May 13, 2010

Summary of Consolidated Financial Results for the Year Ended March 31, 2010
Company name:

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

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

3817
Toru Kashima
Makoto Kitai, General Manager, Finance Department, Administrative Headquarters(03)-5979-2666
Date of ordinary general meeting of shareholders:
Scheduled commencement of dividend payment:
Scheduled date of submission of financial reports:

June 25, 2010
June 11, 2010
June 25, 2010

1. Consolidated Financial Results for Fiscal 2010 (from April 1, 2009 to March 31, 2010)(1) Consolidated Operating Results(All amounts rounded down, % change YoY)Net Sales

Fiscal 2010
Fiscal 2009

Operating Income

Ordinary Profit

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

34,053
41,777(18.5)
(7.3)

1,997
3,820

(47.7)
(6.9)

2,059
3,894

(47.1)
(6.9)

1,238
2,041

(39.3)(8.2)

Net Income
per Share

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

Yen
Fiscal 2010
89.48
Fiscal 2009147.52
Reference: Gain (loss) on equity method investments:
Fiscal 2010: —Fiscal 2009: —

Yen
—
—

Ratio of Ordinary
Profit to Total Assets

8.5
15.0

Ordinary Profit
Ratio

%

%

7.7
14.3

5.9
9.1

(2) Consolidated Financial Position
Millions of yen%

Shareholders’ Equity
per Share
Yen

15,12914,16455.4
53.0

1,089.15
1,014.91

Cash Flows fromOperating Activities

Cash Flows from
Investing Activities

Cash Flows from
Financing Activities

Cash and Cash Equivalents
at the End of Period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

2,025
2,194

(2,714)
(852)

(737)
(772)

10,324
11,753

Total Assets

Net Assets

Millions of yen
Fiscal 2010
27,204
Fiscal 2009
26,519Reference: Shareholders’ equity
Fiscal 2010: ¥15,073 million
Fiscal 2009: ¥14,046 million

Shareholders’ Equity Ratio(3) Consolidated Cash Flows

Fiscal 2010
Fiscal 2009

2. Dividends
Dividend per Share
Record dateFiscal 2009
Fiscal 2010
Fiscal 2011 (forecast)End of

End of

End ofFirst

SecondThird

Quarter

Quarter

QuarterYear-end

For theyear

Total
Dividends(for the year)

Dividend
Propensity(consolidated)

Net Assets to
Dividend
Ratio(consolidated)

Yen

Yen

Yen

Yen

Yen

Millions of yen

%

%

0.00
0.00
0.00

0.00
0.00
0.00

0.00
0.00
0.00

40.00
40.00
40.00

40.00
40.00
40.00

553
553
―

27.1
44.7
36.9

4.1
3.8
―

1

3. Consolidated Earnings Forecast for Fiscal 2011 (from April 1, 2010 to March 31, 2011)

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

Operating Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

16,30035,500

(2.1)
(4.2)

850
2,600

(19.2)(30.1)

850
2,600(19.9)(26.2)

490
1,500(38.0)(21.1)

35.41
108.38Interim Period
Full Year

4. Others(1) Changes to significant subsidiaries during the term (changes in specified subsidiaries due to change in scope of
consolidation):No(2) Changes in accounting principles, methods or reporting procedures
1. Changes due to change in accounting standards:
Yes
2. Changes other than 1. (above):No(3) Number of outstanding shares (common shares)
1. Shares issued at the end of term (including own shares)
Fiscal 2010: 15,240,000 sharesFiscal 2009: 15,240,000 shares
2. Own shares at end of term
Fiscal 2010: 1,400,227 sharesFiscal 2009: 1,400,198 shares[Reference] Summary of non-consolidated financial results

1. Non-Consolidated Financial Results for Fiscal 2010 (from April 1, 2009 to March 31, 2010)(1) Non-Consolidated Operating Results
Net Sales

Fiscal 2010
Fiscal 2009

Fiscal 2010
Fiscal 2009(% change YoY)
Operating Income

Ordinary Profit

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

1,153
1,626

(29.1)
26.8

790
1,046

(24.4)
55.6

787
1,034

(23.9)
57.2

859
1,033

(16.8)
62.6

Net Income
per Share

Net Income per Shareafter Dilution

Yen

Yen

57.17
68.57

―
―

(2) Non-Consolidated Financial Position
Net Income

Net Assets

Millions of yen

Millions of yen%

Shareholders’ Equity
per Share
Yen

98.0
98.5

635.45603.65

Shareholders’ Equity Ratio

9,740
9,570
9,207
9,156
Reference: Shareholders’ equity:
Fiscal 2010: ¥9,550 million
Fiscal 2009: ¥9,072 million
Fiscal 2010
Fiscal 2009

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

2

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

1. Business Results(1) Analysis of Business Results(Business results for the fiscal year)
During the fiscal year ended March 31, 2010, although an improvement could be seen in the Japanese economy due
to a pickup in personal consumption and cessation of the decline in capital investment, difficult economic conditions
persisted owing to a severe employment situation and deflation. In the information services industry, the harshenvironment continued along with ongoing curbs in customers’ IT investments that reflected a large decrease incorporate earnings.
Under these circumstances, the SRA Holdings Group worked to establish a structure for stable orders by creating
new sales processes. Moreover, with the aim of securing gross profit, we strived to enhance efficiency by utilizing
tools and methods to improve development efficiency, raise utilization rates by ensuring an appropriate allocation ofdevelopment personnel, and restrain outsourcing expenses by promoting internal development and offshoredevelopment. To achieve an improvement in profits, we also continued to restrain selling, general and administrative(SG&A) expenses.
Additionally, as part of initiatives to “expand overseas business earnings opportunities,” a priority issue under the
medium-term management plan, in August 2009 SRA OSS, Inc., a subsidiary, formed a business and capital alliancewith Proxim Wireless Corporation, which has a proven track record in the wireless communication connection
equipment market. This alliance was formed to expand and upgrade business by adding the building of networks for
wireless communications to system integration services, centered on systems development. Moreover, as a move forpromoting our business in China, in December 2009 we acquired additional shares in SJI Inc., with which we alreadyhad a business and capital alliance, to further strengthen our relationship with that company.
As a result of these measures, our consolidated business results for the fiscal year were virtually in line with thefigures of our revised results forecast announced in February 2010. Nevertheless, as detailed below, revenues andprofits were below the amounts recorded in the previous fiscal year.
Consolidated net sales amounted to ¥34,053 million, a decrease of 18.5% from the previous fiscal year.
Advanced Integration Technology (AIT), Inc., a principal subsidiary, continued to post favorable sales of devices
to the distribution, medical and telecommunications industries. Regarding the Systems Development business ofSoftware Research Associates (SRA), Inc., a core company, despite a halt in the decline in orders in the third quarterand subsequent increase in sales to electric power and gas industries and schools, orders from the securities andmanufacturing industries fell sharply. Software Science, Inc. recorded a decline in sales due to the shift by customers
toward carrying out development projects internally.
At the profit level, gross profit declined due to lower net sales; a greater-than-anticipated drop in the unit prices oforders from the securities industry, which is a principal customer; and the continuation of a provision for loss on
construction contracts that we recorded in the second quarter. Despite efforts to restrain selling, general andadministrative (SG&A) expenses, operating income declined 47.7% from the previous fiscal year to ¥1,997 million
and ordinary profit declined 47.1% to ¥2,059 million. SRA Holdings posted a gain on reversal of subscription rights
to shares, and thus net income amounted to ¥1,238 million, a decrease of 39.3%.

3

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

Trends in Consolidated Business Results(¥ million)
FY2010Net sales

34,14536,76545,05841,777

Most recent forecast
figures (announced
February 10)
34,000Operating income

1,719

2,848

4,102

3,820

2,100

1,997

Ordinary profit

1,762

2,923

4,181

3,894

2,100

2,059

933

2,015

2,224

2,041

1,150

1,238

FY2006

Net income

FY2007

FY2008FY2009Actual
34,053

Note: The figures prior to FY2006 are consolidated figures for SRA.
A summary of business results for the fiscal year by business segment is shown below.
Systems Development
The Systems Development business recorded a sharp decline in orders from the securities and manufacturingindustries. As a result, net sales for this segment in the fiscal year amounted to ¥17,831 million, a decrease of 21.9%
from the previous fiscal year.
System Operations and Infrastructure Development
In addition to a slight decline in school-related orders, System Operations and Infrastructure Development recorded a
sharp decrease in orders from the corporate sector. Consequently, net sales in this segment amounted to ¥4,130
million, a decline of 18.7% from the previous fiscal year.
Product Sales
In Product Sales, although AIT recorded favorable mid-sized orders for devices, mainly servers, orders declined fromthe previous fiscal year when large orders from financial institutions were posted. Meanwhile, SRA recorded a
decline in sales of packages. As a result, net sales for the fiscal year in this segment amounted to ¥12,091 million, adecline of 12.8% from the previous fiscal year.
(Outlook for the Next Fiscal Year)
Despite the persistent severity of the employment environment in the near term, the Japanese economy is expected tosustain a recovery on the back of improved corporate earnings. Nonetheless, there are a number of reasons forconcern, such as deflation, and the outlook is uncertain.
In the information services industry, despite the continued recovery trend in corporate earnings, customers are still
maintaining a cautious stance toward IT investments, and the harsh business environment is expected to continue inthe future.
Under these conditions, the SRA Holdings Group will establish a structure for securing stable orders, raise thegross profit margin, as well as curb costs and upgrade and expand its overseas business as a springboard forsignificant growth and development in the future.
For the fiscal year ending March 31, 2011, we are forecasting consolidated net sales of ¥35,500 million,
consolidated operating income of ¥2,600 million, consolidated ordinary profit of ¥2,600 million and consolidated net
income of ¥1,500 million.

4

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

(2) Analysis of Financial Position
Cash and cash equivalents on a consolidated basis at the end of the fiscal year decreased ¥1,428 million to ¥10,324
million compared with at the previous fiscal year-end.
The status of cash flows and factors underlying changes in cash flows for the fiscal year are shown below.
Cash Flows from Operating Activities
Net cash provided by operating activities amounted to ¥2,025 million. This consisted mainly of such cash inflows asincome before income taxes and minority interests of ¥2,115 million and a decrease in notes and accounts
receivable—trade of ¥1,328 million. Cash outflows were primarily income taxes paid of ¥1,100 million and anincrease in inventories of ¥394 million.
Cash Flows from Investing Activities
Net cash used in investing activities amounted to ¥2,714 million. This was due mainly to the outflow of ¥2,243
million for purchases of investment securities and ¥456 million for purchases of property, plant and equipment andpurchases of intangible assets.
Cash Flows from Financing Activities
Net cash used in financing activities amounted to ¥737 million. This was due mainly to such cash outflows as ¥553
million in cash dividends paid and a net decrease in short-term loans payable amounting to ¥174 million.
Trends in Cash Flows Indicators
Shareholders’ equity ratio (%)
Shareholders’ equity ratio at
market value (%)
Debt redemption years to cash
flow (years)
Interest coverage ratio (times)

FY2008FY2009FY2010

47.0

53.0

55.4

93.9

37.3

43.0

1.4

1.2

1.2

38.2

41.4

52.5

Notes:
Shareholders’ equity ratio: Shareholders’ equity/total assets
Shareholders’ equity ratio at market value: Market capitalization/total assets
Debt redemption years to cash flow: Interest-bearing debt/operating cash flow
Interest coverage ratio: Operating cash flow/interest expense
1. All indicators were calculated using consolidated financial figures.
2. Market capitalization is calculated using the total number of shares outstanding at the end of the fiscal period
excluding treasury shares.
3. Cash flows from operating activities is used for cash flow.
4. Interest-bearing debt includes all debt that pays interest as listed on the Consolidated Balance Sheets.
(3) Basic Policy on Profit Allocation and Dividends for the Fiscal Year under Review and the Next Fiscal Year
The Company’s basic policy regarding the allocation of profits is to enhance the redistribution of profits toshareholders in accordance with the state of its earnings, while also retaining earnings for R&D and the establishmentof a development environment for responding to the rapid and revolutionary technological advances within the5

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010industry as well as to prepare for future business development.
The Company aims to allocate profits with a consolidated dividend payout ratio of 20%. Moreover, at theOrdinary General Meeting of Shareholders held on September 20, 2006, the Articles of Incorporation were changed
to allow for a flexible distribution of retained earnings as dividends based on resolutions by the Board of Directors.
Regarding dividends for the fiscal year ended March 31, 2010, in accordance with our dividend policy of striving
to realize a consolidated payout ratio of 20% while considering various factors, the Company will pay regular cash
dividends per share of ¥40.00.
Regarding dividends for the fiscal year ending March 31, 2011, the Company plans to maintain ordinary cash
dividends per share of ¥40.00 for the reasons detailed below. In the event that these dividends are paid, theconsolidated payout ratio will be 36.9%.
1. One of the Company’s management targets is to “achieve and maintain double-digit consolidated ROE” and we
aim to carry out management that emphasizes the efficient use of shareholders’ equity.
2. Therefore, we are implementing a policy of making proactive investments (such as investments for M&A) in our
main businesses in working to ensure the Group’s growth.
3. At the same time, we also continually consider “redistributing profits to shareholders” from the perspective ofefficient use of shareholders’ equity.
4. Taking into consideration our ample liquidity in hand at present, as part of efforts to contribute to the efficientutilization of assets and capital, we have decided that “redistributing profits to shareholders” is a high priority andin the fiscal year ending March 31, 2010, we thus plan to maintain cash dividends per share of ¥40.00.
We also regard the acquisition of treasury shares as an effective means of redistributing profits to shareholders.
Accordingly, we make such acquisitions appropriately while considering such factors as our stock price trends andfinancial condition.
(4) Business and Other Risks
The following principal risks could have an impact on the business results and financial condition of the Company as
the Group’s controlling company.
“Forward-looking” statements contained in this report represent judgments by the Group based on information
currently available to management as of the end of the fiscal period.
[1] Risk of fluctuations in business results of Group companies
An abrupt fluctuation in business results of Group companies due to various factors could have an adverse impact on
the Company’s business results.
[2] Maintaining confidentiality of customer information
In addition to being aware that it is an information processing company with numerous opportunities for handlingpersonal information, the SRA Holdings Group also sufficiently recognizes the critical nature of protecting personal
information, and thus, has established an internal monitoring structure. Concurrently, the SRA Holdings Group
provides education for its Group employees and business partners and makes efforts to protect personal information.
However, in the event of the unexpected leakage of information, besides losing the trust of business partners, the SRA
6SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

Holdings Group could become liable for payment of compensatory damages, which could have an effect on theGroup’s business results.
In addition to the above, the Company comprehensively incurs business and other risks of SRA, a main
subsidiary.
<SRA>* The below-mentioned “SRA Holdings Group” consists of Software Research Associates (SRA), Inc., and its
subsidiaries. The following principal risks could have an impact on the business results and financial condition of the
SRA Holdings Group.
[1] Securing business partners during times of expansion of production volume
In the Systems Development and the System Operations and Infrastructure Development businesses, besides its own
in-house engineers, the SRA Holdings Group utilizes business partners for the planned augmentation of its staff ofin-house engineers and expansion of business, as well as to augment those areas where it does not possess
technologies and to respond flexibly to changes in production volumes during peak production.
The SRA Holdings Group also utilizes business partners as one means of reducing production costs.
Nonetheless, the inability to sufficiently secure business partners possessing requisite skills could have an impact
on the Group’s business results.
The utilization of business partners accounted for 46.0% of manufacturing costs as of the end of the fiscal period.
[2] Project profitability in Systems Development
In the core Systems Development business, the SRA Holdings Group concludes bulk subcontracting contracts
whereby it handles the entire system development and is responsible to its customers for completion. There are also
projects during which more than one year elapses from the time the order is obtained to system completion andhandover. Therefore, even for projects for which a certain amount of income is expected at the time the order isreceived, there are instances when profitability worsens because of such factors as customer requests for specification
changes after commencing development activities or a work process that exceeds the initial estimate. Moreover, theincurrence of additional expenses such as those related to defect guarantees after the confirmation of sales could
ultimately result in an unprofitable project.
To prevent the occurrence of unprofitable projects, the Group reviews risk factors at the time an order is received
and works to improve the precision of its estimates while strengthening its project management structure in an
organized manner. Nevertheless, any project incurring a large loss could have an effect on the Group’s businessresults.
[3] Maintaining confidentiality of customer information
Along with being aware that it is an information processing company with numerous opportunities for handlingpersonal information, the Group also sufficiently recognizes the critical nature of personal information, and thus, hasestablished an internal monitoring structure. Concurrently, as a company that has acquired Privacy Mark certification,
the SRA Holdings Group provides education for its Group employees and outsourced staff and makes efforts toprotect personal information. However, in the event of the unexpected leakage of information, besides losing the trustof business partners, the SRA Holdings Group could become liable for payment of compensatory damages, which
could have an effect on the Group’s business results.
7

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

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

Consolidated ROE

FY2007 (actual)

8.0%

18.8%

FY2008 (actual)

9.3%

18.0%

FY2009 (actual)

9.3%

15.0%

FY2010 (actual)

6.0%

8.5%

FY2011 target

7.3% (plan)

10.0% (plan)(3) Medium- and Long-term Management Strategy
The Group is implementing its three-year management plan, in which fiscal 2010 was the second year.
Under this plan, we aim to establish a position in the industry as an independent company that provides truly
optimal choices from a neutral standpoint without bias toward any specific vendors and manufacturers and tostrengthen our business strategies and business structures to achieve continual development. At the same time, wewill lay the cornerstone for future growth.
1. Establish a position as an independent companyz Raise the constitution of management for the purpose of strengthening our corporate competitiveness (steadilyraise important management indicators)
2. Strengthen our business strategies and business structures to achieve continual development[1] Strengthen business strategies by rebuilding business segmentszSystems Development business: Shift weighting toward promising markets (financial, embedded systems,
8

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

education, and others)zSystem Operations and Infrastructure Development business: Shift weighting toward such high-profit businesses
as building server systemsz

Product Sales business: Undertake an exhaustive review of product and sales structures with the aim of
expanding markets and achieving a large improvement in profit ratios (strengthen the solutions business andproduct business as well as bolster sales structures)z

Promote the lifecycle businessz

Rebuild the production structure (employees, offshore, and domestic business partners) and strengthen the
production management system[2] Strengthen our business structure by realizing Group synergieszStrategically carry out business in the embedded systems, education, product sales, and electric power fields aswell as in China through “virtual” organizations

3. Lay the cornerstone for advancing the SRA Holdings Group’s business capabilities over the medium- andlong-term[1] Strengthen our business portfolio through initiatives focused on the “product business”[2] Realize SRA’s strengths by “establishing business models for leading-edge technologies”[3] Expand overseas business earnings opportunities by upgrading and expanding business in Europe and the UnitedStates and building a foundation for growth in Asia
(4) Issues to Be Addressed by the Company
The SRA Holdings Group will execute the following tasks.
1. Securing stable order flow.
(1) Refine business processes.
z

Refine a process for creating opportunities (projects) and ensuring that this can reliably lead to the securing of
new orders.

(2) Refine a solid customer base and strengthen order-generating activities for creating new opportunities.
z

Expand existing customer base and extend business to other divisions and Group companies.

z

Promote lifecycle sales.

z

Expand sales in the securities and manufacturing (embedded) industries and disperse risk by increasing Group
presences in other markets (electric power, education, and rail transport).

z

Exploit synergies by sharing order acquisition strategies.

2. Increasing gross profit margins and curbing costs.
(1) Increasing gross profit margin by strengthening cost management.
z

Boost production efficiency (share project management environment, unify development frameworks,
implement company-wide use of source code search tools).

z

Promote offshore development (India and China).
9

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

(2) Continue to control SG&A expenses.
(3) Promote the high-profit “product business” (including meeting the demand for migration services).
Note: Migration refers to work for the conversion of programs and data accompanying system migration. In the caseof transferring an application to a different OS system, it is necessary to transfer programs and data and modify data.
These are also types of migration.
3. Expand and enhance overseas operation (Europe, America, China, Asia) as a foundation for dramatic growth anddevelopment.
(1) Carry out business development in the China market through collaboration with SJI and DCH.
Note: DCH is a core company of the Lenovo Group and is China’s largest IT products wholesaler as well as a leading
IT service provider in principal industries.
(2) Cultivate SI and wireless communication business in Europe, America and growth markets (BRICs) based on
business alliances with SRA OSS, Inc. and Proxim.
(5) Other Important Management Matters
None

10

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

3. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of Yen)
FY2009FY2010(as of March 31, 2009)(as of March 31, 2010)ASSETS
Current assets:
Cash and deposits

10,335

8,957

Notes and accounts receivable—trade

7,613

6,275

Short-term investment securities

1,503

1,504

Merchandise and finished goods

558

385

Work in process

571

1,140

Deferred tax assets

461

467

Other

591

610

Allowance for doubtful accounts

(37)

(4)

21,59919,337

Buildings

254

257

Accumulated depreciation

(157)

(173)

Buildings, net

97

83

Machinery, equipment and vehicles

717

697

Accumulated depreciation

(646)

(641)

Machinery, equipment and vehicles, net

71

56

Land

0

0

Other

100

101

Accumulated depreciation

(66)

(69)

Other, net

33

31

Total property, plant and equipment

202

172

Other

429

701

Total intangible assets

429

701

Investment securities

1,314

4,069

Deferred tax assets

1,677

1,586

Guarantee deposits

531

529

Other

882

949

Allowance for doubtful accounts

(10)

(48)

Allowance for investment loss

(107)

(93)

Total investments and other assets

4,287

6,993

Total current assets
Noncurrent assets:
Property, plant and equipment

Intangible assets

Investments and other assets

11

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

Total noncurrent assets
Total assets

12

4,920

7,867

26,51927,204

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

(Millions of Yen)
FY2009FY2010(as of March 31, 2009)(as of March 31, 2010)

LIABILITIESCurrent liabilities:
Accounts payable—trade

2,702

2,818

Short-term loans payable

2,358

2,184

Current portion of long-term loans payable

10－

Accrued expenses

658

570

Income taxes payable

743

522

Accrued consumption taxes

414

243

Provision for bonuses

568

569

Provision for directors’ bonuses

00Provision for loss on construction contracts

－

148

Other

542

518

7,999

7,576

Bonds payable

300

300

Deferred tax liabilities

－

135

3,620

3,632

Provision for directors’ retirement benefits

422

422

Negative goodwill

13

8

4,356

4,498

12,355

12,075

Capital stock

1,000

1,000

Capital surplus

4,483

4,483

Retained earnings

9,518

10,202

Treasury stock

(894)

(894)

Total shareholders’ equity

14,107

14,79260

414

Foreign currency translation adjustments

(121)

(133)

Total valuation and translation adjustments

(61)

281

Subscription rights to shares

83

19

Minority interests

34

36

Total net assets

14,164

15,129Total liabilities and net assets

26,51927,204

Total current liabilities
Noncurrent liabilities:

Provision for retirement benefits

Total noncurrent liabilities
Total liabilities
NET ASSETS
Shareholders’ equity

Valuation and translation adjustments
Valuation difference on available-for-sales securities

13

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

(2) Consolidated Statements of Income(Millions of Yen)
FY2009FY2010(April 1, 2008-(April 1, 2009-

March 31, 2009)

March 31, 2010)

Net sales

41,777

34,053

Cost of sales

33,43028,341Gross profit

8,346

5,711

Selling, general and administrative expenses

4,525

3,713

Operating income

3,820

1,997

Interest received

34

30

Dividends received

15

20

Technical guidance fee

90

Sales incentives

48

12

Dividends income of insurance－

14

Gain on sales of securities

5

－

Other

40

44

Total non-operating income

153

122

Interest expenses

52

39

Transfer agent processing fee

15

10

Other

11

10

Total non-operating expenses

79

61

3,894

2,059

Gain on sales of noncurrent assets－

0Gain on reversal of subscription rights to shares－

73

Reversal of provision for directors’ retirement benefits－

18

Total extraordinary income－

91

Loss on retirement of noncurrent assets

1

1

Provision of allowance for investment loss－

22

Loss on valuation of investment securities

70

8

Loss on valuation of stocks of subsidiaries and affiliates

10－

Loss on valuation of memberships

27

－

Other

－

3

Total extraordinary loss

110

35

Non-operating income

Non-operating expenses

Ordinary profit
Extraordinary income

Extraordinary loss

14

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

Income before income taxes and minority interests

3,784

2,115

Income taxes-current

1,810

879

Income taxes-deferred

(81)

(4)

Total income taxes

1,729

875

13

1

2,041

1,238

Minority interests in income
Net income

15

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

(3) Consolidated Statements of Changes in Net Assets(Millions of Yen)
FY2009FY2010(April 1, 2008-(April 1, 2009-

March 31, 2009)

March 31, 2010)

Shareholders’ equity
Capital stock
Balance at end of previous period

1,000

1,000

Total change during the period－－

Balance at end of current period

1,000

1,000

4,519

4,483

(35)

－

Total change of items during the period

(35)

－

Balance at the end of period

4,483

4,483

8,029

9,518

Dividends from surplus

(553)

(553)

Net income

2,041

1,238

Total change of items during the period

1,488

684

Balance at the end of period

9,518

10,202

(894)

(894)

Purchase of treasury stock－(0)

Total change of items during the period

－

(0)

(894)

(894)

12,654

14,107

Dividends from surplus

(553)

(553)

Net income

2,041

1,238

Decrease due to purchases of treasury stock from

(35)

－

Total change of items during the period

1,452

684

Balance at the end of period

14,107

14,792

Changes of items during the period

Capital surplus
Balance at end of previous period
Changes of items during the period
Decrease due to purchase of treasury stock fromconsolidated subsidiaries

Retained earnings
Balance at the end of previous period
Changes of items during the period

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

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

consolidated subsidiary

16

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

Valuation and translation adjustments
Valuation difference on available-for-sale securities
Balance at the end of previous period

480

60

Net change of items other than shareholders’ equity

(420)

354

Total change of items during the period

(420)

354

60

414

15

(121)

Net change of items other than shareholders’ equity

(137)

(11)

Total change of items during the period

(137)

(11)

Balance at the end of current period

(121)

(133)

495

(61)

Net change of items other than shareholders’ equity

(557)

342

Total change of items during the period

(557)

342

Balance at the end of current period

(61)

281

52

83

Net change of items other than shareholders’ equity

31

(64)

Total change of items during the period

31

(64)

Balance at the end of current period

83

19

21

34

Net change of items other than shareholders’ equity

13

1

Total change of items during the period

131Balance at the end of current period

34

36

Changes of items during the period

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

Total valuation and translation adjustments
Balance at end of previous period
Changes of items during the period

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

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

17

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

Total net assets
Balance at end of previous period

13,224

14,164

Dividends from surplus

(553)

(553)

Net income

2,041

1,238

Purchase of treasury stock－(0)

Decrease due to purchase of treasury shares from

(35)

－

Net change of items other than shareholders’ equity

(512)

280

Total change of items during the period

939

965

14,164

15,129Changes of items during the period

consolidated subsidiary

Balance at end of current period

18

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

(4) Consolidated Statements of Cash Flows(Millions of Yen)
FY2009FY2010(April 1, 2008-(April 1, 2009-

March 31, 2009)

March 31, 2010)

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

3,784

2,115

Depreciation and amortization

258

238

Loss on valuation of memberships

27

0

Increase (decrease) in provision for retirement benefits

201

6

Increase (decrease) in provision for directors’ retirement benefits

21

0Increase (decrease) in provision for bonuses

(84)

0

Increase (decrease) in provision for directors’ bonuses

(73)

(0)

Increase (decrease) in allowance for doubtful accounts

14

5

Increase (decrease) in allowance for investment loss

－

(13)

Interest and dividend income

(49)

(51)

Interest expense

52

39

Loss (gain) on valuation of investment securities

81

8

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

1

1

1,245

1,328

Decrease (increase) in inventories

609

(394)

Increase (decrease) in notes and accounts payable—trade

(740)

121

Increase (decrease) in other liabilities

(552)

14

Increase (decrease) in accrued consumption taxes

21

(170)

Other, net

96

(129)

Subtotal

4,915

3,121

Interest and dividends income received

49

43

Interest expenses paid

(53)

(38)

Income taxes paid

(2,718)(1,100)Net cash provided by operating activities

2,194

2,025

(57)

(33)

0

2

Purchases of intangible assets

(174)

(422)

Purchases of investment securities(588)(2,243)

0

24

Payments of loans receivable

(48)

(527)

Collection of loans receivable

47

568

Payments into time deposits

(105)

(70)

Proceeds from withdrawal of time deposits

105

20

Payment for guarantee deposited

(10)

(35)

Decrease (increase) in notes and accounts receivable—trade

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

Proceeds from sales of investment securities

19

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

Proceeds from collection of guarantee deposited3

36

Other, net

(23)

(34)

Net cash used in investing activities(852)(2,714)

Net increase (decrease) in short-term loans payable

(196)

(174)

Repayments of long-term loans payable

(22)

(10)

Proceeds from issuance of bonds

300－

Redemption of bonds

(300)

－

－

(0)

Cash dividends paid

(553)

(553)

Net cash provided used in financing activities

(772)

(737)

Effect of exchange rate changes on cash and cash equivalents

(82)

(2)

Net increase (decrease) in cash and cash equivalents

487(1,428)Cash and cash equivalents at beginning of period

11,265

11,753

Cash and cash equivalents at the end of period

11,753

10,324

Net cash provided by (used in) financing activities:

Purchase of treasury stock

20

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

Segment Informationa. Segment Information by Type of Business
Fiscal 2009 (from April 1, 2008 to March 31, 2009)(Millions of yen)
Systems
Development

SystemOperations
andInfrastructure
Development

22,837

5,078

13,861

77

323

Total sales

22,915

Operatingexpenses

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

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

Eliminations/
Corporate

Consolidated

41,777－

41,777

497

897

(897)

－

5,401

14,35842,675(897)

41,777

18,988

4,122

13,24736,358

1,597

37,956

3,926

1,279

1,110

6,316

(2,495)

3,820

8,077

1,829

4,719

14,626

11,893

26,519

164

28

64

256

1

258

129

40

52

222

0

222

Product
Sales

Total

Change in the Names of Business Segments

Previously, the Company expressed its business segments as “System Development,” “Network & Systems Services,” and“Consulting & Other Services.” From fiscal 2009, the Company changed the names of these business segments to the“Systems Development,” “System Operations and Infrastructure Development,” and “Product Sales” segments,
respectively. This change had no impact on business segment information.

21

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

2. Principal contents of business in each segment.
Business segment

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

System integration covering system planning, development, andintroduction of open systemsz

Solutions business offering business tools that utilize various products
and toolszOpen source business that offers technical support for systems
through open source software
Operation management of computer systems and network systems

Systems DevelopmentzzOverall operation that includes data management and facilities
managementz

Building of network systemszz

Outsourcing services
Sales of packaged software that includes licensingz

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

System Operations andInfrastructure Development

Product
Sales

3. Unallocatable operating expenses in Eliminations/Corporate amounted to ¥2,495 million for the fiscal year. These
consisted mainly of R&D expenses and expenses related to the Group’s management divisions.
4. Total Company assets in Eliminations/Corporate amounted to ¥12,075 million for the fiscal year. These consisted mainlyof the Group’s surplus operating assets (cash, deposits, and marketable securities), long-term invested assets (investment
securities), and deferred tax assets.
5. Depreciation expenses and capital-related expenditures included depreciation and additions to long-term prepaid
expenses, respectively.

22

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

Fiscal 2010 (from April 1, 2009 to March 31, 2010)(Millions of yen)
Systems
Development

SystemOperations
andInfrastructure
Development

17,831

4,130

12,09156

234

Total sales

17,887

Operatingexpenses

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

Operating income
II Assets,
depreciation
expenses andcapital-related
expenditures
AssetsDepreciation
expensesCapital-related
expenditures

Product
Sales

Eliminations/
Corporate

Consolidated

34,053－34,053

476

767

(767)

－

4,364

12,567

34,820(767)

34,053

15,871

3,394

11,76431,0301,024

32,055

2,016

970

803

3,789

(1,791)

1,997

8,345

1,941

4,869

15,156

11,912

27,069

167

19

49

236

1

237

193

68

86

348

－

348

Total

Notes:
1. Principal contents of business in each segment.
Business segment

Systems Development

System Operations andInfrastructure Development

Product
Sales

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

2. Unallocatable operating expenses in Eliminations/Corporate amounted to ¥1,791 million for the fiscal year. These
consisted mainly of R&D expenses and expenses related to the Group’s management divisions.
3. Total Company assets in Eliminations/Corporate amounted to ¥12,038 million for the fiscal year. These consisted mainlyof the Group’s surplus operating assets (cash, deposits, and marketable securities), long-term invested assets (investment
securities), and deferred tax assets.
23

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

4. Depreciation expenses and capital-related expenditures included depreciation and additions to long-term prepaid
expenses, respectively.

b. Geographical Segments
Fiscal 2009 (from April 1, 2008 to March 31, 2009)(Millions of yen)Japan
I Net Sales, Operating
Income and Expenses
Sales(1) Sales to customers(2) Intersegment sales ortransfers

Other Regions

Total

Eliminations/
Corporate

Consolidated

38,2603,516

41,777－

41,777

113

43

156

－

Total sales

38,373

3,559

41,933

(156)
(156)

41,777

Operating expenses

34,3403,231

37,572384

37,956

Operating income

4,033

328

4,361

(540)

3,820

II

24,5701,019

25,589929

26,519Assets

Notes:
1. Countries and regions are categorized based on geographic proximity.
2. Because only small amounts of net sales were recorded in each country and region outside Japan, these countries andregions are aggregated under Other Regions.
Principal countries included in Other Regions are the United States and the Netherlands.
3. Overseas sales accounted for more than 10% of total consolidated sales during the first quarter and thus geographic
segment information has been included from the first quarter of the current fiscal year.
4. Unallocatable operating expenses in Eliminations/Corporate amounted to ¥532 million for the fiscal year. These
consisted mainly of expenses related to SRA Holdings.
5. Total Company assets in Eliminations/Corporate amounted to ¥945 million for the fiscal year. These consisted mainly of
the Group’s surplus operating assets (cash, deposits) and long-term invested assets (investment securities).

24

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

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

Other Regions

Total

Eliminations/
Corporate

Consolidated

31,286

2,766

34,053－34,053

265

15

280

(280)

－

Total sales

31,551

2,782

34,333(280)

34,053Operating expenses

29,3072,669

31,97778

32,055

Operating income

2,243

113

2,356

(359)

1,997

II

24,041

1,727

25,7691,300

27,069Assets

Notes:
1. Countries and regions are categorized based on geographic proximity.
2. Because only small amounts of net sales were recorded in each country and region outside Japan, these countries andregions are aggregated under Other Regions.
Principal countries included in Other Regions are the United States and the Netherlands.
3. Unallocatable operating expenses in Eliminations/Corporate amounted to ¥359 million for the fiscal year. These
consisted mainly of expenses related to SRA Holdings.
4. Total Company assets in Eliminations/Corporate amounted to ¥1,478 million for the fiscal year. These consisted mainlyof the Group’s surplus operating assets (cash, deposits) and long-term invested assets (investment securities).

c. Overseas Sales
Fiscal 2009 (from April 1, 2008 to March 31, 2009)(Millions of yen)
Other Regions
I

Overseas Sales

II

Consolidated net sales

Total

3,518

3,518

－

41,7778.4

8.4

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

1. Countries and regions are categorized based on geographic proximity.
2. Because only small amounts of net sales were recorded in each country and region outside Japan, these countries andregions are aggregated under Other Regions.
Principal countries included in Other Regions are the United States and the Netherlands.
3. Overseas sales are those recorded by the Company and its consolidated subsidiaries in countries and regions outside
Japan.
4. Overseas sales accounted for more than 10% of total consolidated sales in the first quarter of the current fiscal year andthus overseas sales are included in segment information from first quarter of the current fiscal year.

25

SRA Holdings, Inc. (3817) Summary of Consolidated Financial Results for the Year Ended March 31, 2010

Fiscal 2009 (from April 1, 2009 to March 31, 2010)(Millions of yen)
Other Regions
I

Overseas Sales

II

Consolidated net sales

Total

2,767

2,767

－

34,053

8.1

8.1

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

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

26