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2013 Review . Third Year Achievements of Medium-term Management Plan In fiscal 2013, the final year of the medium-term management plan, the piping equipment business saw a rebound in sales in the second half mainly due to post-disaster reconstruction demand and an increase in housing starts accompanying rush demand in anticipation of the consumption tax rate hike. Nevertheless, rises in sales and profits remained modest and fell below targets due to an inability to shift increases raw materials prices towards sales prices. In the nursing care business, despite expectations of sales increases after streamlining underperforming and focusing on nursing care products, sales and profits were sluggish mainly because of intensifying sales competition in the industry and prices hikes the rise in raw material prices. Looking at efforts aimed at returning Mikuni Plastics Co., Ltd. to profitability, an issue of considerable concern, we came close to reaching initial sales and profits forecasts thanks to efforts to optimize business operations within the Group in 2011. As a result, we were successful in securing a move back into the black from 2012 onward. Amid this downturn in performance, we pursued various innovations with the aim of improving development capability and productivity. These measures were implemented under the basic policy of strengthening Toagosei’s Monodukuri (excellence in manufacturing) and are anticipated to contribute to further developments in the years ahead. In other manufacturing areas, we are promoting operational reforms in sales, factory and administrative divisions as well as improving the quality of operations and raising awareness in each division, all of which have led to major cost reductions. New Medium-Term Management Plan Initiatives in 2014 (Issues to Be Addressed) Under the banner of “doing everything possible to realize the medium-term management plan, ALL TOA 2014,” Toagosei’s new plan has established a framework for achieving its goals by strengthening collaboration within the Company, among Group companies and with other industries to increase Toagosei’s comprehensive strengths. Accordingly, we are raising the two critical issues: (1) “Rebuild manufacturing systems and undertake innovations to reduce costs in the piping equipment business” and (2) “Expand our business by entering new nursing care product fields and releasing differentiated products.” Starting with the piping equipment business, we will optimize related manufacturing items, capacity and facilities based on factory concepts of the future. We will also work to improve earnings by minimizing and eliminating underperforming products. Next, in the nursing care business, we will take steps to expand into new fields by developing products extending beyond conventional excretion- and bathing-related items to such new growth areas as rental nursing care products. In addition, we aim to achieve business growth by increasing brand power through the development of differentiated products that are ahead of the competition. Building on the aforementioned initiatives, we will communicate closely with Toagosei Group companies to create new products that embody the technological know-how of the Group as a whole. Finally, we recognize the critical need to maintain a sound and healthy position in order to achieve the measures outlined above. To this end, we will strengthen our compliance structure and promote CSR activities including hiring people with disabilities to ensure optimal work-life balance as well as harmonious co-existence with society. Through these means, we will endeavor to become a company in which the community and households can take immense pride. 2011 2012 2013 27,682 Sales 26,978 26,463 (Millions of yen) 2011 2012 2013 1,411 Segment income 1,279 1,349 (Millions of yen) Toagosei Co., Ltd. 20