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, 2017
[Japan GAAP]

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

May 11, 2017
SENKO Group Holdings Co., Ltd.
Stock Listed on: The First Section of the Tokyo Stock Exchange
9069
URL http://www.senkogrouphd.co.jp/
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 28, 2017
June 28, 2017

Scheduled Date of Dividend Paid: June 29, 2017

Yes
Yes

1. Consolidated Operating Results for the Fiscal Year Ended March 31, 2017 (From April 1, 2016 to March 31, 2017)(1) Consolidated Operating Results
Operating revenue
Million yen
455,435
434,000

Fiscal year ended March 31, 2017
Fiscal year ended March 31, 2016
(Note) Comprehensive income

%
4.9
8.9

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%
17,081(2.4)
17,301
0.7
8,950
4.8
17,49728.2
17,178
29.8
8,542
20.8

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

Diluted profit
per share

Yen
61.67
60.43

Fiscal year ended March 31, 2017
Fiscal year ended March 31, 2016

Fiscal year ended March 31, 2016: ¥8,630 million (–12.0%)

Yen
58.74
56.32

Ratio of ordinary
profit to total
assets
%6.2
6.2

Return on
shareholders’equity%9.5
10.1

Ratio of operating
profit to operating
revenue%
3.8
4.0(Reference) Equity in earnings (losses) of affiliates:
Fiscal year ended March 31, 2017: ¥272 million

Fiscal year ended March 31, 2016: ¥109 million(2) Consolidated Financial Position
Total assets
Million yen
285,958
269,461

As of March 31, 2017
As of March 31, 2016
(Reference) Shareholders’ equity:

Net assets
Million yen
114,090
100,009

Fiscal year ended March 31, 2017: ¥100,287 million

Equity ratio
%
35.1
32.6

Net assets per shareYen
661.61613.71

Fiscal year ended March 31, 2016: ¥87,715 million(3) Consolidated Cash Flows
Cash flows fromoperating activities

Cash flows frominvesting activities

Million yen
20,84816,149Fiscal year ended March 31, 2017
Fiscal year ended March 31, 2016

Cash flows fromfinancing activities

Million yen(3,678)(2,288)Million yen(8,626)(21,492)

Cash and cash
equivalents at end of
periodMillion yen
26,197
17,765

2. Dividends
June
30
Yen
Fiscal year ended March 31, 2016
Fiscal year ended March 31, 2017
Fiscal year ending March 31, 2018
(Forecast)−−−

Annual dividend
September December
30
31
Yen
Yen
−
9.00
−
11.00
11.00

−

March
31
Yen
11.00
11.00

Yen
20.00
22.00

11.00

22.00

Total

Aggregate
Dividend on
Payout ratio
amountequity ratio(Consolidated)(Consolidated)(Annual)Million yen
%
%
2,887
33.1
3.3
3,265
35.7
3.3
33.7

Breakdown of the year-end dividend per share for the year ended March 31, 2016: ¥9 per share ordinary dividend, ¥2 per sharecommemorative dividend for the 70th anniversary of the foundation and 100th anniversary in business3. Forecast of Consolidated Operating Results for the Fiscal Year Ending March 31, 2018 (From April 1, 2017 to March 31, 2018)

First half ending September 30, 2017
Fiscal year ending March 31, 2018

Operating revenue

Operating profit

Million yen
237,000
500,000

Million yen
7,700
18,000

%
5.6
9.8

%
(13.2)
5.4(Percentage figures represent year-on-year changes)
Profit attributable toProfitOrdinary profit
owners of parent
per share
Million yen% Million yen
%
Yen
7,900
(9.6)
3,900 (12.8)
25.73
18,300
5.8
9,900
10.6
65.31

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: Yes(b) Changes other than in (a): None(c) Changes in accounting estimates: Yes(d) Retrospective restatement: None
(3) Shares outstanding (Common shares)(a) Shares outstanding (including treasury shares)
As of March 31, 2017:

152,861,921 shares

As of March 31, 2016:

144,834,771 shares

1,279,937 shares

As of March 31, 2016:

1,907,546 shares(b) Treasury shares
As of March 31, 2017:(c) Average number of sharesFiscal year ended March 31, 2017:

145,138,720 sharesFiscal year ended March 31, 2016:

141,352,936 shares(Note) Starting with the first quarter of the consolidated fiscal year ended March 31, 2015 (the three months ended June 30, 2014), thenumber of treasury shares 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, 2017: 873,200
shares; as of March 31, 2016: 1,449,000 shares.)[Reference] Overview of Non-Consolidated Operating Results
Non-Consolidated Operating Results for the Fiscal Year Ended March 31, 2017 (From April 1, 2016 to March 31, 2017)(1) Non-Consolidated Operating Results

Fiscal year ended March 31, 2017
Fiscal year ended March 31, 2016

(Percentage figures represent year-on-year changes)
Operating profit
Ordinary profit
ProfitMillion yen%
Million yen%
Million yen%
5,437 (14.1)
6,077(11.8)
3,678
(2.5)
6,331
1.4
6,889
(4.9)
3,774
(12.7)

Operating revenue
Million yen%
205,4690.5
204,374
2.4
Profitper share

Fiscal year ended March 31, 2017
Fiscal year ended March 31, 2016

Diluted profit
per share
Yen
25.35
26.71

Yen
24.13
24.87

(2) Non-Consolidated Financial Position

As of March 31, 2017
As of March 31, 2016
(Reference) Shareholders’ equity:

Total assets
Million yen
210,504
203,379

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

Net assets
Million yen
79,16973,505Equity ratio
%
37.4
36.0

Net assets per shareYen
519.67511.77

Fiscal year ended March 31, 2016: ¥73,145 million

This financial report is not required to be audited.
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 the fiscal year ending March 31, 2018” on page 3.

Index to accompanying materials

1．Overview of results of operations and others .......................................................................................................................................... 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．Basic Concept Regarding the Selection of Accounting Standards ........................................................................................................... 7
4．Consolidated Financial Statements and Significant Notes Thereto .......................................................................................................... 8(1) Consolidated balance sheets .............................................................................................................................................................. 8(2) Consolidated statements of (comprehensive) income ..................................................................................................................... 10
Consolidated statements of income................................................................................................................................................. 10
Consolidated statements of comprehensive income....................................................................................................................... 11(3) Consolidated statements of changes in equity ................................................................................................................................. 12(4) Consolidated statements of cash flows ............................................................................................................................................ 14

1

1.

Overview of operating results and others(1) Results of operations(a) Results of operations in the fiscal year ended March 31, 2017
In the fiscal year ended March 31, 2017 (April 1, 2016 to March 31, 2017), the Japanese economy emerged from a stagnant phasehaving shown signs of recovery amid modest recovery of global economy, combined with the improvement in the income andemployment environment. However, business conditions remained uncertain due to factors such as the weak consumer spending.
In the logistics industry, the business environment remained challenging partially due to shortages of drivers and workers persisting amid
an ongoing scenario of slowing freight volume.
In this environment, the Senko Group sought to enhance its competitiveness, expand its business areas, and upgrade its operating
system.
The following provides an outline of our main activities in the fiscal year ended March 31, 2017.
In Japan, we welcomed ACROSS TRANSPORT CO., LTD., a department store delivery agent involved in the fashion logistics business,
into the Senko Group in April to boost cooperation with each of the Senko Group companies in charge of the fashion logistics businesses.
In addition, we commenced operations of our large-scale distribution facilities, namely, the Narita Fashion Logistics Center II (Tomisato
City, Chiba Prefecture) which provides logistics services for imported brands, the Nishikanto LC (Logistics Center) (Aikawa Town,
Kanagawa Prefecture) which engages in operations for major general merchandise store outlets located in the western Kanto region, theKazo PD Center (Kazo City, Saitama Prefecture) which engages in operations for the Tokyo metropolitan area, and the Hino Distribution
Center (Hino City, Tokyo) which engages in operations for major drug stores in May, August and November 2016, and January 2017,
respectively.
Outside Japan, we expanded freezer warehouse and other equipment at the Kentucky Logistics Center (Kentucky, the United States) inAugust 2016. We also started operation at our first Three-Temperature Zone Logistics Center in Myanmar in October 2016.
In the trading & commerce business segment, we moved forward in developing new products and expanding sales channels for existingproducts, while also working to provide greater depth of integrated trading and logistics services through efforts including internal sourcingof operations within the Group with respect to logistics operations involving our products.
Meanwhile, regarding initiatives in the new business domain, we established a subsidiary in August 2016, advancing into the real estatebusiness. We also launched a nursing care business and lifestyle support services business by making KEIHANNA helper station Co.,
Ltd., which operates a nursing care business, and Ienonaka Company, Ltd., which provides a housekeeping services, into the Senko
Group in October 2016 and January 2017, respectively.
To upgrade our operating system, we promoted a modal shift to reduce the environmental impact and resolve the shortage of drivers,
while boosting the use of our own trucks. In October 2016, we opened our driving school grounds for large vehicles at the Company’s
traffic safety training facility Crefeel Koto, and set about enhancing our framework for securing and training drivers.
To ensure financial soundness, in September we transferred seven distribution centers to a real estate investment company (a private
REIT) managed by Senko Asset Management Co., Ltd., and the raised funds were utilized for the construction of new distribution centersand other purposes.
Furthermore, in October 2016, we established SENKO UNIVERSITY, an in-house university for raising the sophistication andspecialization of training content for human resources and developing strategic human resources.

2

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, 2016
434,000

FY ended
March 31, 2017
455,435

17,497
17,1788,542

Change%21,434

4.9

17,081
17,301

(415)
122

(2.4)
0.7

8,950

408

4.8

Consolidated operating revenue for the fiscal year ended March 31, 2017 increased 4.9% year on year to ¥455,435 million. This result
mainly reflected the aggressive expansion of sales and the contribution of ACROSS TRANSPORT CO., LTD., which was made a
consolidated subsidiary of the Company.
On the profit front, consolidated operating profit decreased to ¥17,081 million, down 2.4% year on year due to a decline in freight volumes
from existing customers, and despite factors buoying profits such as sales expansion, revision of freight charges, and improvements in
productivity. On the other hand, consolidated ordinary profit rose to ¥17,301 million, up 0.7% year on year, due primarily to the increase in
non-operating income, while profit attributable to owners of parent also rose to ¥8,950 million, up 4.8% year on year.
The business segment performance was as follows.
Distribution
Operating revenue grew 5.8% year on year to ¥317,984 million in this segment. This was mainly attributable to a rise in operating revenue
resulting from the consolidation of ACROSS TRANSPORT CO., LTD. and expansion of sales to new and existing customers, including amajor drugstore.
Trading & commerce
Operating revenue grew 2.6% year on year to ¥132,868 million in this segment. This reflected the result of an increase in sales volume ofexisting products and sales expansion to new customers.
OthersOperating revenue rose 11.5% year on year to ¥4,582 million in this segment. This was attributable to the growth of sales in the dataprocessing services and expansion of the sales of electricity produced by solar power generation.
(b) Forecast for the fiscal year ending March 31, 2018
The Japanese economy is expected to achieve moderate recovery combined with expansion against a backdrop of rebounding domestic
demand primarily in terms of consumer spending, as well as expanding overseas demand brought about by upturns in the U.S. andChinese economies.
In the logistics industry on the other hand, the challenging business environment is expected to continue given a situation where it has
become difficult to secure drivers and other human resources needed to handle increasing volumes of small-lot cargo as shipment
volumes of freight overall stagnate.
In this environment, the Company was renamed as “SENKO Group Holdings Co., Ltd.” on April 1, 2017, and transitioned to a holding
company structure. This involved categorizing each of the Group operating companies into one of the five business domains of
distribution, trading, lifestyle support, agriculture, and business support. Accordingly, operating companies within the Senko Group were
designated as core companies that will handle oversight and management. This includes SENKO Co., Ltd. and Runtec Corporation in the
distribution business, and SENKO SHOJI CO.,LTD., SMILE CORP., and AST CORPORATION in the trading business.
Going forward, we aim to strengthen Group alliances more than ever before and further enhance corporate value, by strengthening ourcorporate governance framework, clarifying each operating company’s responsibilities and authority, and expediting decision-making.
In addition, the Senko Group has established a new five-year medium-term business plan with fiscal 2017 being its initial fiscal year.
Acting as a group of companies that provides support for people’s daily lives and industry, we have established a corporate vision withrespect to becoming “Corporate Group Creating Future Trends,” and accordingly we will work to achieve further expansion of ouroverseas businesses and development of new businesses in conjunction with our core businesses of distribution and trading.
As a result of pursuing such corporate activity, the Group’s consolidated forecasts for the next fiscal year are for operating revenue of¥500.0 billion, operating profit of ¥18.0 billion, ordinary profit of ¥18.3 billion, and profit attributable to owners of parent of ¥9.9 billion.

3(2) Financial condition
1) Assets, liabilities and net assets
Total assets
Total assets as of March 31, 2017 were ¥285,958 million, ¥16,497 million higher than at the end of the previous fiscal year.
Current assets amounted to ¥108,699 million, up ¥15,318 million from the end of the previous fiscal year. This mainly reflected anincrease of ¥8,685 million in cash and deposits and increases of ¥3,868 million in notes and operating accounts receivable.
Non-current assets totaled ¥177,175 million, up ¥1,204 million from the end of the previous fiscal year. This was due to a decrease inproperty, plant and equipment of ¥6,609 million as a result of transfers of seven distribution centers to the private REIT, despite increases
in intangible assets of ¥1,759 million, and an increase in investments and other assets of ¥6,054 million.
Liabilities
Liabilities as of March 31, 2017 increased ¥2,416 million from the end of the previous fiscal year to ¥171,868 million.
Current liabilities totaled ¥93,914 million, up ¥8,267 million from the end of the previous fiscal year. This was mainly due to increases inelectronically recorded obligations−operating of ¥5,171 million, short-term loans payable of ¥7,243 million, and lease obligations of ¥857
million, despite decreases in notes and operating accounts payable−trade of ¥3,394 million and current portion of bonds of ¥5,000 million.
Non-current liabilities totaled ¥77,953 million, down ¥5,850 million from the end of the previous fiscal year. This was due to increases inconvertible bond-type bonds with subscription rights to shares of ¥5,012 million and lease obligations of ¥2,774 million, even though
long-term loans payable decreased by ¥13,459 million.
Net assets
Net assets as of March 31, 2017 rose ¥14,080 million from the end of the previous year to ¥114,090 million. This was due to factors suchas increases of ¥2,516 million in capital stock as a result of the conversion to shares of convertible bond-type bonds with subscription
rights to shares, ¥2,573 million in capital surplus, ¥5,809 million in retained earnings, ¥1,527 million in remeasurements of defined benefit
plans, and ¥1,472 million in non-controlling interests. The equity ratio increased by 2.5 percentage points to 35.1% from the end of theprevious fiscal year.
2) Cash flows
Cash and cash equivalents at end of period increased by ¥8,431 million year on year to ¥26,197 million.
Net cash provided by operating activities amounted to ¥20,848 million. This was mainly due to profit before income taxes of ¥16,572
million and depreciation of ¥10,216 million, despite interest expenses paid of ¥953 million and income taxes paid of ¥5,360 million.
Net cash used in investing activities totaled ¥3,678 million. This was mainly due to the purchase of property, plant and equipment of¥16,253 million and purchase of shares of subsidiaries and associates of ¥5,282 million, despite proceeds from the sales of property,
plant and equipment of ¥17,883 million.
Net cash used in financing activities totaled ¥8,626 million. This was mainly due to a repayment of long-term loans payable of ¥10,871
million, repayments of finance lease obligations of ¥2,801 million, redemption of bonds of ¥5,000 million, and cash dividends paid of¥3,173 million, despite proceeds from long-term loans payable of ¥3,150 million and proceeds from issuance of bonds with subscription
rights to shares of ¥10,050 million.

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

2013

2014

2015

2016

2017

Equity ratio (%)

31.3

27.8

28.4

32.6

35.1

Market capitalization equity ratio (%)

29.7

23.6

38.1

36.4

38.0

Interest-bearing debt to cash flow ratio

6.6

9.2

5.7

5.7

4.1

Interest coverage ratio

9.6

8.6

15.5

14.7

21.9

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 is toreturn 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, 2017 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 ¥22.00 per share (interim dividend of ¥11.00, year-end dividend of ¥11.00),
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, 2016), which includes a section about business and other risks.

5

2.

Corporate GroupThe Senko Group includes the Company, 102 subsidiaries and nine 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: Distribution, 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 CO., LTD.
Distribution

Trading & Commerce

Others

Subsidiaries

Subsidiaries

Subsidiaries〇 SENKO Split Preparation 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 Sapporo Senko Transport 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.

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 Obata Co., Ltd.
〇 Shanghai Smile Corp.
〇 SHANGHAI SMILE PRINTING CORP.
〇 HONG KONG SMILE CORP LIMITED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.
〇 Senko Insurance Services Co., Ltd.
〇 Senko Foods Co., Ltd.

Japan Select LLP

Crefeel Koto Co., Ltd.

〇 KOREA SMILE CORP.

〇 Senko Housing Logistics Co., Ltd.
〇 Chiba Senko Transport Co., Ltd.
〇 Senko Fashion Logistics Co., Ltd.
〇 Kashiwa Senko Transport Co., Ltd.
〇 Noda Senko Logi Service Co., Ltd.
〇 Kanagawa Senko Transport Co., Ltd.
〇 Atsugi Senko Transport Co., Ltd.

Senko Business Support Co., Ltd.

Subsidiaries

Logi Factoring Co., Ltd.

〇〇 Miyazaki Senko Apollo Co., Ltd.
〇 Senko Plantec Co., Ltd.
〇 SK Kaihatsu Ippan Shadan Hojin〇 SK Senboku Yugen Kaisha

Senko School Farm Tottori Co., Ltd.

Miyazaki Senko Transport Co., Ltd.

NISHIKANTO SENKO LOGI CO.,LTD.

〇 Hokuriku Senko Transport Co., Ltd.
〇 Fuji Senko Transport Co., Ltd.
〇 Daito Senko Apollo Co., Ltd.
〇 Tokai Senko Transport Co., Ltd.
〇 Toyohashi Senko Transport Co., Ltd.
〇 Mie Senko Logistics Co., Ltd.
〇

Senko Medical Logistics Co., Ltd.

〇 Delivery Ace 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.

Prettyporters Co., Ltd.

Senko Creative Management Co., Ltd.

〇〇 Sankyo Logistics Co., Ltd.

Sankyo Butsuryu Niyaku Co., Ltd.

Shiga Senko Transport Co., Ltd.

〇 Kyoto Senko Transport Co., Ltd.
〇 Osaka Senko Transport Co., Ltd.
〇 Tokyo Nohin Daiko West Japan Co., Ltd.
〇 Minami Osaka Senko Transport Co., Ltd.

〇 S-TAFF Co., Ltd.

Ienonaka Company, Ltd.
Senko Logistics (U.S.A.) Inc.

Senko (U.S.A.) Inc.

Affiliated Companies

SENKO LOGISTICS MEXICO S.A. DE C.V.

△ Senko Private REIT investment Company

SK MARINE S.A.
Shenyang Senko Logistics Co., Ltd.

〇

Affiliated Companies

Dalian Tri-Enterprise Logistics Co., Ltd.

Moriyama Hoso Co., Ltd.

Qingdao Senko Logistics Co., Ltd.

Hososhimako Niyaku Shinko Co., Ltd.

Senko Logistics (Shanghai) Co., Ltd.

Mexicana de Paquetería Urgente, S.A. de C.V.
SINOTRANS SENKO INTERNATIONAL COLDLOGISTICS CO., LTD
SMI-SENKO LOGISTICS PTE. LTD.

〇 Hanshin Senko Transport Co., Ltd.

〇 Shanghai Senko International Freight 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 Chugoku Piano transport 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〇 Kyushu Senko Logistics Co., Ltd.
〇 Minami Kyushu Senko Co., Ltd.

〇 Guangzhou Senko Logistics Co., Ltd.
Senko International Logistics (Hong Kong) Ltd.

SENKOSMI Myanmar Co., Ltd.

Senko (Thailand) Co., Ltd.

KO-SENKO Logistics Co., Ltd.

SENKO GLOBAL LOGISTICS (THAILAND) CO., LTD.

Senko Logistics (Thailand) Co., Ltd.

SENKO LOGISTICS DISTRIBUTION (THAILAND) Co., Ltd.

〇 Senko International Logistics Pte. Ltd.
SENKO LOGISTICS VIETNAM COMPANY LIMITEDSENKO DISTRIBUTION SERVICE (VIETNAM) CO., LTD.

SENKO LOGISTICS AUSTRALIA Pty Ltd.
Senko-Lancaster Silkroad Logistics LLP
NH-SENKO Logistics Co., Ltd.

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

6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.

7

4.
Consolidated Financial Statements and Significant Notes Thereto(1) Consolidated balance sheets(Unit: Millions of Yen)
As of March 31, 2016

As of March 31, 2017

AssetsCurrent assets
Cash and deposits

18,477

27,162

Notes and operating accounts receivable

58,107

61,975Merchandise and finished goods

6,967

7,006

3

-

Work in process

200

305

Raw materials and supplies

335

292

Deferred tax assets

2,583

2,826

Other

6,734

9,151

(29)

(21)

93,380108,699

Real estate for sale

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

134,201

124,739

Accumulated depreciation(71,788)(71,319)

Buildings and structures, net

62,41253,420Machinery, equipment and vehicles

35,67037,669

Accumulated depreciation(27,470)(28,650)

Machinery, equipment and vehicles, net

8,200

9,018

Tools, furniture and fixtures

6,493

6,954

Accumulated depreciation(5,108)(5,517)

Tools, furniture and fixtures, net

1,385

1,436

Land

60,48656,700

Leased Assets

6,848

11,534

Accumulated depreciation(4,113)(5,634)

Leased Assets, net

2,734

5,900

Construction in progress

1,504

3,637

136,723

130,114Goodwill

4,038

5,617

Other

3,906

4,086

Total intangible assets

7,945

9,704

Investment securities

11,696

16,452Long-term loans receivable

3,755

3,131

-

2,359

Guarantee deposits

10,572

11,197

Deferred tax assets

2,553

2,050

Other

3,751

3,191

Allowance for doubtful accounts(1,026)(1,025)

Total investments and other assets

31,30237,357

175,971

177,175

Business commencement expenses

108

83

Total deferred assets

108

83

269,461

285,958

Total property, plant and equipment
Intangible assets

Investments and other assets

Net defined benefit asset

Total non-current assets
Deferred assets

Total assets

8

(Unit: Millions of Yen)
As of March 31, 2016

As of March 31, 2017

Liabilities
Current liabilities
Notes and operating accounts payable−trade37,12533,731

Electronically recorded obligations−operating

1,601

6,773

Current portion of bonds

5,000

-

Short-term loans payable

18,38825,631

Lease obligations

1,935

2,793

Income taxes payable

3,219

3,916

Provision for bonuses

3,959

4,228

220

210

Provision for directors’ bonuses

-

96

Other

Provision for loss on disaster

14,196

16,534

Total current liabilities

85,647

93,914Non-current liabilities
Bonds payable

7,000

7,000

Convertible bond-type bonds with subscription rights
to shares

5,037

10,049Long-term loans payable

55,943

42,483

Lease obligations

3,591

6,365

Provision for directors’ retirement benefits

363

276

Provision for special repairs

39

37

Net defined benefit liability

7,621

7,087

Asset retirement obligations

518

817

Other

3,688

3,834

Total non-current liabilities

83,804

77,953

169,451

171,868

Capital stock

24,011

26,528

Capital surplus

22,83825,411Retained earnings

42,84548,654

Treasury shares

(942)

(657)

88,752

99,937

1,448

1,391

(91)

1

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

427

250

Remeasurements of defined benefit plans(2,820)(1,293)

Total accumulated other comprehensive income(1,036)

350

359

396

Non-controlling interests

11,933

13,406

Total net assets

100,009

114,090

269,461

285,958

Subscription rights to shares

Total liabilities and net assets

9(2) Consolidated statements of (comprehensive) income(Consolidated statements of income)(Unit: Millions of Yen)
Fiscal year ended
March 31, 2016

Fiscal year ended
March 31, 2017

(April 1, 2015–March 31, 2016)(April 1, 2016–March 31, 2017)

Operating revenue

434,000

455,435

Operating cost

386,321405,757

Operating gross profit

47,67949,677

Selling, general and administrative expenses

30,181

32,595

Operating profit

17,497

17,081

Interest income

172

101

Dividend income

120

130

Share of profit of entities accounted for using
equity method

109

272

Other

943

1,237

1,345

1,742

1,101

927

562

595

1,663

1,522

17,17817,301

State subsidy

-

1,252

Gain on sales of investment securities-

536

Gain on sales of non-current assets

301

283

Compensation income for expropriation99-

Total extraordinary income

400

2,072

-

1,225

Loss on valuation of shares of subsidiaries andassociates

104

574

Expenses related to commemorative works forcentennial anniversary

76

448

-

252

181

130

-

76

Provision of allowance for doubtful accounts for
subsidiaries and associates

400

62

Loss on sales of non-current assets

53

31

Loss on cancellation of leases

142-

Compensation for damage

97-

Special retirement expenses

38-

Cancel penalty

35-

Loss on sales of shares of subsidiaries andassociates

32

-

1,162

2,801

Profit before income taxes

16,416

16,572

Income taxes−current

5,527

5,930

Income taxes−deferred

638

(148)

Total income taxes

6,166

5,781

Profit10,25010,790

Profit attributable to non-controlling interests

1,707

1,839

Profit attributable to owners of parent

8,542

8,950

Non-operating income

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

Extraordinary losses
Loss on reduction of non-current assets

Loss on disaster
Loss on retirement of non-current assets
Litigation expenses

Total extraordinary losses

10(Consolidated statements of comprehensive income)(Unit: Millions of Yen)
Fiscal year ended
March 31, 2016

Fiscal year ended
March 31, 2017

(April 1, 2015–March 31, 2016)(April 1, 2016–March 31, 2017)

Profit10,25010,790

Valuation difference on available-for-sale securities

(353)

52

Deferred gains or losses on hedges

(94)

97

Other comprehensive income

(152)

(235)

Remeasurements of defined benefit plans, net of tax

Foreign currency translation adjustment(1,019)1,544

Total other comprehensive income(1,620)

1,458

8,630

12,249Comprehensive income attributable to owners ofparent7,087

10,337

Comprehensive income attributable tonon-controlling interests

1,542

1,912

Comprehensive income
Comprehensive income attributable to11

(3) Consolidated statements of changes in equity
Fiscal year ended March 31, 2016 (April 1, 2015 – March 31, 2016)(Unit: Millions of Yen)
Shareholders’ equity
Capital stock

Capital surplus

23,09821,914

913

913

Balance at the beginning of current
periodRetainedearnings

Treasury shares

Total
shareholders’equity(1,183)80,50636,676

Changes of items during period
Issuance of new shares

1,826

Dividends of surplus(2,571)(2,571)

Profit attributable to owners ofparent

8,542

8,542

Purchases of treasury shares

(9)

(9)

Disposal of treasury shares

250

250

Change of scope of consolidation

197

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

197

10

10
-

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

913

923

6,168

240

8,245

24,011

22,83842,845(942)

88,752

Accumulated other comprehensive income

Balance at the beginning of current
periodValuationdifferencesonavailable-forsecurities

Deferred
gains orlosses onhedgesForeigncurrencytranslation
adjustment

Remeasurements ofdefinedbenefit plans

1,819

(4)

543

(1,839)

Total
accumulated
othercomprehensive
income519

Subscription
rights toshares

Noncontrollinginterests

Total net
assets288

11,42892,743

Changes of items during period
Issuance of new shares

1,826

Dividends of surplus(2,571)

Profit attributable to owners ofparent8,542

Purchases of treasury shares(9)

Disposal of treasury shares

250

Change of scope of consolidation

197

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

10
(371)

(87)

(116)

(980)

(1,555)

71

504

(979)

Total changes of items during period

(371)

(87)

(116)

(980)

(1,555)

71

504

7,265

Balance at end of current period

1,448

(91)

427

(2,820)(1,036)359

11,933100,00912

Fiscal year ended March 31, 2017 (April 1, 2016 – March 31, 2017)(Unit: Millions of Yen)
Shareholders’ equity

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

Capital stock

Capital surplus

24,011

22,838Retainedearnings

Treasury shares

Total
shareholders’equity(942)

88,752

42,84518

24,011

22,838

2,516

2,516

42,86318(942)

88,770Changes 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
incomeSubscription
rights toshares

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 ofparent8,950

Purchases of treasury shares(0)

Disposal of treasury shares

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

56
(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

(4) Consolidated statements of cash flows(Unit: Millions of Yen)
Fiscal year ended
March 31, 2016

Fiscal year ended
March 31, 2017

(April 1, 2015 – March 31, 2016)(April 1, 2016 – March 31, 2017)

Profit before income taxes

16,416

16,572

Depreciation

9,925

10,216-(536)

Loss on valuation of shares of subsidiaries and associates

104

574

Loss (gain) on sales of shares of subsidiaries and associates

32-

Loss (gain) on sales of non-current assets

(247)

(251)

Loss on retirement of non-current assets

181

130

Loss on reduction of non-current assets

-

1,225

State subsidy-(1,252)

Decrease (increase) in net defined benefit asset

-

(419)

Increase (decrease) in net defined benefit liability(1,760)(243)

Cash flows from operating activities

Loss (gain) on sales of investment securities

58

143

Interest and dividend income

Increase (decrease) in provision for bonuses

(292)

(232)

Interest expenses

1,101

927

Decrease (increase) in notes and accounts receivable-trade(1,748)(1,695)Decrease (increase) in inventories

(405)

(66)

Increase (decrease) in notes and accounts payable-trade

1,694

1,071

Increase (decrease) in accrued consumption taxes(1,779)

366

Other

(497)

242

Subtotal

22,782

26,772

225

389

Interest expenses paid

(1,095)(953)

Income taxes paid

(5,762)(5,360)Net cash provided by (used in) operating activities

16,14920,848Purchase of property, plant and equipment(17,994)(16,253)

Proceeds from sales of property, plant and equipment

21,72817,883

Interest and dividend income received

Cash flows from investing activities

Purchase of investment securities

(119)

(60)

Proceeds from sales of investment securities
Purchase of shares of subsidiaries resulting in change in scope of
consolidation
Payments for sales of shares of subsidiaries resulting in change inscope of consolidation

524

637

-

(325)

(96)

-

Purchase of shares of subsidiaries and associates(4,578)(5,282)

Other(1,751)(278)

Net cash provided by (used in) investing activities(2,288)(3,678)(12,800)

252

Proceeds from long-term loans payable

5,780

3,150

Repayment of long-term loans payable(9,644)(10,871)

Repayments of finance lease obligations(2,116)(2,801)(20)(5,000)

Proceeds from issuance of bonds with subscription rights to shares-

10,050Purchase of treasury shares

(9)

(0)

250

406

(2,571)(3,173)

(360)

(638)

(21,492)(8,626)

(79)

(116)

Net increase (decrease) in cash and cash equivalents(7,710)8,425Cash and cash equivalents at beginning of period

25,476

17,765-

5

17,76526,197

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

Redemption of bonds

Proceeds from sales of treasury shares
Cash dividends paid
Other
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents

Increase in cash and cash equivalents from newly consolidated
subsidiary
Cash and cash equivalents at end of period14