Consolidated Summary Report of Operating Resultsfor Fiscal 2014 (Year ended December 2014) [Japan GAAP]
February 6, 2015
Company name:

Future Architect, Inc.

Shares listed on:First Section of Tokyo Stock Exchange

Security code number:

4722

Representative:

Yasufumi Kanemaru, Chairman and CEO

Website: http://www.future.co.jp

Contact:

Yoshihiko Nakajima, Executive Officer TEL: +81-3-5740-5724

Scheduled date of annual generalshareholders’ meeting:March 25, 2015

Scheduled date for filing the securities
report:March 26, 2015

Scheduled date for distribution of dividend
payments:

March 26, 2015

Creation of supplemental material on financial results:

Yes • No

Holding of financial results briefing:Yes • No (For institutional investors and analysts)(Amount rounded off to million yen)

1.

Consolidated Results for Fiscal 2014 (January 1, 2014 to December 31, 2014)(1) Consolidated operating results (Percentages are year-on-year changes)
Net sales

Operating income

Million yen%

Million yen

Fiscal 2014
34,424
14.6
Fiscal 2013
30,04928.7(Note) Comprehensive income Fiscal 2014:
Net income per
share

Ordinary income%

Net income

Million yen

4,342
29.5
3,352
73.3
2,142 million yen (1.9%)%

Million yen

Net income per share(fully diluted)

Return on equity

Ratio of ordinary income
to total assets

Yen

%

%

Yen

%

4,325
25.2
2,220
3,454
67.9
2,027
Fiscal 2013: 2,101 million yen (82.5%)

9.5
73.7

Operatingincome ratio%

Fiscal 2014
49.75
16.3
21.1
12.6
Fiscal 2013
45.39
16.5
20.3
11.2
(Reference) Equity in (earnings) losses of affiliates Fiscal 2014:(152) million yen Fiscal 2013: (58) million yen(Note) Effective July 1, 2013, the Company conducted a 1:100 split of each share of its common stock. Net income per share wascalculated on the assumption that the stock split was conducted at the beginning of the previous consolidated fiscal year.

(2) Consolidated financial position
Total assets

Net assets

Million yen

Shareholders’ equity ratio

Million yen

Net assets per share%

Yen

Fiscal 2014
21,702
14,47565.8
319.80Fiscal 2013
19,225
13,04767.1
288.99(Reference) Shareholders’ equity Fiscal 2014: 14,270 million yen Fiscal 2013: 12,895 million yen(Note) Effective July 1, 2013, the Company conducted a 1:100 split of each share of its common stock. Net assets per share were
calculated on the assumption that the stock split was conducted at the beginning of the previous consolidated fiscal year.

(3) Consolidated cash flow position

Fiscal 2014
Fiscal 20132.

Net cash provided by(used in) operating
activities
Million yen
3,114
3,427

Net cash provided by(used in) investing
activities
Million yen
(676)
(888)

Net cash provided by(used in) financing
activities
Million yen
(749)
139

Cash and cash equivalents at theend of the period
Million yen
8,614
6,892

Dividends
Dividends per share (yen)Firstquarter
Yen

SecondquarterYen

Third
QuarterYear-end
dividend

Yen

Yen

Total
Yen

Annualdividends(Total)Million yen

Dividend
payout ratio(consolidated)

Ratio ofdividends to
net assets(consolidated)%%

Fiscal 2013
750.00
8.00
691
34.1
5.7
Fiscal 2014
8.00
11.00
19.00
847
38.2
6.2
Fiscal 2015 (Forecast)
9.50
9.00
19.00
30.6
(Note)
1. Effective July 1, 2013, the Company conducted a 1:100 split of each share of its common share. Year-end dividend for fiscal
2013 reflects the said stock split.
2. The year-end dividend of ¥11.00 for Fiscal 2014 comprises an ordinary dividend of ¥9.00 and a 25th anniversarycommemorative dividend of ¥2.00.

3.

Projected Consolidated Results for Fiscal 2015 (January 1, 2015 to December 31, 2015)
Net salesFirst six months(accumulated total)
Full year(Percentage figures reflect year-on-year change)
Net income per
Ordinary income
Net income
share

Operating income

Million yen%

Million yen%

Million yen%

Million yen%

Yen

17,20035,250

5.1
2.4

1,990
4,800

6.1
10.5

2,005
4,830

6.5
11.7

1,160
2,770

12.5
24.8

26.00
62.08

* Notes(1) Changes in significant subsidiaries during the period under review (changes in specified subsidiaries that involved
changes in the scope of consolidation): Yes • No
New: _____ companies (company names)
Exclusion: _____ companies (company names)(2) Change in accounting policies or estimates and retrospective restatementsa.
Change in accounting policies in accordance with revision of accounting standards: Nob.
Change in accounting policies other than item 1) above: No
c.
Change in accounting estimates: Nod.
Retrospective restatements: No(Note) For details, please refer to “Change in accounting policies” on page 28 of the Consolidated Summary Report ofOperating Results (Attachment).
(3) Number of outstanding shares (common stock)a.

Total outstanding shares as of the end of the period(including treasury shares)
Total treasury shares as of the end of the period

47,664,000
47,664,000
Fiscal 2012
sharessharesb.
3,040,800
3,040,800
Fiscal 2014
Fiscal 2012
sharessharesc.
Average number of outstanding stocks during the44,623,200
44,674,713
Fiscal 2014
Fiscal 2012
quarter under review
sharesshares(Note) Effective July 1, 2013, the Company conducted a 1:100 split of each share of its common stock. The above numbers relating toshares were calculated on the assumption that the said stock split was conducted at the beginning of the previous consolidated
fiscal year.
Fiscal 2014

(Reference) Overview of non-consolidated results1.

Non-consolidated Results for Fiscal 2014 (January 1, 2014 to December 31, 2014)(1) Non-consolidated operating results
Net sales
Fiscal 2014
Fiscal 2013

(Percentage figures reflect year-on-year change)
Ordinary income
Net income

Operating income

Million yen%

Million yen%

Million yen%

Million yen%

19,72718,014

9.5
28.5

4,001
3,157

26.7
57.0

4,571
3,367

35.8
58.1

2,264
1,718

31.8
65.8

Net income per share (fully
diluted)Yen
Yen
Fiscal 2014
50.75
Fiscal 2013
38.46
(Note) Effective July 1, 2013, the Company conducted a 1:100 split of each share of its common stock. Net income per share wascalculated on the assumption that the stock split was conducted at the beginning of the previous consolidated fiscal year.
Net income per share(2) Non-consolidated financial position
Total assets
Million yen

Net assets
Million yen

Shareholders’ equity ratio%

Net assets per share
Yen

Fiscal 2014
18,387
13,68274.4
306.63Fiscal 201316,107
12,18575.6
273.08(Reference) Shareholders’ equity Fiscal 2014: 13,682 million yen
Fiscal 2013: 12,185 million yen(Note) Effective July 1, 2013, the Company conducted a 1:100 split of each share of its common stock. Net assets per share were
calculated on the assumption that the stock split was conducted at the beginning of the previous consolidated fiscal year.

*Indication of audit procedure implementation status
This earnings report is exempt from audit procedures based upon the Financial Instruments and Exchange Act. At the time of thisdocument’s release, audit procedures for the financial statements under the Financial Instruments and Exchange Act had not been
completed.

*

Points to note about the proper use of projections, and other noteworthy events
The earnings forecast and statements concerning the future contained in these materials are based on information currently obtained by
the Company and on certain premises the Company judges to be rational. The Company does not intend to guarantee their realization.
Actual results may differ from forecasts due to various uncertain factors.
The division of roles between the Company and Future Inspace, Inc. concerning maintenance and operation of systems of clients of theCompany after their operations start will be reviewed and a change to the structure is planned under which Future Inspace will play theleading part in maintenance and operation of such systems after transfer of some employees of the Company to Future Inspace. However,the change is omitted in the non-consolidated earnings forecast since the scale and time of the change are not decided at this point.

 Contents
1.

2.
3.

4.

Analysis of Operating Results and Financial Condition ....................................................................................................2(1) Analysis of operating results.....................................................................................................................................2(2) Analysis of financial condition .................................................................................................................................5(3) Dividend policy and dividends for the current and next year ...................................................................................6
The Future Group...............................................................................................................................................................7
Management Policy .........................................................................................................................................................12(1) Basic corporate tenets ............................................................................................................................................. 12(2) Goals and objectives ............................................................................................................................................... 13(3) Medium to long-term management strategies .........................................................................................................13(4) Issues the Company faces ....................................................................................................................................... 15
Consolidated Financial Statements ................................................................................................................................ 166(1) Consolidated balance sheets ................................................................................................................................. 166(2) Consolidated statements of income and comprehensive income .......................................................................... 188(3) Consolidated statements of changes in net assets ................................................................................................. 200(4) Consolidated statements of cash flows ................................................................................................................. 222(5) Notes to consolidated financial statements ........................................................................................................... 244(Notes regarding the premise of surviving company) .................................................................................................... 244(Significant accounting policies regarding the preparation of consolidated financial statements) ................................. 255(Notes to consolidated balance sheets) ........................................................................................................................... 288(Notes to consolidated statements of income and comprehensive income) .................................................................... 288(Notes to consolidated statements of changes in net assets) ............................................................................................311(Segment information) ................................................................................................................................................... 333(Per share data) .............................................................................................................................................................. 366(Significant subsequent events)...................................................................................................................................... 366

5.

6.

Non-consolidated Financial Statements ....................................................................................................................... 3737
(1) Balance sheets ........................................................................................................................................................ 37(2) Non-consolidated statements of income .................................................................................................................39
Other .............................................................................................................................................................................. 411(1) Changes in Directors ............................................................................................................................................ 411(2) Other ..................................................................................................................................................................... 411

-1-

1.

Analysis of Operating Results and Financial Condition(1) Analysis of operating results(Overview of fiscal year under review)
The Group’s consolidated earnings results for fiscal 2014 are as follows:
Net sales¥34,424 million (up 14.6 % year-on-year)

Operating income¥4,342 million (up 29.5% year-on-year)

Ordinary income¥4,325 million (up 25.2 % year-on-year)

Net income¥2,220 million (up 9.5% year-on-year)

During the fiscal year ended December 2014, consolidated net sales, operating income, ordinary income
and net income posted all-time highs mainly because the scale and number of projects expanded andprofit margins of projects grew in the IT Consulting Business while eSPORTS Co., Ltd. (“eSPORTS”),
whose consolidation contributed to earnings from the beginning of the fiscal year, overcame the impact of
the increase in the consumption tax rate and performed favorably.
Earnings results of each business segment are as follows. The earnings results by business segment
represent values before adjusting for internal sales or transfers among segments.
1. IT Consulting BusinessNet sales increased from the corresponding period of the previous fiscal year thanks to an increase insales of projects, which reform and restructure existing large systems by analyzing such systems using
scientific methods, and to increases in the number of clients and in contract value, mainly attributable
to the acquisition of orders from financial institutions for cloud computing services for financial
institutions (SKYBANK). Also, we automated the monitoring of progress in projects and quality
checking of results by turning all activities and results of projects into databases. As a result ofcompany-wide development of this scientific project management method, productivity improved andcost reduction advanced.
With regard to business in Southeast Asia, both net sales and operating income of the subsidiary in
Malaysia remained robust, and total income of the three subsidiaries in Southeast Asia improved.
Consequently, net sales of this segment were ¥21,315 million for the first nine months, up 8.2% froma year earlier and operating income surged 31.2% year-on-year to ¥3,883 million.
2. Package & Service Business
Future One, Inc. (“Future One”) saw a year-on-year increase in both net sales and operating income
mainly thanks to the start of operations of principal projects using its enterprise resource planning(ERP) products and an increase in the number of replacement projects. Future Inspace, Inc. (“Future
Inspace,” former Ascendia Inc.; part of its business was spun off and assumed by Future One in
October 2014) performed favorably, primarily because orders for projects were received from local
governments and the profit margins of projects improved.
Consequently, net sales of this segment were ¥5,011 million for the first nine months, up 9.5% from ayear earlier, and operating income was ¥469 million, up 25.8%.
3. New Media & Web Service BusinesseSPORTS saw both sales and profits remain stronger than initially expected due to addition of sales offitness-related products, in addition to robust online sales of sports and outdoor gear throughout theyear, which were realized by overcoming the impact of the increase in the consumption tax rate.
Meanwhile, Tokyo Calendar Inc. (“Tokyo Calendar”) saw its deficit increase temporarily from theprevious fiscal year because of renewal of “Tokyo Calendar,” a monthly magazine, and preparations
for new online services, including a service for reserving tables at restaurants that was released in
January 2015.
As a result, net sales of this segment were ¥4,258 million, up 115.3% from a year ago, and operating
loss after reflecting the amortization of goodwill of eSPORTS was ¥13 million, against the loss of ¥51
million a year earlier.

-2-

4. Corporate Revitalization BusinessUoei Corporation (“Uoei”), which operates a grocery supermarket, saw its sales decline slightly froma year earlier mainly because it could not cover the impact of the increase in the consumption tax rate,though it renovated stores to effectively use store space and carried out sales promotion measures,
including a change in the point system. Its operating income decreased due to a rise in personnel
expenses, a hike in power rates and a temporary increase in expenses following the change in the
point system.
Consequently, net sales of this segment were ¥4,472 million, down 1.9% from a year earlier, andoperating loss was ¥35 million, against the income of ¥46 million a year ago.

-3-

(Outlook for the next fiscal year)
The Group’s earnings forecast for the fiscal year ending December 2015 is as follows:
Net sales
Operating income
Ordinary income
Net income¥35,250 million (up 2.4% year-on-year)¥4,800 million (up 10.5% year-on-year)¥4,830 million (up 11.7% year-on-year)¥2,770 million (up 24.8% year-on-year)

Noteworthy events in each business segment for the following fiscal year are as follows:
1. IT Consulting BusinessFor companies that strategically carry out corporate integration and reorganization and aim to improvetheir corporate value, promoting integration and innovation of conventional IT systems that have been
made into black boxes will not only prevent IT costs from increasing but also realize quick
decision-making through consolidation of management information within their respective groups. To
that end, the Group has innovated and reconstructed existing large-scale systems after analyzing themwith the use of a scientific method (fact-based approach) as well as provided IT platforms that processsales and profit/loss information for each product in real time based on components made in-house.
Since our track records in this area have been highly valued, the number of inquiries about new
projects is increasing.
Going forward, we will make efforts to continuously receive orders by certainly executing projects forwhich orders have been won and by continuing to contribute to management and IT of clients throughdeepening of our relations with clients even after operations of their systems start. We will also strive
to expand new client bases by making the most of technologies and know-how on promoting large
projects we have accumulated so far.
In addition, we will endeavor to improve project quality, carry out strategic research and development
activities and provide state-of-the-art technologies through the establishment of a new department thatgathers experts of respective technologies ranging from grand design to software development and IT
infrastructure.
With regard to subsidiaries in Southeast Asia, the subsidiary in Malaysia is performing favorably. We
will push forward with reviewing management strategies of each subsidiary and carrying out
operational reforms at each subsidiary in accordance with the rapidly changing economy in Southeast
Asia and circumstances of each country.
2. Package & Service Business
Future One will aim to increase sales and profits by strengthening the product capability of its
software packages and adding packages of other companies and solutions related to e-commerce to its
service menu. Future One will also enhance both the scale and number of projects by making the mostof the reinforcement of its development system and regional bases, which was realized by assuming
part of the business of Ascendia (currently Future Inspace) through a company split.
Future Inspace will proceed with a review of division of roles with the Company concerning
maintenance and operation services in 2015, and push forward with a change to a structure underwhich, after transfer of some employees of the Company to it, it will play a leading part inmaintenance and operation of systems of clients of the Company after their operations start.
3. New Media & Web Service BusinesseSPORTS will target growth as a web service company that can provide values to users with “health”
as the keyword, without merely selling goods, while expanding business by further enhancing
strategic line-ups of sports, outdoor and fitness gear and focusing on the improvement of user
services.
Tokyo Calendar released a new service in 2015 that enables users to reserve tables at restaurants using
websites or smartphone applications. It will strive to develop business fully linking online andbrick-and-mortar establishments through synergies with “Tokyo Calendar,” a magazine.
4. Corporation Revitalization BusinessUoei will endeavor to increase the number of customers by further pushing forward with effective useof store space and provision of attractive products through direct purchase of farm products fromproducing districts and development of original products. At the same time, it will strive to increase
sales and profit margin by continuously improving purchases of products and planning of sales spaces
through effective use of data on sales and gross profits for each store or each product.
-4-

(2) Analysis of financial condition
1. Assets, liabilities and net assets
The following are the status of assets, liabilities and net assets as of the end of fiscal year underreview.
Assets¥21,702 million (up 12.9% year-on-year)

Liabilities¥7,226 million (up 17.0% year-on-year)

Net assets¥14,475 million (up 10.9% year-on-year)

The following is the analysis of financial condition for the fiscal year under review.
(1) Assets
Current assets were ¥16,662 million on a consolidated basis at the end of the fiscal year underreview, up ¥2,684 million from the preceding year, and non-current assets amounted to ¥5,040
million, down ¥206 million, with total assets standing at ¥21,702 million, up ¥2,477 million. The
main underlying factors were an increase in cash and deposits (an increase of ¥1,660 million fromthe end of the previous consolidated fiscal year) and notes and accounts receivable-trade (anincrease of ¥675 million) as earnings remained robust.
For a breakdown of the increase in cash and deposits, see “2. Analysis of cash flows.”(2) Liabilities
Current liabilities were ¥5,800 million at the end of the fiscal year under review, up ¥990 million
from the preceding year, and noncurrent liabilities were ¥1,426 million, up ¥58 million, whichbrought total liabilities to ¥7,226 million, up ¥1,049 million. The main factors included a rise inaccounts payable-other (an increase of ¥275 million from the end of the previous consolidated fiscal
year) and income tax payable (an increase of ¥337 million).
(3) Net assets
Net assets were ¥14,475 million at the end of the fiscal year under review, up ¥1,428 million fromthe preceding year. The main factors included an increase of retained earnings (an increase of¥1,506 million from the end of previous consolidated fiscal year).
2. Analysis of cash flows
The following is the analysis of the Group’s consolidated cash flows for the fiscal year under review.
(1) Net cash provided by (used in) operating activities
Net cash from operating activities was an inflow of ¥3,114 million (compared to an inflow of ¥3,427
million in the previous fiscal year), mainly due to an increase in notes and accounts receivable-tradeof ¥606 million and an income taxes payment of ¥1,777 million despite the posting of income before
income taxes of ¥4,260 million.
(2) Net cash provided by (used in) investing activities
Net cash from investing activities was an outflow of ¥676 million (compared to an outflow of ¥888
million in the previous fiscal year), chiefly due to purchases of property, plant and equipment of¥165 million, a purchase of investments in subsidiaries resulting in a change in the scope of
consolidation of ¥317 million and payments for lease and guarantee deposits of ¥113 million.
(3) Net cash provided by (used in) financing activities
Net cash from financing activities was an outflow of ¥749 million (compared to an inflow of ¥139
million in the previous fiscal year), mainly reflecting payments for a cash dividend of ¥714 million.
(4) Cash and cash equivalents at end of the period
Cash and cash equivalents outstanding at the end of the fiscal year under review were ¥8,614 million,
with an increase of ¥1,721 million in cash and cash equivalents resulting from operating, investing
and financing activities.

-5-(3) Dividend policy and dividends for the current and next year
The Company seeks to maximize medium-term total returns (capital and income gains) to ourshareholders. In order to achieve this goal, we will pay a dividend of surplus, targeting a dividend payout
ratio on a non-consolidated basis of 30% or more of earnings, by comprehensively taking into
consideration a proper balance between dividend payout and the status of period profit and loss and cash
flows for the term, as well as purchases of treasury shares, after ensuring internal reserves needed forimportant investments, aimed at enhancing R&D activities to ensure medium-term technologicalsuperiority; attracting and training personnel; implementing measures for strengthening project
management; and enhancing M&A activities and alliances.
Dividends of surplus at the end of the fiscal year under review (December 31, 2014) at the record date isplanned at ¥11.00 per share, comprising a 25th anniversary commemorative dividend of ¥2.00 added to a
dividend of ¥9.00 per share. A full-year dividend will be of ¥19 per share when combined with theinterim dividend (with the record date of June 30, 2014), which was paid in September 2014. As a result,the dividend payout ratio on a consolidated basis is 38.2% and that on a non-consolidated basis is 37.4%.
The Company’s planned ordinary dividend payment for the next fiscal year is ¥19.00 per share inaccordance with the above policy.

-6-

2.

The Future GroupThe Group (the parent and related companies) consists of 18 consolidated subsidiaries and 5
equity-method affiliates, and operates four main businesses, the IT Consulting Business, the Package &Service Business, the New Media & Web Service Business, and the Corporate Revitalization Business.
Business activities, involved major companies and relationships with business segment are as follows.
The classification is the same as segmentation.
(IT Consulting Business)
In this business, the Group helps clients solve problems, by sharing management issues with them from amanagerial perspective, understanding the essence of the clients’ businesses and establishing information
systems for them using advanced IT.
Company nameBusiness activities

Future Architect, Inc. (Parent company)

Using its advanced information technology, Future Architect, Inc.
offers IT consulting, hardware and other procurement services froman objective and independent position. The Company also functions
as corporate headquarters for the Group.

North Consulting Group Pte. Ltd. (subsidiary)

Introduction of ERP and provision of consulting services inSoutheast Asia, including Singapore

Brightree Solutions Sdn Bhd. (subsidiary)

Introduction, customization, and operation and maintenance of ERP
in Malaysia

North Consulting Group (Thailand) Co. LTD.
(subsidiary)

Introduction, customization, and operation and maintenance of ERP
in Thailand

Life
Sciences(subsidiary)

Provision of “OpenDolphin Cloud” electronic medical chart, anddevelopment and sales of medical image systems

ComputingCorporation(Package & Service Business)
In this business, to help clients improve their operational efficiency, the Group introduces or provides, via
cloud and ASP, operating software packages dedicated to highly specialized fields, such as sales
management, ERP and intellectual property management, as well as other IT services, including
consigned development, maintenance and operation services and education.
Company nameBusiness activities

FutureOne, Inc. (subsidiary)

Development and sales of and support for “FUTUREONE”
mission-critical software centering on sales management, production
management and accounting, as well as consigned development andbuilding of EC sites

Future Inspace, Inc. (subsidiary)

Consigned development, maintenance and operation services and
IT-field education services

Micro CAD Co., Ltd. (subsidiary) (new)Consigned development of design management systems for
manufacturers and development, sales and maintenance of andsupport for patent-related software packages

Logizard Co., Ltd. (affiliate)

Development and sales of and support for cloud-based logistics andinventories management system (WMS)(New Media & Web Service Business)
To create original services that have not existed so far in the Media and Web service area.
Company nameBusiness activitieseSPORTS Co., Ltd. (subsidiary)

Sales of sports, outdoor and fitness gear on the Internet

Tokyo Calendar Inc. (subsidiary)

Publication of the magazine “Tokyo Calendar,” provision of
information using websites and smartphone applications, andservices including reservations for tables at restaurants(Corporate Revitalization Business)
To get deeply involved in the management team of client firms, revitalize client firms through drastic
reform focusing on IT, and establish success models for each industry.
Major affiliated company
Uoei Shoten Corporation-7-

Among affiliated companies engaged in businesses that are not included in the four businesses mentioned
above, such as investing in, as well as holding and managing securities, the main companies are as
follows:
Major affiliated company
Future Investment Corp.

-8-

<Business System Diagram>Contracting[Consolidated subsidiary (Abroad)]
North Consulting Group Pte. Ltd. (Singapore)
North consulting Group (Thailand) Co. Ltd.
(Thailand)
Brightree Solution Sdn Bhd. (Malaysia)[Consolidated subsidiary (Domestic)]
FutureOne, Inc.
Future Inspace, Inc.

[Consolidated subsidiary (Domestic)]
Micro CAD Co., Ltd.

Future Architect, Inc.

[Equity-method affiliate (Domestic)]
Logizard Co, Ltd.

[Consolidated Subsidiaries (Domestic)]
Tokyo Calendar Inc.
eSPORTS Co., Ltd.

[Consolidated Subsidiaries (Domestic)]
Uoei Shoten Corporation

Investment

Investment

Investment
targets

Sales ofproducts

Publication/
Sales ofproducts
Provision ofservices

Consumers

Corporate
Revitalization
Business

New Media & Web
Service Business

Package & Service
Business

Provision of services/
sales of products, etc.

Clients

Services

IT Consulting
Business[Consolidated subsidiary (Domestic)]
Life Sciences Computing Corporation[Consolidated Subsidiaries (Domestic)]
Future Investment Corp.

-9-Affiliated companies(1) Consolidated subsidiaries
Relationship
Location

Capital stock

Main businessactivities

Voting rightratio (%)

North Consulting
Group Pte. Ltd.

SINGAPORE,
SINGAPORE

US$ 1,250
thousandIT Consulting
Business

Brightree Solutions
Sdn Bhd.

PETALING
JAYA,
MALAYSIA

1,936 thousand
ringgitNorth Consulting
Group (Thailand)CO., LTD.

BANGKOK,THAILAND

Life Sciences
ComputingCorporation

Name

Interlocking directors
Monetary
assistanceBusiness transactions

-

None

None

-

-

None

None

99.0
(99.0)
[1.0]

-

-

None

None

IT Consulting
Business

51.9

1

3

None

None

¥ 200,000
thousandPackage &ServiceBusiness

100.0

1

1

None

Receipt of services
for development

Shinagawa-ku,
Tokyo¥ 83,700
thousandPackage &ServiceBusiness

100.0

1

2

None

Receipt of services
for development

Micro CAD Co.,Ltd.

Chuo-ku, Tokyo¥ 30,000thousandPackage &ServiceBusiness

100.0

-

3

None

None

Tokyo Calendar Inc.

Shinagawa-ku,
Tokyo¥ 50,000thousandNew Media &Web Service
Business

100.0(100.0)

1

2

Fund
lending

None

Gifu,
Gifu Prefecture¥ 100,000
thousandNew Media &Web Service
Business

100.0(100.0)

1

2

None

None

Uoei Shoten
Corporation

Minami-ku,
Niigata¥ 198,000
thousandCorporate
Revitalization
Business

100.0(100.0)

-

3

None

None

Future Investment
Corp.

Shinagawa-ku,
Tokyo¥ 10,000thousand

Other

100.0

2

2

Fund
lending

None

RI Partners Limited
Liability Association

Shinagawa-ku,
Tokyo¥ 1,398,000
thousand

Other

100.0
(100.0)

-

-

None

None

Number ofcompany
directors

Number ofcompany
employees

100.0(100.0)2

IT Consulting
Business

51.0(51.0)

10,000thousand baht

IT Consulting
Business

Toshima-ku,
Tokyo¥ 134,000

FutureOne, Inc.

Shinagawa-ku,
Tokyo

Future Inspace, Inc.

eSPORTS Co., Ltd.

thousand

Other: One domestic
company and fiveoverseas companies(Notes)1.

The name of the business segment is stated in “Main business activities.”

2.

FutureOne, Inc., Uoei Shoten Corporation and RI Partners Limited Liability Association are specified subsidiaries.

3.

The above subsidiaries file neither securities registration statements nor securities reports.

4.

Figures in square brackets in “Voting right ratio” represent the ratio of voting rights held by those who are closely related tothe company or have agreed with the company on holdings, not included in the above numbers.

5.

Figures in round brackets in “Voting right ratio” represent an indirectly owned ratio and are included in the figures above
numbers.

6.

Future Investment Corp. is a managing partner of RI Partners Limited Liability Association.

7.

Only transactions directly conducted with the Company are stated in “Monetary assistance” and “Business transactions.”- 10 -

(2) Affiliated companies to which equity method is applicable
Relationship
Name

Location

Logizard Co., Ltd.

Chuo-ku, Tokyo

Crossflo Systems,
Inc.

CALIFORNIA,

dit Co., Ltd.

Koto-ku, Tokyo

U.S.A.

Capital stock¥ 56,824
thousandUS$ 1,540
thousand¥ 428,745
thousand

Main businessactivities

Interlocking directors

Voting right
Number ofratio (%)
company
directors

Number ofcompany
employees

Monetary
assistanceBusiness transactions

Package &ServiceBusiness

34.0

-

-

None

None

Other

32.9

-

-

None

None

Other

48.6

-

2

None

Receipt of services
for security
consulting

Other: One domestic
company(Notes)1.

The name of the business segment is stated in “Main business activities.”

2.

Figures in round brackets in “Voting right ratio” represent an indirectly owned ratio and are included in the figures above
numbers.

- 11 -

3.

Management Policy(1) Basic corporate tenets
The mission of the Company is to raise future value of client companies and society by providing theproper state in which business should be and an optimal mechanism to realize it by proactively taking in
cutting-edge IT technologies, with a view to promising the greatest success to clients. We understand that
endless pursuit of optimum and taking up the challenge of achieving optimum to realize our mission is
the service we provide and the starting point of ourselves. In addition, we are striving to make all
employees share and understand the basic tenets of the Company by establishing the following corporate
philosophies.
(Corporate philosophies) We love science and technology and contribute to corporate and social changes. Also, we continue tochange ourselves.
 We will not be fearful of or daunted by “being insufficient,” and try to change impossibility topossibility using our own ingenuity and enthusiasm.
 We continue to have a desire to improve ourselves and attach importance to the enhancement of
individual capability through constant hart study as well as understand the limit of power ofindividuals and resolve even greater challenges by organically combining power of colleagues.
 We conduct warmhearted and humorous organization operation, which features courtesy and behavior
according to time, place and opportunity though it is based on merits and results.
 We will not be arrogant when we have a pleasant time, and we will never forget hope when we have a
bad time.
 We learn from history, strive to deepen mutual understanding and engage in international exchanges
and cooperation.
Basic policies of each business segment are as follows:
1) IT Consulting Business
The Company believes that business reform can be realized only when we focus on three domains ofmanagement, business, and systems and use cutting-edge IT, not merely aiming at the realization offunctions by IT. To that end, the Group has maintained a neutral position, independent of any
hardware vendors or software vendors, and has been pursuing optimization by specializing in open
systems while proceeding with the establishment of a methodology which enables it to provide
high-quality and high-speed services that draw out maximum performance, and various kinds ofstandardization, without being swayed by preconceived ideas or restrictions of products.
We are also striving to increase future value for customers by providing integrated services, which
cover the consulting phase, design of systems, development of application software, selection andprocurement of hardware and software products, introduction of systems and maintenance andoperation phases, thereby giving a concrete form to the results of consulting as systems rather thanmerely presenting such as a concept, and offering them for actual use by clients to enable them toview the results as the fruit of our business.
2) Package & Service BusinessWe fully meet the needs of small and midsize companies, which are our major clients in the Package& Service Business, by providing IT systems that support client businesses at a lower cost and with ashorter installation period according to the needs of small and midsize companies by making the mostof successful cases, know-how and IT assets the Company has accumulated through the provision ofservices to large client companies, as well as through customizing these software packages according
to the client’s business type and market. We are also offering cutting-edge functions, such as avisualization of internal control and work, as standards.
We will also provide consigned development, maintenance and operation services for systems ofclients and development, operation services and education services concerning IT for systems ofcorporations and local governments, by leveraging our possession of regional bases.
3) New Media & Web Service
In the Media and Web service area, we will aim to create original services that have yet to exist. To
this end, we will combine the know-how regarding design and operations of websites that is held by
Web service companies, including EC-related companies, and the content development capabilities
owned by publishing and media companies with the IT knowledge and know-how cultivated by theCompany. Also, we will offer values that have not existed so far by feeding back new knowledge,- 12 -

which we acquire through the provision of these original services, to client companies in the IT
Consulting Business.
4) Corporate Revitalization Business
The Group will strive to revitalize subject companies by fully using strategic and technologicalexperience in the distribution industry it has accumulated so far, with use of IT as the core, andsublimate the results obtained through operation of the business into IT systems that can be usedgenerally in the same business category, so that they can be applied to other businesses.
(2) Goals and objectives
To differentiate ourselves from our competitors and maintain growth, the Group concentrates
management resources on the fields in which it makes strategic investments, such as research anddevelopment, training, and recruiting. At the same time, however, we have set an Operating income ratioof 20% or more a year as our goal for the mainstay IT Consulting Business. We will also aim to achieve
an Operating income ratio of at least 10% for the Package & Service Business and the New Media & Web
Service Business, and 5% or more for the Corporate Revitalization Business.
(3) Medium to long-term management strategies
We will put designing management and IT in the center of our medium to long-term management
strategies, as a leading company of IT consulting.
We will develop our accumulated know-how expertise on managerial reform, IT technologicalcapabilities, etc., in the IT Consulting Business, and organically combine it with the Package & Service
Business and the Corporate Revitalization Business, aiming to provide solutions that deliver greater
customer satisfaction within the two businesses. Also, we will focus on reduction development costthrough the visualization of projects, standardizing development processes and establishment of new
design development methods and on significant improvement of system quality. The specific strategies
for this are as follows:
1) Further growth of core business (IT Consulting Business)
In a harsh management environment, it is expected that companies in Japan will further enhance theirinvestment requirements, leading to IT cost reduction, as well as IT system renovation and integration
related to work restructurings and industrial reorganization. Against this backdrop, the Group will
support operational reform of clients at higher quality and higher speed than ever before by innovating
and reconstructing large-scale systems after analyzing existing systems, which have been made into
black boxes and whose current status is difficult to grasp, with the use of a scientific method(fact-based approach) as well as providing IT platforms that make full use of real-time distributed
processing technology.
In addition, new needs of clients, such as turning IT costs into variable expenses through the use ofcloud services, have become obvious. To meet such needs, the Group will drive ahead with theprovision of services developed by extensively turning information systems for financial institutions
into those based on cloud computing (SKYBANK) and cloud services by business category, including
distribution and logistics. Furthermore, the Group will meet a wide range of customer needs by further
enhancing services to introduce ERP products of SAP AG and Oracle Corporation to major
corporations, particularly those expanding operations overseas, in addition to existing component-type
development.
2) Expansion of business for small and mid-size companies (Package & Service Business)Among small and midsize companies whose human and physical resources are limited, needs are
great for realizing improvement of business efficiency and managerial reform through the use of
package solutions and cloud computing that can be introduced at relatively low cost and in short time.
The Group integrated the development capability of Ascendia (currently Future Inspace) into Future
One through a company split as of October 1, 2014 and established a structure under which we canfurther enhance the functions of our own ERP products and push forward with customization forsatisfying the detailed needs of clients. By making the most of the effects of this integration of the twocompanies, we will aim to further increase sales and improve operating margin, taking into
consideration the introduction of ERP products of other companies to our clients. Future Inspace will
support the growth of clients by not only reinforcing system development and maintenance andoperation services through the strengthening of its cooperation with the Company but also operating
corporate IT systems, which are becoming more and more advanced and complicated, in strong
cooperation with the information system divisions of clients.

- 13 -

3) Acceleration of global development (IT Consulting Business)
The Group considers the Asian region, where the information infrastructure is immature while
economy has been growing significantly in recent years, to be a large latent market for the Group. To
proactively push forward with global development, including in Asia, the Group will promote theestablishment of a structure that can cover the development of the IT Consulting Business in theSoutheast Asian region and mainland China, including Hong Kong, by enhancing cooperation among
companies in these regions. The Group will further enhance not only IT consulting for local
companies, but also IT support for Japanese companies expanding operations in Asia.
4) Provision of original services in the Media & Web Service area (New Media & Web Service Business)
With the popularization of smartphones and tablet terminals, new Web services have been initiatedone after another, in addition to the acquisition of information and shopping via the Internet. In theMedia and Web service area, the Group will push forward with the provision of original services bycombining companies engaged in Media and Web services that were acquired by the Company
through M&As or were newly established, with knowledge and technologies regarding IT that theCompany has cultivated in the IT Consulting Business.

- 14 -

(4) Issues the Company faces
1) Stepping up our large scale project management capabilities and establishing a support infrastructure[IT Consulting Business]
The Group is strengthening its project management capabilities, which it positions as an importantmanagement issue. During the fiscal year under review, we proceeded with the improvement of the
support system for scientific project management by enhancing our proprietary tools equipped withfunctions to automatically create and check source codes and documents. Going forward, we will
enhance our preventive support infrastructure more than ever to respond to any issue that arises inprojects by expanding the design and development techniques common to projects to all projects andby promoting more efficient and scientific project management.
2) Improving project quality [IT Consulting Business]
The Company has striven to enhance project quality by visualizing the status of projects in real timeusing a project information-sharing system and a project monitoring system and implementing projectreview at each phase by engineers experienced in quality control. From now on, we will endeavor tofurther improve project quality by not only improving the proprietary project information-sharing
system and monitoring system mentioned above but also reinforcing the project review structure.
3) Recruitment and training of professionals [IT Consulting Business, Package & Service Business]
The Group understands that what is most important for raising corporate value of the Group is
personnel and that it is necessary to ensure and train highly qualified personnel. We continue to create
an environment conducive to proactively attracting talented people by challenging the frontiers of
information technology and training consultants who can grasp the essence of matters and find adirection for solutions in the training and project fields as well as through research and development
activities. In addition, we will train personnel through experience in corporate management andmutual exchanges by providing new opportunities for active roles in the creation of new original
services in the New Media & Web Service Business.
4) Enhancement of outside alliances [IT Consulting Business]
To consistently provide optimal solutions to clients, the Company will maintain good relations withcorporations that have outstanding technologies and strive to enhance alliances, including M&As,
with them, while grasping the technological trends in the global IT industry.
5) Overseas development [IT Consulting Business and Package & Service Business]

The Group has already started to expand operations overseas, while fortifying bases inSoutheast Asian countries. In particular, the subsidiary in Malaysia is poised to get on a
growth track, with both its sales and profits increasing. Going forward, in order to cope withthe rapidly changing Asian markets, the Group will endeavor to expand business withremarkably growing Asian clients through review of management strategies for each country
and constant promotion of business reform as well as to expand its local IT support businessfor Japanese companies in the distribution and logistics fields which are operating inSoutheast Asia and China.
On the other hand, we are enhancing our cooperation, as a development partner, with offshore
companies that have excellent technologies in mainland China and other regions.
6) Improving profit margin and expanding market share [Package & Service Business]
As for the Package & Service Business, the profit margin improved significantly due to management
reforms and the strengthening of service quality. From now on, to further raise profit margins andincrease market shares, the Group will not only improve the detailed functions of its proprietary
packages for small and midsize companies but also expand solution partners, with a view toeffectively using the products and solutions of other companies. We will also promote theestablishment of a structure that can support small and midsize companies not only in the Tokyo
Metropolitan and Kansai areas, but also in other major cities nationwide.
7) Sales, purchase, and inventory information management by using IT [Corporate Revitalization
Business]
The Group will continue to carry out reforms using IT, covering all stages from client marketing topurchase and sales of products and management of inventories, aimed at minimizing costs for disposal
and retained inventories as well as improving the satisfaction and convenience of customers byboosting product lineups that meet customer’s needs.

- 15 -

4.

Consolidated Financial Statements(1) Consolidated balance sheets(in thousands of yen)Previous consolidated
fiscal year
(December 31, 2013)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Securities
Merchandise and finished goods
Work in process
Deferred tax assets
Accounts receivable - other
Other
Allowance for doubtful accounts*3

Total current assets

6,892,910
4,330,728
1,865
462,055
107,765
217,576
1,541,943
434,919(11,388)

Consolidated fiscal year
under review(December 31, 2014)*3

13,978,375

Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation

2*

Buildings and structures, net
Land
Other
Accumulated depreciation*2

Other, net
Total property, plant and equipment
Intangible assets
Software
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Lease and guarantee deposits
Deferred tax assets
Other
Allowance for doubtful accounts*1

Total investments and other assets
Total non-current assets
Total assets- 16 -

3,228,480(2,782,062)

8,552,995
5,006,460
103,746589,260
208,181272,660
1,394,410
539,911(4,990)16,662,635*

2

3,317,003(2,837,256)

446,418

479,747

109,474
1,956,834(1,555,282)

109,474
2,063,596(1,702,187)*2

401,551

361,408

957,444

950,630

703,544823,705
21,480538,416
897,211
20,687

1,548,729

1,456,315

1,757,591
951,363
25,51855,626(49,582)*1

1,494,041
1,022,797
106,489
59,021(49,286)

2,740,517

2,633,063

5,246,691

5,040,009

19,225,067

21,702,644(in thousands of yen)Previous consolidated
fiscal year
(December 31, 2013)
Liabilities
Current liabilities
Accounts payable - trade
Short-term loans payable
Accounts payable - other
Income taxes payable
Provision for bonuses
Provision for quality assurance
Provision for loss on projects
Provision for point card certificates
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total accumulated other comprehensive income
Minority interests
Total net assets
Total liabilities and net assets- 17 -

Consolidated fiscal year
under review(December 31, 2014)

1,660,351
35,000774,748
1,024,280
167,483
12,109173,600
2,439
959,6224,809,634

1,404,017
1,049,765
1,361,648
214,506
195,452
78,50013,474
1,483,164
5,800,529

1,000,000
357,691
10,2391,367,931
6,177,566

1,000,000
405,181
21,192
1,426,373
7,226,902

1,421,815
2,495,772
10,506,520(1,540,983)
12,883,124

1,421,815
2,495,772
12,012,633(1,540,983)
14,389,237

87,158(74,683)
12,475
151,900
13,047,500
19,225,067

34,168(153,008)(118,839)
205,344
14,475,742
21,702,644

(2) Consolidated statements of income and comprehensive income(in thousands of yen)Previous consolidated
fiscal year
(from January 1, 2013
to December 31, 2013)
Net sales
Cost of sales

1,

* *

2

30,049,790
19,544,921

Consolidated fiscal year
under review(from January 1, 2014
to December 31, 2014)
1,

* *

2

34,424,465
22,257,267

Gross profit

10,504,868

12,167,197

Selling, general and administrative expenses
Directors’ compensations
Salaries and bonuses
Other salaries
Training expenses
Research and development expenses
Depreciation
Recruiting expenses
Amortization of goodwill
Other306,892
3,125,530
127,352
148,973
119,811
113,938
273,545
186,655
2,749,275

315,534
3,290,993
209,331
141,398
133,774
104,284
295,999
247,4023,085,834*3

Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodCommission for purchase of treasury shares
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Gain on sales of shares of subsidiaries and associates
Gain on change in equity
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Loss on sales of investment securities
Loss on sales of share of subsidiaries and associates
Impairment loss
Amortization of goodwill*4*5

Total extraordinary losses
Income before income taxes and minority interests- 18 -*3

7,151,975

7,824,554

3,352,893

4,342,643

1,704
27,485
110,730
27,023

3,175
28,961
98,28916,654

166,944

147,081

4,518

9,135

58,197

152,373

1,005
1,950

2,325

65,672

163,833

3,454,166

4,325,891

213,773
5,822

2,138
-

219,595

2,138

107,154
41,138
5,670

*3

*5

34,931
9,396
13,037
9,810

153,963

67,176

3,519,798

4,260,853

(in thousands of yen)Previous consolidated
fiscal year
(from January 1, 2013 to
December 31, 2013)

Consolidated fiscal year
under review(from January 1, 2014 toDecember 31, 2014)

Income taxes - current
Income taxes - deferred

1,421,587
46,0042,086,899(98,340)

Total income taxes

1,467,591

1,988,559

Income before minority interests

2,052,206

2,272,294

24,35952,2092,027,847

2,220,084

24,35952,2092,052,206

2,272,294

86,260(46,440)(53,245)(71,733)

Minority interests in income
Net income
Minority interests in income
Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method

9,226
6

Total other comprehensive income*

Comprehensive income(Comprehensive income attributable to)Comprehensive income attributable to owners of parent
Comprehensive income attributable to minority
interests- 19 -

49,046(5,101)*

6(130,080)

2,101,253

2,142,213

2,070,243

2,088,769

31,01053,443

(3) Consolidated statements of changes in net assets
Previous consolidated fiscal year (from January 1, 2013 to December 31, 2013)(in thousands of yen)
Shareholders’ equity

Balance at the beginning of the period

Capital stock

Capital surplus

1,421,815

2,495,772

Retainedearnings

Treasury shares

Total shareholders’equity(1,393,328)

11,675,279

9,151,020

Changes of items during the period
Dividends from surplus(672,347)

Purchase of treasury shares(672,347)(147,654)

Net income

2,027,847(147,654)
2,027,847

Net changes of items other thanshareholders' equity-

Total changes of items during theperiod

--1,355,500(147,654)

1,207,845

Balance at the end of the period

1,421,815

2,495,772

10,506,520(1,540,983)

12,883,124

Valuation and translation adjustments

Balance at the beginning of the period

Valuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

Total valuationand translation
adjustments

612(30,532)(29,920)

Minority
interests

120,890

Total net assets

11,766,249

Changes of items during the period
Dividends from surplus(672,347)

Purchase of treasury shares(147,654)

Net income

2,027,847

Net changes of items other thanshareholders' equity

86,546(44,151)

42,39531,01073,405

Total changes of items during theperiod86,546(44,151)

42,39531,0101,281,251

Balance at the end of the period

87,158(74,683)

12,475

151,900

13,047,500- 20 -

Consolidated fiscal year under review (from January 1, 2014 to December 31, 2014)(in thousands of yen)
Shareholders’ equity

Balance at the beginning of the period

Capital stock

Capital surplus

1,421,815

2,495,772

Retainedearnings

TreasurysharesTotal shareholders’equity10,506,520(1,540,983)

12,883,124

Changes of items during the period
Dividends from surplus(713,971)(713,971)

2,220,084

2,220,084

Purchase of treasury shares-

Net income
Net changes of items other thanshareholders' equity-

Total changes of items during theperiod

--1,506,113

Balance at the end of the period

1,421,815

2,495,772

12,012,633

1,506,113(1,540,983)

14,389,237

Valuation and translation adjustments
Valuationdifference on
available-forsale securities
Balance at the beginning of the period

87,158Foreign currencytranslation
adjustment

Total valuationand translation
adjustments(74,683)

12,475

Minority
interests

151,900

Total net assets

13,047,500

Changes of items during the period
Dividends from surplus(713,971)

Purchase of treasury shares-

Net income
Net changes of items other thanshareholders' equity

2,220,084
52,990(78,324)(131,314)

53,443(77,871)

Total changes of items during theperiod52,990(78,324)(131,314)

53,443

1,428,241

Balance at the end of the period

34,168(153,008)(118,839)

205,344

14,475,742- 21 -

(4) Consolidated statements of cash flows(in thousands of yen)Previous consolidated
fiscal year
(from January 1, 2013 to
December 31, 2013)
Net cash provided by (used in) operating activities
Income before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for quality assurance
Increase (decrease) in provision for loss on projects
Increase (decrease) in provision for office transfer
expenses
Interest and dividend income
Interest expenses
Commission for purchase of treasury shares
Foreign exchange losses (gains)Share of (profit) loss of entities accounted for using
equity method
Loss (gain) on change in equity
Loss on retirement of non-current assets
Loss (gain) on sales of investment securities
Loss (gain) on sales of shares of subsidiaries andassociates
Impairment loss
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable trade
Decrease (increase) in other assets
Increase (decrease) in other liabilities

Consolidated fiscal year
under review(from January 1, 2014 toDecember 31, 2014)

3,519,798
407,518
192,325(2,115)38,886834
160,100

4,260,853
413,991
257,213(26,512)41,733
183,343(95,100)(35,342)-(29,190)
4,518
1,005
(112,557)(32,137)
9,135(99,183)

58,197

152,373(5,822)
107,154(213,773)

34,931-

7,257

41,13813,037(534,966)(606,944)(161,666)(214,088)

707,148(265,575)(202,981)
399,042

140,346694,362

Subtotal

4,339,252

4,869,039

Interest and dividend income received
Interest expenses paid
Income taxes paid

29,590(4,255)(937,228)

32,028(9,155)(1,777,077)

Net cash provided by (used in) operating activities

3,427,358

3,114,834- 22 -

(in thousands of yen)Previous consolidated
fiscal year
(from January 1, 2013 to
December 31, 2013)
Net cash provided by (used in) investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Payments for asset retirement obligations
Purchase of shares of subsidiaries resulting in change
in scope of consolidation
Proceeds from sales of shares of subsidiaries andassociates
Purchase of investment securities
Proceeds from sales of investment securities
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee
deposits
Other

Consolidated fiscal year
under review(from January 1, 2014 toDecember 31, 2014)(285,929)(152,097)(12,500)(165,025)(40,930)-(999,367)(317,512)-

25,000451,773(57,662)(109,939)
63,600(113,617)

161,420

6,290

5,642

(24,859)

Net cash provided by (used in) investing activities(888,721)(676,994)

Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Proceeds from long-term loans payable
Purchase of treasury shares
Cash dividends paid

(38,700)
1,000,000(148,660)(673,274)(35,000)(714,385)

Net cash provided by (used in) financing activities

139,364(749,385)

30,30133,1902,708,303

1,721,645

Cash and cash equivalents at beginning of the period

4,184,672

6,892,975

Cash and cash equivalents at end of the period

6,892,975

8,614,620

Effect of exchange rate change on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents- 23 -

(5) Notes to consolidated financial statements(Notes regarding the premise of surviving company)
None- 24 -

(Significant accounting policies regarding the preparation of consolidated financial statements)
1. Scope of consolidation
Number of consolidated subsidiaries: 18
Names of consolidated subsidiaries are omitted because they are included in “2. The Future Group.”
Micro CAD, Co., Ltd. and one other company were included in the scope of consolidation in thecurrent fiscal year under review because the Company acquired their shares.
There are no non-consolidated subsidiaries.
2. Application of equity method
Number of affiliated companies to which equity-method is applicable: 4Names of affiliated companies to which the equity method is applicable are omitted because they areincluded in “2. The Future Group.”
Beijing ZhongNouBoEr Information Technology Co., Ltd. and two other companies are excluded
from the scope of application of the equity method in the fiscal year under review because theCompany sold their shares.
There are no non-consolidated subsidiaries and associates to which the equity method is notapplicable.
3. Accounting period of consolidated subsidiaries
Uoei Shoten Corporation’s account settlement date is November 30. In preparing consolidated
financial statements, the Group normally presents the balance sheet position of consolidated
subsidiaries using figures as of the fiscal year-end date of each subsidiary. However, if there are any
major transactions or events affecting the financial condition of the subsidiaries between the date of
their book closing and the parent company’s fiscal year-end, the Group makes necessary adjustments
to its financial statements to reflect these transactions.
4. Accounting policies(1) Valuation standards/methods for principal assets(a)Securities
Held-to-maturity bonds
Amortized cost method (straight-line method)
Other securities:
Marketable securities:
Stated at fair value based on the market price as of the end of the financial period(Unrealized holding gains/losses are reported as a net amount in a component ofshareholders’ equity. Cost of sale is calculated based on moving average method).
Non-marketable securities
Stated at cost based on moving average method.

(b) Inventories
Merchandise and finished goods
Stated at of cost using the gross average method (amounts in the balance sheets are calculatedusing the method to devaluate the book value according to the decrease in profitability)
Uoei Shoten Corporation adopts the cost method based on the retail method (amounts in thebalance sheets are calculated using the method to devaluate the book value according to thedecrease in profitability).
Work in process
Stated at cost based on the specific cost method (amounts in the balance sheets are calculatedusing the method to devaluate the book value according to the decrease in profitability).
(2) Depreciation/ amortization of major depreciable/ amortizable assets(a)Property, plant and equipment (Excluding lease assets)
The Group mainly applies the declining-balance method to depreciate assets, but cloudservice-related assets and some assets of consolidated subsidiaries are depreciated through theapplication of the straight-line method. If the acquisition price of the asset to be depreciated isover ¥100,000 and less than ¥200,000, it is depreciated evenly over three (3) years. Useful life
- 25 -

is as follows:
Buildings

3-34 years

Other

3-20 years(b) Intangible assets (Excluding lease assets)
Software for in-house use
Software for in-house use is depreciated using the straight-line method over its useful life
(five years). However, software for proving services is depreciated using the straight-line
method over the period for which they are expected to make profits, which does not exceed
five years.
Software for sale
Software for sale is depreciated by the larger of either of the amount calculated based on
projected sales volume or the amount from the straight-line method over the period forwhich they are expected to remain salable (3 years).
Other
Straight-line method(c)Lease assets
Lease assets concerning finance lease transactions not accompanying the transfer of property
rightsOf lease transactions other than those deemed to accompany the transfer of property rights
to lessees, lease transactions that commenced before the start of the initial year of theapplication of the “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13)
are accounted for in a manner similar to the accounting treatment for regular leasetransactions.

(3) Accounting standards for allowances/provisions(a)Allowance for doubtful accounts
To prepare for losses incurred through bad debts, the amount of potential loss is calculated byusing the historical loss ratio in case of non-classified loans/receivables. Potential losses forclassified loans/receivables are individually assessed.

(b) Provision for quality assurance
In projects related to open system consultation and system development (IT consulting services
and Package & Service), where technological changes are taking place rapidly, there areoccasions where we are obliged to provide services to our clients after sales are stated in orderto resolve problems that were unforeseeable at the time of the signing of the contract or as of
the close of accounting period. There are instances where the Company and its consolidated
subsidiaries provide such services without compensation in order to guarantee quality
standards that will fully satisfy its customers in IT consulting services and Package & Service.
To prepare for additional cost of sales in IT consulting services and Package & Service that
may arise after sales are stated, estimated amount of such additional cost, calculated based on
past experience, is stated in the provision for quality assurance.
(c)

Provision for loss on projects
In projects related to open system consultation and system development (IT consulting services
and Package & Service), where technological changes are taking place rapidly, there areoccasions where we are obliged to provide services to our clients in order to resolve problems
that were unforeseeable at the time of the signing of the contract.
To prepare for future loss in IT consulting services and Package & Service, estimated amountof such loss in and after the following fiscal year is stated in the provision for loss on projects,
concerning ongoing projects for which loss is projected to be incurred as of the end of the
fiscal year under review and for which it is possible to rationally estimate the amount of loss.

- 26 -

(d) Provision for bonuses
In order to set aside funds for the payment of bonuses to employees at consolidated
subsidiaries, the estimated amount of expenses for bonus payments in the fiscal year underreview is set aside in the reserve for bonuses account.
(e)Provision for office transfer expenses
To prepare for the payment of office transfer expenses, the amount estimated to be incurred isstated.

(f)

Provision for point card certificates
To prepare for the use of point card certificates granted under a point card certificate systemthat is designed for sales promotion at consolidated subsidiaries, the estimated amount to be
used in the future, calculated based on the past use ratio, is stated in the provision for point
card certificates.

(4) Standard for translating important foreign currency-denominated assets or liabilities into Japanesecurrency
Monetary claims or liabilities in foreign currencies are translated into yen at spot foreign exchange
rates on the consolidated settlement date, with translation differences recognized as gains or losses.
Assets and liabilities of overseas subsidiaries, etc., are translated into yen at spot exchange rates on
the consolidated settlement date. Revenues and expenses of overseas subsidiaries, etc., are translated
into yen at the average exchange rate for the fiscal year. The resultant translation differences areincluded in Foreign currency translation adjustment and Minority interests under Net assets.
(5) Standards for recognizing important income and expenses(a)

The extent to which a project has advanced by the end of the fiscal year under review iscalculated according to the percentage of completion method (Progress rate is estimated inproportion to cost.)(b) Other projects
Completed contract method(6) Amortization of goodwill
Goodwill is amortized evenly over its useful life.
If the monetary value of goodwill is not material, it is treated as a loss in the fiscal year in which it
occurs.
(7) Cash and cash equivalents“Cash (cash and cash equivalents)” included in the consolidated statements of cash flow include
cash in hand, demand deposits, and short-term investments readily convertible to cash withminimum price risk.
(8) Other material information concerning the compiling of financial statements
Accounting treatment of consumption taxes, etc.
Transactions subject to consumption taxes are recorded at amounts exclusive of consumption taxes.

- 27 -

(Notes to consolidated balance sheets)*1. Investments in affiliates(in thousands of yen)
Fiscal 2013
(December 31, 2013)
Investment securities (stocks)

Fiscal 2014
(December 31, 2014)¥511,521¥321,434*2. Total asset impairment losses are included in accumulated depreciation.
*3. Lawsuit
Fiscal 2013 (December 31, 2013)
The Company initiated legal action in the Tokyo District Court relating to payment of contract fees,
etc. (¥1,462 million) against NITTO DENKO CORPORATION as of November 30, 2009.
The Company delivered the deliverables on September 4, 2009 in accordance with an agreement withNITTO DENKO. However, NITTO DENKO did not recognize the action by the Company as delivery
and refused to pay the contract fees etc. Against this backdrop, the Company initiated legal action.
Fiscal 2014 (December 31, 2014)
The Company initiated legal action in the Tokyo District Court relating to payment of contract fees,
etc. (¥1,462 million) against NITTO DENKO CORPORATION as of November 30, 2009.
The Company delivered the deliverables on September 4, 2009 in accordance with an agreement withNITTO DENKO. However, NITTO DENKO did not recognize the action by the Company as delivery
and refused to pay the contract fees etc. Against this backdrop, the Company initiated legal action.
(Notes to consolidated statements of income and comprehensive income)*1. Amount of provision of allowance for loss on projects included in cost of sales(in thousands of yen)
Fiscal 2014
(from January 1, 2014 toDecember 31, 2014)

Fiscal 2013
(from January 1, 2013 to
December 31, 2013)¥ 160,100(¥ 95,100)*2. Amount of provision of allowance for quality assurance included in cost of sales(in thousands of yen)
Fiscal 2014
(from January 1, 2014 toDecember 31, 2014)

Fiscal 2013
(from January 1, 2013 to
December 31, 2013)¥ 834¥ 183,343*3. Total research and development expenses included in selling, general and administrative expenses(in thousands of yen)
Fiscal 2013
(from January 1, 2013 to
December 31, 2013)

Fiscal 2014
(from January 1, 2014 toDecember 31, 2014)¥ 119,811¥ 133,774*4. Breakdown of loss on retirement of non-current assets(in thousands of yen)
Fiscal 2013
(from January 1, 2013 to
December 31, 2013)

Fiscal 2014
(from January 1, 2014 toDecember 31, 2014)

SoftwareOther¥105,190¥1,963

Software
Other

-

Total

¥107,154

Total-- 28 -

*5. Impairment loss
The Group reported impairment losses of the following asset groups.
Fiscal 2013 (from January 1, 2013 to December 31, 2013)(1) Main assets on which impairment losses were recognized
Use

Type

Location

Idle asset

Land

Daisencho, Tottori Prefecture

Web business

Software

Shinagawa-ku, Tokyo(2) Background of the recognition of impairment losses
(i)

Land
The Group wrote down the book value of idle land in Daisencho, Tottori Prefecture, forwhich it has no specific plan for future use, to the recoverable amount, and recognized thedifference between the book value and the recoverable value as an impairment loss.

(ii) Software
The Group reviewed business plans at subsidiaries. As a result, the Group wrote down thebook values of asset groups in the Web business to their recoverable values.
(3) Amounts of impairment losses(in thousands of yen)
¥13,394¥27,743

Land
SoftwareTotal¥41,138(4) Asset grouping method
The Company groups assets by businesses for management accounting, which it regards as thesmallest units that generate almost independent cash flows. However, with regard to idle assetsthat are not used directly for business, each idle asset is considered to constitute a group.
(5) Calculation method of recoverable amounts
(i)

Land
The recoverable value is calculated from the net selling price. The net selling price iscalculated by rationally adjusting the assessed value against those of fixed assets andmarket prices in the neighborhood.

(ii) Software
The Company measures recoverable amounts based on use value, and calculates the use
value of such assets as an estimate of future cash flows after estimating the use value basedon future cash flows.
Fiscal 2014 (from January 1, 2014 to December 31, 2014)(1) Main assets on which impairment losses were recognized
Use
Business assets

Type

Location

Software-(2) Background of the recognition of impairment losses
Software
The Group reviewed business plans at subsidiaries. As a result, the Group recorded thebook values of asset groups held by the subsidiaries to their recoverable values because it
could not expect the initially assumed income.
(3) Amounts of impairment losses(in thousands of yen)
¥ 13,037

SoftwareTotal¥ 13,037- 29 -

(4) Asset grouping method
The Company groups assets by businesses for management accounting, which it regards as thesmallest units that generate almost independent cash flows. However, with regard to idle assetsthat are not used directly for business, each idle asset is considered to constitute a group.
(5) Calculation method of recoverable amounts
The Company measures recoverable amounts based on use value, and calculates the use value ofsuch assets as an estimate of future cash flows after estimating the use value based on future cash
flows.
*6. Reclassification adjustment and tax effects relating to other comprehensive income
Fiscal 2013
(from January 1, 2013 to
December 31, 2013)
Valuation difference on available-for-sale securities:
Amount accrued
Reclassification adjustment
Before tax
Tax effects
Valuation difference on available-for-sale securities
Foreign currency translation adjustment:
Amount accrued
Share of other comprehensive income of associates
accounted for using equity method
Amount accrued
Total other comprehensive income- 30 -(in thousands of yen)
Fiscal 2014
(from January 1, 2014 toDecember 31, 2014)¥ 330,331(¥196,302)¥134,028(¥47,767)¥86,260(¥82,731)(¥82,731)¥29,485¥53,245(¥46,440)(¥71,733)¥9,226¥49,046(¥5,101)(¥130,080)

(Notes to consolidated statements of changes in net assets)
Fiscal 2013 (from January 1, 2013 to December 31, 2013)
1.

Matters related to the types and numbers of outstanding stocks and treasury shares
Number of stocks
at the beginning of
this fiscal year

Number of stocks
increased during
this fiscal year

476,640
476,640

47,187,360
47,187,360-

47,664,000
47,664,000

26,40826,4083,014,392
3,014,392-

3,040,800
3,040,800

Outstanding stocks
Common stock
Total
Treasury shares
Common stock
Total

Number of stocks
decreased during
this fiscal year

(Overview of reasons for change)
Increase in the number of outstanding stocks due to the stock split conductedon July 1, 2013:
Purchase of treasury shares approved by the resolution of the Board of
Directors meeting held on February 7, 2013:

47,187,360 shares
4,000 shares

Increase in the number of treasury shares due to the stock split conducted on
July 1, 2013:
2.

Number of stocks
at the end of thisfiscal year

3,010,392 shares

Matters related to dividends(1) Dividends paid
Resolution

Stock type

Total dividend amount(in thousands of yen)

Dividends per
share (yen)Record date

Effective dateOrdinary general meeting ofshareholders held on March
26, 2013

Commonstock

337,674

750

December 31,
2012

March 27,2013

Meeting of Board of Directors
held on July 25, 2013

Commonstock

334,674750 June 30, 2013

September 24,
2013(2) Among dividends for which the record date falls within the fiscal year under review, thedividend for which the effective date of payment falls in the next fiscal year is as follows:
Resolution

Stock type

Ordinary general
meeting of shareholders
held on March 25, 2014

Commonstock

Total dividend
Source ofDividends peramountfunds forshare (yen)(in thousands of yen) dividends
356,985

Retainedearnings

8

Record date

Effective date

December 31,
March 26, 20142013

(Note) Effective July 1, 2013, the Company conducted a 1:100 split of each share of its common stock. Dividend per sharereflects the said stock split.

- 31 -

Fiscal 2014 (from January 1, 2014 to December 31, 2014)
1.

Matters related to the types and numbers of outstanding stocks and treasury shares
Number of stocks
at the beginning of
this fiscal year

Outstanding stocks
Common stock
Total
Treasury shares
Common stock
Total

2.

Number of stocks
decreased during
this fiscal year

Number of stocks
increased during
this fiscal year

Number of stocks
at the end of thisfiscal year

47,664,000
47,664,000--

47,664,000
47,664,000

3,040,800
3,040,800--

3,040,800
3,040,800

Matters related to dividends(1) Dividends paid
Resolution

Stock type

Total dividend amount(in thousands of yen)

Dividends per
share (yen)Record date

Effective dateOrdinary general meeting ofshareholders held on March
25, 2014

Commonstock

356,9858

December
31,2013

March 26,
2014

Meeting of Board of Directors
held on July 29, 2014

Commonstock

356,985

8 June 30, 2014

September 19,
2014(2) Among dividends for which the record date falls within the fiscal year under review, thedividend for which the effective date of payment falls in the next fiscal year is as follows:
Resolution

Stock type

Ordinary general
meeting of shareholders
held on March 25, 2015

Commonstock

Total dividend
Source ofDividends peramountfunds forshare (yen)(in thousands of yen) dividends
490,855- 32 -

Retainedearnings

11

Record date

Effective date

December 31,
March 26, 2015
2014

(Segment information)
Segment information
1.

Overview of reportable segments
The reportable segments of the Group are constituent units of the Company for which separate
financial information can be obtained, and the Board of Directors examines such information
on a regular basis to determine the allocation of management resources and evaluate businessperformance.
The Group defines the classification of business segments by comprehensively taking into
account main services, solutions, customers and markets, and has four reportable segments: theIT Consulting Business, the Package & Service Business, the New Media & Web Service
Business, and the Corporate Revitalization Business.
The business operations of the four reportable segments are as follows:
Reportable segments

2.

Business operations

IT Consulting BusinessIn this business, the Group helps clients solve problems, by sharing
management issues with them from a managerial perspective,
understanding the essence of the clients’ businesses andestablishing information systems for them using advanced IT.

Package & Service BusinessTo introduce or provide via cloud and ASP operations software
packages for highly specialized fields, such as sales management,
ERP and intellectual property management, as well as provide
other IT services, including consigned development, maintenanceand operation and education, to help clients improve theiroperational efficiency

New Media & Web Service
Business

To create original services that have not existed so far in the Mediaand Web service area

Corporate Revitalization BusinessTo get deeply involved in the management team of client firms,
revitalize client firms through drastic reform focusing on IT, andestablish success models for each industry.

Methods of calculating net sales, income or loss, assets, liabilities, and other items byreportable segment
Accounting procedures for reportable business segments are as described in “Significant
Accounting Policies Regarding the Preparation of Consolidated Financial Statements.”
Income of reportable segments is based on operating income.
Inter-segment sales and transfers are based on market prices.

- 33 -

3.

Information on amounts of net sales, income or loss, assets, and other items by reportablesegment
Fiscal 2013 (from January 1, 2013 to December 31, 2013)(in thousands of yen)
Reportable segments
Adjustment(Note 2)

Amountstated infinancialstatements(Note 3)30,049,790-

30,049,790-

773,456(773,456)

30,049,790

IT Consulting
Business

Package &ServiceBusiness

New Media& Web
ServiceBusiness

Corporate
Revitalization
Business

Total

19,660,032

3,855,988

1,976,419

4,557,350

30,049,790-

47,599721,985

1,350

2,521

773,456

Other(Note 1)Total

Net sales
Net sales to outsideclients
Inter-segment sales ortransfer
Total

19,707,631

4,577,973

1,977,769

4,559,872

30,823,247-

30,823,247(773,456)

Segment income (loss)

2,959,679

373,177(51,843)

46,067

3,327,082(1,182)

3,325,899

26,994

3,352,893

Segment assets

12,618,510

2,523,712

1,655,080

782,612

17,579,916

1,727,518

19,307,435(82,367)

19,225,067

Depreciation

310,838

32,53731,43432,706

407,518-

407,518-

407,518

Amortization of
goodwill

111,330-

80,994-

192,325-

192,325-

192,325

Increase in property,
plant and equipment andintangible assets

370,250

32,74913,731

61,415478,147-

478,147-

478,147

Other items(Note) 1.

“Others,” a segment not included in the reportable segments, include securities investment, holding, and management activities.

2.

Adjustment to segment income (loss) “¥26,994 thousand” and adjustment to segment assets “-¥82,367 thousand” areadjustments to inter-segment transactions.

3.

Segment income (loss) is adjusted with operating income in consolidated financial statements.

Fiscal 2014 (from January 1, 2014 to December 31, 2014)(in thousands of yen)
Reportable segments
Adjustment(Note 2)

Amountstated infinancialstatements(Note 3)34,424,465-

34,424,465-

632,488(632,488)-

35,056,953-

35,056,953(632,488)

34,424,465

4,304,109(750)

4,303,358

39,284

4,342,643

771,197

20,075,369

1,709,383

21,784,752(82,107)21,702,644

12,62933,939431,271-431,271(17,279)

413,991-

161,989-

257,213-257,213-257,21386,584

4,758

63,567

313,932-

313,932(56,552)

257,380

IT Consulting
Business

Package &ServiceBusiness

New Media& Web
ServiceBusiness

Corporate
Revitalization
Business

Total

21,311,912

4,389,418

4,254,648

4,468,485

34,424,465

-

3,142

621,934

3,405

4,005

632,488

Total

21,315,054

5,011,352

4,258,054

4,472,491

Segment income (loss)

3,883,852

469,337(13,969)(35,110)Segment assets

14,363,143

3,224,790

1,716,237

Depreciation

337,730

46,971

Amortization of
goodwill

95,224

Increase in property,
plant and equipment
and intangible assets

159,023

Other(Note 1)Total

Net sales
Net sales to outsideclients
Inter-segment sales ortransfer

Other items(Note)

1. “Others,” a segment not included in the reportable segments, include securities investment, holding, and management activities.
2. Adjustment to segment income (loss) “¥39,284 thousand” and adjustment to segment assets “¥82,107 thousand” areadjustments to inter-segment transactions.
3. Segment income (loss) is adjusted with operating income in consolidated financial statements.

- 34 -

Information on noncurrent asset impairment losses by reportable segment
Fiscal 2013 (from January 1, 2013 to December 31, 2013)(in thousands of yen)
Reportable segments
IT Consulting
Business

Impairment loss

Package &ServiceBusiness--

New Media& Web
ServiceBusiness

Corporate
Revitalization
Business

27,743-

Total

27,743

Others(Note)

Total

13,394

Corporateor
elimination

41,138-

Total

41,138

Note: The amount in “Other” represents impairment loss on idle land.

Fiscal 2014 (from January 1, 2014 to December 31, 2014)(in thousands of yen)
Reportable segments
IT Consulting
Business

Impairment loss

Package &ServiceBusiness

10,227-

New Media& Web
ServiceBusiness

Corporate
Revitalization
Business

2,810

-

Total

Others(Note)

13,037

Total-

Corporateor
elimination

13,037-

Total

13,037

Information on amortization and unamortized balance of goodwill by reportable segment
Fiscal 2013 (from January 1, 2013 to December 31, 2013)(Goodwill)(in thousands of yen)
Reportable segments
IT Consulting
Business

Package &ServiceBusiness

New Media& Web
ServiceBusiness

Corporate
Revitalization
Business

Total

Others(Note)

Total

Corporateor
elimination

Total

Amortization during theperiod111,330-

80,994-

192,325-

192,325-

192,325

Balance at the end of theperiod94,754-

728,951-

823,705-

823,705-

823,705

Fiscal 2014 (from January 1, 2014 to December 31, 2014)(Goodwill)(in thousands of yen)
Reportable segments
IT Consulting
Business

Package &ServiceBusiness

New Media& Web
ServiceBusiness

Corporate
Revitalization
Business

Total

Others(Note)

Total

Corporateor
elimination

Total

Amortization during theperiod95,224-

161,989-

257,213-257,213-257,213

Balance at the end of theperiod-321,986

575,224-

897,211-897,211-897,211

Information on gain on bargain purchase by reportable segment
Fiscal 2013 (from January 1, 2013 to December 31, 2013)
None
Fiscal 2014 (from January 1, 2014 to December 31, 2014)
None- 35 -

(Per share data)

Net asset value per share
Net income per share(Notes) 1.

2.

Fiscal 2013
(from January 1, 2013 to
December 31, 2013)

Fiscal 2014
(from January 1, 2014 toDecember 31, 2014)¥ 288.99¥ 45.39
Fully diluted net income per share isnot stated because the average stock
price during the period is below theexercise price of stock acquisitionrights and hence net income per shareis not diluted.

¥ 319.80¥ 49.75
Fully diluted net income per share isnot stated because the average stock
price during the period is below theexercise price of stock acquisitionrights and hence net income per shareis not diluted.

Effective July 1, 2013, the Company conducted a 1:100 split of each share of its common stock. Net asset value per share andnet income per share were calculated on the assumption that the stock split was conducted at the beginning of the previous
consolidated fiscal year.
Net income per share is calculated based on the following:

Fiscal 2013
(from January 1, 2013 to
December 31, 2013)

Fiscal 2014
(from January 1, 2014 toDecember 31, 2014)

Net income per share
Net income (thousands of yen)

2,027,847

2,220,084

Amount not available for commonshareholders to common shares(thousands of yen)--

Net income attributable to commonshares (thousands of yen)

2,027,847

2,220,084

Average outstanding shares ofcommon stock during the period(shares)

44,674,713

44,623,200

Stock options granted by resolution of
the Ordinary General Meeting of
Shareholders on March 24, 2005
(Stock acquisition rights: 667 units)
Common stock: shares 266,800

Stock options granted by resolution of
the Ordinary General Meeting of
Shareholders on March 24, 2005
(Stock acquisition rights: 556 units)
Common stock: shares 222,400

Latent shares that have no dilution
effect and thus are not included in thecalculation of diluted net income per
share(Significant subsequent events)
None(Omission of disclosure)Notes other than those mentioned above are omitted because the necessity of their disclosure in the summary report of operating
results is considered to be insignificant.

- 36 -

5.

Non-consolidated Financial Statements(1) Balance sheets(in thousands of yen)
Fiscal 2013
(December 31,2013)
AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Accounts receivable - trade
MerchandiseWork in process
Prepaid expenses
Deferred tax assets
Short-term loans receivable from subsidiaries andassociates
Accounts receivable - other
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Tools, furniture and fixtures
Land
Total property, plant and equipment
Intangible assets
Trademark right
Software
Other
Total intangible assets
Investments and other assets
Investment securities
Shares of subsidiaries and associates
Long-term loans receivable from subsidiaries andassociates
Deferred tax assets
Lease and guarantee deposits
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets- 37 -

Fiscal 2014
(December 31,2014)

4,859,775
2,773,204735
301,460
146,315

6,211,656
3,995
3,417,649
140,652
345,383
187,265

90,480-1,637,314
20,7801,498,505
44,0379,830,067

11,849,146

244,790314,208
5,430

258,196264,2995,430

564,429

527,926532
640,384
10,810827
496,320
10,810651,727

507,958

986,938
1,206,603

904,206
1,606,601

3,138,117

3,592,589

68,510788,736
15,236(1,142,399)

298,616
890,198
15,236(1,805,462)

5,061,743

5,501,985

6,277,900

6,537,870

16,107,968

18,387,016

(in thousands of yen)
Fiscal 2013
(December 31,2013)

Fiscal 2014
(December 31,2014)

Liabilities
Current liabilities
Accounts payable - trade
Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Deposits received
Unearned revenue
Provision for quality assurance
Provision for loss on projects

515,983
536,625
601
898,777
180,360
20,573
161,766
191,303
173,600

474,362
743,157601
1,057,455
432,269
262,461
189,065
189,351
78,500Total current liabilities

2,679,591

3,427,224

Non-current liabilities
Long-term loans payable
Asset retirement obligations

1,000,000
242,770

1,000,000
276,792

Total non-current liabilities

1,242,770

1,276,792

3,922,361

4,704,017

Net assets
Shareholders' equity
Capital stock
Capital surplus
Legal capital surplus

1,421,815

1,421,815

2,495,772

2,495,772

Total capital surplus

2,495,772

2,495,772

27,74827,7489,694,186

11,244,825

9,721,935

11,272,573

Treasury shares(1,540,983)(1,540,983)

Total shareholders' equity

12,098,540

13,649,178

Total liabilities

Retained earnings
Legal retained earnings
Other retained earnings
Retained earnings brought forward
Total retained earnings

Valuation and translation adjustments
Valuation difference on available-for-sale securities
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets- 38 -

87,06633,82187,06633,821

12,185,607

13,682,999

16,107,968

18,387,016

(2) Non-consolidated statements of income(in thousands of yen)
Fiscal 2013
(from January 1, 2013
to December 31, 2013)

Fiscal 2014
(from January 1, 2014
to December 31, 2014)

Net sales
Cost of sales

18,014,110
11,289,843

19,727,334
12,241,460

Gross profit

6,724,267

7,485,873

Selling, general and administrative expenses

3,566,543

3,484,687

Operating income

3,157,723

4,001,186

Non-operating income
Interest income
Dividend income
Group management expense
Foreign exchange gains
Other

20,74623,476
23,700143,530
3,664

22,998398,716
14,176142,047
2,491

Total non-operating income

215,117580,430

3,914
1,005
212

8,516
1,237

5,132

9,754

3,367,708

4,571,862

213,773
1,843-

56,552

215,616

56,552

105,141
13,394474,883100-

744,888
168,702
1,589

Total extraordinary losses

593,520

915,180

Income before income taxes

2,989,804

3,713,233

Income taxes - current
Income taxes - deferred

1,270,549
954

1,690,194(241,570)

Non-operating expenses
Interest expenses
Commission for purchase of treasury shares
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Gain on extinguishment of tie-in shares
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Impairment loss
Provision of allowance for doubtful accounts
Loss on valuation of shares of subsidiaries and associates
Debt waiver loss from subsidiaries and associates

Total income taxes

1,271,503

1,448,623

Net income

1,718,300

2,264,609- 39 -

Statement of cost of sales(in thousands of yen)

Item
Details of manufacturing cost
I Labor expenses
1. Salaries and bonuses
2. Welfare expenses
II Subcontract expenses
1. Subcontract expenses
III Overheads
1. Transportation expenses
2. Depreciation
3. Rent expenses
4. Supplies expenses
5. Provision (reversal) of allowancefor quality assurance
6. Provision (reversal) of allowance
for loss on projects
7. Other
Total manufacturing expenses in
the period
Work in process at the beginningof the period
TotalWork in process at the end of theperiodTransfer to other account
Cost of sales

Fiscal 2013
(from January 1, 2013 to
December 31, 2013)
AmountRatio (%)

Note

4,165,254
554,866

4,720,120

43.3

4,929,116
660,684

5,589,800

46.3

4,587,045

4,587,045

42.1

4,833,405

4,833,405

40.0

1,651,818

13.7

12,075,024

100.0

424,495
241,752
509,095
51,390421,311
282,569
564,417
86,322(3,174)

189,351

160,100(95,100)

199,094*1

Details of cost of merchandise andfinished goods
Commodities inventories at the
beginning of the period
Product inventories at the
beginning of the period
Cost of purchased goods
Purchase of finished goods
Total
Commodities inventories at theend of the period
Product inventories at the end of
the period
Cost of merchandise and finished
goods
Cost of sales*1.

Fiscal 2014
(from January 1, 2014 toDecember 31, 2014)
AmountRatio (%)

1,582,755

14.5

10,889,921

100.0

202,946--

10,889,921

12,075,024-

140,652

31,711
10,858,210

15,422
11,918,949

-

735

-

-

432,3635432,368

321,776
322,511

735

-

-

-

431,633

322,511

11,289,843

12,241,460

Details of transfer to other accounts are as follows.
Fiscal 2013
(from January 1, 2013 to December 31,
2013)

Fiscal 2014
(from January 1, 2014 to December 31,
2014)

Transfer to selling, general and administrative
expenses (thousand yen)

26,911

10,622Other (thousand yen)

4,800

4,800

31,711

15,422

Item

Total (thousand yen)
2.

Actual job-order costing for each project is used to compute costs.

- 40 -6.

Other(1) Changes in Directors
None(2) Other
Status of orders received (outstanding contracts)(in thousands of yen)
Fiscal 2013
(from January 1, 2013 to
December 31, 2013)
Orders received

Fiscal 2014
(from January 1, 2014 toDecember 31, 2014)

Order backlog

Orders received

Order backlog

IT Consulting Business

19,912,960

6,829,321

20,386,442

5,903,851

Package & Service Business

4,051,918

1,167,777

4,630,557

1,408,916

New Media & Web Service Business

439,829

13,870305,382

12,891

Total

24,404,707

8,010,970

25,322,382

7,325,658(Notes) Orders received include adjustments for exchange rate fluctuations.

- 41 -