rd

The following is an English translation of the Notice of the 153 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 5, 2018

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

Notice of the 153rd Ordinary General Meeting of Shareholders
You are cordially invited to attend the 153rd 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., Wednesday,June 27, 2018.

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., Wednesday,June 27, 2018.
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., Wednesday, June 27, 2018.

1

The 153rd Ordinary General Meeting of Shareholders
1. Date and Time:Thursday, June 28, 2018, 10:00 a.m.

2. Venue:

B1F Hall, Belle Salle Shiodome,
Sumitomo Realty & Development Shiodome Hamarikyu
Building
21-1, Ginza 8-chome, Chuo-ku, Tokyo(Please note that the venue of the 153rd 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 153rd Fiscal Year (from April 1, 2017 toMarch 31, 2018)2.

Report of the Non-consolidated Financial Statements for the
153rd Fiscal Year (from April 1, 2017 to March 31, 2018)

Matters to be resolved:
Agenda Item 1:
Election of Ten (10) Directors
Agenda Item 2:
Election of One (1) Audit & Supervisory Board Member
Agenda Item 3:
Revision of Remuneration Amount for Directors
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
1. Access procedures by PC and mobile phone
STEP 1

Access the website.
https://soukai.mizuho-tb.co.jp/(for mobile phones)
STEP 2Enter “Exercise of Voting Rights Code” for the next step.
“Exercise of Voting Rights Code” and the “Password” are printed on the enclosed Voting
Rights Exercise Form.

STEP 3Enter “Password” for registration.
It is necessary for you to change your password when you log in for the first time. Please
enter a new password to go to the screen of registration and voting.

STEP 4Enter “for” or “against” in accordance with the guidance on the screen.

2. Regarding Exercise of Voting Rights via the Internet
1) The deadline for voting is 5 p.m. (Japan Standard Time) on Wednesday, June 27, 2018. The
Company kindly requests that you enter your vote early.
2) If you exercise your voting rights, both by mail and via the Internet, only your vote exercised via theInternet shall be deemed effective. If you exercise your voting rights several times via the Internet,
only your final vote shall be deemed effective.
3) Your password (including the password after you have changed it) shall be effective only for this
General Meeting of Shareholders. At the time of the next General Meeting of Shareholders, a new
password will be issued.
4) You shall bear your own expenses for connection to the Internet.
(Notes)・ The password is a means to confirm that the person voting is the relevant shareholder. The
Company will not contact you to ask for your password.
・ If you enter your password incorrectly for a certain number of times, the password will be locked
and you will no longer be able to use it. If this occurs, please complete the procedures indicated in
the guidance on the screen.
・ Although operational checks have been carried out for the Exercise of Voting Rights Website forcommon Internet connection equipment, there is a possibility that you may be unable to use thesite due to the equipment you are using.
[For your inquiries]
If you have any inquiries, please contact the Securities Agent Dept. of Mizuho Trust & Banking Co.,
Ltd., which is the Company’s shareholder registry administrator, as shown below.
1) Inquiries regarding operation of the Exercise of Voting Rights Website:
Tel: 0120－768－524 (toll free only from Japan) (Business hours: 9 a.m. to 9 p.m. on weekdays)
2) Inquiries regarding share procedures other than the above:Tel: 0120－288－324 (toll free only from Japan) (Business hours: 9 a.m. to 5 p.m. on weekdays)

3. Exercise of Voting Rights via the ICJ Electronic Voting Platform
Institutional investors may use the ICJ platform to electronically exercise the voting rights for this
General Meeting of Shareholders.

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

Election of Ten (10) Directors

The terms of all the eight (8) Directors will expire at the close of this General Meeting of
Shareholders. Accordingly, we would like to propose the election of ten (10) Directors tostrengthen our management structure geared to enhance our management foundations in order
to continue achieving sustainable growth of the Yamato Group.
The following are the candidates for Directors.
Please note that Mr. Toshitaka Hagiwara, Mr. Masakatsu Mori, Ms. Mariko Tokuno and Mr.
Yoichi Kobayashi are candidates for Outside Directors.
No.

Current Position

Name of Candidate

Attributes of Candidate

at the Company

1

Makoto Kigawa

Directorand Chairman

Reelection

2

Masaki Yamauchi

Representative Director,
President and Executive Officer

Reelection

3

Haruo Kanda

Representative Director,
Vice President and Executive
Officer

Reelection

4

Hitoshi Kanamori

Representative Director,
Vice President and Executive
Officer

Reelection

5

Kenichi Shibasaki

Senior Managing Executive Officer

New election

6

Yutaka Nagao

Director,
Executive Officer

Reelection

7

Toshitaka Hagiwara

DirectorReelection
OutsideIndependent

8

Masakatsu Mori

DirectorReelection
OutsideIndependent

9

Mariko Tokuno

DirectorReelection
OutsideIndependent

10

Yoichi Kobayashi

New election New candidates for Directors

New election Outside
Independent

Reelection Candidates for Directors to be reelected

Independent Independent officers

4

Outside Candidates for Outside Directors

[Reference]“Policies and procedures for the Board of Directors in appointing senior management
members and nominating candidates for positions as Directors and Audit & Supervisory
Board Members”
Nominations are made following deliberations by the Nomination and Compensation Committee,
which comprises over half Outside Officers, regarding whether the candidate has abundant
experience and considerable insight relating to corporate management and business promotion,
has a sense of humanity from observing and evaluating from diverse perspectives, is able tograsp the essence of the issues facing the Company, and has capabilities that will enhance ourmanagement structure.

5

No.

Name of Candidate(Date of Birth)

Brief Background, Position and Responsibility at the Company(Important Concurrent Positions at Other Organizations)Apr. 1973
Apr. 2004

Apr. 2005
Jun. 2005
Nov. 2005
Apr. 2006
Jun. 2006
Reelection
Makoto Kigawa(Dec. 31, 1949)
1Mar. 2007
Mar. 2007
Jun. 2008
Apr. 2011

Joined the Fuji Bank, Limited
Managing Director, Chief Risk Officer / Head of Risk
Management Group, and Chief Human Resources
Officer / Head of Human Resources Group of
Mizuho Corporate Bank, Ltd.
Joined the Company
Managing Director
Representative Managing Director
Representative Director and Managing Executive
Officer
Representative Director and Senior Managing
Executive Officer
Representative Director and Executive Officer
Representative Director, President and Executive
Officer of Yamato Transport Co., Ltd.
Director and Executive Officer of the Company
Representative Director, President and Executive
Officer
Representative Director and Chairman
Director and Chairman (current)

Attendance to theBoard of Directors Apr. 2015
Apr. 2018
Meetings
FY2018:(Important Concurrent Positions at Other Organizations)
18/18 (100%)
Outside Director of Komatsu Ltd.

[Reasons for nomination as a candidate for Director]
Mr. Makoto Kigawa draws on the abundant business experience andconsiderable insight he has gained outside the Company, andfurthermore possesses experience and achievements developed in
the course of taking on leadership roles in Group management. In
that regard, he had been acting as Representative Director andChairman of the Company from April 2015 to March 2018, after
having served as Representative Director and President of theCompany’s subsidiary Yamato Transport Co., Ltd. andRepresentative Director and President of the Company. Accordingly,
in order to maintain and enhance an entire management balance as
Director and Chairman, the Company proposes his reelection as
Director.

6

Number of
SharesOwned

64,000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

Reelection
Masaki Yamauchi(Jan. 11, 1961)
2

Mar. 2007
Mar. 2007
May 2007
Apr. 2008
Apr. 2011

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 (current)

Jun. 2011
Attendance to theApr. 2015
Board of Directors
Meetings
FY2018:(Important Concurrent Positions at Other Organizations)
18/18 (100%)
None[Reasons for nomination as a candidate for Director]
Mr. Masaki Yamauchi possesses experience and achievements
developed in the course of taking on leadership roles in Groupmanagement. In that regard, he has been acting as Representative
Director and President of the Company since April 2015, 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, the Company proposes his
reelection as Director.

7

Number of
SharesOwned

36,400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

Reelection
Haruo Kanda(Sep. 26, 1952)
3

Apr. 2013
Apr. 2014

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 (current)

Apr. 2015
Attendance to theBoard of Directors(Important Concurrent Positions at Other Organizations)Meetings
None
FY2018:18/18 (100%)[Reasons for nomination as a candidate for Director]
Mr. Haruo Kanda possesses experience and achievements
developed in the course of taking on leadership roles in Groupmanagement. In that regard, he has been acting as Representative
Director, Vice President 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

27,200No.

Name of Candidate(Date of Birth)

Brief Background, Position and Responsibility at the Company(Important Concurrent Positions at Other Organizations)Apr. 1979
Feb. 1996
Apr. 2006
Apr. 2007
Apr. 2008
Apr. 2009
Apr. 2011
Apr. 2011
Reelection
Hitoshi Kanamori(Oct. 2, 1952)
4

Apr. 2015
Apr. 2017

Joined Yamato System Development Co., Ltd.
General Manager of System Equipment Sales
Division
General Manager of Division of Information
Systems of Yamato Transport Co., Ltd.
Executive Officer, General Manager of Management
StrategyManaging Executive Officer
Representative Director and Managing Executive
Officer
Executive Officer of the Company
Representative Director, President and Executive
Officer of Yamato Logistics Co., Ltd.
Senior Managing Executive Officer of the Company
Responsible for Key Account Management andCoordinator-General of Management Strategy,
Global Business Strategy, IT Strategy
Director and Senior Managing Executive Officer
Representative Director, Vice President andExecutive Officer (current)

Jun. 2017
Attendance to the Apr. 2018
Board of Directors
Meetings
FY2018:(Important Concurrent Positions at Other Organizations)None
14/14 (100%)[Reasons for nomination as a candidate for Director]
Mr. Hitoshi Kanamori possesses experience and achievements
developed in the course of taking on leadership roles in Groupmanagement. In that regard, he has been acting as Senior
Managing Executive Officer since April 2015 and Director andSenior Managing Executive Officer since June 2017, supervisingadministrative departments responsible for management strategy,
global business strategy, and IT strategy after having served as
Executive Officer of the Company’s subsidiary Yamato Transport
Co., Ltd., and Representative Director and President of theCompany’s subsidiary Yamato Logistics Co., Ltd. Since April 2018,he has been serving as Representative Director, Vice President andExecutive Officer. Accordingly, In order to improve corporate value of
the Group, the Company proposes his reelection as Director.

9

Number of
SharesOwned

15,200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

New election
5

Kenichi Shibasaki(Oct. 16, 1955)

Apr.
Apr.
Apr.
Apr.

2006
2012
2016
2017

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 (current)
Responsible for Financing Strategy and
Coordinator-General of Investor Relations Strategy(current)(Important Concurrent Positions at Other Organizations)
None[Reasons for nomination as a candidate for Director]
Mr. Kenichi Shibasaki possesses experience and achievements
developed in the course of taking on leadership roles in Groupmanagement. In that regard, he has been acting as Managing
Executive Officer of the Company since April 2012 and Senior
Managing Executive Officer since April 2016 supervising financing
strategy and investor relations strategy, after having served as
Representative Director, President and Executive Officer of Yamato
Financial Co., Ltd. Accordingly, the Company proposes his election
as Director.

10

Number of
SharesOwned

24,600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)
6

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

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. (current)
Director and Executive Officer of the Company(current)

Attendance to theBoard of Directors (Important Concurrent Positions at Other Organizations)Representative Director, President and Executive Officer of Yamato
Meetings
Transport Co., Ltd.
FY2018:14/14 (100%)[Reasons for nomination as a candidate for Director]
Mr. Yutaka Nagao possesses experience and achievements
developed in the course of taking on leadership roles in the Group’s
core, the Delivery Business. In that regard, he has been acting as
Representative Director and President of Yamato Transport Co., Ltd
and Executive Officer of the Company since April 2015 and Directorand Executive Officer since June 2017, after serving as Executive
Officer and President of Kanto Regional Office and Managing
Executive Officer of the Company’s subsidiary Yamato Transport
Co., Ltd. Accordingly, the Company proposes his reelection as
Director.

11

Number of
SharesOwned

10,800No.

Name of Candidate(Date of Birth)

Reelection
OutsideIndependent

7

ToshitakaHagiwara(Jun. 15, 1940)

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

Dec. 1969
Jun. 1990
Jun. 1995
Jun. 1997
Jun. 1999
Jun. 2003
Jun. 2007
Jun. 2009
Jul. 2011
Jul. 2013

Joined Komatsu Ltd.
Director
Managing Director
Executive Managing Director
Executive Vice President
Chairman and Representative Director of the Board
Councilor and Senior Adviser
Director of the Company (current)
Senior Adviser of Komatsu Ltd.
Adviser (current)(Important Concurrent Positions at Other Organizations)
Adviser of Komatsu Ltd.
Attendance to the Outside Director of Zensho Holdings Co., Ltd.
Board of Directors Outside Director of Hino Motors, Ltd.
Meetings
Outside Director of Takamatsu Construction Group Co., Ltd.
FY2018:[Reasons for nomination as a candidate for Outside Director]
17/18 (94%)
Mr. Toshitaka Hagiwara possesses abundant experience andconsiderable insight as a corporate manager. Accordingly, theCompany has determined that his advice regarding overallmanagement of the Company will contribute to further enhancing
our management structure, and proposes his reelection as Outside
Director.

12

Number of
Shares
Owned

6,200

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

8

Masakatsu Mori(Jan. 22, 1947)

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

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 IUJ (current)

Attendance to theBoard of Directors
Meetings(Important Concurrent Positions at Other Organizations)
FY2018:Vice Chairman of the International University of Japan
18/18 (100%)
Board of Director of Stanley Electric Co., Ltd.
Outside Audit & Supervisory Board Member of Kirin Holdings
Company, Limited[Reasons for nomination as a candidate for Outside Director]
Mr. Masakatsu Mori possesses abundant experience andconsiderable insight as a corporate manager. Accordingly, theCompany has determined that his advice regarding overallmanagement of the Company will contribute to further enhancing
our management structure, and proposes his reelection as Outside
Director.

13

Number of
Shares
Owned

9,600

No.

Name of Candidate(Date of Birth)

Reelection
OutsideIndependent

9

Mariko Tokuno(Oct. 6, 1954)

Brief Background, Position and Responsibility at the Company(Important Concurrent Positions at Other Organizations)Jan. 1994
Apr. 2002
Mar. 2004
Aug. 2010
Sep. 2013
Jun. 2017

Number of
Shares
Owned

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)
Outside Director of Happinet Corporation
Attendance to the Outside Director of Mitsubishi Materials Corporation
Board of Directors[Reasons for nomination as a candidate for Outside Director]
Meetings
Ms. Mariko Tokuno possesses abundant experience and
FY2018:
considerable insight as a corporate manager. Accordingly, the14/14 (100%)Company has determined that her advice regarding overallmanagement of the Company will contribute to further enhancing
our management structure, and proposes her reelection as Outside
Director.

14

400

No.

Name of Candidate(Date of Birth)

Brief Background, Position and Responsibility at the Company(Important Concurrent Positions at Other Organizations)Apr. 1973
Jun. 2004
Apr. 2006
Jun. 2006
Apr. 2008
Apr. 201110

New election
OutsideIndependent

Apr. 2015
Apr. 2016

Joined ITOCHU Corporation
Executive Officer
Managing Executive Officer
Representative Executive Managing Director
Representative Senior Managing Director
Representative Director and Executive Vice
President
Senior Advisor
Vice Chairman (current)

Number of
SharesOwned

0(Important Concurrent Positions at Other Organizations)
Yoichi Kobayashi
Vice Chairman of ITOCHU Corporation(Jul. 21, 1949)[Reasons for nomination as a candidate for Outside Director]
Mr. Yoichi Kobayashi possesses abundant experience andconsiderable insight as a corporate manager. Accordingly, theCompany has determined that his advice regarding overallmanagement of the Company 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 Mr. Toshitaka Hagiwara, Mr. Masakatsu Mori and Ms. Mariko Tokuno as
independent officers provided for under the provisions of the Tokyo Stock Exchange, Inc. and registered
the individuals as 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 Mr. Yoichi Kobayashi is approved, theCompany will appoint him as an independent officer and register the individual as such with thatexchange.
Mr. Toshitaka Hagiwara, Mr. Masakatsu Mori, Ms. Mariko Tokuno and Mr. Yoichi Kobayashi satisfy therequirements for Criteria for Determining Independence of the Company on page 19.
(2)
The number of years as Outside Director of the Company
Mr. Toshitaka Hagiwara, Mr. Masakatsu Mori and Ms. Mariko Tokuno have been serving as theCompany’s Outside Directors for nine years, five 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 2010, Mr. Toshitaka Hagiwara has been serving as an outside director of Zensho Holdings
Co., Ltd. That company maintains full ownership of subsidiary Zensho Co., Ltd. (now named Sukiya Co.,
Ltd.), operator of gyudon (Japanese hot pot) chain restaurant Sukiya, which was subject to a directivefrom the Labour Standards Inspection Office and other authorities to take remedial measures after
findings that some of its employees had experienced excessive working conditions from February to
March 2014. Zensho took the matter seriously, and in April 2014 organized a third-party panel of experts
tasked with thoroughly looking into factors causing the incidents and providing suggestions for
improvement. The panel gave Zensho its report in July 2014. In line with the suggestions of the report,
Zensho took steps to make improvements that included organizing a panel in November 2014 forpromoting a better workplace environment, composed of five experts tasked with accelerating and fully
implementing such improvements. As a result, in March 2015 the panel provided Zensho with a reportsummarizing and evaluating progress made in that regard.
As an outside director, Mr. Toshitaka Hagiwara has routinely provided Zensho Holdings with advice fromthe perspective of regulatory compliance, and since the aforementioned incident he has been properly
executing his duties by taking part in meetings of the company’s board of directors and other suchforums where he has been working to further strengthen and ensure compliance practices, while calling15

for appropriate measures for preventing incidents such as the above to be put in place from theperspective of regulatory compliance.
2) Since June 2016, Ms. 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.
Although she was unaware 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 governancestructure. Since these cases were revealed, as chairperson of the special investigation committee, she
has been making efforts to further enhance governance structure, including conducting investigations
relating to the cases, identifying root causes, and providing advice on measures to prevent
reoccurrences.
3) From June 2006 to March 2015, Mr. 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.
3.

Agreement on liability limitation
The Company has concluded an agreement with Mr. Toshitaka Hagiwara, Mr. Masakatsu Mori and Ms. Mariko
Tokuno 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 Mr. Yoichi Kobayashi is approved, the Company will conclude the said agreement with
him.

16

Agenda Item 2.

Election of One (1) Audit & Supervisory Board Member

The term of one (1) Audit & Supervisory Board Member, namely Ms. Kazuko Takahara, will
expire at the close of this General Meeting of Shareholders. Accordingly, we would like topropose the election 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)Apr. 1981
Jun. 2000
Jun. 2002
Jul. 2006
Apr. 2012
Apr. 2018
New election

Number of
Shares
Owned

Joined the Company
Manager of Audit Section No. 1 of Audit Division
Manager of Audit Section of Audit Division
Audit Function Manager
Audit Function Senior Manager
Attached to the President (current)(Important Concurrent Positions at Other Organizations)
None

Mamoru Matsuno [Reasons for nomination as a candidate for Audit & Supervisory(Feb. 5, 1961) Board Member]
The Company proposes the election of Mr. Mamoru Matsuno 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 internal auditing duties, etc., cultivated over longyears of acting as Audit Function Senior Manager from April 2012,
after having served as Manager of Audit Section of Audit Division
and Audit Function Manager.

2,100

Notes:
1. There are no particular vested interests between the Company and the candidate.
2. Agreement on liability limitation
If the election of Mr. Mamoru Matsuno 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.

17Agenda Item 3.

Revision of Remuneration Amount for Directors

Remuneration for the Company’s Directors has remained at the monthly amount of up to 35
million yen approved at the 130th Ordinary General Meeting of Shareholders held on June 29,
1995 up to the current day.
In consideration of various factors seen during this period, such as an increase in Director’s
responsibilities accompanying changes in the business environment, the increase intransparency and vigor of Board of Director’s operations, and an increase in the appointment of
Directors with the aim of enhancing management oversight, we propose revising remuneration
for Directors to a monthly amount of up to 45 million yen (of which up to 6 million is allocated to
Outside Directors).
Furthermore, remuneration for Directors will not include the amount of employee’s salary for a
Director who also holds an employee post, as was previously the case.
Also, although there are currently eight (8) Directors (including three (3) Outside Directors),
following the approval of agenda item 1., this will become ten (10) Directors (including four (4)Outside Directors).

18

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.

19

(Attached Documents)

Business Report(From April 1, 2017 to March 31, 2018)

1. Status of the Corporate Group(1)

Operating Performance

In the fiscal year ended March 31, 2018, 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
to tightening of the domestic labor market, 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 of consumption.
Under such circumstances, the Yamato Group strived to enhance its management foundations
in order to continue achieving sustainable growth and thereby enable the Group to keep
providing high-quality services by drawing up its “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 Groupmanagement structure geared to achieving sustainable growth.”
In the Delivery Business, we promoted our “structural reforms in the Delivery Business”
initiatives which involve “improving and developing the employee working environment,”“placing controls on total TA-Q-BIN volume,” “optimizing the entire TA-Q-BIN delivery network,”“boosting efficiency by enhancing the ‘last mile’ network,” and “revising TA-Q-BIN basic feesand respective service standards.” This also involved gaining understanding and cooperationfrom many of our clients, particularly in terms of having made progress in negotiating review ofour rates with respect to our corporate clients, and adjusting shipping schedules per requests
made to some of our large-lot corporate clients. As a result, since the third quarter, our financial
performance has remained on path to recovery due to TA-Q-BIN delivery volume taking adownward turn and the TA-Q-BIN unit price beginning to rise due to our adequate pricing
initiatives, despite increasing expenses incurred largely from promoting our focus on “reforming
working styles.”In the non-delivery businesses, results were firm since we took steps to expand our existing
service offerings by enlisting the strengths of Group companies, while also drawing onGroup-wide ties as we aggressively promoted solution sales geared toward addressing
customers’ business challenges.

20

Our consolidated financial results for the fiscal year ended March 31, 2018 were as follows.
(Millions of yen)
Item

Fiscal 2018

1,466,852

1,538,813

71,961

4.9

Operating profit

34,88535,685800

2.3

Ordinary profit

34,88436,085

1,201

3.4

Profit attributable to owners of parent

18,053

18,231178

1.0Operating revenue

ChangePercentagechange (%)

Fiscal 2017

As mentioned above, operating revenue amounted to 1,538,813 million yen, up 71,961 million
yen from the year-ago period. This is largely attributable to an increase in the TA-Q-BIN unit
price due to our adequate pricing initiatives, and despite a decrease in TA-Q-BIN delivery
volume amid promotion of structural reforms in the Delivery Business. Operating expenses
amounted to 1,503,127 million yen, up 71,161 million yen from the year-ago period. This islargely attributable to an increase in labor costs, including those of outsourcing workforce, in
conjunction with higher delivery volume until the first half of the fiscal year and initiatives toreduce employee workloads, and also attributable to increases in commission expenses andother subcontracting expenses and personnel expenses amid progress made in employee
recruitment. As a result, operating profit amounted to 35,685 million yen, up 800 million yen
from the year-ago period partially due to effects of a decrease in amounts recorded as
payments for specially acknowledged working hours recognized in the fiscal year ended March
31, 2017.

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 meansof placing 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, inpart 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 throughenvironmental and safety measures, and efforts to prosper communities.
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,” “Atsugi Gateway,” “Chubu Gateway” and “Okinawa International Logistics
Hub” facilities, as well as “Kansai Gateway” facility, which started its operation in
November 2017, in addition to our existing “last mile” network.

21

(iv)

(v)

In our business looking toward overseas 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
the growth of cross-border logistics. In the fiscal year ended March 31, 2018, we signed acomprehensive partnership agreement with the leading specialist for express parcel
delivery in France. The agreement was entered into for the purpose of expanding ourcross-border small parcel chilled and frozen transport business between Japan andFrance, and contains a cross license agreement for sharing both companies’ know-how
with respect to small parcel chilled and frozen transport. Furthermore, we have beenpromoting efforts to build cross-border networks that provide substantial added value
primarily focusing on our cold chain network with initiatives involving seven Yamato Group
companies acquiring certification under international standards pertaining to chilled andfrozen goods delivery services, including Vietnam where the Group started handling ofCool TA-Q-BIN services in September 2017.
With the aim of improving customer convenience particularly in the e-commerce market,
we have been working to establish an environment that ensures customers ease inpicking up their parcels. Moreover, 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. Also, we continued to conduct practical trial runs of our“RoboNeko Yamato” project which involves providing on-demand delivery services thatmake use of automated driving technologies and worked on other efforts for thedevelopment of next-generation logistics services, and we have been picking up the pacewith respect to utilizing cutting-edge technologies geared to streamlining transportation, inpart by adopting trailers with a new specification never before used in Japan. Moreover, in
October 2017, we installed Japan’s first automated fit-to-size packing system at ourAtsugi Gateway facility, and have otherwise been taking steps that involve digitization andautomation of our overall logistics operations in order to address challenges presented bysociety such as the labor shortage as it intensifies going forward, and in order to better
serve the rapidly expanding e-commerce market.

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)
Fiscal 2018

TA-Q-BIN

1,867

1,836

(30)

(1.7)

Kuroneko DM-Bin

1,542

1,464

(77)

(5.0)

(i)
(ii)

ChangePercentagechange (%)

Fiscal 2017

Item

In the Delivery Business, the Yamato Group concentrated on TA-Q-BIN-centeredbusiness development, aiming to provide infrastructure that best suits our customers andcontribute to 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 of consumption, we have promoted our “structural reforms in the Delivery Business”
initiatives which involve “improving and developing the employee working environment,”“placing controls on total TA-Q-BIN volume,” “optimizing the entire TA-Q-BIN delivery
network,” “boosting efficiency by enhancing the ‘last mile’ network,” and “revising
TA-Q-BIN basic fees and respective service standards.” With respect to our objective of“improving and developing the employee working environment,” we have taken steps
22

(iii)

(iv)

(v)

(vi)

geared to ensuring that employees are able to take lunch breaks while also preventing
situations where they are subject to long working hours. To that end, we set earlier
deadlines for accepting TA-Q-BIN deliveries, and we changed to a framework of fivedesignated time slots for TA-Q-BIN deliveries, from six time slots previously. In addition,
having revised our TA-Q-BIN basic fees in October 2017, we gained understanding andcooperation from many of our clients particularly in terms of having made progress innegotiating review of our rates with respect to our corporate clients, and adjusting
shipping schedules per requests made to some of our large-lot corporate clients. We
continue engaging in such dialogue with corporate clients with whom negotiations havebeen underway.
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 forsending by collaborating with multiple flea market websites. During the fiscal year ended
March 31, 2018, we have been taking steps to provide greater convenience to ourcustomers. This has involved efforts such as collaborating with business operators who
provide open platforms for e-commerce companies, and offering a service environment
where customers who have purchased a product are able to specify either a businessoffice of Yamato Transport Co., Ltd., a convenience store or an open-type parcel locker(PUDO) as a location for pick-up. This has also involved upgrading the “My Calendar”
service of the “Kuroneko Members” service with the introduction of a new feature thatenables customers to specify pick-up locations, in addition to their desired days of theweek and time slots.
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 ended March 31, 2018,
we have promoted the use of our new “B2 Cloud” shipping label issuance service which
operates using a cloud-based platform. Moreover, we have been working to provide newservices that help e-commerce companies do business. For instance, we have beenreleasing to the public application programming interfaces (APIs) designed to facilitate
convenient parcel pick-up and delivery, available through our “Yamato Business
Members” service for corporate clients.
In our business geared toward revitalizing communities, we have been taking steps toimprove services for residents by collaborating with numerous municipalities andcompanies in efforts to provide support with regard to helping those who face difficulties
doing their shopping and watching over elderly residents. Moreover, we have also been
helping to revitalize local industry through initiatives that include lending support for
enabling communities to achieve higher sales of locally produced products by offeringswift delivery to Asia of perishable goods and other agricultural products in a manner that
ensures they stay fresh.
The TA-Q-BIN unit price increased as a result of our having taken on adequate pricing
initiatives that involved revising TA-Q-BIN basic fees and negotiating review of our rates
with respect to our corporate clients. As a result, operating revenue amounted to
1,201,745 million yen, up 4.4% from the year-ago period. Operating profit has remainedon a path to recovery from the third quarter onward amid increasing expenses largely as aconsequence of promoting our focus on “reforming working styles.” As a result, operating
profit amounted to 6,758 million yen, up 19.9% from the year-ago period, for the fiscal
year ended March 31, 2018.

BIZ-Logistics(i)

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 network
23

(ii)

(iii)

(iv)

with 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 ended March 31, 2018, these operations generated
favorable results due to factors that included an increased volume of existing services.
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 ended March 31, 2018, results were firm due to anincrease in use of such services among newly gained customers.
Operating revenue amounted to 121,939 million yen, up 12.2% from the year-ago period
mainly due to favorable results from existing services for e-commerce business operators,
and progress made in offering industry-specific solutions. Operating profit amounted to
4,087 million yen for the fiscal year ended March 31, 2018, up 0.4% from the year-ago
period.

Home Convenience
(i)

(ii)

(iii)

(iv)

In the Home Convenience Business, we are working toward enabling customers toachieve greater convenience and comfort in their lives through lifetime lifestyle support
businesses and corporate enterprise support business that draw on the Yamato Group’s
nationwide network.
With respect to individual customers, the Yamato Group operated a variety of services toassist in daily life such as the “Raku Raku Household TA-Q-BIN” service for deliveringlarge furniture items and home appliances, moving-related services and “Comfortable
Lifestyle Support Service” which aims to help customers resolve everyday inconveniences“inside the home.” During the fiscal year ended March 31, 2018, we continued to takesteps to achieve greater business volume with respect to our “Raku Raku Household
TA-Q-BIN” service that makes it easy for customers to send large packages by linking up
with flea market website applications, and we also aggressively forged ahead with efforts
to increase sales of our “Comfortable Lifestyle Support Service.”
For our corporate clients, we have been developing our business support services
including “Technical Network Business” where we combine the networks of the YamatoGroup and our construction and installation contractors so that we can provide one-stop
support in handling everything from household equipment delivery and set-up, toinstallation and maintenance of such equipment. During the fiscal year ended March 31,
2018, we have steadily worked on receiving orders for office relocations.
Operating revenue amounted to 48,900 million yen, down 0.5% from the year-ago period
mainly due to controls placed on workloads during the peak moving and relocationseason as we promote our focus on “reforming working styles,” and despite favorable
results with respect to use of our “Raku Raku Household TA-Q-BIN” service and“Comfortable Lifestyle Support Service.” Operating profit amounted to 522 million yen for
the fiscal year ended March 31, 2018, down 51.4% from the year-ago period.

e-Business(i)

In the e-Business, the Yamato Group helps customers streamline their businessprocesses and solve potential issues by proactively developing solution platform businessthat combine 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
to promoting use of emerging technologies that harness artificial intelligence (AI), the
24

(ii)

(iii)

(iv)

Internet of things (IoT) and other such innovations.
With respect to services for assisting with order-acceptance and dispatching operations,
the Yamato Group provides a “Web-based Shipment Control” that comprehensively
supports such operations as dispatch information processing, printing of delivery slips,
and freight tracking. In the fiscal year ended March 31, 2018, use of this service increased
particularly among our existing large-lot customers, against a backdrop that included
e-commerce market growth.
For our customers who mainly make use of pamphlets, catalogs and other suchpromotional materials in their marketing activities, we have been developing our e-On
Demand Solutions business which involves providing total solutions in terms of systems
for ordering promotional products, warehouse storage, administration, delivery and otherlogistics functions, and printing. During the fiscal year ended March 31, 2018, use of suchservices increased among newly gained customers and existing customers.
Operating revenue amounted to 46,480 million yen, up 1.8% from the year-ago period
mainly as a result of having achieved a greater volume of business in the “Web-based
Shipment Control” and an increase in use of e-On Demand Solutions business amongcustomers. Operating profit was 10,587 million yen, up 13.0% from the year-ago period.

Financial
(i)
(ii)

(iii)

(iv)

In the Financial Business, the Yamato Group has been developing settlement andfinancial services tailored to a range of customer needs for payment collection of
mail-order products, 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 ended March 31, 2018, we provided a wide range of payment settlement
services to our customers by promoting use of our “Kuroneko Web Collect” and“Kuroneko Pay After Delivery Services,” and concurrently worked to increase profitability.
Moreover, we took steps to improve our services in the e-commerce market, which ispoised for expansion going forward. This involved launching sales of our “Raku-uru Cart”
service that helps business operators enter the e-commerce market, and providing
one-stop options in terms of payment settlement, delivery support and shopping cartfeatures.
In the lease services business, we have been generating favorable results with respect tofinancial leases primarily involving trucks and installment sales. We have also beendeveloping peripheral operations that include providing vehicle referrals and resale
support, while forging ahead in making proposals involving total solutions related tovehicles.
Operating revenue amounted to 82,981 million yen, up 6.4% from the year-ago period,
mainly due to favorable results in the lease services business. Operating profit was 7,912
million yen, down 4.0% from the year-ago period, mainly due to a decline in delivery
volume of our mainstay service “TA-Q-BIN Collect” in line with shrinking market for
cash-on-delivery.

Autoworks(i)

In the Autoworks Business, the Yamato Group develops its “24-hour-a-day,365-day-a-year service that enables customers to service their vehicles without stopping
operation,” thereby providing value to logistics operations and logistics service providers
in the form of “improvement of vehicle maintenance convenience” and “reduced
maintenance expenses.” Furthermore, to better provide one-stop service solutions geared
25

(ii)
(iii)

toward customer business operations, we have added services for “maintaining andsafeguarding logistics facilities and equipment, and improving such workplaceenvironments,” along with “offering insurance plans tailored to customer risk management
needs” which provide coverage for such assets.
In the fiscal year ended March 31, 2018, we took steps to expand sales by aggressively
marketing out “Repairworks” services entailing periodic on-site customer visits.
Operating revenue amounted to 24,641 million yen, up 0.1% from the year-ago period
largely as a result of an increase in the number of vehicles serviced. Operating profit was
4,141 million yen, up 26.5% from the year-ago period, mainly due to progress made withrespect to streamlining business processes, particularly in terms of standardizing andenabling visual monitoring of our business operations.

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. In the fiscal year
ended March 31, 2018, 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 increased 3.2% from the year-ago period to 2,252 million yen.

CSR Initiatives
(i)

(ii)

(iii)

(iv)

The Yamato Group places utmost priority on protecting human life and conducts a rangeof safety measures. During the fiscal year ended March 31, 2018, the entire YamatoGroup including its overseas operations carried out the “Zero Accident Campaign,” andYamato Transport Co., Ltd. held the “7th Nationwide Safety Competition” and engaged inefforts to enhance 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-wide basis. In addition, since 1998 we have been holding our “Safety Classes forChildren,” through which we convey the importance of traffic safety, in day care facilities,
kindergartens and elementary schools across Japan. A total of about 3.00 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 asociety 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.
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
ended March 31, 2018, we have been promoting our “combined passenger-cargo”
operations using scheduled-route passenger buses and railways in the ten geographic
regions of Iwate prefecture, Miyazaki prefecture, Hokkaido, Kumamoto prefecture, Hyogo
26

(v)

(2)

prefecture, Nagano prefecture, Wakayama prefecture, Tokushima prefecture, Gifu
prefecture and Aichi prefecture thereby helping to improve lifestyle services for local
residents both by keeping scheduled bus and railway networks running in hilly andmountainous areas where populations are substantially declining and getting older, andalso by streamlining distribution in those locations. In February, we also initiated joint
transport arrangements under our “combined passenger-cargo” operations in Miyazaki
prefecture, in partnership with other transportation companies with the aim of further
streamlining distribution. In addition, we have been continuously promoting efforts toachieve streamlining of logistics operations and realize next-generation logistics services
at our Next Delivery SQUARE facility which assumes the role of providing collective
delivery services and other aspects of logistics infrastructure within the Fujisawa
Sustainable Smart Town (Fujisawa SST) community which opened in Kanagawa
Prefecture’s Fujisawa City. Moreover, we engaged in efforts geared to revitalizing
communities and resolving issues by leveraging the Yamato Group’s management
resources, with respect to initiatives that include helping to watch over elderly residents,
supporting tourism, and expanding sales channels for specialty products in respective
regions throughout Japan. As a result, we have worked with government bodies on 2,087
such endeavors thus far.
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.

Issues to Be Addressed

In order to achieve sustainable growth, the Yamato Group will continuously take steps to bringabout an approach to management that places top priority on employee satisfaction, which is tosay improving working environment (“reforming working styles”), in a manner that first takes
prevailing changes in the business environment into account. At the same time, we will pushahead in bringing about transformation of the overall Group’s business model so that it is betteraligned with the coming era, and will also work to satisfy our shareholders, customers, society
and employees. To such ends, the Yamato Group will pursue the following strategies:
(i)

(ii)

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
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.” At27

(iii)

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 and more swiftly setting up open-type parcel lockers, as well as
promoting active use of cutting-edge technologies. Furthermore, we will strike a balance
between expanding collection and delivery capacity and regaining profitability through ourefforts currently underway with respect to “rebuilding our ‘last mile’ network to make it
more efficient” and “carrying out continuous and adequate pricing initiatives.”
We will contribute to Japanese economic growth strategies by pushing ahead with our“Value Networking” design which aspires to revolutionize logistics. We will persist withefforts to further develop our “last mile” network, the greatest strength of the YamatoGroup, by making use of our “Haneda Chronogate,” “Atsugi Gateway,” “Chubu Gateway”
and “Okinawa International Logistics Hub” facilities, as well as “Kansai Gateway” facility,
which started its operation in November 2017. Meanwhile, we will work toward creating
and developing a business model that can generate a high level of added value that
improves logistics speed, quality and costs, by fusing our business resources in areas
such as information, logistics and transaction settlement within this network.

(iv)

In our business looking toward overseas markets, leveraging certifications underinternational standards pertaining to chilled and frozen goods delivery services
acquired by seven 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-border logistics, we will continue working toforge collaboration among five regions, Japan, East Asia, South East Asia, Europe
and the Americas, while strengthening our capabilities in each geographic region.

(v)

With the aim of enhancing our management foundations, we will incorporate cutting-edge
digital technologies as we create new businesses and bring about evolution andinnovation of our existing ones. In addition, to heighten our “capacity to generateearnings” leveraging the collective strengths of the Group, we will reform the structure ofGroup management and upgrade to a management system that combines threecomponents: accounts management, managerial accounting, and human resources(performance evaluation).
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.

(vi)

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.

28

(3)

Business Performance and Changes in Financial Position(Millions of yen)
FY2015th
150

FY2016
st151

FY2017
nd
152

FY2018rd
153

1,396,708

1,416,413

1,466,852

1,538,813

Profit attributable to owners of parent

37,53339,42418,053

18,231

Basic earnings per share (Yen)

90.41

96.45

45.37

46.24

Total assets

1,082,531

1,089,436

1,114,672

1,115,433

Net assets

571,199543,855

545,559

557,586

Net assets per share (Yen)

1,368.66

1,349.56

1,367.51

1,395.74

Item
Operating revenue

Note: 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 of eachfiscal year.

(4)

Delivery Volume of Small Parcels(Million parcels / units)
FY2015th
150

FY2016
st151

FY2017
nd
152

FY2018rd
153

TA-Q-BIN

1,622

1,731

1,867

1,836

Kuroneko DM-Bin

1,901

1,536

1,542

1,464

Item

(5)

Principal Business Activities

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

BIZ-Logistics

Home Convenience

e-Business

Financial

Autoworks
Other

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

29

(6)

Capital Expenditure

The capital expenditure for fiscal 2018 totaled 71,509 million yen and the principal components
were as follows:(Millions of yen)
Businessarea

Company

DeliveryYamato Transport Co., Ltd.

AmountinvestedContent of investment
Purchase of vehicles (3,125 units)

13,687

New Konan Building

3,253

Kansai Gateway

1,662

BIZ-Logistics

Yamato Logistics Co., Ltd.

New facility in Keihinjima

1,423

Financial

Yamato Lease Co., Ltd.

Purchase of vehicles for leasing

32,308(7)

Financing Activities

Not applicable.

(8)

Principal Creditors(Millions of yen)
Outstanding borrowing

Creditors
Mizuho Bank, Ltd.

40,100Sumitomo Mitsui Banking Corporation

37,990

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

29,010Notes:(9)

1.
2.

The above refers to ongoing credit in the Financial segment.
On April 1, 2018, The Bank of Tokyo-Mitsubishi UFJ, Ltd. changed its name to MUFG Bank, Ltd.

Employees
Business area

Number of employees

Delivery(Persons)
Changes from previous
fiscal year-end

191,433

10,717

BIZ-Logistics

6,253

291

Home Convenience

4,937

(130)

e-Business

4,890

304

Financial

828

(23)

Autoworks

2,176

12

Other

2,579

141

Total

213,096

11,312

Note: The above numbers include 119,562 part timers (a year-on-year increase of 8,515).

30

(10) Vehicles
Business area

Number of vehicles

Delivery(Units)Changes from previous
fiscal year-end

45,580

222

944

(14)

1,966

(79)

e-Business

143

10

Financial671

6

Autoworks

777

32

Other

1,060

169

Total

51,141346

BIZ-Logistics
Home Convenience(11) Major Subsidiaries
Business area

Company

Capital stock

Ownership

Principal business activities(%)(Millions of yen)

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

50,000100.00TA-Q-BIN; Kuroneko DM-Bin

50

100.001,000

100.001,000

100.00

Yamato Global
Logistics Japan Co.,
Ltd.

1,880

100.00

YamatoMulti-Maintenance
Solutions Co., Ltd.
Yamato Packing
Service Co., Ltd.

100

100.0080

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

TA-Q-BIN, Kuroneko DM-Bin in
Okinawa
Domestic air cargo transportbusiness
Logistics service; overseas lifestylesupport services includinginternational moving, fine art
transport business
International air cargo service,handling of marine cargo,
import/export customs clearance
services
Maintenance and repair services forelectric appliances; manufacturer
recall support services
Packing, delivery and export agency
operations business; enclosing,sealing, packaging and transport ofprinted matter
Air and sea freight, international
moving, and import and export
customs clearance services in North
America
Delivery, installation and setting up
of furniture and electric appliances;moving and lifestyle support
services; merchandising services
Networking service; research,development, information, andconsulting services for users ofcomputer systems; softwaredevelopment, equipment sales, andonline services

Delivery

BIZ-Logistics

4

480

31

100.00100.00Business area

Company

Capital stock

Ownership(Millions of yen)

Financial

Autoworks

Other

(%)

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

1,000

100.0030

100.0030

100.00

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

100.00

YAMATOINVESTMENT(HONG KONG)
LIMITED
YAMATO ASIA PTE.
LTD.

(Millions of RMB)

50

100.00(Millions of HK$)

691

100.00(Millions of S$)

352

Principal business activities

100.00

Settlement service for payment ofmerchandise
General lease services
Vehicle management service
business; vehicle maintenanceservice; sales of fuel and auto parts;
repair and sales of freezers,
refrigerators and cargo-handlingdelivery equipment; agent services
for nonlife insurance
Transportation service, box charterbusiness
Management of regional operations
in East Asia,
business development and market
research
Management of regional operations
in East Asia,
business development and market
research
Management of regional operations
in Southeast Asia, businessdevelopment and market research

Note: As of April 1, 2018, Yamato Multi-Maintenance Solutions Co., Ltd. ceases to exist upon absorption-typemerger having been carried out with Yamato Logistics Co., Ltd., the surviving company.

Note: The status of a specified wholly owned subsidiary company as of March 31, 2018 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
538,306
Ltd.
Chuo-ku, Tokyo32

(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

300

Yamato Logistics Co., Ltd.

Chuo-ku, Tokyo

96

Yamato Global Logistics Japan Co., Ltd.

Chuo-ku, Tokyo

34

Yamato Multi-Maintenance Solutions Co.,Ltd.

Chuo-ku, Tokyo

17

Yamato Packing Service Co., Ltd.

Koto-ku, Tokyo

18

YAMATO TRANSPORT U. S. A., INC.

New Jersey,
U.S.A.

30

Home Convenience

Yamato Home Convenience Co., Ltd.

Chuo-ku, Tokyo

175

e-BusinessYamato System Development Co., Ltd.

Koto-ku, Tokyo

40

Financial

Yamato Financial Co., Ltd.

Chuo-ku, Tokyo

81

Yamato Lease Co., Ltd.

Toshima-ku,
Tokyo

64

Autoworks

Yamato Autoworks Co., Ltd.

Chuo-ku, Tokyo

109

Other

Yamato Holdings Co., Ltd.

Chuo-ku, Tokyo

1

YAMATO BOX CHARTER CO., LTD

Chuo-ku, Tokyo

58

BIZ-Logistics

7,188

YAMATO (CHINA) CO., LTD

Shanghai, China

1

YAMATO INVESTMENT (HONG KONG)
LIMITED

Hong Kong

1

YAMATO ASIA PTE. LTD.

Singapore1

Note: As of April 1, 2018, Yamato Multi-Maintenance Solutions Co., Ltd. ceases to exist upon absorption-typemerger having been carried out with Yamato Logistics Co., Ltd., the surviving company.

33

2. Overview of Shares (As of March 31, 2018)(1) Total Number of Shares Authorized:

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

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

39,593 persons(4) Principal Shareholders
Number of shares
owned(Thousands of shares)

Shareholders

Ownership percentage(%)

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

41,711

10.58

Japan Trustee Services Bank, Ltd. (Trust Account)

24,644

6.25

Yamato Employees’ Shareholding Association

19,610

4.97

JPMorgan Chase Bank, N.A. 380055

17,074

4.33

Nippon Life Insurance Company

14,7703.75

Meiji Yasuda Life Insurance Company

14,314

3.63

Mizuho Bank, Ltd.

11,747

2.98

Yamato Trading-Partner Shareholding Association

8,610

2.18

State Street Bank and Trust Company 505223

8,556

2.17

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

6,344

1.61

Notes:

1. The Company holds 17,064,197 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.
2. Ownership percentage is calculated exclusive of own shares.

34

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

Responsibilities and important concurrent positionsat other organizations

Name

Representative Director
and Chairman

Makoto Kigawa

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

Masaki Yamauchi

Director

Toshitaka Hagiwara

Director

Masakatsu Mori

Director

Mariko Tokuno

Full-time Audit & Supervisory
Board Member
Full-time Audit & Supervisory
Board Member
Audit & Supervisory Board
MemberAudit & Supervisory Board
MemberKazuko Takahara

Notes:

Outside Director of Komatsu Ltd.

Haruo Kanda

Representative Director and Chairman of Yamato
Transport Co., Ltd.

Hitoshi Kanamori

Coordinator-General of Management Strategy, Global
Business Strategy, IT Strategy, Key AccountManagement
Representative Director, President and Executive
Officer of Yamato Transport Co., Ltd.

Yutaka Nagao

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.
Vice Chairman of the International University ofJapan (IUJ)
Board of Director of Stanley Electric Co., Ltd.
Outside Audit & Supervisory Board Member of Kirin
Holdings Company, Limited
Outside Director of Happinet Corporation
Outside Director of Mitsubishi Materials
Corporation

Etsuo Ogawa
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 and Mariko Tokuno serve as 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. 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.
6. Takashi Yamashita, Audit & Supervisory Board Member, is a qualified Certified Public Accountant andTax Accountant, and possesses considerable insights into finance and accounting related matters.
7. On June 23, 2017, Masakatsu Mori, Director, resigned as Board of Director of SKY Perfect JSAT
Holdings Inc.
8. 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.

35

9. On April 1, 2018, there were changes in responsibilities and important concurrent positions at otherorganizations as follows:

Position

Responsibilities and important concurrent positionsat other organizations

Name

Representative Director
and Chairman

Makoto Kigawa

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

Haruo Kanda

Outside Director of Komatsu Ltd.

Hitoshi Kanamori(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, and all Audit & Supervisory Board Members based on the Articles of Incorporation. 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

8314

Including 39 million yen for 3 Outside Directors

Audit &
Supervisory
Board Members

570

Including 22 million yen for 3 Outside Audit &Supervisory Board Members

Total

13

384

2) Total Amount of Officer Remuneration Received by Outside Officers from
Subsidiaries of the Company
During the fiscal year ended March 31, 2018, total remuneration received from subsidiaries of
the Company by outside officers acting as officers amounted to 2 million yen.

3) 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.
36

The remuneration of Audit & Supervisory Board Members and outside officers is fixed in
keeping with the nature of their work.

(4) Outside Officers
Principal Activities
Position

Name

Director

Toshitaka Hagiwara

Director

Masakatsu Mori

Director

Mariko Tokuno

Audit &
Supervisory
Board Member

Hiroyuki Kanae

Audit &
Supervisory
Board Member

Takashi Yamashita

Principal activities
Attended 17 of 18 meetings of the Board of Directors held in fiscal
2018, and provided necessary comments and advice on overallmanagement as appropriate from his perspective as a manager
with rich experience and profound critical insight.
Attended all 18 meetings of the Board of Directors held in fiscal
2018, and provided necessary comments and advice on overallmanagement as appropriate from his perspective as a manager
with rich experience and profound critical insight.
Attended all 14 meetings of the Board of Directors held after June23, 2017 when she was appointed as Director, and provided
necessary comments and advice on overall management as
appropriate from her perspective as a manager with rich experienceand profound critical insight.
Attended all 18 meetings of the Board of Directors held in fiscal
2018, and offered necessary comments based on his expertise andrich experience as an international attorney. Furthermore, heattended all 20 meetings of the Audit & Supervisory Board with all
regular exchanges held between the Representative Director andPresident and Outside Directors and the Audit & Supervisory Board
Members. He submitted questions mainly concerning foreign
operation risk, and examined the execution of the Directors’ duties.
Attended 11 of 14 meetings of the Board of Directors held afterJune 23, 2017 when he was appointed as Audit & Supervisory
Board Member, and offered necessary comments based on his
expertise and rich experience in finance and accounting.
Furthermore, he attended all 14 meetings of the Audit &Supervisory Board held after that day with all regular exchanges
held between the Representative Director and President andOutside Directors and the Audit & Supervisory Board Members. He
submitted questions mainly concerning finance and accounting, andexamined the execution of the Directors’ duties.

37

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

220(2) Remuneration other than (1)27(3) Remuneration to be paid to the Accounting Auditor by the Company
and subsidiaries

248

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 advisory services for the enhancement of
the administrative framework of its subsidiaries as non-audit services outside the scope ofservices prescribed in the Certified Public Accountant Act, Article 2, Paragraph 1.

38

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 theCompany 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 establishedthe “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 Division of the Company andeach Group company. The CSR Division makes systematic efforts in collaboration withoutside 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 bydirectors of 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.

39

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
management. Employees shall be stationed to perform related businesses in the CSR
Division 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
a division in charge of risk management, and assign an officer in charge of the same.
The division in charge of CSR of the Company shall oversee this, and monitor andmanage risk status at each Group company in a timely manner.
iv. The Company shall establish an internal audit division 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 Council 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 Council 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 eachGroup 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
a division in charge of compliance promotion, and assign an officer in charge of thesame. The division in charge of CSR 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 an internal audit division 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.

40

v. The Company shall establish a whistle-blower system for the Group to develop an
environment in which compliance violations are promptly reported.
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 thedivision in charge of management strategy 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 Council 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 division 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 eachGroup 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
41

and each Group company are not treated disadvantageously because of the said
report.
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
the Company may attend other important meetings, including those of theManagement Council and the Executive Council, and understand the process ofimportant 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 division of the Company shall report progress and results of internal
audits of the Company and each Group company as necessary to audit & supervisoryboard 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
division 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 18 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 legal affairs and CSR strategy,
full-time audit & supervisory board members, outside attorneys at law, and managers in42

charge of compliance of major Group companies, and oversees Group-wide complianceinitiatives across the organization.
Moreover, the Company has developed mechanisms for a whistle-blower system for theGroup to allow employees to report compliance violations of the Company and eachGroup company.
In addition, in order to raise awareness of compliance issues and call attention to suchmatters, all business offices of the Company and each Group company display“Statement of Compliance” posters which declare their vow to observe laws andregulations and corporate ethics.
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 tosociety and its stance toward issues in that regard, and furthermore pamphlets detailingsuch content are distributed to all employees of the Company and each Group company.
The Company and each Group company have primarily engaged in a labor-intensive
industry, centered on the Delivery Business, and implemented “reforming working styles”
throughout the entire Group, and promoted management in conformity with complianceincluding complete adherence to and review of rules.
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 legal affairs
and CSR strategy, and its full-time audit & supervisory board members, are notified of thesituation 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
Company employees in charge of audits and departments of major Group companies incharge of internal audits respectively check to make sure that business operations arebeing 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.

43

[Reference]
The current status of provision for oversight of business execution and management, internal
control and related functions at the Company is illustrated in the figure below.

General Meeting of Shareholders
Elect

Elect

Elect

Cooperation

Audit
The Audit & Supervisory
Board

Board of Directors

ReportMake decisions/Supervise

Accounting audit

Management
Committee

Executive Conference

ReportPresent/
ReportExecutebusiness

Executebusiness

CSR Strategy

Present/
ReportGroup Companies

Audit DivisionInternal
audit(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 theGroup as a whole through capital expenditure—to strengthen the network, one of ourmanagement resources, and develop new businesses and products, for example—andinvestments are aimed 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.

44

Legal Advisor

Independent Auditor

ReportNomination andCompensation CommitteeConsolidated Balance Sheet(As of March 31, 2018)(Millions of yen)

AssetsCurrent assets

Liabilities
Current liabilities

578,880

395,037

Cash and deposits

204,422

Notes and accounts payable - trade155,323

Notes and accounts receivable - trade

224,099

Short-term loans payable

66,952

Accounts receivable - installment

46,692Current portion of bonds

10,000

Lease investment assets

52,641

Lease obligations

2,239

Inventories

2,815

Income taxes payable

11,019Deferred tax assets

19,245

Deferred installment income

5,900

Other

30,328Provision for bonuses

33,208

Allowance for doubtful accounts(1,365)

Other

110,392

Non-current assets
Property, plant and equipment

536,553

Non-current liabilities

162,809405,057

Bonds payable

10,000

Buildings and structures

138,447

Long-term loans payable

60,300Machinery and equipment

21,835

Lease obligations

3,548

Vehicles17,257

Deferred tax liabilities

4,650

Land

174,959

Net defined benefit liability

75,495

Leased assets

6,595

Other

8,814

Construction in progress

16,200Total liabilities

557,846

Other

29,760Intangible assets
Software
Other
Investments and other assets

Net assets

20,131
17,259

Shareholders’ equity

541,8212,872

Capital stock

127,234

111,363

Capital surplus

36,813

Investment securities

59,841Retained earnings

416,854

Long-term loans receivable

2,978

Treasury shares(39,081)

Lease deposits

17,391

Net defined benefit asset

Accumulated other comprehensive
income129

Deferred tax assets

28,340

Other

3,730

Valuation difference on available-for-salesecurities
Foreign currency translation adjustment

Allowance for doubtful accounts(920)

Remeasurements of defined benefit plans

Allowance for investment loss(126) Non-controlling interests

Total net assets
Total assets

1,115,433

Total liabilities and net assets

45

8,486
12,9581,146(5,618)7,279
557,586
1,115,433

Consolidated Statement of Income(From April 1, 2017 to March 31, 2018)(Millions of yen)
Operating revenue

1,538,813

Operating cost

1,452,485

Operating gross profit

86,327

Selling, general and administrative expenses

50,642

Operating profit

35,685Non-operating income
Interest and dividend income

980

Other

1,615
2,596

Non-operating expenses
Interest expenses

271

Share of loss of entities accounted for using equity method
Other

1,355
569
2,196

Ordinary profit

36,085Extraordinary income
Gain on sales of non-current assets

179

Gain on sales of investment securities

1,639

Other

3
1,821

Extraordinary loss
Loss on retirement of non-current assets

1,148

Impairment loss

3,241

Loss on valuation of investment securities

55

Provision of allowance for investment loss

126

Provision of allowance for doubtful accounts

136

Other

75
4,783

Profit before income taxes

33,123

Income taxes-current

14,621

Income taxes-deferred(186)
14,435

Profit18,688

Profit attributable to non-controlling interests

456

Profit attributable to owners of parent

18,231

46

Consolidated Statement of Comprehensive Income(From April 1, 2017 to March 31, 2018)(Millions of yen)
Profit18,688Other comprehensive income
Valuation difference on available-for-sale securities

2,514

Foreign currency translation adjustment

1,569

Remeasurements of defined benefit plans, net of tax

0

Share of other comprehensive income of entities accounted forusing equity method(0)

Total other comprehensive income

4,084

Comprehensive income

22,772(Breakdown)Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests

47

21,779992

Consolidated Statement of Changes in Equity(From April 1, 2017 to March 31, 2018)(Millions of yen)
Shareholders’ equity
CapitalsurplusCapital stock
Balance as of April 1, 2017

127,234

Retainedearnings

36,813

Total
shareholders’equityTreasuryshares409,270(39,077)

534,241

Changes of items during period
Dividends of surplus
Decrease in retained earnings owing tochanges in scope of equity method
application
Profit attributable to owners of parent(10,645)(10,645)(2)(2)

18,231

18,231

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, 2018

–

0

7,584

(4)

7,580

127,234

36,813416,854(39,081)541,821(Millions of yen)
Accumulated other comprehensive income
Total
Valuation
Foreign
Remeasureaccumulateddifference on
currency
ments ofother
available-for- translation
definedcomprehensale securities adjustment benefit plans
sive income
Balance as of April 1, 2017

10,975(422)(5,614)

4,938

Noncontrollinginterests

Total net
assets6,379

545,559

Changes of items during period
Dividends of surplus
Decrease in retained earnings owing tochanges in scope of equity method
application
Profit attributable to owners of parent(10,645)(2)
18,231

Purchase of treasury shares(4)

Disposal of treasury shares0

Net changes of items other thanshareholders’ equity

1,983

1,569

Total changes of items during period

1,983

1,569

(4)

3,548

899

12,027

Balance as of March 31, 2018

12,9581,146(5,618)

8,486

7,279

557,586

48

(4)

3,548

899

4,447

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: 40
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 Multi-Maintenance
Solutions Co., Ltd.

Yamato Packing Service Co., Ltd. YAMATO TRANSPORT U. S. A.,
INC.

Yamato Home Convenience Co.,Ltd.

Yamato System Development
Co., Ltd.

Yamato Financial Co., 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 (CHINA) CO., LTD. is included in the scope of consolidation effective from the fiscal year underreview, due to being newly established by the Company.
As of April 1, 2018, Yamato Multi-Maintenance Solutions Co., Ltd. ceases to exist upon absorption-typemerger having been carried out with Yamato Logistics Co., Ltd., the surviving company.

2) Non-consolidated Subsidiaries, etc.
CKE TRANSPORT AGENCY SDN.BHD. and certain other subsidiaries are not included within
the scope of consolidation. The total assets, operating revenue, profit, and retained earningsof these non-consolidated subsidiaries are immaterial and, even taken together as a group,
they do not exert a significant influence on the consolidated financial statements.
(3) Application of Equity Method
1) Number of Affiliates Accounted for by Equity Method: 16
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, the scope of equity method applicationencompasses SCG YAMATO EXPRESS CO., LTD. and one other company, largely due totheir increased materiality.
2) Non-consolidated Subsidiaries and Affiliates Not Accounted for by Equity Method
Entities not subject to the equity method such as CKE TRANSPORT AGENCY SDN.BHD. andcertain other non-consolidated subsidiaries and YAMATO UNYU (THAILAND) CO., LTD. andcertain other affiliated 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

49

financial statements even when taken together as a group, given immateriality of their profit,
retained earnings and other financial results.
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, 2017 and March 31, 2018 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
for buildings 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 methods based on estimateduseful lives is adopted.
Intangible assets:(excluding leased assets)

Straight-line method, but software is amortizedby the straight-line method over the estimateduseful life (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.

50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.
Allowance for investment loss:
To prepare for devaluation loss of investments in subsidiaries and associates, allowances
are provided considering the status of subsidiaries and associates’ assets.
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
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.
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) Method of Significant Hedge Accountingi.
Method of hedge accounting
Interest rate swaps are accounted for using the exceptional treatment as they satisfy theapplicable conditions.
ii.

Hedging instrument and hedged item
Hedging instrument: Interest rate swaps
Hedged item:
Interest on loansiii.

Hedging policy
Interest rate swap transactions are used to avoid interest rate fluctuation risk associatedwith fund procurement.

iv.

Method of evaluating hedge effectivenessHedging effectiveness in interest rate swap transactions is not evaluated as they areaccounted for using the exceptional treatment.

8) Accounting for Consumption Taxes
The consumption taxes are excluded from transaction amounts.

51

2. Notes to the Consolidated Balance Sheet
Accumulated Depreciation of Property, Plant and Equipment:

493,289 million yen

3. 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.
(Millions of yen)
Use of asset

Type of asset

Branch and distribution
center and other

Buildings andstructures, land andotherRegionYamato Transport Co., Ltd.,
Miyagi Regional Branch(Sendai City, Miyagi) and
fourteen other premises

Amount of impairment loss

3,241

The Yamato Group grouped the assets based on the classification in managerial accounting and theunit in making investment decisions, with Yamato Transport Co., Ltd. treating primarily a regional
branch and subordinate branches as one unit and the Company and other consolidated subsidiaries
based on the unit of department.
As a result, the Group recognized a continuous decrease in profit and loss arising from operating
activities or significant declines in market prices for the asset group consisting of Yamato Transport
Co., Ltd., Miyagi Regional Branch and fourteen other premises, and it decreased the book value ofthe relevant asset group to the recoverable value and posted the relevant decrease of 3,241 million
yen to extraordinary loss as an impairment loss.
A breakdown of this decrease shows that 1,326 million yen was attributable to land, 1,074 million yen
was attributable to buildings and structures and 530 million yen was attributable to software.
If the recoverable value of such asset group is calculated based on value in use, the amount isvalued by discounting future cash flows with a discount ratio of 5.26%. Where the recoverable value
is calculated based on net realizable value, the amount is valued based mainly on real estateappraisal standards, assessed value of property tax or the posted land price.

52

4. 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 as ofbeginning 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 as ofend of fiscal year underreview

Common shares

411,339––

411,339Total

411,339––

411,339

17,0621

0

17,064

17,0621

0

17,064

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 sale of shares less than one unit.

(2) Dividends
1) Payments of dividends
Resolution
The Board of
Directors Meeting on
May 17,2017
The Board of
Directors Meeting on
October 31, 2017

Type of shares

Total amount ofdividends

Dividend per
share

Millions of yen

Yen

Record date

Effective dateon and after

Commonshares5,519

14March 31, 2017

June 2, 2017

Commonshares5,125

13September 30, 2017

December 8, 20172) 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 17, 2018

Commonshares5,519

Dividend per
share

Record date

Effective dateon and after

March 31, 2018

June 6, 2018

Yen

Retainedearnings

53

14

5. 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 andcontrols cash received, as well as outstanding receivables, for each period to identify thecredit risk of each 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.

54

(2) Matters concerning fair value of financial instruments
The table below shows the amounts recorded on the consolidated balance sheet as of March 31,
2018, 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

204,422

Difference

204,422–

223,780(205)

40,03845,781

5,743

34,21734,217-224,099(112)
223,986(3) Accounts receivable - installment

46,692

Allowance for doubtful accounts(754)

Deferred installment income

Fair value[5,900](4) Investment securities
Available-for-sale securities
Shares of subsidiaries andassociates(5) Notes and accounts payable - trade

13,591

21,258

7,667[155,323][155,323]-(6) Short-term loans payable[66,952][66,966]

13(7) Long-term loans payable[60,300][60,282](17)

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.

55

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

6,411

Available-for-sale securities

5,620

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.

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

1,395.74 yen
46.24 yen56

Non-consolidated Balance Sheet(As of March 31, 2018)(Millions of yen)

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

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

Liabilities
Current liabilities

161,730

Operating accounts payable
Short-term loans payable
Current portion of bonds
Income taxes payable
Accrued expenses
Deposits received
Provision for bonuses
Other102,55351
54,720
288
3,595
520

376,576
6,591
10
700
29
5,840
10

Non-current liabilities
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
395 Shareholders’ equity

33,302
10,00020,0003,084
72
144
179,893

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

349,156
127,234
36,82236,8220224,181
224,181
188,965
35,215(39,081)

Valuation and translation adjustments

9,256

Valuation difference on available-for-salesecurities

9,256

392
2

369,589
25,505
325,867
27,501
114(9,399)538,306

146,590839
25,00010,000181
93
110,067
87
321

Total net assets

358,413

Total liabilities and net assets

538,30657

Non-consolidated Statement of Income(From April 1, 2017 to March 31, 2018)(Millions of yen)
Operating revenue

27,384

Selling, general and administrative expenses

10,044

Operating profit

17,340Non-operating income
Interest and dividend income

991

Other

81
1,072

Non-operating expenses
Interest expenses

86

Other

60
146

Ordinary profit

18,266Extraordinary income
Gain on sales of investment securities

1,570
1,570

Extraordinary loss
Provision of allowance for investment loss

4,072

Other

188
4,260

Profit before income taxes

15,575

Income taxes - current

392

Income taxes - deferred

(20)
372

Profit15,20358

Non-consolidated Statement of Changes in Equity(From April 1, 2017 to March 31, 2018)(Millions of yen)
Shareholders’ equity

Balance as ofApril 1, 2017
Changes of items during
periodDividends of surplus
ProfitPurchase of treasury
shares
Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance as ofMarch 31, 2018

Retained earnings
Other retained earnings

Capital surplus

Capitalstock
127,234

Legal capitalsurplus

Other capitalsurplus

Total capitalsurplus36,822036,822

Generalreserve

Retained earnings
brought forward

188,965

30,657(10,645)
15,203
0

0

–

–

0

0

–

4,557

127,234

36,822036,822

188,965

35,215(Millions of yen)
Shareholders’ equity

Balance as ofApril 1, 2017
Changes of items during
periodDividends of surplus
ProfitPurchase of treasury
shares
Disposal of treasury shares
Net changes of items otherthan shareholders’ equity
Total changes of items during
periodBalance as ofMarch 31, 2018

Retainedearnings
Total retained
earnings

Treasury shares

Total
shareholders’equity219,623(39,077)

344,603(10,645)
15,203

Valuation andtranslation
adjustments
Valuationdifference on
available-for-salesecurities
8,561

Total net assets

353,164(10,645)
15,203(10,645)
15,203

(4)

(4)

(4)

0

0

0
694

694

4,557

(4)

4,553

694

5,248

224,181(39,081)349,156

9,256

358,41359

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 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)

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 in subsidiaries and associates, allowances areprovided considering the status of subsidiaries and associates’ assets.
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, 2018.
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.

60(4) Method of Accounting for Retirement Benefits
The method of accounting for unrecognized actuarial differences on retirement benefits isdifferent to the method in the consolidated financial statements.
(5) Method of significant hedge accounting
1) Method of hedge accounting
Interest rate swaps are accounted for using the exceptional treatment as they satisfy theapplicable conditions.
2) Hedging instrument and hedged item

Hedging instrument: ····· Interest rate swaps
Hedged item: ·············· Interest on loans3) Hedging policy
Interest rate swap transactions are used to avoid interest rate fluctuation risk associated withfund procurement.
4) Method of evaluating hedge effectivenessHedging effectiveness in interest rate swap transactions is not evaluated as they areaccounted for using the exceptional treatment.
(6) Accounting for Consumption Taxes
The consumption taxes are excluded from transaction amounts.
3. Notes to the Non-consolidated Balance Sheet(1) Accumulated depreciation of property, plant and equipment:
440 million yen(2) Balance of liabilities on guaranteei.
Joint and several guarantee based on clearing agreementswith other transportation companies:
300 million yen
ii. Pledge of letter of management support concerning debt financing:
267 million yeniii. Joint and several guarantee for debt financing:
169 million yen(3) Loans receivable from, and loans payable to, subsidiaries and associates
Short-term loans receivable:
55,047 million yen
Long-term loans receivable:
26,558 million yen
Short-term loans payable:
110,312 million yen
4. Notes to the Non-consolidated Statement of Income
Transaction with subsidiaries and associates:

Operating revenue
Operating expenses
Non-operating transactions

61

27,354 million yen
1,661 million yen
353 million yen

5. 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

17,062

Number of decreased
shares in fiscal year
under review

Number of shares as ofend of fiscal year underreview

0

17,0641

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 through the sale of shares less than one unit.

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

26

Accrued enterprise tax

36

Loss carried forward

211

Other

13

Deferred tax assets (current assets)

Total

288

Deferred tax assets (non-current assets)
Provision for retirement benefits

22

Loss on valuation of investment securities

1,251

Shares of subsidiaries and associates

37,143

Loss carried forward

1,011

Other
Deferred tax assets(non-current assets)
Allowance for devaluation

2,959
Subtotal

42,388(42,338)

Deferred tax assets (non-current assets)

Total

49

Deferred tax liabilities (non-current liabilities)
Valuation difference on available-for-sale securities(3,105)

Other

(29)

Deferred tax liabilities (non-current liabilities)
Net deferred tax assets (liabilities)

Total(3,134)(2,796)62

7. Notes to Dealings with Related Parties
Subsidiaries, etc.

(Millions of yen)Company

Location

Subsidiaries

YamatoTransport Co.,Ltd.

Chuo-ku,Tokyo

50,000TA-Q-BIN;
Kuroneko
DM-BinDirectholdings
100.00%Subsidiaries

Yamato Global
Express Co.,Ltd.

Minato-ku,
Tokyo

1,000

Domestic air
cargo transportbusiness

Directholdings
100.00%Subsidiaries

YamatoSystemDevelopment
Co., Ltd.

Koto-ku,Tokyo

Subsidiaries

YamatoFinancial Co.,Ltd.

Subsidiaries

Subsidiaries

Subsidiaries

CapitalMain businessHolding ofvoting rights

StatusRelationship
Concurrent
Business
positions held
relationships
by officers
Executive
management
Concurrent
Loans for3 personsfunding
Concurrent
1 person

Executive
management

1,800

Systemdevelopment

Directholdings
100.00%Concurrent
3 personsExecutive
management
Entrusted withsystemoperation andmanagement

Chuo-ku,
Tokyo

1,000

Settlement
service forpayment ofmerchandise

Directholdings
100.00%Concurrent
2 personsExecutive
management

Yamato Lease
Co., Ltd.

Toshima-ku,
Tokyo

30

General leaseservices

Directholdings
100.00%None

Executive
management
Loans forfunding

YamatoAutoworks
Co., Ltd.

Chuo-ku,Tokyo

30

Vehiclemanagement
service businessDirectholdings
100.00%Concurrent
2 personsExecutive
management(Millions of
HK$)
691

Management ofregional
operations inSoutheast Asia,
businessdevelopment
and market
research

None

Management ofregional
operations inSoutheast Asia,
businessdevelopment
and market
research

YAMATOINVESTMENT
(HONG
KONG)
LIMITED

Hong Kong

63

Directholdings
100.00%(Millions of yen)
StatusCompany

Subsidiaries

YamatoTransport Co.,Ltd.

Dealings

Dealing amount

Receipt ofexecutive
management
fee

4,997

Loans forworking capital

26,000

Repayment ofloans for capitalfunding

11,002

Repayment ofworking capital

5,784

Receipt ofinterest

90

Funding

8,401

Payment ofinterest
Subsidiaries

YamatoGlobalExpress Co.,Ltd.

Funding

Subsidiaries

Subsidiaries

YamatoFinancial Co.,Ltd.

Subsidiaries

Yamato Lease
Co., Ltd.

Subsidiaries

YamatoAutoworks
Co., Ltd.

Subsidiaries

YAMATOINVESTMENT
(HONG
KONG)
LIMITED

Notes:

Payment ofinterest
Payment ofsystemoperation andmaintenancecosts
Funding0—

Short-term loans
receivable
Long-term loans
receivable

16,265
12,836

Deposits received

39,447

Deposits received

6,159

Deposits received

13,985

Operating accounts
payable180

Deposits received

27,942

Short-term loans
receivable
Long-term loans
receivable

32,982
10,000

Deposits received

6,403

3,302
1

1,112

(10,718)

Payment ofinterest
Loans forworking capital
Receipt ofinterest

42,982

Funding

1,045

1

23

Payment ofinterest
Acquisition of
new shares—

425

Payment ofinterest
Funding

YamatoSystemDevelopment
Co., Ltd.

4

Account item

Balance at end of
period

0

9,310

—

—

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 Lease Co., Ltd., the dealing amount of short-term loans
receivable records the net amount of increase or decrease during the period.

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

909.04 yen
38.56 yen

64

(TRANSLATION)

Audit Report of Accounting Auditor on Consolidated Financial Statements

Independent Auditors’ Report
May 4, 2018
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, 2017 to March 31, 2018, 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 anddisclosures in the consolidated financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of theconsolidated 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 theconsolidated financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal
control. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.

65

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.

66

(TRANSLATION)

Audit Report of Accounting Auditor on Non-consolidated Financial Statements

Independent Auditors’ Report
May 4, 2018
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 153rd
business year from April 1, 2017 to March 31, 2018, 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 anddisclosures in the non-consolidated financial statements and accompanying detailed statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks ofmaterial 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 areappropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by management,67

as well as evaluating the overall presentation of the non-consolidated financial statements andaccompanying 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.

68

(TRANSLATION)

Audit Report of the Audit & Supervisory Board

AUDIT REPORTrdRegarding the performance of duties by the Directors for the 153 business year from April 1, 2017 toMarch 31, 2018, 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,
allocation of 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 theenvironment 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 otherrelevant 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

69

Statement) and supporting schedules, as well as consolidated financial statements (Consolidated
Balance Sheet, Consolidated Statement of Income, Consolidated Statement of Changes in Equity, andNotes 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.
(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 11, 2018
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

70

Kazuko Takahara(seal)

Etsuo Ogawa(seal)

Hiroyuki Kanae(seal)

Takashi Yamashita(seal)

Access to the Venue
Date and time:Thursday, June 28, 2018, 10:00 a.m. (The reception desk will
open at 9:00 a.m.)
Location:
B1F Hall, Belle Salle Shiodome,
Sumitomo Realty & Development Shiodome Hamarikyu Building
21-1, Ginza 8-chome, Chuo-ku, Tokyo
TEL:
03-3541-4141
Please note that the venue of the 153rd Ordinary General Meeting of Shareholders
has been changed from last year.
JR Line: Shimbashi Station
15 minutes walk from Shimbashi Station (Shiodome Exit or Karasumori Exit)
Toei Asakusa Line: Shimbashi Station
15 minutes walk from the Exit for JR Shimbashi Station and Shiodome district.
Tokyo Metro Ginza Line: Shimbashi Station
15 minutes walk from Shimbashi Station (Exit 4)
Toei Oedo Line: Shiodome Station
10 minutes walk from the Exit for JR Shimbashi Station
Note: Vehicle parking will not be available at the meeting venue, so we ask that you
refrain from coming to the event by car.

71