Summary of Consolidated Financial Results for the Second Quarter Ending of the Fiscal Year June 30, 2019 [Based on IFRS]
February 8, 2019
Company name:ZERO CO., LTD.
Tokyo
Stock code:
9028
URL: http://www.zero-group.co.jp/
Representative:
President & CEO
Takeo Kitamura
Inquiries:
Director and Manager of Group Strategies Headquarters
Toshihiro Takahashi
Scheduled Date of Submission of Quarterly Report:
February 12, 2019
Scheduled date to commence dividend payments:
March 11, 2019
Preparation of supplementary material on quarterly financial results:
No
Holding of quarterly financial results meeting:Yes (for analysts)

Stock Exchange Listing:

TEL 044-520-0106(Amounts less than one million yen are rounded down)
1. Consolidated financial results for the second quarter ending of the fiscal year June 30, 2019 (From July 1, 2018 to December 31, 2018)(1) Consolidated operating results (cumulative)

Sales revenue

2Q FY2018
2Q 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

43,17938,559

12.0
1.2

764
1,929

∆60.4
∆28.0

741
1,923

∆61.5
∆27.8

∆44
969

∆39.2

∆45
972

Basic quarterly earnings per share

%

∆323
1,201

∆25.6

∆39.0

Diluted quarterly earnings per share

Yen
∆2.75
58.59

2Q FY2018
2Q FY2017% Millions of yen

Yen
∆2.75
58.51

(2) Consolidated financial position
Total assets
Millions of yen
37,67738,2902Q FY2018
FY2017

Equity attributable to equity
shareholders of the company

Total capitalMillions of yen
21,524
22,119Equity ratio attributable to equity
shareholders of the company

Millions of yen
21,512
22,108

%
57.1
57.7

2. Cash dividends
1st quarter-end
Yen
FY2017FY2018FY2018 (forecast)

Annual dividends per share
3rd quarter-end

2nd quarter-end
Yen
15.00
4.00

-----

Fiscal year-end

Yen

Total

---

Yen
17.10

Yen
32.10

---

29.10

33.10

(Note) Amendment from the most recently announced dividend forecast: Yes
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(Note) Revisions from the most recently released business forecast: Yes(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

%
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

2Q FY2018

17,560,242 shares

FY2017

17,560,242 shares

2Q FY2018
2Q FY2018

1,030,369 shares
16,626,875 shares

FY20172Q 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.

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)

13

－

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 second 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 sales of new light vehicles favorably increased, in addition to an increase in
the number of new vehicles sold at 103.7% (statistical data of the Japan Automobile Manufacturers Association)
as compared to the consolidated cumulative period of the same quarterfrom the previous year (hereinafterreferred to as the same quarter from the previous year) and resolution of the finished vehicle inspection issue;
as with new car sales, the number of registered used cars has increased compared to the same quarter from theprevious year.
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 first quarter are as follows:sales revenue of 43,179 million yen (112.0% compared to the same quarter from the previous year) andoperating profit of 764 million yen (39.6% compared to the same quarter from the previous year). Also, theprofit before taxes was 741 million yen (38.5% compared to the same quarter from the previous year), and theloss of the quarter attributable to the owners of the parent company was 45 million yen (the profit of the samequarter from the previous year was 972 million yen).
Number of units related to domestic distribution of automobiles
July of 2017 to
December of 2017

Domestic Sale
Number of newvehicles soldDomestic*1
manufacturer(out of this, Nissan*1
Motor)
Foreign manufacturer *2
New car total

Units: vehicles
July of 2018 to
December of 2018

Compared to theprevious year

2,296,535

2,381,989

103.7%(247,049)(280,036)（113.4%)

155,091

157,602101.6%

2,451,626

2,539,591

103.6%

Used vehicles
Registered vehicles*3

1,838,895

1,854,771

100.9%

Light vehicles*4

1,419,819

1,459,883

102.8%

3,258,714

3,314,654

101.7%

96,412

93,632

97.1%

July of 2017 to December of
2017

July of 2018 to December of
2018

Compared to theprevious year*12,476,977

2,435,914

98.3%

*5

691,610

723,555

104.6%

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－

2 －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, in the second quarter, theautomobile market moved more actively than the previous year due to resolution of the finished vehicle
inspection issue, and the number of vehicle transport consignment services increased, resulting in an increase forthe business sector.
With the completion of establishing regional block companies in the vehicle transportation, restructuring of thetransportation 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, transportation enhancement measures are being taken in preparation
for an increase in the consumption tax, and automobile-related businesses as a whole saw a decline in profit.
As a result, the sales revenue for the Automobile related businesses was 31,133 million yen (113.4% comparedto the same quarter from the previous year), and the segment profit was 1,314 million yen (62.1% compared to thesame quarter from the 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 for the overall
human resource business was 9,268 million yen (112.1% compared to the same quarter from the previous year),and the segment profit was 113 million yen (41.2% compared to the same quarter from the previous year).
3) General cargo business
The revenue of the transportation / warehouse business has increased with the incorporation of cargo thatwas shifted to land transportation due to the disaster in the West Japan region in addition to the expansion oftransactions with existing customers and acquisition of new customers, but the revenue for the cargo handlingbusiness has decreased due to the reduction in automobile cargo and coal cargo, and the revenue for thegeneral cargo business has decreased overall. In addition to the decreased revenue in the cargo handlingbusiness, the initial cost incurred in the newly entered CKD business has caused decreased revenue.
As a result, the sales revenue of the overall general cargo business was 2,777 million yen (98.3% comparedto the same quarter from the previous year), and the segment profit was 374 million yen (69.9% compared tothe 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 “2. Summarized Quarter
Consolidated Statement (segment information)” and were 1,037 million yen.
(2) Explanation regarding financial position
1) Status of assets, liabilities, and equity(Assets)
Current assets decreased 849 million yen (4.8%) compared to the end of the previous accounting
period of consolidation and were 16,898 million yen.
This was mainly because, while the operating receivables and other receivables increased by 395
million yen and inventory assets increased by 391 million yen, on the other hand cash and cash
equivalents decreased by1,415 million yen.
Non-current assets increased by 236 million yen (1.2%) compared to the end of the previous
consolidated fiscal year to20,778 million yen.
This was mainly due to a decrease of 343 million yen in other financial assets, while tangible fixed
assets increased by 518 million yen.
As a result, total assets decreased by 613 million yen (1.6%) compared to the previous consolidated
fiscal year to 37,677 million yen.
(Liabilities)
Current liabilities increased 411 million yen (3.5%) compared to the previous consolidated fiscal
year to 12,099 million yen.
This was mainly due to borrowings increasing by 908 million yen, while income taxes payable
decreased by 359 million yen and operating obligations and other liabilities decreased by 112 million yen.
Non-current liabilities decreased by 429 million yen (9.6%) compared to the previous consolidated
fiscal year to 4,053 million yen.
－

3 －This was mainly due to a decrease of 206 million yen in other financial liabilities.
As a result, total liabilities decreased by 18 million yen (0.1%) compared to the previous
consolidated fiscal year to 16,152 million yen.
(Equity)
Total equity decreased by 595 million yen (2.7%) compared to the previous consolidated fiscal year
to 21,524 million yen.
This was mainly due to a decrease of 429 million yen in retained earnings due to the distribution of
earned surplus, etc.
2) Cash flow status
Cash and cash equivalents (hereinafter referred to as “funds”) at the end of the consolidated
accounting period of the first quarter decreased by 1,415 million yen compared to the previous
consolidated accounting fiscal year to 3,857million yen.
Each cash flow status category during the consolidated cumulative period of the second quarter andtheir causes are as follows.
(Cash flow through operating activities)
Funds used as a result of operating activities were 546 million yen (there was an income of
1,905million yen during the same period of the previous year).
The main itemization breakdowns for income were 835 million yen for depreciation and amortization
expenses; the main itemization breakdown for expenses was 1,171million yen for payment of corporate
income tax and Increase of trade receivables 428 million yen.
(Cashflow through investment activities)
Net cash used in investment activities was 1,145 million yen (expenditures of 1,647 million yen
during the same period of the previous year).
The main itemization breakdown for expenditures was 1,120 million yen for acquisition of tangible
fixed assets and investment property.
(Cashflow through financial activities)
Net cash income in financial activities was 276million yen (expenditures of 1,182million yen during
the same period of the previous year).
The main itemization breakdown for income was 1,000 million yen for Short-term borrowings,
and the expenditures were payment of 289 million yen for finance lease and 282 million for dividends.
(3) Explanation regarding the future forecast information such as consolidated business forecast
The revision has been made from the consolidated business forecast and interim dividends published on
August 10, 2018.the details are in the notification of business forecast and dividends change published today.

－

4 －

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
End of the consolidated
consolidated accounting year accounting period of the second(June 30, 2018)
quarter (December 31, 2018)

AssetsCurrent assets
Cash and cash equivalents

5,273

3,857

Trade and other receivables

11,16011,556Inventories

512

904

Other financial assets

131

4

Other current assets

670

575

17,74816,898

Tangible fixed assets

10,827

11,345

Goodwill and intangible assets

2,865

2,815

Investment properties

3,511

3,453

964

958

1,943

1,599

Other non-current assets

122

225

Deferred tax assets

307

380

Total non-current assets

20,542

20,778

Total assets

38,29037,677

Total current assets
Non-current assets

Investment accounting processed with equity
methodOther financial assets－

5 －(Units: million yen)
End of the previous
End of the consolidated
consolidated accounting year accounting period of the second(June 30, 2018)
quarter (December 31, 2018)
Liabilities and Equity
Liabilities
Current liabilities
Trade and other payable

6,436

6,323

Loans

702

1,610

Other financial liabilities

723

680

Income taxes payable, etc.

1,296

936

Other current liabilities

2,530

2,547

11,687

12,099262

201

Other financial liabilities

1,849

1,643

Retirement benefits liabilities

1,838

1,716

Other non-current liabilities

313

353

Deferred tax liabilities

219

137

Total non-current liabilities

4,483

4,053

Total liabilities

16,17016,152

Capital

3,390

3,390

Capital surplus

3,305

3,335

Treasury stock

△687

△687

416

220

15,682

15,252

22,10821,512

Non-controlling interest

11

12

Total Equity

22,11921,524

Total liabilities and equity

38,29037,677

Total current liabilities
Non-current liabilities
Loans

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

－

6 －

(2)

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

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

38,55943,179

Cost of sales△32,444△38,156

Gross Profit

6,115

5,022

△4,263△4,670

Other income

104

457

Other expenses

△26

△44

1,929

764

37

6

Financial expenses

△42

△23

Investment gain / loss through equity method

△0

△5

1,923

741

△954

△786

969

△44

Equity shareholders of the company

972

△45

Non-controlling interest△30Profits of the quarter

969

△44

Basic quarterly earnings per share (yen)

58.59

△2.75

Diluted quarterly earnings per share (yen)

58.51

△2.75

Selling, general and administrative expenses

Operating profit
Financial profit

Profit before tax
Corporate income tax expenses
Profits of the quarter

Attribution of the profits of the quarter:

Quarterly earnings per share

－

7 －

(3)

Summary of quarterly consolidated statement of comprehensive income(Units: million yen)
Consolidated cumulative Consolidated cumulative period
period for the previousof this second quartersecond quarter (from July 1,(from July 1, 2018 to2017 to December 31, 2017)
December 31, 2018)

Profits for the quarter

969

△44

Remeasurement of defined benefit system

49

△83

Financial assets measured by fair value
through other comprehensive income

－

△196

49

△279

148

－

34

0

182

0

232

△279

1,201

△323

1,204

△324

△3

0

1,201

△323

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:
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 previous second quarter (from July 1, 2017 to December 31, 2017)(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 Non-controlling
Total equity
to theinterests
Retained
equityTotal otherearnings
shareholder
components
s ofof funds
company
283

14,403

20,661

11

20,672

972

972

△3

969

Profits of the quarter
Other comprehensive income
Comprehensive income ofthe quarter

-

-

-

34

148

49

232

34

148

49

232

Dividends of the surplus

232
△3

972

1,204

△609

△609

△609
31

Share-based paymenttransactions, etc.

31

31Transactions with Noncontrolling interest, etc.

△1

△1

Transfer from other capitalcomponent to retained
earnings

232

△49

△49

49

-

1,201

1

-

Total of transactions, etc.,with the owners

-

29

-

-

-

△49

△49

△560

△580

1

△578

Balance on December 31, 2017

3,390

3,300

△687

△46

512

-

466

14,81521,285

10

21,295

Consolidated accounting period of the this second quarter (from July 1, 2018 to December 31, 2018)(Units: million yen)
Equity attributable to equity shareholders of the company
Other components of funds

Balance on July 1, 2018
Cumulative effectamount due to changeof accounting method
Carrying amount withthechangeinaccounting
methodreflected

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

Remeasurement ofdefinedbenefitsystem

△47

464

-

-

△464

464

-

464

△47

-

Profits of the quarter
Other
comprehensive
incomeComprehensive
income of thequarter

0

-

-

-

0

-

15,682

22,10811

22,119

-

△18

△18

416

15,66422,08911

22,101

-

△45

△45

0

△44

△18

△83

△279

△196

△83

△279

△45

△324

-

△282

△282

△282

-

29

29

-

△0

△0

-

29

△0

Acquisition oftreasury stock

416

△196

Dividends of surplus
Share-based
paymenttransactions, etc.

Total
equity Non-controlling Total
attributinginterest
equityRetainedto theTotal otherearnings
owners ofcomponents
the parentof funds
company

Transfer from othercapital component to
Retained earnings

△279

83

83

△83

-

△279

0

△323

Total
transactions, etc.
with the owners

-

29

△0

-

-

-

83

83

△365

△252

-

△252

Balance on December
31, 2018

3,390

3,335

△687

△47

-

268

-

220

15,252

21,512

12

21,524－9 －(5) Summary of quarterly consolidated cash flow statements(Units: million yen)

Consolidated cumulative Consolidated cumulative period
period for the previousof this second quartersecond quarter (from July 1,(from July 1, 2018 to2017 to December 31, 2017)
December 31, 2018)
Cash flow from operating activities
Profits of the quarter

969

△44

Depreciation and amortization costs

667

835

Interest income and dividend△6△5Interest expense

36

22

Investment gain / loss through equity method

05Corporate income tax expenses

954

786

Increase / decrease of trade receivables (△ isan increase)

696

△428

Increase / decrease of inventories (△ is anincrease)

△91

△391

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

△561

△154

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

△104

△233

Other

96

251

Subtotal

2,655

642

6

5

Interest paid

△36

△22

Corporate income tax paid

△720

△1,171

Net cash provided by (used in) operating
activities

1,905

△546

Payment for acquisition of tangible fixed assets
and investment properties△950△1,120

Proceed from sales of tangible fixed assets andinvestment properties

20

2

Payment for intangible assets

△128

△119

Payment for loans receivable△7△0

Proceed from loans receivable

37

3

△697

-

76

89

△1,647△1,145Interest and dividend received

Cash flow from investment activities

Expense through transfer of business
Other
Net cash provided by (used in) investment
activities

－

10 －

Consolidated cumulative period Consolidated cumulative period
for the previous secondof this first quarter
quarter (from July 1, 2017 to(from July 1, 2018 to
December 31, 2017)
December 31, 2018)
Cash flow from financing activities
Net increase or decrease of short-term loans (△is a decrease)
Repayment of long-term loans
Repayment of finance lease debts
Dividend paid
Acquisition of treasury stock
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

－

11 －

230

1,000

△483

△151

△319

△289

△609

△282

－

△0

△1,182276△925△1,415

8,101

5,273

7,175

3,857

(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

Financial productsof financial assets / financial debts, depletion offinancial assets, accounting standards for generic
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”) starting fromthe 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 is based on IAS
No.39 “Financial Products: Recognition and Measurement” (hereinafter referred to as "IAS 39"). Further, thegroup haa adopted a method which recognizes the cumulative effects due to the application of this standard on
the first application date.
At our group, the classification of financial assets has been changed based on the facts and status existing on
the first application date due to the application of IFRS No. 9.
As financial assets measured at amortized cost, as well as financial income measured at fair value throughprofit / loss or other comprehensive income, our group has classified non-derivative financial assets as either
equity financial instruments or debt-type financial instruments.
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 operating receivables
that do not have significant financial factors measured at the transaction price at initial recognition) areclassified as financial assets measured by fair value. Equity instruments measured by fair value are under theirrevocable option in which the fluctuation after the fair value is displayed in other comprehensive income andare classified as equity instruments measured by fair value through other comprehensive 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.
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 group conducts anevaluation 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 of forecast credit loss isrecognized as the allowance for bad debts. On the other hand, if the credit risk has increased significantly fromthe time of initial recognition, the amount equivalent to the forecasted credit loss for the whole period isrecognized as the allowance for bad debts. However, the allowance for bad debts for trade receivables notcontaining major financial factors is always recognized as the amount equivalent to the forecasted credit loss
for the entire period regardless of the presence of significant increase in credit risk from the time of initialrecognition. The forecasted credit loss is estimated through a method 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 is applied,
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 quarter of this consolidated
accounting period on the summary of the consolidated quarterly statement of financial position.
(Application of IFRS No. 15 “Profit generated from contracts with clients”)
Our group has adopted a method of recognizing the cumulative effective of adopting the same standard on
effective date pf 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 indicatedbelow.
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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 of deliveryof 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 provision of services over a certain period of time ortransactions by contract agreement, as the performance obligation is satisfied over a 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 recognized when
the contractual delivery conditions are fulfilled.
Also, there are no major effects on our group’s business results or financial status through the application ofthese standards.
(Segment information)
The segment information of our group is as follows.
Consolidated cumulative period of the previous second quarter (from July 1, 2017 to December 31, 2017)(Units: million yen)
Adjustment
amount(note)

Total amounton thequarterly
consolidated
financialstatements

38,559-38,559

202

639

△639

-

8,666

3,030

39,198△639

38,559

275

536

2,929

△1,000

1,929

Automobile
relatedbusinesses

Human
resourcebusinesses

Generalcargobusinesses

27,464

8,267

2,827

37

398

27,502
2,117

Total

Sales revenue
Sales revenue from externalcustomers
Sales revenue between segments
Total
Segment profit (operating profit)(Note) The △1,000 million yen adjustment amount in the segment profits includes the total company cost △1,000
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 second quarter (from July 1, 2018 to December 31, 2018)(Units: million yen)
Adjustment
amount(note)

Total amounton thequarterly
consolidated
financialstatements

43,179-43,179

197

692

△692

-

9,743

2,975

43,871△692

43,179

113

374

1,802

△1,037764

Automobile
relatedbusinesses

Human
resourcebusinesses

Generalcargobusinesses

31,133

9,268

2,777

19

475

31,152
1,314

Total

Sales revenue
Sales revenue from externalcustomers
Sales revenue between segments
Total
Segment profit (operating profit)(Note) The △1,037 million yen adjustment amount in the segment profits includes the total company cost △1.037
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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13 －