Consolidated Financial Statements for the First Nine Months of Fiscal Year ending March 31, 2021
29/Jan/2021
These financial statements have been prepared in accordance with accounting principals generally accepted in Japan.
NEC Networks & System Integration Corporation

Stock exchange listing: Tokyo
Code number:
1973

https://www.nesic.co.jp/english/index.html
1. Consolidated Results for the First Nine Months (April 1, 2020 to December 31, 2020)of Fiscal Year ending March 31, 2021

(Rounded down to the nearest million yen.)(1) Net Sales and Income

9 months/FY Mar
2021
9 months/FY Mar2020Net sales(¥ million)

Year-on-yearchange (%)

OperatingincomeYear-on-yearchange (%)

Ordinary
incomeYear-on-yearchange (%)

233,469

9.1

13,80368.2

13,85669.0

214,032

12.1

8,208

30.6

8,196

25.7

Net income
per share(¥)

Net income
per share(diluted) (¥)

Net income
attributable toYear-on-year
owners of thechange (%)
parent(¥ million)

9 months/FY Mar
8,358
94.5
56.12
—
2021
9 months/FY Mar
4,296(0.0)
28.85
—
2020
c.f. Comprehensive income: 9 Months/FY Mar 2021: ¥8,787 million (77.8%); 9 Months/FY Mar 2020: ¥4,942 million (2.5%)* The company conducted a three-for-one stock split for its common stock on June 1, 2020. The amount of "Net income per share" is calculatedon the assumption that the stock split had been carried out at the beginning of the previous consolidated fiscal year.
(2) Financial Position

31/Dec/2020

Total assets(¥ million)

Net assets(¥ million)

235,776

117,921

Owner'sequity ratio
(%)
48.7

Net assets
per share (¥)
770.3131/Mar/2020
230,244
113,51047.9
741.12c.f. Owner's equity: 30/Dec/2020: ¥114,722 million; 31/Mar/2020: ¥110,366 million* The company conducted a three-for-one stock split for its common stock on June 1, 2020. The amount of "Net assets per share" is calculatedon the assumption that the stock split had been carried out at the beginning of the previous consolidated fiscal year.
2. Dividends

FY ending Mar.
2021
FY ended Mar. 2020

1stquarter

Dividends per share (¥)
3rd
InterimYear-endquarter

Full year

—

14.00

—

15.00 ※

29.00 ※—

13.33

—

14.00

27.33

※ Forecasts* The company conducted a three-for-one stock split for its common stock on June 1, 2020. The dividends per share in the FY ended March 2020 is
calculated on the assumption that the stock split had been carried out.
Note: Revisions to projected dividends for the quarter under review: yes
3. Financial Forecasts for Fiscal Year ending March 31, 2021 (April 1, 2020 to March 31, 2021)(¥ million)(%)(Percentages represent change compared to the previous corresponding period.)
Net income attributable toNet income
Operating income
Ordinary income
owners of the parentper share(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥)

33,3009.7

22,000Net sales

FY ending Mar. 2021

35.4

22,00038.0

13,500

43.3

90.65

Note: Revisions to projected results for the quarter under review: yes* The company conducted a three-for-one stock split for its common stock on June 1, 2020. The amount of "Net income attributable to owners of theparent" is calculated considering on this stock split.
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 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-vis systems andservices 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.

5. Consolidated Financial Statements(1) Consolidated Balance Sheets
As ofMarch 31, 2020AssetsCurrent assets
Cash and cash equivalents
Notes and accounts receivable
Electronically recorded monetary claims
Purchased goods,materials and supplies
Work in process
Exchange
Other gain
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
Accruedncome taxes
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 ofDec 31, 2020

58,321
112,358
728
4,898
8,259
7,359
(77)
191,847

67,874104,195
1,485
3,419
10,8138,295(77)
196,006

8,942

10,864

899
4,948
5,847

682
4,293
4,976

16,5207,142(56)
23,60638,397230,244

16,4877,494(52)
23,92939,770235,776

41,666
1,441
4,632
298
3,580
139
105
2,159
1,326
218
24,55880,12844,227
2,546
5,711
298
2,209
31
92
434
635
6
24,892
81,086

3,764
31,215
1,625
36,605
116,734

3,541
31,1282,098
36,768117,854

13,122
16,664
84,972(271)
114,488

13,122
16,68089,202(265)
118,738

30
25(392)(3,783)(4,121)
3,143
113,510230,24432－(563)(3,485)(4,016)
3,199
117,921235,776

(2) Consolidated Statements of Income and Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
1Q-3Q, FY March 2020

1Q-3Q, FY March 2021

(9 months ended Dec 2019)(9 months ended Dec 2020)

Net sales

214,032

233,469

Cost of sales

178,030

191,896

Gross profit

36,002

41,572

Selling, general and administrative expenses

27,793

27,769Operating income (loss)

8,208

13,803

Interest income

29

19

Dividends income of insurance

117

142

Other

244

228

Total non-operating income

391

390

Interest expenses

7976

Other323

261

Total non-operating expenses

4033388,196

13,856Compensation for damage

1,253

802

Impairment loss

1,788

－

Office transfer cost

372－

3,415

802

4,781

13,053

326

4,262

4,454

8,790

157

432

4,296

8,358

Non-operating income

Non-operating expenses

Ordinary income (loss)
Extraordinary losses

Total extraordinary losses
Income (loss) before income taxes
Income taxes
Net income (loss)
Net income (loss) attributable to noncontrolling interests
Net income (loss) attributable to owners of theparent(Millions of yen)

(Millions of yen)

1Q-3Q, FY March 2020

1Q-3Q, FY March 2021

(9 months ended Dec 2019)(9 months ended Dec 2020)

4,454

8,790

Net unrealized holding loss on other securities

212

Deferred gains or losses on hedges

20(25)

Foreign currency translation adjustments

34(279)Adjustments for retirement benefit
Share of other comprehensive income ofassociates

412

298

accounted for using equity method

00Total other comprehensive income

488

(3)

4,942

8,787

4,748

8,463

194

323

Net income (loss)
Other comprehensive income

Comprehensive income (loss)
Comprehensive income (loss) attributable to:
Owners of the parentNon-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
Impairment loss
Increase (decrease) in allowance for doubtfulreceivables
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 accurued warranty on products
Increase (decrease) in accurued losses on sales
contracts
Increase (decrease) in accurued compensation fordamage
Interest and dividend income
Interest expense(Increase) decrease in notes and accounts receivable(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
Proceeds from sale of intangibles
Purchase of investment securities
Payments for sale of shares of subsidiaries resulting
in change in scope of consolidation
Collection 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
Proceeds from long-term debt
Net (increase) decrease in treasury shares
Dividends paid to shareholders
Dividends paid to minority shareholders of subsidiaries
Proceeds from share issuance to non-controlling interest
Other, net
Net cash provided by used in financing activitiesEffect of exchange rate changes on cash and cash
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period(Decrease) in cash and cash equivalents resulting fromexclusion of a subsidiary from consolidation
Cash and cash equivalents at end of period(Millions of yen)
1Q-3Q, FY March 2020
(9 months ended Dec 2019)

1Q-3Q, FY March 2021
(9 months ended Dec 2020)

4,781
2,721
185
1,788

13,053
2,387
179
－(3)
126
401

0(57)
419

(88)
(4)

(108)
(12)

(259)

(1,724)

1,253(49)
799,434(1,843)(4,534)(300)(2,034)
11,65350(77)(4,976)
6,650

(691)
(41)
76
5,959
(1,078)
3,745
135
(119)
22,12240(72)(5,512)
16,577(2,051)9(638)
0(772)(2,272)1(375)
－
(425)

(68)
0(1,242)(4,761)－1(429)(3,499)

1,630
(190)
200
(2)
(3,960)
(23)

1,774
(223)
－
(2)
(4,154)(23)

3(382)(2,725)(21)(857)
54,354－(295)(2,924)(67)
10,08558,321－53,496(532)
67,874

(4) Segment InformationBusiness Segment Information
First nine months of fiscal March 2021 (9 months ended December 2020)(Millions of yen)Sales(1) Sales to third parties(2) Intersegment sales
Total
Operating income and loss

Digital Solutions

NetworkInfrastructures

Engineering &Support Services

80,72780,727
7,768

56,00656,006
4,045

68,60568,605
3,481

Others

8,694
8,694
405

Adjustments

Total(7,492)

214,032
214,032
8,208*Our business segments were reorganized in line with our corporate management due to the replacement of some businesses and a revision in the
distribution of management resources implemented in April 2020 to optimize business efficiency. Segment information related to the first nine months of theprevious fiscal year was reclassified for disclosure to reflect the changes in this event.

First nine months of fiscal March 2020 (9 months ended December 2021)(Millions of yen)
DigitalSolutions
Sales(1) Sales to third parties(2) Intersegment sales
Total
Operating income and loss

83,776
83,776
8,542

Network
Infrastructures

Engineering &Support Services

60,38460,384
4,659

82,02782,027
7,020

Others

7,279
7,279
598

Adjustments(7,018)

Total

233,469
233,469
13,803