In FY2006, the final year of the Mazda Momentum mid-term plan that began in November 2004, Mazda achieved record profits. We increased overseas sales and total revenue was the highest achieved to date. Mazda's overseas sales presently accounts for approximately 73% of total revenue and trust in the Mazda brand is growing worldwide.

To build on the growth achieved during Mazda Momentum and propel it forward, in March 2007 we announced the formulation of a new mid-term plan — the Mazda Advancement Plan — for FY2007 to FY2010. This plan is aimed at structural reforms focused on manufacturing innovation, the creation of products worthy of the Mazda name and enhancement of our brand value.

At the same time as our new mid-term plan, Mazda released the Sustainable Zoom-Zoom declaration outlining its long-term vision for technology development.

Mazda has traditionally created vehicles that "look inviting to drive, are fun to drive, and make you want to drive them again". To continue to grow, it is important to improve the sustainability of our society by enhancing the environmental and safety performance of our cars. Therefore, we drew up our Sustainable Zoom-Zoom declaration, which is aimed at compatibility between performance in areas such as exhaust emissions and fuel economy while still ensuring passenger safety and exciting driving.

Regardless of a car's drivability, if it has poor fuel economy and spreads harmful exhaust fumes it is impossible to gain true pleasure from driving. On the other hand, even if its environmental credentials are impeccable, I think that a Mazda vehicle that is not fun to drive cannot be described as an appealing car.

Driving performance and environmental safety are not inherently contradictory; they can be harmonized and, in fact, with the all-new model Demio (all-new Mazda 2) released in July 2007 we have achieved class-leading fuel economy with the same excellent drivability.

Based on our Sustainable Zoom-Zoom declaration, Mazda will seek harmony between the joy of driving and safety and the environment, and evolve the world of Zoom-Zoom while responding to future social changes.

Mazda is working to reduce its impact on the environment in every aspect of its business. This is based on our environmental mid-term plan, Green Plan 2010, that was announced in the Social and Environmental Report 2006.

To give one example of our success, in FY2006, in the area of product development, our new-model MPV (fitted with a 2.3L DISI turbo-engine) was commended for its class-leading environmental performance and won the EcoProducts Awards Promotion Committee Chairperson's Prize for outstanding performance at the 2006 3rd EcoProducts Awards. In addition, in the area of recycling end-of-life vehicles, we raised our automobile shredder residue (ASR) recycling ratio from 63% in 2005 to 70%, thereby achieving the 2015 standard, prescribed by the automobile recycling law, nine years ahead of schedule.

Mazda is focusing additional efforts on reducing its environmental impact, not just in relation to the Company's activities but also throughout the supply chain, including dealerships and business partners. For example, in FY2006, Environmental Management Systems (EMS) were established at two of our subsidiary parts sales companies and these are steadily yielding results.

Mazda's aim is not to become a major, full-line automaker. Our aim is to continue to provide Mazda products and services worldwide and to be called on and trusted by our customers and all of our stakeholders.

To strengthen the foundations required to realize our goals, we established the CSR Promotion Department in June 2007 to ensure consistency and uniformity through consolidated management, focusing on activities such as corporate governance, compliance, human rights enlightenment, environmental protection and social contributions.

As of March 2007, the Mazda Group comprised approximately 38,000 employees in over 140 countries and regions. We respect these diverse cultures, values and identities. From now on, with the CSR Promotion Department as a hub, we will strive to respect human rights more and create a comfortable work environment. Furthermore, while we will contribute to the economy and industry of each region in which we operate overseas, we also want to work with local people as a corporation with local roots to overcome the various problems in the respective communities.

We will increase the sustainability of our society through the spirit of One Mazda, which transcends the barriers of national borders, companies, departments and individuals and unites every member of our Group in a single purpose.

This report has been produced so that we may introduce this aspect of our work to you. We welcome your candid comments or opinions.