At the end of April 2012, “K” Line announced its newly-revised medium-term management plan, “K” LINE Vision 100 : Bridge to the Future. With improvements in the business environment in both containership and dry bulk markets during fiscal year 2010, the former medium-term management plan, “K” LINE Vision 100 - New Challenges, was formulated in April 2011 and declared a strategic investment in growth areas to steer us toward sustainable growth as our main theme. However, the market swung in a direction that was opposite to “K” Line’s outlook. Although challenges were expected to some extent, a large increase in newbuildings has put pressure on the market, and freight rates have declined sharply in each of the sectors. The sudden change in the business environment resulting from the Great East Japan Earthquake and the flooding in Thailand, combined with the very strong yen and persistently high fuel oil prices, has had a significant impact on the business results of the “K” Line Group. Results have been unsatisfactory and substantial losses have been recorded.

Recognizing we were in extremely severe business environment, and to again overcome the difficult times and create a bridge to a stable growth strategy—in other words, a plan for a course of action that will open up future prospects for the “K” Line Group as it moves towards its 100th anniversary—“K” Line has now embarked on its “Bridge to the Future” plan, just one year after the “New Challenges” plan was released.

“Bridge to the Future” is aimed at constructing a system in which we can remain in the black even in market downturns. Particularly for containership business—which has posted significant deficits during fiscal year 2011—“K” Line is continuously carrying out business restructuring to strengthen its earning capacity, and intends, without fail, to build a path to profitability. Furthermore, I feel that the strengthening of the business to build stable earnings and profitability during the current period is not just a target—it is also our mission.

At the Ordinary General Meeting of Shareholders on June 26, 2012, the shareholders expressed their criticism of the disappointing results, but they also provided words of encouragement for the future. We are determined to take those words as a mirror through which to see ourselves, and to also use them as a source of strength. The “K” Line Group, with the assistance of all its stakeholders, promises to do its utmost in building its bridge to the future, and looks forward to receiving your continuing and increased support and encouragement in that endeavor.