Consolidated Financial Statements for the First Nine Months of Fiscal Year ending March 31, 2022
31/Jan/2022
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 Nine Months (April 1, 2021 to December 31, 2021)
of Fiscal Year ending March 31, 2022

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

9 months/FY Mar
2022
9 months/FY Mar2021

Net sales

Year-on-year

Operating

Year-on-year

Ordinary

Year-on-year(¥ million)change (%)

incomechange (%)

incomechange (%)

218,824-6.3

12,168-11.8

12,516-9.7

233,469

9.1

13,80368.2

13,85669.0

Net income

Net income

per shareper share(¥)(diluted) (¥)

51.60

—

Net income
attributableto owners of
the parent
9 months/FY Mar
2022
9 months/FY Mar

Year-on-yearchange (%)(¥ million)
7,685

-8.0

8,358
94.5
56.12
—
2021
c.f. Comprehensive income: 9 Months/FY Mar 2022: ¥8,255 million (-6.0%); 9 Months/FY Mar 2021: ¥8,787 million (77.8%)* 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

31/Dec/2021

Total assets

Net assets(¥ million)(¥ million)

236,922

129,428

Owner'sequity ratio(%)
53.3

Net assets
per share (¥)
848.3631/Mar/2021
250,338
127,11749.4
830.47c.f. Owner's equity: 30/Dec/2021: ¥126,357 million; 31/Mar/2021: ¥123,682 million
2. Dividends
Full year—Dividends per share (¥)
3rd
InterimYear-endquarter
19.00—
19.00 ※

—

14.00

35.00

1stFY ending Mar.
2022
FY ending Mar. 2021

quarter—

21.00

38.00 ※※ Forecasts

Note: Revisions to projected dividends for the quarter under review: no3. Financial Forecasts for Fiscal Year ending March 31, 2022 (April 1, 20201to 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 parentper share(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥)

313,000-7.7

22,500Net sales

FY ending Mar. 2022

-12.0

22,800-10.6

14,500

-7.9

97.36

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 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 receivableNotes 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
Dec 31, 2021

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

72,316－
99,607
1,469
2,907
9,517
10,456(84)
196,189

10,845

12,165

623
4,284
4,908

447
3,914
4,361

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

14,9689,288(51)
24,20540,732236,922

44,188
2,649
6,360
3,298
5,954
159
83
512
711
6
27,55091,47433,950
1,160
7,739
3,281
1,770
31
101
2,253
4
－
25,92076,213466
29,233
2,046
31,745
123,220260
28,8102,210
31,280107,493

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

13,122
16,694
98,338(259)
127,895

169(533)(2,080)(2,443)
3,435
127,117250,338

791(553)(1,776)(1,538)3,071
129,428
236,922

(2) Consolidated Statements of Income and Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
1Q-3Q, FY March 2021

1Q-3Q, FY March 2022

(9 months ended Dec 2020)(9 months ended Dec 2021)

Net sales

233,469

218,824

Cost of sales

191,896

176,827

Gross profit

41,572

41,996

Selling, general and administrative expenses

27,76929,828Operating income (loss)

13,803

12,168Interest income

19

9Dividend income of insurance

142

156

Other

228

349

Total non-operating income

390

516

Interest expenses

7677

Loss on disposal of property and equipment

4638

Other

215

52

338
13,856

168
12,516

Gain on sale of investment in affiliates－141

Total extraordinary inocome－141

Provision of allowance for compensation for damage

802324

Total extraordinary losses

802324

Income (loss) before income taxes

13,053

12,333

Income taxes

4,262

4,912

Net income (loss)
Net income (loss) attributable to non-

8,790

7,421

432(263)

8,358

7,685

Non-operating income

Non-operating expenses

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

Extraordinary losses

controlling interests
Net income (loss) attributable to owners of the parent(Millions of yen)
1Q-3Q, FY March 2021

1Q-3Q, FY March 2022

(9 months ended Dec 2020)(9 months ended Dec 2021)

8,790

7,421

2621

Deferred gains or losses on hedges(25)－Foreign currency translation adjustments

(279)

(91)

Adjustments for retirement benefit

298

303

accounted for using equity method0(0)Total other comprehensive income

(3)

834

8,787

8,255

8,463

8,590

323(335)

Net income (loss)
Other comprehensive income
Net unrealized holding loss on other securities

Share of other comprehensive income of associates

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

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

1Q-3Q, FY March 2022

(9 months ended Dec 2020)(9 months ended Dec 2021)

Cash 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 and13,053
2,387
179
0(57)
419

12,333
2,415
176
(4)
15(134)

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

(108)
(12)
(1,724)

(126)
17
1,822

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

(691)
(41)
76
5,959

(707)
(47)
77
－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－
(1,078)3,745
135(119)
22,12240(72)(5,512)
16,57723,569(930)(11,736)(1,240)(2,572)
22,92847(74)(9,778)13,122(2,272)1(375)(425)
60－
1(489)(3,499)(2,440)19(602)(683)
189(17)0(367)(3,902)

1,774
(223)
(2)
(4,154)(23)(295)(2,924)

1,080
(223)
21
(5,943)(29)(213)(5,307)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(67)
10,08558,321(22)
3,889
68,426

exclusion of a subsidiary from consolidation
Cash and cash equivalents at end of period(532)
67,874－72,316

(4) Segment Information
Business Segment Information
First nine months of fiscal March 2021 (9 months ended December 2020)(Millions of yen)Sales(1) Sales to third parties(2) Intersegment sales
Total
Operating income and loss

Digital Solutions

NetworkInfrastructures

Engineering &Support Services

83,776
83,776
8,542

60,38460,384
4,659

82,02782,027
7,020

Others

7,279
7,279
598

Adjustments

Total(7,018)233,469
233,469
13,803First nine months of fiscal March 2022 (9 months ended December 2021)(Millions of yen)Sales(1) Sales to third parties(2) Intersegment sales
Total
Operating income and loss

DigitalNetwork

Engineering &Solutions

Infrastructures

Support Services

67,17067,1705,271

67,65367,653
4,431

79,506
79,506
8,901

Others

4,492
4,492
542

Adjustments(6,977)

Total

218,824
218,824
12,168