Thank you very much for your continued support of Mori Seiki.
We are pleased to present the investors' information for the Mori Seiki Group.

We manufacture machine tools, which are capital assets, and we are expanding our distribution throughout the world. It is a source of great satisfaction to us to be able to help our customers improve production efficiency and enhance quality and accuracy through the use of Mori Seiki machine tools.

The Mori Seiki Group promoted the medium-term management plan Mori-568PLAN, for the three-year period from FY 2005 to FY 2007. For every target set in the Mori-568PLAN, the required level of achievement was exceeded, producing excellent results.

For our first target, Mori-5 (attain a 5% share of the world market), we established the Strategic/Large Account Department and expanded the number of sales bases. As a result, we greatly exceeded our target by achieving consolidated sales of 202.3 billion yen, and a market share of 5.7%, assuming that the machine tool market is 3.5 trillion yen worldwide.

For our second target, Mori-6 (achieve a consolidated cost of sales ratio of 60%), we enforced strict cost control at the design stage, and shifted to the in-house manufacture of parts, as well as using more shared parts to reduce material costs. By establishing new/additional plants for in-house manufacture, and raising machine operating rates while reducing working hours, we have greatly exceeded our target, with a consolidated cost to sales ratio of 57.4%.

For our third target, Mori-8 (establish a system that produces a minimum of 800 machines per month), we promoted innovation in production, including a 27 billion yen investment in plant and equipment over the three years, cell production and the auto campsite system. As a result, we achieved monthly production of over 800 units for the first time in March 2007, and exceeded 830 units in March 2008.

Our new medium-term management plan, the PQR555, starts this year and is a three-year plan. Based on our vision of "First-class employees providing first-class products and services for first-class customers, with the aim of becoming Global One," we will strive to achieve three business targets: "Sustain growth," "Strengthen profit structure," and "Establish global management quality."

In order to sustain growth, we will seek to increase our consolidated sales so that they account for 15% of the industry’s total order value released from the Japan Machine Tool Builders’ Association. While maintaining stable growth in mature markets in Japan, the Americas, and Europe, we will strive to attain an annual growth rate of 25% in rapidly growing emerging markets. To achieve this, we will establish new technical centers, increase production capacity, and introduce new large machines.

To further strengthen the profit structure, we will also reduce both manufacturing costs and selling, general and administrative expenses, aiming to achieve a consolidated cost to sales ratio of 55%, and a selling, general and administrative expenses ratio not to exceed 25%. Aiming to establish global management quality, we will be committed to hiring excellent people and training employees so that they can work globally.

For quality, we will set a specific accuracy target for all models in order to pursue high-accuracy and high-efficiency machining, and to increase our customers’ satisfaction. As for risk management, we will strictly comply with regulations, promote health and safety practices, strengthen our security trade management system, and thoroughly implement internal control for the management system and financial reporting.

Our principle for profit appropriation will be that we will continue to invest in the development of pivotal new products and technologies as well as consolidating our production equipment. This will reinforce our competitive strength in the market, based on an overall judgment concerning our future business plan, business results, financial conditions, and other factors. For FY 2007, we issued an interim dividend of 25 yen and a full-year dividend of 50 yen, considering our business results and the economic situation. This full-year dividend of 50 yen will continue in FY 2008.

Mori Seiki will continue to strive for growth in the future, and we look forward to earning your continued confidence and support.

July 2008

Masahiko Mori

President Dr. Eng.