TRANSPORTA
WAREHOUSIINTERNATIO
DISTRIBUTIOCONSULTING
TRANSPORTA
WAREHOUSIINTERNATIO
DISTRIBUTIO
Annual Report 2003

For the year ended March 31, 2003

SENKO Co., Ltd.

Logistics of the Future Logistics of the Future Logisti

Profile

Established in July 1947, Senko Co., Ltd. is one of Japan’s leading distribution
services companies. The Senko Group consists of the parent company, 29
subsidiaries, and 5 affiliated companies. Senko operates a network of more than 200
offices throughout Japan, 2,601 trucks, 6 cargo ships, and 697,706 square meters of
warehouse space.
Listed on the first sections of the Tokyo Stock Exchange and Osaka Securities
Exchange, Senko engages in wide-ranging business operations centered on trucking
and extending to warehousing, marine transport, railway forwarding, in-factory
work, and multimodal international transportation.
Senko’s forte is in supplying integrated distribution services, from distribution
consulting to system design and operation, that closely match customer needs. The
Company plans to develop as a logistics information company by integrating its
distribution network with highly advanced information technology and further
expanding services that improve efficiency at every link in the supply chain, frommaterials procurement to production and sales.

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 Consolidated Financial Statements
Consolidated Subsidiaries and Affiliated Companies
Board of Directors and Corporate Auditors
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 light of the information currently available toit, 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

2003

2002

2003

¥167,498¥173,578$1,393,494

Operating income

4,852

4,878

40,366

Net income

1,681

2,004

13,985

Total assets

127,104

132,845

1,057,438

Shareholders’ equity

41,77741,089347,563

For the year:
Operating revenues

At year end:

Per share data: (Yen and U.S. dollars)
Net income¥14.80¥17.69$0.12

Cash dividends

7.50

7.50

0.06

Diluted net income

12.92

15.35

0.11

Shareholders’ equity

375.95367.74

3.13

Note : U.S. dollar amounts are converted from yen, for convenience only, at the prevailing rate of ¥120.20 to U.S.$1 on
March 31, 2003.

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

99

00

01

02

03

-10,000

99

00

01

02

03

-100

99

00

01

02

03

1

A Message from the President
Strengthening Corporate Fundamentals by
Business Environment
In the fiscal year ended March 31, 2003, the Company posted decreases inrevenues and income: consolidated operating revenues were ¥167,498 million,
having declined 3.5% year on year, consolidated operating income edged
downward 0.5% to ¥4,852 million, and net income was 16.1% lower at ¥1,681
million.
During the fiscal year under review, although signs of a bottoming out
appeared in some sectors of the Japanese economy owing to an increase inimports at the beginning of the year, concerns about the outlook for the U.S.
economy and slumping stock prices coupled with a decline in private sector
capital investment and depressed personal consumption due to the grim
employment situation led to continuation of harsh business conditions. In thetransport and distribution industry, the adverse trading environment
continued as a decline in the volume of freight transport and a downward
price trend in the market resulted in intensification of customer demands forlower distribution costs. In these circumstances, in the second year of the threeyear business plan the Company aggressively moved forward with theprovision of efficient transportation and distribution systems by constructing
customer supply chain management systems centered on the Company’s Best
Partner System (BPS), a new logistics system that takes full advantage of
information technology. We also aggressively implemented initiatives toachieve a low-cost operating structure with the aim of boosting profits. These
initiatives included measures to improve the financial position by means ofroot-and-branch efficiency promotion, including site integration, productivity
increases, and cost cutting.
As a result of these measures, income before income taxes and minority interests increased 6.7% year on year to¥3,728 million, a clear indication that the Company’s business restructuring reforms have borne fruit.
Consolidated net income, however, fell by 16.1% owing to a reversal of deferred tax assets attendant on a change
in the tax rate due to the introduction of the pro forma standard taxation system for the corporate enterprise tax.
Progress with the Medium-term Business Plan and Future Business Development
With the current medium-term business plan, the Company aims to increase revenues by implementing supply
chain logistics centered on the Best Partner System and to boost earning power through business structurereform based on greater organizational efficiency, optimization of human resources, and the reduction ofinterest-bearing debt. During the fiscal year under review, the Company leveraged BPS to cultivate new
demand sectors. Successful initiatives included developing new business opportunities in the areas of logistics
for chain stores and other retailers and procurement logistics, entry to a new business (new value logistics)
beginning with mail order catalog delivery, and the undertaking of lubricating oil transport and distribution in
the Honshu and Shikoku regions.
The Company has successfully introduced its Best Partner System in principal transport and distribution
activities in the core housing-related products, petroleum-related products and plastics, and wholesale andretail-related products and has developed the BPS to the point where it now accounts for ¥46.6 billion or 28% of
overall operating revenues. In the coming years we plan to expand revenues from BPS to ¥100 billion or 50% of
overall operating revenues.

2Aggressively Pursuing Business Structure ReformIn the area of business structure reform, the number of employees groupwide was 6,440 as of March 31, 2003, a
reduction of 1,520 from the level at March 31, 1997. We moved forward with the integration and realignment of
low-profit warehousing bases, withdrawing from eleven warehouses with about 56,000 square meters of leased
warehouse space and consolidating and realigning three fleet yards.
In addition to these measures, aggressive moves to reduce interest-bearing debt resulted in a reduction of ¥4.8
billion or 10% year on year to ¥43.9 billion at the fiscal year-end. As a result, the ratio of interest-bearing debt tototal assets improved 2 percentage points to 35% at the end of the term. The Company plans to reduce interestbearing debt to ¥38. 4 billion at March 31, 2004, half the level at March 31, 1998.
The current medium-term business plan extends through the fiscal year ending March 31, 2004. We consider theplan a means to lay the foundation for the next step in the Company’s development and believe we haveachieved a certain amount of success from the standpoint of shoring up the Company’s defensive posture. In thenext stage of development we will build on the current plan and formulate a new three-year business plan tostart in the fiscal year ending March 2005. In the new plan we will seek to shift to an offensive management
posture, leveraging the unique logistics strategy developed to date and the improved business structure in order
to increase revenues and earnings.
Corporate Governance
The Company’s board of directors meets at least once a month. In addition to monitoring compliance withmatters stipulated in the law, the board serves as a body to decide important matters related to the managementof the Company and to monitor the execution of business.
The Company has adopted the auditor system by which four corporate auditors including two external auditors
attend meetings of the board of directors, monitor the directors’ execution of their duties, and cooperate with theinternal audit department and external audit corporation to conduct rigorous audits of the Company and its
subsidiaries.
To Our Shareholders
The Company regards distribution of profits to its 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 thebusiness structure. In the coming years we will work to improve earnings and continue to provide stabledividends to our shareholders. I request the continuing guidance and encouragement of our shareholders
regarding the Company’s endeavors.

June 2003

Hiroshi Koike
President and Representative Director

3

Review of Operations

Truck Transport

Operating revenues
120(Billions of yen)100

Share of revenues

80

60

40
51.0%

20

0

4

99

00

01

02

03

In the fiscal year ended March 31, 2003, consolidated operating revenues
from the truck transport business slipped 0.5% or ¥436 million year on
year to ¥85,382 million. This operation successfully developed theinbound freight business, notably in wholesale and retail and construction
materials sectors, such as obtaining new transport business for home
centers that utilizes existing PD centers in the Tokyo area, and developing
the construction materials and piping materials and equipment transportbusiness owing to the opening of a new distribution center in the Shiga
area. These gains were offset, however, by a reduction in factory shipment
transport volumes due to lower construction demand, notably that for
housing-related products.
The Senko Group’s truck transport operations have developed an
extensive nationwide network and provide customers with transportationand delivery services that match their products and distribution structure,including exclusive, combination, route, and joint transport services. We
transport industrial raw materials, machine products, construction
materials, housing materials, agricultural products, and consumer items
and provide moving services. In short, we handle almost any freight
related to food, shelter, and clothing. 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 trucks, and refrigerated trucks. The ability to dependablytransport goods and materials has won Senko high marks from
customers.

Warehousing

Share of revenues

In the fiscal year under review, consolidated
operating revenues from the warehousing businessfell 1.1% or ¥244 million year on year to ¥21,287
million. Although this operation aggressively
developed new business in wholesale and retailsector, integration of warehousing bases in the
restructuring of operations led to a reduction inrevenues.
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 157 facilities atmajor distribution points nationwide, providing total
storage space of nearly 700,000 square meters. To
reap maximum advantage from these warehousingbases, we use systems designed in anticipation ofdiverse customer needs to combine information
services with distribution services in order to offer afull range of logistics services that support ourcustomers’ production and sales operations.

12.7%

Operating revenues
25(Billions of yen)

20

15

10

5

0

99

00

01

02

03

5

Review of Operations

Share of revenues

In-Factory WorkIn the fiscal year ended March 2003, consolidated
operating revenues from the in-factory workbusiness edged downward 0.1% or ¥10 million year
on year to ¥14,692 million. Newly contracted work,
principally materials-related cargo, nearly
compensated for a drop-off in the volume of work in
the construction sector.
In-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.

8.8%

Operating revenues
20(Billions of yen)

15

10

5

0

6

99

00

01

02

03

Other Businesses
In the fiscal year ended under review, consolidated operating revenues fromother business fell 10.5% or ¥5,390 million year on year to ¥46,137 million.
Although various operations won new business involving the multimodal
sea and air transport of synthetic resins using special containers and achieved
an increase in the volume of marine transport by means of environmentallyfriendly modal shift proposals such as the provision of joint transportsystems, the petroleum and merchandise sales operations contracted owing
to a reduction in the number of customers as part of efforts to improve
efficiency in management of receivables.
The others business category includes railway forwarding on trunk routes,
marine transport by container ship, mixed cargo steamer and specialty ship,
the 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.

Share of revenues

Operating revenues
60(Billions of yen)

27.5%

50

40

30

20

10

0

99

00

01

02

03

7

Financial Review

Performance
Consolidated operating revenues for the fiscal year ended March 31,
2003, decreased 3.5% year on year to ¥167,498 million. The decrease
was attributable to changes in the trading environment for the entire
physical distribution industry, including a decline in the volume of
freight transport, a downward price trend, and demands from
customers for lower distribution costs as well as the contraction of
the petroleum and merchandise sales operations owing to a
reduction in the number of customers as part of efforts to improve
efficiency in management of receivables.
As for income, groupwide efforts to achieve low-cost operations in
the form of cost reductions, productivity improvements, and thepromotion of operational reform resulted in a 4.0% year on year
reduction in the cost of revenues (operating revenues decreased3.5%), and gross margin increased 4.1% to ¥12,115 million. However,selling, general, and administrative expenses increased 7.4%.
Consequently, consolidated operating income edged downward
0.5% to ¥4,852 million. The operating income ratio improved 0.1
percentage points to 2.9%. Income before income taxes and minority
interests increased 6.7% to ¥3,728 million, benefiting from lower
interest expenses attendant on the reduction in interest-bearing debt
and the elimination of loss on redemption of bonds or loss on sale ofinvestment securities. Consolidated net income after income taxes
and minority interests fell by 16.1% to ¥1,681 million. This was
attributable to a reversal of deferred tax assets in line with a change
in the tax rate caused by the introduction of the pro forma standard
taxation system for the corporate enterprise tax. As a result of thesedevelopments, the ratio of net income to operating revenues fell 0.2
percentage points to 1.0%.
Performance by Business Segment
By business segment, truck transport operating revenues for the

Operating revenues

fiscal year under review decreased ¥436 million or 0.5% year on
year to ¥85,382 million, accounting for 51.0% of total operating
revenues. Although inbound freight volumes increased, notably inwholesale and retail-related and housing-related sectors, slumping
demand brought about a reduction in transport volumes offactory shipments.
Operating revenues from the warehousing business fell 1.1% or¥244 million to ¥21,287 million. This business accounts for 12.7% of
total operating revenues. Although this operation aggressively
developed new business in wholesale and retail-related sector,
notably from home center and drugstore chains, integration of
warehousing bases in the restructuring of operations led to a
reduction in revenues.
Operating revenues from the in-factory work business werevirtually unchanged, 0.1% or ¥10 million lower at ¥14,692 million,
accounting for 8.8% of total operating revenues. This operation
was able to secure operating revenues at the same level as theprevious year by compensating for a drop-off in the volume ofwork in the housing-related by obtaining new business,principally materials-related freight.
Operating revenues from other businesses, which include railway
forwarding, marine transport, the leasing of warehouses tospecific customers and warehouse space rental, international
freight forwarding, petroleum sales, and merchandise sales, fell
10.5% or ¥5,389 million year on year to ¥46,137 million. Other
businesses account for 27.5% of overall operating revenues.
Although revenues from marine transport and international
distribution increased on account of orders for multimodal sea
and air transport using special containers and the provision of

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

99

00

01

02

03

0

3

0

1,000

99

00

01

02

03

-10,000

99

00

01

02

03

0

99

00

01

02

03

Consolidated Operating Revenues by Products Handled

joint transport systems, the contraction of the petroleum
and merchandise sales operations owing to efforts toimprove efficiency in management of receivables had asignificant adverse effect on revenues.

(Units: billions of yen, %)Performance by Principal Product Category
The Company handles three principal productcategories: housing-related; petroleum-related andplastics; and wholesale and retail-related products.
These core product categories accounted for 57.0% of
total operating revenues in the fiscal year ended March
31, 2003. Operating revenues from housing –related
products decreased ¥560 million or 1.4% year on year to¥38,520 million; these products account for 23.0% of
overall revenues. On the positive side, revenues frompetroleum-related and plastics increased ¥930 million or
2.7% year on year to ¥35,870 million, accounting for21.4% of overall revenues. Revenues from wholesale
and retail-related products rose ¥1,910 million or 10.0%
year on year to ¥21,080 million, accounting for 12.6% of
overall revenues.
In the housing-related products sector, although factory
shipments fell 3% year on year in line with a fall-off in
new housing starts, inbound shipments of factorymaterials grew 10%; consequently, the overall decline inrevenues was slight. Revenues from the petroleumrelated and plastics sector rose 3% as the Company took
on the entire physical distribution center operations of amajor chemicals manufacturer and obtained new
business including the transport of lubricating oil for a
petroleum manufacturer and the transport of plastic
film for a chemicals manufacturer. Revenues fromOperating income / net
income to operating revenues
4(%)

Net income per share

40

Operating income tooperating revenues

3

Year ended March 2002

Revenues

Composition

Revenues

Composition

Change% Change

Housing

38.5

23.0

38.6

22.3

-0.1

0.7

Petroleumrelated products,
and plastics

35.9

21.4

32.7

18.9

3.2

2.5

Wholesaleand retail

21.1

12.6

18.8

10.9

2.3

1.7

Chemicals andfertilizers

4.9

2.9

5.2

3.0

-0.3

-0.1

Foods

4.0

2.4

4.1

2.4

-0.1

0.0

Electronics
products andmachinery

3.3

2.0

2.8

1.7

0.5

0.3

Textile goods

3.5

2.1

3.0

1.8

0.5

0.3

Others

56.3

33.6

67.9

39.0

-11.6

-5.4

Total

167.5

100.0

173.5

100.0

-6.0

-3.5

Cash dividends per share

Composition of
products handled(Year ended March 2003)

(Yen)

(Yen)

30

2

Year ended March 2003

8

20

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Net income tooperating revenues
1

10

0

0

-5

99

00

01

02

03

-100

7



99

00

01

02

03

0

99

00

01

02

 

03

9

wholesale and retail-related products grew 10%, fueled by theacquisition of new customers including a general apparel
manufacturer, a pet food manufacturer, a food products trading
company, and a food products wholesaler. The company has
achieved double-digit growth in revenues from wholesale andretail-related products category for five consecutive years.
Financial Position
Total assets at March 31, 2003, were ¥127,104 million, ¥5,741
million lower than the previous term. Current assets decreased¥953 million to ¥42,705 million. The decrease was mainly
attributable to a decline in cash and cash equivalents resulting
from successful efforts to reduce interest-bearing debt and areduction in trade receivables in line with lower operating
revenues.
Total fixed assets declined ¥4,788 million year on year to ¥84,399
million.
Property and equipment declined ¥2,074 million year on year to¥67,298 million. The decrease was primarily attributable todepreciation and amortization, which increased to ¥3,150 million
as against capital outlays of ¥1,486 million. Total capital
expenditures during the period were ¥2,493 million, the chief
items being ¥230 million for the Daimon Distribution Center and¥613 million for vehicles. Investments and other assets fell ¥2,708
million to ¥16,214 million, primarily owing to a decrease indeferred tax assets.
Current liabilities increased ¥2,293 million year on year to ¥48,286
million. The reason for the decrease was the reclassification of¥13,330 million in new corporate bonds from long-term liabilities
to current liabilities, which offset reductions of ¥5,665 million in
short-term loans and ¥5,045 million in bonds due within one year.

Total assets

160

Long-term liabilities decreased ¥8,722 million to ¥37,041 million asa result of the above reclassification of bonds. Consequently,interest-bearing debt at fiscal year-end decreased ¥4,833 million to¥43,868 million. The ratio of interest-bearing debt to total assets
improved 2.2% to 34.5%.
Shareholders’ equity at fiscal year-end was ¥41,777 million, nearly
the same level as at the end of the previous term. As a result of
these developments, the equity ratio improved 2.0 points to 32.9%.
Cash FlowsNet cash provided by operating activities for the year ended
March 31, 2003, increased ¥2,576 million or 63.9% year on year to¥6,607 million. The improvement was mainly attributable to theincrease in net income before income taxes and minority interests,
a decrease in working capital and a reduction in income tax paid.
Net cash used in investing activities was ¥1,985 million. The
amount of ¥2,497 million was invested in property and equipment
to improve business competitiveness. Consequently, free cash
flow at the end of the term increased ¥1,674 million or 56.8% to¥4,622 million.
Net cash used in financing activities was ¥5,860 million. To makeeffective use of free cash flow, the Company reduced interestbearing debt as part of an initiative to improve its financial
position begun the previous term and also acquired its own
shares.
As a result of these developments, the balance of cash and cash
equivalents at the end of the fiscal year ended March 31, 2003, was¥14,026 million, a decrease of ¥1,238 million or 8.1% from theprevious term.

Total shareholders’equity / ratio(Billions of yen)

55

150

(Billions of yen)(%)

ROE / ROA

35

50

30

45

25

40

20

5

(%)

4

3
ROE
2

140
35

15

30

10

25

5

1

ROA

130

0

10

99

00

01

02

03

0

99

00

01

02

03

0

0

-15

99

00

01

02

03

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, 2003 and 2002, 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, 2003 and 2002,
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 27, 2003

11

Consolidated Balance Sheets
SENKO Co., Ltd. and Consolidated Subsidiaries
March 31, 2003 and 2002

Thousands of
U.S.dollars

Millions of yen

ASSETS

2003

2002

2003

¥ 14,026¥ 15,264$ 116,689

112

105

932

25,03524,809208,278

(62)

(180)

(515)

Inventories

620

1,018

5,158

Short-term loans to non-consolidated subsidiaries and affiliates

215

323

1,789

2,759

2,319

22,95342,70543,658355,284

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

502

441

4,176

Investment securities (Notes 3 and 7)

758

874

6,306

119,415

121,063

993,469

Less accumulated depreciation(52,117)(51,691)(433,585)

Net property and equipment

67,29869,372559,884

Deferred tax assets-non-current (Note 11)

7,548

9,615

62,795

Other assets

8,293

8,885

68,993¥ 127,104¥ 132,845$ 1,057,438

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

2003

2002

2003

¥ 10,300¥ 8,650$ 85,691

15,70914,739130,691

143

141

1,190

13,72913,027

114,218

2,333

2,422

19,409Accrued income taxes

217

837

1,805

Other current liabilities

5,855

6,177

48,71048,28645,993401,714Long-term debt, less current portion (Note 5)

17,83225,284

148,353

Accrued severance indemnities (Note 6)

16,976

17,357141,231

Other long-term liabilities

2,233

3,122

18,577

Total liabilities

85,32791,756

709,875

Issued—111,746,167 shares

18,296

18,296

152,213Additional paid-in capital

16,387

16,387

136,331

Retained earnings

7,267

6,422

60,458

(1)

(13)

(8)

(172)

(3)

(1,431)

41,77741,089347,563¥ 127,104¥ 132,845$ 1,057,438

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
Others
Accrued expenses

Total current liabilities

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

Unrealized holding loss on securities
Less treasury stock, at cost
(707,462 shares in 2003 and 10,222 shares in 2002)
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, 2003 and 2002

Thousands of
U.S.dollars

Millions of yen

2003

2002

2003

¥ 85,382¥ 85,818$ 710,333

82,116

87,760683,161

167,498

173,578

1,393,494

Truck transport

79,37080,587660,316

Others76,01381,353632,388

Selling, general and administrative expenses

7,263

6,760

60,424

Total operating costs and expenses

162,646

168,700

1,353,128

4,852

4,878

40,366

Interest and dividend income

169

182

1,406

Interest expenses

(705)

(816)

(5,865)

Others, net

(588)

(751)

(4,892)(1,124)(1,385)(9,351)

3,728

3,493

31,015Current

307

1,614

2,554

Deferred

1,740

(125)

14,476

2,047

1,489

17,030¥ 1,681¥ 2,004$ 13,985

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

Operating income
Other income (expenses):

Income before income taxes and minority interests
Income taxes (Note11):

Net income

Yen

Per share of common stock

U.S.dollars¥ 14.80¥ 17.69$ 0.12

Diluted net income

12.92

15.35

0.11

Cash dividends applicable to the year

7.50

7.50

0.06

Net income

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, 2003 and 2002
Millions of yen

Thousands
Number ofshares ofcommon stock
issuedCommon stock

Additional
paid-in capital

114,180¥ 18,296¥ 17,001

Net income——

Cash dividends—

Unrealized holding loss on securities

Unrealized
holding gain
(loss) on
securities

Treasury stock¥ 5,275

¥—

¥ (0)

—

2,004

—

—

—

—

(857)

—

—

—

—

—

—

(13)

—

Increase of treasury stock

—

—

—

—

—

(3)

Retirement treasury stock(2,434)

—

(614)

—

—

—

111,746

18,296

16,387

6,422

(13)

(3)

Net income

—

—

—

1,681

—

—

Cash dividends

—

—

—

(836)

—

—

Unrealized holding gain on securities

—

—

—

—

12

—

Increase of treasury stock

—

—

—

—

—

(169)

Balance at March 31, 2003

111,746¥ 18,296¥ 16,387¥ 7,267¥ (1)¥ (172)Thousands of U.S. dollars
Unrealized
holding gain
Additional
Retained(loss) on
paid-in capitalearnings
securities

Treasury stock

Balance at April 1, 2001

Balance at March 31, 2002

Common stock

Retainedearnings$ 152,213$ 136,331$ 53,428$ (108)$ (25)Net income——

13,985——

Cash dividends——(6,955)——

Unrealized holding gain on securities

—

—

—

100

—

Increase of treasury stock

—

—

—

—

(1,406)

Balance at March 31, 2003

$ 152,213$ 136,331$ 60,458$ (8)$ (1,431)

Balance at March 31, 2002

See the accompanying notes to the consolidated financial statements.

15

Consolidated Statements of Cash FlowsSENKO Co., Ltd. and Consolidated Subsidiaries
Year Ended March 31, 2003 and 2002

Thousands of
U.S.dollars

Millions of yen

Cash flows from operating activities:
Income before income taxes and minority interests
Adjustments for:
Depreciation and amortization
Gain on sale of affiliates
Loss on disposals of property and equipment
Loss from devaluation of investment securities
Decrease in allowance for employee retirement
Decrease in accrued bonuses to employees
Interest and dividends income
Interest expense
Decrease 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
Decrease in short-term loans, net
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
Purchases of treasury stock retired
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

2003

2002

2003

¥ 3,728¥ 3,493$ 31,015

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

3,477
(668)
212
203
—
(607)
(182)
816
828
(246)
12
(163)
7,175
195
(910)
(2,429)4,031

26,206—
2,105
624(3,161)(724)(1,406)
5,865
3,894
3,311
3,461
(3,902)
67,2881,464(6,073)(7,712)54,967(2,497)
533
(23)
115
—
100
(68)
(145)
(1,985)(2,983)
123
(190)
247
1,313
496
—
(89)
(1,083)(20,774)
4,434
(191)
957
—
832
(566)
(1,206)(16,514)

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

2,950
11,424(18,438)
(615)
(857)
(18)
(5,554)1(2,605)
17,869¥ 15,264

13,727
68,710(122,637)(1,406)(6,963)(183)(48,752)(0)(10,299)
126,988$ 116,689

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, 2003, which was ¥120.20 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 andan 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.
In addition, the Company and certain consolidated subsidiaries have a contributory funded pension plan for most employees.
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.

17

(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.
(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
Effective April 1,2002, the Company adopted a new accounting standard for earnings per share of common stock issued by the AccountingStandards Board of Japan. Under the new standards, basic net income per share is computed by dividing net income available to commonshareholders, which is more precisely computed than under previous practices, by the weighted-average number of common shares outstanding
for the period.
Diluted net income per share of common stock assumes full conversion of the outstanding convertible bonds at the begging of the year or at thedate of issuance with an applicable adjustment for related interest expense.
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 securities in current assets and investment securities at March 31,2003 and 2002, consisted of the following:—
Millions of yen
2003
2002
¥ 277
¥ 378
481
496
¥ 758
¥ 874

Marketable securities
Non-marketable equity securities

Thousands of
U.S.dollars
2003$ 2,304
4,002$ 6,306

The following is a summary of marketable securities included in investment securities, at March 31, 2003 and 2002.
Millions of yen
Gross
Gross
Acquisition
unrealized
unrealized
2003
cost
gains
losses¥ 267¥ 16¥ (17)
Equity security
Bonds and Others
10
1
—
¥ 277
¥ 17
¥ (17)

Book
value(Market value)
¥ 266
11
¥ 277

Acquisition
cost
¥ 390
11
¥ 401

Millions of yen
Gross
Gross
unrealized
unrealized
gains
losses¥ 11¥ (34)0(0)¥ 11¥ (34)

Book
value(Market value)
¥ 367
11
¥ 378

Acquisitioncost$ 2,22183$ 2,304

Thousands of U.S.dollars
Gross
Gross
unrealized
unrealized
gains
losses$ 133$ (141)8—$ 141$ (141)Book
value(Market value)$ 2,21391$ 2,304

2002
Equity security
Bonds and Others

2003
Equity security
Bonds and Others

Proceeds from sales of other securities were ¥115 million (US $ 957 thousand) and ¥248 million for the years ended March 31, 2003 and 2002,
respectively. The gross realized gains on those sales were ¥24 million (US $ 200 thousand) for the year ended March 31,2003. The gross realized
gains and losses on those sales were ¥91 million and ¥100 million, respectively, for the ended March 31,2002.

18

4. Property and Equipment:
At March31,2003 and 2002,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 ProgressMillions of yen
2003
2002
¥ 34,419¥ 34,529
64,70364,78917,07818,418
3,188
3,191
27
136
¥ 119,415¥ 121,063

Thousands of
U.S.dollars
2003$ 286,348
538,294
142,080
26,522225$ 993,469

Millions of yen
2003
2002
¥ 10,300¥ 8,650

Thousands of
U.S.dollars
2003$ 85,691

5. Short-term Loans and Long-term Debt:
At March31, 2003 and 2002, short-term loans consisted of the following:—

0.7391% to 1.375% unsecured loans from banks
At March 31, 2003 and 2002, long-term debt consisted of the following:—

Millions of yen
2003
2002
¥—
¥ 45
13,33013,330
5,000
5,000
—
5,000

2.30% mortgage convertible bonds due 2002
0.45% convertible bonds due 2003 (Note 1)
3.25% bonds due 2004 (Note 2)
2.025% bonds due 2002
0.60% to 4.90% loans from banks and insurance companies:
SecuredUnsecuredLess current portion

Thousands of
U.S.dollars
2003$ —110,899
41,597————

15,21133,541(15,709)¥ 17,832

16,64840,023(14,739)¥ 25,284

126,548
279,044(130,691)$ 148,353

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 debt assumption contract. The debt assumption contract requires a counterparty toassume 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, 2003 for the next five years are as follows:—
Year ending
March 31
2004
2005
2006
2007
2008

Millions of yen¥ 15,709
6,713
5,787
4,572
760

Thousands of
U.S.dollars$ 130,691
55,84848,14538,037
6,323

6. Accrued Severance indemnities:
The following tables sets forth the changes in benefit obligation, plan assets and funded status of the Company and its subsidiaries at March 31,
2003 and 2002.
Thousands ofMillions of yen
U.S.dollars
2003
2002
2003
Benefit obligation at the end of year
¥ (69,534)¥ (58,758)$ (578,486)
Fair value of plan assets at the end of the year
27,57929,809229,443
Funded status:
Benefit obligation in excess of plan assets(41,955)(28,949)(349,043)
Unrecognized actuarial loss
24,97911,592
207,812
Accrued severance indemnities recognized in the consolidation balance sheets¥ (16,976)¥ (17,357)$ (141,231)

19

Severance and pension costs of the Company and its subsidiaries included the following components for the year ended March 31, 2003 and2002.
Thousands ofMillions of yen
U.S.dollars
2003
2002
2003
Service cost
¥ 1,855¥ 1,808$ 15,433
Interest cost
2,041
1,936
16,980
Expected return on plan assets(1,275)(1,336)(10,607)
Amortization:
Recognized actuarial loss
857
406
7,130
Net periodic benefit cost
¥ 3,478¥ 2,814$ 28,936
Assumption used in the accounting for the defined benefit plans for the year ended March 31, 2003 and 2002 is as follows:
2003
straight-line basis
2.5%
Primarily4.8%
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

2002
straight-line basis
3.5%
Primarily4.8%
1 year14 years

7. Pledged Assets:
The following assets were pledged as collateral as at March 31, 2003 and 2002:—

Land
Buildings
VehiclesInvestment securities

Millions of yen
2003
2002
¥ 2,548¥ 5,483
1,236
2,902
1
2
10
10
¥ 3,795¥ 8,397

Thousands of
U.S.dollars
2003$ 21,198
10,2838
83$ 31,572

Millions of yen
2003
2002
¥ 100
¥ 45

Thousands of
U.S.dollars
2003
$ 832

Millions of yen
2003
2002
¥ 94
¥ 113
2,148
2,722
27
29
312
209
¥ 2,581¥ 3,073

Thousands of
U.S.dollars
2003
$ 782
17,870225
2,596$ 21,473

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

Long-term debt, including current portion

8. Contingent Liabilities:
At March 31, 2003 and 2002, 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, 2003, 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$ 41,597
Jul. 24, 2001

9. Lease:
At March 31, 2003 and 2002, financing lease transactions whose ownership are not to be transferred were as follows:

Machinery and equipment
Tools, furniture and fixtures

20

Purchasecost¥ 9,135
11,797¥ 20,932

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

Thousands of
U.S.dollars
2003
Book value¥ 4,5386,386¥ 10,924

Book value$ 37,754
53,128$ 90,882

Machinery and equipment
Tools, furniture and fixtures

Purchase
Cost¥ 9,265
11,025¥ 20,290

Millions of yen
2002
Accumulated
amortization¥ 4,699
4,750¥ 9,449

Book value¥ 4,566
6,275¥ 10,841

At March 31, 2003 and 2002, lease obligations were as follows:

Due within one year
Due after one year

Millions of yen
2003
2002
¥ 3,726¥ 3,577
7,737
7,868¥ 11,463¥ 11,445

Thousands of
U.S.dollars
2003$ 30,998
64,368$ 95,366

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, 2003, included the Company’s legal reserveof ¥1,506 million ($12,529 thousand).

11. Income Taxes:
The Company and its domestic subsidiaries are subject to several taxes based on income, which in the aggregate resulted in statutory tax rates
of approximately 42.0% for the years ended March 31, 2003 and 2002.
Due to a change in enterprise tax rate in Japan, effective for years beginning April 1, 2004, the normal effective statutory tax rate is scheduled to
be changed. The effect of the change in the tax rate on the balance of deferred tax assets and liabilities reduced the net deferred assets byapproximately ¥243 million (US $2,022 thousand) as of March 31,2003, increased unrealized holding loss on securities by approximately ¥0 million(US $0 thousand) and increased income tax expenses by approximately ¥243 million (US $2,022 thousand) for the year ended March 31,2003.
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets at March 31, 2003 and 2002 are presented
below:

Millions of yen
2003
2002
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
Retirement benefit trust loss
Accrued enterprise tax
Other
Total gross deferred tax assets
Less valuation allowance
Net deferred tax assets
Deferred tax liabilities:
Property and equipment
Other
Total gross deferred tax liabilities
Net deferred tax assets

Thousands of
U.S.dollars
2003¥ 7,606
789
367
346
144
140
110
—
—
252
9,754
(—)
9,754

¥ 9,239
574
81
358
140
—
200
580
69
285
11,526(36)
11,490$ 63,278
6,564
3,053
2,879
1,198
1,165
915
—
—
2,097
81,149(—)
81,149(996)(270)(1,266)¥ 8,488(1,031)(222)(1,253)¥ 10,237(8,286)(2,246)(10,532)$ 70,61721

12. Segment information:
Business segment information of the Company and its consolidated subsidiaries for the years ended March 31, 2003 and 2002 issummarized as follows:
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¥ 8,604
132
66¥ 34,052
919
559¥ 113,710
3,083
1,469

¥ 13,394
67
17¥ 127,104
3,150
1,486

Millions of yen

2002
Truck
Transport

Warehousing

In-factory
works

Other

Total

Elimination or
Corporate Consolidated

a. Operating revenues and operating income:Customers¥ 85,818Intersegment
2,542
Total operating revenues
88,360Operating costs and expenses
86,024
Operating income¥ 2,336¥ 21,531
114
21,645
20,527¥ 1,118¥ 14,703
4,287
18,99017,913¥ 1,077¥ 51,526
5,305
56,831
56,493¥ 338¥ 173,578
12,248
185,826
180,957¥ 4,869¥—(12,248)(12,248)(12,257)¥ (-9)¥ 173,578—
173,578
168,700¥ 4,878b. Assets, depreciation and capital expenditures;
Assets¥ 32,010
Depreciation
974
Capital expenditures
610¥ 44,242
1,261
1,443

¥ 8,634
140
135¥ 34,424
1,045
755¥ 119,310
3,420
2,943

¥ 13,53557
15¥ 132,845
3,477
2,958

Thousands of U.S. dollars

2003
Truck
Transport

Warehousing

In-factory
works

Other

Total

Elimination or
Corporate Consolidated

a. Operating revenues and operating income:$ 710,333
Customers
Intersegment
21,032
Total operating revenues
731,365
Operating costs and expenses
709,259
Operating income$ 22,106$ 177,096
1,156
178,252
169,917$ 8,335$ 122,230
36,672
158,902
151,589$ 7,313$ 383,835
40,757424,592
422,097$ 2,495$ 1,393,494
99,617
1,493,111
1,452,862$ 40,249$—(99,617)(99,617)(99,734)$(-117)$ 1,393,494—
1,393,494
1,353,128$ 40,366b. Assets, depreciation and capital expenditures;$ 242,837$ 348,295
AssetsDepreciation
6,547
10,358
Capital expenditures
4,376
2,646

$ 71,581
1,098
549$ 283,294
7,646
4,651

$ 946,007
25,64912,222$ 111,431
557
141$ 1,057,438
26,206
12,363

13. Subsequent Event:(1)On April 15, 2003, the Minister of Health, Labor and Welfare gave the contributory employees’ pension plan of the Company and certain
domestic consolidated subsidiaries an approval of exemption from the obligation for benefits related to future employee service under thesubstitutional portion of the pension plan.
The Company and certain consolidated subsidiaries recognized ¥284 million ($2,363 thousand) of gain from the reversal of the liabilities onthat approval date.
(2)Shareholders approved the following appropriation of retained earning at the annual meeting held on June 27, 2003

Cash dividends
Bonuses to directors and statutory auditors

22

Millions of yen
¥ 416
32

Thousands of
U.S.dollars$ 3,461266

Consolidated Subsidiaries and Affiliated Companies (As of April 1, 2003)

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%

Aich

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 (As of June 27, 2003)

Chairman and Representative Director
Hiroshi Susumago

President and Representative Director
Hiroshi Koike

Chairman and Representative Director
Hiroshi Susumago

Executive Vice-president and Representative Director
Akio Tanaka

Directors
Yoshio Ikeda
Michiyoshi Tsuge

President and Representative Director
Hiroshi Koike

Kazuo Saga
Tetsuo Hatano
Isao Suzuki
Toshiaki Matsuyama

Executive Vice-president and Representative Director

Takeyo Tezuka

Akio Tanaka
Full-time Corporate Auditors
Executive Vice-president

Saburo Takahashi

Yasuhisa Fukuda

Kunihiro Sanada
Yutaka Kakuyama

Senior Managing Director
Isao Kagi
Managing Director
Tadao Ito

24

Corporate Auditor
Hiroshi Itawaki

Corporate Data (As of March 31, 2003)

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: 8,627
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, 2003)

Represents Branches
and Departments

No. 1 Sales Headquarters
Logistics Sales Headquarters
Kanto Logistics Sales Division

Chubu Logistics Sales Division

Kyushu Logistics Sales Division

Branches:

Head Office
No. 2 Sales Headquarters
Kansai Logistics Sales Division

Sapporo, Sendai, Ibaraki, Kita Kanto, Saitama, Kashiwa, Tokyo, Kanagawa, Chiba, Shizuoka East,
Shizuoka West, Nagoya, Mie, Hokuriku, Keiji, Keiji South, Osaka, Hanshin, Okayama, Kurashiki,
Yamaguchi, Fukuoka, 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