Summary of Consolidated Financial Results for the Third Quarter Ending of the Fiscal Year June 30, 2019 [Based on IFRS]
May 13, 2019
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
0106
Scheduled Date of Submission of Quarterly Report: May 14, 2019
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-(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the third quarter ending of the fiscal year June 30, 2019 (From July 1, 2018 to March 31, 2019)(1) Consolidated operating results (cumulative)

Sales revenue

3Q FY2018
3Q FY2017

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

66,94459,596

12.3
0.4

2,175
3,194

∆31.9
∆29.6

2,167
3,182

∆31.9
∆29.2

890
1,623

∆45.1
∆42.1

888
1,633

Basic quarterly earnings per share

∆45.6
∆41.7

%
∆58.9
∆41.5

724
1,763

Diluted quarterly earnings per share

Yen
53.43
98.44

3Q FY2018
3Q FY2017% Millions of yen

Yen
53.31
98.35

(2) Consolidated financial position
Total assets
Millions of yen
41,14338,2903Q FY2018
FY2017

Equity attributable to equity
shareholders of the company

Total capitalMillions of yen
22,522
22,119Equity ratio attributable to equity
shareholders of the company

Millions of yen
22,508
22,108

%
54.7
57.7

2. Cash dividends
1st quarter-end
Yen
FY2017FY2018Annual dividends per share
3rd quarter-end

2nd quarter-end
Yen
15.00
4.00

-----

Fiscal year-end

Yen
-----

FY2018 (forecast)

Total
Yen
17.10

Yen
32.10

29.10

33.10

(Note) Amendment from the most recently announced dividend forecast: No
3. Forecast of consolidated financial results for the year ending June 30, 2019 (From July 1, 2018 to June 30, 2019)

Sales revenue

Full year

Millions of yen
89,000Operating income%
9.4

Millions of yen
4,300(Percentages indicate year-on-year changes)
Profit attributable toequity shareholders
Basic earnings per shareof the company

Profit before tax%
4.5

Millions of yen
4,280(Note) Revisions from the most recently released business forecast: No

－

1 －

%
4.5

Millions of yen
2,200

%
3.3

Yen
132.56

(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  Co. (Company name),
Exclusions 
Co. (Company name)(2) Changes in accounting policies, changes in accounting estimates Changes in the accounting policies required by IFRS Changes in the accounting policies due to other reasons Changes in the accounting estimates(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)

:
:
:

Yes
No
No

3Q FY2018

17,560,242 shares

FY2017

17,560,242 shares

3Q FY2018
3Q FY2018

1,030,369 shares
16,626,874shares

FY20173Q FY2017

1,030,367 shares
16,595,875 shares

Earnings summary is not within the scope of the quarterly review by a certified public accountant or auditor
Explanation 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.

－2 －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(Segment information)

14

－

3 －

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 recovergradually; personal consumption is also being improved with steady employment and income environment, butthings remains unclear due to the uncertainty of the foreign economic situation, beginning with the trade
problem in the US and China.
In the automobile industry, the number of new vehicles sales was increased at 101.9% (statistical data of theJapan Automobile Manufacturers Association) as compared to the consolidated cumulative period of the samequarter from the previous year (hereinafter referred to as the same quarter from the previous year) due to thesales of new light vehicles favorably increased and resolution of the finished vehicle inspection issue; but it
decreased at 96.0% in March which is the high season for vehicles sales; as with new car sales, the number ofregistered used cars has increased compared to the same quarter from the previous year but it decreased in
March as well.
While promoting strategic and flexible sales activity and business operations in response to changes in themarket environment in each of the business segments, our group is working to develop new businesses focusing
on next generation mobility, increasing foreign visitors to Japan, and the growth of the foreign economy toprepare for the shrinkage of the domestic automobile market. Also, we are continuing our efforts to strengthengroup synergy, transport reforms, efforts to strengthen compliance, and reform the work style; however, thebusiness environment is severe due to the insufficient number of drivers caused by shortages of labor supply anddemand in the logistics industry as well as the increase in wages and recruitment cost, high fuel prices, and theincreased cost relative to compliance response such as compliance vehicle restrictions and restrictions on roads.
The business results of our group during the consolidated cumulative period of the third quarter are as
follows: sales revenue of 66,944 million yen (112.3% compared to the same quarter from the previous year) andoperating profit of 2,175 million yen (68.1% compared to the same quarter from the previous year). Also, theprofit before taxes was 2,167 million yen (68.1% compared to the same quarter from the previous year), and the
profit of the quarter attributable to the equity shareholders of the company was 888 million yen (54.4%
compared to the same quarter from the previous year).
Number of units related to domestic distribution of automobiles
Domestic Sale

Units: vehicles

July of 2017 to March of 2018

July of 2018 to March of 2019

Compared to theprevious year

3,758,731

3,833,430

102.0%(453,232)(466,331)（102.9%)233,586

234,374

100.3%

3,992,317、4,067,804

101.9%

Number of newvehicles soldDomestic*1
manufacturer(out of this, Nissan*1
Motor)
Foreign manufacturer *2
New car total
Used vehicles
Registered vehicles*32,883,488

2,904,829

100.7%

Light vehicles*42,338,724

2,377,288

101.6%

5,222,212

5,282,117

101.1%

181,922

189,805

104.3%

July of 2017 to March of 2018

July of 2018 to March of 2019

Compared to theprevious year*1

3,669,365

3,648,385

99.4%

*5

1,033,248

1,089,592

105.5%

Total used vehicles
Number of vehicles
permanently deleted*3

ExportNew vehicles ofdomestic
manufacturers
Used passenger
vehicles*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－

4 －The segment business results are as follows.
1) Automobile related businesses
For vehicle transportation, which is the core business, in aiming to expand transactions related to theshipment of new and used vehicles in Japan, in addition to advancing sales activities in response to theoligopolisation of used car sales by new car dealers and major used car dealerships, the number of vehicletransport consignment services increased and for used vehicle export business, the sales dramatically increased
as a result of its sales strategy and structure reconstruction, resulting in an increase for the business sector.
With the completion of establishing regional block companies in the vehicle transportation, restructuring of
the transportation system has been accelerated including cooperating companies, aiming to achieve optimal
operation of the distribution network throughout Japan and are striving for thorough cost management.
Meanwhile, under circumstances involving increased labor costs / employment costs caused by an insufficientnumber of drivers, increased fuel prices, expanded vehicle costs to handle deterioration and increase the numberof trucks, in addition to the decreased load ratio due to compliance with vehicle restriction laws, the promotionof work style reforms to reduce total working hours and increased cost accompanying the relocation of bases toconstruct an effective distribution system, the price increase of vehicle transportation charge was executed fromJanuary but unable to fill in the declining profit until the second quarter, then automobile-related businesses as awhole saw a decline in profit.
As a result, the sales revenue was 48,807 million yen (112.9% compared to the same quarter from theprevious year), and the segment profit was 3,068 million yen (86.6% compared to the same quarter fromthe previous year).
2) Human resource businessWith the labor demand being tightened accompanying the economic recovery, the difficulty in employment inlarge cities and the increase in personnel expenses have become serious matters; therefore, the Group has
promoted a regional shift from the major cities and reinforcement of the sales system, and has reviewed its productportfolio strategically and continuously. In addition to the fact that pick up service and driver dispatch havetransitioned steadily, participation in the newly entered airport business has increased revenues but decreased profit
due to the temporary increase of recruiting advertisement cost. As a result, the sales revenue was 13,796 million
yen (113.1% compared to the same quarter from the previous year), and the segment profit was 239 million yen(61.1% compared to the same quarter from the previous year).
3) General cargo businessIn the port cargo handling business, revenue decreased due to a decrease in automobile cargo handling and coalcargo handling, however the revenue of the transportation / warehouse business has increased with theincorporation of cargo that was shifted to land transportation due to the disaster in the West Japan region in
addition to the expansion of transactions with existing customers and acquisition of new customers, and therevenue for the general cargo business has increased overall. In addition to the decreased revenue in the cargohandling business, the initial cost incurred in the newly entered CKD business has caused decreased revenue. As aresult, the sales revenue was 4,341 million yen (104.5% compared to the same quarter from the previous year),and the segment profit was 413 million yen (54.5% compared to the same quarter from the previous year).
Also, company expenses not included in the report segments above (expenses related to our company’s
management divisions) were calculated in the item “adjustment amount” as indicated in “Segment
Information“ in “The 4th Situation of Accounting“ and were 1,545 million yen.
(2) Explanation regarding financial position
1) Status of assets, liabilities, and equity(Assets)
Current assets increased 2,365 million yen (13.3%) compared to the end of the previous accounting
period of consolidation and were 20,113 million yen.
This was mainly because, while cash and cash equivalents decreased by 1,443 million yen, theoperating receivables and other receivables increased by 3,224 million yen, on the other hand.
Non-current assets increased by 487 million yen (2.4%) compared to the end of the previous
consolidated fiscal year to 21,030 million yen.
This was mainly due to a decrease of 236 million yen in other financial assets because of mark-tomarket valuation of investment securities and so forth, while tangible fixed assets increased 670 million
yen mainly in motor vehicles transport equipment.
As a result, total assets increased by 2,852 million yen (7.5%) compared to the previous consolidated
fiscal year to 41,143 million yen.
(Liabilities)
Current liabilities increased 3,185 million yen (27.3%) compared to the previous consolidated fiscal
year to 14,873 million yen.
This was mainly due to borrowings increasing by 2,494 million yen, while income taxes payable
decreased by 611 million yen.
Non-current liabilities decreased by 735 million yen (16.4%) compared to the previous consolidated
fiscal year to 3,747 million yen.
This was mainly due to a decrease of 344 million yen in liabilities liability for retirement benefits and335 million yen in other financial liabilities.
As a result, total liabilities increased by 2,450 million yen (15.2%) compared to the previous－ 5 －consolidated fiscal year to 18,621 million yen.
(Equity)
Total equity increased by 402 million yen (1.8%) compared to the previous consolidated fiscal year to
22,522 million yen.
This is mainly because retained earnings increased by 502 million yen due to the recording ofquarterly profits attributable to equity shareholders of the company
2) Cash flow status
Cash and cash equivalents (hereinafter referred to as “funds”) at the end of the consolidated
accounting period of the third quarter decreased by 1,443 million yen compared to the previous
consolidated accounting fiscal year to 3,829 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 used as a result of operating activities were 1,410 million yen (there was an income of
1,301 million yen during the same period of the previous year).
The main itemization breakdowns for income were 1,262 million yen for depreciation and amortization
expenses; the income from increased operating debt was 957 million yen, the main itemization breakdown
for expenses was for expenditures due to increase in trade receivables of 2,875 million and 1,986 million
yen for payment of corporate income.
(Cashflow through investment activities)
Net cash used in investment activities was 1,665 million yen (expenditures of 2,201 million yen during
the same period of the previous year).
The main itemization breakdown for expenditures was 1,486 million yen for acquisition of tangible
fixed assets and investment property and 223 million yen for purchases of intangible assets.
(Cashflow through financial activities)
Funds obtained as a result of financing activities were 1,632 million yen (2,056 million yen used in theprevious year).
The main itemization breakdown for income was 2,600 million yen for Short-term borrowings, and theexpenditures were payment of 429 million yen for finance lease and 348 million for dividends.
(3) Explanation regarding the future forecast information such as consolidated business forecast
We have not made any amendments to the consolidated earnings forecast announced on February 8, 2019.

－

6 －

2.

Summary of the consolidated financial statements and major notes(1) Summary of quarterly consolidated statement of financial position(Units: million yen)
End of the previous
consolidated accounting year
(June 30, 2018)

End of the consolidated
accounting period of thethird quarter (March 31, 2019)

Cash and cash equivalents

5,273

3,829

Trade and other receivables

11,16014,384Inventories

512

1,158

Other financial assets

131

4

Other current assets

670

735

17,748

20,113

Tangible fixed assets

10,827

11,434

Goodwill and intangible assets

2,865

2,867

Investment properties

3,511

3,423

964

959

1,943

1,706

Other non-current assets

122

287

Deferred tax assets

307

350

Total non-current assets

20,542

21,030Total assets

38,29041,143

AssetsCurrent assets

Total current assets
Non-current assets

Investment accounting processed with equity
methodOther financial assets－

7 －(Units: million yen)
End of the previous
consolidated accounting year
(June 30, 2018)

End of the consolidated
accounting period of thethird quarter (March 31, 2019)

6,436

7,685

Loans

702

3,196

Other financial liabilities

723

720

Income taxes payable, etc.

1,296

684

Other current liabilities

2,530

2,587

11,687

14,873262

178

Other financial liabilities

1,849

1,513

Retirement benefits liabilities

1,838

1,493

Other non-current liabilities

313

353

Deferred tax liabilities

219

207

Total non-current liabilities

4,483

3,747

Total liabilities

16,17018,621

Capital

3,390

3,390

Capital surplus

3,305

3,350

Treasury stock

△687

△687

416

269

15,682

16,185

22,10822,508Non-controlling interest

11

13

Total Equity

22,11922,522

Total liabilities and equity

38,29041,143Liabilities and Equity
Liabilities
Current liabilities
Trade and other payable

Total current liabilities
Non-current liabilities
Loans

EquityOther component of funds
Retained earnings
Total equity attributable to the equity
shareholders of the company

－

8 －

(2)

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

Consolidated cumulative period Consolidated cumulative period
for the previous third quarterof this third quarter(from July 1, 2017(from July 1, 2018
to March 31, 2018)
to March 31, 2019)
Sales revenue

59,596

66,944

Cost of sales△50,316△58,307

9,279

8,636

△6,409△6,968Other income

364

555

Other expenses

△40

△47

3,194

2,175

Financial profit

43

9

Financial expenses

△58

△36

2

17

3,182

2,167

△1,559△1,2761,623

890

Equity shareholders of the company

1,633

888

Non-controlling interest△10

2Profits of the quarter

1,623

890

Basic quarterly earnings per share (yen)

98.44

53.43

Diluted quarterly earnings per share (yen)

98.35

53.31

Gross Profit
Selling, general and administrative expenses

Operating profit

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

Attribution of the profits of the quarter:

Quarterly earnings per share

－

9 －

(3)

Summary of quarterly consolidated statement of comprehensive income(Units: million yen)
Consolidated cumulative period Consolidated cumulative period
for the previous third quarterof this third quarter(from July 1, 2017(from July 1, 2018
to March 31, 2018)
to March 31, 2019)

Profits for the quarter

1,623

890

Remeasurement of defined benefit system

6△18

Financial assets measured by fair value
through other comprehensive income

－

△125

6

△143

78

－

55

△22

133

△22

140

△166

1,763

724

Equity shareholders of the company

1,773

722

Non-controlling interest△10

2Comprehensive income for the quarter

1,763

724

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
Fluctuation of fair value of the assets which
can be sold
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:

－

10 －

(4)

Summary of quarterly consolidated statement of changes in equity
Consolidated accounting period of the previous third quarter (from July 1, 2017 to March 31, 2018)(Units: million yen)
Equity attributable to equity shareholders of the company
Other components of funds

Balance on July 1, 2017

CapitalCapitalsurplusTreasury
stock

3,390

3,271

△687

Conversion
differenceof businessactivities
overseas

Fluctuationof fair
value offinancialassetswhich canbe sold

Remeasurementofdefinedbenefitsystem

△81

364

-

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

283

14,403

20,661

11

20,672

-

1,633

1,633

△10

1,623

Profits of the quarter
Other comprehensive income
Comprehensive income ofthe quarter

-

-

-

55

78

6

140

55

78

6

140

1,633

1,773

-

△857

△857

△857
26

Dividends of the surplus

140

Share-based paymenttransactions

26

-

26

Transactions with Noncontrolling interest, etc.

△1

-

△1

Transfer from other capitalcomponent to retained
earnings
Total of transactions, etc.,with the owners
Balance on March 31, 2018

△6

△6

6

-

140
1,763

△10

16

14
-

-

24

-

-

-

△6

△6

△851

△833

16

△816

3,390

3,296

△687

△26

442

-

416

15,185

21,601

17

21,619Consolidated accounting period of the this third quarter (from July 1, 2018 to March 31, 2019)(Units: 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

△687

Conversion
differenceof businessactivities
overseas

Fluctuationof fair valueof financial
assetswhich canbe sold

Financialassetsmeasuredby fairvaluethroughothercomprehensive
profits

△47

464

-

△464

464

-

464

△47

Remeasurement ofdefinedbenefitsystem--Profits of the quarter
Other comprehensive
incomeComprehensive
income of thequarter

△22
-

-

-

△22

-

416

15,682

22,10822,119

-

△18

△18

416

15,66422,08911

22,101

-

888

888

2

890

△18

△18

△166

△125

△18

△166

888

722

-

△348

△348

△348

-

44

44

-

△0

△0

-

44

Acquisition of treasury
stock

11

Total
equity△125

Dividends of surplus
Share-based paymenttransactions, etc.

Total equity
Nonattributing to controlling
Retained the equity
interest
Total otherearnings shareholders
componentsof theof funds
company△0

Transfer from othercapital component to
Retained earnings

△166

18

18

△18

-

△166
2

724

Total transactions,etc. with theowners

-

44

△0

-

-

-

18

18

△367

△303

-

△303

Balance on March 31, 2019

3,390

3,350

△687

△70

-

339

-

269

16,18522,50813

22,522－11 －(5) Summary of quarterly consolidated cash flow statements(Units: million yen)

Consolidated cumulative period Consolidated cumulative period
for the previous third quarterof this third quarter(from July 1, 2017(from July 1, 2018
to March 31, 2018)
to March 31, 2019)
Cash flow from operating activities
Profits of the quarter

1,623

890

Depreciation and amortization costs

1,061

1,262

Interest income and dividend

△10

△8

Interest expense

51

34

Investment gain / loss through equity method

△2

△17

1,559

1,276

Increase / decrease of trade receivables (△ isan increase)△1,176△2,875

Increase / decrease of inventories (△ is anincrease)

△310

△645

526

957

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

△166

△371

Other

△128

100

Subtotal

3,027

601

10

8

△51

△34

△1,684△1,986

1,301△1,410

Payment for acquisition of tangible fixed assets
and investment properties△1,308△1,486

Proceed from sales of tangible fixed assets andinvestment properties

25

6

Payment for intangible assets

△192

△223

Payment for loans receivable

△15

△14

Proceed from loans receivable

40

11

Expense through transfer of business

△697

－

Other

△53

41

△2,201△1,665

Corporate income tax expenses

Increase / decrease of trade payables(△ is a decrease)

Interest and dividend received
Interest paid
Corporate income tax paid
Net cash provided by (used in) operating
activities

Cash flow from investment activities

Net cash provided by (used in) investment
activities

－

12 －

Consolidated cumulative period Consolidated cumulative period
for the previous third quarterof this third quarter(from July 1, 2017(from July 1, 2018
to March 31, 2018)
to March 31, 2019)
Cash flow from financing activities
Net increase or decrease of short-term loans (△is a decrease)

△140

2,600

Proceeds from long-term loans

225－

Repayment of long-term loans

△822

△189

Repayment of finance lease debts

△475

△429

Dividend paid

△857

△348

Income from non-controlling interests

14－

Acquisition of treasury stock－△0△2,056

1,632△2,957△1,443

8,101

5,273

5,144

3,829

Net cash provided by (used in) 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

－

13 －

(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 applicable to this quarterly consolidated financial statement summary
will be the same company policies applicable to the consolidated financial statements of the previous
consolidated accounting year excluding the below.
Our group has applied the following standards starting from this first quarter of the consolidated
accounting period.
Standard and interpretation guide

Summary
Revisions regarding recognition and measurement

IFRS No. 9

of financial assets / financial debts, depletion offinancial assets, accounting standards for genericFinancial products

hedge
IFRS No. 15

Profits generated from contracts

Revisions of accounting process regarding profit

with clientsrecognition(Application of IFRS No. 9 “financial products”)
Our group has applied IFRS No. 9 “financial products” (hereinafter referred to as “IFRS No. 9”) startingfrom the first quarter of this consolidated accounting period. At our group, in accordance with transitional
measures, retrospective restatement for the previous consolidated accounting year is not conducted, but isbased on IAS No.39 “Financial Products: Recognition and Measurement” (hereinafter referred to as “IAS39”). Further, the group haa adopted a method which recognizes the cumulative effects due to theapplication of this standard on the first application date.
At our group, the classification of financial assets has been changed based on the facts and statusexisting on the first application date due to the application of IFRS No. 9.
Our group has classified non-derivative financial assets as financial assets measured at amortized costand financial income measured at fair value through profit / loss or other comprehensive income.
All financial assets are classified as financial assets measured by amortized cost if they satisfy the below
requirements.
 Are held in a business model for the purpose of holding financial assets to recover contractual cash flows.
 Cash flows which are only payment of interest on principal and principal balances, generated on thedesignated day based on the contract requirements of the financial asset.
Financial assets aside from the financial assets measured by amortized cost (excluding operatingreceivables that do not have significant financial factors measured at the transaction price at initialrecognition) are classified as financial assets measured by fair value. Equity instruments measured by fairvalue are under the irrevocable option in which the fluctuation after the fair value is displayed in othercomprehensive income and are classified as equity instruments measured by fair value through othercomprehensive income, excluding equity instruments held for the purpose of selling which must be
measured by fair value through net profit / loss. Further, no liability financial instruments are held.
In accordance with this reclassification, equity instruments that were previously classified as availablefor-sale financial assets are classified as financial assets to be measured at fair value through othercomprehensive income.
Also, in IFRS No. 9, the depletion of financial assets will change from “generation of loss model” to“forecasted credit loss model” of IAS No. 39 “Financial products: recognition and measurement.” Our groupconducts an evaluation at the end of the consolidated accounting period on whether the credit risk
regarding the financial assets has increased significantly from the time of initial recognition; if the credit risk
has not increased significantly from the time of initial recognition, the amount equivalent to 12 months offorecast credit loss is recognized as the allowance for bad debts. On the other hand, if the credit risk has
increased significantly from the time of initial recognition, the amount equivalent to the forecasted credit
loss for the whole period is recognized as the allowance for bad debts. However, the allowance for bad
debts for trade receivables not containing major financial factors is always recognized as the amountequivalent to the forecasted credit loss for the entire period regardless of the presence of significant
increase in credit risk from the time of initial recognition. The forecasted credit loss is estimated through amethod which reflects the changes in credit information, past due information of credit, etc.
Due to the application of this standard, compared to the case in which the prior accounting standard isapplied, the trade and other receivables have decreased 21 million yen, deferred tax asset has increased
3 million yen, and the retained earnings has decreased 18 million yen at the beginning of the first quarterof this consolidated accounting period.
(Application of IFRS No. 15 “Profit generated from contracts with clients”)
Our group has adopted a method of recognizing the cumulative effects of adopting the same standard on
effective date of adoption, to which is applied IFRS No. 15 “Profits generated from contracts with clients”(published in May of 2014) and “Clarification of IFRS No. 15” (published in April of 2016) (hereinaftercollectively referred to as “IFRS No. 15”) starting from the first quarter of this consolidated accounting period.
Accompanying the application of IFRS No. 15, profits are recognized based on the 5-step approach indicated－

14 －below.

Step 1: Identify contracts with clients
Step 2: Identify the performance obligation of the contract
Step 3: Calculate the transaction amount
Step 4: Distribute the transaction price to the performance obligation in the contract
Step 5: Recognize the profits when a business satisfies the performance obligation

The profits provided from the main duties of our group are calculated from the transport of automobiles,
temporary staffing, port cargo handling, and transport of general consumer goods.
Among such transactions, in principle items with which the customer acquires control at the time ofdelivery of the goods / stored items, etc. and satisfy the performance obligation are recognized as revenue
when the goods / stored items, etc. are handed over. For the transactions by contract agreement which isprovision of services and such over a certain period of time, as the performance obligation is satisfied overa certain period of time, revenue is recognized according to the degree of progress.
The major revenue from the sales of goods constitutes used car export sales. Revenue is recognizedwhen the contractual delivery conditions are fulfilled.
Also, there are no major effects on our group’s status of business performance and financial statusthrough the application of these standards.

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15 －

(Segment information)
The segment information of our group is as follows.
Consolidated cumulative period of the previous third quarter (from July 1, 2017 to March 31, 2018)(Units: million yen)
Adjustment
amount(note)

Total amounton thequarterly
consolidated
financialstatements

59,596－59,596310

1,259△1,259－13,091

4,463

60,855△1,25959,596

391

757

4,693

△1,4983,194

Automobile
relatedbusinesses

Human
resourcebusinesses

Generalcargobusinesses

43,245

12,197

4,153

54

894

43,300
3,543

Total

Sales revenue
Sales revenue from externalcustomers
Sales revenue between segments
Total
Segment profit (operating profit)(Note) The △1,498 million yen adjustment amount in the segment profits includes the total company cost
△1,498 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, 2018 to March 31, 2019)(Units: million yen)
Adjustment
amount(note)

Total amounton thequarterly
consolidated
financialstatements

66,944-

66,944306

1,219△1,219-14,681

4,647

68,163△1,21966,944

239

413

3,721

△1,545

2,175

Automobile
relatedbusinesses

Human
resourcebusinesses

Generalcargobusinesses

48,807

13,796

4,341

27

885

48,834
3,068

Total

Sales revenue
Sales revenue from externalcustomers
Sales revenue between segments
Total
Segment profit (operating profit)(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.

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16 －