During the company's fiscal year under review, the world economy plunged into once-in-a-hundred-years recession, adversely affecting the domestic economy in Japan with the automotive and electronics industries directly hard-hit by the rapid contraction of the world economy and sharp appreciation of the yen, undergoing large decline in sales. This global economic recession forced the relevant companies and corporations to take countermeasures to deal with these issues, such as large-scale production reduction/inventory adjustment and drastic personnel reduction.

The circumstances surrounding our business were no exception, causing the Seiren Group to undergo sharp decreases in sales as a result of rises in prices of raw materials and rapid deterioration in market conditions in the first half of the business term under review, large increases in foreign exchange losses due to the appreciation of the yen and other factors having negative effects on our business operations. Especially when viewed by business segment, our group was hard-hit by the economic recession in its automotive business segment, accounting for a large percentage of our entire sales and profit, the gasket business in its electronics business segment and its wiping cloth business segment. On the other hand, however, our group performed well in its other business segments relatively less affected by deteriorated market conditions, including Viscotecs® business in our high fashion business segment, fiber mesh for PDP in our electronics business segment, and various products in our medical business segment, which rather saw increases in production to meet the market demands.

Under these circumstances, we were forced to resort to emergency measures such as comprehensive cost reduction activities, large-scale production adjustment/shutdown and work structure modification for work-sharing, which, however, failed to make up for the poor market conditions and foreign exchange losses due to the appreciation of the yen deteriorating in larger scale at higher speed than such emergency measures, causing us to post sharp decline both in sales and profit for the 2009 business term from the previous term. Starting at the beginning of the current term, we have reviewed all our business segments based on the keywords "Select and Concentrate" to reorganize any business segment with low profitability or poor future prospects.

The world economy as a whole will remain in severe conditions with the global business condition not expected to improve in the near future. Against this backdrop, we have determined to carry out our business activities for our 138th business term based on our forecast of our group facing a very severe business environment during this term, while maintaining sound crisis awareness to cope with any such business environment with Change: Restructuring and Creation as our slogan. In order for us to continue to be the leader in the industry after our group pulls itself out of this economic quagmire, we will do what we should do in a proper and positive manner, while making our best efforts to improve our corporate value toward "further progress and challenges to realize the next dream".

We sincerely hope that all of our shareholders will continue to show their unwavering support and cooperation for Seiren.