Summary of Consolidated Financial Results for the Third Quarter Ending of the Fiscal Year June 30, 2020 [Based on IFRS]
May 14, 2020
Company name: ZERO CO., LTD.
Stock code:
9028
URL: http://www.zero-group.co.jp/
Representative:
President & CEO
Inquiries:
Director and Manager of Group Strategies Headquarters
Scheduled Date of Submission of Quarterly Report:
May 15, 2020
Scheduled date to commence dividend payments:
Preparation of supplementary material on quarterly financial results:
No
Holding of quarterly financial results meeting:No

Stock Exchange Listing: Tokyo
Takeo Kitamura
Toshihiro Takahashi

TEL 044-520-0106(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the third quarter ending of the fiscal year June 30, 2020 (From July 1, 2019 to March 31, 2020)(1) Consolidated operating results (cumulative)

Sales revenue

Operating income

Profit before tax(Percentages indicate year-on-year changes)
Profit attributable toTotal comprehensive
equity shareholders
income of the quarterof the company

Quarterly income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

3Q FY2019

71,809

7.3

3,439

58.1

3,453

59.4

2,285

156.6

2,274

156.0

2,075

186.4

3Q FY2018

66,944

12.3

2,175

∆31.9

2,167

∆31.9

890

∆45.1

888

∆45.6

724

∆58.9

Basic quarterly earnings per share%

Diluted quarterly earnings per shareYen
136.3253.43

3Q FY2019
3Q FY2018% Millions of yen

Yen
135.9453.31(2) Consolidated financial position
Total assets
Millions of yen
47,38639,554

3Q FY2019
FY2018Equity attributable to equity
shareholders of the company

Total capitalMillions of yen
24,59523,072Equity ratio attributable to equity
shareholders of the company

Millions of yen
24,567
23,056

%
51.8
58.3

2. Cash dividends
1st quarter-end
Yen
FY2018FY2019Annual dividends per share
3rd quarter-end

2nd quarter-end
Yen
4.00
15.00

-----

Fiscal year-end

Yen
-----

FY2019 (forecast)

Total
Yen
20.90

Yen
24.90

19.60

34.60

(Note) Amendment from the most recently announced dividend forecast: No
3. Forecast of consolidated financial results for the year ending June 30, 2020 (From July 1, 2019 to June 30, 2020)

Sales revenue
Full year

Millions of yen
95,000Operating income%
5.3

Millions of yen
4,000(Note) Revisions from the most recently released business forecast: No(Percentages indicate year-on-year changes)
Profit attributable toequity shareholders
Basic earnings per shareof the company

Profit before tax%
21.0

Millions of yen
3,980

%
20.8

Millions of yen
2,300

%
38.7

Yen
138.33

ø(Note)(1) Changes in significant subsidiary companies during the current quarter (Changes in the specific subsidiary companies following changes in the scope of
consolidation):No
New ¾ Co. (Company name),
Exclusions ¾ Co. (Company name)(2) Changes in accounting policies, changes in accounting estimates Changes in the accounting policies required by IFRS
: Yes
 Changes in the accounting policies due to other reasons: No Changes in the accounting estimates: Yes(Note) For details, please refer to the attached page. See “2. Summary of the Quarterly Consolidated Financial Statements and Major Notes, (6) Notes regarding
Summary Quarterly Consolidated Financial Statements (Changes in Accounting Policy), (Changes in Accounting Estimates)” on page 12-13.
(3) Number of issued shares (common shares)
 Total number of issued shares at the end of theperiod (including treasury shares)
 Number of treasury shares at the end of the period
 Average number of shares during the period(total up to this quarter)

3Q FY201917,560,242 shares

FY201817,560,242 shares

3Q FY2019
3Q FY2019

1,018,869 shares
16,685,873 shares

FY20183Q FY2018

1,030,369 shares
16,626,874 sharesøEarnings summary is not within the scope of the quarterly review by a certified public accountant or auditorøExplanation of the proper use of financial results forecast and other notes
The earnings forecast, and other forward-looking statements herein are based on the information currently available to the Company and certain assumptions that theCompany considers reasonable. The actual results may differ significantly from these forecasts due to a wide range of factors such as economic status of the majordomestic and international markets or exchange rates fluctuation.

o Attached Documents – Table of Contents
1.

2.

Qualitative information on the quarterly financial results

2(1) Explanation regarding the operating results

2(2) Explanation regarding the financial position

3(3) Explanation on future forecast information, such as consolidated earnings forecast

4

Summary of the consolidated financial statements and major notes

5(1) Summary of the quarterly consolidated financial position

5(2) Summary of the quarterly consolidated profit and loss statement

7(3) Summary of the quarterly consolidated comprehensive income statement

8(4) Summary of the quarterly consolidated statement of changes in equity

9(5) Summary of the quarterly consolidated statement of cash flows

10(6) Notes regarding summary quarterly consolidated financial statements

12(Notes on going concern assumption)

12(Changes in accounting policy)

12(Changes in accounting estimate)13(Segment information)

14

－ 1 －

1.

Qualitative information on the quarterly financial results(1) Explanation regarding the operating results
Japan’s economy during the consolidated cumulative period of the third quarter continued to recover gradually
up to the second half-yearly consolidated cumulative period; personal consumption also improved with a steady
employment and income environment, but it is getting affected by the massive spread of the n – COVID infection
during the consolidated cumulative period of the third quarter and it is facing downward pressure of the
background. The economic environment remains unclear as a weak movement is seen in the individual
consumption.
Even in the domestic automotive market, a part of automobile manufacturers are adjusting production andeven the total number of new vehicles sales decreased 93.7% (statistical data of the Japan Automobile
Manufacturers Association) as compared to the consolidated cumulative period of the same quarter from theprevious year (hereinafter referred to as the same quarter from the previous year). The first quarterly
consolidated cumulative period ratio to the same period of the previous year stood at 108.1 % as rush demandprior to the rise in consumption tax is observed and as against this, there was a massive reduction in the second
quarterly consolidated cumulative period ratio to the same period of the previous year standing at 83.7 % due toeffect of reaction to rush demand and natural disaster. The third quarterly consolidated cumulative period ratio tothe same period of the previous year stood at 89.8 % due to effect of spread of n – COVID infection in addition
to continuation of decline in motivation of consumption due to the rise in tax therefore 2-digit reduction
continues at two consecutive quarters.
The number of registered used cars has continued with the same trend. However, this has stopped at slight
reduction of quarterly ratio of 99.5 % as compared to the previous year.
On the other hand, the business environment of the logistics industry is in serious circumstances withinsufficient drivers due to the background of a strained supply and demand in the labor market as well as cost
increase factors such as increased wages, increased hiring costs, and compliance response.
Under these circumstances, in the 3-year mid-term plan from July of 2018 until June of 2021 devised by ourgroup, and are proceeding with the following 5 topics: (1)development of new businesses in anticipation of areduction of the domestic automobile market and next generation mobility society, (2) Expansion of humanresources business corresponding to the strained supply and demand in the labor market and decreasing
working age population, (3) Expansion of overseas business in anticipation of economic growth such as in ASEAN
countries, (4) Maximization of effect to establish regional block companies through promotion of transportation
reform in the vehicle transportation business, and (5) Creation of group synergy, including subsidiaries andcooperating companies and promotion of optimization.
As a result, the business results of our group are as follows: sales revenue of 718,09 million yen (107.3%
compared to the same quarter from the previous year) and operating profit of 3,439 million yen (158.1%
compared to the same quarter from the previous year). In addition, the profit before taxes was 3,453 million yen(159.4 % compared to the same quarter from the previous year), and the profit of the quarter attributable to theequity shareholders of the company was 2,274 million yen (ratio of same quarter from the previous year of
256.0 %).
Number of units related to domestic distribution of automobiles
Domestic

July of 2018 to Marchof 2019

July of 2019 to Marchof 2020

Units: vehicles
Compared to theprevious year

Number of new vehicles
sold
Domestic manufacturer*1

3,833,430

3,593,651

93.7 %(out of this, Nissan
Motor)*1(466,331)(408,032 )(87.5 %)

Foreign manufacturer*2234,374

219,87193.8 %

4,067,804

3,813,522

93.7 %

Total of new vehicle sales
Number of used vehicle
registrations
Registered vehicles*3

2,904,829

2,881,172

99.2 %

Light vehicles*42,377,288

2,375,139

99.9 %

5,282,117

5,256,311

99.5 %

189,805

194,049102.2 %

Total number of used
vehicles registered
Number of vehicles
permanently deleted*3

ExportNew vehicles of domestic
manufacturers
Used vehicles(registeredvehicles)July of 2018 to March of 2019

July of 2019 to March 2020

Compared to theprevious year*13,648,385

3,521,008

96.5%

*5

1,089,592

1,123,567

103.1 %

*1 Calculated from Japan Automobile Industry Association statistics*2 Calculated from Japan Automobile Importers’ Association
statistics*3 Calculated from Japan Automobile Dealers Association statistics*4 Calculated from Japan Mini Vehicles
Association statistics*5 Trial calculated from the number of export deleted registered vehicles in the Japan Automobile Dealers
Association statistics－ 2 －The segment business results are as follows.
① Automobile related businesses
For vehicle transportation, which is the core business, sale for Nissan Motor Co., Ltd. reduced with slump insales of the vehicles. However, yield increased due to proactive sales activity against the major used-cars dealersin addition to start of Mitsubishi Motors’ vehicle transportation business in the middle of August of 2019. There
was an overall increase in revenue for automotive-related businesses due to the favorable transition of the used
vehicle export business for Malaysia as well as vehicle transportation business.
The restructuring of the transportation system including cooperating companies has been accelerated with theimpetus of establishment of regional block companies in the vehicle transportation business, and thoroughimplementation of cost management is being conducted while aiming to achieve a systematic allocation andoptimum distribution network throughout Japan. Profits increased in the automotive business due to the revision oftransportation charges from January of 2019,review of the depreciation period of car carriers to match the actual
life expectancy, and drop in unit price of fuel expenses compared to the same period of the previous year, in the
midst of business challenges such as promoting initiatives for work style reforms to create forwarding company anddecrease the total work hours, increased labor costs and recruitment costs to deal with driver shortages, andincreased vehicle costs due to the increased number of vehicles and the measures against aging of car carriers.
As a result, the overall sales revenue in the automobile related businesses was 52,432 million yen (107.4 %compared to the same period from the previous year), and the segment profit was 4,525 million yen (147.5 %compared to the same quarter from the previous year).
② Human resource businessWith tightening of the labor demand accompanying the economic recovery and increasing personnel expenses,
the difficulty in employment in major cities has become a serious matter; therefore, the Group has promoteda regional shift from the major cities to smaller cities and reinforcement of the sales system, and has reviewed its
product portfolio strategically and continuously. In addition to the fact that the existing pick up service and driverdispatch business have transitioned steadily, participation in the newly entered airport related business, and the factthat transient job listing advertising costs are no longer necessary has increased revenue; and profit has increased
with the restructuring of non-profitable business and cost reduction.
As a result, the sales revenue of the overall human resource business was 14,491 million yen (105.0% comparedto the same quarter from the previous year), and the segment profit was 684 million yen (285.6 % compared tothe same quarter from the previous year).
③ General cargo business
Revenue in the transport / warehousing business increased due to the increased cargo volume from the lastminute surge in demand of the consumption tax rate, from clients that were mainly handling household equipment.
However, the revenue in the port cargo handling business reduced due to reduction in coal and automobile-related
cargo. Furthermore, the CKD business was launched and contributed to the sales revenue increase, increasing therevenue in the overall general cargo business as well.
Profit increased with the increased revenue in the transport / warehousing business, but revenue decreased in
the port cargo business due to reduced revenue. Furthermore, expenses related to the launch of the CKD businesshave continued, and there was a significant decrease overall in profit in the general cargo business.
As a result of the above, the sales revenue of the overall general cargo business was 4,885 million yen (112.5%
compared to the same quarter of the previous year), and the segment loss was 277 million yen (segment profit of
413 million yen in the same quarter of the previous year).
Furthermore, the company expenses not included in the abovementioned report segment (expenses affiliatedwith our company’s management division), etc. are allocated as an item in the “adjustment amount” as indicated in“2. (Segment information) in the summary of consolidated statements for the quarter,” and totaled 1,491 million
yen.
(2) Explanation regarding financial position①Status of assets, liabilities, and equity(Assets)
Current assets increased 2,860 million yen (15.7 %) compared to the end of the previous consolidated
fiscal year and were 21,038 million yen.
This was mainly because, other current assets decreased 261 million yen, but the operatingreceivables and other receivables increased by 2,854 million yen.
Non-current assets increased by 4,971 million yen (23.3 %) compared to the end of the previous
consolidated fiscal year to 26,348 million yen.
This was mainly due to an increase of tangible fixed assets of 5,334 million yen resulting from anincrease of assets of right to use, etc.
As a result, total assets increased by 7,831 million yen (19.8 %) compared to the previous
consolidated fiscal year to 47,386 million yen.
(Liabilities)
Current liabilities increased 4,341 million yen (34.6 %) compared to the end of the previous
consolidated fiscal year to 16,903 million yen.
－ 3 －This was mainly due to accrued income tax decreasing by 256 million yen, while short-termborrowings increased by 2,067 million yen, and other financial liabilities increased by 2,171 million yen due
to an increase of lease liabilities.
Non-current liabilities increased by 1,967 million yen (50.2 %) compared to the end of the previous
consolidated fiscal year to 5,888 million yen.
This was mainly due to an increase of 2,219 million yen in other financial liabilities due to lease liabilities,etc.
As a result, total liabilities increased by 6,309 million yen (38.3 %) compared to the end of theprevious consolidated fiscal year to 22,791 million yen.
(Equity)
Total equity increased by 1,522 million yen (6.6 %) compared to the end of the previous consolidated
fiscal year to 24,595 million yen.
This is mainly because retained earnings increased by 1,637 million yen due to the recording ofquarterly profits attributable to equity shareholders of the company.
②Cash flow status
Cash and cash equivalents (hereinafter referred to as “funds”) at the end of the consolidated
accounting period of the third quarter increased by 213 million yen compared to the end of the previous
consolidated accounting fiscal year to 3,679 million yen.
Each cash flow status category during the consolidated cumulative period of the third quarter andtheir causes are as follows.
(Cash flow through operating activities)
Funds obtained from operating activities were 2,731 million yen (there were expenditures of 1,410
million yen during the same period of the previous year).
The main cause of the increase in funds were 2,285 million for profit from quarterly profits and 3,119
million yen for depreciation and amortization expenses which are non-fund expenses; the main cause of
the decrease in funds was increased amount of trade receivables of 2,418 million yen and 1,327 million
yen for payment of corporate income. To compare this with consolidated cumulative period of the previous
third quarter, depreciation and amortization have increased due to the adoption of IFRS16 “lease”, etc.
(Cash flow through investment activities)
Net cash used in investment activities was 1,510 million yen (expenditures of 1,665 million yen during
the same period of the previous year).
The main itemization breakdown for expenditures was 1,371 million yen for acquisition of tangible
fixed assets and investment property.
(Cash flow through financial activities)
Funds used due to financing activities were 1,006 million yen (income of 1,632 million yen in theprevious year).
The main itemization breakdown for income was 2,100 million yen for short-term borrowings, andthe main itemization breakdown for expenditures were 2,406 million yen lease liabilities payments and 593
million for dividends. To compare this with consolidated cumulative period of the previous third quarter,
expenditures due to lease liability payments (payment of finance / lease liabilities for the consolidated
cumulative period of the previous third quarter) have increased due to the adoption of IFRS16 “lease”, etc.

(3) Explanation regarding the future forecast information such as consolidated business forecast
We have not made any amendments to the consolidated forecast announced on August 8, 2019. However
sense of uncertainty about the future heightens, since as for the effect of spread of n-COVID infection April
2020 onwards when the situation such as declaration of emergency situation deepened, no. of vehicles sold inJapan will drop and no. of vehicle transportation contracts will also drop along with increased production
adjustment by domestic automobile manufacturers and confinement (lockdown). Our full-year forecast basedon our best estimate as of this reporting remains unchanged, but if any significant changes of thecircumstance happen we will make announcements in a proper manner.

－ 4 －

2.

Summary of the consolidated financial statements and major notes(1) Summary of quarterly consolidated statement of financial position(Unit: million yen)
End of the previous consolidated
accounting year (June 30, 2019)

End of the consolidated accounting
period of the third quarter (March
31, 2020)

Cash and cash equivalents

3,465

3,679

Trade and other receivables

13,281

16,136922

968

Other financial assets

4

11

Other current assets

503

242

18,177

21,038

Tangible fixed assets

11,931

17,265

Goodwill and intangible assets

2,803

2,702

Investment properties

3,393

3,304

986

1,023

1,629

1,414

Other non-current assets

291

326

Deferred tax assets

341

310

Total non-current assets

21,377

26,348

Total assets

39,55447,386

AssetsCurrent assets

Inventories

Total current assets
Non-current assets

Investment accounting processed withequity method
Other financial assets－ 5 －(Unit: million yen)
End of the previous consolidated
accounting year (June 30, 2019)

End of the consolidated accounting
period of the third quarter (March
31, 2020)

Trade and other payable

6,976

7,210

Loans

1,283

3,350

Other financial liabilities

720

2,892

Income taxes payable, etc.

901

644

2,679

2,804

12,561

16,903

154

80

Other financial liabilities

1,519

3,739

Retirement benefits liabilities

1,725

1,562

Other non-current liabilities

306

290

Deferred tax liabilities

214

215

Total non-current liabilities

3,920

5,888

Total liabilities

16,481

22,791

Capital

3,390

3,390

Capital surplus

3,362

3,395

Treasury stock

△687

△681

236

69

16,754

18,392

23,056

24,56716

27

Total Equity

23,072

24,595

Total liabilities and equity

39,55447,386

Liabilities and Equity
Liabilities
Current liabilities

Other current liabilities
Total current liabilities
Non-current liabilities
Loans

EquityOther component of funds
Retained earnings
Total equity attributable to the equity
shareholders of the company
Non-controlling interest

－ 6 －

(2)

Summary of quarterly consolidated profit and loss statement(Unit: million yen)

Consolidated cumulative period Consolidated cumulative period
for the previous third quarterof this third quarter(from July 1, 2018(from July 1, 2019
to March 31, 2019)
to March 31, 2020)
Sales revenue

66,94471,809

Cost of sales△ 58,307△61,805

Gross Profit

8,636

10,004△ 6,968△ 6,790

Other income

555

274

Other expenses

△47

△49

2,175

3,439

9

11

△36

△45

17

48

2,167

3,453

△1,276△1,168

890

2,285

888

2,274

Non-controlling interest

2

11Profits of the quarter

890

2,285

Basic quarterly earnings per share (yen)53.43

136.32

Diluted quarterly earnings per share (yen)53.31

135.94

Selling, general and administrative expenses

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

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

Quarterly earnings per share-

－ 7 －

(3)

Summary of quarterly consolidated statement of comprehensive income(Unit: million yen)
Consolidated cumulative period Consolidated cumulative period
for the previous third quarterof this third quarter(from July 1, 2018(from July 1, 2019
to March 31, 2019)
to December March, 2020)

Profits for the quarter

890

2,285

Remeasurement of defined benefit system

△18

△43

Financial assets measured by fair value
through other comprehensive income

△125

△ 155

△143

△198

△22

△11

△22

△11

△166

△210

724

2,075

722

2,064

2

11

724

2,075

Other comprehensive income
Items not transferring over to profit or loss:

Total of the items not transferring over toprofit or loss
Items which may be transferred over to profit
or loss
Other comprehensive income equity ofaffiliated company accounted for by theequity method
Total of the items which may be transferredover to profit or loss
Other comprehensive income after tax
deduction
Comprehensive income for the quarter

Attribution of the comprehensive income for thequarter:
Equity shareholders of the company
Non-controlling interest
Comprehensive income for the quarter

－ 8 －

(4)

Summary of quarterly consolidated statement of changes in equity
Consolidated accounting period of the second quarter (from July 1, 2018 to March 31, 2019)(Unit: million yen)
Equity attributable to equity shareholders of the company
Other components of funds

Balance on July 1, 2018
Cumulative effect amountdue to change ofaccounting method
Carrying amount with thechange in accounting
method reflected

CapitalCapitalsurplusTreasury
stock

3,390

3,305

△687

3,390

3,305

Conversion
differenceof businessactivities
overseas

Fluctuationof fair valueof financial
assetswhich canbe sold

Financialassetsmeasuredby fairvaluethroughothercomprehensive
profits

△47

464

-

△464

464

-

464

△687

△47

Remeasurementofdefinedbenefitsystem-Total equity
Nonattributing to controlling
Retained the equity
interest
Total otherearnings shareholders
componentsof theof funds
company-

Profit of the quarter
Other comprehensive
income△22Comprehensive
income of thequarter

-

-

-

-

△22

416

15,682

22,10822,119

-

△18

△18

416

15,66422,08911

22,101

-

888

888

2

890

△18

△125

△18

△166

△125

△18

△166

888

722

-

△348

△348

△348

44

44

△0

△0

-

Dividends of surplus
Share-based paymenttransactions, etc.

11

Total
equity

△166

44

△166
2

724

-

Acquisition of own
sharesOther
Acquisition of treasury
stock

-

△0

Transfer from other capitalcomponent to Retained
earnings
Total transactions,etc. with theownersBalance on March 31,
2019

18

18

△18

-

-

44

△0

-

-

-

18

18

△367

△303

-

△303

3,390

3,350

△687

△70

-

339

-

269

16,18522,50813

22,522

Consolidated accounting period of the previous third quarter (from July 1, 2019 to March 31, 2020)(Unit: million yen)
Equity attributable to equity shareholders of the company
Other components of funds

Balance on July 1, 2019

CapitalCapitalsurplusTreasury
stock

3,390

3,362

△687

Conversion
differenceof businessactivities
overseas

Fluctuationof fair
value offinancialassetswhich canbe sold

Remeasurementofdefinedbenefitsystem

△50

286

-

Profit of the quarter
Other comprehensive income
Comprehensive income ofthe quarter

-

-

-

33

Balance on March 31, 2020

16,75423,05616

23,072

-

2,274

2,274

11

2,285

△155

△43

△210

△11

△155

△43

△210

2,274

2,064

-

△593

△593

△593

△210

40

40

-

-

6

△210
11

2,075

-

Transfer from other capitalcomponent to retained
earnings
Total of transactions, etc.,with the owners

236

△11

Dividends of the surplus
Share-based paymenttransactions

Total equity
attributing to Non-controlling Total equity
interests
Retained the equity
Total otherearnings shareholders
componentsof theof funds
company

43

43

△43

-

-

33

6

-

-

43

43

△636

△552

-

△552

3,390

3,395

△681

△61

131

-

69

18,392

24,567

27

24,595－ 9 －(5) Summary of quarterly consolidated cash flow statements(Unit: million yen)
Consolidated cumulative period Consolidated cumulative period
for the previous third quarterof this third quarter(from July 1, 2018(from July 1, 2019
to March 31, 2019)
to March 31, 2020)
Cash flow from operating activities
Profits of the quarter

890

2,285

Depreciation and amortization costs

1,262

3,119

Interest income and dividend

△8

△10

Interest expense

34

38

Investment gain / loss through equity method

△17

△48

Corporate income tax expenses

1,276

1,168

Increase / decrease of trade receivables (△ isan increase)△2,875△2,418

Increase / decrease of inventories (△ is anincrease)

△645

△46

957

571

△371

△213

Other

100

△359

Subtotal

601

4,086

8

10

△34

△38

Corporate income tax paid

△1,986△1,327

Net cash provided by (used in) operating
activities△1,410

2,731

Payment for acquisition of tangible fixed assets
and investment properties△1,486△1,371

Proceed from sales of tangible fixed assets andinvestment properties

6

9

Payment for intangible assets

△223

△106

Payment for loans receivable

△14

△35

Proceed from loans receivable

11

13

Other

41

△21

△1,665△1,510

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

Interest and dividend received
Interest paid

Cash flow from investment activities

Net cash provided by (used in) investment
activities－ 10 －

Consolidated cumulative period Consolidated cumulative period
for the previous third quarterof this third quarter(from July 1, 2018(from July 1, 2019
to March 31, 2019)
to March 31, 2020)
Cash flow from financing activities
Net increase or decrease of short-term loans(△ is a decrease)

2,600

2,100

Repayment of long-term loans

△189

△106

Repayment of finance lease debts

△429

-

-

△2,406

△348

△593

△0

-

1,632

△1,006△1,443

213

5,273

3,465

3,829

3,679

Repayment of lease debts
Dividend paid
Payment for acquisitioning of treasury stock
Cash flow through financing activities
Increase / decrease in of cash and cash
equivalents (△ is a decrease)
Cash and cash equivalents at the beginning of
the quarter
Balance of cash and cash equivalents at the endof the quarter－ 11 －

(6) Notes regarding summary of quarterly consolidated financial statements(Notes on going concern assumption)
There are no applicable matters.
(Changes in accounting policies)
The important company policies that our group applies to this quarterly consolidated financial
statement summary will be the same company policies applicable to the consolidated financial statementsof the previous consolidated accounting year excluding the below.
(1) Application of IFRS No. 16 (lease)
Our group has applied the following standards starting from the first quarter of the consolidated accounting
period.
Standard

Name of the standard

SummaryIFRSNo. 16

Lease

Definition of lease and revision of accounting
process

In the application of IFRS No. 16 “Lease (announced in January of 2016, hereinafter referred to as
IFRS No. 16), a method which is approved as a transitional measure that recognizes the cumulative amountof financial impact due to the application of this standard to be recognized on the day the application isstarted(retroactive revision approach), is being adopted. Therefore, revised comparison information is notshown again, and the cumulative effect of the application of IFRS No. 16 is recognized on the initial
application date, which is July 1, 2019.
In the previous consolidated accounting year, our group has classified all substantial risks and lease contracts
with economic benefit as finance lease. Lease assets are initially recognized at the fair value or the current valueof the total amount of minimum payment lease fee. Lease contracts other than finance leases are classified as
operating leases and are not appropriated in the consolidated statement of affairs of our group. The payment
lease fee of operating leases is recognized as an expense throughout the lease period based on the straight-line
method.
During this consolidated accounting year, our group did not categorize borrower leases as financeleases or operating leases, in accordance with IFRS No. 16, Our group introduced a single accounting
model, and has recognized lease debts which show the obligation to pay the right-of-use asset and leasefee, which show the right to use the underlying assets as a general rule for all leases; excluding cases ofshort term leases with a lease period shorter than 12 months or small amount assets leases.
Accompanying the application of IFRS No. 16, for borrower lease transactions, our group has measured
the right to use asset at acquisition cost and the lease debt at the current value of the total amount of
unpaid lease fees at the lease commencement date. The acquisition cost of the right to use asset is initiallymeasured by adjusting the prepaid lease payment, etc. to the initial measured amount of the lease debt. In
the summary of consolidated financial status statement for the quarter, the right-of-use asset is shown as
included in the “tangible fixed assets,” and the lease debt is included in the “other financial debts. “Thedepreciation of the right-of-use assets and interest costs related to the lease debt are appropriated after
recognizing the right-of-use assets and the lease debts.
Our group estimates the lease period of the right-of-use asset by adding a reasonably certain time period
in which executing an option to extend the lease or executing an option to cancel the lease will not be
exercised during the irrevocability period of the lease. In addition, the discount rate applied to the lease debts
related to the applicable right-of-use assets utilize the borrowing interest rate of the borrower. The right-of-use
assets are depreciated using the straight-line method over the useful life period of the underlying asset if theownership of the underlying asset is to be transferred to the borrower, over the shorter of either the useful life
period or the lease period for other cases.
In addition, our group utilizes the following practical expedients in applying the IFRS No. 16.
• Regarding leases in which the lease period is to be concluded within 12 months of the application startdate, the same accounting process method of short-term leases• Exclude the initial direct cost from the measurement of right-of use as of the date of initial application• Carry over the past decision of whether the transaction is a lease or not for the contracts signed before
the previous consolidated accounting year
• Utilize ex post facto decisions in the case of calculating the lease period for contracts which include
extension or cancellation options(2) Effect on the summary of the consolidated financial statements of the quarter
For the company group, 8,871million yen for right-of-use assets and 8,720 million yen for lease debts areappropriated in the summary of consolidated financial status statements for this quarter on July 1, 2019. Thisis mainly an influence of the lease fee classified as an operating lease in IAS No. 17being appropriated as an
asset and debt upon application of IFRS No. 16. Furthermore, there is no effect on the accumulated earnings
at the beginning of the term because right-of-use assets that is the same amount as the lease debts (however,advance lease fee is revised) is recognized when the lease debt is recognized.
The average of the added borrowing interest applied to the lease debts at the time of the application
start date was 0.2%.
－ 12 －

In addition, the cash flow due to sales activities increased, and the cash flow due to financial activities
decreased in conjunction with the change, etc. of display in the operating lease cost.
The difference between the total of the minimum lease fee of the irrevocable operating leases at thelast date of the fiscal year immediately before the application start date, and the lease debt recognized in
the summary of the consolidated financial status statement for the quarter as of the application start date,is as follows.
(Million yen)AmountTotal amount of future minimum lease fees for irrevocable operating lease (June 30, 2019)
1,965
Total amount of future minimum lease fees for irrevocable operating lease after discount (July 1,
1,946
2019)
Lease debts classified in the finance leases (June 30, 2019)
2,149
Effects, etc., from the review of lease period due to the application of IFRS No. 16
4,624
Lease debts recognized in the summary of the consolidated financial status statement as of the
8,720
application start date (July1, 2019)(Change of accounting estimates)
In creating the summary of the consolidated financial statements for the quarter conforming to IFRS,
managers are required to apply the accounting policy as well as to determine, estimate, presume the effectthereof on the assets, debts, profits, and cost amount. The actual business results may differ compared tothese estimates.
The estimate and the assumptions, which become the base of the estimates, will be continuously reviewed.
The effect from the accounting estimate review is recognized in the accounting period in which the estimate isreviewed and in the future accounting period thereafter.
Excluding the changes in accounting estimate indicated below, the estimate and decisions significantly
affecting the amount in the summary of the consolidated financial statements in the quarter are the same as
the consolidated financial statements in the previous consolidated accounting year.
(Change in life expectancy)
Regarding the group’s sales vehicles in the automobile related business by our company, (some excluded); it
became clear that long-term usage could be expected through regular maintenance, etc. Due to this, the life
expectancy has been revised from the conventional 7 years to 10 years starting the first quarter of theconsolidated accounting period going forward.
Due to this, 235 million yen has been added to the sales profit and pre-tax profits for this third quarter ofthe consolidated cumulative period compared to the case of using the conventional useful life period. In addition,
the effect on the segment information is indicated in the applicable portions.

－ 13 －

(Segment information)
The segment information of our group is as follows.
Consolidated cumulative period of the previous third quarter (from July 1, 2018 to March 31, 2019)(Unit: million yen)
Total amounton theAutomobile Human
GeneralAdjustment
quarterly
relatedresource
cargo
Total
amountconsolidated
businesses businesses businesses(note)
financialstatements
Sales revenue
Sales revenue from externalcustomers
Sales revenue between segments
Total
Segment profit (operating profit)

48,807

13,796

4,341

66,944-

66,944

27

885

306

1,219

△1,219-48,834

14,681

4,647

68,163△1,21966,944

3,068

239

413

3,721

△1,5452,175(Note) The △1,545 million yen adjustment amount in the segment profits includes the total company cost△1,545 million
yen and 0 million yen of transaction elimination between segments. The total company cost is an expense related
to the management divisions of our company not belonging to the reporting segment.
Consolidated cumulative period of this third quarter (from July 1, 2019 to March 31, 2020)(Unit: million yen)
Total amounton theAdjustment
quarterly
amountconsolidated(note)
financialstatements

Automobile
relatedbusinesses

Human
resourcebusinesses

Generalcargobusinesses

52,432

14,491

4,885

71,809-71,809

32

850

341

1,225

△1,225-52,465

15,342

5,226

73,034△1,22571,809

Total

Sales revenue
Sales revenue from externalcustomers
Sales revenue between segments
Total

Segment profit (operating profit)(△is△277△1,491
4,525
684
4,931
3,439
loss)
(Note) 1. The △1,491 million yen adjustment amount in the segment profits includes the total company cost △1,491
million yen and 0 million yen of transaction elimination between segments. The total company cost is an
expense related to the management divisions of our company not belonging to the reporting segment.
2. as indicated in “2. Summary of consolidated financial statements for the quarter and important notes(change in accounting estimates)”, the life expectancy has been changed starting from the consolidated
cumulative period of this second quarter for the vehicles for sales in our company’s automobile related
businesses (excludes some). Due to this change, the segment profit during the consolidated cumulative periodof this third quarter has increased 235 million yen in the automotive related businesses compared to that of theconventional method.

－ 14 －