CSK Group positions the finance sphere as one of its strategic business domains and a focus area for resource allocation. As part of this strategy, we started CSK Securities Service in April 2005 to provide full support for securities business processes. Then, in January 2007, we established CSK-RB SECURITIES, which is tasked with working with CSK Securities Service to provide comprehensive securities services, and helping regional financial institutions to grow their securities business.

Today's financial industry is characterized by a steadily greater willingness among individuals to tolerate risk when it comes to managing their assets. This is being driven by further advances in the shift from savings to investment advocated in the Program for Further Financial Reform, increasing numbers of individual investors and rapid rises in the net asset balances of investment trusts. Moreover, in anticipation of the shift to a paperless shares system scheduled to take place from January 2009, we are already seeing a fierce scramble to stake out a share of the new market being created by the need to register individually held shares. Regional financial institutions such as regional banks are now hurriedly pressing forward with full-scale initiatives for providing comprehensive securities services with securities business as the central offering.

In the past, CSK Group mainly provided financial institutions with technology services. Now, however, we are aiming to develop more stable and mutually beneficial collaborative alliances, by being fully involved in the securities business—a critically important business for financial institutions.

In this context, CSK-RB SECURITIES will function as a service gateway for regional financial institutions, offering comprehensive securities services. CSK-RB SECURITIES will bring together and provide the full range of CSK Group's current securities services, including support for the establishment of securities subsidiaries by regional financial institutions, product planning and supply, marketing and training support, securities systems, securities business BPO, and financial information ASP. CSK-RB SECURITIES has already received numerous inquiries about its services and negotiations are underway with several potential customers.

The new securities system, ESTREX, currently being developed by CSK Securities Service, is a state-of-the-art system designed for use not only by regional banks but also by online brokers and small and medium-sized securities companies. The back office systems for the new system have already been completed, and development of the front office systems is progressing smoothly.

CSK Securities Service and CSK-RB SECURITIES will join forces to create new markets in the financial industry by meeting customers' new needs.

A new development in the service provider business is the establishment of CSK PRESCENDO to provide comprehensive e-commerce related services. CSK PRESCENDO is a joint venture between CSK HOLDINGS and Xavel, Inc. that provides e-commerce sales planning and branding using the Internet and the media.

CSK Group will consolidate in the new entity all the expertise it has acquired through past involvement with Xavel and in e-commerce in general. Xavel group, meanwhile, will outsource to CSK PRESCENDO fulfillment operations encompassing back office processes ranging from processing of product orders to delivery. We aim to develop a win-win alliance, by combining CSK Group's knowledge infrastructure in systems integration, systems management, and BPO services, and Xavel's strengths in media operation and planning capabilities for segmentation, targeting and positioning (STP) strategy.

CSK PRESCENDO is involved in two main business types. The first is systems-related services, which include consulting for e-commerce systems and systems ASP services. The second is fulfillment services, which encompass receipt of goods, contents management, order taking, shipping, distribution, customer support and data analysis. We aim to raise convenience and support the growth of new entrants and existing players in the e-commerce field, through stable provision not only of systems but also of all other backyard operations.

The defining characteristic of these fulfillment services is that they include data analysis. The results of data analysis are compared with hypothetical data to provide feedback for planning. By repeatedly conducting the analysis cycle for various types of data, CSK PRESCENDO itself will be able to accumulate expertise. In the future, CSK PRESCENDO aspires to be involved in a broader spectrum of business processes using data analysis, including planning areas such as marketing and promotional plans.