Profile

Seino
SeinoHoldings
HoldingsCo.,
Co.,Ltd.
Ltd.(“the(“theCompany”)
Company”)began
began
businessbusinessasasa atrucking
truckingcompany
companyinin1930
1930andandwaswasincorporated
Gifu
incorporatedinin1946.
1946.Based
Basedininthe
thecitycityofofOgaki,
Ogaki,
Gifu
Prefecture,
Prefecture,we
weare
areaaleading
leadingtrucking
truckingcompany,
company,expanding
expandingin
step
withwiththe thegrowthof theJapanese
economyand andthe thein step
growthof theJapanese
economydevelopment
developmentofofthe
thenation’s
nation’sextensive
extensiveexpressway
expresswaynetwork.
network.
On
On October
October1,1,2005,
2005,thetheCompany
Companytransferredtransferreditsits
transportationtransportationbusinessbusinessand
andotherotheroperations
operationstotoa anew
newcompany—which
company—whichhas
hastakentakenthetheoriginal
originalname
nameSeino
Seino
Transportation
Transportation Co.,
Co.,Ltd.—andLtd.—andwas
wasrenamed
renamedSeino
SeinoHoldings
Co.,Ltd., adopting
Holdings
Co., Ltd. aa pure
pure holding
holdingcompany
companystructure.
structure.
The Seino Group currently consists of the pure holding
company Seino Holdings,
Holdings,61
58 consolidated
consolidatedsubsidiaries
subsidiariesand
and14
14
affiliates engaged in transportationtransportation services,
services,vehicle
vehiclesales,
sales,
merchandise sales, leasingleasing forfor real
real estate
estate services
servicesand
andotherotherservices.
services.
In its mainstay Transportation
In
Transportation Services
Services business,business,thetheCompany has taken steps toCompany
to build
build even
even more
moreconvenientconvenientlogistics systems, all the while
logistics
while adhering
adhering toto itsits“customer-first”“customer-first”
principle. As of March 31, 2013,
principle.
2011, Seino
Seino offers
offersefficientefficienttransportation services throughout
transportation
throughout Japan
Japan via
viaitsits631634domestic
domestic
terminals, a fleet of 23,791
24,321 trucks
trucks andand aa trucking
truckingnetwork
networkthat
that
4,000 routes daily.
averages 5,000
daily. Overseas,
Overseas,Seino
Seinohas
hastransferredtransferredits
itsinternational forwarding
forwarding operations
operations to
toSchenker-Seino
Schenker-SeinoCo.,
Co.,
Ltd., a joint venture
venture establishedestablished with
withSchenker
SchenkerAG
AGininGermany.
Through this alliance, the Company aims to bolster its
competitiveness byCompany
optimizing
thetosynergies
of Seino’s domestic
aims
bolster its
transportation network
and Schenker’s
global network
andcompetitivenessby optimizing
the synergies
cutting-edge IT systems.
of Seino’s domestic transportation network
Seino
Groupandis committed
and Schenker’sTheglobalnetwork
toIT
providingcutting-edge
systems.rapid services thatdeliver total customer satisfaction
and will
proceedthetotal“Road
providing rapid
services
thatdown
deliverto Success”andto becomea highlycustomer satisfaction
will proceed
down
profitablethroughthe “Road to
Success”company
to becomea highly
initiativesthroughto develop
a progressive
profitable company
initiatives
to
ダミーです。
business model
thatmodel
will become
develop a progressive
businessthatwill becomethe
thestandard
standardfor
fornext-generationtransportation
business.
next-generationtransportation
business.

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

Contents
Contents
Financial Highlights
Financial
Highlights

11

To Our Shareholders,Shareholders,Customers
CustomersandandFriends
Friends

22

Special FeatureSpecialFeature44

Review ofReviewof Operations
Operations

66

Financial Review
Financial
Review

88

Six-year Summary
Six-year
Summary

99

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

13
13

Notes toto Consolidated
ConsolidatedFinancial
FinancialStatements
Statements

14
14

Report of Independent
IndependentAuditors
Auditors

24
24

Seino Group
Group

25
25

Board of Directors(As of June 26, 2015)
Chairman andChief Executive Officer

Yoshikazu Taguchi

President andChief Operating Officer

Yoshitaka Taguchi

Directors

Takao Taguchi
Shizutoshi Otsuka
Hidemi Maruta
Harumi Furuhashi

Outside Directors

Yuji Tanahashi
Kenjiro Ueno

Standing Statutory Auditors

Takahiko Kumamoto
Shingo Terada

Outside Statutory Auditors

Fumio Kato
Eiji Kasamatsu

SEINO HOLDINGS CO., LTD.

Financial Highlights(Billions of Yen)

For the Years Ended March 31, 2015, 2014 and 2013

Thousands of
U.S. Dollars (Note)

Millions of Yen
CONSOLIDATED BASIS:
Operating revenue
Operating income
Income before income taxes
Net income
Net income per share

2015

2014

2013

2015

¥ 542,452 ¥ 543,407 ¥ 516,185
20,18914,346
21,38625,03817,57423,262
15,49012,151
14,456
77.85
61.05
72.67

$ 4,520,433
178,216
193,850
120,467
0.61

Millions of Yen

Thousands of
U.S. Dollars (Note)2015

CONSOLIDATED BASIS:
Cash and cash equivalents, and short-term investments ¥ 91,998
Property and equipment, net of accumulated depreciation
275,034
Total assets
548,525
Long-term debt and other long-term liabilities
83,382
Net assets
363,314
Net assets per share
1,778.29

2014

2013

2015

¥ 97,729
270,888542,41183,676346,339
1,696.37¥ 76,934
270,367
510,467
71,594
331,702
1,625.30$ 766,650
2,291,950
4,571,042
694,850
3,027,617
14.81

2013

2014

2015

2014

2015

2014

2015

Net income(Billions of Yen)

20
15
10
5
0

(Note) U.S. dollar amounts are translated at ¥120 = U.S. $1, only for the convenience of readers.

2013(Billions of Yen)

350
300
250
200
150

Corporate Data

100
50

(As of March 31, 2015)

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

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

2013

1

Message from the Management

To Our Shareholders, Customers and Friends
We would like to take this opportunity to express our appreciation to our stakeholders, including shareholders
and other investors, for the consistent support you have shown us over the years. The results for the fiscal year
ending March, 2015 (April 1, 2014 to March 31, 2015) are presented herein.

New Medium-term Management Plan
“JUMPUP 70” 2014/4 -2017/3
The following is a brief report on the performance of Seino
Holdings Co., Ltd. for the fiscal year ended March 31, 2015, our94th term (from April 1, 2014 to March 31, 2015).
In the fiscal year under review, Japan’s economy continued alonga recovery track, albeit moderately, due mainly to the effects ofeconomic and financial measures in addition to an increase incapital investment and an improvement in the employment
situation. Nevertheless, prospects for the economy remained
unclear, partly reflecting concerns such as weakness in personal
consumption and a slowdown in exports due to downswings inoverseas economies.
In the transportation industry, the Seino Group’s mainstay
business, freight volume declined owing to a pullback in demand,
which was the result of a rush that occurred in the previous fiscal
year, and other factors including unseasonable weather in thesummer and prolonged stagnation in personal consumption.
Against this background, problems such as a shortage of drivers
and rising transportation costs also put pressure on businesses, andthe operating environment for this industry continued to bedifficult.

Initiatives and Results for the Fiscal
Year under Review
In this environment, we steadily implemented the various
measures in our new three-year, medium-term management plan
“JUMP UP 70: Change for the Future,” which started this fiscal
year, in order to achieve our numerical targets. In parallel with
this, all of our Group companies came together in making efforts
to create new value with the aim of enhancing corporate value.
As a result, operating revenue for the fiscal year ended March
31, 2015 was ¥542,452 million (down 0.2% year on year), operating
income was ¥21,386 million (up 5.9% year on year), ordinary
income was ¥23,507 million (down 7.2% year on year), and net
income was ¥14,456 million (down 6.7% year on year).

Future Outlook
In our outlook for the Japanese economy, we expect that themoderate tone of recovery will continue on the back of various
policy measures and firmness in the employment situation.
Nevertheless, there are lingering uncertainties reflecting concerns
2such as a slowdown in exports due to downswings in overseas
economies and prolonged weakness in personal consumption.
In the transportation industry, the primary industry of the
Seino Group, we expect freight volume to continue its tendency todecline. Given this situation we forecast that the operating
environment will continue to be unpredictable due partly to
problems such as rising outsourcing costs reflecting a shortage ofmanpower and a shortage of drivers.
Against this background, we will aim to achieve our numericaltargets by steadily implementing the various measures in our
medium-term management plan, which will be in its second year.
In addition, we will work to achieve further selection andconcentration of business resources and make all-out efforts torealize expansion and development in our businesses, including
growing our finance service for companies.
In the Transportation Services Business, we will not only workto acquire new customers and expand our logistics business, butalso carry out vigorous negotiations to ensure that we receive
reasonable transport fees and charges, and fuel surcharges. We will
also work to properly manage our capabilities and our costs. In
these ways we will endeavor to secure revenue and profit.
Furthermore, we will change our framework for frequency oftransportation by promoting docking on routes within a 600
kilometer area, and improve our retention of crew members onroutes and our ability to recruit such crew members. We will also
further enhance quality and accuracy with the virtuous cycle of ourtransport services.
In the Vehicle Sales Business, we will continue working tofirmly maintain our profit structure not only with respect to salesof new vehicles but also with a stronger focus on sales of used
vehicles, vehicle inspections, vehicle maintenance and garage
services, and other operations, by accurately grasping changing
consumer needs.
In addition, we took the decision to make our six consolidated
subsidiaries Seino Super Express Co., Ltd., Seino Sangyo Co.,
Ltd., Seino Family Co., Ltd., Seino Tsu-un Transportation Co.,
Ltd., Suito Travel Co., Ltd. and Seino Engineering Co., Ltd. into
wholly-owned subsidiaries on April 1, 2015.
We believe that this move will further strengthen the capital
relationships across the whole Group and allow us to respond
nimbly and flexibly to changes in the increasingly difficult businessenvironment.
The operating environment surrounding the Seino Group ischanging at every moment, and the speed of these changes is
accelerating. Amid this situation, we intend to push forward withthe aim of further growth in order to become Japan’s top corporategroup, in accordance with this year’s slogan of “Forging Ahead,”through the combined efforts of the Seino Group’s 61 companies
with the Company at their center.

Corporate GovernanceSeino employs a corporate auditor system. As of March 31,
2015, the Board of Directors consisted of 9 directors, including 2
outside directors. In addition to making swift and appropriate
decisions on such important matters as business restructuring andstrategic investments, the Board of Directors is strengthening
auditing functions and achieving greater managementtransparency.
The company also has 4 corporate auditors, including 2 outside
auditors. Auditors are committed to improving compliance andenhancing the trust that society has in the company through suchactivities as attending meetings of the Board of Directors,
conferences of directors and other important gatherings, andauditing business execution.

To Our Shareholders
Our company considers the profit of our shareholders to be oneof our core management policies.
Regarding profit allocation, at the same time as enhancing
shareholders’ equity and improving profitability from a mid-to-longterm perspective, we endeavor to implement interim dividends andin principle, set an annual cash dividend per share of ¥11 per year
and aim for a consolidated dividend payout ratio of 30%.
Through the implementation of our new medium-term
management plan, we aim to be the top commercial freighttransportation company in Japan while at the same time raising
corporate and shareholder value. We ask our shareholders,customers and friends for your continued understanding andsupport.

Yoshikazu Taguchi
Chairman and Chief Executive Officer

Yoshitaka Taguchi
President and Chief Operating Officer

3

Special Feature

Expanding Our Operations Scope and Creating New ValueThe Seino Group established “Challenging towards Change”,
a medium-term management plan beginning in the fiscal year of
2013, and vigorously promoted the forming of new systems whichmatch group company functions and customers to provide alogistics service which “connects to the needs” of all customers.
In addition, the Seino Group has strove to become a corporation
where each of its individual companies is the one chosen bycustomers in their respective industries, thereby building an
unshakeable business foundation.
The following outlines initiatives implemented by respective
business groups in the fiscal year of 2014.

Business Group Initiatives
Transportation Services/Business Group

Opening Ceremony to Mark
Completion of a New Sendai Branch

On June 30th, Seino Transportation held a ceremony to markboth the completion and opening of its new Sendai branch(Miyagino ward, Sendai city) that it had been working on sincelast year.
The former Sendai branch (Wakabayashi ward, Sendai city),as the central base for the Tohoku region, handled one of thehighest volumes in the Seino Group, and was becoming too
cramped as a result. Amidst these circumstances, theadministration building was damaged in the Great East Japan
Earthquake that struck in 2011, instigating the decision to
relocate and build a new branch.
The new Sendai branch boasts the largest scale in the Tohoku
area, and in addition to having a storehouse, automated sorting
machine and inspection/maintenance area, it is also the locationof Seino Super Express (former Seibu Transportation). As such,it serves as the Seino Group’s northern stronghold, boasting anenvironment that can provide a complete service consisting of
consolidated route deliveries,
express deliveries and air
freight. Furthermore, inAugust, the freightforwarding to the northern
Tohoku region tasks
currently carried out by the
Sendai South branch will betaken over by the new Sendai
branch.

Introduction of a Global Internship
ProgramSeino Transportation has introduced a global internshipprogram aimed at nurturing employees which can respond to thisglobal age.
The aim of the program is to nurture employees who can form
the know-how and international strategies of the Seino Group in
4order to respond to ourcustomers’ global logistic
needs.
The three interns willcomplete training in Japan,
then be assigned to customer
service duties, etc. at
Schenker-Seino bases in Bangkok, Singapore and Jakarta for aperiod of seven months. Upon return to Japan, the interns will
work in the Logistics Department and R&D Department.

Takeo Branch Completion Ceremony

A completion ceremony has been held by Kyushu Seino
Transportation (headquartered in Hakata ward, Fukuoka city) tomark the completion of its Takeo branch.
Kyushu Seino Transportation’s three business offices in
Karatsu, Imari and Kashima had all become too cramped andwere beginning to show signs of age-related deterioration,
therefore a new branch was built in Takeo city, Saga prefecture,
integrating the three sales offices in what will serve as the heart of
the Kyushu operations area.
The new Takeo branch
will enable improvement in
operation efficiency and aims
to increase revenue andenhance customer service in amarket with future potential.

Provision of a Transport Network

Seino Super Express (headquartered in Koto ward, Tokyo)
has begun providing a transportation and delivery service to thenationwide speed delivery network operated by Express Network(headquartered in Minato ward, Tokyo)
Express Network has built a low-cost transport network
which links multiple
corporate logistics networks,
and provides the speed
delivery service, “S-PAT.”
With the inclusion of Seino
Super Express’s air freight
and truck freight into thistransport network, a further
increase in delivery speed is
expected.

Establishment of SP Express

A new group company, SP Express Co., Ltd. (headquarteredin Chuo ward, Tokyo) has been established within Seino
Holdings. SP Express is a joint venture between Seino Holdings
and the Korean company, Pantos. It was established with the aimof incorporating courier services in Asia, with a focus on China,
and as such will first focus on custom-related duties for freightimported from China. On
April 8th, a signing ceremony
for SP Express was held at
Seino Transportation’s head
office in the presence ofPresident Taguchi and
President Otsuka.

Commencement of an Urban-style Onthe-Spot Shopping Service

Since May 8th, COCONET Co., Ltd. (headquartered in
Chuo ward, Tokyo) has been providing a shopping service called“Sugu-tsuku” in the Toyosu area of Koto ward, Tokyo.
This service has a dedicated site operated by COCONET
Co., Ltd. within the Yahoo! Shopping site and consists ofpurchasing everyday groceries and food (for which there is ahighly urgent need) for customers from actual stores anddelivering it to their homes inthe service area within a
two-hour timeframe.
In addition to theextremely short delivery time,
the strength of this service isthe careful attention to detailby the “heartists” (femaledelivery staff).

Vehicle Sales & Other Businesses
Establishment of a Service Center in
the Philippines

On November 27th, SUBIC GS AUTO INC., a joint venture
formed by GIFU HINO MOTOR CO., LTD. (headquarteredin Anpachi, Gifu prefecture) and KILTON INVESTMENTHOLDINGS CO., INC., established a service center in the Cityof Parañaque, one of the cities that make up Metro Manila.
Since SUBIC GS AUTO INC. was established, it hasenjoyed strong new car sales and in order to establish anadvantage over othercompanies as soon as
possible, it has constructed
the largest-scale service
center exclusively for large
vehicles in the Philippines.
This move will enhance theafter-sales service
framework.

Takayama Branch Completion
CeremonyOn April 8th, a completion ceremony was held by Gifu Hino
Motor (headquartered in Anpachi, Gifu prefecture) to mark thecompletion of its Takayama branch.
This move was in order to improve the issues the branch had
been facing such as deterioration of its building, a cramped siteand entry from a national highway. Moreover, the new Takayama

branch has thoroughly
implemented environmental
and safety countermeasures
for factory equipment,
included the latest computer
inspection system, a pit floor
lift and oil/water separation
tank. Also, in order toprevent the road surface at the delivery entrance and front of the
branch freezing in winter, a non-sprinkled snow melting method
using well water is adopted, securing safety.

Shinsei Branch Completion Ceremony

On October 2nd, a completion ceremony was held by Toyota
Corolla Gifu to mark the relocation and new construction of its
Shinsei branch (Motosu city, Gifu prefecture).
The original Shinsei branch was expropriated due to plans
related to National Highway 475, Tokai-Kanjo Expressway,
therefore a new branch was built along the Gifu Sekigahara
prefectural highway in a location approximately 800 meters westof the original branch.
The new branch has been built on a wider lot, therefore
offering more room todisplay vehicles outdoors anda wider customer parking
lot. Through this move,
Toyota Corolla Gifu aims tooffer customers a more
comfortable car life
experience.

Renewal of Car Lots Tajimi

Toyota Corolla Gifu (headquartered in Rokujoomizo, Gifu
city) has held a completion ceremony to mark completion of its
Car Lots Tajimi repair shop and consultation/waiting room.
By adding a repair shop to the existing used car dealership,
the renewal of Car Lots Tajimi has improved the functionality ofthe branch by relocating the retail side and purchase side ofoperations in the one area, thus consolidating the functions ofused car retail, maintenance and purchase. Completion isplanned for mid-November following additional work such as a
new surface for the used-car display area and changing the nameon the sign to “Car Lots.”

Introduction of Big Data Utilization
ExamplesSeino Information Service (headquartered in Ogaki city, Gifu
prefecture) participated in a business forum hosted by Ashisuto
in Nagoya.
In this forum, Seino Information Service representatives
introduced examples of how
big data was being utilized
by Seino Transportation inorder to support sales
strategies.

5

Expanding Our Operations Scope and Creating New Value
Transportation Services BusinessIn the Transportation Services Business, based on our new
medium-term management plan, we sought to expand revenue
and secure profit by steadily implementing primary policies
such as the achievement of stability in the transportation
network, expansion of the logistics business and addressing
globalization.
With respect to office expansion efforts, we worked tomake improvements such as strengthening our sales
capabilities and enhancing operational efficiency through therelocation and new establishment of the Sendai branch(Sendai City) by Seino Transportation Co., Ltd., and theestablishment of the Takeo branch (Takeo City, Saga
Prefecture) through the integration of the Karatsu, Imari andKashima sales offices by Kyushu Seino Transportation, Co.,Ltd.
In particular, at the new Sendai branch, which functions as
our hub in the Tohoku region following a significant increasein branch size, it is now possible to use automatic sorting
machines in operations for forwarding parcels to the northern
Tohoku area. Furthermore, the Sendai freight center of Seino
Super Express Co., Ltd. and the Sendai sales office of Tohoku
Seino Transportation Co., Ltd. were both relocated to within
the new Sendai branch, concentrating road transport, expressdelivery and air transport functions into one site. With thisnew Sendai branch, we aim to increase speed and enhance
efficiency.
At Seino Transportation Co., Ltd., the core company of
the Transportation Services Business group, we fell short ofour initial target for freight volume. In response, we worked tosecure revenue not only by acquiring new customers but also
by endeavoring to receive reasonable transport fees andcharges, and fuel surcharges, and to carry out new
development and management of freighters with a focus on
the continuation of delivery prices. In parallel, we worked tocontinue securing stable profit by properly managing ourcapabilities and our costs in accordance with freight volume.
In addition, aiming to enhance the series of transport
services linking the stages of collection, line-haul routes anddelivery, we worked to achieve further improvements incustomer satisfaction through further advancement of thevirtuous transportation cycle by providing the stabletransportation capabilities that are a source of pride for Seino
Transportation Co., Ltd. along with good timing, positive
impressions and accuracy.
As a result of the above, operating revenue for this segment
was ¥398,972 million, up 1.4% year on year, and operating
income was ¥14,698 million, up 15.0% year on year.

Vehicle Sales BusinessIn the passenger vehicle sales, in order to minimize theimpacts from a pullback in demand following a rush ahead ofa consumption tax hike in April 2014 and a delayed recovery
in individual consumption, we carried out sales activities
centered on environment-responsive vehicles, for which there
are high customer needs, and sales operations taking
advantage of the effects of new vehicle model launches.
Despite these efforts, the number of new vehicles sold was
down year on year.
The number of used vehicles sold also decreased year on
year, reflecting not only a decline in vehicles traded in due tothe slump in sales of new vehicles but also weakness in theauction market. On the other hand, we worked to secureservice revenue by promoting vehicle inspections focused onenhancing customer service, and vehicle maintenance andgarage services.
In truck sales, the number of new vehicles sold increased
year on year due partly to an increase in strong demand for

6

construction-use trucks, despite the pullback in demandfollowing the rush ahead of the consumption tax hike.
Furthermore, operating income was up year on year as a resultof efforts to capture demand for vehicle inspections and otherforms of vehicle maintenance and make sales of used vehicles
and parts.
Our office expansion efforts consisted of the relocation andnew establishment of Shinsei store (Motosu City, Gifu
Prefecture) and the renewal of the Car Lots Tajimi store(Tajimi City, Gifu Prefecture) by Toyota Corolla Gifu Co.,
Ltd., the relocation and new establishment of the Takayama
store (Takayama City, Gifu Prefecture) by Gifu Hino MotorCo., Ltd. and the establishment of the Tajimi store (Tajimi
City, Gifu Prefecture) by Jms Gifu Co., Ltd.
As a result of the above, operating revenue for this segment
was ¥95,351 million, down 5.2% year on year, and operating
income was ¥4,890 million, down 8.6% year on year.

Merchandise Sales Business
The Merchandise Sales Business engages in the sale of fuel,paper and paper products. In this segment, although sales ofdomestic tissue papers were firm, operating revenue for thissegment was ¥32,698 million, down 1.8% year on year, duepartly to fuel sales, in which sales unit prices fell due to theimpact of a dramatic fall in the price of crude oil. Operating
income was ¥754 million, up 3.3% year on year.

Leasing for Real Estate Services BusinessIn the Leasing for Real Estate Services Business, we strove
to effectively utilize business resources by leasing the former
truck terminals and the sites where there used to be stores,
which had been replaced mainly due to the impact of urban
development and current operating space becoming

increasingly cramped.
Operating revenue for this segment was ¥1,400 million,
down 1.4% year on year, and operating income was ¥1,199
million, down 1.9% year on year.

Other Business
Our Other Business segment includes the information
services business, the housing sales business, the construction
contract business, the passenger transportation business, andthe personnel services business. In order to enhance the added
value provided by our transportation services, we have also
started a new finance service for companies, which provides
support for customers’ commercial transactions and funding.

The housing sales business faced a considerable struggle
due to the impact of the consumption tax hike, while in theinformation services business, profitability of softwaredevelopment improved. Partly reflecting these factors,
operating revenue for this segment was ¥14,029 million, down
5.2% year on year, and operating income was ¥546 million, up
0.2% year on year.

Operating Revenue by Business Segment(Millions of yen)
FY3/14

FY3/15Results

Composition

Results

Composition

Year-on-YearTransportation Services

398,97273.5%

393,320

72.4%

1.4%

Vehicle Sales

95,351

17.6%

100,569

18.5%(5.2%)

Merchandise Sales

32,6996.0%

33,3066.1%(1.8%)

Leasing for Real Estate Services

1,401

0.3%

1,421

0.3%

(1.4%)

Other

14,0292.6%

14,791

2.7%(5.2%)

Total

542,452

100.0%

543,407100.0%(0.2%)

Composition

Year-on-Year

Operating Income by Business Segment(Millions of yen)
FY3/15Results

FY3/14Composition

Results

Transportation Services

14,69968.7%

12,779

63.3%

15.0%

Vehicle Sales

4,890

22.9%

5,352

26.5%

(8.6%)

755

3.5%

731

3.6%

3.3%

1,199

5.6%

1,222

6.1%

(1.9%)

Other

546

2.6%

544

2.7%

0.2%

Total

22,089103.3%

20,628102.2%

7.1%

Elimination(703)(3.3%)(439)(2.2%)—

Consolidated

21,386100.0%

20,189100.0%

5.9%

Merchandise Sales
Leasing for Real Estate Services

7

Financial Review
Operating Results

Total current assets decreased 0.2% to ¥221,338 million(US$1,844,483 thousand) compared with the previous fiscal
year-end. Total fixed assets increased 2.0% from the previous
fiscal year-end to ¥327,187 million (US$2,726,559 thousand).
Total current liabilities decreased 9.4% compared with theprevious fiscal year-end to ¥101,829 million (US$1,543,425
thousand). This was due primarily to trade payables andincome tax payable.
Long-term liabilities decreased 5.5% from the previous
fiscal year-end to ¥83,382 million (US$694,850 thousand).
The main factors behind this result were decreased in deferred
tax liabilities.
Net assets rose 4.9% from the previous fiscal year-end to¥363,314 million (US$3,027,617 thousand). The major factor
was an increase in retained earnings derived from the postingof net income. Shareholders’ equity decreased 2.3 percentage
point to 64.5%.

Consolidated operating revenue for Seino Holdings for the
fiscal year ended March 31, 2015 decreased 0.2% from theprevious fiscal year to ¥542,452 million (US$4,520,433
thousand). This was due to decreased sales in Vehicle sales,
Merchandises sales Leasing for real estate services and otherservices.
Operating costs of revenues decrease 0.4% from the previous
fiscal year to ¥487,664 million (US$4,520,433 thousand). The
ratio of operating costs to operating revenue was 89.8%, down
0.3 percentage point from the previous fiscal year.
Selling, general and administrative expenses increase 0.5%
to ¥33,402 million (US$278,350 thousand), while operating
income increased 5.9% to ¥21,386 million (US$178,216
thousand).
Other income (expenses) stood at ¥1,876 million(US$15,634 thousand). Key negative factors were theanoritization of negative goodwill of ¥3 million (US$25
thousand).
As a result, income before income taxes and minority
interests amounted to ¥23,262 million (US$193,850
thousand), down 7.0% year-on-year. Net income decreased
6.6% to ¥14,456 million (US$120,467 thousand).
Net income per share was ¥72.67 (US$0.61), and returnon equity was 4.0%. Annual cash dividends per share weremaintained at ¥21.00 (US$0.18), up to 90.9% in the previous
year.

Cash FlowsNet cash provided by operating activities decreased ¥9,004
million compared with the previous fiscal year to ¥18,496
million (US$154,133 thousand) due mainly to decrease intrade receivables in the previous fiscal year.
Net cash used in investing activities increased ¥33,566
million compared with the previous fiscal year to ¥1 million(US$8 thousand) due primarily to an increase in short-term
investments.
Net cash used in financing activities decreased ¥14,836
million compared with the previous fiscal year to¥7,284million (US$60,700 thousand).
Consequently, cash and cash equivalents at end of year
increased ¥11,221 million compared with the previous fiscal
year to ¥66,778 million (US$556,483 thousand).

Financial Position

Total assets at the end of the fiscal year under review were¥548,525 million (US$4,571,042 thousand), up 1.1% versus
the previous fiscal year-end.

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

2010

2011

2012

2013

2014

2015

-5

60

40

20

2010

2011

2012

2013

Operating income to operating revenue

Net income (loss) to total assets

Net income (loss) to operating revenue

Return on equity ratio

2014

2015

0

2010

2011

2012

2013

2014

2015

SEINO HOLDINGS CO., LTD. and Consolidated Subsidiaries

Six-year Summary

For the Years Ended March 31, 2015, 2014, 2013, 2012, 2011 and 2010
Millions of Yen
2015
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

¥

2014

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

543,407393,320
100,569
33,306
1,421
14,791490,002¥2012

516,185
371,546
96,14832,457
1,438
14,596
467,596¥2011

504,277
370,592
87,75530,144
1,416
14,370457,512¥2010

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

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

33,402
21,386
14,45633,21820,18915,49034,243
14,346
12,15132,89813,867
12,542

33,023
12,326
8,449

33,342
6,621
9,477

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

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

196,803
510,467
107,1712,473
314
331,702

186,255
500,963108,2192,475
565
318,650

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

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

Yen
Per share data:
Net (loss) income:-BasicCash dividends¥

Number of shares issued

72.67
21.00

¥

207,679

77.85
11.00

¥

61.05
11.00

¥

63.02
11.00

¥

Thousands
207,679
207,679

207,679

42.44
11.00

¥

47.60
11.00

207,679

207,679

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

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

3.9
2.6
2.6
4.0
64.5
217.4
52.3
15.1

Current ratio
(%)

200

3.7
2.9
2.9
4.5
62.2
197.4
57.7
14.1

2.8
2.4
2.4
3.7
63.4
183.6
55.3
18.0

2.7
2.5
2.5
4.0
62.0
172.1
58.7
17.5

Debt equity ratio

Payout ratio

(%)

(%)

120

70
60

160

50

90

40
30

120

20

60

10

80

0

30

40

-10
-20

0

2010

2011

2012

2013

2014

2015

0

2010

2011

2012

2013

2014

2015

-30

2010

2011

2012

2013

2014

2015

9

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Balance Sheets
March 31, 2015 and 2014

Millions of yen
2015
Assets:Current assets:
Cash and cash equivalents (Note 3)
Short-term investments (Notes 3 and 5)
Trade receivables (Note 3)Inventories (Note 4)
Deferred tax assets (Note 14)
Other current assets
Allowance for doubtful accounts
Total current assets¥

Property and equipment (Notes 6, 7 and 9):
At costAccumulated depreciation
Net property and equipment
Investments and other assets:
Investment securities (Notes 3 and 5)
Investments in and long-term loans to affiliates (Note 5)
Deferred tax assets (Note 14)
Employee retirement benefit asset (Note 10)

Other assets

Total investments and other assets
Total assets

Current liabilities:
Short-term borrowings (Notes 3 and 9)
Current portion of long-term debt (Notes 3 and 9)
Trade payables (Note 3)
Accrued expenses
Income taxes payable
Other current liabilities
Total current liabilities¥¥

Long-term debt (Notes 3 and 9)
Employee retirement benefit liability (Note 10)
Asset retirement obligations (Note 8)
Accrued severance indemnities for directors and corporate auditors
Deferred tax liabilities (Note 14)
Negative goodwill (Note 16)
Other long-term liabilities
Total liabilities

66,77825,220105,257
9,965
4,951
9,379
(212)
221,338

2014

Thousands of
U.S. dollars
2015

55,55742,172
106,846
8,281
4,863
4,348
(194)
221,873$

549,691(274,657)
275,034

539,526(268,638)
270,888

4,580,758(2,288,808)
2,291,950

30,335
3,419
5,761
4,386
8,252
52,153
548,525

25,231
3,297
10,9901,569
8,563
49,650542,411

252,792
28,49248,00836,55068,767434,609$ 4,571,042

2,465
81
57,58813,325
6,680
32,257112,396

$

2,519
34
44,082
13,6243,300
38,270101,829¥¥¥

556,483
210,167
877,142
83,042
41,25878,158(1,767)
1,844,483

20,992
283
367,350
113,533
27,500318,917
848,575

10,09164,453
2,548
1,543
4,364
—
383
185,211

10,13360,707
2,508
1,493
8,475
3
357
196,072

84,092
537,108
21,233
12,85836,367—
3,192
1,543,425

42,482
74,261
235,133(8,704)
343,172

42,482
74,261
222,861(8,687)
330,917354,017618,842
1,959,442(72,534)
2,859,767

11,949(131)(1,143)(102)
10,573
9,569
363,314548,525 ¥

7,922
(133)
(1,068)
(163)
6,558
8,864
346,339
542,411

99,575(1,092)(9,525)(850)
88,10879,742
3,027,617$ 4,571,042

Commitments and contingent liabilities (Notes 11 and 12)
Net assets:
Shareholders’ equity (Note 13):
Common stock: 794,524,668 shares authorized and 207,679,783 shares issued
Capital surplus
Retained earnings
Less treasury stock at cost: 8,755,890 shares in 2015 and 8,741,295 shares in 2014
Total shareholders’ equity
Accumulated other comprehensive income:Net unrealized gains on available-for-sale securities

Land revaluation decrement

Retirement benefit adjustment
Foreign currency translation adjustments
Total accumulated other comprehensive income
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, 2015, 2014 and 2013

2013

Thousands of
U.S. dollars
2015

516,185$ 4,520,433

Millions of yen
2015
Operating revenue (Note 16)¥

Operating costs and expenses (Note 10):
Operating costs
Selling, general and administrative expenses
Operating income
Other income (expenses):
Interest and dividend income
Interest expense(Loss) gain on sale or disposal of property and equipment
Gain on sale of investment securities
Equity in net income of affiliates
Amortization of negative goodwill (Note 16)
Impairment loss on fixed assets (Notes 2(i) and 16)
Loss on write-down of investment securities
Compensation received for the exercise of eminent domain
Expenses related to change of business nameBond issuance cost
Gain on negative goodwill (Note 16)
Miscellaneous, net
Income before income taxes and minority interests
Income taxes (Note 14):
Current
Deferred
Total income taxes
Income before minority interests
Minority interests in net income of subsidiaries
Net income¥

542,4522014¥

543,407¥487,664
33,402521,066
21,386490,00233,216523,218
20,189467,596
34,243501,839
14,346

4,063,867
278,350
4,342,217
178,216

596
(26)
(41)
2
401
3
(127)
(3)
236
(255)
—
—
1,090
1,876
23,262

538
(24)
104
7
435
3,042
(440)
(20)
—
—
(48)
—
1,255
4,849
25,038

473
(31)
259
2
249
3,055
(2,199)
(20)
—
—
—
36
1,404
3,228
17,574

4,967
(217)
(342)
17
3,342
25
(1,058)(25)
1,967(2,125)——
9,083
15,634
193,850

8,526
(241)
8,285

10,188(1,095)
9,093

6,544
(1,498)5,046

71,050(2,008)69,042

14,977

15,945

12,528124,808521
14,456¥455
15,490¥377
12,151$

4,341
120,467

U.S. dollars

Yen
Per share:

Net income:-Basic-Diluted
Cash dividends

¥

72.67
70.30
21.00

¥

77.85
76.56
11.00

¥

61.05
—
11.00

$

0.61
0.59
0.18

See accompanying Notes to Consolidated Financial Statements.
11

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Comprehensive Income
For the Years Ended March 31, 2015, 2014 and 2013

2013

Thousands of
U.S. dollars
2015¥

12,528$

128,808

¥

2,667
96
—
2
2,765
15,293$33,583508
684
358
35,133
159,941

Millions of yen
2015
Income before minority interests¥
Other comprehensive income (Note 15):
Net unrealized gains on available-for-sale securities
Foreign currency translation adjustments
Retirement benefit adjustment
Share of other comprehensive income of affiliates accounted for using equity method
Total other comprehensive income¥
Comprehensive income
Comprehensive income attributable to:
Owners of the parent¥
Minority interests

2014

14,977
4,030
61
82
43
4,216
19,193
18,469724¥

15,945

¥

1,767
101
—
4
1,872
17,817¥

17,340477¥$

14,909384

153,908
6,033

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2015, 2014 and 2013

Shareholders’ equity
Number ofshares ofcommon Common Capitalstock issued stock
surplus

Accumulated other comprehensive income

Total
Net unrealized
Foreign
Total
gains onLand
Retirement currency accumulated
other
Retained Treasury shareholders’ available-for- revaluation benefit translation comprehensive Minority
earnings
stock
equity sale securities decrement adjustment adjustments income
interests

Total net
assetsMillions of yen
Balance at April 11, 2012
207,679,783 ¥ 42,482 ¥ 74,261 ¥ 199,599 ¥Net income for the year———
12,151
Cash dividends———(2,189)Purchases of treasury stock andfractional shares, net————
Net changes in items other thanshareholders’ equity————
Balance at March 31, 2013 207,679,783
42,482
74,261
209,561
Net income for the year———
15,490Cash dividends———(2,189)
Reversal of land revaluation decrement
—
—
—
(1)
Purchases of treasury stock andfractional shares, net————
Net changes in items other thanshareholders’ equity————
Balance at March 31, 2014 207,679,783
42,482
74,261
222,861
Net income for the year———
14,456
Cash dividends———(2,188)
Reversal of land revaluation
decrement———
4
Purchases of treasury stock andfractional shares, net————
Net changes in items other thanshareholders’ equity————
Balance at March 31, 2015 207,679,783 ¥ 42,482 ¥ 74,261 ¥ 235,133 ¥(8,603) ¥ 307,739 ¥ 3,509 ¥—
12,151——(2,189)—(132) ¥
—
—

—¥
—
—

(360) ¥ 3,017 ¥ 7,894 ¥ 318,650———
12,151———(2,189)

(9)

(9)

—

—

—

—

—

—

(9)

—
(8,612)————
317,692
15,490(2,189)
(1)

2,663
6,172
—
—
—

(1)
(133)
—
—
—

—
—
—
—
—

96
(264)
—
—
—

2,758
5,775
—
—
—

341
8,235
—
—
—

3,099
331,702
15,490(2,189)
(1)

(75)

(75)

—

—

—

—

—

—

(75)

—
(8,687)———
330,917
14,456(2,188)

1,750
7,922
—
—

—
(133)
—
—

(1,068)(1,068)
—
—

101
(163)
—
—

783
6,558
—
—

629
8,864
—
—

1,412
346,339
14,456(2,188)

—

4

—

—

—

—

—

—

4

(17)

(17)

—

—

—

—

—

—

(17)

—
—
4,027
(8,704) ¥ 343,172 ¥ 11,949 ¥

2(75)(131) ¥ (1,143) ¥

61
4,015
705
4,720
(102) ¥ 10,573 ¥ 9,569 ¥ 363,314

Thousands of U.S. dollars
Balance at March 31, 2014
Net income for the year
Cash dividends
Reversal of land revaluation decrement
Purchases of treasury stock andfractional shares, net
Net changes in items other thanshareholders’ equity
Balance at March 31, 2015

$ 354,017 $ 618,842 $1,857,175 $ (72,392) $2,757,642 $ 66,017 $ (1,109) $ (8,900) $ (1,358) $ 54,650 $ 73,867 $ 2,886,159—— 120,467— 120,467
—
—
—
—
—
—
120,467—— (18,233)— (18,233)
—
—
—
—
—
—
(18,233)
—
—
33
—
33
—
—
—
—
—
—
33
—

—

(142)

(142)

—

—

—

—
—
—
—
— 33,558
17(625)$ 354,017 $ 618,842 $1,959,442 $ (72,534) $2,859,767 $ 99,575 $ (1,092) $ (9,525) $See accompanying Notes to Consolidated Financial Statements.
12

—

—

—

—

(142)

508
33,458
5,875
39,333(850) $ 88,108 $ 79,742 $ 3,027,617

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Cash Flows
For the Years Ended March 31, 2015, 2014 and 2013

2013

Thousands of
U.S. dollars
2015

17,574$

Millions of yen
2015
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
Bond issuance cost
Net increase in employee retirement benefit liability
Net increase in provision for employee retirement benefits
Loss (gain) on sale or disposal of property and equipment
Equity in net income of affiliates
Loss on write-down of investment securities
Gain on sale of investment securities
Net provision for accrued severance indemnities for directors andcorporate auditors
Decrease in provision for loss on disaster
Decrease (increase) in trade receivables(Increase) decrease in inventories(Decrease) increase in trade payables
Other, net
SubtotalInterest and dividend received
Interest paid
Income taxes paid
Net cash provided by operating activities

¥

2014

23,262¥25,038¥

193,850

14,841
127
(3)
6
—
—
1,157
—
41
(401)
3
(2)

14,317440(3,042)
67
—
48
1,148
—
(104)
(435)
20
(7)

14,486
2,199(3,055)
499
(36)
—
—
1,317
(259)
(249)
20
(2)

123,675
1,058
(25)
50
—
—
9,642
—
342
(3,342)
25
(17)

50

3

20

417

—
1,516
(2,078)(13,507)
4,487
29,499933(26)(11,910)
18,496—(4,265)
(205)
(184)
(56)
32,783660(24)(5,919)27,500

(51)
(525)
324
1,312
1,337
34,911620(31)(9,411)
26,089—12,633(17,317)(112,558)
37,392245,8257,775(217)(99,250)
154,133

Cash flows from investing activities:
Increase in property and equipment
Increase in long-term investments and loans
Decrease in property and long-term investments
Increase in short-term investments
Net cash used in investing activities(17,808)
(493)
1,048
17,252(1)(14,835)(1,162)
1,722(19,292)(33,567)(12,539)
(288)
1,389
(15,628)(27,066)(148,400)(4,108)
8,733
143,767(8)

Cash flows from financing activities:
Increase in long-term debt
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 disposals
Payments made to trust account for acquisition of treasury stock
Other, net
Net cash (used in) provided by financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

—
(76)
54
(2,188)(60)(17)(5,000)3(7,284)
10
11,22155,557
66,77810,002(120)(8)(2,189)
(37)
(76)
(20)
7,552
17
1,502
54,05555,557—(257)(4)(2,189)
(39)
(9)
(83)
(2,581)18(3,540)57,59554,055—(633)
450(18,233)
(500)
(142)
(41,667)
25(60,700)
83
93,508462,975
556,483

¥

¥

¥

$

See accompanying Notes to Consolidated Financial Statements.
13

SEINO HOLDINGS CO., LTD. and Subsidiaries

Notes to Consolidated Financial Statements
Company was not more than three months. Significant transactions for theperiod between the subsidiary’s year-end and the Company’s year-end were
adjusted for on consolidation.
The consolidated financial statements include the accounts of the overseas
subsidiary prepared under IFRS in accordance with Practical Issues Task
Force (“PITF”) No. 18, “Practical Solution on Unification of Accounting
Policies Applied to Foreign Subsidiaries for Consolidated Financial
Statements” issued by the Accounting Standards Board of Japan (“ASBJ”).

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
with accounting principles generally accepted in Japan (“Japanese
GAAP”), which are different in certain respects as to applicationand disclosure requirements from International Financial ReportingStandards (“IFRS”).
The accompanying consolidated financial statements have been
restructured and translated into English from the consolidated financial
statements of the Company prepared in accordance with Japanese GAAP
and filed with the appropriate Local Finance Bureau of the 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, 2015, which was ¥120
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.

(a-ii) Corporate separation and merger for the year ended
March 31, 2013.

(b)
(c)

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, adjusted based on thefair value at the time of the acquisition, are deferred as goodwill andamortized over five years on a straight-line basis. From April 1, 2010,
negative goodwill resulting from business combinations, measured by
the excess of the underlying equity in the net assets over the acquisition
cost, is credited to income. Negative goodwill resulting from acquisitions
incurred prior to April 1, 2010, however, is amortized over five years on astraight-line basis. All intercompany transactions and accounts have been
eliminated on consolidation.
Under accounting standards for consolidation, a subsidiary is defined
as an enterprise which is controlled by another enterprise and is amajority (more than 50%) owned enterprise or a 40% to 50% owned
enterprise that meets certain criteria. An affiliated company is defined
as an enterprise in which the investor has significant influence andis an enterprise other than a subsidiary that is a 20% or more owned
enterprise or a 15% to less than 20% owned enterprise that meets certain
criteria. For the years ended March 31, 2015, 2014 and 2013, there
was one company that was not a more than 50% owned enterprise but
was nevertheless classified as a subsidiary based on the judgment of theCompany in accordance with the accounting standards.
The number of subsidiaries and affiliates for the years ended March
31, 2015, 2014 and 2013 was as follows:
Subsidiaries:
Domestic
Overseas
Affiliates accounted for by the equity method
Affiliates stated at cost

2015

2014

2013

59
2
4
10

58
1
4
10

58
1
4
10

The Company and most of its subsidiaries have a fiscal year that ends on
March 31. The overseas subsidiary closes its books on December 31. The
Company has consolidated the overseas subsidiary’s financial statements as ofits year-end because the difference between its fiscal year-end and that of the
14

(d)
(e)

(f)

Effective on April 1, 2012, Kyushu Seibu Transportation Co., Ltd.
(“Kyushu Seibu”), a subsidiary, underwent a corporate separation in which
its transportation business in the Kyushu region was transferred to Kyushu
Seino Transportation Co., Ltd. At the same time, Kyushu Seibu wasmerged into Seibu Transportation Co., Ltd., another subsidiary. Thesesubsidiaries had been engaged in the transportation service business, andthe Company was aiming to increase service efficiencies for transportation
services and to integrate the operations of these subsidiaries in the
Kyushu region of Japan. The transactions were accounted for as business
transactions under common control in accordance with ASBJ Statement
No. 21 and ASBJ Guidance No. 10.

Cash and cash equivalents

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

Investments and marketable securities

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

Accounting for derivatives

As of March 31, 2015 and 2014, 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 arestated principally at the lower of moving average cost or net realizablevalue, and inventories for vehicles and work-in-process are statedprincipally at the lower of specific identification cost or net realizable value.

(g) Property and equipment and depreciation

Property and equipment, including significant renewals and additions,
are stated at cost. Property and equipment of the Company and certain
subsidiaries are depreciated by the straight-line method for 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 property held for lease. Buildings acquired
on and after April 1, 1998 by the domestic subsidiaries are depreciatedby the straight-line method. Some of the subsidiaries capitalize property
for which the cost was not less than ¥100,000 but below ¥200,000 anddepreciate it over three years on a straight-line basis.
The Seino Group, as lessee, capitalize assets used under finance leases,
except for certain immaterial or short-term finance leases accounted for
as operating leases. Depreciation of leased assets capitalized in financelease transactions as lessee is computed by the straight-line method
over the lease term as the useful life with the assumption of no residual
value. The leased property of a certain subsidiary engaged in leasing
operations as lessor is recorded at cost in property and equipment in
the accompanying consolidated balance sheets under operating leaseaccounting and is depreciated over the term of the lease contracts by thestraight-line method to the amount equal to the estimated disposal value
at the lease termination date.
Expenditures on maintenance and repairs are charged to operating
income as incurred. Upon the disposal of the property, the cost andaccumulated depreciation are removed from the accounts and any gain orloss is recorded as income or expense.
(Changes in accounting policies with amendment of respective law
or regulation that are not distinguishable from changes in accounting
estimates)
From the year ended March 31, 2013, in accordance with theamendment in Corporate Tax Law, the Company and its domestic
subsidiaries have changed its depreciation method for property andequipment. Assets acquired on or after April 1, 2012 are depreciatedusing the method prescribed in the amended Corporate Tax Law. The
effects of this change on profit or loss for the year ended March 31, 2013
were not material.

(h) Intangible assets(i)Intangible assets are amortized on a straight-line basis. Software,
which is included in intangible assets, is amortized using the straightline 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
amount to be measured as the higher of the asset’s net selling priceor value in use. Fixed assets include intangible assets as well as land,buildings and other forms of property and are to be grouped at the lowest
level for which there are identifiable cash flows distinguishable fromother groups of assets. For the purpose of recognition and measurementof impairment loss, fixed assets are grouped into cash-generating units
such as operating business branches other than idle or unused property.
From the year ended March 31, 2015, the Seino Group has changed themethod used to group assets to measure impairment of fixed assets in thetransportation services segment from a method that grouped assets byeach operating business branch to a method that groups assets by entire
segment. At March 31, 2015, 2014 and 2013, recoverable amounts ofassets were measured based on value in use using discounted future cash
flows at interest rates principally of 7.8%, 1.7% and 1.9%, respectively,or net selling prices using primarily appraisal valuations. As a result, theSeino Group recognized impairment loss as follows:
Millions of yen

Property subject toimpairment:
Impairment loss recorded:

2015

2014

2013

2 businessbranchesand 8 idle
properties

20 businessbranchesand 4 idle
properties

42 businessbranchesand 5 idle
properties

for land¥for buildings and structures
for other property
¥

69 ¥
58
—
127 ¥

396 ¥
44
—
440 ¥

Thousandsof U.S.
dollars2015

2,174 $
20
5
2,199 $

575
483
—
1,058

Accumulated impairment losses have been directly deducted from theapplicable assets.

(j)

Employee retirement benefits

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

(Changes in accounting policies)

Effective from the year ended March 31, 2015, the Company and its
consolidated domestic subsidiaries adopted Article 35 of the “AccountingStandard for Retirement Benefits” (ASBJ Statement No. 26, May 17,
2012 (hereinafter, “Statement No. 26”)) and Article 67 of the “Guidanceon Accounting Standard for Retirement Benefits” (ASBJ Guidance No.
25, March 26, 2015 (hereinafter, “Guidance No. 25”)) from the current
fiscal year and have changed the method used to determine retirement
benefit obligation and current service cost. In addition, the Company andits consolidated domestic subsidiaries have changed the method used
to determine the discount rate from a method based on the expected
average remaining years of service of the eligible employees to a method
using a single weighted average discount rate reflecting the estimatedtiming and amount of benefit payment. The effects of this change in theretained earnings at the beginning of the current fiscal year and profit orloss for the current fiscal year were not material.
Effective from the year ended March 31, 2014, the Company andits domestic subsidiaries have applied the Accounting Standard for
Retirement Benefits (ASBJ Statement No. 26, revised on May 17,
2012 (hereinafter, “Statement No. 26”)) and Guidance on AccountingStandard for Retirement Benefits (ASBJ Guidance No. 25, revised on
May 17, 2012 (hereinafter, “Guidance No. 25”)), except Article 35 ofStatement No. 26 and Article 67 of Guidance No. 25, and accordingly,
actuarial differences and past service cost that had yet to be recognizedin profit or loss have been recognized as retirement benefit adjustmentof accumulated other comprehensive income within net assets, after
adjusting for tax effects, and the difference between retirement benefit
obligation and plan assets has been recognized as employee retirement
benefit asset or liability in the balance sheet. In accordance with
Article 37 of Statement No. 26, this accounting change has not been
retrospectively applied to the financial statements of prior years, andthe effect of the change in accounting policies arising from the initial
application has been recognized in retirement benefit adjustment inaccumulated other comprehensive income.
As a result of the application, at March 31, 2014, the Seino Group
recognized employee retirement benefit asset in the amount of ¥1,569
million and employee retirement benefit liability in the amount of¥60,707 million. Also, accumulated other comprehensive income was¥1,068 million less and minority interests ¥188 million more at March
31, 2014 than the amounts that would have been reported without thechange.
Until the year ended March 31, 2013, unrecognized actuarial
differences and unrecognized past service cost were not recognized in
the balance sheet, and the difference between the retirement benefit
obligation and plan assets adjusted by such unrecognized amounts
was recorded as “Provision for employee retirement benefits” in theaccompanying consolidated balance sheet.

(k) Severance indemnities for directors and corporate auditors

The Seino Group pays severance indemnities to directors and corporate
auditors subject to the approval of the shareholders. The Company andcertain subsidiaries provide for accrued severance indemnities for directors
and corporate auditors at the amount that would have been payable if
15

(l)

the directors and corporate auditors had retired at the end of the fiscal
year based on internal rules, in accordance with the Japanese Institute ofCertified Public Accountants (“JICPA”) Audit and Assurance Committee
Report No. 42, “Treatment for Auditing of Reserve Under Special
Taxation Measures Law, Reserve Under Special Laws and Reserve for
Retirement Benefits to Directors and Corporate Auditors.”

Revenue recognition for freight charges

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

(m) Income taxes

(n)

(o)

(p)

(q)

(r)

(s)

16

Income taxes are accounted for by the asset-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
in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in the period that includes the promulgation date.

Enterprise taxes

The Seino Group records local corporate enterprise taxes based on the“added value” and “capital” amounts when levied as size-based corporate
taxes for local government enterprise taxes, which are included 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,
are translated into Japanese yen at the exchange rates prevailing at the
fiscal year-end. Transactions in foreign currencies are recorded basedon the prevailing exchange rates on the transaction dates. Resulting
translation gains and losses are included in current earnings.
In respect to the financial statement items of overseas subsidiaries, allasset, liability, income and expense accounts are translated into yen by
applying the exchange rates in effect at the fiscal year-end. Translationdifferences, after allocations of portions attributable to minority interests,
are reported as foreign currency translation adjustments in a componentof net assets on the accompanying consolidated balance sheets.

Per share data

Basic net income per share is computed by dividing income available
to common shareholders by the weighted average number of sharesof common stock outstanding during the respective year, retroactively
adjusted for stock splits. Unless there is an anti-dilutive effect, diluted
net income per share is calculated to reflect the potential dilution
assuming that all convertible bonds are converted at the time of issue.
Diluted net income per share is not disclosed as Seino Group had no
dilutive common shares for the year ended March 31, 2013.
Cash dividends per share shown for each fiscal year in theaccompanying consolidated statements of income represent dividends
declared as applicable to the respective years.

Adoption of consolidated taxation system

Effective from the fiscal year ended March 31, 2013, the Company
and some of its subsidiaries have adopted the consolidated taxation
system, with the Company as the taxable parent company.

Accounting standard issued but not yet adopted

ASBJ statement No. 21, No. 22, No. 7, No. 2 and ASBJ Guidance No.
10, No. 4 have been issued but not yet adopted or early adopted in these
consolidated financial statements.
(1) Summary
The above standards and guidance have been revised primarily to
account for:① How the changes in the holding of shares in subsidiaries overwhich the Company continues to control should be treated by theCompany when additional stock of a subsidiary is acquired.
 ② Treatment of acquisition related costs③P resentation of current net income and the change in shareholders’equity from minority interests to non-controlling interests(t)④P
 rovisional application of accounting treatments(2) Effective date
Effective from the beginning of the fiscal year ending March 31,
2016. Provisional application of the accounting standards is scheduled
to begin for business combinations effective after the beginning of
the fiscal year ending March 31, 2016.
(3) Effect of application of the standards
The Company and its consolidated domestic subsidiaries are
currently in the process of determining the effects of these newstandards on the consolidated financial statements.

Additional Information(Partial change in the method used to group assets for impairment
accounting)In the transportation services segment, the Company has endeavored
to construct the best national transportation network and improvecustomer satisfaction by merging its subsidiaries in Kyushu, and in April 1,
2014, reorganized Seino Transportation Co., Ltd. and other 3 subsidiaries
in Honshu. For a strategic change in making investment decisions inoperating business branches to maintain and expand the future nationaltransportation network, the board of directors meeting held on April
7, 2014 determined that the Company decide strategic investment andprofit and loss management in the entire transportation services segment.
Accordingly, from the year ended March 31, 2015, the Seino Group haschanged the method used to group assets for impairment of fixed assets
in the transportation services segment from a method that grouped assets
by each operating business branch to a method that groups assets by theentire transportation services segment. As a result of this change, income
before income taxes and minority interests increased by ¥333 million($2,775 thousand) for the fiscal year ended March 31, 2015.
The method used to group assets in the segments except
transportation services segment was as before.

3. Financial Instruments
Information on financial instruments for the years ended March 31,
2015 and 2014 is set forth below.
(1) Qualitative information on financial instruments(a) Policies on Financial Instruments
The Seino Group implements its Cash Management System foreffective investments and funding. The Company invests in low-risk andshort-term instruments in accordance with its internal fund management
rules. The Company raises funds mainly through indirect financing suchas bank loans for investments in facilities taking immediate liquidity into
consideration.
(b) Details of Financial Instruments and Risks
Trade receivables are exposed to the credit risk of customers. Some ofthe subsidiaries have receivables in foreign currency and are exposed toforeign currency fluctuation risk.
Marketable and investment securities, which consist of held-tomaturity securities and equity securities of business entities with which
the Seino Group has business relationships, are exposed to stock market
fluctuation risk.
Trade payables have general terms and conditions and are mostly
due within one year. However, some of the subsidiaries have them
denominated in foreign currency, which exposes them to foreign currency
fluctuation risk.
Some bank loans and convertible bonds are used principally for capital
investments and are partially 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, eachsubsidiary monitors the creditworthiness of its customers and manages
the terms and conditions of payment, due dates and remainingbalances to reduce such risk. Regarding held-to-maturity securities,
the Company invests in high credit-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 regularly monitors market risk basedon management methods which comply with internal market risk
management rules. For marketable securities, the Seino Group
monitors market prices every quarter and reviews the market conditions
and the financial position of and business relationship with the issuers.
(3) Monitoring liquidity risk
The Company has a Cash Management System with its subsidiaries
and becomes the paying agent for the subsidiaries under the system.

The subsidiaries report their cash flow projections to the Company.
The Company has sufficient bank credit lines, including 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,since certain assumptions are used in the computation of the reasonableestimates, the result may be different if alternative assumptions are used.
(2) Fair values of financial instruments
The fair and carrying values of the financial instruments included in the
consolidated balance sheets at March 31, 2015 and 2014, other thanthose for which the fair value was extremely difficult to determine, are set
forth in the table below.
Carrying value

At March 31, 2015:
Cash and cash equivalents ¥Short-term investments
Trade receivables
Investment securities¥
Total assets
Short-term borrowings ¥Trade payables
Convertible bonds
Long-term bank loans,including current portion¥
Total liabilities

Short-term borrowings ¥Trade payables
Convertible bonds
Long-term bank loans,including current portion¥
Total liabilities

Difference

66,778 ¥25,220105,257
28,290225,545 ¥

66,778 ¥25,220105,257
28,290225,545 ¥

—
—
—
—
—

2,519 ¥
44,082
10,0352,519 ¥
44,082
11,070

—
—
1,035

87
56,723 ¥87
57,758 ¥—1,035

Carrying value

At March 31, 2014:
Cash and cash equivalents ¥Short-term investments
Trade receivables
Investment securities¥
Total assets

Fair value
Millions of yen

Fair value
Millions of yen

Difference

55,557 ¥42,172
106,846
23,189227,764 ¥55,557 ¥42,172
106,846
23,189227,764 ¥

—
—
—
—
—

2,465 ¥
57,58810,0452,465 ¥
57,588
10,545

—
—
500

163
70,261 ¥163
70,761 ¥—500

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

At March 31, 2015:
Cash and cash equivalents $ 556,483 $ 556,483 $Short-term investments
210,167
210,167
Trade receivables
877,142
877,142
Investment securities
235,750
235,750$ 1,879,542 $ 1,879,542 $Total assets
Short-term borrowings$
Trade payables
Convertible bonds
Long-term bank loans,including current portion$
Total liabilities

—
—
—
—
—

20,992 $367,350
83,62520,992 $367,350
92,250

—
—
8,625

725
472,692 $725
481,317 $—8,625

Notes:i) Methods of measuring the fair value of financial instruments are as
follows:
Assets:(1) Cash and cash equivalents
As these instruments are settled within a short term and theirfair value and carrying value are nearly identical, their carrying
values 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 valueof future cash flows through maturity discounting using an
estimated credit risk adjusted interest rate. The carrying amountsof trade receivables other than installment sales receivables

approximate fair value because of the short maturity of these
instruments.
(3) Short-term investments and investment securities
The fair value of marketable securities equals the quoted market
price, if available. The fair value of debt securities equals thequoted market price or the price provided by financial institutions.
Marketable and investment securities classified according to the
purpose for which they are held are described in Note 5.
Liabilities:(1) Trade payables
As these instruments are settled within a short term and theirfair values and carrying values are nearly identical, their carrying
values are assumed as their fair values.
(2) Short-term borrowings
As these instruments are settled within a short term and theirfair values and carrying values are nearly identical, their carrying
values are assumed as their fair values.
(3) Convertible bonds
The fair value of convertible bonds is based on the price quoted
by the correspondent financial institution.
(4) Long-term bank loans
The fair value of long-term debt is based on the present value of
future cash flows discounted using the current borrowing rate forsimilar debt of comparable maturity.
ii) The following were not included in the table above because the fairvalue was extremely difficult to determine:
Millions of yen

Thousands of
U.S. dollars¥$ 12,875
4,167$ 17,042

2015
Carrying value:
Unlisted equity securities,
other than those of affiliates ¥ 1,545
500
Preferred equity securities¥ 2,045

2014

¥

1,542
500
2,042

2015

iii) The redemption schedule for financial assets with maturities at
March 31, 2015 was as follows:

Due in 1 year

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

Due
after
10 years

At March 31, 2015:
Cash and cash equivalents ¥ 66,778 ¥— ¥— ¥Short-term investments
300——
Trade receivables
79,85524,324
1,078
Investment securities –24,918——bonds and other¥ 171,851 ¥ 24,324 ¥ 1,078 ¥Due after Due after
1 years
5 years
throughthrough
Due in 1 year
5 years
10 yearsThousands of U.S. dollars

—
—
—
—
—

Due
after
10 years

At March 31, 2015:
Cash and cash equivalents $ 556,483 $— $— $Short-term investments
2,500
—
—
Trade receivables
665,458
202,700
8,984
Investment securities –207,650——
bonds and other$ 1,432,091 $ 202,700 $ 8,984 $

—
—
—
—
—

iv) For the repayment schedule for convertible bonds and long-termbank loans at March 31, 2015, see Note 9, “Short-term Borrowingsand Long-term Debt.”

4. Inventories
Inventories at March 31, 2015 and 2014 were as follows.
Millions of yen

Merchandise and finished products ¥Work in process
Raw materials and supplies
¥

2015
8,333
937
695
9,965

2014
6,429
1,068
784
¥ 8,281¥

Thousands of
U.S. dollars

2015$ 69,442
7,808
5,792
$ 83,04217

5. Investments
At March 31, 2015 and 2014, short-term investments consisted of thefollowing:Thousands of
U.S. dollars

Millions of yen

2015
Marketable securities:¥ 12,301
Bonds and otherTotal marketable securities
12,301Time deposits with an original
maturity of more than three months 12,919¥ 25,220

2014

2015

¥ 28,000
28,000$ 102,508
102,508

14,172¥ 42,172

107,659$ 210,167

At March 31, 2015 and 2014, investment securities consisted of thefollowing:Thousands of
U.S. dollars

Millions of yen

2015
Marketable securities:
Equity securities¥ 28,171
Bonds
—
119
Other
Total marketable securities
28,2902,045
Other non-marketable securities¥ 30,335

2014

2015

¥ 22,793
302
94
23,1892,042¥ 25,231$ 234,758—
992
235,750
17,042$ 252,792

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, 2015 and 2014, gross unrealized gains and losses formarketable securities classified as available-for-sale were as follows:
Gross
Gross
unrealized unrealized
gains
lossesMillions of yen

Cost

At March 31, 2015:
Equity securities
Bonds
Other
At March 31, 2014:
Equity securities
Bonds
Other
At March 31, 2015:
Equity securities
Bonds
Other

Fair andcarrying
value¥

9,861 ¥ 18,311 ¥
300
1
12,05466¥ 22,215 ¥ 18,378 ¥(2) ¥ 28,170
—
301
(1)
12,119(3) ¥ 40,590¥

9,621 ¥ 13,224 ¥300
228,05441¥ 37,975 ¥ 13,267 ¥(52) ¥ 22,793
—
302
(1)
28,094(53) ¥ 51,189$ 82,175 $ 152,592 $
2,500
8100,450550$ 185,125 $ 153,150 $(17) $ 234,750—
2,508(8) 100,992(25) $ 338,250

Thousands of U.S. dollars

At March 31, 2015 and 2014 investments in and long-term loans toaffiliates consisted of the following:
Millions of yen

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

2015

3,419

2014

¥

3,297

Thousands of
U.S. dollars

2015$ 28,492

6. Property and Equipment
At March 31, 2015 and 2014, property and equipment consisted of
the following:
Millions of yen

2015

18

2014

Thousands of
U.S. dollars

One of the consolidated subsidiaries elected to carry out a onetime revaluation to restate the cost of land used for business operations
at values reassessed on March 31, 2002, reflecting adjustments forland shape and other factors based on appraisal values issued by theJapanese National Tax Agency in accordance with the Law Concerning
Revaluation of Land. According to the law, the excess of the original
book value over reassessed value, net of the tax effect and minority
interests portions, is recorded in net assets as land revaluation decrement
account in the accompanying consolidated balance sheets. At March 31,
2015 and 2014, the difference between the carrying values of land used
for business operations after revaluation over the current market valuesof the land at the fiscal year-end amounted to ¥1,771 million ($14,758
thousand) and ¥1,756 million, respectively.

7. Real Estate for Rent
Some of the Company’s subsidiaries own land and facilities for rent
at locations where the business branches were closed or redeployed
branches used to be. The carrying values in the consolidated balance
sheets, changes during the years ended March 31, 2015 and 2014 andthe fair values of the rental properties were as follows:
Millions of yen

2015
2014
Carrying value at the beginning of year ¥ 13,654 ¥ 13,643(266)
11
Net changes during the year
Carrying value at the end of year ¥ 13,388 ¥ 13,654
Fair value at the end of year *¥ 17,857 ¥ 18,084

2015$ 113,783(2,216)$ 111,567$148,808

Note: * Fair value was measured at the reasonable estimated value based
principally on a real estate appraisal or property tax bases.
Profit and loss recorded for rental properties for the fiscal years ended
March 31, 2015 and 2014 were as follows:
Millions of yen

Operating revenue¥
Operating costs
Income from rental operations(Loss) on disposal of rental
property and other
¥

2015
1,401
226
1,175

¥

(53) ¥

2014
1,421
218
1,203

Thousands of
U.S. dollars

2015$ 11,675
1,883
9,792

(156) $

(442)

8. Asset Retirement Obligations
Asset retirement obligations are based upon estimated future
restoration obligations pursuant to office rental agreements. The asset
retirement obligations are calculated based upon the useful life designatedby law or the estimated office rental period and are discounted by theyield rate of government bonds.
Asset retirement obligations for the years ended March 31, 2015 and2014 were as follows:
Millions of yen

At the beginning of year
New obligations
Changes in estimatedobligations and accretion
Settlement payments
Other
At the end of year

¥

¥

2015
2,537
20

¥

44
(53)
—
2,548 ¥

2014
2,478
38

Thousands of
U.S. dollars

2015$ 21,142
167

45
367
(24)
(443)
—
—
2,537 $ 21,233

9. Short-term Borrowings and Long-term Debt
At March 31, 2015 and 2014, short-term borrowings consistedof the following:

2015

Property and equipment, at cost:Land¥ 169,156 ¥ 169,567 $ 1,409,633
Buildings and structures
239,071
234,410
1,992,258
Vehicles
100,770
99,387
839,750
Machinery and equipment
34,60433,239288,367
Construction in progress
5,812
2,642
48,434
278
281
2,316
Other
549,691
539,526
4,580,758
Less accumulated depreciation (274,657) (268,638) (2,288,808)
Total property and equipment ¥ 275,034 ¥ 270,888 $ 2,291,950

Thousands of
U.S. dollars

Millions of yen

Unsecured bank overdrafts withinterest rates ranging from 1.3%
to 8.35% per annum at March¥
31, 2015.
Short-term bank loans, unsecured
with interest rates ranging
from 0.230% to 1.475% perannum at March 31, 2015
¥

2015

2014

79

¥

25

2,440
2,519

¥

2,440
2,465

Thousands of
U.S. dollars

2015

$

658

20,334$ 20,992

At March 31, 2015, the Company and certain subsidiaries
had unsecured overdraft agreements with 13 banks. Under
such agreements, the Company and these subsidiaries wereentitled to withdraw up to ¥43,910 million ($365,917 thousand).
The Company and the subsidiaries were not obligated to pay
commitment fees on the unused portions of such overdraft facilities.
At March 31, 2015 and 2014, long-term debt consisted of thefollowing:
Millions of yen

Thousands of
U.S. dollars

2015
2014
2015
Zero coupon convertible bonds
due October 2018, including
unamortized premium ( ¥35
million ($292 thousand) at¥ 10,035 ¥ 10,045 $ 83,625
March 31, 2015)
Loans from government agencies
and banks, repayable due
through 2017, with interest
rates ranging from 0.95% to3.1% per annum at March 31,
2015:
Secured34
105
283
Unsecured
53
58
442
3
6
25
Capitalized lease obligations
10,125
10,21484,375
(34)
(81)
(283)
Less current portion¥ 10,091 ¥ 10,133 $ 84,092
At March 31, 2015, the current conversion price of zero coupon
convertible bonds due in 2018 were ¥1,503 ($13) per share andwere subject to adjustment in certain circumstances, including in
the event of a stock split. At March 31, 2015, the number of sharesof common stock necessary for conversion of all convertible bonds
outstanding was approximately 7 million.
At March 31, 2015 and 2014, respectively the following assets
were pledged as collateral for certain long-term debt:
Millions of yen

Thousands of
U.S. dollars

2,959
920

$

2015
Land
Buildings and structures

¥

2014

¥

3,238
1,210

2015

24,658
7,667

The aggregate annual maturities of long-term debt as of March 31,
2015 were as follows:Year ending March 31,
2016
2017
2018
2019
2020
ThereafterThousands ofMillions of yen
U.S. dollars
¥
34
$
283
9
75
7
58
10,002
83,350
2
17
36
300
¥
10,090$84,083

10. Employee Retirement Benefits
The Company and its domestic subsidiaries had mainly unfunded
defined benefit plans, with rules and regulations determinedby each subsidiary. In addition, some domestic subsidiaries had
Smaller Enterprise Retirement Allowance Mutual Aid or Specific
Retirement Allowance Mutual Aid.
Other subsidiaries had funded defined benefit plans. One
company belonged to a comprehensive employees’ pension fund
for the defined benefit corporate pension plan. One company had
established a retirement benefit payment trust.
The retirement benefit obligation of certain subsidiaries wascalculated using the simplified calculation method as permitted by
the accounting standard for employee retirement benefits.
As of and for the year ended March 31, 2015 and 2014, defined
benefit plans, including plans applying the simplified method wereas follows:i) Movement in retirement benefit obligations:

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

Millions of yen

Thousands of
U.S. dollars

Millions of yen

Thousands of
U.S. dollars

2015
2014
2015
¥ 65,254 ¥ 64,878 $ 543,784
3,631
3,596
30,258
583
581
4,858
4,015
42
33,458(3,407)(3,867)(28,392)
278
24
2,317
¥ 70,354 ¥ 65,254 $ 586,283ii) Movements in plan assets:

At the beginning of year
Actuarial differences
Contributions paid by theemployer
Benefits paid
At the end of year

¥

2015
6,116
4,166

¥

6
(1)
¥ 10,287 ¥

2014
2,792
3,383

2015
$ 50,967
34,716

5
50
(64)
(8)
6,116 $ 85,725

iii) Reconciliation from retirement benefit obligation and plan assets toemployee retirement benefit asset or liability:
Millions of yen

Thousands of
U.S. dollars

2015
2014
2015
Funded retirement benefit obligation ¥ 6,113 ¥ 4,750 $ 50,942(10,287)(6,116)(85,725)
Plan assets(4,174)(1,366)(34,783)
Unfunded retirement benefit
64,24160,504535,341
obligation
Net employee retirement¥ 60,067 ¥ 59,138 $ 500,558
benefit liability
Employee retirement benefit
64,45360,707537,108
liability(4,386)(1,569)(36,550)
Employee retirement benefit asset
Net employee retirement¥ 60,067 ¥ 59,138 $ 500,558
benefit liabilityiv) Net periodic retirement benefit expenses, including plans applying thesimplified method:
Millions of yen

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

2015
3,631
583
248
113
4,575

¥

¥

Thousands of
U.S. dollars

2014
3,596
581
553
226

2015
$ 30,258
4,858
2,067
942

4,956

$ 38,125v) Retirement benefit adjustment included in other comprehensive
income, before tax effects:
Millions of yen

Past service cost
Actual differences
Total balance

2015
2014
165 ¥
—
(392)
—
¥
(227) ¥—¥

Thousands of
U.S. dollars

2015
1,375
(3,267)$ (1,892)$vi) Retirement benefit adjustment in accumulated other comprehensive
income, before tax effects:
Millions of yen

Past service cost that yet to berecognized
Actuarial differences yet to berecognized
Total balance

2015
¥
¥

2014

(67) ¥
1,239
1,172

¥

Thousands of
U.S. dollars

2015(232) $
1,631
1,399

$

(558)
10,325
9,767
19vii) Plan assets
1. Plan assets comprise:
2015
1%
—
99%
100%

Cash and cash equivalents
Bonds
Equity securities
Total*

Percent

2014
—
1%
99%
100%

**99% of total plan assets consisted of a retirement benefit payment
trust.
2. Long-term expected rate of return
Current and target asset allocations, historical and expected
returns on various categories of plan assets have been considered
in determining the long-term expected rate of return.
viii) Actuarial assumptions
The principal actuarial assumptions (expressed as weighted averages):2015
mainly 1.0%
0.0%

Discount rateLong-term expected rate of return2014
mainly 1.0%
0.0%

11. Contingent Liabilities
At March 31, 2015 and 2014, the Seino Group was contingently
liable for trade notes endorsed to affiliates and third parties andfor guarantees, including substantial guarantees, principally ofindebtedness of third parties in the aggregate amount of ¥1,604
million ($13,367 thousand) and ¥1,660 million, respectively.

12. Lease Commitments
As lessee, the Seino Group has entered into various rental and leaseagreements for land and buildings to be used for truck terminals andwarehouses which are generally cancelable with a few months advancenotice, except for certain operating lease agreements. The aggregate
minimum future lease payments for such non-cancelable operating leaseagreements, including the imputed interest portion, as lessee at March
31, 2015 and 2014 were as follows:

Operating leases:
Due within one year
Due after one year

Millions of yen

Thousands of
U.S. dollars

323
982
1,305

$

2015
¥
¥

2014

¥
¥

460
1,209
1,669

2015

2,692
8,183
$ 10,875

A certain subsidiary engaged in leasing operations as lessor enters
into various lease agreements with third parties principally for vehicles.
The leases are categorized as operating leases. At March 31, 2015 and2014, the aggregate future minimum lease commitments to be received
for such non-cancelable lease agreements, including the imputed interest,
were as follows:

Operating leases:
Due within one year
Due after one year

Millions of yen

Thousands of
U.S. dollars

263
427
690

$

2015
¥
¥

2014

¥
¥

287
566
853

2015

$

2,192
3,558
5,750

13. Net Assets(a)20

Under the Japanese Corporate Law (the “Law”) and regulations, theentire amount paid for new shares is required to be designated as common
stock. However, a company may, by a resolution of the Board of Directors,
designate an amount not exceeding one half of the price of the new sharesas additional paid-in capital, which is included in capital surplus.
Under the Law, in cases in which a dividend distribution of surplus ismade, the smaller of an amount equal to 10% of the dividend or the excess,if any, of 25% of common stock over the total of additional paid-in capitaland legal earnings reserve must be set aside as additional paid-in capitalor legal earnings reserve. Legal earnings reserve is included in retained(b)earnings in the accompanying consolidated balance sheets.
Under the Law, legal earnings reserve and additional paid-in capital
could be used to eliminate or reduce a deficit by a resolution of theshareholders' meeting. Additional paid-in capital and legal earnings
reserve may not be distributed as dividends. All additional paid-in capitaland all legal earnings reserve may be transferred to other capital surplus andretained earnings, respectively, which are potentially available for dividends.
At March 31, 2015 and 2014, capital surplus consisted principally of
additional paid-in capital. In addition, retained earnings included legal
earnings reserve of the Company in the amount of ¥4,262 million ($35,517
thousand) at March 31, 2015 and 2014.
The maximum amount that the Company can distribute as dividends
is calculated based on the non-consolidated financial statements of theCompany in accordance with Japanese laws and regulations.
At the annual shareholders’ meeting held on June 25, 2015, theshareholders approved cash dividends of ¥21 per share, amounting to¥4,177 million ($34,808 thousand). The appropriation has not been
accrued in the consolidated financial statements as of March 31, 2015as such appropriations are recognized in the period in which they areapproved by the shareholders.

14. Income Taxes
The tax effects of temporary differences that give rise to a significant
portion of deferred tax assets and liabilities at March 31, 2015 and 2014
were as follows:
Millions of yen

Thousands of
U.S. dollars

2015
2014
2015
Deferred tax assets:
Employee retirement benefit liability ¥ 22,898 ¥ 22,111 $ 190,817
Enterprise tax accruals
459
524
3,825
Accrued bonuses
3,593
3,587
29,942
Intercompany capital gains
1,114
1,044
9,283
Operating loss carryforwards
356
383
2,967
Loss on assets transferred
1,561
1,433
13,008
Impairment loss on fixed assets
14,282
14,774
119,017
Allowance for doubtful accounts
115
136
958
4,053
4,318
33,775
Other
48,431
48,310403,592(17,672)(18,282)(147,267)
Less valuation allowance
30,75930,028256,325
Deferred tax liabilities:
Deferred capital gains
5,445
5,774
45,375
Unrealized gains on available5,372
4,241
44,767for-sale securities
Valuation adjustments for
11,536
12,137
96,133
consolidation
Employee retirement benefit asset
1,551
192
12,925
507
306
4,226
Other
24,411
22,650203,426¥ 6,348 ¥ 7,378 $ 52,899
Net deferred tax assets
At March 31, 2015 and 2014, deferred tax assets and liabilities wererecorded as follows:
Deferred tax assets:
Current
Noncurrent
Deferred tax liabilities:
Noncurrent

Millions of yen

Thousands of
U.S. dollars

4,951
5,761

4,863
10,990$ 41,258
48,0088,475

36,367

2015
¥

4,364

2014

¥

2015

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, 2015 and 2014, a valuation allowance was provided to reducedeferred tax assets to the extent that the management believed that theamount of the deferred tax assets was not realizable.
A reconciliation of the differences between the Japanese statutory tax
rate and the effective income tax rate on pretax income reflected in theaccompanying consolidated statements of income for the years ended
March 31, 2015 and 2014 was not disclosed because the difference was
not material. The reconciliation for the year ended March 31, 2013 was
as follows:

16. Subsequent Events

Percentage ofpretax income

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

(i)

2013
37.2%
0.7
(0.4)
3.7

(6.3)
(0.5)
(6.3)
0.6
28.7%

On March 31, 2015, amendments to the Japanese tax regulations wereenacted into law. Based on the amendments, the statutory income tax
rates utilized for the measurement of deferred tax assets and liabilities
expected to be settled or realized from April 1, 2015 to March 31, 2016
and on or after April 1, 2016 have been changed for the fiscal year
ended March 31, 2015 from 34.8% to 32.3% and 31.5%, respectively,
as of March 31, 2015. Due to these changes in statutory income tax
rates, net deferred tax assets (after deducting the deferred tax liabilities)
decreased by ¥97 million ($808 thousand) as of March 31, 2015, deferredincome tax expense recognized for the fiscal year ended March 31, 2015
increased by ¥476 million ($3,967 thousand), evaluation differencesof other securities increased by ¥461 million ($3,842 thousand) andaccumulated adjustments for employee retirement benefits decreased by¥82 million ($683 thousand).
Following the promulgation on March 31, 2014 of the “Act for Partial
Revision of the Income Tax Act, etc.” (Act No. 10 of 2014), a special surtax
to be applied to restoration work in connection with the Great East Japan
Earthquake has been abolished from the fiscal year beginning on or after
April 1, 2014. In line with this revision, the Company has changed thestatutory tax rate used to calculate deferred tax assets and liabilities from
37.2% to 34.8% for temporary differences expected to be reversed in thefiscal year beginning on April 1, 2014. As a result of this tax rate change,deferred tax assets were ¥323 million less at March 31, 2014 and deferredincome taxes ¥323 million more for the year ended March 31, 2014 than
the amounts that would have been reported without the change.

15. Comprehensive Income
Amounts reclassified to net income (loss) in the current periodthat were recognized in other comprehensive income in the current
or previous periods and the tax effects for each component of othercomprehensive income for the years ended March 31, 2015, 2014
and 2013 were as follows:

Thousands of
U.S. dollars

Millions of yen

2015
2014
2013
2015
Net unrealized gains onavailable-for-sale securities:
Increase during the year
¥ 5,162 ¥ 2,649 ¥ 3,742 $ 43,016
(1)
(4)
3
(8)
Reclassification adjustments
Subtotal, before tax
5,161
2,645
3,745
43,008(1,131)(878) (1,078)(9,425)
Tax effectSubtotal, net of tax
4,030
1,767
2,667
33,583Foreign currency translation adjustments:
Increase during the year
Reclassification adjustments
Subtotal, before tax
Tax effectSubtotal, net of tax

61
—
61
—
61

101
—
101
—
101

96
—
96
—
96

508
—
508
—
508

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

(131)
358
227
(145)
82

—
—
—
—
—

—
—
—
—
—

(1,092)
2,984
1,892(1,208)684

Shares of other comprehensive
income of affiliates accounted forusing equity method:
Increase (decrease) during the year
45
4
2
(2)
—
—
Reclassification adjustments
Subtotal
43
42
Total other comprehensive income ¥ 4,216 ¥ 1,872 ¥ 2,765

375
(17)
358
$ 35,133

Stock-for-stock exchange agreements with the subsidiaries
On February 17, 2015, the Company entered into stock-for-stock
exchange agreements with four subsidiaries, “Seino Super Express
Co., Ltd.,” “Seino Sangyo Co., Ltd.,” “Seino Family Co., Ltd.,”“Seino Tsu-un Transportation Co., Ltd.,” “Suito Travel Co., Ltd.”and “Seino Engineering Co., Ltd.” in order to make the Company’s
equity share in such subsidiaries increase to 100%. In accordancewith these agreements, on April 1, 2015 (the stock-for-stock
exchange date), the Company reissued 2,457,806 shares of treasury
stock at various exchange rates representing a certain number ofshares of the Company’s common stock (see below) for one shareof common stock to the respective minority shareholders of each of
the six subsidiaries. The acquisition cost of the acquired companieswas ¥3,190 million ($26,583 thousand).
Details of the stock-for-stock exchange transactions with thesubsidiaries were as follows:
Exchange rate representing thenumber of shares of common
stock of the Company for one
share of common stock of thesubsidiaries

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

(ii)

0.054
2.020
2,662.580
56.97029.94017.350(shares)

The Company applied ASBJ Statement No. 21,“AccountingStandard for Business Combinations,” revised on September 13,
2013, and ASBJ Guidance No. 10, “Guidance on AccountingStandard for Business Combinations and Accounting Standard forBusiness Divestitures,” revised on September 13, 2013, and treatedthem as business transactions under common control.
Acquisition for the shares of Kanto Unyu Co., Ltd.
On May 13, 2015, the Board of Directors determined that theCompany purchase all of the shares of Kanto Unyu Co., Ltd. froma fund managed by Polaris Capital Group Co., Ltd. through a fiftyfifty joint venture for investment by the Company and a limited
partnership for investment managed by Karita and Company, Inc.,
etc., of which Development Bank of Japan Inc. was the single
limited partner, and with regard to which the Company signed a
Share Purchase Agreement on the same date.
(1) General description of business combination① Name of the absorbed business and its description
Name of business: KSK Holdings Co., Ltd.
Business description: Joint Venture for purchasing shares of
Kanto Unyu Co., Ltd.
② Name of the absorbed business and its description
Name of business: Kanto Unyu Co., Ltd. and its five subsidiaries.
Business description: Transportation services(2) Main reason for business combination
To improve our company performance and increase enterprisevalue by acquiring a second general transportation businessconcern. The Company has added a cold chain for which the
expansion rate is high and got a transportation network thatutilizes ordinary, chilling and freezing temperatures, creating
new value and advancing our transportation services.
(3) Date of Business combination
June 30, 2015(4) Legal form of business combination
Share acquisition(5) Acquired voting rights① KSK Holdings Co., Ltd.: 50%② Kanto Unyu Co., Ltd. and its four subsidiaries: 50%

21

17. Segment Information
1.

2.
3.

General information about reportable segments

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

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

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

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

Information about reportable segment for the years ended March 31, 2015, 2014 and 2013 is summarized as follows:

For the year 2015:
Operating revenue:
External customers
Intersegment sales or transfer
Total operating revenue
Segment income (*2)

Transportation
services¥¥

Segment assets (*3)¥
Depreciation
Amortization of goodwill
Investments in affiliates accounted
for using the equity method
Increase in tangible and intangible
fixed assets
For the year 2014:
Operating revenue:
External customers¥
Intersegment sales or transfer
Total operating revenue¥
Segment income (*2)
Segment assets (*3)¥
Depreciation
Amortization of goodwill
Investments in affiliates accounted
for using the equity method
Increase in tangible and intangible
fixed assets
For the year 2013:
Operating revenue:
External customers¥
Intersegment sales or transfer
Total operating revenue¥
Segment income (*2)
Segment assets (*3)¥
Depreciation
Amortization of goodwill
Investments in affiliates accounted
for using the equity method
Increase in tangible and intangible
fixed assets
For the year 2015:
Operating revenue:
External customers
Intersegment sales or transfer
Total operating revenue
Segment income (*2)

Vehicle sales

Merchandise
sales

Real estateleasing services

Other (*4)

398,972 ¥1,494
400,466
14,699 ¥95,351 ¥
7,868
103,219
4,890 ¥

32,699 ¥24,77657,475755 ¥Millions of yen
1,401 ¥
14,029 ¥—13,691
1,401
27,7201,199 ¥
546 ¥

405,415 ¥
13,062
6

104,153 ¥
1,710—

13,840 ¥45—

12,477 ¥
32
—

3,096

—

—

17,244

2,536

393,320 ¥1,548
394,868
12,779 ¥393,469 ¥
12,5696

Total

Adjustments(*1)

Consolidated

542,452 ¥
47,829590,281
22,089 ¥— ¥(47,829)(47,829)(703) ¥

542,452—
542,452
21,38639,916 ¥296—

575,801 ¥15,145
6(27,276) ¥(304)—

548,525
14,841
6

231

—

3,327

(4)

3,323

9

189

595

20,573(479)

20,094

100,569 ¥8,110
108,679
5,352 ¥
100,313 ¥1,680
59

33,306 ¥26,87560,181731 ¥
15,067 ¥51—

1,421 ¥—
1,421
1,222 ¥
12,707 ¥33—

14,791 ¥
9,735
24,526544 ¥
22,510 ¥253
2

543,407 ¥46,268589,675
20,628 ¥544,066 ¥
14,58667— ¥(46,268)(46,268)(439) ¥
(1,655) ¥(269)—

543,407—543,407
20,189542,411
14,317
67

3,036

—

—

168

—

3,204

(3)

3,201

13,448

2,852

30

4

270

16,604(461)

16,143

371,546 ¥
1,536
373,082
6,918 ¥
379,649 ¥
12,639415

96,148 ¥
7,908
104,056
5,442 ¥
97,683 ¥1,732
78

32,457 ¥25,09457,551736 ¥
14,357 ¥65—

1,438 ¥—
1,438
1,215 ¥
12,653 ¥48—

14,596 ¥9,394
23,990495 ¥
19,129 ¥256
6516,185 ¥
43,932560,117
14,806 ¥523,471 ¥
14,740499— ¥(43,932)(43,932)(460) ¥
(13,004) ¥(254)—

516,185—
516,185
14,346510,467
14,486
499

2,783

—

—

107

—

2,890

(2)

2,888

9,877

3,524

25

349

13,789(336)

13,453

Transportation
services

Vehicle sales

14

Merchandise
sales

Real estateleasing services

Other (*4)

Total

Thousands of U.S. dollars$
11,675 $116,908 $ 4,520,433 $—
114,092
398,575
11,675231,000
4,919,008$
9,992 $
4,550 $
184,075 $Adjustments(*1)

Consolidated$ 3,324,767 $12,4503,337,217$
122,492 $794,591 $
65,567860,158
40,750 $272,492
206,466
478,958
6,291

Segment assets (*3)
$ 3,378,458 $Depreciation
108,850
Amortization of goodwill
50
Investments in affiliates accounted
for using the equity method
25,800
Increase in tangible and intangible
143,700
fixed assets

867,942 $
14,250—115,333 $375—

103,975 $
267
—

—

—

1,925

—

27,725(33)

27,692

21,133

75

1,575

4,959

171,442(3,992)

167,450

332,634 $ 4,798,342 $
2,466
126,208—50— $ 4,520,433(398,575)—(398,575)
4,520,433(5,859) $178,216(227,300) $ 4,571,042(2,533)
123,675—50

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

(Related information)
1. Information about products and services
The Company has not disclosed information about products and services because the Company has disclosed the same information above.
2. Information about geographic areas(1) Operating revenue
The Company has omitted the disclosure of operating revenue by geographic area because operating revenue to external customers in Japan accounts
for more than 90% of the amount of operating revenue reported in the consolidated statements of income.
(2) Property and equipment
The Company has omitted the disclosure of property and equipment by geographic area because property and equipment in Japan account for morethan 90% of the amount of property and equipment reported in the consolidated balance sheets.
3. Information about major customers
The Company has not disclosed information about major customers because no customer had contributed 10% or more to operating revenue in the
consolidated statements of income.
4. Information on impairment loss by reportable segments:
Impairment loss:
For the year 2015
For the year 2014
For the year 2013
Impairment loss:
For the year 2015
5.

Transportation
services

Merchandise
sales

Real estateleasing services

¥

39 ¥
154
1,422

61 ¥
69
84

Millions of yen
— ¥
27 ¥
—
217
—
691

$

325 $

508 $

Thousands of U.S. dollars
— $
225 $

Other

Total

— ¥
—
2

127
440
2,199

— $

1,058

Information on goodwill and negative goodwill incurred due to business combinations before April 1, 2010 by reportable segments:
Transportation
services

Vehicle sales

Merchandisesales

For the year 2015:
Amortization of goodwill¥
Amortization of negative goodwill

6 ¥
3

— ¥
—

As of March 31, 2015:
Balance of goodwill
Balance of negative goodwill

5
—

—
—

6 ¥
2,972

Real estateleasing services

Millions of yen
— ¥
—

Other

Total

— ¥
—

— ¥
—

6
3

—
—

—
—

—
—

5
—

59 ¥
—

— ¥
9

— ¥
—

2 ¥
61

11
3

—
—

—
—

—
—

—
—

11
3

For the year 2013:
Amortization of goodwill¥
Amortization of negative goodwill

415 ¥
2,972

78 ¥
—

— ¥
19

— ¥
—

6 ¥
64

499
3,055

As of March 31, 2013:
Balance of goodwill
Balance of negative goodwill

17
2,975

59
—

—
9

—
—

2
61

78
3,045

Transportation
services

Vehicle sales

Merchandise
sales

Real estateleasing services

For the year 2014:
Amortization of goodwill¥
Amortization of negative goodwill
As of March 31, 2014:
Balance of goodwill
Balance of negative goodwill

6.

Vehicle sales

For the year 2015:
Amortization of goodwill$
Amortization of negative goodwill

50 $
25

Thousands of U.S. dollars
— $
— $
— $
—
—
—

As of March 31, 2015:
Balance of goodwill
Balance of negative goodwill

42
—

—
—

—
—

—
—

Vehicle sales

Merchandise
sales

Real estateleasing services

Information on gain on negative goodwill by reportable segments:
Gain on negative goodwill:
For the year 2015
For the year 2014
For the year 2013
Gain on negative goodwill:
For the year 2015

Transportation
services

¥

— ¥
—
20

Transportation
services

$

— $

— ¥
—
16
Vehicle sales

Millions of yen— ¥——Merchandise
sales

Other

Real estateleasing services

Thousands of U.S. dollars
— $
— $
— $

Total

— $
—

50
25

—
—

42
—

Other

— ¥
—
—

67
3,042

Total

— ¥
—
—
Other

—
—
36
Total

— $

—

23

Report of Independent Auditors
Independent Auditors’ Report
To the Board of Directors of
SEINO HOLDINGS CO., LTD.:
We have audited the accompanying consolidated financial statements of SEINO HOLDINGS CO., LTD. (the “Company”) and its
subsidiaries, which comprise the consolidated balance sheets as at March 31, 2015 and 2014, and the consolidated statements of income,statements of comprehensive income, statements of changes in net assets and statements of cash flows for each of the years in the three-year
period ended March 31, 2015, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting
principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits inaccordance with auditing standards generally accepted in Japan. Those standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amount and disclosures in the consolidated financial statements.
The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation andfair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, while
the objective of the financial statement audit is not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basic for our audit opinion.
OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company and its
subsidiaries as at March 31, 2015 and 2014, and their financial performance and cash flows for each of the years in the three-year period ended
March 31, 2015, in conformity with accounting principles generally accepted in Japan.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2015 are presented
solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has
been made on the basis described in Note 1 of the Notes to Consolidated Financial Statements.

August 21, 2015
Nagoya, Japa

24

Seino GroupThe Seino Group consists of Seino Holdings Co., Ltd. and 61 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
Tohoku Seino Transportation Co., Ltd. *1
Miyagi Seino Transportation Co., Ltd.
*1
Kanto Seino Transportation Co., Ltd.
*1
Seino Super Express Co., Ltd.
*1
Kanagawa Seino Transportation Co., Ltd. *1
Izu Seino Transportation Co., Ltd.
*1
Nohi Seino Transportation Co., Ltd.
*1
Tokai Seino Transportation Co., Ltd.
*1
Mie Seino Transportation Co., Ltd.
*1
Hinomaru Seino Transportation Co., Ltd. *1
Shikoku Seino Transportation Co., Ltd. *1
Kyushu Seino Transportation Co., Ltd. *1
Okinawa Seino Transportation Co., Ltd. *1
Seino Tsu-un Transportation Co., Ltd.
*1
Seino Express Co., Ltd.
*1
Seino Hikkoshi Co., Ltd.
*1
Seino Hokkaido Express Co., Ltd.
*1
Seino Tokyo Express Co., Ltd.
*1
Seino Kanagawa Express Co., Ltd.
*1
Seino Hokuriku Express Co., Ltd.
*1
Seino Nagoya Express Co., Ltd.
*1
Seino Osaka Express Co., Ltd.
*1
Seino ST Service Co., Ltd.
*1
S&N Logistics Co., Ltd.
*1
Toyo Co., Ltd.
*1
Katsunuma Transportation Co., Ltd.
*1
Darumaya Transportation Co., Ltd.
*1
Central Logistics Co., Ltd.
*1
Eco Alliance Co., Ltd.
*1
COCONET CO., LTD.
*1
ASAHI CONPOU 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.
Kumamoto Seino Transportation 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 *1
Co., Ltd.
Seino Auto Lease Co., Ltd. *1*1
Tokyo Sharyou Co., Ltd.
Toyota Gifu Parts Dsitributor
Co., Ltd.
Subic GS Auto, Inc.

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

Seino Transportation Co., Ltd.
*2
Arts Co., Ltd.

Marchandise
sales

Information Services

VehicleSales

Seino Information
Service Co., Ltd.

*1

Japan Logistics
Development Co.,
Ltd.

*1

OthersInternational
Transportation
Seino Logix Co., Ltd.

Leasing forReal Estate Services*1

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

*1

SP Express*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) *1
Toyota Rent-A-Lease Gifu Co., Ltd. (Rental and lease)
Gifu Automotive Dealer Plaza Co., Ltd. (Rental office)

OtherTransportation
Services

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

61
4
10

25