Medium-Term Business Plan IV (2008-2010)(PDF/285KB)

Medium-Term Business Plan IV20082010 Pursuit of Sustainable Growth May 15, 2008SHINWA KAIUN KAISHA, LTD.http://www.shinwaship.co.jp/1

IntroductionUnder the Medium-Term Business Plan III, we agreed on the slogan “Enhancementof the operating base for the next stage” as our business goal. Our profit levels hit anew record high with our equity capital as of the end of fiscal year 2007 having morethan doubled over the past three years due to the fact that, together with our effortsto overcome business challenges, we were able to enjoy the benefits of shipping marketgrowth in response to rapid economic development in emerging economies, which inturn resulted in unprecedented growth in transportation demand.Although the profit plan under the Medium-Term Business Plan IV has been draftedon the premise that the standing of the shipping market will gradually decrease, andadditionally takes into consideration the circumstances surrounding the appreciatedyen and soaring overhead costs, we will nevertheless aim to strengthen and expandour business infrastructure and achieve sustainable growth.The company will mark its 50th anniversary in February 2012, the year following thecompletion of this plan. We will make a concerted effort to achieve and advance theMedium-Term Business Plan IV so that we will be able to kick off the next half-centurywith confidence.2

Results of the Medium-Term Business Plan III (2005-2007)Profit Plan (on a consolidated basis) 3

Profit plan (on a non-consolidated basis) \ \ \ \ \ \ 4

Medium-Term Business Plan IV (2008-2010)Profit Plan 5

Business ChallengesStrengthening and expanding our operating baseDevelopment of competitive fleet30 vessels to be added during the 3 years from 2008 through 2010At the end of 2010: 105 vessels for overseas shipping and 85 vessels for coastal shipping; fleet of 190 vessels in total 40 vessels to be added from 2011 through 2015At the end of 2015: 120 vessels for overseas shipping and 90 vessels for coastalshipping; fleet of 210 vessels in totalMaintenance and expansion of commercial rights- Maintaining and expanding contacts for domestic and overseas steel makers,resource companies and electric power companies- Scaling up shipments between Asia, North America and South America- Expansion of dry bulk business in Asia and expand into India and Middle EastExploitation of new fields- Establishing a Overseas Business Project Office to promote exploitation of newfields- Entry to product carrier freight business- Developing cross trade business (including the Atlantic, India and Middle East)- Collecting information on M&A issues and studying feasibility6

Securing and educating qualified staff and increasing groupwidemanagement efficiency- Formulating a mid-and-long term manpower plan and re-examining the organization- Formulating and implementing a human resource development plan- Promoting integration of office worker and seafarers personnel management- Increasing the efficiency of the group-wide managementStrengthening ship management functions and promotingenvironmental conservation- Improvement of the ship management system- Securing and developing managerial personnel- Securing and developing crew personnel- Reinforcing management capability- Dealing with environmental issuesImproving our financial standing and enhancing managementtransparency- Enhancing equity capital and maintaining an adequate level of interest-bearing debt- Examining introduction of a tonnage-based tax system- Ensuring compliance and promotion of CSR activities7

Fleet Development Plan 8

Fleet Development Plan for overseas vessels (fixed cases only) 9

Trends and Targets of Consolidated Financial IndexFinancial index (consolidated) Equity capital / Interest-bearing debt (consolidated) 10

Dividend PolicyForecast ofbusiness performanceand revenuesInvestments invessels, etc.Level ofretained earningsDividend payoutPreviously, our basic dividend policy was to add a special dividendbased on business performance to the ordinary dividend of 6 yen. Fromfiscal year 2007, we changed the policy and made the dividend payoutratio approximately 20% (on a non-consolidated basis) to clarify thelinkage between business performance and dividends.March 2005 March 2006 March 2007 March 2008March 2009Dividend per share(annual)8 yen 8 yen 11 yen 16 yen 16 yen(Plan) (Forecast)Dividend payout 20.0% 22.4%21.2%(19.9%)(21.6%)11