BUSINESS REPORT2007

BUSINESS REPORT2007

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I wish to sincerely thank all our shareholders for their continuing support and encouragement, and welcome this opportunity to say a few words as we report on Nissin Corporation’s business activities and results for the fiscal year ended March 31, 2007.

Setting our ultimate objective in satisfying our customers’ needs and earning their trust, we have built a global logistics operation to meet the demands of the 21st century. By keeping pace with the changes in the new era, we aim to remain the service provider of choice and intend to do our best to accommodate the needs that arise from the transformations in the business and social environment.

We ask your continuing support and encouragement.

Hiroshi Tsutsui, President

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, 2007)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

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Business Activities and Results

During the fiscal year under review, the world economy continued to grow at a moderate pace. In the United

States, personal consumption rose despite the downward trends of capital investment and housing starts. In Asia,

China maintained high economic growth led by capital investment and exports, while the Southeast Asian

economies also performed strongly. In Europe, the gradual economic recovery continued, supported by rising

exports and personal consumption. Long-lasting recovery of the Japanese economy progressed as capital

investment increased and personal consumption was relatively firm.

In the Japanese logistics industry, although cargo movement into and out of China was active, overall volume

of international freight transport trended upward moderately for both exports and imports. Business conditions

remained harsh for domestic freight transport despite a tendency toward recovery in some areas. Business in the

travel industry remained firm centering on China and Southeast Asia.

Nissin Group is implementing its second mid-term (three-year) business plan, which runs from fiscal 2005 to

2007. We are striving to strengthen our earning power and reinforce the fundamentals of our business in order to

secure our position as a global logistics provider with corporate logistics as our mainstay activity.

In the International Freight Business Unit, we endeavored to provide totally optimized services that fulfill

logistics needs of customers in line with the development of their overseas business. We engaged in vigorous

marketing with the aim of increasing handling of marine and air freight. In the Domestic Freight Business Unit,

our efforts were focused on deepening our relationship with existing customers and cultivating new customers by

promoting proposal-driven marketing and providing meticulous logistics services.

In Travel Services and Other Business, while working to increase orders received over the Internet, we stepped

up our efforts to increase handling of international business travel, the main pillar of our travel services, as well

as handling of private travel.

In North America we made every effort to boost import and export handling of transport equipment and

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electrical and electronic equipment. At the same time, we sought to expand handling of U.S.-Mexico transborder

transport and U.S.-China transport. In China, we took further steps to create a domestic network by enhancing

our presence in the country’s principal cities, with Nissin-Sinotrans International Logistics Co., Ltd., the joint

venture established last year, as the centerpiece.

In India, where the economy continued to enjoy high economic growth, our freight handling increased strongly

in step with our customers who are establishing a presence in the country and expanding their investments. In

Vietnam, with the two-headquarters structure (in Hanoi and Ho Chi Minh City) we worked to provide

comprehensive logistics services on the back of booming trade between Japan and Vietnam and also between

China and Vietnam.

In Russia, we stepped up marketing with an eye to increasing freight volume in the future. We also began a

feasibility study with a view to establishing a base in Eastern Europe where business is expected to take wing.

In Japan, our air freight business for imports and exports was further strengthened with the completion of

construction of the Narita Logistics Center in February, which is equipped with refrigeration and constant-

temperature facilities as well as room-temperature facilities, enabling us to meet the diverse needs of our

customers.

In the Chubu region where demand for international freight is expected to rise, we established AICHI NISSIN

CO., LTD. By strengthening linkage among Nissin Group companies from Hokkaido to Kyushu, we aim to

further enrich our comprehensive logistics business.

As a result, consolidated net sales for the year under review rose 3.7% from the previous year to ¥220,170

million fueled by the growth of our mainstay international freight business. Consolidated operating income

climbed 19.7% to ¥6,071 million. Consolidated ordinary income jumped 25.3% to ¥6,626 million owing to an

improvement in the financial account balance. Consolidated net income soared 74.0% to ¥3,937 million.

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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 electronic equipment for China,

Southeast Asia, and North America was buoyant, while handling of imports of food products and raw materials from

China and Europe was firm. Handling of marine freight (NVOCC: non-vessel operating common carrier) was also

brisk between Japan on the one hand and North America, China, and Southeast Asia on the other.

In the air freight segment, handling of exports of electrical and electronic equipment and automobile parts for North

America, China, and Southeast Asia was upbeat, while handling of imports of fresh foods and machine parts was

generally firm.

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

increased in North America. Volumes were particularly high between the United States on the one hand, and Mexico,

China, and Southeast Asia on the other. In Europe, the logistics business remained firm, while in Southeast Asia

business expanded centering on handling of air freight. In China, we strengthened domestic logistics services,

including imports of parts, shuttle-fleet truck transport and milk-run transport in Eastern China, the vendor managed

inventory (VMI) warehouse service for manufacturers, and freezer and refrigerated transport of food to convenience

stores.

Consolidated sales from the International Freight Business Unit increased 5.7% year on year to ¥130,184 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. Also, we

sought to win new business by strengthening the linkage among Nissin Group companies in Japan.

Segmental Overview

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Business UnitFiscal 2006 Fiscal 2007 Change

(%)Millions of yen % of total Millions of yen % of total

International Freight Business Unit 123,112 58.0 130,184 59.1 5.7

Domestic Freight Business Unit 38,209 18.0 38,235 17.4 0.1Travel Services and Other

Businesses 51,006 24.0 51,750 23.5 1.5

Total 212,328 100.0 220,170 100.0 3.7

In the automotive transport operations, we strove for greater efficiency by reviewing transport systems and

introducing a new fleet operation management system. Further, we sought to increase freight volumes handled by our

truck transport in the Tokyo region and transport of hazardous items.

In the warehouse business, we increased the variety of items we handle by accepting orders for the storage of

telecommunications equipment. We also endeavored to expand our business of storage and delivery of imported food

products by offering enhanced services. For this purpose, existing facilities were converted to constant-temperature

facilities and refurbished.

Consolidated sales from the Domestic Freight Business Unit increased 0.1% from the previous year to ¥38,235

million.

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

operations, handing of business travel to China, Southeast Asia, and North America increased partly due to the start of

full-scale operation of our reservation system. In the individual and group travel fields, despite continuing fierce

competition, business was firm as a result of efforts to expand sales through a system enabling customers to purchase

travel products on the website.

Consolidated sales from this segment rose 1.5% year on year to ¥51,750 million yen.

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The Narita Logistics Center of Nissin Air Cargo Opens

The Narita Logistics Center, whose construction started in March 2006, was completed at the end of January 2007 and began operation on February 13.

The Narita Logistics Center is a three-story (partially four-story) reinforced concrete building with a total floor area of about 10,000 square meters. The capacious area on the first floor dedicated to air freight occupies 4,000 square meters, including the loading/unloading bay and the roofed area in front of the building. The air freight area is an all-weather facility suitable for 24-hour operations. The second floor houses refrigerators and constant-temperature storage facilities, while the third floor has room-temperature storage facilities. The Narita Logistics Center enables us to offer sophisticated services of outstanding quality covering storage, distribution processing, and delivery.

Taking the opportunity of the opening of the Narita Logistics Center, in addition to handling of air freight we are resolved to more actively promote our global logistics business in concert with our overseas subsidiaries as an international comprehensive logistics solutions provider.

Topics

Promoting Eco-Drive: A Letter of Appreciation from the Governor of Kanagawa Prefecture

We have been promoting driving in an environmentally friendly manner in order to achieve energy saving (cost cutting), safety (zero accidents), and reduction of environmental impacts (CO2 reduction), including the avoidance of idling of trucks and elimination of jackrabbit starting and acceleration. In May 2006, Nissin was selected as one of the model companies for the Energy Service Company (ESCO) transport project promoted by Kanagawa Prefecture.

The Kanagawa Prefecture Transport ESCO Model Project is part of efforts to effectively promote environmentally friendly driving for transport companies in order to ameliorate air pollution in the prefecture and mitigate global warming. Upon completion of the project in November 2006, we received a letter of appreciation from the governor of Kanagawa Prefecture for championing environmentally friendly driving and contributing greatly to its promotion throughout the prefecture.

We will continue to promote environmentally friendly driving and make efforts to improve the quality of our operations from the perspective of safety while enhancing the efficiency of logistics by saving energy step by step.

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Transporting Equipment for Filming of “Aoki Okami” Overseas

We transported the equipment for filming of the movie “Aoki Okami” at overseas locations. The movie premiered in March 2007.

Commemorating the 800th anniversary of the founding of the Mongol state, the film presents the life of Genghis Khan, the man who created the largest empire in history. We began shipping equipment to Mongolia in June 2006, and transported the equipment back to Japan when filming was completed.

Capitalizing on our overseas networks, we are endeavoring to meet diverse transport needs by always selecting the optimum transport mode, as we did for the transport of movie-making equipment to Mongolia.

Shipping with Shuttle Fleet in Eastern China

Nissin (Shanghai) Logistics Co., Ltd., our ninth subsidiary to be established in China, currently has five trucks: two ten-ton wing trucks and three five-ton box trucks. The company is mainly engaged in delivery in Eastern China.

The Chinese economy is expected to continue growing at an annual rate exceeding 10%, with the Beijing Olympics in 2008 and the World Expo in Shanghai and the Asian Games in Guangzhou in 2010 serving as milestones along the path of China’s economic resurgence. Moreover, consumption is expected to expand in tandem with this growth. We are moving forward to build a transport system that responds to customer needs, increase bases in China, and improve the delivery system.

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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: 1,157,962 shares)3. Total number of shareholders 5,0094. 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 4,594NIPPONKOA INSURANCE CO., LTD 3,429NISSIN SHOJI CO., LTD 3,398TOKIO MARINE & NICHIDO FIRE INSURANCE CO., LTD 3,325SUMITOMO MITSUI BANKING CORPORATION 3,248THE MASTER TRUST BANK OF JAPAN, LTD (Trust Account) 3,202MITSUBISHI UFJ TRUST AND BANKING CORPORATION 2,939

*in thousands

Employees

Number of Employees Compared to previous year Average age of employees Average length of service

Total 921 + 9 39.38 15.89

Business segments Number of employeesInternational Freight Business Unit 2,445Domestic Freight Business Unit 936Travel Services and Other Businesses 393Corporate (common) 175Total 3,949

* The number of employees in the column for “corporate (common)” is the number of employees who belong to administrative organizations that cannot be classified into a specific business segment.

On a consolidated basis

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1

6667

2

68

69

3

70

71

4

72

5

6

7 ~

108109110

10

~ 25111

11

112

12

13 14

Saitama Area

Kita Kanto Area

Chiba Area

Osaka Area

Kobe Area

Tokyo Area

Kanagawa Area

19

~ 1815

~ 9573

~ 96

~ 3626

~ 6237

63

6465

107

11

Domestic Business Network

1 Sapporo (Hokkaido Nissin Co., 36 Tokyo West Office 67 Toyama Office 94 Minami Osaka OfficeLtd.) Head Office 37 Head Office (Yokohama) 68 Hamamatsu Office 95 Izumisano Distribution Center

2 Higashi Sapporo Office 38 Honmoku CFS (Port of Yokohama) 69 Nagoya Office 96 Kobe Branch Office(Hokkaido Nissin) 39 Detamachi Office 70 Koto Office 97 Seishin Office

3 Ebetsu Office 40 Honmoku A-7 Office 71 Suzuka Office 98 Maya Warehouse (Port of Kobe)(Hokushin Sangyo) 41 Honmoku (East, West) Warehouse 72 Kyoto Office 99 Maya West Warehouse

4 Tomakomai Office 42 Honmoku Pier-C Office 73 Osaka Branch 100 Maya Frozen Cargo Warehouse(Hokkaido Nissin) 43 Minami Honmoku Terminal Office 74 Nishitanabe Operation Center 101 Maya East Distribution Center

5 Hakodate (Hokushin Koun Co., 44 Yokohama YAT Office 75 Kita Osaka Office 102 PIL-13 OfficeLtd.) Head Office 45 Kanagawa Pier Office 76 Minami Osaka Cargo Distribution Center 103 PI-D Terminal Office

6 Kakuda Office 46 Bankokubashi Warehouse 77 Hirabayashi Cargo Distribution Center 104 Kobe Cargo Distribution Center7 Kita Kanto Office 47 Yamashita (South, North) Warehouse 78 Nanko Office 105 Kobe Port International Cargo8 Tochigi Office 48 Daikoku Warehouse (Port of 79 Nanko East Office Distribution Center9 Haga Office Yokohama) 80 Nanko Warehouse (Port of Osaka) 106 Amagasaki Office10 Furukawa Office 49 Daikoku (L-2, L-5) Office 81 Nanko C-6 Container Terminal 107 Rokko Island Office11 Takasaki Office 50 Daikoku Office 82 Nanko Air Cargo Center 108 Kakogawa Office12 Ohta Office 51 Negishi Office 83 Nanko West Warehouse 109 Maniwa Office13 Ibaragi Office 52 Shinko Warehouse 84 Nanko Petrochemical Products 110 Hiroshima Office14 Sashima Office 53 J.P.O. SUN Office Center 111 Fukuoka Office15 Sayama Office 54 Tsurumi Operation Center 85 Nanko L-2 Office 112 Omuta Office16 Niiza Office 55 Yokohama Hazawa Office 86 Nanko Parts Center17 Asaka Office 56 Samukawa Office 87 Sukematsu Pier Office18 Asaka East Office 57 Ukishima Office 88 Sukematsu Distribution Center19 Chiba Branch 58 Higashi Ogishima Office 89 Senboku Operation Center20 Chiba Warehouse 59 Higashi Ogishima Distribution 90 Kansai International Airport Office21 Chuoko Office Center 91 LNG Operation Center22 Shinko Office 60 Kawasaki Office 92 Ittotsu Office23 Narashino Office 61 Kawasaki (Petrochemical 93 Hannanko Office24 Narita Airport Office Products) Tank Yard25 Narita Logistics Center 62 Atsugi Office26 Tokyo General Office 63 Kofu Office27 Ohi CFS 64 Omi Office28 Ohi Warehouse 65 Kanazawa Office29 Frozen Cargo Warehouse 66 Fukui Office30 Koto Warehouse31 Aomi Warehouse32 Aomi Cargo Distribution Center33 Heiwajima Center34 Shibaura Office35 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 ● Kuwai Chung Logistics Division Office● Neuss Branch ● Shanghai Gaosin Trade & Warehousing● Duesseldorf Airport Office Industrial Co., Ltd. Head Office● Frankfurt Branch ● Ningbo Office● Hamburg European Logistics Center ● Airport Office● Hamburg Airport Office ● Bonded Logistics Zone Branch● Hamburg Parts Center ● Changshu Nissin Sinotrans Transportation● Nissin (U.K.) Ltd. Head Office Co., Ltd. Head Office● Swindon Office ● Shanghai Office● Daventry Branch ● Jiangsu Nissin Sinotrans International● Nissin Transport Ges. mbH Head Office (Vienna) Transportation Co., Ltd. Head Office● Nissin Transports Espana S.A. ● Wuxi Office

Head Office (Barcelona) ● Suzhou Office● Nissin Transport France S.A. Head Office ● Nantsu office● Nissin Belgium N.V. Head Office ● Beijing Sanxin Refrigeration Rogistics Co., Ltd.● Moscow Rep. Office ● Guangzhou Nissin International Transport Co., Ltd.

● Zhougshan office● Foshan Office

● Nissin Middle East FZE Head Office (Dubai) ● Nissin-Sinotrans International Logistics Co., Ltd.Head Office

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

Head Office (Manila) ● South Chicago Branch● Nissin ABC Logistics Private Ltd. ● Columbus Branch● Haldia Office ● Dayton Branch● Greater Noida Office ● Indianapolis Branch● PT.Nissin Transport Indonesia ● Memphis Branch● Nissin Logistics (VN) Co., Ltd. ● Texas Branch● Ho Chi Minh Branch ● Atlanta Branch● Kathmandu Rep. Office ● Alabama Office● Almaty Rep. Office ● New York Branch● Yangon Rep. Office ● New Jersey Branch● Manila Rep. Office ● Miami Branch

● Nissin Customs Service, Inc. Head Office

● Nissin Transportation & Warehousing ● Nissin Transport (Canada) Inc. Head Office(H.K.) Head Office ● Vancouver Branch

● Airport Office ● Alliston Branch● Shenzhen Office ● Nissin Transport (Mexico) Inc. Head Office● HK Warehouse

Europe

Middle East

Asia

China

North America

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Consolidated Financial Highlights (for the last 4 years)

180,000 200,000 220,000

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 2004

Fiscal 2005

Fiscal 2006

Fiscal 2007

Fiscal 2004

Fiscal 2005

Fiscal 2006

Fiscal 2007

Fiscal 2004

Fiscal 2005

Fiscal 2006

Fiscal 2007

178,059

200,400

212,328

220,170

5,289

6,626

3,449

4,370

1,444

2,337

3,937

2,261

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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 2004

Fiscal 2007

Fiscal 2006

Fiscal 2005

Fiscal 2004

Fiscal 2007

Fiscal 2006

Fiscal 2005

Fiscal 2004

Fiscal 2007

Fiscal 2006

Fiscal 2005

39.38

23.22

22.36

14.25

405.21

383.45

307.83

327.61

97,066

97,422

(30,515)

(32,577)

111,311(40,988)

108,695(38,319)

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

90,000 100,000 110,000 120,000 130,000

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 2004

Fiscal 2007

Fiscal 2006

Fiscal 2005

Fiscal 2004

Fiscal 2007

Fiscal 2006

Fiscal 2005

Fiscal 2004

Fiscal 2007

Fiscal 2006

Fiscal 2005

129,144

132,893

112,290

121,621

2,589

4,104

3,496

2,927

1,305

1,897

1,660

1,691

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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 2004

Fiscal 2007

Fiscal 2006

Fiscal 2005

Fiscal 2004

Fiscal 2007

Fiscal 2006

Fiscal 2005

Fiscal 2004

Fiscal 2007

Fiscal 2006

Fiscal 2005

(29,895) 77,751

(36,373) 85,557

(36,591) 86,372

(31,280) 76,579

300.34

365.33

362.99

313.85

12.81

18.66

16.57

16.66

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Consolidated Balance Sheet

Assets

Current assets (millions of yen) (thousands of US dollars)Cash and deposits ¥ 11,981 $ 101,497Notes receivable and accounts receivable-trade 35,037 296,800Marketable securities 686 5,817Inventories 90 764Deferred tax assets-current 958 8,123Other current assets 3,840 32,529Allowance for doubtful accounts (369) (3,133)Current assets 52,225 442,399

Fixed assets

Tangible fixed assetsBuildings and structures 15,850 134,271Machinery and equipment 1,652 13,994Land 11,930 101,065Other tangible fixed assets 1,250 10,591Tangible fixed assets 30,683 259,923

Intangible fixed assetsGoodwill 485 4,112Other intangible fixed assets 3,993 33,832Intangible fixed assets 4,479 37,944

Investments and otherInvestment in securities 20,692 175,287Long-term loans 224 1,902Deferred tax assets-non current 344 2,916Other investments and other assets 3,098 26,246Allowance for doubtful accounts (437) (3,702)Investments and other 23,922 202,650Fixed assets 59,086 500,518

Total assets ¥ 111,311 $ 942,918

*as of March 31, 2007 (Exchange Rate: ¥118.05 / USD)

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Liabilities

Current liabilities (millions of yen) (thousands of US dollars)Notes payable and accounts payable ¥ 22,579 $ 191,271Short-term debts 13,770 116,653Bonds payable due within one year 300 2,541Accrued income taxes 1,570 13,307Accrued employees’ bonus 1,573 13,333Other current liabilities 5,921 50,158Current liabilities total 45,716 387,265

Non-current liabilitiesBonds payable 780 6,607Long-term debts 14,689 124,438Deferred tax liabilities 4,407 37,336Reserve for employees’ retirement benefits 2,994 25,362Reserve for directors’ retirement benefits 479 4,062Other non-current liabilities 1,254 10,627Non-current liabilities total 24,605 208,435

Total liabilities 70,322 595,701

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

Common stock 6,097 51,649Capital surplus 4,378 37,094Earned surplus 23,176 196,326Treasury stock (300) (2,548)Total shareholders’ equity 33,351 282,522

Valuation and translation adjustmentsNet unrealized holding gains on securities 7,291 61,764Deferred losses on hedges (18) (155)Foreign currency translation adjustments (103) (880)Total valuation and translation adjustments 7,168 60,728

Minority interests 468 3,966Total net assets 40,988 347,216

Total liabilities & net assets 111,311 942,918

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(April 1, 2006 through March 31, 2007) ItemizedAmount

TotalAmount

ItemizedAmount

TotalAmount

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

(thousands of US dollars)

Net sales ¥ 220,170 $1,865,064Cost of sales 190,601 1,614,580

Gross Income 29,569 250,484Selling, general and administrative expenses 23,498 199,051

Operating income 6,071 51,432Non-operating revenue

Interest income 77 659Dividend income 244 2,067Equity in earnings 262 2,227Exchange gain 263 2,233Other non-operating revenue 419 1,268 3,556 10,744

Non-operating expensesInterest expense 585 4,958Other non-operating expenses 128 713 1,087 6,045

Ordinary profit 6,626 56,131Extraordinary income

Gain on sales of investment in securities 259 2,202Distribution of residual property 9 269 80 2,282

Extraordinary lossesLoss on termination of qualified pension plan 59 506Impairment loss 42 356Loss on disposal of fixed assets 25 212Loss on sales of fixed assets 15 130Bad debt expenses 9 77Loss on withdrawal from golf club membership 3 25Provision for allowance for doubtful accounts 0 154 3 1,311Income before income taxes 6,740 57,102Income taxes-current 2,408 20,406Income taxes-deferred 400 2,809 3,394 23,801Minority income (5) (48)Net income 3,937 33,350

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, 2006 6,097 4,374 19,875 (330) 30,016

Changes during the year

Dividends from surplus (600) (600)Net income 3,937 3,937Bonuses to directors and corporate auditors by appropriation of retained earnings

(35) (35)

Acquisition of treasury stock (11) (11)

Disposal of treasury stock 4 41 45Changes in items other than shareholders’ equity during the year (net)Total changes during the year — 4 3,301 29 3,335

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

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, 2006 8,549 — (245) 8,303 484 38,804

Changes during the year

Dividends from surplus (600)Net income 3,937Bonuses to directors and corporate auditors by appropriation of retained earnings

(35)

Acquisition of treasury stock (11)

Disposal of treasury stock 45Changes in items other than shareholders’ equity during the year (net)

(1,257) (18) 141 (1,134) (16) (1,151)

Total changes during the year (1,257) (18) 141 (1,134) (16) 2,184

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

(April 1, 2006 through March 31, 2007) (Millions of yen)

(Millions of yen)

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Assets

Current assets (millions of yen) (thousands of US dollars)Cash and deposits ¥ 3,955 $ 33,510Notes receivable 499 4,230Accounts receivable-trade 21,896 185,487Marketable securities 686 5,817Supplies 20 175Prepaid expense 524 4,439Short-term loans receivable 759 6,430Accounts receivable (duty etc.) 2,744 23,250Deferred tax assets-current 562 4,762Other current assets 273 2,319Allowance for doubtful accounts (115) (979)Current assets total 31,808 269,445

Fixed assetsTangible fixed assets

Buildings 12,338 104,519Structures 1,148 9,731Machinery and equipment 742 6,292Vehicles and delivery equipment 342 2,900Tools, furniture and fixtures 128 1,091Land 8,585 72,726Tangible fixed assets total 23,286 197,262

Intangible fixed assetsLeasehold 2,650 22,455Software 778 6,596Telephone rights 57 488Other intangible fixed assets 361 3,065Intangible fixed assets total 3,849 32,606

Investments and otherInvestment in securities 18,047 152,681Investment in subsidiaries 3,884 32,909Investment in capital 38 323Investment in capital of subsidiaries 1,200 10,167Long-term loan 168 1,423Long-term loan to subsidiaries 2,689 22,782Claims in bankruptcy, reorganization and similar causes 324 2,748Long-term prepaid expenses 87 743Lease income deposits 713 6,045Guarantee deposits 972 8,239Other investments and other 296 2,508Allowance for doubtful accounts (896) (7,591)Allowance for investment losses (913) (7,739)Investments and other total 26,613 225,443Fixed assets total 53,749 455,311

Total assets 85,557 724,756*as of March 31, 2007 (Exchange Rate: ¥118.05 / USD)

Non-Consolidated Balance Sheet

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

Accounts payable ¥ 13,861 $ 117,419Short-term debts 5,840 49,470Long-term debt due within one year 3,733 31,624Bonds payable due within one year 100 847Accounts payable-other 167 1,419Accrued income taxes 1,192 10,101Accrued expenses 511 4,329Deposits received 31 270Accounts payable (duty etc.) 2,228 18,875Accrued employees’ bonus 871 7,386Accrued bonuses to directors and corporate auditors 38 321Other current liabilities 45 383Current liabilities total 28,621 242,448

Non-current liabilitiesBonds payable 600 5,082Long-term debts 13,365 113,221Deferred tax liabilities 3,799 32,182Reserve for employees’ retirement benefits 1,641 13,907Reserve for directors’ retirement benefits 363 3,079Long-term deposits received 792 6,712Non-current liabilities total 20,562 174,186

Total liabilities 49,183 416,635

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

Common stock 6,097 51,649Capital surplus

Additional paid-in capital 4,366 36,990Other capital surplus 20 173Total capital surplus 4,387 37,163

Earned surplusLegal reserve 1,524 12,910Other earned surplus 17,406 147,453

Reserve for special depreciation 0 2Reserve for property replaced by purchase 1,581 13,398Reserve for advanced depreciation 259 2,199General reserve 11,000 93,180Earned surplus carried forward 4,565 38,672

Total earned surplus 18,930 160,364Treasury stock (254) (2,154)

Total shareholders’ equity 29,161 247,023Valuation and translation adjustments

Net unrealized holding gains on securities 7,230 61,253Deferred losses on hedges (18) (155)

Total valuation and translation adjustments 7,212 61,098Total net assets 36,373 308,121Total liabilities & net assets 85,557 724,756

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Non-Consolidated Statement of Income

(April 1, 2006 through March 31, 2007) ItemizedAmount

TotalAmount

ItemizedAmount

TotalAmount

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

(thousands of US dollars)

Net sales ¥ 132,893 $ 1,125,738Cost of sales 119,536 1,012,591

Gross Income 13,357 113,147Selling, general and administrative expenses 9,769 82,754

Operating income 3,587 30,392Non-operating revenue

Interest income 102 865Marketable securities interest income 5 47Dividend income 492 4,168Rent income 59 505Exchange gain 204 1,731Other non-operating revenue 167 1,031 1,419 8,737

Non-operating expensesInterest expense 319 2,705Bonds interest expense 135 1,146Other non-operating expenses 60 515 511 4,363

Ordinary profit 4,104 34,766Extraordinary income

Reversal of allowance for investment loss 465 3,939Gain on sales of investment in securities 259 2,196Distribution of residual property 9 733 80 6,217

Extraordinary lossesProvision of allowance for doubtful accounts 513 4,353Loss on termination of qualified pension plan 59 506Impairment loss 42 356Provision for allowance for investment loss 20 169Loss on withdrawal from golf club membership 3 638 25 5,410Income before income taxes 4,199 35,572Income taxes-current 1,733 14,688Income taxes-deferred 805 2,539 6,821 21,510Net income 1,660 14,062

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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, 2006 6,097 4,366 16 4,383 1,524 3 1,683 259 10,000 4,436 17,906Changes during the yearReversal of reserve for special depreciation (3) 3 —Reversal of reserve for property replaced by purchase

(156) 156 —

Provision of reserve for property replaced by purchase

54 (54) —

Provision of general reserve 1,000 (1,000) —Dividends from surplus (600) (600)Net income 1,660 1,660Bonuses to directors and corporate auditors by appropriation of retained earnings

(35) (35)

Acquisition of treasury stockDisposal of treasury stock 3 3Changes in items other than shareholders’ equity during the year (net)Total changes during the year — — 3 3 — (3) (101) — 1,000 129 1,024Balance at March 31, 2007 6,097 4,366 20 4,387 1,524 0 1,581 259 11,000 4,565 18,930

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, 2006 (278) 28,108 8,482 — 8,482 36,591Changes during the yearReversal of reserve for special depreciation — —Reversal of reserve for property replaced by purchase

— —

Provision of reserve for property replaced by purchase

— —

Provision of general reserve — —

Dividends from surplus (600) (600)Net income 1,660 1,660Bonuses to directors and corporate auditors by appropriation of retained earnings

(35) (35)

Acquisition of treasury stock (11) (11) (11)Disposal of treasury stock 35 39 39Changes in items other than shareholders’ equity during the year (net)

(1,251) (18) (1,270) (1,270)

Total changes during the year 24 1,052 (1,251) (18) (1,270) (217)Balance at March 31, 2007 (254) 29,161 7,230 (18) 7,212 36,373

(April 1, 2006 through March 31, 2007) (Millions of yen)

(Millions of yen)

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Directors and Auditors

President Hiroshi TsutsuiExecutive Vice President Masahiro TsutsuiDirector 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 Masatoshi HiraiStanding Auditor Akira KirigayaAuditor Takeshi TsudaAuditor Osamu Takeda

Note: Auditors Takeshi Tsuda and Osamu Takeda are outside auditors.The Company has introduced the executive officer system and the Company executives are listed above.

Executive Officer Takeru BandoExecutive Officer Kazuo NagataniExecutive Officer Kenji UchidaExecutive Officer Tamotsu NakagawaExecutive Officer Teruhiko KobayashiExecutive Officer Masahiko NakamuraExecutive Officer Akimitsu NaganoExecutive Officer Tetsuo KomakiExecutive Officer Hideto Sakurai

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