May 10, 2018

Summary of Consolidated Financial Results for the Year Ended March 31, 2018
Company name:
Stock listing:Code number:President:
For inquiries, please contact:Tel:

SRA Holdings, Inc. (URL: http://www.sra-hd.co.jp/)
Tokyo Stock Exchange

3817
Toru Kashima
Toshiaki Kobayashi, General Manager, Finance Department, Administrative Headquarters(03)-5979-2666
Date of ordinary general meeting of shareholders:June 22, 2018
Scheduled commencement of dividend payment:
June 7, 2018
Scheduled date of submission of financial reports:
June 22, 2018
Results Supplement Materials: Yes
Results Presentation Meeting : Yes (for institutional investors)

1. Consolidated Financial Results for Fiscal 2018(from April 1, 2017 to March 31, 2018)(1) Consolidated Operating Results(All amounts rounded down, % change YoY)Net Sales

Fiscal 2018
Fiscal 2017

Operating Income

Ordinary Profit

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

39,41039,142

0.7
(0.0)

4,175
4,180

(0.1)
11.9

4,762
4,211

(13.1)
9.4

2,060
2,646

(22.2)
470.8

Note : Comprehensive Income
Fiscal 2018: ¥2,772million (72.0％)
Fiscal 2017: ¥1,612million (111.6％)
Net Income
per Share

Yen

Ratio of Net Income
to Shareholders’Equity%167.12216.8810.0
13.8

Net Income per Shareafter Dilution

Yen
Fiscal 2018168.07
Fiscal 2017
218.00
Reference: Gain (loss) on equity method investments:
Fiscal 2018: ¥687 million
Fiscal 2017: ¥(80) million

Ratio of Ordinary
Profit to Total Assets

Ordinary Profit
Ratio

%

%

13.1
12.6

10.6
10.7

(2) Consolidated Financial Position
Millions of yen%

Shareholders’ Equity
per ShareYen

21,43819,67456.6
56.5

1,737.59
1,609.33

Cash Flows fromOperating Activities

Cash Flows from
Investing Activities

Cash Flows from
Financing Activities

Cash and Cash Equivalents
at the End of Period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

2,565
3,900

(760)
(5,636)(1,047)
(772)

7,018
6,265

Total Assets

Net Assets

Millions of yen
Fiscal 201837,756
Fiscal 201734,781
Reference: Shareholders’ equity
Fiscal 2018: ¥21,379 million
Fiscal 2017: ¥19,640 million

Shareholders’ Equity Ratio(3) Consolidated Cash Flows

Fiscal 2018
Fiscal 2017

2. Dividends
Dividend per Share
End ofFirst
Quarter
Fiscal 2017
Fiscal 2018

End ofSecondQuarter

End ofThird
QuarterYear-end

For theyear

Total
Dividends(for the year)

Dividend
Propensity(consolidated)

Net Assets to
Dividend
Ratio(consolidated)

Yen

Yen

Yen

Yen

Yen

Millions of yen

%

%

－
－
－

30.00
40.00
40.00

－
－
－

60.00
70.00
65.00

90.00
110.00105.00

1,096
1,351

41.3
65.4
46.1

5.7
6.6

Fiscal 2019(forecast)
Note : 70 yen of year-end dividend for FY 2018 includes 10 yen of memorial dividend for the 50th anniversary of business establishment,
and 65 yen of year-end dividend for FY 2019.
1

3. Consolidated Earnings Forecast for Fiscal 2019 (from April 1, 2018 to March 31, 2019)

Net Sales（% change YoY is for the fiscal year or for interim period）
Profit attributable to owners Net Income
Ordinary Profit
per Shareof the parent

Operating Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

19,00040,000

(5.0)
1.5

1,850
4,400

4.6
5.4

1,850
4,400

6.5
(7.6)

1,200
2,800

4.0
35.9

97.53
227.56

Interim Period
Full Year

4. Others(1) Changes to significant subsidiaries during the current period :No(2) Changes in accounting principles, changes in accounting estimates, and restatements
1. Changes caused by revision of accounting standards, etc. :No
2. Changes other than 1. above:No
3. Changes in accounting estimates:
No
4. Restatements:
No(3) Number of outstanding shares (common shares)
1. Shares issued at the end of term (including own shares)
Fiscal 2018: 15,240,000 sharesFiscal 2017: 15,240,000 shares
2. Own shares at end of term
Fiscal 2018: 2,935,755 sharesFiscal 2017: 3,036,175 shares
3. Average number of shares over period
Fiscal 2018: 12,257,719 sharesFiscal 2017: 12,141,210 shares（Reference）Non-Consolidated Financial Results for Fiscal 2018
(1) Non-Consolidated Operating Results
Net Sales

Fiscal 2018
Fiscal 2017

Operating Income(% change YoY)
Ordinary Profit

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

1,995
288

592.7
12.1

1,720
47

21.9

1,700
27

24.3

1,631
13

-

Net Income
per Share
Fiscal 2018
Fiscal 2017(from April 1, 2017 to March 31, 2018)

Net Income per Shareafter Dilution

Yen

Yen

121.301.05

120.67
1.04(2) Non-Consolidated Financial Position
Total Assets

Net Assets

Millions of yen

Millions of yen

9,061
8,168
8,799
7,678
Reference: Shareholders’ equity:
Fiscal 2018: ¥ 8,109 million
Fiscal 2017: ¥ 7,644 million
Fiscal 2018
Fiscal 2017%

Shareholders’ Equity
per Share
Yen

89.5
86.9

600.97570.76

Shareholders’ Equity Ratio*This earnings release is not subject to the quarterly review process as required by the Financial Instruments and Exchange Act of Japan.
*Explanation relating to the appropriate use of results forecasts, and other noteworthy items
Forward-looking statements in this earnings release, such as forecasts of results of operations, are based on the information currently
available and the certain assumptions that we regard as reasonable and therefore actual results may differ materially from those containedin or suggested by any forward-looking statements.

2

Summary of Consolidated Financial Results for the Year Ended March 31, 2018

1.

Analysis of Business Results and Financial Position(1) Summary of Business Results
During the fiscal year (April 1, 2017 to March 31, 2018), the Japanese economy continued a moderate recovery overall
amid a visible pickup in capital investment and an improvement in corporate earnings. In the information services
industry, despite an increase in IT investments, mainly in manufacturing industries, the environment for securing orders
remained severe due to intensifying competition.
Within this business environment, the SRA Holdings Group implemented the following measures during the thirdyear of its Medium-Term Management Strategy.
1) Improving profitability in existing operations• Further raise the gross profit margin
We worked to raise profitability by enhancing and strengthening project management, continuously reduce production
overhead costs, promote SRA’s proprietary IP product business and achieve the appropriate level of production staff.
As a result, the gross profit margin reached an all-time high of 21.6%.
• Improve the SG&A expenses-to-sales ratio
We strived to raise operation efficiency by introducing an account manager system while making efforts to reduce
operational costs of Head Office staff departments and SRA Professional Service, Co., Ltd., which handles a sharedservice. Nevertheless, sales administrative expenses increased due to investments to establish organizations forpromoting new businesses and to raise the corporate value of overseas consolidated subsidiaries.
• Raise operating income ratio
The operating income ratio, at 10.6%, was maintained at a high level similar to that of the previous fiscal year.
• Expand orders and sales volume
Despite a decline in device sales by Advanced Integration Technology, Inc., we focused on increasing customer shareof wallet by deeply cultivating existing customers and securing new customers in growth fields as we worked to
expand orders and sales. As a result, sales increased 0.7% from the previous fiscal year.

2) Strengthening linkages between SRA’s proprietary IP product business and overseas operations
and transforming the SRA business model
We expanded and upgraded the line of SRA’s proprietary IP products for growth fields as well as promoted businessthat targets overseas markets, which are growth markets. This included commencing the provision of a new mobile
service for trust banks utilizing the SRA Group’s technologies and business know-how in the financial field and thetechnological superiority of Tagit Pte. Ltd., with which we concluded business and capital alliances in April 2016, inthe mobile banking market in Asia.
Due to the above initiatives, our consolidated business results for the fiscal year were as follows.
Despite a decrease in sales of the Product Sales business, sales of the Systems Development business and the
System Operations and Infrastructure Development business increased. As a result, consolidated net sales amounted
to ¥39,410 million, an increase of 0.7% from the previous fiscal year.

3Summary of Consolidated Financial Results for the Year Ended March 31, 2018

At the profit level, despite an increase in gross profit resulting from measures to improve the gross profit margin,
operating income decreased 0.1% from the previous year to ¥4,175 million due to an increase in sales administrative
expenses. Ordinary profit increased 13.1% from the previous fiscal year to ¥4,762 million due to the recording of
non-operating income (transitory income by an equity method affiliate) and profit attributable to owners of the parent
decreased 22.2% from the previous fiscal year to ¥2,060 million due to the recording of an extraordinary loss (a loss
on litigation).
As detailed above, consolidated net sales increased from the previous fiscal year, operating income remainedlevel, ordinary profit increased and profit attributable to owners of the parent decreased from the previous fiscal year.
Additionally, operating income, ordinary profit and profit attributable to owners of the parent all exceeded thefull-year forecast.
Regarding dividends for the fiscal year ended March 31, 2018, to enhance the redistribution of profits toshareholders, the Company will pay year-end cash dividends per share of ¥70.00 (includes a 50th anniversarycommemorative dividend of ¥10.00) and full-year dividends per share of ¥110.00 (consisting of ordinary cash
dividends per share of ¥100.00 and a 50th anniversary commemorative dividend of ¥10.00 for a total ¥20.00 increasein dividends, with a consolidated payout ratio of 65.4%).
Consolidated Business Results(Millions of Yen)FY2018FY2014FY2015FY2016FY2017

Most recent forecast
figures(announced
December 27, 2017)

ActualNet sales

35,14636,535

39,155

39,14240,50039,410Operating income

2,807

3,047

3,736

4,180

4,155

4,175

Ordinary profit

3,324

3,813

3,850

4,211

4,155

4,762

Net income

2,134

1,638

463

2,646

1,779

2,060

A summary of consolidated business results for the fiscal year by business segment is shown below.
● Systems Development
The Systems Development business recorded increases in sales to some manufacturing industries as well as to banks
and service industries. As a result, net sales increased 5.5% from the previous fiscal year to ¥21,843 million.
● System Operations and Infrastructure Development
University-related orders and orders from companies both increased. As a result, net sales of the System Operations
and Infrastructure Development business increased 5.4% from the previous fiscal year to ¥4,640 million.
● Product Sales
Device sales by Advanced Integration Technology, Inc. decreased. As a result, net sales of the Product Sales businessdecreased 7.9% from the previous fiscal year to ¥12,926 million.
(2) Summary of Financial Position
Total assets at the end of the fiscal year amounted to ¥37,756 million, an increase of 8.6% from the end of the previous
fiscal year. Total liabilities increased 8.0% from the end of the previous fiscal year to ¥16,317 million and net assets
increased 9.0% to ¥21,438 million from the end of the previous fiscal year. Details of the principal increases anddecreases from the end of the previous fiscal year are as follows.
4Summary of Consolidated Financial Results for the Year Ended March 31, 2018

(Total Assets)
Investment securities increased ¥1,623 million to ¥9,353 million due to the purchase of shares of an affiliatedcompany. Long-term loans receivable increased ¥231 million to ¥3,179 million due to an increase in loans. On theother hand, notes and accounts receivable—trade decreased ¥481 million to ¥6,932 million due to the collection of
trade receivables.
(Total Liabilities)
Provision for loss on litigation of ¥1,198 million was recorded. On the other hand, accounts payable—trade decreased¥371 million to ¥2,871 million due to an increase in the payment of trade payables.
(Total Net Assets)
Retained earnings increased ¥837 million to ¥17,364 million. Valuation difference on available-for-sale securities
increased ¥550 million to ¥654 million due to changes in the market prices of short-term investment securities andinvestment securities.
(3) Summary of Cash Flows
Cash and cash equivalents on a consolidated basis at the end of the fiscal year increased ¥752 million compared withthe previous fiscal year-end to ¥7,018 million.
The status of cash flows and factors underlying changes in cash flows for the fiscal year are shown below.
Cash Flows from Operating Activities
Net cash provided by operating activities amounted to ¥2,565 million compared with ¥3,900 million in the previous
fiscal year. This consisted mainly of such cash inflows as income before income taxes and minority interests of¥3,146 million and an increase in provision for loss on litigation of ¥1,198 million, while cash outflows wereprimarily income taxes paid of ¥1,978 million.
Cash Flows from Investing Activities
Net cash used in investing amounted to ¥760 million compared with net cash used in investing activities of ¥5,636
million in the previous fiscal year. This consisted mainly of such inflows as ¥1,308 million in proceeds from sales ofinvestment securities and ¥1,020 million in collection of loans receivable, while outflows included ¥1,446 million for
payments of loans receivable and ¥932 million for the purchase of investment securities.
Cash Flows from Financing Activities
Net cash used in financing activities amounted to ¥1,047 million compared with ¥772 million in the previous fiscal
year. This was due mainly to such cash inflows as ¥172 million in proceeds from exercise of stock option and such cash
outflows as ¥1,222 million in cash dividends paid.
Cash Flow Indicators
FY 2016

FY2017FY2018

Shareholders’ equity ratio (%)
Shareholders’ equity ratio at market value (%)

59.0

56.5

56.6

98.7

103.3

99.6

Debt redemption years to cash flow (years)

0.3

0.3

0.5

117.2

101.7

67.0

Interest coverage ratio (times)
5

Summary of Consolidated Financial Results for the Year Ended March 31, 2018

Notes:
Shareholders’ equity ratio: Shareholders’ equity/total assets
Shareholders’ equity ratio at market value: Market capitalization/total assets
Debt redemption years to cash flow: Interest-bearing debt/operating cash flow
Interest coverage ratio: Operating cash flow/interest expenses
1. All indicators were calculated using consolidated financial figures.
2. Market capitalization is calculated using the total number of shares outstanding at the end of the fiscal period
excluding treasury stock.
3. Cash flows from operating activities is used for cash flow.
4. Interest-bearing debt includes all debt that pays interest as listed on the Consolidated Balance Sheets.

(4) Future Outlook
In the next fiscal year, the Japanese economy is expected to continue a modest recovery due in part to the effects ofvarious policies amid ongoing improvements in the employment and income environments. Nevertheless, uncertainties
in overseas economies and the impact of fluctuations in financial and capital markets require close monitoring. Under
these conditions, the SRA Holdings Group will continue working to achieve sustainable growth and improve
profitability in existing operations, establish a high-earnings model by leveraging its proprietary IP products andservices, and promote its overseas business.
We will proactively proceed with various considerations toward raising corporate value for the overseas business
investments already undertaken.
Furthermore, we will extend the period of the Medium-Term Management Strategy that was announced in June
2015. We aim to attain the goals of the Medium-Term Management Strategy and with regards to the outlook forconsolidated results for the fiscal year ending March 31, 2019, we forecast net sales of ¥40,000 million, operating
income of ¥4,400 million, ordinary profit of ¥4,400 million and profit attributable to owners of the parent of ¥2,800
million.
Regarding dividends for the fiscal year ending March 31, 2019, we plan to increase ordinary dividends per shareby ¥5.00 and pay cash dividends per share of ¥105.00 (consisting of a ¥40.00 interim dividend and a year-end dividendof ¥65.00). In the event that these dividends are paid, the consolidated payout ratio is expected to be 46.1%.
Based on our policy of enhancing shareholder returns, we will strive to pay “stable and high dividends” with the aimof attaining a 50% payout ratio as in the past.
We regard the purchase of treasury stock as one effective means of returning profits to shareholders and willappropriately respond while taking into consideration such factors as stock price trends and our financial condition.

2.

Basic Thinking Concerning Adoption of Accounting Standard

In preparation for the future adoption of International Financial Reporting Standards (IFRS), discussion is progressing
regarding the establishment of in-house manuals and guidelines and the timing of adoption.

6

Summary of Consolidated Financial Results for the Year Ended March 31, 20183.

Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of Yen)
As of March 31, 2017

As of March 31, 2018ASSETS
Current assets:
Cash and deposits

6,794

7,629

Notes and accounts receivable—trade

7,414

6,932

Short-term investment securities

126

108

Merchandise and finished goods

609

647

1,439

1,566

Short-term loans receivable

412

416

Accounts receivable—other

2,644

2,874

646

1,075

Other

1,475

1,922

Allowance for doubtful accounts

(17)

(37)

21,545

23,136

Buildings

360

370

Accumulated depreciation

(253)

(268)

Buildings, net

106

107

Machinery, equipment and vehicles

510

530

Accumulated depreciation

(469)

(491)

Machinery, equipment and vehicles, net

41

39

Other

129

136

Accumulated depreciation

(82)

(91)

Other, net

46

45

Total property, plant and equipment

194

192

27

–

1,265

1,310

1,293

1,310

Investment securities

7,729

9,353

Long-term loans receivable

2,948

3,179

Deferred tax assets

1,413

1,136

Guarantee deposits

377

384

Net defined benefit asset

46

46

Other

559

555

Allowance for doubtful accounts(1,308)(1,519)Allowance for investment loss

(19)

(19)

Total investments and other assets

11,747

13,116Work in process

Deferred tax assets

Total current assets
Noncurrent assets:
Property, plant and equipment

Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets

7Summary of Consolidated Financial Results for the Year Ended March 31, 2018

Total noncurrent assets

13,235

14,619Total assets

34,78137,7568

Summary of Consolidated Financial Results for the Year Ended March 31, 2018

(Millions of Yen)
As of March 31, 2017

As of March 31, 2018

LIABILITIESCurrent liabilities:
Accounts payable—trade

3,242

2,871

Short-term loans payable

1,179

1,179

950

859

1,056

735

467

506

Advances received

2,669

2,908

Provision for bonuses

598

565

Provision for directors’ bonuses

97

49

Provision for loss on construction contracts

419

780

–

1,198

167

294

10,84911,949

5

68

4,097

4,134

154

165

4,257

4,368

15,107

16,317

Capital stock

1,000

1,000

Capital surplus

4,589

4,671

Retained earnings

16,527

17,364

Treasury stock(2,545)(2,437)

Total shareholders’ equity

19,571

20,598Valuation difference on available-for-sale securities

103

654

Foreign currency translation adjustments

313

445

Remeasurements of defined benefit plans

(349)

(319)

68

780

34

59

Total net assets

19,674

21,438

Total liabilities and net assets

34,78137,756

Accrued expenses
Income taxes payable
Accrued consumption taxes

Provision for loss on litigation
Other
Total current liabilities
Noncurrent liabilities:
Deferred tax liabilities

Net defined benefit liability
Provision for directors’ retirement benefits
Total noncurrent liabilities
Total liabilities
NET ASSETS
Shareholders’ equity

Accumulated other comprehensive income

Total accumulated other comprehensive income
Subscription rights to shares

9Summary of Consolidated Financial Results for the Year Ended March 31, 2018

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Millions of Yen)
As of March 31, 2017

As of March 31, 2018

Net sales

39,142

39,410

Cost of sales

30,92830,896Gross profit

8,213

8,514

Selling, general and administrative expenses

4,033

4,338

Operating income

4,180

4,175

Interest received

78

78

Dividends received

40

94

Refunded consumption taxes

22

9Foreign exchange gains

19–

Equity in earnings of affiliates

–

687

Other

38

36

Total non-operating income

200

905

Interest expenses

38

38

Foreign exchange losses–

253

Stock transfer agency service fee

15

16

Provision of allowance for doubtful accounts

32–

Equity in losses of affiliates

80

–

Other

2

9

169

318

4,211

4,762

Gain on sales of investment securities–

328

Gain on reversal of loss on valuation of investment

3

2

Other

–

1

Total extraordinary income

3

332

Loss on retirement of noncurrent assets

10Loss on valuation of investment securities

10

3

Provision of allowance for doubtful accounts–

311

Loss on valuation of golf club membership

9–

Provision of allowance for investment loss

4–

Loss on litigation

–

1,612

0

20

25

1,948

Income before income taxes and minority interests

4,188

3,146

Income taxes-current

1,631

1,476

Non-operating income

Non-operating expenses

Total non-operating expenses
Ordinary profit
Extraordinary income

securities

Extraordinary loss

Other
Total extraordinary loss

10

Summary of Consolidated Financial Results for the Year Ended March 31, 2018

Income taxes-deferred

(89)

(390)

Total income taxes

1,542

1,086

Net income

2,646

2,060

–

(0)

2,646

2,060

Profit (loss) attributable to non-controlling interests
Profit attributable to owners of the parent

11Summary of Consolidated Financial Results for the Year Ended March 31, 2018

(Consolidated Statements of Comprehensive Income)(Millions of Yen)
As of March 31, 2017

As of March 31, 2018

Net income

2,646

2,060

Other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustments

(888)

550

(143)

60

(2)

30

–

70

(1,034)712

Comprehensive income

1,612

2,772

(breakdown)Comprehensive income attributable to parent
company shareholders
Comprehensive income attributable to non-controllinginterests

1,612

2,772

–

(0)

Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of affiliates
accounted for using equity method
Total other comprehensive income

12Summary of Consolidated Financial Results for the Year Ended March 31, 2018

(3) Consolidated Statements of Changes in Net Assets
FY2017 (April 1, 2016-March 31, 2017)(Millions of Yen)
Shareholders’ equity
Total

CapitalCapitalRetained

Treasurystock

surplusearnings

stock

shareholders’equityBalance at beginning of period

1,000

4,524

14,790(2,628)

17,686

Changes of items during the period

Dividends from surplus
Profit attributable to owners of the

(909)

(909)

2,646

2,646

parentCapital increase of consolidated
subsidiaries

2

2

Purchase of treasury stock
Disposal of treasury stock
Net change of items other thanshareholders’ equity

62

(0)

83

145

–
–

64

1,737

83

1,884

1,000

4,589

16,527(2,545)

19,571

Total change during the period
Balance at the end of current period(0)

Accumulated other comprehensive income
Valuation

Balance at beginning of period

Remeasure-Totalments ofaccumu-definedlated otherbenefitcomprehen-plans

sive income

Subscription

Foreigndifference on

currency

available-for-translation

sale securities

adjustment

992

457

(347)

1,102

Total netrights toassetsshares30

18,819Changes of items during the period
Dividends from surplus(909)

Profit attributable to owners of the parent

2,646

Capital increase of consolidated

2

subsidiaries
Purchase of treasury stock(0)

Disposal of treasury stock145

Net change of items other thanshareholders’ equity

(888)

(143)

(2)

(1,034)

3(1,030)Total change during the period

(888)

(143)

(2)

(1,034)3

854

Balance at the end of current period

103

313

(349)

68

34

19,67413

Summary of Consolidated Financial Results for the Year Ended March 31, 2018

FY2018 (April 1, 2017-March 31, 2018)(Millions of Yen)
Shareholders’ equity
Total

CapitalCapitalRetained

Treasurystock

surplusearnings

stock

shareholders’equityBalance at beginning of period

1,000

4,589

16,527(2,545)

19,571

Changes of items during the period
Dividends from surplus(1,222)(1,222)

Profit attributable to owners of the parent

2,060

2,060

Capital increase of consolidated
33

subsidiaries
Purchase of treasury stock
Disposal of treasury stock

78

(0)

(0)

108

186

Net change of items other thanshareholders’ equity

–
–

81

837

107

1,026

1,000

4,671

17,364(2,437)

20,598

Total change during the period
Balance at the end of current period

Accumulated other comprehensive income
Valuationdifference

Remeasure-Totalments ofaccumu-definedlated otherbenefitcomprehen-plans

sive income

Subscription

Foreignoncurrency

available-translation

for-saleadjustment

Total netrights toassetssharessecurities

Balance at beginning of period

103

313

(349)

68

34

19,674

Changes of items during the period
Dividends from surplus–(1,222)

Profit attributable to owners of the parent

–

2,060

Capital increase of consolidated

3–

subsidiaries
Purchase of treasury stock–(0)

Disposal of treasury stock–186

Net change of items other thanshareholders’ equity

550

131

30

712

25

737

Total change during the period

550

131

30

712

25

1,764

Balance at the end of current period

654

445

(319)

780

59

21,43814

Summary of Consolidated Financial Results for the Year Ended March 31, 2018

(4) Consolidated Statements of Cash Flows(Millions of Yen)
As of March 31, 2017

As of March 31, 2018

4,188

3,146

Depreciation and amortization

465

444

Amortization of goodwill

27

26

Increase (decrease) in net defined benefit liability

143

37

Increase (decrease) in provision for directors’ retirement benefits

10

10Increase (decrease) in provision for bonuses

39

(32)

Increase (decrease) in provision for directors’ bonuses

36

(47)

Increase (decrease) in allowance for doubtful accounts

30

298

Increase (decrease) in allowance for investment loss

3

1

Increase (decrease) in provision for loss on construction contracts

4360

Increase (decrease) in provision for loss on litigation

–

1,198

(119)

(172)

Interest expenses

38

38

Foreign exchange loss (gain)

(19)

253

Equity in (earnings) losses of affiliates

80

(687)

Loss (gain) on valuation of investment securities

10

3

Loss (gain) on sales of investment securities

0

(328)

Loss on retirement of noncurrent assets

1

0

(549)

458

Decrease (increase) in inventories

88

(165)

Increase (decrease) in notes and accounts payable—trade

(30)

(368)

Decrease (increase) in other current assets

(868)

(475)

Increase (decrease) in other liabilities

1,702

315

Increase (decrease) in accrued consumption taxes

(39)

38

Other, net

6772

Subtotal

5,313

4,426

Interest and dividends income received

69

155

Interest expenses paid

(38)

(38)

Income taxes paid

(1,443)(1,978)Net cash provided by operating activities

3,900

2,565

(59)

(77)

0

–

Purchase of intangible assets

(618)

(459)

Purchase of investment securities

(138)

(932)

Proceeds from sales of investment securities

320

1,308

Purchase of stocks of subsidiaries and affiliates(3,705)–

Payments of loans receivable(1,782)(1,446)

Net cash provided by (used in) operating activities:
Income before income taxes and minority interests

Interest and dividend income

Decrease (increase) in notes and accounts receivable—trade

Net cash provided by (used in) investing activities:
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment

15

Summary of Consolidated Financial Results for the Year Ended March 31, 2018

Collection of loans receivable

473

1,020

Payments into time deposits

(80)

(150)

Payments for guarantee deposits

(50)

(6)

Proceeds from collection of guarantee deposited

11

0

Other, net

(7)

(17)

(5,636)(760)

Proceeds from share issuance to controlling shareholders

2

3

Purchase of treasury stock

(0)

(0)

Cash dividends paid

(909)

(1,222)

Proceeds from exercise of stock option

134

172

Net cash used in financing activities(772)(1,047)(59)(4)

Net increase (decrease) in cash and cash equivalents(2,567)752

Cash and cash equivalents at beginning of period

8,833

6,265

Cash and cash equivalents at the end of period

6,265

7,018

Net cash used in investing activities
Net cash provided by (used in) financing activities:

Effect of exchange rate changes on cash and cash equivalents

16Summary of Consolidated Financial Results for the Year Ended March 31, 2018(5) Notes to the Consolidated Financial Statements(Notes on the Premise of a Going Concern)
None
Segment Information and Others
Segment Information
1. Summary of Reporting Segments
The SRA Holdings Group’s reporting segments are those for which financial information separate from that of other units
comprising the SRA Holdings Group can be obtained. Periodic reviews are made of reporting segments by the Board of
Directors for determining the allocation of management resources and assessment of business results.
The Company carries out overall management of subsidiaries engaged in the three businesses of “Systems Development,”“System Operations and Infrastructure Development” and “Product Sales.” Therefore, the SRA Holdings Group’s threereporting segments are “Systems Development,” “System Operations and Infrastructure Development” and “Product Sales.”Principal contents of business in each segment
Business segment

Content of businessIntegrated system development ranging from defining requirements to development
and maintenance of mainframe-based large systems


Systems Development

System integration covering system planning, development and introduction of open
systems

Solutions business offering business tools that utilize various products and toolsOpen source business that offers technical support for systems through open source
software

Operation management of computer systems and network systems

and

Overall operation that includes data management and facilities management

Infrastructure Development



Building of network systems



Outsourcing services

Sales of packaged software that includes licensingSales of system devices, centering on servers, in integration servicesConsulting services related to the introduction of IT

SystemOperations

Product Sales

2. Accounting Treatment Method of Net Sales and Income or Losses, Assets, Liabilities and Others for Each Reporting
Segment
The accounting treatment method for the reporting business segments is the same as that described in Principal Items that
Serve as the Basis for Preparing the Consolidated Financial Statements.
Inventories are valued at an amount prior to the writing down of carrying value.
The figures for segment profits are on the basis of operating income.
Intersegment sales or transfers are based on current market prices.

17

Summary of Consolidated Financial Results for the Year Ended March 31, 2018

3. Information Concerning Net Sales and Income or Losses, Assets, Liabilities and Others for Each Reporting Segment
Fiscal 2017(from April 1, 2016 to March 31, 2017)(Millions of Yen)
AmountSystemrecorded on

Operations

Systems
Development

Product

andInfrastructure

Total

Sales

Adjustment

theamount*1

consolidated
statements ofDevelopment

income *2

Sales(1) Sales to
20,710

4,403

14,027

39,142－

39,142

20

231

384

636

(636)

－

Total sales

20,731

4,634

14,412

39,778(636)

39,142

Operating income

3,264

1,079

1,187

5,530

(1,350)4,180

Assets

9,865

1,667

6,288

17,821

16,95934,781

59

9

391

459

3

463

－

－

27

27

－

27

58

14

632

705

－

705

customers(2) Intersegment
sales ortransfers

OthersDepreciation

Amortization of
goodwill

Increase of
tangible andintangible
assets
Notes:

1. The adjustment amounts are as follows:(1) The segment income adjustment of minus ¥1,350 million is a company-wide expense not apportioned to any reporting
segment. Company-wide expenses are general and administrative expenses and R&D expenses not attributed to any
reporting segment.
(2) Total Company assets amounted to ¥17,317 million for the fiscal year. These consisted mainly of the SRA HoldingsGroup’s surplus operating assets (cash, deposits and marketable securities), short-term loans receivable, long-term invested
assets (investment securities and long-term loans receivable) and deferred tax assets.
(3) Depreciation expenses and increases of tangible and intangible assets included depreciation and additions to long-term
prepaid expenses, respectively.

2. Segment operating income is adjusted in operating income on the consolidated statements of income.

18

Summary of Consolidated Financial Results for the Year Ended March 31, 2018

Fiscal 2018 (from April 1, 2017 to March 31, 2018)(Millions of Yen)
AmountSystemrecorded on

Operations

Systems
Development

Product

andInfrastructure

Adjustment

Total

Sales

amountthe*1

consolidated
statements ofDevelopment

income *2

Sales(1) Sales to21,843

4,640

12,926

39,410－39,410

27

210

371

608

(608)

－

Total sales

21,8704,850

13,29740,019(608)

39,410Operating income

3,654

1,202

835

5,692

(1,516)

4,175

Assets10,410

1,773

6,298

18,482

19,27337,756

49

8

385

443

0

444

－

－

27

27

－

27

88

17

393

500

1

502

customers(2) Intersegment
sales ortransfers

OthersDepreciation

Amortizationof goodwill

Increase of
tangible andintangible
assets
Notes:
1. The adjustment amounts are as follows:(1) The segment income adjustment of minus ¥1,516 million is a company-wide expense not apportioned to any reporting
segment. Company-wide expenses are general and administrative expenses and R&D expenses not attributed to any
reporting segment.
(2) Total Company assets amounted to ¥19,710 million for the fiscal year. These consisted mainly of the SRA HoldingsGroup’s surplus operating assets (cash, deposits and marketable securities), short-term loans receivable, long-term invested
assets (investment securities and long-term loans receivable) and deferred tax assets.
(3) Depreciation expenses and increases of tangible and intangible assets included depreciation and additions to long-term
prepaid expenses, respectively.

2. Segment operating income is adjusted in operating income on the consolidated statements of income.

19

Summary of Consolidated Financial Results for the Year Ended March 31, 2018

[Related Information]
Previous fiscal year (from April 1, 2016 to March 31, 2017)
1.

Information about each product and service

Information is omitted because the same information is disclosed as reportable segments.
2.

Information about each region(1)

Net sales

Information is omitted because net sales to external customers in Japan exceeded 90% of net sales stated in the consolidated
statements of income.
(2)

Property, plant and equipment

Information is omitted because the amount of property, plant and equipment located in Japan exceeded 90% of that stated in the
consolidated balance sheets.

3.

Information on Each Major Customer (Unit: million yen)
Information on each major customer
Information is omitted because there were no customers who accounted for 10% of net sales for external customers stated in the
consolidated statements of income.

Current fiscal year (from April 1, 2017 to March 31, 2018)
1.

Information about each product and service
Information is omitted because the same information is disclosed as reportable segments.

2.

Information about each region(1)

Net sales

Information is omitted because net sales to external customers in Japan exceeded 90% of net sales stated in the consolidated
statements of income.
(2)

Property, plant and equipment

Information is omitted because the amount of property, plant and equipment located in Japan exceeded 90% of that stated in the
consolidated balance sheets.

3.

Information on each major customer
Information is omitted because there were no customers who accounted for 10% of net sales for external customers stated in the
consolidated statements of income.

[Information on impairment loss of non-current assets by each reportable segment]

Previous fiscal year (from April 1, 2016 to March 31, 2017)
Not applicable
Current fiscal year (from April 1, 2017 to March 31, 2018)
Not applicable20Summary of Consolidated Financial Results for the Year Ended March 31, 2018

[Information on the amortization of goodwill and the unamortized balance by reportable segment]
Previous fiscal year (from April 1, 2016 to March 31, 2017)(Unit: million yen)
Systems

SystemDevelopment

Operations

andProduct

Corporate

Sales

Eliminations

and
Total

Infrastructure
Development
Amortization

－

－

27

－

27

－

－

27

－

27

during the fiscal
year
Balance at the endof the year

Current fiscal year (from April 1, 2017 to March 31, 2018)(Unit: million yen)
Systems

SystemDevelopment

Operations

andProduct

Corporate

Sales

Eliminations

and

Total

Infrastructure
Development
Amortization

－

－

27

－

27

－

－

－

－

27

during the fiscal
year
Balance at the endof the year

[Information on gains on negative goodwill by reportable segment]
Previous fiscal year (from April 1, 2016 to March 31, 2017)
Not applicable
Current fiscal year (from April 1, 2017 to March 31, 2018)
Not applicable21

Summary of Consolidated Financial Results for the Year Ended March 31, 2018

（Per share information）
As of March 31, 2017

As of March 31, 2018

Net assets per share

1,609.33

Net assets per share

1,737.59

Earnings per share

218.00Earnings per share

168.07

Diluted earnings per share

216.88

Diluted earnings per share

167.12

Note: The basis for calculation of earnings per share and diluted earnings per share is as follows.

As of March 31, 2017

As of March 31, 2018

Earnings per share
Profit attributable to owners of the

2,646

2,060

－

－

2,646

2,060

12,141

12,257

－

－

62

70

(62)

(70)

－

－

parent (million yen)Amount not belonging toordinary shareholders (million yen)
Profit attributable to owners of
the parent in relation to common
stock (million yen)
Average number of shares during
the fiscal year (1,000 shares)
Diluted earnings per share
Adjustment for profit attributableto owners of the parent (million
yen)
Increase in number of shares ofcommon stock (1,000 shares)(Including subscription rights to
new shares (1,000 shares))
Outline of potential shares notincluded in calculation of current
net

incomepershare after

adjustments on potential shares
due to no dilution effect.

(Significant subsequent events)
Not applicable22Summary of Consolidated Financial Results for the Year Ended March 31, 2018

(Additional information)(Regarding the filing of a damage lawsuit)
1. As announced in “Announcement Concerning Judgement on Lawsuit (Appeal) of Company Subsidiary” released on
December 13, 2017, Company subsidiary SRA petitioned on December 27, 2017 for acceptance of a final appeal, withan objection to the appeal decision of the lawsuit with Happinet Corporation. In accordance with the progress of thelawsuit, we will promptly provide information on any matters requiring disclosure.
2. SRA, a Company subsidiary, filed a damage lawsuit against Sanko Estate Co., Ltd., (hereafter Sanko Estate) on
August 25, 2015. In response, Sanko Estate filed a lawsuit against SRA in the Tokyo District Court on October 6,
2015. These cases are currently being litigated. In accordance with the progress of the lawsuits, we will promptly
provide information on any matters requiring disclosure.

23

Summary of Consolidated Financial Results for the Year Ended March 31, 2018

4. Other Information
1. Status of Production, Orders and Sales(1) Production amounts
Production by segment in the fiscal year ended March 31, 2018 is as follows.
Segment information by type of business

As of March 31, 2018 (April 1,
2017-March 31, 2018)

Systems Development (Millions of Yen)

22,044

106.2

4,654

105.4

26,699106.1

System Operations and Infrastructure
Development (Millions of Yen)
Total (Millions of Yen)

% change YoY

Notes:
1. Amounts are based on sales price.
2. The amounts above do not include consumption tax.
3. Intersegment transactions are offset.

(2) Purchase amounts
Purchases by segment in the fiscal year ended March 31, 2018 are as follows.
Segment information by type of business

As of March 31, 2018 (April 1,
2017-March 31, 2018)% change YoY

Product Sales (Millions of Yen)

7,357

87.9

Total (Millions of Yen)

7,357

87.9

Notes:
1. Amounts are based on purchase price.
2. The amounts above do not include consumption tax.
3. Intersegment transactions are offset.

24

Summary of Consolidated Financial Results for the Year Ended March 31, 2018(3) Status of orders
Status of orders by segment in the fiscal year ended March 31, 2018 is as follows.
OrdersOrder backlog

received

Segment information by type of business(Millions of% change YoY% change YoY

Yen)

Yen)
Systems Development(Millions of

22,057

103.9

5,304

104.2

4,817

100.5

2,189

108.8

Product Sales

13,320

94.6

3,589

112.3

Total

40,195

100.3

11,083

107.6

System Operations and Infrastructure
Development

Notes:
1. Amounts are based on sales price.
2. The amounts above do not include consumption tax.
3. Intersegment transactions are offset.

(4) Sales amounts
Sales by segment in the fiscal year ended March 31, 2018 are as follows.
Segment information by type of business

As of March 31, 2018 (April 1,
2017-March 31, 2018)

Systems Development (Millions of Yen)

% change YoY

21,843

105.5

4,640

105.4

Product Sales (Millions of Yen)

12,926

92.1

Total (Millions of Yen)

39,410100.7

System Operations and Infrastructure
Development (Millions of Yen)

Notes:
1. Amounts are based on sales price.
2. The amounts above do not include consumption tax.
3. Intersegment transactions are offset.

25