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 Third Quarter of the Fiscal Year Ending March 31, 2017
[Japan GAAP]
January 30, 2017
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: Executive Officer, Public Relations
Name: Noburoh Sasaki
Tel. (06) 6440-5155
Scheduled Date of Issue of Financial Report:
February 14, 2017
Scheduled Date of Dividend Paid:−
None
Supplemental Information Materials:
None
Scheduled Date of Quarterly Information Meeting:
1. Consolidated Operating Results for the Nine Months Ended December 31, 2016
(1) Consolidated Operating Results
Operating revenue
Nine months ended December 31, 2016
Nine months ended December 31, 2015

Million yen
343,759
328,256

%
4.7
11.2

Note: Amounts less than ¥1 million have been rounded down.
Profit attributable toOperating income
Ordinary income
owners of parent
Million yen%
Million yen%
Million yen%
14,271
3.6
14,435
7.5
7,641
3.3
13,76931.7
13,424
33.0
7,396
31.4

(Note) Comprehensive income
Nine months ended December 31, 2016: ¥9,574 million (8.8%)
Profitper share

Nine months ended December 31, 2015: ¥8,802 million (21.5%)
Diluted profit
per share

Yen
53.34
52.51

Yen
50.21
48.80

Total assets
Million yen
279,469
269,461

Net assets
Million yen
107,860
100,009

Nine months ended December 31, 2016
Nine months ended December 31, 2015
(2) Consolidated Financial Position

As of December 31, 2016
As of March 31, 2016
(Reference) Shareholders’ equity:
As of December 31, 2016: ¥94,160 million

Equity ratio
%
33.7
32.6

Net assets per share
Yen
646.82613.71

As of March 31, 2016: ¥87,715 million

2. Dividends
June 30
Yen

September 30
Yen
9.00
11.00

−
Fiscal year ended March 31, 2016−
Fiscal year ending March 31, 2017
Fiscal year ending March 31, 2017
(Forecast)(Note) Change in the estimation of dividend for the fiscal year in this period: None

Annual dividend
December 31
Yen−March 31

Total

Yen
11.00

Yen
20.00

11.00

22.00

−
−

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 business3. Forecast of Consolidated Operating Results for the Fiscal Year Ending March 31, 2017 (From April 1, 2016 to March 31, 2017)
Operating revenue
Million yen%
Fiscal year ending March 2017
460,000
6.0(Note) Change in the forecast made in this period: None

Operating income
Million yen
18,400%
5.2(Percentage figures represent year-on-year changes)
Profit attributable toProfitOrdinary income
owners of parent
per share
Million yen% Million yen%
Yen
18,000
4.8
9,500
11.2
66.39

Notes(1) Changes in significant subsidiaries during the period (Changes in specified subsidiaries associated with change in scope of
consolidation): None
(2) Use of accounting methods specifically for the preparation of the quarterly consolidated financial statements: None
(3) 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
(4) Shares outstanding (Common shares)(a) Shares outstanding (including treasury shares)
As of December 31, 2016:

146,927,420 shares

As of March 31, 2016:

144,834,771 shares

1,353,463 shares

As of March 31, 2016:

1,907,546 shares(b) Treasury shares
As of December 31, 2016:(c) Average number of shares (quarterly consolidated cumulative period)
Nine months ended December 31, 2016: 143,245,057 shares

Nine months ended December 31, 2015:

140,847,115 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 December 31, 2016: 946,800
shares; as of March 31, 2016: 1,449,000 shares.)
Information concerning quarterly review procedure
This quarterly financial report is not subject to the quarterly review procedure prescribed by the Financial Instruments and Exchange Act.
The review procedure prescribed by the Financial Instruments and Exchange Act for the quarterly consolidated financial statements had
not been completed when this quarterly 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 the fiscal year ending March 31, 2017” on page 3.

Index to accompanying materials

1．Results of Operations and Financial Condition ........................................................................................................................................ 2(1) Results of operations ......................................................................................................................................................................... 2(2) Financial condition ............................................................................................................................................................................. 3(3) Forecast for the fiscal year ending March 31, 2017 ......................................................................................................................... 3
2．Other Information ...................................................................................................................................................................................... 4(1) Changes in significant subsidiaries during the period ........................................................................................................................ 4(2) Use of accounting methods specifically for the preparation of the quarterly consolidated financial statements .............................. 4(3) Changes in accounting principles and estimates, and retrospective restatement ............................................................................ 4(4) Additional Information .......................................................................................................................................................................... 4
3．Consolidated Financial Statements ......................................................................................................................................................... 5(1) Consolidated balance sheets .............................................................................................................................................................. 5(2) Consolidated statements of (comprehensive) income ....................................................................................................................... 7
Consolidated statements of income
For the nine months ended December 31, 2015 and 2016 ............................................................................................................ 7
Consolidated statements of comprehensive income
For the nine months ended December 31, 2015 and 2016 ............................................................................................................ 81

1.

Results of Operations and Financial Condition(1) Results of operations
In the nine-month period of the fiscal year ending March 31, 2017 (April 1, 2016 to December 31, 2016), the Japanese economy emerged
from a stagnant phase having shown signs of recovery amid ongoing improvement in the income and employment environment,
combined with weakening of the yen and rising share prices ensuing since the fall season. However, business conditions remained at astandstill largely due to factors such as the economic slowdown overseas and 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.
The following provides an outline of our main activities in the third quarter of the current fiscal year.
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, and have accordingly been promoting business expansion by boosting cooperation with each of the Senko
Group companies in charge of the fashion logistics businesses.
With regard to our large-scale distribution facilities, we commenced operations of 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, and the Kazo
PD Center (Kazo City, Saitama Prefecture) which engages in operations for the Tokyo metropolitan area, in May, August and November,respectively. Moreover, in January 2017 we opened the Hino Distribution Center (Hino City, Tokyo) and started operations for major drug
stores.
Outside Japan, we expanded the Kentucky Logistics Center (Kentucky, the United States) in August, extending it in terms of both scale
and function in part by establishing a new freezer warehouse at the facility. We also started operation at our first Three-Temperature Zone
Logistics Center in Myanmar in October. In addition, we have been engaging in initiatives geared to business expansion which haveincluded forging ahead with construction of the second distribution center at Busan New Port in South Korea aiming at commencement ofoperations in October 2017, and also forming a business alliance with a Chinese major textile company, with plans to launch logistics
operations for apparel in Shanghai, China from January 2018.
Meanwhile, regarding initiatives in the new business domain, we established a subsidiary in August, advancing into the real estatebusiness. In October, we officially launched a nursing care business by making Keihanna helper station Co., Ltd., which operates anursing care business, into a Senko Group subsidiary. Moreover, we entered the lifestyle support services business upon making
housekeeping services provider Ienonaka Company, Ltd. a subsidiary in January 2017.
To upgrade our operating system, we have been promoting a modal shift to reduce the environmental impact and resolve the shortage ofdrivers, while boosting the use of our own trucks. Moreover, our driving school grounds for large vehicles at the Company’s traffic safety
training facility Crefeel Koto (Higashiomi City, Shiga Prefecture) gained approval to function as an authorized driving school in October,which will help us attract and train drivers going forward.
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. Funds raised have been utilized for the construction of new distribution centersand other purposes.
Furthermore, in October we established SENKO UNIVERSITY, an in-house university for raising the sophistication and specialization oftraining content for human resources and developing strategic human resources, and we have been making progress in appointing
women to managerial positions with the aim of promoting their active participation in the workplace.
The nine-month-period performance was as follows.
(Unit: Millions of yen)

Operating revenue
Operating income
Ordinary income
Profit attributable to owners ofparentNine months ended
December 31, 2015
328,256

Nine months ended
December 31, 2016
343,759

13,76913,424
7,396

Change%15,503

4.7

14,271
14,435

501
1,010

3.6
7.5

7,641

244

3.3

Consolidated operating revenue for the nine-month period ended December 31, 2016 of the current fiscal year increased 4.7% year on
year to ¥343,759 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 income grew to ¥14,271 million, up 3.6% year on year, while consolidated ordinary income rose2

to ¥14,435 million, up 7.5% year on year, due primarily to the sales expansion, revision of freight charges and lower fuel prices, despite adecline in freight volumes from existing customers. Profit attributable to owners of parent increased 3.3% to ¥7,641 million.
The nine-month-period operating revenue by segment was as follows.
Distribution
Operating revenue grew 5.5% year on year to ¥240,241 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 2.7% year on year to ¥100,039 million in this segment. This reflected the result of an increase in sales volume ofexisting products and sales expansion to new customers, despite a decline in sales caused by a drop in fuel prices in the petroleum
marketing business.
OthersOperating revenue rose 11.1% year on year to ¥3,478 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.
(2) Financial condition
Assets, liabilities and net assets
Total assets
Total assets as of December 31, 2016 were ¥279,469 million, ¥10,008 million higher than at the end of the previous fiscal year.
Current assets amounted to ¥106,435 million, up ¥13,055 million from the end of the previous fiscal year. This mainly reflected increasesof ¥10,496 million in notes and operating accounts receivable and ¥961 million in merchandise and finished goods.
Non-current assets totaled ¥172,943 million, down ¥3,027 million from the end of the previous fiscal year. This was primarily due to adecrease in property, plant and equipment of ¥8,429 million largely as a result of transfers of seven distribution centers to the private REIT,
despite increases in intangible assets of ¥1,861 million and investments and other assets of ¥3,539 million, respectively.
Liabilities
Liabilities as of December 31, 2016 increased ¥2,156 million from the end of the previous fiscal year to ¥171,608 million.
Current liabilities totaled ¥93,515 million, up ¥7,868 million from the end of the previous fiscal year. This was mainly due to increases of¥6,007 million in electronically recorded obligations−operating and ¥5,511 million in short-term loans payable, despite a decrease of¥5,000 million in current portion of bonds.
Non-current liabilities totaled ¥78,092 million, down ¥5,711 million from the end of the previous fiscal year. This was primarily due to adecrease in long-term loans payable of ¥6,664 million.
Net assets
Net assets as of December 31, 2016 rose ¥7,851 million from the end of the previous fiscal year to ¥107,860 million. This was mainly
attributable to increases of ¥656 million in capital stock primarily as a result of the conversion to shares of convertible bond-type bonds
with subscription rights to shares, ¥707 million in capital surplus, ¥4,481 million in retained earnings and ¥1,370 million in non-controllinginterests. The equity ratio as of December 31, 2016 increased by 1.1 percentage points to 33.7% from the end of the previous fiscal year.
(3) Forecast for the fiscal year ending March 31, 2017
The Japanese economy is expected to recover at a moderate pace amid improvement in consumer spending and other positive factors,
yet business conditions remain unpredictable given mounting uncertainties regarding the overseas economic outlook, amid the prospectof shifts in U.S. government policy and other such developments.
In the logistics industry, the challenging environment is expected to continue given concerns of rising labor costs due to the shortage ofdrivers and rising fuel prices, amid a likely scenario of decreasing freight volumes.
In this environment, the Senko Group will continue trying to enhance its competitiveness, expand its business areas, and upgrade its
operating system.
As of December 31, 2016, operating results were largely in line with forecasts, and no revisions have been made to the forecast ofoperating results for the fiscal year ending March 31, 2017 announced on October 31, 2016.

3

2.

Other Information(1) Changes in significant subsidiaries during the period
None(2) Use of accounting methods specifically for the preparation of the quarterly consolidated financial statements
None(3) Changes in accounting principles and estimates, and retrospective restatement
Changes in accounting principles(Application of Practical Solution on a Change in Depreciation Method Due to Tax Reform 2016)
Effective from the first quarter of the fiscal year ending March 31, 2017, certain consolidated subsidiaries of the Company began applying
the Practical Solution on a Change in Depreciation Method Due to Tax Reform 2016 (Accounting Standards Board of Japan’s [ASBJ]
Practical Issues Task Force [PITF] No. 32 of June 17, 2016) as a result of revisions to Japan’s Corporate Tax Act. The solution was
adopted to change from the declining-balance method to the straight-line method for depreciation of facilities attached to buildings or
structures acquired on and after April 1, 2016.
The above change had only a negligible effect on the profit and loss.
Changes in accounting estimates(Change in the amortization period for actuarial gains and losses from accounting treatments of defined benefit plans)With regard to actuarial gains and losses from accounting treatments of defined benefit plans that previously have been amortized over acertain period (mainly 13 years), which is within the estimated average remaining years of service of the Companies’ employees, theCompany has shortened the period to mainly 10 years effective from the first quarter of the fiscal year ending March 31, 2017, as thecurrent estimated average remaining years of service fell short of the previous amortization period of 13 years.
In line with this change, when compared with the figures calculated for the previous amortization period, operating income, ordinary
income and profit before income taxes for the nine months ended December 31, 2016 decreased by ¥217 million for each.
(4) Additional information(Application of Revised Implementation Guidance on Recoverability of Deferred Tax Assets)
Effective from the first quarter of the fiscal year ending March 31, 2017, the Company has adopted the Revised Implementation Guidanceon Recoverability of Deferred Tax Assets (ASBJ Guidance No. 26 of March 28, 2016).

4

3.

Consolidated Financial Statements(1) Consolidated balance sheets(Unit: Millions of Yen)
As of March 31, 2016

As of December 31, 2016

AssetsCurrent assets
Cash and deposits

18,477

18,793

Notes and operating accounts receivable

58,10768,604Merchandise and finished goods

6,967

7,929

Real estate for sale

3-

Work in process

200

424

Raw materials and supplies

335

300

9,317

10,409(29)(26)

93,380106,435

Buildings and structures, net

62,412

54,826

Land

60,48655,918Other, net

13,824

17,549Total property, plant and equipment

136,723

128,294

Goodwill

4,038

5,711

Other

3,906

4,094

Total intangible assets

7,945

9,806

Investment securities

11,696

15,633

Guarantee deposits

10,572

11,249Deferred tax assets

2,553

2,348

Other

7,506

6,579

Allowance for doubtful accounts(1,026)(967)

Total investments and other assets

31,302

34,842

175,971

172,943

Business commencement expenses

108

89

Total deferred assets

108

89

269,461

279,469

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

Intangible assets

Investments and other assets

Total non-current assets
Deferred assets

Total assets

5

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

As of December 31, 2016

Liabilities
Current liabilities
Notes and operating accounts payable−trade37,12537,548

Electronically recorded obligations−operating

1,601

7,609

Current portion of bonds

5,000

-

Short-term loans payable

18,38823,900

Income taxes payable

3,219

1,800

Provision for bonuses

3,959

2,466

220

155

Other

16,131

20,036

Total current liabilities

85,64793,515

Bonds payable

7,000

7,000

Convertible bond-type bonds with subscription rights
to shares

5,037

3,721

Long-term loans payable

55,94349,279Provision for directors’ retirement benefits

363

271

Provision for special repairs

39

33

Net defined benefit liability

7,621

7,619

Asset retirement obligations

518

770

Other

7,279

9,396

Total non-current liabilities

83,80478,092

169,451

171,608

Capital stock

24,011

24,667

Capital surplus

22,83823,545Retained earnings

42,84547,327

Treasury shares

(942)

(693)

88,752

94,846

1,448

1,762

Deferred gains or losses on hedges

(91)

89

Foreign currency translation adjustment

427

42

Remeasurements of defined benefit plans(2,820)(2,579)Total accumulated other comprehensive income(1,036)

(685)

359

396

Non-controlling interests

11,933

13,303

Total net assets

100,009

107,860

269,461

279,469

Provision for directors’ bonuses

Non-current liabilities

Total liabilities
Net assets
Shareholders’ equity

Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Subscription rights to shares

Liabilities and net assets

6

(2) Consolidated statements of (comprehensive) income(Consolidated statements of income)(For the nine months ended December 31, 2015 and 2016)(Unit: Millions of Yen)
Nine months ended
December 31, 2015

Nine months ended
December 31, 2016

(April 1, 2015–December 31, 2015)(April 1, 2016–December 31, 2016)

Operating revenue

328,256

343,759

Operating cost

291,937

305,328

Operating gross profit

36,31838,431

Selling, general and administrative expenses

22,54824,159Operating income

13,76914,271

137

76

Dividend income

106

121

Other

623

986

Total non-operating income

866

1,183

Interest expenses

837

710

Other

375

309

1,212

1,020

13,424

14,435Gain on sales of non-current assets

286

212

Total extraordinary income

286

212

47

306

-

128

Non-operating income
Interest income

Non-operating expenses

Total non-operating expenses
Ordinary income
Extraordinary income

Extraordinary losses
Expenses related to commemorative works forcentennial anniversary
Loss on disaster
Loss on retirement of non-current assets

96

60

-

38

Loss on cancellation of leases

126-

Loss on sales of non-current assets

54-

Cancel penalty

35-

Loss on sales of shares of subsidiaries andassociates

32-

Total extraordinary losses

394

534

Profit before income taxes

13,316

14,113

Income taxes−current

3,105

3,690

Income taxes−deferred

1,403

1,195

Total income taxes

4,508

4,885

Profit

8,808

9,228

Profit attributable to non-controlling interests

1,412

1,587

Profit attributable to owners of parent

7,396

7,641

Litigation expenses

7

(Consolidated statements of comprehensive income)(For the nine months ended December 31, 2015 and 2016)(Unit: Millions of Yen)
Nine months ended
December 31, 2015

Nine months ended
December 31, 2016

(April 1, 2015–December 31, 2015)(April 1, 2016–December 31, 2016)

Profit

8,808

9,228

Valuation difference on available-for-sale securities

(76)

413

Deferred gains or losses on hedges

(34)

191

Foreign currency translation adjustment

(68)

(504)

Remeasurements of defined benefit plans, net of tax

174

245

(6)

346

8,802

9,574

Comprehensive income attributable to owners ofparent

7,441

7,991

Comprehensive income attributable tonon-controlling interests

1,361

1,583

Other comprehensive income

Total other comprehensive income
Comprehensive income
Comprehensive income attributable to8