Registry Operator's Proposal

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II. BUSINESS CAPABILITIES AND PLAN D12. The second section of the Registry Operator's Proposal (after the "General Information" section) is a description of the registry operator's Business Capabilities and Plan. This section must include a comprehensive, professional-quality business plan that provides detailed, verified business and financial information about the registry operator. The topics listed below are representative of the type of subjects that will be covered in the Business Capabilities and Plan section of the Registry Operator's Proposal. D13. The Business Capabilities and Plan section should consist of at least the following: D13.1. Detailed description of the registry operator's capabilities. This should describe general capabilities and activities. This description also offers the registry operator an opportunity to demonstrate the extent of its business and managerial expertise in activities relevant to the operation of the proposed registry. The following items should, at a bare minimum, be covered: D13.1.1. Company information. Date of formation, legal status, primary location, size of staff, formal alliances, references, corporate or other structure, ownership structure. 1.KDD Internet Solutions Co., Ltd. Date of formation : June 6, 2000 Legal status : Corporation Primary location(Head Office) : 1-8-1 Otemachi, Chiyoda-ku, Tokyo, 100-8186, Japan Size of staff : 4 Capital : 100,000,000 CEO : Tohru Asami Ownership structure : KDD 100% 2.KDD Corporation(As of March 31, 2000) Date of formation : April 1, 1953 Legal status : Corporation Primary location : Head Office : KDD Bldg., 2-3-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo 163-8003, Japan Size of staff : 5,289 Capital : 61,777,196,000 President : Tadashi Nishimoto Ownership Structure Principal Stockholders (Top 10) 1. Ministry of Posts and Telecommunications Mutual Aid Association : 8.79% 2. Toyota Motor Corporation : 8.00% 3. Nippon Telegraph and Telephone Corp. : 8.00% 4. Singapore Telecommunications, Ltd. : 4.99% 5. Nippon Life Insurance Company : 4.62% 6. The Dai-ichi Mutual Life Insurance Company : 2.50% 7. The Industrial Bank of Japan, Ltd. : 2.21% 8. The Sakura Bank, Ltd. : 2.18% 9. The Dai-Ichi Kangyo Bank, Ltd. : 2.14% 10. The Bank of Tokyo-Mitsubishi, Ltd. : 2.12% KDDs Latest Financial Data: 1. Consolidated business results (Note: The figures are rounded down to the nearest million yen.)



Fiscal year ended March 2000

Operating revenues

Fiscal year ended March 1999

Unit

597,305

405,721

million yen

47.2

11.2

%

8,875

6,023

million yen

47.4

- 53.4

%

23,112

3,831

million yen



503.3

- 75.4

%

Net income

7,309

- 1,928

million yen

---

---

%

94.24

- 28.26

yen

---

---

yen

Return on stockholders equity

1.9

- 0.5



Ordinary income/Total assets

2.1

0.4



Ordinary income/sales

3.9

0.9



Operating income

Ordinary income

Net income per share Net income per share after making adjustments for latest shares

Note 1: Profit and loss on securities under the equity method Year ended March 2000 : 362 million yen Year ended March 1999 : 595 million yen Note 2: Appraisal profit and loss : 159,713 million yen Derivative dealing appraisal profit and loss : - 1,030 million yen Note 3: The accounting method was changed. Note 4: Percentage representation of sales, operating income, ordinary income and net income shows increase or decrease in percentage terms over previous fiscal year.

2.Consolidated financial status

Fiscal year ended March 2000

Total assets

Fiscal year ended March 1999

Unit

1,139,347

1,045,532

million yen

423,754

359,743

million yen

37.2

34.4

%

5,281.37

4,719.59

yen

Stockholders equity Stockholders equity ratio Stockholders equity per share

3. State of consolidated cash flow

Fiscal year ended March 2000

Cash flow resulted from operating activities Cash flow resulted from investment activities

Unit

45,756

---

million yen

- 70,726

---

million yen

54,067

---

million yen

217,527

---

million yen

Cash flow resulted from financial activities Outstanding amount of cash and cash equivalent at year end

Fiscal year ended March 1999

4. Particulars relating to scope of consolidation and application of equity method Number of consolidated subsidiaries : 31 Number of equity non-consolidated subsidiaries under equity method : 0 Number of affiliated companies under equity method : 4 5. Change in scope of consolidation and application of equity method Consolidated: (new) 7, (excluded) 0 Equity method: (new) 1, (excluded) 0 6. Consolidated forecast for the fiscal year ended March 2001 (April 1, 2000 - March 31, 2001)



Mid-term

End of term Unit

(Sept. 30, 01) Operating revenues

(Mar. 31, 01)

333,000

---

million yen

Ordinary income

7,000

---

million yen

Net income

3,000

---

million yen

(Reference) Estimated net income per share (for the whole fiscal year): --- yen. (Note)This company is due to merge with DDI CORPORATION and IDO CORPORATION on October 1, 2000. 7. Consolidated financial statements (As of March 31, 2000) (1) Comparative consolidated balance sheet (Unit: millions of yen) Assets





Current

Preceding Term

Increase/

Term

Decrease

1. Fixed assets

667,240

673,143

- 5,903



Tangible fixed assets

471,276

525,124

- 53,848



Mechanical facilities

93,733

92,414

1,319



Submarine cable facilities

81,151

43,399

37,751



Buildings and structures

117,221

116,279

942



Land

32,949

38,377

- 5,428



Construction in progress

29,166

114,150

- 84,984



Others

117,055

120,504

- 3,448



Intangible fixed assets

63,474

57,415

6,058



Software

39,320

27,567

11,752



Consolidated adjustment account

2,884

3,756

- 871



Others

21,268

26,091

- 4,882



Investments, etc.

132,489

90,603

41,886



Investment in securities

109,185

62,994

46,190



Deferred tax assets

18,461

---

18,461



Others

21,270

28,140

- 6,869



Allowance for doubtful debts

(-) 831

(-) 531

(-) 300



Reserve for loss from investment

(-) 15,596

---

(-) 15,596





2

Current assets



Cash









469,125

371,755

97,369

42,805

71,893

- 29,088

Note and account receivable

165,904

122,864

43,039



Marketable securities

210,604

139,373

71,231



Others

55,034

41,791

13,242



Allowance for doubtful debts

(-) 5,223

(-) 4,167

(-) 1,055









3. Deferred tax assets

353

633

- 280

2,627

---

2,627

1,139,347

1,045,532

93,814

4. Exchange conversion adjustment account



Total assets



Liabilities





Current

Preceding Term

Increase/

Term

Decrease

1. Fixed liabilities

422,958

442,866

- 19,907



Bonds payable

250,000

250,000

---



Long-term loans payable

105,029

123,392

- 18,362



Allowance for retirements benefits

46,402

50,008

- 3,606



Others

21,526

19,465

2,060











2. Current liabilities

288,129

233,734

54,394



Accounts payable

120,270

74,410

45,859



Others

167,858

159,323

8,534









3. Exchange conversion adjustment account







Total liabilities



---

270



- 270





711,087

676,871

34,216

Minority Interests





Current Term

Preceding Term

Increase/ Decrease

1.

Minority interest

4,504







Minority interests total

8,917



- 4,413





4,505

8,917

- 4,413 Shareholders equity





Current Term

Preceding Term

Increase/ Decrease

1. Capital stock

61,777

40,502

21,274

2. Capital reserve

38,243

16,973

21,270

323,741

302,274

21,466

(-) 7

(-) 6

(-) 0

3. Consolidated surplus 4. Treasury stock









Total shareholders equity



Total liabilities, Minority interests and



423,754

359,743

64,011

1,139,347

1,045,532

93,814

shareholders equity (2) Comparative Consolidated Income and Expense Statement (Unit: millions of yen)



Current Term

Preceding Term

Increase/

(4/01/99 -3/31/00) (4/01/98 - 3/31/99)

Decrease

Ordinary income and expenses







(Operating income and expenses)







Operating revenues

597,305

405,721

191,584

Telecommunications operating revenues

381,468

317,419

64,048

157,844

67,015

90,828

57,993

21,286

36,707

Operating expenses

588,430

399,698

188,731

Telecommunications operating expenses

382,051

314,515

67,535

156,735

65,527

91,208

49,642

19,655

29,987

8,875

6,023

2,852

Communications facilities construction business revenues Other businesses revenues

Communications facilities construction business expenses Other businesses expenses Operating income



(Non-operating income and expenses)





Non-operating revenues

42,198

12,408

29,790

Non-operating expenses

27,962

14,599

13,362

Ordinary income

23,112

3,831

19,280



Extraordinary income and expenses



Extraordinary income



43,536

15,386

28,150

2,193

1,402

791

36,262

13,983

22,278

5,080

---

5,080

60,984

13,775

47,208

Depreciation of R & D assets, etc.

---

2,016

- 2,016

Loss on liquidated affiliated companies

---

1,008

- 1,008

Loss on affiliates support

---

3,960

- 3,960

Management structure improvement

21,626

---

21,626

Transfer to investment loss reserve

15,596

---

15,596

18,468

---

18,468

Special retirement pay

5,292

6,790

- 1,497

Net income before adjustment of taxes, etc.

5,664

5,441

223

Corporate tax, etc.

11,540

7,423

4,116

Adjustment of corporate tax, etc.

- 5,899

---

- 5,899

Loss on minority interests

7,285

53

7,231

Net income or loss

7,309

- 1,928

9,238

Proceeds from sale of land Profit on investment securities sold Profit on equity change Extraordinary loss

Installment for qualified retirement annuity past service cost

(3) Comparative Consolidated Statement of Surplus



Current Term

Preceding Term

Increase/

(4/01/99 -3/31/00)

(4/01/98 -3/31/99)

Decrease

Consolidated surplus at beginning of year

320,225

307,799

12,425

Consolidated surplus at beginning of year

302,274

---

302,274

Other surplus at beginning of year

---

300,273

- 300,273

Profit reserve at beginning of year

---

7,525

- 7,525

17,950

---

17,950

116

273

- 157

6

67

- 60

Increase upon increase of companies under equity method

---

206

- 206

Increase upon merger, etc., of consolidated subsidiaries

110

---

110

Decrease in consolidated surplus

3,910

3,870

40

Dividend

3,715

3,213

501

Officers bonus

11

70

- 59

(of this payment to Auditors)

(-)

( 5)

(- 5)

40

585

- 545

143

---

143

7,309

- 1,928

9,238

323,741

302,274

21,466

Past year tax effect adjustment Increase in consolidated surplus Increase upon increase of consolidated subsidiaries

Decrease upon increase of consolidated subsidiaries, etc. Decrease upon revisions to surplus of consolidated subsidiaries at beginning of year Net income or loss Consolidated surplus at year end (4) Consolidated Statement of Cash Flow (Unit: millions of yen)



Current Term (4/01/99 -3/31/00)



Cash flow resulted from operating activities Net income before adjustment of taxes, etc.

5,664

Depreciation

75,196

Loss from elimination of tangible fixed assets

43,334

Increase in investment loss reserve

15,596

Decrease in retirement allowance reserve

- 3,606

Profit on change in equity

- 5,080

Profit from sales of securities

- 64,898

Loss incurred by appraisal of securities

12,019

Increase in receivable

- 41,000

Increase in inventory turnover

- 7,596

Increase in purchase liability

46,200

Decrease in advance received

- 15,003

Others

- 2,762 (Sub-total)

58,064

Interest and dividend received

3,663

Payment for interest

- 10,905

Payment for corporate tax, etc.

- 5,065

Cash flow resulted from operating activities

45,756



Cash flow resulted from investment activities Expenditure for acquisition of securities

- 11,729

Proceeds from sales of securities

29,548

Expenditure for acquisition of tangible and intangible assets

- 108,401

Proceeds from sales of tangible and intangible assets

30,241

Expenditure for acquisition of investment securities

- 57,697

Proceeds from sales of investment securities

42,587

Others

4,724

Cash flow resulted from investment activities

- 70,726



Cash flow resulted from financial activities Increase or decrease in short-term borrowing

17,328

Proceeds from long-term borrowing

4,080

Expenditure for repayment of long-term borrowing

- 15,426

Proceeds from stock issue

42,545

Proceeds from stock issue to minority shareholders

7,840

Dividends paid by parent company

- 3,715

Others

1,415

Cash flow resulted from financial activities

54,067

Conversion differences relating to cash and cash equivalent

- 1,012

Increase in cash and cash equivalent

28,084

Cash and cash equivalent at year end

187,475

Cash and cash equivalent of new consolidated subsidiaries at beginning of year

1,966

Cash and cash equivalent at year end

217,527

Outline of Individual Financial Statements for Year Ended March 2000 1. Business results (Note: The figures are rounded down to the nearest million yen.)



Fiscal year ended March 2000

Operating revenues

Fiscal year ended March 1999

Unit

395,399

313,160

million yen

26.3

- 1.0

%

9,215

5,321

million yen

73.2

- 51.7

%

25,268

9,425

million yen



168.1

- 43.8

%

Net income

3,927

7,269

million yen



- 46.0

- 14.0

%

Net income per share

50.63

106.50

yen

---

---

yen

Return on stockholders equity

1.0

2.0



Ordinary income/Total assets

2.7

1.2



Ordinary income/sales

6.4

3.0



Operating income

Ordinary income

Net income per share after making adjustments for latest shares

Note 1:Average number of shares during the term: Fiscal year ended March 2000 : 77,562,090 Fiscal year ended March 1999 : 68,256,823 Note 2:The accounting method was changed. Note 3: Percentage representation of sales, operating income, ordinary income and net income shows increase or decrease in percentage terms over previous fiscal year. 2. Stock dividend



Fiscal year ended March 2000

Cash dividends applicable to the year per share

Fiscal year ended March 1999

Unit

50.00

50.00

yen

25.00

25.00

yen

25.00

25.00

yen

3,911

3,416

Million yen

99.6

47.0

%

0.9

0.9

%

(Mid-term) (End of term) Total annual dividends Dividend propensity Dividend/Stockholders equity

Note:Breakdown of dividends for the fiscal year ended March 2000.(yen) Memorial dividend : 00.00 Special dividend : 00.00 3. Financial status



Fiscal year ended March 2000

Fiscal year ended March 1999

Unit

Total assets

943,844

924,733

million yen

Stockholders equity

424,112

371,258

million yen

44.9

40.1

%

5,285.77

4,870.57

yen

Stockholders equity ratio Stockholders equity per share Note 1:Number of stocks issued: Fiscal year ended March 2000 : 80,236,623 Fiscal year ended March 1999 : 76,224,823

4. Forecast for the fiscal year ended March 2001 (April 1, 2000 - March 31, 2001)



Mid-term

End of term

(Sept. 30, 00)

(Mar. 31, 01)

Operating revenues

Unit

191,000

---

million yen

Ordinary income

5,000

---

million yen

Net income

2,000

---

million yen

Dividend per share

25.00

---



total 25.00

yen

(Reference)Estimated net income per share (for the whole fiscal year): --.-- yen. (Note)This company is due to merge with DDI CORPORATION and IDO CORPORATION on October 1, 2000. 5. Individual Financial Statements (As of March 31, 2000) (1)Balance Sheet(Unit: millions of yen) Assets





Current

Preceding Term

Increase/

Term

Decrease

1.

Fixed assets

633,234

641,417

- 8,183



Telecommunications operation fixed assets

435,141

493,389

- 58,248



Tangible fixed assets

377,056

441,912

- 64,855



Mechanical facilities

91,843

91,508

335



Antenna facilities

3,370

10,005

- 6,635



Terminal facilities

856

847

8



Transmission line facilities

29,413

35,435

- 6,021



Civil engineering facilities

39,170

38,722

448



Submarine cable facilities

85,818

44,813

41,005



Buildings

58,483

60,168

- 1,684



Structures

4,470

6,181

- 1,710



Machinery and equipment

3,296

4,251

- 955



Vehicles

99

158

- 59



Tools, instruments, and supplies

11,955

9,286

2,669



Land

24,352

28,728

- 4,375



Construction in progress

23,924

111,805

- 87,881



Intangible fixed assets

58,084

51,477

6,607



Submarine cable usage right

3,105

1,362

1,742



Satellite usage right

4,053

11,745

- 7,691



Facility usage right

4,606

4,275

330



Software

38,362

27,244

11,117



Leasehold

473

536

- 62



Other intangible fixed assets

7,482

6,311

1,171



Non-telecommunication operation fixed asset

22,156

22,510

- 354



Tangible fixed assets

22,149

22,496

- 346



Intangible fixed assets

7

14

- 7



Investments, etc.

175,936

125,517

50,419



Investment in securities

77,919

32,325

45,593



Investment

598

1,654

- 1,056



Investment-affiliated companies

59,552

58,265

1,287



Long-term loan receivable

1,390

2

1,388



In-company long-term loan receivable

6,345

7,439

- 1,094



Long-term loans to affiliated companies

15,916

15,925

- 8



Long-term prepaid expenses

5,506

4,960

546



Deferred tax assets

13,010

---

13,010



Other investments

5,659

5,542

117



Allowance for doubtful debts

(-) 883

(-) 598

(-) 285

(-) 9,080

---

(-) 9,080

310,650

283,315

27,335

Reserve for loss from investment in affiliated companies 2

Current assets



Cash

23,993

47,103

- 23,110



Accounts receivable

73,269

72,245

1,024



Accrued income

21,089

18,546

2,543



Marketable securities

184,948

133,198

51,749



Treasury stock

7

6

0



Stores

3,782

2,585

1,196



Prepaid expenses

951

403

547



Short-term loans to affiliated companies

---

8,612

- 8,612



Deferred assets

3,263

---

3,263



Other current assets

4,327

4,572

- 244



Allowance for doubtful debts

(-) 4,981

(-) 3,959

(-) 1,022



Total assets

943,884

924,733

19,151

Preceding Term

Increase/

Liabilities





Current Term

Decrease

1.

Fixed liabilities

388,058

408,541

- 20,482



Bonds payable

250,000

250,000

---



Long-term loans payable

90,923

106,918

- 15,995



Long-term loans payable to affiliated companies

---

446

- 446



Allowance for retirements benefits

46,087

49,864

- 3,776



Other fixed liabilities

1,047

1,311

- 264





2.

Current liabilities









131,714

144,933

- 13,219

Fixed assets payable within one year

15,455

12,309

3,146



Accounts payable

30,223

32,658

- 2,434



Short-term borrowings

---

11,395

- 11,395



Accrued amount payable

25,595

18,360

7,234



Accrued corporate tax payable, etc.

23,470

14,379

9,090



Accrued expenses

8,942

340

8,601



Advances received

15,870

30,675

- 14,804



Deposits payable

3,811

1,102

2,709



Employee savings deposits

8,149

9,692

- 1,542



Short-term loans to affiliated companies

---

13,242

- 13,242



Other current liabilities

194

777

- 582



Total liabilities

519,772

553,474

- 33,702

Shareholders equity





Current

Preceding Term

Increase/

Term

Decrease

1.

Capital stock

61,777

40,502

21,274

2.

Legal reserves

46,468

24,826

21,642



Capital reserve

38,243

16,973

21,270



Retained earnings reserve

8,224

7,853

371





3.

Capital surplus







315,866

305,929

9,937

Accelerated depreciation reserve

2,130

4,082

- 1,952

Accumulated fund for fixed assets advanced depreciation

2,129

1,588

540

1,117

603

514

291,950

291,950

---

Inappropriate retained earnings at the end of this term

18,538

7,704

10,834



(of which is income from in term)

(3,927)

(7,269)

(- 3,342)



Total liabilities equity

424,112

371,258

52,853



Total liabilities and shareholders equity

943,884

924,733

19,151

special account Reserves for advanced depreciation for fixed assets



Other reserves

(2)Comparative Income Statement(Unit: millions of yen)



Current

Preceding Term

Increase/

Term

Decrease

Ordinary income and expenses







(Operating income and expenses)







Telecommunications business







Operating revenues

353,246

306,219

47,027

Voice transmission revenues

275,016

248,134

26,882

Data transmission revenue

19,310

10,074

9,236

Leased circuit revenue

28,590

26,697

1,892

144

388

- 243

30,183

20,924

9,259

Operating expenses

355,987

303,400

52,587

Sales expenses

120,618

81,528

39,089

8,323

9,979

- 1,656

30,403

27,157

3,245

Overhead expenses

2,984

4,118

- 1,134

Administrative expenses

9,808

13,435

- 3,627

Research and development expenses

8,366

2,388

5,978

60,709

49,636

11,073

877

1,882

- 1,004

109,479

110,012

- 532

4,416

3,260

1,155

- 2,741

2,818

- 5,560

Telegram revenue Other revenues

Operation expenses Maintenance expenses

Depreciation expenses Fixed assets retirement expenses Communication network charges Taxes Telecommunications operating income or loss (-)



Operating income and expenses from other businesses





Operating revenues

42,153

6,941

35,211

Operating expenses

30,196

4,438

25,757

Operating income from other businesses

11,957

2,502

9,454

9,215

5,321

3,893

Operating income



(Non-operating income and expenses)



Non-operating revenues



40,449

16,525

23,924

Interest income and discounts

973

1,404

- 431

Interest on marketable securities

892

821

71

2,003

119

1,883

---

6,150

- 6,150

28,541

---

28,541

---

2,265

- 2,265

Miscellaneous revenues

8,038

5,763

2,275

Non-operating expenses

24,397

12,421

11,976

Interest paid and discounts

4,200

2,028

2,171

Interest on bond

5,875

5,085

789

10,653

331

10,322

3,667

4,975

- 1,307

25,268

9,425

15,842

Dividends received Dividends from affiliated companies Profit from sale of securities Profit on transfer of circuit use rights

Decrease in marketable securities Miscellaneous expenses Ordinary income



Extraordinary income and expenses



Extraordinary income



38,004

12,162

25,842

1,742

4,204

- 2,461

Profit on investment securities sold

36,262

7,958

28,304

Extraordinary loss

56,001

13,775

42,225

Depreciation of R & D assets, etc.

---

2,016

- 2,016

Loss on liquidated affiliated companies

---

1,008

- 1,008

Loss on affiliates support

---

3,960

- 3,960

23,159

---

23,159

9,080

---

9,080

18,468

---

18,468

Special retirement pay

5,292

6,790

- 1,497

Net income before tax

7,271

7,812

- 540

Corporate tax, etc.

9,520

542

8,977

- 6,176

---

- 6,176

Net income

3,927

7,269

- 3,342

Income carried over from last term

2,717

2,202

514

10,097

---

10,097

3,893

---

3,893

1,905

1,606

298

190

160

29

18,538

7,704

10,834

Proceeds from sale of land

Management structure improvement Reserve for loss from investment in affiliated companies Transferred Installment for qualified retirement annuity past service cost

Adjustment of corporate tax, etc.

Past year tax effect adjustment Disposition of voluntary reserve upon application of tax effect Accounting Interim dividend Profit reserve for interim dividend Inappropriate earnings for current term (3)Comparative Proposed Appropriations of Retained Earnings(Unit: millions of yen) Item

Current Term

Inappropriate retained earnings for current term

18,538

7,704

517

902

2,129

1,588

123

70

21,309

10,266

201

181

2,005

b1,809

Reversal of special depreciation reserve Reversal of special account for reduced-value fixed assets Reversal of accumulated fund for reduced-value fixed assets Total The company plans to appropriate this amount as follows: Profit reserve Stockholders dividends

(25 stock)



Preceding Term

per

(25 per stock) (17per absorption share)





592

Special depreciation reserve

new 492

1,003

Accumulated fund for special account for reduced-value fixed assets

3,671

1,708

Accumulated fund for reduced-value fixed assets

1,394

13,000

General reserve

--2,797

Amount carried over to next term

2,717

Note: 1.Dividends paid to shareholders of absorption new shares are calculated on a pro rata basis from the initial date in reckoning. Fraction of yen resulting from the calculation are rounded up to the next whole yen. 2.Dispositions from and accumulations to special depreciation reserve, accumulated fund for fixed assets value reduction special account, and accumulated fund for fixed assets value reduction were made in accordance with the exceptions to Tax Laws Act, and exclude the amount equivalent to deferred tax liability. l

KDDs Philosophy

Bringing People Together KDDs foremost focus on our customers underpins our commitment as a global communications company to advance our industry and create a better world with services of superior quality. l

KDDs Mission

Your Message, Our Mission. To meet the growing and ever-changing communication needs of our customers with innovative services and expert consultation. The World, Within Your Reach. To bring more people in closer touch with one another worldwide by building a high-quality , low-cost global network. Your Imagination, Realized To help our customers turn their communication dreams into reality by providing fully integrated and seamless services, pioneering next-generation services, and conducting research and development at the cutting edge of technology. l

KDDs Corporate Structure(please see attachment KDD annual report page 23

)

3. KDDs affiliates 3.1.Internet-related business 3.1.1.KDD Okinawa Service Co., Ltd. Homepage URL : http://www.kdd-ok.ne.jp/ Head Office Location : KDD Naha Bldg. 5F, 4-1 Higashi-machi, Naha-shi, Okinawa, 900-0034, Japan Telephone Number : +81-98-865-3322 Fax Number : +81-98-865-3397 Summary of business undertakings: - The management and administration of land, buildings, and appurtenant facilities - The collection by proxy of communications charges, fees, etc. - The sale of portable and cellular telephone terminals - The maintenance and operation of telephone terminal facilities, communications and other facilities - The resale of international and domestic telephones - Provision of utilities and services for the purpose of telephone audio and video, and data transmission - Internet connection services (dedicated-line IP connection) - Internet dial-up connection services (US military bases) - Internet telephone services - In-company LAN construction services - Antenna facility maintenance services (registered company to carry out authorized inspections of wireless facilities) - Television conferencing services (registered with US Sprint, Affinity) Corporate profile: (Established) September 25, 1995 (Capital) Yen 80 million (President) Harumi Mima (Employees) 46 (KDD investment contributions) KDD 100% Description of main areas of business: KDD Okinawa Service Co., Ltd. (KDD-OK) receives across-the-board consignments from KDD for the work involved in the management and administration of the primary facilities within Okinawa Prefecture, the maintenance and operation of Okinawa-based communications facilities, and the sale of communications services in Okinawa. In such a way, KDD-OK successfully maintains a level of business activities that are closely knit with the regional community. Established four years ago, KDD-OK brings to bear the accumulated know-how of KDD to engage in international and domestic telephone resale and the sale of portable and cellular telephones, while also positively taking on the challenge of new business initiatives, notably Internet-related business. 3.1.2. KDD Communications Inc. Homepage URL : http://www.kcom.ne.jp/ Head Office Location : (On the premises of the KDD Otemachi Building) 1-8-1 Otemachi, Chiyoda-ku, Tokyo 100-8186, Japan Telephone Number : +81-3-3351-7420 Fax Number : +81-3-3351-7499 Summary of business undertakings: - Internet connection services - The Internet telephone service "KDD Super Economy Phone" - WWW server rental service - Internet engineering services - Network operation and maintenance (video communications and data communications) - International television conferencing, video image delivery service - The administration of KDD Hall and the staging of video/graphics events - "Account Plus," a service offering the management of international telephone charges on a per-extension and a per-corporate section basis - "Hello Phone," an international rental telephone service - Domestic and international telephone resale service - "Mobile Express," a portable/cellular telephone rental service for overseas travelers - "C-HAS," a financial settlement network service Corporate profile: (Established) May 1990 (Capital) Yen 1,820 million (President) Toshiyuki Akutsu (Employees) Approx.250 (KDD investment contribution) KDD100% Description of main areas of business: KDD Communications Inc. (KCOM) principal business activity is to provide a wide variety of communications-related services. Not only does the company provide the familiar Internet connection services and super-bargain Internet telephone service, but it also cater to a wide variety of other requirements in the form of money-saving domestic and international telephone services, international television conferencing, telegrams expressing congratulations or condolences, an inexpensive cellular telephone rental service for travelers abroad, a financial settlement network service (C-HAS), and remote access to Infonet services from mobile terminals, to name just some of its contributions to the world of communications. 3.1.3. KDD MediaNet Inc. Homepage URL : http://www.kmn.co.jp/ Head Office Location : Uchisaiwai-cho Dai Bldg. 1F,1-3-3 Uchisaiwai-cho, Chiyoda-ku, Tokyo 100-0011, Japan Telephone Number : +81-3-3539-1400 Fax Number : +81-3-3539-1411 Summary of business undertakings: - Cable Internet business - Consulting services relating to cable Internet business - The systems development involved in cable - Internet business - Other related undertakings Corporate profile: (Established) June 10, 1998 (Capital) Yen 490 million (President) Ryosuke Yamazoe (Employees) 13 (KDD investment contribution) KDD100% Description of main areas of business: Fueled by communications know-how and abundant experience of joint experiments in numerous locations, KDD MediaNet Inc. provides total support ranging from the planning of CATV Internet projects in alliance with CATV companies, all the way to network construction and operating. 3.1.4. Japan Internet Exchange Co., Ltd. Homepage URL : http://www.jpix.co.jp/ Head Office Location : 1-8-1 Otemachi, Chiyoda-ku, Tokyo 100-0004, Japan Telephone Number : +81-3-3243-9579 Fax Number : +81-3-3243-9597 Summary of business undertakings: -Internet exchange services Corporate Profile: (Established) July 10, 1997 (Capital) Yen 250 million (President) Hiroshi Kobayashi (Employees) 8 (KDD investment contribution) KDD 24% Description of main areas of business: Internet exchange (IX) consists of creating interconnectivity among the networks of numerous Internet service providers (ISPs) for the exchange of communications traffic. Japan Internet Exchange Co., Ltd. was established in July 1997 as a company invested in by 16 concerns such as national-standard ISPs for the purpose of conducting IX business under the control of a neutral consortium-type business. With the IX exchange facilities located in KDD's Otemachi Building, services came into operation in November 1997. The company is engaged in safe, high-quality, high-reliability operations, inspired by a commitment to enhancing convenience for Japanese Internet users and to developing a sound, healthy Internet industry. 3.2.Research and development of cutting edge technology 3.2.1. OSI Plus Corporation Homepage URL : http://www.osiplus.co.jp/ Head Office Location : KDD Meguro Bldg. 4F, 2-1-23 Naka-Meguro, Meguro-ku, Tokyo 153-8932, Japan Telephone Number : +81-3-3794-8411 Fax Number : +81-3-3794-8415 Summary of business undertakings: - The development, design, manufacture, an sale of communications software and related communications systems - The planning, management, surveying and inspection work, and consulting pertaining to the above - The sale of data communications equipment and devices - All categories of work related and appurtenant to the above Corporate profile: (Established) September 28, 1987 (Capital) Yen 490 million (President) Masazumi Mori (Employees) 44 (KDD investment contribution) KDD 89.8% Description of main areas of business: As a data communications frontier responsible for the creation and building up of open-network environments and advanced multimedia environments, OSI Plus Corporation is an expert group that provides diverse systems and products. OSI Plus aims to be an "enterprise that contributes to the information-oriented society" with the provision of next-generation technology, notably Internet telephone (VoIP) system, CTI servers, and voice recognition systems. 3.2.2. KDD Research and Development Laboratories Inc. Homepage URL : http://www.kddlabs.co.jp Head Office Location : 2-1-15 Ohara, Kamifukuoka-shi, Saitama 356-8502, Japan Telephone Number : +81-492-78-7445 Fax Number : +81-492-78-7510 Summary of business undertakings: - The research and development of new technologies and the sale of products developed - The undertaking on consignment of surveying and research - The technological transfer of the successful results of research and development - The provision of licenses - Education, training, technical support, and consulting Corporate profile: (Established) April 1, 1998 (Capital) Yen 2,000 million (President) Shigeyuki Akiba (Employees) 159as of October 1,1999 (KDD investment contribution) KDD100% 3.2.3. KDD Technology Corporation Homepage URL : http://www.kddtech.co.jp/ Head Office Location : KDD Meguro Bldg. 1F, 2-1-23 Naka-Meguro, Meguro-ku, Tokyo 153-0061, Japan Telephone Number : +81-3-3794-8371 Fax Number : +81-3-3794-7600 Summary of business undertakings: -Software development -Network and systems creation Corporate profile: (Established) August 3, 1988 (Capital) Yen 294 million (President) Toshiharu Saito (Employees) 40 (KDD investment contribution) KDD100% 3.3.Data communications engineering 3.3.1.KDD WinStar Corporation Homepage URL : http://www.kddwinstar.co.jp/ Head Office Location : KDD Nihonbashi Building, 1-5-11 Nihonbashi Honmachi, Chuo-ku, Tokyo 103-0023, Japan Telephone Number : +81-3-3517-2510 Fax Number : +81-3-3517-2515 Summary of business undertakings: - Telecommunications and other undertakings for the installation and provision of access lines linking members and type I telecommunications carriers with the use of fixed wireless access (FWA) Corporate profile: (Established) December 28, 1998 (Capital) Yen 1,000 million (President) Muneo Abe (Employees) 39 (KDD investment contribution) KDD 55% Description of main areas of business: Fixed wireless access (FWA) is a new service that entails providing low-cost network accessing lines via wireless facilities installed on the roof of customer premises. KDD WinStar came into being as the result of a merger between KDD and WinStar. The combination of KDD's vast know-how in the field of network construction and operation, harnessed to its long and successful worldwide track record in wireless communication technology, and WinStar's pioneering FWA record that boasts the top market share in America, the world's frontrunner in FWA technology, enables KDD WinStar to assure its customers of access lines ideally suited to the creation and building up of optimum FWA networking environments. Harnessing the superlative reliability and quality of KDD network services with the access lines provided by KDD WinStar has enabled us to make available to its customers communications services at a price that is lower than ever before. 3.3.2. Telecomet International Inc. Homepage URL : http://www.telecomet.co.jp Head Office Location : Center Office 22F, Bunkyo Green Court, 2-28-8 Honkomagome, Bunkyo-ku, Tokyo 113-0021, Japan Telephone Number : +81-3-5978-8560 Fax Number : +81-3-5978-8590 Summary of business undertakings: - Systems integration services in the construction of data communications networks - The development, manufacture, sale, renting, installation and maintenance of hardware / software related to data communications systems - Consulting relating to data communications systems, networking Corporate profile: (Established) November 1, 1984 (Capital) Yen 1,440 million (President) Masanori Amano (Employees) 219 (KDD investment contribution) KDD 80% Description of main areas of business: Telecomet International Inc. offers total solutions in a wide spectrum of areas from data communications network design and construction to customer support by marshaling abundant lines of the latest networking products and systems from major manufacturers both at home and abroad, and by bringing to bear its long years of data communications know-how and network integration technology to cater to a wide diversity of customer needs. Its cutting-edge global network integration service has proved particularly popular with customers, offering as it does coordination with the communications carriers around the world, support services linking principal centers worldwide, 24-hour maintenance, and other benefits. 3.4.Network construction, operation, and maintenance 3.4.1.KDD Submarine Cable Systems Inc. Homepage URL : http://www.kddscs.co.jp/ Head Office Location : Shinjuku Park Tower Bldg., 3-7-1 Nishi-Shinjuku, Shinjuku-ku Tokyo 163-1033, Japan Telephone Number : +81-3-5908-3790 Fax Number : +81-3-5908-3929 Summary of business undertakings: - Technological development of and consulting services for optical fiber submarine cable systems, construction contracting Corporate profile: (Established) May 1992 (Capital) Yen 5,686.25 million (President) Yasuhiko Niiro (Employees) 270 (KDD investment contribution) KDD 66.23% Description of main areas of business: These days, it is high-volume optical fiber submarine cable systems that play the greatest role as a transmission route for the support of data communications as they increasingly assume international dimensions. As a world-representative company specializing in the construction of optical fiber submarine cable systems, KDD Submarine Cable Systems Inc. (KDD-SCS) has contributed to the building of the world's communications infrastructure with its unique technology and highly experienced human resources. In order to meet the demands of the present day for data communications and the rapid spread of the Internet, KDD-SCS is committed to the positive furtherance of projects for the construction of optical fiber submarine cable systems, fueled as the company is by the desire to contribute to the creation of an environment for the international information-oriented era that the 21st century is bound to usher in. 3.4.2. KDD TELECOM NETWORK Co., Ltd. Head Office Location : KDD Bldg. 22F, 2-3-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo 163-8003, Japan Telephone Number : +81-3-3347-6111 Fax Number : +81-3-3347-5970 Summary of business undertakings: - The operation, maintenance, and management of data communications facilities and communications networks - Consulting - Training relating to data communications facilities - The design, development, sale, and installation of data communications equipment, systems, software, etc. Corporate profile: (Established) June 1, 1998 (Capital) Yen 490 million (President) Nobuo Nezu (Employees) 396 (as of September 1999) (KDD investment contribution) KDD 100% Description of main areas of business: Amid the increasing demand for multimedia communications in recent years, KDD TELECOM NETWORK Co., Ltd. is an organization that specializes in the operating and management of transmission networks such as KDD's optical fiber submarine cable network, digital satellite communications systems, and others, as well as those of telephone and ISDN exchange network. As just such a specialist body, the company was established for the purpose of devoting its energies to the administration of communications networks with a view to finding more efficient operating solutions. From the springboard of the network operation skills and technology built up by KDD over many years, collaboration with communications carriers from all over the world, database management, and other such expertise, it looks to providing the kind of engineering ideally tailored to customer needs in the form of the operating maintenance, etc. of communications networks and data communications systems, where there is so much demand for integrated management and globalization, as well as to providing comprehensive support in the form of technical training and other guidance relating to networks. 3.4.3.Japan Telecommunications Engineering Service Co., Ltd. Head Office Location : KDD Bldg, 2-3-2 Nishi-Shinjuku, Shinjuku-ku,Tokyo 163-8003, Japan Telephone Number : +81-3-3347-8101 Fax Number : +81-3-3347-8099 Summary of business undertakings: - The design, development, and construction of data communications facilities, and the contracting out of such work - The design, development, manufacture, sale, and installation of data communications equipment and devices, and the design, development, sale, and installation of data communications systems etc. - Operation and maintenance involved in data communications facilities and communications networks, and operating management thereof - Consulting services relating to data communications facilities and communications networks - Electrical engineering work, telecommunications engineering, civil engineering, the design, implementation, and supervision of construction work, and the contracting out of such work, etc. Corporate profile: (Established) June 1, 1999 (Capital) Yen 320 million (President) Yutaka Shouno (Employees) 130 (KDD investment contribution) KDD 80% Description of main areas of business: KDD Highway Telecommunications Service Co., Ltd. (KHT) operates principally from network centers located in 12 major cities nationwide to engage in the maintenance of the approximately 9,000 kilometers of domestic optical fiber network that constitutes KDD's backbone transmission routes nationwide. These optical fiber channels run along the nations major expressways all the way from Hokkaido to Kyushu. Not only this, but KHT is also responsible, among other important areas, for the laying of overland optical communications networks, and the construction and technical consulting involved in the creation of related facilities. Taking full advantage of KDD's long-accumulated know-how, it caters extensively to diversifying customer needs. 3.4.4. Kokusai Marine Engineering Corporation Homepage URL : http://www.k-marine.co.jp/ Head Office Location : 2-1-23 Naka-Meguro, Meguro-ku, Tokyo 153-0061, Japan Telephone Number : +81-3-3794-8347 Fax Number : +81-3-3794-8340 Summary of business undertakings: - Marine research and surveying - Marine civil engineering works - Engineering consulting Corporate profile: (Established) November 10, 1988 (Capital) Yen 50 million (President) Yuichi Shirasaki (Employees) 9 (KDD investment contribution) KDD 70% Description of main areas of business: Kokusai marine Engineering Corporation is engaged in a wide spectrum of activities that range from marine surveying, construction work through engineering, and all the way to consulting. In its marine surveying operations, the company uses the latest submarine measurement systems and underwater robots for high-precision, yet economical surveying. We cater to a wide range of needs, including the surveying and measurement involved in construction work, academic marine surveys, and environmental surveys, to name just a few of its areas of work. Bringing to bear its vast experience and expertise in the laying, maintenance, and repair of submarine cable, it performs marine, coastal, and land-based construction and maintenance projects both at home and abroad, while also engaging in diverse consulting and multifaceted engineering work such as marine and land-based construction work, among many other operations. 3.4.5. KOKUSAI CABLE SHIP Co., Ltd. Head Office Location : KDD Meguro Bldg. 2F, 2-1-23 Naka-Meguro, Meguro-ku, Tokyo 153-0061, Japan Telephone Number : +81-3-3794-8250 Fax Number : +81-3-3794-8258 Summary of business undertakings: - Submarine cable-laying and maintenance - The conveyance of submarine cable - Marine surveying and research - Operations appurtenant to those described above Corporate profile: (Established) March 1966 (Capital) Yen100 million (President) Hiroyuki Oshida (Employees) approx. 60 (KDD investment contribution) KDD 100% Description of main areas of business: KOKUSAI CABLE SHIP Co., Ltd (KCS) possesses the cable-laying and cable-repair vessels the KDD OCEAN-LINK (approximately 9,600 tons) and the KDD PACIFIC-LINK (approximately 8,000 tons), with the help of which it has engaged for many years in the laying and repair of submarine cable. KCS's has won a high degree of acclaim over the years both at home and abroad for its technological prowess and its long track record of tasks brought to a successful conclusion. The demand for optical submarine cable is expected to continue to boom in the years ahead owing to the growth and progress in multimedia communications, most notably the Internet. KCS looks to honing its technological prowess in the field of the laying and maintenance of optical submarine cable in order to meet this demand and to remain at the cutting edge of world technology. 3.5.Mobile communications business 3.5.1. KDD MOBILE Inc. Homepage URL : http://www.kddmobile.co.jp Head Office Location : 2-1-23 Naka-meguro, Meguro-ku, Tokyo 153-0061, Japan Telephone Number : +81-3-3794-8275 Fax Number : +81-3-3794-8487 Summary of business undertakings: - The sale and renting of portable satellite communications terminals - The construction, operation, and maintenance involved in communications facilities - Radio wave inspections involved in to INMARSAT satellite communications - The development, facility design, construction, operating, and maintenance of INMARSAT services - The administration of telecommunications projects and consulting services relating thereto Corporate profile Corporate profile: (Established) April 1998 (Capital) Yen 300 million (President) Yutaka Goto (Employees) 101(as of September 30, 1999) (KDD investment contribution) KDD 100% Description of main areas of business: In addition to the efficient and across-the-board implementation of the entire range of operations involved in INMARSAT satellite communications services, KDD MOBILE Inc. is also engaged in multifaceted areas of the mobile communications business. Besides radio-wave on-the-spot inspections, licensing management, terminal sales, facility installation, and other operations relating to the INMARSAT satellite communications services provided by KDD, KDD Mobile also performs the development, facility design, construction, and operating maintenance of INMARSAT services. In addition to being responsible for absolutely every stage of the provision of INMARSAT services from start to finish, the company is also active as a comprehensive engineering company in the field of mobile communications, handling a broad spectrum of work that ranges from the operating and maintenance of state-of-the-art middle and low earth orbit satellite services like ICO and Orbcomm, all the way to communications consulting services. 3.6 Telemarketing business 3.6.1. KDD Telemarketing Inc. Homepage URL : http://www1.kcom.ne.jp/telema/ Head Office Location : KDD Bldg., Nishi-Shinjuku, Shinjuku-ku, Tokyo 163-8003, Japan Telephone Number : +81-3-3347-8143 Fax Number : +81-3-3347-6100 Summary of business undertakings: - Telemarketing - Telemarketing-related services - Support with the running of call centers - International telephone operator related work Corporate profile: (Established) May 30, 1996 (Capital) Yen 200 million (President) Shozo Murase (Employees) Staff: approx. 400 Telemarketing personnel: approx. 2,500 (KDD investment contribution) KDD 70% Description of main areas of business: - Bringing to bear KDD's know-how accumulated in the field of international telephone operations, KDD Telemarketing Inc. assists companies with their marketing activities, while guaranteeing the strictest security. The company uses the telephone to conduct client coverage on behalf of companies to open up markets at low cost, enhance customer satisfaction, and gain other business advantages. Its principal business activities include the following. - The acquisition of new customers, provision of product information, sales reception services - The maintenance of existing clients, campaign activities for augmented business - Communication and intermediary services with clients speaking foreign languages (linguistic support) - Market research such as telephone questionnaire surveys etc. - Narrowing down of potential customers, arrangement of appointments for visits from sales personnel - Payment guidance and debt reminder The company also provide the following services as a result of harnessing the capacity to provide services described above with information systems. - Support with liaison and communications between companies and their personnel stationed overseas or on business trip in Japan or abroad, in times of emergency - Automatic reception and information provision with recorded messages and fax - Call center construction consulting, systems administration support - Enveloping and dispatch of bills, invoices, direct mail, etc.; client data input support - Internet help desk 3.6.2. KDD Telemarketing Okinawa Inc. Head Office Location : 1-32-7 Chuo, Okinawa-shi, Okinawa 904-0004, Japan Telephone Number : +81-98-921-0500 Fax Number : +81-98-921-0516 Summary of business undertakings: -Telemarketing (Inbound, Outbound) -Data entry -Help desk operations for internet etc. Corporate profile: (Established) June 7, 1999 (Capital) Yen 50 million (President) Harumi Mima (Employees) Telemarketing personnel:50 (KDD investment contribution) KDD 70% Description of main areas of business: KDD Telemarketing Okinawa Inc. works in contact centers (call centers) equipped with the latest communications and computer facilities to provide "call center business," "networking solutions business," and "toll-free telephone sales" in a format ideally suited to the particular requirements of the customer. The company is in an excellent position to meet the outsourcing demands of a broad spectrum of companies. 3.7. Research consulting 3.7.1. KDD Research Institute, Inc. Homepage URL : http://www.kdd-ri.co.jp/ Head Office Location : 2-3-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo 163-8550, Japan Telephone Number : +81-3-3347-9110 Fax Number : +81-3-3347-9123 Summary of business undertakings: - Information gathering, surveying, and research principally pertaining to domestic and overseas telecommunications business - The preparation and analysis of statistical reference data principally pertaining to telecommunications business - The summary, organization, management, and storage of reference data etc. - The editing and issue of publications principally pertaining to telecommunications business - Other operations related to and appurtenant to each of the items listed above Corporate profile: (Established) October 16, 1990 (Capital) Yen 450 million (President) Tsunekazu Matsudaira (Employees) 22 (KDD investment contribution) KDD 100% Description of main areas of business: Bringing to bear the databases and information relating to worldwide data communications business that KDD has accumulated over long years of experience, KDD Research Institute, Inc. serves as a think-tank where this amassed information and data are studied, analyzed, and processed into statistics for the purpose of extracting ideas and proposals. The principal services offered by KDD Research Institute are surveying and research, market research, the furnishing of tariff information, the publication of "KDD Research Institute R & A," the gathering, preparation, and processing of statistics, and reference data management, among other activities. As a professional group engaged in the surveying and analysis of the field of data communications, the company has won a high degree of acclaim for our work. For all this, however, we are intent on further augmenting our surveying and analysis capacities by promoting collaboration and alliances with other surveying and consulting companies both at home and abroad. 4. Merger of KDD, DDI and IDO. KDD Corporation (President: Tadashi Nishimoto; principal office: Tokyo), DDI CORPORATION (President: Yusai Okuyama; principal office: Tokyo) and IDO CORPORATION (President: Satoshi Nakagawa; principal office: Tokyo) hereby announce they have signed an agreement to merge on October 1, 2000. Details of merger is as follows. 4.1 Outline of merger

Merger timetable: Board meeting to approve merger agreement)April 5, 2000 Signing of merger agreement) April 5, 2000 General meeting of shareholders to approve merger agreement) DDI:June 28, 2000 KDD: June 29, 2000 IDO: June 30, 2000 Date of merger) October 1, 2000 Registration of merger) October 2, 2000 Surviving company: DDI CORPORATION Merger share ratios: Company

DDI

KDD

(Par value per share: 5,000)

(Par value per share: 500)

9.21

1

Merger ratio







Company

DDI

IDO

(Par value per share: 5,000)

(Par value per share: 50,000)

29

1

Merger ratio

Note: Par value of shares in each company is converted to same value.

Proportional allocation of shares: One share in DDI (par value per share: 5,000) will be issued per [92.1] shares in KDD (par value per share: 500). One share in DDI (par value per share: 5,000) will be issued per 2.9 shares in IDO (par value per share: 50,000). (Reasons for merger ratios) The merger ratio for DDI and KDD was calculated based on the average closing price on the TSE over the six months up to December 15, 1999 of shares issued by each company. The ratio in the case of IDO was determined based on the results of calculations by a third-party agency, and finalized by agreement among the parties to the merger. (Number of new shares issued through merger) Par value ordinary shares: 1,345,260.60 (par value per share: 5,000) (Calculated on the basis of the capital stock of KDD and IDO as of March 31, 2000.) Money delivered due to merger: In place of the interim dividend for the interim period from April 1 to September 30, 2000, the shareholders or pledges recorded in the final register of shareholders of KDD as of the date prior to the date of merger will be paid by DDI, without delay after the date of merger, a merger compensation of 25 per KDDs share or its pledge held by such shareholders or pledges. The amount of the merger compensation may be changed, however, upon consultation among the three companies, depending on the KDDs status of assets on the date of merger. 4.2. Outline of parties to the merger Trade name

DDI CORPORATION

KDD Corporation

IDO CORPORATION

Incorporation

June 1, 1984

March 24, 1953

March 9, 1987

Principal office

8, Ichiban-cho, Chiyoda-ku, Tokyo

2-3-2, Nishi-shinjuku, Shinjuku-ku, Tokyo

6, Rokuban-cho, Chiyodaku, Tokyo

Representative

Yusai Okuyama

Tadashi Nishimoto

Satoshi Nakagawa

Capital

72,634 million

40,502 million

68,740 million

Capital stock

2,274,442 shares

76,224,823 shares

1,374,804 shares

(5,000)

(500)

(50,000)

Shareholders' equity

278,360 million

370,601 million

42,220 million

Total assets

807,969 million

884,218 million

459,931 million

Employees

3,101

5,593

1,022

(par value)

Main shareholders and shareholdings

Kyocera Corp. 25.16%

Ministry of Posts & Telecommunications

The Sumitomo Trust & Banking Co., Ltd . 3.97% IBJ Trust and Banking Co., Ltd.* 4.16%

Mutual Aid Association 9.26%

Tokyo Electric Power Co., Ltd. 11.78%

Toyota Motor Corp. 8.42% Nippon Telegraph and Telephone Corp. 8.42%

The Chase Manhattan Bank, N.A., London 3.60%

Toyota Motor Corp. 62.83%

Chubu Electric Power Co., Ltd. 7.57% KDD Corp. 2.40%

Nippon Life Insurance Co. 4.86%

Note: Data correct as of September 30, 1999. * IBJ Trust and Banking's stake is the trust property of Sony Corp.

Financial results over past three years Accounting period

DDI (surviving company)

KDD

IDO

Year ending Mar. 1997

Year ending Mar. 1998

Year ending Mar. 1999

Year ending Mar. 1997

Year ending Mar. 1998

Year ending Mar. 1999

Year ending Mar. 1997

Year ending Mar. 1998

Year ending Mar. 1999

557,839

535,882

605,510

322,458

316,413

313,160

267,440

338,825

410,710

Ordinary profit (m)

67,756

39,503

33,648

20,807

16,761

9,425

-5,889

-38,553

26,938

Net income (m)

37,783

23,740

16,867

10,165

8,451

7,269

-5,919

-38,583

7,509

17,376.07

10,876.41

7,416.01

158.16

131.50

106.50

-12,918.15

-81,949.68

5,461.93

1,790.00

1,790.00

1,790.00

50.00

50.00

50.00

113,939.39

134,341.24

139,938.22

5,493.98

5,573.70

4,870.57

11,158.14

8,987.77

14,449.70

Sales (m)

Net income per share () Dividend per share () Shareholders' equity per share ()

4.3. Status after merger Trade name : DDI CORPORATION Logo mark: : KDDI Line of business : Type I telecommunications carrier Principal office : 8 Ichiban-cho, Chiyoda-ku, Tokyo Representative : Yusai Okuyama (President) Capital : 139,363 million (72,634million, the capital as of March 31, 2000 plus 60,001million, the amount of capital increase by allocation to third parties, and 6,726million, the capital added by the merger) Total assets : 2.1521 trillion(combined total assets of each company as of September 30, 1999) Accounting period : March 31 4.4. Purpose of merger With the Japanese telecommunications market growing increasingly competitive on a global scale as a result of deregulation and technological developments, DDI, KDD and IDO have been vigorously negotiating to build a secure position for themselves as a core telecommunications carrier, and as a result have reached agreement as equals on the following basic points. They have now signed the agreement: - Becoming a comprehensive telecommunications carrier capable of offering seamless mobile, domestic and international telecom services will realize synergies enabling DDI, KDD and IDO to provide services more effectively and thereby compete more efficiently against the NTT group. By enhancing their capital base, DDI, KDD and IDO will be able to accelerate moves to expand the scope of their businesses. - Through improving operating efficiency and competitiveness and expanding their scope of business, DDI, KDD and IDO will be able to offer world-leading services and aggressively expand marketing operations to capture the support of a wide customer base ranging from individuals to mega-companies both in Japan and abroad. - By concentrating management resources on one merged company and harmonizing the business objectives of personnel at all three firms in line with a unified business strategy, DDI, KDD and IDO aim to become a powerful business entity with the strength to compete against the dominant carriers in Japan and overseas.

In addition to becoming increasingly cutthroat, the market is also seeing a rapid shift from voice to data communications, and from fixed to mobile communications. Being able to offer seamless service by developing both mobile and IP networks has thus grown to be of vital importance. Merging will enable DDI, KDD and IDO to respond to this changing environment, allowing them to pool their accumulated know-how, develop and expand an integrated backbone and provide a seamless nationwide mobile phone service, and become a leading player in developing next-generation mobile communications services.

Focusing as it will on mobile and IP network services and making more effective use of management resources, the global and comprehensive telecommunications carrier that the merger will create will greatly benefit the Japanese public and make a genuine contribution to the development of the economy as a whole.

4.5. Information of merged companies 4.5.1. DDI Corporation (pre-merger) Headquarters : 8 Ichiban-cho, Chiyoda-ku, Tokyo, 102-8401 JAPAN Established : 1 June 1984 Capitalization : Yen 72,635 million Officers : Founder and Chairman Emeritus: Kazuo Inamori Chairman: Jiro Ushio President: Yusai Okuyama Group Enterprises: DDI CELLULAR GROUP DDI POCKET TELEPHONE GROUP A conspicuous feature of trends in the telecommunications market was the rapid growth of demand for mobile telephone services. There was also further diversification of consumer needs, including increased demand for Internet access and other data communications services. The focus of the market continued to shift from fixed-line to wireless communications, and from voice to data communications. In this market environment, DDI focused on the expansion of its long-distance, inter-national, cellular telephone, PHS. DDIs non-consolidated profit in fiscal year 1999 was affected by a reduction in long-distance telephone charges in February 1998, and by the growing popularity of discount ser-vices. Operating revenues rose by 13.0% over the previous year's level to 605,510 million, and recurring profit declined by 23.3% to 33,648 million. Net income was 29.0% lower at 16,867 million. On a consolidated basis, operating revenues increased by 5.8% to 1,246,582 million, while recurring profit declined by 20.0% to 50,866 million. Net income was 105.3% higher at 17,061 million. Long-Distance Services: DDI worked to enhance its competitiveness primarily through pricing strategies, including the introduction of new discounts to make services more accessible to existing users, especially in the area of voice calls. The expansion of the Internet was reflected in increased demand for data communications services. DDI responded by cutting charges for its Frame Relay Service and launching a new Cell Relay Service to support high-volume data communications. It further enhanced its competitiveness in the high-growth field of data communications by adding new service options to its DION Internet connection system. The improvement of network infrastructure continued. DDI acquired the Japan Information Highway (JIH) system, a large-capacity submarine cable encircling the entire Japanese archipelago. It also continued to convert its network to fiber optic cable. These enhancements will further reinforce network reliability while ensuring that DDI is able to keep pace with future growth in the demand for telecommunications services. Cellular-Phone Services: The DDI CELLULAR Group achieved steady growth in its subscriber base, which increased by 22.4% to 5,298,900 as of March 31, 1999. In July 1998 KANSAI CELLULAR TELEPHONE Co., KYUSHU CELLULAR TELEPHONE Co. and OKINAWA CELLULAR TELEPHONE Co. launched a new service based on the cdmaOne technology, which is superior to the PDC system in terms of both voice quality and suitability for data communications. The new service was subsequently introduced by CHUGOKU CELLULAR TELEPHONE, HOKURIKU CELLULAR TELEPHONE and SHIKOKU CELLULAR TELEPHONE in March 1999, and by HOKKAIDO CELLULAR TELEPHONE Co. and TOHOKU CELLULAR TELEPHONE Co. in April 1999. Seamless nationwide coverage was established in April 1999, when IDO launched cdmaOne services in the Tokyo and Tokai regions. To improve the competitiveness of existing services, DDI made a number of changes to its system of charges. It launched a new plan that combines a basic charge with a certain amount of free call time and also introduced discount services. C-Mail, a mail service for cellular telephones, and the EZweb service, which allows Internet access from cdmaOne telephones, were introduced in April 1999. PHS Services: The advantages of PHS relative to cellular-telephone services are shrinking in terms of charges and functions. In an effort to expand its user base, DDI introduced new charging plans and ser-vices and continued to improve the functionality of its network. However, the business environment was extremely harsh, and other PHS operators made major changes in their operations. The number of subscribers registered with the Pocket Telephone companies reached a peak of 3,617,000 in July 1998. This was followed by net declines each month until February 1999. DDI sought to halt this trend by introducing a number of innovations, including the P-Mail DX (P-Mail Deluxe) telephone with enhanced mail functions, and the Moji Denwa (Text Phone), which was specially designed to take advantage of the data communications capabilities of PHS. These measures brought a return to net growth, and by March 1999 the total number of subscribers was only 0.8% below the previous years level at 3,457,000. Group Integration to Match Market Needs: DDI is converting its network to fiberoptic technology and building an IP network to support data communications. These enhancements will enable it to respond flexibly to the demand for high-speed, large-capacity services. As customer needs become more sophisticated and diverse, DDI will also enhance its ability to market its services through a consulting approach as a provider of comprehensive solutions that include the design of corporate communications systems. In April 1999 it established DDI Network Systems to handle its solutions business. Members of the DDI Group have joined forces to develop and provide the EZweb service, which was launched in April 1999. EZweb allows users to access Internet information from a cellular telephone. Access is via DION, an Internet connection service operated by DDI. Reducing Reliance on the NTT Network: Until now DDI has connected to the NTT network via relay exchanges. It is now moving closer to users by introducing group center (GC) connections at local exchanges. This will lower DDI's reliance on the NTT network and reduce the amount of access charges paid to NTT. DDI also plans to reduce the reliance of the CELLULAR TELEPHONE companies on the NTT network by enabling them to use group connections via the DDI network. This change, which has already been implemented for the PHS companies, will also bring savings in the amount of access charges paid to NTT. Group connections are expected to enhance the earnings of all group companies. History: 1984 - Established 1986 - Launch of leased circuit service 1987 - Launch of long-distance service 1989 - Launch of cellular service 1993 - Establishment of NIPPON IRIDIUM CORPORATION 1994 - Start of Tu-Ka cellular service(1.5 GHz digital service for Tokyo and Chubu areas) 1995 - Launch of PHS service 1997 - Business tie-up with IDO 1998 - Launch of cdmaOne service - Launch of International Telephone service - Launch of IRIDIUM service 4.5.2. IDO CORPORATION Capital : Paid-up Capital: Yen 68,740.2 million Major Stockholders : Toyota Motor Corporation (63.2%) Tokyo Electric Power Co., Inc. (11.8%) Chubu Electric Power Co., Inc. (7.6%) Total 48 companies Sales and Services Areas : Tokyo and Kanagawa, Chiba, Saitama, Ibaraki, Tochigi, Gunma, Yamanashi, Aichi, Gifu, Mie, Shizuoka and Nagano prefectures Companies Financed by IDO Capital : Toyota Media Station Incorporated Satellite Phone Japan, Ltd.. ATIS Corporation Strategy for the future:

IDO has a Steadfast Commitment to Meeting Future Challenges and Implementing New Technologies Introducing Revolutionary "cdmaOne" service for the 21st Century. The April 1999 launch of "cdmaOne" service marked a milestone in cellular industry history. "cdmaOne" is a completely new digital telecommunications technology based on CDMA (Code Division Multiple Access), a technology developed in the U.S. It offers outstanding voice and high-speed data transmission capabilities and represents the future in the continually advancing world of telecommunications. Countries around the world are moving toward the future in cellular phone technology by adopting "cdmaOne." Gaining High Acclaim for its Digital Network Service: Since the company began operations in 1994, the companys digital network service Personal Digital Cellular system (PDC) has been highly rated by its customers. With a coverage of approximately 99% of the population, it now has 3 million subscribers who appreciate both the coverage and quality of its network. Furthermore, because of its roaming agreements with the DDI Cellular Group, customers can use its digital network service throughout Japan. In 1997, it developed the Digital G series of handsets capable of data transmission speeds of 9.6Kbps. The new G series, which is lighter than previous models and offers functions such as text message services, increases the convenience and usefulness of its digital network service Continuous R&D Is Enhancing Network Reliability: Latest Developments in Mobile Communications Technology Even when viewed against the background of the rapidly changing telecommunications industry, the latest advances in mobile multimedia communications technology are particularly striking. IDO employs the latest technology from all over the world to build a stable and reliable communications network. In the future, the company plans to continue augmenting its own R&D with other technical advances to continue providing convenient and attractive services to its customers. Completely Digitized Intelligent Network: When users cross multiple wireless zones at high speeds, being able to use their cellular phones requires advanced high-speed transmission technologies built into their receivers. IDO's service area is finely divided into zones where a number of base stations are installed. These stations are connected to digital switches with fiber-optic cables. The digital switch circuits and connections also operate on digital signaling for ultrafast processing and, through a dedicated computer, form an intelligent network that delivers robust high-speed services. Introduction of Latest Network Monitoring System : IDO developed and installed the network monitoring system I-NOS to allow its many networks to be managed as a single unit. The system enables the real-time comprehension of transmission load amounts and the status of equipment, such as base stations, switches and transmitters, and allows for flexible network management. With this system, IDO can offer reliable, stable services around the clock. 5. Strategic Partnership with Singapore Telecom KDD and Singapore Telecom (SingTel) today announced that the two companies will form a strategic partnership to better serve their corporate customers in Asia and around the world. Reflecting their strong commitment to the partnership, KDD and SingTel have agreed to undertake a share swap. Under the agreement, KDD will issue 4,011,800 new shares, or approximately 5% of its enlarged share capital, to SingTel. At the same time, SingTel will issue to KDD 221,310,898 new shares, representing 1.43% of the enlarged SingTel share capital. The pricing of the share swap was arrived at following negotiations on a willing buyer and a willing seller basis. 5.1. Formation of joint venture In conjunction with the partnership, KDD and SingTel have signed an Agreement-In-Principle with the intent to form an equally-owned joint venture (JV) that will provide premium seamless and managed end-to-end telecommunications services to multinational corporations and business customers. These services include Asynchronous Transfer Mode (ATM), frame relay, international leased circuits and services based on Internet Protocol. Although KDD and SingTel presently have their own networks in the Asia Pacific, the two companies intend for the JV to provide services on a common platform. To meet this objective, the JV will develop an integrated ATM backbone in the Asia Pacific region with connectivity to North America and Europe. The backbones initial nodes will be located in Singapore, Tokyo and Hong Kong. KDD and SingTel will contribute assets such as submarine cables and equipment as well as second personnel to the JV. Ownership of the ATM backbone will provide the JV with operational flexibility and enable it to better manage its cost structure so that it can offer services that are competitively priced. Total amount of investment of the JV over the five years will be in the region of US$350 million. Presently, KDD and SingTel work with other carriers to provide global service to their customers. Where necessary, the JV will do likewise to distribute its services. It will provide comprehensive back office support including consolidated billing, clearing house, product development and network management functions. Customers will have a single point of contact and a single contract with the JV. The services provided by the JV will be useful to other carriers who are keen to serve their customers with managed end-to-end services. KDD and SingTel expect to sign a definitive agreement on the JV by end of February 2000 with the incorporation of the JV scheduled for April 2000. 5.2. Strengthening of a partnership KDD President, Mr. Tadashi Nishimoto, said: The new equity relationship between SingTel and KDD is definitely a new step in our long-standing and tested partnership that will enable solid expansion of our business especially in the Asian region. The two of us standing shoulder to shoulder will remodel the Asian telecommunications market. The true purpose of our alliance and our agreement to establish a joint venture, said Mr. Nishimoto, is for the customers to benefit from abundant opportunities to enjoy premium quality, seamless end-to-end managed products and services based on an integrated ATM backbone. It is my strong belief that SingTel and KDD will continue to be the leaders in the Asian region in the new millennium. SingTel President and CEO, Brigadier General Lee Hsien Yang, said: SingTel is pleased to welcome KDD, an established and well-regarded telecommunications company, as a strategic partner. The share swap reflects the strong and significant commitment of KDD and SingTel to the partnership and cements the already close relationship of our two companies. KDD and SingTel have had a long history of working together. We were founder members of the WorldPartners alliance and we have also collaborated closely in the planning of many submarine cable systems in the region. This strengthening of our partnership will ensure that both companies continue to play leading roles in the region even as the telecommunications industry continues to consolidate. About Singapore Telecom:

Singapore Telecom is a world-class provider of domestic, international and mobile telecommunications as well as postal services. Turnover and net profit for the Group in 1998/99 were S$4.88 billion and S$1.96 billion respectively. Publicly listed in October 1993, Singapore Telecom is Singapores largest company in terms of market capitalization. The Singapore Telecom Group has invested more than S$2.5 billion in telecommunications-related projects around the world, especially in the Asia Pacific. It owns interests in 54 ventures and operations in 19 countries including the Philippines, Thailand and Belgium. It has representative offices in 18 cities in Asia, North America and Europe. 6. Others KDD has telecommunication service agreements and cooperative relationships with carriers of over 200 countries.

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