Q&A at 12th CLSA Japan ForumFebruary 27, 2015
NEC Networks & System Integration Corporation(TSE: 1973 / NESIC)

Date & Time: February 27, 2015 (Tuesday) 9.00-10.00
Q: When will business associated with the Tokyo Olympics contribute to your results?
In what fields does business look promising? What companies will be your competitors inthose fields?
A: Business in fields related to safety and security for the Olympics looks promising. The
enhancement of networks and multilingual services are also promising.
As we are involved in a variety of fields associated with the Olympics, our businessassociated with the Olympics is not expected to make a significant contribution in any
particular year. Contributions will emerge each year up to 2020.
Our competitors will include electronics vendors, SIers, and builders of network
infrastructure. Our advantage is that we can provide infrastructure and all related services.

Q: Capex at telecom carriers is expected to decline. Public investment appears to be peaking
out. Given these negative factors, how much confidence do you have about growth next
fiscal year? Will the Japan Fair Trade Commission’s investigations have adverse effects on
your firefighting system business?
A: The Japan Fair Trade Commission has not investigated us, and we do not think that its
investigations will have any particular effect on us.
As you have just pointed out, we need to estimate performance in the next fiscal year
cautiously, considering the effect of the peaking out of the firefighting system business anda decline in capex at telecom carriers. It is difficult to achieve substantial growth, but weare considering how to achieve the targets for the final fiscal year of our mid-term businessplan.

Q: Net cash has increased. How will you use your cash and deposits?
A: We will use cash and deposits for growth, mainly for M&A and the building of a service
infrastructure necessary for solutions. We will consider investment in in-house systems,
including ERP. While considering the status of M&A and capex, we will strive to distributestable dividends and to increase shareholder returns to meet our shareholders’ higher
expectations.

Q: How far do you think you will be able to improve profitability? I’m assuming that achange in your sales mix will affect your profitability. What is the key to improvement inprofitability?
A: Specific targets for the next mid-term business plan following the existing mid-termbusiness plan are currently under discussion. Speaking of our sales mix, we are struggling
to increase sales to telecom carries, while sales to other enterprises are increasing. To
improve profitability, it is important to improve profitability in our business with otherenterprises, where sales account for increasing percentages.

Q: Is hiring getting more difficult due to the lack of human resources? Are you considering
hiring engineers from abroad?
A: We are not affected by the lack of human resources. However, considering the lack ofhuman resources for the future, we recognize that hiring human resources is an importantbusiness challenge. We emphasize technology. We will hire a certain number or more of
employees every year and will hand down our technology to them.
We need to consider securing human resources through M&A. In association with that, wemay consider using human resources from abroad.

Q: Although telecom carriers’ capex is declining, communications traffic is on an upward
trend. I do not think that their facilities are sufficient. In this environment, do you expectthat carriers’ capex will improve? In what fields do you expect investment to increase?
A: Currently, carriers’ investments are associated with 4G technology. In the future, there will
be investments associated with new technologies, including 5G. However, investment inbase stations for those technologies do not involve investment in the construction of newsteel towers as 3G investment did. The main investments are now investments in themodifications of existing base stations, and we do not expect large amounts of capex likecapex for 3G base stations. We think that our business opportunities lie in strengthening
core networks associated with increasing traffic.

Q: What is your policy on M&A for the future? What are the two acquired companies’
contributions to earnings like?
A: NEC Magnus Communications contributed to earnings this fiscal year, but Q&A
Corporation (QAC) still needs improvement. The entire NESIC Group will take steps toimprove QAC’s earnings.
We have no specific M&A plans to discuss now. For M&A, timing is important. We will
actively consider M&A if there are any good opportunities in line with our strategy.
End.