Consolidated Financial Results for the Fiscal Year ended March 31, 2010
(April 1, 2009 through March 31, 2010)
All financial information has been prepared in accord with accounting principles generally accepted in Japan. This is apartial English translation of the original Japanese-language document. All information pertains to consolidated results unlessotherwise noted. Information on the basis of presentation of consolidated financial statements does not appear in thistranslation.
May 11, 2010
Company name:
Stock exchange listings:
Stock code:
URL:
Representative:
Contact:
Phone:

IT Holdings Corporation
The First Section of the Tokyo Stock Exchange3626
http://www.itholdings.co.jp/e/Susumu Okamoto, President
Norio Maenishi, Vice President+81 3-6738-7557

Scheduled dates
Annual general shareholders’ meeting:
Submission of financial report:
Commencement of dividend payments:

June 24, 2010
June 25, 2010
June 25, 2010

Figures in millions of yen are rounded down to the nearest million
1. Consolidated Results for the Fiscal Year ended March 31, 2010 (April 1, 2009 – March 31, 2010)(1) Consolidated Financial Results

Percentages indicate year-over-year changes

Net sales
FY2010FY2009Operating income

Recurring profit

Net income

millions of yen%

millions of yen%

millions of yen%

millions of yen%

313,856
338,302(7.2)-

15,99623,787(32.8)-

15,71923,604(33.4)
-

7,659
9,406

(18.6)-Net income
per share – basic

Net income
per share – diluted

Return ofshareholders’ equity

Ratio of recurring
profit to total assets

yen

yen

%

%

Ratio of operating
income to net sales%

FY2010
89.25
5.7
5.2
FY2009110.74110.72
7.4
8.0
For reference:
Equity in earnings (losses) of affiliated companies: FY2010: (4) million yen FY 2009: (72) million yen.

5.1
7.0

(2) Consolidated Financial Position
Total assets

Net assets

millions of yen

End-FY2010
313,077
End-FY2009
295,327
For reference:
Shareholders’ equity: End-FY2010: 138,401 million yen

Equity ratio

Net assets per share

millions of yen%

yen

155,075
146,21644.2
44.4

1,602.77
1,541.17

End-FY2009: 131,054 million yen.

(3) Consolidated Cash Flows
Cash flows fromoperating activities
FY2010FY2009Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equipments
at the end of the period

millions of yen

millions of yen

millions of yen

millions of yen

31,40034,311(25,726)(20,079)

6,139(6,877)

46,98735,1041

2. Cash Dividends for Shareholders of Common Stock
Cash dividends per share
Record dateor period

End-Q1End-Q2End-Q3Year-end

yen

yen

yen

yen

Total dividends
paid(full year)

Total
yen

FY200932.00
32.00
FY2010
12.00
20.00
32.00
FY2011
12.00
20.00
32.00
(forecast)
Note: Breakdown of FY2010 year-end dividend: Commemorative dividend: 0.00 yen

Payout ratio(consolidated)

Dividends paid
to net assets(consolidated)

millions of yen

%

%

2,763
2,763

28.9
35.9

2.1
2.0

51.1

3. Forecast of Consolidated Results for FY2011 (April 1, 2010 – March 31, 2011)
Net sales

Operating income

Percentages indicate year-over-year changes
Net income per
Recurring profit
Net income
share – basic

millions of yen%

millions of yen%

millions of yen%

millions of yen%

yen

165,000

12.3

4,800

(17.3)

4,800(17.1)

800(75.1)

9.12

346,000

10.2

16,5003.2

16,0001.8

5,500(28.2)

62.67

First half of FY 2011
(six months ending Sep. 30,
2010)

Full FY2011(year ending Mar. 31, 2011)

4. Other(1) Material reclassifications of subsidiaries (scope of consolidation) during the period: Yes
Newly included: One (Sorun Corporation)
Excluded: One (Intec Holdings Limited)
Note: For details, see “2. Status of the Group” on page 6.
(2) Changes in accounting principles, procedures, presentation methods, etc., used in the preparation of consolidated financial
statements (information reported in “Changes in Basis of Presentation of Consolidated Financial Statements”)
1) Changes associated with changes to accounting standards: Yes
2) Changes other than the above: No(3) Issued shares of common stock
1) Period-end issued shares (including treasury stock):
End-FY2009 (March 31, 2009): 86,372,339 shares
End-FY2010 (March 31, 2010): 86,373,919 shares
2) Period-end treasury stock:
End-FY2009 (March 31, 2009): 1,337,013 shares
End-FY2010 (March 31, 2010): 22,813 shares

For reference:
1. Non-consolidated Results for the Fiscal Year ended March 31, 2010
(April 1, 2009 – March 31, 2010)(1) Non-consolidated Financial Results

Percentages indicate year-over-year changes

Net sales
FY2010FY2009Operating income

Net income

millions ofyen%millions ofyen%millions ofyen%millions of
yen

%

4,687
4,647

0.9
-

3,193
3,167

0.8
-

2,935
3,014

(2.6)
-

2,879
3,263

(11.8)-Net income
per share – basic
FY2010FY2009Recurring profit

Net income
per share – diluted
yen

yen

33.33
37.78

37.78

(2) Non-consolidated Financial Position
Total assets

Net assets

millions of yen

End-FY2010
157,999
End-FY2009
139,417
For reference:
Shareholders’ equity: End FY2010: 138,268 million yen

Equity ratio

Net assets per share

millions of yen%

yen

138,268
139,19087.5
99.8

1,601.03
1,611.69

End FY2009: 139,190 million yen.

Cautionary Statement on Forward-Looking Statements and Other Important Matters
This report contains forward-looking statements that reflect IT Holdings Corporation (ITHD)’s plans and expectations.
These forward-looking statements are not guarantees of future performance and involve known and unknown risks,
uncertainties and other factors that may cause ITHD’s actual results, performance, achievements or financial position to bematerially different from any future results, performance, achievements or financial position expressed or implied by theseforward-looking statements.
Refer to “1. Analysis of Results of Operations” in the “Results of Operations” on page 3,section for assumptions underlying
earnings forecasts and cautionary statements on the use of earnings forecasts.
2

1. Results of Operations(1) Analysis of Results of Operations
Results for fiscal 2010 (year ended March 31, 2010)
Japan’s economy exhibited signs of recovery in fiscal 2010 as exports and production picked up in the fiscal second
half, but the recovery’s endogenous momentum was lax, and corporate earnings failed to gain real traction.
The information services industry was again hard hit as customers remained cautious about and limited their IT
investment amid the economic slump and languishing corporate earnings. Figures from the Bank of Japan’s Short-term
Economic Survey of Enterprises in Japan, for example, indicate that firms are planning to significantly reduce theirsoftware investment versus fiscal 2009.
The IT Holdings group’s order bookings were heavily impacted by the curbing of IT investment, particularly byusers in the financial and manufacturing sectors, and caution about embarking on major system development projects.
Our group took various positive steps amid the current economic malaise. We implemented key measures based on a
growth strategy adapted to paradigm shifts in the information services industry. Specifically, we bolstered ourconsultative sales initiatives and made business model changes in line with technological innovations. At the same time,
we strived to cut costs as a matter of urgency.
Results of Sorun Corporation, which became a consolidated subsidiary in December 2009, were included in ourconsolidated results from the fiscal fourth quarter. Nevertheless, we booked consolidated net sales of ¥313,856 million
for fiscal 2010, down 7.2% versus fiscal 2009, owing to nonrecurrence major projects completed during fiscal 2009 andthe heavy impact of customers’ trimming of IT investment.
We endeavored to shore up profits through such means as stepping up efforts to handle more development in-houseand cutting expenses, but due to the impact of the sales decline, we booked operating profit of ¥15,996 million (down
32.8%), recurring profit of ¥15,719 million (down 33.4%), and net profit of ¥7,659 million (down 18.6%).
Following is a performance breakdown by segment.
1) Outsourcing and network segment
Although we received requests for lower prices from key customers, consolidated sales for fiscal 2010 totaled ¥126,164
million, up 0.4% versus fiscal 2009, reflecting Nexway Co., Ltd.’s and Sorun Corporation’s inclusion in ourconsolidated results.
2) Software development segment
Although Sorun Corporation was included in our consolidated results, consolidated sales totaled ¥155,976 million in
fiscal 2010, down 11.3% versus fiscal 2009, reflecting nonrecurrence of major projects completed in fiscal 2009 as wellas fierce competition for new projects in the face of IT investment cutbacks by customers.
3) Solution services segment
Consolidated sales totaled ¥25,021 million in fiscal 2010, down 14.9% versus fiscal 2009 as the economic downturn
continued to hamper demand for hardware.
4) Other businesses segment
Consolidated sales totaled 6,693 million yen in fiscal 2010, down 8.6% versus fiscal 2009.
In April 2009 we launched a new three-year management plan—IT Evolution 2011—which aims to cement ourgroup’s position at the forefront of the IT services industry.
In line with our medium-term group strategy, in December 2009, we acquired Sorun Corporation as a wholly owned
subsidiary in the aim of boosting our corporate value by pursuing synergies in technology and knowhow and thebenefits of larger scale.
One benefit of the larger scale we have been pursuing is reflected in our group companies’ joint order intake, whichrose from 29 projects (¥2.4 billion) in fiscal 2009 to 121 projects (¥5.4 billion) in fiscal 2010. Leveraging off of theaddition of Sorun Corporation to our group, we intend to accelerate this trend.
The information services industry is currently engulfed in a powerful tide of change, exemplified by the shift toward
cloud computing. We have been staying ahead of the curve and building next-generation data centers that can provide
high-value-added IT services. As a result, in 2010 we put data centers into operation in April in Tianjin (China) and in
August in Takaoka (Toyama Prefecture, Japan). As part of the expansion of our cloud services platform, we are using
individual group companies’ unique characteristics and accumulated knowhow to bolster our cloud services lineup.
In terms of our globalization initiatives, we continued to expand our overseas operations and explore new business
opportunities in the aim of capitalizing in fiscal 2011 on the effects of our strategic collaboration with BT.
We also continued working on other initiatives begun in fiscal 2009, such as increasing use of shared back-officeservices, information system integration projects, and optimization of group structure. Through these initiatives we are
striving to bolster the foundations and enhance the efficiency of group operations, and we intend to continue
implementing such initiatives to improve our corporate value.

3

Forecast for fiscal 2011 (year ending March 31, 2011)
We expect the operating environment to remain inclement for the time being, but we intend to improve performancethrough various measures. Specifically, we will ensure that all operating companies cooperate with each other as agroup and generate synergies, and we will strengthen our operating structure and implement business initiatives toappropriately capture IT investment demand stemming from the economic recovery primarily from the fiscal second
half.
The forecast for net income incorporates the impact of an extraordinary loss of ¥2.2 billion related to asset removal
liabilities.
Our consolidated earnings forecasts for fiscal 2011 are as follows.
Net sales¥346,000 million (+10.2% year on year)
Operating income¥16,500 million (+3.2% year on year)
Recurring profit¥16,000 million (+1.8% year on year)
Net income¥5,500 million (–28.2% year on year)
The above performance forecasts reflect management judgment based on currently available information. Actual
results may differ from these forecasts due to various factors.
(2) Analysis of Financial Condition
1) Asset, liabilities, and net assets
Consolidated assets totaled ¥313,077 million yen at the end of the fiscal year (March 31, 2010). Of the total, current
assets accounted for ¥141,967 million, and fixed assets, ¥171,109 million.
Liabilities totaled ¥158,001 million. Net assets were ¥155,075 million, of which minority interests accounted for¥16,654 million.
2) Cash flow
Cash and cash equivalents (“cash”) totaled ¥46,987 million as of March 31, 2010, up ¥11,883 versus the end of theprevious fiscal year (March 31, 2009).
Contributions to cash flow were as follows.
Cash flow from operating activities
Operating activities generated net cash of ¥31,400 million.
This mainly reflects income before income taxes and minority interests of ¥13,991 million, and the positive cash
flow effect of ¥11,978 million in depreciation, ¥2,083 million in impairment losses, and a ¥5,908 million decrease innotes and accounts receivable, which were partly offset by a ¥5,949 million decrease in notes and accounts payable and¥4,126 million in income tax payments.
Cash flow from investing activities
Investing activities used net cash of ¥25,726 million.
The main additive effect came from ¥1,333 million in proceeds from the sale and redemption of investment
securities. This was offset by negative contributions from ¥9,843 million in payments for the acquisition of property andequipment, ¥5,259 million for the acquisition of intangible assets, and ¥10,917 million for the acquisition of newly
consolidated subsidiaries.
Cash flow from financing activities
Financing activities generated net cash of ¥6,139 million.
The main contributions came from ¥15,800 million in proceeds from long-term debt and a net increase of ¥15,505
million in short-term borrowings, which were partly offset by ¥15,941 million in repayments on long-term debt and¥5,100 million in payments due to bond redemptions.
For reference: Cash flow indicators
Fiscal 2009 Fiscal 2010
Equity ratio (%)
44.4
44.2
Equity ratio based on market capitalization (%)
32.6
31.4
Ratio of interest-bearing debt to cash flow (years)
2.3
3.1
Interest-coverage ratio (times)
31.1
29.2
Equity ratio: Shareholders’ equity / Total assets
Equity ratio at market value: Market capitalization / Total assets
Ratio of interest-bearing debt to cash flow: Interest-bearing debt / Cash flow
Interest-coverage ratio: Cash flow / Interest paid

4

Notes:1. All indicators were calculated using consolidated financial statement data.
2. Market capitalization is based on the number of shares issued and outstanding (net of treasury stock).
3. Cash flow from operating activities is used as the cash flow variable.
4. “Interest-bearing debt” is all debt on the consolidated balance sheet on which interest in payable.
(3) Basic policy on profit distribution and dividends for fiscal 2010 and fiscal 2011
IT Holdings aims to maintain a stable dividend while striking a balance between our key objective of rewarding
shareholders for their long-term investments and the need to secure sufficient internal reserves to fund continued growthand maintain a sound financial base.
We paid an interim dividend of ¥12 per share for fiscal 2010. We intend to pay a year-end dividend of ¥20 per share.
For fiscal 2011, we plan to pay an annual dividend of ¥32 per share of which the interim dividend will account for¥12 yen.

5

2. Status of the GroupThe group consists of IT Holdings Corporation (the parent company), 55 consolidated subsidiaries, and 13 affiliatedcompanies accounted for under the equity method. The group’s core activities are divided into the outsourcing andnetwork segment, the software development segment, and the solution services segment, and the group also engages inbusinesses connected with these core activities. The group also provides other services, such as real estate rental andmanagement services. As a pure holding company, IT Holdings handles business administration issues for the groupand supports group companies in executing their respective business activities, which center on information andcommunication services.

63. Management Policy(1) Basic Management Policy
IT Holdings has established, and discloses, the following management philosophy, the corporate cornerstone of the IT
Holdings group.
Management Philosophy
The IT Holdings group seeks to be a corporate citizen, whose activities, namely, the provision of various
services maximizing the power of information technology, match its status as a leading corporate group, andas a group, we will raise corporate value, supported in this effort by the high regard of all stakeholders, notonly shareholders but also clients as well as employees and their families.
We will cultivate a vibrant corporate culture that encourages companies and individuals under the groupumbrella to work together, embracing new challenges and striving to reach higher goals, and thereby ensure
continued growth as a corporate entity.
We will always provide our clients with the very best, through excellent quality and technology built on
the composite strengths of the group.
We will uphold high corporate morals and fulfill our social obligations.
(2) Key Business Indicators
Amid dramatic business environment changes, such as a trend toward more complex and larger-scale systems, the riseof service-oriented approaches, ongoing globalization, and rapidly advancing technology innovation, the IT Holdings
group, a leading IT services group, endeavors to play an integral role in creating an abundant future for society.
(3) Medium- to Long-term Management Strategies
Management has defined the corporate image—the vision—that the group should strive to achieve.
Everyone under the group umbrella shares this vision. It guides each person in the execution of daily activities, which inturn underpins attainment of the ideals to which the group aspires and further enhances corporate value.
Group Vision
1. Play an integral role in realizing the comfortable lifestyles of tomorrow through IT
As the leading IT services group, we will design the template and develop the businesses that support several
facets of tomorrow’s society—where IT is the driving force of brisk activity in all industries as well as thecreation of pleasant living environments where people feel safe and secure.
2. Act with initiative and a sense of enterprising spirit
We will be a group with a corporate culture that makes work enjoyable for employees. This atmosphere willencourage people to quickly pinpoint currents of change rippling across various realms, including society andtechnology, and resourcefully tackle emerging issues from a fresh perspective.
3. Secure the highest level of technological expertise
We will be a group that is constantly evolving, with an emphasis on new-technology R&D, production
techniques and quality control, to achieve the highest level of quality and sharpen cost competitiveness.
4. Contribute to societal and industry advances
As part of the IT services industry, we will be a group that plays a pioneering role in the overall developmentof our industry, and as a member of society, we will be a group that faithfully carries out our social
responsibility and contributes to the communities in which we share a presence. This two-fold commitment
will earn us a solid reputation from all directions.
(4) Issues Requiring a Response
Large-scale changes in the economic environment ongoing since 2008 have affected many of our customers.
Even as of the start of fiscal 2011, the economy has yet to gain exogenous momentum. However, there are signsof recovery in IT investment at some manufacturers, financial agencies, and distribution service businesses.
Faced with tough business conditions but eager to realize our corporate vision, we embarked on our first
medium-term management plan—IT Evolution 2011—in April 2009. This three-year blueprint of strategies forreaching targets describes the corporate image that will define the group by March 2012 and outlines sevenmedium-term management policies that will cement the group’s position at the forefront of the IT services
industry.
Desired Group Image
A constantly evolving IT business group that promotes the unique qualities of each company under the groupumbrella while demonstrating the composite strength that the group structure provides to maintain a sharply
competitive edge in terms of quality, reliability, technologies and pricing.
Medium-term Management Policies
71. Foster individuality of group companies while demonstrating the comprehensive strengths afforded by agroup structure, and expand the scope of business activities
Together, the companies under the group umbrella will enhance corporate characteristics and capabilities,
generating synergies that exceed the simple sum of the contributing elements.
2. Pursue business activities underpinned by client trust.
We will seek to become a partner in value creation, one that contributes directly to the success of our clients’business pursuits and plays an integral role in expanding the scope of their business activities.
3. Actively restructure production platform and create new businesses
We will revamp production and system operation platforms. We will also link R&D activities with businessactivities to develop new businesses and carve out new markets.
4. Promote management efficiency as a group
We will press ahead with broad optimization of service-related processes throughout the group, promoteshared services for back-office operations, centralized administrative functions, such as purchasing, higher
operating efficiency through joint use of group assets, and integration of information systems, and curb costs.
5. Reinforce financial standing of the group
We will strengthen our fund-raising capabilities with a solid assessment from the market and achieve afinancial footing that can stand firm against mega-investment and concentrated investment efforts.
6. Promote human resources policy designed to foster corporate growth and motivate employees
We will promote measures designed to foster corporate growth and motivate employees while ensuringconsistency among group companies in the content of respective personnel systems.
7. Foster a corporate culture that permeates the whole group.
We will always consider things from a client’s perspective, and when a request or an issue requires the
response of more than one group company, we will work together to address the challenge with a “One forall. All for one.” spirit.
(5) Other Important Management Issues
At the board meeting held on November 10, 2009, IT Holdings decided to acquire shares of Sorun Corporation
via a tender offer. The tender offer was completed on December 15, 2009, and Sorun Corporation became aconsolidated subsidiary effective December 22, 2009.
At their respective board meetings held on January 12, 2010, IT Holdings and Sorun Corporation decided to
conduct a share exchange that would make Sorun Corporation a wholly owned subsidiary of IT Holdings (i.e.,
make IT Holdings Sorun’s parent) effective April 1, 2010. The two companies entered into an agreement dated
that day (January 21, 2010). As a result of the share exchange, Sorun Corporation became IT Holding’s wholly
owned subsidiary effective April 1, 2010.

8

4. Consolidated Financial Results for the Fiscal Year ended March 31, 2010
(1) Consolidated Balance Sheets
As of Mar. 31, 2009
Items
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable
Lease receivables and lease investment assets
Marketable securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property and equipment
Buildings and structures, net
Machinery and equipment, net
Land
Leased assets, net
Other property and equipment, net
Total property and equipment
Intangible assets
Goodwill
Other intangible assets
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets

9

As of Mar. 31, 2010

millions of yen

millions of yen

37,52462,862
7,274
1,501
2,799
11,579234
11,0756,203(255)
140,799

47,19262,619
7,590
321
1,914
7,121
227
8,527
6,649
(197)
141,967

53,278
5,799
21,925
1,235
6,809
89,04852,331
4,851
22,6302,476
9,709
91,9994,839
10,162
15,001

6,741
12,388
19,13026,904
6,762
19,489(2,678)50,477
154,527
295,327

34,593
6,994
21,171(2,779)59,980171,109
313,077

As of Mar. 31, 2009

Items
Liabilities
Current liabilities
Notes and accounts payable
Short-term borrowings
Corporate bonds (redeemed within one year)
Income taxes payable
Accrued bonuses to directors and employees
Other allowances
Other current liabilities
Total current liabilities
Non-current liabilities
Corporate bonds
Long-tern debt
Lease obligations
Deferred tax liabilities
Deferred tax liabilities from revaluation of land
Accrued retirement benefits to employees
Accrued retirement benefits to directors
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Valuation and translation adjustments
Net unrealized gains on other securities
Revaluation of land
Foreign currency translation adjustments
Total valuation and translation adjustments
Stock acquisition rights
Minority interests
Total net assets
Total liabilities and net assets

10

As of Mar. 31, 2010

millions of yen

millions of yen

18,626
22,919
5,100
3,390
9,830
71
22,112
82,051

14,95334,8954,000
2,114
10,820374
19,097
86,255

11,50041,013
2,549
682
993
8,113
248
1,958
67,058149,110

7,600
45,151
3,914
694
993
10,672470
2,250
71,746
158,001

10,00086,32140,186(2,354)
134,153

10,001
85,20744,088(57)
139,239(1,118)(1,841)(139)(3,098)815,154
146,216
295,327

1,182(1,841)
(178)
(837)
18
16,654
155,075
313,077

(2) Consolidated Statements of Income
FY2009Items
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividends income
Amortization of negative goodwill
Rental income from real estate
Facilities expenses refund
Other
Total non-operating income
Non-operating expenses
Interest expenses
Equity in losses of non-consolidated subsidiaries andaffiliates
Other
Total non-operating expenses
Recurring profit
Extraordinary income
Gain on sale of investment securities
Gain on liquidation of subsidiaries
Reversal of allowance for doubtful accounts
Insurance premium refund upon cancellation
Other
Total extraordinary income
Extraordinary loss
Loss on sale of fixed assets
Loss on disposal of fixed assets
Impairment loss
Valuation loss on investment securities
Other
Total extraordinary loss
Income before income taxes and minority interests
Income taxes: current
Income taxes: deferred
Total income taxes
Minority interests in earnings of consolidated subsidiaries
Net income

11

FY2010

millions of yen

millions of yen

338,302272,944
65,357
41,56923,787

313,856
254,82759,02943,032
15,996

66
541
958
297
326
2,189

75
532
88
302
172
503
1,674

1,130

1,057

72

4

1,169
2,372
23,604889
1,951
15,719

20
54
57
30
162

1,116
91
99
1,307

421
433
896
2,228
502
4,483
19,284
4,911
3,380
8,291
1,586
9,406

12
621
2,083
175
142
3,035
13,991
2,774
2,976
5,751
580
7,659

(3) Consolidated Statements of Changes in Net Assets
FY2009

Items
Shareholders’ equity
Common stock
Balance at end of previous fiscal year
Changes during the fiscal year
Issuance of new shares
Net changes during the fiscal year
Balance at end of fiscal year
Additional paid-in capital
Balance at end of previous fiscal year
Changes during the fiscal year
Issuance of new shares
Disposal of treasury stock
Net changes during the fiscal year
Balance at end of fiscal year
Retained earnings
Balance at end of previous fiscal year
Changes during the fiscal year
Dividends from surplus
Net income
Effect of change in scope of application of the equity
methodReclassification due to revaluation of land
Net changes during the fiscal year
Balance at end of fiscal year
Treasury stock
Balance at end of previous fiscal year
Changes during the fiscal year
Acquisition of treasury stock
Disposal of treasury stock
Net changes during the fiscal year
Balance at end of fiscal year
Total shareholders’ equity
Balance at end of previous fiscal year
Changes during the fiscal year
Issuance of new shares
Dividends from surplus
Net income
Acquisition of treasury stock
Disposal of treasury stock
Effect of change in scope of application of the equity
methodReclassification due to revaluation of land
Net changes during the fiscal year
Balance at end of fiscal year

12

FY2010

millions of yen

millions of yen

10,00010,00010,0001
1
10,001

86,331

86,321(10)(10)
86,3211(1,114)(1,113)85,20733,08240,186(1,219)9,406(3,757)
7,659

(1)

-

(1,080)7,103
40,186

3,902
44,088(2,827)(2,354)

(20)
492
472
(2,354)

(4)
2,300
2,296
(57)

126,586

134,153(1,219)
9,406
(20)
482

2
(3,757)
7,659
(4)
1,185

(1)

-

(1,080)7,566
134,153

5,086
139,239

FY2009

Items
Valuation and translation adjustments
Net unrealized gains on other securities
Balance at end of previous fiscal year
Changes during the fiscal year
Items other than changes in shareholders’ equity, net
Net changes during the fiscal year
Balance at end of fiscal year
Revaluation of land
Balance at end of previous fiscal year
Changes during the fiscal year
Items other than changes in shareholders’ equity, net
Net changes during the fiscal year
Balance at end of fiscal year
Foreign currency translation adjustments
Balance at end of previous fiscal year
Changes during the fiscal year
Items other than changes in shareholders’ equity, net
Net changes during the fiscal year
Balance at end of fiscal year
Total valuation and translation adjustments
Balance at end of previous fiscal year
Changes during the fiscal year
Items other than changes in shareholders’ equity, net
Net changes during the fiscal year
Balance at end of fiscal year
Stock acquisition rights
Balance at end of previous fiscal year
Changes during the fiscal year
Items other than changes in shareholders’ equity, net
Net changes during the fiscal year
Balance at end of fiscal year
Minority interests
Balance at end of previous fiscal year
Changes during the fiscal year
Items other than changes in shareholders’ equity, net
Net changes during the fiscal year
Balance at end of fiscal year
Total net assets
Balance at end of previous fiscal year
Changes during the fiscal year
Issuance of new shares
Dividends from surplus
Net income
Acquisition of treasury stock
Disposal of treasury stock
Effect of change in scope of application of the equity
methodReclassification due to revaluation of land
Items other than changes in shareholders’ equity, net
Net changes during the fiscal year
Balance at end of fiscal year

13

FY2010

millions of yen

millions of yen

1,150(1,118)(2,268)(2,268)(1,118)

2,300
2,300
1,182

(2,922)(1,841)

1,080
1,080
(1,841)(1,841)

(18)

(139)

(120)
(120)
(139)

(39)
(39)
(178)

(1,790)(3,098)(1,308)(1,308)(3,098)

2,260
2,260
(837)

0

8

7
7
8

10
10
18

14,16415,154989
989
15,1541,500
1,500
16,654

138,961

146,216(1,219)
9,406
(20)
482

2
(3,757)
7,659
(4)
1,185

(1)

-

(1,080)(311)
7,255
146,216

3,772
8,858
155,075

(4) Consolidated Statement of Cash FlowsFY2009Items
Cash flows from operating activities
Income before income taxes and minority interests
Depreciation
Impairment loss
Loss on disposal of fixed assets
Valuation (gain) loss on investment securities
Amortization of goodwill
Increase (decrease) in accrued bonuses to directors andemployees
Increase(decrease) in allowance for doubtful accounts
Increase (decrease) in accrued retirement benefits toemployees
Interest and dividend income
Interest expenses(Increase) decrease in notes and accounts receivable(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable
Others, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

FY2010

millions of yen

millions of yen

19,284
10,996
896
433
2,228
1,149

13,991
11,978
2,083
621
134
1,389

2,642

534

448

(74)

636

851

(607)
1,130
2,294
1,221
(3,070)2,369
42,054615(1,131)(7,226)34,311

(608)
1,057
5,908
8,173
(5,949)(4,097)35,996605(1,074)(4,126)
31,400(2,432)(9,974)(3,488)(1,193)
1,191(3,147)(1,553)
4,374(9,843)(5,259)(4,225)
1,333(10,917)

Cash flows from investing activities
Payments for deposit of time deposits
Withdrawals from time deposits
Acquisitions of property and equipment
Acquisitions of intangible assets
Acquisitions of investment securities
Proceeds from sale and redemption of investment securities
Acquisitions of newly consolidated subsidiaries
Proceeds from acquisitions of newly consolidated
subsidiaries
Other, net
Net cash provided by (used in) investing activities

458-(1,492)(20,079)363(25,726)

Cash flows from financing activities
Increase (decrease) in short-term borrowings, net
Proceeds from long-term debt
Repayments of long-term debt
Redemption of bonds
Acquisition of treasury stock, net
Disposal of treasury stock, net
Dividends paid
Dividends paid to minority shareholders
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents resulting from merger
Cash and cash equivalents at end of year

(3,989)21,788(17,017)(7,050)(20)
482(1,220)(335)
484(6,877)(243)
7,110
27,99435,104

15,50515,800(15,941)(5,100)(4)
1,185(3,757)
(969)
(578)
6,139
11
11,82435,10458
46,987(5) Notes on the Going-concern Assumption
Not applicable14