Note: This document is a translation of a part of the original Japanese version and provided for reference purposes only. In the event of any discrepancy
between the Japanese original and this English translation, the Japanese original shall prevail.

Consolidated Financial Results
for the Nine Months Ended December 31, 2023
[Japanese GAAP]
February 6, 2024
Company name: Nippon Signal Co., Ltd.
Stock exchange listing: Tokyo
Code number: 6741
URL: https://www.signal.co.jp
Representative: Hidehiko Tsukamoto

President and CEO and COO

Contact: Hiromasa Fujimoto

General Manager, General Affairs Department

Phone: 03-3217-7200
Scheduled date of filing quarterly securities report:

February 7, 2024

Scheduled date of commencing dividend payments:―
Availability of supplementary briefing material on quarterly financial results: Not available
Schedule of quarterly financial results briefing session:
Not scheduled(Amounts of less than one million yen are rounded down.)

1. Consolidated Financial Results for the Nine Months Ended December 31, 2023 (April 1, 2023 to December 31, 2023)(1) Consolidated Operating Results(% indicates changes from the previous corresponding period.)
Profit attributable to
Net sales
Operating profit
Ordinary profit
owners of parent
Nine months ended
Million yen%
Million yen%
Million yen%
Million yen%
December 31, 2023
57,105
6.3
1,395
15.0
2,151
8.4
667
(15.5)
December 31, 2022
53,711
(1.6)
1,213
22.2
1,985
(1.3)
789
(24.7)(Note) Comprehensive income:Nine months ended December 31, 2023:¥ 2,489 million [33.8 %][-%]Nine months ended December 31, 2022:¥ 1,860 million
Basic earnings
per share
Nine months ended
December 31, 2023
December 31, 2022

Diluted earnings
per share

Yen

Yen

10.70
12.66

-

(2) Consolidated Financial Position
Total assets
As ofMillion yen
December 31, 2023
152,739
March 31, 2023
146,019(Reference) Equity: As of December 31, 2023:
As of March 31, 2023:

Net assets
Million yen¥¥

90,15689,351
90,156 million
89,351 million

Capital adequacy ratio
%

59.0
61.2

2. Dividends
Annual dividends
1stquarter-end
Fiscal year ended
March 31, 2023
Fiscal year ending
March 31, 2024

2ndquarter-end

3rdquarter-end

Year-end

Total

Yen

Yen

Yen

Yen

Yen

-

7.00

-

20.00

27.00

-

7.00

20.00

27.00

Fiscal year ending
March 31, 2024 (Forecast)(Note) Revision to the forecast for dividends announced most recently: None

3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31, 2024 (April 1, 2023 to March 31, 2024)(% indicates changes from the previous corresponding period.)
Profit attributable Basic earnings per
Net sales
Operating profit
Ordinary profit
to owners of parent
shareMillion yen%

Million yen%

Million yen%

Million yen%

Yen

95,000

11.2

6,000

17.4

6,800

14.9

4,700

15.3

75.36

Full year(Note) Revision to the financial results forecast announced most recently: None
* Notes:(1) Changes in significant subsidiaries during the period under review (changes in specified subsidiaries resulting in changes inscope of consolidation): No(2) Accounting methods adopted particularly for the preparation of quarterly consolidated financial statements: Yes(3) Changes in accounting policies, changes in accounting estimates and retrospective restatement
1) Changes in accounting policies due to the revision of accounting standards: No
2) Changes in accounting policies other than 1) above: No
3) Changes in accounting estimates: No4) Retrospective restatement: No(4) Total number of issued shares (common shares)
1) Total number of issued shares at the end of the period (including treasury shares):
As of December 31, 2023:

68,339,704 shares

As of March 31, 2023:

68,339,704 shares2) Total number of treasury shares at the end of the period:
As of December 31, 2023:
5,968,292 shares
As of March 31, 2023:

5,968,270 shares

3) Average number of shares during the period:
Nine months ended December 31, 2023: 62,371,422 shares
Nine months ended December 31, 2022: 62,371,551 shares*

These quarterly consolidated financial results reports are exempt from quarterly review conducted by certified public accountants oran audit corporation.

*

Proper use of earnings forecasts, and other special matters
The statements regarding forecast of financial results in this report are based on the information that is available to the Company, as
well as certain assumptions that are deemed to be reasonable by management. Therefore, there might be cases in which actual results
differ materially from forecast values due to various factors.
For the forecast of financial results, please refer to “1. Qualitative Information on Quarterly Financial Results, (3) Explanation ofConsolidated Financial Results Forecast and Other Forward-looking Information” on page 3 of the Attachments.

Table of Contents - Attachments
1. Qualitative Information on Quarterly Financial Results ...........................................2(1) Explanation of Operating Results ................................................................................ 2(2) Explanation of Financial Position ............................................................................... 3(3) Explanation of Consolidated Financial Results Forecast and Other
Forward-looking Information ...................................................................................... 3

2. Quarterly Consolidated Financial Statements and Principal Notes.......................... 4(1) Quarterly Consolidated Balance Sheets ...................................................................... 4(2) Quarterly Consolidated Statements of Income and Comprehensive Income ............... 6(3) Quarterly Consolidated Statements of Cash Flows...................................................... 8(4) Notes to Quarterly Consolidated Financial Statements ............................................... 9(Notes on going concern assumption) .......................................................................... 9(Notes in case of significant changes in shareholders’ equity) ..................................... 9(Accounting methods adopted particularly for the preparation ofquarterly consolidated financial statements)................................................................. 9(Additional information) ............................................................................................. 9(Segment information, etc.)........................................................................................ 10-1-

1. Qualitative Information on Quarterly Financial Results(1) Explanation of Operating Results
During the nine months ended December 31, 2023 (April 1,2023 to December 31, 2023), the outlook of the global
economy remained uncertain due to such factors as monetary tightening by central banks in the US and Europe, Russia’s
invasion of Ukraine, heightened tensions in the Middle East, and concerns over the slowdown in economic activities
in China caused by its stagnant real estate market.
The Japanese economy has been on a gradual recovery trend due to such factors as strong consumption by tourists
visiting Japan on the back of the weaker yen. However, there exist concerns over the slowdown in economic activities
due to factors such as soaring energy prices caused in part by the impact of the economic sanctions against Russia andweak consumer consumption caused by rising prices.
Under these circumstances, the Group has continued to solve social issues in Japan and overseas by supporting theevolution of infrastructure with safe and comfortable solutions and promote adaptation to changes in the post-COVID19 business environment, based on the second medium-term management plan “Next Stage 24” that began in FY2022.
The Company’s business results for the nine months ended December 31, 2023 were 77,808 million yen in orders
received (down 1.9% year-on-year) and 57,105 million yen in net sales (up 6.3% year-on-year). Operating profit was
1,395 million yen (up 15.0% year-on-year), ordinary profit was 2,151 million yen (up 8.4% year-on-year), and profit
attributable to owners of parent was 667 million yen (down 15.5% year-on-year).
An overview of the Company’s business by segment is as follows.
[Transportation Infrastructure]
In Railway Signal Systems, we received orders for and recorded sales of Automatic Train Control (ATC) systems,
interlocking devices, Communication-Based Train Control (CBTC) systems and other products from railroad operatorsin the Japanese market.
In addition, in terms of our new initiative, we have been conducting demonstration operations utilizing an automatictrain operation device on the Kashii Line of Kyushu Railway Company since December 2020. As their results havebeen satisfactory, we plan to start automatic operation in March 2024. Promoting the automatization and mechanizationof work related to operation are expected to improve safety and reduce costs of training train operators, as well as solve
social challenges such as the decrease in the working population.
In the overseas market, such as in Taiwan and India, we received orders for and recorded sales of Railway Signal
Systems.
For Smart Mobility Systems, particularly Road Traffic Safety Systems, we received orders for and recorded sales oftraffic control systems and parking meters. We participated in the Smart Mobility Infrastructure Collaborative Innovation
Partnership established in November 2023 with the aim of conducting research on and developing a system, with which
vehicles, bicycles, and pedestrians notify each other of danger and other information. We will continue to provide products
and technologies which achieve linkage with existing transportation infrastructure.
As a result of the above, orders received were 36,996 million yen (down 26.2% year-on-year) and net sales were28,248 million yen (down 1.2% year-on-year). Segment profit was 1,347 million yen (down 20.1% year-on-year).
[ICT Solutions]
In AFC, particularly Station Service Network Systems, we received orders for and recorded sales of platform screen
doors, ticket vending machines, passenger gates, parking lot equipment and other products in the Japanese market. In
terms of future initiatives, we will promote efforts towards realization of a society in which MaaS is widely utilized,
through development of products from the perspective of reducing fixed costs and enhancing our capabilities to respondto customer needs with a focus on digital transformation (DX).
In the overseas markets, especially in Bangladesh and Egypt, we received orders for and recorded sales of AFC
systems, platform screen doors.
In R&S, which focuses on robotics and sensing, we received orders for and sales of 3D laser ranging image sensors
to be installed in platform screen doors as well as construction and agricultural equipment, X-ray baggage checking
equipment, which speedily detects the presence of dangerous items and other products. Based on the basic concept of-2-

fail-safe, we are also promoting efforts to realize a future society in which humans and robots work together byintegrating the latest robotics technologies with our core technologies, such as sensors and image analysis, which wehave cultivated through our past experience.
As a result of the above, orders received were 40,811 million yen (up 40.0% year-on-year) and net sales were 28,856
million yen (up 14.9% year-on-year). Segment profit was 2,612 million yen (up 25.2% year-on-year).

(2) Explanation of Financial Position(i) Assets, Liabilities and Net Assets
Total assets as of December 31, 2023 were 152,739 million yen, an increase of 6,720 million yen from the end of theprevious fiscal year, mainly due to a 11,915 million yen increase in inventories, a 2,096 million yen increase ininvestment securities due in part to a rise in fair value, and a 1,364 million yen increase in cash and deposits, despite a
9,786 million yen decrease in notes and accounts receivable - trade, and contract assets.
Liabilities increased by 5,915 million yen from the end of the previous fiscal year to 62,583 million yen, mainly
due to a 3,384 million yen increase in short-term borrowings and a 1,686 million yen increase in electronically recorded
obligations - operating.
Net assets were 90,156 million yen, an increase of 805 million yen from the end of the previous fiscal year, mainly
due to the recording of 1,890 million yen in valuation difference on available-for-sale securities and the recording of
667 million yen in profit attributable to owners of parent, despite a 1,684 million yen decrease in retained earnings from
dividends, etc.
(ii) Cash FlowsThe balance of cash and cash equivalents (“cash”) as of December 31, 2023 totaled 9,729 million yen, an increase of
1,364 million yen from the end of the previous fiscal year.
Cash flows in each area of activity during the nine months ended December 31, 2023 are as follows.
(Cash flows from operating activities)
Net cash provided by operating activities was 1,281 million yen, compared with a cash inflow of 1,523 million yen in
the same period of the previous fiscal year. The principal cash inflow factor was a decrease in trade receivables, while
the principal cash outflow factor was an increase in inventories.
(Cash flows from investing activities)
Net cash used in investing activities was 1,635 million yen, compared with a cash outflow of 2,397 million yen in thesame period of the previous fiscal year. The principal cash outflow factor was the acquisition of property, plant andequipment and intangible assets, while the principal cash inflow factor was the sale of investment securities.
(Cash flow from financing activities)
Net cash provided by financing activities was 1,753 million yen, compared with a cash inflow of 3,592 million yen in
the same period of the previous fiscal year. The principal cash inflow factor was an increase in cash from short-termborrowings, while the principal cash outflow factor was dividend payments.

(3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information
There are no revisions to the full-year consolidated earnings forecast for the fiscal year ending March 31, 2024 (April
1, 2023 to March 31, 2024) announced on May 10, 2023.
Among the Group’s main businesses, Railway Signal Systems and Smart Mobility Systems in the Transportation
Infrastructure segment and AFC in the ICT Solutions segment tend to have a higher proportion of the Group’s sales atthe end of each fiscal year, as capital investment by domestic railroad operators, which are our major customers, andpublic investment by police and other entities are the main drivers.

-3-

2. Quarterly Consolidated Financial Statements and Principal Notes(1) Quarterly Consolidated Balance Sheets(Million yen)
As of March 31, 2023

As of December 31, 2023

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade, and contract assets

8,407

9,771

63,97954,192

Electronically recorded monetary claims - operating

1,521

1,046

Merchandise and finished goods

4,609

8,448

Work in process

9,819

15,668Raw materials and supplies

5,684

7,911

Other
Allowance for doubtful accounts

3,282
(1)

4,923
(0)

Total current assets

97,302

101,961

Buildings and structures, net
Machinery, equipment and vehicles, net

6,486

6,390

1,069

1,020

Tools, furniture and fixtures, net

1,492

1,773

Land

5,488

5,488

Leased assets, net
Construction in progress

77
1,696

71
1,678

Total property, plant and equipment

16,31016,422

2,079

2,610

24,571

26,6672

2

Retirement benefit asset

2,476

2,555

Deferred tax assets

1,463

730

Other

1,833

1,811

(20)

30,326

31,74548,716(20)

50,777

146,019

152,739

Non-current assets
Property, plant and equipment

Intangible assets
Investments and other assets
Investment securities
Long-term loans receivable

Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets-4-

(Million yen)
As of March 31, 2023

As of December 31, 2023

Liabilities
Current liabilities
Notes and accounts payable - trade

11,087

11,319

Electronically recorded obligations - operating

4,110

5,797

Short-term borrowings

17,51520,900

Lease liabilities

7

6

Income taxes payable

1,489

535

Provision for bonuses

2,554

1,300

742

443

Other

9,070

11,654

Total current liabilities

46,57751,958

99

99

28

27

Provision for loss on orders received

Non-current liabilities
Long-term deposits received
Long-term accounts payable - other
Lease liabilities
Deferred tax liabilities
Provision for contingent loss

7

6

551

506

–

545

9,402
10,0909,439
10,62456,66862,583

Share capital
Capital surplus

10,00010,000

7,585

7,585

Retained earnings

68,19867,181

79,212(6,571)

78,196

10,10011,99038
10,138(29)
11,960Retirement benefit liability
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity

Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets

89,351

Total liabilities and net assets

146,019-5-(6,571)

90,156

152,739

(2) Quarterly Consolidated Statements of Income and Comprehensive Income
Nine Months Ended December 31(Million yen)
For the nine months
ended December 31, 2022

For the nine months
ended December 31, 2023

Net sales

53,711

57,105

Cost of sales

41,67845,102Gross profit

12,033

12,002

Selling, general and administrative expenses

10,82010,607

Operating profit

1,213

1,395

Non-operating income
Interest income

00Dividend income
Dividend income of life insurance

443

446

155

189

Rental income from real estate

234

236

Nursing services income

14

15

Other

64

71

Total non-operating income

912

958

Interest expenses

30

31

Rental expenses on real estate

38

40

Taxes and dues

18

63

Nursing services expense

26

25

Other

27

42

Non-operating expenses

Total non-operating expenses
Ordinary profit

141

202

1,985

2,151

Extraordinary income
Gain on sale of non-current assets

00Gain on sale of investment securities

0459

Total extraordinary income

0460

Loss on sale and retirement of non-current assets

20Loss on valuation of investment securities–

0

Loss on valuation of golf club membership

12–

Provision for contingent loss–

545

Extraordinary losses

Total extraordinary losses

15

546

Profit before income taxes

1,969

2,064

Income taxes

1,180

1,397

Profit789

667(Details)
Profit attributable to owners of parent

789

667

-6-

(Million yen)
For the nine months
ended December 31, 2022

For the nine months
ended December 31, 2023

Other comprehensive income
Valuation difference on available-for-sale securities

1,089

Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income

1,890

(19)

(68)

1,070

1,821

1,860

2,489

1,860

2,489

(Details)
Comprehensive income attributable to owners of parent-7-

(3) Quarterly Consolidated Statements of Cash Flows(Million yen)
For the nine months
ended December 31, 2022

For the nine months
ended December 31, 2023

Profit before income taxes

1,969

2,064

Depreciation

1,764

1,696

Cash flows from operating activities

Loss (gain) on sale and retirement of non-current assets

20Loss (gain) on sale of investment securities

(0)

(459)

30

31

Increase (decrease) in provision for contingent loss–

Interest and dividend income
Interest expenses(444)

Decrease (increase) in trade receivables
Decrease (increase) in inventories
Increase (decrease) in trade payables
Increase (decrease) in contract liabilities

9,150

10,261(8,253)(11,915)

170

(37)

(1,425)
2,625

Increase (decrease) in retirement benefit liability
Other, net(3,470)Subtotal

2,118Interest and dividends received

444

Interest paid

(30)

Income taxes paid
Income taxes refund

1,918

1,361

(2,330)
2,691

446
(31)

(1,123)(1,834)

(38)

(37)

114
1,523

Net cash provided by (used in) operating activities

545
(446)

9

1,281

Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits

49

Purchase of property, plant and equipment
Purchase of intangible assets(1,577)

0

1,218
(339)

(393)

Purchase of investment securities(754)

Proceeds from sale of investment securities
Other, net(165)

Net cash provided by (used in) investing activities(2,397)

Cash flows from financing activities
Net increase (decrease) in short-term borrowings

5,400

Proceeds from deposits received from an affiliated company
Proceeds from deposits received from an unaffiliated entity
Repayments of lease liabilities

40
(100)
(65)

Dividends paid
Decrease (increase) in treasury shares

(904)
(31)

(1,635)
3,304

(10)

147

(5)

(1,681)(1,682)

(9)

(34)

(0)

Net cash provided by (used in) financing activities

37(1,095)

3,592

(0)

1,753

Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents

2,708

1,364

Cash and cash equivalents at beginning of period

6,344

8,365

Cash and cash equivalents at end of period

9,053

9,729

-8-

(4) Notes to Quarterly Consolidated Financial Statements(Notes on going concern assumption)
Not applicable(Notes in case of significant changes in shareholders’ equity)
Not applicable(Accounting methods adopted particularly for the preparation of quarterly consolidated financial statements)(Deferral of cost variances)
Cost variances arising from seasonally fluctuating operating rates are expected to be mostly eliminated by the endof the cost accounting period (end of the fiscal year or the second quarter of the fiscal year); therefore, such costvariances are deferred as current liabilities (other) at the end of the third quarter of the fiscal year under review.
(Calculation of tax expenses)
Tax expenses are calculated by reasonably estimating the effective tax rate after applying tax effect accounting to
profit before income taxes for the consolidated fiscal year, including the third quarter of the fiscal year under review,
and multiplying income/loss before income taxes for the quarter by the estimated effective tax rate.
(Additional information)
The Company had a disagreement with the tax authority in India regarding the disallowance of expenses incurred
outside India and so forth in the tax return of its project offices in India. The Company then filed a suit with the Income
Tax Appellate Tribunal in India in January 2024, as a determination was made in December 2023, which did not accept
part of the Company’s assertions.
Against the backdrop of the events, the Company has appropriated provision for contingent loss of 319 million
Indian rupees (545 million yen at the exchange rate as of the end of December 2023) to provide for penalties which
may arise due to such rejection and any other determination.
The Company deems the amount reasonable at this moment, as it is calculated based on the notices by the tax
authority in India, although the amount may change depending future situations.

-9-(Segment information, etc.)[Segment information]
I For the nine months ended December 31, 2022 (from April 1, 2022 to December 31, 2022)
Information on net sales and profit (loss) by reportable segment and classification of revenues(Millions of yen)
Quarterly
consolidated
statements ofincome andcomprehensive
income(Note 2)

Reportable segment
Adjustments(Note 1)

Transportation
Infrastructure

ICT Solutions

Net sales to external customers
Intersegment internal sales ortransfers

28,58825,12353,711-53,711

-

-

-

-

-

Total
Goods or services transferred
at a point in time
Goods or services transferredover time
Total

28,58825,12353,711-53,711

7,126

7,778

14,904-

14,904

21,462

17,34538,807-38,80728,58825,12353,711-53,711

Segment profit

1,685

2,085

3,771

(2,557)

1,213

Total

Net sales

Notes: 1. Adjustments of (2,557) million yen in segment profit represent corporate expenses that are not allocated toreportable segments. Corporate expenses are primarily expenses of the administration divisions of the parent
company’s headquarters that are not attributable to any of the reportable segments.
2. Segment profit is adjusted with operating profit in the quarterly consolidated statements of income andcomprehensive income.

II For the nine months ended December 31, 2023 (from April 1, 2023 to December 31, 2023)
Information on net sales and profit (loss) by reportable segment and classification of revenues(Millions of yen)
Quarterly
consolidated
statements ofincome andcomprehensive
income(Note 2)

Reportable segment
Adjustments(Note 1)

Transportation
Infrastructure

ICT Solutions

Net sales to external customers
Intersegment internal sales ortransfers

28,24828,856

57,105-

57,105

-

-

-

-

-

Total
Goods or services transferred
at a point in time
Goods or services transferredover timeTotal

28,24828,856

57,105-

57,105

7,825

11,95819,783-

19,783

20,423

16,89837,321-

37,321

28,24828,856

57,105-

57,105

1,347

2,612

3,959

(2,563)

1,395

Total

Net sales

Segment profit

Notes: 1. Adjustments of (2,563) million yen in segment profit represent corporate expenses that are not allocated toreportable segments. Corporate expenses are primarily expenses of the administration divisions of the parent
company’s headquarters that are not attributable to any of the reportable segments.
2. Segment profit is adjusted with operating profit in the quarterly consolidated statements of income andcomprehensive income.

- 10 -