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

SENKO Co., Ltd.

Summary of Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2017
[Japan GAAP]
August 3, 2016
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:
August 12, 2016
Scheduled Date of Dividend Paid: —None
Supplemental Information Materials:
None
Scheduled Date of Quarterly Information Meeting:
1. Consolidated Operating Results for the Three Months Ended June 30, 2016
(1) Consolidated Operating Results
Operating revenue
Million yen
110,287
106,370

Three months ended June 30, 2016
Three months ended June 30, 2015
(Note) Comprehensive income

%
3.7
19.4

Three months ended June 30, 2016: ¥2,163 million (-30.5%)
Profitper share

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
%
4,156
8.2
4,048
7.8
2,096
7.4
3,843
60.8
3,756
61.9
1,952
38.6
Three months ended June 30, 2015: ¥3,110 million (98.8 %)Diluted profit
per share

Yen
14.66
14.00

Yen
13.79
12.91

Total assets
Million yen
277,605
269,461

Net assets
Million yen
100,554
100,009

Three months ended June 30, 2016
Three months ended June 30, 2015
(2) Consolidated Financial Position

As of June 30, 2016
As of March 31, 2016
(Reference) Shareholders’ equity:
As of June 30, 2016: ¥87,976 million

Equity ratio
%
31.7
32.6

Net assets per shareYen
614.83613.71

As of March 31, 2016: ¥87,715 million

2. Dividends
June 30
Yen

September 30
Yen
9.00

−
Fiscal year ended March 31, 2016−
Fiscal year ending March 31, 2017
Fiscal year ending March 31, 2017
11.00
(Forecast)(Note) Change in the estimation of dividend for the fiscal year in this period: None

Annual dividend
December 31
YenMarch 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%
First half ending September 2016
225,000
4.5
Fiscal year ending March 2017
460,000
6.0(Note) Change in the forecast made in this period: None

Operating income
Million yen
8,400
18,100%
1.6
3.4(Percentage figures represent year-on-year changes)
Profit attributable toProfitOrdinary income
owners of parent
per share
Million yen% Million yen
%
Yen
8,100
2.4
4,100
(5.2)
28.69
17,700
3.0
9,400
10.0
65.77

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 June 30, 2016:

144,834,771 shares

As of March 31, 2016:

144,834,771 shares

1,744,904 shares

As of March 31, 2016:

1,907,546 shares(b) Treasury shares
As of June 30, 2016:(c) Average number of shares (quarterly consolidated cumulative period)
Three months ended June 30, 2016:

142,979,415 shares

Three months ended June 30, 2015:

139,454,050 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 June 30, 2016: 1,304,300
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 Law 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 six-month period and the full-term of 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 six-month period and the full-term of the fiscal year ending March 31, 2017 ....................................................... 3
2．Other Information ...................................................................................................................................................................................... 3(1) Changes in significant subsidiaries ................................................................................................................................................... 3(2) Use of accounting methods specifically for the preparation of the quarterly consolidated financial statements .............................. 3(3) Changes in accounting principles and estimates, and retrospective restatement ............................................................................ 3(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 three months ended June 30, 2015 and 2016 .................................................................................................................... 7
Consolidated statements of comprehensive income
For the three months ended June 30, 2015 and 2016 ................................................................................................................... 81

1.

Results of Operations and Financial Condition(1) Results of operations
In the first three-month period of the fiscal year ending March 31, 2017 (April 1, 2016 to June 30, 2016; hereinafter referred to as the firstquarter of the current fiscal year), the economic recovery in Japan remained subdued due in part to the stagnation in exports andproduction reflecting economic slowdown overseas, progressive appreciation of the yen and stagnant consumer spending.
In the logistics industry, the business environment remained challenging as the increase in fuel prices as well as higher personnel
expenses and outsourcing costs caused by labor shortages continued amid slowing freight volume.
In this environment, the Senko Group has strived to enhance its competitiveness, expand its business areas, and upgrade its operating
system as the priority policies for the fiscal year ending March 31, 2017.
The following provides an outline of our main activities in the first quarter of the current fiscal year.
In April, we acquired all the shares in ACROSS TRANSPORT CO., LTD., a department store delivery agent involved in the fashion
logistics business, welcoming it into the Senko Group. Going forward, we will promote business expansion by boosting cooperation witheach of the group companies in charge of Senko’s fashion logistics businesses as well as promoting joint distribution and mutual use ofbusiness bases and human resources.
In May, we opened the Narita Fashion Logistics Center II (Tomisato City, Chiba Prefecture) near Narita Airport. The center has a bonded
storage facility for handling imported brands and is involved in storage and delivery of fashion products as well as inspection anddistribution processing.
Transactions with major customers also expanded. We launched logistics operations for a drugstore in the Kansai region from January to
March 2016.
Furthermore, the construction of new distribution centers is underway in the Saitama area and the Chubu region, aimed at the expansionof logistics operations mainly for customers in the distribution sector.
Outside Japan, NH-SENKO Logistics Co., Ltd., a joint venture of the Company, Niigata Unyu Co., Ltd. and HWA SUNG EXPRESS CO.,LTD., a South Korean company, are promoting preparation for the opening of a new distribution center in the Busan New Port in South
Korea, an international hub port. In Shanghai, China, a joint venture of the Company, Runtec Corporation and Sinotrans Air
Transportation Development Co., Ltd. (Sinotrans Air) are working to establish a Three-Temperature Zone Logistics Center with the aim ofdeveloping a domestic cold and freezer logistics network in China.
To upgrade our operating system, we have promoted a modal shift aimed at reducing the environmental impact and resolving theshortage of drivers. In the first quarter of the current fiscal year, we changed the method of long-distance transportation for beverage
manufacturers and homebuilders from trucks to railways forwarding and maritime transports. Furthermore, in June we received the
Logistics Environmental Conservation Award from the Japan Association for Logistics and Transport in recognition of our initiatives toswitch the means of transportation for alcohol beverages from the Kyushu region to elsewhere in Japan from trucks to railways
forwarding.
The three-month-period performance was as follows.
(Unit: Millions of yen)

Operating revenue
Operating income
Ordinary income
Profit attributable to owners ofparentThree months ended
June 30, 2015
106,370

Three months ended
June 30, 2016
110,287

3,843
3,756
1,952

Change

%
3,916

3.7

4,156
4,048

313
291

8.2
7.8

2,096

143

7.4

Consolidated operating revenue for the first quarter of the current fiscal year increased 3.7% year on year to ¥110,287 million. This result
reflected the aggressive expansion of sales and the effect of ACROSS TRANSPORT CO., LTD. becoming a consolidated subsidiary of
the Company in April 2016.
On the profit front, consolidated operating income grew to ¥4,156 million, up 8.2% year on year, while consolidated ordinary income roseto ¥4,048 million, up 7.8% year on year, due primarily to the sales expansion and lower fuel prices compared to the same quarter of theprevious fiscal year, despite a decline in freight volumes from existing customers and other factors. Profit attributable to owners of parent
increased 7.4% to ¥2,096 million.

2

The three-month-period operating revenue by segment was as follows.
Distribution
Operating revenue for the first quarter of the current fiscal year grew 4.1% year on year to ¥77,345 million in this segment. This was
mainly attributable to a rise in operating revenue resulting from M&A and expansion of sales to new and existing customers, including amajor drugstore from which we received a new order in the previous fiscal year.
Trading & commerce
Operating revenue for the first quarter of the current fiscal year grew 2.4% year on year to ¥31,837 million in this segment. This primarilyreflected the result of an increase in sales volume of existing 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 for the first quarter of the current fiscal year rose 13.8% year on year to ¥1,104 million in this segment. This was
mainly attributable to the growth of sales in the data processing 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 June 30, 2016 were ¥277,605 million, ¥8,144 million higher than at the end of the previous fiscal year. Current assets
amounted to ¥97,371 million, up ¥3,991 million from the end of the previous fiscal year. This mainly reflected an increase of ¥3,937 million
in cash and deposits despite a decrease of ¥1,342 million in notes and operating accounts receivable. Non-current assets totaled¥180,124 million, up ¥4,152 million from the end of the previous fiscal year. This was primarily due to increases in property, plant andequipment of ¥1,625 million and in intangible assets of ¥2,178 million, respectively.
Liabilities
Liabilities as of June 30, 2016 increased ¥7,599 million from the end of the previous fiscal year to ¥177,050 million. Current liabilities
totaled ¥94,943 million, up ¥9,296 million from the end of the previous fiscal year. This was mainly due to an increase of ¥11,038 million in
short-term loans payable. Non-current liabilities totaled ¥82,107 million, down ¥1,697 million from the end of the previous fiscal year. Thiswas primarily due to a decrease in long-term loans payable of ¥2,890 million.
Net assets
Net assets as of June 30, 2016 rose ¥544 million from the end of the previous fiscal year to ¥100,554 million. This was mainly attributable
to an increase of ¥524 million in retained earnings. The equity ratio as of June 30, 2016 was 31.7%.
(3) Forecast for the six-month period and the full-term of the fiscal year ending March 31, 2017
Uncertainty in the Japanese economy is expected to remain, due in part to concerns about global economic downturn as a result ofissues pertaining to the United Kingdom’s decision to withdraw from the European Union and other factors, the stagnation in exports andproduction and weak consumer spending.
In the logistics industry, the challenging environment is expected to continue, amid a decline in freight volume and labor shortages inhuman resources, including drivers and expected increases in various costs.
In this environment, the Senko Group will continue trying to enhance its competitiveness, expand its business areas, and upgrade its
operating system.
There is no revision to the forecast of operating results for the six-month period and the full-term of the fiscal year ending March 31, 2017
announced on May 13, 2016.

2.

Other Information(1) Changes in significant subsidiaries
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 applying3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 first quarter of the current fiscal year decreased by ¥72 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 June 30, 2016

AssetsCurrent assets
Cash and deposits

18,47722,415

Notes and operating accounts receivable

58,10756,764Merchandise and finished goods

6,967

7,242

Real estate for sale

3-

Work in process

200

281

Raw materials and supplies

335

339

9,317

10,349(29)(22)

93,38097,371

Buildings and structures, net

62,412

61,799Land

60,486

61,599Other, net

13,824

14,949Total property, plant and equipment

136,723

138,349

Goodwill

4,038

5,886

Other

3,906

4,237

Total intangible assets

7,945

10,123

Guarantee deposits

10,572

10,926

Deferred tax assets

2,553

2,691

Other

19,20319,061

Allowance for doubtful accounts

ሺ1,026)

ሺ1,028)

Total investments and other assets

31,302

31,651

175,971

180,124

Business commencement expenses

108

109

Total deferred assets

108

109

269,461

277,605

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 June 30, 2016

Liabilities
Current liabilities
Notes and operating accounts payable−trade37,12531,422

Electronically recorded obligations−operating

1,601

6,634

Current portion of bonds

5,000

5,000

Short-term loans payable

18,38829,426

Income taxes payable

3,219

1,137

Provision for bonuses

3,959

3,222

220

56

Other

16,131

18,042

Total current liabilities

85,647

94,943

Bonds payable

7,000

7,000

Convertible bond-type bonds with subscription rights
to shares

5,037

5,036

Long-term loans payable

55,94353,053

Provision for directors’ retirement benefits

363

312

Provision for special repairs

39

42

Net defined benefit liability

7,621

7,706

Asset retirement obligations

518

754

Other

7,279

8,201

Total non-current liabilities

83,804

82,107

169,451

177,050

Capital stock

24,011

24,011

Capital surplus

22,83822,861Retained earnings

42,84543,370Treasury shares

(942)

(871)

88,752

89,371

1,448

1,229

Deferred gains or losses on hedges

(91)

(193)

Foreign currency translation adjustment

427

318

Remeasurements of defined benefit plans(2,820)(2,750)Total accumulated other comprehensive income

ሺ1,036)(1,395)359

359

Non-controlling interests

11,933

12,218

Total net assets

100,009

100,554

269,461

277,605

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 three months ended June 30, 2015 and 2016)(Unit: Millions of Yen)
Three months ended
June 30, 2015

Three months ended
June 30, 2016

(April 1, 2015–June 30, 2015)(April 1, 2016–June 30, 2016)

Operating revenue

106,370

110,287

Operating cost

95,01398,031

Operating gross profit

11,357

12,256

Selling, general and administrative expenses

7,514

8,099

Operating income

3,843

4,156

Interest income

45

25

Dividend income

70

70

Other

237

269

Total non-operating income

352

364

Interest expenses

294

243

Other

144

229

Total non-operating expenses

438

473

3,756

4,048

Expenses related to commemorative works forcentennial anniversary－

68

Loss on disaster－46

Total extraordinary losses

－

114

3,756

3,933

Income taxes−current

760

937

Income taxes−deferred

603

445

Total income taxes

1,363

1,382

Profit

2,393

2,550

440

454

1,952

2,096

Non-operating income

Non-operating expenses

Ordinary income
Extraordinary losses

Profit before income taxes

Profit attributable to non-controlling interests
Profit attributable to owners of parent

7

(Consolidated statements of comprehensive income)(For the three months ended June 30, 2015 and 2016)(Unit: Millions of Yen)
Three months ended
June 30, 2015

Three months ended
June 30, 2016

(April 1, 2015–June 30, 2015)(April 1, 2016–June 30, 2016)

Profit

2,393

2,550

637

(204)

Deferred gains or losses on hedges

27

ሺ108)

Foreign currency translation adjustment

(5)

ሺ144)

Remeasurements of defined benefit plans, net of tax

58

69

717

(387)

3,110

2,163

2,630

1,736

479

426

Other comprehensive income
Valuation difference on available-for-sale securities

Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable tonon-controlling interests8