To all of our stockholders and investors
I would like to begin this report by expressing our sincere appreciation
to our stockholders and investors for their continuing support.

Since its earliest days, Iwatani has based its activities on the philosophy of its founder Naoji Iwatani: "Become a person needed by society, as those needed by society can prosper." This idea has guided our continuing efforts to contribute to society by creating new value to meet the needs of the world and our customers.

Our energy business centers on liquefied petroleum gas (LPG). In 1953, we became the first company to supply LPG in Japan on a significant scale, and have established a number of major facilities, including the Sakai LPG Terminal (storage capacity: 80,000 tons) in 1980 and Kashima LPG Joint Stockpiling Co., Ltd. (storage capacity: 225,000 tons) in 1994. At the downstream end of the market, we have over 100 distribution centers through which we supply LPG to 3.1 million households throughout Japan. For over half a century, we have led the industry as a pioneer in the LPG market.

Another of our business operations that dates back to the establishment of Iwatani is industrial gases. While operating distribution centers for industrial gases throughout Japan, we operate nine air separation plants in Japan and two overseas. The operation of the air separation plants is founded on our history of entering the market as a manufacturer, which began with the construction of large-scale separation plants for oxygen, nitrogen and argon in Sakai City in 1977.

In April 2006, Hydroedge Co., Ltd. began to operate an integrated plant that uses LNG cryogenic power to produce air separation gases, including oxygen, nitrogen and argon, as well as liquefied hydrogen. Located in Sakai City, Osaka Prefecture, this plant is the first of its type in Japan. With its establishment, we have further strengthened our capacity to meet the expanding demand for air separation gases, while also gaining a lead over our competitors in the development of infrastructure for supplying liquefied hydrogen.

In July 2009, we began to operate the first liquefied hydrogen plant in eastern Japan in Chiba Prefecture. We will continue to strive for developing systems which enables stable mass-supply of liquefied hydrogen. Furthermore, as a leading company in the field of hydrogen in Japan, we are strongly committed to exploring approaches aimed at realizing a future hydrogen-driven society.

As we now marked our 80th anniversary on May 5, 2010, we have formulated our Medium-term Management Plan (PLAN12) which covers three years from FY2010 to FY2012. Management goals of PLAN12 are “to enhance our capacity for sustained growth” and “to strengthen our financial standing”. We have set specific financial targets for FY2012, ending on March 31, 2013, which are to achieve ordinary income of \18,000 million, ROA of at least 4.5%, interest-bearing liabilities of \150,000 million or less, and ratio of interest-bearing debt to total assets of 40% or less. We focus on making an all-out effort within our Group to achieve these goals. Overall, to pursue our aim to become a company needed by society, we will keep our best effort to improve our corporate value.

We look forward to the continued support of our stockholders and investors.

President