Annual Report
2011

Year Ended March 31, 2011

Profile

Seino Holdings Co., Ltd. (“the Company”) began
business as a trucking company in 1930 and wasincorporated in 1946. Based in the city of Ogaki, Gifu
Prefecture, we are a leading trucking company, expandingin step with the growth of the Japanese economy and thedevelopment of the nation’s extensive expressway network.
On October 1, 2005, the Company transferred its
transportation business and other operations to a newcompany—which has taken the original name Seino
Transportation Co., Ltd.—and was renamed Seino
Holdings Co., Ltd. a pure holding company structure.
The Seino Group currently consists of the pure holding
company Seino Holdings, 58 consolidated subsidiaries and 14
affiliates engaged in transportation services, vehicle sales,
merchandise sales, leasing for real estate services and otherservices.
In its mainstay Transportation Services business, theCompany has taken steps to build even more convenientlogistics systems, all the while adhering to its “customer-first”
principle. As of March 31, 2011, Seino offers efficienttransportation services throughout Japan via its 634 domestic
terminals, a fleet of 24,321 trucks and a trucking network that
averages 5,000 routes daily. Overseas, Seino has transferred its
international forwarding operations to Schenker-Seino Co.,
Ltd., a joint venture established with Schenker AG in
Germany. Through this alliance, theCompany aims to bolster its
competitiveness by optimizing the synergies
of Seino’s domestic transportation network
and Schenker’s global network andcutting-edge IT systems.
The Seino Group is committed toproviding rapid services that deliver totalcustomer satisfaction and will proceed down
the “Road to Success” to become a highly
profitable company through initiatives todevelop a progressive business model thatwill become the standard fornext-generation transportation business.

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

Contents
Financial Highlights

1

To Our Shareholders, Customers and Friends

2

Special Feature

4

Review of Operations

6

Financial Review

8Six-year Summary

9

Consolidated Balance Sheets

10

Consolidated Statements of Income

11

Consolidated Statements of Comprehensive Income (Loss) 12
Consolidated Statements of Changes in Net Assets

12

Consolidated Statements of Cash Flows13

Notes to Consolidated Financial Statements

14

Report of Independent Auditors

24

Seino Group

25

Board of Directors(As of June 28, 2011)
Chairman andChief Executive Officer
Yoshikazu Taguchi

Outside Directors
Yuji Tanahashi
Kenjiro Ueno

President andChief Operating Officer
Yoshitaka Taguchi

Standing Statutory Auditors
Yoshio Matsuoka
Takahiko Kumamoto

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

Outside Statutory Auditors
Fumio Kato
Eiji Kasamatsu

SEINO HOLDINGS CO., LTD.

Financial Highlights(Billions of Yen)

For the Years Ended March 31, 2011, 2010 and 2009

Thousands of
U.S. Dollars (Note)

Millions of Yen
2011

CONSOLIDATED BASIS:
Operating revenue
Operating income
Income before income taxes and minority interests
Net income
Net income per share (in yen and U.S. dollars)2010¥ 497,612 ¥ 485,808 ¥ 433,766
6,621
3,333
12,326
12,9406,941
13,136
9,477
3,391
8,449
47.60
17.03
42.44

$ 5,995,325
148,506
158,265
101,795
0.51

Millions of Yen

Thousands of
U.S. Dollars (Note)

2011

2010

2011

2009

CONSOLIDATED BASIS:
Cash and cash equivalents, and short-term investments ¥ 55,889 ¥ 51,302 ¥ 42,197
276,545
273,710
246,790
Property and equipment, net of accumulated depreciation
487,701
484,674
439,372
Total assets
82,281
86,44964,812Long-term debt and other long-term liabilities
307,806
301,792
291,564
Net assets
1,508.40 1,478.77
1,433.40
Net assets per share (in yen and U.S. dollars)(Note)

2011

2009

$

673,361
3,331,867
5,875,916
991,338
3,708,506
18.17

U.S. dollar amounts are translated at ¥83 = U.S. $1, only for the convenience of readers.

2009

2010

2011

2010

2011

2010

2011

Net income(Billions of Yen)

20
15
10
5
0
2009

(Billions of Yen)

Corporate Data
(As of March 31, 2011)

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

2009

Seino Holdings Co., Ltd.
1, Taguchi-cho, Ogaki, Gifu 503-8501, Japan
Tel: 81-584-82-3881 Fax: 81-584-82-5040
November 1, 1946
¥42,482 million
207,679,783
The First Section of Tokyo Stock Exchange (code 9076)
The First Section of Nagoya Stock Exchange (code 9076)
Mitsubishi UFJ Trust and Banking Corporation
KPMG AZSA LLC

1

Message from the Management

To Our Shareholders, Customers and Friends
We would like to take this opportunity to express our appreciation to our stakeholders, including shareholders andother investors, for the consistent support you have shown us over the years. The results of the fiscal year ended
March 31, 2011 (April 1, 2010 to March 31, 2011) are presented herein.

hhBusiness Environment
In the fiscal year under review, Japanese economic
conditions remained uncertain. Despite signs ofmoderate recovery due mainly to improvement incorporate earnings and capital investment, employment
and income conditions remained tough and the yen
continued to appreciate. Coupled with this, the effectsof governmental policies dissipated, leading to further
stagnation since the third quarter while raw material
prices rose sharply.
In the transportation industry, the tough businessenvironment persisted in spite of upward momentum in
consumer-related bulk shipments as customer demands
to reduce distribution costs drove fierce competition
within the industry and rising environmental spending
and fuel costs put further pressure on profits.
In addition, the Great East Japan Earthquake thatstruck on March 11, 2011 forced disruptions to
distribution networks in disaster-afflicted areas. The
Seino Group did its utmost to transport emergency
supplies and restore its distribution network.

hh
Initiatives and Results for the Year
Operating under such conditions, the Seino Groupfocused on enhancing customer satisfaction, which
included striving to produce results that exceeded
expectations, and boosting corporate value in the final
year of our three-year medium-term management plan,
the “Customer Satisfaction (CS) Improvement Plan.”
Additionally, the Seino Group promoted “Leap
Forward” as our slogan to emphasize the importance offurther development and evolution as a united whole
while leveraging past cases of success and accumulated
know-how.
As a result, operating revenue for the fiscal year
ended March 31, 2011 was ¥497,612 million, up 2.4%
year-on-year, operating income was ¥12,326 million,
up 86.2%, and net income was ¥8,449 million, down
10.8%.

hh
Future Outlook
The Japanese economy is expected to worsen going2

forward. The Great East Japan Earthquake and theaccident at the Fukushima Daiichi nuclear power plant
are projected to lead to economic loss with power
shortages predictably stagnating economic activities.
Added to this, the difficult employment environment is
forecast to continue and the Middle East remains
politically unstable.
In the transportation industry, declining productionin Japanese industry caused by supply chain disruptions
and power supply issues is expected to significantly
impede progress. Further, an increase in environmental
protection management costs for necessary ongoingprograms and persistently rising fuel costs are projected
to force a continuation of difficult business conditions.
Under these circumstances, the Seino Group
formulated a medium-term management plan titled“Daring to Change,” with fiscal 2012 as the first year
(April 2011~March 2014). We will work towards
achieving the goals of this plan. Amid a trying businessenvironment, we will aim to ensure distribution that
fulfills the needs of our customers by matching thefunctions of each group company with respective
customers and will always strive to provide “that little
bit extra” to achieve our goals in the three-year period.
The Seino Group will implement the following specificinitiatives under the new three-year management plan
while further enhancing business for small-lot
transportation in the commercial sector, a key businessarea: (1) Expand logistics business, air freightconsignment (“Kangaroo SAVE Kyubin” service
promises delivery before noon the next day within an
800 km area) and e-commerce; (2) Build a competitive
cost structure; (3) Establish an individual-focused
network by innovating the express courier service into acommunity concierge service (CCS) that makes lifeeasier for customers in the community in numerous
ways; (4) Implement measures to increase profitability
in businesses within our Vehicle Sales sector(maintenance leasing); and (5) Expand sales of fuel andpaper products in our Merchandise Sales sector.
As shown by these initiatives, the Seino Group has adiversified business portfolio centered on
Transportation Services that also includes Vehicle
Sales, Merchandise Sales, Leasing for Real Estate
Services and Other Business. Based on thesecircumstances, we will strive to optimize our financial
resources by reinforcing capital ties and examine thepossibility of business restructuring in order to further
strengthen the corporate group and drive innovation.
Each group company will endeavor to enhance
profitability and we will promote the establishment of a
profitable structure and shareholder-focusedmanagement by further improving management
efficiency throughout the Group.
We forecast operating revenue of ¥492.0 billion(down 1.1% compared with the previous fiscal year),ordinary income of ¥18.2 billion (down 9.6%) and net
income of ¥7.0 billion (down 5.3%) for the fiscal year
ending March 31, 2012.

hh
Corporate GovernanceSeino employs a corporate auditor system. As of
March 31, 2011, the Board of Directors consisted of 10
directors, including two outside directors. In addition
to making swift and appropriate decisions on suchimportant matters as business restructuring andstrategic investments, the Board of Directors is taking
important steps to strengthen auditing functions andachieve greater management transparency.
The Company also has four corporate auditors,
including two outside auditors. Auditors are committed
to improving compliance and enhancing the trust thatsociety has in the Company through such activities asattending meetings of the Board of Directors,
conferences of directors and other importantgatherings, and auditing business execution.

Yoshikazu Taguchi
Chairman and Chief Executive Officerhh
To Our Shareholders
In keeping with our basic business policy, Seino
seeks to enhance shareholders’ equity and improve
profitability from a long-term perspective, while
maintaining stable dividends. Accordingly, Seino has
maintained a regular annual cash dividend per share of¥11.00 for the fiscal year ended March 31, 2011, thesame amount as in the previous fiscal year.
Through the implementation of our new mediumterm management plan, we aim to be the preeminentcommercial freight transportation company in Japan
while at the same time raising corporate andshareholder value. We ask shareholders, customers andfriends for your continued understanding and support.

Yoshitaka Taguchi
President and Chief Operating Officer

3

Special Feature

Expanding the Scope of Business and Creating New ValueIn the fiscal year ended March 31, 2011, the Seino Group
achieved our intent to always provide the ultimate service tocustomers and fulfill our mission of contributing to the nationand to society during the final year of the three-year mediumterm management plan, the “Customer Satisfaction (CS)
Improvement Plan.”
We are expanding businesses that we should take on as alogistics firm in the course of improving management efficiency
in line with a “ backflow of information” on customer
preferences that manufacturers now receive due to rapid
development of information infrastructure.
Seino Holdings Co., Ltd. has added financial services to ourlogistics services amid this trend and we are making an effort toassist customers with their commercial transactions in a variety
of ways as an integrated logistics provider. The initiatives ofeach business group during the fiscal year ended March 31,
2011 are detailed below.

Initiatives by Business Group
Transportation Services Business Grouphh
Rapid Restoration of Transport Following
the Great East Japan Earthquake

The Great East Japan Earthquake that occurred on March 11,2011 ripped apart the distribution network in affected areas,causing a succession of failures in freight delivery and pick-up forthe transport industry in affected areas. The Seino Transportation
Group was the first in the industry to resume transport to ourservice locations in affected areas on March 15, and we also
subsequently made an all-out effort to transport emergency goods
and restore the distribution network.
We are also striving to increase convenience for users byproviding the latest information on the status of package pick-up
and delivery in affected areas.

hhSeino Holdings Restructures Business inKyushu and Launches Kyushu Seino
Transportation Co., Ltd.

Seino Holdings restructured the transport business in the
Kyushu region in April 2011. The business in the same districts
in Kyushu that had previously been handled by two wholly
owned subsidiaries, Seino Transportation and Kyushu Seino
Transportation, was integrated into one business with theestablishment of a new company, the name of which waschanged to Kyushu Seino Transportation Co., Ltd.
The new company has 28 land-based branches, two airport
branches, three moving centers and one distribution center.
There are 2,077 employees and 1,662 vehicles. We have beenable to resolve the inconvenience customers felt with theintermingling of multiple Seino Group companies up to thispoint and are working to reduce duplication and increase
efficiency to improve our competitiveness in Kyushu.

4hhSeino Holdings Co., Ltd. Establishes Seino
Financial Co., Ltd.

Seino Holdings established Seino Financial, a new company
to support e-commerce (EC) sites, in April 2010. It is a onestop shop for building and managing EC sites, logistics,
payment settlement, maintaining liquidity for accounts
receivable and other services.
The launch of EC business support by the company has
made it possible for the Seino Transportation Group to provide
payment by credit card and online at convenience stores whenordering in addition to the existing cash on delivery payment
method. It also enables us to take advantage of our strength inhandling everything from door-to-door delivery to heavy goods
to gain entry into new sources of demand stemming from mailorder and Internet supermarkets handling heavy goods forindividual consumers, internet sales between companies andbackyard support services for EC companies.

hhSeino Transportation Business Alliancewith Raccoon Co., Ltd., Operator of a
Member-based B-to-B Site

Seino Transportation entered a business alliance with
Raccoon Co., Ltd., an operator of the “Super Delivery” website
for business-to-business (B-to-B) transactions, and begantransport services for the companies featured on the site inJanuary 2011.
Super Delivery is a B-to-B site where manufacturers andretailers nationwide can interact. Use of the Internet makes it
possible to reduce manufacturer operating costs involved ingaining access to sales channel and to present new products inreal time without regard to location. It enables retailers to orderanytime, 24 hours a day, and to procure only the productquantity desired for small-lot orders with a short delivery
timeframe. It also allows companies to use the same payment
conditions for transactions with multiple companies.
The current business alliance renders negotiations for
distributor selection unnecessary for companies that are
members of Super Delivery. Seino Transportation will also
support participation in Super Delivery, thus we anticipate
gaining entrance into more markets.

hh
Seino Transportation Begins Distributionof Email Magazine

Seino Transportation began distributing “Kangaroo
Connection,” an email magazine designed for customers, in
December 2010. It is distributed once a month with content
including the introduction of new services, area news, a column
and other items. Information on delays in delivery due toweather, disaster or other reasons is also transmitted as needed.
Work involving the Internet will increase with the spread of
EC business. Accordingly, Seino Transportation holds highexpectations for the magazine as a tool that can quickly provide
information to everyone via the Internet in addition to existing
leaflets and sales pitches by sales reps.

hhSeino Transportation Opens Himeji Branch

Seino Transportation relocated the Himeji Branch in
Himeji, Hyogo Prefecture, to a new building and commenced
business in January 2011. The new Himeji Branch is in a highly
convenient location about two kilometers from the West HimejiInterchange of the Sanyo Expressway and harbors WesternJapan’s largest warehouse, which serves as a distribution centerand also has a truck terminal. The expansive facilities are usedin the relay of highway freight from Okayama and Hiroshima
toward Joshin-etsu, which had previously been handled by the
Shinmei Branch, andfrom Kanto to
Okayama,
Hiroshima andYamaguchi
Prefectures. This has
lightened thenighttime relay work
handled by both the
Shinmei and theKasai branches.

resolved a problem with the entrance and exit of vehicles in theold facility, and we are aiming to increase efficiency through theeffective allocation of personnel and increase revenues via
warehouse utilization.

hhSeino Tsu-un Transportation Accepts
Consignment of School Lunch Delivery

Seino Tsu-un Transportation began delivery for the Nanbu
School Lunch Center in Ogaki City, Gifu Prefecture, on
September 1, 2010. We won the consignment bid in 2008 andare making deliveries to 18 elementary schools andkindergartens in the city with a fleet of eight delivery vehicles
and 18 staff members. For drivers, we use local senior citizens
and Seino employees who have reached mandatory retirementage. Our vehicles run on environmentally friendly compressed
natural gas.

hhSeino Transportation Opens the
Sannomiya Branch Business Center

In August 2010, Seino Transportation opened a KangarooBusiness Center at the Kobe Sannomiya Branch. The Kobe
branch serves as themother branch for
Kangaroo BusinessCenters. Close to JR
Sannomiya Station, it is alocation where officecomplexes and commercial
facilities are concentrated.
Kangaroo BusinessCenters are urban
locations for pick-up anddelivery. Area supporters
use trucks to provide
attentive, locally based
service that isenvironmentally friendly.

hh
Mie Seino Transportation Establishes New
Ise Sales Oﬃce

Mie Seino Transportation consolidated and relocated its
existing Ise Sales Office and Ise Branch Office, beginningbusiness as the new Ise
Sales Office inNovember 2010. The
new Ise Sales Office isin a good location,
about three minutes
from the Tamaki
Interchange on the Ise
Expressway, and has aground-floor space of
65,000 m 2. This

Vehicle Sales and Other Businesseshh
New Netz Toyota Gifu Launched

The Netz Toyota Gifu and Netz Toyota Centro Gifu in the
Seino Group were merged in July 2010 and newly debuted asNetz Toyota Gifu.
The former Netz Toyota Gifu had 25 branches in Gifu
Prefecture and Netz Toyota Centro Gifu had 16 branches.
Duplicate branches were eliminated or consolidated in themerger, and we will strive to utilize human resources effectively
and improve our competitiveness while also working to improvecustomer satisfaction.

hhNagahama Sales Oﬃce of Shiga Hino
Motors Completed

We completed the Nagahama Sales Office, the third location
after the existing Nitto and Hikone Branches for Shiga Hino
Motors and commenced business in October 2010. We anticipate
expanding business to the Kohoku district (north of Lake Biwa)
in northern Shiga Prefecture in addition to our existingcustomers in Shiga Prefecture who had been serviced by the
Hikone Branch and Gifu Hino Motors Ogaki Branch.

5

Review of Operations
Transportation Services
In the Transportation Services business, we worked to expand
logistics business, develop timetables for trunk-routetransportation, strengthen our network and improve operational
accuracy, which are the main areas of focus under our three-year“Customer Satisfaction (CS) Improvement Plan.” At the sametime, we made steady progress in our Internet-based distribution
service as a means to increase the corporate value of the Seino
Group.
As part of these efforts, we promoted further expansion of
our service network and enhanced efficiency in operating
activities. This included relocating and building the new Himeji
Branch of Seino Transportation Co., Ltd. (Himeji City) andmerging the Ise Sales Office and Ise Branch Office to form the
new Ise Sales Office (Tamaki City, Mie Prefecture).
In addition, Seibu Transportation Co., Ltd. transferred its

Vehicle Sales
In the Vehicle Sales business, we continued working toestablish a profitable structure amid an end to subsidies for
eco-cars and a forecast decline in new car sales following a rushin demand. Initiatives included a focus on sales of car accessories
and installment insurance in addition to used car sales as well as
strengthening service businesses such as automobile inspection,
maintenance and storage.
The number of new passenger vehicle sales until August easily
surpassed levels recorded in the same period of the previous
fiscal year due to the effect of subsidies and tax discounts coupledwith marketing efforts linked to the local population. The end of
subsidies for eco-cars in September led to a decline in sales and acooling off in consumer confidence. As a result, total passenger
vehicle sales fell short of the previous fiscal year.

Merchandise Sales
Sales in this segment grew significantly year-on-year due to anincrease in sales of fuel, the segment’s mainstay product, owing toaggressive marketing efforts, coupled with rising selling prices.

6

head office functions to the Tatsumi Distribution Center (Kotoku, Tokyo), which has strengthened mobility in sales andreduced expenses. Seino Hikkoshi Co., Ltd. relocated its head
office to Tokyo, Japan’s economic hub, in order to develop
business specializing in sales. Elsewhere, Seino Transportation
executed major structural reforms that included integrating andstreamlining its head office functions to improve the system of
direct contact with customers and more quickly reflect feedbackin operations.
We also continued with environmentally friendly driving
activities aimed at contributing to environmental preservation
and reducing costs.
As a result, operating revenue for this segment was ¥368,771
million (US$4,443,024 thousand), up 1.7% year-on-year, andoperating income was ¥6,494 million, up 268.7% year-on-year(US$78,241 thousand).

Sales of new trucks grew on a year-on-year basis due to theeffect of subsidies and a rush in demand prior to the enforcementof new long-term exhaust gas regulations for large trucks. Sales
of used trucks also exceeded levels registered in the previous
fiscal year owing primarily to efforts to bolster auctions.
In other developments, Shiga Hino Motors Co., Ltd.
established the Nagahama Sales Office, its third site, which willtake over the service area previously handled by the Hikone
Sales Office of Shiga Hino Motors and the Ogaki Branch of
Gifu Hino Motors. This will enable enhanced customer
satisfaction while the new site has already started to vigorously
expand sales activities north of Lake Biwa.
As a result, operating revenue for this segment was ¥87,075
million (US$1,089,073 thousand), down 0.1% year-on-year, andoperating income was ¥3,830 million (US$46,145 thousand), up
16.2% year-on-year.

In addition, sales of domestic tissue papers remained solid.
Operating revenue for this segment was ¥27,104 million(US$326,554 thousand), up 24.5% year-on-year, and operating
income was ¥561 million (US$6,759 thousand), down 6.3% yearon-year.

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

Other Business(Osaka City), and Akashi (Akashi City).
Companies outside the Transportation Services BusinessGroup also engage in leasing with the aim of effectively utilizing
assets.
Operating revenue for this segment was ¥1,429 million(US$17,217 thousand), up 13.0% year-on-year, and operating
income was ¥1,197 million (US$14,422 thousand), up 13.9%
year-on-year.

for this segment was ¥13,233 million (US$159,434 thousand),up 1.8% year-on-year, and operating income was ¥780 million(US$9,397 thousand), up 280.5% year-on-year.

Our Other Business segment includes information services
business and construction contract business. Operating revenue

Operating Revenue by Business Segment(Millions of yen)
FY3/11Results
Transportation Services

FY3/10Composition

Results

Composition

Year-on-Year

368,77174.1%

362,628

74.6%

1.7%

Vehicle Sales

87,07517.5%

87,13217.9%(0.1)%

Merchandise Sales

27,104

5.4%

21,779

4.5%

24.4%

Leasing for Real Estate Services

1,429

0.3%

1,265

0.3%

13.0%

Other

13,2332.7%

13,004

2.7%

1.8%

Total

497,612100.0%

485,808

100.0%

2.4%

Composition

Year-on-Year

Operating Income by Business Segment(Millions of yen)
FY3/11Results

FY3/10Composition

Results

Transportation Services

6,494

52.7%

1,761

26.6%

268.6%

Vehicle Sales

3,830

31.1%

3,297

49.8%

16.2%

561

4.5%

599

9.0%

(6.4)%

1,197

9.7%

1,051

15.9%

13.9%

Other

780

6.3%

205

3.1%

280.5%

Total

12,862104.3%

6,913

104.4%

86.0%

Elimination(536)(4.3)%(292)(4.4)%—

Consolidated

12,326100.0%

6,621

100.0%

86.2%

Merchandise Sales
Leasing for Real Estate Services

7

Financial Review
Operating Results

the previous fiscal year-end.
Total current assets increased 0.8% to ¥166,726 million(US$2,008,747 thousand) compared with the previous fiscal
year-end. Total fixed assets increased 0.5% from the previous
fiscal year-end to ¥320,975 million (US$3,867,169 thousand).
Total current liabilities increased 1.2% compared with theprevious fiscal year-end to ¥97,614 million (US$1,176,072
thousand). This was due primarily to increases in accounts
payable, accrued expenses and income taxes payable despite
decreases in operating accounts payable and trade accounts
payable.
Long-term liabilities decreased 4.8% from the previous
fiscal year-end to ¥82,281 million (US$991,338 thousand).
The main factors behind this result were decreases in deferred
tax liabilities and negative goodwill.
Net assets rose 2.1% from the previous fiscal year-end to¥307,806 million (US$3,708,506 thousand). The major factor
was an increase in retained earnings derived from the postingof net income. Shareholders’ equity increased 0.9 percentage
point to 61.6%.

Consolidated operating revenue for Seino Holdings for the
fiscal year ended March 31, 2011 increased 2.4% from theprevious fiscal year to ¥497,612 million (US$5,995,325
thousand). This was due to increased sales in theTransportation Services business, Merchandise Sales business,
Leasing for Real Estate Services business and Other business.
Operating costs of revenues increased 1.4% from theprevious fiscal year to ¥452,263 million (US$5,448,952
thousand). The ratio of operating costs to operating revenue
was 90.9%, down 0.9 percentage point from the previous
fiscal year.
Selling, general and administrative expenses decreased
1.0% to ¥33,023 million (US$397,867 thousand), while
operating income surged 86.2% to ¥12,326 million(US$148,506 thousand).
Other income (expenses) stood at ¥810 million (US$9,759
thousand). Key positive factors were the amortization of
consolidating adjustment account (negative goodwill) in theamount of ¥5,374 million (US$64,747 thousand) and interestand dividend income of ¥488 million (US$5,879 thousand).
Negative factors included loss on adjustment for changes ofaccounting standard for asset retirement obligations of ¥1,678
million (US$20,217 thousand) and impairment loss on fixed
assets of ¥3,029 million (US$36,494 thousand).
As a result, income before income taxes and minority
interests amounted to ¥13,136 million (US$158,265
thousand), up 1.5% year-on-year. Net income decreased
10.8% to ¥8,449 million (US$101,795 thousand) due to anincrease in corporate tax.
Net income per share was ¥42.44 (US$0.51), and returnon equity was 2.8%. Annual cash dividends per share weremaintained at ¥11.00 (US$0.13), the same as in the previous
fiscal year.

Cash FlowsNet cash provided by operating activities decreased ¥1,215
million compared with the previous fiscal year to ¥27,955
million (US$336,807 thousand) due mainly to a decline intrust beneficiary rights in the previous fiscal year.
Net cash used in investing activities increased ¥16,762
million compared with the previous fiscal year to ¥20,107
million (US$242,253 thousand) due primarily to an increasein payments for the acquisition of intangible and tangible
fixed assets.
Net cash used in financing activities decreased ¥15,283
million compared with the previous fiscal year to ¥2,516
million (US$30,313 thousand) due mainly to repayment ofshort-term debt at a newly consolidated subsidiary in theprevious fiscal year.
Consequently, cash and cash equivalents at end of year
increased ¥5,325 million compared with the previous fiscal
year to ¥48,992 million (US$590,265 thousand).

Financial Position

Total assets at the end of the fiscal year under review were¥487,701 million (US$5,875,916 thousand), up 0.6% versus
Operating income to operating revenue
Net income (loss) to operating revenue

Shareholders’ equity ratio

(%)

(%)

(%)

5

5

80

4

4

3

3

2

2

1

1

0

0

-1

-1

-2

-2

-3

-3

-4

-4

-5

8

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

2006

2007

2008

2009

2010

2011

-5

60

40

20

2006

2007

2008

2009

Operating income to operating revenue

Net income (loss) to total assets

Net income (loss) to operating revenue

Return on equity ratio

2010

2011

0

2006

2007

2008

2009

2010

2011

SEINO HOLDINGS CO., LTD. and Consolidated Subsidiaries

Six-year Summary

For the Years Ended March 31, 2011, 2010, 2009, 2008, 2007 and 2006
Millions of Yen
2011
For the year:
Operating revenue:
Transportation services
Vehicle sales
Merchandise sales
Leasing for real estate services
Other
Operating costs
Selling, general andadministrative expenses
Operating income
Net income (loss)
At year-end:
Current assets
Total assets
Current liabilities
Short-term borrowings
Long-term debt, including current maturities
Net assets

¥

2010

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

2009

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

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

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

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

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

33,023
12,326
8,449

33,342
6,621
9,477

32,6073,333
3,391

31,4749,925
6,018

30,295
10,796
8,797

30,443
10,082(8,334)

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

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

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

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

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

161,208
446,933
92,8004,371
8,247
278,916Yen
Per share data:
Net (loss) income:-BasicCash dividends¥

Number of shares issued

42.44
11.00

¥

207,679

47.60
11.00

¥

17.03
11.00

¥

Thousands
207,679

207,679

30.27
11.00

¥

44.71
11.00

¥

(43.35)
11.00

207,679

207,679

207,679

2.2
1.3
1.3
2.1
62.9
181.1
56.9
36.6

2.4
2.0
1.9
3.1
61.2
171.5
61.2­­­­
24.5­­­­

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

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

2.5
1.7
1.7
2.8
61.6
170.8
59.9
26.2

1.4
2.0
2.0
3.2
60.7
171.6
62.1
23.2

0.8
0.8
0.8
1.2
64.9
180.9
51.8
65.1

Current ratio

Debt equity ratio

Payout ratio

(%)

(%)

(%)

120

70

200

60

160

50

90

40
30

120

20

60

10

80

0

30

40

-10
-20

0

2006

2007

2008

2009

2010

2011

0

2006

2007

2008

2009

2010

2011

-30

2006

2007

2008

2009

2010

2011

9

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Balance Sheets
March 31, 2011 and 2010

Thousands of
U.S. dollars
2011

Millions of yen
2011
Assets:Current assets:
Cash and cash equivalents (Note 13)
Short-term investments (Notes 4 and 13)
Trade receivables (Note 13)
Inventories (Note 3)
Deferred tax assets (Note 11)
Other current assets
Allowance for doubtful accounts
		
Total current assets¥

48,992
6,897
96,808
7,577
4,633
2,203
(384)
166,726

2010¥

43,667
7,635
97,076
10,588
4,194
2,798
(507)
165,451$

590,265
83,096
1,166,361
91,28955,81926,543(4,626)2,008,747

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

530,780(254,235)
276,545

520,524(246,814)
273,710

6,394,939(3,063,072)
3,331,867

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

18,6273,000
12,264
10,53944,430487,701

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

224,422
36,145
147,759
126,976535,302$ 5,875,916

2,315
328
65,48812,004
4,558$

Current liabilities:
Short-term borrowings (Notes 6 and 13)
Current portion of long-term debt (Notes 6 and 13)
Trade payables (Note 13)
Accrued expenses
Income taxes payable
Provision for loss on disaster (Note 16)
Other current liabilities (Notes 11 and 15)
		Total current liabilities¥¥

Long-term debt (Notes 6 and 13)
Employee retirement benefit liability (Note 7)
Asset retirement obligation (Note 15)
Accrued severance indemnities for directors and statutory auditors
Deferred tax liabilities (Note 11)
Negative goodwill (Note 20)
Other long-term liabilities
		
Total liabilities

2,515
190
65,177
12,3944,775
186
12,377
97,614¥¥—

11,74096,43330,301
2,289
785,265
149,325
57,5302,241
149,121
1,176,072

458
55,0182,428
1,384
13,176
9,355
462
179,895

1,473
14,556
14,729463
182,882

5,518
662,868
29,253
16,675
158,747
112,7115,566
2,167,410

42,482
74,266
189,207(8,606)297,349

42,482
74,266
183,105(8,595)291,258

511,831894,7712,279,603(103,687)
3,582,518

3,288
(93)
(316)
2,879
7,578
307,806
487,701

3,809
(251)
(457)
3,101
7,433
301,792
484,674

39,614(1,120)(3,807)
34,68791,301
3,708,506$ 5,875,916

654
54,574—

Commitments and contingent liabilities (Notes 8 and 9)
Net Assets:
Shareholders’ equity (Note 10):
Common stock: 794,524,668 shares authorized and 207,679,783 shares issued
Capital surplus
Retained earnings
Less treasury stock at cost: 8,642,914 shares in 2011 and 8,624,246 shares in 2010		Total shareholders’ equity
Accumulated other comprehensive income:Net unrealized gains on available-for-sale securities
Land revaluation decrement
Foreign currency translation adjustments
		
Total accumulated other comprehensive income
Minority interests		
Total net assets
		
Total liabilities and net assets
See accompanying Notes to Consolidated Financial Statements.
10

¥

¥

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Income
For the Years Ended March 31, 2011, 2010 and 2009

2009

Thousands of
U.S. dollars
2011

433,766$ 5,995,325

Millions of yen
2011
Operating revenue (Notes 14 and 20)¥

Operating costs and expenses (Notes 7 and 20):
Operating costs
Selling, general and administrative expenses

2010

497,612¥

485,808¥452,263
33,023
485,286
12,326445,845
33,342
479,187
6,621

397,826
32,607
430,4333,333

5,448,952
397,867
5,846,819
148,506

488
(51)
(11)
15

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

775
(87)
(138)
2

5,879
(614)
(133)
181

4,361
(1,596)(1,321)50(1,678)
(404)
(670)
(166)
(300)
1,950
810
13,136

—
—
—
—
—
—
—

—
—
—
—
—
—
—

1,782
6,319
12,940

1,562
3,608
6,941

(518)
64,747(36,494)(4,976)(1,289)(2,145)398(20,217)(4,867)(8,072)(2,000)(3,614)23,493
9,759
158,265

Income taxes (Note 11):
Current
Deferred		Total income taxes

6,984(2,657)
4,327

5,628
(2,357)
3,271

2,516
971
3,487

84,144(32,012)52,132

Income before minority interests (Note 2(s))

8,809

9,669

3,454

106,133

		

Operating income

Other income (expenses):
Interest and dividend income
Interest expenses
Loss on sale or disposal of property and equipment
Gain (loss) on sale of investment securities
Gain on cancellation of leasehold contracts
Equity in net loss of affiliates
Amortization of negative goodwill (Note 20)
Impairment loss on fixed assets (Notes 2(j) and 20)
Loss on write-down of investment securities(Loss) gain on abolishment of retirement benefit plan (Note 7)
Loss on liquidation of subsidiaries and affiliates
Gain on negative goodwill (Note 20)
Loss on adjustment for changes of accounting standard for asset retirement obligations (Note 2(s))
Loss on disasterLump-sum payment for withdrawal from employees pension fund (Note 7)
Retirement benefit expenses (Note 7)
Settlement package
Miscellaneous, net
		

—

(43)
5,374
(3,029)
(413)
(107)
(178)
33

Income before income taxes and minority interests

Minority interests in net income of subsidiaries		
Net income

¥

360
8,449

¥

192
9,477

¥

63
3,391

Yen
Per share:
Net income
Cash dividends

¥

42.44
11.00

¥

47.60
11.00

—

—
—

$

4,338
101,795

U.S. dollars
¥

17.03
11.00

$

0.51
0.13

See accompanying Notes to Consolidated Financial Statements.
11

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Comprehensive Income
For the Year Ended March 31, 2011

Millions ofyen
2011
Income before minority interests
Other comprehensive income (Note 17):
Net unrealized gains on available-for-sale securities
Foreign currency translation adjustments
Share of other comprehensive income of associates accounted for using equity method		
Total other comprehensive income
Comprehensive income (Note 17)
Comprehensive income attributable to (Note 17):
Owners of the parent
Minority interests

¥

8,809

¥

(513)
141
(1)
(373)
8,436
8,069
367

Thousands of
U.S. dollars
2011$

106,133$(6,181)
1,699(12)(4,494)
101,639
97,217
4,422

SEINO HOLDINGS CO., LTD. and Subsidiaries;

Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2011, 2010 and 2009

Shareholders’ equity
Number ofshares ofcommonCommonstock issued
stock

CapitalsurplusRetainedearnings

Accumulated other comprehensive income

Total
Net unrealized
Foreign
Total
gains onLand
currency accumulated
other
Treasury shareholders’ available-for- revaluation translation comprehensive Minority
stock
equitysale securities decrement adjustments income
interests

Total net
assetsMillions of yen
Balance at March 31, 2008
207,679,783 ¥ 42,482 ¥ 74,266 ¥Net income for the year———
Cash dividends———
Fractional shares acquired, net———
Net changes in items other thanshareholders’ equity———
Balance at March 31, 2009
207,679,783 ¥ 42,482 ¥ 74,266 ¥Net income for the year———
Cash dividends———
Reversal of land revaluation decrement———
Sales of treasury stock and fractional
shares, net———
Net changes in items other thanshareholders’ equity———
Balance at March 31, 2010
207,679,783 ¥ 42,482 ¥ 74,266 ¥Net income for the year———
Cash dividends———
Reversal of land revaluation decrement———
Sales of treasury stock and fractional
shares, net———
Net changes in items other thanshareholders’ equity———
Balance at March 31, 2011
207,679,783 ¥ 42,482 ¥ 74,266 ¥

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

(305) ¥———

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

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

—
(305) ¥———

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

—

(9)

(9)

—

—
—
—
1,658
183,105 ¥ (8,595) ¥ 291,258 ¥ 3,809 ¥
8,449
—
8,449
—
(2,189)—(2,189)
—
(158)
—
(158)
—
—

(11)

(11)

—

—
—
—
(521)
189,207 ¥ (8,606) ¥ 297,349 ¥ 3,288 ¥—
54(251) ¥————
158(93) ¥

—

—

—

(9)

76
1,788
1,216
3,004
(457) ¥ 3,101 ¥ 7,433 ¥ 301,792
—
—
—
8,449
—
—
—
(2,189)
—
—
—
(158)
—

—

—

(11)

141
(222)
145
(77)
(316) ¥ 2,879 ¥ 7,578 ¥ 307,806

Thousands of U.S. dollars
Balance at March 31, 2010
Net income for the year
Cash dividends
Reversal of land revaluation decrement
Sales of treasury stock and fractional
shares, net
Net changes in items other thanshareholders’ equity
Balance at March 31, 2011

$511,831 $894,771 $ 2,206,085 $(103,554) $ 3,509,133 $ 45,891 $ (3,024) $——101,795—
101,795————(26,373)—(26,373)————(1,904)—(1,904)
—
—
—

—

(133)

(133)

—

—

—

—

—

(133)

—
—
—
—
— (6,277)
1,904
1,699
(2,674)
1,747(927)$511,831 $894,771 $ 2,279,603 $(103,687) $ 3,582,518 $ 39,614 $ (1,120) $ (3,807) $ 34,687 $ 91,301 $ 3,708,506

See accompanying Notes to Consolidated Financial Statements.
12—(5,506) $ 37,361 $ 89,554 $ 3,636,048———
101,795———(26,373)———(1,904)

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Cash Flows
For the Years Ended March 31, 2011, 2010 and 2009

Thousands of
U.S. dollars
2011

Millions of yen
2011
Cash flows from operating activities:
Income before income taxes and minority interests¥
		 Adjustments for:			 Depreciation
			 Impairment loss on fixed assets
			 Amortization of negative goodwill
			 Amortization of goodwill
			 Gain on negative goodwill
			 Net provision (reversal) for employee retirement benefit liability
			 Loss on sale or disposal of property and equipment
			 Equity in net loss of affiliates			 Loss on write-down of investment securities
			 (Gain) loss on sale of investment securities
			 Net reversal for accrued severance indemnities for directors and statutory
auditors
			 Increase in provision for loss on disaster			 Loss on liquidation of subsidiaries and affiliates			 Loss on adjustment for changes of accounting standard for asset
retirement obligations
Decrease (increase) in trade receivables
Decrease (increase) in inventories(Decrease) increase in trade payables
Decrease in beneficial interest in trusts in relation to trade payables
Other, net
				Sub-totalInterest and dividends received
Interest paid
Income taxes paid				Net cash provided by operating activities

2010

13,136¥2009

12,940

¥

6,941

$

158,265

16,6953,029(5,374)
501
(33)
444
11
43
413
(15)

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

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

201,145
36,494(64,747)
6,036
(398)
5,349
133
518
4,976
(181)

(89)

(187)

(183)

(1,072)

186
178

—
—

—
—

2,241
2,145

1,678

—

—

20,217287
2,437(1,192)—
1,607
33,942557(51)(6,493)
27,955(2,122)(3,242)564
10,813(1,796)31,098512(119)(2,321)
29,1705,496(937)(6,626)
1,317(2,758)19,593797(88)(6,603)
13,6993,458
29,361(14,361)—
19,361
408,940
6,710(614)(78,229)
336,807

Cash flows from investing activities:
Increase in property and equipment
Increase in long-term investments and loans
Decrease in property and long-term investments
Decrease in short-term investments
				Net cash used in investing activities(21,855)
(25)
1,047
726
(20,107)(13,465)
(674)
8,198
2,597
(3,344)(23,260)
(635)
1,197
2,313
(20,385)(263,313)(301)
12,614
8,747(242,253)

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

(335)
200
(2,189)
(26)
(11)
(155)
(2,516)(7)
5,325
43,667
48,992(2,379)(13,210)(2,190)(11)(9)—(17,799)
14
8,041
35,626
43,667(653)(680)(2,190)(16)(21)—(3,560)(12)(10,258)
45,88435,626(4,036)2,410(26,373)
(313)
(133)
(1,868)(30,313)(84)
64,157526,108590,265

¥

¥

¥

$

See accompanying Notes to Consolidated Financial Statements.
13

SEINO HOLDINGS CO., LTD. and Subsidiaries

Notes to Consolidated Financial Statements
1.

Basis of Consolidated Financial Statements

The accompanying consolidated financial statements of SEINO
HOLDINGS CO., LTD. (the “Company”) and its subsidiaries (together
with the Company, the “Seino Group”) have been prepared in accordancewith the provisions set forth in the Financial Instrument and Exchange
Law of Japan and its related accounting regulations and in conformity withaccounting principles generally accepted in Japan (“Japanese GAAP”),
which are different in certain respects as to application and disclosure
requirements from International Financial Reporting Standards.
The accounts of the Company’s overseas subsidiaries are based on
their accounting records maintained in conformity with generally
accepted accounting principles prevailing in the respective countries of
domicile. The accompanying consolidated financial statements have been
restructured and translated into English from the consolidated financial
statements of the Company prepared in accordance with Japanese GAAP
and filed with the appropriate Local Finance Bureau of the Ministryof Finance as required by the financial Instrument and Exchange Law
of Japan. Certain supplementary information included in the statutory
Japanese language consolidated financial statements, but not required
for fair presentation, is not presented in the accompanying consolidated
financial statements.
The translation of the Japanese yen amounts into U.S. dollar amounts
is included solely for the convenience of readers outside Japan, using theapproximate exchange rate prevailing at March 31, 2011, which was ¥83
to U.S. $1.00. The translation should not be construed as a representationthat the Japanese yen amounts have been, could have been or could in the
future be converted into U.S. dollars at this or any other rate of exchange.

2. Summary of Significant Accounting Policies(a-i) Principles of consolidation

The accompanying consolidated financial statements include theaccounts of the Company and all of its subsidiaries. Investments insignificant affiliates are accounted for by the equity method. Investments
in affiliates not accounted for by the equity method are stated at cost.
Differences between the acquisition cost of investments in subsidiaries
and the underlying equity in their net assets are adjusted based on thefair value at the time of the acquisition, deferred as goodwill or negative
goodwill and amortized over five years on a straight-line basis. Allintercompany transactions and accounts have been eliminated.
Under accounting standards for consolidation, a subsidiary is defined
as an enterprise which is controlled by another enterprise and is a majority(more than 50%) owned enterprise or a 40% to 50% owned enterprisethat meets certain criteria. In addition, an affiliated company is defined
as an enterprise in which the investor has significant influence and is anenterprise other than a subsidiary that is a 20% or more owned enterpriseor 15% to less than 20% owned enterprise that meets certain criteria.
For the years ended March 31, 2011, 2010 and 2009, the number of thecompanies that were not more than 50% owned enterprises, but were
nevertheless classified as subsidiaries based on the judgment of theCompany in accordance with the accounting standards was one, one andtwo, respectively.
The number of subsidiaries and affiliates for the years ended March 31,
2011, 2010 and 2009 was as follows:

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

2011

2010

2009

57
1
4
10

57
2
3
10

50
2
3
12

The Company and most of its subsidiaries have a fiscal year that ends
on March 31. The overseas subsidiary closes its book at December 31.
The Company has consolidated the subsidiary’s financial statement as ofits year-end because the difference between its fiscal year-end and that of
the Company was not more than three months. Significant transactions
for the period between the subsidiary’s year-end and the Company’s yearend were adjusted for on consolidation.
During the year ended March 31, 2011, Central Logistics Co., Ltd.
has changed its fiscal year-end from January 31 to March 31. Darumaya
Transportation Co., Ltd. has changed its fiscal year-end from December
31 to March 31. As a result, the consolidated financial statements for theperiod ended March 31, 2011 include the result of such two consolidated
14

subsidiaries’ operations for the 14-month period from February 1, 2010 toMarch 31, 2011 and the 15-month period from January 1, 2010 to March
31, 2011, respectively.
The overseas subsidiary has adopted accounting principles generally
accepted in its country (see Note 1). No adjustments to conform toaccounting principles generally accepted in Japan have been made to its
financial statements on consolidation, as allowed under Japanese GAAP
effective for the current fiscal year-end.

(a-ii) Acquisitions for the years ended March 31, 2010 and 2009

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

Millions of yen¥¥¥¥

22,42240,80363,22529,625
15,998
14,83060,453

During the year ended March 31, 2009, the Seino Group acquired
common shares of Seino Logistics Co., Ltd. (“Seino Logistics”). As aresult, Seino Logistics became a subsidiary of the Company effective July
1, 2008. The assets and the liabilities of Seino Logistics as of the initialconsolidation by the Company were as follows.
Assets:Current assets
Non-current assets
Goodwill
			 Total assets
Liabilities:
Current liabilities
Non-current liabilities
			 Total liabilities

Millions of yen
¥
¥
¥
¥

39
2
10
51
41
—
41

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

Millions of yen
¥
¥
¥
¥

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

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

(b)
(c)

(d)
(e)

(f)

Millions of yen¥¥¥¥

consolidated balance sheets and is depreciated over the lease contract
terms by the straight-line method to the amount equal to the estimateddisposal value at the lease termination date. Expenditure on maintenanceand repairs is charged to operating income as incurred. Upon the disposalof the property, the cost and accumulated depreciation are removed fromthe accounts and any gain or loss is recorded as income or expenses.

(h) Leases

—
3,887
2,039
5,926
—
594
594

Cash and cash equivalents

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

Investments and marketable securities

The Seino Group classifies certain investments in debt and equity
securities as “held-to-maturity,” “trading” or “available-for-sale.” Theclassification determines the respective accounting method as stipulatedby the accounting standard for financial instruments. Held-to-maturity
securities are stated at amortized cost. Marketable securities with market
quotations for available-for-sale securities are stated at fair value, andnet unrealized gains and losses on these securities are reported as acomponent of net assets, net of applicable income taxes. Gains and losseson the disposition of available-for-sale securities are computed based on
the moving-average method. Nonmarketable securities without available
market quotations for available-for-sale securities are carried at cost
determined by the moving-average method. Adjustments in carrying
values of individual securities are charged to income through write-downs
when a decline in value is deemed other than temporary.

Accounting for derivatives

As of March 31, 2011 and 2010, the Seino Group did not hold nor had
it issued any derivative instruments.

Allowance for doubtful accounts

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

Inventories

Inventories for merchandise, products, raw materials and supplies are
principally stated at the lower of moving-average cost or net realizablevalue, and inventories for vehicles and work-in-process are principallystated at the lower of the specific identification cost or net realizable value
at March 31, 2011.
Prior to April 1, 2008, inventories for supplies are principally statedat moving-average cost, and inventories for vehicles and work-in-process
are principally stated at cost determined by the specific identification
method. Effective from the year ended March 31, 2009, the Company
has applied the Accounting Standards Board of Japan (“ASBJ”) Statement
No. 9, “Accounting Standard for Measurement of Inventories,” issued
by ASBJ on July 5, 2006. As a result, in the year ended March 31, 2009
operating income and income before income taxes and minority interests
for the year ended March 31, 2009 were ¥80 million less than theamounts that would have been recorded without the change.

(g) Property and equipment and depreciation

Property and equipment, including significant renewals and additions,
are stated at cost. Property and equipment of the Company and certain
subsidiaries are depreciated by the straight-line method for buildings andvehicles and by the declining-balance method for other property.
Property and equipment of other subsidiaries have been depreciatedprincipally by the declining-balance method, except for buildings
acquired on and after April 1, 1998 and the property held for leases.
Buildings acquired on and after April 1, 1998 by the domestic subsidiaries
are depreciated by the straight-line method. Some of the subsidiaries
capitalize property the cost of which is not less than ¥100,000 but below¥200,000 and depreciate it over three years on a straight-line basis.
The leased property of a certain subsidiary engaged in leasing
operations as lessor is recorded at cost as property held for lease. The
property was included in property and equipment in the accompanying

(i)

(j)

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

Intangible assets

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

Accounting standard for impairment of fixed assets

The Company and its domestic subsidiaries have adopted the“Accounting Standard for Impairment of Fixed Assets” issued by theBusiness Accounting Council of Japan and the related practical guidanceissued by ASBJ. The standard requires that fixed assets be reviewed for
impairment whenever events or changes in circumstances indicate thatthe carrying amount of an asset may not be recoverable. An impairment
loss shall be recognized in the income statement by reducing the carrying
amount of the impaired asset or group of assets to the recoverable amountto be measured as the higher of the asset’s net selling price or value in use.
Fixed assets include land, buildings and other forms of property, as wellas intangible assets, and are to be grouped at the lowest level for which
there are identifiable cash flows distinguishable from other groups ofassets. For the purpose of recognition and measurement of impairment
loss, fixed assets are grouped into cash-generating units, such as operating
business branches, other than idle or unused property. At March 31,
2011, 2010 and 2009, recoverable amounts of assets were measured basedon value in use calculated using discounted future cash flows at interest
rates principally of 3.1%, 2.8% and 5.3%, respectively, or net selling
prices primarily using appraisal valuations. As a result, the Seino Group
recognized impairment loss for the property of 56 business branches and6 idle properties for the year ended March 31, 2011, for the property of
50 business branches and 5 idle properties for the year ended March 31,
2010, for the property of 27 business branches and 4 idle properties for theyear ended March 31, 2009 as follows:
Millions of yen

Buildings and structures ¥Land
Other property
¥

2011

2010

291 ¥
538 ¥
2,737
1,609
1
257
3,029 ¥ 2,404 ¥2009

Thousandsof U.S.
dollars
2011

218 $ 3,506
1,368
32,97610
12
1,596 $ 36,494

Accumulated impairment losses have been directly deducted from theapplicable assets.

(k) Employee retirement benefits

Employees who terminate their service with the Seino Group areentitled to retirement benefits generally determined by reference to basic
rates of pay at the time of termination, length of service and conditions
under which the termination occurs.
In accordance with the accounting standard for employee retirement
benefits, the Seino Group has recognized the retirement benefits for15

employees, including pension cost and related liability, based on theactuarial present value of projected benefit obligation using the actuarial
appraisal approach and the fair value of pension plan assets available for(l)benefits at the fiscal year-end. Unrecognized actuarial differences fromchanges in the projected benefit obligation or the value of pension plan
assets resulting from actual outcomes different from that which was
assumed and from changes in assumptions themselves are amortized on astraight-line basis over principally ten years, a period within the averageremaining service years of employees from the year following the year inwhich they arise. Unrecognized prior service cost is amortized using thestraight-line method over principally ten years, a period within the averageremaining service years of employees from the year in which it occurs.
Effective April 1, 2009, the Company has adopted ASBJ Statement
No. 19, “Partial Amendments to Accounting Standard for Retirement
Benefits (Part 3)’’ issued on July 31, 2008. This change did not affect the
profit and loss for the year ended March 31, 2010.

Severance indemnities for directors and statutory auditors

The Seino Group may pay severance indemnities to directors andstatutory auditors subject to the approval of the shareholders. The
Company and other subsidiaries have adopted the accounting methodthat provides for accrued severance indemnities for directors and statutory
auditors at the amount that would have been payable if the directors
and corporate auditors had retired at the end of the fiscal year basedon internal rules, in accordance with the JICPA Audit and AssuranceCommittee Report No. 42, “Treatment for Auditing of Reserve Under
Special Taxation Measures Law, Reserve Under Special Laws andReserve for Retirement Benefits to Directors and Corporate Auditors,”
issued by JICPA on April 13, 2007.

(m) Income taxes

(n)

(o)

(p)

(q)

(r)

16

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

Revenue recognition for freight charges

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

Enterprise taxes

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

Appropriation of retained earnings

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

Translation of foreign currency accounts

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

Per share data

Basic net income (loss) per share is computed by dividing income (loss)
available to common shareholders by the weighted-average number ofshares of common stock outstanding during the respective year. Diluted
net income per share is computed as if warrants or stock options were
exercised at the beginning of the relevant year or, if later, on their firstexercise date and as if the funds obtained thereby were used to purchasecommon stock at the average market price during the respective year by
the treasury stock method. Diluted net income per share is not disclosed(s)

as Seino Group had no diluted common shares for the years ended March
31, 2011, 2010 and 2009.
Cash dividends per share shown for each fiscal year in theaccompanying consolidated statements of operations represent dividends
declared as applicable to the respective years.

Accounting changes for the current year

(Adoption of Accounting Standards for Asset Retirement Obligations)
Effective April 1, 2010, the Company and its consolidated domestic
subsidiaries adopted “Accounting Standards for Asset Retirement Obligations”(ASBJ Statement No. 18 issued on March 31, 2008) and “Guidance on
Accounting Standards for Assets Retirement Obligations” (ASBJ Guidance
No. 21, issued on March 31, 2008). As a result of adopting these standards,
operating income decreased by ¥288 million ($3,470 thousand) and income
before income taxes and minority interests decreased by ¥1,966 million($23,687 thousand) for the fiscal year ended March 31, 2011.
(Adoption of Accounting Standards for Business Combinations and others)
Effective from the year ended March 31, 2011, the Company adopted
the “Accounting Standard for Business Combinations”(ASBJ Statement
No. 21 issued on December 26, 2008), the “Accounting Standard forConsolidated Financial Statements” (ASBJ Statement No. 22 issued on
December 26, 2008), the “Partial Amendments to Accounting Standard
for Research and Development Costs” (ASBJ Statement No. 23 issued
on December 26, 2008), the “Revised Accounting Standard for Business
Divestitures”(ASBJ Statement No. 7 revised on December 26, 2008),
the “Revised Accounting Standard for Equity Method of Accounting
for Investments”(ASBJ Statement No. 16 revised on December 26,2008) and the “Revised Guidance on Accounting Standard for Business
Combinations and Accounting Standard for Business Divestitures”(ASBJ
Guidance No. 10 revised on December 26, 2008).
(Adoption of Accounting Standard for Presentation of Comprehensive Income)
Effective March 31, 2011, the Company adopted “AccountingStandard for Presentation of Comprehensive Income” (ASBJ Statement
No. 25, issued on June 30, 2010) and “Revised Accounting Standard forConsolidated Financial Statements” (ASBJ Statement No. 22, revisedon December 26, 2008). As a result of the adoption of these standards,
the Company has presented the consolidated statement of comprehensive
income in the consolidated financial statements for the fiscal year ended
March 31, 2011. As described in Note 17, the consolidated balance sheet
and the consolidated statement of changes in net assets as of and for the
fiscal year ended March 31, 2010 have been modified to conform with
the new presentation rules of 2011.
(Presentation of Income before Minority Interests)
With the application of the “Cabinet Office Ordinance Revising
the Regulations on Financial Statements” (Cabinet Office Ordinance
No. 5, issued on March 24, 2009) under the “Accounting Standard forConsolidated Financial Statements (ASBJ Statement No. 22, issued
on December 26, 2008),” the account item “Income before minority
interests” was included from the fiscal year under review.

3. Inventories

Inventories at March 31, 2011 and 2010 were as follows.
Millions of yen

2011
Merchandise and finished goods ¥ 5,874
Work in process962
741
Raw materials and supplies¥ 7,5772010¥ 8,949918
721¥ 10,588

Thousands of
U.S. dollars

2011$ 70,771
11,5908,928$ 91,289

4. Investments

At March 31, 2011 and 2010, short-term investments consisted of thefollowing:
Millions of yen

2011
Marketable securities:
¥
—
Bonds
		 Total marketable securities—
Time deposits with an original
maturity of more than three months
6,897¥ 6,897

2010

¥

¥

Thousands of
U.S. dollars

2011

1,913
1,913

$

5,722
7,635

83,096$ 83,096

At March 31, 2011 and 2010, investment securities consisted of thefollowing:——Thousands of
U.S. dollars

Millions of yen

2011
Marketable securities:
Equity securities¥ 15,787
Bonds
644
105
Other
			 Total marketable securities 16,536
2,091
Other non-marketable securities¥ 18,627

2010

2011

¥ 16,899
638
127
17,664
2,078¥ 19,742$ 190,205
7,759
1,265
199,229
25,193$ 224,422

At March 31, 2011 and 2010, the fair value of marketable securities
classified as held-to-maturity and the related net unrealized gains were as
follows:
Carrying
value

Bonds included in investment securities:
At March 31, 2011¥
At March 31, 2010
Bonds included in investment
securities:
At March 31, 2011$

Fair value

Millions of yen

Netunrealized
gains

100 ¥
101 ¥
100
102
Thousands of U.S. dollars

1
2

1,205

12

$

1,217

$

Marketable securities classified as available-for-sale are stated at fairvalue with unrealized gains and losses excluded from current earnings
and reported as a net amount within the net assets account until realized.
At March 31, 2011 and 2010, gross unrealized gains and losses formarketable securities classified as available-for-sale were as follows:
Cost

At March 31, 2011:
Equity securities
Bonds
Other
At March 31, 2010:
Equity securities
Bonds
Other
At March 31, 2011:
Equity securities
Bonds
Other

¥

Gross
Gross
unrealized unrealized
gains
lossesMillions of yen

Fair andcarrying
value

8,738 ¥
547
101
9,386 ¥

7,147 ¥
1
13
7,161 ¥

(98) ¥ 15,787
(4)
544
(9)
105
(111) ¥ 16,436

9,109 ¥
2,447
114
¥ 11,670 ¥

8,099 ¥
1420
8,133 ¥

(309) ¥ 16,899
(10)
2,451
(7)
127
(326) ¥ 19,477¥¥

Thousands of U.S. dollars$105,277 $ 86,109 $ (1,181) $190,205
6,590
12
(48)
6,554
1,217
156
(108)
1,265
$113,084 $ 86,277 $ (1,337) $198,024

At March 31, 2011 and 2010, investments in and long-term loans toaffiliates consisted of the following:
Millions of yen

2011

Investments accounted for by theequity method for significant
affiliates and at cost for others ¥ 2,976
24Interest bearing long-term loans¥ 3,000

2010

¥
¥

3,080
30
3,110

Thousands of
U.S. dollars

2011$ 35,856
289$ 36,145

5. Property and Equipment

At March 31, 2011 and 2010, property and equipment consisted of thefollowing:
Millions of yen

Thousands of
U.S. dollars

2011
2010
2011
Property held for own use, at cost:Land¥ 169,847 ¥ 164,247 $ 2,046,349
Buildings and structures
229,821
225,860
2,768,928
Vehicles99,408100,111
1,197,687
Machinery and equipment
31,08428,945374,506
Construction in progress
157
32
1,891
463
1,329
5,578
Other
530,780
520,524
6,394,939
Less, accumulated depreciation (254,235) (246,814) (3,063,072)
		 Total property and equipment ¥ 276,545 ¥ 273,710 $ 3,331,867

One of the consolidated subsidiaries elected to carry out a one-timerevaluation to restate the cost of land used for business operations at values
reassessed on March 31, 2002, reflecting adjustments for land shape andother factors based on appraisal values issued by the Japanese National
Tax Agency in accordance with the Law Concerning Revaluation ofLand. According to the Law, the excess of the original book values overreassessed values, net of the tax effect and minority interests portions,is recorded in net assets as land revaluation decrement account in theaccompanying consolidated balance sheets. At March 31, 2011 and 2010,
the difference between the carrying values of land used for the business
operations after revaluation over the current market value of the land at
the fiscal year-end amounted to ¥1,679 million ($20,229 thousand) and¥1,787 million, respectively.

6. Short-term Borrowings and Long-term Debt
At March 31, 2011 and 2010, short-term borrowings consisted of thefollowing:
Millions of yen

2011
Unsecured bank overdrafts withinterest rates of 1.3% perannum at March 31, 2011¥25
Short-term bank borrowings,
principally unsecured andrepresented by notes withinterest rates ranging from0.280% to 1.875% per annum
2,490
at March 31, 2011
¥ 2,515

2010

Thousands of
U.S. dollars

2011

¥

25

$

301

¥

2,290
2,315

$

30,00030,301At March 31, 2011, the Company and certain subsidiaries had
unsecured overdraft agreements with 10 banks. Under such agreements,
the Company and these subsidiaries were entitled to withdraw up to¥42,100 million ($507,229 thousand). The Company and the subsidiaries
were not obligated to pay commitment fees on the unused portions ofsuch overdraft facilities.
At March 31, 2011 and 2010, long-term debt consisted of thefollowing:
Millions of yen

2011
Loans from banks¥
Loans from government agencies,
principally mortgages, repayable
on an installment basis withinterest rates ranging from 0.7%
to 5.8% per annum at March 31,
2011
Other
Less current portion

¥

—

2010

¥

582
66
648
(190)
458 ¥

138

Thousands of
U.S. dollars

2011

$

—

771
73
982
(328)
654 $

7,012
795
7,807
(2,289)5,518

At March 31, 2011 and 2010, the following assets were pledged ascollateral for certain short-term borrowings and long-term debt in theaggregate amount of ¥582 million ($7,012 thousand) and ¥1,232 million,
respectively:
Millions of yen

Thousands of
U.S. dollars

6,752
3,647

$

2011
Land
Buildings and structures

¥

2010

¥

6,856
3,912

2011

81,34943,940

The aggregate annual maturities of long-term debt as at March 31,
2011 were as follows:Year ending March 31,
2012
2013
2014
2015
2016
ThereafterThousands ofMillions of yen
U.S. dollars
¥
190
$
2,289
170
2,048
118
1,421
79
952
35
422
56
675
¥
648
$
7,807
17

7.

Employee Retirement Benefits

The Company and its domestic subsidiaries have defined benefit plans.
The following table reconciles the benefit liability as of March 31, 2011
and 2010:
Thousands of
U.S. dollars

Millions of yen

2011
2010
2011
Reconciliation of benefit liability:
Projected benefit obligation ¥ 60,388 ¥ 66,863 $ 727,566
Less fair value of pension plan
(2,948)(7,847)(35,518)
assets at end of year
57,44059,016
692,048
Less unrecognized past service cost(173)
(1,805)(2,084)
Less unrecognized actuarial
differences (loss)(3,102)(27,096)(2,249)—465—
Prepaid pension assets
Net amounts of employee
retirement benefit liability
recorded on the consolidated¥ 55,018 ¥ 54,574 $ 662,868
balance sheets
Notes: 1. P rojected benefit obligation of certain subsidiaries was calculatedusing the simplified calculation method as permitted by the accounting
standard for employee retirement benefits.
The components of net periodic retirement benefit expenses for theyears ended March, 2011, 2010 and 2009 were as follows:
Millions of yen
2011

2010

2009

Thousandsof U.S.
dollars
2011

Net periodic retirement
benefit expenses:
Service cost
¥ 3,608 ¥ 3,774 ¥ 2,861 $ 43,470Interest cost
1,219
1,328
1,067
14,687
Expected return on pension plan assets
(30)
(120)
(28)
(361)
Amortization of actuarial differences
790
564
529
9,518
Amortization of past service cost
269
380
326
3,241
Loss (gain) on
abolishment of
retirement benefit plan
107
541
(50)
1,289
Lump-sum payment
to withdrawal for
employees pension fund
670
—
—
8,072
166
—
—
2,000
Retirement benefit expenses
			 Total retirement
benefit expenses ¥ 6,799 ¥ 6,467 ¥ 4,705 $ 81,916
For the purpose of overhauling the employee retirement benefit
plan, some of the Company’s subsidiaries withdrew from the multiemployer pension program established by the subsidiaries and other
employers on February 28, 2011. As a result, lump-sum payments
to withdraw from the employee pension fund were charged to such
subsidiaries as above.
In addition, one of the Company’s subsidiaries changed thecalculation method from the simplified one to the principal one
by merging with another subsidiary calculating in accordance withthe principal one. As a result, benefit liabilities increased and were
accounted for as retirement benefit expenses as above.
Major assumptions used in the calculation of the above
information for the years ended March 31, 2011, 2010 and 2009 wereas follows:
2011
2010
Method attributing the projected Straight- Straight-line
benefits to periods of services
line method
methodDiscount rate
2.0%
2.0%
Expected rate of return on
2.0%
2.0%
pension plan assets
principally principally
Amortization of past service cost
10 years
10 years
Amortization of actuarial
principally principally
differences
10 years
10 years

8. Contingent Liabilities

2009
Straight-line
method2.0%
2.0%

principally
10 yearsprincipally
10 years

At March 31, 2011 and 2010, the Seino Group was contingently liable
for trade notes endorsed to affiliates and third parties and for guarantees,
including substantial guarantees, principally of indebtedness of affiliates
and third parties in the aggregate amounts of ¥1,308 million ($15,759

18

thousand) and ¥1,380 million, respectively.

9. Lease Commitments

As lessee, the Seino Group has entered into various rental and noncancelable lease agreements for computer equipment and radio facilities
with contract terms from four to nine years. As disclosed in Note 2(h), thesefinance leases which commenced prior to April 1, 2008 have been accounted
for as operating leases. The aggregate minimum future lease payments
under such non-cancelable finance lease agreements, including the imputed
interest portions, as at March 31, 2011 and 2010 were as follows:

Finance leases:
Due within one year
Due after one year

Millions of yen

Thousands of
U.S. dollars

120
35
155

$

2011
¥
¥

2010

¥
¥

280
158
438

2011

$

1,445
422
1,867

In addition, the Seino Group has entered into various rental andlease agreements for land and buildings to be used for truck terminals
and warehouses which are generally cancelable with a few months'
advance notice, except for certain operating lease agreements as below.
The aggregate minimum future lease payments for such non-cancelable
operating lease agreements, including the imputed interest portion, as
lessee at March 31, 2011 and 2010 were as follows.

Operating leases:
Due within one year
Due after one year

Millions of yen

Thousands of
U.S. dollars

426
1,140
1,566

$

2011
¥
¥

2010

¥
¥

461
1,489
1,950

2011

5,132
13,735$ 18,867

A certain consolidated subsidiary engaged in leasing operations as
lessor, enters into various lease agreements with third parties principallyfor vehicles. The leases are categorized as financing leases and operatingleases. At March 31, 2011 and 2010, the aggregate future minimum leasecommitments to be received for such non-cancelable lease agreements,
including the imputed interest, were as follows:
Millions of yen

2011

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

Operating leases:
Due within one year
Due after one year

¥

¥

¥

2010

33
13
46

¥

214
833
1,047

¥

¥

¥

Thousands of
U.S. dollars

2011

59
47
106

$

123
674
797

$

$

397
157
554

2,578
10,036$ 12,614

10. Net Assets(a)		The Japanese Corporate Law (“the Law”) became effective on May 1,

2006, replacing the former Japanese Commercial Code. The Law isgenerally applicable to events and transactions occurring after April 30,
2006 and for fiscal years ending after that date.
		Under Japanese laws and regulations, the entire amount paid for new
shares is required to be designated as common stock. However, a company
may, by a resolution of the Board of Directors, designate an amount notexceeding one-half of the price of the new shares as additional paid-in
capital, which is included in capital surplus.
			
Under the Law, in cases where a dividend distribution of surplus
is made, the smaller of an amount equal to 10% of the dividend or theexcess, if any, of 25% of common stock over the total of additional paid-in
capital and legal earnings reserve must be set aside as additional paid-in
capital or legal earnings reserve. Legal earnings reserve is included inretained earnings in the accompanying consolidated balance sheets.
			
Under the Law, legal earnings reserve and additional paid-in
capital could be used to eliminate or reduce a deficit by a resolution of
the shareholders' meeting. Additional paid-in capital and legal earnings
reserve may not be distributed as dividends. All additional paid-in capitaland all legal earnings reserve may be transferred to other capital surplus
and retained earnings, respectively, which are potentially available fordividends.
			
At March 31, 2011 and 2010, capital surplus principally consisted ofadditional paid-in capital. In addition, retained earnings included legal
earnings reserve of the Company in the amount of ¥4,262 million ($51,349
thousand) at March 31, 2011 and 2010.

			The maximum amount that the Company can distribute as dividends
is calculated based on the non consolidated financial statements of theCompany in accordance with Japanese laws and regulations.
(b) At the annual shareholders’ meeting held on June 28, 2011, theshareholders approved cash dividends of ¥11 per share, amounting to¥2,194 million ($26,434 thousand). The appropriations have not been
accrued in the consolidated financial statements as of March 31, 2011as such appropriations are recognized in the period in which they areapproved by the shareholders.

11. Income Taxes

The tax effects of temporary differences that give rise to a significant
portion of deferred tax assets and liabilities at March 31, 2011 and 2010
were as follows:
Millions of yen

2011

2010

Thousands of
U.S. dollars

2011

Deferred tax assets:
Employee retirement benefit liability ¥ 23,117 ¥ 22,431 $ 278,518
Enterprise tax accruals
441
351
5,313
Accrued bonuses
3,526
3,342
42,482
Intercompany capital gains
982
956
11,832
Operating loss carryforwards
2,247
2,074
27,072
Loss on assets transferred
1,367
1,725
16,470
Impairment loss on fixed assets 13,636
12,877
164,289
Allowance for doubtful accounts
126
187
1,518
7,903
6,876
95,217
Other
53,34550,819642,711(24,791)(24,661) (298,687)
Less valuation allowance
28,554
26,158344,024Deferred tax liabilities:
Deferred capital gains
6,818
6,928
82,145
Unrealized gains on availablefor-sale securities
2,735
2,983
32,952
Valuation adjustments for consolidation 14,895
15,348179,458
385
77
4,638
Other
24,83325,336299,193¥ 3,721 ¥822 $ 44,831
Net deferred tax assets
At March 31, 2011 and 2010, deferred tax assets and liabilities wererecorded as follows:
Millions of yen

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

2011
¥

4,633
12,264—¥ 13,176

2010¥

Thousands of
U.S. dollars

2011

4,194
11,189¥ 55,819
147,7595¥ 14,556—¥ 158,747

In assessing the realizability of deferred tax assets, management of the
Seino Group considers whether some portion or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets
is dependent upon the generation of the future taxable income during
the periods in which those temporary differences become deductible. At
March 31, 2011 and 2010, a valuation allowance was provided to reducethe deferred tax assets to the extent that the management believed thatthe amount of the deferred tax assets was not realizable.
A reconciliation of the differences between the Japanese statutory
effective tax rate and the actual effective income tax rate on pretax income
reflected in the accompanying consolidated statements of operations forthe year ended March 31, 2011 was as follows:
Percentage of pretax income

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

2011
40.4%

2010
40.4%

1.0
(1.0)
4.9
(16.3)
0.1
3.9
(0.1)
32.9%

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

12. Real Estate For Rent

Some of the Company’s subsidiaries own for rent land and facilities
where closed or redeployed branches used to be. The book values in the
consolidated balance sheets, changes during the fiscal year under review
and the fair values of the rental properties were as follows:
March 31, 2010¥
13,061Millions of yen
Book value
Fair value
Increase
March 31, 2011 March 31, 2011
¥
1,332
¥
14,393¥
18,736

March 31, 2009¥
10,587

Millions of yen
Book value
Fair value
Increase
March 31, 2010 March 31, 2010
¥
2,474
¥
13,061¥
17,133

March 31, 2010
$ 157,361

Thousands of U.S. dollars
Book value
Fair value
Increase
March 31, 2011 March 31, 2011$
16,049$ 173,410$ 225,735

Profit and loss in the fiscal years ended March 31, 2011 and 2010 wereas follows:
Millions of yen

Thousands of
U.S. dollars

2011
2010
2011
Rental properties
Operating revenue¥ 1,429 ¥ 1,264 $ 17,217
Operating costs
259
234
3,121
Difference
1,170
1,030
14,096
Others ((losses) gains on sale ofproperty, etc.)
(309)
102
(3,723)(Supplementary Information)
Effective from the fiscal year ended March 31, 2010, the Seino
Group has adopted ASBJ Statement No. 20, “Accounting Standard forDisclosures about Fair Value of Investment and Rental Property,” issued
on November 28, 2008, and ASBJ Guidance No. 23, “Guidance on
Accounting Standard for Disclosures about Fair Value of Investment andRental Property,” issued on November 28, 2008.

13. Financial Instruments

Effective from the year ended March 31, 2010, the Seino Group
adopted ASBJ Statement No. 10, “Accounting Standard for Financial
Instruments,” revised on March 10, 2008, and ASBJ Guidance No. 19,“Guidance on Disclosures about Fair Value of Financial Instruments,”
revised on March 10, 2008.
(a) Policies on Financial Instruments
			The Seino Group consolidated its temporary cash surplus to theCompany by utilizing its Cash Management System. The Company
invests in low-risk and short-term instruments in accordance with its
internal fund management rules. The Company mainly raises funds
through indirect financing such as bank loans for investments in facilities
taking immediate liquidity into consideration.
(b) Details of Financial Instruments and Risks
			
Trade receivables are exposed to credit risk of customers. Some of thesubsidiaries have receivables in foreign currency and are exposed foreign
currency exchange risk.
			Marketable and investment securities, which consist of held-tomaturity securities and marketable securities business entities with which
the Seino Group has business relationships, are exposed to stock market
fluctuation risk.
			
Notes and accounts payable have general terms and conditions andare mostly due within one year. However, some of the subsidiaries havethem in foreign currency which exposes them to exchange risk.
			Some loans are used principally for capital investments. Long term
debt with variable interest rates is exposed to interest rate fluctuation risk.
(c) Risk Management for financial instruments(1) Monitoring of credit risk
			In accordance with internal policies for credit risk management,each subsidiary monitors the creditworthiness of its customers
and manages the terms and conditions of payment, due dates andremaining balances to reduce such risk.
			Regarding held-to-maturity securities, the Company invests in highcredit-rating bonds in accordance with its internal fund management
rules. As a result, the risk is de-minimis.
		(2) Monitoring market risk
			The board of the directors is regularly monitors market risk based19

on the management methods which they decide in accordance withinternal market risk management rules. For marketable securities,
the Seino Group monitors market prices every quarter, and reviews
the market condition, financial position and business relationship of
the issuers.
		(3) Monitoring liquidity risk
			The Company has a cash management system with its subsidiaries
and becomes the paying agent for the subsidiaries under the system.
The subsidiaries report their cash flow projections to the Company.
The Company has sufficient bank credit lines, including overdrafts,
enabling the Seino Group to manage liquidity risk.
(d) Supplemental Information on fair values
The fair values of financial instruments are based on their market
prices. The fair values of financial instruments with no available market
prices are determined by using prices calculated in a reasonable manner.
However, as various factors are incorporated into these calculations, theresulting values may differ if different assumptions are provided.
The book value and fair value of financial instruments and any
differences between them, as of March 31, 2011 and 2010 were as follows.
At March 31, 2011
Cash and cash equivalents ¥Trade receivables
Short-term investments andinvestment securities¥
Total assets
Trade payables¥
Short-term borrowings
Current portion of long-term debt
Long-term debt¥
Total liabilities

At March 31, 2010
Cash and cash equivalents ¥Trade receivables
Short-term investments andinvestment securities¥
Total assets
Trade payables¥
Short-term borrowings
Current portion of long-term debt
Long-term debt¥
Total liabilities

Book value

Millions of yen
Fair value

Difference

48,992 ¥96,80848,992 ¥
96,808 ——

23,432
169,232 ¥

23,434
169,234 ¥2
2

65,177 ¥
2,515
190
458
68,340 ¥65,177
2,515
190
455
68,337

—
—
—
(3)
(3)

Book value

¥


¥

Millions of yen
Fair value

Difference

43,667 ¥97,076

43,667 ¥
97,076 ——

25,299166,042 ¥

25,301
166,044 ¥2
2

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

—
—
—
(1)
(1)

¥


¥

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

At March 31, 2011
Cash and cash equivalents $ 590,265 $ 590,265 $
Trade receivables
1,166,361
1,166,361 
Short-term investments andinvestment securities
282,314282,338$ 2,038,940 $ 2,038,964 $Total assets
Trade payables$
Short-term borrowings
Current portion of long-term debt
Long-term debt$
Total liabilities

785,265 $
30,301
2,289
5,518
823,373 $785,265
30,301
2,289
5,482
823,337

$


$

—
—
24
24
—
—
—
(36)
(36)

Notes:
1.	Method of measuring the fair value of financial instruments
Assets(1) Cash and cash equivalents
As these instruments are settled within a short term andtheir fair value and book value are nearly identical, their bookvalues are assumed as their fair values.
(2) Trade receivables
The carrying amount of installment sales receivables
approximates the fair value, which is based on the present
value of future cash flows through maturity discounted using
an estimated credit risk adjusted interest rate. The carrying
amounts of notes and trade receivables other than installment
20

sales receivables approximates fair value because of the shortmaturity of these instruments.
(3) Short-term investments and investment securities
The fair value of marketable securities equals quoted market
price, if available. The fair value of debt securities equals
quoted market price or the price provided by financial
institutions. Marketable and investment securities classified
according to the purpose for which they are held are describedin Note 4.
Liabilities(1) Trade payables
As these instruments are settled within a short term and theirfair values and book values are nearly identical, their bookvalues are assumed as their fair values.
(2) Short-term borrowings
As these instruments are settled within a short term and theirfair values and book values are nearly identical, their bookvalues are assumed as their fair values.
(3) Current portion of long-term debt
As these instruments are settled within a short term and theirfair values and book values are nearly identical, their bookvalues are assumed as their fair values.
(4) Long-term debt
Fair value of long-term debt is based on the present value of
future cash flows discounted using the current borrowing rate
for similar debt of a comparable maturity.
2.	Financial instruments for which the fair value is extremely
difficult to determineBook value

Millions of yen

2011
1,591
500
¥ 2,091

Non-marketable securities
Preferred securities

¥

2010
1,578
500
¥ 2,078¥

Thousands of
U.S. dollars

2011
19,1696,024$ 25,193$

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

At March 31, 2011
Cash and cash equivalents¥
Trade receivables
Short-term investments andinvestment securities
Time deposits
Held-to-maturity securities
		 Corporate bonds
Available-for-sale securities
with maturities
		 (1) Government andmunicipal bonds, etc.
		 (2) Corporate bonds
Short-term investments andinvestment securities total¥

1-5 years

5-10 years

Over 10years

48,992 ¥77,085— ¥18,962

— ¥
761

—
—

6,897

—

—

—

—

100

—

—

—
—

47
500

—
—

—
—

6,897
132,974 ¥647
19,609 ¥

—
761 ¥

—
—

Millions of yen
Within 1 year

1-5 years

At March 31, 2010
Cash and cash equivalents¥ 43,667 ¥— ¥Trade receivables
77,631
18,757
Short-term investments andinvestment securities
Time deposits
5,723—
Held-to-maturity securities
		 Corporate bonds—
100
Available-for-sale securities
with maturities
		 (1) Government andmunicipal bonds, etc.
100
47
1,800
—
		 (2) Corporate bonds
Short-term investments andinvestment securities total
7,623
147
¥ 128,921 ¥ 18,904 ¥

5-10 years

Over 10
years

— ¥
688

—
—

—

—

—

—

—
500

—
—

500
1,188 ¥——

Thousands of U.S. dollars
Within 1 year

1-5 years

5-10 years

At March 31, 2011
Cash and cash equivalents$ 590,265 $— $
Trade receivables
928,735
228,458
Short-term investments andinvestment securities
Time deposits
83,096—
Held-to-maturity securities
		 Corporate bonds—
1,205
Available-for-sale securities
with maturities
		 (1) G overnment andmunicipal bonds, etc.
—
566
—
6,024
		 (2) Corporate bonds
Short-term investments andinvestment securities total
83,096
7,795$ 1,602,096 $ 236,253 $Over 10
years

— $
9,168

—
—

—

—

—

—

—
—

—
—

—
9,168 $——

4.	For the repayment schedule for bonds payable and longterm loans payable at March 31, 2011, see Note 6. Short-termborrowings and long-term debt.

14. Related Party Transactions

Principal transactions between the Company’s consolidated
subsidiaries and their related parties for the year ended March 31,
2010 are summarized as follows:
Name
Takao Taguchi

Title
Director

Transaction
Millions of Yen
Sales of housing
48

Millions of yen
Valuation difference on availablefor-sale securities¥
1,667
Foreign currency translation adjustment
76
Share of other comprehensive
income of associates accounted
3
for using equity method
1,746
			 Total other comprehensive income ¥18. Supplementary Cash Flows Information

Non-cash investing and financing activities for the year ended
March 31, 2011 was as follow;

Asset retirement obligations
recorded for the fiscal year

Thousands of
U.S. dollars

Millions of yen
¥

2,491

$

30,012

19. Subsequent EventOn April 1, 2011, the Company restructured the transportation
business in the Kyushu region. Seino Transportation Co., Ltd.
underwent a corporate separation, in which its transportation business
in Kyushu region was transferred to the newly founded company,
Kyushu Seino Transportation Togo Jyunbi Co., Ltd. (“Togo Jyunbi”).
At the same time, “Togo Jyunbi” and Kyushu Seino Transportation
Co., Ltd merged to form newly “Kyushu Seino Transportation Co.,Ltd.”

15. Asset Retirement Obligation

The asset retirement obligation is based upon estimated future
restoration obligations pursuant to the office rental agreements. The
asset retirement obligation is calculated based upon the useful life
designated by law or estimated office rental period and discounted byyield rate of the government bonds.
The asset retirement obligation as of March 31, 2011 was as follow.

As of April 1, 2010
New obligations
Changes in estimated obligations and accretion
Settlement payments
Other
As of March 31, 2011

Thousands ofMillions of yen
U.S. dollars
¥
2,470
$
29,759
203
2,446
44
530
(245)
(2,952)
19
229
¥
2,491
$
30,012The balance of the asset retirement obligation at beginningof the fiscal year was determined based upon the guidance set
forth in “Accounting Standards for Asset Retirement Obligations”(ASBJ Statement No. 18 issued on March 31, 2008) and “Guidanceon Accounting Standards for Assets Retirement Obligations”(ASBJ Guidance No. 21, issued on March 31, 2008).

16. Provision for Loss on Disaster

Provision for loss on disaster is provided for the restoration of theproperty damaged or destroyed by the Great East Japan Earthquakeat an amount estimated at the fiscal year-end.

17. Comprehensive Income

Comprehensive income for the fiscal year ended March 31, 2010
was as follow.

Millions of yen
Comprehensive income attributeto owners of the parent¥
11,211
Comprehensive income attribute204
to minority interests
11,415
			 Total comprehensive income ¥Other comprehensive income for the fiscal year ended March 31,
2010 was as follow.

2120. Segment Information
1.

2.
3.

General information about reportable segments

The reportable segments are constituent business units of the Seino Group for which separate financial information is obtained and examined regularly by
the Board of Directors to evaluate business performance. The Seino Group has established the “Transportation Service Planning Department” to be in charge oftransportation business companies and “Vehicle Sales and Related Business Planning Department” to be in charge of vehicle sales, merchandise sales and otherbusiness enterprises in the Company as a holding company. Each subsidiary plans and operates each business under its control. In addition, some of subsidiaries
engage in leasing for real estate services to make good use of their facilities. Therefore, the Seino Group consists of business segments that are based on thebusiness operated by each subsidiary. The Seino Group’s reported segments are “transportation services,” “vehicle sales,” “merchandise sales” and “leasing for realestate services.”

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

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

Information about reported segment profit or loss, segment assets, segment liabilities and other material items
Information by industry segment for the years ended March 31, 2011, 2010 and 2009 was summarized as follows:

For the year 2011:
Operating revenue:
		 External customers
		 Inter-segment sales			
Total operating revenue			Operating income

Transportation
services

Identifiable assets
Depreciation
Impairment loss on fixed assets
Capital expenditures
For the year 2009:
Operating revenue:
		 External customers
		 Inter-segment sales			
Total operating revenue
Operating costs and expenses
Operating income (loss)
			
Identifiable assets
Depreciation
Impairment loss on fixed assets
Capital expenditures
For the year 2011:
Operating revenue:
		 External customers
		 Inter-segment sales			
Total operating revenue			Operating income

Merchandise
sales

Leasing for realestate services

Other368,771 ¥1,438
370,2096,494 ¥

87,075 ¥7,352
94,4273,830 ¥

27,104 ¥24,55851,662561 ¥Millions of yen
1,429 ¥
13,233 ¥—14,7001,429
27,933
1,197 ¥
780 ¥

385,891 ¥
14,913417

90,393 ¥1,620
78

13,053 ¥79—

12,638 ¥
63
—

2,891
22,001

—
3,361

—
105

2
4

Transportation
services

Vehicle sales

Merchandise
sales

Leasing for realestate services¥¥

Identifiable assets¥
Depreciation
Amortization of goodwill
Investments in affiliates accounted
for by the equity method
Increase in fixed assets
For the year 2010:
Operating revenue:
		 External customers
		 Inter-segment sales			
Total operating revenue
Operating costs and expenses
Operating income (loss)			Vehicle sales

¥

¥
¥

¥

¥
¥

497,612—497,612
12,326

19,421 ¥260
6521,396 ¥16,935
501(33,695) ¥(240)—

487,701
16,695
501

—
257

2,893
25,728

(2)
(443)

2,891
25,285

Elimination

Consolidated

Other

87,132 ¥
4,848
91,98088,683
3,297 ¥

21,779 ¥21,41043,18942,590599 ¥

391,072 ¥
16,741
2,324
9,078

91,155 ¥
1,785
80
1,436

11,880 ¥77—
134

11,121 ¥64—
2

Merchandise
sales

Leasing for realestate services

17,855 ¥
287
—
286
Other

316,341 ¥
1,807
318,148
318,703(555) ¥

78,722 ¥8,415
87,13784,9972,140 ¥

23,302 ¥25,76249,064
48,470594 ¥Millions of yen
1,187 ¥
14,214 ¥—14,213
1,187
28,427204
27,773983 ¥
654 ¥332,493 ¥15,966
1,096
24,70085,852 ¥
1,692
308
2,365

10,954 ¥60—
384

10,276 ¥
60
192
417

Transportation
services

Vehicle sales

Merchandisesales$ 4,443,024 $ 1,049,096 $
17,32588,5794,460,349
1,137,675$
78,241 $46,145 $Identifiable assets$ 4,649,289 $ 1,089,073 $Depreciation
179,675
19,518
Amortization of goodwill
5,024
940
Investments in affiliates accounted
for by the equity method
34,831—
265,072
40,494
Increase in fixed assets

326,554295,880
622,434
6,759

Leasing for realestate services

19,450 ¥
262
—
420
Other

Total

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

485,808—
485,808
479,187
6,621

523,083 ¥
18,954
2,404
10,936(38,409) ¥
(263)
—
(158)

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

Total

152,265 $
759
—

—
1,265

24
48

433,766—
433,766
430,433
3,333

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

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

Total

34,855309,976

Elimination

Consolidated— $ 5,995,325(578,892)—(578,892)
5,995,325(6,458) $148,506(405,964) $ 5,875,916(2,891)
201,145
—
6,036
(24)
(5,337)(Related information)
1.	Information about product and service
The Company has not disclosed information about product and service because the Company has disclosed the same information above.
22

Consolidated— ¥(50,197)(50,197)(49,714)(483) ¥

233,988 $ 6,281,880 $
3,132
204,036
72
6,036
—
3,097

Elimination

433,766 ¥50,197
483,963
480,147
3,816 ¥

Thousands of U.S. dollars$
17,217 $
159,434 $ 5,995,325 $—
177,108
578,892
17,217
336,542
6,574,217$
14,422 $9,397
154,964 $

157,265 $952—

Consolidated— ¥(48,048)(48,048)(536) ¥

362,628 ¥1,649
364,277
362,516
1,761 ¥

Vehicle sales

Elimination

497,612 ¥48,048545,660
12,862Millions of yen
1,265 ¥
13,004 ¥—12,8271,265
25,831
214
25,626
1,051 ¥
205 ¥Transportation
services

Total

34,831
304,6392.	Information about geographic areas(1) Operating revenue
The Company has omitted disclosure of operating revenue because operating revenue to external customers in Japan accounts for more than 90%of the amount of operating revenue reported in the consolidated statements of income.
(2) Property and equipment
The Company has omitted disclosure of property and equipment because property and equipment in Japan account for more than 90% of theamount of property and equipment reported in the consolidated balance sheets.
3.	Information about major customers
The Company has not disclosed information about major customers because no customer had contributed 10% or more to operating revenue in the
consolidated statements of income.
Information on impairment loss by reportable segments
For the year 2011:
Impairment loss

Transportation
services¥

Vehicle sales

2,518 ¥

145 ¥Information on goodwill by reportable segments
For the year 2011:
Amortization of goodwill
Goodwill as of March 31
For the year 2011:
Amortization of negative goodwill
Negative goodwill as of March 31

Transportation
services¥¥

Vehicle sales

417 ¥
824

Transportation
services

Vehicle sales

3,265 ¥
9,115

Transportation
services¥

Vehicle sales— ¥Information on impairment loss by reportable segments
For the year 2011:
Impairment loss

Transportation
services$

Vehicle sales

Information on goodwill by reportable segments
For the year 2011:
Amortization of goodwill
Goodwill as of March 31
For the year 2011:
Amortization of negative goodwill
Negative goodwill as of March 31$$

Vehicle sales

Vehicle sales

Information on gain on negative goodwill by reportable segments
For the year 2011:
Gain on negative goodwill$

Leasing for realestate services

Merchandise
sales

Leasing for realestate services

Thousands of U.S. dollars
23,928 $
229 $
— $
—
579
—

39,337 $109,819

Transportation
services

Merchandise
sales

Thousands of U.S. dollars
940 $
— $
— $
2,590
—
—

5,024 $
9,928

Transportation
services

Leasing for realestate services

Vehicle sales— $Merchandise
sales

Leasing for realestate services

Thousands of U.S. dollars
— $
— $
— $

Total

— ¥
Other

3,029
Total

6 ¥
14
Other

501
1,053
Total

104 ¥
192
Other

— ¥

Thousands of U.S. dollars
1,747 $
— $4,410 $

30,337 $Transportation
services

Merchandise
sales

— ¥
—

Leasing for realestate services

Millions of yen
— ¥

Other

— ¥
—

Leasing for realestate services

Millions of yen
19 ¥48

Merchandise
sales

— ¥

Leasing for realestate services

Millions of yen— ¥—Merchandise
sales

1,986 ¥—

Leasing for realestate services

Millions of yen
— ¥
366 ¥

Merchandise
sales

78 ¥
215

Information on gain on negative goodwill by reportable segments
For the year 2011:
Gain on negative goodwill

Merchandise
sales

5,374
9,355
Total

33 ¥
Other

33
Total

— $
Other

72 $
169
Other

1,253 $
2,313
Other

398 $

36,494
Total

6,036
12,687
Total

64,747112,711
Total

398

Additional information(Accounting standard for segment information)

Effective April 1, 2010, the Company adopted “Accounting Standard for Disclosures about Segments of an Enterprise and Related Information”(ASBJ Statement No. 17, issued on March 27, 2009) and “Guidanceon Accounting Standard for Disclosures about Segments of an Enterprise and Related Information”(ASBJ Guidance No. 20, issued on March 21, 2008).

Notes:

1. Identifiable assets in the elimination column represent unallocated general corporate items which are not assigned to a particular industry segment such as cash andshort-term and long-term investment securities, net of inter-segment balances.
2. Accounting changes:(Accounting change in the composition of reportable business segments)

Effective for the year ended March 31, 2009, the Company changed the composition of its reportable business segments from “Transportation services,” “Vehicle sales,” “Leasing for real estate services” and“Other” segment to “Transportation services,” “Vehicle sales,” “Merchandise sales,” “Leasing for real estate services” and “Other” segment in order to disclose segment information more properly. For the year ended
March 31, 2009, the “Merchandise sales” segment, which was included in the “Other” segment, was separately shown as operating revenue of its business segment exceeded 10% of total consolidated operating
revenue before elimination. If the previous reportable business segment composition was applied, operating revenue and operating income of the “Other” segment would have been ¥47,998 million and ¥579 million
more, respectively, for the year ended March 31, 2009.

(Accounting standard for measurement of inventories)

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

(Accounting standard for lease transactions)

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

23

Report of Independent Auditors
Independent Auditors’ Report
To the Board of Directors of
SEINO HOLDINGS Co., LTD:
We have audited the accompanying consolidated balance sheets of SEINO HOLDINGS Co., LTD. (the“Company”) and its consolidated subsidiaries (together with the Company, the “Seino Group”) as of March 31,
2011 and 2010, the related consolidated statements of income for each of the three years in the period ended March
31, 2011, the consolidated statements of comprehensive income for the year ended March 31, 2011 and the related
consolidated statements of changes in net assets and cash flows for each of the three years in the period ended March
31, 2011, expressed in Japanese yen. These consolidated financial statements are the responsibility of the Seino
Group’s management. Our responsibility is to independently express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, theconsolidated financial position of the Seino Group as of March 31, 2011 and 2010, and the consolidated results of
their operations and their cash flows for each of the three years in the period ended March 31, 2011, in conformity
with accounting principles generally accepted in Japan.
Without qualifying our opinion, we draw attention to the following:
As discussed in Note 2(s) to the consolidated finnancial statements, effective from the year ended March 31, 2011,
the Seino Group adopted the new accounting standard for the Asset Retirement Obligations.
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March
31, 2011 are presented solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar
amounts and, in our opinion, such translation has been made on the basis described in Note 1 to the consolidated
financial statements.

KPMG AZSA LLC
Nagoya, Japan
June 28, 201124

Seino GroupThe Seino Group consists of Seino Holdings Co., Ltd. and 58 consolidated subsidiaries and 14 affiliates. The Seino
Group operates in five business segments: transportation services, vehicle sales, merchandise sales, leasing for realestate services and other services. The business relationship in the Seino Group is as follows.

Clients
Collection and
Delivery

VehiclesSales and Repairs

Domestic
Transportation
Seino Transportation Co., Ltd.
*1
Hokkaido Seino Transportation Co., Ltd. *1
Iwate Seino Transportation Co., Ltd.
*1
Miyagi Seino Transportation Co., Ltd.
*1
Kanto Seino Transportation Co., Ltd.
*1
Seibu Transportation Co., Ltd.
*1
Kanagawa Seino Transportation Co., Ltd. *1
Izu Seino Transportation Co., Ltd.
*1
Nohi Seino Transportation Co., Ltd.
*1
Tokai Seino Transportation Co., Ltd.
*1
Mie Seino Transportation Co., Ltd.
*1
Hinomaru Seino Transportation Co., Ltd. *1
Shikoku Seino Transportation Co., Ltd. *1
Kyushu Seino Transportation Co., Ltd. *1
Kyushu Seibu Transportation Co., Ltd. *1
Okinawa Seino Transportation Co., Ltd. *1
Seino Tsu-un Transportation Co., Ltd.
*1
Seino Express Co., Ltd.
*1
Seino Hikkoshi Co., Ltd.
*1
Seino Hokkaido Express Co., Ltd.
*1
Seino Tokyo Express Co., Ltd.
*1
Seino Hokuriku Express Co., Ltd.
*1
Seino Nagoya Express Co., Ltd.
*1
Seino Osaka Express Co., Ltd.
*1
Seino ST Service Co., Ltd.
*1
Seino Logistics Hokkaido Co., Ltd.
*1
S&N Logistics Co., Ltd.
*1
Seino Butsuryu Co., Ltd.
*1
Toyo Co., Ltd.
*1
Katsunuma Transportation Co., Ltd.
*1
Darumaya Transportation Co., Ltd.
*1
Central Logistics Co., Ltd.
*1
Eco Alliance Co., Ltd.
*1
Saitama Seino Transportation Co., Ltd. *2
Tokyo Seino Transportation Co., Ltd.
*2
Mikawa Seino Transportation Co., Ltd.
Ensyu Seino Transportation Co., Ltd.
Takuma Seino Transportation Co., Ltd.
Seino Kanagawa Express Co., Ltd.
Tango Seino Transportation Co., Ltd.
Box Charter Co., Ltd.
Cosmo Hokuriku Haiso Center Co., Ltd.

Sales

Services

Real Estate
Leasing

Vehicle Sales

Merchandise

Real Estate Leasing Services

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

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

Seino Transportation Co., Ltd.
Arts Co., Ltd.

Marchandise
sales

Leasing forReal Estate Services

Information Services

VehicleSales*1

Japan Logistics
Development Co.,
Ltd.

*1

OthersInternational
Transportation
Seino Logix Co., Ltd.

Seino Information
Service Co., Ltd.

*1

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

*1

Schenker-Seino Co., Ltd.

*2

*1
Asahi Agency Co., Ltd. (Advertising agency)
Suito Travel Co., Ltd. (Passenger transportation, Travel agency) *1*1Seino Engineering Co., Ltd. (Construction)*1
Seino Family Co., Ltd. (Insurance agency service)*1
Seino Staff Service Co., Ltd. (Personnel service)*1
Toyota Home Gifu Co., Ltd. (Housing sales)*1Asahi Create Co., Ltd. (Comprehensive printer)
Seino Business Support Co., Ltd. (Business support services) *1*1
Seino Ecotrading Inc. (Wholesale of recycled resources)
Seino Financial Co., Ltd. (Settlement service representative)
Toyota Rent-A-Lease Gifu Co., Ltd. (Rental and lease)
Gifu Automotive Dealer Plaza Co., Ltd. (Rental office)

OtherTransportation
Services

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

58
4
10

25