Consolidated Financial Statements for the First Quarter of Fiscal Year ending March 31, 2022
29/Jul/2021
These financial statements have been prepared in accordance with accounting principals generally accepted in Japan.
NEC Networks & System Integration Corporation

Stock exchange listing: Tokyo
Code number:
1973

https://www.nesic.co.jp/english/index.html
1. Consolidated Results for the First Quarter (April 1, 2021 to June 30, 2021)
of Fiscal Year ending March 31, 2022

(Rounded down to the nearest million yen.)(1) Net Sales and Income

3 months ended
June 2021
3 months endedJune 2020Net sales(¥ million)

Year-on-yearchange (%)

Operating income(¥ million)

67,662

0.4

2,950

192.5

3,045

223.4

67,369

11.3

1,008

—

941

—

Net income pershare(¥)

Net income
per share(diluted) (¥)

Net income
attributable toYear-on-year
owners of thechange (%)
parent(¥ million)

Year-on-year Ordinary income Year-on-yearchange (%)(¥ million)change (%)

3 months ended
1,653
405.8
11.10
—
June 2021
3 months ended
326
—
2.20
—
June 2020c.f. Comprehensive income: 1Q/FY Mar 2022: ¥2,374million (813.5%); 1Q/FY Mar 2021: ¥259 million (37.9 %)* The company conducted a three-for-one stock split for its common stock on June 1, 2020. The amount of "Net income per share" is calculatedon the assumption that the stock split had been carried out at the beginning of the previous consolidated fiscal year.
(2) Financial Position

30/Jun/2021

Total assets(¥ million)
227,181

Net assets(¥ million)
126,359

Owner's equity ratio Net assets(%)
per share (¥)
54.0
823.8031/Mar/2021
250,338
127,11749.4
830.47c.f. Owner's equity: 30/Jun/2021: ¥122,688 million; 31/Mar/2021: ¥123,682 million
2. Dividends

FY ended Mar. 2021

1stquarterInterim—

14.00

Dividends per share (¥)
3rdYear-endquarter—FY ending Mar.
—
19.00
—2022(Forecast)
Note: Revisions to projected dividends for the quarter under review: noFull year

21.00

35.00

19.00

38.00

3. Financial Forecasts for Fiscal Year ending March 31, 2022 (April 1, 2021 to March 31, 2022)

Net sales

Operating income(Percentages represent change compared to the previous corresponding period.)
Net income attributable toNet income
Ordinary incomeowners of the parent
per share(¥ million)(%)(¥ million)(%)(¥)(¥ million)(%)(¥ million)(%)

6 months ending
Sep. 2021

147,000

-2.8

8,700

29.2

8,700

28.3

5,500

38.6

36.93

FY ending Mar. 2022

320,000-5.6

26,0001.7

26,0002.0

16,0001.6

107.43

Note: Revisions to projected results for the quarter under review: yes
Cautionary Statement
Forecasts of results mentioned in this document are future estimates and are thus inclusive of risks and uncertain factors since they are not based on definite facts.
Please be aware that a variety of factors could cause actual results to differ significantly from those projected. The major factors affecting actual results include theeconomic climate and social trends surrounding the business of this Company’s group, consumer trends vis-a-vis systems and services provided by this Company’sgroup, as well as pressure to lower prices and ability to cope with the market in response to intensified competition.
Factors affecting results are not limited to the ones mentioned above.

5. Consolidated Financial Statements(1) Consolidated Balance Sheets
As ofMarch 31, 2021
AssetsCurrent assets
Cash and cash equivalents
Notes and accounts receivable
Notes and accounts receivable, and contract assets
Electronically recorded monetary claims
Purchased goods,materials and supplies
Work in process
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Notes and accounts payableElectronically recorded obligations
Short-term bank loans
Current installments of long-term debt
Accruedncome taxes
Accrued bunuses to directors and corporate auditors
Accrued warranty on products
Accrued losses on sales contracts
Accrued compensation for damage
Accrued office transfer cost
Other current liabilities
Total current liabilities
Long-term liabilities
Long-term debt
Liabilities for retirement benefits
Other liabilities
Total long-term liabilities
Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Retained earningsTreasury stock, at cost
Total shareholders' equity
Accumulated other comprehensive income
Net unrealized holding gain on other securities
Foreign currency translation adjustments
Accumulated adjustments for retirement benefits
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets(Millions of yen)
As ofJune 30, 2021

68,426
123,313
－
1,256
3,456
8,052
7,388
(87)
211,806

87,542－
79,625
1,609
3,286
6,813
9,101(85)187,894

10,845

11,469

623
4,284
4,908

565
4,159
4,724

15,1987,634(54)
22,77738,531
250,338

15,082
8,063(53)
23,09239,287
227,181

44,188
2,649
6,360
3,298
5,954
159
83
512
711
6
27,55091,47428,481
1,523
7,191
3,298
1,336
31
87
461
1,036
6
26,00569,460466
29,233
2,046
31,745
123,220392
28,841
2,128
31,362
100,822

13,122
16,68096,589(266)
126,125

13,122
16,68095,136(266)
124,672169(533)(2,080)(2,443)
3,435
127,117250,338489(494)(1,978)(1,983)
3,670
126,359
227,181(2) Consolidated Statements of Income and Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
1Q, FY March 2021

1Q, FY March 2022

(3 months ended June 2020)(3 months ended June 2021)

Net sales

67,36967,662

Cost of sales

57,02655,029Gross profit

10,343

12,633

Selling, general and administrative expenses

9,334

9,682

Operating income

1,008

2,950

Interest income

72

Dividend income

1935

Foreign exchange gains

－33

Other

82

84

Total non-operating income

110

156

Interest expenses

3022

Loss on disposal of property and equipment

1123

Other13516

Total non-operating expenses

177

61

941

3,045

Gain on sale of investment in affiliates－

141

Total extraordinary inocome－141

Compensation for damage

262

324

Total extraordinary losses

262

324

Income before income taxes

678

2,862

Income taxes

251

948

Net income

426

1,914

Net income attributable to non- controlling interests
Net income attributable to owners of the parent

100
326

260
1,653

Non-operating income

Non-operating expenses

Ordinary income
Extraordinary income

Extraordinary losses(Millions of yen)

Net income (loss)(Millions of yen)

1Q, FY March 20211Q, FY March 2022

(3 months ended June 2020)(3 months ended June 2021)

426

1,914

Net unrealized holding loss on other securities

-8

319

Deferred gains or losses on hedges-1－(256)

40

99

101

accounted for using equity method0(1)Total other comprehensive income(167)

460

259

2,374

266

2,113

(6)

260

Other comprehensive income

Foreign currency translation adjustments
Adjustments for retirement benefit
Share of other comprehensive income ofassociates

Comprehensive income (loss)
Comprehensive income (loss) attributable to:
Owners of the parentNon-controlling interests

(3) Consolidated Statements of Cash Flows(Millions of yen)
1Q, FY March 2021

1Q, FY March 2022

(3 months ended June 2020) (3 months ended June 2021)
Cash flows from operating activities
Net income before income taxes
Depreciation and amortization
Amortization of goodwill
Increase (decrease) in allowance for doubtful receivables
Increase (decrease) in asset for retirement benefit
Increase (decrease) in liability for retirement benefits
Increase (decrease) in accrued bonuses to directors and678
782
98(3)
(15)
103

2,862
801
58(5)
5(262)

(105)
(6)

(127)
4(1,189)
263
(27)
30
29,078

(50)
324
(38)
22
－

and contract asssets(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable
Increase (decrease) in accrued consumption taxes
Other, net
SubtotalInterest and dividend income received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property and equipment－
1,297(8,630)(602)(1,148)20,60527(27)(3,127)
17,47843,703
1,402(16,857)(1,214)(2,112)28,51938(19)(5,410)23,127(445)(1,033)

Proceeds from sale of property and equipment
Purchase of intangibles
Purchase of investment securities

1(146)(189)

0(228)(8)59－0(273)
(992)

189
(1)
1(123)(1,206)

435
(74)
(0)
(2,071)(19)(123)(1,854)

443
(74)
(0)
(3,102)(21)(74)(2,830)equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period(Decrease) in cash and cash equivalents resulting from(60)14,57058,321

24
19,11668,426

exclusion of a subsidiary from consolidation
Cash and cash equivalents at end of period(532)
72,358－87,542

corporate auditors
Increase (decrease) in accurued warranty on products
Increase (decrease) in accurued losses on sales
contracts
Increase (decrease) in accurued compensation for damage
Interest and dividend income
Interest expense(Increase) decrease in notes and accounts receivable(Increase) decrease in notes and accounts receivable,

Proceeds from sale of affiliates' securities
Payments of loans receivableCollection of loans receivable
Other, netNet cash used in investing activities
Cash flows from financing activities
Net increase (decrease) in short-term bank loans
Repayments of long-term debt
Net (increase) decrease in treasury shares
Dividends paid to shareholders
Dividends paid to minority shareholders of subsidiaries
Other, net
Net cash provided by used in financing activities
Effect of exchange rate changes on cash and cash

(4) Segment Information
Business Segment Information
First quarter of fiscal March 2022 (3 months ended June 2021)(Millions of yen)Sales(1) Sales to third parties(2) Intersegment sales
Total
Operating income and loss

Digital Solutions

NetworkInfrastructures

Engineering &Support Services

25,31725,3172,864

19,851
19,851787

19,86019,8601,230

Others

2,633
2,633
207

Adjustments

Total(2,139)67,662
67,662
2,950First quarter of fiscal March 2021 (3 months ended June 2020)(Millions of yen)Sales(1) Sales to third parties(2) Intersegment sales
Total
Operating income and loss

DigitalNetwork

Engineering &Solutions

Infrastructures

Support Services

16,61016,610208

20,841
20,841726

26,81926,8192,101

Others

3,098
3,098
145

Adjustments(2,173)

Total

67,36967,3691,008