Good afternoon! I m Tokuo Yamamoto, CFO of NEC Networks& System Integration Corporation, which we call NESIC.
Thank you for joining us today for this briefing.

1Here is our agenda.
First, I will provide a summary of our company, then talkabout our business model, and our opportunities for the nextgrowth.

2What s NESIC?

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This chart shows our history.
NESIC was born as a telecom engineering company about 60years ago.
According to the development of technologies, our businesshave been gradually expanded into systems integration andrelated services such as system operation and outsourcing
services. As a listed company we have over 30 years history,and according to the expansion of our business our industrial
category was changed from construction to information &communication 5 years ago.

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I will explain the history of NESIC in a little more detail.
1953, our birth year, was the year when NHK started Japan s
first television broadcasts, and current KDDI was established.
In other words, NESIC was born at the dawn ofcommunication in Japan.
We started out developing Japan s broadcast and telecom
infrastructure, such as the installation of television
broadcasting equipment and the installation of telephoneswitchboards, as shown in the pictures.

5In sixties, our business expanded to the worldwide telecom
infrastructure.
As shown in this slide, we have installed satellite earth station
on Mt. Everest and have contributed to live TV coverage fromthe top of Mountain.

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Alongside the dramatic development of telecom technology inthe 1990s, we also contributed to the start‑up of new telecom
services, including mobile phones and the Internet, and also
expanded system integration business for officecommunication network. We can say that it is the era when
we became a system integrator.

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And today....., we have also been involved in the constructionof social infrastructure, including the installation of digitalterrestrial broadcasting equipment on Tokyo Skytree and thedevelopment of a submarine seismometer system.
Moreover, our stage has spread as far as space. We have been
involved in the operation and control of numerous satellites. It
was one of our staff members who RE‑discovered theHayabusa, that collected samples of asteroid Itokawa, first in
the world, when it lost all its trace.
We are working for the operation of Hayabusa‑second, too,
but I hope we do not have an opportunity to re‑discover it thistime, (as it will not lose its way).

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For offices, not only integration of ICT systems, we also focus
on the work style innovation solution, including office facilities
and design to enhance the productivity of employees.

9It is, therefore, fair to say that NESIC is a company which has
been developed by continually supporting all kinds ofcommunications across a wide range of fields.

10This is our recent financial record. For past decade, although
there were the financial crisis triggered by the Lehman
collapse and March 11th disaster, we have been improved ourprofitability without large impact by them.

11I will show our business model, next.

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Our business model has 4 points:
1st: We DO business for various customers, private companies,
telecom carriers and governments.
2 nd: We can provide them variety of services related to ICT,such as consulting, system integrations, maintenance‑
operation, and outsourcing services, utilizing our strong
service & support bases.
3 rd: We also have total facility management knowhow throughtelecom construction experience, including office facilities anddesign.
4 th: In addition, we have good financial position.
As a result, we are proud of leading position in the Japanese
network market, based on the trust, earned through our sixty‑
years experience and know‑how.

13This is our sales by segment. It is well balanced, based on our
broad customer base. And this gives our performance somestability against environmental change in each field.

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Here I d like to explain our business segments;
Enterprises networks business is system integration andrelated services regarding ICT systems mainly for thecompanies offices.
One of our focusing businesses is our solution named
EmpoweredOffice to improve total office productivity.
White workers productivity is a critical issue for Japanese
senior management to survive in matured market condition.
By combining the strength of ICT and our facilities
management such as office design, supplies and electricity, we
provide the 3E effects to enhance the corporate value of ourcustomers:
That is: Empowering creativity of each worker, and realizing
Economical and Ecological work style. We have been
implementing the solution for ourselves and Enjoying it... that
may be 4th E . In our case, it was effective in reducing floor
space by 40%, and the power consumption by half, as well asin speeding up management decision and information sharing.
We have invited customers, especially senior managements, tofeel the effectiveness for themselves by watching around ouroffices. As a result, the EmpoweredOffice brand has gradually
been penetrating to our customers.

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Carrier network business is the business mainly for telecom
carriers public networks, from installation and maintenance ofmobile base stations to system integration or configuration ofcore networks.

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Social infrastructure business is mainly installation and related
services for network systems regarding variety of public
infrastructures, including fire‑fighting and emergency
networks, broadcasting systems such as transmitters andstudio systems, cable TV networks, and telecommunication
systems along roads and rails.

17Second point is our services infrastructures. We are able toprovide ICT services as a management cycle, from consulting,integration, maintenance and outsourcing services.
It is our intense service and support bases nation‑wide thatdifferentiates our business model.
For an example, we can send support staff and necessary
parts to our customers in just an hour almost wherever they
are in Japan. It is the service quality NESIC is proud of,through the experience of mission critical public network
business.

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Another clear differentiation compared to other system
integrators, lies in our know‑how and installation capabilities
for office, electrical and other facilities.
These skills have been built through our infrastructure
construction business, leading to the creation of new business.
One of such examples is our office innovation
solution EmpoweredOffice, I mentioned earlier.

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Fourth point is our financial position. Through increased
profitability, we have built solid financial strength. We areready to use it for further growth.

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By demonstrating the features and strengths explained so far,
NESIC holds the position of a top system integrator in
networking in Japanese ICT service industry.

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Here I d like to mention current financial situation. We must
admit that this fiscal year we are suffered from severebusiness condition and both of 9 months sales and income
decreased from the previous same period. Telecom carriers
investment drastically decreased as the connectivity of their
network has already improved. On the contrary, enterprises
business is expanding constantly focusing our proposal for
management innovation by ICT.

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We are planning 70 yen dividend per stock for this fiscal year.
We have gradually increased dividends in step with our
improved profitability, while focusing on stable dividends. Bybalancing returns to shareholders with investment, we aim togenerate an overall return that satisfies all shareholders.

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Next, I will explain about our business opportunities for thenext growth.

24Let s take a look at the business environment.
As I mentioned earlier, telecom carriers are now cutting theirinvestments, and no significant recovery is expected. For the
next fiscal year, the digitalization of fire‑fighting radio
networks has come to an end and we do not expect major
sales growth. However, there are several promising moves forthe future.
In the corporate area, the scope of work‑style reform will
expand from work in offices to work that is not bound to aparticular place.
In the infrastructure area, the foundation for the next‑generation 4K and 8K broadcasting standards and urban
infrastructure, including roads and rail transport, will bestrengthened in preparation for the Olympic Games.
Investments in various disaster information networks are alsoexpected.
Outside Japan, development of the communication
infrastructure and many other kinds of social infrastructure will
be stimulated in Southeast Asia.
In addition, there is anticipation for expansion of services in
new domains, such as IoT and MVNO.
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With this perception of the environment, our strategy is tostep up and expand both the service business and theinfrastructure business.
The service business is the pillar of our stable growth.
Meanwhile, in the infrastructure business, large and active
investments will be made to meet special demand in specificprojects such as terrestrial digital broadcasting anddigitalization of fire‑fighting radio networks. It is vital to takethe greatest possible advantage of these business
opportunities by adeptly moving with the tide of investments.
In addition, we will respond positively to overseas
infrastructure demand, mainly in Asia.
We will also venture into new businesses to identify market
needs.
Now I will briefly talk about these efforts.

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First, for the service business, the use of ICT will further
expand in domestic and international collaboration between
different locations and in mobile working. In particular, we will
see the accelerated resolution of social issues such as female
empowerment and nursing care, diversification of working
styles and expansion of teleworking. The cloud and security
will be more and more important as foundations for theseservices.
In response to these changes in market needs, we will evolve
our EmpoweredOffice business, from reforming work‑styles inoffices to creating workplaces for inter‑locational work that are
not bound to a single location, such as by working at visiting
destinations or teleworking.

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As shown in this slide, we have already introduced theSmoothSpace as a solution for encouraging communication
with remote locations to overcome distance. Employing
projection mapping technology, it virtually links branches andother remote offices in the vicinity. This opens the way forsharing the atmosphere of one place and establishing casualforms of communication. It has already created new ways ofworking, which can be seen in the trials at unmanned outlets
conducted by a financial company.

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In the infrastructure business, we foresee a rise ininvestments made in infrastructure that supports a safe,secure, and comfortable society. The market sizes mentioned
here are roughly estimated figures, but without doubt
investments in these areas will grow.
One promising area in the infrastructure business is thebroadcasting.
The next‑generation 4K or 8K broadcasting sends a large
amount of data, so it is difficult to transmit it via terrestrial
broadcasting, requiring it to be redistributed on CATV. As aresult, copper cables, which still make up a large proportion of
the CATV infrastructure, will be increasingly replaced withoptical cables.
In addition, we will actively work to meet the demand,
realizing that the replacement of broadcasting studioequipment will spread from the key stations to provincialstations.
As the year 2020 approaches, there will be growing demand
for monitoring and security solutions based on video
technologies. We will step up our efforts in this domain, too.

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In the overseas business, our local subsidiaries serve as ourbusiness foundations. We will endeavor to expand thisbusiness mainly in the ASEAN region, where the market isexpected to grow. We will focus our efforts is social
infrastructure, which centers on telecommunications and rail
networks. A project in Myanmar is referred to here as an
example because there will be large‑scale infrastructure
investments in this country in ASEAN. In April last year, welaunched a branch office of our Thailand‑based subsidiary inYangon. This has already produced some positive effects,
winning orders for the installation of base stations for mobile
communication and for equipment related to satellitecommunication.
In the energy sector, we also have achieved good results. For
example, we have installed solar power generation systems inthe mountainous regions without electric power utility services
in the northwest and southwest of Myanmar. It is important toemploy local operators to carry out construction work inregions like these, which take several days to reach fromYangon. We will make full use of the capacity of community‑
based local subsidiaries in a bid to help this business expand.

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In regards new businesses, we launched the MVNO service inOctober 2015. This action is aimed at bolstering the IoT
business. In this field, where rapid growth is anticipated, weare able to display our strength in offering an extensive
service encompassing equipment procurement, installation,
network integration, maintenance, and operation services. In
addition, we provide flexible network service that suit thepurposes of customers, and will differentiate ourselves fromthe competition by offering a vertically integrated service.
Because the services in this business may be used in manydifferent business fields, we will press ahead with collaboration
with many device vendors and sales partners.

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As I have mentioned earlier, our business segments currently
face difficult circumstances, but in the future there will bemany market opportunities for growth. We will work together
as one to unfailingly take advantage of these market
opportunities and achieve business growth.
Thank you for your attention.

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