Financial Results Presentationfor the Fiscal 2019

May 31, 2019
Focus Systems Corporation(Securities Code: 4662)

Table of Contents

Financial Results for the Fiscal Year Ended March
31, 2019(43rd Business Year)

P. 3

Top Message and Business Results Projections for
the Fiscal Year Ending March 31, 2020 (44th Business Year)

P. 22

Supplementary Information: Current Topics

P. 25

Supplementary Information: Company Outline

P. 33

2

Financial Results for the Fiscal Year Ended March 31. 2019
(43rd Business Year)3

Highlights

Financial Results✓ Sales and all income metrics set historic highs✓ Dividend increased from 16 yen to 20 yen per share; and payout ratio
increased from 31.2% to 34.4%
Operations✓ New businesses making advances⇒ Drones / New company establishment (VR, AI, Blockchain) / RPA /NoSQL Database / Tertiary batteries✓ Existing businesses expanding, profit margins improving
4Summary✓

Despite an operating environment affected by labor shortages, the Company achieved sales growthby taking strategic measures to secure human resources and through project acquisitions✓

Earnings growth realized through increased contracted projects and exhaustive project management(Unit: Million yen)）

FY 03/2018
Results

FY 03/2019
Plan

FY 03/2019
Results

Changes from
Previous FY
Amount(Before upwardrevision)

Ratio

Changes fromthe PlanAmountRatio

Net sales

19,32720,00021,453

2,126

11.0%

1,453

7.3%

Operatingincome

1,025

1,080

1,368

342

33.4%

288

26.7%

Ordinary
income

1,019

1,060

1,375

356

34.9%

315

29.8%

Net income

719

700

874

155

21.6%

174

24.9%
5

Changes in Net Sales(Unit: Million yen)

Projection for Fiscal Year Ending March 31, 2020
21.8 billion yen

23,00021,000Eight consecutive years of sales growth

19,00017,00015,00013,00011,000
9,000
7,000
5,000

6

Changes in Income✓✓

For the second consecutive year, efforts made to improve profit margins strongly buoyed all income metrics
Net income nearly doubled compared with five years ago in FY2014(Unit: Million yen)

1,600

Operating income(Unit: Million yen)

1,600

1,400

1,400

1,200

1,200

1,000

1,000

800

800

600

600

400

400

200

200

0

0

Ordinary income(Unit: Million yen)

Net income

1,000

900
800
700
600
500
400
300
200
100

0

7

Segment Information Summary(Unit: Thousand yen)

Reportable segments
Public sectorbusiness

Net sales

Private sectorbusiness

Securityequipment
business

Total

Adjustment
amountRecognizedon financial
statements

Note 1

Note 2

6,893,502

13,300,439

1,259,887

21,453,829―

21,453,829

Sales
composition ratio

32.1%

62.0%

5.9%

100%

―

―

Segment income

1,142,003

1,540,047

316,0872,998,138(1,629,854)

1,368,284

Note 1: The adjustment amount of negative 1,629,854 yen applied to segment income represents, for the most part,
general administrative expenses (company overheads) that are not attributable to reportable segments.
Note 2: Segment income data have been reconciled with operating income as per statement of income.

8

Overview by Segment (1)Public Sector

End users are government agencies and local governments.
Offerings range from system proposals to design, manufacturing, testing, and maintenanceand operation after system start-up.
Supporting society in various settings such as financial systems, trading systems, air traffic control systems,
welfare and nursing care systems, and social insurance systems.

(Unit: Million yen)

Net sales

8,000(Unit: Million yen)Segment income

7,000Year-onyearchange

12.1％

6,000
5,000
4,000
3,000

Year-onyearchange

13.8％

1,200
1,000
800
600
400

✓

Increase in projects with participation at the beginning with upstream processes, such as
definition of system requirements and system basic design✓

Favorable sales and earnings performance realized as a result of the following efforts:
Narrowed focus in the selection of projects, proactive acquisition of human resources, andexhaustive project management

9Overview by Segment (2)Private Sector
Net sales(Unit: Million yen)

15000

End users are mostly companies in the private sector.
In partnerships with IBM Japan, Oki Electric Industry, Softbank, ITS Intect, and others, operations span therange from system development and platform building through to the running and maintenance of systems for adiversity of private sector businesses.
Operations cover various types of systems such as business applications, communications control systems,
IoT-related systems, and AI-related systems.

Segment income

13000
Year-onyearchange

10.8％

11000
9000
7000
5000

Year-onyearchange26.4％(Unit: Million yen)

1700
1500
1300
1100
900
700
500

✓ Although the problem of labor shortages continues, we will focus on the effective use of our resources and the acquisitionof human capital in order to maintain the growth trend backed by the rising demand for IT investment.
✓ Rising sales and income from strengthened marketing efforts leading to the acquisition of new projects bothcontracted and directly commissioned.

10Overview Segment (3)Security Equipment

The segment caters to a broad customer base across the public and private sectors.
Offerings cover a broad range of diverse needs from protective arrangements for theprevention of security incidents to ex-post response measures, using technologies such as
encryption, digital watermarking, digital forensics, and cyber security technologies.
The security equipment business collaborates with numerous overseas partners, helping us
to the acquisition of new technologies and the fostering of specialists.

(Unit: Million yen)）

Net sales
Year-onyearchange6.9％

1300(Unit: Million yen)）Segment income

1100
900
700
500

Year-onyearchange

18.1％

400
300
200
100
0

✓

Digital forensics marked favorable product sales to public agencies.
Security incident-related surveys and training to support professional skills also increased.

✓

Solid sales and income growth resulting from efforts to enhance technical capabilities
and heightening added value.
11

Balance Sheets （B/S）(Unit: Million yen)Previous fiscal year

Fiscal year under review

AssetsCurrent assets

9,759

9,789

Non-current assets

7,061

6,202

3,506

3,492

151

96

3,403

2,613

16,82015,991

Current liabilities

4,459

4,434

Non-current liabilities

3,160

2,450

7,619

6,885

Capital stock

2,905

2,905

Capital surplus

2,138

2,138

Retained earnings

2,615

3,249

△359

△359

1,898

1,170

2

2

Total net assets

9,201

9,106

Total liabilities and net assets

16,82015,991

Property, plant, and equipment
Intangible assets
Investments and other assets
Total assets
Liabilities

Total liabilities
Net assets
Shareholders’ equity

Treasury stock
Valuation difference on availablefor-sale securities
Share acquisition rights* At the beginning of the period under review, the Company applied the Partially Revised Accounting Standard for Tax Effect Accounting(Business Accounting Standard No. 28 of February 16, 2018), with deferred tax liabilities classified as non-current liabilities.

Decreased 828 million yen compared with the endof the previous fiscal year
Main increases
Cash and deposits increased 109 million yen
Main decreases
Investment securities decreased 910 million yen

Decreased 734 million yen compared with the endof the previous fiscal year
Main decreases
Deferred tax liabilities decreased 333 million yen
Long-term borrowings decreased 290 million yen
Long-term debt (portion due within one year)
decreased 116 million yen

Decreased 94 million yen compared with the end of
the previous fiscal year
Main increases
Retained earnings carried forward increased 633
million yen
Main decreases
Valuation difference on available-for-sale securities
decreased 728 million yen

12Income statement (P/L)(Unit: Million yen)Previous fiscal
year

Fiscal year underreview

Net sales

19,32721,453

Cost of sales

16,836

18,455Gross margin

2,490

2,998

Selling, general, and administrative
expenses

1,465

1,630

Operating income

1,025

1,368

Non-operating income

5048

Non-operating expenses

56

40

1,019

1,375

Extraordinary income

58ーExtraordinary loss

8

73

1,070

1,301

Income taxes

350

427

Net income

719

874

Ordinary income

Income before income taxes

13

Net Income Increase / Decrease Analysis(Unit: Million yen)

Change of policy on retention of obsolete
employee dormitory facilities, with loss fromclassification as idle assets

・Increase in personnel expenses
・Expenditures for new businessdevelopment

507

Increase ingross margin(165)
Increase in
selling, general andadministrative
expenses

13
Change innon-operating
income/expenditure(124)
Change inspecial gains/losses

・Increase in income taxes
due to higher income(76)
Increase inincome taxes, etc.

155

increase

Previous
fiscal year

Fiscal year
under review
Net income

Net income

719

874

14

Cash Flows（C/F）(Unit: Million yen)

Cash flows from operating activities

Previous
fiscal year

Fiscal year
under
review641

1,322

Cash provided: 1,322 million yen
Main expenditures
406 million yen (such as corporation tax)
Main income items
1,301 million yen in income before income taxes
143 million yen in depreciation charges
132 million yen decrease in accounts receivable-trade

Cash used: 395 million yen

Cash flows from investing activities

49

(395)

Cash flows from financing activities

544

(832)

Main expenditures
138 million yen in expenditure for the acquisition of investment
securities
119 million yen in expenditure for the acquisition of property, plant, andequipment
59 million yen in expenditure for provisioning insurance reserve funds

Cash used: 832 million yen

Net increase in cash and cash equivalents

1,236

94

Cash and cash equivalents at the
beginning of the period

3,447

4,683

Cash and cash equivalents at the end of
the period

4,683

4,778

Main incomes
591 million yen increase from bond issuance
300 million yen increase from long-term loans
Main expenditure items
777 million yen for bond redemptions
706 million yen for long-term loan repayment

94 million yen higher than the end of the previous fiscal year

15

Improvement in Cash Flows: Reduction in Net Interest-bearing Debt✓

Progress made in reducing net interest-bearing debt and further improvements
continue even after achieving substantially zero debt

（Unit: 100 million yen）
70
Improved by 5.8 billion yen
60

50
Excess of 1.6 billion yen
40
Overborrowing of 4.2 billion yen
30
Turned to effectively zero debt
20

10

0

'05/3

'06/3

'07/3

'08/3

'09/3

'10/3

Interest-Bearing Debt

'11/3

'12/3

'13/3

'14/3

'15/3

'16/3

'17/3

'18/3

'19/3

Balance of Cash and Deposit16Changes in Share Price and Dividend（Unit : Yen）

1,400
October 1, 2015
Two-for-one stock split

1,200
1,000
800
600
400
200

'14/4

'15/4

'16/4

FY 03/2015 *1'17/4

FY 03/2016

FY 03/2017'18/4

FY 03/2018

FY 03/2019

Net income per share

42.81 yen

53.36 yen

39.83 yen51.21 yen

58.11 yen

Dividend per share

12.50 yen

16.00 yen

12.50 yen

16.00 yen

20.00 yen

29.2％

30.0％

31.4％

31.2％

34.4％

Dividend pay-out ratio* Values have been calculated after the two-for-one common stock split instituted on October 1, 2015.

17

Shareholder Composition and Number of Shares Owned✓

The number of shareholders as of March 31, 2019, totaled 6,867 (reduced by 218 compared with March 31, 2018)✓

Shareholding ratios increased at financial institutions, other domestic corporations, and securities firms
Two-for-one
stock split(Number of shares)

Assigned toTokyo Stock
Exchange, First
Section

16,000,000
14,000,000

Introducedashareholder
benefitprogramStockwarrant
issuance(Number ofshareholders)

8,000
7,000
6,000

12,000,000
Exchange listingchanged toTokyo Stock
Exchange, 2ndsection

10,000,000
8,000,000

5,000
4,000

6,000,000

3,000

4,000,000

2,000

2,000,000

1,000

0

'10/3

'11/3

'12/3

Individuals, Others
Foreign Corporations, Individuals
No. of Shareholders

'13/3

'14/3

'15/3

Financial Institutions
Securities Firms

'16/3

'17/3

'18/3

'19/3

0

Other Domestic Corporations
Government and Local Public Bodies
18Sales Composition Ratio by Major Customer GroupNTT Datarelated

Other

33.42%

35.26%

Total

21,453
million yen

Oki ElectricIndustry-related

3.60%

SoftBank-related

3.83%

TIS Intec-related

4.76%

✓
✓

IBM Japanrelated

Customer nameSales in
FY 03/2019(Million yen)

NTT Data-related

7,563

IBM Japan-related

4,103

TIS Intec-related

1,020

SoftBank-related

821

Oki Electric Industry-related

774

Other

7,169

Total

21,45319.13%

Orders from TIS Intec-related corporate customers in the fiscal year rose to the third-highest sales ranking among all customers.
Orders from SoftBank-related corporate customers dipped, but orders from other corporate customers related to the top four customer
groups were overall on the rise.

19

Ratios of Labor Cost and Subcontracting Expenses✓ Irrespective of business results and the economy, new project acquisitions benefitted from the Company’ssustained steady hiring, efforts to strengthen relationships with business partners, and new customer development.
(Unit: Million yen)

24,00022,00020,00018,00016,00014,00012,00010,000
8,000
6,000

4,238

4,243

4,314

4,577

5,009

5,203

5,387

5,443

5,571

6,121

4,000
2,000

5,634

5,764

7,139

6,044

8,057

6,440

8,873

6,757

10,045

7,007

0

Labor Cost

Subcontracting Expenses

Net Sales

20Changes in the Number of Employees & Turnover Rate
✓ Although the labor shortage in our industry is becoming conspicuous, hiring by the Company has been stable.
✓ The personnel turnover ratio of the Company remains below the industry average.

（％）(Number of employees)

1,200

20
18

1,100

16

1,000

14
12

900

10
800

8
6

700

4

600
500

2
2009

2010

2011

2012

2013

No. of Employees

2014

2015

2016

2017

2018

0

Employee Turnover Ratio of the Company

Industry-Wide Employee Turnover Ratio*Turnover rate of IT industry refers to the summary report on “Survey on Employment Trends” announced by the Ministry of Health,
Labor and Welfare. Turnover ratio in 2018 is not shown as it has not yet been announced.

21

Top Message and Business Results Projections for the
Fiscal Year Ending March 31, 2020 (44th Business Year)22

Top Message

Aspiring to be a company that never ceases to excite and amaze
Companies in our time are shaped by layer upon layer of
exciting and amazing narratives from their histories.
In the same fashion, at Focus Systems each of ouremployees continues to excite and amaze us in so manydifferent ways.
In nurturing existing operations and in creating new
businesses, every one of them has been and will continue to
strive with all their heart for a bright and happy future.
As a result, we have earned the trust of our customers andour business has grown and prospered.
Today, we are in the process of creating exciting new
innovative businesses.
We will continue to be a company that excites and amazes
stakeholders as new narratives keep unfolding.
Keiichi Mori, Representative Director & President

Sales andincome athistoric
highs

Developmentof newbusinesses
Business
growthin existing
operations

Business efficiency
enhancement
Human resources
development(Latest technology andconceptual capability)
Enterprise valueenhancement

Policies for FY 03/2020

23

Business Forecasts✓ Continuing on from the fiscal year ended March 2019, we aim to once again achieve record-high sales and income.
✓ We expect to maintain the dividend amount of 20 yen per share, which increased in the fiscal year ended March 31, 2019.

FY 03/2019
Results

FY 03/2020
Projection（Million yen）

Y-o-Y
Change（Million yen）（％）

Net sales

21,45321,8001.6

Operating income

1,368

1,420

3.8

Ordinary income

1,375

1,420

3.2

874

930

6.4

FY 03/2019
Results

FY 03/2020
Projection

Net income

Annual per-share dividend (yen)

20.00

20.00

Dividend payout ratio (%)

34.4

32.4

24

Supplementary Information: Current Topics

25

Topics (1)May 28,2018✓✓

Establishment of new joint venture company, VRaiB Inc., together with JPPVR
for creating new fields of application for VR and AI technologies

VRaiB will engage in advanced technology development in IT, such as VR, AI, and Blockchain.
VRaiB will provide solutions to issues in industry and society by utilizing a wide range of cutting-edge technologies.

https://www.focus-s.com/focus-s/media/20180528-E.pdf

26

Topics (2)June 27,
2018✓

Working toward deregulation with a view to promoting the industrial
application of drones

Aiming for deregulation with a view to expanding the usage of drones based on the combined knowledge,
experience, and resources of the Company and the Drone Pilot Association

http://www.focus-s.com/focus-s/media/20180627.pdf

27

Topics (3)Nov. 2,
2018✓

Concluded collaborative cooperation agreement with Kasama City,
Ibaraki Prefecture, relating to the application of unmanned
aerial vehicles

Contributing to community revitalization and improved services for citizens through the utilization of drones and other devices

Content of the collaboration
Promotion of regional industry
Studies and research on fields of application for
unmanned aerial vehicles
Diffusion, awareness, and application of unmanned
aerial vehicles
Regional safety, security, and disaster mitigation measures
Community revitalization and improvements of services for
citizens that can be promoted by the application of otheradvanced information and communication technologies（At the signing ceremony of the agreement）

http://www.focus-s.com/focus-s/media/181102.pdf

28

Topics (4)Nov. 5,2018✓✓

Cooperation in the development of FRONTEO, Inc.’s products, the"artificial intelligence-based patent search and analysis systems"

The Company plans to continue its involvement in the development of certain product groups of FRONTEO, Inc.
The Company plans to further expand AI-related operations with a view to investment in areas such as humanresources development

The Company intends to support FRONTEO, based on the Company's wealth of web application
development technology
Human resources of the Company with AI skills
Holders of Official
Qualificationsof the Japan Deep
Learning
Association

Data Analysts

Python*Experienced
Developers* Program language used in fields such as AI and data analysis

http://www.focus-s.com/focus-s/media/181105.pdf

29

Topics (6)
2019
2/18

Conclusion of a development resources partnership agreement with UiPath
Creation of human resources using RPA to resolve the ongoing labor shortage✓

A shift to high added-value operation and the streamlining and saving of labor in current
operations are becoming ever more important
Realization of efficient operation by automating routine tasks using RPA✓

RPA（Robotic Process Automation）

×

Solutions for shifting human resources to highadded-value tasks that cannot be achieved
through robot-driven efficiency gains derived
from automating routine tasks
Creation of new business opportunities forcustomers

Future provision of advanced business process improvement solutions in combination with AI technology

https://www.focus-s.com/focus-s/media/20190218-E.pdf

30

Topics (6)
2019
3/11

Initiation of provision of Enterprise NoSQL Solutions
From the effective use of big data to strategic application✓ Conclusion of a partnership agreement with NoSQL database pioneer,
MarkLogic Corporation✓ Raising the value of customers' data assets and enterprise value
Practical application of operational knowledge, know-how, and customer bases
derived from our enterprise business system consulting and system introductions
Realization

Strategic useof data

Improved
operating
speedTime and costsavings

https://www.focus-s.com/focus-s/media/20190311-E.pdf

31

Topics (7)
2019
3/26

Joint research with the University of Tsukuba for the implementation ofa tertiary battery A low-cost, safe, innovative battery with power generation function✓

Aiming at the implementation of a tertiary battery (battery equipped with a power generation function driven
by temperature differences)✓ Solution to the battery replacement and disposal issues associated with one-way batteries and rechargeable batteries

Conventional primary and secondary
batteries

Tertiary battery

Initial cost

System design in consideration of battery life
Appropriate procurement of new batteries
New batteries loaded in IoT devices
Initial installation in IoT devices

Procurement of tertiary battery
Tertiary battery loading in IoT devices
Initial installation in IoT devices

Operatingcost

Replacement schedule according to lifetime andresidual charge
Appropriate procurement of new batteries andcharging schedule
Battery replacement in IoT devices
Resetting after battery replacement
Disposal of exhausted batteries

Replacement of battery if defunctEnabling the development of low-cost IoT systems with minimal battery replacement
and eco-friendly features
https://www.focus-s.com/focus-s/media/20190326-E.pdf

32Supplementary Information: Company Outline

33

Corporate Information
Company Name

Focus Systems Corporation

Line of business

Software development and IT services
Security product development, sales, and service provision

Head office

2-7-8 Higashi Gotanda, Focus Gotanda Bldg., Shinagawa-ku, Tokyo

Business offices

Tokyo, Osaka, Nagoya

Capital2,905 million yen

Exchange listings

Tokyo Stock Exchange, First Section (Securities Code: 4662)

Employees

1,161 (as of March 31, 2019)1977

Focus Systems Corporation established for the purpose of software development

1978

Starts doing business with Oki Electric Industry Co., Ltd., and initiates software development work on electronic switchboards

1988

Starts doing business with Nippon Telegraph and Telephone Corporation (now NTT DATA Corporation) and begins providing
services for the development of systems for government and other public agencies

1996

OTC share registration with the Japan Securities Dealers Association (now Tokyo Stock Exchange JASDAQ Standard)

1997

Commences business with IBM Japan, Ltd. and begins system operation/maintenance and infrastructure technology support
business

1999

Starts information security business

2004

Starts selling products for digital forensics, a new field of information security

2015

Exchange listing changed to Tokyo Stock Exchange, Second Section

2016

Listing designation changed to Tokyo Stock Exchange, First Section

34

Business Fields

35

Operations

Triple FOCUS

1st FOCUS

2nd FOCUS

3rd FOCUS

System Integration

IT Services

The Company provides
comprehensive system integration
at information system introduction,
spanning the range frominformation system planning anddevelopment consistent withcustomers' business purposes
through to the running of systems.

Information Security

The Company provides practicalapplications of cutting-edge IT
technology, support forcustomers' business systems, IT
environment optimization andproblem solutions, andimprovement in value available
from IT application.

The Company provides
customers with information risk
control through information
security technologies such as
digital forensics, encryption, anddigital watermarks.

36

The Company’s Position in the System Integration Industry

Focus Systems is an independent system integrator (SI)

Processes range from upstream to downstream and projects from small to large(including operation and maintenance after system start-up)

Requirement definitions
Major SI firms

Upstreamprocesses

Midsized SI firms

Basic design
Detail design

Downstream
processes

Programming

Small SI firms
Testing37

Transaction Flow

Customers (government agencies, local governments, private sector companies)

New business creation

Major SI firms
See page 19

Long term
Robust cooperative frameworks

Development

Selection and mastery of
new technologies
Profit margin improvements
through direct contracting

Stable baseBusiness partners
38

Strengths by Segment

Publicinfrastructurerelated businessStable business base of the Company
Participation in diverse systems continuing over the long term
Periodic lifecycles (accommodation of legislative revisions, system renewals)
In-depth expert knowledge and ample track record grown over many years

Business development and expansions
Private sectorrelated business

Security
device-related
business

Wide-ranging business fields(smartphones, automotive, cloud, AI, RPA, business applications, and more)
Trend toward ICT-driven productivity enhancement in times of negative population growth
keeps markets expanding

High added-value technologies
Ownership of rare "digital forensics" technology
Ownership of own encryption and digital watermark technologies
Multiple introductions at the Ministry of Defense, National Police Agency, Financial Services Agency,
and central government ministries and agencies

39

Company Group Overview
Customers
Focus Systems Corporation

Inos Co. Ltd.
Head office: Kumamoto City, Kumamoto Prefecture
Business lines: Software development
1. Business applications
2. Web applications
3. Group ware
4. Industrial control
5. Software package products(Inos is in charge of C4 Backup/400 development.)

VRaiB Inc.
Head office: Tokyo, Chuo WardBusiness lines: Software development
1. VR and AI applications
2. Blockchain
3. Information security
4. Intellectual property rights

Affiliated company (March 2019)
Company nameSales （thousandyen）

Equity (%)

Ordinary income（thousand yen）

Net income（thousand yen）

Inos Co. Ltd.

20.0

1,151,825

106,789

95,508

VRaiB Inc.

20.0

84,243

3,587

3,587
40

Work Mode Reform (1)Work–Life Balance
Systems for
shortened working daysor reduced working hours･･･ Systems for helping employees reconcile work duties with child care or elder care.
Employees can choose shortened working days (3 days a week) or reduced
working hours (choice of 5 hours or 6 hours per day).
* Child care up to the 3rd elementary school year; caregiving until no longer needed.

Kurumin (child rearing support)
recognition

Usage rate of systems for
shortened working days or
reduced working hours

Reinstatement rate of employees
after child care leave

80％

94％
*As of March 31, 2019

Job return system(Re-employment system)

Workday with fixed
end-of-work time･･･ Re-employment is possible within 10 years of resignation due to a life event(marriage, child birth, or child rearing) or for career advancement (overseas study
or job-changing).

･･･ Each week on Wednesday work ends at a fixed time. Overtime is reduced

41

Work Mode Reform (2)Diversity
Job creation･･･ In 2015 the Company initiated the production of vegetables by hydroponic cultivation, aiming at creating
new fields of employment for persons with disabilities. An in-house magazine with employment
information for persons with disabilities is issued at regular intervals.
Currently, the Company is also promoting the development of clerical work areas for them.

Informationexchange forfemale employees･･･ Addressing young women, this meeting serves to communicate information on work methods andsupport for career advancement.

L-Star (Female employee career promotion)
In April 2016, the Company received the top-ranking
recognition for its efforts
at career promotion for female employees.
42Track Record in Meeting Disability Employment Ratio Regulations✓ Efforts at developing areas for employment in agriculture and clerical operations
and the creation of environments for the long-term employment of persons with disabilities✓ Company internal training to promote appreciation of working with persons having disabilities
and strengthening measures to work together(Unit: Person)(Unit: Counts)

1,300

30

Exceedingstatutorily
requiredcounts

1,200

28
26

1,100

24

1,000

22

900

20
18

800

16

700

14

600
500

12
'16/9

'17/3
Number of employees

'17/9

'18/3

Statutorily required counts

'18/9

'19/3

10

Implemented counts
43

Health management
Support for club activities ･･･ To promote the health of employees, the Company supports club activities.
Currently around 100 employees are enrolled in any of the 8 types of club activities.

Health maintenance seminars･･･ To mitigate lifestyle habits and to prevent obesity, the Company sponsors seminars dedicated to
specific topics such as dietary improvements and the prevention and improvement of sleep apnea syndrome.

"I start walking today" seminar,scheduled to be held in the fiscal
year ending March 2020

Online programs for
smoking cessation･･･ The Company introduced a quit-smoking program combining online hospital visits and smoking cessationprescriptions. Medical consultation is available via PC, smartphone or tablet. The Company supports employees
making efforts to quit smoking.

44Company Mascot

Mascot Character "Fukue-san"To promote a sense of familiarity with Focus
Systems and the world of information systems,
Fukue-san serves as the conduit for various
kinds of information dissemination, revolving
around business, company performance, andemployees.

The Company's original manga"Forensic Detective"

The content serves to help a wide range ofstakeholders gain a deeper understandingof the field of digital forensics, which
accounts for a growing share of the salesof the Company.
All episodes are available in the web magazine.

45

Changes in Non-consolidated Financial Results (Full Year)
Fiscal year, ended March 31

FY2015Net sales（1,000 yen）

15,081,738

16,482,792

17,846,896

19,327,344

21,453,829

Operating income（1,000 yen）

940,310953,356

743,538

1,025,541

1,368,284

Ordinary income (1,000 yen）

897,205

950,301

731,3311,019,522

1,375,563

Net income（1,000 yen）

592,742

738,841

551,571

719,243874,282

2,905,422

2,905,422

2,905,422

2,905,422

2,905,422

8,146

16,292

16,292

16,292

16,292

Net assets（1,000 yen）

6,769,094

7,415,953

7,258,918

9,201,228

9,106,539

Total assets（1,000 yen）

14,340,827

14,936,873

14,567,320

16,820,805

15,991,992

Net assets per share（yen）※1

488.86535.58524.24611.34605.04

Dividend per share（yen）※1

12.50

16.00

12.50

16.00

20.00

Net income per share（yen）※1

42.81

53.36

39.83

51.21

58.11

Equity ratio（％）

47.2

49.6

49.8

54.7

56.9

Return on equity（％）

10.0

10.4

7.5

8.7

9.6

Payout ratio（％）

29.2

30.0

31.4

31.2

34.4

Number of employees

962

1,024

1,073

1,116

1,161

Stock price – high ( yen）※1

1,210

888

634

1,350

1,153

Stock price - low（ yen）※1

540

340

412

503

774

Capital（1,000 yen）
Total number of shares issued andoutstanding（1,000 shares）※1

FY2016FY2017FY2018*2

FY2019*2

Note 1: Values calculated after the two-for-one common stock split instituted on October 1, 2015.
Note 2: "Total assets (in thousand yen)" and "Equity ratio (%)" have been restated to apply for the Partially Revised Tax Effect Accounting Standard(Business Accounting Standard No. 28 of February 16, 2018), etc.

46

Focus Systems sincerely requests
the continued guidance andsupport of all stakeholders.

This report is based on information available as of March 31, 2019, and premised onassumptions as of the same date concerning uncertain factors that may affect future businessresults. Actual business results may significantly differ due to various future factors. The
Company Group offers no warranty for the reliability of the information provided in this report.

47