Summary of Financial Statements for the Fiscal Year ended March 31, 2012 [Japan GAAP]

April 26, 2012 Stock listed on: the First Section of the Tokyo Stock Exchange and Osaka Securities Exchange URL http://www.senko.co.jp Name: Yasuhisa Fukuda Name: Noburoh Sasaki Tel. (06) 6440-5155 Scheduled Date of Dividend Paid: June 29, 2012 Title: President Representative: Title: Executive Officer, Public Relations Inquiries: Scheduled Date of Annual Shareholders Meeting: June 28, 2012 June 28, 2012 Scheduled Date of Issue of Financial Report: Supplemental Information Materials: Yes Scheduled Date of Information Meeting: Yes (for institutional investors) 1. Consolidated Operating Results for the Fiscal Year Ended March 2012 (From April 1, 2011 to March 31, 2012) Fiscal year ended March 2012 3,897million yen (87.1%) Fiscal year ended March 2011 2,082 million yen (−24.7%) Fiscal year ended March 31, 2012    61,424 million yen Fiscal year ended March 31, 2011    59,024 million yen 3. Forecast of Consolidated Operating Results for the Year Ending March 2013(From April 1, 2012 to March 31, 2013) 1 4. Others (1) Changes in significant subsidiaries during the fiscal year (Changes in specified subsidiaries associated with change in scope of consolidation): None (2) Changes in accounting principles and estimates, and retrospective restatement a. Changes due to revision of accounting standards: None b. Changes other than in (a): None c. Changes in accounting estimates: None d. Retrospective restatement: None
(3) Shares outstanding (Common shares)
a. Shares outstanding at fiscal year end (including treasury stocks) 128,989,476 shares Fiscal year ended March 31, 2012 b. Treasury stocks at fiscal year end Fiscal year ended March 31, 2012 c. Average number of shares Fiscal year ended March 31, 2012

[Reference] Overview of Non-Consolidated Operating Results

1. Non-Consolidated Operating Results for the Fiscal Year Ended March 2012 (From April 1, 2011 to March 31, 2012)
Fiscal year ended March 31, 2012    56,351 million yen Fiscal year ended March 31, 2011    55,439 million yen (Status of implementation of auditing procedure) The auditing procedure for the consolidated financial statements that is prescribed by the Financial Instruments and Exchange Act had not been completed when this financial report was released. (Cautionary statement regarding forecasts of operating results and special notes) Forward-looking statements in these materials are based on information available to management at the time, this report was prepared and assumptions that management believes are reasonable. Actual results may differ significantly from these statements for a number of reasons. Please refer to 2) Outlook for fiscal year ending March 2012 on page 3 for information concerning for forecasts.
1.
Results of Operations
(1) Analysis of the results 1) Fiscal year performance In the immediate aftermath of the Great East Japan earthquake exports and production plummeted, but on restoration of damaged facilities and supply chain recovery the Japanese economy staged a steady comeback. Nevertheless, uncertainties about the future persisted, fueled by slowing growth in overseas economies, a stronger yen that impacted export industries, soaring crude oil prices and electric power shortages. In the logistics industry as well, cargo volume declined substantially due to an earthquake-driven production falloff, but supply chain restoration caused a sharp comeback. Yet the strong yen and floods in Thailand that impacted exports and production caused weak trends in subsequent volume . In this environment, the Senko Group positioned as its top management priority support for customers' earthquake restoration and recovery. And from April 2010 it inaugurated "Moving Global" as the corporate slogan. In this, the second year of the three-year intermediate term management plan, aggressive management was pursued under that rubric both domestically and overseas. In Japan's Chiba Prefecture, the Company opened its largest distribution bases "Noda No. 1 PD Center" and "Noda No. 2 PD Center," thereby strengthening its distribution operations for major superstores and its services in the Kanto region. Further, with a view to concentrating warehouse bases in northern Miyagi Prefecture and expanding storage floor space, the "Hyuga PD Center" was opened in Hyuga City, while in Hokkaido's Hiroshima City the "Kita Hiroshima PD Center" was opened to fill out distribution services to all of Hokkaido. The chemical tanker Senouu Maru was chartered in order to provide for stable transport and business growth in chemical products. Overseas, the "Kentucky Distribution Center" in the U.S. was established, and inaugurated distribution operations to serve U.S. and Japanese corporations. As part of trade segment reinforcement, the general trading firm Smile Corp., engaged in packaging materials, foods, alcoholic beverages and daily living miscellaneous merchandise, was added to the Group as a subsidiary, as was Chugoku Piano Transport Co., engaged in transport of musical instruments, precision instruments, heavy weight goods and medical equipment. The intent in both cases was to seek business deployment into new distribution service fields. Led by earthquake restoration demand, the period under review saw increases in disaster related products, electric power conservation related products and other existing volume, as well as September's addition of "Smile" to the Group and aggressive cultivation of new customers, resulting in a 12.2% year-on-year increase in consolidated operating revenues, to ¥270,361 million. While rising fuel expenses were a negative factor, the effects of higher sales and cost improvements boosted consolidated operating income by 35.6% to ¥8,274 million, and consolidated income profit by 30.7% to ¥8,333 million. Net income rose by 53.8% to ¥3,478 million. Business results by segment
Distribution
The housing distribution business saw increases in existing volume due to provisional housing and other earthquake recovery demand, as well as housing products, electric power conservation products and lightweight products restoration of the distribution logistics business, and aggressive cultivation of new customers. Segment income rose by 5.2% year-on-year to ¥222,494 million.
Commerce and trade
Segment income rose by 67.9% year-on-year to ¥44,811 million, driven by the addition of Smile Corp. to the Group, higher Marufuji Co. sales, trade expansion and growth in sales of the petroleum marketing business.
Others
Higher data processing sales sent segment income up by 7.2% year-on-year to ¥3,055 million.
2)
Outlook
Going forward, the Japanese economy is seen recovering gradually, due to higher overseas economic growth rates driven by the newly developing countries and resources countries, and gradual emergence of earthquake recovery demand. But the situation does not admit of optimism, given European debt problems and other overseas deceleration factors, uncertainties about the scale and timing of full earthquake recovery demand, electric power supply-demand problems, the yen's uptrend and other negatives. In this environment, and based on its intermediate term management vision, the Senko Group seeks to coexist with society, raise employee growth consciousness, and set an overall Group target as a "logistics and information organization" providing high quality and high cost-performance services on a global basis. In aggressively pursuing such corporate activity, the Group's consolidated forecasts for the next fiscal year are for operating revenues of ¥300.0 billion, operating income of ¥10.2 billion, ordinary income of ¥10.0 billion and net income of ¥5.0 billion.
(2) Analysis of Financial Condition
1)
Assets, liabilities and net assets
Total assets
Total assets at the end of the year under review stood at ¥202,847 million, up by ¥25,562 million over those of a year earlier. The gain derived from increases of ¥9,540 million in notes and accounts receivable, ¥3,414 million in inventory assets, ¥9,435 million in tangible fixed assets and ¥2,848 million in intangible fixed assets.
Liabilities
Outstanding liabilities at the end of the fiscal year rose by ¥22,893 million year-on-year to ¥139,573 million. The gain derived from increases of ¥9,693 million in notes and operating accounts payable, ¥5,000 million in corporate bonds and ¥8,091 million in long term borrowings.
Net assets
Net assets at the end of the fiscal year were up by ¥2,669 million year-on-year to ¥63,274 million. The gain derived from increases of ¥2,094 million in retained earnings and others. The equity ratio declined by 3.0 percentage points to 30.3%.
2)
Cash flows
Cash and equivalents at the end of the term declined by ¥1,040 million year-on-year to ¥13,354 million.
Operating cash flow was a positive ¥9,341 million (income). Pretax net profit was ¥7,783 million, depreciation was ¥6,159 million and stocking-in debt rose by ¥3,968 million, while sales loans/accounts receivable rose by ¥4,483 million, interest payments were ¥1,186 million and corporate and other taxes were ¥2,368 million. Investing cash flow was ¥16,466 million in outgoings. This derived from expenditures of ¥11,949 million for tangible fixed asset acquisition and from expenditures of ¥4,599 million for acquisition of subsidiaries' stock in conjunction with changes in the scope of consolidation. Financial cash flow was a positive ¥6,094 million (income). Income from long term borrowings was ¥12,650 million and from corporate bond issuance was ¥5,000 million, while outgoings were ¥8,202 million for repayment of long term borrowings, ¥1,911 million for repayment of finance lease debt and ¥1,383 million for dividend payments.
3)

Equity ratio: Shareholders' equity/Total assets Market capitalization equity ratio: Market capitalization/Total assets Interest-bearing debt to cash flow ratio: Interest-bearing debt/Operating cash flows Interest coverage ratio: Operating cash flows/Interest expenses *All figures are based on the consolidated financial statements. *Market capitalization is calculated by multiplying the fiscal year-end stock price and the number of shares issued at the end of the fiscal year (after deducting treasury stock). *Operating cash flows are the figure shown in the consolidated statement of cash flows. Interest-bearing debt is the sum of all liabilities on the consolidated balance sheet on which interest is paid. Interest expenses are the figure shown in the consolidated statement of cash flows. (3) Fundamental policy for distribution of earnings and dividend for previous and next fiscal year While securing internal reserves necessary for future business development and management structure reinforcement, the basic policy is to return profits to shareholders by implementing stable dividends and dividends that are linked to business results. Dividends for the fiscal year ended March 31, 2012 are to be ¥6 per share, as expected, with ¥5 as the regular dividend and ¥1 to commemorate the Company's 65th anniversary. Together with the interim dividend of ¥6, same breakdown, the total annual dividend is expected at ¥12. For the next fiscal year's annual dividend, the same amount of ¥12 per share is expected. (4) Business risk No discussion of business and other risks is presented here because there have been no significant changes involving these risks since the most recent Securities Report (dated June 29, 2011), which includes a section about business and other risks.
2. Corporate Group
The Senko Group includes Senko, 68 subsidiaries and three affiliated companies. To meet the increasingly diverse and exacting needs of customers, Group companies conduct a full line of logistics operations extending from the development of strategic logistics systems to the operation of these systems. There are three business segments: Distribution, which includes cargo transport by truck, cargo transport by rail, warehouse operations, the operation of distribution centers, and other activities; Trading and Commerce, which includes sales of petroleum products, trading sales and international trade; and Others, which includes outsourced data processing services, motor vehicle maintenance, insurance agency services and other activities. A diagram of these business operations is presented below.
Distribution

Subsidiaries
○ Logi Solution Co., Ltd. ○ Senko Moving Plaza Co., Ltd. ○ Senko A Line Amano Co., Ltd. ○ Tokyo Nohin Daiko Co., Ltd. ○ Inui Transport Co., Ltd. ○ Chugoku Piano transport Co., Ltd. ○ Sapporo Senko Transport Co., Ltd. ○ Tohoku Senko Transport Co., Ltd. ○ Kanto Senko Transport Co., Ltd. ○ Saitama Senko Transport Co., Ltd. Noda Senko Logi Service Co., Ltd. ○ Senko Housing Logistics Co., Ltd. ○ Chiba Senko Transport Co., Ltd. ○ Senko Fashion Logistics Co., Ltd. ○ Kashiwa Senko Transport Co., Ltd. ○ Kanagawa Senko Transport Co., Ltd. ○ Hokuriku Senko Transport Co., Ltd. ○ Fuji Senko Transport Co., Ltd. ○ Daito Senko Apollo Co., Ltd. ○ Tokai Senko Transport Co., Ltd. ○ Toyohashi Senko Transport Co., Ltd. ○ Mie Senko Logistics Co., Ltd. ○ Shiga Senko Transport Co., Ltd. ○ Osaka Senko Transport Co., Ltd. ○ Tokyo Nohin Daiko West Japan Co., Ltd. ○ Minami Osaka Senko Transport Co., Ltd. ○ Hanshin Senko Transport Co., Ltd. ○ Esaka Logistics Service Co., Ltd. ○ Hanshin Transport Co., Ltd. ○ Nara Senko Logistics Co., Ltd. ○ Okayama Senko Transport Co., Ltd. ○ Sankyo Freight Co., Ltd. ○ Sanyo Senko Transport Co., Ltd.
○ Chushikoku Logistics Co., Ltd. ○ Fukuoka Senko Transport Co., Ltd. ○ Minami Kyushu Senko Co., Ltd. ○ Miyazaki Senko Transport Co., Ltd. ○ Miyazaki Senko Apollo Co., Ltd. Senko Medical Logistics Co., Ltd. Senko (U.S.A.) Inc. ○ Dalian Tri-Enterprise Logistics Co., Ltd. Senko Logistics (Shanghai) Co., Ltd. Shanghai Senko International Freight Co., Ltd. ○ Guangzhou Senko Logistics Co., Ltd. Senko International Logistics (Hong Kong) Ltd. Qingdao Xuexing International Logistics Co., Ltd. Senko (Thailand) Co., Ltd. ○ Senko International Logistics Pte. Ltd. Senko Logistics Australia Pty Ltd. Senko-Lancaster Silkroad Logistics LLP
Subsidiaries ○ Senko Insurance Services Co., Ltd. ○ Senko Information System Co., Ltd. ○ Logi Solution Co., Ltd. ○ Saitama Senko Transport Co., Ltd. ○ Chiba Senko Transport Co., Ltd. ○ Fuji Senko Transport Co., Ltd. ○ Shiga Senko Transport Co., Ltd. ○ Minami Osaka Senko Transport Co., Ltd. ○ Shikoku Reefer Transport and Warehousing Co., Ltd. ○ Miyazaki Senko Transport Co., Ltd. ○ Senko Foods Co., Ltd. Crefeel Koto Co., Ltd. ○ S-TAFF Co., Ltd. Senko Business Support Co., Ltd. Logi Factoring Co., Ltd. Senko School Farm Tottori Co., Ltd. Senko Logistics (U.S.A.) Inc. ○: Consolidated subsidiaries △: Affiliates accounted for by equity method
(1) Fundamental management policy
The Senko Group is dedicated to becoming a company that earn the trust of shareholders, customers, employees and society and provide benefits to these stakeholders by using highly advanced logistics and information technologies to create and provide services of the highest quality. To accomplish this goal, group companies seek to maximize corporate value by supplying customers with high-quality, low-cost value-added logistics services. From the standpoint of coexisting with society, the Senko Group also places priority on safety and environmental protection along with helping maintain social order. The aim is to create an energetic organization that is dedicated to growth and trust and able to fulfill its obligations as a leading member of the logistics industry.
(2) Targeted performance indicators
The new three-year medium-term business plan, which began in the fiscal year ending in March 2011, includes the following goals. Operating revenues: ¥300.0 billion Operating income: ¥9.0 billion Operating margin: 3% Debt/equity ratio: Under one.
(Reference)
The intermediate term management plan formulated at the beginning of Fiscal Year 2011 has the aforementioned targets, but as noted on Page 3, "1. Operating Results, ((2)) Outlook", the forecasts for the following fiscal year are for operating revenues of ¥300.0 billion and operating income of ¥10.2 billion (margin of 3.4%).
(3)   Medium and long-term strategies
The following is a summary of the three-year medium-term business plan that covers the three-year period ending with the fiscal year that ends in March 2013. Summary of the Senko Group Medium-term Business Plan (April 2010 to March 2013) Corporate slogan: “Moving Global” The Senko Group’s medium-term vision 1. The Senko Group aims to become a logistics and information organization that provides high-quality services with low costs in relation to benefits on a global scale. This goal includes measures to coexist with society and increase the commitment of group employees to achieve growth. The Senko Group’s medium-term objectives 2. (1) Create new markets by meeting the needs of customers in Japan and other countries. (2)  Improve efficiency across the entire Senko Group in order to supply high-quality services with low costs in relation to benefits. (3)  Upgrade CSR activities by placing priority on three themes: compliance, environmental protection and safety. (4)   Continue establishing systems and the workplace environment needed to increase enhance the motivation, skills and well-being of group employees. (5) Implement financial policies that place emphasis on maintaining financial soundness. 3. Plan