Panasonic Information Systems Co., Ltd. · * Panasonic Information Systems Co., Ltd. is planning to hold a briefing session for investors as detailed below. Information is to be posted

April 23, 2013

Panasonic Information Systems Co., Ltd. Consolidated Financial Statements for the Year Ended March 31, 2013 [JGAAP]

Name of the Company: Panasonic Information Systems Co., Ltd.

Registered Stock Exchange: First Section, Tokyo Stock Exchange

Code No.: 4283

URL: http://is-c.panasonic.co.jp/

Representative: Kazuhiro Maegawa, Representative Director and President

Contact: Tatsuo Yoshikawa, Director and Account Manager

Telephone: +81-6-6906-2801

Planned Date for the Regular Shareholders’ Meeting: June 21, 2013

Planned Dividend Payment Date: June 3, 2013

Planned Submission Date of the Annual Securities Report: June 24, 2013

Availability of Supplementary Briefing Material on Annual Results: Available

Schedule of Annual Results Briefing Session: Scheduled (for institutional investors and analysts)

(Amounts less than one million yen have been omitted.)

1. Operating Results and Financial Position for the Fiscal Year Ended March 31, 2013

(April 1, 2012 – March 31, 2013)

(1) Operating results (% shows the change from the previous year)

Net sales Percentage

change Operating

income Percentage

change Ordinary income

Percentage change

(¥ million) (%) (¥ million) (%) (¥ million) (%)

Year ended March 31, 2013 35,178 (3.3) 4,424 4.0 4,411 2.7

Year ended March 31, 2012 36,373 6.3 4,254 1.2 4,293 0.6

Note: Comprehensive income: Year ended March 31, 2013: ¥2,672 million (21.9%), Year ended March 31, 2012: ¥2,192 million (-8.4%)

Net income Percentage

change Net income per share

Diluted net income per

share

Return on equity

Ratio of ordinary

income to total

assets

Operating margin

(¥ million) (%) (¥) (¥) (%) (%) (%)

Year ended March 31, 2013 2,701 21.3 253.56 － 11.3 14.6 12.6

Year ended March 31, 2012 2,227 (13.7) 209.02 － 10.1 15.2 11.7

Reference: Investment profit or loss on the equity method:Year ended March 31, 2013: ¥- million, Year ended March 31, 2012: ¥- million

(2) Financial positions

Total assets Net assets

Ratio of shareholders' equity to total assets

Net assets per share

(¥ million) (¥ million) (%) (¥)

Year ended March 31, 2013 31,355 24,838 79.2 2,330.98

Year ended March 31, 2012 29,011 22,858 78.8 2,145.22

Reference: Shareholders’ equity: Year ended March 31, 2013: ¥24,838 million, Year ended March 31, 2012: ¥22,858 million

(3) Cash flows

Cash flows from operating activities

Cash flows from investing activities

Cash flows from financing activities

Cash and cash equivalents at the end

of the period

(¥ million) (¥ million) (¥ million) (¥ million)

Year ended March 31, 2013 4,669 (12,298) (940) 5,499

Year ended March 31, 2012 3,834 6,908 (903) 14,069

2. Dividend

Annual dividend per share

Total dividend (Annual)

Payout ratio (Consolidated)

Dividends/ Net assets

(Consolidated)

1Q (¥) 2Q (¥) 3Q (¥)Year end

(¥) Annual

(¥) (¥ million) (%) (%)

Year ended March 31, 2012 － 32.50 － 32.50 65.00 692 31.1 3.1

Year ended March 31, 2013 － 32.50 － 32.50 65.00 692 25.6 2.9

Year ending March 31, 2014 (Forecast)

－ 32.50 － 32.50 65.00 25.5

3. Forecast of Operating Results and Financial Position for the Fiscal Year Ending March 31, 2014

(April 1, 2013– March 31, 2014)

(% shows the change from the previous year)

Net sales

Percentage change

Operating income

Percentage change

Ordinary income

Percentage change


First half ending September 30, 2013

16,900 0.2 2,050 1.3 2,050 0.8

Year ending March 31, 2014 36,000 2.3 4,450 0.6 4,450 0.9

Net income

Percentage change

Net income per share

(¥ million) (%) (¥)

First half ending September 30, 2013

1,250 1.2 117.31

Year ending March 31, 2014 2,720 0.7 255.26

*Annotations

(1) Significant changes in subsidiaries in the fiscal year (transfer of specified subsidiaries resulting in a

change in the scope of consolidation): None

Newly accounted: 0 (Company name: ) Excluded from account: 0 (Company name: )

(2) Changes in accounting policy and accounting estimates, and restatements

(a) Changes accompanying the revisions to items such as accounting standards: None

(b) Other changes: None

(c) Changes in accounting estimates: None

(d) Restatements: None

(3) Number of shares issued (common shares)

(a) Number of shares issued at the end of the period (including treasury shares)

FY ended March 2013 10,656,000 shares


(b) Number of treasury shares at the end of the period

FY ended March 2013 372 shares

FY ended March 2012 320 shares

(c) Average number of shares during the period



(Reference)

Non-consolidated Financial Statements for the Year Ended March 31, 2013

1. Operating Results and Financial Position for the Fiscal Year Ended March 31, 2013

(April 1, 2012 – March 31, 2013)

(1) Operating results (% shows the change from the previous year)

Net sales Percentage

change Operating

income Percentage

change Ordinary income

Percentage change


Year ended March 31, 2013 33,972 (2.1) 4,397 5.7 4,384 4.4

Year ended March 31, 2012 34,712 6.7 4,162 1.8 4,201 1.1

Net income

Percentage change

Net income per share Diluted net income per share

(¥ million) (%) (¥) (¥)

Year ended March 31, 2013 2.692 23.1 252.71 －

Year ended March 31, 2012 2,188 (13.4) 205.34 －

(2) Financial positions

Total assets Net assets

Ratio of shareholders' equity to total assets


(¥ million) (¥ million) (%) (¥)

Year ended March 31, 2013 30,930 24,660 79.7 2,314.35

Year ended March 31, 2012 28,552 22,690 79.5 2,129.45

Reference: Shareholders’ equity: Year ended March 31, 2013: ¥24,660 million, Year ended March 31, 2012: ¥22,690 million

* Information regarding the audit implementation status

These consolidated financial statements are not subject to the audit procedures based on the Japanese Financial Instruments

and Exchange Act. However, at the time of the disclosure of these consolidated financial statements, the financial statements audit

procedures based on the Act are being implemented.

* Explanation of the proper use of earnings projections and other notes

Forward-looking statements including the forecast of future earnings together with plans, strategies, targets and other matters

stated in this document have been prepared based on currently available information and certain preconditions which the Company

believes to be reasonable, therefore this document does not assure the realization of the plans and forecasts. Actual results may differ

from these forecasts due to their various uncertain factors and the internal and external conditional changes in business operation after

the announcement.

For the notes concerning the use of earnings forecasts, please refer to “1. Analysis of Operating Results” on page 2 of the

Consolidated Financial Statements for the Year Ended March 31, 2013 (Appendix).

Table of Contents for Appendix

I. Operating Results 2

1. Analysis of Operating Results 2

2. Analysis of the Financial Position 5

3. Basic Policies of the Distribution of Profits, Dividends of the Fiscal Year

Ended March 2013 and the Year Ending March 2014 6

II. Corporate Group 7

III. Management Policies 9

1. Fundamental Corporate Management Policies 9

2. Medium- to Long-Term Management Strategy and Issues the Company

Must Work on 9

IV. Consolidated Financial Statements 11

1. Consolidated Balance Sheets 11

2. Consolidated Statements of Income and Comprehensive Income 13

3. Consolidated Statements of Changes in Net Assets 14

4. Consolidated Statements of Cash Flows 16

5. Notes on the Premise of a Going Concern 17

6. Changes in Important Items Forming the Basis of Preparation for the

Consolidated Financial Statements 17

(Change in the Format) 17

7. Notes to Consolidated Financial Statements 17

(Segment Information) 17

(Per Share Information) 17

(Significant Subsequent Events) 17

V. Non-Consolidated Financial Statements 18

1. Non-Consolidated Balance Sheets 18

2. Non-Consolidated Statements of Income 20

3. Non-Consolidated Statements of Changes in Net Assets 21

4. Notes on the Premise of a Going Concern 23

5. Changes in Important Items Forming the Basis of Preparation for the

Non-Consolidated Financial Statements 23

(Change in the Format) 23

VI. Supplementary Information 24

1. Order Backlog 24

2. Sales Performance 24

* Panasonic Information Systems Co., Ltd. is planning to hold a briefing session for investors as detailed below. Information is to be posted on the corporate website immediately after the session.

- Tuesday, April 23, 2013: Financial results presentation meeting for institutional investors and analysts

* Aside from the above session, Panasonic Information Systems Co., Ltd. holds similar meetings

to discuss the Company’s businesses and financial performance for individual investors. For more details including scheduled dates, please visit the corporate website.

1

I. Operating Results

1. Analysis of Operating Results

(1) Overview of the Fiscal Year Ended March 31, 2013 During the fiscal year ended March 31, 2013 (April 1, 2012 to March 31, 2013), the Japanese

economy began to show a recovery led by domestic demand, while uncertainty over future conditions linked to the stagnancy of the global economy remained. Business sentiment has been improving since December 2012, lifted by expectations that the economic policies will have a positive impact.

The information service industry held steady, thanks to continued corporate IT investments. In these business conditions, the current fiscal year marks the last year of the Panasonic

Information Systems Group’s medium-term management plan. The Group continues to press ahead to achieve the plan’s themes. These comprise the three themes of “Addressing following objectives to achieve sales of 10,000 million yen to the outside the Panasonic Group (general market),” “Reinforcing partnerships with key clients” and “Strengthening management practices to enable the coexistence of the capacity to expand new markets and the capacity to earn high profits.”

(a) Operating results of the Group for the fiscal year ended March 31, 2013

FY 2011 FY 2012

Amount

(¥ million)

Composition ratio (%)

Amount (¥ million)

Composition ratio (%)

Change (%)

Net sales 36,373 100.0 35,178 100.0 (3.3)

Operating income 4,254 11.7 4,424 12.6 4.0

Ordinary income 4,293 11.8 4,411 12.5 2.7

Net income 2,227 6.1 2,701 7.7 21.3

In the fiscal year ended March 31, 2013, the Group placed a particular emphasis on the expansion of sales to clients in general market, and building and reinforcing partnerships in the Panasonic Group. In addition, the Group continued to drive forward the improvement of its management practices by containing costs, strengthening operating efficiency and other initiatives.

As a result, net sales decreased although the Group secured new orders for both general markets and the Panasonic Group, and worked on the system development. Net income increased, however, thanks to improved management practices such as lower development costs.

2

(b) Operating results by product segment for the fiscal year ended March 31, 2013

FY 2011 FY 2012

Net sales (¥ million)

Gross profit ratio on net

sales (%)

Net sales (¥ million)

Gross profit ratio on net

sales (%)

Change in net sales

(%)

Point difference in gross profit ratio on net

sales

(i) System Services 22,244 20.7 22,008 23.2 (1.1) 2.5

(ii) System Solutions 8,004 19.2 7,793 17.6 (2.6) (1.6)

(iii) System and Communications Equipment

6,125 16.2 5,375 16.6 (12.2) 0.4

Total 36,373 19.6 35,178 21.0 (3.3) 1.4

(i) System Services

Net sales fell by 1.1% from the previous year to 22,008 million yen, and the gross profit ratio on net

sales was 20.7% (23.2% in the previous year).

Net sales fell below that of the previous year, as the downward trend in service prices to existing

clients continued, although net sales to general market increased with better operation rates at the Osaka

Central Data Center.

However, the gross profit ratio on net sales was higher than the ratio for the previous year, as the

Group pursued out-and-out efficiency in the management of system operations and other measures,

offsetting the negative effect of the reduction in service prices.

(ii) System Solutions

Net sales decreased by 2.6% from the previous year to 7,793 million yen, and the gross profit ratio

on net sales were 17.6% (19.2% in the previous year).

During the fiscal year, this segment worked on several system development businesses including

the development of a ticketing system for aquariums and an ERP system for a specialized trading

company and a human resource service business. The Group also began working on new projects of

system development mainly for the Panasonic Group, but net sales for this segment fell short of the result

of the previous year.

The gross profit ratio to net sales was lower than the ratio for the previous year, primarily because

the Group deployed more personnel in development in order to adhere to the delivery schedule and

ensure quality for projects to be delivered at the end of FY2012.

(iii) System and Communications Equipment

Net sales decreased by 12.2% from the previous year to 5,375 million yen, and the gross profit ratio

on net sales were 16.6% (16.2% in the previous year).

During the fiscal year, net sales was lower than that of the previous year, due to a decrease in

sales of the equipment by itself.

The gross profit ratio on net sales was higher than that for the previous year.

3

(2) Forecast for the Fiscal Year Ending March 31, 2014 Although there are high hopes that the Japanese economy will achieve a recovery on the back of a

weaker yen and rising share prices, persistent cautiousness about the future is expected to influence

corporate IT investment. Moreover, it is projected that the focus of IT needs will shift from the

enhancement of operational efficiency to the contribution to management.

In light of this outlook, the Group’s consolidated financial results forecasts for the year ending

March 31, 2014 are as follows.

FY 2012 FY 2013 Change

(¥ million) (¥ million) (%)

Net sales 35,178 36,000 2.3

Operating income 4,424 4,450 0.6

Ordinary income 4,411 4,450 0.9

Net income 2,701 2,720 0.7

Risks Concerning Forecasts Forecasts described above have been made based on information available as of the date of the announcement and

assumptions that seem to be reasonable, but actual results may differ from these forecasts.

Although possible risks are listed below, these are not all. Please also refer to the annual security report

providing information on risks, uncertainties and other factors.

• Rapid changes in the Japanese economic conditions or demand for products and services • Trends of demand in industry • Shortages of raw materials or sharp rise in their prices • Changes in social infrastructure brought about by a rapid technological change • Trends in business concerning alliances and cooperation between the Group and other companies • The possibility of incurring expenses as a result of defects or flaws relating to products or services • Limitations on the use of the patents and other intellectual property of third parties • Changes in the market value of assets such as investment securities or the valuation of assets such as deferred

tax assets or other changes in accounting policies • Natural disasters such as an earthquake and other factors that could disrupt business activities

4

2. Analysis of the Financial Position

(1) Assets, liabilities and net assets

As of the end of the fiscal year ended March 31, 2013, total assets increased by 2,343 million yen

(8.1%) from the end of the previous year to 31,355 million yen.

(a) Current assets

Current assets increased by 3,431 million yen (15.4%) from the end of the previous year to

25,730 million yen, mainly due to an increase of 2,237 million yen in deposits paid to Panasonic

Corporation and others, and an increase of 1,425 million yen in notes and accounts receivable-

trade owing to increasing sales in March 2013.

(b) Noncurrent assets

Noncurrent assets decreased by 1,087 million yen (16.2%) from the end of the previous year to

5,624 million yen, mainly due to a 708 million yen decrease of property, plant and equipment

resulting from the depreciation of hardware and other noncurrent assets.

(c) Current liabilities

Current liabilities increased by 578 million yen (10.1%) from the end of the previous year to

6,295 million yen. This is mainly due to a 406 million yen and 103 million yen increase in accounts

payable-trade and accounts payable-other, respectively, because of an increase in the purchase of

goods and equipment in March 2013.

(d) Noncurrent liabilities

Due to factors such as progress in the repayment of lease obligations, noncurrent liabilities fell by

213 million yen (49.1%) from the end of the previous year to 221 million yen.

(e) Net assets

Net assets showed an increase of 1,979 million yen (8.7%) from the end of the previous year to

24,838 million yen as net income of 2,701 million yen was posted, although a year-end dividend of

the previous year and an interim dividend of 692 million yen in total were paid.

(2) Cash flows

Cash and cash equivalents (hereinafter referred to as “funds”) at the end of the year ended March

31, 2013 decreased by 8,569 million yen from the end of the previous year to 5,499 million yen.

(a) Cash flows from operating activities

Funds generated from operating activities increased by 835 million yen to 4,669 million yen from

the previous year.

The main factors of the increase were as follows.

Income before income taxes and minority interests amounted to 4,411 million yen; depreciation

and amortization amounted to 1,817 million yen; and income taxes paid amounted to 1,888 million

yen.

(b) Cash flows from investing activities

Funds used in investing activities were 12,298 million yen (revenues of 6,908 million yen in the

previous year).

This was mainly due to deposits paid to Panasonic Corporation amounted to 11,000 million yen

and purchase of property, plant and equipment amounted to 1,232 million yen.

5

(c) Cash flows from financing activities

Funds used in financing activities increased by 37 million yen to 940 million yen.

This mainly attributed to cash dividends paid which amounted to 692 million yen and repayments

of finance lease obligations which amounted to 247 million yen.

(d) Free cash flows

Due to the aforementioned operating and investing activities, free cash flows resulted in a cash

outlay of 7,628 million yen (a cash inflow of 10,742 million yen in the previous year).

Reference: Indicators relative to cash flows

FY ended

March 2010 FY ended

March 2011 FY ended

March 2012 FY ended

March 2013

Ratio of shareholders’ equity to total assets (%) 78.2 78.2 78.8 79.2

Ratio of shareholders’ equity to total assets on a market value basis (%)

100.3 81.5 81.3 74.8

Cash flows to interest bearing debt (years) 0.1 0.3 0.2 0.1

Interest coverage ratio (times) 460.4 269.5 269.9 357.9

Ratio of shareholders’ equity to total assets: Shareholders’ equity/Total assets

Ratio of shareholders’ equity to total assets on a market value basis: Total market capitalization/Total assets

Cash flows to interest bearing debt: Interest-bearing debt/Cash flows from operating activities

Interest coverage ratio: Cash flows from operating activities/Interest payments

* All indicators are calculated using consolidated financial results.

* Total market capitalization is calculated by multiplying the final share price at the end of the fiscal year by the total number of shares

issued exclusive of treasury shares.

* Interest-bearing debt constitutes all liabilities included in the consolidated balance sheet concerning which interest is paid.

3. Basic Policies of the Distribution of Profits, and Dividends of the Fiscal Year Ended March 2013 and the Year Ending March 2014

(1) Policy on determinations of dividends from surplus

We believe that providing returns to shareholders is one of the most important management issues.

We have adopted a policy to actively and stably distribute surplus funds based on financial performance

while keeping in mind the need to increase internal reserves for reinforcing management foundations and

long term growth.

The Articles of Incorporation provide that March 31, September 30, and other days specified by the

Board of Directors shall be the record dates for the dividends from surplus funds and that the Board of

Directors shall be the decision-making body concerning the dividends from surplus funds. With respect to

profit distribution, our bottom line is to maintain a stable dividend payout of 55 yen per share each year to

our shareholders while making the distribution of profits to the greatest extent possible in accordance with

our consolidated financial performance in a fundamental policy based on comprehensive considerations

of our status of fund, financial standing, and payout ratio.

Internal reserves are allocated first to increasing corporate value and then to reinforcing financial

constitution as well as capital investments with an eye towards future business growth and expansion,

research and development of new technologies and new businesses, and human resource development.

(2) Dividends from surplus

The year-end dividend based on the record on March 31, 2013 will be 32.50 yen per share. This is

the regular dividend (stable dividend of 27.50 yen and a performance-tied dividend of 5 yen). With regard

to an interim dividend based on the record on September 30, 2012, we paid 32.50 yen per share (a stable

dividend of 27.50 yen and a performance-tied dividend 5 yen). Therefore, the annual dividend will be 65

yen per share, and the payout ratio per share will be 25.6% on a consolidated basis.

In the fiscal year ending March 2014, we plan to pay interim and year-end dividends of 32.50 yen

per share for a total annual dividend of 65 yen per share. The resulting payout ratio will be 25.5%.

6

II. Corporate Group The Group comprises Panasonic Information Systems Co., Ltd. and its two consolidated

subsidiaries, and engages in the information service business.

Concrete business activities comprise system services including system operation services and

system maintenance services; system solutions including system development, system solution provision,

and sales of our own software; and system and communications equipment business including system

equipment sales, communication equipment sales, and sales of the software of other companies. The

positioning of subsidiaries with respect to business activities is as follows.

Panasonic Net Solutions Co., Ltd. develops groupware and other products, while V-Internet

Operations, Inc. develops security systems and other products.

Our parent company is Panasonic Corporation. Panasonic Corporation sells system equipment and

leases software and office space to the Company.

The following business diagram illustrates the description above.

(Business Diagram)

Development of security

systems, etc.

Development of groupware, etc.

System operation services,

System maintenance services,

System development,

System solutions,

Sales of our own software,

System equipment sales,

Communication device sales, etc.

Panasonic Net Solutions Co., Ltd. V-Internet Operations, Inc.


System equipment sales, etc.



The Company

Customers

Software leasing,

Office space leasing,


t

Panasonic Corporation

7

(Group Companies)

(1) Parent company

(As of March 31, 2013)

Relationship Company

name Location

Capital(¥ million)

Main Business

Ratio of voting

rights (%) (indirect holdings)

Directors of both

companies

Business transactions

Loans receivable

Equipment hiring

notes

Panasonic Corporation

Kadoma City, Osaka

258,740

Sales and manufacturing of

electric and electronic

equipment and others

64.04 (0.33)

None

We provide the company information

system services.

None Yes *

(2) Consolidated subsidiaries

(As of March 31, 2013)

Relationship Company

name Location

Capital (¥ million)

Main Business Ratio of voting

rights (%)Directors of

both companies

Business transactions

Loans receivable

Equipment hiring

notes

Panasonic Net

Solutions Co., Ltd.

Minato-ku, Tokyo

70 Information

services 100.00 Yes

We provide the company

system operation

services and sell system equipment.

Yes Yes

V-Internet Operations,

Inc.

Chuo-ku, Osaka

60 Information

services 100.00 None

We provide the company

system operation

services and sell system equipment.

None None

1. In the percentage of the voting rights owned column, figures in parentheses indicate indirect holdings of the total percentage.

2. *: A company that submits annual securities reports.

8

III. Management Policies 1. Fundamental Corporate Management Policies

The management philosophy of the Group is to strive for the creation of new values, by pursuing

user-friendliness and accomplishing high-tech mindset, driven by challenging spirits and full speed of

actions.

Based on the philosophy, the Group works with customers to develop solutions to their problems,

striving through IT to contribute to reforms of customers and create value for them.

By strengthening our corporate value with above initiatives, we conduct management to satisfy all

of our stakeholders (shareholders, investors, customers, business partners and employees).

2. Medium- to Long-Term Management Strategy and Issues the Company Must Work on

Aiming to be an IT services company which keeps delivering value to customers, the Group is

providing IT solutions.

The Group has been assisting its clients with IT system restructuring and business process reforms

by leveraging on-site capabilities, namely, our technological and problem-solving capabilities covering

systems development and operation.

The principal objective of IT is rapidly changing from the enhancement of operational efficiency to

the contribution to management. Responding to this change, the new medium-term management plan

aims to broaden and deepen our business domain and level where we can bring our on-site capabilities

into full play. By accomplishing this goal, we strive to be a “true business partner” contributing directly to

clients’ management and businesses, not just a mere partner for systems development and operation.

■Outline of the medium-term management plan (FY2013-FY2015)

Numerical targets for FY2015 are consolidated net sales of 38,000 million yen and consolidated

operating income of 4,600 million yen (operating income ratio on net sales of 12.1%). In order to achieve

these numerical targets, we will promote the following initiatives centering on clients and products.

1) Reinforce business in general market

Clients-oriented

• Strengthening of relationships with existing clients

We will promote a business model that broaden and deepen our relationships with

clients. Our commitment to clients ends neither with the delivery of systems and equipment

nor upon the launch of a service. Through the cultivation of broader and deeper relationships

with clients, we always endeavor to discover their potential needs so that we can offer

additional services that enable them to resolve their business issues.

• Capturing of new clients by offering a wider range of IT services

The flexibility and diversity of our services and solutions will be enhanced. We will offer

a range of IT services that meets the needs of diverse clients, whose businesses vary greatly

in size, and thus broaden and deepen our client base by attracting new clients.

9

Products-oriented

• Achievement of synergy of the Panasonic Group

We will create solutions by combining the Panasonic Group’s products and services

with the Panasonic Information Systems Group’s IT services. We capitalize on the synergy

achieved through combination of the strengths of the Panasonic Group and the Panasonic

Information Systems Group. With the advantage, we aim to offer new value to existing clients

and cultivate new markets.

• Select and focus on key businesses

We will further step up promotion of the growing businesses that we have been

promoting—IT infrastructure construction and operation, enterprise system construction, and

collaboration with the Panasonic Group. At the same time, we will also implement technology

and product strategies that are designed to lead to creation of new markets. Through these

initiatives, we aim to generate net sales of 7,000 million yen.

2) Reinforce partnerships with the Panasonic Group

We will cultivate stronger and closer relationships with the Panasonic Group, our largest client,

by contributing to the Panasonic Group in terms of both business processes and businesses.

3) Develop business in new markets while maintaining high profitability

We will invest for growth and development of the Group while striving to maintain a high-profit

structure in order to enhance corporate value.

• Development of human resources

As an IT services company, we recognize that people are our most valuable asset.

Therefore, we will prioritize human resources development so that each of us can make a

growing contribution to clients’ management. By enhancing quality not only in terms of

technology but also that of human resources, we aim to delight our clients, not merely satisfy

them.

• Thorough pursuit of rationalization and streamlining

We will thoroughly pursue rationalization and streamlining by continuously repeating the

process of accumulating and applying know-how. For example, thorough utilization of the latest

IT technologies will be promoted.

■ Research and development

The new medium-term management plan regards research and development activities for the

creation of new businesses and technologies as important measures. We plan to invest a total of 500

million yen in these areas over a three-year period.

The Group’s research and development activities are mainly conducted in the R&D Center.

During the fiscal year ended March 31, 2013, research and development expenditures amounted to

135 million yen. The main expenditures were for verifying the functionality of new technologies and

commercial licenses.

10

IV. Consolidated Financial Statements

1. Consolidated Balance Sheets

(¥ million)

As of March 31, 2012 As of March 31, 2013

Assets

Current assets

Cash and deposits 175 268

Notes and accounts receivable-trade 5,325 6,750

Construction deferred payment 1,543 831

Inventories 151 382

Deferred tax assets 407 498

Deposits paid 13,999 16,236

Other 695 761

Total current assets 22,299 25,730

Noncurrent assets

Property, plant and equipment

Buildings, net 691 651

Tools, furniture and fixtures, net 2,087 2,194

Lease assets, net 488 317

Construction in progress 745 142

Total property, plant and equipment 4,013 3,305

Intangible assets

Software 586 435

Lease assets 37 －

Other 123 78

Total intangible assets 747 514

Investments and other assets

Investment securities 279 231


Prepaid pension cost 843 679

Other 810 852

Allowance for doubtful accounts (6) (0)

Total investments and other assets 1,951 1,805

Total noncurrent assets 6,712 5,624

Total assets 29,011 31,355

11

(¥ million)


Liabilities

Current liabilities

Notes and accounts payable-trade 1,846 2,253

Income taxes payable 1,015 947

Accounts payable-other 1,555 1,658

Accrued expenses 307 163

Accrued consumption taxes 120 258

Deposits received 6 17

Provision for bonuses 533 670

Provision for directors' bonuses 12 24

Other 319 301

Total current liabilities 5,717 6,295

Noncurrent liabilities

Provision for retirement benefits 7 10

Long-term deposits received 43 35

Deferred tax liabilities 22 －

Lease obligations 362 175

Total noncurrent liabilities 435 221

Total liabilities 6,152 6,517

Net assets

Shareholders' equity

Capital stock 1,040 1,040

Capital surplus 870 870

Retained earnings 20,891 22,900

Treasury stock (0) (0)

Total shareholders' equity 22,801 24,810

Accumulated other comprehensive income

Valuation difference on available-for-sale securities 57 27

Total accumulated other comprehensive income 57 27

Total net assets 22,858 24,838

Total liabilities and net assets 29,011 31,355

12

2. Consolidated Statements of Income and Comprehensive Income

(¥ million)

Year ended March 31, 2012

(From April 1, 2011 to March 31, 2012)



Net sales 36,373 35,178

System service sales 22,244 22,008

System solution sales 8,004 7,793

System and communications equipment sales 6,125 5,375

Cost of sales 29,238 27,804

System service cost of goods sold 17,634 16,895

System solution cost of goods sold 6,470 6,425

System and communications equipment cost of goods sold 5,133 4,483

Gross profit 7,134 7,374

Selling, general and administrative expenses 2,879 2,949

Operating income 4,254 4,424

Non-operating income

Interest income 58 29

Dividends income 5 5

Other 4 2

Total non-operating income 68 36

Non-operating expenses

Interest expenses 14 13

The fixed assets abandonment is disadvantageous 7 1

Exchange loss 2 8

Taxes and dues － 22

Other 5 4

Total non-operating expenses 29 50

Ordinary income 4,293 4,411

Extraordinary loss

Restructuring expenses 451 －

Total extraordinary loss 451 －

Income before income taxes and minority interests 3,842 4,411

Income taxes-current 1,808 1,822

Income taxes-deferred (192) (113)

Total income taxes 1,615 1,709

Income before minority interests 2,227 2,701

Net income 2,227 2,701

Income before minority interests 2,227 2,701

Other comprehensive income

Valuation difference on available-for-sale securities (34) (29)

Total other comprehensive income (34) (29)

Comprehensive income 2,192 2,672

Comprehensive income attributable to

Comprehensive income attributable to owners of the parent 2,192 2,672

Comprehensive income attributable to minority interests －－

13

3. Consolidated Statements of Changes in Net Assets

(¥ million)






Capital stock

Balance at the beginning of current period 1,040 1,040

Changes of items during the period

Total changes of items during the period －－

Balance at the end of current period 1,040 1,040

Capital surplus

Balance at the beginning of current period 870 870



Balance at the end of current period 870 870

Retained earnings



Dividends from surplus (692) (692)


Total changes of items during the period 1,534 2,009


Treasury stock

Balance at the beginning of current period (0) (0)


Purchase of treasury stock (0) (0)

Total changes of items during the period (0) (0)

Balance at the end of current period (0) (0)

Total shareholders' equity








14

(¥ million)






Valuation difference on available-for-sale securities



Net changes of items other than shareholders' equity (34) (29)









Net assets









15

4. Consolidated Statements of Cash Flows

(¥ million)





Net cash provided by (used in) operating activities

Income before income taxes and minority interests 3,842 4,411

Depreciation and amortization 2,161 1,817


Increase (decrease) in allowance for doubtful accounts (19) (6)

Interest and dividends income (64) (34)


Decrease (increase) in notes and accounts receivable-trade (407) (707)

Decrease (increase) in inventories 52 (231)

Decrease (increase) in other current assets 8 (65)

Decrease (increase) in prepaid pension costs 47 164

Increase (decrease) in provision for retirement benefits 7 3

Increase (decrease) in notes and accounts payable-trade (123) 406

Increase (decrease) in other current liabilities 261 809

Increase (decrease) in other noncurrent liabilities (2) (8)

Other, net (170) (36)

Subtotal 5,615 6,537

Interest and dividends income received 87 34

Interest expenses paid (14) (13)

Income taxes paid (1,854) (1,888)

Net cash provided by (used in) operating activities 3,834 4,669

Net cash provided by (used in) investing activities

Decrease in paid (8,000) (19,100)

Decrease in deposits paid 16,500 8,100

Purchase of property, plant and equipment (1,163) (1,232)

Proceeds from sales of property, plant and equipment 1 2

Purchase of software (430) (171)

Other, net 1 102

Net cash provided by (used in) investing activities 6,908 (12,298)

Net cash provided by (used in) financing activities

Repayments of finance lease obligations (211) (247)

Cash dividends paid (692) (692)

Net cash provided by (used in) financing activities (903) (940)

Net increase (decrease) in cash and cash equivalents 9,838 (8,569)

Cash and cash equivalents at beginning of period 4,230 14,069

Cash and cash equivalents at end of period 14,069 5,499

16

5. Notes on the Premises of a Going Concern

There is no relevant information.

6. Changes in Important Items Forming the Basis of Preparation for the Consolidated Financial Statements

(Change in the Format) (Consolidated Statements of Income and Comprehensive Income) “Exchange loss” was included in “Other” under “Non-operating expenses” in the previous fiscal

year, but is shown separately from the fiscal year ended March 31, 2013 because they constitute more than 10% of total assets. Certain amounts in the consolidated financial statements for the previous fiscal year have been reclassified to conform to current fiscal year presentation.

As a result, 7 million yen under “Other” in the previous consolidated statements of income and comprehensive income has been reclassified as 2 million yen under “Exchange loss” and 5 million yen under “Other.”

The disclosure for the items that are not listed above is omitted since there were no significant changes from the description in the latest Annual Securities Report submitted on June 18, 2012.

7. Notes to Consolidated Financial Statements

(Segment Information) The Group conducts a single-unit business, which comprises an information service business and

its auxiliary businesses. In this light, information is omitted as there is no segment subject to disclosure.

(Per Share Information) Year ended March 31, 2012 Year ended March 31, 2013

(From April 1, 2011 to March 31, 2012) (From April 1, 2012 to March 31, 2013)

Net assets per share 2,145.22 yen 2,330.98 yen

Net income per share 209.02 yen 253.56 yen

Diluted net income per share －－

The basis of the calculation for net assets per share and net income per share is as follows:

Year ended March 31, 2012 Year ended March 31, 2013

(From April 1, 2011 to March 31, 2012) (From April 1, 2012 to March 31, 2013)


Total assets 22,858 million yen 24,838 million yen

The amount that should be deducted

from total assets - million yen - million yen

(Portion of minority interest) - million yen - million yen

Year-end net assets related to

common stock 22,858 million yen 24,838 million yen

Number of common stock used for the

calculation of net assets per share 10,655 thousand shares 10,655 thousand shares

Net income per share

Net income 2,227 million yen 2,701 million yen

Amounts not attributable to common

shareholders - million yen - million yen

Net income related to common stock 2,227 million yen 2,701 million yen

Number of average common stocks 10,655 thousand shares 10,655 thousand shares

(Significant Subsequent Events)

There is no relevant information. (Omission of Disclosure)

The notes other than above are omitted as considered as there is no significant need for the disclosure of the financial statements.

17

V. Non-Consolidated Financial Statements 1. Non-Consolidated Balance Sheets

(¥ million)


Assets

Current assets

Cash and deposits 172 229

Accounts receivable-trade 4,968 6,485

Construction deferred payment 1,518 806

Merchandise and finished goods 65 289

Work in process 66 70

Supplies 0 1

Advance payments-trade 135 92

Prepaid expenses 498 587


Accounts receivable-other 60 65

Deposits paid 13,704 15,993

Short-term loans receivable from subsidiaries and affiliates 220 200

Current portion of long-term loans receivable from subsidiaries and affiliates

42 42

Other － 13

Total current assets 21,839 25,346

Noncurrent assets

Property, plant and equipment

Buildings, net 691 651

Tools, furniture and fixtures, net 2,073 2,144

Lease assets, net 488 317

Construction in progress 745 139

Total property, plant and equipment 4,000 3,252

Intangible assets

Software 435 307

Software in progress 36 42

Lease assets 37 －

Other 39 13

Total intangible assets 548 364

Investments and other assets

Investment securities 279 231

Stocks of subsidiaries and affiliates 203 203

Long-term loans receivable from subsidiaries and affiliates 42 －

Long-term receipt claim 6 0

Long-term prepaid expenses 550 579

Prepaid pension cost 843 679

Deferred tax assets － 29

Other 244 243

Allowance for doubtful accounts (6) (0)

Total investments and other assets 2,163 1,966

Total noncurrent assets 6,712 5,583

Total assets 28,552 30,930

18

(¥ million)


Liabilities

Current liabilities

Accounts payable-trade 1,687 2,119

Accounts payable-other 1,562 1,662

Accrued consumption taxes 112 256

Accrued expenses 295 151

Income taxes payable 998 947

Advances received 31 53

Deposits received 3 12

Provision for bonuses 482 642

Provision for directors' bonuses 12 17

Other 247 195

Total current liabilities 5,434 6,058

Noncurrent liabilities

Long-term deposits received 43 35

Deferred tax liabilities 21 －

Lease obligations 362 175

Total noncurrent liabilities 427 211

Total liabilities 5,861 6,269

Net assets


Capital stock 1,040 1,040

Capital surplus

Legal capital surplus 870 870

Total capital surplus 870 870

Retained earnings

Legal retained earnings 10 10

Other retained earnings

Retained earnings brought forward 20,712 22,712

Total retained earnings 20,723 22,723

Treasury stock (0) (0)

Total shareholders' equity 22,633 24,633

Valuation and translation adjustments

Valuation difference on available-for-sale securities 57 27

Total valuation and translation adjustments 57 27

Total net assets 22,690 24,660

Total liabilities and net assets 28,552 30,930

19

2. Non-Consolidated Statements of Income

(¥ million)





Net sales 34,712 33,972

System service sales 22,001 21,744

System solution sales 7,602 7,443

System device and sales related to telecommunications equipment

5,107 4,784

Cost of sales 28,140 27,077

System service cost of goods sold 17,625 16,846

System solution cost of goods sold 6,218 6,198

System device and sales related to telecommunications equipment

4,296 4,033

Gross profit 6,571 6,895

Selling, general and administrative expenses 2,409 2,497

Operating income 4,162 4,397

Non-operating income

Interest income 59 30

Dividends income 5 5

Other 3 1

Total non-operating income 68 36

Non-operating expenses



Exchange loss 2 8

Taxes and dues － 22

Other 5 4

Total non-operating expenses 29 50

Ordinary income 4,201 4,384

Extraordinary loss

Restructuring expenses 446 －

Total extraordinary loss 446 －

Income before income taxes 3,754 4,384

Income taxes-current 1,770 1,807

Income taxes-deferred (203) (115)

Total income taxes 1,566 1,691


20

3. Non-Consolidated Statements of Changes in Net Assets

(¥ million)






Capital stock





Capital surplus

Legal capital surplus





Total capital surplus





Retained earnings

Legal retained earnings





Other retained earnings

Retained earnings brought forward







Total retained earnings







21

(¥ million)





Treasury stock

Balance at the beginning of current period (0) (0)




Balance at the end of the current period (0) (0)

Total shareholders' equity








Valuation and translation adjustments

Valuation difference on available-for-sale securities






Total valuation and translation adjustments






Total net assets









22

4. Notes on the Premise of a Going Concern

There is no relevant information.

5. Changes in Important Items Forming the Basis of Preparation for the Non-Consolidated Financial

Statements

(Change in the Format) (Non-Consolidated Statements of Income) “Exchange loss” was included in “Other” under “Non-operating expenses” in the previous fiscal

year, but is shown separately from the fiscal year ended March 31, 2013 because they constitute more than 10% of total assets. Certain amounts in the financial statements for the previous fiscal year have been reclassified to conform to current fiscal year presentation.

As a result, 7 million yen under “Other” in the previous non-consolidated statements of income has been reclassified as 2 million yen under “Exchange loss” and 5 million yen under “Other.”

The disclosure for the items that are not listed above is omitted since there were no significant changes from the description in the latest Annual Securities Report submitted on June 18, 2012.

23

24

VI. Supplementary Information

1. Order Backlog

The amount of orders received during the fiscal year ended March 31, 2013 and order backlog as

of the end of the fiscal year are shown below:

End of FY2011 End of FY2012 Change

(¥ million) (¥ million) (%)

System Services 766 629 (17.8)

System Solutions 1,463 1,960 33.9

System and Communications Equipment 4 7 51.1

Total 2,235 2,597 16.2

Notes: 1. Above figures do not include consumption tax, etc.

2. Amounts of orders for the system and communications equipment represent only those related to “information-related

works.”

2. Sales Performance

FY2011 FY2012

Amount Composition ratio Amount Composition ratio

(¥ million) (%) (¥ million) (%)

Change (%)

Panasonic Group 29,019 79.8 28,338 80.6 (2.3)

General market 7,354 20.2 6,839 19.4 (7.0)

Total 36,373 100.0 35,178 100.0 (3.3)

Note: Above figures do not include consumption tax, etc.

Documents

Panasonic Information Systems Co., Ltd. · * Panasonic Information Systems Co., Ltd. is planning to hold a briefing session for investors as detailed below. Information is to be posted