Consolidated Financial Statements for the First Nine Months of Fiscal Year ending March 31, 2023
30/Jan/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:Tokyo1973https://www.nesic.co.jp/english/index.html
1. Consolidated Results for the First Nine Months (April 1, 2022 to December 31, 2022)

of Fiscal Year ending March 31, 2023

(Rounded down to the nearest million yen.)(1) Net Sales and Income
Net sales Year-on-year(¥ million) change (%)
9 months/FY Mar
2023
9 months/FY Mar
2022

221,881

1.4

218,824-6.3

Operating
Ordinary
Year-on-year
Year-on-year
incomeincomechange (%)
change (%)(¥ million)(¥ million)
11,174-8.2
11,206-10.5
12,168Net income
attributable
Net income
Year-on-year
to owners ofper sharechange (%)
the parent(¥)(¥ million)-11.8

12,516-9.7

Net income
per share(diluted)(¥)

9 months/FY Mar
6,111
-20.5
41.03
—
2023
9 months/FY Mar
7,685
-8.0
51.60
—
2022
c.f. Comprehensive income: 9 Months/FY Mar 2023: ¥8,026 million (-2.8%); 9 Months/FY Mar 2022: ¥8,255 million (-6.0%)(2) Financial Position

31/Dec/2022

Owner'sNet assets
Total assets Net assets
equity ratio per share(¥ million) (¥ million)(%)(¥)
246,435
139,06554.7
905.4131/Mar/2022
254,701
138,14952.9
904.66c.f. Owner's equity: 31/Dec/2022: ¥134,864 million; 31/Mar/2022 ¥134,742million
2. Dividends

FY ending Mar.
2023

—Dividends per share (¥)
3rdInterim
Year-endquarter
23.00—
23.00 ※FY ended Mar. 2022

—

19.00

1stquarter—

24.00Full year
46.00 ※ ※ Forecast
43.00

Note: Revisions to projected dividends for the quarter under review: no3. 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

FY ending Mar. 2023

Operating income

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

322,000

3.8

22,000-5.1

22,000-6.6

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

Net income
per share(¥)
87.28Note: 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 fromthose 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 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
OtherTotal 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
Deferred gains or losses on hedges
Foreign currency translation adjustments
Accumulated adjustments for retirement benefits
Total accumulated other comprehensive income
Non-controlling interestsTotal net assets
Total liabilities and net assets(Millions of yen)
As ofDec 31, 2022

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

68,132
102,767
1,714
2,932
13,713
12,452(85)
201,627

12,807

12,640

388
3,901
4,290

212
3,681
3,894

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

13,31815,005(50)
28,27344,807
246,435

40,486
1,217
9,190
264
4,019
145
114
2,107
4
－
26,087
83,63636,221
1,572
8,668
231
447
35
138
756
3
605
25,26473,946

3,202
27,714
1,998
32,914
116,551

3,028
28,563
1,831
33,423
107,369

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

13,122
16,708104,785(251)
134,364

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

1,705
(41)
(231)
(932)
499
4,201
139,065
246,435

(2) Consolidated Statements of Income and Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
1Q-3Q, FY March 2022
(9 months ended Dec 2021)

1Q-3Q, FY March 2023
(9 months ended Dec 2022)

Net sales

218,824

221,881

Cost of sales

176,827

178,341

Gross profit

41,99643,539Selling, general and administrative expenses

29,82832,365

Operating income (loss)

12,168

11,174

9

12

Dividend income of insurance

156

164

Other349

310

Total non-operating income

516

487

Interest expenses

77

139

Foreign exchange loss

2146

Other

87

168

168
12,516455
11,206

Gain on sale of investment in affiliates

141－

Total extraordinary inocome

141－

Expenses relating to move of the head office－671

Loss on liquidation of subsidiaries－

147

Loss on revision of retirement benefit plan－

99

Provision of allowance for compensation for damage

324－

Total extraordinary losses

324917

Income (loss) before income taxes

12,333

10,288

Income taxes

4,912

3,383

Net income (loss)
Net income (loss) attributable to noncontrolling interests
Net income (loss) attributable to owners of theparent

7,421

6,905

(263)

793

7,685

6,111

Non-operating income
Interest income

Non-operating expenses

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

Extraordinary losses(Millions of yen)
1Q-3Q, FY March 2022
(9 months ended Dec 2021)

1Q-3Q, FY March 2023
(9 months ended Dec 2022)

7,421

6,905

621

463－(41)

Foreign currency translation adjustments

(91)

419

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

303

281

0(2)

Total other comprehensive income

834

1,121

8,255

8,026

Owners of the parent

8,590

7,100

Non-controlling interests

(335)

926

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

Comprehensive income (loss)
Comprehensive income (loss) attributable to:(3) Consolidated Statements of Cash Flows
1Q-3Q, FY March 2022
(9 months ended Dec 2021)(Millions of yen)
1Q-3Q, FY March 2023
(9 months ended Dec 2022)

12,333
2,415
176
－－－

10,288
2,947
176
671
147
99

Increase (decrease) in allowance for doubtful receivables
Increase (decrease) in asset for retirement benefit

(4)
15(1)
(111)

Increase (decrease) in liability for retirement benefits

(134)

83

Increase (decrease) in accrued bonuses to directors andcorporate auditors
Increase (decrease) in accrued warranty on products(126)
17(110)24Increase (decrease) in accrued losses on sales contracts

1,822(1,503)

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

(707)
(47)
77

0(42)
139

23,569(930)(11,736)(1,240)(2,572)
22,92847(74)(9,778)13,122

9,855(5,875)(4,061)(1,442)(2,333)8,951
42(137)(7,339)1,517(2,440)19(602)
(683)
189
(17)
0(367)(3,902)(1,329)0(810)(754)－(7)
1(964)(3,864)

1,080
(223)
21
(5,943)(2,101)(206)
22(6,984)(29)(213)(5,307)(25)(156)(9,452)(22)
3,889
68,42672,316

199(11,599)
79,732
68,132

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
Loss (gain) on revision of retirement benefit plan

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 cashequivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

(4) Segment Information
Business Segment Information
First nine months of fiscal March 2022 (9 months ended December 2021)(Millions of yen)
DX Solutions
Sales(1) Sales to third parties(2) Intersegment sales
Total
Operating income and loss

77,72877,728
8,896

NetworkSolutions

Environmental &Social Solutions

57,34757,347
6,298

79,252
79,252
3,191

OthersAdjustments

4,496
4,496
655

(6,872)

Total

218,824
218,824
12,168First nine months of fiscal March 2023 (9 months ended December 2022)(Millions of yen)
DX Solutions
Sales(1) Sales to third parties(2) Intersegment sales
Total
Operating income and loss

80,20280,202
8,192

NetworkSolutions
55,511
55,511
5,448

Environmental &Social Solutions
80,59880,598
5,002

OthersAdjustments

5,569
5,569
157

※Segment information for FY22/3 has been reclassified numbers to reflect the segment change in April 2022.

(7,627)

Total

221,881
221,881
11,174