Consolidated Summary Report of Operating Resultsfor Fiscal 2015 (Year ended December 2015) [Japan GAAP]
February 5, 2016
Company name:

Future Architect, Inc.

Shares listed on:First Section of Tokyo Stock Exchange

Security code number:

4722

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

Representative:

Yuji Higashi, President and COO

Contact:

Yoshihiko Nakajima, Executive Officer

TEL:+81-3-5740-5724

Scheduled date of annual generalshareholders’ meeting:March 22, 2016

Scheduled date for filing the securities
report:March 23, 2016

Scheduled date for distribution of dividend
payments:

March 23, 2016

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 2015 (January 1, 2015 to December 31, 2015)(1) Consolidated operating results(Percentages are year-on-year changes)

Net sales

Operating income

Million yen%%

Net income
Million yen%

Fiscal 2015
35,293
2.5
4,869
12.1
4,836
11.8
2,659
Fiscal 2014
34,424
14.6
4,342
29.5
4,325
25.2
2,220
(Note) Comprehensive income
Fiscal 2015: 2,742 million yen (24.6%)
Fiscal 2014: 2,142 million yen (1.9%)

19.8
9.5

Net income pershare

Million yen

Ordinary income

Net income per share(fully diluted)

Yen%

Return on equity

Ratio of ordinary income
to total assets

%

%

%

17.3
21.7
16.3
21.1
Fiscal 2014: (152) million yen

13.8
12.6

Yen

Fiscal 2015
59.52
Fiscal 2014
49.75
(Reference) Equity in (earnings) losses of affiliates

Million yen

59.50
Fiscal 2015: 23 million yen

Operatingincome ratio(2) Consolidated financial position
Total assets

Net assets

Million yen

Fiscal 2015
Fiscal 2014
(Reference) Shareholders’ equity

Shareholders’ equity ratio

Million yen

22,82821,702
Fiscal 2015: 16,123 million yen

Net assets per share%

Yen

16,301
70.6
14,475
65.8
Fiscal 2014: 14,270 million yen

360.67319.80(3) Consolidated cash flow position

Fiscal 2015
Fiscal 20142.

Net cash provided by(used in) operating
activities
Million yen
2,878
3,114

Net cash provided by(used in) investing
activities
Million yen
(749)
(676)

Net cash provided by(used in) financing
activities
Million yen
(941)
(749)

Cash and cash equivalents at theend of the period
Million yen
9,757
8,614

Dividends
Dividends per shareFirst
quarter
Yen

SecondquarterYen

Thirdquarter
Yen

Year-end
dividend
Yen

Total
Yen

Annualdividends(Total)Million yen

Dividend
payout ratio(consolidated)

Ratio ofdividends to
net assets(consolidated)%%

Fiscal 2014
8.00
11.00
19.00
847
38.2
6.2
Fiscal 2015
9.50
13.50
23.00
1,028
38.6
6.8
Fiscal 2016 (Forecast)
12.50
12.50
25.00
38.0
(Note)The year-end dividend of ¥11.00 for Fiscal 2014 comprises an ordinary dividend of ¥9.00 and a 25th anniversary commemorative
dividend of ¥2.00.

3.

Projected Consolidated Results for Fiscal 2016 (January 1, 2016 to December 31, 2016)

Net salesFirst six months(accumulated total)
Full year

Operating income(Percentages are year-on-year changes)
Net income
Net income
attributable to parent
per sharecompany shareholders

Ordinary income

Million yen%

Million yen%

Million yen%

Million yen%

Yen

17,98037,000

5.6
4.8

2,400
5,200

14.6
6.8

2,410
5,220

14.6
7.9

1,355
2,880

13.2
8.3

30.31
64.42

* 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: 1 company (company name) CodeCamp Inc.
Exclusion: - companies (company names)(2) Change in accounting policies or estimates and retrospective restatementsa.
Change in accounting policies in accordance with revision of accounting standardsb.
Change in accounting policies other than item 1) abovec.
Change in accounting estimatesd.
Retrospective restatements(3) Number of outstanding shares (common stock)
a.
b.
c.

Total outstanding shares as of the end of the period(including treasury shares)
Total treasury shares as of the end of the period
Average number of outstanding stocks during theperiod under review

Fiscal 2015
Fiscal 2015
Fiscal 2015

47,664,000
shares2,958,800
shares44,689,236
shares

: No
: No
: No
: No
47,664,000
shares3,040,800
shares44,623,200
sharesFiscal 2014
Fiscal 2014
Fiscal 2014

(Reference) Overview of non-consolidated results1.

Non-consolidated Results for Fiscal 2015 (January 1, 2015 to December 31, 2015)(1) Non-consolidated operating results
Net sales
Fiscal 2015
Fiscal 2014

(Percentages are year-on-year changes)
Ordinary income
Net income

Operating income

Million yen%

Million yen%

Million yen%

Million yen%

19,017
19,727

(3.6)
9.5

4,365
4,001

9.1
26.7

4,658
4,571

1.9
35.8

2,809
2,264

24.1
31.8

Net income per share
Yen
62.87
50.75

Fiscal 2015
Fiscal 2014

Net income per share (fully
diluted)
Yen
62.86
-

(2) Non-consolidated financial position
Total assets
Million yen

Fiscal 2015
Fiscal 2014
(Reference) Shareholders’ equity

Net assets
Million yen

Shareholders’ equity ratio

Net assets per share%

Yen

19,523
15,63080.1
18,387
13,682
74.4
Fiscal 2015: 15,630 million yen Fiscal 2014: 13,682 million yen

349.63306.63*

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.

 Contents
1.

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 ...................................................................................62.
The Future Group...............................................................................................................................................................7
3.
Management Policy .........................................................................................................................................................12(1) Basic corporate tenets and management strategies .................................................................................................12(2) Goals and objectives ............................................................................................................................................... 13(3) Issues the Company faces ....................................................................................................................................... 14
4. Basic Approach to Selection of Accounting Standards ..........................................................................................................15
5.
Consolidated Financial Statements .................................................................................................................................. 16(1) Consolidated balance sheets ................................................................................................................................... 16(2) Consolidated statements of income and comprehensive income ............................................................................18(3) Consolidated statements of changes in net assets ...................................................................................................20(4) Consolidated statements of cash flows ...................................................................................................................22(5) Notes to consolidated financial statements .............................................................................................................24(Notes regarding the premise of surviving company) ...................................................................................................... 24(Significant accounting policies regarding the preparation of consolidated financial statements) ................................... 25(Notes to consolidated balance sheets) ............................................................................................................................. 28(Notes to consolidated statements of income and comprehensive income) ...................................................................... 28(Notes to consolidated statements of changes in net assets) ............................................................................................. 30(Segment information) ..................................................................................................................................................... 32(Per share data) ................................................................................................................................................................ 36(Significant subsequent events)........................................................................................................................................ 36

6.

7.

Non-consolidated Financial Statements ...........................................................................................................................37(1) Balance sheets ........................................................................................................................................................ 37(2) Non-consolidated statements of income .................................................................................................................39
Other ................................................................................................................................................................................41(1) Changes in Directors .............................................................................................................................................. 41(2) Other .......................................................................................................................................................................41

-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 2015 are as follows:
Net sales¥35,293 million (up 2.5% year-on-year)

Operating income¥4,869 million (up 12.1% year-on-year)

Ordinary income¥4,836 million (up 11.8% year-on-year)

Net income¥2,659 million (up 19.8% year-on-year)

During the fiscal year ended December 2015, consolidated net sales, operating income, ordinary income
and net income posted all-time highs for the third consecutive year.
Earnings results of each business segment are as follows.
1. IT Consulting Business
Domestic sales of the IT Consulting Business grew year-on-year despite certain existing projects
coming to completion as the fourth quarter of the fiscal year under review saw increased sales due tothe Group winning orders for IT system renewal/integration-related new projects by clients in the
manufacturing, distribution and service industries. At the same time, the Group acquired new clientsfor cloud computing services for financial institutions (SKYBANK) as well as new clients in the
online securities, distribution and service industries. Moreover, the profitability of each project
improved as we applied to all target projects the Group’s project management method. This involves
the automation of the monitoring of project progress as well as the quality check of deliverables,
based on databases created of all activities and deliverables in the projects.
Meanwhile, overseas sales of the IT Consulting Business declined year-on-year since, of its Southeast
Asia business operations, the Group overhauled its Singapore and Thailand operations, businesses
with low margins, although its Malaysia operations performed strongly.
Consequently, net sales of this segment were ¥21,589 million for the fiscal year under review, down
0.5% from a year earlier and operating income surged 15.9% year-on-year to ¥4,647 million.
2. Package & Service Business
At FutureOne, Inc. (“FutureOne”), package software introduction and applicable customization
development performed strongly. However, the company revamped low-margin projects, resulting in
declining sales and income year-on-year.
Micro CAD Co., Ltd. (“Micro CAD”), contributing to the consolidated earnings starting from thefiscal year under review, saw sales and operating income reach projected levels due to strong sales of
its comprehensive intellectual property management system created in-house.
Consequently, net sales of this segment were ¥4,355 million for the fiscal year under review, up 8.5%
from a year earlier, and operating income, which reflected the amortization of the goodwill of Micro
CAD, was ¥319 million, down 6.5% year-on-year.
3. New Media & Web Service BusinesseSPORTS Co., Ltd. (“eSPORTS”) saw sales increase year-on-year as online sales of sports, outdoor
and fitness gear remained strong throughout the fiscal year under review. Meanwhile, operating
income margin fell year-on-year, affected mainly by intensified competition in customer loyalty point
systems, higher use fees for platforms and a weaker yen although sales of private brand products, aproduct category commanding high margins, accounted for a greater proportion of total sales.
Tokyo Calendar Inc. (“Tokyo Calendar”) saw the monthly page views of its website, launched in
January 2015, grow to over 10 million in December 2015 while beginning to enjoy rising offline andonline advertising revenues, which allowed the company to achieve operating profitability in the
fourth quarter of the fiscal year under review. On a full fiscal year basis, however, operating loss wasrecorded by Tokyo Calendar.
As a result, net sales of this segment were ¥4,913 million, up 15.4% from a year ago, and operating
loss after reflecting the amortization of goodwill of eSPORTS and other companies was ¥122 million,
against an operating loss of ¥13 million a year earlier.
4. Corporate Revitalization BusinessUoei Corporation (“Uoei”), an operator of supermarkets, achieved higher gross profit margin andimproved cash flows through reducing merchandise disposals and inventories, based on rigorous-2-

efforts to use IT to ensure the management of product-by-product data on sales, purchases andinventories at individual supermarkets.
Consequently, net sales of this segment were ¥4,473 million, up 0.0% from a year earlier, andoperating income was ¥10 million, against an operating loss of ¥35 million a year ago.
Note: Segment earnings figures stated above are those before adjustment for internal sales or transfers
between segments. Effective from the fiscal year under review, Future Inspace, Inc. (“Future
Inspace”), which mainly provides maintenance and operation services for clients of the Company,changed segments from the Package & Service Business to the IT Consulting Business, while Life
Science Computing Corporation, which saw growth in its cloud computing services for the electronic
medical records of clinics, changed segments from the IT Consulting Business to the Package &Service Business. Year-on-year changes were calculated by converting the previous fiscal year’s
figures into those reflecting the segment changes.
(Outlook for the next fiscal year)
The Group’s earnings forecast for the fiscal year ending December 2016 is as follows:
Net sales
Operating income
Ordinary income
Net income attributable toparent company shareholders¥37,000 million (up 4.8% year-on-year)¥5,200 million (up 6.8% year-on-year)¥5,220 million (up 7.9% year-on-year)¥2,880 million (up 8.3% year-on-year)

Noteworthy events in each business segment for the following fiscal year are as follows:
1. IT Consulting Business
The Group has brought to a successful conclusion multiple large projects to scientifically analyze
legacy IT systems, which had been made into black boxes with inadequate specifications and manuals,
by tracing their source codes and to reconstruct the systems as the newest open systems. In so doing,
the Group has not only merely presented ideas but also consistently delivered services ranging from
grand design to development, based on components created in-house that enable real-time processingof data. With our track records in this area highly valued, the Company has been winning orders frommany clients not only in the distribution and service industries but also in diverse industries such as
the financial services and manufacturing industries.
In the fiscal year ending December 2016, the Group is expected to post higher sales from projects forwhich orders were won, or on which customer inquiries were received, in the fiscal year under review.
Moreover, by maximally leveraging the Group’s unique project monitoring and management methods,
we will endeavor to further improve project efficiency and quality, thereby achieving increased
profitability while delivering greater future value to clients.
Meanwhile, Future Inspace will provide clients with post-IT system launch maintenance and operation
service of high reliability through further bolstering its technological collaboration with Future
Architect Inc.
2. Package & Service Business
FutureOne will strive to cater for replacement needs of existing clients while winning new clients byleveraging its continued efforts so far to overhaul the functions of package software products createdin-house and streamline its development tools. Moreover, in addition to growing business partnerships
and launching an office in the Nagoya area in an effort to expand sales channels, the company will
introduce a greater number of non-proprietary ERP products and e-commerce-related solutions, thus
aiming to increase sales and profits.
Micro CAD will expand its customer base by continuing to add to, and improve, the functions of its
comprehensive intellectual property management system created in-house. Moreover, it will expand
its services for manufacturers such as product lifecycle management (PLM) in collaboration with theCompany.

-3-3. New Media & Web Service BusinesseSPORTS will enlarge its product portfolio by adding to its product lineup do-it-yourself (DIY) andpet products in addition to sports, outdoor and fitness products. At the same time, it will continue tomake greater efforts on private brand products, initiatives to newly develop products desired bycustomers. Moreover, eSPORTS will introduce early a web service based on the catch phrase of“sports and health” that is now under preparation, thereby aiming to grow its earnings foundation.
Tokyo Calendar achieved in a short period of time a sharp increase in the page views of its website asa new medium to deliver information on high-quality life styles in the form of feature articles, inaddition to providing information on restaurants and gourmet experiences. From now on, Tokyo
Calendar aims to achieve profitability on a full fiscal year basis while broadening the range of its web
services by capitalizing on the website’s publicity and accumulated knowhow.
CodeCamp Inc. (“CodeCamp”), which joined the Group in October 2015, has put in place a basic
platform to provide a programming education service both online and offline. Thus, going forward,
while offering enhanced personal functionality and convenience, CodeCamp will aim to deliver
increased opportunities for many users to learn programming through its service.
4. Corporate Revitalization BusinessUoei aims to increase sales by providing a product lineup meeting customer preferences, based oncontinued efforts to analyze product-by-product data on sales, purchases and inventories by using IT
systems. At the same time, Uoei strives to achieve improved profitability by minimizing disposal
losses. It will also continue initiatives to stimulate consumer traffic to its supermarkets by providing
its private brand products and having a robot named “Pepper” offer customer service.

-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¥22,828 million (up 5.2% year-on-year)

Liabilities¥6,527 million (down 9.7% year-on-year)

Net assets¥16,301 million (up 12.6% year-on-year)

The following is the analysis of financial condition for the fiscal year under review.
(1) Assets
Current assets were ¥17,696 million on a consolidated basis at the end of the fiscal year underreview, up ¥1,033 million from the preceding year, and non-current assets amounted to ¥5,132
million, up ¥92 million, with total assets standing at ¥22,828 million, up ¥1,126 million. The mainunderlying factors were an increase in cash and deposits (an increase of ¥1,097 million from the endof the previous consolidated fiscal year) and an increase in investment securities (an increase of¥235 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 ¥5,082 million at the end of the fiscal year under review, down ¥718 million
from the preceding year, and noncurrent liabilities were ¥1,445 million, up ¥18 million, whichbrought total liabilities to ¥6,527 million, down ¥699 million. The main factors included a fall inaccounts payable - other (a decrease of ¥307 million from the end of the previous consolidated fiscal
year) and a fall in income tax payable (a decrease of ¥118 million).
(3) Net assets
Net assets were ¥16,301 million at the end of the fiscal year under review, up ¥1,825 million fromthe preceding year. The main factors included an increase of retained earnings (an increase of¥1,744 million from the end of the 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 ¥2,878 million (compared to an inflow of ¥3,114
million in the previous fiscal year), mainly due to a decrease in accounts payable - other of ¥314
million and payment of income taxes paid of ¥2,063 million despite the posting of income before
income taxes of ¥4,688 million.
(2) Net cash provided by (used in) investing activities
Net cash from investing activities was an outflow of ¥749 million (compared to an outflow of ¥676
million in the previous fiscal year), chiefly due to purchase of property, plant and equipment of ¥183
million, purchase of shares of subsidiaries resulting in change in scope of consolidation of ¥248
million and purchase of investment securities of ¥348 million.
(3) Net cash provided by (used in) financing activities
Net cash from financing activities was an outflow of ¥941 million (compared to an outflow of ¥749
million in the previous fiscal year), mainly reflecting payments for cash dividends paid of ¥915
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 ¥9,757 million,
with an increase of ¥1,142 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 determines its dividend by comprehensively taking into consideration the state of its
accounting period profit and loss, cash flows and treasury stock purchasing while securing a proper levelof internal reserves for the organization to continue growing in a sustainable manner.
The Company has changed its dividend policy to apply going forward a dividend payout ratio standard of
at least 35% of consolidated earnings, up from at least 30% of non-consolidated earnings previously
applied, in a move to return profits to shareholders in an enhanced manner.
Under the above-mentioned new policy, we plan to pay a year-end dividend of surplus for the fiscal year
ended December 31, 2015 of ¥13.50 yen per share, an upward revision of ¥4.00 from thepreviously-forecast dividend of ¥9.50 per share. The full fiscal year dividend comprising the year-end
dividend and the previously-paid interim dividend is expected to be ¥23.00 per share (consolidated
dividend payout ratio of 38.6%).
The Company’s planned payment of dividends of surplus for the next fiscal year is ¥25.00 per share.

-6-

2.

The Future GroupThe Group (the parent and related companies) consists of 19 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 name

Future Architect, Inc. (Parent company)

Business activities
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.

Future Inspace, Inc. (subsidiary)

Consigned development, and maintenance and operation services

Brightree Solutions Sdn Bhd. (subsidiary)

Introduction, customization, and operation and maintenance of ERP
in Southeast Asia

(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, and maintenance and operation services.
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

Micro CAD Co., Ltd. (subsidiary)

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

CodeCamp Inc. (subsidiary) (new)Operation of the online programming school “CodeCamp”(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 (subsidiary)-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. (subsidiary)-8-

[Consolidated subsidiary (Domestic)]
Future Inspace, Inc.

[Consolidated subsidiaries (Domestic)]
FutureOne, Inc.
Micro CAD Co., Ltd.

Future Architect, Inc.

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

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

[Consolidated subsidiary (Domestic)]
Uoei Shoten Corporation

Investment

Sales ofproducts

Provision of services/
sales of products, etc.
Publication/
Sales ofproducts/
Provision ofservices

Investment

Clients
Investment
targets[Equity-method affiliate (Domestic)]
Lawson System Labo Limited Liability
Partnership[Consolidated subsidiary (Abroad)]
Brightree Solution Sdn Bhd. (Malaysia)

Consumers

Corporate Clients

Services

IT Consulting
Business
Package & Service
Business
New Media & Web
Service BusinessCorporate
Revitalization
Business

Contracting<Business System Diagram>[Consolidated subsidiary (Domestic)]
Future Investment Corp.

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

Location

Future Inspace, Inc.

Shinagawa-ku,
Tokyo

Brightree Solutions
Sdn Bhd.

PETALING
JAYA,
MALAYSIA

FutureOne, Inc.

Shinagawa-ku,
Tokyo

Micro CAD Co.,Ltd.

Chuo-ku, Tokyo

Capital stock

Main businessactivities

Voting rightratio (%)

¥83,700
thousandIT Consulting
Business

1,936 thousand
ringgitInterlocking directors
Monetary
assistanceBusiness transactions

2

None

Receipt of services
for development

1

1

None

None

100.0

1

1

None

Receipt of services
for development

Package &ServiceBusiness

100.0

-

3

None

None

¥100,000thousandNew Media &Web Service
Business

100.0(100.0)

1

1

None

None

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

100.0(100.0)

1

1

Fund
lending

None

CodeCamp Inc.

Shinjuku-ku,
Tokyo¥158,049
thousandNew Media &Web Service
Business

62.5(62.5)

1

3

None

None

Uoei Shoten
Corporation

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

100.0(100.0)

-

3

None

None

Future Investment
Corp.

Shinagawa-ku,
Tokyo¥10,000
thousand

Other

100.0

2

2

Fund
lending

None

RI Partners Limited
Liability Association

Shinagawa-ku,
Tokyo¥1,896,078
thousand

Other

100.0
(100.0)

-

-

None

None

Number ofcompany
directors

Number ofcompany
employees

100.0

1

IT Consulting
Business

51.0(51.0)¥200,000thousandPackage &ServiceBusiness¥30,000
thousand

Gifu Prefecture

Tokyo Calendar Inc.

eSPORTS Co., Ltd.

Gifu,

Other: two domestic
companies and sevenoverseas companies(Notes)1.

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

2.

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

5.

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

6.

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

Lawson System
Labo Limited
Liability Partnership

Shinagawa-ku,
Tokyo

Logizard Co., Ltd.

Chuo-ku, Tokyo

Crossflo Systems,
Inc.

CALIFORNIA,

dit Co., Ltd.

Koto-ku, Tokyo

U.S.A.

Capital stock¥38,000
thousand¥62,324
thousand
US$1,540
thousand¥428,745
thousand

Main businessactivities

Votingright ratio(%)

IT Consulting
Business

Interlocking directors
Monetary
assistanceBusiness transactions

-

None

None

-

-

None

None

32.9

-

-

None

None

48.2

-

3

None

Receipt of services
for security
consulting

Number ofcompany
directors

Number ofcompany
employees

50.0-

Package &ServiceBusiness

36.1

Other

Other

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 and management strategies
The basic tenet 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. Under this basic
tenet, the Company holds “to design management and IT” as a leading IT consulting service company as
the core of its medium- and long-term management strategies.
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:[IT Consulting Business]
1) “Trinity” viewpoint
The Company aims to contribute to the customer achieving a business reform by focusing on threedomains of management strategy, business reform, and system reform and using cutting-edge IT, notmerely aiming at the realization of functions by IT. To this end, we are striving to deliver to thecustomer solutions that take into consideration not only partial but also total optimization with a viewto the future as well as the present.
2) “Neutral” position
By specializing in open systems, the Group has maintained a neutral position independent of any
hardware vendors or software vendors, and has been pursuing optimization without being swayed bypreconceived ideas or restrictions of products. Through this approach, we seek to maximize customer
profits at all times from the standpoint akin to that of an outside CIO close to the customer.
3) Provision of comprehensive services from front-end to back-end processes
We are 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.
4) Grand designs based on scientific system structure analysis along with components that enablereal-time data processing
Many companies find it challenging to improve their IT systems since the existing ones have been
turned into black boxes without any specifications and manuals being available. This is why suchcompanies are unable to deal with the changing business situation, at the same time incurring
persistently high operational costs to preserve the status quo. To address these circumstances, we use amethod of scientifically analyzing existing large IT systems (Future Formula) to overhaul andreconstruct them. At the same time, based on components created in-house, we provide an IT systemthat enables the customer to process product-by-product sales and profit/loss information on areal-time basis. Thus, by delivering high-quality and timely services, we will continue to support
customers in renovating their operations in future.
- 12 -

[Package & Service Business]
1) Expansion of business for small and mid-size companies
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.
We seek to cater for such needs, growing the Package & Service Business in the process. To this end,
we not only overhaul the functions of package software products created in-house and improve thequality of our implementation products further but also implement ERP and e-commerce-related
solutions created by rival vendors if they can deliver the environment ideal for the customer, thereby
striving to further expand sales and improve operating income margin.
2) Support for customers’ intellectual property right strategies
Japanese companies need to bolster their intellectual property right strategies for the creation andutilization of patent and other intellectual property rights. In this situation, through developing andproviding package software products designed to support the customer’s efforts to acquire, maintainand manage intellectual property rights, we seek to assist the customer in formulating intellectual
property right strategies and accumulating, sharing and using relevant knowledge.
[New Media & Web Service Business]
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 services and operations of websites that is held by
Web-related companies, including EC-related and e-Learning companies, and the content creation
capabilities owned by publishing and media companies with the IT knowledge and know-how
cultivated by the Company. Also, we will offer values that have not existed so far by feeding backnew knowledge, which we acquire through the provision of these original services, to clientcompanies in the IT Consulting Business.
[Corporate Revitalization Business]
The Group will strive to revitalize subject companies based on the strategic and technologicalexperience in the distribution industry it has accumulated, with use of IT systems, and sublimate theresults obtained through operation of the business into IT systems that can be used generally in thesame 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.

- 13 -

(3) 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 and through promotion oftraining for consultants and an application to all relevant projects. Going forward, we will further
promote 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 review
by engineers experienced in quality control. From now on, we will endeavor to further improve
project quality by not only improving the proprietary project information-sharing system andmonitoring system mentioned above but also by further bolstering our quality control platformcomprising architecture examination, phase-by-phase project review and ultimate operationassessment.
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, Package & Service 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) Enhancement of research & development on newest technologies [IT Consulting Business]
The Group will pursue research & development (R&D) on technologies that have been advancing
markedly in recent years on a global basis, such as sensor, IoT, AI and data analysis, while
simultaneously applying R&D results to actual projects, instead of merely learning such technologies
by assigning departments and personnel to them.
6) Overseas development [IT Consulting Business, Package & Service Business]
In order to cope with the rapidly changing Asian markets through its overseas subsidiaries, the Groupwill endeavor to expand business with remarkably growing Asian clients through review ofmanagement strategies for each country and constant promotion of business reform as well as toexpand its local IT support business for Japanese companies in the distribution and logistics fields
which are operating in Southeast 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.
7) Improving profit margin and expanding market share [Package & Service Business]
As for the Package & Service Business, while working to expand sales channels in an effort to attainan improved profit margin for business for small and midsize companies, in particular, and to gain ahigher market share in this market segment, the Group will continue improving functions of its
proprietary packages for small and midsize companies and client support services. We will also
promote the establishment of a structure that can support small and midsize companies not only in theTokyo Metropolitan and Kansai areas, but also in other major cities nationwide.
8) Solidifying earnings foundation and expanding services [New Media & Web Service Business]
In the New Media & Web Service Business, the Group will endeavor to grow continuously throughthe efforts to make each unprofitable subsidiary achieve profitability as early as possible bysolidifying its earnings foundation and to make each already-profitable subsidiary expand its services.

- 14 -

4.

Basic Approach to Selection of Accounting Standards
The Company intends to apply International Financial Reporting Standards (IFRS) appropriately inconsideration of circumstances inside and outside of Japan.

- 15 -

5.

Consolidated Financial Statements(1) Consolidated balance sheets(in thousands of yen)Previous consolidated
fiscal year
(December 31, 2014)
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*4*3

Total current assets

8,552,995
5,006,460
103,746589,260
208,181272,660
1,394,410
539,911(4,990)Consolidated fiscal year
under review(December 31, 2015)*3

16,662,635

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 -

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

9,650,136
5,020,960
108,689
688,591
34,892
216,495
1,415,805
566,157(5,113)
17,696,614*

2

3,346,284(3,023,246)

479,747

323,037

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

80,8942,189,531(1,869,459)*2

361,408

320,071

950,630

724,003

538,416
897,211
20,687472,454969,257
23,175

1,456,315

1,464,887

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

1,729,798
1,032,610
132,819
93,653(45,430)

2,633,063

2,943,452

5,040,009

5,132,344

21,702,644

22,828,959

(in thousands of yen)Previous consolidated
fiscal year
(December 31, 2014)
Liabilities
Current liabilities
Accounts payable - trade
Current portion of long-term loans payable
Accounts payable - other
Income taxes payable
Provision for bonuses
Provision for quality assurance

Consolidated fiscal year
under review(December 31, 2015)

1,404,017
1,049,765
1,361,648
214,506
195,452

1,303,659
4,800
742,063
1,243,548
236,859
88,16078,500－

Provision for point card certificates
Other

13,474
1,483,164

25,1981,437,814

Total current liabilities

5,800,529

5,082,101

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

1,000,000
405,181
21,192

1,013,200
408,249
23,921

Total non-current liabilities

1,426,373

1,445,370

Total liabilities

7,226,902

6,527,472

Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares

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

1,421,815
2,507,763
13,756,812(1,499,428)

14,389,237

16,186,962

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

34,168(153,008)

45,431(108,510)

Total accumulated other comprehensive income

Provision for loss on projects

Total shareholders’ equity(118,839)(63,078)

Minority interests

205,344

177,602

Total net assets

14,475,742

16,301,486

21,702,644

22,828,959

Total liabilities and net assets- 17 -

(2) Consolidated statements of income and comprehensive income(in thousands of yen)Previous consolidated
fiscal year
(from January 1, 2014
to December 31, 2014)
Net sales
Cost of sales

1,

* *

2

Consolidated fiscal year
under review(from January 1, 2015
to December 31, 2015)

34,424,465
22,257,267

1,

* *

2

35,293,422
21,638,095

Gross profit

12,167,197

13,655,326

Selling, general and administrative expenses
Directors’ compensations
Salaries and bonuses
Other salaries
Training expenses
Research and development expenses
Depreciation
Recruiting expenses
Amortization of goodwill
Other

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

374,8633,626,521
236,958
234,919
154,158
105,320275,134
295,998
3,482,232*3

Total selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Share of profit of entities accounted for using equity
methodForeign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using equity
methodForeign exchange losses
Contributions
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of investment securities
Gain on sales of shares of subsidiaries and associates
Total extraordinary income
Extraordinary losses
Loss on sales of investment securities
Loss on valuation of investment securities
Loss on sales of share of subsidiaries and associates
Impairment loss
Loss on change in equity
Amortization of goodwill*4

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

7,824,554

8,786,107

4,342,643

4,869,219

3,175
28,961

3,138
33,750-23,137

98,28916,654

19,735147,081

79,762

9,135

10,145

152,373-

2,325

72,12630,000-163,833

112,271

4,325,891

4,836,710

2,138

35,063
144,1532,138

179,216

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

156,980
161,347
9,343
-

*4

67,176327,671

4,260,853

4,688,256(in thousands of yen)Previous consolidated
fiscal year
(from January 1, 2014 toDecember 31, 2014)

Consolidated fiscal year
under review(from January 1, 2015 to
December 31, 2015)

Income taxes - current
Income taxes - deferred

2,086,899(98,340)

1,948,709
32,369Total income taxes

1,988,559

1,981,078

Income before minority interests

2,272,294

2,707,177

52,20947,4442,220,084

2,659,733

52,20947,4442,272,294

2,707,177(53,245)(71,733)

11,51926,946

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(5,101)
5

Total other comprehensive income*

Comprehensive income(Comprehensive income attributable to)Comprehensive income attributable to owners of parent
Comprehensive income attributable to minority
interests- 19 -(130,080)(3,560)*5

34,905

2,142,213

2,742,082

2,088,769

2,715,069

53,44327,013

(3) Consolidated statements of changes in net assets
Previous consolidated fiscal year (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

Treasury shares

Total shareholders’equity(1,540,983)

12,883,124

10,506,520

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

Net income

2,220,084

2,220,084

Net changes of items other thanshareholders' equity
Total changes of items during theperiod

--1,506,113-

1,506,113

Balance at the end of the period

1,421,815

2,495,772

12,012,633(1,540,983)

14,389,237

Valuation and translation adjustments

Balance at the beginning of the period

Valuationdifference on
available-for-salesecurities

Foreign currencytranslation
adjustment

Total valuationand translation
adjustments

87,158(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)

Net income

2,220,084

Net changes of items other thanshareholders' equity(52,990)(78,324)(131,314)

53,443(77,871)

Total changes of items during theperiod(52,990)(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- 20 -

Consolidated fiscal year under review (from January 1, 2015 to December 31, 2015)(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’equity12,012,633(1,540,983)

14,389,237

Changes of items during the period
Dividends from surplus(915,554)(915,554)

Net income

2,659,733

2,659,733

Disposal of treasury shares

11,99041,55553,546

Net changes of items other thanshareholders' equity
Total changes of items during theperiod-11,9901,744,178

41,555

1,797,724

Balance at the end of the period

1,421,815

2,507,763

13,756,812(1,499,428)

16,186,962

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

34,168Foreign currencytranslation
adjustment

Total valuationand translation
adjustments(153,008)(118,839)

Minority
interests

205,344

Total net assets

14,475,742

Changes of items during the period
Dividends from surplus(915,554)

Net income

2,659,733

Disposal of treasury shares
Net changes of items other thanshareholders' equity

53,546
11,26344,49755,761(27,742)

28,019Total changes of items during theperiod11,26344,49755,761(27,742)

1,825,744

Balance at the end of the period

45,431(108,510)(63,078)

177,602

16,301,486- 21 -

(4) Consolidated statements of cash flows(in thousands of yen)Previous consolidated
fiscal year
(from January 1, 2014 toDecember 31, 2014)
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
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)Share of (profit) loss of entities accounted for using
equity method
Loss (gain) on change in equity
Loss (gain) on valuation of investment securities
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
Increase (decrease) in accounts payable - other
Decrease (increase) in other assets
Increase (decrease) in other liabilities

Consolidated fiscal year
under review(from January 1, 2015 to
December 31, 2015)

4,260,853
413,991
257,213(26,512)41,733
183,343(95,100)(32,137)
9,135(99,183)

4,688,256
433,425
295,998
14,042
31,571(107,292)(78,500)(36,889)
10,14576,619152,373(23,137)

34,931

9,343
156,980(35,063)

7,257(144,153)

13,037

161,347(606,944)(97,007)(214,088)

70,521(265,575)(71,709)

222,976
140,346
471,386(314,251)(95,277)(149)

Subtotal

4,869,039

4,944,820

Interest and dividend income received
Interest expenses paid
Income taxes paid
Contributions paid

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

36,920(10,154)(2,063,203)(30,000)

Net cash provided by (used in) operating activities

3,114,834

2,878,383- 22 -

(in thousands of yen)Previous consolidated
fiscal year
(from January 1, 2014 toDecember 31, 2014)
Net cash provided by (used in) investing activities
Proceeds from withdrawal of time deposits
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 resulting
in change in scope of consolidation
Purchase of shares of subsidiaries and associates
Proceeds from sales of shares of subsidiaries andassociates
Payments for investments in capital 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, 2015 to
December 31, 2015)(165,025)(40,930)-

40,325(183,473)(123,031)(5,426)(317,512)(248,571)-

124,222-(10,255)

25,000--(19,000)(109,939)
63,600(113,617)(348,373)
49,610(19,391)

6,290

13,258(24,859)(19,220)

Net cash provided by (used in) investing activities(676,994)(749,327)

Net cash provided by (used in) financing activities
Net increase (decrease) in short-term loans payable
Repayments of long-term loans payable
Proceeds from sales of treasury shares
Cash dividends paid
Cash dividends paid to minority shareholders(35,000)(714,385)-(1,200)53,546(915,212)(78,411)

Net cash provided by (used in) financing activities(749,385)(941,277)

33,190(45,372)

Net increase (decrease) in cash and cash equivalents

1,721,645

1,142,406

Cash and cash equivalents at beginning of the period

6,892,975

8,614,620

Cash and cash equivalents at end of the period

8,614,620

9,757,026

Effect of exchange rate change on cash and cash
equivalents- 23 -

(5) Notes to consolidated financial statements(Notes regarding the premise of surviving company)
Not applicable.

- 24 -

(Significant accounting policies regarding the preparation of consolidated financial statements)
1. Scope of consolidation
Number of consolidated subsidiaries: 19
Names of consolidated subsidiaries:
They are omitted here because they are included in “2. The Future Group.”
CodeCamp Inc. and one other company were included in the scope of consolidation in the current
fiscal year under review because the Company acquired their shares. Also, Life Sciences
Computing Corporation was excluded from the scope of consolidation because the Company soldits shares.
There are no non-consolidated subsidiaries.
2. Application of equity method
Number of affiliated companies to which equity-method is applicable: 5Names of affiliated companies to which the equity method is applicable:
They are omitted here because they are included in “2. The Future Group.”
Lawson System Labo Limited Liability Partnership was included in the scope of application of theequity method in the fiscal year under review as a result of its establishment.
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 cost based on moving 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 cloud- 25 -

service-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
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 (fiveyears). 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 for which
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 tolessees, lease transactions that commenced before the start of the initial year of the applicationof the “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13) are accounted
for in a manner similar to the accounting treatment for regular lease transactions.

(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 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 2014
(December 31, 2014)
Investment securities (stocks)
Investment securities (capital
contributions)Fiscal 2015
(December 31, 2015)¥321,434-¥341,923¥24,979*2. Total asset impairment losses are included in accumulated depreciation.
*3. Lawsuit
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.
Fiscal 2015 (December 31, 2015)
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.
*4 Inventories for contracted projects on which loss is likely to be incurred and provision for loss on
projects are presented independently without offsetting the former with the latter. Of inventories forcontracted projects on which loss is likely to be incurred, an amount corresponding to provision forloss on projects is as shown below.
(in thousands of yen)
Fiscal 2014
(December 31, 2014)
Work in process
Total

Fiscal 2015
(December 31, 2015)¥78,500-¥78,500-(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 2015
(from January 1, 2015 to
December 31, 2015)(¥95,100)(¥78,500)*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 2015
(from January 1, 2015 to
December 31, 2015)¥183,343- 28 -(¥107,292)*3. Total research and development expenses included in selling, general and administrative expenses(in thousands of yen)
Fiscal 2014
(from January 1, 2014 toDecember 31, 2014)

Fiscal 2015
(from January 1, 2015 to
December 31, 2015)¥133,774¥154,158*4. Impairment loss
The Group reported impairment losses of the following asset groups.
Fiscal 2014 (from January 1, 2014 to December 31, 2014)(1) Main assets on which impairment losses were recognized
Use
Business assets

Type
Software

Location
Toshima-ku, Tokyo, etc.

(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(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.
(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. Recoverable amounts were valued at zero because pre-discount future cash flows were
found to be negative.
Fiscal 2015 (from January 1, 2015 to December 31, 2015)(1) Main assets on which impairment losses were recognized
Use

Type

Food Retail Business

Buildings andstructures, land, other

Location
Niigata

IT Consulting
Business

Buildings, other

Singapore(2) Background of the recognition of impairment losses(i)Food Retail Business
The Group recorded the book values of asset groups at stores of which income fromoperating activities continued to be negative to their recoverable values.

(ii) IT Consulting Business
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.

- 29 -

(3) Amounts of impairment losses(in thousands of yen)
¥119,550¥28,579¥13,216

Buildings and structures
Land
Other
Total

¥161,347(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.
(5) Calculation method of recoverable amounts(i)Food Retail Business
The Company uses the higher of net selling price and use value as a recoverable amount.
The net selling price is calculated by rationally adjusting market prices in the neighborhood,and use value by discounting expected future cash flows with 3% of capital cost.

(ii) IT Consulting Business
The Company measures recoverable amounts based on use value. Recoverable amounts
were valued at zero because use value was found to be negative.
*5. Reclassification adjustment and tax effects relating to other comprehensive income
Fiscal 2014
(from January 1, 2014 toDecember 31, 2014)
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(in thousands of yen)
Fiscal 2015
(from January 1, 2015 to
December 31, 2015)(¥82,731)(¥82,731)¥29,485(¥53,245)(¥7,519)¥22,764¥15,244(¥3,724)¥11,519(¥71,733)¥26,946(¥5,101)(¥130,080)(¥3,560)¥34,905(Notes to consolidated statements of changes in net assets)
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

Number of stocks
increased during
this fiscal year

Number of stocks
decreased 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- 30 -

2.

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 of
Shareholders held on March
25, 2014

Commonstock

356,985

8.00

December 31,
2013

March 26,
2014

Meeting of Board of Directors
held on July 29, 2014

Commonstock

356,985

8.00 June 30, 2014

September 19,
2014(2) Among dividends for which the record date falls within this fiscal year, the dividend for which
the effective date of payment falls in the following 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

Retainedearnings

11.00

Record date

Effective date

December 31,
March 26, 2015
2014

Fiscal 2015 (from January 1, 2015 to December 31, 2015)
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

Number of stocks
decreased during
this fiscal year

Number of stocks
at the end of thisfiscal year

Outstanding stocks
Common stock
47,664,000
47,664,000
Total
47,664,000
47,664,000
Treasury shares
Common stock
3,040,800
82,0002,958,800
Total
3,040,800
82,0002,958,800(Note) The decrease of 82,000 shares in the number of treasury shares among common stock shares occurred due to exerciseof stock options.

2.

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 of
Shareholders held on March
25, 2015

Commonstock

490,855

11.00

December
31,2014

March 26,
2015

Meeting of Board of Directors
held on July 29, 2015

Commonstock

424,6999.50 June 30, 2015

September 18,
2015(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 following fiscal year is as follows:
Resolution

Stock type

Ordinary General
Meeting of Shareholders
held on March 22, 2016

Commonstock

Total dividend
Source ofDividends peramountfunds forshare (yen)(in thousands of yen) dividends
603,520- 31 -

Retainedearnings

13.50

Record date

Effective date

December 31,
March 23, 2016
2015

(Segment information)a. 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 services 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.

- 32 -

3.

Information on amounts of net sales, income or loss, assets, and other items by reportablesegment
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-

13,562(13,562)

34,424,465

IT Consulting
Business

Package &ServiceBusiness

New Media& Web
ServiceBusiness

Corporate
Revitalization
Business

Total

21,688,601

4,012,729

4,254,648

4,468,485

34,424,465

-

4,665

1,485

3,405

4,005

13,562

Other(Note 1)Total

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

21,693,266

4,014,214

4,258,054

4,472,491

34,438,027-

34,438,027(13,562)

Segment income (loss)

4,011,368

341,994(13,969)(35,110)4,304,282(750)

4,303,532

39,111

4,342,643

Segment assets

14,740,668

2,846,310

1,716,237

771,197

20,074,414

1,709,383

21,783,797(81,152)

21,702,644

Other items
Depreciation

330,518

54,183

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

413,991

Amortization of
goodwill

46,17049,054

161,989-

257,213-257,213-257,213

Increase in property,
plant and equipment andintangible assets

142,705

102,901

4,758

63,567

313,932-

313,932(56,552)

257,380(Notes) 1.

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

2.

“Adjustment” to segment income (loss) of ¥39,111 thousand and “adjustment” to segment assets of (¥81,152) thousand are
adjustments to inter-segment transactions.

3.

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

Fiscal 2015 (from January 1, 2015 to December 31, 2015)(in thousands of yen)
Reportable segments
Adjustment(Note 2)

Amountstated infinancialstatements(Note 3)35,293,422-

35,293,422-

38,679(38,679)-

35,332,102-

35,332,102(38,679)

35,293,422

4,855,609(38,705)

4,816,904

52,315

4,869,219

568,231

20,894,701

1,942,379

22,837,081(8,121)

22,828,959

6,797

37,225454,128-454,128(20,703)

433,425

107,328

188,63038

295,998-

295,998-

295,998

100,285

17,716

16,513324,052-

324,052-

324,052

IT Consulting
Business

Package &ServiceBusiness

New Media& Web
ServiceBusiness

Corporate
Revitalization
Business

Total

21,576,588

4,336,735

4,912,353

4,467,744

35,293,422-

12,80518,926832

6,115

38,679Total

21,589,393

4,355,662

4,913,185

4,473,860

Segment income (loss)

4,647,727

319,721(122,680)

10,841

Segment assets

15,334,548

2,671,988

2,319,933

350,842

59,262－
189,536

Other(Note 1)Total

Net sales
Net sales to outsideclients
Inter-segment sales ortransfer

Other items
Depreciation
Amortization of
goodwill
Increase in property,
plant and equipment
and intangible assets(Notes) 1.

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

2.

“Adjustment” to segment income (loss) of ¥52,315 thousand and “adjustment” to segment assets of (¥8,121) thousand are
adjustments to inter-segment transactions.

3.

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

- 33 -

4.

Matters related to changes in reportable segments(Changes in reportable segments)
The business of Future Inspace, Inc., which was included in “Package and Service Business” inthe previous consolidated fiscal year, is included in “IT Consulting Business” effective fromthe consolidated fiscal year under review, because operation and maintenance services for theCompany’s clients became the main business of the company from the first quarter of theconsolidated fiscal year under review.
Besides, the business of Life Science Computing Corporation, which was included in “IT
Consulting Business” in the previous consolidated fiscal year, is included in “Package andService Business” effective from the consolidated fiscal year under review, because cloudcomputing services of electronic medical records for clinics increased.
Segment information for the previous consolidated fiscal year was stated based on the newclassification of reportable segments.
b.

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

Information by product and service
Presentation is omitted since comparable information is disclosed in segment information.

2.
(1)

Information by region
Net sales
Presentation is omitted because sales to external customers in Japan accounted for over
90% of net sales shown in consolidated statements of income.

(2)

Property, plant and equipment
Presentation is omitted because the value of property, plant and equipment in Japanaccounted for over 90% of that of property, plant and equipment shown in consolidatedbalance sheets.

3.

Information by principal customer
Presentation is omitted because no external customer of the Company accounted for 10% ormore of net sales shown in consolidated statements of income.

Fiscal 2015 (from January 1, 2015 to December 31, 2015)
1.

Information by product and service
Presentation is omitted since comparable information is disclosed in segment information.

2.
(1)

Information by region
Net sales
Presentation is omitted because sales to external customers in Japan accounted for over
90% of net sales shown in consolidated statements of income.

(2)

Property, plant and equipment
Presentation is omitted because the value of property, plant and equipment in Japanaccounted for over 90% of that of property, plant and equipment shown in consolidatedbalance sheets.

3.

Information by principal customer(in thousands of yen)

Customer name
SG Systems Co., Ltd.

Net sales
3,614,314- 34 -

Related segment
IT Consulting Businessc.

Information on noncurrent asset impairment losses by reportable segment
Fiscal 2014 (from January 1, 2014 to December 31, 2014)(in thousands of yen)
Reportable segments
IT Consulting
Business

Package &ServiceBusiness

New Media& Web
ServiceBusiness

Corporate
Revitalization
Business

4,335

5,891

2,810

-

Impairment loss

Total

Other

13,037

Total-

Corporateor
elimination

Amountstated infinancialstatements-

13,037

13,037

Fiscal 2015 (from January 1, 2015 to December 31, 2015)(in thousands of yen)
Reportable segments
IT Consulting
Business

Impairment lossd.

Package &ServiceBusiness

2,368-

New Media& Web
ServiceBusiness

Corporate
Revitalization
Business-

158,978

Total

Other

161,347

Total-

Corporateor
elimination

Amountstated infinancialstatements-

161,347

161,347

Information on amortization and unamortized balance of goodwill by reportable segment
Fiscal 2014 (from January 1, 2014 to December 31, 2014)(Goodwill)(in thousands of yen)
Reportable segments
Corporateor
elimination

IT Consulting
Business

Package &ServiceBusiness

New Media& Web
ServiceBusiness

Corporate
Revitalization
Business

Amortization during theperiod46,17049,054

161,989-

257,213-257,213-257,213

Balance at the end of theperiod-321,986

575,224-

897,211-897,211-897,211

Total

Other

Total

Total

Fiscal 2015 (from January 1, 2015 to December 31, 2015)(Goodwill)(in thousands of yen)
Reportable segments
Corporateor
elimination

IT Consulting
Business

Package &ServiceBusiness

New Media& Web
ServiceBusiness

Corporate
Revitalization
Business

Amortization during theperiod-107,328

188,63038

295,998-

295,998-

295,998

Balance at the end of theperiod-214,657

754,175424

969,257-

969,257-

969,257

e.

Total

Other

Information on gain on bargain purchase by reportable segment
Fiscal 2014 (from January 1, 2014 to December 31, 2014)
Not applicable.
Fiscal 2015 (from January 1, 2015 to December 31, 2015)
Not applicable.

- 35 -

Total

Total

(Per share data)
Fiscal 2014
(from January 1, 2014 toDecember 31, 2014)
Net asset value per share
Net income per share
Net income per share (fully diluted)

Fiscal 2015
(from January 1, 2015 to
December 31, 2015)¥319.80¥49.75
Net income per share (fully diluted) is
not stated because the average stock
price during the period is below theexercise price of stock acquisitionrights and hence net income per shareis not diluted.

¥360.67¥59.52¥59.50-(Note) Net income per share and net income per share (fully diluted) is calculated based on the following:
Fiscal 2015
(from January 1, 2015 to
December 31, 2015)

Fiscal 2014
(from January 1, 2014 toDecember 31, 2014)
Net income per share
Net income (thousands of yen)

2,220,084

2,659,733

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

Net income attributable to commonshares (thousands of yen)

2,220,084

2,659,733

Average outstanding shares ofcommon stock during the period(shares)

44,623,200

44,689,236

Net income adjustment (thousandsof yen)--Increase in the number of common
stock (shares)-

11,411

Net income per share (fully diluted)

Latent shares that have no dilution
effect and thus are not included in thecalculation of diluted net income per
share

Stock options granted by resolution of
the Ordinary General Meeting of
Shareholders on March 24, 2005
(Stock acquisition rights: 556 units)
Common stock:
222,400 shares-(Significant subsequent events)
Not applicable.
(Omission of disclosure)Notes other than those mentioned above are omitted because the necessity of their disclosure in thesummary report of operating results is considered to be insignificant.

- 36 -

6.

Non-consolidated Financial Statements(1) Balance sheets(in thousands of yen)
Fiscal 2014
(December 31,2014)

Fiscal 2015
(December 31,2015)

AssetsCurrent assets
Cash and deposits
Notes receivable - trade
Accounts receivable - trade
Work in process
Prepaid expenses
Deferred tax assets
Accounts receivable - otherOther

6,211,656
3,995
3,417,649
140,652
345,383
187,265
1,498,505
44,037

7,051,723
3,307,571
357,535
108,373
1,491,045
12,391

Total current assets

11,849,146

12,328,640

258,196264,2995,430

217,865
238,080
5,430

527,926

461,376827
496,320
10,8102,006
377,065
10,810507,958

389,882

904,206
1,606,601-

896,025
1,530,088
24,9793,592,589

4,889,246

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

123,169
892,677
58,711(2,071,323)

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
Investments in capital 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 -

5,501,985

6,343,574

6,537,870

7,194,832

18,387,016

19,523,473

(in thousands of yen)
Fiscal 2014
(December 31,2014)

Fiscal 2015
(December 31,2015)

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

474,362
743,157601
1,057,455
432,269
262,461
189,065
189,351
78,500382,020447,369582
952,782
321,066
265,503
161,334
85,623-

Total current liabilities

3,427,224

2,616,282

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

1,000,000
276,792

1,000,000
277,118

Total non-current liabilities

1,276,792

1,277,118

4,704,017

3,893,401

Total liabilities
Net assets
Shareholders' equity
Capital stock
Capital surplus
Legal capital surplus
Other capital surplus

1,421,815

1,421,815

2,495,772-

2,495,772
11,990Total capital surplus

2,495,772

2,507,763

27,74827,748

11,244,825

13,138,996

11,272,573

13,166,745

Treasury shares(1,540,983)(1,499,428)

Total shareholders' equity

13,649,178

15,596,896

33,82133,17533,82133,175

13,682,999

15,630,071

18,387,016

19,523,473

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 -

(2) Non-consolidated statements of income(in thousands of yen)
Fiscal 2014
(from January 1, 2014
to December 31, 2014)

Fiscal 2015
(from January 1, 2015
to December 31, 2015)

Net sales
Cost of sales

19,727,334
12,241,460

19,017,880
10,926,176

Gross profit

7,485,873

8,091,704

Selling, general and administrative expenses

3,484,687

3,725,843

Operating income

4,001,186

4,365,861

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

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

27,566282,61226,2782,662

Total non-operating income

580,430

339,119

8,516
1,237

7,698
8,461
30,000172

Non-operating expenses
Interest expenses
Foreign exchange losses
Contributions
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of shares of subsidiaries and associates
Gain on sales of investment securities
Gain on sales of non-current assets
Total extraordinary income
Extraordinary losses
Provision of allowance for doubtful accounts
Loss on valuation of shares of subsidiaries and associates
Debt waiver loss from subsidiaries and associates

9,754

46,332

4,571,862

4,658,648

56,552

131,951
22,599-56,552

154,551

744,888
168,702
1,589

265,860
15,719-Total extraordinary losses

915,180

281,579

Income before income taxes

3,713,233

4,531,619

Income taxes - current
Income taxes - deferred

1,690,194(241,570)

1,464,624
257,268

Total income taxes

1,448,623

1,721,893

Net income

2,264,609

2,809,726- 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. 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 2014
(from January 1, 2014 toDecember 31, 2014)
AmountRatio (%)

Note

4,929,116
660,684

5,589,800

46.3

4,746,252
660,528

5,406,781

50.6

4,833,405

4,833,405

40.0

4,036,540

4,036,540

37.8

1,234,450

11.6

10,677,772

100.0

421,311
282,569
564,417
86,322

394,471
302,723
473,084
40,998

189,351(103,728)(95,100)(78,500)

202,946

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 2015
(from January 1, 2015 to
December 31, 2015)
AmountRatio (%)

1,651,818

13.7

12,075,024

100.0

205,399-

140,652

12,075,024

10,818,424

140,652-

15,422
11,918,949

2,217
10,816,207

735

-

-

-

321,776
322,511

109,969
109,969

-

-

-

-

322,511

109,969

12,241,460

10,926,176

Details of transfer to other accounts are as follows.
Fiscal 2014
(from January 1, 2014 to December 31,
2014)

Fiscal 2015
(from January 1, 2015 to December 31,
2015)

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

10,622

2,115

Other (thousand yen)

4,800

101

15,422

2,217

Item

Total (thousand yen)
2.

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

- 40 -7.

Other(1) Changes in Directors
Not applicable.
(2) Other
Orders received(in thousands of yen)
Fiscal 2014
(from January 1, 2014 toDecember 31, 2014)
Orders received

Fiscal 2015
(from January 1, 2015 to
December 31, 2015)

Order backlog

Orders received

Order backlog

IT Consulting Business

20,664,389

5,919,741

22,546,589

7,134,669

Package & Service Business

4,352,610

1,393,026

4,131,303

942,666

New Media & Web Service Business

305,382

12,891

374,083

69,607

Total

25,322,382

7,325,658

27,051,975

8,146,943(Notes) 1. Business segments were changed in the consolidated fiscal year under review, and the amounts for the previous
consolidated fiscal year were stated based on the new classification of reportable segments.
2. Orders received include adjustments for exchange rate fluctuations.

- 41 -