3. CONSOLIDATED FINANCIAL STATEMENTS (7) Subsequent events Business Combination On October 25, 2010, NTT completed its acquisition of 96.6% of the ordinary shares of Dimension Data Holdings plc (“Dimension Data”), an English public limited company based in the Republic of South Africa whose shares are traded on the London Stock Exchange and the Johannesburg Stock Exchange, by means of a recommended cash offer at GBP 2,043 million. This acquisition is intended to increase competitiveness by integrating NTT’s strength in providing managed network services and data centers with Dimension Data’s strength in offering development, operation and maintenance of IT infrastructure. The acquisition process is still ongoing after October 25, 2010, and NTT intends to make Dimension Data its wholly-owned subsidiary. This acquisition will be recorded in accordance with the acquisition method. It is expected that goodwill will be recorded on the consolidated balance sheets. However, as the initial accounting for the business combination has not been completed at the time of the announcement of these consolidated financial results, further details have not yet been disclosed. At its Board of Director’s meeting on October 21, 2010, NTT DATA CORPORATION (“NTT DATA”) entered into a cash merger agreement on October 29, 2010, with Keane International Inc. (“Keane International”), a U.S. based company, and Citigroup Venture Capital International Technology Holdings, LLC as Keane International’s shareholder representative, pursuant to which Keane International merged with Knight Subsidiary Corporation(“Knight Corporation”), a consolidated subsidiary of NTT DATA, and became a wholly-owned subsidiary of NTT DATA. In this merger, Keane International is the surviving corporation and Knight Corporation will be merged with Keane International. The shares of Knight Corporation that NTT DATA owns will be converted into shares of Keane International, and the shares of Keane International owned by its other shareholders will be converted into rights to exchange those shares to cash. This merger will enable NTT DATA to provide fully integrated IT services in the U.S. in addition to the strong global SAP service capabilities it has built to date. The financial effect on the results for the current fiscal year is under review. Cancellation of Treasury Stock On November 9, 2010, the board of directors resolved that NTT will cancel 125,461,833 shares held as treasury stock, on November 15, 2010. Copyright (c) 2010 Nippon telegraph and telephone corporation