This is my first letter to Hanwa’s shareholders and investors following my appointment as president on April 1, 2011.

Enormous changes are taking place in the business environments for the steel and other industries. The need for massive restoration and rebuilding activities following Japan’s devastating earthquake further underscores the importance of 2011. Clearly, I am assuming the considerable responsibility of serving as president of Hanwa at a very challenging time. I am determined to make Hanwa an even stronger company by accurately targeting the demands of today’s markets and becoming even more driven by the needs of our customers. Adopting this stance is the best way to ensure our success during this period of momentous changes.

The business environment improved in the fiscal year that ended in March 2011 due to a broad-based recovery in the economy. The result was a 25.0% increase in consolidated net sales to ¥1,396.1 billion, a 21.3% increase in operating income to ¥13.8 billion and a 43.3% increase in ordinary income to ¥13.4 billion. However, net income fell 50.0% to ¥5.7 billion mainly because of valuation losses on investment securities and an increase in income taxes following the drop in the previous fiscal year.

Shareholders approved a resolution at the 64th Ordinary General Meeting of Shareholders held on June 29, 2011 to pay a year-end dividend of ¥6 per share. With the interim dividend of ¥6 that has already been paid, this results in a dividend of ¥12 per share for the fiscal year that ended in March 2011.

Hanwa started a three-year medium-term business plan in fiscal 2010 with the goal of “adapting to rapid changes in the operating environment and building a highly innovative and powerful base of operations and profit structure.” Reaching the goals of this plan will require accurately meeting the needs of customers in Japan and overseas. We are also aggressively pursuing new business opportunities. I plan to execute business strategies under our medium-term plan with even more vigor.

Maintaining a sound operating framework is another priority. Hanwa will retain a resolute commitment to compliance programs and to our responsibilities as a corporate citizen through CSR activities. To fulfill our obligations to shareholders, we will upgrade our corporate governance and maintain an effective system of internal controls.

By focusing on our strategic objectives, I believe that we can achieve sustained growth of the Hanwa Group and increase the group’s corporate value while making a meaningful contribution to society.
I am firmly committed to doing what is needed to meet the expectations of shareholders and other investors. I ask for your support and understanding as Hanwa continues to take the actions that are required to achieve our objectives.