To Our Shareholders

The Japanese economy slowed down significantly during fiscal 2011, with the global economy being affected by the sovereign debt crisis in Europe, and with exports to China and other emerging markets declining during the second half after having been relatively solid during the early part of the fiscal year. Although manufacturing activity generally recovered from the stagnant period following the Great East Japan Earthquake, Japan’s economic circumstances remained challenging, with corporate earnings suppressed by the persistent strength of the yen and high prices for feedstocks and fuel.

Consolidated net sales of Asahi Kasei Corp. and its consolidated subsidiaries and equity-method affiliates (the Asahi Kasei Group) increased by ¥17.3 billion (1.1%) to ¥1,573.2 billion with strong performance in the Homes segment. Operating income decreased by ¥18.7 billion (15.2%) to ¥104.3 billion, largely due to the effect of high feedstock costs and the strong yen in the Chemicals segment. Ordinary income decreased by ¥10.7 billion (9.0%) to ¥107.6 billion, and net income decreased by ¥4.5 billion (7.5%) to ¥55.8 billion.

Although overall performance declined, we raised our annual dividend for the fiscal year by ¥3 per share from previous year to ¥14 per share.

The Asahi Kasei Group is now advancing under a five-year strategic management initiative called “For Tomorrow 2015,” which we launched in April last year for completion in fiscal 2015. This initiative provides a clear focus that unifies our diverse operations on our Group Vision of providing new value for people by enabling living in health and comfort and harmony with the natural environment in accordance with our Group Slogan of “Creating for Tomorrow.” In order to achieve this, in addition to further accelerating the expansion of our world-leading businesses, we are creating new value for society by expanding our operations in fields related to the environment & energy, residential living, and health care. One notable advance was our April 2012 acquisition of ZOLL Medical Corporation, a major US manufacturer of critical care devices, and ZOLL is now a core operating company within the Asahi Kasei Group.

We will continue to strive for heightened corporate value through the achievement of further strategic advances under “For Tomorrow 2015.”

August 2012