Annual Report 2012
For the Year Ended March 31, 2012

Contents

Panasonic Information Systems Co., Ltd. ANNUAL REPORT 201201

Consolidated Financial Highlights

02

Message from the President“All for the Customer”
・Performance in the Year Ended March 31, 2012・Forecast for the Year Ending March 31, 2013
・Dividend Policy
・About the Company Name Change

07

Revisions to the Medium-Term Management Plan

08

Business Overview

10

Introduction Examples

12

Corporate Governance

14

CSR

16

Financial Section
16 Management’s Discussion and Analysis
18 Risk Factors
20

Consolidated Balance Sheet

22

Consolidated Statement of Income and Comprehensive Income

23 Consolidated Statement of Changes in Equity
24

Consolidated Statement of Cash Flows

25 Notes to Consolidated Financial Statements
36

37

Independent Auditors’ Report

Corporate Data / Stock Information

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 athome and abroad. Actual results and business performance may differ materially from these statements.

Consolidated Financial Highlights

Panasonic Information Systems Co., Ltd. (formerly, Panasonic Electric Works Information
Systems Co., Ltd.) and consolidated subsidiaries
Years Ended March 31

Millions of Yen

Thousands of U.S.
Dollars (Note 1)

2012

2011

2010

2009

2008

2012

¥ 36,373¥ 34,221¥ 36,650¥ 37,320¥ 39,066$ 443,573

Operating income

4,255

4,205

4,371

4,632

4,877

51,890Net income

2,227

2,581

2,563

2,783

2,842

27,159Net cash provided by operating activities

3,834

3,154

4,483

3,864

2,848

46,756

Net cash provided by (used in) investing activities

6,908（2,862）（2,829）（3,866）（1,921）

84,244

Net cash used in financing activities

（903）

（821）

（863）

（710）

（639）

（11,012）

Cash and cash equivalents

14,069

4,230

4,759

3,968

4,679

171,573

Total assets

29,012

27,31725,14623,211

21,185353,805

Equity22,85921,35919,65917,604

15,552

278,768

Net sales

Yen¥ 209.02¥ 242.25¥ 240.51¥ 261.13¥ 266.78

Cash dividends

65.00

65.00

65.00

75.00

65.00

Operating income to net sales

11.7%

12.3%

11.9%

12.4%

12.5%

Return on equity

10.1%

12.6%

13.8%

16.8%

19.7%

Equity ratio

78.8%

78.2%

78.2%

75.7%

73.3%

Basic net income (Note 2)

U.S. Dollars (Note 1)

2.55

$

0.79

Notes: 1. Amounts expressed in U.S. dollars are calculated using the exchange rate prevailing on March 31, 2012 of ¥82 to US $1.00.
2. Diluted net income per share is not indicated here, because there are no potentially dilutive shares.

Net Sales

Operating Income/Operating Income to Net Sales

Net Income

Basic Net Income per Share(Millions of Yen)

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

(Yen)

4,877

2,842

39,06637,320 36,650

34,22136,373

4,632

4,371

4,205

266.78 261.13
240.51 242.25

2,783
2,563

4,255

2,581

209.02

2,227

2008

2009

2010

2011

2012

12.5

12.4

11.9

12.3

2008

2009

2010

2011

11.7

2012

2008

2009

2010

2011

2012

2008

2009

2010

2011

2012

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

Annual Report 20121

Message from the President“All for the Customer”
To fulfill our passion for providing ever better products and services, we will pull together to surmount alldifficulties and continue to move forward.
We value our DNA as a manufacturer and spirit of challenge.
To ensure that we provide our “all for the customer,” we will marshal our forces behind our singleness of
purpose.

July 1, 2012
The Company’s name changed to Panasonic Information Systems Co., Ltd.

The Company was established in 1999 when the information system department of the former Matsushita Electric Works, Co., 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, operation and 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.

2

Panasonic Information Systems Co., Ltd.

Annual Report 20123

Message from the President

January 2012. We also stepped upof the large-scale projects related to theefforts launched in the previous year toPanasonic Group’s restructuring by the

improve our management constitution by

end of the fiscal year. We have alreadyDuring the fiscal year ended Marchcutting costs and augmenting business

commenced numerous projects for

31, 2012, the Japanese economy

efficiencies.

the fiscal year ending March 31, 2013,

Performance in the Year Ended
March 31, 2012

experienced a gradual recovery from

In addition to reorganizing systems

and we believe that completing these

the effects of the Great East Japanre l a t e d t o t h e P a n a s o n i c G ro u p ’s

projects by the end of the term will be

Earthquake. However, the economy fell

restructuring during the year, we won aimportant.

short of a full-fledged rebound due tosubstantial number of orders for large-such factors as the flooding in Thailand

scale projects from customers outside

and prolonged appreciation of the yen.

the former Panasonic Electric WorksMarch 31, 2013

In the IT service industry, the experience

Group, leading to a significant increase

The fiscal year ending March 31, 2013,of disaster on an unprecedented scale

in System Solutions sales. We also took

is the final year for our medium-termle d t o n e w a c t i v i t y a s c o m p a n i e s

on business in new areas, such as the

management plan. Business conditions

re v a m p e d t h e i r I T s t r a t e g i e s . F o rprovision of cloud services.

are altogether different now than theyexample, companies began making

As a result, in the fiscal year ended

were in April 2010, when we formulated

increased use of data centers as one

March 31, 2012, net sales rose for thethis plan. For example, the surge inaspect of their disaster countermeasures

first time in seven years, and operating

popularity of cloud computing has

and electricity conservation measures.

income expanded for the first time in

led to structural changes in corporate

In this operating environment, thefive years. Net income declined, owing

IT strategies and investments. The

Group persevered in accordance withto the posting of an extraordinary loss

reorganization of the Panasonic Groupthe themes outlined in its medium-term

stemming from restructuring expenses,

is one such example. In the fiscal year

management plan, which was formulated

but as in the preceding fiscal year weending March 31, 2013, we plan toin the fiscal year ended March 31,

awarded a dividend of ¥65 per share,

respond to these changes through the2011, and in its second year during thecomprising a stable dividend of ¥55 andinitiatives outlined below.

period under review. We concentrated

a performance-tied dividend of ¥10.

Augmenting Sales in the Generalon reorganizing IT systems in line

Our order backlog was downwith the Panasonic Group’s businesssubstantially as of March 31, 2012,

In line with the reorganization of therestructuring that went into effect inpartly because we had completed some

Panasonic Group, in the fiscal year

Net Sales by Sales Category

Operating Income

The increase in the System Solutions
business contributed to the first rise in net
sales in seven years.

Owing to higher net sales andrationalization efforts, operating income
improved for the first time in five years.

(Millions of Yen)
39,06637,320 36,650 40,000 36,373
34,221
7,052 5,951
6,647
6,125
5,699
8,349

7,580

6,958

30,0006,367(Millions of Yen)
System andCommunications
Equipment

4,205

Up 7.5%year on year

Price Increase in Higher
Sales Streamdrop develop- investment increase lining 4,255
ment
cost
cost

2010 02011

General market
sales targets

10,000

8,000
8,000

6,707

7,354

+837

4,000

Up 0.4%
year on year

10,0002009

Change in category to “Panasonic Group”
and “general market”

6,000
-676

System
23,665 23,789 23,045 22,155 22,244 Services

2008“Former Panasonic Electric Works
Group” and “Outside the former
Panasonic Electric Works Group”

+745

-357

Solutions
Up 25.7%
year on year

Market(Millions of Yen)

-500

8,004 System

20,0004

Forecast for the Year Ending

2,000
2012

Panasonic Information Systems Co., Ltd.

2011

2012

0

2011

2012

2013

(Target)10,000ended March 31, 2012, we changed

Business Development for the Year Ended March 31, 2013

our classification of business, from
“Panasonic Electric Works Group” and“outside the Panasonic Electric Works
Group” to “Panasonic Group” and“general market.”
For the general market, our current
medium-term management plan
focuses on five growth business areas.

Expansion
into the generalmarketContribute toPanasonic
Bolstermanagement
constitution

Acquire new large-scale projects with main products
Strengthen sales by collaborating with the Panasonic Group
Provide high-quality cloud services to the generalmarket through the Osaka Central Data Center
Contribute to operations• Expand the value chain• Respond to globalization• Contribute to IT cost reductions
Contribute to business• Participate in “comprehensive business” centered on the“100 arrows strategy”
Accelerate the recovery of up-front investment to create
an environment for cloud computing
Improve development quality to reduce the number of
unprofitable projects

Particularly in the cloud-related business,during the fiscal year ended March 31,
2012, we received orders from large
manufacturing companies to configure

the restructuring of the Panasonic Group.

if we can participate on the IT side ofcore systems for cloud services, which

We recognize that this business had

the “comprehensive” business that

was a major success for us. W ith

extremely important implications for thePanasonic is pursuing, our technologies

regard to ERP system configuration,

Panasonic Group and broader society, as

and expertise should help to grow its

we earned high marks for our detailed

well. Resolved that we would succeed inbusiness. Through initiatives such as

follow-up and support structure, which

this project at all costs, our management

these, we plan to create and reinforce

we believe will lead to a steady increaseteam was deeply involved from the very

a new type of partnership with thein orders. Furthermore, in cooperation

outset as we took on initiatives related toPanasonic Group.

with the Panasonic Group we madeIT infrastructure, application configuration

Strengthening Management Practices

IT-based solution proposals for its

and networks. As a result, by the time

Further“comprehensive” solution business. The

the Panasonic Group commenced

Fear of failure can sap an organization’sticketing system that we are in charge

operations in its new guise, the work thatwill to take on new fields of business.

of introducing has been implemented at

we had been entrusted was in nearly

For this very reason, we believe thatnumerous venues, including aquariums,

perfect operation.

consistently making our management

large-scale amusement facilities and art

Owing to this restructuring of thepractices more robust is essential tomuseums. We plan to more aggressively

Panasonic Group, however, not only did

our ability to continue addressing newpromote this business, as believe it has

our parent company change, but thechallenges. During the fiscal year ending

the potential for future growth.

changes paved the way for us to cultivate

March 31, 2013, we will concentrate inGoing forward, we have set the goal of

the huge Panasonic market. In the future,

particular on accelerating our recovery

generating net sales of ¥10,000 million

in our efforts targeting the Panasonicof up-front investment in creating anin the general market, and we will use

Group we believe it will be importantenvironment for cloud computing. We

these five growth business areas as theto pursue initiatives that contribute

will also improve development quality

springboard to further development. As

to growth and development from thei n a b i d t o re d u c e t h e n u m b e r o f

a first step toward this goal, in the fiscal

perspectives of both “operations”

unprofitable projects. Naturally, people

year ending March 31, 2013, we are

and “business.” For example, if weare a company’s most important asset,

targeting net sales of ¥8,000 million in

can leverage the technologies andand people are at the heart of the IT

the general market.

expertise that our group has cultivatedbusiness. Accordingly, we will persevere

As a Member of the Panasonic Groupto propose IT reforms that will cut

i n e ff o r t s t o c u l t i v a t e o u r h u m a n

One of our most important projects in thecosts for the Panasonic Group, we will

“resources.”

fiscal year ended March 31, 2012, wascontribute to improvements in its overall

the IT system reconfiguration related tooperating efficiency. At the same time,
Annual Report 20125

Message from the President¥27.5, plus performance-tied dividends

Forecast for the Year Ending March 31, 2013
（Millions of Yen）

2012

2013

AmountRatio tonet sales

AmountNet Sales

36,373−38,000−

4.5%

Operating Income

4,255

11.7%

4,300

11.3%

1.1%

Net Income

2,227

6.1%

2,600

6.8%

16.7%

of ¥5, bringing total dividends to ¥65 pershare.

Ratio to Year-on-year
net sales
increase

About the Company Name Change

Effective July 1, 2012, our company
name changed to Panasonic Information
The Articles of Incorporation provide

Systems Co., Ltd. As is described earlier,that March 31, September 30, andthe past one to two years have involved

other days specified by the Board ofmajor changes, both inside and outside

We expect the Japanese economy to

Directors shall be the record dates for

the Company. The reason behind ourremain in a recovery phase, prompted

the dividends from surplus funds andcorporate name change was to augment

by demand related to reconstructionthat the Board of Directors shall be thecorporate value further through a fasterfollowing the Great East Japandecision-making body concerning the

response to these changes.

Earthquake and a temporary easing in

dividends from surplus funds. For the

One aspect of the Panasonic Group’s

yen appreciation. Nevertheless, someforeseeable future we plan to pay stable

growth strategy is the goal of becoming

deep-rooted concerns continue to castannual dividends of ¥55 per share.

an “green innovation company.” We aim

a shadow on the economic horizon and,

While taking into overall consideration

to play a part in this, and we will pursue

if they materialize, could affect corporate

the fund-raising environment, financial

corporate initiatives accordingly.

IT investment.

conditions and the payout ratio, we aim

Our name change embodies our role

to also reflect our consolidated operating

as the IT company for the Panasonicperformance in dividends.

Group. To fill these shoes, we will need

Forecast for the Year Ending
March 31, 2013

As the fiscal year ending March 31,
2013, will be the final year for our group’s

to increase our presence even more than

medium-term management plan, we willIn the fiscal year ended March 31,

step up initiatives designed to meet its

2012, based on our policy of a stabletargets. Bearing these efforts in mind, in

dividend of ¥55 plus a performance-

We will apply our efforts to even more

the upcoming fiscal year we forecast net

linked dividend, we set total dividends

diverse themes than previously. To be

sales of ¥38,000 million and operating

per share at ¥65. For the fiscal year

successful in these endeavors, we

income of ¥4,300 million.

ending March 31, 2013, we plan to pay

will remain ever mindful of our spirit ofstable interim and year-end dividends ofchallenge and achieve greater corporate

Dividend Policy

(%)

65.0

of profits to shareholders a priority.
While keeping in mind the need to

65.0
28.7

24.4

for the ongoing guidance and support ofour investors as we face the challenges

75.0

The Company considers the returnsolidarity as we move forward. We ask

Dividends per Share, Payout Ratio(Yen)

we have in the past.

65.0

65.0
31.1

27.0

that lie ahead.
July 2012

26.8

replenish internal reserves, reinforcing
our management foundation for long-

Kazuhiro Maegawa

term growth, our aim is to ensure

President

steady dividends, taking a proactive
stance in linking dividends to financial
performance.

6

Panasonic Information Systems Co., Ltd.

2008

2009

2010

Dividends per share (Yen)
Payout ratio (%)

2011

2012

Revisions to the Medium-Term Management Plan

Responding Swiftly in a Changing Environment
enables compatibility with multiple

Works” to “collaboration with thedevices, such as smartphones andPanasonic Group.” The former

tablet computers. By also including

Panasonic Electric Works is the main

The medium-term management

Desktop as a Service (DaaS*) andbody in Panasonic Eco Solutions, andplan specifies five growth businessother services in our integrated

during the year under review we jointly

areas: infrastructure optimization, IT

cloud proposals, we can respond to

proposed “comprehensive” solutions

operations service, design processincreasingly diverse customer needs.

for leisure facilities and environmental

reform, system integration for core

* Converting PC desktop environments to thin clients 		
(virtual desktop), providing cloud services.

monitoring systems, among others,

2. Collaboration withrecord in this area. Going forward, we

Revising Our “Five GrowthBusiness Areas”

functions and collaboration with
Panasonic Electric Works. The plantargets sales of ¥5,800 million for theseand have steadily built up a track
aim to increase the number of joint

the Panasonic Group

five growth business areas in the fiscal

Owing to the Panasonic Group’s

proposals we make with Panasonicyear ending March 31, 2013. However,re s tr uc tur ing, w e ha v e cha nge d

E c o S o l u t i o n s . We a l s o p l a n t oowing to the rapid changes taking“collaboration with Panasonic Electriccollaborate in other domains.

Five Growth Business Areas:“Infrastructure Optimization”

3. Revise Numerical Targets

place in our operating environment,
we have revised the content of thesebusiness areas.

→ Addition of the thin client business andconversion to the “Nextructure business”(Millions of Yen)

1. Change “Infrastructure

3,100

table.

3,000

In slightly more than the last year, thepopularity of cloud computing has

for the abovementioned “five growthbusiness areas.” Refer to the following

4,000

Optimization” to “Nextructure
Business”

We have revised our numerical targets

1,730

2,000

1,890

surged. At the forefront of this trend,
which is expected to continue into

1,000

the future, is Japanese companies’
efforts involving security and business

0

2011

2012

Infrastructure optimization
Thin client business

continuity plans (BCPs). These focuses

2013(Target)are expected to continue driving thetransition to the cloud.

Target Amount for the Five Growth Business Areas(Millions of Yen)

In “infrastructure optimization,”

Five growth business areas + α

2011

2012

2013

1 Nextructure business

1,730

1,890

3,100

IT operations service

230

700

800

into account the changes that

3 Design process reform

120

270

400

a re o c c u r r i n g , w e h a v e re v i s e d

4 System integration for core functions

180

390

1,000

5 Collaboration with the Panasonic Group

110

330

500

2,370

3,580

5,800

we had promoted the business ofbuilding infrastructure that employedvirtualization technology. Taking

this category to the “Nextructurebusiness,” to which we have added
thin client solutions. This change

2

Total

Annual Report 20127

Business Overview
Business Model
Breakdown of Net Sales

61%

System Services● System operation services at data centers● Maintenance and operation of customer systems

Build stronger
relationships

Enhancing
Stock-Typed Business
Breakdown of Net Sales

22%

System Solutions

New customers
System proposal● Core system architecture solutions● IT infrastructure architecture solutions● Development / provision of proprietary packaged software

Solution proposal

Offering Multivendor
Services

Our Customers

New customers

Breakdown of Net Sales
System and17%
Communications Equipment

Existing
customers● Sales of computers, servers, andcommunications equipment● Network and facility construction

Performance in the Year to March 31, 2012

System Services● System operation services at data centers● Maintenance and operation of customer systems
Information systems have become indispensible for corporate
management. Various business systems are being put in place toenable companies to operate 24 hours a day, 365 days a year. These
operations play a vital role in business continuity. From two data
center locations, the Osaka IDC and Osaka Central Data Center, theGroup maintains the safety and security of customer systems whileproviding operation services that meet customer needs, including forcloud services.

Net Sales, Operating Margin（Millions of Yen）（%）

23,66523,78923,045

21.5

20.3

20.7

19.9

20.7

2008

2009

2010

2011

2012

Net Sales（Millions of Yen）
Operating Margin（％）

22,155 22,244

Downward pressure on the price of services for existing customers
continued, but net sales were up year on year, owing to theacquisition of new customers and a higher utilization rate at the
Osaka Central Data Center.
The gross margin (ratio of gross profits to net sales) was affectedby downward pressure on the price of services. However, weboosted efficiency via thorough system operations management
and shifted personnel to development products, improving thecost of sales. The gross margin improved year on year as a result.
Future Strategy

Hisashi Kurono,Managing Director
G o i n g f o r w a rd , i n a d d i t i o n t ousing data centers for disastercountermeasures and electricity
conservation measures, Japanesecompanies will look to augments e c u r i t y a n d e n s u re b u s i n e s scontinuity from the perspective of
curtailing IT investment and heightening convenience. As a result,business is expected to continue moving to the cloud.
In response to accelerating demand for cloud services in thegeneral market, we will leverage our Nextructure business and IT
operations service. To conventional cloud services, we will add
disaster recovery (DR*) and DaaS services, thereby attracting newcustomers and working to continue providing high-value-added
services for existing customers.
We will pursue information system infrastructure innovation andcontribute to the Panasonic Group’s provision of “comprehensive
business” IT support and efforts to reduce expenditures.
* Refers to the recovery of systems that have been damaged by disaster, as well as
preventive equipment and functions, as well as operating structures.

8

Panasonic Information Systems Co., Ltd.

Performance in the Year to March 31, 2012

System Solutions● Core system architecture solutions● IT infrastructure architecture solutions● Development / provision of proprietary packaged software
We are seeing significant changes in the operating environment,
and customers are looking for nothing short of a revolution in
productivity and efficiency enhancements, as they continue torenovate their businesses to enhance their competitive advantage.
We strive to deliver solutions strategies that make use of IT to assist
our customers in these and all their goals.

During the year, we provided core systems for a leading
constructor of homes and worked on a Web system for a leading
communications company. In the area of in-house software, we
worked aggressively to expand sales of our workflow packages.
We also continued to take part in projects involving IT systemreconfiguration in relation to the Panasonic Group’s restructuring.
As a result, net sales substantially exceeded the previous year’s
figure.
The gross margin decreased year on year, owing to volume
discounts on large-scale projects and increased development
costs on some projects.
Future Strategy

Akira Hisano,Managing Director

Net Sales, Operating Margin（%）（Millions of Yen）

8,349

8,004

7,580
6,958
20.2

15.4

2008

2009

6,367

18.4

24.9

19.2

2010

2011

2012

Net Sales（Millions of Yen）
Operating Margin（％）

In the general market, we will target
vigorous medium-sized companies
with businesses tailored to specificindustries and sectors.
In the business of system
integration for core functions, we will
create industry-specific templates
for the medical equipment andtelecommunications sectors, aiming to develop solutions that fit
customers’ needs more precisely. We will also provide IT support
for business startups by energetic customers in environmental
businesses and those that are aiming for IPOs.
Our sales of sales management solutions for leisure facilities
will target operators of art museums, natural history museums,
aquariums and amusement facilities. We will combine our leisurefacility ticketing system with Panasonic products to maximize
synergies and promote the “comprehensive business strategy.”
Performance in the Year to March 31, 2012

System and Communications Equipment

Net sales increased during the year, owing to the sale of peripheraldevices in tandem with the introduction of large-scale thin-clientsystems to local government bodies and favorable results in otherareas.
The gross margin was down year on year, but remained high as
we continued to make high-value-added proposals.

● Sales of computers, servers, andcommunications equipment● Network and facility construction
When offering solutions to our customers, the Group also proposes
the most suitable system equipment for the customer. We call this a“multivendor” approach.
We leverage a track record we have cultivated over our long
history of operations in Japan and overseas, by testing every device
available on the market for adoption. Based on our own experience,
we confidently propose flexible combinations not tied to specificmanufacturers.

Future Strategy
Business demand for smartphones, tablet computers and otherdevices is growing rapidly. With the introduction of cloud services,
we expect demand for multi-device compatibility to continue
rising. We plan to make integrated proposals designed to meetcustomers’ needs, and we expect to maintain a high level ofprofitability as a result of these high-value-added offerings.

Net Sales, Operating Margin（%）（Millions of Yen）

7,052

6,647
5,951

16.4

15.0

2008

2009

5,699

17.2

17.9

2010

2011

6,125

16.2

2012

Net Sales（Millions of Yen）
Operating Margin（％）

Annual Report 20129

Introduction Examples

This section introduces some of the services and solutions that
we provided to customers in the fiscal year ended March 31, 2012.

http://www.city.fuji.shizuoka.jp/

Fuji City Office

Using Virtual Desktop to Create a Safe and Secure PC
Environment for School Personnel
Located in eastern Shizuoka Prefecture at thefoot of Mt. Fuji, the city of Fuji has a populationof approximately 260,000. The city is known for
its beautiful natural surroundings, as well as its
educational focus.

Solution Provided: Virtual Desktop Solution
Introduction Background and Issues

power was likely to make operations difficult. The Company

In the summer of 2010, personal computers were distributed to

put the full extent of its technologies and expertise to worksome 1,200 employees of elementary and junior high schools

in response to this requirement. In the end, we were able toin the city of Fuji. However, the city needed to introduce

complete the job in only one and a half months.

measures for lowering the burden of operations management

Results

and protect the security of personal data of the schools’ pupils

Service commenced on August 1, 2011. Although the job wasand students. We addressed this situation by virtualizing thelarge in scope—creating a virtual desktop environment for

PC environment. By handling all data on servers, we reduced

1,200 computers—activity proceeded apace, with no major

the operations management burden, and created a safe andglitches. Because of a rapid increase in computer use by

secure environment whereby no data was stored on the PCs

school employees, we expanded remote access, centering onthemselves.

Sundays. As a virtual desktop environment, the system offers

Highlights

the flexibility to work from any location, allowing more effective

This project, which was moving along steadily, was affected

use of time and better operational efficiency. As no data isby the Great East Japan Earthquake. Although sparedretained on personal computers, there is no danger of students’major disaster, Fuji is in a region where rolling blackouts

marks and personal information being leaked. Therefore, from awere implemented, which complicated plans to complete

security perspective the system was a major improvement.

configuration as planned by summer. The city of Fuji resolved
to complete the job by August, when high demand for electrical

Overview of the Virtual Desktop
At work

At homeKey
Introduction
Examples10

Forwarded to desktop screen

Does not take up
workplace space

Actual processing
performed on
the server

Raises operational
efficiency

Data not resident on
the personal computer

Improves security

No maintenance ofindividual terminals

Reduces operations
management burden

Desktop environment

Nidec Corporation (Nidec)

International Christian University (ICU)

Introducing Nextructure Cloud Services

Introducing a Thin Client Solution

This Group, which is growing and expanding rapidly on a global
basis, needed to create a robust IT infrastructure and desired payas-you go cloud services that were safe and secure. To achieve this,
we proposed Nextructure cloud services, providing highly reliablearchitecture using a Processing Area Network (PAN) that is highly
flexible and reliable, and a flexible cloud service payment system.

ICU had introduced a thin client system in 2005, but the university
needed to install additional applications, improve operating efficiency andshorten the time required for backups. ICU accorded high marks to theperformance and quality of the system we had introduced in 2005, so
we proposed that they continue employing a thin client system featuring
shorter operating times and improved efficiency.

Panasonic Information Systems Co., Ltd.

http://www.kyoto-aquarium.com/

Kyoto Aquarium

Providing a Speedy and Smooth Ticketing System
That Leaves More Time for Enjoyment

Located within Kyoto’s Umekoji Park, thisaquarium—one of the biggest inland aquariums
in Japan—opened its doors in March 2012. The
aquarium is noted for being the first in Japan
to use completely artificial seawater in its tanks(excluding freshwater tanks).

Solution Provided: Ticketing System

Introduction Background and Issues

of workers without imposing undue rigidity on operations.

The aquarium wanted to allow visitors as much time as possible

In January 2012, two months prior to opening, we set up a

to enjoy their facility without having to wait in crowds. To

help desk within the facility. In this manner, we were able tosurmount this problem, the facility needed a high-end ticketinginteract with employees and resolve issues through repeatedsystem that would issue tickets quickly and operate superlatively.

operations. This approach helped to eliminate uncertainties

As the core of this overall system, the facility aimed to linkprior to opening.

its group management and financial accounting systems to

Results

boost operational efficiency and provide management analysis.

The aquarium opened on March 14, 2012, attracting nationwide

Furthermore, the core aquarium management system needed

attention. The “one-year passport,” which allows free entrance

to be constructed on an outsourced backbone for safety andfor a full year, was a huge hit, surpassing initial expectations.

expandability, to simplify future expansion of operations.

Sales on the opening day were particularly high, with someHighlights

3,000 tickets issued, but the system performed smoothly in

We constructed a broad information system covering the entire

issuing all tickets throughout the day. During the nine-day

aquarium. In addition to a ticket issuance system, our system

Golden Week holiday period, approximately 145,000 people

encompassed a group reservation system, in-facility digital

visited the facility, and our system continued to operate trouble-

signage and the financial accounting system. Our most difficult

free. The aquarium plans to use the data accumulated fromchallenge lay in trying to gain a big-picture understanding ofproduct sales and on ages of entrants in the planning of future

the overall system while communicating the flow of operations.

business and events.

We decided to create a system that would reflect the needs

Total IT System Proposals for Leisure Facilities (Example)
Cooperating not only in hardware, but strengthening our structure for proposing IT systems themselves as all-in-one solutions

Financialaccounting
systemSales
information

Visitor number andsales amountmonitoring

Sales and inventory
management
systems

Input
information

Sales information

Ticketing system

Ticket issuinginformation

Admission information
Admission
information

Entrancegate
systemBilling
information

Reservation
information
TicketGroup management
issuing
information system

Toyota Digital Cruise, Inc.

Introducing “actbrain” as an e-Learning Service Backbone System
As the company that provides IT infrastructure support for the Toyota Group, Toyota Digital
Cruise consulted with us about specific training procedures in order to provide information
security education to Group companies. They had begun considering an e-learning system,
but had a number of requirements, including the ability to resell and a provider that had
abundant experience and expertise in system introduction. The company ultimately decided
upon “actbrain,” after taking advantage of the introduction experience of Panasonic ElectricWorks, our former parent company.

Credit card
payment
terminal

Kiosk
terminal

Selling
information
Selling
information

Digital signage
ation

Informtion

Informa

Other Key Introduction Examples
・ROZAI KOGYO KAISHA, LTD.
Introduced virtual desktop service (DaaS)・Tokushima Bunri University
Introduced virtual desktop service (thin client)・Participated in an experimental trial with Akita Next
Generation Vehicle Verification Consortium“eneview” Operation Support System for Charging Stands
Annual Report 201211

Corporate GovernanceAchieving Swift and Appropriate Decision Making and Supervisory and
Auditing Functions, as well as Business Controls

1. Business Execution

assessment of the office and its personnel

2. Auditingchanges.

and Supervision(2) Internal Audit
The Board of Directors meeting is held

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

regularly once a month and irregularly as

up of auditors and the Board of Auditors,

with the aim to execute fair and efficientrequired to report on significant operatinga n i n te r n a l a u d i t u n i t a s we l l a s a nbusiness and maintenance of an internal

policies, decisions on substantive matters,

accounting auditor, and is conducted as

check system to preempt and preventand the execution of business and duties,

follows: to implement a varied and effective

any irregularities. The division conducts

as well as statutor y matters. Also, toaudit, each carries out the management

its audit in line with the annual plan, andprovide neutral and impartial supervision,

audit from a different point of view together

the results are reported to the Board of

two of the eight directors are outsidewith appropriate coordination.

Directors.

directors.

(1) Board of Auditors and(3) Accounting Auditor

Actual business is executed by

the Auditors’ Inspection

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

The Board of Auditors is comprised ofCompanies Act and Financial Instruments

under the leadership of the president inauditors, audit plans, methods and soand Exchange Law, the Company has

accordance with policies that have been

forth, and reports on the implementationentered into an audit contract with Deloitte

decided by the Board of Directors to

status of the audit. The audit is mostly

Touche Tohmatsu LLC.

clarify the responsibility and to sufficiently

taken from the point of view of legality

demonstrate supervisory functions. Also,and is conducted on operations and thefor the purpose of uniting the wholefinancial condition by auditors based

Company as one through the discussion

on plans determined by the Board ofand sharing of information necessar y

Auditors. Auditors also attend important

3. Controls

We believe developing a sound businessfor the smooth and rational execution of

meetings such as that of the Board ofa nd ma inta ining cus tome r s’ tr us t inbusiness, we have established businessDirectors and give recommendations andour business are indispensible to thestrategy meetings and management study

advice from an independent standpoint.

grow th of the Company, so with thegroups.

To strengthen the functions of the auditors,

goal of establishing a regulated business

we also established an audit office toenvironment, we have assigned a board

support the auditors’ professional duties,

member to take charge of internal controls

and we consult with auditors regarding the(CSRM*). We have also established suchgroups as corporate ethics and information

Officers of the Company (As of July 1, 2012)
Auditor

Makoto Iwahashi*2,*3

Auditor

Mitsuhiro Aoyama

Maki Okajima

Executive Officer

Keisuke Tanaka

Managing Director

Akira Hisano

Executive Officer

Hajime Onishi

Managing Director

Hisashi Kurono

Executive Officer

Takashi Maeda

Director

Shuichi Takazaki

Executive Officer

Mitsuru Maekawa

Director

Tatsuo Yoshikawa

Executive Officer

Hiroyoshi Maruyama

Director

Takahiro Nakagawa*1

Executive Officer

Osamu Mizokoshi

President andRepresentative Director

Kazuhiro Maegawa

Vice President andRepresentative Director

Director
Auditor12

Concerning the audit under the1

Toshiya Hirono*
Takayuki Takeda*2

Panasonic Information Systems Co., Ltd.

*1 Outside director*2 Outside auditor*3 Appointed as an independent executive that meets therequirement stipulated by the Tokyo Stock Exchange Group,
Inc., that there be no danger of conflict of interest with generalshareholders.

security management committees that will
deploy concrete measures companywide
based on the content of discussions.
*CSRM: Combining CSR (Corporate Social Responsibility)
and Risk Management.

Governance Structure

General Meeting of Shareholders
Appointment and Dismissal
Audit

Board of Directors

Appointment and Dismissal

Board of Auditors
Auditors Room

Assistance

Cooperation

Accounting Audit
Appointment and Dismissal
Instruction

Supervision / Instruction

President

Cooperation Appointment
and Dismissal

Accounting Auditors

Internal Audit Division (Auditing)

Supervision / Instruction

Executive Directors

Business Strategy Meeting

Executive Officers
Internal Audit
Control

Executive Division
Control

Business Review Meeting
Director in Charge of CSRM and Internal Control
Company-wide Committee

Corporate Ethics Committee,
Information Security Management Committee, Other Committee

Message from the Standing Auditor
discussion recently, some parties have proposed making

Takayuki Takeda,
AuditorEye from Outside
the Company

outside directors mandatory and augmenting the authority of

After many years of experienceat the Board of Directors meetings. Some changes inauditors. Our company assigns multiple outside directors, aswell, and outside directors and auditors comment vigorously

in the accounting department at

corporate governance systems are necessary, but I believe

Panasonic Electric Works (now,it is important to find ways for our current system to function

Panasonic), I have ser ved as

more effectively. To this end, as a standing auditor I make it

the Company’s standing auditora point to ensure that non-standing auditors have access to(outside) for three years.

Our Board of Auditors, an “eye from outside the Company,”

the same amount of information as standing directors andauditors. They are provided with prior explanation on topics

comprises one standing auditor and two non-standing

for resolution by the Board of Directors and receive reports ofauditors. One of the outside auditors (non-standing) has aimportant internal meetings. This information provides themgreat deal of management experience in the IT industry inwith the decision-making materials they need to speak at thewhich Panasonic IS operates.

Board of Directors meetings.

During the Company’s fifth through eighth fiscal years, Mr.

Our second “eye from outside the Company” involves

Kuniaki Watanabe was appointed to this board. After working

liaison with our accounting auditor. In addition to providing

at IBM Japan and GE, he served as president of DEC

Deloitte Touche Tohmatsu LLC with audit reports andJapan. Thereafter, he continued his career as the president

quarterly audit review reports, every month the standingof major IT companies before setting up his own IT firm. Mr.

auditor, accounting auditor and Internal Audit Division meet to

Makoto Iwahashi, who replaced Mr. Watanabe on the Board

exchange information and ideas.

of Auditors, will have served until June 2014. He became aGoing forward, I aim to ensure that good communications

auditor following seven years as president of JFE Systems.

are maintained with outside auditors and the accounting

Both of these people brought to the Company a broad range

auditor, so that even if some impropriety arises, it can beof experience, including their backgrounds as company

nipped in the bud early on.

presidents. In addition to IT industry experience, they provided
advice and guidance to our Board of Auditors and Board of
Directors from an independent, industry-neutral standpoint.
With corporate governance the focus of increasing

Annual Report 2012

13

CSR

Seeking to Contribute to Global Culture by
Using IT Services to Enhance and Improve Societal Activities
As a Public Institution

power consumption is rising, and this ishave adopted an e-learning format, as we

For approximately 50 years since thebecoming a major problem for the whole

believe that an accommodating learningdays of our predecessor, the informationof society. We use data centers that canenvironment is important. The e-learning

systems division of Matsushita Electric

operate with lower power consumption

system makes it easy to track employee

Works (its name at the time), we havethan before, and integrated servers that

progress and confirm their understanding,worked with the spirit of the words ofuse virtualization technology; we areallowing more careful follow-up andthe founder of the Panasonic Group,

carrying out business operations that

instilling compliance awareness more

Konosuke Matsushita: “An enterpriseconsider the global environment at thethoroughly.

is a public institution” and “All for thesame time as utilizing our experience

3. Establishment of a System tocustomer.”with the latest IT. In such ways, we are“The mission as a business enterpriseis not just commercial pursuits, but to

We have in place a Corporate Ethics

mitigation measures.

Committee, which is chaired by the

devote ourselves to the progress anddevelopment of society and the well-being

president, and have appointed a director
Compliance (Corporate Ethics)

to take charge of introducing andof people through our business activities,

promoting our corporate ethics program.

thereby enhancing the quality of life

We have set up a Corporate Ethics

throughout the world.” This is the basis of
our corporate social responsibility (CSR)
activity.

■ Promoting Compliance

Secretariat to boost ethics awareness,(Corporate Ethics)

penetration and education within the

The Company commenced its compliance

Company, and for each region we havepromotion activities in September 1, 2003,

assigned corporate ethics leaders (mid-Activities for Fairness

through the introduction and developmentlevel employees, approximately one for

Based on the Panasonic Groupof a corporate ethics program, througheach 40 employees) to instill a thoroughmanagement philosophy, we try towhich it conducts thorough activities

spirit of compliance.

look beyond just complying with laws,

aimed at ensuring thoroughly fair corporate

4. Establishing a Corporate Ethics

ordinances and rules to conduct fair andactivities (corporate ethics management).

honest business activities according to■ Corporate Ethics Program

We have put in place a Corporate Ethics

conscience and good sense.

1. Conducting Activities to Ensure

Reporting Line to encourage internal

To thoroughly strengthen compliance,
we introduced and are developing a
corporate ethics program.

Reporting Line

Universal Awareness of “Compliancereporting and as a place for consultation

Guidelines”

in the event that an employee becomesTo put the Panasonic Code of Conduct

aware of activity that appears outside thei n t o p r a c t i c e , w e h a v e c re a t e d ascope of ethical behavior. Available 24

All for the Customer

Compliance Guidebook and distributed it

hours a day, 365 days a year, the reporting

Contributing to our customers’ businessto all employees. The guidebook provides

line is accessible via dedicated e-mail,leads to contributing to society. “To bea host of examples to help employees

dedicated fax or by post. We have set up

useful to the customer,” we always offer

hone their activities and sense of ethics

a consultation-friendly environment anddedication in our work through IT.

and to make judgments independently,

expanded the line to users outside theand is helping to instill a more thoroughCompany as well as inside. To protect the

Coexistence with the Global

understanding of compliance.

rights of people making use of the line, we

Environment

2. Employing e-Learning for Thoroughstrictly protect the identity of individuals

As IT equipment becomes moreprevalent and increasingly sophisticated,

14

Promote Corporate Ethics

supporting our customers’ environmental

Panasonic Information Systems Co., Ltd.

Ethics Training
All employees undergo ethics training. We

as well as reporting content, employing
due caution with regard to privacy andhandling. We also protect the privacy of thepersonnel working at the reporting desk by

Corporate Citizenship Activities

keeping their identities secret, as well.
5. Submitting a Commitment topeople in the younger age group thattypically donates blood is falling, resulting
in increasingly serious blood shortages

We encourage all our employees to takethroughout Japan. To address thispart in voluntary corporate citizenshipshortage, each year we hold a blood

We require all employees to submit a

activities.

drive targeting our employees and instatement of commitment to corporate■ Eco-Cap Collection

cooperation with the Japanese Red Cross

ethics. This document is designed to

T h e C o m p a n y ’s m a n a g e m e n t a n dSociety Blood Center. During these blood

ensure compliance by encouraging each

employees cooperate in collecting PET

drives, we also encourage employees to

employee to carry out their businessbottle caps, which we send to the Ecocap

register with bone marrow banks.

conscientiously and with common sense

Movement, an NPO. The funds generated■ Community Clean-up Activities

in a spirit of fairness and sincerity. Going

through these recycling activities are

We participate in the city of Osaka’s “Clean

forward, we plan to hone our corporate

donated toward vaccines for people

Osaka” campaign. Through this activity,

sense of ethics so that we will remain

in developing countries and to provide

the city of Osaka elicits participation fromtrusted by our customers, as we conductdisaster relief.

citizens and volunteers in cleaning up

Corporate Ethics to All Employees

our work on the basis of this sharedpublic spaces to maintain the city’s beauty.

conscientiousness, common sense andNumerous employees participate in thisspirit of fairness and sincerity.

activity, clearing away trash from the areas
surrounding their offices.

Risk Management

We define “risk” as “factors that could
impair efforts to achieve our businessplans” and “the gap between social
expectations and corporate reality,” and■ Fund-Raising Activities

we conduct risk management initiatives

The Company’s managers and employees

accordingly. Central to these activities iswork together on charity donation activities

the Risk Management Committee, whichto assist people affected by large-scale

is chaired by the president and reaches

seismic disasters and other calamities,

throughout the Company, liaising with

providing support to stricken regions via

each division and corporate function.

such organizations as the Japanese Red

The Company maintains a particular

Cross Society and the United Nations Highfocus on the appropriate management

Commissioner for Refugees (UNHCR).

of information, which we recognize as anMore specifically, in tandem with thesemi-annual formulation of businessplans we conduct risk assessments andmonitoring of each division and related
function. These activities are positioned
as one aspect of risk management
activities that respond to the PanasonicFurthermore, we are formulating aand Quality

important social responsibility. In addition,
Major Charity Donation Activities
・Cyclones in Southern Myanmar (May 2008)
・Great Sichuan Earthquake (May 2008)

through ongoing quality improvement
efforts on both the operational and・Haiti Earthquake (January 2010)

developmental fronts, we are working to・Great East Japan Earthquake (March 2011)

strengthen our structure to ensure thatGroup’s global and across-the-Grouprisk management.

Increasing Information Security

customers feel comfortable entrusting■ Blood Donations and Bone Marrow

their information systems to us.

Bank Registration

business continuity plan (BCP) in response

Because of Japan’s falling birthrate andto risk from large-scale natural disasters.

aging population, society faces a growing
need for blood transfusions, notably
for elderly people, but the number ofAnnual Report 201215

Financial Section / Management’s Discussion and Analysis

1. Financial Position

Net Income

Liabilities

Net income amounted to ¥2,227 million, fell

Owing to the acquisition of equipment at

13.7% compared with the preceding year.

fiscal year-end, payables increased ¥453

Net Sales
During the fiscal year ended March 31,
2012 (April 1, 2011, to March 31, 2012),

million. This was the primary reason

2. Assets, Liabilities and Net Assets

the Company focused on expanding

for an ¥532 million, or 10.3% increasein current liabilities during the year, to¥5,717 million as of March 31, 2012.

sales outside the Panasonic Electric

AssetsWorks* Group and to restructuring IT

Within current assets, accounts receivable

obligations prompted a decrease in fixedsystems in preparation for the businesson construction contracts rose ¥767 million

liabilities of ¥336 million, or 43.6%, toreorganization of the Panasonic Group.

in line with progress on development¥436 million at fiscal year-end.

As a result, net sales rose 6.3% during

projects. Also, deposits paid to Panasonic

EquityProgress in the repayment of lease

the year, to ¥36,373 million.

Corporation and other companies

Owing to the posting of ¥2,227 million in* In January 2012, absorbed through merger with Panasonic
Corporation

increased by ¥1,337 million. Consequently,

net income and the dividend payments

as of March 31, 2012, current assets wereof ¥692 million—the sum of payments

Cost of sales, Gross Profit, Selling,¥22,299 million, an increase of ¥1,766

for dividends awarded at the previous

General and Administrative Expenses

million, or 8.6%, from one year earlier.

fiscal year-end and the interim dividend,

During the year, we continued our efforts

Fixed assets decreased ¥71 million, or

equity amounted to ¥22,859 million on

to curtail costs and boost operating

1.1% during the year, to ¥6,712 million

March 31, 2012, up ¥1,499 million, or

efficiency. Cost of sales rose 7.5%, toat fiscal year-end. This decline was

7.0%, from one year previously.

¥29,238 million. Gross profit rose ¥115

attributable to the depreciation of those

Equitymillion, or 1.6%, to ¥7,135 million,

lease assets that were approaching theand the cost of sales ratio rose 0.9

end of their leasing agreements.

percentage point, from 79.5% to 80.4%.

(Millions of Yen)

21,359As a result, total assets were ¥29,012

Selling, general and administrative

million as of March 31, 2012, an increase(SG&A) expenses rose 2.3% from theof ¥1,695 million, or 6.2%, from a year

preceding year, to ¥2,882 million. The

earlier.

22,85919,65917,604
15,552

ratio of SG&A expenses to net sales
fell 0.3 percentage point, from 8.2% to
7.9%.
2008

Operating Income, Other expense
Consolidated operating income rose

(Millions of Yen)

1.2%, to ¥4,254 million, while the27,317

point, to 11.7%. Other expense was

29,012

2010

2011

2012

75.7

78.2

78.2

78.8

2009

2010

2011

2012

(%)

25,416

operating margin fell 0.6 percentage

2009

Equity Ratio

Total Assets

23,211

73.3

21,185¥413 million. this was largely due tothe extraordinary loss for restructuring
expenses (of ¥451 million).The interest
coverage ratio rose from the previous
year’s 269.5 times to 269.9 times.
2008

16

Panasonic Information Systems Co., Ltd.

2009

2010

2011

2012

2008

and amortization of ¥2,161 million, andan increase in trade accounts payable,

5.Order Backlog

which provided ¥408 million. Income
taxes paid used ¥1,855 million.

As of March 31, 2012, our order backlog

Cash Flows from Investing Activities

stood at ¥2,235 million, down 56.1%

ROE/ROA

Net cash provided by financing activities

from a year earlier. The main reason

Return on equity (ROE) for the year

came to ¥6,908 million, compared withfor this decrease was the completion

came to 10.1%, down from the previous¥2,862 million used in these activitiesof large-scale projects, such as theyear’s figure. The main reason was

during the preceding fiscal year.

configuration of IT systems in line withthe recording of an extraordinary loss

Primary reasons included ¥8,500

stemming from restructuring expenses.

million in income on the retur n of

Return on assets (ROA) was 15.2%.

deposits to Panasonic Corporation (after
netting out payments for deposits),

ROE¥1,164 million for purchases of property(%)

the Panasonic Group’s restructuring, by
fiscal year-end.

6. Research and Development

and equipment and ¥431 million for
19.7
16.8
13.8
12.6
10.1

2008

2009

2010

2011

2012

ROA
(%)

23.5
21.3

The Group’s research and development

Cash Flows from Financing Activities

activities are mainly conducted at its

During the year, net cash used in

R&D Center. During the fiscal year ended

financing activities totaled ¥903 million,

March 31, 2012, R&D expenditures¥82 million more than was used in theseamounted to ¥129 million, largely

activities in the preceding fiscal year.

for verifying the functionality of new

Dividends paid of ¥692 million were thetechnologies and commercial licenses.
The new medium-term management

principal use of cash.
Free Cash Flows

plan regards R&D activities for the

The aforementioned operating andcreation of new businesses andinvesting activities resulted in positive freetechnologies as important measures, andcash flows of ¥10,742 million, compared

we plan to invest a total of ¥300 million

with free cash flows of ¥292 million in thein these areas over a three-year period.

previous year.

18.2
16.3

purchases of software.

7. Capital Investment

15.2

Forecast for the Fiscal Year
4. endingMarch 31, 2013

Capital investment in the year to March
2008

2009

2010

2011

2012

3. Cash Flows
Cash Flows from Operating Activities
Net cash provided by operating activities
amounted to ¥3,834 million, ¥679 million
more than in the preceding year. Principal

The Company’s forecast of consolidated

31, 2012, amounted to ¥2,046 million.

operating performance for the fiscal year

Principal investments were for theending March 31, 2013 (April 1, 2012, toacquisition of high-capacity hardware

March 31, 2013) is shown below.

and the configuration of integrated server

Fiscal year
ended March
31,2012Net Sales

Fiscal year
Year-on-Yearended March
increase
31,2013(Millions of Yen) (Millions of Yen)(%)

¥36,373 ¥38,000

4.5%

Operating
Income

4,255

4,300

1.1%

Net Income

2,227

2,600

16.7%

environments, totaling ¥1,555 million. In
addition, ¥64 million was invested in thedevelopment of an integrated IT asset
management system.

factors included cash provided byincome before income taxes and minority
interests, of ¥3,842 million, depreciation
Annual Report 201217

Financial Section / Risk Factors

Items 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 18,2012).

Risks Related to
Economic Conditions
Fluctuations in the Economic
Environment
Demand for the Group’s products ands e r v i c e s ma y be a ffected b y 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.

investments or sales initiatives for a particular
product or service may fail in comparison 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 securing the Group’s profits,
and becomes especially noticeable when
demand for products and services decreases.
Prices of many of the Group’s products andservices are expected to continue declining in
the fiscal year ending March 31, 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.

it 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.,
and Purchase Price Surges
The Group’s operations depend on obtaining
high-quality products and services ina 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.

Securing Capable Human Resources
Interest Rate Fluctuations
Interest rate fluctuations may affect operating
expense, interest expense and interest
income, as well as the value of financial
assets and liabilities, and may have an
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 instrategic products and services. However,18

Panasonic Information Systems Co., Ltd.

The Group’s future success depends largely
on its ability to retain skilled employees in thetechnical 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 skilledemployees exceeds the supply, making
competition for attracting and retaining these
employees intense. Because of this severe
competition for skilled employees, the Groupmay be unable to retain existing personnel orattract new talent. If this should happen, theGroup’s business, 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 andCapital Status and Financial
Conditions of 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, 2010, through March
31, 2013, and an earnings forecast for the
fiscal year ending March 31, 2013. However,the Group 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
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.

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, 2012, 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.

Changes in Account Standards andTax Systems
The Group’s business, performance andfinancial status may be adversely affected by
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 more taxes than

expected.

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.

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.

Risks Related to Disasters or
Unpredictable Events
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,
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.
T h e G ro u p m a y i n c u r c o n s i d e r a b l e
expenses for restoring damaged facilities,
which could adversely affect the Group’sbusinesses, performance and financial
position.

Other Risks

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.

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 sheet
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.

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.

Annual Report 201219

Consolidated Balance Sheet

Panasonic Information Systems Co., Ltd. (formerly, Panasonic Electric Works Information Systems
Co., Ltd.) and consolidated subsidiaries
Year March 31, 2012ASSETS

Millions of Yen

Thousands of U.S.
Dollars (Note 1)

2011

2012

2012

Current Assets:
Cash and deposits (Notes 3 and 13)
Accounts receivable - Trade (Notes 13 and 15)
Inventories (Note 4)

¥

176

¥

172

$

2,146

6,869

6,442

83,768

152

204

1,854

13,99912,662

170,720

Deferred tax assets (Note 10)

408

322

4,975

Other current assets (Note 15)

695

730

8,476

22,29920,532271,939

947

907

11,549

6,629

5,142

80,841

Lease assets (Note 12)

802

835

9,780

Construction in progress

Deposits paid (Notes 3, 13 and 15)

Total current assets
Property and Equipment:
Buildings
Tools, furniture and fixtures

746

531

9,098

Total

9,124

7,415

111,268

Accumulated depreciation(5,110)4,014(3,520)3,895(62,317)
48,951

Investment securities (Notes 5 and 13)

279

341

3,402

Goodwill (Note 6)

29

45

354

Software

586

522

7,146

Development cost of software in progress

56

341

683

Long-term deposits paid

254

256

3,098

Long-term prepaid expenses

550

310

6,707

Prepaid pension cost (Note 8)

844

891

10,293

Deferred tax assets (Note 10)

24

33

293

Other assets (Note 12)

83

177

1,012

(6)
2,699

(26)
2,890

(73)
32,915¥29,012¥27,317$353,805

Net property and equipment
Investments and Other Assets:

Allowance for doubtful receivables

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

20

Panasonic Information Systems Co., Ltd.

Millions of Yen

Thousands of U.S.
Dollars (Note 1)

2012

2011

2012

¥ 1,847
1,555¥ 1,970
1,102$ 22,524
18,963

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

1,015

1,061

12,378Consumption taxes payable

121

61

1,476

Deposits received (Note 7)

7

4

85

Other current liabilities (Note 12)

1,172

987

14,294

Total current liabilities

5,717

5,185

69,720Long-term deposits received (Note 7)

44

46

537

Deferred tax liabilities (Note 10)

23

166

280

Long-term lease obligations (Notes 12 and 13)

362

561

4,415

Income taxes payable (Note 13)

Long-Term Liabilities:

7

̶

85

436

773

5,317

̶

̶

̶

1,040

1,040

12,683871

871

10,622

20,891

19,356

254,768

(1)

(0)

(12)

58

92

707

Total equity

22,85921,359278,768

Total¥29,012¥27,317$353,805

Liability for retirement benefits (Note 8)

Total long-term liabilities
Commitments Liabilities (Note 12)
Equity (Notes 9 and 16):
Common stock authorized：40,000,000 shares; issued：10,656,000 shares
Capital surplus
Retained earnings
Treasury stock - at cost
320 shares in 2012 and 195 shares in 2011
Accumulated other comprehensive income Unrealized gain on available-for-sale securities

Annual Report 201221

Consolidated Statement of Income andComprehensive Income

Panasonic Information Systems Co., Ltd. (formerly, Panasonic Electric Works
Information Systems Co., Ltd.) and consolidated subsidiaries
Year Ended March 31, 2012

Millions of Yen

Thousands of U.S.
Dollars (Note 1)

2012

2011

2012

¥36,373
29,238¥34,221
27,201$443,573
356,561

7,135

7,020

87,012

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

2,880

2,815

35,122

Operating income

4,255

4,205

51,890Interest income (Note 15)

58

66

707

Interest expense

(14)

(171)

Gain on sales of investment securities (Note 5)

̶

(12)
282

(451)

̶

(5,500)

(6)

(66)
270

(72)

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

Other Income (Expenses):

Restructuring expense
Other - net

̶

(413)
3,842

4,475

(5,036)46,854Current

1,808

1,714

22,049Deferred

(193)
1,615

180
1,894

(2,354)
19,695Net Income before Minority Interests

2,227

2,581

27,159Net Income

2,227

2,581

27,159Net Income before Minority Interests

2,227

2,581

27,159Other income (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)

(34)

(188)

(415)

¥ 2,193¥ 2,393$ 26,744

2,193

2,393

26,744

̶

̶

̶

Yen

U.S. Dollars¥242.25
65.00

$2.55
0.79

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.

22

Panasonic Information Systems Co., Ltd.

¥209.0265.00

Consolidated Statement of
Changes in Equity

Panasonic Information Systems Co., Ltd. (formerly, Panasonic Electric Works Information Systems Co., Ltd.)and consolidated subsidiaries
Year Ended March 31, 2012

Millions of Yen

Number of
Shares ofCommon Stock
IssuedAccumulated Other
Comprehensive
IncomeCommon Stock

CapitalSurplusRetained
Earnings

Treasury
Stock

Unrealized Gain on
Available-for-sale
Securities

10,656,000¥1,040¥871¥17,468

¥(0)

¥280

¥19,659

Net income

̶

̶

̶

2,581

̶

̶

2,581

Cash dividends, ¥65 per share

̶

̶

̶

(693)

̶

̶

(693)

Purchase of treasury stock

̶

̶

̶

̶

(0)

̶

(0)

Net changes in the year

̶

̶

̶

̶

̶

(188)

(188)

10,656,000

1,040

871

19,356(0)

92

21,359Net income

̶

̶

̶

2,227

̶

̶

2,227

Cash dividends, ¥65 per share

̶

̶

̶

(692)

̶

̶

(692)

Purchase of treasury stock

̶

̶

̶

̶

(1)

̶

(1)

Net changes in the year

̶

̶

̶

̶

̶

(34)

(34)

10,656,000¥1,040¥871¥20,891

¥(1)

¥ 58

¥22,859

Balance, April 1, 2010

Balance, March 31, 2011

Balance, March 31, 2012

Total
EquityThousands of U.S. Dollars (Note 1)

Accumulated Other
Comprehensive
IncomeCommon Stock

Balance, March 31, 2011

CapitalSurplusRetained
Earnings$12,683 $10,622 $236,048

Treasury
Stock

Unrealized Gain on
Available-for-sale
Securities

Total
Equity$(0)$ 1,122$260,475

Net income̶̶

27,159̶̶

27,159Cash dividends, $0.79 per share̶̶(8,439)̶̶

(8,439)Purchase of treasury stock

̶

̶

̶

(12)

̶

(12)

Net changes in the year

̶

̶

̶

̶

(415)

(415)

$12,683 $10,622 $254,768

$(12)

$ 707

$278,768

Balance, March 31, 2012
See notes to consolidated financial statements.

Annual Report 201223

Consolidated Statement of Cash Flows

Panasonic Information Systems Co., Ltd. (formerly, Panasonic Electric Works
Information Systems Co., Ltd.) and consolidated subsidiaries
Year Ended March 31, 2012

Millions of Yen

Thousands of U.S.
Dollars (Note 1)

2012

2011

2012

¥ 3,842¥ 4,475$ 46,854

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

2,161

1,495

26,354

Decrease in allowance for doubtful receivables

(19)

(3)

(232)

Interest and dividend income
Interest expense

(64)
14

(73)
12

(780)
171

Gain on sales of investment securities

̶

(282)

̶

(408)
52

16
(61)

(4,976)634

Decrease (increase) in other current assets

9

(445)

110

Decrease (increase) in prepaid pension cost

47

(285)

573

Increase in liability for retirement benefits

7

̶

85

(123)
262

(254)
62

(1,500)3,195

Depreciation and amortization

Changes in assets and liabilities:(Increase) decrease in accounts receivable
Decrease (increase) in inventories

Decrease in accounts payable
Increase in other current liabilities

(2)

(13)

(24)

(163)
5,615

(120)
4,524

(1,988)68,476

Interest and dividends received

88

77

1,073

Interest paid

(14)

(12)

(171)

(1,855)
3,834(1,435)
3,154(22,622)46,756(8,000)16,500(8,500)7,500(97,561)
201,220(1,164)
1(1,580)(14,195)
12(431)(5,256)

Decrease in other long-term liabilities
Other - net
Subtotal

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

̶

Sales of investment securities

̶

(554)
417

Other - net

2

(145)

24

6,908

(2,862)

84,244

Repayment of lease obligations

(211)

(128)

(2,573)

Dividends paid

(692)

(693)

(8,439)Net cash used in financing activities

(903)
9,839

(821)

Net Increase (Decrease) in Cash and Cash Equivalents(11,012)
119,988

Cash and Cash Equivalents, Beginning of Year

4,230

(529)
4,759

Cash and Cash Equivalents, End of Year (Note 3)¥ 14,069¥ 4,230

Purchases of software

Net cash provided by (used in) investing activities

̶

Financing Activities:

See notes to consolidated financial statements.

24

Panasonic Information Systems Co., Ltd.

51,585$ 171,573

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. (formerly, Panasonic Electric Works
Information Systems Co., Ltd.) and consolidated subsidiaries
Year Ended March 31, 2012

1 Basis of Presentation of Consolidated Financial Statements
Panasonic Electric Works Information Systems Co., Ltd. (the “Company”) was incorporated on February 22, 1999 as a subsidiary of PanasonicElectric Works Co., Ltd. (the “Parent” (a)). The Company is 64% owned by the Parent at both March 31, 2012 and 2011. The principal businessof the Company is to provide integration service for information systems; maintenance of computer systems; design, development, sales, lease,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 conformity 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 2011 consolidated financial statements to conform to the classifications used in 2012.
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 ¥82 to $1, the approximate rate of exchange at March 31, 2012. 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.
(a) The parent was merged with Panasonic Corporation by an absorption-type merger in January 2012.

2 Summary of Significant Accounting Policies
a. Consolidation
The consolidated financial statements as of March 31, 2012 include the accounts of the Company and its 2 subsidiaries (2 subsidiaries in 2011)(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.
b. 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.
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.
e. Property and Equipment
Property and equipment are started at cost. The straight-line depreciation method is applied to all property and equipment for 2011 and 2012.
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 would be recognized if the carrying amount of an asset or asset group exceeds thesum of the undiscounted 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 thehigher of the discounted cash flows from the continued use and eventual disposition of the asset or the net selling price at disposition.
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

Annual Report 201225

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. (formerly, Panasonic Electric Works
Information Systems Co., Ltd.) and consolidated subsidiaries
Year Ended March 31, 2012and plan assets at the balance sheet date. Besides, the simplified method is used for computing retirement benefit obligation of one ofsubsidiaries.
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 increase ora decrease in 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 issued in June 1993. 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 should be capitalized to recognize 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 Corporate Auditors
Bonuses to directors and corporate auditors are accrued at the year-end 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, the 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 can 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
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.
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 basis net income per share computation was 10,655,703 shares and
10,656,828 shares for 2012 and 2011, respectively.
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 this26

Panasonic Information Systems Co., Ltd.

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. (formerly, Panasonic Electric Works
Information Systems Co., Ltd.) and consolidated subsidiaries
Year Ended March 31, 2012

standard and guidance are as follows: (1) Changes in Accounting Policies - When a new accounting policy is applied with revision of accounting
standards, the new policy is applied retrospectively unless the revised accounting standards include specific transitional provisions. When therevised accounting standards include specific transitional provisions, an entity shall comply with the specific transitional provisions. (2) Changes
in Presentations - 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 is accounted for prospectively if the change affects both the period of the change and future periods.
(4) Corrections of Prior-Period Errors - When an error in prior-period financial statements is discovered, those statements are restated. Thisaccounting standard and the guidance are applicable to accounting changes and corrections of prior-period errors which are made from the
beginning of the fiscal year that begins on or after April 1, 2011.
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 effective date of April 1, 2000 and theother related practical guidances, being 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, are 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 shall berecognized within equity (accumulated other comprehensive income), after adjusting for tax effects, and the deficit or surplus shall be 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 would not change how to recognize actuarial gains and losses and past service costs in profit or loss.
Those amounts would be recognized in profit or loss over a certain period no longer than the expected average remaining working lives ofthe employees. However, actuarial gains and losses and past service costs that arose in the current period and yet to be recognized in profit
or loss shall be included in other comprehensive income and actuarial gains and losses and past service costs that were recognized in othercomprehensive income in prior periods and then recognized in profit or loss in the current period shall be treated as reclassification adjustments.
This accounting standard and the guidance are effective for the end of annual periods beginning on or after April 1, 2013 with earlier
application being permitted from the beginning of annual periods beginning on or after April 1, 2013. However, no retrospective application ofthis accounting standard to consolidated financial statements in prior periods is required.
The Company is in the process of measuring the effects of applying the revised accounting standard for the year ending March 31, 2014.

3 Reconciliation to Cash and Cash Equivalents
The reconciliation of cash and deposits in the consolidated balance sheets to cash and cash equivalents in the consolidated statement of cash
flows at March 31, 2012 and 2011 were as follows:

Cash and deposits
Deposits paid with original maturities of within 3 months
Time deposits over 3 months
Cash and cash equivalents

Millions of Yen

Thousands of U.S.
Dollars

2012

2011

2012

¥ 176
13,993(100)¥14,069

172
4,158
(100)
¥ 4,230¥

2,146
170,647(1,220)$171,573$

Annual Report 201227

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. (formerly, Panasonic Electric Works
Information Systems Co., Ltd.) and consolidated subsidiaries
Year Ended March 31, 2012

4 Inventories
Inventories at March 31, 2012 and 2011 consisted of the following:

MerchandiseWork in process
Supplies
Total

Millions of Yen

Thousands of U.S.
Dollars

2012

2011

2012

¥ 65
86
1
¥152

¥ 68
134
2
¥ 204

$ 793
1,049
12
$1,854

Millions of Yen

Thousands of U.S.
Dollars

2012

2011

2012

¥279

341

$3,402

5 Investment Securities
Investment securities as of March 31, 2012 and 2011 consisted of the following:

Non-current:
Marketable equity securities

The costs and aggregate fair values of investment securities at March 31, 2012 and 2011 were as follows:
Millions of Yen

Unrealized
Gain

Unrealized
LossesFair Value

¥187

¥102

¥(10)

¥279

¥187

¥155

¥ (1)

¥341

Cost

March 31, 2012
Securities classified as:
Available-for-sale:
Equity securities
March 31, 2011
Securities classified as:
Available-for-sale:
Equity securities

Thousands of U.S. Dollars

Cost

Unrealized
Gain

Unrealized
LossesFair Value$2,280$1,244$(122)$3,402The information for available-for-sale securities which were sold during the year ended March 31, 2011 was as follows:
Millions of Yen

March 31, 2011
Available-for-sale:
Equity securities

Proceeds

Realized
Gains

Realized
Loss

¥417

¥285

¥3

6 Goodwill
Goodwill at March 31, 2012 and 2011 consisted of the following:

Goodwill on business acquisition
Consolidation goodwill
Total

Millions of Yen

Thousands of U.S.
Dollars

2012

2011

2012

¥ 29
0
¥ 29

¥ 44
1
¥ 45

$ 354
0
$ 354

Goodwill on business acquisition and consolidation goodwill are amortized on a straight-line basis over five years.

28

Panasonic Information Systems Co., Ltd.

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. (formerly, Panasonic Electric Works
Information Systems Co., Ltd.) and consolidated subsidiaries
Year Ended March 31, 2012

7 Deposits Received
Deposits received at March 31, 2012 and 2011 consisted of the following:

Welfare pension
Other
Total
Less current portionLong-term debt, less current portion

Millions of Yen

Thousands of U.S.
Dollars

2012

2011

2012

¥ 44
7
¥ 51
(7)
¥ 44

¥ 46
4
¥ 50
(4)
¥ 46

$ 537
85
$ 622
(85)
$ 537

Interest rates applicable to the welfare pension were 6.8% at March 31, 2012 and 2011.
Annual maturities of deposits received at March 31, 2012, were as follows:Year Ending March 31

2013
2014
2015
2016
2017
2018 and thereafter
Total

Millions of Yen

Thousands of
U.S. Dollars

¥ 7
2
3
3
3
33
¥51

$ 85
24
37
37
37
402
$622

8 Retirement Benefits
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 at March 31, 2012 and 2011 consisted of the following:

Projected benefit obligation (a)Fair value of plan assets
Unfunded benefit obligations
Unrecognized actuarial loss
Unrecognized prior service cost
Net asset
Prepaid pension cost
Liability for retirement benefits

Millions of Yen

Thousands of U.S.
Dollars

2012

2011

2012

¥ 4,375(3,371)
1,004(1,487)(354)¥ (837)(844)
7¥ 3,840(3,110)730(1,635)14¥ (891)(891)$ 53,554(41,110)
12,244(18,135(4,317)$(10,208)(10,293)85̶(a) For one of the consolidated subsidiaries, the simplified method is used for computing retirement benefit obligations.

Annual Report 201229

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. (formerly, Panasonic Electric Works
Information Systems Co., Ltd.) and consolidated subsidiaries
Year Ended March 31, 2012

The components of net periodic benefit costs for the years ended March 31, 2012 and 2011 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

Millions of Yen

Thousands of U.S.
Dollars

2012

2011

2012

¥ 239
102
(93)
9
147
¥ 404

¥ 216
89
(85)
(79)
127
¥ 268

$ 2,915
1,244(1,134)110
1,792$4,9272012

2011(a) Net periodic benefit cost of subsidiary using the simplified method is included.
Assumptions used for the years ended March 31, 2012 and 2011 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

2.5%
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 a Board of Corporate Auditors, 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 above criteria.
The Companies Act permits companies to distribute dividends-in-kind (non-cash 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.

30

Panasonic Information Systems Co., Ltd.

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. (formerly, Panasonic Electric Works
Information Systems Co., Ltd.) and consolidated subsidiaries
Year Ended March 31, 2012

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 40.4% for the years ended March 31, 2012 and 2011.
The tax effects of significant temporary differences, which resulted in deferred tax assets and liabilities at March 31, 2012 and 2011, are as
follows:

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

Thousands of U.S.
Dollars

2012

2011

2012

¥ 72
290
226
156
¥ 744

¥ 80
225
113
193
¥ 611

$

¥ 299
35
1
¥ 335
¥ 409

¥ 360
62

$ 3,646427
12$ 4,085$ 4,988

878
3,537
2,756
1,902
$ 9,073

¥ 422
¥ 189

Because the differences between the normal effective statutory tax rates and the actual effective tax rates for the years ended March 31, 2012
and 2011 are not material, the tax reconciliations are not disclosed.
On December 2, 2011, new tax reform laws were enacted in Japan, which changed the normal effective statutory tax rate from approximately
40.4% to 37.8% effective for the fiscal years beginning on or after April 1, 2012 through March 31, 2015, and to 35.4% afterwards. The effectof this change was to decrease deferred taxes by ¥7 million ($86 thousand) and to increase unrealized gain on available-for-sale securities by¥2 million ($24 thousand) in the consolidated balance sheet as of March 31, 2012, and to increase income taxes - deferred in the consolidated
statement of income and comprehensive income for the year then ended by ¥9 million ($110 thousand).

11 Research and Development Costs
Research and development costs included in cost of sales and selling, general and administrative expenses were ¥129 million ($1,573 thousand)and ¥76 million for the years ended March 31, 2012 and 2011, respectively.

12 Leases
The Group leases certain computer equipment, software and other assets.
Total lease payments under finance leases for the years ended March 31, 2012 and 2011, were ¥286 million ($3,488 thousand) and ¥612
million, respectively.
Obligations under finance leases and future minimum payments under noncancelable operating leases as of March 31, 2012, were as follows:
2012
Millions of Yen

Finance
LeasesDue within one year
Due after one year
Total

¥248
362
¥610

Operating
Leases

¥177
107
¥284

Thousands of U.S. Dollars

Finance
LeasesOperating
Leases$3,024
4,415$7,439$2,1591,304$3,463

Annual Report 201231

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. (formerly, Panasonic Electric Works
Information Systems Co., Ltd.) and consolidated subsidiaries
Year Ended March 31, 2012

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

2012
Tools, Furnitureand Fixtures

Acquisition cost
Accumulated depreciation
Net leased property

Software

¥ 1
(1)
¥ 0

¥32
(26)
¥ 6

2011
Tools, Furnitureand Fixtures

Total

¥33
(27)
¥ 6

Software

Total

¥ 2
(1)
¥ 1

¥492
(435)
¥ 57

¥494
(436)
¥ 58

Thousands of U.S. Dollars

2012
Tools, Furnitureand Fixtures

Acquisition cost
Accumulated depreciation
Net leased property

$390
(317)
$ 73

Software

$ 12
(12)
$ 0

Total

$402
(329)
$ 73

Obligations under finance leases:

Due within one year
Due after one year
Total

Millions of Yen

Thousands of U.S.
Dollars

2012

2011

2012

¥ 5
3
¥ 8

¥ 62
8
¥ 70

$ 61
37
$ 98

Millions of Yen

Thousands of U.S.
Dollars

2012

2011

2012

¥ 52
1
¥ 53
¥ 63

¥ 422
8
¥ 430
¥ 476

$ 634
12
$ 646
$ 768

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 in companies
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.

32

Panasonic Information Systems Co., Ltd.

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. (formerly, Panasonic Electric Works
Information Systems Co., Ltd.) and consolidated subsidiaries
Year Ended March 31, 2012

(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 oversee due dates and balances by customer in cooperation between the head office accounting department and each business division.
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.
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.
(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

March 31, 2012

Carrying
AmountFair 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¥

March 31, 2011

Carrying
AmountFair 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

¥

172
6,442
12,662341¥ 19,617¥ 1,970
1,102
1,061
561
¥ 4,694

¥

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

Unrealized Gain/
Loss

–
–
–
–
–
–
–
–
(6)
¥ (6)
Millions of Yen

172
6,442
12,662341¥ 19,617¥ 1,970
1,102
1,061
552
¥ 4,685

Unrealized Gain/
Loss

–
–
–
–
–
–
–
–
(9)
¥ (9)

Annual Report 201233

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. (formerly, Panasonic Electric Works
Information Systems Co., Ltd.) and consolidated subsidiaries
Year Ended March 31, 2012

Thousands of U.S.
Dollars

March 31, 2012

Carrying
AmountFair 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

$

2,146
83,768
170,720
3,402$ 260,036$ 22,524
18,963
12,3784,415$ 58,280$

Unrealized Gain/
Loss

2,146
83,768
170,720
3,402$ 260,036$ 22,524
18,963
12,3784,342$ 58,207

–
–
–
–
–
–
–
–
(73)
¥ (73)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.
Accounts Receivables and Accounts Payables
The carrying values of accounts receivables and accounts payables 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, 2012

Due in1 Year or Less

Due after
1 Year through5 Years

Due after
5 Years through10 Years

Due after 10 Years

176
6,869
13,999¥ 21,044

–
–
–
–

–
–
–
–

–
–
–
–

Cash and deposits
Accounts receivable - Trade
Deposits paid
Total

¥

Thousands of U.S.
Dollars

March 31, 2012

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

$

2,146
83,768
170,720$ 256,636

–
–
–
–

–
–
–
–

–
–
–
–

Please see Note 12 for obligations under finance lease.

34

Panasonic Information Systems Co., Ltd.

Notes to Consolidated Financial Statements

Panasonic Information Systems Co., Ltd. (formerly, Panasonic Electric Works
Information Systems Co., Ltd.) and consolidated subsidiaries
Year Ended March 31, 201214 Comprehensive Income
The components of other comprehensive income for the year ended March 31, 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

Millions of Yen

Thousands of U.S.
Dollars¥ (62)$ (756)(62)
28¥ (34)(756)
341$ (415)The corresponding information for the year ended March 31, 2011 was not required under the accounting standard for presentation ofcomprehensive income as an exemption for the first year of adopting that standard and not disclosed herein.

15 Related Party Transactions
Balances at March 31, 2012 and 2011 and transactions for the years ended March 31, 2012 and 2011 with the Parent, its consolidated
subsidiaries, and its associated companies were as follows:
Millions of Yen

Thousands of U.S.
Dollars

2012

2011

2012

Sales
Purchases
Lease and rental expense
Interest income¥ 22,779
202
431
57

¥ 21,223
120
545
65

$ 278,037
2,463
5,256
695

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

¥

4,435
13,6988¥ 3,894
12,44424$ 54,085
167,049
98

26
254

8
138

317
3,098

16 Subsequent EventAppropriation of Retained Earnings
The following appropriation of retained earnings at March 31, 2012 was resolved at the Board of Directors meeting held on May 17, 2012:

Year-end cash dividends, ¥32.5 ($0.40) per share

Millions of Yen

Thousands of U.S.
Dollars¥ 346$ 4,220

Annual Report 201235

Independent Auditors’ Report

36

Panasonic Information Systems Co., Ltd.

Corporate Data

As of July 1, 2012

Headquarters

Panasonic Information Systems Co., Ltd.
(formerly, Panasonic Electric Works 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 BusinessInformation services

Number of Employees

688 (consolidated) *As of March 31, 2012

Company Name

Consolidated Subsidiaries• Panasonic Net Solutions Co., Ltd.
		（formerly, Panasonic Electric Works 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 security systems

Stock Information

As of March 31, 2012

Breakdown of Shareholders
by Number of Shares Held

Total Shares Authorized

40,000,000 Shares

Total Shares Issued

10,656,000 Shares

Number of Shareholders

4,864

Stock Exchange Listing

Tokyo Stock Exchange, First Section

Securities Code4283

Stock Trading Unit

100 Shares(% / Number of shares held)

1 〜 999 9.00%

959,274
1,000 〜 4,999 8.54%

909,5165,000 〜 9,999 2.29%

Regular Shareholders’ Meeting June of each year

243,910

Sumitomo Mitsui Trust Bank, Limited

Transfer Agent

10,000 〜 99,999 8.21%

		Major Shareholders

875,200
Number of
Shares(thousands)

Ownership
Ratio (%)

6,787

63.69

500

4.69

Employees Stock Ownership Association

249

2.33

Japan Trustee Services Bank, Ltd. (Trust Account)

130

1.22

79,632 (27 persons)

The Master Trust Bank of Japan, Ltd. (Trust Account)

57

0.53

BNY GCM CLIENT ACCOUNT JPRD AC ISG (FE-AC)

52

0.49

Other Corporations 66.68%
7,105,400 (60 persons)

IBM Japan, Ltd.

36

0.33

FUJITSU LIMITED

36

0.33

Oki Electric Industry Co., Ltd

36

0.33

GOLDMAN SACHS INTERNATIONAL

35

0.33

Shareholder

Panasonic Corporation
BBH FOR FIDELITY LOW-PRICED STOCK FUND

(PRINCIPAL ALL SECTOR SUBPORTFO

More than100,000 71.96%

7,668,100
Breakdown of Shareholders
by Investor Type(% / Number of shares held)

Financial Institutions 4.24%
451,800 (25 persons)Financial Instruments Firms 0.75%

Foreign Corporations, Other 6.97%
742,903 (59 persons)Individuals, Others 21.36%
2,276,265 (4,693 persons)Note: In addition to the above, there are 320 shares of treasury stock.

Annual Report 201237

19-19, Chayamachi, Kita-ku, Osaka 530-0013, Japan
Telephone: +81-6-6906-2801 Facsimile: +81-6-6377-0833
URL: http://is-c.panasonic.co.jp/english/
Printed in Japan