Consolidated Financial Statements for the Fiscal Year ended March 31, 2021
27-Apr-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 Fiscal Year ended March 31, 2021
(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 income
attributable toNet sales
Year-on-year Operating income Year-on-year Ordinary income Year-on-year change
Year-on-yearowners of the(¥ million)change (%)(¥ million)change (%)(¥ million)(%)
change (%)
parent(¥ million)
FY ended March/21
339,10911.7
25,563
57.4
25,49360.0
15,74567.1
FY ended March/20
303,616
9.2
16,24527.2
15,93822.4
9,422
6.0（Note) Comprehensive income : FY Mar.2021 : ¥17,983 million (82.0%) ; FY Mar.2020 : ¥9,879 million (5.3%)

Net income
per share (¥)

Net incomeper share(diluted) (¥)

Return onequity (%)

Ordinary
Operatingincome/ Total income/ Net
assets (%)
sales (%)

FY ended March/21
105.73
—
13.5%
10.6%
7.5%
FY ended March/20
63.28
—
8.8%
7.1%
5.4%
（Reference) Equity in earnings (losses) of affiliates : FY Mar.2021 : ¥(49million); FY Mar.2020 : ¥(18million)* 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
Total assets(¥ million)

Net assets(¥ million)

Owner's equity
ratio (%)

Net assets pershare (¥)

31-Mar-21
250,338
127,11749.4
830.4731-Mar-20
230,244
113,51047.9
741.12c.f. Owner's equity: 31/3/2021 ¥123,682million ; 31/3/2020 ¥110,366million* 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.
(3) Cash FlowsNet cash provided by (usedin) operating activities(¥ million)

Net cash provided by (usedin) investing activities(¥ million)

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

Cash and cash equivalents
at end of year(¥ million)

FY ended March/21

17,383(4,289)(2,388)68,426

FY ended March/20

12,935(6,726)(2,300)58,321

2. Dividends

FY ended 3/2020
FY ended 3/2021
FY ending 3/2022（Forecast)

1stquarter———Dividends per share (¥)
3rdInterim
Year-endquarter
13.33—
14.00
14.00
—
21.00
19.00

—

19.00

Full year
27.33
35.00

Total dividends Payout ratio
Dividends/paid(consolidated Net assets(full year, ¥million)) (%)(consolidated
4,070
43.2
3.8
5,212
33.1
4.5

38.00

35.4

* 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.

3. Financial Forecasts for Fiscal Year ending March 31, 2022

Net sales

6 Months ending9/2021
FY ending 3/2022(Percentages represent change compared to the previous corresponding period.)
Net income
attributable
Net income attributable toOperating income
Ordinary income
to owners ofowners of the parent
the parent
per share(¥ million)(%)(¥ million)(%)(¥ million)(%)(¥)(¥ million)(%)

145,000

(4.1)

7,000

4.0

7,000

3.3

4,500

13.4

30.22

320,000(5.6)

26,0001.7

26,0002.0

16,0001.6

107.43

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 ondefinitefacts. 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-vissystems and services
provided by this Company’s group, as well as pressure to lower prices and ability to cope with the market in response tointensified competition.Factors
affecting results are not limited to the ones mentioned above.

5. Consolidated Financial Statements(1) Consolidated Balance Sheets
As ofMarch 31, 2020
AssetsCurrent assets
Cash and cash equivalents
Notes and accounts receivable
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
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)LandConstruction in progressOther
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
Advanced received
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, 2021

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

68,426
123,313
1,256
3,456
8,052
7,388
(87)
211,806

9,930(6,648)
3,281
161
(135)
26
15,400(12,016)
3,383
1,429
482
605
(266)
339
8,942

10,881(6,445)
4,435
249
(165)
83
15,900(12,295)
3,605
1,507
890
671
(349)
322
10,845

899
4,948
5,847

623
4,284
4,908

1,454
168
16,5205,519(56)
23,60638,397230,244

1,973
313
15,1985,347(54)
22,77738,531
250,338

41,666
1,441
4,632
298
3,580
2,625
6,181
139
105
2,159
1,326
218
15,75180,12844,188
2,649
6,360
3,298
5,954
3,500
7,708
159
83
512
711
6
16,341
91,474

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

466
29,233
2,046
31,745
123,220

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

13,122
16,68096,589(266)
126,12530
25(392)(3,783)(4,121)
3,143
113,510230,244

169
－
(533)
(2,080)(2,443)
3,435
127,117250,338(2) Consolidated Statements of Income and Comprehensive Income(Consolidated Statements of Income)(Millions of yen)
FY Mar/2020

FY Mar/2021

Net sales

303,616

339,109

Cost of sales

249,242

275,179

Gross profit

54,374

63,929Selling, general and administrative expenses

38,12838,366

Operating income

16,24525,563

Interest income

38

22

Dividend income of insurance

117

142

Reward income

52

67

-

97

Other261

197

Total non-operating income

469

528

Interest expenses

112

97

Loss on disposal of property and equipment

184

191

Other479

309

Total non-operating expenses

776

598

15,93825,493Gain on sale of investment in affiliates-

228

Total extraordinary inocome-

228

Compensation for damage

1,253

976

Impairment loss

1,788

－

Office transfer cost372－

Total extraordinary losses

3,415

976

Income before income taxes

12,522

24,745

Income taxes - current

5,657

7,894

Income taxes - deferred(2,894)

465

Income taxes

2,763

8,360

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

9,759
336

16,385639

9,422

15,745Non-operating income

Mid cancellation income

Non-operating expenses

Ordinary income
Extraordinary income

Extraordinary losses(Millions of yen)

(Millions of yen)

FY Mar/2020
Net income

FY Mar/2021
9,759

16,385Net unrealized holding loss on other securities

(1)

139

Deferred gains or losses on hedges

25(25)

Foreign currency translation adjustments

185(219)

Adjustments for retirement benefit

(89)

1,703

0(0)

120

1,598

9,879

17,9839,436

17,423443560

Other comprehensive income

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

(3) Consolidated Statements of Cash Flows

Cash flows from operating activities
Net income before income taxes
Depreciation and amortization
Amortization of goodwill
Impairment loss
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 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(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
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
Proceeds from long-term deptNet (increase) decrease in treasury shares
Dividends paid to shareholders
Dividends paid to minority shareholders of subsidiaries
Proceeds from share issuance to non-controlling shareholders
Other, netNet 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
Decrease in cash and cash equivalents resulting from exclusion of subsidiaries
from consolidation
Cash and cash equivalents at end of period

FY Mar/2020(Millions of yen)
FY Mar/2021

12,5223,572
247
1,788
(13)
208
450
21(8)
178
1,326(62)112(5,719)
29
2,010
407
1,093
18,16762(112)(5,182)
12,93524,7453,256
238－
10(102)454
19(21)(1,646)
(615)
(47)
97
(12,908)
1,645
3,799
899
3,173
22,99847(97)(5,565)
17,383(3,004)19(995)0(936)(3,025)11(663)0(450)(68)(2)
1(1,741)(6,726)－(17)
1(146)(4,289)

2,268
(264)
200
(4)
(3,965)(23)
3(514)(2,300)58
3,967
54,3542,477(298)－(3)(4,162)(23)－(379)(2,388)(66)
10,63858,321

58,321(532)
68,426

(4) Segment Information
BusinessInformation

Segment

Year ended March 31, 2020
(Millions of yen)
Network Infrastructures

Engineering & Support
Survices

115,179

87,727

92,03910,031---

304,978

112,758--112,758
11,653

83,109--83,109
8,129

97,434--97,434
6,715

10,314--10,314
511------(10,763)

303,616--303,616
16,245

Digital Solutions

Orders received
Sales(1) Sales to third parties(2) Intersegment sales
Total
Operating income (loss)

OthersAdjustments

Total*Our business segments were reorganized in line with our corporate management due to the replacement of some businesses and a revision in thedistribution 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.

Year ended March 31, 2021
(Millions of yen)
Digital Solutions

Orders receivedSales(1) Sales to thirdparties(2) Intersegment sales
Total
Operating income (loss)

NetworkInfrastructures

Engineering & Support
Survices

OthersAdjustments

Total128,301

95,338103,718

9,518

---

336,877

125,960

89,232

114,089

9,827

---

339,109--125,960
13,763--89,232
9,291--114,089
11,813--9,827794----(10,098)--339,109
25,563