2 Annual Report 2009 Message from the President Review of Fiscal 2009 and Performance Results During the reporting term (January 1 to December 31, 2009), the Japanese economy gained some momentum, but stopped short of full-fledged recovery, with private-sector capital investment and personal spending remaining at a low ebb. For the chemical industry in which Toagosei operates, the weakness of the recovery in demand and persistently high prices for fuel and raw materials ensured that conditions remained difficult. Under these circumstances, the Group streamlined business operations and focused on restoring earnings through measures such as rigorous cost-cutting, withdrawal from unprofitable businesses and integration of Group company activities. Despite these efforts, sales and operating income slumped. However, the income tax burden decreased, contributing to an increase in net income. Basic Policy on Shareholder Return Regarding shareholder return, in principle our policy is to pay dividends of 6 yen per share annually, taking into account the performance for the term in question, the future outlook, and forecast performance figures. However, we also place great importance on the need to ensure a sufficient amount of retained earnings to maintain a sound financial position. Moreover, we must secure sufficient funds for the financing of research and development activities, to prepare for an anticipated intensification of competition, and for capital investment. Consequently, we made a term-end dividend payment of 3 yen. We have already paid an interim dividend of 3 yen, bringing the total dividend payment for the full term to 6 yen per share. For the current term, ending December 31, 2010, we are planning an interim dividend payment of 3 yen, and a term-end dividend payment of 3 yen, for an annual dividend payment of 6 yen per share. Issues Facing the Company Beginning in 2008, the Group has accelerated its switchover to higher value-added products and has innovated new products and businesses, as well as working to achieve the goals of the “ALL TOA 2010” medium-term plan, which aims principally to strengthen our operating base. We see little hope of improvement in the business environment by the end of the current term, with few bright signs in our sector despite perceptions of recovery in the broader economy. Against this backdrop, in what is the final year of the medium-term plan, we are laying a firm foundation for taking our Company to the next level and realizing our vision for the future.