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

SENKO Group Holdings Co., Ltd.

Summary of Financial Statements for the Fiscal Year Ended March 31, 2018
[Japan GAAP]

Name of Listed Company:
Code Number:
Representative:
Inquiries:

May 10, 2018
SENKO Group Holdings Co., Ltd.
Stock Listed on: The First Section of the Tokyo Stock Exchange
9069
URL http://www.senkogrouphd.co.jp/en/
Title: President
Name: Yasuhisa Fukuda
Title: Executive Officer, Public Relations and IR
Name: Noburoh Sasaki
Tel. (06) 6440-5155

Scheduled Date of Annual Meeting of Shareholders:
Scheduled Date of Issue of Financial Report:
Supplemental Information Materials:
Information Meeting for Financial Results:

June 27, 2018
June 27, 2018

Scheduled Date of Dividend Paid: June 28, 2018

Yes
Yes (for analysts)

1. Consolidated Operating Results for the Fiscal Year Ended March 31, 2018 (From April 1, 2017 to March 31, 2018)(1) Consolidated Operating Results
Operating revenue
Million yen
492,127455,435

Fiscal year ended March 31, 2018
Fiscal year ended March 31, 2017
(Note) Comprehensive income

%
8.1
4.9

Note: Amounts less than ¥1 million have been rounded down.
Profit attributable toOperating profit
Ordinary profit
owners of parent
Million yen%
Million yen%
Million yen%
17,0870.0
17,316
0.1
9,503
6.2
17,081(2.4)
17,301
0.7
8,950
4.8

Fiscal year ended March 31, 2018: ¥12,893 million (5.3%)
Profitper share

Diluted profit
per share

Yen
62.64
61.67

Fiscal year ended March 31, 2018
Fiscal year ended March 31, 2017

Fiscal year ended March 31, 2017: ¥12,249 million (42.0%)

Yen
58.08
58.74

Return on
shareholders’equity%8.9
9.5

Ratio of ordinary
profit to total
assets
%5.6
6.2

Ratio of operating
profit to operating
revenue%
3.5
3.8(Reference) Equity in earnings (losses) of affiliates:
Fiscal year ended March 31, 2018: ¥342 million

Fiscal year ended March 31, 2017: ¥272 million(2) Consolidated Financial Position
Total assets
Million yen
334,417285,958

As of March 31, 2018
As of March 31, 2017
(Reference) Shareholders’ equity:

Net assets
Million yen
118,056
114,090

Fiscal year ended March 31, 2018: ¥112,643 million

Equity ratio
%
33.7
35.1

Net assets per shareYen
741.44661.61

Fiscal year ended March 31, 2017: ¥100,287 million(3) Consolidated Cash Flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Million yen
24,567
20,848

Fiscal year ended March 31, 2018
Fiscal year ended March 31, 2017

Cash flows fromfinancing activities

Million yen(37,020)(3,678)Million yen
9,940(8,626)

Cash and cash
equivalents at end of
periodMillion yen
23,79526,197

2. Dividends
June
30
Yen
Fiscal year ended March 31, 2017
Fiscal year ended March 31, 2018
Fiscal year ending March 31, 2019
(Forecast)−−−

Annual dividend
September December
30
31
Yen
Yen
−
11.00
−
11.00
13.00

−

March
31
Yen
11.00
11.00

Yen
22.00
22.00

13.00

26.00

Total

Aggregate
Dividend on
Payout ratio
amountequity ratio(Consolidated)(Consolidated)(Annual)Million yen
%
%
3,265
35.7
3.3
3,354
35.1
3.1
34.3

3. Forecast of Consolidated Operating Results for the Fiscal Year Ending March 31, 2019 (From April 1, 2018 to March 31, 2019)

First half ending September 30, 2018
Fiscal year ending March 31, 2019

Operating revenue

Operating profit

Million yen
260,000
530,000

Million yen
9,000
19,300

%
7.3
7.7

%
12.6
12.9

(Percentage figures represent year-on-year changes)
Profit attributable toProfitOrdinary profit
owners of parent
per share
Million yen% Million yen
%
Yen
9,000
12.1
5,400
24.1
35.54
19,30011.5
11,500
21.0
75.70

Notes
(1) Changes in significant subsidiaries during the fiscal year (Changes in specified subsidiaries associated with change in scope of
consolidation): None
(2) Changes in accounting principles and estimates, and retrospective restatement(a) Changes due to revision of accounting standards: None(b) Changes other than in (a): None(c) Changes in accounting estimates: None(d) Retrospective restatement: None
(3) Shares outstanding (Common shares)(a) Shares outstanding (including treasury shares)
As of March 31, 2018:

152,861,921 shares

As of March 31, 2017:

152,861,921 shares

937,015 shares

As of March 31, 2017:

1,279,937 shares(b) Treasury shares
As of March 31, 2018:(c) Average number of sharesFiscal year ended March 31, 2018:

151,727,416 sharesFiscal year ended March 31, 2017:

145,138,720 shares(Note) Starting with the first quarter of the fiscal year ended March 31, 2015, the number of treasury shares at term-end includes Senko
shares owned by the trust account of employee stock ownership plan (as of March 31, 2018: – shares; as of March 31, 2017:873,200 shares), following revisions to accounting principles due to the amendment of accounting standards. Starting with the third
quarter of the fiscal year ending March 31, 2018, the number of treasury shares at term-end includes Senko shares owned by thetrust accounts of Performance-linked Stock Compensation Plan for Employees (as of March 31 2018: 349,900 shares) andPerformance-linked Stock Compensation Plan for Directors (as of March 31, 2018: 210,200 shares).
[Reference] Overview of Non-Consolidated Operating Results
Non-Consolidated Operating Results for the Fiscal Year Ended March 31, 2018 (From April 1, 2017 to March 31, 2018)(1) Non-Consolidated Operating Results

Fiscal year ended March 31, 2018
Fiscal year ended March 31, 2017

Operating revenue
Million yen
%
−
6,121
205,469
0.5

Operating profit
Million yen
%
−
1,169
5,437 (14.1)

Profitper share
Fiscal year ended March 31, 2018
Fiscal year ended March 31, 2017

(Percentage figures represent year-on-year changes)
Ordinary profit
ProfitMillion yen%
Million yen
%
−
−
1,107
1,024
6,077
(11.8)
3,678(2.5)

Diluted profit
per share
Yen
7.30
25.35

Yen
6.73
24.13

(2) Non-Consolidated Financial Position

As of March 31, 2018
As of March 31, 2017
(Reference) Shareholders’ equity:

Total assets
Million yen
207,909210,504

Fiscal year ended March 31, 2018: ¥76,878 million

Net assets
Million yen
77,251
79,169Equity ratio
%
37.0
37.4

Net assets per share
Yen
506.03519.67

Fiscal year ended March 31, 2017: ¥78,772 million

The Company’s transition to a holding company structure on April 1, 2017 has given rise to some disparities between actual results presented
for the fiscal year ended March 31, 2018, and those presented for the fiscal year ended March 31, 2017. Accordingly, the percentage
year-on-year changes have been omitted because it is not possible to make adequate year-on-year comparisons.
This financial report is exempt from audit conducted by certified public accountants or an audit corporation.
Cautionary statement regarding forecasts of operating results and special notes
Forward-looking statements in these materials are based on information available to management at the time this report was prepared
and assumptions that management believes are reasonable. Actual results may differ significantly from these statements for a number ofreasons. For information about the assumptions used for forecasts and precautions concerning the use of forecasts, please see“Forecasts” on page 3.

Index to accompanying materials

1. Overview of operating results and others .................................................................................................................................................... 2(1) Overview of operating results and others ........................................................................................................................................... 2(2) Financial condition ............................................................................................................................................................................. 5(3) Fundamental policy for distribution of earnings and dividend for the current and the next fiscal years ......................................... 6(4) Business risk ....................................................................................................................................................................................... 6
2. Corporate Group ........................................................................................................................................................................................ 7
3. Basic Concept Regarding the Selection of Accounting Standards ............................................................................................................. 8
4. Consolidated Financial Statements and Significant Notes Thereto ........................................................................................................... 9(1) Consolidated balance sheets .............................................................................................................................................................. 9(2) Consolidated statements of (comprehensive) income ..................................................................................................................... 11
Consolidated statements of income................................................................................................................................................. 11
Consolidated statements of comprehensive income....................................................................................................................... 12(3) Consolidated statements of changes in equity ................................................................................................................................. 13(4) Consolidated statements of cash flows ............................................................................................................................................ 15

1

1.

Overview of operating results and others(1) Overview of operating results and others(a) Overview of results of operations in the fiscal year ended March 31, 2018
In the fiscal year ended March 31, 2018 (April 1, 2017 to March 31, 2018), the Japanese economy has been recovering at a moderatepace amid firm consumer spending and capital expenditure against backdrop of factors that include more upbeat corporate earnings anda better employment environment. Meanwhile the outlook for the overseas economy has remained clouded by uncertainties ahead, suchas the potential impact of geopolitical risks, despite solid trends of recovery continuing particularly in the United States and emerging
countries in Asia.
In the logistics industry where our core business lies, freight volume has been strong mainly for consumer-related and production-related
cargo but the business environment overall has remained challenging due to shortages of drivers and workers combined with increasing
costs particularly with respect to expenses for hiring vehicles and other outsourcing costs, as well as fuel costs.
In this environment, the Senko Group transitioned to a holding company structure in April, 2017, and embarked on the “Senko Innovation
Plan 2021 (SIP21)” five-year medium-term business plan with fiscal 2017 set as its initial fiscal year.
The following provides an outline of our main activities in the fiscal year ended March 31, 2018.
In the Logistics, in order to forge ahead with efforts to further expand the marine shipping business, we added NIPPON MARINE CO.,LTD. which engages in marine transport for the JX Nippon Mining & Metals Group, as well as EIKICHI KAIUN CO., LTD. to the Senko
Group in April. We also added Kanto region cargo truck carrier ANZEN YUSO CO., LTD. in October in order to boost the use of the Senko
Group’s own trucks and expand its operations.
Regarding distribution centers, in April we commenced operations of the Yokkaichi No. 2 PD Center (Yokkaichi City, Mie Prefecture), in
July the New Komaki PD Center (Oguchi Town, Aichi Prefecture), and in December the Hiroshima PD Center (Hiroshima City, Hiroshima
Prefecture).
Also, in order to expand business of major drug store logistics, in June we commenced operations of Ranzan Logistics Center (Ranzan
Town, Saitama Prefecture), in September Aomori Logistics Center (Goshogawara City, Aomori Prefecture), our first logistics facility
located in Aomori Prefecture, and Shin Fuji PD Center (Fuji City, Shizuoka Prefecture) in October.
In addition, in order to expand business of fashion logistics, in January we commenced operations of Fujiidera Center (Fujiidera City,
Osaka Prefecture), in March Narashino Center (Narashino City, Chiba Prefecture). We also commenced operations of Hiroshima Branch
No. 2 Center (Higashihiroshima City, Hiroshima Prefecture) in February in order to expand operations involving frozen and refrigerated
logistics.
Outside Japan, Singapore-based Skylift Consolidator (Pte) Ltd., which engages in the business of international air and marine transportand other such operations, became a Group company in April and we have been working to upgrade the logistics network and strengthen
the business infrastructure.
In Vietnam, our overseas subsidiary launched full-scale forwarding business operations in May serving Japanese companies situated in
the suburbs of Ho Chi Minh City, and in January the construction of the Pho Noi Logistics Center, which is our first logistics center in
Vietnam, was completed.
In South Korea, we commenced operations in October of the NH-SENKO Logistics Center, which is our second such facility in South
Korea’s Busan New Port.
In March, we established M-Senko Logistics Co., Ltd. as a joint venture with MK Restaurant Group Public Company Limited, a major
restaurant chain conglomerate in Thailand. Going forward, we will expand the frozen and refrigerated logistics business in Thailand,
leveraging the technology and expertise of the Senko Group.
In the Trading & commerce, SMILE CORP. established an overseas subsidiary in Vietnam in April, and OKUMURA CO., LTD., acompany that manufactures and sells slippers, was brought into the Group in September. We have made the manufacturing enterprisepart of Group with the aims of improving product development strengths and bolstering price competitiveness.
Moreover, we added companies to the Group with the aim of expanding our areas of business. This has included Aya Construction Co.,
Ltd., a company located in Miyazaki Prefecture which operates in the construction business and other businesses in July, fitness club
operator BLUE EARTH Co., Ltd. in September (currently, BLUE EARTH JAPAN Co., Ltd.), and VENUS CO., LTD., a company which
operates services for seniors to prevent the need for long-term care in October.
To upgrade our operating system, we have bolstered the fleet of vehicles directly operated by the Senko Group, and have been actively
promoting a modal shift to reduce the environmental impact and resolve the shortage of drivers.
Recognized for such initiatives as switching from the previous use of trucks to the use of railroads and marine vessels for long-distancetransport of apparel, housing, food and other items, the Japan Association for Logistics and Transport awarded us the Logistics
Environment Special Award at the18th Logistics Environment Awards Ceremony in June and the Award for Excellent Business Entities
Working on Modal Shift of the Fiscal 2017 in November. In September, Japan’s Ministry of Land, Infrastructure and Transport (MLIT)
recognized two of our new initiatives geared to achieving shifts to new modes of transport by certifying them as comprehensive and2efficient logistics plans based on the Act of Logistics Integration and Efficiency.
Our efforts to develop pleasant workplace environments encompass the aim of ensuring that every employee leads a vigorous and happylife over the long haul, where they remain healthy and are able to work energetically. To such ends, in September we established the
Senko Group Holdings Health Management Declaration, and in February we were certified an Outstanding Health and Productivity
Management Organization for 2018 in the White 500 large enterprise category, promoted by Japan’s Ministry of Economy, Trade andIndustry (METI) in cooperation with Nippon Kenko Kaigi.
We increased our ownership ratio in Runtec Corporation, which had been a consolidated subsidiary, thereby making it a wholly-owned
subsidiary as of April 20, 2018, with our ownership of 98.7% as of March 31, 2018.
The full-year performance was as follows.
(Unit: Millions of yen)

Operating revenue
Operating profit
Ordinary profit
Profit attributable to owners ofparentFY ended
March 31, 2017
455,435

FY ended
March 31, 2018492,127

17,081
17,301
8,950

Change%36,692

8.1

17,087
17,316

5
15

0.0
0.1

9,503

552

6.2

Consolidated operating revenue of the Senko Group increased 8.1% year on year to ¥492,127 million. This result mainly reflected theaggressive expansion of sales and the contribution of NIPPON MARINE CO., LTD., ANZEN YUSO CO., LTD. and another entity, whichwere made consolidated subsidiaries of the Company.
On the profit front, consolidated operating profit increased only by ¥5 million over the previous fiscal year to ¥17,087 million. Whereas
profits were buoyed by sales expansion and moves to make NIPPON MARINE CO., LTD., ANZEN YUSO CO., LTD. and another entity
consolidated subsidiaries, the Company was faced with a decline in freight volumes from existing customers, rises in expenses for hiring
vehicles and other outsourcing costs, increases in fuel prices, and higher costs due to actuarial differences in accounting for retirement
benefit obligations. Also, consolidated ordinary profit increased to ¥17,316 million, up 0.1% year on year, and profit attributable to ownersof parent increased to ¥9,503 million, up 6.2% year on year.
The business segment performance was as follows.
Logistics
Operating revenue grew 9.4% year on year to ¥347,752 million in this segment. This was mainly attributable to higher revenues
generated through the consolidation of NIPPON MARINE CO., LTD., ANZEN YUSO CO., LTD. and another entity, increased operations
due to the opening of large facilities in the previous fiscal year and expanded sales in relation to retailers and mass merchandisers, suchas major drug stores.
Trading & commerce
Operating revenue grew 4.9% year on year to ¥139,317 million in this segment. This was mainly attributable to higher revenues due toincreasing fuel sales prices along with expansion of sales to new customers and the consolidation of OKUMURA CO., LTD.
OthersOperating revenue rose 10.4% year on year to ¥5,058 million in this segment. This was mainly attributable to the growth of sales in thecall center business.
(b) Forecasts
The Japanese economy is likely to gain support from ongoing increases in capital expenditure and consumer spending, against a
backdrop of expanding corporate earnings and a more upbeat employment situation.
In the logistics industry on the other hand, we are likely to face an increasingly challenging business environment amid developments that
include rising costs against a backdrop of labor shortages, intensifying competition and other such factors.
In this environment, the Senko Group will seek to expand its business areas, upgrade its operating system and strengthen its earnings
capacity, throughout the second year of its five-year medium-term business plan.
With respect to expanding our areas of business, we will further extend the logistics center business both in Japan and overseas with afocus on the field of retail product logistics, particularly in distribution involving three temperature zones.
With respect to upgrading the operating system, we will further promote efforts to bolster the fleet of vehicles directly operated by the3Senko Group, while taking steps to improve the labor environment and enhancing our capability to secure and train human resources.
With respect to strengthening earnings capacity, we will move forward in overhauling the terms of business and revising the freightcharges with the aim of addressing cost increases, particularly fuel costs as well as expenses for hiring vehicles and other outsourcing
costs.
The Group’s consolidated forecasts for the next fiscal year are for operating revenue of ¥530.0 billion, operating profit of ¥19.3 billion,
ordinary profit of ¥19.3 billion, and profit attributable to owners of parent of ¥11.5 billion.

4(2) Financial condition
1) Assets, liabilities and net assets
Total assets
Total assets as of March 31, 2018 were ¥334,417 million, ¥48,459 million higher than at the end of the previous fiscal year.
Current assets amounted to ¥117,127 million, up ¥8,428 million from the end of the previous fiscal year. This mainly reflected increases of¥8,551 million in notes and operating accounts receivable, despite a decrease of ¥2,167 million in cash and deposits.
Non-current assets totaled ¥217,232 million, up ¥40,056 million from the end of the previous fiscal year. This was mainly due to increasesof ¥29,957 million in property, plant and equipment, ¥1,043 million in intangible assets and ¥9,056 million in investments and other assets
due to effects of M&As and new capital expenditure, despite a decreasing factor as a result of transfers of three distribution centers to theprivate REIT.
Liabilities
Liabilities as of March 31, 2018 increased ¥44,492 million from the end of the previous fiscal year to ¥216,360 million.
Current liabilities totaled ¥106,049 million, up ¥12,134 million from the end of the previous fiscal year. This was mainly due to increases ofnotes and operating accounts payable−trade of ¥3,687 million, electronically recorded obligations−operating of ¥416 million, short-termloans payable of ¥3,719 million and income taxes payable of ¥592 million.
Non-current liabilities totaled ¥110,311 million, up ¥32,357 million from the end of the previous fiscal year. This was mainly due toincreases of bonds payable of ¥10,168 million, long-term loans payable of ¥20,748 million and lease obligations of ¥976 million.
Net assets
Net assets as of March 31, 2018 rose ¥3,966 million from the end of the previous fiscal year to ¥118,056 million. This was mainly due tofactors such as increases of ¥4,319 million in capital surplus, ¥6,314 million in retained earnings and ¥1,250 million in remeasurements ofdefined benefit plans, and despite a decrease of ¥8,366 million in non-controlling interests largely as a result of having acquired an
additional stake in our consolidated subsidiary Runtec Corporation. The equity ratio decreased by 1.4 percentage points to 33.7% fromthe end of the previous fiscal year.
2) Cash flows
Cash and cash equivalents at end of period decreased by ¥2,401 million year on year to ¥23,795 million.
Net cash provided by operating activities amounted to ¥24,567 million. This was mainly due to profit before income taxes of ¥16,936
million, depreciation of ¥12,439 million, an increase in cash due to an increase in notes and accounts payable-trade of ¥2,259 million andproceeds from subsidy income of ¥1,891 million, and despite a ¥3,862 million decrease in cash from an increase in notes and accounts
receivable-trade and income taxes paid of ¥5,262 million.
Net cash used in investing activities totaled ¥37,020 million. This was mainly due to the purchase of property, plant and equipment of¥37,041 million, purchase of shares of subsidiaries resulting in change in scope of consolidation of ¥2,140 million and purchase of sharesof subsidiaries and associates of ¥5,131 million, despite proceeds from the sales of property, plant and equipment of ¥11,121 million.
Net cash provided by financing activities totaled ¥9,940 million. This was mainly due to a repayment of long-term loans payable of¥17,792
million, repayments of finance lease obligations of ¥3,854, payments from changes in ownership interests in subsidiaries that do not resultin change in scope of consolidation of ¥6,883 million and cash dividends paid of ¥3,470 million, despite net increase in short-term loans
payable of ¥9,777 million, proceeds from long-term loans payable of ¥22,105 million and proceeds from issuance of bonds of ¥10,000
million.

5

3) Performance indicators associated with cash flows
Fiscal years ended March 31

2014

2015

2016

2017

2018

Equity ratio (%)

27.8

28.4

32.6

35.1

33.7

Market capitalization equity ratio (%)

23.6

38.1

36.4

38.0

37.6

Interest-bearing debt to cash flow ratio

9.2

5.7

5.7

4.1

4.9

Interest coverage ratio

8.6

15.5

14.7

21.9

25.4

Notes:
Equity ratio: Shareholders’ equity / Total assets
Market capitalization equity ratio: Market capitalization / Total assets
Interest-bearing debt to cash flow ratio: Interest-bearing debt / Operating cash flows
Interest coverage ratio: Operating cash flows / Interest expenses• All figures are based on the consolidated financial statements.
• Market capitalization is calculated by multiplying the fiscal year-end stock price and the number of shares issued at the end of the
fiscal year (after deducting treasury shares).
• Operating cash flows are the figure shown in the consolidated statement of cash flows. Interest-bearing debt is the sum of all
liabilities on the consolidated balance sheet on which interest is paid. Interest expenses are the figure shown in the consolidated
statement of cash flows.
(3) Fundamental policy for distribution of earnings and dividend for the current and the next fiscal years
While securing internal reserves necessary for future business development and management structure reinforcement, the basic policy of theCompany is to return profits to shareholders by implementing stable dividends and dividends that are linked to business results with the aim ofenhancing the return to its shareholders.
In accordance with this policy, the year-end dividend for the fiscal year ended March 31, 2018 is set at ¥11.00 per share as previously
forecasted. Combined with the already declared interim dividend of ¥11.00, the total annual dividend is expected to be ¥22.00.
For the next fiscal year’s dividend, we expect an annual dividend of ¥26.00 per share (interim dividend of ¥13.00, year-end dividend of¥13.00), based on business results forecasts.
(4) Business risk
No discussion of business and other risks is presented here because there have been no significant changes involving these risks since themost recent Securities Report (dated June 28, 2017), which includes a section about business and other risks.

6

2.

Corporate GroupThe Senko Group includes the Company, 123 subsidiaries and ten affiliated companies. To meet the increasingly diverse and exacting
needs of customers, Group companies conduct a full line of logistics operations extending from the development of strategic logistics
systems to the operation of these systems. There are three business segments: Logistics, which includes cargo transport by truck,
cargo transport by rail, warehouse operations, the operation of distribution centers, and other activities; Trading & commerce, which
includes sales of petroleum products, trading sales and international trade; and Others, which includes outsourced data processing
services, motor vehicle maintenance, insurance agency services and other activities. A diagram of these business operations ispresented below.

Customers
SENKO Group Holdings Co., Ltd.
Logistics

Subsidiaries〇 SENKO Co., Ltd.
〇 Logi Solution Co., Ltd.
〇 Senko Living Plaza Co., Ltd.
〇 Senko A Line Amano Co., Ltd.
〇 Tokyo Nohin Daiko Co., Ltd.
〇 ACROSS TRANSPORT CO., LTD.
〇 Senko Line Split Preparation Co., Ltd.
〇 NIPPON MARINE CO., LTD.
EIKO SHIPPING CO., LTD.
〇 Hokkaido Senko Co., Ltd.
〇 Tohoku Senko Transport Co., Ltd.
〇 Kanto Senko Transport Co., Ltd.
〇 Kan-etsu Senko Logistics Co., Ltd.
〇 Saitama Senko logiservice Co., Ltd.
〇 Saitama Minami Senko Logi Co., Ltd.

Trading & commerce

Subsidiaries〇 SENKO Co., Ltd.
〇 SENKO SHOJI CO., LTD.
〇 AST CORPORATION〇 SMILE CORP.
〇 Marufuji Co., Ltd.
〇 Fuji Label Co., Ltd.
〇 Takano Machinery Works Co., Ltd.
〇 OKUMURA CO., LTD.
〇 Obata Co., Ltd.
〇 Shanghai Smile Corp.
〇 SHANGHAI SMILE PRINTING CORP.
〇 HONG KONG SMILE CORP LIMITEDJapan Select LLP〇 SMILECORP VIETNAM CO., LTD.
〇 KOREA SMILE CORP.

Subsidiaries〇 Logi Solution Co., Ltd.
〇 SENKO INFORMATION SYSTEM Co., Ltd.
〇 Saitama Senko logiservice Co., Ltd.
〇 Chiba Senko Transport Co., Ltd.
〇 Fuji Senko Transport Co., Ltd.
〇 Shiga Senko Transport Co., Ltd.
〇 Minami Osaka Senko Transport Co., Ltd.
〇 Miyazaki Senko Transport Co., Ltd.
Aya Construction Co., Ltd.
〇 Senko Insurance Services Co., Ltd.
〇 Senko Foods Co., Ltd.
Crefeel Koto Co., Ltd.
〇 S-TAFF Co., Ltd.
〇 Senko Business Support Co., Ltd.
Logi Factoring Co., Ltd.

Subsidiaries〇 Kyushu Senko Logistics Co., Ltd.
〇 Minami Kyushu Senko Co., Ltd.
〇 Miyazaki Senko Transport Co., Ltd.
〇 Miyazaki Senko Apollo Co., Ltd.
〇 Senko Plantec Co., Ltd.
〇 SK Kaihatsu Ippan Shadan Hojin〇 SK Senboku Yugen Kaisha
Senko Medical Logistics Co., Ltd.
〇 Delivery Ace Co., Ltd.
Prettyporters Co., Ltd.
〇 Sankyo Butsuryu Niyaku Co., Ltd.
〇 Sankyo Logistics Co., Ltd.
Senko (U.S.A.) Inc.
SENKO LOGISTICS MEXICO S.A. DE C.V.
SK MARINE S.A.

SENKO AGRI Co.,Ltd.
〇 Senko Asset Management Co., Ltd.
〇 KOUKI Co., Ltd.
Runtec Service Corporation
Senko Facilities Co., Ltd.
Senko Real Estate Co., Ltd.
KEIHANNA helper station Co., Ltd.
VENUS CO., LTD.
Aphrodite CO., LTD.
Senko Creative Management Co., Ltd.
Ienonaka Company, Ltd.
BLUE EARTH JAPAN Co., Ltd.
Senko Logistics (U.S.A.) Inc.
Affiliated Companies△ Senko Private REIT investment Company
Samurai Farm Saito Co., Ltd.

〇 Senko Housing Logistics Co., Ltd.
〇
〇
〇
〇
〇
〇
〇
〇
〇
〇
〇
〇
〇
〇

Chiba Senko Transport Co., Ltd.
Senko Fashion Logistics Co., Ltd.
Kashiwa Senko Transport Co., Ltd.
Noda Senko Logi Service Co., Ltd.
Kanagawa Senko Transport Co., Ltd.
ANZEN YUSO CO., LTD.
JCN KANTO Co., LTD.
Atsugi Senko Transport Co., Ltd.
NISHIKANTO SENKO LOGI CO., LTD.
Hokuriku Senko Transport Co., Ltd.
Fuji Senko Transport Co., Ltd.
Daito Senko Apollo Co., Ltd.
Tokai Senko Transport Co., Ltd.
Toyohashi Senko Transport Co., Ltd.
Mie Senko Logistics Co., Ltd.
Shiga Senko Transport Co., Ltd.

Senko School Farm Tottori Co., Ltd.

〇 Kyoto Senko Transport Co., Ltd.

〇 Osorno Shipholding S.A.

〇 Osaka Senko Transport Co., Ltd.
〇 Tokyo Nohin Daiko West Japan Co., Ltd.
〇 Minami Osaka Senko Transport Co., Ltd.
NICHIEI KOUN CO., LTD.

〇 Rupanco Inc.
SHENYANG SENKO LOGISTICS CO., LTD.
〇 DALIAN TRI-ENTERPRISE LOGISTICS CO., LTD.
QINGDAO SENKO LOGISTICS CO., LTD.

〇 Hanshin Senko Transport Co., Ltd.
〇 Esaka Logistics Service Co., Ltd.
〇 Hanshin Transport Co., Ltd.
〇 Nara Senko Logistics Co., Ltd.
〇 Okayama Senko Transport Co., Ltd.
〇 EIKICHI KAIUN CO., LTD.
MIFUNE CO., LTD.
TOEI KISEN CO., LTD.
EIKICHI EISEN CO., LTD.
〇 Harcob Co., Ltd.
〇 Sankyo Freight Co., Ltd.
〇 Sanyo Senko Transport Co., Ltd.
〇 Chushikoku Logistics Co., Ltd.
〇 Fukuoka Senko Transport Co., Ltd.
〇 Runtec Corporation

OthersSENKO LOGISTICS (SHANGHAI) CO., LTD.
SHANGHAI SENKO INTERNATIONAL FREIGHTFORWARDING INC.
〇 GUANGZHOU SENKO LOGISTICS CO., LTD.
Senko International Logistics (Hong Kong) Ltd.
Senko (Thailand) Co., Ltd.
SENKO GLOBAL LOGISTICS (THAILAND) CO.,LTD.
SENKO LOGISTICS DISTRIBUTION (THAILAND)
Co., Ltd.
〇 Senko International Logistics Pte. Ltd.
Skylift Consolidator (Pte) Ltd.
Skylift Districentre (Pte) Ltd.
SENKOLOGISTICS
VIETNAMCOMPANY
LIMITEDSENKO DISTRIBUTION SERVICE (VIETNAM) CO.,LTD.
Senko Logistics Australia Pty Ltd.
Senko-Lancaster Silk Road Logistics LLP.
NH-SENKO Logistics Co., Ltd.
〇

Affiliated Companies
Moriyama Hoso Co., Ltd.
Hososhimako Niyaku Shinko Co., Ltd.
Mexicana de Paquetería Urgente, S.A. de C.V.
SINOTRANS SENKO INTERNATIONAL COLDLOGISTICS CO., LTD
SMI-SENKO LOGISTICS PTE. LTD.
SENKOSMI Myanmar Co., Ltd.
KO-SENKO Logistics Co., Ltd.
Senko Logistics (Thailand) Co., Ltd.

(Note)〇: Consolidated subsidiaries△: Equity-method affiliate

73.

Basic Concept Regarding the Selection of Accounting Standards
To facilitate comparisons of its consolidated financial statements across time periods and with other companies, the Senko Groupintends to prepare its consolidated financial statements based on Japanese generally accepted accounting principles (JGAAP) for thetime being.
With regard to the adoption of international financial reporting standards (IFRS), the Company intends to monitor developments inJapan and overseas, and to respond appropriately to these developments.

84. Consolidated Financial Statements and Significant Notes Thereto(1) Consolidated balance sheets(Unit: Millions of Yen)
As of March 31, 2017

As of March 31, 2018

AssetsCurrent assets
Cash and deposits

27,162

24,995

Notes and operating accounts receivable

61,97570,526Merchandise and finished goods

7,006

7,293

Work in process

305

351

Raw materials and supplies

292

536

Deferred tax assets

2,826

2,979

Other

9,151

10,460(21)(16)

108,699

117,127

Buildings and structures

124,739

146,448

Accumulated depreciation(71,319)(91,402)

Buildings and structures, net

53,42055,045

Machinery, equipment and vehicles

37,66959,003

Accumulated depreciation(28,650)(38,496)

Machinery, equipment and vehicles, net

9,018

20,506

Tools, furniture and fixtures

6,954

7,270

Accumulated depreciation(5,517)(5,731)Tools, furniture and fixtures, net

1,436

1,539

Land

56,70059,613

Leased Assets

11,53413,002

Accumulated depreciation(5,634)(6,085)

Leased Assets, net

5,900

6,916

Construction in progress

3,637

16,449130,114160,071

Goodwill

5,617

6,522

Other

4,086

4,225

Total intangible assets

9,704

10,747

Investment securities

16,452

22,642Long-term loans receivable

3,131

3,709

Net defined benefit asset

2,359

3,658

Guarantee deposits

11,197

12,118Deferred tax assets

2,050

1,783

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment

Total property, plant and equipment
Intangible assets

Investments and other assets

Other

3,191

3,718

Allowance for doubtful accounts(1,025)(1,216)

Total investments and other assets

37,357

46,413

Total non-current assets

177,175

217,232

Business commencement expenses

83

57

Total deferred assets

8357

285,958

334,417

Deferred assets

Total assets

9

(Unit: Millions of Yen)
As of March 31, 2017

As of March 31, 2018

Liabilities
Current liabilities
Notes and operating accounts payable−trade33,731

37,418

Electronically recorded obligations−operating

6,773

7,189

Current portion of bonds－

48

Short-term loans payable

25,631

29,351

Lease obligations

2,793

3,073

Income taxes payable

3,916

4,509

Provision for bonuses

4,228

4,625

Provision for directors’ bonuses

210

197

Provision for loss on disaster

96

－

Other

16,534

19,635

Total current liabilities

93,914106,049

Bonds payable

7,000

17,168

Convertible bond-type bonds with share acquisitionrights

10,04910,039Long-term loans payable

42,483

63,232

Lease obligations

6,365

7,342

Provision for directors’ retirement benefits

276

159

Provision for special repairs

3782

Net defined benefit liability

7,087

6,901

Asset retirement obligations

817

819

Other

3,834

4,564

Total non-current liabilities

77,953110,311

171,868

216,360

Capital stock

26,52826,528

Capital surplus

25,41129,730Retained earnings

48,65454,968Treasury shares

(657)

(590)

99,937

110,637

1,391

1,775

Non-current liabilities

Total liabilities
Net assets
Shareholders’ equity

Total shareholders’ equity
Accumulated other comprehensive income
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 comprehensive income

1

(61)

250

334

(1,293)

(42)

350

2,005

Shares acquisition rights

396

373

Non-controlling interests

13,406

5,040

Total net assets

114,090

118,056

285,958

334,417

Total liabilities and net assets

10(2) Consolidated statements of (comprehensive) income(Consolidated statements of income)(Unit: Millions of Yen)
Fiscal year ended
March 31, 2017

Fiscal year ended
March 31, 2018

(April 1, 2016–March 31, 2017)(April 1, 2017–March 31, 2018)

Operating revenue

455,435

492,127

Operating cost

405,757

440,671

Operating gross profit

49,67751,456

Selling, general and administrative expenses

32,59534,369Operating profit

17,081

17,087

Interest income

101

101

Dividend income

130

136

Share of profit of entities accounted for using
equity method

272

342

Other

1,237

1,350

Total non-operating income

1,742

1,931

Interest expenses

927

976

Other

595

725

1,522

1,701

17,301

17,316

Subsidy income－

638

Gain on sales of non-current assets

283

444

Delinquency charges－

157

Gain on sales of investment securities

536

66

State subsidy

1,252

－

Total extraordinary income

2,072

1,307

1,225

651

Loss on office withdrawal－

310

Loss on liquidation of subsidiaries－

204

Loss on business withdrawal－

169

Loss on retirement of non-current assets

130

126

Loss on valuation of investments in capital ofsubsidiaries and associates－

56

Expenses related to closing of stores－

53

Provision of allowance for doubtful accounts for
subsidiaries and associates

62

43

Expenses related to commemorative works forcentennial anniversary

448

39

Loss on sales of non-current assets

31

30

Loss on valuation of shares of subsidiaries andassociates

574－

Loss on disaster

252－

Litigation expenses

76

－

2,801

1,688

Profit before income taxes

16,572

16,936

Income taxes−current

5,930

5,778

Income taxes−deferred

(148)

(8)

Total income taxes

5,781

5,769

Profit10,79011,167

Profit attributable to non-controlling interests

1,839

1,663

Profit attributable to owners of parent

8,950

9,503

Non-operating income

Non-operating expenses

Total non-operating expenses
Ordinary profit
Extraordinary income

Extraordinary losses
Loss on reduction of non-current assets

Total extraordinary losses

11

(Consolidated statements of comprehensive income)(Unit: Millions of Yen)
Fiscal year ended
March 31, 2017

Fiscal year ended
March 31, 2018

(April 1, 2016–March 31, 2017)(April 1, 2017–March 31, 2018)

Profit10,79011,167

Valuation difference on available-for-sale securities

52

430

Deferred gains or losses on hedges

97

(65)

Other comprehensive income

Foreign currency translation adjustment

(235)

104

Remeasurements of defined benefit plans, net of tax

1,544

1,256

Total other comprehensive income

1,458

1,725

12,24912,893Comprehensive income attributable to owners ofparent10,337

11,158Comprehensive income attributable tonon-controlling interests

1,912

1,734

Comprehensive income
Comprehensive income attributable to12(3) Consolidated statements of changes in equity
Fiscal year ended March 31, 2017 (April 1, 2016 – March 31, 2017)(Unit: Millions of Yen)
Shareholders’ equity
Capital stock

Capital surplus

24,011

22,838

Balance at the beginning of current
periodCumulative effects of changes inaccounting policies

Retainedearnings

Treasury shares

Total
shareholders’equity(942)

88,752

42,845
18

Restated balance

24,011

22,838

2,516

2,516

18
(942)

42,86388,770Changes of items during period
Issuance of new shares

5,033

Dividends of surplus(3,176)(3,176)

Profit attributable to owners ofparent

8,950

8,950

Purchases of treasury shares

(0)

(0)

Disposal of treasury shares

285

285

Change of scope of consolidation

16

Change in ownership interest ofparent due to transactions with
non-controlling interests
Net changes of items other thanshareholders’ equity

16

56

56
－

Total changes of items during period

2,516

2,573

5,790

285

11,166

Balance at end of current period

26,52825,411

48,654(657)

99,937

Accumulated other comprehensive income

Balance at the beginning of current
periodCumulative effects of changes inaccounting policies
Restated balance

Valuationdifferencesonavailable-forsecurities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

Total
accumulated
othercomprehensive
incomeShare
Acquisitionrights

Noncontrollinginterests

Total net
assets

1,448

(91)

427

(2,820)(1,036)359

11,933100,00920

39

11,953100,048

－
1,448

(91)

427

(2,820)(1,036)359

Changes of items during period
Issuance of new shares

－

5,033

Dividends of surplus－(3,176)

Profit attributable to owners ofparent－8,950

Purchases of treasury shares－(0)

Disposal of treasury shares－

285

Change of scope of consolidation

－

16

－

56

Change in ownership interest ofparent due to transactions with
non-controlling interests
Net changes of items other thanshareholders’ equity
Total changes of items during period
Balance at end of current period

(57)

93

(176)

1,527

1,386

36

1,452

2,875

(57)

93

(176)

1,527

1,386

36

1,452

14,041

1,391

1

250

(1,293)350

396

13,406

114,09013

Fiscal year ended March 31, 2018 (April 1, 2017 – March 31, 2018)(Unit: Millions of Yen)
Shareholders’ equity

Balance at the beginning of current
periodCumulative effects of changes inaccounting policies
Restated balance

Capital stock

Capital surplus

26,52825,411Retainedearnings

Treasury shares

Total
shareholders’equity(657)

99,93748,654－
26,52825,411(657)

48,654

99,937

Changes of items during period
Issuance of new shares－

Dividends of surplus(3,354)(3,354)

Profit attributable to owners ofparent

9,503

9,503

Purchases of treasury shares

(455)

522

509

(13)

Disposal of treasury shares
Change of scope of consolidation

165

Change in ownership interest ofparent due to transactions with
non-controlling interests
Net changes of items other thanshareholders’ equity

165

4,332

4,332
－

Total changes of items during period
Balance at end of current period

(455)

－

4,319

6,314

67

10,70026,52829,73054,968(590)

110,637

Accumulated other comprehensive income

Balance at the beginning of current
periodCumulative effects of changes inaccounting policies
Restated balance

Valuationdifferencesonavailable-forsecurities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

1,391

1

250

(1,293)

Total
accumulated
othercomprehensive
income350

Share
Acquisitionrights

Noncontrollinginterests

Total net
assets396

13,406

114,090

－
1,391

1

250

(1,293)

350

－
396

13,406

114,090

Changes of items during period
Issuance of new shares－－

Dividends of surplus－(3,354)

Profit attributable to owners ofparent

－9,503

Purchases of treasury shares

－

(455)

Disposal of treasury shares－

509

Change of scope of consolidation

－

165

－

4,332

Change in ownership interest ofparent due to transactions with
non-controlling interests
Net changes of items other thanshareholders’ equity
Total changes of items during period
Balance at end of current period

383

(63)

83

1,250

1,654

(22)

(8,366)(6,734)

383

(63)

83

1,250

1,654

(22)

(8,366)

3,966

1,775

(61)

334

(42)

2,005

373

5,040

118,05614

(4) Consolidated statements of cash flows(Unit: Millions of Yen)
Fiscal year ended
March 31, 2017

Fiscal year ended
March 31, 2018

(April 1, 2016 – March 31, 2017)(April 1, 2017 – March 31, 2018)

Profit before income taxes

16,572

16,936

Depreciation

10,216

12,439Loss (gain) on sales of investment securities

(536)

(66)

Loss on valuation of shares of subsidiaries and associates

574－

Loss on valuation of investments in capital of subsidiaries andaffiliates－

56

Loss (gain) on sales of non-current assets

(251)

(413)

Loss on retirement of non-current assets

130

126

Loss on reduction of non-current assets

1,225

651

－

(638)

(1,252)－

Decrease (increase) in net defined benefit asset

(419)

470

Increase (decrease) in net defined benefit liability

(243)

(256)

Increase (decrease) in provision for bonuses

143

189

Interest and dividend income

(232)

(237)

Interest expenses

927

976

(1,695)(3,862)

(66)

62

1,071

2,259

Cash flows from operating activities

Subsidy income
State subsidy

Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Increase (decrease) in accrued consumption taxes

366

2,119

Other

242

(2,428)Subtotal

26,772

28,386

Proceeds from subsidy income

－

1,891

Interest and dividend income received

389

519

Interest expenses paid

(953)

(967)

Income taxes paid

(5,360)(5,262)

Net cash provided by (used in) operating activities

20,84824,567Purchase of property, plant and equipment(16,253)(37,041)

Proceeds from sales of property, plant and equipment

17,883

11,121

Purchase of investment securities

(60)

(387)

Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change in scope of
consolidation
Purchase of shares of subsidiaries and associates

637

155

(325)

(2,140)(5,282)(5,131)(278)(3,595)(3,678)(37,020)

252

9,777

Proceeds from long-term loans payable

3,150

22,105

Repayment of long-term loans payable(10,871)(17,792)

Repayments of finance lease obligations(2,801)(3,854)

Redemption of bonds(5,000)(24)

Proceeds from issuance of bonds with share acquisition rights

10,050－

Proceeds from issuance of bonds－

10,000

Payments from changes in ownership interests in subsidiaries that do
not result in change in scope of consolidation－(6,883)Purchase of treasury shares

(0)

(455)

Proceeds from sales of treasury shares

406

683

(3,173)(3,470)

(638)

(145)

(8,626)

9,940

Effect of exchange rate change on cash and cash equivalents

(116)

55

Net increase (decrease) in cash and cash equivalents

8,425(2,456)

Cash flows from investing activities

Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Net increase (decrease) in short-term loans payable

Cash dividends paid
Other
Net cash provided by (used in) financing activities

15

Cash and cash equivalents at beginning of period
Increase in cash and cash equivalents from newly consolidated
subsidiary
Cash and cash equivalents at end of period

16

17,76526,1975

55

26,197

23,795