This document is a translation of the Japanese financial statements and is not in conformity with accounting principles of the United States.

SENKO Co., Ltd.

Summary of Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2011
July29, 2010
Name of Listed Company:
Code Number:

SENKO Co., Ltd.
9069

Stock listed on: the First Section of the Tokyo Stock Exchange
and Osaka Securities Exchange
URL http://www.senko.co.jp
Representative:
Title: President
Name: Yasuhisa Fukuda
Inquiries:
Title: Executive Officer, Public Relations
Name: Noburoh Sasaki
Tel. (06) 6440-5155
Scheduled Date of Issue of Financial Report:
August 12, 2010
Scheduled Date of Dividend Paid:
Supplemental Information Materials:
None
Scheduled Date of Quarterly Information Meeting:
None

1.

Consolidated Operating Results for the First Quarter Ending March 2011 (From April 1, 2010 to March 31, 2011)(1) Consolidated Operating Results
Note: Amounts less than one million yen have been rounded down.
Operating Revenues
Operating income
Ordinary income
Net income
Million yen%
Million yen%
Million yen%
Million yen%
First quarter ending March 31, 2011
58,899 13.2
1,479
8.0
1,526
7.8
654
34.2
First quarter ended March 31, 2010
52,009 (1.6)
1,370
0.6
1,415
1.8
487
(29.2)Net income

Diluted net income

per shareper share
Yen
5.89
4.44

First quarter ending March 31, 2011
First quarter ended March 31, 2010

Yen
5.31
4.00

(2) Consolidated Financial Position
Total assets
Million yen
170,769
168,131First quarter ending March 31, 2011
Fiscal year ended March 31, 2010
(Reference) Shareholders’ equity:
First quarter ending March 31, 2011 57,851 million yen
2.

Equity ratio
%
33.9
32.0

Net assets per shareYen
463.50489.99Fiscal year ended March 31, 2010 53,809million yen

Dividends
First quarter
Yen-

Fiscal year ended March 31, 2010
Fiscal year ending March 31, 2011
Fiscal year ending March 31, 2011
(Forecast)(Note) Revision of dividends forecast in the first quarter: No
3.

Net assets
Million yen
59,56255,123

Second quarter
Yen
4.00

Annual dividends
Third quarter
Yen
-

4.00

-

Year end

Total
Yen
4.00

Yen
8.00

4.00

8.00

Forecast of Consolidated Operating Results for the Year Ending March 2011 (From April 1, 2010 to March 31, 2011)
Operating revenues
Million yen%

Operating income

Millionyen
2nd quarter ending September 2010
117,000
8.3
2,850
Fiscal year ending March 2011
240,000
5.4
6,500(Note) Revision of consolidated results forecast in the first quarter: No

%
3.1
5.7

Ordinary income
Million
yen
2,800
6,500

Net income per

Net income%

Million yen

%

share
Yen

3.8
4.3

1,300
3,100

1.0
5.2

11.02
25.11

4.

Others(Note) Please see [Attached Information] “Other” on page 4 for details.
(1) Changes in significant subsidiaries during the period (Changes in specified subsidiaries associated with change in scope of consolidation): None
(2) Application of simplified accounting procedures or of distinctive accounting procedures for the preparation of quarterly
consolidated financial statements: Yes(3) Changes in accounting principles, accounting procedures and presentation methods related to preparation of consolidated financial statements(Changes to be stated in the section “Changes in significant matters providing the basis for preparing consolidated financial statements”)
a. Changes involving amendments and revisions to accounting standards: Yes
b. Changes other than those included in the above a.: None
(4) Shares outstanding (Common shares)
a. Shares outstanding at fiscal year end (including treasury stocks)
First quarter ended March 31, 2011

126,989,476 sharesFiscal year ended March 31, 2010

111,989,476 sharesFirst quarter ended March 31, 2011

2,174,664 sharesFiscal year ended March 31, 2010

2,172,362 sharesc. Average number of sharesFirst quarter ended March 31, 2011

111,133,831 sharesFirst quarter ended March 31, 2010

109,814,571 sharesb. Treasury stocks at fiscal year end*Information concerning quarterly review procedure This quarterly financial report is not subject to the quarterly review procedure prescribed by the Financial Instruments and Exchange Law. The review
procedure prescribed by the Financial Instruments and Exchange Law for the quarterly consolidated financial statements had not been completed
when this quarterly financial report was released.
*About the Appropriate Use of Business Forecasts
 Forward-looking statements in these materials are based on information available to management at the time this report was prepared andassumptions that management believes are reasonable. Actual results may differ significantly from these statements for a number of reasons. For
information about the assumptions used for forecasts and precautions concerning the use of forecasts, please see “Forecast for Fiscal Year Ending
March 2011” on page 3
 The number of shares outstanding increased by 17 million a a result of a public offering of new shares in June and a private placement of sharesthrough a secondary offering (over allotment) in July. Net income per share for the fiscal year ending March 2011reflects the above increase in
outstanding shares.

Index to accompanying materials
1.

2.

Results of Operations and Financial Condition

2(1)

Results of Operations

2(2)

Financial condition3(3)

Forecast for Fiscal Year Ending March 20113

Other information

4(1)

Changes in material subsidiaries

4(2)

Adoption of simplified accounting procedures or specific accounting procedures

4for consolidated quarterly financial statement(3)

Changes in accounting principles, accounting procedures and presentation methods

4

for consolidated financial statements(4)3.

Summary of premise of going concern

4

Consolidated financial statements

5(1)

Consolidated balance sheets

5(2)

Consolidated statements of income

7(3)

Consolidated statements of cash flows

8(4)Note to assumption of going concern

9(5)Consolidated segment information

9(6)

Material changes in shareholders’ equity

11

(7)

Other information

111

1. Results of Operations and Financial Condition(1) Results of Operations
In the first quarter, Japan’s economy recovered along with growth in exports and benefits of the government’s economic stimulus
measures. However, the recovery began to weaken in May and the pace of the recovery is currently slowing.
In the logistics industry, the operating environment remains challenging. Cargo volume within Japan is expected to decline for the 11th
consecutive year based on the outlook for a weak rebound in domestic demand in the current fiscal year, too.
The current fiscal year is the beginning of the Senko Group’s new three-year medium-term management plan that is based on theslogan “Moving Global.” In April, we started operations at the Fukui PD Center. In May, we established a joint venture in Horgos,
Kazakhstan with a local company in order to start a logistics business. In June, we reached an agreement with two other companies,
including a Chinese firm, to expand our Japan-China integrated fashion distribution operations in Qingdao.
As a result, first quarter operating revenues benefited from a number of factors. Most significant was aggressive measures to attract
new customers, growth in sales in the existing business sectors of distribution logistics, homebuilding logistics and chemical logistics,
the addition of Marufuji Co., Ltd. to the Senko Group, and higher sales of petroleum products. Overall, consolidated first quarter
operating revenues totaled 58,899 million yen, 13.2% higher than one year earlier.
Operating income increased 8.0% to 1,479 million yen, ordinary income increased 7.8% to 1,526 million yen and net income was up
34.2% to 654 million yen.
First quarter business segment performance was as follows.
Logistics
Operating revenues increased 6.1% to 51,406 million yen mainly because of aggressive actions to capture new business and growth
in revenues in current operations.
Trading and Commerce
Operating revenues increased 133.6% to 6,711 million yen due to the acquisition of Marufuji and higher sales of petroleum products.
OthersOperating revenues increased 11.0% to 782 million yen because of growth in the outsourced information processing business.
ReferenceStarting with the first quarter of the fiscal year ending March 31, 2011, Senko has changed its business segments due to adoption of“Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” (ASBJ Statement No. 17, March 27,2009) and “Guidance on Accounting Standard for Disclosures about Segments of an Enterprise and Related Information” (ASBJ
Guidance No. 20, March 31, 2008). The new business segments for financial reporting are as follows.
(Unit: ¥ million)
Three months ended March
Three months ended March
Change31, 2009
31, 2010
Logistics
48,431
51,406
6.1%
Trading and Commerce
2,872
6,711
133.6%
Others
704
782
11.0%
Total
52,00958,89913.2%

2

(2) Financial Condition(a) Assets, liabilities and net assets
Total assets were 170,769 million yen at the end of the first quarter, 2,638 million yen more than at the end of the previous fiscal
year. The main reason was an increase of 2,844 million yen in fixed assets because of the newly completed Fukui PD Center andconstruction of the Kanazawa PD Center, which started operations in July.
Total liabilities decreased 1,801 million yen to 111,206 million yen. This was the result of decreases of 1,666 million yen in
accrued income taxes, 1,789 million yen in the allowance for bonuses and declines in other items.
(b) Net assets
Net assets increased 4,439 million yen to 59,562 million yen. This was mainly the result of increases of 1,919 million yen incommon stock and in the capital surplus because of the June public offering of stock. The equity ratio increased by 1.9
percentage point to 33.9%.
(c) Cash flows
There was a net decrease of 937 million yen in cash and cash equivalents to 13,567 million yen at the end of the first quarter.
Net cash used in operating activities was 1,836 million yen. Cash was provided by income before income taxes and minority
interests of 1,230 million yen and depreciation and amortization of 1,326 million yen. Cash was used by a 1,789 million yen
decrease in accrued bonuses to employees and income tax paid of 1,699 million yen.
Net cash used in investing activities was 2,046 million yen. The largest use of cash was 1,285 million yen for purchases of fixed
assets.
Net cash provided by financing activities was 2,440 million yen. There were proceeds of 3,839 million yen from the issuance ofstock and payments of 500 million yen for the repayment of short-term loans and 406 million yen for dividends.
(3) Forecast for Fiscal Year Ending March 2011
Although Japan’s economy is recovering, the upturn has been losing momentum since May. As a result, the operating environment for
the Senko Group is expected to remain difficult.
The Senko Group has started a new three-year medium-term management plan that is based on the slogan “Moving Global.” Theobjective is to leverage all of the group’s strengths to become a “logistics and information company.” We are determined to be a global
source of high-quality services with outstanding performance in relation to cost. We are also dedicated to co-existing with society andenabling our employees to develop and achieve their goals.
At this time, there are no revisions to the first half and fiscal year consolidated forecasts that were announced on April 27, 2010.

3

2. Other Information(1) Changes in major subsidiaries
None(2) Summary of simplified or special accounting methods(a) Method for estimating losses on ordinary receivables
To estimate losses on ordinary receivables, the actual loss ratio used at the end of the previous fiscal year was used because theCompany believes there was no significant change between this loss ratio and the loss ratio at the end of the first quarter.
(b) Method for calculating deferred tax assets and liabilities
To determine the likelihood of collecting deferred tax assets, business forecasts and tax planning that were used for thisdetermination at the end of the previous fiscal year were used because the Company believes there have been no significant
changes since the end of the previous fiscal year in the operating environment and in the occurrence of one-time items and otheritems.
(3) Summary of changes in accounting principles and procedures, presentation methods and other items
Starting with the first quarter of the fiscal year ending March 31, 2011, “Accounting Standard for Asset Retirement Obligations” (ASBJ
Statement No. 18, March 31, 2008) and “Guidance on Accounting Standard for Asset Retirement Obligations (ASBJ Guidance No. 21,
March 31, 2008) have been applied. This change reduced first quarter operating income and ordinary income by 4 million yen eachand reduced first quarter income before income taxes and minority interests by 134 million yen.
(4) Significant items about going-concern assumption
None

4

3. Consolidated financial statements(1) Consolidated balance sheets(Unit: ¥ million)
June 30, 2010

March 31, 2010

AssetsCurrent assets

13,567

14,504

Cash and deposits

30,82530,364

Notes and accounts receivable

839

1,237

Merchandise

24

24

Real estate for sale

139

112

Supplies

254

202

5,635

5,043

(47)

(44)

51,23951,445Work in process
Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures (net)38,562

36,669

Land

35408

35,401Other (net)

10,178

10,164

Total Property, plant and equipment

84,14982,235Intangible assets

4,089

3,616

Guarantee deposits

8,690

8,728

Deferred tax assets

5,115

5,007

Other

17,737

17,348

Allowance for doubtful accounts

(252)

(251)

Total investments and other assets

31,29030,832

Total noncurrent assets

119,529

116,685

Total assets

170,769

168,131

Investments and other assets

5

(Unit: ¥ million)
June 30, 2010

March 31, 2010

Liabilities
Current liabilities
Notes and operating accounts payable- trade21,98822,473

Short-term loans payable

14,817

15,320

Income taxes payable

178

1,845

Provision for bonuses

1,594

3,384

21

84

Other

10,251

8,251

Total current liabilities

48,852

51,359

Bonds

7,000

7,000

Convertible bond-type bonds with subscription rights

4,900

4,900

Long-term loans payable

31,294

31,396

Provision for retirement benefits

9,945

9,907

Provision for directors’ retirement benefits

42

53

Provision for special repairs

59

25

Provision for directors’ bonuses

Noncurrent liabilities

Assets retirement obligations

287

-

Other

8,826

8,366

Total noncurrent assets

62,354

61,648111,206

113,008

Capital stock

20,265

18,345

Capital surplus

18,527

16,607Retained earnings

19,834

19,604

(773)

(772)

57,85353,785

Valuation differences on available-for-sale securities

(2)

49

Deferred gains or losses on hedges

(19)

(22)

Foreign currency translation adjustment

21

(3)

Total valuation and translation adjustments

(1)

23

80

80

Minority interests

1,631

1,233

Total net assets

59,56255,123Liabilities and net assets

170,769

168,131

Total liabilities
Net assets
Shareholders’ equity

Treasury stock
Total shareholders’ equity
Valuation and translation adjustments

Subscription rights to shares

6(2) Consolidated statements of income(Unit: ¥ million)
Three months ended June 30,

Three months ended June 30,

2009

2010

Operating revenues

52,00958,899

Cost of sales

47,55253,886Gross profit

4,456

5,013

Selling, general and administrative expenses

3,085

3,533

Operating income

1,370

1,479

Interest income

50

48

Dividends income

235

235

Other

160

167

Total non-operating income

446

451

Interest expenses

282

293

Other

119

112

Total non-operating expenses

401

405

1,415

1,526

195

143

-

130

Loss on cancellation of lease contracts

68

22

Loss on prior periods adjustment

180-

Total extraordinary loss

444

295

Income before income taxes

971

1,230

Income taxes- current

145

123

Income taxes- deferred

349

440

Total income taxes

494

563

Income before minority interests-

666

Minority interest in income or loss

(11)

11

Net income

487

654

Non-operating income

Non-operating expenses

Ordinary income
Extraordinary loss
Loss on retirement of noncurrent assets
Loss on adjustment for changes of accounting standard for asset
retirement obligations

7

(3) Consolidated statements of cash flows(Unit: ¥ million)
Three months ended June 30,

Three months ended June 30,

2009

2010

Cash flows from operating activities
Income before income taxes

971

1,230

Depreciation and amortization

1,207

1,326

195

143

-

130

(261)

38

(1,301)(1,798)Interest and dividends income

(286)

(284)

Interest expenses

282

293

Increase (decrease) in notes and accounts receivable- trade

12

(446)

Increase (decrease) in inventories

(315)

318

Increase (decrease) in notes and accounts payable- trade

(136)

75

Other

(540)

(1,014)Sub-total

(172)

20

87

87

Interest expenses paid

(229)

(244)

Income taxes paid

(875)

(1,699)(1,190)(1,836)

Purchase of property, plant and equipment(504)(1,285)

Loss on retirement of noncurrent assets
Loss on adjustment for changes of accounting standard for asset
retirement obligations
Increase (decrease) in provision for retirement benefits
Increase (decrease) in provision for bonuses

Interest and dividends income received

Net cash provided by (used in) operating activities
Cash flows from investing activities
Proceeds from sales of property, plant and equipment

165

22

Purchase of investment securities

(4)

(4)

Proceeds from sales of investment securities

21

2

(216)

-

-

(10)

Other

(17)

(771)

Net cash provided by (used in) investing activities(555)(2,046)

Net increase (decrease) in short-term loans payable

7,000

(500)

Repayment of long-term loans payable

(257)

(105)

(7,000)-

Repayments of finance lease obligations

(225)

(321)

Proceeds from issuance of common stock

-

3,839

Purchase of treasury stock

(1)

(1)

Proceeds from sales of treasury stock00

Cash dividends paid

(411)

(406)

Other

(47)

(64)

Net cash provided by (used in) financing activities

(942)

2,440

3

9

Net increase (decrease) in cash and cash equivalents(2,684)(1,433)

Cash and cash equivalents at beginning of year

11,74814,504

35

495

9,068

13,567Purchase of investments in subsidiaries resulting in change in scope of
consolidation
Purchase of stocks of subsidiaries and affiliates

Cash flows from financing activities

Redemption of bonds

Effect of exchange rate change on cash and cash equivalents

Increase (decrease) in cash and cash equivalents resulting from changeof scope of consolidation
Cash and cash equivalents at end of year8(4) Notes to assumption of going concern
Not applicable.

(5) Segment information[Segment information by business segment]
Three months ended June 30, 2009

(Unit: ¥ million)
Transport

Retail logistics andOthersTotal

processing

Elimination or

Consolidated

corporate

Operating revenues(1) Revenues from customers

30,653

17,7783,577

52,009-52,009(2) Inter-segment revenues or

714

1,111

2,347

4,174

(4,147)-

Total

31,36818,8905,925

56,183(4,147)52,009Operating income

780

458

118

1,357

13

1,370

transfers

Note:
1. Business segments above are based on the grouping used internally.
2. Each segment includes the following products:(1) Transport

Truck transport, special cargo transport, cargo transport using trucks, cargo transport using
railways, international and domestic marine cargo transport, harbor transport services,international cargo transport services, others.

(2) Retail logistics and processing

Warehouse operations, packaging, movement and other tasks for raw materials and finishedproducts at customers’ business sites, operation of distribution centers, others.

(3) Others

Sales of petroleum products, sales of information processing equipment, outsourced
information processing services, motor vehicle maintenance and repairs, others.

[Segment information by geographic area]
Three months ended June 30, 2009
Operating revenues from overseas operations are not shown since they account for less than 10% of consolidated operating revenues.
[Operating revenues from overseas]
Three months ended June 30, 2009
Operating revenues from overseas operations are not shown since they account for less than 10% of consolidated operating revenues

9[Segment information]
1.

The reported segments of the Company are subject to periodic review so as to ensure that separate financial information on its
constituent divisions is available and that the board of directors can decide on the deployment of operational assets and assessbusiness performance.
Senko is engaged chiefly in the distribution business which contains truck transport, railway forwarding, marine transport. And theCompany also offers the warehousing, in-factory works. Consequently, the Company forte lies in supplying integrated efficient
distribution services, from distribution consulting to system design and operations that closely match customer needs. The other hand,
the Company provides petroleum sales business, data processing equipment for sale, trading, data processing and vehicle repair
business.
Accordingly, the Company is composed of business segments based on business operations and business organizations and the threereported segments of “Distribution business”, “Commerce and Trading business”, and “Other business”.
“Distribution business” offers track transport, railway forwarding, marine transport, international transport, warehousing, in-factory works,
distribution center operations.
“Commerce and Trading business” offers sales of petroleum, merchandise sales and trading.
“Other business” composed of order-made data processing, vehicle repair business and insurance agency business.

2.

Difference between operating revenues and profit or loss amount for reported segments
Three months ended June 30, 2010

(Unit: ¥ million)
Reported segment
Distribution

Commerce and

Other

Total

businesstrading businessbusiness

Adjustments

Consolidated(Note) 1(Note) 2

Operating revenues
Sales to external customers

51,406

6,711

782

58,899-58,899Inter-segment sales and transfer

162

2,133

830

3,127

(3,127)-

Total

51,568

8,844

1,613

62,027(3,127)58,899

1,273

99

111

1,484

(4)

1,479

Operating income(Note)
1.

The amounts in "Adjustments" of ¥ (4) million include the eliminations of intersegment transactions of ¥ (3,127) million and theunallocated corporate expenses of¥ (3,122) million. Corporate expenses are chiefly SG&A expenses not belong to segments.

2.

The aggregated amounts of operating income are adjusted and equal to those in the consolidated statements of income.

(Additional information)
From the three-month period ended June 30, 2010, the Company and its consolidated subsidiaries have adopted ASBJ Statement No.
17, “Revised Accounting Standard for Disclosure about Segments of an Enterprise and Related Information” and ASBJ Guidance No. 20,“Guidance on the Accounting Standard for Disclosures about Segments of on Enterprise and Related Information” issued by ASBJ on
March 27, 2009 and March 21, 2008 respectively.

10(6) Material changes in shareholders’ equity
The Company made a public offering on June 22, 2010.
As a result, the amount of capital stock and capital surplus increased ¥ 1,919 million, respectively. At end of the first quarter, capital stockis ¥ 20,265 million, and capital surplus is ¥ 18,527 million.
(7) Other information(Subsequent event)
The Company issued new shares to Daiwa Securities Capital Markets Co., Ltd. by way of third party allotment on June 22, 2010 basedon a resolution at the board of directors’ meeting held on June 7, 2010.
Summary is as follows:a.

Type and number of shares:

Common stock: 2,000,000b.

Issue price:¥ 255.94 per sharec.

Total amount:¥ 511 milliond.

Allocation amount to capital stock:¥ 255 millione.

Assignment to:

Daiwa Securities Capital Markets Co., Ltd.

f.

Date of payment:

June 22, 2010g.

Purpose of use:

Purchase of land and construction costs for new facility inNorth-Kanto

11