Welcome to the Hakuhodo DY Group website. Allow me to offer a review of Hakuhodo DY Group business performance in fiscal 2010, and to explain strategies and other initiatives currently undertaken by the Group.

I would first like to extend my sincere condolences to the individuals and families who have been affected by the Great East Japan Earthquake that struck on March 11, 2011.

I will also report to our stakeholders on the Hakuhodo DY Group’s performance during fiscal 2010, ended March 31, 2011, and on the initiatives we are undertaking for the future. During fiscal 2010, the trend of contraction seen in the advertising market since the 2008 global financial crisis bottomed out, and signs of a recovery gradually became clear. Customers’ marketing activities picked up, and the market gained greater momentum than in the previous year, driven by television spot advertising and Internet advertising. Nevertheless, the situation changed completely with the occurrence of the Great East Japan Earthquake. Subsequently, many customers reviewed their advertising plans, and canceled or postponed planned activities.

Boosted by a more active advertising market, during fiscal 2010 the Hakuhodo DY Group further refined its basic strategy of proposing comprehensive marketing solutions, with the aim of achieving concrete results as a united group in the three priority domains identified in the Medium-Term Business Plan. As a result, despite the impact of the earthquake at the end of the fiscal year, gross billings in fiscal 2010 grew for the first time in three years, with a 2.1% increase from the previous year, to ¥936.4 billion. Furthermore, with the entire Group working with a strong awareness of profitability, the gross margin reached a record high level, and with success in controlling SG&A expenses, operating income also rose for the first time in three years, with a ¥8.1 billion increase, to ¥14.2 billion. Although the net extraordinary loss grew as a result of the drop in equity prices in the wake of the earthquake, net income grew from the previous year, to ¥4.5 billion.

The earthquake has cast a dark cloud over the outlook for the Japanese economy, but I firmly believe that Japan will rise to the occasion and embark on a sure path to recovery. I therefore believe the social mission that has been given to advertising companies is to use communication to encourage sei-katsu-sha and use the strength of communication to create vitality in the Japanese economy. Given this situation, the Hakuhodo DY Group will work even harder, in partnership with our many customers, organizations, and media, to carry out our activities firmly rooted in the perspective of sei-katsu-sha.

With regard to returns to shareholders, our fundamental policy is to continuously maintain a stable dividend. For fiscal 2010, we have paid a full-year dividend of ¥70 per share, as initially planned. As an additional form of returns to shareholders, a share buyback was carried out in February 2011. We expect the adverse environment for the advertising market to continue through fiscal 2011, ending March 31, 2012, but we intend to maintain the dividend at ¥70 per share while comprehensively taking into account the operating environment and other developments going forward.

I thank all stakeholders for your support and ask for your continued understanding in the future.