Annual
Report2013
For the Year Ended March 31, 2013

Message from the President

Page 2We are succeeding in gaining
a steady foothold, despite significant
changes in the operating environment.
Kazuhiro Maegawa, President
New Medium-Term Management Plan Page 6

Delivering Higher Levels of Customer
Satisfaction through IT as a Service
Business Overview Page 12
CSR Page 14
Corporate Governance Page 16

Corporate History

The Company was established in 1999, when the information system department of the former Matsushita
Electric Works, Ltd., became independent. For some 50 years since that time, based on our technical expertise
we have offered total solutions for information systems from planning and designing to development, operationand maintenance.
Our strength lies in our on-site capabilities cultivated by staying closely in tune with site needs, solving
problems through trial and error. We strive to deliver useful solutions from the customer’s perspective.

Medium-Term
Management Plan

（Fiscal 2013-2015）

Medium-Term
Management Plan

2012

（Fiscal 2010-2012）

Change in corporate nameto Panasonic Information
Systems Co., Ltd.

2009 Establishment of the Osaka Central
Data Center2008 Change in corporate name to

Panasonic Electric Works Information Systems
Co., Ltd.

2004 Listing on the First Section of the Tokyo Stock Exchange
2003 Listing on the Second Section of the Tokyo Stock Exchange
2001 Listing of the stock on the over-the-counter market (JASDAQ)
1999 Establishment of Matsushita Electric Works Information Systems Co., Ltd.

1961 Establishment of an information system department
at the former Matsushita Electric Works, Ltd.

To strive for the creation of new values,by pursuing user-friendliness andaccomplishing high-tech mindset, driven bychallenging spirits and full speed of actions

Corporate
VisionOur Philosophy

For the creation of
information systems
embedded with computers
to be unnoticed by people

Corporate
SloganActionGuideline

Listen, think andcreate solutions

Consolidated Financial Highlights

Panasonic Information Systems Co., Ltd. and consolidated subsidiaries
Years Ended March 31

Millions of Yen

Thousands of U.S.
Dollars *1

2012

2011

2010

2009

2013

¥ 35,179¥ 36,373¥ 34,221¥ 36,650¥ 37,320$ 374,245

Operating income

4,425

4,255

4,205

4,371

4,632

47,074

Net income

2,702

2,227

2,581

2,563

2,783

28,745

Net cash provided by operating activities

4,670

3,834

3,154

4,483

3,864

49,681

Net cash (used in) provided by investing activities（12,299）

6,908）（2,862）（2,829）Net cash used in financing activities

（940）

（903）

（821）

（863）

（710）

（10,000）

Cash and cash equivalents

5,500

14,069

4,230

4,759

3,968

58,511

Total assets

31,35529,012

27,31725,14623,211

333,564

Equity24,83822,85921,35919,65917,604

264,234

Net sales

Consolidated
Financial Highlights

2013¥ 253.56¥ 209.02¥ 242.25¥ 240.51¥ 261.13

Full-year dividends per share

65.00

65.00

65.00

65.00

75.00

Operating income to net sales

12.6%

11.7%

12.3%

11.9%

12.4%

Return on equity

11.3%

10.1%

12.6%

13.8%

16.8%

Equity ratio

79.2%

78.8%

78.2%

78.2%

75.7%

U.S. Dollars *1

2.70

$

0.69

Business Overview

Basic net income per share*2

New Medium-Term
Management Plan

Yen

Message fromthe President（3,866） （130,840）*1. Amounts expressed in U.S. dollars are calculated using the exchange rate prevailing on March 29, 2013 of ¥94 to US $1.00.
*2. Diluted net income per share is not indicated here, because there are no potentially dilutive shares.
CSR

Operating Income/Operating Income to Net Sales

Net Income

Basic Net Income per Share(Millions of Yen)

(Millions of Yen / %)(Millions of Yen)

(Yen)

37,320 36,650

36,37335,17934,221

261.13
4,632

2,783
4,371

4,205

4,255 4,425

2,702

2,563 2,581

240.51 242.25

Corporate Governance

Net Sales

253.56209.02

12.4

12.3

12.6
11.7

2009 2010 2011 2012 20132009 2010 2011 2012 2013

Corporate Data
Stock Information2009 2010 2011 2012 2013

11.9

Financial Section

2,227

2009 2010 2011 2012 2013

Operating Income (Millions of Yen)
Operating Income to Net Sales (%)

Cautionary Statement with Respect to Forward-Looking Statements
This annual report contains forward-looking statements that reflect the Panasonic Information Systems Group’s plans, business strategies and targets. These statements are inaccordance with assumptions and beliefs determined by management based on currently available information and involve uncertainties and changes in the business environment
at home and abroad. Actual results and business performance may differ materially from these statements.

Panasonic Information Systems Co., Ltd.
Annual Report 20131

Message from the President

We are succeeding in gaining a steadyfoothold, despite significant changes in
the operating environment.
Nurturing Budding Strength

Review of the Medium-Term Management Plan
(Fiscal 2010–2012)
From 2010:
The Start of Major Change“Nextructure” as a systematic solution

initiatives that we had been pursuing tothat embodies the experience we have

expand external sales began to steadily

We formulated a three-year medium-built up in constructing and operating

bear fruit. During the year, we acquired

term management plan around the timesystems.

such large-scale projects as a thin

I was appointed president in April 2010.

In July 2010, Panasonic announced

client system for the Fuji Educational

At the time, this plan had three themes,

plans to convert Panasonic ElectricCommittee and cloud services for Nidec

namely to strengthen external sales

Works to a consolidated subsidiary in

Corporation. We also successfully(meaning sales to companies outside theApril 2011 and dramatically reconfigure

received orders for a ticketing systemformer Panasonic Electric Works Group),

the Panasonic Group domain in January

we were promoting in cooperation with

contribute to the former Panasonic2012. As the new framework was

the Panasonic Group from TOKYOElectric Works Group and bolster our

expected to involve system changes,

SKYTREE, KYOTO AQUARIUM andmanagement constitution. The plan’s

many of our system development

SUMIDA AQUARIUM. Furthermore, wetargets were to reach consolidated net

p ro d u c t s t h a t w e re u n d e r w a y f o r

introduced the ERP package “GRANDIT”

sales of ¥40,000 million, consolidated

Panasonic Electric Works were delayed

as a solution centered on system

operating income of ¥4,900 million and aor canceled.

integration for core functions, leading

consolidated operating margin of 12.3%

As a result, in the fiscal year ended

by the fiscal year ended March 31, 2013.

March 31, 2011, net sales amounted to

One of the measures of this plan

¥34,221 million, and operating income

was to expand external sales, and aswas ¥4,205 million.

part of that effort we relocated andexpanded our Tokyo office. At the same

customers.
We also faced some major challenges
in our business for the Panasonic Group.
In August 2011, Panasonic announced
the absorption-type merger of Panasonicdevelopment team in Osaka to Tokyo

From 2011:
Expanding External Sales andWorking on One Panasonicwith the aim of accelerating our response

With the Great East Japan Earthquake

We energetically took part in some of

to customer needs, and reinforced our

occurring in March, the start of 2011

the restructuring activities, such as

sales capacity in Tokyo in other ways.

was characterized by a sharp fall in

integrating and linking the systems ofIn the same year, we began offeringbusiness confidence. Nevertheless, theGroup companies. Recognizing that thistime, we shifted some members of our2

to a strong increase in the number ofPanasonic Information Systems Co., Ltd.
Annual Report 2013

Electric Works. Activities in response to“One Panasonic” suddenly accelerated.

Consolidated
Financial Highlights

Message fromthe President

New Medium-Term
Management Plan
Business Overview

CSR

Corporate Governance

Financial Section

Kazuhiro Maegawa

President

Corporate Data
Stock Information

3

Panasonic Information Systems Co., Ltd.
Annual Report 2013

Message from the President

was a project that must succeed at allother equipment on a stand-alone basis,of the mark, with net sales amounting

costs, our employees pulled together

we clarified our structure for offering

to ¥35,179 million. On the otherand worked tirelessly to bring it to athem as sets together with solutions.

hand, rationalization and streamlining

successful conclusion.

In May 2012, we completed the One

contributed to increases in operating

Consequently, in the fiscal year ended

Panasonic project, which we had been

income, which exceeded the previous

March 31, 2012, net sales came to

involved in for around a year and a half.

year’s level and amounted to ¥4,425¥36,373 million, and operating income

At that point, we continued to makemillion. Although below the targets

was ¥4,255 million.

proposals to Panasonic Corporation Eco

we had set in 2010, we achieved an

Solutions Company, which is Panasonicoperating margin of 12.6%, a record high.

From 2012:
Initiatives Targeting the Next
Phase of GrowthGroup company regarding an order for IT

We began business in 2012 amid

to the acquisition of a large-scale project

Broadly speaking, these were the major

major changes occurring in the Group’s

in the summer of 2012.

trends over the past three years. To

systems related to the company’s nextstage growth strategy. These efforts led

Three Years in Review

framework and operating environment.

Unfortunately, however, our final

summarize, conditions were undeniably

For the general market (external sales),push for new project orders fell shortdifficult for us as the result of major

we began the full-fledged provision of・Cultivate new customers in the general market

services via the cloud environment we
had received orders for and constructed
in t h e p re v iou s f i s c a l y e a r, wh i c hcontributed to a significant increase insales. In system development projects,
as well, we launched several services

・Make the step up from growth businesses to core businesses
Medium-Term
Management
・Support the business systems of the Panasonic Group
Plan(Fiscal 2010–2012)

Milestones

using the ERP system we began

・Combine Panasonic products with IT, preparing the groundand planting the seeds for new business・Make significant quality improvements on both the operationaland development fronts

promoting in the preceding term.

Sales
discussion

Meanwhile, rather than selling PCs andInformation provision
Proposals

Quality control by
PMO

Estimatel Set up in April 2012l Training/monitoring/

management of entire/
individual project

Operation

Development

Contract

4

Requirement definition
DesignQuality control byCMMI®

l Achieved Level 3

in December 2008l Began working to reachLevel 4 in 2014

Development
Testing
Operation and maintenancePanasonic Information Systems Co., Ltd.
Annual Report 2013

Quality control
by ISO 20000

l Acquired in February 2011l Continue fixed activities

can assist this trend. I see this solution

the client that had previously provided a

profits, I believe that these developments

as the point at which we provide true

stable source of revenue and income—resulted in higher levels of customer

value. (See the “New Medium-Termthe former Panasonic Electric Workssatisfaction.

Management Plan” on page 6.)

Group. Even so, I am proud of the fact

*CMMI® (Capability Maturity Model Integration)
Process improvement model for software and systems
developed at the Software Engineering Institute of Carnegie
Mellon Universitythat we sowed the seeds for growth bysolidifying our position in the general
Panasonic Group.

Future Measures

Shareholder Returns
We believe that providing returns to

New Medium-Term
Management Plan

market and for business from the

Message fromthe President

increasing our capacity for earning highConsolidated
Financial Highlights

changes in the operating environment forshareholders is one of the management’s

We have now formulated a medium-term

most important priorities. We havemanagement plan for the three years

adopted a policy to actively and stably

business areas” defined in this plan.

beginning from April 2013. Generally

distribute surplus funds based on

Over the course of the plan, net sales

speaking, we plan to continue moving

financial performance while keepingrose 75% compared with the initial year.

in the same direction as we have in thein mind the need to increase internal

I believe that cultivating these growth

past. That being said, the environment

reserves to reinforce our managementbusinesses into core businesses that will

is no longer the same and we ourselves

foundations and ensure long-term growth.

support our management going forward

cannot afford to maintain the same

For the fiscal year ended March 31,

contributed greatly to these results.

2013, we awarded dividends of ¥65 per

We will need to be more ambitious andshare, for a consolidated payout ratio ofin terms of bolstering our management

feel a sense of urgency as we think

25.6%.

constitution. In addition to the rationalization

about new developments.

CSR

consciousness we have had in the past.

We have also enjoyed some successBusiness Overview

Of particular importance are theadvances we made in the “five growth

For the fiscal year ending March 31,
2014, we plan to award dividends frombusiness environment is characterized

surplus funds twice, with record dates

f ro m t h o ro u g h e ff o r t s t o i m p ro v e

by anticipation of a recovery, fueledof September 30 and March 31, eachquality on both the operational andby yen depreciation and higher stock

amounting to a regular dividend ofd e v e lop m en t fro n t s . We a c q u i re dprices. Even so, the climate is marked¥32.50 per share. This figure results in

ISO 20000 certification in 2011, andby a strong sense of caution with regard

an annual dividend of ¥65 per share andowing to ongoing quality improvement

to the future, prompting austerity toward

a consolidated payout ratio of 25.5%.

activities based on this certification, thecorporate IT investments. This trend

Again this year, our executives andamount of money lost on operations

can be also explained as IT needs

employees will make a vigorous push tofell by approximately 12% over three

undergoing a shift in focus, from themove the Company to a new stage®

years. In addition, we adopted CMMI *enhancement of operational efficiency toof business.

to manage development quality andcontribution to management. Ongoing

conducted training and monitoring via

globalization and the forward march of

the Project Management Office (PMO).

technology are requiring ever greater

As a result, the “number of projects tomanagement speed. In core businesses,

be monitored,” meaning the number ofcompanies invest in management

high-risk projects that require stronger

resources; in non-core businesses they

monitoring during development, reachedseek efficiency improvements. Thez e ro i n M a rc h 2 0 1 3 . R a t h e r t h a nquestion for us to answer is how IT

Financial Section

As of June 2013, the Japaneseplace, we began to see good progress

Corporate Governanceand streamlining initiatives that were in

We ask for the ongoing support of ourinvestors.

Corporate Data
Stock Information

July 2013

Kazuhiro Maegawa
President

Panasonic Information Systems Co., Ltd.
Annual Report 20135

New Medium-Term Management Plan

Medium-Term Management Plan (Fiscal 2013–2015)

Delivering Higher Levels of
Customer Satisfaction through IT as a Service

The Company has recently formulated the MediumTerm Management Plan (Fiscal 2013–2015).
Since 2010, we have continued working in linewith three themes: “strengthen the general market,”“reinforce partnership with the Panasonic Group”
and “bolster management constitution.” Our policy
going forward will be “aim to earn higher customer

From 2013

satisfaction through IT as a service.” By achieving
this objective, we will progress from simply beinga partner in system development and operations

Aim to be a true
business partner

to become a partner that contributes to actual
operations and management.

From 2010
Expand into the generalmarket with on-site
capabilities

Founding period
Take on thegeneral market

Maintain and establish
an IT environment
within the Group

Department within the Company

6

Panasonic Information Systems Co., Ltd.
Annual Report 2013

Consolidated
Financial Highlights

Outline of the Plan and Our Business Development
Broaden and Deepen Value Our Initiatives to Date
The outline of our plan involves continuing the themes under which we have progressed for the past three years. However, we
aim to deepen and expand our initiatives to date.
In other words, as we pursue these themes, we will focus even more on the keywords “new” and “service,” develop businessMessage fromthe President

in new markets while maintaining the ability to earn high profits and use IT collaboration with Panasonic products as the catalyst
to unlock new potential. This will be our mission for the next three years.
To achieve these goals, we will develop our business along the combined lines of a “client orientation” and a “product orientation.”

Broaden and Deepen Value All Our Efforts to Date
Product
Orientation

Propose optimal
solutions to meet
individual clients’
needs

Propose productsthat leverage ouraccumulated
experience andexpertise

Business Overview

Reinforce
IT collaboration
with the Panasonic partnership with thePanasonic GroupGroup

Strengthen
the generalmarketClientOrientation

New Medium-Term
Management Plan

Driver for creating new possibilities

IT infrastructure
construction/
operation

General market

ERP systemconstruction

Bolster management constitution

Panasonic GroupCSR

IT collaboration
with the PanasonicGroup

Focus more on new and service

New products/
solutions

Develop business in new markets while
maintaining high profitability

Corporate Governance

Performance Targets for the Medium-Term Management Plan
(Fiscal 2013–2015)

By the fiscal year ending March 31, 2016, we are targeting net sales of ¥38,000 million and operating income of ¥4,600 million.

34,22136,373Operating Income/Operating Income to Net Sales
35,17938,00036,000 37,000(Millions of Yen / %)

4,205
12.3

2012

2013

2014
(Plan)

2015(Plan)

2016(Plan)

2011

4,255
11.7

2012

4,425
12.6

2013

Operating Income (Millions of Yen)

4,450 4,500
12.4

2014

（Plan）

12.2

2015（Plan）

4,600
12.1

Corporate Data
Stock Information

2011

Financial Section

Net Sales(Millions of Yen)

2016

（Plan）

Operating Income to Net Sales (%)

Panasonic Information Systems Co., Ltd.
Annual Report 20137

New Medium-Term Management Plan

Strengthen the General Market

Propose Optimal Solutions to Meet Individual
Clients’ Needs
Develop along a “Key Business Areas” Orientation
Business Deployment Centering on Clientsand Products

Client orientation
Product orientationl IT infrastructure

construction/operationl ERP system constructionl IT collaboration
with the Panasonic Groupl New products/services

1“Key Business Areas”

l General market
l Panasonic Group2

ICT infrastructureservice
System integrationof core functions

Collaboration with3
the PanasonicGroup
4

Creation ofsomething new

One important initiative targeting customers in the generalmarket is to foster even stronger relationships with thecustomers that have had a business connection with us.
We will make a thoroughgoing effort in two areas.
First, rather than our business being over once we havedelivered the requested systems and equipment, while
launching additional services we will work consistently tocontribute to our clients by uncovering potential needs. In
addition, we will continue to provide services until businessissues are resolved. In this manner, we will promote abusiness model that broaden and deepen value ourrelationships with customers.
Furthermore, we will endeavor to attract new clientsby enhancing our IT service menu. In order to respondto clients’ needs across a wider range of businesses ofdifferent scales, we will offer a more flexible and diverse
lineup of superior services and solutions and deepen andbroaden our client base.

Growth Target: Achieve ¥7,000 Million in Net Salesby the Fiscal Year Ending March 31, 2016
Our product development efforts will involve creating

Targets for Key Business Areas（Millions of Yen）

solutions that combine the products and services of the

2014

2015

2016

Panasonic Group with our own group’s IT services. By

1. ICT infrastructure service

3,200

3,600

4,000

2. System integration ofcore functions
Collaboration
with3.
the Panasonic Groupnew value to clients and work to cultivate new markets.

1,000

1,100

1,200

4. Creation of something new
Totalleveraging the strengths of each of these, we will provide
In addition, we will pursue more vigorously our growthbusinesses to date, namely constructing and operating IT

500

600

800

300

700

1,000

will deploy technology and product strategies that will link

5,000

6,000

7,000

to the creation of new markets.

infrastructure and building core systems. Furthermore, we

Our medium-term management plan positions these
initiatives, “ICT infrastructure service,” “system integrationof core functions,” “collaboration with the PanasonicGroup” and “creation of something new,” as key businessareas, through which we aim to generate net sales of¥7,000 million.

8

Panasonic Information Systems Co., Ltd.
Annual Report 2013

Consolidated
Financial Highlights

Overview of Key Business Areas
ICT Infrastructure Service
Achieve ¥4,000 Million in Net Sales by the Fiscal Year Ending March 31, 2016
Expand B to B Cloud Service
So far, we have taken advantage of the experience and expertise we have cultivated to date to propose infrastructure integration

Message fromthe President

and virtualization and the construction of public clouds. These offerings mainly targeted mission-critical systems at large
companies.
year or two, and an increasing number of companies
have introduced so-called public cloud services. The
however, prompted concern on the security front, somany companies hesitated to introduce them. In otherwords, the scope of the cloud services being offered in

Expand B to B Cloud Service
Current service coverageof Panasonic IS

New Medium-Term
Management Plan

“anyone can use” convenience of these services,

ICT Infrastructure
Service

System scale

Cloud services have expanded rapidly over the past

Infrastructure
Coverage toexpand in the future integration/virtualization,
private cloudHigh-quality andreasonable cloudservices

Japan is more limited than their demand would suggest.
Consequently, we have begun providing high-quality B

Business Overview

Public clouds

to B cloud services with an even more reasonable pricing
structure than has been available to date, and we intend
to expand the systems and clients these services target.

Small
companies

Medium-sizedcompanies

Large
companies

System Integration of Core Functions
Achieve ¥1,200 Million in Net Sales by the Fiscal Year Ending March 31, 2016

offers multiple-language support (English and Chinese) andis compatible with smart devices. In these ways, we haveupgraded the package from a customer’s perspective
even more than in the past.

Companies Multiple language support
introducing (English, Chinese)
GRANDIT compatible withNet Sales
surpassed smart devices, etc. (Millions of Yen)
500

470
350

2003

2008

2009

Coordination withvarious businesssystems
Accelerated
comprehensive IT
business for
medium-sized companies

180
Joined the 60
consortium

Going forward, we will develop and provide our own

Project of
Released unique businessthe Year 2011 type/business-specifictemplate

2010

2011

2012

2013
Financial Section

proprietary templates, create links with business systems,

GRANDIT v2.1 released

Prime partners:
13 companies

Corporate Governancefrom 2012 to 2013 renovating “GRANDIT,” which now

Progress of
GRANDIT“GRANDIT” and “MetaForce” ERP packages. We spent

Progress ofPanasonic IS

We are assisting in core system reform, based on our

GRANDIT
consortium
inaugurated

and make compound proposals that include our operation
services, thereby expanding our offerings from theInternet
Clientsystem for the electrical equipment and materials
industries. We plan to increase the package’s convenience

Mobileby forging links among various types of data and devices.

Orders Received・Order・Sales・Purchase・
Stock・Receivable・Claims
Claw-back・Accounts payable-trade etc.

Via the Internet

Corporate Data
Stock Information

corner of the market as a sales support and management

E-mailInternet

Coordination ofvarious types of data

“MetaForce,” which is being employed mainly by
Panasonic Eco Solutions’ distributors, currently occupies a

Supplying
manufacturer

Network infrastructure
Coordination ofvarious types of data

standpoint of ERP solution “services.”Core system
Real-time connection

Fax and telephone

Fax and telephone

CSR

Target Further Progress fromthe Customer’s Perspective

Other systems

Panasonic Information Systems Co., Ltd.
Annual Report 2013

9

New Medium-Term Management Plan

Collaboration with the Panasonic Group
Achieve ¥800 Million in Net Sales by the Fiscal Year Ending March 31, 2016
Promoting Further Collaboration
We launched our “eneview” environmental monitoring software in December 2010. Using data gathered from Panasonic’s
energy monitors and sensors, eneview provides a “visualization” mechanism to heighten awareness of energy savings. This
software is currently in use by customers across a broad range of sectors and industries, including rail companies and nursing
care and welfare institutions. Using theknow-how gained through eneview, weare expanding our lineup to include plugin station monitoring, EcoCute (energy-

eneview
environmental
monitoring

Plug-instationmonitoring

efficient electric heat pump) monitoring andthe remote monitoring of storage batteries,
and now we are rolling out a linked-facility
IT solution.

ITbusiness
linkingequipment

IT know-how

In the future, as well as adding to

as a service

Furtherincrease
added value
・Product linkage
・Business linkage

solutions from a service perspective weplan to increase added value by linking
them with Panasonic products andbusinesses.

EcoCutemonitoring

Remotemonitoringof storage
batteries

Creation of Something New
Achieve ¥1,000 Million in Net Sales by the Fiscal Year Ending March 31, 2016
Aiming to Provide New ValueAs the first foray into this new business, in April 2013 webegan providing a core system reform solution employing
the Oracle Exadata Database Machine. This systemrepresents the commercialization of the expertise wecultivated by consolidating 22 database servers into just
two units, reducing annual worker-hours by approximately
60%. As a forward-thinking reform following on from theinfrastructure integration we have proposed to date, wewill propose database integration using this solution.
Launching and cultivating new businesses requires time.
We will approach this business with the understandingthat speed is of the essence, adopting the keywords “Let’s
start acting” rather than “Let’s start thinking.”

10

Panasonic Information Systems Co., Ltd.
Annual Report 2013

Reinforce Partnerships with the Panasonic Group
ColumnThoughts on the New Medium-Term
Management Plan

Message fromthe President

The Panasonic Group is our largest client, accounting

Consolidated
Financial Highlights

Contributing to Our Largest
Client’s Business Processes
and Businesses
for 80% of sales. In the past, we have contributed to thePanasonic Group by using IT to improve the efficiency ofits business processes.
Going forward, we will accelerate efforts to link products

New Medium-Term
Management Planand IT solutions (see page 10), contributing to thePanasonic Group on the business front. This approachshould foster stronger and deeper relationships.

Maki Okajima

Vice President and Representative Director

Developing Business in New
Markets While Maintaining
High Profitability

There is an endless well of interest in using new
information technology in businesses that make useof smart devices and big data. That being said, in
corporate IT investment there is a clear tendency
for companies to invest as little as possible in fixed
IT assets, leading to a marked increase in the use

Business Overview

Bolster Management Constitutionof cloud-type IT services. We have deployed thestrength in on-site capabilities that we have cultivatedwith the Panasonic Group to extend our offerings
into the general market, and we have steadily earned

this growth and development, while at the same time

the trust of the companies in this market as well.

maintaining our capacity to earn high profits. Consequently,
As an IT service business, cultivating human resources
is an important part of enhancing our value, as people are
the resources essential to an IT services company. Wellaware of that fact, we cultivate employees who are not
only accomplished on the technical front but also have

As we work to forge even stronger relationships
with clients going forward, I believe that extending
our menu of IT offerings as services will deepen andenhance our contributions to their businesses. Oneof the challenges we will take up is using the revenue
sharing method* to provide services. This approachenables us to develop direct relationships with clients’businesses and share in their risks and rewards.
Becoming this sort of true business partner is one ofcontribute to client management, we aim to go beyond

our aims under the new medium-term management

satisfying customers, to delighting them.

plan. Since last year, we have deepened our sense

We will persevere with initiatives designed to maintainour capacity to earn high profits. During the fiscal yearof solidarity with the Panasonic Group in this way
while strengthening links on the business front.
Our IT solutions are employed in many ofhigh 12.6% ratio of operating income to net sales. Going

Panasonic’s products and businesses, and we also

forward, we will make thorough use of leading-edge IT

strive to create new value for Panasonic.

technologies as we pursue rationalization and streamlining
by cultivating expertise and putting it into practice.

*Revenue sharing method
Rather than outsourcing agreements based on set payments,
under this arrangement we work as partners in a project, sharing
risk with our clients. The revenue generated through mutual
cooperation is shared between us according to a predeterminedratio.

Panasonic Information Systems Co., Ltd.
Annual Report 201311

Corporate Data
Stock Information

ended March 31, 2013, these efforts led to a record-

Financial Section

strong people skills. By developing human resources who

Corporate Governancewe expect to further enhance corporate value.

CSR

The Group will make the investments necessary to achieve

Business Overview
Business Model

New customers

Breakdown of Net Sales

System Services
Build stronger
relationships

62.6%● System operation services at data centers● Cloud services● Network services

SystemproposalSolution
proposal

System Solutions

Our Customers

Enhancing Stock-Typed Business
Breakdown of Net Sales

22.1%● Core system architecture solutions● IT infrastructure architecture solutions● Commissioned system development● Development and provision of package software

Offering Multivendor Services

Existing
customers

System Services

System and Communications Breakdown of Net Sales
15.3%
Equipment*● Sales of computers, servers, and communications equipment● Network and facility construction● System operation services at data centers● Cloud services● Network services

In an era when swift and accurate decisions determine the course of corporate
management, information systems are essential to business continuity and theiroperation is extremely important.
From two data center locations, the Osaka IDC and Osaka Central Data Center, theGroup maintains the safety and security of customer systems while providing operation
services that meet customer needs, through cloud and other services.

Net Sales/Gross Margin（Millions of Yen / %）23,789 23,045

22,155 22,244 22,009
23.2

20.3

20.7

19.9

20.7

2009 2010 2011 2012 2013
Net Sales (Millions of Yen)
Gross Margin (%)

Hisashi Kurono
Managing Director

12

Panasonic Information Systems Co., Ltd.
Annual Report 2013

The Year in Review

Outlook for the Upcoming Fiscal Year

During the year, Japanese companies madeincreased use of data centers as one aspect of
their disaster countermeasures and electricity
conservation measures. In addition, from thestandpoint of IT investment restraints andconvenience, the use of cloud services has
become a typical element of IT strategy.
In the general market, we acquired new largescale projects, notably involving “Nextructure”
and IT operation services. Operational efficiency
at the Osaka Central Data Center thus increased,
and the provision of disaster recovery services
and high-value-added operation services led toincreased sales. We also commenced businessin the new domain of IT operations consulting.
Targeting the Panasonic Group, thoroughgoing
efforts to improve the efficiency of IT infrastructure
operations through IT collaboration contributed tocost reductions.

Going forward, we expect Japanese companies
to expand their use of cloud services to makeuse of advanced functions in diverse systemdomains.
In the general market, we will extend ourofferings of private cloud services that havetypically aimed at large companies, based on our
mainstay ICT infrastructure service, “Nextructure.”
We will offer a lineup of private cloud (middle
range) and public cloud services targeting small
and medium-sized companies, further enhancing
our IT operations service and responding todiverse client needs.
Following on from infrastructure integration,
we will begin offering a new vertical integration
service for databases as an advanced reform
solution. As a result, we aim to attract newcustomers and offer higher-value-added service
to existing customers.

System Solutions

20.2

6,367

18.4

19.2

17.6

2009 2010 2011 2012 2013
Net Sales (Millions of Yen)
Gross Margin (%)

The Year in Review

Outlook for the Upcoming Fiscal YearIn the general market, we targeted vigorous
medium-sized companies with businesses
tailored to specific industries and sectors. In thebusiness of system integration for core functions,
we created industry-specific templates for the
medical equipment and telecommunications
sectors, aiming to develop solutions that fit
customers’ needs more precisely.
We also provided IT support for businessstartups by energetic customers in environmental
businesses and those that are aiming for IPOs.
Our sales of sales management solutions
for leisure facilities targeted operators of art
museums, natural history museums, aquariums
and amusement facilities. We combined ourleisure facility ticketing system with the PanasonicGroup’s products to maximize synergies andpromote solutions.

We expect the use of clouds to accelerate on anumber of fronts and across a host of industries
and sectors.
The Company strives to maintain high customer
satisfaction through approaches ranging fromproposing solutions to supporting IT operation tooffering IT as a service. Specifically, we will propose
a service model that connects directly to clientbusinesses.
For instance, among our menu of solutions
for leisure facilities we have begun offering newservices to adjust usage fees depending on visitor
numbers and charges that adjust to seasonal sales
variations.
Going forward, we will propose service models
that meet the business characteristics of suchcustomers. We plan to offer a variety of new
solutions that will lead to true customer satisfaction.

Business Overview

Managing Director

24.9 8,004 7,794
6,958

New Medium-Term
Management Plan

Akira Hisano

7,580

Message fromthe President

With global competition growing increasingly fierce and the operating environment
undergoing major changes as a result of advances in IT, the focus of corporate IT
demand is shifting, from the enhancement of operational efficiency to contribution
to management.
The Group meets the needs of these clients by proposing solutions that employ
IT to address corporate transformation and s tructural reform.

Net Sales/Gross Margin（Millions of Yen / %）Consolidated
Financial Highlights● Core system architecture solutions● IT infrastructure architecture solutions● Commissioned system development● Development and provision of package software

CSR

communications equipment● Network and facility construction*Owing to a change in the division of products handled, the system and communications equipment business has
been combined into the system solutions business, effective from the fiscal year ending March 31, 2014.

（Millions of Yen / %）

5,951

6,647

15.0

5,699
17.2

6,125

17.9

5,376
16.2

16.6

Financial Section

The Group offers a multi-vendor approach to propose the most suitable system
configurations for its customers. We leverage the track record we have cultivated over
our long history of operations in Japan and overseas by testing every device on themarket available for adoption. Based on our own experience, we confidently propose
flexible combinations not tied to specific manufacturers.

Net Sales/Gross Margin

Corporate Governance

System and Communications
Equipment*● Sales of computers, servers, and2009 2010 2011 2012 2013
Net Sales (Millions of Yen)
Gross Margin (%)

Outlook for the Upcoming Fiscal Year

During the year, sales of stand-alone equipment
dropped sharply, causing net sales to fall below
the previous year’s level. Our gross margin roseyear on year.

Smartphones and tablets have become essential
items of business, and we expect multi-devicecompatibility to accelerate in line with businesssystem reforms.
We plan to make proposals designed to meetcustomers’ needs, and we expect to maintain ahigh level of profitability as a result of these highvalue-added offerings.

Panasonic Information Systems Co., Ltd.
Annual Report 2013

Corporate Data
Stock Information

The Year in Review

13

CSR

As a Public Institution—Promoting CSR Activities
through Our Services
As a member of the Panasonic Group, we have worked with the spirit of the words of its founder, Konosuke
Matsushita: An enterprise is a public institution and All for the customer. This spirit serves as the origin of
our corporate social responsibility (CSR) activities.
Based on the Panasonic Group management philosophy, we look beyond just complying with laws,
ordinances and rules to conduct fair and honest business activities according to conscience and good sense.
In addition, throughout our business activities we consistently strive for our customers advantages through IT.
Compliance (Corporate Ethics)

Risk Management

We hone our corporate sense of ethics, and have introduced

We define risk as “factors that could impair efforts to achieve

and are developing a corporate ethics program to conduct ourour business plans” and “the gap between social expectations

work on the basis of a shared conscientiousness, common

and corporate reality,” and we conduct risk management

sense and a spirit of fairness and sincerity (corporate ethics

initiatives accordingly. These activities are also positioned as

management).

one aspect of the Panasonic Group’s global and across-theGroup risk management activities.

■ Corporate Ethics Program
・Creating a Compliance Guidebook and distributing it toensure universal awareness・Employing e-learning for thorough ethics training
・Establishing a business ethics program promotion structure
centered on the Corporate Ethics Committee, chaired by
the president
・Establishing a corporate ethics hotline■ Overview of Risk Management Activities
・Creation of a companywide structure centered on the Risk
Management Committee, chaired by the president
・Formulation of business plans and related semi-annual risk
management and monitoring of each division and related function
・Formulation of a business continuity plan (BCP) to counterthe risk of large-scale natural disasters

・Making submission of a commitment to corporate ethics
document mandatory for all employees

Corporate Citizenship Activities

Increasing Information Security and Quality
The Company maintains a particular focus on the appropriate
management of information, which we recognize as an

We encourage all our employees to take part in voluntary

important social responsibility. In addition, through ongoing

corporate citizenship activities.

quality improvement efforts on both the operational anddevelopmental fronts, we are working to strengthen our■ Primary Activities

structure to ensure that customers feel comfortable entrusting・Recycling Activities (PET Bottle Cap Collection)

their information systems to us.

・Fund-Raising Activities
・Blood Donations and Bone Marrow Bank Registration■ Certifications Acquired・Community Cleanup Activities

・Privacy Mark (companywide)
・ISO/IEC 27001 (companywide)
・ISO/IEC 20000 (IDC division)®
・CMMI Level 3 (development process)14

Panasonic Information Systems Co., Ltd.
Annual Report 2013

Consolidated
Financial Highlights

CSR Initiatives～ Remaining a Human Resource Cluster That Aims to Delight ～Business Overview

than ever before.
Based on the philosophies of our founder, Konosuke
Matsushita, of “an enterprise is a public institution” and“contributing to society through our business activities,”
the foundation of our activities is to contribute to society
through our core business of providing IT services.
The origin of our services is the pursuit of “All for thecustomer,” and rather than being satisfied by customer“satisfaction,” we aim to take a step beyond, to delightthem. To achieve this goal, it is of utmost importanceto recognize that while each of our employees is a free
individual, we share a sense of ethics and discipline,
acting as the “human resource cluster” that delights ourcustomers.
Remaining an organization of this nature requires
each of us to further hone his or her sense of ethics,
and we will act with a sense of individual responsibility
and seek to cultivate a transparent corporate culture.
To maintain and cultivate this sort of climate, we actively
promote CSR activities, conducting environmental
protection activities and social and communit ycontribution activities, observing compliance andsupporting volunteer activities.

New Medium-Term
Management Plan

Nowadays, corporate social
responsibility and corporate
ethics are more impor tant

Message fromthe President

Tatsuo Yoshikawa
Director

CSR

Efforts to Reinforce Quality

Director

in 2014.
To ensure quality and reduce risk during upstream
sof tware development, we hold sales discussion
review meetings and have established a PMO groupthat monitors development projects and targets
overall optimization, auditing and systematizing priority
development projects. As a result, we have reduced
the number of issues affecting quality, cost and delivery
at the software development stage. Furthermore, we
continue to pursue operational quality improvement
based on ISO 20000, and the number of interruptions
to service operations has fallen.
We will continue in our initiatives to enhance quality,
to ensure that we provide high-quality solutions andservices that live up to the Panasonic Group name.

In manufacturing, the origin
of Pa na sonic’s busine s s,quality improvement requires
tireless dedication. We haveinherited this DNA, which in software development
is evident from our attention to process. We use the
CMMI ® model for software development process
improvement to define directions and procedures andcreate templates for administrative materials. Throughsuch efforts to document and standardize processes
throughout the organization, we continue making
improvements even today. We achieved CMMI® Level 3

Panasonic Information Systems Co., Ltd.
Annual Report 2013

Corporate Data
Stock Informationin 2008 and 2011, and we are aiming for CMMI® Level 4

Financial Section

Shuichi Takazaki

Corporate Governance～ Carrying Forward Our Manufacturing DNA and Aiming for Further
Improvements to Development and Operational Quality ～15

Corporate GovernanceAchieving Swift and Appropriate Decision Making and Supervisory and
Auditing Functions, as well as Business Controls
1. Business Execution
and Supervisiona n inte r n a l a u di t u ni t a s we ll a s a nbusiness and maintenance of an internal

accounting auditor, and is conducted as

check system to preempt and prevent

The Board of Directors meeting is held

follows: to implement a varied and effective

any fraudulences. The division conducts

regularly once a month and irregularly as

audit, each carries out the management

its audit in line with the annual plan, andrequired to report on significant operating

audit from a different point of view together

the results are reported to the Board ofpolicies, decisions on substantive matters,with appropriate coordination.

Directors.

and the execution of business and duties,(1) Board of Auditors and(3) Accounting Auditor

as well as statutor y matters. Also, to

the Auditors’ Inspection

Concerning the audit under the Companies

provide neutral and impartial supervision, two

The Board of Auditors is comprised of

Act and Financial Instruments andof the eight directors are outside directors.

auditors, audit plans, methods and so

Exchange Law, the Company has entered

Actual business is executed byforth, and reports on the implementation

into an audit contract with Deloitte Touche
Tohmatsu LLC.

e xe c u ti v e d i r e c to r s a n d e xe c u ti v e s

status of the audit. The audit is mostly

under the leadership of the president intaken from the point of view of legality

accordance with policies that have been

and is conducted on operations and thedecided by the Board of Directors tofinancial condition by auditors based on

We believe developing a sound businessclarify the responsibility and to sufficiently

plans determined by the Board of Auditors.

and maintaining customer s’ tr ust in

demonstrate supervisory functions. Also,

Auditors also attend important meetings

our business are indispensible to the

3. Controls

for the purpose of uniting the wholesuch as that of the Board of Directors andgrow th of the Company, so with theCompany as one through the discussion

give recommendations and advice fromgoal of establishing a regulated businessand sharing of information necessar yan independent standpoint. To strengthen

environment, we have assigned a board

for the smooth and rational execution of

the functions of the auditors, we also

member to take charge of internal controls

business, we have established businessestablished an audit office to support the(CSRM*). We have also established suchstrategy meetings and management

auditors’ professional duties, and we consult

groups as corporate ethics and information

study groups.

with auditors regarding the assessment of

security management committees that will

the office and its personnel changes.

deploy concrete measures companywide

2. Auditing(2) Internal Audit

based on the content of discussions.

The Company’s auditing system is madeThe Company established the division

up of auditors and the Board of Auditors,

with the aim to execute fair and efficient*CSRM: Combining CSR (Corporate Social Responsibility)
and Risk Management.

Officers of the Company (As of July 1, 2013)

Kazuhiro Maegawa Maki Okajima
President andRepresentative Director

Vice President andRepresentative Director

Akira HisanoManaging Director

Hisashi Kurono
Managing Director

AuditorYuji Nakabayashi

Auditor

Makoto Iwahashi*1,*2

		(JFE Systems, Inc.)

AuditorEiji Furusawa*1

		(Panasonic Corporation)

Executive Officer Keisuke Tanaka
Executive Officer Hajime Onishi
Executive Officer Takashi Maeda
Executive Officer Mitsuru Maekawa
Executive Officer Hiroyoshi Maruyama

Shuichi Takazaki
Director

16

Tatsuo Yoshikawa
Director

Panasonic Information Systems Co., Ltd.
Annual Report 2013

Takahiro Nakagawa

Hidenori Furuta(Panasonic Corporation)(FUJITSU LIMITED)

Outside Director

Outside Director*1 Outside auditor*2 Appointed as an independent executive who meets therequirement stipulated by the Tokyo Stock ExchangeGroup, Inc., that there be no danger of conflict of interest
with general shareholders.

Consolidated
Financial Highlights

Governance Structure

General Meeting of Shareholders
Appointment and Dismissal
Audit

Board of Auditors
Auditors Room

Assistance

Cooperation

Accounting Audit
Appointment and Dismissal
Instruction

President

Supervision / Instruction

Cooperation Appointment
and Dismissal

Message fromthe President

Board of Directors

Appointment and Dismissal

Accounting Auditors

Internal Audit Division (Auditing)

Supervision / Instruction

Executive Directors

Business Strategy Meeting

Executive Officers
Internal Audit

Director in Charge of CSRM and Internal Control

Executive Division

Company-wide Committee

Control

AuditorCorporate Ethics Committee,
Information Security Management Committee, Other Committee

Business Overview

Board of Auditors Initiatives

New Medium-Term
Management Plan

Business Review Meeting

Control

Yuji Nakabayashi (left)
Makoto Iwahashi (center)(right)Eiji Furusawa
Directors proposals.

making framework for listed companies” and an “effective

Auditors attend thesystem of checks and balances for managing a listed

Board of Directors

company.” Like applying the brakes on an automobile

meetings, and whenat certain times and pressing the accelerator at others,

necessary comment

corporate governance is designed to prevent misconduct andon deliberations fromkeep management from going out of control on the one hand,their various specialized

and on the other hand to encourage a company to develop

viewpoints. Although

and augment its corporate performance. We believe that theauditors do not

Board of Auditors is an organization designed to serve thesehave voting rights at the Board of Directors meetings, we

specific functions. The Company’s Board of Directors defines

believe that we do influence the deliberation of proposals.

its audit policy as “playing a role in corporate governance as

The Company also appoints two outside directors, whose

an independent body by fulfilling the duty of conducting audits

proactive remarks at the Board of Directors meetings arein accordance with laws and regulations, seeking to answer

aimed at protecting the interests of general shareholders.

CSR

Corporate governance is variously described as a “decision-

Act was released in August 2012, which is slated forthe level of trust society places in us, and contributing to theenforcement following Diet deliberations, and revisions tohealthy development and sustainable growth of Panasonicsecurities exchange regulations are also being considered.

Information Systems Co., Ltd.” The Company’s Board of

In the interest of strengthening corporate governance andAuditors comprises three auditors, two of whom are outside

protecting general shareholders, companies are being called

auditors. In principle, the Board of Auditors meets once eachon to increase their level of supervision from external andmonth. At these meetings, the board decides the divisionindependent parties.

of responsibilities among the auditors, reports on various

The Board of Auditors fully understands the purport ofactivities and provides information, conducts hearings ofthese revisions, and we believe that the corporate governancevarious related parties, attends accounting audit reviews

structure will require revision.

Corporate Data
Stock Informationof internal control systems, striving to maintain or increase

Financial Section

A draft outline of amendments to Japan’s Companies

Corporate Governancethe shareholders’ mandate through the effective verification

given by the accounting auditor, and pre-screens Board ofPanasonic Information Systems Co., Ltd.
Annual Report 201317

Financial Section / Management’s Discussion and Analysis

and other items.

Liabilities

Net Sales and Gross Profit

Net Income

10.1%, from one year earlier, to ¥6,295 million

During the fiscal year ended March 31,

Net income rose 21.3% from the previous as of March 31, 2013. The main reason for2013 (April 1, 2012 to March 31, 2013), thefiscal year, to ¥2,702 million, after subtracting this rise was a ¥406 million increase in notes

Company concentrated on increasing

total income taxes (of ¥1,709 million) from and accounts payable–trade, stemming

1. Financial Position

Current liabilities increased ¥578 million, or

sales to customers outside the Panasonicincome before income taxes and minority from the purchase of goods and equipment

Group, as well as efforts to create andinterests of ¥4,411 million. The net margin in March 2013.

fortify its partnership with the Panasonicwas 7.7%.

Due to factors such as progress in therepayment of lease obligations, long-termGroup with the aim of receiving orders for
systems. However, part of the IT systemreorganization project in line with the

2. Assets, Liabilities and Equity

liabilities fell ¥214 million, or 49.1%, from theend of the previous year, to ¥222 million.

Panasonic Group’s restructuring in January

Assets

2012 slipped into the year under review,

Current assets amounted to ¥25,730 million Equity

affecting efforts to secure new orders.

as of March 31, 2013, up ¥3,431 million, or At the end of the fiscal year, total equity

Accordingly, net sales declined 3.3% year

15.4%, from a year earlier, due mainly to an was ¥24,838 million, up ¥1,979 million, oron year, to ¥35,179 million. Meanwhile, we

increase of ¥2,237 million in deposits paid 8.7%, from a year earlier, due to a ¥2,009

pushed forward on rationalization activities,

to Panasonic Corporation and others and million rise in retained earnings.

centered on system operation, in an effort toa rise of ¥713 million in notes and accounts

enhance quality. Cost of sales consequently

receivable–trade owing to increasing sales.

fell 4.9%, to ¥27,805 million, and gross profit
increased 3.4%, to ¥7,374 million.

Net property and equipment totaled¥3,306 million at year-end, down ¥708
million, or 17.6%, compared with March 31,

EquitySelling, General and Administrative

2012. This decrease was mainly attributable(Millions of Yen)

Expensesto the depreciation of hardware and otherWe continued working to hold down

noncurrent assets.

24,83822,85921,35919,659costs and boost the efficiency of business

Investments and other assets as of year-

processes, while implementing sales

end were ¥2,319 million, down ¥380 million,

promotion measures aimed at future orderor 14.0%, from a year earlier.

generation. As a result, selling, general andAs a result of these factors, total assets

administrative (SG&A) expenses rose 2.4%

increased ¥2,343 million, or 8.1%, during thefrom the preceding term, to ¥2,949 million.

year, to ¥31,355 million on March 31, 2013.

The ratio of SG&A expenses to net sales

17,6042009 2010 2011 2012 2013rose from 7.9% in the year ended March 31,
2013, to 8.4% during the year under review.
Operating Income and Income before
Income Taxes and Minority Interests
Operating income expanded 4.0% fromTotal Assets

Equity Ratio(Millions of Yen)(%)

27,31731,35529,01225,14623,21175.7 78.2 78.2

78.8

79.2

the previous term, to ¥4,425 million. The
operating margin amounted to 12.6%,
re aching a histor ic high. T his f igure
stemmed from income before income taxes
and minority interests of ¥4,411 million, after
adding interest income (of ¥29 million) andsubtracting interest expense (of ¥13 million)

18

Panasonic Information Systems Co., Ltd.
Annual Report 20132009 2010 2011 2012 20132009 2010 2011 2012 2013

ROE/ROA¥6,9 08 million provided by these

Return on equity (ROE) for the year was

activities in the previous term. Primary

11.3%, due to the rise in net income.

reasons included net deposits paid to

The Group’s research and development

R e t u r n o n a s s e t s ( R O A ), h o w e v e r,

Panasonic Corporation of ¥11,000 million

activities are mainly conducted at its R&D

amounted to 14.6%, owing to the increase

and payments of ¥1,232 million for theCenter. During the fiscal year ended Marchin total assets.

purchases of property and equipment.

31, 2013, R&D expenditures amounted

6. Research and Development
Consolidated
Financial Highlights

to ¥135 million, largely for verifying the

16.8
13.8

12.6

commercial licenses.

activities totaled ¥940 million, ¥37 million

The recently formulated Medium-Termmore than was used in these activities inManagement Plan prioritizes R&D on

the preceding fiscal year. The principal uses

new businesses and the creation of newof cash were dividends paid of ¥693 million

technologies. Accordingly, we anticipate anand ¥247 million for the repayment of lease

investment of ¥500 million over the threeobligations.

years of the plan.

Free Cash FlowsThe aforementioned operating and

ROA

7. Capital Investment

investing activities resulted in negative free

Capital investment in the year to March 31,

cash flows of ¥7,629 million, compared2013, amounted to ¥893 million. Principalwith positive free cash flows of ¥10,742

investments were for the acquisition of

million in the previous year.

mainframes and various other hardware,

Business Overview

2009 2010 2011 2012 2013

New Medium-Term
Management Plan

10.1

11.3

functionality of new technologies andDuring the year, net cash used in financing

Message fromthe President

ROE
(%)

Cash Flows from Financing Activities

and for the development of an integrated IT(%)

asset management system.

4. Forecast for the Fiscal YearEnding March 31, 2014

21.3
18.2
16.3

15.2

The Company’s forecast of consolidated
14.6

CSR

operating performance for the fiscal year
ending March 31, 2014 (April 1, 2013 toMarch 31, 2014) is shown below.
20142009 2010 2011 2012 2013

Year-on-Year
Increase

Corporate Governance2013(Millions of Yen) (Millions of Yen)(%)

Net sales

35,179 36,000

2.3

Operatingincome

4,425

4,450

0.6

Net income

2,702

2,720

0.7

3. Cash FlowsNet cash provided by operating activities

Financial Section

Cash Flows from Operating Activities

5. Order Backlog
As of March 31, 2013, our order backlog

more than in the preceding year. Principal

stood at ¥2,597 million, up 16.2% from afactors include cash provided by income

year earlier. This rise stemmed from an

before income taxes and minority interests

increase in orders for system developmentof ¥4,411 million, and depreciation andprojects related to the new growth strategy

amortization of ¥1,817 million. Incomeof the Panasonic Group, centering on

taxes paid used ¥1,888 million.

Panasonic Corporation Eco Solutions

Corporate Data
Stock Information

amounted to ¥4,670 million, ¥836 million

Company.
Cash Flows from Investing Activities
Net cash used in investing activitieswas ¥12,299 million, compared with

Panasonic Information Systems Co., Ltd.
Annual Report 201319

Financial Section / Risk Factors

and NetItems in this annual report concerningbusiness conditions and financial conditions
that may strongly affect investor decisions
include the following risks. However, these
do not cover all risks with respect to theGroup and there may be other hard-topredict risks not detailed in the material. The
Group's business, performance and financial
status may be adversely affected by various
significant risk factors. Items regarding thefuture were determined by the Group as of
the financial statement filing date (June 24,2013).
I Risks Related tocompetitors in terms of quantity, quality andspeed. Furthermore, competitors may havegreater financial, technological and marketing
resources than the Group.
Price Competition
The Group is subject to intense pricecompetition in the information services
industry, and this may make it difficult for theGroup to determine prices for products andservices to secure adequate profits. This
downward pressure on prices may have aserious effect on the Group’s profits, andbecomes especially noticeable when demandfor products and services decreases.

Economic Conditions

Fluctuations in the Economic
Environment
Demand for the Group’s products andservices may be affected by general
economic trends mainly in Japan. Economic
downturns and resulting declines in demandin the Japanese market may thus adversely
affect the Group’s financial condition,
operating results and cash flows.
Interest Rate Fluctuations
I n t e re s t r a t e f l u c t u a t i o n s m a y a ff e c t
operating expense, interest expense andinterest income, as well as the value offinancial assets and liabilities, and may havean adverse impact on the Group’s business,
performance and financial position.
Stock Price Falls
The Group holds Japanese stocks as
investment securities, and decreases in theirmarket value may necessitate the recognitionof valuation losses. Furthermore, a decline in
the valuation difference on available-for-salesecurities may reduce net assets.

Risks Related to
the Group’s Business Activities
Competitive Environment
The Group faces different types ofcompetitors in the information services
industry, ranging from large international
companies to relatively small, rapidly growing
companies. The Group actively makes
investments and takes initiatives in strategic
products and services. However, investments
or sales initiatives for a particular productor service may fail in comparison with20

Panasonic Information Systems Co., Ltd.
Annual Report 2013

Competition in New Technologies
The Group may lose the ability to compete in
new markets if it fails to correctly predict anddevelop the new technologies, products andservices to meet future market needs.
Securing Capable Human Resources
The Group’s future success depends largely
on its ability to retain skilled employees inthe technical and management fields. The
Group expects that it will be necessary
to hire more personnel in the information
services business field, but industry
demand for skilled employees exceeds the
supply, making competition for attracting
and retaining these employees intense.
Because of this severe competition forskilled employees, the Group may be unable
to retain existing personnel or attract new
talent. If this should happen, the Group’sbusiness, performance and financial position
could be adversely affected.
Business Alliances with Other
Companies, etc.
The Group develops its business by forming
alliances with or strategic investments
in other companies, and the strategic
importance of partnering with third parties isincreasing. In some cases, such partnerships
are crucial to achieving the Group’s goal of
introducing new products and services, but
the Group may not be able to successfully
collaborate or achieve expected synergies
with its partners. In addition, these partners
may change their business strategies andit may become difficult for the Group to
maintain these business partnerships. If anyof the foregoing should happen, the Group’sbusinesses, performance and financial
status could be adversely affected.
Procurement of Raw Materials, etc., andPurchase Price Surges
T h e G r o u p ’s o p e r a t i o n s d e p e n d o nobtaining high-quality products and services
in a timely manner and in the necessary
quantities, and we therefore select reliablesuppliers. However, it may be difficult tochange or increase suppliers, or switch toother products and services if the supply isinterrupted or industry demand increases.
This may adversely affect the Group’sbusinesses. Moreover, although the Groupand suppliers decide purchase prices bycontract, purchase prices may increasesignificantly due to changes in demand or forother reasons. Furthermore, some products
and services are only available from a limited
number of suppliers. If the Group is unable
to procure such products and services,
its businesses, performance and financial
status may be adversely affected.
Capital Status and Financial Conditionsof Customers
Some of the Group’s customers purchaseproducts and services from the Group
on payment terms that do not provide
for immediate payment. If customers forwhom the Group has substantial accounts
receivable encounter financial difficulties
and are unable to make payments on time,
the Group’s businesses, performance andfinancial status may be adversely affected.

Risks Related to Future Plans, etc.
The Group has announced its new mediumterm management plan, which covers theperiod from April 1, 2013 through March 31,
2016 and an earnings forecast for the fiscal
year ending March 31, 2014. However, theGroup may fail to achieve all of the goals
announced and/or the expected results.

Risks Related toLegal Restrictions and Litigation
Direct or Indirect Costs Related to
Product Liability or Warranty Claims Due
to Defects in Products or Services
The Group pays due attention to ensuring

Fixed Asset Impairment
The Group has many fixed assets, suchas property and equipment. All Group
companies periodically review the recorded
value of fixed assets on the balance sheets
to determine if future cash flows to be
derived from these assets will be sufficient
to recover the residual values in accordancewith accounting standards gover ning
the impairment of fixed assets. If theseassets cannot generate sufficient cash
flows, impairment losses may have to berecognized.

CSR
Corporate Governance

Recognizing Uncertainties in Deferred
Tax Assets and Income Taxes, etc.
The Group evaluates the likelihood ofrecognizing the tax benefits of deferred
tax assets, based on taxable income
forecasts and the evaluation of uncertainty,
in considering the recoverability of deferred
tax assets and evaluation of income tax
uncertainties. However, deteriorating
economic conditions, tax audits and otherfactors may result in temporary variancesand net losses being carried forward beyond
the period during which tax benefits can berecognized. In such a case, the Group would
be required to recognize greater taxable
income than had been anticipated, resulting
in the possibility of higher corporate taxes.

Corporate Data
Stock Information

Panasonic Information Systems Co., Ltd.
Annual Report 2013

Financial Section

Effects of Disasters or Unpredictable Events
The headquarters and major bases of theGroup are located in Japan. The occurrenceof a natural disaster such as an earthquake,flood or other unexpected event such asa fire, war or terrorist attack, infectious
disease outbreak, industrial accident,

Pension Liabilities
The Group has contributory, funded benefit
pension plans covering substantially all
employees in Japan who meet eligibility
requirements. Revisions to experienceassumptions and pension asset performance
could result in an increase in unrecognizedactuarial losses, leading to an increase in
future net periodic benefit costs of thesepension plans.

Business Overview

Risks Related to Disasters or
Unpredictable Events

Other Risks
New Medium-Term
Management Plan

Changes in Account Standards andTax Systems
The Group’s business, performance andfinancial status may be adversely affectedby the unforeseen application of new
accounting standards and tax systems.
Furthermore, differences in views with tax
authorities on the Group’s tax returns could
result in the Group being liable for moretaxes than expected.

Losses Due to Other Legal Restrictions, etc.
The Group is subject to governmental
regulations in Japan and other countries andregions in which it conducts its business.
These include gover nment approvals
required for conducting business andinvestments, laws and regulations governing
national security, and export/import laws andregulations, as well as commercial, antitrust,intellectual property, financial transactions,worker protection, subcontractor protection,and business taxation laws and regulations.
Tighter laws and regulations or stricter
interpretations of them than in the past byauthorities could place restrictions on theGroup’s businesses or result in increased
expenses for complying with them. The
Group has taken measures to ensure that itis prepared to handle a compliance violationor other emergency through such efforts asestablishing networks of emergency contacts
and organizational bodies responsible forresponses. However, the Group’s corporate
image could be impaired and the Group’sbusinesses, performance and financial status
could be adversely affected if its response
is inadequate.

malicious computer virus, breakdown or
malfunction in the Group’s information
system or communications network as aresult of such events may result in serious
damage to Group facilities, and the Groupmay have to stop operations at certain
facilities and delay the provision of products
and services.
The Group may incur considerable
expenses for restoring damaged facilities,
which could adversely affect the Group’sbusinesses, performance and financial
position.

Message fromthe President

Intellectual Property Right Protection
The Group works to secure a competitiveedge for its businesses by protecting
intellectual property rights (IPRs) related tothe technologies, products and services
it develops. However, rights may not be
granted to provide adequate protection
based on IPRs.
Furthermore, the Group may be unable touse or be forced to use on disadvantageous
terms the technologies, products andservices of third parties protected by IPRs
when needed. As of March 31, 2013, theGroup was using the IPRs of third parties
under license from third parties for some ofits products and services. However, in the
future the Group may not be able to obtainthe necessary licenses from third parties or
may be able to obtain licenses only underdisadvantageous terms.
Litigation may also be necessary to
defend the Group against IPR infringement
claims brought by third parties or to enforce
the Group’s IPRs. The Group may incur
significant expenses and use significant
management resources for such lawsuits.
Furthermore, if third-party claims that theGroup infringed on IPRs are upheld, theGroup may cease to be able to use specifictechnologies, products and/or services,or be able to supply specific technologies,
products and/or services, and may be liable
for significant damages.

Information Leaks
In the normal course of business, the Groupobtains information (including personal
information) about customers and the likerelating to privacy and creditworthiness. The
Group pays due attention to safeguarding
the confidentiality of this information and has
implemented the greatest possible measures
to prevent information leaks. However, theGroup cannot rule out the possibility thatsuch information may be leaked due to an
accident or other inevitable cause. Sucha leakage of information may result in theGroup being held liable for damages toaffected parties and may impair the Group’s
corporate image. Moreover, there is a riskthat the Group’s trade secrets may bemisused by external parties. In such a case,the Group’s businesses, performance andfinancial status may be adversely affected.

Consolidated
Financial Highlights

the quality of its products and services.
However, the occurrence of defects in
products or services could make theGroup liable for damages, including indirect
damages, that are not completely covered byliability insurance and the Group could incur
significant expenses. Moreover, negative
publicity concerning these problems could
impair the Group’s corporate image, and
the Group’s businesses, performance andfinancial status may be adversely affected.

21

Consolidated Balance Sheet

Panasonic Information Systems Co., Ltd. and consolidated subsidiaries
As of March 31, 2013ASSETS

Millions of Yen

Thousands of U.S.
Dollars (Note 1)

2012

2013

2013

Current Assets:
Cash and deposits (Notes 3 and 13)

¥

269

¥

176

$

2,862

7,582

6,869

80,660

383

152

4,074

16,23613,999172,723

Deferred tax assets (Note 10)

498

408

5,298

Other current assets (Note 15)

762

695

8,106

25,73022,299273,723969

947

10,309Accounts receivable - trade (Notes 13 and 15)
Inventories (Note 4)
Deposits paid (Notes 3, 13, and 15)

Total current assets
Property and Equipment:
Buildings

7,766

6,629

82,617

Lease assets (Note 12)

712

802

7,574

Construction in progress

143

746

1,521

Total

9,590

9,124

102,021

Accumulated depreciation(6,284)
3,306(5,110)4,014(66,851)
35,170Investment securities (Notes 5 and 13)

231

279

2,457

Goodwill (Note 6)

13

29

138

Software

435

586

4,628

Tools, furniture, and fixtures

Net property and equipment
Investments and Other Assets:

Development cost of software in progress

52

56

553

Long-term deposits paid

252

254

2,681

Long-term prepaid expenses

600

550

6,383

Prepaid pension cost (Note 8)

680

844

7,234

Deferred tax assets (Note 10)

42

24

447

Other assets (Note 12)

14

83

150

(0)
2,319

(6)
2,699

(0)
24,671¥31,355¥29,012$333,564

Allowance for doubtful receivables

Total investments and other assets
Total
See notes to consolidated financial statements.

22

Panasonic Information Systems Co., Ltd.
Annual Report 2013

Thousands of U.S.
Dollars (Note 1)

2013

2012

2013

¥ 2,253
1,659¥ 1,847
1,555$ 23,968
17,649

Income taxes payable (Note 13)

948

1,015

10,085

Consumption taxes payable

259

121

2,755

Deposits received (Note 7)

18

7

191

Accrued expenses

858

853

9,128

Other current liabilities (Note 12)

300

319

3,192

Total current liabilities

6,295

5,717

66,968Long-term deposits received (Note 7)

35

44

373

Deferred tax liabilities (Note 10)

̶

23

̶

Long-term lease obligations (Notes 12 and 13)

176

362

1,872

Liability for retirement benefits (Note 8)

11

7

117

Total long-term liabilities

222

436

2,362

1,040

1,040

11,064

871

871

9,266

22,90020,891

243,617

(1)

(1)

(11)

28

58

298

24,83822,859264,234¥31,355¥29,012$333,564

Consolidated
Financial Highlights

Millions of Yen

LIABILITIES AND EQUITYCurrent Liabilities:
Accounts payable - other (Notes 13 and 15)

Message fromthe President

Accounts payable - trade (Notes 13 and 15)

New Medium-Term
Management Plan
Business Overview

Long-Term Liabilities:

CSR

Commitments Liabilities (Note 12)
Equity (Notes 9 and 16):
authorized：40,000,000 shares; issued：10,656,000 shares
Capital surplus
Retained earnings

Corporate GovernanceCommon stock -Treasury stock - at cost
372 shares in 2013 and 320 shares in 2012

Financial Section

Accumulated other comprehensive income Unrealized gain on available-for-sale securities

Total equity
Total

Corporate Data
Stock Information

Panasonic Information Systems Co., Ltd.
Annual Report 201323

Consolidated Statement of Income andComprehensive Income

Panasonic Information Systems Co., Ltd. and consolidated subsidiaries
Year Ended March 31, 2013

Millions of Yen

Thousands of U.S.
Dollars (Note 1)

2013

2012

2013

¥35,179
27,805¥36,373
29,238$374,245
295,798

Gross profit

7,374

7,135

78,447

Selling, General and Administrative Expenses (Notes 11 and 15)

2,949

2,880

31,373Operating income

4,425

4,255

47,074

Interest income (Note 15)

29

58

309

Interest expense

(13)

(14)

(138)

Restructuring expense

̶

(451)

̶

Other - net

(30)

(6)

(319)

(14)
4,411

(413)
3,842

(148)
46,926

Current

1,823

1,808

19,394

Deferred

(114)
1,709

(193)
1,615

(1,213)18,181Net Income before Minority Interests

2,702

2,227

28,745Net Income

2,702

2,227

28,745Net Income before Minority Interests

2,702

2,227

28,745(30)¥ 2,672(34)¥ 2,193(319)$ 28,426

2,672

2,193

28,426

̶

̶

̶

Yen

U.S. Dollars

Net Sales (Note 15)
Cost of Sales (Notes 11 and 15)

Other Income (Expenses):

Other expense - net

Income before Income Taxes and Minority Interests
Income Taxes (Note 10):

Total income taxes

Other Comprehensive Income (Note 14)
Unrealized gain on available-for-sale securities

Comprehensive Income (Note 14)
Total Comprehensive Income Attributable to (Note 14):
Owners of the parent
Minority interests

Per Share of Common Stock (Notes 2.o and 16):
Basic net income
Cash dividends applicable to the year
See notes to consolidated financial statements.

24

Panasonic Information Systems Co., Ltd.
Annual Report 2013¥253.5665.00¥209.02
65.00

$

2.70
0.69

Consolidated Statement of
Changes in Equity

Panasonic Information Systems Co., Ltd. and consolidated subsidiaries
Year Ended March 31, 2013

Consolidated
Financial Highlights

Millions of Yen

Accumulated Other
Comprehensive
IncomeCapitalSurplusRetained
Earnings

10,656,000¥1,040¥871¥19,356

Net income

̶

̶

̶

Cash dividends, ¥65 per share̶̶

Purchase of treasury stock̶

Net changes in the year

Total
Equity¥(0)¥92¥21,359

2,227

̶

̶

2,227

̶

(692)

̶

̶

(692)

̶

̶

̶

(1)

̶

(1)

̶

̶

̶

̶

̶

(34)

(34)

10,656,000¥1,040¥871¥20,891¥(1)¥58¥22,859

Net income

̶

̶

̶

2,702

̶

̶

2,702

Cash dividends, ¥65 per share

̶

̶

̶

(693)

̶

̶

(693)

Purchase of treasury stock

̶

̶

̶

̶

(0)

̶

(0)

Net changes in the year

̶

̶

̶

̶

̶

(30)

(30)

10,656,000¥1,040¥871¥22,900¥(1)¥28¥24,838

Balance, April 1, 2011

Balance, March 31, 2012

Balance, March 31, 2013

Business Overview

Unrealized Gain on
Available-for-sale
Securities

TreasuryStock

New Medium-Term
Management Plan

CommonStock

Message fromthe President

Number of
Shares ofCommon Stock
IssuedCSR

Thousands of U.S. Dollars (Note 1)

Accumulated Other
Comprehensive
IncomeBalance, March 31, 2012

CapitalSurplus$11,064 $9,266

Retained
Earnings

Treasury
Stock

Unrealized Gain on
Available-for-sale
Securities

Total
Equity$222,244

$(11)

$ 617

$243,180

̶

̶

28,745̶̶

28,745

Cash dividends, $0.69 per share̶̶

(7,372)

̶̶

(7,372)

Purchase of treasury stock

̶

̶

̶

(0)

̶

(0)

Net changes in the year

̶

̶

̶

̶

(319)

(319)

$11,064 $9,266$243,617

$(11)

$ 298

$264,234

Balance, March 31, 2013

Financial Section

Net income

Corporate GovernanceCommon
Stock

See notes to consolidated financial statements.
Corporate Data
Stock Information

Panasonic Information Systems Co., Ltd.
Annual Report 201325

Consolidated Statement of Cash Flows

Panasonic Information Systems Co., Ltd. and consolidated subsidiaries
Year Ended March 31, 2013

Millions of Yen

Thousands of U.S.
Dollars (Note 1)

2013

2012

2013

¥ 4,411¥ 3,842$ 46,926

1,817

2,161

19,330Decrease in allowance for doubtful receivables

(6)

(19)

(64)

Interest and dividend income

(34)
13

(64)
14

(362)
138

Increase in accounts receivable - trade

(707)
(231)

(408)
52

(7,521)

Decrease (increase) in inventories
Decrease (increase) in other current assets

(67)
164

47

(713)
1,745

4

7

43

Increase (decrease) in accounts payable - trade

406

4,319

Increase in other current liabilities

810

(123)
262

(9)

(2)

(96)

(34)
6,537

(163)
5,615

(362)
69,543

34

88

362

Operating Activities:
Income before income taxes and minority interests
Adjustments for:
Depreciation and amortization

Interest expense
Changes in assets and liabilities:

Decrease in prepaid pension cost
Increase in liability for retirement benefits

Decrease in other long-term liabilities
Other - net
SubtotalInterest and dividends received

9(2,457)

8,617

(13)

(14)

(138)

(1,888)4,670(1,855)
3,834(20,086)
49,681(19,100)
8,100(8,000)16,500(203,191)
86,170(1,232)
2(1,164)1(13,106)
21

(172)
103

(431)
2

(1,830)1,096(12,299)

6,908(130,840)

Repayment of lease obligations

(247)

(211)

(2,628)Dividends paid

(693)

(692)

(7,372)

(940)

(903)
9,839

(10,000)

Interest paid
Income taxes paid
Net cash provided by operating activities
Investing Activities:
Increase in deposits paid
Decrease in deposits paid
Purchases of property and equipment
Sales of property and equipment
Purchases of software
Other - net
Net cash (used in) provided by investing activities
Financing Activities:

Net cash used in financing activities
Cash and Cash Equivalents, Beginning of Year

(8,569)14,0694,230(91,159)
149,670

Cash and Cash Equivalents, End of Year (Note 3)¥ 5,500¥ 14,069$ 58,511

Net (Decrease) Increase in Cash and Cash Equivalents

See notes to consolidated financial statements.

26

Panasonic Information Systems Co., Ltd.
Annual Report 2013

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. and consolidated subsidiaries
Year Ended March 31, 2013

Consolidated
Financial Highlights

1 Basis of Presentation of Consolidated Financial Statements

Message fromthe President

Panasonic Information Systems Co., Ltd. (the "Company") (formerly, Panasonic Electric Works Information Systems Co., Ltd.), was incorporated
on February 22, 1999, as a subsidiary of Panasonic Electric Works Co., Ltd. (the "Parent" (a)). The Company is 64% owned by the Parent at
both March 31, 2013 and 2012. The principal business of the Company is to provide integration service for information systems; maintenanceof computer systems; design, development, sales, lease, and rental of computer software; information network service, and sales of related
equipment.
The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in the Japanese Financial
Instruments and Exchange Act and its related accounting regulations, and in accordance with accounting principles generally accepted in Japan("Japanese GAAP"), which are different in certain respects as to the application and disclosure requirements of International Financial ReportingStandards.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to the consolidated
financial statements issued domestically in order to present them in a form, which is more familiar to readers outside Japan. In addition, certain
reclassifications have been made in the 2012 consolidated financial statements to conform to the classifications used in 2013.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which the Company is incorporated andoperates. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers outside Japanand have been made at the rate of ¥94 to $1, the approximate rate of exchange at March 31, 2013. Such translations should not be construed
as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.

New Medium-Term
Management Plan
Business Overview(a) The Parent was merged with Panasonic Corporation by an absorption-type merger in January 2012.

2 Summary of Significant Accounting Policies

CSR

a. Consolidation
The consolidated financial statements as of March 31, 2013 include the accounts of the Company and its 2 subsidiaries (2 subsidiaries in 2012)(together, the "Group").
Under the control concept, the Company consolidates entities that it, directly or indirectly, is able to exercise control over operations.
Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets of the acquired subsidiary at the date ofacquisition and is amortized on a straight-line basis over five years.
All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized profit included in assets
resulting from transactions within the Group is also eliminated.

Corporate Governanceb. Cash Equivalents
Cash equivalents are short-term investments that are readily convertible into cash and that are exposed to insignificant risk of changes in value.
Cash equivalents include deposits paid, all of which mature or become due within three months of the date of acquisition.
c. Inventories
Merchandise and supplies are stated at the lower of cost, determined by the moving-average method, or net selling value. Work in process
inventories are stated at the lower of cost, determined by the specific identification method, or net selling value.

Financial Section

d. Investment Securities
Available-for-sale securities, which are not classified as either trading securities or held-to-maturity debt securities, are reported at fair value, withunrealized gains and losses, net of applicable taxes, reported in a separate component of equity.

Corporate Data
Stock Informatione. Property and Equipment
Property and equipment are started at cost. The straight-line depreciation method is applied to all property and equipment for 2012 and 2013.
The range of useful lives is from 8 to 15 years for buildings and from 3 to 10 years for tools, furniture, and fixtures. The useful lives for leaseassets are the terms of the respective leases.
f. Long-Lived Assets
The Group reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset or
asset group may not be recoverable. An impairment loss is recognized if the carrying amount of an asset or asset group exceeds the sum of theundiscounted future cash flows expected to result from the continued use and eventual disposition of the asset or asset group. The impairment
loss would be measured as the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of the
discounted cash flows from the continued use and eventual disposition of the asset or the net selling price at disposition.
Panasonic Information Systems Co., Ltd.
Annual Report 201327

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. and consolidated subsidiaries
Year Ended March 31, 2013

g. Software
Software to be sold is amortized by the straight-line method over the estimated economic life of the software, 3 years. Software for internal use
is amortized by the straight-line method over its useful life, 5 years.
h. Retirement Benefits
The Company has a noncontributory funded pension plan together with the Parent and certain other domestic consolidated subsidiaries of the
Parent covering substantially all of their employees. The liability for retirement benefits is accounted for based on projected benefit obligations
and plan assets at the balance sheet date. Besides, the simplified method is used for computing retirement benefit obligation of one of theCompany's subsidiaries.
i. Asset Retirement Obligations
In March 2008, the Accounting Standards Board of Japan (the "ASBJ") published ASBJ Statement No. 18, "Accounting Standard for Asset
Retirement Obligations" and ASBJ Guidance No. 21, "Guidance on Accounting Standard for Asset Retirement Obligations". Under thisaccounting standard, an asset retirement obligation is defined as a legal obligation imposed either by law or contract that results from theacquisition, construction, development, and normal operation of a tangible fixed asset and is associated with the retirement of such tangible
fixed asset. The asset retirement obligation is recognized as the sum of the discounted cash flows required for the future asset retirement and isrecorded in the period in which the obligation is incurred if a reasonable estimate can be made. If a reasonable estimate of the asset retirement
obligation cannot be made in the period the asset retirement obligation is incurred, the liability should be recognized when a reasonable estimate
of asset retirement obligation can be made. Upon initial recognition of a liability for an asset retirement obligation, an asset retirement cost is
capitalized by increasing the carrying amount of the related fixed asset by the amount of the liability. The asset retirement cost is subsequently
allocated to expense through depreciation over the remaining useful life of the asset. Over time, the liability is accreted to its present value eachperiod. Any subsequent revisions to the timing or the amount of the original estimate of undiscounted cash flows are reflected as an adjustment
to the carrying amount of the liability and the capitalized amount of the related asset retirement cost.
j. Leases
In March 2007, the ASBJ issued ASBJ Statement No. 13, "Accounting Standard for Lease Transactions", which revised the previous accounting
standard for lease transactions. The revised accounting standard for lease transactions was effective for fiscal years beginning on or after April 1,
2008.
Under the previous accounting standard, finance leases that were deemed to transfer ownership of the leased property to the lessee were
capitalized. However, other finance leases were permitted to be accounted for as operating lease transactions if certain "as if capitalized"
information was disclosed in the notes to the lessee's financial statements. The revised accounting standard requires that all finance leasetransactions be capitalized by recognizing lease assets and lease obligations in the balance sheet. In addition, the revised accounting
standard permits leases which existed at the transition date and do not transfer ownership of the leased property to the lessee to continue
to be accounted for as operating lease transactions with certain "as if capitalized" information disclosed in the notes to the lessee's financial
statements.
The Company applied the revised accounting standard effective April 1, 2008. In addition, the Company continues to account for leases
which existed at the transition date and do not transfer ownership of the leased property to the lessee as operating lease transactions.
All other leases are accounted for as operating leases.
k. Bonuses to Directors and Audit & Supervisory Board Members
Bonuses to directors and audit & supervisory board members are accrued at the end of the years to which such bonuses are attributable.
l. Software Revenue Recognition
On March 30, 2006, the ASBJ issued Practical Issues Task Force No. 17, "Practical Solution on Revenue Recognition of Software". The Group
adopted this task force in the year ended March 31, 2007.
m. Construction Contracts
In December 2007, the ASBJ issued ASBJ Statement No. 15, "Accounting Standard for Construction Contracts", and ASBJ Guidance No. 18,"Guidance on Accounting Standard for Construction Contracts". Under this accounting standard, construction revenue and construction costs
should be recognized by the percentage-of-completion method, if the outcome of a construction contract can be estimated reliably. When total
construction revenue, total construction costs, and the stage of completion of the contract at the balance sheet date can be reliably measured,
the outcome of a construction contract is deemed to be estimated reliably. If the outcome of a construction contract cannot be reliably
estimated, the completed-contract method should be applied. When it is probable that the total construction costs will exceed total construction
revenue, an estimated loss on the contract should be immediately recognized by providing for a loss on construction contracts.
n. Income Taxes
The provision for income taxes is computed based on the pretax income included in the consolidated statement of income and comprehensive

28

Panasonic Information Systems Co., Ltd.
Annual Report 2013

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. and consolidated subsidiaries
Year Ended March 31, 2013

Consolidated
Financial Highlights

income. The asset and liability approach is used to recognize deferred tax assets and liabilities for the expected future tax consequences of
temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred taxes are measured by applying
currently enacted tax laws to the temporary differences.

Message fromthe President

o. Per Share Information
Basic net income per share is computed by dividing net income available to common shareholders by the weighted-average number of commonshares outstanding for the period.
Diluted net income per share is not presented as no securities with a dilutive effect have been issued.
Cash dividends per share presented in the accompanying consolidated statement of income and comprehensive income are dividends
applicable to the respective years, including dividends to be paid after the end of the year.
The weighted-average number of common shares used in the basic net income per share computation was 10,655,645 shares and
10,656,703 shares for 2013 and 2012, respectively.

New Medium-Term
Management Plan

p. Accounting Changes and Error Corrections
In December 2009, the ASBJ issued ASBJ Statement No. 24, "Accounting Standard for Accounting Changes and Error Corrections", and
ASBJ Guidance No. 24, "Guidance on Accounting Standard for Accounting Changes and Error Corrections". Accounting treatments under thisstandard and guidance are as follows: (1) Changes in Accounting Policies - When a new accounting policy is applied following revision of an
accounting standard, the new policy is applied retrospectively unless the revised accounting standard includes specific transitional provisions,in which case the entity shall comply with the specific transitional provisions. (2) Changes in Presentation - When the presentation of financial
statements is changed, prior-period financial statements are reclassified in accordance with the new presentation. (3) Changes in Accounting
Estimates - A change in an accounting estimate is accounted for in the period of the change if the change affects that period only, and isaccounted for prospectively if the change affects both the period of the change and future periods. (4) Corrections of Prior-Period Errors - Whenan error in prior-period financial statements is discovered, those statements are restated.

Business Overview
Corporate Governance
Financial Section
Corporate Data
Stock Information

Panasonic Information Systems Co., Ltd.
Annual Report 2013

CSR

q. New Accounting Pronouncements
Accounting Standard for Retirement Benefits — On May 17, 2012, the ASBJ issued ASBJ Statement No. 26, "Accounting Standard for
Retirement Benefits" and ASBJ Guidance No. 25, "Guidance on Accounting Standard for Retirement Benefits", which replaced the AccountingStandard for Retirement Benefits that had been issued by the Business Accounting Council in 1998 with an effective date of April 1, 2000, andthe other related practical guidance, and followed by partial amendments from time to time through 2009.
Major changes are as follows:(a) Treatment in the balance sheet
Under the current requirements, actuarial gains and losses and past service costs that are yet to be recognized in profit or loss are notrecognized in the consolidated balance sheet, and the difference between retirement benefit obligations and plan assets (hereinafter, "deficit or
surplus"), adjusted by such unrecognized amounts, is recognized as a liability or asset.
Under the revised accounting standard, actuarial gains and losses and past service costs that are yet to be recognized in profit or loss shallbe recognized within equity (accumulated other comprehensive income), after adjusting for tax effects, and any resulting deficit or surplus shallbe recognized as a liability (liability for retirement benefits) or asset (asset for retirement benefits).
(b) Treatment in the statement of income and comprehensive income
The revised accounting standard does not change how to recognize actuarial gains and losses and past service costs in profit or loss. Thoseamounts would be recognized in profit or loss over a certain period no longer than the expected average remaining working lives of theemployees. However, actuarial gains and losses and past service costs that arose in the current period and have not yet been recognized in
profit or loss shall be included in other comprehensive income, and actuarial gains and losses and past service costs that were recognizedin other comprehensive income in prior periods and then recognized in profit or loss in the current period shall be treated as reclassification
adjustments.
(c) Amendments relating to the method of attributing expected benefit to periods and relating to the discount rate and expected futuresalary increases
The revised accounting standard also made certain amendments relating to the method of attributing expected benefit to periods and relating to
the discount rate and expected future salary increases.
This accounting standard and the guidance for (a) and (b) above are effective for the end of annual periods beginning on or after April 1, 2013,
and for (c) above are effective for the beginning of annual periods beginning on or after April 1, 2014, or for the beginning of annual periods
beginning on or after April 1, 2015, subject to certain disclosure in March 2015, both with earlier application being permitted from the beginningof annual periods beginning on or after April 1, 2013. However, no retrospective application of this accounting standard to consolidated financial
statements in prior periods is required.
The Company expects to apply the revised accounting standard for (a) and (b) above from the end of the annual period beginning on April
1, 2013, and for (c) above from the beginning of the annual period beginning on April 1, 2014, and is in the process of measuring the effects ofapplying the revised accounting standard in future applicable periods.

29Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. and consolidated subsidiaries
Year Ended March 31, 2013

3 Reconciliation to Cash and Cash Equivalents
The reconciliation of cash and deposits in the consolidated balance sheet to cash and cash equivalents in the consolidated statement of cash
flows as of March 31, 2013 and 2012, was as follows:

Cash and deposits
Deposits paid with original maturities of within three months
Time deposits over three months
Cash and cash equivalents¥

Millions of Yen

Thousands of U.S.
Dollars

2013

2012

2013

269
5,231

176
13,993(100)¥ 14,069¥ 5,500

¥

$

2,862
55,649$ 58,511

4 Inventories
Inventories as of March 31, 2013 and 2012, consisted of the following:

MerchandiseWork in process
Supplies
Total

Millions of Yen

Thousands of U.S.
Dollars

2013

2012

2013

¥ 290
92
1
¥ 383

¥ 65
86
1
¥ 152

$ 3,085979
10$ 4,074

Millions of Yen

Thousands of U.S.
Dollars

2013

2012

2013

¥231

¥279

$2,457

5 Investment Securities
Investment securities as of March 31, 2013 and 2012, consisted of the following:

Non-current:
Marketable equity securities

The costs and aggregate fair values of investment securities as of March 31, 2013 and 2012, were as follows:
Millions of Yen

Unrealized
Gains

Unrealized
LossesFair Value

¥187

¥ 54

¥ (10)

¥231

¥187

¥102

¥ (10)¥279

Cost

March 31, 2013
Securities classified as:
Available-for-sale:
Equity securities
March 31, 2012
Securities classified as:
Available-for-sale:
Equity securities

30

Panasonic Information Systems Co., Ltd.
Annual Report 2013

Thousands of U.S. Dollars

Cost$1,989Unrealized
Gains

Unrealized
LossesFair Value$574$(106)$2,457

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. and consolidated subsidiaries
Year Ended March 31, 2013

Consolidated
Financial Highlights

6 Goodwill
Goodwill as of March 31, 2013 and 2012, consisted of the following:Thousands of U.S.
Dollars

2013

2012

2013

¥ 13

¥ 29
0
¥ 29

$ 138

Millions of Yen

Thousands of U.S.
Dollars

2013

2012

2013

¥ 35
18
¥ 53
(18)
¥ 35

¥ 44
7
¥ 51
(7)
¥ 44

$ 373
191
$ 564
(191)
$ 373

—

¥ 13

Message fromthe President

Goodwill on business acquisition
Consolidation goodwill
Total

Millions of Yen

—

$ 138

Goodwill on business acquisition and consolidation goodwill are amortized on a straight-line basis over five years.
New Medium-Term
Management Plan

7 Deposits Received
Deposits received as of March 31, 2013 and 2012, consisted of the following:

Business Overview

Welfare pension
Other
Total
Less current portionLong-term debt, less current portion
Interest rates applicable to the welfare pension were 7.1% at March 31, 2013 and 2012.

Year Ending March 31

Thousands of
U.S. Dollars

¥18
2
2
2
2
27
¥53

$ 191
21
21
21
21
289
$ 564

Corporate Governance

2014
2015
2016
2017
2018
2019 and thereafter
Total

Millions of Yen

CSR

Annual maturities of deposits received at March 31, 2013, were as follows:

8 Retirement Benefits

Financial Section

The Company has severance payment plans for employees. Under most circumstances, employees terminating their employment are entitled toretirement benefits determined principally based on accumulated points allocated to them each year according to their age and job evaluationand interest points over the accumulated points. Such retirement benefits are made in the form of annuity payments from the noncontributory
funded defined benefit pension plan. Employees are entitled to larger payments if the termination is involuntary, by retirement at the mandatory
retirement age, by death, or by voluntary retirement at certain specific ages prior to the mandatory retirement age.
The liability (asset) for employees' retirement benefits as of March 31, 2013 and 2012, consisted of the following:Thousands of U.S.
Dollars

2013

2012

2013

¥ 4,989(3,431)
1,558(1,927)(300)¥ (669)¥ 4,375(3,371)
1,004(1,487)(354)¥ (837)$ 53,074(36,500)
16,574(20,500)(3,191)$ (7,117)

Panasonic Information Systems Co., Ltd.
Annual Report 2013

Corporate Data
Stock Information

Projected benefit obligation (a)Fair value of plan assets
Unfunded benefit obligations
Unrecognized actuarial loss
Unrecognized prior service cost
Net asset

Millions of Yen

31

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. and consolidated subsidiaries
Year Ended March 31, 2013

Prepaid pension cost
Liability for retirement benefits

(844)
7

(7,234)
117

Millions of Yen

Thousands of U.S.
Dollars

2013

2012

2013

¥ 274
95
(99)
54
136
¥ 460

¥ 239
102
(93)
9
147
¥ 404

$ 2,915
1,011(1,053)574
1,447$4,894

2013

2012

(680)
11

(a) For one of the consolidated subsidiaries, the simplified method is used for computing retirement benefit obligations.
The components of net periodic benefit costs for the years ended March 31, 2013 and 2012, are as follows:

Service cost (a)Interest cost
Expected return on plan assets
Amortization of prior service cost
Recognized actuarial loss
Net periodic benefit costs(a) Net periodic benefit cost of subsidiary using the simplified method is included.
Assumptions used for the years ended March 31, 2013 and 2012, are set forth as follows:

Discount rate
Expected rate of return on plan assets
Amortization period of prior service cost
Recognition period of actuarial gain/loss

1.6%
3.0%
7 years
15 years

2.5%
3.0%
7 years
15 years

9 Equity
Japanese companies are subject to the Companies Act of Japan (the "Companies Act"). The significant provisions in the Companies Act that
affect financial and accounting matters are summarized below:
a. Dividends
Under the Companies Act, companies can pay dividends at any time during the fiscal year in addition to the year-end dividend upon resolution
at the shareholders' meeting. For companies that meet certain criteria such as (1) having a Board of Directors, (2) having independent auditors, (3)having an Audit & Supervisory Board, and (4) the term of service of the directors is prescribed as one year rather than two years of normal termby its articles of incorporation, the Board of Directors may declare dividends (except for dividends-in-kind) at any time during the fiscal year if thecompany has prescribed so in its articles of incorporation. The Company meets all the above criteria.
The Companies Act permits companies to distribute dividends-in-kind (noncash assets) to shareholders subject to a certain limitation andadditional requirements.
Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles of incorporation of thecompany so stipulate. The Companies Act provides certain limitations on the amounts available for dividends or the purchase of treasury stock.
The limitation is defined as the amount available for distribution to the shareholders, but the amount of net assets after dividends must be
maintained at no less than ¥3 million.
b. Increases/Decreases and Transfer of Common Stock, Reserve and Surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (a component of retained
earnings) or as additional paid-in capital (a component of capital surplus) depending on the equity account charged upon the payment of such
dividends until the aggregate amount of legal reserve and additional paid-in capital equals 25% of the common stock. Under the Companies
Act, the total amount of additional paid-in capital and legal reserve may be reversed without limitation. The Companies Act also provides that
common stock, legal reserve, additional paid-in capital, other capital surplus, and retained earnings can be transferred among the accounts
under certain conditions upon resolution of the shareholders.
c. Treasury Stock and Treasury Stock Acquisition Rights
The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stock by resolution of the Board of
Directors. The amount of treasury stock purchased cannot exceed the amount available for distribution to the shareholders, which is determinedby a specific formula. Under the Companies Act, stock acquisition rights are presented as a separate component of equity. The Companies Act
also provides that companies can purchase both treasury stock acquisition rights and treasury stock. Such treasury stock acquisition rights arepresented as a separate component of equity or deducted directly from stock acquisition rights.

32

Panasonic Information Systems Co., Ltd.
Annual Report 2013

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. and consolidated subsidiaries
Year Ended March 31, 2013

Consolidated
Financial Highlights

10 Income Taxes
The Company and subsidiaries are subject to Japanese national and local income taxes which, in the aggregate, resulted in a normal effective
statutory tax rate of approximately 37.8% for the years ended March 31, 2013 and 2012.
The tax effects of significant temporary differences, which resulted in deferred tax assets and liabilities as of March 31, 2013 and 2012, are as follows:
Thousands of U.S.
Dollars

2013

2012

2013

¥ 76
265
290
163
¥ 794

¥ 72
290
226
156
¥ 744

$

¥ 237
17
0
¥ 254
¥ 540

¥ 299
35
1
¥ 335
¥ 409

$ 2,521181
0$ 2,702$ 5,745

Message fromthe President

809
2,819
3,085
1,734
$ 8,447

New Medium-Term
Management Plan
Business Overview

Deferred tax assets:
Accrued enterprise taxes
Depreciation
Accrued bonus to employees
Others
Total
Deferred tax liabilities:
Prepaid pension cost
Unrealized gains on available-for-sale securities
OthersTotal
Net deferred tax assets

Millions of Yen

Because the differences between the normal effective statutory tax rates and the actual effective tax rates for the years ended March 31, 2013
and 2012, are not material, the tax reconciliations are not disclosed.

11 Research and Development Costs
CSR

Research and development costs included in cost of sales and selling, general, and administrative expenses were ¥135 million ($1,436
thousand) and ¥129 million for the years ended March 31, 2013 and 2012, respectively.

Corporate Governance

12 Leases
The Group leases certain computer equipment, software, and other assets.
Total lease payments under finance leases for the years ended March 31, 2013 and 2012, were ¥264 million ($2,809 thousand) and ¥286
million, respectively.
Obligations under finance leases and future minimum payments under noncancelable operating leases as of March 31, 2013, were as follows:
2013
Millions of Yen

Operating
Leases

¥ 91
50
¥141

¥195
176
¥371

Due within one year
Due after one year
Total

Thousands of U.S. Dollars

Finance
LeasesOperating
Leases$2,075
1,872$3,947$ 968
532$1,500Financial Section

Finance
LeasesCorporate Data
Stock Information

Pro forma Information of Leased Property Whose Lease Inception Was before March 31, 2008
Pro forma information of leased property whose lease inception was before March 31, 2008 was as follows:
Millions of Yen

2013

Acquisition cost
Accumulated depreciation
Net leased property

Tools, Furnitureand Fixtures

Software

¥19
(16)
¥ 3

–
–
–

2012
Total

¥19
(16)
¥ 3

Tools, Furnitureand Fixtures

¥32
(26)
¥ 6

Software

¥ 1
(1)
¥ 0

Total

¥ 33
(27)
¥ 6

Panasonic Information Systems Co., Ltd.
Annual Report 201333

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. and consolidated subsidiaries
Year Ended March 31, 2013

Thousands of U.S. Dollars

2013

Acquisition cost
Accumulated depreciation
Net leased property

Tools, Furnitureand Fixtures

Software

$202
(170)
$ 32

–
–
–

Total

$202
(170)
$ 32

Obligations under finance leases:

Due within one year
Due after one year
Total

Millions of Yen

Thousands of U.S.
Dollars

2013

2012

2013

¥ 3
0
¥ 3

¥5
3
¥8

$ 32
0
$ 32

Millions of Yen

Thousands of U.S.
Dollars

2013

2012

2013

¥ 4
0
¥ 4
¥ 6

¥ 52
1
¥ 53
¥ 63

$ 43
0
$ 43
$ 64

Depreciation expense, interest expense, and other information under finance leases:

Depreciation expense
Interest expense
Total
Lease payments

Depreciation expense and interest expense, which are not reflected in the accompanying consolidated statement of income and comprehensive
income, are computed by the straight-line method and the interest method, respectively.

13 Financial Instruments and Related Disclosures(1) Financial Instruments’ Policies
The Group raises necessary money from its own fund, in light of capital investment plans for development of software and acquisition of data
management facilities and hardware, etc. The Company places surplus funds only in short-term deposits.
(2) Financial Instruments and Risks
Accounts receivable - trade which are operating receivables, are exposed to customer credit risks. Investment securities are shares incompanies with which the Company has business relationships or capital alliances, and are exposed to market fluctuation risks.
Settlements of most accounts payable - trade which are operating liabilities, are within one year. Some of them are in foreign currency due toexports of products and are subject to exchange-rate fluctuation risks. However, they have little impact because of their small amounts. Leaseobligations relating to finance leases are mainly for procuring the required capital investment. Maturities can be up to five years after settlement
dates.
(3) Financial Instrument Risk Management Structure
a. Credit Risk Management (including risks of customers breaching contracts)
In accordance with the receivables management rules, the Company regularly monitors the status of key customers' operating receivables
and oversees due dates and balances by customer in cooperation between the head office accounting department and each businessdivision. With this, the Company is endeavoring to swiftly identify and alleviate collection concerns that could stem from deteriorating financial
positions or other factors. Its subsidiaries have implemented the same management system in compliance with the Group's receivables
management policies.
The maximum amount of credit risk as of the end of the fiscal year under review is shown as a balance sheet value of financial assets
subject to credit risks.
b. Market Risk Management (foreign exchange and interest rate risks)
The Company's operating liabilities in foreign currency have little impact due to their small amounts. The Company checks out trends inexchange rates at each time transactions are made.

34

Panasonic Information Systems Co., Ltd.
Annual Report 2013

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. and consolidated subsidiaries
Year Ended March 31, 2013

Consolidated
Financial Highlights

The Company regularly assesses the prices of marketable investment securities and financial positions of their issuers (business partners)
and constantly reviews the necessity of such holdings in consideration of the relationship with them.
c. Funding-Related Liquidity Risk Management (risk of inability to settle by payment dates)
The Company's accounting department formulates and renews funding plans based on reports from each department in a timely manner.
The Company also has made the agreement for use of the cash management system with Panasonic Corporation so as to control liquidity
risks by managing surplus funds and balances constantly.

Message fromthe President(4) Fair Values of Financial Instruments
Fair values of financial instruments are based on a quoted price in active markets. If a quoted price is not available, other rational valuation
techniques are used instead.
Millions of Yen

Fair Value

Cash and deposits
Accounts receivable - trade
Deposits paid
Investment securities
Total
Accounts payable - trade
Accounts payable - other
Income taxes payable
Long-term lease obligations
Total

¥

269
7,582
16,236231¥ 24,318¥ 2,253
1,659
948
176
¥ 5,036

¥

269
7,582
16,236231¥ 24,318¥ 2,253
1,659
948
174
¥ 5,034

Unrealized
Gain/Loss

–
–
–
–
–
–
–
–
(2)
¥ (2)

Business Overview

Carrying
AmountNew Medium-Term
Management Plan

March 31, 2013

Millions of Yen

Fair Value

Cash and deposits
Accounts receivable - trade
Deposits paid
Investment securities
Total
Accounts payable - trade
Accounts payable - other
Income taxes payable
Long-term lease obligations
Total

¥

176
6,869
13,999279¥ 21,323¥ 1,847
1,555
1,015
362
¥ 4,779

¥

176
6,869
13,999279¥ 21,323¥ 1,847
1,555
1,015
356
¥ 4,773

Unrealized
Gain/Loss

–
–
–
–
–
–
–
–
(6)
¥ (6)

Corporate GovernanceCarrying
AmountCSR

March 31, 2012

Thousands of U.S.
Dollars

Fair Value

Cash and deposits
Accounts receivable - trade
Deposits paid
Investment securities
Total
Accounts payable - trade
Accounts payable - other
Income taxes payable
Long-term lease obligations
Total

$

2,862
80,660172,7232,457$ 258,702$ 23,968
17,64910,085
1,872$ 53,574$

2,862
80,660172,7232,457$ 258,702$ 23,968
17,64910,085
1,851$ 53,553

Unrealized
Gain/Loss

–
–
–
–
–
–
–
–
(21)
¥ (21)

Corporate Data
Stock Information

Carrying
AmountFinancial Section

March 31, 2013

Cash and Deposits
The carrying values of cash and deposits approximate fair value because of their short maturities.
Investment Securities
The fair values of investment securities are measured at the quoted market price of the stock exchange for the equity instruments. Fair value
information for the investment securities by classification is included in Note 5.
Panasonic Information Systems Co., Ltd.
Annual Report 201335

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. and consolidated subsidiaries
Year Ended March 31, 2013

Accounts Receivables and Accounts Payable
The carrying values of accounts receivable and accounts payable approximate fair value because of their short maturities.
Deposits Paid
The carrying values of deposits paid approximate fair value because of their short maturities.
Income Taxes Payable
The carrying values of income tax payable approximate fair value because of their short maturities.
Long-Term Lease Obligations
The fair values of lease obligations are determined by discounting the cash flows related to the debt at the Group's assumed lease interest rate.
(5) Maturity Analysis for Financial Assets with Contractual Maturities
Millions of Yen

March 31, 2013

Due in1 Year or Less

Due after
1 Year through5 Years

Due after
5 Years through10 Years

Due after 10 Years

269
7,582
16,236¥ 24,087

–
–
–
–

–
–
–
–

–
–
–
–

Cash and deposits
Accounts receivable - trade
Deposits paid
Total

¥

Thousands of U.S.
Dollars

March 31, 2013

Due in1 Year or Less

Due after
1 Year through5 Years

Due after
5 Years through10 Years

Due after 10 Years

Cash and deposits
Accounts receivable - trade
Deposits paid
Total

$

2,862
80,660172,723$ 256,245

–
–
–
–

–
–
–
–

–
–
–
–

Millions of Yen

Thousands of U.S.
Dollars

2013

2012

2013

¥ (48)¥ (62)$ (511)¥ (48)
18¥ (30)¥ (62)
28¥ (34)$ (511)
192$ (319)Please see Note 12 for obligations under finance lease.

14 Comprehensive Income
The components of other comprehensive income for the years ended March 31, 2013 and 2012, were as follows:

Unrealized gain on available-for-sale securities:
Gains arising during the year
Reclassification adjustments to profit or loss
Amount before income tax effect
Income tax effectTotal other comprehensive income

36

Panasonic Information Systems Co., Ltd.
Annual Report 2013

̶

̶

̶

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. and consolidated subsidiaries
Year Ended March 31, 2013

Consolidated
Financial Highlights

15 Related Party Transactions
Balances as of March 31, 2013 and 2012, and transactions for the years ended March 31, 2013 and 2012, with the Parent, its consolidated
subsidiaries, and its associated companies were as follows:

2013

2012

2013

Sales
Purchases
Lease and rental expense
Interest income¥ 21,911
611
568
29

¥ 22,799
202
431
57

$ 233,096
6,500
6,043
309

Accounts receivable - trade
Deposits paid
Other current assets
Accounts payable:
Trade
Other

¥

5,034
15,98810¥ 4,435
13,6988$ 53,553
170,085
106

71
147

26
254

755
1,564

New Medium-Term
Management PlanThousands of U.S.
Dollars

Message fromthe President

Millions of Yen

Business Overview

16 Subsequent EventAppropriation of Retained Earnings
The following appropriation of retained earnings as of March 31, 2013, was resolved at the Board of Directors' meeting held on May 20, 2013:

Year-end cash dividends, ¥32.5 ($0.35) per share

Millions of Yen

Thousands of U.S.
Dollars¥ 346$ 3,681
CSR
Corporate Governance
Financial Section
Corporate Data
Stock Information

Panasonic Information Systems Co., Ltd.
Annual Report 201337

Independent Auditor’s Report38

Panasonic Information Systems Co., Ltd.
Annual Report 2013

Panasonic Information Systems Co., Ltd. and consolidated subsidiaries
Year Ended March 31, 2013

Corporate Data

As of July 1, 2013

Consolidated Subsidiaries

Headquarters• Panasonic Net Solutions Co., Ltd.
		 Paid-in capital:¥70 million
		 Nature of business: Development of groupware• V-Internet Operations, Inc.
		 Paid-in capital:¥60 million
		 Nature of business: Development of

Total Shares Authorized
Total Shares Issued
Stock Exchange Listing
Securities Code

As of March 31, 2013

40,000,000 Shares
10,656,000 Shares
4,674Tokyo Stock Exchange,
First Section

Breakdown of Shareholders
by Number of Shares Held

Breakdown of Shareholders
by Investor Type(% / Number of Shares Held)(% / Number of Shares Held)

1 – 999

Financial Institutions

8.60% 916,181

4.39% 467,600（25 persons）

1,000 – 4,999

Financial Instruments Firms

8.58% 914,993

0.80% 85,533（28 persons）

5,000 – 9,999

4283

Shareholder

Panasonic Corporation

66.65% 7,102,100（56 persons）

10,000 – 99,999

Foreign Corporations, Other

8.48% 903,500

7.14% 760,327（67 persons）
Individuals, Others

More than 100,000

21.02% 2,240,440（4,498 persons）

71.84% 7,655,000
Number of
Shares(Thousands)

Ownership
Ratio (%)

6,787

63.69

Employees Stock Ownership Association

256
110

2.40
1.03

84

0.79

64
41
38
37
36
36
36

0.60
0.38
0.36
0.35
0.33
0.33
0.33

CREDIT SUISSE SECURITIES (EUROPE) LIMITED PBOMNIBUS CLIENT ACCOUNTThe Master Trust Bank of Japan, Ltd. (Trust Account)
Japan Trustee Services Bank, Ltd. (Trust Account 6)
Japan Trustee Services Bank, Ltd. (Trust Account 3)
Japan Trustee Services Bank, Ltd. (Trust Account 1）
FUJITSU LIMITEDIBM Japan, Ltd.
Oki Electric Industry Co., Ltd.

75.0
65.0

65.0 65.0 65.0 65.0 65.0

55.0 55.0
45.0

Corporate Governance

4.69

CSR

500

Japan Trustee Services Bank, Ltd. (Trust Account)

Full-Year Dividends per Share(Yen)

BBH FOR FIDELITY LOW-PRICED STOCK FUND

（PRINCIPAL ALL SECTOR SUBPORTFOLIO）

Business Overview

Major Shareholders

Other Corporations

2.50% 266,326

100 Shares
Regular Shareholders’ Meeting June of each year
Transfer Agent
Sumitomo Mitsui Trust Bank, Limited
Stock Trading Unit

New Medium-Term
Management Plan

Number of Shareholders

security systems
Message fromthe President

Stock Information

			Consolidated
Financial Highlights

Panasonic Information Systems Co., Ltd.
19-19, Chayamachi, Kita-ku, Osaka
530-0013, Japan
EstablishedFebruary 22, 1999
Paid-in Capital¥1,040 million
Fiscal Year-End
March 31Nature of Business Information services
Number of Employees 686 (consolidated) *As of March 31, 2013
Company Name

10.0

’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14
11 3 3 3 3 3 3 3 3 3 3*(Plan)*Four-month irregular accounting year

Financial Section

Note: In addition to the above, there are 372 shares of treasury stock.

Stock Price Chart and Volume Trend (Monthly)(Yen)

Stock Price (Left)

3,000

(Yen)

Nikkei Average (Right)

15,00010,000

1,000

5,000

0
(Shares)

600,000

Corporate Data
Stock Information

2,000

0
Stock Trading Volume

400,000
200,000
0

’08/1

’09/1

’10/1

’11/1

’12/1

’13/1
Panasonic Information Systems Co., Ltd.
Annual Report 2013

60000039

19-19, Chayamachi, Kita-ku, Osaka 530-0013, Japan
Telephone: +81-6-6906-2801 Facsimile: +81-6-6377-0833
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