thThe following is an English translation of the Notice of the 154 Ordinary General Meeting of
Shareholders of Yamato Holdings Co., Ltd. The Company provides this translation for your reference
and convenience only and without any warranty as to its accuracy.

Stock code: 9064
June 3, 2019

Yamato Holdings Co., Ltd.
16-10, Ginza 2-chome, Chuo-ku, Tokyo
President: Yutaka Nagao
To Our Shareholders

Notice of the 154th Ordinary General Meeting of Shareholders
You are cordially invited to attend the 154th Ordinary General Meeting of Shareholders of
Yamato Holdings Co., Ltd. (hereinafter “the Company”), which will be held as described
below.
If you are unable to attend the meeting in person, you can exercise your voting
rights by mail or by electromagnetic means such as the Internet. Please review
the “Reference Documents for the General Meeting of Shareholders,” andexercise your voting rights. All votes must be received by 5:00 p.m., Monday, June24, 2019.

When exercising voting rights by attending the meeting in person
Please bring the enclosed Voting Rights Exercise Form and present the form to theperson at reception.
When exercising voting rights by mailPlease indicate your vote “for” or “against” each of the items on the enclosed Voting
Rights Exercise Form, and return the form to the Company by 5:00 p.m., Monday, June24, 2019.
When exercising voting rights via the Internet
Please review the “Exercise of Voting Rights via the Internet” on page 3 and enter yourvote for each of the items by 5:00 p.m., Monday, June 24, 2019.

1

The 154th Ordinary General Meeting of Shareholders
1. Date and Time:

Tuesday, June 25, 2019, 10:00 a.m. (The reception desk will
open at 9:00 a.m.)

2. Venue:

Ginza Blossom (Chuo Kaikan) Hall
15-6, Ginza 2-chome, Chuo-ku, Tokyo(Please note that the venue of the 154th Ordinary General
Meeting of Shareholders has been changed from last year, andrefer to “Access to the Venue” at the end of the Notice.)

3. Objectives of Meeting
Matters to be reported:
1.
Report of the Business Report, the Consolidated Financial
Statements, and Audit Reports of the Accounting Auditor andthe Audit & Supervisory Board for the Consolidated Financial
Statements for the 154th Fiscal Year (from April 1, 2018 to March
31, 2019)
2.

Report of the Non-consolidated Financial Statements for the154th Fiscal Year (from April 1, 2018 to March 31, 2019)

Matters to be resolved:
Agenda Item 1:
Election of Eight (8) Directors
Agenda Item 2:
Election of One (1) Audit & Supervisory Board Member
Agenda Item 3:Election of One (1) Substitute Audit & Supervisory Board
Member
4. Items Decided for the Convocation of Meeting(1) Treatment of duplicate voting
In the event that you exercise your voting rights, both by mail and via the Internet
etc., the vote via the Internet etc. shall be upheld as the valid exercise of yourvoting rights. In the event of multiple voting via the Internet etc., your last voteshall be upheld as the valid exercise of your voting rights.
(2) Diverse exercise of voting rights
In the event that you exercise your voting rights diversely, you are required tosend notice providing the details and reasons in writing. Please note that you
must ensure the notice arrives three days prior to the day of the General Meetingof Shareholders.
◎

If any changes have been made to the items on the attached documents to this convocation notice
and/or the Reference Documents for the General Meeting of Shareholders, such changes will be
posted on our website.
Website: http://www.yamato-hd.co.jp/

2

Exercise of Voting Rights via the Internet
Method of exercise of voting rights by scanning QR code: “Smart Vote”
You can log in the Website for Exercising Voting Rights by scanning the QR code
without entering your exercise of voting rights code and password.
1. Please scan QR code provided at the bottom right of the Voting Rights
Exercise Form.
* QR Code is registered trademarks of DENSO WAVE INCORPORATED.

2. Please follow the directions that appear on the screen to vote “for” or“against” each of the items.
Note that exercising voting rights by using “Smart Vote” method is available
only once.
If you need to change your votes after excising your voting rights, please log in the voting website fora personal computer by using your voting rights exercise code and password provided on the Voting
Rights Exercise Form and exercise your voting rights again.
* If you rescan the QR code, you can access the Website for Exercising Voting Rights for a personal
computer.

Method of exercise of voting rights by entering exercise of voting rights code andpassword
1. Please access the Website for Exercising Voting Rights.
https://soukai.mizuho-tb.co.jp/
2. Please enter your “exercise of voting rights code” provided on the back of
the Voting Rights Exercise Form.
3. Please enter your “password” provided on the back of the Voting Rights
Exercise Form.
4. Please follow the directions that appear on the screen to vote “for” or“against” each of the items.
Internet Help Dial: Securities Agent Dept. ofMizuho Trust & Banking Co., Ltd.

If you have any inquiries about the operation of apersonal computer or a smartphone regarding theexercise of voting rights via the Internet, contact
the following:

0120-768-524 (toll-free only from Japan)
Business hours: 9 a.m. to 9 p.m. (JST)on weekdays◎ Institutional investors may use the electronic voting platform operated by ICJ, Inc.

3

Reference Documents
for the General Meeting of Shareholders
Agenda Item 1.

Election of Eight (8) Directors

The terms of all the nine (9) Directors will expire at the close of this General Meeting of
Shareholders. Accordingly, we would like to propose the election of eight (8) Directors.
The following are the candidates for Directors.
Please note that Masakatsu Mori, Mariko Tokuno, Yoichi Kobayashi and Shiro Sugata are
candidates for Outside Directors.

No.

1

2

3

Name of Candidate

Masaki Yamauchi
Yutaka Nagao

Haruo Kanda

Attributes of Candidate

Current Positionat the Company

Reelection

Directorand Chairman

Reelection

Representative
Director,
President andExecutive Officer

Reelection

Representative
Director,
Vice President andExecutive Officer

4

Kenichi Shibasaki

Reelection

Representative
Director,
Vice President andExecutive Officer

5

Masakatsu Mori

Reelection
OutsideIndependent

Director

6

Mariko Tokuno

Reelection
OutsideIndependent

Director

7

Yoichi Kobayashi

Reelection
OutsideIndependent

Director

8

Shiro Sugata

New election Outside
Independent

New election New candidates for Directors

4

Board of Directors
Meetings
19/19(100%)
19/19(100%)

18/19
(95%)

16/16
(100%)
19/19(100%)
18/19
(95%)
16/16

Reelection Candidates for Directors to be reelected

Independent officers

Attendance to the(100%)

Outside Candidates for Outside Directors

[Reference]“Policies and procedures for the Board of Directors in appointing and dismissing senior
management members and nominating candidates for positions as Directors and Audit& Supervisory Board Members”
Nominations are made following deliberations on appointment and dismissal of senior
management members by the Nomination and Compensation Committee, which comprises overhalf Outside Officers, under the policy of appointing candidates with abundant experience andconsiderable insight relating to corporate management and business promotion, a sense ofhumanity from observing and evaluating from diverse perspectives, ability to grasp the essenceof the issues facing the Company, and capabilities that will enhance our management structure.

5

No.

Name of Candidate(Date of Birth)

Brief Background, Position and Responsibility at the Company(Important Concurrent Positions at Other Organizations)Apr. 1984
Apr. 2005
Apr. 2005
Nov. 2005
Nov. 2005
Mar. 2007
Mar. 2007
May 2007
Apr. 2008
Reelection
Apr. 2011
Masaki Yamauchi(Jan. 11, 1961)
1

Jun. 2011
Apr. 2015

Joined the Company
Executive Officer
President, Tokyo Regional Office
Executive Officer of Yamato Transport Co., Ltd.
General Manager of Human Resources andAdministration
Executive Officer of the Company
Responsible for Human Resources Strategy
Responsible for Management Strategy
Representative Director, President and Executive
Officer of Yamato Logistics Co., Ltd.
Representative Director, President and Executive
Officer of Yamato Transport Co., Ltd.
Director and Executive Officer of the Company
Representative Director, President and Executive
Officer
Director and Chairman (current)

Attendance to theBoard of Directors Apr. 2019
Meetings(Important Concurrent Positions at Other Organizations)
FY2019/3:
None
19/19 (100%)[Reasons for nomination as a candidate for Director]
Masaki Yamauchi possesses experience and achievements
developed in the course of taking on leadership roles in Groupmanagement. In that regard, he had been acting as Representative
Director, President and Executive Officer of the Company from April
2015 to March 2019, after having served as Representative Director
and President of the Company’s subsidiary Yamato Logistics Co.,
Ltd., and as Representative Director and President of the Company’s
subsidiary Yamato Transport Co., Ltd. Accordingly, in order tomaintain and enhance an entire management balance as Director
and Chairman, the Company proposes his reelection as Director.

6

Number of
SharesOwned

39,900No.

Name of Candidate(Date of Birth)

Brief Background, Position and Responsibility at the Company(Important Concurrent Positions at Other Organizations)Apr. 1988
Apr. 2004
Apr. 2006
Apr. 2009
Apr. 2010

Reelection
Yutaka Nagao(Aug. 31, 1965)
2

Apr. 2013
Apr. 2015
Apr. 2015
Jun. 2017
Apr. 2019

Joined the Company
Regional Branch Manager of Yamaguchi Regional
BranchRegional Branch Manager of Saitama Regional
Branch of Yamato Transport Co., Ltd.
General Manager of TSS Sales Promotion Office
Executive Officer and President of Kanto Regional
OfficeManaging Executive Officer
Executive Officer of the Company
Representative Director, President and Executive
Officer of Yamato Transport Co., Ltd.
Director and Executive Officer of the Company
Representative Director, President and Executive
Officer (current)

Attendance to theBoard of Directors(Important Concurrent Positions at Other Organizations)Meetings
None
FY2019/3:
19/19 (100%)[Reasons for nomination as a candidate for Director]
Yutaka Nagao possesses experience and achievements developedin the course of taking on leadership roles in the Group’s core, theDelivery Business. In that regard, he has acted as Managing
Executive Officer and Representative Director and President of theCompany’s subsidiary Yamato Transport Co., Ltd, and Director andExecutive Officer of the Company. Since April 2019, he has been
serving as Representative Director, President and Executive Officerof the Company. Accordingly, in order to enhance the managementof the Group and promote its growth, the Company proposes his
reelection as Director.

7

Number of
SharesOwned

12,700No.

Name of Candidate(Date of Birth)

Brief Background, Position and Responsibility at the Company(Important Concurrent Positions at Other Organizations)Jan. 1985
Apr. 2004
Aug. 2005
Nov. 2005
Jul. 2006
Apr. 2008
Jun. 2008
Apr. 20133

Reelection

Apr. 2014

Haruo Kanda(Sep. 26, 1952)

Apr. 2015

Joined the Company
General Manager of Human Resources
Executive Officer
Executive Officer of Yamato Transport Co., Ltd.
Managing Executive Officer
Managing Executive Officer of the Company
Representative Director and Managing Executive
Officer
Representative Director and Senior Managing
Executive Officer
Responsible for Human Resources Strategy,
Network Strategy, Legal Affairs, CSR Strategy and
Audit
Representative Director, Vice President andExecutive Officer
Executive Assistant to President on Corporate
Management, in charge of Regional Co-creation
Project (current)

Attendance to the Apr. 2019
Board of Directors
Meetings
FY2019/3:(Important Concurrent Positions at Other Organizations)
18/19 (95%)
None[Reasons for nomination as a candidate for Director]
Haruo Kanda possesses experience and achievements developed in
the course of taking on leadership roles in Group management. In
that regard, he has been acting as Representative Director, Vice
President and Executive Officer of the Company since April 2015,
after having served as Executive Officer of the Company’s subsidiary
Yamato Transport Co., Ltd., and subsequently serving as an
executive officer supervising administrative departments responsible
for human resources strategy, network strategy, legal affairs, CSR
strategy and audit. Accordingly, the Company proposes his
reelection as Director.

8

Number of
SharesOwned

29,200No.

Name of Candidate(Date of Birth)

Brief Background, Position and Responsibility at the Company(Important Concurrent Positions at Other Organizations)Apr. 1980
Jun. 1997
Jun. 1999
Apr. 2003
Feb. 2006
Apr.
Apr.
Apr.
Apr.

2006
2012
2016
2017

Reelection
Kenichi Shibasaki(Oct. 16, 1955)
4

Jun. 2018
Apr. 2019

Joined the Company
Regional Branch Manager of Saitama Regional
BranchGeneral Manager of Education Division
General Manager of Operation Division
Representative Director, President and Executive
Officer of Yamato Financial Co., Ltd.
Executive Officer of the Company
Managing Executive Officer
Senior Managing Executive Officer
Responsible for Financing Strategy and
Coordinator-General of Investor Relations Strategy
Director and Senior Managing Executive Officer
Representative Director, Vice President andExecutive Officer (current)
Supervisor of ESG Strategy, Marketing Strategy,
Public Relations Strategy, Financing Strategy,
Investor Relations Strategy, and Legal Strategy, andresponsible for Internal Audit (current)

Apr. 2019
Attendance to theBoard of Directors
Meetings
FY2019/3:(Important Concurrent Positions at Other Organizations)
16/16 (100%)
None[Reasons for nomination as a candidate for Director]
Kenichi Shibasaki possesses experience and achievements
developed in the course of taking on leadership roles in Groupmanagement. In that regard, he had been acting as Director andSenior Managing Executive Officer since June 2018, after having
served as Representative Director, President and Executive Officerof the Company’s subsidiary Yamato Financial Co., Ltd. andManaging Executive Officer and Senior Managing Executive Officerof the Company. Since April 2019, he has been serving as
Representative Director, Vice President and Executive Officer.
Accordingly the Company proposes his reelection as Director.

9

Number of
SharesOwned

26,500No.

Name of Candidate(Date of Birth)

Brief Background, Position and Responsibility at the Company(Important Concurrent Positions at Other Organizations)Apr. 1969
May 1972
Sep. 1981
Feb. 1989

Reelection
OutsideIndependent

5

Masakatsu Mori(Jan. 22, 1947)

Apr. 2003
Sep. 2007
Oct. 2009
Apr. 2013
Jun. 2013
Nov. 2013
Apr. 2018

Joined Arthur Andersen & Co. (currently: Accenture
Japan Ltd)
Qualified as Certified Public Accountant
Partner (business partner) of Arthur Andersen & Co.
(currently: Accenture Japan Ltd)
President of Andersen Consulting (currently:
Accenture Japan Ltd)Board Member of Andersen Consulting (Global)(currently: Accenture)
Representative Director and Chairman of Accenture
Japan Ltd
Corporate Advisor of Accenture Japan Ltd
President of the International University of Japan(IUJ)
Senior Advisor of IUJDirector of the Company (current)
Vice Chairman of IUJSenior Advisor of IUJ (current)

Number of
SharesOwned

11,200Attendance to theBoard of Directors
Meetings
FY2019/3:(Important Concurrent Positions at Other Organizations)
19/19 (100%)
Senior Advisor of the International University of Japan
Outside Director of Stanley Electric Co., Ltd.
Outside Director of Kirin Holdings Company, Limited[Reasons for nomination as a candidate for Outside Director]
Masakatsu Mori possesses abundant experience and considerable
insight as a corporate manager. Accordingly, the Company has
determined that his advice regarding overall management of theCompany will contribute to further enhancing our management
structure, and proposes his reelection as Outside Director.

Reelection
OutsideIndependent

6

Mariko Tokuno(Oct. 6, 1954)

Jan. 1994
Apr. 2002
Mar. 2004
Aug. 2010
Sep. 2013
Jun. 2017

Joined Louis Vuitton Japan KK
Senior Director for Sales Administration
Vice President of Tiffany & Co. Japan Inc.
Representative Director and President of ChristianDior Japan KK
Representative Director, President and CEO of
Ferragamo Japan KK
Director of the Company (current)(Important Concurrent Positions at Other Organizations)
Attendance to the Outside Director of Happinet Corporation
Board of Directors Outside Director of Mitsubishi Materials Corporation
Meetings[Reasons for nomination as a candidate for Outside Director]
FY2019/3:
Mariko Tokuno possesses abundant experience and considerable
18/19 (95%)
insight as a corporate manager. Accordingly, the Company has
determined that her advice regarding overall management of theCompany will contribute to further enhancing our management
structure, and proposes her reelection as Outside Director.

10

1,000

No.

Name of Candidate(Date of Birth)

Reelection
OutsideIndependent

7

Yoichi Kobayashi(Jul. 21, 1949)

Brief Background, Position and Responsibility at the Company(Important Concurrent Positions at Other Organizations)Apr. 1973

Joined ITOCHU Corporation

Jun. 2004

Executive Officer

Apr. 2006

Managing Executive Officer

Jun. 2006

Representative Executive Managing Director

Apr. 2008

Representative Senior Managing Director

Apr. 2011

Representative Director and Executive Vice
President

Apr. 2015

Senior Advisor

Apr. 2016

Vice Chairman (current)

Number of
SharesOwned

600

Jun. 2018
Director of the Company (current)
Attendance to theBoard of Directors (Important Concurrent Positions at Other Organizations)Meetings
Vice Chairman of ITOCHU Corporation
FY2019/3:[Reasons for nomination as a candidate for Outside Director]
16/16 (100%)
Yoichi Kobayashi possesses abundant experience and considerable
insight as a corporate manager. Accordingly, the Company has
determined that his advice regarding overall management of theCompany will contribute to further enhancing our management
structure, and proposes his reelection as Outside Director.
Apr. 1972
Jan. 1993
Jun. 2000
Apr. 2004
Jun. 2004
New election
OutsideIndependent
8
Shiro Sugata(Nov. 17, 1949)

Mar. 2005
Oct. 2014
Jun. 2016
Jul. 2017

Joined USHIO INC.
President of BLV LICHT- UND VAKUUMTECHNIK
GmbH
Director and Corporate Senior Vice President of
USHIO INC.
Director and Corporate Executive Vice President
Representative Director and Corporate Executive
Vice President
President and CEO
Director and Corporate Advisor
Corporate Advisor
Special Corporate Advisor (current)0(Important Concurrent Positions at Other Organizations)
Special Corporate Advisor of USHIO INC.
Outside Director of JSR Corporation
Outside Director of Yokogawa Electric Corporation[Reasons for nomination as a candidate for Outside Director]
Shiro Sugata possesses abundant experience and considerable
insight as a corporate manager. Accordingly, the Company has
determined that his advice regarding overall management of theCompany will contribute to further enhancing our management
structure, and proposes his election as Outside Director.

Notes:
1. There are no particular vested interests between the Company and the candidates.
2. Additional information regarding the candidates of Outside Directors is as follows.
(1)
Independent officers
The Company appointed Masakatsu Mori, Mariko Tokuno and Yoichi Kobayashi as independent officers
provided for under the provisions of the Tokyo Stock Exchange, Inc. and registered the individuals as

11such with that exchange. The Company plans on having the officers keep their position if their reelection
is approved. In addition, if the election of Shiro Sugata is approved, the Company will appoint him as anindependent officer and register the individual as such with that exchange.
Masakatsu Mori, Mariko Tokuno, Yoichi Kobayashi and Shiro Sugata satisfy the requirements for Criteria
for Determining Independence of the Company on page 16.
(2)
The number of years as Outside Director of the Company
Masakatsu Mori, Mariko Tokuno and Yoichi Kobayashi have been serving as the Company’s Outside
Directors for six years, two years and one year, respectively, as of the closing of this General Meeting of
Shareholders.
(3)
Inappropriate conducts of business occurred and corrective and preventive measures implemented
against such conducts during the past five years at another company at which a candidate served as adirector(1) Since June 2016, Mariko Tokuno has been serving as an Outside Director of Mitsubishi Materials
Corporation. During this time, cases have been discovered in which said Mitsubishi Materials
Corporation’s consolidated subsidiaries Mitsubishi Cable Industries, Ltd., Mitsubishi Shindoh Co., Ltd.,
Mitsubishi Aluminum Co., Ltd., Tachibana Metal MFG Co., Ltd, and Diamet Corporation manufactured
and sold products that deviated from customer standards or internal company specifications due tomisconduct, including the rewriting of data. In addition, Mitsubishi Materials Corporation also received
revocation of JIS certification for copper slag aggregate manufactured at its Naoshima Smelter &Refinery.
Although she was unaware of each of these cases until they were revealed, as an Outside Director at
Mitsubishi Materials Corporation she has routinely spoken out from the perspective of enhancing
governance structure. Since each of these cases was revealed, she has been conducting investigations
relating to these cases, identifying root causes, and providing advice on measures to prevent
reoccurrences. After Mitsubishi Materials Corporation Group formulated measures etc. to enhance
governance structure, she has been making efforts to further enhance governance structure byoverseeing the progress of these measures and providing the Board of Directors with necessarycomments and advice regarding issues and the like.
(2) From June 2006 to March 2015, Yoichi Kobayashi served as a Representative Director of ITOCHU
Corporation. In January 2018, ITOCHU Corporation received a cease and desist order from the Japan
Fair Trade Commission for activities in breach of Japan’s Antimonopoly Act regarding its sales of
uniforms to the West Japan Railway Company during the period from April 2014 to September 2016.
Additionally, in July 2018, ITOCHU Corporation received a cease and desist order from the Japan Fair
Trade Commission for activities in breach of Japan’s Antimonopoly Act regarding its sales of uniforms to
ALL NIPPON AIRWAYS CO., LTD. during the period from December 2013 to March 2017, and in October
2018 it received a cease and desist order and a penalty payment order from the Japan Fair Trade
Commission for activities in breach of Japan’s Antimonopoly Act regarding its sales of uniforms to NTT
DOCOMO, INC. during the period from December 2014 to March 2017.
3.

Agreement on liability limitation
The Company has concluded an agreement with Masakatsu Mori, Mariko Tokuno and Yoichi Kobayashi
regarding liability limitation according to the Companies Act, Article 423, Paragraph 1. According to theagreement, the maximum liability amount is the minimum amount stipulated by the Companies Act, Article 425,
Paragraph 1. If the reelection proposal is approved, the Company will continue its agreement with them. In
addition, if the election of Shiro Sugata is approved, the Company will conclude the said agreement with him.

12

Agenda Item 2.

Election of One (1) Audit & Supervisory Board Member

The term of one (1) Audit & Supervisory Board Member, namely Etsuo Ogawa, will expire at theclose of this General Meeting of Shareholders. Accordingly, we would like to propose theelection of one (1) Audit & Supervisory Board Member.
The following is the candidate for Audit & Supervisory Board Member.
The Audit & Supervisory Board has already approved this proposal.
Name of Candidate(Date of Birth)

Brief Background and Position at the Company(Important Concurrent Positions at Other Organizations)Sep. 1992
Apr. 2003
Feb. 2006
Apr. 2010
New election
Yoshihiro
Kawasaki(Nov. 12, 1954)

Jun. 2015

Number of
Shares
Owned

Joined Kyushu Yamato Transport Co., Ltd.
Regional Branch Manager of Kagoshima Regional
Branch of Yamato Transport Co., Ltd.
General Manager of Division of Service Quality
Improvement
Executive Officer and President of Shikoku Regional
OfficeAudit & Supervisory Board Member (current)(Important Concurrent Positions at Other Organizations)
None

7,500

[Reasons for nomination as a candidate for Audit & Supervisory
Board Member]
The Company proposes the election of Yoshihiro Kawasaki as an
Audit & Supervisory Board Member. The Company has determinedthat he will provide appropriate oversight of Group-wide
management from an objective perspective based on his
experience of auditing the Group’s core, the Delivery Business,after having served as Executive Officer and President of Shikoku
Regional Office and Full-time Audit & Supervisory Board Member of
the Company’s subsidiary Yamato Transport Co., Ltd.

Notes:
1. There are no particular vested interests between the Company and the candidate.
2. Agreement on liability limitation
If the election of Yoshihiro Kawasaki is approved, the Company will conclude an agreement with him regarding
liability limitation according to the Companies Act, Article 423, Paragraph 1. According to the agreement, themaximum liability amount is the minimum amount stipulated by the Companies Act, Article 425, Paragraph 1.

13

Agenda Item 3.

Election of One (1) Substitute Audit & Supervisory Board
Member

The resolution for the election of Koji Okawa, who was elected as a substitute Audit &Supervisory Board Member at the 150th Ordinary General Meeting of Shareholders held on
June 23, 2015, is to remain in effect until commencement of this General Meeting of
Shareholders. Accordingly, to prepare for a case in which the number of Audit & Supervisory
Board Members falls short of the number stipulated by laws and regulations, we would like topropose the election of one (1) substitute Audit & Supervisory Board Member.
In addition, the effectiveness of the election under this proposal may be cancelled on the basisof resolution of the Board of Directors and with approval of the Audit & Supervisory Board,
provided that such cancellation is prior to the assumption of office.
The following is the candidate for substitute Audit & Supervisory Board Member.
Motoharu Yokose is a candidate for substitute Outside Audit & Supervisory Board Member.
The Audit & Supervisory Board has already approved this proposal.
Name of Candidate(Date of Birth)

Brief Background and Position at the Company(Important Concurrent Positions at Other Organizations)Jan. 1972
Oct. 1975
May 1995
May 2001
Jun. 2006
Jul. 2006
Jun. 2009
Jun. 2017
OutsideIndependent

Number of
Shares
Owned

Joined Asahi & Co. (currently: KPMG AZSA LLC)
Registered as a Certified Public Accountant
Representative Partner of KPMG AZSA LLC
Executive Partner of KPMG AZSA LLC
Audit & Supervisory Board Member of Yamato
Transport Co., Ltd.
Corporate Advisor of Asahi Tax Corporation(current)
Audit & Supervisory Board Member of the Company
Audit & Supervisory Board Member of Yamato
Transport Co., Ltd. (current)(Important Concurrent Positions at Other Organizations)
Corporate Advisor of Asahi Tax Corporation
Executive Director of Nomura Real Estate Private REIT, Inc.

0

Motoharu Yokose(Jan. 31, 1948) [Reasons for nomination as a candidate for substitute Audit &Supervisory Board Member]
The Company proposes the election of Motoharu Yokose as a
substitute Outside Audit & Supervisory Board Member in order todraw on his expertise related to finance and accounting as acertified public accountant with respect to the Company’s audit
structure.
Although Motoharu Yokose does not have previous experience
contributing to corporate management, the Company has
determined that he will appropriately perform duties as Outside
Audit & Supervisory Board Member because, in addition to thereasons above, he served as Audit & Supervisory Board Member of
the Company from June 2009 and Audit & Supervisory Board
Member of the Company’s subsidiary Yamato Transport Co., Ltd.
from June 2006.
Notes:
1. There are no particular vested interests between the Company and the candidate.
2. Additional information regarding the candidate of Outside Audit & Supervisory Board Member is as follows.
Motoharu Yokose served as Outside Audit & Supervisory Board Member of the Company from June 2009 to June
2017.

14

3.

Furthermore, he previously served as Outside Audit & Supervisory Board Member of the Company’s subsidiary
Yamato Transport Co., Ltd. from June 2006 to June 2016, and has been serving in the said position again sinceJune 2017.
Motoharu Yokose satisfies requirements for an independent officer as provided for by Tokyo Stock Exchange, Inc.
and the requirements for Criteria for Determining Independence of the Company on page 16.
Agreement on liability limitation
If the election of Motoharu Yokose is approved and he assumes office as an Audit & Supervisory Board Member,the Company will conclude an agreement with him regarding liability limitation according to the Companies Act,
Article 423, Paragraph 1. According to the agreement, the maximum liability amount is the minimum amountstipulated by the Companies Act, Article 425, Paragraph 1.

15

Criteria for Determining Independence in Electing Outside Officers of the Yamato Group

1. Criteria for determining independence
Yamato Holdings Co., Ltd. has established the following criteria for determining theindependence of the Outside Directors and Outside Audit & Supervisory Board Members of
the Company (hereinafter collectively referred to as “Outside Officers”).
2. Independence requirements for Outside Officers
A party with respect to whom any of the following apply shall be deemed as not having met
the requirements for independence of an Outside Director or Outside Audit & Supervisory
Board Member of the Company.
(1) A party who is a major business partner of either the Company or a Group company(hereinafter collectively referred to as the “Company”), or otherwise if such party is a
corporation or other such entity, a person who executes business thereof;(2) A major business partner of the Company, or otherwise if such party is a corporation orother such entity, a person who executes business thereof;(3) A consultant, accounting professional or legal professional who receives substantial
monetary consideration and/or other economic benefits from the Company besides
officer remuneration;(4) A consultant, accounting professional, legal professional or other such professional who
is a member of a corporation or other such entity that provides professional services
acting as a major business partner of the Company;(5) A major shareholder of the Company, or otherwise if such major shareholder is a
corporation or other such entity, a person who executes business thereof;(6) A recipient of donations from the Company or a person who executes business thereof;(7) A person who now serves or has served in the past as a Director (excluding Outside
Director), Audit & Supervisory Board Member (excluding Outside Audit & Supervisory
Board Member), Executive Officer, or employee of either the Company or one of its
subsidiaries;(8) A close relative of a Director, Audit & Supervisory Board Member, Executive Officer or
employee of the Company;(9) A close relative of a person (excluding inconsequential persons) with respect to whom
any of the aforementioned apply.

16

Basic Views on Corporate Governance
Based on its corporate philosophy, the Yamato Group carries out business activities inaccordance with the law and social norms and actively promotes compliance management.
Striving to maximize corporate value by effectively utilizing the management resources of theGroup is one of the top priorities of management, and we have implemented measures andbolstered management systems as part of our corporate governance initiative.
Corporate Governance System
The Company is a company with an audit & supervisory board. In addition to importantmanagement decision-making and the supervision of business execution by the Board of
Directors, Audit & Supervisory Board members and the Audit & Supervisory Board, which are
independent from the Board of Directors, shall audit the status of execution of duties byDirectors.
Also, to complement the functions of the Board of Directors, the Company established a
Nomination and Compensation Committee comprising a majority of outside directors. At thesame time, the Company has adopted an executive officer system to ensure prompt
decision-making related to business execution.

17

Board of Directors
The Board of Directors shall deliberate on and decide the basic policies aimed at increasing theCompany’s corporate value, and supervise the execution of business.
 The Board of Directors shall make important decisions concerning the Company’s businessand supervise the execution of duties by executive directors and executive officers.
 The Board of Directors shall recognize the medium-term management plan as one of thecommitments to shareholders and do its utmost to achieve the goals of the plan. In addition,
the Board of Directors shall sufficiently analyze the initiatives aimed at realizing the goals of
the medium-term management plan as well as the extent to which the plan’s objectives arebeing achieved. In addition to providing explanations to shareholders, such analyses shall bereflected in future management plans.
 The Board of Directors shall encourage executive officers to demonstrate a healthy
entrepreneurial spirit and not excessively avoid or curb risk, while at the same time
establishing a framework that enables it to ensure accountability.
 The scope of responsibility of each executive officer shall be decided by the Board of Directors
and disclosed. Executive officers shall execute business in accordance with internal
regulations.
The Board of Directors comprises a diverse group of officers with different areas of knowledge
regarding the Yamato Group’s businesses, as well as differing backgrounds including areas ofprofessional expertise experience, gender, and global awareness. At least one third of themembers of the Board of Directors shall be, in principle, independent Outside Directors who
supervise from an independent and objective position.
Audit & Supervisory Board
In fulfilling their role and duties, including auditing the execution of duties by Directors,
appointing and dismissing the Accounting Auditor and exercising authority with respect to audit
compensation, the Audit & Supervisory Board and its members shall make appropriate decisions
from an independent, objective position, based on their fiduciary responsibility to shareholders.
 In order to adequately fulfill its role and duties, including the function of auditing the Company’sbusiness and accounting, the Audit & Supervisory Board and its members shall exercise theirauthority actively and proactively, and appropriately state their opinions at Board of Directors
Meetings as well as to members of senior management.
 The full-time Audit & Supervisory Board members shall attend Board of Directors meetingsand other important meetings related to the execution of business, express reasonable
opinions, hold effective Audit & Supervisory Board meetings, and ensure that information isshared and that members work together in a coordinated manner.
 The Audit & Supervisory Board shall regularly hold information exchange meetings for the
purpose of sharing information with outside directors, thereby ensuring more robust gatheringof information and encouraging teamwork.
At least half of the Audit & Supervisory Board Members shall be Outside Audit & Supervisory
Board Members. At least one member of the Audit & Supervisory Board shall be a full timemember. Individuals with appropriate experience and ability as well as the necessary knowledgeof finance, accounting, and legal affairs, shall be elected. In particular, at least one member ofthe Audit & Supervisory Board shall have adequate knowledge of finance and accounting.
Nomination and Compensation Committee
The Nomination and Compensation Committee shall be an advisory committee of the Board of
Directors, and deliberate on particularly important matters such as nomination and18

compensation, thereby raising management transparency.
 The Nomination and Compensation Committee shall deliberate on matters related to theappointment or dismissal of senior management members based on business performanceand multi-faceted observations and evaluation, thereby verifying the validity of such decisions.
 The Nomination and Compensation Committee shall decide policies related to thecompensation, etc. of senior management members.
 The successor to a Representative Director shall be proposed to the Board of Directors, after
deliberation by the Nomination and Compensation Committee based on multi-faceted
observations and evaluation in regard to the track record, human nature, etc. of multiple
candidates, including those with a referral from the incumbent Representative Director.
The Nomination and Compensation Committee shall comprise Outside Directors and the same
number or fewer internal Directors.

19

Efforts to Improve Corporate GovernanceMedium-Term Management Plan
DAN-TOTSU
Three-Year Plan HOP
2002-

2011-

DAN-TOTSU
Three-Year Plan STEP2014-

KAIKAKU 2019 for
NEXT100
2017-

Board of Directors and Audit & Supervisory Board■ Shortened the term of directors to one year (June 2003)■ Appointed outside directors (June 2005)■ Implemented evaluation of effectivenessof the Board of Directors (June 2016)■ Transitioned to a structure in w hich outside directors
made up one-third of all directors (June 2015)■ Appointed a female outside
director (June 2017)

Committees, etc.
■ Established the Nomination and Compensation Committee (June 2005)■ Established the Compliance and Risk Committee (August 2006)

Corporate Structure and Other Systems and Initiatives■ Introduced executive officer system (June 2004)■ Eliminated retirement benefit system for corporate
officers (June 2004)■ Disclosed ROE target in medium-term
management plan (January 2005)■ Introduced performance-linked compensation
system (April 2005)■ Established interim holding companies to be responsible forregional management (Southeast Asia and East Asia)
Southeast Asia (January 2014), East Asia (April 2017)■ Established an advisory board (October 2014)■ Established Corporate Governance Guidelines(September 2015)■ Implemented corporate officer training (October 2015)■ Transitioned to a pure holding company(November 2005)■ Abolished adviser
position (June 2018)■ Introduced succession plans (July 2006)

20

(Attached Documents)

Business Report(From April 1, 2018 to March 31, 2019)

1. Status of the Corporate Group(1)

Operating Performance

In the fiscal year ended March 31, 2019, the economic environment was plagued by ongoing
uncertainties ahead due to factors that have included effects of political developments overseas,
yet gradual economic recovery held course amid underlying strengths in corporate earnings.
Moreover, the logistics industry continues to face a severe business environment partially due totightening of the domestic labor market, which is in addition to an upward trend with respect tosmall parcel volume partially due to expansion of the e-commerce market brought about by
rapidly changing styles of consumption.
Under such circumstances, the Yamato Group has been striving to enhance its managementfoundations in order to continue achieving sustainable growth and thereby enable the Group to
keep providing high-quality services based on “KAIKAKU 2019 for NEXT100” medium-term
management plan, which while “reforming working styles” is centered on management, focuses
on reforms in the three areas of “structural reform in the Delivery Business,” “reform of revenue
and business structure geared to achieving discrete growth,” and “reform of Group management
structure geared to achieving sustainable growth.”
In the Delivery Business, we promoted our initiatives to rebuild our “last mile” network that
include adequate pricing initiatives and enhancement of collection and delivery systems to live
up to the trust and expectations of customers in order to strike a balance between regaining
profitability and expanding collection and delivery capacity. As a result, our financial performance
was firm due to rise in TA-Q-BIN unit price, despite increasing expenses related to our reform
initiatives.
In the non-delivery businesses, we took steps to expand our existing service offerings byenlisting the strengths of Group companies, while also drawing on Group-wide ties as weaggressively promoted solution sales geared toward addressing customers’ businesschallenges.
Our consolidated financial results for the fiscal year ended March 31, 2019 were as follows.
(Millions of yen)
Item
Operating revenue

Fiscal year
Fiscal year
ended
ended
March 31, 2018 March 31, 2019

ChangeGrowth (%)

1,538,813

1,625,315

86,501

5.6

Operating profit

35,68558,34522,65963.5

Ordinary profit

36,08554,25918,173

50.4

Profit attributable to owners of parent

18,231

25,682

7,450

40.9

As mentioned above, operating revenue amounted to 1,625,315 million yen, up 86,501 million
yen from the previous fiscal year. This is largely attributable to an increase in the TA-Q-BIN unit
price, and despite a decrease in TA-Q-BIN delivery volume amid promotion of structural reforms
in the Delivery Business. Operating expenses amounted to 1,566,969 million yen, up 63,841
21

million yen from the previous fiscal year. This is largely attributable to an increase in personnel
expenses and despite a decrease in commission expenses, mainly as a result of having
increased the workforce looking toward building collection and delivery systems.
As a result, operating profit amounted to 58,345 million yen, up 22,659 million yen from theprevious fiscal year.
Ordinary profit amounted to 54,259 million yen, up 18,173 million yen from the previous fiscal
year, mainly as a result of an increase of 3,517 million yen in share of loss of entities accounted
for using equity method due to impairment losses of goodwill relating to affiliates overseas andother factors.
Extraordinary income amounted to 1,822 million yen, largely attributable to having recorded
compensation for delay damages of 1,775 million yen incurred through the outcome of litigation.
Extraordinary losses were 3,823 million yen largely due to having recorded impairment loss of
2,087 million yen and loss on valuation of investment securities of 1,396 million yen.
As a result, profit before income taxes was 52,258 million yen, and profit attributable to ownersof parent (after deducting income taxes (including income taxes - deferred) and profit attributable
to non-controlling interests) was 25,682 million yen, up 7,450 million yen from the previous fiscal
year.
Meanwhile, based on investigation results into the situation where Yamato Home Convenience
Co., Ltd. was found to have inappropriately billed employees of corporate clients for moving
services, we previously recorded an estimated effect of the incident amounting to 3,104 million
yen. However, the effect of the incident ultimately amounted to 2,025 million yen as a result of
our having made progress in addressing client issues.

Initiatives for the entire Yamato Group
(i)

(ii)

(iii)

The Yamato Group has been taking steps on a Group-wide basis to develop an upbeat
working environment, which is more “employee-friendly” and “rewarding,” centered on the“Office for Reforming Working Styles” established in Yamato Transport Co., Ltd., and its“Working Styles Innovation Committees” in its respective Group companies, as a means ofplacing utmost priority on “reforming working styles” in order to practice “inclusive
management,” a Yamato Group founding principle. Moreover, we have been pursuing our“Value Networking” design, on the basis of creating business models for generating a highlevel of added value through the combined efforts of our respective businesses, while atthe same time contributing to growth strategies and international competitive strengths of
the Japanese economy. Meanwhile, we are also taking steps to forge a robust corporate
culture that acts as a foundation for business creation and development.
We continued to drive initiatives geared toward forging a more robust corporate culture. To
that end, we worked on enhancing the efficiency and dependability of operations, in part by
improving our transport systems and by using our information technology network to
enable visual monitoring of operating volumes. Moreover, we actively engaged in
CSR-related activities linked to Yamato Group business endeavors, such as throughsafety and environmental measures, and efforts to prosper communities and drastic andcomprehensive rebuilding of governance across the Group.
To further evolve our “Value Networking” design, we have been crafting business models
that deliver a high level of added value by leveraging the Yamato Group’s businessnetwork. Also, to address varied customer needs in Japan and overseas, we will makemore effective use of our innovative network platform consisting of the “Haneda
Chronogate,” “Okinawa International Logistics Hub,” and respective gateways linking
major cities in the Kanto, Chubu, and Kansai regions, in addition to our existing “last mile”
network.
22

(iv)

(v)

In our business looking toward global markets, we have been working to forge
collaboration among five regions, Japan, East Asia, South East Asia, Europe and theAmericas, while strengthening our capabilities in each geographic region to respond to thegrowth of cross-border logistics. In addition, we have been actively promoting efforts tobuild cross-border networks that provide substantial added value by leveraging ourcertification under international standards pertaining to small parcel chilled and frozen
goods delivery services, such that has already been acquired by eight Yamato Group
companies.
With the aim of improving customer convenience particularly in the e-commerce market,
we have been continuously working to establish an environment that ensures customers
ease in picking up their parcels. To that end we have been actively promoting efforts tobuild an open-type network of parcel lockers primarily in train stations, convenience storesand other such locations, and have worked on other efforts for the development of
next-generation logistics services including the utilization of automated driving
technologies. Moreover, we have been taking steps that involve digitization, automationand streamlining of our overall logistics operations in order to address challenges
presented by society such as the labor shortage as it intensifies, and in order to better
serve the rapidly expanding e-commerce market. In the fiscal year ended March 31, 2019,
we initiated joint trunk-route transportation enlisting multiple companies using longconnected trailers that enable large-volume transport, and gained approval in that regard
from Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT) under Japan’s
Act on Advancement of Integration and Streamlining of Distribution Business.

Business strategies of each business segment
Delivery
The delivery volumes of TA-Q-BIN and Kuroneko DM-Bin services are as follows.
(Million parcels / units)
Category

Fiscal year
Fiscal year
ended
ended
March 31, 2018 March 31, 2019

ChangeGrowth (%)

TA-Q-BIN

1,836

1,803

(33)

(1.8)

Kuroneko DM-Bin

1,464

1,211

(253)

(17.3)

(i)
(ii)

(iii)

In the Delivery Business, the Yamato Group concentrated on TA-Q-BIN-centered businessdevelopment, aiming to provide infrastructure that best suits our customers and contributeto enriching people’s lives.
Amid a severe business environment partially due to tightening of the domestic labormarket, which is in addition to an upward trend with respect to small parcel volume partially
due to expansion of the e-commerce market brought about by rapidly changing styles ofconsumption, during the fiscal year under review, continuing on from the previous fiscal
year, we promoted our initiatives to rebuild our “last mile” network that include adequate
pricing initiatives and enhancement of collection and delivery systems to live up to the trustand expectations of customers in order to strike a balance between regaining profitability
and expanding collection and delivery capacity. In addition, we also engaged in efforts
geared to structural reform of trunk-route networks for the purposes of further streamlining
transportation and optimizing the entire network.
In the still growing e-commerce market, we have been taking steps to expand sales of the“TA-Q-BIN Compact” and “Nekopos” services which enable customers to send small
parcels simply, and proceeded with offering a greater number of drop-off points for sendingby collaborating with multiple flea market websites. During the fiscal year under review, weteamed up with e-commerce companies in offering a service environment where
customers who have purchased a product are able to specify either a business office of
23

(iv)

(v)

(vi)

Yamato Transport Co., Ltd., a convenience store or an open-type parcel locker (PUDO
station) as a location for pick-up, while also promoting use of our “Kuroneko Members”
service for individual customers. Meanwhile we have also been working in conjunction withflea market websites and e-commerce companies in efforts to provide greater convenienceby developing a service environment that makes it easier for individual customers to shipmerchandise from PUDO station open-type parcel lockers.
With respect to corporate clients, we have been accurately pinpointing managerial
challenges and actively proposing solutions to address those challenges. Moreover, wehave been working to boost profitability by making proposals that provide high added value
using the Group’s business resources. During the fiscal year under review, we madeefforts to support business of our customers through initiatives that have included
promoting membership in the “Yamato Business Members” service for corporate clients,
offering them enhanced features that provide greater convenience.
We have been taking steps to improve services for residents geared toward resolving
issues facing communities. In part, this has involved collaborating with numerous
municipalities and companies in efforts that entail helping those who have difficulties doing
their shopping and helping to watch over elderly residents. Moreover, we have also been
helping to revitalize local industry particularly through initiatives that involve supporting
tourism and helping to expand sales channels for locally produced products.
Operating revenue amounted to 1,297,222 million yen, up 7.9% from the previous fiscal
year owing to a higher TA-Q-BIN unit price despite a decrease in TA-Q-BIN delivery
volume for the fiscal year under review as a result of promotion of “structural reforms in the
Delivery Business.” Amid increasing expenses related to our reform initiatives, operating
profit amounted to 40,787 million yen, an improvement of 34,030 million yen from theprevious fiscal year.

BIZ-Logistics
(i)

(ii)

(iii)

(iv)

In the BIZ-Logistics Business, the Yamato Group is providing customers with innovative
logistics systems by combining management resources such as the TA-Q-BIN networkwith logistics functions, maintenance and recall handling functions, cleansing functions for
medical devices and international transportation functions.
For the e-commerce industry and others, we are offering one-stop services for various
types of logistical support services in line with customer needs, including placing andaccepting orders, visual monitoring of inventories for customers and enabling speedier
shipments. During the fiscal year under review, we promoted efforts to increase sales ofthis service, particularly among our existing customers.
For medical service providers, we have been developing medical device loaner support(storage, cleaning and delivery) and other services that help revolutionize logistics
operations. During the fiscal year under review, use of this service increased particularly
among our existing large-lot customers.
Operating revenue amounted to 147,437 million yen, up 1.6% from the previous fiscal year
mainly as a result of our having expanded sales of trading logistics services andmaintenance services, and also due to progress made in providing industry-specificsolutions. Operating profit amounted to 3,329 million yen, down 52.8% from the previous
fiscal year mainly as a result of having incurred upfront expenses to achieve businessgrowth.

Home Convenience(i)

In the Home Convenience Business, we have been working toward enabling customers toachieve greater convenience and comfort in their lives through lifetime lifestyle support
businesses and corporate enterprise business that draw on the Yamato Group’s
nationwide network.
24

(ii)

Operating revenue amounted to 33,404 million yen, down 25.5% from the previous fiscal
year. The decrease was partially a result of having stopped taking new orders with respect
to all moving-related services, including those involving individual customers, resulting
from a situation involving inappropriate billing for moving-related services provided to
employees of corporate clients. Meanwhile, although we previously recorded an estimatedeffect of the incident amounting to 3,104 million yen based on investigation results
regarding such inappropriate billing, the effect of the incident ultimately amounted to 2,025
million yen as a result of our having made progress in addressing the issues of clients. As
for profits, the segment posted an operating loss of 7,764 million yen partially because of
the stop on taking new orders with respect to all moving-related services, and also
because of the aforementioned effect of the incidents on profits.

e-Business
(i)

(ii)

(iii)

In the e-Business, the Yamato Group helps customers streamline their business processes
and solve potential issues by proactively developing solution platform business thatcombines logistics technology and financial technology with information technology. In
addition, with the aim of helping to accelerate growth of Yamato Group businesses, wehave been moving beyond conventional information technologies through efforts geared topromoting use of emerging technologies that harness artificial intelligence (AI), the Internetof things (IoT) and other such innovations.
We have been offering the “Certified Web Retrieval Service” for the financial industry
which enables subscribers to safely and simply submit documentation. The service helps
our customers streamline their administrative operations by enabling service subscribers
to use their smartphones, personal computers and other such devices to upload
identification papers and other documents necessary when completing application
processes. During the fiscal year under review, we actively expanded sales of the service
to the banking and insurance industry.
Operating revenue amounted to 26,592 million yen, down 2.6% from the previous fiscal
year mainly due to effects of a decrease in the number of projects involving systemprocessing for customers stemming from a decrease in TA-Q-BIN delivery volume, anddespite having increased sales of the “Certified Web Retrieval Service” and having madeprogress in capturing more system configuration business as a result of enhanced sales
activities for our existing customers. Operating profit amounted to 8,740 million yen, up
10.0% from the previous fiscal year mainly due to firm results with respect to use of ourhighly profitable existing services.

Financial
(i)

(ii)

In the Financial Business, the Yamato Group has been developing settlement and financial
services tailored to a range of customer needs for payment collection of mail-orderproducts, business-to-business transaction settlement, and vehicle leasing.
With respect to our payment settlement services, in addition to providing our mainstay
service “TA-Q-BIN Collect,” we have also been promoting increased customer use of bothour “Kuroneko Web Collect” comprehensive internet-based transaction settlement service,“Kuroneko Pay After Delivery Services” and our e-money settlement services. During the
fiscal year under review, we have been taking steps to expand sales of our “Raku-uru Cart”
service. This service helps business operators newly enter the e-commerce market, whichis poised for expansion going forward, by providing one-stop support in terms of shopping
cart function, payment settlement and delivery services. Moreover, we focused on
improving our service offerings in part by promoting increased sales of our ID-linked“Kuroneko Pay” service that links “Kuroneko Member” information with purchases to25

(iii)(iv)

promote greater convenience to customers who use online shopping while also helping
e-commerce companies increase their sales.
In the lease services business, we have been working to expand business of financial
leases primarily involving trucks and installment sales. We have also been developing
peripheral operations that include providing vehicle referrals and resale support, while
forging ahead in making proposals involving total solutions related to vehicles.
Operating revenue amounted to 79,966 million yen, down 3.6% from the previous fiscal
year mainly due to a decrease in “TA-Q-BIN Collect” delivery volume largely stemmingfrom a shrinking market for cash-on-delivery brought about by changing payment
settlement needs, and despite increases in the use of our “Kuroneko Web Collect” and“Kuroneko Pay After Delivery Services.” Operating profit was 6,244 million yen, down
21.1% from the previous fiscal year.

Autoworks
(i)

(ii)

(iii)

In the Autoworks Business, the Yamato Group provides its 24-hour-a-day, 365-day-a-year
service that enables customers to service their vehicles without stopping operation, which
involves carrying out periodic maintenance under a membership framework, thereby
providing value to logistics operations providers in the form of “improvement of vehicle
maintenance convenience” and “maintenance expense reduction.” Furthermore, we
provide services that help our customers improve their asset utilization ratios, by adding
options of “maintaining and safeguarding logistics facilities and equipment, and improving
such workplace environments,” along with “offering insurance plans tailored to customer
risk management needs” which provide coverage for such assets.
In vehicle maintenance services, we have embarked on efforts to handle new areas ofbusiness. For instance, this has involved providing support for reducing workloads of sales
drivers and ensuring safe vehicle operation, carrying out inspections and maintenance ofsmall electric trucks with lower exhaust emissions and large electric buses that are being
put to use in tourism destinations, and developing the “Smart Tenko” driver roll call system
which enables transportation companies to achieve higher quality operation management
by drawing on data regarding employees and vehicles using Internet of things (IoT)
technologies.
Operating revenue amounted to 25,985 million yen, up 5.5% from the previous fiscal year
largely as a result of an increase in the number of vehicles serviced. Operating profit was
4,433 million yen, up 7.1% from the previous fiscal year mainly due to progress made in
streamlining business processes, particularly in terms of standardizing and enabling visualmonitoring of business operations by introducing production methods of manufacturers.

Other
(i)

(ii)

The “JITBOX Charter service” provides transportation by transport box. The service takes
advantage of its network consisting of multiple companies and provides added value tocustomers through timely delivery and frequent, right-volume delivery. During the fiscal
year under review, service use grew steadily due to favorable results with respect toexisting services.
Operating profit excluding dividends which Yamato Holdings Co., Ltd. received from theGroup companies decreased 1.5% from the previous fiscal year to 2,219 million yen.

CSR Initiatives(i)

The Yamato Group places utmost priority on protecting human life and conducts a range ofsafety measures. During the fiscal year under review, the entire Yamato Group including its
overseas operations carried out the “Zero Traffic Accidents Campaign,” and Yamato
26

(ii)

(iii)

(iv)

(v)

Transport Co., Ltd. held the “8th Nationwide Safety Competition” and engaged in efforts toenhance the skills of the Group’s professional drivers with respect to safe vehicle operation,
while also heightening safety awareness and improving driving skills on a Group-widebasis. In addition, since 1998 we have been holding our “Safety Classes for Children,”through which we convey the importance of traffic safety, in day care facilities,
kindergartens and elementary schools across Japan. A total of about 3.28 million people
have now participated.
The Yamato Group works to ensure that its distribution mechanisms are environmentallysound, under its policy of “Nekology” (combining “Kuroneko” with “ecology”) for promoting
its environmental conservation initiatives. We also hold “Kuroneko Yamato Environmental
Class” sessions designed to provide support for environmental education of children who
will bear responsibilities of the next generation. We have held such classes on an ongoingbasis nationwide since 2005, attracting about 240 thousand participants so far.
Aspiring to be a company that continually evolves in step with society, led by Yamato
Welfare Foundation, the Yamato Group conducts various activities to help realize a society
in which disabled people can freely enjoy a lifestyle as a member of the workforce.
Specifically, we engage in ongoing programs that support economic independence ofpeople with disabilities, such that include actively employing people with disabilities at the
Swan Bakery which makes and sells bread, providing them with workplaces through theconsigned delivery of Kuroneko DM-Bin, and operating job-finding support facilities where
they take part in training to acquire skills and knowledge necessary for employment.
During the fiscal year under review, our special subsidiary Swan Co., Ltd. (Swan), operatorof Swan Bakery, entered into a franchise agreement with a partner company in Vietnam
and opened a Swan Cafe & Bakery location in the city of Ho Chi Minh, Vietnam, which
made that establishment Swan’s first franchisee overseas.
Aiming to create more sustainable social value, the Yamato Group promotes initiatives forsharing value with society based on “Creating Shared Value (CSV).” During the fiscal year
under review, we have promoted our “combined passenger-cargo” operations using
scheduled-route passenger buses and railways in 14 prefectures nation-wide, thereby
helping to improve lifestyle services for local residents by keeping scheduled bus andrailway networks running in hilly and mountainous areas where populations aresubstantially declining and getting older, and also by streamlining distribution in thoselocations. In tourism destinations, our efforts that also helped revitalize local communities
included our launch of hands-free travel service drawing on our “combined
passenger-cargo” operations, targeting foreign visitors to Japan. In addition, for residents
of suburban housing complexes which are undergoing changes with respect to people’s
life stages, we have been providing support for community development geared toensuring that local residents are able to lead comfortable lives. Our efforts have involved
helping to revitalize local communities where we have our business locations, andproviding such residents with lifestyle support services that include handling shopping andhousekeeping on their behalf. Moreover, we have been working with government bodies in
efforts geared to revitalizing communities and resolving issues by leveraging the YamatoGroup’s management resources with respect to initiatives that include helping to watch
over elderly residents, supporting tourism, and expanding sales channels for locally
produced products in respective regions throughout Japan. We are currently involved in
966 initiatives now being implemented or otherwise under discussion.
In order to earn the confidence of Yamato Group’s customers and society through acting
as a company that forms an important part of social infrastructure, we have beenpromoting management in conformity with compliance and working on Group-wide
initiatives with respect to “reforming working styles” through developing upbeat working
environment which is more “employee-friendly” and “rewarding” for employees, such as
promoting reviewing our management rules on working hours and creating new working
styles for our employees.
27

(2)

Issues to Be Addressed

The Yamato Group aims to enhance its management foundations in order to continue achieving
sustainable growth over the coming century. To such ends, we intend to address the following
issues based on our “KAIKAKU 2019 for NEXT100” medium-term management plan looking
toward our 100-year anniversary in 2019.
(i)

(ii)

(iii)

Our efforts to forge a robust corporate culture will involve placing top priority on ensuringlevels of quality that instill customer confidence while strengthening ESG, which is to say
increasing employee satisfaction, strengthening both legal and financial governance, andpursuing CSR initiatives. When it comes to increasing employee satisfaction in particular,
we will place utmost priority on “reforming working styles,” thereby practicing the YamatoGroup founding principle of “inclusive management” by making “employee-friendly” and“rewarding” working environments a reality across the entire Yamato Group. To such ends,
we will take action that includes securing workforce capacity by upgrading to more
appealing personnel systems that attract a diverse range of talent, while also fostering
employee pride and motivation through initiatives that entail re-establishing an educational
system and adopting a performance evaluation scheme that facilitates an upbeat
approach to work by rewarding employee independence and autonomy.
Given the situation where Yamato Home Convenience Co., Ltd. (YHC) inappropriately
billed corporate clients for moving-related services provided to their employees, weconsidered information and advice from an “investigation committee consisting of external
independent experts” established within the Company, including a survey of facts relating
to the incidents, analysis of the causes thereof, and proposals for measures to prevent
recurrence, as well as administrative sanctions and business improvement orders issued
to YHC by the Ministry of Land, Infrastructure, Transport and Tourism (MLIT). Accordingly,
YHC has submitted reports to MLIT with respect to the improvement measures according
to the orders, and has otherwise been taking steps to prevent a recurrence of such
incidents through efforts that have included improving the organizational framework,
comprehensively inspecting all moving-related services, fundamentally overhauling themoving business, and revamping product design. We have conducted another review toassess YHC’s contractual compliance involving all of its moving-related services, including
those for its individual customers, and have furthermore stopped YHC from taking neworders involving services that are not in compliance until YHC has finished re-designing
product offerings so that they comply with contracts. Meanwhile, the Group Governance
Project established at the Company has been spearheading efforts that involve
comprehensively inspecting all of the Group’s products and services, improving operationsof the whistle-blower system, and implementing ethics education for employees. In sodoing, we will continue to carry out drastic and comprehensive measures to rebuild Group
governance, with the aim of enhancing sound Group management.
With respect to “reforming working styles” of Yamato Transport Co., Ltd. which is at thecore entity of the Group, we will persist with initiatives that include “improving andimplementing thorough labor management” and “encouraging a work-life balance” throughefforts geared to placing top priority on “heightening employee satisfaction by bringing
about a working environment where employees can take an upbeat approach to work.” At
the same time, in addressing the issue of the labor shortage as it extends into the future,
we will work to heighten productivity across every aspect of Group operations, includingcollection and delivery operations, back-office and sorting operations, by linking systems
with business operators, more swiftly setting up open-type parcel lockers (PUDO station),and optimizing the entire network, as well as active use of cutting-edge technologies.
Furthermore, we will strike a balance between regaining profitability and expanding
collection and delivery capacity through our efforts currently underway with respect to28

“rebuilding our ‘last mile’ network to make it more efficient” and “carrying out continuousand adequate pricing initiatives.”(iv)

We will contribute to Japanese economic growth strategies by pushing ahead with
our “Value Networking” design which aspires to revolutionize logistics. We will
persist with efforts to further develop our “last mile” network, the greatest strengthof the Yamato Group, by making use of our “Haneda Chronogate,” and “Okinawa
International Logistics Hub” facilities, as well as respective gateways linking major
cities in the Kanto, Chubu, and Kansai regions. Meanwhile, we will work toward
creating a business model that can generate a high level of added value that
improves logistics speed, quality and costs, by fusing our business resources inareas such as information, logistics and transaction settlement within this network.
Moreover, we will strengthen account sales geared to our corporate clients inJapan and overseas on a Group-wide basis, and otherwise work toward proposing
solutions that address our customers’ challenges.

(v)

In our business looking toward global markets, leveraging certifications under international
standards pertaining to chilled and frozen goods delivery services acquired by eight
Yamato Group companies, we have been actively promoting efforts to build cross-border
networks that provide substantial added value. In responding to the growth of cross-borderlogistics, we will continue working to forge collaboration among five regions, Japan, East
Asia, South East Asia, Europe and the Americas, while strengthening our capabilities ineach geographic region.
(vi) With the aim of enhancing our management foundations, we will incorporate cutting-edge
digital technologies as we create new businesses and bring about evolution and innovationof our existing ones. In addition, to heighten our “capacity to generate earnings” leveraging
the collective strengths of the Group, we will reform the structure of Group management
and upgrade to a management system that combines three components: accounts
management, managerial accounting, and human resources (performance evaluation).
(vii) We will build a platform that links us with government bodies and corporations in various
regions throughout Japan, with the aim of providing support to people in their daily lives
and revitalizing their local communities. We will strive to become the group of companies
which is the most appreciated and trusted by society by creating value that can be shared
among corporations and society through our core operations.
Through the Group’s unified efforts, Yamato will create greater corporate value.
We look to the continued understanding and support of our shareholders and investors.

29

(3)

Business Performance and Changes in Financial Position(Millions of yen)
FY2016/3
st151

FY2017/3
nd152

FY2018/3
rd
153

FY2019/3
th154

1,416,413

1,466,852

1,538,813

1,625,315

Profit attributable to owners of parent

39,42418,053

18,231

25,682

Basic earnings per share (Yen)

96.45

45.37

46.24

65.14

Total assets

1,089,436

1,114,672

1,114,870

1,123,659

Net assets

543,855

545,559

557,586

573,388

Net assets per share (Yen)

1,349.56

1,367.51

1,395.74

1,435.15

Item
Operating revenue

Notes: 1.

2.

(4)

The Group has applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ
Statement No. 28, February 16, 2018) effective from the beginning of the fiscal year ended March 31, 2019.
Accordingly, the amount of total assets for the fiscal year ended March 31, 2018, has been retrospectively
adjusted using figures that reflect the application of the aforementioned standard, etc.
Basic earnings per share is calculated based on the average number of shares outstanding in each fiscal
year and net assets per share is calculated based on the total number of shares outstanding at the end ofeach fiscal year.

Delivery Volume of Small Parcels(Million parcels / units)
FY2016/3
st151

FY2017/3
nd152

FY2018/3
rd
153

FY2019/3th154

TA-Q-BIN

1,731

1,867

1,836

1,803

Kuroneko DM-Bin

1,536

1,542

1,464

1,211

Item

30

(5)

Principal Business Activities

The Yamato Group is active in the following business areas:
Business area

Content of business
Small parcel delivery services for the general public and corporations
centering on TA-Q-BIN (door-to-door parcel delivery, Kuroneko DM-Bin, anddomestic air cargo transport business, etc.)
Logistics services for corporations(logistics, medical products distribution services, maintenance support
service, recall support service, international intermodal transportation service,and overseas lifestyle support services, etc.)
Lifestyle support services for individual customers, business support services
for corporate customers (pickup, delivery and installation of household goods
and electric appliances, moving and lifestyle support services, andmerchandising services, etc.)
Outsourcing services for information processing and information systemdevelopment business (system development, sales of system package
solutions, distribution information services, and information security service,etc.)
Settlement services and financial products targeting business customers andgeneral consumers (TA-Q-BIN Collect service, Internet total settlement
service, business-to-business logistics settlement service and comprehensive
lease services, etc.)
Collective vehicle management agent business for transportation companies(vehicle maintenance business, fuel sales, and nonlife insurance agent
business, etc.)

Delivery

BIZ-Logistics

Home Convenience

e-Business

Financial

Autoworks

Business-to-business logistics services by JITBOX Charter and sharedservices, etc.

Other

(6)

Capital Expenditure

The capital expenditure for the fiscal year ended March 31, 2019 totaled 83,514 million yen andthe principal components were as follows:(Millions of yen)
Businessarea
DeliveryCompany
Yamato Transport Co., Ltd.

Content of investment

Amountinvested

Purchase of vehicles (6,445 units)

23,950

New Konan Building

3,213

Nagareyama Base

4,377

BIZ-Logistics

Yamato Global Logistics Japan Co.,Ltd.

Tokyo Global Logi Gate

2,770

Financial

Yamato Lease Co., Ltd.

Purchase of vehicles for leasing

27,154(7)

Financing Activities

Not applicable.

31

(8)

Principal Creditors(Millions of yen)
Outstanding borrowing

Creditors
Mizuho Bank, Ltd.

27,000MUFG Bank, Ltd.

25,010Sumitomo Mitsui Banking Corporation

8,290

Note: The above refers to ongoing credit in the Financial segment.

(9)

Employees
Business area

Number of employees

Delivery(Persons)
Changes from previous
fiscal year-end

203,141

11,708

BIZ-Logistics

8,207

570

Home Convenience

4,645

(217)

e-Business

3,497

(84)

Financial

809

(19)

Autoworks

2,164

(12)

Other

2,662

83

Total

225,125

12,029Note: The above numbers include 127,538 part timers (a year-on-year increase of 7,976).

(10) Vehicles
Business area

Number of vehicles(Units)Changes from previous
fiscal year-end

Delivery

48,493

2,913

BIZ-Logistics

1,026

(5)

Home Convenience

1,842

(122)

e-Business

57

(1)

Financial726

55

Autoworks

810

33

Other

1,239

179

Total

54,193

3,052

32

(11) Major Subsidiaries
Business area

Company

Capital stock

Ownership(%)(Millions of yen)

DeliveryYamato Transport Co., Ltd.
Okinawa Yamato Transport
Co., Ltd.
Yamato Global Express Co.,Ltd.
Yamato Logistics Co., Ltd.

50,00050

100.00100.001,000

100.001,000

100.00

Yamato Global Logistics
Japan Co., Ltd.

1,880

100.00

YAMATO TRANSPORT
U.S.A., INC.

(Millions of US$)100.00Home
Convenience

Yamato Home Convenience
Co., Ltd.

(Millions of yen)e-BusinessYamato System Development
Co., Ltd.

1,800

100.00Financial

Yamato Financial Co., Ltd.

1,000

100.00Autoworks

Yamato Lease Co., Ltd.
Yamato Autoworks Co., Ltd.

30
30

100.00100.00

BIZ-Logistics

4

100.00480

33Principal business activities
TA-Q-BIN; Kuroneko DM-Bin
TA-Q-BIN, Kuroneko DM-Bin
in Okinawa
Domestic air cargo transportbusiness
Logistics service;
manufacturer recall support
services
Handling of international air
cargo and marine cargo;
import/export customs
clearance services; overseas
lifestyle support services
including international
moving; fine art transportbusiness
Handling of air cargo andmarine cargo, andinternational moving in North
America; import/export
customs clearance services
Delivery, installation andsetting up of furniture andelectric appliances; moving
and lifestyle support services;
merchandising services
Networking service; research,development, information,and consulting services forusers of computer systems;
software development,
equipment sales, and online
services
Settlement service forpayment of merchandise
General lease services
Vehicle management service
business; vehicle
maintenance service; sales offuel and auto parts; repair andsales of freezers, refrigeratorsand cargo-handling delivery
equipment; agent services fornonlife insuranceBusiness area
Other

Company

Capital stock

YAMATO BOX CHARTER
CO., LTD
YAMATO (CHINA) CO., LTD400

Ownership

Principal business activities

100.00Transportation service; box
charter business
Management of regional
operations in East Asia,
business development andmarket research
Management of regional
operations in East Asia,
business development andmarket research
Management of regional
operations in Southeast Asia,
business development andmarket research(Millions of RMB)

50YAMATO INVESTMENT(HONG KONG) LIMITED(Millions of HK$)YAMATO ASIA PTE. LTD.

(Millions of S$)

713

352

100.00100.00100.00Note: The status of a specified wholly owned subsidiary company as of March 31, 2019 is as follows.
(Millions of yen)Book value of the
Total assets of theCompany
Locationshares in the
Company
Company
Yamato Transport Co.,
16-10, Ginza 2-chome,
239,575
536,657
Ltd.
Chuo-ku, Tokyo(12) Major Offices
Business area
DeliveryCompany

Head office location

Number of offices(stores)

Yamato Transport Co., Ltd.

Chuo-ku, Tokyo

Okinawa Yamato Transport Co., Ltd.

Itoman City,
Okinawa

39

Yamato Global Express Co., Ltd.

Minato-ku, Tokyo

302

Yamato Logistics Co., Ltd.

Chuo-ku, Tokyo

128

Yamato Global Logistics Japan Co., Ltd.

Chuo-ku, Tokyo

68

YAMATO TRANSPORT U. S. A., INC.

New Jersey,
U.S.A.

30

Home Convenience

Yamato Home Convenience Co., Ltd.

Chuo-ku, Tokyo

174

e-BusinessYamato System Development Co., Ltd.

Koto-ku, Tokyo

34

Financial

Yamato Financial Co., Ltd.

Chuo-ku, Tokyo

47

Yamato Lease Co., Ltd.

Toshima-ku,
Tokyo

64

Autoworks

Yamato Autoworks Co., Ltd.

Chuo-ku, Tokyo

110

Other

Yamato Holdings Co., Ltd.

Chuo-ku, Tokyo

1

YAMATO BOX CHARTER CO., LTD

Chuo-ku, Tokyo

60

YAMATO (CHINA) CO., LTD

Shanghai, China

1

YAMATO INVESTMENT (HONG KONG)
LIMITED

Hong Kong

1

YAMATO ASIA PTE. LTD.

Singapore1

BIZ-Logistics

34

7,384

2. Overview of Shares (As of March 31, 2019)(1) Total Number of Shares Authorized:

1,787,541,000 shares(2) Number of Shares Issued:

411,339,992 shares(3) Number of Shareholders:

36,434 persons(4) Principal Shareholders
Number of shares
owned(Thousands of shares)

Shareholders

Ownership percentage(%)

The Master Trust Bank of Japan, Ltd. (Trust Account)

44,017

11.16

Japan Trustee Services Bank, Ltd. (Trust Account)

27,016

6.85

JPMorgan Chase Bank, N.A. 380055

25,615

6.50

Yamato Employees’ Shareholding Association

19,589

4.97

Nippon Life Insurance Company

14,7703.75

Meiji Yasuda Life Insurance Company

14,314

3.63

Mizuho Bank, Ltd.

10,247

2.60

SSBTC Client Omnibus Account

9,428

2.39

Yamato Trading-Partner Shareholding Association

8,165

2.07

Japan Trustee Services Bank, Ltd. (Trust Account 5)

6,515

1.65

Notes: 1.
2.

The Company holds 17,065,526 of its own shares as treasury shares, but this does not include voting
rights. Therefore, the Company has been omitted from the above list of principal shareholders.
Ownership percentage is calculated exclusive of own shares.

353. Officers and Executives(1) Directors and Audit & Supervisory Board Members
Position

Responsibilities and important concurrent positionsat other organizations

Name

Directorand Chairman

Makoto Kigawa

Representative Director,
President and Executive
Officer

Masaki Yamauchi

Representative Director,
Vice President and Executive
Officer

Haruo Kanda

Director and Senior Managing
Executive Officer

Kenichi Shibasaki

Responsible for Financing Strategy and
Coordinator-General of Investor Relations Strategy

Director,
Executive Officer

Yutaka Nagao

Representative Director, President and Executive
Officer of Yamato Transport Co., Ltd.

Director

Toshitaka Hagiwara

Director

Masakatsu Mori

Director

Mariko Tokuno

Adviser of Komatsu Ltd.
Outside Director of Zensho Holdings Co., Ltd.
Outside Director of Hino Motors, Ltd.
Outside Director of Takamatsu Construction Group
Co., Ltd.
Senior Advisor of the International University ofJapan (IUJ)
Outside Director of Stanley Electric Co., Ltd.
Outside Director of Kirin Holdings Company, Limited
Outside Director of Happinet Corporation
Outside Director of Mitsubishi Materials Corporation

Director

Yoichi Kobayashi

Full-time Audit & Supervisory
Board Member
Full-time Audit & Supervisory
Board Member
Audit & Supervisory Board
MemberAudit & Supervisory Board
MemberEtsuo Ogawa

Notes:

Outside Director of Komatsu Ltd.
Outside Director of Seven Bank, Ltd.

Vice Chairman of ITOCHU Corporation

Mamoru Matsuno
Hiroyuki Kanae

Attorney at law

Takashi Yamashita

Representative of Takashi Yamashita CPA OfficeOutside Director of Shin Nippon Biomedical
Laboratories, Ltd.

1. Toshitaka Hagiwara, Masakatsu Mori, Mariko Tokuno and Yoichi Kobayashi are Outside Directors.
2. Hiroyuki Kanae and Takashi Yamashita serve as Outside Audit & Supervisory Board Members.
3. The Company appoints all Outside Directors and Outside Audit & Supervisory Board Members as
independent officers provided under the provisions of the Tokyo Stock Exchange, Inc. and registers theindividuals as such with that exchange.
4. Etsuo Ogawa, Audit & Supervisory Board Member, has experienced Director, responsible for Financing
and Accounting of the Company and possesses considerable insights into finance and accounting
related matters.
5. Mamoru Matsuno, Audit & Supervisory Board Member, possesses considerable insight into finance andaccounting related matters through his experience in internal auditing duties over many years.
6. Hiroyuki Kanae, Audit & Supervisory Board Member, is conversant with corporate legal affairs as an
attorney and possesses considerable insight into finance and accounting related matters.
7. Takashi Yamashita, Audit & Supervisory Board Member, is a qualified Certified Public Accountant and36

Tax Accountant, and possesses considerable insights into finance and accounting related matters.
8. Hitoshi Kanamori, Representative Director, Vice President and Executive Officer, passed away on
January 12, 2019 and thus retired.
9. On March 28, 2019, Masakatsu Mori, Director, resigned as Outside Audit & Supervisory Board Memberof Kirin Holdings Company, Limited and assumed office as Outside Director of the company.
10. There are no significant relationships between the Company and the other organizations whereconcurrent positions are held by Outside Directors and Outside Audit & Supervisory Board Members.
11. On April 1, 2019, there were changes in responsibilities and important concurrent positions at otherorganizations as follows:

Position

Responsibilities and important concurrent positions atother organizations

Name

Directorand Chairman

Masaki Yamauchi

Representative Director,
President and Executive
Officer
Representative Director,
Vice President and Executive
Officer

Yutaka Nagao

Haruo Kanda

Vice President of Management Integration,
responsible for Regional Co-creation Project

Representative Director,
Vice President and Executive
Officer

Kenichi Shibasaki

Supervisor of ESG Strategy, Marketing Strategy,
Public Relations Strategy, Financing Strategy,
Investor Relations Strategy, and Legal Strategy, andresponsible for Internal Audit

Director

Makoto Kigawa

Outside Director of Komatsu Ltd.
Outside Director of Seven Bank, Ltd.

(2) Limited Liability Agreements
The Company’s Articles of Incorporation allow for the conclusion of agreements with Directors(excluding Executive Directors, etc.) and Audit & Supervisory Board Members limiting liability
stipulated in the Companies Act, Article 423, Paragraph 1. Thus, the Company has concluded
Limited Liability Agreements with Directors, Toshitaka Hagiwara, Masakatsu Mori, Mariko
Tokuno, Yoichi Kobayashi, and all Audit & Supervisory Board Members based on the Articles ofIncorporation. The amount of liability allowed for in those agreements is as per the minimum
amount of liability provided for under the Companies Act, Article 425, Paragraph 1.

(3) Amount Paid as Remuneration to Directors and Audit & Supervisory Board
Members1) Total Amount Paid as Remuneration
Position

Number paid

Amount paid

Persons

Millions of yen

Remarks

Directors

10419

Including 54 million yen for 4 Outside Directors

Audit &
Supervisory
Board Members

570

Including 21 million yen for 2 Outside Audit &Supervisory Board Members

Total

15

490

37

2) Policies Related to Methods for Calculation and Determination of Officer
Remuneration
To ensure the objectivity and transparency of policies for determining officer remuneration,
deliberations are conducted through the Nomination and Compensation Committee, more thanhalf of whose members are outside directors, with the Board of Directors making resolutions.
Director remuneration comprises fixed remuneration that reflects external standards andperformance-based amounts. In addition, a certain percentage of their remuneration is allocatedto purchase shares of Company through the Officers and Executives’ Shareholding Association.
The remuneration of Audit & Supervisory Board Members and outside officers is fixed in keepingwith the nature of their work.

(4) Outside Officers
Principal Activities
Position

Name

Director

Toshitaka Hagiwara

Director

Masakatsu Mori

Director

Mariko Tokuno

Director

Yoichi Kobayashi

Audit &
Supervisory
Board Member

Hiroyuki Kanae

Audit &
Supervisory
Board Member

Takashi Yamashita

Principal activities
Attended all 19 meetings of the Board of Directors held in the fiscal
year under review, and provided necessary comments and advice on
overall management as appropriate from his perspective as amanager with rich experience and profound critical insight.
Attended all 19 meetings of the Board of Directors held in the fiscal
year under review, and provided necessary comments and advice on
overall management as appropriate from his perspective as amanager with rich experience and profound critical insight.
Attended 18 of 19 meetings of the Board of Directors held in thefiscal year under review, and provided necessary comments andadvice on overall management as appropriate from her perspective
as a manager with rich experience and profound critical insight.
Attended all 16 meetings of the Board of Directors held after June 28,2018 when he was appointed as Director, and provided necessarycomments and advice on overall management as appropriate fromhis perspective as a manager with rich experience and profoundcritical insight.
Attended all 19 meetings of the Board of Directors held in the fiscal
year under review, and offered necessary comments based on his
expertise and rich experience as an international attorney.
Furthermore, he attended all 19 meetings of the Audit & Supervisory
Board held in the fiscal year under review, as well as regularexchanges held between the Representative Director and President,
Outside Directors and the Audit & Supervisory Board Members. He
submitted questions mainly concerning foreign operation risk, andexamined the execution of the Directors’ duties.
Attended all 19 meetings of the Board of Directors held in the fiscal
year under review, and offered necessary comments based on his
expertise and rich experience in finance and accounting.
Furthermore, he attended 18 of 19 meetings of Audit & Supervisory
Board held in the fiscal year under review, as well as regularexchanges held between the Representative Director and President,
Outside Directors and the Audit & Supervisory Board Members. He
submitted questions mainly concerning finance and accounting, andexamined the execution of the Directors’ duties.

38

4. Accounting Auditor(1) Name

Deloitte Touche Tohmatsu LLC(2) Amount Paid as Remuneration to Accounting Auditor for the Fiscal Year
(Millions of yen)Type of remuneration

Amount paid

(1) Remuneration paid or payable to the Accounting Auditor concerning
the operation prescribed in the Certified Public Accountant Act, Article
2, Paragraph 1(2) Remuneration other than (1)266
2(3) Remuneration to be paid to the Accounting Auditor by the Company
and subsidiaries

268

Note: The Audit & Supervisory Board furnished its consent with respect to remuneration payable to the Accounting
Auditor upon having verified as necessary content of the Accounting Auditor’s audit plan, circumstances withrespect to performing duties of the accounting audit, the basis for calculating estimates of the remunerationand other such details.

(3) Policy on Dismissal or Non-Reappointment of Accounting Auditor
If the Company’s Audit & Supervisory Board recognizes a fact about the Accounting Auditor, as
the Company’s accounting auditor, that falls under the matters prescribed in each item of Article
340, Paragraph 1 of the Companies Act, it shall deliberate on the dismissal of the Accounting
Auditor based on the fact, and dismiss the Accounting Auditor based on the consent of all
members of the Audit & Supervisory Board.
If the Company’s Audit & Supervisory Board recognizes a fact deemed to show that the audit
quality and other standards of the Accounting Auditor, as the Company’s accounting auditor, areinsufficient for performing audit services, it shall deliberate on the non-reappointment of the
Accounting Auditor based on the fact, and resolve on an agenda item for the non-reappointmentof the Accounting Auditor to be submitted to the General Meeting of Shareholders.

(4) Non-Audit Services
The Company entrusts the Accounting Auditor with services that have involved the training
programs offered to financial officers of the Company and business companies as non-audit
services outside the scope of services prescribed in the Certified Public Accountant Act, Article 2,
Paragraph 1.

39

5. Corporate Governance and Company Policy, and Operational
Status(1) Corporate Framework Ensuring that Execution of Duties by Directors of theCompany Complies with Laws and Regulations and the Articles ofIncorporation, and Other Systems for Ensuring the Proper Business
Operation of the Corporate Group Consisting of the Company and its
Subsidiaries
In accordance with the Companies Act and the Enforcement Regulations of the Companies Act,
the Company has established Policy to develop its internal control system.
1)

Corporate framework ensuring that execution of duties by directors of the Company
complies with laws and regulations and the Articles of Incorporation, and other systems for
ensuring the proper business operation of the corporate group consisting of the Company
and its subsidiaries
i. To ensure that execution of duties by directors of the Company complies with laws andregulations and the Articles of Incorporation, and to ensure the proper business
operation of the Company and each Group company, the Company has established the“Group Corporate Philosophy” and the “Statement of Compliance.” The Representative
Director of the Company is responsible for ensuring that these two directives are fully
understood by directors of the Company and each Group company. At the same time,
directors shall perform their businesses in accordance with these directives.
ii. To ensure that the above directives are fully understood, the Company establishes“Compliance and Risk Committee” headed by the executive officer who oversees theGroup’s compliance framework and shall monitor the undertaking of the Group-wide
compliance and risk management. The Head of the committee shall monitor
compliance at the Company and each Group company and report the situation to theBoard of Directors of the Company.
iii. The Company shall develop a whistle-blower system for the Group to allow employees
to report any compliance violations by directors of the Company and each Group
company.
iv. In the “Corporate Stances” of the “Group Corporate Philosophy,” the Company shalldeclare its policy to thoroughly block any kind of relationship with antisocial forces andorganizations that pose a threat to the order and safety of civil life, and shall station
employees to perform related businesses in the CSR Department of the Company andeach Group company. The CSR Department makes systematic efforts in collaboration
with outside specialized institutions, such as police and attorneys, to prevent antisocial
forces from being involved in management and prevent possible damage caused byantisocial forces.

2)

Framework for storing and managing information related to execution of duties by directorsof the Company
Directors of the Company shall prescribe the retention period of the documents and thedivision in charge in the organization regulations and organization management
regulations and prepare, store and manage the material documents in relation to the
execution of duties by directors and minutes of each meeting.

3)

Policy and framework for managing risks of loss of the Company and its subsidiaries
i. The Company shall assign an executive officer (to serve concurrently as an executive
officer in charge of overall compliance management) to oversee Group-wide risk
40

management. Employees shall be stationed to perform related businesses in the CSR
Department of the Company and each Group company.
ii. The Company shall develop a “Risk Management Basic Policy” as the basis of risk
management. Each Group company shall also develop a “Risk Management Basic
Policy” on the basis of this policy.
iii. A key business segment representative company which shall play the primary role in
the Group companies, and large companies under the Companies Act, shall establish adivision in charge of risk management, and assign an officer in charge of the same. The
CSR Department of the Company shall oversee this, and monitor and manage risk
status at each Group company in a timely manner.
iv. The Company shall establish the Internal Audit Department to audit the implementation
status and the effectiveness of risk management at the Company and each Group
company.
4)

Framework ensuring the efficiency of execution of duties by directors of the Company andits subsidiaries
i. The Company shall adopt the executive officer system in order to realize the efficiencyof the management and the clarification of responsibility through the clear division ofmanagement decision-making, supervision and execution.
ii. The Company shall hold the Board of Directors Meeting more than once a month. In
addition, material matters to be deliberated at the Board of Directors Meeting shall be
discussed and examined at the management committee comprising full-time directors,
executive officers, and full-time audit & supervisory board members.
iii. The Company shall define in the organizational regulations the procedure and theofficer in charge with respect to the business operation based on the resolution of theBoard of Directors and at the management committee of the Company as well as theresolution of each Group company’s Board of Directors.

5)

Framework ensuring that execution of duties by directors and employees of the Company
and its subsidiaries complies with laws and regulations and the Articles of Incorporationi. To realize management in conformity with compliance at the Company and each Group
company, the Company and each Group company shall formulate “Corporate Stances”
and “Employee Credo of Conduct” as directives applicable to all employees. The
documents shall be distributed and training implemented.
ii. A key business segment representative company which shall play the primary role in
the Group companies, and large companies under the Companies Act, shall establish adivision in charge of compliance promotion, and assign an officer in charge of the same.
The CSR Department of the Company shall oversee this, and monitor and manage
compliance promotion status at each Group company in a timely manner.
iii. The Company shall establish the Internal Audit Department to audit the implementation
status and the effectiveness of compliance at the Company and each Group company.
iv. The Company shall hold “Compliance and Risk Committee” meetings regularly todevelop and promote specific measures to ensure compliance and monitor the
progress at the Company and each Group company.
v. The Company shall establish a whistle-blower system for the Group to develop an
environment in which compliance violations are promptly reported.

41

6)

Framework ensuring the proper business operation of the corporate group consisting of
the Company and its subsidiaries
i. To ensure the proper business operation of the Company and each Group company,
the Company shall establish “Group Corporate Philosophy.” The Company and eachGroup company shall formulate their company rules and execute business operations
accordingly.
ii. The Company shall assign an executive officer to be in charge of basic strategy forGroup-wide management, and station employees to perform related businesses at theManagement Strategy Department at the Company and each Group company.
iii. The Company, as a pure holding company, shall be responsible for the planning andcontrol of each Group company’s operation in accordance with the executive
management contract that prescribes the management duties that the Company will
execute with respect to each Group company.
iv. Each Group company shall execute business operations in accordance with the
management policy formulated by the Company, and shall obtain the approval of theCompany’s Board of Directors Meeting or the management committee in advance,
when executing material matters. In addition, all material management matters shall bereported to the Company’s related division.

7)

Appointment of supporting personnel, when audit & supervisory board members of theCompany request such personnel
The Internal Audit Department shall provide support to audit & supervisory board members
and personnel shall be appointed when deemed necessary in consultation with the Audit &Supervisory Board.

8)

Securing independence of the personnel in the preceding item from directors andeffectiveness of instructions from audit & supervisory board members
The personnel in the preceding item cannot hold a concurrent position that has the dutiesof planning or control of business operations. Accordingly, reassignment, evaluation, ordisciplinary action against the supporting personnel requires the approval of the Audit &Supervisory Board in advance.

9)

Framework for reporting to audit & supervisory board members by directors andemployees of the Company and framework for reporting to audit & supervisory board
members of the Company by directors, audit & supervisory board members andemployees of subsidiaries, or those who have received reports from the said persons
i. In addition to matters designated by law, directors and employees of the Company anddirectors, audit & supervisory board members and employees of each Group company
shall report the following to audit & supervisory board members of the Company without
delay.
a. Material violations of laws and regulations and the Articles of Incorporation as well
as misconduct, by directors or employees
b. Crucial information obtained through whistle blowingc. Other facts that threaten to cause significant losses to the Company and each Group
company
ii. The Company and each Group company shall create a framework to ensure that
persons who have reported to audit & supervisory board members of the Company andeach Group company are not treated disadvantageously because of the said report.

4210) Policy on procedures for advance payment or reimbursement of expenses incurred in theexecution of duties by audit & supervisory board members of the Company, and otherexpenses incurred in the said execution of duties, or handling of debts
The Company shall develop a policy regarding the handling of audit expenses and securea budget of a certain amount to cover audit expenses.
11) Framework ensuring the effectiveness of auditing by audit & supervisory board membersof the Company
i. In addition to the Board of Directors Meeting, audit & supervisory board members of theCompany may attend other important meetings, including those of the management
committee and the executive conference, and understand the process of important
decision-making and status of business operation, and provide necessary opinions.
ii. The Company shall establish regular meetings between audit & supervisory board
members and the representative director to exchange opinions.
iii. The Internal Audit Department of the Company shall report progress and results ofinternal audits of the Company and each Group company as necessary to audit &supervisory board members to realize a collaborative framework for effective audits.
iv. Audit & supervisory board members of the Company and each Group company shallexchange information and enhance collaboration throughout the Group at Group Audit& Supervisory Board Members’ Liaison Meetings.
v. The Company shall establish a liaison office for the Audit & Supervisory Board andGroup Audit & Supervisory Board Members’ Liaison Meetings in the Internal Audit
Department of the Company to promote efficient audits by audit & supervisory board
members of the Company and each Group company.
vi. The Company shall receive explanations on the contents of its accounts from the
Accounting Auditor as needed and exchange information to realize a collaborative
framework for effective audits.

(2) Operational Status of Systems for Ensuring Proper Business Operations
Details are provided as follows on the operational status of systems for ensuring proper
business operations.
1)

Execution of duties by directors
The Board of Directors holds 19 meetings which are attended by the directors and audit &supervisory board members. Those in attendance adopt resolutions on individual
proposals in accordance with decision-making standards, and also discuss matters andmake resolutions with respect to issues of managerial importance encompassing areas
such as growth strategy, investment, capital management policy and human resources
strategy.

(2) Compliance
The “Compliance and Risk Committee” meets once every quarter, with such meetings
attended by the Company’s executive officers in charge of ESG strategy, full-time audit &supervisory board members, outside attorneys at law, and managers in charge ofcompliance of major Group companies, and oversees Group-wide compliance initiatives
across the organization.

43

The Company has developed mechanisms for a whistle-blower system for the Group toallow employees to report compliance violations of the Company and each Group
company.
In order to raise awareness of compliance issues and call attention to such matters, allbusiness offices of the Company and each Group company display “Statement ofCompliance” posters which declare their vow to observe laws and regulations andcorporate ethics.
In addition, the Company has been taking steps to ensure that everyone is well aware that
all ties with antisocial forces must be rejected. To that end, such matters have been
stipulated in the “Group Corporate Philosophy” which outlines the Yamato Group’s
responsibilities to society and its stance toward issues in that regard, and furthermore
pamphlets detailing such content are distributed to all employees of the Company andeach Group company.
Additionally, in order to forge a robust corporate culture, the Company is working toestablish a comfortable working environment for employees through initiatives such as
reviewing management rules on working hours and creating new working styles, andimplement “reforming working styles” throughout the entire Group.
3)

Risk management
Managers in charge of compliance and risk oversight are stationed at the Company andeach Group company, and have been developing systems to address risk in a swift andharmonious manner.
When an emergency arises, the Company’s executive officers in charge of ESG strategy,
and its full-time audit & supervisory board members, are notified of the situation without
delay, through a Group-wide system for ensuring availability of up-to-the-minute details on
emergency matters.
In addition, the Company’s “Compliance and Risk Committee” considers key risks bysharing examples of such risks and discussing related measures.

4)

Audit structure
The Internal Audit Department of the Company and internal audit departments of majorGroup companies respectively check to make sure that business operations are being
performed effectively in accordance with the rules, and they accordingly develop
frameworks to immediately rectify matters when aberrations are found to exist.
Moreover, audit & supervisory board members of the Company and full-time audit &supervisory board members of each Group company hold monthly Group Audit &Supervisory Board Members’ Liaison Meetings. In so doing, they collaborate by sharing
information, and effectively monitor operations in a manner that is coordinated with Groupmanagement.

(3) Policy on Decision of Appropriation of Surplus
As a pure holding company, the Company conducts its business with the goal of maximizing theentire Group’s corporate value. Accordingly, with respect to the appropriation of surplus, theCompany’s policy is to pay dividends with the goal of having a payout ratio of 30% of profit
attributable to owners of parent. Retained earnings are used to facilitate the growth of the Group
as a whole through capital expenditure—to strengthen the network, one of our management
resources, and develop new businesses and products, for example—and investments are aimed44

at raising the corporate value in the future. Finally, the use of treasury shares is strategically
positioned for flexible utilization, such as M&A, as a part of our capital policy.

45

Consolidated Balance Sheet(As of March 31, 2019)(Millions of yen)

AssetsLiabilities

Cash and deposits

550,258
195,954

Notes and accounts payable - trade410,423
158,938

Notes and accounts receivable - trade
Accounts receivable - installment

220,159

Short-term loans payable

60,80044,802

Lease obligations

2,791

Lease receivables and investment
assetsInventories

54,537

Income taxes payable

23,747

3,247

Deferred installment income

5,341

Other

33,032

Provision for bonuses

35,844

Allowance for doubtful accounts(1,475)

Other122,961

Current assets

Current liabilities

573,401

Non-current liabilities

139,847

428,918

Bonds payable

10,000

Buildings and structures

147,950

Long-term loans payable

19,500Machinery and equipment

22,582

Lease obligations

20,142

Vehicles24,195

Deferred tax liabilities

4,180

Land

175,995

Retirement benefit liability

74,508

Leased assets

22,006

Other

11,515Construction in progress

8,391

Total liabilities

550,270

Other

27,796

Non-current assets
Property, plant and equipment

Intangible assets

20,624

Net assets

Software17,312

Shareholders’ equity

556,459

Other

3,311

Capital stock

127,234

123,858

Capital surplus

36,813

Investment securities

54,013Retained earnings

431,497

Long-term loans receivable

4,039

Treasury shares(39,085)

Leasehold deposits

18,342

Investments and other assets

Retirement benefit asset

161

Accumulated other comprehensive
income12,975

3,917

Valuation difference on available-for-salesecurities
Foreign currency translation adjustment(1,002)Remeasurements of defined benefit plans(3,078)Deferred tax assets

44,385

Other
Allowance for doubtful accounts

Non-controlling interests
Total net assets
Total assets

9,381

1,123,659

Total liabilities and net assets

46

(515)
7,547
573,388
1,123,659

Consolidated Statement of Income(From April 1, 2018 to March 31, 2019)(Millions of yen)
Operating revenue

1,625,315

Operating cost

1,513,988

Operating gross profit

111,327

Selling, general and administrative expenses

52,981

Operating profit

58,345Non-operating income
Interest and dividend income

1,036

Other

1,330
2,367

Non-operating expenses
Interest expenses

275

Share of loss of entities accounted for using equity method

4,872

Other

1,305
6,453

Ordinary profit

54,259Extraordinary income
Gain on sales of non-current assets

9Gain on sales of investment securities

37

Compensation for delay damages

1,775
1,822

Extraordinary losses
Loss on retirement of non-current assets

309

Impairment loss

2,087

Loss on valuation of investment securities

1,396

Other

30
3,823

Profit before income taxes

52,258

Income taxes-current

24,651

Income taxes-deferred

1,656
26,308

Profit25,949Profit attributable to non-controlling interests

267

Profit attributable to owners of parent

25,68247

Consolidated Statement of Comprehensive Income(From April 1, 2018 to March 31, 2019)(Millions of yen)
Profit25,949Other comprehensive income
Valuation difference on available-for-sale securities(115)

Foreign currency translation adjustment(1,661)Remeasurements of defined benefit plans, net of tax

2,541

Share of other comprehensive income of entities accounted for using equity method
Total other comprehensive income

273
1,038

Comprehensive income

26,987(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

48

26,577410

Consolidated Statement of Changes in Equity(From April 1, 2018 to March 31, 2019)(Millions of yen)
Shareholders’ equity
CapitalsurplusCapital stock
Balance as of April 1, 2018

127,234

Retainedearnings

36,813

Total
shareholders’equityTreasuryshares416,854(39,081)541,821

Changes of items during period
Dividends of surplus(11,039)

Profit attributable to owners of parent

25,682(11,039)
25,682

Purchase of treasury shares
Disposal of treasury shares

0

(4)

(4)

0

0

Net changes of items other thanshareholders’ equity
Total changes of items during period
Balance as of March 31, 2019–

0

14,642(4)

14,638127,234

36,813

431,497(39,085)

556,459(Millions of yen)
Accumulated other comprehensive income
Total
Valuation
Foreign
Remeasureaccumulateddifference on
currency
ments ofother
available-for-s translation
definedcomprehenale securities adjustment benefit plans
sive income
Balance as of April 1, 2018

12,9581,146(5,618)8,486

Non-contro
llinginterests

Total net
assets7,279

557,586

Changes of items during period
Dividends of surplus(11,039)

Profit attributable to owners of parent

25,682

Purchase of treasury shares(4)

Disposal of treasury shares0

Net changes of items other thanshareholders’ equity

16(1,661)

2,539

895

268

1,163

Total changes of items during period

16(1,661)

2,539

895

268

15,801

12,975(515)(3,078)

9,381

7,547

573,388

Balance as of March 31, 201949

Notes to Consolidated Financial Statements
1. Basis of Preparation of the Financial Statements(1) Amounts described are rounded down to the nearest million yen.
(2) Scope of Consolidation
1) Number of Consolidated Subsidiaries: 39
Names of major consolidated subsidiaries:
Yamato Transport Co., Ltd.

Okinawa Yamato Transport Co.,Ltd.

Yamato Global Express Co., Ltd.

Yamato Logistics Co., Ltd.

Yamato Global Logistics Japan
Co., Ltd.

YAMATO TRANSPORT U. S. A.,
INC.

Yamato Home Convenience Co., Yamato System Development Co., Yamato Financial Co., Ltd.
Ltd.
Ltd.
Yamato Lease Co., Ltd.

Yamato Autoworks Co., Ltd.

YAMATO BOX CHARTER CO.,LTD

YAMATO (CHINA) CO., LTD.

YAMATO INVESTMENT (HONG
KONG) LIMITEDYAMATO ASIA PTE. LTD.

Yamato Multi-Maintenance Solutions Co., Ltd. is excluded from the scope of consolidation effective fromthe fiscal year ended March 31, 2019, because it ceases to exist upon absorption-type merger having
been carried out with Yamato Logistics Co., Ltd., the surviving company.

2) Non-consolidated Subsidiaries, etc.
OTL ASIA SDN. BHD. and certain other subsidiaries are not included within the scope of
consolidation. The total assets, operating revenue, profit, and retained earnings of these
non-consolidated subsidiaries are immaterial and, even taken together as a group, they do notexert a significant influence on the consolidated financial statements.
(3) Application of Equity Method
1) Number of Affiliates Accounted for Using Equity Method: 17
Names of major equity method affiliates:
GD EXPRESS CARRIER BHD.

Packcity Japan Co., Ltd.

GUANGZHOU WISEPOWER
TRANSPORTATION &DISTRIBUTION GROUP CO.,LTD.

Effective from the fiscal year under review, GDEX PROPERTIES SDN. BHD. was included in
the scope of the equity method as GD EXPRESS CARRIER BHD., an affiliate accounted forusing the equity method, newly acquired its shares.
2) Non-consolidated Subsidiaries and Affiliates Not Accounted for Using Equity Method
Entities not subject to the equity method such as OTL ASIA SDN. BHD. and certain othernon-consolidated subsidiaries and YAMATO UNYU (THAILAND) CO., LTD. and certain otheraffiliated companies are excluded from the scope of entities accounted for using the equity
method because they do not exert a significant influence on the consolidated financial
statements even when taken together as a group, given immateriality of their profit (amountcorresponding to the ownership held by the Company), retained earnings (amountcorresponding to the ownership held by the Company) and other financial results.

50

3)

Special Note on the Application of Equity Method
The fiscal year-end dates of certain entities accounted for using the equity method differ fromthe consolidated fiscal year-end date, and accordingly the financial statements have been
prepared on the basis of the financial statements and provisional financial results for therespective fiscal years of each of those entities.

(4) Closing Date of Consolidated Subsidiaries
Of consolidated subsidiaries, YAMATO TRANSPORT U.S.A., INC., and other ten overseas
subsidiaries have December 31 as their financial year end. Financial statements as of this closing
date were used in the preparation of the consolidated financial statements. However, theconsolidated figures have been adjusted as required to reflect significant transactions occurring
between December 31, 2018 and March 31, 2019 that is the consolidated closing date.
(5) Accounting Policies
1) Valuation Basis and Methods for Securities
Available-for-sale securities
Securities with fair market value:

Securities without fair market value:

Stated at the fair market value based on thequoted market price as of the fiscal year end(valuation differences are recognized in net
assets; the cost of securities sold is themoving-average method)
Stated at the cost by moving-average method

2) Valuation Basis and Methods for Inventories
Stated at the cost by first-in first-out method (for the value stated in the balance sheet, bookvalue is written down based on the decreased profitability)3) Depreciation and Amortization Methods of Non-current Assets
Property, plant and equipment:
Declining-balance method(excluding leased assets)
However, the straight-line method is adopted forbuildings acquired on or after April 1, 1998
(excluding fixtures) and for facilities attached tobuildings and structures acquired on or after
April 1, 2016.
For overseas consolidated subsidiaries’ assets,straight-line method based on estimated useful
lives is adopted.
Intangible assets:(excluding leased assets)

Straight-line method
However, software is amortized by thestraight-line method over the estimated usefullife (five years).

Leased assets:

Straight-line method where the useful life ofleased assets shall be equal to the lease period
and their residual value shall be zero.

514) Accounting Method for Provision
Allowance for doubtful accounts:
The allowance for doubtful accounts is provided to prepare for loss from uncollectible
credits. For ordinary receivables, the amount is estimated using the rate based on thehistorical bad debt experience. For special receivables with higher uncertainty, collectivity
is considered on individual cases, and prospective uncollectible amount is provided.
Provision for bonuses:
The provision for bonuses is provided for payment of bonuses to employees based on an
amount expected to be paid.
This provision is not applicable for overseas consolidated subsidiaries.
5) Method of Accounting for Retirement Benefitsi.
Method of attributing expected retirement benefit to periods
In calculating the retirement benefit obligations, the straight-line basis is used indetermining the amount of the expected retirement benefit obligation attributed to service
performed up to the end of the fiscal year under review.
ii. Method of recognizing actuarial differences and prior service costs
The entire amount of prior service cost is recognized in profit or loss in the fiscal year
during which it arises.
Actuarial differences are recognized in profit or loss in the year following the year in whicha respective gain or loss arises, and are amortized proportionally on a straight-line basis
over a period (mainly five years), which is within the average remaining years of service ofthe eligible employees.
iii. Method of accounting for unrecognized actuarial difference
Unrecognized actuarial difference is accounted for in remeasurements of defined benefit
plans, after adjusting for tax effects, under accumulated other comprehensive income of
net assets.
6) Basis of Revenue Recognition
Deferred installment income
The prorated amounts for the shopping loan service are recognized as income when thedue date comes.
7) Accounting for Consumption Tax and Local Consumption Tax
The tax exclusion method is applied.
2. Changes in Presentation
Application of “Partial Amendments to Accounting Standard for Tax Effect Accounting”
The Group has applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting”(ASBJ Statement No. 28, February 16, 2018) effective from the beginning of the fiscal year ended
March 31, 2019. Accordingly, deferred tax assets were presented under “Investments and otherassets” and deferred tax liabilities were presented under “Non-current liabilities.”
3. Notes to the Consolidated Balance Sheet(1) Accumulated depreciation of property, plant and equipment: 506,728 million yen(2) Balance of liabilities on guarantee
Guarantee of obligation for debt financing:

191 million yen

52

4. Notes to the Consolidated Statement of Income
Impairment loss
During the fiscal year under review, the Yamato Group posted an impairment loss on the following
asset group.

Use of asset

Type of asset

Branch and distribution
center and other

Buildings andstructures
Leased assets andothersRegionHead Office of Yamato Home
Convenience Co., Ltd.
(Chuo-ku, Tokyo), Kansai
Management Branch (Osaka
City, Osaka) and thirteen
other premises
Other ten premises(Millions of yen)Amount of impairment loss

2,087

The Yamato Group has grouped the assets based on the classification in managerial accounting andthe unit in making investment decisions, with Yamato Transport Co., Ltd. treating primarily eachregional branch including subordinate branches and all base branches as one unit and the Company
and other consolidated subsidiaries based on the unit of department.
Although Yamato Transport Co., Ltd. previously grouped a regional branch and subordinate branches
as one unit, in light of changes to the scope of management due to organizational restructuring aimed
at business structure reform, these units have been changed to include all base branches ingroupings in addition to the regional branches, including subordinate branches.
During the fiscal year under review, the Group recognized a continuous decrease in profit and loss
arising from operating activities or significant declines in market prices for the asset group consistingof Head Office of Yamato Home Convenience Co., Ltd., Kansai Management Branch and 21 otherpremises, and it decreased the book value of the relevant asset group to the recoverable value andposted the relevant decrease of 2,087 million yen to extraordinary loss as an impairment loss.
A main breakdown of this decrease shows that 606 million yen was attributable to buildings andstructures, 453 million yen was attributable to leased assets and 451 million yen was attributable tovehicles.
If the recoverable value of such asset group is calculated based on value in use, the amount is valued
by discounting future cash flows with a discount ratio of 4.55%. Where the recoverable value iscalculated based on net realizable value, the amount is valued based mainly on real estate appraisal
standards, assessed value of property tax or the posted land price.

53

5. Notes to the Consolidated Statement of Changes in Equity(1) Class and Total Number of Issued Shares and Treasury Shares:(Thousands of shares)

Number of shares asof beginning of fiscal
year under review

Number of increased
shares in fiscal year
under review

Number of decreased
shares in fiscal year
under review

Number of shares asof end of fiscal year
under review

Common shares

411,339––

411,339Total

411,339––

411,339

17,0641

0

17,065

17,0641

0

17,065

Issued shares

Treasury shares
Common shares(Note)

Total

Note: The increase of one thousand shares of treasury shares of common shares resulted from an increase of one
thousand shares due to the purchase of shares less than one unit.
The decrease of 0 thousand shares of treasury shares of common shares resulted from a decrease of 0
thousand shares due to the sale of shares less than one unit.

(2) Dividends
1) Payments of dividends
Resolution

The Board of
Directors Meeting on
May 17, 2018
The Board of
Directors Meeting on
October 31, 2018

Type of shares

Total amount ofdividends

Dividend per
share

Millions of yen

Yen

Record date

Effective dateon and after

Commonshares5,519

14March 31, 2018

June 6, 2018

Commonshares5,519

14September 30, 2018

December 10, 2018

2) Dividends with a record date that falls within the fiscal year under review but an effective datestarting in the upcoming fiscal year
Resolution

Type ofsharesTotal amountof dividends

Source ofdividend

Millions of yen
The Board of
Directors Meetingon May 15, 2019

Commonshares5,519

Dividend per
share

Record date

Effective dateon and after

March 31, 2019

June 4, 2019

Yen

Retainedearnings

54

14

6. Notes to the Financial Instruments(1) Matters concerning the status of financial instruments
1) Policy on financial instruments
To finance further business growth, the Yamato Group raises capital through bank loans andbond issuances based on a facilities investment scheme that includes the network
development plan. One-time surplus funds are invested in safe financial assets. Derivative
products are mainly used for hedging against variable interest rate risk, and no speculativetransactions are undertaken.
Some of the Group’s consolidated subsidiaries are engaged in businesses such as leasing
and third-party credit sales.

2) Features and risks of financial instruments and risk management structure
Operating receivables such as notes and accounts receivable - trade and accounts receivable- installment carry credit risk of trading partners, and thus the Company manages and controls
cash received, as well as outstanding receivables, for each period to identify the credit risk ofeach trading partner.
Regarding investment securities, the Yamato Group mainly holds shares of companies withwhich the Group has business relationships or forms a capital alliance, and such shares
involve the risk of stock price fluctuations.
The majority of operating payables, such as notes and accounts payable - trade, are due
within one year.
Short-term loans payable and long-term loans payable are mainly used to raise capital for theGroup’s financial business. Most loans payable are procured at fixed rates of interest.
Within the Yamato Group, each Group company controls liquidity risk associated with
operating payables and loans by monitoring payments and settlements, bookkeeping, andbalances, as well as managing cash positions.

3) Supplemental remarks on the fair value of the financial instruments
The fair value of financial instruments refers to their market value or value reasonably
calculated based on certain assumptions if market value is not available. Therefore, theestimated fair value may vary with different assumptions.

55

(2) Matters concerning fair value of financial instruments
The table below shows the amounts recorded on the consolidated balance sheet as of March 31,
2019, their fair values, and differences between them. Some financial instruments are excluded
because it is extremely difficult to identify their fair value (see Note 5).
(Millions of yen)Amount on the
consolidated balance
sheet(1) Cash and deposits(2) Notes and accounts receivable trade
Allowance for doubtful accounts

Fair value

Difference

195,954–219,921(128)

38,33043,602

5,271

33,741

33,741–

195,954
220,159(108)
220,050(3) Accounts receivable - installment

44,802

Allowance for doubtful accounts(1,129)Deferred installment income[5,341](4) Investment securities
Available-for-sale securities
Shares of subsidiaries andassociates(5) Notes and accounts payable - trade

9,036

9,036

–

[158,938][158,938]–(6) Short-term loans payable[60,800][60,788](11)(7) Long-term loans payable[19,500][19,506]

6

Notes:

1.
2.
3.
4.

Items recognized as liabilities are shown in square parentheses [ ] both under Amount on the
consolidated balance sheet and Fair value.
Notes and accounts receivable - trade are presented after deducting allowance for doubtful accounts
set up for notes and accounts receivable - trade not payable in the short term.
Accounts receivable - installment is presented after deducting the relevant allowance for doubtful
accounts and deferred installment income.
Method of calculating fair value of financial instruments and other matters concerning securities.
(1) Cash and deposits
Because all deposits are short-term deposits and their fair values are approximately equal to theirbook values, fair value is the same as book value.
(2) Notes and accounts receivable - trade
Because notes and accounts receivable - trade are usually settled in a short period and their fairvalues are approximately equal to their book values, fair value is the same as book value. A portionof notes and accounts receivable - trade are grouped by classification categories and computed on
the basis of the present value of future cash flow discounted at a rate based on the yield ofJapanese Government Bonds.
(3) Accounts receivable - installment
The fair values of accounts receivable - installment are grouped by classification categories andcomputed on the basis of the present value of future cash flow discounted at the rate based onmarket interest rate.
(4) Investment securities
The fair values of listed equity shares in investment securities are based on quoted market prices.
(5) Notes and accounts payable - trade
As most notes and accounts payable - trade are due within one year and their fair values areapproximately equal to their book values, fair value is the same as book value.

56

5.

(6) Short-term loans payable and (7) Long-term loans payable
The fair value of short-term loans payable and long-term loans payable is computed as the present
value on the basis of the total amount of principal and interest discounted at the interest rateapplicable to new loans carrying the same conditions.
Financial instruments whose fair value is extremely difficult to determine(Millions of yen)Amount on the consolidatedbalance sheet

Classification
Investment securities
Shares of subsidiaries and associates

5,650

Others5,584

It is extremely difficult to determine the fair values of these financial instruments because they do nothave quoted market prices and their future cash flow cannot be estimated. Therefore, they are excluded
from (4) Investment securities.

7. Per Share Information(1) Net assets per share(2) Basic earnings per share

1,435.15 yen
65.14 yen57

Non-consolidated Balance Sheet(As of March 31, 2019)(Millions of yen)

AssetsCurrent assets
Cash and deposits
Operating accounts receivable
Short-term loans receivable
Income taxes receivable
Other

Non-current assets
Property, plant and equipment
VehiclesBuildings
Tools, furniture and fixtures
Land
Other

Liabilities
Current liabilities

178,599

Operating accounts payable
Short-term loans payable
Income taxes payable
Accrued expenses
Deposits received
Provision for bonuses
Other94,58478
79,725
3,615
596

Non-current liabilities

358,057
6,574
7
664
52
5,840
8

Bonds payable
Long-term loans payable
Deferred tax liabilities
Provision for retirement benefits
Other

Total liabilities
Intangible assets
Software
Other

Investments and other assets
Investment securities
Shares of subsidiaries and associates
Long-term loans receivable
Other
Allowance for investment loss

Total assets

Net assets
Shareholders’ equity

346
344
2

22,952
10,00010,0002,725
79
147
195,159

Capital stock
Capital surplus
Legal capital surplus
Other capital surplus
Retained earnings
Other retained earnings
General reserve
Retained earnings brought forward
Treasury shares

332,796
127,234
36,82236,8220207,824
207,824
188,965
18,858(39,085)

Valuation and translation adjustments

8,701

Valuation difference on available-for-salesecurities

8,701

351,136
24,840297,977
34,447156(6,286)536,657

172,206
1,070
30,000177
89140,34684
439

Total net assets

341,497

Total liabilities and net assets

536,657

58

Non-consolidated Statement of Income(From April 1, 2018 to March 31, 2019)(Millions of yen)
Operating revenue

29,445

Selling, general and administrative expenses

10,053Operating profit

19,391Non-operating income
Interest and dividend income

1,139

Other

27
1,167

Non-operating expenses
Interest expenses

70

Other

145
216

Ordinary profit

20,342Extraordinary income
Gain on sales of investment securities

37

Other

0
37

Extraordinary loss
Loss on valuation of investment securities

38

Loss on valuation of shares of subsidiaries and associates

20,361

Provision of allowance for investment loss

4,415

Other

0
24,815

Loss before income taxes

4,435

Income taxes-current

690

Income taxes-deferred

189
880

Loss

5,316

59

Non-consolidated Statement of Changes in Equity(From April 1, 2018 to March 31, 2019)(Millions of yen)
Shareholders’ equity
Retained earnings
Other retained earnings

Capital surplus
Capital stock

Balance as of April 1, 2018
Changes of items during
periodDividends of surplus
Loss
Purchase of treasury shares
Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance as of March 31, 2019

127,234

Legal capitalsurplus

Other capitalsurplus

Total capitalsurplus36,822036,822

Generalreserve

Retained earnings
brought forward

188,965

35,215(11,039)(5,316)
0

0

–

–

0

0

–

(16,356)

127,234

36,822036,822

188,965

18,858(Millions of yen)
Shareholders’ equity

Balance as of April 1, 2018
Changes of items during
periodDividends of surplus
Loss
Purchase of treasury shares
Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance as of March 31, 2019

Retainedearnings
Total retained
earnings
224,181

Treasury shares

Total
shareholders’equity(39,081)349,156(4)
0(11,039)(5,316)(4)
0(11,039)(5,316)

Valuation andtranslation
adjustments
Valuationdifference on
available-for-salesecurities
9,256

Total net assets

358,413(11,039)(5,316)
(4)
0
(554)

(554)

(16,356)(4)(16,360)(554)(16,915)

207,824(39,085)332,796

8,701

341,49760

Notes to Non-consolidated Financial Statements
1. Amounts described are rounded down to the nearest million yen.
2. Summary of Significant Accounting Policies(1) Valuation Basis and Methods for Securities
Available-for-sale securities
Securities with fair market value:

Stated at the fair market value based on the quoted
market price as of the fiscal year end (valuationdifferences are recognized in net assets; the costof securities sold is the moving-average method)

Securities without fair market value:

Stated at the cost by moving-average method

Shares of subsidiaries and associates

Stated at the cost by moving-average method(2) Depreciation and Amortization Methods of Non-current Assets
Property, plant and equipment:

Primarily the straight-line method

Intangible assets:

Straight-line method, but software is amortized by
the straight-line method over the estimated usefullife (five years).

(3) Accounting Method for Provision
Provision for bonuses:
The provision for bonuses is provided for payment of bonuses to employees based on an
amount expected to be paid.
Allowance for investment loss:
To prepare for devaluation loss of investments, etc. in subsidiaries and associates, allowances
are provided considering the financial position and recoverability of the relevant subsidiary or
associate.
Provision for retirement benefits:
To provide for employees’ retirement benefits, provision for retirement benefits is recorded
based on the projected retirement benefit obligations and related pension assets as of the endof the fiscal year ended March 31, 2019.
i.

ii.

Method of attributing expected retirement benefit to periods
In calculating the retirement benefit obligations, the straight-line basis is used indetermining the amount of the expected retirement benefit obligation attributed to service
performed up to the end of the fiscal year under review.
Method of recognizing actuarial differences
Actuarial differences are recognized in profit or loss in the year following the year in whicha respective gain or loss arises, and are amortized proportionally on a straight-line basis
over a period of five years, which is within the average remaining years of service of theeligible employees.

61(4) Method of Accounting for Retirement Benefits
The method of accounting for unrecognized actuarial differences on retirement benefits is different
to the method in the consolidated financial statements.
(5) Accounting for Consumption Tax and Local Consumption Tax
The tax exclusion method is applied.

3. Changes in Presentation
Application of “Partial Amendments to Accounting Standard for Tax Effect Accounting”
The Company has applied the “Partial Amendments to Accounting Standard for Tax Effect Accounting”(ASBJ Statement No. 28, February 16, 2018) effective from the beginning of the fiscal year ended
March 31, 2019. Accordingly, deferred tax assets were presented under “Investments and otherassets” and deferred tax liabilities were presented under “Non-current liabilities.”
4. Notes to the Non-consolidated Balance Sheet(1) Accumulated depreciation of property, plant and equipment:
515 million yen(2) Balance of liabilities on guaranteei.
Joint and several guarantee based on clearing agreementswith other transportation companies:
300 million yen
ii. Guarantee of obligation for debt financing
413 million yen(3) Loans receivable from, and loans payable to, subsidiaries and associates
Short-term loans receivable:
80,092 million yen
Long-term loans receivable:
33,355 million yen
Short-term loans payable:
140,649 million yen
5. Notes to the Non-consolidated Statement of Income
Transaction with subsidiaries and associates:

Operating revenue
Operating expenses
Non-operating transactions

62

29,408 million yen
1,842 million yen
624 million yen

6. Notes to the Non-consolidated Statement of Changes in Equity
Class and Total Number of Treasury Shares:(Thousands of shares)
Number of shares as ofbeginning of fiscal year
under review

Common shares(Note)

Number of increased
shares in fiscal year
under review

17,064

Number of decreased
shares in fiscal year
under review

Number of shares as ofend of fiscal year underreview

0

17,0651

Note: The increase of one thousand shares of treasury shares of common shares resulted from an increase of one
thousand shares due to the purchase of shares less than one unit.
The decrease of 0 thousand shares of treasury shares of common shares resulted from a decrease of 0
thousand shares due to the sale of shares less than one unit.

7. Notes to Tax Effect Accounting
Detailed deferred tax assets and deferred tax liabilities(Millions of yen)
Deferred tax assets
Provision for bonuses

25

Accrued enterprise tax

23

Provision for retirement benefits

24

Loss on valuation of investment securities

1,276

Shares of subsidiaries and associates

45,683

Loss carried forward

27

Other

2,051

Deferred tax assets

Subtotal

Allowance for devaluation

49,112(48,966)

Deferred tax assets

Total

145

Deferred tax liabilities
Valuation difference on available-for-sale securities(2,844)

Other

(26)

Deferred tax liabilities

Total

Net deferred tax assets (liabilities)(2,871)(2,725)63

8. Notes to Dealings with Related Parties
Subsidiaries, etc.
Status

Subsidiaries
Subsidiaries

Company
Yamato Transport
Co., Ltd.
Yamato Global
Express Co., Ltd.

Location(Millions of yen)
CapitalMain business

Chuo-ku, Tokyo

50,000

Minato-ku,
Tokyo

1,000

Subsidiaries

Yamato Global
Logistics Japan
Co., Ltd.

Subsidiaries

Yamato System
Development Co.,Ltd.

Subsidiaries

Yamato Financial
Co., Ltd.

Subsidiaries

Yamato Credit &Finance Co., Ltd.

Subsidiaries

Yamato Lease
Co., Ltd.

Toshima-ku,
Tokyo

30

Subsidiaries

YamatoAutoworks Co.,Ltd.

Chuo-ku, Tokyo30

Chuo-ku, Tokyo

Koto-ku, Tokyo

1,880

1,800

Chuo-ku, Tokyo

1,000

Toshima-ku,
Tokyo

500

64

TA-Q-BIN;
Kuroneko DM-Bin
Domestic air cargotransport business
International air
cargo and marine
cargo transportbusiness
Systemdevelopment
Settlement service
for payment ofmerchandise
Installment credit
and financeservices
General leaseservices
Vehiclemanagement
service businessDirect holdings
100.00%Relationship
Concurrent
positions held byofficers
Concurrent 3
persons

Direct holdings
100.00%Concurrent 1
personDirect holdings
100.00%Concurrent 2
persons

Direct holdings
100.00%Concurrent 2
persons

Direct holdings
100.00%Concurrent 2
persons

Direct holdings
70.00%

Concurrent 1
personDirect holdings
100.00%None

Direct holdings
100.00%Concurrent 1
personHolding ofvoting rights

(Millions of yen)
StatusCompany

Subsidiaries

Subsidiaries

Subsidiaries

YamatoTransport Co.,Ltd.

Yamato Global
Express Co., Ltd.

Yamato Global
Logistics Japan
Co., Ltd.

Relationship
Businessrelationships

Executive
management
Loans for funding

Executive
management

Executive
management
Loans for funding

Executive
management
Subsidiaries

Yamato System
Development
Co., Ltd.

Subsidiaries

Yamato Financial
Co., Ltd.

Subsidiaries

Yamato Credit &Finance Co., Ltd.

Subsidiaries

Subsidiaries

Notes:

Yamato Lease
Co., Ltd.
YamatoAutoworks Co.,Ltd.

Entrusted withsystem operationand management

Executive
management
Executive
management
Loans for funding
Executive
management
Loans for funding
Executive
management

Dealings
Receipt ofexecutive
management fee
Repayment ofworking capital
Repayment ofloans for capitalfunding
Receipt ofinterest
Funding
Payment ofinterest
Funding
Payment ofinterest
Repayment ofworking capital
Loans for capitalfunding
Repayment ofloans for capitalfunding
Receipt ofinterest
Funding
Payment ofinterest
Payment ofsystem operationand maintenancecosts
Funding
Payment ofinterest
Loans for working
capitalReceipt ofinterest
Loans for working
capitalReceipt ofinterest
Funding
Payment ofinterest

Dealingamount5,355

Account item—

Balance at
end of period
—

8,676
7,589

Short-term loans
receivable
Long-term loans
receivable

9,972
2,864

Deposits
received

67,304

Deposits
received

6,851

Short-term loans
receivable
Long-term loans
receivable

1,933
5,550

Deposits
received

15,417

Operatingaccounts
payable212

Deposits
received

30,530

Short-term loans
receivable

6,852

Short-term loans
receivable
Long-term loans
receivable

55,50620,000

Deposits
received

7,990

45
27,857
6
691
0
63
5,550
2,804
14
1,431
1

1,243

2,588
1
6,852
2
32,52468
1,587
0

Trade terms and decision policy of the dealing
1) The executive management fee is determined reasonably through mutual consultation, considering thebusiness contents, etc.
2) Interest on deposits received and loans receivable is determined based on market interest rates.
3) System operation and maintenance costs are determined through mutual consultation in the same way
as for general transactions.
4) The amount of “Funding” records the net gain or loss during the period.
5) Of loans for working capital to Yamato Global Logistics Japan Co., Ltd., Yamato Credit & Finance Co., Ltd.
and Yamato Lease Co., Ltd., the dealing amount of short-term loans receivable records the net amount of
increase or decrease during the period.

9. Per Share Information(1) Net assets per share(2) Loss per share

866.14 yen
13.49 yen

65

(TRANSLATION)

Audit Report of Accounting Auditor on Consolidated Financial Statements

Independent Auditors’ Report
May 8, 2019
Deloitte Touche Tohmatsu LLC

Yoshihiro Tsuda
Designated Limited Liability andEngagement Partner
Certified Public Accountant(seal)
Yoshihiro Ishida
Designated Limited Liability andEngagement Partner
Certified Public Accountant(seal)To the Board of Directors of Yamato Holdings Co., Ltd.
We have audited the consolidated financial statements, namely, the Consolidated Balance Sheet,
Consolidated Statement of Income, Consolidated Statement of Changes in Equity, and Notes to theConsolidated Financial Statements of Yamato Holdings Co., Ltd. for the consolidated fiscal year from
April 1, 2018 to March 31, 2019, in accordance with the Companies Act, Article 444, Paragraph 4.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in conformity with accounting principles generally accepted in Japan, and for suchinternal control as management determines is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our
audit. We conducted our audit in accordance with auditing standards generally accepted in Japan.
Those standards require that we plan and perform 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 disclosuresin the consolidated financial statements. The procedures selected depend on the auditor’s judgment,
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, the auditor considers
internal control relevant to the preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the circumstances, but not forthe purpose of expressing an opinion on the effectiveness of the internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness ofaccounting estimates made by management, as well as evaluating the overall presentation of theconsolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.

66

Audit Opinion
In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Yamato Holdings Co., Ltd. and its consolidated subsidiaries for the
related consolidated fiscal year, and the results of their operations for the year then ended inconformity with accounting principles generally accepted in Japan.
Interest
Our firm and the engagement partners do not have any interest in the Company for which disclosure
is required under the provisions of Certified Public Accountant Act.
End
The above represents a translation, for convenience only, of the original report issued in theJapanese language.

67

(TRANSLATION)

Audit Report of Accounting Auditor on Non-consolidated Financial Statements

Independent Auditors’ Report
May 8, 2019
Deloitte Touche Tohmatsu LLC
Yoshihiro Tsuda
Designated Limited Liability andEngagement Partner
Certified Public Accountant(seal)
Yoshihiro Ishida
Designated Limited Liability andEngagement Partner
Certified Public Accountant(seal)To the Board of Directors of Yamato Holdings Co., Ltd.
We have audited the non-consolidated financial statements, namely, the Non-consolidated Balance
Sheet, Non-consolidated Statement of Income, Non-consolidated Statement of Changes in Equity,
and Notes to Non-consolidated Financial Statements of Yamato Holdings Co., Ltd., for the 154th
business year from April 1, 2018 to March 31, 2019, in accordance with the Companies Act, Article
436, Paragraph 2, Item (1).
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of non-consolidated financial
statements and accompanying detailed statements in conformity with accounting principles generally
accepted in Japan, and for such internal control as management determines is necessary to enable
the preparation of non-consolidated financial statements and accompanying detailed statements thatare free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the non-consolidated financial statements andaccompanying detailed statements based on our audit. We conducted our audit in accordance withauditing standards generally accepted in Japan. Those standards require that we plan and performthe audit to obtain reasonable assurance about whether the non-consolidated financial statements
and accompanying detailed statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the non-consolidated financial statements and accompanying detailed statements. The procedures
selected depend on the auditor’s judgment, including the assessment of the risks of material
misstatement of the non-consolidated financial statements and accompanying detailed statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal
control relevant to the preparation and fair presentation of the non-consolidated financial statements
and accompanying detailed statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theinternal control. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by management, as well as evaluating the68overall presentation of the non-consolidated financial statements and accompanying detailed
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Audit Opinion
In our opinion, the non-consolidated financial statements and accompanying detailed statements
referred to above present fairly, in all material respects, the financial position of Yamato Holdings Co.,
Ltd. for the business year under review, and the results of its operations for the year then ended inconformity with accounting principles generally accepted in Japan.
Interest
Our firm and the engagement partners do not have any interest in the Company for which disclosure
is required under the provisions of Certified Public Accountant Act.
End
The above represents a translation, for convenience only, of the original report issued in theJapanese language.

69

(TRANSLATION)

Audit Report of the Audit & Supervisory Board

AUDIT REPORTthRegarding the performance of duties by the Directors for the 154 business year from April 1, 2018 toMarch 31, 2019, the Audit & Supervisory Board hereby submits its audit report, which has been preparedthrough discussions based on the audit report prepared by each Audit & Supervisory Board Member.
1. Auditing Methods Employed by the Audit & Supervisory Board Members and Audit & Supervisory Board
and Details of Such Methods(1) The Audit & Supervisory Board established auditing policies, allocation of duties, and other relevant
matters, and received reports from Audit & Supervisory Board Members regarding their audits andresults thereof, as well as received reports from the Directors, other relevant personnel, andAccounting Auditors regarding performance of their duties, and sought explanations as necessary.
(2) Each Audit & Supervisory Board Member complied with the auditing standards of Audit & Supervisory
Board Members established by the Audit & Supervisory Board, followed the auditing policies, allocationof duties, and other relevant matters, communicated with the Directors, the internal audit division, other
employees, and any other relevant personnel, and made efforts to optimize the environment for
information collection and audit. We have executed the audit based on the following methods.
1) Each Audit & Supervisory Board Member participated in the Board of Directors Meetings andother important meetings, received reports from the Directors, employees, and other relevant
personnel regarding performance of their duties, sought explanations as necessary, examined
important authorized documents and associated information, and studied the operations andfinancial positions. With respect to subsidiaries, we communicated and exchanged information
with Directors, Audit & Supervisory Board Members, and other relevant personnel of thesubsidiaries, and received business reports from subsidiaries as necessary.
2) We received periodic reports from Directors and employees and sought explanations asnecessary on the details of the resolution of the Board of Directors related to the provision of asystem described in paragraphs 1 and 3 of Article 100 of the Companies Act Enforcement
Regulations that not only ensures Directors are carrying out their duties indicated in thebusiness report in compliance with laws and regulations and the Articles of Incorporation, butalso ensures the propriety of the work activities of the corporate group consisting of theCompany and its subsidiaries. We also received periodic reports from Directors andemployees, sought explanations and expressed an opinion as necessary on the status ofdevelopment and operation of the system (internal control system) put in place in accordancewith the aforesaid resolution.
3) Furthermore, we monitored and verified whether the Accounting Auditors maintained their
independence and implemented appropriate audits, and we received reports from the
Accounting Auditors regarding the performance of their duties and sought explanations asnecessary. In addition, we received notice from the Accounting Auditors that “the system forensuring that duties are performed properly” (matters set forth in each Item of Article 131 of the
Accounting Rules) is organized in accordance with the “product quality management standards
regarding audits” (Business Accounting Council, October 28, 2005) and other relevant
standards, and sought explanations as necessary.
Based on the above methods, we examined the business report and supporting schedules,
non-consolidated financial statements (Non-consolidated Balance Sheet, Non-consolidated Statement of
Income, Non-consolidated Statement of Changes in Equity, and Notes to the Non-consolidated Financial
Statement) and supporting schedules, as well as consolidated financial statements (Consolidated Balance70Sheet, Consolidated Statement of Income, Consolidated Statement of Changes in Equity, and Notes to
the Consolidated Financial Statements) related to the relevant business year.
2. Audit Results(1) Results of Audit of Business Report and Other Reference Documents
1) In our opinion, the business report and supporting schedules are in accordance with therelated laws and regulations and Articles of Incorporation, and fairly represent the Company’s
condition.
2) With regard to the performance of duties by the Directors, we have found no evidence ofwrongful action or material violation of related laws and regulations, nor of any violation withrespect to the Articles of Incorporation.
3) In our opinion, the contents of the resolutions of the Board of Directors regarding the internal
control system are fair and reasonable. In addition, we have found no matters on which toremark in regard to the performance of duties of the Directors regarding the internal control
system. Furthermore, as stated in the Business Report, it has been revealed that theCompany’s subsidiary Yamato Home Convenience Co., Ltd. inappropriately billed corporateclients. The Audit & Supervisory Board recognizes that the Company is engaged in the drastic
and comprehensive rebuilding of Group governance with the aim of enhancing sound Groupmanagement spearheaded by the Group Governance Project established at the Company, andwe will pay close attention to the status of its implementation.
(2) Results of Audit of Non-consolidated Financial Statements and Supporting Schedules
In our opinion, the methods and results employed and rendered by the Accounting Auditor, Deloitte
Touche Tohmatsu LLC, are fair and reasonable.
(3) Results of Audit of Consolidated Financial Statements
In our opinion, the methods and results employed and rendered by the Accounting Auditor, Deloitte
Touche Tohmatsu LLC, are fair and reasonable.

May 10, 2019

Audit & Supervisory Board, Yamato Holdings Co., Ltd.
Full-time Audit &Supervisory
Board Member
Full-time Audit &Supervisory
Board Member
Outside Audit &Supervisory
Board Member
Outside Audit &Supervisory
Board Member

71

Etsuo Ogawa(seal)

Mamoru Matsuno(seal)

Hiroyuki Kanae(seal)

Takashi Yamashita(seal)

Access to the Venue
Date and time:

Tuesday, June 25, 2019, 10:00 a.m. (The reception desk will open
at 9:00 a.m.)
Meeting venue: Ginza Blossom (Chuo Kaikan) Hall
15-6, Ginza 2-chome, Chuo-ku, Tokyo
TEL:
03-3542-8585
Please note that the venue of the 154th Ordinary General Meeting of Shareholders
has been changed from last year.
Tokyo Metro
Yurakucho Line: 3 minutes walk from Shintomicho Station (Exit 1)
Hibiya Line: 10 minutes walk from Higashi-ginza Station (Exit 5)
Ginza Line: 15 minutes walk from Ginza Station (Exit A12)
Toei Subway
Asakusa Line: 10 minutes walk from Higashi-ginza Station (Exits A7 or A8)
JR
Yamanote Line and Keihin-Tohoku Line: 20 minutes walk from Yurakucho Station(Central Exit)
Note: Vehicle parking will not be available at the meeting venue.

72