Consolidated Financial Statements for the First Half of Fiscal Year ending March 31, 2024
30/Oct/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 First Half (April 1, 2023 to September 30, 2023)(Rounded down to the nearest million yen.)(1) Net Sales and Income
Net sales Year-on-year(¥ million) change (%)
6 months ended Sep2023
6 months ended Sep
2022

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

Year-on-yearchange (%)

155,195

8.8

6,224

34.1

6,161

29.4

142,686

1.2

4,643(39.1)

4,762(39.6)

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

Net income
per share(diluted)(¥)

6 months ended Sep
3,600
33.4
24.17
—
2023
6 months ended Sep
2,699(42.6)
18.12
—
2022
c.f. Comprehensive income: 1H/FY Mar 2024: ¥3,606 million <(2.3%)>; 1H/FY Mar 2023: ¥3,690 million <(36.9%)>(2) Financial Position

30/Sep/2023

Owner'sNet assets
Total assets Net assets
equity ratio per share(¥ million) (¥ million)(%)(¥)
255,687
145,89455.2
947.9031/Mar/2023
267,000
145,71452.9
948.23c.f. Owner's equity: 30/Sep/2023: ¥141,206 million; 31/Mar/2023 ¥141,242million
2. Dividends
1stquarter
FY ended Mar. 2023

—Dividends per share (¥)
3rdInterim
Year-endquarter
23.00—23.00FY ending Mar.
—
24.50
—
24.50 ※2024
Note: Revisions to projected dividends for the quarter under review: No

Full year
46.00
49.00 ※※ Forecast

3. Financial Forecasts for Fiscal Year ending March 31, 2024 (April 1, 2023 to March 31, 2024)(Percentages represent change compared to the previous corresponding period.)
Net sales

FY ending Mar. 2024

Operating income

Ordinary income(¥ million)(%)(¥ million)(%)(¥ million)(%)

350,000

9.1

24,0005.5

24,0004.5

Net income attributableto owners of the parent(¥ million)(%)
14,0001.4

Net income
per share(¥)
93.99

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, 2023
AssetsCurrent assets
Cash and cash equivalents
Notes, accounts receivable and contract assets
Electronically recorded obligations
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 bonuses 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 liabilitiesLong-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 of
Sep 30, 2023

68,549123,297
1,165
3,151
12,932
11,724(85)
220,735

72,497
106,473
2,312
2,717
12,122
14,919(35)
211,008

14,343

14,039

153
3,592
3,745

119
3,267
3,386

14,172
14,100(97)
28,17546,264
267,000

14,447
12,913(107)
27,25344,679255,687

44,571
1,467
8,653
202
4,493
144
161
515
3
394
26,282
86,89034,213
981
7,628
86
3,085
52
164
324
3
72
29,36675,9783,000
28,4242,970
34,395
121,285

3,000
27,9642,850
33,815
109,793

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

13,122
16,726112,661(244)
142,265

1,382
10(284)(1,930)(822)
4,471
145,714
267,000829
45(180)(1,753)(1,059)4,687
145,894
255,687

(2) Consolidated Statements of Income and Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
1H, FY March 2023
(6 months ended Sep 2022)

1H, FY March 2024
(6 months ended Sep 2023)

Net sales

142,686

155,195

Cost of sales

116,841

126,231

Gross profit

25,84428,964

Selling, general and administrative expenses

21,201

22,739Operating income (loss)

4,643

6,224

95

Dividend income of insurance

164

102

Dividend income of insurance

－

87

Other

212

227

Total non-operating income

385

422

Interest expenses

79

189

Other

187

296

Total non-operating expenses

267

485

4,762

6,161

Expenses relating to move of the head office519－

Loss on liquidation of subsidiaries

147－

Total extraordinary losses

666－

Income (loss) before income taxes

4,095

6,161

Income taxes

1,600

2,394

Net income (loss)
Net income (loss) attributable to non-controllinginterests
Net income (loss) attributable to owners of the parent

2,494

3,767(204)

166

2,699

3,600

Non-operating income
Interest income

Non-operating expenses

Ordinary income (loss)
Extraordinary losses(Millions of yen)
1H, FY March 2023
(6 months ended Sep 2022)

1H, FY March 2024
(6 months ended Sep 2023)

2,494

3,767

663(553)－35

Foreign currency translation adjustments

347

182

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

187

176

(2)

(2)

1,195(161)Comprehensive income (loss)

3,690

3,606Comprehensive income (loss) attributable to:
Owners of the parent

3,782

3,364(91)242

Net income (loss)
Other comprehensive income
Net unrealized holding loss on other securities
Deferred gains or losses on hedges

Total other comprehensive income

Non-controlling interests

(3) Consolidated Statements of Cash Flows

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 receivablesIncrease (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 accurued warranty on products
Increase (decrease) in accurued losses on sales contracts
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
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 shareholdersDividends 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 2023
(6 months ended Sep 2022)(Millions of yen)
1H, FY March 2024
(6 months ended Sep 2023)

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

6,161
1,992
34－－
(53)
(101)
(438)

(99)
23
526
(37)
79(92)
2(209)(30)
189

21,252(3,662)(8,896)(1,109)(1,052)
13,84137(79)(3,299)10,50016,501
1,258(10,922)
991
784
16,06830(194)(4,018)
11,885(820)
0(494)(273)(6)
1(783)(2,376)(2,135)1(591)
(143)
(20)
178
(2,810)(1,334)(148)
22(3,568)(25)(106)(5,161)
195
3,157
79,732
82,889(1,635)(115)
25(3,421)(25)(89)(5,263)135
3,947
68,54972,497

(4) Segment Information
Business Segment Information
First half of fiscal March 2024 (6 months ended September 2023)(Millions of yen)
DX Solutions
Sales(1) Sales to third parties(2) Intersegment sales
Total
Operating income and loss

58,93958,939
6,511

Network
Solutions

38,627
38,627
3,369

Environmental &Social Solutions

53,67253,672
2,535

Others

3,956
3,956
57

Adjustments(6,249)Total

155,195
155,195
6,224

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

NetworkSolutions

36,28636,286
3,317

Environmental &Social Solutions

50,92050,920829

Others

3,563
3,563
83

Adjustments(4,851)

Total

142,686
142,686
4,643