COMSYS Holdings Corporation

COMSYS WAY
Advance of structural reforms and top-line growth

Annual Report 2014
Fiscal Year Ended March 31, 2014

Contents

01

Profile02

Five Integrated Business Groups

04

President’s Message

08

Review of Operations
08 NTT Engineering Business
09 NCC Engineering Business
10 IT Solutions Business
11 Social System-Related Business and Other

12

Topics14

Corporate Governance19

Corporate Social Responsibility (CSR)

20

Financial Statements*
20 Consolidated Balance Sheets
22 Consolidated Statements of Income
23 Consolidated Statements of Changes in Net Assets
25 Consolidated Statements of Cash Flows
26 Ten-Year Summary of Business Results and Financial Data

28

How to use

Information
28 COMSYS Holdings Information
30 Investor Information

Cautionary Statement with Respect to Forward-Looking Statements
Statements made in this annual report with respect to COMSYS Holdings’ plans and benefits as well as otherstatements that are not historical facts are forward-looking statements, which involve risks and uncertainties. Potential risks and uncertainties include, without limitation, general economic conditions in COMSYS Holdings’ markets,
exchange rates, and COMSYS Holdings’ ability to continue to win customers’ acceptance of its products, which areoffered in highly competitive markets characterized by continual new product introductions and rapid developments in technology.

To Contents* Compiled based on the content of COMSYS Holdings’ Annual Securities Report submitted in Japanese.

Left-Click tabs at the right-hand edgeof the page to jump to the relevant
section.

COMSYS Holdings Corporation
Annual Report 2014

1
ProfileProfileCOMSYS Group on September 29, 2003 through share transfers from three companies—Nippon
COMSYS Corporation, SANWA ELEC Co., Ltd. (now SANWA COMSYS Engineering Corporation)and HIGASHI NIHON System Construction Co., Ltd. (now TOSYS Corporation).
centered on 5 core operating subsidiaries, specifically the above 3 companies and TSUKEN
Corporation and COMSYS JOHO SYSTEM Corporation.
The COMSYS Group’s main businesses are electrical and telecommunications infrastructure

President’s
Message

As of March 31, 2014, the COMSYS Group was made up of 38 subsidiaries and 8 affiliates,

Five Integrated
Business
GroupsCOMSYS Holdings Corporation (the “Company”) was established as the holding company of theconstruction services, which mainly involve the construction of telecommunications infrastructure,

The COMSYS Group aims to become a lean corporate entity that steadily generates earnings in

TopicsCOMSYS WAY (advanced etc.)

Review ofOperations

electrical facilities, and other businesses, such as the information processing-related business.

the recent severe operating environment, and so has been implementing COMSYS WAY structural reforms at each Group company. Looking ahead, the Group is united in working together tofurther strengthen these structural reforms under our COMSYS WAY (advanced) initiative, which
Corporate
Governanceprioritizes not only higher earnings, but top-line growth as well.

Our Mission

Financial
Statements

Management Policies

Corporate Social
Responsibility(CSR)

The COMSYS Group devotes every effort to bringing about a “smart, ubiquitous network society” to serve as theinfrastructure of a “sustainable society.” To this end, we intend to leverage our position as Japan’s No. 1
communications infrastructure construction company in maximizing synergies across the whole Group to provide
high-quality technologies and services.

Management at the COMSYS Group is based on the following three policies, and every effort is being made toachieve them.

2. Strive to maximize synergies across the COMSYS Group

Information

1.	Fortify further the COMSYS Group’s dominant position as Japan’s No. 1 communications infrastructure
construction company
3.	
Aim to be a knowledge-intensive corporation by sharing know-how through Group-wide IT systems

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2

COMSYS Holdings Corporation
Annual Report 2014

Five Integrated Business Groups

The COMSYS Group’s (COMSYS Holdings andits subsidiaries and affiliates) main businesses
comprise electrical and telecommunications
infrastructure construction services centeredon telecommunications infrastructure andelectrical facilities and other businesses,
NipponCOMSYS
Corporation

SANWA
COMSYS
Engineering
Corporation

TOSYS
Corporation

TSUKEN
Corporation

COMSYSJOHOSYSTEM
Corporation

including the information processing-related
business. As of March 2014, the Group included
51 subsidiaries.

Nippon COMSYS
Corporation

Business Activities
With its primary customers consisting of the NTT
Group, public offices, and private enterprises,
the Nippon COMSYS Group is engaged in the
installation of electrical and telecommunications
facilities and equipment on a nationwide scale.

SANWA COMSYSEngineering Corporation

Business Activities
With its primary customers consisting of theKDDI Group and the SoftBank Group, the
SANWA COMSYS Engineering Group is engaged
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in the installation of electrical and telecommunications facilities and equipment on a nationwide scale.

Address:
17-1, Higashigotanda 2-chome,
Shinagawa-ku,
Tokyo 141-8647, Japan
Establishment:
December 1951
Number of Employees:
Consolidated 4,681
Non-Consolidated 3,082
URL:
http://www.comsys.co.jp/(Japanese only)
Number of Consolidated
Subsidiaries:
13 companies

Consolidated Subsidiaries:

Address:
12-3, Koenji-Minami 2-chome,
Suginami-ku,
Tokyo 166-0003, Japan
Establishment:
September 1947
Number of Employees:
Consolidated 1,473
Non-Consolidated 720
URL:
http://www.sancom-eng.co.jp/(Japanese only)

Number of Consolidated
Subsidiaries:
3 companies
Consolidated Subsidiaries:

COMSYS Mobile Corporation
COMSYS Engineering Co., Ltd.
WINTIQ Co., Ltd.
COMSYS Kansai Engineering Co., Ltd.
COMSYS Kyushu Engineering Co., Ltd.
Phos Techno Shikoku Co., Ltd.
Tsushin Densetsu Co., Ltd.
Nihonkai Tsushinkensetsu Co., Ltd.
Yashiro Tsushinkensetsu Co., Ltd.
COMSYS Net Corporation
COMSYS Tohoku Techno Co., Ltd.
COMSYS Tsusan Co., Ltd.
Taiei Seisakusho Co., Ltd.

SANWA Denshi Inc.
SEC Hi Tec Co., Ltd.
SUNCOM Technology Corporation

COMSYS Holdings Corporation
Annual Report 2014

3
ProfileBusiness Activities
the TOSYS Group is engaged in the installationof electrical and telecommunications facilities
and equipment, mainly in Nagano and Niigata.

the TSUKEN Group is engaged in the installationof electrical and telecommunications facilities

With its primary customer consisting of the NTT
Group, the COMSYS JOHO SYSTEM Group isbusiness, mainly in Tokyo.

TSUKEN TECHNOLOGY Co., Ltd.
TSUKEN Act Corporation
TSUKEN BUSINESS CO., LTD.

COMSYS Techno Co., Ltd.

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primarily engaged in the software development

Consolidated Subsidiary:

TSUKEN Active

Information

Business Activities

Address:
23-14, Takanawa 3-chome,
Minato-ku,
Tokyo 108-0074, Japan
Establishment:
April 2009
Number of Employees:
Consolidated 502
Non-Consolidated 361
URL:
http://www.comjo.co.jp/(Japanese only)
Number of Consolidated
Subsidiaries:
1 company

CORPORATION

Financial
Statements

COMSYS JOHO SYSTEM
Corporation

TSUKEN ADVANCED SYSTEMS

Corporate Social
Responsibility(CSR)

and equipment, mainly in Hokkaido.

Tulip Life Co., Ltd.

Corporate
GovernanceWith the NTT Group as its primary customer,

Consolidated Subsidiaries:

TOSYS Niigata Co., Ltd.

TopicsBusiness Activities

Address:
6-8, Hondori 19-chome Minami,
Shiraishi-ku,
Hokkaido 003-0026, Japan
Establishment:
April 1951
Number of Employees:
Consolidated 1,754
Non-Consolidated 865
URL:
http://www.tsuken.co.jp/(Japanese only)
Number of Consolidated
Subsidiaries:
5 companies

Alstar Co., Ltd.

Review ofOperations

TSUKEN Corporation

Consolidated Subsidiaries:

President’s
Message

With the NTT Group as its primary customer,

Address:
1108-5, Higashiyama Aza,
Watauchi, Wakaho, Nagano City,
Nagano 381-0193, Japan
Establishment:
January 1960
Number of Employees:
Consolidated 1,031
Non-Consolidated 682
URL:
http://www.tosys.co.jp/(Japanese only)
Number of Consolidated
Subsidiaries:
3 companies

Five Integrated
Business
GroupsTOSYS Corporation

4
President’s Message

We aim to become a businessgroup that can deliver sustainable growth.

Hajime Takashima
President and Representative Director

Review of the Market Environment and Fiscal 2014
In fiscal 2014, the year ended March 31, 2014, the COMSYS Group’s operating
domain in the information and communications field in Japan saw rapid buildup
of a telecommunications network environment installed to improve connectivity,
accelerate communication speeds and adapt to mobile terminals that have grownin sophistication and diversity. This was in response to broader proliferation ofbroadband services, such as fiber-to-the-home (FTTH) and long-term evolution(LTE) wireless communication, greater functional sophistication of smartphones
and tablet devices, and increased usage of cloud computing.
Meanwhile, in both the public and private sectors, advances in the government’s
promotion of Smart ICT has given rise to new value-added industries andprompted the use of big data, open data and cloud technologies in trying toresolve various social issues, including in the electronic government, healthcare
and nursing care fields. This, in addition, is expected to stimulate public spending
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and capital expenditures by private companies aimed primarily at reinforcing thecapabilities of cities for withstanding disasters and building up telecommunications
infrastructure.

COMSYS Holdings Corporation
Annual Report 2014

5
ProfileUnder these market conditions, COMSYS took initiatives to promote the Group’s

in mega-solar power generation, green energy, and other next-generation business ventures and actively obtaining orders for public works and ICT investment

launched a new IT construction platform providing comprehensive managementfrom order receipt through project management, and fundamentally re-examined

As a result, continued growth in the Group’s IT solutions and social infrastructurebusinesses made up for the absence of a bulk order in mobile facility construction

Review ofOperations

its backyard operations to improve construction efficiency.

President’s
Message

projects. Moreover, in order to cope with an increase in work volume, the Group

Five Integrated
Business
GroupsCOMSYS WAY structural reforms and increase top-line revenues by participatingbooked in the previous year, which resulted in orders received falling 2.3% year
Topicson year to ¥327,980 million in the year under review. Net sales increased 4.8%
year on year to ¥331,341 million owing to the subsequent completion of themobile facilities and steady work in solar power construction.

rising 22.5% year on year to ¥28,078 million and net income improving 23.4% year

Corporate
GovernanceOn the earnings front, there was a significant increase with recurring profit

on year to ¥16,389 million. This significant gain, in addition to increased sales,

reductions.

(Millions of yen)

(Millions of yen)

400,000

40,000295,851

293,086

8.4% 29,000

8.3%

30,00027,570

7.1%
22,54720,000200,000

Information

300,000

345,000

331,341

316,092

315,480

Financial
Statements

Operating Results by Year

Corporate Social
Responsibility(CSR)

was mainly attributable to the COMSYS WAY structural reforms and cost

4.3%

4.3%
3.7%
12,5400

1012,592

11,785

11

n Net Sales (Left Scale) n Operating Income (Right Scale)

12nOperating Margin

10,000131415 (Forecast)0

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100,000

6

Fiscal 2015 Outlook and Priorities Ahead
For fiscal 2015, more capital investment in the telecommunications network
environment is expected in the COMSYS Group’s operating domain in theinformation and communications field in Japan. These investments will once
again be driven by connectivity improvements; faster communication speeds;
the technological innovation (a shift from LTE to LTE-advanced) needed to support
the greater functional sophistication and diversity of smartphones, tablets andother mobile devices; and the increased usage of cloud computing.
Meanwhile, in both the public and private sectors, the ICT Growth Strategy,
Smart Community and other policies the government is promoting are expected
to give rise to new value-added industries. Such policies should also help prompt
full-scale reconstruction in the wake of the Great East Japan Earthquake, while
reinforcing the national landscape and strengthening the capabilities of cities forwithstanding disasters. The government will also probably aim the policies toeliminate unsightly utility poles above ground and renovate expressways aheadof the 2020 Tokyo Summer Olympic and Paralympic Games. Moreover, suchpolicies are expected to usher the expansion of social infrastructure and IT businesses by stimulating demand in the environmental and energy markets.
Under these market conditions, the COMSYS Group will continue forward with
the COMSYS WAY structural reforms to increase top-line revenues, improve
productivity and enhance operational efficiency to develop a leaner business
management structure. Consequently, we are aiming for ¥29,000 million in consolidated operating income in fiscal 2015.

Profit Distribution/Dividend Policy
COMSYS Holdings views returning earnings to shareholders as an important
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management priority. Our basic policy is to pay steady and continuous dividends
linked to business performance.

7
ProfileBased on this policy, in fiscal 2014, we paid an interim dividend of ¥10.00 yen

year of founding in September 2013, in addition to a regular year-end dividendof ¥10.00, combining to make a total year-end dividend of ¥15.00 per share. As

During fiscal 2014, we bought back 5,839 thousand shares worth ¥7,999 million
with the aim of stepping up the return of earnings to shareholders and enabling

The philosophy of the COMSYS Group is based on the three key management
pillars of sales and earnings growth, increased operation efficiency, and unification

Review ofOperations

flexible financial policies in response to changes in the business environment.

President’s
Messagea result, our total annual dividend for the term was ¥25.00 per share.

Five Integrated
Business
Groupsper share. We paid a commemorative dividend of ¥5.00 in celebration of our 10thof our business operations. Mindful always of these three concepts, the COMSYSTopicsGroup strives to enhance corporate value and win the trust and admiration of all
stakeholders through its performance, with the ultimate aim of becoming acompany that can deliver sustainable growth.

improving security and quality standards, strengthening corporate governance,

Corporate
GovernanceIn addition, the COMSYS Group will strive to implement measures such as

ensuring compliance, enhancing risk management and implementing the Group’s

We look forward to the ongoing understanding and support of all our stakeholders, as we endeavor to reach our goals.

Corporate Social
Responsibility(CSR)

code of conduct, while entrenching internal control systems.

September 2014

Financial
Statements

Hajime Takashima
President and Representative Director

Information
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8
Review of Operations

NTT Engineering Business
New Orders Received/Net Sales(Year Ended March 31, 2014)(Millions of yen)

BUSINESS DOMAINSn New orders received

58.8%

192,907n Net sales

58.5%

193,884

Operating Results Analysis and Forecast

In NTT access business, there has been an NTT access businessdecline in one-stop installation and construc-n NTT network businesstion services in response to orders from NTT,n NTT DOCOMO businessas well as in telephone pole upgrade projects due to the absence of bulk orders in
the previous fiscal year. In NTT network
business, there has been an increase in elec-

Respective Areas of Business Operations of Group
Companies

trical reception projects and other services.
In NTT DOCOMO business, there has been
an increase in various construction work,

Nippon COMSYSSANCOM GroupGroupn

TOSYS GroupTSUKEN Groupnn

COMSYS JOHOSYSTEM Group

including LTE (3.9 next-generation mobile
communications system) related projects.
Under these conditions, new orders
received in the fiscal year under review

Business Activities

decreased 3.2% year on year to ¥192,907

In the NTT Engineering segment, the Group is mainly engaged

million, while net sales increased 1.5% toin the construction of telecommunications infrastructure for the¥193,884 million. Going forward, we expect

NTT Group, including the installation of telephone lines and

NTT DOCOMO business to remain firm due

exchange equipment, and construction of wireless base stations.

to base station construction work accom-

This is the COMSYS Group’s core business and accounts for thepanying LTE network expansion, while welargest share of Group-wide sales.

anticipate downward trends in NTT access

To Contentsbusiness and NTT network business.

COMSYS Holdings Corporation
Annual Report 2014

9
ProfileNCC Engineering Business
Five Integrated
Business
GroupsNew Orders Received/Net Sales(Year Ended March 31, 2014)

President’s
Messagen39,151n Net sales

13.5%

44,728Operating Results Analysis and ForecastT elecommunications Facility Construction Business with
telecommunications carriers other than the NTT GroupIn the fiscal year under review, new orders
decreased 16.5% year on year to ¥39,151
million due to a downturn in SoftBank platiyear and a decline in KDDI landline-relatedorders. Net sales rose 9.2% to ¥44,728 million, due to the completion of projects
carried forward related to the SoftBank

TOSYS GroupTSUKEN GroupCOMSYS JOHOSYSTEM Groupn

expect construction work for the SoftBank
Group and KDDI Corporation’s (au) LTE

Business Activities
In the NCC Engineering segment, the Group undertakes con-Financial
Statements

networks to remain strong.

Corporate Social
Responsibility(CSR)

Group’s platinum band and KDDI Corporation’s (au) LTE networks. Going forward, we

Nippon COMSYSSANCOM GroupGroup

Corporate
Governancenum band bulk orders in the previous fiscal

Respective Areas of Business Operations of Group
Companies

TopicsBUSINESS DOMAINS

11.9%

Review ofOperations(Millions of yen)n New orders received

struction of telecommunication and other related facilities for
Information

telecommunications carriers other than the NTT Group.

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10
Review of Operations

IT Solutions Business
New Orders Received/Net Sales(Year Ended March 31, 2014)(Millions of yen)

BUSINESS DOMAINSn New orders received

16.1%

52,885n Net sales

15.8%

52,415

Operating Results Analysis and Forecast

Due to an increase in projects receivednNetwork Integration (NI) Solutionsn

System Integration (SI) SolutionsnS oftware development and contracted developmentn

Maintenancethrough alliances (system construction in
health care and education sectors, etc.) andan increase in Postal advanced NETWork(P-NET) orders assignments related to the
Ministry of Internal Affairs and Communications, new orders increased 4.7% year on
year to ¥52,885 million, while net sales

Respective Areas of Business Operations of Group
Companies

increased 7.1% to ¥52,415 million. Goingforward, we expect increases in both capital

Nippon COMSYSSANCOM Group
Group
n

n

TOSYS GroupTSUKEN GroupCOMSYS JOHOSYSTEM Group

n

n

n

investment and IT investment based on thegovernment’s ICT growth strategy and fromprivate-sector companies.

Business Activities
In the IT Solutions segment, the Group combines its accumulated
expertise with cutting-edge network technologies to provide comprehensive solutions services in the IT field, ranging from planningproposals regarding optimal systems integration for customers’
business operations to providing maintenance services.

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11ProfileSocial System-Related Business and Other
Five Integrated
Business
GroupsNew Orders Received/Net Sales(Year Ended March 31, 2014)

President’s
Message

43,037n Net sales

12.2%

40,313Operating Results Analysis and Forecast

In the fiscal year under review, new orders

Electrical facility constructionnCommunication cable box (C.C. Box) constructionnCivil engineering constructionn

Building construction and associated constructionnEnvironment and eco-solutionsnOthersincreased 10.7% year on year to ¥43,037
million, due to factors including the increasein solar power generation construction projects. Net sales rose 14.3% to ¥40,313 million.
Going forward, we expect a favorable business environment based on expectations for

Corporate
GovernancenTopicsBUSINESS DOMAINS

13.1%

Review ofOperations(Millions of yen)n New orders received

public sector investment as well as capital

Nippon COMSYSSANCOM GroupGroupn

TSUKEN Groupnn

COMSYS JOHOSYSTEM Group

anticipate orders related to the removal ofutility poles enabled by the laying of underground cables and the construction of
expressways, driven by the future holding of
the Tokyo Olympics and Paralympics.

Business Activities

Financial
Statementsn

TOSYS Groupinvestment in the private sector. We also

Corporate Social
Responsibility(CSR)

Respective Areas of Business Operations of Group
Companies

In the Social System-Related Business and Other segment, thefacilities for places such as public facilities and office buildings;
general civil engineering projects; the construction of office build-

Information

Group is engaged in the design and construction of electricalings, warehouses, factories, and disaster preparation facilities; assuch as solar power generation systems, energy conservation
solutions, and other urban infrastructure businesses.

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well as businesses related to the environment and eco-businesses,

12
TopicsNippon COMSYS makes Ecosystem
Japan into a subsidiary

Central Building Services made into awholly owned subsidiary through asimple share exchange

On May 5, 2014, Nippon COMSYS Corporation bought
approximately 82% of the issued shares of Ecosystem

On April 23, 2014, COMSYS Holdings Corporation con-Japan Co., Ltd., making the company into a subsidiary.

ducted a simple share exchange by which Central Building

Ecosystem Japan Co., Ltd. is a specialist in the busi-

Services Co., Ltd. became a wholly owned subsidiary ofness of selling and installing industrial- and home-use

Nippon COMSYS. On the same day, TSUKEN Act became

solar power systems. In particular, the company has beena subsidiary of the TSUKEN Group.

pioneering the popularization and development of stand-Central Building Services Co., Ltd. operates building

alone solar power systems for residences, and is themaintenance and security businesses from bases in theleading company in this sector.

cities of Kushiro and Sapporo in Hokkaido. Central Build-

By making the company into a subsidiary, Nippon

ing Services will pursue synergies with the TSUKEN GroupCOMSYS will produce synergies by effectively utilizing

in target regions and business sectors under an alliance.

their mutual management resources, and further advance

The TSUKEN Group is based primarily in Hokkaido andNippon COMSYS’ solar power business by extending it

does business with the NTT Group. Central Building

from mega-solar to small- and medium-sized industrial

Services and the TSUKEN Group will pursue a growth

and residential applications.

strategy by leveraging their strengths as a group.

Ecosystem Japan Co., Ltd.

Name:

Central Building Services Co., Ltd.

Head office:Akasaka, Minato-ku, Tokyo

Head office:Kushiro, Hokkaido

President andRepresentative Director:

Hiroshi Shirahige(Transfer from Nippon COMSYS
Corporation)

President and Representative
Director:

Masato Yoshimoto(Transfer from TSUKEN Corporation)

Paid-in capital:¥10 million

Paid-in capital:¥372 million

Net sales:¥500 million

Net sales:¥15.5 billion (Consolidated)

Established:

September 1973

Established:

May 1997

Number of employees:

26

Number of employees:

335 (Consolidated)

Name:

Ecosystem Japan Co., Ltd. possesses two wholly
owned subsidiaries: Solar Service Japan Co., Ltd. andSolar Power Japan Co., Ltd.

Ecosystem Japan Group
Ecosystem Japan Co., Ltd.
● Sales of solar power systems forhouses and peripheral equipment● Sales of small-scale industrial solar

power systems

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Solar Power Japan Co., Ltd.
● Sales, planning, andengineering for mega-solar
power systems

Solar Service Japan Co., Ltd.
● Construction of solar powersystems for houses● Construction of small-scaleindustrial solar power systems
Central Building Services head officeCOMSYS Holdings Corporation
Annual Report 201413
ProfileNippon COMSYS decided to construct the COMSYSThe COMSYS Group is engaged in the power business

Shinagawa Konan Building in Minato Ward in Tokyo with

with the aim of contributing to the regional society andthe aim of bringing together its various business bases

the global environment through the creation of green

spread over the Tokyo metropolitan area. The construc-energy. The Group’s third power station commenced

tion of this building was completed on March 28, 2014

operations on November 1, 2013. The Tsu Solar Power

with the cooperation of the local government and theStation (Sun Country Sakakibara Tsu) is the first solar

community. The building comprises two towers: eight

power station in western Japan. It has a total output ofapproximately 2,505 kW, and comprises 8,640 solar panels

2stories of parking space with total floor area of 10,540 m .

installed on idle land belonging to the Sakakibara Golf

The building is planned to be occupied by approxi-

Club in Tsu City in Mie Prefecture. It is anticipated thatmately 730 key personnel and to provide parking space

the power station will supply approximately 2.7 million

for approximately 300 vehicles. In response to a request

kWh per year of electric power, and it is expected tofrom Minato Ward, the office area has been designed toeffectively reduce CO2 emissions by 1,400 tons annually.

provide assistance after a disaster as a temporary facility

It uses solar panel stands designed and developed byfor people who can’t get home and as a warehouse for

the COMSYS Group itself.

disaster readiness supplies. If a disaster occurs, the(Reference)First power station: Hitachi Ota Solar Power Station A

provide stockpiled items as disaster countermeasures. In

site and B site (Sun Factory Hiyama station, located inthis way, it will contribute to the development of the

Hitachiota City)

community by offering refuge and accommodation to

Corporate
Governancebuilding will function as a temporary shelter and also

Topicsfloors of offices with total floor area of 8,872 m and eight

Review ofOperations

2

President’s
Message

The first development of mega-solar
business in western Japan

Five Integrated
Business
GroupsCompletion of COMSYS Shinagawa
Konan Building

Second power station: Showa Solar Power Station

Exterior of the COMSYS Shinagawa Konan Building

Tsu Solar Power Station (Sun Country Sakakibara Tsu)

Financial
Statements(“Sun Farm Sennen no Mori Showa Village”)

Corporate Social
Responsibility(CSR)

local people and people working in the area.

Information
To Contents

14
Corporate Governance

Basic Corporate Governance Philosophy

ensuring compliance, enhancing risk management,
implementing the Group’s code of conduct, and bol-

The philosophy of the COMSYS Group is based on thestering internal control systems based on the Compa-

three key management pillars of sales and earnings

nies Act and the Financial Instruments and Exchange

growth, increased operation efficiency, and unification

Act of Japan.

of our business operations. Mindful always of these three
concepts, the COMSYS Group strives to enhance cor-

Organizational Structure

porate value and win the trust and admiration of all
stakeholders through its performance.
The COMSYS Group makes all possible efforts to

Corporate governance at COMSYS Holdings Corpora-entrench measures such as improving security andtion (the “Company”) utilizes the Audit & Supervisory

quality standards, strengthening corporate governance,

Board system under the Japanese law, and has an

Diagram of the COMSYS Group’s business execution framework, management monitoring and internal control system

General Shareholders’ Meeting
Election /Dismissal

Election /Dismissal
Cooperation

Election /Dismissal

Audit & Supervisory Board
Cooperation

Audit

Board of Directors

Independent
Auditor

Audit

Internal Control and
Audit Department
Internal
Audit

President(Senior Management Committee)

Instruct /ReportExecutive
Department

Internal Audit /ReportElection /Dismissal / Supervise

Instruct /ReportVariousCommittees

Management
Monitoring

Deliberate /ReportDisseminate
Information

COMSYS Group
Presidents Committee

COMSYS GroupTo Contents

Nippon COMSYS Corporation, SANWA COMSYS Engineering Corporation, TOSYS Corporation, TSUKEN Corporation,
COMSYS JOHO SYSTEM Corporation, COMSYS Shared Services Corporation

COMSYS Holdings Corporation
Annual Report 201415
Profileand pass resolutions on issues related to key decisions,holders’ meeting, Board of Directors, Audit & Supervi-

in an effort to improve the efficiency of business execu-

sory Board and other organizations.

tion. The heads of each operating department andcertain other personnel attend meetings of the Senior

body with respect to management strategy, has decided

Management Committee as observers, as necessary, toto structure the Board around directors well versed inensure that they fully understand the basis for all man-the Company’s operations and outside directors who

agement decisions.
The term of office for directors is set at one year in orderwith the aim of enhancing management efficiency.

to clarify directors’ management responsibilities every fiscal

Meanwhile, the Company has reinforced auditing func-

year, and to flexibly structure an optimal management

tions by fully utilizing all Audit & Supervisory Board

team in step with changes in the business environment.

Members, including outside Audit & Supervisory Board
Members, in order to ensure and enhance corporate
governance and sound management.

Status of the Internal Control Systemof 12 directors. Based on internal rules governing the

The Company implements its internal control system

Board of Directors, the Board meets regularly and ad

based on a “Basic Policy on Establishing an Internal

hoc as necessary to discuss matters stipulated by laws

Control System” that has been approved by resolution

and regulations and to decide on important manage-of the Board of Directors in May 2006, as follows.

of their duties. In addition, four (as of June 27, 2014)

Establishing a Compliance Structure

Corporate
Governancement issues, and monitors each directors’ performance

Topics

As of June 27, 2014, the Board of Directors consisted

Audit & Supervisory Board Members, including outside

Review ofOperations

monitor management from an independent standpoint,

President’s
Message

The Board of Directors, the highest decision-making

Five Integrated
Business
Groupsorganizational structure consisting of a general share-

Audit & Supervisory Board Members, attend meetings
Based on its internal Compliance Program, the Company

issues related to business execution, and monitor thehas set forth Compliance Action Guidelines and has

directors’ performance of their duties.

established the Compliance Committee within the above

Every quarter, the directors responsible for eachframework.
This committee, which is chaired by the president, isprogress with business execution based on policies

made up of representatives from the Company and eachdetermined by the Board. Also, each business segmentof the core operating subsidiaries, as well as all Audit &conducts efficient operational management under theSupervisory Board Members. The committee oversees

supervision of the responsible director.

compliance throughout the COMSYS Group, and strives
to increase the COMSYS Group’s awareness of compli-

directors other than outside directors and the standing

ance and establish an effective compliance structure

Audit & Supervisory Board Member. In principle, thisthrough various discussions. All COMSYS Group com-

committee meets once a month to examine, discuss,panies have set up similar compliance committees ofInformation

The Senior Management Committee is made up of

Financial
Statements

business segment report to the Board of Directors on

Corporate Social
Responsibility(CSR)of the Board of Directors and express their views on

To Contents

16

their own. These committees work to establish an

Security Management Systems) and Privacy Mark certi-

effective compliance structure by implementing educa-

fications given the actual working environments. As ational and training programs, as part of efforts to deepen

result, the COMSYS Group acquires and maintains

employee understanding of the corporate philosophy

certificates of those systems.

and action guidelines of each respective COMSYS Group
company.

CSR Activities
Establishing a Risk Management
Structure

The Company and the COMSYS Group have established the CSR Committee to coordinate Group-wide
CSR activities with the aim of ensuring that the GroupIn its efforts to maintain and enhance corporate value

actively fulfills its economic and social responsibilities,

amid a rapidly changing business environment, theincluding social contribution activities, as a goodCOMSYS Group is aware that it faces a variety of busi-

corporate citizen.

ness risks which must be managed appropriately. There-

The CSR Committee is engaged in CSR activities

fore, the Group has established a Risk Management

addressing various themes, such as compliance, corpo-

Committee, chaired by the president and made up ofrate governance, risk management, information disclo-directors from the Company and each of the core

sure and protection, security countermeasures, social

operating subsidiaries.

contributions and environmental issues.

In August 2006, the Basic Policy on Risk Management
was formulated in order to promote Group-wide risk
management. Furthermore, similar risk management
committees were established at each Group company.

Establishing an Information Management
Structure

In this manner, efforts are being made to properly
address the business risks faced by each Group com-

Important documents related to business activities andpany, and to minimize the materialization of each risk.

the performance of directors’ duties, including minutes

The Company has formulated Risk Managementof the Board of Directors and Senior Management

Guidelines and Crisis Management Guidelines and will

Committee meetings and other reports, are stored andstrive to maintain sustainable operations and ensure

managed appropriately based on laws and regulations,steady growth at the Company and the COMSYS Group

as well as the Group’s internal rules.

by practicing effective risk management.

Furthermore, in order to improve the efficiency ofFor example, the COMSYS Group manages opera-

operations and business execution, after ensuring antional risk by ensuring that Group companies work in

adequate level of information security, the Company

accordance with management systems such as ISO 9001,

is working to deploy various information systems to

ISO 14001, COHSMS (Construction Occupational Healthput in place a framework for sharing the latest manage-and Safety Management Systems), ISMS (Information

ment information.

To Contents

17ProfileSystem to Eliminate Antisocial Forces
To fulfill our social responsibility as a company, theCompany and the COMSYS Group have absolutely noGroup are reported to and discussed by the Board ofrelationship with any antisocial forces or groups that

Directors and the Senior Management Committee in line

threaten the order and safety of civic society. Moreover,with Group Operation Standards, which clarify decision-

the Company and the COMSYS Group will maintain amaking and reporting rules for the COMSYS Group. In

resolute and uncompromising attitude in the face of any

this manner, the Group management and monitoring

attempts to form a coercive relationship.

framework is centered on the Company.

President’s
Message

Important management decisions within the COMSYSFive Integrated
Business
GroupsEstablishing a Group Management
Structure

The Company and the COMSYS Group have pre-lated regulations as regards internal reporting, andto block the formation of a relationship with any antiso-

established reporting liaison contacts both inside thecial forces or groups, and to maintain a resolute andcompany and at a law firm outside the Company. In thisuncompromising attitude while coordinating with law-manner, the Company has put in place a system to reportyers, the police, and other relevant authorities.

about and prevent such important matters as the possibil-

Topicspared an organizational framework that enables them

Review ofOperations

The Company and the COMSYS Group have formu-

ity of a violation of laws as regards organizations or
individuals through reporting by an employee.
In order to ensure that all COMSYS Group operations

Internal Auditing and Audit & 		Supervisory Board Members
The Company’s internal auditing organization consists

various Group committees established within the Com-of an Internal Audit Office and an Internal Control Officepany, including the CSR Committee, the Compliancewith a staff of 11 and 4 employees, respectively (as ofCommittee and the Risk Management Committee. In thisJune 27, 2014), within the Internal Control and Audit

way, the COMSYS Group ensures that all policies andDepartment.

decisions discussed by these groups are reported to andthoroughly understood by each Group company.

The Internal Audit Office formulates internal auditing
policies based on top management requirements, andconducts internal audits of the Company and all Group

Presidents Committee, which is made up of the presidents

companies. These activities are intended to ensure thatof COMSYS Group companies. This committee meets

each business risk faced by the Group is minimized,

regularly and works to ensure that management policies

while maximizing the quality of business operations. The

and activities are clearly understood by all members.

Internal Control Office formulates operational internal
provides leadership and effective evaluation as regards
entrenching internal control systems in the Company

Information

control policies as regards financial reporting, andFinancial
Statements

In addition, the Group has formed the COMSYS Group

Corporate Social
Responsibility(CSR)

operating subsidiary also participate as members in the

Corporate
Governanceare carried out appropriately, the directors of each core

and the COMSYS Group.
To Contents

18

The Audit & Supervisory Board has four members,

In accordance with audit plans formulated by thetwo of whom are outside Audit & Supervisory Board

Audit & Supervisory Board, the Audit & Supervisory

Members. No employees are specifically assigned to

Board Members of COMSYS Holdings regularly checkassist the Audit & Supervisory Board Members with their

to see whether business operations are executed appro-

activities. If such assistance is required, there is a struc-priately and efficiently by maintaining close ties with theture in place for addressing personnel issues such as

Internal Control and Audit Department and with thedetermining appointees and ensuring independenceGroup’s independent auditor. For example, the Audit &from directors. Audit & Supervisory Board Member

Supervisory Board Members accompany the indepen-

Hiroshi Komori has extensive experience in working in

dent auditor and others on on-site internal and financial

accounting-related departments of subsidiaries of theaudits as observers. The Audit & Supervisory Board

Company, and possesses considerable knowledge ofMembers of COMSYS Holdings also convene regularfinancial and accounting matters.

meetings with their counterparts at core COMSYS GroupIn addition, based on the rules governing the Audit

companies, and maintain close ties within the COMSYS& Supervisory Board Members, directors and employ-Group mainly by sharing information and exchanging

ees are required to report on major business activities

views, in order to improve the effectiveness of audits.

or issues that could affect the COMSYS Group’s operations or performance to the Audit & Supervisory Board.
Audit & Supervisory Board Members may request further information on the above mentioned reporting at any
time as necessary, as well as other required disclosures.
The Audit & Supervisory Board Members regularly
attend both regular and extraordinary meetings of theBoard of Directors as well as meetings of the Senior
Management Committee, the CSR Committee, theCompliance Committee and other important internal
committee meetings or discussions. This structure has
been established to allow the Audit & Supervisory Board
Members to verify the status of business execution ona regular basis and to express their views on thesematters. The Audit & Supervisory Board Members also
hold regular meetings with the president to directly
express their views on issues related to business execution and other topics.

To Contents

COMSYS Holdings Corporation
Annual Report 2014

ProfileCorporate Social Responsibility (CSR)

19

Basic Approach to CSR
information-rich society that coexists harmoniously withGroup is to build a reliable, safe and convenient com-

the global environment.
With the pride and purpose of being a top-brandthat connect every corner of society like clockwork.

group in the communications network construction

This is, simultaneously, our responsibility to society as

industry, we will conduct corporate business activities

a corporation.

directed at realizing a sustainable society through ICT. At
the same time, we aim to be an enterprise that develops

communications infrastructure while giving consider-

together with society while gaining the trust and fulfilling

ation to the environment and helping to create an

the expectations of the public.

Review ofOperations

Our mission is to build a high-quality, highly reliable

President’s
Messagemunications infrastructure and support the networks

Five Integrated
Business
GroupsIn this information-rich society, the role of the COMSYS

Relationship between management policies and CSR

TopicsManagement Policies

Strive to maximize synergies acrossthe COMSYS Group

Aim to be a knowledge-intensive
corporation by sharing know-how
through Group-wide IT systems

Radically review
backyard operations

Effectively utilize andreallocate internal­management resourcesin response to expansionof revenues from social
infrastructure-related
business

Promote greater efficiency
through reorganization ofsubsidiaries andconstruction bases, etc.

Helping to build a society where communications networks enrich interpersonal
relationships and ties between people and society at large

To Contents

CSR at the COMSYS Group

Information

Conduct corporate business activities directed at realizing a sustainable society through ICT

Financial
Statements

Create a new IT platform
for total managementfrom order receipt throughto project management
in response to an increasein small projects andrepeat projects

Corporate Social
Responsibility(CSR)

Structural reforms being promoted COMSYS WAY

Corporate
GovernanceFortify the COMSYS Group’s
dominant position as Japan’s No. 1
communications infrastructure
construction company

20
Financial Statements

Consolidated Balance Sheets
COMSYS Holdings Corporation and Consolidated Subsidiaries
As of March 31, 2013 and 2014
2013

Millions of yen
2014

Cash and cash equivalents �������������������������������������������������������������������������������������������������������������

¥ 23,651¥ 31,036

Notes and accounts receivable—trade ����������������������������������������������������������������������������������������

96,57997,667

Lease investment assets �����������������������������������������������������������������������������������������������������������������

2,752

2,999

ASSETS
Current assets:

Marketable securities ���������������������������������������������������������������������������������������������������������������������

59

0Accumulated cost of construction in progress �����������������������������������������������������������������������������

18,805

17,816Merchandise �����������������������������������������������������������������������������������������������������������������������������������

1,087

453

Materials and supplies �������������������������������������������������������������������������������������������������������������������

512

343

Deferred income taxes �������������������������������������������������������������������������������������������������������������������

3,842

4,092

Other current assets �����������������������������������������������������������������������������������������������������������������������

2,405

2,152

Less: Allowance for doubtful receivables �������������������������������������������������������������������������������������

(103)

(65)

Total current assets �������������������������������������������������������������������������������������������������������������������������

149,593

156,495

Buildings and structures �������������������������������������������������������������������������������������������������������������

47,34550,530Less: Accumulated depreciation �������������������������������������������������������������������������������������������

(23,259)(24,499)

Buildings and structures, net �������������������������������������������������������������������������������������������������

24,08526,030

Fixed assets:
Property and equipment:

Machinery, vehicles and equipment �����������������������������������������������������������������������������������������

18,00017,850Less: Accumulated depreciation �������������������������������������������������������������������������������������������

(13,186)(13,086)

Machinery, vehicles and equipment, net ������������������������������������������������������������������������������

4,813

4,763

Land ���������������������������������������������������������������������������������������������������������������������������������������������

38,32438,969Lease assets ���������������������������������������������������������������������������������������������������������������������������������

252

445

Less: Accumulated depreciation �������������������������������������������������������������������������������������������

(34)

(77)

Lease assets, net ���������������������������������������������������������������������������������������������������������������������

217

368

Construction in progress �����������������������������������������������������������������������������������������������������������

4

222

Total property and equipment ���������������������������������������������������������������������������������������������������

67,44470,353

Intangible assets �����������������������������������������������������������������������������������������������������������������������������

4,324

3,594

Investment securities �����������������������������������������������������������������������������������������������������������������

9,037

9,684

Long-term loans receivable �������������������������������������������������������������������������������������������������������

1,745

3,908

Prepaid pension cost �����������������������������������������������������������������������������������������������������������������

3,855

—

Net defined benefit asset �����������������������������������������������������������������������������������������������������������

—

2,422

Deferred income taxes ���������������������������������������������������������������������������������������������������������������

1,387

1,245

Other assets ���������������������������������������������������������������������������������������������������������������������������������

5,521

4,956

Less: Allowance for doubtful receivables ���������������������������������������������������������������������������������

(2,308)(2,098)Investments and other assets:

To Contents

Total investments and other assets �������������������������������������������������������������������������������������������

19,23920,117

Total fixed assets �����������������������������������������������������������������������������������������������������������������������������

91,00894,066

Total assets �����������������������������������������������������������������������������������������������������������������������������������������

¥240,602¥250,561

COMSYS Holdings Corporation
Annual Report 2014

21
ProfileAccounts payable—trade ���������������������������������������������������������������������������������������������������������������

¥ 44,456¥ 45,039

Short-term bank loans �������������������������������������������������������������������������������������������������������������������

1,660

1,270

Income taxes payable ���������������������������������������������������������������������������������������������������������������������

2,978

6,847

Advances received on construction in progress �������������������������������������������������������������������������

1,526

1,018

Allowance for warranty work on construction projects ���������������������������������������������������������������

155

184

Allowance for losses on construction contracts ���������������������������������������������������������������������������

52

379

LIABILITIESCurrent liabilities:

8,409

8,981

Total current liabilities ���������������������������������������������������������������������������������������������������������������������

59,23863,720

Deferred income taxes �������������������������������������������������������������������������������������������������������������������

457

428

Deferred tax liabilities for unrealized gains on land revaluation ������������������������������������������������

1,662

1,662

Accrued severance indemnities �����������������������������������������������������������������������������������������������������

5,077

—

Net defined benefit liability �����������������������������������������������������������������������������������������������������������

—

4,384

Allowance for directors’ retirement benefits �������������������������������������������������������������������������������

222

193

Other long-term liabilities �������������������������������������������������������������������������������������������������������������

532

756

Review ofOperations

Other current liabilities �������������������������������������������������������������������������������������������������������������������

President’s
Message

Millions of yen
2014

Five Integrated
Business
Groups2013

Long-term liabilities:

7,426
71,147

10,00010,000

Corporate
Governance

7,951
67,190TopicsTotal long-term liabilities ���������������������������������������������������������������������������������������������������������������
Total liabilities �����������������������������������������������������������������������������������������������������������������������������������NET ASSETS
Common stock �������������������������������������������������������������������������������������������������������������������������������

55,44055,494Retained earnings ���������������������������������������������������������������������������������������������������������������������������

134,747

148,713

Treasury stock, at cost ���������������������������������������������������������������������������������������������������������������������

(21,180)(28,658)

Total shareholders’ equity �������������������������������������������������������������������������������������������������������������

179,006

185,549

Accumulated other comprehensive income:
1,366

1,803

Unrealized gain (loss) on land revaluation �����������������������������������������������������������������������������������

(8,090)(8,090)Remeasurements of defined benefit plans �����������������������������������������������������������������������������������

—(1,028)

Total accumulated other comprehensive income �����������������������������������������������������������������������

(6,724)(7,315)

Subscription rights to shares ���������������������������������������������������������������������������������������������������������

497

478

631

701

Total net assets ���������������������������������������������������������������������������������������������������������������������������������

173,411

179,414

Total liabilities and net assets �������������������������������������������������������������������������������������������������������������

¥240,602¥250,561

To Contents

Minority interests �����������������������������������������������������������������������������������������������������������������������������

Information

Unrealized gain (loss) on other securities �������������������������������������������������������������������������������������

Financial
Statements

Additional paid-in capital ���������������������������������������������������������������������������������������������������������������

Corporate Social
Responsibility(CSR)

Shareholders’ equity:22

Consolidated Statements of Income
COMSYS Holdings Corporation and Consolidated Subsidiaries
Years ended March 31, 2013 and 2014
2013

Millions of yen
2014

Net sales �������������������������������������������������������������������������������������������������������������������������������������������������

¥316,092¥331,341

Cost of sales �������������������������������������������������������������������������������������������������������������������������������������������

274,865

285,571

Gross profits �����������������������������������������������������������������������������������������������������������������������������������������

41,22645,770

Selling, general and administrative expenses ���������������������������������������������������������������������������������

18,67918,200Operating income ���������������������������������������������������������������������������������������������������������������������������������

22,547

27,570

Other income:Interest income �����������������������������������������������������������������������������������������������������������������������������������

42

48

Dividend income ���������������������������������������������������������������������������������������������������������������������������������

173

164

Reversal of allowance for doubtful receivables �������������������������������������������������������������������������������

30

130

Rent income on noncurrent assets ���������������������������������������������������������������������������������������������������

120

107

Foreign exchange gains ���������������������������������������������������������������������������������������������������������������������

152—

Other ���������������������������������������������������������������������������������������������������������������������������������������������������

209

160

Total other income �����������������������������������������������������������������������������������������������������������������������������

729

611

Interest expenses �������������������������������������������������������������������������������������������������������������������������������

23

9

Commission for purchase of treasury stock �������������������������������������������������������������������������������������

11

22

Rent expenses �������������������������������������������������������������������������������������������������������������������������������������

33

30

Provision for allowance for doubtful receivables �����������������������������������������������������������������������������

260

21

Other ���������������������������������������������������������������������������������������������������������������������������������������������������

33

19

Other expenses:

Total other expenses �������������������������������������������������������������������������������������������������������������������������

362

103

Recurring profit �������������������������������������������������������������������������������������������������������������������������������������

22,91428,078Gain on sales of fixed assets �������������������������������������������������������������������������������������������������������������

4

35

Gain on negative goodwill �����������������������������������������������������������������������������������������������������������������

752—

Gain from reimbursement on investment �����������������������������������������������������������������������������������������

—

1,052

Gain on payback of insurance payments �����������������������������������������������������������������������������������������

74

198

Other ���������������������������������������������������������������������������������������������������������������������������������������������������

10

139

Total extraordinary income ���������������������������������������������������������������������������������������������������������������

841

1,426

Loss on sales of fixed assets �������������������������������������������������������������������������������������������������������������

34

64

Loss on disposal of fixed assets ��������������������������������������������������������������������������������������������������������

162

70

Write-down on investments in securities �����������������������������������������������������������������������������������������

58—

Loss on impairment of fixed assets ���������������������������������������������������������������������������������������������������

54

323

Business structure improvement expenses �������������������������������������������������������������������������������������

—

1,718

Special payments on employees’ retirement benefits �������������������������������������������������������������������

1,736

67

Other ���������������������������������������������������������������������������������������������������������������������������������������������������

617

181

Extraordinary income:Extraordinary loss:

Total extraordinary loss ���������������������������������������������������������������������������������������������������������������������

2,662

2,427

Income before income taxes and other adjustments to net income �������������������������������������������

21,09327,076

Current �������������������������������������������������������������������������������������������������������������������������������������������������

7,566

10,401

Deferred ���������������������������������������������������������������������������������������������������������������������������������������������

163

215

Total income taxes �����������������������������������������������������������������������������������������������������������������������������

7,729

10,617

Income before minority interests �������������������������������������������������������������������������������������������������������

13,363

16,459

Income taxes:
To Contents

Minority interests ���������������������������������������������������������������������������������������������������������������������������������

79

70

Net income ���������������������������������������������������������������������������������������������������������������������������������������������

¥ 13,284¥ 16,389

23
ProfileConsolidated Statements of Changes in Net Assets

Year ended March 31, 2013

Commonstock

Additional
paid-in capital

Retainedearnings

Balance at the end of the previous period¥10,000¥55,374¥123,611

Millions of yen
Shareholders’ equity
Total
Treasury stock,
Shareholders’at costequity¥(17,504)¥171,481

Cash dividends(2,504)(2,504)

Net income

13,284

13,284

Repurchase of treasury stock
Disposal of treasury stock65(4,001)

325

390

355

355

Net changes during the period except
for shareholders’ equity
Total changes during the period
Balance at the end of the period—

65

11,135(3,676)

7,525¥10,000¥55,440¥134,747¥(21,180)¥179,006

Balance at the end of
the previous period¥ 115¥(8,090)¥—¥(7,974)

Subscription
rights tosharesMinority
interests

Total net
assets¥430¥637¥164,574

Changes during the period:(2,504)

Net income

13,284

Repurchase of treasury stock(4,001)

Disposal of treasury stock390

Changes of scope of
consolidation

355

1,250

—

—

1,250

67

(5)

1,312

Total changes during
the period

1,250

—

—

1,250

67

(5)

8,837

Balance at the end of the period¥1,366¥(8,090)¥—¥(6,724)

¥497

¥631

¥173,411

Financial
Statements

Net changes during theperiod except forshareholders’ equity

Corporate Social
Responsibility(CSR)

Cash dividends

Corporate
GovernanceYear ended March 31, 2013

Unrealized
gain (loss) on
othersecurities

TopicsMillions of yen
Accumulated other comprehensive income
Unrealized
RemeasureTotal accumugain (loss) on
ments oflated otherlanddefinedcomprehenrevaluation
benefit plans
sive income

Review ofOperations

Changes of scope of consolidation(4,001)President’s
MessageChanges during the period:

Five Integrated
Business
GroupsCOMSYS Holdings Corporation and Consolidated Subsidiaries
Years ended March 31, 2013 and 2014

Information
To Contents

24Year ended March 31, 2014

Commonstock

Additional
paid-in capital

Retainedearnings

Balance at the end of the previous period¥10,000¥55,440¥134,747

Millions of yen
Shareholders’ equity
Total
Treasury stock,
Shareholders’at costequity¥(21,180)¥179,006

Changes during the period:
Cash dividends(2,423)(2,423)

Net income

16,38916,389Repurchase of treasury stock
Disposal of treasury stock

54

Changes of scope of consolidation(8,002)(8,002)

525

579

—

—

Net changes during the period except
for shareholders’ equity
Total changes during the period
Balance at the end of the period—

54

13,966(7,477)

6,542¥10,000¥55,494¥148,713¥(28,658)¥185,549
Millions of yen

Year ended March 31, 2014

Unrealized
gain (loss) on
othersecurities

Balance at the end of
the previous period¥1,366

Accumulated other comprehensive income
Unrealized
RemeasureTotal accumugain (loss) on
ments oflated otherlanddefinedcomprehenrevaluation
benefit plans
sive income¥(8,090)¥      —

¥(6,724)

Subscription
rights tosharesMinority
interests

Total net
assets¥497¥631¥173,411

Changes during the period:
Cash dividends(2,423)

Net income

16,389Repurchase of treasury stock(8,002)

Disposal of treasury stock

579

Changes of scope of
consolidation—

Net changes during theperiod except forshareholders’ equity

436

Total changes during
the period

436

Balance at the end of the period¥1,803(1,028)

(591)

(19)

70

(540)

—

(1,028)

(591)

(19)

70

6,002

¥(8,090)¥(1,028)¥(7,315)

¥478

¥701

¥179,414

To Contents

25
ProfileConsolidated Statements of Cash Flows

(195)
(34)
(4,013)294(2,504)(5)(31)(6,489)5(10,073)
33,454(390)—(8,025)378(2,423)(3)(48)(10,511)
0
7,445
23,46988¥ 23,469—¥ 30,915

To Contents—(5,244)(1,251)358(2,502)
557
(670)
1,247
(99)
(6,228)

Information

337(6,527)(1,561)
44
(379)
247
(74)
109
(32)
(7,554)

Financial
Statements

120
(7)
41
1,220

Corporate Social
Responsibility
(CSR)

253
(46)
73
—

Corporate
Governance¥ 27,076
4,426
323
—
(247)
(5,077)
4,398
(212)
9
(1,440)
1,793
601
(99)
(881)
—
(139)
30,532209(9)(6,546)24,185Topics¥ 21,093
4,486
54
58
218
(563)
—
(216)
23
(14,388)(2,592)
4,163
939
(777)
(752)
404
12,150219(22)(8,383)
3,963

Review ofOperations

Cash and cash equivalents received on interest and dividends income ���������������������������������������Cash and cash equivalents paid for interest expenses �������������������������������������������������������������������Cash and cash equivalents paid for income taxes ���������������������������������������������������������������������������
Net cash provided by operating activities ���������������������������������������������������������������������������������������Cash flows from investing activities:
Decrease in time deposits, net ���������������������������������������������������������������������������������������������������������
Payment for purchases of investment securities �����������������������������������������������������������������������������
Proceeds from sale of investment securities �����������������������������������������������������������������������������������
Collection of investments in capital �������������������������������������������������������������������������������������������������
Proceeds from acquisition of stocks of subsidiaries resulting in changes
in scope of consolidation �����������������������������������������������������������������������������������������������������������������
Acquisitions of property and equipment �����������������������������������������������������������������������������������������
Acquisitions of intangible fixed assets ���������������������������������������������������������������������������������������������
Proceeds from sale of property and equipment �����������������������������������������������������������������������������
Payments of loans receivable �����������������������������������������������������������������������������������������������������������
Collection of loans receivable �����������������������������������������������������������������������������������������������������������
Purchase of insurance funds �������������������������������������������������������������������������������������������������������������
Proceeds from cancellation of insurance funds �������������������������������������������������������������������������������
Other, net �������������������������������������������������������������������������������������������������������������������������������������������
Net cash used in investing activities �������������������������������������������������������������������������������������������������Cash flows from financing activities:
Decrease in short-term borrowings, net �������������������������������������������������������������������������������������������
Repayment of long-term debt �����������������������������������������������������������������������������������������������������������
Acquisitions of treasury stock �����������������������������������������������������������������������������������������������������������
Proceeds from sale of treasury stock �����������������������������������������������������������������������������������������������Cash dividends paid ���������������������������������������������������������������������������������������������������������������������������Cash dividends paid to minority shareholders ���������������������������������������������������������������������������������
Repayment of financial lease obligations �����������������������������������������������������������������������������������������
Net cash used in financing activities �������������������������������������������������������������������������������������������������
Effect of exchange rate changes on cash and cash equivalents �������������������������������������������������
Net increase (decrease) in cash and cash equivalents �������������������������������������������������������������������Cash and cash equivalents at beginning of year �����������������������������������������������������������������������������
Increase (decrease) in cash and cash equivalents resulting
from change of scope of consolidation �������������������������������������������������������������������������������������������Cash and cash equivalents at end of year�����������������������������������������������������������������������������������������

Millions of yen
2014

President’s
MessageCash flows from operating activities:
Income before income taxes and other adjustments to net income ���������������������������������������������
Depreciation and amortization ���������������������������������������������������������������������������������������������������������
Loss on impairment of fixed assets ���������������������������������������������������������������������������������������������������
Write-down of investments in securities �������������������������������������������������������������������������������������������
Increase (decrease) in allowance for doubtful receivables �������������������������������������������������������������
Decrease in accrued severance indemnities�������������������������������������������������������������������������������������
Increase in net defined benefit liability ���������������������������������������������������������������������������������������������
Interest and dividends received���������������������������������������������������������������������������������������������������������
Interest expenses���������������������������������������������������������������������������������������������������������������������������������
Increase in receivables—trade ����������������������������������������������������������������������������������������������������������
(Increase) decrease in inventories �����������������������������������������������������������������������������������������������������
Increase in payables—trade �������������������������������������������������������������������������������������������������������������
Decrease (increase) in other assets ���������������������������������������������������������������������������������������������������
Decrease in other liabilities ���������������������������������������������������������������������������������������������������������������
Gain on negative goodwill �����������������������������������������������������������������������������������������������������������������
Other, net �������������������������������������������������������������������������������������������������������������������������������������������

2013

Five Integrated
Business
GroupsCOMSYS Holdings Corporation and Consolidated Subsidiaries
Years ended March 31, 2013 and 2014

26
Ten-Year Summary of Business Results and Financial Data
Years ended March 31

Net Sales(Millions of yen)

400,000
293,681300,000

307,485

336,518

327,526

321,185

293,086

315,480

295,851

316,092

331,341

345,000

200,000
100,000
0

05

06

07

08

09

10

11

12

13

14

15

(Forecast)

Operating Income(Millions of yen)

30,00027,57025,00022,547
19,21320,00015,00029,00015,062

16,31816,29815,61012,54011,785

12,5921011

12

10,000
5,000
0

05

06

07

08

09

13

14

15

(Forecast)

Recurring Profit(Millions of yen)

30,00028,07825,00020,00017,14418,75329,50022,914

21,12018,22817,14415,00013,113

12,14012,96910,000
5,000
0

05

06

07

08

09

10

11

12

13

14

15

(Forecast)

Net Income/Primary Earnings per Share (EPS)(Millions of yen)

(Yen)

20,00018,00016,38915,00012,382

10,00010,030
8,349
58.42

87.39

69.65

11,641

13,284
10,062

83.87

75.60

To Contents

0

05

06

73.92

07

08

n Net Income (Left Scale) n Primary Earnings per Share (EPS) (Right Scale)

09

10

11

150
100

7,173
55.50

55.18

5,000

149.45106.82

9,543
7,097

136.08

200

12

50

13

14

15

(Forecast)027
ProfileTotal Assets

Five Integrated
Business
Groups(Millions of yen)

250,000

220,785

208,680

200,000

229,953

224,121220,651

07

08

09

237,436

250,561

240,602

228,135

211,809

150,000
100,000

President’s
Message

50,000
0

05

06

10

11

12

13

14

(Millions of yen)

(%)

200,000
150,000

150,417

147,005

137,160

128,062

151,775

66.5%

179,414

71.6%

71.1%

85
75

67.7%

63.4%

62.1%

61.4%

71.7%

173,41165
55

50,000005

n Net Assets (Left Scale)

06
n

07

08

09

10

11

12

13

14

Topics100,000

151,768
71.2%

68.4%

164,574

161,768

Review ofOperations

Net Assets/Shareholders’ Equity Ratio

45

Shareholders’ Equity Ratio (Right Scale)Corporate
Governance

Return on Equity (ROE)
(%)

10

9.4%
8.8%
7.9%

7.6%

7.9%

6.7%

Corporate Social
Responsibility
(CSR)

8

6.7%
6.1%

6
4.7%

4

05

06

07

08

09

4.4%

10

11

12

13

14

Financial
Statements

Dividends per Share/Acquisitions of Treasury Stock/Consolidated Payout Ratio(Yen)

15,000

25.00

25
20
15

15.00 *1

10

25.7%

15.00

21.5%

20.00

20.00

20.00

4,386
20.3%

5,544
26.5%

9,000

36.0%

36.2%

19.5%

12,000

20.00

5,250

27.1%
3,612

3,526

5,839

4,168
18.7%

18.4%

13

14

6,000
19.6%

3,000

998

05

06

07

08

n Interim Dividend (Left Scale) n Year-End Dividend (Left Scale)

09

10

11

n Acquisitions of Treasury Stock (Right Scale)*1: Includes a ¥3 commemorative dividend to mark the fifth anniversary of the Company’s establishment.
*2: Includes a ¥3 special dividend paid to reflect the benefits of the merger.

12nConsolidated Payout Ratio

15(Forecast)0

To Contents

0

17.00

17.00

5

20.00 *2

Information(Thousand shares)
30.00

30

28
Information

COMSYS Holdings Information
Corporate Data
As of March 31, 2014

Name:

COMSYS Holdings Corporation
Head Office:Corporate History
October 2010
Management integration of TSUKEN Corporation.

June 2009

17-1, Higashigotanda 2-chome, Shinagawa-ku,
Tokyo 141-8647, Japan

Minimum share purchase unit reduced from 1,000 shares to
100 shares.

URL:

April 2009http://www.comsys-hd.co.jp/english/
September 29, 2003

The information systems business related to software development outsourcing was spun off from Nippon COMSYS
Corporation to form COMSYS JOHO SYSTEM Corporation.

Paid-In Capital:

April 2007

Date of Establishment:¥10 billion
Number of Employees:

9,625 (Consolidated)

Directors and Audit & Supervisory Board Members
As of June 27, 2014

President and Representative Director

COMSYS Holdings Corporation converted COMSYS Shared
Services Corporation, previously a consolidated subsidiary of
Nippon COMSYS Corporation, into a wholly owned subsidiary inorder to clarify its role as a common provider of business process
outsourcing services for the COMSYS Group.

October 2005

Noriaki ItohCOMSYS Holdings Corporation converted Kokusai DensetsuCo., Ltd. (now COMSYS WING Corporation) into a wholly owned
subsidiary through a stock exchange, and made Kokusai
Densetsu a wholly owned subsidiary of Nippon COMSYS
Corporation on the same day.

Hirofumi Yamasaki

April 2005

Hajime Takashima
Directors(President and Representative Director of Nippon COMSYS Corporation)(President and Representative Director of SANWA COMSYS Engineering
Corporation)

Akio Ogawa

SANWA ELEC Co., Ltd. was renamed SANWA COMSYSEngineering Corporation.

(President and Representative Director of TOSYS Corporation)

January 2005

Hidetoshi Miura

The NTT Information Telecommunication Engineering Businessof SANWA ELEC Co., Ltd. was centralized at Nippon COMSYS
Corporation.

(President and Representative Director of TSUKEN Corporation)

Masaru Kudo

(President and Representative Director of COMSYS JOHO SYSTEM
Corporation)

Yoshihiro Mimata
Tomoaki Yamamoto
Tsuyoshi Nishiyama
Hitoshi Kumagai

September 2004
COMSYS Holdings Corporation subscribed to a third-party
allotment of shares of SANWA ELEC Co., Ltd.

September 2003

Takeshi Gotoh*1

COMSYS Holdings Corporation listed its shares on the firstsections of the Tokyo Stock Exchange and Osaka Securities
Exchange.

Audit & Supervisory Board Members

September 2003

Shigemi Sakamoto

Hiroshi Komori

Nippon COMSYS Corporation delisted its shares in line with theestablishment of the holding company.

Hideki Niimi

March 2002

(Standing)Masahiko Miyashita*2
Takaharu Saegusa*2
To Contents*1 Outside Director*2 Outside Audit & Supervisory Board Member( ): Concurrent positions held

Nippon COMSYS Corporation was selected as one of the 225
components of the Nikkei Stock Average.

December 2001
Nippon COMSYS Corporation celebrated its 50th founding
anniversary.

July 1990
The Company was renamed Nippon COMSYS Corporation.

COMSYS Holdings Corporation
Annual Report 2014

29
ProfileOrganization Chart
As of June 27, 2014

Five Integrated
Business
GroupsBoard of Directors
President

Audit & Supervisory Board

Senior Management Committee

Compliance Committee

President’s
Message

CSR Committee

Risk Management Committee

Corporate Planning
Department

IR Department

Finance & Accounting
Department

General Affairs
Department• General Affairs Unit
• Legal Unit
• PR Unit• CSR OfficeInternal Control and
Audit Department• Internal Control Office• Internal Audit Office

Asahikawa

Kitami
KushiroOtaru

Hokkaido

Muroran
Hakodate

ObihiroTohokuSendai

Niigata

Financial
Statements

NIIGATANAGANO

NaganoUeda/Saku/Chushin/Nanshin

Corporate Social
Responsibility(CSR)

Tomakomai

Kanto Naka

Hokuriku

Corporate
Governance

Wakkanai

Topics• Corporate Planning Unit
• Corporate Strategy Unit
• Strategy Planning Unit
• Corporate Information Unit

Personnel
Department

Review ofOperations

Personal Information Protection
and Administration Committee

TOKYO

Chugoku
Shizuoka
Kansai
Nishi Nippon
ShikokuTokaiHead Office/COMSYS Holdings Corporation
Head Office/Nippon COMSYS Corporation
Head Office/SANWA COMSYS Engineering Corporation

Branch/Nippon COMSYS Corporation
Branch/SANWA COMSYS Engineering Corporation
Branch/TOSYS Corporation
Branch/TSUKEN Corporation
Branch/COMSYS JOHO SYSTEM Corporation

To Contents

Head Office/TOSYS Corporation
Head Office/TSUKEN Corporation
Head Office/COMSYS JOHO SYSTEM Corporation

Okinawa

Information

Kyushu30

Investor Information
Fiscal Year-End:
March 31, 2014

Major Shareholders:
As of March 31, 2014
Shares Held(Thousands)

Percentage
of Total (%)

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

13,498

9.24

Japan Trustee Services Bank, Ltd. (Trust Account)

10,205

6.99

Japan Trustee Services Bank, Ltd.
(The Sumitomo Trust & Banking Co., Ltd. Retrust
Account, Sumitomo Electric Industries, Ltd.
Employee Pension Trust Account)

5,166

3.53

BNP Paribas Securities, Ltd.

3,310

2.26

Nippon Life Insurance Company

2,784

1.90

Trust & Custody Services Bank, Ltd.
(Investment Trust Account)

2,528

1.73

COMSYS Holdings Corporation Employee
Shareholder Association

1,564

1.07

Meiji Yasuda Life Insurance Company

1,544

1.05

MLI EFG NON TREATY CUSTODY ACOUNT

1,448

0.99

Transfer Agent:
Mitsubishi UFJ Trust and Banking Corporation
Securities Department
10-11, Higashisuna 7-chome, Koto-ku, Tokyo 137-8081,
Japan

NEC Corporation

1,408

0.96

Auditor:GYOSEI & CO.

As of March 31, 2014

Annual Shareholders’ Meeting:June 27, 2014
Common Stock:
Authorized: 580,000,000 shares
Issued: 145,977,886 shares
Number of Shareholders:
9,051
Date of Listing:
September 2003
Stock Exchange Listings:
First Section of the Tokyo Stock Exchange(Securities code: 1721)

Shareholders

Composition of Shareholders:For Further Information on This Annual Report,
Please Contact:
IR Department
Tel: +81-3-3448-7000 (direct)
Fax: +81-3-3448-7001
E-Mail: chd-ir@comsys.co.jp

Stock Price Range / Monthly Trading Volume

To Contents(Yen)(Thousands of Shares)

1,800

60,0001,500

50,0001,200

40,000900

30,000600

20,000300

10,0000012/4 12/5 12/6 12/7 12/8 12/9 12/10 12/11 12/12 13/1 13/2 13/3 13/4 13/5 13/6 13/7 13/8 13/9 13/10 13/11 13/12 14/1 14/2 14/3 (Month)n n Stock Price (Left Scale)   n Monthly Trading Volume (Right Scale)n Securities Companies

5.5%

n Financial Institutions

35.0%

n Domestic Companies

6.8%

n Foreign Companies
and Individuals

23.5%

n Individuals and Others

29.2%