financial report for fiscal 2014 (japanese gaap ... · june 2014, the group acquired 51.4% of...
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Financial Report for Fiscal 2014 (Japanese GAAP) (Consolidated) (May 7, 2015) Company Name SG HOLDINGS CO., LTD. URL http://www.sg-hldgs.co.jp/english/ Representative Tadashi Machida, President and COO Contact Shunichi Nakajima, Director in charge of Finance and Accounting TEL (075) 671-8600 General Meeting of the Shareholders Scheduled for June 12, 2015 Payment of Dividends Scheduled for June 15, 2015
(Note: Amounts less than 1 million yen are rounded down to nearest million yen)
1. Consolidated Financial Results for Fiscal Year Ended March 20, 2015 (March 21, 2014 - March 20, 2015)
(1) Consolidated Operating Results (Note: Percentage figures in table below represent changes from previous fiscal year)
Operating Revenue Operating Income Ordinary Income Net Income
Million yen % Million yen % Million yen % Million yen %
Fiscal 2014 857,449 2.7 45,594 5.1 43,901 7.7 24,815 49.0 Fiscal 2013 835,086 (4.2) 43,383 39.8 40,764 42.1 16,651 (28.9)
(Note) Comprehensive income:
Fiscal 2014
Fiscal 2013
28,426 million yen (57.9%)
18,000 million yen (-26.9%)
Net Income Per Share Net Income Per Share
Diluted Return on Equity (ROE)
Return on Assets (ROA)
Operating Margin
Yen Yen % % %
Fiscal 2014 232.42 - 13.1 7.7 5.3 Fiscal 2013 152.48 - 9.7 7.3 5.2
(Reference) Income on investment in equity-method affiliates:
Fiscal 2014 Fiscal 2013
(8) million yen (655) million yen
(2) Consolidated Financial Position
Total Assets Net Assets Equity Ratio Net Assets Per Share
Million yen Million yen % Yen
Fiscal 2014 585,230 207,547 34.4 1,924.69 Fiscal 2013 559,469 179,127 31.8 1,688.37
(Reference) Shareholders’ equity:
Fiscal 2014 Fiscal 2013
201,414 million yen 177,894 million yen
(3) Consolidated Cash Flows
Cash Flows from Operating
Activities Cash Flows from Investing
Activities Cash Flows from Financing
Activities Cash and Cash Equivalents
at the end of year
Million yen Million yen Million yen Million yen
Fiscal 2014 45,882 (48,081) (23,378) 62,509 Fiscal 2013 45,072 (27,280) (16,736) 86,473
2. Dividend Status
Dividend Per Share Total
Dividends (annual)
Payout Ratio (Consolidated)
Dividends on Net Assets
(Consolidated) 1Q-end 2Q-end 3Q-end 4Q-end Total
Yen Yen Yen Yen Yen Million yen % % Fiscal 2013 - 0.00 - 23.00 23.00 2,393 15.1 1.4 Fiscal 2014 - 0.00 - 26.00 26.00 2,690 11.2 1.4
Fiscal 2015 (forecast) - - - - - -
(Note) “Dividend Status” above represents the dividend paid for the Company’s common shares. As to dividend payment for class shares that differ from the Company’s common shares in respect to shareholders’ rights, see “Dividend Status of Class Shares” as described below. Distribution of dividends from surplus is scheduled to be resolved at the ordinary general shareholders’ meeting on June 12, 2015. The Company’s articles of incorporation designate September 20 and March 20 as the dividend record date. However, dividend forecast based on the said record date is currently undecided.
3. Projection of Consolidated Performance for Fiscal 2015 (March 21, 2015 - March 20, 2016)
(Note: Percentage figures in table below represent changes from previous fiscal year)
Operating Revenue Operating Income Ordinary Income Net Income Net Income per Share
Full year
Million yen % Million yen % Million yen % Million yen % Yen
940,000 9.6 50,000 9.7 48,000 9.3 29,000 16.9 272.83
* Notes
(1) Changes in significant subsidiaries during the period : Yes
(Changes in specified subsidiaries resulting in changes in scope of consolidation)
Newly added: 1 (Company Name) EXPOLANKA HOLDINGS PLC
Excluded: None
(Note) Please refer to the section “4. CONSOLIDATED FINANCIAL STATEMENTS (5) NOTES ON CONSOLIDATED FINANCIAL STATEMENTS (Significant Items Relating to the Preparation of Consolidated Financial Statements)” on page 16 of the Appendix for further information.
(2) Changes in accounting policies and accounting estimates, and restatements
(i) Changes associated with revision to accounting : Yes standards
(ii) Changes in accounting policies other than (i) : None above
(iii) Changes in accounting estimates : None
(iv) Restatements : None
(Note) Please refer to the section “4. CONSOLIDATED FINANCIAL STATEMENTS (5) NOTES ON CONSOLIDATED FINANCIAL STATEMENTS (Changes in Accounting Policies)” on page 19 of the Appendix for further information.
(3) Number of shares issued and outstanding (common shares)
(i) Number of shares outstanding at end of period (including treasury stock)
(ii) Number of shares of treasury stock at end of period
(iii) Average number of shares during the term
Fiscal 2014 106,732,400 shares
Fiscal 2013 106,732,400
shares
Fiscal 2014 3,262,483 shares Fiscal 2013 2,662,483
shares
Fiscal 2014 103,686,903 shares Fiscal 2013 105,032,788
shares
(Reference) Summary of Non-Consolidated Operating Results 1. Non-Consolidated Operating Results for the Year Ended March 20, 2015 (March 21, 2014 – March 20, 2015)
(Note: Percentage figures in table below represent changes (1) Non-Consolidated Operating Results
from previous fiscal year)
Operating Revenue Operating Income Ordinary Income Net Income
Million yen % Million yen % Million yen % Million yen %
Fiscal 2014 17,518 31.8 9,349 78.3 9,496 76.6 9,468 83.6 Fiscal 2013 13,290 34.9 5,244 57.3 5,377 55.4 5,155 54.6
Net income per share Net income per share diluted
Yen Yen Fiscal 2014 84.41 - Fiscal 2013 43.03 -
(2) Non-Consolidated Financial Position
Total Assets Net Assets Equity Ratio Net Assets per Share
Million yen Million yen % Yen
Fiscal 2014 432,354 168,842 39.1 1,609,90 Fiscal 2013 429,648 162,731 37.9 1,542.67
(Reference) Shareholders’ equity: Fiscal 2014 168,842 million yen
Fiscal 2013 162,731 million yen
* Description concerning the appropriate use of business forecast and other remarks The descriptions concerning the business forecasts included in this document are based on certain information obtained by the Company and the assumptions that the Company has deemed reasonable as of the date of publication. Actual results may differ substantially from these forecasts due to a variety of important factors.
Dividend Status of Class Shares Details of dividend per share on class shares that differ from the Company's common shares in respect to shareholder's rights are as follows:
Dividend per share
1Q-End 2Q-End 3Q-End 4Q-End Total
Yen Yen Yen Yen Yen
Class A preferred shares Fiscal 2013 - 0.00 23.50 23.50 Fiscal 2014 - 0.00 26.50 26.50
Fiscal 2015 (Forecast) - - - - -
Class B preferred shares Fiscal 2013 - 0.00 - 25.00 25.00 Fiscal 2014 - 0.00 - 28.00 28.00
Fiscal 2015 (Forecast) - - - - -
(Note) Distribution of dividends from surplus is scheduled to be resolved at the ordinary general shareholders’ meeting on June 12, 2015. The Company’s articles of incorporation designate September 20 and March 20 as the dividend record dates. However, dividend forecast based on the said record dates is currently undecided.
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
1
Table of Contents of Appendix
1. Analysis of Operating Results and Financial Position ........................................................................................... 2
(1) Analysis of Operating Results ............................................................................................................................ 2
(2) Analysis of Financial Position ............................................................................................................................ 4
(3) Dividend Policy and Dividends for the Current and Next Fiscal Years .............................................................. 5
2. Overwiew of SG HOLDINGS Group .................................................................................................................... 6
3. Management Policy ............................................................................................................................................... 8
(1) Basic Policy of Corporate Management ............................................................................................................. 8
(2) Target Management Indicators and Medium- to Long-Term Management Strategies........................................ 8
(3) Challenges to Be Addressed ............................................................................................................................... 8
4. Consolidated Financial Statements ........................................................................................................................ 9
(1) Consolidated Balance Sheets .............................................................................................................................. 9
(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income ....................... 11
(3) Consolidated Statements of Changes in Net Assets .......................................................................................... 13
(4) Consolidated Statement of Cash Flows ............................................................................................................ 15
(5) Notes on Consolidated Financial Statements .................................................................................................... 16
(Significant Items Relating to the Preparation of Consolidated Financial Statements) ........................................... 16
(Changes in Accounting Policies)............................................................................................................................ 19
(Changes in Presentation) ........................................................................................................................................ 19
(Segment Information, etc.) ..................................................................................................................................... 19
5. Non-Consolidated Financial Statements .............................................................................................................. 23
(1) Balance Sheets .................................................................................................................................................. 23
(2) Statements of Income ....................................................................................................................................... 25
(3) Statements of Changes in Net Assets ................................................................................................................ 26
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
2
1. Analysis of Operating Results and Financial Position
(1) Analysis of Operating Results
(i) Operating results for the fiscal year under review
In the consolidated fiscal year that ended March 20, 2015, the Japanese economy remained on a
moderate recovery track as the government's economic measures and the Bank of Japan's monetary
easing fueled corporate performance. However the consumption tax hike put a damper on real
consumption expenditure, which declined over the year.
Despite the trend toward aggressive global expansion via M&As, market conditions for the logistics
industry remained rocky as labor and car chartering costs continued to climb even though negotiations
with shippers for better freight rates went well amid a slow recovery of shipment volumes in Japan.
This fiscal year, marking the second year of the "Third Stage Plan" (our three-year medium-term
management plan which started in FY2013), we focused on creating new profit opportunities by
accurately capturing customer needs and expanding operations by leveraging the synergy within our
Group to boost growth.
Working against this backdrop, we shifted our new marketing strategies for the delivery business, our
core business line, into high gear with an eye to enhancing drivers' ability to propose solutions and solve
problems. Our logistics business focused on sales activities that capitalized on synergy within the Group
and worked on expanding the 3PL business by strengthening collaboration with the delivery business. In
June 2014, the Group acquired 51.4% of shares in EXPOLANKA HOLDINGS PLC, which operates in
ASEAN countries, Africa, the United States, as well as East and South Asia. The company's profit and
loss statement is consolidated for the period from July 1 to December 31, 2014. In other businesses, the
Group leveraged its management resources such as logistics networks, assets, and technologies to
broaden our business scope.
As a result, operating revenue for the consolidated fiscal year under review increased by 2.7% year
on year to total 857,449 million yen and operating income rose 5.1% year on year to reach 45,594
million yen. Ordinary income was up 7.7% to total 43,901 million yen while net income amounted to
24,815 million yen for a year-on-year increase of 49.0%.
Below is an overview of business segments and their respective performances.
Starting from the consolidated fiscal year under review, the Company has changed the categorization of
reporting segments. The year-on-year comparison listed below is based on previous year’s results that are
reclassified into new segments.
Delivery Business
The number of packages handled and delivered by the Group through its main services was as follows:
Service name
Fiscal 2013
(March 21, 2013 to
March 20, 2014)
Fiscal 2014
(March 21, 2014 to
March 20, 2015)
Year-on-year change
Year-on-year change (%)
Hikyaku Express (in millions) 1,218 1,196 (22) (1.9)
Hikyaku Air Express (in millions) 9 8 (0) (6.2)
Hikyaku Cool Express (in millions) 29 29 0 3.0
Mail Express (in millions) 344 280 (64) (18.7)
Hikyaku Mail Express 70 52 (17) (25.2)
Hikyaku You-Mail Express 273 227 (46) (17.1)
(Reference) e-Collect Service (in millions)
116 108 (8) (7.3)
Note: Although e-Collect Service belongs to the “Other Businesses” segment, the information is provided for
reference purposes.
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
3
The delivery business saw the number of packages handled and delivered decrease over the year due to a
sudden fall in demand during the first fiscal half following the last-minute surge in demand just before the
consumption tax hike. However, the launch of strategic products such as smart delivery, etc., ongoing
efforts to receive fair freight rates, and other measures all led to growth in revenue. Our cost control to turn
labor force expenses into variable costs was successful and drove profits up.
In addition to the above, the expanded lines of delivery solutions customized to meet customer needs as
well as increased facility logistics services for large-scale commercial facilities were among the factors
behind the profit increase.
In the end, operating revenue from this business segment increased by 0.4% from a year earlier to total
712,566 million yen while operating income rose 7.6% year on year to reach 39,119 million yen.
Logistics Business
The logistics business enjoyed increased revenue as its advanced logistics project team dubbed "GOAL"
made steady progress in proposing new cross-sectoral logistics solutions. In overseas markets, the Group
acquired a stake in EXPOLANKA HOLDINGS PLC, with a big freight forwarding advantage primarily in
connection to major apparel manufacturers in Europe and the United States, to expand its comprehensive
international logistics services.
In addition to expanded business operations, enhanced warehouse utilization, efficient field operations and
the proactive implementation of other cost controls all helped drive profits up. However, operating income
remained flat due to restructuring costs incurred for strengthening our overseas business structure.
All these factors brought operating revenue from this business segment up 47.5% year on year to total
80,935 million yen while operating income declined 2.2% year on year to reach 336 million yen.
Real Estate Business
Both revenue and profit declined for the real estate business due to the partial sale of real estate for sale
(SG Realty YOKOHAMA) in the previous consolidated fiscal year (April 2013).
Excluding the impact of the above-mentioned sale of real estate for sale (SG Realty YOKOHAMA),
revenue and profit increased thanks to the completion of SG Realty MAISHIMA as well as steady
operation of the renewable energy supply business.
As a result, operating revenue from this business segment fell 62.9% year on year to total 4,589 million
yen and operating income dropped 11.2% year on year to reach 285 million yen.
Other Businesses
Both revenue and profit rose in other businesses due to increased new car sales, steady expansion of
personnel services, and the launch of new products for settlement and IT services.
As a result, operating revenue from this business segment edged up 1.6% over last fiscal year to total
59,358 million yen while operating income rose 16.1% year on year to reach 5,006 million yen.
(ii) Projections for the Next Fiscal Year
While the Japanese economy is on a recovery track thanks to various government initiatives, etc., the
logistics industry will continue to face challenging market conditions in the next fiscal year due to
intensifying competition with other logistics companies as well as rising labor and car chartering costs.
Working against this backdrop, we will build stronger ties among Group companies in FY2015 with an
eye to expanding the 3PL business and comprehensive logistics services around the world by maximizing
the Group's integrated strengths.
In the delivery business, we will focus on marketing solutions through group-wide collaboration. We will
also launch home delivery and order-taking services as well as a service that will enable customers to
have Sagawa Express packages pick them up at any one of the Lawson outlets across Japan. These
services will be provided by SG LAWSON, a joint venture with Lawson, Inc., based on a business
alliance agreement.
In the logistics business, GOAL, a cross-sectoral advanced logistics project team that made steady
progress this fiscal year, will step up its marketing efforts to offer new logistics solutions combining the
Group's resources including not only logistics but IT and payment settlement services.
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
4
In the real estate business, we will launch an unlisted open-end private-placement real estate investment
trust (private REIT) to work on real estate operations while maintaining a portfolio, mainly consisting of the
Group's infrastructure, that will generates stable earnings.
Projection for consolidated business performance
Operating revenue 940.0 billion yen
Operating income 50.0 billion yen
Ordinary income 48.0 billion yen
Net income 29.0 billion yen
(2) Analysis of Financial Position
(i) Status of Assets, Liabilities and Net Assets
Total assets amounted to 585,230 million yen, up 25,761 million yen over what they were at the end of
the previous fiscal year. The principal factors contributing to this increase include an increase of 14,411
million yen in real estate for sale, an increase of 13,946 million yen in notes receivable-trade and
operating accounts receivable, and an increase of 10,773 million yen in land despite a decrease of 23,728
million yen in cash and deposits.
Liabilities totaled 377,683 million yen, falling 2,658 million yen from what they were at the end of the
previous fiscal year. This is due primarily to a decrease of 15,965 million yen in loans payable despite an
increase of 6,864 million yen in notes and operating accounts payable-trade.
Net assets amounted to 207,547 million yen, up 28,419 million yen from what they were at the end of the
previous fiscal year. This increase mainly came from an increase of 24,815 million yen in net income and
an increase of 4,900 million yen in minority interests despite 3,029 million yen in dividend payments
from surplus.
All these factors combined brought equity ratio up 2.6 percentage points above what it was at the end of
the previous fiscal year, to hit 34.4%.
(ii) Status of Cash Flows
The balance of cash and cash equivalents (hereinafter referred to as “funds”) as of the end of the
consolidated fiscal year under review decreased by 23,964 million yen to total 62,509 million yen.
The status of cash flows for the consolidated fiscal year under review and factors behind them are
provided below.
(Cash flows from operating activities)
Funds provided by operating activities totaled 45,882 million yen, up 1.8% from a year earlier.
This was due primarily to the posting of 40,696 million yen in income before income taxes and
minority interest and 21,428 million yen in depreciation costs, as well as payments totaling 15,530
million yen in income taxes.
(Cash flows from investment activities)
Funds used for investing activities amounted to 48,081 million yen, a year-on-year increase of 76.2%.
This mainly included an outflow of 37,406 million yen for the acquisition of property, plant and
equipment as well as an outflow of 6,991 million yen for the purchase of shares in subsidiaries that
went along with the change in the scope of consolidation.
(Cash flows from financing activities)
Funds used for financing activities increased by 39.7% year on year to total 23,378 million yen.
This was mainly due to an outflow of 55,729 million yen for the repayment of long-term loans payable,
the payment of cash dividends totaling 3,029 million yen, an inflow of 19,785 million yen from
long-term loans, as well as a net increase in short-term loans payable which amounted to 18,030 million
yen.
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
5
(3) Dividend Policy and Dividends for the Current and Next Fiscal Years
The Company has set a basic profit distribution policy to maintain a stable dividend payment while
securing sufficient retained earnings necessary to continue business operations in the future and to enhance
business management.
The Company makes it a basic policy to distribute dividends from surplus annually based on the resolution
of the ordinary general shareholders’ meeting. Meanwhile, the Company’s articles of incorporation
stipulate that the Company is able to pay an interim dividend based on the resolution of the Board of
Directors.
Based on those policies, the Company is planning to propose a resolution at the ordinary general
shareholders’ meeting scheduled for June 12, 2015 to pay a dividend of 26.0 yen per common share, 26.5
yen per Class A preferred share, and 28.0 yen per Class B preferred share for the fiscal year under review.
While dividends for the next fiscal year are undecided at this moment, the Company is committed to
enhancing cost competitiveness to accommodate expected changes in the business environment,
strengthening business infrastructure to meet market needs, and effectively investing retained earnings
aimed at facilitating global strategies.
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
6
2. Overview of SG HOLDINGS Group
SG HOLDINGS Group (the Company and related companies) consists of the Company (SG HOLDINGS
CO., LTD.) which is a pure holding company, 109 subsidiaries (including 108 consolidated subsidiaries and
1 nonconsolidated subsidiary not subject to the equity method), and 11 affiliated companies (including 10
affiliates subject to the equity method and 1 affiliate not subject to the equity method) and is engaging in the
delivery business, logistics business, real estate business, and other associated businesses.
Operations performed by the Group, together with the individual positions taken by related companies for
performance of these operations, are as follows:
Segment Name Major products and services Major companies
Delivery Business Hikyaku Express, Hikyaku Cool Express
Hikyaku Mail Express, Mail Air Express,
etc.
Moving transportation, Route delivery
service, Charter transportation
Installation transportation, Art transportation
Collective delivery service, Food delivery
service
SAGAWA EXPRESS CO., LTD.
SG MOVING CO., LTD.
WORLD SUPPLY CO., LTD.
(Total: 3 companies)
Logistics Business Lump-sum acceptance of orders for logistics
services
Development of logistics systems
Control and management of inventory and
orders placed and received
Management of distribution centers
Warehousing
Transportation using public transport
Sgx (international delivery service)
International air and marine transportation
services
SAGAWA GLOBAL LOGISTICS CO., LTD.
SAGAWA LOGISTICS PARTNERS CO., LTD.
SGH GLOBAL JAPAN CO., LTD.
TIANJIN POLY-SAGAWA INTERNATIONAL
TRADING CO., LTD.
SHANGHAI POLY-SAGAWA LOGISTICS CO.,
LTD.
POLY-SAGAWA LOGISTICS CO., LTD.
SHANGHAI DAZHONG SAGAWA LOGISTICS
CO., LTD.
SAGAWA SILOX SHANGHAI CO., LTD.
SAGAWA SILOX QINGDAO CO., LTD.
SAGAWA EXPRESS (H.K.) CO., LTD.
SAGAWA EXPRESS PHILIPPINES INC.
SAGAWA EXPRESS VIETNAM CO., LTD.
SAGAWA EXPRESS SINGAPORE PTE. LTD.
AMEROID LOGISTICS (S) PTE. LTD.
PT. SAGAWA INDONESIA
EXPOLANKA HOLDINGS PLC *1
Plus 89 other companies
(Total: 105 companies)
Real Estate Business Real estate leasing and management Real
estate development
Real estate fund
Renewable energy supply
SG REALTY CO., LTD.
Plus 1 other company
(Total: 2 companies)
Other Product sales, insurance agent, fuel sales
Automobile services, sales of automobiles,
manufacture of auto bodies
System sales and maintenance
e-Collect Service
Temporary staffing services and outsourcing
SAGAWA ADVANCE CO., LTD.
SG MOTORS CO., LTD.
SG SYSTEMS CO., LTD.
SAGAWA FINANCIAL CO., LTD.
SG FIELDER CO., LTD.
Plus 3 other companies
(Total: 8 companies)
(Note) *1 The Group acquired EXPOLANKA HOLDINGS PLC on June 24, 2014. *2 The Group’s consolidated subsidiary, SG EXPERT CO., LTD. (shared service business) and SG HOLDINGS GLOBAL PTE.
LTD. (overseas operation headquarters) have been omitted as they are common in all segments.
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
7
The following diagram approximately illustrates the roles, and the relations with segments, of SG HOLDINGS
Group.
(Note) SG EXPERT CO., LTD. (shared service business) and SG HOLDINGS GLOBAL PTE. LTD. (overseas operation headquarters) have been omitted as they are common in all segments.
Customer
Delivery Business Logistics Business
SAGAWA EXPRESS CO., LTD.
SG MOVING CO., LTD.
WORLD SUPPLY CO., LTD.
Real Estate Business
SG REALTY CO., LTD.
Plus 1 other consolidated subsidiary
Other
SAGAWA ADVANCE CO., LTD.
SG MOTORS CO., LTD.
SG SYSTEMS CO., LTD.
SAGAWA FINANCIAL CO., LTD.
SG FIELDER CO., LTD.
Plus 3 other consolidated subsidiaries
[Domestic]
SAGAWA GLOBAL LOGISTICS CO., LTD.
SAGAWA LOGISTICS PARTNERS CO., LTD.
SGH GLOBAL JAPAN CO., LTD.
[Overseas]
TIANJIN POLY-SAGAWA INTERNATIONAL TRADING CO., LTD.
SHANGHAI POLY-SAGAWA LOGISTICS CO., LTD.
POLY-SAGAWA LOGISTICS CO., LTD.
SHANGHAI DAZHONG SAGAWA LOGISTICS CO., LTD.
SAGAWA SILOX SHANGHAI CO., LTD.
SAGAWA SILOX QINGDAO CO., LTD.
SAGAWA EXPRESS (H.K.) CO., LTD.
SAGAWA EXPRESS PHILIPPINES INC.
SAGAWA EXPRESS VIETNAM CO., LTD.
SAGAWA EXPRESS SINGAPORE PTE. LTD.
AMEROID LOGISTICS (S) PTE. LTD.
PT. SAGAWA INDONESIA
EXPOLANKA HOLDINGS PLC
Plus 77 other consolidated subsidiaries
1 nonconsolidated subsidiary not subject
to the equity method
10 affiliates subject to the equity method
1 affiliate not subject to the equity method
SG HOLDINGS CO., LTD (holding company)
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
8
3. Management Policy
(1) Basic Policy of Corporate Management
Remaining committed to the founding spirit of "Hikyaku no Kokoro" (the spirit of express messenger), the
SG HOLDINGS Group has endeavored to improve its services and quality by which the customers can
enjoy "Security," "Satisfaction" and "Trust." "Hikyaku no Kokoro" means, with a motto of "swiftly, surely,
and carefully," a strong commitment to the customer creed, serving the development of local society, and
emphasizing responsibility and good faith.
Looking toward the future, the Group will make its utmost efforts to become a business entity of more
value to society by quickly responding to the changing society and customer needs and providing total
solutions.
(2) Target Business Indicators and Medium- to Long-Term Business Strategies
In order to cope with the rapidly changing business environment such as growing competition and
realignment in the logistics industry and to thrive in the future, we are focusing on demonstrating our
strengths as a group and reinforcing alliances with other companies to drive new growth under the Third
Stage Plan, our three-year medium-term management plan that runs from FY2013 to FY2015. In
accordance with the plan, we have set our corporate vision “creating new value by effectively using
management resources and strengthening collaboration both inside and outside the Group in the aim of
enhancing business platforms and securing sustainable growth.” We are pursuing business activities with
focus on “synergy, reform, and speed” and based on the following basic policies: maximizing the Group’s
earnings capability, enhancing the comprehensive strength of the Group by expanding business areas,
reinforcing and enhancing operating platforms, and fully adopting stakeholder management.
(3) Challenges to Be Addressed
Our operating environment has been changing as evidenced by (i) diversifying needs and higher
expectations of customers, (ii) the growing Asian economy, (iii) labor shortages due to declining
populations and changing awareness of work-life balance, (iv) growing compliance awareness across the
globe, and (v) climate change. Viewing these changes as opportunities for growth, we are stepping up
efforts on the following four key areas.
(i) Developing new profitable lines of business
The delivery business will place greater emphasis on initiatives designed to respond to customer needs,
like marketing solutions through group-wide collaboration while focusing on increasing profitability. We
will also work to strengthen the logistics and real estate businesses in order to lessen our dependence on
the delivery business. In overseas markets, we will invest management resources in key business areas in
ASEAN countries, etc. and work with EXPOLANKA HOLDINGS PLC to build a stronger network with
an eye to establishing logistics networks primarily in South Asia and Southeast Asia.
(ii) Securing human resources
Quality human resources are our vital assets. We will focus on hiring excellent personnel on an ongoing
basis, optimally assigning personnel, and keeping employee turnover low. We will also continue to
address workplace diversity with a focus on empowering women, offering various work style options,
and more.
(iii) Compliance
Recognizing compliance management as a key task, we will make further efforts to develop and manage
a compliance system in line with our Code of Ethics and Conduct all with a view to building a corporate
culture that fosters ethical conduct while responding to changes in society and the market.
(iv) Environmental conservation
As long as we continue our business operations, we will inevitably have some degree of impact on the
environment. We will work with all stakeholders on conserving the global environment to minimize our
ecological footprint.
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
9
4. Consolidated Financial Statements
(1) Consolidated Balance Sheets
(Unit: million yen)
Fiscal 2013
(March 20, 2014)
Fiscal 2014
(March 20, 2015)
Assets
Current assets
Cash and deposits 86,991 63,263
Notes receivable-trade and operating accounts
receivable
111,327 125,273
Real estate for sale 55,378 69,789
Merchandise and finished goods 155 338
Work in process 8,817 111
Raw materials and supplies 1,356 1,326
Deferred tax assets 4,861 4,897
Other 9,046 10,871
Allowance for doubtful accounts (490) (745)
Total current assets 277,444 275,126
Fixed assets
Property, plant and equipment
Buildings and structures (net) 58,455 53,493
Vehicles (net) 3,364 8,908
Land 129,625 140,398
Lease assets (net) 6,290 8,381
Construction in progress 186 4,480
Other (net) 15,597 21,314
Total property, plant and equipment 213,519 236,977
Intangible fixed assets
Goodwill 2,403 7,192
Software 13,651 12,187
Lease assets 134 83
Other 3,535 4,553
Total intangible fixed assets 19,725 24,017
Investments and other assets
Investment securities 4,746 6,512
Deferred tax assets 15,473 14,190
Other 30,981 30,447
Allowance for doubtful accounts (2,626) (2,203)
Total investments and other assets 48,574 48,946
Total fixed assets 281,820 309,941
Deferred assets
Bond issuance cost 204 162
Total deferred assets 204 162
Total assets 559,469 585,230
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
10
(Unit: million yen)
Fiscal 2013
(March 20, 2014)
Fiscal 2014
(March 20, 2015)
Liabilities
Current liabilities
Notes and operating accounts payable-trade 39,859 46,723
Short-term loans payable - 19,185
Current portion of long-term loans payable 55,134 29,138
Lease obligations 1,497 2,224
Income taxes payable 10,190 9,379
Deposits received 33,290 26,071
Provision for bonuses 4,888 5,253
Provision for directors' bonuses 41 48
Other 33,836 43,791
Total current liabilities 178,738 181,816
Noncurrent liabilities
Bonds payable 9,000 9,000
Long-term loans payable 140,637 131,482
Lease obligations 4,451 6,873
Provision for retirement benefits 37,281 -
Provision for directors' retirement benefits 29 29
Net defined benefit liability - 37,447
Asset retirement obligations 4,294 4,369
Other 5,909 6,664
Total non-current liabilities 201,603 195,867
Total liabilities 380,341 377,683
Net assets
Owners' equity
Capital stock 11,882 11,882
Capital surplus 882 882
Retained earnings 167,179 188,964
Treasury stock (3,461) (4,421)
Total owners’ equity 176,483 197,309
Accumulated other comprehensive income
Valuation difference on available-for-sale
securities
681 1,446
Deferred gains or losses on hedges (325) (286)
Foreign currency translation adjustment 1,055 3,205
Remeasurements of defined benefit plans - (260)
Total accumulated other comprehensive income 1,410 4,104
Minority interests 1,232 6,133
Total net assets 179,127 207,547
Total liabilities and net assets 559,469 585,230
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
11
(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
(Consolidated Statements of Income)
(Unit: million yen)
Fiscal 2013
(March 21, 2013 to March 20,
2014)
Fiscal 2014
(March 21, 2014
to March 20, 2015)
Operating revenue 835,086 857,449
Operating cost 764,248 780,480
Operating gross profit 70,838 76,969
Selling, general and administrative expenses 27,454 31,375
Operating income 43,383 45,594
Non-operating income
Interest income 128 111
Dividends income 126 133
Other 2,016 2,176
Total non-operating income 2,272 2,421
Non-operating expenses
Interest expenses 3,825 3,731
Equity in losses of affiliates 655 8
Other 409 373
Total non-operating expenses 4,891 4,113
Ordinary income 40,764 43,901
Extraordinary income
Gain on sales of noncurrent assets 41 50
Other 764 -
Total extraordinary income 805 50
Extraordinary loss
Loss on sales of noncurrent assets 34 1,048
Loss on retirement of noncurrent assets 743 338
Impairment loss 2,573 1,273
Lump-sum payment attributable to clearance of
corporate pension fund
4,660 -
Other 2,837 596
Total extraordinary loss 10,849 3,256
Income before income taxes and minority interest 30,721 40,696
Income taxes-current 13,242 14,558
Income taxes-deferred 850 1,322
Total income taxes 14,092 15,880
Income before minority interests 16,628 24,815
Minority interests in income (23) (0)
Net income 16,651 24,815
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
12
(Consolidated
Statements of Income)
(Unit: million
yen)
(March
Fiscal 2013
21, 2013 to March
2014)
20,
Fiscal 2014
(March 21, 2014
to March 20, 2015)
Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale
securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Share of other comprehensive income of
associates accounted for using equity method
16,628
99
(325)
1,543
54
24,815
765
39
2,783
22
Total other comprehensive income 1,372 3,610
Comprehensive income 18,000 28,426
(Comprehensive income attributable to)
Comprehensive income attributable to owners of
the parent
Comprehensive income attributable to minority
interests
17,841
158
27,769
656
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
13
(3) Consolidated Statements of Changes in Net Assets
Fiscal 2013 (March 21, 2013 to March 20, 2014)
(Unit: million yen)
Owner’s equity
Capital stock Capital surplus Retained
earnings Treasury stock
Total owner’s
equity
Outstanding balance at the
beginning of fiscal period 11,383 383 153,241 - 165,007
Changes of items during the
period
Issuance of new shares 499 499 999
Dividends from surplus (2,714) (2,714)
Net income 16,651 16,651
Purchase of treasury stock (3,461) (3,461)
Net changes of items other
than owner’s equity -
Total changes of items during
the period 499 499 13,937 (3,461) 11,475
Balance as of March 20, 2014 11,882 882 167,179 (3,461) 176,483
Accumulated other comprehensive income
Minority
interests
Total net
assets Valuation
difference on
available-for-
sale securities
Deferred gains or
losses on
hedges
Foreign currency
translation
adjustment
Remeasurements of
defined
benefit plans
Total
accumulated
other comprehensi
ve income
Outstanding balance at the
beginning of fiscal period 581 - (360) - 220 891 166,119
Changes of items during the
period
Issuance of new shares - 999
Dividends from surplus - (2,714)
Net income - 16,651
Purchase of treasury stock - (3,461)
Net changes of items other
than owner’s equity 99 (325) 1,416 - 1,190 341 1,532
Total changes of items during
the period 99 (325) 1,416 - 1,190 341 13,007
Balance as of March 20, 2014 681 (325) 1,055 - 1,410 1,232 179,127
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
14
Fiscal 2014 (March 21, 2014 to March 20, 2015)
(Unit: million yen)
Owner’s equity
Capital stock Capital surplus Retained
earnings Treasury stock
Total owner’s
equity
Outstanding balance at the
beginning of fiscal period 11,882 882 167,179 (3,461) 176,483
Changes of items during the
period
Dividends from surplus (3,029) (3,029)
Net income 24,815 24,815
Purchase of treasury stock (960) (960)
Net changes of items other
than owner’s equity -
Total changes of items during
the period - - 21,785 (960) 20,825
Balance as of March 20, 2015 11,882 882 188,964 (4,421) 197,309
Accumulated other comprehensive income
Minority
interests
Total net
assets
Valuation
difference on
available-for-sale
securities
Deferred gains or
losses on
hedges
Foreign currency
translation
adjustment
Remeasurements of
defined
benefit plans
Total
accumulated
other comprehensi
ve income
Outstanding balance at the
beginning of fiscal period 681 (325) 1,055 - 1,410 1,232 179,127
Changes of items during the
period
Dividends from surplus - (3,029)
Net income - 24,815
Purchase of treasury stock - (960)
Net changes of items other
than owner’s equity 765 39 2,149 (260) 2,693 4,900 7,593
Total changes of items during
the period 765 39 2,149 (260) 2,693 4,900 28,419
Balance as of March 20, 2015 1,446 (286) 3,205 (260) 4,104 6,133 207,547
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
15
(4) Consolidated Statements of Cash Flows
(Unit: million yen)
Fiscal 2013
(March 21, 2013 to March 20,
2014)
Fiscal 2014
(March 21, 2014 to March 20,
2015)
Net cash provided by (used in) operating activities
Income before income taxes and minority interest 30,721 40,696
Depreciation and amortization 18,924 21,428
Impairment loss 2,573 1,273
Increase (decrease) in provision for retirement benefits (501) -
Increase (decrease) in provision for bonuses 2,113 364
Increase (decrease) in net defined benefit liability - (543)
Interest and dividends income (255) (245)
Interest expenses 3,825 3,731
Loss (gain) on sales and retirement of noncurrent
assets
736 1,335
Decrease (increase) in notes and accounts
receivable-trade
6,379 (3,603)
Increase (decrease) in notes and accounts
payable-trade
762 1,135
Increase (decrease) in deposits received (6,179) (7,233)
Other 255 6,584
Subtotal 59,355 64,923
Interest and dividends income received 213 204
Interest expenses paid (4,159) (3,715)
Income taxes paid (10,336) (15,530)
Net cash provided by (used in) operating activities 45,072 45,882
Net cash provided by (used in) investing activities
Purchase of property, plant and equipment (20,759) (37,406)
Proceeds from sales of property, plant and equipment 88 562
Purchase of intangible fixed assets (3,970) (3,787)
Proceeds from collection of guarantee deposits 1,343 983
Purchase of investment securities (20) (40)
Purchase of investments in subsidiaries resulting in change
in scope of consolidation
(3,024) (6,991)
Proceeds from sales of investments in subsidiaries resulting
in change in scope of consolidation
- 534
Purchase of investments in subsidiaries - (463)
Other (937) (1,471)
Net cash provided by (used in) investing activities (27,280) (48,081)
Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable (9) 18,030
Proceeds from long-term loans payable 31,000 19,785
Repayment of long-term loans payable (49,542) (55,729)
Proceeds from issuance of bonds 8,786 -
Repayments of lease obligations (1,866) (1,475)
Proceeds from issuance of common stock 999 -
Purchase of treasury stock (3,461) (960)
Cash dividends paid (2,714) (3,029)
Cash dividends paid to minority shareholders (8) -
Proceeds from stock issuance to minority shareholders 80 -
Net cash provided by (used in) financing activities (16,736) (23,378)
Effect of exchange rate change on cash and cash
equivalents
738 1,613
Net increase (decrease) in cash and cash equivalents 1,793 (23,964)
Outstanding balance of cash and cash equivalents,
beginning of fiscal period/year
84,680 86,473
Outstanding balance of cash and cash equivalents, end of
fiscal period/year
86,473 62,509
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
16
(5) Notes on Consolidated Financial Statements
(Significant Items Relating to the Preparation of Consolidated Financial Statements)
1. Scope of Consolidation
(i) Number of consolidated subsidiaries: 108
Names of principal consolidated subsidiaries:
SAGAWA EXPRESS CO., LTD.
SG MOVING CO., LTD.
WORLD SUPPLY CO., LTD.
SAGAWA GLOBAL LOGISTICS CO., LTD.
SAGAWA LOGISTICS PARTNERS CO., LTD.
SGH GLOBAL JAPAN CO., LTD.
SG REALTY CO., LTD.
SAGAWA ADVANCE CO., LTD.
SG MOTORS CO., LTD.
SG SYSTEMS CO., LTD.
SAGAWA FINANCIAL CO., LTD.
SG FIELDER CO., LTD.
SG EXPERT CO., LTD.
SG HOLDINGS GLOBAL PTE. LTD.
SAGAWA EXPRESS (H.K.) CO., LTD.
SAGAWA EXPRESS VIETNAM CO., LTD.
AMEROID LOGISTICS (S) PTE. LTD.
EXPOLANKA HOLDINGS PLC
EXPOLANKA HOLDINGS PLC and its 75 subsidiaries are included in the scope of consolidation in
the consolidated fiscal year under review as a result of purchase of shares in EXPOLANKA
HOLDINGS. Eight of these companies including EXPOLANKA TEAS (PVT) LTD. are excluded
from the scope of consolidation due to sale of shares, and a newly established company is included in
the scope of consolidation.
As a result, the number of consolidated subsidiaries increased by 69.
(ii) Name etc. of non-consolidated subsidiary
Name of non-consolidated subsidiary
SAGAWA EXPRESS HAWAII, INC.
(Reason for exclusion from the scope of consolidation)
This is because the size of this non-consolidated subsidiary is small, and the aggregate amount of
total assets, operating revenue, net income (calculated by the equity method) and retained earnings
(calculated by the equity method), etc. do not significantly affect the consolidated financial
statements.
2. Notes on Application of the Equity Method
(i) Number of affiliates subject to the equity method: 10
Names of principal companies
SINDHU CARGO SERVICES PTE. LTD.
Seven affiliates of EXPOLANKA HOLDINGS PLC are included in the scope of equity method in the
consolidated fiscal year under review as a result of purchase of shares in EXPOLANKA HOLDINGS
PLC.
(ii) Name etc. of non-consolidated subsidiaries and affiliates not subject to the equity method
Name of principal companies
(Non-consolidated subsidiary) SAGAWA EXPRESS HAWAII, INC.
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
17
(Reasons for not applying the equity method)
This is because net income and retained earnings of this non-consolidated subsidiary/affiliate, not
subject to the equity method (calculated by the equity method), do not significantly affect the
Company's consolidated financial statements and do not have importance as a whole, even if this
company was excluded from the subject of equity method.
(iii) Information specific to application of the equity method
Since affiliates under the equity method close their books on a date other than the consolidated
closing, we used their financial statements calculated based on provisional settlement of accounts as
of December 31.
3. Accounting Periods of Consolidated Subsidiaries
Among our consolidated overseas subsidiaries, 23 companies including SAGAWA EXPRESS (H.K.)
CO., LTD. close their books on December 31. When preparing our consolidated financial statements, we
used their financial statements that were prepared based on their fiscal years ended on such date.
Among our consolidated overseas subsidiaries, 69 companies including EXPOLANKA HOLDINGS
PLC close their books on March 31. When preparing our consolidated financial statements, we used their
financial statements that were prepared based on provisional settlement of accounts as of December 31.
We made adjustments necessary for consolidation if there were material transactions during the period
between such closing date and the closing date of consolidated accounts.
4. Accounting Policies and Standards
(i) Appraisal standards and methods for important assets
(a) Securities
Other securities
Marketable
Reported at the market value of the securities on the closing date
(Valuation differences are recorded as net unrealized gain on other securities in net assets, and
the cost of sales is calculated using the moving average method.)
Non-marketable
Reported at cost using the moving average method
(b) Derivatives
Reported at the market value
(c) Inventories
Real estate for sale, merchandise, finished goods, raw materials, work in process:
Mainly reported at cost on an individual specified cost basis
(Balance sheet value is stated by writing down the carrying value based upon lowered
profitability.)
Raw materials
Mainly reported at cost using the gross average method
(Balance sheet value is stated by writing down the carrying value based upon lowered
profitability.)
Supplies
Mainly reported at cost based on the first-in first-out method
(Balance sheet value is stated by writing down the carrying value based upon lowered
profitability.)
(ii) Depreciation and amortization methods for important depreciable and amortizable assets
(a) Property, plant and equipment (except lease assets)
The Company and its major consolidated domestic subsidiaries adopt the declining balance
method, except for the buildings (excluding fixtures) acquired on and after April 1, 1998, which
are depreciated using the straight-line method. Major consolidated overseas subsidiaries adopt the
straight-line method.
(b) Intangible fixed assets (except lease assets)
Amortized using the straight-line method. However, software for the Company's own use is
amortized over the period it can be used by the Company (five years).
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
18
(c) Lease assets
Lease assets related to finance lease transactions with title transfer:
Depreciated by the same method as the depreciation method applied to the fixed assets held by the
Company. Lease assets related to finance lease transactions without title transfer:
Depreciated by the straight-line method, with the lease period counted as their useful lives and no
residual value. Finance lease transactions without title transfer (of which the starting dates of
lease transaction are prior to the beginning of the first consolidated fiscal year to which the
Accounting Standard No. 13 "Accounting Standard Concerning Lease Transactions" were
applied) are accounted for as operating leases.
(iii) Treatment of deferred assets
(a) Bond issuance cost
Depreciated by the straight-line method for a period of time up to the redemption of bonds.
(iv) Reporting standards for important allowances
(a) Allowance for doubtful accounts
The Company makes this allowance for losses arising from doubtful account. For normal debts,
the amount of the allowance is determined using past default rates. In the case of specific debts
that are considered to be at risk of souring, the amount of the allowance is the amount that is
deemed unlikely to be recovered following an assessment of the individual debt concerned.
(b) Provision for bonuses
The Company makes this allowance for employees' bonus payments based on estimated bonus to
be paid in this consolidated fiscal year.
(c) Provision for directors' bonuses
The Company makes this allowance for directors' bonus payments based on estimated bonus to be
paid in this consolidated fiscal year.
(d) Provision for directors' retirement benefits
The Company makes allowance for directors’ retirement benefits at the end of the fiscal year in
accordance with the Company’s internal rules. The Company abolished the directors’ retirement
benefits in June 2006, and no allowance for this benefit is recorded thereafter.
(v) Accounting for retirement benefits
(a) Attributing expected retirement benefits to periods
Retirement benefit obligations are calculated by attributing expected retirement benefits to a
period up to the end of the consolidated fiscal year under review on a point basis.
(b) Treatment of actuarial gains or losses and past service costs
Actuarial gains or losses are recognized commencing with the consolidated fiscal year following
their accrual and are amortized ratably on a straight-line basis over a specified number of years (8
years), which does not exceed the average remaining years of service of employees at the time of
their accrual in each consolidated fiscal year. Past service costs are recognized as they are
incurred.
(vi) Accounting for important hedging activities
(a) Accounting for hedging activities
Deferred hedge accounting is adopted.
Interest rate swaps that meet certain conditions are accounted for according to exceptional
treatments, while forward exchange contracts that meet condition of appropriation are accounted
for according to such appropriation treatment.
(b) Hedging instruments and items hedged
Hedging instruments: Interest rate swap, forward exchange contracts
Items hedged: Interest on loans, Interest on bonds, accounts payable in foreign currencies
(c) Hedging policy
The Company enters into derivative contracts in order to hedge against the risk of fluctuations in
interest rates and currency exchange rates in the amount not exceeding the accounts payable
relating thereto.
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
19
(d) Evaluation of the efficacy of hedging activities
The performance of the hedging instruments and the items hedged is compared using their total
amount of fluctuations in the market, based on which the efficacy is evaluated.
However, evaluation of the efficacy of the interest rate swaps subject to the specific treatment is
omitted.
(vii) Amortization method and amortization period of goodwill
Goodwill is amortized using the straight-line method over its estimated useful life determined for
each business combination, not exceeding twenty years. However, goodwill which is fairly
immaterial is included as an expense in the consolidated fiscal year of its occurrence.
(viii) Definitions of cash used in the consolidated cash flow statements
Cash and cash equivalents include cash at hand, highly liquid deposits at banks and short-term
investments with negligible risk of fluctuation in value and maturities of less than three months.
(ix) Other accounting policies for the preparation of consolidated financial statements
(a) Treatment of consumption tax
Consumption tax is treated outside of the financial statements.
(b) Application of consolidated taxation system
The consolidated taxation system is being used.
(Changes in Accounting Policies)
(Adoption of Accounting Standard for Retirement Benefits, etc.)
The Accounting Standard for Retirement Benefits (ASBJ Statement No. 26, May 17, 2012) and the
Guidance on Accounting Standard for Retirement Benefits (ASBJ Guidance No. 25, May 17, 2012) have
been adopted in the preparation of consolidated financial statements beginning with the consolidated fiscal
year under review (with the exception of provisions set forth in Article 35 of the Accounting Standard for
Retirement Benefits and Article 67 of the Guidance on Accounting Standard for Retirement Benefits).
Accordingly, we adopted an accounting method where the amount of retirement benefit obligations is
recognized as a net defined benefit liability, and therefore actuarial gains or losses that are yet to be
recognized are reported as a net defined benefit liability.
In accordance with transitional accounting as stipulated in article 37 of the Accounting Standard for
Retirement Benefits, the amounts affected by this change in the consolidated fiscal year under review were
either added to or deducted from the remeasurements of defined benefit plans, which are included in
accumulated other comprehensive income.
As a result, as of the end of the consolidated fiscal year under review, a net defined benefit liability
totaling 37,447 million yen was recognized and accumulated other comprehensive income declined 260
million yen.
In the meantime, net asset value per share dropped 2.52 yen.
(Changes in Presentation)
(Consolidated Balance Sheets)
Goodwill, which was included in other intangible fixed assets in the previous consolidated fiscal year, is
presented as a separate line item beginning with the consolidated fiscal year under review because of its
increased qualitative materiality. In order to reflect these changes, we made a revision to the previous
fiscal year's consolidated financial statements.
Due to this revision, 5,939 million yen, which was posted as “other” in intangible fixed assets in the
previous fiscal year's consolidated balance sheets, was reposted as “goodwill” totaling 2,403 million yen
and “other” totaling 3,535 million yen.
(Segment Information, etc.)
1. Overview of Reporting Segments
The Company’s reporting segments are regularly reviewed by the Board of Directors using the
segregated financial information available within each segment to determine the allocation of
management resources and evaluate business results.
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
20
The Group is operating business by categorizing products and services of consolidated subsidiaries
under the wings of the Company, which is a pure holding company, into three business segments.
Therefore, the Company uses the three reporting segments of “Delivery Business”, “Logistics
Business”, and “Real Estate Business” based on the said segments.
Starting with the consolidated fiscal year under review, SG HOLDINGS GLOBAL PTE. LTD., which
was previously included in the logistics businesses segment, is reported as adjustments in the “all
company (common)” segment since it has been shifted to a holding company overseeing overseas
business operations. Accordingly, the Company has prepared and disclosed the segment information for
the previous consolidated fiscal year based on the categorization of reporting segments for the
consolidated fiscal year under review.
Main products and services of each reporting segment
Reporting segment Major products and services
Delivery Business Hikyaku Express, Hikyaku Cool Express, Hikyaku Mail Express, Hikyaku Air Express, etc.,
Moving transportation, Route delivery service, Charter transportation, Installation
transportation, Art transportation, Collective delivery services, Food delivery service
Logistics Business Lump-sum acceptance of orders for logistics services, Development of logistics systems,
Control and management of inventory and orders placed and received, Management of
distribution centers, Warehousing, Transportation using public transport, Sgx (international
delivery service), International air and marine transportation services
Real Estate Business Real estate leasing and management, Real estate development, Real estate fund, Renewable
energy supply
2. Methods Used to Calculate Operating Revenue, Income or Loss, Assets, and Other Items by
Reporting Segment
The accounting method used for the reported business segment is the same as the one used for
“Significant Items Relating to the Preparation of Consolidated Financial Statements.”
Profit by reporting segment is stated on an operating income basis. Amounts for intersegment
transactions or transfers are calculated based on market prices.
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
21
3. Information on Operating Revenue, Income or Loss, Assets, and Other Items by Reporting
Segment
Fiscal 2013 (March 21, 2013 to March 20, 2014)
(Unit: million yen)
Delivery
Business
Logistics
Business
Real Estate
Business
Other
(Note 1) Total
Adjustments
(Note 2)
Amounts on
consolidated
financial
statements
(Note 3)
Operating revenue
Outside customers
Operating revenue
from internal
transactions between
different segments /
transfer of balances
between different
segments
709,441
37,606
54,872
7,949
12,377
2,555
58,395
60,971
835,086
109,083
-
(109,083)
835,086
-
Total 747,048 62,821 14,932 119,366 944,170 (109,083) 835,086
Segment income 36,373 344 3,158 4,313 44,190 (806) 43,383
Segment Asset 389,874 35,245 90,827 70,300 586,248 (26,778) 559,469
Other items
Depreciation and
amortization
Increase in property,
plant and equipment
and intangible fixed
assets
13,890
7,942
884
1,431
2,095
14,084
1,402
2,351
18,273
25,809
631
1,486
18,905
27,295
(Note) 1. The “Other” includes product sales, insurance agent, fuel sales, automobile services, automobile sales,
manufacture of auto bodies, system sales and maintenance, e-collect service, and temporary staffing service and
providing staffing services under contract.
2. The details of adjustments are as follows:
(1) The (806) million yen segment income adjustment includes 5,586 million yen in eliminations for
intersegment transactions and (6,393) million yen of companywide expenses not allocated to the respective
reporting segments. Companywide expenses are primarily the Company’s operating expenses.
(2) The (26,778) million yen segment asset adjustment includes (81,207) million yen in eliminations for
intersegment transactions and 54,428 million yen of companywide assets not allocated to the respective
reporting segments. Companywide assets are primarily the Company’s surplus funds and funds for
long-term investments (cash and deposits, investment securities).
(3) The 631 million yen depreciation adjustment is primarily depreciation of companywide assets not allocated
to the respective reporting segments.
(4) The 1,486 million yen adjustment for an increase in property, plant and equipment and intangible fixed
assets is the amount of companywide capital investments not allocated to the respective reporting segments.
3. Segment income is adjusted to operating income of consolidated financial statements.
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
22
Fiscal 2014 (March 21, 2014 to March 20, 2015)
(Unit: million yen)
Delivery
Business
Logistics
Business
Real Estate
Business
Other
(Note 1) Total
Adjustments
(Note 2)
Amounts on
consolidated
financial
statements
(Note 3)
Operating revenue
Outside customers
Operating revenue
from internal
transactions between
different segments /
transfer of balances
between different
segments
712,566
36,022
80,935
7,719
4,589
4,666
59,358
70,941
857,449
119,349
-
(119,349)
857,449
-
Total 748,589 88,654 9,255 130,299 976,799 (119,349) 857,449
Segment income 39,119 336 2,805 5,006 47,268 (1,674) 45,594
Segment Asset 396,491 58,138 119,981 68,404 643,015 (57,784) 585,230
Other items
Depreciation and
amortization
Increase in property,
plant and equipment
and intangible fixed
assets
14,831
22,816
1,293
1,820
3,339
21,975
1,289
1,871
20,753
48,483
632
421
21,385
48,905
(Note) 1. The “Other” includes product sales, insurance agent, fuel sales, automobile services, automobile sales,
manufacture of auto bodies, system sales and maintenance, e-collect service, and temporary staffing service and
providing staffing services under contract.
2. The details of adjustments are as follows:
(1) The (1,674) million yen segment income adjustment includes 6,189 million yen in eliminations for
intersegment transactions and (7,864) million yen of companywide expenses not allocated to the respective
reporting segments. Companywide expenses are primarily the Company’s operating expenses.
(2) The (57,784) million yen segment asset adjustment includes (93,222) million yen in eliminations for
intersegment transactions and 35,437 million yen of companywide assets not allocated to the respective
reporting segments. Companywide assets are primarily the Company’s surplus funds and funds for
long-term investments (cash and deposits, investment securities).
(3) The 632 million yen depreciation adjustment is primarily depreciation of companywide assets not allocated
to the respective reporting segments.
(4) The 421 million yen adjustment for an increase in property, plant and equipment and intangible fixed assets
comes from (302) million yen in eliminations for intersegment transactions and the companywide capital
investments totaling 724 million yen not allocated to the respective reporting segments.
3. Segment income is adjusted to operating income of consolidated financial statements.
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
23
5. Non-Consolidated Financial Statements
(1) Balance Sheets
(Unit: million yen)
FY2013
(March 20, 2014)
FY2014
(March 20, 2015)
Assets
Current assets
Cash and deposits 45,720 23,954
Operating accounts receivable 327 323
Prepaid expenses 20 23
Deferred tax assets 28 24
Short-term loans receivable 3,273 10,640
Current portion of long-term loans 12,948 28,229
Accounts receivable-other 6,242 6,356
Other 504 384
Total current assets 69,065 69,937
Fixed assets
Property, plant and equipment
Buildings (net) - 0
Machinery and equipment (net) 13 11
Tools, furniture and fixtures (net) 2 16
Lease assets (net) 7 12
Total property, plant and equipment 23 40
Intangible fixed assets
Right of trademark 12 9
Software 4 13
Total intangible fixed assets 16 22
Investments and other assets
Investment securities 3,549 4,468
Stocks of subsidiaries and affiliates 190,359 196,417
Long-term loans receivable 166,247 161,104
Long-term prepaid expenses 18 22
Other 163 178
Total investments and other assets 360,338 362,192
Total fixed assets 360,378 362,255
Deferred assets
Bond issuance cost 204 162
Total deferred assets 204 162
Total assets 429,648 432,354
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
24
(Unit: million yen)
FY2013
(March 20, 2014)
FY2014
(March 20, 2015)
Liabilities
Current liabilities
Short-term loans payable 60,520 92,560
Current portion of long-term loans payable 55,134 23,138
Lease obligations 1 3
Accounts payable-other 747 1,014
Accrued expenses 632 724
Income taxes payable 5,655 4,587
Provision for bonuses 26 33
Other 34 117
Total current liabilities 122,753 122,181
Noncurrent liabilities
Bonds payable 9,000 9,000
Long-term loans payable 134,637 131,479
Lease obligations 5 9
Provision for retirement benefits 17 69
Deferred tax liabilities 75 391
Other 427 380
Total non-current liabilities 144,163 141,331
Total liabilities 266,917 263,512
Net assets
Owner’s equity
Capital stock 11,882 11,882
Capital surplus
Legal capital surplus 109,089 109,089
Total capital surplus 109,089 109,089
Retained earnings
Other retained earnings
General reserve 30,000 30,000
Retained earnings brought forward 15,189 21,628
Total retained earnings 45,189 51,628
Treasury stock (3,461) (4,421)
Total owner’s equity 162,700 168,179
Valuation and translation adjustments
Valuation difference on available-for-sale securities 356 949
Deferred gains or losses on hedges (325) (286)
Total valuation and translation adjustments 30 662
Total net assets 162,731 168,842
Total liabilities and net assets 429,648 432,354
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
25
(2) Statements of Income
(Unit: million yen)
FY2013
(March 21, 2013 to March 20,
2014)
FY2014
(March 21, 2014 to March 20,
2015)
Operating revenue 13,290 17,518
Operating cost 3,732 3,636
Operating gross profit 9,557 13,881
General and administrative expenses 4,313 4,532
Operating income 5,244 9,349
Non-operating income
Interest income 9 7
Dividends income 97 106
Other 26 33
Total non-operating income 133 147
Non-operating expenses
Interest expenses 0 0
Other 0 -
Total non-operating expenses 0 0
Ordinary income 5,377 9,496
Extraordinary loss
Loss on retirement of noncurrent assets - 0
Compensation for cancellation of contracts 50 -
Other 5 -
Total extraordinary loss 55 0
Income before income taxes and minority interest 5,321 9,496
Income taxes-current (3) 42
Income taxes-deferred 169 (14)
Total income taxes 166 27
Net income 5,155 9,468
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
26
(3) Statements of Changes in Net Assets
Fiscal 2013 (March 21, 2013 to March 20, 2014)
(Unit: million yen)
Owner’s equity
Capital
stock
Capital surplus Retained earnings
Treasury
stock
Total
owner’s
equity
Legal
capital
surplus
Total
capital
surplus
Other retained
earnings Total
retained
earnings General
reserve
Retained
earnings
brought
forward
Outstanding balance at the
beginning of fiscal period 11,383 108,589 108,589 30,000 12,748 42,748 - 162,720
Changes of items during the
period
Issuance of new shares 499 499 499 - 999
Dividends from surplus - (2,714) (2,714) (2,714)
Net income - 5,155 5,155 5,155
Purchase of treasury stock - - (3,461) (3,461)
Net changes of items other
than owner’s equity - - -
Total changes of items during
the period 499 499 499 - 2,441 2,441 (3,461) (19)
Balance as of March 20, 2014 11,882 109,089 109,089 30,000 15,189 45,189 (3,461) 162,700
Valuation and translation adjustments
Total net assets Valuation
difference on
available-for-sale
securities
Deferred gains or
losses on hedges
Total valuation
and translation
adjustments
Outstanding balance at the
beginning of fiscal period 189 - 189 162,910
Changes of items during the
period
Issuance of new shares - 999
Dividends from surplus - (2,714)
Net income - 5,155
Purchase of treasury stock - (3,461)
Net changes of items other
than owner’s equity 166 (325) (159) (159)
Total changes of items during
the period 166 (325) (159) (179)
Balance as of March 20,
2014 356 (325) 30 162,731
SG HOLDINS CO., LTD. Financial Report for Fiscal 2014 (Consolidated)
27
Fiscal 2014 (March 21, 2014 to March 20, 2015)
(Unit: million yen)
Owner’s equity
Capital
stock
Capital surplus Retained earnings
Treasury
stock
Total
owner’s
equity Legal
capital
surplus
Total
capital
surplus
Other retained
earnings
Total
retained
earnings General
reserve
Retained
earnings
brought
forward
Outstanding balance at the
beginning of fiscal period 11,882 109,089 109,089 30,000 15,189 45,189 (3,461) 162,700
Changes of items during the
period
Dividends from surplus - (3,029) (3,029) (3,029)
Net income - 9,468 9,468 9,468
Purchase of treasury stock - - (960) (960)
Net changes of items other
than owner’s equity - - -
Total changes of items during
the period - - - - 6,439 6,439 (960) 5,479
Balance as of March 20, 2015 11,882 109,089 109,089 30,000 21,628 51,628 (4,421) 168,179
Valuation and translation adjustments
Total net assets Valuation
difference on
available-for-sale
securities
Deferred gains or
losses on hedges
Total valuation
and translation
adjustments
Outstanding balance at the
beginning of fiscal period 356 (325) 30 162,731
Changes of items during the
period
Dividends from surplus - (3,029)
Net income - 9,468
Purchase of treasury stock - (960)
Net changes of items other
than owner’s equity 592 39 632 632
Total changes of items during
the period 592 39 632 6,111
Balance as of March 20,
2015 949 (286) 662 168,842