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 Fiscal Year Ended March 31, 2015 [Japan GAAP]May 7, 2015
Name of Listed Company: SENKO Co., Ltd.
Stock Listed on: The First Section of the Tokyo Stock Exchange
Code Number:
9069
URL http://www.senko.co.jp/en/
Representative:
Title: President
Name: Yasuhisa Fukuda
Inquiries:
Title: Managing Executive Officer, Public Relations Name: Noburoh Sasaki
Tel. (06) 6440-5155
Scheduled Date of Annual Shareholders Meeting:June 26, 2015
Scheduled Date of Dividend Paid: June 29, 2015
Scheduled Date of Issue of Financial Report:
June 26, 2015
Supplemental Information Materials:
Yes
Information Meeting for Financial Results:
Yes (for institutional investors)
1. Consolidated Operating Results for the Fiscal Year Ended March 2015 (From April 1, 2014 to March 31, 2015)(1) Consolidated Operating Results
Operating revenues
Million yen%
398,44719.3
333,883
13.7

Fiscal year ended March 31, 2015
Fiscal year ended March 31, 2014
(Note) Comprehensive income:Note: Amounts less than one million yen have been rounded down.
Operating income
Ordinary income
Net income
Million yen%
Million yen%
Million yen%
13,64912.6
13,234
17.1
7,073
8.8
12,122
22.3
11,305
11.9
6,503
25.0

Fiscal year ended March 31, 2015: 9,804 million yen (39.2 %) Fiscal year ended March 31, 2014: 7,045 million yen (20.7 %)Net income
per share

Diluted net
income per share

Yen
55.06
51.89

Fiscal year ended March 31, 2015
Fiscal year ended March 31, 2014
(Reference) Equity in earnings (losses) of affiliates:
Fiscal year ended March 31, 2015: —

Yen
50.41
45.17

Return on
shareholders’equity%9.5
9.8

Ratio of ordinary Ratio of operating
income to total income to operating
assetsrevenues
%
%
5.0
3.4
5.0
3.6

Fiscal year ended March 31, 2014: —The figures for the consolidated operating results for the fiscal year ended March 31, 2014 are after the retrospective application of the changes to accounting
principles following the revision of accounting standards.

(2) Consolidated Financial Position
Total assets
Million yen
285,309
243,570

Fiscal year ended March 31, 2015
Fiscal year ended March 31, 2014
(Reference) Shareholders’ equity:

Fiscal year ended March 31, 2015: 81,026 million yen

Net assets
Million yen
92,74372,302Equity ratio
%
28.4
27.8

Net assets per shareYen
581.46539.52

Fiscal year ended March 31, 2014: 67,819 million yen

The figures for the consolidated financial position for the fiscal year ended March 31, 2014 are after the retrospective application of the changes to accounting
principles following the revision of accounting standards.

(3) Consolidated Cash Flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Million yen
19,228
10,689Fiscal year ended March 31, 2015
Fiscal year ended March 31, 2014

Cash flows fromfinancing activities

Million yen(17,978)(24,956)

Million yen
6,209
14,551

Cash and cash
equivalents at fiscal
year-end
Million yen
25,476
17,667

2. Dividends

Fiscal year ended March 31, 2014
Fiscal year ended March 31, 2015
Fiscal year ending March 31, 2016
(Forecast)First
quarter
Yen−−

Annual dividend
SecondThird
Year-endquarterquarter
Yen
Yen
Yen
8.00
−
8.00
8.00
−
9.00

−

9.00

−

9.00

Total
Yen
16.00
17.00

Aggregate
Dividend on
Payout ratio
amountequity ratio(Consolidated)(Consolidated)(Annual)Million yen
%
%
2,054
30.8
3.0
2,308
30.9
2.9

18.00

28.8

3. Forecast of Consolidated Operating Results for the Year Ending March 2016 (From April 1, 2015 to March 31, 2016)
Operating revenues Operating income
First half ending September 2015
Fiscal year ending March 2016

Million yen
216,000
440,000

%
17.5
10.4

Million yen
7,300
16,800

%
35.8
23.1

(Percentage figures represent year on year changes)
Net income
Profit attributable toOrdinary income
owners of parent
per share
Million yen% Million yen%
Yen
6,900 34.5
3,600 17.3
25.83
16,000 20.9
8,700 23.0
62.43

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 restatements(a) Changes due to revision of accounting standards: Yes(b) Changes other than in (a): None(c) Changes in accounting estimates: None(d) Retrospective restatements: None
(3) Shares outstanding (Common shares)(a) Shares outstanding (including treasury stocks)
As of March 31, 2015:

141,927,426 shares

As of March 31, 2014:

128,989,476 shares

2,577,118 shares

As of March 31, 2014:

3,284,287 shares(b) Treasury stock
As of March 31, 2015:(c) Average number of shares (quarterly consolidated cumulative period)
Fiscal year ended March 31, 2015:

128,467,414 sharesFiscal year ended March 31, 2014:

125,338,438 shares(Note) Starting with the first quarter of the consolidated fiscal year ended March 31, 2015 (the three months ended June 30, 2014), the number of sharesof treasury stock at term-end includes Senko shares owned by the employee stock ownership plan (ESOP) trust, following revisions to accounting
principles due to the amendment of accounting standards. (As of March 31, 2015: 1,954,000 shares; as of March 31, 2014: 2,680,000 shares.)[Reference] Overview of Non-Consolidated Operating Results
1. Non-Consolidated Operating Results for the Fiscal Year Ended March 2015 (From April 1, 2014 to March 31, 2015)(1) Non-Consolidated Operating Results

Fiscal year ended March 31, 2015
Fiscal year ended March 31, 2014

Operating revenues
Million yen%
199,624
2.2
195,3225.0
Net income
per share(Percentage figures represent year on year changes)
Operating income
Ordinary income
Net income
Million yen%
Million yen%
Million yen
%
6,246
(5.7)
7,242
(1.0)
4,324
(5.0)
6,621
6.9
7,318
14.7
4,551
42.9
Diluted net income per
share
Yen
30.82
31.61

Yen
33.66
Fiscal year ended March 31, 2015
36.31
Fiscal year ended March 31, 2014
The figures for the non-consolidated operating results for the fiscal year ended March 31,
2014 are after the retrospective application of the changes to accounting principles
following the revision of accounting standards.
(2) Non-Consolidated Financial Position

Fiscal year ended March 31, 2015
Fiscal year ended March 31, 2014
(Reference) Shareholders’ equity:

Total assets
Million yen
215,941
199,693

Fiscal year ended March 31, 2015: 70,040 million yen

Net assets
Million yen
70,32861,300Equity ratio
%
32.4
30.6

Net assets per shareYen
502.62
485.78

Fiscal year ended March 31, 2014: 61,064 million yen

The figures for the non-consolidated financial position for the fiscal year ended March 31, 2014 are after the retrospective application of thechanges to accounting principles following the revision of accounting standards.
Status of implementation of auditing procedure
The auditing procedure for the consolidated financial statements that is prescribed by the Financial Instruments and Exchange Act had
not been completed when this financial report was released.
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“Forecast for fiscal year ending March 2016” on page 4.

Index to accompanying materials

1．Results of Operations and Financial Condition ........................................................................................................................................ 2(1) Results of Operations ........................................................................................................................................................................ 2(2) Financial Condition ............................................................................................................................................................................ 4(3) Fundamental Policy for Distribution of Earnings and Dividend for the Current and the Next Fiscal Years ..................................... 5(4) Business Risk ...................................................................................................................................................................................... 5
2．Corporate Group ....................................................................................................................................................................................... 6
3．Management Policies ............................................................................................................................................................................... 7(1) Fundamental Management Policy .................................................................................................................................................... 7(2) Medium and Long-term Strategies...................................................................................................................................................... 7
4．Basic Concept Regarding the Selection of Accounting Standards ........................................................................................................... 8
5．Consolidated Financial Statements .......................................................................................................................................................... 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 Net Assets ........................................................................................................................ 13(4) Consolidated Statements of Cash Flows .......................................................................................................................................... 15

1

1.

Results of Operations and Financial Condition(1) Results of Operations
1) Fiscal year performance
In the fiscal year ended March 31, 2015 (April 1, 2014 to March 31, 2015), the Japanese economy remained sluggish as consumer
spending declined due to the consumption tax rate hike, unfavorable weather, and a climb in prices caused by depreciation of theyen. In addition, with some overseas economies showing a slowdown, the outlook of the economy remained uncertain.
In the logistics industry, cargo volumes declined in consumer spending-related goods and construction-related materials, due to thefall in consumer spending and housing investment caused by the consumption tax rate hike. Moreover, the industry environment
remained severe because costs increased, due to rising outsourcing costs caused by a shortage of trucks and drivers, while fuelprices leveled off for the present because of a drop in crude oil prices.
In this environment, the Senko Group established a four-year medium-term business plan that began in the fiscal year ended March
31, 2014 and is based on the slogan “Moving Global.” The plan has three goals: “go beyond logistics,” “make the world go round,”and “revolutionize business.” The Group has been working to achieve growth in the distribution business and commerce and tradebusiness as well as to foster an even greater degree of trust among its customers by building a structure for services with highquality and outstanding performance in relation to cost.
The following provides an outline of our main activities in the fiscal year ended March 31, 2015.
In retail product logistics, the Company started operation of large-scale distribution centers in the Kanto, Chubu and Kansai regions.
It opened its new warehouse at the Tawaramoto Distribution Center (Shiki County, Nara Prefecture) in May 2014, the Moriyama PD
Center No. 3 Warehouse (Moriyama City, Shiga Prefecture) in June 2014, the Kitakanto PD Center (Ota City, Gunma Prefecture) in
July 2014, and the Nagoya PD Center No. 2 (Nagoya City, Aichi Prefecture) in October 2014 to expand distribution operations.
In addition, as companies increasingly outsource their distribution operations, we obtained an order for distribution operations in the
Kyushu area from a major beverage manufacturer in May 2014 and took over the general cargo distribution business and customs
clearance business in October 2014 from a large gas sales company’s distribution affiliate.
Furthermore, as part of our efforts to enhance the food logistics business, we welcomed several logistics companies with specialist
expertise into the Senko Group. The Company brought the following companies into subsidiaries: In June 2014 Sankyo Butsuryu
Niyaku Co., Ltd. (Kasai County, Hokkaido Prefecture) and Sankyo Logistics Co., Ltd. (also in Kasai County), two companies thatengage in the distribution of agricultural products in Hokkaido, and in October 2014 Runtec Corporation (Fukuoka City, Fukuoka
Prefecture). Runtec operates its low temperature logistics business (in cold and freezer storage) nationwide, with more than 1,000
units of cold and freezer storage trucks and low temperature warehouses with an area of around 20,000 tsubo (approximately
66,000 square meters); its expertise in the low temperature logistics business is based on more than 50 years’ experience.
In the housing logistics domain, we started operation of the Yawara Housing Distribution Center (Tsukubamirai City, Ibaraki
Prefecture) in November 2014 to strengthen delivery capabilities of housing material in the Kanto area. In addition, we obtained an
outsourcing order from a major solar panel manufacturer for all of its logistics operations ranging from distribution within plants towarehousing, cargo handling, shipment, and delivery, some of which were launched in January 2015.
In the chemicals logistics area, Senwamaru, a heavy oil vessel, entered service in November 2014. We also managed to expand
business by making proposals for efficient transportation using bulk containers that we developed, which resulted in obtaining
new contracts.
Overseas, in East Asia we entered into an agreement in October 2014 to start new transportation operations of automobile parts
within China, which is scheduled to commence in June 2015. In South Korea, we worked to establish an integrated distribution
system between Japan and South Korea utilizing the KO-SENKO Logistics Center that was launched in the previous fiscal year,
while in North America we opened the Mexico branch in July 2014 under the jurisdiction of our U.S. subsidiary, seeking to expand
business by starting transportation operations within Mexico as well as with the U.S. In Thailand, we are constructing a distribution
center that handles import/export cargo at the country’s largest harbor, Laem Chabang Port. It is expected to begin operation thissummer.
In the commerce and trade business segment, we developed products with our trade company subsidiaries using their expertise,and promoted joint sales activities to customers of our trade company subsidiaries’ and ours. In addition, we have been working to
generate synergy with the distribution business by actively proposing our logistics service to the suppliers and customers of eachtrade company subsidiary as well as by carrying out logistics operations of merchandise from subsidiaries within the Group.
We have also been promoting green logistics as part of our efforts to reduce our environmental burden as well as resolving the issueof the shortage of drivers. We were the first in the logistics industry to be awarded with the Prize for the Best Business Entities
Working on Modal Shift by the Japan Federation of Freight Industries in March 2015 for our proposals for a modal shift to use
2railways in our efforts to obtain new customers, and, as a result, for managing to significantly improve the efficiency of transportation
and reduce the environmental burden.
As for our efforts to secure financial soundness, in April 2014 we established Senko Asset Management Co., Ltd. (Osaka City,
Osaka Prefecture), a company that manages the assets of a real estate investment trust (a private REIT), and in February 2015 we
obtained approval and license necessary for operations. We will raise funds for new facilities investment by putting our distribution
centers into a private REIT originated by Senko Asset Management and further promote the growth and expansion of the distribution
center business.
The full-year performance was as follows:(Unit: Millions of Yen)FY ended March 2014

FY ended March 2015

Change%Operating revenues

333,883

398,447

64,563

19.3

Operating income
Ordinary income

12,122
11,305

13,64913,234

1,527
1,929

12.6
17.1

Net income

6,503

7,073

569

8.8

Consolidated operating revenues for the fiscal year ended March 31, 2015 increased 19.3% year on year to ¥398,447 million due toefforts to aggressively expand sales and the consolidation of AST CORPORATION and Runtec Corporation through M&A in 2013
and October 2014, respectively.
Consolidated operating income grew to ¥13,649 million, up 12.6%, while consolidated ordinary income rose to ¥13,234 million, up
17.1%. This reflected positive factors, such as a rise in operating revenues, a price revision, M&A, and a drop in fuel costs due to thedecline in oil prices, despite cost increases, including the hike in outsourcing costs, together with negative effects from thedepreciation of the yen in the commerce and trade business. Net income increased to ¥7,073 million, up 8.8%.
The business segment performance was as follows:
Distribution
In the retail product logistics business, the Company received an order for distribution operations from a major beverage
manufacturer; cargo volume increased for companies in the fashion industry; and the M&A of Sankyo Butsuryu Niyaku Co., Ltd.,Sankyo Logistics Co., Ltd. and Runtec Corporation had a positive effect on business. In the housing logistics business, theCompany saw cargo volumes decrease due to the effect of the consumption tax rate hike, despite aggressive sales promotion
activities. In the chemicals logistics business, there was a positive effect from large-scale capital expenditure, such as an asphalt
tanker that was built in the previous fiscal year, as well as orders in new operations due to expanded sales. Consequently, operating
revenues for the consolidated fiscal year under review increased to ¥273,663 million, up 14.2% from the previous year.
Commerce and trade
In the commerce and trade business, operating revenues increased to ¥120,685 million, up 33.1% from the previous year, due tothe impact of acquiring AST CORPORATION as a consolidated subsidiary and sales growth in the petroleum marketing business.
OthersIn this segment, operating revenues grew to ¥4,098 million, up 19.1% from the previous year, due to a rise in orders received foroutsourced data processing services and the launch of the solar electricity sales business in September 2013.

3

2) Forecast for fiscal year ending March 2016
The Japanese economy is expected to see a mild recovery, supported by an improvement in the employment environment, arecovery in consumer spending due to unified wage increases, and a rise in capital expenditure on the back of companies’ improved
operating results. In the logistics industry, although consumer-related and production-related cargo volumes are forecast to
gradually recover, the total traffic volume is expected to remain unchanged from the previous fiscal year due to a decrease inconstruction-related cargo owing to a decline in public spending. Furthermore, the business environment is expected to remain
severe, with outsourcing costs growing sharply due to a shortage of human resources and trucks.
In this environment, the Senko Group will tackle the following tasks during the third year of its four-year medium-term business plan:
improving its profitability, enhancing its competitiveness, and upgrading its operation system.
To improve our profitability, we plan to reorganize our operation system to better fit the actual conditions of the regions andbusinesses, improve unprofitable businesses, and revise our charges by assessing cost increases due to a shortage of humanresources.
To enhance our competitiveness, we will open new distribution centers in the Kanto and Tohoku regions as well as work to build abusiness foundation for three-temperature zone logistics (cold, freezer, and normal temperature storage) together with Runtec
Corporation. Overseas, we give priority to the four areas of East Asia, ASEAN, Central Asia, and North America, where we intend tostrengthen our business by opening new distribution centers and expanding the local transportation business. In addition, we plan to
explore business opportunities in new markets by expanding the agriculture business and embarking on the establishment anddevelopment of the life support business.
As measures to upgrade our operation system, we will focus on the systematic hiring of drivers to boost the utilization of our own
trucks, instead of those currently used by subcontractors. In addition, we plan to open a driving school within the company wherestudents can acquire driver’s licenses for large, medium-sized and hauling cars to foster in-house drivers, as well as establish a work
environment where employees can thrive.
As a result of pursuing such corporate activity, the Group's consolidated forecasts for the next fiscal year are for operating revenuesof ¥440.0 billion, operating income of ¥16.8 billion, ordinary income of ¥16.0 billion, and profit attributable to owners of parent of ¥8.7
billion.
(2) Financial Condition
1) Assets, liabilities and net assets
Total assets
Total assets at the end of the fiscal year under review were ¥285,309 million, ¥41,739 million higher than at the end of the previous
fiscal year.
Current assets amounted to ¥98,248 million, up ¥14,094 million from March 31, 2014. This was due to increases in cash anddeposits of ¥7,918 million, notes and operating accounts receivable of ¥4,837 million, and merchandise and finished goods of ¥403
million.
Noncurrent assets totaled ¥187,061 million, up ¥27,644 million from March 31, 2014. This was due to increases in property, plantand equipment of ¥21,353 million, goodwill of ¥1,132 million, and investments and other assets of ¥5,203 million.
Liabilities
Liabilities rose ¥21,298 million from the end of the previous fiscal year to ¥192,565 million.
Current liabilities amounted to ¥92,554 million, up ¥13,213 million from March 31, 2014. This was due to increases in trade notes
and operating accounts payable of ¥1,386 million, and short-term loans payable of ¥12,890 million.
Noncurrent liabilities totaled ¥100,011 million, up ¥8,084 million from March 31, 2014. This was due to increases in bonds payable of¥6,980 million, long-term loans payable of ¥4,372 million, and net defined benefit liability of ¥2,577 million, despite a decrease inconvertible bond-type bonds with subscription rights to shares of ¥5,162 million.
Net assets
Net assets expanded by ¥20,441 million from the end of the previous fiscal year to ¥92,743 million. This reflected increases in capitalstock and capital surplus of ¥2,577 million each due to the conversion of convertible bond-type bonds with subscription rights toshares to common shares, while retained earnings, valuation difference on available-for-sale securities, and minority interests grewby ¥5,611 million, ¥1,081 million and ¥7,181 million, respectively. The equity ratio increased by 0.6 percentage points from the end of
the previous fiscal year to 28.4%.

42) Cash flows
Cash and equivalents at the end of the term increased by ¥7,808 million year on year to ¥25,476 million.
Net cash provided by operating activities was ¥19,228 million. This was mainly due to income before income taxes of ¥13,053
million and depreciation and amortization of ¥8,856 million, despite income taxes paid of ¥4,230 million.
Net cash used in investing activities was ¥17,978 million. This was mainly due to the purchase of property, plant and equipment of¥13,030 million, purchase of shares of subsidiaries resulting in change in scope of consolidation of ¥3,609 million, and the purchaseof shares of subsidiaries and associates of ¥510 million.
Net cash provided by financing activities was ¥6,209 million. This was mainly due to an increase in short-term loans payable of¥13,032 million, proceeds from long-term loans payable of ¥6,800 million, and proceeds from issuance of bonds of ¥7,000 million,
despite repayment of long-term loans payable of ¥9,402 million, repayments of finance lease obligations of ¥2,135 million,
redemption of bonds of ¥7,040 million, and cash dividends paid of ¥2,075 million.
3) Performance indicators associated with cash flows
Fiscal years ended March 31

2011

2012

2013

2014

2015

Equity ratio (%)

33.3

30.3

31.3

27.8

28.4

Market capitalization equity ratio (%)

19.1

20.6

29.7

23.6

38.1

Interest-bearing debt to cash flow ratio

8.2

7.6

6.6

9.2

5.7

Interest coverage ratio

6.2

7.9

9.6

8.6

15.5

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 stock).
• 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
is to return profits to shareholders by implementing stable dividends and dividends that are linked to business results.
In accordance with this policy, the year-end dividend for the fiscal year ended March 31, 2015 is set at ¥9.00 per share, in view ofoperating results for the full year. Combined with the already declared interim dividend of ¥8.00, the total annual dividend is expected tobe ¥17.00.
For the next fiscal year’s dividend, we expect an annual dividend of ¥18.00 per share (interim dividend of ¥9.00, year-end dividend of¥9.00), in accordance with our basic policy on profit distribution.
(4) Business Risk
No discussion of business and other risks is presented here because there have been no significant changes involving these risks
since the most recent Securities Report (dated June 27, 2014), which includes a section about business and other risks.

5

2.

Corporate GroupThe Senko Group includes Senko, 92 subsidiaries and four affiliated companies. To meet the increasingly diverse and exacting needsof 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: Distribution, which includes cargo transport by truck, cargotransport by rail, warehouse operations, the operation of distribution centers, and other activities; Trading and 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.

63. Management Policies(1) Fundamental Management Policy
The Senko Group is dedicated to becoming a company that earn the trust of shareholders, customers, employees and society andprovide benefits to these stakeholders by using highly advanced logistics and information technologies to create and provide servicesof the highest quality.
To accomplish this goal, group companies seek to maximize corporate value by supplying customers with high-quality, low-costvalue-added logistics services. From the standpoint of coexisting with society, the Senko Group also places priority on safety andenvironmental protection along with helping maintain social order. The aim is to create an energetic organization that is dedicated to
growth and trust and able to fulfill its obligations as a leading member of the logistics industry.
(2) Medium and Long-term Strategies
The Company celebrates its 100th anniversary in 2016. To celebrate the 100th anniversary of its foundation, the Company has
established a vision of what is needed for “Becoming a logistics information company that can be trusted upon both in Japan andoverseas” and has accordingly created a medium-term business plan that covers the four-year period commencing with the fiscal year
started in 2013.
Summary of the Senko Group Medium-term Business Plan (April 2013 to March 2017)1.

The shape that the Senko Group aims to achieve“Becoming a logistics information company that can be trusted upon both in Japan and overseas”*A logistics information company means: A company that has a good command of information, including logistics andtrade distribution, and provides the appropriate distribution and logistical services on a global scale.

2.

Corporate slogan: “Moving Global”
Go beyond logistics:
Provide customers with high-quality services beyond the framework of an existing logistics company.
Make the world go round:
Conduct a “global” business with social consciousness.
Revolutionize business:
Offer customers new value by cultivating an awareness of self-development in employees.

3.

Medium-term management policies(1) Aiming at the provision of comprehensive and integrated services, challenging the creation of products together
with expanding the range of our businesses in distribution and in trade logistics operations.
(2) Fostering a greater degree of trust among our customers, forming a high-quality and high-service structure.
(3) Reinforcing our staff training and employment activities to foster and retain group human resources (including
global human resources, and in-house entrepreneurs within the Group).
(4) Placing emphasis on compliance, and aiming to become a company that is in the vanguard of environmental,
safety, and health issues.
(5) Promoting financial policies that are based upon prioritizing the maintenance of financial soundness.

4.

Medium-term business policies(1) Expanding the operational scope of our “physical distribution business.”(2) Expanding the operational scope of our “commerce and trading business.”(3) Developing an “international distribution business” that prioritizes earnings(4) Taking on the challenge of “making things.”(5) Promoting “business partnerships and M&A.”

7

4. 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), Senko intends to monitor developments in Japan andoverseas, and to respond appropriately to these developments.

85. Consolidated Financial Statements(1) Consolidated Balance Sheets(Unit: Millions of Yen)
As of March 31, 2014

As of March 31, 2015

AssetsCurrent assets
Cash and deposits

17,767

25,685

Notes and accounts receivable

51,76456,602Merchandise

6,076

6,480

Real estate for sale

3

3Work in process

214

191

Supplies

209

437

Deferred tax assets

2,397

2,515

Other

5,769

6,374

(50)

(42)

84,15398,248118,145

141,085

Accumulated depreciation(58,006)(72,650)

Buildings and structures (net)60,13968,435

Machinery, equipment and vehicles

22,382

34,048(16,103)(26,073)

6,278

7,975

Tools, furniture and fixtures

5,363

6,055

Accumulated depreciation(4,346)(4,960)Tools, furniture and fixtures (net)

1,017

1,094

Land

56,092

66,229Lease assets

8,508

7,405

Accumulated depreciation(5,225)(4,356)

Lease assets (net)

3,283

3,049

Construction in progress

1,646

3,027

128,457

149,811

Goodwill

3,178

4,311

Other

3,440

3,395

Total intangible assets

6,619

7,706

Investment securities

5,775

8,366

Long-term loans receivable

3,957

4,967

−

2,009

Guarantee deposits

9,559

10,390

Deferred tax assets

4,234

2,734

Other

1,370

1,815

Allowance for doubtful accounts

(557)

(741)

Total investments and other assets

24,33929,543

159,416

187,061

243,570

285,309

Allowance for doubtful accounts
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings and structures

Accumulated depreciation
Machinery, equipment and vehicles (net)Total property, plant and equipment
Intangible assets

Investments and other assets

Net defined benefit asset

Total noncurrent assets
Total assets

9

(Unit: Millions of Yen)
As of March 31, 2014

As of March 31, 2015

Liabilities
Current liabilities
Notes and operating accounts payable−trade36,60337,989Current portion of bonds

7,040

20

Short-term loans payable

16,34529,235

Lease obligations

1,986

1,837

Income taxes payable

2,766

3,415

Provision for bonuses

3,342

3,905

163

189

Other

11,093

15,960Total current liabilities

79,34092,5545,020

12,000

Provision for directors’ bonuses

Noncurrent liabilities
Bonds payable
Convertible bond-type bonds with subscription rights to shares

12,031

6,868

Long-term loans payable

57,59861,971

Lease obligations

3,656

3,419

187

369

Net defined benefit liability

6,804

9,381

Provision for special repairs

42

33

Asset retirement obligations

440

575

Other

6,146

5,391

Total noncurrent liabilities

91,927100,011

171,267

192,565

Capital stock

20,521

23,098

Capital surplus

19,337

21,914Retained earnings

31,06436,676

Treasury stock(1,532)(1,183)

Total shareholders’ equity

69,39080,506

Valuation differences on available-for-sale securities

738

1,819

Deferred gains or losses on hedges

(9)

(4)

Foreign currency translation adjustment

230

543

Remeasurements of defined benefit plans(2,530)(1,839)Total accumulated other comprehensive income(1,570)519

Provision for directors’ retirement benefits

Total liabilities
Net assets
Shareholders’ equity

Accumulated other comprehensive income

Subscription rights to shares

235

288

Minority interests

4,247

11,428

Total net assets

72,302

92,743

243,570

285,309

Liabilities and net assets

10(2) Consolidated Statements of (Comprehensive) Income(Consolidated Statements of Income)(Unit: Millions of Yen)
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

(April 1, 2013 – March 31, 2014)(April 1, 2014 – March 31, 2015)

Operating revenues

333,883

398,447

Cost of sales

299,039

357,431

Gross profit

34,84441,016

Selling, general and administrative expenses

22,72227,366

Operating income

12,122

13,649163

187

Dividend income

98

115

Other

629

890

Total non-operating income

891

1,193

1,242

1,213

465

395

1,707

1,608

11,305

13,234Gain on sales of investment securities

549

306

Gain on sales of noncurrent assets

187

59

Gain on revision of retirement benefit plan

239−

Insurance income

32

−

1,009

366

Non-operating income
Interest income

Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income

Total extraordinary income
Extraordinary loss

212

192

Compensation for damage

Loss on retirement of noncurrent assets−

99

Litigation settlement
Provision of allowance for doubtful accounts for subsidiaries andassociates
Loss on business withdrawal

−

98

162

82

−

41

−

33

Office transfer expenses

243−

Loss on valuation of investments in capital of subsidiaries andassociates

104−

Loss on cancellation of lease contracts

77−

Soil improvement cost

61−

Loss on sales of noncurrent assets

Impairment loss

42−

Special retirement expenses

38−

Loss on disaster30−

Total extraordinary loss

971

547

Income before income taxes

11,343

13,053

Income taxes−current

4,314

4,465

Income taxes−deferred

335

958

Total income taxes

4,649

5,424

Income before minority interests

6,693

7,629

189

555

6,503

7,073

Minority interest in income
Net income11

(Consolidated Statements of Comprehensive Income)(Unit: Millions of Yen)

Income before minority interests

Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

(April 1, 2013 – March 31, 2014)(April 1, 2014 – March 31, 2015)

6,693

7,629

69

1,257

Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges(4)7Foreign currency translation adjustment

286

257

−

652

351

2,175

7,045

9,804

Comprehensive income attributable to owners of parent

6,742

9,059

Comprehensive income attributable to minority interests

302

745

Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to12(3) Consolidated Statements of Changes in Net Assets
Fiscal year ended March 31, 2014 (April 1, 2013 – March 31, 2014)(Unit: Millions of Yen)
Shareholders’ equity
Capital stock
Balance at the beginning of current
periodCumulative effects of changes inaccounting policies
Restated balance

Capital surplus

20,521Retainedearnings

18,782

Treasury stock

26,468

Total
shareholders’equity(1,353)64,418−20,521

18,782

26,468(1,353)64,418Changes of items during the period
Issuance of new shares−

Dividends from surplus(1,901)(1,901)

Net income

6,503

6,503

Purchases of treasury stock

559

(566)

(6)

Disposal of treasury stock

(4)

386

381

Change of scope of consolidation(6)

Net changes of items other thanshareholders’ equity
Total changes of items during theperiodBalance at fiscal year end

(6)
−

−

554

4,596

(179)

4,971

20,521

19,33731,064(1,532)

69,390

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
incomeSubscription
rights toshares

673

(4)

52

−

720

195

Minority
interests

1,992

Total net
assets

67,327
−

673

(4)

52

−

720

195

1,992

67,327

Changes of items during the period
Issuance of new shares−

Dividends from surplus(1,901)

Net income

6,503

Purchases of treasury stock(6)

Disposal of treasury stock

381

Change of scope of consolidation(6)

Net changes of items other thanshareholders’ equity
Total changes of items during theperiodBalance at fiscal year end

65

(4)

178

(2,530)(2,291)

40

2,254

3

65

(4)

178

(2,530)(2,291)

40

2,254

4,974

738

(9)

230

(2,530)(1,570)

235

4,247

72,30213

Fiscal year ended March 31, 2015 (April 1, 2014 – March 31, 2015)(Unit: Millions of Yen)
Shareholders’ equity
Capital stock
Balance at the beginning of current
periodCumulative effects of changes inaccounting policies
Restated balance

Capital surplus

20,521Retainedearnings

19,337

Treasury stock

31,064

Total
shareholders’equity(1,532)

69,390530
20,521

19,337

2,577

2,577

31,595530(1,532)

69,920Changes of items during the period
Issuance of new shares

5,155

Dividends from surplus(2,064)(2,064)

Net income

7,073

7,073

Purchases of treasury stock

(10)

(10)

Disposal of treasury stock

360

360

Change of scope of consolidation72

Net changes of items other thanshareholders’ equity
Total changes of items during theperiodBalance at fiscal year end

72
−

2,577

2,577

5,081

349

10,58623,09821,91436,676(1,183)80,506

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
incomeSubscription
rights toshares

738

(9)

230

(2,530)(1,570)235

Minority
interests

4,247

Total net
assets72,302
530

738

(9)

230

(2,530)(1,570)

235

4,247

72,832

Changes of items during the period
Issuance of new shares

5,155

Dividends from surplus(2,064)

Net income

7,073

Purchases of treasury stock(10)

Disposal of treasury stock

360

Change of scope of consolidation72

Net changes of items other thanshareholders’ equity
Total changes of items during theperiodBalance at fiscal year end

1,081

5

313

690

2,090

52

7,181

9,324

1,081

5

313

690

2,090

52

7,181

19,910

1,819

(4)

543

(1,839)519

288

11,42892,74314

(4) Consolidated Statements of Cash Flows(Unit: Millions of Yen)
Fiscal year ended
March 31, 2014

Fiscal year ended
March 31, 2015

(April 1, 2013 – March 31, 2014)(April 1, 2014 – March 31, 2015)

Cash flows from operating activities
Income before income taxes

11,343

13,053

Depreciation and amortization

7,606

8,856

Loss (gain) on sales of investment securities

(549)

(301)

Loss (gain) on sales of noncurrent assets

(187)

(26)

Loss on retirement of noncurrent assets

212

192

Increase (decrease) in provision for retirement benefits(9,300)−

Increase (decrease) in net defined benefit liability

6,804

(638)

84

(14)

Interest and dividends income

(261)

(303)

Interest expenses

1,242

1,213

Decrease (increase) in notes and accounts receivable-trade(2,661)

772

Increase (decrease) in provision for bonuses

Decrease (increase) in inventories

(295)

(533)

Increase (decrease) in notes and accounts payable-trade

1,923(1,365)

Increase (decrease) in accrued consumption taxes

(699)

2,998

Other

514

579

15,77424,483174

214

Interest expenses paid

(1,245)(1,238)

Income taxes paid

(4,014)(4,230)Net cash provided by (used in) operating activities

10,68919,228(23,608)(13,030)

564

431

Sub-totalInterest and dividends income received

Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of investment securities
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
Proceeds from sales of shares of subsidiaries and associates
Other
Net cash provided by (used in) investing activities

(42)

(77)

1,025

126

(2,364)(3,609)

(159)

(510)

12

9

(382)

(1,318)(24,956)(17,978)

850

13,032

Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable

20,520

6,800

Repayment of long-term loans payable(9,549)(9,402)

Repayments of finance lease obligations(2,439)(2,135)(20)(7,040)

−

7,000

7,035

−

Purchase of treasury stock

(6)

(10)

Proceeds from sales of treasury stock

360

360

(1,898)(2,075)

(300)

(319)

14,551

6,209

Effect of exchange rate change on cash and cash equivalents

100

123

Net increase (decrease) in cash and cash equivalents

384

7,583

Cash and cash equivalents at beginning of year

15,69017,667

Increase in cash and cash equivalents from newly consolidated
subsidiary

1,591

225

Cash and cash equivalents at end of year

17,66725,476

Redemption of bonds
Proceeds from issuance of bonds
Proceeds from issuance of bonds with subscription rights to shares

Cash dividends paid
Other
Net cash provided by (used in) financing activities15