Annual Report 2018Year Ended March 31,2018

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

Profile

Seino
Co.,Co.,Ltd. Ltd.
(“the (“theCompany”)
began businessSeinoHoldings
Holdings
Company”)
beganas abusiness
as a trucking
company
in 1930 and
was Based intrucking
company
in 1930 and
was incorporated
in 1946.

incorporated
1946. Based in the city of Ogaki, Gifu
thecity of Ogaki,inGifu.

Prefecture,
we are a leading trucking company, expanding
Prefecture, we are a leading trucking company, expanding in stepin step with the growth of the Japanese economy and thewith the growth of the Japanese economy and the development of thedevelopment of the nation’s extensive expressway network.
nation’s
extensive
Ontransferred
October 1, 2005,
On October
1,expressway
2005, the network.
Company
its theCompanytransferreditstransportation
businessandotheroperationstransportation business and other operations to a newcompany—which
has taken
the theoriginal
nametoa new company—which
has taken
original
nameSeino
Seino
Transportation
Co.,
Ltd.—andwas renamed
Seino Co., Ltd.,
Transportation
Co.,
Ltd.—andwas renamed
Seino Holdings
Holdings Co., Ltd. a pure holding company structure.
adopting a pure holding company structure.

The Seino Group currently consists of the pure holding company
company
Seino Holdings, 58 consolidated subsidiaries and 14
Seino Holdings,
76 consolidated
subsidiaries
and 21vehicle
affiliatessales,
engaged inaffiliates
engagedin transportation
services,transportation
services,
vehiclesales,
merchandise
sales,
leasingfor realmerchandise sales, leasing for real estate services and otherservices.
estate services and other services.
In
itsmainstay
mainstay
Transportation
Servicesbusiness,the hasIn itstransportation
servicesbusiness,
the Company
Company
has
taken
steps
to
build
even
more
convenienttaken steps to build even more convenient logistics systems, all the while
logistics systems, all the while adhering to its “customer-first”
adhering to its “customer-first” principle.
principle. As of March 31, 2011, Seino offers efficient
As of March 31,
2018, Seino
offers efficient
servicestransportation
services
throughout
Japan transportation
via its 634 domestic
throughout
Japan
via
its
675
domestic
terminals,
a
fleet
of
24,384
terminals, a fleet of 24,321 trucks and a trucking networktrucks
thataverages
5,000
routesthat
daily.
Overseas,
has transferred its
and a trucking
network
averages
4,000 Seino
routes daily.
international
operations
toaSchenker-Seino
Co.,
In addition, forwardingwith the aim ofestablishing
three-temperature zone
Ltd.,
a
joint
ventureestablishedwith
SchenkerAGinlogistics network within Japan and Asia, Showa Reizo Co., Ltd., which
has three large-scale refrigerated and freezer warehouses in the Tokyo’sCompany aims to bolster its

surrounding metro area,and Shoreifit Co.,
have beenthe
made
into
competitivenessby Ltd.
optimizing
synergies

subsidiaries while PT
Indomobil
Logistics
in Indonesia
has begunofSeinoSeino’s
domestictransportation
network

and ofSchenker’s
global network anddomestic transportation
frozen foods.

cutting-edge
systems.rapid services that
The Seino Groupis committed IT
to providing

deliver total customer satisfaction andproviding rapid services that deliver total
will proceed down the “Road tocustomer satisfaction
and will proceed down
Success”
to becomea highlyprofitable
the “Road to
Success”
to becomea highlycompany
throughinitiatives
to develop
profitable company through initiatives
todevelop a progressivemodelthatthatwilla progressivebusinessbusiness model
will becomebecome
the standard
for forthe standard
next-generationtransportation
business.
next-generation transportation
business.

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

Contents
Contents
Financial Highlights
Financial
Highlights

11

To OurFriendsTo
Our Shareholders,Shareholders,Customers
Customersand
andFriends

22

Special FeatureSpecialFeature44

Review ofReviewof Operations
Operations

66

Financial Review
Financial
Review

88

Six-year Summary
Six-year
Summary

99

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

13
13

Notes toNotes
to Consolidated
ConsolidatedFinancial
FinancialStatements
Statements

14
14

Report ofReportof Independent
IndependentAuditors
Auditors

24
24

Seino Group
Seino
Group

25
25

Board of Directors(As of June 27, 2018)
President

Yoshitaka Taguchi

Representative Director

Takao Taguchi

Directors

Masahiro Kamiya
Hidemi Maruta
Harumi Furuhashi
Nobuyuki Nozu

Outside Directors

Kenjiro Ueno
Meyumi Yamada
Shintaro Takai

Standing Statutory Auditors

Shingo Terada
Nobuhiko Ito

Outside Statutory Auditors

Fumio Kato
Eiji Kasamatsu

Seino Holdings Co., Ltd.

Financial Highlights(Billions of Yen)

For the Years Ended March 31, 2018, 2017 and 2016

Thousands of
U.S. Dollars (Note)

Millions of Yen
2018

CONSOLIDATED BASIS:
Operating revenue
Operating income
Profit before income taxes
Net income
Net income per share (yen)CONSOLIDATED BASIS:
Cash and cash equivalents, and short-term investments
Property and equipment, net of accumulated depreciation
Total assets
Long-term debt and other long-term liabilities
Net assets
Net assets per share (yen)

2017

2016

2017

¥ 596,130 ¥ 567,539 ¥ 555,457
27,117
26,18627,87928,69027,95730,545
18,206
18,86420,04792.09
94.87
101.88$ 5,623,868
263,010288,160
189,123
0.96

Millions of Yen

Thousands of
U.S. Dollars (Note)2018¥104,197
295,321629,063
97,453405,739
1,998.90

2017¥ 98,031
290,706
594,264
106,486
381,299
1,912.12

2016¥ 91,444
290,151
579,565
104,351
371,007
1,835.78

2017$ 982,991
2,786,047
5,934,557
919,368
3,827,727
18.86

2016

2017

2018

2017

2018

2017

2018

Net income(Billions of Yen)

25
20
15
10
5
0

(Note) U.S. dollar amounts are translated at ¥106 = U.S. $1, only for the convenience of readers.

2016(Billions of Yen)

450
400
350
300
250
200

Corporate Data

150
100
50

(As of March 31, 2018)

0Company Name
Head Office
Date of Establishment
Paid-in Capital
Number of Shares Issued
Stock Listings
Transfer Agent
Independent Auditors

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

2016

1

Annual Report 2018
Message from the Management

To Our Shareholders, Customers and Friends
We would like to take this opportunity to express our appreciation to our stakeholders, including shareholders
and other investors, for the consistent support you have shown us over the years. The results for the fiscal year
ending March, 2018 (April 1, 2017 to March 31, 2018) are presented herein.

Medium-term Management Plan
“Value-Up Challenge 2020”2017/42020/3
The following is a brief report on the performance of
Seino Holdings Co., Ltd. for the fiscal year ended March 31,
2018, our 97th term (from April 1, 2017 to March 31, 2018).
In the fiscal year under review, Japan’s economy continued
to recover moderately against a backdrop of improvements incorporate earnings and the employment environment, a
pickup in personal consumption, among other factors.
Despite this improvement, however, the outlook remains
uncertain amid concerns over how the Japanese economy
will be affected by instability in the international situationand financial and capital markets, and other uncertainties.
In the transportation industry, the Seino Group’s
mainstay business, while facing various management
challenges, such as rising outsourcing costs and increasing
personnel expenses under a strained labor supply/demandenvironment, we have been steadily increasing freight
volumes amid the improving economic landscape and havestarted to see the results of our initiatives aimed at receiving
reasonable transport fees and charges.
Facing such circumstances, the Seino Group has
formulated the medium-term management plan “Value-Up
Challenge 2020: Take Off Toward Growth,” which
commenced in the fiscal year under review. While seeking tostretch our “strengths” accrued up until now, we have united
to pursue maximization of our corporate value, and to create
new value.
As part of these measures, Seino Holdings Co., Ltd.
entered into a capital and business alliance agreement with
Hankyu Hanshin Holdings, Inc. and HANKYU
HANSHIN EXPRESS Co., Ltd. on December 25, 2017 sothat the signing parties could play complementary roles toprovide new logistics services to customers inside and outside
Japan.
Furthermore, in order to provide logistics supporting
three temperature zones across Japan and the Asian region,
we made Showa Reizo Co., Ltd. (Chuo Ward, Tokyo),
2which owns three large-scale refrigerating/freezing
warehouses in suburban areas of Tokyo’s metropolitan area,
and ice manufacturer SHOREIFIT (Chuo Ward, Tokyo)
our subsidiaries on October 2, 2017, and at Indonesia’s PT
Seino Indomobil Logistics, we started the transportation ofrefrigerated foods in that country on October 11, 2017.
In addition, on May 30, 2017, we also acquired 100% of
the shares of Shin-ota Taxi Co., Ltd. (Minokamo City, Gifu
Prefecture), Kani Taxi Co., Ltd. (Kani City, Gifu
Prefecture), and Tajimi Taxi Co., Ltd. (Tajimi City, Gifu
Prefecture) to make each of them our subsidiaries. We aim
to contribute to the local regions and society through thetaxi businesses and community bus operations and otherbusinesses of these companies.
As a result, operating revenue for the fiscal year ended
March 31, 2018 was ¥596,130 million (up 5.0% year onyear), operating profit was ¥27,879 million (up 2.8% year onyear), ordinary profit was ¥29,120 million (up 0.7% year onyear), and profit attributable to owners of parent was ¥20,046
million (up 10.1% year on year).

Future Outlook
In our outlook for the Japanese economy, we expect thatthe moderate tone of recovery will continue amid theongoing improvement in the employment and income
environments, with positive effects also expected fromvarious policy measures. Nevertheless, there are lingering
uncertainties reflecting concerns such as the impact ofvarious problems in overseas countries and fluctuation in thefinancial and capital markets.
Facing such circumstances, the Seino Group will steadily
implement the various measures of the three-year mediumterm management plan “Value-Up Challenge 2020: Take
Off Toward Growth,” which is currently in the second year.
While seeking to stretch our “strengths” accrued up until
now and pursue maximization of our corporate value, wewill accelerate our reforms and bold initiatives to create newvalue.
In our mainstay Transportation Services Business, we areseeing various optimistic signs such as an increase in
consumer-related freight and production-related freightagainst the backdrop of robust increases in domestic privatesector demand as well as positive trends in regard toreceiving reasonable transport fees and charges. On the other
hand, with increasing personnel expenses and risingoutsourcing costs as well as persistently high fuel costs andthe like, it is important that the Seino Group not only
implement initiatives aimed at securing sustainable revenues
and profits, but also take measures in response to the labor
shortage.
As part of this response we continue to implement
initiatives to receive reasonable transport fees and charges,
and fuel surcharges, carry out strategies to acquire newcustomers and improve the ratio of new customers who
continue to consign with us, and work to strengthen thelogistics business. In addition, we will work to streamline
operations through various efforts including initiatives for
expansion of model shifts and introduction of articulated
trucks, promotion of the transition to EDI (electronic datainterchange), and provision of positional data oftransportation vehicles (Ichishiru). As the improvements intime productivity are gained through such measures, we
expect to enjoy improvements in not only customer
satisfaction but also employee satisfaction.
Meanwhile, bearing in mind that the volume of freighttransportation in Japan will shrink as the population declines
and the conditions of low birthrate and aging population
advance, we plan to further strengthen our cooperation with
HANKYU HANSHIN EXPRESS Co., Ltd., which has
strength in the international transportation business, inorder to realize sustainable growth both in Japan andoverseas.
In passenger vehicle sales in the Vehicle Sales Business,
we expect that the growth in the number of new vehicles
sold will be eroded by the changes in the social structuresuch as low birthrate and aging population, and declining
car ownership among young adults. As a result, we plan on
keeping the business stable through expanding our portfolioof businesses relating to used car sales, car part sales, vehicle
inspections and automotive repairs while focusing on new
vehicle sales of mini-sized vehicles with small engine
displacement. In truck sales also, we will make efforts to
expand and enhance our portfolio of businesses relating tovehicle inspection and automotive repairs. While carryingout initiatives for used vehicle part sales, and working toboost customer satisfaction through store renewal andintroducing the latest equipment, we will carry out sales
activities that are locally based.
In the Merchandise Sales Business and Other Business,
we will expand our sales by strengthening existing businesses
and develop new products designed from the viewpoint of
the customer.
In the Leasing for Real Estate Services Business, we will
work to develop our leasing and sales of idle real estate while
effectively utilizing underutilized real estate.
While making steady efforts to achieve these businesschallenges, the Seino Group will work to strengthen thebusiness foundation and contribute to our customers’
prosperity to achieve further growth.
To all shareholders, we sincerely ask for your ongoing
encouragement and support into the future.
June 2018

Yoshitaka Taguchi,
President and Chief Operating Officer3

Annual Report 2018
Special Feature

Expanding Our Operations Scope and Creating New Value2018 marked the second year of the three-year medium-term
management plan "Value-Up Challenge 2020: Takeoff Toward
Growth." As we pursue the maximization of our value, using thestrength we have cultivated until now, we will swiftly set forth
reform and the spirit of challenge to create new values.

Main Topics for 2018
Cooperative Business with Seven-Eleven

Seino Holdings (President Yoshitaka Taguchi, headquarters in
Taguchi-cho, Ogaki City) concluded a business collaborationagreement with Seven-Eleven Japan in the aim of cooperation withexpanding its order taking and delivery service.
GENie was established as a dedicated delivery company for
Seven-Eleven Japan, and its staff (“heartists”) act as regional concierges,
delivering and taking orders for Seven Meals (a Seven-Eleven Japan
delivery service) and Seven-Eleven products, and acts as a watchfuleye for the communities they serve.

Increasing Work Efficiency with
RobotsSeino Transportation introduced RPA (Robotic Process
Automation) into its operations, allowing regular work done
through the repetition of fixed tasks to be automatically done bysoftware robots.
It was introduced with the aim of saving labor and increasing
efficiency in back office operations to let employees put theirtalents to more rewarding and creative work. At present, use of it
has begun in sales support as well as such fields as accounting
and labor management in the headquarters, and it is planned to
be introduced to each branch and sales location later on.

Integrated Optimization Plan
Certification

Beginning of “Ichishiru”

Seino Transportation (President Masahiro Kamiya,headquarters in Taguchi-cho, Ogaki City) began Ichishiru(roughly meaning “location recognition”) , a service for products
being delivered to corporations and a first in the special loadingtransportation industry, which provides the location of delivery
trucks during their runs through the use of smartphone GPS
capabilities.
The service offers customers a sense of ease as they can maketime to prepare for the delivery’s reception and rest assured the
product is on its way by tracking them on the internet and seeing
the location of the truck on a map.

©2019 ZENRIN CO., LTD.
(Z19LE 第1451号)

4

A mutual effort by Seino Transportation and JR Freight wascertified by the Ministry of Land, Infrastructure, Transport andTourism as an Integrated Optimization Plan. The effort entails
logistics from Tokyo to Kyushu, previously done solely with
10-ton trucks which now carry cargo until an en route Osaka
freight terminal station from which the cargo is loaded onto
freight trains bound for Kyushu.
The Integrated Optimization Plan system acknowledges
efforts to help reduce burdens on the environment and save laborby two or more parties coming together to integrate and optimize
the logistics business.

Beginning of a Cold Chain Overseas

PT Seino Indomobil Logistics (President Andrew Nasuri,
headquarters in Jakarta, Indonesia) began the domestictransportation of frozen foods in Indonesia.
This effort was mutually undertaken by Indonesia’s Salim
Group and Seino Holdings as the country’s demand forrefrigerated logistics is increasing in the food industry.
Refrigerated trucks which can be adapted to Indonesia’s
environments were co-developed, and Kanto-Unyu’s refrigerated
transportation know-how to be applied there was reviewed. With
the refrigerated trucks being operated by the company SIL, thetransportation of frozen foods became a reality.

Linked Business Capital with Hankyu
Hanshin Express

Seino Holdings concluded a capital investment and business
partnership agreement with Hankyu Hanshin Holdings andHankyu Hanshin Express. From now on, Hankyu Hanshin
Express will combine its globally constructed transportation
network with Seino Holdings’ entire domestic Japanesetransportation network and warehousing. By additionally sharing
information with one another with the use of IT, the two willproceed with efforts to provide their customers with the best
possible supply chain management.

Addition of Two More Companies to
the Group

Seino Holdings added the two companies Showa Reizo Co.,
Ltd. and Shoreifit Co., Ltd. to the Seino Group on October 2.
This addition to the group was done in the aim of expanding
the cold chain network and securing new bases providing threetemperature zone logistics, and allows the group to increase its
ability to work in the growing food market.

Establishment of the Taguchi Fukuju
Society Scholarship

Parenting Award

The Children’s Meals-on-Wheels project which Seino
Transportation and Coconet (President Shuji Kawai,
headquarters in Chuo-ku, Tokyo) participate in was selected for
the Actions category of the 10th annual Parenting Award.
Children’s Meals-on-Wheels is a new safety net projectdelivering free meals once every one or two months toimpoverished single-parent and other families, thus working tosolve the problems faced by underprivileged children. Seino
Transportation and Coconet work in the logistics of the project.

In commemoration of its 50th year of establishment, theTaguchi Fukuju Society (President Yoshitaka Taguchi,
headquarters in Taguchi-cho, Ogaki City) established the
Taguchi Fukuju Society Scholarship to provide scholarships
aiding university students from single-parent families.
Students enrolled in public high schools in Japan’s Gifu
Prefecture who are looking to further their education in anational, public university within Japan and who meet 5 criteriasuch as being from a single-parent family may apply. A￥300,000 lump-sum is given for enrollment and regularmonthly payments of ￥50,000 are provided for the shortest
period of enrollment in the institution with no need to repay anyof the money back. Students given provisional offers are decided
by the end of November in their last year of high school toencourage them to concentrate on their studies for entrance into
university.

5

Annual Report 2018

Expanding Our Operations Scope and Creating New Value
Transportation Services BusinessIn the Transportation Services Business, working under
our medium-term management plan, we responded to theissue of the population decline and shortage of labor caused by
the aging population and low birth rate by promoting ourstrategic vision “Gain efficiency through virtuous cycles,” andstriving to improve efficiency by making best use of thepotential of our personnel.
At Seino Transportation Co., Ltd., the core company of
the Transportation Services Business group, we continued
negotiations to receive reasonable transport fees and charges,
and fuel surcharges, as a measure to place importance on
profitability in order to continue to ensure stabletransportation quality. In addition, we focused on increasing
the volume of freight handled through capturing and keeping
new freight consignors. On the other hand, while proceedingwith further improving delivery precision for fixed-time,
fixed-route deliveries by using a multiple-trip system on routes
between Tokyo and Osaka, we strengthened efforts to switch
part of the long-distant routes to rail, which led to improved
revenues, shortened labor hours and reduced environmental

burden.
Moreover, in the field of logistics, by incorporating the“manufacturing/processing work” of our customers in addition
to our existing “Logistics + Transportation,” we were able toadd factory functions and offer added value.
Furthermore, for the purpose of recruiting and training
personnel amid the shrinking population of Japan’s labor
force, we promoted the establishment of subsidies foracquiring motor vehicle licenses and the enhancement ofsocial service facilities through the establishment andextension of facilities. We also strove to improve employee
retention rates by shortening labor hours through working
style reform and reducing the burden of operations. In
addition, our safety promotion instructors lead efforts to
conduct safety education and training courses for the entire
company to improve skills and awareness.
As a result of the above, operating revenue for this segment
was ¥443,168 million, up 4.8% year on year, and operating
profit was ¥20,965 million, up 4.7% year on year.

Vehicle Sales BusinessIn passenger vehicle sales, we worked to promote
campaigns and other activities centered on establishingoriginal cars with special specifications and new vehicle
models. However, the cycle of the new-model effect for thebiggest selling car models came to an end and this led to thenumber of new vehicles sold in the current fiscal year ending
slightly lower than that of the previous fiscal year. In used
vehicle sales, however, the number of vehicles sold grew year
on year as a result of increased retail sales through local-areaoriented sales activities. In the service division, we strove tosecure revenues by promoting vehicle inspections and vehicle
maintenance and garage services, as well as the sales of

products that lead to repeat visits such as maintenancepackages and automotive coatings.
In truck sales, sales were robust in Japan and the number ofvehicles sold at SUBIC GS AUTO INC. in the Philippines
increased significantly. Moreover, the number of new vehicles
sold increased year on year. While increasing the number ofgarage services through promoting vehicle maintenance andgarage services, such as vehicle inspections, we also focused onsales of used-parts.
As a result of the above, operating revenue for this segment
was ¥103,342 million, up 3.1% year on year, and operating
profit was ¥4,922 million, down 2.6% year on year.

Merchandise Sales Business
The Merchandise Sales Business engages in the sale of fuel,paper and paper products, and other products. As a result of
an increased unit sales price and higher sales volume in thesales of fuel and firm sales of domestic tissue papers, operating

6

revenue for this segment was ￥31,575 million, up 13.8% year
on year, and operating profit was ￥810 million, up 5.7 % year
on year.

Leasing for Real Estate Services BusinessIn the Leasing for Real Estate Services Business, we strive
to effectively utilize business resources by leasing the former
truck terminal and store sites, which had been replaced mainly
due to the impact of urban development and increasingly
cramped conditions.

Operating revenue for this segment was ¥1,599 million, up
3.6% year on year, and operating profit was ¥1,239 million,
down 3.1% year on year.

Other Business
Our Other Business segment includes the information
services business, the housing sales business, the passenger
transportation business, the construction contract business,and the personnel services business. As a result of strong sales
for software development, cloud services and information

device sales in the information services business and otherfactors, operating revenue for this segment was ¥16,446
million, up 8.6% year on year, and operating profit was ¥921
million, up 26.6% year on year.

Operating Revenue by Business Segment(Millions of yen)
FY Ended March 31, 2018

FY Ended March 31, 2017

Results

Results

Composition

Composition

Year-on-YearTransportation Services

443,168

74.3%

422,870

74.5%

4.8%

Vehicle Sales

103,34217.3%

100,237

17.6%

3.1%

Merchandise Sales

31,575

5.3%

27,749

4.9%

13.8%

Leasing for Real Estate Services

1,599

0.3%

1,543

0.3%

3.6%

Other

16,4462.8%

15,140

2.7%

8.6%

Total

596,130

100.0%

567,539100.0%

5.0%

Operating Income by Business Segment(Millions of yen)
FY Ended March 31, 2018

FY Ended March 31, 2017

Results

Results

Composition

Composition

Year-on-YearTransportation Services

20,96575.2%

20,020

73.8%

4.7%

Vehicle Sales

4,922

17.7%

5,055

18.7%

(2.6%)

810

2.9%

766

2.8%

5.7%

1,239

4.4%

1,279

4.7%

(3.1%)

Other

921

3.3%

728

2.7%

26.6%

Total

28,857103.5%

27,848102.7%

3.6%

Elimination(978)(3.5%)(731)(2.7%)—

Consolidated

27,879100.0%

27,117100.0%

2.8%

Merchandise Sales
Leasing for Real Estate Services

7

Annual Report 2018

Financial Review
Operating Results

Cash FlowsThe consolidated sales of Seino Holdings for the fiscal year
ending March 2018 was ¥596,130 million (a 5.0% increase
from the previous fiscal year). This was due to a rise inindividual shipping charge prices as well as the growth oflogistics business.
The operating costs amounted to ¥529,196 million, which
was a 5.2% increase from the previous fiscal year, due to a risein outsourcing costs of vehicles used, but the operating cost
rate to sales was 88.8%, a 0.3% increase from the previous
fiscal year.
Selling expenses and general administrative expenses
came to ¥39,055 million (a 3.4% increase from the same
period of the previous year) due to a rising labor cost, andoperating revenue came to ¥27,879 million.
As a result, this term’s net income before income taxes andminority interests was 6.5% more than the previous fiscal
year, coming to ¥30,545 million, and the net income for thisterm came to 10.1% more than the previous fiscal year at¥20,047 million.
This term’s net income per share was ¥101.88 and thereturn on equity was 5.2%. The annual cash dividend pershare rose to ¥30.00, which was a 11.1% increase from theprevious fiscal year.

Cash flow from operating activities amounted to ¥41,287
million; ¥6,416 million up from the previous consolidated
fiscal year, due to an increase in this term’s net income before
taxes and minority interests and a decrease in things like
corporate taxes.
Cash flow from investment activities came to −¥26,272
million, which was a ¥8,432 million increase from theprevious consolidated fiscal year, resulting from an increase in
expenditures from the purchase of investments in securities.
Cash flow from financial activities fell ¥1,304 million
from the previous consolidated fiscal year, coming to −¥7,180
million because of a decrease in expenditures from thepurchase of treasury stock.
As a result, cash and cash equivalents in the current
consolidated fiscal year increased ¥7,848 million from theprevious consolidated fiscal year, totaling ¥80,214 million.

Financial Position

Total assets at the end of the current consolidated fiscal
year totaled ¥629,063 million, which was an increase of¥34,799 million from the end of the previous consolidated
fiscal year. The main factor in this was things like an increasein trade receivables and inventories. Liabilities totaled¥223,324 million, which was a ¥10,359 million increase fromthe end of the previous consolidated fiscal year. Lastly, net
assets grew ¥24,440 million from the end of the previous
consolidated fiscal year, amounting to ¥405,739 million.
Retained earnings, etc. were the main factor in the increase.

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

Shareholders’ equity ratio

(%)

(%)

(%)

8

8

80

7

7

6

6

5

5

4

4

3

3

2

2

1

1

0

0

-1

8

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

2013

2014

2015

2016

2017

2018

-1

60

40

20

2013

2014

2015

2016

Operating income to operating revenue

Net income (loss) to total assets

Net income (loss) to operating revenue

Return on equity ratio

2017

2018

0

2013

2014

2015

2016

2017

2018

SEINO HOLDINGS CO., LTD. and Consolidated Subsidiaries

Six-year Summary

For the Years Ended March 31, 2017, 2016, 2015, 2014, 2013 and 2012
Millions of Yen
2018
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

¥

2017

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

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

555,457
416,113
94,441
28,0291,472
15,402492,802¥2014

542,452
398,972
95,351
32,6991,401
14,029487,664¥2013

543,407393,320
100,569
33,306
1,421
14,791490,002¥516,185
371,546
96,14832,457
1,438
14,596
467,596

39,05527,87920,04737,783
27,117
18,206

36,46926,186
18,86433,402
21,386
14,45633,21620,18915,49034,243
14,346
12,151

249,405
629,063
125,871
3,610
21,776
405,739

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

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

221,338
548,525
101,829
2,519
10,125363,314

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

196,803
510,467
107,1712,473
314
331,702Yen
Per share data:
Net (loss) income:-BasicCash dividends¥

Number of shares issued

101.8830.00¥

207,679

92.09
27.00

¥

94.87
28.00

¥

72.67
21.00

¥

Thousands
207,679
207,679

207,679

77.85
11.00

¥

61.05
11.00

207,679

207,679

3.7
2.9
2.9
4.7
62.2
197.4
58.3
14.1

2.8
2.4
2.4
3.8
63.4
183.6
55.3
18.0

Percent
Ratios:Operating income to operating revenue
Net income (loss) to operating revenue
Net income (loss) to total assets
Return on equity ratio
Shareholders’ equity ratio
Current ratio
Debt equity ratio
Payout ratio

4.7
3.3
3.2
5.2
63.4
198.1
56.0
29.4

Current ratio
(%)

240

4.8
3.2
3.1
4.9
63.1
218.6
56.8
29.3

4.7
3.3
3.3
5.3
63.0
212.3
57.2
29.5

3.9
2.7
2.6
4.2
64.5
217.4
52.4
28.9

Debt equity ratio

Payout ratio

(%)

(%)

120

50

200

40

90

160
30
120

60

20

80
30

10

40

0

2013

2014

2015

2016

2017

2018

0

2013

2014

2015

2016

2017

2018

0

2013

2014

2015

2016

2017

2018

9

Annual Report 2018
SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Balance Sheets
March 31, 2018 and 2017

Millions of yen
2018
Assets:Current assets:
Cash and cash equivalents (Note 3)
Short-term investments (Notes 3 and 5)
Trade receivables (Note 3)Inventories (Note 4)
Deferred tax assets (Note 17)
Other current assets
Allowance for doubtful accounts
		
Total current assets¥

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

80,21423,983
119,774
14,889
5,522
5,234
(211)
249,4052017
72,366
25,665
112,651
12,546
5,209
4,564
(209)
232,792$

607,177(311,856)
295,321589,383(298,677)
290,706

5,728,085(2,942,038)
2,786,047

48,231
3,255
14,081
9,466—

33,115
4,119
14,6999,984
235

455,00930,708132,840
89,302—

84,337
629,063

70,766594,264

795,633$ 5,934,557

2,704
1,481
44,96014,896
4,079
38,359106,479

$

¥

9,304

¥

¥

Long-term debt (Notes 3, 9 and 11)
Employee retirement benefit liability (Note 12)
Asset retirement obligations (Note 8)
Accrued severance indemnities for directors and corporate auditors
Deferred tax liabilities (Note 17)
Other long-term liabilities
		
Total liabilities

Thousands of
U.S. dollars
2018

3,610
7,917
51,62015,8295,635
41,260125,871

8,614

¥

¥

756,736
226,255
1,129,943
140,462
52,09449,377(1,990)2,352,877

87,774

34,057
74,689486,981
149,330
53,160389,245
1,187,462

13,85974,803
2,958
1,492
3,556
785
223,324

24,98773,739
2,550
1,643
2,797
770
212,965

130,745
705,689
27,906
14,07533,547
7,406
2,106,830

42,482
82,040274,994(8,956)
390,560

42,48280,631
260,275(12,554)
370,834

400,774
773,9622,594,283(84,490)3,684,529

14,716(114)(5,934)
(304)
8,364
6,815
405,739
629,063

11,574(114)(6,785)
(311)
4,364
6,101
381,299594,264

138,830(1,075)

Commitments and contingent liabilities (Notes 13 and 14)
Net assets:
Shareholders’ equity (Note 15):
Common stock: 794,524,668 shares authorized and 207,679,783 shares issued
Capital surplus
Retained earnings
Less treasury stock at cost: 8,108,445 shares in 2018 and 11,459,026 shares in 2017
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gains on available-for-sale securities
Land revaluation decrement
Retirement benefit adjustment
Foreign currency translation adjustments
Total accumulated other comprehensive income
Non-controlling interests		
Total net assets
		
Total liabilities and net assets
See accompanying Notes to Consolidated Financial Statements.
10

¥

¥

(55,981)(2,868)78,90664,292
3,827,727$ 5,934,557

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Income
For the Years Ended March 31, 2018, 2017 and 2016

2016

Thousands of
U.S. dollars
2018555,457$ 5,623,868

Millions of yen
2018
Operating revenue (Note 21)¥

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

596,130

2017¥

567,539¥

529,196
39,055568,251
27,879502,639
37,783
540,422
27,117492,80236,469529,271
26,186

4,992,415
368,4435,360,858
263,010

709
(231)
—
(33)
—
596
292
(472)
(191)
509
63
1,424
2,666
30,545

610
(235)
—
(54)
(82)
(13)
84
296
(221)
—
—
1,188
1,573
28,690

647
(199)
(121)
—
—
210
(106)
606
(446)
—
25
1,155
1,771
27,957

6,688(2,179)
—
(311)
—
5,622
2,755
(4,453)(1,802)4,802
594
13,43425,150288,160

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

11,984(1,443)
10,541

10,809(423)
10,386

11,336(2,049)9,287

113,056(13,613)99,443

		

20,00418,304

18,670188,717		

Operating income

Other income (expenses):
Interest and dividend income

Interest expense
Commission for syndicate loan
Loss on investments in partnerships
Loss on cancellation of leasehold contracts
Gain (loss) on sale or disposal of property and equipment
Gain (loss) on sale of investment securities
Share of (loss) profit of entities accounted for using equity method
Impairment loss on fixed assets (Notes 2(i) and 21)
Compensation received for the exercise of eminent domain
Gain on negative goodwill (Note 21)
Miscellaneous, net
		Profit before income taxes

ProfitLoss (profit) attributable to non-controlling interests
		Profit attributable to owners of parent¥(43)
20,047¥98
18,206¥(194)
18,864Yen
Per share:
Profit attributable to owners of parent-Basic-Diluted
Cash dividends¥

101.88
98.48
30.00

¥

92.09
89.01
27.00

$

(406)
189,123
U.S. dollars

¥

94.87
91.77
28.00

0.96
0.93
0.28

See accompanying Notes to Consolidated Financial Statements.
11

Annual Report 2018
SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Comprehensive Income
For the Years Ended March 31, 2018, 2017 and 2016

2016

Thousands of
U.S. dollars
2018¥18,670$188,717¥(1,324)(5,278)(139)(18)(6,759)11,911$

29,660
8,377
227
(330)
37,934
226,651

Millions of yen
2018Profit¥Other comprehensive income (Note 18):
Net unrealized gains on available-for-sale securities
Remeasurements of defined benefit plans, net of tax
Foreign currency translation adjustments
Share of other comprehensive income of affiliates accounted for using equity method		
Total other comprehensive income¥
Comprehensive income
Comprehensive income attributable to:
Owners of the parent¥
Non-controlling interests

2017

20,004¥18,304

3,144
888
24
(35)
4,021
24,025 ¥

947
(394)
(63)
(50)
440
18,74424,046(21)

18,71925¥¥$

12,126(215)

226,849(198)

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2018, 2017 and 2016

Shareholders’ equity
Accumulated other comprehensive income
Total
Number of
Net unrealized
Foreignshares of
Total
gains onLand
Retirement currency accumulated
Nonothercommon Common Capital Retained Treasury shareholders’ available-for- revaluation benefit translation comprehensive controlling Total net
stock issued stock
surplus earnings
stock
equity sale securities decrement adjustment adjustments income
interests
assetsMillions of yen
Balance at March 31, 2015 207,679,783 ¥ 42,482 ¥ 74,261 ¥ 235,133 ¥ (8,704) ¥ 343,172 ¥ 11,949 ¥ (131) ¥ (1,143) ¥(102) ¥ 10,573 ¥ 9,569 ¥ 363,314
Profit attributable to owners of parent———
18,864—
18,864——————
18,864
Cash dividends———(6,364)—(6,364)——————(6,364)
Reversal of land revaluation decrement
—
—
—
(16)
—
(16)
—
—
—
—
—
—
(16)
Purchases of treasury stock and
—
—
816
—
(963)
(147)
—
—
—
—
—
—
(147)
fractional shares, net
Change in treasury shares of parent arising from
—
—
5,508
—
—
5,508
—
—
—
—
—
—
5,508
transactions with non-controlling shareholders
Net changes in items other than
—
—
—
—
—
—
(1,331)
17(5,280)(128)(6,722)(3,430)(10,152)
shareholders’ equity
Balance at March 31, 2016 207,679,783
42,48280,585
247,617(9,667) 361,017
10,618(114)(6,423)
(230)
3,851
6,139
371,007
Profit attributable to owners of parent———
18,206—18,206——————18,206
Cash dividends———(5,548)—(5,548)——————(5,548)
Reversal of land revaluation decrement
—
—
—
—
—
—
—
—
—
—
—
—
—
Purchases of treasury stock andfractional shares, net——
4—(2,887)(2,883)——————(2,883)
Change in treasury shares of parent arising fromtransactions with non-controlling shareholders
—
—
42
—
—
42
—
—
—
—
—
—
42
Net changes in items other thanshareholders’ equity
—
—
—
—
—
—
956
—
(362)
(81)
513
(38)
475
Balance at March 31, 2017 207,679,783
42,48280,631
260,275 (12,554) 370,834
11,574(114)(6,785)
(311)
4,364
6,101
381,299
Profit attributable to owners of parent———
20,047—20,047——————20,047
Cash dividends———(5,328)—(5,328)——————(5,328)
Reversal of land revaluation decrement
—
—
—
—
—
—
—
—
—
—
—
—
—
Purchases of treasury stock andfractional shares, net
—
—
1,275
—
3,598
4,873
—
—
—
—
—
—
4,873
Change in treasury shares of parent arising fromtransactions with non-controlling shareholders
—
—
134
—
—
134
—
—
—
—
—
—
134
Net changes in items other thanshareholders’ equity
—
—
—
—
—
—
3,142
—
851
7
4,000
714
4,714
Balance at March 31, 2018 207,679,783 ¥ 42,482 ¥ 82,040 ¥ 274,994 ¥ (8,956) ¥ 390,560 ¥ 14,716 ¥ (114) ¥ (5,934) ¥(304) ¥ 8,364 ¥ 6,815 ¥ 405,739

12

Balance at March 31, 2017
Profit attributable to owners of parent
Cash dividends
Reversal of land revaluation decrement
Purchases of treasury stock andfractional shares, net
Change in treasury shares of parent arising fromtransactions with non-controlling shareholders
Net changes in items other thanshareholders’ equity
Balance at March 31, 2018

Thousands of U.S. dollars$ 400,774 $ 760,670 $2,455,424 $ (118,434) $3,498,434 $ 109,188 $ (1,075) $ (64,009) $ (2,934) $ 41,170 $ 57,556 $ 3,597,160—— 189,123— 189,123
—
—
—
—
—
—
189,123—— (50,264)— (50,264)
—
—
—
—
—
—
(50,264)
—
—
—
—
—
—
—
—
—
—
—
—
—

12,028—33,94445,972

—

—

—

—

—

—

45,972

—

1,264

—

—

1,264

—

—

—

—

—

—

1,264

—

—

—

—

—

29,642

—

8,028

66

37,736

6,736

44,472$ 400,774 $ 773,962 $2,594,283 $ (84,490) $3,684,529 $ 138,830 $ (1,075) $ (55,981) $ (2,868) $ 78,906 $ 64,292 $ 3,827,727

See accompanying Notes to Consolidated Financial Statements.

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Cash Flows
For the Years Ended March 31, 2018, 2017 and 2016

2016

Thousands of
U.S. dollars
201827,957$

Millions of yen
2018
Cash flows from operating activities:
Profit before income taxes¥
Adjustments for:		Depreciation
		 Impairment loss on fixed assets
		 Amortization of goodwill
		 Gain on negative goodwill
		 Net increase in employee retirement benefit liability
		 (Gain) loss on sale or disposal of property and equipment
		 Share of loss (profit) of entities accounted for using equity method
		 Loss on investments in partnership
		 (Gain) loss on sale of investment securities
		 Net (reversal) provision for accrued severance indemnities for directors
and corporate auditors
Increase in trade receivables
Increase in inventories
Increase (decrease) in trade payables
Other, net			
SubtotalInterest and dividend received
Interest paid
Income taxes paid			Net cash provided by operating activities

30,5452017¥

17,775
191
1,165
(63)
2,518
(596)
472
33
(292)

28,690¥16,977
221
1,109
—
2,515
13
(296)
54
(84)

288,160
167,689
1,802
10,991(594)
23,754(5,622)4,453
311(2,755)16,039
446
837
(25)
1,577
(210)
(606)
—
106

(203)

8

92

(1,915)(6,914)(2,270)6,489
2,000
50,8501,109(232)(10,440)
41,287(3,589)(3,254)
1,873
2,731
46,968
1,081(242)(12,936)
34,871(1,752)(769)(3,046)(2,150)38,496938(199)(8,591)30,644(65,227)(21,415)
61,217
18,868479,717
10,462(2,189)(98,490)
389,500(18,556)(11,748)
3,540
1,687

(16,138)(4,636)
1,000
1,941

(23,878)(484)
755(2,387)(175,057)(110,830)
33,396
15,915

Cash flows from investing activities:
Increase in property and equipment
Increase in long-term investments and loans
Decrease in property and long-term investments
Decrease (increase) in short-term investments
Purchase of shares of subsidiaries resulting in change in scope of consolidation(Note 16)
			Net cash used in investing activities(1,195)(7)(14,905)(11,273)(26,272)(17,840)(40,899)(247,849)

Cash flows from financing activities:
Increase in long-term debt
Repayment of long-term debt
Net increase (decrease) in short-term borrowings
Proceeds from share issuance to non-controlling shareholders
Dividends paid to shareholders
Dividends paid to non-controlling interests
Purchases of treasury stock, net of disposals
Proceeds from maturity of trust account for acquisition of treasury stock
Other, net
			Net cash (used in) provided by financing activities			
Effect of exchange rate changes on cash and cash equivalents			
Net increase (decrease) in cash and cash equivalents			Cash and cash equivalents at beginning of year			Cash and cash equivalents at end of year—
(3,191)903
936(5,328)
(38)
393
—
(855)
(7,180)13
7,848
72,36680,214

1,360
(484)
(149)
43
(5,548)(46)(2,925)—(735)(8,484)(20)
8,527
63,83972,366

11,900(5,382)
156
4,917(6,364)
(66)
(2)
2,011
189
7,359
(43)
(2,939)66,77863,839—(30,104)
8,519
8,830
(50,264)
(359)
3,708
—
(8,066)(67,736)
123
74,038682,698
756,736

¥

¥

¥

$

See accompanying Notes to Consolidated Financial Statements.
13

Annual Report 2018
SEINO HOLDINGS CO., LTD. and Subsidiaries

Notes to Consolidated Financial Statements
1. Basis of Consolidated Financial Statementsbuildings and vehicles and by the declining balance method for other property.
Property and equipment of other subsidiaries have been depreciated principally by the decliningbalance method, except for buildings acquired on and after April 1, 1998, property held for lease andfacilities attached to buildings and structures acquired on and after April 1, 2016. Buildings acquired on
and after April 1, 1998 and facilities attached to buildings and structures acquired on and after April 1,2016 by the domestic subsidiaries are depreciated by the straight-line method. Some of the subsidiaries
capitalize property for which the cost was not less than ¥100,000 but below ¥200,000 and depreciate it
over three years on a straight-line basis.
The Seino Group, as lessee, capitalizes assets used under finance leases, except for certain immaterialor short-term finance leases accounted for as operating leases. Depreciation of leased assets capitalized
in finance lease transactions as lessee is computed by the straight-line method over the lease term as theuseful life with the assumption of no residual value. The leased property of a certain subsidiary engaged
in leasing operations as lessor is recorded at cost in property and equipment in the accompanying
consolidated balance sheets under operating lease accounting and is depreciated over the term of thelease contract by the straight-line method to the amount equal to the estimated disposal value at thelease termination date.
Expenditures on maintenance and repairs are charged to operating income as incurred. Upon thedisposal of the property, the cost and accumulated depreciation are removed from the accounts and any
gain or loss is recorded as income or expense.

The accompanying consolidated financial statements of SEINO HOLDINGS CO., LTD. (the “Company”)
and its subsidiaries (together with the Company, the “Seino Group”) have been prepared in accordance withthe provisions set forth in the Financial Instrument and Exchange Law of Japan and its related accounting
regulations and in conformity with accounting principles generally accepted in Japan (“Japanese GAAP”),
which are different in certain respects as to application and disclosure requirements from International Financial
Reporting Standards (“IFRS”).
The accompanying consolidated financial statements have been restructured and translated into English
from the consolidated financial statements of the Company prepared in accordance with Japanese GAAP
and filed with the appropriate Local Finance Bureau of the Ministry of Finance as required by the Financial
Instrument and Exchange Law of Japan. Certain supplementary information included in the statutory Japanese
language consolidated financial statements, but not required for fair presentation, is not presented in theaccompanying consolidated financial statements.
The translation of the Japanese yen amounts into U.S. dollar amounts is included solely for the convenienceof readers outside Japan, using the approximate exchange rate prevailing at March 31, 2018, which was ¥106 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)Principles of consolidation
The accompanying consolidated financial statements include the accounts of the Company and all of its
subsidiaries. Investments in significant affiliates are accounted for by the equity method. Investments in affiliates
not accounted for by the equity method are stated at cost. Differences between the acquisition cost of investments
in subsidiaries and the underlying equity in their net assets, adjusted based on the fair value at the time of theacquisition, are deferred as goodwill and amortized over the estimated useful life, 5-15 years, on a straight-line
basis. All intercompany transactions and accounts have been eliminated on consolidation.
Under accounting standards for consolidation, a subsidiary is defined as an enterprise which is controlled
by another enterprise and is a majority (more than 50%) owned enterprise or a 40% to 50% owned enterprisethat meets certain criteria. An affiliated company is defined as an enterprise in which the investor has significant
influence and is an enterprise other than a subsidiary that is a 20% or more owned enterprise or a 15% to lessthan 20% owned enterprise that meets certain criteria. For each of the years ended March 31, 2018, 2017 and2016, there were six companies that were not a more than 50% owned enterprise but were nevertheless classified
as subsidiaries based on the judgment of the Company in accordance with the applicable accounting standards.
The number of subsidiaries and affiliates for the years ended March 31, 2018, 2017 and 2016 was as follows:

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

2018

2017

2016

70
6
7
14

64
6
6
15

65
6
5
13

(Changes in accounting policies)
Due to amendments to the Japanese Corporation Tax Act, the Company and its domestic
subsidiaries adopted “Practical Solution on a Change in Depreciation Method Due to Tax Reform
2016” (Practice Issue Task Force No. 32, June 17, 2016) for application from the year ended March 31,2017 and changed the depreciation method for buildings, facilities attached to buildings and structuresacquired on and after April 1, 2016 from the declining balance method to the straight line method.
(h)Intangible assets
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.

(i)

Accounting standard for impairment of fixed assets
The Company and its domestic subsidiaries have adopted the "Accounting Standard for Impairment of
Fixed Assets" issued by the Business Accounting Council of Japan and the related practical guidance issued
by ASBJ. The standard requires that fixed assets be reviewed for impairment whenever 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 statement by reducing the carrying amount of the impaired asset or groupof assets to the recoverable amount, to be measured as the higher of the asset’s net selling price or value in
use. Fixed assets include intangible assets as well as land, buildings and other forms of property and are to
be grouped at the lowest level for which there are identifiable cash flows distinguishable from other groupsof assets. For the purpose of recognition and measurement of impairment loss, fixed assets are grouped
into cash-generating units, such as operating business branches other than idle or unused property. The
method used to group assets to measure impairment of fixed assets in the transportation services segment isa method that groups assets by the entire segment.At March 31, 2018, 2017 and 2016, recoverable amountsof assets were measured based on value in use using discounted future cash flows at interest rates principallyof 7.5%, 6.6% and 6.8%, respectively, or net selling prices using primarily appraisal valuations. As a result,
the Seino Group recognized impairment loss as follows:

The Company and most of its subsidiaries have a fiscal year that ends on March 31. The overseas
subsidiary closes its books on December 31. The Company has consolidated the overseas subsidiary’s
financial statements as of its year-end because the difference between its fiscal year-end and that of
the Company was not more than three months. Significant transactions for the period between thesubsidiary’s year-end and the Company’s year-end were adjusted for on consolidation.
The consolidated financial statements include the accounts of the overseas subsidiary prepared
under IFRS in accordance with Practical Issues Task Force (“PITF”) No. 18, “Practical Solution
on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial
Statements,” issued by the Accounting Standards Board of Japan (“ASBJ”).
(b)

(c)

14

Millions of yen

Property subject toimpairment:

Cash and cash equivalents
The Seino Group considers highly liquid debt instruments purchased with an original maturityof three months or less to be cash equivalents.
Investments and marketable securities
The Seino Group classifies certain investments in debt and equity securities as “held-to-maturity,”“trading” or “available-for-sale.” The classification determines the respective accounting method as stipulatedby the accounting standard for financial instruments. Held-to-maturity securities are stated at amortized cost.
Marketable securities with market quotations for available-for-sale securities are stated at fair value, and net
unrealized gains and losses on these securities are reported as accumulated other comprehensive income in net
assets, net of applicable income taxes. Gains and losses on the disposition of available-for-sale securities arecomputed based on the moving average method. Nonmarketable securities without available market quotations
for available-for-sale securities are carried at cost determined by the moving average method. Adjustments incarrying values of individual securities are charged to income through write-downs when a decline in value isdeemed other than temporary. Investments in partnerships are stated at the amount of net assets attributed to theownership percentage of the Company.

(d)

Accounting for derivatives
As of March 31, 2018 and 2017, the Seino Group did not hold nor had it issued any derivative
instruments.

(e)

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

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

(g)

Property and equipment and depreciation
Property and equipment, including significant renewals and additions, are stated at cost. Property
and equipment of the Company and certain subsidiaries are depreciated by the straight-line method for

2018

2017

2016

8 businessbranchesand 2 idle
property

3 businessbranchesand 1 idle
property

6 businessbranchesand 5 idle
properties¥¥

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

181
10
—
191

¥

163
57
1
221

¥

380
65
1
446

Thousandsof U.S.
dollars
2018

$

$

1,708
94
—
1,802

Accumulated impairment losses have been directly deducted from the applicable assets.
(j)

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

(k)

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

Benefits to Directors and Corporate Auditors.”(l)

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

(m)

Income taxes
Income taxes are accounted for by the asset-liability method. Deferred tax assets andliabilities are recognized for the future tax consequences attributable to differences between the
carrying amounts of existing assets and liabilities and their respective tax bases and operating loss
carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates isrecognized in the period that includes the enactment date and the promulgation date for the fiscal
year ended March 31, 2016.

The guidance will be adopted from the beginning of the fiscal year ending March 31, 2019.
(3) Effect of adoption
The Company is currently assessing the effect of adopting the guidance on the consolidated
financial statements.
In March 2018, the ASBJ issued ASBJ Statement No. 29, "Accounting Standard for Revenue
Recognition", and ASBJ Guidance No. 30, "Implementation Guidance on Accounting Standard for
Revenue Recognition."(1) Outline
International Accounting Standards Board (IASB) and Financial Accounting Standards Board(FASB) jointly developed a comprehensive accounting standard for revenue recognition and issued"Revenue” from Contracts with Customers" (International Financial Reporting Standards (IFRS)
No. 15 issued by IASB and Topic 606 issued by FASB) in May 2014. Considering that IFRS No.
15 has become applicable for fiscal years beginning on and after January 1, 2018 and Topic 606 forfiscal years beginning after December 15, 2017, the ASBJ developed a comprehensive accounting
standard for revenue recognition and issued it together with the implementation guidance. ASBJ’s
basic policy in developing the accounting standard for revenue recognition was to establish
accounting standards as a starting point to adopt basic principles of IFRS No. 15 from the viewpointof comparability of financial statements, which is one of the benefits of maintaining consistency
with IFRS No. 15, and to add alternative treatments to the extent not to impair comparability incases in which previous practices and other issues in Japan should be considered.
(2) Date of adoption
The guidance will be adopted from the beginning of the fiscal year ending March 31, 2022.
(3) Effect of adoption
The Company is currently assessing the effect of adopting the standard and guidance on the
consolidated financial statements.

(Additional Information)
The Company and its domestic subsidiaries adopted “Revised Implementation Guidance on
Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26, March 28, 2016 (hereinafter, “Guidance
No. 26)) from the year ended March 31, 2017.
(n)Enterprise taxes
The Seino Group records local corporate enterprise taxes based on the “added value” and “capital”
amounts when levied as size-based corporate taxes for local government enterprise taxes, which areincluded in selling, general and administrative expenses.

(o)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.

(p)Translation of foreign currency accounts
Receivables, payables and securities, other than stocks of subsidiaries, are translated into Japanese yen at
the exchange rates prevailing at the fiscal year-end. Transactions in foreign currencies are recorded based on
the prevailing exchange rates on the transaction dates. Resulting translation gains and losses are included incurrent earnings.
In respect to 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 allocations of portions attributable to minority interests, are reported as foreign currencytranslation adjustments in a component of net assets on the accompanying consolidated balance sheets.

(q)

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

(r)

Adoption of consolidated taxation system
The Company and some of its subsidiaries have adopted the consolidated taxation system, with
the Company as the taxable parent company.

(s)

Changes in accounting policies for business combinations
The Company and its domestic subsidiaries have adopted and apply “Revised AccountingStandard for Business Combinations” (ASBJ Statement No. 21, September 13, 2013 (hereinafter,“Statement No. 21”)), “Revised Accounting Standard for Consolidated Financial Statements” (ASBJ
Statement No. 22, September 13, 2013 (hereinafter, “Statement No. 22”)) and “Revised AccountingStandard for Business Divestitures” (ASBJ Statement No. 7, September 13, 2013 (hereinafter,“Statement No. 7”)) (together, the “Business Combination Accounting Standards”) from the priorfiscal year. As a result, the Company changed its accounting policies to recognize in capital surplus
the differences arising from changes in the Company’s ownership interest of subsidiaries over which
the Company continues to maintain control and to record acquisition related costs as expenses in
the fiscal year in which the costs were incurred. In addition, the Company changed its accounting
policy for the reallocation of acquisition costs due to completion following provisional accounting
to reflect such reallocation in the consolidated financial statements for the fiscal year in which thebusiness combination took place. The Company also changed the presentation of net income, andthe term “non-controlling interests” is used instead of “minority interests.”
With regard to the application of the Business Combination Accounting Standards, theCompany followed the provisional treatments in Article 58-2(4) of Statement No. 21, Article
44-5(4) of Statement No. 22 and Article 57-4(4) of Statement No. 7, with application from the
beginning of the year ended March 31, 2016 prospectively. As a result, operating income decreasedby ¥133 million, profit before income taxes for the year ended March 31, 2016 decreased by ¥5,605
million, goodwill and capital surplus as of the end of the March 31, 2016 decreased and increasedby ¥97 million and ¥5,508 million, respectively.
In the consolidated statement of cash flows, cash flows from acquisition or disposal of sharesof subsidiaries with no changes in the scope of consolidation are included in “Cash flows fromfinancing activities,” and cash flows from acquisition related costs for shares of subsidiaries
with changes in the scope of consolidation or costs related to acquisition or disposal of sharesof subsidiaries with no changes in the scope of consolidation are included in “Cash flows fromoperating activities.”
Capital surplus as of the end of March 31, 2016 in the consolidated statement of changes in net
assets increased by ¥5,508 million. Net assets per share, earnings per share and diluted earnings per
share for the year ended March 31, 2016 decreased by ¥0.48, ¥28.19 and ¥27.28, respectively.
(Accounting policies issued but not yet adopted)
In February 2018, the ASBJ revised ASBJ Guidance No. 28, "Implementation Guidance on Tax EffectAccounting", and ASBJ Guidance No. 26, "Implementation Guidance on Recoverability of Deferred Tax
Assets."(1) Outline
In the course of transferring practical guidance related to accounting for income tax effectsprescribed by the Japanese Institute of Certified Public Accountants to the ASBJ, the ASBJ
basically followed the contents and made required modifications to the "Implementation Guidanceon Tax Effect Accounting," etc.
Major modified accounting treatments- Treatment of taxable temporary differences related to subsidiary shares in nonconsolidated
financial statements- Treatment of recoverability of deferred tax assets for companies that fall under Category 1(2) Date of adoption(t)Additional information
Employee Shareholding Incentive Plan (E-Ship®)
The Company has introduced an Employee Shareholding Incentive Plan (E-Ship®) for the welfare of its
employees. The plan is an incentive plan that covers all employees participating in the Shareholding Association.
Under the plan, the Company, as the trustor, entered into a specified trust cash funding agreement (the“E-Ship Agreement”) with a trust bank, as a trustee to set up the trust (the “E-Ship Trust”). The E-Ship
Trust purchases the number of shares of the Company that the Shareholding Association rationally expects topurchase over the next three years and subsequently sells them periodically to the Shareholding Association inaccordance with certain conditions and methods stipulated in the E-Ship Agreement over the three-year period.
At the end of the trust period, the E-Ship Trust’s retained earnings, the accumulation of net gain on sales of its
shares of the Company, are distributed to the eligible employees in accordance with the E-Ship Agreement. For
its part, the Company will guarantee retained loss, accumulation of net loss on sales of its shares of the Company
and will pay off the amount of outstanding debt at the end of the trust period, as it shall guarantee the debt of
E-Ship Trust.
The shares of the Company held by the E-Ship Trust were accounted for as treasury stock under net
assets. The assets, liabilities, income and expenses of the E-Ship Trust were consolidated in the accompanying
consolidated financial statements. The book value and number of shares held by the E-Ship Trust at March
31, 2018 and 2017 were ¥963 million ($9,085 thousand) and 723 thousand shares, ¥1,358 million and 1,019
thousand shares, respectively. The book value of bank loans of the E-Ship Trust recorded in the consolidatedbalance sheet as of March 31, 2018 and 2017 were ¥867 million ($8,179 thousand) and ¥1,360 million.

3. Financial Instruments(1) Qualitative information on financial instruments(a)Policies on Financial Instruments
The Seino Group implements its Cash Management System for effective investments andfunding. The Company invests in short-term, low-risk instruments in accordance with its internalfund management rules. The Company raises funds mainly through indirect financing such as bankloans for investments in facilities, taking immediate liquidity into consideration.
(b)
Details of Financial Instruments and Risks
Trade receivables are exposed to the credit risk of customers. Some of the subsidiaries havereceivables in foreign currency and are exposed to foreign currency fluctuation risk.
Marketable and investment securities, which consist of held-to-maturity securities and equity
securities of business entities with which the Seino Group has business relationships, are exposed tostock market fluctuation risk.
Trade payables have general terms and conditions and are mostly due within one year. However,some of the subsidiaries have them denominated in foreign currency, which exposes them to foreign
currency fluctuation risk.
Some bank loans and convertible bonds are used principally for capital investments and arepartially exposed to interest rate fluctuation risk.
(c)

Risk Management for Financial Instruments(1) Monitoring of credit risk
In accordance with internal policies for credit risk management, each subsidiary monitors
the creditworthiness of its customers and manages the terms and conditions of payment, duedates and remaining balances to reduce such risk. Regarding held-to-maturity securities,
the Company invests in high credit-rating bonds in accordance with its internal fundmanagement rules. As a result, the risk is insignificant.
(2) Monitoring market risk
The Board of the Directors regularly monitors market risk using management methods
which comply with internal market risk management rules. For marketable securities, theSeino Group monitors market prices every quarter and reviews the market conditions and thefinancial position of and business relationship with the issuers.
(3) Monitoring liquidity risk
The Company has a Cash Management System with its subsidiaries and becomes the paying
agent for the subsidiaries under the system. The subsidiaries report their cash flow projections
to the Company. The Company has sufficient bank credit lines, including credit lines withoverdrafts, enabling the Seino Group to manage liquidity risk.
(d)Supplemental information on fair values
The fair values of financial instruments are based on their market prices. The fair values offinancial instruments with no available market prices are determined by using prices calculated
in a reasonable manner. However, since certain assumptions are used in the computation of thereasonable estimates, the result may be different if alternative assumptions are used.
(2) Fair values of financial instruments
The fair and carrying values of the financial instruments included in the consolidated balance sheets at
March 31, 2018 and 2017, other than those for which the fair value was extremely difficult to determine, are set
forth in the table below.

15

Annual Report 2018

At March 31, 2018:
Cash and cash equivalents
Short-term investments
Trade receivables
Investment securities
			Total assets

Carrying value

Fair value
Millions of yen¥

80,21423,983
119,774
34,570258,541¥

3,610
51,620
5,883¥¥

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

At March 31, 2017:
Cash and cash equivalents
Short-term investments
Trade receivables
Investment securities
			Total assets

¥

2,704
44,96010,015677
12,19270,548

¥

¥

¥—
—
2,023

iii) The redemption schedule for financial assets with maturities at March 31, 2018 was as follows:

1,086
10,70574,927

—
(102)
1,921

¥

Difference

72,366
25,665
112,651
30,735
241,417

¥—
—
—
—
¥—

2,704
44,96010,475

¥—
—
460

677
12,10470,920

—
(88)
372

¥

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

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

756,736
226,255
1,129,943
326,132
2,439,066$

34,057
486,981
55,500$

10,245
101,953688,736$$

756,736
226,255
1,129,943
326,132
2,439,066

$—
—
—
—
$—

34,057
486,981
74,585$——
19,085

10,245100,990
706,858—(963)
18,122$

Notes:i) Methods of measuring the fair value of financial instruments are as follows:
Assets:(1) Cash and cash equivalents
As these instruments are settled within a short term, their fair value and carrying value arenearly identical, and their carrying values are assumed as their fair values.
(2) Trade receivables
The fair value of installment sales receivables is measured by the carrying amount, which
is based on the present value of future cash flows through maturity discounted using an
estimated credit risk adjusted interest rate. The carrying amounts of trade receivables otherthan installment sales receivables approximate fair value because of the short maturity of these
instruments.
(3) Short-term investments and investment securities
The fair value of marketable securities equals the quoted market price, if available. The fair valueof debt securities equals the quoted market price or the price provided by financial institutions.
Marketable and investment securities classified according to the purpose for which they are held aredescribed in Note 5.
Liabilities:(1) Trade payables
As these instruments are settled within a short term, their fair values and carrying values arenearly identical, and, their carrying values are assumed as their fair values.
(2) Short-term borrowings and current portion of long-term bank loans
As these instruments are settled within a short term, their fair values and carrying values arenearly identical, and their carrying values are assumed as their fair values.
(3) Convertible bonds
The fair value of convertible bonds is based on the price quoted by the correspondent financial
institution.
(4) Long-term bank loans
The fair value of long-term debt is based on the present value of future cash flows discounted
using the current borrowing rate for similar debt of comparable maturity.

16$ 113,943
14,934$ 128,877

3,610
51,620
7,906

¥

¥

1,399
981
2,380

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

¥

¥

2017

Thousands of
U.S. dollars
2018

Millions of yen

¥—
—
—
—
¥—

Fair value
Millions of yen

72,366
25,665
112,651
30,735
241,417ii) The following were not included in the table above because the fair value was extremely difficult todetermine:

80,21423,983
119,774
34,570258,541

Carrying value

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

At March 31, 2018:
Cash and cash equivalents
Short-term investments
Trade receivables
Investment securities
			Total assets

1,086
10,80773,006¥

Difference

2018¥ 12,078
1,583¥ 13,661

Due within
1 year
At March 31, 2018:
Cash and cash equivalents
Short-term investments
Trade receivables
Investment securities –		bonds and other

At March 31, 2018:
Cash and cash equivalents
Short-term investments
Trade receivables
Investment securities –		 bonds and other¥

80,21423,98389,802¥

193,999¥¥

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

Due
after
10 years¥——
29,186

¥—
—
1

—

¥—
—
785

106
¥

29,292—¥785

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

—
¥

1

Due
after
10 years

756,736
226,255
847,189$——
275,339

$—
—
7,406

$—
—
9

—

1,000

—

—

$ 1,830,180$ 276,339

$

7,406

$

9

iv)For the repayment schedule for convertible bonds and long-term bank loans at March 31, 2018,see Note 9, “Short-term Borrowings and Long-term Debt.”

4. Inventories
Inventories at March 31, 2018 and 2017 were as follows.

Millions of yen

Merchandise and finished products
Work in process
Raw materials and supplies2018¥ 12,896
1,214
779¥ 14,889

2017
10,731
1,116
699¥ 12,546¥

Thousands of
U.S. dollars
2018$ 121,660
11,4537,349$ 140,462

5. Investments
At March 31, 2018 and 2017, short-term investments consisted of the following:

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

Millions of yen

Thousands of
U.S. dollars
201812,10012,10012,10012,100$13,56525,665

112,104$ 226,255

2018

11,88323,983

2017¥¥

114,151
114,151

At March 31, 2018 and 2017, investment securities consisted of the following:

2017

Thousands of
U.S. dollars
201830,566108
61
30,7352,380
33,115$ 324,585
953
594
326,132
128,877$ 455,009

Millions of yen

Marketable securities:
Equity securities
Bonds
Other
		 Total marketable securities
Other non-marketable securities2018¥ 34,406
101
63
34,57013,661¥ 48,231¥¥Marketable securities classified as available-for-sale are stated at fair value with unrealized
gains and losses excluded from current earnings and reported as a net amount within the net
assets account until realized. At March 31, 2018 and 2017, gross unrealized gains and losses formarketable securities classified as available-for-sale were as follows:

Gross
Gross
unrealized unrealized
gains
lossesMillions of yen

Cost
At March 31, 2018:
Equity securities
Bonds
Other
At March 31, 2017:
Equity securities
Bonds
Other
At March 31, 2018:
Equity securities
Bonds
Other

¥
¥

12,934
118
12,12725,179¥¥12,959118
12,12825,205¥

21,523—36
21,559¥¥17,776—33
17,809¥¥Fair andcarrying
value(51) ¥ 34,406
(17)
101
—
12,163(68) ¥ 46,670¥¥(169) ¥
(10)—(179) ¥¥

Thousands of U.S. dollars$ 122,019
1,113
114,406$ 237,538$ 203,047—
339$ 203,386$

30,566108
12,161
42,835(481) $ 324,585
(160)
953
—
114,745(641) $ 440,283$

At March 31, 2018 and 2017 investments in and long-term loans to affiliates consisted of thefollowing:

Millions of yen

Investments accounted for by the equity
method for significant affiliates and¥at cost for others

2018

3,255

2017

¥

4,119

Thousands of
U.S. dollars
2018$

30,708

6. Property and Equipment
At March 31, 2018 and 2017, property and equipment consisted of the following:

Millions of yen

Property and equipment, at cost:
Land
Buildings and structures
VehiclesMachinery and equipment
Construction in progress
Other
Less accumulated depreciation
Total property and equipment

2018

2017

Thousands of
U.S. dollars
2018¥ 174,468 ¥ 173,281 $ 1,645,925
271,743
263,608
2,563,613
106,998
106,237
1,009,415
43,68538,369412,123
2,892
1,294
27,2837,391
6,594
69,726607,177
589,383
5,728,085(2,942,038)(311,856)(298,677)¥ 295,321 ¥ 290,706 $ 2,786,047

One of the consolidated subsidiaries elected to carry out a one-time revaluation 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 value over reassessedvalue, net of the tax effect and minority interests portions, is recorded in net assets as land revaluation decrement
account in the accompanying consolidated balance sheets. At March 31, 2018 and 2017, the difference between
the carrying values of land used for business operations after revaluation over the current market values of theland at the fiscal year-end amounted to ¥1,834 million ($17,302 thousand) and ¥1,792 million, respectively.

7. Real Estate for Rent
Some of the Company’s subsidiaries own land and facilities for rent at locations where
the business branches were closed or redeployed branches used to be. The carrying values in
the consolidated balance sheets, changes during the years ended March 31, 2018 and 2017
and the fair values of the rental properties were as follows:

Millions of yen

Carrying value at the beginning of year
Net changes during the year
Carrying value at the end of year
Fair value at the end of year *2018¥ 14,096
526
14,622¥ 19,371

2017¥ 14,031
65
14,096¥ 19,243

Thousands of
U.S. dollars
2018$ 132,981
4,962
137,943$ 182,745

Millions of yen

Operating revenue
Operating costs
Income from rental operations
Profit (loss) on disposal of rental
property and other

¥

¥

602

¥

2017
1,543
292
1,251

¥

(243) $

5,679

8. Asset Retirement Obligations
Asset retirement obligations are based upon estimated future restoration obligations pursuant to office rental
agreements. The asset retirement obligations are calculated based upon the useful life designated by law or theestimated office rental period and are discounted by the yield rate of government bonds.
Asset retirement obligations for the years ended March 31, 2018 and 2017 were as follows:

Millions of yen

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

¥

¥

2018
2,627
443
36

¥

2017
2,586
—
18

Thousands of
U.S. dollars
2018$ 24,783
4,179
340

47

46

443

(190)
2,963 ¥

(23)
2,627 $

(1,792)
27,953

9. Short-term Borrowings and Long-term Debt
At March 31, 2018 and 2017, short-term borrowings consisted of the following:

Millions of yen

Unsecured bank overdrafts withinterest rates of 1.475% per annum¥at March 31, 2018
Short-term bank loans, secured withinterest rates ranging from 0.975%
to 1.300% per annum at March 31,
2018
Short-term bank loans, unsecured with interest
rates ranging from 0.130% to 3.300% perannum at March 31, 2018
¥

2018

2,440

2017

¥

110

25
1,145
3,610

Thousands of
U.S. dollars
2018
$

117

¥

2,477
2,704

23,019236$

10,802
34,057At March 31, 2018, the Company and certain subsidiaries had unsecured overdraft
agreements with 11 banks. Under the agreements, the Company and the subsidiaries wereentitled to withdraw up to ¥43,910 million ($414,245 thousand). The Company and thesubsidiaries were not obligated to pay commitment fees on the unused portions of theoverdraft facilities.
At March 31, 2018 and 2017, long-term debt consisted of the following:

Millions of yen

2017

Thousands of
U.S. dollars
2018

¥

5,883

10,015$55,500¥10,6251,268
4,000
21,776(7,917)
13,859 ¥

11,344
1,525
3,584
26,468(1,481)
24,987 $100,236
11,962
37,736
205,434(74,689)
130,745

2018
Zero coupon convertible bonds due October
2018, including unamortized premium ( ¥3million ($28 thousand) at March 31, 2018)
Loans from government agencies and banks,
repayable due through 2023, with interest
rates ranging from 0.810% to 1.400% perannum at March 31, 2018:
SecuredUnsecured
Capitalized lease obligations
Less current portion¥

At March 31, 2018, the current conversion price of zero coupon convertible bonds due
in 2018 was ¥1,463 ($14) per share and was subject to adjustment in certain circumstances,including in the event of a stock split. At March 31, 2018, the number of shares of common
stock necessary for conversion of all convertible bonds outstanding was approximately 4 million.
At March 31, 2018 and 2017, respectively, the following assets were pledged as collateral for
certain long-term debt:

Note: * Fair value was measured at the reasonable estimated value based principally on a real estateappraisal or property tax bases.
Profit and loss recorded for rental properties for the fiscal years ended March 31, 2018 and 2017
were as follows:

2018
1,599
412
1,187

Thousands of
U.S. dollars
2018$ 15,085
3,887
11,198Millions of yen

Thousands of
U.S. dollars
2018

5,007
1,506
1,330
1,133

$

2018
Land
Buildings and structures
Cash and deposits
Shares of subsidiaries and associates
Long-term loans receivable fromsubsidiaries and associates

¥

10

2017

¥

5,169
1,778
1,611
1,133
10

47,236
14,20812,547
10,68994

17

Annual Report 2018
The aggregate annual maturities of long-term debt as of March 31, 2018 were as follows:Year ending March 31,
2019
2020
2021
2022
2023
Thereafter

Millions of yen
¥
7,914
2,547
1,570
1,405
7,937
400
¥
21,773Thousands of U.S.
dollars$
74,661
24,02814,811
13,25574,877
3,774$
205,406

10. Commitment line Agreement
Consolidated subsidiary Kanto Transportation Co., Ltd. had a commitment line agreement of¥1,000 million ($ 9,434 thousand) as of March 31, 2018 to ensure its access to financing. At March
31, 2018, there were no borrowings under this agreement.

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

Millions of yen

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

2018
¥
—
725
9,900
¥ 10,625

¥
¥

2017

—
650
10,625
11,275

Thousands of
U.S. dollars
2018
$
—
6,840
93,396$ 100,236

12. Employee Retirement Benefits
The Company and its subsidiaries have mainly unfunded defined benefit plans with rules andregulations determined by each subsidiary. In addition, some subsidiaries have Smaller Enterprise
Retirement Allowance Mutual Aid or Specific Retirement Allowance Mutual Aid.
Other subsidiaries have funded defined benefit plans. One company belongs to a comprehensive
employees’ pension fund for the defined benefit corporate pension plan. One company has
established a retirement benefit payment trust. Some of the consolidated subsidiaries have joined amulti-employer welfare pension fund plan. Those for which it is impossible to calculate in a rationalmanner the amount of the pension assets which corresponds to the amount of the contributions
are accounted for in the same way as the defined contribution pension plan. The retirement benefit
obligation of certain subsidiaries was calculated using the simplified method as permitted by theaccounting standard for employee retirement benefits.
As of and for the year ended March 31, 2018 and 2017, defined benefit plans, including plans
applying the simplified method were as follows:i) Movement in retirement benefit obligation:

At the beginning of year
Service cost
Interest cost
Actuarial differences
Benefits paid
Past service cost
OthersAt the end of year

Thousands ofMillions of yen
U.S. dollars
2018
2017
2018
¥ 79,920 ¥ 78,425 $ 753,962
4,358
4,293
41,113
182
180
1,717
450
73
4,245
(3,527)(3,320)(33,273)
(94)
270
(887)
86
(1)
812
¥ 81,375 ¥ 79,920 $ 767,689ii) Movements in plan assets:

Thousands of
U.S. dollars
2018
2017
2018
¥
6,416 ¥
8,044 $ 60,528
242(1,492)
2,283
2
3
19
(88)
(139)
(830)
¥
6,572 ¥
6,416 $ 62,000
Millions of yen

At the beginning of year
Actuarial differences
Contributions paid by the employer
Benefits paid
At the end of yeariii)Reconciliation from retirement benefit obligation and plan assets to employee retirement benefit
asset or liability:

18

Thousands of
U.S. dollars
2018

Millions of yen

Funded retirement benefit obligation
Plan assets¥

Unfunded retirement benefit obligation
Net employee retirement benefit liability
Employee retirement benefit liability
Employee retirement benefit asset
Net employee retirement benefit liability

2018

6,921 ¥
(6,572)
349
74,45474,80374,803—¥ 74,803

2017

6,412 $ 65,292(6,416)(62,000)(4)
3,292
73,508702,39773,504
705,689

73,739705,689(235)—¥ 73,504$ 705,689

iv)Net periodic retirement benefit expenses, including plans applying the simplified method:

Thousands of
U.S. dollars
2017
2018
¥
4,293 $
41,113
180
1,717
1,242
13,500(17)
293¥
5,698 $ 56,623

Millions of yen

Service cost
Interest cost
Amortization of actuarial differences
Amortization of past service cost
Net periodic retirement benefit expenses

2018
4,358
182
1,431
31
¥
6,002
¥

v)Retirement benefit adjustment included in other comprehensive income, before tax effects:

Thousands of
U.S. dollars
2018$(1,170)(11,537)$ (12,707)

Millions of yen

Past service cost
Actual differences
Total balance

2018
2017
¥
(124) ¥
287
(1,223)323¥ (1,347) ¥610

vi)Retirement benefit adjustment in accumulated other comprehensive income, before tax effects:

Thousands of
U.S. dollars
2018

Millions of yen

Past service cost yet to be recognized
Actuarial differences yet to be recognized
Total balance

¥
¥

2018

148
8,347
8,495

¥

2017

272
9,569
9,841

¥

$

1,396
78,74580,141$vii) Plan assets
1. Plan assets comprise:

2018
11%
1%
88%
100%

Cash and cash equivalents
Bonds
Equity securities
Total*

Percent

2017
1%
1%
98%
100%

*99% of total plan assets consisted of assets of a retirement benefit payment trust.
2. Long-term expected rate of return
Current and target asset allocations, historical and expected returns on various categoriesof plan assets have been considered in determining the long-term expected rate of return.
viii) Actuarial assumptions
	The principal actuarial assumptions (expressed as weighted averages):2018
mainly 0.1%
0.0%

Discount rateLong-term expected rate of return2017
mainly 0.1%
0.0%ix) Multi-employer pension plans
Required contributions of multi-employer pension plans, which are accounted for by the same
method as defined contribution pension plans, to welfare pension funds that used for was 51 million
yen for the year ended March 31, 2017.
The funded status of multi-employer pension plans as of March 31, 2017 and 2016

Plan assets
Projected benefit obligation in pension
financing
Difference¥¥

Millions of yen
2017
2016
— ¥
20,733——¥

20,571
162

The ratio of contributions of the Company and its consolidated subsidiaries to total
contributions of multi-employer pension plans as of March 2017 was 16.9%.
(Supplementary explanation)
Gunma Prefecture Truck Pension Fund, which the Company's subsidiary had joined, wasdissolved in March 31, 2017. The Company has omitted the funded status of the related multiemployer pension plans for the year ended March 31, 2017 because this Pension Fund is inliquidation. There is no expected cost to the Company by the dissolution of the Pension Fund.

13. Contingent Liabilities
At March 31, 2018 and 2017, the Seino Group was contingently liable for trade notes endorsed
to affiliates and third parties and for guarantees, including substantial guarantees, principally ofindebtedness of third parties in the aggregate amount of ¥1,302 million ($12,283 thousand) and¥1,256 million, respectively.

14. Lease Commitments
As lessee, the Seino Group has entered into various rental and lease agreements for land andbuildings to be used for truck terminals and warehouses that are generally cancelable with a few
months advance notice, except for certain operating lease agreements. The aggregate minimum
future lease payments for such non-cancelable operating lease agreements, including the imputed
interest portion, as lessee at March 31, 2018 and 2017 were as follows:

Operating leases:
Due within one year
Due after one year

Millions of yen

Thousands of
U.S. dollars
2018

791
1,238
2,029

$

2018
¥
¥

2017

¥

682
1,204
1,886

¥

$

7,463
11,67919,142A certain subsidiary engaged in leasing operations as lessor enters into various lease agreementswith third parties principally for vehicles. The leases are categorized as operating leases. At March
31, 2018 and 2017, the aggregate future minimum lease commitments to be received for such noncancelable lease agreements, including the imputed interest, were as follows:

Thousands of
U.S. dollars
2018

Millions of yen

Operating leases:
Due within one year
Due after one year

2018
¥
¥

226
383
609

2017

¥

230
410
640

¥

$
$

2,132
3,613
5,745

(a)

(b)

Under the Japanese Corporate Law (the “Law”) and regulations, the entire amount paid for new shares is required
to be designated as common stock. However, a company may, by a resolution of the Board of Directors, designate an
amount not exceeding one half of the price of the new shares as additional paid-in capital, which is included in capitalsurplus.
Under the Law, in cases in which a dividend distribution of surplus is made, 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 capital andlegal earnings reserve must be set aside as additional paid-in capital or legal earnings reserve. Legal earnings reserve is
included in retained earnings in the accompanying consolidated balance sheets.
Under the Law, legal earnings reserve and additional paid-in capital could be used to eliminate or reduce a
deficit by a resolution of the shareholders' meeting. Additional paid-in capital and legal earnings reserve may not be
distributed as dividends. All additional paid-in capital and all legal earnings reserve may be transferred to other capitalsurplus and retained earnings, respectively, which are potentially available for dividends.
At March 31, 2018 and 2017, capital surplus consisted principally of additional paid-in capital. In addition,
retained earnings included legal earnings reserve of the Company in the amount of ¥4,262 million ($40,208 thousand)at March 31, 2018 and 2017.
The maximum amount that the Company can distribute as dividends is calculated based on the non-consolidated
financial statements of the Company in accordance with Japanese laws and regulations.
During the year ended March 31, 2018, the Company paid interim dividends of ¥11 per share, amounting to ¥2,172
million ($19,929 thousand). In addition, at the annual shareholders’ meeting held on June 27, 2018, the shareholders
approved cash dividends of ¥19 per share, amounting to ¥3,805 million ($35,896 thousand). The appropriation had
not been accrued in the consolidated financial statements as of March 31, 2018 as such appropriations are recognizedin the period in which they are approved by the shareholders.

16 Consolidated Statements of Cash Flows
Assets and liabilities of newly consolidated subsidiaries by acquisition
The following is the summary of assets acquired and liabilities assumed through the acquisitionof shares Kanto Transportation Co., Ltd. and its five subsidiaries for the year ended March 31, 2016,
related costs and net payment:

Millions of yen
¥
5,648
8,524
16,636(4,652)(8,289)¥17,867(2,962)¥
14,905Current assets
Noncurrent assets
Goodwill
Current liabilities
Noncurrent liabilities
Acquisition cost
Cash and cash equivalents of newly consolidated subsidiaries
Purchase of shares of subsidiaries resulting in change in scope of consolidation

During the year ended March 31, 2018, stock subscription rights were exercised, and the related
convertible bonds were converted to common stock without any cash settlement. Details of the
movement resulting from the exercise of the stock subscription rights are as follows:

Thousands of
U.S. dollars
2018

Millions of yen
2018

Gain on disposal of treasury stock

¥

1,168

$

11,024

27,86638,89017. Income Taxes
The tax effects of temporary differences that give rise to a significant portion of deferred tax
assets and liabilities at March 31, 2018 and 2017 were as follows:

Millions of yen

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

15. Net Assets

2,954
4,122

Decrease in treasury stock
Decrease in convertible bonds

2018

2017

Thousands of
U.S. dollars
2018¥ 26,085 ¥ 25,629 $ 246,085
619
473
5,839
3,910
3,754
36,887
1,179
1,173
11,123
447
352
4,217
1,412
1,376
13,321
13,404
14,035
126,453
206
224
1,943
3,132
2,896
29,54750,39449,912475,415(15,364)(15,510)(144,944)
35,03034,402
330,471

¥

5,127

5,218

48,3686,225
11,716—
530
23,598
11,432

4,995
11,17981533
22,006
12,39658,726
110,528—
5,000
222,622
107,849¥$

At March 31, 2018 and 2017, deferred tax assets and liabilities were recorded as follows:

Deferred tax assets:
Current
Noncurrent
Deferred tax liabilities:
Noncurrent

Millions of yen

Thousands of
U.S. dollars
2018

5,522
9,466

$

2018
¥

3,556

2017

¥

5,209
9,984
2,797

52,09489,30233,547

In assessing the realizability of deferred tax assets, management of the Seino Group considers whether some
portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent
upon the generation of the future taxable income during the periods in which those temporary differences become
deductible. At March 31, 2018 and 2017, a valuation allowance was provided to reduce deferred tax assets to theextent that the management believed that the amount of the deferred tax assets was not realizable.
The reconciliation for the year ended March 31, 2018 and 2017 were as follows:

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

Percentage of pretax
income
2018
2017
30.2%
30.2%
0.4
(0.2)
2.3
1.2
0.5
(1.4)
4.4
(2.5)
(0.4)
34.5%

0.4
(0.1)
2.3
1.5
(0.3)
(0.4)
4.3
(2.3)
0.6
36.2%

On March 29, 2016, amendments to the Japanese tax regulations were enacted into law. Based on theamendments, the effective statutory tax rate used to measure deferred tax assets and liabilities (expected to besettled or realized on after April 1, 2016) in the fiscal year was changed from the previous rate of 31.5% to 30.2%
for temporary differences excepted to be resolved during the period from April 1, 2016 to March 31, 2018 andto 30.2% for temporary differences excepted to be resolved on or after April 1, 2018. Due to these changes instatutory income tax rates, net deferred tax assets (after deducting the deferred tax liabilities) decreased by ¥137
million as of March 31, 2016, deferred income tax expense recognized for the fiscal year ended March 31, 2016
increased by ¥276 million, evaluation differences of other securities increased by ¥211 million and accumulated
adjustments for employee retirement benefits decreased by ¥72 million.
Since amendment to the Japanese tax regulations were enacted into law on November 18, 2016, thestatutory tax rate utilized for the measurement of deferred tax assets and liabilities in the years ended March 31,2017 changed from the years ended March 31, 2018.

18. Comprehensive Income
Amounts reclassified to net income (loss) in the current period that were recognized in othercomprehensive income in the current or previous periods and the tax effects for each component ofother comprehensive income for the years ended March 31, 2018, 2017 and 2016 were as follows:19Annual Report 2018
Thousands of
U.S. dollars
2018

Millions of yen

2018
2017
2016
Net unrealized gains on availablefor-sale securities:
Increase (decrease) during the year
¥ 4,795 ¥ 1,305 ¥ (2,032) $ 45,236
(292)
(34)
(1)
(2,755)
Reclassification adjustments
Subtotal, before tax
4,503
1,271
(2,033)
42,481(1,359)(324)
709(12,821)Tax effectSubtotal, net of tax
3,144
947
(1,324)29,660Foreign currency translation adjustments:
Increase (decrease) during the year
Reclassification adjustments
Subtotal, before tax
Tax effectSubtotal, net of tax

24
—
24
—
24

(63)
—
(63)
—
(63)

(139)
—
(139)
—
(139)

227
—
227
—
227

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

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

(1,826)
1,216
(610)
216
(394)

(8,425)365(8,060)2,782(5,278)(1,132)
13,83912,707(4,330)
8,377

(44)
(13)
(6)
(5)
(50)
(18)
440 ¥ (6,759) $

(311)
(19)
(330)
37,934

Shares of other comprehensive incomeof affiliates accounted for using equity
method:Decrease during the year
(33)
(2)
Reclassification adjustments
Subtotal(35)¥ 4,021 ¥Total other comprehensive income

19. Business Combinations
For the year ended March 31, 2017
Stock-for-stock exchange agreements with the subsidiaries
On March 4, 2016, the Company entered into stock-for-stock exchange agreements with a subsidiary,
Toyota Home Gifu Co., Ltd., in order to increase the Company’s equity share in the subsidiary to 100%.
In accordance with this agreement, on April 1, 2016 (the stock-for-stock exchange date), the Company
reissued 35,925 shares of treasury stock at various exchange rates representing a certain number of sharesof the Company’s common stock (see below) for one share of common stock to the respective minority
shareholders of the subsidiary. The acquisition cost of the acquired companies was ¥41 million.
Details of the stock-for-stock exchange transactions with the subsidiaries were as follows:

Toyota Home Gifu Co., Ltd.

Exchange rate representing the number of sharesof common stock of the Company for one share ofcommon stock of the subsidiary(shares)359.25The Company applied ASBJ Statement No. 21, “Accounting Standard for Business Combinations,”
revised on September 13, 2013, and ASBJ Guidance No. 10, “Guidance on Accounting Standard forBusiness Combinations and Accounting Standard for Business Divestitures,” revised on September 13,
2013, and treated them as business transactions under common control.
For the year ended March 31, 2016
Stock-for-stock exchange agreements with the subsidiaries
On February 17, 2015, the Company entered into stock-for-stock exchange agreements with six
subsidiaries, Seino Super Express Co., Ltd., Seino Sangyo Co., Ltd., Seino Family Co., Ltd., Seino Tsu-un
Transportation Co., Ltd., Suito Travel Co., Ltd. and Seino Engineering Co., Ltd., in order to increase
the Company’s equity shares in the subsidiaries to 100%. In accordance with these agreements, on April
1, 2015 (the stock-for-stock exchange date), the Company reissued 2,457,806 shares of treasury stock atvarious exchange rates representing a certain number of shares of the Company’s common stock (see below)
for one share of common stock to the respective minority shareholders of each of the six subsidiaries. The
acquisition cost of the acquired companies was ¥3,190 million.
(1)	Details of the stock-for-stock exchange transactions with the subsidiaries were as follows:

Seino Super Express Co., Ltd.
Seino Sangyo Co., Ltd.
Seino Family Co., Ltd.
Seino Tsu-un Transportation Co., Ltd.
Suito Travel Co., Ltd.
Seino Engineering Co., Ltd.

20

Exchange rate representing the number of sharesof common stock of the Company for one share ofcommon stock of the subsidiaries(shares)
0.054
2.020
2,662.580
56.97029.94017.350(2)	Changes in the portion held by the Company in connection with the transactions with noncontrolling interests① Main reason for changes in capital surplus
		 Additional acquisition of subsidiary’s shares② 	Increase in capital surplus due to transactions with non-controlling interests		 ¥5,508 million
The Company applied ASBJ Statement No. 21, “Accounting Standard for Business Combinations,”

revised on September 13, 2013, and ASBJ Guidance No. 10, “Guidance on Accounting Standard forBusiness Combinations and Accounting Standard for Business Divestitures,” revised on September 13,
2013, and treated them as business transactions under common control.
Acquisition for the shares of Kanto Transportation Co., Ltd.
On May 13, 2015, the Board of Directors determined that the Company purchase all of the shares of
Kanto Transportation Co., Ltd. from a fund managed by Polaris Capital Group Co., Ltd. through a fifty-fifty
joint venture for investment by the Company and a limited partnership for investment managed by Karita
and Company, Inc. etc., of which Development Bank of Japan Inc. was the single limited partner and withregard to which the Company signed a Share Purchase Agreement on the same date.
(1) General description of business combination① Name of the absorbed business and its description
		 Name of business: KSK Holdings Co., Ltd.
		Business description: Joint venture for purchasing shares of Kanto Transportation Co.,Ltd.
② Name of the absorbed business and its description		Name of business: Kanto Transportation Co., Ltd. and its five subsidiaries.
		 Business description: Transportation services(2) Main reason for business combination
To improve company performance and increase enterprise value by acquiring a second
general transportation business concern. The Company has added a cold chain for which the
expansion rate is high and obtained a transportation network that utilizes ordinary, chillingand freezing temperatures, creating new value and advancing our transportation services.
(3) Date of business combination
June 30, 2015(4) Legal form of business combination
Share acquisition(5) Acquired voting rights① KSK Holdings Co., Ltd.: 50%② Kanto Transportation Co., Ltd. and its five subsidiaries: 50%(6) Additional acquisition of shares in acquired company
Acquisition cost and consideration paid
① KSK Holdings Co., Ltd.
		 Consideration paid for acquisition: Cash ¥ 4,911 million② Kanto Transportation Co., Ltd. and its five subsidiaries
		 Consideration paid for acquisition: Cash ¥ 17,867 million(7) Main acquisition related costs
Fees paid : 47 million(8) Amount of goodwill and amortization method and period① Amount of goodwill: 16,636 million
Amortization method and period: Straight-line amortization over 15 years②	(9)	Asset acquired and liabilities assumed as of the date of the business combination

Millions of yen
¥
5,649
8,525
¥
14,174Current assets
Noncurrent assets
Total assets
Current liabilities
Noncurrent liabilities
Total liabilities

¥
¥

4,652
8,289
12,941

Common control transaction
On January 1, 2016, two consolidated subsidiaries KSK Holdings Co., Ltd. and Kanto Transportation
Co., Ltd. merged.
(1) General description of business combination① Combined Business		 Name of business: KSK Holdings Co., Ltd.
		Business description: Joint venture for purchasing shares of Kanto Transportation Co.,Ltd.
② The Combined Business		Name of business: Kanto Transportation Co., Ltd. and its five subsidiaries.
		 Business description: Transportation services(2) Date of business combination
January 1, 2016
(3) Legal form of business combination
Absorption-type merger
Surviving company: KSK Holdings Co., Ltd.
Merged company: Kanto Transportation Co., Ltd.
(4) Name after business combination
Kanto Transportation Co., Ltd. ( January 1, 2016, change of trade name from“KSK Holdings Co., Ltd.”)
The Company applied ASBJ Statement No. 21, “Accounting Standard for Business Combinations,”
revised on September 13, 2013, and ASBJ Guidance No. 10, “Guidance on Accounting Standard forBusiness Combinations and Accounting Standard for Business Divestitures,” revised on September 13,
2013, and treated them as business transactions under common control.

20. Subsequent Events
Transfer of noncurrent asset
Seino Transportation Co., Ltd., a consolidated subsidiary of the Company, resolved to transfer a noncurrent
asset at Board Directors Meeting held on June 1, 2018.
(1) Reason for the transfer
To effectively utilize the Company’s resources, Seino Transportation Co., Ltd. resolved to sell the land.
(2) Details of asset to be transferred

Description of asset
Address
Area of land
Gain on transfer
Current status

Land: former Tokyo branch office2-8-13 Shiomi, Koto, Tokyo
36,880.90m 2
Approx. ¥16 billion ($151 million)
Office and rent(3) Outline of purchasing entity
Based on an agreement with the transferee, the name of the transferee and the transfer price may

not be disclosed. There is no capital relationship, personal relationship, transactional relationshipor situation by which the transferee could be seen as a related party between the Company and thetransferee or between Seino Transportation Co., Ltd. and the transferee which is required to bedisclosed.
(4) Schedule

Date of Board of Directors Meeting
Date of contract
Date of transfer of property

June 1, 2018
June 14, 2018
September 2019 (planned)(5) Effect on income or loss
The Company plans to post ¥16 billion ($151 million) arising from this transfer of a noncurrent
asset under extraordinary income in the consolidated financial statements for the fiscal year ending
March 31, 2020.
Equity method affiliates through shares acquisition
The Company decided to conclude a capital and business alliance contract with Hankyu
Hanshin Holdings, Inc. and HANKYU HANSHIN EXPRESS Co., Ltd. on December 25, 2017.
The Company paid for the third-party allocation of new shares pursuant to this contract on March
30, 2018. The Company acquired 34.01% of HANKYU HANSHIN EXPRESS Co., Ltd.’s shares,
making the Company an equity method affiliate for the fiscal year ending March 31, 2019.
(1) Purpose of the capital and business allianceThis capital and business alliance is intended to build and strengthen a long-term partnershipto complement each other and to provide new services to customers. The Company expects thiscontract to provide sustainable growth both domestically and abroad and expand the client base byadding new value provided by the know-how and client and business locations of both companies.
(2) Name and business of company purchasing shares
Name: HANKYU HANSHIN EXPRESS Co., Ltd.
Business: freight forwarding, customs clearing, warehousing, road freight, import/export agency,
medical equipment manufacturing(3) Stock acquisition date
April 1, 2018
Abolition of severance indemnity plans for directors and corporate auditors and termination payments
The Board of Directors meeting held on May 11, 2018, determined to abolish the severance
indemnity plans for directors and corporate auditors at the end of the Company’s 97th Annual
General Meeting of Shareholders on June 27, 2018. The Company’s 97th Annual General Meetingof Shareholders on June 27, 2018, approved this determination.
(1) Reason for abolition
The review of executive remuneration for directors and auditors(2) Date of abolition
The end the Company’s 97th Annual General Meeting of Shareholders on June 27, 2018(3) Termination payment
The Company will continue to pay directors’ and auditors’ retirement allowances for their terms ofservice upon retirement until the abolition of this system.
(4) Impact on consolidated profit or loss
The impact on business performance and consolidated profit or loss is minor.
Introduction of a Stock Compensation Plan for Directors
The Company’s 97th Annual General Meeting of Shareholders on June 27, 2018 passed a resolution
to introduce a Board Benefit Trust (“BBT”), the details of which were determined by the Board of
Directors meeting held on May 11, 2018.
1. Background and Purpose
The objective in introducing the Plan is to focus the Eligible Directors’ mindset towards enhancing
the medium- to long-term corporate value of the Company by clarifying the link between thecompensation of the Eligible Directors and the Company’s share value so that Eligible Directors
share with the shareholders not only the benefits of rising share prices, but also the risks associatedwith falling shares.
2. Amount of compensation, etc., and reference information related to the Plan
(1) Overview of the Plan
The Plan is a stock compensation plan in which the Company’s shares are acquired through a trust
set up by the plan (the “Trust”) using funds contributed by the Company as capital and the acquired
shares and money in the amount equivalent to the value of the Company’s shares converted at market
value (the “Company’s Shares, Etc.”) are granted to Eligible Directors through the Trust pursuant topredetermined Rules on Stock Benefits for Directors. In principle, the Company’s Shares, Etc. areprovided to Eligible Directors at the time of retirement.
(2) Beneficiaries of the Plan
Directors (excluding outside directors)(3) Trust period
The trust period is from August 27, 2018 until the Trust terminates. (The Trust will continue
without an established termination date for as long as the Plan exists. The Plan will terminate if theCompany’s shares are delisted or the Rules on Stock Benefits for Directors are abolished or for othersuch reasons.)(4) Amount of trust (amount of compensation, etc.)
The Company shall introduce the Plan for the three-year period from the fiscal year ending March
31, 2019 to the fiscal year ending March 31, 2021 (the “Initial Target Period”) and for each threeyear fiscal period (“Target Period”) commencing after the Initial Target Period and shall contributethe following amount to the Trust as capital for the Trust to acquire the Company’s shares in orderto grant the Company’s Shares, Etc. to Eligible Directors.
Firstly, the Company shall, upon establishing the Trust, contribute a maximum of ¥360 million ($3,396
thousand) as capital necessary in the Initial Target Period. After the Initial Target Period, theCompany shall contribute an additional maximum amount of ¥360 million ($3,396 thousand) to theTrust for every subsequent Target Period, in principle, until the termination of the Plan. However, if
an additional contribution is to be made and there are Company’s shares (excluding the Company’s
shares equivalent to the number of points granted to Eligible Directors but not yet delivered to themwith respect to each Target Period until the most recent Target Period) and money remaining as
Trust’s assets (the “Residual Shares, Etc.”), the sum of the amount of the Residual Shares, Etc. (withCompany’s shares calculated by book value as of the last day of the preceding Target Period) andthe additional contribution must be within ¥360 million ($3,396 thousand). During a Target Period,
the Company may contribute funds to the Trust multiple times until the accumulated amountcontributed reaches the maximum amount. The Company will conduct timely and proper disclosure
when a decision for additional contributions is made.
(5) Method of acquiring the Company’s shares and the number of shares to be acquired
The Company’s shares shall be acquired by the Trust through the stock market or the purchase of
disposed treasury shares of the Company using the funds contributed by the Company as describedin (4) above as capital, and new shares will not be issued. Accordingly, the total number of issued
shares of the Company will not increase, and no dilution will occur when the Trust acquires theCompany’s shares. In the Initial Target Period, a maximum of 120 thousand shares shall be acquired
without delay after the establishment of the Trust. Details of the acquisition of the Company’s sharesby the Trust will be disclosed in a timely and proper manner.

(6) Calculation method for number of the Company’s Shares, Etc.
For the Shares, Etc., to be granted to Eligible Directors for each fiscal year, Eligible Directors shallbe granted a certain number of points to be determined in consideration of their positions and thelike in accordance with the Rules on Stock Benefits for Directors. The total amount of points per
fiscal year granted to Eligible Directors is up to 40 thousand points. The Company has taken into
consideration the level of compensation current Directors receive, fluctuations in and prospects
regarding the number of Eligible Directors and other such matters and has deemed the decision
reasonable. The points granted to Eligible Directors shall be exchanged at a rate of one share of
the Company’s common stock for one point when granting the Company’s Shares, Etc. as set forthin (7) below. In the event that the Company conducts a stock split, allotment of shares without
consideration, stock consolidation or the like with respect to its shares after the approval of this
Proposal, then based on the ratio resulting from the stock split, etc., reasonable adjustments shallbe made to the maximum number of points to be granted and already granted or to the ratio of
exchange). The number of points, which will be the basis for determining the Company’s Shares,
Etc. to be granted to an Eligible Director as stated in (7) below, will be the total number of points
granted to the Eligible Director up to the time of retirement in principle (“Final Number of Points”).
(7) Grant of the Company’s Shares, Etc.
In principle, if an Eligible Director retires and fulfills the beneficiary requirements stated in theRules on Stock Benefits for Directors, then by completing the prescribed procedures for thedetermination of beneficiaries, the Eligible Director shall be granted from the Trust, the Company’s
shares in the number equivalent to his or her Final Number of Points determined as stated in (6)above after his or her retirement. However, if the requirements set forth in the Rules on Stock
Benefits for Directors are satisfied, a certain percentage of the points must be converted to cash
equivalent to the market value of the Company’s shares in place of granting those shares. To prepare
for the payment in cash, sales of the Company’s shares through the Trust may occur.
(8) Exercise of voting rights
The Trust shall uniformly refrain from exercising the voting rights for the shares of the Company
held in the Trust’s account in accordance with instructions of the trust administrator. In this way, theTrust aims to ensure its neutrality towards the Company’s management with regard to the exercise of
the voting rights for the shares of the Company held in the Trust’s account.
(9) Handling of dividends
Dividends associated with the Company’s shares within the Trust’s account shall be received by
the Trust and allocated to the capital for the acquisition of the Company’s shares and Trust feesto be paid to the trustees of the Trust, among others. Dividends that remain as Trust assets upon
termination of the Trust, in accordance with the Rules on Stock Benefits for Directors, shallbe contributed to a group that does not have any interest in the Company or in the Company’s
Directors or shall be divided among the Eligible Directors in office at that time in proportion totheir respective points.
(10) Procedures upon termination of the Trust
The Trust will terminate in certain circumstances, such as when the Company’s shares are delisted orwhen the Rules on Stock Benefits for Directors are abolished. Any shares of the Company remaining
as Trust’s assets upon termination of the Trust shall be acquired by the Company without charge
and cancelled by a resolution of the Board of Directors. Any money remaining as Trust assets upon
termination of the Trust shall be paid to the Company after deducting any amount to be contributed
to a group or paid to Eligible Directors pursuant to (9) above.
3. Details of the Trust

Name
TrustorTrustee (Re-Trustee)
Beneficiaries

Trust administrator
Type of trust
Date of trust agreement
Date on which cash is to betransferred to the trust
Trust term

Board Benefit Trust (BBT)The Company
Mizuho Trust & Banking Co., Ltd.
Trust & Custody Services Bank, Ltd.
Person(s) who meet the beneficiary
requirements set out in the rules on
the distribution of shares to executive
officers from among retired Directors.
A third person who has no conflictof interest with the Company will beselected.
Money trust other than a specified
money trust for separate investment(third-party benefit trust).
August 27, 2018
August 27, 2018
From August 27, 2018 until termination of
the trust (a specific date of termination is not
set, and the trust will continue for as long as
the system remains in place).

4. Disposal of treasury shares through third-party allocation.
The Company determined the following disposal of treasury shares through third-party
allocation related to its treasury shares, which was resolved at the Board of Directors'
meeting held on August 10, 2018.
(1) Outline of disposal(1)Date of disposal(2)Number of shares disposed(3)Disposal price(4)Total disposal amount(5)Disposal to(6)Others

August 27, 2018
91,500 shares of common stock¥1,982 ($19) per share¥181,353 thousand ($1,711 thousand)Trust & Custody Service Bank, Ltd.
(Trust E)
The Disposal of treasury shares is
executed when a notification is filed
pursuant to the Financial Instruments
and Exchange Act of Japan.

(2) Purpose of and reason for the disposal
The disposal of treasury shares is intended to dispose of the treasury shares of theCompany through allocation to Trust & Custody Service Bank, Ltd. (Trust E), (are-trustee entrusted by Mizuho Trust & Banking Co., Ltd., which is the trustee of theTrust), which holds and disposes of the shares of the Company for the operation of the
Plan.

21

Annual Report 2018

21. Segment Information
1.

2.
3.

General information about reportable segments

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

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

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

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

Information about reportable segment for the years ended March 31, 2018, 2017 and 2016 is summarized as follows:

For the year 2018:
Operating revenue:
		External customers
		 Intersegment sales or transfers
			Total operating revenue
Segment income (*2)

Transportation
services¥¥

Segment assets (*3)¥
Depreciation
Amortization of goodwill
Investments in affiliates accounted
for using the equity method
Increase in tangible and intangible
fixed assets
For the year 2017:
Operating revenue:
		External customers¥
		 Intersegment sales or transfers
			Total operating revenue¥
Segment income (*2)
Segment assets (*3)¥
Depreciation
Amortization of goodwill
Investments in affiliates accounted
for using the equity method
Increase in tangible and intangible
fixed assets
For the year 2016:
Operating revenue:
		External customers¥
		 Intersegment sales or transfers
			Total operating revenue¥
Segment income (*2)
Segment assets (*3)¥
Depreciation
Amortization of goodwill
Investments in affiliates accounted
for using the equity method
Increase in tangible and intangible
fixed assets
For the year 2018:
Operating revenue:
		External customers
		 Intersegment sales or transfers
			Total operating revenue
Segment income (*2)

Vehicle sales

Merchandise
sales

Real estateleasing services

Other (*4)

443,168 ¥2,046
445,214
20,965 ¥103,342 ¥9,606
112,948
4,922 ¥

31,575 ¥20,62952,204810 ¥Millions of yen
1,599 ¥
16,446 ¥—12,717
1,599
29,163
1,239 ¥
921 ¥

468,428 ¥
15,6541,150

118,103 ¥1,918
1

15,590 ¥38—

13,484 ¥
62
—

3,052

46

—

20,152

2,930

422,870 ¥
1,975
424,845
20,020 ¥447,153 ¥
14,993
1,109

Total

Adjustments(*1)

Consolidated

596,130 ¥44,998641,128
28,857 ¥— ¥(44,998)(44,998)(978) ¥

596,130—
596,130
27,87944,569 ¥446
14660,174 ¥18,1181,165(31,111) ¥(343)—

629,063
17,775
1,165

—

—

3,098

(3)

3,095

92

458

1,444

25,076(373)

24,703

100,237 ¥
8,665
108,902
5,055 ¥
110,482 ¥
1,861—

27,749 ¥19,62147,370766 ¥
14,490 ¥42—

1,543 ¥—
1,543
1,279 ¥
13,153 ¥54—

15,140 ¥10,09325,233728 ¥
41,506 ¥363—

567,539 ¥
40,354
607,893
27,848 ¥626,784 ¥
17,313
1,109— ¥(40,354)(40,354)(731) ¥
(32,520) ¥(336)—

567,539—
567,539
27,117594,264
16,977
1,109

3,962

—

—

—

—

3,962

(2)

3,960

14,304

4,200

17

257

441

19,219(343)

18,876416,113 ¥
1,730
417,843
19,113 ¥441,635 ¥
14,121
837

94,441 ¥
8,436
102,877
4,926 ¥
107,391 ¥
1,830—

28,029 ¥20,60948,638772 ¥
13,401 ¥38—

1,472 ¥—
1,472
1,228 ¥
13,402 ¥38—

15,402 ¥24,31739,7191,107 ¥
42,561 ¥335—

555,457 ¥
55,092
610,549
27,146 ¥618,390 ¥
16,362837— ¥(55,092)(55,092)(960) ¥
(38,825) ¥(323)—

555,457—
555,457
26,186
579,565
16,039
837

3,675

—

—

297

—

3,972

46,224

Transportation
services

2,605
Vehicle sales

67

Merchandise
sales

360

Real estateleasing services

384
Other (*4)

49,640
Total

(3)
(387)

Adjustments
(*1)

3,969
49,253
Consolidated

Thousands of U.S. dollars
15,085 $ 155,151 $ 5,623,868 $— $ 5,623,868—
119,972
424,509(424,509)—
15,085275,123
6,048,377(424,509) 5,623,868
11,689 $8,689 $ 272,236 $(9,226) $ 263,010$ 4,180,830 $ 974,925 $
19,302
90,6224,200,132
1,065,547$ 197,783 $
46,434 $297,877 $
194,613492,490
7,641 $

Segment assets (*3)
$ 4,419,132 $ 1,114,179 $Depreciation
147,679
18,094
Amortization of goodwill
10,84910Investments in affiliates accounted
for using the equity method
28,792
434
Increase in tangible and intangible
190,11327,641
fixed assets

147,076 $359—

127,208 $
585
—

—

—

—

29,226(28)

29,198868

4,321

13,623

236,566(3,519)233,047

420,462 $ 6,228,057 $ (293,500) $ 5,934,557
4,208
170,925(3,236)167,689
132
10,991—
10,991

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

(Related information)
1. Information about products and services
The Company has not disclosed information about products and services here because the Company has disclosed the same information above.
2. Information about geographic areas(1) Operating revenue
The Company has omitted the disclosure of operating revenue by geographic area because operating revenue to external customers in Japan accounts
for more than 90% of the amount of operating revenue reported in the consolidated statements of income.
(2) Property and equipment
The Company has omitted the disclosure of property and equipment by geographic area because property and equipment in Japan account for morethan 90% of the amount of property and equipment reported in the consolidated balance sheets.
3. Information about major customers
The Company has not disclosed information about major customers because no customer contributed 10% or more to operating revenue in the
consolidated statements of income.
4. Information on impairment loss by reportable segments:
Impairment loss:
For the year 2018
For the year 2017
For the year 2016
Impairment loss:
For the year 2018
5.

Transportation
services

100 ¥
19
39

22 ¥
202
35

$

943 $

208 $

Thousands of U.S. dollars
— $
651 $

Transportation
services¥

3

1,109 ¥
14,695

Other

Total

14,081

— ¥

— ¥

— ¥

— ¥

1,109

4

—

—

—

14,699

— ¥

— ¥

— ¥

— ¥

837

15,804————

Transportation
services

Vehicle sales

Merchandise
sales

Real estateleasing services

837 ¥10,849 $Thousands of U.S. dollars
10 $
— $
— $

131,632

29——

Vehicle sales

Merchandise
sales

Real estateleasing services

Information on gain on negative goodwill by reportable segments:

Gain on negative goodwill:
For the year 2018

1,802

125

$

13,953

— $

—

¥

1 ¥

Millions of yen
— ¥

191
221
446

—

¥

1,150 ¥

Real estateleasing services

— ¥
—
—

1,165

As of March 31, 2018:
Balance of goodwill

Gain on negative goodwill:
For the year 2018
For the year 2017
For the year 2016

Merchandise
sales

Total

14 ¥

As of March 31, 2016:
Balance of goodwill
For the year 2018:
Amortization of goodwill

Vehicle sales

Other

— ¥

As of March 31, 2017:
Balance of goodwill
For the year 2016:
Amortization of goodwill

Real estateleasing services¥

As of March 31, 2018:
Balance of goodwill
For the year 2017:
Amortization of goodwill

Merchandise
sales

Millions of yen
— ¥
69 ¥
—
—
—
372

Information on goodwill by reportable segments:
For the year 2018:
Amortization of goodwill

6.

Vehicle sales

Transportation
services

¥

— ¥
—
1

Transportation
services

$

— $

— ¥
—
24
Vehicle sales

Millions of yen— ¥——Merchandise
sales

Other

Real estateleasing services

Thousands of U.S. dollars
— $
— $
— $

Total

132 $
1,179
Other

— ¥
—
—

15,804

10,991
132,840
Total

63 ¥
—
—
Other

594 $

63
—
25
Total

594

23

Annual Report 2018

Report of Independent Auditors
Independent Auditor’s Report
To the Board of Directors of
SEINO HOLDINGS CO., LTD.:
We have audited the accompanying consolidated financial statements of SEINO HOLDINGS CO., LTD. (the “Company”) and its
subsidiaries, which comprise the consolidated balance sheets as at March 31, 2018 and 2017, and the consolidated statements of income,statements of comprehensive income, statements of changes in net assets and statements of cash flows for each of the years in the three-year
period ended March 31, 2018, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting
principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits inaccordance with auditing standards generally accepted in Japan. Those standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.
The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation andfair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, while
the objective of the financial statement audit is not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company and its
subsidiaries as at March 31, 2018 and 2017, and their financial performance and cash flows for each of the years in the three-year period ended
March 31, 2018, in conformity with accounting principles generally accepted in Japan.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2018 are presented
solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has
been made on the basis described in Note 1 of the Notes to Consolidated Financial Statements.

September 28, 2018
Nagoya, Japan

24

Seino GroupThe Seino Group consists of Seino Holdings Co., Ltd. and 76 consolidated subsidiaries and 21 affiliates. The Seino
Group operates in five business segments: transportation services, vehicle sales, merchandise sales, leasing for realestate services and other services. The business relationship in the Seino Group is as follows.

Clients
Collection and
Delivery

VehiclesSales and Repairs

Sales

Services

Real Estate
Leasing

Domestic Transportation

Vehicle Sales

Merchandise Sales

Leasing for Real Estate

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

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

Seino Trading Co., Ltd. *1
Seino Sangyo Co., Ltd. *1*1
Seino Commercial(Shanghai) Co., Ltd.

Seino Transportation Co., Ltd.
OthersMarchandise
sales

Information Services

VehicleSales

Seino Information
Service Co., Ltd.

*1

Japan Logistics
Development Co.,
Ltd.

*1

International Transportation
Seino Logix Co., Ltd.

Others*1

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

*1

Seino Saha Logistics Co., Ltd. *1

PT Seino Indomobil Logistics Services *1
Schenker-Seino Co., Ltd.
Entsu Logistics Co., Ltd.

*2
*2

PT Seino Indomobil Logistics *2

SIRACHA TRANSPORT CO., LTD.
Box Charter Co., Ltd.
Cosmo Hokuriku Haiso Center Co., Ltd.
Gifu Truck Kogyo Co., Ltd.
Aishin Sangyo Co., Ltd.
Ogaki School Lunch Support Co., Ltd.
INTENTS Inc.

Leasing forReal Estate Services*1
Asahi Agency Co., Ltd. (Advertising agency)
Suito Travel Co., Ltd. (Passenger transportation, Travel agency) *1*1Seino Engineering Co., Ltd. (Construction)*1
Seino Family Co., Ltd. (Insurance agency service)*1
Seino Staff Service Co., Ltd. (Personnel service)*1
Toyota Home Gifu Co., Ltd. (Housing sales)*1Asahi Create Co., Ltd. (Comprehensive printer)
Seino Business Support Co., Ltd. (Business support services) *1*1
Seino Ecotrading Inc. (Wholesale of recycled resources)
Nihon Oroshiuri Shiire Network Co., Ltd. (Collection agency) *1
Seino Financial Co., Ltd. (Settlement service representative) *1*1
Shin-ota Taxi Co., Ltd.
*1
Kani Taxi Co., Ltd.
*1
Tajimi Taxi Co., Ltd.
*1
Shorei Fit Co., Ltd.
*1
Seino Maintech Co., Ltd.
Toyota Rent-A-Lease Gifu Co., Ltd. (Rental and lease)
Gifu Automotive Dealer Plaza Co., Ltd. (Rental office)

OthersTransportation
Services

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

76
7
14

25

Annual Report 2018Year Ended March 31,2018

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