TRANSPORTA
WAREHOUSIINTERNATIO
DISTRIBUTIOCONSULTING
TRANSPORTA
WAREHOUSIINTERNATIO
DISTRIBUTIO
Annual Report 2005

For the year ended March 31, 2005

SENKO Co., Ltd.

Logistics of the Future Logistics of the Future Logisti

SENKO Co., Ltd.
Umeda Sky Bldg., Tower West, 1-30, Oyodonaka 1-chome, Kita-ku, Osaka 531-6115, Japan
Tel: 06-6440-5155 Fax: 06-6440-5175
URL http: //www.senko.co.jp/
Printed in Japan

Profile

Established in Osaka in July 1946, Senko Co., Ltd. is an integrated distribution
services company. The Company has grown steadily over the years, listing on theFirst Section of the Osaka Securities Exchange in 1975 and on the First Section of theTokyo Stock Exchange in 1990.
As of March 31, 2005, Senko boasted a national network in Japan of 260 offices, 2,508
vehicles, 15 owned and chartered cargo ships, and 1,058,342 square meters of
warehouse space. The Company engages in wide-ranging business operations,centered on trucking and extending to warehousing, marine transport, railway
forwarding, in-factory work, and multimodal international transportation.

Consolidated Financial Highlights
SENKO Co., Ltd. and Consolidated Subsidiaries

Years ended March 31

2005

2004

2005

¥179,501¥172,974$1,671,487

Operating income

5,125

5,042

47,723

Net income

2,457

2,175

22,879Total assets

126,041

124,717

1,173,675

Shareholders’ equity

44,826

43,161

417,413

For the year:
Operating revenues

Senko’s forte lies in supplying integrated distribution services, from distribution
consulting to system design and operations, that closely match customer needs.
These efficient integrated distribution services have an excellent reputation in themarket based on the provision of efficient transportation and distribution systems
centered on the Best Partner System that support the construction of customer
supply chain management systems. The Company’s Best Partner System is a newlogistics system that takes full advantage of information technology.

At year end:

Per share data: (Yen and U.S. dollars)
Net income

Senko plans to take another major step forward in its transformation from an
integrated distribution services company to a logistics information company
through the even greater utilization of information technology to provide customers
with high-quality, efficient logistics solutions.

Contents

Consolidated Financial Highlights
A Message from the President
Review of Operations
Transport
Retail Distribution and Processing
Others
Product Categories Information
Financial Review
Financial Section
Report of Independent Certified Public Accountants
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Shareholders’ Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
Board of Directors and Corporate Auditors, Executive Officers
Consolidated Subsidiaries and Affiliated Companies
Corporate Data

Thousands of
U.S. dollars

Millions of yen¥21.90¥19.20$0.20

Cash dividends

7.50

7.50

0.07

Diluted net income

––

18.02

––

Shareholders’ equity

403.78388.42

3.76

Note : U.S. dollar amounts are converted from yen, for convenience only, at the prevailing rate of ¥107.39 to U.S.$1 on
March 31, 2005.

1
2
4
5
5
6
8
Operating revenues

11
12
14
15
16
17
24
24
25

200

(Billions of yen)

Net income (loss)
2,500(Millions of yen)

Net income (loss) per share
25

2,000

20

1,500

15

1,000

10

500

5

0

0

(Yen)

150

100

50

Cautionary Statement with Respect to Forward-Looking Statements
Plans and strategies concerning future business performance included in this annual report are forward-looking statements
based not on historical facts but on management’s assumptions and beliefs in the light of the information currently
available to it, and thus involve a certain element of risk and uncertainty.

0

01

02

03

04

05

-10,000

01

02

03

04

05

-100

01

02

03

04

05

1

A Message from the President
Two Consecutive Years of Operating Revenue and Profit Growth, Medium-Term Business Plan Moving Forward
Business Environment
In the fiscal year ended March 31, 2005, Senko achieved operating revenue and profit growth forthe second consecutive year. Consolidated operating revenues climbed 3.8%, to ¥179,501 million
while consolidated operating income rose 1.7%, to ¥5,125 million. Consolidated net income
increased 13.0%, to ¥2,457 million.
In the first half of the fiscal year under review, there were signs of a mild recovery in the Japanese
economy supported by improvement in corporate performances and expanding capital
investment. In the second half, however, soaring prices for crude oil and the impact of unusuallylarge natural disasters prevented any rebound in personal consumption, creating even more clouds
on the horizon of the economy.
In the transport and distribution industry, despite signs of growth in freight volume, the businessclimate remained severe. Customers continued their strong demands for distribution expenses
cuts against the backdrop of the trend to lower prices in the market. Moreover, the industry faceddifficult operating conditions due to the impact of the surge in oil prices on fuel expenses and otherfactors.
Under these circumstances, the Company kicked off its new three-year medium-term businessplan, which is based on the theme of “The Challenge of Creative Logistics.” Under the plan, theCompany pursued the development of new business in the wholesale and retail logistics andhousing construction materials procurement and supply logistics sectors. These efforts were basedon the provision of efficient transportation and distribution systems to support the construction ofcustomer supply chain management systems centered on the Company’s Best Partner System, a
new logistics system that takes full advantage of information technology. At the same time, theCompany also worked to increase productivity while pursuing operating expense reductions and strengthening its financial position
through improvements in capital efficiency.
Reflecting these measures, operating revenues of the housing logistics business rose 6.9%, to ¥44.3 billion, accounting for 24.7% of total
operating revenues, a gain of 0.8 percentage points from the previous fiscal year. Operating revenues of the retail logistics business,
which combines the wholesale and retail and medical treatment and pharmaceutical fields, advanced 10.0% year on year, to ¥28.4
billion, generating 15.8% of total operating revenues, up 0.9 percentage points year on year.
Looking at profitability, operating income and net income also posted growth during the fiscal year. This result was achieved
regardless of the pressure on profit margins from customers’ demands for price cuts, the introduction of pro forma standard taxation,and the rise in diesel oil costs. Contributing to profit growth were earnings growth by the housing logistic-related and retail logistics
businesses and cost benefits from progress in cost restructuring.
Outline of New Medium-Term Business Plan and Strategies for the Future
Founded on the value structure underpinning our slogan “The Challenge of Creative Logistics,” our new medium-term business plancommenced in April 2004.
The main thrust of the plan’s strategy is to achieve originality and superiority in supporting the optimization of our customers’
production and logistics activities. Senko is attaining this goal through the provision of logistics and information services offering“Greater Safety and Quality” and “More Efficient Costs.”
The plan’s strategy aims to achieve sales growth based on the development of supply chain management (SCM) business while
nurturing growth fields that will become important sources of earnings in the future. Furthermore, we are progressing withstrengthening of our financial and profitability structures while also reinforcing our corporate social responsibility (CSR) activities.
Through these activities, we are striving to enhance the enterprise value of our entire corporate group.

distribution centers, with a total of 30,000 square meters of space. To avoid any deterioration in our financial position, we are pursuingthis network expansion strategy by selecting a variety of financing methods, including securitization through special purpose
companies, borrowing, and internal reserves.
In June 2005, The AEON North Hokkaido RDC Center began operations, supplying products to the outlets of the AEON Groupthroughout Hokkaido. In the same month, one of our largest distribution centers yet, the Sugito PD Center, also came onstream. Dueto the scarcity of warehousing space, in metropolitan Tokyo especially, it is urgent that that Senko develops new distribution bases if
we want to expand business further. To that end, we are scheduled to open 4 bases, including the Sugito PD Center, during thecurrent fiscal year, adding a total of 110,000 square meters of distribution center space.
Among these new bases is included the expansion of the capacity of an interior materials supply center for a major prefabricatedhousing manufacturer in the Kanto and Kansai region. The center will use the additional capacity to improve its delivery organizationthat supplies materials on a just-in-time basis in accordance with progress in assembly as well as the quality of its transportation
service.
We also plan to accelerate our business providing a supply services for housing materials manufacturers on a pick-up basis. We are
currently running test trials with a targeted date in August for the start up of operations.
Senko is also proactively developing its overseas business. We are considering setting up a new base in the Dalian distribution regionof the People’s Republic of China in addition to our 2,600-square meter Dalian warehouse facilities that provides hanger storage andretail processing. We have established local subsidiaries in Shanghai in addition to Hong Kong. With a network of six subsidiaries andnine bases, we are accelerating our business development in China.
Among new businesses, in October 2004, we established S-TAFF Co., Ltd., a temporary staffing service specializing in distribution
services. The subsidiary plans to enter the metropolitan Tokyo market during the current fiscal year.
Corporate Social Responsibility Activities
We are pursuing a structure that will ensure a high reputation for our corporate group among our customers and in society for social
responsibility (CSR). We are working toward that goal by bolstering the internal guidance and promotional organizations within theGroup through thorough implementation of corporate governance and compliance, improved safety and quality, and environmental
preservation practices.
Among these efforts, Senko has made corporate governance its top priority management issue, and has given the board of directors animportant role in this area. Meeting at least once a month, the board of directors is responsible for monitoring compliance with matters
stipulated in the law, deciding important matters related to the management of the Company, and monitoring business execution.
The Company has adopted the auditor system by which four auditors including two external auditors attend meetings of the board of
directors, objectively monitor the directors’ execution of their duties, and cooperate with the internal audit department and the
independent certified public accountant to conduct rigorous audits of the Company and its subsidiaries.
On June 29, 2004, Senko reinforced the function of the board of directors by introducing a corporate officer system. The purpose of the
new system is to separate the business decision and monitoring roles of the board from the business execution role of managers. In
addition to clarifying the roles and responsibilities of these two functions, the new system also aims to provide an opportunity toachieve placement of the right person in the right job for a diverse range of the Company’s personnel.
To Our Shareholders
The Company regards distribution to shareholders as a management priority. Our basic policy on profit distribution is to continue topay stable dividends that reflect underlying business performance while also retaining the internal reserves necessary to provide for
future business development and strengthen business structure. We are committed to improving earnings and continuing to provide
stable dividends to our shareholders. In these endeavors, we look forward to the continued support of our shareholders.

Based on the implementation of the plan, Senko is targeting expansion of consolidated operating revenues to ¥200 billion (¥179.5
billion last year), of operating income to ¥6.5 billion (¥5.1 billion last year), and of net income to ¥3.0 billion (¥2.5 billion last year) in thefiscal year ending March 2007.
The current fiscal year is the second year of the medium-term business plan. With its eye on the goals of the final year of the plan,management will be going on the offensive in the fiscal year ending March 2006. Actively upgrading and expanding our logistics
bases nationwide, we will build a structure to better support the construction of our customers supply chain management systems. At
the same time, we will seek to develop demand for our services through the expansion of our distribution systems.

June 2005

Yasuhisa Fukuda
President and Representative Director

Specifically, in the current fiscal year, we plan to establish eleven distribution centers, including overseas distribution centers, with a
total of 220,000 square meter of space. This expansion follows the construction last year of five distribution centers, including overseas

2

3

Review of Operations
Beginning with the fiscal year under review, the Company’s operations have been
categorized into three business segments—transport, retail distribution and processing,and others—in consideration of business content and interrelated operations.

Transport
In addition to truck transport operations, this businesssegment includes railway forwarding on trunk routes;
marine transport by container ship, mixed cargo steamer,and specialty ship; and intermodal international freight
forwarding.
The core truck transport operations have developed an
extensive nationwide network, providing our customers
with transportation and delivery services that match theirproducts and distribution structure, including exclusive,combination, route, and joint transport services.
We transport industrial raw materials, machine products,
construction materials, housing materials, agricultural
products, and consumer items and provide moving services.
In short, we handle almost any freight related to food,shelter, and clothing.

Retail Distribution and Processing
Operating revenues
120(Billions of yen)

105.7

60

110.6

This business segment comprises warehousing and infactory work operations.

Business segments(Billions of yen)

51.4

100

53.5

Senko warehouses present a very different image from thewarehouses of the past. These multifunctional distribution
centers offer services that combine the delivery to and fromthe warehouse, storage (temperature controlled), setassembly, and labeling processes as well as warehousing,
printing expiration dates, logistics history management,
adding IC tags, and other distribution services provided byadvanced warehousing management systems.

29.8%

50
61.6%

80

40

60

30

40

20

Retail distribution andprocessing sales composition

Transport sales composition
20
Others 1.4%

10

Others

7.3%
0

We operate a diversified fleet comprised of medium-duty
trucks, heavy-duty trucks, and tractor-trailers as well as
specialty transport trucks, such as tankers, specialty loose
powder carrying, and refrigerated trucks. Senko’s diverse
transportation capabilities have won the Company highmarks from manufacturers and other customers.

Operating revenues
Business segments

04

0

05

04

05

In-factory processing Warehousing

International freight forwarding 4.3%
Marine transport 4.6%
Railway forwarding 4.6%

29.6%

The Company's facilities provide a total storage space ofapproximately 1,060,000 square meters. With thesewarehousing bases as the core of our operations, wedevelop and install logistics information systems designed
in anticipation of diverse customer needs. These capabilities
allow us to offer a full range of logistics services that assist
our customers’ production and sales operations.

63.1%

In-factory work comprises distribution and production
processes spanning everything from loading and unloading
raw materials at our customers’ factories and warehouses towrapping, packaging, and loading finished products. These
professional distribution services give high priority to safe,
quality operations that support the management of the flowof materials and products within factories.

Truck transport

85.1 %

Operating revenues
20

Others(Billions of yen)

15.8

15.3

The others business segment includes petroleum sales;
merchandise sales; information processing and softwaredevelopment; and vehicle maintenance.

15

Business segments
10

Others sales composition
Others 0.2%
Vehicle maintenance

8.6%

7.2%
Information processing andsoftware development

13.4%

5

Petroleum
Merchandise

58.5%

20.7%

0

4

04

05

5

Review of Operations
Product Categories Information

Sales composition

In addition to business segments, Senko discloses sales on
Housing
44.3%

a product category basis determined based on groupingsof the special cargo and distribution characteristics ofcustomers. This information is provided as part of theCompany’s efforts to enable shareholders to gain a better
understanding of Senko’s business.

Others

71.2%
Petroleum-related
products and plastics

35.6%
Retaillogistics-related
products
28.4%

Retail Logistics-Related ProductsThis product category is the main pillar of Senko’s growthstrategy. The Company is acquiring new customers among
chain stores, adapting to customers’ expansion to otherlocations and regions, and pursuing outsourcing contracts
with apparel companies. Furthermore, in the medical andpharmaceutical fields, Senko also aims to be on of the top
third-party logistics (3PL) companies in the domestic market.
Some of the Company’s efforts in this area include
developing a nursing care product logistics service andcreating new logistics models for hospitals.

Housing
For a core group of three major prefabricated housing
manufacturers, Senko provides just-in-time delivery services
covering raw material procurement to delivery at the
installment location. In addition, the Company develops SCM
systems to comply with zero emissions at the installment siteand other requirements. Through this process, Senko is also
responding to the trend toward joint distribution system
within the prefabricated housing industry.

Change in sales volume of retail logistics-related products
30(Billions of yen)

28.4

25

20

ut

o
Ab

s
me

i

5t

10

t

ow

gr

n
hi

ars

ye

25.8

22.7

19.2

15.5
15

13.7
12.1

10

9.7

10.1

96

97

8.0
5

Petroleum-Related
Products and Plastics
Leveraging its nationwide business development capabilities
and its diversified transport system, Senko provides a fullrange of services, from raw material procurement andaccepting orders to delivery to end customers. The Company
can also accommodate customers moving into overseas
markets and develop SCM systems. These capabilities haveearned Senko the top share of the general-purpose plastics
transport market in Japan. The Company is also aiming tocapture the top share of the domestic lubricant oil market.

6

0

4.8

93

5.9

94

95

93

98

99

01

02

03

04

(Fiscal year)

7Financial Review

Performance
Consolidated operating revenues for the fiscal year ended March 2005
climbed 3.8%, to ¥179,501 million. Sales of the transport and retail
distribution and processing business segments expanded 4.6% and4.1%, respectfully.
Sales growth in retail logistics and housing-related services combinedwith cost structure reforms to support a 2.3% increase in gross margin,
to ¥13,307 million, while operating income edged forward 1.7%, to¥5,125 million. Along with the growth in sales, however, selling,
general and administrative expenses increased 2.7% year on year,
resulting in the operating income ratio remaining unchanged, at 2.9%.
Income before income tax and minority interests expanded 7.6% year on
year, to ¥4,553 million, despite the fact that there were other expenses ofloss on cancellation of lease. Moreover, although there was an increasein the income taxes on the growth in income before income taxes andminority interests, deferred income taxes also increased. Consolidated
net income, therefore, rose 13.0%, to ¥2,457 million, and the ratio of net
income to operating revenues improved 0.2 percentage points, to 1.4%.
Performance by Business Segment
By business segment, transport operating revenues for the fiscal year underreview rose ¥4,895 million, or 4.6%, to ¥110,610 million, generating 61.6% of
total operating revenues. Sales of housing logistics services, the corebusiness of the Company, climbed 6.9% due to the increase in the
distribution volume from factories and the development of the procurement
side of the business. In addition, there was a substantial increase in shipping
volume in the retail logistics-related sector, which combines wholesale andretail and medical treatment and pharmaceutical logistics.

Operating revenues

The operating revenues of the retail distribution and processing businesssegment amounted to ¥53,544 million, advancing ¥2,125 million, or 4.1%
and accounting for 29.8% of total operating revenues. Contributing to
the growth in operating revenues were active acquisition of cargobusiness wholesale and retail stores and expansion of revenues fromstorage of electrical and general machinery and from in-factory work.
Operating revenues from the others business segment decreased ¥493
million, or 3.2%, to ¥15,347 million, contributing 8.6% of total operating
revenues. During the fiscal year, the replacement of vehicles due to thestricter emissions regulations progressed, resulting in a decline indemand for vehicle inspections. The impact of this trend was to reducerevenues from vehicle maintenance. Furthermore, revenues from themerchandise business decreased due to a contraction in the size of theinstallment sales market. These reductions produced an overall decline
in business segment sales.
Performance by Principal Products Category
The Company has three core product categories: housing-related,
petroleum-related and plastics, and retail logistics-related (wholesale
and retail and medical treatment and pharmaceuticals logistics fields).
For the fiscal year ended March 2005, these three core product categories
accounted for 60.3% of total operating revenues.

(Billions of yen)

Operating income

7,000(Millions of yen)

Net income

2,500

6,000
150

(Units: billions of yen, %)Generating 19.8% of total operating revenues, the petroleumrelated and plastics product category saw its lubricating oil
business, which the Company has been steadily expanding,grow more than 7% during the fiscal year. This contribution
supported a ¥120 million, or 0.3% increase in operating
revenues, to ¥35,590 million.

Ratio of SG&A

(Millions of yen)

5(%)

Operating income / net
income to operating revenues
4

2,000

(%)

Net income per share

40

Operating income tooperating revenues

3

Year ended March 2005

Year ended March 2004

Revenues

Composition

Revenues

Composition

Change% Change

Housing

44.3

24.7

41.4

23.9

2.9

6.9

Petroleumrelated products,
and plastics

35.6

19.8

35.5

20.5

0.1

0.3

28.4

15.8

25.8

14.9

2.6

10.0

International
freight forwarding
and modal shifts

14.9

8.3

14.8

8.5

0.1

1.1

Chemicals andfertilizers

4.0

2.3

4.3

2.5

△0.3

△5.4

Foods

4.1

2.3

4.0

2.3

0.1

3.8

Electronics
products andmachinery

3.8

2.1

3.2

1.9

0.6

16.6

Others

44.4

24.7

44.0

25.5

0.4

0.8

Total

179.5

100.0

173.0

100.0

6.5

3.8

Retail logisticsrelated products

The retail logistics-related product category, which
contributed 15.8% of total operating revenues and has
recently been recording high growth, posted sales growth invarious fields during the fiscal year. Shipping volume
increased in the discount and specially store field as well as
in the direct sales field. Four new companies became
customers from the drug store market. In addition, shipping
volume rose in the medical and pharmaceutical field and a
new order was received for a nursing care productmaintenance center. Consequently, operating revenues fromretail logistics-related products climbed ¥2,570 million, or
10.0%, to ¥28,390 million.

Accounting for 24.7% of operating revenue, housing-related products
can be separated into distribution services from the factories and supply
procurement services. During the fiscal year, factory distribution
services were firm, with sales expanding 2.3%. Because the interior
housing materials distribution center network was increased to nine

expenses to operating revenues
200

Consolidated Operating Revenues by Products Handled

centers nationwide, supply procurement services sales
jumped 30.8%. As a result, operating revenues from housingrelated products increased ¥2,880 million, or 6.9%, year on
year to ¥44,280 million.

Cash dividends per share(Year ended March 2005)

(Yen)

(Yen)

30

Composition of
products handled

8

24.7%

Housing

19.8%

Petroleum-related products
and plastics

15.8%

Retail logistics-related
products

39.7%

Others

5,000
1,500

2

4

4,000
100

20
Net income tooperating revenues

1,000

3,000

1

10

0

0

7

500

2,000
50

0

8

01

02

03

04

05

0

3

0

1,000

01

02

03

04

05

-10,000

01

02

03

04

05

0

01

02

03

04

05

-5

01

02

03

04

05

-100

01

02

03

04

05

0

01

02

03

04

05

9

Report of Independent Certified Public Accountants

Financial Position
Total assets at March 31, 2005 expanded compared with the previous
fiscal year, rising ¥1,324 million, to ¥126,041 million. Current assets were
almost the same as in the previous fiscal year, rising a slight ¥69 million,to ¥41,061 million.
Total fixed assets expanded ¥1,255 million year on year, to ¥84,980
million.
Net property and equipment decreased ¥335 million, to ¥66,478 million.
The decline can be mainly attributed to a reduction in buildings andstructures.
Investments and other assets advanced ¥1,582 million, to ¥17,615
million. The increase primarily resulted from investment in a special
purpose company (SPC).
Major components of capital investment during the fiscal year were
investments in cargo ships, the Suzuka Logistics Center, the No. 2
warehouse at the Oita Medical Distribution Center, and an SPC forconstruction of the AEON Hokkaido RDC Center. Total capital
expenditures during the period under review amounted to ¥4.4 billion.
This entire amount was funded from operating cash flow.
At March 31, 2005, current liabilities totaled ¥42,722 million, increasing¥4,233 million from the previous fiscal year. The increase can be
principally attributed to long-term debt included in the current portionof long-term debt in preparation for redemption.

160

Shareholders' equity at fiscal year-end amounted to ¥44,826 million,
climbing ¥1,665 million from a year earlier. The rise in shareholders'equity came mainly from an increase in retained earnings as a result ofgrowth in net income. The equity ratio, therefore, improved 1.0
percentage points, to 35.6%.
Cash FlowsNet cash provided by operating activities for the year ended March 31,
2005, decreased ¥571 million, or 9.1%, to ¥5,609 million. This decline canmainly be attributed to an increase in income tax paid.
Net cash used in investing activities grew ¥2,192 million, or 94.5%, to¥4,512 million from the previous fiscal year. Payments for purchases of
fixed assets and other (investments) were primarily responsible for thisincrease.
Consequently, free cash flow at fiscal year-end totaled ¥1,097 million,
down ¥2,763 million, or 71.6%, from the previous fiscal year.
Net cash used in financing activities fell ¥5,506 million, or 84.9%, to ¥977
million. This decrease resulted primarily from a decline in therepayment of interest-bearing debt.
As a result, cash and cash equivalents at end of year totaled ¥11,521
million, edging up ¥121 million, or 1.1% from the prior fiscal year.

Long-term liabilities decreased ¥4,574 million, to ¥38,493 million,

Total assets

primarily because of a reduction in long-term debt. Consequently,interest-bearing debt at fiscal year-end edged down ¥84 million, to¥38,242 million. The ratio of interest-bearing debt to total assets
improved 0.4 percentage points, to 30.3%.

Total shareholders’equity / equity ratio(Billions of yen)

150

(Billions of yen)

(%)

6

50

30

5

45

25

4

40

20

3

35

15

2

We have audited the accompanying consolidated balance sheets of SENKO CO., Ltd. and its consolidated
subsidiaries as of March 31, 2005 and 2004, and the related consolidated statements of income, shareholders’ equity,and cash flows for the years then ended, all expressed in Japanese yen. These consolidated financial statements are
the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with auditing standards, procedures and practices generally accepted andapplied in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, theconsolidated financial position of SENKO CO., Ltd. and its consolidated subsidiaries as of March 31, 2005 and 2004,
and the consolidated results of their operations and their cash flows for the years then ended in conformity withaccounting principles and practices generally accepted in Japan.

Supplemental Information
As described in Note 12, effective April 1, 2004, SENKO CO., Ltd. has changed its method of presentation ofbusiness segments.

The United States dollar amounts shown in the accompanying consolidated financial statements have been translated
solely for convenience. We have reviewed this translation and, in our opinion, the consolidated financial statements
expressed in Japanese yen have been translated into United States dollars on the basis described in Note 1.

ROE / ROA

35

55

To the Board of Directors of SENKO CO., Ltd.

(%)

140

30

10

1

25

5

0

Ohtemae Audit Corporation
Osaka, Japan
June 29, 2005

130
ROA
ROE
0

10

01

02

03

04

05

0

01

02

03

04

05

0

-15

01

02

03

04

05

11

Consolidated Balance Sheets
SENKO Co., Ltd. and Consolidated Subsidiaries
March 31, 2005 and 2004

Thousands of
U.S.dollars

Millions of yen

ASSETS

2004

2005

LIABILITIES AND SHAREHOLDERS' EQUITY

2005

Current assets:

Thousands of
U.S.dollars

Millions of yen

2005

2004

Short-term loans (Note 5)¥9,750¥10,340$90,791

Current portion of long-term debt (Note 5)

6,953

2,287

64,7455158

46

16,696

15,419155,4712005

Current liabilities:¥11,521

Cash and cash equivalents¥11,400$107,282

Trade accounts and notes receivable––
180

1,509

26,031

25,728242,397

(102)

(81)

(950)

632

664

5,885

Accrued expenses

2,504

2,572

23,317

1,350

1,397

12,571

Accrued income taxes

1,387

1,635

12,916

Other current liabilities

5,427

6,078

50,53542,72238,489397,821162

Non-consolidated subsidiaries and affiliates
OthersLess allowance for doubtful accounts
Inventories
Deferred tax asset (Note 11)
Short-term loans to non-consolidated
subsidiaries and affiliates
Prepaid expenses and other current assets
Total current assets

Trade accounts and notes payable––Non-consolidated subsidiaries and affiliates
Others

7

123

65

1,460

1,581

13,595Long-term debt, less current portion (Note 5)

21,51925,682200,382

41,061

40,992

382,354

Accrued severance indemnities (Note 6)

14,417

14,728134,249

Other long-term liabilities

2,557

2,657

23,81081,21581,556756,262

Total current liabilities

599

554

5,578

Total liabilities

1,416

904

13,186

Contingent liabilities (Note 8)

120,380

119,729

1,120,961

Shareholders' equity (Note 10):Less accumulated depreciation(53,902)(52,916)(501,928)

Common stock:

Net property and equipment

66,47866,813

619,033

Authorized––294,999,000 shares

Deferred tax assets-non-current (Note 11)

6,931

6,928

64,540Issued––111,746,167 shares

18,296

18,296

170,370

Other assets

9,556

8,526

88,984

Capital surplus

16,50816,387

153,720

Retained earnings

10,1598,577

94,599

158

82

1,471

Investments in and long-term loans to non-consolidated subsidiaries and affiliates
Investment securities (Notes 3 and 7 )Property and equipment, at cost (Note 4)

Unrealized holding gain on securities
Less treasury stock, at cost(804,414 shares in 2005 and 737,628 shares in 2004)
Total shareholders’ equity
Total assets¥126,041¥124,717$1,173,675

See the accompanying notes to the consolidated financial statements.

12

Total liabilities and shareholders' equity

(295)

(181)

(2,747)44,826

43,161

417,413¥126,041¥124,717$1,173,675

See the accompanying notes to the consolidated financial statements.

13

Consolidated Statements of Income

Consolidated Statements of Shareholders’ Equity

SENKO Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2005 and 2004

Operating revenues

Thousands of
U.S.dollars

Millions of yen

2005

2004

¥179,501¥172,974$1,671,487

166,194

159,963

1,547,574

8,182

7,969

76,190174,376

167,932

1,623,764

5,125

5,042

47,723

SENKO Co., Ltd. and Consolidated Subsidiaries
Years ended March 31, 2005 and 2004

Common stock

111,746

18,296

16,387

7,267

(1)

(172)

Net income

—

—

—

2,175

—

—

Cash dividends

—

—

—

(833)

—

—

Bonuses to directors and statutory auditors

—

—

—

(32)

—

—

Unrealized holding gain on securities

—

—

—

—

83

—

Treasury stock

—

—

(0)

—

—

(9)

111,746¥18,296¥16,387¥8,577¥82¥(181)Net income

—

—

—

2,457

—

—

Cash dividends

—

—

—

(832)

—

—

Bonuses to directors and statutory auditors

—

—

—

(43)

—

—

Unrealized holding gain on securities

—

—

—

—

76

—

Treasury stock

—

—

121

—

—

(114)

111,746¥18,296¥16,508¥10,159¥158¥(295)

Thousands of U.S. dollars
Unrealized
holding gain
CapitalRetained(loss) on
surplusearnings
securities

Treasury stock

Operating costs and expenses:
Operating costs of revenues
Selling, general and administrative expenses
Operating income
Other income (expenses):
Interest and dividend income

157

145

1,463

Interest expenses

(467)

(469)

(4,349)Others, net

(262)

(485)

(2,439)

(572)

(809)

(5,326)

4,553

4,233

42,397

Income before income taxes
Income taxes (Note11):
Current

2,102

1,798

19,574

Deferred

(6)

260

(56)

2,096

2,058

19,518¥2,457¥2,175$22,879

Net income

Per share of common stock
Net income
Diluted net income
Cash dividends applicable to the year

Yen

Balance at April 1, 2003

Balance at March 31, 2004

Balance at March 31, 2005

CapitalsurplusRetainedearnings

Unrealized
holding gain
(loss) on
securities

Treasury stock

U.S.dollars¥21.90¥19.20$ 0.20

––

18.02

––

7.50

7.50

0.07

Common stock$170,370$152,593$79,868$764$(1,685)

Net income——

22,878——Cash dividends——(7,747)——

Bonuses to directors and statutory auditors

—

—

(400)

—

—

Unrealized holding gain on securities

—

—

—

707

—

Balance at March 31, 2004

Treasury stock
Balance at March 31, 2005

See the accompanying notes to the consolidated financial statements.

14

Millions of yen

Thousands
Number ofshares ofcommon stock
issued

2005

—

1,127

—

—

(1,062)$170,370$153,720$94,599$1,471$(2,747)

See the accompanying notes to the consolidated financial statements.

15

Notes to the Consolidated Financial Statements

Consolidated Statements of Cash FlowsSENKO Co., Ltd. and Consolidated Subsidiaries

SENKO Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2005 and 2004

Cash flows from operating activities:
Income before income taxes
Adjustments for:
Depreciation and amortization
Loss on disposals of property and equipment
Loss on sale of property and equipment
Decrease in allowance for employee retirement
Increase (decrease) in accrued bonuses to employees
Interest and dividends income
Interest expense
Increase in trade receivables
Decrease (increase) in inventories
Increase in trade payables
Other
Sub totalInterest and dividend income received
Interest expenses paid
Income tax paid
Net cash provided by operating activities
Cash flows from investing activities:
Payments for purchases of fixed assets
Proceeds from sales of fixed assets
Payments for purchases of investment securities
Proceeds from sales of investment securities
Proceeds from sales of subsidiary
Payments for purchases of non-consolidated subsidiaries
Other
Net cash used in investing activities
Cash flows from financing activities:
Increase (decrease) in short-term loans, net
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from issuance of bonds
Purchases of treasury stock
Sales of treasury stock
Dividends paid
Other
Net cash provided by financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Thousands of
U.S.dollars

Millions of yen

2005

2004

¥4,553¥4,233$42,397

2,854
128
24
(311)
(69)
(157)
467
(109)
33
1,367
(349)
8,431
159
(463)
(2,518)
5,609

3,071
72
215
(2,248)
235
(145)
469
(1,472)
(44)
2,237
286
6,909
150
(499)
(380)
6,180

26,576
1,192
223(2,896)(643)(1,462)
4,349(1,015)307
12,730(3,250)78,508
1,481(4,311)(23,447)
52,231(3,397)
136
(415)
142
100
(50)
(1,028)(4,512)(3,006)
665
(195)
191
100
––
(75)
(2,320)(31,632)
1,266(3,864)
1,322
931
(466)
(9,573)(42,016)

(590)
2,950
(2,447)
––
(624)
631
(833)
(64)
(977)
1
121
11,400¥11,52140
8,323(20,896)
6,954
(9)
––
(833)
(62)
(6,483)(3)(2,626)
14,026¥11,400(5,494)27,470(22,786)––(5,811)
5,876(7,757)(595)(9,097)9
1,127
106,155$107,282

2005

1. Basis of Presenting Consolidated Financial Statements:
SENKO Co., Ltd. (the “Company”) and its domestic subsidiaries maintain their accounts and records in accordance with the provisions set
forth in the Commercial Code of Japan (the “Code”) and the Securities and Exchange Law and in conformity with accounting principles andpractices generally accepted in Japan, which are different from the accounting and disclosure requirements of International Accounting Standards.
The accompanying consolidated financial statements are prepared based on consolidated financial statements of the Company and its
subsidiaries (the“Companies”) which were filed with the Director of Kanto Local Finance Bureau as required by the Securities and Exchange Law.
In preparing the accompanying consolidated financial statements, certain reclassifications and rearrangements have been made to theconsolidated financial statements issued domestically in order to present them in a form which is more familiar to readers outside Japan.
The translation of the Japanese yen amounts into U.S. dollars is included solely for the convenience of the reader, using the exchange rate
prevailing at March 31, 2005, which was ¥ 107.39 to US$1.00. These convenience translations should not be construed as representations that theJapanese yen amounts have been, could have been, or could in the future be, converted into U.S. dollars at this or any other rate of exchange.
2. Summary of Significant Accounting Policies:(a) Principles of consolidation
The consolidated financial statements include the accounts of the Company and its significant subsidiaries. All significant intercompany
balances and transactions are eliminated.
Non-consolidated subsidiaries, whose combined assets, net sales, net income and retained earnings in the aggregate are not significant inrelation to those of the consolidation with the Companies.
Adjustment for consolidated account, at the time of acquisition, between the cost and underlying net equity of investments in consolidated
subsidiaries are amortized over a five-year period on straight-line method.
The Company has adopted the equity method of accounting for investments in a significant affiliates. The investments in other insignificant
unconsolidated subsidiaries and affiliate are stated at cost.
(b) Cash equivalents
Cash and cash equivalents comprise cash in hand, deposits held at call with banks, net of overdrafts and all highly liquid investments withmaturities of three months or less.
(c) Investment Securities
Investment securities are classified and accounted for, depending on management’s intent.
Marketable other securities, which are not classified as either trading securities or held-to-maturity debt securities, are reported at fair value,
which unrealized gains and losses, net of applicable taxes, reported in a separate component of shareholders’ equity.
Non-marketable other securities are stated at cost.
The cost of other securities sold is determined by the moving-average method.
The Companies classified all securities as other securities.
(d) Allowance for Doubtful Accounts
The allowance for doubtful accounts is stated in amounts considered to be appropriate based on the companies’ past credit loss experience or an
evaluation of potential losses in the receivables outstanding.
(e) Inventories
Purchased goods are stated at cost determined by the first-in first-out method. Supplies are stated at cost determined by the moving-average
cost method. Real estate for sale and work in process are stated at cost determined by the specific cost method.
(f) Property and Equipment and Depreciation
Property and equipment are stated at cost. Depreciation is principally computed at rates based on the estimated useful lives of assets using thedeclining-balance method except for buildings for which the straight-line method is applied.
The principal estimated useful lives are as follows:
Buildings and structures
3 to 60 years
Machinery and equipment
3 to 17 years(g) Accrued Severance Indemnities and Pension Plan
The Company and certain domestic consolidated subsidiaries have retirement benefit plans for their employees. Such benefits are provided
through the unfunded lump-sum severance indemnity plan and the funded noncontributory pension plan.
The amount of retirement benefits are determined on the basis of length of service, basic salary and certain other factors at the time oftermination of employment.
Allowance for retirement benefits has been provided for employees’ retirement benefits, based on the amount of projected benefit obligation
reduced by pension plan assets at fair value at the balance sheet date.
Actuarial gains and losses are amortized by the straight-line method over a period of 14 years, which is within the estimated average remaining
years of service of the Companies’ employees. The amortization of such gains and losses is recognized effective the year subsequent to the year inwhich they are incurred.
The Company and certain consolidated subsidiaries also have a severance indemnity plan for directors and corporate auditors, whose accrued
severance indemnities are stated at 100% of the amount which is computed according to internal rules.
(h) Income Taxes
Deferred income taxes are recognized by the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities
are determined based on difference of between financial reporting and the tax basis of the assets and liabilities, and are measured using theenacted tax rate and laws that will be in effect when the differences are expected to reverse.

See the accompanying notes to the consolidated financial statements.

16(i) Appropriation of Retained Earnings
Cash dividends and bonuses to directors and corporate auditors are recorded in the financial year in which a proposed appropriation ofretained earnings is approved by shareholders.

17(j) Leases
In Japan finance leases other than those that are deemed to transfer the ownership of the leased assets to lessees are accounted for by a method
similar to that applicable to ordinary operating leases.
(k) Per Share information
Basic net income per share is computed based on the net income available for distribution to shareholders of common stock and the weightedaverage number of shares of common stock outstanding for the period.
Diluted net income per share is computed based on the net income available for distribution to the shareholders and the weighted-average
number of shares of common stock outstanding during each year assuming full conversion of the convertible bonds.
Diluted net income per share for the year ended March 31, 2005 is not disclosed because there was no dilution.
Cash dividends per share are dividends applicable to the respective years including dividends to be paid after the end of the year.
(l) Translation of Foreign Currencies
All monetary assets and liabilities denominated in foreign currencies are translated into Japanese yen at the exchange rate at the balance sheet
date. Revenue and expenses are translated at the rate of exchange prevailing when transactions are made.

5. Short-term Loans and Long-term Debt:
At March 31, 2005 and 2004, short-term loans consisted of the following:—

0.7433% to 0.8425% unsecured loans from banks

0.92% bonds due 2009
0.24% to 1.49% loans from banks and insurance companies:
UnsecuredMarketable securities
Non-marketable securities

The following is a summary of marketable securities included in investment securities, at March 31, 2005 and 2004.

2005
Equity security
Bonds and Others

2004
Equity security
Bonds and Others

2005
Equity security
Bonds and Others

Acquisition
cost
¥ 594
11
¥ 605

Millions of yen
Gross
Gross
unrealized
unrealized
gains
losses
¥ 271
¥ (3)
0
(0)
¥ 271
¥ (3)

Book
value
(Market value)
¥ 862
11
¥ 873

Acquisition
cost
¥ 304
11
¥315

Millions of yen
Gross
Gross
unrealized
unrealized
gains
losses
¥ 140
¥ (1)
—
(0)
¥140
¥(1)

Book
value
(Market value)
¥ 443
11
¥454

Acquisitioncost$ 5,531102$ 5,633

Thousands of U.S.dollars
Gross
Gross
unrealized
unrealized
gains
losses$ 2,524$ (28)
0(0)$ 2,524$ (28)

Book
value(Market value)$ 8,027102$ 8,129Land
Buildings and structures
Machinery and equipment, vehicle and vessels
Tools, furniture and fixtures
Construction in Progress

18

Millions of yen
2005
2004
¥ 33,799¥ 33,841
67,327
66,475
15,902
15,995
3,289
3,274
63
144
¥ 120,380¥ 119,729

Thousands of
U.S.dollars
2005$ 314,731
626,939
148,077
30,627587$ 1,120,961

Thousands of
U.S.dollars
2005$65,183

20,96927,969(2,287)¥25,682

199,944
265,127(64,745)$200,382

The annual maturities of long-term debt at March 31, 2005 for the next five years are as follows:—
Year ending
March 31
2006
2007
2008
2009
2010

Millions of yen¥ 6,953
5,698
3,852
4,539
7,430

Thousands of
U.S.dollars$ 64,745
53,05935,86942,267
69,187At March 31, 2005, the Company has committed line and overdraft contracts with thirteen banks aggregating ¥25,650 million($238,849 thousand). Of the total credit limit, ¥7,550 million ($70,304 thousand) was used as the above short-term and long-term borrowing, and the rest
¥18,100 million ($168,545 thousand) was unused.

6. Accrued Severance indemnities:
The following table sets forth the changes in benefit obligation, plan assets and funded status of the Company and its certain subsidiaries at
March 31, 2005 and 2004.
Thousands ofMillions of yen
U.S.dollars
2005
2004
2005
Benefit obligation at the end of year¥(29,494)¥(29,268)$(274,644)
Fair value of plan assets at the end of the year
12,343
11,721
114,936
Funded status:
Benefit obligation in excess of plan assets(17,151)(17,547)(159,708)
Unrecognized actuarial loss
2,734
2,819
25,459Accrued severance indemnities recognized in the consolidation balance sheets¥(14,417)¥(14,728)$(134,249)

Severance and pension costs of the Company and its certain subsidiaries included the following components for the year ended March 31, 2005 and 2004.

Proceeds from sales of other securities were ¥142 million (US$ 1,322 thousand) and ¥181 million for the years ended March 31, 2005 and 2004,
respectively. The gross realized gains and losses on those sales were ¥19 million (US$177 thousand) and ¥1 million (US$9 thousand), respectively,
for the year ended March 31,2005. The gross realized gains and losses on those sales were ¥31 million and ¥29 million for the ended March 31,2004.

4. Property and Equipment:
At March31, 2005 and 2004, property and equipment at cost consisted of the following:—

Millions of yen
2005
2004
¥7,000¥7,00021,47228,472(6,953)¥21,519

Less current portion

Thousands of
U.S.dollars
2005$ 8,129
5,057$ 13,186

Thousands of
U.S.dollars
2005$ 90,791

At March 31, 2005 and 2004, long-term debt consisted of the following:—

3. Investment Securities:
The carrying amounts of investment securities at March 31, 2005 and 2004, consisted of the following:—
Millions of yen
2005
2004
¥ 873
¥454
543
450
¥ 1,416¥ 904

Millions of yen
2005
2004
¥ 9,750¥ 10,340

Service cost
Interest cost
Amortization:
Recognized actuarial loss
Net periodic benefit cost
Gain on return of substituted portion of employee pension fundMillions of yen
2005
2004
¥ 1,378¥ 1,447717
716
263¥ 2,358—¥ 2,358550¥ 2,713(284)¥ 2,429

Thousands of
U.S.dollars
2005$ 12,832
6,677
2,449
$ 21,958—$ 21,958

19

Assumption used in the accounting for the defined benefit plans for the year ended March 31, 2005 and 2004 is as follows:
2005
Straight-line basis
2.5%
0.0%
1 year14 year

Method of attributing benefit to periods of service
Discount rateLong-term rate of return on fund assets
Amortization period of prior service cost
Amortization period of actuarial losses

10. Shareholders’ equity:
The Code provides that an amount equal to at least 10% of the amounts to be disbursed as distributions of earnings be appropriated to the legal
reserve until such reserve and additional paid-in capital equals 25% of the common stock account. The Code also stipulates that, to the extent thatthe sum of the additional paid-in capital and the legal reserve exceeds 25% of the common stock account, the amount of any such excess isavailable for appropriation by resolution of the shareholders.
The retained earnings account in the accompanying consolidated financial statements at March 31, 2005, included the Company’s legal reserveof ¥1,506 million ($14,024thousand).

2004
Straight-line basis
2.5%
0.0%
1 year14 years

7. Pledged Assets:
The following assets were pledged as collateral as at March 31, 2005 and 2004—

Land
Buildings
VehiclesInvestment securities

Millions of yen
2005
2004
¥ 2,548¥ 2,548
1,130
1,198
1
1
10
10
¥ 3,689¥ 3,757

Thousands of
U.S.dollars
2005$ 23,727
10,522993$ 34,351

Millions of yen
2005
2004
¥ 60
¥ 80

Thousands of
U.S.dollars
2005
$ 559

Millions of yen
2005
2004
¥ 605
¥ 1,378
21
19
509
507
¥ 1,135¥ 1,904

Thousands of
U.S.dollars
2005$ 5,634196
4,740$ 10,570

Obligations which were secured on the above assets were as follows:—

Long-term debt, including current portion

8. Contingent Liabilities:
At March 31, 2005 and 2004, contingent liabilities were as follows:

Guarantees of installment obligation and lease obligation for others
Notes discounted
Buyback obligations associated with securitization of receivables

Machinery and equipment
Tools, furniture and fixtures

Machinery and equipment
Tools, furniture and fixtures(1) Significant components of deferred tax assets and liabilities at March 31, 2005 and 2004 were as follows:

Millions of yen
2005
2004
Deferred tax assets:
Accrued severance indemnities to employees
Accrued bonuses to employees
Revaluation of land
Accrued severance indemnities to directors and corporate auditors
Loss on revaluation of golf club membership
Accrued enterprise tax
Social insurance premium
Other
Gross deferred tax assets
Less: Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Reserve for reduction in costs of fixed assets
Net unrealized holding gains on available-for-sale securities
Other
Gross deferred tax liabilities
Net deferred tax assets

Thousands of
U.S.dollars
2005¥ 7,126
1,014
351
113
157
139
154
416
9,470
(30)
9,440

¥ 6,993
1,029
346
181
155
132
––
584
9,420
––
9,420

$ 66,356
9,442
3,268
1,052
1,462
1,294
1,434
3,875
88,183(279)
87,904

(991)
(109)
(217)
(1,317)¥ 8,123

(994)
––
(256)
(1,250)¥ 8,170(9,228)(1,015)(2,021)(12,264)$ 75,640(2) Reconciliation of the statutory effective income tax rate and the income tax rate as a percentage of income before income taxes and minority
interests at March 31, 2005 and 2004 were as follows:

9. Lease:
At March 31, 2005 and 2004, financing lease transactions whose ownership are not to be transferred were as follows:

Purchasecost¥ 9,861
14,482¥ 24,343

11. Income Taxes:
The Company and its domestic subsidiaries are subject to several taxes based on income, which in the aggregate resulted in a normal effective
statutory tax rates of approximately 40.6% for the years ended March31, 2005 and 2004.

Thousands of
U.S.dollars
2005

Millions of yen
2005
Accumulated
depreciation¥ 4,434
7,057¥ 11,491

Book value¥ 5,426
7,426¥ 12,852

Book value$ 50,526
69,150$ 119,676

Purchase
Cost¥ 11,191
14,125¥ 25,316

Millions of yen
2004
Accumulated
amortization¥ 5,410
6,626¥ 12,036

Book value¥ 5,781
7,499¥ 13,280

Statutory tax rate
Adjustment:
Non-deductible expenses
Inhabitants’ per capita taxes
Non-taxable dividend income
Other
Income tax rate as a percentage of income before income taxes and minority interests

2005
40.6%

2004
40.6%

2.1
3.3
(0.7)
0.7
46.0%

2.5
3.6
(0.8)
2.7
48.6%

At March 31, 2005 and 2004, lease obligations were as follows:

Due within one year
Due after one year

20

Millions of yen
2005
2004
¥ 4,552¥ 4,217
8,883
9,634¥ 13,435¥ 13,851

Thousands of
U.S.dollars
2005$ 42,388
82,717$ 125,10521

12. Segment information
Business segment information of the Company and its consolidated subsidiaries for the years ended March 31, 2005 and 2004 issummarized as follows:
Millions of yen

2005
Transport

a. Operating revenues and operating income:Customers¥110,610Intersegment
2,848
Total operating revenues
113,458
Operating costs and expenses
110,861
Operating income¥2,597b. Assets, depreciation and capital expenditures;
Assets¥40,238
Depreciation
1,046
Capital expenditures
1,185

Retail Distribution
and Processing

OthersTotal¥53,544
3,351
56,89554,685¥2,210¥15,347
7,805
23,152
22,790¥362¥179,501
14,004
193,505
188,336¥5,169¥68,099
1,679
1,514

¥5,431
71
72¥113,768
2,796
2,771

Elimination or
Corporate

Consolidated¥—(14,004)(14,004)(13,960)¥(44)¥179,501—
179,501
174,376¥5,125¥12,27358
3¥126,041
2,854
2,774

Millions of yen

2004
Transport

a. Operating revenues and operating income:Customers¥105,715Intersegment
2,643
Total operating revenues
108,358
Operating costs and expenses
105,706
Operating income
2,652
b. Assets, depreciation and capital expenditures;
Assets¥39,360
Depreciation
1,033
Capital expenditures
1,179

Retail Distribution
and Processing

OthersTotal¥51,419
4,512
55,931
53,837
2,094¥15,840
6,084
21,924
21,610314¥172,974
13,239186,213
181,153
5,060¥67,483
1,899
2,051

¥6,05479
195¥112,897
3,011
3,425

Elimination or
Corporate

Consolidated¥—(13,239)(13,239)(13,221)(18)¥172,974—
172,974
167,932
5,042¥11,82060
31¥124,717
3,071
3,456

Elimination or
Corporate

Consolidated

Effective April 1,2004 the Company changed its method of business segment classification from “Truck Transport,” “Warehousing” and “Infactory Works” to “Transport,” “Retail Distribution and Processing” and “Others” .
This change was made in order to present the business situation of the Companies more appropriately, according to an increase in general
distribution services.
The following is the segment information for the year ended March 31, 2004 based on the previous business segmentation.

Millions of yen

2004
Truck
Transport

Warehousing

a. Operating revenues and operating income:Customers¥89,402¥21,581Intersegment
3,847
112
Total operating revenues
93,24921,693Operating costs and expenses 90,717
20,770Operating income¥2,532¥923
b. Assets, depreciation and capital expenditures;
Assets¥29,528¥40,175
Depreciation
760
1,186
Capital expenditures
1,051
668

In-factory
works

Other

Total

Elimination
Or Corporate

Consolidated¥15,396
5,517
20,913
19,961¥952¥46,595
5,681
52,276
51,630¥646¥172,974
15,157
188,131
183,078¥5,053¥—(15,157)(15,157)(15,146)¥(11)¥172,974—
172,974
167,932¥5,042¥8,942
13185¥34,364
934
1,622¥113,008
3,011
3,426

¥11,70860
31¥124,717
3,071
3,457

13. Subsequent Event
Shareholders approved the following appropriation of retained earning at the annual meeting held on June 29, 2005

Cash dividends
Bonuses to directors and statutory auditors

Millions of yen
¥ 416
29

Thousands of
U.S.dollars$3,874
270

Thousands of U.S. dollars

2005
Retail Distribution
and Processing

OthersTotal

a. Operating revenues and operating income:Customers$1,029,984
Intersegment
26,520Total operating revenues
1,056,504
Operating costs and expenses
1,032,321
Operating income$24,183$498,594
31,204
529,798509,219$20,579$142,909
72,679215,588
212,217$3,371$1,671,487
130,403
1,801,890
1,753,757$48,133$—(130,403)(130,403)(129,993)$(410)$1,671,487—
1,671,487
1,623,764$47,723b. Assets, depreciation and capital expenditures;
Assets$374,690
Depreciation
9,740
Capital expenditures
11,035$634,128
15,635
14,098$50,573661
670$1,059,391
26,03625,803$114,284540
28$1,173,675
26,57625,831

Transport

22

23

Board of Directors and Corporate Auditors, Executive Officers (As of June 29, 2005)

Chairman and Representative Director
Hiroshi Susumago

President and Representative Director
Yasuhisa Fukuda

Chairman and Representative Director
Hiroshi Susumago

Full-time Corporate Auditors
Kunihiro Sanada
Kazuo Saga
Yutaka Kakuyama

President and Representative Director
Yasuhisa Fukuda

Corporate Data (As of March 31, 2005)

Date of Establishment:

July 1946

Paid-in Capital:¥18,295,643,751

Authorized Shares:

294,999,000

Outstanding Shares:

111,746,167

Number of Shareholders: 7,590
Stock Listing:Osaka Securities Exchange
Transfer Agent:

Corporate Auditor
Hiroshi Itawaki

Directors, Managing Executive Officers
Tadao Ito
Takeyo Tezuka
Kengo Tanaka

Executive Officers
Michiyoshi Tsuge
Mitsuru Muramoto
Hisao Takahashi
Shuji Yada
Shigeo Kimura

Directors, Executive Officers
Tetsuo Hatano
Toshiaki Matsuyama
Sadayuki Yada
Yutaka Toyama

Tokyo Stock Exchange

The Mitsubishi Trust and Banking Corporation
4-5, Marunouchi, 1-chome Chiyoda-ku, Tokyo 100-8212, Japan

Toshinori Mine
Katsuhiko Miyagawa
Yasushi Morimoto
Kazuhiro Yamanaka

Network:(As of April 1, 2005)

Represents Branches
and Departments

Consolidated Subsidiaries and Affiliated Companies (As of April 1, 2005)

24

Company Name

Paid-in Capital

Equity Ownership Location

SENKO TRADING Co., Ltd.

¥300 million

100.0%Tokyo

SENKO INFORMATION SYSTEM Co., Ltd.
SENKO MOVING PLAZA Co., Ltd.
SAPPORO SENKO TRANSPORT Co., Ltd.
TOHOKU SENKO TRANSPORT Co., Ltd.
KANTO SENKO TRANSPORT Co., Ltd.
CHIBA SENKO TRANSPORT Co., Ltd.
FUJI SENKO TRANSPORT Co., Ltd.
TOKAI SENKO TRANSPORT Co., Ltd.
SHIGA SENKO TRANSPORT Co., Ltd.
OSAKA SENKO TRANSPORT Co., Ltd.
CHUSHIKOKU LOGISTICS Co., Ltd.
SANKYO FREIGHT Co., Ltd.
SANYO SENKO TRANSPORT Co., Ltd.
SHIKOKU REEFER TRANSPORT AND WAREHOUSING Co., Ltd.
FUKUOKA SENKO TRANSPORT Co., Ltd.
KUMAMOTO SENKO TRANSPORT Co., Ltd.
MIYAZAKI SENKO TRANSPORT Co., Ltd.
SAITAMA SENKO APOLLO Co., Ltd.
ASICS PHYSICAL DISTRIBUTION CORPORATION¥60 million¥60 million¥30 million¥30 million¥90 million¥30 million¥30 million¥30 million¥30 million¥90 million¥80 million¥10 million¥20 million¥50 million¥50 million¥25 million¥90 million¥50 million¥300 million

100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
20.0%

Osaka
Tokyo
SapporoMiyagi
Saitama
Chiba
Shizuoka
Aichi
Shiga
Osaka
Okayama
Hiroshima
Yamaguchi
KagawaFukuoka
Kumamoto
Miyazaki
Saitama
Hyogo

Main Business
Sales of petroleum-related products and distribution andinformation processing equipment
Information processing
Trucking, in-factory work, moving services
Trucking
Trucking, in-factory work
Trucking, in-factory work
Trucking, in-factory work, vehicle maintenance
Trucking, in-factory work
Trucking, in-factory work
Trucking, in-factory work, vehicle maintenance
Trucking, in-factory work, vehicle maintenance
Trucking, in-factory work, warehousing
Trucking, in-factory work
Trucking, in-factory work
Trucking, warehousing
Trucking
Trucking, in-factory work
Trucking, in-factory work, vehicle maintenance
Trucking, in-factory work, vehicle maintenance
Product control, vehicle shipment agency

East Japan Sales Division
Chubu Sales Department

West Japan Sales Division
Kyushu Sales Department

Branches:

No. 1 Sales Headquarters
East Japan Sales Division
China Project

Head Office
No. 2 Sales Headquarters
West Japan Sales DivisionMarket Development Division

Sapporo, Sapporo South, Sendai, Ibaraki, Kita Kanto, Saitama, Omiya, Kashiwa, Tokyo, Kanagawa,
Kanto Jyutaku Shizai Center, Chiba, Shizuoka East, Shizuoka West, Nagoya, Nagoya East, Mie, Keiji,
Keiji East, Nara, Keiji South, Osaka, Hanshin, Okayama, Kurashiki, Hiroshima, Yamaguchi, Fukuoka,
Kita Kyushu, Minami Kyushu, Nobeoka, Minamata

Departments:

International Distribution, Marine Transport, Railway Forwarding

25