The Japanese construction industry during the financial year to March 2006 was marked by a large-scale transformation of the business environment, exemplified by such factors as a shift in the demand structure, and more intense competition resulting from reform of construction-related laws. In the domestic construction market, capital investment increased in the private sector prompted by the economic recovery, although investment in public works fell at an even greater pace, making the struggle for contracts fiercer than ever. We have entered an era in which the management capabilities of Kajima and other companies in the industry are truly being put to the test.

Another distinctive feature of the times is a greater awareness of corporate social responsibility (CSR) in terms of ensuring compliance, contributing to society and the environment, emphasizing and enhancing quality and safety, and other measures. We are now in an age when society demands that all companies raise their awareness of CSR to levels higher than ever before, and act on their own initiative.

Kajima has adapted its structure to face this new era, restructuring our top management around the chairman and president positions. We have also restructured our Board of Directors and introduced an executive officer system, enhancing the speed of management decision-making and strengthening oversight functions for operations.

Our earnings for the financial year to March 2006 exceeded initial targets, the result of a concerted effort throughout the Company during the final year toward the goals of our three-year medium-term business plan. We launched a new business plan in the current financial year, covering the period through March 2009, the first in a series of growth strategies in an era of new competition. Through this plan, we will strive to further enhance earnings capacity and corporate value, and achieve greater growth.

Kajima's long history dates back to its establishment in 1840. While preserving the traditions and trust we have built over many years, we have sought to ensure a flexible and nimble company that can adapt quickly to the changing times, with an unshakeable resolve to remain a leader in the construction industry.

We wish to offer our appreciation to our shareholders and all stakeholders, and thank you for your continued support.

Sadao Umeda Chairman, Representative Director		Mitsuyoshi Nakamura President, Representative Director