To all of our stakeholders, customers and employees,

At Nikko Asset Management, excellence is the driving force behind everything we do. Our goal is simple: to make more money for our customers while managing risk, and do it better than anybody else. Japan has a rapidly maturing population, which still holds more than half of its over ¥1,500 trillion worth of household assets in near-zero-interest deposits.¹ Strong independent asset management is critical to ensuring that the nation’s maturing citizens have the means to support themselves into their golden years. This is what we consider the noble mission of any asset management.

The results noted below are an example of what we have achieved through a variety of approaches. Thanks to our stakeholders, employees, distributors, institutional clients for pension business and retail/professional investors for our investment trusts, we continued to see excellent results.

• The ¥10 trillion AUM (Assets under Management) mark was one of our long-term goals since my appointment in 2004. We met that goal by the end of March 2006 and as of April 2007, our AUM exceeded ¥12 trillion. This is a big accomplishment for us, especially in our publicly offered investment trust (POIT) business, which has grown to ¥8 trillion and remains an area that we are strongly committed to expand even further.
• Our focus on global asset allocation supports customers as they build financial assets throughout their lives. In the area of product development, we have introduced phased approaches to build financial assets based on our “Three Pockets” asset building philosophy. For the first phase, we launched a fund to realize global multi-asset class investment. This was followed by the next phase, in which we introduced a fund to enable investors to enjoy the dramatic growth of China’s economy. For the third phase, we launched a fund that takes advantage of the opportunities presented by growth in the BRICs economies. And for the fourth stage, we announced funds offering further diversification of currencies and countries. We have established a customer-oriented system to respond to market conditions and needs by ensuring that our marketing and sales departments work in tandem with our product development department.
• We have achieved results in China, India and Singapore with an Asia strategy that focuses on future growth. Our strategic investment in a Chinese asset management company marked the first-ever such achievement by a Japanese asset management company. We have also taken the initiative to build the first asset management joint venture in India between a Japanese asset management company and an Indian financial services group.
• Over the past year, we have considerably strengthened our international capabilities. Our successes in this area in FY2007 include winning approximately several hundred billion yen in net new money for Japanese equities mandates from clients in the Europe/Middle East and North America regions.

For my part, I hope to continue contributing in any way I can to help Nikko Asset Management become a global leader.