Over the past few years the three pillars of Shochiku’s business – film, theater and real estate – have proven to be well-balanced performers, however I believe that we have only just arrived at the starting line of a major period of growth. The environment surrounding the film world, within the broader context of the contents industry, faces increasing challenges from aggressive newcomers from other industries, and we are now at a crossroads. As we look to the market we must be fully aware that we cannot survive unless we are capable of meeting the diversified needs of our customers and the rapid changes taking place. As an entertainment corporation, Shochiku’s corporate mission is to entertain its customers. In order to achieve this goal our task is clear - we must understand the needs of our customers, and we must be attuned to how we can make them happy. Furthermore, we must form alliances, whether inside or outside the film industry, that will help us to respond to those needs. To celebrate the one hundredth anniversary of the birth of Mr. Yasujiro Ozu two years ago, Shochiku developed a special feature that was shown at international film festivals on three continents, in addition to working with NHK (Japan’s national broadcaster) and the National Film Center, turning DVD sales into an extremely lucrative business for the company. While further developing these kinds of opportunities, it is important for Shochiku to continue its venture into new areas and create a new sense of value. As an entertainment enterprise, I would like to see Shochiku become a corporate entity capable of attracting a variety of talented creators and producing a wide range of fun, interesting and exciting work. It is important that we not focus solely on the domestic market, but keep our eyes fixed on the international arena as well. Shochiku hopes to move ahead rapidly with improvements to the effectiveness of our planning, production, quality, costs and marketing, while not forgetting the spirit to take on new challenges without arrogance, but also without doubt. This year, our company is celebrating its 110th anniversary. By comparison, Kabuki, part of the traditional culture of Japan, celebrated its 400th anniversary in 2003. Over the last 110 years, Shochiku, a private company, has been proud to support Kabuki. In the same way, our history has shown our commitment and pioneering spirit, being the first in Japan to introduce talking pictures, and then the first to usher in color films. We feel great pride in the achievements built by our forefathers thus far and the weight of history the name Shochiku holds. Our management philosophy is to provide our customers with dreams and compelling stories through films and theatre. By combining Shochiku’s inherited tradition with new culture our goal is to create a richer society, a place in which we can create contents that bring even more joy to our customers. I thank you sincerely for your continued support. Jay Sakomoto President & CEO Shochiku Co., Ltd.