The direct services between the Sanyo and the Kyushu Shinkansen lines, which began in March 2011, not only feature the appeal of greatly reduced travel times but also offer the benefit of riding in new, more-comfortable rolling stock. These pluses have won the services substantial praise from customers. Further, throughout the year, we worked in cooperation with local governments and travel companies to communicate the appeal of Kyushu and the West Japan area to people living in both of these regions. As a result of these efforts promoting travel between these two regions, the performance of the direct services was even more impressive than we had projected at the time of their launch. Meanwhile, Osaka Station City, which opened in May 2011, also saw a favorable reception. The complex features a diverse range of commercial facilities and a large dome ceiling covering the station platforms as well as various plazas and parks. In addition, JR-West Group and local businesses worked together to enhance the appeal of the surrounding Umeda District. Accordingly, Osaka Station City proved to be an appealing destination, and the total number of visitors up until March 31, 2012, was more than 120 million, including many people who came from outside of the immediate Kyoto-Osaka-Kobe area.

Initiatives for the Fiscal Year Ending March 31, 2013―Final Year of the Basic Safety Plan and the Medium-Term Management Plan

The fiscal year ending March 31, 2013, will be the final year of both the Basic Safety Plan and the JR-West Group's Medium-Term Management Plan 2008-2012, which were launched in the fiscal year ended March 31, 2009. The group-wide promotion of the Basic Safety Plan has already produced a steady decline in operational railway accidents, and we will work to add further depth and greater quality to our risk assessment efforts going forward. Striving to complete all the objectives laid out by the Basic Safety Plan, we will improve the safety of both the soft and hard elements of our operations, aiming to make the JR-West brand into a “brand of safety and reliability.”

The JR-West Group's Medium-Term Management Plan 2008-2012 was revised in October 2010. While the three pillars of management defined in this plan-measures to have ourselves accepted as acting with the best intentions by the victims of the (Fukuchiyama Line) train accident, measures to enhance safety, and furthering of reform-remained unchanged, the revision added three new strategies to the plan: coexistence with local communities, innovation by technology, and thinking and acting based on the field. By faithfully advancing these new strategies, we will strive to make our management foundation all the more concrete. At the same time, we will further expand on the two major projects launched last year through means such as increasing the number of direct services between the Sanyo and the Kyushu Shinkansen lines and bolstering the appeal of Osaka Station City. As both projects enter their second year, we will implement new initiatives based on the results achieved in their first year with the hopes of reaping even greater awards from their operation.

We also aim to ensure that the Company can continue to grow in a sustainable manner. To this end, we are developing a new risk management system that includes measures to respond to possible future electricity shortages and other energy crises, makes revisions to our business continuity plan reflecting upon the Great East Japan Earthquake, and promotes disaster prevention through both the soft and hard elements of our operations. We believe that this new system will allow us to establish a solid corporate foundation on which the JR-West Group can achieve sustainable growth.

We will use the advancement of these initiatives as an opportunity to confirm the results of the medium-term management plan and assess the appropriate future direction for the Company.

Marking our 25th Anniversary

In April 2012, JR-West marked its 25th anniversary since its founding. Our ability to celebrate this milestone is due to the support of all of our stakeholders. In the future, it is incredibly likely that our operating environment will become increasingly harsh due to the declining birthrate, aging population, and increased competition with rival transportation providers. Regardless, we will continue to work toward achieving our corporate mission of contributing to the invigoration of the West Japan area through our business activities centered on railways. Through this pursuit, we hope to earn the continued trust of our customers, the communities in which we operate, and greater society, and also realize improved corporate value into the medium- to long-term.

In closing, I would like to ask our shareholders and other investors for their continued support.

27 April 2012

Takayuki Sasaki
President, Representative Director, and Executive Officer