Financial Results for the Fiscal Year Ended June 30, 2014
August 8, 2014
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
Contact for inquiries:
Mamoru Yoshida, Director,
Tel: 044-520-0106
General Manager, Corporate Planning Department
Date of Annual Shareholders’ Meeting:
September 26, 2014
Date to begin payment of dividend:
September 29, 2014
Date of financial report submission
September 26, 2014
Additional materials for the financial results for FY2013
None
Briefing session for the financial results for FY2013
Yes (to analysts)

1. Consolidated Financial Results for the Fiscal Year Ended June 30, 2014
(From July 1, 2013 to June 30, 2014)(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

Million yen%

Million yen

Ordinary income%

Million yen

Net income%

Million yen%

FY2013

67,630

12.6

2,853

78.3

2,937

76.9

1,510

110.8

FY201260,073

4.7

1,600

-31.3

1,660

-29.2

716

-23.8

(Note)

Comprehensive income:  FY2013 1,602 million yen ( 110.8%)
FY2012760 million yen (-30.8%)
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







FY201388.38

FY2012

41.92(Ref.) Equity in net income of affiliates:

-

10.7

9.3

4.2

-

5.5

5.4

2.7

FY2013 : 36 million yen   FY2012: 26 million yen(2Consolidated Financial Position                      
Total assets

Net assets

Shareholders’ equity
ratio

Net assets per share

Million yen

Million yen

Yen

FY201332,107

14,92646.5

873.28FY201231,096

13,33342.9

780.07(Ref.) Shareholders’ equity :

As ofJune 30, 2014 : 14,926 million yen As of June 30, 2013 : 13,333 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

FY2013

2,284

-480

-1,4405,148

FY2012

2,236

-594

-1,5404,785

2. Dividends
Dividend per share(Recorddate)

At end of
1Q

FY2012FY2013
Forecast
for
FY2014

At end of
2Q

At end of
3Q

At end of
4Q

Annual
total

Yen

Yen

Yen

Yen

Yen

-

4.00
8.00

-

4.40
14.10

8.40
22.10

-

8.00

-

15.00

23.00

Annualtotal
amount ofdividend
Million
yen
143
377

Dividend
payout ratio(Consolidated)

Dividend ratioof net assets(Consolidated)

%

%

20.0
25.0

1.1
2.7

25.0

3. Consolidated Forecasts for FY2014 (From July 1, 2014 to June 30, 2015)
Percentages shown below for whole FY2014 are the rates of increase or decrease compared with the previous year.

Sales
Millionyen
Whole FY2014

69,500%2.8

Operating income

Ordinary income

MillionMillion

yen
2,900

%
1.6

yen
2,950

%
0.4

Net income per share

Net income
Millionyen
1,570-basic
%

Yen

3.9

91.85

*Remarks(1) Changes in important subsidiaries during period (Transfer of particular subsidiary which involves the change of scopeof consolidation): N/A(2) Changes in accounting policies, procedure or notation method for documenting consolidated financial statements
Changes in accordance with the revision of accounting standards and others: Yes
Changes other than above: N/AChanges in accounting estimates: N/ARestatement of corrections: N/A(3) Number of issued shares (common shares)
Number of issued shares (including treasury stock) at the end of each period:
FY2013: 17,560,242
FY2012: 17,560,242
Number of repurchased shares at the end of each period:
FY2013: 467,711
FY2012: 467,711
Average number of shares issued during the fiscal year
FY2013: 17,092,531
FY2012: 17,092,553

2

(Ref.) Unconsolidated Financial Results for the Fiscal Year Ended June 30, 2014
1. Unconsolidated Financial Results for the Fiscal Year Ended June 30, 2014 (From July 1, 2013 toJune 30, 2014)(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%

FY2013

Million yen
51,064%
9.5

Million yen
1,810

103.4

1,977

82.2

1,059

91.2

FY2012

46,655

3.4

889

-41.2

1,085

-34.3

554

-32.5

Earnings per share–basic%Million yen

Earnings per share-diluted

FY201362.01 yen-

FY201232.44 yen-

(2Unconsolidated Financial Position           Total assets

Net assets

Shareholders’equity ratio

Net assets per
share

Million yen

Million yen%

yen

FY201327,29812,81446.9

749.73

FY2012

26,434

11,95245.2

669.27(Ref.)

Shareholders’ equity:
As of June 30, 2014 : 12,814 million yen   As of June 30, 2013 : 11,952 million yenImplementation 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
available. Actual results may differ from those forecasts depending on various factors.

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 Dividends; Dividends in Current Fiscal Year and Next Fiscal Year(4) Risks for Businesses
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. 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)(Accounting Standards Not Applied)(Segment Information)(Per Share Information)(Subsequent Events)
5. Financial Statements(1) Balance Sheets(2) Statements of Income(3) Statements of Changes in Net Assets(4) Notes to Financial Statements(Note on Going Concern Assumption)

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5
6
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11
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11
11
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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 improvements in corporate earnings andemployment situation against the backdrop of the government’s growth strategy such as regulatory andinstitutional reforms and the Bank of Japan’s quantitative and qualitative easy monetary policy. Also, it
followed a recovery trend as a last-minute rise in demand that occurred before the consumption tax rate hikelifted the economy as a whole, although there are some reactions to the rush demand.
In the automobile industry, Japanese automakers’ new vehicle sales in the domestic market turned for the
better and totaled 5,669,674 units (up 10.4% year-on-year) (the Japan Automobile Manufacturers
Association’s statistical data), recovering to the level before the economic downturn precipitated by the
Lehman Brothers bankruptcy in 2008. As trade-in vehicles increased in conjunction with the growth in new
vehicle sales volume, the used car market also became active. And reflecting consumer preference for lowpriced vehicles in Japan, used mini-vehicle sales increased 7.5% year-on-year (calculated using the Japan
Light Motor Vehicle and Motorcycle Association’s statistics), meanwhile used passenger cars showed strong
performance of a 20.4% increase year-on-year (the Japan Automobile Dealers Association’s statistics) due toincreases in exports.
[No. of Motor Vehicles Related to Domestic Distribution]
Domestic Sales(Unit: Units)

July 2012-June 2013

Year-on-year Change(%)

July 2013-June 2014

New vehicles*15,134,012

5,669,674

110.4%*1(640,883)(718,407)(112.1%)*2

245,450

291,258

118.7%

Passenger cars

*3

3,954,993

3,868,631

97.8%

Mini-cars*4

2,929,342

3,149,363

107.5%

7,017,994
300,431101.9%*36,884,335
313,473

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

Total of used cares
De-registered vehicle

July 2012-June 2013

Export volume (in units)

95.8%
Year-on-year Change(%)

July 2013-June 2014

New vehicles
Domestic automakers*14,596,500

4,560,152

99.2%(Nissan Motor)*1(572,434)(530,037)(92.6%)

Used passenger vehicles*5

1,157,912

1,394,361

120.4%*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(Unit: yen per liter)[Retail Prices of Fuels]
July 2012-June 2013

Year-on-year Change(%)

July 2013-June 2014

Light oil

*6

129

140

108.5%

Regular gasoline

*6

149

161

108.1%*6 Calculated using the Resources and Energy Agency’s statistics (The fuel that our company uses for transportation services is mainly light oil.)In this business environment, at our group’s automobile-related business, as a result of implementing sales
measures and activities in response to changes in the market, new vehicle and imported vehicle transportation
volumes for existing client companies and used car transportation volume both increased, resulting in a year-2-

on-year increase in net revenue.
In addition, in our continued efforts to improve profitability, we tackled nationwide deployment of our vehicle
allocation support system, while continuing to implement measures to improve transportation quality, shortendelivery time and cut transportation cost by reducing the number of relay points.
As a result of these measures, our group’s financial results for the current fiscal year to June 30, 2014 showedsales of 67,630 million yen (up 12.6% year-on-year) and operating income of 2,853 million yen (up 78.3%
year-on-year), thus posting year-on-year increases in both sales and operating income). Also, ordinary income
rose to 2,973 million yen (up 76.9% year-on-year), and net income jumped to 1,510 million yen (up 110.8%
year-on-year).
" Business Performance by Segment<Automobile-related Business>
In this business segment, Nissan Motor Company, our major customer, sold 718,407 units (up 12.1% year-onyear) of new vehicles in Japan. New vehicles made by other Japanese automakers, imported cars and used cars
also posted year-on-year increases in domestic sales. In order to capitalize on these market upturns, we carried out
organizational changes and enhancements for the Sales Development Department which is the window office for
automakers and importers, the Order-taking Center which is the contact point for general customers, and theExport Sales Department which plays a coordinating role for used-car exports. Moreover, the company
implemented measures to further expand net revenue, along with efforts to provide higher valued-added services
by pursuing new business initiatives, such as acquisition of the position of a prime contractor for transportation ofdomestic automakers’ vehicles, acquisition of all WORLD WINDOWS CO., LTD.’s shares and making it into a
subsidiary and winning of orders from foreign automakers for the business of new vehicle maintenance/predelivery inspection and vehicle storage.
On the back of these factors, this segment’s sales rose to 52,359 million yen (up 16.9% year-on-year). In pursuitof higher profitability, we continued to promote positive activities to improve the means of transportation, thenumber of relay points and transport routes, while further enhancing labor management. As a result, the segment
income significantly improved to 3,235 million yen (up 33.9% year-on-year).
<General Cargo Transportation Business>
In the previous term, we made a thorough review of this business segment and promoted withdrawals from
unprofitable operations and the consolidation and abolition of business facilities. Owing to these actions, thissegment’s sales substantially dropped to 4,945 million yen (down 20.7% year-on-year). However, KANDAKOKAIRIKU UNSO CO., LTD., a ZERO subsidiary, continued firm performance on its mainstay business ofloading and unloading of coals, posting significant year-on-year increases in both net revenue and profit. Also,
KYUSO COMPANY LTD., another ZERO subsidiary, showed both segment’s sales and segment income
increases year-on-year due mainly to its cost/expense structural reform and the winning of new businesses.
As a result of the above, this segment has transformed itself into a highly profitable structure as exemplified by
the increased segment income of 810 million yen (up 140.6 % year-on-year).
<Human Resources Business>
In this segment, 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. Also, we are facing a wide variety of HR issues because there is a need tosecure job opportunities for older persons, while the number of young job applicants is shrinking, reflecting thefalling birthrate and the rapid aging of the population.
Under these circumstances, concerning our group’s transportation service to and from a certain place, we focused
our sales efforts on the Kyushu and Hokkaido regions by making a strategic shift from major metropolitan areas
toward regional areas. In the dispatch business, we put an emphasis on the securing of human resources and thenurturing of drivers. As a result, this segment’s sales rose to 10, 868 million yen (up 15.8% year-on-year), thusachieving a record history sales exceeding the 10 million yen mark for the first time. Also, the segment income
increased from the prior fiscal year to 561 million yen (up 29.3% year on year).
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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 bysegment, they are recognized as “Adjustments” items as listed in “Segment Information” in “4. “Consolidated
Financial Statements” and amounted to 1,754 million yen.
# Forecast for the Next Fiscal YearIn the next consolidated fiscal year, the nation’s economy is expected to continue on a recovery trend, mainly
supported by the Government’s economic policy package. However, in the automobile industry, uncertainty
over the prospects of the domestic market is likely to remain due to reductions in demand as a reaction after thelast-minute rise in demand that occurred before the consumption tax increase. Also, in the transportationindustry, we will continue to face a severe business environment due mainly to growing labor shortages, risingfuel prices and the need to secure a higher level of safety.
Our group will press forward with initiatives to reinforce the base for our domestic vehicle transportation
business by continuing efforts to promote sales activities and improve transportation efficiency and cost, while
keeping in mind higher profitability. Also, we will undertake the challenges of expanding businesses incidental
to transportation and expanding automotive business in ASEAN countries. Based on this outlook, we haveissued forecasts listed below.
(For Reference)
Results for the fiscal year
ended June 30, 2014
Forecasts for the fiscal year
ending June 30, 2015
Year on year %Sales
67,630
millionyen
69,500
millionyen
102.8%

Operating income

Ordinary income

Net income

2,853 million yen

2,937 million yen

1,510 million yen

2,900 million yen

2,950 million yen

1,570 million yen

101.6%

100.4%

103.9%(2) Analysis of the Financial Condition! Assets, Liabilities and Net Assets(Assets)
Compared to the end of the previous term, current assets increased by 1,257 million yen (9.6%) to 14,353
million yen. This is chiefly due to increase of cash and deposits by 363 million yen, and notes and accounts
receivable-trade by 624 million yen.
Compared to the end of the previous term, fixed assets decreased by 245 million yen (1.4%) to 17,754 million
yen. This is chiefly due to the fact that although lease assets increased by 182 million yen and investment
securities by 225 million yen, buildings and structures decreased by 218 million yen, and goodwill by 328
million yen.
As a result of the foregoing, compared to the end of the previous term, total assets increased by 1,011 million
yen (3.3%) to 32,107 million yen.
(Liabilities)
Compared to the end of the previous term, current liabilities increased by 321 million yen (3.3%) to 10,067
million yen. This is chiefly due to increase of income taxes payable by 217 million yen, and accrued
consumption taxes by 168 million yen.
Compared to the end of the previous term, long-term liabilities decreased by 903 million yen (11.3%) to 7,113
million yen. This is chiefly due to the fact that liability for retirement benefit decreased by 847 million yen
provided to the previous term’s provision for retirement benefits decreased by 847 million yen.
As a result of the foregoing, compared to the end of the previous term, liabilities decreased by 581million yen(3.3%) to 17,181 million yen.

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(Net Assets)
Compared to the end of the previous term, net assets increased by 1,593 million yen (12.9%) to 14,926 million
yen. This is chiefly due to increase of retained earnings due to posting of net income by 1,298 million yen.
" Cash Flow Situation
At the end of the current term, cash and cash equivalents (hereinafter referred to as “Funds”) increased by 363
million yen compared to the end of the previous term, to 5,148 million yen.
The respective cash flow situation in the current term and their causes are as follows:(Cash flows from operating activities)
Funds provided by operating activities were 2,284 million yen (2.1% increase from the previous term).
Income was provided mainly by 2,926 million yen in income before income taxes, 736 million yen in
depreciation, 329 million yen in amortization of goodwill, and 291 million yen in increase in other current
liabilities. Payments were made mainly as 942 million yen in income taxes paid, increase of 518 million yen innotes and accounts receivable-trade, and increase of 108 million yen in inventories.
(Cash flows from investment activities)
Funds used in investment activities were 480 million yen (19.2% decrease from the previous term).
Income was provided mainly by 196 million yen as proceeds from collection of loans receivable, and 310
million yen as proceeds from sales of property, plant and equipment. Payments were made mainly as 259
million yen in payments for purchase of intangible assets, 206 million yen in payments for purchases ofproperty, plant and equipment, 175 million yen in payments arising from acquisition of subsidiary accompanied
by change in scope of consolidation, and 145 million yen in payments for loans implementation.
(Cash flows from financing activities)
Funds used in financing activities were 1,440 million yen (6.5% decrease from the previous term).
Payments were made mainly as 932 million yen in payments of loans payable, 295 million yen in payment oflease obligation repayments, and 212 million yen in cash dividends paid.
Change in the Group’s Cash-flow Related Indicators
FY2010Equity ratio (%)
38.0
Equity ratio at market value basis (%)
Cash flow to interest bearing debt ratio (perannum)
Interest coverage ratio (multiples)

FY2011FY2012FY2013

11.1

42.3
18.1

42.9
18.7

46.5
37.1

6.5

2.0

2.0

1.5

9.0

26.3

25.7

29.1

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-5-following is planned to be the basis of profits that can be appropriated.
Earnings per share on
consolidated net income

More than 40 yen but 80
yen or less

40 yen or lessMore than 80 yen

Earnings per share on Earnings per share on
Annual dividend
8 yen
consolidated net income consolidated net income
 x 20% x 25%(Note) 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.
Dividend per share

Earnings per share on
consolidated net income

Annual total

Second quarter
end

Fiscal year end

FY201388.38 yen

22.10 yen

8.00 yen

14.10 yen

FY201491.85 yen

23.00 yen

8.00 yen

15.00 yen

(4) Risks for Businesses
Significant items which may cause risks relating to the Group’s businesses are as follows. Items which containfuture matters are judged by the Company based as of submission date of the financial results of fiscal 2013 and it
is not assured that the following statements cover all risks to the Company’s businesses and investment to its
shares.
! Degree of dependence of sales on major customer
Sales results from Nissan Motor Co., Ltd. (hereinafter called as Nissan Motor), the Company’s major customer, areas follows. As the degree of dependence of sales on them is quite high, in case there are any changes to tradeconditions between the Company and them, its business climate can be negatively affected at a certain level.
FY2011

Party
Nissan Motor
Nissan Motor Group(*Note)FY2012FY2013

Million yen

Percentage
in grosssales

Million yen

Percentage
in grosssales

Million yen

Percentage
in grosssales

16,65429.0%

14,751

24.6%

16,654

24.6%

21,26737.1%

20,10533.5%

22,587

33.4%(*Note) Nissan Motor Group includes Nissan Motor, Autech Japan Inc. and sales dealers of nation-wide Nissan
Motor sales-network in Japan.
The Company has entered into a contract of “Memorandum of Understanding Regarding Strategic Partnership
Contract” with Nissan Motor in addition to those contracts such as “Vehicle Transportation Trust Agreement”
and “Basic Service Agreement”, which were concluded by respective operations such as vehicle transportation
operation and new vehicle inspection operation. Those contracts stipulate that Nissan Motor entrust vehicle
logistics related operations to the Company continuously during the contract period on condition that theCompany reaches the target by each evaluation items set by them.
The current Memorandum of Understanding has been agreed in principle that it is to be validated continuingly
until the end of March in 2017. The Company had successfully reached the target set by Nissan Motor since
the contract was concluded in 2003 till the end of March, 2014. It is prospected to continue to renew thecontract after April, 2014 by making effort to improve the quality of operation.
However, in case that the Company is not able to continue to deal with Nissan Motor due to circumstances
beyond its control, the Group’s business climate can be negatively affected at a certain level.
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" Concentration of sales in the second half of fiscal year
In the automobile-related business, new car transportation is affected by the tendency of which auto makers’
shipment volume are to increase in March compared with the rest of the months. As for profitable private cartransportation, the demand is inclined to increase in March, a moving season. Since it is predictable to havesame concentration of business performance for the future, it is required to pay attention upon judging theGroup’s business performance.

First half

FY2012FY2013

Sales (million yen)
Second half

Total

28,799(47.9%)

31,273(52.1%)

60,073(100.0%)31,981(47.3%)

35,648(52.7%)

67,630(100.0%)# Matters regarding specific laws and regulations
a. Motor Truck Vehicle Transportation Business Act and other regulations
The Group’s main business activities, namely its transportation services are based on the following assumptions:as a general motor truck transportation business operator, based on the general motor truck transportation businesspermit (Director of the Kanto Regional Transportation Bureau (Kan Ji Ka 2) No. 1992, etc.) pursuant to Article 3of the Motor Truck Vehicle Transportation Business Act, and as a second class consigned freight transportation
business operator, based on the second class consigned freight transportation business permit (Director of the
Forwards Division, Policy Bureau Freight (Koku So Ka Fuku No. 6-4-25). The licenses and permits held by theGroup are of indefinite duration.
These laws set forth in detail the regulations regarding transportation safety focusing on: permits issued tobusiness executives, standards of business permits, creation and approval of standard transportation contracts,
prevention of driving under excessive working conditions; appointment of operation managers and qualification
examinations to operate service vehicles and ensure the security of transportation; orders for improvement ofbusiness issued by the supervisory agency; and furthermore of prohibition of using another’s name, and various
permits and approvals when transferring or acquiring business operations or suspending or discontinuing the same.
In particular, Article 33 of the Motor Truck Vehicle Transportation Business Act and Article 33 of the Consigned
Motor Truck Transportation Business Act set forth grounds for rescission of the permits and approvals. The
Group at this point in time has no matters falling under these grounds for rescission.
As explained above, general motor truck transportation business permits and second class consigned freighttransportation business permits are needed to continue the Group’s major business activities; should such permits
and approvals be rescinded in the future by reason of violations of the laws or regulations, it will no longer bepossible to engage in all or part of the main business activities and the Group’s business climate can be negatively
affected at a certain level.
There is also a possibility of new costs arising in the future in the event of changes in the nature of the Motor
Truck Vehicle Transportation Business Act and/or the Consigned Motor Truck Transportation Business Act and
the Group’s business climate can be negatively affected at a certain level.
b. Various regulations on controlling gas emissions
Regarding the Group’s businesses, the vehicle related business and general cargo transportation business, with theenactment of the “Special Measure Act on Reduction in Designated Locations of Total Amount of Nitrogen
Oxides and Particulate Matters Emitted by Motor Vehicles” (Motor Vehicle Nox/PM Act) on October 1, 2002 andwith the enactment of Tokyo Metropolis’ ordinance, “Ordinance on Securing the Health and Safety of Metropolis
Inhabitants” on October 1, 2003 in the metropolitan area, regulations on operation of diesel vehicles have spreadthroughout the country.
The Group has responded to the various regulations by switching to new vehicles or installing gas emission
control devices; however, further costs may arise if the nature of the regulations become more stringent in the-7-future, and the Group’s business climate can be negatively affected at a certain level.
c. Regulations of the Road Traffic Act
The Group complies with the Road Transport Act when engaging in its transportation business, and does its best
to ensure traffic safety placing utmost importance on human life. However, should a serious traffic accident occur,
the Group’s business climate can be negatively affected at a certain level.
d. Regulations regarding the Cabinet Order on Restrictions on Motor Vehicles under the Road Transport Act
Semi-trailers used by the Group for vehicle transportation have limitations on their length, height, excessive
loading, etc. imposed by the Cabinet Order on Restrictions on Motor Vehicles under the Road Transport Act.
Semi-trailers for vehicle transportation have been manufactured on the basis of being able to load 6 or 7
merchandise vehicles (vehicles requested to be transported); however, with merchandise vehicles becoming
larger in size in recent times, there may be situations where they do not fit the size of the semi-trailer whenloading.
The Group is making adjustments at the time of loading so as not to exceed the limit by mixing compact vehicles.
However, for transport of new vehicles where it would be difficult to mix in compact vehicles, there would besituations where the number of vehicles loaded may need to be reduced. While the Group will continue tonegotiate revision of the transportation fees to an appropriate level, if the regulations are revised and the cost
increase due to lower transportation efficiency cannot be reflected in the transportation fees, the Group’s businessclimate can be negatively affected at a certain level.
e. Regulations of the Labor Standards Act
Overtime work and continuous vehicle operation by the crew require workforce management based on the“Labor Standards Act”, “Standards on Improvement of Labor Hours, etc. of Motor Vehicle Drivers”, etc. The
recent trend in labor administration is to require companies to provide more detailed workforce management andsafety precautions to employees, through strengthening guidance and supervision of long work hours by thesupervisory agency and the proposed amendment of the Industrial Safety and Health Act to make mental healthcheck-up mandatory. Taking the foregoing into consideration, depending on which direction the examination ofstrengthening regulations and application of the law takes, and the Group’s business climate can be negatively
affected at a certain level.
f. Amendment of the Worker Dispatching Act
The Worker Dispatching Act as amended came into effect from October 2012. The recent amendments include
prohibition of dispatch of day laborers as a general rule, provision of equal treatment, disclosure of margin rates,clear indication of dispatching fees, and introduction of “constructive offer of labor contract” in the case of illegal
dispatching. There are movements among client companies to switch to outsourcing or direct employment, and it
is expected that the dispatching business will become even more competitive. Depending on how the amended
Worker Dispatching Act impacts the business and how the client companies respond to the amended Act coming
into force, the Group’s business climate can be negatively affected at a certain level.
$ Increase of fuel prices
Light oil, gasoline and other fuel prices have increased sharply and if the increased transportation costs cannot be
absorbed by corporate endeavor or reflected on the transportation fees (including fuel surcharges), the Group’sbusiness climate can be negatively affected at a certain level.
% Human resource recruitment
While recruiting and training human resources has been a major business agenda, in case it is not possible tosecure the required personnel due to labor shortage caused by the falling birth rate and aging population, coupledwith the steep rise in labor costs as the economy recovers, the Group’s business climate can be negatively affected
at a certain level.

-8-& Equity price risk
The Group holds stocks mainly of its business partners chiefly to maintain and strengthen business ties with thepartners. For this reason, depending on movements in the stock market or the performance of the company whose
stock it owns, the Group’s business climate can be negatively affected at a certain level.
' Damage from natural disaster and other large-scale disasters
In the event the Group sustains damages to the extent it is required to suspend its business operations due toearthquake, tsunami, typhoon and other natural disaster, fires and other accidents, or disruption in the information
system including communication networks, the Group’s business climate can be negatively affected at a certain
level.

-9-

2. Status of the Business GroupAs of June 30, 2014, the Group comprises the Company, 14 subsidiaries and 3 affiliates and engages chiefly in
automobile-related, general cargo transportation and human resource 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 inthe manufacture, distribution and sales of motor vehicles, along with businesses in industry machinery, real estate,finance and other fields in Singapore, Hong Kong, China, Malaysia and other Asian countries. Tan ChongInternational 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 KYUSHU CO., LTD., TBM CO.
LTD., AUTO CARRY CO., LTD., NISSAN SHIZUOKA WORKNET CO., LTD.,WORLD WINDOWS CO., LTD., ZERO SCM LOGISTICS (BEIJING) CO., LTD.,UTSUNOMIYA TERMINAL UNYU CO., LTD., NPF SERVICE CO., LTD.,, EIGHTZERO CO., LTD., GUANGZHOU EIGHT ZERO AUTO SERVICE CO., LTD., TC
ZERO COMPANY PRIVATE LIMTEDGeneral Cargo
Transportation

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

Human ResourcesJAPAN RELIEF CO., LTD., ASSIST WORK CO., LTD.

(Note) WORLD WINDOWS CO., LTD. was acquired in the current term.
DRIVER STAFF CO., LTD. was merged by absorption with JAPAN RELIEF CO., LTD. as the surviving company.
<Business Organization Chart>
The following business organization chart is a representation of the matters set forth above.

- 10 -

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 tocustomers 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 corporategroup 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 throughcontinuous growth and development.
(2) Business Perspective
As vehicle transportation, the Group’s main business, fluctuates according to movements in the vehicle sales
market, it is under 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 the solid corporate structure withstable 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 longterm 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 make its every best to achieve the target of consolidated sales of 100 billion yen andoperating 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 existingtransportation 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 canexceed customer expectations, the Company will strengthen the capability of special transportations other thanexisting transportations to increase sales accordingly.
" Innovations in vehicle transportation operations
One of the Company’s top priorities of tasks is to improve transportation operations from order entry throughcarrier dispatch. The carrier dispatch which was individually operated by each logistics center is going to beconcentrated in the “Area Dispatch Center” for each of the 5 areas in Japan. Transportation efficiency will be
improved by introducing “Logistics Management Operation System”. The concentration of logistics center and the
new system have been installed in designated areas other than Eastern Japan and Northern Japan districts and will
be installed completely to the remaining areas as soon as possible. By streamlining transportation works bypursuing efficient and systematic carrier dispatch and by improving transportation quality, the Company willachieve higher customer satisfaction and cost deduction and profit increases# Expansion into new business
The human resources business (providing for sure human resources to the society focusing on drivers and theireducation) has steadily expanded through strengthening new customer development and new business
implementation. The company will enhance their education and will expand business to which required special
licenses.
- 11 -

In the general cargo transportation business, the Company modified its business structure to achieve higher
revenue by the closure of unprofitable business as well as eliminations and consolidations of business facilities.
The business in this segment will be expanded maintaining the higher profit ratio.
$ Enhancement of export business and entering into ASEAN market and other Asian market
The Company has established Export Sales Department and will expand reuse business such as used car export andparts export in cooperation with the Company’s Car Selection business.
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 SCM LOGISTICS (BEIJING) CO., LTD., with new car transportation businessand pre-delivery inspection business, marked sales of 5,597 million yen and the current net profit of 107 million
yen at the end of December, 2012. The Company has also established GUANGZHOU EIGHT ZERO AUTOSERVICE CO. LTD., in January 2010, as a joint venture with Tan Chong International Group, listed company inHong Kong, to start several automobile–related businesses such as used car sales, maintenance, inspection andauction.
However, as the used car sales volume has decreased owing to the implementation of car total volume control
initiatives in Guangzhou since July, 2012, they are focusing on the vehicle beauty business to strengthen theautomobile-related business.
Moreover, the Company has planned to enter into Asian countries especially into remarkably growing ASEAN
countries with vehicle transportation and automobile-related business.
(5) Challenges faced by the Company
It is expected that oil prices will rise sharply, and that environmental measures starting with emission regulations
would become even more stringent. The domestic automobile market is becoming mature, and the environment
under which the automobile market is being placed is experiencing rapid change, with the government introducing
and abolishing economic policies. In addition, the shortage of workforce, particularly that of drivers, is becoming
increasingly acute, and as such the vehicle transportation business continues to be placed in a difficult situation. The
Group will deal with such issues as those set forth below and engage in activities to realize a dynamic growthstrategy.
Challenges and Measures! Promotion of ASEAN business
The Company has been promoting business development in ASEAN countries upon mutual cooperation with Tan
Chong International Limited, and to make this relationship even closer, the Company concluded a businessalliance 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 inthe truck body-building 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 vehicletransportation business is creating a trend towards changing the vehicle transportation into a complex mode of
distribution, including such changes as sales with lower distribution margin or sale of used cars between andamong individuals (C2C business). In addition to conventional trunk line transportation and localized transport,
the Company will work towards establishing a transportation system that would respond quickly to “point-topoint transportation”.

- 12 -

# Further cost-cutting
Cost-cutting efforts will be taken in all areas in order to respond to more stringent emission regulations, upward
trend in crude oil prices and other changes in the business environment. Operations that used to be done manually
will be systematized, 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 fromthe past, in light of the aging population and low birth rate, the prospect of training and providing humanresources in the field of medicine, nursing care and childcare will be studied.

- 13 -

4. Consolidated Financial Statements(1) Consolidated Balance Sheet(Unit: million yen)
As of June 30, 2013

As of June 30, 2014

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
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- 14 -

4,872
6,868
53
86
271
985
(41)
13,096

5,236
7,492
324
100
269
1,012
(83)
14,353

6,049(2,746)
3,302
1,173
(984)
188
417
(350)
66
8,373
2,073
(663)
1,409

13,341

5,974(2,890)
3,083
1,069
(896)
172
423
(352)
71
8,279
2,052
(459)
1,592
25
13,224

1,808
20
407
2,236

1,479
31
534
2,045

763
105
777
912
(136)
2,422
18,00031,096

989
75
523
1,031
(136)
2,483
17,754
32,107

(Unit: million yen)
As of June 30, 2013

As of June 30, 2014

Liabilities
Current liabilities
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
OthersTotal current liabilities

3,430
750
1,607
294
1,604
574
272
256
406

548
9,745

3,478
610
1,193
313
1,619
792
441
280
410
15
911
10,067

2,041
1,205
76
1,088
3,029
427


41
106
8,016
17,762

1,663
1,396
193
1,088

422
44
2,182
38
83
7,113
17,181

3,390
3,204
7,571
(152)
14,014

3,390
3,204
8,870
(152)
15,313

15
(705)
8


27
(705)
88
202

(681)

(386)

13,33331,096

14,92632,107Long-term liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Deferred tax liabilities for land revaluation
Provision for retirement benefits
Provision for retirement benefits for directors
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
incomeTotal net assets
Total liabilities and net assets- 15 -

(2) Consolidated Income Statement and Consolidated Comprehensive Income Statement(Consolidated Income Statement)(Unit: million yen)
FY12 ended June 30, 2013

FY13 ended June 30, 2014

60,07352,675
7,397
5,797
1,600

67,63058,333
9,297
6,443
2,853

3
5
19
71
26
44
169

2
5
17
69
36
61
193

86

23
109
1,660

73
32
3
109
2,937

21
21

78
78

0
18
16
46
85

8
175
1,507
767
23
790
716
716

7
3



69
9
90
2,926
1,160
255
1,415
1,510
1,510

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
OthersTotal non-operating income

Non-operating expenses
Interest expenses
Loss on disposal of supplies
OthersTotal non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of fixed assets
Total extraordinary income

Extraordinary loss
Losses on sales of fixed assets
Losses on retirement of fixed assets
Impairment losses
Losses on valuation of investment securities

Restructuring losses
Provision of allowance for sub-lease loss
OthersTotal extraordinary loss
Income before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
Income before minority interests
Net income- 16 -

(Consolidated Comprehensive Income Statement)(Unit: million yen)
FY12 ended June 30, 2013

FY13 ended June 30, 2014

716

1,510

21
22
43
760

12
80
92
1,602

760

1,602

Income before minority interests
Other comprehensive income
Unrealized gains(losses) on securities
Equity of equity-method affiliate
Total other comprehensive income
Comprehensive income(Breakdown)
Parent company portion of comprehensive
income- 17 -

(3) Consolidated Statement of Changes in Net Assets
FY12 ended June 30, 2013
(Unit: million yen)
Shareholder’s equity
Capital stock
Balance at the end of
previous period
Changes of items during
the period
Dividends fromsurplus

3,390

Capitalsurplus
3,204

7,043

Net income
Purchase of treasurystock
Net changes of items
other thanshareholder’s equity
Total changes of items
during the period
Balance at the end ofcurrent period

Total
Treasury stock shareholder’sequityRetainedearnings(152)

13,485

(188)

(188)

716

716
(0)

(0)





528

(0)

528

3,390

3,204

7,571

(152)

14,014

Accumulated other comprehensive income

Balance at the end of
previous period
Changes of items during
the period
Dividends fromsurplus

Unrealized
gains(losses) on
securities(5)

Revaluation
reserve for land

Foreign currencytranslation
adjustment

Accumulated
retirement
allowanceadjustment

Total
accumulated
othercomprehensive
income

(705)

(13)



(724)

12,761(188)

Net income
Purchase of treasurystock
Net changes of items
other thanshareholder’s equity
Total changes of items
during the period
Balance at the end ofcurrent period

Total net
assets

716
(0)
21



22



43

43

21



22



43

572

15

(705)

8



(681)

13,333- 18 -

FY13 ended June 30, 2014
(Unit: million yen)
Shareholder’s equity
Capital stock
Balance at the end of
previous period

3,390

Capitalsurplus

Total
Treasury stock shareholder’sequityRetainedearnings

3,204

7,571

(152)

14,014

Changes of items during
the period
Dividends fromsurplus

(211)

(211)

Net income

1,510

1,510

Purchase of treasurystock
Net changes of items
other thanshareholder’s equity
Total changes of items
during the period
Balance at the end ofcurrent period





1,298



1,298

3,390

3,204

8,870

(152)

15,313

Accumulated other comprehensive income

Balance at the end of
previous period
Changes of items during
the period
Dividends fromsurplus

Unrealized
gains(losses) on
securities

Revaluation
reserve for land

Foreign currencytranslation
adjustment

Accumulated
retirement
allowanceadjustment

Total
accumulated
othercomprehensive
income

15

(705)

8



(681)

13,333(211)

Net income
Purchase of treasurystock
Net changes of items
other thanshareholder’s equity
Total changes of items
during the period
Balance at the end ofcurrent period

Total net
assets

1,510

12



80

202

294

294

12



80

202

294

1,593

27

(705)

88

202

(386)

14,926- 19 -

(4) Consolidated Cash Flow Statement(Unit: million yen)
FY12 ended June 30, 2013

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

Increase (decrease) in allowance for doubtful
accounts
Increase (decrease) in allowance for bonus
Increase (decrease) in provision for retirement
benefits
Increase (decrease) in liability for retirement
benefit
Increase (decrease) in provision for director’s
retirement benefits
Increase (decrease) in allowance for sub-lease
loss
Interest and dividends income
Interest expenses
Losses (gains) on valuation of investment
securities
Losses (gains) on sales and retirement of fixed
assetsImpairment loss
Equity in earnings of affiliates
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
Income taxes refunded
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

Payments arising from acquisition of subsidiary
accompanied by change in scope of
consolidation
Payments for loans implementation
Proceeds from collection of loans receivable
OthersNet cash used in investing activities- 20 -

FY13 ended June 30, 2014

1,507
742
328

2,926
736
329

0

41

(2)

(11)

37





(534)

47

(54)



60

(8)
86

(8)
73

46



(3)

(67)

16
(26)


(36)

(293)

(518)

(65)
(54)

(108)
(57)

209

31

310

291

(8)

168

22
2,891
8
(86)
(576)

2,236

(17)
3,243
8
(78
(942)
53
2,284

(1)
2




(219)

(206)

40
(228)
(165)

310
(259)
(101)



(175)

(52)
101
(72)
(594)

(145)
196
(98)
(480)

(Unit: million yen)
FY12 ended June 30, 2013

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
Cash and cash equivalents at end of period50
450(1,582)
(0)
(269)
(187)
(1,540)
101
4,683
4,785

- 21 -

FY13 ended June 30, 2014

(140)
950
(1,742)

(295)
(212)
(1,440)
363
4,785
5,148

(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: 8
Consolidated subsidiaries:
ZERO-TRANS CO., LTD.
ZERO KYUSHU CO., LTD
KANDAKO KAIRIKU UNSO CO., LTD
TBM CO., LTD.
KYUSO COMPANY LIMTEDJAPAN RELIEF CO., LTD.
NISSAN SHIZUOKA WORKNET CO., LTD.
WORLD WINDOWS CO., LTD.
(Changes in the Scope of Consolidation)
Pursuant to acquisition of its shares, WORLD WINDOWS CO., LTD. is included in the scope of
consolidation from the current term. DRIVER STAFF CO., LTD. DRIVER STAFF CO., LTD. is excluded
from the scope of consolidation as it was merged by absorption with JAPAN RELIEF CO., LTD. as thesurviving company.
(2) Unconsolidated subsidiaries
TOYO BUSSAN CO., LTD.
ASSIST WORK CO., LTD
NPF SERVICE CO., LTD
AUTO CARRY CO., LTD.
EIGHT ZERO CO., LTD.
GUANGZHOU EIGHT ZERO AUTO SERVICE CO., LTD.
These subsidiaries are excluded from the scope of consolidation, since they are immaterial in size,
individually and in aggregate, and insignificant in terms of the Group’s total assets, net sales, net income andretained earnings
2. Information for application of the equity method(1) Number of affiliates accounted for using the equity method: 1
ZERO SCM LOGISTICS (BEIJING) CO., LTD.
(2) Unconsolidated subsidiaries and affiliates that are not accounted for using the equity method
The following companies are not accounted for using the equity method, since they are immaterial in size,
individually and in aggregate, and insignificant in terms of the Group’s total net income and retained
earnings:(Affiliate) UTSUNOMIYA TERMINAL UNYU CO. LTD.
(Unconsolidated subsidiaries) TOYO BUSSAN CO., LTD. and others(3) Accounting periods of the affiliates accounted for using the equity method are different from that of theCompany and those companies are consolidated by using their financial statements based on their respective
accounting period.

- 22 -

3. Information for different balance sheet date of consolidated subsidiaries
The balance sheet date is March 31 for the following subsidiaries; KANDAKO KAIRIKU UNSO CO., LTD.,TBM CO., LTD., KYUSO CO., LTD AND NISSAN SHIZUOKA WORKNET CO., LTD. The balance sheet
date is April 30 for WORLD WINDOWS CO., LTD. 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 madeto their financial statements to reflect any significant transactions that occurred during the period prior to theCompany’s balance sheet date.
The balance sheet dates of the financial year for ZERO-TRANS CO., LTD., ZERO KYUSHU CO., LTD. and JAPANRELIEF CO., LTD. are the same as the Company’s balance sheet date.

(Changes in the Accounting Policy)(Application of the Accounting Standard for Retirement Benefits, etc.)
The Accounting Standard for Retirement Benefits (ASBJ Statement No.26 of May 17, 2012; hereinafterreferred to as the “Accounting Standard”) and the Guidance on Accounting Standard for Retirement Benefits(ASBJ Guidance No.25 of May 17, 2012; hereinafter referred to as the “Guidance”) is applied from the endof the current term (provided, however, that the provisions set forth in Section 35 of the AccountingStandard and Article 67 of the Guidance shall be excluded), and the method used is changed to post theamount of retirement asset from which the retirement benefit obligation is excluded as liability for retirement
benefit. Unrealized actuarial differences and unrealized past service costs is posted as liability for retirement
benefit. The Accounting Standard is applied based on the transitional treatment prescribed in Section 37 of
the Accounting Standard, and at the end of the current term, the amount affected by this change is reflectedin “Accumulated retirement allowance adjustment” under accumulated other comprehensive income. As aresult, liability for retirement benefit in the amount of 2,182 million yen is posted at the end of the current
term. Accumulated other comprehensive income has increased by 202 million yen.
The effect on per share information is set forth in the relevant section.
(Accounting Standards Not Applied)((

Accounting Standard for Retirement Benefits (ASBJ Statement No.26 of May 17, 2012)
Guidance on Accounting Standard for Retirement Benefits (ASBJ Guidance No.25 of May 17,
2012)

1. Overview
There was amendments regarding the treatment of actuarial gains and losses and past service costs thatare yet to be recognized, method of determination of retirement benefit obligation and service costs, andenhancement of disclosures.
2. Scheduled date of application
Amendments in the method of determination of retirement benefit obligation and service costs will beapplied from the start of FY2014.
As the relevant accounting standard includes transitional treatments, it will not be applied retroactively
to past consolidated financial statements.
3. Effect of the application of the relevant accounting standard
The effect of the amendment in the method of determination of retirement benefit obligation and service
costs on the consolidated financial statement is now being evaluated.

- 23 -

(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 andwhose 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 andservice attributes, the Group's reportable segments are automobile-related business, general cargotransportation business and human resources business.
Main services for each reportable segment
Segment

Main services

Automobile-related business

Vehicle transport, maintenance, used car auctions

General cargo transportation
business

General consumer goods shipping, home electronics shipping, cargohandling of coal, slag, etc., warehouse rental

Human resources business

Driver dispatch, personal vehicle operation management

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 eachbusiness segment correspond to operating income (before goodwill amortization).
Inter-segment sales and transfer are based on prevailing market prices.

- 24 -

3. Information on Sales, Income or Loss, Assets, Liabilities and Other Items by Reportable Segment
FY12 ended June 30, 2013
(Unit: million yen)
Automobile-relatedbusiness

General cargotransportation
business

Human
resourcesbusiness

44,759

6,196

9,117

27

40

44,787

Segment income
Segment assets

Adjustments(Note 1)

Consolidated
statements ofincome(Note 2)60,073



60,073

269

338

(338)



6,236

9,387

60,411(338)

60,073

2,417

337

434

3,188

(1,588)1,600

15,245

6,452

2,339

24,0387,057

31,096

478

217

17

712

29

742

Total

Sales
Net sales to externalcustomers
Inter-segment net sales or transfers

Total

Other items
Depreciation

Increase in property, plant andequipment and intangible
1,058
190
53
1,303
86
1,390
assets
Note 1. Adjustment amounts are as follows:(1) The adjustment amount of (1,588 million yen) in segment income included group-wide
expenses of (1,260 million yen), goodwill amortization of (328 million yen) and inter-segment
eliminations of (1 million 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 reportablesegment.
(3) Other item adjustments are related to group-wide assets that are not allocated to eachreportable segment.
Note 2. Segment income is adjusted to reconcile with the operating income of the consolidated financial
statements.

- 25 -

FY13 ended June 30, 2014
(Unit: million yen)
Automobile-relatedbusiness

General cargotransportation
business

Human
resourcesbusiness

52,315

4,856

10,459448952,359Segment income
Segment assets

Adjustments(Note 1)

Consolidated
statements ofincome(Note 2)

67,630

67,630

409

543

(543)



4,945

10,86868,173(543)

67,630

3,235

810

561

4,608

(1,754)

2,853

15,957

6,695

2,391

25,044

7,063

32,107

450

203

22

676

59

736

Total

Sales
Net sales to externalcustomers
Inter-segment net sales or transfers

Total

Other items
Depreciation

Increase in property, plant andequipment and intangible
846
112
74
1,033
238
1,271
assets
Note 1. Adjustment amounts are as follows:(1) The adjustment amount of (1,754 million yen) in segment income included group-wide
expenses of (1,424 million yen), goodwill amortization of (329 million yen) and inter-segment
eliminations of (0 million 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 reportablesegment.
(3) Other item adjustments are related to group-wide assets that are not allocated to eachreportable segment.
Note 2. Segment income is adjusted to reconcile with the operating income of the consolidated financial
statements.
b. Related information
FY12 ended June 30, 2013
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(2) 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

Nissan Motor Co., Ltd.

Relevant segment
14,751- 26 -

Automobile-related businessFY13 ended June 30, 2014
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(2) 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

Nissan Motor Co., Ltd.

Relevant segment
16,654

Automobile-related businessc. Information on impairment losses on fixed assets by reportable segments
FY12 ended June 30, 2013
(Unit: million yen)
Automobilerelated businessImpairment
lossesGeneral cargotransportation
business16

FY13 ended June 30, 2014
Not applicable.

- 27 -

Human resourcesbusiness

Group-wide/
Elimination





Total
16

d. Information on amortization and unamortized balance of goodwill by reportable segments
FY12 ended June 30, 2013
(Unit: million yen)
Automobilerelated business

Amortization
during the year
Balance at theend of year

General cargotransportation
business

Human resourcesbusiness

Group-wide/
Elimination

Total





328



328





1,808



1,808

Human resourcesbusiness

Group-wide/
Elimination

FY13 ended June 30, 2014
(Unit: million yen)
Automobilerelated business

Amortization
during the year
Balance at theend of year

General cargotransportation
business

Total

0



328



329





1,479



1,479

e. Information on gain on negative goodwill by reportable segments
FY12 ended June 30, 2013
Not applicable.
FY13 ended June 30, 2014
Not applicable.

- 28 -

(Per Share Information)
2013
Year ended June 30, 20132014
Year ended June 30, 2014

Net assets per share

780.07 yen
873.28 yen
41.92 yen88.38 yen
Note 1. Diluted net income per share amounts are not presented since there are no shares existing that have dilutive
effects.
Note 2. As set forth in “Changes in Accounting Policy”, the Accounting Standard for Retirement Benefits is applied
the treatment transitional treatment prescribed under Section 37 of the Accounting Standard for Retirement
Benefits is followed. As a result, net assets attributable to common stock increased by 11.85 yen.
Note 3. The basis for calculation of net assets per share is as follows:

Basic net income per share

2013
Year ended June 30, 20132014
Year ended June 30, 2014

Total net assets (millions of yen)

13,333

14,926

Deductions from total net assetsNet assets attributable to common stock (millions ofyen)

13,333

14,926

Number of common stock at the end of the year
(thousands of shares)

17,092

17,092

Note 4. The basis for calculation of basic net income per share is as follows:
2013
Year ended June 30, 20132014
Year ended June 30, 2014

Net income (Millions of yen)

716

1,510

Net income not attributable to commonshareholders (Millions of yen)

Net income attributable to common shareholders(Millions of yen)

716

1,510

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

17,092

17,092

Basic net income per share

Stock options (610,200 shares) based   ──────
Shares excluded from the computation of diluted net
income per share, because they do not have dilutive
effects

on the resolution of the extraordinary
meeting of shareholders on June 23,
2003 are forfeited as of the expirationof the exercise period on June 22,
2003.

(Subsequent Events)
Not applicable.

- 29 -

5. Financial Statements(1) Balance Sheets(Millions of yen)
2013

2014

As of June 30, 2013

As of June 30, 2014ASSETS
Current assets
Cash and deposits
Notes receivable-trade
Accounts receivable-trade
Merchandise
Supplies
Prepaid expenses
Deferred tax assets
Short-term loans receivable
Accounts receivable
OthersAllowance for doubtful accounts
Total current assets

Fixed assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net

Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net

VehiclesAccumulated depreciation
Vehicles, net

Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation
Leased assets, net

Construction in progress
Total property, plant and equipment
Intangible assets
SoftwareLeased assets
OthersTotal intangible assets- 30 -

3,072
174
5,113
53
76
248
190
63
607
35
(26)
9,609

3,294
170
5,163
104
92
232
171
33
654
31
(62)
9,885

3,939
(1,165)
2,773
811
(672)
139
258
(206)
52
122
(105)
16
319
(272)
46
6,716
1,645
(543)
1,102

10,846

3,968(1,334)
2,633
861
(679)
181
252
(209)
43
123
(102)
21
319
(284)
34
6,716
1,594
(347)
1,246
23
10,901

356
19
16
393

471
31
16
519

(Millions of yen)
2013

2014

As of June 30, 2013

As of June 30, 2014

Investments and other assets
Investment securities
Investments in subsidiaries and affiliates
Long-term loans receivable
Long-term loans receivable from employees,
netLong-term prepaid expenses
Deferred tax assets
Insurance funds
Leases and guarantee deposits
OthersAllowance for doubtful accounts
Total investments and other assets

Total fixed assets
Total assets
Liabilities
Current liabilities
Accounts payable-trade
Current portion of long-term loans payable
Lease obligations
Accounts payable-otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Deposits received
Allowance for bonuses
OthersTotal current liabilities
Current portion of long-term loans payable

275
4,125
81

298
4,691
48

18

25

9
617
120
284
170
(119)
5,585
16,82526,434

63
362
120
286
205
(110)
5,991
17,412
27,298

3,488
1,115
203
413
658
365
72
1,147
269

56
7,791

3,400
755
242
636
563
408
125
1,763
267
15
137
8,316

1,518
986
1,088
2,642
342

33
79
6,691
14,482

1,362
1,120
1,088
2,109
331
44
30
79
6,168
14,484Long-term liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities for land revaluation
Provision for retirement benefits
Provision for directors’ retirement benefits
Asset retirement obligations
OthersTotal Long-term liabilities
Long-term loans payable

Total liabilities- 31 -

(Unit: million yen)
2013

2014

As of June 30, 2013

As of June 30, 2014

Net Assets
Shareholders’ equity
Capital stock
Capital surplus
Capital reserve
Total capital surplus

3,390

3,390

3,204
3,204

3,204
3,204

179

179

123

123

781

747

3,267
1,842
6,193
(152)
12,635

3,267
2,723
7,040
(152)
13,483

14
(698)
(683)
11,952
26,434

29
(698)
(668)
12,81427,298Retained earnings
Legal reserve
Other retained earnings
Accident loss reserve
Reserve for advanced depreciation of fixed
assetsSpecial reserve fundRetained earnings carried forward

Total retained earnings
Treasury stock
Total shareholders’ equity
Total valuation and translation adjustments
Unrealized gains(losses) on securities
Revaluation reserve for land
Total valuation and translation adjustments

Total net assets
Total liabilities and net assets- 32 -

(2) Statements of Income(Unit: million yen)
2013
Year ended June 30, 2013
Sales
Cost of sales

Personal expenses
Salaries and allowances
Bonuses
Provision for allowance for bonuses
Retirement benefit expenses
Welfare expenses

2014
Year ended June 30, 2014

46,65551,064

3,705
217
198
188
883

3,728
201
201
(140)
868

963
30,503
1,750
451
3,472
42,335
4,319

1,075
33,034
1,626
422
4,495
45,513
5,551

1,619
52
70
98
38
431
211
15
32
860
3,429
889

1,784
71
65
(64)
36
477
251
37
34
1,046
3,740
1,810

2
124
15
69
43
256

1
125
17
67
36
249

58

3
61
1,085

48
32
1
82
1,977

Other expenses
Fuel expenses
Subcontract expenses
Rent expenses
Depreciation
OthersTotal cost of sales
Gross profit
Selling, general and administrative expenses
Salaries and allowances
Bonuses
Provision for allowance of bonuses
Retirement benefit expenses
Provision for directors’ retirement benefits
Welfare expenses
Information processing expenses
Provision of allowance for doubtful accounts
Depreciation
OthersTotal selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Rent income on fixed assets
Commission fee
OthersTotal non-operating income

Non-operating expenses
Interest expenses
Loss on disposal of supplies
OthersTotal non-operating expenses

Ordinary income- 33 -

(Unit: million yen)
2013
Year ended June 30, 20132014
Year ended June 30, 2014

Extraordinary gains
Gain on sales of fixed assets
Total extraordinary gains

5
5

1
1


3
0

7
2


45



85

6
141
949
364
30
394
554


69

79
1,899
574
265
839
1,059

Extraordinary losses
Losses on sales of fixed assets
Losses on retirement of fixed assets
Losses on valuation of investment securities
Losses on valuation of stocks of subsidiaries andaffiliates
Restructuring losses
Provision of allowance for sub-lease loss
OthersTotal extraordinary losses
Income before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
Net income- 34 -

(3) Statements of Changes in Net Assets
FY12 ended June 30, 2013
(Unit: million yen)
Shareholders’ equity
CapitalsurplusRetained earnings
Other retained earnings

Capital stock

Balance at the
beginning of year
Changes during the year
Dividends
Reversal of reserve
for advanced
depreciation of fixed
assets
Reversal of reserve
for special account foradvanced depreciationof fixed assets
Net income
Purchase of treasurystock
Net changes of items
other thanshareholders’ equity
Net changes during theyear
Balance at the end of
year

3,390

Capitalsurplus

Legal reserve

3,204

Accident
loss reserve

Reserve foradvanceddepreciationof fixed
assets

123

817

179

Reserve for
specialaccount forSpecialadvancedreserve funddepreciationof fixed
assets9

3,267

Retainedearnings
carriedforward

1,429

(188)

(35)

35

(9)

9

554









(35)

(9)



412

3,390

3,204

179

123

781



3,267

1,842

- 35 -

Shareholders’ equity
Treasurystock

Balance at the
beginning of year
Changes during the year
Dividends
Reversal of reserve
for advanced
depreciation of fixed
assets
Reversal of reserve
for special account foradvanced depreciationof fixed assets
Net income
Purchase of treasurystock
Net changes of items
other than those inshareholders’ equity
Net changes during theyear
Balance at the end of
year

(152)

(0)

Valuation and translation adjustments

Total
Unrealized
shareholders’ gains(losses)
on securities
equity12,269

Revaluation
reserve for
land

Total
valuationandtranslation
adjustments

(698)

(700)

(2)

Total net
assets

11,568

(188)

(188)

554

554

(0)

(0)

17



17

17

(0)

366

17



17

383

(152)

12,635

14

(698)

(683)

11,952- 36 -

FY13 ended June 30, 2014
(Unit: million yen)
Shareholders’ equity
CapitalsurplusRetained earnings
Other retained earnings

Capital stock

Balance at the
beginning of year
Changes during the year

3,390

Capitalsurplus3,204

Legal reserve

Accident
loss reserve

Reserve foradvanceddepreciationof fixed
assets

123

781

179

Reserve for
specialaccount forSpecialadvancedreserve funddepreciationof fixed
assets

3,267

Dividends

1,842

(211)

Provision of reserve
for advanced
depreciation of fixed
assets
Reversal of reserve
for advanced
depreciation of fixed
assets
Reversal of reserve
for special account foradvanced depreciationof fixed assets
Net income
Net changes of items
other than those inshareholders’ equity
Net changes during theyear
Balance at the end ofyear

Retainedearnings
carriedforward

1

(1)

(35)

35

1,059

(33)
3,390

3,204

179

- 37 -

123

747

881


3,267

2,723

Shareholders’ equity
Treasurystock

Balance at the
beginning of year
Changes during the year

Valuation and translation adjustments

Total
Unrealized
shareholders’ gains(losses)
on securities
equity(152)

12,635

Revaluation
reserve for
land

Total
valuationandtranslation
adjustments

(698)

(683)

14

Total net
assets11,952

Dividends

(211)

(211)

Provision of reserve
for advanced
depreciation of fixed
assets
Reversal of reserve
for advanced
depreciation of fixed
assets
Reversal of reserve
for special account foradvanced depreciationof fixed assets
Net income

1,059

1,059

Net changes of items
other than those inshareholders’ equity
Net changes during theyear
Balance at the end of
year

(152)

14

14

14

847

14

14

862

13,48329(668)

12,814(4) Notes to Consolidated Financial Statements(Note on Going Concern Assumption)
Not applicable.

- 38 -(698)