In line with the current Benesse Group Management Policy, which runs through fiscal 2010, the Group will take steps to reinforce and extend its role as an education company, reinforce direct marketing efforts, and create a leaner company. Our sales target for fiscal 2010 has been set at ¥430.0 billion, and we aim to generate ¥43.0 billion in operating income, with an ROE of 12%. To meet these targets, Benesse will need to address the challenges outlined below.

Education Business
In the education business, Benesse is making further improvements to its core correspondence course operations. For example, the Company is shifting from the traditional type of course—which employs paper-based texts and worksheets—to courses like the Shinkenzemi Junior High School Course + i, launched in 2008, which employ new methods and types of media, such as the Internet. Looking ahead, one of the main challenges will be to develop products and services that can help improve students' results and stimulate their desire to learn, thus attracting a larger number of customers. By expanding the scope of services and providing more varied instructional materials, using features like the Internet, the Company aims to enhance the value of its products and services. But correspondence courses are only a part of the picture. Benesse is developing a broader range of educational services by continuing to bolster its prep school operations. For example, on April 1, 2009 the Company took over the operations of Tetsuryokukai, a highly successful prep school which helps prepare students hoping to enter elite universities such as the University of Tokyo. This brings the number of prep schools under the Benesse umbrella to three—Tetsuryokukai, Ochanomizu Seminar Co., Ltd. and Tokyo Individualized Educational Institute, Inc.
One of the most promising avenues for growth in the education business is the overseas market, including China. In January 2009, Benesse established a China Business Division which will be responsible for developing education-related operations in China, centering on correspondence courses for preschoolers, and expanding the business through the creation of new products and services.
Marketing efforts will seek to leverage a wide range of different media in an effort to reach a larger number of people, and improve efficiency and effectiveness. In fiscal 2008 Benesse joined forces with Procter & Gamble Japan, and other companies to support these efforts, and in the future, the Company intends to broaden the range of companies and local regions with which it cooperates.
To maintain its vitality, Benesse must respond to the changes taking place in the field of education. The Company needs to make adjustments to reflect the new national curriculum guidelines due to be implemented in fiscal 2011, and to respond to textbook revisions. In this context, Benesse is stepping up reforms to its editing process and other work procedures in order to improve efficiency. The Company is also conducting a thorough review of all business procedures and re-examining the production structure, in an effort to not only cut costs and reduce the work load, but more importantly, to enhance the value of the products and services it provides.

Non-Education Business
In the business segments overseen by the Women & Family Company, Benesse is expanding its operations through efforts to support the lifestyle of women and their families. In March 2009 the Company introduced a new series of home-study programs for working women, under the brand name “Happy Collection.” Benesse intends to continue developing products and business models that can appeal to new customer segments, and thus contribute to further business growth.
In the nursing care business, Benesse's prime objective is to offer high-quality services that can provide customers a sense of safety and security. Benesse Style Care has introduced changes to its personnel system, improved terms of employment, and implemented thorough training programs for staff. The company has also established alliances with educational institutions in order to train and cultivate high-quality employees and ensure that it has a stable source of personnel. In the future, the company will strive to improve profitability while expanding the overall business scale through the steady addition of new nursing homes.
In the language business, the global economic crisis has had a serious negative impact on corporate earnings, which poses problems for language operations. Berlitz International is continuing to develop lesson plans that correspond to the needs of prospective customers, while seeking new avenues for business growth. The company is striving to make optimal use of the human and material resources in the Berlitz network, which spans some 70 countries worldwide, in an effort to develop new courses of instruction that deal not only with language ability, but with the broader issue of global leadership training. The company is also investing in various forms of IT infrastructure in an effort to boost the level of service provided.
At AVIVA Co., Ltd., the progress of management restructuring efforts aimed at cutting costs succeeded in moving the company back into the black in fiscal 2008 Future efforts will focus on bolstering earnings by developing products that meet customer needs, and enhancing the range of services provided.

Capital Policy
Capital structure policy is another central issue for the Benesse Group. Benesse has clearly stated its goal of achieving a dividend payout ratio of at least 35%, and it increased dividends for five consecutive periods from fiscal 2003 to fiscal 2007. For fiscal 2008, the Company paid an annual dividend of ¥90 per common share, as in the previous fiscal year, for a payout ratio of 84.1% (on a consolidated basis). Meanwhile, share buybacks reached a cumulative total of 8.14 million shares as of March 31, 2009, at a cost of ¥27,392 million and represented 7.7% of all issued shares, with further repurchases planned as deemed appropriate. Benesse also intends to actively use cash reserves for business investment to drive medium- to long-term growth, including M&As, R&D, and investments to strengthen the business foundation. The Company will be particularly proactive regarding M&As in fields that will further strengthen the Group's core competencies, such as education, language education, nursing care and lifestyle.