Kajima has undertaken construction and real estate development projects in more than 50 countries around the world. We have a permanent presence in 21 countries, and temporary project offices in 13 countries in addition to permanent offices. Revenues from overseas operations during the financial year ended March 31, 2006 amounted to ¥269 billion, a rise of 14.2% year on year.

Kajima's overseas activities consist of business conducted through local subsidiaries and such construction projects managed directly by the International Division in Tokyo as numerous official development assistance (ODA), yen-loan-financed and other government assistance projects, and large-scale civil engineering projects. Kajima's regional subsidiaries are located in the countries where continuing businesses are established through their design, construction and real estate development entities, providing a business network that allows the Company to make full use of its collective strength, and offer a global service.

San Luis Obispo County Government Center California, United States

Hung Sheng Tiipao Condominium Taipei, Taiwan

JVC Business Park London, UK

1. Kajima U.S.A. Inc. (KUSA)
KUSA manages the construction and real estate development business in North America and Hawaii. It achieved recordhigh earnings during the financial year ended March 31, 2006.

The construction division was awarded contracts totaling $0.8 billion for the entire group, with strong business activity in Hawaii particularly notable. KUSA acquired the Austin Company, and is working to enhance earnings and improve efficiency throughout the group.

The real estate development business continued to perform strongly, bolstered by distribution warehouse projects.

2. Kajima Kona Holdings, Inc. (KKH)
The Hualalai Resort, with the Four Seasons Hotel as the core, has maintained a reputation as one of Hawaii's leading resorts. With the particularly strong performance in the residential development segment, KKH achieved record-high earnings during the financial year ended March 31, 2006. Following the successful performance, we entered into an agreement with an investor in March 2006 and sold the hotel and golf operation business, housing business, and fixed assets in June 2006.

3. Kajima Overseas Asia Pte Ltd (KOA)
KOA manages the construction and real estate development business in Southeast Asia.

KOA's construction business in Singapore continued to receive contracts for large-scale construction projects from local government and developers. In Thailand and Malaysia, earnings are being boosted with the reemergence of Japanese manufacturers.

The real estate development business is recording strong earnings from leasing and management of office buildings, hotels, shopping malls and other properties, and has begun considering new investments.

4. Chung-Lu Sino-Kajima Construction Co., Ltd. (Sino-Kajima)
Sino-Kajima manages the construction business in Taiwan.

Sino-Kajima undertook numerous projects for buildings, such as high-rise condominiums with advanced seismic control technology, as well as production facilities for electronic devices and other equipment.

5. Kajima Europe B.V. (KE)
KE manages the construction and real estate development business in Europe.

The construction business, once focused on the United Kingdom, has been restructured by concentrating on completing ongoing construction projects in the United Kingdom, and expanding business in Poland and the Czech Republic.

The real estate development business continues to focus on private finance initiative (PFI) projects, office buildings in the United Kingdom, and resort development in France.

6. Kajima (Shanghai) Construction Co.,Ltd. (Kajima Shanghai)
Kajima Shanghai manages the construction business in and around Shanghai, focusing on construction of production plants for Japanese manufacturers.

Dhauliganga HE Project Stage I: Civil Works for Dam and Part Head Race Tunnel (LotI), India

Keelung River Yuanshantze Flood Diversion Project, Taiwan

Investment in construction is accelerating throughout the world as conditions brighten with the continued strength of the U.S. and Chinese economies, and the economic recovery in Japan.

In Taiwan, India and other regions in Asia, many new infrastructure projects, including subways, roads, bridges, dams and airports, are being launched in line with economic development. In the oilproducing regions of the Middle East and North Africa, the rising price of crude oil has produced a flood of oil money driving active investment in construction of office buildings, hotels, and other transport and energy-related infrastructure. In Africa, the Japanese government is planning to increase ODA to developing countries. Those market environments are brightening the prospects for global construction investment.

In response to these market conditions, Kajima is taking a proactive stance with regard to overseas business development, making overseas civil engineering business an important item on the agenda in its new three-year medium-term business plan launched in April 2006 and extending through the financial year to March 2009.

Specifically, the Company will pursue a policy of focusing on the Japanese government's ODA grants and yen-based loan projects, while at the same time pursuing large-scale, international tender projects financed by national or regional governments, state-owned companies, or the World Bank or other international financial institutions.

Kajima will make efforts to build strategic alliances with powerful overseas partners and subcontractors to enhance the competitiveness in the world market. We will also pursue projects in such a way as to maximize our technical expertise and comprehensive capabilities.