Our goals for the three-year medium-term business plan ended in the financial year to March 2006 were to secure consolidated recurring profit of more than ¥42.0 billion and reduce our level of interest-bearing debt. As a result of our efforts to enhance business profitability, improve our financial position, strengthen earnings capacity and diversify sources of earnings, we exceeded this figure, and achieved nearly all targets in our initial plan.

The basic principles of the new medium-term business plan, launched in April 2006 and extending through the financial year to March 2009, are "Focus on client orientation" and "Ensure corporate ethics."

In executing our business, we emphasize working with the client, to maintain the level of trustworthiness expected of the Kajima Group. We will significantly enhance our efforts with regard to quality, safety and the environment, while respecting and fully enforcing compliance and CSR based on selfdisciplined corporate ethics.

Through such company-wide efforts, we will realize a corporate culture filled with the spirit of challenge, achieve a higher earnings capacity, and raise our corporate value by fostering vigorous and enthusiastic employees, as we seek to make further strides in our development.

Our target is to establish a structure capable of maintaining a stable level of consolidated recurring profit of more than ¥60.0 billion annually, raising profitability to an even higher level. At the same time, we will maintain a proactive stance with regard to return of profit to investors and stakeholders, and by cutting interest-bearing debt and enhancing shareholders' equity, achieve a debt/equity ratio of around 1.00.

Deeply cultivate our mainstay construction business, and strengthen technology and marketing

• To further boost competitiveness in the core domestic construction business, we will enhance our sales capability to win contracts through a project proposal capacity that respects the growing sophistication and diversification of customer needs, and through our advanced technology and engineering capabilities, thereby boosting earning capacity.
• We will pursue synergistic effects in the construction business through proactive expansion of the real estate development business, strengthening the environment and private finance initiative (PFI) businesses, and expanding the constructionrelated field, seeking to enhance the earnings capacity of the Kajima Group.

Principal measures for these strategies are as follows. Domestic Construction Business

• We will strengthen our project proposal capacity and competitiveness through efforts to ensure closer cooperation between sales, design and construction, and by enhancing our production planning and estimate functions at the time of receipt of the contract. In particular, we will bolster the business framework by sector, such as for electronic devices and healthcare.
• Responding to the growth of comprehensive evaluation systems as a result of laws related to the promotion of quality maintenance for public works, we will improve our technological proposal capability and price competitiveness by exerting our comprehensive capabilities.
• We will enhance our construction supervision structure, as well as develop and strengthen subcontractors, suppliers and other affiliated companies, to build a production structure that gives ample consideration to quality, safety and the environment.

Overseas Construction Business

• We will improve our risk management structure, and focus on selective business promotion, carefully choosing regions and projects that allow us to ensure the superiority of the Kajima Group.
• In civil engineering, we will continue to enhance structures and personnel in areas with growing markets such as Asia and the Middle East, and attain stable profit generation.

Domestic Real Estate Development Business

• As the second source of earnings following the domestic construction business, we will work aggressively in this business to generate new, high-quality projects by cultivating our expertise, and further strengthening cooperation with the construction division.

Overseas Real Estate Development Business

• We will pursue healthy and vigorous business development tailored to the special characteristics of each region, such as the distribution warehouse development business, which is growing strongly in North America, and the leasing business in Southeast Asia.

Implement rapid reform, and increase the level of societal trust and our standing

• We will restructure our operational, organizational and personnel structure in accordance with changes in the business environment, and seek to further increase efficiency and corporate competitiveness through such measures as focusing on research and development.
• We will establish Office of Internal Control, and will develop and strengthen our internal control system through a company-wide risk management structure. We will also ensure strict observance of compliance, and work toward sound and efficient management. We will strengthen the functions of Office of Corporate Social Responsibility with a framework directly under the President, and expand fulfillment of the Company's social responsibility.