NITTSU SHOJI REPORT. (April 1,2015-March 31,2016)

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1 2016 NITTSU SHOJI REPORT (April 1,2015-March 31,2016)

2 Dear customers, On behalf of Nittsu Shoji, I would like to express a heartfelt thank you to everyone who has given his or her support to our company activity. Our Company was launched in 1964 as Nittsu Shoji through the integration of operations in trading, insurance agency, automobile maintenance, and automobile sales under the management of Nippon Express. Going through various changes, Nittsu Shoji has since developed into a core member of Nippon Express group. Today, Nittsu Shoji has 8 business divisions with 207 operating sites in Japan and with 13 operating sites in overseas countries, aiming at further growth as a multi-function composite trading company. Yasuaki Nii President Nittsu Shoji Co.,Ltd. 1

3 1. Summary of Financial Results (March 31) Sales (Millions of yen) 450, , , , , , , ,000 50,000 Operating income (Millions of yen) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Ordinary income (Millions of yen) 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, Net income (Millions of yen) 7,000 Earnings per Share (Yen) 800 Net Assets (Millions of yen) 70,000 6,000 5,000 4,000 3,000 2,000 1, ,000 50,000 40,000 30,000 20,000 10, Thousands of Millions of yen U.S. dollars Sales 407, , ,716 $ 3,209,832 Operating income 5,250 6,688 6,346 56,313 Ordinary income 6,932 8,505 8,211 72,863 Net income 3,839 4,571 6,240 55,373 Earnings per share (yen/u.s. dollars) Net assets 58,240 62,775 67, ,759 Stated amounts are rounded down to full units. Nittsu Shoji Co.,Ltd. 2

4 Sales by Division Real Estate and others 0.5% Global Procurement LP Gas Petroleum Industrial Equipment Maintenance & Manufacturing 50.8% 4.2% 8.9% 5.2 % Total 407,635 million 5.6% 4.9% 15.0% 4.1 % Logistics Support General Merchandise Distribution Equipment Leasing 0.8% Insurance Real Estate and others 0.7% Global Procurement LP Gas Petroleum Industrial Equipment Maintenance & Manufacturing 49.3% 4.8% 7.8% 5.7 % Total 410,616 million 6.3% 4.7% 15.4% 4.5 % Logistics Support General Merchandise Distribution Equipment Leasing 0.8% Insurance Global Procurement 17,614 million 4.9% LP Gas 25,920 million 7.2% Petroleum 155,912 million 43.1% Industrial Equipment Maintenance & Manufacturing 20,782 million 5.7% others 2,182 million 0.5% Total 361,716 million Logistics Support 21,670 million 6.0% General Merchandise 23,124 million 6.4% Distribution Equipment 27,163 million 7.5% Leasing 63,860 million 17.7% Insurance 3,486 million 1.0% 2016 Nittsu Shoji Co.,Ltd. 3

5 2. Financial Statements (English translation of the financial statements for the year ended March 31, 2016 pursuant to Article 435, Section 2 of the Companies Act of Japan) ⑴Balance Sheet Thousands of Millions of yen U.S. dollars ASSETS March 31, 2015 March 31, 2016 March 31, 2016 Current assets: 212, ,707 $ 1,852,045 Cash and deposits 2,989 2,138 18,972 Notes receivable-----trade 3,598 4,209 37,350 Accounts receivable-----trade 55,318 47, ,060 Lease receivables 9,145 9,408 83,485 Inventories 2,786 3,161 28,050 Installment investment assets 2,210 2,189 19,424 Lease investment assets 128, ,499 1,175,783 Deferred tax assets ,794 Other 7,653 7,246 64,300 Less: allowance for doubtful accounts ,212 Noncurrent assets 52,658 54, ,603 Property and equipment: 39,984 41, ,113 Buildings 17,345 17, ,565 Structures 1,102 1,076 9,548 Machinery and equipment 2,013 2,030 18,014 Vehicles ,522 Tools, furniture and fixtures ,753 Land 17,428 18, ,848 Assets for rent 1,052 1,407 12,485 Other ,357 Intangible assets 1,650 1,792 15,902 Leasehold right ,815 Software ,637 Other ,439 Investments and other assets: 11,023 11, ,579 Investment securities 2,922 2,466 21,883 Stocks of subsidiaries and affiliates 3,275 5,384 47,777 Investments in capital Investments in capital of subsidiaries and affiliates ,203 Long-term loans receivable 1, Long-term prepaid expenses 2, ,898 Guarantee deposits ,993 Other ,856 Less: allowance for doubtful accounts ,529 Total assets 265, ,317 $ 2,336,649 Nittsu Shoji Co.,Ltd. 4

6 Thousands of Millions of yen U.S. dollars LIABILITIES March 31, 2015 March 31, 2016 March 31, 2016 Current liabilities 120, ,118 $ 1,003,798 Notes payable-----trade 5,720 6,142 54,503 Accounts payable-----trade 52,208 45, ,336 Lease obligations Short term loans payable 4,991 4,420 39,222 Current portion of long-term loans payable 40,030 43, ,204 Accounts payable-----other 10,042 7,935 70,414 Income taxes payable 2, ,385 Advances received ,507 Provision for bonuses 2,726 2,594 23,018 Provision for directors' bonuses Asset retirement obligations 1 - Other 2,024 1,405 12,467 Noncurrent liabilities 82,073 82, ,082 Long-term loans payable 77,883 77, ,161 Long-term lease obligations Long-term deposits received 1,413 1,515 13,443 Provision for retirement benefits 1,434 1,505 13,355 Provision for directors' retirement benefits Deferred tax liabilities ,410 Asset retirement obligations ,439 Other Total liabilities 202, ,392 $ 1,733,889 NET ASSETS Common stock 4,000 4,000 35,495 Legal capital surplus Total capital surplus Legal retained earnings 1,000 1,000 8,873 Reserve for special depreciation Reserve for reduction entry of replaced property 1,402 1,789 15,875 General reserve 49,262 53, ,641 Retained earnings brought forward 5,531 6,602 58,585 Other retained earnings 56,227 61, ,306 Total retained earnings 57,227 62, ,180 Total shareholders equity 61,265 66, ,013 Valuation difference on available-for-sale securities 1,508 1,226 10,879 Deferred gains or losses on hedges Total valuation and translation adjustments 1,509 1,211 10,746 Total net assets 62,775 67, ,759 Total liabilities and net assets 265, ,317 $ 2,336,649 Nittsu Shoji Co.,Ltd. 5

7 ⑵Income Statement Millions of yen Year ended Year ended March,31, 2015 March,31, 2016 Thousands of U.S. dollars Year ended March,31, 2016 Sales 410, ,716 $ 3,209,832 Cost of sales 377, ,297 2,922,149 Net 33,248 32, ,683 Net deferred gain on installment sales (+) 0 (+) 0 0 Gross profit 33,249 32, ,691 Selling, general and administrative expenses 26,560 26, ,369 Operating income 6,688 6,346 56,313 Non-operating income: 2,097 2,260 20,055 Interest and dividends income ,226 Other 1,937 1,670 14,819 Non-operating expenses: ,505 Interest expenses ,544 Other ,952 Ordinary income 8, ,863 Extraordinary income: 32 1,457 12,929 Gain on sales of noncurrent assets ,951 Gain on extinguishment of tie-in shares ,933 Other Extraordinary loss: ,008 Loss on sales of noncurrent assets Loss on retirement of noncurrent assets ,047 Loss on valuation of stocks of subsidiaries and affiliates Loss on valuation of investments in capital of subsidiaries and affiliates Impairment Loss ,180 Other Income before income taxes 7,794 9,330 82,793 Income taxes-current 3,455 2,618 23,231 Income taxes-deferred ,179 Net Income 4,571 6,240 $ 55,373 Nittsu Shoji Co.,Ltd. 6

8 Balance at April 1,2015 (Thousands of U.S. dollars) Changes during the period: Cash dividends Net income for the period ⑶Nonconsolidated Statement of Changes In Net Assets Reversal of special depreciation reserve Provision of reserve for reduction entry of replaced property Reversal of reserve for reduction entry of replaced property Increase in reserve fund due to change of tax rate General reserve Net changes of items other than shareholders equity Total changes during the period Balance as of March 31,2016 Common stock 4,000 $35,495 4,000 $35,495 Capital surplus Legal capital surplus 38 $337 Total capital surplus 38 $337 Legal retained earnings Millions of yen Shareholders equity Retained earnings Other retained earnings 1,000 $8,873 Reserve for special depreciation 31 $275 Reserve for reduction entry of replaced property 1,402 $12,441 General reserve 49,262 $437,146 Retained earnings brought forward 5,531 $49, $-7,019-6,240 $55, $ $3, $-88-0 $0 34 $301-4,000 $35, $ $ $337 1,000 $8, $ $3,425 1,789 $15,875 4,000 $35,495 53,262 $472, $ $-3, $88-35 $-310-4,000 $-35,495 1,071 $9,503 6,602 $58,585 Balance at April 1,2015 (Thousands of U.S. dollars) Changes during the period: Cash dividends Net income for the period Reversal of special depreciation reserve Provision of reserve for reduction entry of replaced property Reversal of reserve for reduction entry of replaced property Increase in reserve fund due to change of tax rate General reserve Net changes of items other than shareholders equity Total changes during the period Balance as of March 31,2016 Shareholders equity Total retained earnings 57,227 $507, $-7,019 6,240 $55,373 5,448 $48,345 62,676 $556,180 Total shareholders equity 61,265 $543, $-7,019 6,240 $55,373 Valuation and translation adjustments Valuation difference on available-for-sale securities 1,508 $13,381 Deferred gains or losses on hedges 1 $8 Total valuation and translation adjustments 1,509 $13,390 Millions of yen Total net assets 62,775 $557, $-7,019-6,240 $55, $-2,493 5,448 $48,345 66,714 $592, $-2,493 1,226 $10, $ $ $ $-2, $-2,644 1,211 $10, $-2,644 5,149 $45,691 67,925 $602,759 Nittsu Shoji Co.,Ltd. 7

9 For Translation Purposes Only Independent Auditor s Report The Board of Directors NITTSU SHOJI Co.,Ltd. May 16, 2016 Ernst & Young ShinNihon LLC Sumio Ishikawa Certified Public Accountant Designated and Engagement Partner Tokuro Onohara Certified Public Accountant Designated and Engagement Partner Pursuant to Article 436, Section 2, Paragraph 1 of the Companies Act, we have audited the accompanying financial statements, which comprise the balance sheet, the statement of income, the statement of changes in net assets, the notes to the financial statements and the related supplementary schedules of NITTSU SHOJI Co., Ltd. (the Company ) applicable to the 69th fiscal year from April 1, 2015 through March 31, Management s Responsibility for the Financial Statements and the Related Supplementary Schedules Management is responsible for the preparation and fair presentation of these financial statements and the related supplementary schedules in accordance with accounting principles generally accepted in Japan, and for designing and operating such internal control as management determines is necessary to enable the preparation and fair presentation of the financial statements and the related supplementary schedules that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements and the related supplementary schedules based on our audit. We conducted our audit in accordance with auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the related supplementary schedules are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the related supplementary schedules. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements and the related supplementary schedules, whether due to fraud or error. The purpose of an audit of the financial statements is not to express an opinion on the effectiveness of the entity s internal control, but in making these risk assessments the auditor considers internal controls relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements and the related supplementary schedules. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements and the related supplementary schedules referred to above present fairly, in all material respects, the financial position and results of operations of NITTSU SHOJI Co., Ltd. applicable to the 69th fiscal year ended March 31, 2016 in conformity with accounting principles generally accepted in Japan. Conflicts of Interest We have no interest in the Company which should be disclosed in compliance with the Certified Public Accountants Act. Nittsu Shoji Co.,Ltd. 8

10 3. Profile of the Company (As of June 1, 2016) Sapporo NITTSU SHOJI CO., LTD. Date of establishment: May 1964 Number of shares issued: 8,799,823 Paid-in capital: 4.0 billion Number of employees: 2,328 Business establishments: 207 locations Network in Japan Hiroshima Fukuoka Sendai Total number of full-service branches : 7 Sales Centers : 46 Osaka Nagoya Head Office Tokyo Logistics Support Division 4. Overseas Offices (As of June 1, 2016) NITTSU SHOJI U.S.A., INC. Chicago, USA March 1995 Trading support services Sales of packing materials, drop shipment, gift items Export of packing materials, building materials, food, and miscellaneous goods Real estate brokerage NITTSU SHOJI (THAILAND) CO., LTD. Ayutthaya, Thailand Office: Pinthong LS center Chonburi Provice December 1996 Packaging service Import & export agency services Sales of packing materials Warehousing & storage services PT. NITTSU SHOJI INDONESIA Bekasi, Indonesia September 2003 Import & export Packaging and related services Warehousing services Sales of packing materials and packing containers NITTSU SHOJI (WUHAN) CO., LTD. Wuhan Economic & Technological Development Zone, China Office: Guangzhou April 2004 Packaging & related services Warehousing services Sales of packing materials and packing containers Transportation management NITTSU SHOJI (H.K.) CO., LTD. Hong Kong Special Administrative Region, China August 2004 Import & export agency services Purchasing and sales of merchandise Wholesale Packaging and related services NITTSU SHOJI (SHANGHAI) TRADING CO., LTD. Shanghai, China March 2011 Mail order sales operations Merchandise sales operations (Packaging materials, materials handling equipment, trailers, containers, different types of pallets) Export and import trade business NITTSU SHOJI INDIA PRIVATE LIMITED Haryana, India September 2012 Packing, product production, logistics, and warehousing Automotive parts assembly Sales of packing materials. NITTSU SHOJI LEASING (THAILAND) CO., LTD. Bangkok, Thailand February 2013 Leasing and rental business Installment purchase arrangement Other related services AZL (THAILAND) CO.,LTD. Bangkok,Thailand February 2014 Packaging service Import & export agency services Sales of packing materials NITTSU SHOJI (MYANMAR) CO., LTD. Yangon, Myanmar May 2014 Consultant and investigation about logistics NITTSU SHOJI (MALAYSIA) SDN. BHD. NITTSU SHOJI (SINGAPORE) PTE. LTD. NITTSU SHOJI MEXICO S.A.DE C.V. Head office: Irapuato, Mexico January 2015 Packaging & related services Ware housing services Sales of packing materials and packing containers Import & export agency services Head office: Johor, Malaysia June 2014 Import & export agency services Purchasing & sales of merchandise Packing & related services Singapore November 2014 Import & export trade business Global procurement Nittsu Shoji Co.,Ltd. 9

11 5. Organization Chart (As of June 1, 2016) General Shareholders' Meeting Board of Auditors Board of Directors Board of Corporate Officers President Operation Division Logistics Support Division Tokyo LS Center Ogishima LS Center Utsunomiya LS Center Nagoya LS Center Kobe LS Center Sayama LS Center Suzuka LS Center Kyushu LS Center Physlcal Distribution Merchandise & Machinery Division Leasing Division Tokyo Yokohama Sales Center Chiba Sales Center Funabashi Sales Center Saitama Sales Center Maebashi Sales Center Utsunomiya Sales Center Ibaraki Sales Center Kofu Sales Center Nagano Sales Center Niigata Sales Center Business Department Insurance Division Industrial Equipment Maintenance & Manufacturing Division Petroleum Division Liquefied Petroleum Gas Division Nagoya Gifu Sales Center Mie Sales Center Sizuoka Sales Center Kanazawa Sales Center Fukui Sales Center Toyama Sales Center Business Planning Division Regional Osaka Wakayama Sales Center Kyoto Sales Center Kobe Sales Center Global Department Global Business Division Global Administration Division General Affairs Division Personnel & Industrial Relations Division Hiroshima Fukuyama Sales Center Sanin Sales Center Okayama Sales Center Yamaguchi Sales Center Takamatsu Sales Center Matsuyama Sales Center Tokushima Sales Center Kochi Sales Center Management Department Corporate Planning Department Audit Department Legal Affairs & Compliance Division Accounting Division Information System Division Corporate Planning Division Audit Division Fukuoka Sendai Kitakyushu Sales Center Sagakurume Sales Center Nagasaki Sales Center Oita Sales Center Kumamoto Sales Center Kagoshima Sales Center Miyazaki Sales Center Koriyama Sales Center Fushima Sales Center Morioka Sales Center Aomori Sales Center Yamagata Sales Center Akita Sales Center Nittsu Shoji Co.,Ltd. 10 Sapporo Tomakomai Sales Center Hakodate Sales Center Asahikawa Sales Center Kitami Sales Center Obihiro Sales Center Kushiro Sales Center

12 Basis of the report This report is the English-language translation of the Japanese Announecement of financial result for the 69th fiscal year 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 to US$1.00. Stated amounts are rounded down to full units. 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 and logistics form the base of our Company s activities, we examine all future possibilities for our operations and provide a broad range of products and services. We intend to use ALOZ as the banner of our Company s image strategy toward the market and the general public. NITTSU SHOJI CO., LTD , Kaigan 1-chome Minato-ku, Tokyo Tel : printed in Japan Nittsu Shoji Co.,Ltd. 11

NITTSU SHOJI REPORT. (April 1, 2005 March 31, 2006)

NITTSU SHOJI REPORT. (April 1, 2005 March 31, 2006) 2006 NITTSU SHOJI REPORT (April 1, 2005 March 31, 2006) 1. To Our Shareholders On March 31, 2006, Nittsu Shoji Co., Ltd., marked the conclusion of its 59th fiscal term. I would like to summarize the Company's