nittsu shoji report sales and earnings attainment. however, despite these efforts, sales revenue...

2010NITTSU SHOJI REPORT

(April 1,2009-March 31,2010)

1. Dear Shareholders,

Thank you very much for your continued support of Nittsu Shoji Company Limited.

I am pleased to have the opportunity to report on the operating results of the Company for the 63rd business

year from April 1, 2009, to March 31, 2010.

The period under review saw a steep deterioration in the business environment, with significant declines in the

first half cutting into full-year sales revenue and earnings, despite our first priority on protecting income.

We are aware that the difficult operating conditions will continue. Nonetheless, each individual employee will

strive to achieve steady business growth through the execution of the new management plan incepted in April

this year.

I respectfully request your continued support and understanding.

2. Business Review and Results

The Japanese economy in the period under review slackened in its gradual rebound from the recession since

the financial crisis in the fall of 2008 and, attended by downward pressures on employment and prices, failed

to stage a genuine recovery.

In these circumstances, the Company formulated its “2009 Key Management Policies” and focused on ensur-

ing sales and earnings attainment. However, despite these efforts, sales revenue declined 11.5% on the year

to ¥316,823 million, mainly reflecting lower selling prices at the Petroleum Division and reduced export cargo

packaging at the Logistics Support Division.

Despite proactive efforts to streamline operations to cover the plunge in sales revenue, ordinary profit

decreased 5.9% on the year to ¥6,787 million, leaving net profit for the period at ¥3,377 million.

Nitts Shoji Co.,Ltd. 1

Translation of an Independent Auditors’ Report original issued in Japanese

Audit Report of Independent Auditor

To the Board of Directors ofNITTSU SHOJI Co.,Ltd.

May 21, 2010

Ernst & Young ShinNihon LLCNobuyuki OnoCertified Public AccountantDesignated and Operating PartnerSatoshi KimuraCertified Public AccountantDesignated and Operating PartnerAkira FujiwaraCertified Public AccountantDesignated and Operating Partner

We have audited the non-consolidated financial statements of NITTSU SHOJI Co.,Ltd. namely, the balancesheet, the statement of income, the statements of changes in stockholders' equity, the notes to non-consolidated financial statements and the accompanying detailed statements for the 63th business termfrom April 1, 2009 to March 31, 2010, in accordance with item 1, paragraph 2, Article 436 of the CorporationLaw. Responsibility as to the preparation of such nonconsolidated financial statements and the accompanyingdetailed statements lies with the management of the Company, and our responsibility is to express our opinion on the non-consolidated financial statements and the accompanying detailed statements from anindependent position.

We conducted our audit in accordance with the auditing standards generally accepted in Japan. Those auditing standards require that we obtain reasonable assurance that there are no material false reprsentationsin the non-consolidated financial statements and the accompanying detailed statements. The audit is conducted on a test basis and includes the examination of representations in the non-consolidated financialstatements and the accompanying detailed statements as a whole, including the examination of the accounting principles adopted by the management and the method of application thereof and the evaluationof the estimate by the management. We have determined that, as a result of the audit, we have obtained areasonable basis for giving an opinion.

We confirm that the non-consolidated financial statements and the accompanying detailed statementsreferred to above fairly represent, in all material respects, the status of assets and earnings for the period, forwhich the non-consolidated financial statements and the accompanying detailed statements were prepared,in conformity with the accounting standards generally accepted in Japan.

Our firm or we in charge have no financial or other interest in the Companyrequired to be stated by the provisions of the Certified Public Accountants Law.


3.Summary of Financial Results (March 31)

Sales(Millions of yen)

Operating Profit(Millions of yen)

Ordinary Profit(profit before extraordinary items)(Millions of yen)

Net Profit(Millions of yen)

Earnings per Share(Yen)

Net Assets(Millions of yen)

¥357,9356,3107,2093,602

409.4239,534

2009¥364,486

5,7446,5823,623

411.7736,949

2008Millions of yen

2010 2010

Thousands ofU.S. dollars

¥ 316,8235,8486,7873,377

383.7742,635

$ 3,405,23462,85472,94736,296

4.12458,243

SalesOperating profitOrdinary profitNet profitEarnings per share (yen/U.S. dollars)Net assets


Sales by Division


¥ 176,9091,3955,362

32,6589,7384,399

751114,870

3,0524,978-296

45,69036,214

32116,2211,4332,866

463464

13,47189675

2,23933

409465946383

7,2361,6131,534

33820116

1,584894141

1,527-1,029

¥ 222,600

March 31,2009

Millions of yenMarch 31,

2010March 31,

2010


¥ 181,3241,2724,258

37,91611,1112,792

952117,154

2,4123,682-228

44,79835,131

23615,3301,3202,542

317465

13,681781455

2,27818

409986635228

7,3872,0041,534

2882082

1,579663288

1,202-817

¥ 226,123

$ 1,948,88213,67145,765

407,523119,42130,00810,232

1,259,17825,92439,574-2,450

481,491377,590

2,536164,76714,18727,3213,4074,997

147,0448,3944,890

24,484193

4,39510,5976,8252,450

79,39521,53916,487

3008,813

88116,9717,1253,095

12,919-8,781

$ 2,430,384

ASSETSCurrent assets:

Cash and bank depositsNotes receivable-----tradeAccounts receivable-----tradeLease receivablesInventoriesInstallment investment assetsLease investment assetsDeferred tax assetsOther current assetsLess: allowance for doubtful accounts

Fixed assets:Property and equipment:

Lease assetsBuildingsStructuresMachinery & equipmentVehiclesTools, furniture and fixturesLandassets leased to othersConstruction in progress

Intangible fixed assets:Lease assetsLeaseholdSoftwareGoodwillOthers

Investments and other assets:Investment securitiesInvestments in subsidiaries’ stockInvestments in capital other than stockInvestments in subsidiaries’ capital other than stockLong-term loans receivableLong-term prepaid expensesLong-term depositsDeferred tax assetsOther investmentsLess: allowance for doubtful accounts

Total assets

4. Balance Sheet

¥ 111,1217,150

36,933152

39,91011,7001,4007,272

362,0072,830

411,686

71,94466,406

730220

2,8591,154

135438

¥ 183,065

4,0003838

1,000182

29,7624,020

33,96534,965

-039,002

5310

53139,534

¥ 222,600

March 31,2009

Millions of yenMarch 31,

2010March 31,

2010


¥ 106,7185,286

38,495120

40,9097,000

6756,0242,234

7402,826

432,360

76,76971,996

54155

2,5031,617

100341

¥ 183,488

4,0003838

1,000172

32,7623,879

36,81437,814

-041,851

7820

78342,635

¥ 226,123

$ 1,147,01256,814

413,7461,289

439,69275,2367,254

64,74624,0117,953

30,374462

25,365

825,118773,817

5801,665

26,90217,379

1,0743,665

$ 1,972,141

42,992408408

10,7481,848

352,12841,691

395,679406,427

-0449,817

8,4040

8,415458,243

$ 2,430,384


LIABILITIESShort-term liabilities:

Notes payable-----tradeAccounts payable-----tradeLease obligationsShort-term loansCommercial paperDebt for transfer of accounts receivableAccounts payable-----otherIncome taxes payableAdvance receiptsAccrued bonusesAccrued bonuses to officersOther current liabilities

Long-term liabilities:Long-term loansLong-term debt for transfer of accounts receivableLong-term lease obligationsLong-term advance receiptsRetirement benefit reserveRetirement benefit reserve for directorsand corporate auditors

Other long-term liabilitiesTotal liabilities

NET ASSETSCommon stock

Capital reserveTotal capital surplus

Earned surplus reserveReserve for tax deferment on replacement of assetsGeneral reserveRetained earnings brought forward

Other retained earningsTotal retained earningsTreasury stockTotal shareholders’ equityNet unrealized gains(losses) on securitiesNet deferred profits(losses) on hedges

Difference of appreciation and conversionTotal net assets

Total liabilities and net assets

5. Income Statement


¥ 357,935

321,153

1,136

35,645

(＋) 47

35,693

29,383

6,310

1,407

86

1,320

507

344

163

7,209

26

7

19

455

36

282

-

136

6,781

1,294

1,884

¥ 3,602

Year endedMarch 31, 2009

Millions of yenYear ended

March 31, 2010Year ended

March 31, 2010


¥ 316,823

282,641

1,118

33,062

(＋) 41

33,104

27,255

5,848

1,381

63

1,317

443

358

84

6,787

82

8

73

409

33

126

207

41

6,459

2,763

319

¥ 3,377

$ 3,405,234

3,037,843

12,016

355,352

440

355,803

292,938

62,854

14,843

677

14,155

4,761

3,847

902

72,947

881

85

784

4,395

354

1,354

2,224

440

69,421

29,696

3,428

$ 36,296

Sales

Cost of sales

Cost of capital

Net

Net deferred gain on installment sales

Gross profit

Selling, general and administrative expenses

Operating profit

Non-operating income:

Interest earned and dividend income

Other

Non-operating expenses:

Interest expenses

Other

Ordinary profit (profit before extraordinary items)

Extraordinary income:

Proceeds from sales of fixed assets

Others extraordinary income

Extraordinary loss:

Loss on sale of fixed assets

Loss on disposal of fixed assets

Impairment loss

Other extraordinary loss

Profit before income taxes

Current income taxes

Deferred income taxes

Net profit

29,762＄319,883

3,000＄32,244

3,000＄32,244

32,762＄352,128


6. Nonconsolidated Statement of Changes In Net Assets

Shareholders’ equityRetained earningsCapital surplus

Capitalreserve

Commonstock

Earnedsurplusreserve

Other retained earnings

Millions of yen

Millions of yen

Retained earningsbrought forward

Generalreserve

Reserve for taxdeferment on

replacement ofassets

4,020＄43,207

-527＄-5,664

3,377＄36,296

9

＄96

-3,000＄-32,244

-141＄-1,515

3,879＄41,691

182＄1,956

-9

＄-96

-9＄-96

172＄1,848

1,000＄10,748

-

1,000＄10,748

38＄408

-

38＄408

4,000＄42,992

-

4,000＄42,992

Balance of March 31, 2009(Thousands of U.S. dollars )

Changes during the period:

Cash dividends(Thousands of U.S. dollars )

Net profit(Thousands of U.S. dollars )

Reversal of reserve for taxdeferment on replacement of assets(Thousands of U.S. dollars )

General reserve(Thousands of U.S. dollars )

Net changes of items otherthan shareholders’ equity

Total changes during the period(Thousands of U.S. dollars )


Shareholders’ equity

Net unrealizedgains(losses) on

securities

Net deferredprofits(losses)

on hedges

Total differenceof appreciationand conversion

Total net assetsTotalshareholders’

equity

Treasurystock

39,534＄424,914

-527＄-5,664

3,377＄36,296

-

-

251

＄2,697

3,100＄33,319

42,635＄458,243

531＄5,707

-

-

-

-

251

＄2,697

251＄2,697

783＄8,415

0＄0

0

＄0

0＄0

0＄0

531＄5,707

251

＄2,697

251＄2,697

782＄8,404

39,002＄419,196

-527＄-5,664

3,377＄36,296

-

-

-

2,849＄30,621

41,851＄449,817

-0＄-0

-

-0＄-0

Difference of appreciation and conversion


Changes during the period:

Cash dividends(Thousands of U.S. dollars )

Net profit(Thousands of U.S. dollars )

Reversal of reserve for taxdeferment on replacement of assets

General reserve

Net changes of items otherthan shareholders’ equity(Thousands of U.S. dollars )

Total changes during the period(Thousands of U.S. dollars )


Year ended March 31, 2010


7. Profile of the Company (As of March 31, 2010)

8. Overseas Offices (As of March 31, 2010)

NITTSU SHOJI CO., LTD.

Date of establishment: May 1964Number of shares issued: 8.8 millionPaid-in capital: ¥4.0 billionNumber of employees: 2,601Business establishments: 246 locations

NITTSU SHOJI U.S.A.,INC.

Head office:Chicago, U.S.A.

Branches:Los Angeles, Chicago, Troy

Date of establishment:March 1995

Lines of business:• Export/import

agent services• Sales of packaging

materials, direct-from-manufacturer delivery, and sales of gifts

• Export of packag-ing materials, con-

struction materials, food products, and general merchan-dise

• Intermediary servic-es for real estate rentals

DALIAN NITTSUCONTAINERMANUFACTURINGCO., LTD.

Location:Dalian Economic andTechnological Development Zone,China

Date of establishment:February 1991

Lines of business:• Manufacturing and

sales of shippingcontainers,roll boxes, and netpallets

NITTSU SHOJI (THAILAND) CO., LTD.

Location:Bam Pine, Thailand

Date of establishment:December 1996

Lines of business:• Packaging services• Export/import

agent services• Sales of packaging

materials• Warehousing

PT. NITTSU SHOJIINDONESIA

Location:Bekasi, Indonesia

Date of establishment:September 2003

Lines of business:• Packaging services• Export/import

agent services• Sales of packaging materials• Warehousing

NITTSU SHOJI (WU HAN) CO., LTD.

Location:Wuhan, Chaina

Date of establishment:April 2004

Lines of business:• Packaging and

business pertainingthereto

• Warehousing• Manufacturing and

sales of packagingmaterials

• Transportationmanagement

NITTSU SHOJI (H.K.)CO., LTD.

Location:Hong Kong, China

Date of establishment:August, 2004

Lines of business:• Import and export• Sales and purchas-

ing of merchandise• Packaging and

business incidentalthereto

• Total number of full-service branches: 9• Other branches: 33


9. Organization Chart (As of July 1, 2010)

General Shareholders,Meeting

Board of Auditors

Board of Directors

Board of Corporate Officers

President

Business Department

Management Department

Corporate Planning Department

Audit Department

General Merchandise Division

Tokyo LS CenterOgishima LS CenterUtsunomiya LS CenterNagoya LS CenterKobe LS CenterSayama LS CenterHamamatu LS CenterSuzuka LS CenterKyushu LS Center

Yokohama BranchChiba BranchSaitama BranchMaebashi BranchUtsunomiya BranchMito BranchKofu Branch

Shizuoka BranchGifu BranchMie BranchKanazawa BranchToyama Branch

Kyoto BranchKobe Branch

Okayama BranchYamaguchi Branch

Matsuyama Branch

Kitakyushu BranchSaga Kurume BranchNagasaki BranchKumamoto BranchKagoshima BranchMiyazaki Branch

Nagano Branch

Koriyama BranchMorioka BranchAomori BranchYamagata BranchAkita Branch

Hakodate BranchAsahikawa BranchKushiro BranchObihiro Branch

Liquefied Petroleum Gas Division

Real Estate Division

Business Planning Division

General Affairs Division

Personnel & IndustrialRelations Division

Legal Affairs & Compliance Division

Accounting Division

Information System Division

Corporate Planning Division

Audit Division

Distribution Equipment Division

Leasing Division

Insurance Division

Maintenance & ManufacturingDivision

Petroleum Division

LogisticsSupport Division

TokyoRegional Branch

NagoyaRegional Branch

OsakaRegional Branch

HiroshimaRegional Branch

TakamatsuRegional Branch

FukuokaRegional Branch

NiigataRegional Branch

SendaiRegional Branch

SapporoRegional Branch

Basis of the report

• This report is the English-language translation of the Japanese Business Report for the 63th fiscal term

and has been prepared for “the understanding of readers outside Japan”.

• U.S. dollar amounts in this report are translated from yen, for convenience only, at the rate of ¥ 93.04

to US$1.00.

Our marketing symbol-----“ALOZ”-----was created from the letters “A” to ”Z,” which suggest “all”or “all things” and the letters “LO,” which are the first two letters in the word “logistics.”ALOZ therefore is intended to convey the meaning that, although distribution andlogistics form the base of our Company’s activities, we examineall future possibilities for our operations and provide a broad range ofproducts and services.

We intend to use ALOZ as the banner of our Company’s image strategy towardthe market and the general public.

NITTSU SHOJI CO., LTD.Hamarikyu Parkside Place

6-10, Tsukiji 5-chomeChuo-ku, Tokyo 104-8406

Tel: 03-3549-8800http://www.nittsushoji.co.jp

printed in Japan

nittsu shoji report sales and earnings attainment. however, despite these efforts, sales revenue...

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