Profile
Seino Holdings Co., Ltd. (“the Company”) began
business as a trucking company in 1930 and wasincorporated in 1946. Based in the city of Ogaki, Gifu
Prefecture, we are a leading trucking company, expandingin step with the growth of the Japanese economy and thedevelopment of the nation’s extensive expressway network.
On October 1, 2005, the Company transferred its
transportation business and other operations to a newcompany—which has taken the original name Seino
Transportation Co., Ltd.—and was renamed Seino
Holdings Co., Ltd., adopting a pure holding company
structure.
The Seino Group currently consists of the pure holding
company Seino Holdings, 59 consolidated subsidiaries and 13
affiliates engaged in transportation services, vehicle sales,
merchandise sales, leasing for real estate services and otherservices.
In its mainstay Transportation Services business, theCompany has taken steps to build even more convenientlogistics systems, all the while adhering to its “customer-first”
principle. As of March 31, 2010, Seino offers efficienttransportation services throughout Japan via its 631 domestic
terminals, a fleet of 24,501 trucks and a trucking network that
averages 5,000 routes daily. Overseas, Seino has transferred its
international forwarding operations to Schenker-Seino Co.,
Ltd., a joint venture established with Schenker AG in
Germany. Through this alliance, the Company aims to bolster
its competitiveness by optimizing the synergies of Seino’s
domestic transportation network and Schenker’s global
network and cutting-edge IT systems.
The Seino Group is committed toproviding rapid services that deliver
total customer satisfaction and willproceed down the “Road to Success”
to become a highly profitablecompany through initiatives todevelop a progressive business modelthat will become the standard fornext-generation transportation
business.
Forward-looking Statements:
In this annual report, statements other than historicalfacts are forward-looking statements that reflect theplans and expectations of the Company. These
forward-looking statements involve risks, uncertainties
and other factors that may cause the Company’s
actual results and achievements to differ materiallyfrom those anticipated in these statements.

Contents
Financial Highlights

1

To Our Shareholders, Customers and Friends

2

Special Feature

4

CSR Topics

6

Review of Operations

8

Financial Review

10

Six-year Summary

11

Consolidated Balance Sheets

12

Consolidated Statements of Income

13

Consolidated Statements of Changes in Net Assets

14

Consolidated Statements of Cash Flows

15

Notes to Consolidated Financial Statements

16

Report of Independent Auditors

25

Board of Directors / Corporate Data

26

Seino Group

27

Board of Directors(As of June 29, 2010)
Chairman andChief Executive Officer
Yoshikazu Taguchi

Outside Directors
Yuji Tanahashi
Kenjiro Ueno

President and Chief
Operating Officer
Yoshitaka Taguchi

Standing Statutory Auditors
Yoshio Matsuoka
Takahiko Kumamoto

Directors
Takao Taguchi
Yoshitaka Nasuno
Mitsuo Mekada
Shizutoshi Otsuka
Hidemi Maruta
Shinpei Ando

Outside Statutory Auditors
Fumio Kato
Eiji Kasamatsu

SEINO HOLDINGS CO., LTD.

Financial Highlights(Billions of Yen)

For the Years March 31, 2010, 2009 and 2008
Thousands of
U.S. Dollars (Note)

Millions of Yen
2010

NON-CONSOLIDATED BASIS:
Operating revenue
Operating income
Income before income taxes
Net income
Net income per share (in the whole yen and dollars):
CONSOLIDATED BASIS:
Operating revenue
Operating income
Income before income taxes and minority interests
Net income
Net income per share (in the whole yen and dollars)

¥

2009

1,502
786
1,037
1,033
5.18

485,808
6,621
12,940
9,477
47.60

¥

2,363
1,666
443
439
2.20

433,766
3,333
6,941
3,391
17.03

2008

2,227
1,662
1,904
1,902
9.53

$ 16,151
8,452
11,151
11,1080.05

451,978
9,925
13,383
6,018
30.27

5,223,742
71,194
139,140
101,903
0.51¥

Thousands of
U.S. Dollars (Note)

Millions of Yen
NON-CONSOLIDATED BASIS:
Cash and cash equivalents, and short-term investments
Property and equipment, net of accumulated depreciation
Total assets
Long-term debt and other long-term liabilities
Net assets
Net assets per share (in the whole yen and dollars)
CONSOLIDATED BASIS:
Cash and cash equivalents, and short-term investments
Property and equipment, net of accumulated depreciation
Total assets
Long-term debt and other long-term liabilities
Net assets
Net assets per share (in the whole yen and dollars)(Note)

2010

2010

2009

2008

2010

6,778
1
281,3173,500
229,751
1,151.86¥ 14,959
1
268,035
2,536
229,610
1,151.07¥ 22,572
1
274,808
4,392
234,178
1,173.75$

51,302
273,710484,674
86,449301,792
1,478.77

42,197
246,790439,372
64,812
291,564
1,433.40

54,299240,444457,871
70,842
293,985
1,445.62

551,635
2,943,118
5,211,548
929,559
3,245,075
15.90

2008

2009

2010

2009

2010

2009

2010

Net income(Billions of Yen)

20
15
10
5

¥

72,882
11
3,024,914
37,6342,470,441
12.38

0
2008

(Billions of Yen)

U.S. Dollars amounts are translated at ¥93 = U.S. $1, only for convenience of readers.

2008

Corporate Data
(As of March 31, 2010)

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

Seino Holdings Co., Ltd.
1, Taguchi-cho, Ogaki, Gifu 503-8501, Japan
Tel: 81-584-82-3881 Fax: 81-584-82-5040
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 & Co.

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 andother investors, for the consistent support you have shown us over the years. The results for the fiscal year ended
March 31, 2010 (April 1, 2009 to March 31, 2010) are presented herein.

 Business Environment
In the fiscal year under review, Japan’s economic
conditions remained difficult. In the first half of theyear, economic activity was weak owing to thecontinued impact of the global financial crisis. In thesecond half, although economic measures by thegovernment and rapid recovery in the economies of
emerging countries such as China drove a pickup in theeconomy, a self-sustained recovery was not evident.
In the transportation industry, there was little
indication that transportation demand would bottom
out due to sluggish capital investment and weak private
consumption. As a result, the business environment
remained particularly harsh.

 Initiatives and Results for the Fiscal Year
Under Review
Operating under such conditions, the Seino Groupfocused on raising corporate value by concentrating on
measures to achieve each company’s management plantargets and placing emphasis on maintaining a solid
corporate financial position and ensuring soundmanagement to overcome the harsh businessenvironment.
The Seino Group continued to maintain “successful
execution” as its slogan and pushed forward with the
speedy implementation of policies and measures.
As a result, on a consolidated basis operating
revenue for the fiscal year ended March 31, 2010,
boosted by an increase in subsidiaries included in thescope of consolidation, was ¥485,808 million, up 12.0%
year on year. Operating income was ¥6,621 million, up
98.7%, and net income was ¥9,477 million, up 179.5%,
thus marking a significant recovery.

 Future Outlook
In the transportation industry, the primary industryof the Seino Group, we expect the businessenvironment to worsen further. We project therationalization of transportation and a further
reduction in freight volume reflecting a decline inpublic-sector investment and deterioration in theemployment and income situation. There are also
2

concerns that environmental preservation expenses andfuel costs will rise.
Under these circumstances, all Seino Group
employees will conduct business based on a customeroriented strategy. We will also further advancestreamlining to enable low cost business, which will
pave the way for expansion in all of our businesses.
In particular, we are building a nationwide networkin the Transportation Services business, which alreadycomprises 42 companies including both consolidated
subsidiaries and affiliates. We recognize thatmaintaining uniform customer service and working toenhance customer responsiveness will lead to greater
satisfaction and enable us to differentiate ourselvesfrom the competition. This in turn will boost revenues.
To this end, we are striving to develop our humanresources in a consistent manner across the board.
To maintain a winning edge and survive in thistough environment, it is essential not only to improve
on-site systems for dealing directly with customers but
also to swiftly reflect customer feedback inmanagement. Accordingly, Seino Transportation Co.,
Ltd., the core company of the Seino Group, integrated
head office functions, streamlining the organizational
structure from three tiers to two, specifically, head
office and area-based operations. We will also improve
on-site support functions with the aim of boostingcustomer satisfaction.
We created and implemented an online track andtrace service for added customer convenience and acustomer database that targets customers receiving
freight. In addition, we will promote a policy of
selection and concentration for people, property andequipment, capital and information so that we canfurther expand the logistics business, which is startingto achieve steady results in terms of customer
acquisition.
In the Vehicle Sales business, amid expected
contraction in the market for new vehicles, we will
work hard to identify customer needs and provide
services befitting each region. In passenger vehicle
sales, Netz Toyota Gifu Co., Ltd. and Netz Toyota
Centro Gifu Co., Ltd. merged in July 2010. Efforts toensure economies of scale, notably elimination andconsolidation of stores and effective personnel

allocation, will result in higher business efficiency. In
truck sales, we aim to boost profits by strengthening
used vehicle sales, integrating bases in Gifu Prefectureand expanding sales activities in Shiga Prefecture.
The Seino Group has provided customer services inthe domains of transportation, information and sales.
By adding financial services to our menu, we havebecome a comprehensive logistics company that offers
an integrated services package to customers. Seino
Financial Co., Ltd. was established in April 2010 toplay a key role in this new field by providing total
support for customers’ e-business.
As a result of these initiatives, we forecast operating
revenue of ¥493,000 million and net income of ¥7,000
million for the fiscal year ending March 31, 2011.

 Corporate GovernanceSeino employs a corporate auditor system. As of
March 31, 2010, the Board of Directors consisted of 10
directors, including two outside directors. In addition
to making swift and appropriate decisions on suchimportant matters as business restructuring andstrategic investments, the Board of Directors is taking
important steps to strengthen auditing functions andachieve greater management transparency.
The Company also has four corporate auditors,
including two outside auditors. Auditors are committed
to improving compliance and enhancing the trust thatsociety has in the Company through such activities asattending meetings of the Board of Directors,
conferences of directors and other importantgatherings, and auditing business execution.

Yoshikazu Taguchi
Chairman and Chief Executive Officer

 To Our Shareholders
In keeping with our basic business policy, Seino
seeks to enhance shareholders’ equity and improve
profitability from a long-term perspective, while
maintaining stable dividends. Accordingly, Seino has
maintained a regular annual cash dividend per share of¥11.00 for the fiscal year ended March 31, 2010, thesame amount as in the previous fiscal year.
Through the implementation of our new mediumterm management plan, we aim to be the preeminentcommercial freight transportation company in Japan
while at the same time raising corporate andshareholder value. We ask shareholders, customers andfriends for your continued understanding and support.

Yoshitaka Taguchi
President and Chief Operating Officer

3

Special Feature

Realizing Greater Efficiency in Group Management
The Seino Group has been vigorously promoting its
Customer Satisfaction (CS) Improvement Plan, a mediumterm management plan for the three-year period
beginning in the fiscal year ended March 31, 2009 thataims to fulfi ll the mission of always providing premium
services to customers and contributing to Japanese society.
Recognizing that an improvement in customer satisfaction
leads to an increase in corporate value, Seino Holdings
Co., Ltd. has shifted focus from quantity to quality and is
striving to boost the corporate value of the Seino Group
while pursuing management that emphasizes corporatesocial responsibility (CSR).
We are implementing a series of programs to raisecustomer satisfaction and provide services that make ourcustomers happy. In Transportation Services, our mainareas of focus are to expand the logistics business, develop
timetables for trunk-route transportation, strengthen our
network and improve operational accuracy. In otherbusiness areas, we seek to expand vehicle sales, ensure
effective utilization of resources and integrate indirect
departments inside the Group.
We will work to promote the establishment of a
profitable structure as well as shareholder-focusedmanagement by raising the profit-making capabilities ofeach Group company and further boosting themanagement efficiency of the entire Group.
The following outlines initiatives implemented byrespective business groups in the fiscal year ended March
31, 2010.

Business Group Initiatives
Transportation Services Business Group Seibu Transportation Co., Ltd. Made a Subsidiary
Seino Holdings Co., Ltd. concluded a share transfer
agreement in which we acquired a 90% stake in Seibu
Transportation Co., Ltd. (Head office: Saitama Prefecture),
which was under the umbrella of Seibu Holdings Co., Ltd., in
April 2009.
The decision to move forward with the consolidation was
based on expectations of significant synergistic effects. Seibu
Transportation Co., Ltd. possesses strengths in specialized
freight business mainly based in the Kanto and Kyushu regions
and in air cargo handling. As a result, we can expect
complementary effects with the Seino Transportation BusinessGroup in terms of regional and business characteristics. Other
Seibu Holdings subsidiaries such as Kyushu Seibu Transportation
Co., Ltd. were also made subsidiaries upon the addition of Seibu
Transportation Co., Ltd. into the Seino Group.

 Kangaroo SAVE Kyubin Express Delivery
Service Launched
The Seino Transportation Group started an express delivery
service in October 2009 called “Kangaroo SAVE Kyubin,”4

which promises delivery before noon the next day, for an area
800km from the point of origin, a distance that was previously
difficult to manage. The service for businesses uses the networkof Seibu Transportation Co., Ltd., newly included in the Seino
Transportation Group in April, to enable an expanded delivery
area with a commitment of before noon the next day up to the
800km zone without using air freight. A full refund will begiven in case this promise is not met.

 Sales of Shopping Service Expanded Nationwide
A project team was set up at Seino Transportation Co., Ltd.
in May 2009 to expand sales of a shopping service nationwide
from the traditional Chukyo and Kinki regions centering on theTokyo Metropolitan area. With this service, customers take theitems they have purchased at the supermarket to a special
counter where they are placed in separate containers that differ
by temperature (room temperature, cold storage, frozen) anddelivered within three hours. The service is limited to a specificnumber of members and can only be used if purchases exceed acertain value. This provides the benefits to supermarkets ofincreased purchase amounts per customer and differentiationfrom the competition. Since the agreement with thesupermarket specifies thatthe service will becharged on an hourly
basis, Seino
Transportation Co., Ltd.
can guarantee a level ofincome as opposed tosales based on thedelivery amount.
Going forward, we
will look to extend theservice to hardware storesand online supermarkets.

 Sales of “Kangaroo MAX + 1” for SinglePerson Households Commenced
Seino Transportation Co., Ltd. launched a moving service
called Kangaroo Single MAX + 1 on January 5, 2010 targeting
single persons. This service uses boxes measuring 1.5m3 and2.5m3 to transport furniture, electrical appliances and otherhousehold items. “MAX” refers to the fact that the service
employs the largest boxes in the industry at 2.5m3 while “+ 1”
refers to the fact that the cost of transporting a bicycle isincluded in the priceof the box whereas it
was charged separately
before.
The number ofsingle-personhouseholds is expected
to rise and the market
for single persons
moving is projected toexpand as more people take posts away from family. We aim togrow this business by targeting people who are beingtransferred or taking posts away from home, as well as new
employees and students who need to move.

 Eco Alliance Co., Ltd. Established
Seino Holdings Co., Ltd. established Eco Alliance Co., Ltd.
in June 2009 for the management of load matching systems andjoint operations for shared trunk-route transportation using
trucks. The purpose is to enhance the cost structure of theentire industry while improving service to customers amid
diminishing loads in Japan, features that the industry has beencalling for since 2008. Eco Alliance is aiming to increase load
volume and lower costs through mutual utilization of empty
space in trucks when traveling main trunk lines between sitesthat each specialized freight company uses, and to contribute toenvironmental preservation by reducing CO2 emissions andresource consumption.

 Ota Branch Opened
Kanto Seino
Transportation Co., Ltd.
opened the Ota Branch(Ibaraki Prefecture) in August
2009. This branch was
relocated near the interchangeahead of the scheduled 2011
opening of the Kita-Kanto
Expressway that crosses threeprefectures in northern Tokyo known as commuter suburbs.
Facilities at the branch have been considerably expanded tofacilitate smoother departure and arrival of trunk line services.

 Gifu-Tono Branch Opened
Tokai Seino
Transportation Co.,
Ltd. opened the
Gifu-Tono Branch in
January 2010 after
integrating theTajimi Branch andToki Branch. Head
office functions were
shifted there at thesame time.
The new branch is located around 3km from the TajimiInterchange on the Tokai-Kanjo Expressway. Platforms forlarger trucks that deliver goods on the main trunk lines havebeen set up on either side of the platforms for smaller trucks
that originally pick up the goods for a smoother flow thatshortens work time. A warehouse for recycling electricalappliances, a gas fi lling station and a repair shop have also been
included on the premises.

 Nobeoka Sales Office Integrated and RelocatedKyusyu Seino Transportation Co., Ltd. integrated theNobeoka Sales Office and the Nobeoka No. 2 Sales Office,which were near Nobeoka City in Miyazaki Prefecture, andopened the new Nobeoka Sales Office inside the city in January
2010. This is expected to enhance work efficiency andstrengthen sales capabilities.

Vehicle Sales and Other Businesses Patent Acquired for Driving Rating System
Seino Information Service Co., Ltd. was granted patentrights in December 2009 for a rating system for driving. The
patent application was jointly submitted with Aioi InsuranceCo., Ltd.
The service collects and processes data on speed, distanceand time that has been recorded on digital driving recorders
equipped in the trucks, taxis and buses of numerous companies
for objective third-party evaluation. This makes it possible toassess the reliability of each driver, company and sales officethrough analysis of accumulated results and overall transportquality.

 Seino Auto Lease Co., Ltd. Established
Seino Auto Lease Co., Ltd. was established in March 2010as a specialist in automobile leasing for companies. The
company is located on the premises of Gifu Hino Motor Co.,
Ltd. in Gifu Prefecture. Initially, business will focus on
automobile leasing in Gifu and Shiga prefectures with the aim
to expand business for vehicles owned, including maintenanceleases.

 Seino Auto Service Kanto Co., Ltd.
Established
Kanto Seino Transportation Co., Ltd. established Seino
Auto Service Kanto Co., Ltd. in October 2009 upon the spinoff of automotive maintenance, used vehicle sales and non-life
insurance businesses. The mechanical department of Kanto
Seino Transportation will continue to actively promote outside
sales, which includes general automotive maintenance and used
vehicle sales.

5CSR Topics
Commitment as a Corporate Citizen

Companies within the Seino Group strive to fulﬁll their corporate social responsibilities as a critical management
issue that must be addressed to meet the expectations of all stakeholders and earn society’s trust as a corporate
citizen. The following section briefly introduces the activities of Seino Group companies, which aspire to preserve theglobal environment, ensure safety and reassurance, show respect for humanity and coexist with local communities.

 The Environment
Seino Transportation GroupThe Seino Transportation Group is committed toinnovation in its vehicles and transportation systems
as well as focusing on environmentally friendly andenergy-saving operations to promote conservation of
the global environment.
● Introducing environmentally friendly vehicles
We have introduced low-emission vehicles, suchas natural gas vehicles, hybrid vehicles and electric
forklifts. In particular, we are adopting hybrid
vehicles in an effort to reduce CO2 emissions.
● Shifting transportation modes
We seek to both save energy and maintain service
levels by facilitating a shift in transport modes,
combining road transportation with shipping byrail and sea.
● Promoting efficient transportation
We save energy by efficiently transporting thevolume of cargo handled through the
improvement of load efficiency, use of large
vehicles and promotion of joint operations alongwith responding to changes in freight loading
during trucking off-seasons.
● Developing an energy-saving andenvironmentally friendly vehicle fleet
We take comprehensive measures such as
adopting intercooler turbo vehicles, adopting
cylinder cowling, utilizing energy-saving tires andreducing vehicle weight.
● Environmentally friendly and energy-saving
driving
We are fully committed to all drivers practicing“eco-driving” to minimize the adverse effect on
the environment.

6 Promoting Safe and Environmentally
Friendly Driving
Each company of the Seino Transportation Groupis promoting initiatives for safe driving. For example,
Seino Transportation Co., Ltd. holds seminars on
freeway traffic safety. Managers at Seino Express Co.,
Ltd. take part in safe driving workshops sponsored by
the Japan Trucking Association and pass on theinformation during training sessions on safety so that
all employees are well versed in how to drive safely.
Tokai Seino Transportation Co., Ltd. won criticalacclaim for its safe driving campaign and received aletter of appreciation from the Tajimi police
authorities.
To minimize environmental impact, each company
makes sure that all of its drivers practice energyefficient, environmentally friendly driving habits.

 Environmental Conservation Activities at
Seino Eco Trading Co., Ltd.
Seino Eco Trading Co., Ltd., part of an affi liatedbusiness group, collects packaging materials including
waste wrapping, used polypropylene band and bubble
pack from the Seino Transportation Group and sells
these materials to Chinese vendors manufacturing
recycled plastics. Additionally, the company offers
recycled resin palettes made from these raw materials
at a low price. These initiatives contribute to Groupmanagement that takes into account the global
environment such as through the reduction of wastematerials, efficient use of resources and CO2
reductions.

 Supporting the Paralympics
Schenker-Seino Co., Ltd. signed a contract with
the Japan Sports Association for the Disabled as an
official supporter for one year from October 2009 to
September 2010.
The company will assist with transportation
services at sports events held in Japan that aresponsored by the Japan Sports Association for theDisabled, including the Japan Paralympics, swim
meets and archery tournaments, as well as provide
total support for training camps and international
events held overseas.

 Tree-Planting Activities
Tree-planting activities were conducted for thesecond consecutive year at the Tarakyo Forest Park in
Ogaki City in November 2009 based on anagreement concluded in 2008 with the Taguchi
Fukujukai Foundation and Ogaki City in Gifu
Prefecture to create forests through cooperation withcompanies. Around 150 people gathered at the site toplant approximately 600 trees, including Seino Group
employees, their families and local citizens.

 Donating Educational Books
The Taguchi Fukujukai Foundation donated the
Taguchi collection of educational books to 61 schools
in November 2009, namely, public primary schools
and schools providing special needs education in Gifu
Prefecture. This initiative has been ongoing since1972 and 690,000 books have been donated to 1,397
schools to date.

 Basic Lifesaving Courses
Seino Tsu-un Co.,
Ltd. held basic
lifesaving courses in
May 2009 and 100
people attended.
Each company of the
Seino Transportation
Group conducts
lifesaving and firstaid courses.

 “Small Kindness Movement” Nationwide
Around 23,000 Seino Group employees
nationwide took part in the “Small Kindness
Movement” in May 2009. This was the 20th time weparticipated in this campaign since 1990.
After collecting litter from around Taguchi in
Ogaki City, Gifu Prefecture, which is home to
Seino’s head office, participants planted seeds of the
Cosmos flower, which is the symbol of the campaign,in three different flowerbeds.

 Traffic Safety Education
The Seino Transportation Training Center holds
classes on traffic safety for primary school students aspart of its social contribution efforts. The first roundof classes was held at primary schools in Gifu
Prefecture in July 2009.

7

Review of Operations
Transportation Services
In the Transportation Services business, we undertook
concerted efforts to secure revenues and profits and in turnboost the corporate value of the Seino Group. Measures
included increasing our “ability to provide quality” by
improving our speed and punctuality from pickup to delivery,
to pick up goods with our own vehicles through “fullemployee participation,” and to acquire new logistics projects
through proposal-based marketing that “meets customer
requirements” by reflecting customer feedback.
Our newly launched “Kangaroo SAVE Kyubin” expressdelivery service expanded the area for which it offers delivery
before noon the next day to an 800km area. This service
places utmost priority on customer convenience and iscontributing to raising our “ability to provide quality.”
In addition, by establishing a direct-delivery system in the
Santama region of western Tokyo as part of a restructuring of
the delegated delivery/pickup areas with Seibu Transportation
Co., Ltd., which has a strong presence in the Kanto region,and by opening Kanto Seino Transportation Co., Ltd.’s Ota
Branch (Gunma Prefecture), we enhanced our network in the

Vehicle Sales
In the Vehicle Sales business, the market environment forpassenger vehicles remained tough due to an overall decline
in demand. In addition to consumers beginning to move awayfrom automobile-oriented lifestyles and an aging society witha declining birthrate in Japan, there was also a sharp decline
in the automobile market due to the financial crisis. As aresult of persistent vigorous marketing activities centered on
new vehicles eligible for eco-car tax discounts and subsidies,such as hybrids, minivans and compact vehicles, the numberof new vehicle sales from August onward rose significantly ona year-on-year basis. Levels even surpassed those recorded
prior to the financial crisis. The used vehicle market
stagnated, however, due to a shortage of good quality, older
used vehicles, which are the best-sellers, and as consumers
shift to new vehicles to take advantage of greater tax breaks.
Th is resulted in a year-on-year decline in the number of used
vehicles sold.

Merchandise Sales
Conditions remained extremely tough overall in the
Merchandise Sales business. Despite solid sales of domestic
tissue papers, sales of fuel, this segment’s mainstay product,
declined significantly year on year due to selling price erosion.
Against this backdrop, we aggressively expanded sales

8

Kanto economic region and developed a system that can
provide greater convenience to customers.
Elsewhere, Tokai Seino Transportation Co., Ltd.
established the Gifu-Tono Branch (Gifu Prefecture) byintegrating the Tajimi Branch and the Toki Branch, while
Kyusyu Seino Transportation Co., Ltd. established theNobeoka Sales Office (Miyazaki Prefecture) by integrating
the Nobeoka Sales Office and the Nobeoka No. 2 Sales
Office. Th rough such measures, we were able to select andconcentrate management resources to achieve greater
efficiency in sales activities.
An ongoing measure of the Seino Group is the “EcoDrive Program” that aims to contribute to the global
environment and reduce operating expenses. We willcontinue with efforts and strive to implement the program
more widely.
As a result of the above and the inclusion of Seibu
Transportation Co., Ltd. as a consolidated subsidiary,
operating revenue for this segment was ¥362,628 million(US$3,899,226 thousand), up 14.6% versus the previous
consolidated fiscal term, and operating income was ¥1,761
million (US$18,935 thousand).

Deteriorating economic conditions heavily impacted trucksales. While there was a sizeable year-on-year decline in thenumber of new vehicles sold, we managed to secure profit bystrengthening used vehicle sales and streamlining
maintenance business.
In other developments, Kanto Seino Transportation Co.,
Ltd.’s maintenance factory was spun-off as an independent
entity, Seino Auto Service Kanto Co., Ltd., which
commenced a new automobile maintenance business. In
addition, Asahi Leasing Co., Ltd. changed its name to Seino
Auto Lease Co., Ltd. By shifting business focus andspecializing in automobile leasing, it has adopted a structurethat can meet customer needs. Efforts were made to expand
this business.
As a result, operating revenue for this segment was¥87,132 million (US$736,903 thousand), up 10.7% versus theprevious term, and operating income was ¥3,297 million(US$35,451 thousand), up 54.1% year on year.

activities and further reduced expenses, which enabled us tosecure a profit.
Operating revenue for this segment was ¥21,779 million(US$234,183 thousand), down 6.5% year on year, andoperating income was ¥599 million (US$6,441 thousand), up
0.9%.

Leasing for Real Estate Services
In the Leasing for Real Estate Services business, we strove
to effectively utilize management resources by leasing certain
vacant terminal lots of the Transportation Services BusinessGroup, including those of Seino Transportation Co., Ltd.,
which took steps to relocate due to the impact of urban
development and lack of space. The main terminals put up forlease included the former terminals in Yotsuhashi (Osaka

City), Shinmachi (Osaka City) and Akashi (Akashi City).
Companies outside the Transportation Services BusinessGroup also engage in leasing with the aim of effectively
utilizing assets.
Operating revenue for this segment was ¥1,265 million(US$13,602 thousand), up 6.6% from the previous fiscal year,
and operating income was ¥1,051 million (US$11,301
thousand), up 6.9% year on year.

and human resources more effectively. The name of the newcompany is Suito Travel Co., Ltd. (Head office: Ogaki City).
Operating revenue for this segment was ¥13,004 million(US$139,828 thousand), down 8.8% year on year, andoperating income was ¥205 million (US$2,050 thousand),down 68.7%.

Other
Th is business segment includes the information services
business and construction consignment business. Suito TaxiCo., Ltd. and Asahi Travel Service Co., Ltd. were mergedsince they conduct similar business to utilize management

Operating Revenue by Business Segment(Millions of yen)
FY3/10Results
Transportation Services

FY3/09Composition

Results

Composition

Year-on-Year

362,62874.6%

316,341

72.9%

14.6%

Vehicle Sales

87,132

17.9%

78,722

18.1%

10.7%

Merchandise Sales

21,7794.5%

23,302

5.4%(6.5%)

Leasing for Real Estate Services

1,265

0.3%

1,187

0.3%

6.6%

Other

13,004

2.7%

14,214

3.3%(8.8%)

Total

485,808

100.0%

433,766

100.0%

12.0%

Composition

Year-on-Year

Operating Income by Business Segment(Millions of yen)
FY3/10Results

FY3/09Composition

Results

Transportation Services

1,761

26.6%

(555)

(16.7)%—

Vehicle Sales

3,297

49.8%

2,140

64.2%

54.1%

599

9.0%

594

17.8%

0.9%

1,051

15.9%

983

29.5%

6.9%

Other

205

3.1%

654

19.7%

(68.7)%

Total

6,913

104.4%

3,816

114.5%

81.2%

Elimination(292)(4.4)%(483)(14.5)%—

Consolidated

6,621

100.0%

3,333

100.0%

98.7%

Merchandise Sales
Leasing for Real Estate Services

Note: The Merchandise Sales business was previously included in Other business; however, the significance of this business has
increased in terms of operating revenue and is therefore separately posted as a business segment from the current consolidated
fiscal term ended March 31, 2009.
9

Financial Review
Total current assets increased 10.2% to ¥165,451 million(US$1,779,043 thousand) compared with the previous fiscal
year-end. Total fi xed assets increased 10.4% to ¥319,223
million (US$782,505 thousand).
Total current liabilities increased 16.2% compared with theprevious fiscal year-end to ¥96,433 million (US$1,036,914
thousand) due primarily to increases in operating accounts
payable, trade payables and income taxes payable.
Long-term liabilities grew 33.4% from the previous fiscal
year-end to ¥86,449 million (US$929,559 thousand). The
main factors behind this result were increases in deferred tax
liabilities, allowance for employees’ retirement benefits andnegative goodwill.
Net assets rose 2.5% from the previous fiscal year-end to¥301,792 million (US$3,245,075 thousand). The major factor
was an increase in retained earnings derived from the postingof net income. Shareholders’ equity decreased 4.2 percentage
points to 60.7%.

Operating Results
Consolidated operating revenue for Seino Holdings Co.,
Ltd. for the fiscal year ended March 31, 2010 increased
12.0% from the previous fiscal year to ¥485,808 million(US$5,223,742 thousand). Th is was due to increased sales inthe Vehicle Sales business and the Leasing for Real Estate
Services business in addition to an increase in the number ofconsolidated subsidiaries in the Transportation Services
business.
Operating costs increased 12.1% from the previous fiscal
year to ¥445,845 million (US$4,794,023 thousand). The ratioof operating costs to operating revenue was 91.8%, on parwith the previous fiscal year.
Selling, general and administrative expenses rose 11.2% to¥33,342 million (US$358,516 thousand), while operating
income surged 98.7% to ¥6,621 million (US$71,194 thousand).
Other income stood at ¥6,319 million (US$67,946
thousand). Key positive factors were the amortization ofnegative goodwill in the amount of ¥7,394 million(US$79,505 thousand) and a major negative factor was an
impairment loss on fi xed assets of ¥2,404 million (US$25,849
thousand) loss on sale or disposal of property and equipmentof ¥120 million (US$1,290 thousand).
As a result, income before income taxes and minority
interests amounted to ¥12,940 million (US$139,140
thousand), up 86.4% year on year. Net income increased
179.5% to ¥9,477 million (US$101,903 thousand).
Net income per share was ¥47.60 (US$0.51), and return on
equity was 3.2%. Annual cash dividends per share weremaintained at ¥11.00 (US$0.12), the same as in the previous
fiscal year.

Cash FlowsNet cash provided by operating activities increased¥15,471 million compared with the previous fiscal year to¥29,170 million (US$313,656 thousand) due mainly todeclines in trust beneficiary rights and income taxes paid.
Net cash used in investing activities decreased ¥17,041
million to ¥3,344 million (US$35,957 thousand) due
primarily to proceeds from the acquisition of investments in
subsidiaries resulting in changes to the scope of consolidation
and a decrease in payments for the acquisition of intangible
and tangible fi xed assets.
Net cash used in financing activities increased ¥14,239
million versus the previous fiscal year to ¥17,799 million(US$191,387 thousand) due mainly to repayment of shortterm borrowings at a newly consolidated subsidiary.
Consequently, cash and cash equivalents at end of year
increased ¥8,041 million to ¥43,667 million(US$469,358 thousand).

Financial Position
Total assets at the end of the fiscal year under review were¥484,674 million (US$5,211,548 thousand), up 10.3% versus
the previous fiscal year-end.

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

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

Shareholders’ equity ratio

(%)

(%)

(%)

4

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

80

3
2
1
0
-1
-2
-3
-4
-5
-6
2005

10

2006

2007

2008

2009

2010

60

40

20

0
2005

2006

2007

2008

Operating income to operating revenue

Net (loss) income to total assets

Net (loss) income to operating revenue

Return on equity ratio

2009

2010

2005

2006

2007

2008

2009

2010

SEINO HOLDINGS CO., LTD. and Consolidated Subsidiaries

Six-year Summary
For the Years Ended March 31, 2010, 2009, 2008, 2007, 2006 and 2005
Millions of Yen
2010
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

¥

2009

485,808
362,628
87,132
21,7791,265
13,004445,845¥2008

433,766
316,341
78,722
23,302
1,187
14,214
397,826¥2007

451,978
331,862
85,537—1,146
33,433
410,579¥2006

449,486
327,574
85,549—1,079
35,284
408,395¥

2005

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

423,833
307,264
98,259—5,268
13,042
381,970

33,342
6,621
9,477

32,6073,333
3,391

31,4749,925
6,018

30,295
10,796
8,797

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

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

150,140
439,372
82,996
2,135
1,462
291,564

168,475
457,871
93,0442,465
2,114
293,985

169,706
468,006
98,9803,700
3,435
292,848

161,208
446,933
92,8004,371
8,247
278,916

164,129
470,492
91,252
4,815
17,974283,352Yen
Per share data:
Net (loss) income:-Basic-Diluted
Cash dividends¥

Number of shares issued

47.60
—
11.00

¥

207.679

17.03
—
11.00

¥

30.27
—
11.00

¥

Thousands
207,679

207,679

44.71
—
11.00

¥

(43.35)
—
11.00

¥

72.26
70.67
11.00

207,679

207,679

198,631

2.4
2.0
1.9
3.1
61.2
171.5
61.2
24.5

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

2.8
3.4
3.0
5.1
60.2
179.9
53.1
15.1

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

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

2.2
1.3
1.3
2.1
62.9
181.1
56.9
36.6

Current ratio

Debt equity ratio

Payout ratio

(%)

(%)

(%)

200

120

70
60
50

160
90

40
30

120

20

60

10

80

0
30
-10

40

-20
0

0
2005

2006

2007

2008

2009

2010

-30
2005

2006

2007

2008

2009

2010

2005

2006

2007

2008

2009

2010

11

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Balance Sheets
March 31, 2010 and 2009
Millions of yen
2010
Assets:Current assets:
Cash and cash equivalents (Note 13)
Short-term investments (Notes 4, 6 and 13)
Trade receivables (Note 13)
Inventories (Note 3)
Deferred tax assets (Note 11)
Other current assets
Allowance for doubtful accounts
Total current assets¥

43,667
7,635
97,076
10,588
4,194
2,798
(507)
165,4512009¥

35,626
6,571
83,284
7,826
3,691
13,743(601)
150,140

Thousands of
U.S. dollars
2010$

469,538
82,097
1,043,828
113,849
45,09730,086(5,452)
1,779,043

Property and equipment (Notes 5, 6 and 12):
At costAccumulated depreciation
Net property and equipment

520,524(246,814)
273,710464,505(217,715)
246,790

5,597,032(2,653,914)
2,943,118

Investments and other assets:
Investment securities (Notes 4 and 13)
Investments in and long-term loans to affiliates (Note 4)
Deferred tax assets (Note 11)
Other assets
Total investment and other assets
Total assets

19,742
3,110
11,18911,47245,513484,674

18,401
3,301
10,642
10,09842,442439,372

212,280
33,441
120,312
123,354489,387$ 5,211,548

2,135
473
57,71911,246
1,448
9,975
82,996$

Current liabilities:
Short-term borrowings (Notes 6 and 13)
Current portion of long-term debt (Notes 6 and 13)
Trade payables (Note 13)
Accrued expenses
Income taxes payable
Other current liabilities (Note 11)
Total current liabilities¥¥

Long-term debt (Notes 6 and 13)
Employee retirement benefit liability (Note 7)
Accrued severance indemnities for directors and statutory auditors
Deferred tax liabilities (Note 11)
Negative goodwill
Other long-term liabilities
Total liabilities

2,315
328
65,48812,004
4,558
11,74096,433¥¥24,892
3,527
704,172
129,075
49,011
126,237
1,036,914

654
54,574
1,473
14,556
14,729463
182,882989
49,369
1,504
5,827
6,933
190
147,808

7,032
586,817
15,839156,516
158,376
4,979
1,966,473

42,482
74,266
183,105(8,595)291,258
3,101
7,433
301,792
484,674

42,482
74,266
175,872(8,586)
284,034
1,313
6,217
291,564
439,372

456,796
798,559
1,968,871(92,420)
3,131,806
33,34479,925
3,245,075$ 5,211,548

Commitments and contingent liabilities (Notes 8 and 9)
Net Assets:
Shareholders’ equity (Note 10):
Common stock: 794,524,668 shares authorized and 207,679,783 shares issued
Capital surplus
Retained earnings
Less, treasury stock at cost: 8,624,246 shares in 2010 and 8,610,129 shares in 2009
Total shareholders’ equity
Accumulated gains from valuation and translation adjustments
Minority interests
Total net assets
Total liabilities and net assets

See accompanying Notes to Consolidated Financial Statements.
12

¥

¥

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Income
For the Years Ended March 31, 2010, 2009 and 2008

2008

Thousands of
U.S. dollars
2010

451,978$ 5,223,742

Millions of yen
2010
Operating revenue (Notes 14 and 15)¥

Operating costs and expenses (Notes 7 and 15):
Operating costs
Selling, general and administrative expenses
Operating income
Other income (expenses):
Interest and dividend income
Interest expenses(Loss) gain on sale or disposal of property and equipment(Loss) gain on sale of investment securities
Gain on cancellation of leasehold contracts
Equity in net (loss) income of affiliates
Amortization of negative goodwill
Impairment loss on fixed assets (Note 2(j))
Loss on write-down of investment securities(Loss) gain on abolishment of retirement benefit plan (Note 7)
Provision for severance indemnities for directors and statutory auditors (Note 2(l))
Loss on liquidation or sale of subsidiaries and affiliates
Miscellaneous, net
Income before income taxes and minority interests
Income taxes (Note 11):
Current
Deferred
Total income taxes
Minority interests in net income of subsidiaries
Net income

¥

2009

485,808¥

433,766¥

445,845
33,342
479,187
6,621

397,826
32,607
430,433
3,333

410,579
31,474442,053
9,925

4,794,032
358,516
5,152,548
71,194

486
(119)
(120)
(27)
116
(172)
7,394
(2,404)
(76)
(541)

775
(87)
(138)
2

831
(137)
546
896

4,361
(1,596)(1,321)50

5,225(1,280)(1,290)(290)
1,247(1,849)79,505(25,849)(817)(5,817)

—
—

—
—

1,782
6,319
12,9405,628(2,357)
3,271
192
9,477

—
—

¥

—

17
4,357
(3,115)
(1)
—

1,562
3,608
6,941

(1,073)
(26)
1,163
3,458
13,383

19,161
67,946
139,140

2,516
971
3,487

5,951
742
6,693

60,516(25,344)
35,172

63
3,391

¥

672
6,018

¥

47.60
11.00

¥

17.03
11.00

$

2,065
101,903

U.S. dollars

Yen
Per share:
Net income
Cash dividends

—
—

¥

30.27
11.00

$

0.51
0.12

See accompanying Notes to Consolidated Financial Statements.
13

SEINO HOLDINGS CO., LTD. and Subsidiaries;

Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2010, 2009 and 2008
Accumulated gains from valuation andtranslation adjustments

Shareholders’ equity
Number ofshares ofcommonCommonstock issued
stock

CapitalsurplusRetainedearnings

Net unrealized
Foreign Total accumulated
gains from
Total
gains onLand
currency
andMinority
Treasury shareholders’ available-for- revaluation translation valuationtranslation
equitysale securities decrement adjustments adjustments interests
stock

Total net
assetsMillions of yen
Balance at March 31, 2007
207,679,783 ¥ 42,482 ¥ 73,582 ¥Net income for the year———
Cash dividends———
Decrease in retained earnings throughinclusion of additional affiliate
accounted for by the equity method———
Reversal of land revaluation decrement———
Sales of treasury stock and fractional
shares, net——
684
Net changes in items other thanshareholders’ equity———
Balance at March 31, 2008
207,679,783 ¥ 42,482 ¥ 74,266 ¥Net income for the year———
Cash dividends———
Fractional shares acquired, net———
Net changes in items other thanshareholders’ equity———
Balance at March 31, 2009
207,679,783 ¥ 42,482 ¥ 74,266 ¥Net income for the year———
Cash dividends———
Reversal of land revaluation decrement———
Sales of treasury stock and fractional
shares, net———
Net changes in items other thanshareholders’ equity———
Balance at March 31, 2010
207,679,783 ¥ 42,482 ¥ 74,266 ¥

171,034 ¥ (9,557) ¥ 277,541 ¥ 9,484 ¥
6,018
—
6,018
—
(2,161)—(2,161)—(318) ¥——

(356) ¥ 8,810 ¥ 6,497 ¥ 292,848
—
—
—
6,018
—
—
—
(2,161)

(207)
(13)

—
—

(207)
(13)

—
—

—
—

—
—

—
—

—
—

(207)
(13)

—

992

1,676

—

—

—

—

—

1,676

—
—
— (3,929)
174,671 ¥ (8,565) ¥ 282,854 ¥ 5,555 ¥
3,391
—
3,391
—
(2,190)—(2,190)
—
—
(21)
(21)
—

13
(305) ¥———

85
(3,831)(345)(4,176)(271) ¥ 4,979 ¥ 6,152 ¥ 293,985
—
—
—
3,391
—
—
—
(2,190)
—
—
—
(21)

—
—
— (3,404)
175,872 ¥ (8,586) ¥ 284,034 ¥ 2,151 ¥
9,477
—
9,477
—
(2,190)—(2,190)
—
(54)
—
(54)
—

—
(305) ¥———

(262) (3,666)
65(3,601)(533) ¥ 1,313 ¥ 6,217 ¥ 291,564
—
—
—
9,477
—
—
—
(2,190)
—
—
—
(54)

—

(9)

(9)

—

—
—
—
1,658
183,105 ¥ (8,595) ¥ 291,258 ¥ 3,809 ¥—
54(251) ¥

—

—

—

(9)

76
1,788
1,216
3,004
(457) ¥ 3,101 ¥ 7,433 ¥ 301,792

Thousands of U.S. dollars
Balance at March 31, 2009
Net income for the year
Cash dividends
Reversal of land revaluation decrement
Sales of treasury stock and fractional
shares, net
Net changes in items other thanshareholders’ equity
Balance at March 31, 2010

$456,796 $798,559 $ 1,891,097 $ (92,323) $ 3,054,129 $ 23,129 $ (3,280) $——101,903—
101,903————(23,548)—(23,548)
—
—
—
—
(581)
—
(581)
—
—
—

—

(97)

(97)

—

—

—

—

—

(97)

—
—
—
—
— 17,828
581
817
19,226
13,07532,301$456,796 $798,559 $ 1,968,871 $ (92,420) $ 3,131,806 $ 40,957 $ (2,699) $ (4,914) $ 33,344 $ 79,925 $ 3,245,075

See accompanying Notes to Consolidated Financial Statements.
14—(5,731) $ 14,118 $ 66,850 $ 3,135,097———
101,903———(23,548)
—
—
—
(581)

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Cash Flows
For the Years Ended March 31, 2010, 2009 and 2008

2008

Thousands of
U.S. dollars
2010

13,383$

Millions of yen
2010
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
Net provision (reversal) for employee retirement benefit liability
Loss (gain) on sale or disposal of property and equipment
Equity in net loss (income) of affiliates
Loss on write-down of investment securities
Loss (gain) on sale of investment securities
Net (reversal) provision for accrued severance indemnities for directors andstatutory auditors(Increase) decrease in trade receivables(Increase) decrease in inventories
Increase (decrease) in trade payables
Decrease (increase) in beneficial interest in trusts in relation to trade payables
Other, net
Sub-totalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities

12,9402009¥

18,1852,404(7,394)
506
32
120
172
76
27

6,941

¥

17,326
1,596(4,361)
449
(124)
138
—
1,321
(2)

17,016
3,115(4,357)
7
42
(546)
(17)
1
(896)

139,140
195,538
25,849(79,505)
5,441
344
1,290
1,849
817
290

(187)

(183)

961

(2,011)(2,122)(3,242)564
10,813(1,796)31,098512(119)(2,321)
29,1705,496(937)(6,626)
1,317(2,758)19,593797(88)(6,603)
13,6991,565(1,373)(4,675)(51)688
24,863852(138)(6,005)
19,572(22,817)(34,860)
6,065
116,269(19,312)334,387
5,506(1,280)(24,957)
313,656

Cash flows from investing activities:
Increase in property and equipment
Increase in long-term investments and loans
Decrease in property and long-term investments
Decrease in short-term investments
Net cash used in investing activities(13,465)
(674)
8,198
2,597
(3,344)(23,260)
(635)
1,197
2,313
(20,385)(19,066)
(644)
3,516
2,500
(13,694)(144,785)(7,247)
88,15027,925(35,957)

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

(2,379)(13,210)(2,190)(11)(9)(17,799)
14
8,041
35,626
43,667(653)(680)(2,190)(16)(21)(3,560)(12)(10,258)
45,88435,626(1,473)(1,237)(2,162)(41)
2,158(2,755)8
3,131
42,75345,884(25,581)(142,043)(23,548)(118)(97)(191,387)
151
86,463383,075$ 469,538¥¥¥

See accompanying Notes to Consolidated Financial Statements.
15

SEINO HOLDINGS CO., LTD. and Subsidiaries

Notes to Consolidated Financial Statements
1. Basis of Consolidated Financial Statements
The accompanying consolidated financial statements of SEINO
HOLDINGS CO., LTD. (the “Company”) and its subsidiaries (together
with the Company, the “Seino Group”) have been prepared in accordancewith the provisions set forth in the Financial Instruments and Exchange
Law of Japan and its related accounting regulations and in conformity withaccounting principles generally accepted in Japan (“Japanese GAAP”), which
are different in certain respects as to application and disclosure requirementsfrom International Financial Reporting Standards.
The accounts of the Company’s overseas subsidiaries are based on theiraccounting records maintained in conformity with generally accepted
accounting principles prevailing in the respective countries of domicile. The
accompanying consolidated financial statements have been restructured
and translated into English from the consolidated financial statementsof the Company prepared in accordance with Japanese GAAP and filedwith the appropriate Local Finance Bureau of the Ministry of Finance as
required by the Financial Instruments and Exchange Law of Japan. Certain
supplementary information included in the statutory Japanese language
consolidated financial statements, but not required for fair presentation, is notpresented in the accompanying consolidated financial statements. Certain
comparative figures have been reclassified to conform to the current year’s
presentation.
The translation of the Japanese yen amounts into U.S. dollars is included
solely for the convenience of readers outside Japan, using the approximate
exchange rate prevailing at March 31, 2010, which was ¥93 to U.S. $1.00.
The translation should not be construed as a representation that the Japanese
yen amounts have been, could have been or could in the future be converted
into U.S. dollars at this or any other rate of exchange.

2. Summary of Significant Accounting Policies

accepted in their respective countries (see Note 1). No adjustments toconform to accounting principles generally accepted in Japan have been madeto their financial statements on consolidation, as allowed under Japanese
GAAP effective for the current fiscal year-end.

(a-ii) Acquisition for the current fiscal year
During the year ended March 31, 2010, the Seino Group acquired
90% of the common shares of Seibu Transportation Co., Ltd. (“Seibu
Transportation”). As a result, Seibu Transportation and its subsidiaries,
Kyushu Seibu Transportation Co., Ltd., Toyo Co., Ltd., Central
Logistics Co., Ltd., Katsunuma Transportation Co., Ltd. and Darumaya
Transportation Co., Ltd., became subsidiaries of the Company effective
April 24, 2009. The assets and the liabilities of Seibu Transportation and its
subsidiaries as of the initial consolidation by the Company were as follows.

Assets:Current assets
Non-current assets
Total assets
Liabilities:
Current liabilities
Non-current liabilities
Negative goodwill
Total liabilities

Subsidiaries:
Domestic
Overseas
Affiliates accounted for by the equity method
Affiliates stated at cost

2010

2009

2008

57
2
3
10

50
2
3
12

47
2
3
11

The Company and most of its subsidiaries have a fiscal year that
ends on March 31. One of the Company’s domestic subsidiaries and one
overseas subsidiary close their books at December 31. Another domestic
subsidiary closes its books at January 31. The Company has consolidated
those subsidiaries’ financial statements as of their year-ends because thedifference between their fiscal year-ends and that of the Company was not
more than three months. Significant transactions for the period between
the subsidiaries’ year-ends and the Company’s year-end are adjusted for on
consolidation.
The overseas subsidiaries have adopted accounting principles generally
16

¥
¥
¥

¥

22,42240,80363,225$29,625
15,998
14,83060,453$$$241,097438,742
679,839
318,548
172,022
159,462
650,032(a-iii) Acquisitions for the years 2008 and 2009
During the year ended March 31, 2009, the Seino Group acquired
common shares of Seino Logistics Co., Ltd. (“Seino Logistics”). As a result,Seino Logistics became a subsidiary of the Company effective July 1, 2008.
The assets and the liabilities of Seino Logistics as of the initial consolidationby the Company were as follows.

(a-i) Principles of consolidation
The accompanying consolidated financial statements include the accountsof the Company and all of its subsidiaries. Investments in significant
affiliates are accounted for by the equity method. Investments in affiliates
not accounted for by the equity method are stated at cost. Differences
between the acquisition cost of investments in subsidiaries and the underlying
equity in their net assets are adjusted based on the fair value at the time of
the acquisition, deferred as goodwill or negative goodwill and amortizedover five years on a straight-line basis. All intercompany transactions andaccounts have been eliminated.
Under accounting standards for consolidation, a subsidiary is defined as anenterprise which is controlled by another enterprise and is a majority (morethan 50%) owned enterprise or a 40% to 50% owned enterprise that meets
certain criteria. In addition, an affiliated company is defined as an enterprisein which the investor has significant influence and is an enterprise other thana subsidiary that is a 20% or more owned enterprise or 15% to less than 20%
owned enterprise that meets certain criteria. For the years ended March
31, 2010, 2009 and 2008, the number of the companies that were not morethan 50% owned enterprises, but were nevertheless classified as subsidiaries
based on the judgment of the Company in accordance with the accounting
standards was one, two and two, respectively.
The number of subsidiaries and affiliates for the years ended March 31,
2010, 2009 and 2008 was as follows:

Thousands of
U.S. dollars

Millions of yen

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

¥

¥
¥

39
2
10
51
41

̶
¥

41

During the year ended March 31, 2009, the Seino Group acquired
common shares of Shiga Hino Motor Co., Ltd. (“Shiga Hino”). As a result,
Shiga Hino became a 67% owned subsidiary of the Company effective
January 7, 2009. The assets and the liabilities of Shiga Hino as of the initialconsolidation by the Company were as follows.
Millions of yen
Assets:Current assets
Non-current assets
Goodwill
Total assets
Liabilities:
Current liabilities
Non-current liabilities
Total liabilities

¥

¥
¥
¥

1,953
1,493
391
3,837
2,920
215
3,135

During the year ended March 31, 2008, the Company acquired additionalcommon shares of Izu Seino Transportation Co., Ltd. (“Izu Seino”). As aresult, Izu Seino became a 51% owned subsidiary of the Company effective
April 1, 2007. The assets and the liabilities of Izu Seino as of the initialconsolidation by the Company were as follows.
Millions of yen
Assets:Current assets
Non-current assets
Goodwill
Total assets

¥

¥

73
63
74
210

Liabilities:
Current liabilities
Non-current liabilities
Total liabilities¥¥

principally by the declining-balance method, except for buildings acquired on
and after April 1, 1998 and the property held for leases. Buildings acquired
on and after April 1, 1998 by the domestic subsidiaries are depreciated by thestraight-line method. Some of the subsidiaries capitalize property the costof which is not less than ¥100,000 but below ¥200,000 and depreciate it overthree years on a straight-line basis.
The leased property of a certain subsidiary engaged in leasing operations
as lessor is recorded at cost as property held for lease. The property was
included in property and equipment in the accompanying consolidatedbalance sheets and is depreciated over the lease contract terms by the straightline method to the amount equal to the estimated disposal value at the leasetermination date. Expenditure on maintenance and repairs is charged tooperating income as incurred. Upon the disposal of the property, the costand accumulated depreciation are removed from the accounts and any gain orloss is recorded as income or expenses.
In accordance with the amendment of the Corporation Tax Law ofJapan, with effect from the year ended March 31, 2008, the Company andits domestic subsidiaries changed the depreciation method of property andequipment acquired on and after April 1, 2007 pursuant to the amended
Corporation Tax Law of Japan. As a result, compared with the amounts thatwould have been recorded with the previous accounting method, operating
income and income before income taxes and minority interests were ¥432
million less for the year ended March 31, 2008.
As for property and equipment acquired before April 1, 2007, theCompany and its domestic subsidiaries previously depreciated it to thedepreciable limit of 5% of acquisition cost in accordance with the Corporation
Tax Law of Japan. Effective from the year ended March 31, 2008, the 5%
remaining residual value is depreciated over five years using the straightline method from the fiscal year following the year in which the depreciable
limit is reached, pursuant to the amended Corporation Tax Law of Japan.
As a result, operating income and income before income taxes and minority
interests were ¥693 million less for the year ended March 31, 2008, than
the amounts that would have been recorded with the previous accounting
method.

58
152
210

(a-iv) Business transfer for the year 2009
Pursuant to the resolution by the Board of Directors of the Company
on February 13, 2008, on April 1, 2008, Kyushu Seino Transportation
Co., Ltd. succeeded a part of the transportation business of Sengoku Seino
Transportation Co., Ltd., acquiring the vehicles and operational assets
and assuming liabilities such as the employee retirement benefit liability.
In addition, Kyusyu Seino acquired land and buildings from Iwasaki
Corporation Co., Ltd. and Shiratsuyu Company, Ltd. on April 1, 2008. Thisbusiness transfer is expected to strengthen the integration of the Seino Groupand improve optimization and efficiency by integrating the Kyushu area into
one huge network and making homogeneous the services of the Seino Group.
The consideration for this transaction amounted to ¥5,361 million, andgoodwill in the amount of ¥2,039 million was recorded in the year ended
March 31, 2009. The assets and the liabilities of this business transfer were as
follows.
Millions of yen
Assets:Current assets
Non-current assets
Goodwill
Total assets
Liabilities:
Current liabilities
Non-current liabilities
Total liabilities

(b)

¥

¥
¥
¥

—
3,887
2,039
5,926
—
594
594

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

(c)

(h)

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 or losses on these securities are reported as a component of
net assets, net of applicable income taxes. Gains and losses on the dispositionof available-for-sale securities are computed based on the moving-averagemethod. Nonmarketable securities without available market quotations foravailable-for-sale securities are carried at cost determined by the movingaverage method. Adjustments in carrying values of individual securities arecharged to income through write-downs when a decline in value is deemedother than temporary.

(d)Accounting for derivatives
At March 31, 2010 and 2009, the Seino Group did not hold nor had it
issued any derivative instruments.

(e)

(f)

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

(j)Inventories
Inventories for merchandise, products, raw materials and supplies are
principally stated at the lower of moving-average cost or net realizable value,
and inventories for vehicles and work-in-process are principally stated at thelower of the specific identification cost or net realizable value at March 31,
2010.
Prior to April 1, 2008, inventories for supplies are principally stated atmoving-average cost, and inventories for vehicles and work-in-process are
principally stated at cost determined by the specific identification method.
Effective from the year ended March 31, 2009, the Company has applied the
Accounting Standards Board of Japan (ASBJ) Statement No. 9, “AccountingStandard for Measurement of Inventories,” issued by ASBJ on July 5, 2006.
As a result, in the year ended March 31, 2009 operating income and income
before income taxes and minority interests for the year ended March 31,
2009 were ¥80 million less than the amounts that would have been recorded
without the change.

(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 depreciatedLeasesPrior to April 1, 2008, the Company and its consolidated domestic
subsidiaries accounted for finance leases which did not transfer ownership ofthe leased property to the lessee as operating leases with disclosure of certain“as if capitalized” information in the notes to the consolidated financial
statements.
On March 31, 2007, ASBJ issued Statement No. 13, “Accounting Standard
for Lease Transactions,” and Guidance No. 16, “Guidance on AccountingStandard for Lease Transactions.” The new accounting standards requirethat all finance lease transactions be treated as capital leases.
Effective April 1, 2008, the Company and its consolidated domestic
subsidiaries have adopted the new accounting standards for finance leases
commencing after March 31, 2008 and capitalize assets used under suchleases, except for certain immaterial or short-term finance leases accounted
for as operating leases. As permitted, finance leases which commenced prior
to April 1, 2008 and have been accounted for as operating leases, continue
to be accounted for as operating leases with disclosure of certain “as if
capitalized” information. The effects of adopting the new standards on the
consolidated balance sheet as of March 31, 2009 were not material.

Investments and marketable securities

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

Accounting standard for impairment of fixed assets
The Company and its domestic subsidiaries have adopted the “AccountingStandard for Impairment of Fixed Assets” issued by BACJ and the related
practical guidance issued by ASBJ. The standard requires that fixed assets
be reviewed for impairment whenever events or changes in circumstancesindicate that the carrying amount of an asset may not be recoverable. An
impairment loss shall be recognized in the income statement by reducing thecarrying 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 price or value
in use. Fixed assets include land, buildings and other forms of property, as
well as intangible assets, and are to be grouped at the lowest level for which
there are identifiable cash flows distinguishable from other groups of assets.
For the purpose of recognition and measurement of impairment loss, fixed
assets are grouped into cash-generating units, such as operating businessbranches, other than idle or unused property. At March 31, 2010, 2009 and2008, recoverable amounts of assets were measured based on value in use
calculated using discounted future cash flows at interest rates principallyof 2.8%, 5.3% and 4.7%, respectively, or net selling prices primarily using
appraisal valuations. As a result, the Seino Group recognized impairment
loss for the property of 50 business branches and 5 idle properties for theyear ended March 31, 2010, for the property of 27 business branches and 4idle properties for the year ended March 31, 2009 and for the property of 48
business branches, 6 idle properties and goodwill for the year ended March
17

(p)

31, 2008 as follows:
Millions of yen
2010

Buildings and structures ¥
538 ¥
Land
1,609
Other property
257—
Goodwill¥ 2,404 ¥Thousandsof U.S.
dollars
2010

2009

2008

218 ¥
1,368
10
—
1,596 ¥

574 $ 5,785
2,443
17,301
3
2,763
95—
3,115 $ 25,849

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.

(q)

Employee retirement benefits
Employees who terminate their service with the Seino Group are entitled
to retirement benefits generally determined by reference to basic rates of pay
at the time of termination, length of service and conditions under which thetermination occurs.
In accordance with the accounting standard for employee retirement
benefits, the Seino Group has recognized the retirement benefits for
employees, including pension cost and related liability, based on the actuarial
present value of projected benefit obligation using the actuarial appraisal
approach and the fair value of pension plan assets available for benefits at
the fiscal year-end. Unrecognized actuarial differences from changes in the
projected benefit obligation or the value of pension plan assets resulting from
actual outcomes different from that which was assumed and from changes inassumptions themselves are amortized on a straight-line basis over principally
10 years, a period within the average remaining service years of employees
from the year following the year in which they arise. Unrecognized priorservice cost is amortized using the straight-line method over principally 10
years, a period within the average remaining service years of employees fromthe year in which it occurs.
Effective from the fiscal year under review, the Company has adopted
ASBJ Statement No. 19, “Partial Amendments to Accounting Standard for
Retirement Benefits (Part 3),” issued on July 31, 2008. This change did notaffect the profit and loss for the year under review.

(l)Severance indemnities for directors and statutory auditors
The Seino Group may pay severance indemnities to directors and statutory
auditors that are subject to the approval of the shareholders. Until March
31, 2007, although some of the subsidiaries provided for accrued severance
indemnities at the full amount of the liabilities of directors’ and statutory
auditors’ benefits at the respective balance sheet dates, the Company andother subsidiaries did not provide accrued severance indemnities for directors
and statutory auditors, and these amounts were charged to income when
paid. Effective from the year ended March 31, 2008, the Company andother subsidiaries changed the accounting method to provide for accrued
severance indemnities for directors and statutory auditors at the amountthat would be payable if the directors and corporate auditors retired at theend of the fiscal year based on internal rules, in accordance with the JICPA
Audit and Assurance Committee Report No. 42, “Treatment for Auditing ofReserve Under Special Taxation Measures Law, Reserve Under Special Laws
and Reserve for Retirement Benefits to Directors and Corporate Auditors,”
issued by JICPA on April 13, 2007. As a result, the amount of ¥1,073
million attributable to the prior years was recorded as other expenses in theaccompanying consolidated statements of operations, and operating income
and income before income taxes and minority interests for the year ended
March 31, 2008 were ¥161 million and ¥1,235 million less, respectively, than
the amounts that would have been recorded with the previous accounting
method.

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

Accumulated impairment losses have been directly deducted from theapplicable assets.

(k)

Appropriation of retained earnings(r)

Per share data
Basic net income (loss) per share is computed by dividing income (loss)
available to common shareholders by the weighted-average number of sharesof common stock outstanding during the respective year. Diluted net income
per share is computed as if warrants or stock options were exercised at the
beginning of the relevant year or, if later, on their first exercise date and as
if the funds obtained thereby were used to purchase common stock at the
average market price during the respective year by the treasury stock method.
Diluted net income per share is not disclosed as Seino Group had no diluted
common shares for the years ended March 31, 2010, 2009 and 2008.
Cash dividends per share shown for each fiscal year in the accompanying
consolidated statements of operations represent dividends declared as
applicable to the respective years.

3. Inventories
Inventories at March 31, 2010 and 2009 were as follows.

2010
Merchandise and finished goods ¥ 8,949
Work in process
918
721
Raw materials and supplies¥ 10,588(n)

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

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

18

2009
6,601
659
566
¥ 7,826¥2010$ 96,226
9,871
7,752
$ 113,849

4. Investments
At March 31, 2010 and 2009, short-term investments consisted of thefollowing:Thousands of
U.S. dollars

Millions of yen

2010
Marketable securities:¥
Bonds
Total marketable securities
Time deposits with an original
maturity of more than three months
¥

1,913
1,913
5,722
7,635

2009
¥

¥

2010

472
472

$ 20,570
20,570

6,099
6,571

61,527$ 82,097

At March 31, 2010 and 2009, investment securities consisted of the following:(m) Income taxes
Income taxes are accounted for by the asset and liability method. Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the carrying amounts of existing assets
and liabilities and their respective tax bases and operating loss carryforwards.
Deferred tax assets and liabilities are measured using the enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in the period that
includes the enactment date.

Thousands of
U.S. dollars

Millions of yen

Millions of yen

2010
Marketable securities:
Equity securities¥ 16,899
Bonds
638
127
Other
Total marketable securities 17,664
2,078
Other non-marketable securities¥ 19,742

Thousands of
U.S. dollars

2009

2010

¥ 13,092
3,436
106
16,634
1,767¥ 18,401$ 181,710
6,860
1,366
189,936
22,344$ 212,280

At March 31, 2010 and 2009, the fair value of marketable securities classified
as held-to-maturity and the related net unrealized gains were as follows:
Carrying
value

Net
unrealized
gains

Fair value

Millions of yen
Bonds included in investment securities:
At March 31, 2010¥
At March 31, 2009

100
100

¥

102
100

¥

2
—

6. Short-term Borrowings and Long-term Debt

Thousands of U.S. dollars
Bonds included in investment
securities:
At March 31, 2010

$

1,075

$

1,096

$

At March 31, 2010 and 2009, short-term borrowings consisted of thefollowing:

21

Marketable securities classified as available-for-sale are stated at fair value
with unrealized gains and losses excluded from current earnings and reported
as a net amount within the net assets account until realized. At March 31,
2010 and 2009, gross unrealized gains and losses for marketable securities
classified as available-for-sale were as follows:
Cost

At March 31, 2010:
Equity securities
Bonds
Other
At March 31, 2009:
Equity securities
Bonds
Other

Gross
Gross
unrealized unrealized
gains
lossesMillions of yen¥(309) ¥ 16,899
(10)
2,451
(7)
127
(326) ¥ 19,477¥(289) ¥ 13,093
(23)
3,807
(26)
106
(338) ¥ 17,006

8,353 ¥
3,818
129
¥ 12,300 ¥5,029 ¥
12
3
5,044 ¥

2010
Unsecured bank overdrafts withinterest rates of 1.3% perannum at March 31, 2010¥25
Short-term bank borrowings,
principally unsecured andrepresented by notes withinterest rates ranging from0.375% to 1.875% per annum
2,290
at March 31, 2010
¥ 2,315

Fair andcarrying
value

9,109 ¥ 8,099 ¥
2,447
14
114
20
¥ 11,670 ¥ 8,133 ¥

¥
¥

2010

3,263
38
3,301

$ 33,118
323$ 33,441

Loans from banks, partly secured,
due through 2017, repayable on
an installment basis with interest
rates ranging from 1.03% to 2.1%
per annum at March 31, 2010¥
Loans from government
agencies, principallymortgages, repayable on an
installment basis with interest
rates ranging from 0.7% to3.6% per annum at March 31,
2010
Other
Less, current portion

5. Property and Equipment¥

At March 31, 2010 and 2009, property and equipment consisted of thefollowing:
Millions of yen

$

269

¥

2,110
2,135

$

24,62324,892Thousands of
U.S. dollars

138

2009

¥

771
73
982
(328)
654 ¥

402

2010

$

1,484

981
79
1,462
(473)
989 $

8,290
785
10,559(3,527)7,032

At March 31, 2010 and 2009, the following assets were pledged ascollateral for certain short-term borrowings and long-term debt in theaggregate amounts of ¥1,232 million ($13,247 thousand) and ¥1,575 million,
respectively:

Thousands of
U.S. dollars

2010

2009
2010
Property held for own use, at cost:Land¥ 164,247 ¥ 136,668 $ 1,766,097
Buildings and structures
225,860
211,760
2,428,602
Vehicles
100,111
88,403
1,076,462
Machinery and equipment
28,945
26,346311,237
Construction in progress
32
571
344
1,329
757
14,290Other
520,524
464,505
5,597,032
Less, accumulated depreciation (246,814) (217,715) (2,653,914)
Total property and equipment ¥ 273,710 ¥ 246,790 $ 2,943,118
One of the consolidated subsidiaries elected to carry out a one-timerevaluation to restate the cost of land used for business operations at values
reassessed on March 31, 2002, reflecting adjustments for land shape andother factors based on appraisal values issued by the Japanese National Tax
Agency in accordance with the Law Concerning Revaluation of Land.
According to the Law, the excess of the original book values over reassessedvalues, net of the tax effect and minority interests portions, is recordedin net assets as land revaluation decrement account in the accompanying
consolidated balance sheets. At March 31, 2010 and 2009, the difference
between the carrying values of land used for the business operations after
revaluation over the current market value of the land at the fiscal yearend amounted to ¥1,787 million ($19,215 thousand) and ¥1,748 million,
respectively.

25

2010

Thousands of
U.S. dollars

2009

¥

Millions of yen

At March 31, 2010 and 2009, investments in and long-term loans toaffiliates consisted of the following:

2010
Investments, accounted for by theequity method for significant
affiliates and at cost for others ¥ 3,080
30Interest bearing long-term loans¥ 3,1102010

At March 31, 2010 and 2009, long-term debt consisted of the following:$ 97,946 $ 87,086 $ (3,322) $ 181,710
26,312151(108)
26,355
1,226
215
(75)
1,366
$125,484 $ 87,452 $ (3,505) $209,431

Millions of yen

2009

At March 31, 2010, the Company and certain subsidiaries had unsecured
overdraft agreements with 10 banks. Under such agreements, the Company
and these subsidiaries were entitled to withdraw up to ¥42,100 million($452,688 thousand). The Company and the subsidiaries were not obligatedto pay commitment fees on the unused portions of such overdraft facilities.

Thousands of U.S. dollars

At March 31, 2010:
Equity securities
Bonds
Other

Thousands of
U.S. dollars

Millions of yen

Thousands of
U.S. dollars

Millions of yen

2010
Land
¥
Buildings and structures
Time deposits included in shortterm investments

6,856
3,912

2009
¥

—

6,941
4,162
11

2010
$

73,72042,065—The aggregate annual maturities of long-term debt as at March 31, 2010
were as follows:Year ending March 31,
2011
2012
2013
2014
2015
Thereafter

7.

Thousands ofMillions of yen
U.S. dollars
¥
328
$
3,527
197
2,118
172
1,850
120
1,290
81
871
84
903
¥
982
$
10,559

Employee Retirement Benefits
The Company and its domestic subsidiaries have defined benefit plans.
The following table reconciles the benefit liability as of March 31, 2010 and
2009:

19

third parties in the aggregate amounts of ¥1,380 million ($14,839 thousand)and ¥1,671 million, respectively.

Thousands of
U.S. dollars

Millions of yen

2010
2009
2010
Reconciliation of benefit liability:
Projected benefit obligation ¥ 66,863 ¥ 53,719 $ 718,957
Less, fair value of pension(7,847)(932)(84,376)plan assets at end of year
59,01652,787
634,581Less, unrecognized actuarial
differences (loss)(1,805)(2,087)(19,409)
Less, unrecognized past service cost
(3,102)(1,331)(33,355)
465
—
5,000
Prepaid pension assets
Net amounts of employee
retirement benefit liability
recorded on the consolidated¥ 54,574 ¥ 49,369 $ 586,817
balance sheets

9. Lease Commitments
As lessee, the Seino Group has entered into various rental and noncancelable lease agreements for computer equipment and radio facilities
with contract terms from four to nine years. As disclosed in Note 2(h), thesefinance leases which commenced prior to April 1, 2008 have been accounted
for as operating leases. The aggregate minimum future lease payments undersuch non-cancelable finance lease agreements, including the imputed interest
portions, as at March 31, 2010 and 2009 were as follows:

Finance leases:
Due within one year
Due after one year

Notes: 1. Projected benefit obligation of certain subsidiaries was calculated using thesimplified calculation method as permitted by the accounting standard for
employee retirement benefits.
Notes: 2. Some of the Company’s subsidiaries participate in a certain corporate
pension plan under a multi-employer pension program established by
the subsidiaries and other employers. Because information regarding thepension plan assets based on the proportionate contributions made by
the subsidiaries is not available, the Seino Group records the required
contributions to the pension plan as net periodic retirement benefit expense
for the period in accordance with the amended accounting standard for
employee retirement benefits (ASBJ Statement No. 14). The above table
excluded the portion for the pension plan assets under the multi-employer
pension program. The information for the funded status of the entire
corporate pension plan available at the end of the latest calculation periodend was as follows:

14,769Thousands of
U.S. dollars$ 158,806(19,654)(4,885)$

Millions of yen
Pension plan assets at March 31, 2009 ¥Related benefit obligation under
the program¥
Plan surplus
Ratio of the subsidiaries’ payroll to
the totals in the entire plan

2010

2008

2010
2009
Method attributing the projected Straight- Straight-line
benefits to periods of services
line method
methodDiscount rate
2.0%
2.0%
Expected rate of return on
2.0%
2.0%
pension plan assets
principally principally
Amortization of past service cost
10 years
10 years
Amortization of actuarial
principally principally
differences
10 years
10 years

2008
Straight-line
method2.0%
2.0%
principally
10 yearsprincipally
10 years

8. Contingent Liabilities
At March 31, 2010 and 2009, the Seino Group was contingently liable
for trade notes endorsed to affiliates and third parties and for guarantees,
including substantial guarantees, principally of indebtedness of affiliates and
20

¥

2010
Operating leases:
Due within one year
Due after one year

¥
¥

393
406
799

2010
$
$

3,011
1,699
4,710

Thousands of
U.S. dollars

461
1,489
1,950

2009
¥
¥

275
1,053
1,328

2010
$

4,957
16,011$ 20,968

A certain consolidated subsidiary engaged in leasing operations as lessor,
enters into various lease agreements with third parties principally for vehicles.
The leases are categorized as financing leases and operating leases. At March
31, 2010 and 2009, the aggregate future minimum lease commitments to bereceived for such non-cancelable lease agreements, including the imputed
interest, were as follows:
Thousands of
U.S. dollars

Millions of yen

Thousandsof U.S.
dollars
2010

Major assumptions used in the calculation of the above
information for the years ended March 31, 2010, 2009 and 2008 wereas follows:¥

Millions of yen(211,333)(52,527)

Net periodic retirement
benefit expenses:
Service cost
¥ 3,774 ¥ 2,861 ¥ 2,844 $ 40,581
Interest cost
1,328
1,067
1,084
14,280
Expected return on pension plan assets
(120)
(28)
(42) (1,290)
Amortization of actuarial differences
564
529
553
6,064
Amortization of past service cost
380
326
294
4,086
Loss (gain) on
abolishment of
541
(50)
—
5,817
retirement benefit plan
Total retirement¥ 6,467 ¥ 4,705 ¥ 4,733 $ 69,538
benefit expenses

280
158
438

2009

In addition, 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 as below. The aggregate
minimum future lease payments for such non-cancelable operating leaseagreements, including the imputed interest portion, as lessee at March 31,
2010 and 2009 were as follows.

41.9%

2009

¥
¥

The components of net periodic retirement benefit expenses for the years
ended March, 2010, 2009 and 2008 were as follows:
Millions of yen

Thousands of
U.S. dollars

Millions of yen

2010

2010
Finance leases:
Due within one year
Due after one year¥¥

Operating leases:
Due within one year
Due after one year

¥
¥

2009

59
47
106

¥

123
674
797

¥

¥

¥

2010

103
114
217

$

71
200
271

$

$

$

635
505
1,140
1,323
7,247
8,570

10. Net Assets(a)

The Japanese Corporate Law (“the Law”) became effective on May 1, 2006,
replacing the former Japanese Commercial Code. The Law is generally
applicable to events and transactions occurring after April 30, 2006 and forfiscal years ending after that date.
Under Japanese laws and regulations, the entire amount paid for new
shares is required to be designated as common stock. However, a company
may, by a resolution of the Board of Directors, designate an amount notexceeding one-half of the price of the new shares as additional paid-in capital,
which is included in capital surplus.
Under the Law, in cases where a dividend distribution of surplus ismade, the smaller of an amount equal to 10% of the dividend or the excess, ifany, of 25% of common stock over the total of additional paid-in capital andlegal earnings reserve must be set aside as additional paid-in capital or legal
earnings reserve. Legal earnings reserve is included in retained earnings in
the accompanying consolidated balance sheets.
Under the Law, legal earnings reserve and additional paid-in capital
could be used to eliminate or reduce a deficit by a resolution of theshareholders' meeting. Additional paid-in capital and legal earnings reserve
may not be distributed as dividends. All additional paid-in capital and alllegal earnings reserve may be transferred to other capital surplus and retained
earnings, respectively, which are potentially available for dividends.
At March 31, 2010 and 2009, capital surplus principally consisted of

(b)additional paid-in capital. In addition, retained earnings included legal
earnings reserve of the Company in the amount of ¥4,262 million ($45,828
thousand) at March 31, 2010 and 2009.
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.
At the annual shareholders’ meeting held on June 29, 2010, the shareholders
approved cash dividends of ¥11 per share, amounting to ¥2,194 million($23,591 thousand). The appropriations have not been accrued in the
consolidated financial statements as of March 31, 2010 as such appropriations
are recognized in the period in which they are approved by the shareholders.

12. Real Estate For Rent
Some of the Company’s subsidiaries own for rent land and facilities whereclosed or redeployed branches used to be. The book values in the consolidatedbalance sheets, changes during the fiscal year under review and the fair valuesof the rental properties were as follows:Book value
March 31, 2009
Increase
March 31, 2010
Fair value
March 31, 2010

11. Income Taxes
The tax effects of temporary differences that give rise to a significant
portion of deferred tax assets and liabilities at March 31, 2010 and 2009 wereas follows:
Millions of yen

2010
Deferred tax assets:
Current
Non-current
Deferred tax liabilities:
Current
Non-current

¥

4,194
11,1895¥ 14,556

¥

¥

2010

3,691
10,642¥ 45,097
120,312

—
5,827

54
¥ 156,516

In assessing the realizability of deferred tax assets, management of the
Seino Group considers whether some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets
is dependent upon the generation of the future taxable income during theperiods in which those temporary differences become deductible. At March
31, 2010 and 2009, a valuation allowance was provided to reduce the deferred
tax assets to the extent that the management believed that the amount of thedeferred tax assets was not realizable.
A reconciliation of the differences between the Japanese statutory effective
tax rate and the actual effective income tax rate on pretax income reflected in
the accompanying consolidated statements of operations for the year ended
March 31, 2010 was as follows:
Percentage of pretax income

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

2010
40.4%

2009
40.4%

0.8
(0.3)
5.0
(22.7)
0.5
1.4
0.2
25.3%

1.6
(0.6)
8.1
(25.1)
—
26.1
(0.3)
50.2%

$

113,839
26,602
140,441
184,226

17,133

Rental properties
Operating revenue¥
Operating costs
Difference
Others (gains (losses) on sale ofproperty, etc.)

Thousands of
U.S. dollars

1,264
234
1,030
102

$

13,591
2,516
11,075
1,097(Supplementary Information)
Effective from the fiscal year ended March 31, 2010, the Seino Group
has adopted ASBJ Statement No. 20, “Accounting Standard for Disclosuresabout Fair Value of Investment and Rental Property,” issued on November
28, 2008, and ASBJ Guidance No. 23, “Guidance on Accounting Standard
for Disclosures about Fair Value of Investment and Rental Property,” issued
on November 28, 2008.

13. Financial Instruments(a)Thousands of
U.S. dollars

2009

10,5872,474
13,061Millions of yen

At March 31, 2010 and 2009, deferred tax assets and liabilities wererecorded as follows:
Millions of yen¥

Profit and loss in the fiscal year ended March 31, 2010 were as follows:

Thousands of
U.S. dollars

2010
2009
2010
Deferred tax assets:
Employee retirement benefit liability ¥ 22,431 ¥ 20,517 $ 241,194
Enterprise tax accruals
351
92
3,774
Accrued bonuses
3,342
3,117
35,936
Intercompany capital gains
956
998
10,280Operating loss carryforwards
2,074
1,830
22,301
Loss on assets transferred
1,725
1,690
18,548
Impairment loss on fixed assets 12,877
10,922
138,462
Allowance for doubtful accounts
187
202
2,011
6,876
5,036
73,935
Other
50,81944,404546,441(24,661)(19,732)(265,172)Less, valuation allowance
26,15824,672281,269
Deferred tax liabilities:
Deferred capital gains
6,928
6,343
74,495
Unrealized gains on available2,983
1,906
32,075for-sale securities
Valuation adjustments for consolidation 15,348
7,832
165,032
77
85
828
Other
25,336
16,166272,430¥822 ¥ 8,506 $8,839
Net deferred tax assets

Thousands of
U.S. dollars

Millions of yen

(b)

(c)

Effective from the year ended March 31, 2010, the Seino Group adopted
ASBJ Statement No. 10, “Accounting Standard for Financial Instruments,”
revised on March 10, 2008, and ASBJ Guidance No. 19, “Guidance on
Disclosures about Fair Value of Financial Instruments,” revised on March 10,
2008.
Policies on financial instruments
The Seino Group consolidated its temporary cash surplus to theCompany by utilizing its Cash Management System. The Company invests
in low-risk and short-term instruments in accordance with its internal fundmanagement rules. The Company mainly raises funds through indirect
financing such as bank loans for investments in facilities taking immediateliquidity into consideration.
Details of financial instruments and risks
Trade receivables are exposed to credit risk of customers. Some of thesubsidiaries have receivables in foreign currency and are exposed foreign
currency exchange risk.
Marketable and investment securities, which consist of held-to-maturity
securities and marketable securities business entities with which the Seino
Group has business relationships, are exposed to stock market fluctuation
risk.
Notes and accounts payable have general terms and conditions and aremostly due within one year. However, some of the subsidiaries have them inforeign currency which exposes them to exchange risk.
Some loans are used principally for capital investments. Long-term debt
with variable interest rates is exposed to interest rate fluctuation risk.
Risk management for financial instruments(1) Monitoring of credit risk
In accordance with internal policies for credit risk management, eachsubsidiary monitors the creditworthiness of its customers and manages
the terms and conditions of payment, due dates and remaining balances
to reduce such risk.
Regarding held-to-maturity securities, the Company invests in highcredit-rating bonds in accordance with its internal fund management
rules. As a result, the risk is de-minimis.
(2) Monitoring market risk
The board of directors regularly monitors market risk based on the
management methods which they decide in accordance with internalmarket risk management rules. For marketable securities, the Seino
Group monitors market prices every quarter, and reviews the market
condition, financial position and business relationship of the issuers.
(3) Monitoring liquidity risk
The Company has a Cash Management System with its subsidiaries andbecomes the paying agent for the subsidiaries under the system. The
subsidiaries report their cash flow projections to the Company. The
21

(d)

Company has sufficient bank credit lines, including overdrafts, enabling
the Seino Group to manage liquidity risk.
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, as
various factors are incorporated into these calculations, the resulting values
may differ if different assumptions are provided.

Millions of yen
Fair value

Difference

Cash and cash equivalents ¥Trade receivables
Short-term investments andinvestment securities¥
Total assets

25,29925,301

2

166,042 ¥

166,044 ¥2

Trade payables¥
Short-term borrowings
Current portion of long-term debt
Long-term debt¥
Total liabilities

65,488 ¥
2,315
328
654
68,785 ¥65,488 ¥
2,315
328
653
68,784 ¥

—
—
—
(1)
(1)

43,667 ¥97,076

43,667 ¥97,076——

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

Cash and cash equivalents $ 469,538 $ 469,538 $Trade receivables
1,043,828
1,043,828
Short-term investments and272,032
272,053
investment securities$ 1,785,398 $ 1,785,419 $Total assets——

Trade payables$
Short-term borrowings
Current portion of long-term debt
Long-term debt$
Total liabilities

—
—
—
(10)
(10)

704,172 $
24,892
3,527
7,032
739,623 $704,172 $
24,892
3,527
7,022
739,613 $21
21

Notes:
1. Method of measuring the fair value of financial instruments
Assets(1) Cash and cash equivalents
As these instruments are settled within a short term and theirfair values and book values are nearly identical, their bookvalues 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
value of future cash flows through maturity discounted using
an estimated credit risk adjusted interest rate. The carrying
amounts of notes and trade receivables other than installment
sales receivables approximates fair value because of the shortmaturity of these instruments.
(3) Short-term investments and investment securities
The fair value of marketable securities equals quoted market
price, if available. The fair value of debt securities equals
quoted market price or the price provided by financial
institutions. Marketable and investment securities classified
according to the purpose for which they are held are describedin Note 4.
Liabilities(1) Trade payables
As these instruments are settled within a short term and theirfair values and book values are nearly identical, their bookvalues are assumed as their fair values.
(2) Short-term borrowings
As these instruments are settled within a short term and theirfair values and book values are nearly identical, their bookvalues are assumed as their fair values.
(3) Current portion of long-term debt
As these instruments are settled within a short term and theirfair values and book values are nearly identical, their bookvalues are assumed as their fair values.
(4) Long-term debt
Fair value of long-term debt is based on the present value of
future cash flows discounted using the current borrowing rate
for similar debt of a comparable maturity.
22

Thousands of
U.S. dollars
Book value

Millions of yen

Non-marketable securities
Preferred securities

¥

1,578
500
2,078

¥

The book value and fair values of financial instruments, and any
differences between them, as of March 31, 2010 were as follows.
Book value

2. Financial instruments for which the fair value is extremely
difficult to determine$

16,9685,377
22,345$

Financial instruments for which there is no fair value and for which thefair value is extremely difficult to determine are not included in (3) Shortterm investments and investment securities.
3. The redemption schedule for financial assets with maturities was
as follows:
Millions of yen
Within 1 year

1-5 years

Over 10years

5-10 years

Cash and cash equivalents¥ 43,667 ¥— ¥Trade receivables
77,631
18,757
Short-term investments and investment
securities
Time deposits
5,723—
Held-to-maturity securities
Corporate bonds—
100
Available-for-sale securities withmaturities(1) Government and municipal
bonds, etc.
100
47
1,800
—
(2) Corporate bonds
Short-term investments andinvestment securities total
7,623
147
¥ 128,921 ¥ 18,904 ¥

— ¥
688

—
—

—

—

—

—

—
500

—
—

500
1,188 ¥——

Thousands of U.S. dollars
Within 1 year

1-5 years

Cash and cash equivalents$ 469,538 $— $Trade receivables
834,742
201,688
Short-term investments and investment
securities
Time deposits
61,537—
Held-to-maturity securities
Corporate bonds—
1,075
Available-for-sale securities withmaturities(1) Government and municipal
bonds, etc.
1,075
506
19,355—(2) Corporate bonds
Short-term investments and81,967
1,581
investment securities total$ 1,386,247 $ 203,269 $4.

Over 10years

5-10 years

— $
7,398

—
—

—

—

—

—

—
5,376

—
—

5,376
12,774 $——For the repayment schedule for bonds payable and long-term loans
payable at March 31, 2010, see Note 6. Short-term borrowings
and long-term debt.

14. Related Party Transactions
Principal transactions between the Company’s consolidated
subsidiaries and their related parties for the year ended March 31, 2010
are summarized as follows:
Name

Title

Transaction

Millions ofYen

Thousandsof U.S.
dollars

Takao
Taguchi

Director

Sales ofhousing48

516

15. Segment Information
The Seino Group operates in five business segments: transportation services, vehicle sales, merchandise sales, leasing for real estate services and otherservices. Information by industry segment for the years ended March 31, 2010, 2009 and 2008 was summarized as follows:
Transportation

Merchandise
sales

Vehicle sales
For the year 2010:services
Operating revenue:
External customers¥
362,628 ¥87,132 ¥
1,649
4,848
Inter-segment sales
Total operating revenue
364,277
91,980362,516
88,683Operating costs and expenses¥
1,761 ¥
3,297 ¥
Operating income

Identifiable assets¥
Depreciation
Impairment loss on fixed assets
Capital expenditures

391,072 ¥
16,741
2,324
9,078

91,155 ¥
1,785
80
1,436

Transportation

Identifiable assets¥
Depreciation
Impairment loss on fixed assets
Capital expenditures

332,493 ¥15,966
1,096
24,70085,852 ¥
1,692
308
2,365

Transportation

Vehicle sales
For the year 2008:services
Operating revenue:
External customers¥
331,862 ¥
85,5371,669
8,473Inter-segment sales
Total operating revenue
333,531
94,010329,073
90,138Operating costs and expenses¥
4,458 ¥
3,872
Operating income

Identifiable assets¥
Depreciation
Impairment loss on fixed assets
Capital expenditures

338,843 ¥
15,2692,713
17,923

Transportation
services

For the year 2010:
Operating revenue:
External customers$
Inter-segment sales
Total operating revenue
Operating costs and expenses$
Operating income

Elimination

Consolidated

485,808 ¥
40,734
526,542519,6296,913— ¥(40,734)(40,734)(40,442)(292) ¥

485,808—
485,808
479,187
6,621

11,880 ¥77—
134

11,121 ¥64—
2523,083 ¥
18,954
2,404
10,936(38,409) ¥
(263)
—
(158)

484,674
18,691
2,404
10,778

Leasing for realestate services

17,855 ¥
287
—
286
Other

Total

Elimination

Consolidated

23,302 ¥25,76249,064
48,470594 ¥Millions of yen
1,187 ¥
14,214 ¥—14,213
1,187
28,427204
27,773983 ¥654 ¥433,766 ¥50,197
483,963
480,147
3,816 ¥

— ¥(50,197)(50,197)(49,714)(483) ¥

433,766—
433,766
430,433
3,333

10,954 ¥60—
384

10,276 ¥
60
192
417

459,025 ¥
18,0401,596
28,286(19,653) ¥
(265)
—
(385)

439,372
17,775
1,596
27,901

Merchandise
sales

Leasing for realestate services¥¥¥

Merchandise
sales

19,450 ¥
262
—
420
Other

234,183
230,215464,398
457,957
6,441

Identifiable assets$ 4,205,075 $Depreciation
180,011
Impairment loss on fixed assets
24,98997,613
Capital expenditures

980,161 $19,194860
15,441

127,742 $
828
—
1,441

Elimination

Consolidated

451,978 ¥49,786
501,764
491,449
10,315 ¥— ¥(49,786)(49,786)(49,396)(390) ¥

451,978—
451,978442,053
9,925

9,623 ¥
45——

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

457,871
17,016
3,115
19,65429,830 ¥
268
16
277
Other

Thousands of U.S. dollars$
13,602 $
139,828—
137,925
13,602
277,753
2,301
275,548$
11,301 $
2,205

936,903 $52,129989,032
953,581
35,451 $Total

Millions of yen
1,146 ¥
33,433 ¥—39,644
1,146
73,077
175
72,063971 ¥
1,014 ¥

Leasing for realestate services

3,899,226 $
17,731
3,916,957
3,898,022
18,935 $Notes:

Total

21,779 ¥21,41043,18942,590599 ¥85,364
1,690
386
1,915
Vehicle sales

Other

Millions of yen
1,265 ¥
13,004 ¥—12,8271,265
25,831
214
25,626
1,051 ¥
205 ¥Merchandise
sales

Vehicle sales
For the year 2009:services
Operating revenue:
External customers¥
316,341 ¥
78,722 ¥
1,807
8,415
Inter-segment sales
Total operating revenue
318,148
87,137
318,703
84,997
Operating costs and expenses(555) ¥
2,140 ¥
Operating income (loss) ¥Leasing for realestate services

119,581 $
688
—
21

Total

Elimination

Consolidated

5,223,742 $
438,000
5,661,742
5,587,409
74,333 $— $ 5,223,742(438,000)—(438,000)
5,223,742(434,861)
5,152,548(3,139) $71,194

191,989 $ 5,624,548 $
3,086
203,807—
25,8493,075
117,591(413,000) $ 5,211,548(2,828)200,979—
25,849(1,699)115,892

1. Identifiable assets in the elimination column represent unallocated general corporate items which are not assigned to a particular industry segment such as cash and shortterm and long-term investment securities, net of inter-segment balances.
2. Accounting changes:(Accounting change in the composition of reportable business segments)
Effective for the year ended March 31, 2009, the Company changed the composition of its reportable business segments from “Transportation services,” “Vehicle sales,” “Leasing for real estate services” and “Other”
segment to “Transportation services,” “Vehicle sales,” “Merchandise sales,” “Leasing for real estate services” and “Other” segment in order to disclose segment information more properly. For the year ended March
31, 2009, the “Merchandise sales” segment, which was included in the “Other” segment, was separately shown as operating revenue of its business segment exceeded 10% of total consolidated operating revenue before
elimination. If the previous reportable business segment composition was applied, operating revenue and operating income of the “Other” segment would have been ¥47,998 million and ¥579 million more, respectively,
for the year ended March 31, 2009.

(Accounting standard for measurement of inventories)
As disclosed in Note 2(f), from the year ended March 31, 2009, the Company changed the measurement of inventories. As a result, as compared with the amounts that would have been recorded with the previous
accounting method, operating income of the “Vehicle sales” segment and “Other” segment for the year ended March 31, 2009 were ¥72 million and ¥8 million less, respectively.

(Accounting standard for lease transactions)
As disclosed in Note 2(h), effective from April 1, 2008, the Company and its consolidated domestic subsidiaries have adopted the new accounting standards for finance leases commencing after March 31, 2008 andcapitalize assets used under such leases, except for certain immaterial or short-term finance leases, which are accounted for as operating leases. As permitted, finance leases which commenced prior to April 1, 2008 and havebeen accounted for as operating leases continue to be accounted for as operating leases with disclosure of certain “as if capitalized” information. The effects of adopting the new standards on the consolidated balance sheet as ofMarch 31, 2009 were not material.

(Change of accounting method for depreciation of property and equipment)
As disclosed in Note 2(g), effective from the year ended March 31, 2008, the Company and its domestic subsidiaries changed the depreciation method for property and equipment acquired on after April 1,
2007 to the method pursuant to the amended Corporation Tax Law of Japan. As a result, as compared with the amounts that would have been recorded with the previous accounting method, operating income of the“Transportation services” segment, “Vehicle sales” segment and “Other” segment were ¥352 million, ¥68 million and ¥12 million less for the year ended March 31, 2008, respectively. In addition, from the year ended
March 31, 2008, the residual value of property and equipment acquired before April 1, 2007 is depreciated over five years using the straight-line method from the fiscal year following the year in which the depreciable
limit (5% of the acquisition cost) is reached, pursuant to the amended Corporation Tax Law of Japan. As a result, operating income of the “Transportation services” segment, “Vehicle sales” segment, “Leasing for realestate services” segment and “Other” segment were ¥653 million, ¥29 million, ¥2 million, and ¥9 million less, respectively, for the year ended March 31, 2008, than the amounts that would have been recorded with theprevious accounting method.

(Change of accounting method for severance indemnities for directors and statutory auditors)
As also described in Note 2(l), until March 31, 2007, the Company and some of the subsidiaries did not provide accrued severance indemnities for directors and statutory auditors and such amounts were charged
to income when paid. Effective from the year ended March 31, 2008, the Company and such subsidiaries changed the accounting method to provide accrued severance indemnities for directors and statutory auditors.
As a result, as compared with the amounts that would have been recorded with the previous accounting method, operating income of the “Transportation services” segment, “Vehicle sales” segment, “Other” segment
and “Elimination” column were ¥94 million, ¥6 million, ¥41 million and ¥20 million less, respectively, for the year ended March 31, 2008.

Geographic segment information is not shown because operating revenue and total assets of the overseas subsidiaries were not material in the years ended
March 31, 2010, 2009 and 2008. Information for overseas sales is not disclosed because such sales were not material.

23

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

We have audited the accompanying consolidated balance sheets of SEINO HOLDINGS Co., LTD. (the“Company”) and its consolidated subsidiaries (together with the Company, the “Seino Group”) as of March 31, 2010
and 2009, and the related consolidated statements of income, changes in net assets and cash flows for each of thethree years in the period ended March 31, 2010, expressed in Japanese yen. These consolidated financial statements
are the responsibility of the Seino Group’s management. Our responsibility is to independently express an opinion onthese consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, theconsolidated financial position of the Seino Group as of March 31, 2010 and 2009, and the consolidated results of
its operations and its cash flows for each of the three years in the period ended March 31, 2010, in conformity withaccounting principles generally accepted in Japan.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March
31, 2010 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 to the consolidated
financial statements.

KPMG AZSA & Co.
Nagoya, Japan
June 29, 201024

Seino GroupThe Seino Group consists of Seino Holdings Co., Ltd. and 59 consolidated subsidiaries and 13 affi liates. The Seino
Group operates in five business segments: transportation services, vehicle sales, marchandise 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
Kyusyu Seino Transportation Co., Ltd.
*1
Kyushu Seibu Transportation Co., Ltd. *1
Okinawa Seino Transportation Co., Ltd. *1
Seino Tsu-un Transportation Co., Ltd.
*1
Seino Express Co., Ltd.
*1
Seino Hikkoshi Co., Ltd.
*1
Seino Hokkaido Express Co., Ltd.
*1
Seino Tokyo Express Co., Ltd.
*1
Seino Hokuriku Express Co., Ltd.
*1
Seino Nagoya Express Co., Ltd.
*1
Seino Osaka Express Co., Ltd.
*1
Seino ST Service Co., Ltd.
*1
Seino Logistics Hokkaido Co., Ltd.
*1
S&N Logistics Co., Ltd.
*1
Seino Butsuryu 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
Saitama Seino Transportation Co., Ltd. *2
Tokyo Seino Transportation Co., Ltd.
*2
Mikawa Seino Transportation Co., Ltd.
Ensyu Seino Transportation Co., Ltd.
Takuma Seino Transportation Co., Ltd.
Seino Kanagawa Express Co., Ltd.
Tango Seino Transportation Co., Ltd.
Box Charter Co., Ltd.
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
Netz Toyota Centro Gifu Co., Ltd. *1
Asahi Enterprise Co., Ltd. *1*1
Jms Gifu Co., Ltd.
Shiga Hino Motor Co., Ltd. *1
Seino Auto Service Kanto
Co., Ltd.
Seino Auto Lease Co., Ltd.
Toyota Gifu Parts Dsitributor
Co., Ltd.

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

Seino Transportation Co., Ltd.

Information Services

VehicleSales

Seino Information
Service Co., Ltd.

*1

Japan Logistics
Development Co.,
Ltd.

*1

OthersInternational
Transportation
Seino Logix Co., Ltd.

Leasing forReal Estate Services

Marchandise
sales

*1

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

*1

Schenker-Seino Co., Ltd.

*2

Asahi Agency Co., Ltd. (Advertising agency)*1
Seino Do Brasil Armazens Gerais Ltda. (Storage)*1
Suito Travel Co., Ltd. (Passenger transportation, Travel agency) *1
Seino Engineering Co., Ltd. (Construction)*1
Seino Family Co., Ltd. (Insurance agency service)*1
Seino Staff Service Co., Ltd. (Personnel service)*1
Toyota Home Gifu Co., Ltd. (Housing sales)*1Asahi Create Co., Ltd. (Comprehensive printer)*1
Seino Business Support Co., Ltd. (Business support services) *1
Seino Ecotrading Inc. (Wholesale fo recycled resources)*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.

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