Consolidated Financial Statements for the First Half of Fiscal Year ending March 31, 2023
28/Oct/2022
These financial statements have been prepared in accordance with accounting principals generally accepted in Japan.
NEC Networks & System Integration Corporation

Stock exchange listing:Code number:

Tokyo
1973

https://www.nesic.co.jp/english/index.html
1. Consolidated Results for the First Half (April 1, 2022 to September 30, 2022)(Rounded down to the nearest million yen.)(1) Net Sales and Income
Net sales Year-on-year(¥ million) change (%)
6 months ended Sep2022
6 months ended Sep
2021

Operating
Ordinary
Year-on-year
incomeincomechange (%)(¥ million)(¥ million)

Year-on-yearchange (%)

142,686

1.2

4,643

-39.1

4,762-39.6

140,961

-6.8

7,621

13.2

7,889

16.4

Net income
attributable
Net income
Year-on-year
to owners ofper sharechange (%)
the parent(¥)(¥ million)

Net income
per share(diluted)(¥)

6 months ended Sep
2,699
-42.6
18.12
—
2022
6 months ended Sep
4,703
18.6
31.58
—
2021
c.f. Comprehensive income: 1H/FY Mar 2023: ¥3,690 million (-36.9 %); 1H/FY Mar 2022: ¥5,849 million (39.0 %)(2) Financial Position
Owner'sNet assets
Total assets Net assets
equity ratio per share(¥ million) (¥ million)(%)(¥)
30/Sep/2022
245,905
138,15654.9
906.1331/Mar/2022
254,701
138,14952.9
904.66c.f. Owner's equity: 30/Sep/2022: ¥134,972 million; 31/Mar/2022 ¥134,742million
2. Dividends
1stquarter
FY ended Mar. 2022

—Dividends per share (¥)
3rdInterim
Year-endquarter
19.00

—

24.00

FY ending Mar.
—
23.00
—
23.00 ※2023(Forecast)
Note: Revisions to projected dividends for the quarter under review: No

Full year
43.00
46.00 ※※ Forecast

3. Financial Forecasts for Fiscal Year ending March 31, 2023 (April 1, 2022 to March 31, 2023)(Percentages represent change compared to the previous corresponding period.)
Net sales(¥ million)
330,000
FY ending Mar. 2023

Operating income(%)
6.3(¥ million)
22,000(%)-5.1

Ordinary income(¥ million)
22,000(%)-6.6

Net income attributableto owners of the parent(¥ million)(%)
13,000-13.5

Net incomeper share(¥)
87.28

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 thoseprojected. The major factors affecting actual results include the economic climate and social trends surrounding the business of thisCompany’s group, consumer trends vis-a-vis systems and services provided by this Company’s group, as well as pressure to lower prices andability to cope with the market in response to intensified competition.
Factors affecting results are not limited to the ones mentioned above.

4. Consolidated Financial Statements(1) Consolidated Balance Sheets
As ofMarch 31, 2022
AssetsCurrent assets
Cash and cash equivalents
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
OtherAllowance 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
Provision for office transfer cost
Other current liabilities
Total current liabilities
Non-curret liabilities
Long-term debt
Liabilities for retirement benefits
Other liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders' equity
Common stock
Capital surplus
Retained earnings
Treasury stock, at cost
Total shareholders' equity
Accumulated other comprehensive income
Net unrealized holding gain on available-for-sale 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, 2022

79,732
111,539
987
2,623
8,155
11,204(80)
214,161

82,88991,314
1,602
2,749
11,694
11,317(86)
201,482

12,807

12,235

388
3,901
4,290

271
3,703
3,975

13,6399,853(50)
23,44240,540254,701

13,654
14,609(50)
28,21344,423245,905

40,486
1,217
9,190
264
4,019
145
114
2,107
4
－
26,087
83,636

31,726
1,225
9,208
231
2,499
46
137
2,887
4
453
25,55873,9783,202
27,714
1,998
32,914
116,551

3,086
28,6432,041
33,771
107,749

13,122
16,694
105,673(259)
135,230

13,122
16,708104,798(251)
134,378

1,242
(517)
(1,213)(488)
3,407
138,149
254,701

1,905
(285)
(1,026)594
3,183
138,156
245,905

(2) Consolidated Statements of Income and Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
1H, FY March 2022
(6 months ended Sep 2021)

1H, FY March 2023
(6 months ended Sep 2022)

Net sales

140,961

142,686

Cost of sales

113,703

116,841

Gross profit

27,257

25,844

Selling, general and administrative expenses

19,636

21,201

Operating income (loss)

7,621

4,643

5

9

Dividend income of insurance

156

164

Other229

212

Total non-operating income

391

385

Interest expenses

47

79

Foreign exchange loss

－

77

Other

76

110

123
7,889

267
4,762

Gain on sale of investment in affiliates

141－

Total extraordinary inocome

141－

Expenses relating to move of the head office－519

Loss on liquidation of subsidiaries－

147

Provision of allowance for compensation for damage

324－

Total extraordinary losses

324

666

Income (loss) before income taxes

7,706

4,095

Income taxes

2,526

1,600

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

5,180

2,494476

(204)

4,703

2,699

Non-operating income
Interest income

Non-operating expenses

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

Extraordinary losses(Millions of yen)

(Millions of yen)

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

1H, FY March 2023
(6 months ended Sep 2022)

5,180

2,494

Net unrealized holding loss on other securities

564663Foreign currency translation adjustments

(96)

347

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

202

187

(1)

(2)

Total other comprehensive income

669

1,195

5,849

3,690

5,445

3,782

403

(91)

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(Millions of yen)

Cash flows from operating activities
Net income (loss) before income taxes
Depreciation and amortization
Amortization of goodwill
Expenses relating to move of the head office
Loss (gain) on liquidation of subsidiaries
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 andcorporate auditors
Increase (decrease) in accrued warranty on products
Increase (decrease) in accrued losses on sales contracts
Increase (decrease) in provision for compensation for damage
Interest and dividend income
Interest expense(Increase) decrease in notes and accounts receivable,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
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

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

1H, FY March 2023
(6 months ended Sep 2022)

7,706
1,606
117
－－
(5)
10(228)

4,095
1,906
117
519
147
(0)
(104)
134(97)
4(92)

(99)
23
526

(706)
(42)
47

－
(37)
79

30,098(50)(13,605)(2,022)(1,067)
21,67342(47)(5,422)
16,245

21,252(3,662)(8,896)(1,109)(1,052)
13,84137(79)(3,299)10,500(2,076)3(363)(143)
189(18)0(223)(2,632)(820)
0(494)(273)－(6)
1(783)(2,376)

1,369
(149)
21(3,122)
(29)
(146)
(2,056)(2)
11,55368,426
79,979(1,334)(148)
22(3,568)(25)(106)(5,161)
195
3,157
79,732
82,889(4) Segment Information
Business Segment Information
First half of fiscal March 2023 (6 months ended September 2022)(Millions of yen)
DX Solutions
Sales(1) Sales to third parties(2) Intersegment sales
Total
Operating income and loss

51,91551,915
5,263

Network
Solutions

36,28636,286
3,317

Environmental &Social Solutions

50,92050,920829

Others

3,563
3,563
83

Adjustments(4,851)

Total

142,686
142,6864,643

First half of fiscal March 2022 (6 months ended September 2021)(Millions of yen)
DX Solutions
Sales(1) Sales to third parties(2) Intersegment sales
Total
Operating income and loss

51,25751,257
5,588

NetworkSolutions

36,91936,9193,844

Environmental &Social Solutions

49,27349,273
2,228

Others

3,510
3,510
461

Adjustments(4,502)

Total

140,961
140,961
7,621