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,hasaregrown
into atrucking
leading company,
trucking company,
Prefecture,itwea leading
expanding
expandingin thestepgrowthwith theof the economy
Japanese economy
in step withofgrowth
the Japaneseand theandthe developmentof the nation’s
extensive
expressway
developmentof the nation’s
extensive
expressway
network.
network.
On October 1, 2005, the Company transferred its
On October business
1, 2005, thetransferredtransportation
andCompany
other operations
to aits
newtransportation
businessand other
operations
to Seino
a newcompany—which
has taken
the originalnamecompany—which
took
the original
SeinoSeino
Transportation
Transportation Co.,
Ltd.—andwasnamerenamed
Co.,
Ltd.—and
was arenamed
Seino company
Holdingsstructure.
Co., Ltd. a pureHoldings
Co., Ltd.
pure holding
holding company structure.
The SeinoGroupcurrently
consists of thesubsidiaries
pure holding
company
Seino
Holdings,
58 consolidated
and 14companyengaged
Seino Holdings,
59 consolidated
subsidiaries,
and 13affiliates
in transportation
services,
vehicle sales,affiliates engaged
transportation
services,
vehiclesales,
merchandise
sales,inleasing
for real estateservicesandothermerchandise sales, leasing for real estate services and otherservices.
services.
In its mainstay Transportation Services business, theIn its mainstay
transportation
business,
the Company
Company
has taken
steps to buildservices
even moreconvenient
has takensystems,
steps toall
build
convenientlogistics systems,
logistics
the even
whilemore
adhering
to its “customer-first”
all the while
its2011,“customer
principle.
principle.
As adheringof Marchto31,
Seinofirst”
offersefficientAs of
March 31, 2012,
Seino throughout
offers efficienttransportation
servicestransportation
servicesJapan
via its 634 domestic
throughouta Japan
its 646trucks
domestic
fleet of thatterminals,
fleet ofvia24,321
and terminals,
a truckinganetwork
24,107 trucks,
a trucking
network Seino
that averages
5,000 routes
averages
5,000 androutesdaily. Overseas,
has transferreditsdaily. Overseas,
Seino has operationstransferredto
itsSchenker-Seino
international Co.,
international
forwarding
forwarding
to Schenker-Seino
Co., Ltd.,Ltd.,a jointoperations
venture establishedwith Schenker
AG ainjoint
venture established with Schenker AG in Germany. Throughthis alliance, the Company
Companyaims
aimstotobolster
bolsteritsitscompetitivenessby optimizing thecompetitivenesssynergies of Seino’s
domestic transportation
by optimizing
the synergies
network, and Schenker’s
globalnetworkand cutting-edge
ITof Seino’s
domestictransportation
networksystems. global network andand Schenker’s
The SeinoGroup is committed to
cutting-edge
IT systems.
providing rapid services that deliver totalcustomeranddeliver
will proceed
providing
rapidsatisfaction
services that
total
downsatisfaction
the “Road toto becomecustomerandSuccess”
will proceeddownahighlytoprofitable
the “Road
Success”company
to becomethrougha highly
initiatives
to develop
a progressive
profitablecompany
throughinitiatives tobusinessmodel thatwill become
developa progressive
businessmodel thethatstandardthe
forstandard
next-generation
will becomefortransportation
business. business.
next-generationtransportation

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 OurTo
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 Statements
Statements ofof Comprehensive
Comprehensive Income
Income (Loss)(Loss) 12
Consolidated
12
Consolidated Statements
Consolidated
Statements ofofChanges
ChangesininNet
NetAssets
Assets 12
Consolidated Statements
Consolidated
StatementsofofCash
CashFlows
Flows

13
13

Notes toNotes
to Consolidated
ConsolidatedFinancial
FinancialStatements
Statements

14
14

Report ofReportof Independent
IndependentAuditors
Auditors

24
24

Seino Group
Seino
Group

25
25

Board of Directors(As of June 27, 2012)
Chairman andChief Executive Officer

Yoshikazu Taguchi

President andChief Operating Officer

Yoshitaka Taguchi

Directors

Takao Taguchi
Mitsuo Mekada
Shizutoshi Otsuka
Hidemi Maruta
Shinpei Ando

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, 2012, 2011 and 2010

Thousands of
U.S. Dollars (Note)

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

CONSOLIDATED BASIS:
Cash and cash equivalents, and short-term investments
Property and equipment
Total assets
Long-term debt and other long-term liabilities
Net assets
Net assets per share (in yen and U.S. dollars)(Note)

2012

2011

2010

2012

¥ 504,277 ¥ 497,612 ¥ 485,808
12,326
6,621
13,867
13,136
12,94018,5148,449
9,477
12,542
42.44
47.60
63.02

$ 6,149,720
169,110
225,780
152,951
0.77

Millions of Yen

Thousands of
U.S. Dollars (Note)

2012

2011

2010

2012

¥ 57,595
274,475
500,963
74,094
318,650
1,561.32¥ 55,889
276,545487,701
82,281
307,806
1,508.40¥ 51,302
273,710484,674
86,449301,792
1,478.77$ 702,378
3,347,256
6,109,305
1,097,415
3,885,976
19.04

2010

2011

2012

2011

2012

2011

2012

Net income(Billions of Yen)

20
15
10
5
0

U.S. dollar amounts are translated at ¥82 = U.S. $1, only for the convenience of readers.

2010(Billions of Yen)

Corporate Data

2010

(As of March 31, 2011)

Company Name
Head Office
Date of Establishment
Paid-in Capital
Number of Shares Issued
at the End of the Fiscal Year
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

1

Message from the Management

To Our Shareholders, Customers and Friends
The following is a brief report on the performance of Seino Holdings Co., Ltd. for the fiscal year ended March
31, 2012, our 91st term (from April 1, 2011 to March 31, 2012).

n Business Environment

n Future Outlook

In the fiscal year under review, despite experiencing a dramatic
decline for a time following the Great East Japan Earthquake, theJapanese economy showed signs of partial recovery, driven by arevival in the supply chain and the recommencement of production
activities. Even so, a situation of uncertainty regarding the future
persisted throughout the year, mainly due to a slowdown in global
economic growth caused by the debt crisis in Europe and the long
period of strength in the yen.
In the transportation industry, the Seino Group’s mainstay
business, domestic freight volume continued to decline, and further
burdens were felt from the increasing costs of environmental
measures and the soaring price of fuel. As a result, the businessenvironment continued to be severe.

It remains difficult to provide any clear outlook of the Japanese
economy due to the European debt crisis, soaring raw material prices
and the resulting concerns that these could cause an economic slump
overseas, not to mention the continuing severe employment
environment and the impact of deflation. This is despite expectationsof an economic recovery on the back of significant progress inrecovery and reconstruction operations following the Great East
Japan Earthquake and an expected recovery in exports.
In the transportation industry, the primary industry of the Seino
Group, costs that continue to be required for environmental measuresare expected to increase and the cost of fuel is forecasted to remain
high, and competition with other companies in the same sector is
expected to intensify further. As a result, despite expectations thatthe decline in total freight volume will bottom out, we forecast thatthe business environment will continue to be severe.
Operating in such an environment, the Seino Group will work toachieve its numerical targets by steadily implementing the various
measures in its medium-term management plan “Confront Change,”
which is now in its second year. In parallel with this, we fully intend
to further selectively concentrate business resources and proceedwhole-heartedly with business expansion and development.
In the Transportation Services Business, we will focus ourattention on the achievement of our revenue targets, maintenanceand improvement of productivity of our sales drivers during offseason periods, and creation of marginal profits from consolidated
loading by increasing efficiency through such means as making
changes in the routes used for consolidated deliveries.
In the Kyushu region, Kyushu Seino Transportation Co., Ltd.
and Kyushu Seibu Transportation Co., Ltd. coexisted at times andcompeted with each other at other times in providing services.
However, in adherence to our customer first philosophy andconsidering the severe business environment, the two companies
were reorganized into Kyushu Seino Transportation Co., Ltd. (headoffice: Fukuoka City) on April 1, 2012. Carried out for the purposeof eliminating overlap of sales areas and streamlining administrative
departments, this reorganization is expected to further strengthen
the competitiveness of the Seino Group in this area.
In addition to the above, Seino Express Co., Ltd. carried out anabsorption-type merger with Seino Butsuryu Co., Ltd. on April 1,
2012. Through the merger, we will work to achieve efficient
operations in such aspects of the business as personnel, vehicles andfacilities.
With respect to passenger vehicle sales in the Vehicle Sales
Business, we will strive to expand sales of new vehicles with a focus
on vehicle types to which eco-car subsidies are applied. In addition,
in response to the substantial increase in the ratio of sales accounted

n Initiatives and Results for the Year
Operating under these conditions, we formulated our mediumterm management plan “Confront Change” with this fiscal year as its
first year. Under the plan, we worked to combine the functions andcustomers of each group company and develop a new framework forthe creation of logistics services that “link the needs of all customers.”
We also worked to create a firm business base by making each groupcompany into the top choice for customers in their respective
industries.
In addition, with the two group-wide slogans of “giant steps”(2011) and “boldness” (2012), the Seino Group kept the challenges it
had to tackle in mind and remained undaunted by the severe businessenvironment, regarding it as an opportunity, and took the bolddecisions to respond to rapid changes in the business environmentand customer needs.
As part of this process, the sales offices in the Kyushu region of
Seino Transportation Co., Ltd. were merged with Kyushu Seino
Transportation Co., Ltd. The services of these businesses have been
partially overlapping, but adhering to a customer first philosophy andconsidering the severe business environment, a reorganized Kyushu
Seino Transportation Co., Ltd. (head office: Fukuoka City)
commenced operations from April 1, 2011. Carried out for the
purpose of eliminating overlap of sales areas and streamlining
administrative departments, this reorganization led to further
strengthening of the competitiveness of the Seino Group in this area.
As a result, operating revenue for the fiscal year ended March 31,
2012, was ¥504,276 million (up 1.3% year on year), operating income
was ¥13,867 million (up 12.5% year on year), ordinary income was¥19,741 million (down 2.0% year on year), and net income was¥12,542 million (up 48.4% year on year).
2

for by HVs (hybrid vehicles), with a view to the maintenance of suchvehicles becoming a core source of service revenue, we will heighten
the reliability of our maintenance services and promote the servicesof periodic vehicle checks and vehicle inspections and garage service.
Regarding truck sales, Gifu Hino Motor Co., Ltd. made Tokyo
Sharyo Co., Ltd. (head office: Iruma City, Saitama Prefecture) its
subsidiary on April 1, 2012. Th rough this move, we aim tostrengthen our network of maintenance factories in the Kanto
Region and promote in-house operations in the maintenancebusiness, while also expanding revenue by deploying the automobile
maintenance business over a wide geographical area. We will also
further strengthen our capabilities in the growing market for usedparts.
Although the business environment surrounding the Seino Groupis rapidly changing and becoming more severe by the day, we shalltreat these circumstances as an opportunity. We will do this by rising
to the challenges of change and evolution with “boldness” andmaking things happen with self-sufficiency and determination,
making use of the combined strength of our 63 companies.
To all shareholders, we sincerely ask for your ongoing
encouragement and support into the future.

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

Yoshikazu Taguchi
Chairman and Chief Executive Officer■ To Our Shareholders
In keeping with our basic business policy, Seino seeks to enhanceshareholders’ equity and improve profitability from a long-term
perspective, while maintaining stable dividends. Accordingly, Seino
has maintained a regular annual cash dividend per share of ¥11.00 for
the fiscal year ended March 31, 2011, the same amount as in theprevious fiscal year.
Th rough the implementation of our new medium-term
management plan, we aim to be the preeminent commercial freighttransportation company in Japan while at the same time raising
corporate and shareholder value. We ask shareholders, customers andfriends for your continued understanding and support.

Yoshitaka Taguchi
President and Chief Operating Officer

3

Special Feature

Expanding the Scope of Business and Creating New ValueThe Seino Group has decided on Tackling Challenges for
Changes as its management plan for the mid-term starting infiscal 2012. Along with creating new initiatives to unite groupcompany functions and customers, and building a logistics system
which connects all of our customer needs, group companies havestriven to be worthy of being singled out within each of theirrespective industries, and to establish solid business foundations.
With the “ leap forward” (2011) and “ boldness” (2012) set forth
as key words for the entire group, we have focused on issues for
initiatives, and seized opportunities without hesitation in this era
that leaves no room for error. We have responded decisively to theneeds of our customers and business environments, which havechanged at dizzying speeds.
The following outlines initiatives of respective business groups
in fiscal 2012.

Initiatives by Business Group
Transportation Services Business Group

Nationwide Launch of
Kangaroo Shopping Service by Seino
Holdings Coconet Co., Ltd.

Seino Holding established Coconet Co., Ltd. (Chuo-ku,
Tokyo) on October 1, to exclusively handle Kangaroo shopping
services.
Previously, Kangaroo shopping services had mainly supplied
only government-decreed cities, but in May, the service provisionarea was expanded to the entire country.
Kangaroo shopping services are made up of a shopping service,
which delivers to customer homes products such as perishable
foodstuffs bought by the consumer at retail shops, and a shopping
agent service, which packs and delivers to customer homes
products purchased by the consumer via the Internet, telephone, or
fax. Expectations are high for these markets from consumers withdifficulty shopping, with a focus on the elderly, and from dualincome households.
To provide full service and more to customers, we will further
evolve our shopping services in the future, aiming to develop anext-generation supermarket with strong marketing functions, andto provide a community concierge service (CCS).
Furthermore, we have set our sights on the realization of amodern door-to-door tradesman service, to further evolve our
shopping services. We will free ourselves of the conventionaldelivery service concept of the “last mile” (service to the door), andbuild a “last step” (service brought inside the door) lifestyleinfrastructure nationwide.

4

Seino Transportation Kangaroo Bicycle
Event Service Launched

On August 1, Seino Transportation started a new Kangaroobicycle event service, a transportation service specializing in sports
cycles such as bicycles, most notably roadracers, for competitive
events.
Accompanying recent increases in health consciousness andenvironmental awareness, together with the popularity of travel by
bike, the number of bicycle lovers has been on the rise. Thus, wehave expanded our services in response to ever diversifying needs
such as the desire of customers to try cycling at their destination
using their own bicycles
or to participate in
events such as roadraces,
triathlons, and longrides in a variety ofregions, while
simultaneously meetingthe need for safe andreliable transportation of
the customer’s beloved
cycle.

Seino Transportation e-Commerce
Web Order/Web Supply Sales Started

Seino Transportation launched on December 12 sales with our
new web order/web supply service, providing support for orderingand supply work for transactions between companies.
Replacing the ordering and supply operations that customers
carried out by phone, fax, or e-mail with the web operations tomake around-the-clock responses possible, the service is separated
into web orders for sales companies and web supply for purchasing
companies. Web orders reduce the amount of ordering work, allow
for longer ordering deadlines, and decrease shipping work. Web
supply also reduces the work of sending out orders, allows for an
instantaneous grasp of delivery status, and makes ordering history
confirmation possible. With these two services, we will realize
improvements in customer satisfaction level and reductions in
administrative costs.
These services also feature functions linking aid in Internet
shipping (Kangaroo Magic II) and a stock control system(SLIMS-WH), to provide total shipping satisfaction, from aid inordering and supply operations to product delivery. We are alsoable to offer links to customer key systems and other support.

Kanto Seino Transportation:
Koga Branch Opened

Kanto Seino Transportation completed the construction on the
Koga Branch (Koga City, Ibaraki Prefecture) underway since lastyear, and held aceremony to mark thecompletion on March 8,
with the branch opening
for business on
March 12.
The Koga Branch isin an extremely good
location, two to threeminutes by car from the
Sakai Interchange of theMetropolitan Inter-City Expressway (an expressway ring roadlocated at a radius of 40 to 60 km from the city center) scheduled
to open in 2014, with a 840 tsubo (approx. 2,780 m 2) storage
space.
In line with the opening of this branch office, the Seino
Transportation Group will conduct a reorganization in the area,
and work so that we will be able to provide an even higher level ofservice to further satisfy our customers.
Additionally, the Seino Transportation Koga Branch located in
Kamiwada in Koga City and the Koga Aviation Office will bothbe moved to the Koga Branch, and managed as a joint terminal.

Kyushu Seino Transportation:
Chikuho Branch Opening

With its previous office on the small side, Kyushu Seino
Transportation moved the Chikuho Branch (Kurate-gun,
Fukuoka Prefecture) to a new building and began operations.
On a 60 m × 30 m platform on a 15,430 m 2 site, the branchfeatures an office area, a crew waiting room, a cafeteria, meetingrooms, and nap rooms, among other features. On the occasion of
the branch opening, Kyushu Seino Transportation andsubcontractors conducted a broad review of the delivery area,
which had become complicated, leading to improvements inoperational efficiency and customer service.

Vehicle Sales and Other Businesses

Toyota Corolla Gifu:
Car Lots Ogaki Branch Opened

Toyota Car Lots Gifu
opened the used car
seller Car Lots Ogaki on
December 3 in Kono,
Ogaki City.
Until this point, thecompany had two U-car
shops handling usedcars, and developed one
store for vehicle buybackin the Seino region, but
by unifying all these stores now, the company will be able to display
even more vehicles. Additionally, with the establishment of a service
department, they will aim to improve customer convenience evenfurther.

Netz Toyota Gifu:
New Rokken Branch Building Opened

Netz Toyota Gifu merged the Kakamigahara Branch of theformer Netz Toyota Centro Gifu Co., Ltd., and the Netz Toyota
Gifu Rokken Branch, to open the Rokken Branch (Kakamigahara
City, Gifu Prefecture) in a new building.
The branch was constructed alongside a main road for a highlevel of convenience,and featuring as it doesa regular display spaceoutside for six vehicles
and a 176 m 2 basic
service station withfour lifts, this large
store is expected to see
increased sales througheven greater customer
service improvements.

Appropriate Stock Service
Provision Started

Seino Information Service Co., Ltd. began providing theappropriate stock service Cloudslash on February 8.
Cloudslash is a service that gives guidance on the optimal
amount of product stock based on past delivery and shipping
results, offering users reductions in inventory amounts anddefective products. Using Cloudslash allows for management ofstock that does not only depend on the supervisor’s instinct andexperience.

5

Review of Operations
Transportation Services Business

At Seino Transportation Co., Ltd., which plays the central role
among the 37 companies of the Transportation Services Businessgroup, we worked to increase revenue by such means as receiving
reasonable transport fees including the collection of various
charges, expanding sales of the profitable Estimated Delivery
Time Service and increasing the number of customers. We also
strove to reduce business expenses further through such measures
as improving load efficiency in consolidated deliveries, managing
working hours, and reducing material procurement expenses bythoroughly promoting in-house operations and implementing
purchase systems. In addition to these measures, we made unified,group-wide efforts to secure our target profits. These efforts
included changing our method of managing expenses fromonly managing final outcomes to connecting them with income
and freight volumes based on analyses of monthly income andexpenditure, in addition to the usual precise income forecasts, andadjusting expenses as needs arise based on progress made withrespect to income at each area or sales office.
In addition, SEIBU TRANSPORTATION CO., LTD.
launched “eco and express” an environmentally friendly expressdelivery service that uses a dedicated, reusable bag. The service
meets heightened demand for environmentally friendly services
by such means as contributing ¥1 to a charitable organization
involved in environmental efforts for each delivery made, and isalso a source of revenue growth.
As a result of the above, operating revenue for this segment
was ¥370,591 million (US$4,519,402 thousand), up 0.5% year
on year, and operating income was ¥7,240 million (US$88,293
thousand), up 11.5% year on year.

Vehicle Sales Businesswith the Post New Long-term Exhaust Emission Regulations.
The number of used vehicles sold also rose year on year, mainly
due to strengthening of the auction business.
Since the market for used truck parts is growing rapidly on theback of increased overseas demand and other factors, we newly
established a large-scale recycled parts center and started its
operations. The associated improvement in our disassembling
capability and increased efficiency boosted our earnings capacity.
With respect to office expansion efforts, Toyota Corolla Gifu
Co., Ltd. merged its two used vehicle stores in Ogaki City witha store that buys used vehicles in the same city, and relocated themerged store to the newly established Car Lots Ogaki (Ogaki
City, Gifu Prefecture). Netz Toyota Gifu Co., Ltd. relocated andnewly established each of the following sites: the Rokken branch(Kakamigahara City, Gifu Prefecture), the Minokamo branch andU-car Minokamo branch (Minokamo City, Gifu Prefecture), andthe head office service plant (Ginan-cho, Gifu Prefecture).
As a result of the above, operating revenue for this segment
was ¥87,755 million (US$1,070,183 thousand), up 0.8% year
on year, and operating income was ¥4,464 million (US$54,439
thousand), up 16.6% year on year.

In the Transportation Services Business, there was an
unavoidable decline in freight volume mainly due to the impactof the Great East Japan Earthquake. Despite this, we expanded
revenue and secured profit in the business, having operated witha particular focus on growth in our lo gistics business, sales
expansion of our Estimated Delivery Time Service, improvementin the receiving rate of transport fees, and increases in load
efficiency in consolidated deliveries and transportation quality.
In particular, we fulfilled our mission statement to “Contributeto the nation and society by providing preeminent transportation
services esteemed by customers.” We achieved this by such means
as enabling delivery before noon the next day to almost all areasof Japan with use of the three transportation networks of specialloading for consolidated deliveries nationwide, express deliveries
nationwide, and pickup and deliveries at the country’s airports, aswell as all of the modes of transportation as a freight forwarder.
Regarding office expansion efforts, we worked to improve
operational efficiency and customer satisfaction through therelocation to the newly established Chikuho Branch (Kurate-gun,
Fukuoka Prefecture) of Kyushu Seino Transportation Co., Ltd.
and the establishment of the Koga Branch (Koga City, Ibaraki
Prefecture) of Kanto Seino Transportation Co., Ltd.
In addition to the above, the Seino Group aimed to contributeto the global environment and reduce business expenses by working
on further rationalization of line-haul routes, continuing the“Eco-Drive Program,” and making strong efforts in energy-saving
initiatives.

In the Vehicle Sales Business, there was an expectation thatnew vehicle sales would struggle due to a cooling of consumer
sentiment after the earthquake disaster, as well as a shift awayfrom the use of automobiles by consumers and the demographic
effect of an aging society. Amid this environment, we continued
to establish a strong base for profitability by carrying out aggressive
sales activities while also strengthening sales of vehicle accessories
and insurance in addition to promoting payment by installments.
We also strengthened our stock business such as vehicle
inspection and vehicle maintenance and garage services.
In passenger vehicle sales, the number of new vehicles sold fell
year on year due to a decrease in reaction to the end of eco-car
subsidies, while there was a substantial impact from shortages insupply due to the Great East Japan Earthquake and damage fromthe flooding in Thailand. However, there was an improvementin per-vehicle unit prices on the back of proactive sales efforts
in areas including new hybrid vehicles and the revival of eco-car
subsidies. As a result, operating revenue increased year on year.
In truck sales, the number of new vehicles sold rose year on
year due to a full-model change to small truck models compliant

6

Merchandise Sales Businesssales prices, and as a consequence operating revenue substantiallyexceeded that of the previous fiscal year.
As a result, operating revenue for this segment was ¥30,143
million (US$367,598 thousand), up 11.2% year on year, andoperating income was ¥723 million (US$8,817 thousand), up
28.8% year on year.

Leasing for Real Estate Services Businessprimary lands subject to these measures are the following former
terminal locations: Yotsubashi (Osaka City), Tajimi (Tajimi City,
Gifu Prefecture) and Shinmachi (Osaka City).
Operating revenue for this segment was ¥1,415 million(US$17,256 thousand), down 0.9% year on year, and operating
income was ¥1,196 million (US$14,585 thousand), down 0.1%
year on year.

Other Businessin both operating revenue and operating income. However,the construction contract business had declines in revenue andincome, mainly due to a decrease in large-scale projects.
As a result, operating revenue for this segment was ¥14,369
million (US$175,232 thousand), up 8.6% year on year, andoperating income was ¥696 million (US$8,488 thousand), down
10.7% year on year.

The Merchandise Sales Business engages in the sale of fuel,paper and paper products. For fuel sales, which is the mainstay
business of this segment, there was an increase in sales volume
mainly due to aggressive sales activities, as well as a rise in unit

In the Leasing for Real Estate Services Business, we strove toeffectively utilize business resources by leasing the former truck
terminals and the sites where there used to be stores, which had
relocated equipment due to the impact of urban development
and current operating space becoming increasingly cramped. The

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. Particularly, the housing sales
business, in which we developed properties for sale in favorable
locations and actively sold them, experienced substantial growth

Operating Revenue by Business Segment(Millions of yen)
FY3/12
Results

FY3/11

Composition

Results

Composition

Year-on-YearTransportation Services

370,592

73.5%

368,771

74.1%

0.5%

Vehicle Sales

87,75517.4%

87,075

17.5%

0.8%

Merchandise Sales

30,144

6.0%

27,104

5.4%

11.2%

Leasing for Real Estate Services

1,416

0.3%

1,429

0.3%

(0.9%)

Other

14,3702.8%

13,233

2.7%

8.6%

Total

504,277

100.0%

497,612100.0%

1.3%

Composition

Year-on-Year

Operating Income by Business Segment(Millions of yen)
FY3/12
Results

FY3/11

Composition

Results

Transportation Services

7,240

52.2%

6,494

52.7%

11.5%

Vehicle Sales

4,464

32.2%

3,830

31.1%

16.6%

723

5.3%

561

4.5%

28.9%

1,196

8.6%

1,197

9.7%

(0.1%)

Other

697

5.0%

780

6.3%

(10.6%)

Total

14,320103.3%

12,862104.3%

11.3%

Elimination(453)(3.3%)(536)(4.3%)—

Consolidated

13,867100.0%

12,326100.0%

12.5%

Merchandise Sales
Leasing for Real Estate Services

7

Financial Review
Operating Results

Total current assets increased 11.7% to ¥186,255 million(US$2,271,402 thousand) compared with the previous fiscal
year-end. Total fixed assets decreased 2.0% from the previous
fiscal year-end to ¥314,708 million (US$3,837,903 thousand).
Total current liabilities increased 10.9% compared withthe previous fiscal year-end to ¥108,219 million(US$1,319,744 thousand). This was due primarily to increases
in trade payable, income taxes payable and income taxes
payable despite decreases in provision for loss on disaster andshort-term borrowings.
Long-term liabilities decreased 10.0% from the previous
fiscal year-end to ¥74,094 million (US$903,585 thousand).
The main factors behind this result were decreases in deferred
tax liabilities and negative goodwill.
Net assets rose 3.5% from the previous fiscal year-end to¥318,650 million (US$3,885,976 thousand). The major factor
was an increase in retained earnings derived from the postingof net income. Shareholders’ equity increased 0.4 percentage
point to 62.1%.

Consolidated operating revenue for Seino Holdings for the
fiscal year ended March 31, 2012 increased 1.3% from theprevious fiscal year to ¥504,276 million (US$6,419,720
thousand). This was due to increased sales in the Transportation
Services business, Vehicle sales business, Merchandise Sales
business and Other business.
Operating costs of revenues increased 1.2% from the previous
fiscal year to ¥457,512 million (US$5,579,415 thousand). The
ratio of operating costs to operating revenue was 90.7%, down
0.2 percentage point from the previous fiscal year.
Selling, general and administrative expenses decreased
0.4% to ¥32,898 million (US$401,195 thousand), while
operating income increased 12.5% to ¥13,867 million(US$169,110 thousand).
Other income (expenses) stood at ¥4,647 million (US$56,670
thousand). Key positive factors were the impairment loss on
fixed assets in the amount of ¥1,093 million (US$13,329
thousand) and loss on adjustment for changes of accounting
standard for asset retirement.
Negative factors included the amortization of negative
goodwill of ¥3,255 million (US$39,695 thousand) and special
extra retirement payments of ¥421 million (US$5,134 thousand).
As a result, income before income taxes and minority
interests amounted to ¥18,514 million (US$225,780 thousand),up 40.9% year-on-year. Net income increased 48.4% to ¥12,542
million (US$152,951 thousand).
Net income per share was ¥63.02 (US$0.77), and return on
equity was 4.0%. Annual cash dividends per share weremaintained at ¥11.00 (US$0.13), the same as in the previous
fiscal year.

Cash FlowsNet cash provided by operating activities decreased ¥3,048
million compared with the previous fiscal year to ¥24,907
million (US$303,744 thousand) due mainly to a decline ininventories in the previous fiscal year.
Net cash used in investing activities decreased ¥6,381
million compared with the previous fiscal year to ¥13,726
million (US$167,391 thousand) due primarily to an decreasein payments for the acquisition of intangible and tangible
fixed assets.
Net cash used in financing activities increased ¥56 million
compared with the previous fiscal year to ¥2,572 million(US$31,366 thousand)Consequently, cash and cash equivalents at end of year
increased ¥8,603 million compared with the previous fiscal
year to ¥57,595 million (US$702,378 thousand).

Financial Position

Total assets at the end of the fiscal year under review were¥500,963 million (US$6,109,305 thousand), up 2.7% 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

2007

2008

2009

2010

2011

2012

-5

60

40

20

2007

2008

2009

2010

Operating income to operating revenue

Net income (loss) to total assets

Net income (loss) to operating revenue

Return on equity ratio

2011

2012

0

2007

2008

2009

2010

2011

2012

SEINO HOLDINGS CO., LTD. and Consolidated Subsidiaries

Six-year Summary

For the Years Ended March 31, 2012, 2011, 2010, 2009, 2008 and 2007
Millions of Yen
2012
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

¥

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¥

2009

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

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

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

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

32,89813,867
12,542

33,023
12,326
8,449

33,342
6,621
9,477

32,6073,333
3,391

31,4749,925
6,018

30,295
10,796
8,797

186,255
500,963108,2192,475
457
318,650

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

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

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

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

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

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

Number of shares issued

63.02
11.00

¥

207,679

42.44
11.00

¥

47.60
11.00

¥

17.03
11.00

Thousands
207,679

207,679

¥

30.27
11.00

¥

44.71
11.00

207,679

207,679

207,679

0.8
0.8
0.8
1.2
64.9
180.9
51.8
65.1

2.2
1.3
1.3
2.1
62.9
181.1
56.9
36.6

2.4
2.0
1.9
3.1
61.2
171.5
61.2­­­­
24.5­­­­

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

2.7
2.5
2.5
4.0
62.1
172.1
58.6
17.5

Current ratio
(%)

200

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

Debt equity ratio

Payout ratio

(%)

(%)

120

70
60

160

50

90

40
30

120

20

60

10

80

0

30

40

-10
-20

0

2007

2008

2009

2010

2011

2012

0

2007

2008

2009

2010

2011

2012

-30

2007

2008

2009

2010

2011

2012

9

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Balance Sheets
March 31, 2012 and 2011

Millions of yen

Thousands of
U.S. dollars
2012

2012

2011

57,595
7,231
104,643
9,464
5,073
2,585
(336)
186,255

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

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

534,612(260,137)
274,475

530,780(254,235)
276,545

6,519,658(3,172,402)
3,347,256

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

18,255
2,886
9,353
9,739
40,233500,963

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

222,622
35,195
114,061
118,769
490,647$ 6,109,305

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

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

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

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

2,475
165
72,597
12,6905,773
51
14,468108,219¥¥$702,378
88,183
1,276,134
115,415
61,866
31,524(4,098)2,271,402

30,183
2,012
885,329
154,756
70,402
622
176,440
1,319,744

292
55,267
2,454
1,401
8,218
6,100
362
182,313458
55,0182,428
1,384
13,176
9,355
462
179,895

3,561
673,988
29,927
17,085100,219
74,3904,415
2,223,329

42,482
74,261
199,599(8,603)
307,739

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

518,073905,6222,434,134(104,914)
3,752,915

3,509
(132)
(360)
3,017
7,894
318,650
500,963

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

42,793(1,610)(4,390)36,793
96,2683,885,976$ 6,109,305

Commitments and contingent liabilities (Notes 8 and 9)
Net assets:
Shareholders’ equity (Note 10):
Common stock: 794,524,668 shares authorized and 207,679,783 shares issued
Capital surplus
Retained earnings
Less treasury stock at cost: 8,645,738 shares in 2012 and 8,642,914 shares in 2011		Total shareholders’ equity
Accumulated other comprehensive income:Net unrealized gains on available-for-sale securities
Land revaluation decrement
Foreign currency translation adjustments
		
Total accumulated other comprehensive income
Minority interests		
Total net assets
		
Total liabilities and net assets
See accompanying Notes to Consolidated Financial Statements.
10

¥

¥

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Income
For the Years Ended March 31, 2012, 2011 and 2010

2010

Thousands of
U.S. dollars
2012

485,808$ 6,149,720

Millions of yen
2012
Operating revenue (Notes 14 and 20)¥

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

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

2011504,277¥

497,612¥457,51232,898490,410
13,867452,263
33,023
485,286
12,326445,845
33,342
479,187
6,621

5,579,415
401,195
5,980,610
169,110

624
(38)
18
115

488
(51)
(11)
15

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

7,609
(463)
220
1,402

—

—

28
3,255
(1,093)
(22)
149

(43)
5,374
(3,029)
(413)
(107)
(178)
33
(1,678)
(404)
(670)
(166)

—
—
—
—
—
—

—

341
39,695(13,329)
(268)
1,817
—
—
—
—
—
—

—
—
—
—
—
—
—
—

(421)

—

—

2,032
4,647
18,514

(300)
1,950
810
13,136

1,782
6,319
12,94024,78056,670225,780

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

7,655(2,028)
5,627

6,984
(2,657)
4,327

5,628
(2,357)
3,271

93,354(24,732)
68,622

Income before minority interests (Note 2(s))

12,887

8,809

9,669

157,158

		

Income before income taxes and minority interests

Minority interests in net income of subsidiaries		
Net income¥

345
12,542

¥

360
8,449

¥

192
9,477

Yen
Per share:
Net income
Cash dividends

¥

63.02
11.00

¥

42.44
11.00

(5,134)—$

4,207
152,951

U.S. dollars
¥

47.60
11.00

$

0.77
0.13

See accompanying Notes to Consolidated Financial Statements.
11

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Comprehensive Income
For the Year Ended March 31, 2012 and 2011

Thousands of
U.S. dollars
2012

Millions of yen
2012
Income before minority interests
Other comprehensive income (Note 17):
Net unrealized gains on available-for-sale securities
Foreign currency translation adjustments
Share of other comprehensive income of associates accounted for using equity method		
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Minority interests

2011

¥

12,887

¥

221
(44)
—
177
13,064

¥

8,809

¥

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

12,719345$

157,158

$

2,695
(536)
—
2,159
159,317
155,110
4,207

8,069
367

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2012, 2011 and 2010

Shareholders’ equity
Number ofshares ofcommonCommonstock issued
stock

CapitalsurplusRetainedearnings

Accumulated other comprehensive income

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

Total net
assetsMillions of yen
Balance at March 31, 2009
207,679,783 ¥ 42,482 ¥ 74,266 ¥Net income for the year———
Cash dividends———
Reversal of land revaluation decrement———
Sales of treasury stock and fractional
shares, net———
Net changes in items other thanshareholders’ equity———
Balance at March 31, 2010
207,679,783
42,482
74,266
Net income for the year———
Cash dividends———
Reversal of land revaluation decrement———
Sales of treasury stock and fractional
shares, net———
Net changes in items other thanshareholders’ equity———
Balance at March 31, 2011
207,679,783
42,482
74,266
Net income for the year———
Cash dividends———
Reversal of land revaluation decrement———
Sales of treasury stock and fractional
shares, net——(5)Net changes in items other thanshareholders’ equity———
Balance at March 31, 2012
207,679,783 ¥ 42,482 ¥ 74,261 ¥

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

(305) ¥———

(533) ¥ 1,313 ¥ 6,217 ¥ 291,564
—
—
—
9,477
—
—
—
(2,190)
—
—
—
(54)

—

(9)

(9)

—

—

—

—

—

(9)

—
183,105
8,449(2,189)(158)—(8,595)————291,258
8,449(2,189)
(158)

1,658
3,809
—
—
—

54
(251)
—
—
—

76
(457)
—
—
—

1,788
3,101
—
—
—

1,216
7,433
—
—
—

3,004
301,792
8,449(2,189)
(158)

—

(11)

(11)

—

—

—

—

—

(11)

—
189,207
12,542(2,189)39—(8,606)————297,349
12,542(2,189)
39

(521)
3,288
—
—
—

158
(93)
—
—
—

141
(316)
—
—
—

(222)
2,879
—
—
—

145
7,578
—
—
—

(77)
307,806
12,542(2,189)
39

—

3

(2)

—

—

—

—

—

(2)

—
—
—
221
199,599 ¥ (8,603) ¥ 307,739 ¥ 3,509 ¥(39)(132) ¥

(44)
138
316
454
(360) ¥ 3,017 ¥ 7,894 ¥ 318,650

Thousands of U.S. dollars
Balance at March 31, 2011
Net income for the year
Cash dividends
Reversal of land revaluation decrement
Sales of treasury stock and fractional
shares, net
Net changes in items other thanshareholders’ equity
Balance at March 31, 2012

$518,073 $905,683 $ 2,307,402 $(104,951) $ 3,626,207 $ 40,098 $ (1,134) $——152,951—
152,951————(26,695)—(26,695)
—
—
—
—
476
—
476
—
—
—

(61)

37

(24)

—

—

—

—

—

(24)

—
—
—
—
—
2,695
(476)
(536)
1,683
3,853
5,536
$518,073 $905,622 $ 2,434,134 $(104,914) $ 3,752,915 $ 42,793 $ (1,610) $ (4,390) $ 36,793 $ 96,268 $ 3,885,976

See accompanying Notes to Consolidated Financial Statements.
12—(3,854) $ 35,110 $ 92,415 $ 3,753,732———
152,951———(26,695)———
476

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Cash Flows
For the Years Ended March 31, 2012, 2011 and 2010

2010

Thousands of
U.S. dollars
2012

12,940$Millions of yen
2012
Cash flows from operating activities:
Income before income taxes and minority interests¥
		Adjustments for:			Depreciation
			 Impairment loss on fixed assets
			 Amortization of negative goodwill
			Amortization of goodwill
			 Gain on negative goodwill
			 Net provision for employee retirement benefit liability			 (Gain) loss on sale or disposal of property and equipment
			 Equity in net (income) loss of affiliates			 Loss on write-down of investment securities
			 (Gain) loss on sale of investment securities
			 Net reversal for accrued severance indemnities for directors and statutory
auditors			 (Decrease) increase in provision for loss on disaster			 Loss on liquidation of subsidiaries and affiliates			 Loss on adjustment for changes in accounting standard for asset
retirement obligations(Increase) decrease in trade receivables(Increase) decrease in inventories
Increase (decrease) in trade payables
Decrease in beneficial interest in trusts in relation to trade payables
Other, net				 Sub-total
Interest and dividends received
Interest paid
Income taxes paid				Net cash provided by operating activities

2011

18,514¥

15,324
1,093(3,255)
503
—
249
(18)
(28)
22
(115)

13,136¥

225,780
186,878
13,329(39,695)
6,134
—
3,037
(220)
(341)
268
(1,402)

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

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

(4)

(89)

(187)

(49)

(134)
—

186
178

—
—

(1,634)——(7,738)(2,422)
6,612
—
2,494
31,097755(38)(6,907)
24,907

1,678
287
2,437
(1,192)—
1,607
33,942557(51)(6,493)
27,955—(2,122)(3,242)564
10,813(1,796)31,098512(119)(2,321)
29,170—(94,366)(29,536)
80,634—30,415379,2329,207(463)(84,232)
303,744

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) decrease in short-term investments
				Net cash used in investing activities(14,555)
(425)
1,441
(187)
(13,726)(21,855)
(25)
1,047
726
(20,107)(13,465)
(674)
8,198
2,597
(3,344)(177,500)(5,183)
17,573(2,281)(167,391)

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

(192)
(56)
(2,189)
(30)
(2)
(103)
(2,572)(6)
8,603
48,992
57,595(335)
200(2,189)
(26)
(11)
(155)
(2,516)(7)
5,325
43,667
48,992(2,379)(13,210)(2,190)(11)(9)—(17,799)
14
8,041
35,626
43,667(2,341)(683)(26,695)(366)(24)(1,257)(31,366)(73)
104,914597,464
702,378

¥

¥

¥

$

See accompanying Notes to Consolidated Financial Statements.
13

SEINO HOLDINGS CO., LTD. and Subsidiaries

Notes to Consolidated Financial Statementschanged its fiscal year-end from January 31 to March 31, and Darumaya
Transportation Co., Ltd. changed its fiscal year-end from December 31
to March 31. As a result, the consolidated financial statements for theperiod ended March 31, 2011 included the results of the two consolidated
subsidiaries’ operations for the 14-month period from February 1, 2010 toMarch 31, 2011 and the 15-month period from January 1, 2010 to March
31, 2011, respectively.
The overseas subsidiary has adopted accounting principles generally
accepted in its country (see Note 1). No adjustments to conform toaccounting principles generally accepted in Japan have been made to its
financial statements on consolidation, as allowed under Japanese GAAP
effective for the current fiscal year-end.

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 preparedin accordance with the provisions set forth in the Financial Instrumentand Exchange Law of Japan and its related accounting regulations
and in conformity with accounting principles generally accepted inJapan (“Japanese GAAP”), which are different in certain respects as toapplication and disclosure requirements from International Financial
Reporting Standards.
The accounts of the Company’s overseas subsidiaries are based on
their accounting records maintained in conformity with generally
accepted accounting principles prevailing in the respective countries of
domicile. The accompanying consolidated financial statements havebeen restructured and translated into English from the consolidated
financial statements of the Company prepared in accordance withJapanese GAAP and filed with the appropriate Local Finance Bureauof the Ministry of Finance as required by the financial Instrumentand 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 the approximate exchange rate prevailing at March 31, 2012,
which was ¥82 to U.S. $1.00. The translation should not be construed
as a representation that the Japanese yen amounts have been, could
have been or could in the future be converted into U.S. dollars at thisor any other rate of exchange.

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

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

Assets:Current assets
Non-current assets
			Total assets
Liabilities:
Current liabilities
Non-current liabilities
Negative goodwill
			Total liabilities

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
in significant affiliates are accounted for by the equity method.
Investments in affiliates not accounted for by the equity method arestated at cost. Differences between the acquisition cost of investments
in subsidiaries and the underlying equity in their net assets are adjusted
based on the fair value at the time of the acquisition, deferred as
goodwill or negative goodwill and amortized over five years on astraight-line basis. All intercompany transactions and accounts havebeen eliminated.
Under accounting standards for consolidation, a subsidiary isdefined as an enterprise which is controlled by another enterpriseand is a majority (more than 50%) owned enterprise or a 40% to 50%
owned enterprise that meets certain criteria. An affiliated company isdefined as an enterprise in which the investor has significant influenceand is an enterprise other than a subsidiary that is a 20% or more
owned enterprise or 15% to less than 20% owned enterprise that meets
certain criteria. For the years ended March 31, 2012, 2011 and 2010,
the number of the companies that were not more than 50% owned
enterprises, but were nevertheless classified as subsidiaries based on the
judgment of the Company in accordance with the accounting standards
was one.
The number of subsidiaries and affiliates for the years ended March
31, 2012, 2011 and 2010 was as follows:
Subsidiaries:
Domestic
Overseas
Affiliates accounted for by the equity method
Affiliates stated at cost

2012

2011

2010

58
1
4
9

57
1
4
10

57
2
3
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 subsidiary’s financial statement as ofits year-end because the difference between its fiscal year-end and that of
the Company was not more than three months. Significant transactions forthe period between the subsidiary’s year-end and the Company’s year-end
were adjusted for on consolidation.
During the year ended March 31, 2011, Central Logistics Co., Ltd.
14

Millions of yen¥¥¥¥

22,42240,80363,22529,625
15,998
14,83060,453(a-iii) Corporate Separation for the year ended March 31, 2012

(b)

(c)

(d)

On April 1, 2011, the Company restructured the transportation
business in the Kyushu region. Seino Transportation Co., Ltd. underwent
a corporate separation in which its transportation business in Kyushu
region was transferred to the newly founded company Kyushu Seino
Transportation Togo Jyunbi Co., Ltd. (“Togo Jyunbi”). At the same time,“Togo Jyunbi” and Kyushu Seino Transportation Co., Ltd merged to form
newly “Kyushu Seino Transportation Co., Ltd.” The Company applied
the Accounting Standards Board of Japan (“ASBJ”) Statement No. 21,“Accounting Standard for Business Combinations”, revised on December
26, 2008, and ASBJ Guidance No. 10, “Guidance on AccountingStandard for Business Combinations and Business Divestitures”, revisedon December 26, 2008 and treated them as business transactions undercommon control.

Cash and cash equivalents

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

Investments and marketable securities

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

Accounting for derivatives

As of March 31, 2012 and 2011, the Seino Group did not hold nor
had it issued any derivative instruments.

(e)

(f)

Allowance for doubtful accounts

2012

244 ¥
845
4
1,093 ¥

Inventories for merchandise, products, raw materials and supplies
are stated principally at the lower of moving average cost or net
realizable value, and inventories for vehicles and work-in-process arestated principally at the lower of specific identification cost or net
realizable value at March 31, 2012.

(k) Employee retirement benefits

Property and equipment, including significant renewals andadditions, are stated at cost. Property and equipment of the Company
and certain subsidiaries are depreciated by the straight-line method forbuildings and vehicles and by the declining-balance method for otherproperty.
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 depreciated by the straight-line method. Some ofthe subsidiaries capitalize property the cost of which is not less than¥100,000 but below ¥200,000 and depreciate it over three years on astraight-line basis.
The leased property of a certain subsidiary engaged in leasing
operations as lessor is recorded at cost as property held for lease. The
property was included in property and equipment in the accompanying
consolidated balance sheets and is depreciated over the lease contract
terms by the straight-line method to the amount equal to theestimated disposal value at the lease termination date. Expenditureon maintenance and repairs is charged to operating income as
incurred. Upon the disposal of the property, the cost and accumulated
depreciation are removed from the accounts and any gain or loss isrecorded as income or expenses.

(l)(h) Leases(j)

Buildings and structures ¥Land
Other property¥

Inventories(g) Property and equipment and depreciation(i)

Millions of yen

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.

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.

Employees who terminate their service with the Seino Group areentitled to retirement benefits generally determined by reference tobasic rates of pay at the time of termination, length of service andconditions under which the termination occurs.
In accordance with the accounting standard for employee retirement
benefits, the Seino Group has recognized the retirement benefits
for employees, including pension cost and related liability, based on
the actuarial present value of projected benefit obligation using theactuarial appraisal approach and the fair value of pension plan assets
available for benefits at the fiscal year-end. Unrecognized actuarial
differences from changes in the projected benefit obligation or thevalue of pension plan assets resulting from actual outcomes different
from that which was assumed and from changes 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 they arise. Unrecognizedprior service cost is amortized using the straight-line method overprincipally ten years, a period within the average remaining service
years of employees from the year in which it occurs.
Effective April 1, 2009, the Company has adopted ASBJ Statement
No. 19, “Partial Amendments to Accounting Standard for Retirement
Benefits (Part 3)”, issued on July 31, 2008. This change did not affectthe profit or loss for the year ended March 31, 2010.

Severance indemnities for directors and statutory auditors

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

(m) Income taxes

Accounting standard for impairment of fixed assets

The Company and its domestic subsidiaries have adopted the"Accounting Standard for Impairment of Fixed Assets" issued by
the Business Accounting Council of Japan and the related practicalguidance issued by ASBJ. The standard requires that fixed assets bereviewed for impairment whenever events or changes in circumstancesindicate that the carrying amount of an asset may not be recoverable.
An impairment loss shall be recognized in the income statement by
reducing the carrying amount of the impaired asset or group of assets
to the recoverable amount to be measured as the higher of the asset’s
net selling price or value in use. Fixed assets include land, buildings
and other forms of property, as well as intangible assets, and are to
be grouped at the lowest level for which there are identifiable cash
flows distinguishable from other groups of assets. For the purposeof recognition and measurement of impairment loss, fixed assets
are grouped into cash-generating units such as operating businessbranches other than idle or unused property. At March 31, 2012,2011 and 2010, recoverable amounts of assets were measured based onvalue in use calculated using discounted future cash flows at interest
rates principally of 2.5%, 3.1% and 2.8%, respectively, or net selling
prices primarily using appraisal valuations. As a result, the Seino
Group recognized impairment loss for the property of 36 businessbranches and 9 idle properties for the year ended March 31, 2012, forthe property of 56 business branches and 6 idle properties for the year
ended March 31, 2011 and for the property of 50 business branches
and 5 idle properties for the year ended March 31, 2010 as follows:

2010

291 ¥
538 $ 2,975
2,737
1,609
10,3051257
49
3,029 ¥ 2,404 $ 13,329

Accumulated impairment losses have been directly deducted from theapplicable assets.

Effective April 1, 2008, the Company and its consolidated domestic
subsidiaries have adopted the new accounting standards for financeleases commencing after March 31, 2008 and capitalize assets used
under such leases, except for certain immaterial or short-term financeleases accounted for as operating leases. As permitted, finance leases
which commenced prior to April 1, 2008 and have been accounted
for as operating leases continue to be accounted for as operating leases
with disclosure of certain “as if capitalized” information.

Intangible assets

2011

Thousandsof U.S.
dollars
2012

(n)

(o)

(p)

Income taxes are accounted for by the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the carrying amountsof existing assets and liabilities and their respective tax bases andoperating loss carryforwards. Deferred tax assets and liabilities aremeasured 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 andliabilities of a change in tax rates is recognized in the period that
includes the enactment date.

Revenue recognition for freight charges

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

Enterprise taxes

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

Appropriation of retained earnings

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

15

(q)

(r)

(s)

(t)

16

Translation of foreign currency accounts

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

Per share data

Basic net income (loss) per share is computed by dividing income(loss) available to common shareholders by the weighted average
number of shares of common stock outstanding during the respective
year. Diluted net income per share is computed as if warrants or stock
options were exercised at the beginning of the relevant year or, if later,on their first exercise date and as if the funds obtained thereby wereused to purchase common stock at the average market price during therespective year by the treasury stock method. Diluted net income pershare is not disclosed as Seino Group had no diluted common sharesfor the years ended March 31, 2012, 2011 and 2010.
Cash dividends per share shown for each fiscal year in theaccompanying consolidated statements of operations represent
dividends declared as applicable to the respective years.

Accounting changes for the previous year

(Adoption of Accounting Standards for Asset Retirement Obligations)
Effective April 1, 2010, the Company and its consolidated domestic
subsidiaries have adopted “Accounting Standards for Asset Retirement
Obligations” (ASBJ Statement No. 18, issued on March 31, 2008)
and “Guidance on Accounting Standards for Assets Retirement
Obligations” (ASBJ Guidance No. 21, issued on March 31, 2008). As
a result of adopting these standards, operating income decreased by¥288 million and income before income taxes and minority interests
decreased by ¥1,966 million for the fiscal year ended March 31, 2011.
(Adoption of Accounting Standards for Business Combinations and others)
Effective from the year ended March 31, 2011, the Company has
adopted the “Accounting Standard for Business Combinations”(ASBJ
Statement No. 21, issued on December 26, 2008), the “AccountingStandard for Consolidated Financial Statements” (ASBJ Statement
No. 22, issued on December 26, 2008), the “Partial Amendments to
Accounting Standard for Research and Development Costs” (ASBJ
Statement No. 23, issued on December 26, 2008), the “Revised
Accounting Standard for Business Divestitures”(ASBJ Statement No.
7, revised on December 26, 2008), the “Revised Accounting Standard
for Equity Method of Accounting for Investments” (ASBJ Statement
No. 16, revised on December 26, 2008) and the “Revised Guidanceon Accounting Standard for Business Combinations and AccountingStandard for Business Divestitures”(ASBJ Guidance No. 10, revisedon December 26, 2008).
(Presentation of Income before Minority Interests)
With the application of the “Cabinet Office Ordinance Revising
the Regulations on Financial Statements” (Cabinet Office Ordinance
No. 5, issued on March 24, 2009) under the “Accounting Standard forConsolidated Financial Statements (ASBJ Statement No. 22, issued
on December 26, 2008),” the account item “Income before minority
interests” was included from the fiscal year under review.

Additional information(Adoption of Accounting Standard for Presentation of Comprehensive Income)
Effective March 31, 2011, the Company has adopted “AccountingStandard for Presentation of Comprehensive Income” (ASBJ Statement
No. 25, issued on June 30, 2010) and “Revised Accounting Standard
for Consolidated Financial Statements” (ASBJ Statement No. 22,
revised on December 26, 2008). As a result of the adoption of thesestandards, the Company has presented the consolidated statement ofcomprehensive income in the consolidated financial statements forthe fiscal year ended March 31, 2011. As described in Note 17, theconsolidated balance sheet and the consolidated statement of changes
in net assets as of and for the fiscal year ended March 31, 2010 havebeen modified to conform with the new presentation rules of 2011.
(Adoption of Accounting Standards for Accounting Changes andError Corrections)
The Company and its consolidated domestic subsidiaries haveadopted “Accounting Standards for Accounting Changes and Error

Corrections” (ASBJ Statement No. 24, issued on December 4, 2009)
and “Guidance on Accounting Standard for Accounting Changes andError Corrections” (ASBJ Guidance No. 24, issued on December 4,2009) for accounting changes and corrections of prior period errors
made from the fiscal year beginning on April 1, 2011.
(Adoption of consolidated taxation system)
The Company and certain of its consolidated subsidiaries havereceived approval from Commissioner of the National Tax Agency ofJapan to adopt the consolidated taxation system effective the fiscal year
ending March 31, 2013. Effective from the fiscal year ended March
31, 2012, accounting treatment and presentation regarding deferredtaxes are based on the “Practical Solution on Tax Effect Accounting
under the Consolidation Taxation System (Part1)” (ASBJ PITF No.
5), and the “Practical Solution on Tax Effect Accounting under theConsolidation Taxation System (Part 2)” (ASBJ PITF No. 7), under
the assumption that the Company would adopt the consolidation
taxation system.

3. Inventories
Inventories at March 31, 2012 and 2011 were as follows.
Millions of yen

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

2012
7,829
876
759
9,464

2011
5,874
962
741
¥ 7,577¥

Thousands of
U.S. dollars

2012$ 95,476
10,6839,256$ 115,415

4. Investments
At March 31, 2012 and 2011, short-term investments consisted of
the following:
Millions of yen

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

2012

147
147
7,084
7,231

2011

¥

¥

—
—
6,897
6,897

Thousands of
U.S. dollars

2012

$

1,793
1,793

86,390$ 88,183

At March 31, 2012 and 2011, investment securities consisted of thefollowing:
Millions of yen

2012
Marketable securities:
Equity securities¥ 15,571
Bonds
498
105
Other
		 Total marketable securities
16,174
2,081
Other non-marketable securities¥ 18,255

2011¥ 15,787
644
105
16,536
2,091¥ 18,627

Thousands of
U.S. dollars

2012$ 189,890
6,074
1,280
197,244
25,378$ 222,622

At March 31, 2012 and 2011, the fair value of marketable securities
classified as held-to-maturity and the related net unrealized gains wereas follows:
Carrying
value

Fair value
Millions of yen

Bonds included in investment securities:
At March 31, 2012¥
At March 31, 2011

100
100

¥

Bonds included in investment securities:
At March 31, 2012
$

1,220

$

101
101

¥

1,232

$

Net
unrealized
gains

Thousands of U.S. dollars

1112Marketable securities classified as available-for-sale are stated atfair value with unrealized gains and losses excluded from current
earnings and reported as a net amount within the net assets accountuntil realized. At March 31, 2012 and 2011, gross unrealized gains
and losses for marketable securities classified as available-for-sale wereas follows:Cost

At March 31, 2012:
Equity securities
Bonds
Other
At March 31, 2011:
Equity securities
Bonds
Other
At March 31, 2012:
Equity securities
Bonds
Other

¥

Gross
Gross
unrealized unrealized
gains
lossesMillions of yen

Fair andcarrying
value

8,750 ¥
547
100
9,397 ¥

6,891 ¥
1
14
6,906 ¥

(70) ¥ 15,571
(2)
546
(9)
105
(81) ¥ 16,222

8,738 ¥
547
101
9,386 ¥

7,147 ¥
1
13
7,161 ¥

(98) ¥ 15,787
(4)
544
(9)
105
(111) ¥ 16,436$106,707 $ 84,037 $
6,671
12
1,220
170
$ 114,598 $ 84,219 $(854) $189,890
(24)
6,659
(110)
1,280
(988) $ 197,829¥¥¥

Thousands of U.S. dollars

At March 31, 2012 and 2011, investments in and long-term loans toaffiliates consisted of the following:
Millions of yen

2012
Investments accounted for by theequity method for significant
affiliates and at cost for others ¥ 2,869
17Interest bearing long-term loans¥ 2,886

2011

¥
¥

2,976
24
3,000

Thousands of
U.S. dollars

2012$ 34,988
207$ 35,195

5. Property and Equipment
At March 31, 2012 and 2011, property and equipment consisted of
the following:Thousands of
U.S. dollars

Millions of yen

2012

2011
2012
Property held for own use, at cost:Land¥ 171,564 ¥ 169,847 $ 2,092,244
Buildings and structures
231,958
229,8212,828,756
Vehicles99,44099,4081,212,683
Machinery and equipment
31,11231,084379,414
Construction in progress
100
157
1,220
438
463
5,341
Other
534,612
530,780
6,519,658
Less, accumulated depreciation (260,137) (254,235) (3,172,402)
		 Total property and equipment ¥ 274,475 ¥ 276,545 $ 3,347,256
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
for land shape and other factors based on appraisal values issued
by the Japanese National Tax Agency in accordance with the Law
Concerning Revaluation of Land. According to the Law, the excess ofthe original book values over reassessed values, net of the tax effect andminority interests portions, is recorded in net assets as land revaluation
decrement account in the accompanying consolidated balance sheets.
At March 31, 2012 and 2011, the difference between the carrying
values of land used for the business operations after revaluation overthe current market value of the land at the fiscal year-end amounted to¥1,599 million ($19,500 thousand) and ¥1,679 million, respectively.

6. Short-term Borrowings and Long-term Debt
At March 31, 2012 and 2011, short-term borrowings consisted of
the following:
Millions of yen

2012

Unsecured bank overdrafts withinterest rates of 1.3% per¥25
annum at March 31, 2012
Short-term bank borrowings,
principally unsecured andrepresented by notes withinterest rates ranging from0.280% to 1.475% per annum
2,450
at March 31, 2012
¥ 2,475

2011

Thousands of
U.S. dollars

2012

¥

25

$

305

¥

2,490
2,515

$

29,87830,183At March 31, 2012, the Company and certain subsidiaries
had unsecured overdraft agreements with 13 banks. Under suchagreements, the Company and these subsidiaries were entitled towithdraw up to ¥43,910 million ($535,488 thousand). The Company
and the subsidiaries were not obligated to pay commitment fees on theunused portions of such overdraft facilities.
At March 31, 2012 and 2011, long-term debt consisted of thefollowing:
Millions of yen

Loans from government agencies,
principally mortgages,
repayable on an installment
basis with interest rates
ranging from 0.7% to 5.8% per¥annum at March 31, 2012
Other
Less current portion

¥

2012

2011

392 ¥
65
457
(165)
292 ¥

Thousands of
U.S. dollars

2012

582 $
66
648
(190)
458 $

4,780
793
5,573
(2,012)
3,561

At March 31, 2012 and 2011, the following assets were pledged ascollateral for certain long-term debt in the aggregate amount of ¥392
million ($4,780 thousand) and ¥582 million, respectively:
Millions of yen

Thousands of
U.S. dollars

5,798
1,920

$

2012
Land
Buildings and structures

¥

2011

¥

6,752
3,647

2012

70,707
23,415The aggregate annual maturities of long-term debt as at March 31,
2012 were as follows:Year ending March 31,
2013
2014
2015
2016
2017
ThereafterThousands ofMillions of yen
U.S. dollars
¥
165
$
2,012
116
1,415
76
927
33
402
8
98
59
719
¥
457
$
5,573

7. Employee Retirement Benefits
The Company and its domestic subsidiaries have defined benefit
plans. The following table reconciles the benefit liability as of March
31, 2012 and 2011:
Millions of yen

Thousands of
U.S. dollars

2012
2011
Reconciliation of benefit liability:
Projected benefit obligation ¥ 59,090 ¥ 60,388 $Less fair value of pension plan
(2,573)(2,948)assets at end of year
56,51757,440Less unrecognized past service cost8
(173)
Less unrecognized actuarial(2,249)(1,258)differences (loss)
Net amounts of employee
retirement benefit liability
recorded on the consolidated¥ 55,267 ¥ 55,018 $balance sheets

2012

720,610(31,378)
689,23298(15,342)

673,988

Notes: 1. Projected benefit obligation of certain subsidiaries was calculatedusing the simplified calculation method as permitted by theaccounting standard for employee retirement benefits.
The components of net periodic retirement benefit expenses for theyears ended March, 2012, 2011 and 2010 were as follows:17

Thousandsof U.S.
dollars
2012

Millions of yen
2012

2011

2010

Net periodic retirement
benefit expenses:
Service cost
¥ 3,243 ¥ 3,608 ¥ 3,774 $ 39,549
Interest cost
1,173
1,219
1,328
14,305
Expected return on
pension plan assets
(1)
(30)
(120)
(12)
Amortization of
actuarial differences
715
790
564
8,719
Amortization of past
service cost
247
269
380
3,012
(Gain) loss on abolishmentof retirement benefit plan
(149)
107
541
(1,817)Lump-sum payment
to withdrawal for
employees pension fund
—
670
—
—
Retirement benefit
expenses—
166——
Special extra retirement
421
—
—
5,134
payments
			Total retirement
benefit expenses ¥ 5,649 ¥ 6,799 ¥ 6,467 $ 68,890
For the purpose of overhauling the employee retirement benefit
plan, some of the Company’s subsidiaries withdrew from the multiemployer pension program established by the subsidiaries and other
employers on February 28, 2011. As a result, lump-sum payments
to withdraw from the employee pension fund were charged to such
subsidiaries as above.
In addition, one of the Company’s subsidiaries changed thecalculation method from the simplified one to the principal one
by merging with another subsidiary calculating in accordance withthe principal one. As a result, benefit liabilities increased and were
accounted for as retirement benefit expenses as above.
Major assumptions used in the calculation of the above
information for the years ended March 31, 2012, 2011 and 2010 wereas follows:
2012
2011
Method attributing the projected Straight- Straight-line
methodbenefits to periods of services line method
Discount rate
2.0%
2.0%
Expected rate of return on
2.0%
2.0%
pension plan assets
principally principally
Amortization of past service cost
10 years
10 years
Amortization of actuarial
principally principally
10 years
10 yearsdifferences

2010
Straight-line
method2.0%
2.0%

principally
10 yearsprincipally
10 years

8. Contingent Liabilities
At March 31, 2012 and 2011, the Seino Group was contingently
liable for trade notes endorsed to affiliates and third parties andfor guarantees, including substantial guarantees, principally ofindebtedness of affiliates and third parties in the aggregate amounts of¥1,291 million ($15,744 thousand) and ¥1,308 million, respectively.

9. Lease Commitments
As lessee, the Seino Group has entered into various rental and noncancelable lease agreements for computer equipment and radio facilities
with contract terms from four to nine years. As disclosed in Note 2(h),these finance leases which commenced prior to April 1, 2008 havebeen accounted for as operating leases. The aggregate minimum futurelease payments under such non-cancelable finance lease agreements,
including the imputed interest portions, as at March 31, 2012 and2011 were as follows:
Millions of yen

Finance leases:
Due within one year
Due after one year

2012
¥
¥

19
15
34

2011

¥
¥

120
35
155

Thousands of
U.S. dollars

2012

$
$

232
183
415

In addition, the Seino Group has entered into various rental andlease agreements for land and buildings to be used for truck terminals
and warehouses which are generally cancelable with a few months'
18

advance notice, except for certain operating lease agreements as
below. The aggregate minimum future lease payments for such noncancelable operating lease agreements, including the imputed interest
portion, as lessee at March 31, 2012 and 2011 were as follows.

Operating leases:
Due within one year
Due after one year

Millions of yen

Thousands of
U.S. dollars

517
1,336
1,853

$ 6,305
16,293$ 22,598

2012
¥
¥

2011

¥
¥

426
1,140
1,566

2012

A certain consolidated subsidiary engaged in leasing operations
as lessor, enters into various lease agreements with third parties
principally for vehicles. The leases are categorized as financing leases
and operating leases. At March 31, 2012 and 2011 the aggregate future
minimum lease commitments to be received for such non-cancelable
lease agreements, including the imputed interest, were as follows:
Millions of yen

2012

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

Operating leases:
Due within one year
Due after one year

¥

¥

¥

2011

12
—
12

¥

268
644
912

¥

¥

¥

33
13
46
214
833
1,047

Thousands of
U.S. dollars

2012

$
$

146
—
146

$ 3,268
7,854$ 11,122

10. Net Assets(a)		The Japanese Corporate Law (“the Law”) became effective on May 1,
2006, replacing the former Japanese Commercial Code. The Law isgenerally applicable to events and transactions occurring after April
30, 2006 and for fiscal years ending after that date.
			
Under Japanese laws and regulations, the entire amount paid for
new shares is required to be designated as common stock. However,a company may, by a resolution of the Board of Directors, designate
an amount not exceeding one-half of the price of the new shares asadditional paid-in capital, which is included in capital surplus.
			
Under the Law, in cases in which a dividend distribution of
surplus is made, the smaller of an amount equal to 10% of thedividend or the excess, if any, of 25% of common stock over the totalof additional paid-in capital and legal earnings reserve must be set
aside as additional paid-in capital or legal earnings reserve. Legalearnings reserve is included in retained earnings in the accompanying
consolidated balance sheets.
			
Under the Law, legal earnings reserve and additional paid-in
capital could be used to eliminate or reduce a deficit by a resolutionof the shareholders' meeting. Additional paid-in capital and legal
earnings reserve may not be distributed as dividends. All additional
paid-in capital and all legal earnings reserve may be transferred toother capital surplus and retained earnings, respectively, which arepotentially available for dividends.
			
At March 31, 2012 and 2011, capital surplus consisted principallyof additional paid-in capital. In addition, retained earnings included
legal earnings reserve of the Company in the amount of ¥4,262 million($51,976 thousand) at March 31, 2012 and 2011.
			
The maximum amount that the Company can distribute as
dividends is calculated based on the non consolidated financial
statements of the Company in accordance with Japanese laws andregulations.
(b) At the annual shareholders’ meeting held on June 27, 2012, theshareholders approved cash dividends of ¥11 per share, amounting to¥2,189 million ($26,695 thousand). The appropriations have not been
accrued in the consolidated financial statements as of March 31, 2012as such appropriations are recognized in the period in which they areapproved by the shareholders.

11. Income Taxes
The tax effects of temporary differences that give rise to asignificant portion of deferred tax assets and liabilities at March 31,
2012 and 2011 were as follows:Millions of yen

Thousands of
U.S. dollars

2012
2011
2012
Deferred tax assets:
Employee retirement benefit liability ¥ 20,499 ¥ 23,117 $ 249,988
Enterprise tax accruals
439
441
5,354
Accrued bonuses
3,367
3,526
41,061
Intercompany capital gains
999
982
12,183Operating loss carryforwards
2,171
2,247
26,475
Loss on assets transferred
1,543
1,367
18,817
Impairment loss on fixed assets
13,185
13,636
160,793
Allowance for doubtful accounts
102
126
1,244
5,776
7,903
70,439Other
48,081
53,345586,354(20,316)(24,791)(247,756)
Less valuation allowance
27,76528,554
338,598
Deferred tax liabilities:
Deferred capital gains
5,949
6,818
72,549Unrealized gains on available2,288
2,735
27,902for-sale securities
Valuation adjustments for
12,991
14,895
158,427
consolidation
329
385
4,012
Other
21,557
24,833262,890¥ 6,208 ¥ 3,721 $ 75,708
Net deferred tax assets
At March 31, 2012 and 2011, deferred tax assets and liabilities wererecorded as follows:
Deferred tax assets:
Current
Noncurrent
Deferred tax liabilities:
Current
Noncurrent

Millions of yen

Thousands of
U.S. dollars

5,073
9,353

4,633
12,264$ 61,866
114,061—
13,176—100,219

2012
¥

—
8,218

2011

¥

Percentage of pretax income

2012
40.4%

2011
40.4%

0.7
(0.8)
3.5

1.0
(1.0)
4.9

(6.9)

(16.3)

4.0
1.2
30.4%

—
(0.1)
32.9%

(0.1)
(11.6)

12. Real Estate for Rent
Some of the Company’s subsidiaries own for rent land and facilities
where closed or redeployed branches used to be. The book values in the
consolidated balance sheets, changes during the fiscal year and the fairvalues of the rental properties were as follows:
Millions of yen
Book value
Fair value
March 31, 2011 Increase (decrease) March 31, 2012 March 31, 2012¥
14,393¥(505)¥
13,888¥17,747
Millions of yen
Book value
Fair value
March 31, 2010 Increase (decrease) March 31, 2011 March 31, 2011¥
13,061¥
1,332¥
14,393¥
18,736
Thousands of U.S. dollars
Book value
Fair value
March 31, 2011 Increase (decrease) March 31, 2012 March 31, 2012
$ 175,524$(6,158)$ 169,366$ 216,427
Profit and loss in the fiscal years ended March 31, 2012 and 2011were as follows:2012

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, 2012 and 2011, a valuation allowance
was provided to reduce the deferred tax assets to the extent that the
management believed that the amount 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
the accompanying consolidated statements of operations for the years
ended March 31, 2012 and 2011 were as follows:

Japanese statutory tax rate
Increase (decrease) due to:Permanently nondeductible expenses
Tax exempt income
Local minimum taxes - per capita levy
Amortization of goodwill andnegative goodwill
Equity in net income of affiliates
Changes in valuation allowance
Adjustment of deferred tax assets andliabilities for enacted changes intax laws and rates
Other
Effective income tax rateincome tax rates, net deferred tax assets decreased by ¥397 million($4,841 thousand) as of March 31, 2012 and deferred income tax
expense recognized for the year ended March 31, 2012 increased by¥740 million ($9,024 thousand).

0.1
3.9

On December 2, 2011, amendments to the Japanese tax regulations
were enacted into law. As a result of these amendments, the statutory
income tax rate for the Company will be reduced to 37.2% for years
beginning on or after April 1, 2012 and 34.8% for years beginningon or after April 1, 2015. 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, 2012 toMarch 31, 2015 and on or after April 1, 2015 are 37.2% and 34.8%,
respectively, as of March 31, 2012. Due to these changes in statutory

Rental properties
Operating revenue¥
Operating costs
Difference
Other ((losses) gains on sale ofproperty, etc.)

Millions of yen

Thousands of
U.S. dollars

1,416
237
1,179

1,429
259
1,170

$ 17,268
2,890
14,378(309)(3,061)

2012

(251)

2011

¥

2012

13. Financial Instruments(a) Policies on Financial Instruments
			The Seino Group consolidated its temporary cash surplus to theCompany by utilizing its Cash Management System. The Company
invests in low-risk and short-term instruments in accordance with its
internal fund management rules. The Company raises funds mainly
through indirect financing such as bank loans for investments infacilities taking immediate liquidity into consideration.
(b) Details of Financial Instruments and Risks
			
Trade receivables are exposed to the credit risk of customers. Someof the subsidiaries have receivables in foreign currency and are exposed
to foreign currency exchange risk.
			Marketable and investment securities, which consist of held-tomaturity securities and marketable securities of business entities withwhich the Seino Group has business relationships, are exposed to stock
market fluctuation risk.
			
Notes and accounts payable 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 toexchange risk.
			Some loans are used principally for capital investments. Long term
debt with variable interest rates is exposed to interest rate fluctuation
risk.
(c) Risk Management for financial instruments(1) Monitoring of credit risk
			In accordance with internal policies for credit risk management,each subsidiary monitors the creditworthiness of its customers
and manages the terms and conditions of payment, due dates andremaining balances to reduce such risk.
			Regarding held-to-maturity securities, the Company invests inhigh credit-rating bonds in accordance with its internal fundmanagement rules. As a result, the risk is de-minimis.
		(2) Monitoring market risk
			The Board of the Directors regularly monitors market risk basedon the management methods which they decide in accordancewith internal market risk management rules. For marketablesecurities, the Seino Group monitors market prices every quarterand reviews the market condition, financial position and business
relationship of the issuers.
19		(3) Monitoring liquidity risk
			The Company has a cash management system with its subsidiaries
and becomes the paying agent for the subsidiaries under thesystem. The subsidiaries report their cash flow projections to
the Company. The Company has sufficient bank credit lines,
including overdrafts, enabling the Seino Group to manage
liquidity risk.
(d) Supplemental information on fair values
The fair values of financial instruments are based on their market
prices. The fair values of financial instruments with no available
market prices are determined by using prices calculated in a reasonable
manner. However, as various factors are incorporated into thesecalculations, the resulting values may differ if different assumptions
are provided.
The book value and fair value of financial instruments and any
differences between them, as of March 31, 2012 and 2011 were as
follows.
At March 31, 2012
Cash and cash equivalents ¥Trade receivables
Short-term investments andinvestment securities¥
Total assets
Trade payables¥
Short-term borrowings
Current portion of longterm debt
Long-term debt¥
Total liabilities

At March 31, 2011
Cash and cash equivalents ¥Trade receivables
Short-term investments andinvestment securities¥
Total assets
Trade payables
Short-term borrowings
Current portion of longterm debt
Long-term debt
Total liabilities¥¥

Book value

Millions of yen
Fair value

Difference

57,595 ¥104,643

57,595 ¥—104,643 —

23,405
185,643 ¥

23,406
185,644 ¥

72,597 ¥2,475

72,597 ¥—2,475 —165
292
75,529 ¥165 —
288(4)75,525 ¥(4)Book value

Millions of yen
Fair value

11

Difference

48,992 ¥96,80848,992 ¥—96,808 —

23,432
169,232 ¥

23,434
169,234 ¥

65,177 ¥2,515

65,177 ¥—2,515 —190
458
68,340 ¥190 —
455(3)
68,337 ¥(3)

2
2

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

At March 31, 2012
Cash and cash equivalents $ 702,378 $ 702,378 $—Trade receivables
1,276,134
1,276,134 —
Short-term investments andinvestment securities
285,427
285,43912$ 2,263,939 $ 2,263,951 $12
Total assets
Trade payables$
Short-term borrowings
Current portion of longterm debt
Long-term debt$
Total liabilities

885,329 $30,183885,329 $—30,183 —

2,012
3,561
921,085 $2,012 —3,512
(49)
921,036 $(49)

Notes:
1.	Method of measuring the fair value of financial instruments
Assets(1) Cash and cash equivalents
As these instruments are settled within a short term and theirfair value and book value are nearly identical, their book 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
value of future cash flows through maturity discounted using
an estimated credit risk adjusted interest rate. The carrying
amounts of notes and trade receivables other than installment
20

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

Millions of yen

Non-marketable securities
Preferred securities

2012
1,581
500
¥ 2,081
¥

2011
1,591
500
¥ 2,091¥

Thousands of
U.S. dollars

2012$ 19,280
6,098$ 25,378

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

1-5 years

5-10 years

Over 10years

At March 31, 2012
Cash and cash equivalents ¥57,595 ¥— ¥— ¥Trade receivables
84,538
19,104
1,001
Short-term investments andinvestment securities
Time deposits
7,084
—
—
Held-to-maturity securities
		Corporate bonds
100
100
—
Available-for-sale securities
with maturities
		 (1) Government andmunicipal bonds, etc.
47
—
—
—
500
—
		 (2) Corporate bonds
Total short-term investments
and investment securities
7,231
500
—
¥ 149,364 ¥ 19,604 ¥ 1,001 ¥Millions of yen
Within 1 year

1-5 years

5-10 years

At March 31, 2011
Cash and cash equivalents ¥ 48,992 ¥— ¥Trade receivables
77,085
18,962
Short-term investments andinvestment securities
Time deposits
6,897—
Held-to-maturity securities
		Corporate bonds—
100
Available-for-sale securities
with maturities
		 (1) Government andmunicipal bonds, etc.
—
47
—
500
		 (2) Corporate bonds
Total short-term investments
and investment securities
6,897
647
¥ 132,974 ¥ 19,609 ¥

—
—
—
—
—
—
—
—

Over 10
years

— ¥
761

—
—

—

—

—

—

—
—

—
—

—
761 ¥

—
—

Thousands of U.S. dollars
Within 1 year

1-5 years

5-10 years

Over 10years

At March 31, 2012
Cash and cash equivalents $ 702,378 $— $— $
Trade receivables
1,030,951
232,975
12,208
Short-term investments andinvestment securities
Time deposits
86,390——
Held-to-maturity securities
		Corporate bonds
1,220
—
—
Available-for-sale securities
with maturities
		 (1) Government andmunicipal bonds, etc.
573
—
—
—
6,098
—
		 (2) Corporate bonds
Total short-term investments
and investment securities
88,183
6,098—$ 1,821,512 $ 239,073 $ 12,208 $

—
—
—
—
—
—
—
—

4.	For the repayment schedule for bonds payable and long-term loans
payable at March 31, 2012, see Note 6, “Short-term Borrowingsand Long-term Debt.”

Millions of yen
Comprehensive income attributeto owners of the parent¥
11,211
Comprehensive income attribute204
to minority interests
11,415
			Total comprehensive income ¥Other comprehensive income for the fiscal year ended March
31, 2010 was as follow.
Millions of yen
Valuation difference on available¥
1,667
for-sale securities
Foreign currency translation
adjustment
76
Share of other comprehensive
income of associates accounted
3
for using equity method
1,746
			 Total other 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 year ended March 31, 2012 were as
follows:

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

Title
Director

Transaction
Millions of Yen
Sales of housing
48

15. Asset Retirement Obligation
The asset retirement obligation is based upon estimated future
restoration obligations pursuant to office rental agreements. The
asset retirement obligation is calculated based upon the useful life
designated by law or estimated office rental period and discounted byyield rate of government bonds.
The asset retirement obligation as of March 31, 2012 was as follow.
Thousands ofMillions of yen
U.S. dollars
¥
2,491
$
30,37821
256

As of April 1, 2011
New obligations
Changes in estimated obligations
and accretion
Settlement payments
Other¥
As of March 31, 2012

45
(86)
(8)
2,463

$

549
(1,048)(98)
30,037

The asset retirement obligation as of March 31, 2011 was asfollow.
Millions of yen
As of April 1, 2010¥
2,470
New obligations
203
Changes in estimated obligations
and accretion
44
Settlement payments
(245)
19
Other
¥
2,491
As of March 31, 2011

Thousands of
U.S. dollars

Millions of yen

Unrealized gains (losses) on securities
Decrease during the year¥
Reclassification adjustments
Sub-total, before tax
Tax or benefit¥
Sub-total, net of tax

(244)
18
(226)
447
221

Foreign currency translation adjustment
Decrease during the year
Total other comprehensive income ¥

(44)
177

$

$

(2,976)220(2,756)
5,451
2,695

$

(536)
2,159

18. Supplementary Cash Flows Information
Non-cash investing and financing activities for the year ended
March 31, 2011 was as follow:
Asset retirement obligations
recorded for the fiscal year

Millions of yen
¥

2,491

19. Subsequent Events
On April 1, 2012, the Company restructured the transportation
business in the Kyushu region. Kyushu Seibu Transportation
Co., Ltd. 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 Transportation Co., Ltd. and Seibu Transportation Co.,
Ltd. merged. The Company applied ASBJ Statement No. 21,“Accounting Standard for Business Combinations”, revised on
December 26, 2008, and ASBJ Guidance No. 10, “Guidance on
Accounting Standard for Business Combinations and Business
Divestitures”, revised on December 26, 2008, and treated them asbusiness transactions under common control.

The balance of the asset retirement obligation at beginning of
the fiscal year was determined based upon the guidance set forth in“Accounting Standards for Asset Retirement Obligations” (ASBJ
Statement No. 18, issued on March 31, 2008) and “Guidance on
Accounting Standards for Assets Retirement Obligations” (ASBJ
Guidance No. 21, issued on March 31, 2008).

16. Provision for Loss on Disaster
Provision for loss on disaster is provided for the restorationof the property damaged or destroyed by the Great East Japan
Earthquake at an amount estimated at the fiscal year-end.

17. Comprehensive Income
Comprehensive income for the fiscal year ended March 31,
2010 was as follow.
2120. Segment Information
1.

2.
3.

General information about reportable segments

The reportable segments are constituent business units of the Seino Group for which separate financial information is obtained and examined regularly
by the Board of Directors to evaluate business performance. The Seino Group has established the “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 leasing for real estate services
to make good use of their facilities. Therefore, the Seino Group consists of business segments that are based on the business operated by each subsidiary.
The Seino Group’s reported segments are “transportation services,” “vehicle sales,” “merchandise sales” and “leasing for real estate services.”

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

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

Information about reportable segment profit or loss, segment assets, segment liabilities and other material items
Information by industry segment for the years ended March 31, 2012, 2011 and 2010 is summarized as follows:

For the year 2012:
Operating revenue:
		External customers
		Inter-segment sales
			Total operating revenue
			Operating income

Transportation
services

Identifiable assets
Depreciation
Impairment loss on fixed assets
Capital expenditures
For the year 2012:
Operating revenue:
		External customers
		Inter-segment sales
			Total operating revenue
			Operating income

Leasing for realestate services

Other

Total

Adjustments

Consolidated

370,592 ¥1,574
372,166
7,240 ¥

87,755 ¥
7,203
94,9584,464 ¥

30,144 ¥25,49855,642723 ¥

384,612 ¥
13,559419

95,399 ¥1,613
78

14,421 ¥79—

13,006 ¥47—

18,397 ¥275
6525,835 ¥
15,573503(24,872) ¥(249)—

500,963
15,324503

2,724
12,798

—
2,726

—
38

67
2

—
121

2,791
15,685

(3)
(303)

2,788
15,382

Transportation
services

Vehicle sales

Merchandise
sales

Leasing for realestate services

Adjustments

Consolidated

¥
¥

Other

368,771 ¥1,438
370,2096,494 ¥

87,075 ¥7,352
94,4273,830 ¥

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

385,891 ¥
14,913417

90,393 ¥1,620
78

13,053 ¥79—

12,638 ¥
63
—

2,891
22,001

—
3,361

—
105

2
4

Transportation
services

Vehicle sales

Merchandise
sales

Leasing for realestate services¥¥

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

Merchandise
sales

Millions of yen
1,416 ¥
14,370 ¥—10,645
1,416
25,015
1,196 ¥
697 ¥

Identifiable assets¥
Depreciation
Amortization of goodwill
Investments in affiliates accounted
for by the equity method
Increase in fixed assets
For the year 2011:
Operating revenue:
		External customers
		Inter-segment sales
			Total operating revenue
			Operating income

Vehicle sales¥¥¥

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

487,701
16,695
501

—
257

2,893
25,728

(2)
(443)

2,891
25,285Adjustments

Consolidated

Other

21,779 ¥21,41043,18942,590599 ¥

391,072 ¥
16,741
2,324
9,078

91,155 ¥
1,785
80
1,436

11,880 ¥77—
134

11,121 ¥64—
2$ 4,519,415 $ 1,070,183 $19,19587,841
4,538,610
1,158,024$
88,293 $54,439 $Identifiable assets$ 4,690,390 $ 1,163,402 $Depreciation
165,354
19,671
Amortization of goodwill
5,110
951
Investments in affiliates accounted
for by the equity method
33,220—156,073
33,244
Increase in fixed assets

367,610
310,951
678,561
8,817

Leasing for realestate services

Total

497,612—497,612
12,326

87,132 ¥
4,848
91,98088,683
3,297 ¥

Merchandise
sales

504,277—
504,277
13,867— ¥(48,048)(48,048)(536) ¥

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

Vehicle sales— ¥(44,920)(44,920)(453) ¥

497,612 ¥48,048545,660
12,862 ¥Millions of yen
1,265 ¥
13,004 ¥—12,8271,265
25,831
214
25,626
1,051 ¥
205 ¥Transportation
services504,277 ¥
44,920549,197
14,320 ¥17,855 ¥
287
—
286
Other

Total

485,808 ¥
40,734
526,542519,629
6,913 ¥

— ¥(40,734)(40,734)(40,442)(292) ¥

485,808—
485,808
479,187
6,621

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

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

Total

Thousands of U.S. dollars$
17,268 $ 175,244 $ 6,149,720 $—
129,817547,804
17,268305,061
6,697,524$
14,585 $
8,500 $ 174,634 $

175,866 $963—

158,610 $
573
—

—
463

817
24

224,354 $ 6,412,622 $
3,354
189,915
73
6,134
—
1,476

34,037
191,280

Adjustments

Consolidated— $ 6,149,720(547,804)—(547,804)
6,149,720(5,524) $169,110(303,317) $ 6,109,305(3,037)
186,878
—
6,134
(37)
(3,695)34,000187,585(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.
22

2.	Information about geographic areas(1) Operating revenue
The Company has omitted the disclosure of operating revenue because operating revenue to external customers in Japan accounts for more than
90% of the amount of operating revenue reported in the consolidated statements of income.
(2) Property and equipment
The Company has omitted the disclosure of property and equipment because property and equipment in Japan account for more than 90% of theamount of property and equipment reported in the consolidated balance sheets.
3.	Information about major customers
The Company has not disclosed information about major customers because no customer had contributed 10% or more to operating revenue in the
consolidated statements of income.
Information on impairment loss by reportable segments
Impairment loss
For the year 2012:
For the year 2011:

Transportation
services¥¥

Vehicle sales

833 ¥2,518 ¥

247 ¥
145 ¥

Information on goodwill by reportable segments

Transportation
services

For the year 2012:
Amortization of goodwill
Goodwill as of March 31

¥

419 ¥
432

For the year 2011:
Amortization of goodwill
Goodwill as of March 31

¥

417 ¥
824

Transportation
services

For the year 2012:
Amortization of negative goodwill
Negative goodwill as of March 31¥

3,168 ¥
5,947

For the year 2011:
Amortization of negative goodwill
Negative goodwill as of March 31¥

3,265 ¥
9,115

Vehicle sales

Transportation
services¥¥

Transportation
services$

For the year 2012:
Amortization of negative goodwill
Negative goodwill as of March 31$

Transportation
services

$

— ¥
—

6 ¥
14

501
1,053

Gain on negative goodwill
For the year 2012:$

Merchandise
sales

Leasing for realestate services

Total

— ¥
—

— ¥
—

67 ¥
125

3,255
6,100

1,986 ¥
—

19 ¥
48

— ¥
—

104 ¥
192

5,374
9,355

Merchandise
sales

Leasing for realestate services

Millions of yen— ¥— ¥Merchandise
sales

Vehicle sales

Merchandise
sales

Leasing for realestate services

Leasing for realestate services

Thousands of U.S. dollars
951 $
— $
— $
1,671
—
—

Vehicle sales

Merchandise
sales

Leasing for realestate services

Thousands of U.S. dollars
— $
244 $
— $
—
341
—

Vehicle sales

Merchandise
sales

Other

— ¥
— ¥

Thousands of U.S. dollars
3,012 $
— $
— $

— $

Other

Millions of yen
20 ¥28

Information on gain on negative goodwill by reportable segments
Transportation
services

Total

— ¥
—

Vehicle sales

38,634 $72,525

Other

1,093
3,029

78 ¥
215

— ¥
— ¥

5,110 $
5,268

13 ¥
— ¥

503
577

Information on goodwill by reportable segments
For the year 2012:
Amortization of goodwill
Goodwill as of March 31

Leasing for realestate services

Total

6 ¥
8

Vehicle sales

10,159 $Transportation
services

Merchandise
sales

Other

— ¥
—

Information on impairment loss by reportable segments
Impairment loss
For the year 2012:

Millions of yen
— ¥
— ¥
— ¥
366 ¥

78 ¥
137

Vehicle sales

— ¥
— ¥

Leasing for realestate services

Millions of yen— ¥—Information on gain on negative goodwill by reportable segments
Gain on negative goodwill
For the year 2012:
For the year 2011:

Merchandise
sales

Leasing for realestate services

Thousands of U.S. dollars
— $
— $
— $

Total

— ¥
33 ¥
Other

—
33
Total

158 $
Other

13,329
Total

73 $
98
Other

6,134
7,037
Total

817 $
1,524
Other

39,69574,390
Total

— $

—

Additional information(Accounting standard for segment information)

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

Notes:	
Identifiable assets in the elimination column represent unallocated general corporate items which are not assigned to a particular industry segment such as cash and shortterm and long-term investment securities, net of inter-segment balances.

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, 2012 and 2011, the related consolidated statements of income for each of thethree years in the period ended March 31, 2012, the consolidated statements of comprehensive income for each of the two years in the period
ended March 31, 2012, and the related consolidated statements of changes in net assets and cash flows for each of the three years in the period
ended March 31, 2012, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting
principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits inaccordance with auditing standards generally accepted in Japan. Those standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.
The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation andfair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, while
the objective of the financial statement audit is not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company and its
subsidiaries as at March 31, 2012, and 2011, and their financial performance and cash flows for each of the three years in the period ended
March 31, 2012, in conformity with accounting principles generally accepted in Japan.
Emphasis of Matter
Without qualifying our opinion, we draw attention to Note 2(s) to the consolidated financial statements, effective from the year ended March
31, 2011, the Company and its subsidiaries adopted the new accounting standard for the Asset Retirement Obligations.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2012 are presented
solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has
been made on the basis described in Note 1 to the consolidated financial statements.

KPMG AZSA LLC
August 31, 2012
Nagoya, Japan
24

Seino GroupThe Seino Group consists of Seino Holdings Co., Ltd. and 59 consolidated subsidiaries and 13 affiliates. The Seino
Group operates in five business segments: transportation services, vehicle sales, merchandise sales, leasing for realestate services and other services. The business relationship in the Seino Group is as follows.

Clients
Collection and
Delivery

VehiclesSales and Repairs

Domestic
Transportation
Seino Transportation Co., Ltd.
*1
Hokkaido Seino Transportation Co., Ltd. *1
Iwate Seino Transportation Co., Ltd.
*1
Miyagi Seino Transportation Co., Ltd.
*1
Kanto Seino Transportation Co., Ltd.
*1
Seibu Transportation Co., Ltd.
*1
Kanagawa Seino Transportation Co., Ltd. *1
Izu Seino Transportation Co., Ltd.
*1
Nohi Seino Transportation Co., Ltd.
*1
Tokai Seino Transportation Co., Ltd.
*1
Mie Seino Transportation Co., Ltd.
*1
Hinomaru Seino Transportation Co., Ltd. *1
Shikoku Seino Transportation Co., Ltd. *1
Kyushu Seino Transportation Co., Ltd. *1
Kyushu Seibu Transportation Co., Ltd. *1
Okinawa Seino Transportation Co., Ltd. *1
Seino Tsu-un Transportation Co., Ltd.
*1
Seino Express Co., Ltd.
*1
Seino Hikkoshi Co., Ltd.
*1
Seino Hokkaido Express Co., Ltd.
*1
Seino Tokyo Express Co., Ltd.
*1
Seino 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
Seino Logistics Hokkaido Co., Ltd.
*1
S&N Logistics Co., Ltd.
*1
Seino Butsuryu Co., Ltd.
*1
Toyo Co., Ltd.
*1
Katsunuma Transportation Co., Ltd.
*1
Darumaya Transportation Co., Ltd.
*1
Central Logistics Co., Ltd.
*1
Eco Alliance Co., Ltd.
*1
Coconet 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
Toyota Gifu Parts Dsitributor
Co., Ltd.

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

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

Marchandise
sales

Leasing forReal Estate Services

Information Services

VehicleSales*1

Japan Logistics
Development Co.,
Ltd.

*1

OthersInternational
Transportation
Seino Logix Co., Ltd.

Seino Information
Service Co., Ltd.

*1

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

*1

Schenker-Seino Co., Ltd.

*2

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

59
4
9

25