Consolidated Financial Statements for the Fiscal Year ended March 31, 2023.

28-Apr-2023
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 Fiscal Year ended March 31, 2023
(Rounded down to the nearest million yen.)(1) Net Sales and Incomes(Percentages represent change compared with the same period of the previous fiscal year.)Net sales(¥ million)

Year-on-yearchange (%)

Operating income(¥ million)

Year-on-yearchange (%)

Ordinary income(¥ million)

Year-on-year change(%)

Net income
attributable toowners of theparent(¥ million)

Year-on-yearchange (%)

FY ended March/23

320,802

3.4

22,751(1.9)

22,970(2.5)

13,813(8.0)

FY ended March/22

310,334(8.5)

23,181(9.3)

23,550(7.6)

15,021(4.6)（Note) Comprehensive income : FY Mar.2023 : ¥14,676 million/(13.6)%

Net income
per share (¥)

FY ended March/23

92.74

FY ended March/22

100.85（Reference)

Net income pershare (diluted)(¥); FY Mar.2022 : ¥16,978 million/(5.6)%

Return on equity(%)

Ordinary income/
Total assets (%)

Operatingincome/ Net
sales (%)

10.0%

8.8%

7.1%

11.6%

9.3%

7.5%

—

Equity in earnings of affiliates : FY Mar.2023 : ¥71 million; FY Mar.2022 : ¥27 million(2) Financial Position
Total assets(¥ million)

Net assets(¥ million)

Owner's equity
ratio (%)

Net assets per
share (¥)

31-Mar-23

267,000

145,71452.9

948.2331-Mar-22

254,701

138,14952.9

904.66c.f. Owner's equity: 31/3/2023 ¥141,242 million ; 31/3/2022 ¥134,742 million(3) Cash FlowsNet cash provided by (used in)operating activities(¥ million)

Net cash provided by (used in)investing activities(¥ million)

Net cash provided by (used in)financing activities(¥ million)

Cash and cash equivalents at endof year(¥ million)

FY ended March/23

2,816(4,934)(9,243)68,549FY ended March/22

22,674(7,162)(4,267)

79,732

2. Dividends
Dividends per share (¥)

Total dividends paid
(full year, ¥million)

Payout ratio(consolidated)(%)

Dividends/Net assets(consolidated)(%)

1stquarter

Interim3rdquarter

Year-end

Full year

FY ended 3/2022

—

19.00

—

24.00

43.00

6,404

42.6

5.0

FY ended 3/2023
FY ending 3/2024（Forecast)

—

23.00

—

23.00

46.00

6,851

49.6

5.0

—

24.50

—

24.50

49.00

52.1

3. Financial Forecasts for Fiscal Year ending March 31, 2024
(Percentages represent change compared to the previous corresponding period.)

Net sales

FY ending 3/2024

Operating income

Ordinary income

Net income attributable to ownersof the parent

Net income
attributable toowners of theparent pershare(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥ million)

(%)

(¥)

340,000

6.0

24,0005.5

24,0004.5

14,0001.4

93.99

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 ondefinite facts. Please be awarethat 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-vissystems and services provided by this Company’s group, as well as pressure to lower prices andability to cope with the market in response tointensified 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
Electronically recorded obligations
Accounts receivable
Contract assets
Purchased goods,materials and supplies
Work in processOther
Allowance for doubtful accounts
Total current assets
Non-current assets
Property and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures (net)
Machinery and vehicles
Accumulated depreciation
Machinery and vehicles (net)
Furniture and fixtures
Accumulated depreciation
Furniture and fixtures (net)Land
Construction in progress
Other
Accumulated depreciation
Other (net)Total property and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Asset for retirement benefits
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 consumption taxes
Contract liabilities
Accrued bunuses to directors and corporate auditors
Accrued warranty on products
Accrued losses on sales contracts
Accrued 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
Deferred gains or losses on hedges
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 ofMarch 31, 2023

79,732319
987
82,554
28,665
2,623
8,155
11,204(80)
214,161

68,549585
1,165
88,33834,372
3,151
12,932
11,724(85)
220,735

10,988(6,787)
4,201
236
(168)
67
16,634(12,499)
4,134
1,507
2,644
677
(425)
251
12,807

14,888(7,897)
6,991
662
(190)
472
17,677(13,310)
4,366
1,546
695
705
(434)
271
14,343

388
3,901
4,290

153
3,592
3,745

4,180
281
13,6395,391(50)
23,44240,540254,701

7,427
293
14,172
6,379(97)
28,17546,264
267,000

40,486
1,217
9,190
264
4,019
2,150
8,229
145
114
2,107
4
－
15,707
83,63644,571
1,467
8,653
202
4,493
1,251
7,968
144
161
515
3
394
17,06386,8903,202
27,714
1,998
32,914
116,551

3,000
28,4242,970
34,395
121,285

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

13,122
16,708112,486(252)
142,065

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

1,382
10(284)(1,930)(822)
4,471
145,714
267,000

(2) Consolidated Statements of Income and Comprehensive Income(Consolidated Statements of Income)(Millions of yen)

FY Mar/2022
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income of insurance
Reward income
Insurance income
Share of profit of entities accounted for using equity method
Other
Total non-operating income
Non-operating expenses
Interest expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sale of investment in affiliates
Total extraordinary inocome
Extraordinary losses
Expenses relating to move of the head office
Loss on liquidation of subsidiaries
Loss on revision of retirement benefit plan
Compensation for damage
Total extraordinary losses
Income before income taxes
Income taxes - current
Income taxes - deferred
Income taxes
Net income

310,334
246,861
63,47340,292
23,181

320,802254,257
66,545
43,79422,751

14
156
99
44
27
353
696

16
164
77
72
71
256
657

101
225
327
23,550219
218
438
22,970

141
141

－
－－－
－
324
324
23,367
7,572
737

571
147
106
－
825
22,145
7,536
(272)

8,310

7,264

15,057

14,880351,067

15,021

13,813

Net income attributable to non-controlling interests
Net income attributable to owners of the parent

FY Mar/2023(Millions of yen)

FY Mar/2022
Net income
Other comprehensive income
Net unrealized holding loss on other securities
Deferred gains or losses on hedges
Foreign currency translation adjustments
Adjustments for retirement benefit
Share of other comprehensive income of associates
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:
Owners of the parent
Non-controlling interests

FY Mar/2023

15,057

14,8801,072－(16)866

14010362(716)

0
1,921
16,978(1)(204)
14,676

16,9762

13,4791,196

(3) Consolidated Statements of Cash Flows(Millions of yen)
FY Mar/2023

FY Mar/2022
Cash flows from operating activities
Net income before income taxes
Depreciation and amortization
Amortization of goodwill
Expenses relating to move of the head office
Loss (gain) on liquidation of subsidiaries
Loss (gain) on revision of retirement benefit plan
Increase (decrease) in allowance for doubtful receivables(Increase) decrease in asset for retirement benefitIncrease (decrease) in liability for retirement benefits
Increase (decrease) in accrued bonuses to directors and corporate
auditors
Increase (decrease) in accurued warranty on products
Increase (decrease) in accurued losses on sales contracts
Increase (decrease) in accurued 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 resulting in change
in scope of consolidation
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 debtProceeds from long-term deptNet (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 equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

23,367
3,279
271
－－－
(11)
27(302)

22,145
4,170
235
571
147
106
47(189)
(208)

(13)

(1)

30
1,599
(707)
(54)
10146(1,756)
0(47)
219

12,513(10,486)730(5,179)(1,251)(1,419)32,98254(101)(10,259)
22,674(5,309)4,187(1,192)(2,315)
10,37147(214)(7,386)
2,816(3,427)19(962)(849)(1,309)0(1,144)(1,381)

189

－

(18)
0(2,114)(7,162)(7)
19(1,111)(4,934)

2,270(3,298)3,000
20(5,949)(30)(280)(4,267)61
11,30568,426
79,732(1,782)(264)－
22(6,990)(25)(202)(9,243)
178(11,182)
79,732
68,549(4) Segment InformationBusiness Segment

Year ended March 31, 2022
(Millions of yen)
DX Solutions
Orders received
Sales(1) Sales to third parties(2) Intersegment sales
Total
Operating income (loss)

NetworkSolutions

Environmental &Social Solutions

OthersAdjustments

Total

119,454

84,339128,682

4,282

---

336,759

107,971--107,971
13,027

81,874--81,874
10,831

115,033--115,033
8,177

5,455
--5,455869------(9,724)

310,334--310,334
23,181*Our business segments were reorganized in April 2022 in line with corporate strategy. Segment information related to the fiscal year
ended March 2022 was reclassified for disclosure to reflect the changes in this event.

Year ended March 31, 2023
(Millions of yen)
DX Solutions
Orders received
Sales(1) Sales to third(2) Intersegment sales
Total
Operating income (loss)

NetworkSolutions

Environmental &Social Solutions

OthersAdjustments

Total

122,651

92,107

132,653

8,630

---

356,043

114,244--114,244
13,21079,217--79,217
9,756

119,241--119,241
10,683

8,099--8,099302------(11,202)

320,802--320,802
22,751