Annual Report 2009
Fiscal Year Ended March 31, 2009COMSYS Holdings Corporation

Profile
COMSYS Holdings Corporation was established as the holding company of the COMSYS Group on September 29, 2003 through sharetransfers from three companies—Nippon COMSYS Corporation,
SANWA ELEC Co., Ltd. (currently SANWA COMSYS Engineering­Corporation) and TOSYS Corporation. As of March 31, 2009, the
COMSYS Group was made up of these 3 companies and 44 other subsidiaries, as well as 9 affiliates. The COMSYS Group’s main businesses
are electrical and telecommunications infrastructure construction
services, which mainly involve the construction of telecommunications infrastructure and electrical facilities, and other businesses,
such as the information p­ rocessing-related business.

The COMSYS Group’s Management Vision
The COMSYS Group’s management vision is to achieve the following
three objectives:
1. Make COMSYS the top one-stop solutions brand
2.	Earn recognition as the “company of first choice” by all stakeholders
3. Deliver sustained sales and earnings growth as a group

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 other statements that are not historical facts areforward-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 are offered in highly competitive markets characterized by continual new product introductions and rapid developments in technology.

Annual Report 2009

Contents
Our Group Formation2

Consolidated Financial Highlights

4

Operating Companies

8

Aiming for Growth

10

Letter to Our Shareholders

12

Business at a Glance

18

Review of Operations

20

NTT Information Telecommunication Engineering Business

20

Electrical Communications Engineering Business24

IT Solutions Business28

Social System-Related Business and Other

32

Corporate Governance36

Directors and Officers

50

Financial Section

51

COMSYS Holdings Information

95

Investor Information

97

Index

98

1

2

COMSYS Holdings Corporation

Our Group Formation
The COMSYS Group’s (COMSYS Holdings and subsidiaries
and afﬁliates) main businesses comprise electrical andtelecommunications infrastructure construction services
centered on telecommunications infrastructure andSANWA COMSYSEngineering Corporation
Address:
12-3, Kouenji-Minami 2-chome, Suginami-ku,
Tokyo 166-0003, Japan
Establishment: September 1947

Nippon COMSYS Corporation

Address:
23-14, Takanawa 3-chome, Minato-ku,
Tokyo 108-0074, Japan
Establishment: December 1951

TOSYS Corporation

Address:
1108-5, Higashiyama Aza, Watauchi, Wakaho,
Nagano, Nagano 381-0193, Japan
Establishment: January 1960

Annual Report 2009

Our Group Formationelectrical facilities, and other businesses, including theinformation processing related business. As of March 2009,
the Group was comprised of 32 consolidated subsidiaries.

As of March 31, 2009

Number of Employees:
Consolidated
1,578
Non-consolidated
842
URL:
http://www.sancom-eng.co.jp/
Number ofConsolidated Subsidiaries:
5 companies

Consolidated Subsidiaries:

Number of Employees:
Consolidated
5,329
Non-consolidated
3,359
URL:
http://www.comsys.co.jp/
Number ofConsolidated Subsidiaries:
16 companies

Consolidated Subsidiaries:

Number of Employees:
Consolidated
1,138
Non-consolidated776
URL:
http://www.tosys.co.jp/
Number ofConsolidated Subsidiaries:
7 companies

Consolidated Subsidiaries:

SANWA Denshi Inc.
SEC Hi Tec Co., Ltd.
SUNCOM Technology Corporation
Road-Techno Co., Ltd.
Sannect Co., Ltd.

Tokushima Tsushinkensetsu Co., Ltd.
Tokyo Tsuken Co., Ltd.
Tsushin Densetsu Co., Ltd.
Nitto Tsuken Co., Ltd.
Nihonkai Tsushinkensetsu Co., Ltd.
COMSYS Engineering Co., LtdCOMSYS Techno Co., Ltd.
COMSYS ADVANCE Corporation
COMSYS Net Corporation
COMSYS WING Corporation
COMSYS Tohoku Techno Co., Ltd.
COMSYS E TIQ Co., Ltd.
COMSYS Kansai Engineering Co., Ltd. COMSYS Tsusan Co., Ltd.
COMSYS Kyushu Engineering Co., Ltd. Taiei Seisakusho Co., Ltd.

TOSYS Nagano Co., Ltd.
Alstar Co., Ltd.
TOSYS Niigata Co., Ltd.
TOSYS Actis Co., Ltd.
Tulip Keibi Co., Ltd.
Tulip Life Co., Ltd.
Yoshimoto Kensetsu Co., Ltd.

Notes: 1.	On April 1, 2009, COMSYS Holdings Corporation converted COMSYS JOHO SYSTEM Corporation, which was newly establishedthrough a spin-off from Nippon COMSYS Corporation on the same day, into a wholly owned subsidiary.
2.	On April 1, 2009, COMSYS Techno Co., Ltd., previously a consolidated subsidiary of Nippon COMSYS Corporation, was converted
into a wholly owned subsidiary of COMSYS JOHO SYSTEM Corporation.

3

4

COMSYS Holdings Corporation

Consolidated Financial Highlights

2005

For the Year:
New orders received during the year
NTT Information Telecommunication Engineering BusinessElectrical Communications Engineering Business
IT Solutions BusinessSocial System-Related Business and Other
Net sales
NTT Information Telecommunication Engineering BusinessElectrical Communications Engineering Business
IT Solutions BusinessSocial System-Related Business and Other
Operating income
Net income
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities¥287,376
167,551
68,162
28,03923,624
293,681
166,680
73,497
27,61725,887
15,062
8,349
14,735(4,831)(7,426)

At Year-end:
Total assets
Cash and cash equivalents
Total shareholders’ equity
Interest-bearing debt

¥208,681
35,287
128,063
4,692

Common Stock Issued

145,977

Per Share of Common Stock:
Net income—Basic—Diluted
Cash dividends
Shareholders’ equity¥ 58.42–
15.00
906.92

Number of employees

6,746

Notes: 1. For convenience only, the accompanying Japanese yen figures for 2009 have been translated into U.S. dollars at the rate of ¥98.23 to
2. Consolidated results for fiscal 2005 include 15 months of operating results at a consolidated subsidiary of Nippon COMSYS due to a

Annual Report 2009

Consolidated Financial Highlights

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
2006

2007

2008

2009

2009

¥310,005
187,977
70,28233,01918,727
307,485
184,118
72,16930,702
20,496
16,31910,031¥334,172
203,131
75,26037,22018,561
336,519
200,693
77,82037,855
20,151
19,214
12,382¥331,920
188,901
85,28838,656
19,075327,527
182,534
81,766
41,377
21,850
16,29911,641¥320,462
177,02180,195
43,525
19,721
321,186
179,768
77,42542,522
21,471
15,611
10,063$3,262,364
1,802,107
816,400
443,093
200,764
3,269,734
1,830,072
788,201
432,882
218,579
158,923
102,443

9,128(5,139)(3,631)

18,576(5,525)(6,610)1,034(11,118)(8,315)

19,640(6,502)(7,732)

199,939(66,192)(78,713)¥220,786
35,814
137,1613,608¥229,953
42,458145,786451¥224,122
24,294
149,15271¥220,651
29,877150,829
164$2,246,269
304,154
1,535,467
1,670

145,977

145,977

145,977

145,977Yen¥ 69.65
69.62
15.00
964.707,081

U.S. Dollars (Note 1)

¥

87.39
87.37
17.00
1,033.87

¥

83.87
83.87
17.00
1,091.83

7,574

US$1, the rate prevailing on 31st March, 2009.
change in the fiscal year-end (from 31st December to 31st March).

8,173

¥

75.60
75.60
20.00
1,151.81
8,203

$

0.77
0.77
0.20
11.73

5

6

COMSYS Holdings Corporation

Consolidated Financial Highlights

New Orders Received/Net Sales

Operating Income/Net Income(Millions of yen)
400,000(Millions of yen)
20,000300,000

15,000200,000

10,000100,000

5,000

0

05

06

07

08

09

0

05

New Orders Received

Operating Income

Net Sales

Net Income

06

07

08

Capital Expenditure/Depreciation
and Amortization

Total Assets/Total Shareholders’Equity(Millions of yen)
10,000(Millions of yen)
250,000

09

200,000

7,500

150,000
5,000
100,000
2,500

050,000

05

06

07

08

09

0

05

06

Capital Expenditure

Total Assets

Depreciation and Amortization

Total Shareholders’ Equity

07

08

09

Annual Report 2009

Consolidated Financial Highlights

Interest-bearing Debt

Cash Dividends per Share/
Payout Ratio(Millions of yen)
5,000(Yen)

4,000

20

(%)
40

15

30

10

20

5

10

3,000

2,000

1,000

0

05

06

07

08

09

0

05

06

Cash Dividends per Share
Payout Ratio

07

08

09

0

7

8

COMSYS Holdings Corporation

Operating Companies
Composition of Sales (Year Ended 31st March, 2009)(%)

Nippon COMSYS
Corporation

TOSYS Corporation

8.9%

69.1%

SANWA COMSYSEngineering
Corporation

22.0%

Nippon COMSYS Corporation
Millions of yen

2005/3

2006/3

2007/3

2008/3

2009/3

New orders received during the year

226,225

238,046

252,147

242,139

230,561

Net sales

227,548

236,177

257,269

236,743

234,300

Operating income

13,535

14,423

15,575

12,222

12,010Recurring profit

15,631

16,694

17,462

14,12013,603

Net income

9,299

9,053

9,684

8,881

8,013

Total assets

184,145

194,934

205,712203,418

204,923

Shareholders’ equity

124,240

131,520

138,916

144,921

148,398

Annual Report 2009

Operating Companies

SANWA COMSYS Engineering Corporation
Millions of yen

2005/3

2006/3

2007/3

2008/3

2009/3—56,63865,65373,99178,47344,22057,02963,70373,51774,783Operating income

497

1,317

2,750

3,666

3,762

Recurring profit

423

1,331

2,764

3,678

3,769

Net income (loss)(2,583)

598

1,801

2,493

2,242

Total assets

24,441

31,63427,74534,86934,751

Shareholders’ equity

5,196

5,612

7,112

9,341

11,325

New orders received during the year
Net sales

TOSYS Corporation
Millions of yen

2005/3

2006/3

2007/3

2008/3

2009/3

New orders received during the year

28,37329,12830,65531,62429,539Net sales

27,874

28,34729,531

32,88530,148Operating income

970

554

885

439

494

Recurring profit

1,085

635

958

482

537

Net income

517

226

415

194

200

Total assets

16,772

15,483

17,718

17,116

15,872

Shareholders’ equity

7,769

7,904

8,221

8,255

8,341

9

10

COMSYS Holdings Corporation

Aiming for Growth
Expanding the NCC (New Common Carrier) BusinessWe aim to expand market share by steadilybuilding up a track record with the KDDI
Group as a primary partner, targeting net
sales of ¥47.1 billion in the fiscal year
ending March 31, 2010.
This will be accomplished by actively
driving expansion in certain wirelessdevice projects that we gained permission to join in the previous fiscal year,
as well as by developing the digital terrestrial broadcasting migration businesson a full scale.

NCC Business Net Sales Forecast(Unit: ¥100 million)
600

442

411
332

471
Others300

Mobile0Mar. 2007

Mar. 2008

Mar. 2009

Results

Mar. 2010(Targets)

Expanding Carrier-Related Adjacent Businesses
NTT Adjacent BusinessThis business seeks to boost net sales to¥8.5 billion in the fiscal year ending
March 31, 2010 by growing the Home
Network (HNW) business, agency sales
business, maintenance services and engineering services.
DOCOMO Adjacent BusinessThis business aims to increase net sales to¥7.0 billion in the fiscal year ending March
31, 2010 by expanding field research

NTT Adjacent Business(Unit: ¥100 million)
100
80
60

60

70

85

40
20
0

Mar. 2009
Targets

Mar. 2009
Results

Mar. 2010
Targets

Annual Report 2009

Aiming for Growth

operations and the IP business, as well
as repair and maintenance services andinfrastructure-related adjacent businesses.

DOCOMO Adjacent Business(Unit: ¥100 million)
100
80

NCC Adjacent BusinessThis business aims to lift net sales to ¥2.7
billion in the fiscal year ending March 31,
2010 by developing management andoperation systems, offering maintenanceservices, expanding operations in new
fields and winning new customers.

70

65

50

60
40
20
0

Mar. 2009
Targets

Mar. 2009
Results

Mar. 2010
Targets

NCC Adjacent Business(Unit: ¥100 million)
40

27

30

20

20

Mar. 2009
Targets

Mar. 2009
Results20
10
0Mar. 2010
Targets

Expanding the IT Business
Net Sales by Segment
100% growth

Seeking synergistic
effects between
technologies inwhich we are particularly strong andbusiness knowhow to expand

10%Ex
inf panor dima ng
tio thn b e fi
us nanine ci
ss al

20%

14%
13%
13%
20%
40%

15%

45%
Expanding themobile services
business

FY March 2009
Performance
Telecommunications
Finance
Other

Targets

Technologies in which we are particularly well versed
20%

10%

¥10.6 billion
Technologies in which we areparticularly well versed
10%Over the next three years through thefiscal year ending March 31, 2012, we aim
to double sales from the IT Business by
expanding the mobile services businessin the telecommunications field as wellas the financial information systems business. Business know-how will be combined with technologies where we areparticularly strong, such as intra-marttechnology, platform infrastructure technology and business intelligence technology to generate synergies leading toincreased net sales.

FY March 2012

Construction
Government organizations
and medical

11

12

COMSYS Holdings Corporation

Letter to Our Shareholders

Hajime Takashima
President and Representative Director

Strategic Upfront Investments Made in a Highly
Competitive Environment
In fiscal 2009, the year ended March 31, 2009, the
COMSYS Group faced seismic shifts in its businessenvironment. In particular, the intensifying global
financial crisis has had a major impact on the current
status of the economy.
Japan’s information and communications market
saw rapid advancement in broadband and ubiquitous
infrastructure. For example, in the fixed-line communications field, the total number of subscriptions
for broadband services surpassed 30 million. In themobile communications field, infrastructure development aimed at the introduction of next-generation

Annual Report 2009

Letter to Our Shareholders

Special Feature:high-speed wireless communications such as WiMAX
proceeded apace, along with increased packet communication speeds and expanded service areas. On
the other hand, service and price competition amongcommunications carriers has intensified, resulting ineven stronger cost-cutting pressure on the telecommunications infrastructure construction industry,including the COMSYS Group.
In this challenging business environment, the
COMSYS Group worked hard in fiscal 2009 to drive
through business reforms focused on three themes—
prioritize businesses, expand operations, and boost
productivity—with the goal of realizing the COMSYSGroup’s management vision. However, the COMSYSGroup’s performance was by no means immune to
the worsening status of the economy, and werecorded lower net sales and earnings comparedwith the previous fiscal year.
Making Investment Benefits Visible
in a Deteriorating Business Environment
The year-on-year drop in earnings for fiscal 2009reflects, in addition to the aforementioned reason,

13

14

COMSYS Holdings Corporation

Letter to Our Shareholders

upfront strategic investments that were made toenhance profitability. In fiscal 2010, the businessenvironment faced by the COMSYS Group is expected
to become increasingly challenging, particularly as
corporate IT investment weakens further.
The COMSYS Group has continuously implemented business reforms based on programs suchas COMSYS-style kaizen (improvement) and the­Innovation 2010 drive, to shape our company to succeed in a highly competitive environment. In addition, we have now developed Group Innovation 2010,
a new program based on 11 measures. These include
driving growth in net sales and earnings, enhancing
operational efficiency, facilitating personnel transfers
and introducing flexible personnel systems. With thisframework, we expect to generate even more synergies throughout the COMSYS Group.
In the difficult business environment that lies
ahead, our growth scenario is to advance to a stage
where the benefits of past investments start tomaterialize and the level of earnings gradually
improves, so that the entire COMSYS Group can reapa “year of harvest.”

Annual Report 2009

Letter to Our Shareholders

In April 2009, the information systems businessof Nippon COMSYS Corporation was spun off into a
newly established wholly owned subsidiary of theCompany called COMSYS JOHO SYSTEM Corporation.
With this move, we will integrate and unify information systems businesses throughout the group todrive further expansion and advancement in theinformation systems business for the COMSYSGroup as a whole.
Meeting Shareholder Expectations By Actively
Returning Earnings
COMSYS Holdings views returning earnings toshareholders as an important management priority.
Our basic policy is to pay steady and continuous

15

16

COMSYS Holdings Corporation

Letter to Our Shareholders

dividends linked to performance. Based on thispolicy, in fiscal 2009 we paid an interim dividend of¥10 per share, including a commemorative dividendof ¥3 per share to mark our fifth founding anniversary in September 2008 and express our appreciation for the support of our shareholders. Together
with a year-end dividend of ¥10 per share, we paida total annual dividend of ¥20 per share. For fiscal
2010, we plan to pay a total annual dividend of ¥20
per share, the same level as fiscal 2009, as our performance is expected to remain largely on a parwith the fiscal year under review.
We are also actively buying back our own
shares. During fiscal 2009, we bought back roughly
5,544 thousand shares worth ¥4,999 million. In
fiscal 2010, we plan to additionally buy back up
to ¥5.0 billion of our own shares to step up thereturn of earnings to shareholders and to enable
flexible financial policies in response to changes inthe business environment.

Annual Report 2009

Letter to Our Shareholders

Status of Treasury Stock Acquisition

This fiscal year’splanned acquisitions
7.5 million shares maximum¥5.0 billion maximum

15,027thousand shares

9,370

thousand shares

Newly issued portion
5,544 thousand shares(Approximately ¥5.0 billion)

Newly issued portion
4,386 thousand shares(Approximately ¥5.0 billion)

Mar. 2008

15,027thousand shares(Approximately¥14.4 billion)

Mar. 2009

Mar. 2010

Going forward, the COMSYS Group is determined
to drive further growth by steadily advancing business reforms and quality enhancements no matter
how challenging the operating environment. We
invite you to expect the very best from the COMSYSGroup in the years to come.
September 2009

Hajime Takashima
President and Representative Director

17

18

COMSYS Holdings Corporation

Business at a Glance

Main Business

NTT Information
Telecommunication
Engineering
Business

This segment is mainly engaged in the constructionof telecommunications infrastructure for the NTT
Group, including the laying and installation of telephone lines, installation of exchange equipment,
and construction of wireless base stations. The segment is the COMSYS Group’s core business, andaccounts for the largest share of Group-wide sales.

ElectricalCommunications
Engineering
Business

This segment constructs telecommunications andrelated facilities for communication carriers otherthan the NTT Group. It also provides a wide range ofservices for general customers, including the designand construction of electrical facilities for offices
and other commercial buildings, public facilities,
plants, condominiums and residential houses.

IT Solutions
Business

This segment combines extensive expertise with
cutting-edge network technologies to provide acomprehensive solutions service, ranging fromdeveloping optimal systems integration services
plans optimized for customers’ businesses to providing maintenance services.

SocialSystem-Related
Business and OtherThis segment is engaged in the construction ofbuildings and public facilities, civil engineering
works, and security systems, as well as the construction of environmental systems such as wind
power and co-generation systems. It is also closely
involved in expressway operations and supporting air traffic control systems.

Annual Report 2009

Business at a Glance

Respective Areas of Business­Operations of Group Companies
New Orders Received / Net Sales(Years Ended 31st March, 2009)(Millions of yen)n New orders received 55.2% 177,021
n Net sales
56.0% 179,768(Millions of yen)n New orders received 25.0%
n Net sales
24.1%

80,19577,425(Millions of yen)n New orders received 13.6%
n Net sales
13.2%

43,52542,522(Millions of yen)n New orders received
n Net sales

6.2%
6.7%

19,721
21,471

NipponCOMSYS Group•SANCOMGroup

TOSYS Group•

Business Domains• Cable works• Communication related
civil engineering works• Switching works• Transmission wirelessworks• Mobile communications
works

• • •

• Telecommunications­facilities for NCC• Mobile communications
constructions for NCC• General electrical facilities
works• Construction of multi-use
underground cableconduit facilities (C·C·BOX)• • •• Network integrationrelated solutions• System integrationrelated solutions• Development andcommissioning of all
types of software• Maintenance andoperation• • •• General civil engineeringworks• Building construction andancillary facilities works• Environmental solutions

19

20

COMSYS Holdings Corporation

Review of Operations

NTT Information
Telecommunication
Engineering BusinessWorking to strengthen competitivenessand expand business domains
in a challenging business climate
Net Sales(Millions of yen)
250,000

200,000

150,000

100,000

Mobile communications system tower
50,000

0

05

06

07

08

09

Annual Report 2009

Review of Operations

Installation of micro antennaMarket Conditions
In the fixed-line communications market, the total
number of subscriptions for broadband services surpassed 30 million, driven in part by the commercial
launch of services over the next generation network(NGN) promoted by NTT Corporation. Expansion in
the NGN-related market is widely anticipated given
the introduction of a wide range of new services
harnessing NGN. In the mobile communications
market, infrastructure development aimed at the
introduction of next-generation high-speed wirelesscommunications such as WiMAX is proceeding apace,along with faster packet communication speeds andexpansion in service areas.

21

22

COMSYS Holdings Corporation

Review of Operations

On the other hand, service and price competition
among communications carriers is intensifying,
resulting in even stronger cost-cutting pressure on
the telecommunications infrastructure constructionindustry, including the COMSYS Group.
Fiscal 2009 Business Initiatives and Outlook
In fiscal 2009, the NTT DOCOMO business performed
steadily as 800MHz overlay construction projects andother construction services surpassed expectations.
However, in the business with NTT, FTTH construction
projects decreased because infrastructure is now sufficient. Consequently, new orders received in thissegment declined 6.3% year on year to ¥177,021
million, and segment net sales decreased 1.5% to¥179,768 million.
In fiscal 2010, as NTT reduces its investment inaccess networks, the segment will work to enhanceInstallation of fiber optic cableAnnual Report 2009

Review of Operations

productivity through far-reaching business reforms,
while actively seeking to win new orders in adjacentbusinesses, such as the in-house wiring, maintenance,
testing and verification businesses. Efforts will be
actively focused on adjacent businesses related toHome Networks in fiscal 2010. Furthermore, basedon expectations of NGN-related market expansion,
the segment aims to broaden the business scope toinclude the system vendor domain by making themost of its trained personnel.
In the NTT DOCOMO business, in anticipationof a challenging business environment for making
investment decisions, the segment will work to shift
to a competitive business structure and expand
market share, chiefly by building a total support/
consultation scheme to facilitate the award ofbase station construction contracts, including
pre-negotiation with landlords, and strengthening
capabilities as a prime contractor. The segment will
also expand its business domains by strengthening
proposal-based marketing and actively pursuing IP
business initiatives.

23

24

COMSYS Holdings Corporation

Review of Operations

ElectricalCommunications
Engineering Business

Expanding the NCC businessby increasing market share and growing
adjacent businesses
Net Sales(Millions of yen)
100,000

80,00060,00040,000Electrical communications engineering services
for an airport passenger terminal
20,000

0

05

06

07

08

09

Annual Report 2009

Review of Operations

Construction of an information management
system for disaster readiness inside a tunnel

Market Conditions
In this market, an increase in capital investments had
been observed among telecommunications carriers,
driven by such factors as the construction of WiMAX
networks on a nationwide scale. There is, however, atough business outlook for capital investments inboth base station construction and access networks,
as the investment cycle comes to an end. Meanwhile,
new demand is expanding from cable TV stations forfacilities addressing the ongoing migration fromanalog to digital terrestrial TV broadcasting in Japan.

25

26

COMSYS Holdings Corporation

Review of Operations

Fiscal 2009 Business Initiatives and Outlook
Under these market conditions, the COMSYS Group
actively addressed capital investment by telecommunications carriers, and growing demand fornationwide WiMAX construction projects. However,
due to a drop in orders following capital investment cutbacks by other corporate customers aswell as government organizations, new orders

Installation of mobile phone base station antennas

Annual Report 2009

Review of Operations

received in this segment fell 6.0% year on year to¥80,195 million while segment net sales fell 5.3%
to ¥77,425 million.
In fiscal 2010, in the NCC business, with telecommunications carriers drawing up tight capital investment plans, the segment will work hard to expand
adjacent businesses and to expand market share bystrengthening sales capabilities. Specifically, the segment will develop management and operation systems, particularly for provisioning facility design,operation and management systems for telecommunications carriers; win orders for maintenancework for fixed-line communication equipment, basestation and other facilities; engage in wireless device
projects; cultivate business in new fields such as FTTH
in-house terminal setup services; and win new customers by capturing the first contracts from cable TV
operators not previously penetrated and by proposing and winning orders related to the migration todigital terrestrial TV broadcasting and to the regional
WiMAX business.

27

28

COMSYS Holdings Corporation

Review of Operations

IT Solutions Business

Addressing demand for systems
integration that leads to cost reductions
for corporate customers
Net Sales(Millions of yen)
50,00040,00030,00020,000The comsip Collaboration Platform (a voicecommunications system using IP network
infrastructure) was delivered to the Tsukuba
Circuit race track.

10,000

0

05

06

07

08

09

Annual Report 2009

Review of Operations

IT Business Division of Nippon COMSYS Corporation

Market Conditions
Looking at market conditions faced by the IT Solutions Business, although business with telecommunications carriers performed steadily, private-sectorbusiness experienced difficult conditions, including
flagging IT investment by corporate customers in
response to the worsening economic environment.
Despite these market conditions, there is ever-­growing demand for comprehensive services thatfuse software and telecommunications technologies.
These services include network solutions involving
IP telephony, video monitoring, and security, as well
as system solutions such as the development of sales
support systems driven by wireless technologies.

29

30

COMSYS Holdings Corporation

Review of Operations

Fiscal 2009 Business Initiatives and Outlook
Faced with an increasingly challenging operating
environment, the segment worked to strengthen its
presence in the server market mainly by constructing
SaaS platform servers as well as by bolstering the
LAN/WAN network construction and operation
business. As a result, the segment posted a strong
overall performance. New orders received in thissegment rose 12.6% year on year to ¥43,525 million,
while net sales increased 2.8% to ¥42,522 million.

Systems integration conferenceAnnual Report 2009

Review of Operations

In fiscal 2010, capital investment by corporate
customers is expected to remain weak in responseto challenging economic conditions. Nevertheless,even in this environment, the segment believes thatbusiness opportunities will emerge from systemdevelopment projects that lead to cost reductions,such as systems integration. Therefore the segment
will expand business by actively allocating resources
to design and integration in the areas of server
integration and virtualization, as well as LAN/WAN
network construction. Specifically, through stronger partnerships with key system vendors in thisfield, the segment will expand its business domains
from business centered on access networks, where
the COMSYS Group has traditionally excelled, tohigh-margin systems integration related businesses.

New product release presentation

31

32

COMSYS Holdings Corporation

Review of Operations

Social System-Related
Business and Other

Prioritizing businesses in fields that havea competitive edge while implementing
measures to improve profitability
Net Sales(Millions of yen)
30,00025,00020,00015,000Construction of wind power generation system

10,000
5,000
0

05

06

07

08

09

Annual Report 2009

Review of Operations

Seismic retrofitting of bridge

Market Conditions
The Social System-Related Business and Other segment is engaged in the construction of buildings andpublic facilities, civil engineering works, and security
systems, as well as the construction of environmental
systems such as wind power and co-generation
systems. It is also closely involved in expressway
operations and supporting air traffic control systems.
In private-sector demand businesses, demand has
fallen sharply due to the recent economic recession.
However, in the public sector business, projects
were brought forward in response to government
economic stimulus policies. And recently, businesses
focused on ecology and addressing environmental
issues have also been expanding.

33

34

COMSYS Holdings Corporation

Review of Operations

Fiscal 2009 Business Initiatives and Outlook
In fiscal 2009, amid contraction in private-sectorbusinesses, there was accelerated demand in the
public-sector business from projects brought­forward. As a result, new orders received in thissegment increased 3.4% year on year to ¥19,721
million, while net sales declined 1.7% to ¥21,471
million. The segment worked to enhance profitability, such as by transferring approximately 160
personnel at Nippon COMSYS from this segment
to telecommunications-related segments, such as
mobile communications.
In fiscal 2010, the segment will enhance profitability by downsizing the condominium construction business, while rigorously enforcing theselective acceptance of orders aimed at increasing
non-residential communications-related construction projects, as well as through planned transfersof approximately 20 personnel.

Annual Report 2009

Review of Operations

The segment will actively enter the field of ecology
and the environment, focusing on areas such as solar
power/LEDs as well as construction work for better
residential and work environments, such as asbestos
removal and thermal barrier coatings. The segment
will also implement regional revitalization andenhancement measures, including the migration todigital terrestrial broadcasting and installation of
FTTH infrastructure in various regions of Japan.
The urban environmental improvement business,
including removal of electrical poles in urban areas,and constructing water drainage systems, is anotherarea the segment will actively enter.

Construction of new electricalequipment for public schools inconnection with the promotionof earthquake proofing of
public facilities

35

36

COMSYS Holdings Corporation

Corporate Governance
Basic Corporate Governance Philosophy

One element of the COMSYS Group’s vision is to earn
recognition as the “company of first choice” by all
stakeholders, and to creatively and dramaticallyenhance its corporate value in the process. To this end,
the Group is taking steps to improve its management
structure and internal control systems, while working
hard to conduct IR activities for shareholders andother investors. In this manner, the COMSYS Group
recognizes that one of its top management priorities
is to enhance corporate governance.
Organizational Structure

COMSYS Holdings Corporation (“the Company”) has
adopted the corporate auditor system, which by­Japanese law stipulates an organizational structure
consisting of a general shareholders’ meeting, Boardof Directors, Board of Corporate Auditors and otherorganizations.
The Board of Directors has decided to structure
the Board around directors well versed in the­Company’s operations with the aim of enhancing
management efficiency. Meanwhile, the Company

Annual Report 2009

Corporate Governancehas reinforced auditing functions by appointing outside corporate auditors who now have stronger legal
authority to audit company activities, in order toensure sound management.
The nine-member Board of Directors is the highest
decision-making body with respect to management
strategy. Based on internal rules governing the Boardof Directors, the Board meets regularly and as necessary to discuss matters stipulated by laws and regulations and to decide on important management issues.
Every quarter, the directors responsible for eachbusiness segment report to the Board of Directors on
progress with business execution based on policies
determined by the Board. Five corporate auditors,
including outside corporate auditors, attend meetings of the Board of Directors and express their views
on issues related to business execution, and monitor
the directors’ performance of their duties.
The Senior Management Committee is made up
of directors and the standing auditor. In principle, thiscommittee meets twice a month to examine and discuss issues related to key decisions, in an effort toimprove the efficiency of business execution. The

37

38

COMSYS Holdings Corporation

Corporate Governanceheads of each operating department attend meetingsof the Senior Management Committee as observers,
to ensure that they fully understand the basis for all
management decisions.
In each business segment, an Operating Committee under the supervision of the responsible director
holds regular meetings to conduct efficient operational management.
The term of office for directors is set at one year inorder to clarify directors’ management responsibility
every fiscal year, and to flexibly structure an optimal
management team in step with changes in the business environment.
In addition, the Advisory Board is made up of
experts from outside the company and is an advisory
body to the President. This board’s advice and recommendations on corporate governance and otherissues are reflected in business operations.

Annual Report 2009

Corporate GovernanceCorporate Governance Structure (As of June 26, 2009)
Overview of COMSYS Group Operational Structure and Operational Supervision
and Internal Control Structure

General Shareholders’ Meeting
Board of Corporate Auditors
Corporate Auditors (5)(including 3 Outside Auditors)

Advisory Board

Board of Directors
Audit

Directors (9)Corporate Auditors (5)Adviseandmakerecommendations

President
Senior Management Committee
Directors (9)Standing Corporate Auditor (1)CSR Committee

Independent Auditor

Group Operational
Standards

Corporate Compliance Committee
Risk Management Committee
Audit

Personal Information Protection
and Administration Committee
COMSYS Group Presidents Committee

Corporate Planning Department,
IR Department,
Finance & Accounting Department,
General Affairs Department,
Personnel Department

Internal
audit

Internal Control
Audit Department
Internal
auditCore Operating Companies
Nippon COMSYS Corporation, SANWA COMSYS Engineering Corporation,
TOSYS Corporation, COMSYS JOHO SYSTEM Corporation

39

40

COMSYS Holdings Corporation

Corporate GovernanceStatus of an Internal Control System

Based on the Companies Act of Japan, the Company
has formulated and implements a “Basic Policy on
Establishing an Internal Control System” that has been
approved by resolution of the Board of Directors. In
regard to internal control over financial reporting
based on the Financial Instruments and Exchange Law
of Japan, the Company has reinforced measures toeliminate deficiencies by making improvements inthe organizational structure and coverage of theseinternal controls, through the establishment of anInternal Control Office within the Internal Control
Audit Department.

Annual Report 2009

Corporate Governance

Establishing a Compliance Structure

Based on its internal Compliance Program the­Company has set forth Compliance Action Guidelines
and has established the Compliance Committee
within the above framework. This Committee, which
is chaired by the president, is made up of representatives from the Company and each of the core operating subsidiaries, as well as outside corporate auditors.
The Committee oversees compliance throughout
the COMSYS Group, and strives to increase the
COMSYS Group’s awareness of compliance and establish an effective compliance structure through various discussions.
All COMSYS Group companies have set up similarcompliance committees of their own. These committees work to establish an effective compliance structureby implementing educational and training programs,
as part of efforts to deepen employee understandingof the corporate philosophy and operating principles
of each respective COMSYS Group company.

41

42

COMSYS Holdings Corporation

Corporate Governance

Establishing a Risk Management Structure

In its efforts to maintain and enhance corporate value
amid a rapidly changing business environment, the
COMSYS Group is aware that it faces a variety of business risks which must be managed appropriately.
Therefore, the Group has established a Risk Management Committee, chaired by the vice president andmade up of directors from the Company and each of
the core operating subsidiaries.
In August 2006, the Basic Policy on Risk Management was formulated and similar risk management
committees were established at each group company,
among other measures. In this manner, efforts arebeing made to properly address the business risks
faced by each Group company, and to minimize thematerialization of each risk.
The Company has formulated Risk Management
Guidelines and Crisis Management Guidelines andwill strive to maintain stable operations and ensure
steady growth at the Company and the COMSYSGroup by practicing effective risk management.

Annual Report 2009

Corporate GovernanceFor example, the COMSYS Group manages operational risk by ensuring that Group companies work toacquire and maintain certifications for management
systems tailored to their operations, such as ISO 9001,
ISO 14001, COHSMS (Construction Occupational
Health and Safety Management Systems), ISMS (Information Security Management Systems) and Privacy
Mark certifications.
CSR Activities

The Company and the COMSYS Group have established the CSR Committee to coordinate CSR activities
Group-wide with the aim of ensuring that the Group
actively fulfills its economic and social responsibilities,
including social contribution activities, as a good corporate citizen.
The CSR Committee is engaged in CSR activities
addressing various themes, such as compliance, corporate governance, risk management, information
disclosure and protection, security countermeasures,social contributions and environmental issues.

43

44

COMSYS Holdings Corporation

Corporate Governance

Establishing an Information Management Structure

Important documents related to business activities
and the performance of directors’ duties, including
minutes of the Board of Directors and Senior Management Committee meetings and other reports, arestored and managed appropriately based on theGroup’s internal document management rules.
Furthermore, in order to improve the efficiency ofoperations and business execution, after ensuring anadequate level of information security, the Company
is working to deploy various information systems to
put in place a framework for sharing the latest management information.
Establishing a Group Management Structure

Important management decisions within the COMSYSGroup are reported to and discussed by the Senior
Management Committee and the Board of Directors inline with the Group Operation Standards, which clarify
decision making and reporting rules for the COMSYSGroup. In this manner, the group management andmonitoring framework is centered on the Company.

Annual Report 2009

Corporate GovernanceIn order to ensure that all COMSYS Group operations are carried out appropriately, the directors ofeach core operating subsidiary also participate as
members in the various Group committees, including
the Company’s newly established CSR Committee, theCorporate Compliance Committee and the Risk Management Committee. In this way, the COMSYS Group
ensures that all policies and decisions discussed bythese groups are reported to and thoroughly understood by each Group company.
In addition, the Group has formed the COMSYSGroup Presidents Committee, which is made up of thepresidents of COMSYS Group companies. This committee meets regularly and works to ensure that management policies and activities are clearly understoodby all members.

45

46

COMSYS Holdings Corporation

Corporate GovernanceInternal Auditing and Corporate Auditors

The Company’s internal auditing organization consistsof an Internal Audit Office with a staff of ten employees within the Internal Control Audit Department.
This Office formulates internal auditing policies
based on top management requirements, and implements internal audits of the Company and all groupcompanies. These activities are intended to ensure thateach business risk faced by the Group is minimized,
while maximizing the quality of business operations.
The Board of Corporate Auditors has five members, three of whom are outside corporate auditors.
No employees are specifically assigned to assist thecorporate auditors with their activities. If such assistance is required, there is a structure in place foraddressing personnel issues such as determining
appointees, and ensuring independence from directors. In addition, based on the rules governing theBoard of Corporate Auditors, directors and employees
are required to report on major business activities or
issues that could affect the COMSYS Group’s operations or performance to the corporate auditors.

Annual Report 2009

Corporate Governance

The Board of Corporate Auditors may request further information on the above mentioned reportingat any time as necessary, as well as other required
disclosure.
The corporate auditors regularly attend both regular and extraordinary meetings of the Board of Directors as well as meetings of the Senior Management
Committee, the CSR Committee, the Corporate­Compliance Committee and other important internal
committee meetings or discussions. This structure has
been established to allow the corporate auditors toverify the status of business execution on a regularbasis and to express their views on these matters.
The corporate auditors also hold regular meetings
with the president to directly express their views on
issues related to business execution and other topics.
The corporate auditors of COMSYS Holdings also
convene regular meetings with their counterparts atcore COMSYS Group companies, and maintain close
ties with them mainly by exchanging views, in orderto improve the effectiveness of audits. Furthermore,
the corporate auditors maintain close ties with the

47

48

COMSYS Holdings Corporation

Corporate GovernanceInternal Audit Office and with the Group’s inde­
pendent auditor. This structure allows the corporate
auditors to regularly check to see whether business
operations are executed appropriately and efficiently,
in accordance with audit plans formulated by the
Board of Corporate Auditors.
Strengthening Disclosure and Accountability

The Company provides timely and appropriate disclosure of crucial management information in order topromote understanding among shareholders, investors and all other stakeholders and obtain a fair evaluation of its activities.
The Company discloses information on new orders
received on a monthly basis, as well as financial results
on a quarterly basis. In conjunction with interim andfull-year earnings announcements, the Company
holds business presentations to clearly explain bothits performance and outlook. Individual and small
group meetings with investors and securities analysts
are also held in both Japan and overseas countries.

Annual Report 2009

Corporate Governance

The Company also seeks to enhance its investor
relations (IR) website by posting presentation materials, news releases and other information on this website in a timely and straightforward manner.
Personal Information Protection

Recognizing that properly protecting and managing
personal and other information is crucial to gaining
the trust of customers and society as a whole, the Personal Information Protection and Administration
Committee has been established to oversee activities
throughout the COMSYS Group. Concurrently, thePersonal Information Protection Policy and otherguidelines have been drafted and adopted to ensurethat information security management is fully implemented at all Group companies.
At the same time, every COMSYS Group company
works hard to protect personal information by establishing similar committees and measures of the
COMSYS Group, as well as operating management
systems of ISMS and the Privacy Mark to acquire andmaintain these certifications.

49

50

COMSYS Holdings Corporation

Directors and Officers As of June 26, 2009
Hajime Takashima
Representative Director and President(President and Representative Director of
Nippon COMSYS Corporation)

Yoji Oku

Tatsufumi Nakajima

Director

Director

Hidetoshi Miura

Mitsuhiro Watanabe

Director(President and Representative Director of
TOSYS Corporation)

Director

Kunio Ushioda

Corporate Auditors

Director(President and Representative Director of
COMSYS JOHO SYSTEM Corporation)

Standing Auditor

Akinori Ishigaki
AuditorYoshihiro Mimata
Director

Hirofumi Yamasaki

Takemi Ikari
Kunihiko Gotoh*
Takeshi Gotoh*
Masahiko Miyashita*

Director*Outside auditors

Akio Ogawa
Director

Annual Report 2009

FINANCIAL SECTIONCONTENTS
Financial Summary

52

Management Discussion and Analysis

54

Consolidated Balance Sheets

74

Consolidated Statements of Income

76

Consolidated Statements of Changes in Net Assets

77

Consolidated Statements of Cash Flows79

Notes to the Consolidated Financial Statements

81

Report of Independent Certified Public Accountants

94

51

52

COMSYS Holdings Corporation

Financial Summary
COMSYS Holdings Corporation and Consolidated Subsidiaries
Years ended 31st March, 2005, 2006, 2007, 2008 and 20092005

Results of Operations:
New orders received during the year
Net sales
Operating income
Income before income taxes and other adjustments to net income
Net income
Capital expenditure
Research and development expenditure¥287,376
293,681
15,062
14,170
8,349
3,260
326

Financial Position:
Total assets
Property and equipment
Long-term debt
Shareholders’ equity
Interest-bearing debt
Modified working capital¥208,681
46,963
2,768
128,063
4,692
65,609Per Share of Common Stock (in yen and U.S. dollars):
Net income
Cash dividends
Total shareholders’ equity¥ 58.42
15.00
906.92Financial Ratios:
Operating income to net sales (%)
Net income to net sales (%)
R&D expenses to net sales (%)
SG&A expenses to net sales (%)
Equity ratio (%)
Return on equity (%)
Return on total assets (%)
Interest coverage (times)
Debt/equity ratio (%)
Other Statistics:
Number of employees at fiscal year-end (persons)Common stock issued (thousand shares)
Common stock price range (2004 is for the six-month period
ended 31st March, 2004, 2005 is for the year ended 31st March, 2005 in yen):
High
Low

5.1
2.8
0.1
7.1
61.4
6.7
4.0
91.00
0.04

6,746
145,977

1,010
683

Note: For convenience only, the accompanying Japanese yen figures for 2009 have been translated into U.S. dollars at the rate of ¥98.23 to US$1,

Annual Report 2009

Financial Summary

Thousands of
U.S. Dollars (Note 1)

Millions of Yen
2006

2007

2008

2009

2009

¥310,005
307,485
16,31916,423
10,031
4,823
242¥334,172
336,519
19,214
19,46812,3827,240
190¥331,920
327,527
16,29918,428
11,6419,850
190¥320,462
321,186
15,611
16,35910,0639,467
67$3,262,364
3,269,734
158,923
166,538
102,443
96,376682¥220,786
47,417314
137,161
3,608
67,995¥229,953
47,62772
145,786
451
67,818¥224,122
50,894
10
149,15271
65,149¥220,651
50,009106
150,829
164
66,033$2,246,269
509,101
1,079
1,545,098
1,670
672,228¥ 69.65
15.00
964.70

¥

¥

83.87
17.00
1,091.83¥$      0.77
0.20
11.73

87.39
17.00
1,033.87

75.60
20.00
1,151.81

5.3
3.3
0.08
6.7
62.1
7.6
4.7
175.59
0.03

5.7
3.7
0.06
6.6
63.4
8.8
5.5
373.72
0.00

5.0
3.6
0.06
6.7
66.6
7.9
5.1
1,510.00
0.00

4.9
3.1
0.02
6.8
68.4
6.7
4.5
2,900.36
0.00

7,081
145,977

7,574
145,977

8,173
145,977

8,203
145,977

1,796
857

1,768
1,052

1,506
766

1,047
521

the rate prevailing on March 31, 2009.

53

54

COMSYS Holdings Corporation

Management Discussion and Analysis
Profile of COMSYS GroupCOMSYS Holdings Corporation (the Company) wasestablished in September 2003 as the holding company for the COMSYS Group. The COMSYS Group ismade up of the Company, 3 core operating companies(Nippon COMSYS Corporation, SANWA COMSYS­Engineering Corporation and TOSYS Corporation), 44
other subsidiaries, as well as 9 affiliates. The Group’s
main businesses are electrical and telecommunications infrastructure construction services, which

New Orders Received byOperating Segment

Net Sales by Operating Segment(Millions of yen)
400,000(Millions of yen)
400,000

300,000

300,000

200,000

200,000

100,000

100,000

0

05

06

07

08

09

NTT Information Telecommunication Engineering BusinessElectrical Communications Engineering Business
IT Solutions BusinessSocial System-Related Business and Other

0

05

06

07

08

09

NTT Information Telecommunication Engineering BusinessElectrical Communications Engineering Business
IT Solutions BusinessSocial System-Related Business and OtherAnnual Report 2009Management Discussion and Analysis

mainly involve the construction of telecommunications infrastructure facilities, and other businesses,
such as the information processing related business.
The consolidated financial statements of COMSYS
Holdings for fiscal 2009, the year ended March 31,
2009, include the accounts of 32 consolidated subsidiaries. COMSYS Holdings did not account for any affiliates using the equity method in fiscal 2009.
Overview

In fiscal 2009, the Japanese economy faced challenging conditions such as cutbacks in capital investment
and a worsening employment situation. In the first half,
consumer spending weakened mainly due to soaring
crude oil and raw material prices, while in the second
half corporate earnings declined sharply on accountof falls in share prices, the yen’s appreciation and otherfactors as the global financial crisis intensified.
The COMSYS Group’s main businesses lie in Japan’s
information and communications sector. In the fixedline communications field, the total number of subscriptions for broadband services, including FTTH
(Fiber To The Home), DSL and cable TV, surpassed 30

55

56

COMSYS Holdings Corporation

Management Discussion and Analysis

million in step with the rapid advancement in broadband and ubiquitous infrastructure. However, thegrowth rate in the number of FTTH subscriber lines,
which had surpassed 14 million lines as of March 31,
2009, has started to slow down. Nonetheless, commercial services for the next generation network (NGN),
which have been promoted by NTT Corporation, werelaunched in March 2008. Expansion in the NGN-related
market is widely anticipated as new services combining communications and broadcasting are offered byleveraging the features of this secure, reliable andquality-assured network. In the mobile communications field, progress with the diversification and thedevelopment of new services such as the enhancement of music, video and other content distribution
services, which require wider service areas and faster
packet transmission speeds, as well as with the introduction of next-generation high-speed wireless communications such as WiMAX, resulted in intensified
service and price competition among communications
carriers, leading to even stronger cost-cutting pressure
on the telecommunications infrastructure construction industry.

Annual Report 2009Management Discussion and Analysis

In response, the COMSYS Group worked hard todrive through business reforms focused on threethemes—prioritize businesses, expand operations,and boost productivity—with reforms centered on thethree core operating companies. The overriding goal
is to realize the COMSYS Group’s management visionand meet the expectations of all stakeholders.
Specifically, the ­Company flexibly and effectively reallocated business resources through such means astransferring personnel among the core operatingcompanies according to changes in their businessvolume. Efforts were also focused on expanding­adjacent businesses, such as the in-house wiring,
maintenance, testing and verification services in addition to traditional communications infrastructure
construction services, as well as the upper layer solution business. As for structural reforms to raise Groupwide synergies, the Company introduced the “Group
Innovation 2010” concept, while standardizing workflow, enhancing productivity and taking other steps
linked to ongoing COMSYS-style kaizen (improvement)
initiatives. In October 2008, the new Comstar intraGroup system was introduced to promote the

57

58

COMSYS Holdings Corporation

Management Discussion and Analysis

systemization of know-how, skills and initiatives from
actual business sites and their expansion throughout
the Group. Through this process, the goal is to carryout far-reaching business process reforms and build
a sustainable earnings structure.
New Orders Received

New orders received decreased 3.5% year on year to¥320,462 million, as steady orders in the IT ­Solutions
Business were offset by a decline in orders chiefly for
FTTH construction services in the NTT Information
Telecommunication Engineering Business.
Results of Operations

Net sales were ¥321,186 million, down 1.9% from theprevious fiscal year due to a decline mainly in FTTH
construction services, despite steady sales from construction services related to NTT DOCOMO and New
Common Carriers (NCCs). The NTT Group-related business accounted for 55.2% of net sales. Cost of sales
fell 1.9% year on year to ¥283,724 million, with thecost of sales ratio remaining mostly the same as
the previous year at 88.3%. Selling, general andAnnual Report 2009Management Discussion and Analysis

administrative (SG&A) expenses declined 0.9% year
on year to ¥21,851 million, with the ratio of SG&A
expenses to net sales held to an increase of 0.1 of apercentage point to 6.8%. Despite higher strategic
expenses incurred chiefly due to the development of
new intra-Group information systems, the decrease in
SG&A expenses was attributable to cuts in operating
expenses through various business measures andreductions in personnel costs as a result of personnel
transfers from sales divisions to engineering divisions.
Operating income was ¥15,611 million, a decrease of

Operating Income andOperating Margin

Net Income and Net Profit Margin(Millions of yen)

(%)(Millions of yen)

(%)

20,000

6.0

16,0004.0

15,000

4.5

12,0003.0

10,000

3.0

8,000

2.0

5,000

1.5

4,000

1.0

0

0

0

05

Operating Income
Operating Margin

06

07

08

09

05

Net Income
Net Profit Margin

06

07

08

09

0

59

60

COMSYS Holdings Corporation

Management Discussion and Analysis

4.2% year on year. The ratio of operating income to
net sales was 4.9%, down 0.1 of a percentage point
year on year. Net income decreased 13.6% year on
year to ¥10,063 million, mainly due to the recordingof impairment losses on investment securities. The
ratio of net income to net sales fell 0.5 of a percentage
point to 3.1%.
New Orders Received and Results of O
­ perations for theThree Core Operating Companies

Nippon COMSYS Group
During the fiscal year under review, the Nippon
COMSYS Group gave first priority to the safety andquality of the operations as before, and implemented
various business actions based on the “Innovation
2010” concept and COMSYS-style kaizen (improvement) to reform its business ­structure in response tolower capital investment by the NTT Group. Specificmeasures included strengthening prime contractor
project man­agement, consolidating and optimizing
the locations of construction bases, expanding business domains, and standardizing workflow. At theAnnual Report 2009Management Discussion and Analysis

same time, the Group strove to boost productivity
and competitiveness by introducing the Comstar
system to promote greater systemization.
In this context, new orders received dropped 4.8%
to ¥230,561 million due to a decline mainly in FTTH
construction services in the NTT Information
Telecommunication Engineering Business, despite
steady orders for NI-related solutions in the IT ­Solutions
Business. Net sales decreased 1.0% year on year to¥234,300 million as a result of a decline in sales mainly
from FTTH construction services, despite an increasein 800MHz overlay construction projects related to NTT
DOCOMO. In terms of earnings, the Nippon COMSYSGroup reduced construction costs and operating
expenses through integration of purchasing and outsourcing operations, but incurred higher strategic
expenses chiefly due to the development of intra-Group
information systems. Consequently, operating income
declined 1.7% year on year to ¥12,010 million. Net
income fell 9.8% to ¥8,013 million due to the recordingof extraordinary losses such as impairment losses oninvestment securities.

61

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COMSYS Holdings Corporation

Management Discussion and Analysis

SANCOM GroupThe SANWA COMSYS Engineering (SANCOM) Group
worked to expand orders in the NCC business in theElectrical Communications Engineering Business, themanufacturer and vendor-related business, and thetelecommunications and electrical construction business (public-sector/private demand). Efforts were also
focused on expanding orders in the ICT facility business, where future market growth is expected. Basedon the slogan of “Building Trust,” the SANCOM Groupextended various measures across the group with theaim of becoming an even more trustworthy company
for its customers. This involved pulling the entire group
together to prioritize safety and enhance quality. This
group also strove to drive business expansion andenhance productivity (via cost reductions) by implementing the “Group Innovation 2010” concept, utilizing
the Comstar system, and promoting SANCOM-stylekaizen (improvement) activities.
In the year under review, new orders received rose
6.1% year on year to ¥78,473 million, mainly due toincreased capital investment and construction of
WiMAX on a nationwide scale by the KDDI Group.

Annual Report 2009Management Discussion and Analysis

Another contributing factor was efforts to minimize
the impact of the drop in orders resulting from cutbacks in capital investment by other private-sector
companies and the public sector. Net sales increased
1.7% year on year to ¥74,783 million due to similarreasons as for new orders received. In terms of earnings, operating income rose 2.6% year on year to ¥3,762
million. This mainly reflected higher net sales centeredon the Electrical Communications Engineering
Business; efforts to eliminate unprofitable projects
through careful selection and acceptance of orders,
thorough monitoring of earnings on a monthly basis
and measures to cut operating expenses. However,net income declined 10.1% year on year to ¥2,242
million, partly due to the impact of tax-effect accounting in the previous fiscal year.
TOSYS GroupThe TOSYS Group embraced the slogan of “Creating
workplaces with an open culture” for fiscal 2009, andimplemented company-wide measures to share information and step up the control of revenues andexpenses. These measures included introducing a

63

64

COMSYS Holdings Corporation

Management Discussion and Analysis

business department system with a flat organizational
structure; bolstering risk management by strengthening compliance and security, and introducing aninternal control system; and fully implementing business process reforms and enhancements to raise
operating efficiency. Meanwhile, in the NTT Information
and Telecommunication Engineering Business, thegroup established a system for conducting all operations—from design activities to engineering management and project completion—basically on aninternal basis. The goals are to enhance engineeringskills, and engineering and cost management capabilities, as well as to ensure the fulfillment of thegroup’s responsibilities as a prime contractor, basedon the principle of emphasizing actual business

Performance of the Three Core Operating Companies(Millions of yen)
Nippon COMSYS GroupSANCOM Group

2009/2008

TOSYS Group

2009/20082009/2008

New Orders Received

230,561–4.8

78,473

6.1

29,539–6.6

Net Sales

234,300–1.0

74,783

1.7

30,148–8.3

Operating Income

12,010

–1.7

3,762

2.6

494

12.6

Net Income

8,013

–9.8

2,242

–10.1

200

2.9

Annual Report 2009Management Discussion and Analysis

operations. Other business domains of the TOSYSGroup took a range of initiatives, including prioritizing
and selecting businesses to improve its profitability
outside the NTT Information and Telecommunication
Engineering Business.
In the fiscal year under review, new orders received
decreased 6.6% year on year to ¥29,539 million andnet sales fell 8.3% year on year to ¥30,148 million, inline with relatively weak demand for FTTH construction, despite steady growth in construction services
related to NTT DOCOMO and NCCs. On the other
hand, operating income rose 12.6% year on year to¥494 million and net income increased 2.9% to ¥200
million because of various reform measures to address
the previous year’s management issues such as
reducing operating expenses incurred outside of
construction service areas for FTTH construction as
well as in outsourcing and materials costs, andbecause of fewer unprofitable construction projects
as the group prioritized and selected businesses inother business domains.

65

66

COMSYS Holdings Corporation

Management Discussion and Analysis

Financial Position

AssetsTotal assets as of March 31, 2009 were ¥220,651 million,¥3,471 million less than a year earlier. Current assets
were ¥145,417 million, down ¥1,887 million from ayear earlier, due to a decrease of ¥9,323 million in notes
and accounts receivable—trade and accumulated costof construction in progress, despite an increase in cash
and cash equivalents of ¥5,583 million. Total fixed
assets declined ¥1,584 million from a year earlier to¥75,234 million. This was mainly due to a decrease of¥1,797 million in investment securities.
Liabilities
Total liabilities as of March 31, 2009 were ¥68,876
million, down ¥4,828 million from a year earlier. ­Current
liabilities fell ¥3,318 million from a year ago to ¥61,423
million, mainly due to a decrease of ¥5,729 million inaccounts payable—trade and advances received on
construction in progress. Long-term liabilities, at¥7,453 million, were ¥1,510 million lower than a year
ago, mainly due to a decrease in negative goodwillof ¥949 million.

Annual Report 2009Management Discussion and Analysis

Shareholders’ Equity
Total net assets, including minority interests, were¥151,775 million, ¥1,357 million higher than at theprevious fiscal year-end. This mainly reflected anincrease in retained earnings of ¥7,315 million­primarily due to net income of ¥10,063 million, despite
an increase of ¥5,146 million in treasury stock.
The equity ratio improved from 66.6% at the previous fiscal year-end to 68.4%. Return on equity (ROE)
fell 1.2 percentage points to 6.7% from a year earlier,

Total Assets and Return on
Total Assets (ROA)

Shareholders’ Equity andReturn on Equity (ROE)(Millions of yen)

(%)(Millions of yen)

(%)

250,000

7.5

200,000

10.0

200,000

6.0

160,000

8.0

150,000

4.5

120,000

6.0

100,000

3.0

80,0004.0

50,0001.5

40,000

2.0

0

0

0

05

06

Total Assets
Return on Total Assets (ROA)

07

08

09

05

06

Shareholders’ Equity
Return on Equity (ROE)

07

08

09

0

67

68

COMSYS Holdings Corporation

Management Discussion and Analysis

while return on assets (ROA) was 4.5%, down 0.6 of apercentage point from a year ago.
Capital Resources and Liquidity

Liquidity
The Group has introduced a Cash Management System(CMS) in order to reduce interest-bearing debt andreinforce fund management on a consolidated basis.
In addition, COMSYS Holdings has established a committed credit facility of ¥6,000 million so that it can
procure funds in times of emergency.

Equity Ratio
(%)
80

60

40

20

0

05

06

07

08

09

Annual Report 2009Management Discussion and Analysis

Cash Flows

Cash and cash equivalents as of March 31, 2009 were¥29,877 million, an increase of ¥5,583 million, or
23.0%, from a year earlier. A breakdown of cash flows
for fiscal 2009 and reasons for changes are provided
as follows.
Cash Flows From Operating Activities
Net cash provided by operating activities was¥19,640 million, 1,800.1% more than in the previous
year. Cash was mainly provided by income before
income taxes and other adjustments to net incomeof ¥16,359 million and an increase in receivables—
trade of ¥10,767 million. On the other hand, cash
was mainly reduced by an increase in payables—
trade of ¥6,267 million.
Cash Flows From Investing Activities
Net cash used in investing activities was ¥6,502
million, 41.5% less than in the previous fiscal year,
due mainly to acquisitions of property and equipment of ¥3,454 million and acquisitions of otherassets of ¥3,461 million.

69

70

COMSYS Holdings Corporation

Management Discussion and Analysis

Cash Flows From Financing Activities
Net cash used in financing activities was ¥7,732 million,
7.0% less than in the previous fiscal year. This mainlyreflected payments of ¥5,200 million for treasury stockand ¥2,711 million in cash dividends paid.
Business Risks

The COMSYS Group believes the following risks could
affect the Group’s performance and financial position,and have a material impact on the ­decision-making ofinvestors. Forward-looking statements in the following
section were determined by the COMSYS Group as ofMarch 31, 2009.
(1)	Risk from Dependency on a Specific Customer
Since the NTT Group is the primary customer for the
COMSYS Group’s mainstay electrical and telecommunications infrastructure construction services, accounting for more than 50% of business, changes in thesize and nature of capital expenditures at the NTT
Group could have an impact on the COMSYS Group’sbusiness performance.

Annual Report 2009Management Discussion and Analysis(2) Risk to Safety and Quality
With the goal of eradicating accidents involving
both personnel and facilities based on the motto of“Prioritizing Safety in Everything,” the COMSYS Groupis working to manage safety and quality in construction by implementing employee training and othermeasures within the Group and among partner companies. Nevertheless, an accident that results in theloss of trust among business customers, a loss of potential orders due to a temporary suspension of operations
and the assumption of responsibility for defective construction and buildings could have an impact on the
COMSYS Group’s business performance.
Furthermore, the COMSYS Group does its utmost
to ensure group-wide information security management with respect to information, including personal
information, entrusted from customers by leveraging the Information Security Management System(ISMS) and Privacy Mark certifications obtained at
its core operating companies. Nevertheless, a leakof information by outsourcing partners or othercompanies processing or storing the Group’s information, or due to a crime involving unauthorized

71

72

COMSYS Holdings Corporation

Management Discussion and Analysis

access from outside, could result in the loss of trust
among business partners or the assumption of liability for damages due to accusations of mismanagement. This in turn could have an impact on the
COMSYS Group’s business performance.
(3)	Risk from Changes in Seasonal Business
Patterns
In the COMSYS Group’s mainstay business of electricaland telecommunications infrastructure construction
services, because the recording of net sales and orders
tends to be concentrated in the fourth quarter, at theend of the fiscal year, the Group’s business performance
could differ significantly between the first and thesecond halves of the fiscal year.
(4) Risk Involved in Holding Assets
Since the COMSYS Group holds real estate, investment securities and pension assets as needed in thecourse of business, a change in the market value ofthese assets could have an impact on the Group’sbusiness performance.

Annual Report 2009Management Discussion and Analysis(5) Credit Risk of Business Customers
The COMSYS Group conducts strict credit management with regard to its business customers in realtime using outside research agencies and other entities. At the same time, the Group has put in place areliable structure for minimizing the materializationof credit risk by having the Legal Department screen
contracts, for example. Nevertheless, deterioration in
the credit standing of customers could result in theinability to recover construction costs in the case of
an individual customer or cause construction delaysin the case of a sub-contractor. This in turn could havean impact on the Group’s business performance.

73

74

COMSYS Holdings Corporation

Consolidated Balance Sheets
COMSYS Holdings Corporation and Consolidated Subsidiaries
31st March, 2008 and 2009

Millions of Yen

ASSETS
Current Assets:
Cash and cash equivalents
Short-term investments (Note 3)
Notes and accounts receivable—trade
Accumulated cost of construction in progress
Deferred income taxes (Note 6)
Other current assets
Less: Allowance for doubtful receivables
Total current assets

Property and Equipment:
Land (Note 4)
Buildings and structures (Note 4)
Machinery and equipment
Lease assets
Construction in progress
Less: Accumulated depreciation
Total property and equipment

Investments and Other Assets:
Investment securities:
Unconsolidated subsidiaries and affiliates
Other (Note 3)Long-term loans receivable
Prepaid pension cost (Note 5)
Deferred income taxes (Note 6)
Other assets
Less: Allowance for doubtful receivables
Total investments and other assets
See Notes to the Consolidated Financial Statements.

Thousands of
U.S. Dollars(Note 1)

2008

2009

2009

¥ 24,294
2,977
93,561
20,903
3,186
2,773
(390)
147,304¥29,877
2,837
84,23821,573
3,412
3,640
(160)
145,417$304,154
28,881
857,559
219,617
34,73537,056(1,629)1,480,373

26,89232,44021,361–
27(29,826)
50,89427,09132,44919,391
19
344(29,285)
50,009275,792
330,337
197,404
193
3,502(298,127)
509,101

841
7,120
2,858
4,404
2,655
11,228(3,182)25,924¥224,122

669
5,495
2,745
4,217
2,548
11,927(2,376)25,225¥220,651

6,810
55,94027,94542,93025,939121,419(24,188)
256,795$2,246,269

Annual Report 2009

Consolidated Balance Sheets

Thousands of
U.S. Dollars(Note 1)Millions of Yen

LIABILITIES AND NET ASSETS
Current Liabilities:
Short-term borrowing and current portion of
long-term debt (Note 4)
Accounts payable—trade
Advances received on construction in progress
Income taxes payable
Other current liabilities
Total current liabilities
Long-term Liabilities:
Long-term debt (Note 4)
Accrued severance indemnities (Note 5)
Deferred income taxes (Note 6)
Deferred tax liabilities for unrealized gains
on land revaluation (Note 9)
Negative goodwill
Other long-term liabilities
Total long-term liabilities
Net Assets (Note 8):
Common stock, par value ¥51 per share:
Authorized 580,000 thousand shares
Issued 145,978 thousand shares
Additional paid-in capital
Retained earnings
Unrealized loss on land revaluation (Note 9)
Unrealized gain (loss) on securities
Treasury stock, at cost
Total shareholders’ equity
Subscription rights to shares
Minority interests
Total net assets

2009

2008

¥

61
52,093
3,489
2,514
6,584
64,741¥

70
46,364
3,611
4,146
7,232
61,423

2009

$

713
471,994
36,761
42,20773,623625,298

10
3,955
1,260

116
3,520
997

1,181
35,834
10,150

2,366
949
423
8,963

2,366
–
454
7,453

24,086–
4,622
75,873

10,00056,98099,783(7,897)(330)(9,384)
149,152–
1,266
150,418¥224,122

10,00057,015
107,098(7,897)(857)(14,530)
150,82970
876
151,775¥220,651

101,802580,424
1,090,278(80,394)(8,724)(147,919)
1,535,467
713
8,918
1,545,098$2,246,269

75

76

COMSYS Holdings Corporation

Consolidated Statements of Income
COMSYS Holdings Corporation and Consolidated Subsidiaries
Years ended 31st March, 2008 and 2009

Thousands of
U.S. Dollars(Note 1)Millions of Yen

Net Sales
Cost of Sales
Gross profits
Selling, General and Administrative Expenses
Operating income
Other Income (Expenses):
Interest and dividend income
Interest expenses
Other, net (Note 10)
Income before income taxes and other adjustments
to net income
Income Taxes (Note 6):
Current
Deferred
Minority Interests
Net Income

2008

2009

2009

¥327,527
289,176
38,35122,052
16,299¥321,186
283,724
37,462
21,851
15,611$3,269,734
2,888,364
381,370
222,447
158,923

311
(11)
1,829
2,129

310
(5)
443
748

3,156
(51)
4,510
7,615

18,42816,359166,538

5,988
708
6,696
91
¥ 11,641

6,355
(35)
6,320
(24)
¥ 10,063

64,695(356)
64,339(244)
102,443
U.S. Dollars(Note 1)

Yen

Amounts per Share:
Net income—Basic—Diluted
Cash dividends
See Notes to the Consolidated Financial Statements.

¥ 83.87
83.87
17.00

¥ 75.60
75.60
20.00

$

0.77
0.77
0.20

Annual Report 2009

Consolidated Statements of Changes in Net Assets
COMSYS Holdings Corporation and Consolidated Subsidiaries
Years ended 31st March, 2008 and 2009

Thousands
Outstanding
Number of
Shares ofCommon Stock

Balance, April 1, 2007
Net income
Cash dividends paid:   Final for prior year, ¥10.00 per share   Interim for current year, ¥7.00    per share
Changes of scope of consolidation
Repurchase of treasury stock
Sales of treasury stock
Net change in the year
Balance, April 1, 2008
Net income
Cash dividends paid:   Final for prior year, ¥10.00 per share   Interim for current year, ¥7.00    per share
Changes of scope of consolidation
Repurchase of treasury stock
Sales of treasury stock
Net change in the year
Balance, April 1, 2009

141,011

Millions of Yen
Additional
Common Stock Paid-in Capital¥10,000¥56,974Retained
Earnings¥ 90,550
11,641

Unrealized Losson Land
Unrealized Gain
Revaluation
on Securities¥(7,897)¥ 520¥(7,897)(850)¥(330)¥(7,897)(527)¥(857)

Minority
Interests

Total Net Assets(1,409)(968)(13)(4,433)
42
136,607(31)
6¥10,000¥56,980¥ 99,783
10,063(1,312)(1,385)(10)(5,790)143
130,950(51)
35¥10,000¥57,015¥107,098
Millions of Yen

Total
Treasury Stock, Shareholders’ Subscription
at costEquityrights to shares

Balance, April 1, 2007
Net income
Cash dividends paid:   Final for prior year, ¥10.00 per share   Interim for current year, ¥7.00    per share
Changes of scope of consolidation
Repurchase of treasury stock
Sales of treasury stock
Net change in the year
Balance, April 1, 2008
Net income
Cash dividends paid:   Final for prior year, ¥10.00 per share   Interim for current year, ¥7.00    per share
Changes of scope of consolidation
Repurchase of treasury stock
Sales of treasury stock
Net change in the year
Balance, April 1, 2009¥ (4,361)(16)(5,056)49¥ (9,384)(17)(5,201)
72¥(14,530)¥145,786
11,641¥1,219¥147,005
11,641(1,409)(1,409)

(968)

(968)

(47)
(5,056)55(849)¥149,152
10,063(47)(5,056)55(803)¥150,418
10,063¥ –47¥1,266(1,312)(1,312)(1,385)(1,385)(68)(5,201)107(527)¥150,829(68)(5,201)
107(847)¥151,775

¥70
¥70

(390)
¥876

77

78

COMSYS Holdings Corporation

Consolidated Statements of Changes in Net Assets

Thousands of U.S. Dollars (Note 1)
Additional
Common Stock Paid-in Capital

Balance, April 1, 2008
Net income
Cash dividends paid:   Final for prior year, ¥10.00 per share   Interim for current year, ¥7.00 per share
Changes of scope of consolidation
Repurchase of treasury stock
Sales of treasury stock
Net change in the year
Balance, April 1, 2009

$101,802

Retained
Earnings$580,068 $1,015,810
102,443

Unrealized Losson Land
Unrealized Gain
Revaluation
on Securities$(80,394)$(3,359)$(80,394)(5,365)$(8,724)(13,356)(14,100)(519)
356$101,802$580,424 $1,090,278

Treasury Stock,at costTotal
Shareholders’ Subscription
Equityrights to shares

Thousands of U.S. Dollars (Note 1)

Balance, April 1, 2008
Net income
Cash dividends paid:   Final for prior year, ¥10.00 per share   Interim for current year, ¥7.00 per share
Changes of scope of consolidation
Repurchase of treasury stock
Sales of treasury stock
Net change in the year
Balance, April 1, 2009
See Notes to the Consolidated Financial Statements.

Minority
Interests Total Net Assets$ (95,531) $1,518,395
102,443$12,888 $1,531,283
102,443(13,356)(14,100)
(173)
(692)
(52,947)(52,947)733
1,089(5,365)$(147,919) $1,535,467(13,356)(14,100)(692)(52,947)
1,089(3,970)(8,622)$ 8,918 $1,545,098

713
$713

Annual Report 2009

Consolidated Statements of Cash FlowsCOMSYS Holdings Corporation and Consolidated Subsidiaries
Years ended 31st March, 2008 and 2009

Millions of Yen
2008

Cash Flows from Operating Activities:
Income before income taxes and other adjustments
to net income
Depreciation and amortization
Gain on sales of fixed assets
Write-down of investments in securities and other assets
Increase in allowance for doubtful receivables
Decrease in accrued severance indemnities
Interest and dividends received
Interest expenses
Increase in receivables—trade
Decrease in inventories
Increase in payables—trade
Decrease in other assets
Decrease in other liabilities
Amortization of consolidation adjustments
Other, net
Cash and cash equivalents received on interest anddividends income
Cash and cash equivalents paid for interest expenses
Cash and cash equivalents paid for income taxes
Net cash provided by operating activities

2009

Thousands of
U.S. Dollars(Note 1)
2009

¥18,428
4,373
(449)
197
(120)
(495)
(311)
11
(9,559)2,632(3,278)523(579)(1,529)45
9,889¥16,359
4,654–
749(1,038)
(413)
(310)
5
10,767(504)(6,267)351
358(1,070)300
23,941$166,538
47,379–7,625(10,567)(4,204)(3,156)51
109,610(5,131)(63,799)
3,572
3,645
(10,893)
3,054
243,724311(11)(9,155)
1,034

310
(5)
(4,606)
19,6403,156(51)(46,890)
199,939(Continued)

79

80

COMSYS Holdings Corporation

Consolidated Statements of Cash Flows

Millions of Yen

Cash Flows from Investing Activities:
Decrease in short-term investments, net
Decrease in investment securities, net
Acquisitions of property and equipment
Acquisitions of other assets
Proceeds from sale of property
Increase in long-term loans
Collection of long-term loans
Other
Net cash used in investing activities
Cash Flows from Financing Activities:
Decrease in short-term borrowings, net
Proceeds from long-term loans payable
Repayment of long-term debt
Proceeds from long-term debt
Acquisitions of treasury stock
Proceeds from sale of treasury stock
Cash dividends paid
Other
Net cash used in financing activities
Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Increase Due to Business Combination
Cash and Cash Equivalents at End of Year
See Notes to the Consolidated Financial Statements.

Thousands of
U.S. Dollars(Note 1)

2008

2009

2009

¥

20
(2,580)(6,874)(2,883)
676
(611)
677
457
(11,118)

¥

150
(179)
(3,454)(3,461)129(1,321)
1,247
387(6,502)$ 1,527(1,822)(35,162)(35,235)
1,313(13,448)
12,695
3,940(66,192)

(586)
–
(317)
(20)
(5,057)55(2,390)–(8,315)(18,399)
42,458235¥24,294

82
80
(60)
(20)
(5,200)107(2,711)(10)(7,732)
5,406
24,294
177¥29,877

835
815
(611)
(204)
(52,937)
1,089(27,598)(102)(78,713)55,034
247,318
1,802$304,154

Annual Report 2009

Notes to the Consolidated Financial Statements
COMSYS Holdings Corporation and Consolidated Subsidiaries

1. Basis of Presenting Consolidated Financial Statements
COMSYS Holdings Corporation (the “Company”)

outside Japan. Also, certain prior year accounts

and its subsidiaries (together, the “Companies”)

have been reclassified to conform to the 2009 pre-maintain their accounting records and prepare

sentation, without any impacts on results of oper-

their financial statements in conformity withations or retained earnings reported previously.

accounting principles and practices generally

The accounts and records of the Companies

accepted in Japan (the “GAAP of Japan”), which

are maintained in Japanese yen. The accompany-

differ in certain respects as to application and dis-ing consolidated financial statements have beenclosure requirements from International Account-presented in Japanese yen and have also beening Standards. The accompanying consolidated

presented in U.S. dollars by translating all Japa-

financial statements have been compiled from thenese yen amounts using the rate of ¥98.23 toconsolidated financial statements filed with the

US$1. The presentation of such dollar amounts is

Financial Services Agency as required by the Secu-

solely for the convenience of the reader and is not

rities and Exchange Laws of Japan. Certain reclas-

intended to imply that yen amounts have been orsifications of account balances have been madecould be converted, realized or settled in dollars

so as to present the consolidated financial state-at that or at any other rate.

ments in a form that is more familiar to readers

2. Summary of Significant Accounting Policies(a) Principles of consolidationin unconsolidated subsidiaries and affiliates are

The accompanying consolidated financial state-carried at cost due to their immateriality.

ments include the accounts of the Company and32 subsidiaries (see “Corporate Directory” at the

All of the subsidiaries were consolidated on thebasis of fiscal periods ending 31st March.

last page of this annual report) over which theGoodwill, including negative goodwill, is amor-

Company exerts substantial control either throughtized by the straight-line method over reasonablemajority ownership of voting shares and/or byeconomical life up to 20 years; while goodwill

other means. For the purposes of preparing thewithout materiality is amortized at the incurrence.

consolidated financial statements, all significant
inter-company transactions, account balances(b) Use of estimatesand unrealized profits among the Companies haveManagement of the Company has made a number

been eliminated.

of estimates and assumptions relating to the

The accounts of other subsidiaries and affiliates

reporting of assets and liabilities to prepare thewere not consolidated, since their aggregate sales,

accompanying financial statements in conformity

total assets, net income and retained earnings

with the GAAP of Japan. Actual results could differ

have little affect upon the total consolidated

from these estimates.

results of operations and assets. Also, investments

81

82

COMSYS Holdings Corporation

Notes to the Consolidated Financial Statements(c) Point of sales—construction contracts

carrying their amounts at cost, determined by theConstruction contracts of the Companies are

moving average cost.

accounted for by the completed-contract method.
The accumulated cost of uncompleted construction is shown as “Accumulated cost of construc-(f) Accumulated cost of construction inprogresstion in progress” and the related billings (advances

In connection with (c) above, “Accumulated costreceived) on uncompleted construction contractsof construction in progress” is stated at cost based

are shown as “Advances received on construction

on an individual project basis.

in progress” in the accompanying balance sheets.
(g) Property and equipment(d) Cash and cash equivalents

Property and equipment are stated at cost. Depre-

Cash and cash equivalents include all highly liquid

ciation is computed primarily by the declining-

investments, generally with original maturities ofbalance method; while the straight-line method isthree months or less, those are readily convertible

applied to building acquired after 1st April, 1998,

to known amounts of cash and are so near matu-

both using estimated useful lives of assets princi-rity that they present insignificant risk of changes

pally as follows:in value because of changes in interest rates.
(e) Short-term investments and investment
securities

Buildings and structures

2 to 50 years(h) Intangible assets and deferred charges
Intangible assets including software are carried at

The GAAP of Japan requires the classification of

cost and amortized by the straight-line method

short-term investments and investment securi-

over the estimated useful lives of assets. The usefulties (except for “unconsolidated subsidiaries andlife of software utilized in the Companies is esti-

affiliates”) of the Companies into three categories

mated to be 5 years. Research and development

as follows:

costs are charged to income as incurred.

i)	Debt securities that are expected to be heldto-maturity: carried at accumulated cost using(i) Leases

straight-line method.

As a lessee, under the GAAP of Japan effectiveii)	Other securities whose fair values are readily

from the fiscal year beginning from and on 1st

determinable: carried at fair value with unreal-

April, 2008, the financial leases that do not trans-

ized gains or losses included in Stockholders’fer ownership of the property to lessee are

Equity as “Unrealized gain (loss) on securities,”

accounted for as transactions of acquisition of

net of applicable income taxes.

assets; while such financial leases commencediii)	Other securities whose fair values are not read-

before and on 31st March, 2008 are allowed to be

ily determinable: carried at cost using moving-accounted for as transactions of rent, but certain

average method.

“as if capitalized” information in the notes to theWith respect to investments in unconsolidated

financial statements are required.

subsidiaries and affiliates, the Companies areAnnual Report 2009

Notes to the Consolidated Financial Statements(j) Impairment of long-lived assets

the elimination of unrealized profits among the

The Companies’ long-lived assets are reviewed for

Companies and the adjustment of the allowance

impairment whenever events or changes in cir-for doubtful receivables caused by the offsetting

cumstances indicate the carrying amount of anof inter-company receivables and payables.

asset or assets in a group might not be recoverable. An impairment loss should be recognized if(l) Appropriations of retained earnings

the carrying amount of those assets exceeds theAppropriations of retained earnings of the Com-sum of the expected undiscounted future cash

pany at each year-end are reflected in the consoli-

flows arising from the continual use and subse-

dated financial statements for the following year

quent disposition of those assets. The impairment

upon shareholders’ approval (See Note 12).

loss should be measured by difference between
the carrying amount and their recoverable(m) Net income and cash dividends per shareamount, which is higher of the expected dis-

The computations of basic net income per sharecounted future cash flows arising from the con-are based on the weighted average number oftinual use and subsequent disposition of thoseshares outstanding during each year. The GAAP ofassets or the net selling price at disposition.

Japan requires deductions of the amounts withwhich stockholders of common stock are not(k) Income taxes

vested (e.g. bonus paid to directors and corporate

Deferred tax assets and liabilities arising fromauditors) from net income when computing net

temporary differences between financial and tax

income per share.

reporting are measured using the enacted tax

Cash dividends per share are based on therates and laws which will be in effect when the dif-cash dividends applicable to the respective years,

ferences are expected to reverse. In the prepara-

including dividends to be paid after the end oftion of the consolidated financial statements,

the year.

deferred tax assets and liabilities also arose from

83

84

COMSYS Holdings Corporation

Notes to the Consolidated Financial Statements

3. Short-term Investments and Investment Securities—other
Information that is required to be disclosed inas amended to conform to certain reclassifica-

the Notes to the consolidated financial state-

tions of account balances made to present thements by the regulations and rules on disclosuresconsolidated financial statements, consists of theunder the Securities and Exchange Laws of Japan,

following:(a) Other securities whose fair value was readily determinable as at 31st March, 2008 and 2009, wereas follows:

Classification

StocksBonds and debentures
Others
Total

Classification

StocksBonds and debentures
Others
Total

Classification

StocksBonds and debentures
OthersTotal

Cost¥ 4,399565
1,051¥ 6,015

Cost¥ 4,480
569
860¥ 5,909

Cost$45,607
5,793
8,755
$60,155

Millions of yen
31st March, 2008
Gross
Gross
Unrealized
Unrealized
Gains
Losses

¥

¥

472
3
11
486

¥

¥

764
102
90
956

Millions of yen
31st March, 2009
Gross
Gross
Unrealized
Unrealized
Gains
Losses

¥

¥

389
1
0
390

¥ 1,25293
161¥ 1,506

Thousands of U.S. dollars
31st March, 2009
Gross
Gross
Unrealized
Unrealized
Gains
Losses$ 3,960
100$ 3,970$12,745
947
1,639$15,331

Fair
Value

¥ 4,107466
972¥ 5,545

Fair
Value

¥ 3,617477
699¥ 4,793

Fair
Value

$36,822
4,856
7,116
$48,794

Annual Report 2009

Notes to the Consolidated Financial Statements(b) Proceeds from sales of other securities and realized gains/losses on such sales, cost of the sales being
determined by moving average method, for the year ended 31st March, 2008 and 2009, were as follows:
Thousands of
U.S. dollars
For the year
ended 31st
March
2009

Millions of yen
For the year ended
31st March
2008
2009

Proceeds from sales
Realized gains
Realized losses

¥

¥

119
64
–

111
77
0

$ 1,1307840(c) Other securities whose fair value was not read-(d) Debt securities that are expected to be held-

ily determinable as at 31st March, 2008 and 2009

to-maturity and other securities with maturity

mainly consisted of unlisted stocks amounted

dates as at 31st March, 2009 consisted of theto ¥1,641 million and ¥651 million (US$6,627

following:­thousand), respectively.
Millions of yen
31st March, 2009

Bonds and debentures
OthersTotal

Due:
Within 1 yr.

Within 5 yr.

Within 10 yr.

After 10 yr.

¥

¥

¥

¥

¥

5
–
5

¥

165
–
165

¥

–
2
2

¥

400
–
400

Thousands of U.S. dollars
31st March, 2009

Bonds and debentures
OthersTotal

Due:
Within 1 yr.

$
$

51
–
51

Within 5 yr.

Within 10 yr.

After 10 yr.

$ 1,680–$ 1,680$$ 4,072–$ 4,072

$

–
20
20

For the years ended 31st March, 2008 and 2009, the Companies made write-down ofwhich requires a write-down of investment secuinvestment securities, whose fair value was readily
determinable, amounting to ¥140 million andrities whose fair value at the fiscal year’s end¥617 million ($6,281 thousand), respectively, fol-

declined to an amount not more than 50% of thelowing an accounting policy of the Companies

book value.

85

86

COMSYS Holdings Corporation

Notes to the Consolidated Financial Statements

4. Long-term Debt
Long-term debt as at 31st March, 2008 and 2009 consisted of the following:
Millions of yen
2008
2009

Loans from banks
Capital lease obligations¥Less: Current portion
¥

71
–
71
61
10

¥

¥

Thousands of
U.S. dollars
2009

157
22
179
63
116

$ 1,598
224
1,822
641
$ 1,181

At 31st March, 2009, a consolidated subsidiary’s long-term bank loans amounting to ¥46 million (US$468
thousand) were secured. A summary of assets pledged as collateral consisted of the following:
Millions ofyen

Buildings and structures, net of accumulated depreciation
Land

¥
¥

200
375
575

Thousands of
U.S. dollars$ 2,036
3,818$ 5,854

Aggregate amounts of annual maturities of long-term debt as at 31st March, 2009 consisted of
the following:
Fiscal year ending 31st March

2010
2011
2012
2013
2014
2015 and later

Millions of
yen

¥

¥

63
36
28
17
12
23
179

Thousands of
U.S. dollars

$

641
367
285
173
122
234
$ 1,822“Short-term borrowing and current portion of­borrowing of one of the Companies from its direc-

long-term debt” in the consolidated balance sheet

tor, bearing no interest thereon, amounted to ¥7

as at 31st March, 2009 include the short-term

million (US$71 thousand).

Annual Report 2009

Notes to the Consolidated Financial Statements

5. Accrued Severance Indemnities
Employees of the Companies are usually entitledplan assets include an employee retirement ben-to lump-sum severance indemnities determined

efit trust to which COMSYS, SANCOM and TOSYS

by reference to their current basic rate of pay,

contributed certain marketable equity securities.

length of service and conditions under which the

Other consolidated subsidiaries provide fortermination occurs. With respect to directors andseverance indemnities based on the liability if all

corporate auditors of the Companies, lump-sum

eligible employees were to voluntarily terminate

severance indemnities are calculated using a simi-

employment on the balance sheet date. In addi-

lar formula and are normally paid subject to thetion, certain subsidiaries have funds for tax quali-

approval at the shareholders’ meeting of each offied defined benefit pension plans and a few

the Companies.

subsidiaries have non-contributory and funded

COMSYS has a contributory and funded defined

defined benefit pension plans.

benefit pension plan, which is pursuant to the“Accrued severance indemnities” recognized in

Welfare Pension Insurance Law of Japan. As quali-

the accompanying balance sheet as at 31st March,

fied and allowed under the GAAP of Japan, the2008 and 2009 were as follows:
Millions of yen
2008
2009

Projected benefit obligation
Fair value of plan assets
Unfunded benefit obligation
Unrecognized actuarial difference
Unrecognized prior service cost
Net amount recognizedPrepaid pension costAccrued severance indemnities¥ (42,699)
40,801(1,898)6,870(3,829)1,143
4,404¥ (3,261)¥(41,411)
32,993(8,418)13,389(3,603)1,368
4,217¥ (2,849)

Thousands of
U.S. dollars
2009$(421,572)
335,875(85,697)
136,303(36,679)
13,92742,930$ (29,003)

87

88

COMSYS Holdings Corporation

Notes to the Consolidated Financial Statements“Accrued severance indemnities” in the consoli-

Net pension cost of the plans included in thedated balance sheet as at 31st March, 2008 andconsolidated statements of income for the years

2009 include the provision for accrued severance

ended 31st March, 2008 and 2009 were as follows:

indemnities for directors and corporate auditorsof the Companies amounted to ¥694 million and¥672 million (US$6,841 thousand), respectively.
Millions of yen
2008
2009

Service cost
Interest cost
Expected return of plan assets
Amortization of unrecognized actuarial difference
Amortization of unrecognized prior service costs (negative)Other
Net pension cost¥ 2,605
992(1,336)
392
(332)
135
¥ 2,456¥ 2,597
961(1,267)
804
(327)
178
¥ 2,946

Thousands of
U.S. dollars
2009$ 26,438
9,783(12,898)
8,185(3,329)1,812$ 29,991

Unrecognized prior service costs are amortized

Significant assumptions used to calculate theand charged to income using a straight-line

above-mentioned amount for the year ended 31st

method over the average remaining years of ser-March, 2009 were as follows:

vice of employees at the incurrence. Unrecognized• Allocation method of benefit obligation

actuarial differences are amortized and charged		Straight-line method

to income using a straight-line method from the• Discount rate

2.5% (mainly)

succeeding year of the incurrence over the aver-• Expected rate of return on plan assets

age remaining years of service of employees at		the incurrence.

• Unrecognized prior service cost is amortized

3.8% (mainly)

over mainly 15 years.
• Unrecognized actuarial difference is amortizedover mainly 15 years from the succeeding fiscal
year of the incurrence.

Annual Report 2009

Notes to the Consolidated Financial Statements

6. Income Taxes
The Companies are subject to corporate (national),
inhabitant and enterprise (local) taxes based upontaxable income, which resulted in statutory tax
rates of approximately 40%, in aggregate, both forthe year ended 31st March, 2008 and 2009. The
effective tax rate reflected in the accompanying
consolidated statements of income and retained

Statutory tax rate of the Company
Effects of;
Expenses permanently not deductible   for income tax purpose
Amortization of negative goodwill
Valuation allowance
Other, net
Effective tax rate

40.0%

1.8
(2.6)
0.7
(1.3)
38.6%

earnings differs from the statutory tax rate primarily due to such items as permanently non-­Deferred tax assets and liabilities of the Com-

deductible expenses and timing differences inpanies, except for that relating to land revalua-recognizing certain income and expense items fortion of COMSYS mentioned in Note 9, as of 31st

financial and tax reporting purposes.

March, 2008 and 2009, primarily consisted of the

The difference between the statutory tax rate

following:

and effective tax rate reflected in the consolidated
statements of income for the year ended 31st
March, 2009, primarily consisted of the following:
Millions of yen
2008
2009

Deferred tax assets:
Accrued expenses and enterprise taxes
Accrued severance indemnities
Allowance for doubtful receivables
Revaluation of land owned by consolidated subsidiaries
Write-down of investment securities
OthersLess: Valuation allowance
Deferred tax liabilities:
Deferred gain on exchange of lands
Revaluation of land owned by consolidated subsidiaries
Others   Net deferred tax assets

Thousands of
U.S. dollars
2009¥ 2,954
2,296
1,092
850
1,254
1,252
9,698
(1,739)7,959¥ 3,241
962
836
848
1,104
1,584
8,575
(1,906)6,669$ 32,994
9,793
8,511
8,633
11,23916,12587,295(19,403)
67,892(360)(1,546)(158)(2,064)¥ 5,895(400)(1,228)(81)(1,709)¥ 4,960(4,072)(12,501)(825)(17,398)$ 50,494

89

90

COMSYS Holdings Corporation

Notes to the Consolidated Financial Statements

7. Leases(As a Lessee)

property were computed by the straight-line

As mentioned in the Note 1(i) above, the financial

method over the respective lease terms) and net

leases commenced before and on 31st March,book value of leased property as of 31st March,2008 are accounted for as transactions of rent. Pro

2008 and 2009, which would have been reflected

forma amounts of the acquisition costs (includingin the consolidated balance sheets if capitalized,

the interest portion thereon), accumulated depre-

were as follows:

ciation (depreciation expenses of the leased
Millions of yen
2008
2009

Acquisition costs
Accumulated depreciation
Net book value¥ 2,271797¥ 1,474¥ 2,234
1,160¥ 1,074

Thousands of
U.S. dollars
2009$ 22,743
11,809$ 10,934

Lease payments relating to financial leases accounted for as transactions of rent amounted to ¥318
­million and ¥392 million (US$3,991 thousand) for the years ended 31st March, 2008 and 2009, respectively.
Obligation (including the interest portion thereon) under financial leases at 31st March, 2009, wereas follows:
Millions of
yen
2009

Due within one year
Due after one year
Total

¥

336
738
¥ 1,074

Thousands of
U.S. dollars
2009$ 3,421
7,513$ 10,934(As a Lessor)
One of the Companies has sales type leases as its business.
The amount, relating to the sales type leases, included in “Other current assets” of the accompanying
balance sheet as at 31st March, 2009 were as follows:
Millions of
yen
2009

Lease payments receivable
Unguaranteed residual value
Unearned interest income

¥

937
20
(107)
¥ 850Thousands of
U.S. dollars
2009$ 9,539204(1,090)$ 8,653

Annual Report 2009

Notes to the Consolidated Financial Statements

Aggregate amounts of lease payments receivable as at 31st March, 2009 consisted of the following:
Fiscal year ending 31st March

2010
2011
2012
2013
2014
2015 and later

Millions of
yen

¥

¥

283
243
209
159
40
3
937

Thousands of
U.S. dollars$ 2,881
2,474
2,128
1,619
407
30
$ 9,539

8. Shareholders’ Equity
Under the Corporation Act of Japan, the additional

capital, it is available for distributions by the reso-

paid-in capital (capital reserves) may be, by reso-

lution of the shareholders’ meeting within a cer-lution of shareholders’ meeting, transferred totain limit. The amount of the additional paid-in

stated capital by or used to reduce a deficit, but

capital (capital reserves) of the Company included

they are not available for dividend payment. On

in “Additional paid-in capital” and “Retained

condition that the aggregate amount of additional­earnings” of the accompanying balance sheets

paid-in capital (capital reserves) remains equal to

as at 31st March, 2009, was ¥58,816 million

or exceeds 25 per cent of the amount of stated(US$598,758 thousand).

9. Revaluation of Land for BusinessAt 31st March, 2002, land owned by the COMSYS

The fair value for the revalued land mentioned

was revalued under the Land Revaluation Law andabove as of 31st March, 2008 and 2009 has been

related regulations. Net unrealized gains andincreased by ¥3,712 million and ¥5,599 million

losses resulting from the revaluation were debited(US$56,999 thousand), respectively, in the aggre-

directly to shareholders’ equity as a negativegate from the book value, which has not beenrevaluation surplus after adding the related

restated, as allowed by the GAAP of Japan.

deferred tax liabilities as mentioned bellow. The
negative revaluation surplus will be credited as again or loss when a part of the land is sold.

91

92

COMSYS Holdings Corporation

Notes to the Consolidated Financial Statements

Deferred tax assets and liabilities relating to revaluation of land of the Company as of 31st March, 2009
consisted of the following:

Deferred tax assets:
Relating to unrealized losses
Less: Valuation allowance
Deferred tax liabilities:
Relating to unrealized gains
Net: Deferred tax liabilities

Millions of
yen
2009

Thousands of
U.S. dollars
2009¥ 4,578(4,578)–$ 46,605(46,605)–2,366¥ 2,366

24,086$ 24,086

10. Other Income and Expenses“Other, net” in “Other Income (Expenses)” for the year ended 31st March, 2008 and 2009 consisted of
the following:
Millions of yen
2008
2009

Amortization of consolidation adjustments/
negative goodwill
Gain on sales of fixed assets
Special payments on employees’ retirement benefits
Gain on payback of insurance payments
Write-down on investments in securities and other assets
Loss on impairment of fixed assets
Gain on sales of investment securities
Loss on disposals of fixed assets
Allowance for doubtful receivables
Other¥ 1,529
449
(276)
275
(199)
(91)
64
(49)
(8)
135
¥ 1,829¥ 1,070
43
(123)
120
(761)
(8)
77
(151)
(67)
243
¥ 443Thousands of
U.S. dollars
2009$ 10,893
438(1,252)
1,221(7,747)(82)
784(1,537)(682)
2,474$ 4,510

Annual Report 2009

Notes to the Consolidated Financial Statements

11. Stock-based Compensation Plans
The stock option plans as of 31st March, 2009 is as follows:

Date of grant
Number of shares granted
Category and number of grantees:
Directors of the Company
Directors of the Companies and affiliates
Senior officers of the Companies
Employees of the Companies and affiliates
Target service period:
From and on
Until and on
Exercisable period:
From and on
Until and on
Outstanding balance at 31st March, 2009:
ExercisableNot exercisable
Exercise price
Fair value of the stock option at date of the grantConditions for determination of the rights

Outstanding share subscription rights
No. 1
No. 2

7th October, 2005
Common stock
924,000 shares

29th August, 2008
Common stock
993,000 shares

10
60
29
679

8
121
40
470

7th October, 2005
30th June, 2007

29th August, 2008
29th August, 2010

1st July, 2007
30th June, 2011

30th August, 2010
29th August, 2014

900,000 shares–¥1,304–Note 1–
990,000 shares¥974¥227 (Note 2)
Note 1

Notes: 1.	Among exercisable period, the guarantee must be a director of the Company, the Companies or affiliates, or a senior officer of theCompanies, or an employee of the Companies or affiliates, except in the event of leaving post or resigning with fair reasons.
2.	The fair value is estimated using Black-Scholes model with the assumptions of the followings;• Volatility of stock price—35.6%, calculated on the observed share price for the four-year period (beginning 29th August, 2004 andending 29th August, 2008).
• Estimated residual period—4 years, exercise date is assumed at the mildest date of the exercisable period due to the difficulties
involved in making a rational estimate arising from the absence of sufficient data.
• Estimated dividend—¥17 per share, based on the results for the fiscal year ended 31st March, 2008.
• Risk-free interest rate—0.91%, observed interest yield of Japanese Governmental Bonds corresponding to the estimated residual period.

Allocated cost for the stock option plan for the year ended 31st March, 2009, amounted to ¥69 million(US$702 thousand), was included in “Selling, General and Administrative Expenses” of the accompanying
statements of income.

12. Subsequent Event(a) On 13th May, 2009, the Board of Directors

in order to improve shareholders’ interest andapproved the acquisition of treasury stock fromenable the flexible establishment of an appropri-

the capital stock market during the period start-

ate capital strategy.

ing from 14th May, 2009 and ending on 31st(b) On 26th June, 2009, the shareholders of the

December, 2009, of up to 7,500 thousand sharesCompany approved the following appropriationsand ¥5,000 million ($50,901 thousand) in aggregate,of retained earnings:

Cash dividends

Millions ofyen

Thousands of
U.S. dollars¥ 1,311$ 13,346

93

94

COMSYS Holdings Corporation

Report of Independent Certified Public Accountants

To the Board of Directors,
COMSYS Holdings Corporation
We have audited the accompanying consolidated balance sheets of COMSYS ­Holdings
Corporation (the “Company”) and its consolidated subsidiaries as of 31st March, 2008
and 2009, and the related consolidated statements of income, changes in net assets andcash flows for each of the two year ended 31st March, 2009, expressed in Japanese yen.
Preparing these consolidated financial statements is the responsibility of the Company’s
management. Our responsibility is limited to express an independent opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted inJapan, which require that we plan and perform the audits to obtain reasonable assurance
about whether the financial statements are free of material misstatement. Our audits
include examining evidence supporting the amounts and disclosures of the financial
statements on a test basis, and also include assessing the accounting policies adopted
and significant estimates made by the Company’s management, as well as evaluating theoverall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, inall material respects, the consolidated financial position of COMSYS Holdings ­Corporationand its consolidated subsidiaries as of 31st March, 2008 and 2009, and the consolidated
results of their operations and cash flows for each of the two year ended 31st March,
2009, in conformity with accounting principles and practices generally accepted in Japanas described in Note 1 to the consolidated financial statements.
The U.S. dollar amounts, presented solely for the convenience of the readers, have beentranslated on the basis as described in Note 1 to the consolidated financial statements.

Takashi Saitou
Tomoyoshi Suzuki
Satoshi Okawara
O-Yu Kyodo Jimusho, Certified Public Accountants of JapanTokyo, Japan
26th June, 2009

Annual Report 2009COMSYS Holdings Information
Corporate Data As of 31st March, 2009
Name:

Date of Establishment:

Head Office:Paid in Capital:

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

URL:

29th September, 2003
¥10 billion

Number of Employees:
8,203 (Consolidated)

http://www.comsys-hd.co.jp/

Corporate History
April 2009

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

April 2007

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

October 2005

COMSYS Holdings Corporation converted Kokusai Densetsu Co., Ltd. (now COMSYSWING Corporation) into a wholly owned subsidiary through a stock exchange, andmade Kokusai Densetsu a wholly owned subsidiary of Nippon COMSYS Corporationon the same day.

April 2005

SANWA ELEC Co., Ltd. was renamed SANWA COMSYS Engineering Corporation.

January 2005

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

September 2004 COMSYS Holdings Corporation subscribed to a third-party allotment of shares by
SANWA ELEC Co., Ltd.
September 2003 COMSYS Holdings Corporation listed its shares on the first sections of the Tokyo Stock
Exchange and Osaka Securities Exchange.
September 2003 Nippon COMSYS Corporation delisted its shares in line with the establishment of theholding company.
March 2002

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.

95

96

COMSYS Holdings Corporation

COMSYS Holdings Information

ORGANIZATION CHART As of 26th June, 2009
Board of Directors
Board of Corporate Auditors

President
Advisory Board

Senior Management Committee

CSR Committee
Corporate Compliance Committee
Risk Management Committee
Personal Information Protection
and Administration Committee
Corporate Planning
Department

IR Department

Finance & Accounting
Department

General Affairs
Department

Personnel
Department• General Aﬀairs Unit
• Legal Unit
• PR Unit• CSR Office• Corporate Planning Unit
• Corporate Strategy Unit
• Strategy Planning Unit
• Corporate Information Unit

Internal Control
Audit Department• Internal Control Oﬃce
• Internal Audit Oﬃce

Hokkaido

Akita
Shibata/Nagaoka/Joetsu
Kanto Naka
Sado
Niigata

NIIGATANAGANO

Hokuriku

NaganoUeda/Saku/Matsumoto/Shiojiri/Suwa/Iida/Ina

TOKYO

IbarakiTohokuTochigi
Chiba

Kanagawa
Kanto Minami

Chugoku
KyushuShizuoka
KansaiTokai
Nishi Nippon
Takamatsu
Shikoku

Jakarta Branch Office
Okinawa

Fukushima

HachiojiHead Office/COMSYS Holdings Corporation
Head Office/Nippon COMSYS Corporation
Head Office/SANWA COMSYS Engineering Corporation
Head Office/TOSYS Corporation
Branch Office/TOSYS Corporation
Branch/Nippon COMSYS Corporation
Branch/SANWA COMSYS Engineering Corporation
Branch/TOSYS Corporation

Annual Report 2009

Investor Information As of 31st March, 2009
Fiscal Year-End:
31st March, 2009

Major Shareholders:
As of 31st March, 2009
Shares Held(Thousands)

Percentage
of Total (%)

Japan Trustee Services Bank, Ltd.
(Trust Account)

18,068

12.37

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

12,962

8.87

Japan Trustee Services Bank, Ltd.
(Mitsui Asset Trust and Banking Company
Retrust Portion, Fujikura Ltd. Employee
Pension Trust)

6,834

4.68

7,942

Japan Trustee Services Bank, Ltd.
(Trust Account 4G)

5,937

4.06

Date of Listing:Japan Trustee Services Bank, Ltd.
(The Sumitomo Trust & Banking Co., Ltd.
(Re-Trust Account), Sumitomo Electric Industries, Ltd. (Employee Pension Trust Account))

5,166

3.53

The Furukawa Electric Co., Ltd.

5,166

3.53

First Section of Tokyo Stock Exchange
and Osaka Securities Exchange(Securities code: 1721)

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

3,254

2.22

JPMorgan Securities Japan Co., Ltd.

2,985

2.04

Transfer Agent:

Nippon Life Insurance Company

2,683

1.83

FUJITSU LIMITED

2,413

1.65

Annual Shareholders’ Meeting:
26th June, 2009

Common Stock:

Authorized: 580,000,000 shares
Issued: 145,977,886 shares

Number of Shareholders:

September 2003

Stock Exchange Listings:

Mitsubishi UFJ Trust and Banking Corporation
Securities Department
4-5, Marunouchi 1-chome
Chiyoda-ku, Tokyo 100-8212

Auditor:

Certified Public Accountants of Japan
O-Yu Kyodo Office

For further information and additional copiesof this Annual Report, please contact
IR Department
Tel: +81-3-3448-7000 (direct)
Fax: +81-3-3448-7001
E-Mail: chd-ir@comsys-hd.co.jp

Shareholders

The Company held 14,924,467 shares of treasury stock (representing a shareholdingof 10.22%) as of 31st March, 2009. This shareholding has been excluded from the listof major shareholders.

Composition of Shareholders:
As of 31st March, 2009
Individuals and Others

21.55%

Securities Companies

3.60%

Foreign Companies
and Individuals

15.03%

Domestic Companies

10.90%

Financial Institutions

48.92%

Stock Price Range
(Yen)
1,600

(Thousand of Shares)
160,000

1,400

140,000

1,200

120,000

1,000

100,000

800

80,000600

60,000400

40,000200

20,0000

007/4 07/5 07/6 07/7 07/8 07/9 07/10 07/11 07/12 08/1 08/2 08/3 08/4 08/5 08/6 08/7 08/8 08/9 08/10 08/11 08/12 09/1 09/2 09/3 (Month)n n Stock Price (Left Scale)   n Monthly Trading Volume (Right Scale)

97

98

COMSYS Holdings Corporation

Index
Broadband
Letter to Our Shareholders ����������������������������� 12
Review of Operations ���������������������������������������� 21
Management Discussion
and Analysis ����������������������������������������������� 55, 56

Cable TV
Review of Operations �������������������������������� 25, 27
Management Discussion and Analysis ������� 55

Digital terrestrial TV broadcasting
Review of Operations �������������������������������� 25, 27
Electrical Communications
Engineering Business
Consolidated Financial Highlights ������������������ 4
Business at a Glance ������������������������������������������ 18
Review of Operations ���������������������������������������� 24
Management Discussion
and Analysis ��������������������������������������� 54, 62, 63

Cash flows
Consolidated Financial Highlights ������������������ 4
Management Discussion
and Analysis ����������������������������������������������� 69, 70
Consolidated Statements ofCash Flows �������������������������������������������������� 79, 80
Notes to the Consolidated
Financial Statements �������������������������������������� 83
Report of Independent
Certified Public Accountants ����������������������� 94

FTTH (Fiber To The Home)COMSYS JOHO SYSTEM Corporation

IT Solutions Business

Our Group Formation ������������������������������������������ 3
Letter to Our Shareholders ����������������������������� 15
Corporate Governance ������������������������������������� 39
Directors and Officers ��������������������������������������� 50
COMSYS Holdings Information ��������������������� 95

CSR
Corporate Governance ������������� 39, 43, 45, 47
COMSYS Holdings Information ��������������������� 96

Review of Operations ������������������������ 22, 27, 35
Management Discussion
and Analysis ���������������������� 55, 56, 58, 61, 65

Internal Control System
Corporate Governance ����������������������������� 36, 40
Management Discussion
and Analysis ������������������������������������������������������� 64

Consolidated Financial Highlights ������������������ 4
Business at a Glance ������������������������������������������ 18
Review of Operations �������������������������������� 28, 29
Management Discussion
and Analysis ��������������������������������������� 54, 58, 61

Market Conditions
Review of Operations ������� 21, 25, 26, 29, 33

Annual Report 2009

Index

Nippon COMSYS Corporation
Our Group Formation ������������������������������������� 2, 3
Operating Companies ����������������������������������������� 8
Letter to Our Shareholders ����������������������������� 15
Corporate Governance ������������������������������������� 39
Directors and Officers ��������������������������������������� 50
Management Discussion and Analysis ������� 54
COMSYS Holdings Information ������������� 95, 96

NTT Information Telecommunication
Engineering Business
Consolidated Financial Highlights ������������������ 4
Business at a Glance ������������������������������������������ 18
Review of Operations.......................................... 20
Management Discussion
and Analysis ��������������������������������������� 54, 58, 61
COMSYS Holdings Information ��������������������� 95

Risk
Corporate Governance ���� 39, 42, 43, 45, 46
Management Discussion
and Analysis ���������������������� 64, 70, 71, 72, 73
Notes to the Consolidated
Financial Statements ���������������������� 82, 93, 96

SANWA COMSYS Engineering
Corporation
Our Group Formation ������������������������������������������ 2
Operating Companies ������������������������������������ 8, 9
Corporate Governance ������������������������������������� 39
Management Discussion and Analysis ������� 54
COMSYS Holdings Information ������������� 95, 96

Social System-Related Businessand Other
Consolidated Financial Highlights ������������������ 4
Business at a Glance ������������������������������������������ 18
Review of Operations �������������������������������� 32, 33
Management Discussion and Analysis ������� 54

the NCC (New Common Carrier)Business
Aiming for Growth ��������������������������������������������� 10
Business at a Glance ������������������������������������������ 19
Review of Operations �������������������������������� 24, 27
Management Discussion
and Analysis ��������������������������������������� 58, 62, 65

the next generation network (NGN)
Review of Operations �������������������������������� 21, 23
Management Discussion and Analysis ������� 56
TOSYS Corporation
Our Group Formation ������������������������������������������ 2
Operating Companies ������������������������������������ 8, 9
Corporate Governance ������������������������������������� 39
Directors and Officers ��������������������������������������� 50
Management Discussion and Analysis ������� 54
COMSYS Holdings Information ��������������������� 96

WiMAX
Letter to Our Shareholders ����������������������������� 13
Review of Operations ���������������� 21, 25, 26, 27
Management Discussion
and Analysis ����������������������������������������������� 56, 62

99

COMSYS Holdings Corporation
17-1, Higashigotanda 2-chome, Shinagawa-ku, Tokyo 141-8647, Japan
Tel: 81-3-3448-7100
http://www.comsys-hd.co.jp/