Profile

Seino
Co.,Co.,Ltd. Ltd.
(“the (“theCompany”)
began businessSeinoHoldings
Holdings
Company”)
beganas abusiness
as a trucking
company
in 1930 and
was Based intrucking
company
in 1930 and
was incorporated
in 1946.

incorporated
1946. Based in the city of Ogaki, Gifu
thecity of Ogaki,inGifu.

Prefecture,
we are a leading trucking company, expanding
Prefecture, we are a leading trucking company, expanding in stepin step with the growth of the Japanese economy and thewith the growth of the Japanese economy and the development of thedevelopment of the nation’s extensive expressway network.
nation’s
extensive
Ontransferred
October 1, 2005,
On October
1,expressway
2005, the network.
Company
its theCompanytransferreditstransportation
businessandotheroperationstransportation business and other operations to a newcompany—which
has taken
the theoriginal
nametoa new company—which
has taken
original
nameSeino
Seino
Transportation
Co.,
Ltd.—andwas renamed
Seino Co., Ltd.,
Transportation
Co.,
Ltd.—andwas renamed
Seino Holdings
Holdings Co., Ltd. a pure holding company structure.
adopting a pure holding company structure.

The Seino Group currently consists of the pure holding company
company
Seino Holdings, 58 consolidated subsidiaries and 14
Seino Holdings,
81 consolidated
subsidiaries
and 22vehicle
affiliatessales,
engaged inaffiliates
engagedin transportation
services,transportation
services,
vehiclesales,
merchandise
sales,
leasingfor realmerchandise sales, leasing for real estate services and otherservices.
estate services and other services.
In
itsmainstay
mainstay
Transportation
Servicesbusiness,the hasIn itsTransportation
Servicesbusiness,
the Company
Company
has
taken
steps
to
build
even
more
convenienttaken steps to build even more convenient logistics systems, all the while
logistics systems, all the while adhering to its “customer-first”
adhering to its “customer-first” principle.
principle. As of March 31, 2011, Seino offers efficient
As of March 31,
2019, Seino
offers efficient
servicestransportation
services
throughout
Japan transportation
via its 634 domestic
throughout
Japan
via
its
715
domestic
terminals,
a
fleet
of
24,878terminals, a fleet of 24,321 trucks and a trucking networktrucks
thataverages
5,000
routesthat
daily.
Overseas,
has transferred its
and a trucking
network
averages
4,000 Seino
routes daily.
international
forwarding
operations
to Schenker-Seino
Co.,
The Company
is also working
toward improved
revenue and reducing
Ltd.,
a
joint
ventureestablishedwith
SchenkerAGinburdens on the environment by moving forward with logistics reforms
amid the current manpower shortage. Accordingly, the Company has

Company aims to bolster its

expanded its transportation
services througha modal changeof part ofcompetitivenessby optimizing
the synergies

its long-distance transportationlines to railway
and ferries, andhas also
of Seino’s domestictransportation
network

Schenker’s
globalnetwork andbegun transportationandwithdouble-trailer
trucks.

cutting-edge
systems.rapid services that
The Seino Groupis committed IT
to providing

deliver total customer satisfaction andproviding rapid services that deliver total
will proceed down the “Road tocustomer satisfaction
and will proceed down
Success”
to becomea highlyprofitable
the “Road to
Success”
to becomea highlycompany
throughinitiatives
to develop
profitable company through initiatives
todevelop a progressivemodelthatthatwilla progressivebusinessbusiness model
will becomebecome
the standard
for forthe standard
next-generationtransportation
business.
next-generation transportation
business.

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

Contents
Contents
Financial Highlights
Financial
Highlights

11

To Our Shareholders,Shareholders,Customers
CustomersandandFriends
Friends

22

Special FeatureSpecialFeature44

Review ofof Operations
Operations

66

Financial Review
Financial
Review

88

Six-year Summary
Six-year
Summary

99

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

13
13

Notes toto Consolidated
ConsolidatedFinancial
FinancialStatements
Statements

14
14

Report ofof Independent
IndependentAuditors
Auditors

24
24

Seino Group
Group

25
25

Board of Directors(As of June 27, 2019)
President

Yoshitaka Taguchi

Representative Director

Takao Taguchi

Directors

Masahiro Kamiya
Hidemi Maruta
Harumi Furuhashi
Nobuyuki Nozu

Outside Directors

Kenjiro Ueno
Meyumi Yamada
Shintaro Takai

Standing Statutory Auditors

Shingo Terada
Nobuhiko Ito

Outside Statutory Auditors

Fumio Kato
Eiji Kasamatsu

Seino Holdings Co., Ltd.

Financial Highlights(Billions of Yen)

For the Years Ended March 31, 2019, 2018 and 2017

Thousands of
U.S. Dollars (Note)

Millions of Yen
2019

CONSOLIDATED BASIS:
Operating revenue
Operating income
Profit before income taxes
Net income
Net income per share (yen)

2018

2017

700
600

2019
500

¥ 618,436 ¥ 596,130 ¥ 567,539
27,87927,117
31,20930,54528,69033,46320,047
18,206
21,216101.8892.09
104.85$ 5,571,495
281,162
301,468
191,135
0.94

400
300
200
100

Thousands of
U.S. Dollars (Note)

Millions of Yen
2019

CONSOLIDATED BASIS:
Cash and cash equivalents, and short-term investments
Property and equipment, net of accumulated depreciation
Total assets
Long-term debt and other long-term liabilities
Net assets
Net assets per share (yen)

2018

2017

0

2017

2018

2019

2018

2019

2018

2019

2019

Net income¥111,998 ¥ 104,197
295,321
310,633
628,728
657,983
21,776
19,905405,739426,2072,057.98 1,998.90¥ 98,031
290,706
594,264
26,468381,299
1,912.12$ 1,008,991
2,798,496
5,927,775
179,325
3,839,703
18.54(Billions of Yen)

25
20
15
10
5
0

(Note) U.S. dollar amounts are translated at ¥111 = U.S. $1, only for the convenience of readers.

2017(Billions of Yen)

450
400
350
300
250
200

Corporate Data

150
100
50

(As of March 31, 2019)0Company Name
Head Office
Date of Establishment
Paid-in Capital
Number of Shares Issued
Stock Listings
Transfer Agent
Independent Auditors

Seino Holdings Co., Ltd.
1, Taguchi-cho, Ogaki, Gifu 503-8501, Japan
Tel: 81-584-82-3881 Fax: 81-584-82-5043
November 1, 1946
¥42,482 million
207,679,783
The First Section of Tokyo Stock Exchange (code 9076)
The First Section of Nagoya Stock Exchange (code 9076)
Mitsubishi UFJ Trust and Banking Corporation
KPMG AZSA LLC

2017

1

Annual Report 2019
Message from the Management

To Our Shareholders, Customers and Friends
We would like to take this opportunity to express our appreciation to our stakeholders, including shareholders
and other investors, for the consistent support you have shown us over the years. The results for the fiscal year
ending March, 2019 (April 1, 2018 to March 31, 2019) are presented herein.

New Medium-term Management Plan
“Value-Up Challenge 2020”2017/42020-3
The following is a brief report on the performance of
Seino Holdings Co., Ltd. for the fiscal year ended March 31,
2019, our 98th term (from April 1, 2018 to March 31, 2019).
In the fiscal year under review, Japan’s economy continued
to recover moderately against a backdrop of improvements incorporate earnings and the employment environment, a
pickup in personal consumption, among other factors.
Despite this improvement, however, the outlook remains
uncertain amid concerns over how the Japanese economy
will be affected by instability in the international situationand financial and capital markets, and other uncertainties.
In the transportation industry, the Seino Group’s
mainstay business, while facing various management
challenges, such as rising outsourcing costs and increasing
personnel expenses under a strained labor supply/demandenvironment, we have been steadily increasing freight
volumes amid the improving economic landscape and havestarted to see the results of our initiatives aimed at receiving
reasonable transport fees and charges.
Facing such circumstances, the Seino Group has
formulated the medium-term management plan “Value-Up
Challenge 2020: Take Off Toward Growth,” which
commenced in the fiscal year under review. While seeking tostretch our “strengths” accrued up until now, we have united
to pursue maximization of our corporate value, and to create
new value.
In addition, to enhance driver recruitment necessitated by
low birthrate and aging population, the Company made the
Seino Driving School (headquarters: Kaizu City, Gifu
Prefecture) a subsidiary on November 1, 2018, for the
purpose of expanding the scope and increasing the numberof hired drivers by supporting those who specifically wish toobtain a large motor vehicle license and by establishing a
training system for those who have not yet obtained alicense.
As a result, operating revenue for the fiscal year ended
2

March 31, 2019 was ¥618,436 million (up 3.7% year on year),
operating profit was ¥31,209 million (up 11.9% year on year),ordinary profit was ¥33,629 million (up 15.5% year on year),and profit attributable to owners of parent was ¥21,216
million (up 5.8% year on year).

Future Outlook
In our outlook for the Japanese economy, we expect thatthe moderate tone of recovery will continue amid theongoing improvement in the employment and income
environments with positive effects also expected fromvarious policy measures. Nevertheless, there are lingering
uncertainties reflecting concerns such as the impact on the
global economy from trade frictions due to the increase inprotectionism and fluctuations in the financial and capital
markets.
Facing such circumstances, the Seino Group will steadily
implement the various measures of the three-year mediumterm management plan “Value-Up Challenge 2020: Take
Off Toward Growth,” which currently in the final fiscal year.
While pursing the maximization of our corporate value, wewill also strive to solve social issues through our business.
In our mainstay Transportation Services Business, wehave started to see the results of our initiatives aimed atreceiving reasonable transport fees and charges, but we also
expect a reduction in the volume of freight handled after the
consumption tax increase and an increase in personnel
expenses and outsourcing costs due to the labor shortage.
Therefore, we will provide web services and shipping
support systems designed to solve customer issues andpropose overall logistics optimizations to further improvetransportation quality and efficiency to link these efforts to
productivity improvements. In addition, we will implementtransportation reform including introduction of heavy
vehicles such as articulated trucks, expansion of modal shifts
and promotion of freight handling separation.
Moreover, we will proactively enhance the facilities andinitiatives which contribute to the recruitment and improved
retention rate of employees as well as maintain sites byrebuilding deteriorating and cramped facilities.
In addition, bearing in mind that the volume of freighttransportation in Japan will shrink as the population declines
and the conditions of low birthrate and aging population
advance, we will also work on international transportation
business including overseas expansion centering on the Asian
region.
In passenger vehicle sales in the Vehicle Sales Business,
we expect that the growth in the number of new vehicles
sold will be eroded by the changes in the social structuresuch as low birthrate and aging population, and declining
car ownership among young adults. As a result, we plan on
keeping the business stable through expanding our portfolioof businesses relating to used car sales, car part sales, vehicle
inspections and automotive repairs while focusing on new
vehicle sales of mini-sized vehicles with small engine
displacement. In truck sales also, we will make efforts to
expand and enhance our portfolio of businesses relating tovehicle inspection and automotive repairs, and carry out
initiatives for used vehicle part sales. We will carry out sales
activities that are locally based while increasing employee
satisfaction in addition to customer satisfaction through store
renovations and introductions of the latest equipment.
In the Merchandise Sales Business and Other Business,
we will expand our sales by strengthening existing businesses
and develop new products designed from the viewpoint of
the customer.
In the Leasing for Real Estate Services Business, we will
work to develop our leasing and sales of idle real estate while
effectively utilizing underutilized real estate.
While making steady efforts to achieve these businesschallenges, the Seino Group will work to strengthen thebusiness foundation and contribute to our customers’
prosperity to achieve further growth.
To all shareholders, we sincerely ask for your ongoing
encouragement and support into the future.

Taguchi Yoshitaka,
President and Chief Operating Officer

June 20193

Annual Report 2019
Special Feature

Expanding Our Operations Scope and Creating New Value
2019 marked the third year of the three-year medium-term
management plan "Value-Up Challenge 2020: Takeoff Toward
Growth." As we pursue the maximization of our value, using thestrength we have cultivated until now, we will swiftly set forth
reform and the spirit of challenge to create new values.

Main Topics for 2019
Beginning Transport with Specialized
Freight Trains for the First Time

Seino Transportation began the operation of a specialized freighttrain, the Kangaroo Liner SS60, between Osaka, Koriyama, andSendai for the first time on May 7.
These specialized trains travel once a day both ways from each end point,
Monday to Saturday through the Suita Freight Terminal (Suita City, Osaka
Prefecture), Koriyama Freight Terminal (Koriyama City, Fukushima
Prefecture), and Sendai-ko Station (Sendai City, Miyagi Prefecture). Bychanging to railway transportation using 15 container cars with a carrying
capacity matching 60 trucks, Seino Transportation has been able to reduce theburdens of drivers. Additionally, a cut in 13,810 metric tons of CO2 emissions
a year correlates to a reduced burden on the environment.

Co-Creation of Business with Ventures

Seino Holdings joined an acceleration program hosted by Deloitte
Tohmatsu Venture Support along with four major companies thisyear to expedite its co-creation of new areas of business with ventures
making use of the group’s management resources.
A characteristic of the program is how it allowed the multiple
participating companies and ventures to come together in the cocreation of business. With application closing in September, proposals
from 38 ventures were received, and after screening, creators of the
proposals have begun trying them out since mid-November.

Offering the Support Seminar for
Proactive Women

Implementing Digital Signatures

Seino Transport began implementing “digital signatures” onhandy terminals (or “HTs”) used by its drivers in their delivery andpick-ups as of June 18.
Until then, stamping one’s seal or signing one’s name on each
invoice was necessary at the time of the package’s delivery, but now,
just a single signature on the HT’s screen takes care of the receptionof multiple packages with multiple delivery invoices, making less of ahassle for both customers and the delivery crew. With theimplementation of digital
signatures, the verificationof signatures indicating
reception of packages has
also been streamlined for
employees.

4

The SJ Jojo Club , created by Seino Information Service andcompanies and organizations within the area served by Softopia Japan,
held the Support Seminar for Proactive Women to help working
women eliminate anxiety and heighten their communication skills.
Thirty working women in their 20s and 30s participated, breaking
into six groups to think about and exchange ideas on designing theircareers as well as to give each other feedback on their strong points
and areas to work on, letting all participants improve theircommunication skills.

Beginning Passenger and Freight
Service with Taxis

Seino Transport and Suito Travel began business in transporting
both passengers and freight in Ibi County’s Ibigawa-cho, Gifu
Prefecture from March 18.
A business providing passenger transportation (Suito Travel) received
permission to start business in Ibigawa-cho providing the transportationand delivery of general freight via taxi—a first in the Chubu area.

Addition of Seino Driving School to
the Group

Seino Holdings added Seino Driving School to its group on
November 1.
This addition coincides with worries regarding the lack of workers
stemming from Japan’s decreasing birthrate and aging population andthus aims to assure the procurement of drivers. Support is lent especiallyto those hoping to qualify for a large, medium, or regular vehicle license
or Category 2 license, and Seino Holdings is working to expand the areafrom which more new drivers can be procured through the establishmentof an education system for those without a license.

toward their dreams. Those fitting the prerequisite of being unable toexpect economic aid from guardians are eligible.
The scholarship works on a place-holding system for those selected
early on and provides monthly payments of ¥50,000 for the shortest
period of enrollment necessary to graduate with no need to pay any ofthe money back, letting them pursue their academic career without
fear of lack of monetary support.

Acquisition of an International
Standard Certificate

Seino Information Service obtained ISMS Cloud Security
Certification on May 21.
The company received the certification as a result of a third-party
organization’s acknowledgement of its five major cloud logistics
services identifying, evaluating, andmanaging risk appropriately based on
the international cloud security
standard, ISO/IEC 27017:2015.
Seino Information Service willcontinue working toward the further
improvement of its reliability in the
management and operation of its
cloud service’s information security,
and will also continue shaping its
cloud service as a worry-freeenvironment for users.

Transporting Relief Supplies toDisaster-Stricken Areas

The companies of the Seino Group were asked by the Japan
Trucking Association to help in transporting relief supplies to areasin Western Japan afflicted by July’s torrential rains.
Hinomaru Seino Transport’s Tottori Branch relayed about 2,000
packed meals to Yazu County’s Chizu-cho in Tottori Prefecture.
Shikoku Seino Transport’s Matsuyama Branch brought relief supplies
such as water and food to Ozu City in Ehime Prefecture, hit hard due
to its location at the center of the torrential rains. Seino Express also
helped by delivering cases of plastic bottles from Chiba to Okayama
City, Okayama Prefecture via two large and one mid-size trucks.

Establishment of the Taguchi Fukuju
Society Dream Scholarship

The Taguchi Fukuju Society established the grant-based Taguchi
Fukuju Society Dream Scholarship.
This scholarship is aimed at those leaving foster homes, children's
self-reliance support facilities, and other such places in Gifu
Prefecture with the will to become independent and move forth5

Annual Report 2019

Expanding Our Operations Scope and Creating New Value
Transportation Services BusinessIn the Transportation Services Business, working under the
medium-term management plan, we responded to the issue ofthe population decline and shortage of labor caused by low
birthrate and aging population by promoting our strategic
vision of “Gain efficiency through virtuous cycles” and strove
to improve productivity by making the best use of thepotential of our personnel.
At Seino Transportation Co., Ltd., the core company of
the Transportation Services Business group, we expanded thescale of the Shizuoka branch (Shizuoka City) and relocated toa new building to strengthen the transportation network andimprove operational efficiency.
In addition, we focused on securing the volume of freight
handled through capturing and keeping new freightconsignors by providing time value to customers throughdiagramming for the purpose of on time route departures intransportation between cities, and proposing transportation
methods suited to customer demands while continuing
negotiations to receive reasonable transport fees and charges,
and fuel surcharges.
Meanwhile, there was an increase in the penetration rate ofelectronic signature use at the time of delivery, which wasstarted to improve customer convenience and operational

efficiency, and we introduced a web receipt query service. As aresult, this enabled customers to search for receiving stamps
on their own and simplified customer efforts to further
improve customer satisfaction and operational efficiency.
In addition, we promoted transportation reform amid ashortage of labor by expanding modal shifts to switch part oflong-distance routes to transportation by railways and ferries
and by starting operation of articulated trucks, which led to
improved earnings and a reduced environmental burden.
Furthermore, for the purpose of recruiting personnel andimproving retention rates amid the shrinking population ofJapan’s labor force, we enhanced the benefits package while
also shortening working hours through labor reform andreduced the operational burden.
As a result of the above, operating revenue for this segment
was ¥462,459 million (up 4.4% year on year) and operating
profit was ¥24,475 million (up 16.7% year on year).

Vehicle Sales BusinessIn passenger vehicle sales, we worked to promote
campaigns and other activities centered on original cars withspecial specifications and safety support cars. However, while
the number of units sold increased for mini-sized vehicles
with small engine displacement, the cycle of the new-model
effect for the popular car models came to an end and very few
new models were introduced, which led to the number of newvehicles sold in the current fiscal year ending lower than thatof the previous fiscal year. Moreover, in used vehicle sales as
well, the reduction in trade-in vehicles had an impact, and thenumber of vehicle s sold were lower than that of the previous
fiscal year. In the service division, we strove to secure revenues
by promoting vehicle inspections and vehicle maintenance andgarage services, as well as the sales of products that lead torepeat visits such as maintenance packages and automotive
coatings.
In truck sales, the number of units sold in Japan increased
due to registration of heavy trucks ordered during the previous
fiscal year, and the number of new vehicles sold increased year
on year. While increasing the number of garage services
6through promoting vehicle maintenance and garage services,such as vehicle inspections, we also focused on sales of usedparts.
In office expansion efforts, the Ogaki branch of Netz
Toyota Gifu Co., Ltd. (Ogaki City, Gifu Prefecture) relocatedto a new building and the Lexus Yabuta dealership (Gifu
Prefecture) of Toyota Corolla Gifu Co., Ltd. and the Unicla
Jiko Co., Ltd. headquarters and maintenance factory (Nagoya
City) are undergoing a full refurbishment.
As a result of the above, operating revenue for this segment
was ¥102,234 million (down 1.1% year on year) and operating
profit was ¥4,851 million (down 1.5% year on year).

Merchandise Sales Business
The Merchandise Sales Business engages in the sale of fuel,paper and paper products, and other products. As a result of
an increased unit sales price in the sales of fuel and firm salesof domestic tissue papers, operating revenue for this segment
was ¥33,518 million (up 6.2% year on year) and operating
profit was ¥829 million (up 2.4 % year on year).

Leasing for Real Estate Services BusinessIn the Leasing for Real Estate Services Business, we strive
to effectively utilize business resources by leasing the former
truck terminal and store sites, which had been replaced mainly
due to the impact of urban development and increasingly

cramped conditions.
As a result of the above, operating revenue for this segment
was ¥1,651 million (up 3.3% year on year), and operating
profit was ¥1,334 million (up 7.7% year on year).

Other Business
Our Other Business segment includes the information
services business, the housing sales business, the construction
contract business, the passenger transportation business, andthe personnel services business. Operating revenue for thissegment was ¥18,574 million (up 12.9% year on year), andoperating profit was ¥902 million (down 2.0 % year on year).

Operating Revenue by Business Segment(Millions of yen)
FY Ended March 31, 2019

FY Ended March 31, 2018

Results

Results

Composition

Composition

Year-on-YearTransportation Services

462,45974.8%

443,168

74.3%

4.4%

Vehicle sales

102,234

16.5%

103,34217.3%(1.1%)

Merchandise sales

33,518

5.4%

31,575

5.3%

6.2%

Leasing for Real-estate Services

1,651

0.3%

1,599

0.3%

3.3%

Others

18,5743.0%

16,446

2.8%

12.9%

Total

618,436

100.0%

596,130

100.0%

3.7%

Operating Income by Business Segment(Millions of yen)
FY Ended March 31, 2019

FY Ended March 31, 2018

Results

Results

Composition

Composition

Year-on-YearTransportation Services

24,47578.4%

20,965

75.2%

16.7%

Vehicle sales

4,851

15.5%

4,922

17.7%

(1.5%)

829

2.7%

810

2.9%

2.4%

1,334

4.3%

1,239

4.4%

7.7%

Others

902

2.9%

921

3.3%

(2.0%)

Total

32,391103.8%

28,857103.5%

12.2%

Elimination(1,182)(3.8%)(978)(3.5%)—

Consolidated

31,209100.0%

27,879100.0%

11.9%

Merchandise sales
Leasing for Real-estate Services

7

Annual Report 2019

Financial Review
Operating Results

end of the previous consolidated fiscal year, amounting to¥426,207 million. Retained earnings, etc. were the main
factor in the increase.

The consolidated sales of Seino Holdings for the fiscal year
ending March 2019 was ¥618,436 million (a 3.7% increase
from the previous fiscal year). This was due to the reception of
appropriate shipping charge prices and favorable conditions
regarding charter transport.
The operating costs amounted to ¥546,514 million, which
was a 3.3% increase from the previous fiscal year, due to a risein outsourcing costs of vehicles used, but the operating cost
rate to sales was 88.3%, a 0.5% decrease from the previous
fiscal year.
Selling expenses and general administrative expenses
came to ¥40,713 million (a 4.2% increase from the same
period of the previous year) due to a rising labor cost, andoperating revenue came to ¥31,209 million.
As a result, this term’s net income before income taxes andminority interests was 9.6% more than the previous fiscal
year, coming to ¥33,463 million, and the net income for thisterm came to 5.8% more than the previous fiscal year at¥21,216 million.
This term’s net income per share was ¥104.85 and thereturn on equity was 5.2%. The annual cash dividend pershare rose to ¥32.00, which was a 6.7% increase from theprevious fiscal year.

Cash Flows

Cash flow from operating activities amounted to ¥48,009
million; ¥6,722 million up from the previous consolidated
fiscal year, due to an increase in this term’s net income before
taxes and minority interests and a decrease in things likeaccounts receivable.
Cash flow from investment activities came to −¥22,530
million, which was a ¥3,742 million decrease from theprevious consolidated fiscal year, resulting from the absenceof expenditures from last term’s purchase of investments insecurities.
Cash flow from financial activities grew ¥14 million fromthe previous consolidated fiscal year, coming to −¥7,194
million because of a decrease in expenditures from thepurchase of treasury stock.
As a result, cash and cash equivalents in the current
consolidated fiscal year increased ¥18,248 million from theprevious consolidated fiscal year, totaling ¥98,462 million.

Financial Position

Total assets at the end of the current consolidated fiscal
year totaled ¥657,983 million, which was an increase of¥29,255 million from the end of the previous consolidated
fiscal year. The main factor in this was things like an increasein tangible fixed asset purchases and deferred tax assets.
Liabilities totaled ¥231,776 million, which was a ¥8,787
million increase from the end of the previous consolidated
fiscal year. Lastly, net assets grew ¥20,468 million from theOperating income to operating revenue
Net income (loss) to operating revenue

Net income (loss) to total assets
Return on equity ratio

Shareholders’ equity ratio

(%)

(%)

(%)

8

8

80

7

7

6

6

5

5

4

4

3

3

2

2

1

1

0

0

60

40

-1

8

2014

2015

2016

2017

2018

2019

-1

20

2014

2015

2016

2017

Operating income to operating revenue

Net income (loss) to total assets

Net income (loss) to operating revenue

Return on equity ratio

2018

2019

0

2014

2015

2016

2017

2018

2019

SEINO HOLDINGS CO., LTD. and Consolidated Subsidiaries

Six-year Summary

For the Years Ended March 31, 2019, 2018, 2017, 2016, 2015 and 2014
Millions of Yen
2019
For the year:
Operating revenue:
Transportation services
Vehicle sales
Merchandise sales
Leasing for real estate services
Other
Operating costs
Selling, general andadministrative expenses
Operating income
Net income (loss)
At year-end:
Current assets
Total assets
Current liabilities
Short-term borrowings
Long-term debt, including current maturities
Net assets

¥

2018

618,436
462,459
102,234
33,518
1,651
18,574
546,514¥2017

596,130
443,168
103,342
31,575
1,599
16,446529,196¥2016

567,539422,870
100,237
27,7491,543
15,140502,639¥2015

555,457
416,113
94,441
28,0291,472
15,402492,802¥2014

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

543,407393,320
100,569
33,306
1,421
14,791490,00240,71331,20921,21639,05527,87920,04737,783
27,117
18,206

36,46926,186
18,86433,402
21,386
14,45633,21620,18915,490251,683
657,983
130,357
5,470
19,905426,207

243,883
628,728
125,871
3,610
21,776
405,739

232,792594,264
106,479
2,704
26,468381,299

221,278
579,565
104,207
2,768
25,293371,007

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

221,873
542,411112,396
2,465
10,214346,339Yen
Per share data:
Net (loss) income:-BasicCash dividends¥

Number of shares issued

104.85
32.00¥

207,679

101.88
30.00

¥

92.09
27.00

¥

94.87
28.00

¥

Thousands
207,679
207,679

207,679

72.67
21.00

¥

77.85
11.00

207,679

207,679

3.9
2.7
2.6
4.2
64.5
217.4
52.4
28.9

3.7
2.9
2.9
4.7
62.2
197.4
58.3
14.1

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

5.0
3.4
3.2
5.2
63.8
193.1
55.2
30.5

4.7
3.3
3.2
5.2
63.4
193.8
55.9
29.4

4.8
3.2
3.1
4.9
63.1
218.6
56.8
29.3

4.7
3.3
3.3
5.3
63.0
212.3
57.2
29.5

Debt equity ratio

Payout ratio

(%)

(%)

(%)

240

120

50

Current ratio

200

40

90

160
30
120

60

20
80
30

10

40

0

2014

2015

2016

2017

2018

2019

0

2014

2015

2016

2017

2018

2019

0

2014

2015

2016

2017

2018

2019

9

Annual Report 2019
SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Balance Sheets
March 31, 2019 and 2018

Millions of yen
2019
Assets:Current assets:
Cash and cash equivalents (Note 3)
Short-term investments (Notes 3 and 5)
Trade receivables (Note 3)Inventories (Note 4)
Other current assets
Allowance for doubtful accounts
		
Total current assets¥

Property and equipment (Notes 6, 7 and 9):
At costAccumulated depreciation		Net property and equipment
Investments and other assets:
Investment securities (Notes 3 and 5)
Investments in and long-term loans to affiliates (Note 5)
Goodwill
Deferred tax assets (Note 17)
Employee retirement benefit asset (Note 12)
Other assets
		
Total investments and other assets
		
Total assets
Current liabilities:
Short-term borrowings (Notes 3, 9, 10 and 11)
Current portion of long-term debt (Notes 3, 9 and 11)
Trade payables (Note 3)
Accrued expenses
Income taxes payable
Other current liabilities
		
Total current liabilities

98,462
13,536
120,895
13,168
5,819(197)
251,6832018¥¥

Long-term debt (Notes 3, 9 and 11)
Employee retirement benefit liability (Note 12)
Asset retirement obligations (Note 8)
Accrued severance indemnities for directors and corporate auditors
Provision for directors’ stock payments
Deferred tax liabilities (Note 17)
Other long-term liabilities
		
Total liabilities$

887,045
121,946
1,089,144
118,631
52,423(1,775)2,267,414

631,291(320,658)
310,633

607,177(311,856)
295,321

5,687,307(2,888,811)
2,798,496

38,725
15,736
14,63016,475
14

48,231
3,255
14,081
14,653—348,874
141,766
131,802148,423

89,524
628,728

861,865$ 5,927,775

3,610
7,917
51,62015,8295,635
41,260125,871$

10,087¥80,21423,983
119,774
14,8895,234(211)
243,883

Thousands of
U.S. dollars
2019

95,667
657,983

5,470
2,609
54,414
16,772
7,376
43,716130,357

9,304

¥

¥

126
90,87449,27923,505490,216
151,099
66,450393,838
1,174,387

17,29675,486
3,053
1,457
42

13,85974,803
2,958
1,492
—

155,820680,054
27,505
13,126378

1,151
231,776785
222,989

10,3702,088,072

42,482
83,748290,156(4,452)411,934

42,482
82,040274,994(8,956)
390,560

382,721754,486
2,614,018(40,108)
3,711,117

12,708(114)(4,397)
(579)
7,618
6,655
426,207657,983

14,716(114)(5,934)
(304)
8,364
6,815
405,739628,728

114,487(1,027)

2,934

3,221

26,432

Commitments and contingent liabilities (Notes 13 and 14)
Net assets:
Shareholders’ equity (Note 15):
Common stock: 794,524,668 shares authorized and 207,679,783 shares issued
Capital surplus
Retained earnings
Less treasury stock at cost: 3,814,170 shares in 2019 and 8,108,445 shares in 2018
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gains on available-for-sale securities
Land revaluation decrement
Retirement benefit adjustment
Foreign currency translation adjustments
Total accumulated other comprehensive income
Noncontrolling interests		
Total net assets
		
Total liabilities and net assets
See accompanying Notes to Consolidated Financial Statements.
10

¥

¥

(39,613)(5,216)
68,631
59,955
3,839,703$ 5,927,775

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Income
For the Years Ended March 31, 2019, 2018 and 2017

2017

Thousands of
U.S. dollars
2019567,539$ 5,571,495

Millions of yen
2019
Operating revenue (Note 21)¥

Operating costs and expenses (Note 12):
Operating costs
Selling, general and administrative expenses

618,4362018¥

596,130¥

546,51440,713587,227
31,209529,196
39,055568,251
27,879502,639
37,783
540,422
27,117

4,923,549
366,784
5,290,333
281,162

716
(334)
(69)
—
436
478
874
(1,236)
51
88
1,250
2,254
33,463

709
(231)
(33)
—
596
292
(472)
(191)
509
63
1,424
2,666
30,545

610
(235)
(54)
(82)
(13)
84
296
(221)
—
—
1,188
1,573
28,6906,450(3,009)
(622)
—
3,928
4,306
7,874
(11,135)
460
793
11,261
20,306
301,468

Income taxes (Note 17):
Current
Deferred
Total income taxes

14,582(2,215)
12,367

11,984(1,443)
10,541

10,809(423)
10,386

131,369(19,955)
111,414

		

21,09620,00418,304

190,054

		Operating income

Other income (expenses):
Interest and dividend income
Interest expense
Loss on investments in partnerships
Loss on cancellation of leasehold contracts
Gain (loss) on sale or disposal of property and equipment
Gain on sale of investment securities
Share of profit (loss) of entities accounted for using equity method
Impairment loss on fixed assets (Notes 2(i) and 21)
Compensation received for the exercise of eminent domain
Gain on negative goodwill (Note 21)
Miscellaneous, net
		Profit before income taxes

Profit(Loss) profit attributable to noncontrolling interests
		Profit attributable to owners of parent

¥

(120)
21,216¥(43)
20,047¥98
18,206¥104.85—32.00¥

101.8898.48
30.00(1,081)
191,135

U.S. dollars

Yen
Per share:
Profit attributable to owners of parent-Basic-Diluted
Cash dividends

$

¥

92.09
89.01
27.00

0.94
—
0.28

See accompanying Notes to Consolidated Financial Statements.
11

Annual Report 2019
SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Comprehensive Income
For the Years Ended March 31, 2019, 2018 and 2017

2017

Thousands of
U.S. dollars
2019$

190,054$(17,703)
13,631(478)(2,306)(6,856)
183,198

Millions of yen
2019ProfitOther comprehensive income (Note 18):
Net unrealized gains on available-for-sale securities
Remeasurements of defined benefit plans, net of tax
Foreign currency translation adjustments
Share of other comprehensive income of affiliates accounted for using equity method		
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Noncontrolling interests¥

21,096¥(1,965)
1,513
(53)
(256)
(761)
20,335¥20,471
(136)

2018
¥

20,004¥18,304

¥

3,144
888
24
(35)
4,021
24,025
¥

947
(394)
(63)
(50)
440
18,74424,046(21)

18,71925¥¥$

184,423(1,225)

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Changes in Net Assets
For the Years Ended March 31, 2019, 2018 and 2017

Shareholders’ equity
Accumulated other comprehensive income
Total
Number of
Net unrealized
Foreignshares of
Total
gains onLand
Retirement currency accumulated
Non
other
common Common Capital Retained Treasury shareholders’ available-for- revaluation benefit translation comprehensive controlling Total net
stock issued stock
surplus earnings
stock
equity sale securities decrement adjustment adjustments income
interests
assetsMillions of yen
Balance at March 31, 2016 207,679,783 ¥ 42,482 ¥ 80,585 ¥ 247,617 ¥ (9,667) ¥ 361,017 ¥ 10,618 ¥ (114) ¥ (6,423) ¥(230) ¥ 3,851 ¥ 6,139
371,007
Profit attributable to owners of parent———
18,206—18,206——————18,206
Cash dividends———(5,548)—(5,548)——————(5,548)
Reversal of land revaluation decrement
—
—
—
—
—
—
—
—
—
—
—
—
—
Purchases of treasury stock and——4—(2,887)(2,883)——————(2,883)
fractional shares, net
Change in treasury shares of parent arising from
—
—
42
—
—
42
—
—
—
—
—
—
42
transactions with noncontrolling shareholders
Net changes in items other than
—
—
—
—
—
—
956
—
(362)
(81)
513
(38)
475
shareholders’ equity
Balance at March 31, 2017 207,679,783
42,48280,631
260,275 (12,554) 370,834
11,574(114)(6,785)
(311)
4,364
6,101
381,299
Profit attributable to owners of parent———
20,047—20,047——————20,047
Cash dividends———(5,328)—(5,328)——————(5,328)
Reversal of land revaluation decrement
—
—
—
—
—
—
—
—
—
—
—
—
—
Purchases of treasury stock andfractional shares, net
—
—
1,275
—
3,598
4,873
—
—
—
—
—
—
4,873
Change in treasury shares of parent arising fromtransactions with noncontrolling shareholders
—
—
134
—
—
134
—
—
—
—
—
—
134
Net changes in items other thanshareholders’ equity
—
—
—
—
—
—
3,142
—
851
7
4,000
714
4,714
Balance at March 31, 2018 207,679,783
42,482
82,040274,994(8,956) 390,560
14,716(114)(5,934)
(304)
8,364
6,815
405,739
Profit attributable to owners of parent———
21,216—
21,216——————
21,216
Cash dividends———(6,054)—(6,054)——————(6,054)
Reversal of land revaluation decrement
—
—
—
—
—
—
—
—
—
—
—
—
—
Purchases of treasury stock andfractional shares, net
—
—
1,704
—
4,504
6,208
—
—
—
—
—
—
6,208
Change in treasury shares of parent arising fromtransactions with noncontrolling shareholders
—
—
4
—
—
4
—
—
—
—
—
—
4
Net changes in items other thanshareholders’ equity
—
—
—
—
—
—
(2,008)
—
1,537
(275)
(746)
(160)
(906)
Balance at March 31, 2019 207,679,783 ¥ 42,482 ¥ 83,748 ¥ 290,156 ¥ (4,452) ¥ 411,934 ¥ 12,708 ¥ (114) ¥ (4,397) ¥(579) ¥ 7,618 ¥ 6,655 ¥ 426,207

12

Balance at March 31, 2018
Profit attributable to owners of parent
Cash dividends
Reversal of land revaluation decrement
Purchases of treasury stock andfractional shares, net
Change in treasury shares of parent arising fromtransactions with noncontrolling shareholders
Net changes in items other thanshareholders’ equity
Balance at March 31, 2019

Thousands of U.S. dollars$ 382,721 $ 739,099 $2,477,423 $ (80,685) $3,518,558 $ 132,577 $ (1,027) $ (53,459) $ (2,739) $ 75,352 $ 61,396 $ 3,655,306——
191,135—
191,135——————
191,135——(54,540)—(54,540)
—
—
—
—
—
—
(54,540)
—
—
—
—
—
—
—
—
—
—
—
—
—

15,351—

40,57755,928

—

—

—

—

—

—

55,928

—

36

—

—

36

—

—

—

—

—

—

36

—

—

—

—

—

(18,090)—

13,846(2,477)(6,721)(1,441)(8,162)$ 382,721 $ 754,486 $2,614,018 $ (40,108) $3,711,117 $ 114,487 $ (1,027) $ (39,613) $ (5,216) $ 68,631 $ 59,955

3,839,703

See accompanying Notes to Consolidated Financial Statements.

SEINO HOLDINGS CO., LTD. and Subsidiaries

Consolidated Statements of Cash Flows
For the Years Ended March 31, 2019, 2018 and 2017

2017

Thousands of
U.S. dollars
201928,690$Millions of yen
2019
Cash flows from operating activities:
Profit before income taxes¥
Adjustments for:		Depreciation
		 Impairment loss on fixed assets
		 Amortization of goodwill
		 Gain on negative goodwill
		 Net increase in employee retirement benefit liability
		 (Gain) loss on sale or disposal of property and equipment
		 Share of (profit) loss of entities accounted for using equity method
		 Loss on investments in partnerships
		 Gain on sale of investment securities
		 (Reversal) net provision for accrued severance indemnities for directors andcorporate auditors
		 Net provision for directors’ stock payments
Increase in trade receivables
Decrease (increase) in inventories
Increase in trade payables
Other, net				 Subtotal
Interest and dividends received
Interest paid
Income taxes paid				 Net cash provided by operating activities2018

33,463¥30,54519,001
1,236
1,437
(88)
2,929
(436)
(874)
69
(478)

17,775
191
1,165
(63)
2,518
(596)
472
33
(292)

(174)

42

¥

301,468(84)

171,180
11,135
12,946(793)
26,387(3,928)(7,874)622(4,306)(203)

8(1,567)

(845)
1,491
2,585
865
60,223974(264)(12,924)
48,009—(6,914)(2,270)6,489
2,000
50,8501,109(232)(10,440)
41,287—(3,589)(3,254)
1,873
2,731
46,968
1,081(242)(12,936)
34,871(7,612)
13,43323,288
7,793
542,550
8,775(2,378)(116,433)
432,514(30,620)(3,956)
2,686
10,474(18,556)(11,748)
3,540
1,687

(16,138)(4,636)
1,000
1,941

(275,856)(35,639)
24,19894,36016,977
221
1,109
—
2,515
13
(296)

54

378

Cash flows from investing activities:
Increase in property and equipment
Increase in long-term investments and loans
Decrease in property and long-term investments
Decrease in short-term investments
Purchase of shares of subsidiaries resulting in change in scope of
consolidation (Note 16)				 Net cash used in investing activities(1,114)(1,195)(7)(10,036)(22,530)(26,272)(17,840)(202,973)

Cash flows from financing activities:
Increase in long-term debt
Repayment of long-term debt
Net increase (decrease) in short-term borrowings
Proceeds from share issuance to noncontrolling shareholders
Dividends paid to shareholders
Dividends paid to noncontrolling interests
Purchases of treasury stock, net of disposals
Other, net				 Net cash used in financing activities				 Effect of exchange rate changes on cash and cash equivalents				 Net increase in cash and cash equivalents				 Cash and cash equivalents at beginning of year				 Cash and cash equivalents at end of year790
(1,731)595
48(6,054)(38)
357(1,161)(7,194)(37)
18,24880,214
98,462—(3,191)903
936(5,328)
(38)
393
(855)
(7,180)13
7,848
72,36680,214

1,360
(484)
(149)
43
(5,548)(46)(2,925)(735)(8,484)(20)
8,527
63,83972,366

7,117(15,595)
5,360
432(54,540)
(342)
3,216
(10,459)(64,811)(333)
164,397
722,648
887,045

¥

¥

¥

$

See accompanying Notes to Consolidated Financial Statements.
13

Annual Report 2019
SEINO HOLDINGS CO., LTD. and Subsidiaries

Notes to Consolidated Financial Statements
securities are computed based on the moving average method. Nonmarketablesecurities without available market quotations for available-for-sale securities arecarried at cost determined by the moving average method. Adjustments in carrying
values of individual securities are charged to income through write-downs when adecline in value is deemed other than temporary. Investments in partnerships arestated at the amount of net assets attributed to the ownership percentage of theCompany.

1. Basis of Consolidated Financial Statements
The accompanying consolidated financial statements of SEINO HOLDINGS
CO., LTD. (the “Company”) and its subsidiaries (together with the Company, the“Seino Group”) have been prepared in accordance with the provisions set forth in
the Financial Instrument and Exchange Law of Japan and its related accounting
regulations and in conformity with accounting principles generally accepted inJapan (“Japanese GAAP”), which are different in certain respects as to applicationand disclosure requirements from International Financial Reporting Standards(“IFRS”).
The accompanying consolidated financial statements have been restructured andtranslated into English from the consolidated financial statements of the Company
prepared in accordance with Japanese GAAP and filed with the appropriate Local
Finance Bureau of the Ministry of Finance as required by the Financial Instrumentand Exchange Law of Japan. Certain supplementary information included in thestatutory Japanese language consolidated financial statements, but not required
for fair presentation, is not presented in the accompanying consolidated financial
statements.
The translation of the Japanese yen amounts into U.S. dollar amounts is
included solely for the convenience of readers outside Japan, using the approximate
exchange rate prevailing at March 31, 2019, which was ¥111 to U.S. $1.00. The
translation should not be construed as a representation that the Japanese yenamounts have been, could have been or could in the future be converted into U.S.
dollars at this or any other rate of exchange.

(d)
(e)

(f)

(g)

2. Summary of Significant Accounting Policies(a)Principles of consolidation

The accompanying consolidated financial statements include the accounts of
the Company and all of its subsidiaries. Investments in significant affiliates areaccounted for by the equity method. Investments in affiliates not accounted for by
the equity method are stated at cost. Differences between the acquisition cost ofinvestments in subsidiaries and the underlying equity in their net assets, adjusted
based on the fair value at the time of the acquisition, are deferred as goodwill andamortized over the estimated useful life, 5-15 years, on a straight-line basis. Allintercompany transactions and accounts have been eliminated on consolidation.
Under accounting standards for consolidation, a subsidiary is defined as anenterprise which is controlled by another enterprise and is a majority (more than50%) owned enterprise or a 40% to 50% owned enterprise that meets certain
criteria. An affiliated company is defined as an enterprise in which the investor
has significant influence and is an enterprise other than a subsidiary that is a 20%
or more owned enterprise or a 15% to less than 20% owned enterprise that meets
certain criteria. For each of the years ended March 31, 2019, 2018 and 2017, there
were six companies that were not a more than 50% owned enterprise but were
nevertheless classified as subsidiaries based on the judgment of the Company inaccordance with the applicable accounting standards.
The number of subsidiaries and affiliates for the years ended March 31, 2019,2018 and 2017 was as follows:
2019

2018

2017

75
6
7
15

70
6
7
14

64
6
6
15

(h)

The Company and most of its subsidiaries have a fiscal year that ends on March
31. The overseas subsidiary closes its books on December 31. The Company has
consolidated the overseas subsidiary’s financial statements as of its year-end because
the difference between its fiscal year-end and that of the Company was not morethan three months. Significant transactions for the period between the subsidiary’s
year-end and the Company’s year-end were adjusted for on consolidation.
The consolidated financial statements include the accounts of the overseas
subsidiary prepared under IFRS in accordance with Practical Issues Task Force(“PITF”) No. 18, “Practical Solution on Unification of Accounting Policies
Applied to Foreign Subsidiaries for Consolidated Financial Statements,” issued by
the Accounting Standards Board of Japan (“ASBJ”).

(i)

Subsidiaries:
Domestic
Overseas
Affiliates accounted for by the equity method
Affiliates stated at cost

(b)
(c)

14

Cash and cash equivalents

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

Investments and marketable securities

The Seino Group classifies certain investments in debt and equity securities as“held-to-maturity,” “trading” or “available-for-sale.” The classification determines
the respective accounting method applied as stipulated by the accounting standard
for financial instruments. Held-to-maturity securities are stated at amortizedcost. Marketable securities with market quotations for available-for-sale securities
are stated at fair value, and net unrealized gains and losses on these securities
are reported as accumulated other comprehensive income in net assets, net of
applicable income taxes. Gains and losses on the disposition of available-for-sale

Accounting for derivatives

As of March 31, 2019 and 2018, the Seino Group did not hold nor had it
issued any derivative instruments.

Allowance for doubtful accounts

Allowance for doubtful accounts is provided for at the aggregate amount of
estimated credit loss based on an individual financial review of certain doubtfulor troubled receivables and a general reserve for other receivables based on thehistorical loss experience for a certain past period.

Inventories

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

Property and equipment and depreciation

Property and equipment, including significant renewals and additions, arestated at cost. Property and equipment of the Company and certain subsidiaries
are depreciated by the straight-line method for buildings and vehicles and by the
declining balance method for other property.
Property and equipment of other subsidiaries have been depreciated principallyby the declining balance method, except for buildings acquired on and after April
1, 1998, property held for lease and facilities attached to buildings and structuresacquired on and after April 1, 2016. Buildings acquired on and after April 1, 1998
and facilities attached to buildings and structures acquired on and after April 1,2016 by the domestic subsidiaries are depreciated by the straight-line method.
Some of the subsidiaries capitalize property for which the cost was not less than¥100,000 but below ¥200,000 and depreciate it over three years on a straight-line
basis.
The Seino Group, as lessee, capitalizes assets used under finance leases, except
for certain immaterial or short-term finance leases accounted for as operatingleases. Depreciation of leased assets capitalized in finance lease transactions as
lessee is computed by the straight-line method over the lease term as the usefullife with the assumption of no residual value. The leased property of a certain
subsidiary engaged in leasing operations as lessor is recorded at cost in property
and equipment in the accompanying consolidated balance sheets under operatinglease accounting and is depreciated over the term of the lease contract by thestraight-line method to the amount equal to the estimated disposal value at thelease termination date.
Expenditures on maintenance and repairs are charged to operating income as
incurred. Upon the disposal of the property, the cost and accumulated depreciation
are removed from the accounts and any gain or loss is recorded as income or
expense.

Intangible assets

Intangible assets are amortized on a straight-line basis. Software, which isincluded in intangible assets, is amortized using the straight-line method over theestimated useful life of five years.

Accounting standard for impairment of fixed assets

The Company and its domestic subsidiaries have adopted the "AccountingStandard for Impairment of Fixed Assets" issued by the Business Accounting
Council of Japan and the related practical guidance issued by ASBJ. The
standard requires that fixed assets be reviewed for impairment whenever events orchanges in circumstances indicate that the carrying amount of an asset may not
be recoverable. An impairment loss is to be recognized in the income statement
by reducing the carrying amount of the impaired asset or group of assets to therecoverable amount, to be measured as the higher of the asset’s net selling priceor value in use. Fixed assets include intangible assets as well as land, buildings
and other forms of property and are to be grouped at the lowest level for which
there are identifiable cash flows distinguishable from other groups of assets. For
the purpose of recognition and measurement of impairment loss, fixed assets aregrouped into cash-generating units, such as operating business branches other thanidle or unused property. The method used to group assets to measure impairmentof fixed assets in the transportation services segment is a method that groups assets
by the entire segment. At March 31, 2019, 2018 and 2017, recoverable amounts ofassets were measured based on value in use using discounted future cash flows at
interest rates principally of 8.2%, 7.5% and 6.6%, respectively, or net selling prices
using primarily appraisal valuations. As a result, the Seino Group recognizedimpairment loss as follows:Millions of yen
2019

Property subject toimpairment:

6 businessbranchesand 3 idle
properties

Impairment loss recorded for:land¥
buildings and structuresother property¥

2018

8 businessbranchesand 2 idle
properties

676 ¥
543
17
1,236 ¥

2017

3 businessbranchesand 1 idle
property

181 ¥
10
—
191 ¥

Thousandsof U.S.
dollars
2019

163 $
57
1
221 $

6,090
4,892
153
11,135(q)(r)

Accumulated impairment loss has been directly deducted from the applicable
assets.

(j)

(k)

(l)

(m)

(n)

(o)

(p)

Employee retirement benefits

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

(s)
(t)

Severance indemnities for directors and corporate auditors

The Seino Group pays severance indemnities to directors and corporate
auditors subject to the approval of the shareholders. Certain subsidiaries provide
for accrued severance indemnities for directors and corporate auditors at theamount that would have been payable if the directors and corporate auditors had
retired at the end of the fiscal year based on internal rules, in accordance with theJapanese Institute of Certified Public Accountants (“JICPA”) Audit and AssuranceCommittee Report No. 42, “Treatment for Auditing of Reserve Under Special
Taxation Measures Law, Reserve Under Special Laws and Reserve for Retirement
Benefits to Directors and Corporate Auditors.”

Provision for directors' stock payments

Per share data

Basic net income per share is computed by dividing income available tocommon shareholders by the weighted average number of shares of common
stock outstanding during the respective year, retroactively adjusted for stock splits.
Unless there is an anti-dilutive effect, diluted net income per share is calculated toreflect the potential dilution assuming that all convertible bonds are converted at
the time of issue. Diluted earnings per share for the fiscal years ended March 31,
2019 are not shown because there were no potentially dilutive shares.
Cash dividends per share shown for each fiscal year in the accompanying
consolidated statements of income represent dividends declared as applicable to
the respective years.

Adoption of consolidated taxation system

The Company and some of its subsidiaries have adopted the consolidated
taxation system, with the Company as the taxable parent company.

Changes in presentation method(i)

Changes due to adoption of “Partial Amendments to AccountingStandard for Tax Effect Accounting”
Upon application of “Partial Amendments to Accounting Standard for Tax
Effect Accounting” (ASBJ Statement No. 28, February 16, 2018 (hereinafter,“Statement No. 28”)) from the beginning of the current fiscal year, theCompany and its domestic subsidiaries changed the presentation and related
notes for deferred tax assets and deferred tax liabilities such that deferred
tax assets and deferred tax liabilities are classified as part of ‘investments
and other assets’ and ‘noncurrent liabilities,’ respectively. As a result, in the
consolidated balance sheet for the previous consolidated fiscal year, “deferred
tax assets” in “current assets” decreased by ¥5,522 million, and “deferred
tax assets” in “investments and other assets” increased by ¥5,187 million.
In addition, “deferred tax liabilities” in “fixed liabilities” decreased by ¥334
million, and total assets decreased by ¥334 million.
(ii) Accounting policies issued but not yet adopted“Accounting Standard for Revenue Recognition” (ASBJ Statement No. 29,
March 30, 2018 (hereinafter, “Statement No. 29”)) and Implementation
Guidance on Accounting Standard for Revenue Recognition” (ASBJ
Guidance No. 30, March 30, 2018 (hereinafter, “Guidance No.30”))

The International Accounting Standards Board (IASB) and the U.S. Financial
Accounting Standards Board (FASB) collaborated on a project to develop asingle, comprehensive revenue recognition model and jointly issued new revenue
recognition standards “Revenue from Contracts with Customers” (IFRS 15
published by IASB and Topic 606 published by FASB) in May 2014. IFRS 15 iseffective for annual reporting periods beginning on and after 1 January 2018 andTopic 606 is effective for annual reporting periods beginning after December 15,
2017.
The Accounting Standard Board of Japan (ASBJ) also developed a new revenue
recognition standard and issued Statement No. 29 together with Guidance No.
30. ASBJ’s basic policy in developing the new revenue recognition standard
was to first incorporate the core principle of IFRS 15 in the light of improving
the international comparability of financial statements and then add additional
alternative treatments to the extent that international comparability would not besignificantly impaired in circumstances in which business practices in Japan need
to be considered.

Revenue recognition for freight charges

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

Income taxes

Income taxes are accounted for by the asset-liability method. Deferred tax
assets and liabilities are recognized for the future tax consequences attributable
to differences between the carrying amounts of existing assets and liabilities andtheir respective tax bases and operating loss carryforwards. Deferred tax assets andliabilities are measured using the enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled.

Effective dateEnterprise taxes

Effective from the beginning of the fiscal year ending March 31, 2022

The Seino Group records local corporate enterprise taxes based on the“added value” and “capital” amounts when levied as size-based corporate taxes
for local government enterprise taxes, which are included in selling, general andadministrative expenses.
Cash dividends are recorded in the fiscal year during which a proposed
appropriation of retained earnings is approved by the Board of Directors and/or
shareholders.

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

Overview

Provision for directors' stock payments has been provided for stock award debt
based on regulations for awarding stock, which is prepared for future awards of thecompany shares to its directors, excluding outside directors.

Appropriation of retained earnings

Translation of foreign currency accounts

Effects of application

The Company and its consolidated domestic subsidiaries are in the processof determining the effects of these new standards on the consolidated financial
statements.

(u)

Additional information(i)

Abolition of severance indemnity plans for directors and corporate
auditors and termination payments
The Board of Directors meeting held on May 11, 2018, made a determination
to abolish the severance indemnity plans for directors and corporate auditors

15

Annual Report 2019at the end of the Company’s 97th Annual General Meeting of Shareholders
on June 27, 2018. The Company’s 97th Annual General Meeting of
Shareholders on June 27, 2018 approved this determination. As a result,
The Company’s “Accrued severance indemnities for directors and corporate
auditors” of ¥131 million ($1,180 thousand) have been included in “Other
long-term liabilities.” In addition, certain subsidiaries provide for accrued
severance indemnities for directors and corporate auditors at the amount thatwould have been payable if the directors and corporate auditors had retired at
the end of the fiscal year based on internal rules.
(ii) Employee Shareholding Incentive Plan (E-Ship®)
The Company has introduced an Employee Shareholding Incentive Plan
(E-Ship®) for the welfare of its employees. The plan is an incentive plan thatcovers all employees participating in the Shareholding Association.
Under the plan, the Company, as the trustor, entered into a specified trust
cash funding agreement (the “E-Ship Agreement”) with a trust bank astrustee to set up the trust (the “E-Ship Trust”). The E-Ship Trust purchases
the number of shares of the Company that the Shareholding Association
expects to purchase over the next three years and subsequently sells them
periodically to the Shareholding Association in accordance with certain
conditions and methods stipulated in the E-Ship Agreement over the threeyear period. At the end of the trust period, the E-Ship Trust’s retained
earnings, the accumulation of net gain on sales of its shares, are distributed
to the eligible employees in accordance with the E-Ship Agreement. For its
part, the Company guarantees any retained loss, the accumulation of net loss
on sales of its shares, and will pay off the amount of outstanding debt at theend of the trust period as it guarantees the debt of E-Ship Trust.
The shares of the Company held by the E-Ship Trust are accounted for astreasury stock under net assets. The assets, liabilities, income and expensesof the E-Ship Trust were consolidated in the accompanying consolidated
financial statements. The book value and number of shares held by the
E-Ship Trust at March 31, 2019 and 2018 were ¥607 million ($5,468
thousand) and 455 thousand shares and ¥963 million and 723 thousand
shares, respectively. The book value of bank loans of the E-Ship Trust
recorded in the consolidated balance sheet as of March 31, 2019 and 2018
were ¥384 million ($3,459 thousand) and ¥867 million, respectively.
(iii) Stock Compensation for Directors
The Company has introduced a Board Benefit Trust (“BBT”) for theCompany’s directors, excluding outside directors, (the “Eligible Directors”).
The objective of the plan is to focus the Eligible Directors’ mindset towards
enhancing the medium- to long-term corporate value of the Company
by clarifying the link between the compensation of the Eligible Directors
and the Company’s share value so that Eligible Directors share with theshareholders not only the benefits of rising share prices, but also the risks
associated with falling shares. The Plan is a stock compensation plan whereby
the Company’s shares are acquired through a trust (the trust set up based on
the Plan is hereinafter referred to as the “Trust”) using funds contributed by
the Company as capital, and the acquired shares and money in the amountequivalent to the value of the Company’s shares converted at market value(the “Company’s Shares, Etc.”) are granted to Eligible Directors through theTrust according to their positions or the like, pursuant to the predetermined
Rules on Stock Benefits for Directors. In principle, the Company’s Shares,
Etc. are provided to Eligible Directors at the time of retirement from a
position of Eligible Director of the Company.
The shares of the Company held by the Trust were accounted for as treasury
stock under net assets. The assets, liabilities, income and expenses of the Trust
were consolidated in the accompanying consolidated financial statements.
The book value and number of shares held by the Trust at March 31, 2019were ¥181 million ($1,631 thousand) and 91 thousand shares.

3. Financial Instruments(a) Qualitative information on financial instruments(i)
Policies on financial instruments

The Seino Group has implemented a Cash Management System for effective
investments and funding. Pursuant to this system, the Company invests in shortterm, low-risk instruments in accordance with its internal fund management rules.
The Company procures funds mainly through indirect financing such as bankloans for investments in facilities, taking immediate liquidity into consideration.

(ii)

16

Details of financial instruments and Risks

Trade receivables are exposed to the credit risk of customers. Some of thesubsidiaries have receivables in foreign currency and are exposed to foreign
currency fluctuation risk.
Marketable and investment securities, which consist of held-to-maturity
securities and equity securities of business entities with which the Seino Grouphas business relationships, are exposed to stock market fluctuation risk.
Trade payables have general terms and conditions and are mostly due within
one year. However, some of the subsidiaries have trade payables denominated inforeign currency, which exposes them to foreign currency fluctuation risk.
Some bank loans and convertible bonds are used principally for capital
investments and are partially exposed to interest rate fluctuation risk.

(iii)

Risk Management for Financial Instruments
Monitoring of credit risk

In accordance with internal policies for credit risk management, eachsubsidiary monitors the creditworthiness of its customers and manages the terms
and conditions of payment, due dates and remaining balances to reduce credit
risk. With held-to-maturity securities, the Company invests in bonds that havebeen highly rated by credit rating agencies in accordance with its internal fundmanagement rules. As a result, the risk is insignificant.

Monitoring market risk

The Board of the Directors regularly monitors market risk using management
methods which comply with internal market risk management rules. For
marketable securities, the Seino Group monitors market prices every quarterand reviews the market conditions and the financial position of and business
relationship with the issuers.

Monitoring liquidity risk

The Company has a Cash Management System with its subsidiaries andbecomes the paying agent for the subsidiaries under the system. The subsidiaries
report their cash flow projections to the Company. The Company has sufficientbank credit lines, including credit lines with overdraft facilities, enabling the Seino
Group to manage liquidity risk.

(iv)

Supplemental information on fair values

The fair values of financial instruments are based on their market prices. The
fair values of financial instruments with no available market prices are determinedby using prices calculated with alternative methods. However, since certain
assumptions are used in the computation of these estimates, the results may bedifferent if alternative assumptions are used.

(b) Fair values of financial instruments

The fair and carrying values of the financial instruments included in the
consolidated balance sheets at March 31, 2019 and 2018, other than those forwhich the fair value was extremely difficult to determine, are set forth in the tablebelow.

At March 31, 2019:
Cash and cash equivalents
Short-term investments
Trade receivables
Investment securities
			Total assets

Carrying value

Fair value
Millions of yen¥

98,462
13,536
120,895
34,444
267,337¥

5,470
54,414—¥¥

Short-term borrowings¥
Trade payables
Convertible bonds
Current portion of long-termbank loans
Long-term bank loans
			Total liabilities¥

At March 31, 2018:
Cash and cash equivalents
Short-term investments
Trade receivables
Investment securities
			Total assets

1,391
10,371
71,646¥¥

98,462
13,536
120,895
34,444
267,337

¥—
—
—
—
¥—

5,470
54,414
—

¥—
—
—

1,391
10,263
71,538

—
(108)
(108)

Carrying value

Fair value
Millions of yen¥

80,21423,983
119,774
34,570258,541¥

3,610
51,620
5,883¥¥

Short-term borrowings¥
Trade payables
Convertible bonds
Current portion of long-termbank loans
Long-term bank loans¥
			Total liabilities

1,086
10,80773,006¥¥

Difference¥

Difference

80,21423,983
119,774
34,570258,541

¥—
—
—
—
¥—

3,610
51,620
7,906

¥—
—
2,023

1,086
10,70574,927

—
(102)
1,921

¥

At March 31, 2019:
Cash and cash equivalents
Short-term investments
Trade receivables
Investment securities
			Total assets

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

887,045
121,946
1,089,144
310,306$ 2,408,441

Short-term borrowings$
Trade payables
Convertible bonds
Current portion of long-termbank loans
Long-term bank loans$
			Total liabilities

49,279490,216—
12,53293,432645,459$

887,045
121,946
1,089,144
310,306$ 2,408,441

$—
—
—
—
$—

$

49,279490,216—$———

12,532
92,459644,486

—
(973)
(973)

$

$

Notes:(1) Methods used to determine the fair value of financial instruments are as
follows:
Assets:Cash and cash equivalents
As these instruments are settled within a short term, their fair value
and carrying value are nearly identical, and their carrying values are
assumed as their fair values.
Trade receivables
The fair value of installment sales receivables is measured by the
carrying amount, which is based on the present value of future cash
flows through maturity discounted using an estimated credit risk
adjusted interest rate. The carrying amounts of trade receivables otherthan installment sale receivables approximate fair value because of theshort maturity of these instruments.
Short-term investments and investment securities
The fair value of marketable securities equals the quoted market price,
if available. The fair value of debt securities equals the quoted market
price or the price provided by financial institutions. Marketable andinvestment securities classified according to the purpose for which
they are held are described in Note 5.
Liabilities:
Trade payables
As these instruments are settled within a short term, their fair values
and carrying values are nearly identical, and their carrying values are
assumed as their fair values.
Short-term borrowings and current portion of long-term bank loans
As these instruments are settled within a short term, their fair values
and carrying values are nearly identical, and their carrying values are
assumed as their fair values.
Convertible bonds
The fair value of convertible bonds is based on the price quoted by thecorrespondent financial institution.
Long-term bank loans
The fair value of long-term debt is based on the present value of
future cash flows discounted using the current borrowing rate forsimilar debt of comparable maturity.
(2)	The following were not included in the table above because the fair value
was extremely difficult to determine:
Millions of yen

Carrying value:
Unlisted equity securities, otherthan those of affiliates
Investments in partnerships

2019
¥
¥

1,926
2,355
4,281

2018

¥
¥

12,078
1,583
13,661Thousands of
U.S. dollars
2019
$
$

17,352
21,216
38,568(3) The redemption schedule for financial assets with maturities at March 31,
2019 was as follows:

Due within
1 year
At March 31, 2019:
Cash and cash equivalents ¥Short-term investments
Trade receivables
Investment securities –bonds and other¥98,462
13,536
90,839Due after Due after
1 year
5 years
throughthrough
5 years
10 yearsMillions of yen

Due
after
10 years¥——
29,304¥——
1—
202,837

¥—
—
751

111
¥

—

29,415

¥

751

—
¥

1

Due after Due after
1 year
5 years
Due within
throughthrough
1 year
5 years
10 yearsThousands of U.S. dollars

Due
after
10 years$——
264,000$——
9

At March 31, 2019:
Cash and cash equivalents $887,045
Short-term investments
121,946
Trade receivables
818,369
Investment securities –—bonds and other$ 1,827,360

$—
—
6,766

1,000

—

$ 265,000

$

6,766

—
$

9

(4) For the repayment schedule for long-term bank loans at March 31, 2019, seeNote 9, “Short-term Borrowings and Long-term Debt.”

4. Inventories
Inventories at March 31, 2019 and 2018 were as follows:
Millions of yen

Merchandise and finished products
Work in process
Raw materials and supplies

2019
11,485831
852¥ 13,168¥2018
12,8961,214
779¥ 14,889¥

Thousands of
U.S. dollars
2019$ 103,468
7,487
7,676
$ 118,631

5. Investments
At March 31, 2019 and 2018, short-term investments consisted of thefollowing:

Marketable securities:¥
Bonds and other		 Total marketable securities
Time deposits with an original maturityof more than three months¥

Millions of yen

Thousands of
U.S. dollars
2019

2,100
2,100

12,10012,100$11,88323,983103,027$ 121,946

2019

11,436
13,5362018¥¥

18,91918,919At March 31, 2019 and 2018, investment securities consisted of the following:
2018

Thousands of
U.S. dollars
201934,406101
63
34,57013,661
48,231$ 308,793
973
540
310,306$ 38,568
348,874

Millions of yen

Marketable securities:
Equity securities
Bonds
Other
		 Total marketable securities
Other non-marketable securities2019¥ 34,276
108
60
34,444¥
4,281
38,725¥¥Marketable securities classified as available-for-sale are stated at fair value withunrealized gains and losses excluded from current earnings and reported as a net
amount within the net assets account until realized. At March 31, 2019 and 2018,gross unrealized gains and losses for marketable securities classified as availablefor-sale were as follows:17Annual Report 2019

At March 31, 2019:
Equity securities
Bonds
Other
At March 31, 2018:
Equity securities
Bonds
Other
At March 31, 2019:
Equity securities
Bonds
Other

¥
¥
¥
¥

Cost

Gross
Gross
unrealized unrealized
gains
lossesMillions of yen

15,585
118
2,127
17,830¥ 18,824—
33¥ 18,857¥

12,934
118
12,12725,179¥21,523—36
21,559¥$ 169,586—
297$ 169,883$¥

Fair andcarrying
value(133) ¥ 34,276
(10)
108
—
2,160
(143) ¥ 36,544¥(51) ¥(17)—(68) ¥¥

Thousands of U.S. dollars$ 140,405
1,063
19,162$ 160,630

34,406101
12,163
46,670(1,198) $ 308,793
(90)
973
—
19,459(1,288) $ 329,225$

At March 31, 2019 and 2018 investments in and long-term loans to affiliates
consisted of the following:

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

Millions of yen

2018

Thousands of
U.S. dollars
2019

15,7363,255$ 141,766

2019¥

6. Property and Equipment
At March 31, 2019 and 2018, property and equipment consisted of thefollowing:
Millions of yen

Property and equipment, at cost:
Land
Buildings and structures
VehiclesMachinery and equipment
Construction in progress
Other
Less accumulated depreciation
Total property and equipment

2019

2018

Thousands of
U.S. dollars
2019¥ 176,941 ¥ 174,468 $ 1,594,063
281,227
271,7432,533,577
109,563
106,998
987,054
46,39043,685417,928
5,417
2,892
48,802
11,753
7,391
105,883
631,291
607,177
5,687,307(320,658)(311,856)(2,888,811)¥ 310,633 ¥ 295,321 $ 2,798,496

One of the consolidated subsidiaries elected to carry out a one-time revaluation
to restate the cost of land used for business operations at values reassessed on
March 31, 2002, reflecting adjustments for land shape and other factors based on
appraisal values issued by the Japanese National Tax Agency in accordance with
the Law Concerning Revaluation of Land. According to the law, the excess ofthe original book value over the reassessed value, net of the tax effect and minority
interest portions, is recorded in net assets as land revaluation decrement accountin the accompanying consolidated balance sheets. At March 31, 2019 and 2018,
the difference between the carrying values of land used for business operations
after revaluation over the current market values of the land at the fiscal year-end
amounted to ¥2,746 million ($27,739 thousand) and ¥1,834 million, respectively.

7. Real Estate for Rent
Some of the Company’s subsidiaries own land and facilities for rent at locations
where the business branches were closed or redeployed branches used to be. The
carrying values in the consolidated balance sheets, changes during the years ended
March 31, 2019 and 2018 and the fair values of the rental properties were as
follows:
Millions of yen

Carrying value at the beginning of year ¥Net changes during the year
Carrying value at the end of year
Fair value at the end of year *
¥

18

2019
2018
14,622 ¥ 14,096
(666)
526
13,956
14,622
18,583 ¥ 19,371

Thousands of
U.S. dollars
2019$ 131,730(6,000)125,730$ 167,414

Note: * Fair value was measured at the estimated value based principally on a real estateappraisal or property tax bases.
Profit and loss recorded for rental properties for the fiscal years ended March
31, 2019 and 2018 were as follows:
Millions of yen

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

2019
¥
1,651
329
1,322
¥

2018
¥
1,599
412
1,187

(435) ¥

602

Thousands of
U.S. dollars
2019$ 14,874
2,964
11,910$(3,919)8. Asset Retirement Obligations
Asset retirement obligations are based upon estimated future restoration
obligations pursuant to office rental agreements. The asset retirement obligations
are calculated based upon the useful life designated by law or the estimated officerental period and are discounted by the yield rate of government bonds.
Asset retirement obligations for the years ended March 31, 2019 and 2018
were as follows:
Millions of yen

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

2019
¥
2,963
—
55

¥

2018
¥
2,627
443
36

Thousands of
U.S. dollars
2019$ 26,694
—
496

46

47

414

(19)
20
3,065 ¥

(190)—
2,963 $

(171)
180
27,613

9. Short-term Borrowings and Long-term Debt
At March 31, 2019 and 2018, short-term borrowings consisted of thefollowing:

Unsecured bank overdrafts with interest
rates ranging from 0.154% to 1.475%¥
per annum at March 31, 2019
Short-term bank loans, secured with interest
rates ranging from 0.526% to 1.300% perannum at March 31, 2019
Short-term bank loans, unsecured withinterest rates ranging from 0.130% to6.300% per annum at March 31, 2019¥

Millions of yen

2018

Thousands of
U.S. dollars
2019

3,965

2,440

$

2019

¥

525
980
5,470

25

¥

1,145
3,610

35,720
4,730

$

8,829
49,279At March 31, 2019, the Company and certain subsidiaries had unsecured
overdraft agreements with 16 banks. Under the agreements, the Company and thesubsidiaries were entitled to withdraw up to ¥45,500 million ($409,910 thousand).
The Company and the subsidiaries were not obligated to pay commitment fees on
the unused portions of the overdraft facilities.
At March 31, 2019 and 2018, long-term debt consisted of the following:

2018

Thousands of
U.S. dollars
2019

5,883

$

—

10,6251,268
4,000
21,776(7,917)
13,859 $93,415
12,55073,360179,325(23,505)
155,820

Millions of yen

Zero coupon convertible bonds
due October 2018, including
unamortized premium
Loans from government agencies and banks,
repayable through 2024, with interest
rates ranging from 0.330% to 4.100% perannum at March 31, 2019:
SecuredUnsecured
Capitalized lease obligations
Less current portion

2019
¥

—

¥

10,3691,393
8,143
19,905(2,609)17,296¥

At March 31, 2019 and 2018, respectively, the following assets were pledged ascollateral for certain long-term debt:
Millions of yen

Thousands of
U.S. dollars
2019

5,175
1,442
1,246
1,133

$

2019
Land
Buildings and structures
Cash and deposits
Shares of subsidiaries and associates
Long-term loans receivable fromsubsidiaries and associates

¥

2018

¥

5,007
1,506
1,330
1,133

760

10

46,622
12,991
11,225
10,207
6,847

The aggregate annual maturities of long-term debt as of March 31, 2019 wereas follows:Year ending March 31,
2020
2021
2022
2023
2024
Thereafter

Millions of yen
2,609
2,109
1,928
8,546
854
3,859
¥
19,905¥

Thousands of U.S.
dollars$
23,50519,00017,36976,991
7,694
34,766$
179,325

Consolidated subsidiary Kanto Transportation Co., Ltd. had a commitmentline agreement of ¥2,000 million ($18,018 thousand) as of March 31, 2019 toensure its access to financing. The outstanding balance of borrowings under thisagreement was ¥500 million ($4,505 thousand) at March 31, 2019.

11. Financial Covenants
Consolidated subsidiary Kanto Transportation Co., Ltd. is a party to a
syndicated loan agreement and commitment line agreement that includes thefollowing financial covenants.
1. The operating loss on a consolidated basis of Kanto Transportation Co., Ltd.
before amortization of goodwill is allowed on the profit and loss statement for thetwo consecutive years as of the previous fiscal year at March 31, 2017 or later.
2. The amount of equity (except subscription rights to shares, noncontrollinginterests and deferred gains and losses on hedges) on the balance sheets on aconsolidated basis of Kanto Transportation Co., Ltd. is required to be equal to or
greater than 80% of equity on the balance sheet as of the previous fiscal year at
March 31, 2017 or later.
Remaining balances of debt were as follows:
Millions of yen

Short-term borrowings
Current portion of long-term debt
Long-term debt¥¥

Thousands of
U.S. dollars
2019
2018
2019
¥ 81,375 ¥ 79,920 $ 733,108
4,287
4,358
38,621
185
182
1,667
653
450
5,883
(2,999)(3,527)(27,018)(1,258)(94)(11,333)38
86
342¥ 82,281 ¥ 81,375 $ 741,270
Millions of yen

At the beginning of year
Service cost
Interest cost
Actuarial differences
Benefits paid
Past service cost
OthersAt the end of year(b) Movements in plan assets:

Thousands of
U.S. dollars
2019
2018
2019
¥
6,572 ¥
6,416 $ 59,207
329
242
2,964
2
2
18
(94)
(88)
(847)
¥ 6,809 ¥6,572 $ 61,342
Millions of yen

At the beginning of year
Actuarial differences
Contributions paid by the employer
Benefits paid
At the end of year(c) Reconciliation from retirement benefit obligation and plan assets to employee
retirement benefit asset or liability:

10. Commitment Line Agreement

2019
¥
500
800
9,100
¥ 10,400(a) Movements in retirement benefit obligation:

2018

—
725
9,900
10,625

Thousands of
U.S. dollars
2019
$
4,505
7,207
81,982$ 93,694

12. Employee Retirement Benefits
The Company and its subsidiaries have mainly unfunded defined benefit
plans with rules and regulations determined by the Company and each subsidiary.
In addition, some subsidiaries have Smaller Enterprise Retirement Allowance
Mutual Aid or Specific Retirement Allowance Mutual Aid.
Other subsidiaries have funded defined benefit plans. One company belongs to
a comprehensive employee pension fund for the defined benefit corporate pension
plan. One company has established a retirement benefit payment trust. Some of
the consolidated subsidiaries have joined a multi-employer welfare pension fundplan. Those for which it is impossible to calculate in a rational manner the amountof the pension assets which corresponds to the amount of the contributions
are accounted for in the same way as the defined contribution pension plan.
The retirement benefit obligation of certain subsidiaries was calculated using
the simplified method as permitted by the accounting standard for employee
retirement benefits.
As of and for the year ended March 31, 2019 and 2018, defined benefit plans,
including plans applying the simplified method were as follows:

2018

Thousands of
U.S. dollars
2019

74,803—74,803680,054(126)$ 679,928

Millions of yen

Funded retirement benefit obligation ¥Plan assets
Unfunded retirement benefit obligation
Net employee retirement benefit liability

2019

7,037 ¥
(6,809)228
75,24475,472

Employee retirement benefit liability
75,486(14)
Employee retirement benefit asset¥
Net employee retirement benefit liability ¥ 75,472

6,921 $ 63,396(6,572)(61,342)
349
2,054
74,454
677,874
74,803679,928(d) Net periodic retirement benefit expenses, including plans applying thesimplified method:
Millions of yen

2019
2018
Service cost
¥ 4,287 ¥4,358Interest cost
185
182
Amortization of actuarial differences
1,427
1,431
(59)
31
Amortization of past service cost
5,840 ¥
6,002
Net periodic retirement benefit expenses ¥Thousands of
U.S. dollars
2019$ 38,622
1,667
12,856(532)$ 52,613(e) Retirement benefit adjustment included in other comprehensive income, before
tax effects:
Thousands of
U.S. dollars
2019
2018
2019
¥ (1,200) ¥(124) $ (10,811)(1,102)(1,223)(9,928)¥ (2,302) ¥ (1,347) $ (20,739)
Millions of yen

Past service cost
Actual differences
Total balance(f ) Retirement benefit adjustment in accumulated other comprehensive income,before tax effects:
Millions of yen

Past service cost yet to be recognized ¥Actuarial differences yet to be recognized
Total balance¥

2019(1,052) ¥7,244
6,192 ¥

2018

148
8,347
8,495

Thousands of
U.S. dollars
2019

$
$

(9,477)65,26155,78419

Annual Report 2019(g) Plan assets(i) Plan assets comprise:
2019
10%
1%
89%
100%

Cash and cash equivalents
Bonds
Equity securities
Total*

Percent

2018
11%
1%
88%
100%

*99% of total plan assets consisted of the assets of the retirement benefit
payment trust.
(ii) Long-term expected rate of return
Current and target asset allocations, historical and expected returns on
various categories of plan assets have been considered in determining thelong-term expected rate of return.
(h) Actuarial assumptions
The principal actuarial assumptions (expressed as weighted averages):
2019
0.1%
0.0%

Discount rate (mainly)
Long-term expected rate of return

2018
0.1%
0.0%

13. Contingent Liabilities
At March 31, 2019 and 2018, the Seino Group was contingently liable fortrade notes and discount notes endorsed to affiliates and third parties and forguarantees, including substantial guarantees, principally of indebtedness of third
parties in the aggregate amount of ¥1,261 million ($11,360 thousand) and ¥1,302
million, respectively.

14. Lease Commitments
As lessee, the Seino Group has entered into various rental and lease agreements
for land and buildings to be used for truck terminals and warehouses thatare generally cancelable with a few months advance notice, except for certain
operating lease agreements. The aggregate minimum future lease payments forsuch noncancelable operating lease agreements, including the imputed interest
portion, as lessee at March 31, 2019 and 2018 were as follows:
Millions of yen

Operating leases:
Due within one year
Due after one year

2019
¥
¥

763
2,161
2,924

2018

¥
¥

791
1,238
2,029

Thousands of
U.S. dollars
2019
$

6,874
19,468$ 26,342

A certain subsidiary engaged in leasing operations as lessor enters into
various lease agreements with third parties principally for vehicles. The leases
are categorized as operating leases. At March 31, 2019 and 2018, the aggregate
future minimum lease commitments to be received for such non-cancelable leaseagreements, including the imputed interest, were as follows:
Millions of yen

Operating leases:
Due within one year
Due after one year

2019
¥
¥

206
398
604

2018

¥
¥

226
383
609

Thousands of
U.S. dollars
2019
$
$

1,856
3,585
5,441

15. Net Assets
Under the Japanese Corporate Law (the “Law”) and regulations, the entire
amount paid for new shares is required to be designated as common stock.
However, a company may, by a resolution of the Board of Directors, designate an
amount not exceeding one half of the price of the new shares as additional paid-in
capital, which is included in capital surplus.
Under the Law, in cases in which a dividend distribution of surplus is made,the smaller of an amount equal to 10% of the dividend or the excess, if any, of 25%of common stock over the total of additional paid-in capital and legal earnings
reserve must be set aside as additional paid-in capital or legal earnings reserve.
Legal earnings reserve is included in retained earnings in the accompanying
consolidated balance sheets.

20

Under the Law, legal earnings reserve and additional paid-in capital could be
used to eliminate or reduce a deficit by a resolution of the shareholders' meeting.
Additional paid-in capital and legal earnings reserve may not be distributed as
dividends. All additional paid-in capital and all legal earnings reserve may betransferred to other capital surplus and retained earnings, respectively, which arepotentially available for dividends.
At March 31, 2019 and 2018, capital surplus consisted principally of additional
paid-in capital. In addition, retained earnings included legal earnings reserve of
the Company in the amount of ¥4,262 million ($38,396 thousand) at March 31,
2019 and 2018.
The maximum amount that the Company can distribute as dividends is
calculated based on the non-consolidated financial statements of the Company inaccordance with Japanese laws and regulations.
During the year ended March 31, 2019, the Company paid interim dividendsof ¥11 per share, amounting to ¥2,249 million ($20,261 thousand). In addition, at
the annual shareholders’ meeting held on June 27, 2019, the shareholders approved
cash dividends of ¥21 per share, amounting to ¥4,293 million ($38,676 thousand).
The appropriation had not been accrued in the consolidated financial statements
as of March 31, 2019 as such appropriations are recognized in the period in which
they are approved by the shareholders.

16 Consolidated Statements of Cash Flows
During the year ended March 31, 2019 and 2018, stock subscription rights
were exercised, and the related convertible bonds were converted to common stock
without any cash settlement. Details of the movement resulting from the exerciseof the stock subscription rights are as follows:
Millions of yen

Thousands of
U.S. dollars
2019

1,619
4,232
5,851

$

2019
Gain on disposal of treasury stock
Decrease in treasury stock
Decrease in convertible bonds

¥

2018

¥

1,168
2,954
4,122

14,58638,12652,712

17. Income Taxes
The tax effects of temporary differences that give rise to a significant portion ofdeferred tax assets and liabilities at March 31, 2019 and 2018 were as follows:
Millions of yen

Thousands of
U.S. dollars
2019

2019
2018
Deferred tax assets:
Employee retirement benefit liability ¥ 26,286 ¥ 26,085 $Enterprise tax accruals
743
619
Accrued bonuses
4,178
3,910
Intercompany capital gains
1,203
1,179
Operating loss carryforwards
566
447
Loss on assets transferred
1,437
1,412
Impairment loss on fixed assets
13,50813,404
Allowance for doubtful accounts
192
206
3,474
3,132
Other
51,58750,394(15,503)(15,364)
Less valuation allowance
36,08435,030
Deferred tax liabilities:
Deferred capital gains
5,032
5,127
Unrealized gains on available-forsale securities
5,408
6,225
Valuation adjustments for consolidation
11,523
11,716
Employee retirement benefit asset
5
—
575
530
Other
22,543
23,598¥ 13,541 ¥ 11,432 $Net deferred tax assets

236,811
6,694
37,63910,838
5,099
12,946
121,694
1,730
31,297464,748(139,667)
325,081
45,333
48,721
103,81145
5,180
203,090
121,991

In assessing the realizability of deferred tax assets, management of the Seino
Group considers whether some portion or all of the deferred tax assets will not
be realized. The ultimate realization of deferred tax assets is dependent upon
the generation of the future taxable income during the periods in which those
temporary differences become deductible. At March 31, 2019 and 2018, avaluation allowance was provided to reduce deferred tax assets to the extent thatthe management believed that the amount of the deferred tax assets was notrealizable.

The reconciliation of the statutory tax rate and the effective tax rate for theyears ended March 31, 2019 and 2018 was as follows:

Japanese statutory tax rate
Increase (decrease) due to:Permanently nondeductible expenses
Tax exempt income
Local minimum taxes - per capita levy
Amortization of goodwill
Equity in net income of affiliates
Changes in valuation allowance
Different tax rates applied to the consolidated subsidiaries
Tax credit for salary growth
Other
Effective income tax rate

Percentage of pretax
income
2019
2018
29.9%
30.2%
0.4
(0.2)
2.1
1.4
(0.9)
0.3
4.2
(0.2)
0.0
37.0%

0.4
(0.2)
2.3
1.2
0.5
(1.4)
4.4
(2.5)
(0.4)
34.5%

18. Comprehensive Income
Amounts reclassified to net income (loss) in the current period that wererecognized in other comprehensive income in the current or previous periods andthe tax effects for each component of other comprehensive income for the years
ended March 31, 2019, 2018 and 2017 were as follows:
2019

Millions of yen
2018

2017

Thousands of
U.S. dollars
2019

Net unrealized gains on availablefor-sale securities:(Decrease) increase during the year ¥ (2,250) ¥ 4,795 ¥ 1,305 $ (20,270)
(450)
(292)
(34)
(4,054)
Reclassification adjustments
Subtotal, before tax(2,700)4,503
1,271(24,324)735(1,359)(324)
6,621
Tax effectSubtotal, net of tax(1,965)
3,144
947(17,703)
Foreign currency translation
adjustments:(Decrease) increase during the year
Reclassification adjustments
Subtotal, before tax
Tax effectSubtotal, net of tax

19. Business Combinations
For the year ended March 31, 2017
Stock-for-stock exchange agreements with the subsidiaries
On March 4, 2016, the Company entered into stock-for-stock exchange
agreements with a subsidiary, Toyota Home Gifu Co., Ltd., in order to increase
the Company’s equity share in the subsidiary to 100%. In accordance with thisagreement, on April 1, 2016 (the stock-for-stock exchange date), the Company
reissued 35,925 shares of treasury stock at various exchange rates representing acertain number of shares of the Company’s common stock (see below) for one
share of common stock to the respective minority shareholders of the subsidiary.
The acquisition cost of the acquired company was ¥41 million.
Details of the stock-for-stock exchange transactions with the subsidiary
included the following:

Toyota Home Gifu Co., Ltd.

Exchange rate representing the number of sharesof common stock of the Company for one share ofcommon stock of the subsidiary(shares)359.25The Company applied ASBJ Statement No. 21, “Accounting Standard forBusiness Combinations,” revised on September 13, 2013, and ASBJ GuidanceNo. 10, “Guidance on Accounting Standard for Business Combinations andAccounting Standard for Business Divestitures,” revised on September 13, 2013,
and treated them as business transactions under common control.

20. Subsequent Events
Share Repurchase
The Board of Directors of the Company resolved at its meeting held on August
9, 2019 matters concerning the Company’s repurchase of its common stock
pursuant to the provisions of the Articles of Incorporation as applied pursuant
to Article 459, Paragraph 1, Item 1 of the Business Corporation Law, as detailed
below.
Reason for share repurchase
To improve capital efficiency and implement flexible capital policies in
response to changes in the business environment
Class of shares to be repurchased
Common stock

(53)
—
(53)
—
(53)

24
—
24
—
24

(63)
—
(63)
—
(63)

(478)
—
(478)
—
(478)

Total number of shares that may be repurchased:
4,500,000 shares (maximum), 2.20% of issued shares excluding treasury stock
Aggregate repurchase price¥ 5,000 million ($45,045 thousand) (maximum)
Period of repurchase
August 13, 2019 to December 2, 2019

Retirement benefit adjustment:
Increase (decrease) during the year
Reclassification adjustments
Subtotal, before tax
Tax effectSubtotal, net of tax
Shares of other comprehensive incomeof affiliates accounted for using equity
method:Decrease during the year
Reclassification adjustments
Subtotal
Total other comprehensive income ¥

2019

2018

2017

Thousands of
U.S. dollars
2019

(120)
1,467
1,347
(459)
888

(1,826)
1,216
(610)
216
(394)

8,415
12,324
20,739(7,108)
13,631Millions of yen

934
1,368
2,302
(789)
1,513

(245)
(33)
(11)
(2)
(256)
(35)
(761) ¥ 4,021 ¥

(44)
(6)
(50)
440 $

(2,207)(99)(2,306)(6,856)21

Annual Report 201921. Segment Information(a)

General information about reportable segments

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

(b)
(c)

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

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

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

Information about reportable segment for the years ended March 31, 2019, 2018 and 2017 is summarized as follows:

For the year 2019:
Operating revenue:
		External customers
		 Intersegment sales and transfers
			Total operating revenue
Segment income (*2)
Segment assets (*3)
Depreciation
Amortization of goodwill
Investments in affiliates accounted
for using the equity method
Increase in tangible and intangible
fixed assets
For the year 2018:
Operating revenue:
		External customers
		 Intersegment sales and transfers
			Total operating revenue
Segment income (*2)
Segment assets (*3)
Depreciation
Amortization of goodwill
Investments in affiliates accounted
for using the equity method
Increase in tangible and intangible
fixed assets
For the year 2017:
Operating revenue:
		External customers
		 Intersegment sales and transfers
			Total operating revenue
Segment income (*2)
Segment assets (*3)
Depreciation
Amortization of goodwill
Investments in affiliates accounted
for using the equity method
Increase in tangible and intangible
fixed assets

For the year 2019:
Operating revenue:
		External customers
		 Intersegment sales and transfers
			Total operating revenue
Segment income (*2)
Segment assets (*3)
Depreciation
Amortization of goodwill
Investments in affiliates accounted
for using the equity method
Increase in tangible and intangible
fixed assets

22

Transportation
services

¥
¥
¥

¥
¥
¥

¥
¥
¥

Vehicle sales

Merchandise
sales

Real estateleasing services

Other (*4)

Total

Adjustments(*1)

Consolidated

462,459 ¥2,301
464,760
24,475 ¥102,234 ¥
11,247
113,481
4,851 ¥

33,518 ¥21,49155,009829 ¥Millions of yen
1,651 ¥
18,574 ¥—15,871
1,651
34,445
1,334 ¥
902 ¥

504,189 ¥
16,9501,273

119,982 ¥
1,761
1

15,672 ¥50—

13,752 ¥84—

49,637 ¥529
163

703,232 ¥
19,374
1,437

15,064

42

—

—

—

15,106(2)

15,10433,398

4,652

118

20

1,779

39,967(526)

39,441

443,168 ¥2,046
445,214
20,965 ¥467,226 ¥
15,654
1,150

103,342 ¥9,606
112,948
4,922 ¥
117,088 ¥
1,918
1

31,575 ¥20,62952,204810 ¥
15,590 ¥38—

1,599 ¥—
1,599
1,239 ¥
13,484 ¥62—

16,446 ¥12,717
29,163921 ¥
43,952 ¥446
14596,130 ¥44,998641,128
28,857 ¥657,340 ¥18,1181,165— ¥(44,998)(44,998)(978) ¥
(28,612) ¥(343)—

596,130—
596,130
27,879628,728
17,775
1,165

3,052

46

—

—

—

3,098

(3)

3,095

20,152

2,930

92

458

1,444

25,076(373)

24,703422,870 ¥
1,975
424,845
20,020 ¥447,153 ¥
14,993
1,109

100,237 ¥
8,665
108,902
5,055 ¥
110,482 ¥
1,861—

27,749 ¥19,62147,370766 ¥
14,490 ¥42—

1,543 ¥—
1,543
1,279 ¥
13,153 ¥54—

15,140 ¥10,09325,233728 ¥
41,506 ¥363—

567,539 ¥
40,354
607,893
27,848 ¥626,784 ¥
17,313
1,109— ¥(40,354)(40,354)(731) ¥
(32,520) ¥(336)—

567,539—
567,539
27,117594,264
16,977
1,109

3,962

—

—

—

—

3,962

(2)

3,960

14,304

Transportation
services

4,200
Vehicle sales

17

Merchandise
sales

257

Real estateleasing services

441
Other (*4)

618,436 ¥
50,910669,346
32,391 ¥— ¥(50,910)(50,910)(1,182) ¥618,436—
618,436
31,209(45,249) ¥(373)—

657,983
19,001
1,437

19,219
Total

Thousands of U.S. dollars
14,874 $ 167,333 $ 5,571,495 $—
142,982458,649
14,874
310,315
6,030,144
12,018 $
8,126 $ 291,811 $$ 4,166,297 $ 921,027 $
20,730101,324
4,187,027
1,022,351$ 220,495 $
43,703 $301,964 $
193,613495,577
7,469 $

$ 4,542,243 $ 1,080,919 $
152,703
15,865
11,4699141,189 $450—

123,892 $757—

447,180 $ 6,335,423 $
4,766
174,541
1,468
12,946(343)

Adjustments(*1)

18,876
Consolidated— $ 5,571,495(458,649)—(458,649)
5,571,495(10,649) $ 281,162(407,648) $ 5,927,775(3,361)
171,180—
12,946

135,712

378

—

—

—

136,090(18)

136,072

300,883

41,9101,063

180

16,027360,063(4,739)355,324

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

(d)Related Information(i)

Information about products and services
The Company has not disclosed information about products and services here because the Company has disclosed the same information above.
(ii) Information about geographic areas
Operating revenue
The Company has omitted the disclosure of operating revenue by geographic area because operating revenue to external customers in Japan accounts for more than 90% of
the amount of operating revenue reported in the consolidated statements of income.
Property and equipment
The Company has omitted the disclosure of property and equipment by geographic area because property and equipment in Japan account for more than 90% of theamount of property and equipment reported in the consolidated balance sheets.
(iii) Information about major customers
The Company has not disclosed information about major customers because no customer contributed 10% or more to operating revenue in the consolidated statements ofincome.
(iv) Information on impairment loss by reportable segments:
Impairment loss:
For the year 2019
For the year 2018
For the year 2017
Impairment loss:
For the year 2019

Transportation
services

Vehicle sales

Merchandise
sales

¥

869 ¥
100
19

302 ¥
22
202

$

7,829 $

2,721 $

Real estateleasing services

Millions of yen
— ¥
—
—

Other

Total

28 ¥
69
—

37 ¥
—
—

1,236
191
221

Thousands of U.S. dollars
— $
252 $

333 $

11,135(v) Information on goodwill by reportable segments:
For the year 2019:
Amortization of goodwill

Transportation
services¥

As of March 31, 2019:
Balance of goodwill
For the year 2018:
Amortization of goodwill¥

As of March 31, 2018:
Balance of goodwill
For the year 2017:
Amortization of goodwill¥

As of March 31, 2017:
Balance of goodwill
For the year 2019:
Amortization of goodwill
As of March 31, 2019:
Balance of goodwill

Merchandise
sales

1,273 ¥

1 ¥

13,762

3

1,150 ¥

Real estateleasing services

Millions of yen
— ¥

Other

Total

— ¥

163 ¥

1,437

—

—

865

14,630

1 ¥

— ¥

— ¥

14 ¥

1,165

13,953

3

—

—

125

14,081

1,109 ¥

— ¥

— ¥

— ¥

— ¥

1,109

14,695

4———

14,699Vehicle sales

Merchandise
sales

Real estateleasing services

Transportation
services$

Vehicle sales

11,469 $Thousands of U.S. dollars
9 $
— $
— $

123,982

27——

Vehicle sales

Merchandise
sales

Real estateleasing services

Other

Total

1,468 $

12,946

7,793

131,802(iv) Information on gain on negative goodwill by reportable segments:
Gain on negative goodwill:
For the year 2019
For the year 2018
For the year 2017
Gain on negative goodwill:
For the year 2019

Transportation
services

¥

— ¥
—
—

Transportation
services

$

— $

— ¥
—
—
Vehicle sales

Millions of yen— ¥——Merchandise
sales

Other

— ¥
—
—

Real estateleasing services

Thousands of U.S. dollars
— $
— $
— $

Total

88 ¥
63
—
Other

793 $

88
63
—
Total

793

23

Annual Report 2019

Report of Independent Auditors
Independent Auditor’s Report
To the Board of Directors of
SEINO HOLDINGS CO., LTD.:
We have audited the accompanying consolidated financial statements of SEINO HOLDINGS CO., LTD. (the “Company”) and its
subsidiaries, which comprise the consolidated balance sheets as at March 31, 2019 and 2018, and the consolidated statements of income,statements of comprehensive income, statements of changes in net assets and statements of cash flows for each of the years in the three-year
period ended March 31, 2019, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting
principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits inaccordance with auditing standards generally accepted in Japan. Those standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.
The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation andfair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, while
the objective of the financial statement audit is not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OpinionIn our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company and its
subsidiaries as at March 31, 2019 and 2018, and their financial performance and cash flows for each of the years in the three-year period ended
March 31, 2019, in conformity with accounting principles generally accepted in Japan.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect to the year ended March 31, 2019 are presented
solely for convenience. Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has
been made on the basis described in Note 1 of the Notes to Consolidated Financial Statements.

September 30, 2019
Nagoya, Japan

24

Seino GroupThe Seino Group consists of Seino Holdings Co., Ltd. and 81 consolidated subsidiaries and 22 affiliates. The Seino
Group operates in five business segments: transportation services, vehicle sales, merchandise sales, leasing for realestate services and other services. The business relationship in the Seino Group is as follows.

Clients
Collection and
Delivery

VehiclesSales and Repairs

Sales

Services

Real Estate
Leasing

Domestic Transportation

Vehicle Sales

Merchandise Sales

Leasing for Real Estate

Seino Transportation Co., Ltd.
*1
Hokkaido Seino Transportation Co., Ltd. *1
Tohoku Seino Transportation Co., Ltd. *1
Kobaun Co., Ltd.
*1
Kanto Seino Transportation Co., Ltd.
*1
Niko warehouse Co., Ltd.
*1
Seino Super Express Co., Ltd.
*1
Kanagawa Seino Transportation Co., Ltd. *1
Izu Seino Transportation Co., Ltd.
*1
Nohi Seino Transportation Co., Ltd.
*1
Tokai Seino Transportation Co., Ltd.
*1
Mie Seino Transportation Co., Ltd.
*1
Hinomaru Seino Transportation Co., Ltd. *1
Shikoku Seino Transportation Co., Ltd. *1
Kyushu Seino Transportation Co., Ltd. *1
Okinawa Seino Transportation Co., Ltd. *1
Seino Tsu-un Transportation Co., Ltd.
*1
Seino Express Co., Ltd.
*1
Seino Hikkoshi Co., Ltd.
*1
Seino Tokyo Express Co., Ltd.
*1
Seino Hokuriku Express Co., Ltd.
*1
Seino Nagoya Express Co., Ltd.
*1
Seino Osaka Express Co., Ltd.
*1
Seino ST Service Co., Ltd.
*1
S&N Logistics Co., Ltd.
*1
Toyo Co., Ltd.
*1
Katsunuma Transportation Co., Ltd.
*1
Darumaya Transportation Co., Ltd.
*1
Central Logistics Co., Ltd.
*1
Eco Alliance Co., Ltd.
*1
COCONET CO., LTD.
*1
GENie Co., Ltd.
*1
INTENTS Inc.
*1
ASAHI CONPOU CO., LTD.
*1
Kanto Transportation Co., Ltd.
*1
Osaka Kosoku Nyuhai Corporation*1
KCS Co., Ltd.
*1
Izumikawa Transportation Co., Ltd.
*1TMR Kita Kanto,Inc.
*1
Showa Reizo Co., Ltd.
*1
Saitama Seino Transportation Co., Ltd. *2
Tokyo Seino Transportation Co., Ltd.
*2
Hankyu Hanshin Express Co., Ltd.
*2
Mikawa Seino Transportation Co., Ltd.
Ensyu Seino Transportation Co., Ltd.
Kumamoto Seino Transportation Co., Ltd.

Toyota Corolla Gifu Co., Ltd. *1
Gifu Hino Motor Co., Ltd. *1
Netz Toyota Gifu Co., Ltd. *1
Asahi Enterprise Co., Ltd. *1*1
Jms Gifu Co., Ltd.
Shiga Hino Motor Co., Ltd. *1
Seino Auto Service Kanto *1
Co., Ltd.
Seino Auto Lease Co., Ltd. *1*1
Tokyo Sharyou Co., Ltd.
*1
Unicla Jiko Co., Ltd.
*1
Subic GS Auto, Inc.
KILTON SEINO HOLDING Co., Ltd. *2
Toyota Gifu Parts Dsitributor Co., Ltd.

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

Seino Transportation Co., Ltd.
OthersMarchandise
sales

Information Services

VehicleSales

Seino Information
Service Co., Ltd.

*1

Japan Logistics
Development Co.,
Ltd.

*1

International Transportation
Seino Logix Co., Ltd.

Others*1

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

*1

Seino Saha Logistics Co., Ltd. *1

PT Seino Indomobil Logistics Services *1
Schenker-Seino Co., Ltd.
Entsu Logistics Co., Ltd.

*2
*2

PT Seino Indomobil Logistics *2

SIRACHA TRANSPORT CO., LTD.
Tango Seino Transportation Co., Ltd.
Box Charter Co., Ltd.
Cosmo Hokuriku Haiso Center Co., Ltd.
Gifu Truck Kogyo Co., Ltd.
Aishin Sangyo Co., Ltd.
Ogaki School Lunch Support Co., Ltd.
LOCCO Co., Ltd.

Transportation
Services

Leasing forReal Estate Services

Asahi Agency Co., Ltd. (Advertising agency)*1
Suito Travel Co., Ltd. (Passenger transportation, Travel agency) *1
Seino Engineering Co., Ltd. (Construction)*1
Seino Family Co., Ltd. (Insurance agency service)*1
Seino Staff Service Co., Ltd. (Personnel service)*1
Toyota Home Gifu Co., Ltd. (Housing sales)*1Asahi Create Co., Ltd. (Comprehensive printer)*1
Seino Business Support Co., Ltd. (Business support services) *1
Seino Ecotrading Inc. (Wholesale of recycled resources)*1
Nihon Oroshiuri Shiire Network Co., Ltd. (Collection agency) *1
Seino Financial Co., Ltd. (Settlement service representative) *1
Shin-ota Taxi Co., Ltd.
*1
Kani Taxi Co., Ltd.
*1
Tajimi Taxi Co., Ltd.
*1
Shorei Fit Co., Ltd.
*1
Seino Maintech Co., Ltd.
*1SHSF Co., Ltd.
*1VECTORONE Inc.
*1
Seino Driving School Co., Ltd.
*1
Toyota Rent-A-Lease Gifu Co., Ltd. (Rental and lease)
Gifu Automotive Dealer Plaza Co., Ltd. (Rental office)Eparksweets Inc.

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

81
7
15

25