Summary of Consolidated Financial Results for the Fiscal Year Ended June 30, 2018 [Based on IFRS]
August 10, 2018
Company name: ZERO CO., LTD.
Stock Exchange Listing:Tokyo
Stock code:
9028
URL http://www.zero-group.co.jp/
Representative:
President & CEO
Takeo Kitamura
Inquiries:
Director and Manager of Group Strategies Headquarters
Toshihiro Takahashi
TEL 044-520-0106
Scheduled Date of Ordinary General meeting of Shareholders:
September 27, 2018 Scheduled date to commence dividend payments: September 28, 2018
Scheduled Date for the Submission of Annual Securities Report: September 28, 2018
Preparation of supplementary material on financial results:
No
Holding of financial results meeting:Yes (for analysts)(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the fiscal year ended June 30, 2018 (From July 1, 2017 to June 30, 2018)(1) Consolidated operating results (cumulative)
Sales revenue
FY2017FY2016

Millions of yen
81,376
79,134(Percentages indicate year-on-year changes)

Operating income

Profit before tax

Millions of yen
4,116
5,630

Millions of yen
4,094
5,568

%
2.8
1.7

%
∆26.9
4.4

Basic earnings of thisyear per share

Diluted earnings of this year
per share

Yen
128.33207.69Yen
128.18207.29FY2017FY2016(Reference) Investment gain / loss through equity method;

Net Income

%
∆26.5
1.4

Millions of yen
2,112
3,455

Profit ratio attributable toowners of parent company

%
∆38.8
∆0.0

Profit attributable toowners of parent
company

Total comprehensive
income of the fiscal
year

Millions of yen
2,129
3,455

Millions of yen
2,254
3,893

%
∆42.1
28.7

Total capital profit ratio before
tax

Sales revenue operating
profit ratio

%
10.7
15.1

%
5.1
7.1

%
10.0
18.0

FY2017: 7 million yen,

%
∆38.4
∆0.0

FY2016: 18 million yen(2) Consolidated financial position
Total assets

Total capitalMillions of yen
38,29038,007FY2017FY2016Equity attributable toowners of parent company

Equity ratio attributableto owners of parent
company

Equity per share
attributable to owners ofparent company

Millions of yen
22,10820,661

%
57.7
54.4

Yen
1,332.15
1,248.04

Millions of yen
22,11920,672(3) Consolidated cash flow position
Cash flow from operating
activities
Million yen
FY20173,015
FY2016
3,391

Cash flow from investing
activities
Million yen
2,890591

Cash flow from financing
activities
Million yen
2,953
2,623

Cash and cash equivalents at endof yearMillion yen
5,273
8,101

2. Cash dividends
Annual dividends per share
1st quarterend

2nd quarterend

Yen

3rd quarterend

Fiscal yearend

Yen

Total

Total dividends(Total)Dividend
payout ratio(consolidated)

Equity dividend
ratio attributableto owners ofparent company(consolidated)

%
25.0

%
4.5

25.0

2.5

FY2016

---

Yen
15.00

---

Yen
36.90

Yen
51.90

Million yen
874

FY2017

---

15.00

---

17.10

32.10

541

FY2018 (forecast)

---

15.00

---

18.10

33.10

---

3. Forecast of consolidated financial results for the year ending June 30, 2019 (From July 1, 2018 to June 30, 2019)
Sales revenue
Full year

Millions of yen
84,000Operating income%
3.2

Millions of yen
4,300(Percentages indicate year-on-year changes)
Profit attributable to
Basic earnings per shareowners of parent company

Profit before tax%
4.5

Millions of yen
4,280

%
4.5

Millions of yen
2,200

%
3.3

Yen
132.56

!(Note)(1) Changes in significant subsidiary companies during the current fiscal year (Changes in the specific subsidiary companies following changes in the scope of
consolidation):No
New ! Co. (Company name),
Exclusions ! Co. (Company name)(2) Changes in accounting policies, changes in accounting estimates! Changes in the accounting policies required by IFRS
" Changes in the accounting policies due to reasons other than # Changes in the accounting estimates(3) Number of issued shares (common shares)! Total number of issued shares at the end of theperiod (including treasury shares)" Number of treasury shares at the end of the period# Average number of shares during the period(total up to this year)

:
:
:

No
No
No

FY2017

17,560,242 shares

FY2016

17,560,242 shares

FY2017FY20171,030,367 shares
16,595,875 shares

FY2016FY2016

1,030,367 shares
16,635,602 shares!Earnings summary is not within the scope of audit by a certified public accountant or auditor!Explanation of the proper use of financial results forecast and other notes
1.
The earnings forecast, and other forward-looking statements herein are based on the information currently available to the Company and certain assumptions that
the Company considers reasonable. The actual results may differ significantly from these forecasts due to a wide range of factors such as economic status of the
major domestic and international markets or exchange rates fluctuation.
2.
At our company, business management is conducted on a consolidated basis; therefore, individual business results forecasts are not created.
3.
Our company is scheduled to hold an explanatory meeting for analysts on August 27, 2018. The accounts explanatory documents to be distributed during the
explanatory meeting will promptly be posted on our company’s website after the meeting.

{  Attached  Documents  –  Table  of  Contents
1.

Summary of operating results, etc. ----------------------------------------------------------------------------------------------------------- 2(1) Summary of operating results of the current fiscal year ---------------------------------------------------------------------------- 2(2) Summary of the financial status of the current fiscal year -------------------------------------------------------------------------- 3(3) Summary  of  the  cash  flow  of  the  current  fiscal year   -------------------------------------------------------------------------------- 4(4) Future forecast ---------------------------------------------------------------------------------------------------------------------------- 4

2.

Basic view regarding the selection of accounting standards ----------------------------------------------------------------------------- 4

3.

Consolidated financial statements and major notes ---------------------------------------------------------------------------------------- 5(1) Consolidated statement of financial position ------------------------------------------------------------------------------------------ 5(2) Consolidated statement of profit or loss------------------------------------------------------------------------------------------------ 7(3) Consolidated statement of profit or loss and other comprehensive income ------------------------------------------------------ 8(4) Consolidated statement of changes in equity ----------------------------------------------------------------------------------------- 9(5) Consolidated statement of cash flows ------------------------------------------------------------------------------------------------ 10(6) Notes on consolidated financial statements ----------------------------------------------------------------------------------------- 11(Notes on going concern assumption) ----------------------------------------------------------------------------------------------- 11(Segment information) ----------------------------------------------------------------------------------------------------------------- 11(Information per share) ---------------------------------------------------------------------------------------------------------------- 13(Major subsequent events) ------------------------------------------------------------------------------------------------------------ 13－

1 －1.   Summary  of  operating  results,  etc.
(1) Summary  of  operating  results  of  the  current  fiscal year
In  the  Japanese  economy  in  the  current  accounting  period  of  consolidation,  a  modest  recovery  continued,  and  even  though  the   overseas   economies   are   uncertain,   individual   consumption   is   improving   in   response   to   a   steady   employment/income  environment.  
Meanwhile,   in   the   automobile   industry,   the   total   number   of   new   car   sales   was   at   99.6%   when   compared   to   the   previous  consolidated   accounting   year   (hereinafter   referred   to   as   “the   same   period   one   year   ago”)   (Japan   Automobile   Dealers  Association  statistics  data),  the  turn  toward  a  negative  was  due  to  the  finished  vehicle  inspection  issue  in  addition  to  a  lull  in  the  new-model  effect,  resulting  in  a  loss  of  momentum.  While  the  number  of  used  cars  registered  increased  year-on-year,  the  used  car  market  slowed  due  to  the  decrease  in  new  car  sales.  
Under  such  environmental  conditions,  our  group  tried  to  promote  strategic  and  flexible  business  activities  corresponding  to  the  changes  in  the  market  environment  in  each  business  segment  and  develop  new  businesses,  create  services  with  high  added  value,   and   to   improve   quality.   Further,   we   are   continuing   with   compliance   activities,   activities   to   strengthen   group   synergy,  transportation   reform,   compliance   efforts   and   work   style   reform.   However,   the   business   environment   is   tough   in   the  distribution  industry  due  to  an  insufficient  amount  of  drivers  resulting  from  the  strained  supply  and  demand  of  labor,  increase  in  wages,  increase  in  fuel  expenses,  and  increase  in  compliance  costs.
As  a  result,  the  business  results  of  our  group  in  the   current      fiscal  year  are  as  follows:  sales  revenue  81,376  million  JPY  (year-on-year  102.8%),  operating  income  was  4,116  million  (year-on-year  73.1%).  In  addition,  gross  profit  was  4,094 million  (year-on-year  73.5%)  and  profit  attributable  to  the  owners  of  the  parent  company   for  this    fiscal  year  was  2,129 million  JPY  (year-on-year  61.6%).
[Unit  Sales  Data  Relating  to  Domestically-Distributed  Cars]
Domestic  Unit:  number  of  vehicles

07/2016  –  06/2017

Sales  volume  of  new  vehicles
Domestic  makers(Nissan  Motors)
Foreign  makers
Total  number  of  new  vehicle  sales

07/2017  –  06/2018

Year-on-year

4,904,841(598,512)
300,610
5,205,451

4,877,208(583,046)
306,894
5,184,102

99.4%(97.4%)
102.1%
99.6%*3

3,822,525

3,821,606

100.0%*4

3,016,270

3,073,852

101.9%

6,838,795

6,895,458

100.8%

208,683

204,094

97.8%

*1
*1
*2

Number  of  registered  used  vehicles
Registered  vehicles
Light  vehicles
Total  number  of  registered  used  vehiclesNumber  of  vehicles  recorded  as  being  *3permanently  disposed  ofExports

07/2016  –  06/2017

Domestic  automaker’s  new  vehicles

4,674,106*1

07/2017  –  06/2018

Year-on-year

4,858,533

103.9%

Used  vehicles  (registered  vehicles)
1,325,101
1,367,195103.2%*5*1  Calculated  based  on  the  statistics  provided  by  the  Japan  Automobile  Manufacturers  Association  *2  Calculated  based  on  the  statistics  provided  by  the  Japan  Automobile  Importers  Association  *3  Calculated  based  on  the  statistics  provided  by  the  Japan  Automobile  Dealers  Association  *4  Calculated  based  on  the  statistics  provided  by  the  Japan  Light  Motor  Vehicle  and  Motorcycle  Association  *5  Estimated  based  on  the  number  of  used  cars  to  be  exported  which  have  been  registered  for  deletion,  which  is  recorded  in  the  statistics  provided  by  the  Japan  Automobile  Dealers  Association[Retail  price  of  the  fuel]
National  average
Diesel  fuelRegular  gasoline

Unit:  yen  /  L
*6
*6

07/2016  –  06/2017
107.4
128.2

07/2017  –  06/2018
118.7
140.2

Year-on-year*6:  Calculated  from  the  statistics  of  Agency  of  Natural  Resources  and  Energy  (the  fuel  mainly  used  for  transportation  by  our  company  is  diesel  fuel)The  business  results  of  the  segments  are  as  follows.
<<Vehicle  Related  Business>>－

2 －110.5%
109.4%

The  main  business,  vehicle  transportation,  had  an  increase  in  income  due  to  a  reorganization  of  the  business  organization  to  a  system  that  promotes  customer  strategy,  regional  strategy,  and  product  strategy  and  the  implementation  of  various  strategies  such   as   customer   development   activities,   aimed   at   expanding   the   domestic   new   and   used   car   transportation   business;;   the  increase  was  especially  due  to  promoting  strengthening  used  vehicle  business  at  new  vehicle  dealers  as  well  as  measures  taken  in  response  to  the  expanded  influence  of  major  used  vehicle  dealers.  
With  regards  to  used  car  exports,  as  a  result  of  the  increased  revenue  from  reconstructing  the  system  aimed  to  review  the  sales  strategy,  there  was  an  increase  in  the  overall  vehicle  related  businesses.
Using  the  establishment  of  region  block  companies  in  the  vehicle  transportation  business,  we  are  continuing  to  speed  up  the  reorganization   of   transportation   systems   including   subsidiaries   and   subcontractors,   and   we   are   aiming   to   achieve   optimal  management  of  the  national  logistics  network  while  continuing  to  take  initiatives  to  ensure  thorough  cost  control.  Meanwhile,  due   to   the   strengthening   of   compliance   with   vehicle   restrictions   cabinet   orders,   the   promotion   of   initiatives   to   reform   work  styles,   and   the   rise   of   the   labor   cost   unit   price   and   hiring   costs   caused   by   a   lack   of   crewmembers,   in   the   handling   of   load  volumes  exceeding  transportation  capacity  in  March  through  beginning  of  April,  the  busy  season,  some  orders,  mostly  for  used  car  transportation,  were  temporarily  passed  up,  resulting  in  missed  opportunities.  Further,  the  sudden  rise  in  fuel  costs,  increase  in   depreciation   and   amortization   due   to   an   increase   in   the   number   of   cars   using   machine   parts,   and   the   finished   vehicle  inspection  issue  were  causes  for  reduced  profits,  and  profits  for  the  overall  vehicle  related  business  decreased.
As  a  result  of  the  above,  sales  revenue  was  59,515  million  JPY  (year-on-year  101.4%)  and  segment  profit  was  4,658  million  JPY  (year-on-year  78.4%).
<<Human  Resources  Business>>
Corporate  demand  for  human  resources  is  on  an  increasing  trend  in  conjunction  with  the  economic  recovery,  however  the  remarkable  rise  in  labor  costs  and  the  difficulty  in  hiring  new  personnel  is  worsening  in  major  cities.  Our  group  has  promoted  a shift   from   major   cities   where   labor   costs   are   high   to   regional   areas   and   a   strengthening   of   the   sales   system,   and   we   have  revised  our  product  portfolio  in  accordance  with  strategic  business  activities.  While  income  increased  due  to   driver  dispatch  remaining   steady   and   our   entrance   into   new   fields   such   as   nursing/care   and   housework   services,   profit   decreased   due   to  start-up  costs  in  conjunction  with  the  launching  of  our  temporary  staffing  business  in  the  airport  industry  as  well  as  increase  in  hiring  costs.  
As  a  result  of  these,  sales  revenue  was  16,489  million  JPY  (year-on-year  109.9%)  and  segment  profit  was  529  million  JPY  (year-on-year  80.1%).
<<General  Cargo  Business>>
In   the   freight   and   warehousing   business,   income   increased   due   to   the   further   cultivation   of   existing   customers   and   the  acquisition  of  new  customers,  however,  profits  decreased  due  to  the  impact  from  the  loss  of  coal  loading  spot  projects  as  well  as   decrease   of   vehicle   cargo   handling,   and,   consequently,   there   was   decrease   in   income   and   profits   overall   for   the   cargo  business.
As  a  result  of  these,  sales  revenue   was  5,371  million  JPY  (year-on-year  98.6%)  and  segment  profit   was  882  million  JPY  (year-on-year  98.6%).
Furthermore,  overall  company  expenses  (such  as  expenses  pertaining  to  our  company’s  our  management  department)  of  the  company   not   included   in   the   above   profit   and   loss   by   segments   are   accounted   for   in   the   “adjustment   amount”   as   per  the description   in   “3.   Consolidated   financial   statements   and   main   notes   (6)   Notes on consolidated financial statements(Segment Information),”  and  were  1,954  million  JPY.
(2) Summary of the financial status of the current fiscal year
Assets,  Liabilities,  and  Capital  Condition(Assets)
Current  assets  decreased  by  1,997  million  JPY  (10.11%)  in  comparison  with  the  end  of  the  previous  consolidated  fiscal  year  and  is  17,748million  JPY.
Mainly,  this  was  due  to  trade  receivables  and  other  receivables  increasing  by  964  million  JPY  and  cash  and  cash  equivalents  decreasing  by  2,828  million  JPY.
Non-current  assets  increased  by  2,280  million  JPY  (12.49%)  in  comparison  with  the  end  of  the  previous  consolidated  fiscal  year  and  is  20,542  million  JPY.
Mainly,  this  was  due  to  tangible  fixed  assets  such  as  vehicles  increasing  by  1,762  million  JPY  and  goodwill  and  intangible  asset  increasing  by  366  million  JPY.
As  a  result,  total  assets  increased  was  by  283  million  JPY  (0.75%)  in  comparison  with  the  end  of  the  previous  consolidated  fiscal  year  and  is  38,290  million  JPY.
(Liabilities)
Current  liabilities    decreased  by  431  million  JPY  (3.6%)  in  comparison  with  the  end  of  the  previous  consolidated  fiscal  year  and  is  11,687  million  JPY.
Mainly,  this  was  due  to  the  unpaid  corporate  income  tax  increasing  by  410  million  JPY  but  the  loan  amount  decreasing  by  －3 －

1,149  million  JPY.
Non-current  liabilities  decreased  by  732  million  JPY  (14.0%)  in  comparison  with  the  end  of  the  previous  consolidated  fiscal  year  and  is  4,483  million  JPY.
Mainly,  this  was  due  to  the  other  financial  liabilities  decreasing  by  490  million  JPY  and  the  liabilities  related  to  retirement  benefits  decreasing  by  240  million  yen.
As  a  result  of  the  above,  total  liabilities  decreased  by  1,163million  JPY  (6.7%)  in  comparison  with  the  end  of  the  previous  consolidated  fiscal  year  and  is  16,170  million  JPY.
(Capital)
Total  capital  increased  by  1,446  million  JPY  (7.0%)  in  comparison  with  the  end  of  the  previous  consolidated  fiscal  year  and  is  22,119  million  JPY.
Mainly,  this  was  due  to  earned  surplus  increasing  by  1,279  million  JPY  due  to  appropriation  of  profits  in  the  current  fiscal  year.
(3) Summary  of  cash  flow  for  the  current  fiscal year  Cash   and   cash   equivalents   (hereinafter   “Funds”)   at   the   end   of   the   consolidated   accounting   fiscal   year   decreased   by  2,828 million  JPY  in  comparison  to  the  end  of  the  previous  consolidated  fiscal  year  and  is  5,273  million  JPY.
Each  of  the  cashflow  conditions  in  the  consolidated  accounting  fiscal  year  and  the  causes  thereof  are  as  follows.  
(Cashflow  from  business  activities)
The  Funds  earned  as  a  result  of  the  business  activities  was  3,015  million  JPY  (income  of  3,391  million  JPY  for  the  previous  consolidated  accounting  year).
Main  breakdown  of  income:  2,112  million  JPY  in    fiscal  year  profit  and  1,499  million  JPY  in  depreciation  and  amortization  and   repayment   costs.   Main   breakdown   of   expenditure:   payment   of   1,572   million   JPY   in   corporate   income   tax,   etc.,   and  increased  amount  of  operating  receivables:  756  million  yen.
(Cashflow  from  investment  activities)
The  Funds  used  as  a  result  of  investment  activities   was  2,890  million  JPY  (expenditures  of  591  million  JPY  for  the  same  period  a  year  ago).
Main  breakdown  of  expenditure:  192 million  JPY  in  expenditure  due  to  the  acquisition  of  tangible  fixed  assets.  
(Cashflow  from  financing  activities)
The  Funds  used  as  a  result  of  financing  activities   was  2,953  million  JPY  (expense  of   2,623  million  JPY  for  the  previous  consolidated  accounting  year).
Main   breakdown   of   expenditure:   984   million   JPY   in   long   term   loan   repayments,   857   million   JPY   in   short   term   loan  repayments  725  million  JPY.
(4)

Future  forecast
In  the  next  consolidated  accounting  year  ,  it  is  expected  that  domestic  economy  will  gently  improve  due  to  financial  measures  by  the  government,  although  there  are  some  concerns  regarding  the  foreign  economic  trends  ,  such  as  trade  problems.
However,   in   the   automobile   industry,   concerns   for   market   shrinkage   cannot   be   eradicated   with   the   decrease   of   individuals  who  have  driving  license  due  to  the  decrease  in  population  and  people  not  utilizing  vehicles,  longer  average  utilization  years  due  to  improvements  in  automobile  durability  and  decrease  of  number  of  vehicles  being  owned  due  to  the  popularization  of  sharing  services.
Also,  in  the  distribution  industry,  it  is  expected  that  difficult  business  environment  will  continue  with  the  driver  insufficiency  caused   by   strained   supply   and   demand   of   labor   becoming   more   serious,   mid   to   long   term   fuel   price   increase,   compliance  response  such  as  vehicle  limitations  and  limitations  of  road  freight  handling,  etc.
Under   these   circumstances,   our   group   has   worked   on   sales   activities   that   are   conscious   of   the   regional   characteristics   of  locations  throughout  the  country  and  distribution  optimization;;  we  will  continue  to  work  on  entering  different  businesses  within  the   automobile   industry   and   pioneering   new   businesses   focusing   on   next   generation   mobility   preparing   for   the   shrinkage   of  automobile  market  within  Japan.
Region   blocking   within   the   vehicle   transportation   business   as   a   part   of   business   foundation   reconstruction   has   been  completed;;  we  will  ascertain  the  transportation  capacity  possessed  by  the  companies  within  our  group  to  promote  transportation  innovations   such   as   improving   transportation   efficiency   and   strengthening   revenue   management,   and   to   increase   the   group  synergistic  effects  by  maximizing  the  utilization  of  the  infrastructures  and  resources  of  our  group.
As  for  the  earnings  forecast  for  the  fiscal  year  2018,  we  expect  the  sales  revenue  to  be  84,000  million  JPY,  operating  profit  to  be  4,300  million  JPY,  profit  before  taxes  to  be    4,280  million  JPY,  and  the  profit  for  this  fiscal  year    attributable  to  owners  of  the  parent  company  to  be  2,200  million  yen.
  In  this  forecast  fiscal  year,  we  expect  last-minute  demand  for  new  car  sales  before  the  consumption  tax  raise,  accompanying  used   car   trading   increase   in   the   second   half   of   the   year.   To   follow   this   trend,   we   have   to   prepare   the   transportation   ability  beforehand  that  increase  cost  in  the  first  half  of  the  year.  As  a  result,  our  profit  may  have  unbalance  trend,  occurring  mainly  in  the  second  half  of  the  year.      *The  above  forecast  is  deemed  to  be  logical  by  our  company  based  on  the  information  obtained  at  this  point  by  our  company;;  the  actual  business  results  may  differ  compared  to  the  forecast.

2. Basic view regarding the selection of accounting standards
Our  company  group  voluntarily  applies  the  International  Financial  Reporting  Standards  (IFRS)  from  the  consolidated  financial  statements   in   the   June   of   2016   financial   statement   report   (70th   Term)   based   on   the   status   of   progress   of   foreign   business  development,   policies   of   Tan   Chong   International   Limited   Group   with   the   aim   of   improving   management   efficiency   and   quality  improvement   through   unification   of   financial   reporting   standards   as   well   as   to   improve   the   possibility   of   comparing   financial  information  internationally.
－

4 －

3.

Consolidated financial statements and major notes(1)  Consolidated statement of financial position(Unit:  million  yen)End  of  previous  consolidated  fiscal  year
(30  June  2017)End  of  consolidated  fiscal  year
(June  30,  2018)

8,101

5,273

10,195

11,160

532

512

195

131

719

670

19,745

17,748

9,064

10,827

2,499

2,865

3,628

3,511

927

964

1,837

1,943

83

122

222

307

18,262

20,54238,00738,290AssetsCurrent  assets
Cash  and  cash  equivalents,  etc.
Trade  and  other  receivables
Inventories
Other  financial  assets
Other  current  assets
Total  current  assets
Non-current  assets
Property,  plant  and  equipment
Goodwill,  Intangible  assets
Investments  properties
Investments  accounted  for  using  the  equity  methodOther  financial  assets
Other  non-current  assets
Deferred  tax  assets
Total  non-current  assets
Total  assets－

5 －(Unit:  Million  yen)End  of  previous  consolidated  End  of  consolidated  fiscal  year
fiscal  year
(June  30,  2018)(30  June  2017)
Liabilities  and  equity
Liabilities
Current  liabilities
Trade  and  other  payables
Borrowings
Other  financial  liabilities
Income  taxes  payable  etc.
Other  current  liabilities
Total  current  liabilities

6,320

6,436

1,851

702

555

723

885

1,296

2,505

2,530

12,118

11,687

358

262

2,339

1,849

2,078

1,838

331

313

107

219

5,215

4,483

17,334

16,170

3,390

3,390

3,271

3,305

△687

△687

283

416

14,403

15,682

20,661

22,10811

11

20,672

22,11938,00738,290Non-current  liabilities
Borrowings
Other  financial  liabilities
Retirement  benefits  liabilities
Other  non-current  liabilities
Deferred  tax  liabilities
Total  non-current  liabilities
Total  liabilities
EquityShare  capital
Capital  surplus
Treasury  stock
Other  components  of  equity  Retained  earnings  Total  equity  attributable  to  owners  of  the  parent
Non-controlling  interest
Total  equity
Total  liabilities  and  equity－

6 －(2)  Consolidated statement of profit or loss
（Unit:  Million  yen）
Previous  Consolidated  fiscal  year
(From  July  1,  2016
To  June  30,  2017)
Sales  revenue

Current  Consolidated  fiscal  year  
(From  July  1,  2017
To  June  30,  2018)

79,134

81,376△65,731△68,994

13,403

12,381△8,117△8,590

479

436

△134

△111

5,630

4,116

48

44

△91

△73

△18

7

5,568

4,094

Income  tax  expense△2,113△1,981

Fiscal  year  profit

3,455

2,112

3,455
--

2,129
△16

3,455

2,112

Basic  earnings  per  share  (yen)207.69128.33

Diluted  earnings  per  share  (yen)207.29128.18

Cost  of  sales
Gross  profit
Selling,  general  and  administrative  expenses
Other  income
Other  expenses
Operating  profit
Finance  income
Finance  costs
Share  of  profit  (loss)  of  investments  accounted  for  using  the  equity  method
Profit  before  tax

Fiscal  year  profit  attributable  toOwners  of  the  parent  company
Non-controlling  interest:
Fiscal  year  profit

Fiscal  year  earnings  per  share  －7 －(3) Consolidated statement of profit or loss and other comprehensive income（Unit:  Million  yen）
Previous  Consolidated  Financial  Year
(From  July  1,  2016
To  June  30,  2017)
Fiscal  year  profit

Current  Consolidated  Financial  Year  (From  July  1,  2017
To  June  30,  2018)

3,455

2,112

Re-measurement  of  defined  benefit  pension  plans

177

7

Total  items  that  will  not  be  reclassified  to  profit  and  loss

177

7

288

100

Share  of  other  comprehensive  income  of  investments  accounted  for  using  the  equity  method

△27

33

Total  items  that  may  be  reclassified  to  profit  and  loss

261

133

438

141

3,893

2,254

3,893

2,270

－

△16

3,893

2,254

Other  comprehensive  income
Items  that  will  not  be  reclassified  to  profit  and  loss

Items  that  may  be  reclassified  to  profit  and  loss
Assets  measured  at  fair  value  through  other  comprehensive  income

Other  comprehensive  income  for  the  year,  net  of  taxTotal  Fiscal  year    comprehensive  income  Total  Fiscal  year    comprehensive  income  attributable  to:Owners  of  the  parent  company
Non-controlling  interest
Fiscal  year  Comprehensive  income－

8 －(4) Consolidated statement of changes in equity
Previous  consolidated  fiscal  year  (From  July  1,  2016  to  June  30,  2017)(Unit:  Million  yen)
Equity  attributable  to  the  owner  of  the  parent  company
Components  of  other  capital

Balance  on  July  1,  2016

CapitalCapital  surplusTreasury  
stock

3,390

3,249

△561

Total  equity  No  attributable  Changes  in  controlling   Total  equity
Conversion  Profit to  the  owner  fair  value  interest
difference  Remeasurement   Total  of  Surplus of  the  parent  of availableof  foreign  of  defined   other  capital  company  for-sale  business  benefit  plan components
financial  activities
assets75△53-

Profit  of  this  fiscal  year  Other  comprehensive  income
Comprehensive  income  for the  fiscal  year  --Acquisition  of  treasury  stock-

17,741

--

3,455

3,455

3,455

438

438

288

177

438

△27

288

177

438

Capital  transaction  with  noncontrolling  shareholder△1

17Transfer  from  other  capital  components  to  retained  earnings

3,893

-

--

17,741

3,893

△142

△142

△869

△869

--

40

40

--

△1

-23

3,455

--

△142

Stock  compensation  transaction

Balance  on  June  30,  2017

11,640△27

Dividend  of  surplus

Total  transaction  etc.  with  
owner

21

△869

△177

△177

177

--

11

9
--

--

21

△125

--

--

△177

△177

△692

△973

11

△962

3,390

3,271

△687

△81

364

--

283

14,403

20,661

11

20,672Current  consolidated  fiscal  year  (From  July  1,  2017  To  June  30,  2018)(Unit:  Million  yen)
Equity  attributable  to  the  owner  of  the  parent  company
Components  of  other  capital

Balance  on  July  1,  2017

CapitalCapital  surplusTreasury  
stock

3,390

3,271

△687

Changes  in  ProfitConversion  fair  value   Remeasurement   Total  of  Surplusdifference  of availableof  defined   other  capital  of foreign  for-sale  benefit  plan components
operations
financial  assets

364

△81

-

283

  Profit  of  this  fiscal  year
Other  comprehensive  income
Comprehensive  income  for  the  fiscal  year

--

--

--

33

100

7

141

33

100

7

141

Transaction  ect.  with    no  controlling  interest

Balance  at  30  June  2018

20,661

11

20,672

2,129

2,129

△16

2,112

141

141

2,270

△857

△857

△857

35

35

35

△1

△1

Transfer  from  other  capital  components  to  retained  earnings
Total  transaction  etc.  with  owner

14,403

2,129

Dividend  of  surplus
Stock  compensation  transaction.

No  Total  Equity  attributable   controlling   Total  equity
to  the  owner   interestof  the  parent  company  

△7

△7

7

-

△16

16

2,254

14

-

-

34

-

-

-

△7

△7

△850

△823

16

△807

3,390

3,305

△687

△47

464

-

416

15,682

22,10811

22,119－9 －(5) Consolidated statement of cash flows(Unit:  Million  yen)Previous  Consolidated  Fiscal  Year
(From  July  1,  2016

Current  Consolidated  Fiscal  Year  
(From  July  1,  2017

To  June  30,  2017)

To  June  30,  2018)

Cash  flows  from  operating  activities:  Fiscal  year  profit

3,455

2,112

Depreciation  and  amortization  

1,118

1,499

Interest  income  and  dividends

△16

△14

Interest  expenses

67

65

Share  of  (profit)  loss  of  investments  accounted  for  using  the  equity  method18△7Corporate  income  tax  expenses

2,113

1,981

(Increase)  decrease  in  trade  receivables  (△  indicates  increase)

△978

△756

(Increase)  decrease  in  inventories  (△  indicates  increase)

248

20

Increase  (decrease)  in  trader  payables  (△  indicates  decrease)

387

△362

Increase  (decrease)  in  retirement  benefit  liabilities  (△  indicates  decrease)

△132

△214

Other  

△216

314

Sub  total  

6,064

4,639

Interest  and  dividend  received  Interest  paid  Income  taxes  paid  Net  cash  provided  by  (used  in)  operating  activities  

16

14

△67

△65

△2,622△1,572

3,391

3,015

△546

△1,902

Cash  flows  from  investing  activities:
Payments  for  property,  plant  and  equipment
Proceeds  from  sales  of  property,  plant  and  equipment

76

19

Payments  for  intangible  assets

△278

△257

Payments  for  loans  receivable

△11

△21

Proceeds  from  collection  of  loans  receivable

43

46

Expenditure  for  Acquisition  of  business

－

△697

Other

124

△77

△591

△2,890Net  change  in  short-term  borrowings  (△  indicates  decrease)

105

△725

Proceeds  from  long-term  borrowings

114

225

Repayment  of  long-term  borrowings△1,244△984

Repayment  of  finance  lease  liabilities

△595

△625

Dividends  paid

△869

△857

Payments  due  to  treasury  stock  acquisition  

△142

--

Net  cash  provided  by  (used  in)  investing  activities
Cash  flows  from  financing  activities

Proceeds  from  payments  from  non-controlling  shares

9Net  cash  provided  by  (used  in)  financing  activities

14△2,623△2,953176△2,828Cash  and  cash  equivalents  at  the  beginning  of  the  fiscal  year

7,924

8,101

Cash  and  cash  equivalents  at  the  end  of  the  fiscal  year

8,101

5,273

Increase  (decrease)  in  cash  and  cash  equivalents,  net  (△  indicates  decrease)

－

10 －

(6) Notes on consolidated financial statements(Notes on going concern assumption)
N/A(Segment  Information)(1) Summary  of  report  segment
With   the   report   segment   of   our   company   group,   separate   financial   information   from   our   company   group’s   element   is  obtainable;;   the   highest   organ   of   decision-making   regularly   conducts   considerations   to   determine   the   corporate   resource  allocation  as  well  as  to  evaluate  the  business  results.
Our  company  group  collects  the  business  segments  based  on  the  form  of  management  organization  and  the  characteristics  of  the  services,  and  deems  “automobile  related  businesses”,  “human  resources  businesses”,  and  “general  cargo  businesses”  to  be  the  report  segments.
Main  services  attributable  to  each  report  segment
Segment

Main  services

Automobile  related  businesses

Automobile  transportation,  maintenance,  used  vehicle  auction,  used  vehicle  export,  etc.

Human  resource  businesses

Dispatching  drivers,  operation  of  home-use  automobile  management,  etc.

General  cargo  businesses

Transportation  /  storage  of  general  consumer  goods,  cargo  handling  of  coal,  slag,  etc.,  warehouse  lease,  etc.

(2) Sales  revenue,  profit  and  loss,  and  capital  for  each  report  segment  as  well  as  amounts  of  other  items
The  sales  revenue,  profit  and  loss,  capital,  and  amounts  of  other  items  for  each  report  segment  of  our  company  group  are  as  follows.
Also,  the  sales  revenue  between  segments  is  based  on  the  market  prices.
Previous  consolidated  fiscal  year  (From  July  1,  2016  to  June  30,  2017)(Unit:  Million  yen)
Human  resources  business

General  cargo  business

58,687

15,0005,446

79,134－

79,134

80

789

238

1,107

△1,107－58,767

15,7895,685

80,242△1,107

79,134

Segment  Profit  (Operating  Income)

5,938

661

895

7,495

△1,864

5,630

Segment  assets

19,328

5,433

6,801

31,562

6,444

38,007

1,732

195

57

1,984

35

2020

760

57

212

1,030

88

1,118

Revenue  to  external  customers
Revenue  between  segments
Total

Total

Adjustment  amount  (Note)  1

Amount  recorded  on  consolidated  financial  statements

Automotive  related  business

Other  items
Increased  amount  in  non-liquid  assets  (Note)  2
Depreciation  expenses  and  amortization  expenses(Note)  1.  The  adjustment  amounts  are  as  follows.
(1) Adjustment  for  segment  profit  △1,864  million  includes  corporate  expenses  △1,864  million  yen  and  intersegment  transaction  elimination  △0 million  yen.  Corporate  expenses  are  expenses  related  to  the  management  department  of  the  Company  not  attributable  to  the  reporting  segments.
(2) The  adjustment  amount  of  6,444  million  in  the  segment  asset  includes  company-wide  assets  of  9,622  million  yen  not  allocated  in  each  of  the  report  segments  as  well  as  the  elimination  amount  of  △3,177  million  for  the  transaction  between  segments.
(3) The  adjustment  amount  within  the  other  items  are  related  to  company-wide  assets  that  are  not  allocated  in  each  of  the  report  segments.
(Note)  2.  In  Non-current  assets,  financial  assets  and  deffered  tax  are  not  included

－

11 －

Current  consolidated  fiscal  year  (From  July  1,  2017  to  June  30,  2018)  (Unit:  Million  yen)
Automotive  related  business
Revenue  to  external  customers
Revenue  between  segments
Total
Segment  Profit  (Operating  Income)

59,51566
59,582
4,658

Human  resources  business

General  cargo  business

16,4891,199
17,689
529

5,371
412
5,783
882

Total

81,376
1,678
83,055
6,070

Adjustment  amount  (Note)  1－△1,678△1,678△1,954

Amount  recorded  on  consolidated  financial  statements
81,376－
81,376
4,116

Segment  assets
21,2946,304
6,874
34,472
3,817
38,290
Other  items
Increased  amount  in  non-liquid  assets  (Note)  2
3,280
155
73
3,508
210
3,719
Depreciation  expenses  and  amortization  
1,108
85
204
1,397
101
1,499
expenses(Note)  1.  The  adjustment  amounts  are  as  follows.
(1) Adjustment  for  segment  profit  △1,954  million  includes  corporate  expenses  △1,954  million  yen  and  intersegment  transaction  elimination  0  million  yen.  Corporate  expenses  are  expenses  related  to  the  management  department  of  the  Company  not  attributable  to  the  reporting  segments.
(2) The  adjustment  amount  of  3,817  million  in  the  segment  assets  includes  company-wide  assets    of  9,193  million  yen  not  allocated  in  each  of  the  report  segments  as  well  as  the  elimination  amount  of  △5,376million  for  the  transaction  between  segments.
(3) The  adjustment  amount  within  the  other  items  are  related  to  company-wide  assets  that  are  not  allocated  in  each  of  the  report  segments.
(Note)  2.  In  Non-current  assets,  financial  assets  and  deffered  tax  are  not  included(3) Information  by  regions(1)  The  details  by  destination  regions  of  sales  revenue  from  external  clients  is  as  follows.
Previous  consolidated  fiscal  year  (From  July  1,  2016  to  June  30,  2017)
Japan

Asia
73,087

185(Units:  million  yen)Total
79,13478(Units:  million  yen)Total
81,376

Other
5,860

Current  consolidated  accounting  year  (From  July  1,  2017  to  June  30,  2018)
Japan

Asia
75,586

Other
5,711

(2)  Non-current  assets
There  are  no  applicable  matters  since  there  are  no  non-current  assets  outside  of  Japan.
(4) Information  for  the  main  customers
Previous  consolidated  fiscal  year  (From  July  1,  2016  to  June  30,  2017)(Units:  million  yen)
Title  or  name  of  the  customer
Sales  revenue
Affiliated  segment
Nissan  Motor  Group
19,845
Automobile  related  business(Note)  The  sales  result  of  Nissan  Motor  Group  is  the  sum  of  sales  results  to  Nissan  Motor  Co.,  Ltd.,  Autech  Japan  Inc.,  and  all  Nissan  Motor  distributors  throughout  the  country.
Current  consolidated  accounting  year  (From  July  1,  2017  to  June  30,  2018)(Units:  million  yen)
Title  or  name  of  the  customer
Sales  revenue
Affiliated  segment
Nissan  Motor  Group
19,853
Automobile  related  business(Note)  The  sales  result  of  Nissan  Motor  Group  is  the  sum  of  sales  results  to  Nissan  Motor  Co.,  Ltd.,  Autech  Japan  Inc.,  and  all  Nissan  Motor  distributors  throughout  Japan.

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12 －

(Information  per  share)
The  calculation  of  the  basic  earnings  per  share  and  the  diluted  earnings  per  share  in  the  previous  consolidated  fiscal  year  and  the  current  consolidated  fiscal  year  are  as  follows.
(1)

Basic  earnings  per  share

Profits  of  the  current  fiscal  year  attributable  to  the  owners  of  parent  company  (million  yen)
Weighted  average  number  of  issued  ordinary  shares  (thousand  shares)  Basic  earnings  per  share  (Yen)(2)

Previous  Consolidated  Financial  Year
(From  July  1,  2016
To  June  30,  2017)
3,455

Current  Consolidated  Financial  Year  (From  July  1,  2017
To  June  30,  2018)
2,129

16,635

16,595207.69128.33

Diluted  earnings  per  share
Previous  Consolidated  Financial  Year
(From  July  1,  2016
To  June  30,  2017)

Net  income  used  in  the  calculation  of  net  income  per  share  after  dilution  (million  yen)
Effect  of  potentially  dilutive  ordinary  shares
Board  Benefit  Trust  (BBT)  (thousand  shares)
Weighted  average  number  of  shares  after  dilution  (thousand  shares)  Diluted  earnings  per  share  (Yen)(Major subsequent events)
N/A

－

13 －

Current  Consolidated  Financial  Year  (From  July  1,  2017
To  June  30,  2018)

3,455

2,129

32

18

16,667

16,614207.29128.18