The first IT industrial merger between a Japanese affiliate and a local company in Vietnam

NEC Soft, Ltd.’s overseas subsidiary NEC Solutions Vietnam Co., Ltd. merged with Sang Tao Corporation, a leading software company in Vietnam

Hanoi, 4 June, 2008 - NEC Solutions Vietnam Co., Ltd. (“NEC Solutions Vietnam”), headquartered in Hanoi, has merged with Sang Tao Corporation, a well-established software development company in Ho Chi Minh City on 24 May 2008, with the approval from the Hanoi Authority for People’s Committee, Department of Planning & Investment on 31 March 2008. This is the first IT industrial merger in Vietnam between a Japanese affiliate and a Vietnamese company that has been approved by the government of Vietnam.

NEC Solutions Vietnam was jointly established in April 2006 by NEC Soft., Ltd. (“NEC Soft”,) based in Tokyo, and NEC Asia Pte. Ltd. (“NEC Asia”) based in Singapore (previously known as NEC Solutions Asia Pacific Pte. Ltd.) to expand software development and system integration business in Vietnam. Sang Tao Corporation, whose business ties with NEC Soft date back to 2004, before the establishment of NEC Solutions Vietnam, had proposed strengthening of the relationship through an alliance.

Known for diligence of its people and a national policy to foster IT engineers, Vietnam is regarded as a potential destination for conducting software development businesses. Given that the country is enjoying rapid economic growth rate of around 8 % annually and the IT investment growth rate in Vietnam is second after India in Asia, the Vietnamese market is becoming increasingly promising. However, there is intensifying competition as a result of increase in information service companies that have started operations in Vietnam. NEC Solutions Vietnam seeks to retain top-class talent through the merger with Sang Tao Corporation to establish sustainable dominance in the marketplace.

The following is the summary and purposes of the merger with Sang Tao Corporation:

1. Summary of the mergerThe merger was completed on May 24 with NEC Solutions Vietnam as the surviving company and Sang Tao Corporation as an expired company. The surviving company continues to be a company wholly owned by the NEC group.

2. Purposes of the merger

1) Strengthening of the development framework to:
Have some 100 top-class Vietnamese engineers including those with proficiency in Japanese to conduct development projects commissioned by NEC Soft.

2) Acceleration of in-house development to:
Improve efficiency and speed in development projects within the company through reorganization, enhance and stabilize quality standard, and implement centralized management measures for eliminating duplication of administrative expenses and curbing leakage of technologies.

3) Corporate management using local information and human network to:
Win development projects from Vietnam and neighbouring Southeast Asian countries in addition to conducting development projects for the Japanese market. Recruitment of talented personnel will be continued.

Through this merger, NEC Solutions Vietnam now has approximately 150 employees. The number of employees is expected to grow to 300 in the fiscal year starting April 2010 with a sales target of \1.2billion (Yen 1,200,000,000).

In January this year, NEC Solutions Vietnam set up its branch office in Ho Chi Minh City where Sang Tao Corporation was based, and has since engaged in system integration and software development at both its Hanoi and Ho Chi Minh offices. Retaining the local workforce along with this merger, NEC Solutions Vietnam through these two operating offices, will increase its efforts to expand its software development and systems integration businesses in Vietnam, and to develop productive and high-quality software. NEC Soft and NEC Asia will work together to strengthen ties with NEC Solutions Vietnam to expand its solutions services for Japanese companies operating in Vietnam as well as to drive solutions business catering to local companies, which will contribute to the NEC group’s global businesses.

Overviews of NEC Solutions Vietnam, NEC Soft, NEC Asia and Sang Tao Corporation are described in the exhibit.