Consolidated Financial Statements for the First Half of Fiscal Year ending March 31, 2022
29/Oct/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 Half (April 1, 2021 to September 30, 2021)
of Fiscal Year ending March 31, 2022
(1) Net Sales and Income
Net sales

Year-on-year

Operating

Year-on-year

Ordinary

Year-on-year(¥ million)change (%)

incomechange (%)

incomechange (%)

140,961

-6.8

7,621

13.2

7,889

16.4

151,205

11.0

6,732

54.1

6,778

56.3

Net income

Net income

per shareper share(¥)(diluted) (¥)

31.58

—

6 months ended
Sep 2021
6 months ended Sep
2020(Rounded down to the nearest million yen.)

Net income
attributableto owners of
the parent
6 months ended
Sep 2021
6 months ended Sep

Year-on-yearchange (%)(¥ million)
4,703

18.6

3,967
36.7
26.64
—
2020
c.f. Comprehensive income: 1H/FY Mar 2022: ¥5,849 million (39.0 %); 1H/FY Mar 2021: ¥4,208 million (27.7 %)* 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
Total assets

Net assets(¥ million)(¥ million)

Owner'sequity ratio

Net assets

per share (¥)(%)
30/Sep/2021
235,447
129,85253.5
846.2431/Mar/2021
250,338
127,11749.4
830.47c.f. Owner's equity: 30/Sep/2021: ¥126,042 million; 31/Mar/2021: ¥123,682 million
2. Dividends
1stquarter
FY ended Mar. 2021
FY ending Mar.

Dividends per share (¥)
3rd
InterimYear-endquarter

—

14.00

—

21.00

—

19.00

—

19.00

2022(Forecast)
Note: Revisions to projected dividends for the quarter under review: No

Full year
35.00

※

38.00

※

※ Forecast

3. Financial Forecasts for Fiscal Year ending March 31, 2022 (April 1, 2021 to March 31, 2022)(¥ million)(%)(Percentages represent change compared to the previous corresponding period.)
Net income attributable to Net income
Operating income
Ordinary income
owners of the parent
per share(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥)

32,000(5.6)

26,000Net sales
FY ending Mar. 2022

1.7

26,0002.0

16,0001.6

107.43

Note: Revisions to projected results for the quarter under review: No
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 the economic climate and social trends surrounding the business of this Company’s group, consumer trends vis-a-vis systems
and services provided by this Company’s group, as well as pressure to lower prices and ability to cope with the market in response to intensifiedcompetition.
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 payable
Electronically recorded obligations
Short-term bank loans
Current installments of long-term debt
Accrued income taxes
Accrued bunuses to directors and corporate auditors
Accrued warranty on products
Accrued losses on sales contracts
Provision for 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 earnings
Treasury 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 of
Sep 30, 2021

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

79,979－93,525
1,167
3,081
8,460
9,270
(84)
195,400

10,845

12,036

623
4,284
4,908

506
3,999
4,505

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

14,9338,623(52)
23,50440,046
235,447

44,188
2,649
6,360
3,298
5,954
159
83
512
711
6
27,55091,47432,083
1,187
8,085
3,297
3,183
60
87
418
4
－
25,98574,394466
29,233
2,046
31,745
123,220317
28,741
2,141
31,200105,594

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

13,122
16,694
98,186(258)
127,743169(533)(2,080)(2,443)
3,435
127,117250,338733(558)(1,877)(1,701)3,810
129,852
235,447

(2) Consolidated Statements of Income and Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
1H, FY March 2021
(6 months ended Sep 2020)

1H, FY March 2022
(6 months ended Sep 2021)

Net sales

151,205

140,961

Cost of sales

126,033

113,703

Gross profit

25,171

27,257

Selling, general and administrative expenses

18,43919,636

Operating income (loss)

6,732

7,621

Interest income

155Dividend income of insurance

142

156

Other

189

229

Total non-operating income

348

391

Interest expenses

55

47

Loss on disposal of property and equipment

29

30

Other

216

45

301
6,778

123
7,889

Gain on sale of investment in affiliates－

141

Total extraordinary inocome－

141

Provision of allowance for compensation for damage

455

324

Total extraordinary losses

455

324

Income (loss) before income taxes

6,323

7,706

Income taxes

2,102

2,526

Net income (loss)
Net income (loss) attributable to noncontrolling interests
Net income (loss) attributable to owners of the parent

4,221

5,180

254

476

3,967

4,703

Non-operating income

Non-operating expenses

Total non-operating expenses
Ordinary income (loss)
Extraordinary income

Extraordinary losses(Millions of yen)

(Millions of yen)

1H, FY March 2021
(6 months ended Sep 2020)

1H, FY March 2022
(6 months ended Sep 2021)

4,221

5,180

Net unrealized holding loss on other securities

(34)

564

Deferred gains or losses on hedges

(12)

－

Foreign currency translation adjustments

(165)

(96)

Adjustments for retirement benefit
Share of other comprehensive income of associates
accounted for using equity method

199

202

0

(1)

Total other comprehensive income

(12)

669

4,208

5,849

4,010

5,445

198

403

Net income (loss)
Other comprehensive income

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

(3) Consolidated Statements of Cash Flows
1H, FY March 2021

(Millions of yen)
1H, FY March 2022

(6 months ended Sep 2020)(6 months ended Sep 2021)

6,323
1,563
120
(3)
(28)
384

7,706
1,606
117
(5)
10
(228)

corporate auditors
Increase (decrease) in accurued warranty on products
accurued forlosseson sales contracts
Increase (decrease) in provisioncompensation
for

(90)
(13)
(1,514)

(97)
4
(92)

damageInterest and dividend income
Interest expense(Increase) decrease in notes and accounts receivable(Increase) decrease in notes and accounts receivable,

498
(36)
55
11,137

(706)
(42)
47
－

and contract assets(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
Proceeds from sale of property and equipment
Purchase of intangibles
Purchase of investment securities
Payments for sale of shares of subsidiaries
Loans receivable madeCollection of loans receivable
Other, net
Net 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

－
418
854
(784)
1,333
20,21936(55)(3,122)
17,07730,098(50)(13,605)(2,022)(1,067)
21,67342(47)(5,422)
16,245(1,869)
1
(224)
(238)
60
－
0
(407)
(2,677)(2,076)
3
(363)
(143)
189
(18)
0
(223)
(2,632)

987
(149)
(1)
(2,081)(23)(204)(1,471)

1,369
(149)
21
(3,122)(29)(146)(2,056)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(44)
12,88358,321(2)
11,55368,426

exclusion of a subsidiary from consolidation
Cash and cash equivalents at end of period(532)
70,671－
79,979Cash flows from operating activities
Net income (loss) 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 and(4) Segment Information
Business Segment Information
First half of fiscal March 2022 (6 months ended September 2021)(Millions of yen)
Digital Solutions
Sales(1) Sales to third parties(2) Intersegment sales
Total
Operating income and loss

NetworkEngineering &Infrastructures

Support Services

42,75942,7592,796

42,29842,2983,437

52,39452,394
5,558

Others

3,508
3,508
382

Adjustments

Total(4,554)140,961
140,961
7,621

First half of fiscal March 2021 (6 months ended September 2020)(Millions of yen)
DigitalSolutions
Sales(1) Sales to third parties(2) Intersegment sales
Total
Operating income and loss

56,712
56,712
5,271

Network
Infrastructures

Engineering &Support Services

38,08338,083
2,213

51,551
51,551
3,464

Others

4,858
4,858
363

Adjustments(4,579)Total

151,205
151,2056,732