We would like to express our deepest condolences for the victims of the Great East Japan Earthquake that took place on March 11, 2011.

In fiscal 2010, having recovered from the impact of the collapse of Lehman Brothers, Ahresty performed strongly before the Great East Japan Earthquake struck. As a result, despite the sharp drop in its production activities after the March 11 disaster, Ahresty recorded consolidated net sales of ¥99.0 billion. Production of die castings, Ahresty’s mainstay business, expanded both in Japan and overseas. The increase in overseas sales was particularly noteworthy. Overseas net sales from the die casting business accounted for 30% of the overall sales of Ahresty, rising from 23% for fiscal 2009. In fiscal 2012, overseas sales of die castings are likely to reach approximately 40% of overall sales, and I believe that this upward trend will continue in the future.

In response to a situation of declining domestic and rising overseas demand, Ahresty has been taking steps to optimize its production bases in Japan and strengthen its overseas presence.

As part of its efforts to optimize its operations in Japan, Ahresty decided to merge the Hamamatsu Plant and the Toyohashi Plant. It first merged organizations, and then executed a comprehensive physical amalgamation, commencing integrated operations as the Tokai Plant in April 2011. To concentrate its operating facilities in the Toyohashi area, Ahresty is now constructing plant buildings and transferring die casting machines, with the process expected to be complete around March 2013.

To strengthen overseas production bases, during the fiscal year ended March 2011 Ahresty bolstered production capacities by constructing and expanding plants as follows:

●Mexico: Expansion of the casting plant and the construction of a new die casting die plant

●China (Guangzhou): Construction of a new die casting die plant and the commencement of the second-term construction of the No. 2 die casting plant

●India: Expansion of the casting plant and the processing plant

Moreover, in addition to the production base in Guangzhou, Ahresty commenced die casting production in Hefei City, Anhui, in July 2011. The Hefei Plant will reinforce the supply capability of the Guangzhou facility, which alone cannot fully meet the rapidly growing demand of the Chinese market.

Global demand for automobiles is expected to exceed 95 million units in 2020. In step with this growth, demand for die castings is likely to increase rapidly, particularly in growth markets. However, the number of die casting manufacturers that have the capacity to supply large and sophisticated die casting products to major global consumption areas is extremely limited.

Under the three-year strategies that commenced from fiscal 2010, we have been focusing on five main pillars: (i) Quality-focused improvement of business platform for global leap forward; (ii) Creation of professional development environment and autonomous growth; (iii) Development of global business standards; (iv)Construction and operation of the administration system of overseas subsidiaries (v) Risk management. By developing the business foundations described above and strengthening its overseas bases, Ahresty aims to become a global partner that customers trust.

As we pursue this approach, we hope that we can continue to count on the support and understanding of our stakeholders.