Seino Transportation Co., Ltd.
Annual Report 2002
Year Ended March 31, 2002

Profile
Seino Transportation Co., Ltd. (the “Company”) was founded
as a trucking company in 1930 and incorporated under its
current name in 1946. It is now based in Ogaki in central
Japan. Capitalizing on a growing Japanese market and theemergence of an extensive domestic expressway network,
Seino has developed steadily into one of the nation's leading
trucking companies.
With customer care as its first priority, the Company
aggressively expanded and improved its network, and now

Contents
Financial Highlights ………………………………………… 1
To Our Shareholders, Customers and Friends……………… 2

encompasses 173 domestic bases as ofConcentrating Management Resourses on

March 31, 2002. Overseas, the Company

LTL Commercial Cargo Transportationtransferred the operations for the— Pursuit of LTL No.1 Plan — ………………………… 4

international forwarding division to

Review of Operations ……………………………………… 8

Schenker-Seino Co. Ltd., which was

Financial Review ……………………………………………10

established through a joint venture with

Six-year Summary ……………………………………………11

Stinnes AG, headquartered in Mulheim

Consolidated Balance Sheets ………………………………12

an der Ruhr, Germany, and is effectively

Consolidated Statements of Operations …………………13

utilizing both a global network and a superb IT system toexpand the business.
To further provide customers with satisfying services as aleading company, the Seino Group designated Less-thanTruck-Load (LTL) commercial freight transportation for thedomestic market as its groupwide core business, and will
focus management resources in this area accordingly. Seino is
pursuing a strategy that entails forming alliances with othertransportation companies to compensate for weaknesses
while concurrently enhancing its core strengths. Using thisstrategy, Seino Transportation will pursue the “Road to
Success” to construct a new transportation model for the 21st
century and become a highly profitable company.

Consolidated Statements of Shareholders’ Equity ………14
Consolidated Statements of Cash Flows …………………15
Notes to Consolidated Financial Statements ……………16
Report of Independent Accountants ………………………23
Board of Directors / Corporate Data ………………………24
Seino Group …………………………………………………25
Caution:In this annual report, statements other than historical facts areforward-looking statements that reflect our plans andexpectations. These forward-looking statements involve risks,
uncertainties and other factors that may cause our actual results
and achievements to differ materially from those anticipated inthese statements.

Seino Transportation Co., Ltd. and Consolidated Subsidiaries

Financial Highlights
For the Years March 31, 2002, 2001, 2000, 1999 and 1998
Thousands of
U.S. Dollars*Millions of Yen
2002

2001

2000

1999

1998

2002

For the year:
Operating revenues ...................
Operating income .......................

¥ 418,835
3,543

Income (loss) before income
taxes and minority interests ...
Net income (loss) .......................

¥ 352,595 ¥ 354,255 ¥ 314,773 ¥ 319,500 $3,149,135
895

2,146

1,664

3,016

26,63925,036(28,875)

6,286

7,385

10,948188,241

16,475(18,403)

3,043

2,991

5,381

123,872

20
15

Yen
Net income (loss) per share:-Basic......................................
-Diluted ...................................

¥

U.S. Dollars*

99.59¥ (122.29) ¥20.11 ¥

19.56 ¥

35.18 $

0.75

78.10

(122.29)

16.63

16.10

28.43

0.59
Thousands of
U.S. Dollars*Millions of Yen

10
5
0
-5
-10

At year-end:-15

Cash and cash equivalents,and short-term investments ...

¥ 70,002

Property and equipment, net ofaccumulated depreciation......

236,051

166,898

172,323

187,135

161,910

1,774,820

Total assets ................................

522,753453,250447,304

454,880

431,885

3,930,474

132,851

115,540

96,839106,229

89,898998,880

227,104

201,912220,092

220,792

219,188

1,707,549¥ 32,671 ¥ 130,345 ¥ 130,201 ¥ 118,630 $ 526,331-20

Long-term debt andother long-term liabilities ........
Net assets...................................

Yen
Net assets per share(in the whole yen and dollars)¥ 1,305.54

U.S. Dollars*¥ 1,344.98 ¥ 1,454.49 ¥ 1,443.86 ¥ 1,433.37 $9.82*Note: U.S. dollar amounts are translated at ¥133 = US$1 only for convenience of readers.

1

To Our Shareholders, Customers and Friends

I am pleased to report to our shareholders,investors and friends on the consolidated
financial results of Seino Transportation Co., Ltd.
and its consolidated subsidiaries for the fiscal
year ended March 31, 2002.

Operating Environment
In the fiscal year under review, a general downturn in
the Japanese economy was unavoidable due to such
structural elements as the hollowing out of industry andincreased anxieties concerning employment insecurity
compounded with a rapid downturn in IT-relatedindustries and a slowdown in imports, further
dampening both capital investment and consumer
spending.
Freight movement in the transportation industry
became noticeably less active, while the overabundanceof truck transport companies contributed to a supplydemand imbalance. Moreover, higher costs from safety
management and environmental activities have
hampered operations and resulted in a continuation of
the harsh operating environment of the previous fiscal
year.

Business Results
To address these conditions, Seino worked to regain andimprove Group profitability by reducing costs throughgroupwide streamlining of operations. Additionally, we
positioned the domestic LTL commercial freighttransportation field as our core business, as outlined in
the LTL No. 1 Plan, and are working to expand
operations. Seino's LTL No. 1 Plan is a medium-term
management plan that promotes concentration solely on
LTL handling and adjustment of freight charges toproper levels.
In the removal and small parcel businesses, westrove to raise profitability by augmenting our2capabilities and quality through complementary
relationships with other companies. Examples include
alliances with specialists in each of these two fields andthe establishment of Logiwell Co., Ltd., a joint venturewith a major general trading company, in the third-party
logistics (3PL) field.
Similarly, we set out to reorganize Group operations
to bolster the cohesiveness of the Seino Group, raise
profitability and enhance corporate value. Seino aims to
make the transition to a genuine holding company in thenear future. The first stage of reorganization entailed
establishing Nohi Seino Transportation Co., Ltd., Tokai
Seino Transportation Co., Ltd. and Kanto Seino
Transportation Co., Ltd., which were formerly affiliatedcompanies of the Seino Group, as wholly-owned
subsidiaries. This stage also included increasing equity
ownership to 40% in the automobile dealers Toyota
Corolla Gifu Co., Ltd. and Gifu Hino Motor Co., Ltd.
and incorporating these entities into the scope of
consolidation through a takeover bid.
As a result of the above measures, operating
revenues increased 18.8% to ¥418,835 million(US$3,149 million) and operating income jumped
295.9% to ¥3,543 million (US$27 million) on aconsolidated basis. Consolidated net income was¥16,475 million (US$124 million) due to the occurrenceof ¥18,895 million (US$142 million) in extraordinary
income arising from settlement of the Employees’
Pension Fund.

Management Strategy and Specific Measures
LTL commercial freight transportation services havebeen positioned as the core of the Seino Group's businesssince the Company's inception. To maintain its solid
position as a leading logistics service provider andenhance customer satisfaction with outstanding andreliable services, Seino will continue to focus
management resources on LTL commercial freighttransportation services for the domestic market inparticular, as the core business of the entire Group.

Two key objectives in this effort are to ensure
uniform transportation services of outstanding quality
and centralized transportation information management
throughout the Group by improving and expanding thedomestic network and reorganizing Group companies
by function. As a first step toward strengthening Groupmanagement and establishing a strong consolidated
financial base, the Company entered into stock-forstock exchange agreements with its three affiliates andconsolidated these entities as wholly-owned
subsidiaries. We also increased equity ownership of two
automobile dealers through a takeover bid, making
these companies significant subsidiaries.
In preparation for forming alliances and mergers
with leading companies in the fields of international
forwarding, we plan to spin off removal, small parcel
and chartered truck as independent specializedcompanies. Specifically, on October 1, 2002, we aim toestablish Seino Customs Clearance Service Co., Ltd. asa spin-off company of our customs brokerage division.
In line with pursuing the establishment of both aprofitable earnings structure as well as a management
approach that prioritizes shareholder value, Seino is
endeavoring to increase transparency in disclosure ofdivision earnings, add vitality to the corporate
organizational structure, strengthen core businesses andraise operational efficiency in Group companies.
In addition, to further raise incentive and morale
for improved performance among the Company's
directors, statutory auditors, executive officers anddirectors of consolidated subsidiaries towardmaximizing corporate value, management decided toissue stock options through a new stock option plan.
Through the above measures, Seino will raiseGroup operational efficiency, establish a profitableearnings structure and pursue a shareholder-centered
management approach. For the current fiscal year,
projections call for operating revenues to decline 2.8%
to ¥407,000 million and net income to decrease 33.2%

to ¥11,000 million on a consolidated basis.

Cash Dividend
In line with its basic business policy, the Company
strives to enhance shareholder equity and improve
profitability over the long term, while also paying
regular dividends. For the fiscal year under review, theCompany paid an annual dividend of ¥11.00 (US$0.08)
per share.
Seino established guidelines for buyback oftreasury stock as an aid to improving the Company's
stock price and maximizing shareholder value. The
number of shares purchased will be limited to
8,800,000 at a maximum cost of ¥7.5 billion.
I, and all members of the management team,greatly appreciate the support and encouragement we
receive from the Company's shareholders, customers
and friends as we continue our efforts to respond toshareholder expectations through strengthening of theentire Seino Group.
July, 2002

Yoshikazu TAGUCHI
Chief Executive Officer
Chairman of Board of Directors

3

Concentrating Management Resources on LTL
Commercial Cargo Transportation― Pursuit of LTL No. 1 Plan ―3PL
LogiwellInternational
Transport
Schenker

4

Warehouse & Port
Shibusawa Warehouse

Small Parcel
Keika Express

Warehouse & PortSankyuValue Added Services
Tokyo Nohin Daiko

RemovalArt Corporation

Refrigerated Cargo
Japan Post OfficeCurrently within the transportation industry, thedecline of freight volume amid a trend of transfer ofmanufacturing bases to Mainland China andincreasing streamlining of physical distribution
structures has become an entrenched phenomenon. In
combination with continued declines in unit prices offreight, freight handlers are currently engaged incutthroat competition with one another to stay inbusiness.
Within this intensely competitive industry, Seino
has designated the domestic LTL commercial freighttransportation as its core business. The reason for thismove was that a large portion of the Company's
earnings derive from domestic LTL commercial
freight transportation given its high profitability, andalso because the market for this business field still has
a fair degree of growth potential. Toward this end,
Seino formulated its LTL No. 1 Plan, a new three-year
medium-term management plan being implemented
throughout the Group, which took effect from thefiscal year ending March 31, 2003.

Specializing in LTL Commer cial F r eight
Considering that Seino possesses transportation routes
that link the entire nation via Company offices as wellas an expansive network, it becomes apparent that
LTL commercial freight transportation is Seino's forte.
Seino plans to expand its market share in handlingcommercial freight of companies in Japan by focusing
solely on LTL commercial freight averaging up to
20kg in per-unit weight. The reason the Company
chose this range is that the per-kilogram unit price ofshipping LTL commercial freight is higher than that oflarge-lot and long-distance freight, and thus much
more profitable. Concurrently, by combining themultiple forwarding services that Seino excels at, we
can provide a more economic shipping alternate tocustomers. Moreover, providing reliable collection

and delivery, shipping routes and delivery schedules
provides customers with greater peace of mind andsatisfaction, thereby securing Seino a superior
position over competitors.
To achieve targets outlined in its LTL No. 1 Plan,
Seino aims to improve its brand strength using thefollowing measures so that consumers willautomatically think of Seino first when they think ofcommercial freight:
1) Acquisition of short-distance, medium-sizedcargo clients
2) Achievement of highly efficient transportation
service operations3) Development of a profitable freight rate
structure4) Execution of structural reorganization
5) Pursuit of strategic alliances

Acquisition of Shor t-Distance , MediumSiz ed Car g o Clients
When Seino conducted studies into the distance thatcommercial freight travels within Japan, it discoveredthat freight tended to travel 200km within the same
economic zone, and that such shipments were highly
profitable. Consequently, medium-size customers
with no internal physical distribution divisions withinthat 200km economic zone
generally tended to ship 10
to 100 pieces of freight atonce, and are the mostprofitable customers tohandle. Seino aims to raise
the profitability ofcommercial freight by
aggressively developing
new inroads targeting thiscategory of users.
It has also been noted5that operating within a 200km radius is the mostefficient in maximizing overall performance. In
consideration of this range, the Company is using asystem that uses two delivery trucks to every one
driver. This system entails having a driver drive aloaded truck to a hub point, wherein the packages arereloaded onto other trucks and distributed by local
drivers, and thereafter a separate unloaded vehicle isdriven back to the original physical distribution site. A
200km zone is small enough that a single driver canmake all their deliveries roundtrip within the span of asingle working day. In this way, Seino will continue toraise both the skills and number of its sales force anddrivers while acquiring more cargo clients for greater
profitability.

Intr oduction of Hub & Spok e System
Seino is working to establish rapid, highly efficienttransport operations. Up until now, Seino's transport
operations entailed shipping freight from customer
bases directly to their destinations without any stops
in between. This type of operation faces difficulties
when there are numerous packages to be delivered,
when changes are made to freight volume orespecially when there are
reductions in freight
volume. For this reason,
Seino introduced "Hub &Spoke" transport
operations tailored to theexisting conditions within
Japan, and now transports
the bulk of its freight
between these hub
delivery points. In theprocess, freight collected
at respective branches(satellites) is transported

6(spokes) to forward relay stations (hubs) located in
key regions. Next, the relay stations repack items into
units and ship them to their respective final
distribution points. In this way, Seino can optimallycapitalize on its forte in multiple forwarding services
and raise efficiency in transport through such means
as optimal use of unused truck space, reduction inshipping trips and on-time delivery. Achieving theseaims will contribute significantly to reducing costs
and, in turn, expanding profits.

De v elopment of a Pr ofita b le F r eight Ra te
Str uctur e
Until recently, Seino's freight rate structure hadremain unchanged since the officially approved freightrate of the Land, Infrastructure and Transportation
Ministry (LITM) had been eliminated in 1995,
resulting in the problem of declining profitability forlong-distance shipping the farther the freight wasshipped.
Seino was thus inspired to subsequently work to
overhaul its previously unprofitable transport
operations andimprove the freightrate per ton. In
particular, theCompany has
undertaken efforts
to increase rate forboth low-margin
long-distancefreight as well aslarge-lot freight inorder to achieve
higher profitability.
To curb requests forlower freight ratefrom customers, theSeino Group recently submitted a notification of a ratechange of 6% to the LITM and received approval. The
Seino Group is now diligently pursuing pricing
negotiations with customers regarding its freight cost
structure to return prices to a reasonable level anddevelop highly profitable businesses.

Ex ecution of Str uctur al Reor g aniza tion
Seino Group companies reorganized their corporate
structures to efficiently carry out Seino's corecompetency in LTL commercial freight transportation.
The first steps entailed measures to include Nohi
Seino Transportation Co., Ltd., Tokai Seino
Transportation Co., Ltd. and Kanto Seino
Transportation Co., Ltd. into the scope of
consolidation as wholly-owned subsidiaries throughstock-for-stock exchange transactions, integrating
overlapping transportation territories and reassessing
freight collection zones. The Company is also now
redrawing and expanding its domestic network by
restructuring the original region-based Group
organization into a function-based one that comprises
the elements of route, collection and delivery,
chartered trucks, moving and international freight. By
raising efficiency of overall Group operations, Seino
can build a system capable of providing the nation's
highest-quality transport services that will enable us
to centralize transport management information, as
well as gain a huge advantage over the competition.
Given the uniquely diverse elements within the
Company's various businesses, Seino aims to spin off
these businesses as independent, specializedcompanies, which will in turn pursue alliances withother leading distribution-related companies in theirrespective fields to achieve business growth centeredaround Seino's core competence of LTL commercial
freight transportation.

Pur suing Str a te g ic Alliances in Domestic
and Ov er seas
Seino is pursuing strategic alliances with companies
who are leaders in their respective industries as ameans of building a physical distribution platform.
This move is aimed at establishing a "one-stop
service" system that can address the transport needsof customers, and is expected to generate growth inbulk consignment orders.
In international freight forwarding business, forexample, Seino formed an alliance with the Schenker
AG, the leading worldwide freight forwarder, toestablish the joint venture Schenker-Seino Co. Ltd. in
April 2002, and transferred Seino's internationaltransport division to the newly established Company.
The newly acquired access to the 1,000 worldwide
bases of the Schenker as a result of this alliance has
provided the Seino Group with a major advantage in
the international transport business. Since both largeand medium-sized Japanese companies are relocating
their manufacturing bases to Mainland China, theSeino Group will begin working aggressively tocultivate this market of customers in the internationaltransport business.
Opening Reception of
Schenker-Seino Co., Ltd.
(April 2002)

7

Review of Operations

Transportation Services
In the transportation industry, intensified competition and the push among customers
to reduce physical distribution costs continued to escalate. In response, Seino
focused efforts on further enhancing transportation service quality while acquiring
greater competitiveness and profitability by promoting such measures as businessalliances and establishing and relocating multifunctional terminals.
For the fiscal year under review, operating revenues in this segment rose 4.4%
to ¥306,003 million (US$2,301 million). A major factor was the inclusion of Nohi
Seino Transportation Co., Ltd., Tokai Seino Transportation Co., Ltd. and Kanto
Seino Transportation Co., Ltd. into the scope of consolidation. Operating loss of¥864 million (US$6 million) was recorded from the considerable impact ofincreased losses incurred by such overseas subsidiaries as Seino America, Inc.
following the September terrorist attacks.
In the LTL commercial freight transportation business, despite working toward
and achieving a degree of success in reducing the scope of business solely to LTL
operations and normalizing prices for consigned freight, freight volume declined
6.3% from the effects of the deteriorating economy.*
In the small parcel transportation business, freight volume declined 3.5% as aresult of reduced mail marketing campaigns among companies against the backdropof the sluggish economy.*
In the removal business, despite acquiring new clients through reliance on theexpertise of the industry leader Art Corporation (headquarters: Daito, Osaka) via a
alliance, operating revenues declined 3.9% to ¥3,333 million (US$25 million),owing to lower rates of office relocation and intensifying competition.*
In air and sea freight forwarding, the Company was able to expand market
share through aggressive promotion of marketing activities through a coalition with
Schenker AG. In October, the Company constructed the Narita Logistics Center as
the largest international distribution base in Japan. Nevertheless, the effects of the IT
recession in combination with the terrorist attacks of September, 2001 drasticallyreduced freight volume in this business. Consequently, operating revenues declined
8.0% to ¥22,007 million (US$165 million).**Parent company figures are shown throughout because consolidated figures are notavailable.

Merchandise Sales

8

Operating revenues in this segment jumped 151.8% to ¥92,667 million (US$697
million), and operating income climbed 412.1% to ¥2,803 million (US$21 million).
The key factor for this increase was the inclusion of Toyota Corolla Gifu Co., Ltd.
and Gifu Hino Motor Co., Ltd. to the scope of consolidation.
By business, the merchandise sales business made full use of the Seino Group'stransport and information network to provide original new items and services. Whileaggressive efforts were made to develop and expand sales of appealing products
predominately through operations at Seino Trading Co., Ltd., overall merchandise
sales declined 24.3% to ¥14,326 million (US$108 million).
In automobiles sales, net sales jumped 338.3% to ¥60,400 million (US$454
million) owing to the inclusion of the above-mentioned automobile dealers to thescope of consolidation through a takeover bid.

Information Services
Despite operating revenues in this segment rising 6.2% to ¥5,224 million (US$39
million), an operating loss of ¥186 million (US$1 million) was posted. By business,the information-related business worked aggressively amid sluggish IT industry
conditions to construct a logistics gateway via Seino Information Service Co., Ltd.,
while expanding business in such areas as third-party logistics and such next
generation fields as EDI(Electronic Data Interchange) and network solutions.
Despite a 20.3% decline in sales from systems development and improvements to¥854 million (US$6 million) as a result of a downturn in related demand, sales ofcomputer-related equipment jumped 65.5% to ¥1,908 million (US$14 million).

OthersThis segment includes leasing operations conducted by Asahi Leasing Co., Ltd.,equipment installation subcontracting operations conducted by Seino Engineering
Co., Ltd. and travel agency operations conducted by Asahi Travel Service Co., Ltd.,as well as a number of other businesses in the fields of real estate, advertising, taxi
service, insurance, security service and medical waste disposal. In the fiscal year
under review, the Group endeavored to create new demand by providing high valueadded services and promote operational activities to secure a more reasonable returnon services provided.
Despite a 16.6% decrease in operating revenues for this segment to ¥14,941
million (US$112 million), operating income rose 82.9% to ¥1,692 (US$13 million),owing to an increase in rental rates from the inclusion of Toyota Corolla Gifu andGifu Hino Motor into the scope of consolidation, the addition of operating income
produced by Seino Engineering and a reduction in losses at Medical Support Co.,Ltd.

9

Financial Review
Operating Results
Consolidated operating revenues for the year ended March 31, 2002rose 18.8% to ¥418,835 million (US$3,149 million).
Operating costs of revenues rose 14.6% to ¥382,637 million(US$2,877 million), while the ratio of operating costs of revenues tooperating revenues decreased 3.3 percentage points to 91.4%.
Selling, general and administrative expenses climbed 84.8% to¥32,655 million (US$246 million), and operating income jumped
295.9% to ¥3,543 million (US$27 million). Net other income of¥21,493 million (US$162 million) as a result of reversal of employee
retirement benefit liability of ¥18,895 million (US$142 million) andamortization of consolidating adjustment account (negative
goodwill) of ¥6,435 million (US$48 million), following the inclusionof Nohi Seino Transportation Co., Ltd., Tokai Seino Transportation
Co., Ltd. and Kanto Seino Transportation Co., Ltd., as well as
Toyota Corolla Gifu Co., Ltd. and Gifu Hino Motor Co., Ltd. into
the Company's scope of consolidation.
Accordingly, income before income taxes and minority interests
were ¥25,036 million (US$188 million) and net income was ¥16,475
million (US$124 million).
The ratio of net income to net revenues was 3.9%; net income
per share was rose to ¥99.59 (US$0.75); and return on equity (ROE)
was 7.7%. Cash dividends per share were ¥11.00 (US$0.08).

(US$509 million). Total shareholders' equity increased 12.5% to¥227,104 million (US$1,708 million), and the shareholders' equity
ratio edged down 1.1 percentage points to 43.4%.

Cash FlowsNet cash provided by operating activities rose ¥2,093 million to¥16,135 million (US$121 million). Despite decreases arising from a
net reversal for employee retirement benefit liability andamortization of consolidated adjustment account, this was offset byhigher income before income taxes and minority interests and anincrease in depreciation.
Despite an increase in property and equipment, the sale ofinvestment securities contributed to net cash provided by investing
activities of ¥36,157 million (US$272 million), compared with net
cash used in investing activities of ¥14,291 million in the previous
fiscal term.
Net cash used in financing activities increased ¥27,192 million
to ¥30,283 million (US$228 million) from an increase in repaymentof long-term debt.
Cash and cash equivalents at end of year totaled ¥50,218
million (US$378 million), up 285.0% from the previous fiscal year.

Financial Position
As of March 31, 2002, total assets were ¥522,753 million (US$3,930
million), up 15.3% from the previous fiscal term.
Total current assets rose 71.4% to ¥167,395 million (US$1,259
million), mainly due to the inclusion of current assets from five
newly consolidated subsidiaries. Net property and equipment
increased 41.4% to ¥236,051 million (US$1,775 million).
Total current liabilities edged up 0.9% to ¥129,117 million(US$971 million), and long-term debt rose 3.4% to ¥67,739 million

Operating income to operating revenues
Net income to operating revenues

Net income to total assets
Return on equity ratio

Shareholders’ equity ratio

(%)

(%)

(%)

4

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

80

3
2
1
0
-1
-2
-3
-4
-5
-6
1997

10

1998

1999

2000

2001

2002

60

40

20

0
1997

1998

1999

2000

Operating income to operating revenues

Net income to total assets

Net income to operating revenues

Return on equity retio

2001

2002

1997

1998

1999

2000

2001

2002

Seino Transportation Co., Ltd. and Consolidated Subsidiaries

Six-year Summary
For the Years Ended March 31, 2002, 2001, 2000, 1999, 1998 and 1997

Millions of Yen
2002
For the year:
Operating revenues:
Transportation
Merchandise sales
Information services
OthersOperating costs of revenues
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

2001

418,835
306,003
92,667
5,224
14,941
382,637¥

2000

352,595
292,969
36,796
4,920
17,910334,034¥1999

354,255
293,319
36,326
5,952
18,658336,311¥

1998

314,773289,376
20,934
4,463—
303,199¥

1997

319,500
295,805
18,933
4,762—
306,692¥

324,307304,287
14,501
5,519—
308,838

32,655
3,543
16,475

17,666895(18,403)

15,798
2,146
3,043

9,910
1,664
2,991

9,792
3,016
5,381

8,575
6,894
8,603

167,395
522,753
129,11744,60170,853
227,104

97,645453,250
127,986
60,013
79,487201,912

194,804
447,304
122,397
57,64482,467220,092

190,931454,880
122,998
62,244
94,867220,792

177,833
431,885
117,845
59,79675,817219,188

126,369
437,977
127,737
20,985
126,556
215,682

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

¥

99.59
78.10
11.00

¥

(122.29)(122.29)
11.00

¥

20.11
16.63
11.00

¥

19.56
16.10
11.00

¥

35.18
28.43
11.00

¥

56.25
47.86
11.00

Thousands
Number of shares issued

176,820

152,919

152,919

152,919

152,919

152,919

0.5
1.0
0.7
1.4
48.5
155.2
103.8
56.2

0.9
1.7
1.2
2.5
50.8
150.9
94.8
31.3

2.1
2.7
2.0
4.1
49.2
98.9
100.8
19.6

Percent
Ratios:Operating income to operating
revenues
Net income to operating revenues
Net income to total assets
Return on equity ratio
Net assets ratio
Current ratio
Debt equity ratio
Payout ratio

0.8
3.9
3.2
7.7
43.4
129.6
115.4
10.1

Current ratio

0.3
(5.2)
(4.1)
(8.7)
44.5
76.3
120.6
(9.1)

0.6
0.9
0.7
1.4
49.2
159.2
99.6
55.3

Debt equity ratio

Payout ratio

(%)

(%)

(%)

160

120

60

50
120

90

80

60

40

30

20

40

10

30

0

0

0
1997

1998

1999

2000

2001

2002

-10
1997

1998

1999

2000

2001

2002

1997

1998

1999

2000

2001

2002

11

Seino Transportation Co., Ltd. and Consolidated Subsidiaries

Consolidated Balance Sheets
March 31, 2002 and 2001

Thousands of
U.S. Dollars

Millions of Yen

2002
AssetsCurrent assets:
Cash and cash equivalents
Short-term investments (Notes 3 and 5)
Trade receivables
Inventories
Deferred tax assets (Note 11)
Other current assets
Allowance for doubtful accounts
Total current assets¥

Property and equipment, at cost
(Notes 4 and 5):Less, accumulated depreciation
Net property and equipment
Investments and other assets:
Investment securities (Notes 3 and 5)
Investments in and long-term loans toaffiliates (Note 3)
Deferred tax assets (Note 11)
Deferred tax assets arising on revaluation (Note 4)
Other assets¥
Liabilities, Minority Interests and Shareholders’ Equity
Current liabilities:
Short-term borrowings (Note 5)
Current portion of long-term debt (Note 5)
Trade payables
Accrued expenses
Income taxes payable
Employees’ savings deposits
Other current liabilities (Note 11)
Total current liabilities¥

Long-term debt (Note 5)
Employee retirement benefit liability (Note 6)
Deferred tax liabilities (Note 11)
Consolidating adjustment account (negative goodwill) (Note 2 (a-ii))
Other long-term liabilities
Commitments and contingent liabilities (Notes 7 and 8)
Minority interests in consolidated subsidiaries
Shareholders’ equity (Note 10):
Common stock, no par value-Authorized: 400,000,000 shares;
Issued: 176,820,926 shares in 2002 and 152,919,216 shares in 2001
Additional paid-in capitalLand revaluation decrement (Note 4)
Retained earnings
Net unrealized gains on available-for-sale securities
Foreign currency translation adjustment
Less, treasury stock at cost – 2,867,468 shares in 2002 and 2,796,531 shares in 2001
Total shareholders’ equity¥

12

See accompanying Notes to Consolidated Financial Statements.

2001

50,218 ¥19,784
79,348
6,927
5,517
7,414
(1,813)
167,395

2002

13,044 $377,579
19,627
148,752
51,905596,602
2,057
52,083827
41,481
11,36055,744(1,175)(13,632)
97,645
1,258,609

400,378(164,327)
236,051

288,539(121,641)
166,898

3,010,361(1,235,541)
1,774,820

92,181

133,383

693,090

5,520
6,869
90
14,647
119,307522,753 ¥

31,497
11,947—
11,880188,707453,250

41,50451,647677
110,127
897,045$ 3,930,474

60,013 $14,00033,046
7,881
2,616
4,198
6,232
127,986

335,346
23,414405,271
85,78221,00029,63170,361
970,805

67,73935,263
2,076
26,592
1,181

65,48749,76611992
76509,316
265,135
15,609199,940
8,880

33,681

7,812

253,240

44,601
3,114
53,901
11,409
2,793
3,941
9,358
129,117¥32,47154,875(425)
140,169
1,479
(654)
(811)
227,104
522,753 ¥

31,276244,143
43,321
412,594−(3,195)
125,436
1,053,902
3,385
11,120(731)(4,917)(775)(6,098)201,912
1,707,549
453,250 $ 3,930,474

Seino Transportation Co., Ltd. and Consolidated Subsidiaries

Consolidated Statements of Operations
For the Years Ended March 31, 2002, 2001 and 2000

Thousands of
U.S. Dollars

Millions of Yen

2002
Operating revenues (Note 12)¥

Operating costs and expenses (Notes 6 and 12):
Operating costs of revenues
Selling, general and administrative expenses

418,835

2001¥

352,595

2000
¥

2002

354,255$ 3,149,135

382,637
32,655415,292
3,543

334,034
17,666
351,700
895

336,311
15,798352,1092,146

2,876,970
245,526
3,122,496
26,6394,250(1,257)(2,664)(224)
18,895

4,021(1,137)
313
(874)
—

4,348
(1,169)137
110—

31,955(9,451)(20,030)(1,684)142,068

Income (loss) before income taxes and minority interests—
6,435(3,792)(605)—
455
21,49325,036(30,976)——
1,492(1,495)(1,114)(29,770)(28,875)

—
—
—
671
—
43
4,140
6,286

—
48,383(28,511)(4,549)—3,421
161,602
188,241

Income tax expenses (benefits) (Note 11)Less, minority interests in net income of consolidated subsidiaries
Net income (loss)

7,794
767
16,475(10,652)
180(18,403) ¥

2,716
527
3,043 $

58,602
5,767
123,872

Operating income
Other income (expenses):
Interest and dividend income
Interest expenses(Loss) gain on sale or disposal of property and equipment
Equity in net (loss) income of affiliates
Reversal of employee retirement benefit liability (Note 6)
Transitional provision of adoption of new accounting standard for retirement
benefits (Note 6)
Amortization of consolidating adjustment account (negative goodwill)
Loss on write-down of investment securities(Loss) gain on sale of investment securities
Loss on investments in and loans to affiliates
Miscellaneous, net

¥

¥

Yen

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

See accompanying Notes to Consolidated Financial Statements.

¥

99.59
78.10
11.00

¥

(122.29) ¥(122.29)
11.00

U.S. Dollars

20.11
16.63
11.00

$

0.75
0.59
0.08

13

Seino Transportation Co., Ltd. and Consolidated Subsidiaries

Consolidated Statements of Shareholders’ Equity
For the Years Ended March 31, 2002, 2001 and 2000

Number ofcommonshares issued

Common stock

Additional
paid-in capitalLand
revaluation
decrement

Retainedearnings

Net unrealized
gains onavailable-forsale securities

Foreigncurrencytranslation
adjustment

TreasurystockMillions of Yen

Balance at March 31, 1999
Net income for the year
Cash dividends
Bonuses to directors andstatutory auditors
Cumulative effect on initial adoptionof deferred income tax accounting
Decrease in retained earnings
through consolidation of
additional subsidiaries
Adjustments for elimination ofintercompany profits on consolidationof additional subsidiaries
Fractional shares acquired, net
Balance at March 31, 2000
Net loss for the year
Cash dividends
Bonuses to directors andstatutory auditors
Net unrealized gains on availablefor-sale securities, net of
applicable income taxes
Translation adjustment
Purchases of 1,195,000 sharesof treasury stock under thestock option plan
Fractional shares acquired, net
Balance at March 31, 2001
Net income for the year
Stocks issued under exchange
offerings (Note 2(a-ii))
Cash dividends
Bonuses to directors andstatutory auditors
Increase in retained earning
through consolidation of
additional subsidiaries
Adjustments for elimination ofintercompany profits on consolidationof additional subsidiaries
Revaluation decrement on land
Net change in unrealized gains onavailable-for-sale securities, netof applicable income taxes
Translation adjustment
Fractional shares acquired, net
Balance at March 31, 2002

152,919,216 ¥——

31,276 ¥——43,321 ¥——— ¥ 146,196 ¥
—
3,043
—
(1,682)

— ¥
—
—

— ¥
—
—

(1)
—
—

—

—

—

—

(46)

—

—

—

—

—

—

—

(700)

—

—

—

—

—

—

—

(438)

—

—

—

—
—
152,919,216————
31,276————43,321
—
—

—
—
—
—
—

(802)
—
145,571(18,403)(1,682)

—
—
—
—
—

—
—
—
—
—

—
(75)
(76)
—
—

—

—

—

—

(50)

—

—

—

—
—

—
—

—
—

—
—

—
—

3,385
—

—
(731)

—
—

—
—
152,919,216———
31,276———43,321
—

—
—
—
—

—
—
125,436
16,475

—
—
3,385
—

—
—
(731)
—

(698)
(1)
(775)
—

23,901,710
—

1,195
—

11,554————(1,669)

—
—

—
—

—
—

—

—

—

—

(50)

—

—

—

—

—

—

—

45

—

—

—

—
—

—
—

—
—

—
(425)

(68)
—

—
—

—
—

—
—

—
—
—
32,471 ¥———54,875 ¥(1,906)——
1,479 ¥—
77—(654) ¥

—
—
(36)
(811)

25,451 $—(5,496) $—(5,827)————
176,820,926 ¥

—
—
—
—
—
—
(425) ¥ 140,169 ¥Thousands of U.S. Dollars

Balance at March 31, 2001
Net income for the year
Stocks issued under exchange
offerings (Note 2(a-ii))
Cash dividends
Bonuses to directors andstatutory auditors
Increase in retained earning
through consolidation of
additional subsidiaries
Adjustments for elimination ofintercompany profits on consolidationof additional subsidiaries
Revaluation decrement on land
Net change in unrealized gains onavailable-for-sale securities, netof applicable income taxes
Translation adjustment
Fractional shares acquired, net
Balance at March 31, 2002

14

$ 235,158 $ 325,722 $——— $ 943,128 $—
123,872

8,985—

86,872————(12,549)

—
—

—
—

—
—

—

—

—

(376)

—

—

—

—

—

—

338

—

—

—

—
—

—
—

—
(3,195)

(511)
—

—
—

—
—

—
—

—
—
—
—
—
—
$ 244,143 $ 412,594 $See accompanying Notes to Consolidated Financial Statements.

——(14,331)
—
—
—
—
—
—
(3,195) $1,053,902 $ 11,120 $—579—(4,917) $

—
—
(271)
(6,098)Seino Transportation Co., Ltd. and Consolidated Subsidiaries

Consolidated Statements of Cash Flows
For the Years Ended March 31, 2002, 2001 and 2000

Thousands of
U.S. Dollars

Millions of Yen

2002
Cash flows from operating activities:
Income (loss) before income taxes and minority interests
Adjustments for:
Depreciation
Amortization of consolidated adjustment accountNet (reversal) provision for employee retirement benefit liability
Loss (gain) on sale or disposal of property and equipment
Loss on investments in and loans to and affiliates
Loss (gain) on sale of investment securities
Loss on write-down of investment securities
Equity in net loss of affiliates
Decrease (increase) in trade receivables
Decrease in trade payables and accrued expenses
Other, net
SubtotalInterest and dividend received
Interest paid
Income taxes paid
Net cash provided by operating activities¥

Cash flows from investing activities:
Increase in property and equipment
Increase in long-term investments and loans
Decrease in property and long-term investments
Net decrease in short-term investments
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Increase in long-term debt
Repayment of long-term debt
Net (decrease) increase in short-term borrowings
Cash dividends paid
Other
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents upon inclusion of additional
subsidiaries on consolidation
Cash and cash equivalents at end of year

See accompanying Notes to Consolidated Financial Statements.

¥

25,036

2001

2002(28,875) ¥6,286

12,365(6,435)(20,345)
2,664
—
605
3,792
224
6,573
(4,529)(1,027)18,923
4,557(1,221)(6,124)
16,135

10,34950
33,734(313)
1,495(1,492)—874
4,488(4,277)(1,182)
14,8513,940(1,119)(3,630)14,042

14,769
51
467
(137)
—
(671)
—
(110)
(1,398)(304)(785)
18,168
4,615(1,151)(4,075)
17,557

92,970(48,383)(152,970)
20,030—4,549
28,511
1,684
49,421(34,053)(7,722)
142,278
34,263(9,180)(46,045)
121,316(15,728)(24,243)
56,04320,08536,157(11,659)(53,155)
26,49324,030(14,291)(18,445)(12,956)
23,112
17,9059,616(118,256)(182,278)
421,376
151,015
271,857

8,435(17,908)(18,928)(1,844)(38)(30,283)34
22,043
13,044

1,355(4,363)
2,311(1,696)(698)(3,091)33(3,307)
16,342

2,073(10,374)(5,147)(1,700)—(15,148)(77)
11,9482,029

63,421(134,646)(142,316)(13,865)(286)(227,692)
256
165,737
98,0752,365
16,342 $113,767
377,579

15,131
50,218

¥

2000

¥

9
13,044¥$

188,24115

Seino Transportation Co., Ltd. and Consolidated Subsidiaries

Notes to Consolidated Financial Statements
1. Basis of Consolidated Financial Statements(a)U.S. dollar amounts included in the accompanying consolidated financial
statements and notes thereto represent the arithmetic results of translating
Japanese Yen into U.S. dollars at a rate of ¥133 to $1, the approximate
rate of exchange at March 31, 2002. The inclusion of such dollar
amounts is solely for the convenience of the readers and is not intended to
imply that Yen and the assets and liabilities originating in Yen have beenor could be readily converted, realized or settled in dollars at ¥133 to $1
or at any other rate.

Basis of presenting the consolidated financial statements
The accompanying consolidated financial statements of Seino
Transportation Co., Ltd. (the “Company”) and its consolidated subsidiaries (together with the Company, the “Seino Group”) have been
prepared in accordance with the provisions set forth in the Commercial
Code of Japan and the Securities and Exchange Law of Japan, and in
conformity with accounting principle generally accepted in Japan.
Certain items presented in the original consolidated financial statements in Japanese submitted to the Director of Kanto Finance Bureau
in Japan have been reclassified in these accounts for the convenience ofreaders outside Japan.

(c)

Reclassification
Certain comparative figures have been reclassified to conform with thecurrent year’s presentations.

(b) U.S. dollar amounts
The Company maintains its accounting records in Japanese Yen. The

2. Summary of Significant Accounting Policies(a-i) Principles of consolidation
The accompanying consolidated financial statements include theaccounts of the Company and its subsidiaries. Investment in significant affiliates is accounted for by the equity method. Investment inaffiliates not accounted for by the equity method is stated at cost.
Differences between the acquisition cost of investments in subsidiaries
and the underlying equity in their net assets adjusted based on the fairvalue at the time of acquisition are deferred and amortized over five
years. All intercompany transactions and accounts have been eliminated.
Under the accounting standard for consolidation, a subsidiary isdefined as an enterprise which is controlled by another enterprise, andthat is a majority (more than 50%) owned enterprise or 40% to 50%
owned enterprise that meets certain criteria. In addition, an affiliatedcompany is defined as an enterprise in which the investor has a significant influence, and that is an enterprise, other than a subsidiary, with
20% or more of voting stock as well as 15% to 19% owned enterprisethat meets certain criteria. For the three years ended March 31, 2002,
the number of the companies with not exceeding 50% voting interestclassified as consolidated subsidiaries based on the self-judgment of
the Company in accordance with the accounting standard was eighteen,
thirteen and fourteen, respectively.
The number of consolidated subsidiaries and affiliates for the three
years ended March 31, 2002 was as follows:
Consolidated subsidiaries:
Domestic
Overseas
Affiliates, accounted for by the equity method
Affiliates, stated at cost

2002

2001

2000

39
9
6
14

25
11
12
21

25
11
12
20

The Company’s overseas consolidated subsidiaries close theirbooks at December 31 every year, three months earlier than the
Company and other domestic consolidated subsidiaries. The Company
consolidated such subsidiaries’ financial statements as of their yearend. Significant transactions for the period between subsidiaries’ yearend and the Company’s year-end are adjusted on consolidation.
Overseas consolidated subsidiaries adopt accounting principles
generally accepted in their respective countries, and no adjustments toconform with accounting principles generally accepted in Japan havebeen made to their financial statements on consolidation as allowed
under accounting principles and practices generally accepted in Japan.

(a-ii) Change in consolidation scope

16

On May 29, 2001, the Company entered into stock-for-stock exchange
agreements with its three public affiliates accounted for by the equity
method in order to make the Company’s respective equity share in thethree affiliates increase to 100%. This transaction was expected to
fully utilize the advantages and strengths of management resources andmaximize the integration of the Seino Group. The agreements were
subsequently approved by the shareholders at the annual general meeting held on June 28, 2001.
In accordance with this agreement, on August 10, 2001 (stock-forstock exchange date), the Company issued 23,901,710 shares of theCompany’s common stock at the exchange rates of a certain number ofshares of the Company’s common stock(see below) for one share ofcommon stock of the three affiliates to their respective shareholders.
As a result of this transaction, the common stock account of theCompany increased by ¥1,195 million ($8,985 thousand) and the additional paid-in capital account increased by the aggregate amounts of
the net assets of the respective companies as of stock-for-stock

exchange date except for the equity interest which the Company owned
before the stock-for-stock exchange, net of the increased common
stock amount, which were adjusted on consolidation based on the fairvalue of net assets acquired at the time of acquisitions.
The details of information of stock-for-stock exchange transactions
for the three public affiliates were as follows:
Exchange
rate of thenumber ofshares of the Number of theoriginal shares Company for Company’s
held by the one share of common stock
Company
issuedaffiliates

NOHI SEINO TRANSPORTATION
CO., LTD. (“NOHI”)
TOKAI SEINO TRANSPORTATION
CO., LTD. (“TOKAI”)
KANTO SEINO TRANSPORTATION
CO., LTD. (“KANTO”)(shares)(shares)

26.2%

2.02

8,928,696

30.8%

0.81

2,184,849

35.6%

3.40

12,788,165

The unaudited financial information of the three affiliates as at orfor the fiscal year ended March 31, 2002 was as follows:
NOHI

TOKAI

KANTO

Millions of Yen

Operating revenues
Net income (loss) for the year
Total assets
Net assets¥

23,123 ¥441
32,89327,044

Operating revenues
Net income (loss) for the year
Total assets
Net assets$ 173,857 $
3,316
247,316
203,338

10,868 ¥
(195)
7,491
4,901

25,99477
25,96520,301Millions of Yen

81,714 $ 195,444(1,466)579
56,323
195,226
36,850152,639

In addition, on May 29, 2001, the Board of Directors of theCompany resolved to acquire additional shares of the common stock of
two public affiliates accounted for by the equity method by takeoverbid for an aggregate amount of ¥1,130 million ($8,496 thousand) inorder to strengthen the integration of the Seino Group. As theCompany completed this transaction during June 2001, equity share of
the two affiliates held by the Company increased to 40% each after thistransaction.
The Company consolidated the five companies above as subsidiaries from the year ended March 31, 2002 as though the exchanges
or acquisitions were made as of the beginning of the period. Therefore,such subsidiaries’ operations from April 1, 2001 were included in theaccompanying consolidated statements of operations. The excess of
the Company’s equity in the fair value of the net assets acquired ofsuch new subsidiaries over the cost of the additional investments wasrecorded as consolidating adjustment account(negative goodwill).

(b) Cash and cash equivalents

The Seino Group considers cash equivalents to be highly liquid debt

(c)instruments purchased with an original maturity of three months or
less.

of the amount which would be payable assuming all employees voluntarily terminate their service at the balance sheet date, net of the net
assets of the funded pension plans, except for certain consolidated subsidiaries.
Effective April 1, 2000, the Seino Group adopted “Opinion
Concerning Establishment of Accounting Standard for Retirement
Benefits” established by BADC and related practical guideline issued
by JICPA. In accordance with the new accounting standard, the Seino
Group has recognized the retirement benefits including pension costand related liability based on the accrual amount calculated from actuarial present value of projected benefit obligation using actuarial
appraisal approach and the pension plan assets available for benefits at
the respective fiscal year-ends. A transitional provision of adoption ofthis new accounting standard in the aggregate amount of ¥30,976 million was charged to income as other expenses in the year ended March
31, 2001. Unrecognized actuarial differences as changes in the projected benefit obligation or pension plan assets resulting from the experience different from that assumed and from changes in assumptions
are amortized on a straight-line basis principally over ten years withinremaining service lives of employees from the next year in which theyarise. As a result, for the year ended March 31, 2001, operating
income decreased by ¥1,835 million and loss before income taxes andminority interests increased by ¥32,811 million, as compared with theprevious accounting method.

Accounting for financial instruments

Effective April 1, 2000, the Seino Group adopted “Opinion Concerning
Establishment for Accounting Standard for Financial Instruments”
issued by the Business Accounting Deliberation Council of Japan(“BADC”) and related practical guideline issued by the JapaneseInstitute of Certified Public Accountants (“JICPA”). This new standard provides the new accounting methods for securities, derivatives
and allowance for doubtful accounts as mentioned below.
Adoption of the new accounting standard resulted in a decrease inloss before income taxes and minority interests for the year ended
March 31, 2001 by ¥574 million, as compared with the previous
accounting method.

(c-i) Investments and marketable securities

Until the year ended March 31, 2000, securities with market quotations
on stock exchanges were stated at the lower of moving-average cost or
market, using a valuation allowance method. Other securities werestated at moving-average cost. Effective April 1, 2000, the Seino
Group classifies certain investments in debt and equity securities as“held-to-maturity”, “trading” or “available-for-sale”, whose classification determines the respective accounting method as stipulated by thestandard. Held-to-maturity securities are stated at amortized cost.
Marketable securities with market quotations for available-for-salesecurities are stated at fair value and net unrealized gains or losses onthese securities are reported as a separate component of shareholders’equity, net of applicable income taxes. Gains and losses on dispositionof available-for-sale securities are computed based on the movingaverage method. Nonmarketable securities without available market
quotations for available-for-sale securities are carried at cost determined by the moving-average method. Adjustments in carrying valuesof individual securities are charged to income through write-downs,
when a decline in value is deemed other than temporary.

(h) Income taxes(c-ii) Accounting for derivatives

Effective April 1, 2000, derivatives are valued at fair value, if hedging
accounting is not appropriate or where there is no hedging designation,and the gains or losses on derivatives are recognized in the current
earnings. According to the special treatment as permitted by theaccounting standard for financial instruments, the hedging interest rate
swap is accounted for on an accrual basis, and recorded net of interest
income generated from investments, hedged items, if certain conditions
are met.

(i)(c-iii) Allowance for doubtful accounts

Effective April 1, 2000, in accordance with the amendment of theaccounting standard, allowance for doubtful accounts has been provided for at the aggregate amount of estimated credit loss for doubtfulor troubled receivables and a general reserve for other receivables calculated based on the historical loss experience for a certain past period.
Until the year ended March 31, 2000, allowance for doubtful accounts
was provided for as a general reserve at the maximum amount which
could be charged to income under the Japanese income tax laws.

(d) Inventories

(e)

(f)

(g)

(j)

Property and equipment, and depreciation

LeasesEmployee retirement benefits

Appropriation of retained earnings(k) Translation of foreign currency accounts

Property and equipment, including significant renewals and additions,
are stated at cost. Property and equipment of the Company and its certain consolidated subsidiaries have been depreciated by the straightline method for buildings and vehicles, and by the declining-balancemethod for other property.
Property and equipment of the other consolidated subsidiaries havebeen principally depreciated by the declining-balance method, except
for the buildings acquired on and after April 1, 1998 and the property
held for leases. The buildings acquired on and after April 1, 1998 bydomestic consolidated subsidiaries have been depreciated by thestraight-line method.
Expenditure on maintenance and repairs is charged to operating
income as incurred. Upon the disposal of property, the cost and accumulated depreciation are removed from the accounts and any gain orloss is recorded as income or expenses.

Employees who terminate their service with the Seino Group are entitled to retirement benefits generally determined by the reference of current basic rates of pay, length of service and conditions under which
the termination occurs.
The Seino Group has established defined benefit pension plans
which cover 18 % to 36% of such retirement benefits for employees of
the Company and 42% to 100% of those for employees of some of theconsolidated subsidiaries, who retire at retirement age after 20 years ormore service. Until the year ended March 31, 2000, the contribution to
the pension plan was charged to income when paid, and the Seino
Group provided for accrued severance indemnities principally at 100%

Revenue recognition for freight charges

The Seino Group recognizes freight charges as revenue when freight isreceived for shipment. In relation to its revenue recognition, the Seino
Group records freight charges from customers and paid to interline carriers as operating revenues and operating costs and expenses, respectively.
Cash dividends and bonuses to directors and statutory auditors arerecorded in the fiscal year during which a proposed appropriation ofretained earnings is approved by the Board of Directors and/or shareholders.

Inventories for supplies are principally stated at moving-average cost,and inventories for vehicles and work-in-process are principally statedat cost determined by specific identification method.

Where financing leases do not transfer ownership of the leased property to the lessee during the term of the lease, the leased property of theCompany and its domestic consolidated subsidiaries as lessee is not
capitalized and the relating rental and lease expenses are charged toincome as incurred.
The leased property of a certain consolidated subsidiary engaged
in the leasing operations as lessor was recorded at cost as property held
for leases, which was included in property and equipment in theaccompanying consolidated balance sheets, and was depreciated overthe lease contract terms by the straight-line method to the amount equal
to the estimated disposal value at the lease termination date.

Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the carrying amounts ofexisting assets and liabilities and their respective tax bases and operating loss carryforward. Deferred tax assets and liabilities are measured
using the enacted tax rates expected to apply to taxable income in theyears in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of achange in tax rates is recognized in the period that includes the enactment date. As the Seino Group adopted this deferred income tax
accounting from the year ended March 31, 2000, cumulative effect on
initial adoption of deferred income tax accounting in the debit amountof ¥700 million was included in the change in retained earnings in theaccompanying consolidated statements of shareholders’ equity for theyear ended March 31, 2000.

(l)

Effective April 1, 2000, the Seino Group adopted “Opinion Concerning
Revision of Accounting Standard for Foreign Currency Translation”
issued by BADC. In accordance with this new standard, receivables,
payables and securities, other than stocks of subsidiaries and certain
other securities, are translated into Japanese Yen at the exchange rates
at the fiscal year-end. Transactions in foreign currencies are recorded
based on the prevailing exchange rates on the transaction dates.
Resulting translation gains or losses are included in the current earnings. Until the year ended March 31, 2000, receivables and payables
denominated in foreign currencies and covered by firm forward
exchange contracts were translated into Yen at such forward contract
rates. Current receivables and payables denominated in foreign currencies not covered by forward exchanges contracts were translated into
Yen at the exchange rates in effect at the year-end. Non-current assets
and liabilities denominated in foreign currencies not covered by forward exchange contracts were translated into Yen at historicalexchange rates, unless having significant exchange loss. Adoption of
the revised accounting standard resulted in no effect on the consolidated financial statements for the year ended March 31, 2001.
In respect of the financial statement items of overseas consolidated
subsidiaries, all asset, liability, income and expense accounts are translated into Yen by applying the exchange rates in effect at the fiscal
year-end. Translation differences, after allocating to minority interests
portions attributable to minority interests, are reported as foreign currency translation adjustment in a separate component of shareholders’equity on the accompanying consolidated balance sheets.

Per share data

Basic net income (loss) per share is based on the weighted average
number of shares of common stock outstanding during the respective
years. Diluted net income per share is computed assuming that all convertible bonds were converted at the time of issue unless having antidilutive effect, and as if warrants were exercised at the beginning of therelevant period or (if later) on their first exercise date and as if thefunds obtained thereby were used to purchase common stock at the
average market price during the respective years under the treasury
stock method.
Cash dividends per share shown for each fiscal year in the accompanying consolidated statements of operations represent dividends
declared as applicable to the respective years.

17

3. Investments
At March 31, 2002 and 2001, short-term investments consisted of thefollowing:
Millions of Yen

Thousands of
U.S. Dollars

2002
2001
2002
Marketable securities:
Bonds¥ 9,678 ¥ 12,613 $ 72,767
Total marketable securities
9,678
12,61372,767
Other nonmarketable securities
1,400
1,600
10,526Time deposits with an original maturityof more than three months
8,706
5,414
65,459¥ 19,784 ¥ 19,627 $ 148,752
At March 31, 2002 and 2001, investment securities consisted of
the following:
Millions of Yen

2002
Marketable securities:
Equity securities
Bonds
Other
Total marketable securities
Other nonmarketable securities

Thousands of
U.S. Dollars

2001

2002

¥ 10,376 ¥ 8,886 $
43,57474,7301,122
17155,072
83,787
37,10949,596¥ 92,181 ¥ 133,383 $

78,015
327,6248,436
414,075
279,015
693,090

At March 31, 2002 and 2001, fair value of marketable securities
classified as held-to-maturity and related net unrealized gains were as
follows:
Carrying value

At March 31, 2002:
Bonds included in investment securities ¥Fair value
Millions of Yen

Net unrealized
gains

Cost

At March 31, 2002:
Equity securities
Bonds
Other

At March 31, 2001:
Equity securities
Bonds
Other

Gross
Gross
unrealized
unrealized
gains
lossesMillions of Yen

Fair andcarrying
value¥

5,415 ¥
49,546
1,203¥ 56,164 ¥5,008 ¥
(47) ¥ 10,376
410(2,092)47,8648(89)
1,122
5,426 ¥ (2,228) ¥ 59,362¥

4,443 ¥
2,192
2
6,637 ¥

4,641 ¥
80,667279¥ 85,587 ¥(198) ¥ 8,886(587)
82,272(110)
171(895) ¥ 91,329

Thousands of U.S. Dollars

At March 31, 2002:
Equity securities
Bonds
Other

$ 40,714 $ 37,654 $ (353) $ 78,015
372,527
3,083 (15,730) 359,880
9,045
60
(669)
8,436
$ 422,286 $ 40,797 $(16,752) $ 446,331

During the year ended March 31, 2002, the Seino Group soldavailable-for-sale securities and recorded a gain of ¥211 million($1,586 thousand) and a loss of ¥900 million ($6,767 thousand) on theaccompanying consolidated statements of operations. For the year
ended March 31, 2001, the Seino Group recorded a gain on sale ofavailable-for-sale securities in the amount of ¥1,491 million.
Expected maturities of debt securities held-to-maturity and available-for-sale at March 31, 2002 were as follows:
Thousands of
U.S. Dollars

Millions of Yen

At March 31, 2001:¥
Bonds included in investment securities

5,471 ¥

6,042 ¥

571

5,071 ¥

5,722 ¥

651

Thousands of U.S. Dollars

At March 31, 2002:
Bonds included in investment securities $ 41,135 $ 45,428 $Due in one year or lessDue after one year through five years
Due after five years through ten years
Due after ten years¥¥

11,19944,66637,250100
93,215$84,203335,835
280,075752
700,865$

4,293

Effective from the year ended March 31, 2001, marketable securities classified as available-for-sale are stated at fair value with unrealized gains and losses excluded from the current earnings andreported as a net amount within the shareholders' equity account until
realized. At March 31, 2002 and 2001, gross unrealized gains andlosses for marketable securities classified as available-for-sale aresummarized as follows:

At March 31, 2002 and 2001, investments in and long-term loans
to consisted of the following:
Millions of Yen

2002
Investments, accounted for by the equity
method for significant affiliates andat cost for others¥
Interest bearing long-term loans¥

Thousands of
U.S. Dollars

2001

2,835 ¥ 31,461 $
2,685
36
5,520 ¥ 31,497 $2002

21,31620,18841,504

4. Property and Equipment
At March 31, 2002 and 2001, property and equipment consisted of thefollowing:
Millions of Yen

2002
Property held for own use, at cost:
Land
Buildings and structures
VehiclesMachinery and equipment
Construction in progress
Less, accumulated depreciation
Subtotal
Property held for leases, at cost:
Vehicles, equipment and otherLess, accumulated depreciation
Total property and equipment

18

2001

Thousands of
U.S. Dollars

2002¥ 133,180 ¥ 85,469 $ 1,001,354
172,602 128,265 1,297,759
72,161
56,415542,564
20,68218,016
155,504
1,107
374
8,323
399,732 288,539 3,005,504(163,893) (121,641) (1,232,278)
235,839 166,898 1,773,226
646
—
4,857
(434)
—
(3,263)212—
1,594¥ 236,051 ¥ 166,898 $ 1,774,820

One of the consolidated subsidiaries elected to carry out a onetime revaluation to restate the cost of land used for the business operations at values rationally reassessed effective on March 31, 2002,
reflecting appropriate adjustments for land shape and other factors,
based on the appraisal values issued by the Japanese National Tax
Agency in accordance with the Law Concerning Revaluation of Land.
According to the Law, the amount equivalent to the tax effect on theexcess of the original book values over sound reassessed values isrecorded in the assets as deferred tax assets arising on revaluationaccount, and the rest of such excess, net of the tax effect and minority
interests portion, is recorded in the shareholders’ equity as land revaluation decrement account in the accompanying consolidated balance
sheets. Carrying amounts of such land after and before revaluation atMarch 31, 2002 were ¥6,100 million ($45,865 thousand) and ¥6,576
million ($49,444 thousand), respectively.

5. Short-term Borrowings and Long-term Debt
At March 31, 2002 and 2001, short-term borrowings consisted of thefollowing:
Millions of Yen

2002

Thousands of
U.S. Dollars

2001

2002

Unsecured bank overdrafts with interest
rates ranging from 0.202% to 11.0%
per annum at March 31, 2002
¥ 8,026 ¥ 3,148 $ 60,346
Short-term bank borrowings principally
represented by notes with interest
rates ranging from 0.237% to 5.3%
per annum at March 31, 2002:
Secured
390
385
2,932
Unsecured
36,18556,480272,068¥ 44,601 ¥ 60,013 $ 335,346
At March 31, 2002, the Company and certain consolidated subsidiaries had unsecured overdraft agreements with 40 banks. Under
such agreements, the Company and such subsidiaries were entitled towithdraw up to ¥43,439 million ($326,609 thousand). The Company
and such subsidiaries are not obligated to pay commitment fees on theunused portions of such overdraft facilities.
At March 31, 2002 and 2001, long-term debt consisted of the following:
Millions of Yen

2002

At March 31, 2002 and 2001, the following assets were pledged ascollateral for certain short-term borrowings and long-term debt:

Thousands of
U.S. Dollars

2001

2002

0.9% convertible bonds, due March 2002 ¥— ¥ 9,742 $
1.0% convertible bonds, due March 2004
27,23929,6700.125% convertible bonds, due March 2004
20,00020,0001.1% convertible bonds, due March 2006
9,562
9,562
Loans from banks, partly secured, due
through 2014 repayable on an installment
basis with interest rates ranging from
0.59% to 11.0% per annum at March 31,
2002
13,73910,214Loans from government agencies,
principally mortgage, repayable on an
installment basis with interest rates
ranging from 1.2% to 4.3% per annum at
March 31, 2002
313
299
70,853
79,487
Less, current portion(3,114) (14,000)¥ 67,739 ¥ 65,487 $—
204,804
150,376
71,895

Thousands of
U.S. Dollars

Millions of Yen

2002
Land
¥
Buildings and structures
VehiclesMarketable securities included ininvestment securities
Time deposits included in short-term
investments

2001

2002

1,066 ¥
1,249
3

743 $
379
—

8,015
9,391
23

501

501

3,767

214

77

1,609

The following is a summary of the conversion price and the termsof optional redemption of the convertible bonds as at March 31, 2002:
Conversion
price

Redemption at the optionof the Company

1.0% convertible bonds, ¥1,755.60 At 103% to 100% of principal afterdue 2004
April 1, 2000, decreasing 1% annually
0.125% convertible¥ 917.00
bonds, due 2004—
1.1% convertible bonds, ¥1,755.60 At 104% to 100% of principal afterdue 2006
April 1, 2001, decreasing 1% annually
The Company reserves the right to redeem the outstanding convertible bonds, in whole or in part, at its call option, at the percentagesof the principal amount listed in the table above. At March 31, 2002,
the number of shares of common stock necessary for conversion of
convertible bonds outstanding was approximately 43 million.
The aggregate annual maturities of long-term debt as at March 31,
2002 were as follows:
Millions of Thousands of
Yen
U.S. Dollars

Years ending March 31,

103,301

2,354
532,730(23,414)509,316

2003
2004
2005
2006
2007
Thereafter¥

3,114 $ 23,414
47,744 358,978
357
2,684
10,97482,511
7,249
54,504
1,415
10,639

6. Employee Retirement Benefits
The Seino Group has defined benefit pension plans and lump-sum
retirement benefit plans, which substantially cover all employees.
The following table reconciles the benefit liability and net periodic
retirement benefit expense as at or for the years ended March 31, 2002
and 2001:
Millions of Yen

Thousands of
U.S. Dollars

2002
2001
2002
Reconciliation of benefit liability:
Projected benefit obligation¥ 65,856 ¥ 127,049 $ 495,158
Less, fair value of pension plan assets at
end of year
(18,870) (66,146) (141,880)
46,98660,903353,278Less, unrecognized actuarial differences (loss) (11,672) (11,137)(87,759)
other
(51)
—
(384)
Net amounts of employee retirement
benefit liability recorded on the
consolidated balance sheets¥ 35,263 ¥ 49,766 $ 265,135

On March 15, 2002, the Company received an approval from the
Minister of Health, Labor and Welfare for the liquidation of the welfare pension funds organized by the Company and its domestic subsidiaries pursuant to the enforcement of the Defined Benefit EnterprisePension Plan Law. As a result, the Seino Group recorded a gain of¥18,895 million ($142,068 thousand) due to the extinguishment of

retirement benefit obligation of the welfare pension funds for the year
ended March 31, 2002.
Thousands ofMillions of Yen
U.S. Dollars
Components of net periodic retirement
2002
2001
2002
benefit expense:
Service cost
¥ 5,100 ¥ 4,195 $ 38,346
Interest cost
4,776
4,135
35,910
Expected return of pension plan assets(2,470)(2,506)(18,572)
Amortization of actuarial differences
1,221
—
9,180
Initial transitional provision
17
30,976128
Net periodic retirement benefit expense ¥ 8,644 ¥ 36,800 $ 64,992

Major assumptions used in calculation of the above information
for the years ended March 31, 2002 and 2001 were as follows:
2002

2001

Method attributing the projected Straight-line method Straight-line method
benefits to periods of services
2.5%
3.5%
Discount rate
Expected rate of return on pension
principally 3.5%
3.5%
plan assets
Amortization of actuarial
principally 10 years principally 10 years
differences197. Contingent Liabilities
At March 31, 2002 and 2001, the Seino Group was contingently liable
for trade notes endorsed to affiliates and the third parties, for tradenotes discounted with banks in the normal course of business, and forguarantees, including substantial guarantees principally of indebtednessof affiliates and the third parties in the aggregate amounts of ¥5,865
million ($44,098 thousand) and ¥6,759 million, respectively. During

the years ended March 31, 2002 and 2001, the Seino Group sold tradenotes receivable of ¥956 million ($7,188 thousand) and ¥4,062 million
to a certain financial institution. In relation to this transaction, theSeino Group was obligated under the terms of the recourse provision to
repurchase receivables sold up to ¥260 million ($1,955 thousand) and¥773 million at March 31, 2002 and 2001, respectively.

8. Lease Commitments
The Seino Group has entered into various rental and lease agreements
for land and buildings to be used for truck terminals and warehouses
which are generally cancelable with a few months' advance notice andalso non-cancelable lease agreements for computer equipment andradio facilities with three-to-seven year contract terms as lessee. The
aggregate minimum future lease payments for such non-cancelable
lease agreements, including the imputed interest portion, as at March
31, 2002 and 2001 were as follows:

Millions of Yen

Due within one year
Due after one year¥¥

Due within one year
Due after one year

2001

2002

1,966 ¥
2,904
4,870 ¥

2,413 $
4,292
6,705 $

14,782
21,83536,617

¥
¥

157
214
371

$
$

1,180
1,609
2,789

In addition to above, a certain consolidated subsidiary engaged in
the leasing operations leases the property as lessee and also leases thesame property to affiliates and the third parties as lessor. At March 31,
2002 and 2001, the future minimum commitments under such agreements, including the imputed interest portion, were as follows:

Thousands of
U.S. Dollars

2002

Thousands of
U.S. Dollars

Millions of Yen

Minimum rentals
Minimum rentals
to be paid to be received to be paid to be received
Millions of Yen
Thousands of U.S. Dollars

At March 31, 2002:
Due within one year
Due after one year

A certain consolidated subsidiary engaged in the leasing operations entered into various lease agreements principally for vehicles
with the third parties as lessor, which were categorized as financing
leases. At March 31, 2002, the aggregate future minimum lease commitments to be received for such non-cancelable lease agreements,
excluding the imputed interest, were as follows:¥¥

At March 31, 2001:
Due within one year
Due after one year

3,608 ¥
5,618
9,226 ¥

3,844 $ 27,128 $ 28,902
6,018
42,24045,2489,862 $ 69,368 $ 74,150¥

4,749 ¥ 5,049
7,518
8,035
¥ 12,267 ¥ 13,084

9. Derivative Instruments
The Seino Group is a party to derivative instruments such as interest
rate swap or currency swap contracts in the normal course of businessto reduce its own exposure to fluctuations in interest rates or foreign
currency exchange rates on investments of the Seino Group for thehedge purposes. The Seino Group is exposed to credit loss in the eventof nonperformance by the other parties. However, the Seino Group
does not expect nonperformance by the counterparties. All derivative
instruments are accounted for by the certain hedge accounting methods
as at March 31, 2002 and 2001.

10. Shareholders’ Equity
(a)

(b)

(c)
20

The authorized number of shares of common stock, without par value,is 400 million at March 31, 2002, unless there may be a reduction due
to a cancellation of treasury stock acquired.
Pursuant to the Commercial Code of Japan and the resolution byshareholders at the annual general meeting on June 27, 2002, theCompany can purchase the treasury stock of the Company up to
8,800,000 shares in maximum consideration for ¥7,500 million($56,391 thousand) for the period through the date of its next annual
shareholders' general meeting.
At March 31, 2002 and 2001, retained earnings included legal reserveof the Company in the amounts of ¥4,262 million ($32,045 thousand)and ¥4,082 million, respectively. The Commercial Code of Japan
provides that an amount equivalent to at least 10% of cash payments as
an appropriation of retained earnings shall be appropriated as a legal
reserve until a total amount of additional paid-in capital and such legal
reserve equals 25% of common stock. Such legal reserve is notavailable for distribution as dividends, but may be used to reduce a
deficit or may be transferred to common stock by proper actions of theBoard of Directors and/or shareholders of the Company.
Under the terms of the 1.0% and 1.1% convertible bonds, as longas any of the relevant bonds remains outstanding, the Company may
not pay any cash dividends if, upon giving effect thereto, the aggregate
amount of all cash dividends paid after March 31, 1995, less income
before special credits or charges (as defined in the Ministry of FinanceOrdinance) net of income taxes since such a date, would exceed ¥15
billion ($113 million).
Under the Commercial Code of Japan, the carrying values of treasury stock purchased for stock option plan and net unrealized gains onavailable-for-sale securities are not available for the distribution as dividends.
On June 29, 2000, shareholders approved to implement the stock(d)

option plan in accordance with the Commercial Code of Japan. The
stock option was granted to 15 members of the Board of Directors and575 executive employees as of June 29, 2000, and each stock option is
exercisable from July 1, 2002 to June 30, 2005. Up to 1,195,000
shares of common stock of the Company would be issuable forexercise of this option at the exercise price of ¥600 per share, which is
subject to adjustment in certain circumstances including stock splits.
The Company purchased 1,195,000 shares of treasury stock during theyear ended March 31, 2001.
In addition, on June 27, 2002, shareholders also approved to
implement the stock option plan using the new share subscription rightmethod in accordance with the Commercial Code of Japan. Under theplan, the stock option was granted to members of the Board of
Directors and selected executive employees of the Company, its consolidated subsidiaries and affiliates and each stock option is exercisablefor the period from July 1, 2004 to June 30, 2007. Up to 3,000,000
shares of the common stock of the Company would be issuable forexercise of this option at the exercise price determined based on thefair market value at the date of grant.
The shareholders of the Company approved the following
appropriations of retained earnings at the annual general meeting ofshareholders on June 27, 2002:
Thousands of
U.S. Dollars

Millions of Yen

Cash dividends

¥

1,932

$

14,526

11. Income Taxes
At March 31, 2002 and 2001, deferred tax assets and liabilities wererecorded as follows:

Income tax expenses (benefits) for the three years ended March 31,
2002 consisted of the following:Thousands of
U.S. Dollars

Millions of Yen

2002
Income tax expenses(benefits):
Current
Deferred

¥
¥

2001

2000

2002

2002

5,686 ¥ 4,532 ¥ 4,019 $
2,108(15,184)(1,303)7,794 ¥ (10,652) ¥ 2,716 $Deferred tax assets:
Current
Non-current
Deferred tax liabilities:
Current
Non-current

42,75215,85058,602Thousands of
U.S. Dollars

2002
2001
Deferred tax assets:
Employee retirement benefit liability ¥ 13,, 955 ¥ 17,831 $Enterprise tax accruals
260
290Intercompany capital gain
1,103
614
Loss on assets transferred
5,040
783
Unrealized losses on available-forsale securities
1,002
368
Other
2,886
1,632
24,246
21,518Less, valuation allowance(1,734)(605)
22,512
20,913
Deferred tax liabilities:
Deferred capital gain
5,793
5,479
Unrealized gains on available-forsale securities
2,330
2,759
Consolidating valuation differences
4,004
―
Other
75
24
12,202
8,262
Net deferred tax assets¥ 10,310 ¥ 12,651 $

¥

2001

2002

5,517 ¥
827 $
6,869
11,94741,48151,647―2,076―
15,6094
119In assessing the realizability of deferred tax assets, management of
the Seino Group considers whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generationof the future taxable income during the periods in which those temporary differences become deductible. At March 31, 2002 and 2001, a
valuation allowance was provided to reduce the deferred tax assets tothe extent that the management believes that the amount of the deferred
tax assets is expected not to be realizable.
A reconciliation of the differences between the Japanese statutory
tax rate and the effective income tax rate on pretax income reflected in
the accompanying consolidated statements of operations for the years
ended March 31, 2002 was as follows:

The tax effects on temporary differences that give rise to a significant portion of deferred tax assets and liabilities at March 31, 2002 and2001 were as follows:
Millions of Yen

Thousands of
U.S. Dollars

Millions of Yen

2002
104,925
1,955
8,293
37,895
7,534
21,699182,301(13,038)
169,263

Percentage of pretax income

Japanese statutory tax rate
Decrease due to:Permanently nondeductible expenses
Tax exempt income
Local minimum taxes-per capita levy
Amortization of consolidating adjustment accountEquity in net loss of affiliates
Other
Effective income tax rate

43,556
17,51930,105564
91,74477,519

41.7%
0.6
(0.4)
2.0
(10.7)
0.4
(2.5)
31.1%

For the year ended March 31, 2001, such reconciliation is not presented
because the Seino Group recorded net loss.

12. Segment Information
The Seino Group operates in four business segments: transportation services, merchandise sales, information services, and leasing and other services.
Information by industry segment for the three years ended March 31, 2002 was summarized as follows:
Transportation
services

Merchandise
sales

Information
services

OthersTotal

Elimination

Consolidated

Millions of Yen

For the year 2002:
Operating revenues:
Outside customers
Inter-segment sales
Total operating revenues
Operating costs and expenses
Operating income (loss)
Identifiable assets
Depreciation
Capital expenditures
For the year 2001:
Operating revenues:
Outside customers
Inter-segment sales
Total operating revenues
Operating costs and expenses
Operating income (loss)
Identifiable assets
Depreciation
Capital expenditures
For the year 2000:
Operating revenues:
Outside customers
Inter-segment sales
Total operating revenues
Operating costs and expenses
Operating income (loss)
Identifiable assets
Depreciation
Capital expenditures¥

306,003
1,593
307,596308,460(864)¥

92,667
24,259116,926
114,123
2,803

¥

¥

328,598
10,642
12,940¥88,237
1,270
2,101

¥

292,969
1,485
294,454294,874(420)¥

36,796
20,68457,48056,932548¥

252,831
9,291
8,056

¥

22,866245
385¥

293,319
1,370
294,689
295,304(615)¥

36,32623,42759,75358,810
943

¥

¥

¥
¥

243,002
8,468
11,158¥¥¥¥24,093
222
202

5,224
5,619
10,843
11,029(186)¥

14,941
12,442
27,38325,691
1,692

¥

¥

6,362
290
162

¥

26,953
334
190

¥

4,920
5,317
10,237
10,366
(129)

¥

¥

6,241
258
304

¥

¥

¥

¥
¥

418,835
43,913
462,748459,303
3,445

¥

¥

450,150
12,536
15,393

17,9108,067
25,97725,053924¥¥

22,588
618
53

5,952
5,367
11,31910,887
432

¥

5,724
212
16

¥

¥

¥

¥

—
(43,913)(43,913)(44,011)98¥¥

72,603
(171)
(225)

¥

522,753
12,365
15,168352,595
35,553
388,148387,225923¥—(35,553)(35,553)(35,525)(28)¥

352,595—
352,595
351,700
895¥

304,526
10,412
8,798¥

148,724
(63)
(113)

¥

453,250
10,3498,685

18,658
10,114
28,772
27,2961,476¥

354,255
40,278394,533
392,297
2,236¥—(40,278)(40,278)(40,188)(90)¥354,255—354,255
352,109
2,146

31,143
5,942
6,408

¥

303,962
14,844
17,784¥

143,342
(75)
(237)

¥

¥

¥

¥

¥

¥

¥

¥

¥

¥

418,835—
418,835
415,292
3,543

447,304
14,76917,54721

Transportation
services

Merchandise
sales

Information
services

OthersTotal

Elimination

Consolidated—(330,173)(330,173)(330,910)
737$ 3,149,135—
3,149,135
3,122,496$
26,639545,887(1,286)(1,692)$ 3,930,474
92,970114,045

Thousands of U.S. Dollars

For the year 2002:
Operating revenues:
Outside customers
Inter-segment sales
Total operating revenues
Operating costs and expenses
Operating income (loss)
Identifiable assets
Depreciation
Capital expenditures$ 2,300,775
11,9772,312,752
2,319,248$(6,496)$$ 2,470,662
80,01597,293$$696,744
182,399
879,143858,068
21,075$

663,436
9,549
15,797$$39,27842,24881,52682,925(1,399)$47,835
2,181
1,218

$

$

112,338
93,549205,887
193,165
12,722$ 3,149,135
330,173
3,479,308
3,453,406$
25,902$

202,654
2,511
1,429

$ 3,384,587
94,256
115,737$$

Geographic segment information is not shown as operating revenues and total assets of overseas consolidated subsidiaries were not material in the three
years ended March 31, 2002. Information for overseas sales is not disclosed as such sales were not material.
Notes: 1. Identifiable assets in the elimination column represent unallocated general corporate items which were not assigned to a particular industry segment
such as cash, short-term and long-term investment securities, net of inter-segment balances.
2. As disclosed in Note 2(g), the Seino Group adopted the new accounting standard for retirement benefits from the year ended March 31, 2001. As aresult, as compared with the previous accounting method, operating income for transportation services segment, merchandise sales segment, information services segment and other segment decreased by ¥1,701 million, ¥92 million , ¥20 million and ¥21 million, respectively.
3. As disclosed in Note 2(c), the Seino Group also adopted the new accounting standard for financial instruments from the year ended March 31, 2001.
As a result, as compared with the previous accounting method, identifiable assets for transportation services segment, merchandise sales segment andother segment increased by ¥5,233 million, ¥585 million and ¥95 million, respectively.

22

Report of Independent Accountants
Report of Independent Accountants
To the Board of Directors of
Seino Transportation Co., Ltd.

We have audited the accompanying consolidated balance sheets of Seino Transportation Co., Ltd. and its consolidated
subsidiaries (the “Seino Group”) as of March 31, 2002 and 2001, and the related consolidated statements of operations,shareholders' equity, and cash flows for each of the three years ended March 31, 2002, all expressed in Japanese Yen. Our
audits were made in accordance with auditing standards generally accepted in Japan and, accordingly, included such testsof the accounting records and such other auditing procedures as we considered necessary in the circumstances.
In our opinion, the consolidated financial statements referred to above present fairly the consolidated financial position of
the Seino Group as of March 31, 2002 and 2001, and the consolidated results of its operations and its cash flows for each of
the three years ended March 31, 2002 in conformity with accounting principles generally accepted in Japan applied on aconsistent basis.
As described in Note 2, the Seino Group has adopted the new Japanese accounting standards for financial instruments,
retirement benefits and foreign currency translation effective from the year ended March 31, 2001.
The amounts expressed in U.S. dollars, which are provided solely for the convenience of the readers, have been translatedon the basis set forth in Note 1 to the accompanying consolidated financial statements.

ChuoAoyama Audit Corporation
Nagoya, Japan
June 27, 2002

Notice to Readers:
The accompanying consolidated financial statements are not intended to present the consolidated financial positionof the Seino Group and results of its operations and its cash flows in accordance with accounting principles andpractices generally accepted in countries and jurisdictions other than Japan. The standards, procedures andpractices used to audit such financial statements are those generally accepted and applied in Japan.

23

Board of Directors(As of June 27, 2002)

Chief Executive Officer
Chairman of Board of
Directors
Yoshikazu Taguchi

Managing Directors

Directors

Statutory Auditors

Atsuo Suzuki

Hideyuki Abe
Kunihiro Tahara
Kunitoshi Yamanaka
Yoshitaka Nasuno
Masashi Otsuka
Kunihiko Oka
Takayoshi Mito
Hidemi Maruta
Toshitaka Morita

Yoshio Matsuoka

Takeshi Morita
Takao Taguchi

Executive Vice President
Yoshitaka Taguchi

Mitsuo Shimizu
Yutaka Tanabe
Fujio Tanaka

Yoshikazu Taguchi

Yoshitaka Taguchi

Chief Executive Officer
Chairman of Board of Directors

Executive Vice President

Corporate Data
(As of June 27, 2002)

Company Name :Head Office :Date of Establishment :Paid-in Capital :Number of Shares Issued :Stock Listings :Transfer Agent :Independent Accountants :24

Seino Transportation Co., Ltd.
1, Taguchi-cho, Ogaki, Gifu 503-8501, Japan
Phone 81-584-81-1111 Fax 81-584-75-3366
November 1, 1946
¥32,471 million
176,820,926
The First Section of Tokyo Stock Exchange (code 9076)
The First Section of Nagoya Stock Exchange (code 9076)
The Mitsubishi Trust and Banking Corporation
ChuoAoyama Audit Corporation(A member firm of PricewaterhouseCoopers)

Seino Group☆Consolidated subsidiaries★Subsidiaries and affiliates accounted for by the equity method

Transportation Group★ Hokkaido Seino Transportation Co., Ltd.
General cargo haulage☆ Iwate Seino Transportation Co., Ltd.
General cargo haulage☆ Miyagi Seino Transportation Co., Ltd.
General cargo haulage
Fukushima Seino Transportation Co., Ltd.
General cargo haulage☆ Kanto Seino Transportation Co., Ltd.
General cargo haulage★ Saitama Seino Transportation Co., Ltd.
General cargo haulage★ Tokyo Seino Transportation Co., Ltd.
General cargo haulage☆ Kanagawa Seino Transportation Co., Ltd.
General cargo haulage
Enshu Seino Transportation Co., Ltd.
General cargo haulage
Mikawa Seino Transportation Co., Ltd.
General cargo haulage☆ Tokai Seino Transportation Co., Ltd.
General cargo haulage☆ Nohi Seino Transportation Co., Ltd.
General cargo haulage
Tango Seino Transportation, Inc.
General cargo haulage(As of March 31, 2002)☆ Göritz Intransco International
Speditionsgesellschaft m.b.H.
International air cargo forwarder and customs
broker in Germany☆ United-Seino Transportation (Malaysia)
Sdn. Bhd.
General cargo haulage in Malaysia☆ Nantong Seino Transportation Co., Ltd.
General cargo haulage in China☆ Seino Transportation (Thailand) Co., Ltd.
International air and sea cargo forwarder inThailand☆ Seino Merchants Singapore Pte Ltd.
International air and sea cargo forwarder in
Singapore☆ Seino Air Goal Transportation Co., Ltd.
International air and sea cargo forwarder inHong Kong☆ Toyota Vista Gifu Co., Ltd.
Automobile sales agency☆ Seino Trading Co., Ltd.
General trading house☆ Seino Information Service Co., Ltd.
Advanced information services and information processing☆ Japan Logistics Development Co., Ltd.
Information and materials distribution systems consulting☆ Asahi Leasing Co., Ltd.
Rental and lease of equipment and machines☆ Asahi Travel Service Co., Ltd.
Travel agency☆ Asahi Highland Co., Ltd.
Recreation and leisure

Schenker-Seino Logistic Co., Ltd.
Third Party Logistics (3PL) provider☆ Seino Engineering Co., Ltd.
Construction, drafting, and electrical and air
conditioning installation

Seino Hokkaido Express Co., Ltd.
General cargo haulage☆ Seino Family Co., Ltd.
Insurance agency services☆ Seino Tokyo Express, Inc.
General cargo haulage
Seino Kanagawa Express Co., Ltd.
General cargo haulage and automotive freight
handling☆ Seino Nagoya Express, Inc.
General cargo haulage☆ Seino Tsu-un Transportation Co., Ltd.
Transportation and general cargo haulage☆ Seino Osaka Express, Inc.
General cargo haulage☆ Seino Express Co., Ltd.
General cargo haulage☆ Seino Hokuriku Express, Inc.
General cargo haulage☆ Mie Seino Transportation Co., Ltd.
General cargo haulage☆ Seino ST Services, Inc.
General cargo haulage and security services★ Hinomaru Seino Transportation Co., Ltd.
General cargo haulage

Seino Logistic Hokkaido, Inc.
General cargo haulage★ Shikoku Seino Transportation Co., Ltd.
General cargo haulage

Asahi Bangkok Co., Ltd.
Management in Thailand★ Showa Seino Transportation Co., Ltd.
General cargo haulage
Takuma Seino Transportation Co., Ltd.
General cargo haulage☆ Netz Toyota Gifu Co., Ltd.
Automobile sales agency

Information and Sales Group☆ Toyota Home Gifu Co., Ltd.
Housing sales☆ Asahi Agency Co., Ltd.
Comprehensive advertising agency☆ Asahi Create Co., Ltd.
Comprehensive printer☆ Asahi Enterprise Co., Ltd.
Automobile sales and export☆ Seino Do Brasil Armazens Gerais Ltda.
Storage and maintenance in Brazil☆ Seino Security Service Co., Ltd.
Security services☆ Jms Gifu Corporation
Merchandising of automobile components☆ Medical Support Co., Ltd.
Disposal of medical facility wastes☆ Suito Taxi Co., Ltd.
General passenger transportation☆ Seino Finance Co., Ltd.
Financial business☆ Seino Enterprise, Ltd.
Group management and general consultation

NTT Anzen Hokan Center Co., Ltd.
Warehouse management☆ Seino Logix Co., Ltd.
Intermodal transportation operator and agency☆ Seino Sangyo Co., Ltd.
Merchandising of automobile components andtransportation-related services

Tokyo Nohin Daiko Co., Ltd.
Value added distribution services to the apparelindustry☆ Seino America, Inc.
International air and sea cargo forwarder andcustoms broker in the United States☆ Gifu Hino Motor Co., Ltd.
Automobile sales agency[Second section of the Nagoya Stock Exchange]

Logiwell Co., Ltd.
Total logistics service provider☆ Seino Europe GmbHInternational air and sea cargo forwarder inGermany☆ Toyota Corolla Gifu Co., Ltd.
Automobile sales agency[Second section of the Nagoya Stock Exchange]☆ Okinawa Seino Transportation Co., Ltd.
General cargo haulage

Seino International Co., Ltd.
General cargo haulage25

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

Printed in Japan