Our revised forecast for consolidated sales is lower than our initial forecast, as a result of selective acceptance of only certain types of orders and scaling down of equipment sales as part of our drive to transform our business structure in the IT services business.

Our revised forecast for consolidated ordinary income is lower than our initial forecast, as a result of recording an allowance for loss on investment in respect of shares valued at ¥3.3 billion of IPMobile Incorporated held for investment purposes, and recording an allowance for anticipated losses on contracts of approximately ¥0.9 billion in preparation for a loss on systems development projects anticipated to occur in the next fiscal year.

The press release published by IPMobile on April 10, 2007 states that the major shareholder of IPMobile is to change, and that the parties involved are currently in talks with regard to raising the investments required to launch commercial service, the timing of the launch, the details of the service, and other matters. However, based on comprehensive consideration of matters including the delay in the business plan, we have decided to treat this matter conservatively in our accounting by recording an allowance for loss on investment.

The revised forecast for consolidated net income is lower than the initial forecast. In addition to the factors influencing the revisions to the initial forecasts for consolidated sales and ordinary income, this results from our decision to conservatively incorporate in our consolidated statements of income an impact of tax correction amounting to approximately ¥6.1 billion.

The tax correction in question principally relates to matters such as valuation of the stock of subsidiaries included in the Group's reorganization. We have filed an objection with the Tokyo Regional Taxation Bureau with respect to this tax correction. On August 10, 2005 we received a correction notice ordering us to pay additional tax and announced in response our policy to request that the order be revoked. We have also been disclosing this policy as contingency in our financial statements and interim financial statements since the interim period of the fiscal year ended March 31, 2006, and elsewhere.

As indicated in those documents, our policy is to request that the order be revoked, and at this time there is no change to our position. We are continuing our negotiations with the Tokyo Regional Taxation Bureau and considering initiating procedures for requesting a review of the case and other options.

However, we concluded that a more conservative accounting treatment was advisable with respect to this matter, and decided to incorporate it in our consolidated statements of income at the end of this financial year, from the perspective of further improving the soundness of our financial position and ensuring management transparency. We made this decision based on the fact that a considerable period has passed since we filed our objection, and in light of the amendment to "Accounting Practices, Disclosure and Audit Treatment for Various Taxes" published by the Japanese Institute of Certified Public Accountants (JICPA) in March this year.

There is no change to our forecasts for non-consolidated sales and ordinary income. Our revised forecast for non-consolidated net income is lower than our initial forecast, primarily as a result of an impact of ¥2.1 billion relating to the tax correction matter explained above.