The Road to
Success
Seino Holdings Co., Ltd. Annual Report 2009
Year Ended March 31, 2009

ProﬁleSeino 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, 52 consolidated subsidiaries and 15
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, 2009, Seino oﬀers eﬃcienttransportation services throughout Japan via its 414 domestic
terminals, a ﬂeet of 21,325 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 andSchenker’s global network andcutting-edge IT systems.
The Seino Group is committed
to providing rapid services thatdeliver total customer satisfaction
and will proceed down the “Road to
Success” to become a highly
proﬁtable company throughinitiatives to develop a progressive
business model that will become thestandard for next-generation transportation business.
Forward-looking Statements:
In this annual report, statements other than historicalfacts are forward-looking statements that reflect theplans and expectations of the Company. These
forward-looking statements involve risks, uncertainties
and other factors that may cause the Company’s
actual results and achievements to differ materiallyfrom those anticipated in these statements.

Contents
Financial Highlights

1

To Our Shareholders, Customers and Friends

2

Toward Realizing the Goals of the CS Improvement Plan, 4
the Group’s New Medium-Term Management PlanCSR Topics

6

Review of Operations

8

Financial Review

10

Six-year Summary

11

Consolidated Balance Sheets

12

Consolidated Statements of Operations

13

Consolidated Statements of Changes in Net Assets

14

Consolidated Statements of Cash Flows

15

Notes to Consolidated Financial Statements

16

Report of Independent Auditors

24

Seino Group

25

Board of Directors(As of June 25, 2009)
Chairman andChief Executive Officer
Yoshikazu Taguchi

Outside Directors
Yuji Tanahashi
Kenjiro Ueno

President andChief Operating Officer
Yoshitaka Taguchi

Standing Statutory
Auditors
Yoshio Matsuoka
Takahiko Kumamoto

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

Outside Statutory
Auditors
Fumio Kato
Eiji Kasamatsu

SEINO HOLDINGS CO., LTD.

Financial Highlight(Billions of Yen)

For the Years Ended March 31, 2009, 2008 and 2007
Thousands of
U.S. Dollars 2

Millions of Yen
CONSOLIDATED BASIS:
Operating revenue
Operating income
Income before income taxes and minority interests
Net income
Net income per share (in yen and dollars)

2009

2008

2007

2009

¥433,766
3,333
6,941
3,391
17.03

¥451,978
9,925
13,3836,018
30.27¥449,486
10,796
14,5798,797
44.71$4,426,184
34,01070,82734,602
0.17

2009

2008

2007

Thousands of
U.S. Dollars 2

Millions of Yen
2007

2009

2008

2009

Net (loss) income(Billions of Yen)

CONSOLIDATED BASIS:
Cash and cash equivalents, and short-term investments
Property and equipment, net of accumulated depreciation
Total assets
Long-term debt and other long-term liabilities
Net assets
Net assets per share (in the whole yen and dollars)20¥ 42,197
246,790439,372
64,812
291,564
1,433.40¥ 54,299
240,444457,871
70,842
293,985
1,445.62¥ 52,421
242,374
468,006
76,178292,848
1,451.36$ 430,582
2,518,265
4,483,388
661,347
2,975,143
14,626.53(Notes) 1. Yen and U.S. dollar amounts have been round off to the rearest number.
2. U.S. Dollars amounts are translated at ¥98 = U.S. $1, only for convenience of readers.

15
10
5
0
-5
-10
2007

2008

2009

2008

2009

(Billions of Yen)

Corporate Data
(As of March 31, 2009)

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
AZUSA Audit Corporation

2007

1

Message from the Management

To Our Shareholders, Customers and Friends
We would like to take this opportunity to express our appreciation to our stakeholders, including shareholders
and other investors, for the consistent support they have shown us over the years. The results for the ﬁscal year
ended March 31, 2009 (from April 1, 2008 to March 31, 2009) are presented herein.

 Operating Environment
During the ﬁscal year under review, while the global
ﬁnancial crisis triggered by the subprime loan problem
signiﬁcantly impacted the real economy, the Japanese
economy also rapidly deteriorated from the second half of theterm, reﬂecting a sharp decline in exports and production as
well as adverse eﬀects on corporate earnings and theemployment situation.
In the transportation industry, transportation demand
continued to decline on the back of a steep rise in fuel costs inthe ﬁrst half of the term and an abrupt slowdown in capital
investment and personal spending in the latter half of theterm. Consequently, competition among other companies in
the industry further intensiﬁed and the operating
environment became increasingly challenging.

 Initiatives and Results for the Fiscal Year
Under Review
Amid these circumstances, in order to achieve its
mission of contributing to the nation and society by providing
preeminent transportation services esteemed by customers,
the Seino Group has undertaken concerted eﬀorts to pursue
sound management based on a business structure suitable tothe current economic environment with the aim of achieving
the goals of our three-year medium-term management plan,
the “Customer Satisfaction (CS) Improvement Plan” (April
2008 – March 2011).
Additionally, in order to overcome this diﬃcult
economic environment, the Seino Group promoted“successful execution” as its slogan to emphasize theimportance of thoroughly executing policies and measures
together as a united group.
The Group has also strengthened and increased thenumber of sectional meetings held for Group companies tostreamline the organizational structure and improve
management eﬃciency. In addition, we have reviewed
operating systems and areas beyond Group company
boundaries to share management resources and consolidate
overlapping back-oﬃce operations.
Despite these initiatives, consolidated operating revenue
for the year under review declined 4.0% from the previous
year to ¥433,766 million. Operating income dropped 66.4%
to ¥3,391 million and net income fell 43.7% to ¥3,391
million.

 Outlook
In the transportation industry, the Seino Group’s corebusiness segment, the total volume of freight handled is
expected to decline further given the reduction in capital2

investment and personal spending in line with the worseningof corporate earnings and the employment situation. The
operating environment is also expected to remain diﬃcult,including ﬁercer competition with other industry players.
Amid this environment, based on the philosophy of its
medium-term management plan, the CS Improvement Plan,
the Group is promoting various initiatives to expand its
logistics business, improve transportation quality and expand
other businesses. In addition to these eﬀorts, all employees areundertaking concerted eﬀorts to secure customers’ trust,
thereby promoting greater cost reductions and rationalization
together with striving to realize further growth throughachieving the management missions of respective Group
companies.
Speciﬁcally, 17 relation to the Transportation Services
business, given ﬁerce and excessive competition caused byoversupplly and based on the assumption of “examining
shared trunk-route transportation,” we are currently
promoting the building of a cooperative framework throughdiscussions on various aspects such as identifying problems
and speciﬁc issues that need to be solved in working to build
an alliance with Less-than-Truck Load (LTL) operators.
Additionally, in order to ensure we successfully survive
in this economic recession, it is essential that we establish amore intricate and uniform quality of service via ournationwide network. To achieve this, it is absolutely
imperative that we further strengthen the cooperative
structure among the Group and reinforce collaboration as
well as promote the rapid relay of information and decisivedecision-making.
On the back of these measures, at Seino Transportation
Co., Ltd., a company that plays a central role, we haverestructured the former organization that consisted of 27
blocks nationwide into 15 areas and are pursuing swift
execution of operations in all areas.
In logistics, we will focus on “people, property andequipment and funds” as a means of developing logistics intoa major pillar of our business. Also, from a cost perspective,
we will undertake greater eﬀorts to control costs according torevenues and the volume of freight handled throughdeveloping transportation timetables that are speciﬁc to eachday of the week, restructuring the timetable for oﬀ-season
periods and reviewing the deployment of personnel.
Moreover, initiatives are currently underway incooperation with our subsidiary, Seibu Transportation Co.,
Ltd., including eﬀorts aimed at promoting eﬃciency of our
trunk-route network, integration and relocation of redundantbases, strengthening of domestic air freight business andaugmenting our lineup of services to maximize synergies.
In the Vehicle Sales business, we will focus onproviding ﬁnely tuned services by quickly comprehending

customer needs. As a means of increasing proﬁts, in terms ofpassenger vehicle sales, we will concentrate on sales expansionof new models as well as inspection and maintenance.
Meanwhile, in truck sales, we will work to speed up businessexpansion and utilize our accumulated know-how to expand
our market coverage in Shiga Prefecture.
As a result of these measures, the Company forecasts
operating revenue of ¥500,000 million and net income of¥8,500 for the term ending March 31, 2010.

 Corporate GovernanceSeino employs a corporate auditor system. As of March
31, 2009, the Board of Directors consisted of nine directors,
including two outside directors. In addition to making swift
and appropriate decisions on such important matters as
business restructuring and strategic investments, the Board of
Directors is taking important steps to strengthen auditing
functions and achieve greater management transparency.
The Company also has four corporate auditors,
including two outside auditors. Auditors are committed to
improving compliance and enhancing the trust that society
has in the Company through such activities as attending
meetings of the Board of Directors, conferences of directors
and other important gatherings, and carrying out auditing
operations.

 Internal Control over Financial Reporting(‘ICOFR’)

Yoshikazu Taguchi
Chairman and Chief Executive Oﬃcer

In our opinion of the internal control report, ICOFR
was eﬀective as of March 31, 2009, as a result of theassessment in conformity with assessment standards for
ICOFR generally accepted in Japan.

 Results of Independent Auditor’s Report on
the ICOFRIn the opinion of KPMG AZSA & Co., the internal
control report referred to above presents fairly, in all material
respects, the assessment of ICOFR in conformity withassessment standards for ICOFR generally accepted in Japan.

 To Our Shareholders
In keeping with its basic business policy, Seino seeks toenhance shareholders’ equity and improve proﬁtability from along-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, 2009, the same amount as in the previous year.
In accordance with its new medium-term management
plan, management is fully committed to making Seino thepreeminent commercial freight transportation company inJapan, while at the same time raising corporate andshareholder value. We ask our shareholders, customers andfriends for their continued support.

Yoshitaka Taguchi
President and Chief Operating Oﬃcer

August 20093

Special Feature

Toward Realizing the Goals of the CS Improvement Plan,
the Group’s New Medium-Term Management Plan
The Seino Group has initiated its CS Improvement Plan, a new medium-term management plancommencing from April 2008 to March 2011. The main items and speciﬁc initiatives to realize this plan are
introduced herein.

Seino HoldingsGroup Endeavors of Each Business Main Initiatives of the CS Improvement
Plan

Transportation Services

The goals of the CS Improvement Plan are to
improve customer satisfaction (CS) and increase theGroup’s corporate value by shifting the focus fromquantity to quality based on providing services that
customers will value.
Speciﬁcally, we will implement the following
initiatives:① Expand the logistics business: As a freight
forwarder capable of one-stop receipt of orders, wewill expand our services by designing and proposing
optimum logistics services for customers.
Speciﬁcally, we will manage the overall supply chain
for customers at our distribution management
centers, leveraging the Seino Group’s IT networks tooptimize customer distribution and inventories.
② Develop timetables for trunk-routetransportation: To raise customer satisfaction andbecome a preferred provider of transportation
services, we will promote regular services and strive
to increase cargo shipments for our main routes,
strengthen our network, work to improve
operational accuracy and pursue eﬃciency gains.
③ Strengthen network: To realize ﬁne-tuned services
in conjunction with the establishment of terminals,
we will expand Kangaroo Business Centers as
satellite oﬃces in the Tokyo metropolitan area.
④ Improve operational accuracy: We will simplify
and enhance the speed of operations by introducing
postal codes to delivery addresses.
⑤ Expand vehicle sales: In addition to expanding andestablishing new sales outlets in the market via
M&A, we will develop new businesses and services
including maintenance and leasing and cleaning
service businesses.
⑥ Strengthen other businesses: We will promote theeﬃciency of redundant operations by strengthening
the temporary staﬃng business, eﬀectively utilizing
resources and introducing shared services.
4 Seino Rinku Logistics Center Opened
Construction of the
Seino Rinku Logistics
Center was completed
and operationscommenced fromFebruary 5, 2009. This
logistics center features
2-tier storage and boasts
the largest area among
the facilities of Seino Transportation Co., Ltd. with aﬂoor area of approximately 19,168m3, including oﬃce
space and rest rooms.
Adjacent to Kansai International Airport, which is
the largest international airport in western Japan, thiscenter is also accessible within 30 minutes to Osaka
Nanko Port, which is one of the leading ports
nationwide in terms of the volume of container cargohandled. The development of the Center is anticipated
as a representative base of our logistics business in the
future.

 Keihin Terminal Branch Expanded
Seino Transportation’s Keihin Terminal Branch isoperating at the Keihin Truck Terminal in the Ota
district in Tokyo; however, in line with thereconstruction of the Keihin Truck Terminal, we rented
roughly 2.6 times the space of the previous terminal
and newly commenced operations from September 8,
2008.
Along with the
installation of automatic
sorting machines, thisbranch will also carry out
reshuﬄing of territories
with Tokyo branches,
which are handling alarger volume, thereby enhancing transportation
quality including improvement of the lead-timecompliance rate.

 Iwatsuki Branch Established
Construction of the new Iwatsuki Branch (Saitama
city, Saitama Prefecture), with which Seino
Transportation has been proceeding for some time, wascompleted and operations commenced from March 2,
2009.
The new Iwatsuki Branch is located to the north of
the Tokyo metropolitan area and is conveniently
accessible in approximately 10 minutes by car from the
Tohoku Expressway
interchange, which is amajor distribution arteryfor the Tohoku region. At
the same time, carryingout relay operations at thebranch is directed toward
improving transportationlevels and eﬃciency in both the Tohoku region and
Kanto region as a consolidated arrival and departurebase that connects these two regions.

 Kangaroo Business Centers Established
Seino Transportation has been working to establish
Kangaroo Business Centers as satellite oﬃces since
February 2008 to provide community-based
distribution services in business districts in the Tokyo
metropolitan area. Accordingly, as of March 2009,
Seino Transportation has established 16 KangarooBusiness Centers in eight business districts withincentral Tokyo, including the Chiyoda and Chuo
districts. This enables more customer-oriented services,such as faster delivery and pickup, to be provided. At
the same time, since the centers’ staﬀ use trolleys fordelivery, this contributes to alleviating traﬃc jams onstreets in Tokyo and beneﬁts the environment.

initiative.
In the immediate
future, mainly targetingbusiness partnercompanies of respective
branch oﬃces of Kanto
Seino Transportation,
trucks used by thecompany and vehicles according to customer needs will
be selected from among the auctions of Gifu Hino
Motor Co., Ltd. and Asahi Enterprise Co., Ltd. andsubsequently sold after being painted and carrying out
maintenance. In that this is the ﬁrst time in which the
Seino Transportation Group has undertaken such an
initiative in the used vehicle sales business, there arehigh expectations for being able to utilize Seino’s
coating and maintenance technologies.

Vehicles Sales and Other Businesses
 Shiga Hino Motors Co., Ltd. Newly Joined
Seino Group
Gifu Hino Motor Co., Ltd. acquired shares of
Shiga Hino Motors Co., Ltd. (Ritto city, Shiga
Prefecture), a wholly owned subsidiary of Hino Motors,
Ltd. (Tokyo), and became a consolidated subsidiary asof January 7, 2009.
Shiga Hino Jidosha Motors Co., Ltd. is a newcompany with approximately 100 employees that wasestablished by spinning oﬀ Keiji Hino Motors Co., Ltd.
into Kyoto Hino Motors Co., Ltd. and Shiga Hino
Motors Co., Ltd.
Extending its sales network into neighboring Shiga
Prefecture is expected to expand existing services aswell as realize eﬃcient use of personnel and economic
resources and strengthen its sales base.

 Kanto Seino Transportation Co., Ltd.
Vehicle Direct Sales Center Established
In August 2008, Kanto Seino Transportation Co.
Ltd. has established the Vehicle Direct Sales Center todevelop its used truck sales business. Kanto Seino
Transportation has been focusing on direct sales,
providing vehicle inspections and maintenance tocompanies outside the Seino Group since 1994, and theestablishment of the center at this time is part of this5CSR Topics
Commitment as a Corporate Citizen

Companies within the Seino Group strive to fulﬁll their corporate social responsibilities as a criticalmanagement issue that must be addressed to meet the expectations of all stakeholders and earn society’s trust
as a corporate citizen. The following section brieﬂy introduces the activities of Seino Group companies, whichaspire to preserve the global environment, ensure safety, 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 aswell 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, such as
natural gas vehicles, hybrid vehicles and electric
forklifts. In particular, we are adopting hybrid vehicles
in an eﬀort to reduce CO 2 emissions.
● Shifting transportation modes
We seek to both save energy and maintain service
levels by facilitating a shift in transport modes,
combining road transportation with shipping by railand sea.
● Promoting eﬃcient transportation
We save energy by eﬃciently transporting the volume
of cargo handled through the improvement of loadeﬃciency, use of large vehicles and promotion of joint
operations along with responding to changes infreight loading during trucking oﬀ-seasons.
● Developing an energy-saving and environmentallyfriendly vehicle ﬂeet
We take comprehensive measures such as adoptingintercooler turbo vehicles, adopting cylinder cowling,utilizing energy-saving tires and reducing vehicle
weight.
● Environmentally friendly and energy-saving driving
We are fully committed to all drivers practicing“eco-driving” to minimize the adverse eﬀect on theenvironment.

6

 The Environment
New Company for Resource Recycling
Newly Established
Seino Eco Trading Co., Ltd. was established on
November 1, 2008 the newest member of the Seino
Group. The company collects packaging materials
including waste wrapping and used polypropylene bandand bubble pack from the Seino Transportation Groupand sells these materials to Chinese vendors
manufacturing recycled plastics. Additionally, thecompany launched an initiative to oﬀer recycled resin
palettes made from these raw materials at a low price. In
addition to cutting costs such as processing costs ofwaste materials of transportation group companies,
including Seino Transportation, this initiative is also
contributing to Group management that takes into
account the global environment such as through the
reduction of waste materials, eﬃcient use of resources
and CO 2 reductions.

 Contributing to the International
Community
Launch of TFT Activity at Seno Transportation
Aims to Eliminate Unbalanced Diet
The cafeteria inside Seino Holdings’ head oﬃce haslaunched the Table for Two (TFT) activity from October
2008 to address the international issue of malnutrition indeveloping countries and obesity in developed countries.
As part of its TFT activity, originating from Japan, thecafeteria at Seino Transportation’s head oﬃce oﬀers a
reduced-calorie menu along with donating ¥20 from theprice of these menu items to developing countries. Since¥20 corresponds to the amount required for a meal forchildren in developing countries, this activity was named“Table for Two,” which signiﬁes “having a meal with

someone.”
Additionally, the cafeteria is widely accessible toGroup companies located on the same premises as well
as neighboring residents.

 Contributing to Local Communities
Proposal-Based Internships for Students from
Commercial High Schools
Tokai Seino
Transportation Co., Ltd. iscollaborating with aproposal-based internshiptraining program forcommercial high schools
sponsored by Gifu
Prefecture. Under thisprogram, students receive basic training, after which they
visit actual workplaces with instructors to detect areas ofwaste and then work out improvement measures bythemselves. Although this program has been
implemented up until now at manufacturing sites, thismarks the ﬁrst time that such practical training has been
carried out in non-manufacturing industries.
On August 12, 2009, a total of 19 students studyingcommercial subjects at two high schools in Gifu
Prefecture visited Tokai Seino Transportation. The
students were divided into three groups and received
explanations about how the ﬂow of incoming andoutgoing invoices is handled. In each group, students
considered improvement measures from theirperspectives as high school students, and the following
day speciﬁc improvement proposals were presented.

Traffic Safety Classes Held at Nursery Schools
Beginning in the ﬁscal year ended March 31, 2009,
Netz Toyota Centro Gifu Co., Ltd., which engages in thesale of automobiles, has been holding traﬃc safety classes
for preschool-age children through each of its 19 branchoﬃces. The ﬁrst such class, which taught traﬃc safety
rules and manners, was held on April 25, 2008 at
Nagasawa Nursery School in Ogaki, Gifu Prefecture, andwas attended by students and their parents. Netz Toyota
Centro Gifu implemented these traﬃc safety classes withthe cooperation of the Gifu aﬃliate of the Japan
Automobile Federation.

Tokai Seino Transportation
Lifesaving Courses for All Employees
All employees of Tokai Seino Transportation
successively participated in emergency lifesaving courses.
Held at ﬁre departments closest to each business oﬃce,
the courses covered the use of automated externaldeﬁbrillators (AED) as well as cardiopulmonary
resuscitation and other emergency treatment methods
utilized while waiting for an ambulance to arrive whenan accident-caused injury occurs or if a person becomes
stricken with an illness at his or her workplace or home.
The ﬁrst course was held on May 12, 2009 at the Tajimi
Kita ﬁre department in Gifu Prefecture and was attended
by 20 people, including Tokai Seino Transportation
President Toshihisa Taguchi.

7

Review of Operations
The Seino Group’s business is separated into five segments. The performance of each of our business segments is outlined below. Additionally,
the Merchandise Sales Business was previously included in Other business; however, the significance of this business has increased in terms ofoperating revenue and is therefore separately posted as a business segment from the current consolidated fiscal term under review.

Transportation Services
In the transportation industry, transportation demand
continued to decline on the back of a steep rise in fuel costsin the first half of the term and a sudden slowdown in capital
investment and personal spending in the latter half of theterm. Consequently, competition among other companies in
the industry further intensified and the operating environment
became increasingly challenging.
Amid this environment, the transportation group has
undertaken concerted efforts to further enhance quality.
Additionally, we have continued our efforts to enhance
management efficiency and establish a profitable structure by“securing revenues” via the development of the logistics business,“improving profits” through the pursuit of efficiency and costbudget management, and sales expansion of our EstimatedDelivery Time Service.
Kyushu Seino Transportation Co., Ltd. (which changed
its trading name from Showa Seino Transportation Co., Ltd.)acquired the majority of the truck transportation businessof Sengoku Seino Transportation Co., Ltd., a subsidiary of
Iwasaki Sangyo Corporation. With this takeover and by
consolidating business in the Kyushu region, we were able toprovide a more uniform quality of service via our nationwide
network. Additionally, Kyushu Seino Transportation is working
to improve efficiency and make effective use of management
resources by eliminating and merging redundant bases.
In order to realize optimal logistics throughout theindustry, we have changed our perspective as a carrier to aperspective as a freight forwarder and have strived to strengthen
joint operations and the logistics business through utilizing
a trunk-route transportation network. We have also focused

Vehicle Sales
In passenger vehicle sales, amid the difficult environment
characterized by a major decline in overall demand due tosuch factors as an aging society and a declining birthrate, thepronounced trend of young people in Japan being less inclined
to drive cars and greater consumer diversification, the vehicle
sales group worked to secure sources of revenue by expanding
sales of fully remodeled vehicles while developing new
businesses and services.
While sales of minivans, beginning with new model
vehicles, were favorable, unit sales of new vehicles fellsignificantly from the previous year due to a rapid decelerationin the automobile market arising from the financial crisis.
Additionally, used car sales dropped both in the number of units
sold and revenues due to the market downturn.

8

on personnel training for proposal-based sales activities
by reinforcing the logistics departmental structure at theTokyo head office and in Tokyo, Nagoya and Osaka. As forfacilities, we have newly established the Seino Rinku Logistics
Center (Izumisano city, Osaka) as the largest facility of Seino
Transportation Co, Ltd. Moreover, we are working to enhancethe organizational structure by improving transportation services
to in turn promote sales expansion in small parcel transportation.
With regard to the development of operational bases
supporting transportation quality, we have expanded the Keihin
Terminal Branch (Ota district, Tokyo) and newly establishedthe Iwatsuki Branch (Saitama city, Saitama Prefecture). At thesame time, we have developed 16 “Kangaroo Business Centers,”
which are small terminals handling limited pickup and delivery
areas compared with regular areas to address office districts incentral Tokyo, thereby improving precision of delivery times andenabling frequent response. In this way, we have taken measures
to help further raise customer satisfaction by providing morecustomer-oriented services.
In terms of administration costs, in addition to a switching
to variable costs for route operations and staff allocation inaccordance with workloads, we have thoroughly cut costs
including efforts to achieve savings in public utility fees andreusing various materials.
Despite these initiatives, the sluggish movement of logistics
in the second half of the term along with the significant impact
of soaring fuel prices in the first half of the term resulted ina decline in operating revenue in the Transportation Services
segment of 4.7% to ¥316,341 million (US$3,228 million) versus
the previous consolidated fiscal term and an operating loss of¥555 million (US$6 million).

In truck sales, the cycle of substitute demand in line withenvironmental regulations come to an end and user replacement
demand also fell mainly due to soaring fuel prices and the sharp
economic deterioration. Under these circumstances, we haveundertaken efforts to secure profits through actively developingused vehicle sales and promoting efficiency of maintenanceservices. Additionally, Shiga Hino Motors Co., Ltd. became oursubsidiary as part of efforts to strengthen our sales foundation
through expanding our sales network into Shiga Prefecture
in tandem with promoting efficiency by making effective use
personnel and management resources.
As a result, operating revenue was ¥78,722 million(US$803 million), down 8.0% versus the previous term, while
operating income dropped 44.7% to ¥ 2,140 million (US$22
million) year on year.

Merchandise Sales

an increase in external sales during the fiscal term under review
and start of sales through agents of paper products, operating
revenue was ¥23,302 million (US$238 million), while operating
income amounted to ¥593 million (US$6 million).

Seino Trading Co., Ltd., which accounts for the majorityof sales in the Merchandise Sales business, is engaged inbusinesses centering on sales of fuel and merchandise. Due toLeasing for Real Estate Services

development projects or a lack of available land, the old site isleased out to maximize the benefits of management resources.
Key examples of this have been the former Yotsubashi (Osaka
City), Shinmachi (Osaka City) and Fukui (Fukui Prefecture)terminals. Additionally, companies outside the transportationgroup also engage in leasing as the most effective means togenerate returns on their assets.

Operating revenue amounted to ¥1,186 million (US$12
million), a 3.5 % increase from the previous year, while operating
income rose 1.3% to ¥983 million (US$10 million) year on year.
In this business segment, when terminals of severaltransportation group companies, including Seino Transportation
Co., Ltd., are relocated to other sites for reasons such as urban

Otherproperties and other businesses. Operating revenue was ¥14,214
million (US$145 million) and operating income amounted to¥654 million (US$7 million).

This business segment is made up of information services
related business as well as personnel services, sales of residential

Operating Revenue by Business Segment(Millions of yen)
FY3/09Results

FY3/08Composition

Year-on-YearTransportation Services

316,341

Composition
72.9%

Results
331,86273.4%(4.7)%

Vehicle Sales

78,72218.1%

85,53618.9%(8.0)%

Merchandise Sales

23,302

5.4%

19,905

4.4%

17.1%

Leasing for Real Estate Services

1,186

0.3%

1,146

0.3%

3.5%

Other

14,214

3.3%

13,527

3.0%

5.1%

Total

433,766

100.0%

451,977

100.0%(4.0)%

Operating Income by Business Segment(Millions of yen)
FY3/09Results

FY3/08Composition

Results

Composition

Year-on-YearTransportation Services(555)(16.7)%

4,457

44.9%

—

Vehicle Sales

2,140

64.2%

3,871

39.0%

(44.7)%

Merchandise Sales

593

17.8%

538

5.4%

10.2%

Leasing for Real Estate Services

983

29.5%

971

9.8%

1.3%

Other

654

19.7%

511

5.2%

2.8%

Total

3,816

114.5%

10,359104.3%(63.1)%

Elimination(483)(14.5)%(425)(4.3)%—

Consolidated

3,332

100.0%

9,924

100.0%(66.4)%

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

9

Financial Review
Operating Results
Consolidated operating revenue for Seino Holdings forthe fiscal year ended March 31, 2009 decreased 4.0% from theprevious year to ¥433,766 million (US$4,426 million). This is
primarily due to a slight decline in the Vehicle Sales businessversus the previous year, reflecting the sluggish movement oflogistics in the Transportation Services business in the second
half of the term.
Operating costs dropped 3.1% to ¥397,826 million(US$4,059 million). The ratio of operating costs to operating
revenue was 91.7%, up 0.9 percentage point.
Selling, general and administrative expenses increased 3.6%
to ¥32,606 million (US$333 million), while operating income
fell 66.4% to ¥3,332 million (US$34 million).
Other income stood at ¥6,683 million (US$68 million). A
key positive factor was the amortization of negative goodwill of¥4,361 million (US$45 million), while a major negative factor
was loss on write-down of investment securities of ¥1,320
million (US$13 million) and impairment losses of ¥1,596 million(US$16 million).
As a result, income before income taxes and minority
interests was ¥6,940 million (US$71 million), down 48.1% year
on year. Net income of ¥3,391 million (US$35 million) wasrecorded, a decrease of 43.7% from the previous fiscal year.
Net income per share was ¥17.03 (US$0.17), and return on
equity was 1.2%. Annual cash dividends per share were maintainedat ¥11.00 (US$0.11), the same as in the previous term.

previous year.
Total current assets decreased 10.9% to ¥150,140 million(US$1,532 million). Total fixed assets dipped to ¥289,231
million (US$2,951 million).
Total current liabilities fell 10.8% to ¥82,996 million(US$847 million) primarily due to decreases in trade payables,
accrued expenses and short-term borrowings.
Long-term liabilities dropped 8.5% to ¥64,811 million(US$661 million) as a result of a decrease in long-term debt anddeferred tax liabilities.
Net assets rose 0.4% to ¥284,033 million (US$2,898
million). Major factors included an increase in retained earnings
derived from the posting of net income. The shareholders’ equity
ratio rose 2.0 percentage point to 64.9%.

Cash FlowsNet cash provided by operating activities decreased ¥5,873
million (US$60 million) to ¥13,699 million (US$140 million)
primarily due to a decline in income before income taxes andminority interests.
Net cash used in investing activities increased ¥6,690 million(US$68 million) to ¥20,384 million (US$208 million) primarily
owing to payment arising from business acquisition.
Net cash used in financing activities increased ¥805 million(US$8 million) to ¥3,559 million (US$36 million). This result
reflected a decline in the repayment of long-term debt.
Consequently, cash and cash equivalents at the end of year
decreased ¥10,259 million (US$105 million) to ¥35,625 million(US$364 million).

Financial Position
Total assets at the end of the fiscal year under review were¥439,371 million (US$4,483 million), down 4.0% versus the

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
2004

10

2005

2006

2007

2008

2009

60

40

20

0
2004

2005

2006

2007

Operating income to operating revenue

Net (loss) income to total assets

Net (loss) income to operating revenue

Return on equity ratio

2008

2009

2004

2005

2006

2007

2008

2009

SEINO HOLDINGS CO., LTD. and Consolidated Subsidiaries

Six-year Summary
For the Years Ended March 31, 2009, 2008, 2007, 2006, 2005 and 2004

Millions of Yen
2009
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*

¥

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¥

2004

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

417,705
300,645
97,155—
5,483
14,422375,40332,6073,333
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

29,637
12,665
13,439150,140
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
17,974283,352

183,933
494,743
112,668
31,17018,341
272,694* For details regarding net assets for the fiscal years ended
March 31, 2007, 2008 and 2009, see (b) on page 17.

Yen
Per share data:
Net (loss) income:-Basic-Diluted
Cash dividends¥

Number of shares issued

17.03
—
11.00

¥

207,679

30.27
—
11.00

¥

44.71
—
11.00

¥

(43.35)—
11.00¥

Thousands
207,679
207,679

207,679

72.26
70.67
11.00

¥

76.11
63.33
11.00

198,631

198,631

2.8
3.4
3.0
5.1
60.2
179.9
53.1
15.1

3.0
3.2
2.7
5.3
55.1
163.3
68.4
14.2

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

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

2.4
2.0
1.9
3.1
61.2
171.5
61.2
24.5

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

Debt equity ratio

Payout ratio

(%)

(%)

(%)

200

120

70

Current ratio

60
50

160
90

40
30

120

20

60

10

80

0
30
-10

40

-20
0

0
2004

2005

2006

2007

2008

2009

-30
2004

2005

2006

2007

2008

2009

2004

2005

2006

2007

2008

2009

11

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Balance Sheets
March 31, 2009 and 2008

Millions of yen
2009
Assets:Current assets:
Cash and cash equivalents
Short-term investments (Notes 3 and 5)
Trade receivables
Inventories
Deferred tax assets (Note 10)
Other current assets
Allowance for doubtful accounts
Total current assets¥

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

2008¥

Thousands of
U.S. dollars(Note 1)
2009

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

363,531
67,051
849,837
79,857
37,663140,235(6,133)
1,532,041

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

464,505(217,715)
246,790452,055(211,611)
240,4444,739,847(2,221,582)
2,518,265

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

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

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

187,765
33,684
108,592
103,041
433,082$ 4,483,388

2,465
649
61,705
12,481
4,870
10,874
93,044$Current liabilities:
Short-term borrowings (Note 5)
Current portion of long-term debt (Note 5)
Trade payables
Accrued expenses
Income taxes payable
Other current liabilities (Note 10)
Total current liabilities¥¥

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

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

21,786
4,826
588,969
114,755
14,776
101,786
846,898989
49,369
1,504
5,827
6,933
190
147,808

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

10,092503,765
15,34759,45970,745
1,939
1,508,245

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

42,482
74,266
174,671(8,565)282,854
4,979
6,152
293,985
457,871433,490
757,816
1,794,612(87,612)2,898,306
13,39863,4392,975,143$ 4,483,388

Commitments and contingent liabilities (Notes 7 and 8)
Net Assets:
Shareholders’ equity (Note 9):
Common stock: 794,524,668 shares authorized and 207,679,783 shares issued
Capital surplus
Retained earnings
Less, treasury stock at cost: 8,610,129 shares in 2009 and 8,572,508 shares in 2008
Total shareholders’ equity
Accumulated gains from valuation and translation adjustments
Minority interests
Total net assets
Total liabilities and net assets
See accompanying Notes to Consolidated Financial Statements.
12

¥

¥

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Operations
For the Years Ended March 31, 2009, 2008 and 2007

2007

Thousands of
U.S. dollars(Note 1)
2009449,486$ 4,426,184

Millions of yen
2009
Operating revenue (Note 12)¥

Operating costs and expenses (Notes 6 and 12):
Operating costs
Selling, general and administrative expenses
Operating income
Other income (expenses):
Interest and dividend income
Interest expenses
Gain (loss) on sale or disposal of property and equipment
Gain on sale of investment securities
Equity in net income (loss) of affiliates
Amortization of negative goodwill
Impairment loss on fixed assets (Note 2 (l))
Loss on write-down of investment securities
Provision for severance indemnities for directors and statutory auditors (Note 2 (n))
Loss on liquidation or sale of subsidiaries and affiliates
Miscellaneous, net

433,766¥

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

4,059,449
332,725
4,392,174
34,010

775
(87)
(138)
2

825
(164)
(386)

1,612
3,608
6,941

831
(137)
546
896
17
4,357
(3,115)(1)(1,073)
(26)
1,163
3,458
13,383

2,516
971
3,487

5,951
742
6,693

—
—

¥

¥

410,579
31,474442,053
9,925

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

Income taxes:
Current
Deferred
Total income taxes

451,978

397,826
32,607
430,433
3,333—

Income before income taxes and minority interests

Minority interests in net income of subsidiaries
Net income

2008

63
3,391

¥

672
6,018

¥

—

7,908
(888)
(1,408)
21

(368)
4,181
(1,727)(1)

44,500(16,286)(13,479)

—
—

—
—

1,423
3,783
14,57916,44936,81770,827

5,912
(295)
5,617

25,674
9,908
35,582

165
8,797

¥

17.03
11.00

¥

30.27
11.00

$

643
34,602

U.S. dollars(Note 1)Yen
Per share:
Net income
Cash dividends

—

¥

44.71
11.00

$

0.17
0.11

See accompanying Notes to Consolidated Financial Statements.
13

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2009, 2008 and 2007
Accumulated gains from valuation andtranslation adjustments

Shareholders’ equity
Number ofshares ofcommonCommonstock issued
stock

CapitalsurplusRetainedearnings

Net unrealized
Foreign Total accumulated
gains fromgains onTotal
Landcurrency
andMinority
Treasury shareholders’ available-for- revaluation translation valuationtranslation
sale securities decrement adjustments adjustments interests
equitystock

Total net
assetsMillions of yen
Balance at March 31, 2006
207,679,783 ¥ 42,482 ¥ 73,353 ¥Net income for the year———
Treasury stock reissued under stockfor-stock exchange offerings (Note
2 (a-ii))——
229
Cash dividends———
Bonuses to directors and statutory
auditors———
Fractional shares acquired, net———
Net changes other than shareholders’equity———Balance at March 31, 2007
207,679,783 ¥ 42,482 ¥ 73,582 ¥Net income for the year———
Cash dividends———
Decrease in retained earnings
through inclusion 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 other than shareholders’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 other than shareholders’equity———Balance at March 31, 2009
207,679,783 ¥ 42,482 ¥ 74,266 ¥

164,490 ¥ (10,572) ¥ 269,753 ¥ 9,860 ¥
8,797
—
8,797
—

(295) ¥—

(402) ¥ 9,163 ¥ 5,528 ¥ 284,444
—
—
—
8,797

—
(2,151)

1,105
—

1,334
(2,151)

—
—

—
—

—
—

—
—

—
—

1,334
(2,151)

(102)
—

—
(90)

(102)
(90)

—
—

—
—

—
—

—
—

—
—

(102)
(90)

—
—
—
(376)
171,034 ¥ (9,557) ¥ 277,541 ¥ 9,484 ¥
6,018
—
6,018
—
(2,161)—(2,161)—(23)(318) ¥
—
—

46
(353)
969
616
(356) ¥ 8,810 ¥ 6,497 ¥ 292,848
—
—
—
6,018
—
—
—
(2,161)

(207)

—

(207)

—

—

—

—

—

(207)

(13)

—

(13)

—

—

—

—

—

(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 ¥—(305) ¥

(262) (3,666)
65(3,601)(533) ¥ 1,313 ¥ 6,217 ¥ 291,564

Thousands of U.S. dollars
Balance at March 31, 2008
Net income for the year
Cash dividends
Fractional shares acquired, net
Net changes other than shareholders’equityBalance at March 31, 2009

$433,490 $757,816 $ 1,782,357 $ (87,398) $ 2,886,265 $ 56,684 $ (3,112) $——34,602—
34,602————(22,347)—(22,347)
—
—
—
—
—
(214)
(214)
—
—

—
—
—
—
— (34,735)—(2,673) (37,408)
663(36,745)$433,490 $757,816 $1,794,612 $ (87,612) $2,898,306 $ 21,949 $ (3,112) $ (5,439) $ 13,398 $ 63,439 $2,975,143

See accompanying Notes to Consolidated Financial Statements.
14(2,766) $ 50,806 $ 62,776 $ 2,999,847———
34,602———(22,347)
—
—
—
(214)

Seino Holdings Co., Ltd. and Subsidiaries

Consolidated Statements of Cash Flows
For the Years Ended March 31, 2009, 2008 and 2007

2007

Thousands of
U.S. dollars(Note 1)
2009

14,579$Millions of yen
2009
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 (reversal) provision for employee retirement benefit liability
Gain (loss) on sale or disposal of property and equipment
Equity in net (income) loss of affiliates
Loss on write-down of investment securities
Gain on sale of investment securities
Net provision (reversal) for accrued severance indemnities for directors
and statutory auditors
Decrease (increase) in trade receivables(Increase) decrease in inventories(Decrease) increase in trade payables
Decrease (increase) in beneficial interest in trusts in relation to trade payables
Other, net
Sub-totalInterest and dividend received
Interest paid
Income taxes paid
Net cash provided by operating activities¥

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

¥

6,941

2008
¥

13,383¥70,827

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

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

16,253
1,727(4,181)
3
1,442
386
368
1
—

176,796
16,286(44,500)
4,582(1,265)
1,408—
13,479
(21)

(183)
5,496
(937)
(6,626)
1,317(2,758)19,593797(88)(6,603)
13,699961
1,565(1,373)(4,675)(51)688
24,863852(138)(6,005)
19,572(33)(3,432)
1,976
6,193(11,714)(297)
23,271824(169)(6,406)
17,520(1,867)56,081(9,561)(67,612)
13,439(28,143)
199,929
8,133(898)(67,378)
139,786(23,260)
(635)
1,197
2,313
(20,385)(19,066)
(644)
3,516
2,500
(13,694)(16,310)(3,768)
1,448
1,877(16,753)(237,347)(6,479)12,21423,602(208,010)

—
(653)
(680)
(2,190)(16)(21)—(3,560)(12)(10,258)
45,884—(1,473)(1,237)(2,162)
(41)
2,158
—
(2,755)8
3,131
42,753

1(8,689)(3,755)(2,151)(7)(86)
8(14,679)8(13,904)
55,226—(6,663)(6,939)(22,347)
(163)
(215)
—
(36,327)(122)(104,673)
468,204—
35,626¥—45,884¥

1,431
42,753$—
363,531

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 Instrument and Exchange
Law of Japan and its related accounting regulations and in conformity withaccounting principles generally accepted in Japan (“Japanese GAAP”),
which are different in certain respects as to application and disclosure
requirements from International Financial Reporting Standards.
The accounts of the Company’s overseas subsidiaries are based on
their accounting 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 Instrument and Exchange Law of Japan. Certain
supplementary information included in the statutory Japanese language
consolidated financial statements, but not required for fair presentation, is
not presented in the accompanying consolidated financial statements.
Certain comparative figures have been reclassified to conform to thecurrent year’s presentation.
The translation of the Japanese yen amounts into U.S. dollars is
included solely for the convenience of readers outside Japan, using theprevailing approximate exchange rate at March 31, 2009, which was ¥98 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(a-i) Principles of consolidation
The accompanying consolidated financial statements include theaccounts of the Company and all of its subsidiaries. Investments insignificant affiliates are accounted for by the equity method. Investments
in affiliates not accounted for by the equity method are stated at cost.
Differences between the acquisition cost of investments in subsidiaries andthe underlying equity in their net assets are adjusted based on the fair value
at the time of the acquisition, deferred as goodwill or negative goodwill
and amortized over five years on a straight-line basis. All intercompany
transactions and accounts have been eliminated.
Under accounting standards for consolidation, a subsidiary is defined
as an enterprise which is controlled by another enterprise and is a majority(more than 50%) owned enterprise or a 40% to 50% owned enterprise thatmeets certain criteria. In addition, an affiliated company is defined as anenterprise in which the investor has significant influence and is an enterprise
other than a subsidiary that is a 20% or more owned enterprise or 15% toless than 20% owned enterprise that meets certain criteria. For the years
ended March 31, 2009, 2008 and 2007, the number of the companies thatwere not more than 50% owned enterprises, but were nevertheless classified
as subsidiaries based on the judgment of the Company in accordance withthe accounting standards was two, two and five, respectively.
The number of subsidiaries and affiliates for the years ended March 31,
2009, 2008 and 2007 was as follows:
Subsidiaries:
Domestic
Overseas
Affiliates accounted for by the equity method
Affiliates stated at cost

2009

2008

2007

50
2
3
12

47
2
3
11

46
4
2
8

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

(a-ii) Stock-for-stock exchange agreements with the subsidiaries
On October 1, 2006, the Company exercised a stock-for-stock
exchange transaction with an affiliate, Hokkaido Seino Transportation Co.,
Ltd. (“Hokkaido Seino”), in order to increase the Company’s equity sharein the affiliate from 39.05% to 100%. This reorganization is expected tostrengthen the integration of the Seino Group, improve efficiency, andenable the group to adapt to the change in the business environment withgreater mobility and flexibility. On October 1, 2006, the Company reissued
438,840 shares of the Company’s treasury stock to the shareholders of
the affiliate at the exchange rate of 0.24 shares of the Company’s treasury
16

stock for one share of common stock of the affiliate. As a result of thistransaction, negative goodwill of ¥147 million was recorded as the excessof the underlying equity in the fair value of the acquired net assets over theacquisition cost of ¥533 million.
The assets acquired and liabilities assumed of Hokkaido Seino as of
October 1, 2006 were as follows:
Millions of yen
Assets:Current assets
Non-current assets
Total assets
Liabilities:
Current liabilities
Non-current liabilities
Total liabilities

¥
¥
¥
¥

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

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

Millions of yen
¥
2,576
(116)
(75)

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

(a-iii) Acquisition for the current fiscal year
During the year ended March 31, 2009, the Seino Group acquired
common shares of Seino Logistics Co., Ltd. (“Seino Logistics”), and Seino
Logistics became a subsidiary of the Company effective July 1, 2008. The
assets and the liabilities of Seino Logistics as of the initial consolidation by
the Company were as follows.
Thousands of
U.S. dollars

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

¥

¥
¥

39
2
10
51

$

$

398
20
102
520

41

$

418

$

418

̶
¥

41

̶

During the year ended March 31, 2009, the Seino Group acquired
common shares of Shiga Hino Motor Co., Ltd. (“Shiga Hino”), and 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.
Thousands of
U.S. dollars

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

¥

¥
¥
¥

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

$

$
$
$

Liabilities:
Current liabilities
Non-current liabilities
Total liabilities(a-iv) Acquisitions for the years 2007 and 2008¥¥

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

¥

73
63
74
210
58
152
210

(c)

Current assets¥
Non-current assets
Current liabilities
Non-current liabilities
Goodwill
Minority interests
Less, equity interests previously
held by the Company
Additional acquisition costs ¥

1,463
10

¥

(d) 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.

(e)* Showa Seino changed its company name to Kyusyu Seino Transportation
Co., Ltd. (“Kyusyu Seino”) on March 1, 2008.

(a-v) Business Transfer for the current fiscal year

Thousands of
U.S. dollars

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

¥

¥

—
3,887
2,039
5,926

$

$

—
39,66320,80660,469Investments and marketable securities
The Seino Group classifies certain investments in debt and equity
securities as “held-to-maturity,” “trading” or “available-for-sale,” whoseclassification 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 componentof net assets, net of applicable income taxes. Gains and losses on thedisposition of available-for-sale securities are computed based on themoving-average method. Nonmarketable securities without available
market quotations for available-for-sale securities are carried at cost
determined by the moving-average method. Adjustments in carrying valuesof individual securities are charged to income through write-downs, when adecline in value is deemed other than temporary.

(382)
179

Pursuant to the resolution by the Board of Directors of the Company
on February 13, 2008, on April 1, 2008, Kyushu Seino succeeded to a partof the transportation business of Sengoku Seino Transportation Co., Ltd.,acquiring the vehicles and operational assets and assuming the liabilities
such as employee retirement benefit liability. In addition, Kyusyu Seino
also acquired land and buildings from Iwasaki Corporation Co., Ltd. andShiratsuyu Company, Ltd. on April 1, 2008. This business transfer is
expected to strengthen the integration of the Seino Group and 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($54,704 thousand), and goodwill ¥2,039 million ($20,806 thousand) wererecorded in the year ended March 31, 2009. The assets and the liabilities ofthis business transfer were as follows.

Accounting standard for statement of changes in net assets
Effective from the year ended March 31, 2007, the Seino Group
adopted the accounting standard, “Accounting Standard for Statement of
Changes in Net Assets” (ASBJ Statement No. 6), and the implementation
guidance for the accounting standard for statement of changes in net assets(ASBJ Guidance No. 9), and prepared the accompanying consolidated
statements of changes in net assets for the years ended March 31, 2009 and2008 in accordance with these standards. The accompanying consolidated
statement of changes in net assets for the year ended March 31, 2006,
which was voluntarily prepared for inclusion in the consolidated financial
statements, has not been adapted to the new presentation rules.

For the year ended March 31, 2007, the Company acquired an
additional equity share of Shikoku Seino Transportation Co., Ltd. (“Shikoku
Seino”), which was previously an affiliate accounted for by the equity
method, and Shikoku Seino became a subsidiary. The assets and liabilitiesof Shikoku Seino as of the initial consolidation were as follows.
Showa
Hinomaru
Seino
Seino
Millions of yen
1,977
¥
1,238
3,528
3,275
(2,193)(1,319)(5,152)(2,168)
387
33
—
(498)

$

—
6,061
6,061

(b) Accounting standard for presentation of net assets inbalance sheet

Millions of yen¥$

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

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

¥

—
594
594

(a-vi) Accounting standard for business combinations

19,92815,235
3,990
39,15329,7962,194
31,990¥(f)

Accounting for derivatives
At March 31, 2009 and 2008, the Seino Group did not hold or had notissued any derivative transactions.

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

(h) Inventories
Inventories for merchandise, products, raw materials and supplies are
principally stated at the lower of moving-average cost or net realizablevalue, and inventories for vehicles and work-in-process are principallystated at the lower of the specific identification cost or net realizable value
at March 31, 2009.
Prior to April 1, 2008, inventories for supplies are principally stated17

statement by reducing the carrying amount of impaired asset or group ofassets to the recoverable amount to be measured as the higher of the asset’s
net selling price or value in use. Fixed assets include land, buildings
and other forms of property, as well as intangible assets, and are to begrouped 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 cashgenerating units, such as operating business branches, other than idle orunused property. At March 31, 2009, 2008 and 2007, recoverable amountsof assets were measured based on value in use calculated using discounted
future cash flows at interest rates principally of 5.3%, 4.7% and 5.4%,
respectively, or net selling prices primarily using appraisal valuations. As
a result, the Seino Group recognized impairment loss for the property of 27
business branches and 4 idle properties for the year ended March 31, 2009,
for the property of 48 business branches, 6 idle properties and goodwill
for the year ended March 31, 2008 and for the property of 38 businessbranches, 4 idle properties and goodwill for the year ended March 31, 2007
as follows:at moving-average cost, and inventories for vehicles and work-in-process
are principally stated at cost determined by the specific identification
method. Effective the year ended March 31, 2009, the Company has applied“Accounting Standard for Measurement of Inventories” (ASBJ Statement
No. 9) 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 decreased by ¥80 million ($816
thousand), respectively.

(i)

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 principally
depreciated 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 the straight-line method. Some of the subsidiaries capitalize
property the cost of which is not less than ¥100,000 and below ¥200,000
and depreciate it over three years on a straight-line basis.
The leased property of a certain subsidiary engaged in leasing
operations as lessor is recorded at cost as property held for leases. The
property was included in property and equipment in the accompanying
consolidated balance sheets and is depreciated over the lease contract termsby the straight-line method to the amount equal to the estimated disposal
value at the lease termination date. Expenditure on maintenance andrepairs is charged to operating income as incurred. Upon the disposal of
the property, the cost and accumulated depreciation are removed from theaccounts and any gain or loss 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 to the method pursuant to theamended Corporation Tax Law of Japan. As a result, as compared with theprevious accounting method, operating income and income before income
taxes and minority interests decreased by ¥432 million, respectively, for theyear ended March 31, 2008.
As for property and equipment acquired before April 1, 2007, theCompany and its domestic subsidiaries previously depreciated up to thedepreciable limit of 5% of the acquisition cost in accordance with the
Corporation Tax Law of Japan. Effective from the year ended March 31,
2008, the remaining residual value is depreciated over five years using thestraight-line method from the fiscal year following the year in which thedepreciable limit of 5% of the acquisition cost is reached, pursuant to theamended Corporation Tax Law of Japan. As a result, operating income
and income before income taxes and minority interests decreased by ¥693
million, respectively, for the year ended March 31, 2008, as compared withthe previous accounting method.

(j)

LeasesMillions of yen

Buildings and structures ¥Land
Other property
Goodwill¥

Accounting standard for impairment of fixed assets
The Company and its domestic subsidiaries have adopted the"Accounting Standard for Impairment of Fixed Assets" issued by BACJ
and the related practical guidance issued by ASBJ. The standard requiresthat fixed assets be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not
be recoverable. An impairment loss shall be recognized in the income

18

2008

2007

218 ¥
1,368
10
—
1,596 ¥

574 ¥
2,443
3
95
3,115 ¥

90 $ 2,225
1,227
13,95923102
387—
1,727 $ 16,286(m) Employee retirement benefits
Employees who terminate their service with the Seino Group areentitled to retirement benefits generally determined by reference to current
basic rates of pay, 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 theactuarial present value of projected benefit obligation using the actuarial
appraisal approach and the fair value of pension plan assets available forbenefits at the fiscal year-end. Unrecognized actuarial differences fromchanges in the projected benefit obligation or the value pension plan assets
resulting from the experience different from that assumed and from changes
in assumptions are amortized on a straight-line basis over principally ten
years, a period within average remaining service years of employees fromthe following year in which they arise. Unrecognized prior service cost isamortized using the straight-line method over principally ten years, a period
within the average remaining service years of employees from the year inwhich it occurs.

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

(k) Intangible assets

(l)

2009

Accumulated impairment losses have been directly deducted from theapplicable assets.

Prior to April 1, 2008, the Company and consolidated domestic
subsidiaries accounted for finance leases which do not transfer ownershipof the leased property to the lessee as operating leases with disclosureof certain “as if capitalized” information in the notes to the consolidated
financial statements.
On March 31, 2007, ASBJ issued Statement No. 13, “AccountingStandard for Lease Transactions” and Guidance No. 16, “Guidance on
Accounting Standard for Lease Transactions”. The new accounting
standards require that all finance lease transactions be treated as capitalleases.
Effective April 1, 2008, the Company and consolidated domestic
subsidiaries adopted the new accounting standards for finance leases
commencing after March 31, 2008 and capitalized assets used under suchleases, 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 have been accounted for as operatingleases, continue to be accounted for as operating leases with disclosure ofcertain “as if capitalized” information.
The effects of adopting the new standards on the consolidated balance
sheet as of March 31, 2009 were not material.
Intangible assets are amortized on a straight-line basis. Software,
which is included in intangible assets, is amortized using the straight-line
method over the estimated useful life of five years.

Thousands of
U.S. dollars
2009

(o)

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 ofexisting assets and liabilities and their respective tax bases and operating
loss carryforwards. Deferred tax assets and liabilities are measured using
the enacted tax rates expected to apply to taxable income in the years inwhich 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expense in the accounting period in which such bonuses are accrued. Until
the year ended March 31, 2006, bonuses to directors and statutory auditors
were recorded as part of the appropriation of retained earnings in the fiscal
year when a proposed appropriation of retained earnings for directors’
bonuses was approved by the Board of Directors and/or shareholders.
Because the Seino Group has accrued such bonuses, operating income
and income before income taxes and minority interests decreased by ¥111
million, respectively, for the year ended March 31, 2007, as compared withthe previous accounting method.

recognized in the period that includes the enactment date.

(p) 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.

(q) Revenue recognition for installment sale commissions
Effective from the year ended March 31, 2007, the Seino Groupchanged the accounting method for income classification to record
installment sale commissions in the income statement from other income tooperating revenue. This change resulted from the increase in the importanceof such commission income under recent business developments of the
Seino Group and for comparative purposes for information of competitors.
As a result, as compared with the previous accounting method, operating
income increased by ¥1,044 million, although there was no effect on income
before income taxes and minority interests for the year ended March 31,
2007.

(r)

Revenue recognition for vehicle sales
Effective April 1, 2006, the Seino Group changed the accounting
method for the recognition of vehicle sales. From the year ended March
31, 2007, the Seino Group recognizes vehicle sales when a vehicle isregistered rather than when a vehicle is delivered to the customers, thepractice under the previous accounting method. This accounting change
was made for comparative purposes for information of competitors andfor the improvement in the accounting treatments under the businessreorganization of the Seino Group. As a result, as compared with theprevious accounting method, operating revenue increased by ¥854
million, and operating income and income before income taxes andminority interests increased by ¥110 million, respectively, for the year
ended March 31, 2007.

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

(t)

Accounting standard for directors’ bonus
From the year ended March 31, 2007, the Seino Group adopted the“Accounting Standard for Directors’ Bonus (ASBJ Statement No. 4)” issued
by ASBJ on November 29, 2005. The standard requires that the directors’
bonuses, including those for statutory auditors, shall be accounted for as(u) Appropriation of retained earnings
Cash dividends are recorded in the fiscal year during which a proposed
appropriation of retained earnings is approved by the Board of Directors
and/or shareholders. See Note 2(t) for the accounting for bonuses todirectors and statutory auditors.

(v)

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 the current earnings.
In respect of the financial statement items of overseas subsidiaries,
all asset, liability, income and expense accounts are translated into yen by
applying the exchange rates in effect at the fiscal year-end. Translationdifferences, after allocating to portions attributable to minority interests, arereported as foreign currency translation adjustments in a component of net
assets on the accompanying consolidated balance sheets.

(w) Per share data
Basic net income (loss) per share is computed by dividing income (loss)
available to common shareholders by the weighted-average number ofshares of common stock outstanding during the respective year. Diluted net
income per share is computed as if warrants or stock options were exercisedat 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 under 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, 2009, 2008 and2007.
Cash dividends per share shown for each fiscal year in theaccompanying consolidated statements of operations represent dividends
declared as applicable to the respective years.

3. Investments
Carrying
value

At March 31, 2009 and 2008, short-term investments consisted of thefollowing:
Millions of yen

2009Marketable securities:¥
Bonds
Total marketable securities
Other nonmarketable securities
Time deposits with an original
maturity of more than three months
¥

472
472
—
6,099
6,571

Thousands of
U.S. dollars

2009

2008
¥

¥

1,252
1,252
—
7,163
8,415

$

$

4,816
4,816
—
62,23567,051At March 31, 2009 and 2008, investment securities consisted of thefollowing:
Millions of yen

2009Marketable securities:
Equity securities¥ 13,092
Bonds
3,436
106
Other
Total marketable securities
16,634
1,767
Other nonmarketable securities¥ 18,401

2009¥ 19,918
4,214
168
24,3001,776¥ 26,076$ 133,592
35,061
1,082
169,735
18,030$ 187,765

At March 31, 2009 and 2008, the fair value of marketable securities
classified as held-to-maturity and the related net unrealized gains were as
follows:

Net unrealized
gains

Millions of yen
Bonds included in investment securities:
At March 31, 2009¥
At March 31, 2008
Bonds included in investment
securities:
At March 31, 2009

100 ¥
100 ¥
—
200
202
2
Thousands of U.S. dollars

$

1,020

$

1,020

$

—

Marketable securities classified as available-for-sale are stated at fairvalue with unrealized gains and losses excluded from the current earnings
and reported as a net amount within the net assets account until realized. At
March 31, 2009 and 2008, gross unrealized gains and losses for marketablesecurities classified as available-for-sale were as follows:

Thousands of
U.S. dollars

2008

Fair value

Cost

At March 31, 2009:
Equity securities
Bonds
Other
At March 31, 2008:
Equity securities
Bonds
Other

¥

Gross
Gross
unrealized unrealized
gains
lossesMillions of yen

8,353 ¥
3,818
129
¥ 12,300 ¥Fair andcarrying
value

5,029 ¥
12
3
5,044 ¥

(289) ¥ 13,093
(23)
3,807
(26)
106
(338) ¥ 17,006

9,566 ¥ 10,859 ¥
5,272
27
133
43
¥ 14,971 ¥ 10,929 ¥(507) ¥ 19,918
(33)
5,266
(8)
168
(548) ¥ 25,352¥

Thousands of U.S. dollars

At March 31, 2009:
Equity securities
Bonds
Other

$ 85,235 $ 51,316 $ (2,949) $ 133,602
38,959122(235)
38,846
1,316
31
(265)
1,082
$ 125,510 $ 51,469 $ (3,449) $ 173,530
19

Expected maturities of held-to-maturity and available-for-sale debt
securities at March 31, 2009 were as follows:
Thousands of
U.S. dollars

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

At March 31, 2009 and 2008, investments in and long-term loans toaffiliates consisted of the following:

1,470
2,047
1,000
400
4,917

$

$

15,00020,888
10,204
4,081
50,173Thousands of
U.S. dollars

Millions of yen

2009
Investments, accounted for by theequity method for significant
affiliates and at cost for others ¥Interest bearing long-term loans
¥

3,263
38
3,301

¥
¥

2008

2009

3,382
45
3,427

$ 33,296
388$ 33,684

4. Property and Equipment
At March 31, 2009 and 2008, property and equipment consisted of
the following:Thousands of
U.S. dollars

Millions of yen

2008
2009
2009
Property held for own use, at cost:Land¥ 136,668 ¥ 131,631 $ 1,394,571
Buildings and structures
205,671
2,160,816
211,760
Vehicles
88,69988,403902,071
Machinery and equipment
25,295
26,346
261,837
30
Construction in progress
5,827
571
729
757
7,725
Other
452,055
4,739,847
464,505
Less, accumulated depreciation (217,715) (211,611) (2,221,582)
Total property and equipment ¥ 246,790 ¥ 240,444 $ 2,518,265

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 portion, is recorded in
net assets as land revaluation decrement account in the accompanying
consolidated balance sheets. At March 31, 2009 and 2008, 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 ¥1,748 million ($17,837 thousand) and ¥1,595 million,
respectively.

5. Short-term Borrowings and Long-term Debt
At March 31, 2009 and 2008, short-term borrowings consisted of thefollowing:Thousands of
U.S. dollars

Millions of yen

2009
Unsecured bank overdrafts withinterest rates of 1.45% perannum at March 31, 2009¥
Short-term bank borrowings,
principally unsecured andrepresented by notes withinterest rates ranging from0.575% to 1.875% per annumat March 31, 2009
¥

2009

2008

2,110
2,135

¥

¥

55

2,440
2,465

$

$

255

21,531
21,786

Thousands of
U.S. dollars

Millions of yen

2009

Less, current portion
¥
20

402

2009

2008

¥

981
79
1,462
(473)
989 ¥

$

4,102

1,204
83
2,114
(649)
1,465 $

10,010806
14,918(4,826)
10,092

827

Thousands of
U.S. dollars

Millions of yen

2009
25

At March 31, 2009, the Company and certain subsidiaries had
unsecured overdraft agreements with 10 banks. Under such agreements, theCompany and these subsidiaries were entitled to withdraw up to ¥42,100
million ($429,592 thousand). The Company and the subsidiaries were notobligated to pay commitment fees on the unused portions of such overdraft
facilities.
At March 31, 2009 and 2008, long-term debt consisted of thefollowing:

Loans from banks, partly secured,
due through 2017, repayable on an
installment basis with interest rates
ranging from 0.943 % to 2.5% perannum at March 31, 2009¥
Loans from government agencies,
principally mortgage,
repayable on an installment
basis with interest rates
ranging from 0.43% to 3.6%
per annum at March 31, 2009
Other

At March 31, 2009 and 2008, the following assets were pledged ascollateral for certain short-term borrowings and long-term debt in theaggregate amount of ¥1,575 million ($16,071 thousand) and ¥1,968 million,
respectively:

Land¥
Buildings and structures
Time deposits included in shortterm investments

6,941
4,165

2009

2008
¥

7,804
4,615

11

11

$

70,82742,469112

The aggregate annual maturities of long-term debt as at March 31, 2009were as follows:Year ending March 31,
2010
2011
2012
2013
2014
Thereafter

Millions of yen
¥
473
335
197
172
120
165
¥
1,462

Thousands of
U.S. dollars
$
4,826
3,418
2,010
1,755
1,225
1,684
$
14,918

6. Employee Retirement Benefits
The Company and its domestic subsidiaries have defined benefit plans.
The following table reconciles the benefit liability as of March 31, 2009 and2008:
Thousands of
U.S. dollars

Millions of yen

2009

2009

2008

(19,304)(698)

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

42.4%

$

(196,979)(7,122)

Reconciliation of benefit liability:
Projected benefit obligation¥ 53,719 ¥ 54,113 $ 548,153
Less, fair value of pension plan
(1,899)(932)(9,510)assets at end of year
52,21452,787
538,643
Less, unrecognized actuarial
differences (loss)(1,799)(2,087)(21,296)Less, unrecognized past
(1,721)(1,331)(13,582)
service cost
Net amounts of employee
retirement benefit
liability recorded on the
consolidated balance sheets¥ 49,369 ¥ 48,694 $ 503,765

The components of net periodic retirement benefit expenses for theyears ended March, 2009, 2008 and 2007 were as follows:

Notes: 1. Projected benefit obligation of certain subsidiaries was calculatedusing the simplified calculation method as permitted by theaccounting standard for employee retirement benefits.
2. Some of the Company’s subsidiaries participate in a certain
corporate pension plan under the multi-employer pension program
established by other employers, together with the subsidiaries.
As the information that the pension plan assets calculated basedon the proportionate contributions made by the subsidiaries
is not available, the Seino Group records the related required
contributions to the pension plan as net periodic retirement benefit
expense for the period in accordance with the amended accounting
standard for employee retirement benefits (ASBJ Statement
No. 14). The above table excluded the portion for the pension
plan assets under the multi-employer pension program. The
information for the funded status of the entire corporate pension
plan available at the latest calculation period-end was as follows:
Thousands of
U.S. dollars

Millions of yen
Pension plan assets at March 31,
2008

7.

Related benefit obligation under the
program¥
Plan surplus¥

18,606$

189,857

Millions of yen

Net periodic retirement
benefit expenses:
Service cost¥
Interest cost
Expected return on
pension plan assets
Amortizationof actuarial
differences
Amortization of past
service cost
Gain on abolishmentof retirement
benefit plan
Total retirement
benefit expenses ¥Thousands of
U.S. dollars
2009

2009

2008

2007

2,861 ¥
1,067

2,844 ¥
1,084

2,760 $ 29,194
1,033
10,888

(28)

(42)

(34)

(286)

529

553

494

5,398

326

294

335

3,326

(50)

—

—

(510)

4,705 ¥

4,733 ¥

4,588 $ 48,010

Major assumptions used in the calculation of the above information forthe years ended March 31, 2009, 2008 and 2007 were as follows:
2009

2008

2007

Method attributing the projected Straight- Straight-line Straight-line
benefits to periods of services line method
methodmethodDiscount rate
2.0%
2.0%
2.0%
Expected rate of return on
pension plan assets
2.0%
2.0%
2.0%
Amortization of past service principally principally principallycost
10 years
10 years
10 years
Amortization of actuarial
principally principally principally
differences
10 years
10 years
10 yearsContingent Liabilities
At March 31, 2009 and 2008, the Seino Group was contingently
liable for trade notes endorsed to affiliates and third parties, and forguarantees, including substantial guarantees, principally of indebtednessof affiliates and third parties in the aggregate amounts of ¥1,671 million($17,051 thousand) and ¥2,462 million, respectively.

8. Lease Commitments
The Seino Group has entered into various rental and lease agreements
non-cancelable lease agreements for computer equipment and radio
facilities with two-to-nine year contract terms as lessee. As disclosed Note
2 (j), these finance leases which commenced prior to April 1, 2008 havebeen accounted for as operating leases. The aggregate minimum future lease
payments for such non-cancelable finance lease agreements, including theimputed interest portion, as at March 31, 2009 and 2008 were as follows:
Millions of yen

2009
Finance leases:
Due within one year
Due after one year

¥
¥

393
406
799

Thousands of
U.S. dollars

2009

2008
¥
¥

525
666
1,191

$
$

4,010
4,143
8,153

In addition, The Seino Group has entered into various rental andlease agreements 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,
2009 and 2008 were as follows.

Thousands of
U.S. dollars

Millions of yen

2009
Operating Leases:
Due within one year
Due after one year

¥
¥

275
1,053
1,328

2009

2008
¥

—
—
—

¥

$

2,806
10,745$ 13,551

A certain consolidated subsidiary engaged in leasing operations, as
lesser, entered into various lease agreements principally for vehicles withthird parties. The leases were categorized as financing leases and operatingleases. At March 31, 2009 and 2008, the aggregate future minimum leasecommitments to be received for such non-cancelable lease agreements,
including the imputed interest, were as follows:
Thousands of
U.S. dollars

Millions of yen

2009
Finance leases:
Due within one year
Due after one year¥¥

Operating Leases:
Due within one year
Due after one year

¥
¥

2009

2008

103
114
217

¥

71
200
271

¥

¥

¥

164
221
385

$

—
—
—

$

$

$

1,051
1,163
2,214
724
2,041
2,765
21

9. Net Assets(a)

The Japanese Corporate Law (“the Law”) became effective on May 1, 2006,
replacing the former Japanese Commercial Code. The Law is generally
applicable to events and transactions occurring after April 30, 2006 and 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,if any, of 25% of common stock over the total of additional paid-in capitaland legal earnings reserve must be set aside as additional paid-in capitalor legal earnings reserve. Legal earnings reserve is included in retained
earnings in the accompanying consolidated balance sheets.
Under the Law, legal earnings reserve and additional paid-in capital
could be used to eliminate or reduce a deficit by a resolution of theshareholders' meeting. Additional paid-in capital and legal earnings reserve
may not be distributed as dividends. All additional paid-in capital andall legal earnings reserve may be transferred to other capital surplus andretained earnings, respectively, which are potentially available for dividends.
At March 31, 2009 and 2008, respectively, capital surplus principallyconsisted of additional paid-in capital. In addition, retained earnings
included legal earnings reserve of the Company in the amount of ¥4,262
million ($43,490 thousand) at March 31, 2009 and 2008, respectively.
The maximum amount that the Company can distribute as dividends

(b)

(c)

is calculated based on the non consolidated financial statements of theCompany in accordance with Japanese laws and regulations.
On July 1, 2005, Seino implemented a rights plan using stock acquisitionrights and a trust mechanism (”trust-type rights plan”) as a means ofdealing with the acquisition of the Company’s common stock resulting in aparticular shareholder holding more than 20% of the Company’s common
stock and proposals of acquisition without the prior approval of the Boardof Directors, and issued stock acquisition rights to The Sumitomo Trust &Banking Co., Ltd. at no charge as part of the plan based on the approval ofshareholders at the annual general meeting of shareholders in June 2005.
Up to 397,262,334 shares of common stock was to be issuable at a certain
price for the exercise of these stock acquisition rights for the period from
July 1, 2005 to June 30, 2008.
With the implementation of measures related to the large-scaleacquisition of the company stock (Takeover Defense Measure) based on theapproval of shareholders at the annual general meeting of shareholders heldon June 26, 2008, this trust-type rights plan was abolished, and all stockacquisition rights issued as part of the trust-type rights plan was acquiredand eliminated by the company at no cost.
At the annual shareholders’ meeting held on June 25, 2009, theshareholders approved cash dividends of ¥11 per share, amounting to¥2,194 million ($22,388 thousand). The appropriations have not been
accrued in the consolidated financial statements as of March 31, 2009 as
such appropriations are recognized in the period in which they are approvedby the shareholders.

10. Income Taxes
The tax effects on temporary differences that give rise to a significant
portion of deferred tax assets and liabilities at March 31, 2009 and 2008
were as follows:
Millions of yen

2009

2008

Thousands of
U.S. dollars

2009

Deferred tax assets:
Employee retirement benefit liability ¥ 20,517 ¥ 20,243 $ 209,357
Enterprise tax accruals
337
92
939
Accrued bonuses
3,633
3,117
31,806
Intercompany capital gains
978998
10,184
Operating loss carryforwards
1,388
1,830
18,673
Loss on assets transferred
1,049
1,690
17,245
Impairment loss on fixed assets
10,968
10,922
111,449
Allowance for doubtful accounts
164
202
2,061
4,165
5,036
51,388Other
42,92544,404453,102(16,992)(19,732)(201,347)
Less, valuation allowance
25,933
24,672
251,755
Deferred tax liabilities:
Deferred capital gains
6,443
6,343
64,725
Unrealized gains on availablefor-sale securities
4,107
1,906
19,449Valuation adjustments for consolidation
8,140
7,832
79,918
85
867
Other
—
18,69016,166
164,959¥ 8,506 ¥ 7,243 $ 86,796
Net deferred tax assets
At March 31, 2009 and 2008, deferred tax assets and liabilities wererecorded as follows:

Millions of yen

2009
Deferred tax assets:
Current
Non-current
Deferred tax liabilities:
Current
Non-current

¥

3,691
10,642—
5,827¥

Thousands of
U.S. dollars

2008

2009

4,435
10,446$ 37,663
1 08,592

2
7,636

—
59,459In assessing the realizability of deferred tax assets, management of
the Seino Group considers whether some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets
is dependent upon the generation of the future taxable income during
the periods in which those temporary differences become deductible. At
March 31, 2009 and 2008, a valuation allowance was provided to reducethe deferred tax assets to the extent that the management believed that theamount of the deferred tax assets was not realizable.
A reconciliation of the differences between the Japanese statutory
effective tax rate and the actual effective income tax rate on pretax income
reflected in the accompanying consolidated statements of operations for theyear ended March 31, 2009 was as follows:
Percentage of pretax income

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

2009
40.4%

2008
40.4%

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

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

Reconciliation for the year ended March 31, 2007 was not disclosed
because the difference was not material.

11. Subsequent Event
Pursuant to the resolution by the Board of Directors of the Company
on April 20, 2009, the Company executed a sales and purchase agreementwith Seibu Railway Co., Ltd. and Seibu Construction Co., Ltd., both are
subsidiaries of SEIBU HOLDINGS INC., whereby the Company acquired
9,161,820 shares of Seibu Transportation Co., Ltd. (“Seibu Transportation”),
and Seibu Transportation became a 90.0% owned subsidiary of theCompany effective April 24, 2009. The consideration for this transaction
22

amounted to ¥563 million ($5,745 thousand). This acquisition is expected
to improve the quality of transportation. With the synergistic effects of thecooperative operations of the Company and Seibu Transportation to include
improved efficiency of arterial networks, integration and relocation of
overlapping bases, and entrustment of collection and delivery services toeach other, which are complementary to each other with respect to regions
and businesses, the companies will seek to further expand their operations.

12. 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, 2009, 2008 and 2007 was summarized as follows:
Transportation

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

Identifiable assets¥
Depreciation
Impairment loss on fixed assets
Capital expenditures

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

Merchandise
sales

Leasing for realestate services

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) ¥
(256)
—
(385)

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

Transportation

Leasing for realestate services

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¥¥

19,450 ¥
262
—
420
Other

Total

Elimination

Consolidated

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

451,978 ¥48,463501,764
491,449
10,315 ¥— ¥(49,786)(49,786)(49,396)(390) ¥

451,978—
451,978442,053
9,925

Identifiable assets¥
Depreciation
Impairment loss on fixed assets
Capital expenditures

338,843 ¥
15,2692,713
17,92385,364
1,690
386
1,915

¥

9,623 ¥
45——

29,830 ¥
268
16
277

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

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

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

327,574 ¥
1,705
329,279
323,724
5,555 ¥

85,54910,18095,72992,6083,121¥

1,079 ¥
—
1,079
174
905 ¥

35,284 ¥36,57871,862
70,574
1,288 ¥

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

449,486—
449,486
438,690
10,796

Identifiable assets¥
Depreciation
Impairment loss on fixed assets
Capital expenditures

338,669 ¥
14,555
1,619
14,435

86,114
1,601
97
1,675

9,260 ¥
49——

27,385 ¥
304
11
171

461,428 ¥
16,5091,727
16,281

6,578 ¥
(256)
—
(255)

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

Transportation
services

For the year 2009:
Operating revenue:
External customers$
Inter-segment sales
Total operating revenue
Operating costs and expenses$
Operating income

Vehicle sales¥¥

Merchandise
sales

Leasing for realestate services

3,227,969 $
18,4393,246,408
3,252,071(5,663) $803,286 $
85,867889,153
867,316
21,837 $237,776
262,877
500,653494,592
6,061

Identifiable assets$ 3,392,786 $Depreciation
162,919
Impairment loss on fixed assets
11,184
252,041
Capital expenditures

876,041 $
17,265
3,143
24,133

111,776 $
612
—
3,918

Notes:

Other

Total

Thousands of U.S. dollars$
12,112 $145,041 $ 4,426,184 $—
145,031512,214
12,112290,072
4,938,398
2,082
283,398
4,899,459$
10,030 $6,674 $
38,939 $104,857 $
612
1,959
4,255

198,469 $ 4,683,929 $
2,674
184,082—
16,286
4,286
288,633

Elimination

Consolidated— $ 4,426,184(512,214)—(512,214)
4,426,184(507,285)
4,392,174(4,929) $34,010(200,541) $ 4,483,388(2,704)
181,378—
16,286(3,929)284,704

1. Identifiable assets in the elimination column represent unallocated general corporate items which are not assigned to a particular industry segment such as cash
and short-term and long-term investment securities, net of inter-segment balances.
2. Accounting changes:(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,“Merchandise sales” segment, which was included in “Other” segment, was separately shown, as operating revenue of its business segment exceeded 10% of total consolidated operating revenue before elimination. If theprevious reportable business segment composition was applied, operating revenue and operating income of “Other” segment increased by ¥47,998 million ($489,776 thousand) and ¥579 million ($5,908 thousand), respectively
for the year ended March 31, 2009

(Accounting standard for measurement of inventories)
As disclosed in Note 2(h), from the year ended March 31, 2009, the Company changed the measurement of inventories. As a result, as compared with the previous accounting method, operating income of “Vehicle sales”
segment and “Other” segment for the year ended March 31, 2009 decreased by ¥72 million ($735 thousand) and ¥8 million ($82 thousand), respectively.

(Accounting standard for lease transactions)
As disclosed in Note 2(j), Effective April 1, 2008, the Company and its consolidated domestic subsidiaries adopted the new accounting standards for finance leases commencing after March 31, 2008 and capitalized 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 have been accounted for as operatingleases, 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.

(Change of accounting method for depreciation of property and equipment)
As disclosed in Note 2(i), effective from the year ended March 31, 2008, the Company and its domestic subsidiaries changed the depreciation method for property and equipment acquired on after April 1, 2007 to themethod pursuant to the amended Corporation Tax Law of Japan. As a result, as compared with the previous accounting method, operating income of “Transportation services” segment, “Vehicle sales” segment and “Other”
segment decreased by ¥352 million, ¥68 million and ¥12 million 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 “Transportation services” segment, “Vehicle sales” segment, “Leasing for real estate services” segment and “Other” segment decreased by ¥653 million, ¥29 million, ¥2 million,and ¥9 million for the year ended March 31, 2008, respectively, as compared with the previous accounting method.

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

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

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

Geographic segment information is not shown because operating revenue and total assets of the overseas subsidiaries were not material in the years ended March
31, 2009, 2008 and 2007. 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,
2009 and 2008, and the related consolidated statements of income, changes in net assets and cash flows for theyears then ended, 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 on these consolidated
financial statements based on our audits. The consolidated statements of income, changes in net assets and cash
flows of the Seino Group for the year ended March 31, 2007, was audited by other auditors who have ceased
operations and whose report dated June 26, 2007, expressed an unqualified opinion on those statements.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles used andsignificant 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, 2009 and 2008, and the consolidated resultsof its operations and its cash flows for each of the two years in the period ended March 31, 2009, in conformity
with accounting principles generally accepted in Japan.
Without qualifying our opinion, we draw attention to the following:
As discussed in Note 11, pursuant to the resolution by the Board of Directors of the Company on April 20, 2009,
the Company executed a sales and purchase agreement with Seibu Railway Co., Ltd. and Seibu Construction
Co., Ltd., both are subsidiaries of SEIBU HOLDINGS INC., whereby the Company acquired common shares of
Seibu Transportation Co., Ltd.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended
March 31, 2009 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 tothe consolidated financial statements.

KPMG AZSA & Co.
Nagoya, Japan
June 25, 200924

Seino GroupThe Seino Group consists of Seino Holdings Co., Ltd. and 52 consolidated subsidiaries and 15 affiliates. The Seino Group
operates in four business segments, transportation services, vehicle sales, real-estate leasing services and other services.
Business relationship in the Seino Group is as follows.

Clients
Collection and
Delivery

VehiclesSales and Repairs

Domestic
Transportation

Vehicle Sales

Seino Transportation Co., Ltd.
*1
Hokkaido Seino Transportation Co., Ltd. *1
Iwate Seino Transportation Co., Ltd.
*1
Miyagi Seino Transportation Co., Ltd.
*1
Kanto Seino Transportation Co., Ltd.
*1
Kanagawa Seino Transportation Co., Ltd. *1
Nohi Seino Transportation Co., Ltd.
*1
Tokai Seino Transportation Co., Ltd.
*1
Mie Seino Transportation Co., Ltd.
*1
Hinomaru Seino Transportation Co., Ltd. *1
Shikoku Seino Transportation Co., Ltd. *1
Kyusyu Seino Transportation Co., Ltd. *1
Okinawa Seino Transportation Co., Ltd. *1
Seino Tsu-un Transportation Co., Ltd.
*1
Seino Express Co., Ltd.
*1
Seino Hikkoshi Co., Ltd.
*1
Seino Hokkaido Express Co., Ltd.
*1
Seino Tokyo Express Co., Ltd.
*1
Seino Hokuriku Express Co., Ltd.
*1
Seino Nagoya Express Co., Ltd.
*1
Seino Osaka Express Co., Ltd.
*1
Seino ST Service Co., Ltd.
*1
Seino Logistics Hokkaido Co., Ltd.
*1
S&N Logistics Co., Ltd.
*1
Seino Butsuryu 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.
Toshin Butsuryu Co., Ltd.

Sales andServices

Real Estate
Leasing

Information Services

Toyota Corolla Gifu Co., Ltd. *1
Gifu Hino Motor Co., Ltd. *1
Netz Toyota Gifu Co., Ltd. *1
Netz Toyota Centro Gifu Co., Ltd. *1
Asahi Enterprise Co., Ltd. *1*1
Jms Gifu Co., Ltd.
SHIGA HINO MOTOR CO., LTD. *1
Toyota Gifu Parts Dsitributor
Co., Ltd.
Maruni Co., Ltd

Seino Information
Service Co., Ltd.

*1

Japan Logistics
Development Co.,
Ltd.

*1

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

Real Estate
Leasing

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

VehicleSales

OthersInternational
Transportation
Seino Logix Co., Ltd.

*1

United-Seino Transportation(Malaysia) Sdn. Bhd.

*1

Seino Customs Clearance
Service Co., Ltd.

*1

Schenker-Seino Co., Ltd.

*2

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

O the rTransportation
Services

SEINO HOLDINGS Co., Ltd.
Note *1: Consolidated subsidiaries
52*2: Affiliates (under the equity method)
3
Companies except those mentioned above are affiliates 12
under the cost method.

25