May 15, 2008

Summary of Consolidated Financial Results
for the year ended March 31, 2008
Company name:

SRA Holdings, Inc.
(URL: http://www.sra-hd.co.jp/)3817

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

Toru Kashima
Tomotaka Yanase, 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:
Stock listing:June 26, 2008
June 12, 2008
June 26, 2008

Tokyo Stock Exchange

1. Consolidated Financial Results for Fiscal 2008 (from April 1, 2007 to March 31, 2008)(All amounts rounded down, % change YoY)
(1)Consolidated Operating Results
Net Sales

Operating Income

Millions of yen

Fiscal 2008
Fiscal 2007

45,05836,765%

Millions of yen

22.6
―

%

4,102
2,848

Yen
Fiscal 2008
160.74
Fiscal 2007145.67
Reference: Gain (loss) on equity method investments:
Fiscal 2008: —Fiscal 2007: —

%

4,181
2,923

Ratio of Net Income to
Shareholders’ Equity%

Yen

160.35145.35Net Income

Millions of yen

44.0―

Net Income per Shareafter Dilution

Net Income
per Share

Ordinary Profit

Millions of yen

43.0―
Ratio of
Ordinary Profit
to Total Assets
%

18.0
18.8

%

2,224
2,015

10.4
―

Ordinary Profit
Ratio
%

15.9
12.6

9.1
7.7

(2) Consolidated Financial Position
Total Assets

Net Assets

Shareholders’ Equity Ratio

Millions of yen

Millions of yen%

Yen

13,224
11,63247.0
47.2

950.22
838.97

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
2,846

(434)
1,665

(238)
(219)

11,265
9,919

Fiscal 2008
27,967
Fiscal 2007
24,622
Reference: Shareholders’ equity
Fiscal 2008: ¥13,150 million
Fiscal 2007: ¥11,611 million

Shareholders’ Equity per Share(3) Consolidated Cash Flows

Fiscal 2008
Fiscal 2007

2. Dividends
Dividend per Share
Record dateFiscal 2007
Fiscal 2008

InterimYear-end

Yen

Yen

For the year
Yen

―
―
―

25.00
40.00
40.00

25.00
40.00
40.00

Total Dividends(for the year)
Millions of yen

345
553
―

Fiscal 2009 (forecast)
Note: Of the year-end dividend for the year ending March 31, 2008, ¥10.00 was issued as a commemorative dividend.

－ 1 －Dividend
Propensity(consolidated)

Net Assets to
Dividend Ratio(consolidated)
%

17.2
24.9
24.1

%

3.2
4.5
―

3. Consolidated Earnings Forecast for Fiscal 2009 (from April 1, 2008 to March 31, 2009)（% change YoY is for the fiscal year or for interim period）
Net Income
Net Sales

Operating Income

Ordinary Profit

Net Income
per Share

Interim Period
Full Year

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

20,00046,000

1.1
2.1

1,750
4,400

2.8
7.3

1,750
4,400

1.1
5.2

950
2,300

3.4
3.4

68.64
166.194. 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 2008: 15,240,000 sharesFiscal 2007: 15,240,000 shares
2. Own shares at end of term
Fiscal 2008: 1,400,198 sharesFiscal 2007: 1,400,198 shares[Reference] Summary of non-consolidated financial results
1. Non-Consolidated Financial Results for Fiscal 2008 (from April 1, 2007 to March 31, 2008)(1)Non-Consolidated Operating Results(% change YoY)
Revenues
Millions of yen

Fiscal 2008
Fiscal 2007

Fiscal 2008
Fiscal 2007

Operating Income
%

1,282
640

100.3
―

Millions of yen

Ordinary Profit
%

672
414

62.2
―

Net Income

Net Income per Shareper Share

after Dilution

Yen

Yen

41.68
49.47

41.59
49.28

Millions of yen

Net Income
%

657
417

57.7
994.4

Millions of yen

635
429

%

48.1
130.6

(2) Non-Consolidated Financial Position
Net Income

Net Assets

Millions of yen

Millions of yen%

Shareholders’ Equity
per Share
Yen

9,058
8,762

98.4
99.4

591.00574.32

9,150
8,806
Reference: Shareholders’ equity:
Fiscal 2008: ¥9,006 million
Fiscal 2007: ¥8,752 million
Fiscal 2008
Fiscal 2007

Shareholders’ Equity Ratio

Note: Forecast performance is predicted by the Company based on information currently available at the time of the forecast.
Actual financial results may differ due to a number of factors. For further information, please see page 5 of the attachedreference.

－ 2 －1. Business Results(1) Analysis of Business Results[1] Business results for the fiscal year

Although the Japanese economy sustained recovery during the fiscal year ended March 31, 2008,
there was a growing perception of uncertainty regarding the direction of the economy due to suchfactors as changes in financial and capital markets triggered by the subprime loan problem in
addition to high crude oil prices and rising raw materials prices.
In the information services industry, strategic IT investments by such corporate customers as
financial institutions and manufacturers remained brisk. Nonetheless, the harsh businessenvironment persisted, as companies faced pressure to respond promptly and accurately toincreasingly sophisticated and diverse customer needs, including for security countermeasures, inaddition to meeting demands for high quality and short delivery times.
Under these conditions, all companies comprising the SRA Holdings Group worked in unison toachieve the targets established for the fiscal year under review, which was the final year of our
medium-term management plan.
While securing robust orders, Software Research Associates (SRA), Inc., the core company of
SRA Holdings, implemented thorough system development cycle management—covering functions
ranging from order receiving to production and acceptance inspection—as a system for managing
orders and production based on “Software Engineering.” In doing so, we promoted the“standardization of processes.” By taking these initiatives, we are working to equalize our order andsales levels while preventing the emergence of unprofitable projects. Additionally, to actively reap
opportunities in the favorable business environment, we focused on expanding business in embedded
systems for manufacturing industries. Moreover, a Singapore-based subsidiary, which wasestablished as a relay base for offshore development in India, began operational functions during the
fiscal year. Thanks to these measures, we recorded all-time highs in net sales and ordinary profit.
Advanced Integration Technology (AIT) Inc., a principal subsidiary, achieved favorable results,
owing largely to increased sales of devices, while other subsidiaries recorded solid results overall.
Consequently, SRA Holding’s net sales and profits significantly exceeded initial forecasts, and theCompany recorded the following results. SRA Holdings recorded consolidated net sales of ¥45,058
million, an increase of 22.6% from the previous fiscal year. At the profit level, we recorded sharp
increases over the previous fiscal year, as operating income surged 44.0% to ¥4,102 million andordinary profit soared 43.0% to ¥4,181 million. These increases were due to an increase in gross-3-

profit accompanying higher net sales in addition to an improvement in productivity as well as theongoing curbing of SG&A expenses. Despite an improved gross profit margin in our mainstay
System Development business, the overall gross profit margin remained at the same level as in theprevious fiscal year due in part to the effects of large-scale sales of devices. Net income rose 10.4%
from the previous year to ¥2,224 million, surpassing ¥2,015 million recorded in the previous year
when we posted a one-off gain of ¥986 million on the disposal of fixed assets accompanying the saleof the Technical Center in Yokohama.

Consolidated results compared with the previous fiscal year and initial forecast(Millions of yen)

Net sales

Operating income

Ordinary profit

45,058

4,102

4,181

2,224

36,765

2,848

2,923

2,015

8,293

1,253

1,257

208

year)

(+ 22.6%)(+44.0)(+43.0%)(+10.4%)

Initial results forecast for FY2008

40,000

3,400

3,400

1,900

Amount of change from initial forecast

5,058

702

781

324

(percentage change compared with(+12.6%)(+20.6)(+23.0%)(+17.1%)

Consolidated results for FY2008

Net income

ended March 31, 2008
Consolidated results for FY2007
ended March 31, 2007
Amount of change from previous fiscal
year(percentage change from previous fiscal(announced on May 15, 2007)

initial forecast)

A summary of business results for the fiscal year by business segment is shown below.

-4-[System Development]
The System Development business recorded brisk sales on the back of increased orders, mainly fromthe manufacturing and distribution industries as well as financial institutions. As a result, net sales
for the fiscal year amounted to ¥24,205 million, an increase of 11.5% from the previous fiscal year.

[Network & Systems Services]
The Network & Systems Services business recorded robust growth in school-related orders in
addition to an increase company orders. Therefore, net sales amounted to ¥4,664 million, an increaseof 6.2% from the previous fiscal year.

[Consulting & Other Services]
In the Consulting & Other Services business, we recorded sharp growth in sales of devices by
responding accurately to demand from customers, beginning with financial institutions. Additionally,
we focused on sales of software products and recorded robust sales of Qt and other development
support tools. As a result, net sales soared 51.7% from the previous fiscal year to ¥16,189 million.

[2] Outlook for the Next Fiscal YearThe direction of the Japanese economy still remains unclear and several factors of concern such as
trends in stock prices and crude oil prices continue to warrant close scrutiny. In the information
services industry, although robust IT investments by companies are expected to continue, theenvironment for new orders is likely to remain harsh due to intensifying competition. Also, there is arisk of a fall in demand for IT investments should perceptions of an economic slowdown persist overthe long term.
Under these conditions, the SRA Holdings Group will strengthen and expand its businessfoundation and business structure and firmly establish and progress with the development of its new
businesses. Further, we will undertake concerted efforts to achieve the set targets of the next
medium-term management plan.
For the fiscal year ending March 31, 2009, we are forecasting consolidated net sales of ¥46,000
million, consolidated operating income of ¥4,400 million, consolidated ordinary profit of ¥4,400
million, and consolidated net income of ¥2,300 million. Our forecast for consolidated net sales of¥46,000 million represents a 2.1% increase from the previous fiscal year. However, when excluding
the large-scale sale of devices to a financial institution that amounted to ¥2,859 million, net sales forfiscal 2008 would have amounted to ¥42,199 million. Compared with this figure, our net sales
forecast for fiscal 2009 thus represents a 9.0% increase from the previous fiscal year.

-5-(2) Analysis of Financial Position
Cash and cash equivalents on a consolidated basis at the end of the fiscal year increased ¥1,346
million to ¥11,265 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 of such cash
inflows as income before income taxes and minority interests of ¥4,139 million and an increase inaccounts and notes payable—trade of ¥481 million. Cash outflows included an increase in accounts
and notes receivable—trade of ¥1,172 million, an increase in inventories of ¥895 million and income
taxes paid and refunded of ¥1,110 million.

Cash Flows from Investing Activities
Net cash used in investing activities amounted to ¥434 million. This was due mainly to the outflowsof ¥208 million for purchases of fixed assets, ¥108 million for purchases of investment securities,and ¥100 million for disbursements for investments in term deposits.

Cash Flows from Financing Activities
Net cash used in financing activities amounted to ¥238 million. This was due mainly to such cash
outflows as ¥345 million in cash dividends paid and ¥40 million in the repayments of long-term debt
as well as such cash inflows as ¥148 million in increase in short-term loans.

Trends in cash flows indicators for the SRA Holdings Group (the Company and its
consolidated subsidiaries) are shown below.
FY ended March 31, 2007

FY ended March 31, 2008

Shareholders’ equity ratio (%)

47.2

47.0

Shareholders’ equity ratio at market value (%)

105.4

93.9

Debt redemption (years)

1.0

1.4

Interest coverage ratio

68.5

38.2

Notes:
Shareholders’ equity ratio: Shareholders’ equity/total assets
Shareholders’ equity ratio at market value: Total market capitalization/total assets
Debt redemption: Interest-bearing debt/operating cash flow

-6-

Interest coverage ratio: Operating cash flow/interest expense

1. All indicators were calculated using consolidated financial figures.
2. Market capitalization is calculated by multiplying the closing stock price at the end of the fiscal
period by the total number of shares outstanding at the end of the fiscal period.
Operating cash flow represents cash flows from operating activities on the Consolidated Statementsof Cash Flows. Interest-bearing debt includes all debt that pays interest as listed on theConsolidated Balance Sheets. Interest expense is the amount of interest paid as listed on theConsolidated Statements of Cash Flows.

(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 to shareholders in accordance with the state of its earnings, while also retaining earnings for
R&D and the establishment of a development environment for responding to the rapid andrevolutionary technological advances within the industry as well as to prepare for future businessdevelopment.
The Company aims to allocate profits with a consolidated dividend payout ratio of 20%.
Moreover, at the Ordinary General Meeting of Shareholders held in September 2006, the Articles ofIncorporation 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, 2008, in consideration of theCompany’s favorable consolidated business results as highlighted by record-high profits, and inaccordance with our dividend policy of striving to realize a consolidated payout ratio of 20%, theCompany will pay cash dividends per share of ¥40.00 (representing a consolidated payout ratio of
24.9%), consisting of a regular cash dividend per share of ¥30.00 in addition to a ¥10.00
commemorative dividend to mark the 40th anniversary of our founding.
To ensure dividends reach shareholders as quickly as possible, we have moved up thedividend payment date to June 12.
Concerning dividends for the fiscal year ending March 31, 2009, as a measure ofappreciation to shareholders for their continual support, we plan to pay cash dividends per share of¥40.00, with the additional ¥10.00 per share paid in fiscal 2008 as commemorative dividend to markthe 40th anniversary of the SRA Group becoming part of the regular dividend.
We also regard the acquisition of treasury shares as an effective means of redistributing
profits to shareholders. Accordingly, we make such acquisitions appropriately while consideringsuch factors as our stock price trends and financial condition.

-7-

(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 handling personal information, the SRA Holdings Group also sufficiently recognizes the criticalnature 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 unexpectedleakage of information, besides losing the trust of business partners, the SRA Holdings Group could
become liable for payment of compensatory damages, which could have an effect on the Group’sbusiness results.
In addition to the above, the Company comprehensively incurs business and other risks of SRA, amain 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 System Development and the Network & Systems Services businesses, besides its own
in-house engineers, the SRA Holdings Group utilizes business partners for the planned augmentationof its staff of in-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.

-8-

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 54.4% of manufacturing costs as of the end of the fiscal period.

(2) Project profitability in System Development
In the core System Development business, the SRA Holdings Group concludes bulk subcontracting
contracts whereby it handles the entire system development and is responsible to its customers forcompletion. There are also projects during which more than one year elapses from the time the orderis obtained to system completion and handover. Therefore, even for projects for which a certain
amount of income is expected at the time the order is received, there are instances when profitability
worsens because of such factors as customer requests for specification changes after commencing
development activities or a work process that exceeds the initial estimate. Moreover, the incurrenceof 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 business results.

(3) Maintaining confidentiality of customer information
Along with being aware that it is an information processing company with numerous opportunities
for handling personal information, the Group also sufficiently recognizes the critical nature of
personal information, and thus, has established an internal monitoring structure. Concurrently, as acompany that has acquired Privacy Mark certification, the SRA Holdings Group provides education
for its Group employees and outsourced staff and makes efforts to protect personal information.
However, in the event of the unexpected leakage of information, besides losing the trust of business
partners, the SRA Holdings Group could become liable for payment of compensatory damages,
which could have an effect on the Group’s business results.

2. Medium- and Long-term Management Strategy
The SRA Holdings Group proceeded with the implementation of a three-year management plan, withfiscal 2008 marking the plan’s final year. We significantly surpassed the specific targets for theplan’s final year, namely growth in sales surpassing 8% and an ordinary profit-to-sales ratio
exceeding 8%. Overall, various measures were implemented and proceeded smoothly during theplan’s execution period.
To maintain the favorable trends in our business results realized during the past three years and-9-achieve further growth, on May 22, 2008 we plan to announce our new three-year management plan.
This plan is currently being formulated and will run from the fiscal year ending March 31, 2009
through the fiscal year ending March 31, 2011.
Under the new medium-term management plan, the SRA Holdings Group aims to position itself as
an independent company that offers a truly optimal range of choices, taking a neutral stance without
relying on particular vendors and manufacturers. To attain this goal, we will strengthen our businessstrategies and business structure as we strive for continuous growth while also moving strategicallyto advance the Group’s business capabilities as we look to the future.

- 10 -

4. Consolidated Financial Statements(1) Consolidated Balance Sheets(Millions of Yen)
Increase

FY2007

FY2008(as of March 31, 2007)(as of March 31, 2008)

AmountAmount%(Decrease)%

ASSETS

Current assets:
Cash and bank deposits

8,306

9,351

1,044

Notes and accounts receivable

7,790

8,940

1,149

Marketable securities

1,999

2,003

4

Inventories

846

1,740

894

Deferred income taxes

383

471

88

Other current assets

689

657

(32)

Allowance for doubtful accounts
Total current assets(5)
20,010(22)
81.3

23,143

(16)
82.8

3,133

Fixed assets:
Tangible assets:
Buildings

95

103

7

Machinery and equipment

106

91

(15)

Land

0

0

－

Other tangible assets

33

32

(1)

Total tangible assets

237

1.0

228

0.8

(8)

Intangible assets:
Software

568

376

(192)

Other intangible assets

31

64

33

Total intangible assets

600

2.4

440

1.5

(159)

Investments and other assets:
Investment securities

1,919

1,510

(408)

Deferred income taxes

998

1,318

320

Guarantee money deposited

556

553

(2)

Other assets

357

889

531

Allowance for doubtful accounts

(8)

(10)

(2)

Allowance for loss on investments

(50)

(107)

(57)

Total investments and other assets

3,774

15.3

4,155

14.9

380

Total fixed assets

4,611

18.7

4,824

17.2

212

24,622100.0

27,967

100.0

3,345

Total assets- 11 -

(Millions of Yen)
FY2007

Increase

FY2008(as of March 31, 2007)(as of March 31, 2008)

AmountAmount%(Decrease)%

LIABILITIESCurrent liabilities:
Accounts payable
Debentures due for redemption within one year

3,041

3,502

460

－

300

300

2,446

2,576

130

Income taxes payable

615

1,640

1,024

Accrued consumption tax

362

392

29

Short-term loans

1,169

963

(206)

Allowance for bonuses payable

679

653

(25)

Allowance for directors' bonuses payable

54

74

20

Accrued expenses

737

Other
Total current liabilities

9,106

798
37.0

10,901

60
39.0

1,795

Long-term liabilities:
Debentures

300

－

(300)

Long-term debt

32

10

(22)

3,149

3,412

262

375

400

25

Accrued employees' retirement benefi
Directors' retirement benefits
Negative goodwill

25

19

(5)

3,882

15.8

3,842

13.7

(40)

12,98952.8

14,743

52.7

1,754

Common stock

1,000

4.1

1,000

3.6

－

Capital susplus

4,519

18.3

4,519

16.1

－

Earned surplus

6,151

25.0

8,029

28.7

1,878

Treasury stock, at cost

(894)

(3.6)

(894)

(3.2)

－

10,77643.8

12,654

45.2

1,878

796

3.2

480

1.7

(316)

Total long-term liabilities
Total liabilities

NET ASSETS

Shareholders' equity

Total shareholders' equity
Valuation and translation adjustments
Net unrealized holding gains on other securities
Translation adjustments
Total valuation and translation adjustments
Stock options
Minority interests
Total net assets
Total liabilities and net assets

37

0.2

15

0.1

(22)

834

3.4

495

1.8

(338)

9

0.0

52

0.2

42

11

0.0

21

0.1

9

11,63247.2

13,224

47.3

1,591

24,622100.0

27,967

100.0

3,345

- 12 -

(2) Consolidated Statements of Income(Millions of Yen)
Increase

FY2007

FY2008(April 1, 2006-March 31, 2007)(April 1, 2007-March 31, 2008)

Amount%Amount(Decrease)%

Net sales

36,765100.0

45,058

100.0

8,293

Cost of sales

29,59280.5

36,311

80.6

6,718

Gross profit

7,173

19.5

8,747

19.4

1,574

4,324

11.8

4,645

10.3

320

Operating income

2,848

7.7

4,102

9.1

1,253

Non-operating income

151

0.5

154

0.4

3

Non-operating expenses

75

0.2

75

0.2

0

2,923

8.0

4,181

9.3

1,257

Extraordinary income

987

2.6

21

0.0

(965)

Extraordinary loss

295

0.8

63

0.1

(232)

3,615

9.8

4,139

9.2

524

Current income taxes

936

2.5

2,123

4.7

1,186

Deferred income taxes

630

1.7

(217)

(0.5)

(847)

Minority interests

31

(0.1)

9

0.0

(22)

2,015

5.5

2,224

5.0

208

Selling, general and administrative
expenses

Ordinary profit

Income before income taxes and minority
interests

Net income- 13 -

(3) Consolidated Statements of Changes in Net Assets

Fiscal 2008 (April 1, 2007-March 31, 2008)(Millions of Yen)
Shareholders' equity
Common stock

Balance as of March 31, 2007

Capital surplus Retained earnings Treasury stock

1,000

4,519

6,151

(894)

Total
shareholders'equity10,776

Changes during the period
Cash dividends (note)

(345)

(345)

Net income

2,224

2,224

Net change in the items other thanshareholders' equity during the period
Total change during the period

－

－

1,878

－

1,878

Balance as of March 31, 2008

1,000

4,519

8,029

(894)

12,654

Evaluation of conversion gain
Net unrealized
holding gain on
securities
Balance as of March 31, 2007

Net foreign
currencytranslation

Total evaluationor conversion
gain

796

37

834

Changes during the period
Cash dividends (note)
Net income
Net change in the items other than
(316)

(22)

(338)

Total change during the period

shareholders' equity during the period

(316)

(22)

(338)

Balance as of March 31, 2008

480

15

495

Stock options

Balance as of March 31, 2007

Minority interests Total net assets

9

11

11,632

Changes during the period
Cash dividends (note)(345)

Net income

2,224

Net change in the items other than
42

9

(287)

Total change during the period

shareholders' equity during the period

42

9

1,591

Balance as of March 31, 200852

21

13,224- 14 -

(4) Consolidated Statements of Cash Flows(Millions of Yen)I.

FY2007

FY2008(April 1, 2006-March 31, 2007)(April 1, 2007-March 31, 2008)

AmountAmountCash flows from operating activities:
Income before income taxes and minority interests
Depreciation and amortization
Increase in employees' retirement benefits, net of payments
Increase in directors' retirement benefits
Increase (decrease) in allowance for bonuses payable
Increase in allowance for directors' bonuses payable
Increase in allowance for doubtful accounts
Increase in allowance for loss on investments
Interest and dividend income
Interest paid
Loss on evaluation of investment securities
Gain on sale of investment securities
Gain on disposal of fixed assets
Loss on disposal of fixed assets
Increase in accounts and notes receivable－trade
Increase in inventories
Increase in accounts and notes payable－trade
Increase (decrease) in other operating liabilities
Increase in accrued consumption taxes payable
Directors' bonuses paid
Other, net
SubtotalInterest and dividends receivable
Interest paid
Income taxes paid and refunded
Net cash provided by operating activities

3,615
298
192
13
3
―
2
25
(25)
41
33
0
(956)
97
(318)
(78)
468
674
30
(45)
(144)
3,924
25
(41)
(1,062)
2,846

4,139
306
246
25
(25)
20
19
57
(51)
53
―
(7)
0
5
(1,172)
(895)
481
(105)
29
―
9
3,136
51
(53)
(1,110)2,025

Cash flows from investing activities:
Purchases of fixed assets
Proceeds from sale of fixed assets
Purchases of investment securities
Proceeds from sale of investment securities
Purchases of additional stock of consolidated subsidiary
Proceeds from share exchange with parent company
Payments for loans receivableCollection of loans receivable
Disbursements for investments in term deposits
Disbursements for deposits
Collection of deposits
Other, net
Net cash provided by (used in) investing activities

(299)
2,180
(94)
49
(112)
2
(43)
25
0
(56)
51
(37)
1,665

(208)
0
(108)
12
―
―
(56)
42
(100)
(5)
7
(16)
(434)

III. Cash flows from financing activities:
Increase (decrease) in short-term loans
Proceeds from long-term debt
Repayments of long-term debt
Purchases of treasury stock
Cash dividends paid
Other, net
Net cash used in financing activities

(54)
50
(31)
0
(172)
(10)
(219)

148
―
(40)
―
(345)
―
(238)

IV. Effect of exchange rate changes on cash and cash equivalents
V. Net increase in cash and cash equivalents
VI. Cash and cash equivalents at beginning of period
VII. Cash and cash equivalents at end of period

10
4,301
5,617
9,919

(6)
1,346
9,919
11,265II.

- 15 -

Segment Information(1) Segment Information by Type of Business
Fiscal 2007 (from April 1, 2006 to March 31, 2007)(Millions of yen)
SystemDevelopment
I
Net Sales andOperating Income
Sales
(1)
Sales tocustomers(2)
Intersegment
sales ortransfers
Total sales
Operating expenses

Network &Systems
Services

Consulting& Other
Services

Total

Eliminations/
Corporate

Consolidated

21,701

4,392

10,672

36,765－36,765

79

208

964

1,252

(1,252)－

21,78018,398

4,600
3,715

11,637
10,42638,01832,540(1,252)
1,376

36,76533,916

3,382

884

1,210

5,477

(2,629)

2,848

8,200

1,831

3,871

13,902

10,71924,622

Depreciation
expenses

201

28

68

298

－

298

Capital-related
expenditures

175

32

114

321

－

321

Operating income
II
Assets, depreciation
expenses andcapital-related
expenditures
AssetsFiscal 2008 (from April 1, 2007 to March 31, 2008)(Millions of yen)
SystemDevelopment
I
Net Sales andOperating Income
Sales
(3)
Sales tocustomers(4)
Intersegment
sales ortransfers
Total sales
Operating expenses

Network &Systems
Services

Consulting& Other
Services

Total

Eliminations/
Corporate

Consolidated

24,205

4,664

16,18945,058－45,058

63

383

480

926

(926)

－

24,26820,156

5,047
3,918

16,66915,37545,98539,451

(926)
1,504

45,05840,956

4,111

1,128

1,293

6,533

(2,431)

4,102

9,241

1,971

5,002

16,215

11,752

27,967

Depreciation
expenses

188

29

87

305

1

306

Capital-related
expenditures

96

12

106

215

7

223

Operating income
II
Assets, depreciation
expenses andcapital-related
expenditures
Assets- 16 -

Notes
1. Businesses are classified into segments according to similarities that include the types andcharacteristics of services.
2. Principal contents of business in each segment.
Business segment
System Development

Content of businessz
Integrated system development ranging from defining requirements to development andmaintenance of mainframe-based large systemsz
System integration covering system planning, development, and introduction 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

Network & Systems Services

z
z
z
z

Operation management of computer systems and network systems
Overall operation that includes data management and facilities management
Building of network systems
Outsourcing services

Consulting& Other Serviceszzz

Sales of packaged software that includes licensing
Sales of system devices, centering on servers, in integration services
Consulting services related to the introduction of IT

3. Unallocatable operating expenses in Eliminations/Corporate amounted to ¥2,431 million for the fiscal
year. These consisted mainly of R&D expenses and expenses related to management divisions.
4. Total Company assets in Eliminations/Corporate amounted to ¥11,930 million for the fiscal year. These
consisted mainly of 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 tolong-term prepaid expenses, respectively.

(2) Geographical Segments
The amounts of net sales and assets in Japan exceed 90% of total sales and total assets for all
segments and thus geographical segment information is omitted.
(3) Overseas Sales
Overseas net sales account for less than 10% of total consolidated net sales and are thus omitted.

- 17 -