(i) Business results
During the fiscal year ended March 31, 2023 (the period from April 1, 2022 to March 31,2023), the Japanese economy showed signs of an economic normalization as restrictions on
activities imposed because of the COVID-19 pandemic were relaxed. However, with risingresource and energy prices connected with rapid fluctuations in foreign exchange rates andthe prolonged conflict in Ukraine, the outlook has remained uncertain.
Under these economic conditions, in the business domain where NEC Networks and System
Integration Corporation (hereinafter "NESIC") operates, customers' willingness to invest
varied from strong to weak depending on the sector, reflecting rising procurement costs dueto the weak yen and the impact of shortages of semiconductors and other materials andcomponents. Overall, however, investments showed steady trends.
There continued to be brisk demand for workstyle innovation in the enterprise market
triggered by the introduction of teleworking as a COVID-19 control measures. At the sametime there was a shift of investments to "new normal" workstyles not bound to specificlocations such as offices or homes utilizing cutting-edge technologies such as cloudcomputing, artificial intelligence (AI), the Internet of Things (IoT), robotic process
automation (RPA) and other digital transformation (DX) technologies. Among telecom
carriers, while moves to curb capital investment have been spreading to the core-network
field, there has been growing demand in the areas of cost reductions and operational
streamlining through the utilization of DX and other innovations. For national and local
governments and public interest-related organizations, trends aimed at workstyleinnovations materialized at national and local governments. At the same time, we began tosee actions to develop digital infrastructure in community development, such as the Digital
Garden City Nation concept.
Under this market environment, in May 2022 the NESIC Group announced "Shift up 2024," its
new medium-term management plan. To realize a Sustainable Symphonic Society and enhance thevalue provided to society, in the era of DX and beyond-5G next-generation networks, the newplan focuses on the shift to a new business model of spiral growth in tandem withcustomers, based on consultation from the customer perspective that leverages expertise
informed by NESIC's self-implementation track record and familiarity with customer
operations.
In the DX field, to evolve the workstyle innovation-related business NESIC has pursued
since 2007 into a service that leads to further improvements in management and businessstrength on the part of customers, NESIC has worked on workstyle and process reforms that
produce innovation through the active utilization of DX technologies, and has used thetechnologies, expertise and other strengths gained from those efforts to engage in proposal
activities and strengthen its service development. In addition, to address the growing
demand to promote DX at the national and local government levels as well as enterprisecustomers, NESIC has worked with partner companies to progressively release services
compatible with the closed networks of local governments, and strengthened its response tothese growing needs by opening problem-solving showcases that enable customers toexperience solutions by seeing them first-hand. For telecom carriers, we have utilized ourknowledge of customer business processes to provide DX services that lead to operational
streamlining, such as business automation services driven by DX technologies, as part ofefforts to expand the domain in which we operate.
In the next-generation network domain including 5G, NESIC has strengthened its responseto the field of base station infrastructure sharing utilizing local 5G, and also built new
partnerships associated with 5G technologies and products including investments in anoverseas company and a venture company from the University of Tokyo, in an effort toenhance its ability to propose services. At Shin-Kawasaki Technical-Base, the hub ofNESIC's technology efforts, NESIC has obtained a commercial station license for local 5G(sub-6 band) and further strengthened its 5G business structure, including the enhanced- 1 -development of engineers utilizing local 5G environments.
On the issue of climate change, which is growing in importance as a social issue, NESIC
has reviewed all of its businesses from the perspective of climate change action, anddeclared its intent to strengthen businesses that address climate change by combining thevarious environmental services and expertise it has cultivated to date. Other efforts
include the establishment of a capital and business alliance with a storage battery
development start-up. In June 2022, NESIC began disclosures based on the TCFD framework it
expressed support for in December 2021. Also note that in April 2022, the Carbon Neutral
Promotion Division was established as a companywide organization tasked with driving theseefforts.
To further accelerate these in-house and co-creation practices along with initiatives toaddress climate change, in March 2023 NESIC relocated to a new head office building as anopportunity to utilize sophisticated networks such as local 5G and verify DX solutions, andhas since been making preparations for new initiatives.
While NESIC has pursued these initiatives aimed at sustainable growth, in the fiscal year
under review we were impacted by factors such as lengthened lead times from the receipt ororders to the recording of sales in part due to semiconductor and materials shortages andthe accompanying impact on cash flow, and rising costs of the products and services
procured from overseas due to the rapid depreciation of the yen.
As a result, the Group posted the following consolidated results for the fiscal year
under review:Net sales¥320,802 million 3.4% increase year on year
Operating income¥22,751 million 1.9% decrease year on year
Ordinary income¥22,970 million 2.5% decrease year on year
Net income attributable toowners of the parent¥13,813 million 8.0% decrease year on year
<Reference>
Orders received¥356,043 million 5.7% increase year on year

Net sales increased in part due to ICT services related to DX technology-driven workstyleinnovation despite a decline in sales to telecom carriers due to curbs on capital
investment. In addition, there was an impact due to lengthened lead times from the receipt
or orders to the recording of sales in part due to semiconductor and materials shortages,
this trend started to show signs of gradually abating at the end of the fiscal year. As aresult, net sales increased 3.4% year on year to ¥320,802 million. Orders from telecom
carriers were sluggish but strong growth in orders was achieved across all segments driven
by the DX and the beyond 5G network area that is our focus. As a result, orders increased
5.7% year on year to ¥356,043 million.
On the profit front, despite the partial reversal on accrued losses on sales contracts
recorded for a project in Myanmar and progress with initiatives such as improved added
value and efficiency of services provided based on the medium-term management plan, due toa deteriorating sales mix owing to a temporary increase in projects based on equipment
sales with low added value, the impact of soaring procurement costs from the rapid
depreciation of the yen, the posting of losses in a telecom infrastructure project inThailand and an increase in SG&A expenses associated with the strengthening of resources
related to new business creation for future growth, operating income fell 1.9% year on yearto ¥22,751 million, ordinary income declined 2.5% year on year to ¥22,970 million, and net
income attributable to owners of the parent dropped 8.0% year on year to ¥13,813 million.

- 2 -Operating results by business segment were as follows:
Net sales by business segment(Million yen)

DX Solutions
Business

Network
Solutions
Business

Environmental &Social
Solutions
Business

OtherTotal

Net sales

Fiscal 2023.3

114,244

79,217119,241

8,099

320,802

Fiscal 2022.3

107,971

81,874

115,033

5,455

310,334

6,273(2,656)

4,207

2,643

10,468

5.8

(3.2)

3.7

48.5

3.4

Increase or(decrease)
Ratio ofincrease/(decrease) (%)

Reference: Orders received by business segment
DX Solutions
BusinessNetworkSolutions
Business(Million yen)
Environmental &SocialSolutions
Business

OtherTotal

Orders received

Fiscal 2023.3

122,651

92,107

132,653

8,630

356,043

Fiscal 2022.3

119,454

84,339128,682

4,282

336,759

3,197

7,768

3,971

4,347

19,2842.7

9.2

3.1101.5

5.7

Increase or(decrease)
Ratio ofincrease/(decrease) (%)

1. DX Solutions Business (¥114,244 million, up 5.8％ year on year)
Although conventional services such as PBX-related service decreased, in addition toservice businesses including DX technology-driven workstyle innovation that is our focus,
SI and construction projects expanded thanks to a partial resolution of semiconductor andmaterial shortages from the fourth quarter, with net sales improving 5.8% year over yearto ¥114,244 million.
2. Network Solutions Business (¥79,217 million, down 3.2％ year on year)
Despite an increase in the submarine network business, net sales declined in part due
to telecom carriers curbing capital investment, falling 3.2% year on year to ¥79,217
million.
3. Environmental & Social Solutions Business (¥119,241 million, up 3.7％ year on year)
Performance improved in the area of SI and construction, including kitting projects for
ICT equipment and overseas telecom infrastructure projects, with net sales improving 3.7%
year on year to ¥119,241 million.

- 3 -<Outline of Business Segments>
Business Segment

DX Solutions BusinessNetwork SolutionsBusinessEnvironmental & Social
Solutions Business

OtherDescriptions of Main Businesses
Mainly system integration related to ICT platform andoutsourcing/cloud services for business of enterprises andother customers and provision of solutions/services that are
helpful for customers’ business transformation by using
cutting-edge/digital technologies, and contact center
services
A business primarily aimed at telecom carriers as well associal infrastructure operators for space, marine orbroadcasting, etc., that require specialized technologies,
involving the provision of system integration and services
related to highly public network infrastructure that
requires reliability, as well as the development/manufactureand sales of network equipment, and provision of system
integration
A business primarily aimed at construction for providers ofsocial and public services, companywide service
infrastructure, which includes the maintenance and operationof various ICT systems and services provided by NESIC, andthe provision of support services including technicalservices utilizing that infrastructure, in addition to theconstruction of network infrastructure by the Group's local
subsidiaries overseas
Mainly the purchase and sale of ICT equipment

Due to a reorganization implemented on April 1, 2022, NESIC transformed its reporting
segments, namely the Digital Solutions Business, Network Infrastructure Business andEngineering and Support Service Business, into three business domains: DX Solutions
Business, Network Solutions Business and Environmental & Social Solutions Business.
Information on reporting segments for the previous fiscal year has also been rearranged
and disclosed to reflect the changes due to this reorganization.

(ii) Outlook
We forecast that consolidated results in the fiscal year ending March 31, 2024 (April 1,2023 to March 31, 2024) will be as shown below.
Net sales¥340.0 billion 6.0% increase year on year
Operating income¥24.0 billion 5.5% increase year on year
Ordinary income¥24.0 billion 4.5% increase year on year
Net income attributable toowners of the parent¥14.0 billion 1.4% increase year on year
In the fiscal year ending March 31, 2024, despite concerns that uncertainty in the global
situation and its associated impacts including soaring raw materials prices will continue,
we expect the impacts of semiconductor and component shortages to gradually be resolved inaddition to softened exchange rate fluctuations from the latter half of the fiscal year
ended March 31, 2023, Looking at the domains in which NESIC operates, we believe that it
will take time for telecom carriers to recover from curbs on investment, but foresee thatdemand for ICT will continue to be strong overall, including in the areas of DX andworkstyle innovation.
In light of the business environment described above, we have prepared the consolidated
financial forecast for the fiscal year ending March 31, 2024. According to the forecast, we- 4 -will continue to engage in proactive growth-oriented investment and incur costs, including
the development of new mission-critical systems to strengthen data management andaccelerated demonstration testing utilizing the new head office building we relocated to inMarch 2023. At the same time, we will accelerate initiatives aimed at the field of DX andnext-generation networks such as 5G, create new markets by combining both fields, andimprove the value provided to customers with consulting as the starting point. Throughthese efforts, we aim to increase both sales and profits by enhancing growth and earnings
capabilities.
Also note that the NESIC Group's financial results tend to show higher sales and profits
at the end of the fiscal year, in part due to SI and construction work for providers ofsocial and public services, with profits weighted toward the second half of the year.

(iii) Profit Distribution Policy and Dividends for the Fiscal Year Ended March 2023 and theFiscal Year Ending March 2024
We view the distribution of a reasonable share of profits to shareholders as one of our
top management priorities, and make every effort to reinforce the Company’s managementfoundation, strengthen its financial standing, and increase its earning capacity. While wealso place a great deal of importance on increasing our corporate value through growth byaccelerating strategic investment such as M&A, strengthening the business foundation andcreating new businesses that will allow us to expand our future areas of focus, we strive
to continually meet the expectations of our shareholders in our profit distribution.
In keeping with this approach, the Company decided that dividends per share for thefiscal year ended March 31, 2023 would be ¥23.00, as previously forecast. This combinedwith the interim dividend already paid brings our annual dividend to ¥46.00 per share,
which is an increase of ¥3.00 from the previous year.
For the fiscal year ending March 31, 2024, we will pay more dividends per share: anannual dividend of ¥49.00 a share, an interim dividend of ¥24.50 and a year-end dividendof ¥24.50.
Dividends per share (¥)
InterimYear end

Total

FY March 2023

23.00

23.00

46.00

FY March 2024 (Forecast)

24.50

24.50

49.00

- 5 -