TRANSPORTA
WAREHOUSIINTERNATIO
DISTRIBUTIOCONSULTING
TRANSPORTA
WAREHOUSIINTERNATIO
DISTRIBUTIO
Annual Report 2004

For the year ended March 31, 2004

SENKO Co., Ltd.

Logistics of the Future Logistics of the Future Logisti

Profile

Established in Osaka in July 1946, Senko Co., Ltd. is an integrated distribution
services company. The Company has grown steadily over the years, listing on theFirst Section of the Osaka Securities Exchange in 1975 and on the First Section of theTokyo Stock Exchange in 1990.
Senko boasts a national network in Japan of more than 200 offices, 2,514 vehicles, 6cargo ships, and 718,345 square meters of commercial warehouse space. The
Company engages in wide-ranging business operations, centered on trucking andextending to warehousing, marine transport, railway forwarding, in-factory work,and multimodal international transportation.
Senko's forte lies in supplying integrated distribution services, from distribution
consulting to system design and operations, that closely match customer needs.
Based on the provision of efficient transportation and distribution systems byconstructing customer supply chains management systems centered on the
Company's Best Partner System, a new logistics system that takes full advantage of
information technology, these efficient distribution services have an excellent
reputation in the market.
Senko plans to take another major step forward in its transformation from an
integrated distribution services company to a logistics information company
through the even greater utilization of information technology to provide customers
with high-quality, efficient logistics solutions.

Contents

Consolidated Financial Highlights
A Message from the President
Review of Operations
Truck Transport
Warehousing
In-factory Work
Other Businesses
Financial Review
Financial Section
Report of Independent Certified Public Accountants
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statements of Shareholders’ Equity
Consolidated Statements of Cash Flows
Notes to the Consolidated Financial Statements
Consolidated Subsidiaries and Affiliated Companies
Board of Directors and Corporate Auditors, Executive Officers
Corporate Data

1
2
4
5
6
7
8
11
12
14
15
16
17
23
24
25

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

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

Thousands of
U.S. dollars

Millions of yen
Years ended March 31

2004

2003

2004

¥172,974¥167,498$1,637,391

Operating income

5,042

4,852

47,728Net income

2,175

1,681

20,589Total assets

124,717

127,104

1,180,585

Shareholders’ equity

43,161

41,777

408,567

For the year:
Operating revenues

At year end:

Per share data: (Yen and U.S. dollars)
Net income¥19.20¥14.80$0.18

Cash dividends

7.50

7.50

0.07

Diluted net income

18.02

12.92

0.17

Shareholders’ equity

388.42375.95

3.68

Note : U.S. dollar amounts are converted from yen, for convenience only, at the prevailing rate of ¥105.64 to U.S.$1 on
March 31, 2004.

Operating revenues
200(Billions of yen)

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

Net income (loss) per share
25

2,000

20

1,500

15

1,000

10

500

5

0

0

(Yen)

150

100

50

0

00

01

02

03

04

-10,000

00

01

02

03

04

-100

00

01

02

03

04

1

A Message from the President
New Medium-Term Business Plan Goes on
Business Environment
In the fiscal year ended March 31, 2004, the Company achieved growth in revenues and income.
Consolidated operating revenues advanced 3.3%, to ¥172,974 million while consolidated operating
income increased 3.9%, to ¥5,042 million. Consolidated net income surged 29.4%, to ¥2,175 million.
During the fiscal year under review, improvement in certain economic indicators demonstrated
positive signs in the Japanese economy. Despite the lack of recovery in personal consumption due
to the effects of the prolonged economic deflation, exports expanded thanks to the rebound in the
U.S. economy, private sector capital investment increased, and the stock market swung upward.
In the transport and distribution industry, although there were encouraging signs of improvement
in some freight volume categories, conditions remained difficult. Price declines continued in thegeneral market, and the intensified competition between companies was further aggravated bydemands for distribution expense cuts by customers.
Under these conditions, in the third and final year of the medium-term business plan implemented
in April 2001, the Company pursued the development of new business in the wholesale and retaillogistics and procurement and supply logistics sectors. These efforts were based on the provisionof efficient transportation and distribution systems by constructing customer supply chainsmanagement systems centered on the Company's Best Partner System, a new logistics system thattakes full advantage of information technology. Among other efforts to develop new demand, theCompany opened a new distribution center in Ibaraki Prefecture in July 2003. One of Senko's
largest yet, the distribution center specializes in serving wholesale chain stores.
As a result of these measures, operating revenues of the retail logistics business, which combines the wholesale and retail and medical
treatment and pharmaceutical fields, rose 13.7% year on year. The revenue contribution of the retail logistics business to total
operating revenues increased 1.3 percentage points.
Although the introduction of an integrated compensation system for the national health insurance plan result in higher healthinsurance costs, the Company worked to maintain profitability by consolidating its bases, improving productivity, and promoting
greater efficiency through such actions as introducing an electronic purchasing system to reduce operating expenses. Senko also
actively made efforts to increase profitability through low cost operations by undertaking financial structural reforms, such as
targeting more efficient use of assets and returning the substituted portion of the Japanese government's welfare pension insurance
scheme. Through these measures, the Company worked to establish a business base from which to launch a major leap forward
starting in the current fiscal year.
Outline and Goals of New Medium-Term Business Plan
Built upon the framework of values underlying our slogan "The Challenge of Creative Logistics," our new medium-term business plan
got under way in April 2004.
The keynote of the plan's strategy is to pursue originality and superiority in supporting the optimization of our customers' production
and logistics activities. Senko will achieve this goal through the provision of logistics and information services offering "Greater Safety
and Quality" and "More Efficient Costs."
The plan's sales strategy seeks to expand sales based on the development of supply chain
management (SCM) business while nurturing growth fields that will become important sources of earnings in the future. In addition,
we are proceeding to strengthen our financial and profitability structures while also reinforcing our corporate social responsibility(CSR) activities. Through these activities, we are striving to increase the enterprise value of our entire corporate group.
Among specific strategies, we have set individual sales strategies for each category of product handled.
First, in our retail logistics business, which combines the wholesale and retail and medical treatment and pharmaceutical sectors andhas continued to post double digit growth in recent years, we are developing and supply logistic services for each chain store category
while starting up a network system that comprehensively covers the medical business. Based on these strategies, we are targeting
expanding retail logistics business operating revenue by 1.5 times, to ¥40.0 billion in the final year of the business plan, compared with
¥25.8 billion in the fiscal year under review.
In our housing-related business, we are developing our SCM business for housing construction, adapting our processes to the trend2Offensive, Targeting Growth
toward cooperative logistics within the housing construction industry. We are offering a service encompassing procurement to just-intime delivery of materials to the factory workplace. We are taking measures to comply with the zero emissions policy of workplaces.
And we are enlarging the distribution area for the renovation exterior materials that housing manufacturers have been concentrating
marketing efforts on.
Leveraging our nationwide business development capabilities and our diversified logistics system, we are expanding SCM activities,
including support for customers entering overseas markets, in our petroleum-related products and plastics business. We are focusing
our efforts on maintaining our top-ranking shares of the general-purpose resin and targeting the top share of the lubricant oil
distribution markets.
To serve overseas companies and modal-shift companies, we are expanding our overseas logistics network centered on the People's
Republic of China, which is steadily becoming the production base of Japanese manufacturers. We are working to strengthen andextend our integrated overseas and domestic transport system for our major customers.
Among new businesses, we are developing our temporary staffing service that specializes in the logistics field. We also arestrengthening our moving business, which is linked to our housing-related business strategy. Other efforts to increase consolidated
operating revenues through new business include reinforcing our trading business, which is based on our electronic purchasingsystem.
Through the pursuit of the above strategies, we aim to reach the quantitative goals of our new medium-term business plan by thefiscal year ending March 2007, the final year of the plan. The goals are operating revenues of ¥200.0 billion (currently ¥173.0 billion),
operating income of ¥6.5 billion (currently ¥5.0 billion), and net income of ¥3.0 billion (currently ¥2.2 billion).
Corporate Social Responsibility Activities
We are pursuing a structure that will ensure a high reputation for our corporate group among our customers and in society for social
responsibility (CSR). We are working toward that goal by bolstering the internal guidance and promotional organizations within theGroup through thorough implementation of corporate governance and compliance, improved safety and quality, and environmental
preservation practices.
Among these efforts, Senko has made corporate governance its top priority management issue, and has given the board of directors animportant role in this area. Meeting at least once a month, the board of directors is responsible for monitoring compliance with matters
stipulated in the law, deciding important matters related to the management of the Company, and monitoring business execution.
The Company has adopted the auditor system by which four auditors including two external auditors attend meetings of the board of
directors, objectively monitor the directors' execution of their duties, and cooperate with the internal audit department and the
independent certified public accountant to conduct rigorous audits of the Company and its subsidiaries.
On June 29, 2004, Senko reinforced the function of the board of directors by introducing a corporate officer system. The purpose of the
new system is to separate the business decision and monitoring roles of the board from the business execution role of managers. In
addition to clarifying the roles and responsibilities of these two functions, the new system also aims to provide an opportunity toachieve placement of the right person in the right job for a diverse range of the Company's personnel.
To Our Shareholders
The Company regards distribution of to shareholders as a management priority. Our basic policy on profit distribution is to continue
to pay stable dividends that reflect underlying business performance while also retaining the internal reserves necessary to provide for
future business development and strengthen the business structure. We are committed to improving earnings and continuing toprovide stable dividends to our shareholders. In these endeavors, we look forward to the continued support of our shareholders.

June 2004

Yasuhisa Fukuda
President and Representative Director

3

Review of Operations

Truck Transport

Operating revenues
120(Billions of yen)100

Share of revenues

80

60

40
51.7%

20

0

4

00

01

02

03

04

The Senko Group's truck transport operations have developed an
extensive nationwide network, providing our customers withtransportation and delivery services that match their products anddistribution structure, including exclusive, combination, route, and joint
transport services. We transport industrial raw materials, machine
products, construction materials, housing materials, agricultural
products, and consumer items and provide moving services. In short, we
handle almost any freight related to food, shelter, and clothing. We
operate a diversified fleet comprised of medium-duty trucks, heavy-duty
trucks, and tractor-trailers as well as specialty transport trucks, such as
tankers, specialty loose powder carrying, and refrigerated trucks. The
ability to transport items and materials correctly has won Senko highmarks from manufacturers and other customers.
In the fiscal year ended March 31, 2004, consolidated operating revenues
from the truck transport business increased 4.7% compared with theprevious fiscal year, to ¥89,402 million. In July 2003, full-scale operations
got under way of a new distribution center in Mitsukaido, Ibaraki
Prefecture that specializes in serving major home center customers. We
also targeted new home-center-related business utilizing existing PD
centers. These and other measures resulted in greater volumes of freightbusiness with wholesale and retail stores. Furthermore, the lubricant oil
distribution business expanded favorably as did the housing construction
material and other material procurement freight business.

Warehousing
Senko warehouses present a very different image
from the warehouses of the past. These
multifunctional distribution centers offer services
that combine the storage, delivery, set assembly, andlabeling processes of a warehouse with advanced
information functions. Senko operates 154 facilities atmajor distribution points nationwide, providing total
storage space of approximately 720,000 square
meters. With these warehousing bases as the core of
our operations, we use systems designed in
anticipation of diverse customer needs to combine
information services and distribution services. These
capabilities allow us to offer a full range of logistics
services that assist our customers' production andsales operations.
In the fiscal year under review, consolidated
operating revenues from the warehousing businessamounted to ¥21,581 million, climbing 1.4% from ayear earlier. Revenues were negatively affected by
reduced overall warehousing space resulting fromthe consolidation of bases undertaken to increase theefficiency of our business structure. Nevertheless,efforts to develop new wholesale and retail-related
freight business resulted in overall growth in thewarehousing business.

Share of revenues
12.5%

Operating revenues
25(Billions of yen)

20

15

10

5

0

00

01

02

03

04

5

Review of Operations

Share of revenues

In-Factory WorkIn-factory work comprises distribution andproduction processes spanning everything fromloading and unloading raw materials at ourcustomers' factories and warehouses to wrapping,packaging, and loading finished products. These
professional distribution services support the
management of the flow of materials and products
within factories.
In the fiscal year under review, consolidated
operating revenues from the in-factory workbusiness rose 4.8% year on year, to ¥15,396 million.
The development of an apparel distribution center
business in the Tokyo region contributed to revenue
growth.

8.9%

Operating revenues
20(Billions of yen)

15

10

5

0

6

00

01

02

03

04

Other Businesses
The others business category includes railway forwarding on trunk routes;
marine transport by container ship, mixed cargo steamer, and specialty ship;leasing of warehouses to specific customers and warehouse space rental;
intermodal international freight forwarding; petroleum sales; merchandise sales;
information processing and software development; and vehicle maintenance.
During the fiscal year, consolidated operating revenues from other businessedged forward 1.0% from the prior fiscal year, to ¥46,595 million. Distribution
processing business revenues expanded thanks to the start up of the distribution
center in Mitsukaido, Ibaraki Prefecture and new wholesale and retail-related
freight business at existing distribution centers. We worked to develop demand
for marine transport through active sales proposals to companies for model
shifts in their cargo systems in consideration of the environment, achieving
revenue growth in this sector. International cargo distribution revenues werealso up due to active development of new distribution business along with the
expansion of the overseas networks of existing customers.

Share of revenues

Operating revenues
60(Billions of yen)

26.9%

50

40

30

20

10

0

00

01

02

03

04

7

Financial Review

Performance
Consolidated operating revenues for the fiscal year ended March 2004
advanced 3.3%, to ¥172,974 million. Contributing to the overall increase
was higher operating revenues in each business segment andparticularly strong growth in the truck transport segment, which
accounts for the major portion of operating revenues.
Senko restrained growth in operating expenses during the fiscal year
through companywide efforts to achieve low cost operations,consolidation of bases, and productivity improvements. As a result,gross margin climbed 7.4%, to ¥13,011 million and consolidated
operating income rose 3.9%, to ¥5,042 million. Due to aggressive sales
efforts, selling, general and administrative expenses increased 9.7%
year on year, resulting in the operating income ratio remaining
unchanged, at 2.9%.
Income before income tax and minority interests surged 13.5% year on
year, to ¥4,233 million. Although there was an increase in healthinsurance costs due to the introduction of an integrated compensation
system for the national health insurance plan, the decline in interest
expenses due to a reduction in interest-bearing debt and the gain on
return of the substituted portion of the Japanese government's welfare
pension insurance scheme supported an overall increase in income
before income taxes and minority interests.
Despite an increase in income taxes, the adjusted amount of taxes to be
paid declined due to a change in the enterprise tax rate caused by the
introduction of the pro forma standard tax system. Consolidated net
income, therefore, jumped 29.4%, to ¥2,175 million, and the ratio of net
income to operating revenues improved 0.2 percentage points, to 1.2%.
Performance by Business Segment
By business segment, truck transport operating revenues for the fiscal
year under review rose ¥4,020 million, or 4.7%, to ¥89,402 million,

Operating revenues

generating 51.7% of total operating revenues. In addition to a substantial
increase in the shipping volume in the retail logistics-related sector,
which combines wholesale and retail and medical treatment andpharmaceutical logistics, shipments in the core housing-related sector
and the petroleum-related and plastics sector were also favorable.
The operating revenues from the warehousing business edged up ¥294
million, or 1.4%, to ¥21,581 million, accounting for 12.5% of total
operating revenues. Although efforts to increase the efficiency of thesegment's operating structure by consolidating warehousing bases
resulted in a decrease in storage space available, the volume of businessin the retail logistics-related sector expanded.
Accounting for 8.9% of total operating revenues, in-factory operating
revenues advanced ¥704 million, or 4.8%, to ¥15,396 million. During the
fiscal year under review, the Company started up a new apparel
distribution center business for a customer in the Tokyo region.
Operating revenues from other businesses edged forward ¥458 million,
or 1.0%, to ¥46,595 million, contributing 26.9% of total operating
revenues. This segment comprises railway forwarding, marinetransport, leasing warehouses to specific customers and logistics
processing for warehouse space rental, international freight forwarding,petroleum sales, merchandise sales, and others. Our sales proposals tocompanies for modal shifts in their shipping in consideration of theenvironmental stimulated demand, resulting in growth in shipping
volume in the marine transport sector as well as the international freight
forwarding sector.
Performance by Principal Product Category
The Company has three core product categories: housing-related,
petroleum-related and plastics, and retail logistics-related (wholesale
and retail and medical treatment and pharmaceuticals logistics fields).
For the fiscal year ended March 2004, these three core product categories

Operating income

Net income

Ratio of SG&A
expenses to operating revenues

200(Billions of yen)

7,000(Millions of yen)

2,500

6,000
150

(Millions of yen)

5

(%)

2,000

5,000
1,500

4

4,000
100

1,000

3,000
500

2,000
50

0

8

00

01

02

03

04

0

3

0

1,000

00

01

02

03

04

-10,000

00

01

02

03

04

0

00

01

02

03

04

Consolidated Operating Revenues by Products Handledaccounted for 59.3% of total operating revenues. Operating
revenues from housing-related products increased ¥1,120
million, or 2.8%, year on year to ¥41,400 million andaccounted for 23.9% of total operating revenues.
Contributing to greater operating revenues from housingrelated products, revenues from inbound shipments offactory materials edged up 1.9% thanks to favorable housing
starts. In addition, revenues from the procurement andsupply logistics sector, such as manufacturers of housing
construction materials, also benefited from growth in the
housing market, rising 7.3%.

(Units: billions of yen, %)Petroleum-related and plastic operating revenues rose ¥1,480
million, or 4.4%, to ¥35,470 million, and contributed 20.5% of
total operating revenues. Distribution shipments of resin forautomobiles, consumer electronics, and office equipment
manufacture were favorable during the fiscal year underreview. Among other contributors to greater operating
revenues, distribution shipments of lubricating oil for a
petroleum manufacturer and plastic film for a chemical
manufacturer increased.
Operating revenues from retail logistics-related products
expanded ¥3,100 million, or 13.7%, to ¥25,810 million,
accounting for 14.9% of total operating revenues. Wholesale
and retail-related products operating revenues increased
13.0% from the previous fiscal year because of the start up of
full-scale operations of the distribution center in Mitsukaido,
Ibaraki Prefecture that serves major home center chains.
Moreover, the volume of home center-related business at
existing PD centers also expanded. In the medical treatment
and pharmaceutical field, revenues surged 20.1% year on
year because of greater new pharmaceutical wholesalerelated logistics business.

Operating income / net
income to operating revenues
4(%)

Net income per share

40

Operating income tooperating revenues

3

Year ended March 2003

Revenues

Composition

Revenues

Composition

Change% Change

Housing

41.4

23.9

40.3

24.1

1.1

2.8

Petroleumrelated products,
and plastics

35.5

20.5

34.0

20.3

1.5

4.4

Retail logisticsrelated products

25.8

14.9

22.7

13.6

3.1

13.7

International
freight forwarding
and modal shifts

14.8

8.5

13.9

8.3

0.9

6.5

Chemicals andfertilizers

4.3

2.5

4.9

2.9

-0.6

-12.2

Foods

4.0

2.3

4.0

2.4

-0.0

-0.3

Electronics
products andmachinery

3.2

1.9

3.3

2.0

-0.1

-3.0

Others

44.0

25.5

44.4

26.4

-0.4

-0.9

Total

173.0

100.0

167.5

100.0

5.5

3.3

Cash dividends per share

Composition of
products handled(Year ended March 2004)

(Yen)

(Yen)

30

2

Year ended March 2004

8

20



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Net income tooperating revenues
1

10

0

0

-5

00

01

02

03

04

-100

7

00

01

02

03

04

0

00

01

02

03



04

9

Financial Position
Total assets at March 31, 2004 contracted compared with the previous
fiscal year, decreasing ¥2,387 million, to ¥124,717 million. Current assets
decreased ¥1,713 million, to ¥40,992 million. The decline in current assets
principally resulted from a decline in cash and cash equivalents
resulting from efforts to reduce interest-bearing debt.

redemption of the convertible bonds. Consequently, interest-bearing
debt at fiscal year-end declined ¥5,532 million, to ¥38,309 million. The
ratio of interest-bearing debt to total assets improved 3.8 percentage
points, to 30.7%. The Company successfully reached its medium-termbusiness plan target of reducing interest-bearing debt to ¥38,400 million
by the fiscal year under review.

Total fixed assets edged down ¥674 million year on year, to ¥83,725
million. Net property and equipment declined ¥485 million, to ¥66,813
million. The decline can be mainly attributed to the reduction in land
due to the consolidation of warehousing bases for the purpose ofincreasing the efficiency of the business structure.

Shareholders' equity at fiscal year-end amounted to ¥43,161 million,
advancing ¥1,384 million from a year earlier. The rise in shareholders'equity came mainly from an increase in retained earnings as a result ofgrowth in net income. The equity ratio, therefore, improved 1.7
percentage points, to 34.6%.

Total capital expenditures during the period under review amounted to¥3,273 million, up ¥780 million from the previous fiscal year. The major
component was the new distribution center for chain stores, one of theCompany's biggest centers.

Cash FlowsNet cash provided by operating activities for the year ended March 31,
2004, declined ¥427 million, or 6.5%, to ¥6,180 million. This decrease can
primarily be attributed to a reduction in allowance for employee
retirement.

In accordance with the pursuit of the business strategies under the new
medium-term business plan, the Company plans to invest ¥25,000
million over a three-year period for the maintenance and renewal ofexisting facilities and for strategic investments.

Net cash used in investing activities increased ¥335 million, or 16.8%, to¥2,320 million from the previous fiscal year. Payments for purchases of
fixed assets were primarily responsible for this increase.

Investments and other assets declined ¥181 million from a year earlier,to ¥16,033 million, chiefly because of a reduction in deferred tax assets.

Consequently, free cash flow at fiscal year-end totaled ¥3,860 million,
down ¥762 million, or 16.5%, from the previous fiscal year.

At March 31, 2004, current liabilities totaled ¥38,489 million, decreasing¥9,797 million from the previous fiscal year. The decrease can be
principally attributed to the redemption of ¥13,330 million in convertible
bonds classified as current portion of long-term debt in the prior fiscal
year and to an increase in accrued income taxes.

Net cash used in financing activities rose ¥623 million, or 10.6%, to¥6,483 million. This increase resulted chiefly from the Company
continuing its efforts from the previous fiscal year todecrease interestbearing debt.
As a result, cash and cash equivalents at end of year totaled ¥11,400
million, declining ¥2,626 million, or 18.7% from the prior fiscal year.

Long-term liabilities increased ¥6,026 million, to ¥43,067 million,
primarily because of a rise in long-term loans in relation to the

Total assets

160

Total shareholders’equity / ratio(Billions of yen)

55

150

(Billions of yen)(%)

ROE / ROA

35

50

30

45

25

40

20

35

15

30

10

25

5

5

(%)

4

3

2

140

1
130

0

10

00

01

02

03

04

0

00

01

02

03

04

0

0

-15

ROA

ROE
00 01

02

03

04

Report of Independent Certified Public Accountants

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

We have audited the accompanying consolidated balance sheets of SENKO CO., Ltd. and its consolidated
subsidiaries as of March 31, 2004 and 2003, and the related consolidated statements of income, shareholders’ equity,and cash flows for the years then ended, all expressed in Japanese yen. These consolidated financial statements are
the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, theconsolidated financial position of SENKO CO., Ltd. and its consolidated subsidiaries as of March 31, 2004 and 2003,
and the consolidated results of their operations and their cash flows for the years then ended in conformity withaccounting principles and practices generally accepted in Japan.

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

Ohtemae Audit Corporation
Osaka, Japan
June 29, 200411

Consolidated Balance Sheets
SENKO Co., Ltd. and Consolidated Subsidiaries
March 31, 2004 and 2003

Thousands of
U.S.dollars

Millions of yen

ASSETS

2004

2003¥11,400¥ 14,026$ 107,914

180

112

1,704

25,72825,035

243,544

(81)

(62)

(767)

Inventories

664

620

6,286

Short-term loans to non-consolidated subsidiaries and affiliates

123

215

1,164

2,978

2,759

28,19040,99242,705

388,035

Investments in and long-term loans to non-consolidated subsidiaries and affiliates

554

502

5,244

Investment securities (Notes 3 and 7)

904

758

8,557

119,729

119,415

1,133,368

Less accumulated depreciation(52,916)(52,117)(500,909)

Net property and equipment

66,81367,298632,459

Deferred tax assets-non-current (Note 11)

6,928

7,548

65,582Other assets

8,526

8,293

80,708¥124,717¥ 127,104$1,180,585

2004

Current assets:
Cash and cash equivalents
Trade accounts and notes receivable—
Non-consolidated subsidiaries and affiliates
OthersLess allowance for doubtful accounts

Prepaid expenses and other current assets
Total current assets

Property and equipment, at cost (Notes 4 and 7)

Total assets

See the accompanying notes to the consolidated financial statements.

12

Thousands of
U.S.dollars

Millions of yen

LIABILITIES AND SHAREHOLDERS’ EQUITY

2004

2003

¥ 10,340¥ 10,300$ 97,880

2,287

15,70921,649

158

143

1,495

15,41913,729145,958

Accrued expenses

2,572

2,333

24,347

Accrued income taxes

1,635

217

15,477

Other current liabilities

6,078

5,855

57,53538,48948,286364,341

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

25,682

17,832

243,109

Accrued severance indemnities (Note 6)

14,728

16,976

139,417

Other long-term liabilities

2,657

2,233

25,151

Total liabilities

81,55685,327772,018

Issued—111,746,167 shares

18,296

18,296

173,192

Capital surplus

16,387

16,387

155,121

Retained earnings

8,577

7,267

81,191

82

(1)

776

(181)

(172)

(1,713)

43,161

41,777

408,567¥124,717¥ 127,104$1,180,585

2004

Current liabilities:
Short-term loans (Note 5)
Current portion of long-term debt (Note 5)
Trade accounts and notes payable—
Non-consolidated subsidiaries and affiliates
OthersTotal current liabilities

Contingent liabilities (Note 8)
Shareholders’ equity (Note 10):
Common stock:
Authorized—294,999,000 shares

Unrealized holding gain (loss) on securities
Less treasury stock, at cost
(737,628 shares in 2004 and 707,462 shares in 2003)
Total shareholders’ equity
Total liabilities and shareholders’ equity

See the accompanying notes to the consolidated financial statements.

13

Consolidated Statements of Income
SENKO Co., Ltd. and Consolidated Subsidiaries
Years Ended March 31, 2004 and 2003

Thousands of
U.S.dollars

Millions of yen

2004

2003

¥ 89,402¥ 85,382$ 846,289

83,572

82,116

791,102

172,974

167,498

1,637,391

Truck transport

83,262

79,370788,167

Others

76,70176,013726,060

Selling, general and administrative expenses

7,969

7,263

75,436

Total operating costs and expenses

167,932

162,646

1,589,663

5,042

4,852

47,728Interest and dividend income

145

169

1,373

Interest expenses

(469)

(705)

(4,440)

Others, net

(485)

(588)

(4,591)(809)(1,124)(7,658)

4,233

3,728

40,070Current

1,798

307

17,020

Deferred

260

1,740

2,461

2,058

2,047

19,481

Net income¥2,175¥ 1,681$ 20,589

2004

Operating revenues:
Truck transport
OthersTotal operating revenues
Operating costs and expenses:

Operating income
Other income (expenses):

Income before income taxes
Income taxes (Note11):

Per share of common stock

Yen

U.S.dollars

Net income¥19.20¥ 14.80$ 0.18

Diluted net income

18.02

12.92

0.17

Cash dividends applicable to the year

7.50

7.50

0.07

See the accompanying notes to the consolidated financial statements.

14

Consolidated Statements of Shareholders’ Equity
SENKO Co., Ltd. and Consolidated Subsidiaries
Years Ended March 31, 2004 and 2003
Millions of yen

Thousands
Number ofshares ofcommon stock
issuedCommon stock

Capitalsurplus111,746¥ 18,296¥ 16,387

Net income——

Cash dividends—

Unrealized holding gain on securities
Treasury stock

Unrealized
holding gain
(loss) on
securities

Treasury stock¥6,422¥ (13)

¥ (3)

—

1,681

—

—

—

—

(836)

—

—

—

—

—

—

12

—

—

—

(0)

—

—

(169)

111,746

18,296

16,387

7,267

(1)

(172)

Net income

—

—

—

2,175

—

—

Cash dividends

—

—

—

(833)

—

—

Bonuses to directors and statutory auditors

—

—

—

(32)

—

—

Unrealized holding gain on securities

—

—

—

—

83

—

Treasury stock

—

—

(0)

—

—

(9)

111,746¥ 18,296¥ 16,387¥ 8,577¥82¥ (181)Thousands of U.S. dollars
Unrealized
holding gain
CapitalRetained(loss) on
surplusearnings
securities

Treasury stock

Balance at April 1, 2002

Balance at March 31, 2003

Balance at March 31, 2004

Common stock

Retainedearnings$ 173,192$155,121$68,790$(9)$(1,628)

Net income——

20,589——Cash dividends——(7,885)——

Bonuses to directors and statutory auditors

—

—

(303)

—

—

Unrealized holding gain on securities

—

—

—

785

—

Treasury stock

—

(0)

—

—

(85)

$ 173,192$155,121$81,191$776$(1,713)

Balance at March 31, 2003

Balance at March 31, 2004

See the accompanying notes to the consolidated financial statements.

15

Consolidated Statements of Cash FlowsSENKO Co., Ltd. and Consolidated Subsidiaries
Year Ended March 31, 2004 and 2003

Thousands of
U.S.dollars

Millions of yen

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

2004

2003

2004

¥4,233¥3,728$40,070

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

3,150
253
—
75
(380)
(87)
(169)
705
468
398
416
(469)
8,088
176
(730)
(927)
6,607

29,070682
2,035—(21,280)
2,225(1,373)
4,440(13,934)(417)
21,176
2,707
65,401
1,420(4,724)(3,597)58,500(3,006)
665
(195)
191
100
—
(75)
(2,320)(2,497)
533
(23)
115
100
(68)
(145)
(1,985)(28,455)
6,295(1,846)
1,808
947
—
(710)
(21,961)

40
8,323(20,896)
6,954
(9)
(833)
(62)
(6,483)(3)(2,626)
14,026¥ 11,400

1,650
8,259
(14,741)
—
(169)
(837)
(22)
(5,860)(0)(1,238)15,264¥14,026

379
78,786(197,804)
65,827(85)(7,885)(587)(61,369)(28)(24,858)
132,772$107,914

See the accompanying notes to the consolidated financial statements.

16

Notes to the Consolidated Financial Statements
SENKO Co., Ltd. and Consolidated Subsidiaries
1. Basis of Presenting Consolidated Financial Statements:
SENKO Co., Ltd. (the “Company”) and its domestic subsidiaries maintain their accounts and records in accordance with the provisions set forthin the Commercial Code of Japan (the “Code”) and the Securities and Exchange Law and in conformity with accounting principles and practices
generally accepted in Japan, which are different from the accounting and disclosure requirements of International Accounting Standards.
The accompanying consolidated financial statements are prepared based on consolidated financial statements of the Company and its
subsidiaries(the “Companies”) which were filed with the Director of Kanto Local Finance Bureau as required by the Securities and Exchange Law.
In preparing the accompanying consolidated financial statements, certain reclassifications and rearrangements have been made to theconsolidated financial statements issued domestically in order to present them in a form which is more familiar to readers outside Japan.
The translation of the Japanese yen amounts into U.S. dollars is included solely for the convenience of the reader, using the exchange rate
prevailing at March 31, 2004, which was ¥105.64 to US$1.00. These convenience translations should not be construed as representations that theJapanese yen amounts have been, could have been, or could in the future be, converted into U.S.dollars at this or any other rate of exchange.
2. Summary of Significant Accounting Policies:(a) Principles of consolidation
The consolidated financial statements include the accounts of the Company and its significant subsidiaries. All significant intercompany
balances and transactions are eliminated.
Non-consolidated subsidiaries, whose combined assets, net sales, net income and retained earnings in the aggregate are not significant inrelation to those of the consolidation with the Companies.
Adjustment for consolidated account, at the time of acquisition, between the cost and underlying net equity of investments in consolidated
subsidiaries are amortized over a five-year period on straight-line method.
The Company has adopted the equity method of accounting for investments in significant affiliates. The investments in other insignificant
unconsolidated subsidiaries and affiliates are stated at cost.
(b) Cash equivalents
Cash and cash equivalents comprise cash in hand, deposits held at call with banks, net of overdrafts and all highly liquid investments withmaturities of three months or less.
(c) Investment Securities
Investment securities are classified and accounted for, depending on management’s intent.
Other securities, which are not classified as either trading securities or held-to-maturity debt securities, are reported at fair value, which
unrealized gains and losses, net of applicable taxes, reported in a separate component of shareholders’ equity.
Non-marketable other securities are stated at cost.
The cost of other securities sold is determined by the moving-average method.
The Companies classified all securities as other securities.
(d) Allowance for Doubtful Accounts
The allowance for doubtful accounts is stated in amounts considered to be appropriate based on the companies’ past credit loss experience or an
evaluation of potential losses in the receivables outstanding.
(e) Inventories
Purchased goods are stated at cost determined by the first-in first-out method. Supplies are stated at cost determined by the moving-average
cost method. Real estate for sale and work in process are stated at cost determined by the specific cost method.
(f) Property and Equipment and Depreciation
Property and equipment are stated at cost. Depreciation is principally computed at rates based on the estimated useful lives of assets using thedeclining-balance method except for buildings for which the straight-line method is applied.
The principal estimated useful lives are as follows:
Buildings and structures
3 to 60 years
Machinery and equipment
3 to 17 years(g) Accrued Severance Indemnities and Pension Plan
The Companies adopted the Accounting Standards for Retirement Benefit which was issued by the Business Accounting Deliberation Council.
In accordance with the standards, accrued severance indemnities are provided based on the account of projected benefit obligation reduced bypension plan assets at fair value at the end of annual period.
Employees’ retirement benefits, covering employees of the Company and certain consolidated subsidiaries, are provided through unfunded
lump-sum benefit plans and funded noncontributory pensions plans.
Under the plans, eligible employees are entitled, under most circumstances, to severance payments based on compensation at the time ofseverance and years of service.
The Company and certain consolidated subsidiaries also have a severance indemnity plan for directors and corporate auditors, whose accrued
severance indemnities are stated at 100% of the amount which is computed according to internal rules.
Actuarial gains and losses is amortized by the straight-line method over a period of 14 years, which is within the estimated average remaining
years of service of the Companies’ employees. The amortization of such gains and losses is recognized effective the year subsequent to the year inwhich they are incurred.
(h) Income Taxes
Deferred income taxes are recognized by the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities
are determined based on difference of between financial reporting and the tax basis of the assets and liabilities, and are measured using theenacted tax rate and laws that will be in effect when the differences are expected to reverse.
(i) Appropriation of Retained Earnings
Cash dividends, transfers to legal reserve and bonuses to directors and corporate auditors are recorded in the financial year in which a
proposed appropriation of retained earnings is approved by shareholders.

17(j) Leases
In Japan finance leases other than those that are deemed to transfer the ownership of the leased assets to lessees are accounted for by a method
similar to that applicable to ordinary operating leases.
(k) Per Share information
Basic net income per share is computed by dividing net income available to common shareholders by the weighted-average number of commonshares outstanding for the period.
Diluted net income per share of common stock reflects the potential dilution that could occur if securities or other contacts to issue common
stock were converted or exercised into common stock or resulted in the issuance of common stock.
Cash dividends per share presented in the accompanying consolidated statements of income are dividends applicable to the respective years
including dividends to be paid after the end of the year.
(l) Translation of Foreign Currencies
All monetary assets and liabilities denominated in foreign currencies are translated into Japanese yen at the exchange rate at the balance sheet
date. Revenue and expenses are translated at the rate of exchange prevailing when transactions are made.
(m) Consumption Tax
The consumption tax is not included in the amount of “Operating revenues” and “Operating costs and expenses”.

3. Investment Securities:
The carrying amounts of investment securities at March 31, 2004 and 2003, consisted of the following:—
Millions of yen
2004
2003
¥ 454
¥ 277
450
481
¥ 904
¥ 758

Marketable securities
Non-marketable equity securities

Thousands of
U.S.dollars
2004$ 4,298
4,260$ 8,558

The following is a summary of marketable securities included in investment securities, at March 31, 2004 and 2003.

2004
Equity security
Bonds and Others

2003
Equity security
Bonds and Others

2004
Equity security
Bonds and Others

Acquisition
cost
¥ 304
11
¥ 315

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

Book
value
(Market value)
¥ 443
11
¥ 454

Acquisition
cost
¥ 267
10
¥ 277

Millions of yen
Gross
Gross
unrealized
unrealized
gains
losses¥ 16¥ (17)1—¥ 17¥ (17)

Book
value(Market value)
¥ 266
11
¥ 277

Acquisitioncost$ 2,878104$ 2,982

Thousands of U.S.dollars
Gross
Gross
unrealized
unrealized
gains
losses$ 1,325$ (9)—(0)$ 1,325
$ (9)

Book
value
(Market value)$ 4,194104$ 4,298

Proceeds from sales of other securities were ¥181 million (US$ 1,713 thousand) and ¥115 million for the years ended March 31, 2004 and 2003,
respectively. The gross realized gains and losses on those sales were ¥31 million (US$ 293 thousand) and ¥29 million (US$ 275 thousand),
respectively, for the year ended March 31,2004. The gross realized gains on those sales were ¥24 million for the ended March 31,2003.

4. Property and Equipment:
At March31, 2004 and 2003, property and equipment at cost consisted of the following:—

Land
Buildings and structures
Machinery and equipment, Vehicle and Vessels
Tools, furniture and fixtures
Construction in Progress

18

Millions of yen
2004
2003
¥ 33,841¥ 34,419
66,47564,703
15,995
17,078
3,274
3,188
144
27
¥ 119,729¥ 119,415

Thousands of
U.S.dollars
2004$ 320,343
629,260
151,41030,992
1,363$ 1,133,368

5. Short-term Loans and Long-term Debt:
At March31, 2004 and 2003, short-term loans consisted of the following:—
Millions of yen
2004
2003
¥ 10,340¥ 10,300

0.7391% to 0.84% unsecured loans from banks

Thousands of
U.S.dollars
2004$ 97,880

At March 31, 2004 and 2003, long-term debt consisted of the following:—
Millions of yen
2004
2003
¥—
¥13,330
—
5,000
7,000
—

0.45% convertible bonds due 2003 (Note 1)
3.25% bonds due 2004 (Note 2)
0.92% bonds due 2009
0.24% to 2.20% loans from banks and insurance companies:
Unsecured

20,96927,969(2,287)¥ 25,682

Less current portion

15,21133,541(15,709)¥ 17,832

Thousands of
U.S.dollars
2004
$ —

—
66,263
198,495
264,758(21,649)$ 243,109

Notes: 1. In April 1996,the Company issued ¥15,000 million principal amount of 0.45 per cent. convertible bonds due 2003. At April 1, 2003,
holders of the bonds were entitled to convert such bonds into 21,520 thousand shares of common stock of the Company. The bonds areconvertible at any time before September 29, 2003 at a conversion price of ¥697 per share.
2. The bond was accounted for as redeemed due to a dept assumption agreement. The dept assumption agreement requires a counterparty
to assume obligations of paying principal and interests on bond. See Note 8 for underlying obligations of the Company.
The annual maturities of long-term debt at March 31, 2004 for the next five years are as follows:—
Year ending
March 31
2006
2007
2008
2009
2010

Millions of yen¥ 2,2876,363
5,108
10,261
3,950

Thousands of
U.S.dollars$ 21,649
60,23348,353
97,13237,391At March 31, 2004, the Company has committed line and overdraft contracts with twelve banks aggregating ¥24,650 millions ($233,340
thousands). Of the total credit limit, ¥7,140 millions ($67,588 thousands) was used as the above short-term and long-term borrowing, and the rest
¥17,510 millions ($165,752 thousands) was unused.

6. Accrued Severance indemnities:
The following tables sets forth the changes in benefit obligation, plan assets and funded status of the Company and its certain subsidiaries at
March 31, 2004 and 2003.
Thousands ofMillions of yen
U.S.dollars
2004
2003
2003
Benefit obligation at the end of year
¥ (29,268)¥ (69,534)$ (277,054)
Fair value of plan assets at the end of the year
11,721
27,579110,952
Funded status:
Benefit obligation in excess of plan assets(17,547)(41,955)(166,102)
Unrecognized actuarial loss
2,819
24,97926,685
Accrued severance indemnities recognized in the consolidation balance sheets¥ (14,728)¥ (16,976)$ (139,417)

Severance and pension costs of the Company and its certain subsidiaries included the following components for the year ended March 31, 2004 and 2003.

Service cost
Interest cost
Expected return on plan assets
Amortization:
Recognized actuarial loss
Net periodic benefit cost
Gain on return of substituted portion of employee pension fundMillions of yen
2004
2003
¥ 1,447¥ 1,855716
2,041—(1,275)550¥ 2,713(284)¥ 2,429857¥ 3,478—¥ 3,478

Thousands of
U.S.dollars
2004$ 13,697
6,778

—
5,206
$25,681(2,688)$ 22,993

19

According to the enactment of the Defined Benefit Pension Plan Law in April 2002, the Company applied for an exemption from obligation to
pay benefits for future employee service related to the substitutional portion which would result in the transfer of the pension obligations andrelated assets to the government by another subsequent application. The Company obtained an approval of exemption from future obligation by
the Ministry of Health, Labour and Welfare on April 15, 2003.
As a result of this exemption, The Company and its certain subsidiaries recognized a gain on exemption from future pension obligation of thegovernmental program in the amount of ¥284 million (US$2,688 thousands) in accordance with a transitional measurement of the accounting
standard for employee’ retirement benefits for the year ended March 31, 2004. The amount of plan assets, in accordance with a transitional
measurement, which would be transferred to the government as March 31, 2004 was ¥21,702 million (US$205,434 thousands).
Assumption used in the accounting for the defined benefit plans for the year ended March 31, 2004 and 2003 is as follows:
2004
straight-line basis
2.5%
0.0%
1 year14 year

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

2003
straight-line basis
2.5%
Primarily4.8%
1 year14 years

7. Pledged Assets:
The following assets were pledged as collateral as at March 31, 2004 and 2003—

Land
Buildings
VehiclesInvestment securities

Millions of yen
2004
2003
¥ 2,548¥ 2,548
1,198
1,236
1
1
10
10
¥ 3,757¥ 3,795

Thousands of
U.S.dollars
2004$ 24,120
11,340995$ 35,564

Millions of yen
2004
2003
¥ 80
¥ 100

Thousands of
U.S.dollars
2004
$ 757

Millions of yen
2004
2003
¥—
¥ 94
1,378
2,148
19
27
507
312
¥ 1,904¥ 2,581

Thousands of
U.S.dollars
2004$—
13,044180
4,799$ 18,023

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

Long-term debt, including current portion

8. Contingent Liabilities:
At March 31, 2004 and 2003, contingent liabilities were as follows:

Guarantees of loans to non-consolidated subsidiaries and affiliates
Guarantees of installment obligation and lease obligation for others
Notes discounted
Buyback obligations associated with securitization of receivables

In addition to the above, at March 31, 2004, the Company was committed to provide guarantees for the following bonds which were transferred
to banks under debt assumption agreements.
Thousands ofDate of
Millions of yen
U.S.dollars
agreement
3.25% bonds due 2004
¥ 5,000$ 47,331
Jul. 24, 2001
3.25% bonds due 2004
5,000
47,331
May. 19, 2003
¥10,000$94,662

9. Lease:
At March 31, 2004 and 2003, financing lease transactions whose ownership are not to be transferred were as follows:

Machinery and equipment
Tools, furniture and fixtures

20

Purchasecost¥ 11,191
14,125¥ 25,316

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

Thousands of
U.S.dollars
2004
Book value¥ 5,781
7,499¥ 13,280

Book value$ 54,724
70,986$ 125,710

Machinery and equipment
Tools, furniture and fixtures

PurchaseCost¥ 9,135
11,797¥ 20,932

Millions of yen
2003
Accumulated
amortization¥ 4,597
5,411¥ 10,008

Book value¥ 4,5386,386¥ 10,924

At March 31, 2004 and 2003, lease obligations were as follows:

Due within one year
Due after one year

Millions of yen
2004
2003
¥ 4,217¥ 3,726
9,634
7,737¥ 13,851¥ 11,463

Thousands of
U.S.dollars
2004$ 39,919
91,197$ 131,116

10. Shareholder’s equity:
The Code provides that an amount equal to at least 10% of the amounts to be disbursed as distributions of earnings be appropriated to the legal
reserve until such reserve and additional paid-in capital equals 25% of the common stock account. The Code also stipulates that, to the extent thatthe sum of the additional paid-in capital and the legal reserve exceeds 25% of the common stock account, the amount of any such excess isavailable for appropriation by resolution of the shareholders.
The retained earnings account in the accompanying consolidated financial statements at March 31, 2004, included the Company’s legal reserveof ¥ 1,506 million ($14,256 thousand).

11. Income Taxes:
Income taxes applicable to the Company and its domestic subsidiaries comprise corporation tax, inhabitants’ taxes and enterprise tax which, inthe aggregate, resulted in a statutory tax rate of approximately 42.0% for current deferred taxes and 40.6% for non-current deferred taxes for 2003
due to a prospective change in the enterprise tax rate which is effective on and after April 1, 2004, and approximately 40.6 % for 2004.
(1) Significant components of deferred tax assets and liabilities at March 31, 2004 and 2003 were as follows:

Millions of yen
2004
2003
Deferred tax assets:
Accrued severance indemnities to employees
Accrued bonuses to employees
Tax loss carryforwards
Revaluation of land
Accrued severance indemnities to directors and corporate auditors
Loss on revaluation of golf club membership
Unrealized gain on fixed assets and others
Accrued enterprise tax
Other
Net deferred tax assets
Deferred tax liabilities:
Reserve for reduction in costs of fixed assets
Other
Total gross deferred tax liabilities
Net deferred tax assets

Thousands of
U.S.dollars
2004¥ 6,993
1,029
—
346
181
155
—
132
584
9,420

¥ 7,606
789
367
346
144
140
110
—
252
9,754

$ 66,197
9,741
—
3,275
1,713
1,467
—
1,250
5,528
89,171(994)(256)(1,250)¥ 8,170

(996)
(270)
(1,266)¥ 8,488(9,409)(2,423)(11,832)$ 77,339(2) Reconciliation of the statutory effective income tax rate and the income tax rate as a percentage of income before income taxes and minority
interests at March 31, 2004 and 2003 were as follows:

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

2004
40.6%

2003
42.0%

2.5
3.6
(0.8)
—
2.7
48.6%

2.9
4.0
(0.8)
6.5
0.3
54.9%

21

12. Segment information
Business segment information of the Company and its consolidated subsidiaries for the years ended March 31, 2004 and 2003 issummarized as follows:
Millions of yen

2004
Truck
Transport

Warehousing

In-factory
works

Other

Total

Elimination or
Corporate Consolidated

a. Operating revenues and operating income:Customers¥ 89,402
Intersegment
3,847
Total operating revenues
93,249Operating costs and expenses
90,717
Operating income¥2,532¥ 21,581
112
21,693
20,770¥923¥ 15,396
5,517
20,913
19,961¥952¥ 46,595
5,681
52,276
51,630¥646¥ 172,974
15,157
188,131
183,078¥5,053¥ —(15,157)(15,157)(15,146)¥(11)¥ 172,974—
172,974
167,932¥5,042b. Assets, depreciation and capital expenditures;
Assets¥29,528
Depreciation
760
Capital expenditures
1,051¥40,175
1,186
668¥8,942
13185¥34,364
934
1,622¥113,008
3,011
3,426

¥11,70860
31¥124,717
3,071
3,457

Millions of yen

2003
Truck
Transport

Warehousing

In-factory
works

Other

Total

Elimination or
Corporate Consolidated

a. Operating revenues and operating income:Customers¥85,382
Intersegment
2,528
Total operating revenues
87,910Operating costs and expenses
85,253Operating income¥2,657¥21,287
139
21,426
20,424¥1,002¥14,692
4,408
19,10018,221¥879¥46,137
4,899
51,03650,736¥300¥167,498
11,974
179,472
174,634¥4,838¥ —(11,974)(11,974)(11,988)¥(-14)¥167,498—
167,498
162,646¥4,852b. Assets, depreciation and capital expenditures;
Assets¥29,189
Depreciation
787
Capital expenditures526¥41,865
1,245
318¥8,604132
66¥34,052919
559¥113,710
3,083
1,469

¥13,39467
17¥127,104
3,150
1,486

Thousands of U.S. dollars

2004
Truck
Transport

Warehousing

In-factory
works

Other

Total

a. Operating revenues and operating income:Customers$846,289
Intersegment
36,416
Total operating revenues
882,705
Operating costs and expenses
858,737
Operating income$23,968$204,288
1,060
205,348
196,611$8,737$145,740
52,225
197,965
188,953$9,012$441,074
53,777494,851
488,736$6,115$1,637,391
143,4781,780,869
1,733,037$47,832

b. Assets, depreciation and capital expenditures;
Assets$279,515
Depreciation
7,194
Capital expenditures
9,949$380,301
11,227
6,323$84,646
1,240
805$325,294
8,841
15,354$1,069,756
28,50232,431Elimination or
Corporate Consolidated$—(143,478)(143,478)(143,374)$(104)$110,829
568
293$1,637,391—
1,637,391
1,589,663$47,728$1,180,585
29,07032,724

13. Subsequent Event
Shareholders approved the following appropriation of retained earning at the annual meeting held on June 29, 2004

Cash dividends
Bonuses to directors and statutory auditors

22

Millions of yen
¥ 416
43

Thousands of
U.S.dollars$ 3,938407

Consolidated Subsidiaries and Affiliated Companies (As of April 1, 2004)

Company Name

Paid-in
CapitalEquityOwnership

Location

Main Business

SENKO TRADING Co., Ltd.

¥300 million

100.0%

Tokyo

Sales of petroleum-related products anddistribution and information processing
equipment

SENKO INFORMATION SYSTEM Co., Ltd.

¥60 million

100.0%

Osaka

Information processing

SENKO MOVING PLAZA Co., Ltd.

¥60 million

100.0%Tokyo

Trucking, in-factory work, moving services

SAPPORO SENKO TRANSPORT Co., Ltd.

¥30 million

100.0%

SapporoTrucking

TOHOKU SENKO TRANSPORT Co., Ltd.

¥30 million

100.0%

MiyagiTrucking, in-factory work

KANTO SENKO TRANSPORT Co., Ltd.

¥90 million

100.0%

SaitamaTrucking, in-factory work

CHIBA SENKO TRANSPORT Co., Ltd.

¥30 million

100.0%

Chiba

Trucking, in-factory work, vehicle maintenance

FUJI SENKO TRANSPORT Co., Ltd.

¥30 million

100.0%

Shizuoka

Trucking, in-factory work

TOKAI SENKO TRANSPORT Co., Ltd.

¥30 million

100.0%

Aichi

Trucking, in-factory work

SHIGA SENKO TRANSPORT Co., Ltd.

¥30 million

100.0%

Shiga

Trucking, in-factory work, vehicle maintenance

OSAKA SENKO TRANSPORT Co., Ltd.

¥90 million

100.0%

Osaka

Trucking, in-factory work, vehicle maintenance

CHUSHIKOKU LOGISTICS Co., Ltd.

¥80 million

100.0%OkayamaTrucking, in-factory work, warehousing

SANKYO FREIGHT Co., Ltd.

¥10 million

100.0%

Hiroshima

Trucking, in-factory work

SANYO SENKO TRANSPORT Co., Ltd.

¥20 million

100.0%

Yamaguchi

Trucking, in-factory work

SHIKOKU REEFER TRANSPORT AND
WAREHOUSING Co., Ltd.

¥50 million

100.0%

KagawaTrucking, warehousing

FUKUOKA SENKO TRANSPORT Co., Ltd.

¥50 million

100.0%

FukuokaTrucking

KUMAMOTO SENKO TRANSPORT Co., Ltd.

¥25 million

100.0%

Kumamoto

Trucking, in-factory work

MIYAZAKI SENKO TRANSPORT Co., Ltd.

¥90 million

100.0%

Miyazaki

Trucking, in-factory work, vehicle maintenance

SAITAMA SENKO APOLLO Co., Ltd.

¥50 million

100.0%

SaitamaTrucking, in-factory work, vehicle maintenance

ASICS PHYSICAL DISTRIBUTION CORPORATION¥300 million

20.0%

Hyogo

Product control, vehicle shipment agency

23

Board of Directors and Corporate Auditors, Executive Officers (As of June 29, 2004)

Chairman and Representative Director
Hiroshi Susumago

President and Representative Director
Yasuhisa Fukuda

Chairman and Representative Director
Hiroshi Susumago

Executive Vice-president and Representative Director,
Executive Officer
Akio Tanaka

Full-time Corporate Auditors
Saburo Takahashi
Kunihiro Sanada

President and Representative Director

Yutaka Kakuyama

Yasuhisa Fukuda
Corporate Auditor
Executive Vice-president and Representative Director,
Executive Officer
Akio Tanaka

Hiroshi Itawaki
Executive Officers
Toshinori Mine

Director,
Managing Executive Officer
Tadao Ito

Hisao Takahashi
Katsuhiko Miyagawa
Mitsuru Muramoto
Yasushi Morimoto

Directors,
Executive Officers
Yoshio Ikeda
Michiyoshi Tsuge
Kazuo Saga
Tetsuo Hatano
Isao Suzuki
Toshiaki Matsuyama
Takeyo Tezuka

24

Corporate Data (As of March 31, 2004)

Date of Establishment:

July 1946

Paid-in Capital:¥18,295,643,751

Authorized Shares:

294,999,000

Outstanding Shares:

111,746,167

Number of Shareholders: 7,865
Stock Listing:Tokyo Stock Exchange
Osaka Securities Exchange

Transfer Agent:

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

Network:(As of April 1, 2004)

Represents Branches
and Departments

East Japan Sales Division
Chubu Sales Department

West Japan Sales Division
Kyushu Sales Department

Branches:

No. 1 Sales Headquarters
East Japan Sales Division
China Project

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

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

Departments:

International Distribution, Marine Transport, Railway forwarding

25

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