Financial Results for the Fiscal Year Ended June 30, 2015
August 7, 2015
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:
Toshihiro , Takahashi Operating officer,
Tel: 044-520-0106
Corporate Planning Department
Date of Annual Shareholders’ Meeting:
September 29, 2015
Date to begin payment of dividend:
September 30, 2015
Date of financial report submission
September 30, 2015
Additional materials for the financial results for FY2014
None
Briefing session for the financial results for FY2014
None

1. Consolidated Financial Results for the Fiscal Year Ended June 30, 2015
(From July 1, 2014 to June 30, 2015)(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

77,247

14.2

3,662

28.3

3,772

28.4

1,878

24.4

FY2013

67,630

12.6

2,853

78.3

2,937

76.9

1,510

110.8

(Note)

Comprehensive income:

FY2014FY20132,111 million yen (31.8%)
1,602 million yen (110.8%)

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







FY2014109.90FY2013

88.38(Ref.)

Equity in net income of affiliates:

FY2014: 27 million yen

11.9

11.2

4.7

10.7

9.3

4.2

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

Net assets

Shareholders’ equity
ratio

Net assets per share

Million yen

Million yen

Yen

FY2014FY2013(Ref.)

Shareholders’ equity:

35,145

16,605

32,107

14,926

As ofJune 30, 2015: 16,605 million yen

47.2

971.51

46.5

873.28

As of June 30, 2014: 14,926 million yen(3) Consolidated Cash Flows!

%FY2014

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

FY20142,003-1,016

-383

5,856

FY2013

2,284

-480

-1,4405,148

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
8.00

-

14.10
19.50

22.10
27.50

-

10.00

-

23.60

33.60

FY2013
FY2014
Forecast
for
FY2015

At end of
4Q

Annualtotal

Annualtotal
amount ofdividend
Million
yen
377
470

Dividend
payout ratio(Consolidated)

Dividend ratioof net assets(Consolidated)

%

%

25.0
25.0

2.7
3.0

25.0

3. Consolidated Forecasts for FY2015 (July 1, 2015 through June 30, 2016)
Percentages shown below for whole FY2015 are the rates of increase or decrease compared with the previous year.

Sales
Millionyen
Whole FY2015

76,400%-1.1

Operating income

Ordinary income

MillionMillion

yen
3,850

%
5.1

yen
3,930

%
4.2

Net income per share

Net income
Millionyen
2,300-basic
%

Yen

22.4

134.56*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 statements
Changes in accordance with the revision of accounting standards and others: Yes
Changes other than above: Yes
Changes in accounting estimates: Yes
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:
FY2014: 17,560,242
FY2013: 17,560,242
Number of repurchased shares at the end of each period:
FY2014: 467,732
FY2013: 467,711
Average number of issued shares during the fiscal year (excluding treasury shares)
FY2014: 17,092,510
FY2013: 17,092,531!

(Ref.) Unconsolidated Financial Results for the Fiscal Year Ended June 30, 2015
1. Unconsolidated Financial Results for the Fiscal Year Ended June 30, 2015 (From July 1, 2014 toJune 30, 2015)(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%

FY201454,242

6.2

2,382

31.6

2,595

31.3

1,545

45.9

FY201351,064

9.5

1,810

103.4

1,977

82.2

1,059

91.2

Earnings per share–basicEarnings per share-diluted

FY201490.45 yen-

FY201362.01 yen-

(2Unconsolidated Financial Position
Total assets

Net assets

Shareholders’equity ratio

Net assets per
share

Million yen

Million yen%

yen

FY201429,76813,881

46.6

812.13

FY201327,29812,81446.9

749.73(Ref.)

Shareholders’ equity:
As of June 30, 2015: 13,881 million yen

As of June 30, 2014: 12,814 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.

!

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. 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)(Accounting Standards Not Applied)(Segment Information)(Per Share Information)(Subsequent Events)
6. 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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35
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38

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 economic policy and the Bank of Japan’squantitative and qualitative easy monetary policy. On the other hand, recovery trend is proceeding at a
gradual pace showing signs of
the consumption tax rate hike and concern that commodity prices may risedue to the weaker yen.
In the automobile industry, Japanese automakers’ new vehicle sales in the domestic market continued tounderperform at 92.3% year-on-year (the Japan Automobile Manufacturers Association’s statistical data),
indicating that the chilling effect of the increase in the consumption tax on the consumer mind is persisting.
Based on vehicle types, the mini-vehicle market maintained the high level equal to that of the previous year
until April 2015, when taxes on these vehicles were increased, after which the market downturned sharply.
Registered vehicles which comprise the core market also failed to perform robustly, and decreased
significantly as a reaction to last year, when the market was at a high level due to last-minute rise in demandthat occurred before the consumption tax increase. While further correction to the strong yen createdconditions favorable to exports, number of new vehicle exports was 98.1% year-on-year, due to the decreaseof exports to North America, our largest market. Likewise the used vehicle market also showed a downward
trend as a result of a weaker consumer mindset. A breakdown of this shows that the number of registration ofused vehicles in Japan underperformed, being 96.2% year-on-year. On the other hand, export of used
vehicles continued an upward trend, posting 104.5% year-on-year.
Against this backdrop, with regard to the Company’s main segment, the automobile-related business, sales
from Nissan-related transportation dropped due to decrease in the number of new vehicles sold by Nissan
Motor Co., our major customer, but due to the success in capturing new transportation-related demand, andour used car export business, we posted an year-on-year increase in overall sales of automobile-related
business. With regard to our human resources business, through active sales activities and strengthening ofsales system, we strongly promoted activities to cultivate our clientele, sales have increased year-on-year.
With regard to the general cargo business, sales have increased year-on-year.

[No. of Motor Vehicles Related to Domestic Distribution]
Domestic Sales

July 2013-June 2014

(Unit: Units)
July 2014-June 2015

Year-on-year Change(%)

New vehicles*1

5,669,674

5,233,716

92.3%

*1

(718,433)(610,060)(84.9%)*2291,258

290,870

99.9%

Passenger cars

*3

3,868,631

3,701,837

95.7%

Mini-cars*4

3,149,363

3,052,618

96.9%

6,754,455
248,37296.2%*37,017,994
300,431

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

Total of used cars
De-registered vehicle

July 2013-June 2014

Export volume (in units)

July 2014-June 2015

82.7%
Year-on-year Change(%)

New vehicles
Domestic automakers*14,560,150

4,475,390

98.1%

Used passenger vehicles*5

1,394,361

1,457,422

104.5%*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 2013-June 2014

Year-on-year Change(%)

July 2014-June 2015

Light oil

*6

140

131

93.6%

Regular gasoline

*6

161

152

94.4%

*6 Calculated using the Resources and Energy Agency’s statistics (The fuel that our company uses for transportation services is mainly light oil.)

As a result of these measures, our group’s financial results for the current fiscal year to June 30, 2015 showedsales of 77,247 million yen (114.2% year-on-year) and operating income of 3,662 million yen ( 128.3% yearon-year), thus posting year-on-year increases in both sales and operating income). Also, ordinary income rose
to 3,772 million yen (128.4% year-on-year), and net income jumped to 1,878 million yen ( 124.4% year-onyear).
Incidentally, pursuant to the change in accounting period of a number of our consolidated subsidiaries fromMarch 31 (April 30 in the case of a number of our subsidiaries) to more appropriately disclose and manage ourgroup’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 to June 30, 2015 (14 months from May 1, 2014 toJune 30, 2015 in the case of a number of our subsidiaries). Sales for the 3-month period from April 1, 2014 (2month period from May 1, 2014 in the case of a number of our subsidiaries) posted by the consolidated
subsidiaries which changed their accounting period were 1,893 million yen, their operating income was 44
million yen, ordinary income was 50 million yen, and net income was 32 million yen.
" Business Performance by Segment<Automobile-related Business>
In this business segment, Nissan Motor Company, our major customer, posted sluggish sales of 610,060 units(84.9% year-on-year) of new vehicles in Japan. New vehicles made by other Japanese automakers, imported cars
and used cars also posted year-on-year decreases in domestic sales. In response to these market downturns, we
focused our efforts in obtaining new transport services and actively pursued our used car export business. We also
implemented measures to win orders from foreign automakers for the business of new vehicle maintenance/predelivery inspection and vehicle storage, thereby providing services with high added value and at the same timefurthering measures to increase our sales.
On the back of these factors, this segment’s sales rose to 59,423 million yen (113.5% year-on-year). In pursuit ofhigher 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 4,081 million yen (126.1% year-on-year). Incidentally, the foregoing includes
effect of accounting change from the change in the accounting period for certain consolidated subsidiaries, in theamount of sales of 888 million yen and segment profit of 9 million yen.
<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. Under these circumstances, concerning our group’s transportation service toand 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.
As a result, this segment’s sales rose to 12,327 million yen (113.4% year-on-year), and segment income increased
from the prior fiscal year to 568 million yen (101.2% year on year). Incidentally, the foregoing has not been
affected the accounting change from the change in the accounting period for certain consolidated subsidiaries.
<General Cargo Transportation Business>
In this segment, we continued to promote obtaining new order from existed customers and new customers. At thesame time, the consolidation and abolition of business facilities, we succeeded in increasing the profitability ofthis 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., another ZERO subsidiary,
continued to its cost/expense structural reform and the winning of new businesses.
As a result of the above, this segment posted sales of 6,174 million yen (124.9% year-on-year) and segment
income of 868 million yen (107.1% year-on-year). Incidentally, the foregoing includes effect of accounting-3-

change from the change in the accounting 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 bysegment, they are recognized as “Adjustments” items as listed in “Segment Information” in “4. “Consolidated
Financial Statements” and amounted to 1,855 million yen.
# Forecast for the Next Fiscal YearIn the next consolidated fiscal year, despite of uncertain of foreign economy, 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 toreductions in demand Also, in the transportation industry, we will continue to face a severe businessenvironment due mainly to growing labor shortages, rising fuel prices and the need to secure a higher level ofsafety.
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)
Sales
Results for the fiscal year
ended June 30, 2015
Forecasts for the fiscal year
ending June 30, 2016
Increase-decrease rate %Operating income

Ordinary income

Net income

77,247 million yen

3,662 million yen

3,772 million yen

1,878 million yen

76,400 million yen

3,850 million yen

3,930 million yen

2,300 million yen

5.1%

4.2%

22.4%

(1.1%)(2) Analysis of the Financial Condition! Assets, Liabilities and Net Assets(Assets)
Compared to the end of the previous term, current assets increased by 2,537 million yen (17.7%) to 16,890
million yen. This is chiefly due to increase of notes and accounts receivable by 955 million yen and cash anddeposits by 815 million yen.
Compared to the end of the previous term, fixed assets increased by 500 million yen (2.8%) to 18,255 million
yen. This is chiefly due to the fact that although there was depreciation of fixed assets, investment securities
increased by 478 million yen, lease assets of property, plant and equipment by 466 million yen, and buildings
and structures by 205 million yen.
As a result of the foregoing, compared to the end of the previous term, total assets increased by 3,038 million
yen (9.5%) to 35,145 million yen.
(Liabilities)
Compared to the end of the previous term, current liabilities increased by 1,038 million yen (10.3%) to 11,106
million yen. This is chiefly due to the fact that although notes and accounts payable-trade decreased by 266
million yen, short-term loans payable increased by 270 million yen, and accrued consumption taxes by 208
million yen.
Compared to the end of the previous term, long-term liabilities increased by 320 million yen (4.5%) to 7,433
million yen. This is chiefly due to the fact that lease obligations increased by 357 million yen provided to theprevious term’s provision for lease obligations.
-4-As a result of the foregoing, compared to the end of the previous term, liabilities increased by 1,359 million yen(7.9%) to 18,540 million yen.
(Net Assets)
Compared to the end of the previous term, net assets increased by 1,679 million yen (11.2%) to 16,605 million
yen. This is chiefly due to increase of retained earnings due to posting of net income by 1,446 million yen.
" Cash Flow Situation
At the end of the current term, cash and cash equivalents (hereinafter referred to as “Funds”) increased by 707
million yen compared to the end of the previous term, to 5,856 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 2,003 million yen (12.3% decrease from the previous term).
Income was provided mainly by 3,458 million yen in income before income taxes, 922 million yen in
depreciation, 347 million yen in amortization of goodwill, and 216 million yen in increase in other current
liabilities. Payments were made mainly as 1,449 million yen in income taxes paid, increase of 775 million yen
in notes and accounts receivable-trade, and increase of 469 million yen in inventories.
(Cash flow from investment activities)
Funds used in investment activities were 1,016 million yen (111.7% increase from the previous term).
Income was provided mainly by 316 million yen as proceeds from collection of loans receivable. Payments
were made mainly as 625 million yen in payments for purchases of property, plant and equipment, 392 million
yen for purchase of investment securities, and 323 million yen in payments for loans implementation.
(Cash flow from financing activities)
Funds used in financing activities were 383 million yen (73.4% decrease from the previous term).
Payments were made mainly as 355 million yen in payment of lease obligation repayments, and 377 million yen
in cash dividends paid.
Change in the Group’s Cash-flow Related Indicators
FY2011Equity ratio (%)
42.3
Equity ratio at market value basis (%)
Cash flow to interest bearing debt ratio(per annum)Interest coverage ratio (multiples)

FY2012FY2013

FY2014

18.1

42.9
18.7

46.5
37.1

47.2
40.1

2.0

2.0

1.5

2.0

26.3

25.7

29.1

26.7

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.

-5-

(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, thefollowing 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

FY2014109.90 yen

27.50 yen

8.00 yen

19.50 yen

FY2015134.56 yen

33.60 yen

10.00yen

23.60 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 2014 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. Although the degree of dependence of sales on them has decreased in fiscal 2014, it nonethelessremains high, and in case there are any changes to trade conditions between the Company and them, our businessclimate can be negatively affected at a certain level.
FY2012

Party
Nissan Motor
Nissan Motor Group *1

FY2013

FY2014

Million yen

Percentage
in grosssales

Million yen

Percentage
in grosssales

Million yen

Percentage
in grosssales

14,751

24.6%

16,654

24.6%

14,67319.0%

20,10533.5%

22,58733.4%

20,07526.0%(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-6-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, 2015. It is prospected to continue to renew thecontract after April, 2015 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.
" 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

FY2013
FY2014

Sales (million yen)
Second half

Total

31,981(47.3%)

35,648(52.7%)

67,630(100.0%)35,158(45.5%)

42,088(54.5%)

77,247(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 and-7-with 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
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 Industrial Safety and Health Act, is going to put into operation, to make mental healthcheck-up mandatory. In the current situation, we are not against these laws, Taking the foregoing into
consideration, depending on which direction the examination of strengthening regulations and application of thelaw 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. And following amended
additional law also effect from September, 2015. The recent amendments include the job security measurement
mandatory, and the limitation for the dispatch period by individual basis and by the office basis. 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, theGroup’s business climate can be negatively affected at a certain level.
$ Increase of fuel prices
In the event light oil, gasoline and other fuel prices increase sharply and if the increased transportation costs
cannot be absorbed by corporate endeavor or reflected on the transportation fees (including fuel surcharges), theGroup’s business 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, coupled-8-

with the steep rise in labor costs as the economy recovers, 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, 2015, the Group comprises the Company, 13 subsidiaries and 8 affiliates and engages chiefly in
automobile-related, 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 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, Thailand 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., SHINWA
RIKUSOU INC., EIGHT ZERO CO., LTD., GUANGZHOU EIGHT ZERO AUTOSERVICE CO., LTD., TC ZERO COMPANY PRIVATE LIMTED and 3 othercompanies

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

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.

- 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 andthe new system have been installed in designated areas other than Eastern Japan and Northern Japan districts andwill 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 reduction 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 the Export Sales Department this fiscal year to expand its expert business, and in
the future we will expand reuse business such as used car export and parts export in cooperation with theCompany’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., 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 business.
(5) Challenges faced by the Company
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.
Furthermore, it is expected that oil prices will rise sharply in the middle or long term, and that environmental
measures starting with emission regulations would become even more stringent. In addition, the shortage ofworkforce, 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 growth strategy.
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”.
# 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 be systematized, operations overlapping among affiliated companies will be reviewed to streamline
business operations. And at the same time, we keep watching and strengthening business profitability throughreviewing company structure.
$ Development of the human resource business- 12 -

In 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.

4.

Basic Views on Selection of Accounting Standards
Our group will pursue examination of application of IFRS based upon progress of our overseas businessdevelopment, our parent company’s(Tan Chong International Limited Group )policies, and trends both within Japanand overseas.

- 13 -

5. Consolidated Financial Statements(1) Consolidated Balance Sheet(Unit: million yen)
As of June 30, 2014

As of June 30, 2015

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- 14 -

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

6,051
8,448
812
82
262
1,320
(87)
16,8905,974(2,890)
3,083
1,069
(896)
172
423
(352)
71
8,279
2,052
(459)
1,592
25
13,224

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

1,479
31
534
2,045

1,227
42
493
1,763

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

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

(Unit: million yen)
As of June 30, 2014

As of June 30, 2015

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

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

3,212
880
1,335
427
1,871
948
649
294
435
15
1,036
11,106

1,663
1,396
193
1,088
422
44
2,182
38
83
7,113
17,181

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

3,390
3,204
8,870
(152)
15,3133,390
3,204
10,317(152)
16,759

27
(705)
88
202
(386)
14,92632,107

54
(603)
147
247
(154)
16,60535,145Long-term liabilities
Long-term loans payable
Lease obligations
Deferred tax liabilities
Deferred tax liabilities for land revaluation
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 income
Total net assets

Total liabilities and net assets- 15 -

(2) Consolidated Income Statement and Consolidated Comprehensive Income Statement(Consolidated Income Statement)(Unit: million yen)
FY13 ended June 30, 2014

FY14 ended June 30, 2015

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

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

2
5
17
69
36

61
193

6
7
9
60
27
33
80
225

73
32

3
109
2,937

74

30
11
115
3,772

78

78

2
62
64

7
3

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

1
29
348


378
3,458
1,583
(4)
1,579
1,878
1,878

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

Gains from disposal of supplies
OthersTotal non-operating income

Non-operating expenses
Interest expenses
Loss on disposal of supplies
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
Provision of allowance for sub-lease loss

OthersTotal extraordinary loss
Income before income taxes
Income taxes-current
Income taxes-deferred
Total income tax
Income before minority interests
Net income- 16 -

(Consolidated Comprehensive Income Statement)(Unit: million yen)
FY13 ended June 30, 2014

FY14 ended June 30, 2015

1,510

1,878

12

80

92
1,602

26
45
59
101
233
2,111

1,602

2,111

Income before minority interests
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- 17 -

(3) Consolidated Statement of Changes in Net Assets
FY13 ended June 30, 2014
(Unit: million yen)
Shareholder’s equity

Balance at the end of
previous period
Cumulative effect ofchange in accounting
policyBalance at the end of
previous period reflecting
the change in accounting
policyChanges of items during
the period

Capital stock

Capital surplus

3,390

3,204

3,390

3,204

Treasury stock

Total
shareholder’sequity

7,571

(152)

14,014

7,571

(152)

14,014Retainedearnings

Dividends from surplus

(211)

(211)

Net income

1,510

1,510

Change in the scope of
consolidation
Purchase of treasurystock
Net changes of items
other than shareholder’sequityTotal 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
Cumulative effect ofchange in accounting
policyBalance at the end of
previous period reflecting
the change in accounting
policyChanges of items during
the period

Unrealized
gains(losses)
on securities

Revaluation
reserve for land

15

(705)

Foreigncurrencytranslation
adjustment

Accumulated
retirement
allowanceadjustment
8



Total
accumulated
Total net assets
othercomprehensiv
e income(681)

13,333


15

(705)

8



(681)

13,333

Dividends from surplus(211)

Net income

1,510

Change in the scope of
consolidation
Purchase of treasurystock
Net changes of items
other than shareholder’sequityTotal changes of items
during the period
Balance at the end ofcurrent period



12



80

202

294

294

12



80

202

294

1,593

27

(705)

88

202

(386)

14,926- 18 -

FY14 ended June 30, 2015
(Unit: million yen)
Shareholder’s equity

Balance at the end of
previous period
Cumulative effect ofchange in accounting
policyBalance at the end of
previous period reflecting
the change in accounting
policyChanges of items during
the period

Capital 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

1,878

1,878

101

101

Change in the scope of
consolidation
Purchase of treasurystock
Net changes of items
other than shareholder’sequityTotal changes of items
during the period
Balance at the end ofcurrent period

(0)

(0)





1,602

(0)

1,602

3,390

3,204

10,317(152)

16,759

Accumulated other comprehensive income

Balance at the end of
previous period
Cumulative effect ofchange in accounting
policyBalance at the end of
previous period reflecting
the change in accounting
policyChanges of items during
the period

Unrealized
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

1,878

Change in the scope of
consolidation
Purchase of treasurystock
Net changes of items
other than shareholder’sequityTotal changes of items
during the period
Balance at the end ofcurrent period

101
(0)
27

101

58

45

232

232

27

101

58

45

232

1,834

54

(603)

147

247

(154)

16,605- 19 -

(4) Consolidated Cash Flow Statement(Unit: million yen)
FY13 ended June 30, 2014

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 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
Income taxes refundedAmount of compensation 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
Payments arising from acquisition of subsidiary’s
shares accompanied by change in scope of
consolidation
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- 20 -FY14 ended June 30, 2015

2,926
736
329

3,458
922
347

41

(11)

(11)

(11)

(534)

(260)

(54)

67

60

(15)

(8)
73

(13)
74

(67)

28


(36)


348
(27)
(62)

(518)

(775)

(108)
(57)

(469)
(282)

31

(276)

291

216

168

188

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

2,284

6
3,450
13
(74)
(1,449)

62
2,003




(0)
17

(206)

(625)

310
(259)
(101)

9
(104)
392

(175)





40

(145)
196
(98)
(480)

(323)
316
43
(1,016)

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

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- 21 -FY14 ended June 30, 2015

(140)
950
(1,742)

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

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



104

5,148

5,856

(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: 13
Consolidated subsidiaries:
ZERO-TRANS CO., LTD.
ZERO KYUSHU CO., LTD.
KANDAKO KAIRIKU UNSO CO., LTD.
TOYO BUSSAN CO., LTD.
TBM CO., LTD.
KYUSO COMPANY LIMTEDJAPAN RELIEF CO., LTD.
ASSIST WORK CO., LTD.
NISSAN SHIZUOKA WORKNET CO., LTD.
NPF SERVICE CO., LTD.
AUTO CARRY CO., LTD.
WORLD WINDOWS CO., LTD.
SHINWA RIKUSOU INC.
(Changes in the Scope of Consolidation)
AUTO CARRY CO., LTD., NPF SERVICE CO., LTD., TOYO BUSSAN CO., LTD. and ASSIST WORK
CO., LTD. have been included in the scope of consolidation from this fiscal year. Pursuant to conclusion ofa capital and business alliance agreement with Tan Chong International Limited Group dated 15 May 2014,
the Company has made a unification of group company accounting policy and from the view of groupmanagement. The scope of consolidation was reviewed in light of such changes in the business environment.
Pursuant to acquisition of all shares of SHINWA RIKUSOU INC., the company was included in the scope of
consolidation.
(2) Unconsolidated subsidiaries
There are no unconsolidated subsidiaries.
TOYO BUSSAN CO., LTD., ASSIST WORK CO., LTD., NPF SERVICE CO., LTD., and AUTO CARRY
CO., LTD. have been included in the scope of consolidation from this fiscal year. Pursuant to decrease inownership ratio in EIGHT ZERO CO., LTD. and GUANGZHOU EIGHT ZERO AUTO SERVICE CO.,LTD., the two companies are no longer unconsolidated subsidiaries, but equity method affiliates.
2. Information for application of the equity method(1) Number of affiliates accounted for using the equity method: 8ZERO SCM LOGISTICS (BEIJING) CO., LTD.
UTSUNOMIYA TERMINAL UNYU CO., LTD.
EIGHT ZERO CO., LTD.
GUANGZHOU EIGHT ZERO AUTO SERVICE CO., LTD.
TC ZERO COMPANY PRIVATE LIMITED and 3 other companies
EIGHT ZERO CO., LTD. and GUANGZHOU EIGHT ZERO AUTO SERVICE CO., LTD. which used to
be unconsolidated subsidiaries, and UTSUNOMIYA TERMINAL UNYU CO. LTD., TC ZEROCOMPANY PRIVATE LIMITED and 3 other companies which used to be unconsolidated affiliates, havebecome equity method affiliates.
(2) Unconsolidated subsidiaries and affiliates that are not accounted for using the equity method
There are no applicable items.
- 22 -

The unconsolidated subsidiary not accounted for using the equity method (TOYO BUSSAN CO., LTD.) andthe unconsolidated affiliate not accounted for using the equity method (UTSUNOMIYA TERMINALUNYU CO. LTD.) have respectively become a consolidated subsidiary and equity method affiliate.
(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.
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’sbalance sheet date.
In order to more appropriately disclose the consolidated financial statements, the balance sheet date has beenchanged from March 31 to June 30 with regard to KANDAKO KAIRIKU UNSO CO., LTD., TBM CO., LTD.,KYUSO CO., LTD AND NISSAN SHIZUOKA WORKNET CO., LTD. and 3 other companies. The
accounting period for the current fiscal year for these consolidated subsidiaries is 15 months from April 1, 2014
to June 30, 2015. The balance sheet date has been changed from May 1, 2014 to June 30, 2015 with regard toWORLD WINDOWS CO., LTD., and its accounting period for the current fiscal year is 14 months from May 1,
2014 to June 30, 2015. The effect of these changes in the balance sheet date for sales was 1,893 million yen,operating income was 44 million yen, ordinary income was 50 million yen, and net income was 32 million yen.
(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 thisfiscal year 2014. (provided, however, that the provisions set forth in Section 35 of the Accounting Standard
and Article 67 of the Guidance shall be excluded), and the method used is changed to post the amount 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 reflected in“Accumulated retirement allowance adjustment” under accumulated other comprehensive income. As aresult, liability for retirement benefit at the beginning of the current term increased by 240 million yen andretained earnings decreased by 155 million yen.
The effect on per share information is set forth in the relevant section.
(Changes in the Method of Depreciation of Property, Plant and Equipment)
The depreciation method that has been used in the past by our company and our domestic consolidated
subsidiaries was straight-line method, except for buildings acquired on and after April 1, 1998 (excluding
building-related equipment) and lease assets. This has been changed to declining-balance method from thisfiscal year 2014.
On May 15, 2014, our company concluded a capital and business alliance agreement with Tan ChongInternational Limited to enter into full-scale business in the market of ASEAN countries, and in the future
we expect to engage in full-scale overseas investment, including establishment of new logistics centers.
Taking the opportunity of such changes in the business environment, the depreciation method of tangible
fixed assets was reviewed to unify accounting principles within our group, both domestic and overseas, andmaintain comparability of periodic earnings. As the tangible fixed assets of our company and our domestic
subsidiaries are within their useful lives and running stably, we have determined to change the depreciation
to declining-balance method to expense at a constant rate over the useful life in order to more appropriatelyreflect the actual business operation.
- 23 -

This change has no material effect on operating profits, ordinary profits and income taxes – deferred of thecurrent term.
(Additional Information)(Effect of Changes in Corporation Tax Rates, etc.)
The Act on Partial Revision of the Income Tax Act, etc. (Act No. 9 of 2015) and the Act on Partial Revisionof the Local Tax Act, etc.” (Act No. 2 of 2015) were promulgated on March 31, 2015, and corporation tax
rates, etc. are to be lowered from the consolidated fiscal periods commencing on and after April 1, 2015.
Pursuant to the foregoing, the normal effective statutory tax rate used in the calculation of deferred tax assets
and deferred tax liabilities would be changed from the previous rate of 35.3% to 32.8% with respect to thetemporary difference expected to be eliminated in the consolidated fiscal year commencing on July 1, 2015,
and to 32.0% with respect to the temporary difference expected to be eliminated in the consolidated fiscal
year commencing on and after July 1, 2016. This change has no material effect on the 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 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, export of usedcars

Human resources business

Driver dispatch, personal vehicle operation management

General cargo transportation
business

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

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

General cargotransportation
business

Human
resourcesbusiness

52,315

10,459

4,856

44

409

52,359Segment income
Segment assets

Adjustments(Note 1)

Consolidated
statements ofincome(Note 2)

67,630

67,630

89

543

(543)



10,868

4,945

68,173(543)

67,630

3,235

561

810

4,608

(1,754)

2,853

15,957

2,391

6,695

25,044

7,063

32,107

450

22

203

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
74
112
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.

- 25 -

Current term as of June 30, 2015
(Unit: million yen)
Automobile-relatedbusiness

Human
resourcesbusiness'

General cargotransportation
business'

Total

Adjustments(Note 1)

Consolidated
statements ofincome(Note 2)Sales
Net sales to externalcustomers

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

4,081

568

868

5,517

(1,855)

3,662

2,741

6,094

27,178

7,967

35,145

25

219

835

87

922

Inter-segment net sales or transfers

Total
Segment income
Segment assets

18,342Other items
Depreciation

590

Increase in property, plant andequipment and intangible
1,065
59
359
1,484
49
1,534
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 (2 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.
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 theyear 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 theCompany’s balance sheet date. However, in order to more appropriately disclose and manage ourgroup’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 to June 30, 2015 (14months from May 1, 2014 to June 30, 2015 in the case of a number of our subsidiaries). Sales forthe 3-month period from April 1, 2014 (2-month period from May 1, 2014 in the case of a numberof our subsidiaries) was 888 million yen for automobile-related business, and 1,004 million yen forgeneral cargo transportation business, and segment income was 9 million yen for automobilerelated business, and 35 million yen for general cargo transportation businessb. Related information
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- 26 -

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 business

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(Unit: million yen)
Japan

Asia

OthersTotal

68,267

8,799

179

77,247(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
14,673

Automobile-related businessc. Information on impairment losses on fixed assets by reportable segments
FY13 ended June 30, 2014
(Unit: million yen)
Automobilerelated businessImpairment
lossesGeneral cargotransportation
business

Human resourcesbusiness

Group-wide/
Elimination





Total


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

General cargotransportation
business348- 27 -

Human resourcesbusiness

Group-wide/
Elimination





Total
348

d. Information on amortization and unamortized balance of goodwill by reportable segments
FY13 ended June 30, 2014
(Unit: million yen)
Automobilerelated
business
Amortization
during the year
Balance at theend of year

General cargotransportation
business

Human
resourcesbusiness

Group-wide/
Elimination

Total

0



328



329





1,479



1,479

Automobilerelated
business

General cargotransportation
business

19



328



347

76



1,150



1,227

FY14 ended June 30, 2015
(Unit: million yen)Amortization
during the year
Balance at theend of year

Human
resourcesbusiness

e. Information on gain on negative goodwill by reportable segments
FY13 ended June 30, 2014
Not applicable.
FY14 ended June 30, 2015
Not applicable.

- 28 -

Group-wide/
Elimination

Total

(Per Share Information)
2014
Year ended June 30, 20142015
Year ended June 30, 2015

Net assets per share

873.28 yen
971.51 yen
88.38 yen
109.90 yen
Note 1. Diluted net income per share amounts are not presented since there are no shares existing that have dilutive
effects.
Note 2. According to the Changes in the Accounting Policy, the company adopts The Accounting Standard for
Retirement Benefits, following the transitional act rule No37. As a result, Net assets per shear increased
9.10yen. And there is no material effect on Basic net income per shear.
Note 3. The basis for calculation of basic net income per share is as follows:

Basic net income per share

2014Year ended June 30, 20142015
Year ended June 30, 2015

1,510

1,878





Net income attributable to common shareholders(Millions of yen)

1,510

1,878

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

17,092

17,092

Basic net income per share
Net income (Millions of yen)
Net income not attributable to commonshareholders (Millions of yen)(Subsequent Events)
Not applicable.

- 29 -

5. Financial Statements(1) Balance Sheets(Millions of yen)
2014

2015

As of June 30, 2014

As of June 30, 2015

ASSETS
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 -

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

3,886
152
5,843
511
65
262
199
29
741
114
(68)
11,7383,968(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

4,026(1,487)
2,539
894
(703)
190
252
(217)
34
144
(108)
36
324
(285)
38
6,725
2,121
(646)
1,475
73
11,114

471
31
16
519

403
32
10
446

(Millions of yen)
2014

2015

As of June 30, 2014

As of June 30, 2015

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

298
4,691
48

311
5,106
56

25

27

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

49
414
124
309
164
(94)
6,469
18,02929,768

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

3,279
947
315
655
622
763
106
2,194
273
15
228
9,401

1,362
1,120
1,088
2,109
331
44
30
79
6,168
14,484

1,480
1,267
987
2,185
380
28
76
79
6,485
15,887Long-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)
2014

2015

As of June 30, 2014

As of June 30, 2015

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

747

749

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

3,267
3,676
7,995
(152)
14,438

29
(698)
(668)
12,81427,298

39
(596)
(556)
13,881
29,768Retained 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)
2014
Year ended June 30, 2014
Sales
Cost of sales

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

2015
Year ended June 30, 2015

51,06454,242

3,728
201
201
(140)
868

3,605
208
205
21
870

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

916
32,465
1,540
443
7,711
47,989
6,253

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

1,840
71
68
31
48
441
344
9
27
985
3,870
2,382

1
125
17
67

36
249

1
125
17
60
49
34
289

48
32

1
82
1,977

44

27
4
76
2,595

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
Gains from disposal of supplies
OthersTotal non-operating income

Non-operating expenses
Interest expenses
Loss on disposal of supplies
Losses on valuation of investment securities
OthersTotal non-operating expenses

Ordinary income- 33 -

(Unit: million yen)
2014
Year ended June 30, 20142015
Year ended June 30, 2015

Extraordinary gains
Gain on sales of fixed assets
Compensation received
Total extraordinary gains

1

1

0
62
63

7
2

0
24



39

69
79
1,899
574
265
839
1,059


64
2,595
1,014
35
1,049
1,545

Extraordinary losses
Losses on sales of fixed assets
Losses on retirement of fixed assets
Losses on valuation of stocks of subsidiaries andaffiliates
Provision of allowance for sub-lease loss
Total 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
FY13 ended June 30, 2014

(Unit: million yen)
Shareholders’ equity
CapitalsurplusRetained earnings
Other retained earnings

Capitalstock

Balance at the end of previous
periodCumulative effect ofchange in accounting
policyBalance at the end of previous
period reflecting the changein accounting policy

3,390

Capitalsurplus

3,204

Legal
reserve179

Accident
loss reserve

Reserve foradvanceddepreciationof fixed
assets123781

Reserve for
specialaccount for Special reserveadvanced
fund
depreciationof fixed assets


3,267

Retainedearnings
carriedforward
1,842

Total
Retained
Earnings

6,192


3,390

3,204

179

123

781

1,842

6,192

(211)

(211)

1

(1)



(35)

35





3,267

Changes during the year
Dividends
Increase in fixed asset
reduction reserve pursuant
to change in tax rate
Reversal of reserve foradvanced depreciation of
fixed assets
Reversal of reserve for
special account foradvanced depreciation of
fixed assets



Net income

1,059

1,059

881

847

2,723

7,040

Purchase of treasury stock
Net changes of items otherthan shareholders’ equity
Net changes during the year
Balance at the end of year

(33)
3,390

3,204

179

123

- 35 -

747



3,267

Shareholders’ equity
Treasurystock
Balance at the end of previous
periodCumulative effect of changein accounting policy
Balance at the end of theperiod reflecting the change in
the accounting policies(152)

Valuation and translation adjustments

Total
Unrealized
shareholders’ gains(losses)
on securities
equity12,635

Revaluation
reserve for
land

Total
valuationandtranslation
adjustments

(698)

(683)

14

Total net
assets11,952


(152)

12,635

14

(698)

(683)

11,952

Changes during the year

(211)

Dividends
Increase in fixed asset
reduction reserve pursuant
to change in tax rate
Reversal of reserve foradvanced depreciation of
fixed assets
Reversal of reserve for
special account foradvanced depreciation of
fixed assets

(211)




1,059

1,059

Purchase of treasury stock

Net changes of items otherthan those in shareholders’equity



14

14

14

Net changes during the year

847

14

14

862

13,48329(668)

12,814

Net income

Balance at the end of year(152)

- 36 -(698)

FY14 ended June 30, 2015
(Unit:
yen)

millionShareholders’ equity
CapitalsurplusRetained earnings
Other retained earnings

Capitalstock

Balance at the end of previous
periodCumulative effect ofchange in accounting
policyBalance at the end of previous
period reflecting the changein accounting policy

Capitalsurplus

3,390

Legal
reserve

3,204

3,390

Accident
loss reserve

Reserve foradvanceddepreciationof fixed
assets

123

747

179

3,204

179

Reserve for
specialaccount for Special reserveadvanced
fund
depreciationof fixed assets

Total
Retained
Earnings

2,723

7,040

(213)

(213)

2,510

6,827

(377)

(377)

35

(35)

-

(34)

34

-

123

3,267

Retainedearnings
carriedforward



747

3,267



Changes during the year
Dividends
Increase in fixed asset
reduction reserve pursuant
to change in tax rate
Reversal of reserve foradvanced depreciation of
fixed assets
Reversal of reserve for
special account foradvanced depreciation of
fixed assets-

Net income

1,545

1,545

1,168

1,168

3,676

7,995

Purchase of treasury stock
Net changes of items otherthan shareholders’ equity
Net changes during the year
Balance at the end of year

1
3,390

3,204

179

Shareholders’ equity
Treasurystock
Balance at the end of previous
periodCumulative effect of changein accounting policy
Balance at the end of theprevious period reflecting thechanges in the accounting
policies

(152)

123

749

-

Valuation and translation adjustments

Total
Unrealized
shareholders’ gains(losses)
on securities
equity13,483

Revaluation
reserve for
land

Total
valuationandtranslation
adjustments

(698)

(668)

29

(213)
(152)

3,267

13,270Total net
assets12,814
(213)

29

(698)

(668)

12,601

Changes during the year
Dividends
Increase in fixed asset
reduction reserve pursuant
to change in tax rate
Reversal of reserve foradvanced depreciation of
fixed assets

(377)

(377)

-

-

-

-

- 37 -

Reversal of reserve for
special account foradvanced depreciation of
fixed assets
Net income
Purchase of treasury stock(0)

Net changes of items otherthan those in shareholders’equity

-

-

1,545

1,545

(0)

(0)

-

10

101

111

111

Net changes during the year

(0)

1,168

10

101

111

1,280

Balance at the end of year(152)

14,438

39

(596)

(556)

13,881(4) Notes to Consolidated Financial Statements(Note on Going Concern Assumption)
Not applicable.

- 38 -