In the wake of the financial crisis that shook the global economy's foundations, we are beginning to see signs of a recovery in the real economy. Nevertheless, amid concerns that financial problems in Europe could have repercussions globally, Japan is faced with a persistent sense of economic stagnation and an unclear outlook for the future.

The operating environment surrounding the construction industry is undergoing major shifts, reflecting a declining investment in construction and slowdown in economic activity. Against this backdrop, we will carry out innovative and bold initiatives that are unprecedented in the Company's history. This involves responding to the public's demands and expectations with renewed efforts, to continuously strengthen Kajima's relationship with society. We realize that initiatives for corporate social responsibility (CSR) undertaken with sincerity are essential, and will endeavor to practice CSR through fully transparent business activities that are fair, and considerate of the environment.

2010 has been designated as the International Year of Biodiversity, which coincides with the tenth Meeting of the Conference of the Parties (COP10) to be held in October of the same year in Nagoya, Japan. With these actions leading the way, global-scale initiatives for protecting biodiversity and promoting sustainable practices are gaining momentum. Japan has announced to the world its ambitious targets to reduce global warming gas emissions, and is pressing ahead with major reforms that extend to people's daily lives and corporate activities.

Regarding international agreements, there is a call for arrangements through which measures to fight global warming are shared across various spheres such as industry, corporations, and households. Accordingly, the construction industry, which is directly involved in the natural environment in numerous ways, has set targets for reducing its impact on the environment. Initiatives toward reaching them have already begun.

Kajima has a long-standing philosophy of "environmental symbiosis," and carries out its business activities with a core respect for biodiversity. We revised and renamed our environmental initiatives as the Biodiversity Guidelines in July 2009, and have since enhanced our activities company-wide.

Drawing from the new Biodiversity Guidelines, Kajima is paying attention to how the procurement of construction and other materials impacts biodiversity, and is employing its in-house developed Ecological Network Evaluation Method to preserve ecosystems in urban areas undergoing development. We have also proposed a concept for the conservation of biodiversity in urban areas. This initiative exemplifies our shift from simply protecting the environment to creating new spaces that integrate with the environment. From this perspective, we are working to develop advanced analysis, design and construction methods for realizing a low-carbon society and maintaining a healthy global environment.

At Kajima, a company with 170 years of history, we value our long-held management principle of pursuing higher standards of corporate ethics. By nurturing employees and developing the Company with this approach, our vision is to foster the emergence of a new generation with greater standards and skills to create a better future. In other words, we are dedicated to contributing to society through the development of the Company's operations.

A company that does not conduct compliance management with high corporate ethics standards will not be able to survive in today's world. Simply following laws, regulations, and manuals is not enough—rather, it is essential to understand the spirit of such rules to uphold social conventions and public morality. That is the essence of compliance at Kajima. Guided by the Kajima Group Code of Conduct, each and every employee is raising their awareness of standards for individual behavior, and management is striving to ensure that all operations are firmly grounded in compliance.

"Supporting life and brightening horizons" is the motto of the Japan Civil Engineering Contractors Association, Inc., of which Kajima is a member. Although we have entered an era in which social infrastructure tends to reuse quality building material from past structures, the construction industry's responsibility to ensure the safety and dependability of the country's real estate remains unchanged.

The acclaimed writer Ayako Sono wrote in her novel, A Nameless Monument, "The buildings of the people are monuments that have been made by countless engineers who did not leave their names behind." These engineers were undoubtedly passionate in their commitment to creating those buildings; Kajima aspires to channel this passion to the next generation, to build structures that provide greater safety and comfort. To illustrate how the construction industry fulfills its role in enriching society, Kajima's work at Tokyo International Airport is highlighted in the Feature Article of this report.

Kajima will build structures in the future that bring people and the environment together harmoniously. How we can contribute to creating an environmentally oriented world, what is needed to realize a new kind of society, and what must be done for the sake of our future—these are the questions we will continue to put forward.

As we carry out our initiatives, we request the understanding and support of all the Company's stakeholders.