BUSINESS REPORT2008

BUSINESS REPORT2008

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Based on the philosophy of “something new every day” from which the name “Nissin” derives, Nissin Group is committed to a process of constant renewal. Our aim is to contribute to the creation of an affluent society through the global development of travel, logistics and related services that are essential for economic and social development.

Our basic business policy is to meet the expectations of shareholders and other stakeholders by continually enhancing the corporate value. This involves building trust with customers by providing safe, fast, high-quality travel- and logistics-related services at a competitive cost, while also fulfilling our corporate social responsibility in terms of compliance with business ethics, laws and regulations and involvement in activities to protect the global environment.

Basic business policy

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We wish to sincerely thank all our shareholders for their continuing support and encouragement as we report on the performance of Nissin Corporation for the fiscal year ended March 31, 2008.

On June 26, 2008, President Hiroshi Tsutsui became the Chairman of the Board and Chief Executive Officer, and Executive Vice President Masahiro Tsutsui was appointed President. We are resolved to vigorously develop our business under this new leadership structure.

An overseas network and international logistics expertise are two of the main strengths of Nissin Group. Leveraging these advantages, we aim to generate sustained future growth by continuing to develop new business models that make full use of the Group’s resources.

We ask your continuing support and encouragement.

Company Information:

Name: Nissin CorporationHead Office: 6-84 Onoe-cho, Naka-ku, Yokohama, JapanTokyo General Office: No.5, Sanban-cho, Chiyoda-ku, Tokyo, JapanEstablishment: December 14, 1938Capital: 6,097,263,500 yen (as of March 31, 2008)Business Term: Commencing April 1 and closing March 31

of the following yearRegular General Meetingof Shareholders: To be held in June

Web site: http://www.nissin-tw.co.jp/

To Our Shareholders

Hiroshi Tsutsui, Chairman of the Board

and Chief Executive Officer

Masahiro Tsutsui, President and Chief Operative Officer

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4

Business Activities and Results

Global economic conditions were mixed in the fiscal year under review. The U.S. economy slowed amid a

contraction in housing construction and capital investment caused by the subprime loan crisis. In Asia, high

capital investment and brisk exports supported rapid growth in China, but the pace of economic expansion in

Southeast Asia was more modest. Demand in European economies sustained a modest recovery. In Japan, the

economy entered a downturn amid slightly weaker corporate earnings and sluggish consumer spending.

In the Japanese logistics industry, growth in international freight volumes tapered off for both imports and

exports. Market conditions in domestic freight transport remained challenging. Business in the travel industry

trended downward slightly in overall terms, although demand for travel to destinations in China and Southeast

Asia remained firm.

In the final year of the second mid-term business plan (covering the period from fiscal 2005 to fiscal 2007),

Nissin Group focused on trying to boost earning power and reinforce the fundamentals of the business by

concentrating consolidated resources on business sectors and geographic regions where the Group can best

utilize its strengths. Major business development initiatives for the year are listed below.

Overseas operations

(1) Integrated warehouse management systems became fully operational at six of the Group’s logistics facilities

in North America.

(2) Nissin-Sinotrans International Logistics Co., Ltd., the Group’s joint venture in China, successfully acquired

a Class I air freight forwarding license.

(3) In Malaysia, Nissin Group established the Malacca Logistics Center.

(4) Several Group initiatives targeted business growth from emerging regions: establishment of a local

subsidiary in Poland; expansion into the rail freight sector in Vietnam; increased business capacity in the

Mumbai area of India; and development of warehouse operations in Mexico based on the vendor-managed

inventory (VMI) service model.

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Domestic operations

(1) Nissin opened new sales offices in Hiroshima, Fukui and Toyama to cater to international freight demand

within the Sanyo and Hokuriku regions.

(2) A transfer crane and automatic gate systems were installed at facilities in the Yokohama area to facilitate

state-of-the-art container loading terminal operations.

Consolidated net sales for the year under review rose 3.4% from the previous year to ¥227,749 million.

Consolidated operating income fell 13.6% to ¥5,244 million, while consolidated ordinary income declined 18.9%

to ¥5,376 million. Consolidated net income of ¥2,256 million was 42.7% lower than in the previous year.

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6

In the International Freight Business Unit, by strengthening linkage throughout our global network, we strove to

provide services of exceptional quality as a partner precisely responding to the logistics needs of our customers as they

develop their business overseas. We enhanced international multimodal transport services by strengthening handling of

mixed air and marine cargo.

As a result, regarding marine freight, handling of exports of transport equipment and electrical and electronic

equipment for China, Southeast Asia, and North America was buoyant. Handling of imports also grew robustly across

most sectors, led by food products, raw materials and apparel from China and Southeast Asia. Negative media coverage

of the safety performance of goods manufactured in China resulted in a dip in volumes handled for some imported

Chinese manufactures.

In the air freight segment, handling of exports of electrical equipment, IC-related equipment and automobile parts for

North America, China, Southeast Asia and Taiwan was firm, while handling of imports of fresh foods and machine

parts was virtually unchanged from the previous year.

At overseas subsidiaries, handling of exports and imports of transport equipment and electronic components

increased in North America. We sought to expand handling of U.S.-China transport, a highly growing category, and at

the same time, U.S.-Mexico trans-border transport performed strongly. Profits dipped at our operations in Europe and

Southeast Asia owing to the cost of up front investments in facilities, equipment and systems, along with losses related

to bad debts.

In China, we strengthened domestic logistics services, including imports of parts and vendor managed inventory

(VMI) warehouse service for manufacturers. Growth in cargo volumes handled was sluggish.

Consolidated sales from the International Freight Business Unit increased 5.0% year on year to ¥136,731 million.

In the Domestic Freight Business Unit, we worked to strengthen our response to customer needs by improving

logistics quality and achieving low-cost operations through IT-based enhancement of our distribution system. We

Segmental Overview

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Business UnitFiscal 2006 Fiscal 2007 Fiscal 2008

Millions of yen % of total Millions of yen % of total Millions of yen % of total

International Freight Business Unit 123,112 58.0 130,184 59.1 136,731 60.0

Domestic Freight Business Unit 38,209 18.0 38,235 17.4 38,176 16.8Travel Services and Other

Businesses 51,006 24.0 51,750 23.5 52,841 23.2

Total 212,328 100.0 220,170 100.0 227,749 100.0

sought to provide logistics services tailored to the precise needs of customers, in some cases playing an active role in

promoting in-house distribution reforms. For example, Nissin secured an order from a major homebuilding firm to

transport goods between the Kinki region and the island of Kyushu by car ferry. This contract also included the

handling of some on-site operations.

In the automotive transport operations, freight volumes handled by our truck transport in the Tokyo region and

transport of hazardous items. However, business conditions remained difficult owing to high and rising fuel costs.

Consolidated sales from this segment declined 0.2% year on year to ¥38,176 million.

Travel Services and Other Businesses are operated by the Company’s subsidiaries. The mainstay business travel

operations remained firm in terms of volumes handled amid generally tough business conditions. We upgraded systems

to promote online purchases of travel services.

We established a new real estate business in the year under review with the aim of making more effective use of land

holdings. Some land in the Yokohama area was leased to a supermarket operator. We have traditionally leased real

estate on sites adjacent to logistics facilities employed in domestic operations. From the year under review, all real

estate-related transactions were consolidated into this segment.

Consolidated sales from this segment increased 2.1% year on year to ¥52,841 million.

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8

“Nissin Express Service” launched for express air cargo to Shanghai

We began operating the “Nissin Express Service” in October 2007 as a new air cargo service connecting the Tokyo region with Shanghai. This service puts any freight received in the Tokyo region onto a direct morning flight the next day to Shanghai’s Pudong Airport and then delivers the goods the same day within the city of Shanghai. The door-to-door service reduces the overall transit time by around 24 hours compared with conventional services. A single weight-based fee is charged covering everything from collection and loading to local delivery in Shanghai. This makes the service suitable for anything from urgent samples or small goods to general cargo. Demand for high-priority, fully integrated air cargo services to Shanghai is expected to grow in the future. We aim to service a broad range of customer requirements for cargo to Shanghai using this service alongside conventional offerings.

Topics

Transfer crane installed at Honmoku Wharf A

In September 2007, we switched from using straddle carriers to a transfer crane for cargo loading operations at the container yard at Honmoku Wharf A. Incorporating the latest safety features, the new equipment will raise the efficiency of loading operations at the terminal, where safety is a top priority. This promises to improve the convenience and quality of cargo loading services for customers and users alike. We are also investing to further enhance terminal functions through the introduction of automatic gate systems and wireless terminals fitted to the loading equipment.

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Establishment of Nissin Group operations in Poland

Poland Nissin Sp. zo. o. was established in June 2007 as a wholly owned subsidiary of Nissin Transport GmbH, which is based in Germany. The company commenced operations in December 2007.

Poland has a population of approximately 38.3 million and covers an area of 323,000km2, equivalent to about 80% of the area of Japan. Attractively positioned as an emerging EU market with a skilled labor force, Poland is a country with good development and growth potential.

The new company will mainly target Japanese companies expanding into Poland by offering international mixed cargo, warehousing, customs clearance, relocation and related logistics services. We plan to operate a 15,000m2 multi-purpose warehouse facility in Torun. In close proximity to fast-growing markets in Russia and Ukraine, the Central Europe region is expected to become a new production center within Europe to supply EU markets. Nissin aims to build a new business from this base in Poland by offering optimized logistics services.

New distribution facility established in Vietnam

In October 2007, Vietnam-based subsidiary Nissin Logistics (VN) Co., Ltd. established VSIP Distribution Center, a new distribution facility, on the outskirts of Ho Chi Minh City. Located within an hour of the airports serving Ho Chi Minh City and Saigon, this facility is ideally placed to service the Vietnam-Singapore Industrial Park (VSIP) situated about 20km to the north of Vietnam’s commercial center. Providing 5,223m2 of warehouse space and equipped with 24-hour remote monitoring equipment, the new distribution facility is one of the most advanced in Vietnam. Numerous Japanese companies are already moving into the industrial zone nearby. Through its local subsidiary, we plan to develop business in Vietnam by providing general logistics services to such companies.

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Stock Information

1. Total number of authorized shares 200,000,000 shares2. Total number of issued shares 101,363,846 shares

(Of which treasury stock: 1,172,032 shares)3. Total number of shareholders 4,9724. Main shareholders (Top 10 shareholders)

Business Outline

List of Main ShareholdersInvestment in Nissin

No. of shares held*

THE DAI-ICHI MUTUAL LIFE INSURANCE COMPANY 6,835MITSUBISHI TOKYO UFJ BANK LIMITED 4,972THE BANK OF YOKOHAMA, LTD. 4,890NIPPON LIFE INSURANCE COMPANY 4,594NISSIN SHOJI CO., LTD 3,779NIPPONKOA INSURANCE CO., LTD 3,429TOKYO MARINE & NICHIDO FIRE INSURANCE CO., LTD 3,325SUMITOMO MITSUI BANKING CORPORATION 3,248JAPAN TRUSTEE SERVICES BANK, LTD (Trust Account) 3,139MITSUBISHI UFJ TRUST AND BANKING CORPORATION 2,939

*in thousands

Head office and branches

Head Office 6-84 Onoe-cho, Naka-ku, Yokohama CityTokyo General Office No.5, Sanban-cho, Chiyoda-ku, Tokyo

Osaka Branch 3-4-14 Hirano-cho, Chuo-ku, Osaka CityKobe Branch Office No.101, Edo-machi, Chuo-ku, Kobe City

Chiba Branch 1-9-1 Chuoko, Chuo-ku, Chiba City

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1

6566

67

68

2

69

70

3

71

4

5

6 ~

106107108

9

~ 24109

10

110

11

1213

Saitama Area

Kita Kanto Area

Chiba Area

Osaka Area

Kobe Area

Tokyo Area

Kanagawa Area

18

~ 1714

~ 9372

~ 94

~ 3525

~ 6136

62

6364

105

11

Domestic Business Network

1 Sapporo (Hokkaido Nissin Co., 35 Tokyo West Office 66 Toyama Office 92 Minami Osaka OfficeLtd.) Head Office 36 Head Office (Yokohama) 67 Hamamatsu Office 93 Izumisano Distribution Center

2 Ebetsu Office 37 Honmoku CFS (Port of Yokohama) 68 Nagoya Office 94 Kobe Branch Office(Hokushin Sangyo) 38 Detamachi Office 69 Koto Office 95 Seishin Office

3 Tomakomai Office 39 Honmoku A-7 Office 70 Suzuka Office 96 Maya Warehouse (Port of Kobe)(Hokkaido Nissin) 40 Honmoku (East, West) Warehouse 71 Kyoto Office 97 Maya West Warehouse

4 Hakodate (Hokushin Koun Co., 41 Honmoku Pier-C Office 72 Osaka Branch 98 Maya Frozen Cargo WarehouseLtd.) Head Office 42 Minami Honmoku Terminal Office 73 Nishitanabe Operation Center 99 Maya East Distribution Center

5 Kakuda Office 43 Yokohama YAT Office 74 Kita Osaka Office 100 PIL-13 Office6 Kita Kanto Office 44 Kanagawa Pier Office 75 Minami Osaka Cargo Distribution Center 101 PI-D Terminal Office7 Tochigi Office 45 Bankokubashi Warehouse 76 Hirabayashi Cargo Distribution Center 102 Kobe Cargo Distribution Center8 Haga Office 46 Yamashita (South, North) Warehouse 77 Nanko Office 103 Kobe Port International Cargo9 Furukawa Office 47 Daikoku Warehouse (Port of 78 Nanko East Office Distribution Center10 Takasaki Office Yokohama) 79 Nanko Warehouse (Port of Osaka) 104 Amagasaki Office11 Ohta Office 48 Daikoku (L-2, L-5) Office 80 Nanko C-6 Container Terminal 105 Rokko Island Office12 Ibaragi Office 49 Daikoku Office 81 Nanko Air Cargo Center 106 Kakogawa Office13 Sashima Office 50 Negishi Office 82 Nanko West Warehouse 107 Maniwa Office14 Sayama Office 51 Shinko Warehouse 83 Nanko Petrochemical Products 108 Hiroshima Office15 Niiza Office 52 J.P.O. SUN Office Center 109 Fukuoka Office16 Asaka Office 53 Tsurumi Operation Center 84 Nanko L-2 Office 110 Omuta Office17 Asaka East Office 54 Yokohama Hazawa Office 85 Nanko Parts Center18 Chiba Branch 55 Samukawa Office 86 Sukematsu Pier Office19 Chiba Warehouse 56 Ukishima Office 87 Sukematsu Distribution Center20 Chuoko Office 57 Higashi Ogishima Office 88 Senboku Operation Center21 Shinko Office 58 Higashi Ogishima Distribution 89 Kansai International Airport Office22 Narashino Office Center 90 LNG Operation Center23 Narita Airport Office 59 Kawasaki Office 91 Ittotsu Office24 Narita Logistics Center 60 Kawasaki (Petrochemical25 Tokyo General Office Products) Tank Yard26 Ohi CFS 61 Atsugi Office27 Ohi Warehouse 62 Kofu Office28 Frozen Cargo Warehouse 63 Omi Office29 Koto Warehouse 64 Kanazawa Office30 Aomi Warehouse 65 Fukui Office31 Aomi Cargo Distribution Center32 Heiwajima Center33 Shibaura Office34 Tokyo East Office

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● Head Office● Branch● Representative Office● Agency Office

Overseas Network

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● Nissin Transport GmbH Head Office ● Airport Office● Neuss Branch ● Shenzhen Office● Duesseldorf Airport Office ● HK Warehouse● Frankfurt Branch ● Kuwai Chung Logistics Division Office● Hamburg European Logistics Center ● Shanghai Gaosin Trade & Warehousing● Hamburg Airport Office Industrial Co., Ltd. Head Office● Hamburg Parts Center ● Ningbo Office● Nissin (U.K.) Ltd. Head Office ● Airport Office● Swindon Office ● Bonded Logistics Zone Branch● Daventry Branch ● Changshu Nissin Sinotrans Transportation● Nissin Transport Ges. mbH Head Office (Vienna) Co., Ltd. Head Office● Nissin Transports Espana S.A. ● Shanghai Office

Head Office (Barcelona) ● Jiangsu Nissin Sinotrans International● Nissin Transport France S.A. Head Office Transportation Co., Ltd. Head Office● Nissin Belgium N.V. Head Office ● Wuxi Office● Moscow Rep. Office ● Suzhou Office● Poland Nissin Sp. zo. o. Head Office ● Nantsu office

● Beijing Sanxin Refrigeration Rogistics Co., Ltd.● Down-Town Office

● Nissin Middle East FZE Head Office (Dubai) ● Guangzhou Nissin International Transport Co., Ltd.● Zhougshan office● Foshan Office

● Nissin Transport Singapore Pte. Ltd. Head Office ● Nissin-Sinotrans International Logistics Co., Ltd.● Airport Office Head Office● Tuas Office ● Beijing Branch● Siam Nistrans Co., Ltd. Head Office (Bangkok) ● Qingdao Branch● Airport Office ● Guanzhou Branch● Laem Chabang Branch ● Dalian Branch● Cargo Distribution Center Office ● Wuhan Branch● Chiangmai Branch ● Tianjin Branch● Rangsit Office ● Nissin (Shanghai) Logistics Co., Ltd.● Rojana Branch ● Beijing Rep. Office● Nistrans (M) SDN. BHD. Head Office ● Shanghai Rep. Office● Airport Office ● Wuhan Rep. Office● Port Klang Office● DOH Parts Center● Johor Bahru Branch ● Nissin International Transport U.S.A., Inc. Head Office● Penang Branch ● Los Angeles Branch● Malacca Logistics Center ● Huntington Beach Branch● Nissin Transport Philippines Corporation ● San Francisco Branch

Head Office (Manila) ● Seattle Branch● Anchor Logistics Head Office ● Portland Branch● Nissin ABC Logistics Private Ltd. ● San Diego Branch● Haldia Office ● Chicago Branch● Greater Noida Office ● South Chicago Branch● Mumbai Office ● Columbus Branch● PT.Nissin Transport Indonesia ● Dayton Branch● Airport Office ● Indianapolis Branch● Nissin Logistics (VN) Co., Ltd. ● Memphis Branch● Ho Chi Minh Branch ● Texas Branch● VSIP Distribution Center ● Atlanta Branch● NR Greenlines Logistics co., Ltd. Head Office ● Alabama Office● Kathmandu Rep. Office ● New York Branch● Almaty Rep. Office ● New Jersey Branch● Yangon Rep. Office ● Miami Branch● Manila Rep. Office ● Nissin Customs Service, Inc. Head Office

● Nissin Transport (Canada) Inc. Head Office● Vancouver Branch

● Nissin Transportation & Warehousing (H.K.) Head Office ● Alliston Branch● Nissin Transport (Mexico) Inc. Head Office● Logistics Center (Rosarito)

Europe

Middle East

Asia

China

North America

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Consolidated Financial Highlights (for the last 4 years)

180,000 200,000 240,000220,000

3,000 4,000 6,0005,000 7,000

1,500 2,500 3,500 4,500

Sales (millions of yen)

Ordinary Profit (millions of yen)

Net Income (millions of yen)

Fiscal 2008

Fiscal 2005

Fiscal 2006

Fiscal 2007

Fiscal 2008

Fiscal 2005

Fiscal 2006

Fiscal 2007

Fiscal 2008

Fiscal 2005

Fiscal 2006

Fiscal 2007

227,749

5,289

6,626

5,376

4,370

2,256

2,337

3,937

2,261

200,400

212,328

220,170

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15

40,000 120,000

250 350300 400

352515 45

80,000

Shareholders’ Equity / Total Assets (millions of yen)

Book Value per Share (yen)

Earnings per Share (yen)

Fiscal 2007

Fiscal 2008

Fiscal 2006

Fiscal 2005

Fiscal 2007

Fiscal 2008

Fiscal 2006

Fiscal 2005

Fiscal 2005

Fiscal 2008

Fiscal 2007

Fiscal 2006

39.38

22.56

23.22

22.36

405.21

395.74

383.45

327.61

97,422(32,577)

111,311(40,988)

104,779(40,055)

108,695(38,319)

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Non-Consolidated Financial Highlights (for the last 4 years)

100,000 110,000 120,000 130,000 140,000

2,000 3,000 4,000

500 1,000 1,500 2,000

Sales (millions of yen)

Ordinary Profit (millions of yen)

Net Income (millions of yen)

Fiscal 2007

Fiscal 2008

Fiscal 2006

Fiscal 2005

Fiscal 2007

Fiscal 2008

Fiscal 2006

Fiscal 2005

Fiscal 2007

Fiscal 2008

Fiscal 2006

Fiscal 2005

129,144

132,893

132,893139,249

121,621

4,104

3,882

3,496

2,927

1,897

1,660

1,707

1,691

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17

30,000 60,000 90,000

300250 350 400

10 155 20

Shareholders’ Equity / Total Assets (millions of yen)

Book Value per Share (yen)

Earnings per Share (yen)

Fiscal 2007

Fiscal 2008

Fiscal 2006

Fiscal 2005

Fiscal 2007

Fiscal 2008

Fiscal 2006

Fiscal 2005

Fiscal 2007

Fiscal 2008

Fiscal 2006

Fiscal 2005

(36,373) 85,557

(34,715) 80,237

(36,591) 86,372

(31,280) 76,579

365.33

362.99

346.49

313.85

18.66

16.57

17.04

16.66

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Consolidated Balance Sheet

Assets

Current assets (millions of yen) (thousands of US dollars)Cash and deposits ¥ 11,857 $ 118,345 Notes receivable and accounts receivable-trade 33,522 334,584 Marketable securities 87 869 Inventories 77 776 Deferred tax assets-current 835 8,340 Other current assets 3,773 37,658Allowance for doubtful accounts (356) (3,556)Current assets 49,796 497,018

Fixed assets

Tangible fixed assetsBuildings and structures 15,629 155,994 Machinery and equipment 1,440 14,378 Land 12,188 121,654 Other tangible fixed assets 1,328 13,256 Tangible fixed assets 30,586 305,284

Intangible fixed assetsGoodwill 242 2,422 Other intangible fixed assets 4,231 42,239 Intangible fixed assets 4,474 44,662

Investments and otherInvestment in securities 16,579 165,480 Long-term loans 226 2,264 Deferred tax assets-non current 352 3,515 Other investments and other assets 3,354 33,484 Allowance for doubtful accounts (591) (5,901)Investments and other 19,922 198,843 Fixed assets 54,983 548,790

Total assets ¥ 104,779 $ 1,045,808

*as of March 31, 2008 (Exchange Rate: ¥100.19 / USD)

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Liabilities

Current liabilities (millions of yen) (thousands of US dollars)Notes payable and accounts payable ¥ 20,685 $ 206,460 Short-term debts 13,264 132,394 Bonds payable due within one year 780 7,785 Accrued income taxes 819 8,182 Accrued employees’ bonus 1,607 16,041 Accrued bonuses to directors and corporate auditors 28 279 Other current liabilities 6,461 64,497 Current liabilities total 43,646 435,641

Non-current liabilitiesLong-term debts 14,117 140,909 Deferred tax liabilities 3,082 30,765 Reserve for employees’ retirement benefits 1,711 17,087 Reserve for directors’ retirement benefits 108 1,084 Long-term accounts payable 325 3,247 Other non-current liabilities 1,731 17,279 Non-current liabilities total 21,077 210,373

Total liabilities 64,724 646,015

Net assetsShareholders’ equity (millions of yen) (thousands of US dollars)

Common stock 6,097 60,857 Capital surplus 4,379 43,712 Earned surplus 24,678 246,313 Treasury stock (307) (3,064)Total shareholders’ equity 34,847 347,817

Valuation and translation adjustmentsNet unrealized holding gains on securities 4,680 46,720 Deferred losses on hedges (22) (221)Foreign currency translation adjustments 62 619 Total valuation and translation adjustments 4,720 47,119

Minority interests 486 4,855

Total net assets 40,055 399,793

Total liabilities & net assets 104,779 1,045,808

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(April 1, 2007 through March 31, 2008) ItemizedAmount

TotalAmount

ItemizedAmount

TotalAmount

(millions of yen) (millions of yen) (thousands of US dollars)

(thousands of US dollars)

Net sales ¥ 227,749 $ 2,273,171Cost of sales 196,525 1,961,531

Gross Income 31,223 311,639 Selling, general and administrative expenses 25,978 259,295

Operating income 5,244 52,344 Non-operating revenue

Interest income 103 1,028 Dividend income 278 2,778 Equity in earnings 337 3,365 Other non-operating revenue 350 1,068 3,494 10,667

Non-operating expensesInterest expense 624 6,234 Exchange loss 88 886 Other non-operating expenses 222 936 2,225 9,345

Ordinary profit 5,376 53,665 Extraordinary income

Gain on sales of investment in securities 142 1,427 Gain on sales of fixed assets 9 152 98 1,525

Extraordinary lossesLoss on disposal of fixed assets 195 1,951 Provision for allowance for doubtful accounts 151 1,513 Loss on devaluation of investment in securities 130 1,301 Impairment loss 79 788 Loss on sales of fixed assets 2 23 Loss on amortization of receivables from overseas subsidiaries 464 1,023 4,637 10,215 Income before income taxes 4,506 44,975 Income taxes-current 1,671 16,684 Income taxes-deferred 584 2,256 5,838 22,523 Minority loss 6 66 Net income 2,256 22,518

Consolidated Statement of Income

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Consolidated Statement of Changes in Net Assets

Shareholders’ equity

Common stock Capital surplus Earned surplus Treasury stock Total shareholders’ equity

Balance at March 31, 2007 6,097 4,378 23,176 (300) 33,351

Changes during the year

Dividends from surplus (751) (751)Net income 2,256 2,256Decrease due to increase in consolidated subsidiaries

(2) (2)

Acquisition of treasury stock (7) (7)

Disposal of treasury stock 0 1 1Changes in items other than shareholders’ equity during the year (net)Total changes during the year — 0 1,501 (6) 1,496

Balance at March 31, 2008 6,097 4,379 24,678 (307) 34,847

Valuation and translation adjustmentsMinority interests

Total net assets

Net unrealized holding gains on

securities

Deferred losses on hedges

Foreign currency translation

adjustments

Total valuation and translation

adjustments

Balance at March 31, 2007 7,291 (18) (103) 7,168 468 40,988

Changes during the year

Dividends from surplus (751)Net income 2,256Decrease due to increase in consolidated subsidiaries

(2)

Acquisition of treasury stock (7)

Disposal of treasury stock 1Changes in items other than shareholders’ equity during the year (net)

(2,610) (3) 166 (2,448) 18 (2,429)

Total changes during the year (2,610) (3) 166 (2,448) 18 (933)

Balance at March 31, 2008 4,680 (22) 62 4,720 486 40,055

(April 1, 2007 through March 31, 2008) (Millions of yen)

(Millions of yen)

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22

Assets

Current assets (millions of yen) (thousands of US dollars)Cash and deposits ¥ 5,061 $ 50,519Notes receivable 495 4,941Accounts receivable-trade 21,068 210,287Marketable securities 87 869Supplies 25 250Prepaid expense 558 5,574Short-term loans receivable 911 9,093Accounts receivable (duty etc.) 2,626 26,211Deferred tax assets-current 497 4,962Other current assets 264 2,636Allowance for doubtful accounts (204) (2,038)Current assets total 31,390 313,309

Fixed assetsTangible fixed assets

Buildings 11,639 116,175Structures 1,068 10,660Machinery and equipment 594 5,933Vehicles and delivery equipment 305 3,054Tools, furniture and fixtures 124 1,238Land 8,790 87,737Construction in progress 24 239Tangible fixed assets total 22,546 225,039

Intangible fixed assetsLeasehold 2,632 26,271Software 1,168 11,659Telephone rights 57 575Other intangible fixed assets 249 2,488Intangible fixed assets total 4,107 40,994

Investments and otherInvestment in securities 13,722 136,960Investment in subsidiaries 3,869 38,618Investment in capital 10 106Investment in capital of subsidiaries 1,250 12,486Long-term loan 183 1,831Long-term loan to subsidiaries 2,798 27,935Claims in bankruptcy, reorganization and similar causes 502 5,012Long-term prepaid expenses 129 1,287Lease income deposits 776 7,751Guarantee deposits 875 8,737Other investments and other 301 3,013Allowance for doubtful accounts (947) (9,455)Allowance for investment losses (1,279) (12,773)Investments and other total 22,193 221,513Fixed assets total 48,847 487,548

Total assets 80,237 800,858 *as of March 31, 2008 (Exchange Rate: ¥100.19 / USD)

Non-Consolidated Balance Sheet

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Liabilities

Current liabilities (millions of yen) (thousands of US dollars)Accounts payable ¥ 13,394 $ 133,694Short-term debts 6,490 64,776Long-term debt due within one year 3,194 31,885Bonds payable due within one year 600 5,988Accounts payable-other 464 4,641Accrued income taxes 492 4,912Accrued expenses 505 5,049Deposits received 43 432Accounts payable (duty etc.) 2,196 21,919Accrued employees’ bonus 870 8,685Accrued bonuses to directors and corporate auditors 28 279Other current liabilities 37 373Current liabilities total 28,317 282,638

Non-current liabilitiesLong-term debts 13,125 131,003Deferred tax liabilities 2,334 23,303Reserve for employees’ retirement benefits 452 4,520Long-term accounts payable 325 3,247Long-term deposits received 966 9,648Non-current liabilities total 17,205 171,723

Total liabilities 45,522 454,362

Net assetsShareholders’ equity (millions of yen) (thousands of US dollars)

Common stock 6,097 60,857Capital surplus

Additional paid-in capital 4,366 43,584Other capital surplus 21 209Total capital surplus 4,387 43,794

Earned surplusLegal reserve 1,524 15,212Other earned surplus 18,363 183,281

Reserve for property replaced by purchase 1,503 15,007Reserve for advanced depreciation 259 2,591General reserve 12,000 119,772Earned surplus carried forward 4,599 45,910

Total earned surplus 19,887 198,494Treasury stock (260) (2,600)

Total shareholders’ equity 30,111 300,545Valuation and translation adjustments

Net unrealized holding gains on securities 4,625 46,171Deferred losses on hedges (22) (221)

Total valuation and translation adjustments 4,603 45,950Total net assets 34,715 346,495Total liabilities & net assets 80,237 800,858

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Non-Consolidated Statement of Income

(April 1, 2007 through March 31, 2008) ItemizedAmount

TotalAmount

ItemizedAmount

TotalAmount

(millions of yen) (millions of yen) (thousands of US dollars)

(thousands of US dollars)

Net sales ¥ 139,249 $ 1,389,857Cost of sales 124,749 1,245,130

Gross Income 14,500 144,726Selling, general and administrative expenses 10,960 109,394

Operating income 3,539 35,331Non-operating revenue

Interest income 99 995Marketable securities interest income 2 29Dividend income 608 6,075Rent income 45 457Other non-operating revenue 196 953 1,960 9,519

Non-operating expensesInterest expense 443 4,423Bonds interest expense 9 89Exchange Loss 93 937Other non-operating expenses 65 611 651 6,102

Ordinary profit 3,882 38,748Extraordinary income

Gain on sales of investment in securities 142 142 1,427 1,427Extraordinary losses

Provision for allowance for investment loss 366 3,654Loss on disposal of fixed assets 185 1,854Provision of allowance for doubtful accounts 159 1,587Loss on devaluation of investment in securities 130 1,301Impairment loss 12 854 127 8,525Income before income taxes 3,170 31,649Income taxes-current 1,072 10,701Income taxes-deferred 391 1,463 3,903 14,605Net income 1,707 17,044

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Non-Consolidated Statement of Changes in Net Assets

Shareholders’ equity

Common stock

Capital surplus Earned surplus

Additional paid-in capital

Other capital surplus

Total capital surplus

Legal reserve

Other earned surplus

Total earned surplus

Reserve for special

depreciation

Reserve for property

replaced by purchase

Reserve for advanced

depreciation

General reserve

Earned surplus carried forward

Balance at March 31, 2007 6,097 4,366 20 4,387 1,524 0 1,581 259 11,000 4,565 18,930Changes during the yearReversal of reserve for special depreciation (0) 0 —Reversal of reserve for property replaced by purchase

(78) 78 —

Provision of general reserve 1,000 (1,000) —Dividends from surplus (751) (751)Net income 1,707 1,707Acquisition of treasury stockDisposal of treasury stock 0 0Changes in items other than shareholders’ equity during the year (net)Total changes during the year — — 0 0 — (0) (78) — 1,000 34 956Balance at March 31, 2008 6,097 4,366 21 4,387 1,524 — 1,503 259 12,000 4,599 19,887

Shareholders’ equity Valuation and translation adjustmentsTotal net assets

Treasury stock Total shareholders’ equity

Net unrealized holding gains on securities

Deferred losses on hedges

Total valuation and translation adjustments

Balance at March 31, 2007 (254) 29,161 7,230 (18) 7,212 36,373Changes during the yearReversal of reserve for special depreciation — —Reversal of reserve for property replaced by purchase

— —

Provision of general reserve — —

Dividends from surplus (751) (751)Net income 1,707 1,707Acquisition of treasury stock (7) (7) (7)Disposal of treasury stock 1 1 1Changes in items other than shareholders’ equity during the year (net)

(2,605) (3) (2,608) (2,608)

Total changes during the year (6) 950 (2,605) (3) (2,608) (1,658)

Balance at March 31, 2008 (260) 30,111 4,625 (22) 4,603 34,715

(April 1, 2007 through March 31, 2008) (Millions of yen)

(Millions of yen)

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Directors and Auditors

Chairman of the Board and Chief Executive Officer(Representative Director) Hiroshi Tsutsui

President and Chief Operative Officer (Representative Director) Masahiro Tsutsui

Director and Senior Managing Executive Officer Kazufumi YamaguchiDirector and Senior Managing Executive Officer Masahiko OguraDirector and Senior Managing Executive Officer Yasuo ShodaDirector and Managing Executive Officer Mikio AragaDirector and Managing Executive Officer Tadakuni ShiomotoDirector and Managing Executive Officer Hiroshi TakeuchiDirector and Managing Executive Officer Hiroaki FuruyaDirector and Executive Officer Kouichi IshikawaDirector and Executive Officer Hideo YamaguchiDirector and Executive Officer Toshio IshikawaDirector and Executive Officer Sadamitsu NakajimaDirector and Executive Officer Tetsuji YoshimotoStanding Auditor Akira KirigayaAuditor Takeshi TsudaAuditor Osamu Takeda

Note: Auditors Takeshi Tsuda and Osamu Takeda are outside auditors.

Executive Officer Kazuo NagataniExecutive Officer Kenji UchidaExecutive Officer Tamotsu NakagawaExecutive Officer Teruhiko KobayashiExecutive Officer Masahiko NakamuraExecutive Officer Tetsuo KomakiExecutive Officer Hideto SakuraiExecutive Officer Yoshio AkaoExecutive Officer Shoji Fujii

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