Financial Results for the Fiscal Year Ended June 30, 2016
August 10, 2016
Company name: ZERO CO., LTD.
Code No: 9028
Tokyo Stock Exchange (Second Section)(URL http://www.zero-group.co.jp/)
Representative:
Takeo Kitamura , President and COO
Tel: 044-520-0106
Contact for inquiries:
Toshihiro Takahashi, Corporate Officer
General Manager, Group strategy division
Date of Annual Shareholders’ Meeting:
September 28, 2016
Date to begin payment of dividend:
September 29, 2016
Date of financial report submission
September 29, 2016
Additional materials for the financial results for FY2015
None
Briefing session for the financial results for FY2015
Yes (to analysts)

1. Consolidated Financial Results for the Fiscal Year Ended June 30, 2016
(From July 1, 2015 to June 30, 2016)(1) Consolidated Results(Figures less than one million yen are rounded down.)

Percentages shown below are the rates of increase or decrease compared with the same period of the previous year.
Sales
Operating income
Ordinary income
Net income attributable toowners of parent company
Million yen
FY201577,829FY2014

77,247(Note)%

Million yen
0.8
14.2

Comprehensive income:

FY2015FY2014%

Million yen%

Million yen

%

5,271

43.9

5,650

49.8

3,358

78.8

3,662

28.3

3,772

28.4

1,878

24.4

2,786 million yen (32.0%)
2,111 million yen (31.8%)

Earnings per
share-basic

Earnings per share-diluted

Net income toshareholder’s equity
ratio

Ordinary income tototal assets ratio

Operating income on
sales

Yen

Yen

％

％

％

FY2015201.77

-

19.1

15.7

6.8

FY2014109.90

-

11.9

11.2

4.7

(Ref.) Equity in net income of affiliates: FY2015: 118 million yen

FY2014: 27 million yen(2）Consolidated Financial Position
Total assets

Net assets

Shareholders’ equity
ratio

Net assets per share

Million yen

Million yen％

Yen

FY201537,037

18,51150.0

1,115.63

FY201435,145

16,60547.2

971.51(Ref.)\4 Shareholders’ equity:

As ofJune 30, 2016: 18,511 million yen

As of June 30, 2015: 16,605 million yen(3) Consolidated Cash Flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash
equivalents at end of
periodMillion yen

Million yen

Million yen

Million yen

FY2015

5,050

-512

-2,4697,924

FY20142,003-1,016

-383

5,856

2. Dividends
Dividend per share(Recorddate)

At end of
1Q

At end of
2Q

At end of
3Q

Yen

Yen

Yen

Yen

Yen

-

8.00
13.00

-

19.50
37.40

27.50
50.40

-

15.00

-

37.70

52.70

FY2014FY2015
Forecast
for
FY2016

At end of
4Q

Annualtotal

Annualtotal
amount ofdividend
Million
yen
470
854

Dividend
payout ratio(Consolidated)

Dividend ratioof net assets(Consolidated)

%

%

25.0
25.0

3.0
4.8

25.0

3. Consolidated Forecasts for FY2016 (From July 1, 2016 to June 30, 2017)
Sales

Million%yen
Whole FY2016

80,000-Operating income

Profit before tax

Net income
attributable toowners of parent
company

MillionMillionMillion

%

yen
5,600

-

%

yen
5,600

-

%

yen
3,500

-

Net income per share-basicYen
210.94

Note: The Company has decided to voluntarily adopt International Financial Reporting Standards (IFRS) for use in consolidated
financial statements from FY2015. As such, the consolidated forecasts for FY2016 were prepared based on IFRS and thepercentage of change from the previous fiscal year is not shown.

*Remarks(1) ) Changes in important subsidiaries during period (Transfer of particular subsidiary which involves the change ofscope of consolidation): N/A(2) ) Changes in accounting policies, procedure or notation method for documenting consolidated financial statements①Changes in accordance with the revision of accounting standards and others: Yes②Changes other than above: N/A③Changes in accounting estimates: N/A④Restatement of corrections: N/A(3) ) Number of issued shares (common shares)①Number of issued shares (including treasury stock) at the end of each period:
FY2015: 17,560,242
FY2014: 17,560,242②Number of repurchased shares at the end of each period:
FY2015: 967,732
FY2014: 467,732③Average number of shares issued during the fiscal year
FY2015: 16,647,155
FY2014: 17,092,510

(Ref.) Unconsolidated Financial Results for the Fiscal Year Ended June 30, 2016
1. Unconsolidated Financial Results for the Fiscal Year Ended June 30, 2016 (From July 1, 2015 toJune 30, 2016)(1) Unconsolidated Results
Percentages shown below are the rates of increase or decrease compared with the same period of the previous year.
Sales
Operating income
Ordinary income
Net income
Million yen%

Million yen%

Million yen%

Million yen%

FY201555,567

2.4

4,318

81.2

4,573

76.2

2,882

86.4

FY201454,242

6.2

2,382

31.6

2,595

31.3

1,545

45.9

Shareholders’equity ratio%

Net assets per
share
yen

Earnings per share–basicEarnings per share-diluted

FY2015173.14 yen-

FY201490.45 yen-(2）Unconsolidated Financial Position
Total assets

Net assets

Million yen

Million yen

FY201531,63015,96550.5

962.22FY201429,76813,881

46.6

812.13(Ref.)

Shareholders’ equity:
As of June 30, 2016: 15,965 million yen

As of June 30, 2015: 13,881 million yen※Implementation status review procedure
This financial report is exempt from the review procedure based upon the Financial Instruments and Exchange Act. The
financial statements are under the review procedure at the time of disclosure of this report.
※Explanation regarding appropriate use of forecasts
Statements in this report relating to future matters such as earnings forecasts are based on the information presently.

Table of Contents of Attachments
1. Analysis of Business Performance and Financial Position(1) Analysis of Business Performance(2) Analysis of the Financial Condition(3) Basic Policy on Appropriation of Profits; Dividends in Current Fiscal Year and Next Fiscal Year
2. Status of the Business Group3. Management Policy(1) Basic Policy of the Company’s Management(2) Business Perspective(3) Management Benchmark(4) Activities(5) Challenges faced by the Company
4. Basic Views on Selection of Accounting Standards
5. Consolidated Financial Statements(1) Consolidated Balance Sheet(2) Consolidated Income Statement and Consolidated Comprehensive Income Statement(Consolidated Income Statement)(Consolidated Comprehensive Income Statement)(3) Consolidated Statement of Changes in Net Assets(4) Consolidated Cash Flow Statement(5) Notes to Consolidated Financial Statements(Note on Going Concern Assumption)(Significant Fundamental Matters for the Preparation of Consolidated Financial Matters)(Changes in the Accounting Policy)(Additional Information)(Segment Information)(Per Share Information)(Subsequent Events)

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1.

Analysis of Business Performance and Financial Position(1)

Analysis of Business Performance Business Performance for the Current Term
The nation’s economy in the current consolidated fiscal year showed continued improvements in corporate earnings andemployment situation even though somewhat affected by the deceleration in the economies of emerging nations. Personal
consumption also been performing steadily and showing a recovery trend that is proceeding at a gradual pace. On the other
hand, the labor shortage has become more acute, with the falling birth rate and aging population causing a drop in the labor
force population.
In the automobile industry, Japanese automakers sold 4,917,221 new vehicles in the domestic market from July 2015 to June
2016 (94.0% year-on-year). 6,739,186 used vehicles were registered in the domestic market (99.8% year-on-year) and
1,372,293 used vehicles were exported (94.2% year-on-year), showing a downward trend. (Source: the Japan Automobile
Manufacturers Association’s data, the Japan Automobile Dealers Association’s data, the Japan Light Motor Vehicle andMotorcycle Association’s data).
Under these circumstances, our Group promoted strategic sales activities matching the changes in the market environment ineach of its segments, created higher added-value services by strengthening the group synergy of its three businesses, andworked to strengthen cost reduction and other profit administration systems.
As a result of these measures, our group’s financial results for the current fiscal year to June 30, 2016 showed sales of 77,829
million yen (up 100.8% year-on-year) and operating income of 5,271 million yen (up 143.9% year-on-year), thus postingyear-on-year increases in both sales and operating income. Also, ordinary income rose to 5,650 million yen (up 149.8% yearon-year), and net income attributable to owners of parent jumped to 3,358 million yen (up 178.8% year-on-year).
Incidentally, pursuant to the change in accounting period of a number of our consolidated subsidiaries from March 31 (April
30 in the case of a number of our subsidiaries) to more appropriately disclose and manage our group’s performance, thefinancial results for the previous fiscal year for these consolidated subsidiaries reflect performance for a period of 15 months
from April 1, 2014 to June 30, 2015 (14 months from May 1, 2014 to June 30, 2015 in the case of a number of our
subsidiaries). As a result of this change in the accounting period, sales in the previous fiscal year increased by 1,893 million
yen, operating income by 44 million yen, ordinary income by 50 million yen, and net income by 32 million yen.
[No. of Motor Vehicles Related to Domestic Distribution]
Domestic Sales

July 2014-June 2015

July 2015-June 2016

(Unit: Units)
Year-on-year
Change (%)

New vehicles*1

5,233,716

4,917,221

94.0%

*1

(610,060)(542,043)(88.9%)*2

290,870

286,358

98.4%

Passenger cars

*3

3,701,837

3,737,186

101.0%

Mini-cars*4

3,052,618

3,002,000

98.3%

6,739,186
210,76299.8%*36,754,455
248,372

Domestic automakers(Nissan Motor Co. only)
Foreign automakers
Used cars

Total of used cars
De-registered vehicle

Export volume (in units)

July 2014-June 2015

July 2015-June 2016

84.9%
Year-on-year Change(%)

New vehicles
Domestic automakers*14,475,390

4,589,303

102.5%

Used passenger vehicles*5

1,457,422

1,372,293

94.2%*1: Calculated using the Japan Automobile Manufacturers Association’s statistics*2: Calculated using the Japan Automobile Importers Association’s statistics*3: Calculated using the Japan Automobile Dealers Association’s statistics*4: Calculated using the Japan Light Motor Vehicle and Motorcycle Association’s statistics*5: Calculated using the number of deregistered used cars for export listed in the Japan Automobile Dealers Association’s statistics-2-

(Unit: yen per liter)[Retail Prices of Fuels]

July 2014-June 2015

Year-on-year Change(%)

July 2015-June 2016

Light oil

*6

131

107

81.7%

Regular gasoline

*6

152

126

82.9%

*6 Calculated using the Resources and Energy Agency’s statistics (The fuel that our company uses for transportation services is mainly light oil.) Business Performance by Segment<Automobile-related Business>
Nissan Motor Company, our major customer, posted sales of 542,043 units (88.9% year-on-year; the Japan Automobile
Manufacturers Association’s data) of new vehicles in Japan, resulting in decreased revenue from transport and maintenance of
new Nissan cars and we actively pursued new transport services and used car export business. As a result of winning orders
from foreign automakers and reviewing fees, this segment’s sales rose to 59,782 million yen (up 100.6% year-on-year). We
continued to promote positive activities to improve the means of transportation and transport routes, while further enhancing
labor management which, coupled with the effect of lower crude oil prices on cutting the cost of fuel, resulted in the segment
income significantly improving to 6,175 million yen (up 151.3% year-on-year). Incidentally, the foregoing includes effect ofaccounting change from the change in the accounting period for certain consolidated subsidiaries, in the amount of sales of
888 million yen and segment profit of 9 million yen.
<Human Resources Business>
Companies seeking human resources are on the increase as the nation’s economy is on a recovery trend. However, companies’
HR utilization needs and job seekers’ employment needs are becoming more varied and sophisticated than ever before. The
issues we are faced from the fall in birthrate and aging population are diverse, necessitating the securing employment
opportunities for senior citizens on the one hand, while on the other hand raising the issue of a shortage in younger applicants.
With corporate clients being very demanding with regard to fees paid to contract worker and for consignment work, we
focused our efforts on making a strategic shift from major metropolitan areas with high labor costs toward regional areas andin cultivating new clients.
As a result, this segment’s sales rose to 13,627 million yen (up 110.5% year-on-year), and segment income was 500 million
yen (88.1% year on year).
<General Cargo Transportation Business>
The positive results of working towards obtaining orders from new clients in addition to receiving orders on a steady basis
from existing clients, and also taking measures to improve profitability through better operational efficiency and the like, arebeing seen in this segment. KANDAKO KAIRIKU UNSO CO., LTD., a ZERO subsidiary, continued firm performance on its
mainstay business of loading and unloading of coals, and KYUSO COMPANY LTD. has been working towards winning new
businesses and improving operational efficiency.
As a result of the above, this segment posted sales of 5,005 million yen (81.1% year-on-year) and segment income of 718
million yen (82.7% year-on-year). Incidentally, the foregoing includes effect of accounting change from the change in theaccounting period for certain consolidated subsidiaries, in the amount of sales of 1,004 million yen and segment profit of 35
million yen.
Incidentally, concerning unclassifiable group-wide expenses (expenses concerning the company’s administrative departments)
and the amortization of goodwill, etc., which are not included in the above profit and loss by segment, they are recognized as“Adjustments” items as listed in “Segment Information” in “5. “Consolidated Financial Statements” and amounted to 2,122
million yen.
 Forecast for the Next Fiscal Year
While there is some concern on the movements of economic conditions outside Japan, gradual recovery is expected tocontinue as a result of economic measures taken by the government. However, in the automobile industry, there is a nagging
concern of lower domestic demand caused by a decrease in the number of holders of driver’s license brought about by falling
population, as well as long-term ownership from increased durability. Also, in the transportation industry, severe businessenvironment is expected to continue due mainly to growing shortage of drivers from falling population, concern overmedium- and long-term rise in fuel prices, and the need to secure a higher level of safety and strengthen environmental
measures. Under these circumstances, our group will press forward with initiatives to reinforce the base for our domestic
vehicle transportation business by continuing efforts to promote sales activities, promote growth of ancillary businesses, and-3-

expand the automobile businesses in ASEAN countries in which market growth is expected. Based on this outlook, we haveissued forecasts listed below.
Incidentally, the Company made a decision to voluntarily apply IFRS to the consolidated financial statements in its securities
report from the fiscal year ending June 31, 2016 instead of the Japanese Generally Accepted Accounting Principles(“Japanese GAAP”). As a result, the forecasts for the fiscal year ending June 30, 2017 has been prepared based on IFRS.
(For Reference)

Forecasts for the fiscal year
ending June 30, 2017
(2)

Sales

Operating income

Ordinary income

Net income
attributable toowners of parent
company

80,000 million yen

5,600 million yen

5,600 million yen

3,500 million yen

Analysis of the Financial Condition
 Assets, Liabilities and Net Assets(Assets)
Compared to the end of the previous term, current assets increased by 1,774 million yen (10.5%) to 18,664 million yen. Thisis chiefly due to increase of cash and deposits by 2,015 million yen.
Compared to the end of the previous term, fixed assets increased by 117 million yen (0.6%) to 18,372 million yen. This ischiefly due to the increase in deferred tax assets by 186 million yen and the increase in lease assets of property, plant andequipment by 119 million yen.
As a result of the foregoing, compared to the end of the previous term, total assets increased by 1,891 million yen (5.4%) to
37,037 million yen.
(Liabilities)
Compared to the end of the previous term, current liabilities increased by 542 million yen (4.9%) to 11,649 million yen.
This is chiefly due to the fact that although current portion of long-term loans payable decreased by 165 million yen, income
taxes payable increased by 646 million yen.
Compared to the end of the previous term, long-term liabilities decreased by 556 million yen (7.5%) to 6,877 million yen.
This is chiefly due to the fact that long-term loans payable decreased by 1,055 million yen.
As a result of the foregoing, compared to the end of the previous term, liabilities decreased by 13 million yen (0.1%) to
18,526 million yen.
(Net Assets)
Compared to the end of the previous term, net assets increased by 1,905 million yen (11.5%) to 18,511 million yen. This ischiefly due to increase of retained earnings due to posting of net income attributable to owners of parent company by 2,887
million yen.
 Cash Flow Situation
At the end of the current term, cash and cash equivalents (hereinafter referred to as “Funds”) increased by 2,068 million yen
compared to the end of the previous term, to 7,924 million yen.
The respective cash flow situation in the current term and their causes are as follows:(Cash flow from operating activities)
Funds provided by operating activities were 5,050 million yen (152.1% increase from the previous term).

-4-Income was provided mainly by 5,576 million yen in income before income taxes, 990 million yen in depreciation, 347
million yen in amortization of goodwill,. Payments were made mainly as 1,584 million yen in income taxes paid, increaseof 130 million yen in notes and accounts receivable-trade, and decrease of 143 million yen in notes and accounts payabletrade.
(Cash flow from investment activities)
Funds used in investment activities were 512 million yen (1,016 million yen in the previous term).
Income was provided mainly by 60 million yen as proceeds from collection of loans receivable. Payments were mademainly as 422 million yen in payments for purchases of property, plant and equipment.
(Cash flow from financing activities)
Funds used in financing activities were 2,469 million yen (383 million yen in the previous term).
Payments were made mainly as 1,400 million yen for repayment of long-term loans payable, 471 million yen in payment oflease obligation repayments, 409 million yen in payments for purchase of treasury stock and 553 million yen in cash
dividends paid.
Change in the Group’s Cash-flow Related Indicators
FY2012FY2013

FY2014FY2015Equity ratio (%)

42.9

46.5

47.2

50.0

Equity ratio at market value basis (%)

18.7

37.1

40.1

58.6

Cash flow to interest bearing debt ratio(per annum)Interest coverage ratio (multiples)

2.0

1.5

2.0

1.1

25.7
29.1
26.7
76.3
Equity ratio: Shareholder’s equity / total assets
Equity ratio at market value basis: Market capitalization / total assets
Cash flow to interest bearing debt ratio: interest bearing debt / cash flow
Interest coverage ratio: cash flow / interest payment(Note 1) All of the foregoing are calculated on the consolidated basis financial figures.
(Note 2) Market capitalization is calculated based on the number of shares outstanding not including treasury stocks(Note 3) Cash flow uses operational cash flow.
(Note 4) Interest bearing debt covers all debts posted in the consolidated balance sheets for which interest is paid.

(3)

Basic Policy on Appropriation of Profits; Dividends in Current Fiscal Year and Next Fiscal YearOur Dividend policy is to return profits to shareholders while expanding the scope of businesses and strengthening our corporate
position at the same time taking into consideration retained earnings. In view of the foregoing, the following is planned to be thebasis of profits that can be appropriated.
Earnings per share on
consolidated net income
Annual dividend(Note)

40 yen or less

8 yen

More than 40 yen but 80
yen or lessMore than 80 yen

Earnings per share on
consolidated net income

Earnings per share on
consolidated net income

x 20%
x 25%
Provided, however, that special gains and losses not attributable to normal operating activities may be
excluded from the foregoing.

The following dividend payments are expected to be made pursuant to the appropriate policy set forth above.

Earnings per share on
consolidated net income

Dividend per share
Annual total

Second quarter
end

Fiscal year end

FY2015201.77 yen

50.40 yen

13.00 yen

37.40 yen

FY2016210.94 yen

52.70 yen

15.00 yen

37.70 yen

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2.

Status of the Business GroupAs of June 30, 2016, the Group comprises the Company, 14 subsidiaries and 6 affiliates and engages chiefly in automobilerelated, human resource and general cargo transportation businesses. As a result of the tender offer on the Company’s ordinary
shares, as of June 19, 2014, the Group became a member of a group headed by the parent company Tan Chong International
Limited Group. Tan Chong International Limited Group is engaged in chiefly in the manufacture, distribution and sales ofmotor vehicles, along with businesses in industry machinery, real estate, finance and other fields in Singapore, Hong Kong,
China, Thailand and other Asian countries. Tan Chong International Limited Group is listed on the Hong Kong Stock Exchange.
The status of the Group’s businesses are as follows.
By Business
Segment
Automobile-related

Company
ZERO CO., LTD, ZERO-TRANS CO., LTD., ZERO PLUS KYUSHU CO., LTD.,
AUTO CARRY CO., LTD., NISSAN SHIZUOKA WORKNET CO., LTD., WORLDWINDOWS CO., LTD., ZERO SCM LOGISTICS (BEIJING) CO., LTD., SHINWA
RIKUSOU INC., EIGHT ZERO CO., LTD., TC ZERO COMPANY PRIVATELIMTED and 3 other companies

Human ResourcesJAPAN RELIEF CO., LTD. and 4 other companies

General Cargo
Transportation

ZERO CO., LTD, KANDAKO KAIRIKU UNSO CO., LTD., KYUSO COMPANY
LIMITED, TOYO BUSSAN CO., LTD.

<Business Organization Chart>
The following business organization chart is a representation of the matters set forth above.

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3.

Management Policy(1)

Basic Policy of the Company’s Management
The Group’s business philosophy is “Quality”, which is to provide safe and high quality transportation services to customers
and to contribute to the development for an affluent society by creating services which exceed the expectation of the customers.
The base of its activities is to improve the quality of various services corresponding to customer needs.
In addition, in order to secure the position in the logistics industry, the Company commits to become a corporate group
continuously trusted by the public, customers and shareholders, which it intends to do by expanding existing businesses,
promoting entering into a new business domain by M&A, and adding corporate value through continuous growth anddevelopment.

(2)

Business Perspective
As vehicle transportation, the Group’s main business, fluctuates according to movements in the vehicle sales market, it isfacing severe circumstances under the present trend of declining sales. However, the Group commits to enhance its presence in
the industry and expand the market share by strengthening its sales power to provide higher quality service to customers.
Moreover, it is committed to transform to a solid corporate structure with stable profitability and continuous growth by
reducing transportation costs for enhancing transportation efficiency and minimizing indirect cost and fixed cost by
rationalization. The Group’s immediate objective to establish profit structure and business lines making it the foremost
company in the Japanese logistics industry, and its long-term objective is to build a business and profit-generating operation
among the top in Japan, and to be a vigorous corporate group full of creativity where each employee addresses their job with
hope.

(3)

Management Benchmark
The Group is committed to do its every best to achieve the target of consolidated sales of 100 billion yen and operating income
ratio of 5% as the mid-and-long term benchmark by taking various measures.

(4)

Activities
The following management issues will be tackled aggressively to attain the management objectives.
 Value-added transportation service
In order to strengthen its operation base, the Group is committed to provide, in addition to the existing transportation service
from makers’ plants to dealers, transportation of new cars among dealers, transportation of trade-in cars, ownership change,
registration, maintenance, auto body repair, painting, auction and export, packaging those services in response to customer
needs. Through these “high-value-added services” which can exceed customer expectations, the Company will strengthen thecapability of special transportations other than existing transportations to increase sales accordingly.
 Promotion of Geographical Blocks
Operational bases are being restructured in the automobile-related business, the Company’s core business, to further strengthen
vehicle transportation. By creating geographical blocks, we will advance “creation of optimal transportation system”,“unification of car dispatch system”, “improvement of transportation efficiency through volume effect”, “establishment ofappropriate transportation fees” and “unification of information and chain-of-command”, thereby attaining “speedier decisionmaking”, “stronger revenue management” and “stronger organization management”. We will move ahead of market changes
and stabilize Zero Group’s operational bases even as ground transportation is surrounded by changes, and work to improvestability, safety and quality.
 Expansion into new business
Through strategic sales efforts and reinforcement of operations, in the human resources business we are capturing various
outsourcing needs of companies arising from falling birthrate and aging population and diversification of demand, as well as
advancing into local municipalities. Facing the future, we will put in place systems to secure and educate drivers and utilize
personnel within the Group.
 Enhancement of export business and entering into ASEAN market and other Asian market
With regard to its export business, the Company will expand reuse business such as used car export and parts export incooperation with the Company’s used car auction business (Car Selection).

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The Company has established ZERO SCM LOGISTICS (BEIJING) CO., LTD. in August 2004 as the joint venture with
CITIC Logistics Co., Ltd., a group of top company in China, Sumitomo Corporation and Mitsui O.S.K. Lines, Ltd. to apply
the know-how of vehicle transportation and maintenance which has been accumulated in the domestic market. ZERO SCMLOGISTICS (BEIJING) CO., LTD., is engaged in new car transportation business and pre-delivery inspection business in
China, and has achieved steady performance in these businesses. Moreover, the Company has plans to enter into Asian
countries especially into remarkably growing ASEAN countries with vehicle transportation and automobile-related businesses.
(5)

Challenges faced by the Company
As the vehicle transportation business, the Company’s main business, is keyed to domestic vehicle sales, with vehicle sales in a
downward trend, it is currently facing an extremely difficult business environment. Moreover, this harsh situation is believed topersist in light of the risk of a sharp rise in fuel prices in the medium-term, establishment of more stringent emission regulations
and other environmental measures, and the need to cope with domestic workforce shortage, particularly with regard to drivers.
Under these circumstances, the Group will deal with such issues as those set forth below and engage in activities to realize adynamic growth strategy.
Challenges and Measures
 Promotion of ASEAN business
The Company has been promoting business development in ASEAN countries upon mutual cooperation with Tan ChongInternational Limited, and to make this relationship even closer, the Company concluded a business alliance agreement with
Tan Chong International Limited on May 15, 2014.
In the future, the Company will work with Tan Chong International Limited Group to promote exploration of 3 projects –“establishment of automobile value chains”, “alliance in the human resources business” and “alliance in the truck bodybuilding business” – and accelerate our undertaking to make ASEAN business a strong pillar of the Company.
 Dealing with changes in transportation modes
The entry of net auctions, large scale home electronics stores and leading logistics companies into vehicle transportation
business is creating a trend towards changing the vehicle transportation into a complex mode of distribution, including suchchanges as sales with lower distribution margin or sale of used cars between and among individuals (C2C business). In
addition to conventional trunk line transportation and localized transport, the Company will work towards establishing atransportation system that would respond quickly to “point-to-point transportation”.
 Further cost-cutting
Cost-cutting efforts will be taken in all areas in order to respond to more stringent emission regulations, long-term upward
trend in crude oil prices and other changes in the business environment. Operations that used to be done manually will besystematized, operations overlapping among affiliated companies will be reviewed to streamline business operations.
 Development of the human resource businessIn addition to providing human resources to society through securing and training drivers as has been done from the past, inlight of the aging population and low birth rate, the prospect of training and providing human resources in the field of
medicine, nursing care and childcare will be studied.

4.

Basic Views on Selection of Accounting Standards
Based upon progress of our overseas business development, and on the company policies of Tan Chong International Limited
Group, our parent company, and for the purpose of increasing efficiency and quality of our operations through unification offinancial reporting standards, and for international comparability of financial information in the capital markets, our Group has
decided to voluntarily adopt International Financial Reporting Standards (IFRS) for use in consolidated financial statementsfrom fiscal year ended June 30, 2016 instead of the Japan GAAP previously used.

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5.

Consolidated Financial Statements(1) Consolidated Balance Sheet(Unit: million yen)
As of June 30, 2015

As of June 30, 2016

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable
Merchandise
Supplies
Deferred tax assets
OthersAllowance for doubtful accounts
Total current assets
Fixed assets
Property, plant and equipment

Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Tools, furniture and fixtures, net
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Lease assets
Accumulated depreciation
Lease assets, net

Construction in progress
Total property, plant and equipment
Intangible assets
Goodwill
Lease assets
OthersTotal intangible assets

Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
OthersAllowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

-9-

6,051
8,448
812
82
262
1,320
(87)
16,890

8,067
8,578
659
120
335
985
(82)
18,664

6,432(3,144)
3,288
1,662(1,443)
218
429
(361)
67
7,939
2,815
(756)
2,059
73
13,647

6,680(3,340)3,340
1,750(1,465)
285
448
(368)
79
7,851
3,296
(1,117)2,178
10
13,746

1,227
42
493
1,763

879
29
640
1,550

1,468
85
406
1,004
(120)
2,844
18,25535,145

1,389
83
593
1,081
(71)
3,075
18,372
37,037

(Unit: million yen)
As of June 30, 2015

As of June 30, 2016

Liabilities
Current liabilities
3,212
880
1,335
427
1,871
948
649
294
435
15

Notes and accounts payable-trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Accrued expenses
Income taxes payable
Accrued consumption taxes
Deposits received
Allowance for bonus
Allowance for sub-lease loss
Others

3,068
1,065
1,170
495
2,005
1,594
519
262
589
15
863

Total current liabilities

1,036
11,106

11,649

1,823
1,753
14
987
496
－
28
2,155
84
89
7,433
18,540

768
1,861
2
946
106
76
13
2,476
84
541
6,877
18,5263,390
3,204
10,317(152)
16,7593,390
3,497
13,204(854)
19,238

54
(603)
147
247
(154)
16,60535,145

75
(562)
24
(264)
(726)
18,51137,037Long-term liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Provision for retirement benefits for directors
Provision for stock contribution
Allowance for sub-lease loss
Liability for retirement benefit
Asset retirement obligation
OthersTotal long-term liabilities
Total liabilities

Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury stock
Total shareholders’ equity
Accumulated other comprehensive income
Unrealized gains(losses) on securities
Revaluation reserve for land
Foreign currency translation adjustment
Accumulated retirement allowance adjustment
Total accumulated other comprehensive income
Total net assets

Total liabilities and net assets- 10 -

(2) Consolidated Income Statement and Consolidated Comprehensive Income Statement(Consolidated Income Statement)(Unit: million yen)
FY14 ended June 30, 2015

FY15 ended June 30, 2016

77,24766,441
10,805
7,143
3,662

77,82964,875
12,953
7,682
5,271

6
7
9
60
27
－
33
80
225

2
6
6
65
118
76
26
160
462

74
30
11
115
3,772

66
－
17
83
5,650

2
62
－
64

2
－
17
20

1
29
348
－
378
3,458
1,583
(4)
1,579
1,878
1,878

2
29
29
32
94
5,576
2,180
37
2,217
3,358
3,358

Sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Rent income on fixed assets
Commission fee
Equity in earnings of affiliates

Consumption tax difference
Gains from disposal of supplies
OthersTotal non-operating income

Non-operating expenses
Interest expenses
Loss on investment securities
Losses on valuation of investment securities
OthersTotal non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of fixed assets
Compensation received
Total extraordinary income

Extraordinary loss
Losses on sales of fixed assets
Losses on retirement of fixed assets
Impairment losses
Losses on sales of subsidiary

Total extraordinary loss
Income before income taxes
Income taxes-current
Income taxes-deferred
Total income tax
Net income
Net income attributable to owners of parent company- 11 -

(Consolidated Comprehensive Income Statement)(Unit: million yen)
FY14 ended June 30, 2015

FY15 ended June 30, 2016

1,878

3,358

26
45
59
101
233
2,111

21
(512)
(122)
41
(572)
2,786

2,111

2,786

Net income
Other comprehensive income
Unrealized gains(losses) on securities
Retirement allowance adjustment
Equity of equity-method affiliate
Revaluation reserve for land
Total other comprehensive income
Comprehensive income(Breakdown)
Parent company portion of comprehensive
income- 12 -

(3) Consolidated Statement of Changes in Net Assets
FY14 ended June 30, 2015
(Unit: million yen)
Shareholder’s equity

Balance at the end of previous
periodCumulative effect of changein accounting policy
Balance at the end of previous
period reflecting the change inaccounting policy
Changes of items during theperiodCapital stock

Capital surplus

3,390

3,204

Retainedearnings

8,870

Treasury stock

Total
shareholder’sequity(152)

15,313

(155)
3,390

3,204

8,715

(155)
(152)

15,157

Dividends from surplus

(377)

(377)

Net income attributable toowners of parent company
Change in the scope of
consolidation

1,878

1,878

101

101

Purchase of treasury stock

(0)

(0)

Disposition of treasurystock
Net changes of items otherthan shareholder’s equity
Total changes of items during
the period
Balance at the end of current
period

－

－

1,602

(0)

1,602

3,390

3,204

10,317(152)

16,759

Accumulated other comprehensive income

Balance at the end of previous
periodCumulative effect of changein accounting policy
Balance at the end of previous
period reflecting the change inaccounting policy
Changes of items during theperiodUnrealized
gains(losses)
on securities

Revaluation
reserve for land

27

(705)

Foreigncurrencytranslation
adjustment

88

Accumulated
retirement
allowanceadjustment

202

Total
accumulated
Total net assets
othercomprehensiv
e income(386)

14,926
(155)

27

(705)

88

202

(386)

14,770

Dividends from surplus(377)

Net income attributable toowners of parent company
Change in the scope of
consolidation

1,878

Purchase of treasury stock

(0)

101

Disposition of treasurystock
Net changes of items otherthan shareholder’s equity

27

101

58

45

232

232

Total changes of items during
the period
Balance at the end of current
period

27

101

58

45

232

1,834

54

(603)

147

247

(154)

16,605- 13 -

FY15 ended June 30, 2016
(Unit: million yen)
Shareholder’s equity

Balance at the end of previous
periodCumulative effect of changein accounting policy
Balance at the end of previous
period reflecting the change inaccounting policy
Changes of items during theperiodCapital stock

Capital surplus

3,390

3,204

Retainedearnings

10,317

Treasury stock

Total
shareholder’sequity(152)

16,759

81
3,390

3,204

10,39981(152)

16,841Dividends from surplus

(553)

(553)

Net income attributable toparent company
Change in the scope of
consolidation

3,358

3,358
-

Purchase of treasury stock
Disposition of treasury
stock

292

(908)

(908)

207

499

Net changes of items otherthan shareholder’s equity
Total changes of items during
the period
Balance at the end of current
period

-

292

2,805

(701)

2,396

3,390

3,497

13,204(854)

19,238

Accumulated other comprehensive income

Balance at the end of previous
periodCumulative effect of changein accounting policy
Balance at the end of previous
period reflecting the change inaccounting policy
Changes of items during theperiodUnrealized
gains(losses)
on securities

Revaluation
reserve for land

54

(603)

Foreigncurrencytranslation
adjustment

147

Accumulated
retirement
allowanceadjustment

247

Total
accumulated
Total net assets
othercomprehensiv
e income(154)

16,605
81

54

(603)

147

247

(154)

16,687

Dividends from surplus(553)

Net income attributable toparent company
Change in the scope of
consolidation

3,358

Purchase of treasury stock(908)

Disposition of treasury
stock

499

-

Net changes of items otherthan shareholder’s equity

21

41

(122)

(512)

(572)

(572)

Total changes of items during
the period
Balance at the end of current
period

21

41

(122)

(512)

(572)

1,823

75

(562)

24

(264)

(726)

18,511- 14 -

(4) Consolidated Cash Flow Statement(Unit: million yen)
FY14 ended June 30, 2015

Cash flows from operating activities
Income before income taxes
Depreciation
Amortization of goodwill

Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in allowance for bonus
Increase (decrease) in liability for retirement
benefit
Increase (decrease) in provision for director’s
retirement benefits
Increase (decrease) in Board Benefit Trust
Increase (decrease) in allowance for sub-lease
loss
Interest and dividends income
Interest expenses
Losses (gains) on sales and retirement of fixed
assetsImpairment loss
Equity in earnings of affiliates
Compensation received
Decrease (increase) in notes and accounts
receivable-trade
Decrease (increase) in inventories
Decrease (increase) in other current assets
Increase (decrease) in notes and accounts
payable-trade
Increase (decrease) in other current liabilities
Increase (decrease) in accrued consumption
taxes
OthersSubtotalInterest and dividends received
Interest paid
Income taxes paid
Amount of compensation received
Amount of insurance proceeds received
Net cash used in operating activities
Cash flows from investment activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Payments for purchases of property, plant andequipment
Proceeds from sales of property, plant and equipment
Payments for purchases of intangible assets
Payments for purchases of investment securities
Proceeds from sale of subsidiary’s sharesaccompanied by change in scope of consolidation
Payments for loans implementation
Proceeds from collection of loans receivable
OthersNet cash used in investing activities- 15 -FY15 ended June 30, 2016

3,458
922
347

5,576
990
347

(11)

(42)

(11)

154

(260)

(412)

67

(390)

－

76

(15)

(15)

(13)
74

(9)
66

28

29

348
(27)
(62)

29
(118)
(18)

(775)

(130)

(469)
(282)

114
312

(276)

(143)

216

(101)

188

(130)

6
3,450
13
(74)
(1,449)
62
－
2,003

467
6,652
9
(66)
(1,584)
18
20
5,050

(0)
17

(0)
52

(625)

(422)

9
(104)
(392)

59
(262)
(0)

40

-

(323)
316
43
(1,016)

(29)
60
30
(512)

(Unit: million yen)
FY14 ended June 30, 2015

Cash flows from financing activities
Payments of short-term loans payable
Proceeds from long-term loans payable
Payments of long-term loans repayments
Payments for purchase of treasury stock
Payment of lease obligation repayments
Cash dividends paid
Net cash used in financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Increase (decrease) in cash and cash equivalents
pursuant to change in scope of consolidation
Cash and cash equivalents at end of period- 16 -FY15 ended June 30, 2016

190
1,740
(1,579)
(0)
(355)
(377)
(383)
603
5,148

185
180
(1,400)
(409)
(471)
(553)
(2,469)
2,068
5,856

104

－

5,856

7,924

(5)

Notes to Consolidated Financial Statements(Note on Going Concern Assumption)
Not applicable.
(Significant Fundamental Matters for the Preparation of Consolidated Financial Matters)
1. Information for the scope of consolidation(1) Number of consolidated subsidiaries: 14
Consolidated subsidiaries:
ZERO-TRANS CO., LTD.
ZERO PLUS KYUSHU CO., LTD.
KANDAKO KAIRIKU UNSO CO., LTD.
TOYO BUSSAN CO., LTD.
KYUSO COMPANY LIMTEDJAPAN RELIEF CO., LTD.
ASSIST WORK CO., LTD.
NISSAN SHIZUOKA WORKNET CO., LTD.
AUTO CARRY CO., LTD.
WORLD WINDOWS CO., LTD.
SHINWA RIKUSOU INC. and 3 other companies(Changes in the scope of consolidation)
In the current term, TBM CO., LTD. was removed from the scope of consolidation by reason of merger with ZEROTRANS CO., LTD., and NPF SERVICE CO., LTD was likewise removed by reason of liquidation.
(2) Unconsolidated subsidiaries
There are no unconsolidated subsidiaries.
2. Information for application of the equity method(1) Number of affiliates accounted for using the equity method: 6
ZERO SCM LOGISTICS (BEIJING) CO., LTD.
EIGHT ZERO CO., LTD.
TC ZERO COMPANY PRIVATE LIMITED and 3 other companies(Changes in the scope of equity method affiliates)
In the current term, UTSUNOMIYA TERMINAL UNYU CO. LTD. was removed from equity method affiliates byreason of sale of all of its shares, and GUANGZHOU EIGHT ZERO AUTO SERVICE CO., LTD. was likewise
removed by reason of liquidation.
(2) Unconsolidated subsidiaries and affiliates that are not accounted for using the equity method
There are no applicable items.
(3) Accounting periods of the affiliates accounted for using the equity method are different from that of the Company andthose companies are consolidated by using their financial statements based on their respective accounting period.

- 17 -

3. Information for different balance sheet date of consolidated subsidiaries
The balance sheet dates of the financial year for the consolidated subsidiaries are the same as the Company’s balance sheet
date.
Incidentally, the balance sheet date has been March 31 with regard to KANDAKO KAIRIKU UNSO CO., LTD., KYUSO
CO., LTD and NISSAN SHIZUOKA WORKNET CO., LTD. and 4 other companies, and the same has been April 30 withregard to WORLD WINDOWS CO., LTD. Adjustments were previously made to consolidated accounts to account forsignificant transactions involving these companies that occur between the end of those companies’ fiscal year-end date andthe end of the consolidated fiscal year; however, in order to more appropriately disclose the consolidated financial
statements, the accounting period for these companies have been changed to the end of the consolidated fiscal year from theprevious fiscal year. As a result, the previous fiscal year was 15 months from April 1, 2014 to June 30, 2015 with regard toconsolidated subsidiaries whose balance sheet date had been March 31, and was 14 months from May 1, 2014 to June 30,
2015 with regard to the consolidated subsidiary whose balance sheet date had been April 30.
4. Matters concerning accounting policies(1) Method of valuation of significant assets
a. Securities
Held-to-maturity debt securities
Stated at cost using the amortized cost method
Other securities
Securities with market quotations
Stated at market value based on the market price as of the end of the fiscal period (the valuation difference isaccounted for as a separate component of net assets and the cost of sales is calculated by using the movingaverage method)
Securities without market quotations
Stated at cost using the moving-average methodb. Derivatives
Stated as fair valuec. Inventories
Merchandise
Specific identification method is used to determine cost (values on the balance sheet are subject to the bookvalue reduction method based on decreased profitability)
Supplies
Last purchase cost method (values on the balance sheet are subject to the book value reduction method based on
decreased profitability)(2) Depreciation method of significant depreciable assets
a. Property, plant and equipment (excluding leased assets)
Straight-line method
b. Intangible assets (excluding leased assets)
Straight-line method
Incidentally, depreciation of software for internal use is by straight-line method based on useful life (five years)c. Lease assets
Lease assets relating to finance lease transactions that do not transfer ownership
Depreciation of leased assets is calculated by using the straight-line method over the period of the lase contract
term with no residual value.
Incidentally, finance lease transactions that do not transfer ownership that were commenced on or before June 30,
2008 are accounted for in a similar manner with ordinary rental transactions.
(3) Standards for major allowancesa. Allowance for doubtful accounts
In order to provide for potential credit losses on receivables outstanding, an estimated uncollectible amount isrecorded at the amount calculated based on the historical rate of credit loss with respect to normal receivables
and at the amount determined in consideration of collectability of individual receivables with respect to doubtful
accounts and certain other receivables.
b. Allowance for bonus
Bonuses for employees of the Company and consolidated subsidiaries are provided for in the necessary amounts
based on the estimated amounts to be borne in the current fiscal year.

- 18 -

c. Provision for director’s retirement benefits
In order to provide for payment of director’s retirement benefits, the estimated amount of retirement allowance
required at the closing date in accordance with the internal rules is recorded.
d. Provision for stock contribution
In order to provide for distribution of the shares of the Company in accordance with the Rules on Distributionsof Board Benefits, an estimated amount of the distribution obligation at the end of the current fiscal year isrecorded.
e. Allowance for sub-lease loss
In order to provide for losses arising during the remaining period of the sub-lease agreement, an amount equal to
the total amount of rent obligations less the total estimated rental revenue is recorded.
(4) Accounting treatment for retirement benefits
a. Method for attributing the estimated amount of retirement benefits
The benefit formula method is used for attributing the estimated amount of the retirement benefit obligations toperiods up to the end of the fiscal year under review in the calculation of net defined benefit liability.
b. Amortization of actuarial differences and prior service cost
Prior service cost is amortized as incurred using the straight-line method based on the average remaining service
period (10-13 years) of the employees in service during the period in which it arises.
Actuarial differences are treated as a lump-sum expense in the following consolidate fiscal year.
Unrecognized actual differences and unrecognized past service liabilities are included, after adjusting for tax
effects, in Accumulated other comprehensive income -- Accumulated retirement benefits adjustment under Net
Assets.
(5) Significant method for hedge accounting
a. Hedge accounting method
Interest rate swaps meet the conditions of special treatment and are thus given special treatment.
b. Hedged instruments and hedged items
Hedged instrument: interest rate swaps
Hedged item: interest on loans payablec. Hedging policy
The Company uses interest rate swaps to mitigate interest rate risk involved in procuring funds, and hedged items
are identified on an individual contract basis.
(6) Method and period for amortizing goodwill
Goodwill has been amortized by the straight-line method over reasonable periods estimated for each acquisition(5-10 years). If the value of goodwill is immaterial, the aggregate amount is written off in the fiscal year inwhich it arises.
(7) Scope of funds in consolidated cash flow statement
For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash on hand,demand deposits and short-term liquid investments that mature within three months from the purchase date andcan be converted easily into cash with little risk of change in value.
(8) Accounting for consumption tax
Consumption tax and local consumption taxes are accounted for under the tax exclusion method.
(Changes in the Accounting Policy)(Application of the ASBJ Statement)
The Company has applied “Revised Accounting Standard for Business Combinations (ASBJ Statement No. 21,
September 13, 2013) (hereinafter referred to as the “Business Combinations Accounting Standard”), “Revised
Accounting Standard for Consolidated Financial Statements (ASBJ Statement No. 22, September 13, 2013) hereinafterreferred to as the “Consolidation Accounting Standard”), “Revised Accounting Standard for Business Divestitures”(ASBJ Statement No. 7, September 13, 2013) (hereinafter referred to as the “Business Divestitures AccountingStandard” ) and other standards from the current term. Accordingly, the accounting methods have been changed to record
the difference arising from changes in equity in subsidiaries which the Company continues to control as capital surplus,
and to record business acquisition costs as expenses for the fiscal year in which incurred. In addition, regarding businesscombinations occurring on or after the start of the current term, the accounting method has been changed to retroactively
reflect adjustments to the amount allocated to acquisition costs arising from the finalization of the provisional accounting
treatment on the consolidated financial statements of the period in which the business combination occurs. Furthermore,presentation of net income has been changed. In order to reflect the changes in presentation of financial statements,
reclassification was made accordingly in the consolidated financial statements for the previous fiscal year.

- 19 -

The Business Combinations Accounting Standard and other standards have been applied from the start of the term ended
September 30, 2015 in accordance with the transitional treatment set forth in Article 58-2 (4) of the Business
Combinations Accounting Standard, Article 44-5 (4) of the Consolidation Accounting Standard and Article 57-4 (4) of
the Business Divestitures Accounting Standard. Incidentally, there is no effect on the profits and losses in the
consolidated financial statements for the current term and on the capital surplus at the end of the current accounting
period.
(Application of Implementation Guidance on Recoverability of Deferred Tax Assets)
As the “Implementation Guidance on Recoverability of Deferred Tax Assets” (Accounting Standard No. 26 of March
28, 2016) may be applied from consolidated financial statements from the end of the current term, this accounting
standard has been applied from the current term and part of the accounting treatment of recoverability of deferred tax
assets has been revised.
Implementation Guidance on Recoverability of Deferred Tax Assets is applied in accordance with the transitional
provision set forth in its Article 49(4), and the difference between the amount equivalent to the deferred tax assets
calculated by applying the provisions set forth in Categories 1 to 3 of Article 49 and the deferred tax liabilities as of thestart of the current term, and the amount equivalent to deferred tax assets and deferred tax at the end of the previous
term is added in retained earnings at the beginning of the current term.
As a result, at the beginning of the current term, deferred tax assets (investment and other assets) were increased by 81
million yen, and retained earnings by 81 million yen. Reflecting the impact on net assets at the beginning of the current
term, retained earnings at the beginning posted in the Consolidated Statement of Changes were increased by 81 million
yen.
(Additional Information)(Abolition of Retirement Benefits for Directors)
At the ordinary general meeting of shareholders convened on September 29, 2015, a resolution was passed to makefinal payment pursuant to abolition of the directorate retirement benefits system. Pursuant to the foregoing, theCompany reversed the full amount of “Provision for retirement benefits for directors” and included the outstandingbalance under “Others” of Long-term liabilities as long-term accounts payable in order to continue to be prepared to
pay retirement benefits for directors.
Incidentally, in some of the consolidated subsidiaries, in order to prepare for payment of retirement benefits to directors,
the amounts to be paid based on internal regulations have been recognized under “Provision for retirement benefits for
directors”.
(Introduction of a Performance-based Stock Compensation Program)At the ordinary general meeting of shareholders convened on September 29, 2015, a resolution was passed to newly
introduce a new stock compensation program ‘Board Benefit Trust (BBT)’ (hereinafter referred to as the “Program”)
for the Company’s directors, auditors and executive officers (excluding those serving concurrently as officers of theCompany’s parent company, outside directors and outside auditors) (hereinafter referred to as the “Directors andOthers”), with the purpose of increasing the awareness of the Directors and Others of their contribution to improving
medium to long-term performance and increasing corporate value.
The Trust is accounted according to “Practical Solution on Transactions of Delivering the Company's Own Stock to
Employees etc. through Trusts” (Practical Issue Task Force No. 30, March 26, 2015).
(1) Overview of the transaction
This is a performance-based stock compensation program whereby shares of the Company are acquired by theTrust using money contributed as funds by the Company, and distributed by the Trust in accordance with the Rules
on Distributions of Board Benefits based on points given to each of the Directors and Others in view of theirpositions and performance. Incidentally, the shares of the Company shall be distributed to the Directors and Others
as a general rule when they leave their positions.
(2) Treasury stock remaining in the Trust
Stock remaining in the Trust is recognized as treasury stock under assets section of the quarterly consolidatedbalance sheet by book value of the Trust (excluding ancillary expenses). The book value of the relevant treasury
shares was 499 million yet at the end of the current term. The number of shares at the end of the term was 357,100- 20 -

shares at the end of the current term.
(Effect of Changes in Corporation Tax Rates, etc.)
The Act on Partial Revision of the Income Tax Act, etc. (Act No. 15 of 2016) and the Act on Partial Revision of the
Local Tax Act, etc.” (Act No. 13 of 2016) were formed on March 29, 2016, and corporation tax rates, etc. are to belowered from the consolidated fiscal periods commencing on and after April 1, 2016. Pursuant to the foregoing, thenormal effective statutory tax rate used in the calculation of deferred tax assets and deferred tax liabilities would bechanged from 32.0% to 30.9% with respect to the temporary difference expected to be eliminated in the consolidated
fiscal year commencing on and after July 1, 2016, and from 32.0% to 30.7%with respect to the temporary difference
expected to be eliminated in the consolidated fiscal year commencing on and after July 1, 2018. Incidentally, this change
has no material effect on quarterly consolidated financial statements.
(Segment Information)a. Segment information
1. Overview of the reportable segments
Reportable segments of the Group are components for which discrete financial information is available and whose
operating results are regularly reviewed by the chief operating decision-making body to make decisions about resource
allocation and to assess performance.
Based on an aggregation of business segments with respect to its management organization, structure and service
attributes, the Group’s reportable segments are automobile-related business, human resources business and general cargotransportation businesses.
Main services for each reportable segment
Segment

Main services

Automobile-related business

Vehicle transport, maintenance, used car auctions, export of used cars

Human resources business

Driver dispatch, personal vehicle operation management

General cargobusiness

General consumer goods shipping and warehousing, cargo handling of coal,slag, etc., warehouse rental

transportation

2. Calculation method for net sales, income or loss, assets, liabilities and other items by reportable segments
Accounting policies adopted by the reportable segments are the same as those described in “Significant Fundamental
Matters for the Preparation of Consolidated Financial Matters”. Segment income for each business segment correspond tooperating income (before goodwill amortization).
Inter-segment sales and transfer are based on prevailing market prices.

- 21 -

3. Information on Sales, Income or Loss, Assets, Liabilities and Other Items by Reportable Segment
FY14 ended June 30, 2015
(Unit: million yen)
Consolidated
Adjustments statements of(Note 1)income(Note 2)

Automobile-relatedbusiness

Human
resourcesbusiness

General cargotransportation
business

59,365

11,822

6,058

77,247－

77,247

57

504

116

678

(678)

－

59,423

12,327

6,174

77,925(678)

77,247

Segment income

4,081

568

868

5,517

(1,855)

3,662

Segment assets

18,342

2,741

6,094

27,178

7,967

35,145

590

25

219

835

87

922

Total

Sales
Net sales to external customers
Inter-segment net sales or transfers
Total

Other items
Depreciation

Increase in property, plant and
1,065
59
359
1,484
49
1,534
equipment and intangible assets
Note 1. Adjustment amounts are as follows:(1) The adjustment amount of (1,855 million yen) in segment income included group-wide expenses of(1,504 million yen), goodwill amortization of (347 million yen) and inter-segment eliminations of (2million yen). Group-wide expenses are expenses related to the Company’s management division that are
not attributable to reportable segments.
(2) Segment asset adjustments are group-wide assets that are not allocated to each reportable segment.
(3) Other item adjustments are related to group-wide assets that are not allocated to each reportable segment.
Note 2. Segment income is adjusted to reconcile with the operating income of the consolidated financial statements.
Note 3. Matters regarding changes in reported segments, etc.
In the past, the balance sheet dates of certain consolidated subsidiaries were March 31 or April 30, and in the
preparation of consolidated financial statements, financial statements as of and for the year ended on said dates
were used and necessary adjustments were made to their financial statements to reflect any significant
transactions that occurred during the period prior to the Company’s balance sheet date. However, in order tomore appropriately disclose and manage our group’s performance, the financial results for the current fiscal
year for these consolidated subsidiaries reflect performance for a period of 15 months from April 1, 2014 toJune 30, 2015 (14 months from May 1, 2014 to June 30, 2015 in the case of a number of our subsidiaries). As aresult of this change, sales for the 3-month period from April 1, 2014 (2-month period from May 1, 2014 in thecase of a number of our subsidiaries) increased by 1,004 million yen for automobile-related business, by 888
million yen for general cargo transportation business, and segment income by 9 million yen for automobilerelated business, and by 35 million yen for general cargo transportation business- 22 -

Current term as of June 30, 2016
(Unit: million yen)
Consolidated
Adjustments statements of(Note 1)income(Note 2)

Automobile-relatedbusiness

Human
resourcesbusiness

General cargotransportation
business

59,714

13,215

4,899

77,829－77,829

67

411

105

585

(585)

－

59,782

13,627

5,005

78,414(585)

77,829Segment income

6,175

500

718

7,393

(2,122)

5,271

Segment assets

18,478

2,841

5,843

27,163

9,874

37,037

672

26

201

901

89

990

Total

Sales
Net sales to external customers
Inter-segment net sales or transfers
Total

Other items
Depreciation
Increase in property, plant and

1,167
121
74
1,363
28
1,392
equipment and intangible assets
Note 1. Adjustment amounts are as follows:(1) The adjustment amount of (2,122 million yen) in segment income included group-wide expenses of(1,774 million yen), goodwill amortization of (347 million yen) and inter-segment eliminations of (0million yen). Group-wide expenses are expenses related to the Company’s management division that are
not attributable to reportable segments.
(2) Segment asset adjustments are group-wide assets that are not allocated to each reportable segment.
(3) Other item adjustments are related to group-wide assets that are not allocated to each reportable segment.
Note 2. Segment income is adjusted to reconcile with the operating income of the consolidated financial statements.
b. Related information
FY14 ended June 30, 2015
1. Segment information by product and service
Information by product and service is not presented since the same information is presented in segment information.
2. Geographical segment information
(1)

Sales
Geographical segment information is omitted since net sales to external customers in Japan exceed 90% of total net
sales in the consolidated statements of income.
(Unit: million yen)

(2)

Japan

Asia

OthersTotal

68,267

8,799

179

77,247

Tangible fixed assets
There are no applicable items since there are no tangible fixed assets outside of Japan.

3. Information by major customer(Unit: million yen)
Name of Customer

Sales

Relevant segment

Nissan Motor Co., Ltd.

14,673

Automobile-related business- 23 -

FY15 ended June 30, 2016
1. Segment information by product and service
Information by product and service is not presented since the same information is presented in segment information.
2. Geographical segment information
(1)

Sales
(Unit: million yen)

(2)

Japan

Asia

OthersTotal

68,5789,021

229

77,829Tangible fixed assets
There are no applicable items since there are no tangible fixed assets outside of Japan.

3. Information by major customer(Unit: million yen)
Name of Customer

Sales

Nissan Motor Co., Ltd.

Relevant segment
12,259Automobile-related businessc. Information on impairment losses on fixed assets by reportable segments
FY14 ended June 30, 2015
(Unit: million yen)

Impairment losses

Automobilerelated business

Human resourcesbusiness

General cargotransportation
business

－

－

348

Automobilerelated business

Human resourcesbusiness

General cargotransportation
business－－

29

Group-wide/
Elimination

Total

－

348

FY15 ended June 30, 2016
(Unit: million yen)

Impairment losses- 24 -

Group-wide/
Elimination
－

Total
29

d. Information on amortization and unamortized balance of goodwill by reportable segments
FY14 ended June 30, 2015
(Unit: million yen)Amortization
during the year
Balance at theend of year

Automobilerelated business

General cargotransportation
business

Human resourcesbusiness

19

328

－

76

1,150

Group-wide/
Elimination

Total

－

347

－

1,227

－

FY15 ended June 30, 2016
(Unit: million yen)Amortization
during the year
Balance at theend of year

Automobilerelated business

General cargotransportation
business

Human resourcesbusiness

19

328

－

－

347

57

822

－

－

879

e. Information on gain on negative goodwill by reportable segments
FY14 ended June 30, 2015
Not applicable.
FY15 ended June 30, 2016
Not applicable.

- 25 -

Group-wide/
Elimination

Total

(Per Share Information)

2015
Year ended June 30, 20152016
Year ended June 30, 2016

971.51 yen

1,115.63 yen

Net assets per share
Basic net income per share

109.90 yen
201.77 yen
Note 1. Diluted net income per share amounts are not presented since there are no shares existing that have dilutive effects.
Note 2. The basis for calculation of basic net income per share is as follows:

2015
Year ended June 30, 20152016
Year ended June 30, 2016

Basic net income per share
Profit (loss) attributable to owners of parent(Millions of yen)

1,878

3,358

－

-

Net income attributable to common shareholders(Millions of yen)

1,878

3,358

Average number of common stock during the year
(Thousands of shares)

17,092

16,647

Net income not attributableshareholders (Millions of yen)tocommon(Subsequent Events)
Not applicable.

- 26 -