A Happy New Year! I hope you had a wonderful time with your family and friends during the holidays. On behalf of Kanefusa, I am very grateful for the kindness and support that you gave us last year.

Indeed 2011 was the year of natural disasters and political changes. We remember flood in Australia, tornado in the USA and the earthquake in New Zealand. Worst of all, in March, the Great East Japan earthquake occurred. The flood in Thailand is also fresh in our memory, which caused a big damage, too. We would like to send our deep sympathy and prayers to all the victims in the world.

2011 was also a year of democratic movement, as well seen in the socalled “The Arab Spring”. After the revolution in Tunisia, other long-term dictatorships collapsed in Egypt, Libya and other countries.

In Europe, a financial crisis in Greece and Italy led to changes in the government finally and this confusion might influence adversely the other countries, too. Under these influences, the yen reached a record high and the export business in Japan was seriously affected. Of course, Kanefusa was no exception. In the process of recovering from the enormous sag brought by the Lehman’s crisis, this yen’s sharp appreciation caused Kanefusa big exchange losses as evaluation loss of our foreign currency asset.

Even in this difficult situation, without lag we will continuously execute our global growth strategies delineated in our midterm management plan focusing on expansions of market shares mainly in Asia, where we expect a stable development. As we are in a period of great changes, this is the time for us to redefine how a leading company of this industry should be, and to deepen the understanding of the company policy symbolized as Kanefusa spirit and exercise it in our daily work.

Keeping the word “Each one of us is a professional” in our mind, we will work and proceed with pride and confidence.

Mr. Watanabe
President