I would like to express my heartfelt gratitude for your patronage and support to Kasai Kogyo
Group of companies.

In the auto industry we are working for, total domestic production drastically turned to shrink for the first time in 7 years to have recorded as low as 9.99 million cars in 2008, an 15.2% decrease from 2007 results, due to crunch of consumers mind. Overseas production by Japanese automakers in the calendar year of 2008 also decreased by 1.8% from 2007 to 11.65 million cars, because the environmental degradation of car sales finances pushed down further the demands of major countries.

Under such business environment, Kasai Group has not only pushed forward corporate structural reforms in order to establish a position as a leading car interior manufacturer on a global basis, but also strengthened development and engineering capabilities and pressed ahead for new business from potential customers both in domestic and overseas markets. Additionally, we have been working on cost improvement measures such as cost reduction by rationalization, restraint of plant and equipment investments, and optimization of the number of persons required for production.

Turning our attention to the auto industry, manufacturers will need to ensure that their management strategies are more focused on achieving a higher share in the global market and dealing with production localization under the situation of large reduction of car sales by the current recession of world in addition to the competition of technological support for ecology to realize low carbon society.

The Kasai Group has been attempting survival as an enterprise with a clear long-range vision
toward "growing into an excellent company" by formulating middle and long-term plans and taking various measures to establish its position as a leading manufacturer of interior car products in the global market.

Specifically, we have been carrying out the promotion of Kasai Production System(KPS) : Kasai production method and Kasai Innovating System(KIS) : Kasai super shortening development system from products design to die production which provides the support of shortening term for a vehicle development, technology development of lightweighting to serve fuel efficiency-saving and its proposal to customers, reinforcement of quality improvement and guarantee of quality in the global system, and the reinforcement of cost competitive power by total cost and reduction activity.

Overseas sales of the Group accounted for 53.5% of its total sales on a consolidated basis during the term of 2008 and this ratio is expected to continually increase. For the establishment of its management foundation, the Group will fortify to expand manufacturing and sales and develop human resources on a global level such as business and capital tie-up in ASEAN market.
In addition to breaking through these critical circumstances, we have been carrying out concrete
various measures to secure the profit.

I would like to ask all of our shareholders unchanging support and encouragement.

July 2009
Kuniyuki Watanabe
President