2019
Annual Report
For the year ended March 31, 2019

TONAMI HOLDINGS CO., LTD.

Capitalizing on expertise originally gained in the transportation business,
the Tonami Group has long been a trailblazer in logistics.
We were among the first in the industry to introduce computer systems.
In recent years, we have taken systematized distribution services fully
utilizing IT to new heights. In particular, our third-party logistics (3PL),
offering companies the optimum solutions to their logistics needs, hasenabled us to cultivate a loyal and growing customer base.
Tonami Holdings Co., Ltd. is now strengthening the fundamentals of thebusiness as it embarks on a new round of development, bringing its capabilities as a pure holding company into full play. Leveraging theaccumulated expertise and business know-how of the Tonami HoldingsGroup, we are sharpening our responsiveness to customer needs not onlyin the field of logistics but also in related businesses and new fields.
We strive to offer value-added services that transcend the traditional conception of logistics. As a pioneer with strengths in information processing,
we are committed to delivering value a stride ahead.
By deploying IT infrastructure attuned to the increasingly diverse andsophisticated needs of the era, we aim to maximize the corporate value of
the Tonami Holdings Group and be an enterprise needed
and respected by society.
We are taking a big stride toward realization of
our “More Than Transportation” vision.

We Want to Deliver Value a Stride Ahead

Contents
1 Consolidated Financial Highlights
2 To Our Shareholders and Investors
5 Corporate Governance
10 Corporate Social Responsibility Activities
11 Financial Section
41 Consolidated Subsidiaries
42 Board of Directors and Corporate Auditors
42 Corporate Data

Forward-Looking Statements
This annual report includes forward-looking statements that represent Tonami’s assumptions and expectations in light of currently available
information. These statements reflect industry trends, clients’ situations and other factors, and involve risks and uncertainties which may
cause actual performance results to differ from those discussed in the forward-looking statements in accordance with changes in thebusiness environment.

Consolidated Financial Highlights
TONAMI HOLDINGS CO., LTD.
AND CONSOLIDATED SUBSIDIARIES
Years ended March 31, 2019 and 2018
Thousands of
U.S. dollars(Note 1)Millions of yen
2019
2018

2019

FOR THE YEAR:
Operating revenues:¥137,436¥130,886$1,238,282

126,211

120,751

1,137,140

Information processing

2,836

2,673

25,557

Sales

6,723

5,857

60,580

Others

1,665

1,604

15,005

Operating income

7,275

5,631

65,551

Net income

4,539

3,159

40,897

Comprehensive income

6,237

3,852

56,196¥ 500.74¥ 348.47

—

—

—

90.00

44.00

0.8109¥136,759¥128,953$1,232,178

69,75464,257

628,480

Logistics

PER SHARE (Yen and U.S. dollars):
Net income, basic
Net income, diluted
Cash dividends$

4.5116

AT YEAR-END:
Total assets
Total net assets

Notes: 1. U.S. dollar amounts presented herein are included solely for convenience. The rate of ¥110.99 = U.S.$1, prevailing on March 31,
2019, has been used for the translation into U.S. dollar amounts. Such translations should not be construed as indications that theJapanese yen amounts could be converted into U.S. dollars at that or any other rate.
2. The computation of net income per share of common stock is based on the weighted average number of shares outstanding (which
represents the number of issued shares less treasury stock) during each fiscal year.
3. Diluted net income per share is not presented for the years ended March 31, 2018 and 2017, since there were no potential securities.
4. Effective from the beginning of the fiscal year ending March 31, 2020, the Company has applied “Partial Amendments to
Accounting Standard for Tax Effect Accounting, etc.” (ASBJ Statement No. 28, February 16, 2018) and other standards. The figure
presented for total assets for the fiscal year ended March 31, 2019 is after retrospective application of the said accounting standards.

Operating Revenues by
Business Segment
150(Billions of yen)

Operating Income

8

Net Income and
Net Income per Share, Basic(Billions of yen)

5.0

6(Billions of yen)

(Yen)

50

4.0

40

3.0

30

2.0

20

1.0

10

100
4
50
2

0

’15

’16

’17

’18

’19

0

’15

Logistics
Information processing
Sales
Others

’16

’17

’18

’19

0

’15

’16

’17

’18

’19

Net Income (Left scale)
Net Income per Share, Basic (Right scale)01

0To Our Shareholders and Investors

President,
Katsusuke Watanuki

I welcome this opportunity to report to our shareholders and investors on the Group’s operating environment andbusiness results for the fiscal year ended March 31, 2019.
In the logistics industry, increasingly serious labor shortages caused by the shrinking of the workforce and otherfactors are increasing costs such as labor costs to secure drivers and consignment fees. To respond to these factors,
there is an urgent need to improve productivity by establishing a structure that ensures collection of appropriate fees,
including freight charges and rates, and by reviewing existing businesses.
Amid such circumstances, in its efforts to continue to offer high-quality logistics services, having set work-stylereform as a pillar of management and setting the three years from April 1, 2018 to March 31, 2021 as the period inwhich the Group is to evolve into an enterprise capable of achieving stable growth, the Group formulated the 21st
Medium-Term Business Plan centering on six reforms with a corporate slogan “Try & Growth 2020 — Evolving into
a continuous growth company!” and vigorously implemented measures for the first year of the plan.
In pursuit of a comfortable working environment and work-style reform, the Group implemented initiatives aimed
at “building a safe, secure and stable work environment,” “improvement of hourly productivity” through introductionof ICT tools and other means, “strengthening hiring activities” to cope with the progress of population aging and theshrinking of the workforce, and promotion of the “mentor program” to improve human-resource retention.
Moreover, we continuously strove to enhance our logistics services by implementing meticulous strategies attuned
to the competitive environment and regional characteristics relevant to each of our business sites and increasing thequality and speed of sales and marketing activities by precisely identifying customer needs.
As a result, the Group’s operating revenues amounted to ¥137,436 million, an increase of ¥6,549 million or 5.0%
from the previous year.
With regard to profits, owing to an improvement in the earnings power as a result of negotiations to revise freightcharges, an expansion of our operations through cost control, and improvement of productivity of existing businesses, operating income increased by ¥1,643 million or 29.2% from the previous year to ¥7,275 million.
Based on comprehensive consideration of operating results, the financial position, future business environment,
and other factors, the Company will pay out a year-end ordinary dividend of ¥50 per share, an increase of ¥10 per
share from the previous year. Combined with the interim dividend of ¥40 per share already paid out, total annual
dividends amount to ¥90 per share.
The work-style reform-related laws came into force on April 1, 2019. As a result, upper limits will be imposed on
overtime working hours of vehicle drivers effective from April 2024, after a 5-year grace period, and employers violating the laws will be penalized.
For the logistics industry, compliance with these laws has become an important management issue. The Group willcontinuously endeavor to strengthen the business foundation through efforts such as appropriate collection of freightcharges and rates and to proactively promote capital and business alliances and M&A in order to secure resources forinvestments for future growth, including improvement of the work environment for better employee benefits and continuous growth, relocation and renovation of aging business offices, and development of new operation bases.
In all our endeavors, we will be grateful for your continued support and guidance.

Overview of Operations

In the logistics industry, amid concerns about the impact of frequent occurrence of natural disasters, the amount ofdomestic freight remained robust and maintained a moderate recovery trend. However, there are concerns over anincrease in costs resulting from increased labor cost and subcontracting cost due to a tight labor supply/demand situation and fluctuations in fuel prices. The business environment remains challenging.
In these circumstances, in its efforts to continue to offer high-quality logistics services, having set work-style reform
as a pillar of management and setting the three years from April 1, 2018 to March 31, 2021 as the period in which theGroup is to evolve into an enterprise capable of achieving stable growth, the Group formulated the 21st Medium-TermBusiness Plan centering on six reforms with a corporate slogan “Try & Growth 2020 — Evolving into a continuous
growth company!” and is working to strengthen the management foundation for ensuring business continuity.

02

In pursuit of a comfortable working environment and work-style reform, the Group implemented initiatives aimed
at “building a safe, secure and stable work environment,” “improvement of hourly productivity” through introductionof ICT tools and other means, “strengthening hiring activities” to cope with the progress of population aging and theshrinking of the workforce, and promotion of the “mentor program” to improve human-resource retention.
Moreover, we strove to enhance our logistics services by implementing meticulous strategies attuned to the competitive environment and regional characteristics relevant to each of our business sites and increasing the quality andspeed of sales and marketing activities by precisely identifying customer needs.
In the road haulage business and the freight forwarding business, we conducted sales and marketing to further
expand business by expanding sales to new customers and deepening relationships with existing customers. By offering proposals for improvements from the viewpoint of total optimization of logistics, we strove to expand our businesses, including third-party logistics (3PL), as an area of focus.
As a result, the Group’s operating revenues amounted to ¥137,436 million, an increase of ¥6,549 million or 5.0%
from the previous year.
With regard to profits, owing to increased revenues as a result of negotiations to revise freight charges and initiatives such as thorough profit management through cost control and improvement of productivity of existing businesses, operating income increased by ¥1,643 million or 29.2% to ¥7,275 million from the previous year.
Net income attributable to owners of the parent was ¥4,539 million, an increase of ¥1,379 million or 43.7% fromthe previous year.

Results by Segment

In the logistics-related business, we strove to win contracts with new customers by making proposals utilizing theentire Group’s resources. With regard to existing customers, while continuing negotiations to revise freight charges
according to transportation costs, we worked to enhance efficiency of pick-up and delivery operations throughreduction of the workload by clearly distinguishing between forwarding and ancillary work.
As a result, operating revenues amounted to ¥126,211 million, an increase of ¥5,459 million or 4.5% from theprevious year.
Segment income was ¥6,600 million, an increase of ¥1,623 million or 32.6% from the previous year owing to thepositive impact of revisions to freight charges, improved transportation efficiency, and enhanced operation of distribution centers.
Operating revenues from the information processing business were ¥2,836 million, an increase of ¥163 million or
6.1% from the previous year.
Segment income was ¥341 million, an increase of ¥49 million or 16.9% from the previous year.
Operating revenues from the sales business, which includes merchandising, consignment sales, and a non-life
insurance agency, amounted to ¥6,723 million, an increase of ¥866 million or 14.8% from the previous year.
Segment income was ¥304 million, a decrease of ¥3 million or 1.1% from the previous year.
Operating revenues from other businesses, which include automobile repair and other services, amounted to¥1,665 million, an increase of ¥60 million or 3.8% from the previous year.
Segment income was ¥113 million, an increase of ¥13 million or 13.4% from the previous year.

Outlook for the Year Ending March 31, 2020

The Japanese economy is expected to remain on a moderate recovery trend amid continuing improvement of the employment and personal income environments despite persisting weakness in certain areas of exports and production. On theother hand, the economic outlook is expected to remain unclear due to the impact of political situations overseas.
In the logistics industry, the business environment is expected to become increasingly challenging, as the labor
supply/demand situation is becoming tighter and the work-style reform-related laws, which are intended to correct
the practice of long working hours and promote equal pay for equal work, are coming into effect one after another.
In these circumstances, the Group is promoting the following six reforms:- Strengthen the business foundation to respond to changes in the market and customer needs- Promote work-style reform- Unify systems, standards, and methods to make the administration departments more efficient- Promote high-quality management- Strengthen the roles and functions as well as management infrastructure of Group companies- Proactively promote capital and business alliances and M&A
By ensuring stable progress of the 21st Medium-Term Business Plan centering on the six reforms, we aim toachieve sustainable growth and enhancement of corporate value.
Labor and subcontracting costs are expected to increase due to factors such as work-style reform and reinforcement of the collection and delivery systems intended to meet customers’ trust and expectations. The Group will
strive, however, to improve its earnings power by promoting its efforts such as appropriate collection of freightcharges and rates in the road haulage business and the 3PL business.

June 2019
Katsusuke Watanuki
President and Representative Director
03

Tonami Holdings’ Operating Subsidiaries and Affiliates
Tonami Transportation Co.,Ltd. (Core Company)
Tonami Transportation Shinetsu Co.,Ltd.
Tonami Transportation Chugoku Co.,Ltd.
Keishin Warehouse Co.,Ltd.
Tonami Global Logistics Co.,Ltd.
Kitakanto Tonami Transportation Co.,Ltd.
Take One Co.,Ltd.
KYK Co.,Ltd.
Kanto Tonami Transportation Co.,Ltd.

Tonami Buisiness Service Co.,Ltd.
Toyo Gomu Hokuriku Hanbai Co.,Ltd.
Tonami Trading Co.,Ltd.
KSR Co.,Ltd.

Tonami Shutoken Logistics Co.,Ltd.
Niigata Tonami Transportation Co.,Ltd.
Hokuriku Tonami Transportation Co.,Ltd.
Ishikawa Tonami Transportation Co.,Ltd.
Fukui Tonami Transportation Co.,Ltd.
Anan Transportation Co.,Ltd.
Tonami Daiichi Warehouse Logistics Co.,Ltd.
Tonami Kinki Logistics Co.,Ltd.
Chuo Reizo Co.,Ltd.

Subsidiary(logistics companies)

Tonami HoldingsGroup

Subsidiary

Associates(consolidated company)

Tonami Logistics (Dalian) Co., Ltd.
Tonami (Thailand) Co., Ltd.
Mahaporn Transport Co., Ltd.
H&R Forwarding Co., Ltd.

Hokkaido Tonami Transportation Co., Ltd.
Japan Tranz Line, Inc.
JESSCO Co., Ltd.
Takaoka Cable Network Co., Ltd.
Takaoka Transportation Co., Ltd.
Touto Transportation Co., Ltd.

Overseassubsidiaries

Tonami Logistics Solutions

Physical distribution
consulting functions

Physical distribution
network functions

Procurement logistics

Production logistics

Raw materials (Parts etc.)
manufacturers

Factories

Environmental
logistics

Consumers

Goods returned, repairs,
waste, etc.

In-house logistics

Warehouses, distribution
centers

Sales logistics
Destinations in Japan

Wholesalers, retailers
Overseas suppliers

ExportImportDestinations overseas

International logistics
Systematized distribution (3PL), information sharing
Supply chain management (SCM)

Information systemdevelopment functions

Operational functions04

Corporate Governance

At a meeting of the Board of Directors held on October 1, 2008, the Company passed
a resolution concerning a basic policy for the corporate governance. The Company,
with the Internal Control Committee in a central role, is implementing sound internal control systems in accordance with the policy, aiming to increase the corporate
value of the Tonami Holdings Group.

(1) Overview of the Corporate Governance System and Reason for Adopting the System

1) Overview of the Corporate Governance System
The Board of Directors of the Company is the organization responsible for important mattersconcerning business policy and business strategy. The Board of Directors meets, in principle,
once a month, in accordance with the Board of Directors Regulations.
The Company’s Board of Directors consists of nine directors: Katsusuke Watanuki, Kazuo
Takata, Shinichi Izumi, Yasuo Terabayashi, Toyonobu Terahai, Yasuhiro Saegusa, and Masaaki
Sato, and Outside Directors Shinichiro Inushima and Ichiro Tanaka.
The meetings of the Board of Directors, chaired by President and Director Katsusuke
Watanuki, are held, in principle, once a month, and as necessary, enabling the directors to attain
mutual understanding and engage in mutual supervision of the execution of business. The
Board of Directors utilizes the services of outside experts as necessary to prevent violations of
the law or the Articles of Incorporation.
The Company employs a corporate auditor system as part of its internal control framework.
The Board of Corporate Auditors consists of four corporate auditors: Standing Corporate
Auditors Masafumi Takebe and Mitsuharu Wadachi and Outside Corporate Auditors Atsuki
Matsumura and Toshiyuki Oda.
The Board of Corporate Auditors, led by Standing Corporate Auditor Masafumi Takebe, whochairs the board, audits the execution of business by the directors and its legality in accordancewith the auditing policy and task assignments decided by the Board of Corporate Auditors, byattending meetings of the Board of Directors and other important meetings, expressing theiropinions, and other means.
The progress of their audits is reported to and confirmed at periodic meetings of the Board of
Corporate Auditors.
In the event that a director discovers a violation of the law or the Articles of Incorporation on
the part of another director, the director is required to promptly report the violation to the corporate auditors and the Board of Directors and a remedy will be sought. The Company has aninternal auditing unit, the Internal Audit Office, which is an organization independent of thebusiness units.
Moreover, the Company has established the Tonami Group Employee Code of Conduct as thefoundation of the Group’s compliance system and the Internal Control Committee, chaired byPresident and Director Katsusuke Watanuki, as the decision-making body. The Company’s effort
to enhance its internal control systems is led by an officer responsible for internal control.
The Compliance Committee is a compliance control organization, and the Internal Control
Team within the Internal Audit Office performs control, operation and training in order tomaintain and enhance internal control systems.

05

To ensure the propriety of business operations of the Group’s operating subsidiaries, theCompany applies the Tonami Group Employee Code of Conduct and the Group Operation
Regulations to all operating subsidiaries of the Group, and each of the Group’s operating subsidiaries has established its own regulations based on them. With regard to administration ofoperating subsidiaries, the Group Company Administration Procedures specify matters requiring approval by the headquarters and those to be reported.
2) The Relationship between the Management Organization and Internal Control
General Meeting of Shareholders
Election

Election

Auditing

Attorney

Board of Directors(Representative directors)(Directors)

OpinionSupervision

Election

Board of Corporate Auditors(Corporate auditors)(Outside corporate auditors)
Reporting

Reporting

Independent auditors

Internal Audit Office
Auditing

ReportingBusiness Execution
Internal Control Committee(Internal Control Office)Internal auditing

Compliance Committee

Business Planning Group
Human Resource
Management Group

Business Risk Management
Committee

Business Administration GroupInternal
controlInternal
controlPlanformulation,
reporting

Policypresentation,plan approvalGroup operating subsidiaries

3) Reason for Adopting the System
In order to make decisions swiftly and accurately in response to the rapidly changing business environment, the Company needs to have human resources well versed in the characteristics of thelogistics business. The Board of Directors includes outside directors who are specialists in their fields
and have objective viewpoints, in addition to other directors with a wealth of experience and insight,
which secures management transparency and soundness. Corporate auditors audit the decisionmaking at the Board of Directors and the directors’ performance of duties. The effectiveness of themonitoring function is ensured by appointment of independent outside corporate auditors. Thus, it
is judged that necessary systems are put in place for the Group to further enhance corporate value.

4) State of Internal Auditing and Auditing by Corporate Auditors
Internal auditing at the Company is led by the Internal Audit Office, which is independent of thebusiness units, and its staff assists with the work of the corporate auditors. The Internal Audit
Office’s independence from the Board of Directors is ensured since decisions of the Board of
Directors on Internal Audit Office staff changes require approval of the Board of Corporate Auditors.
The Internal Audit Office conducts periodic and unscheduled internal audits of the Company’s business, reports to the Board of Corporate Auditors and the Board of Directors, and requests
improvements.

06

The Company’s corporate auditors exchange information with the independent auditors, cooperate with the Internal Audit Office, conduct appropriate audits, and hold periodic meetings of theBoard of Corporate Auditors.
One standing corporate auditor and two outside corporate auditors possess significant expertise
concerning financial and accounting matters gained through their experience over many years. In
addition, one substitute corporate auditor has been elected under Article 329, Paragraph 3 of theCompanies Act to prepare for any situation in which the number of corporate auditors falls below
the number prescribed by laws and regulations.

5) Relationships between Outside Directors and Outside Corporate Auditors
The Company has appointed two outside directors. Directors Mr. Shinichiro Inushima and Mr.
Ichiro Tanaka have no capital or business relationships with the Company or other interests in the
Company.
The Company considers individuals who have no personal, capital, or business relationships with
the Company or other interests in the Company, possess expertise, and are capable of overseeing theCompany’s overall management based on excellent insight to be suitable for election as outside
directors.
Neither of the two outside directors have any of the above-mentioned relationships with theCompany. The Company appointed one of the outside directors as an independent officer as
required by the Tokyo Stock Exchange and has notified the Tokyo Stock Exchange accordingly.
In accordance with the provision of the Companies Act (Article 335, Paragraph 3), the Company
has appointed four corporate auditors, including standing and part-time corporate auditors, ofwhom two are outside corporate auditors who are working to strengthen the audit function from athird-party stance without being involved in business execution of the Company.
Currently, regarding the supervisory function, which is the principal function of the Board of
Directors, outside corporate auditors are working to strengthen the audit function from a third-party
stance without being involved in business execution of the Company.
The Company has appointed two outside corporate auditors. Although Corporate Auditor Mr.
Yohji Ishiguro owns shares of the Company, the capital relationship between him and the Company
is negligible and he has no business relationships with the Company or other interests in the
Company. Corporate Auditor Mr. Atsuki Matsumura has no capital or business relationships with theCompany or other interests in the Company.
The Company considers individuals who have no personal, capital, or business relationships with
the Company or other interests in the Company, possess expertise, and are capable of overseeing
management based on excellent insight to be suitable for election as outside corporate auditors.
Neither of the two outside corporate auditors have any of the above-mentioned relationships with
the Company. The Company appointed one of the outside corporate auditors as an independent officer as required by the Tokyo Stock Exchange and has notified the Tokyo Stock Exchange
accordingly.
The Company has selected one candidate for substitute corporate auditor as provided for in
Article 329, Paragraph 3 of the Companies Act in case the number of outside corporate auditors falls
below the number prescribed by laws and regulations.
Linkage among auditing by corporate auditors, including outside corporate auditors, internal
auditing, and accounting auditing as well as relationships with the internal control unit are describedin 4) State of Internal Auditing and Auditing by Corporate Auditors. Through reporting and07exchange of opinions at meetings of the Board of Directors, the Company strives to strengthen collaboration among supervision by the outside directors, auditing by corporate auditors, internal
auditing, and accounting auditing and establish fruitful relationships between the outside directors
and the internal control unit.
Pursuant to Article 427, Paragraph 1 of the Companies Act, the Company has concluded contracts
with the outside directors and outside corporate auditors that limit their liability under Article 423,
Paragraph 1 of the said Act. The liability for damages pursuant to these contracts is limited to the liability amount prescribed by laws and regulations. The limitation of liability stated above is only
applicable if the outside director or outside corporate auditor is without knowledge and is not grossly negligent in performing his duties causing such liability.
(2) State of Development of the Risk Management Structure

In accordance with the Tonami Group Business Risk Management Regulations, the president serves
as the Chief Risk Management Officer, risk management officers are appointed for each type of risk,
and a risk management structure is established.
In the event of unforeseen circumstances, in accordance with the Tonami Group Large-scale
Disaster Response Regulations and the Tonami Group Emergency Response Regulations, theCompany will establish an Emergency Response Headquarters, which will be headed by the president. The Company will mount a rapid and appropriate response in accordance with the regulations
and put in place a structure to prevent the spread of damage and minimize damage.
The status of operation of systems for ensuring appropriateness of business operations of theCompany in the fiscal year ended March 31, 2017 is as follows. Periodic meetings of the Company’s
Board of Directors were held 11 times during the year under review. In addition to regular reportingand confirmation of matters, the Board of Directors deliberated and made decisions on importantmatters stipulated in the Board of Directors Regulations. Also, the results of monitoring of the statuses of directors’ performance of duties were reported to the Board of Directors.
The Compliance Committee consisting of the president, directors in charge of compliance, andother members met every month and reported the statuses of compliance and operational risk management to subsidiaries’ boards of directors and the Company’s Board of Directors. Regarding
retention and management of information concerning directors’ performance of duties, documents
pertaining to the Board of Directors meetings and other documents concerning directors’
performance of duties were retained in chronological order in accordance with the Document
Handling Regulations and the Document Retention Regulations.
To manage risks of loss, the Company received periodic reporting on major risks to which theGroup’s operating subsidiaries are exposed from the president of each operating subsidiary or its officer in charge via the Compliance Committee and checked the statuses of risk management.
To ensure the propriety of business operations of the Group’s operating subsidiaries, the Company
has established the Tonami Group Employee Code of Conduct, consisting of action guidelines, and
the Group’s operating subsidiaries have established regulations based on the code of conduct.
With regard to administration of the Group’s operating subsidiaries, matters requiring approval by
the headquarters and those to be reported are specified in the Group Company Administration
Procedures and management of operations is in accordance with the Group Operation Regulations.
In the event that a director discovers a violation of the law or any other important matter related
to compliance in an operating subsidiary of the Group, the director is required to report the matterto a corporate auditor. In the event that an operating subsidiary of the Group finds that the administration by the Company or management instructions issued by the Company violate the law or08becomes aware of any other compliance-related problem, the subsidiary is required to report thematter to the Internal Audit Office. In such a case, the Internal Audit Office promptly reports thematter to a corporate auditor and the corporate auditor receiving the report may express an opinion
and request improvement measures.
The Company has established the Tonami Group Internal Reporting Regulations and operates aninternal reporting system concerning violations of the law and other matters related to compliancecovering the entire Tonami Holdings Group.
The Company prohibits disadvantageous treatment of the Company’s directors or employees who
made such reports to the Group’s corporate auditors on the grounds that they made such reports andensures that the Group’s directors and employees are thoroughly aware of this policy.
The Company will have no relationships with antisocial forces. The Company will take resoluteaction against any undue claims or actions by antisocial forces on the basis of cross-organizational
cooperation in close collaboration with the police and other external specialist organizations and will
never provide any benefit to antisocial forces.

09Corporate Social Responsibility Activities

Basic Policy on Corporate Social Responsibility
Having positioned management that emphasizes fulfillment of social responsibility based on compliance as an essential element of its Three-year Medium-Term Business Plan, the Tonami Holdings Group aspires to contribute to society continuously from an increasingly global perspective.
Amid rapid change in the environment in which the logistics industry operates, the Legal Division is leading theGroup’s efforts to strengthen appropriate and flexible responses to legal and contractual risks.
Adhering to the Tonami Group Employee Code of Conduct, and with the action principle “Ensure compliancethroughout business activities,” the Tonami Holdings Group endeavors to create further value through its businessand fulfill its corporate social responsibility (CSR).
In addition, we are working to bolster systems to ensure compliance based on appropriate operation of businessprocesses by inspecting premises and issuing guidance to them through the business process improvement projects
and periodic auditing of business processes by the Internal Audit Office.
As a logistics enterprise, we must ensure transportation safety, accord consideration to the environment, ensure
legal compliance and compliance with other rules, respect human rights, and contribute to local communities. We
are committed to further strengthening corporate governance and promoting compliance management.
Mindful that transportation is an aspect of social infrastructure and based on the concept of building a safe society,
we are striving to protect the environment by promoting environmentally friendly business activities involving minimal waste of energy through our initiatives to improve logistics efficiency, encourage fuel-efficient driving by using
digital tachographs, and promote joint transportation and delivery.
In view of the frequent occurrence of unprecedented disasters, we are working to compile business continuity
plans (BCP) based on the Large-scale Disaster Response Regulations in order to swiftly obtain information on corebusiness processes and fulfill our role as a logistics enterprise in the event of a disaster.
With an eye to the prosperity and quality of life of future generations, the Group endeavors to achieve sustainablegrowth of the business while minimizing environmental impacts. In this way, we are striving to fulfill our social
responsibility far into the future.
Principal CSR Initiatives and State of Implementation
Environmental Protection Activities
Recognizing that environmental protection is a crucially important theme
that concerns the maintenance of the ecosystem, adhering to our principle—“Contribute to society through transportation and strive to protect
the environment”—we will act in accordance with the following policies.
1. We will do the following to mitigate environmental pollution associatedwith transportation services:(a) We will introduce environmentally friendly vehicles.
This truck runs on natural gas(b) We will practice environmentally friendly driving.
(c)	We will create eco-friendly distribution systems through more efficient distribution.
(d)Wewill establish a recycling system to contribute to establishment of a recycling-based society.
Corporate Social(e) We will promote development and provision of environmentally friendly products.
Responsibility Report(f)	We will make continuous efforts to save resources and energy and to achieve improvements
every day.
2. We will ensure compliance with environment-related laws and regulations at the national and municipal levels and other requirements that the Company undertakes to fulfill in its efforts to protect theenvironment.
3. We will set specific environmental objectives and environmental goals, conduct periodic reviews, andwork to achieve continuous improvement of environmental management systems.
4. We will communicate these policies to all employees through internal environmental education andawareness-raising initiatives, and we will disclose these policies to the public. We will also vigorously
participate in environmental protection activities in local communities.

Encouraging local people to take up
badminton

Social Contributions
The Tonami Holdings Group is contributing to society through involvement in various community activities, including providing support to welfare facilities and fostering of the next generation.
Our social contribution activities include participation involuntary clean-up campaigns, such as “neighborhood adoption” programs promoted by local government, and the donation of vehicles to social welfare facilities through the General
Incorporated Association “Tonami Holdings Shozyukai.”
We transport relief supplies when natural disasters occur.
The Tonami Transportation Badminton Club offers badminton
A clean-up in progresscoaching as a local sports promotion activity.
10Financial Section

12

Consolidated Five-Year Summary

13

Consolidated Financial Review

16

Consolidated Balance Sheets

18

Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

19

Consolidated Statements of Changes in Net Assets

20

Consolidated Statements of Cash Flows21

Notes to the Consolidated Financial Statements

11Consolidated Five-Year Summary
TONAMI HOLDINGS CO., LTD
AND CONSOLIDATED SUBSIDIARIES
Years ended March 31

2015

2016

2017

2018

2019

Thousands of
U.S. dollars
2019

Operating revenues¥122,547¥122,959¥125,509¥130,886¥137,436$1,238,282

Operating cost

111,775

111,666

113,674

118,141

122,932

1,107,601

Selling, general and administrative expenses

6,019

6,053

6,716

7,113

7,228

65,129Operating income

4,752

5,239

5,118

5,631

7,275

65,551

Net income

3,238

3,526

3,762

3,159

4,539

40,897

Depreciation expenses

4,365

4,687

4,939

5,089

5,134

46,263¥356.89¥388.82¥414.83¥348.47¥500.74$4.5116

6.00

6.50

7.50

44.00

90.00

0.8109¥36,076¥37,418¥40,352¥42,644¥45,871$413,295

Net property and equipment

71,16870,857

71,46570,66971,421

643,498

Total assets

120,887

121,212

126,769

128,953

136,759

1,232,178

Total current liabilities

39,33334,761

34,20934,612

39,632357,078

Long-term liabilities, excluding of current portion thereof

26,90629,28031,40730,08327,372

246,619

Total net assets

54,64757,16961,15264,25769,754628,480

6,447

6,431

6,494

6,440

6,436

Millions of yen

RESULTS OF OPERATIONS:PER SHARE (yen and U.S. dollars):
Net income
Cash dividends
YEAR-END FINANCIAL POSITION:
Total current assets

OTHER YEAR-END DATA:
Number of employees

Note: 1.	The Company conducted a 1-for-10 reverse stock split of its shares of common stock effective October 1, 2017. Accordingly, net income
per share was calculated under the assumption that the said reverse stock split had been conducted at the beginning of the fiscal year
ended March 31, 2015.
2.	Effective from the beginning of the fiscal year ending March 31, 2020, the Company has applied “Partial Amendments to AccountingStandard for Tax Effect Accounting, etc.” (ASBJ Statement No. 28, February 16, 2018) and other standards. Figures presented for key performance indicators, etc. for the fiscal year ended March 31, 2019 are after retrospective application of the said accounting standards.

12Consolidated Financial Review

Forward-looking statements in the discussion below represent the best judgment of the Tonami HoldingsGroup as of the end of the fiscal year under review.

Significant Accounting Policies and Estimates

The consolidated financial statements of the Tonami Holdings Group have been prepared in accordance withaccounting principles generally accepted in Japan. Estimates used in the preparation of the consolidated financial statements that may affect the reported amounts of assets and liabilities on the closing date and the reported revenues and expenses for the reporting period are principally deferred tax assets, the allowance for
doubtful accounts, net defined benefit liability, and income taxes. These estimates are subject to continuous,
reasonable assessment.
Estimates, judgments, and assessments are made on the basis of factors that are deemed reasonable in lightof past performance and conditions. However, since estimates invariably involve uncertainties, actual results
may differ from the estimates.

Analysis of Consolidated Operating Results
Operating Revenues

Operating revenues amounted to ¥137,436 million, an increase of 5.0% or ¥6,549 million year on year, owing
to improved demand for 3PL services and other logistics services.
Composition of Operating Revenues
Percentage pointchange from theprevious year

Composition

Logistics:
Road haulage operations and freight forwarding operations
Warehousing operations
Harbor transport operations
Information processing business
Sales businesses
Other businesses

+4.5%
+4.2
+8.5
−7.9
+6.1
+14.8
+3.8

91.8%
68.8
19.5
3.5
2.1
4.9
1.2

Operating income

Owing to increased revenues as a result of negotiations to revise freight charges and initiatives such as thorough profit management through cost control and improvement of productivity of existing businesses, operating income increased by ¥1,643 million or 29.2% to ¥7,275 million from the previous year.
Net income attributable to owners of the parent

Net income attributable to owners of the parent was ¥4,539 million, an increase of ¥1,379 million or 43.7%
from the previous year.

Analysis of the Financial Position
AssetsCurrent assets were ¥45,871 million, an increase of 7.6% from the previous fiscal year-end. This increase wasmainly attributable to a ¥2,124 million increase in cash and time deposits and a ¥626 million increase in tradeaccounts receivable.

Sales of Logistics

Operating Revenues

150(Billions of yen)

150

Sales of Information
Processing Business(Billions of yen)

4

(Billions of yen)

3
100

100

2
50

50

1

0

’15

’16

’17

’18

’19

0

’15

13

’16

’17

’18

’19

0

’15

’16

’17

’18

’19

Non-current assets amounted to ¥90,887 million, an increase of 5.3% from the previous fiscal year-end. This
increase was mainly attributable to a ¥801 million increase in buildings and structures and a ¥3,306 million
increase in investments in securities, whereas leased assets and construction in progress decreased ¥413 millionand ¥287 million, respectively.
As a result, total assets amounted to ¥136,759 million, an increase of 6.1% or ¥7,805 million from the previous
fiscal year-end.
Liabilities

Current liabilities were ¥39,632 million, an increase of 14.5% from the previous fiscal year-end. This increase
was mainly attributable to a ¥378 million increase in trade accounts payable, a ¥3,203 million increase in current portion of long-term debt, and a ¥370 million increase in income taxes payable, whereas lease obligations
decreased ¥1,204 million.
Long-term liabilities were ¥27,372 million, a decrease of 9.0% from the previous fiscal year-end. Thisdecrease was mainly attributable to a ¥3,022 million decrease and a ¥329 million decrease in long-term debt
and lease obligations, respectively, whereas deferred tax assets increased ¥776 million.
As a result, total liabilities amounted to ¥67,004 million, an increase of 3.6% or ¥2,308 million from the previous fiscal year-end.
Net assets

Net assets amounted to ¥69,754 million, an increase of 8.6% from the previous fiscal year-end. The main factors
included a ¥3,813 million increase in retained earnings as a result of recording net income attributable to ownersof the parent of ¥4,539 million as well as a ¥1,796 million increase in unrealized gain on other securities.

Analysis of Cash Flows

Cash and cash equivalents on a consolidated basis for the year under review increased ¥2,000 million from theprevious year to ¥19,262 million as a result of net cash provided by operating activities amounting to ¥10,466
million, net cash used in investing activities amounting to ¥4,768 million, and net cash used in financing activities amounting to ¥3,698 million.
Cash Flows from Operating Activities

Net cash provided by operating activities totaled ¥10,466 million, an increase of ¥1,620 million from the previous year. Principal items were income before income taxes amounting to ¥7,257 million and income taxes paid
amounting to ¥2,208 million.
Cash Flows from Investing Activities

Net cash used in investing activities totaled ¥4,768 million, an increase of ¥1,879 million from the previous
year. The principal items were payment of ¥3,517 million for the purchase of property and equipment, paymentof ¥751 million for the purchase of investments in securities, and payment of ¥409 million for the purchase ofshares of subsidiaries resulting in change in scope of consolidation.
Cash Flows from Financing Activities

Net cash used in financing activities totaled ¥3,698 million, a decrease of ¥568 million from the previous year.
The principal items were proceeds from long-term debt amounting to ¥600 million, repayment of long-term
debt amounting to ¥711 million, repayment of lease obligations amounting to ¥2,847 million, and dividends
paid amounted to ¥725 million.

Risk Factors

The principal business of the Tonami Holdings Group is the logistics-related business centering on road haulage
operations and freight forwarding operations. The Group’s business is subject to impacts of fluctuation of theJapanese economy and the world economy, customers’ streamlining of logistics, restructuring, and deterioration

Sales of Other Business

2.0(Billions of yen)

Net Income

Operating Cost andOperating Income
240(Billions of yen)

8

1.5

180

6

1.0

120

4

0.5

60

2

5.0

(Billions of yen)

4.0
3.0
2.0

0

’15

’16

’17

’18

’19

0

’15

’16

’17

’18

Operating cost (Left scale)Operating income (Right scale)

14

’19

0

1.0
0

’15

’16

’17

’18

’19

of business results, and suspension of business transactions with customers. The business environment in which
the Group operates entails the risk of difficulty in absorbing cost increases due to such factors as sharp increases
in the price of crude oil and interest rate increases that exceed expectations.
In the event of the occurrence of a major disaster, such as an earthquake, in the regions where the Group
operates, there is a risk that damage to facilities may greatly affect the Group’s business operations.
In the event that the retention, development and recruitment of human resources indispensable for businessexpansion do not progress as envisaged in the plan, strategic tie-ups including acquisitions and capital partnerships do not develop as planned, or that social risks materialize with respect to the Group’s overseas businessexpansion, there may be an adverse impact on the Group’s business activities and business results.
The Group handles a huge amount of customer information and strives to appropriately manage such information. However, in the event of leakage of information owing to trouble concerning safekeeping, the credibilityof the Group may be undermined and claims may be made for damages against the Group. In the event of trouble concerning IT systems caused by a natural disaster, computer virus infection, etc., there may be an adverse
impact on the Group’s business results and financial condition.
There is also a possibility of cost increases due to the strengthening of environmental regulations and for
ensuring compliance with stricter safety regulations, and the increased burden may have an adverse impact on
the Group’s business results and financial condition.
In the event of the occurrence of a serious problem, such as a vehicle accident, there is a risk of loss of customer confidence and public trust that could have an adverse impact on the Group’s business results and financial position.
In the event that impairment becomes necessary in accordance with the impairment accounting applicable to
fixed assets for business use or there is a great change in the estimates of future taxable income and reversal ofdeferred tax assets is required, there may be an adverse impact on the Group’s business results and financial position.
The Group may launch a new business or invest in or acquire other companies in order to further expand thegrowth field. Such investment may not have the expected impact, a joint-venture company may not be operated
in a manner the Company considers appropriate, the Company may bear an economic burden, and operationsof the investing companies other than the Company may deteriorate or they may withdraw from the business.

Strategic Position and Outlook

The Japanese economy is expected to remain on a moderate recovery trend amid continuing improvement of
the employment and personal income environments despite persisting weakness in certain areas of exports andproduction. On the other hand, the economic outlook is expected to remain unclear due to the impact of political situations overseas.
In the logistics industry, the business environment is expected to become increasingly challenging, as thelabor supply/demand situation is becoming tighter and the work-style reform-related laws, which are intended
to correct the practice of long working hours and promote equal pay for equal work, are coming into effect one
after another.
In these circumstances, the Group is promoting the following six reforms:- Strengthen the business foundation to respond to changes in the market and customer needs- Promote work-style reform- Unify systems, standards, and methods to make the administration departments more efficient- Promote high-quality management- Strengthen the roles and functions as well as management infrastructure of Group companies- Proactively promote capital and business alliances and M&A
By ensuring stable progress of the 21st Medium-Term Business Plan centering on the six reforms, we aim toachieve sustainable growth and enhancement of corporate value.
Labor and subcontracting costs are expected to increase due to factors such as work-style reform and reinforcement of the collection and delivery systems intended to meet customers’ trust and expectations. The
Group will strive, however, to improve its earnings power by promoting its efforts such as appropriate collection of freight charges and rates in the road haulage business and the 3PL business.
Net Cash Used in Investing
Activities

Net Cash Provided byOperating Activities
12(Billions of yen)

010(Billions of yen)

Total Assets andTotal Net Assets
150(Billions of yen)

-1
100

8
-2
6
-3

50

4
-4

2
0

’15

’16

’17

’18

’19

-5

’15

’16

’17

’18

’19

0

’15

’16

Total assets
Total net assets

15

’17

’18

’19

Consolidated Balance Sheets
TONAMI HOLDINGS CO., LTD.
AND CONSOLIDATED SUBSIDIARIESAs of March 31, 2019 and 2018ASSETS

Thousands of
U.S. dollars(Note 1)
2019

Millions of yen
2019
2018

Current assets:
Cash and time deposits (Notes 12 and 14)¥19,407¥17,283$174,861

22,88322,028206,178

(114)

(17)

(1,027)

Investments in lease assets

27

43

251

Inventories

689

552

6,212

Income taxes receivable

448

559

4,040

2,528

2,195

22,78045,87142,644413,295

Land

41,45340,844373,490

Buildings and structures

20,322

19,521

183,102

Machinery and vehicles

2,631

2,629

23,710

Leased assets (Note 13)

6,284

6,697

56,619Construction in progress

5

293

52

724

683

6,526

71,421

70,669643,498

12,961

9,654

116,778

Deferred tax assets (Note 19)

758

744

6,836

Goodwill

397

67

3,578

Other

5,348

5,173

48,193

19,465

15,639175,385¥136,759¥128,953$1,232,178

Trade receivables:
Notes and accounts (Notes 5, 8 and 14)
Less: allowance for doubtful accounts

Other current assets
Total current assets

Property and equipment (Notes 3, 4 and 6):

Other
Total property and equipment

Investments and other assets:
Investments in securities (Note 15)

Total investments and other assets
Total assets
The accompanying Notes are an integral part of these statements.

16

LIABILITIES AND NET ASSETS

Millions of yen
2019
2018

Current liabilities:
Short-term bank loans (Notes 4, 7 and 14)
Current portion of long-term debt (Notes 4, 7, 14 and 16)
Trade notes and accounts payable (Notes 8 and 14)
Lease obligations (Note 14)
Income taxes payable
Other current liabilities
Total current liabilities
Long-term liabilities:
Long-term debt, less current portion thereof (Notes 4, 7, 14 and 16)
Lease obligations (Note 14)
Deferred tax liability (Note 19)
Deferred tax liabilities from revaluation reserve for land (Note 6)
Retirement benefits for directors and corporate auditors
Net defined benefit liability (Note 17)
Provision for loss on guarantees
Other long-term liabilities
Total long-term liabilities
Total liabilities
Net assets
Shareholders’ equity (Note 18):
Common stock:
Authorized: 29,920,000 shares in 201929,920,000 shares in 2018
Issued: 9,761,011 shares in 2019
9,761,011 shares in 2018
Capital surplus
Retained earnings
Treasury stock, at cost: 696,744 shares in 2019695,472 shares in 2018
Total shareholders’ equity
Other comprehensive income
Unrealized gain on other securities
Revaluation reserve for land (Note 6)
Remeasurements of defined benefit plans (Note 17)
Accumulated other comprehensive income (Note 11)
Minority interests:
Minority interests
Total net assets
Total liabilities and net assets
The accompanying Notes are an integral part of these statements.

17

Thousands of
U.S. dollars(Note 1)2019

¥9,748
3,857
13,043
2,444
1,892
8,644
39,632¥ 9,700
654
12,484
2,568
1,522
7,682
34,612$87,048
34,449116,471
21,825
16,90077,188353,890

7,931
4,650
2,672
3,765
186
7,095
57
1,013
27,37267,004

10,953
4,979
1,896
3,765
153
6,931
57
1,347
30,08364,69670,821
41,522
23,86833,622
1,668
63,359510
9,047
244,417598,307

14,182
11,69934,583

14,182
11,69930,770126,642
104,467
308,812(2,063)58,402(2,055)54,596(18,426)
521,495

4,697
6,352
259
11,310

2,901
6,352
368
9,623

41,94956,7282,317
100,99442
69,754¥136,759

37
64,257¥128,953

379
622,868$1,221,175

Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
TONAMI HOLDINGS CO., LTD.
AND CONSOLIDATED SUBSIDIARIESFor the years ended March 31, 2019 and 2018
Thousands of
U.S. dollars(Note 1)
2019

Millions of yen
2019
2018

Operating revenues (Note 22):
¥137,436¥130,886$1,238,282

137,436

130,886

1,238,282

122,932

118,141

1,107,601

7,228

7,113

65,129130,161

125,255

1,172,731

7,275

5,631

65,551

Interest and dividend income

356

348

3,214

Equity in earnings of unconsolidated subsidiaries and affiliates

103

123

931

Loss on sale of property and equipment, net

54

87

490

Interest expenses

(216)

(219)

(1,955)

Impairment losses (Note 9)

(347)

(163)

(3,129)Loss on impairment of goodwill (Note 10)

—

(639)

—

Other

31

100

284

(18)

(363)

(165)

7,257

5,268

65,386

Current

2,683

2,201

24,177

Deferred

23

(102)

213

2,707

2,099

24,390

4,550

3,169

40,995

Operating revenues
Operating costs and selling, general and administrative expenses:
Operating cost (Note 20)
Selling, general and administrative expenses (Note 20)
Operating income (Note 22)
Other income and expenses:

Income before income taxes and minority interests
Income taxes (Note 19):

Net income before minority interests
Minority interests
Net income
Minority interests
Net income before minority interests

10

9

98

¥4,539¥ 3,159$40,897

10

9

98

4,550

3,169

40,995

1,794

545

16,165

—

—

—

(109)

137

(985)

2

0

22

Other comprehensive income (Note 11):
Valuation difference on other securities
Revaluation reserve for landRemeasurement of defined benefit plans
Share of other comprehensive income (loss) of associates accounting for using the equity method
Total other comprehensive income
Total comprehensive income for the year

1,687

683

15,201¥6,237¥ 3,852$56,196¥6,226¥ 3,843$56,098

10

9

98

Total comprehensive income attributable to:
Owners of the parent
Minority interests
The accompanying Notes are an integral part of these statements.

18

Consolidated Statements of Changes in Net Assets
TONAMI HOLDINGS CO., LTD.
AND CONSOLIDATED SUBSIDIARIESFor the years ended March 31, 2019 and 2018

Millions of yen
Shares ofcommonstock(thousands)

Commonstock

CapitalsurplusRetainedearnings

Accumulated
Total
Unrealized Revaluation Remeasurements other comof defined prehensive
shareholders’ gain on other reserveincomeequitysecurities
for land benefit plans

Treasurystock¥6,378¥231 ¥8,965

Total
net assets

9,761 ¥14,182 ¥11,699 ¥28,310¥(2,037) ¥52,154

Cash dividends applicable to the year (¥44 per share)

(725)

(725)

(725)

Net income

3,159

3,159

3,159

—

—

25

25

—

—

(17)

(17)

Balance as at April 1, 2017

¥2,355

Minority
interests¥32 ¥61,152

Change in ownership interests of the parent arisingfrom transactions with non-controlling shareholders

25

Reversal of Revaluation reserve for land
Change of scope of equity method(17)

Treasury stock
Net changes in items other than shareholders’ equity

—

545

(25)

137

657

5

663

Balance as at March 31, 2018

9,761 ¥14,182 ¥11,699 ¥30,770¥(2,055) ¥54,596¥2,901¥6,352¥368 ¥9,623¥37 ¥64,257

Balance as at April 1, 2018

9,761 ¥14,182 ¥11,699 ¥30,770¥(2,055) ¥54,596¥2,901¥6,352¥368 ¥9,623¥37 ¥64,257

Cash dividends applicable to the year (¥90 per share)

(725)

(725)

(725)

Net income

4,539

4,539

4,539

from transactions with non-controlling shareholders——

Reversal of Revaluation reserve for land——

Change of scope of equity method

—

—

(8)

(8)

Change in ownership interests of the parent arising(8)

Treasury stock

—

1,796

—

¥(2,063) ¥58,402¥4,697¥6,352

Net changes in items other than shareholders’ equity

Balance as at March 31, 2019

9,761 ¥14,182 ¥11,699 ¥34,583

(109)

1,687

4

¥259 ¥11,310

1,691¥42 ¥69,754

Thousands of U.S. dollars (Note 1)
Commonstock

Balance as at April 1, 2018

CapitalsurplusRetainedearnings

Treasurystock

Accumulated
Total
Unrealized Revaluation Remeasurements other comshareholders’ gain on other reserveof defined prehensive
equitysecurities
for land benefit plansincome$127,783 $105,408 $277,232 $(18,517) $491,906 $26,140 $57,239

Minority
interests

Total
net assets$3,324 $86,703$340 $578,950

Cash dividends applicable to the year ($0.8109 per share)(6,535)(6,535)—(6,535)

Net income

40,89740,897—40,897from transactions with non-controlling shareholders

—

—

—

Reversal of Revaluation reserve for land

—

—

—

Change of scope of equity method

—

—

—

(75)

—

(75)

Change in ownership interests of the parent arising(75)

Treasury stock——(985) 15,201$127,783 $105,408 $311,594 $(18,592) $526,193 $42,327 $57,239$2,338 $101,904

Net changes in items other than shareholders’ equity

Balance as at March 31, 201916,18642

15,243$382 $628,480

1. The accompanying Notes are an integral part of these statements.
2. The Company conducted a 1-for-10 reverse stock split of its shares of common stock effective October 1, 2017. Accordingly, the number of shares of common stock outstanding was calculated under the assumption that the said reverse stock split had been conducted at the beginning of the fiscal year ended March 31, 2018.

19

Consolidated Statements of Cash FlowsTONAMI HOLDINGS CO., LTD.
AND CONSOLIDATED SUBSIDIARIESFor the years ended March 31, 2018 and 2017

Millions of yen
2019
2018

Cash flows from operating activities:
Income before income taxes and minority interests
Depreciation and amortization
Impairment losses
Loss on impairment of goodwill
Gain on disposal of property and equipment
Gain on sales of investment in securities
Loss on devaluation of investments in securities
Loss on devaluation of golf club memberships
Amortization of goodwill
Equity in earnings of unconsolidated subsidiaries and affiliates(Decrease) increase in allowance for doubtful accounts
Decrease in net defined benefit liability
Increase (decrease) in directors’ and corporate auditors’ retirement benefits
Increase in accrued bonuses to employees
Interest and dividend income
Interest expenses
Decrease (increase) in trade receivables
Decrease (increase) in inventories(Decrease) increase in accounts payable
Increase in accrued consumption taxes
Other, net
SubtotalInterest and dividends received
Interest paid
Income taxes paid
Net cash provided by operating activities

Thousands of
U.S. dollars(Note 1)
2019

¥7,257
5,134
347
—
(54)
(0)
114
—
60
(103)
(9)
27
16
157
(356)
216
(729)
(134)
158
(62)
474
12,515375(215)(2,208)
10,466¥ 5,268
5,089
163
639
(87)
0
120
0
203
(123)
34
17
0
68
(348)
219
(1,114)
18
342
97
418
11,030348(219)(2,312)8,846$65,386
46,263
3,131
—
(490)
(0)
1,029
—
549
(931)
(86)
245
144
1,419
(3,284)
1,955(6,571)(1,209)
1,430
(563)
4,272
112,759
3,381(1,944)(19,896)
94,301

Cash flows from investing activities:
Purchase of time deposits
Proceeds from redemption of time deposits
Purchase of property and equipment
Proceeds from sales of property and equipment
Purchase of investments in securities
Proceeds from redemption of investments in securities(Payment for) proceeds from purchase of investments in consolidated subsidiaries
Investments in loans receivable
Proceeds from collection of loans receivable
Other, net
Net cash used in investing activities(30)
22(3,517)
155
(751)
0
(409)
(457)
277
(57)
(4,768)(22)
22(2,775)
184
(21)
21
(198)
(314)
275
(60)
(2,888)(270)
198(31,696)
1,405(6,772)0(3,691)(4,118)2,502(518)(42,959)

Cash flows from financing activities:
Net increase (decrease) in short-term loans
Proceeds from long-term debt
Repayment of long-term debt
Repayments of lease obligations
Purchase of treasury stock
Dividends paid
Dividends paid to minority interests
Net cash used in financing activities

—
600
(711)
(2,847)
(8)
(725)
(6)
(3,698)

10
100
(829)
(2,800)
(17)
(725)
(4)
(4,266)—
5,406(6,407)(25,653)(75)(6,535)(56)(33,320)

2,000
17,262¥19,262

1,690
15,571¥17,262

18,021
155,529$173,551

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 12)
The accompanying Notes are an integral part of these statements.

20Notes to the Consolidated Financial Statements
TONAMI HOLDINGS CO., LTD.
AND CONSOLIDATED SUBSIDIARIES

1 Basis of presenting financial statements
The accompanying consolidated financial statements have been prepared based on the accounts maintainedby Tonami Holdings Co., Ltd. (the “Company”) and consolidated subsidiaries in accordance with accounting
principles generally accepted in Japan, which differ in certain respects as to the application and disclosure
requirements of International Financial Reporting Standards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements havebeen made to the Company’s consolidated financial statements issued domestically in order to present themin a format which is more familiar to readers outside Japan.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which theCompany is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts
are included solely for the convenience of readers outside Japan and have been made at the rate of ¥110.99 to
U.S.$1, the approximate rate of exchange at March 31, 2019. Such translations should not be construed as
representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.

2 Summary of significant accounting policies(a) Consolidation

The accompanying consolidated financial statements as of March 31, 2019 include the accounts of theCompany and its 24 (23 in 2018) consolidated subsidiaries and 6 (6 in 2018) affiliates accounted for by theequity method.
Under the control or influence concept, those companies in which the Company, directly or indirectly, isable to exercise control over operations are fully consolidated, and those companies over which the Company
has the ability to exercise significant influence are accounted for by the equity method. Four subsidiaries andone affiliate considered insignificant in view of total assets, operating revenues, net income and retained earnings are excluded from the scope of consolidation and not accounted for by the equity method.
The difference between the cost of an acquisition and the fair value of the net assets of the acquired subsidiary at the date of acquisition is being equally amortized over a period of 5 years after incurred. However, if theamount is immaterial, it is fully charged to income at the date of acquisition.
All significant intercompany balances and transactions have been eliminated in consolidation.
(b) Marketable securities and investments in securities

Securities, except for investments in unconsolidated subsidiaries and affiliates, are classified as trading securities, held-to-maturity securities or other securities. Trading securities are carried at fair value. Held-to-maturity
securities are carried at amortized cost. Marketable securities classified as other securities are carried at fairvalue with any unrealized gain or loss reported as a separate component of net assets, net of taxes.
Non-marketable securities classified as other securities are carried at cost determined by the moving-averagemethod.
Cost of securities sold is determined principally by the moving average method.
(c) Inventories

Inventories are stated at the lower of cost, determined principally by the last purchase price method or partiallyby the specific identification method, or net selling value.
(d) Derivatives

Derivative financial instruments are stated at fair value.
Interest-rate swaps which meet specific matching criteria and qualify for hedge accounting treatment are not
re-measured at market value; however, the differentials paid or received under the respective swap agreements
are recognized and included as interest expense or income.

21

(e) Property and equipment and intangible assets

Property and equipment are stated at cost. However, under Japanese tax law, capital gains arisen from disposals
and other similar transactions are deducted from the cost of the property and equipment acquired in substitution.
Depreciation of property and equipment, except for leased assets, is computed by the declining balancemethod over the useful life of the assets as determined by law, except for buildings and structures, which are
depreciated by the straight-line method.
The ranges of useful lives of principal property and equipment are as follows:
Buildings and structures 2–67 years
Machinery and vehicles 2–17 years
Leased assets under the finance lease arrangements which do not transfer ownership of the leased assets tothe lessee are depreciated by the straight-line method over the respective lease periods without residual values.
However, if the guaranteed salvage value is specified in the lease contracts, they are depreciated by the straightline method considering such salvage value.
(f) Allowance for doubtful accounts

Allowance for doubtful accounts is provided in an amount sufficient to cover possible losses on collection. Saidamount is computed by applying the rate of actual losses on collection experienced in the past with respect togeneral trade receivables and by individually reviewing their collectibility with respect to certain doubtfulreceivables.
(g) Provision for bonuses

Provision for bonuses is provided based on the estimated amount payable.
(h) Retirement benefits for directors and corporate auditors

Some consolidated subsidiaries provide necessary payments to directors and corporate auditors at the end of
the fiscal year determined according to internal company rules to a reserve for retirement benefits for directors
and corporate auditors.
(i) Provision for loss on guarantees

Provision for loss on guarantees is provided in an amount sufficient to cover a possible loss on guarantees, taking into consideration the financial condition of the parties to which guarantees have been provided.
(j) Accounting method for retirement benefits

Full-time employees of the Company and its consolidated subsidiaries are entitled to a lump-sum payment
upon retirement or severance of employment. In order to provide for the employees’ severance and retirement
benefits, the Company and its consolidated subsidiaries record a net defined benefit liability, which is includedin the liability section of the consolidated balance sheet, based on the estimated amounts of projected benefit
obligation and plan assets at the balance sheet dates. In calculating the retirement benefit obligations, the benefit formula basis is used in determining the amount of the expected retirement benefit obligation attributed toservice performed up to the end of the current fiscal year.
Actuarial gains and losses are recognized in expenses using the straight-line method over 9 years (a period
not exceeding the employees’ average remaining service years) commencing with the year following theiroccurrence.
Certain consolidated subsidiaries use the simplified method whereby the amount that would be required tobe paid if all their eligible employees voluntarily terminated their employment as of the balance sheet date istreated as projected benefit obligation for the calculation of net defined benefit liability and retirement benefit
cost.
(k) Foreign currency translation

All monetary assets and liabilities denominated in foreign currencies are translated into yen at the current
exchange rates at the balance sheet date, and any gain or loss on translation is credited or charged to income.
(l) Income taxes

Income taxes consist of corporate income tax, inhabitant taxes and enterprise tax.
The Company and its consolidated subsidiaries recognize tax effects of temporary differences between the
carrying amounts of assets and liabilities for tax and financial reporting.
22

(m) Cash equivalents

Cash equivalents include deposits placed with banks on demand and highly liquid investments with insignificant risk of changes in value which have maturities of three months or less when purchased.
(n) Net income per share

Basic income per share is computed using the weighted-average number of shares of common stock outstanding, which represents the number of issued shares less treasury stock, during each year.
(Changes in presentation methods)(Changes associated with the application of “Partial Amendments to Accounting Standard for Tax EffectAccounting, etc.”,
Effective from the beginning of the fiscal year ended March 31, 2019, the Company has applied “Partial
Amendments to Accounting Standard for Tax Effect Accounting, etc.” (ASBJ Statement No. 28, February 16,2018) and other standards, and accordingly deferred tax assets are presented under investments and other assets
and deferred tax liabilities are presented under long-term liabilities.
As a result, on the consolidated balance sheet for the previous fiscal year, of “deferred tax assets” amounting
to ¥829 million ($7,805 thousand) under “current assets,” ¥205 million ($1,929 thousand) is included in“deferred tax assets” amounting to ¥539 million ($5,079 thousand) under “investments and other assets” and¥624 million ($5,876 thousand) is offset against “deferred tax liabilities” under “long-term liabilities.”
Total assets for the previous fiscal year decreased by ¥624 million ($5,876 thousand) as a result of offsetting“deferred tax assets” and “deferred tax liabilities” of the same taxable entity.
Moreover, matters described in Note 8 (2) of the “Accounting Standard for Tax Effect Accounting” specified
in Paragraphs 3 and 4 of the “Partial Amendments to Accounting Standard for Tax Effect Accounting, etc.” havebeen added to the notes to tax effect accounting.
(Notes to consolidated statements of income)
Whereas “Reversal of allowance for doubtful accounts” was included in “Other” under “Other income and expenses” for the previous fiscal year, it is reported as a separate item for the current fiscal year because its amountexceeded ten-100ths of the total amount of other income and expenses. In order to reflect this change in the presentation method, the consolidated financial statements for the previous fiscal year have been restated.
As a result, on the consolidated statement of income for the previous fiscal year, ¥225 million ($2,123 thousand), which was included in “Other” under “Other income and expenses,” has been restated as “Reversal of
allowance for doubtful accounts” amounting to ¥16 million ($155 thousand) and “Other” amounting to ¥209
million ($1,967 thousand).

3 Property and equipment
Property and equipment are stated at the net book value in the consolidated balance sheets.
The amounts of accumulated depreciation were ¥64,815 million ($583,974 thousand) and ¥63,045 million
on March 31, 2019 and 2018, respectively. Capital gains resulting from disposals and other similar transactions
are deducted from the cost of property and equipment acquired in substitution.
The amounts deducted from the cost of property and equipment were ¥180 million ($1,623 thousand) and¥180 million on March 31, 2019 and 2018, respectively.

4 Short-term bank loans and long-term debt(a) Short-term bank loans

Short-term bank loans as at March 31, 2019 and 2018 were as follows:—
Millions of yen
2019
2018

SecuredUnsecured¥1,9707,778Interest rates range from 0.33% to 1.500%.

23¥1,970
7,730

Thousands of
U.S. dollars
2019$17,749
70,083

(b) Long-term debt

Long-term debt as at March 31, 2018 and 2017 was as follows:—
Millions of yen
2019
2018

0.48% ¥5.0 billion unsecured straight bonds due 2021
1.000%-2.490% loans from financial institutions due 2016 to 2020 and thereafter:
SecuredUnsecured
Total
Less: amount due within one year

Thousands of
U.S. dollars
2019¥5,000¥5,000$45,049

86
6,703
11,7893,857¥7,931227
6,380
11,607654¥10,953

775
60,394106,218
34,759$71,459

The maturity date of the ¥5.0 billion 0.48% unsecured straight bonds, issued in February 2016, is February
4, 2021.
The annual maturities of long-term debt outstanding as at March 31, 2019 are as follows:—
Year ending March 31,

2020
2021
2022
2023
2024
2025

Millions ofyen

Thousands of
U.S. dollars¥3,857
5,129
2,200
61
515
24

$34,759
46,212
19,827
555
4,647
219

(c) Pledged assets

Property and equipment having a net value of ¥4,682 million ($42,190 thousand) was pledged as collateral for
short-term bank loans and long-term debt as at March 31, 2019.

5 Contingent liabilities
As at March 31, 2018, the Company was contingently liable as follows:—
Notes endorsed
OthersMillions ofyen

Thousands of
U.S. dollars

¥3
¥82

$29
$744

6 Revaluation reserve for land
In accordance with the Law concerning Revaluation of Land enacted on March 31, 1998, the Company has
revaluated its owned land used for business operations as at March 31, 2000 and reported a revaluation reserve
for land under “Net assets.”
The revaluated book value of land was determined based on the value of land registered on the cadastres ortheir supplementary records, which are provided by the Local Tax Law under the Law Concerning Revaluationof Land, after making reasonable adjustments.
Difference between the fair market value of revalued land at March 31, 2018
and the revalued book value

Millions ofyen

Thousands of
U.S. dollars¥8,122$73,178

7 Restrictive financial covenants(1) 	The Company has entered into overdraft facility and credit line commitment agreements (term of contractof three years) with ten banks for the purpose of efficient procurement of working capital.
		 Outstanding balance of unused credit concerning overdraft facility and credit line commitment agreements at March 31, 2018, was as follows:

24Maximum credit line of overdraft facility and commitment agreement
Used credit
Total

Millions ofyen

Thousands of
U.S. dollars¥3,000—¥3,000$27,029—$27,029	The agreements include restrictive financial covenants requiring net assets as of the fiscal year end to exceed
predetermined amount.
(2)	Of borrowings of the Company and certain subsidiaries, syndicated loan agreements (outstanding balance
at March 31, 2019: ¥200 million ($1,802 thousand)) include restrictive financial covenants requiring assets
at a fiscal year-end to exceed the predetermined amount.

8 Notes due at the end of the fiscal year
Notes due at the end of the fiscal year are treated as if they were settled on the due date.
Since the last day of the fiscal year, March 31, 2019, was a holiday for financial institutions, the following
notes due at the end of the fiscal year were treated as if they were settled on the due date.
Trade notes receivable
Trade notes payable

Millions ofyen

Thousands of
U.S. dollars

¥345
¥210

$3,114$1,894

9 Impairment losses
The Group recorded impairment losses on the asset groups stated below.
Fiscal year ended March 31, 2018
As a comprehensive logistics enterprise, the Group employs management accounting at offices that belong toroad haulage business or other business groups.
The Group’s business sites nationwide are the Group’s bases for offering services as a comprehensive logistics
enterprise to customers and, in many cases, offices of two or more business groups are located at a business site
to respond to customers.
Offices of business groups complement one another and a business site is a unit that generates cash flows.
Thus, the aggregate of assets of business groups’ offices located at a business site constitutes an asset group.
With regard to an asset group for which the Company recognized impairment loss, the future cash flow is
expected to be insufficient due to factors such as increases in personnel expenses, fuel costs, and subcontractor
fees. Accordingly, the book value of the asset group was reduced to the recoverable amount and ¥163 million($1,473 thousand) was recognized as an impairment loss.
The impairment loss comprised ¥90 million ($818 thousand) for land, ¥3 million ($29 thousand) for buildings, and ¥1 million ($9 thousand) for structures in Shizuoka City, Shizuoka Prefecture, and ¥68 million ($617
thousand) for land in Kumagaya City, Saitama Prefecture.
The recoverable amounts of the impaired asset group are measured by net sales value. Net sales value isassessed principally based on the appraisal value quoted by a real-estate appraiser.
Fiscal year ended March 31, 2019As a comprehensive logistics enterprise, the Group employs management accounting at offices that belong toroad haulage business or other business groups.
The Group’s business sites nationwide are the Group’s bases for offering services as a comprehensive logistics
enterprise to customers and, in many cases, offices of two or more business groups are located at a business site
to respond to customers.
Offices of business groups complement one another and a business site is a unit that generates cash flows.
Thus, the aggregate of assets of business groups’ offices located at a business site constitutes an asset group.
With regard to an asset group for which the Company recognized impairment loss, the future cash flow is
expected to be insufficient due to factors such as increases in personnel expenses, fuel costs, and subcontractor
fees. Accordingly, the book value of the asset group was reduced to the recoverable amount and ¥163 million($1,539 thousand) was recognized as an impairment loss.

25

The breakdown is as follows: ¥47 million ($432 thousand) for land, ¥29 million ($268 thousand) for buildings, and ¥3 million ($33 thousand) for structures regarding freight forwarding facilities (Hakui-gun, Ishikawa
Prefecture, etc.); ¥19 million ($173 thousand) for buildings, ¥3 million ($28 thousand) for structures, and ¥7
million ($69 thousand) for other (machinery) regarding warehouse facilities (Kashiwa-shi, Chiba Prefecture,etc.); ¥229 million ($2,072 thousand) for land and ¥6 million ($55 thousand) for buildings regarding leased
property (Toyama-shi, Toyama Prefecture, etc.).
The recoverable amounts of the impaired asset group are measured by net sales value. Net sales value isassessed principally based on the appraisal value quoted by a real-estate appraiser.

10 Loss on impairment of goodwill
The Group recorded a loss on impairment of goodwill as stated below.
Fiscal year ended March 31, 2018
Goodwill had been recorded for Take One Co., Ltd. based on the assumption of the excess earnings power
anticipated upon acquisition of its shares. As a result of re-examination of its earnings power and the futurebusiness plan, the initially anticipated earnings are no longer expected and the unamortized balance amounting
to ¥639 million ($6,021 thousand) was recorded as a loss on impairment of goodwill.
The recoverable amount of the asset in question is measured by value in use. The recoverable amount isassessed to be zero.
Fiscal year ended March 31, 2019
Not applicable

11 Consolidated statement of comprehensive income
Reclassification adjustments and tax effects relating to other comprehensive income
Thousands of
U.S. dollars
2019

Millions of yen
2019
2018

Valuation difference on other securities:
Amount arising during the year
Reclassification adjustment
Before tax-effect adjustment
Tax effect
Valuation difference on other securities
Revaluation reserve for land:Tax effectRemeasurements of defined benefit plans:
Amount arising during the year
Reclassification adjustment
Before tax-effect adjustment
Tax effectRemeasurements of defined benefit plans
Share of other comprehensive income of affiliates accounted for using equity method:Amount arising during the year
Total other comprehensive income¥2,582
(0)
2,582
(788)
1,794

¥783
1
784
(239)
545

$23,267(0)
23,266(7,102)
16,165

—

—

—

(169)
16
(153)
43
(109)

89
111
200
(63)
137

(1,526)147(1,379)
394
(985)

2
¥1,6870¥ 68322$ 15,201

12 Cash flow statements
Reconciliation of cash and time deposits shown in the consolidated balance sheets and cash and cash equivalents
shown in the consolidated statements of cash flows as at March 31, 2019 and 2018 are as follows:—
Millions of yen
2019
2018

Cash and time deposits
Time deposits with maturities exceeding three months
Cash and cash equivalents

26¥19,407(145)¥19,262¥17,283(21)¥17,262

Thousands of
U.S. dollars
2019$174,861(1,310)$173,551

13 Leases(a)	Finance leases other than those which are deemed to transfer the ownership of the leased assets to the lessee• Contents of leased assets: Tangible fixed assets (mainly, machinery, equipment and vehicles for distribution-related business)• Depreciation method: Leased assets are depreciated by the straight-line method over the respective lease
periods without residual values. However, if the guaranteed salvage value is specified in the lease contracts, they are depreciated by the straight-line method considering such salvage value.
(b)	Finance lease transactions which commenced prior to April 1, 2008 and do not transfer ownership of theleased assets to the lessee are accounted for as operating lease transactions as before.
The following are pro forma amounts of the acquisition costs, accumulated depreciation, accumulated
impairment losses and net book value of leased property if they were capitalized as of March 31, 2019 and2018 for finance leases accounted for as operating leases:—Millions of yen
2019
2018

Acquisition costs:
Buildings
Accumulated depreciation:
Buildings
Accumulated impairment losses:
Buildings
Net book value:
Buildings

Thousands of
U.S. dollars
2019¥2,316¥2,316¥5,833¥5,833$20,875$20,875¥1,330¥1,330¥3,656¥3,656$11,985$11,985

¥756
¥756

¥756
¥756

$6,813$6,813

¥230
¥230

¥1,421¥1,421$2,078$2,078

Amounts of depreciation expense equivalents and interest expense equivalents for the years ended March 31,
2019 and 2018 were as follows:—
Millions of yen
2019
2018

Depreciation expense
Interest expense

¥58
20

¥196
59

Thousands of
U.S. dollars
2019

$523
181

Lease payments relating to finance leases accounted for as operating leases amounted to ¥187 million ($1,692 thousand) and ¥365 million, which were equal to the depreciation expense of the leased assets computed by thestraight-line method over the lease terms, for the years ended March 31, 2019 and 2018, respectively.
In the year ended March 31, 2019, impairment losses on leased assets amounting to ¥756 million were recorded.
Since these leased assets are off-balance-sheet, the equivalent amount is included in “Other long-term liabilities.”
Impairment losses on leased assets are realized over the lease term. Reversal of impairment losses on leased assets
recorded in the fiscal years ended March 31, 2019 and 2018, amounted to ¥42 million ($378 thousand) and ¥42
million, respectively.
Future minimum lease payments (including the interest portion thereon) and the balance of impairment losses
on leased assets as at March 31, 2018 and 2017 for finance leases accounted for as operating leases are summarized
as follows:—
Millions of yen
2019
2018

Due within one year
Due over one year
Total

¥112
421
¥533
¥168

Impairment losses on leased assets

27

¥233
1,705
¥1,939¥ 210Thousands of
U.S. dollars
2019$1,012
3,796$4,808$1,514(c) Operating leases
Millions of yen
2019
2018

Due within one year
Due over one yearTotal

¥2,563
9,166¥11,730¥1,408
5,930¥7,338

Thousands of
U.S. dollars
2019$23,097
82,592$105,689

14 Financial instruments and related disclosures(a) Financial instruments

The Group invests cash surplus, if any, in low risk financial assets and raises funds for short-term working
capital by bank borrowings. For capital investment, the Group raises necessary funds in light of the capital
investment plan by bank borrowings or issuance of corporate bonds. Derivatives are employed to mitigate
the risk of fluctuations in interest rates, and not used for speculative purposes.
Trade receivables such as notes and accounts are exposed to customer credit risk. For such credit risk, theGroup has established the risk management system to monitor and control payment term and balances ofcustomers.
Investments in securities such as equity securities are exposed to the market risk of fluctuation in market
prices, but major components are equity securities issued by the business partners and their fair values are
periodically reported to the directors responsible.
Almost all the trade payables such as notes and accounts payable are due within one year.
Of borrowings, short-term bank loans are used mainly to procure funds for operating transactions andlong-term debt and corporate bonds are used to procure funds for capital investment. For floating-rate debt,
derivative transactions (interest rate swaps) are used as hedges to avoid the risk of interest rate fluctuations
and fix interest payments.
The Company executes and manages derivative transactions in accordance with internal rules that specify
transaction authority, and since large borrowings are subject to the decision of the board of directors, theboard of directors also decides whether to enter into corresponding swap agreements. Moreover, theCompany enters into derivative transactions only with financial institutions with high credit ratings to mitigate counterparty default risk.
Trade payables and loans are exposed to the liquidity risk, but the Group controls such liquidity risk by
the monthly cash management plans prepared by each company.
(b) Fair value of financial instruments

The carrying amount, fair value and the related difference of the financial instruments as of March 31, 2019and 2018 were as indicated below. Financial instruments whose fair values are extremely difficult to determine are not included in the following tables.
Carrying
amountMillions of yen
Fair
value

¥19,407
3,115
19,768
10,259¥52,550¥19,407
3,115
19,768
10,259¥52,550

¥ —
—
—
—
¥ —

¥993
12,051
9,748
5,000
6,789
7,094
¥41,676—¥993
12,051
9,748
5,013
6,838
7,262
¥41,907
—

¥ —
—
—
13
49
167
¥231
—

For the year ended March 31, 2019

Assets:Cash and time deposits
Trade receivables – notes
Trade receivables – accounts
Investments in securities (other securities)
Total asset
Liabilities:
Trade notes payable
Trade accounts payable
Short-term bank loans
Bonds
Long-term debt
Lease obligations
Total liabilities
Derivatives:

28

DifferenceFor the year ended March 31, 2018

Assets:Cash and time deposits
Trade receivables – notes
Trade receivables – accounts
Investments in securities (other securities)
Total asset
Liabilities:
Trade notes payable
Trade accounts payable
Short-term bank loans
Bonds
Long-term debt
Lease obligations
Total liabilities
Derivatives:

Carrying
amountMillions of yen
Fair
value

¥17,283
2,886
19,1427,129¥46,441¥17,283
2,886
19,1427,129¥46,441

¥—
—
—
—
¥—

¥812
11,672
9,700
5,000
6,607
7,547
¥41,340—¥812
11,672
9,700
5,008
6,638
7,668
¥41,500
—

¥—
—
—
8
30
120
¥160
—

Difference

Thousands of U.S. dollars
Carrying
Fair
amountvalue
Difference

For the year ended March 31, 2019

Assets:Cash and time deposits
Trade receivables – notes
Trade receivables – accounts
Investments in securities (other securities)
Total asset
Liabilities:
Trade notes payable
Trade accounts payable
Short-term bank loans
Bonds
Long-term debt
Lease obligations
Total liabilities
Derivatives:$174,861
28,069178,108
92,436$473,475$174,861
28,069178,108
92,436$473,475

$—
—
—
—
$—

$8,950
108,580
87,83245,04961,16963,918$375,498—$8,950
108,580
87,83245,171
61,61765,431$377,581
—

$—
—
—
122
448
1,513
$2,083—

For cash and time deposits, trade notes receivable and trade accounts receivable, the carrying amount is presented as the fair value since the fair value approximates the carrying amount because of the short maturity ofthese instruments.
For investments in securities, the fair value of equity securities is determined using the quoted prices of thestock exchanges. Unlisted equity securities whose fair value is extremely difficult to identify in the carrying
amount of ¥2,701 million ($24,342 thousand) are not included in the above table. The unlisted equity securities were restated at fair value and related loss on impairment amounting to ¥114 million was charged toincome for the year ended March 31, 2018.
For trade notes payable, trade accounts payable and short-term bank loans, the carrying amount is presented
as the fair value since the fair value approximates the carrying amount because of the short maturity of these
instruments.
For bonds, lease obligations and long-term debt, the fair value is determined using the present value of
aggregated principal and interest discounted at a rate assumed if the new loans or lease arrangements weremade.
For derivatives, please see Note 16 “Derivative transactions”.
(c) Information about maturities of financial instruments

Annual maturities of monetary receivables and other securities with contractual maturities as of March 31,
2019 and 2018 were as follows:29Millions of yen

For the year ended March 31, 2019

Time deposits
Trade notes receivable
Trade accounts receivable
Investments in securities (other securities with maturities)
Total

Due in one
year

Due after one
year throughfive years

Due after five
years throughten years¥19,383
3,115
19,768—¥42,267

¥—
—
—
—
¥—

¥—
—
—
30
¥30

Due in one
year

Due after one
year throughfive years

Due after five
years throughten years¥17,262
2,886
19,142¥39,291

¥—
—
—
¥—

¥—
—
—
¥—

Due after
ten years

¥—
—
—
—
¥—

Millions of yen

For the year ended March 31, 2018

Time deposits
Trade notes receivable
Trade accounts receivable
Total
For the year ended March 31, 2019

Due in one
year

Time deposits
Trade notes receivable
Trade accounts receivable
Investments in securities (other securities with maturities)
Total

Thousands of U.S. dollars
Due after one Due after five
year through years throughfive years
ten years$174,643
28,069178,108—$380,820

$—
—
—
—
$—

Due after
ten years

¥—
—
—
¥—

Due after
ten years

$—
—
—
270
$270

$—
—
—
—
$—

Annual maturities of bonds, long-term debt, lease obligations, and other interest-bearing debts as of March 31, 2019and 2018 are as follows:
Millions of yen

For the year ended March 31, 2019

Short-term debt
Bonds
Long-term debt
Lease obligations
Total

Due in one
year

Due after one
year throughtwo years¥9,748
—
3,857
2,444
¥16,050

¥ —
5,000
129
1,870
¥6,999

Due in one
year

Due after one
year throughtwo years

Due after two Due after three
years through years throughthree years
four years

¥

—
—
2,200
1,273
¥3,473

¥ —
—
61
869
¥931

¥ —
—
515
410
¥926

Due after two Due after three
years through years throughthree years
four years

Due after four
years throughfive years¥9,700—
654
2,568¥12,922

¥

—
—
3,790
1,997
¥5,788

Due in one
year

Due after one
year throughtwo years

¥ —
—
24
226
¥250

$87,832—
34,75922,022$144,613$—45,0491,163
16,856$63,068

¥ —
5,000
60
1,450
¥6,511

¥

—
—
2,042
841
¥2,883

Due after
five years

¥ —
—
19
432
¥452

¥ —
—
40
257
¥297

Thousands of U.S. dollars

For the year ended March 31, 2019

Short-term debt
Bonds
Long-term debt
Lease obligations
Total

Due after
five years

Millions of yen

For the year ended March 31, 2018

Short-term debt
Bonds
Long-term debt
Lease obligations
Total

Due after four
years throughfive years

30

Due after two Due after three
years through years throughthree years
four years$——
19,827
11,471$31,298

$

—
—
555
7,835
$8,389

Due after four
years throughfive years

Due after
five years

$

$

—
—
4,647
3,697
$8,344

—
—
219
2,036
$2,256

15 Marketable securities and investments in securities
No trading securities or held-to-maturity securities were held at March 31, 2019 or 2018. Securities classified
as other securities are included in “marketable securities” and “investments in securities” in the accompanying
consolidated balance sheets.
The components of unrealized gain or loss on marketable securities classified as other securities at March 31,
2019 and 2018 are summarized as follows:—
Carrying
value

Millions of yen
Acquisitioncosts¥9,495——¥2,489——¥7,006
—
—

733
30
—
¥10,259

1,050
30—¥3,570(316)——¥6,689Carrying
value

Millions of yen
Acquisition
costs

At March 31, 2019

Unrealized gain:
StocksBonds
Other
Unrealized loss:
Stocks
Bonds
Other
Total
At March 31, 2018

Unrealized gain:
StocksBonds
Other
Unrealized loss:
Stocks
Bonds
Other
Total

Unrealized
gain (loss)

Unrealized
gain (loss)¥6,406——¥2,159——¥4,246
—
—

723
—

864
—

¥7,129¥3,023(140)——¥4,105

Thousands of U.S. dollars
Carrying
Acquisition
Unrealized
value
costs
gain (loss)

At March 31, 2019

Unrealized gain:
StocksBonds
Other
Unrealized loss:
Stocks
Bonds
Other
Total

$85,557——$22,433——$63,124
—
—

6,609
270
—
$92,436

9,462
270
—
$32,165(2,853)——$60,271

Equity securities classified as other securities were restated at fair value and related loss on impairment amounting to ¥1 million was charged to income for the year ended March 31, 2018.
Equity securities whose fair value is 50% or less than the acquisition cost are necessarily restated at fair value
and those whose fair value is between 50% and 30% of the acquisition cost are restated at fair value, if they are
judged to be unrecoverable considering the trend of the market value for a past certain period and performances of the issuers.

31

16 Derivative transactions(a) Derivative transactions to which hedge accounting is not applied
There is no applicable transaction.
(b) Derivative transactions to which hedge accounting is applied
Hedge accounting method: Special treatment for interest rate swaps
Type of transactions: Interest rate swaps:
Fixed rate payment/Floating rate receipt
Major hedged item: Long-term debt
Millions of yen
2019
2018

Contract amountContract amount due after one year
Fair value

¥200
—
*

¥600
200
*

Thousands of
U.S. dollars
2019$1,802—**The fair value is included in the fair value of the long-term debt as hedged instruments, since the interest rate
swaps which qualify for hedge accounting and meet specific criteria are not remeasured at market value, but
the differentials paid or received under the swap agreements are recognized and included in interest expenses
or income (special treatment).

17 Employees’ severance and retirement benefits(a) Outline of retirement benefit plans
In order to provide for the employees’ severance and retirement benefits, the Company and its consolidated
subsidiaries have funded and unfunded defined benefit plans and defined contribution plans.
Under the defined benefit corporate pension plans (all of which are funded plans), a lump sum or a pension based on the salary and the service years is paid. However, the Company and certain consolidated subsidiaries have introduced cash balance plans for the defined benefit corporate pension plans. In these plans,
hypothetical individual employee accounts correspond to the funded amount and the principal of the pension amount for each participant. In each hypothetical individual employee account, the contributions
based on the salary standard and interest amount based principally on the market interest rates are accumulated.
Under the lump-sum payment plans (all of which are unfunded plans), a lump sum based on the salaryand service years are is paid as retirement benefits. The Company and certain consolidated subsidiaries
transferred part of the lump-sum payment plans to the defined contribution pension plans.
In the defined benefit corporate pension plans and lump-sum payment plans of certain consolidated subsidiaries, net defined benefit liability and retirement benefit cost are calculated by the simplified method.
(b) Defined benefit plans
Reconciliation of beginning and ending balances of retirement benefit obligation (excluding the plan forwhich the simplified method is applied)
Millions of yen
2019
2018

Retirement benefit obligation at beginning of year
Cumulative effects of changes in accounting policies
Restated balance at beginning of year
Service cost
Interest cost
Actuarial gain or loss
Payment of retirement benefits
Retirement benefit obligation at end of year

¥12,554—
12,554
650
100
57
(873)
¥12,490¥12,598—
12,598
650
100
82
(877)
¥12,554

Thousands of
U.S. dollars
2019$113,115—
113,115
5,859
905
522
(7,869)$112,533

Reconciliation of beginning and ending balances of plan assets (excluding the plan for which the simplified
method is applied)32

Millions of yen
2019
2018

Plan assets at beginning of year
Expected return on plan assets
Actuarial gain or loss
Contributions by the Company
Employee contributions
Payment of retirement benefits
Plan assets at end of year

¥6,556
163
(111)
76
62
(366)
¥6,380¥6,428
160
172
83
69
(357)
¥6,556

Thousands of
U.S. dollars
2019$59,0691,477(1,004)691
562(3,304)$57,491

Reconciliation of beginning and ending balances of net defined benefit liability for which the simplified
method is applied
Millions of yen
2019
2018

Net defined benefit liability at beginning of year
Retirement benefit costs
Payment of retirement benefits
Contributions to the plan
Increase resulting from change in scope of consolidation
Net defined benefit liability at end of year

¥932
124
(65)
(19)
13
¥986

Thousands of
U.S. dollars
2019

¥940
118
(106)
(19)
—
¥932

$8,403
1,125
(590)
(175)
124
$8,887

Reconciliation of ending balances of retirement benefit obligation and plan assets and net defined benefit
liability/asset on the consolidated balance sheets
Millions of yen
2019
2018

Funded retirement benefit obligation
Plan assets
Unfunded retirement benefit obligation
Net amount of liability (asset) on the consolidated balance sheets
Net defined benefit liability
Net defined benefit asset
Net amount of liability (asset) on the consolidated balance sheets¥7,679(6,513)
1,165
5,929
7,095
7,095
—
¥7,095¥7,668(6,691)
976
5,954
6,931
6,931
—
¥6,931

Thousands of
U.S. dollars
2019$69,192(58,688)
10,50453,426
63,93063,930—$63,930

Note: Including the plans for which the simplified method is applied
Retirement benefit costs and breakdown
Millions of yen
2019
2018

Service cost (Note 1)
Interest cost
Expected return on plan assets
Amortization of actuarial gain or loss
Retirement benefit costs calculated by the simplified method
Retirement benefit costs for defined benefit plans

¥587
100
(163)
16
124
¥665

¥581
100
(160)
111
118
¥751

Thousands of
U.S. dollars
2019$5,298905(1,477)147
1,125$5,998(Note 1) Employee contributions to the corporate pension fund are not included in the amounts shown.

33

Items recorded in other comprehensive income
Breakdown of items recorded in remeasurements of defined benefit plans (before tax effect deduction)
Millions of yen
2019
2018

Actuarial gain or loss¥(153)¥200

Thousands of
U.S. dollars
2019$(1,379)

Items recorded in accumulated other comprehensive income
Breakdown of items recorded in remeasurements of defined benefit plans (before tax effect deduction)
Millions of yen
2019
2018

Unrecognized actuarial gain or loss¥(387)¥(540)

2019

2018

50.4%
26.3%
12.2%
2.0%
9.1%
100.0%

44.1%
31.5%
11.8%
1.3%
11.3%
100.0%

Thousands of
U.S. dollars
2019$(3,490)

Plan assets
Plan asset components as a percentage of total plan assets

Bonds
StocksInsurance company general accounts
Cash and time deposits
Other
Total

Long-term expected rate of return on plan assets is determined considering the pension asset allocation andlong-term expected return on plan assets composed of various types of assets, at the present and in the
future.
Basis of actuarial calculation
2019

Discount rateLong-term expected return on plan assets

0.8%
2.5%

2018

0.8%
2.5%

(c) Defined contribution plan
Millions of yen
2019
2018

Required contributions to the defined contribution pension plan

¥315

¥320

Thousands of
U.S. dollars
2019$2,84118 Net assets
The Companies Act provides that an amount equal to at least 10% of the aggregate amount to be distributed as
cash dividends or cash appropriations must be transferred to capital surplus, which is part of the capital surplus account, or retained earnings, which is part of the retained earnings account, until the aggregate amountof capital surplus and retained earnings equals 25% of the common stock account.
Transfers from the retained earnings to common stock, capital surplus, retained earnings, other capital surplus, and other retained earnings may be made by resolution of the shareholders.
Under the Companies Act, distributions of surplus to shareholders may be made at any time by resolution of
the shareholders.
The Company’s Articles of Incorporation also provide that the Company may make distributions to shareholders based on a resolution of the Board of Directors, provided that such distributions are limited to once per
fiscal year.

34

Information concerning changes in net assets

Treasury stock
Class of shares

Common stock (shares)

At March 31, 2017

Increase

Decrease

At March 31, 2018

695,472

1,272—

696,744

Reason for the change:
Breakdown of the increase:
Increase attributable to purchase of shares constituting less than one unit

1,272 shares

19 Income taxes
As described in Note 2(j), the Company and its consolidated subsidiaries recognize tax effects of temporary
differences between the carrying amounts of assets and liabilities for tax and financial reporting.
Significant components of deferred tax assets and liabilities were as follows:—
Millions of yen
2019
2018

Deferred tax assets:
Provision for bonuses
Net defined benefit liability
Allowance for doubtful accounts in excess of deductible limit
Depreciation and amortization in excess of deductible limit
Accounts payable upon transfer to defined contribution pension plan
Accumulated loss on impairment of property and equipment
Accumulated loss on impairment of leased assets
Accrued enterprise tax
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Unrealized gain on other securities
Reserve for advanced depreciation of non-current assets
Undistributed earnings
Total deferred tax liabilities
Net deferred tax assets

Thousands of U.S. dollars
2019
2018

¥533
2,132
161
118
216
2,176
51
171
425
5,987
(2,397)
3,590

¥480
2,162
165
120
327
2,129
63
146
255
5,850
(2,236)3,614$4,805
19,212
1,458
1,069
1,953
19,611
461
1,541
3,834
53,945(21,600)
32,345(1,989)(3,334)(180)(5,504)¥(1,914)(1,201)(3,396)(168)(4,766)¥(1,151)(17,928)(30,039)(1,625)(49,592)$(17,247)$4,525
20,353
1,558
1,131
3,080
20,042
602
1,378
2,400
55,069(21,048)
34,022

Income taxes applicable to the Company consist of corporate income tax, inhabitant taxes and enterprise tax.
Significant differences between the statutory tax rate and the Company’s effective tax rate after applying thedeferred tax accounting for the years ended March 31, 2019 and 2018 were as follows:—

Statutory tax rate:
Increase (reduction) in tax resulting from:
Nondeductible expenses including entertainment, etc.
Nontaxable income including dividends received deduction, etc.
Per capita portion of inhabitant taxes
Equity in earnings of affiliates
Elimination of dividends received from consolidated subsidiaries, etc.
Amortization of goodwill
Change in valuation allowance related to deferred tax assets
Other
Effective tax rate

35

2019

2018

30.45%

30.69%

0.58(9.42)
3.20(0.43)
9.30
0.26
2.22
1.14
37.30%

0.82(15.27)4.40(0.72)
15.11
1.18
3.60
0.03
39.84%

20 Supplementary income information
Supplementary income information for the years ended March 31, 2019 and 2018 is as follows:—
Millions of yen
2019
2018

Depreciation expenses
Lease and rental

Thousands of
U.S. dollars
2019¥5,0896,654¥5,134
7,060$46,263
63,61221 Amounts per share
Amounts per share of common stock for the years ended March 31, 2019 and 2018 were as follows:—
Yen

Net income per share:
Basic
DilutedCash dividends
Net assets per share

2019

2018

U.S. dollars
2019¥500.74—
90.00¥7,690.92¥348.47—
44.00¥7,083.96$4.5116—
0.8109$69.2938

Note: The Company conducted a 1-for-10 reverse stock split of its shares of common stock effective October 1,
2017.
Net income per share and net assets per share are calculated under the assumption that the said reverse
stock split had been conducted at the beginning of the previous fiscal year.
Basis for the calculation of net assets per share for the years ended March 31, 2019 and 2018 were as follows:—
Millions of yen
2019
2018

Total net assets as reported on the consolidated balance sheets
Deduction from total net assets:
Non-controlling interests
Adjusted net assets allocated in common stock
Number of shares of common stock outstanding at the end ofyear on which net assets per share is calculated¥64,75442
42
69,712¥64,25737
37
64,2199,064,267

9,065,539

Thousands of
U.S. dollars
2019$583,431
382
382
628,097

Basis for the calculation of basic and diluted net income per share for the years ended March 31, 2019 and2018 was as follows:—
Millions of yen
2019
2018

Net income attributable to owners of the parent
Amounts not attributable to shareholders of common stock
Net income attributable to common shareholders of the parent
Weighted-average number of shares of common stock outstanding (shares)¥4,539—4,539
9,064,933¥3,159—3,159
9,067,476

Thousands of
U.S. dollars
2019$40,897—
40,89722 Segment information(1) Overview of reportable segments
	The Company’s segments are the Group’s components for which discrete financial information is available
and whose operating results are regularly reviewed by the Company’s board of directors to make decisions
on the allocation of resources to the segments and to assess their performance.
		 The Group, in doing business, classifies business models of operating companies, which are under theCompany (pure holding company), according to the nature of services and formulates comprehensive strategies for individual business models.
		 Therefore, the Group consists of segments according to services based on these business models and theGroup’s reportable segments are: Logistics, Information Processing, and Sales.
		 Principal services of the Logistics segment are road haulage, freight forwarding, warehousing, and harbortransport. The principal service of the Information Processing segment is information processing. Principal
services of the Sales segment are merchandising, consignment sales, and a non-life insurance agency.
36

(2)	Methods of calculating operating revenues, income/loss, assets/liabilities, and other items byreportable segment
	Accounting procedures applied to the reported operating segments are the same as those described in the“Basis of Presenting Consolidated Financial Statements.” Income of reportable segments is on an operating
income basis. Intersegment revenues and transfers are based on market prices.
(3)	Information on operating revenues, income/loss, assets/liabilities, and other items byreportable segment
For the year ended March 31, 2019
Logistics

Operating revenues:
Revenues from outside customers
Intersegment revenues or transfers
Total
Segment income
Segment assets
Other items:
Depreciation
Amortization of
goodwill
Impairment losses
Loss on impairmentof goodwill
Increases in property
and equipment andintangible fixed assets

Millions of yen
Reportable segments
Information
processing
Sales

Total

Adjustment(Note 2)

Consolidated(Note 3)

¥2,836¥6,723¥135,771¥1,665¥137,436¥—¥137,436

31
126,242¥6,600¥113,224

252
3,088
¥341
¥2,070

4,407
11,131¥304¥10,200

4,691
140,463¥7,246¥125,495

131
1,796
¥113
¥13,389

4,823
142,260¥7,360¥138,885(4,823)(4,823)¥(84)¥(2,126)—
137,436¥7,275¥136,759¥4,482

¥569

¥39

¥5,091¥24¥5,115¥18¥5,134

¥
¥

49
247

¥—
¥ —

¥—
¥ 100

¥49
¥347

¥
¥

11
—

¥60
¥347

¥
¥

—
—

¥60
¥347

¥

—

¥

¥

¥

¥

—

¥

¥

—

¥

¥6,095

—

¥123

—

¥147

—

¥6,366¥37—¥6,403¥(0)—¥6,402

Millions of yen

Logistics

Other items:
Depreciation
Amortization of
goodwill
Impairment losses
Loss on impairmentof goodwill
Increases in property
and equipment andintangible fixed assets

Others(Note 1)

¥126,211

For the year ended March 31, 2018

Operating revenues:
Revenues from outside customers
Intersegment revenues or transfers
Total
Segment income
Segment assets

Total

Reportable segments
Information
processing
Sales

Total

Others(Note 1)

Total

Adjustment(Note 2)

Consolidated(Note 3)

¥—

¥130,886¥120,751¥2,673¥5,857¥128,982¥1,604¥130,886

23
120,775

277
2,951

3,943
9,800

4,245
133,527

153
1,758

4,399
135,286(4,399)(4,399)—130,886¥4,977

¥292

¥308

¥5,577¥100¥5,677¥(45)¥5,631¥108,423¥2,400¥10,081¥120,905¥12,230¥133,136¥(4,182)¥128,953¥4,410

¥596

¥39

¥5,046¥25¥5,071¥17¥5,089

¥
¥

188
163

¥
¥

3
—

¥
¥

—
—

¥191
¥163

¥11
¥
—

¥203
¥163

¥
¥

—
—

¥
203
¥163

¥

639

¥

—

¥

—

¥639

¥

—

¥639

¥

—

¥639

¥23

¥4,347¥30¥4,378¥23¥4,401¥4,144¥179

37

For the year ended March 31, 2019
Logistics

Operating revenues:
Revenues from outside customers
Intersegment revenues or transfers
Total
Segment income
Segment assets

Thousands of U.S. dollars
Reportable segments
Information
processing
Sales

Others(Note 1)

Total

Total

Adjustment(Note 2)

Consolidated(Note 3)

$1,137,140$25,557$60,580 $1,223,277$15,005 $1,238,282$— $1,238,282$287
1,137,426$2,272$27,830$39,713 $42,273$100,293 $1,265,549$1,185 $43,458$16,190 $1,281,740$(43,458) $—$(43,458) $1,238,282$59,468$3,079$2,746 $65,293$1,023 $66,316$(766) $65,551$1,020,134$18,658$ 91,901 $1,130,693$120,641 $1,251,333$(19,156) $1,232,178$ 5,134$

353 $

45,871$

221 $

46,092$171 $

46,263

$
$

—
—

$
$

— $
903 $

444
3,131

$
$

105 $
— $

549
3,131

$
$

— $
— $

549
3,131

$

—

$

— $—

$

— $—

$

— $

—

$

334 $

$(8) $

57,688Other items:$ 40,384
Depreciation
Amortization of$444
goodwill$
2,228
Impairment losses
Loss on impairment$—of goodwill
Increases in property
and equipment andintangible fixed assets $ 54,923$ 1,111$ 1,328 $

57,36357,696

Notes:
1. “Others” corresponds to operating segments that are not included in the reported operating segments
and includes automobile repair and direct mail service.
2. Adjustments are as follows:(1) Adjustments of segment income
For the fiscal years ended March 31, 2019 and 2018, adjustments of segment income amounted to¥(84) million ($(766) thousand) and ¥(45) million ($(430) thousand), respectively. Adjustments
include intersegment eliminations and corporate expenses not allocated to any reportable segments.
For the fiscal years ended March 31, 2019 and 2018, the above-mentioned intersegment eliminations amounted to ¥814 million ($7,343 thousand) and ¥808 million ($7,610 thousand), respectively, and corporate expenses not allocated to any reportable segments amounted to ¥(899) million($(8,108) thousand) and ¥(854) million ($(8,040) thousand), respectively. Corporate expenses aremainly expenses of the Company’s operations that do not belong to any reportable segments.
(2) Adjustments of segment assets
For the fiscal years ended March 31, 2019 and 2018, adjustments of segment assets amounted to¥(2,126) million ($(19,156) thousand) and ¥(4,182) million ($(39,368) thousand), respectively.
Adjustments include intersegment eliminations and corporate assets not allocated to any reportable segments.
For the fiscal years ended March 31, 2019 and 2018, the above-mentioned intersegment eliminations amounted to ¥(32,443) million ($(292,311) thousand) and ¥(28,831) million ($(271,379)
thousand), respectively, and corporate assets not allocated to any reportable segments amounted to¥30,317 million ($273,155 thousand) and ¥24,648 million ($232,011 thousand), respectively.
Corporate assets are mainly cash and time deposits and investments in securities of the head officethat do not belong to any reportable segments.
(3) Adjustments of increases in property and equipment and intangible fixed assets
For the fiscal years ended March 31, 2019 and 2018, adjustments of increases in property andequipment and intangible fixed assets amounted to ¥(0) million ($(8) thousand) and ¥23 million($221 thousand), respectively. Adjustments include intersegment eliminations and corporate assets
not allocated to any reportable segments.
For the fiscal years ended March 31, 2019 and 2018, the above-mentioned intersegment eliminations amounted to ¥(4) million ($(36) thousand) and ¥(5) million ($(54) thousand), respectively,
and corporate assets not allocated to any reportable segments amounted to ¥3 million ($28 thousand) and ¥29 million ($275 thousand), respectively.
3. Segment income is adjusted to operating income in the consolidated financial statements.

38

(4) Related information
For the year ended March 31, 20191) Information by product and service
Information by product and service is omitted because similar information is presented in the segment
information.
2) Information by geographical area
Information about operating revenues by geographical area is omitted because operating revenues fromoutside customers in Japan exceeded 90% of operating revenues in the consolidated financial statements.
Not applicable for property and equipment because there is no property and equipment located inplaces other than Japan.
3) Information by major customer
Not applicable because, concerning operating revenues from outside customers, no outside customer
accounts for 10% or more of operating revenues in the consolidated financial statements.
For the year ended March 31, 2018
1) Information by product and service
Information by product and service is omitted because similar information is presented in the segment
information.
2) Information by geographical area
Information about operating revenues by geographical area is omitted because operating revenues fromoutside customers in Japan exceeded 90% of operating revenues in the consolidated financial statements.
Not applicable for property and equipment because there is no property and equipment located inplaces other than Japan.
3) Information by major customer
Not applicable because, concerning operating revenues from outside customers, no outside customer
accounts for 10% or more of operating revenues in the consolidated financial statements.
(5) Information on fixed asset impairment losses by reportable segment
For the year ended March 31, 2019
Information on fixed asset impairment losses by reportable segment is omitted because similar information
is presented in the segment information.
For the year ended March 31, 2018
Information on fixed asset impairment losses by reportable segment is omitted because similar information
is presented in the segment information.

39

(6) Information on amortization of goodwill and unamortized balance by reportable segment
For the year ended March 31, 2019

Millions of yen

Logistics

Goodwill:
Amortization
Impairment losses
Balance at end of year

Reportable segments
Information
processing
Sales

Adjustment

Total

¥ —

¥ —

¥ 49

¥11

¥ —

¥60

¥ —

¥ —

¥ —

¥ —

¥ —

¥ —

¥ —

¥370

¥ —

¥ —

¥370

¥26

¥ —

¥397

OthersAdjustment

Total

Millions of yen

Logistics

Goodwill:
Amortization
Impairment losses
Balance at end of year

Reportable segments
Information
processing
Sales

Total

¥188

¥ 3

¥ —

¥191

¥11

¥ —

¥203

¥639

¥ —

¥ —

¥639

¥ —

¥ —

¥639

¥29

¥ —

¥ —

¥ 29

¥37

¥ —

¥67

Total

OthersAdjustment

Total

For the year ended March 31, 2019

Thousands of U.S. dollars

Logistics

Impairment losses
Balance at end of year

Others¥ 49

For the year ended March 31, 2018

Goodwill:
Amortization

Total

Reportable segments
Information
processingSales$ 444$ —$ —$ 444

$105

$ —

$549

$

—

$ —

$ —

$

—

$ —

$ —

$

$3,341

$ —

$ —

$3,341

$237

$ —

$3,578—(7) Information on gain on negative goodwill by reportable segment
For the year ended March 31, 2019
Not applicable
For the year ended March 31, 2018
Not applicable

23 Subsequent events
Cash dividends

The annual shareholders’ meeting of the Company, which was held on June 24, 2019, duly approved the payment of dividends as follows:
Cash dividends (¥50.00 per share)

40

Millions ofyen

Thousands of
U.S. dollars¥453$4,084

Consolidated Subsidiaries

Logistics
Company NameBusiness Line

Tonami Transportation Co., Ltd.

Road haulage

Tonami Transportation Shinetsu Co., Ltd.

Road haulage

Tonami Transportation Chugoku Co., Ltd.

Road haulage

Kanto Tonami Transportation Co., Ltd.

Road haulage

Hokuriku Tonami Transportation Co., Ltd.

Road haulage

Tonami Shutoken Logistics Co., Ltd.

Road haulage

Tonami Kinki Logistics Co., Ltd.

Road haulage

Ishikawa Tonami Transportation Co., Ltd.

Road haulage

Tonami Daiichi Warehouse Logistics Co., Ltd.

Road haulage / Warehousing

Fukui Tonami Transportation Co., Ltd.

Road haulage

Niigata Tonami Transportation Co., Ltd.

Road haulage

Anan Transportation Co., Ltd.

Road haulage

Tonami Global Logistics Co., Ltd.

Harbor transport service

Keishin Warehouse Co., Ltd.

Warehousing

Kitakanto Tonami Transportation Co., Ltd.

Road haulage

Take One Co., Ltd.

Road haulage

Hatsutsuru Reizo Co.,Ltd.

Warehousing

Information Processing and Others
Company NameBusiness Line

Tonami Trading Co., Ltd.

Trading Company

Toyo Gomu Hokuriku Hanbai Co., Ltd.

Sale of tires

KSR Co., Ltd.

Development and sale of software

Chuo Reizo Co., Ltd.

Other

Tonami Automobile Technology Research Institute Co., Ltd.

Automobile technology R&D

Tonami Business Service Co., Ltd.

Financial service

41

Board of Directors and Corporate Auditors

President and Representative Director
Katsusuke Watanuki
Senior Managing Directors
Kazuo Takata
Shinichi Izumi

Standing Corporate Auditors
Masafumi Takebe
Mitsuharu Wadachi
Corporate Auditors
Atsuki Matsumura
Toshiyuki Oda

Directors
Yasuo Terabayashi
Toyonobu Terahai
Yasuhiro Saegusa
Masaaki Sato
Shinichiro Inushima
Ichiro Tanaka(As of June 24, 2019)

Corporate Data

Head Office2-12, Showa-machi 3-chome, Takaoka,
Toyama Prefecture 933-8788, Japan
Phone: (0766) 32-1073
Fax: (0766) 32-1077

Common Stock¥14,182 million

Tokyo Office8-4, Nihonbashihoridome-cho 2-chome, Chuo-ku,
Tokyo 103-0012, Japan
Phone: (03) 3664-5403
Fax: (03) 3664-5405

Shareholders
4,761

Issued and Outstanding Shares
9,761,011 shares

Date of Established
June 1943

Employees
69(As of March 31, 2019)42

TONAMI HOLDINGS CO., LTD.
URL: http://www.tonamiholdings.co.jp/

Printed in Japan on recycled paper