valuation allowance was provided to reducedeferred tax assets to the extent that the management believed that theamount of the deferred tax assets was not realizable.
A reconciliation of the differences between the Japanese statutory
tax rate and the effective income tax rate on pretax income reflectedin the accompanying consolidated statements of income for the year
ended March 31, 2014 was not disclosed because the difference was notmaterial. The reconciliation for the years ended March 31, 2013 and2012 was as follows:

Percentage of pretax income

Japanese statutory tax rate
Increase (decrease) due to:Permanently nondeductible expenses
Tax exempt income
Local minimum taxes - per capita levy
Amortization of goodwill andnegative goodwill
Equity in net (income)/loss of affiliates
Changes in valuation allowance
Adjustment of deferred tax assets
and liabilities for income tax ratechanges
Other
Effective income tax rate

2013
37.2%

2012
40.4%

0.7
(0.4)
3.7

0.7
(0.8)
3.5

(6.3)
(0.5)
(6.3)

(6.9)
(0.1)
(11.6)

—
0.6
28.7%

4.0
1.2
30.4%

On December 2, 2011, amendments to the Japanese tax regulations
were enacted into law. As a result of these amendments, the statutory
income tax rate for the Company was reduced to 37.2% for years
beginning on and after April 1, 2012 and 34.8% for years beginning on
and after April 1, 2015. Based on the amendments, the statutory income
tax rates utilized for the measurement of deferred tax assets and liabilities
expected to be settled or realized from April 1, 2012 to March 31, 2015
and on or after April 1, 2015 were 37.2% and 34.8%, respectively, as ofMarch 31, 2012. Due to these changes in statutory income tax rates,
net deferred tax assets were ¥397 million less as of March 31, 2012and deferred income tax expense recognized for the year ended March
31, 2012 ¥740 million more than the amounts that would have beenreported without the change.
Following the promulgation on March 31, 2014 of the “Act for Partial
Revision of the Income Tax Act, etc.” (Act No. 10 of 2014), a special
surtax to be applied to restoration work in connection with the Great
East Japan Earthquake has been abolished from the fiscal year beginningon or after April 1, 2014. In line with this revision, the Company haschanged the statutory tax rate used to calculate deferred tax assets andliabilities from 37.2% to 34.8% for temporary differences expected to bereversed in the fiscal year beginning on April 1, 2014. As a result of thistax rate change, deferred tax assets were ¥323 million ($3,136 thousand)less at March 31, 2014 and deferred income taxes ¥323 million ($3,136
thousand) more for the year ended March 31, 2014 than the amounts
that would have been reported without the change.

15. Comprehensive Income
Amounts reclassified to net income (loss) in the current periodthat were recognized in other comprehensive income in the current
or previous periods and the tax effects for each component of othercomprehensive income for the years ended March 31, 2014, 2013
and 2012 were as follows:

Thousands of
U.S. dollars

Millions of yen

2014
2013
2012
2014
Unrealized gains (losses) on securities
Increase (decrease) during the year ¥ 2,649 ¥ 3,742 ¥ (244) $ 25,718
(4)
3
18
(39)
Reclassification adjustments
Subtotal, before tax
2,645
3,745
(226)
25,679(878) (1,078)
447(8,524)
Tax effectSubtotal, net of tax
1,767
2,667
221
17,155
Foreign currency translation adjustments
Increase (decrease) during the year
Reclassification adjustments
Subtotal, before tax
Tax effectSubtotal, net of tax

101
—
101
—
101

96
—
96
—
96

Shares of other comprehensive
income of affiliates accounted forusing equity method
Increase (decrease) during the year
42——
Reclassification adjustments
Subtotal
4
2
Total other comprehensive income ¥ 1,872 ¥ 2,765 ¥

(44)
—
(44)
—
(44)

981
—
981
—
981

—
—
—
177

39
—
39
$ 18,17521

16. Segment Information
1.

2.
3.

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. Eachsubsidiary plans and operates each business under its control. In addition, some of the subsidiaries engage in leasing for real estate services to make good useof their facilities. Therefore, the Seino Group consists of business segments that are based on the business conducted by each subsidiary. The Seino Group’sreportable segments are “transportation services,” “vehicle sales,” “merchandise sales” and “leasing for real estate 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
and transfer amounts are based on market price.

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

Information about reportable segment for the years ended March 31, 2014, 2013 and 2012 is summarized as follows:

For the year 2014:
Operating revenue:
		External customers
		 Intersegment sales or transfer
			Total operating revenue
Segment income (*2)

Transportation
services¥¥

Segment assets (*3)¥
Depreciation
Amortization of goodwill
Investments in affiliates accounted
for using the equity method
Increase in tangible and intangible
fixed assets
For the year 2013:
Operating revenue:
		External customers¥
		 Intersegment sales or transfer
			Total operating revenue¥
Segment income (*2)
Segment assets (*3)¥
Depreciation
Amortization of goodwill
Investments in affiliates accounted
for using the equity method
Increase in tangible and intangible
fixed assets
For the year 2012:
Operating revenue:
		External customers¥
		 Intersegment sales or transfer
			Total operating revenue¥
Segment income (*2)
Segment assets (*3)¥
Depreciation
Amortization of goodwill
Investments in affiliates accounted
for using the equity method
Increase in tangible and intangible
fixed assets
For the year 2014:
Operating revenue:
		External customers
		 Intersegment sales or transfer
			Total operating revenue
Segment income (*2)

Vehicle sales

Merchandise
sales

Leasing for realestate services

Other (*4)

Total

Adjustments(*1)

Consolidated

393,320 ¥1,548
394,868
12,779 ¥100,569 ¥8,110
108,679
5,352 ¥

33,306 ¥26,87560,181731 ¥Millions of yen
1,421 ¥
14,791 ¥
—
9,735
1,421
24,526
1,222 ¥
544 ¥

393,469 ¥
12,5696

100,313 ¥
1,680
59

15,067 ¥51—

12,707 ¥33—

22,510 ¥253
2544,066 ¥
14,58667(1,655) ¥(269)—

542,411
14,317
67

3,036

—

—

168

—

3,204

(3)

3,201

13,448

2,852

30

4

270

16,604(461)

16,143

371,546 ¥
1,536
373,082
6,918 ¥
379,649 ¥
12,639415

96,148 ¥
7,908
104,056
5,442 ¥
97,683 ¥1,732
78

32,457 ¥25,09457,551736 ¥
14,357 ¥65—

1,438 ¥—
1,438
1,215 ¥
12,653 ¥48—

14,596 ¥9,394
23,990495 ¥
19,129 ¥256
6516,185 ¥
43,932560,117
14,806 ¥523,471 ¥
14,740499— ¥(43,932)(43,932)(460) ¥
(13,004) ¥(254)—

516,185—
516,185
14,346510,467
14,486
499

2,783

—

—

107

—

2,890

(2)

2,888

9,877

3,524

14

25

349

13,789(336)

13,453

370,592 ¥1,574
372,166
7,240 ¥
384,612 ¥
13,559419

87,755 ¥
7,203
94,9584,464 ¥
95,399 ¥1,613
78

30,144 ¥25,49855,642723 ¥
14,421 ¥79—

1,416 ¥—
1,416
1,196 ¥
13,006 ¥47—

14,370 ¥10,64525,015697 ¥
18,397 ¥275
6504,277 ¥
44,920549,197
14,320 ¥525,835 ¥
15,573503— ¥(44,920)(44,920)(453) ¥
(24,872) ¥(249)—

504,277—
504,277
13,867500,963
15,324
503

2,724

—

—

67

—

2,791

12,798

2,726

2

121

15,685

Transportation
services

Vehicle sales$ 3,818,641 $ 976,398 $
15,02978,738
3,833,670
1,055,136$ 124,068 $
51,961 $Segment assets (*3)
$ 3,820,087 $Depreciation
122,029
Amortization of goodwill
58
Investments in affiliates accounted
for using the equity method
29,476
Increase in tangible and intangible
130,563
fixed assets

38

Merchandise
sales

323,359
260,922584,281
7,097

Leasing for realestate services

Other (*4)

543,407 ¥46,268589,675
20,628 ¥— ¥(46,268)(46,268)(439) ¥

543,407—543,407
20,189

Total

(3)

2,788

(303)

15,382Adjustments(*1)

Consolidated

Thousands of U.S. dollars$
13,796 $ 143,602 $ 5,275,796 $— $ 5,275,796—
94,515449,204(449,204)—
13,796238,117
5,725,000(449,204)
5,275,796$
11,864 $5,282 $ 200,272 $(4,262) $ 196,010

973,913 $16,311
573

146,282 $495—

123,369 $320—

218,543 $ 5,282,194 $
2,457
141,61219
650(16,068) $ 5,266,126(2,612)139,000
—
650

—

—

1,631

—

31,107(29)

31,07827,689

291

39

2,622

161,204(4,476)

156,728

Note: *1)	Adjustments column in the table above represents principally the elimination of intersegment transactions and balances, except for (*2) and (*3).
*2)	Segment income is reconciled to operating income in the accompanying consolidated statements of income. Segment income in the adjustments column represents
unallocated general corporate expenses which were not assigned to specific reportable segments, net of intersegment transactions.
*3)	Segment assets in the adjustments column represent unallocated general corporate items which were not assigned to specific reportable segments such as cash, shortterm and long-term investments in securities, net of intersegment balances.
*4)	Other segment represents the business segment not included in the reportable segments and includes the information services business, the housing sales business,the passenger transportation business and other business.
22

(Related information)
1. Information about products and services
The Company has not disclosed information about products and services because the Company has disclosed the same information above.
2. Information about geographic areas(1) Operating revenue
The Company has omitted the disclosure of operating revenue by geographic area because operating revenue to external customers in Japan accounts
for more than 90% of the amount of operating revenue reported in the consolidated statements of income.
(2) Property and equipment
The Company has omitted the disclosure of property and equipment by geographic area because property and equipment in Japan account for morethan 90% of the amount of property and equipment reported in the consolidated balance sheets.
3. Information about major customers
The Company has not disclosed information about major customers because no customer had contributed 10% or more to operating revenue in the
consolidated statements of income.
4. Information on impairment loss by reportable segments:
Impairment loss:
For the year 2014
For the year 2013
For the year 2012
Impairment loss:
For the year 2014
5.

Transportation
services

Merchandise
sales

Leasing for realestate services

¥

154 ¥
1,422
833

69 ¥
84
247

Millions of yen
— ¥
217 ¥
—
691
—
—

$

1,495 $

670 $Thousands of U.S. dollars— $2,107 $

Other

Total

— ¥
2
13

440
2,199
1,093

— $

4,272

Information on goodwill and negative goodwill incurred due to business combinations before April 1, 2010 by reportable segments:
Transportation
services

For the year 2014:
Amortization of goodwill¥
Amortization of negative goodwill

Vehicle sales

Merchandise
sales

6 ¥
2,972

59 ¥
—

11
3

—
—

For the year 2013:
Amortization of goodwill¥
Amortization of negative goodwill

415 ¥
2,972

As of March 31, 2013:
Balance of goodwill
Balance of negative goodwill

Leasing for realestate services

Millions of yen
— ¥
9

Other

Total

— ¥
—

2 ¥
61

—
—

—
—

—
—

11
3

78 ¥
—

— ¥
19

— ¥
—

6 ¥
64

499
3,055

17
2,975

59
—

—
9

—
—

2
61

78
3,045

For the year 2012:
Amortization of goodwill¥
Amortization of negative goodwill

419 ¥
3,168

78 ¥
—

— ¥
20

— ¥
—

6 ¥
67

503
3,255

As of March 31, 2012:
Balance of goodwill
Balance of negative goodwill

432
5,947

137
—

—
28

—
—

8
125

577
6,100

Transportation
services

Vehicle sales

Merchandise
sales

Leasing for realestate services

As of March 31, 2014:
Balance of goodwill
Balance of negative goodwill

For the year 2014:
Amortization of goodwill$
Amortization of negative goodwill
As of March 31, 2014:
Balance of goodwill
Balance of negative goodwill
6.

Vehicle sales

58 $28,854

Thousands of U.S. dollars
573 $
— $
— $
—
88
—

107
29

—
—

—
—

—
—

Vehicle sales

Merchandise
sales

Leasing for realestate services

Information on gain on negative goodwill by reportable segments:
Gain on negative goodwill:
For the year 2014
For the year 2013
For the year 2012
Gain on negative goodwill:
For the year 2014

Transportation
services

¥

— ¥
20
—

Transportation
services

$

— $

— ¥
16
—
Vehicle sales

Millions of yen— ¥——Merchandise
sales

Other

Thousands of U.S. dollars
— $
— $
— $

Total

19 $
592

650
29,534

—
—

107
29

Other

— ¥
—
—

Leasing for realestate services

67
3,042

Total

— ¥
—
—
Other

—
36
—
Total

— $

—

23

Report of Independent Auditors
Independent Auditors’ Report
To the Board of Directors of
SEINO HOLDINGS CO., LTD.:
We have audited the accompanying consolidated financial statements of SEINO HOLDINGS CO., LTD. (the “Company”) and its
subsidiaries, which comprise the consolidated balance sheets as at March 31, 2014 and 2013, and the consolidated statements of income,statements of comprehensive income, statements of changes in net assets and statements of cash flows for each of the years in the three-year
period ended March 31, 2014, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting
principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits inaccordance with auditing standards generally accepted in Japan. Those standards require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.
The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation andfair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, while
the objective of the financial statement audit is not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company and its
subsidiaries as at March 31, 2014 and 2013, and their financial performance and cash flows for each of the years in the three-year period ended
March 31, 2014, in conformity with accounting principles generally accepted in Japan.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2014 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 Consolidated Financial Statements.

August 22, 2014
Nagoya, Japan

24

Seino GroupThe Seino Group consists of Seino Holdings Co., Ltd. and 59 consolidated subsidiaries and 14 affiliates. The Seino
Group operates in five business segments: transportation services, vehicle sales, merchandise sales, leasing for realestate services and other services. The business relationship in the Seino Group is as follows.

Clients
Collection and
Delivery

VehiclesSales and Repairs

Domestic
Transportation
Seino Transportation Co., Ltd.
*1
Hokkaido Seino Transportation Co., Ltd. *1
Iwate Seino Transportation Co., Ltd.
*1
Miyagi Seino Transportation Co., Ltd.
*1
Kanto Seino Transportation Co., Ltd.
*1
Seibu Transportation 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 Hokkaido Express Co., Ltd.
*1
Seino Tokyo Express Co., Ltd.
*1
Seino Kanagawa 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
ASAHI CONPOU CO., LTD.
*1
Saitama Seino Transportation Co., Ltd. *2
Tokyo Seino Transportation Co., Ltd.
*2
Mikawa Seino Transportation Co., Ltd.
Ensyu Seino Transportation Co., Ltd.
Kumamoto Seino Transportation Co., Ltd.
Tango Seino Transportation Co., Ltd.
Box Charter Co., Ltd.
Cosmo Hokuriku Haiso Center Co., Ltd.

Sales

Services

Real Estate
Leasing

Vehicle Sales

Merchandise

Real Estate Leasing Services

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

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

Seino Transportation Co., Ltd.
*2
Arts Co., Ltd.

Marchandise
sales

Leasing forReal Estate Services

Information Services

VehicleSales*1

Japan Logistics
Development Co.,
Ltd.

*1

OthersInternational
Transportation
Seino Logix Co., Ltd.

Seino Information
Service Co., Ltd.

*1

United-Seino Transportation *1(Malaysia) Sdn. Bhd.
Seino Customs Clearance
Service Co., Ltd.

*1

Schenker-Seino Co., Ltd.

*2

*1
Asahi Agency Co., Ltd. (Advertising agency)
Suito Travel Co., Ltd. (Passenger transportation, Travel agency) *1*1Seino 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)
Seino Business Support Co., Ltd. (Business support services) *1*1
Seino Ecotrading Inc. (Wholesale of recycled resources)
Seino Financial Co., Ltd. (Settlement service representative) *1
Toyota Rent-A-Lease Gifu Co., Ltd. (Rental and lease)
Gifu Automotive Dealer Plaza Co., Ltd. (Rental office)

OtherTransportation
Services

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

59
4
10

25

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