INTEGRATEDREPORT 2022

Our Philosophy

Universal Mission and VisionCorporate Group Creating Future Trends
As a corporate group fostering people and supporting people’s lives, we contributeto achieve a genuinely productive global society by continuously challenging efforts
to create new trends in terms of products and services that shift the future;
centering on our physical and commercial distribution business.

SloganOur Thoughts into a Mission & Vision

Moving Global
Go beyond logistics
Make the world go round
Revolutionize businessCorporate Values

Values that should be shared withall our group employees (IP CReD)

Integrity

PassionCommitment

Respect

Diversity*In the abbreviation “IP CReD,” “IP” means “maintaining identity,” while “CReD” is Latin for “will, belief.”

1

SENKO INTEGRATED REPORT 2022

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Overview of the SENKO Group
History of the SENKO Group

3

Review of Businesses (At a Glance)

5

Business Activities

7

Logistics
Trading & Commerce
Living Support
Business Support

Strategies for Sustained Growth
Relationship between Business Activities
and the SDGs
17
A Message from the President

19

New Medium-Term Business Plan

23

Feature: The SENKO Group’s
Decarbonization Strategy

27Foundation for Growth
ESG+H Initiatives

31

Environment

33

Safety37

Social40

Governance

43

Health47

TOPICS

48

Data Section

Editorial Policy
In order to realize our vision, it isessential that we undertake corporate
activities in accordance with thinking
that leverages both financial andnonfinancial capital as well as timely,
precisely targeted decision-making. We
believe that it is also important that we
disclose information about strategy andcorporate activities in a spirit of goodfaith to earn stakeholders’
understanding. In compiling thisIntegrated Report, the Group’s first, wehave sought to provide a multifacetedand comprehensive look at the SENKOGroup’s business activities, including not
only financial information, but also ESG(environment, social, and governance)
content. We’re committed to fulfillingthe imperative of accountability bydisclosing information in a timely andappropriate manner through this report
as well as our corporate website,
securities reports, the SENKO Group
Report, and other tools.

Reference Guidelines
International Integrated Reporting
Council (IIRC, currently the VRF)
International Integrated Reporting
Framework
SASB (Sustainability AccountingStandards Board)
Guidance for Collaborative Value
Creation (Ministry of Economy, Tradeand Industry)

Scope of Report

Data Section
Ten-year Financial and Nonfinancial
Highlights

49

Financial Review

51

Consolidated Balance Sheets

53

Share Status and Company Profile58

The scope of coverage includes theactivities of SENKO Group Holdings Co.,
Ltd. and group companies.

Reporting Period
This report covers business activities forthe period between April 1, 2021, andMarch 31, 2022. However, some
activities that took place after April
2022 are also covered.

Disclaimer
The SENKO Group provides noguarantee concerning the outcome of
the forward-looking statements in thisreport as they will be affected by various
factors, including unforeseen changes in
economic conditions.

SENKO INTEGRATED REPORT 2022

2

History of the SENKO Group

Embracing value creation beyond logistics
Continuing to contribute to people’s lives andthe development of society
One century has passed since the founding of Tomita Shokai, the SENKO Group’s forerunner, in 1916. The Group has expanded inboth its businesses and its performance by embracing the challenge of pioneering innovation in every era. It transformed itself intoa logistics and information company by introducing an operational system that integrates information and logistics. We continue torealize growth by pioneering businesses that contribute to people’s lives and the development of industry and society, for example
by providing services that integrates distribution and logistics and through our Living Support business, which meets the needs ofcontemporary society. As we look towards the next 100 years, the SENKO Group is more eager than ever to embrace challenges as
it strives to resolve social issues and create new value through its businesses.
1916
1946
1961
1965
1970
1973
1978
1980
1985
1990
1996
1997

Tomita Shokai is founded as a specialized distributor for Nippon
Chisso Hiryo.
SENKO Transport Co., Ltd. is established.
The Company is listed on the Second Section of the Osaka
Securities Exchange.
The Company pioneers the introduction of computers in the
distribution industry.
The Company launches a distribution (logistics) consulting service.
The Company changes its name to SENKO Co., Ltd.
The Company makes a full-scale entry into the house moving
business.
The Company starts implementing comprehensive
multi-functional warehouses (PD centers) with the opening of the
Nanko PD Center in Osaka.
The Company launches a delivery system for
mass-merchandisers/retailers and a distribution business for chain
stores.
The Company is listed on the First Section of the Tokyo Stock
Exchange.
Crefeel Koto, a traffic safety and distribution training facility,
opens in the city of Higashi Omi, Shiga Prefecture.
The Company launches a logistics center business in Dalian, China.

2004
2009
2011
2013
2014
2015
2016
2017

The Company enters the temping agency sector with theestablishment of S-TAFF Co., Ltd.
Tokyo Nohin Daiko Co., Ltd. becomes a subsidiary of the Company.
Smile Corp. becomes a subsidiary of the Company.
AST Inc. becomes a subsidiary of the Company.
Runtec Corporation becomes a subsidiary of the Company as it makes
a full-fledged entry into the cold logistics business.
Laem Chabang Logistics Center opens in Thailand.
Care Terrace Co., Ltd. becomes a subsidiary of the Company as it
makes a full-fledged entry into the nursing care business.
The Company changes its name to SENKO Group Holdings Co., Ltd.
and transitions to a holding company structure.
Nippon Marine Co., Ltd. and Eikichi Kaiun Co., Ltd. become
subsidiaries of the Company as it expands its marine transportbusiness.
Skylift Consolidator (Pte) Ltd. becomes a subsidiary of the Company
as it enters the international airfreight business.
Blue Earth Japan Co., Ltd. becomes a subsidiary of the Company as itenters the fitness sector.

1960

832
1970

1980

1916

1950

1980

Founding of Tomita Shokai, theforerunner of SENKO

Development andexpansion of transport
structures

Transformation into a comprehensive
logistics company

Tomita Shokai was established in 1916 asa specialized distributor for Nippon Chisso
Hiryo, a chemical industry conglomerate. In
1941, the company name was changed to
Nicchitsu Unyu, and became a subsidiary of
Nippon Chisso Hiryo.
The post-war policy of breaking up
corporate groups known as zaibatsu led to
Nicchitsu Unyu being dissolved in 1946.
The Japanese character for sen (fan) used in
the name of the new company was areference to one element in the logo of theformer Nippon Chisso Hiryo, which showed
a Japanese “rising sun” on a folding fan.

SENKO Transport’s emblem at the time of its establishment

350,876

SENKO INTEGRATED REPORT 2022

In 1965, the company installed thefirst computer ahead of competitors,
and in 1970 began to further bolster
its information and proposal-writing
skills, for example by consulting on
distribution issues. In 1973, toexpress our determination to take on
the challenges of businesses otherthan distribution, the corporate namewas changed to SENKO Co., Ltd.

In 1980, we began the nationwide expansion of PD
centers, incorporating multiple functions such as storage,
shipping, and distribution processing. In 1985, we started
major home center operations.
In 1996, we opened Crefeel Koto, the Company’scomprehensive training center for transportation safetyand distribution in Shiga Prefecture. We have improved
education for drivers and forklift operators, and are further
boosting quality and productivity on site. In 1981, we hadalready established a local subsidiary in the United States,
and in 1996 we opened our first distribution center in
China as part of our full-fledged expansion overseas.

Cefeel Koto

Overview of the SENKO Group

Strategies for Sustained GrowthNon-consolidated revenue (millions of yen)Foundation for Growth

Consolidated revenue (millions of yen)

Data Section

Ordinary profit (millions of yen)

623,139

2020
2021

2022

Terauchi Co., Ltd. becomes a subsidiary of the Company as it
expands its Living Support business.
Self Grow Inc. becomes part of the Group as it looks toaccommodate increased hiring of foreign human resources.
Cartas Co., Ltd. becomes part of the Group as it expands its sharein the home-use paper wholesale industry.
Air Planners (S) Pte. Ltd. becomes part of the Group as it expands
its international logistics business.
COSPA Wellness Co., Ltd. becomes part of the Group as it expands
its presence in the fitness sector.

26,103

227,692
180,552
125,165

6,232

4,207
4,581
1990

2000

2010

2022

2000

2015

Transition from a comprehensive logistics
company to a logistics information company

Becoming a group that creates the trends of the future

Expanded in Japan and overseas using logistic centers
equipped with a range of capabilities, and significantly
increased storage area. The Company also became fully activein M&As, welcoming companies with strengths inapparel/fashion and frozen/chilled shipping to the SENKOGroup, in this way diversifying the logistics services it provides.
Even in Trading & Commerce, the Company added trading
company distributors and other companies to the SENKOGroup and broadened its business domain, for example byproviding integrated trading and logistics services.

September 2016 marked the 100th anniversary of the Company. A new
corporate philosophy was formulated to recognize the corporate name change to
SENKO Group Holdings Co., Ltd. in April 2017 (as part of the transition to a holding
company structure). In Logistics, in addition to increasing development of logistics
centers overseas, we will move forward with plans to use automation andlabor-saving technologies in these centers, while providing customers with highvalue-added distribution services. Also, we will strengthen new areas, such as
Living Support, to build the third pillar of our company, in addition to Logistics andTrading & Commerce.

SENKO INTEGRATED REPORT 2022

4

At a Glance

Delivering new value to people and society: Businessdevelopment at the SENKO Group
Building on the Logistics business, which comprises the basis for our growth, we’re taking advantage of Group synergies todevelop business that make a positive impact on society, for example through our Trading & Commerce business, which integrates
distribution and logistics, and through our Business Support business, which provides advanced solution services. We're also
creating and expanding businesses that deliver new value to people and society, for example by entering the Living Support
business, as a group that provides support for people’s lives.

Logistics

119

Trading & Commerce

17

companies

Living Support

13

companies

Business Support

12

companies

companies

Including 18 non-consolidated companies as of March 31, 2022.

Principal business indicators

Revenue¥623.1
¥24.8
¥26.1
¥15.2
10.8
0.95

billionOperating profit
Ordinary profit

billionbillion

Net income attributableto owners of parent
ROE

Other businesses(Living Support,
Business Support)

6.0%

Trading &Commerce

24.6

Percentage of
total revenue%%

Net D/E ratio

Logistics

69.4%

Revenue

Operating profit and ordinary profit(Hundreds of millions of yen)

■ Operating profit■ Ordinary profit

4,921

FY20185billionBreakdown of revenue

5,296

5,700

5,724

6,231

(Hundreds of millions of yen)

171 173

FY2019FY2020

SENKO INTEGRATED REPORT 2022

FY2021

FY2022FY2018196 199207 207

FY2019FY2020215 222

FY2021

248

261

FY2022

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

Environment
CO2 emissions*1 (land transport business)

271,659

Renewable energy solar power generation

242,554 245,405

t-CO2

CO2 emissions per 1 million yenof revenue

1.01

t-CO2/1 million yen

2020

18,342 18,502 18,990

18,990,000

1.01

0.99

0.96

*1 Total, Scope 1 + Scope 2

271,6592022 (FY)

2021

2020

Green distribution
modal shift rate

CO2 reduction activity results

4,306

t-CO2

76.1

Recycling-basedsociety

2,165
Scope2
1,803(power savings)
Scope3 (recycling338
based society )Scope1(fuel savings)

7.8%

t-CO2
t-CO2

kWh

Percentof totalPowersavings

Environmentally friendly
vehicles as a percentageof the fleet*3

95.2

%

Fuel
savings

2022 (FY)

2021

%

50.3%

41.9%

t-CO2

*2

*3 Excluding private, non-sales vehicles*2 Activities to reduce environmental impacts through the reuse and recycling of resources

SocialSocial activities

Diversity
Females as apercentage of newly
hired graduates

Females as apercentage ofmanagement positions

Percentage of female
directors

41.2

10.4

27.3

(Regular hiring in April 2022)(As of April 1, 2022)(As of June 28, 2022)%%

Traffic safety
activities

Blood drives

306

%

735

participants

participants

Governance

SafetySafety Excellence
Workplace-certified sites(G Mark workplaces)

186

Number ofcertified sites
Certification ratio

100

Vehicle accident
severity rate*4

Occupational accident
frequency rate*4

0.563

1.696

0.591

2.235

%

0.572

32.1

%

2020

2021

2022 (FY)36.4%

Ratio of external
auditors

50

%

1.771

0.563

Nationwide certification
ratio for truck transport
workplaces

Ratio of outside
directors

1.696
2020

2021

2022 (FY)*4 Scope: SENKO Co., Ltd. and SENKO Group logistics companies(As of June 28, 2022)

ESG indexes for which SENKO has been selected2022 Constituent MSCI Japan *5
ESG Select Leaders Index

2022 Constituent MSCI Japan Empowering *5
Women Index (WIN)*5 Neither inclusion in MSCI indexes nor use of MSCI’s logo, trademarks, service marks, or index names on this page should be construed to indicate the support, guarantee, or promotion of
SENKO Group Holdings Co., Ltd. by MSCI or its affiliates. MSCI indexes are the exclusive property of MSCI. The names and logos of MSCI and its indexes are trademarks or service marks of
MSCI and its affiliates.

SENKO INTEGRATED REPORT 2022

6

Logistics

Risk dispersion

Group

Combining proprietary strengths
to provide new services that go
beyond logistics

Modal shift

We provide logistics solutions that take advantage of our
combined capabilities to customers in a broad range of industries
and sectors, including distribution logistics for general supermarkets,
drugstores, and apparel; housing and chemical logistics, both areas
where we have a long track record of success; and food logistics, amarket where we’ve built a nationwide network for cold (frozen andrefrigerated) logistics.
In addition to providing stable shipping services through a natural
disaster-resilient network served by our own ships, we’ve working toprovide strategic logistics services in support of customers andbusiness activities as a leading logistics environment company, forexample through early support for green logistics.

Facility
aggregation
Just-in-time

Principal companies

SENKO Co., Ltd. / Runtec Corporation / Tokyo Nohin Daiko Co., Ltd. /SENKO A LINE AMANO Co., Ltd. / ACROSS TRANSPORT Co., Ltd. /Nippon Marine Co., Ltd.

Business overview
Despite the effects of rising fuel prices, we worked to promote services, lower costs, and boost productivity as thevolume of goods, which had fallen dramatically due to the effects of the COVID-19 pandemic during the previous fiscal
year, recovered. Revenue rose 45,188 million yen from the previous year to 432,538 million yen thanks to factors
including contributions from M&As. Segment profit rose 3,615 million yen to 23,013 million yen.

Logistics

Percentage of
total revenue

Logistics

Logistics business(hundreds of millions of yen)(hundreds of millions of yen)

Revenue

Logistics

3,874

7

SENKO INTEGRATED REPORT 2022

230

4,325
194

69.4%

FY2021

Operating profit

FY2022

FY2021

FY2022

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

T OP IC S
Helping solve issues in the transport industry

SENKO launches Logistics Bus, a new service forlong-distance shipping on certain core routes
SENKO Co., Ltd. began operating Logistics Bus
service between the island of Kyushu and the mainisland of Honshu (including the Kansai, Chubu, andKanto regions). The service, which sells space basedon customers’ freight volume, is attracting attention
as a highly convenient solution for long-distanceshipping that allows cargo to be loaded andunloaded at multiple “stops” in the manner of an
express highway bus.
Although it’s becoming increasingly difficult toprovide stable service for long-distance shipmentsthat travel in excess of 600 kilometers each way due
to factors including a driver shortage and workstylereforms, SENKO offers stable shipping across adiverse range of channels that include atransportation system using cross-docking as wellas truck, ship, and rail service. Our goal is topopularize the Logistics Bus system to help resolve
issues facing the transport industry.

Example Logistics Bus service from
Kyushu to Kanto
Freight can be loaded and unloaded at multiple
stops (distribution stations) and ports.

Atsugi site

Tosu site

Port of
Oita

Port of
Shimizu

Business strengths
Tapping proprietary strengths to provide new value to customers and society
The SENKO Group has accumulated extensive shipping expertise for different industries over more than 100 years
since its founding. The quality of our logistics services is highly regarded. In addition, we’re helping improve customers’
corporate value by realizing efficient, low-environmental-impact shipping service through green logistics and an
integrated sea/land modal shift, a proprietary capability of the SENKO Group, which operates its own fleet of ships.
Strength 2Strength 1

Shipping expertise
specifically tailored tomeet industry needs
Distribution logistics

A network that’s resilient in theface of natural disasters
Providing integrated land/sea
shipping via our own fleet

Solving shippers’ business challenges

Value provided
to society
Providing newservices andChemical logistics

infrastructure that go

Housing logistics

conventional domain

Other logistics

beyond theStrength 3

Environmentally friendly green logistics

of logistics

Green logistics expertise
accumulated over many years
SENKO INTEGRATED REPORT 2022

8

Logistics

Group

Distribution logistics
Percentage of total revenue

59.0 %

Distribution logistics

59.0%¥255.4 billion

Logistics
business¥432.5 billion

Mass retailers, retailers, food, fashion, etc.
Building on our logistics track record for chain store operators, we
provide optimal logistics solutions for customers in every segment of the
distribution industry. In fashion logistics, we provide seamless capability
from overseas production to domestic retail with product management,
logistics processing, and quality control (QC) operations.

Chemical logistics
Percentage of total revenue

19.9 %
Logistics
business¥432.5 billion

Resin raw materials, resin molded products,
processed goods, etc.
Chemical logistics

19.9%¥85.9 billion

9

SENKO INTEGRATED REPORT 2022

Taking advantage of chemical logistics expertise accumulated since ourfounding, we offer a comprehensive range of operations, from raw
material procurement to order processing, internal plant logistics, storage,
and delivery. We also offer comprehensive outsourcing operations withplanning and management department functions, for example creation oflogistics budgets and development of supply/demand plans.

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

Housing logistics
Percentage of total revenue

14.2 %
Logistics
business¥432.5 billion

Homebuilder products, associated materials, etc.
Our housing logistics business has accumulated a leading track record as
it’s developed alongside progress in industrialized housing. We built TGC-J,
a proprietary logistics system that integrates logistics and information.
Moreover, we earn customer trust with a variety of services, including joint
shipments, just-in-time shipments, and heavy-cargo delivery.

Housing logistics

14.2%¥61.8 billion

Other logistics
Percentage of total revenue

6.8 %Logistics
business¥432.5 billion

Other logistics

6.8%¥29.5 billion

Services for individuals and corporations,
hospital relocations, etc.
We offer a pleasant moving experience designed to ensure peace of mind
by directly connecting domestic and overseas facilities for individuals as well
as office relocation and other services for corporations. We also leverage ourlogistics technologies in support of hospital relocations and patient transfers
as part of a suite of reliable, fine-grained relocation services that ensure nointerruption in hospital functions, earning high praise in the process.
SENKO INTEGRATED REPORT 2022

10

Business design

Trading &Commerce GroupOperating a global Trading &Commerce business that
integrates logistics anddistribution in the pursuit ofmaximum efficiency

Our commerce business provides support for internationaltransactions through the import and export of customers’ products
and raw materials.
In every business and area of operations, from the wholesale ofalcoholic beverages and paper products to the sale of food andlogistics-related products and the sale of fuel using fuel cards, wework to maximize efficiency by integrating logistics and information
systems. Our goal is to create new businesses by connecting adiverse range of supply chains and businesses while moving beyond
the framework of conventional logistics businesses.

International
logistics
solutions

Wholesale(alcoholic beverages
and paper)

Logistics ICT

Principal companies

SENKO Shoji Co., Ltd. / AST Corporaiton / Smile Corp. / AZFIT Co., Ltd. /Marufuji Co., Ltd. / SENKO International Trading Co., Ltd.

Business overview
Although we made AZFIT, a household paper products wholesaler, a consolidated subsidiary in April 2021 andworked to increase sales and reduce costs, revenue fell 8,770 million yen from the previous fiscal year to 153,049
million yen due to factors including the application of revenue recognition accounting and other related standards andincreases in purchase price for fuel sales. Segment profit fell 130 million yen to 2,905 million yen.

Trading & Commerce

Percentage of
total revenue

Trading & Commerce

Trading & Commerce(hundreds of millions of yen)(hundreds of millions of yen)

Revenue

Trading &Commerce

1,618

1,530

FY2021

FY2022

Operating profit
30

29

FY2021

FY2022

24.6%

11

SENKO INTEGRATED REPORT 2022

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

T OP IC S
Creating a group of household paper trading companies to boost synergies

Striving to increase market share in the household paper
wholesale industry through intra-group collaboration
In November 2021, we welcomed Cartas Co., Ltd.,a household paper trading company headquarteredin Chuo-ku, Tokyo, whose operations include thewholesale, planning, and sale of household paperand convenience goods, to the Group.
Group companies AST Corporation and AZFIT Co.,
Ltd. operate broad-reaching businesses in thehousehold paper wholesale segment, and adding
Cartas will serve to further accelerate synergies
within the Group. By moving ahead with efforts toimproveproduct
development
and
price
competitiveness and streamline logistics by taking
advantage of delivery networks and expertise, wewill expand our market share in the household
paper wholesale industry while helping create
pleasant lifestyles for consumers.

Business strengths
The SENKO Group’s
approach of integratingproducts and logistics
connects customers to theworld.
We discover business opportunities
and procure products from a variety
of suppliers. Taking advantage ofGroup companies’ logistics expertise,
we help craft and successfully
execute business designs.
From production plants to small
retail shops, we realize optimal supply
chain management (SCM) throughintegrated logistics operations andproprietary, advanced IT systems.
The SENKO Group’s approach of
integrating products and logistics in its
businesses provides comprehensive
support for customers’ developmentof their businesses.

Business design

Rationalizing operations
and logistics

Trade andcustoms
operations
Support for
procurement
and purchasing
Specialized
tradingcompanies

Marketing
Product planningand purchasing

Logistics
ICT

Systems
Solutions
Material handling
Deployment
supportBusiness
supportClient companies
Distribution and retail,drugstores,
home centers,
EC businesses

Contact centers
Other

Logistics network

Joint shipping, logistics processing, inventory control

Execution
supportSENKO INTEGRATED REPORT 2022

12

Regional
revitalization

Living Support
Group

Helping create communities where
everyone can lead a fulfilling life withpeace of mind by positioning ourselvesclose to consumers’ lifestyles

Plant factories

Support for the
next generation

We entered the Living Support business to meet social needs as acorporate group that supports people’s lives. Group companies’
businesses earn praise for contributing to the sustained developmentof local communities, including operating sports gyms and fitness
programs that focus on health in an era when people are living into
their 100s, providing nursing care and nursing services, operating
agricultural businesses that contribute to regional industry and job
creation (plant factories), and offering services in areas like houseworkand childcare.
Going forward, we’ll work to expand our business domain andincrease the sophistication of our services so that we can support
consumers throughout their lives.
Principal companies

Care Terrace Co., Ltd. / Blue Earth Japan Co., Ltd. / Venus Co., Ltd. /Terauchi Co., Ltd. / Procare Co., Ltd. / Senko School Farm Tottori Co., Ltd.

HealthAn era in whichpeople live into
their 100s

Business overview
In our Living Support business, where we are working to expand the health, lifestyle, and food domains, we madeTerauchi Co., Ltd., a membership-based general wholesaler and retailer, a consolidated subsidiary in January 2021. We
also expanded our business domain by welcoming DIA Cleaning Co., Ltd., which operates cleaning and coin laundrybusinesses, to the Group in 2022.
Revenue in our “other businesses” category, which combines Living Support and Business Support businesses, rose
14,315 million yen from the previous fiscal year to 37,550 million yen thanks to the inclusion of new consolidated
subsidiaries in the Group, increased sales, and reduced costs. Segment profit rose 161 million yen to 99 million yen.
Other businesses

Other businesses

Revenue

Percentage of
total revenue(hundreds of millionsof yen)Otherbusinesses

Other businesses

376

Operating profit(hundreds of millionsof yen)

232

6.0%

–1
FY2022

FY2021

FY2022

FY2021*Until FY2022, the Living Support and Business Support business results were reported under the “other businesses” category.

13

SENKO INTEGRATED REPORT 2022

1

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

T OP IC S
Expanding our fitness business and nursing care services in the Kansai region

COSPA Wellness Co., Ltd. joins the GroupIn July 2022, COSPA Wellness Co., Ltd. (formerly
known as OG Sports Co., Ltd.) joined the Group.
The company is striving to achieve new growth in
the SENKO Group, which has a proven record in
health-related businesses, particularly in thefitness space.
With the addition of a company that operates 62
facilities* in and around the Kansai region,
including fitness, swimming, and tennis clubs, theGroup will be able to expand the area served by its
fitness business, develop new services inconnection with its nursing care business, andotherwise strengthen its businesses in the healthdomain. We will continue to develop our Living
Support business, which supports consumers’
lifestyles.
*As of April 2022.

In our Living Support business, we strive to
identify trends in society and discover newsocial value. The SENKO Group is committed
to making a positive impact on society by
redoubling investments centering on
businesses related to health, lifestyles, andfood in a way that meets contemporarysocial needs.
We will also accelerate the creation ofbusinesses and new services that fit into
consumers’ lives while maximizing synergies
with group companies. In this way, we willcontribute to the extension of healthlifespan, enrich nursing care and social
welfare, and realize sustainable local
communities.

ues and soci
al n
l iss
a
n
ee
o
i
d
eg

Agriculture

Sports gyms
Fitness

GeneralwholesaleNewbusinesses
that precisely
target changes insociety andlifestyleneedssResponding to social needs:
Putting down local roots andsupporting consumers’
lifestyles

R

Roles of the businessChildcareHousework
serviceNursing care

Other

Points ofcontact
withconsumers

Business development that takes
advantage of the Group’s strengths(1)
Resolvingsocial issues(2)
Diversifying
businesses(3)
Connections withother businessdomains
SENKO INTEGRATED REPORT 2022

14

Resolution oflogistics issues

Business Support
Group

Optimizing logistics throughsolution consulting, ICT support,
and other services while creating
logistics services that increasecustomers’ corporate value
To realize an optimal logistics system that accommodates a diverse
array of customer needs, we’re developing a logistics consulting
business as well as an information systems business that develops
and administers IT solution systems.
We're also enhancing business process outsourcing (BPO) services
that let businesses outsource certain operations, for example contact
center operations, for staffing agencies and mail order businesses.
These services provide omnidirectional support for customers’
business activities, for example by resolving issues like labor shortages
and allowing them to focus on core operations that create value.

BPO(Outsourcing)Temping andeducation
Contact centers

Principal companies

Logi Solution Co., Ltd. / SENKO INFORMATION SYSTEM Co., Ltd. / Senko
Real Estate Co., Ltd. / S-TAFF Co., Ltd. / Senko Business Support Co., Ltd.

Business overview
In addition to expanding our business domain by welcoming Self Grow Inc., which offers foreign worker staffing andtraining services, to the Group, we launched real estate businesses founded on new schemes, for example by loaning
logistics facilities developed and built by the Group to group companies.
Revenue in our “other businesses” category, which combines Living Support and Business Support businesses, rose
14,315 million yen from the previous fiscal year to 37,550 million yen thanks to the inclusion of new consolidated
subsidiaries in the Group, increased sales, and reduced costs. Segment profit rose 161 million yen to 99 million yen.

Other businesses

Other businesses

Revenue

Percentage of
total revenue(hundreds of millionsof yen)Otherbusinesses

Other businesses

376

Operating profit(hundreds of millionsof yen)

232

6.0%

–1
FY2022

FY2021

FY2022

FY2021*Until FY2022, the Living Support and Business Support business results were reported under the “other businesses” category.

15

SENKO INTEGRATED REPORT 2022

1

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

T OP IC S
Expanding employment of foreign workers and supporting mastery of technical skills

Welcoming a foreign worker staffing business to the Group to
meet societal demand
As a result of welcoming Self Grow Inc., a
Showa-ku, Nagoya-headquartered company that
operates a foreign worker staffing business withfacilities in the Kanto region and Aichi Prefecture, tothe Group, we’ll be able meet growing demand forforeign worker staffing services as Japan’s labor
population shrinks. We’ll grow our foreign worker skill
mastery and staffing business by taking advantage ofthe expertise of Self Grow, which provides
employment support such as training for technicalinterns to a unique customer base including
machinery and food manufacturing companies,
nursing care facilities, and hospitals, to augment thestaffing business currently operated by groupcompany S-TAFF Co., Ltd. In addition, we’re working
to utilize group companies’ management resources
to expand the scale and geographic coverage of ourtraining business, for example by offering training fortechnical interns through Crefeel Nagareyama (inChiba Prefecture), an in-house training facility.

Business strengths
Offering overall optimization for customers’ business activities (value chains)
The SENKO Group is uniquely capable of offering comprehensive proposals outlining optimal supply chain management(SCM) that integrate logistics, information, and distribution. We support the streamlining of management throughoutsourcing of business processes and various issues encountered in the course of pursuing business activities. We offer adiverse array of high-quality solution services, including staffing, technical training, ICT support, and business site acquisition.

ICT support
Foreign worker employment support
Marketing services
Technical training

Services

Infrastructure
Human resources andlabor management
Technological development
Procurement

Improving the corporate
value created by customers’core operations

Staffing
Site acquisition

Sales
Marketing

Form/document processing

Shipping logistics

Contact centers

Purchasing
logistics

Datacenters

Manufacturing

Principal activities

BPO services offeredby the SENKO Group

Support activities
SENKO INTEGRATED REPORT 2022

16

Relationship between Business Activities and the SDGs

SDGs and the business activities of the SENKOGroup, which fosters professional development
and supports consumers’ lifestyles
Business Support

Trading &Commerce

Priority
SDG
themes of
the
SENKO
Group

Logistics consulting / IT solutions / Contact center
operations / Temping services / Hotel operations /Real estate, etc.

Trade / Oil sales / Sales of
convenience goods, food, andalcoholic beverages, etc.

Logistics
Shipping / Storage /In-factory operations /Economic level
Providing new value for society through business operations

Businesses that nurture people and support their daily lives

Promoting green
logistics in partnershipwith customers

Providing resilient
logistics service thatcan withstand natural
disasters

Developing a Living
Support business thatoffers nursing care,childcare, and healthservices

Fostering community
development throughagriculture andrevitalizing local
industry

Through our businessactivities, we look toresolve social issues
through initiatives thatinterconnect withsustainability
measures and tocontribute to therealization of abarrier-freesociety.

Sustainability of the global environment

Installing solar powerand energy-saving
equipment at PD
centers

17

SENKO INTEGRATED REPORT 2022

Reducing the energy use and carbon dependency ofshipping infrastructure (Introducing CNG-powered
vehicles and electric trucks)

Using recycledplastic pallets

Cooperating with the
Osaka Bay
Environment
Restoration ProjectOverview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

The SENKO Group aims to resolve social challenges
and create new value through its businesses, basedon the core approach that economic activities can beachieved with a healthy global environment and agood relationship with local communities.

Data Section

Living Support

Nursing and housework services /Fitness / General wholesale andretail / Childcare / Restaurant
operations / Agriculture, etc.

Crefeel Koto
Traffic safety / Human
resources training / Children’s
Traffic Park, etc.

Priority
SDG
themes of
the
SENKO
Group

business
Logistics processing /International logistics, etc.

Society level

We promote dialog and cooperation with the local community and various stakeholders
associated with the SENKO Group to build a good relationship with society.

Human resources andorganization as the foundation

Cooperation with society

Sustainability
Safety initiatives
Health initiatives
Social initiatives

Promoting healthmanagement
throughout the Group

Fostering thedevelopment of people
and business through
SENKO University

Traffic safety classes
for children atbusiness sites

Offering logistics
safety education andprofessional driver
training at Crefeel
Koto

Environmental level
Sustainability
Environmental
measures

Minimizing the environmental impact of business activities
Recognizing our responsibility for energy consumption and greenhouse gas
emissions as a logistics company, we’re working to maximize understanding
and related reductions.

SENKO INTEGRATED REPORT 2022

18

A Message from the President

On the publication of this Integrated Reportrefining the design of the report in the future so that it

We’ve decided to publish the SENKO Integrated

constructive dialog with stakeholders by communicating

Report 2022 in place of the previous Annual Report andour initiatives for creating value in a sustained manner.

can serve as a communication tool for fostering

CSR Report.
The report provides a comprehensive picture ofmanagement strategies, financial information, andnon-financial content such as information about ESG

19

Operating in the vicinity of lifestyles
embraced as a matter of course

initiatives in order to help shareholders, investors, andOur corporate slogan of “Moving Global” guides another stakeholders understand the SENKO Group’s

effort to go beyond logistics, make the world go round,medium- and long-term value creation story. The Groupand revolutionize business. This approach signals ouris implementing sustainable management for its flagshipintention to pursue growth by developing businesses

Logistics business as well as other businesses. To helpthat augment logistics with additional services even as

readers understand value creation throughout thewe undertake business activities worldwide and moveGroup, this report incorporates ample illustrations,

the world’s goods, for example by entering thephotographs, and other visual elements in what we hope

distribution and manufacturing sectors in addition tois an easy-to-understand introduction to the SENKO

logistics, offering services that combine logistics withGroup’s medium- and long-term growth strategies andsales,

other aspects of its operations. We look forward to

manufactured ourselves.

SENKO INTEGRATED REPORT 2022

andtransporting

products

that

we’ve

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

Becoming a group that delivers new value
to people and society around the theme ofconnectedness
SENKO Group Holdings Co., Ltd.
President and Representative Director
Chairperson, Sustainability Promotion Council

The SENKO Group exists to leverage logistics strengths

In addition to directly addressing issues faced bysituated at the center of the supply chain to create newcustomers’ businesses thanks to our in-house trading

value both upstream (in manufacturing) and downstream

functions, we can incorporate elements of operations(in sales), in line with a system of values that focuses onsuch as our Living Support business, which integrates

changing society for the better.

closely

with

consumers’

daily

lives

and

local

communities. I believe that marshaling all of its resources
The Group Philosophy adopted in 2017 describes ourto treat social issues as business opportunities andhighest mission as “continuously challenging efforts toembrace the challenge of resolving such issues throughcreate services and products as a corporate groupits business activities will be the key to the Group’s future

supporting people’s lives.” Our goal is to operate in thegrowth.

vicinity of lifestyles that consumers embrace as a matterof course by supporting not only business and industry,
but also people’s everyday lives through the developmentof businesses that support logistics as well as the needsof an aging society, health, food, and daily life.

Evaluating materialities based on thecharacteristics of all the Group’s businesses
and investors’ perspective

In this way, we’ll work to realize ongoing growth by

To date, we’ve disclosed information about thedelivering new value to people and society while

importance of key issues for stakeholders and theresolving social issues through involvement with people’s

Company from the perspective of CSR management

lives and industry.

along with associated initiatives as “key CSR measures.”In publishing this new Integrated Report, which

The Group’s strengths: Green logistics and adiverse array of business platforms thatconnect it to consumers and society

incorporates what you might call an integrated mindset,

Although Logistics comprises the SENKO Group’s corebusinesses and assess materialities, including from thebusiness platform, our active pursuit over many years of

we conducted an analysis of materialities while referringto international standards so that we could understandthe characteristics of the Group’s diverse portfolio ofperspective of investors.

not only truck logistics, but also a modal shift that

I believe that the work we've done to identify

combines in-house ships and other domestic marine

materialities has served to clarify the entire Group’s

shipping and rail elements and low-environmental-impact

materialities. In the Logistics business, which among ourgreen logistics is a key strength of the Group. More thanbusiness segments plays a particularly important role,

anything else, these environmentally friendly logistics

decarbonization is a major theme. The Logistics businesssolutions are a major asset that we can bring to bear in ourhas a direct impact on not only our own efforts to reducebusiness activities as society makes a concerted effort togreenhouse gas (GHG) emissions in our corporate

realize decarbonization.

activities, but also on our customers’ GHG emissions,
SENKO INTEGRATED REPORT 2022

20

A Message from the President

Pursuing business activities and growtharound the theme of connectedness

and moving forward with decarbonization in this domain
will have favorable impacts on society as a whole. To that
end, the entire Group will redouble its efforts to realize agreen transformation. I believe that human capital is thesource of the Group’s growth. As Japan’s population
continues to shrink, labor shortages have alreadybecome a challenge for the entire country. While it’s
critical to create a healthy, motivating work environment,
we’ll also work to boost productivity through such means
as developing employee skills and pursuing laborsavings, automation, and a digital transformation (DX)strategy in a variety of operations by utilizing ICT androbotics. We're also planning to develop businessfacilities that contribute to the health of both employees
and local residents and to community development, forexample through sports and childcare facilities at large
logistics centers.

The economic environment is expected to recovergradually in the future, despite concerns about issues
such as the situation in Ukraine, rising resource prices,and the direction of monetary policy in the U.S.
Against this backdrop, the Group formulated a new
Medium-Term Business Plan covering the five-year
period starting in FY2023. Under this plan, we’ll work toconnect supply chains, businesses, the next generation,and the world under the overriding theme ofconnectedness. To that end, strengthening humancapital and ensuring female employees can flourish
professionally will be major priorities.
We’re planning total investments of 290 billion yen
during the plan’s five years. The plan also envisions
manufacturing as new tentpole capability as we look to
tap more multifaceted sources of revenue apart fromlogistics. We’ll work to establish a successful track record

For more information about our materiality analysis, please see page 32.

Inputs (capital and strengths of the Group)Six types of capital owned by the Group
Employee skills, experience, and appetite for innovation● Number of employees: 20,725 (up 1,531 from the previous fiscal year)

Capital that can be used to further business activities● Number of drivers and operators: 12,237 (up 98 from the previous fiscal

year)● Total assets● Number of employees in the Living and Business Support businesses:● Equity ratio

2,217 (up 940 from the previous fiscal year)● 19 consecutive fiscal years of rising revenue, 13 consecutive● Number of participants in educational and training programs at Crefeel

fiscal years of rising ordinary profit

Koto: 637 (down 35 from the previous fiscal year)● Cumulative number of graduates of SENKO University: 98 (up 13 fromthe previous fiscal year)

Assets the organization can use to produce
products or provide services

Financial

Human● Group companies: 161 (up 19 from the previous fiscal year)● Number of companies operating Living and BusinessSupport businesses: 21 (down 1 from the previous fiscal
year)● Total storage floor space: 4.06 million m2 (up 140,000 m2

from the previous fiscal year)● Total number of group vehicles (tractor head): 6,727 (up498 from the previous fiscal year)● Number of ships under management: 69 (unchanged fromthe previous fiscal year)

Manufacturing

NaturalAll renewable and non-renewable environmental resources andprocesses for providing the goods and services that serve as thefoundation for the organization’s past, current, and future success● Modal shift rate: 76.1% (corresponding quarter of the previous fiscal year:

74.9%)● Number of solar power installations: 24 (up 2 from the previous fiscal year)● Solar power generation: 18,990 kWh (up 488 kWh from the previous fiscal
year)● CO2 emission reductions: 4,306 t-CO2 (up 1,011 t-CO2 from the previous
fiscal year)

21

SENKO INTEGRATED REPORT 2022

SocialrelationshipIntellectual

Individual communities, stakeholders, groups, andother networks or their internal institutions andrelationships, and ability to share information inorder to increase individual and collective happiness● Cumulative number of visitors to Crefeel Koto Children’s

Traffic Park: 158,613 (up 14,649 from the previous fiscal
year)● Number of annual participants in traffic safety classes:
306 (up 162 from the previous fiscal year)

Organizational intellectual-based intangible assets● Logistics expertise (Crefeel Koto, an in-house training facility)● Consulting and system proposal capabilities (200 information SEs, 100

logistics SEs)

Strategies for Sustained Growth

Overview of the SENKO Groupso that we can maintain a dividend payout ratio of 30%
while ensuring financial stability.
During FY2027, the final year of the plan, our goal is toachieve revenue of 1 trillion yen and operating profit of
45 billion yen.

Realizing sustained growth while working to
improve corporate value
The COVID-19 pandemic continues to affect supply
chains and consumer demand, and there continues to bea sense of uncertainty concerning the future direction of
the economy, including geopolitical risk, for example withregard to the situation in Ukraine, as well as exchange
rate and financial trends. Nonetheless, the Group willcontinue to work in a concerted manner to operate its
businesses, which comprise key infrastructure, while
giving priority to employee health and safety andcontinued employment.
We will also continue to precisely accommodate theFoundation for Growth

Data Section

requirements of international trends like the SDGs and
ESG governance, to actively incorporate new technologies
and the digital transformation (DX), and to strive to adopt
the latest corporate management practices.
We consider returning profits to investors andshareholders to be a key management priority. We pay a
performance-linked dividend in addition to a stable,
long-running dividend, and we will continue to strive toenhance shareholder returns while working to further
improve the payout ratio. The year-end dividend for the
fiscal year ended March 31, 2022, was 34 yen, reflecting
the Group’s solid performance during the year. We will
also redouble efforts to improve communication withinvestors.
The Group will continue to realize sustained growth
while treating changes in the business environment asopportunities, embracing the challenge of new fields andtechniques, and working to improve corporate value sothat it can meet the expectations of investors andshareholders.

Value creation process

Delivering new value to people and society

OUTCOMENew
businesses

LivingSupport

Moving Global

Business

Go beyond logistics
Make the world go roundsuppor

Trading
Comme &
rce

Revolutionize business

Logistics
Materialities
ESG +HBusine
ss

INPUT

base

The Group’s unique values and capitaltw
Ne insamdoResolving social issues

ed
as l
e
r
Inc ocia ct
s
pa
im

n
tio
da wthnu
Fo r grofods
an ioning unctn
he f fgt t od f
ren men al an on o
t
S ce
s ati
o
n
p
ha Pro ent gies
enlemratep
im st[Long-term social value]●Realization of healthy, fulfilling
lifestyles●Development of resilient social andindustrial infrastructure●Contributions to the realization of asustainable society[Short- and medium-termsocial value]
Contributions to the SDGs andcarbon neutrality●Realization of connections between
businesses●Design based on new values●Realization of connections with theworld (society) towards a better
futureSENKO INTEGRATED REPORT 2022

22

New Medium-Term Business Plan
Looking back on the previous Medium-Term Business Plan
During the five years covered by the previous Medium-Term Business Plan, revenue rose 167.7 billion yen, or 36.8%,
while operating profit rose 7.69 billion yen, or 45.0%. Performance failed to achieve the plan's targets due to factors
including the application of revenue recognition accounting standards and the effects of the COVID-19 pandemic.

Previous Medium-Term Business Plan: Targets and results
FY2017

Difference(1) Results(2) Medium-TermBusiness Plan target(3) Results

Revenue

Hundreds ofmillions of yen

4,554

7,000

6,231

Operating profit

Hundreds ofmillions of yen

170.8

280.0

247.7

(3)-(1), vs. FY2017(3)-(2), vs. target

1,677

(769)

36.8%

76.9

(32.3)

45.0%

Operating profit margin

%

3.8

4.0

4.0

0.2

—

ROE

%

9.5

10.5

10.8

1.3

0.3

0.58

0.64

0.95

0.37

0.31

35.1

40.2

30.6

(4.5)

(9.6)

Net D/E ratio
Equity ratio%

Logistics center storage area

Number of company vehicles[Tractor head]

Number of employees

FY2017FY2017FY2017

3.22

4,426

13,915

FY2022

FY2022

FY2022

6,727

20,725

million m2

4.06
million m2

23

FY2022

SENKO INTEGRATED REPORT 2022

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

Overview of the new Medium-Term Business Plan
The Group formulated a new Medium-Term Business Plan covering the five-year period starting in FY2023. Under thebasic policy of “striving to achieve sustained growth by supplying new value to people and society through the
deepening and creation of businesses,” the Group will address five key issues under the plan: (1) expanding anddeepening existing businesses, (2) creating and fostering the development of growth businesses, (3) implementing
ESG+H (health) management, (4) practicing more sophisticated management, and (5) increasing motivation andrealizing personal growth among employees.

New Medium-Term Business Plan slogan

Connecting supply chains

Connecting the world

Go beyond logistics
Connecting supply chainsby moving beyond the framework of
conventional logistics businesses

Make the world go round
Becoming an international business thatconnects the world by undertaking
business activities worldwide

Connectedness
Connecting all businesses

Connecting to the next generation

Revolutionize businessConnecting all businesses in the world sothat we can provide new value

Passing the baton
Becoming a business where the next generation of
employees, who will be responsible for the future,
can grow and flourish professionally

Key issues identified by the new Medium-TermBusiness Plan
Expanding and deepening existing businesses
Creating and fostering the development ofgrowth businesses
Implementing ESG+H (health) management

Overall numerical targets under the new
Medium-Term Business Plan
Revenue(hundreds of millions of yen)

Operating profit(hundreds of millions of yen)

10,000

450

6,231
248

Practicing more sophisticated management
Increasing motivation and realizing personal
growth among employees

FY2022
Results

FY2027
TargetFY2022
Results

FY2027
Target

SENKO INTEGRATED REPORT 2022

24

New Medium-Term Business Plan

Targets and key measures by business under the new Medium-Term Business Plan
Expanding and deepening existing businesses● Expanding existing business domains ● Further globalizing operations

Logistics business

Domestic logistics● Expanding orders based on comprehensive proposal

capabilities and the stability of our directly operated approach

Revenue(hundreds of millions of yen)

Operating profit(hundreds of millions of yen)
Operating profit margin

346

6,450

pursuing M&As

Cold logistics● Accelerating facility development and further expanding our

238

4,406

● Strengthening logistics facilities and vehicle structures anddelivery network

International logistics

5.4%

5.4%

● Establishing a global network by expanding our facilities

FY2022
Results

FY2027
Target● Increasing our market share by increasing the amount ofMarine shipping
FY2027
TargetFY2022
Results

shipping space

Trading & Commerce
Revenue(hundreds of millions of yen)

1,950

Operating profit(hundreds of millions of yen)
Operating profit margin

38

1,461

and increasing market share
Commerce

2.0%
FY2027
TargetFY2022
Results

products we offer

Household paper wholesaling● Streamlining operations at our three wholesale companies

25

1.7%
FY2022
Results

Product sales● Strengthening EC sales and expanding the range of unique

FY2027
Target● Maintaining and increasing trademarks through operation of a

joint venture with a Chinese electronics material trading
company

Revenue targets by segment
FY2022

FY2027

Food logistics

822

1,150

Chain store logistics

837

1,250

Fashion logistics (including EC logistics)

495

650

Other logistics

398

750

2,552

3,800

Chemical logistics

848

1,300

Housing logistics

617

750

Other logistics, etc.

388

600

4,406

6,450

Distribution
Logistics
Logistics business

Subtotal

Subtotal

1,461

1,950

Living Support

288

800

Business Support

77

300

6,231

10,000Logistics business

436

770

Trading & Commerce

321

430

756

1,200

Trading & Commerce

500

Other businesses
Total
International
revenue*
Subtotal*Included in above figures. *FY2022 figures have been restated to reflect the application of changes in segment accounting standards made in FY2023.

25

SENKO INTEGRATED REPORT 2022

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

Creating and fostering the development of growth businesses● Further expanding the Living Support and Business Support businesses ● Embracing the challenges of new businesses (manufacturing, etc.)

Living Support
Revenue(hundreds of millions of yen)

800

Operating profit(hundreds of millions of yen)
Operating profit margin

48
6.0%

Health domain

Lifestyle domain

Food domain● Realizing a fast recovery from the downturn caused by the

COVID-19 pandemic and expanding the number of outlets weoperate● Pursuing M&As in the health, lifestyle, and food domains

288
-7
-2.4%
FY2027
TargetFY2022
Results

FY2022
Results

FY2027
TargetBusiness Support
Revenue(hundreds of millions of yen)

300

Other businesses

Operating profit(hundreds of millions of yen)
Operating profit margin

Revenue(hundreds of millions of yen)

500

26

Operating profit(hundreds of millions of yen)
Operating profit margin

20

4.0%

8.4%
77

FY2027
TargetFY2022
Results6

8.5%

FY2022
Results

FY2027
TargetReal estate, information, staffing, etc.

FY2022
Results

FY2027
TargetFY2022
Results

FY2027
Target● Entering new fields● Realizing a fast recovery from the downturn caused by the

COVID-19 pandemic● Pursuing M&As, for example in the staffing business(Unit: Hundreds of millions of yen)Amount of increase

Rate of increase

328

39.9%

413

49.3%

155

31.4%

352

88.4%

1,248

48.9%

452

53.2%

133

21.5%

212

54.6%

2,044

46.4%

489

33.4%

512

177.8%

224

292.2%

500

—

3,769

60.5%

334

76.8%

110

34.2%

444

58.7%

Key measures in ESG and groupmanagement
Specific CO2 emissions(land transport business)

Reduce 10% compared to FY2021

Percentage of management
positions held by females

At least 15%● Implementing in-house environmental measures andpromoting model shift● Reforming programs to take advantage of a diverse workforce

and expanding employment opportunities● Introducing advanced technologies to realize automation andlabor savings● Practicing health management through sports and culturalactivities
We will pay a performance-linked dividend in addition to astable dividend, and we will strive to enhance shareholder
returns while working to further improve the payout ratio.

SENKO INTEGRATED REPORT 2022

26

Feature

The SENKO Group’s
Decarbonization
Strategy
Approach to decarbonization
Reflecting our commitment to helping achieve thecommitment made by Japan to the global community
to reduce CO2 emissions by 35.0% from 2013 levels by
2030, the SENKO Group is working to improve its
environmental performance so that it can contribute tocustomers and local communities.
As a leading environmental business, we will actively work tovisualize our environmental measures.

Strategy

StrategyGroupwide
Energy savings
We’re working to realize more efficient andeffective use of electrical power as we look toswitch to LED lighting and install alternative HVAC
systems at multiple large facilities.

Renewable energy
Having launched a solar power businessdesigned to promote adoption of renewableenergy in FY2014, the Group supplies electricity
to multiple power companies. Going forward, we
will accelerate use of renewable energy at
logistics centers.

Clean procurement
The Group is undertaking initiatives to realize acircular economy which reduces new resource use
and encourages the recycling and reuse of existing
resources.
Although our logistics centers have previously
discarded the stretch film used to secure freight
as industrial waste, all such film is now used tomake recycled garbage bags as part of a joint
initiative with a recycling processor, realizing
cyclical use.

27

SENKO INTEGRATED REPORT 2022

2

We’re working in a systematic manner towards decarbonizationin strategic investments and services in our Logistics segment.

1

Decarbonization in
the Logistics businessGreenification of in-house shipping
equipment and logistics facilities
We’re introducing environmentally friendly
trucks with reduced CO2 and NOx emissions, forexample electric and hybrid trucks. By leveraging
the environmental advantages of these vehicles,
specifically their lack of soot and sulfur oxide
emissions, we’re meeting customers’ desire forlow-carbon shipping.

Promotion of modal shift
The Group began promoting and implementing
green logistics, an approach characterized by areduced environmental footprint, early on. We've
won praise for initiatives designed to realize adecarbonized society, including a modal shiftcombining rail and marine shipping, introduction oflarger trucks, and consolidation of logistics facilities.

Risk analysis and feedback to businesses
As part of the transition to the Prime Market in
FY2023, we've been disclosing information related
to climate change in accordance with the Task
Force on Climate-Related Financial Disclosures(TCFD). In FY2023, we also launched a
Sustainability Promotion Department
anddisclosed
information
about materialities.

Overview of the SENKO Group

Strategies for Sustained Growth

Strategic decarbonization
themes in the Logistics business

Foundation for Growth

Data Section

Greenification of facilities and equipment

Building and making environmental improvements at logistics centers andother facilities through green bond funding
We’ve been issuing green bonds using a public subscription model in the domestic market. As we streamline logistics
and promote green logistics while helping reduce greenhouse gas emissions, we’ve worked to more clearly demonstrate
our commitment to the global environment by issuing green bonds to fund PD center construction.
These green bonds were used to fund the cost of building the Gifu Hashima PD Center and Wangan Yatomi PD Center,
which opened in May 2021. In addition to reducing CO2 emissions associated with shipping by streamlining customers’
logistics through operation of these two PD centers, we’ve reduced our own, in-house CO2 emissions by realizing energy
savings and use of renewable energy at the facilities. Through these initiatives, we’re striving to realize even greener
logistics.
Strategic decarbonization
themes in the Logistics business

Modal shift

Helping streamline shipping and reduce CO2 emissions
Transporting goods by rail and ship is more energy-efficient than using cargo vehicles, which both helps cut CO2
emissions and prevent air pollution.
The SENKO Group operates its own fleet of ships, and it’s provided more efficient shipping service through a modal
shift to rail and marine transport. Similarly, we’re working to reduce environmental impacts and shorten driver working
hours through a modal shift to rail shipping, which generates significantly less CO2 emissions–and uses lessenergy–than shipping by truck.

A group leading the way to a modal shift
The SENKO Group, which has actively promoted amodal shift, has earned a variety of awards, including
the Logistics Environment Award.
In June 2022, SENKO Co., Ltd.; Runtec Corporation;and Saitama-minami SENKO Lodge Co., Ltd. earned
three special prizes at the 23rd Logistics Environment
Awards, hosted by the Japan Association for Logistics
and Transport. The award program was created in June
2000 to recognize companies that contribute to thedevelopment of the logistics industry, for example
through exceptional environmental protection activities,
environmental awareness-raising, or development ofpioneering technologies. Runtec was recognized forhelping reduce CO2 emissions and driver workload
associated with small-/mixed-lot transport (refrigerated
and frozen food products) by switching from truck to rail
for shipments from Miyagi Prefecture to Hyogo

Prefecture and by consolidating two shipping routes(Fukuoka Prefecture to Hiroshima Prefecture, andFukuoka Prefecture to Hyogo Prefecture) into a single
run using larger vehicles by switching from 13.5-ton
refrigerated trucks to 20-ton trailers. We’ve also earned
the right to display the “Eco Ship” and the “Eco Rail”
marks as a logistics company that uses environmentallyfriendly marine and rail shipping for a certain
percentage of shipments, and we continue to propose
environmentally responsible logistics services andshipping channels other than truck transport.

SENKO INTEGRATED REPORT 2022

28

Feature The SENKO Group’s Decarbonization Strategy

Case study

1 SENKO Sennan PD Center

Launching a logistics facility leasing business
SENKO Sennan PD Center, which was completed in March 2022, was built by SENKO Group Holdings Co., Ltd. andleased to SENKO Co., Ltd. becoming the Group’s first leased logistics facility. The facility also began self-consignment of
power generated by its solar panels. The center enjoys easy accessfor deliveries in the Kansai region, particularly downtown Osaka,
and it’s located ideally for processing imports and exports ofinternational freight. Its location is not part of any danger areas on
flooding, landslide, or tsunami hazard maps, and it maintains abusiness continuity plan (BCP).
We’re using the facility to launch a logistics facility leasing
business, with the goal of providing higher-quality, lower-costleases to the SENKO Group. We plan to build more such facilities in
the future while working to ensure they provide an attractive
exterior design and an appealing, employee-friendly environment,
for example by incorporating break areas where workers can relax.
Sennan PD Center

Streamlining operations and contributing to the realization of a decarbonized society
Thanks to the introduction of a solar power purchase agreement model for private consumption*1, the Sennan PD
Center began using power from solar panels covering its roof (682.5 kilowatts) as of April 1, 2022, while employing aself-consignment scheme*2 to share surplus power with other SENKO Group companies in partnership with Kansai
Electric Power Co., Inc. The initiative is the first in Japan*3 to use a self-consignment scheme to share power with threefacilities in the same group: two logistics facilities operated by SENKO Co., Ltd. in Hyogo Prefecture and a commercial
facility operated by Terauchi Co., Ltd. in Osaka.
The SENKO Group plans to streamline operations and contribute to the realization of a decarbonized society by
expanding the initiative to the entire group.

PPA model for solar power private
consumption and self-consignment
Renewable electricity(Surplus power)
Location of generating system(Sennan PD Center)

Power transmission network operated
by a power transmission company

Renewable electricity

Location of demand (2 sites in
Hyogo Prefecture and 1 site in Osaka)Renewable electricity(Private consumption)
Solar power generation
On-site service
Provision of selfconsignment support service

Supply of power
to cover any shortfall*1 PPA model for private consumption: The supply, for a fee, of power generated by equipment installed by a company that owns and manages generating
equipment (the PPA business) in space, for example on a roof, provided free of charge by that facility.
*2 Self-consignment: An arrangement in which a company uses the power transmission network to send power generated from solar panels it has installed to otherfacilities it operates.
*3 Per research by Kansai Electric Power.

29

SENKO INTEGRATED REPORT 2022

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

2 Tandem tractor-trailers

Case study

Helping reduce both driver working hours and CO2 emissions
An increasingly serious labor shortage caused by the aging of truck drivers and legal changes to cap driver overtime
to 960 hours a year in 2024 are expected to make smooth delivery of freight to destinations difficult using current
long-distance transport methods, possibly causing an economic bottleneck.
To address this challenge, SENKO Co., Ltd. began operating tandem tractor-trailers, which allow one driver totransport two trailers’ worth of cargo, for long-distance shipments in January 2021. After departing SENKO’s facility,
tandem tractor-trailers carrying two large trucks’ worth of separately collected cargo are driven by a single driver for the
long-distance part of their journey on expressways, with driver changes at tandem tractor-trailer docking stations along
the route. The new driver drives the trailers to the location at which they’re scheduled to be separated, where theassembly is split into a large truck and a semi trailer using a method known as the dolly method*. The trailers are thendriven to their respective destinations, helping reduce both driver working hours and CO2 emissions.
*Dolly method: A method for connecting and disconnecting trailers using a dolly. Tandem tractor-trailers consist of a trailer connected behind a 10-ton truck using a dolly.

Tandem tractor-trailers

Development of next-generation, long-distance shipping on core routes while
addressing environmental issues
Enlisting the cooperation of Asahi Kasei

Benefits of introducing tandem tractor-trailers

Homes Corporation and Fujitec Co., Ltd., webegan shipping freight for the two companies
using tandem tractor-trailers. The initiative isthe first of its kind in Japan to separate tandem
tractor-trailers midway along a route so that

Reduction in driving time
Hours driving per year

484.8 t-CO2

3,908

different customers.
shortagewhile

helping

realize

generation, long-distance shipping on core

BEFORE

AFTER

About
%
Reduction in
driving time

Tandemtractor-trailers
Compared to previous
approach163.2 t-CO2

40adecarbonized society by developing next-

321.6 t-CO2

Tandemtractor-trailers
Compared to previous
approach

2,532

Going forward, SENKO will help address thedriverCO2 emissions per year

6,440

the trailers can be delivered simultaneously to

CO2 reduction

30

BEFORE

AFTER

About
%
Reduction inemissionsroutes through increased use of tandem
tractor-trailers.

SENKO INTEGRATED REPORT 202230

ESG+H Initiatives
Promoting sustainable management
With global society facing numerous challenges, SENKO believes contributing to society by working to resolve thosechallenges through business activities is important in order to generate sustained growth.
The SENKO Group will work to provide value that leads to the resolution of social issues through its business activities
by practicing sustainable management so that it can continue to grow and develop alongside society.

Management structures underpinning sustainable management
Corporate Ethics, Compliance, Risk Management, Environmental Promotion, and Social Contribution Promotion
Committees formed to resolve a variety of social issues undertake a range of activities related to sustainability.
The Sustainability Promotion Council, which is chaired by the president of SENKO Group Holdings Co., Ltd., oversees
these committees.
Corporate Ethics Committee
Compliance Committee
Sustainability Promotion Council

Risk Management Committee

Chairperson: SENKO Group
Holdings President andRepresentative Director

Environmental Promotion Committee
Social Contribution Promotion Committee

Sustainability Policy
The SENKO Group strives to deliver new value by helping realize a sustainable environment and society, working toachieve sustained growth for the Group, and connecting people and society through its various businesses.

SENKO Group stakeholders and their relationships

SENKO GroupThe SENKO Group operates its businesses with the goal of earning the trust of all stakeholders.

31

Shareholders●Optimal distribution of profits ●Transparent management●Appropriate disclosure of information

Customers●Provision of safe, environmentally friendly services●Partnerships ●Appropriate disclosure of information

Local communities●Traffic safety ●Environmental responsibility●Regional exchanges ●Contributions to society●Appropriate disclosure of information

Government●Legal compliance ●Traffic safety●Environmental responsibility

Employees●Assurance of occupational health and safety●Human resources development●Fair promotion of human resources

Business partners●Partnerships ●Environmental responsibility

SENKO INTEGRATED REPORT 2022

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

Analysis of materialities
The SENKO Group has identified a “Medium-Term Policy of CSR” outlining issues that are important to stakeholders
and which have a significant impact on the Group’s management. As the importance of sustainability grows worldwide,
for example in the form of ESG and the Sustainable Development Goals (SDGs), the Group conducted an analysis of key
issues (materialities) due to the ever-changing nature of megatrends with the potential to impact its businesses.
Specifically, we determined that the Group’s business segments are related to 28 of 77 sectors identified by the
Sustainability Accounting Standards Board (SASB) in its standards. We then looked at the materialities required of those
28 sectors and identified issues that the Group should address through its businesses, taking into account sales ratios
and business impacts. As a result of a careful examination that included key measures in the Group’s management, weestablished the following initiative areas (materialities) related to the environment, society, governance, and health.

Priority CSR measures, SDG themes, and materialities
Priority CSR measures

Priority
SDG
themesMaterialities and related
initiatives based on the SASB

Corresponding
initiatives

1. Environmental measures(1) Focus on meeting energy-saving targets as a Specified
Corporation.
(2) Make improvements related to "Reduce with energy-saving,”“Recycling rate” and “Green product procurement rate” andcontribute to a recycling-oriented society.
(3) Organize environment-related information of group companies,
and aim to achieve the same environmental targets.
(4) Actively install fixtures with a low environmental impact, suchas LED lighting and low-emission vehicles.
(5) Increase use of alternative energy sources, such as installing
solar panels on new facilities and increasing the number of large
CNG vehicles.
(6) Actively promote modal shift to customers as a way of
implementing green logistics.

2. Safety initiatives(1) Establish a health and safety management system that caters
to the characteristics of group companies.
(2) Utilize big data to centralize various types of safety-related
systems.
(3) Actively install (active safety) technologies to prevent accidents
from occurring.
(4) Create opportunities to share and learn about safety
technologies.

3. Health initiatives(1) Manage the health information of all group employees topromote the importance of staying healthy.
(2) Enhance health management to eliminate accidents caused byhealth problems.
(3) Conduct stress checkups to develop management systems forpreventing mental health problems.
(4) Work with health insurance unions to strengthen healthpromotion activities.

4. Social initiatives(1) Hold traffic safety classes and local clean-up drives tocontribute to the local community.
(2) Organize volunteer activities, such as education support
programs outside Japan.

E
Environment
P33

Environment● Climate change measures● Circular economy

S
SafetySocial/safety/security

P37● Diversity and inclusion● Assurance of safety● Responsible procurement
structures

S
SocialGovernance

P40● Risk management● Compliance● Information disclosure

HealthG
Governance● Infectious diseasemeasures● Management of employees’
physical and mental health

P43

H
HealthFor more about the relationship between SENKO’s businesses
and the SDGs, please see pages 17 and 18.

P47

The SENKO Group will choose key issues (materialities) to address through its business activities while making
reference to the priority CSR measures and materialities. We plan to review key issues on an ongoing basis.
SENKO INTEGRATED REPORT 2022

32

ESG+H Initiatives

E Environment
Initiatives to reduce environmental impacts
Deploying advanced environmental trucks

Introducing recycled plastic pallets

The SENKO Group is deploying advanced environmental
trucks, for example hybrid vehicles (HVs), natural gas vehicles(NGVs), and electric vehicles (EVs), which generate fewer
CO2 and NOx emissions than diesel trucks. During FY2022,
we deployed five light cargo EVs for last-mile use and two
3-ton EV trucks. By leveraging the environmental advantagesof such vehicles, which generate 65% fewer CO2 emissions
than a conventional
light delivery van, andmore than 25% lessthan a diesel truck,
we’re accommodating
customers’ desire for
A 3-ton EV truck and light EV van at SENKO’s
low-carbon transport.
Komaki Branch

The SENKO Group is introducing environmentally friendly
recycled plastic pallets. These pallets are manufactured
using recycled plastic fromused pallets, containers, andother packaging containers.
Pallets that can no longer be
used, for example due todamage, can be recycled
again as part of the Group’scommitment to addressing
environmental problems byusing environmentally
responsible products.
Recycled plastic pallets

Accelerating private consumption of solar power from panels installed on logistics center rooftops
The SENKO Group launched its solar power business in FY2014, and it
supplies renewable energy to various power companies. Since FY2021, we’ve
pivoted to in-house use of solar power and worked to transition to non-fossil,
renewable energy for power used at logistics centers on clear days.
In FY2021, SENKO Co., Ltd. installed its first large-scale in-house solar powersystem (with a generating capacity of 1,051 kW) at Gifu Hashima PD Centerand established a model in which surplus power not used by the company isshared with a new power company as its source of power. We continue to makeprogress on the issue of accelerating use of renewable energy at logistics
centers.

Power
generation
vs. FY2021

Up 1,887 kW

Number ofsolar power
installations

Gifu Hashima PD Center, which began using solar power
in-house in collaboration with a new power company

FIT power-selling
installations: 20

Private-consumption
installations: 4

16,400 kW 3,500 kW
SENKO Group solar power generation

Continuing initiatives to protect biodiversity
The SENKO Group began an initiative to protect biodiversity in FY2020,
and in FY2022, SENKO Co., Ltd. held environmental tree-planting
programs to plant saplings at the sites of logistics centers and otherfacilities at 10 branches and two group companies. Initiatives to pass on agreen legacy to the next generation serve to improve workplacecommunication while contributing to local communities.
We also joined local environmental conservation groups in participatingin ocean conservation activities targeting Osaka Bay and the Seto Inland
Sea. These activities also helped protect marine biodiversity by creating ahome for ocean-dwelling creatures through the raising of eelgrass, a typeof seaweed.

33

SENKO INTEGRATED REPORT 2022

Commemorative photograph taken
during an environmental tree-planting
program

Raising eelgrassOverview of the SENKO Group

Foundation for Growth

Strategies for Sustained Growth

Data Section

Environmental targets and results
CO2 reduction initiatives and results
The SENKO Group assess energy use and CO2 emissions associated with its business activities and applies the results to its
environmental protection activities. We’re currently implementing a variety of initiatives to reduce environmental impacts
while working to achieve the CO2 reduction target set forth in the five-year Medium-Term Business Plan that started in FY2023,
specifically a 10% reduction from FY2021 levels in CO2 emissions from the land transport business per unit of revenue(expressed as tons of CO2 emissions per million yen of revenue).

Breakdown of the SENKO Group’s CO2 emission sources
INPUT

SENKO Co., Ltd.

OUTPUT

Fuel use*1(kℓ)

Power use

(Tens of thousandsof kWh)Scope 1(t-CO2)

Scope 2(t-CO2)Total(t-CO2)

Ratio(%)

16,5107,465

43,50034,79878,29819

SENKO Line Co., Ltd.

7,989

0

21,4850

21,485

5

SENKO + SENKO Line

24,4997,465

64,98534,79899,78324

Group (excluding above)

103,362

9,107

277,482

43,383

320,86576

127,861

16,572

342,467

78,181

420,648

100

Total

*1 Fuel use is calculated in terms of crude oil (kL).

SENKO Group CO2 emissions(■■■ CO2 emissions (t)*2● CO2 emissions (t) per million yen of revenue*3)

SENKO + SENKO Line
1.21

1.15

Group total*5

1.10

1.03

0.99

0.97

94,276

95,336

98,02096,926

98,39099,783

2017

2018

2019

2020

2021

2022 (FY)■ New target companies(8 companies)■ Existing target companies(81 companies)

Per million yen vs. FY2017
CO2 emissions reduction rate

1.01*4

1.01

Target

FY2018 to FY2022
Cumulative five-year results-8.2% -19.8%

420,648
16,416404,232

393,0370.94

0.85
2022*6 (FY)2021

*2 Emissions include Scopes 1 and 2. *3 Revenue is calculated for flagship businesses corresponding Scopes 1 and 2. *4 CO2 emissions per million yen of revenue in the landtransport business. *5 Consisting of 57 logistics companies, including SENKO Co., Ltd.; SENKO Line Co., Ltd.; and SENKO Group Holdings Co., Ltd. along with seven trading andcommerce companies and 25 other companies, for a total of 89 companies. *6 FY2022 trading department revenue prior to application of revenue recognition accounting
standards. The specific unit after the application of revenue recognition accounting standards is 0.94 t-CO2/¥1 million.

FY2022 CO2 reduction targets and results(t-CO2)

FY2022 CO2 reduction target

ResultAchievement rate

1,700

1,601

94%

SENKO + SENKO Line
Other
Total

1,700

2,705

159%

3,400

4,306

127%
CO2 reduction

Priority measure

SENKO Co., Ltd.
+SENKO Line Co., Ltd.

Other

Total

625

1,540

2,165

857

946

1,803

119

219

338

Total

1,601

2,705

4,306

Green logistics CO2 emission reduction benefits from proposed improvements to customers’
logistics systems, including modal shifts, facility consolidation, joint transport andproposalsdeliveries, and use of larger vehicles

766

293

1,059

(1) Promoting the transition to energy-saving vehicles

Scope 1

Fuel savings

Scope 2

Power savings

Scope 3

Recycling-based (1) Recycling discarded wood pallets
society(2) Promoting use of recycled tires(2) Promoting the transition to environmentally friendly forklifts(3) Installing other environmentally friendly equipment(1) Switching to a new power company and revising fees(2) Switching to energy-saving equipment (LED, air-conditioning)(3) Utilizing renewable energy from solar power installations

Note: Since the publication of ESG data (FY2022 edition) and the SENKO Group Report (for the 105th fiscal year), we’ve reviewed CO2 reduction activity assessment standards andreexamined results values to take account of benefits such as the transition to power companies with lower CO2 emissions coefficients and private consumption of solar power
generated at group facilities.
SENKO INTEGRATED REPORT 2022

34

ESG+H Initiatives

E Environment
TCFD initiatives
Climate change is a global environmental issue, and we consider dealing with it to be a key issue for sustainable
management.
As a result, the SENKO Group is committed to addressing climate change in a serious manner, and we’ve contributed
to the realization of principles related to environmental action, for example by signing the United Nations Global
Compact in October 2020.
In FY2023, we began disclosing information related to climate change in accordance with the recommendations of
the Task Force on Climate-Related Financial Disclosures (TCFD) in a timely and appropriate manner.

GovernanceDuring FY2023, the Board of Directors acted to increase the Group's medium- and long-term corporate value throughthe implementation of sustainable management by creating a new executive officer position in charge of sustainability
and assigning the deputy manager of the Administrative Department to hold it, and by creating the Sustainability
Promotion Council chaired by the president and representative director and consisting of a membership that includes
outside directors.
The Council convenes twice a year to discuss important matters related to the Group’s environmental (E), social (S),governance (G), and health (H) activities and reports to the Board of Directors concerning its discussions and the resultsof associated activities.
The Sustainability Promotion Department, which is responsible for administering the Sustainability Promotion
Council, facilitates the implementation of operational initiatives by core companies in the Logistics, Trading &Commerce, Living Support, and Business Support businesses along with sustainability coordinators in Business
Promotion Divisions. It reports to the Sustainability Promotion Council.
Governance structures
Board of Directors
Chairperson:
HD President and Representative Director
Outside directors and other HD officers

Sustainability
Promotion Council

Business companies’ presidents
Sustainability
Promotion Department

Officer in Chargeof Sustainability

Responsible personnel atcore business companies
Responsible personnel in
Business Promotion Divisions

Risk management
The Group strives to deliver new value by connecting people and society through its various businesses in line with its basic
policy of helping realize a sustainable environment and society and working to achieve sustained growth for the Group.
In keeping with the above policies related to sustainability, we work to resolve environmental (E), social (S),governance (G), and health (H) issues and consider addressing climate change to be a top-priority issue.
In addition, we’ve created a Risk Management Committee and an Environmental Promotion Committee that report to
the Sustainability Promotion Council. The Risk Management Committee identifies risks that the Group faces now or is
likely to face in the future and develops organizational and appropriate preventive measures and improvement
measures to address those risks. The Risk Management Committee has created a Natural Disaster Risk Subcommittee,
which is working to increase the Group’s resilience by inspecting and reviewing its business continuity plan (BCP) andthrough other initiatives.
In addition to establishing an Environmental Initiative Policy to guide the Group’s efforts to protect the environmentand reduce environmental impacts and spreading awareness of the policy among employees and other workers, theEnvironmental Promotion Committee manages environmental targets in areas including CO2 reductions, renewableenergy use, and waste recycling.

35

SENKO INTEGRATED REPORT 2022

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

StrategyThis fiscal year, we carried out a scenario analysis for the Logistics business to identify risks and opportunities
associated with climate change. We clarified important transition and physical risks and opportunities and studied theirmedium- and long-term effects as well as countermeasures.

Opportunities

Physical risks

Transition risks

Category

Anticipated risks and opportunities

Impact on the GroupCountermeasures

Public policy, law, andregulations(Carbon pricing)• Rapid increases in fuel prices• Rising cost burdens• Promotion of transition to environmentallyfriendly vehicles (EVs, HVs, LNGs,
environmentally friendly DSLs, etc.) andtandem tractor-trailers• Promotion of modal shifts• Study of the future introduction of FCVs, LNGs,
and ammonia-fueled ships• Initiatives as a GX League sponsor

Technologies(Delays in renewableenergy and energy-saving
technologies)• Difficulty in achieving GHG
reduction targets• Increases in renewableenergy, every savings, andcarbon credit procurement
costs• Management of the Group’s energy use andenergy-saving measures• Assurance of power from renewable sources

Markets(Changes in the size of thecustomer base)• Selection of lower-carbon
services by customers• Stagnation in market share if
we fail to provide low-carbon
services• Disclosure of CO2 emissions, including Scope 3• Provision of decarbonization choices, forexample through use of environmentallyfriendly vehicles, modal shifts, and logistics
facility consolidation

Acute risks(Extreme weather)• Interruptions in the operation ofroad, rail, marine, and airtransport• Rising cost of continuing
Logistics business operations

Chronic risks(Sea level rise)• Need for measures to prevent
flooding at logistics facilities andreassess siting• Costs associated withactivities such as risk surveys
and relocation of logistics
facilities

Chronic risks(Rising temperatures)• Risk of heat illness• Increased employee attrition• Employee health impacts• Increases in insurance
premiums, hiring costs, etc.

• Development of a safe workplace environment• Promotion of automation and labor-saving
measures

Technologies(Adoption of renewableenergy and energy-saving
technologies)• Transition to renewable energy
sources; increased use ofrenewable energy andenergy-saving technologies, forexample through introduction of
in-house power generation• Stable supply of low-cost,
low-CO2 energy• Revenue from the sale ofpower generated at groupfacilities• Installation of solar power facilities and shift toprivate consumption of generated power• Transition to LED lighting and environmentallyfriendly air-conditioning control• Transition to solar power, wind power, etc.

Technologies(Development of
next-generation
technologies)• Growing adoption of
next-generation logistics
technologies that improve vehicle
loading and operating efficiency,
for example joint logistics service• Reduced logistics costs• Reduced CO2 emissions• Development and introduction of systems thatprovide optimal transport patterns and routes• Promotion of automation and labor-saving
measures through the digital transformation(DX), etc.

Markets(Liquefiedhydrogen/liquefied
ammonia)• Growing demand for transport ofliquefied hydrogen by trucks as
adoption of fuel cell trucks rises• Growing demand for transport ofliquefied ammonia by ships• Increased revenue related tothe transport of liquefiedhydrogen and liquefied
ammonia• Expansion of existing businesses anddevelopment of next-generation energy
transport structures

Markets(Circular economy)• Increased reuse and recycling of
EV batteries, solar panels, andwaste plastic• Increased revenue related tologistics services associatedwith reuse and recycling• Targeting of existing and new customers basedon demand for climate change
countermeasures• Development of logistics platforms

Reputation(Investors’ evaluations)• Praise from investors for properly
disclosing information about how
we deal with climate change risk

• Growth in corporate value;fund procurement at
favorable terms• Deepening of disclosure of information to
stakeholders• Fund procurement through means such as
green bonds• Development of BCPs and staging of
associated training• Purchase of supplies• Collaborative support among facilities• Dispersion of facilities• Provision of alternative transport routes

Indicators and targets
Under the five-year Medium-Term Business Plan that began in FY2023, we’re working to realize sustainable growthof our businesses through environmental initiatives designed to achieve carbon neutrality by undertaking strategic
investments and other measures, with the principal target of reducing CO2 emissions per unit of revenue (in our landtransport business) by 10% from FY2021 levels.
In addition to calculating CO2 emissions both upstream (procurement-related) and downstream (post-shipment) of
our corporate activities (i.e., Scope 3 emissions) in a more fine-grained manner, we plan to calculate Scope 3 emissions
associated with logistics in our customers’ supply chains and to offer advice concerning efficient logistics measures.
SENKO INTEGRATED REPORT 2022

36

ESG+H Initiatives

S Safety
The SENKO Group’s Safety Policy

SafetyPhilosophy

The SENKO Group will “achieve an eventual goal of zero workplace accidents” basedon the spirit of respect and by prioritizing safety over everything else.
1. We can and must prevent all accidents and disasters.
2. Managers are responsible for the safety of employees.
3. Every employee must believe in "eliminating all accidents.”
4. Safety ensures high quality and high productivity.

Basic
Approach○ The SENKO Group deeply recognizes the social mission of the logistics business and promotes efforts that
all employees understand correctly and that contributes to the improvement of safety by ensuring safety inbusiness activities is the basis of our business.
○ The top management will actively lead the field from the bottom to the top to unite and strive to securesafety and improve safety in business activities.
○ The basis of safety is to be strongly conscious of each person working in the SENKO Group to be healthymentally and physically, to practice proper health management.

Priority
Measures1. We comply with relevant laws and regulations and fulfill our social responsibilities.
2. We thoroughly carry out risk assessment and reduce all safety risks.
3. We prevent health problems by enhancing health management system and promoting independent health.
4. We actively disclose information on safety and health activities.

Achievement of safety goals (FY2022)
Although both vehicle and occupational accidents fell compared to the previous year, we will formulate andimplement new measures as not all goals were achieved.
FY2021 result

FY2022 target

FY2022 result

Vehicleaccident
frequency rate

0.572

0.28 or less

0.563

Occupational
accident
frequency rate

1.771

0.70 or less

1.696

[Priority measures]●Having top management develop safety
and health management structures andvoluntary operational structures●Strengthening collaboration on safety andhealth initiatives within the Group●Encouraging the prevention of accidents
through collaboration among safety-related
systems●Actively introducing active safety
technologies●Creating opportunities for passing on andlearning about safety technologies

Medium-term safety goals (FY2023 to FY2027)
Based on the five-year Medium-Term Business Plan that started in FY2023, we will promote group-wide safety
programs, including using the latest driver assistance technology and other measures.

We aim to reduce
vehicle andoccupational
accidents by 25%
from the FY2022
level.

Vehicle accident
frequency rate
(On-road accidents)

Occupational accident
frequency rate
(Occupational accidents resulting
in at least four lost workdays)

FY2022 result

FY2027 target

0.563

0.422 or less

1.696

1.272 or less

(SENKO Co., Ltd. andLogistics Group)(SENKO Co., Ltd. andLogistics Group)*Figures for the Logistics Groups do not include companies acquired during FY2023 or later.

37

SENKO INTEGRATED REPORT 2022

Overview of the SENKO Group

Foundation for Growth

Strategies for Sustained Growth

Data Section

Building a Foundation for Safety
Trainer program
We're working to enhance
trainer skills to facilitate more
effective education for passing
on safety technologies andimproving skill levels.
During FY2022, theCertification
program hadof trainers
16 graduates.
Certification
test

Trainertraining
Selection oftrainer candidates

Use of ICT

Compliance measures

In FY2022, we began adopting
cloud technologies in an effort
to realize more advanced safety
and educational management
systems.

[Development of a system for
managing operation of lightcargo vehicles]
By adopting a system for
managing the operation of lightcargo vehicles, we’re working to
improve safety throughenhanced safe driving guidance
and management of driving
hours and fuel costs.

Adoption ofcloud-based
systems
Safetymanagement
systems
Visualizationof safety
management
indicators

Certification of trainers[Oversight through simulatedbranch visits]
As part of an effort to improve
compliance, we’re conducting
simulated branch visits todeepen branches’
understanding of laws andregulations.

Principal FY2022 initiatives
Accompanied instruction for all drivers in their
third year
Since drivers with less than three years of experience
are the most likely to cause vehicle accidents, we beganoffering accompanied instruction to all drivers in their
third year as an FY2022 priority initiative. Although theresults remain preliminary, accidents involving drivers
with less than three years of experience have fallen 13%
from the previous year. In FY2023, we’re continuing tooffer accompanied instruction to all drivers in their thirdyear while verifying the effectiveness of the program.

Installation of truck sonar
Although we offer instruction for drivers throughinitiatives like crew certification and local training, justunder 30 percent of all vehicle accidents continue to occur
while vehicles are being backed up. As an urgent measure
to address this problem, we began installing truck sonar
devices that warn the driver when the vehicle isapproaching an obstacle behind it under a three-year planin FY2022. As of March 31, 2022, the devices have been
installed on 553 vehicles, and we will continue to installthem in a systematic manner in FY2023 and beyond.
Sensor installation locations: 2 at top and 4 at bottom

Accompanied instruction

Truck sonar

SENKO INTEGRATED REPORT 2022

38

ESG+H Initiatives

S Safety
Implementing our safety management systemWeconduct"Safety

Skills[Safety Skills Evaluation Operating Cycle]

Evaluations" (internal audits) every
year in accordance with legislation,andpublishtheprogressof

improvements as improvement
ranking charts which are distributed
to branch managers and presidents
of group companies. We apply the
specific results to management ineach region, and run a PDCA cycle
for resolving issues to ensure safety.

● Implementation ofsafety skills
evaluation system● Assess improvement
activities● Regional branch orgroup company Healthand Safety Committee
checks improvement
progress

Feedback

A

P

Act

Plan

C
Check

D
Do

● Feedback is provided tobranch managers andgroup company presidents
by the regional branch orgroup company Healthand Safety Committee● Set branch index andtarget, and decide on
safety activity plans● Conduct and promote
improvement activities
under the responsibility ofthe safety manager

Principal FY2022 initiatives
Acquiring “Safety Excellence Workplace”
certification

Education for veteran drivers
This fiscal year, we relaunched a coaching program

As part of safety programs in line with the safetythat had been halted due to the COVID-19 pandemic.

management system, the SENKO Group is aiming toWe’re working to offer systematic ongoing coaching-have

style instruction to reduce accidents by verifying

allworkplacesacquire“Safety

Excellence

Workplace certification*.”
As of the end of March 2022, 100% of all workplaces
have acquired certification (2% increase compared totrainers’ coaching skills and explaining procedures andsystems to safety coordinators while taking steps toprevent infection.

previous year).
* Safety Excellence Workplace certification: Certification acquired from theJapan Trucking Association for workplaces with traffic safety and otherinitiatives that are deemed to meet specific standards.

Structures for managing hazardous goods areas

100% of all SENKO Groupand tours for sales coordinators and logistics sales

workplaces have acquired
certification

We offer safety instruction through regular workshops
offices that handle hazardous goods.
In addition to identifying latent risks with the potential
to have a serious impact on our business and providing
guidance to take corrective action, we’re working toraise managers’ safety awareness and expertise.

G-Mark issued by theJapan Trucking
Association

A meeting of people in charge of hazardous goods areas

39

SENKO INTEGRATED REPORT 2022

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

ESG+H Initiatives

S Social
The SENKO Group’s social activities
Approach to human capital
As an enterprise whose businesses contribute to people’s
daily lives, the SENKO Group considers human resources tobe its driving force. In April 2021, we created the positionsof Responsible for Culture & Sports Promotion andResponsible for Health Promotion at our Head Office. We
will continue to promote and support culture and sports
activities so that employees can enjoy physical and mental
health as well as rich and fulfilling lives.

Engaged, motivatedhuman resources with
Internal
problem-solving skills

Strengthening social capital

Human
resourcesdevelopment

SENKO University
Use of Crefeel Koto

Updates to the Standards of Business Conduct

Based on the Standards of Business Conduct of "As a good
corporate citizen, the SENKO Group will be pro-active inparticipating in social activities, and will create a spirituallyaffluent society and contribute to the development of society
and the local community by promoting cultural, arts and sports
activities and independent social contribution activities,” weare coordinating efforts with the local community with the aimof contributing to development of society.

School Farm
Promotion of sports and culture

Health management

Collaboration
with local
External
communities

Principal initiatives
Use of Crefeel Koto in human resources development
We opened and continue to operate Crefeel Koto, a
traffic safety and logistics education facility, in an effort
to pass on logistics technologies accumulated through
SENKO’s businesses and to foster the development ofeven more advanced technologies. Crefeel Koto is oneof the largest training facilities focusing on traffic safety
and logistics skills in Japan.
The facility offers a variety of driver training programs
that use its traffic course. In addition, certified trainers
from the facility offer instruction to drivers andoperators throughout Japan in a way that reflects thenature of their jobs.

SENKO University: Human resources
development to create future trends
SENKO University opened in 2016 as a place where
human resources development could become moreadvanced and more specialized to ensure the more robust
development of the Group’s businesses in the future.
Courses are taught by inside and outside experts who
are well versed in the latest technologies and market
trends, and top management and executives also
participate as instructors to spread knowledge of theGroup’s business principles and philosophy.
The program contributes to strategic development of
human resources with the latest knowledge and skills in
the SENKO Group’s business domains.

FY2022 result

Crefeel Koto
Number of training sessions
Number of participants

70
637

Regional training

335
2,934

Improving traffic safety and manners throughtraffic safety classes for children
We’ve been hosting traffic safety classes for children
since FY2007 in an effort to teach traffic safety knowledge
and thereby safeguard children from traffic accidents.
We’ve also continued to offer on-site instruction atelementary and junior high schools since FY2015.
FY2022 result

Number of participating children: 306

Participating in the United Nations Global Compact
In October 2020, SENKO Group Holdings Co., Ltd.
signed the United Nations Global Compact (UNGC),registering as a participating company.
The UNGC is a voluntary initiative that lets companies
and other organizations exhibit creative leadership toact as good citizens while participating in the creation ofa global framework for realizing sustainable growth. In
this way, we’re working to resolve social problems andcreate new value through our businesses in an effort torealize a sustainable society.
SENKO INTEGRATED REPORT 2022

40

ESG+H Initiatives

S Social
Close-up on principal FY2022 initiatives
Registering as an SDGs Partner (Senko School Farm Tottori Co., Ltd.)
Senko School Farm Tottori Co., Ltd, which was established as a special subsidiary of the Group in April 2010, is using
a former school in the town of Yurihama, Tottori, to grow hydroponic vegetables in a greenhouse built on the school’s
grounds and to grow mushrooms in renovated classrooms.
Tottori Prefecture has introduced the Tottori SDGs Partner program to allow companies and other organizations
working to achieve the SDGs in the prefecture to
register as partners. The program is designed toallow participants to contribute to the realizationof the SDGs in partnership with the prefecture.
Since Senko School Farm Tottori has promoted
the SDGs through a variety of business activities,
including by providing waste vegetables for use
as cattle feed and waste mushroom beds frommushroom production for use as cattle bedding,the company registered as an SDGs Partner
promoting the SDGs in September 2021.
Going forward, SENKO will continue to work toachieve the SDGs through a variety of businessactivities.
SDGs Partner certificate

SDGs badge

Donating supplies (SENKO Co., Ltd.)
Food banks collect safe food products that cannot be distributed, for example due to a tear in packaging, excess
inventory, or a printing error, from companies and provide them free of charge to facilities, organizations, andeconomically disadvantaged families that need them. Volunteers working for NPOs and other organizations collect foodproducts and ingredients that have no quality issues but that would be difficult to sell normally from food manufacturers
and provide them free of charge to social welfare
facilities and other recipients, including rice,bread, noodles, fresh foods, snacks, drinks,
seasonings, and instant foods.
The Nobeoka City Social Welfare Council
operates a food bank to provide food support toneedy families and others. Reflecting its support
for this work, SENKO’s Higashikyushu Operations
Center donated about 1,000 (emergency rations)natural disaster items to the council’s Nobeoka
Self-reliance Consultation and Support Center.
Going forward, we will continue to participate
in a variety of community service programs inorder to help realize the SDGs.
Donated supplies

41

SENKO INTEGRATED REPORT 2022

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

White Ribbon campaign (AST Corporation)
AST Corporation sells and imports products including paper products, daily necessities, foods, and quasi-drugs. The
company donated paper diapers through JOICFP (a domestic and international program dedicated to creating a worldin which women can make their own life choices at all times and in all places by promoting international cooperation in
the fields of population and health) in order to assist mothers and children in areas affected by natural disasters.
Reflecting its understanding of the need to contribute to society not only in the event of natural disasters, but also ina year-round manner, the company launched a “Household Paper Support Group Project” to produce products thatcome with a donation in order to foster activities withbusiness partners and customers. It’s also participating in
activities designed to safeguard the lives and health ofwomen to better understand women and earn theirempathy, including by donating a certain amount fromthe sale of specially planned products to the White
Ribbon campaign through JOICFP.
In addition, JOICFP holds charity runs throughout Japanevery March to mark International Women’s Day. Entry
fees are used to provide support to women in developing
nations, and starting this fiscal year, AST plans toparticipate as a sponsor.
*There are still women in the world whose health and lives are threatened byunsafe abortions and childbirth due to an inability to exert control over sexual
conduct and contraception or receive medical care. There are also women wholose access to educational opportunities due to unwanted pregnancy and childmarriage, sacrificing their dreams of self-realization.
The White Ribbon is an international symbol mark that communicates theimportance of women’s health and rights.

Teaching swimming at elementary schools (Blue Earth Japan Co., Ltd.)Blue Earth Japan Co., Ltd. operates a total of 20 Blue Earth sports clubs and My-Body fitness gyms that are openyear-round 24 hours a day in Yamanashi, Tokyo, Kanagawa, Shizuoka, Nagano, and Gunma Prefectures. The company
also operates sports classes that teach swimming, ballet, karate, dance, and PE as well as Kids Station, an after-school
program that teaches English, calligraphy, and other subjects as part of an effort to help create communities where
people of all ages, from children to senior citizens, can enjoy physical and mental health and where members are left
with energetic smiles and feelings of happiness.
In May 2021, Blue Earth received a contract to teach elementary school swimming from cities, towns, and villages in
Yamanashi Prefecture as part of a program that allows
private-sector use of schools’ swimming pools. Whereas
swimming classes at elementary schools are usuallytaught by school teachers at their school’s pool, thisprogram has Blue Earth Japan swimming coaches provide
instruction at the company's pools. The contract includes
bus transportation between the schools to the company's
facilities, along with other services. Classes, which are
based on the PE Edition of the Elementary School
Learning Guidelines, follow an annual instructional plan.
The program is helping reduce school faculty members’
workload while providing safe, advanced swimming
instruction, and the company plans to expand thecontract area to include other cities, towns, and villages
going forward.
SENKO INTEGRATED REPORT 2022

42

ESG+H Initiatives

G Governance
Basic Policy
The SENKO Group is a logistics company involved in highly public work that fosters people’s development andsupports their lives. The SENKO Group makes every effort to ensure that all corporate activities thoroughly comply withlaws, based on the awareness that good corporate governance is the foundation of business, as well as regarding
governance as a high priority for management.

Corporate Governance System
We have adopted the following corporate governance system, one that we consider to be optimal, in order to ensure
management transparency and legal compliance based on the company’s size, lines of business, organizational
structure, and other features.

General Meeting of Shareholders
Appointment/dismissal

Accounting auditors

ReportAppointment/dismissal

Board of Corporate
Auditors

Appointment/dismissal
ReportAudit

Selection/
supervision

DialogAccounting
audit

ReportAssist/reportPresident andRepresentative Director

Audit

Auditing Dept.

ReportReportInternal Controls Committee
Sustainability Promotion Council

ReportInstruct
Audit

Executive Officers

Board of Directors

ReportReportSupervise

ReportLegal counsel

Operating companies

43

AdviceSubsidiaries directlysupervised by SENKOGroup Holding Co., Ltd.
Companies affiliatedwith Living
Support/BusinessSupportCore companies
Runtec Corporation
SENKO Shoji Co., Ltd.
AST Corporation
Smile Corp.

Report

SENKO
Co., Ltd.

Committees

1

The Company’s Board of Directors meets at least once a month and deliberates on issues as required by laws and regulations aswell as important management concerns in addition to being an organization that oversees the execution of business.
Furthermore, so that the Directors, Executive Officers, and key employees execute their duties appropriately and efficiently, theCompany has established the Regulations of the Board of Directors and the Regulations for Administrative Authority to clarify
authority and responsibility. We also verify the status of the implementation of operations and strive to have even moretransparent management.

2

To implement the sustainable management of the entire group, the Group has established a Sustainability Promotion Council tooversee the activity policies and plans that guide committees related to compliance with applicable business laws, corporate risk,
corporate ethics, and social contribution activities.
We’ve also established an Internal Controls Committee to increase the sophistication of the Group’s internal control activities andensure their thorough implementation. The committee’s responsibilities include oversight of the evaluation of the development
and administration of the internal control system.

3

Our Board of Corporate Auditors, which meets at least once a month, reports on, discusses, and makes decisions about legally
mandated matters as well as important matters related to audits.

SENKO INTEGRATED REPORT 2022

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

4

The Company has concluded an audit contract with Grant Thornton Taiyo LLC as the accounting auditor, under the terms of theCompanies Act and the Financial Instruments and Exchange Act, and will receive guidance in relation to accounting. Our audit
staff includes 12 certified public accountants, eight individuals who have passed certified public accountant exams, and another12 employees.

5

The Auditing Department performs internal audits at the Company and subsidiaries with the aim of verifying the status of risk
countermeasures, identifying the status of managing operations and of improvements, and ensuring the effectiveness of theoperation management system. As well, the Auditing Department reports its findings to the Representative Director and the
Corporate Auditors.

Further, to implement sustainable management
throughout the Group (in order to improve thesustainability of its businesses), we havedeveloped a series of sustainable management
structures that encompass the entire Group,
including Corporate Ethics, Compliance, Risk
Management, Environmental Promotion, andSocial Contribution Promotion Committees as well
as a Sustainability Promotion Council, which
oversees the committees, and an Internal Controls
Committee.

Corporate Ethics Committee
Compliance Committee
Sustainability
Promotion Council

Risk Management Committee

Chairperson:
SENKO Group Holdings
President andRepresentative Director

Environmental Promotion
Committee
Social Contribution
Promotion Committee

Policy on determining compensation for officers
Compensation for officers includes basic compensation, performance-based pay (bonuses), performance-based
stock, and restricted stock compensation. Guided by internal rules, we determine the specific amounts of thecompensation, taking into account factors such as the position of the officer, the performance in the individual fiscal
year, and the level of contribution to performance made by each person.

Officer category

Total amountofcompensation,etc.
(millions ofyen)

Directors(excluding outside directors)

Total amount of each type of compensation, etc. (millions of yen)
Number of
eligible
officers

Basicremuneration

Performancebased bay(bonuses)

Performancebased stockcompensation

Restricted
stockcompensation

161

59

62

26

13

9

Corporate auditors (excluding
outside corporate auditors)

45

34

11

–

–

3

Outside officers

51

36

15

–

–

7

The Financial Services Agency and the Tokyo Stock Exchange began applying a number of major principles that
contribute to the realization of effective corporate governance as the Corporate Governance Code in June 2015. SENKO
has included all elements of the Corporate Governance Code on its website to clarify the Company’s position on working
to enhance corporate governance based on this code.

Compliance-based management
Compliance-based management, which complies with laws and regulations and engages in ethical business activities,
is the base for a company to fulfill its social responsibility and earn the trust of stakeholders.
The SENKO Group has established, based on a thorough understanding of the Group’s social obligations, the Senko
Standards of Business Conduct, which prescribe all items that executives and employees must observe for every aspectof their jobs.
SENKO INTEGRATED REPORT 2022

44

ESG+H Initiatives

G Governance
List of directors and corporate auditors
Yasuhisa
FukudaNoburoSasakiPresident andRepresentative
Director

Director

HiroshiYoneji
Director

Senior Manager ofBusiness
Development
Department

Managing
Executive Officer
Senior Manager of
Administrative
Department

Responsible for
Trading &Commerce

Akira
Taniguchi

KenjiSugimoto

ToshioTakanashi

Director

Director

Director

Responsible forMarine Logistics

Responsible for
Logistics

Responsible forInternational
Business

YoshikiKanagaHirokoAmeno

YasuyukiSugiuraDirector

Director(Outside)

Director(Outside)

Yoko
Araki

FumikoOkuno

Masanobu
UenakaDirector(Outside)

Director(Outside)

Full-time
Corporate Auditor

Masami
WashidaYasushiMatsutomo

YoshiroOkano

Full-time
Corporate Auditor

Full-time
Corporate Auditor(Outside)Part-time
Corporate Auditor(Outside)

Responsible for
Refrigerated &Frozen Logistics

45

SENKO INTEGRATED REPORT 2022

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

Business risks
Risks related to the condition of the Group’s businesses, accounting, and other operations that could have a material
impact on the judgment of investors are described below. Forward-looking statements are based on the judgment of
the SENKO Group (the Company, its consolidated subsidiaries, and its equity-method affiliates) as of the last day of the
fiscal year under review (March 31, 2022).

1

Laws andregulations

The Group provides a wide range of services as part of Logistics, Trading & Commerce, and other businesses. Thesebusinesses must comply with a variety of laws and regulations. Future developments such as the strengthening of laws
or regulations, or the application of new laws or regulations, could impose additional costs as the Group seeks to comply
with them, and the need to make changes to the manner in which it operates its businesses could affect the Group’s
financial position and business performance.

2

Sharp increases
in the price of
crude oilHigher prices for light oil due to a sharp increase in the price of crude oil will push up transportation costs. The
performance of the Group, where truck transportation is the mainstay business, could be affected in the future by pricetrends.

3

Occurrence of aserious accident

In case a serious vehicle or freight accident occurs, the performance of the Group could be affected by a loss in customer
and public confidence, suspension of vehicle use, administrative penalties such as business suspension, etc.

4

Occurrence of adisaster, etc.

The performance of the Group could be affected by a system shutdown due to transportation routes being blocked orelectricity being suspended during a disaster, such as heavy rain, lightning, typhoon, or earthquake, or by a blackout.
Recent natural disasters that have affected the Group’s operations include intense rainfall throughout Japan in August2021 and an earthquake that occurred in Fukushima Prefecture in March 2022 (the Fukushima Prefecture Offshore
Earthquake).

5

IT system failure

The Group leverages IT technology to manage customer freight information and for control systems for warehouses. The
performance of the Group could be affected if these systems are shut down due to a natural disaster, computer virus, orcomputer hacking.

6

Management ofcustomer
information

The Group handles customer information when providing logistics services and has worked hard on information
management through in-house education. However, the Group’s performance could be affected by claims forcompensation for damages if there is an external leak of information or loss of data.

M&A and capitalalliances

When expanding the scale of existing businesses, or entering new business fields, the SENKO Group concludes M&As
and enters into capital alliances, etc., as part of its business strategy. However, initially-expected benefits may fail tomaterialize due to the effects of factors including significant changes in the market environment following theacquisition, legal regulations, or unanticipated increases in costs. In addition, in the event of a problem that went
undetected during preliminary investigations, for example due to the discovery of a contingent liability or un-reviewed
liability, the Group’s financial position could be adversely affected.

8Overseasbusiness growth

To continue growing into the future, the SENKO Group is working to expand its businesses overseas. The Group’sbusiness expansion, performance, and growth outlook could be significantly affected by social disturbances in theregions where it operates. These disturbances could be due to changes in the economic situation, recessions,fluctuations in foreign exchange rates, changes in politics or laws and regulations, natural disasters, or outbreaks ofterrorism, war or disease.

9

Pandemic

A pandemic could affect the Group’s performance due to the impact of temporary closures of business sites orgovernment-imposed lockdowns.

7

Risk Management System
The SENKO Group’s key management issues include ensuring stable earnings and establishing a sound managementbase by managing all risks associated with the execution of operations. The risk management system is described below.

1

To systematically and effectively mitigate the risks that the Group faces, and to take corrective action, we have established the Risk
Management Regulations. Every department that controls risk is also tasked with formulating and distributing regulations, etc., aimed at
reducing risks that affect the entire group and for taking effective action when such risks materialize.

2

When a risk materializes and is expected to cause serious damage, the department controlling this risk and the department in which therisk is expected to arise collaborate on reporting to the Board of Directors.

3

The Auditing Department verifies the status of risk countermeasures, etc., and reports to the Representative Director and the Board of
Corporate Auditors.

Establishing business continuity plans (BCPs)
Every Group location has established a business continuity plan (BCP) in order to swiftly recover logistics in the eventof a disaster. In an emergency, support and recovery activities will be carried out promptly under the direction of thehead office and the manager of the department taking countermeasures on the ground using the BCP. When data
centers are affected by a disaster, a backup data center will restore systems within 30 minutes, even if the server shuts
down to ensure that logistics systems can be maintained.
SENKO INTEGRATED REPORT 2022

46

ESG+H Initiatives

H Health
The SENKO Group is committed to health management.
The SENKO Group has announced the SENKO Group Health Management Declaration, which positions the promotionof employee health as one of the most important issues facing management; we have been encouraging activities that
promote healthy living for many years.

Approach to health management
Health management strategy map
The SENKO Group’s new Medium-Term Business Plan
identifies ESG+H (health) management as a key issue.
Having created a health management strategy map thatdetails the connections between health promotion
initiatives
andmanagement
strategies,
we’reundertaking a program of activities in this area.

programs. When the introduction of COVID-19
countermeasures was required, we established in-housestandards to help us achieve a better balance between
the health of employees and our business activities.

Health promotion at the SENKO GroupWe’ve assigned 27 nursing professionals (publichealth nurses and registered nurses) to work in major
areas nationwide, where they collaborate with 103
health promotion coordinators to provide a variety of
support related to employee health. In FY2021, we
appointed an industrial physician to oversee the 78
industrial physicians and nurses, enabling us to develop
more effective Company-wide health policies andNursing staff stationed around the country

Principal health management initiatives
Holding health classes and seminars
We offer a variety of seminars designed to improve
employees’ health literacy, including a Mental HealthSeminar, which targets newly appointed managers, anda Women’s Health Seminar, which is dedicated tohelping create an environment in which female
employees can continue to work in ways they findself-affirming.

Women’s Health Seminar

47

SENKO INTEGRATED REPORT 2022

Promoting physical and mental health throughclub activities
In addition to official teams for judo, golf, kendo,
women’s tennis, and women’s track and field, the Group
has numerous employee clubs that allow workers to have
fun in a collegial atmosphere outside working hours.

Group photograph of the tennis clubOverview of the SENKO Group

Foundation for Growth

Strategies for Sustained Growth

Data Section

TOPICSDX promotion at the SENKO GroupThe SENKO Group’s DX Policy

DX promotion structures

In implementing its digital transformation (DX) strategy,
the SENKO Group is aiming to advance business and service
reforms in a strategic manner so as to establish acompetitive advantage through the creation of new value. To
that end, the Group is working to address the following four
topics as it creates an overall computerization strategy:(1) Promoting the DX to support business innovation
throughout the Group(2) Using digital data to support the maintenance andstrengthening of business competitiveness and toacquire new customers(3) Creating new businesses with new digital technologies(4) Using digital data to boost productivity
Since launching a DX promotion project in 2021, SENKO
Co., Ltd. has been pursuing the following initiatives:• Promoting operational reforms that utilize digitaltechnologies• Studying data management to centralize internal data
• Designing DX human resources development programs
through SENKO University

SENKO Co., Ltd., which operates the Group’s core Logistics
business, and SENKO Group Holdings Co., Ltd., which
oversees the entire Group’s operations, have created DX
Promotion Departments to strengthen structures that cut
across group companies and departments that are involved
with initiatives.

Log
iS

SE
P NK
De romparPromotingthe DX in the
Logistics
business

SENKO
GHD
DX Promotion
Department

N
K
er O
s it
y

N
SE r mto
I n f Sys

Developing
digitaltechnologies
into systems

ion
ut
ol

DX
O ion tot entm

Designing andstandardizing
logistics
operations

Ka O
e m tio n

SE v
i
Un

Using humanresourcesdevelopment
to pursue theDX

Illustration of SENKO’s DX strategy
We’re working to standardize
operations companywide andrealize the reform of ourbusiness platforms through DX
human resources development
and use of digital technologies.
We plan to shape the future
digitally by creating new
business models and working
to increase the sophisticationof our operations throughcompanywide synergies.

Increasing the Group’s corporate value
Increasing the sophistication ofgroup management
Using group resources effectively

Reformingbusinessplatforms

Creating group synergies
Digital business platforms that connect group operating companies

Digital data
organization

Standardizing, and increasing thesophistication of, operations companywide

Standardizing business processes
Developing platforms for standardized, indirect operations

AI forecasting

Creating new
businessmodelsElectronic settlement

AI cargo volume forecasts at SENKO
In offering contract logistics services tocustomers, we’re working to use machine learning
to forecast warehouse shipping volumes in orderto streamline personnel assignments and reduce
planning coordinator workload.

•More sophisticated logistics•More sophisticated SCM•Streamlined management
Data storage •Collaborative businesses
and analysis

DX initiatives
Using digital technologies Utilizing data
Fostering the development of DX humanresources

Verifying digitaltechnologies
Standardizing
operations
companywide

Human resources education

Electronic expense settlement
We've implemented paperless transactions
using Concur and standardized and reduced
business processes in a way that complies
with Japan’s Act on Book and Record Keeping
through Electronic Methods. We’re working tostrengthen the Group’s governance throughdata analysis and visualization.

Development of DX human resources
We’re working with outside partners to
implement an escort-based DX human resources
development program that includes practicalimplementation and a digital literacy learning
program with an assessment component.

SENKO INTEGRATED REPORT 2022

48

Ten-year Financial and Nonfinancial Highlights
FY2013

FY2014FY2015FY2016FY2017

Operating revenues

293,534

333,883

398,447

434,000

455,435

Operating costs and expenses

263,898

299,039

357,431386,321405,757

Selling, general and administrative expenses

19,72722,72227,36630,181

32,595

Operating profit

9,908

12,122

13,64917,497

17,081

Ordinary profit

10,10011,305

13,234

17,17817,301

Net income attributable to owners of parent

5,202

6,503

7,073

8,542

8,950

Comprehensive income

5,838

7,045

9,804

8,630

12,249Net assets per share

521.48539.52581.46613.71661.61

Net income per share

41.45

51.89

55.06

60.43

61.67

Net income per share after adjustment for residual shares

37.46

45.17

50.41

56.32

58.74

Annual dividend

14.00

16.00

17.00

20.00

22.00

Net assets

67,32772,302

92,743100,009

114,090

Total assets

208,095

243,570

285,309269,461

285,958

Cash flows from operating activities

11,037

10,68919,22816,14920,848Cash flows from investing activities(6,236)(24,956)(17,978)(2,288)(3,678)Cash flows from financing activities(2,551)

14,551

6,209(21,492)(8,626)

Cash and cash equivalents at end of year

15,69017,66725,476

17,76526,197

Operating profit margin (%)

3.38%

3.63%

3.43%

4.03%

3.75%

Equity ratio (%)

31.30%

27.80%

28.40%

32.60%

35.10%

Return on assets (ROA) (%)

4.92%

5.01%

5.00%

6.19%

6.23%

Return on equity (ROE) (%)

8.20%

9.80%

9.50%

10.10%

9.50%

Price earnings ratio (PER)

11.92

8.63

14.17

11.35

11.63

Business results (millions of yen)

Per-share information (yen)Financial position (millions of yen)

Decision-making indicators

Final share price at end of fiscal year (yen)

494

448

780

686

717

Price book-value ratio (PBR)

0.95

0.83

1.34

1.12

1.08

Number of employees

8,356

8,738

11,562

11,992

13,915

Number of drivers

2,385

2,534

4,000

4,024

4,105

Number of operators

3,291

3,692

4,528

4,496

4,575

71

79

86

86

111

Nonfinancial information

Number of group companies
Model shift ratio (%)
Total warehouse floor space (tens of thousands of square meters)

—

—

—

—

63.4%

221

252

280

293

322

3,240

3,352

4,540

4,745

4,426

Number of ships under management

19

19

18

18

18

Of which, number of owned ships

11

11

11

11

11

Number of vehicles (tractors)* During the fiscal year ended March 31, 2022, the company finalized the provisional accounting treatment for business combinations. As a result, principal management
allocation of the cost of acquisition resulting from the finalization of provisional accounting treatment.

Outside recognition

Participating initiatives

2022 Constituent MSCI JapanESG Select Leaders Index*1
2022 Constituent MSCI Japan Empowering
Women Index (WIN)*1*1 Neither inclusion in MSCI indexes nor use of MSCI’s logo, trademarks, service marks, or index names on this page should be construed to indicate the support, guarantee, or promotion of SENKO Group
Holdings Co., Ltd. by MSCI or its affiliates. MSCI indexes are the exclusive property of MSCI. The names and logos of MSCI and its indexes are trademarks or service marks of MSCI and its affiliates.

49

SENKO INTEGRATED REPORT 2022

Overview of the SENKO GroupFY2018FY2019Strategies for Sustained Growth

FY2020

FY2021

Data Section

Foundation for Growth

FY2022

492,127

529,609570,030

572,405

623,139

440,671471,129

503,687

500,653

534,352

34,36938,84745,68650,23564,01517,087

19,631

20,656

21,516

24,771

17,316

19,876

20,74422,227

26,103

9,503

11,681

12,081

14,24915,233

12,893

10,547

10,677

17,841

17,596741.44785.08823.61909.55985.67

62.64

76.90

79.51

93.87

104.09

58.08

71.31

73.75

78.44

91.99

22.00

26.00

26.00

28.00

34.00

118,056

126,895

134,181

146,120

160,657

333,972

340,491

356,308

436,066

480,487

24,56727,02231,09831,85831,885(37,020)(15,770)(18,030)(46,309)(46,141)

9,940(13,224)(9,155)36,757

5,773

23,79522,801

27,14250,371

42,193Operating revenues
492,1272018/3

3.47%

3.71%

3.62%

3.76%

3.98%

35.00%

35.10%

30.90%

30.60%

5.59%

5.89%

5.95%

5.61%

5.70%

8.90%

10.10%

9.90%

11.00%

10.80%

13.22

11.95

10.54

11.16

8.63

828

919

838

1,048

898

1.12

1.17

1.02

1.15

0.91

14,496

16,004

16,69319,194

20,725

5,051

5,397

5,450

6,004

6,226

5,143

5,429

5,602

6,135

6,011

133

132

131

141

161

65.7%

69.8%

70.0%

74.9%

76.1%

342

366

387

392

406

5,179

5,525

5,790

6,229

6,727

68

69

69

69

69

34

34

33

38

40

2019/3570,030 572,405

2020/3Operating profit

2021/3

623,1392022/3(Millions of yen)

24,771
19,631

20,656

21,516

17,087

2018/333.70%

529,609(Millions of yen)

2019/32020/3

Net income
attributable toowners of parent
11,681

12,081

2019/32020/32021/32022/3(Millions of yen)

14,24915,233

9,503

2018/3

Net assets ( )Equity ratio ( )33.70

118,056

2018/335.00

2021/3(Millions of yen)
(%)

35.10
30.90

126,895

2019/3

134,181 146,120

2020/32021/3Return on equity (ROE)

8.90

2018/32022/3

10.10

9.90

2019/32020/330.60
160,6572022/3

(%)

11.00

10.80

2021/32022/3indicators and other figures related to the fiscal year ended March 31, 2021, reflect important revisions to the initial(SENKO Group Holdings Co., Ltd. and SENKO Group companies)
ISO14001

ISO14001

ISO14001●Certified organization / 4 branches of SENKO
Co., Ltd. and Sankyo Freight Co., Ltd.
●Certification No. / JQA-EM1492●Certifying institution / JQA (Japan Quality
Assurance Organization)●Certified organization / Smile Corp.
●Certification No. / JQA-EM7663●Certifying institution / JQA (Japan
Quality Assurance Organization)●Certified organization / Harcob
Co., Ltd.
●Certification No. / EMS542855●Certifying institution / BSIGroup Japan

Green Management Certification●Certified organization / 9 business sites at
SENKO Co., Ltd.; SENKO Line Co., Ltd.
Atsugi Senko Transport Co., Ltd.; Minami Osaka
Senko Transport Co., Ltd.; Chushikoku Logistics
Co., Ltd.; Eikichi Kaiun Co., Ltd.; Minami Kyushu
Senko Co., Ltd.; Tokyo Nohin Daiko Co., Ltd.;
Kitanihonunyu Corporation●Certifying institution / Foundation for Promoting
Personal Mobility and Ecological Transportation

SENKO INTEGRATED REPORT 2022

50

Financial Review
During the fiscal year under review, the Group’s operating revenue was affected by factors including the application ofrevenue recognition and other accounting standards, and its profits were affected by rising fuel prices. Nonetheless,group-wide efforts to increase sales, reduce costs, and boost productivity combined with M&As to drive year-on-yearincreases in consolidated operating revenue, consolidated operating profit, consolidated ordinary profit, and net income
attributable to owners of parent.
FY2021

FY2022 (fiscal year
under review)Operating revenues(hundreds of millionsof yen)Operating revenues(hundreds ofmillions of yen)

Change(hundreds ofmillions of yen)

PercentagechangeFood logistics

773

822

50

6.4

Chain store logistics

799

837

38

4.8

Fashion logistics

478

495

17

3.5

Other logistics

238

400

162

68.3

2,287

2,554

267

11.7

Housing logistics

583

618

35

6.0

Chemical logistics

735

859

124

16.9

Other logistics

269

295

26

9.7

3,874

4,325

452

11.7

1,618

1,530

(88)

(5.4)

232

376

143

61.6

5,724

6,231

507

8.9

Distribution
Logistics
Logistics
business

Trading & Commerce
Other businesses
Total

Vs. previous fiscal year

Logistics
business

Despite the effects of rising fuel prices, we worked to promote sales, lower costs, and boost
productivity as the volume of goods, which had fallen dramatically due to the effects of the
COVID-19 pandemic during the previous fiscal year, recovered. Operating revenues rose 45,188
million yen from the previous year to 432,538 million yen thanks to factors including contributions
from M&As. Segment profit rose 3,615 million yen to 23,013 million yen.

Trading &Commerce

Although we made AZFIT, a household paper products wholesaler, a consolidated subsidiary in
April 2021 and worked to increase sales and reduce costs, operating revenues fell 8,770 million yen
from the previous fiscal year to 153,049 million yen due to factors including the application ofrevenue recognition accounting and other related standards and increases in purchase price for fuelsales. Segment profit fell 130 million yen to 2,905 million yen.

Otherbusinesses

Operating revenues rose 14,315 million yen from the previous fiscal year to 37,550 million yen
thanks to the inclusion of Terauchi Co., Ltd., a membership-based general wholesaler and retailer, asa consolidated subsidiary in January 2021 along with efforts to increase sales and reduce costs.
Segment profit rose 161 million yen to 99 million yen.

Assets, liabilities, and net assets

Total assets

51

Total assets as of March 31, 2022, were 480,487 million yen, an increase of 44,421 million yen
from the previous year.
Current assets came to 171,033 million yen, up 7,142 million yen from the end of the previous
fiscal year. The increase reflects a decrease of 7,437 million yen in cash and cash equivalents andincreases of 9,204 million yen in trade accounts, notes receivable, and contract assets; 1,023 million
yen in electronically recorded obligations; 1,193 million yen in merchandise and finished goods; and3,190 million yen in other current assets.
Non-current assets were 309,454 million yen, an increase of 37,278 million yen from the previous
fiscal year. The increase reflects increases of 22,084 million yen in property, pant and equipment aswell as 5,709 million yen in intangible assets and 9,484 million yen in investments and other assets.

SENKO INTEGRATED REPORT 2022

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section

Liabilities

Total liabilities as of March 31, 2022, increased 29,884 million yen from the end of the previous
fiscal year to 319,830 million yen.
Current liabilities totaled 137,646 million yen, up 3,931 million yen from the end of the previous
fiscal year. The increase reflects decreases of 7,094 million yen in current portion of bonds payable
and 10,009 million yen in current portion of convertible bonds with share acquisition rights, whichwere offset by increases of 6,291 million yen in trade accounts and notes payable and 14,298 million
yen in short-term loans.
Non-current liabilities totaled 182,183 million yen, up 25,952 million yen from the end of theprevious fiscal year. The increase reflects increases of 9,976 million yen in bonds payable, 11,858
million yen in long-term loans, 1,088 million yen in long-term lease obligations, 1,317 million yen indeferred tax liabilities, and 1,113 million yen in other non-current liabilities.

Net assets

Net assets as of March 31, 2022, rose 14,537 million yen from the end of the previous fiscal year
to 160,657 million yen. The increase reflects a decrease of 3,521 million yen in the purchase oftreasury shares, which was offset by increases of 1,915 million yen in capital obtained fromtransactions such as the conversion of convertible bonds with share acquisition rights to stock
shares, 1,739 million yen in capital surplus, 10,525 million yen in retained earnings, and 2,524 million
yen in non-controlling interests. As of March 31, 2022, the equity ratio was 30.6%, a decrease of 0.3
percentage points from the end of the previous fiscal year.

Capital expenditures and depreciation
Capital expenditures in the fiscal year under review totaled 31,868 million yen. Principle expenditures included
14,864 million yen on building expansion and related projects (primarily in the Logistics business), 5,789 million yen on
vehicle and transport equipment (primarily in the Logistics business), and 5,219 million yen on property purchases andrelated transactions (primarily in the Logistics business).
Depreciation in the fiscal year under review rose 17,441 million yen from the previous year to 19,817 million yen.

Cash flows
Cash and cash equivalents at the end of the fiscal year under review fell 8,177 million yen from the end of the previous
fiscal year to 42,193 million yen.
Net cash provided by operating activities came to 31,885 million yen. This was mainly due to income before income
taxes of 24,778 million yen, depreciation of 19,817 million yen, increased funds due to increase in accrued liabilities of
3,654 million yen, despite a decrease in funds due to increase in trade receivables of 5,123 million yen, and income taxes
paid of 9,321 million yen.
Net cash used in investing activities came to 46,141 million yen. This was mainly due to purchase of property, plantand equipment of 30,311 million yen, investments in capital of subsidiaries and associates of 5,668 million yen, andpurchase of shares of subsidiaries resulting in change in scope of consolidation of 8,837 million yen.
Net cash provided by financing activities came to 5,773 million yen. This was mainly due to net increase of short-termloans of 4,671 million yen, proceeds from long-term loans of 22,563 million yen, and proceeds from issuance of bondsof 10,000 million yen, despite repayments of long-term loans of 4,035 million yen, repayments of finance/leaseliabilities of 5,359 million yen, proceeds from bonds payable of 13,288 million yen, purchase of treasury shares of 3,630
million yen, and dividends paid of 4,704 million yen.

SENKO INTEGRATED REPORT 202252

Consolidated financial statements
Consolidated balance sheets(Millions of yen)

As of March 31, 2021

As of March 31, 2022

AssetsCurrent assets
Cash and cash equivalents
Trade accounts and notes receivable
Trade accounts and notes receivable, and contract assets
Electronically recorded obligations - operating
Merchandise and finished goods
Work in process
Raw materials and supplies
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery and equipment, vehicle and vessels
Accumulated depreciation
Machinery and equipment, vehicle and vessels, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Leased assets
Accumulated depreciation
Leased assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Retirement benefit asset
Guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Business commencement expenses
Total deferred assets
Total assets

53

SENKO INTEGRATED REPORT 2022

52,53082,689—2,519
12,990316
651
12,221(28)

45,093—91,893
3,543
14,18395845
15,411(34)

163,891

171,033

169,354(89,153)
80,201
77,660(52,603)
25,056
10,384(7,995)
2,388
81,62820,025(6,231)
13,793
6,484
209,554

187,259(96,162)
91,096
101,063(73,248)
27,815
13,528(10,611)
2,917
90,31323,823(8,890)14,932
4,562
231,639

9,979
8,034
18,014

12,564
11,15923,723

17,398507
5,471
13,086
4,902
3,647
(407)
44,606

17,957279
7,703
14,388
5,115
9,066
(418)
54,091

272,175

309,454

0

0

0

0

436,066

480,487

Overview of the SENKO Group

Strategies for Sustained GrowthFoundation for Growth

Data Section(Millions of yen)

As of March 31, 2021

As of March 31, 2022

Liabilities
Current liabilities
Trade accounts and notes payable
Electronically recorded obligations - operating
Current portion of bonds payable
Current portion of convertible bonds with share acquisition rights
Short-term loans
Lease obligations
Income taxes payable
Provision for bonuses
Provision for bonuses for directors (and other officers)
Provision for loss on disaster
Other

44,3838,586
7,118
10,00922,036
4,253
5,377
6,247
420
68
25,211

50,6759,076
24—
36,335
4,632
5,052
6,585
427
416
24,420133,715

137,646

30,024
22,10874,887
14,881
260
98
149
7,103
869
3,669
2,178

40,00022,08186,746
15,970
573
196
336
7,050
950
4,987
3,291

156,230

182,183

289,946

319,830

26,56429,806
81,211(4,638)28,47931,54591,737(8,159)132,944

143,602

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans

1,759
32
57
(10)

1,472
70
755
916

Total accumulated other comprehensive income

1,839

3,215

Share acquisition rights
Non-controlling interests

410
10,926388
13,451

Total net assets

146,120

160,657

436,066

480,487

Total current liabilities
Non-current liabilities
Bonds payable
Convertible bonds with share acquisition rights
Long-term loans
Lease obligations
Provision for retirement benefits for directors (and other officers)
Provision for special repairs
Provision for share awards
Retirement benefit liability
Asset retirement obligations
Deferred tax liabilities
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Share capital
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity

Total liabilities and net assets

SENKO INTEGRATED REPORT 2022

54

Consolidated financial statements

Consolidated statements of income(Millions of yen)

Fiscal year ended
March 31, 2021

(April 1, 2020 - March 31, 2021)

Fiscal year ended
March 31, 2022

(April 1, 2021 - March 31, 2022)

Operating revenues

572,405

623,139

Operating costs and expenses

500,653

534,352

Operating gross profit

71,751

88,786

Selling, general and administrative expenses

50,23564,015

Operating profit

21,516

24,771

Interest income

71

100

Dividend income

148

286

Share of profit of entities accounted for using equity method

400

402

Revenue from subsidies

506

531

Rental income from land and buildings

333

356

Other

1,472

1,670

Total non-operating income

2,934

3,349

Interest expenses

1,171

1,244

Other

1,052

772

Total non-operating expenses

2,223

2,016

22,227

26,103

Subsidy income

312

248

Gain on sale of non-current assets

488

111

4,483

—

Reversal of provision for asset retirement obligations

348—

Gain on sale of investment securities

38

—

5,671

359

Provision for loss on disaster

68

416

Compensation expenses—

298

Loss on tax purpose reduction entry of non-current assets

337

253

Loss on COVID-19 impact

494

211

—

202

Loss on retirement of non-current assets

310

182

Loss on sale of non-current assets

56

43

3,053

31

Loss on disaster

15

28

Provision of allowance for doubtful accounts for subsidiaries and associates

29

12

Provision of allowance for doubtful accounts

36

3

Amortization of business commencement expenses

560—

Loss on valuation of investment securities

277—

Loss on office withdrawal

60—

Total extraordinary losses

5,299

1,684

Income before income taxes

22,59824,778

Income taxes - current

8,195

8,831

Income taxes - deferred

(320)

(230)

Total income taxes

7,874

8,601

Net income

14,724

16,177

Non-operating income

Non-operating expenses

Ordinary profit
Extraordinary income

Gain on bargain purchaseTotal extraordinary income
Extraordinary losses

Loss on cancellation of leases

Impairment losses

Net income attributable to non-controlling interests
Net income attributable to owners of parent

55

SENKO INTEGRATED REPORT 2022

475

943

14,24915,233

Overview of the SENKO Group

Strategies for Sustained Growth

Data Section

Foundation for Growth

Consolidated statements of comprehensive income(Millions of yen)

Fiscal year ended
March 31, 2021

Fiscal year ended
March 31, 2022

(April 1, 2020 - March 31, 2021)

Net income
Other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income
Total comprehensive income attributable to:
Owners of parent
Non-controlling interests(April 1, 2021 - March 31, 2022)

14,724

16,177

1,025
17
(354)
2,429
3,117
17,841

(337)
47
781
927
1,419
17,596

17,484357

16,609987

Consolidated statements of changes in equity
Fiscal year ended March 31, 2021 (April 1, 2020 – March 31, 2021)
Shareholders’ equity

Balance at beginning of period(Millions of yen)
Accumulated other comprehensive income

Total
shareholders’ equity

Valuationdifferenceonavailablefor-salesecurities

70,901(652) 126,548

779(3,971)
14,24971(3,971)
14,249———71(3,971)
14,249(4,312)
325
32
0

—
—
—
—

(4,312)
325
32
0

Share
capitalCapitalsurplusRetainedearnings

26,52829,77036

35TreasurysharesDeferred
gains orlosses onhedges14

RemeaForeign
surements
currencyof definedtranslation
benefitadjustment
plans

256

(2,439)

Total
Share
accumuacquisition
lated otherrightscomprehensive
income(1,390)432

Noncontrollinginterests

Total net
assets

8,590

134,181

Changes during period
Issuance of new shares
Dividends of surplus
Net income attributable toowners of parent(4,312)326

Purchase of treasury shares(0)

Disposal of treasury shares

32

Change of scope of consolidation

0

Change in ownership interest ofparent due to transactions with
non-controlling interests
Net changes in items other than

—

980

18

(198)

2,429

3,229

(21)

2,336

5,543

shareholders’ equity
Total changes during period

36

36

10,309(3,986)

6,395

980

18

(198)

2,429

3,229

(21)

2,336

11,939Balance at end of period

26,56429,806

81,211(4,638) 132,944

1,759

32

57

(10)

1,839

410

10,926

146,120

Fiscal year ended March 31, 2022 (April 1, 2021 – March 31, 2022)
Shareholders’ equity

Balance at beginning of period(Millions of yen)
Accumulated other comprehensive income

SharecapitalCapitalsurplusRetainedearnings

TreasurysharesTotalshareholders’ equity

Valuationdifferenceonavailablefor-salesecurities

26,56429,806

81,211(4,638) 132,944

1,759

1,915

1,915
(4,708)15,233

3,830(4,708)15,233

—
—
—

3,830
(4,708)15,233(3,661)100——(3,661)
100

(136)

—

(136)

Deferred
gains orlosses onhedges32

RemeaForeign
surements
currencyof definedtranslation
benefitadjustment
plans

57

(10)

Total
Share
accumuacquisition
lated otherrightscomprehensive
income1,839

410

Noncontrollinginterests

Total net
assets

10,926 146,120

Changes during period
Issuance of new shares
Dividends of surplus
Net income attributable toowners of parent(3,661)
139

Purchase of treasury shares(39)

Disposal of treasury shares
Change of scope of consolidation(136)

Change in ownership interest ofparent due to transactions with
non-controlling interests—

Net changes in items other than

(287)

38

697

927

1,375

(21)

2,524

3,878
14,537

shareholders’ equity
Total changes during period

1,915

1,739

10,525(3,521)

10,658

(287)

38

697

927

1,375

(21)

2,524

Balance at end of period

28,47931,54591,737(8,159) 143,602

1,472

70

755

916

3,215

388

13,451 160,657

SENKO INTEGRATED REPORT 202256

Consolidated financial statements

Consolidated statements of cash flows(Millions of yen)

Fiscal year ended
March 31, 2021

(April 1, 2020 - March 31, 2021)
Cash flows from operating activities
Income before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Decrease (increase) in retirement benefit asset
Increase (decrease) in retirement benefit liability
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for share awards
Increase (decrease) in provision for loss on disaster
Interest and dividend income
Foreign exchange losses (gains)
Interest expenses
Loss (gain) on sale of non-current assets
Loss on tax purpose reduction entry of non-current assets
Subsidy income
Loss on retirement of non-current assets
Impairment losses
Gain on bargain purchase
Reversal of provision for asset retirement obligations
Amortization of business commencement expenses
Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in accrued liabilities
Increase (decrease) in accrued consumption taxes
Decrease (increase) in consumption taxes refund receivable
Other(April 1, 2021 - March 31, 2022)

22,59817,441779(78)(3,376)
2,472
570
(121)
68
(220)
(109)
1,171
(431)
337
(312)
310
3,053
(4,483)(348)
560(1,539)
(682)
1,947
551
(1,773)509

24,77819,8171,071
2(2,232)
874
218
186
416
(386)
(251)
1,244
(68)
253
(248)
182
31
—
—
—
(5,123)(592)
3,654(1,685)22(335)

Subtotal

38,89541,830

Proceeds from subsidy income
Interest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

312
622(1,150)(6,822)31,858248
377(1,249)(9,321)
31,885

Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Payments for investments in capital of subsidiaries and associates
Payments for guarantee deposits
Purchase of shares of subsidiaries resulting in change in scope of consolidation
Other
Net cash provided by (used in) investing activities(2,069)1,803(33,618)
1,455
—
(987)
(11,386)(1,505)(46,309)(2,071)
2,028(30,311)907(5,668)(1,097)(8,837)(1,091)(46,141)

Cash flows from financing activities
Net increase (decrease) in short-term loans
Proceeds from long-term loans
Repayments of long-term loans
Repayments of finance lease obligations
Proceeds from issuance of bonds
Redemption of bonds
Purchase of treasury shares
Proceeds from sale of treasury shares
Dividends paid
Dividends paid to non-controlling interests
Payments from changes in ownership interests in subsidiaries that do not result in change in scope of consolidation
Other
Net cash provided by (used in) financing activities

334
21,566(14,510)(4,465)
42,110(48)(4,312)106(3,967)(169)—
113
36,757

4,671
22,563(4,035)(5,359)10,000(13,288)(3,630)
6(4,704)
(148)
(249)
(51)
5,773

(157)

304

Net increase (decrease) in cash and cash equivalents

22,149(8,177)

Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents resulting from inclusion of subsidiaries in consolidation

27,142
1,078

50,371—

Cash and cash equivalents at end of period

50,371

42,193

Effect of exchange rate change on cash and cash equivalents

57

Fiscal year ended
March 31, 2022

SENKO INTEGRATED REPORT 2022

Overview of the SENKO Group

Strategies for Sustained Growth

Data Section

Foundation for Growth

Share Status and Company Profile
Share Status(As of March 31, 2022)

Company profile(As of March 31, 2022)

Listed exchange

Prime Market, Tokyo Stock Exchange

Trade name

SENKO Group Holdings Co., Ltd.

Stock code

9069

Established

September 1916

Authorized shares

294,999,000

Incorporated

July 1946

Outstanding shares

157,070,496

Head Office2-8-10 Shiomi, Koto-ku, Tokyo, Japan

Representative

Yasuhisa Fukuda, President andRepresentative Director

Share capital

28,479 million yen

Group employees

20,725

Group companies

161 (147 subsidiaries and 14 affiliates)

Number of shareholders 12,603
Osaka Stock Transfer Agent Division
Mitsubishi UFJ Trust and Banking
Corporation
3-6-3, Fushimimachi, Chuo-ku,
Osaka 541-8502, Japan

Administrator ofshareholders’ register

Major shareholders

Number
Percentageof shares
held(Thousands)

The Master Trust Bank of Japan, Ltd.

18,31312.24%

Custody Bank of Japan

13,209

8.83%

Asahi Kasei Corporation

11,676

7.80%

SENKO Group Employee’s Stockholding

6,946

4.64%

STATE STREET BANK AND TRUST COMPANY

4,356

2.91%

SENKO Co., Ltd.

Mitsubishi UFJ Trust and Banking Corporation

4,060

2.71%

Runtec Corporation

Isuzu Motors Ltd.

4,039

2.70%

Tokyo Nohin Daiko Co., Ltd.

JPMORGAN CHASE BANK

3,554

2.38%

SENKO A Line Amano Co., Ltd.

Tokio Marine & Nichido Fire Insurance Co., Ltd.

3,439

2.30%

Nippon Marine Co., Ltd.

Sekisui Chemical Co., Ltd.

3,393

2.27%

Across Transport Co., Ltd.

Main group companies
Domestic

SENKO Shoji Co., Ltd.

Shareholders by type

Smile Corp.
AST Corporation

Treasure stock1
7,340,766
4.67%

Individuals andothersFinancial institutions

Overseas44
56,326,412
35.87%

Dalian Tri-Enterprise Logistics Co., Ltd.

12,05923,475,206
14.95%

Overseas
financial
institutions
and individuals

Shanghai Senko International Freight Forwarding Inc.
Guanzhou Senko Logistics Co., Ltd.
Senko International Logistics Pte. Ltd.

Shareholders
by type239
33,875,277
21.57%

Other domestic corporations

Shanghai Smile Corp.
HONG KONG SMILECORP LIMITED

Securities firms

KOREA SMILE CORP LIMITED

29
2,145,357
1.37%

SMILECORP VIETNAM CO., LTD.

231
33,907,478
21.59%SENKO INTEGRATED REPORT 2022

58

Inquiries

Public Relations Office
13th floor, Sunrise Building Osaka, 2-6-8 Bingomachi, Chuo-ku, Osaka 541-0051
TEL: 06-6440-5156 FAX: 06-6440-5148
URL: https://www.senkogrouphd.co.jp/en/

Official Instagram accountsenko_group.official

Published December 2022