I would first like to offer my sincere condolences to all those who suffered from the Great East Japan Earthquake and express my hope for a swift restoration and revival of the area and its people.

While the world economy at the beginning of this current consolidated period showed signs of recovery supported by the growth in the emerging markets, this trend has been curtailed in the latter half of the same period by concerns over the destabilization of the European financial markets, the slowdown in the US economy, and the heightened political unrest in the Middle East.

Japan's economy in the current period initially experienced gradual recovery led by the maturing of the emerging market economies as well as the stimulus package of the Japanese government. In the latter half of the period, however, anxiety over corporate earnings arose from the relentless appreciation of the yen, the rise in the price of fuel, and the continued low consumer consumption levels resulting from the government economic policy, and this has prevented our economy from attaining true recovery.

Regarding Harima's consolidated performance in the current period, total sales were 41,494 million yens, or 7,999 million yens (23.9%) increase over the previous consolidated accounting year. Proactive measures taken to increase profit including cost cutting policies have resulted in improving profit. As result, operating profit was 2,980 million yens, or 1,573 million yens (117.9%) increase more than the same period last year. Ordinary profit was 2,765 million yens, or 1,168 million yens (73.2%) over last year's figure. And the net profit for the current period was 1,337 million yens, or 385 million yens (40.5%) increase over the last period.

In 2011 fiscal year, world economy is expected to register only minimal growth as higher fuel prices continue to hamper all recovery in the matured markets, however, this dampening will be moderated by the increased and continued expansion of the maturing emerging markets led by China.

While Japanese economy still suffers from floundering consumer consumption level resulting from the government economic stimulus policies, the rise in exports to the expanding emerging markets has fostered recovery. Amidst these economic conditions, Harima will continue to strive toward becoming the global leader in the field of pine chemicals by further deepening and maximizing the synergy between all the group companies.

Specifically, Harima will operate the rosin business purchased from Momentive Specialty Chemicals in January of this year as Lawter, Inc.. We strongly believe that the addition of Lawters will greatly enhance Harima's existing manufacture, enhance research and development, and marketing operations and lead to a greater development of our resin chemicals products business. The expected total sales at consolidated basis for fiscal 2011 will be 80,000 million yens, operating profit 3,800 million yens, ordinary profit 3,600 million yens, and the net profit 2,100 million yens.

We appreciate your patronage of our business and look forward to forging stronger relationship with all our business partners.

May 2011    President Yoshihiro Hasegawa