From April 2010, amid the economic recovery, the Retail Banking Online Systems business and the Systems Solutions business reported higher net sales than expected, aided by increasing orders from our main clients such as credit card companies, securities companies and financial institutions. At the same time, the sluggish performance of the Security Systems business kept overall sales at virtually the level forecast at the beginning of the term.

Profit sharply exceeded the low level that had been projected and rose compared to the previous fiscal year, thanks to the improved profitability of the Company’s projects. In addition to our ongoing cost-cutting efforts, we benefited from rising orders for system development from credit card companies in the wake of the amendment to the Money-Lending Business Act and the Installment Sales Law that raised our efficiency. Higher profit also resulted from increased package sales of our detection system for fraudulent credit card use in the System Solution business.

In software development, the impact of business fluctuations tends to be felt six months or one year later than in other fields. Our clients and affiliated companies are maintaining earnings, partly through internal efforts and partly because of business recovery among end users. Lower profitability is anticipated in the future, however, due to deflationary pressure and tighter competition. To overcome this challenge, the Company must lay the foundation for a leap ahead one that is not directly linked to previous business.

Intelligent Wave accepted a tender offer from Dai Nippon Printing Co., Ltd. (DNP). As a result, DNP became our parent company and the largest shareholder, holding 50.61% of our voting rights as of April 9, 2010.

Intelligent Wave and DNP had for some years stepped up business collaboration to bolster ties in the security business, but we had yet to reap major benefits in terms of business results. Now, having become a subsidiary of DNP, the Company can expect further mutual cooperation to help broaden its sales base, and we intend to promote cooperation through closer personnel exchange than ever before. Under this collaborative framework, we are pursuing (1) cross-selling, (2) consigned development and (3) new businesses in the security segment. These three areas and the creation of synergy are important factors that should support our three-year Medium-Term Management Plan, which I will describe below.

With regard to cross-selling, we have been making preparations over the past year and several months, and the sales departments of our two companies have been listing existing clients as well as new clients to be tapped. We will devise a spectrum of approaches for respective clients and implement them with determination.

In consigned development, several projects have already been proposed and quotes are being prepared. In the first year of collaboration, we will launch development of these projects and take on the projects assigned to us from a range of DNP’s client companies and their development projects.

New businesses in the security segment require a relatively long lead time, as we are starting them from scratch. We plan to create new business models by exchanging or combining products of the two companies, instead of developing entirely new products. Specifically, we intend to boost business opportunities by offering SaaS (software as a service), a software service that allows necessary functions to be used via the Internet, and business process outsourcing (BPO).

Since such collaboration involves software items whose operational rules must be determined through consultation with clients, consultative sales skills with client companies are a necessity. We do not anticipate that the increase in size of the business group, achieved through the tender offer, will impact business results immediately; further time must pass before we see an impact.

Intelligent Wave commenced its new three-year Medium-Term Management Plan in the year ending June 2011. Under the program, we aim to achieve net sales of \7,000 million, operating income of \890 million, ordinary income of \910 million and net income of \520 million in the final year ending June 2013.

As I mentioned, we are working to lay the foundation for a leap forward not directly linked to our business in the past. The Medium-Term Management Plan focuses on formulating and pushing ahead with policies designed to boost sales, rather than securing profit defensively.

Concrete measures in the respective segments are described below. In the Retail Banking Online Systems business, we will concentrate on policies that incorporate new business areas amid the difficult business environment of our existing clients resulting from the amendment to the industryrelated laws. We aim to develop and introduce a Linux-compatible NET+1 to benefit client companies in terms of lower capital expenditure and reduced maintenance costs. We expect this to enable us to make inroads into new business areas in which Intelligent Wave was not previously engaged, such as peripheral operations for the mission-critical systems at financial institutions and other online operations.

In the System Solution business, we will launch sales overseas of ACE Plus, a proprietary product for detecting fraudulent credit card use, which boasts a 60% share in the Japanese market. We will also approach non-credit card companies. For example, we will seek to tap demand from banks for anti-money laundering functions. Concurrently, we will boost cooperation with DNP to raise the order intake of development projects.

In the Security Systems business, we plan to start up and nurture the new businesses described above, in cooperation with DNP. We also seek to strengthen cooperation with sales partners in terms of EUCSecure, enhance product reliability and improve service.

Limitations on the total amount that individuals can borrow were imposed under the revised Money-Lending Business Act, which took effect in June 2010, while the revised Installment Sales Law was scheduled to come into full effect by the end of 2010. The credit card industry has taken measures to address the amended laws, and consequently we expect demand for systems and investment in them to stage a recovery in the next fiscal year, after bottoming out in the current fiscal year. As slumping demand for system investments is likely to continue during the current fiscal year, we predict modest growth in net sales and profit on a consolidated basis.