Firstly, I would like to express my heartfelt sympathy for all of those affected by the Great East Japan Earthquake disaster.

Shareholders have expressed concern because the Group has many facilities in the Tohoku (northeastern) and Kanto (Tokyo) areas that were damaged in the disaster. I am glad to report that we have resumed operations at Kashima Oil Refinery and all plants of the Metals business, and bolstered our emergency response measures, in a recovery drive covering all facilities of the Group. We are making an all-out effort to restart production at the Sendai Refinery in March 2012.

In May 2010, the Group launched its Medium-Term Management Plan (FY 2010-12), under which we aim to increase overall Group corporate value by quickly completing an overhaul of the Petroleum Refining and Marketing business by harnessing across-the-board synergies and rigorously cutting costs, and by focusing corporate resources on growth areas that can be expected to yield higher earnings.

Despite the lingering impact of the disaster in the second quarter of fiscal 2011, and the difficulty of business environment we face due to the soaring yen, we are steadily implementing various policies under the current management plan, and have increased earnings at all three core businesses more or less as planned. As result, underlying consolidated ordinary income increased ¥13.3 billion year-on-year to ¥163.9 billion, stripping out inventory valuation gains arising from increased crude oil prices and other factors. In focusing corporate resources on growth areas, we have developed our overseas operations in the Petroleum Refining and Marketing business chiefly in Asia, in the areas of chemicals and lubricating oils. In the Oil and Gas Exploration and Production business, exploration and development activities have aimed at maintaining or increasing production levels. In the Metals business, we continued development of the Caserones Copper and Molybdenum Deposit in Chile.

We have decided to increase the dividend by \0.50 year-on-year to \8.00 per share for the interim period.

By steadily taking suitable measures to deal with a new wave of change that we anticipate in our business environment, the Group will continue to develop its vision of being a globally leading integrated energy, resources and materials business group. I would like to thank all our shareholders for their understanding and support in this endeavor.

December 2011