Consolidated Financial Results for the Fiscal Year ended March 31, 2015
(April 1, 2014 through March 31, 2015)(Prepared pursuant to Japanese GAAP)All financial information has been prepared in accord with accounting principles generally accepted in Japan. This is a partial
English translation of the original Japanese-language document. All information pertains to consolidated results unlessotherwise noted. Information on the basis of presentation of consolidated financial statements does not appear in thistranslation.
May 8, 2015
Company name:
Stock exchange listings:
Stock code:
URL:
Representative:
Contact:
Phone:

IT Holdings Corporation
The First Section of the Tokyo Stock Exchange3626
http://www.itholdings.co.jp/e/Norio Maenishi, President
Akio Kita, Executive Officer, Deputy Division Manager, Administration Division+81 3-5338-2272

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

June 24, 2015
June 25, 2015
June 25, 2015

Supplementary materials to the full-year results:
Full-year results presentation held:

Available
Yes (targeted at institutional investors and analysts)

Figures in millions of yen are rounded down to the nearest million
1. Consolidated Results for the Fiscal Year ended March 31, 2015 (FY2015)(April 1, 2014 – March 31, 2015)(1) Consolidated Financial Results

Percentages indicate year-over-year changes
Net sales

millions of yen

Operating income%

millions of yen

Recurring profit%

millions of yen

Net income%

millions of yen%

10,275
7,913

29.8
34.9

FY2015361,025
4.1
21,121
8.3
21,251
12.0
FY2014
346,647
2.6
19,5107.4
18,9718.8
Note: Comprehensive income: FY2015: 33,173 million yen (213.3%); FY2014: 10,586 million yen (13.3%)
Net income
per share – basic

Net income
per share – diluted

Return on
shareholders’ equity

yen

yen

%

FY2015117.40
6.0
FY2014
90.16
90.12
5.2
For reference:
Equity in earnings (losses) of affiliated companies: FY2015: (205) million yen;

Ratio of recurring
profit to total assets

Ratio of operating
income to net sales

%

%

6.4
6.2

5.9
5.6

FY2014: (470) million yen(2) Consolidated Financial Position
Total assets
millions of yen

Net assets

Equity ratio

millions of yen

Net assets per share%yen

End-FY2015
345,851
188,789
53.3
End-FY2014
313,610
164,50249.9
For reference: Total equity: End of FY2015: 184,400 million yen End of FY2014: 156,452 million yen*Total equity = Shareholders’ equity plus total accumulated other comprehensive income

2,108.19
1,782.23(3) Consolidated Cash Flows
Cash flows fromoperating activities
FY2015FY2014

Cash flows frominvesting activities

Cash flows fromfinancing activities

Cash and cash equivalents
at the end of the period

millions of yen

millions of yen

millions of yen

millions of yen

22,93825,770(17,744)(5,334)(19,067)(5,872)

29,48543,142

2. Cash Dividends for Shareholders of Common Stock
Cash dividends per share
Record date or
periodEnd-Q1End-Q2End-Q3Year-end

yen

yen

yen

yen

Total

Total
dividends paid
(full year)

Payout ratio(consolidated)

Dividends
paid to net
assets(consolidated)

millions of yen

%

%

yen

8.00
FY2014
25.00
2,194
27.7
1.4
17.00
10.00
20.00
FY2015
30.00
2,624
25.6
1.5
FY2016 (forecast)
11.00
22.00
33.00
22.6
Note: From FY2016 (forecast), the Company changes its dividend policy from "a payout ratio of around 30% on a consolidated basis” to “atotal return ratio ((dividend payout + total share repurchase) / net income) of around 35% on a consolidated basis.”

3. Forecast of Consolidated Results for FY2016 (April 1, 2015 – March 31, 2016)

Net sales

Operating income

Percentages indicate year-over-year changes
Net Income
attributable to
Net income per
Recurring profit
Owners of theshare – basic
Parent Company

millions of yen%

millions of yen%

millions of yen%

millions of yen%

yen

175,000

1.2

8,500

10.8

8,500

6.5

4,600

18.3

52.59

370,000

2.5

23,50011.3

23,0008.2

12,80024.6

146.34First half of FY2016(six months ending Sep. 30,
2015)

Full FY2016(year ending Mar. 31, 2016)※Notes(1) Material reclassifications of subsidiaries during the period: None
(Changes in specified subsidiaries resulting in change in scope of consolidation)
Additions: None
Exclusions: None
(2) Changes in accounting policy, changes in accounting estimates, and retrospective restatement
1) Changes in accordance with amendments to accounting standards, etc.: Yes
2) Changes other than noted in 1) above: Yes
3) Changes in accounting estimates: None
4) Retrospective restatement: None
(3) Common stock issued
1) Issued shares as of period-end (including treasury stock):
End-FY2015 (March 31, 2015):
87,789,098 shares
End-FY2014 (March 31, 2014):
87,789,098 shares
2) Treasury stock as of period-end:
End-FY2015 (March 31, 2015):
320,444 shares
End-FY2014 (March 31, 2014):
4,337 shares
3) Average number of shares (during the fiscal year):
FY2015 (ended March 31, 2015):
87,522,469 shares
FY2014 (ended March 31, 2014):
87,774,621 shares*Audit Status
These materials are not subject to the audit procedure requirements of Japan’s Financial Instruments and Exchange Act. As ofthis report’s publication, an audit of the consolidated financial statements in accordance with the act had not been completed.
Caution on Forward-Looking Statements and Other Important Matters
This report contains forward-looking statements that reflect IT Holdings Corporation (ITHD)’s plans and expectations basedon information available to ITHD at the time of preparation and on certain other information ITHD believes to be reasonable.
These forward-looking statements are not guarantees of future performance, and actual results, performance, achievements orfinancial position may differ materially from those expressed or implied herein due to a range of factors.
For the assumptions underlying the forecasts herein and other notice on the use of earnings forecasts, refer to “(1) Analysis ofConsolidated Operating Results” on page 2 in the Accompanying Materials.

Accompanying Materials – Contents

1. Results of Operations

2(1) Analysis of Consolidated Operating Results

2(2) Analysis of Financial Condition

4(3) Basic Policy on Profit Distribution and Dividends for Fiscal 2015 and Fiscal 2016

5(4) Business and Other Risks

5

2. Status of the Group7

3. Management Policy

8(1) Basic Management Policy

8(2) Key Business Indicators

8(3) Medium- to Long-term Management Strategies8(4) Issues Requiring a Response

9(5) Other Important Management Matters

9

4. Basic Policy on Selecting Accounting Standards

9

5. Consolidated Financial Statements

10(1) Consolidated Balance Sheets

10(2) Consolidated Statements of Income and Comprehensive Income

12

Consolidated Statements of Income

12

Consolidated Statements of Comprehensive Income13(3) Consolidated Statements of Changes in Net Assets

14(4) Consolidated Statements of Cash Flows

16(5) Notes on the Going-concern Assumption

17

-1-

1. Results of Operations(1) Analysis of Consolidated Operating Results
Results for fiscal 2015 (ended March 31, 2015)
In fiscal 2015 ended March 31, 2015, despite sluggish growth stemming from a reactionary decline indemand following a spending surge prior to the consumption tax hike, concerns over economic trends
overseas, and other factors, the Japanese economy on the whole continued its steady recovery owing
mainly to improved corporate earnings.
In the IT services industry, to which the IT Holdings Group belongs, the business environment in Japanremained strong. The Bank of Japan’s Short-term Economic Survey of Enterprises in Japan, announced
quarterly during the period, indicated that corporate software investment plans continued to improve.
Under these circumstances, in the final year of its second medium-term management plan (from fiscal
2013 through fiscal2015), the Group promoted various initiatives under its Group management strategy.
Consolidated net sales for the Group in the fiscal year increased 4.1% versus the previous fiscal year to¥361,025 million. Operating income rose 8.3% to ¥21,121 million from a year earlier, recurring profit
increased 12.0% to ¥21,251 million, and net income rose 29.8% to ¥10,275 million.
Consolidated net sales grew year on year as the Group accurately grasped the IT investment needs of its
customers. Profits also increased, as the increase in sales and the control of unprofitable projects absorbed
expenses for strengthening the structure to acquire and execute multiple large-scale development projects.
Segment results for the fiscal year are as follows. The sales figures for each segment include inter-segment
sales.

1) IT Infrastructure Services
Consolidated sales rose 2.5% year on year to ¥118,200 million and operating income declined 6.2% to¥7,179 million. While net sales increased on the back of strong growth in the data center business,
operating income declined due to the reduction in the scale of some highly profitable projects with existingclients.
2) Financial IT Services
Consolidated sales in the fiscal year increased 5.8% year on year to ¥79,543 million, while operating
income declined 13.1% to ¥5,549 million. Sales grew as major customer credit card companies expanded
their IT-related investments and the Group promoted new solutions to the noncash settlement industry.
Operating income decreased due to expenses for structural reinforcement aimed at acquiring and executing
large-scale development projects and higher upfront expenses for providing new solutions.
3) Industrial IT Services
Consolidated sales increased 5.1% year on year to ¥166,357 million, and operating income increased
50.4% to ¥7,049 million. The sales increase reflected strong demand, led by manufacturing, service andretail industries. Operating income rebounded strongly, as the increase in sales and efforts to control
unprofitable projects absorbed higher expenses for consultative activities for large-scale and otherdevelopment projects.
4) OtherConsolidated sales declined 11.1% year on year to ¥14,667 million, and operating income rose 0.3% to¥2,159 million. This was mainly due to the impact of the sale of lease assets of TIS Leasing Co., Ltd. andwithdrawal from the leasing business as of the end of the previous fiscal year as part of efforts to promote
the development of a structure that would allow the Group to focus on the core businesses and growthfields.
With the aim of becoming an IT business that implements reforms as a single unit, the Group implemented
its second medium-term management plan featuring the basic concepts of “Top-Line Emphasis,” acting “asOne Company” and being “Enterprising and Bold”. In the fiscal year under review, which is the final yearof the plan, the Group set forth the following management strategy for fiscal 2015 in consideration of theachievements through fiscal 2014 and the implementation status of various measures, and promoted various
initiatives.

-2-

Second medium-term
management plan basic
concepts
Top-line Emphasis
as One Company
Enterprising and Bold

Group management strategy for fiscal 2015

Put emphasis on the amount of profit and profit ratio and maintain aGroup top-line that ensures them.
Focus on operating the Group with a sense of unity based onstrengthening of its communication base.
Bolster the Group’s efforts to expand the services-oriented businessand promote globalization.

IT Holdings Group’s key moves in fiscal 2015 were as follows:
1. “Top-Line Emphasis”
The Group focused its sales activities on accurately grasping the IT needs of its customers. TIS, Inc., forexample, acquired and began implementing large-scale system upgrade projects for public agencies, credit
card and credit sales companies. In February 2015, TIS also launched the EneLink energy industry solution
to meet expected investment demand from new companies entering the energy field in conjunction withelectric power system reforms.
The customer onsite service business was gradually consolidated into TIS Solution Link Inc. as part ofmeasures to transplant and consolidate business domains to pursue growth through business collaboration
between Group companies. At the same time, the Group transferred the embedded-type business of TIS
First Manage Inc. (absorbed by merger into TIS Solution Link) to Qualica Inc. to strengthen the Group’s
capability to respond to customer requests.
Moreover, in response to the growing demand for data centers in the Kansai region, TIS agreed with
Nomura Research Institute, Ltd. to cooperate on the joint operation of a new data center. The twocompanies signed a basic agreement in April 2014 and are making preparations to open the data center inthe summer of 2016.
2. “as One Company”
All Group companies started using a common logo in June 2014 to develop a sense of togetherness andstrengthen the brand, with the aim of operating the Group with a sense of unity. Furthermore, following asimilar initiative in the Tokyo area, the Group decided to consolidate its offices in the Osaka district insummer of 2015 in order to ensure smooth communication and promote cooperation.
Additionally, IT Holdings made consolidated subsidiary AGREX Inc. a wholly owned subsidiary inMarch 2015 in order to raise corporate value by strengthening competitiveness through reorganization ofGroup functions and enhancing consolidated management efficiency through the Group’s total optimization.
AGREX is now positioned as the core entity of the Group’s BPO business, strengthening collaboration
through such measures as the centralization of the BPO business currently scattered throughout the Group.
3. “Enterprising and Bold”
In its efforts towards globalization, the Group promoted business expansion targeting Japanese as well as
local companies in the respective countries based on alliance strategies. As part of these efforts, TIS agreed
on a capital and business alliance in April 2014 with MFEC Public Co., Ltd., a publicly traded IT company
in Thailand and a leading player in IT solution for the enterprise. In June 2014, TIS made I AM Consulting
Co., Ltd., a SAP total solution provider in Thailand, a consolidated subsidiary.
As part of the shift to services-oriented business, INTEC Inc. began providing municipal cloud services
shared by cities, towns and villages of Toyama Prefecture. INTEC has been providing municipal cloudservices such as an electronic bidding systems and tax document search systems. The new cloud service
utilizes CIVION-7th, a general administrative information system, to provide a backbone system central to
the local governments’ operations and services. This is the first shared use of a backbone system to be
implemented in Toyama Prefecture.
At the same time, Qualica Inc., with the aim of expanding its core aftermarket business, took over a partof Komatsu Ltd.’s CSS-Net business in April 2014. The move enables Qualica to combine CSS-Net’s
document computerization and Web broadcasting system with its own CareQube, a remote monitoring andpreventive maintenance system. It will use the acquisition to raise customer satisfaction.
The applications of CareQube continue to expand. In the growing Internet of Things (IoT) field, a
CareQube-based system to monitor elderly residents through water meter data has been jointly developedwith an NPO. As another leading-edge application, the Group has created an academic-industry alliancewith The University of Tokyo to develop a system for the logging industry to collect data on log andlumber attributes.
The Group will continue to consider and implement various measures from the perspective of overall
Group optimization in order to further raise corporate value.

-3-

Outlook for fiscal 2016
Customers’ IT investment needs are expected to continue expanding amid the economic recovery trend
in Japan. As a result, the business environment is expected to remain positive.
Amid this environment, the Group has initiated its third medium-term management plan (from fiscal
2016 through fiscal 2018) and is promoting a Group management strategy in accordance with the basic
concepts of “Profit Emphasis,” “IT Brain,” and “Portfolio Management.” On the basis of these policies, theGroup is promoting various initiatives to raise its corporate value.
Third medium-term
management plan basic
concepts
Profit Emphasis

IT Brain(expansion of value-added
business)
Portfolio Management

Group management strategy for fiscal 2016

(1) Emphasize ROE as the key performance indicator (KPI) andaim to raise corporate value(2) Improve business profitability through higher productivity(3) Manage with an emphasis on return on investment(1) Sharpen unique strengths and growth engines(2) Promote planned business initiatives (value-added business)(3) Promote industry platform business (market development
business)(1) Achieve business portfolio management(2) Implement “corporate governance reforms” as a Group(3) Integrate and consolidate common Group functions

The consolidated earnings forecast for the year ending March 31, 2016 are as follows.
Net sales
Operating income
Recurring profit
Net income¥370,000 million¥23,500 million¥23,000 million¥12,800 million(+2.5% year on year)(+11.3% year on year)(+8.2% year on year)(+24.6% year on year)

The Group expects both sales and profits to increase year on year. The Group plans to expand business by
accurately grasping the IT investment needs of customers, while raising profitability by improving
productivity, preventing unprofitable projects, and promoting other measures.
Note: The above performance forecast reflects IT Holdings Corporation’s plans and expectations based on
information available to the Company at the time of preparation and on certain other information the
Company believes to be reasonable. They are not guarantees of future performance and actual results,
performance, achievements or financial position may differ materially from those expressed or implied
herein due to a range of factors.

(2) Analysis of Financial Condition
1) Assets, liabilities, and net assets
Consolidated assets totaled ¥345,851 million at the end of the fiscal year (March 31, 2015), of which,current assets accounted for ¥140,450 million and fixed assets accounted for ¥205,401 million. Liabilities
totaled ¥157,062 million. Net assets totaled ¥188,789 million, of which minority interests accounted for¥4,388 million.
2) Cash flow
Cash and cash equivalents (“cash”) totaled ¥29,485 million as of March 31, 2015, down ¥13,656 million
versus the end of the previous fiscal year (March 31, 2014). Contributions to cash flow were as follows.
(Cash flow from operating activities)
Operating activities generated net cash of ¥22,938 million. This mainly reflects income before income
taxes of ¥18,184 million and the positive cash flow effect of ¥12,809 million in depreciation. These werepartly offset by a ¥10,229 million increase in notes and accounts receivable and ¥6,067 million in income
tax payments.
(Cash flow from investing activities)
Investing activities used net cash of ¥17,744 million, as an inflow of ¥2,423 million in proceeds from saleand redemption of investment securities was offset by outflows of ¥7,482 million in payments for theacquisition of property and equipment, ¥5,150 million for the acquisition of investment securities and¥5,400 million for the acquisition of intangible assets.
-4-

(Cash flow from financing activities)
Financing activities used net cash of ¥19,067 million. Cash inflows of ¥7,300 million in proceeds fromlong-term debt were outweighed by outflows of ¥13,949 million for repayment of long-term debt, ¥7,031
million for purchase of shares of subsidiaries not resulting in change in scope of consolidation, and ¥2,367
million for dividends paid.
For reference: Cash flow indicators
Fiscal 2014 Fiscal 2015
Equity ratio (%)
49.9
53.3
Equity ratio based on market capitalization (%)
47.4
55.7
Ratio of interest-bearing debt to cash flow
2.3
2.3
(years)Interest-coverage ratio (times)
41.1
43.0
Equity ratio: Total equity / Total assets
Equity ratio based on market capitalization: Market capitalization / Total assets
Ratio of interest-bearing debt to cash flow: Interest-bearing debt / Cash flow
Interest-coverage ratio: Cash flow / Interest paid
Notes:
1. All indicators were calculated using consolidated financial statement data.
2. Market capitalization is based on the number of shares issued and outstanding (excluding treasury stock).
3. Cash flow from operating activities is used as the cash flow variable.
4. “Interest-bearing debt” is all debt on the consolidated balance sheet on which interest in payable.

(3) Basic Policy on Profit Distribution and Dividends for Fiscal 2015 and Fiscal 2016
Taking into account the need to secure sufficient internal reserves to fund continued growth, the Company
plans to pay a year-end dividend of ¥20 per share for fiscal 2015.
Regarding the basic policy on profit distribution, the Company has striven to maintain a stable dividend
using the dividend payout ratio of around 30% as a benchmark. From fiscal 2016, however, the Company
will strive to provide even higher shareholder returns by raising its total return ratio benchmark, including
dividends and share buybacks, to around 35%. On the basis of this guideline, for fiscal 2016, the Company
plans to pay an annual dividend of ¥33 per share including, an interim dividend of ¥11 per share, andconduct share buybacks.
(4) Business and Other Risks
The following are the risks with the potential to have a significant impact on the business (business results
and financial condition) of the IT Holdings Group. All forward-looking statements in this document are
based on information available to the company as of May 8, 2015.
1) Price competition, intensified competition
Competition among businesses is intense in the information services industry. In addition to competition
from new entrants from other industries, clients are restraining their IT investments. As a result, pricecompetition may intensify. The Group is offering higher added-value information services and taking othermeasures to differentiate itself from competitors, while raising productivity. If price competition intensifies
more than expected, however, it may impact the Group’s business results.
2) Legal systems, compliance
The Group conducts its various business activities in compliance with laws and regulations in and outside
Japan. In conducting these activities, the Group has established a compliance structure on the basis of the
IT Holdings Group’s Basic Direction on CSR and thoroughly complies with all laws. If the Group were tocontravene the law, or a new law or regulation were introduced, it may impact the Group’s business results.
3) Overseas businessAs part of its growth strategy, the Group is pursuing growth in overseas markets, with a focus on ASEAN.
The overseas business may be impacted by various factors, including global economic and foreignexchange trends, legal regulations on investment and competition, business practices, and labor-related
issues. If one of these risks were to manifest, it may impact the Group’s business results.
4) System development
The Group performs development and outsourced development of various client company information
systems. In recent years, projects have become larger and development schedules have shortened. Ifplanned quality levels cannot be met or the projects are not completed within the development schedule,
larger-than-expected costs may be incurred. Furthermore, in developing systems, parts of projects are
typically outsourced to many different companies in order to ensure production capacity, raise productivity,-5-

utilize technical capabilities and for other reasons. There is the possibility, however, that productivity andquality fail to meet expectations. In this event, the Group’s business results may be impacted.

5) System operation
The Group uses large-scale IT facilities such as data centers to provide outsourcing 24 hours a day, 365
days a year, cloud services, and other services. The Group expends a large amount of capital to operatethese businesses, from initial capital investments to ongoing capital investments to ensure stable facility
maintenance and operation. If the operational status of these facilities declines significantly due to a decline
in demand, it may negatively impact the Group’s business results. Furthermore, in the system operation
business, if losses were to result from problems or failures to client systems, the Group’s business results
may be impacted as a result of a decline in the Group’s social trust and brand, claims for damages, or otherreasons.
6) Information security
From system development to operation, the Group is in a position to learn of various types of confidential
information in the conduct of its business, including personal information held by clients and clients’technological system information. Although the Group strives to manage information appropriately basedon the IT Holdings Group Information Security Policy, in the event that confidential information wereleaked or manipulated due to a computer virus, unauthorized access, or other reason, the Group’s businessresults may be impacted by claims for damages from client companies or the loss of trust.
7) Human resources
The Group’s business relies heavily on human resources and is greatly affected by its ability to secure anddevelop superior human resources who can offer specialized, high added value to clients. The Group’sbusiness results may be impacted in the event the Group cannot secure and develop superior humanresources according to its plans.
8) Technological innovation
In the information services industry, companies must rapidly respond to progress in information
technologies and the accompanying changes in market needs. The Group continually conducts research into
information technologies and production as well as development technologies, and is strengthening its
ability to conduct this research. The Group’s business results may be impacted, however, in the event theGroup is unable to appropriately respond to rapid progress in innovation over a broad realm oftechnologies.
9) Intellectual property
To execute its business, the Group applies for and acquires patents for necessary technologies and businessmodels as well as registers various trademarks in and outside Japan. The Group continually takes
precautions to ensure that it does not infringe the intellectual property rights of third parties during theexecution of its business activities. The Group may, however, be subject to claims for damages in the eventthat it infringes the intellectual property rights of another company. In any circumstance in which theGroup infringes the rights of a third party, the Group’s business and business results may be impacted
considerably.
10) Natural disasters and accidents
The Group uses data centers and other large-scale IT facilities to perform its outsourcing business andprovide cloud services. The data centers use various kinds of equipment to deal with disasters and accidents.
Despite these measures, a longer-than-expected power blackout, large-scale natural disaster, international
conflict, act of terrorism or major crime, or other such events that impede the smooth operation of the data
centers may affect the Group’s business results.
11) Owned securities
The Group owns shares as a way to strengthen relations with business partners or bonds as part of its fundoperations. The Group adequately confirms the reliability of these securities by determining the issuers’
financial condition, business results, credit rating and using other indicators. In the event of significant
fluctuations in stock markets, however, the Group’s financial condition and business results may be
impacted from the recognition of losses.

-6-

2. Status of the GroupThe Group consists primarily of IT Holdings Corporation (the parent company), 45 consolidated
subsidiaries, and 11 affiliated companies accounted for under the equity method. The Group’s core
activities comprise the provision of outsourcing and cloud services, software development, and solution
services, and the group also engages in businesses connected with these core activities such as consulting
services. The Group also provides other services, such as real estate rental and management services.
As a pure holding company, IT Holdings handles business administration issues for the Group andsupports Group companies in executing their respective business activities, which center on informationand communication services. The Group’s structure and business flow are shown below.

Customers

Financial IT Services

IT Infrastructure Services

Industrial IT Services≪Consulting≫

TIS Inc.

Consolidated subsidiaries:
1 company

Consolidated subsidiaries: 1 company
Consolidated subsidiaries:
4 companies
Equity-method affiliates:
4 companies

Consolidated subsidiaries:
1 company
Equity-method affiliates:
1 company≪Specialized Operations≫

INTEC Inc.
Consolidated subsidiaries:
1 Company
Equity-method affiliates:
2 companies

IT Service Force Inc.
SorunPure Inc.
Consolidated subsidiaries:
2 companies

Agrex Inc.
Consolidated subsidiaries:
1 company

Domestic

Consolidated subsidiaries:
4 companies
Equity-method affiliates:
2 companies

IT Holdings Corporation

Other Services

Consolidated subsidiaries:
5 companies

Qualica Inc.
AJS Inc.
Chuo System Corporation
NEOAXIS Co., Ltd.
North America≪Singapore≫≪Thai land≫≪Vietnam≫Consolidated subsidiaries: 1 company
Consolidated subsidiaries: 8 companies
Equity- method affiliates: 1 company

IT Holdings Group and affiliate companies

-7-

China
Consolidated subsidiaries:
6 companies
Equity-method affiliates:
1 company

Overseas

Consolidated subsidiaries:
1 company

ASEAN

3. Management Policy(1) Basic Management Policy
IT Holdings has established, and discloses, the following management philosophy, which is the corporate
cornerstone of the IT Holdings Group.
(Management Philosophy)
The IT Holdings Group seeks to be a corporate citizen, whose activities, namely, the provision of various
services maximizing the power of information technology, match its status as a leading corporate group,
and as a group, we will raise corporate value, supported in this effort by the high regard of all stakeholders,
not only shareholders but also clients as well as employees and their families.
We will cultivate a vibrant corporate culture that encourages companies and individuals under the Groupumbrella to work together, embracing new challenges and striving to reach higher goals, and thereby ensure
continued growth as a corporate entity.
We will always provide our clients with the very best products and services, through excellent quality
and technology built on the composite strengths of the Group.
We will uphold high corporate morals and fulfill our social obligations.
(2) Key Business Indicators
Amid dramatic business environment changes, such as the trend toward more complex and larger-scale
systems, the rise of service-oriented approaches, ongoing globalization, and rapidly advancing technology
innovation, the IT Holdings Group, a leading IT services group, endeavors to play an integral role increating a prosperous future for society.
The Group has established profit-oriented management (strengthening of earnings power) as part of its
targeted management image. ROE and other specific targets have been introduced to raise corporate value.
(3) Medium- to Long-term Management Strategies
Management has defined the corporate image—the vision—that the Group should strive to achieve.
Everyone under the Group umbrella shares this vision. It guides each person in the execution of daily
activities, which in turn, underpins attainment of the ideals to which the Group aspires and further enhances
corporate value.
(Group Vision)
1. Play an integral role in realizing the comfortable lifestyles of tomorrow through IT
As the leading IT services group, we will design the template and develop the businesses that support
several facets of tomorrow’s society—where IT is the driving force of brisk activity in all industries as wellas the creation of pleasant living environments where people feel safe and secure.
2. Act with initiative and a sense of enterprising spirit
We will be a group with a corporate culture that makes work enjoyable for employees. This atmosphere
will encourage people to quickly pinpoint currents of change rippling across various realms, including
society and technology, and resourcefully tackle emerging issues from a fresh perspective.
3. Secure the highest level of technological expertise
We will be a group that is constantly evolving, with an emphasis on new-technology R&D, production
techniques and quality control, to achieve the highest level of quality and sharpen cost competitiveness.
4. Contribute to societal and industry advances
As part of the IT services industry, we will be a group that plays a pioneering role in the overall
development of our industry, and as a member of society, we will be a group that faithfully carries out oursocial responsibility and contributes to the communities in which we share a presence. This two-foldcommitment will earn us a solid reputation from all directions.

(4) Issues Requiring a Response
Over the three fiscal years ended March 31, 2015, the IT Holdings Group implemented its second
medium-term management plan featuring the basic concepts of “Top-Line Emphasis,” acting “as One
Company” and being “Enterprising and Bold,” with the aim of developing a sense of unity andcohesiveness. As a result of the “Top-Line Emphasis” initiatives, net sales exceeded the targets. In terms of
profit, however, the targets for reducing unprofitable projects and raising productivity were not achieved,
and issues still remain.
In recent years, the external environment surrounding the IT market has been changing dramatically as aresult of new trends in the competitive environment and the emergence of cloud services and other
innovations. Under the second medium-term management plan, the Group achieved a certain amount of
success through the reorganization of its businesses, strengthened collaboration between businesses,
consolidation of corporate functions, and unification of the Group brand. In order to achieve medium- to-8-

long-term growth, however, the Group must build a management structure capable of utilizing the various
management resources more efficiently and further raising the competitiveness of the Group’s entire
business.
Starting April 1, 2015, the Group has launched a new three-year management plan with the slogan,“Beyond Borders 2017.” The main ideas behind the plan are to extend beyond the borders of the company
and organizations through collaboration and co-creation, to shift from existing business models tovalue-added business models, to expand from domestic business to global business, and to have employees
go beyond their own personal borders. The Group is taking various measures to achieve the new plan.
Basic Concepts of Third Medium-term Management Plan
(1) Profit-emphasis management (strengthen earnings power)
Place a greater management emphasis on profit.
1) Manage with an emphasis on net income2) Raise corporate value by introducing ROE and other management indices(2) Create added value as an “IT Brain” (shift to value-added business)
Offer added value to raise the earnings power of clients.
1) In addition to solving tasks in accordance with client requirements, expand added value creation
business and market development business
2) Promote industry platform business and global business(3) Promote portfolio management
Leverage the unique strengths of each individual business to serve as growth engines, and promote
working together for collaboration as well as working together for co-creation.
1) Develop and execute business portfolio strategies
2) Strengthen and rebuild the business foundation by pursuing overall Group optimization(5) Other Important Management Matters
None
4. Basic Policy on Selecting Accounting Standards
The IT Holdings Group is conducting an analysis to determine the differences between International
Financial Reporting Standards (IFRS) and Japanese standards, as well as the impact of adopting IFRS. At
the current time, the adoption of IFRS has yet to be decided.

-9-4. Consolidated Financial Statements(1) Consolidated Balance Sheets
As of Mar. 31, 2014
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable
Lease receivables and lease investment assets
Marketable securities
Merchandise and finished goods
Work in process
Raw materials and supplies
Deferred tax assets
Other current assets
Allowance for doubtful accounts
Total current assets
Fixed assets
Property and equipment
Buildings and structures, net
Machinery and equipment, net
Land
Leased assets, net
Other property and equipment, net
Total property and equipment
Intangible assets
Goodwill
Other intangible assets
Total intangible assets
Investments and other assets
Investment securities
Net defined benefit asset
Deferred tax assets
Other assets
Allowance for doubtful accounts
Total investments and other assets
Total fixed assets
Total assets- 10 -

As of Mar. 31, 2015

millions of yen

millions of yen

43,24868,301
6,654
226
3,207
6,757
229
6,603
8,450
(159)
143,519

29,211
78,874
6,711
661
4,552
5,546
243
6,007
8,784
(143)
140,450

56,565
4,428
20,726
4,738
5,153
91,61253,6704,853
24,342
3,995
4,552
91,413771
14,802
15,573

1,197
15,555
16,75238,787
4,103
6,881
13,362(229)
62,905170,091
313,610

71,256
7,028
5,199
14,034(283)
97,235
205,401
345,851

As of Mar. 31, 2014
Liabilities
Current liabilities
Notes and accounts payable
Short-term borrowings
Income taxes payable
Accrued bonuses to directors and employees
Other allowances
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term debt
Lease obligations
Deferred tax liabilities
Deferred tax liabilities from revaluation of land
Accrued retirement benefits to directors
Net defined benefit liability
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Common stock
Additional paid-in capital
Retained earnings
Less treasury stock, at cost
Total shareholders’ equity
Accumulated other comprehensive income
Net unrealized gains on other securities
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Stock acquisition rights
Minority interests
Total net assets
Total liabilities and net assets- 11 -

As of Mar. 31, 2015

millions of yen

millions of yen

18,82814,2993,495
10,932
1,007
24,226
72,79021,681
12,521
3,140
11,331
1,318
27,673
77,66644,570
6,160
470
732
88
18,6885,606
76,316
149,107

39,593
5,497
10,720663
90
16,874
5,955
79,395
157,062

10,00186,786
57,579(6)
154,360

10,001
83,601
67,019(514)
160,107

5,975(1,967)48(1,964)
2,092
45
8,004
164,502313,610

26,191(1,898)396(397)
24,292
4,388
188,789
345,851

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
FY2014
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Foreign exchange gains
Rental income from real estate
Other
Total non-operating income
Non-operating expense
Interest expenses
Equity in losses of affiliated companies
Rent expenses on real estates
Financing expenses
Other
Total non-operating expenses
Recurring profit
Extraordinary income
Gain on sale of investment securities
Gain on termination of retirement benefit plan
Gain on reversal of stock acquisition rights
Other
Total extraordinary income
Extraordinary loss
Loss on disposal of fixed assets
Impairment loss
Loss on business liquidation
Special severance pay
Loss on partial termination of retirement benefit scheme
Other
Total extraordinary loss
Income before income taxes and minority interests
Income taxes: current
Income taxes: deferred
Total income taxes
Income before minority interests
Minority interests in earnings (losses) of consolidated
subsidiaries
Net income- 12 -FY2015

millions of yen

millions of yen

346,647
283,881
62,76643,255
19,510361,025
294,927
66,09744,97621,121

38
644
88
259
626
1,656

74
744
206
265
472
1,762

598
470
211
350
564
2,195
18,971

519
205
238
668
1,632
21,251

817
45
862

377
59
58
3
500

269
1,073
463
608
148
834
3,398
16,435
5,459
2,353
7,813
8,622

354
1,566
67
44
1,533
3,567
18,184
5,417
1,865
7,282
10,901

708

626

7,913

10,275

Consolidated Statements of Comprehensive Income
FY2014
Income before minority interests
Other comprehensive income
Net unrealized gains on other securities
Revaluation reserve for land
Foreign currency translation adjustments
Remeasurements of defined benefit plans
Share of other comprehensive income of equity-method
affiliates
Total other comprehensive income
Comprehensive income(Composition)
Comprehensive income attributable to owners of the parent
Comprehensive income attributable to minority interests- 13 -FY2015

millions of yen

millions of yen

8,622

10,901

1,689
249
-

20,239
68
379
1,569

24

14

1,963
10,58622,27133,1739,813
773

32,474698

(3) Consolidated Statements of Changes in Net Assets
FY2014 (April 1, 2013 through March 31, 2014)
Shareholders’ Equity
Common stock

Additional paid-in
capitalRetained earnings

Treasury stock

Total shareholders’equitymillions of yen

millions of yen

millions of yen

millions of yen

millions of yen

Balance at beginningof fiscal year
Cumulative effects ofchanges in accounting
policies
Restated balance

10,00186,78751,596

148,357-

10,00186,78751,596

Changes during the
fiscal year
Dividends fromsurplus
Net income
Acquisition of treasury
stock
Disposal of treasury
stock
Purchase of shares of
consolidated
subsidiaries
Items other thanchanges inshareholders’ equity,net
Net changes during the
fiscal year
Balance at end of fiscal
year

Balance at beginningof fiscal year
Cumulative effects ofchanges in accounting
policies
Restated balance

(27)

(27)

148,357(1,930)(1,930)

7,913

7,913

(1)

(8)

(8)

29

27
-

-

-

(1)

5,982

21

6,002

10,00186,786

57,579(6)

154,360

Accumulated other comprehensive income
Net
RemeasurTotal
Stock
Foreignunrealized Revaluation
ements of accumulatedacquisition
currency
gains onreserve fordefinedotherrightstranslation
other
land
benefit comprehensive
adjustments
securities
plans
incomeMinority
interests

Total net
assetsmillions ofyenmillions ofyenmillions ofyenmillions ofyenmillions ofyenmillions ofyenmillions ofyenmillions of
yen

4,271

(1,967)

(147)

－

2,157

42

7,602

158,159-

4,271(1,967)

(147)

－

2,157

42

7,602

Changes during the
fiscal year
Dividends fromsurplus(1,930)Net income
Acquisition of treasury
stock
Disposal of treasury
stock
Purchase of shares of
consolidated
subsidiaries
Items other thanchanges inshareholders’ equity,net
Net changes during the
fiscal year
Balance at end of fiscalyear

158,159

7,913
(8)
27
-

1,703

-

196

(1,964)

(64)

3

402

341

1,703

-

196

(1,964)

(64)

3

402

6,343

5,975

(1,967)48(1,964)

2,092

45

8,004

164,502- 14 -

FY2015 (April 1, 2014 through March 31, 2015)
Shareholders’ Equity
Common stock

Additional paid-in
capitalRetained earnings

Treasury stock

Total shareholders’equitymillions of yen

millions of yen

millions of yen

millions of yen

millions of yen

Balance at beginningof fiscal year
Cumulative effects ofchanges in accounting
policies
Restated balance

10,00186,786

57,579154,360

1,532
10,00186,786

Net income
Acquisition of treasury
stock
Disposal of treasury
stock
Purchase of shares of
consolidated
subsidiaries
Items other thanchanges inshareholders’ equity,net
Net changes during the
fiscal year
Balance at end of fiscal
year

1,532

59,111

Changes during the
fiscal year
Dividends fromsurplus(6)

155,892(2,367)(2,367)

10,275

10,275
(508)

(508)
-

(3,184)(3,184)-Net
unrealized
gains onothersecurities
Balance at beginningof fiscal year
Cumulative effects ofchanges in accounting
policies
Restated balance(6)-(3,184)

7,908

(508)

4,215

10,001

83,601

67,019(514)

160,107

Accumulated other comprehensive income
RemeasurTotal
Stock
Foreign
Revaluation
ements of accumulatedacquisition
currency
reserve fordefinedotherrightstranslation
land
benefit comprehensive
adjustments
incomeplans

Minority
interests

Total net
assetsmillions ofyenmillions ofyenmillions ofyenmillions ofyenmillions ofyenmillions ofyenmillions ofyenmillions of
yen

5,975

(1,967)48(1,964)

2,092

45

8,004

164,502
1,532

5,975

(1,967)48(1,964)

2,092

45

8,004

Changes during the
fiscal year
Dividends fromsurplus(2,367)

Net income
Acquisition of treasury
stock
Disposal of treasury
stock
Purchase of shares of
consolidated
subsidiaries
Items other thanchanges inshareholders’ equity,net
Net changes during the
fiscal year
Balance at end of fiscal
year

166,035

10,275(508)(3,184)

20,216

68

347

1,566

22,199(45)(3,615)

18,53820,216

68

347

1,566

22,199(45)(3,615)22,753

26,191(1,898)

396

(397)

24,292-

4,388

188,789- 15 -

(4) Consolidated Statements of Cash FlowsFY2014

Items
Cash flows from operating activities
Income before income taxes and minority interests
Depreciation
Impairment loss
Loss on disposal of fixed assets
Amortization of goodwill
Increase (decrease) in accrued bonuses to directors and employees
Increase(decrease) in allowance for doubtful accounts
Increase (decrease) in accrued retirement benefits to employees
Increase (decrease) in net defined benefit liability
Interest and dividend income
Interest expenses(Increase) decrease in notes and accounts receivable(Increase) decrease in inventories
Increase (decrease) in notes and accounts payable
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of marketable securities
Proceeds from sale and redemption of investment securities
Acquisitions of property and equipment
Acquisitions of intangible assets
Acquisitions of investment securities
Proceeds from sale and redemption of investment securities
Payment of lease and guarantee deposits
Collection of lease and guarantee deposits
Proceeds from transfer of business
Purchase of shares of subsidiaries resulting in change in scope of
consolidation
Other, net
Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase (decrease) in short-term borrowings, net
Proceeds from long-term debt
Repayments of long-term debt
Dividends paid
Dividends paid to minority shareholders
Purchase of shares of subsidiaries not resulting in change in scope of
consolidation
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Increase in cash and cash equivalents resulting from merger
Cash and cash equivalents at end of year

- 16 -FY2015

millions of yen

millions of yen

16,435
12,454
1,073
269
1,095
(151)
(1,513)(12,762)
13,958(682)
598(1,597)
142
1,138
843
31,304695(626)(5,602)
25,77018,184
12,809
1,566
354
863
388
38
(389)
(819)
519
(10,229)
(148)
2,516
3,051
28,707831(533)(6,067)22,938(22,499)
27,699(6,220)(5,409)(8,388)
4,709
(397)
758
4,920

(3,400)3,425(7,482)(5,400)(5,150)
2,423
(967)
537
259

-

(926)

(505)
(5,334)(1,062)(17,744)(223)
30,850(32,664)(1,930)
(323)

(412)
7,300
(13,949)(2,367)(351)-(7,031)(1,579)(5,872)140
14,70328,433
4
43,142(2,255)(19,067)217(13,656)
43,142
29,485(5) Notes on the Going-concern Assumption
Not applicable- 17 -