The Lunar New Year's on February 18th this year. In Asian countries including China and Korea, 
this celebration is more magnificent than the traditional calendar new year of Jan. 1st, and in Japan 
it is mostly celebrated only in areas like Yokohama and Kobe's "Chinatown" districts. 
For many Japanese, who celebrate the "Bon Festival" by Bon according to the old calendar , not 
the first Bon service for the deceased in the summer, I find it mysterious why more do not celebrate 
the Lunar New Year as well being that it is similar in the tradition and focus of returning to one's 
ancestor's origin. 

From April 2008, all publicly traded companies will have to be compliant with the regulations of the 
Japanese Sarbanes-Oxley Act or collectively known as "Japanese SarbOx". In order to attain this 
status companies have to work hard to go through the audit process. 
Our company is no different in this sense.
Over the course of this fiscal year will start on Aprol, we will be going through the final audit process, 
improving our management systems and implementing better operations to improve our company. 

The origins of the Sarbanes-Oxley came about after the horrendous accounting scandals of Enron. 
The policy is named after Paul Sarbanes, Maryland Senator and Michael G. Oxley, representative 
from the State of Ohio. The Sarbanes-Oxley Act became known as "SarbOx" in the U.S. and in 
Japan similar legislation has been passed that is now know collectively known as "Japanese SOX". 

For publicly traded companies, they must make a "Marketable Securities" report and an internal 
control report that is a financial calculation and report the evaluated systems, in addition, to keep 
the reasonable nature of information following the end of the fiscal year.

Also for the internal control report, a certified public accountant or "CPA" and an internal audit must 
be conducted. First of all, as for the internal control reports, I do not understand what is good to 
report or what format is an acceptable format. 
Additionally in order to complete the internal audit process, we have had to hire a lawyer. 
As for the audit cost, we have had to conduct internal audit control measures, hired consultants, 
and as of now, the original cost of the entire procedure is almost double what it was originally 
supposed to cost. This goes without mentioning the strenuous labor that our employees have had to 
undertake to get the audit process to this point. 

While this is being done for the potential shareholders, does all of this work have any value at all? 
Was it not the origin of business to have some kind of goal or aim for achievement? 
"Will sales continue to increase? " "Will new product development go forward? Will production increase? " 
There is the possibility of some of the answers to these questions being "NO". 
Ignoring the chances of that happening is foolish. 

However, in light of the recent scandals, many companies have been taking into account these 
thoughts and are proactively managing the various "risks" that are apparent in today's business world.
For YAMASHIN-FILTER CORP., I believe that this will be a positive step for our company. 
Through the strenuous labor of our company, 

I believe that we have created an internal control system, and I would like to create one that is excellent. 
As always, I thank you for your continued support of our company. 

Sincerely, 

Atsuhiko Yamazaki
President
YAMASHIN-FILTER CORP.