Summary of Consolidated Financial Results for the Third Quarter Ending of the Fiscal Year June 30, 2023 [Based on IFRS]
May 11, 2023
Company name: ZERO CO., LTD.
Stock code:
9028
URL: http://www.zero-group.co.jp/
Representative:
President & CEO
Inquiries:
Director and Manager of Group Strategies Headquarters
Scheduled Date of Submission of Quarterly Report:
May 12, 2023
Scheduled date to commence dividend payments:
Preparation of supplementary material on quarterly financial results:
No
Holding of quarterly financial results meeting:No

Stock Exchange Listing: Tokyo
Takeo Kitamura
Toshihiro Takahashi

TEL 044-520-0106(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the third quarter ending of the fiscal year June 30, 2023 (From July 1, 2022 to March 31, 2023)(1) Consolidated operating results (cumulative)(Percentages indicate year-on-year changes)
Sales revenue

Operating income

Profit before tax

Quarterly income

Profit attributable toequity shareholdersof the company
Millions%of yenMillions ofyen%Millions ofyen%Millionsof yen%Millions ofyen%

3Q FY2022/2023

101,052

32.1

3,752

29.1

3,751

27.4

2,504

31.6

2,500

3Q FY2021/2022

76,523

11.0

2,906

△30.9

2,943

△30.2

1,903

△34.3

1,906

Basic quarterly earnings per share

Total comprehensive
income of the quarter
Millionsof yen

%

31.2

2,594

29.3

△34.4

2,006

△40.8

Diluted quarterly earnings per share

Yen

Yen

3Q FY2022/2023

148.37148.353Q FY2021/2022

113.42113.24(2) Consolidated financial position
Total assets

Equity ratio attributable toequity shareholders of thecompany

Equity attributable to equity
shareholders of the company

Total capitalMillions of yen

Millions of yen

Millions of yen%

56,71532,60532,08056.6

3Q FY2022/2023
FY2021/2022

55,18930,61430,067(Note) In the third quarter of the fiscal year ending June 2023, the provisional accounting treatment for the business combination has been finalized.

54.5

2. Cash dividends
1st quarter-end

Annual dividends per share
3rd quarter-end

2nd quarter-end
Yen

Yen

Fiscal year-end

Yen

FY2021/2022

---

15.00

---

FY2022/2023

---

15.00

---

FY2022/2023(forecast)

Total
Yen

Yen

22.70

37.70

25.80

40.80

(Note) Amendment from the most recently announced dividend forecast: No
3. Forecast of consolidated financial results for the year ending June 30, 2023 (From July 1, 2022 to June 30, 2023)

Sales revenue

Full year

Operating income(Percentages indicate year-on-year changes)
Profit attributable toequity shareholders
Basic earnings per shareof the company

Profit before tax

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

119,000

11.2

4,300

9.9

4,300

8.9

2,750

8.4

163.31(Note) Revisions from the most recently released business forecast: No

Attached Documents – Table of Contents
1. Qualitative information on the quarterly financial results .................................................... 2(1) Explanation regarding the operating results .................................................................. 2(2) Explanation regarding financial position and cash flow ................................................. 4(3) Explanation on future forecast information, such as consolidated earnings forecast ..... 5
2. Summary of the quarterly consolidated financial statements and major notes .................... 6(1) Summary of the quarterly consolidated financial position .............................................. 6(2) Summary of the quarterly consolidated profit and loss statement ................................... 8(3) Summary of the quarterly consolidated comprehensive income statement ..................... 9(4) Summary of the quarterly consolidated statement of changes in equity.......................... 10(5) Summary of the quarterly consolidated statement of cash flows..................................... 11(6) Notes regarding summary of the quarterly consolidated financial statements ................ 13(Notes on going concern assumption) ............................................................................... 13(Segment information) ....................................................................................................... 13(Business Combination)..................................................................................................... 14―1―

1. Qualitative information on the quarterly financial results(1) Explanation regarding the operating results
Japan's economy during the consolidated cumulative period of the third quarter continued to recover moderately
as supply constraints in semiconductors and other areas and the impact of the COVID-19 Pandemic have eased,
despite the impact of high resource prices.
In the domestic automobile market, the total number of new vehicles sales increased to 109.9% (statistical data of
the Japan Automobile Manufacturers Association) as compared to the consolidated cumulative period of the samequarter from the previous year (hereinafter referred to as the same quarter from the previous year). The recovery
trend became clearer in the third quarter of the consolidated accounting period as some automobile manufacturers
expanded shipments to the domestic market from the beginning of the year 2023. The number of registered and sales
used vehicles decreased to 96.7% compared to the same quarter from the previous year, due to the reluctance to buy
as the used vehicle market rises.
Revenues increased in all segments, mainly due to the strong performance of the used vehicle export business to
Malaysia and an increase in the number of units for vehicle transportation contracts. Operating income increased inall segments due to higher utilization rates and other factors, despite the impact of higher unit fuel costs.
As a result, the business results of our group are as follows: sales of 101,052 million yen (132.1% compared tothe same quarter from the previous year) and operating profit of 3,752 million yen (129.1% compared to the samequarter from the previous year). Also, the profit before taxes was 3,751 million yen (127.4% compared to the samequarter from the previous year), and the profit of the quarter attributable to the equity shareholders of the company
was 2,500 million yen (131.2% compared to the same quarter from the previous year).
Number of units related to domestic distribution of automobiles
July of 2021 to March ofDomestic
2022
Number of new vehicles
sold
Domestic manufacturer*12,998,267(out of this, Nissan*1(338,889)
Motor)
Foreign manufacturer*2
182,716
Total of new vehicle sales
Number of registered andsales used cars
Registered vehicles
Light vehicles
Total number of used
vehicles registered andsales

July of 2022 to March of2023

Units: vehicles
Compared to theprevious year

3,307,458

110.3%(365,051)(107.7%)

189,243

103.6%

3,180,983

3,496,701

109.9%*3

2,728,305

2,611,620

95.7%

*4

2,183,346

2,138,112

97.9%

4,911,651

4,749,732

96.7%

July of 2021 to March of
2022

July of 2022 to March of2023

Compared to theprevious year*12,700,618

3,034,805

112.4%*5

981,045996,004

101.5%

ExportNew vehicles of domestic
manufacturers
Used vehicles (registeredvehicles)*1 Calculated from Japan Automobile Industry Association Statistics *2 Calculated from Japan Automobile Importers’
Association statistics *3 Calculated from Japan Automobile Dealers Association statistics*4 Calculated from Japan Mini Vehicles Association statistics. *5 Trial calculated from the number of export deleted
registered vehicles in the Japan Automobile Dealers Association statistics

Fuel retail price

Light oil

*6

145.1

148.9

Unit: Yen / L
Compared tothe previous
year
102.6 %

Regular petrol

*6

165.3

168.8

102.1 %

National average

July of 2021 to March of
2022

July of 2022 to March of2023*6 Calculated from statistics of Agency for Natural Resources and Energy (fuel used by our company for transport ismainly light oil)―2―

The segment business results are as follows.
(1) Domestic automotive related businesses
For vehicle transportation, which is the core business, the number of units for transportation contracts for new andused vehicles increased, which led to an increase in revenue. In addition, there was an increase in revenue of Zero Plus
IKEDA Co., Ltd., which became a consolidated subsidiary, and as a result, there was an overall increase in revenue inthe domestic automotive related business.
Segment profit was affected by increases in unit fuel prices and fuel surcharges for marine transportation due tosoaring crude oil prices and the rapid depreciation of the yen in terms of cost, but in terms of revenue, the introductionof the fuel surcharge system in September 2022 and the effects of higher utilization rates and other factors outweighed
the impact of higher fuel costs, resulting in an increase in segment profit.
As a result, the overall sales in the domestic automotive related businesses was 43,126 million yen (112.0%
compared to the same quarter from the previous year), and the segment profit was 3,597 million yen (111.0% comparedto the same quarter from the previous year).
In the vehicle transportation business, the Group continued to implement the "Digitalization", "Greening", and "Newnormal" policies outlined in our mid-term management plan through June 30, 2024.
In the area of "Digitalization", we have set up the Transportation Digitalization Promotion Office and are promoting
the construction of a system to realize systematic allocation of vehicles. We have also launched and are promoting a
new digitalization project in which drivers record the condition of vehicles entrusted by customers using tablets.
In the area of “Greening”, we have completed the development of transportation equipment with an increased
maximum loading capacity to cope with the increased weight of automobiles as they become more electrically powered,and we will sequentially introduce the equipment. In addition, with the rapid adoption of EVs, a new Sales Planning
Department have been established to study the establishment of an infrastructure that includes the implementation ofancillary services in EV vehicle transportation.
In response to the "New Normal", the direction of the Ministry of Health, Labour and Welfare's revision of the
Improvement Standards Notice has been set, we will reduce indirect time other than operation hours by promoting asystem of division of labor in cargo handling while maintaining the operation hours of crew members toward the "Year2024 Problems", and at the same time, we will promote new hiring of drivers and efficient operation of transportationequipment.
(2) Human resource businesses
In the pickup service business, revenue increased due to the acquisition of new contracts and an increase in MaaS
(Mobility as a Service) services for J:COM (JCOM Co., Ltd.). In the human resources business, revenue increased due
to an increase in the number of dispatched drivers and temp workers mainly in eastern Japan, and in the airport-related
business, revenue increased due to an increase in the number of dispatched personnel along with the recovery in thenumber of flights to and from Japan. Segment profit increased due to increased revenue in each business segment andcost reduction.
As a result, the sales revenue of the overall human resource business was 15,416 million yen (106.9% compared tothe same quarter from the previous year), and the segment profit was 600 million yen (136.4% compared to the samequarter from the previous year).
(3) General cargo business
Revenue in the port cargo handling business increased due to increased fuel cargo handling for biomass power plants,
and the revenue in the transport / warehousing business decreased due to letting go of unprofitable customers despite
starting up a third-party logistics business by leasing new warehouses. For segment profit, the transport / warehousingbusiness reported a decrease due to start-up expenses for the newly leased warehouses, but the port cargo handlingbusiness reported an increase due to increased fuel cargo handling for biomass power generation, increasing therevenue in the overall general cargo business as well.
As a result, the sales revenue of the overall general cargo business was 4,847 million yen (102.0% compared to thesame quarter from the previous year), and the segment profit was 887 million yen (115.6% compared to the samequarter from the previous year).
(4) Overseas Related Businesses
In the used vehicle export business, sales increased significantly due to an increase in the number of vehicles
exported to Malaysia, a major export destination, as a result of an increase in local demand, partly due to thedepreciation of the yen and the semiconductor shortage, while previous activities to improve customer satisfaction led
to an increase in market share. In the CKD business, revenue decreased due to a decrease in packaging volume during
the model changeover. In the vehicle transportation business in China, sales increased due to the recovery of theChinese automobile market.
―3―

Segment profit increased in the used vehicle export business and the vehicle transportation business in China due toincreased sales, and decreased in the CKD business due to decreased sales.
As a result of the above, the sales revenue of the overall overseas business was 37,661 million yen (199.9% comparedto the same quarter from the previous year), and segment profit was 340 million yen (259.1% compared to the samequarter from the previous year).
Furthermore, the company expenses not included in the abovementioned report segment (expenses affiliated withour company’s management division), etc. are allocated as an item in the "adjustment amount" as indicated in "2.
(Segment information) in the summary of the quarterly consolidated financial statements and major notes", and totalled
1,674 million yen.
(2) Explanation regarding financial position and cash flow
(1) Status of assets, liabilities, and equity(Assets)
Current assets increased by 2,631 million yen (10.7%) compared to the end of the previous consolidated fiscal
year to 27,237 million yen.
This was mainly due to an increase in operating receivables and other receivables of 3,836 million yen.
Non-current assets decreased by 1,105 million yen (3.6%) compared to the end of the previous consolidated fiscal
year to 29,478 million yen.
This was mainly due to a decrease of tangible fixed assets of 1,142 million yen resulting from amortization ofassets of right to use, etc.
As a result, total assets increased by 1,525 million yen (2.8%) compared to the previous consolidated fiscal year
to 56,715 million yen.
(Liabilities)
Current liabilities increased by 728 million yen (3.9%) compared to the end of the previous consolidated fiscal
year to 19,359 million yen.
This was mainly because borrowings increased by 679 million yen.
Non-current liabilities decreased by 1,193 million yen (20.1%) compared to the end of the previous consolidated
fiscal year to 4,749 million yen.
This was mainly due to a decrease of 1,200 million yen in lease liabilities.
As a result, total liabilities decreased by 465 million yen (1.9%) compared to the end of the previous consolidated
fiscal year to 24,109 million yen.
(Equity)
Total equity increased by 1,991 million yen (6.5%) compared to the end of the previous consolidated fiscal year
to 32,605 million yen.
This was mainly because retained earnings increased by 1,880 million yen.
(2) Cash flow status
Cash and cash equivalents (hereinafter referred to as “funds”) at the end of the consolidated accounting period of
the third quarter decreased by 438 million yen compared to the end of the previous consolidated accounting fiscal
year to 4,742 million yen.
Each cash flow status category during the consolidated cumulative period of the third quarter and their causes are
as follows.
(Cash flow from operating activities)
Funds obtained as a result of operating activities were 3,262 million yen (there was an income of 814 million yen
during the same period of the previous year).
The main cause of the increase in funds were 3,663 million yen for depreciation and amortization expenses which
are non-fund expenses and 2,504 million yen in quarterly income; the main cause of the decrease in funds was 3,435
million yen increase in trade receivables.
(Cash flow from investment activities)
Net cash used in investment activities was 1,279 million yen (expenditures of 1,527 million yen during the same
period of the previous year).
The main itemization breakdown for expenditures was 1,333 million yen for acquisition of tangible fixed assets
and investment property.

―4―

(Cash flow from financing activities)
Funds used as a result of financing activities was 2,366 million yen (expenditures of 96 million yen during thesame period of the previous year).
The main itemization breakdown for expenditures were 2,274 million yen lease liabilities payments and 625
million yen for dividends, while the main itemization breakdown for income was 556 million yen net increase forshort-term borrowings.
(3) Explanation on future forecast information, such as consolidated earnings
We have not made any amendments to the consolidated earnings forecast announced on February 9, 2023.

―5―

2. Summary of the consolidated financial statements and major notes(1) Summary of quarterly consolidated statement of financial position
End of the previous
consolidated accounting year
(June 30, 2022)(Units: Million yen)
Consolidated cumulative
period of this third quarter(from March 31, 2023)

Cash and cash equivalents

5,180

4,742

Trade and other receivables

15,877

19,713Inventories

2,603

2,001

Other financial assets

471

258

Other current assets

471

521

24,60527,237

Tangible fixed assets

21,19920,056

Goodwill and intangible assets

3,275

3,274

Investment properties

3,145

3,051

497

519

Other financial assets

1,646

1,839

Other non-current assets

427

389

Deferred tax assets

392

347

Total non-current assets

30,58429,478

Total assets

55,18956,715

AssetsCurrent assets

Total current assets
Non-current assets

Investment accounting processed with equity
method―6―

(Units: Million yen)

End of the previous
consolidated accounting year
(June 30, 2022)

Consolidated cumulative
period of this third quarter(from March 31, 2023)

Trade and other payable

8,433

8,316

Loans

4,003

4,683

Lease liabilities

2,666

2,863

Income taxes payable, etc.

996

715

Other current liabilities

2,530

2,781

18,631

19,359

3,851

2,650

Other financial liabilities

82

88

Retirement benefits liabilities

899

853

Other non-current liabilities

306

316

Deferred tax liabilities

804

840

Total non-current liabilities

5,943

4,749

Total liabilities

24,574

24,109

Capital

3,390

3,390

Capital surplus

3,458

3,451

Treasury stock

△667

△638

444

554

23,44025,32130,06732,080546

525

Total Equity

30,61432,605

Total liabilities and equity

55,18956,715

Liabilities and Equity
Liabilities
Current liabilities

Total current liabilities
Non-current liabilities
Lease liabilities

EquityOther components of funds
Retained earnings
Total equity attributable to the equity
shareholders of the company
Non-controlling interest―7―(2) Summary of quarterly consolidated profit and loss statement(Units: Million yen)
Consolidated cumulative
period for the previous third
quarter(July 1, 2021 to March 31,
2022)

Consolidated cumulative
period of this third quarter(July 1, 2022 to March 31,
2023)

Sales revenue

76,523101,052

Cost of sales△66,715△89,761

Gross Profit

9,808

11,291△6,963△7,700

Other income

147

204

Other expenses

△85

△42

2,906

3,752

Financial profit

65

42

Financial expenses

△28

△37

0

△5

2,943

3,751

△1,040△1,247

1,903

2,504

1,906

2,500

Non-controlling interest△2

4Profits of the quarter

1,903

2,504

Basic quarterly earnings per share (yen)113.42148.37

Diluted quarterly earnings per share (yen)113.24148.35

Selling, general and administrative expenses

Operating profit

Investment gain / loss through equity method
Profit before tax
Corporate income tax expenses
Profits of the quarter

Attribution of the profits of the quarter:
Equity shareholders of the company

Quarterly earnings per share―8―(3) Summary of the quarterly consolidated comprehensive income statement(Units: Million yen)
Consolidated cumulative
period for the previous third
quarter(July 1, 2021 to March 31,
2022)

Consolidated cumulative
period of this third quarter(July 1, 2022 to March 31,
2023)

1,903

2,504

△17

4

△37

131

△55

136

163

△72

△5

27

158

△45

103

90

2,006

2,594

1,951

2,616

54

△21

2,006

2,594

Profits of the quarter
Other comprehensive income
Items not transferring over to profit or loss:
Remeasurement of defined benefit system
Financial assets measured by fair value throughother comprehensive profits
Total of the items not transferring over to profit
or loss
Items which may be transferred over to profit orloss
Conversion difference of business activities
overseas
Other comprehensive income equity of affiliatedcompany accounted for by the equity method
Total of the items which may be transferred overto profit or loss
Other comprehensive income after tax deduction
Comprehensive income of the quarter

Attribution of the comprehensive income for thequarter:
Equity shareholders of the company
Non-controlling interest
Comprehensive income of the quarter―9―(4) Summary of the quarterly consolidated statement of changes in equity
Consolidated accounting period of the third quarter (from July 1, 2021 to March 31, 2022)(Units: Million yen)
Equity attributable to equity shareholders of the company
Other components of funds

Balance on July 1, 2021

CapitalCapitalsurplus

3,390

3,437

Total
FinancialequityNonassets
Conversio
attributabl
controllingmeasured Remeasure
TreasurynRetained e to theinterest
by fair
ment of Total otherstock
difference
earnings
equityvalue
defined componentof businessshareholde
through
benefit s of funds
activities
rs of theothersystemoverseascompany
comprehensive profits

△681

355

△31

-

Profits of the quarter
Other comprehensive
incomeComprehensive incomeof the quarter

-

-

-

Share-based paymenttransactions, etc.

25

Transfer from othercapital component to
Retained earnings
Changes in scope of
consolidation
Total transactions, etc.
with the owners
Balance on March 31, 2022

324

21,80928,28018

28,298

-

1,906

1,906

△2

1,903

45

57

103

54

2,006

101

△37

△17

45

101

△37

△17

45

1,906

1,951

-

△895

△895

△895

Dividends of the surplus
Acquisition of treasury
stock

Total
Equity

△0

-

△0

△0

13

-

39

39

-

-

△0

17

16

△16

-

-

457

457

-

25

13

-

△0

17

16

△912

△855

457

△398

3,390

3,462

△667

70

317

-

387

22,802

29,376529

29,906

Consolidated cumulative period of this third quarter (from July 1, 2022 to March 31, 2023)(Units: Million yen)
Equity attributable to equity shareholders of the company
Other components of funds

Balance on July 1, 2022

CapitalCapitalsurplus

3,390

3,458

Total
FinancialequityNonassetsattributabl
Conversio
controllingmeasured Remeasure
Treasury
Retained e to theninterest
by fair
ment of Total otherstock
difference
earnings
equityvalue
defined componentof businessshareholde
through
benefit s of funds
activities
rs of theothersystemoverseascompany
comprehensive profits

△667

155

288

-

Profits of the quarter
Other comprehensive
incomeComprehensive incomeof the quarter

-

-

-

△6

444

23,44030,067546

30,614

-

2,500

2,500

4

2,504

115

△25

90

△21

2,594

△20

131

4

115

△20

131

4

115

2,500

2,616

-

△625

△625

△625

21

21
-

Dividends of the surplus
Share-based paymenttransactions, etc.

Total
Equity28-

Transfer from othercapital component to
Retained earnings

△0

△4

△5

5

-

Total transactions, etc.
with the owners

-

△6

28

-

△0

△4

△5

△619

△603

-

△603

Balance on March 31, 2023

3,390

3,451

△638

135

419

-

554

25,321

32,080525

32,605―10―

(5) Summary of the quarterly consolidated statement of cash flows(Units: Million yen)
Consolidated cumulative
period for the previous third
quarter(From July 1, 2021
to March 31, 2022)

Consolidated cumulative
period of this third quarter(From July 1, 2022
to March 31, 2023)

Profits of the quarter

1,903

2,504

Depreciation and amortization costs

3,474

3,663

Interest income and dividend

△35

△42

Interest expense

28

31

Investment gain / loss through equity method

△0

5

1,040

1,247

Increase / decrease of trade receivables (△ is anincrease)△3,122△3,435

Increase / decrease of inventories (△ is an increase)△1,504

601

1,194

439

△7

△19

Other

△565

△278

Subtotal

2,405

4,717

35

42

△28

△31

△1,598△1,465814

3,262

Payment for acquisition of tangible fixed assets andinvestment properties△1,688△1,333

Proceed from sales of tangible fixed assets andinvestment properties

3

11

Payment for intangible assets

△51

△130

Proceeds from acquisition of investments in
subsidiaries resulting in change in scope of
consolidation

631

-

△422

173

△1,527△1,279Cash flow from operating activities

Corporate income tax expenses

Increase/ decrease of trade payables(△ is a decrease)
Increase / decrease in retirement benefits liabilities(△ is a decrease)

Interest and dividend received
Interest paid
Corporate income tax paid
Cash flow from operating activities

Cashflow from investment activities

Other
Cashflow from investment activities―11―(Units: Million yen)
Consolidated cumulative
period for the previous third
quarter(From July 1, 2021
to March 31, 2022)

Consolidated cumulative
period of this third quarter(From July 1, 2022
to March 31, 2023)

Net increase or decrease of short-term loans (△ is adecrease)

3,100

556

Repayment of long-term loans

△25

△22

△2,275△2,274△0-

Dividend paid

△895

△625

Cash flow from financing activities△96△2,366

130

△55

△678

△438

5,904

5,180

5,226

4,742

Cash flow from financing activities

Repayment of lease debts
Payment for acquisitioning of treasury stock

Effect of exchange rate changes on cash and cash
equivalents
Increase / decrease in of cash and cash equivalents(△ is a decrease)
Cash and cash equivalents at the beginning of theyear
Balance of cash and cash equivalents at the end of
the quarter―12―(6) Notes regarding summary of the quarterly consolidated financial statements(Notes on going concern assumption)
There are no applicable matters.
(Segment information)
The segment information of our group is as follows.
Consolidated accounting period of the third quarter (from July 1, 2021 to March 31, 2022)

Domestic
Human
Generalautomotive
resource
cargo
relatedbusinesses businesses
businesses

Overseas
RelatedBusiness

Total(Units: Million yen)
Total amounton theAdjustment
quarterly
amountconsolidated(note)
financialstatements

Sales revenue
Sales revenue fromexternal customers
Sales revenue between
segments

38,503

14,4284,750

18,841

76,523－76,523

66

833

88

－

988

△988

－

Total
38,56915,261
4,839
18,841
77,512
76,523△988
Segment profit (operating
3,241
440
767
131
4,580
2,906
△1,673
profit)(Note). The △1,673 million yen adjustment amount in the segment profits includes the total company cost △1,674
million yen and 0 million yen of transaction elimination between segments. The total company cost is an
expense related to the management divisions of our company not belonging to the reporting segment.
Consolidated cumulative period of this third quarter (from July 1, 2022 to March 31, 2023)
Domestic
Human
Generalautomotive
resource
cargo
relatedbusinesses businesses
businesses

Overseas
RelatedBusiness

Total(Units: Million yen)
Total amounton theAdjustment
quarterly
amountconsolidated(note)
financialstatements

Sales revenue
Sales revenue fromexternal customers
Sales revenue between
segments

43,126

15,416

4,847

37,661

101,052－

101,052

99

1,043

80

－

1,223

△1,223－

Total
43,225
16,4604,928
37,661
102,276
101,052△1,223
Segment profit (operating
3,597
600
887
340
5,426
3,752
△1,674
profit)(Note). The △1,674 million yen adjustment amount in the segment profits includes the total company cost △1,674
million yen. The total company cost is an expense related to the management divisions of our company notbelonging to the reporting segment.

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(Business Combination)
Consolidated accounting period of the third quarter (from July 1, 2021 to March 31, 2022)
On July 1, 2021, our group acquired a partial equity interest (40%) in Zero Scm Logistics (Beijing) Co., Ltd., a jointly
controlled company accounted for by the equity method, and made it a subsidiary.
(1) Outline of the Business Combination(1) Name and business of the acquired company
Name of the acquired company: Zero Scm Logistics (Beijing) Co., Ltd.
Business description: Vehicle transportation business in China(2) Acquisition date:July 1, 2021
(3) Percentage of voting equity interest acquired:
Percentage of voting rights held immediately prior to the acquisition date: 25%
Percentage of voting rights additionally acquired on the acquisition date: 40%
Percentage of voting rights after acquisition:
65%(4) Reasons for the business combination
Since its establishment on April 29, 2004, Zero Scm Logistics has been mainly engaged in the land transportationof finished vehicles in China for Japanese, European and American automobile manufacturers, including marine andrail transportation. In addition, related operations include customs clearance, storage, and PDI (Pre-Delivery
Inspection).
In China, which has become the world's largest automobile market, changes such as the evolution of CASE, MaaS,and carbon neutrality are on the horizon, and in order to follow these changes in a timely manner, our group aims to
speed up the decision-making process by making the company a consolidated subsidiary, and further expand its
business. Specifically, as the used vehicle market is expected to be developed in China, we will consider full-scale
entry into the used vehicle transportation market. Also, assuming that electric vehicles produced in China will be
imported to Japan in the future, the Zero Group will consider establishing an integrated domestic and overseas
transportation system (complete vehicle transportation in China → export customs clearance → marinetransportation → import customs clearance → complete vehicle transportation, PDI, installation, registration,delivery, etc. in Japan).
(5) Method of acquiring control of the acquired company:
Acquisition of equity interest in exchange for cash(2) Fair value of acquisition consideration, assets acquired and liabilities assumed as of the acquisition date
(Units: Million yen)
Fair value of acquisition consideration
Fair value on the acquisition date of the shares of the acquired company held
immediately prior to the acquisition date
Fair value of the acquired company shares additionally acquired on the acquisition
date
Fair value of assets acquired and liabilities assumed

326
521

Cash and cash equivalents

1,153

Trade and other receivables

409

Other current assets

161

Tangible fixed assets

306

Other non-current assets

7

Current liabilities

689

Non-current liabilities

41

Fair value (net amount) of assets acquired and liabilities assumed
Non-controlling interest (Note) 1

1,306
457

Gain on bargain purchase (Note) 2
1(Note) 1. Non-controlling interest is measured as the share of non-controlling shareholders with respect to the fairvalue of the distinguishable net assets of the acquired company.
(Note) 2. Gain on bargain purchase is included in "Other income" in the summary of the quarterly consolidated profit
and loss statement because net assets measured at fair value exceeded consideration paid.
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(3) Loss on step acquisition
As a result of remeasuring the equity interest in Zero Scm Logistics Co., Ltd., which was held by the Group
immediately prior to the date of acquisition of control, at fair value at the time of acquisition of control, a loss on step
acquisition of 0 million yen was recognized and recorded in "Other expenses" in the summary of quarterly consolidated
profit and loss statement.
(4) Acquisition-related expenses
Acquisition-related expenses for this business combination was 8 million yen and is included in "Selling, generaland administrative expenses" in the summary of quarterly consolidated profit and loss statement.
(5) Cash flow from acquisition(Units: Million yen)
Cash and cash equivalents used in the acquisition△521

Cash and cash equivalents held by the acquired company at the time of acquisition

1,153

Proceeds from acquisition of shares of subsidiaries resulting in change in scope of
consolidation

631(6) Impact of the business combination on the Group's performance
Sales revenue and loss of the acquired company after the acquisition date recognized in the summary of quarterly
consolidated profit and loss income statements for the reporting period amounted to 2,639 million yen and 4 million
yen, respectively.

Consolidated cumulative period of this third quarter (from July 1, 2022 to March 31, 2023)
The business combination with IKEDA Co., Ltd. (now Zero Plus IKEDA Co., Ltd.), which took place on May 31,
2022, was accounted for on a provisional basis in the previous consolidated fiscal year because the allocation of theacquisition consideration was not yet complete. However, the allocation of the acquisition consideration was completed
in the consolidated accounting period of this third quarter. The amount in the summary of the quarterly consolidated
financial statements related to the previous consolidated fiscal year have been adjusted to reflect the details of the
finalization of the provisional accounting process.

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