May 12, 2011

Summary of Consolidated Financial Results for the Year Ended March 31, 2011
Company name:

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

Stock listing:Code number:President:
For inquiries, please contact:
Tel:

3817
Toru Kashima
Makoto Kitai, General Manager, Finance Department, Administrative Headquarters(03)-5979-2666
Date of ordinary general meeting of shareholders:June 24, 2011
Scheduled commencement of dividend payment:
June 10, 2011
Scheduled date of submission of financial reports:
June 25, 2011
Results Supplement Materials: Yes
Results Presentation Meeting : Yes (for institutional investors)

1. Consolidated Financial Results for Fiscal 2011 (from April 1, 2010 to March 31, 2011)(1) Consolidated Operating Results(All amounts rounded down, % change YoY)Net Sales

Fiscal 2011
Fiscal 2010

Operating Income

Ordinary Profit

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

33,164
34,053(2.6)(18.5)

2,238
1,997

12.1
(47.7)

2,374
2,059

15.3
(47.1)

1,313
1,238

6.1
(39.3)

Attention：Comprehensive Income
Fiscal 2011: ¥962 million
Fiscal 2010: ¥1,853million」
Net Income
per Share

Ratio of Net Income
to Shareholders’Equity%Net Income per Shareafter Dilution

Yen
Fiscal 2011
94.93
Fiscal 2010
89.48
Reference: Gain (loss) on equity method investments:
Fiscal 2011: —Fiscal 2010: —

Yen
—
—

Ratio of Ordinary
Profit to Total Assets

8.6
8.5

Ordinary Profit
Ratio

%

%

8.8
7.7

6.8
5.9

(2) Consolidated Financial Position
Millions of yen%

Shareholders’ Equity
per Share
Yen

15,522
15,12958.5
55.4

1,118.71
1,089.15

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

1,458
2,025

(1,548)(2,714)

(837)
(737)

9,309
10,324

Total Assets

Net Assets

Millions of yen
Fiscal 2011
26,451
Fiscal 2010
27,204
Reference: Shareholders’ equity
Fiscal 2011: ¥15,482 million
Fiscal 2010: ¥15,073 million

Shareholders’ Equity Ratio(3) Consolidated Cash Flows

Fiscal 2011
Fiscal 2010

2. Dividends
Dividend per Share
Record dateFiscal 2010
Fiscal 2011
Fiscal 2012 (forecast)End of

End of

End ofFirst

SecondThird

Quarter

Quarter

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

%

%

－
－
－

－
－
－

－
－
－

40.00
40.00
40.00

40.00
40.00
40.00

553
553
―

44.7
42.1
40..9

3.8
3.6
―

1

3. Consolidated Earnings Forecast for Fiscal 2012 (from April 1, 2011 to March 31, 2012)

Net Sales（% change YoY is for the fiscal year or for interim period）
Net Income
Ordinary Profit
Net Income
per Share

Operating Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

16,00033,500

(1.8)
1.0

880
2,300

10.1
2.7

880
2,300

2.9
(3.1)

520
1,355

31.2
3.1

37.57
97.91

Interim Period
Full Year

4. Others(1) Changes to significant subsidiaries during the term (changes in specified subsidiaries due to change in scope of
consolidation):No(2) Changes in accounting principles, methods or reporting procedures
1. Changes due to change in accounting standards:
Yes
2. Changes other than 1. (above):No(3) Number of outstanding shares (common shares)
1. Shares issued at the end of term (including own shares)
Fiscal 2011: 15,240,000 sharesFiscal 2010: 15,240,000 shares
2. Own shares at end of term
Fiscal 2011: 1,400,230 sharesFiscal 2010: 1,400,227 shares
3. Average number of shares over period
Fiscal 2011: 13,839,770 sharesFiscal 2010: 13,839,786 shares[Reference] Summary of non-consolidated financial results

1. Non-Consolidated Financial Results for Fiscal 2011 (from April 1, 2010 to March 31, 2011)(1) Non-Consolidated Operating Results
Net Sales

Fiscal 2011
Fiscal 2010

Fiscal 2011
Fiscal 2010(% change YoY)
Operating Income

Ordinary Profit

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

1,226
1,153

6.3
(29.1)

799
790

1.1
(24.4)

790
787

0.5
(23.9)

796
859

(7.3)
(16.8)Net Income
per Share

Net Income per Shareafter Dilution

Yen

Yen

52.98
57.17

―
―

(2) Non-Consolidated Financial Position
Net Income

Net Assets

Millions of yen

Millions of yen%

Shareholders’ Equity
per Share
Yen

99.2
98.0

631.84635.45

Shareholders’ Equity Ratio

9,577
9,536
9,740
9,570
Reference: Shareholders’ equity:
Fiscal 2011: ¥9,496 million
Fiscal 2010: ¥9,550 million
Fiscal 2011
Fiscal 2010

Note: Forecast performance is predicted by the Company based on information currently available at the time of theforecast. Actual financial results may differ due to a number of factors.

2

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

1. Business Results(1) Analysis of Business Results(Business results for the fiscal year)
During the fiscal year ended March 31, 2011, despite remaining at a standstill from summer 2010, the Japanese
economy began a mild recovery from the start of 2011 due to a pickup in exports, production, and personal
consumption. Nevertheless, corporate production activities weakened and personal consumption declined as a resultof the Great East Japan Earthquake in March 2011, and the direction of the economy is uncertain.
In the information services industry, corporate customers maintained a cautious stance toward IT investment due touncertainty over future performance and the trend of curbing investments continued.
Amid these circumstances, the SRA Holdings Group implemented its fiscal year business policies, namely,“securing a stable order flow,” “increasing gross profit margins and curbing costs” and “refining a solid customer
base and strengthening order-generating activities to create new opportunities.” Along with these measures, we
implemented the following business management initiatives as a response to quantitative and qualitative declines inprojects that occurred from the start of the third quarter of the fiscal year.
1) Promote recovery measures at each group company.
2) Determine full fiscal-year business results in the third quarter based on the state of progress of these measures.
3) Consider and implement a “contingency plan” for the entire group.
Within our fiscal-year business plan and recovery measures, policies of particular importance are “securing a stableorder flow” and “increasing gross profit margins and curbing costs”. The state of progress in implementing each ofthese initiatives is as follows.
Regarding “securing a stable order flow”, revenues increased at Software Science, Inc., which secured favorable
orders for prime projects for medium-sized companies, and at SRA America, Inc., which was involved in large
projects for its principal customers.
However, despite efforts to secure orders and create projects, mainly with existing customers, Software Research
Associates, Inc. (SRA) posted declines in orders and revenues amid a harsh environment. Advanced Integration
Technology, Inc. (AIT) also posted lower revenues due to a decline in sales of devices, mainly in the financial
industry.
Regarding “increasing gross profit margins and curbing costs”, Software Science and SRA America, Inc.
achieved increases in gross profit on the back of higher revenues. Despite lower revenues, AIT posted an increasein profits due to such factors as a rise in the gross profit margin for building servers. On the other hand, SRA
posted a decrease in profits due to lower net sales.
As a result of the preceding initiatives, consolidated business results for the fiscal year were as follows.
Looking at sales, although sales in the Systems Development business remained level with the previous year, sales
declined in the System Operations and Infrastructure Development business and in the Product Sales business. As aresult, consolidated net sales declined 2.6% from the previous fiscal year to ¥33,164 million.
At the profit level, gross profit increased due to improved profitability at SRA America, Inc. and AIT and to cost
constraints under the “contingency plan” at SRA, while operating income rose 12.1% from the previous fiscal year to¥2,238 million and ordinary profit increased 15.3% to ¥2,374 million. We recorded extraordinary losses that included
a loss on valuation of investment securities and a loss on valuation of stocks of subsidiaries and affiliates. As a result,net income increased 6.1% over the previous fiscal year to ¥1,313 million.
As detailed in the above explanation of consolidated results, revenues declined and profits increased from theprevious fiscal year. Consolidated results for the fiscal year exceeded our revised forecast of results announced in
February 2011.
3

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

The SRA Group suffered no direct human or material damages from the Great East Japan Earthquake and theimpact of the earthquake on the group’s consolidated results for the fiscal year was minimal.
Trends in Consolidated Business Results(¥ million)

FY2007

FY2008FY2009FY2010Net sales

36,76545,05841,777

34,053

FY2011
Most recent forecast
figures (announced
February 10)
32,000Operating income

2,848

4,102

3,820

1,997

2,000

2,238

Ordinary profit

2,923

4,181

3,894

2,059

2,100

2,374

Net income

2,015

2,224

2,041

1,238

1,150

1,313

Actual33,164

A summary of business results for the fiscal year by business segment is shown below.
Systems Development
Despite a decline in sales in most types of industries, the Systems Development business recorded increased sales tomanufacturing and electric power industries. As a result, net sales for the fiscal year edged up 0.4% from the previous
fiscal year to ¥17,909 million.
System Operations and Infrastructure Development
Although university-related orders increased, corporate-related orders for System Operations and Infrastructure
Development business declined as customers shifted to internal production. As a result, net sales for the fiscal year in
the System Operations and Infrastructure Development segment declined 9.9% from the previous fiscal year to¥3,723 million.
Product Sales
Net sales of Product Sales business declined 4.6% to ¥11,531 million due to a decrease in sales of devices at AIT,
mainly in the financial sector, and a decrease in sales of packages and other products at SRA.
(Outlook for the Next Fiscal Year)In the next fiscal year, despite continued weakness in the immediate term due to the impact of the earthquake, asubsequent recovery in production will be accompanied by expectations of a recovery in the Japanese economy
against a background of improvements in overseas economies and positive effects of government policies.
Nevertheless, there is also the risk of a downturn due to such factors as constraints on electric power supplies and arise in crude oil prices, and the direction of the economy remains uncertain.
In the information services industry, for the time being a constraint on IT investments, mainly among companies
that suffered damage from the earthquake, is expected. Following the disaster recovery, IT investments as part ofreconstruction efforts are expected, but the timing and scale of these investments are difficult to forecast and theuncertain business environment is expected to persist.
Under these circumstances, during the next fiscal year, which will mark the first fiscal year of the medium-term
management plan, the SRA Group will “expand orders by strengthening business capabilities,” “build a high-profit
production structure,” and “transform to a cost structure appropriate for our business scale” (ensure appropriate
production costs and SG&A expenses).
4

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

◎Medium-Term Management Plan (From the fiscal year ending March 2012 through the year ending March 2014)

Under this plan, for the fiscal year ending March 2014, we aim to surpass our previous record for profits (recorded
for the fiscal year ended March 2008) by “raising and strengthening profitability through the promotion of structuralreforms” and “securing medium- and long-term growth through initiatives to develop new business overseas and fully
promoting our own company IP products business.”
Note: Own company IP products business: Business for our own-brand products covered by intellectual property
rights.
Regarding the outlook for consolidated results for the fiscal year ending March 2012, while implementing the abovemeasures and taking into account the effects of the Great East Japan Earthquake, we forecast net sales of ¥33,500
million, operating income of ¥2,300 million, ordinary profit of ¥2,300 million and net income of ¥1,355 million.
(2) Analysis of Financial Position
Cash and cash equivalents on a consolidated basis at the end of the fiscal year decreased ¥1,015 million to ¥9,309
million compared with at the previous fiscal year-end.
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 ¥1,458 million, a decrease of 28.0% from the previous fiscal
year. This consisted mainly of such cash inflows as income before income taxes and minority interests of ¥2,078
million and a decrease in inventories of ¥158 million, while cash outflows were primarily income taxes paid of ¥815
million and a ¥769 million decrease in notes and accounts payable—trade.
Cash Flows from Investing Activities
Net cash used in investing activities amounted to ¥1,548 million, a decrease of 42.9% from the previous fiscal year.
This consisted mainly of such inflows as ¥350 million in proceeds from sales of investment securities and suchoutflows as ¥1,054 million for the purchases of investment securities, ¥607 million for payments of loans receivableand ¥274 million for purchases of property, plant and equipment and purchases of intangible assets.
Cash Flows from Financing Activities
Net cash used in financing activities amounted to ¥837 million, an increase of 13.5% from the previous fiscal year.
This was due mainly to such cash outflows as ¥553 million in cash dividends paid and a net decrease in short-termloans payable amounting to ¥283 million.
Trends in Cash Flow Indicators
Shareholders’ equity ratio (％)
Shareholders’ equity ratio at
market value (％)
Dept redemption years to cash
flow (years)
Interest coverage ratio (times)

FY2009FY2010FY2011

53.0

55.4

58.5

37.3

43.0

42.9

1.2

1.2

1.5

41.4

52.5

42.8

Notes:
5

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

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 expense
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 shares.
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.
(3) Basic Policy on Profit Allocation and Dividends for the Fiscal Year under Review and the Next Fiscal Year
The Company’s basic policy regarding the allocation of profits is to enhance the redistribution of profits toshareholders in accordance with the state of its earnings, while also retaining earnings for R&D and the establishmentof a development environment for responding to the rapid and revolutionary technological advances within theindustry as well as to prepare for future business development.
The Company aims to allocate profits with a consolidated dividend payout ratio of 20%. Moreover, at theOrdinary General Meeting of Shareholders held on September 20, 2006, the Articles of Incorporation were changed
to allow for a flexible distribution of retained earnings as dividends based on resolutions by the Board of Directors.
Regarding dividends for the fiscal year ended March 31, 2011, in accordance with our dividend policy of striving
to realize a consolidated payout ratio of 20% while considering various factors, the Company will pay regular cash
dividends per share of ¥40.00.
Regarding dividends for the fiscal year ending March 31, 2012, the Company plans to maintain ordinary cash
dividends per share of ¥40.00 for the reasons detailed below. In the event that these dividends are paid, theconsolidated payout ratio will be 40.9%.
1. One of the Company’s management targets is to “achieve and maintain double-digit consolidated ROE” and we
aim to carry out management that emphasizes the efficient use of shareholders’ equity.
2. Therefore, we are implementing a policy of making proactive investments (such as investments for M&A) in our
main businesses in working to ensure the Group’s growth.
3. At the same time, we also continually consider “redistributing profits to shareholders” from the perspective ofefficient use of shareholders’ equity.
4. Taking into consideration our ample liquidity in hand at present, as part of efforts to contribute to the efficientutilization of assets and capital, we have decided that “redistributing profits to shareholders” is a high priority andin the fiscal year ending March 31, 2012, we thus plan to maintain cash dividends per share of ¥40.00.
We also regard the acquisition of treasury shares as an effective means of redistributing profits to shareholders.
Accordingly, we make such acquisitions appropriately while considering such factors as our stock price trends andfinancial condition.

6

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011(4) Business and Other Risks
The following principal risks could have an impact on the business results and financial condition of the Company as
the Group’s controlling company.
“Forward-looking” statements contained in this report represent judgments by the Group based on information
currently available to management as of the end of the fiscal period.
[1] Risk of fluctuations in business results of Group companies
An abrupt fluctuation in business results of Group companies due to various factors could have an adverse impact on
the Company’s business results.
[2] Maintaining confidentiality of customer information
In addition to being aware that it is an information processing company with numerous opportunities for handlingpersonal information, the SRA Holdings Group also sufficiently recognizes the critical nature of protecting personal
information, and thus, has established an internal monitoring structure. Concurrently, the SRA Holdings Group
provides education for its Group employees and business partners and makes efforts to protect personal information.
However, in the event of the unexpected leakage of information, besides losing the trust of business partners, the SRA
Holdings Group could become liable for payment of compensatory damages, which could have an effect on theGroup’s business results.
In addition to the above, the Company comprehensively incurs business and other risks of SRA, a main
subsidiary.
<SRA>* The below-mentioned “SRA Holdings Group” consists of Software Research Associates (SRA), Inc., and its
subsidiaries. The following principal risks could have an impact on the business results and financial condition of the
SRA Holdings Group.
[1] Responses of business partners when production volume fluctuates
In the Systems Development and the System Operations and Infrastructure Development businesses, besides its own
in-house engineers, the SRA Holdings Group utilizes business partners for the planned augmentation of its staff ofin-house engineers and expansion of business, as well as to augment those areas where it does not possess
technologies and to respond flexibly to changes in production volumes during peak production.
The SRA Holdings Group also utilizes business partners as one means of reducing production costs.
Nonetheless, in the event of a sudden unforeseen fluctuation in production volume, the inability to secure enoughbusiness partners possessing requisite skills or to arrange for business partners to take timely action could have an
impact on the Group’s business results.
The utilization of business partners accounted for 43.4% of manufacturing costs as of the end of the fiscal period.
[2] Project profitability in Systems Development
In the core Systems Development business, the SRA Holdings Group concludes bulk subcontracting contracts
whereby it handles the entire system development and is responsible to its customers for completion. Therefore, evenfor projects for which a certain amount of income is expected at the time the order is received, there are instances
when profitability worsens because of such factors as customer requests for specification changes after commencing
development activities or a work process that exceeds the initial estimate. Moreover, incurring additional expenses
7

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

such as those related to defect guarantees after the confirmation of sales could result in lower profitability.
To prevent the occurrence of these projects, the Group reviews risk factors at the time an order is received andworks to improve the precision of its estimates while strengthening its project management structure in an organizedmanner. Nevertheless, any project incurring a large loss could have an effect on the Group’s business results.
[3] Maintaining confidentiality of customer information
Along with being aware that it is an information processing company with numerous opportunities for handlingpersonal information, the Group also sufficiently recognizes the critical nature of personal information, and thus, hasestablished an internal monitoring structure. Concurrently, as a company that has acquired Privacy Mark certification,
the SRA Holdings Group provides education for its Group employees and outsourced staff and makes efforts toprotect personal information. However, in the event of the unexpected leakage of information, besides losing the trustof business partners, the SRA Holdings Group could become liable for payment of compensatory damages, which
could have an effect on the Group’s business results.

2. Management Policy(1) The Company’s Basic Management Policy
The SRA Holdings Group adheres to a basic management policy of maximizing user satisfaction through IT based on
its management principle of “contributing to the future of humanity through professional practice that fosters progressin the fields of computer science,” which has been our guiding principle since the founding of SRA. In accordancewith this basic management policy, amid a rapidly changing business environment, we will strive to meet the
expectations of the information services industry while raising profits for shareholders and increasing corporate value
by pursuing profitability and growth.
Regarding the management of the SRA Holdings Group, under our management vision of “creating new value
together with people through a global perspective and technologies,” we will raise the overall capabilities of theGroup with the aim of enhancing corporate value.
(2) Management Indicator Targets
The SRA Holdings Group has adopted “ordinary profit margin” as a representative indicator of the Company’s
overall earnings power and has set the medium- and long-term numerical target of quickly attaining and maintaining
an ordinary profit margin of 10% or higher.”Also, the SRA Holdings Group continues to use return on equity (ROE) as an indictor of efficient deployment ofshareholders’ equity. The Group has established the numerical target of “attaining and maintaining double-digit
consolidated ROE.”
The Group’s consolidated ordinary profit margin and ROE are as shown below.
Consolidated ordinary profit margin

Consolidated ROE

FY2007 (actual)

8.0%

18.8%

FY2008 (actual)

9.3%

18.0%

FY2009 (actual)

9.3%

15.0%

FY2010 (actual)

6.0%

8.5%

FY2011 (actual)

7.2%

8.6%

FY2012 (target)

6.9% (plan)

8.5% (plan)
8

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011(3) Medium- and Long-term Management Strategy
With the aim of further raising profitability, the SRA Group has formulated and will implement a new medium-term
management plan running from the fiscal year ending March 2012 through the fiscal year ending March 2014. A
summary of the plan follows.
1. Management Targets①Increase and strengthen profitability by undertaking structural reforms in existing businesses.
②Secure medium- and long-term growth potential by fully promoting our own IP products businesses andundertaking new businesses overseas.
③In the fiscal year ending March 2014, the final year of our medium-term management plan, strive to record“operating income,” “ordinary profit,” “and “net income” that exceeds our previous record for profits (operating
income and ordinary profit of ¥4,100 million and net income of ¥2,200 million) recorded for the fiscal year ended
March 2008 (fiscal 2007).
2. Management Strategies①Promote structural reforms.
(1)[Systems Development and System Operations and Infrastructure Development]
Increase profitability by strengthening the foundations of existing businesses.
◎Expand orders by strengthening our business capabilities.
・Specialize in fields of expertise (manufacturing embedded systems, financial, education, and others).
・Undertake “cross-selling” in Systems Development, System Operations and Infrastructure Development, andProduct Sales.
・Refine business processes from creating projects to securing orders.
◎Build a high-profit production structure.
・Increase the profitability of projects.
・Ensure appropriate production overhead costs and increase productivity.
・Expand the scope of offshore production.
◎Transform to a cost structure appropriate for our business scale.
・Ensure appropriate production costs and SG&A expenses.
(2)[Product Sales]◎Promote new businesses with high growth potential and high profitability.
◎Develop business in China and other overseas countries.
②Medium- and Long-Term Growth Strategies(1) Utilize technological progressiveness, one of our strengths, and promote high-profit “product businesses.”
In product businesses, offer our own company IP products as well as advanced, high-profit products in Japan andoverseas.
[Targeted value]
Make IP products account for 10% of consolidated net sales in the year ending March 31, 2014 (the final year of themedium-term management plan).
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SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

(2) Utilize “global reach,” one of our strengths, and undertake business in growth markets, beginning with China,
India and ASEAN.
(Targeted value)
Make overseas business account for 20% of consolidated net sales in the fiscal year ending March 2016 (after five
years).
(4) Issues to Be Addressed by the Company
The SRA Holdings Group will execute the following tasks in the first fiscal year of its medium-term managementplan.
1. Expand orders by strengthening business capabilities.
(1) Priority business fields for expanding orders[Systems Development and System Operation and Infrastructure Development]①Specialize in fields of expertise (financial, manufacturing embedded systems, education, others).
②Promote “cross-selling” in Systems Development, System Operations and Infrastructure Development, and Product
Sales).
[Product Sales]①Expand into new fields (manufacturing, securities, municipalities, others).
②Promote new businesses (solutions, cloud computing).
③Develop business overseas (infrastructure development business and others in China).
(2) Refine business processes.
①Refine business processes for creating opportunities and ensuring that this can reliably and efficiently lead to thesecuring of new orders.
②Increase business efficiency and strengthen coverage for each customer.
③Strengthen business skills.
(3) Measures for increasing gross profit[Systems Development and System Operation and Infrastructure Development]①Secure orders with high unit prices by promoting high added-value (advanced technologies, other) proposal-based
business.
②Expand high-profit infrastructure development business.
[Product Sales]①Promote product sales.
②Expand solution business (sales and services).
2. Build a high-profit production structure.
(1) Ensure appropriate production overhead costs and realize qualitative improvements to production management.
Realize a management structure appropriate for the scale of production (flatten layers of management).
(2) Increase the profitability of projects.
①Promote componentization and frameworks.
②Realize appropriate staffing through the visualization of the capabilities of needed personnel.
③Increase productivity by building a development foundation and firmly positioning development processes.
(3) Promote offshore development.
10

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

Expand the scope of offshore (long-term maintenance, tests).
3. Transform to a cost structure appropriate for our business scale.
・Ensure appropriate production costs and SG&A expenses.
(5) Other Important Management Matters
None

11

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

3. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of Yen)FY2010FY2011(as of March 31, 2010)(as of March 31, 2011)ASSETS
Current assets:
Cash and deposits

8,957

7,940

Notes and accounts receivable—trade

6,275

6,118

Short-term investment securities

1,504

1,504

Merchandise and finished goods

385

316

Work in process

1,140

1,024

Deferred tax assets

467

433

Other

610

922

Allowance for doubtful accounts

(4)

(2)

19,337

18,259

257

314

(173)

(191)

Buildings, net

83

123

Machinery, equipment and vehicles

697

561

Accumulated depreciation

(641)

(508)

Machinery, equipment and vehicles, net

56

52

Land

0

0

Other

101

100

Accumulated depreciation

(69)

(66)

Other, net

31

34

Total property, plant and equipment

172

211

Other

701

629

Total intangible assets

701

629

Investment securities

4,069

4,252

Deferred tax assets

1,586

1,579

Guarantee deposits

529

460

Other

949

1,145

Allowance for doubtful accounts

(48)

(13)

Allowance for investment loss

(93)

(73)

Total investments and other assets

6,993

7,351

Total current assets
Noncurrent assets:
Property, plant and equipment
Buildings
Accumulated depreciation

Intangible assets

Investments and other assets

12

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

Total noncurrent assets
Total assets

13

7,867

8,192

27,20426,451SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

(Millions of Yen)FY2010FY2011(as of March 31, 2010)(as of March 31, 2011)

LIABILITIESCurrent liabilities:
Accounts payable—trade

2,818

1,986

Short-term loans payable

2,184

1,901

Current portion of bonds－

300

Accrued expenses

570

430

Income taxes payable

522

489

Accrued consumption taxes

243

296

Provision for bonuses

569

602

0

0

Provision for loss on construction contracts

148

151

Provision for loss on liquidation of subsidiaries

－

14

Other

518

698

Total current liabilities

7,576

6,872

Bonds payable

300－

Deferred tax liabilities

135－

Provision for retirement benefits

3,632

3,606

Provision for directors’ retirement benefits

422

444

Negative goodwill

82

Others

－

2

4,498

4,057

12,075

10,929

Capital stock

1,000

1,000

Capital surplus

4,483

4,483

Retained earnings

10,202

10,963

Treasury stock

(894)

(894)

Total shareholders’ equity

14,792

15,552

414

239

(133)

(309)

281

(69)

Subscription rights to shares

19

39

Minority interests

36－

Total net assets

15,12915,522

Total liabilities and net assets

27,20426,451

Provision for directors’ bonuses

and affiliates

Noncurrent liabilities:

Total noncurrent liabilities
Total liabilities
NET ASSETS
Shareholders’ equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustments
Total accumulated other comprehensive income

14

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income(Consolidated Statements of Income)(Millions of Yen)FY2010FY2011(April 1, 2009-(April 1, 2010-

March 31, 2010)

March 31, 2011)

Net sales

34,05333,164

Cost of sales

28,341

27,292Gross profit

5,711

5,872

Selling, general and administrative expenses

3,713

3,633

Operating income

1,997

2,238

Interest received

30

55

Dividends received

20

26

Technical guidance fee

00Sales incentives

1221

Gain on allocation of investment securities－

21

Dividends income of insurance

14

17

Other

44

62

Total non-operating income

122

204

Interest expenses

39

34

Foreign exchange losses－

14

Transfer agent processing fee

10

15

Other

10

4

Total non-operating expenses

61

69

2,059

2,374

Gain on sales of noncurrent assets

0－Gain on reversal of subscription rights to shares

73

6

Reversal of provision for directors’ retirement benefits

18－

Total extraordinary income

91

6

Loss on sales of noncurrent assets－

0Loss on retirement of noncurrent assets

1

9Provision of allowance for investment loss

22

0

Loss on valuation of investment securities

8

52

Loss on valuation of stocks of subsidiaries and affiliates－

153

Loss on liquidation of subsidiaries and affiliates

－

38

Other

3

48

Total extraordinary loss

35

302

Non-operating income

Non-operating expenses

Ordinary profit
Extraordinary income

Extraordinary loss

15

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

2,115

2,078

Income taxes-current

879

771

Income taxes-deferred

(4)

(6)

Total income taxes

875

764

Income before minority interests

－

1,313

Minority interests in income

1

－

1,238

1,313

Income before minority interests

－

1,313

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

－

(175)

－

(176)

－

(351)

－

962

－

962

－

－

Income before income taxes and minority interests

Net income(Consolidated Statements of Comprehensive Income)

Total other comprehensive income
Comprehensive income(breakdown)Comprehensive income attributable to parent
company shareholders
Comprehensive income attributable to minority
shareholders

16

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

(3) Consolidated Statements of Changes in Net Assets(Millions of Yen)FY2010FY2011(April 1, 2009-(April 1, 2010

March 31, 2010)

March 31, 2011

Shareholders’ equity
Capital stock
Balance at the end of previous period

1,000

1,000

－

－

1,000

1,000

4,483

4,483

－

－

4,483

4,483

9,518

10,202

Dividends from surplus

(553)

(553)

Net income

1,238

1,313

684

760

10,202

10,963

(894)

(894)

Purchase of treasury stock

(0)

(0)

Total change of items during the period

(0)

(0)

(894)

(894)

14,107

14,792

Dividends from surplus

(553)

(553)

Net income

1,238

1,313

Purchase of treasury stock

(0)

(0)

Total change of items during the period

684

761

14,792

15,552

Changes of items during the period
Total change during the period
Balance at the end of current period
Capital surplus
Balance at end of previous period
Changes of items during the period
Total change of items during the period
Balance at the end of current period
Retained earnings
Balance at the end of previous period
Changes of items during the period

Total change of items during the period
Balance at the end of current period
Treasury stock
Balance at the end of previous period
Changes of items during the period

Balance at the end of current period
Total shareholders’ equity
Balance at the end of previous period
Changes of items during the period

Balance at the end of current period

17

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Balance at the end of previous period

60

414

Net change of items other than shareholders’ equity

354

(175)

Total change of items during the period

354

(175)

Balance at the end of current period

414

239

(121)

(133)

Net change of items other than shareholders’ equity

(11)

(176)

Total change of items during the period

(11)

(176)

Balance at the end of current period

(133)

(309)

(61)

281

Net change of items other than shareholders’ equity

342

(351)

Total change of items during the period

342

(351)

Balance at the end of current period

281

(69)

83

19

Net change of items other than shareholders’ equity

(64)

20

Total change of items during the period

(64)

20

Balance at the end of current period

19

39

34

36

Net change of items other than shareholders’ equity

1－

Purchase of shares of consolidated subsidiaries

－

(36)

Total change of items during the period

1

(36)

Balance at the end of current period

36－

Changes of items during the period

Foreign currency translation adjustment
Balance at the end of previous period
Changes of items during the period

Total accumulated other comprehensive income
Balance at the end of previous period
Changes of items during the period

Subscription rights to shares
Balance at the end of previous period
Changes of items during the period

Minority interests
Balance at the end of previous period
Changes of items during the period

18

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

Total net assets
Balance at the end of previous period

14,164

15,129Dividends from surplus

(553)

(553)

Net income

1,238

1,313

Purchase of treasury stock

(0)

(0)

Purchase of shares of consolidated subsidiaries

－

(36)

Net change of items other than shareholders’ equity

280

(331)

Total change of items during the period

965

392

15,12915,522

Changes of items during the period

Balance at the end of current period

19

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

(4) Consolidated Statements of Cash Flows(Millions of Yen)FY2010FY2011(April 1, 2009-(April 1, 2010

March 31, 2010)

March 31, 2011

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

2,115

2,078

238

289

Loss on valuation of memberships

0－

Increase (decrease) in provision for retirement benefits

6

(10)

Increase (decrease) in provision for directors’ retirement benefits

022

Increase (decrease) in provision for bonuses

033

Increase (decrease) in provision for directors’ bonuses

(0)

(0)

Increase (decrease) in allowance for doubtful accounts

5

(36)

Increase (decrease) in allowance for investment loss

(13)

(11)

Interest and dividend income

(51)

(82)

Interest expense

39

34

Loss (gain) on valuation of investment securities

8

52

Loss on valuation of stocks of subsidiaries and affiliates－

153

Loss (gain) on sales of noncurrent assets(0)0Loss on retirement of noncurrent assets

1

9Decrease (increase) in notes and accounts receivable—trade

1,328

101

Decrease (increase) in inventories

(394)

158

Increase (decrease) in notes and accounts payable—trade

121

(769)

Increase (decrease) in other liabilities

14

43

Increase (decrease) in accrued consumption taxes

(170)

53

Other, net

(129)

119

Subtotal

3,121

2,240

Interest and dividends income received

4367Interest expenses paid

(38)

(34)

Income taxes paid

(1,100)(815)

Net cash provided by operating activities

2,025

1,458

(33)

(111)

2

0

(422)

(163)

－

1

(2,243)(1,054)

Proceeds from sales of investment securities

24

350

Purchase of investments in subsidiaries

－

(32)

Payments of loans receivable

(527)

(607)

Collection of loans receivable

568

23

Depreciation and amortization

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

20

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

Payments into time deposits

(70)

(0)

Proceeds from withdrawal of time deposits

20－

Payments for guarantee deposits

(35)

(10)

Proceeds from collection of guarantee deposited

36

78

Other, net

(34)

(22)

(2,714)(1,548)Net increase (decrease) in short-term loans payable

(174)

(283)

Repayments of long-term loans payable

(10)

－

Purchase of treasury stock

(0)

(0)

(553)

(553)

－

(0)

(737)

(837)

(2)

(88)

Net increase (decrease) in cash and cash equivalents(1,428)(1,015)

Cash and cash equivalents at beginning of period

11,753

10,324

Cash and cash equivalents at the end of period

10,324

9,309

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

Cash dividends paid
Other
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents

21

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

Segment Informationa. Segment Information by Type of Business
Fiscal 2010 (from April 1, 2009 to March 31, 2010)(Millions of yen)
Systems
Development

SystemOperations
andInfrastructure
Development

17,831

4,130

12,09156

234

Total sales

17,887

Operatingexpenses

I Net Sales,
Operating Income
and Expenses
Sales(1) Sales tocustomers(2) Intersegment
sales ortransfers

Operating income
II Assets,
depreciation
expenses andcapital-related
expenditures
AssetsDepreciation
expensesCapital-related
expenditures
Notes:
1.

Eliminations/
Corporate

Consolidated

34,053－34,053

476

767

(767)

－

4,364

12,567

34,820(767)

34,053

15,871

3,394

11,76431,0301,024

32,055

2,016

970

803

3,789

(1,791)

1,997

8,416

1,958

4,917

15,292

11,912

27,204

167

19

49

236

1

238

193

68

86

348

0

348

Product
Sales

Total

Businesses are classified into segments according to similarities that include the types and characteristics of services.

2. Principal contents of business in each segment
Business segment

Systems Development

System Operations andInfrastructure Development

Product
Sales

Content of businessz Integrated system development ranging from defining requirements todevelopment and maintenance of mainframe-based large systems
z System integration covering system planning, development andintroduction of open systemsz Solutions business offering business tools that utilize various products
and toolsz Open source business that offers technical support for systems
through open source softwarez Operation management of computer systems and network systems
z Overall operation that includes data management and facilities
managementz Building of network systemsz Outsourcing services
z Sales of packaged software that includes licensing
z Sales of system devices, centering on servers, in integration services
z Consulting services related to the introduction of IT

3. Unallocatable operating expenses in Eliminations/Corporate amounted to ¥1,791 million for the fiscal year. These
consisted mainly of R&D expenses and expenses related to the Group’s management divisions.
22

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

4. Total Company assets in Eliminations/Corporate amounted to ¥12,038 million for the fiscal year. These consisted mainlyof the Group’s surplus operating assets (cash, deposits, and marketable securities), long-term invested assets (investment
securities) and deferred tax assets.
5. Depreciation expenses and capital-related expenditures included depreciation and additions to long-term prepaid
expenses, respectively.
6. Effective from the consolidated fiscal year under review, the SRA Holdings Group has applied the “Accounting Standard
for Construction Contracts” (Accounting Standards Board of Japan (ASBJ) Statement No. 15, December 27, 2007) andthe “Guidance on Accounting Standard for Construction Contracts” (ASBJ Guidance No. 18, December 27, 2007). The
impact of this change on each segment was minimal.

b. Geographical Segments
Fiscal 2010 (from April 1, 2009 to March 31, 2010)(Millions of yen)Japan
I Net Sales, Operating
Income and Expenses
Sales(1) Sales to customers(2) Intersegment sales ortransfers

Other Regions

Total

Eliminations/
Corporate

Consolidated

31,286

2,766

34,053－34,053

265

15

280

－

Total sales

31,551

2,782

34,333

(280)
(280)

34,053Operating expenses

29,3072,669

31,97778

32,055

Operating income

2,243

113

2,356

(359)

1,997

II

24,165

1,738

25,9041,300

27,204

Assets

Notes:
1. Countries and regions are categorized based on geographic proximity.
2. Because only small amounts of net sales were recorded in each country and region outside Japan, these countries andregions are aggregated under Other Regions.
Principal countries included in Other Regions are the United States and the Netherlands.
3. Unallocatable operating expenses in Eliminations/Corporate amounted to ¥359 million for the fiscal year. These
consisted mainly of expenses related to SRA Holdings.
4. Total Company assets in Eliminations/Corporate amounted to ¥1,478 million for the fiscal year. These consisted mainlyof the Group’s surplus operating assets (cash, deposits) and long-term invested assets (investment securities).
6. Effective from the consolidated fiscal year under review, the SRA Holdings Group has applied the “Accounting Standard
for Construction Contracts” (Accounting Standards Board of Japan (ASBJ) Statement No. 15, December 27, 2007) andthe “Guidance on Accounting Standard for Construction Contracts” (ASBJ Guidance No. 18, December 27, 2007). The
impact of this change on each segment was minimal.

c. Overseas Sales
Fiscal 2010 (from April 1, 2009 to March 31, 2010)(Millions of yen)
23

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

Other Regions
I

Overseas Sales

II

Consolidated net sales

Total

2,767

2,767

－

34,053

8.1

8.1

III

Overseas sales as a percentage ofconsolidated net sales (%)
Notes:

1. Countries and regions are categorized based on geographic proximity.
2. Because only small amounts of net sales were recorded in each country and region outside Japan, these countries andregions are aggregated under Other Regions.
Principal countries included in Other Regions are the United States and the Netherlands.
3. Overseas sales are those recorded by the Company and its consolidated subsidiaries in countries and regions outside
Japan.

24

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

Fiscal 2011 (from April 1, 2010 to March 31, 2011)
1. Summary of Reporting Segments
The Group’s reporting segments are those for which financial information separate from that of other units comprising theGroup can be obtained. Periodic reviews are made of reporting segments by the Board of Directors for determining theallocation 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 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 businessz

Integrated system development ranging from defining requirements todevelopment and maintenance of mainframe-based large systemsz

System integration covering system planning, development andintroduction of open systems

Systems Developmentz

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

SystemOperations

andInfrastructure Development

Product
SaleszOperation management of computer systems and network systemszOverall operation that includes data management and facilities
managementz

Building of network systemsz

Outsourcing servicesz

Sales of packaged software that includes licensingz

Sales of system devices, centering on servers, in integration serviceszConsulting services related to the introduction of IT

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.

3. Information Concerning Net Sales and Income or Losses, Assets, Liabilities and Others for Each Reporting
Segment

25

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2011

Consolidated Cumulative Total for Fiscal 2011 (from April 1, 2010 to March 31, 2011)(Millions of yen)AmountSystemOperations

Systems
Development

andInfrastructurerecorded on
Product

Adjustment

Total

Sales

the

*1

amountconsolidated
statements ofDevelopment

income *2

Sales(1) Sales to
17,9093,723

11,531

33,164－33,164

78

253

422

754

(754)

－

Total sales

17,988

3,977

11,95433,919(754)

33,164

Operating income

2,405

817

826

4,049

(1,810)2,238

Assets

8,083

1,568

5,668

15,320

11,13026,451

191

17

78

288

1

289

161

35

96

293

0

293

customers(2) Intersegment
sales ortransfers

OthersDepreciation
Increase of
tangible andintangible
assets
Notes:
1. The adjustment amounts are as follows:(1) The segment income adjustment of minus ¥1,810 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 in Eliminations/Corporate amounted to ¥11,258 million for the fiscal year. These consisted
mainly of the Group’s surplus operating assets (cash, deposits and marketable securities), long-term invested assets(investment securities) 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.
(Additional Information)
Effective from the first quarter of the current fiscal year, the Company adopted the “Accounting Standard for Disclosuresabout Segments of an Enterprise and Related information” (ASBJ Statement No. 17, March 27, 2009) and “Guidance on
Accounting Standard for Disclosures about Segments of an Enterprise and Related information” (ASBJ Guidance No. 20,
March 21, 2008).
26