Profile Contents Cautionary Statement with Respect to Forward-Looking Statements

Transcription

1 Year Ended March 31, 2

2 Profile Nippon COMSYS Corporation was established in 1951, during Japan s postwar turmoil, to undertake the rebuilding of the country s communications infrastructure. That was the year before Nippon Telegraph and Telephone Public Corporation was privatized, becoming the firm we know today as Nippon Telegraph and Telephone Corporation (NTT). At that time, the primary function of COMSYS was to execute telecommunications construction projects in support of NTT. The Company subsequently made a place for itself in the industry on the basis of its successes in the postwar construction of Japan s telecommunications infrastructure, and has remained an industry leader to this day. Because we recognize the importance of novel and creative thinking, each of our employees brings pride to his work, and can take satisfaction in the results of his efforts. Further, by giving maximum freedom of expression to talent and ability, we have fostered an open and innovative corporate culture. In building this team of talented and creative people, we at Nippon COMSYS Corporation are actively working to realize a splendid future, one flourishing with as-yet unborn possibilities. Contents Five-Year Financial Summary 1 To Our Shareholders 2 Our Medium-Term Management Plan 3 Construction Flow for COMSYS s Telecommunications Equipment 4 Our Operations: an Overview 5 An Introduction to Our New Businesses 7 Activities to Preserve the Earth s Environment 8 Financial Section (Non-Consolidated Basis) 9 Non-Consolidated Statements of Income (1 Years) 21 Non-Consolidated Balance Sheets (11 Years) 22 Consolidated Subsidiaries and Affiliates 24 Group Companies 25 Comparison of Three Major Telecommunications Construction Companies in Japan 26 Stock Price Information 27 Brief History of COMSYS 28 Corporate Information 29 Cautionary Statement with Respect to Forward-Looking Statements This Investors Guide contains forward-looking statements that reflect management s views and assumptions in the light of information currently available with respect to certain future events, including expected financial position, operating results and business strategies. These statements can be identified by the use of terms such as will, believes, should, projects, plans, expects and similar terms and expressions that identify future events or expectations. Actual results may differ materially from those projected, and the events and results of such forward-looking assumptions cannot be assured. Any forward-looking statements speak only as of the date of this Investors Guide, and COMSYS assumes no duty to update such statements. Factors that may cause actual results to differ materially from those predicted by such forward-looking statements include, but are not limited to, unanticipated changes in demand for the Company s principal business, owing to changes in the economic conditions in the Company s principal markets; the impact of increased competition; uncertainties as to the results of the Company s research and development efforts and its ability to access and protect certain intellectual property rights; and the impact of regulatory changes and accounting principles and practices.

3 Five-Year Financial Summary Consolidated (Millions of yen) 19/3 19/3 1999/3 2/3 2/3 New Orders Received during the Year 226, , , , ,211 Net Sales 221, ,313 22, ,75 222,22 Operating Income 13,733 14,348 14,261 15,559 11,628 Income before Income Taxes 13,675 14,333 13,522 13,54 9,117 Net Income 6,831 8,39 5,625 6,315 4,4 Total Assets 158, ,67 171, , ,25 Shareholders Equity 68,9 94,654 1, , ,55 (Yen) Primary Earnings per Share Book Value per Share Net Sales 25, 2, 15, 1, Consolidated Non-Consolidated Consolidated/Non-Consolidated (Times) Operating Income 17,5 14, 1,5 7, Consolidated Non-Consolidated Consolidated/Non-Consolidated (Times) Non-Consolidated 5, 1. 3,5 1. (Millions of yen) 19/3 19/3 1999/3 2/3 2/3 New Orders Received during the Year 225, , , , ,486 Net Sales 22,59 224,13 219, , ,586 Operating Income 13,582 14,61 13,877 13,626 1,42 Income before Income Taxes 13,3 14,41 12,755 1,781 7, Net Income 6,267 7,611 5,75 5,818 4,283 Total Assets 154,246 16, ,2 171,82 174,118 Shareholders Equity 65,96 9,1 96,635 11,4 112,529 15, Consolidated Non-Consolidated 99 Income before Income Taxes.95 Consolidated/Non-Consolidated (Times) 1.2 Net Income 1, Consolidated Non-Consolidated Consolidated/Non-Consolidated (Times) 1.2 (Yen) Primary Earnings per Share Book Value per Share , , 1.15 Ratios of Consolidated to Non-Consolidated Performance 9, 1.1 6, 1.1 (Times) 19/3 19/3 1999/3 2/3 2/3 Net Sales Operating Income Income before Income Taxes Net Income Number of Consolidated Subsidiaries and Affiliates , 3, , 2, I n v e s t o r s G u i d e 2 1

4 To Our Shareholders HIRONOBU TAKEUCHI, President COMSYS Selected as Top IR Firm In September 2, COMSYS was cited for having the best investor relations program of any firm in the construction industry by the Securities Analysts Association of Japan, indicating the degree to which stock market analysts and investors have recognized our vigorous efforts at data disclosure. We thank all who played a part in our winning this award, and pledge to continue the policies that led to it. A Look at the Past Fiscal Year A decline in orders received was projected for the fiscal year just past, as a result of NTT s reduced capital investments. However, in view of the expansion of the information communications market and forecasts of economic recovery the COMSYS Group as a whole strove for growth in revenues and profits. However, the Japanese economy remained sluggish, and despite a significant increase in non-ntt infrastructure-construction orders, the Company recorded an overall decline in orders received for the fiscal year. Net sales were also stagnant, although we received a large number of orders in the second half of the term. In addition to the foregoing, competition for contracts had an adverse impact on the Company s profit ratios, with the result that we were unable to achieve our goal of revenue and profit growth. Nonetheless, and despite the extremely difficult business environment, we are striving to meet that goal by March 22. Outlook Over and above our goal of achieving growth in revenues and profits by March 22, COMSYS is directing a great deal of effort into structural reforms designed to build a base for expansion, and to allow us to ride the crest of the tsunami created by the IT revolution. The first and most important element in this is technological expertise. In addition to official certifications and vendor certifications, COMSYS has proprietary technology and expertise accumulated over long years of experience. The sum of these capabilities is more than adequate to assure our survival, even under the present adverse circumstances. To ensure the continuing soundness of the Company s existing technological expertise and know-how, of course, we are energetically mastering new technologies and developing proprietary technologies. The second element in our effort is competitiveness. We are employing our comprehensive technological capabilities to implement a system that will allow us to realize a set profit through competitive pricing. The recent declining trend in the value of contracts is very severe, and simple cost reduction through thrift and avoidance of waste is not a sufficient response. We have embarked on a sweeping reevaluation of our operations, and are undertaking a complete restructuring of our personnel system. Establishing Systems and Entering New Fields To achieve a companywide expansion of orders received, COMSYS merged its NTT and non-ntt sales operations in July 2. To achieve further efficiency in the unified application of its human resources and technological assets, the NTT and non-ntt operational arms were also integrated. In April 2, we reorganized Solutions Business Division, breaking off its sales operations and bringing them into our Sales and Marketing Headquarters. This will allow Total Business Solutions sales personnel access to all information coming into and out of our other sales divisions, promoting the early development of a high-value-added total solutions business. Moving to meet the forecast diversification of customer requirements, we are preparing to expand our current maintenance and upkeep services to a total business solutions operation. In this connection, Engineering and Construction Department III has been renamed the Customer Services Department, and now has its new systems and organizations in place. COMSYS is taking a wide view of the opportunities it faces, moving from challenge to challenge as it enters new fields of business and offers new services. We have recently established a Business Development Department to support this effort, and to promote our participation in environmentally friendly business such as wind power generation, we have established the Eco-Power Office. This opening year of the 21st century is also a significant year for COMSYS, as it marks the 5th anniversary of our founding. In August 2, the construction of a new headquarters building was completed. Our entire Company is active in its support of the high-order information society, and, as a comprehensive engineering firm of the new era, we welcome the challenge of laying a sound cornerstone for the future. COMSYS requests the continued support of its shareholders, clients, business partners, and employees in these endeavors. Hironobu Takeuchi President and Representative Director July 2 2 I n v e s t o r s G u i d e 2

5 Our Medium-Term Management Plan Our medium-term management plan, which came into effect in fiscal 2, calls for us to achieve net sales of 32 billion by fiscal 25. During that period, the telecommunications construction market is forecast to grow, and the IT revolution will bring sweeping changes. Demand for mobile telephone services has outstripped demand for fixed telephones, the rapid advance of information communications technology is altering the face of the telecommunications industry, and information technology will be the catalyst for major changes to the very structure of the information-based society and economy. NTT-related projects now make up 6 percent of our total net sales. This percentage is forecast to shrink, and we are pursuing our entry into non-ntt markets at a rapid pace. We are focusing on a new type of business, in which we offer systems and services tailored to the client s individual needs in the form of a solutions package. Our medium-term management plan sets forth six key factors that establish new goals. These are: entering new markets with appropriate strategies, training and keeping highly skilled personnel, taking steps to rationalize management, expanding and bolstering our subcontracting system, developing unique new technology, and developing our corporate culture. These policies are designed to keep us from falling behind in the age of information technology, and to achieve flexible expansion of our operations. In this period of change, hesitation can put a firm behind the cutting edge in an instant. Despite the fact that we are a leading company in our industry, these circumstances require us to face the risk to the Company s continued survival. To that end, we at COMSYS are engaged in a revolution of our own. Performance Indicators Net sales ( 1 million) 2/3 26/3 Percent (Performance) (Planned) change NTT Projects 1,291 1,15.89 Other Business 864 2, Total 2,155 3, Recurring Profit ( 1 million) Recurring Profit Margin (%) Number of Employees 3,588 3, Japan s Telecommunications Construction Market NTT Non-NTT Trends in the Information Services Market Sales Goals by Sector Information Services Hardware Maintenance Software Development NTT Outside Projects NTT Inside Projects Domestic Construction and Engineering Information Systems Overseas Construction ( 1 million) 2, ( 1 million) 25, ( 1 million) 35, 16, 2, 28, 12, 15, 21, 8, 1, 14, 4, 5, 7, I n v e s t o r s G u i d e 2 3

6 Construction Flow for COMSYS s Telecommunications Equipment Radio Broadcasting System Data Center Broadcast Satellite/Communications Satellite Broadcasting Station Server/HUB/Router LAN/WAN Call Center Broadcast Satellite/Communications Satellite Broadcasts CTI Business User Ground Wave Broadcast Cable Broadcasting System Cable Television Firm Solar Power Facility ATM Switch Land Station Home User WDM Equipment Mobile Telephony Switching Station Submarine Optical Fiber Cable Home User Telephone FAX PC Home User Microwave Transmitter Relay Station Land Station WDM Equipment Switch Switch Radio Base Station Local Swich Bldg. Swich Router Junction Swich Bldg. Router Toll on Trank Bldg. Server Core Router Wire-link Communication System Toll on Trank Bldg. Switch Mobile Telecommunication System Radio Telephony System Mobile Telephone PDC W-CDMA CDMA2 Internet Provider Home User FWA Cable Feeder Point Server Core Router Junction Swich Bldg. Local Swich Bldg. Router Swich Router Home User ADSL FTTH Optical Fiber Cable Cable Feeder Point 4 I n v e s t o r s G u i d e 2

7 Our Operations: an Overview Communications Infrastructure Projects Outside Projects As the high-order information society continues to advance, the focus of communications is shifting from voice to digital data. For this reason, Japan needs to develop an Internet-provider network, beginning with high-speed broadband access facilities. Since its founding in 1951, reliable technological expertise has kept COMSYS in the forefront of the telecommunications construction industry, and the Company has played a significant role in the building of Japan s communications infrastructure. In this era, with the IT revolution progressing at an accelerating pace, COMSYS is pursuing leading-edge technology and demonstrating an eagerness to take on these new challenges. At the same time, we are contributing to the growth of the communications society. Inside Projects Cable-Tunnel Construction Project (underground tunnel construction) This shows the laying of high-capacity underground communications cables. Such projects are complex, as urban areas lay not only communications cables underground, but also gas lines, water lines, and various other infrastructure. COMSYS s high technological level allows the Company to carry out high-level projects, and has executed approximately one-third of all such communications tunnel projects in Japan. Conduit Line Construction Project by the Open-Cut Method Digging directly from the surface, COMSYS installs CC BOX and Information BOX facilities. Because telephone poles are eliminated, these facilities are more resistant to natural disaster, and contribute to urban beautification. Cable Engineering Works Project (installation of communications cables) COMSYS is engaged in the design, installation, and testing of communications cable networks in various locations, including cable systems linking the various NTT buildings and linking the facilities of other common carriers, and cable systems within intelligent buildings. The Company is also linking family homes to various services using telephone lines. More than telephone lines, the Company is engaged in the building of optical-fiber, cable television, Internetprotocol, and other communications networks. Switching System and Transmission Equipment Projects COMSYS is engaged in the installation of switching systems and transmission equipment, together with the installation, connection, and maintenance of cables, connectors, and other peripherals. We are building systems and facilities that allow the error-free switching and long-distance transmission of the information that comes through telecommunications providers. Electric Power Equipment Projects To enable communications facilities to function smoothly, an infrastructure of power generation facilities, battery-charging equipment, converters, cable connections, and maintenance services is necessary. COMSYS is engaged in the construction and expansion of this infrastructure, and is building electric power systems suited to supply the communications facilities and equipment of telecommunications firms. I n v e s t o r s G u i d e 2 5

8 Mobile Communications Projects Information Systems The Company executes all phases of the construction of mobile telephone base stations, from selection of locations and negotiations of property rights, to the design, execution, and testing of the stations themselves. Because base stations must be designed to suit and constructed in a wide variety of environments, a high degree of technological expertise and specialized knowledge is required. For this reason, COMSYS is ideally suited to operate in the field of mobile telecommunications projects. COMSYS is also expected to play a large role in the construction required for full-scale implementation of next-generation IMT-2 mobile telephone services. The Company is participating in the development of various commercial systems, and has built a substantial track record in the development of business applications, network solutions, and database solutions. We also propose, develop, and supply total business solutions, including infrastructure applications and control systems, to NTT and other common carriers. COMSYS is also producing programming for digital satellite broadcast television. Digital broadcasting allows for two-way information flow, which makes interactive programming possible, and this latent capability will in the future become a reality. A Steel Tower for a Mobile Telecommunications System COMSYS has built the best track record in the industry for the construction of steel towers for mobile telecommunications systems. We are bringing our technology and experience to bear in the execution of tower projects in a number of locations, including the roofs of the NTT Building and other high-rises. Aiming a Microwave Antenna The correct aiming of microwave antennae to ensure the efficient transmission and reception of microwave signals is an important element of our telecommunications infrastructure. A key to winning these important contracts is the trust born of experience and a reputation for the ability to produce highquality work. COMSYS personnel preview a satellite-broadcast program with the clients who ordered it. Base station for a mobile telecommunication system (in a suburb) Antenna on a building roof for a mobile telecommunication system (in a city) A Mobile Telephone Base Station In the suburbs, mobile telephone antennae are usually free-standing towers. In cities, they are usually located on the roofs of high-rise buildings. Over and above the construction of base stations, COMSYS offers integrated services that include the installation of electric power sources, transmitter equipment, and other related facilities and equipment. Test Operation of Switching Equipment COMSYS has a comprehensive contract for the design and construction of this mobile telephone facility, which will include backward-compatible mobile telephone equipment, IMT-2-capable switching systems and transmitter equipment, as well as electric power facilities. A screen shot from one of the Company s digital satellite broadcast programs. Digital technology greatly increases the number of channels available, leading to forecasts of expanded demand for programming. COMSYS is positioning itself to take advantage of the business opportunity this represents. 6 I n v e s t o r s G u i d e 2

9 An Introduction to Our New Businesses COMSYS is developing a series of new businesses, taking information technology as its key theme; and, as it implements its mid-term management plan, the Company has made its entry into new fields an important issue. To support the energetic development of the new possibilities born of our long years of operation in our existing fields of business, as well as the new possibilities seen as we take a wider view that includes those areas that extend beyond our existing operations as a comprehensive engineering firm, we have established the Business Development Division. This is part of our companywide effort to become a total business solutions provider. Customer Services Department Projects continue to emerge that involve PBX and LAN facilities and the replacement of our customers internal systems. In this connection, the Company is engaged in the replacement of systems, the rewiring of offices, the installation of new systems, and the expansion of existing systems. Together with this, we are providing support and maintenance for these systems. Japan s protracted economic doldrums have resulted in restrained capital investment, but demand for maintenance and expansion of existing facilities remains strong. COMSYS, therefore, has bolstered the capabilities of its Engineering and Construction Department III, which previously handled these maintenance operations, redefined the department s mission, and renamed it the Customer Services Department. This is indispensable to total services in large-scale systems projects and maintenance. Many customers will not let a contract to a firm that does not offer the support of a comprehensive maintenance system. COMSYS offers the benefits of 24-hour service and a nationwide maintenance service network. The Customer Services Department provides four capabilities: sales and marketing, maintenance and upkeep, a troublecall center, and network monitoring. This Department offers integrated services ranging from the construction of systems and the installation of switching equipment and system terminals, to maintenance and repair. We expect that our ability to offer total business solutions and the capabilities of our support staff will earn us a substantial share of this business. Scope of Maintenance Responsibilities User Commercial Market Ordinary End User Market Target Business System Location Sales and Marketing Operation Maintenance IP Node Internet Service Provider Interface WAN LAN Communications Building Internet Data Center User Residence Large Building User Premises NTT Sales Division, Government Sales Division NTT DoCoMo Sales Division, Corporate Sales Division NTT Sales Division II, Customer Services Department NTT Sales Division II, Corporate Sales Division Government Sales Division, Customer Services Department Solutions Business Division Access Engineering Division Network Engineering Division Engineering and Construction Department I Customer Services Department The Eco-Power Office Because the Company s environmental business has taken its place with our other important operations, COMSYS has established an Eco-Power Office within its Architecture Department. This office will plan and promote projects that are gentle on the environment. About three years ago, we employed our expertise in steel-tower construction to the building of a wind power generation facility in the Souya Peninsula, Sarufutsu, Hokkaido, erecting two 75 kw windmill-driven generators. In another project, in the Shimokita Peninsula, Mutsuyokohama, Aomori Prefecture, we have started construction of two 9 kw generators. In that same prefecture s Misawa City, we submitted a plan for another large project, and have commenced a study of wind conditions. Problems to be surmounted are not few, and include the balance between the cost of generation and the price of electricity. However, saying also that the efficient use of natural power sources is the wave of the future, in February 2 the Agency of Natural Resources and Energy announced a goal of increasing such power from 3, kw to 3 million kw by 2. A steady expansion of demand, therefore, can be expected. Business Development Division Beginning in June 2, COMSYS will inaugurate LAN/WAN construction services for small office/home office (SOHO) users, Internet service providers (ISP), and other medium and smallscale users. To the present, it has been common knowledge within the network construction field that obtaining different types of commercial services separately resulted in higher charges. However, taking a completely new look at business flow, from outsourcing and schedule management to billing control, maintenance, and other aspects, COMSYS has succeeded in reducing the cost of service packages through integrated procedures spanning the entire service process. Unified control of this entire system is exercised over the Web. This makes network construction so easy for our customers that we liken it to a visit to a convenience store, and that s what we call it in Japanese: LAN Konbini, our LAN Convenience Store service. Through the actual operation of this system we will recognize and respond to increasingly specific needs with specifically designed services and systems. In this way we will endeavor to earn our clients trust, while gauging market permeation. I n v e s t o r s G u i d e 2 7

10 Activities to Preserve the Earth s Environment COMSYS recognizes environmental problems to be one of its most important management issues, and gives environmental business a prominent place in its operations. In June 2 the Company acquired ISO-14 certification, demonstrating our compliance with international environmental standards. Based on our established basic policy on the environment and our action guidelines, we are cooperating with regional societies to protect the global economy. Basic Policy on the Environment Nippon COMSYS Corporation, as a comprehensive telecommunications engineering firm, is continuously engaged in the protection of the global environment, and is contributing to the building of a future in which men and nature live in harmony. Action Guideline 1. To reduce the burden on the environment represented by our business activities, we will include environmental concerns and establish environmental goals for each of our construction projects, while conducting continuous improvement of our environmental management systems. 2. We will comply with all environmental statutes and regulations. 3. To prevent pollution, we will in all our operations reduce and recycle industrial waste and, in our office operations, we will practice resource and energy conservation and promoting green procurement. 4. We will achieve an enhanced awareness of environmental issues on the part of all our employees and everyone concerned with our construction projects, and will establish strong, cooperative relationships with regional societies. COMSYS s Environmental Management System COMSYS s Environmental Goals 1. Reducing electricity consumption sto reduce electricity consumption in our major buildings to 3 percent below its 1999 level by Reducing office paper use sto reduce paper consumption in our major buildings to 1 percent below its 1999 level by Increasing paper recycling sto increase paper recycling in our major buildings to 7 percent by Reducing and recycling industrial waste sto achieve thorough sorting of industrial waste by expanding the role of on-site construction offices in sorting, and thereby to enable reductions in industrial-waste generation, as well as increased recycling of industrial waste. 5. Promoting concern for the environment in facilities design sto increase proposals for the use of facilities with less environmental impact. 6. Promoting green procurement practices sto expand green procurement of office consumables and supplies. 7. Reducing the Company s vehicle use Review of management (Action) Continuous improvement Establishing environmental policies (Policy) sto reduce the Company s vehicle ownership to 2 percent below its 1999 level by 22. sto reduce the Company s vehicle leasing to 5 percent below its 1999 level by Improving methods of handling soil excavated in telephone pole installation sto improve procedures for handing soil excavated in telephone pole installation. Inspection and corrective measures (Check) Activity results and implementation (Do) Assessment of environmental impact and planning (Plan) 8 I n v e s t o r s G u i d e 2

11 Financial Section (Non-Consolidated Basis) Contents Performance Operating Results 1 Performance by Business Category 11 NTT Construction 12 Domestic Construction and Engineering 13 Overseas Construction, Information Systems 14 Key Financial Indicators Profitability 15 Efficiency 16 Stability 17 Per Share Data 18 Per Employee Data 19 Other Data 2 Non-Consolidated Statements of Income (1 Years) 21 Non-Consolidated Balance Sheets (11 Years) 22 Consolidated Subsidiaries and Affiliates 24 Group Companies 25 Comparison of Three Major Telecommunications Construction Companies in Japan 26 I n v e s t o r s G u i d e 2 9

12 Performance Operating Results New Orders Received during the Year Net Sales Gross Profits/Operating Income Gross Profits Operating Income Income before Income Taxes Net Income 25, 25, 35, 15, 8, 2, 2, 28, 12, 6,4 15, 15, 21, 9, 4,8 1, 1, 14, 6, 3,2 5, 5, 7, 3, 1, (Millions of yen) 1992/3 1993/3 1994/3 1995/3 1996/3 19/3 19/3 1999/3 2/3 2/3 New Orders Received during the Year 124, ,73 135, ,34 186,18 225, , , , ,486 Net Sales 122, , ,37 152,213 18,629 22,59 224,13 219, , ,586 Contract Backlog at End of Fiscal Year 54,727 57,29 56,754 47,575 53,126 57,683 68,457 77,531 75,174 78,75 Gross Profits 13,616 13,658 16,632 18,8 21,965 27,89 27,838 26,491 26,599 23,84 Operating Income 3,551 3,929 5,6 7,42 8,544 13,582 14,61 13,877 13,626 1,42 Income before Income Taxes 3,729 4,71 5,759 7,127 8,92 13,3 14,41 12,755 1,781 7, Net Income 1,539 1,631 2,419 3,637 3,742 6,267 7,611 5,75 5,818 4,283 Note: For the purpose of supporting an affiliate in Thailand, a portion of construction orders received in FY March 2 was assigned to the said company. As a result, our contract backlog at the end of FY March 2 decreased by 3,369 million. 1 I n v e s t o r s G u i d e 2

13 Orders Received by Business Category (Millions of yen) 1992/3 1993/3 1994/3 1995/3 1996/3 19/3 19/3 1999/3 2/3 2/3 NTT Group Construction Outside Projects 43,577 47,118 51,94 55,723 71,123 78,6 74,38 69,221 58,183 48,737 Inside Projects 44,24 42,882 49,264 5,414 6,6 78,164 81,457 73,81 74,856 77,894 Subtotal 87,6 9, 1,24 16, , ,14 155, ,31 133,39 126,631 Orders Received by Business Category 25, 2, 15, Outside Projects Inside Projects Overseas Construction Information Systems Domestic Construction and Engineering Overseas Construction 6,395 7,54 1,2 4,59 8,78 11,468 9,362 4,44 4, Domestic Construction and Engineering 17,282 18,948 2,732 18,869 31,196 41,58 53,792 63,845 68,69 78,672 Information Systems 13,49 11,621 11,844 13,969 15,21 15,481 16,228 17,918 18,114 16,359 Total 124, ,73 135, ,34 186,18 225, , , , ,486 1, 5, Net Sales by Business Category (Millions of yen) 1992/3 1993/3 1994/3 1995/3 1996/3 19/3 19/3 1999/3 2/3 2/3 NTT Group Construction Outside Projects 44,724 49,96 5,484 58,646 7,494 79,36 75,658 68,562 63,254 54,52 Inside Projects 46,26 4,765 48,813 52,47 59,119 8,81 74,339 74,385 77,714 74,647 Subtotal 9,75 89,861 99,2 111,53 129, , ,9 142,947 14, ,167 Net Sales by Business Category 25, 2, 15, Outside Projects Inside Projects Overseas Construction Information Systems Domestic Construction and Engineering Overseas Construction 3,761 3,738 4,274 8,729 6,6 8,925 1,545 7,85 3,7 1,314 Domestic Construction and Engineering 15,472 19,467 2,944 19,392 28,76 37,415 47,476 52,411 64,56 68,3 Information Systems 12,599 12,75 11,522 13,39 15,613 14,863 16,85 16,556 17,611 16,132 Total 122, , ,37 152,213 18,629 22,59 224,13 219, , ,586 1, 5, Contract Backlog at End of the Year, by Business Category (Millions of yen) 1992/3 1993/3 1994/3 1995/3 1996/3 19/3 19/3 1999/3 2/3 2/3 NTT Group Construction Outside Projects 29,288 27,31 28,766 25,843 26,472 26,142 24,522 25,181 2,11 14,327 Inside Projects 5,73 7,82 8,271 6,278 7,219 5,32 12,42 11,845 8,7 12,234 Subtotal 34,991 35,13 37,37 32,121 33,691 31,444 36,942 37,26 29, 26,561 Overseas Construction 7,227 1,993 8,7 4,31 6,114 8,657 7,474 3,668 4, Domestic Construction and Engineering 9,461 8,942 8,73 8,27 1,6 14,34 2,656 32,9 36,139 45,838 Information Systems 3,48 1,964 2,286 3,216 2,624 3,242 3,385 4,747 5,25 5,477 Total 54,727 57,29 56,754 47,575 53,126 57,683 68,457 77,531 75,174 78,75 Note: For the purpose of supporting an affiliate in Thailand, a portion of construction orders received in FY March 2 was assigned to the said company. As a result, our contract backlog at the end of FY March 2 decreased by 3,369 million. Contract Backlog at End of the Year, by Business Category 8, 64, 48, 32, 16, 92 Outside Projects Inside Projects Overseas Construction Information Systems Domestic Construction and Engineering I n v e s t o r s G u i d e 2 11

14 NTT Construction Total Sales of NTT Construction/Percentage of Total Sales Inside Projects Outside Projects NTT Construction s Percentage of Total Sales Total Subscribers of Mobile Telephones PHS Subscribers Fixed Telephones Total Mobile Telephone Subscribers The NTT DoCoMo Group Subscribers NTT DoCoMo Group NTT DoCoMo share Number of Subscribers by Carriers As of March 31, 2 165, (%) 75 (Ten thousand) 7, (Ten thousand) (%) 4, 6 132, 6 5,6 3,2 48 TU-KA Group % 99, 66, 33, ,2 2,8 1,4 2,4 36 1, % 1,99 18.% (Ten thousand) J-PHONE Group au Group NTT DoCoMo Group 3, % (Ten thousand, except where noted) 1992/3 1993/3 1994/3 1995/3 1996/3 19/3 19/3 1999/3 2/3 2/3 Total Subscribers of Mobile Telephones ,2 2,87 3,152 4,153 5,114 6,94 The NTT DoCoMo Group ,96 1,7 2,389 2,936 3,63 Share of NTT DoCoMo (%) PHS Subscribers Fixed Telephones 5,621 5,76 5,878 5,8 6,14 6,146 6,38 5,847 5,545 5,29 (1 millions of yen, except where noted) 1996/3 19/3 19/3 1999/3 2/3 2/3 22/3 (Forecast) Planned Construction 19,9 19,911 18,87 17,279 14,5 13,116 1,31 East Japan Completion of Optical Fiber Cable Installation (%) West Japan Investment in Optical Fiber Cable 1,9 2,31 2,1 2,44 2,4 1,9 1,9 Note: NTT Communications is not included under Planned construction, FY March 22 (Forecast). 12 I n v e s t o r s G u i d e 2

15 Domestic Construction and Engineering Total Sales of Domestic Construction and Engineering/Percentage in Total Sales Sales of Domestic Construction and Engineering Percentage of Domestic Construction and Engineering in Total Sales (%) 75, 4 Domestic Construction and Engineering Orders Received by Major Client Others As of March 31, 2 6, 32 General Contractors 45, 24 Manufacturers 3, 16 NTT Group 15, 8 Government Agencies New Common Carriers Trends in Domestic Construction and Engineering Orders Received from Major Clients General Contractors Government Agencies New Common Carriers NTT Group Manufacturers Others ( 1 Million) I n v e s t o r s G u i d e 2 13

16 Overseas Construction Total Sales of Overseas Construction/Percentage in Total Sales Sales of Overseas Construction Percentage of Overseas Construction in Total Sales (%) 12,5 7.5 Information Systems Total Sales of Information Systems/Percentage in Total Sales Sales of Information Systems Percentage of Information Systems in Total Sales (%) 2, , 6. 16, 1. 7, , 7.5 5, 3. 8, 5. 2, , Major Overseas Projects Completed Nigeria Ibadan new local line project Iraq Installation of telephone lines for 17 local exchanges Egypt Supply and installation of telecommunication cable network in Ismailia and Suez Thailand Installation of digital exchange equipment Taiwan Installation of highway traffic control system Sri Lanka Installation of local telephone lines in the Badulla and Anuradhapura regions Nepal Installation of microwave telecommunications system (inside and remote) Thailand Fifth local cable network installation for TOT in Bangkok and provinces Kuwait Installation of digital loop coil system in Farwaniah Exchange Tanzania Rehabilitation of telecommunications network in Dar es Salaam Thailand Seventh local cable network for TelecomAsia and TT&T Philippines Supply and installation of local cable network for Major Telecom Inc. in Mindanao Philippines Supply and installation of OSP equipment and optical fiber cable for ICC in Manila Philippines Installation of trunk lines and local network for GLOBE Telecom PHASE-2 in Manila and the provinces Thailand The telephone expansion project to overcome short-term line shortage / B.E for TOT (8K) Philippine Supply contract for OSP & optical fiber cable (BAYANTEL 4K) Net Sales of Information Service Industry in Japan ( 1 Million) 11, 88, 66, 44, 99 Source: Ministry of Economy, Trade and Industry, Research and Statistics Department, Preliminary Report on the Survey of Selected Service Industries. 14 Overseas Projects in Progress (As of June 2) Philippines Supply and installation of local cable and junction network for GLOBE Telecom PHASE-4 in Manila and the provinces Philippines Turnkey outside plant network engineering services for EACP in Philippines I n v e s t o r s G u i d e 2 22,

17 Key Financial Indicators Profitability Gross Profit Margin/Operating Margin Gross Profit Margin Operating Margin Pre-Tax Profit Margin Net Profit Margin Return on Equity (ROE) Return on Total Assets (ROA) (%) 13. (%) 7. (%) 3.5 (%) 11. (%) (%) 1992/3 1993/3 1994/3 1995/3 1996/3 19/3 19/3 1999/3 2/3 2/3 Gross Profit Margin Operating Margin Pre-Tax Profit Margin Net Profit Margin Return on Equity (ROE) Return on Total Assets (ROA) Return on Equity (ROE) = Net Income Shareholders Equity (Average of two year-ends) x1 Net Income Return on Total Assets (ROA) = x1 Total Assets (Average of two year-ends) I n v e s t o r s G u i d e 2 15

18 Efficiency Total Assets/Shareholders Equity Modified Working Capital Turnover of Total Assets Turnover of Property and Equipment Total Assets Shareholders Equity 175, 6, (Times) 2. (Times) 9. 14, 48, , 36, , 24, , 12, (Millions of yen, except where noted) 1992/3 1993/3 1994/3 1995/3 1996/3 19/3 19/3 1999/3 2/3 2/3 Total Assets 72,153 86,382 15,45 116, ,61 154,246 16, ,2 171,82 174,118 Shareholders Equity 29,4 31,556 39,821 56,395 59,277 65,96 9,1 96,635 11,4 112,529 Modified Working Capital 17,174 26,92 27,267 47,63 44,693 42,1 57,799 48,544 53,279 56,274 Turnover of Total Assets (times) Turnover of Property and Equipment (times) Modified Working Capital = (Current Assets - Accumulated Cost of Construction in Progress) - (Current Liabilities - Advances Received on Construction in Progress) Turnover of Total Assets = Net Sales Total Assets (Average of two year-ends) Turnover of Property and Equipment = Net Sales Property and Equipment (Average of two year-ends) 16 I n v e s t o r s G u i d e 2

19 Stability Equity Ratio (%) 75 Current Ratio/Quick Ratio (%) 25 Current Ratio Quick Ratio Fixed Assets-to-Equity Capital Ratio/Ratio of Fixed Assets-to-Equity Capital and Long-Term Liabilities (%) 6 Fixed Assets-to-Equity Capital Ratio Ratio of Fixed Assets-to-Equity Capital and Long-Term Liabilities Interest Coverage (Times) 2, , , , (%, except where noted) 1992/3 1993/3 1994/3 1995/3 1996/3 19/3 19/3 1999/3 2/3 2/3 Equity Ratio Current Ratio Quick Ratio Fixed Assets-to-Equity Capital Ratio Ratio of Fixed Assets-to-Equity Capital and Long-Term Liabilities Interest Coverage (times) ,7.57 2,114. 1, , Current Assets - Accumulated Cost of Construction in Progress Current Ratio = Current Liabilities - Advances Received on Construction in Progress x1 Ratio of Fixed Assets-to-Equity Capital and Long-Term Liabilities Property, Equipment, Investments and Other Assets x1 Shareholders Equity + Long-Term Liabilities Quick Ratio Cash, Time Deposits, Marketable Securities and Trade Accounts Receivable x1 Current Liabilities - Advances Received on Construction in Progress Interest Coverage Operating Income + Interest and Dividend Income Interest Expenses Fixed Assets-to-Equity Capital Ratio Property, Equipment, Investments and Other Assets x1 Shareholders Equity I n v e s t o r s G u i d e 2 17

20 Per Share Data Primary Earnings per Share (EPS) Book Value per Share (BPS) Cash Dividends per Share/Payout Ratio Cash Dividends per Share Payout Ratio Common Stock Issued ( ) 65 ( ) 1, ( ) (%) 15 4 (Thousand shares) 14, , , , , (Yen, except where noted) 1992/3 1993/3 1994/3 1995/3 1996/3 19/3 19/3 1999/3 2/3 2/3 Primary Earnings per Share (EPS) Book Value per Share (BPS) Cash Dividends per Share Payout Ratio (%) Common Stock Issued (thousand shares) 71,544 73,353 93, 14, , ,781 13, , , ,842 Note: Primary Earnings per Share is based on the weighted average number of shares outstanding in the respective fiscal years. The others are based on the number of shares outstanding at the end of the respective fiscal years. 18 I n v e s t o r s G u i d e 2

21 Per Employee Data Net Sales per Employee Pre-Tax Profit per Employee Net Income per Employee Number of Employees at Fiscal Year-End (Thousand ) 65, (Thousand ) 4, (Thousand ) 2,5 (Persons) 4, 52, 3,2 2, 3,2 39, 2,4 1,5 2,4 26, 1,6 1, 1,6 13, (Thousands of yen, except where noted) 1992/3 1993/3 1994/3 1995/3 1996/3 19/3 19/3 1999/3 2/3 2/3 Net Sales per Employee 35,179 34,82 36,836 4,241 46,656 57,528 59,921 59,96 61,344 58,936 Pre-Tax Profit per Employee 1,7 1,127 1,56 1,884 2,9 3,493 3,754 3,477 2,924 2,181 Net Income per Employee ,634 2,35 1,383 1,578 1,171 Number of Employees at Fiscal Year-End (persons) 3,541 3,683 3,73 3,862 3,881 3,788 3,692 3,645 3,728 3,588 Net Sales per Employee = Net Sales Number of Employees (Average of two year-ends) Pre-Tax Profit per Employee= Net Income per Employee = Income before Income Taxes Number of Employees (Average of two year-ends) Net Income Number of Employees (Average of two year-ends) I n v e s t o r s G u i d e 2 19

22 Other Data Capital Expenditure Research and Development Expenditure Depreciation Charged against Property and Equipment Percentage of Stock Held by Foreigners 7, 7 1,6 (%) 25 5,6 56 1,28 2 4, , , (Millions of yen, except where noted) 1992/3 1993/3 1994/3 1995/3 1996/3 19/3 19/3 1999/3 2/3 2/3 Capital Expenditure 3,484 3,25 4,118 2,879 1,491 3,246 2,555 5,41 6,528 1,37 Research and Development Expenditure Depreciation Charged against Property and Equipment ,63 1,321 1,468 1,53 1,377 1,188 1,99 Percentage of Stock Held by Foreigners (%) I n v e s t o r s G u i d e 2

23 Non-Consolidated Statements of Income (1 Years) (Millions of yen) 1992/3 1993/3 1994/3 1995/3 1996/3 19/3 19/3 1999/3 2/3 2/3 Net Sales: Construction contracts 19,3 113,66 124, , ,6 25,727 28,8 23,28 28, ,454 Other 12,599 12,75 11,522 13,39 15,613 14,863 16,85 16,556 17,611 16, , , ,37 152,213 18,629 22,59 224,13 219, , ,586 Cost of Sales: Construction contracts,34 1,634 19,84 122,77 145, , , , ,3 176,949 Other 1,662 11,479 1,321 11,488 13,426 12,783 13,446 13,854 15,247 14,833 18, , ,45 134, , ,7 196, , , ,782 Gross profits 13,616 13,658 16,632 18,8 21,965 27,89 27,838 26,491 26,599 23,84 Selling, General and Administrative Expenses 1,65 9,729 1,934 1,6 13,421 14,38 13,777 12,614 12,3 13,42 Operating income 3,551 3,929 5,6 7,42 8,544 13,582 14,61 13,877 13,626 1,42 Other Income (Expenses): Interest and dividend income 1, , Interest expenses (669) (658) (699) (53) (3) (7) (7) (11) (7) (28) Other, net (48) (181) (233) (465) (1,142) (719) (75) (1,742) (3,299) (3,179) (452) (185) (2) (1,122) (2,845) (2,422) Income before Income Taxes 3,729 4,71 5,759 7,127 8,92 13,3 14,41 12,755 1,781 7, Income Taxes 2,19 2,44 3,34 3,49 4,35 7,13 6,43 7,68 4,963 3,6 Net Income 1,539 1,631 2,419 3,637 3,742 6,267 7,611 5,75 5,818 4,283 I n v e s t o r s G u i d e 2 21

24 Non-Consolidated Balance Sheets (11 Years) (Millions of yen) ASSETS 1991/3 1992/3 1993/3 1994/3 1995/3 1996/3 19/3 19/3 1999/3 2/3 2/3 Current Assets: Cash and time deposits 14,925 11,1 16,631 21,649 29,434 25,852 21,171 26,871 21,366 18,746 18,39 Marketable securities 2,675 1,9 5,68 11,931 12,41 17,3 15,411 17,16 11,886 15,818 14,73 Notes and accounts receivable-trade 21,738 18,839 22,8 26,146 27,581 41,671 58,91 56,817 62,258 58,876 64,442 Inventories: Accumulated cost of construction in progress 17,552 2,58 19,848 19,796 18,924 16,8 18,375 15,77 19,235 17,967 17,995 Other Other current assets ,292 1,169 1,25 1,955 4,62 3,512 Less: Allowance for doubtful receivables () (6) (59) (76) (74) (15) (131) (128) (117) (111) (123) Total current assets 58,426 54,183 65,733 8,846 89,242 12, , ,66 116, , ,696 Investments and Other Assets: Investment securities: Subsidiaries and affiliates ,41 1,87 1,53 1,49 1,96 2,214 1,683 Other 2,614 2,588 2,369 2,524 2,526 2,263 4,5 6,293 7,435 7,442 4,77 Long-term loans receivable: Subsidiaries and affiliates , Other 1,48 1,567 1,627 1,66 1,57 2,43 2,769 3,32 3,172 3,242 3,434 Other assets 1,6 1,9 2,426 3,259 2,938 3,83 3,5 4,464 4,372 7,2 11,9 Less: Allowance for doubtful receivables (14) (14) (15) (14) (15) (6) (2) (18) (23) (83) (1,99) Total investments and other assets 6,94 7,472 7,876 8,738 8,88 9,352 12,74 15,48 18,468 2,613 19,831 Property and Equipment: Land 4,527 6,485 7,771 9,711 1,92 14,696 16,32 16,452 17,821 22,157 22,16 Buildings and structures 2,739 3,321 4,928 5,339 7,244 1,4 1,523 1,554 13,275 14,958 15,71 Machinery and equipment 3,858 4,5 5,54 5,19 5,812 6,855 7,79 7,887 8,27 6,184 5,969 Construction in progress ,513 1,828 2,34 2,649 Less: Accumulated depreciation (3,626) (4,221) (5,4) (5,292) (6,186) (7,137) (8,326) (9,283) (1,348) (9,626) (1,258) Total property and equipment 7,862 1,4 12,773 15,866 17,664 24,814 26,247 27,123 3,783 35,77 35,591 Deferred Charges: Discount on notes payable 93 1, Total deferred charges 93 1, ,192 72,153 86,382 15,45 116, ,61 154,246 16, ,2 171,82 174, I n v e s t o r s G u i d e 2

25 (Millions of yen) LIABILITIES AND SHAREHOLDERS EQUITY 1991/3 1992/3 1993/3 1994/3 1995/3 1996/3 19/3 19/3 1999/3 2/3 2/3 Current Liabilities: Short-term bank loans 1,85 1,85 1, Current portion of convertible bonds 393 Current portion of notes and notes with warrants 12,491 7,6 9,867 7,755 7,373 Accounts payable: Trade 11,413 9,171 11,277 12,493 12,578 21,675 29,18 26,8 32,939 35,473 39,232 Other 1,289 1, ,67 2,774 2,228 2,3 1,863 4,216 2,67 Advances received on construction in progress 5,65 6,629 8,711 6,963 4,435 5,257 4,372 3,586 4,38 4,88 5,46 Income taxes payable 1,992 1, 1,671 2,772 2,49 3,649 6,195 3,535 3,748 2, Employees savings deposits 1,499 1,496 1,588 1,831 2,66 Warrants 1,24 2,396 2,351 1, Other current liabilities 1,743 1,593 1,792 2,386 2,29 2,934 2,827 2,277 2,132 2,387 1,949 Total current liabilities 25,436 23,58 27,694 4,746 27,15 46,534 57,388 47,74 53, 48,324 49,833 Long-Term Liabilities: Notes and notes with warrants 12,491 12,491 19,56 16,883 24,638 24,995 15,128 7,373 Convertible bonds 1,388 1,4 1, , 9,418 9,49 9,312 9,312 Accrued severance indemnities 5,519 5,94 6,117 6,188 6,399 6,663 6,161 5,876 5, ,444 Provision for losses from overseas investments 1,592 1,442 Other long-term liabilities ,591 1, ,945 Total long-term liabilities 19,71 19,694 27,132 24,883 33,72 32,799 31,762 22,72 16,357 13,78 11,756 Shareholders Equity: Common stock 6,145 6,338 6,846 1,25 16,869 16,895 17,25 26,592 27,3 31,141 31,141 Additional paid-in capital 3,395 3,587 4,92 7,259 14,96 14,122 14,521 24,94 26,666 3,736 3,736 Legal reserve ,49 1,141 1,271 1,511 1,686 1,834 1,3 Retained earnings 17,683 18,63 19,695 21,563 24,381 27,119 32,54 37,94 4,3 46,689 48,716 Unrealized gain on securities (47) Total shareholders equity 28,46 29,4 31,556 39,821 56,395 59,277 65,96 9,1 96,635 11,4 112,529 73,192 72,153 86,382 15,45 116, ,61 154,246 16, ,2 171,82 174,118 I n v e s t o r s G u i d e 2 23

26 Consolidated Subsidiaries and Affiliates Company Name Location Fiscal year ended December 31, 2 Paid-in Percentage Number Capital Principal Business Owned of Employees Orders Received Net Sales Net Income* Millions of yen % Persons Millions of yen Okoshi Denken Co., Ltd Tokyo, Japan 6 Outside construction ,451 3, Tokyo Denwa Shisetsu Co., Ltd. Tokyo, Japan 4 Outside construction ,456 1, Tsuken Kiko Co., Ltd. Tokyo, Japan 3 Outside construction ,8 1, COMSYS Techno Co., Ltd. Tokyo, Japan 5 Software development ,953 3,48 5 COMSYS Tec Co., Ltd. Tokyo, Japan 9 Outside construction ,135 6, Tokyo Tsuken Co., Ltd. Tokyo, Japan 54 Inside construction ,3 11, Nitto Tsuken Co., Ltd. Tokyo, Japan 6 Inside construction ,848 1, Taiei Seisakusho Co., Ltd. Kanagawa, Japan 6 Design, manufacturing, and sales ,727 4,24 33 of telecommunications equipment COMSYS Net Corporation Tokyo, Japan 5 Inside construction ,315 2, COMSYS Tohoku Techno Co., Ltd. Miyagi, Japan 5 Software development COMSYS Kanto Kita Engineering Co., Ltd. Tochigi, Japan 2 Outside construction COMSYS Shinetsu Engineering Co., Ltd. Nagano, Japan 3 Outside construction ,264 9 COMSYS Kansai Engineering Co., Ltd. Osaka, Japan 15 Outside construction ,937 2, COMSYS Kyusyu Engineering Co., Ltd. Fukuoka, Japan 15 Outside construction ,78 1, *Net income figures are prior to the application of deferred tax accounting. 24 I n v e s t o r s G u i d e 2

27 Group Companies The COMSYS Group At present, the COMSYS Group consists of 35 companies, including Nippon COMSYS. Of these, 23 are involved in outside projects, 3 are involved in inside projects, 2 are software development firms, 4 are overseas subsidiaries, and 3 are in other fields. To allow us to respond to the rapid changes brought by the diversification of projected needs and the intensification of competition in this era of information technology, we are striving throughout the entire group to take cost competition to new levels, and to manifest our ability to coordinate diverse capabilities. All the companies of the COMSYS Group are engaged in continual strategic reorganization, while at the same time increasing the efficiency of our project execution through adjustment of the division of responsibilities and territories. In addition, while fostering the multifaceted technological expertise required by the IT era, the COMSYS group always strives to grow. Business Category Location Company Name 1 Outside Projects Aomori Eto Kogyo Co., Ltd. 2 Outside Projects Tochigi COMSYS Kanto Kita Engineering Co., Ltd. 3 Outside Projects Saitama Jinwa Co., Ltd. 4 Outside Projects Tokyo Okoshi Denken Co., Ltd. 5 Outside Projects Tokyo Tsuken Kiko Co., Ltd. 6 Outside Projects Tokyo Tokyo Denwa Shisetsu Co., Ltd. 7 Outside Projects Tokyo Nisshin Denwa Setsubi Co., Ltd. 8 Outside Projects Tokyo Nippo Kensetsu Kogyo Co., Ltd. 9 Outside Projects Tokyo Sanyo Co., Ltd. Outside Projects Tokyo COMSYS Tec Co., Ltd. - Outside Projects Tokyo Kokusai Densetsu Co., Ltd. = Outside Projects Kanagawa Tsushin Densetsu Co., Ltd. Business Category Location Company Name q Outside Projects Kanagawa Asahi Tsushin Co., Ltd. w Outside Projects Nagano CRT Co., Ltd. e Outside Projects Nagano Odanaka Tsushin Co., Ltd. r Outside Projects Nagano COMSYS Shinetsu Engineering Co., Ltd. t Outside Projects Niigata Nihonkai Tsushin Kensetsu Co., Ltd. y Outside Projects Osaka Yashiro Tsushin Kensetsu Co., Ltd. u Outside Projects Osaka Shin Osaka Tsuken Co., Ltd. i Outside Projects Osaka COMSYS Kansai Engineering Co., Ltd. o Outside Projects Tokushima Tokushima Tsushin Kensetsu Co., Ltd. p Outside Projects Fukuoka COMSYS Kyushu Engineering Co., Ltd. [ Outside Projects Okinawa Ryukyu Tsushin Koji Co., Ltd. ] Inside Projects Tokyo Tokyo Tsuken Co., Ltd. Business Category Location Company Name \ Inside Projects Tokyo Nitto Tsuken Co., Ltd. a Inside Projects Tokyo COMSYS Net Corporation s Software Miyagi COMSYS Tohoku Techno Co., Ltd. d Software Tokyo COMSYS Techno Co., Ltd. f Manufacturer Kanagawa Taiei Seisakusho Co., Ltd. g Leasing Company Tokyo COMSYS Tsusan Co., Ltd. h Trading Company Tokyo COMSYS Business Service Co., Ltd. Overseas Affiliates Outside Projects Philippines COMSYS Philippines, Inc. Outside Projects Malaysia CMC Engineering SDN. BHD. Outside Projects Thailand Thai COMSYS & Jackson Co., Ltd. Outside Projects Thailand COMSYS Thailand Co., Ltd. I n v e s t o r s G u i d e 2 25

28 Comparison of Three Major Telecommunications Construction Companies in Japan Net Sales 245, Nippon COMSYS KYOWA EXEO DAIMEI TELECOM ENGINEERING Operating Income 15, Nippon COMSYS KYOWA EXEO DAIMEI TELECOM ENGINEERING Income before Income Taxes 15, Nippon COMSYS KYOWA EXEO DAIMEI TELECOM ENGINEERING Net Income Nippon COMSYS KYOWA EXEO 8, DAIMEI TELECOM ENGINEERING Net Income per Share ( ) 7. Nippon COMSYS KYOWA EXEO DAIMEI TELECOM ENGINEERING Return on Equity (ROE) (%) 13. Nippon COMSYS KYOWA EXEO DAIMEI TELECOM ENGINEERING 196, 12, 12, 6, , 9, 9, 4, , 6, 6, 3, , 3, 3, 1, Net Sales (Millions of yen) 19/3 19/3 1999/3 2/3 2/3 Nippon COMSYS 22,59 224,13 219, , ,586 KYOWA EXEO 24,26 21, ,564 24,9 19,317 DAIMEI TELECOM ENGINEERING* 93,95 91,27 51,4 1,959,195 Net Income (Millions of yen) 19/3 19/3 1999/3 2/3 2/3 Nippon COMSYS 6,267 7,611 5,75 5,818 4,283 KYOWA EXEO 4,831 4,2 3,611 1,85 3,331 DAIMEI TELECOM ENGINEERING* 1,512 1, ,2 1,325 Operating Income (Millions of yen) 19/3 19/3 1999/3 2/3 2/3 Nippon COMSYS 13,582 14,61 13,877 13,626 1,42 KYOWA EXEO 1,573 9,18 11,28 1,318 7,57 DAIMEI TELECOM ENGINEERING* 3,683 3,228 2,958 5,512 3,455 Net Income per Share (Yen) 19/3 19/3 1999/3 2/3 2/3 Nippon COMSYS KYOWA EXEO DAIMEI TELECOM ENGINEERING* Income before Income Taxes (Millions of yen) 19/3 19/3 1999/3 2/3 2/3 Nippon COMSYS 13,3 14,41 12,755 1,781 7,9 KYOWA EXEO 1,1 7,732 8,69 3,951 6,64 DAIMEI TELECOM ENGINEERING* 3,462 3,262 2,554 4,25 2,57 Return on Equity (ROE) (%) 19/3 19/3 1999/3 2/3 2/3 Nippon COMSYS KYOWA EXEO DAIMEI TELECOM ENGINEERING* *DAIMEI TELECOM ENGINEERING changed the end of its fiscal year from September to March as of fiscal 19. Accordingly, the company s fiscal year that ended in March 1999 is a period of only six months. (Source: Company business reports) 26 I n v e s t o r s G u i d e 2

29 Stock Price Information Common Stock Price Range Trading Volume ( ) 3, (Thousand shares) 35, 2,4 28, 1,8 21, 1,2 14, 6 7, /3 1993/3 1994/3 1995/3 1996/3 19/3 19/3 1999/3 2/3 2/3 Common Stock Price Range ( ) High Price 1,75 8 1,62 1,57 *1,13 *1,28 1,45 1,56 2,2 1,71 2,7 2,37 Low Price ,17 93 * 9 *1,18 1,19 1,24 1,281 1,42 1,636 Trading Volume (thousand shares) 28,385 15, , ,184 92, ,4 144,82 85,78 96,361 94,43 Note 1. The numbers above are based on Tokyo Stock Exchange First Section figures. Note 2. Stock price data marked with an asterisk reflect conditions after a stock split. I n v e s t o r s G u i d e 2 27

30 Brief History of COMSYS Dec Founded as The Nippon Telecommunications Construction Co., Ltd. (NTK). Mar Won first contract for cable-laying and machinery installation. Aug As Japan s only firm with top certifications in cable laying, machinery installation, and radio facilities projects, designated approved contractor by Nippon Telegraph and Our first Head offices building (Dec. 1951) Telephone Public Corporation (now NTT). Jun Won contract for cable installation at a microwave telecommunications relay station as part of a project linking Tokyo, Nagoya, and Osaka. Sep Established our Osaka Branch (now our Kansai Branch). Sep Established our Nagano Branch (now our Shinetsu Branch). Sep Orders received break 1 billion. Dec Completed our 1th microwave station. Jul Increased paid-in capital to 3 million. Jul Listed on the Tokyo Stock Exchange, Second Section. The Bangkok cable project (Dec. 1965) Nov Won our first contract for a Shield Tunneling Method project. Dec Won our first overseas contract (Bangkok). Aug. 1 Established our Urawa Branch (now our Kantonaka Branch). Sep. 1 Won a contract for a satellite-communication Earth station. Jul. 12 Established our Yokohama Branch (Now our Kantominami Branch). Feb. 12 Listed on the Osaka Stock Exchange, Second Section. Satellite communications project (Sep. 1) Nov. 12 Listed on the First Section of the Tokyo and Osaka Stock Exchanges. Dec. 12 Increased paid-in capital to 1.5 billion. Jul. 13 Established our Akita and Utsunomiya Branches (now our Tochigi Branch). Apr. 16 Increased paid-in capital to 2.5 billion. Mar. 12 Established our Hokkaido, Tohoku, Hokuriku, Tokai, Chugoku, Shikoku, and Kyushu Branches. Aug. 12 Won contract for Japan s first fiber-optic cable installation project. Apr. 14 Established our Niigata Branch. Jul. 199 Changed our name from The Nippon Telecommunications Construction Co., Ltd. to Nippon COMSYS Corporation. Cable conversion project (18) Jul. 199 Established our Hokuriku Branch. Feb Certified as comprehensive contractor for telecommunications construction projects by NTT. Mar Won Japan s first contract under the Rapid Reconstruction Project in Kuwait following the Gulf War. Mar Increased paid-in capital to 1 billion. Mar. 19 Orders received and net sales exceeded 2 billion. Jul. 19 Increased paid-in capital to 2 billion. Aug Increased paid-in capital to 3 billion. Apr. 2 Established our Fukushima, Takamatsu, and Okinawa Branches. Jul. 2 Developed the Tuned Rotary-Mass Damper jointly with Tokai University. Sep. 2 Developed SweeCOM, a revolutionary negative pressure and absorption cable installation system, for the efficient laying of fiber-optic cable. Aug. 2 Completed our new headquarters building at 17-1, Higashigotanda 2-chome, Shinagawa-ku, Tokyo. 28 I n v e s t o r s G u i d e 2