Know today, Power tomorrow - Intage Holdings Inc...Know today, Power tomorrow Our Solutions The Value We Offer Business Intelligence See page 21. ... Vietnam, India, Singapore and

Know today,Power tomorrowINTAGE GROUP REPORT 2017

We connect our customers to their customers,

to create a prosperous society of limitless possibilities.

THE INTAGE GROUP WAY

Know today,Power tomorrow

02 The INTAGE Group’s Value Creation Model

04 INTAGE Group Snapshot

06 Consolidated Performance Highlights

08 Message from the President

13 Focus: 12th Medium-Term Management Plan Our Commitment to Take the Initiative

16 Overview of Services

18 Review of Operations 18 Marketing Support (Consumer Goods & Services) 20 Marketing Support (Healthcare) 21 Business Intelligence 22 New Group Members Generating New Synergy

23 Sustainability

25 Corporate Governance

27 Comments from Outside Directors

28 Management Team

30 Management’s Discussion and Analysis

33 Business-Related Risks

35 Consolidated Financial Statements 35 Consolidated Statements of Income 35 Consolidated Statements of Comprehensive Income 36 Consolidated Balance Sheets 38 Consolidated Statements of Changes in Net Assets 39 Consolidated Statements of Cash Flows

40 Corporate Data/INTAGE Group

41 Stock Information

Contents

Collecting, processing and analyzing data, and giving information value

That is the greatest strength of the INTAGE Group.

We apply this strength to support the marketing activities and business strategies of customers

working in various industries and business categories, including manufacturers, service

providers, and government agencies. Through these activities, the INTAGE Group also

contributes to consumers, who are the ultimate end-users.

In a society inundated with complex information, we can pioneer the future by ascertaining

current trends and using that knowledge to connect people, products and services. We will

continue to evolve in our quest for a society in which products, healthcare and services that

match people’s needs are plentiful, and consumers have a greater range of options.

Forward-Looking StatementsThis INTAGE Group Report contains forward-looking statements concerning future strategies of INTAGE HOLDINGS Inc. These forward-looking statements are not historical facts. They are expectations and projections based on information currently available to the Company and are subject to a number of risks, uncertainties, and assumptions. As such, actual results may differ materially from those projected.

01INTAGE GROUP REPORT 2017

We connect our customers to their customers, to create a prosperous society of limitless possibilities.

Know today, Power tomorrow

Our Strengths

The Value We Offer

Turning information into value

The INTAGE Group’s Value Creation Model

Provide products and advertising that benefit

consumers

Improve the speed of company business

decisions

Optimize strategies through the

visualization of consumer trends and

behaviors

Research, analysis and handling

techniques

Understanding of consumers

Collaboration with

other industries

Consulting expertise

Understandingof marketing

Knowledge ofa wide range of industries and

businesses

Development capabilities for IT needs

02 INTAGE HOLDINGS INC.

Data analysisOTC andprescription drug surveys

CRO

(Contract research organization)

ED

C system

sP

rescription data analysis

IT infra

stru

ctur

e

Systems developmentIT solutions

Research &

Pan

el r

esea

rch/

cust

om r

esea

rch

Co

mm

unic

atio

n

Glo

bal r

esearch

We connect our customers to their customers, to create a prosperous society of limitless possibilities.

Know today, Power tomorrow

Our Solutions

The Value We Offer

Business Intelligence

▲

See page 21.

Marketing Support (Healthcare)

▲

See page 20.

Marketing Support (Consumer Goods

& Services)

▲

See page 18.

Data-driven solutions and services that start

with consumers

Contribute to patient-centered development of

pharmaceuticals and provision of information

Contribute to work optimization and process

improvements through system implementation

Enhance support for self-medication

installa

tion

Developm

ent


Sales Growth Leadership in Japan

Consolidated net sales for the year ended March 31, 2017 were ¥47.9 billion, up 5.5% from the previous fiscal year. This marks the INTAGE Group’s 24th consecutive year of sales growth.

The INTAGE Group began conducting panel research in 1960, and since then has consistently delivered high-level service in terms of data quality and quantity, analytical know-how, price and speed. Today, our panel research has become the de facto standard across many industries.

Top 10 Global Marketing Research Companies

Source: Marketing News, October 2016 edition (American Marketing Association)* Sales for the fiscal year ended March 31, 2016.

Rank Company Name and Locationof Headquarters

2015 Sales(Millions of U.S. dollars)

1 Nielsen Holdings N.V. (U.S.) 6,172.0

2 Kantar (U.K.) 3,710.0

3 IMS Health Inc. (U.S.) 2,921.0

4 Ipsos S.A. (France) 1,980.9

5 GfK SE (Germany) 1,712.6

6 Information Resources Inc. (U.S.) 981.0

7 dunnhumby Ltd. (U.K.) 970.5

8 Westat Inc. (U.S.) 509.6

9 INTAGE HOLDINGS Inc. (Japan) 375.7*

10 comScore, Inc. (U.S.) 368.8

Expansion of Overseas Operations Global Position

Since its founding, the INTAGE Group has won the support of a long list of clients as one of Japan’s leading marketing research providers. We rank first in Japan and ninth worldwide in the latest rankings.

The INTAGE Group is expanding its business presence in Asia, and has established operating bases in China, Korea, Hong Kong, Macao, Thailand, Vietnam, India, Singapore and Indonesia, as well as in the United States.

INTAGE Group Snapshot

24 Years of Sales Increases

Overseas Operations (As of July 7, 2017)

No.1

Countries and Regions10 No.9

United States

China

South Korea

Hong Kong, MacaoThailand

India

Vietnam

Singapore

Indonesia


May 2015 Capital and business alliance between ASKLEP Inc. and Kyoto Constella Technologies Co., Ltd.Expanded pharmacovigilance services and started drug discovery research support

July 2015 Capital and business alliance between INTAGE TECHNOSPHERE Inc. and XCompass Intelligence Ltd. Application of AI information processing technology

March 2016 Capital and business alliance between ASKLEP Inc. and Assemblogue, Inc. Creation of new business and added value in the healthcare sector

July 2016 Capital and business alliance between INTAGE Inc. and Marketing Applications, Inc. Development of platform for online research

July 2016 Business alliance between INTAGE Inc. and Adways Inc. Business using Chinese cross-border e-commerce market data for Japanese products

August 2016 Capital and business alliance between INTAGE Inc. and Weavers Inc., a subsidiary of the Datasection GroupData analysis services for consumer-generated content

August 2016 Capital and business alliance between INTAGE HOLDINGS Inc. and Kousokuya, Inc.Promotion of open innovation with the aim of advancing technology and creating new business

October 2016 Joint fund formed by INTAGE HOLDINGS Inc. and SBI Investment Co., Ltd. The INTAGE Open Innovation Fund

January 2017 Capital and business alliance between INTAGE Inc., Agile Media Network Inc., the Dentsu Group, and Mynavi Corporation Further increase in effectiveness of and value derived from ambassador programs

April 2017 Business alliance between INTAGE Inc. and DO HOUSE Inc. Retail flyer collection and analysis business for consumer product manufacturers

April 2017 Capital and business alliance between ANTERIO Inc. and ReasonWhy Inc.New business development targeting medical care users

June 2017 Business alliance between INTAGE Inc. and Webrage Co., Ltd.Eye tracking and expression analysis using smartphones

The INTAGE Group’s Business Alliances and Cooperation in Recent Years

The History of Value Creation at INTAGE Group

1960 1970 1980 1990 2000 2010 2017

1960sFrom the Company's founding in 1960, conducted and gradually systematized panel research and data collection and analysis. 1960 Established Marketing Intelligence Corporation (MiC)

(now INTAGE HOLDINGS Inc.) Launched SDI (nationwide drugstore tracking research) ▲

See page 16.

Began custom research

1964 Launched SCI (nationwide individual consumer panel research)

1970s-1980sStrengthened and expanded systems in step with changing times.1987 Net sales surpassed ¥10 billion

1988 Began switch to SCI “home scan” data gathering system

1990sBuilt a variety of panels and began development of retail POS tracking.Made bold moves into big data utilization with the arrival of the Internet. 1994 Launched SRI (FMCG* retail tracking research) ▲

See page 16. * Fast-moving consumer goods

2000s-2010sExpanded business operations in Asia and focused on development of new services in the communications area. 2000 IBRD Japan Co., Ltd. (now ASKLEP Inc.) became a subsidiary

2001 Changed company name to INTAGE Inc. Shares listed on JASDAQ

2002 Established INTAGE Marketing Consulting (Shanghai) Co., Ltd. (now INTAGE CHINA Inc.)

2007 TM Marketing Inc. (now ANTERIO Inc.) became a subsidiary

2008 INTAGE listed on the Second Section of the Tokyo Stock Exchange Established INTAGE (Thailand) Co., Ltd.

2009 INTAGE listed on the First Section of the Tokyo Stock Exchange

2010 Launched SCI-personal (nationwide individual consumer panel research)

2011 FTA Research and Consultant, LLC (now INTAGE VIETNAM LIMITED LIABILITY COMPANY) became a subsidiary

2012 Established DOCOMO InsightMarketing, INC. as a joint venture with NTT DOCOMO INC. Established INTAGE INDIA Private Limited Japan Medical Information Research Institute Inc. became a subsidiary

2013 Launched i-SSP ▲

See page 17.

Established INTAGE SINGAPORE PTE. LTD. CONSUMER SEARCH HONG KONG LIMITED became a subsidiary Established PT. INTAGE INDONESIA

2014 Name of SCI-personal changed to SCI ▲

See page 16.

Sales surpassed ¥40 billion

2015 Established INTAGE CONSULTING Inc.

2016 Established DataAge Inc. Kyoto Constella Technologies Co., Ltd. became a subsidiary of ASKLEP Inc. ▲

See page 22.

2017 Established INTAGE USA Inc.

Review of Operations: New Group Members Generating New Synergy

▲

Page 22

Review of Operations: New Group Members Generating New Synergy

▲

Page 22

Consolidated net sales Year endedMarch 2017

¥47.9billion


Consolidated Performance Highlights

Notes: 1. On October 1, 2013, the Company implemented a stock split at a ratio of two shares for each share of common stock. However, net income per share and net assets per share is calculated assuming this stock split took place at the beginning of the previous fiscal year. 2. On October 1, 2013, the Company implemented a stock split at a ratio of two shares for each share of common stock. Dividend amounts for fiscal years prior to the year ended March 31, 2014 are the actual amounts before the stock split.

Years ended March 31 2017 2016 2015 2014 2013

Millions of yen Thousands of U.S. dollars Millions of yen Thousands of

U.S. dollars Millions of yen Thousands of U.S. dollars Millions of yen Thousands of

U.S. dollars Millions of yen Thousands of U.S. dollars

For the Year:

Net sales ¥47,987 $427,729 ¥45,481 $403,629 ¥43,925 $365,523 ¥42,508 $413,019 ¥39,930 $424,561

Cost of sales 34,603 308,432 33,257 295,145 31,723 263,984 31,107 302,244 29,121 309,633

Selling, general and administrative expenses 9,115 81,246 8,340 74,014 8,630 71,814 7,895 76,710 7,499 79,734

Operating income 4,268 38,042 3,883 34,460 3,571 29,716 3,505 34,055 3,309 35,183

Net income attributable to owners of the parent 2,871 25,590 2,326 20,642 2,463 20,495 1,642 15,954 1,249 13,280

Cash flows from operating activities 4,072 36,295 1,713 15,202 2,947 24,523 3,612 35,095 3,433 36,501

Cash flows from investing activities (2,110) (18,807) (1,791) (15,894) 2,327 19,364 (1,151) (11,183) (1,332) (14,162)

Cash flows from financing activities (1,300) (11,587) 1,566 13,897 (4,940) (41,108) (592) (5,752) (960) (10,207)

Cash and cash equivalents at end of year 10,418 92,860 9,812 87,078 8,366 69,618 7,926 77,011 5,906 62,796

At Year-End:

Total assets 39,067 348,221 36,830 326,854 33,301 277,115 33,740 327,827 29,398 312,578

Total net assets 23,771 211,881 21,338 189,368 19,917 165,740 17,171 166,838 15,493 164,731

Equity ratio (%) 60.3 57.5 59.3 50.5 52.5

Per Share Data (Yen/Dollars):

Net income1 143.82 1.28 116.55 1.03 123.03 1.02 81.66 0.79 62.15 0.66

Total shareholders’ equity1 1,179.74 10.51 1,060.17 9.40 989.01 8.23 846.49 8.22 767.29 8.15

Cash dividends2 35.00 0.31 32.50 0.28 30.00 0.24 27.50 0.26 50.00 0.53

Financial Data (%):

Operating margin 8.9 8.5 8.1 8.2 8.3

ROA 11.6 11.3 10.3 10.7 11.2

ROE 12.8 11.4 13.4 10.1 8.4

INTAGE HOLDINGS Inc. and Consolidated Subsidiaries

Net Sales Operating Income/Operating Margin

Net Income Attributable toOwners of the Parent/Net Income per Share1

3.573.503.30

3.883.884.264.26

8.3 8.2 8.1 8.5 8.98.9

0

15

9

12

6

3

0

5.0

4.0

3.0

2.0

1.0

43.922.46

1.641.64

1.24

2.322.32

2.872.87

62.1581.66

123.03

116.55

143.82143.82

0

250

200

150

100

50

0

2.4

3.0

1.8

1.2

0.6

42.5039.93

45.4847.9847.98

0

50.0

30.0

40.0

10.0

20.0

201520142013 2016 2017

(Billions of yen) (Billions of yen)

201520142013 2016 2017

(Billions of yen) (Yen)(%)

201520142013 2016 2017

Operating Income (left scale)(Years ended March 31) (Years ended March 31) (Years ended March 31)

Operating Margin (right scale)Net Income Attributable to Owners of the Parent (left scale)Net Income per Share (right scale)


Years ended March 31 2017 2016 2015 2014 2013

Millions of yen Thousands of U.S. dollars Millions of yen Thousands of

U.S. dollars Millions of yen Thousands of U.S. dollars Millions of yen Thousands of

U.S. dollars Millions of yen Thousands of U.S. dollars

For the Year:

Net sales ¥47,987 $427,729 ¥45,481 $403,629 ¥43,925 $365,523 ¥42,508 $413,019 ¥39,930 $424,561

Cost of sales 34,603 308,432 33,257 295,145 31,723 263,984 31,107 302,244 29,121 309,633

Selling, general and administrative expenses 9,115 81,246 8,340 74,014 8,630 71,814 7,895 76,710 7,499 79,734

Operating income 4,268 38,042 3,883 34,460 3,571 29,716 3,505 34,055 3,309 35,183

Net income attributable to owners of the parent 2,871 25,590 2,326 20,642 2,463 20,495 1,642 15,954 1,249 13,280

Cash flows from operating activities 4,072 36,295 1,713 15,202 2,947 24,523 3,612 35,095 3,433 36,501

Cash flows from investing activities (2,110) (18,807) (1,791) (15,894) 2,327 19,364 (1,151) (11,183) (1,332) (14,162)

Cash flows from financing activities (1,300) (11,587) 1,566 13,897 (4,940) (41,108) (592) (5,752) (960) (10,207)

Cash and cash equivalents at end of year 10,418 92,860 9,812 87,078 8,366 69,618 7,926 77,011 5,906 62,796

At Year-End:

Total assets 39,067 348,221 36,830 326,854 33,301 277,115 33,740 327,827 29,398 312,578

Total net assets 23,771 211,881 21,338 189,368 19,917 165,740 17,171 166,838 15,493 164,731

Equity ratio (%) 60.3 57.5 59.3 50.5 52.5

Per Share Data (Yen/Dollars):

Net income1 143.82 1.28 116.55 1.03 123.03 1.02 81.66 0.79 62.15 0.66

Total shareholders’ equity1 1,179.74 10.51 1,060.17 9.40 989.01 8.23 846.49 8.22 767.29 8.15

Cash dividends2 35.00 0.31 32.50 0.28 30.00 0.24 27.50 0.26 50.00 0.53

Financial Data (%):

Operating margin 8.9 8.5 8.1 8.2 8.3

ROA 11.6 11.3 10.3 10.7 11.2

ROE 12.8 11.4 13.4 10.1 8.4

Total

¥47,987million

$427,729thousand

Sales by Segment and Composition Ratio

Fiscal 2017 Results

Total Assets/Total Net Assets/Equity Ratio ROA/ROE

Payout Ratio/Cash Dividends per Share2

11.4

10.1

11.211.2

11.3

12.812.8

8.48.4

10.710.7

10.3

13.4

11.6

0

16

12

8

4

30.027.527.5

50.0

32.5

24.324.3

40.233.7

24.5 28.1

35.035.0

0

60

45

15

30

0

75

100

50

25

0

80

20

40

60

39.06

0

40.0

20.0

30.0

10.0

15.49

29.3929.39

17.1719.91 21.33

33.74 33.3036.83

50.550.552.552.559.3

57.560.360.3

23.7723.77

(As of March 31) (Years ended March 31) (Years ended March 31)Total AssetsTotal Net AssetsEquity Ratio (right scale)

201520142013 2016 2017

(Billions of yen) (%) (%)

201520142013 2016 2017

(%) (Yen)

201520142013 2016 2017

ROEROA

Payout Ratio (left scale)Cash Dividends per Share (right scale)

The following exchange rates applied: March 31, 2017: US$1 = ¥112.19 March 31, 2016: US$1 = ¥112.68 March 31, 2015: US$1 = ¥120.17 March 31, 2014: US$1 = ¥102.92 March 29, 2013: US$1 = ¥ 94.05

Marketing Support(Consumer Goods & Services)

¥ 31,433 million

$280,176 thousand


¥ 10,693 million

$ 95,311 thousand

Business Intelligence¥ 5,860 million

$ 52,232 thousand

65.5%

22.3%

12.2%


Message from the President

Striving to create a new business model Becoming a customer information partner, evolving into a strategic partner

Kenji Miyakubi

President and Representative Director

INTAGE HOLDINGS Inc.


Specializing in Group management under a holding company structure for bold reform and restructuring

Our 11th Medium-Term Management Plan, covering the three years ended March 31, 2017 (fiscal 2017), was launched following our transition to a holding company structure. Under the plan and this new structure, we focused on Group management and implemented strategies based on bold business decisions. We largely achieved our initial goals.

As part of major reforms, we repositioned segments along industry and service axes, and simultaneously implemented a sweeping reworking of our Group formation. This initiative was highly significant in that it enabled us to establish our Marketing Support (Healthcare) business as an independent segment with high growth potential. It also included the divestiture of operations for our clinical research support business. As a result, we have adopted a formation capable of speedy business expansion. The Business Intelligence segment addresses pressing topics in advanced fields, and in terms of profit contribution this business is still in the developing stages. Nevertheless, we have high expectations for the segment as a future core domain. Other advancements include the establishment of INTAGE CONSULTING Inc., which targets top-level corporate management, and a corporate venture capital organization for strategic investments that will promote Group growth. Overall, we have introduced a structure capable of responding flexibly to changes in market and corporate needs. We are also advancing collaboration with companies that hold advanced technology, such as XCompass Intelligence Ltd. and Kyoto Constella Technologies Co., Ltd.

Overseas, amid the restructuring of our China business, performance in the Consumer Goods & Services and Healthcare businesses centered on Shanghai has been strong, while results were also favorable in Singapore and Indonesia. Meanwhile, we have deepened our understanding of the market in India, which has given us confidence that our overseas businesses hold great potential.

With regard to our development of new innovative services, our proprietary INTAGE Single Source Panel (i-SSP) is steadily increasing customer numbers. Additionally, DOCOMO InsightMarketing INC., a joint venture established with NTT DOCOMO INC., achieved profitability. The response from NTT DOCOMO has been extremely positive.

Overview of the 11th Medium-Term Management Plan

Can we achieve growth with our conventional business model? The 12th Medium-Term Management Plan was born from a sense of crisis

The INTAGE Group is developing steadily. However, we have concerns about whether or not we truly have a future if we simply continue with our current business style. To address this, we held various internal meetings during the drafting of the 12th Medium-Term Management Plan. The advertising and marketing industry has already entered the digital age. Furthermore, at client corporations, sales divisions for e-commerce and brick and mortar stores, previously kept separate, are now being consolidated into single entities. In particular, the dissemination of smartphones has opened up access to a diverse range of information and spurred market demand for this information to be processed in real time. It is impossible to accurately ascertain consumer behavior patterns without a technological environment that enables the smooth processing of massive amounts of client data, including video, audio and text, as well as all kinds of status logs. We are approaching an era in which companies dependent on surveys and other traditional marketing research methods will fall by the wayside.

On the other hand, although competition is increasing in the market for data handling solutions, the number of companies with which we can collaborate and our scope of viable business activities continue to expand. In other words, we believe the future holds incredible business opportunities.

Background to the 12th Medium-Term Management Plan

• Introduction of new segments

• Strategic investments to realize Group growth

• Turning overseas businesses positive overall and further evolution of governance

• Steady growth of the media communications business

Review of the 11th Medium-Term Management Plan

INTAGE Single Source Panel (i-SSP)

▲

See page 17.

Corporate Venture Capital (CVC)

Corporate venture capital is a mechanism for companies to invest their own capital directly in external startup companies. Unlike typical venture capital, which gathers capital from investors and targets capital gains, the aim of CVC is often to generate synergy with a company’s main business. The INTAGE Group established the INTAGE Open Innovation Fund in partnership with SBI Investment Co., Ltd. in October 2016.



12th Medium-Term Management Plan (Fiscal 2018–2020)

Take the Initiative—in the field of data-activation

Group Basic Policy

1. Develop an R&D framework for creating growth driversCreate a framework for the effective utilization of resources and capabilities with an awareness of Group-wide synergy● Establish the INTAGE Group R&D Center and create a common Group framework ● Secure data scientists and create a training system for them

Accelerate innovation via the INTAGE Open Innovation Fund● Identify projects that match the needs of individual business segments and operating companies

2. Evolve business domains and increase data valueMarketing Support (Consumer Goods & Services): Combine internal data and client data to increase data value and expand service domains

Marketing Support (Healthcare): Develop patient-centered marketing and work to expand business opportunities

Business Intelligence: Create a platform for next-generation data utilization

Group-wide: Conduct M&A in domains that will drive Group growth

3. Take on the challenge of workstyle reformCreate an environment that capitalizes on diversity: review and implement new workstyles, including individual choice of work location and working hours

Strategic Points

Ensuring sustainable Group growth: Becoming a customer information partner, evolving into a strategic partner

Sustainable growth of the Group

Consolidated net sales ¥62 billion(fiscal 2020)

Securing steady profits

Consolidated operating margin8% level

(3-year period of fiscal 2018–2020)

Investments for business growth

Ratio of R&D expenses to net sales2% level

(previously 1% level)

Promoting ROA-conscious management

Consolidated dividend payout ratioaround 35%

(fiscal 2020)

Group Vision

Take the Initiative—in the field of data-activation

Our new 12th Medium-Term Management Plan was formulated taking into account the above analysis. We outlined our Group basic policy as Take the Initiative—in the field of data-activation. With the dissemination of AI, big data and IoT, companies are reaching the same conclusion: information is key. Amid such an environment, we must take the initiative and lead the industry. To achieve this, we believe we must shift from being a company that supports customers as an information partner to a company that demonstrates value as a strategic partner.

To take the lead in this field, we will place priority on further improving our data handling technology, which is at the core of our business and represents the key advantage we have over our competitors, to promote the three strategic points outlined in the plan with a sense of urgency.

We aim for consolidated net sales of ¥62.0 billion in fiscal 2020, a goal designed to force us to accelerate our growth rate. Realizing the importance of making concrete investments in business growth and strengthening our core competence, we are increasing our R&D investment ratio from 1% to 2% of net sales. At the same time, we will ensure solid profitability and plan to achieve a consolidated operating margin of 8% (for the 3-year period of fiscal 2018–2020).

Strategic Point 1. Develop an R&D framework for creating growth drivers

We have focused on R&D to a certain extent, but this has not been a Group-wide, systematic effort. As we aim to foster new growth drivers, the effective utilization of resources and capabilities with an awareness of Group-wide synergy will be vital. With this

Overview and Strategies of the 12th Medium-Term Management Plan

Outline of Strategic Point 1

▲

See page 11.


Natural Language Processing

The use of computers to process everyday language, for example in Japanese or English. Typical applications include English to Japanese translation, speech recognition and document summaries.

in mind, we have established the INTAGE Group R&D Center and created a common Group framework. Furthermore, in addition to securing data scientists specialized in data analysis and creating a training system for them, we will use CVC and other means to work with external partners to accelerate business development and technology research. Currently, our Group has an environment for analyzing standard data but moving forward we will look to create an environment capable of smoothly handling large-volume data such as video and audio. To this end, fields such as AI-based natural language processing, understanding of stimuli and reactions, and robotics will be priority research domains.

Strategic Point 2. Evolve business domains and increase data value

We seek further evolution in each segment while working to pioneer businesses based on new ideas. In the Marketing Support (Consumer Goods & Services) segment, we will combine internal data and client data to increase data value and expand our service domains. Currently, SRI, a cornerstone of our profits, receives data from approximately 4,000 stores on a daily basis. To service more detailed marketing strategies of our clients, we plan to develop a next-generation panel using big data that will allow us to, for example, acquire data on a larger scale and further increase accuracy. In the Marketing Support (Healthcare) segment, we will develop patient-centered marketing to expand business opportunities. For the Business Intelligence segment, we will invest in a big data high-speed processing platform to address the need for handling video and audio data. Together with Kousokuya, Inc., which possesses high-speed processing technology, we are advancing design and development toward the creation of a platform for next-generation data utilization.

Strategic Point 3. Take on the challenge of workstyle reform

An environment where we can leverage a diverse range of talent is vital. To ensure each of our employees is able to utilize his or her talents as a professional and offer an even greater level of added value, we must promote workstyles that suit teams and individuals to raise productivity and create a workplace that offers fulfillment and the opportunity to play an active role. To this end, we have assigned Director Yoshiya Nishi as the Director in charge of Promoting Workstyle Reform and all domestic Group companies have begun initiatives aimed at workstyle reform. INTAGE HOLDINGS has already launched a flextime system and is expanding the use of remote work. Promoting workstyle diversity will make it easier to recruit and empower employees who are aligned with our Group goals, and is sure to lead to an increase in productivity.

Establish the INTAGE Group R&D Center and Create a Common Group Framework

INTAGE Group R&D Center

Technology research

Research

do

main

s

Business development

Commercialization

Robotic Process Automation (RPA)Streamlining and automation of work through the use of cognitive technology

Application of natural language processingApplication in qualitative research through the use of AI, etc.

Understanding of stimuli and reactionsVideo recognition technology for analysis of still images, video and audio, etc.

Promotion of collaboration

Participation

Group operating companies

Incubation Promotion Division of INTAGE HOLDINGS

Establishment and operation of an internal job posting system

Promotion of collaboration with technical partners in the implementation of POC*

Implementation/support of POC

SBI Investment, INTAGE Open Innovation Fund, FTI, Innovations and Future Creation, Interwoos, Kousokuya, the University of Tokyo, Tokyo Institute of Technology (no particular order)Partners

* Proof-of-concept: A simple test to verify that a new concept, theory or principle has practical potential.

Outline of Strategic Point 1

Promotion of collaboration

SRI

Nationwide retail tracking research

▲

See page 16.

Kousokuya, Inc.

▲

See page 22.



12th Medium-Term Management Plan Numerical Targets

FY2018 (forecast) FY2019 (forecast) FY2020 (forecast)

Plan Year-on-year Plan Year-on-year Plan Year-on-year

Consolidated net sales ¥ 51.0 +6.3% ¥ 56.0 +9.8% ¥ 62.0 +10.7%

Marketing Support (Consumer Goods & Services) Segment ¥ 33.2 +5.6% ¥ 35.9 +8.1% ¥ 39.4 +9.7%

Marketing Support (Healthcare) Segment ¥ 11.5 +7.5% ¥ 12.0 +4.3% ¥ 12.6 +5.0%

Business Intelligence Segment ¥ 6.3 +7.5% ¥ 8.1 +28.6% ¥ 10.0 +23.5%

Consolidated operating income ¥ 4.0 -6.3% ¥ 4.4 +10.0% ¥ 5.0 +13.6%

Dividends

Annual dividends per share

Fiscal 2017 ¥35.0Fiscal 2018 (forecast) ¥40.0

Payout ratio (consolidated)

Fiscal 2017 24.3%Fiscal 2018 (forecast) 28.6%

Fiscal 2018 is a strategic springboard for accelerating a variety of initiatives

For the year ending March 31, 2018 (fiscal 2018), we forecast increased revenues across all segments but slight underperformance in income compared to fiscal 2017. This is because we have identified fiscal 2018 as the time to accelerate initiatives and increase investments, including the establishment of the INTAGE Group R&D Center as a landmark undertaking, development of next-generation panels and the creation of a high-speed processing platform for big data. I have dubbed this year a “strategic springboard” and I believe the implementation of these initiatives will lead to significant growth in fiscal 2019 and beyond.

We position shareholder returns as one of our highest priority management issues. Our fundamental approach is to base shareholder returns on consolidated earnings and conduct profit distribution with consideration for the balance between dividends and retained earnings. Our goal is a consolidated dividend payout ratio of 35% in fiscal 2020.

We will enhance our core competence and contribute to the creation of a society in which consumers have a greater range of options

In contrast to the previous plan, our new medium-term management plan outlines Group-wide strategies and takes a more medium- to long-term perspective toward outlining a path for our evolution. One could say we are taking a more forward-looking approach.

Our goal is to evolve into a strategic partner for our customers. As a company that operates in the B-to-B arena, by becoming an invaluable part of the process of growth and value creation for customers, we can fulfill our desire to contribute to the lives of consumers. The INTAGE Group Way outlines our commitment to serve as a bridge that connects our customers to their customers to create a prosperous society of limitless possibilities. This value creation strategy is our path toward fulfilling that commitment.

We at the INTAGE Group will further cultivate the strength of our human resources, who are the source of value creation, and enhance our core competence. We will continue to evolve and contribute to the creation of a society that offers a greater range of options to consumers. I hope you continue to look forward to the future development of the INTAGE Group.

July 2017

Outlook for the Year Ending March 31, 2018

Seeking Further Increases in Corporate Value

Kenji Miyakubi President and Representative Director

(Billions of yen)


Focus: 12th Medium-Term Management Plan—Our Commitment to Take the Initiative

Transformation for the Future! Establish the basis for three-industry1 cross-domain marketing information flow

to further our understanding of client businesses and consumers to expand our client base, which at present consists mainly of manufacturing and service companies, to include distribution and retail companies as well as advertising and media companies. We will build a platform for cross-industry information flow that connects client marketing PDCA cycles.4 By innovating and improving client marketing activities, we will achieve happiness for the consumers that benefit from those services.

In fiscal 2018, the first year of the 12th Medium-Term Business Plan, we will work to better understand the marketing PDCA of not only manufacturing and service companies, but also companies in the distribution and retail, and advertising and media industries. Putting to work this understanding, we will develop a domestic and international platform and implement operations reform to improve our research functions and advance internal database development, statistical technology development and IT development. This will enable us to expand our marketing domains and develop a platform for linkage of marketing PDCA that transcends client industry borders.

Viewing fear as opportunity

Business environments and consumer environments have changed rapidly in recent years. Rapid digitalization that has accompanied the dissemination of a variety of devices and media has given birth to big data, which is now permeating our lives and has great potential for use in marketing.

Once companies begin using big data as the basis for decision-making, there are fears that the importance of the marketing research we have offered over the years will correspondingly decline. However, there are many matters that cannot be decided based simply on the big data collected automatically over the course of business activities. Current conditions represent an opportunity for INTAGE, an expert in mobilizing the technology and know-how needed for purpose-specific data gathering and marketing research. Utilizing our assets – data, handling techniques, expertise and research functions – we can activate2 whole data3 from external sources and gain a deeper understanding of consumers in a state of continuous flux.

Together with our clients, achieving happiness for consumers

One aspect of our business vision is to work hand in hand with the marketing philosophies of client businesses and achieve happiness for consumers. To achieve this vision, we will strive

1. Three industries: The manufacturing and service industry, distribution and retail industry, and advertising, Internet and media industry.

2. Activate: To allocate meaning to collected data so it can be used for marketing and other purposes.

3. Whole data: Data representing the entirety of research data, and not limited samples.

4. PDCA cycle: Plan, Do, Check, Act. Here, this refers to PDCA within the framework of client marketing activities.

Noriaki IshizukaPresident and Representative Director, INTAGE Inc. Representative Director and Executive Vice President, INTAGE HOLDINGS Inc.

We will use information to enhance marketing and bring happiness to consumers.

● Further understand client marketing PDCA ● Use our data, handling expertise and research functions to activate2 whole data3

from external sources

Marketing Support (Consumer Goods & Services)

INTAGE Inc.’s Basic Policy under the 12th Medium-Term Management Plan

KEYPOINTS


Focus: 12th Medium-Term Management Plan—Our Commitment to Take the Initiative

2. PMS: Post-marketing surveillance. Refers to post-marketing surveillance in the pharmaceutical development process.

3. Real-world data: Actual information on drug prescriptions, treatment efficacy and side effects recorded at medical care facilities as opposed to clinical trial data collected during the pharmaceutical development process. A key term in the medical and pharmaceutical industries.

4. PDS: Personal data store. A framework through which personal information is managed by the individual or an administrator so it can be shared freely and safely for use by family, friends and service providers.

5. ADDIN series: An electronic data capture system series provided by ASKLEP. The system is specifically designed for post-marketing surveillance (see page 20).

1. Ad-hoc research: Another name for “custom research” (see page 17).


Yoshiya NishiPresident and Representative Director, ANTERIO Inc.

Director, INTAGE HOLDINGS Inc.

We will achieve continued growth while responding to the increasing complexity of customer decision-making.

Our DNA of always challenging ourselves to innovate will drive ASKLEP’s evolution.

Yuichi YahagiPresident and Representative Director, ASKLEP Inc.

“Break Out” As a leading PMS2 company, we will pioneer a new medical

information market.

ASKLEP Inc.’s Basic Policy under the 12th Medium-Term Management PlanANTERIO Inc.’s Basic Policy under the 12th Medium-Term Management Plan

Transitioning from a Research Business to

a Decision-Support Business With pride in the value we offer,

we envision growth in new fields.

Enhancing our ability to further respond to customer needs

ANTERIO has thus far focused on services that provide clients with infrastructure and data sources for the purposes of researching various types of medical information. Moving forward, we will take the next step in our growth by engaging in the client decision-making process. This entails an intense focus on providing “Decisions with Confidence,” our business vision and raison d’être. We define this as the “decision-support business” and position this evolution from being a conventional research company as the core of our message.

In the first year of the 12th Medium-Term Business Plan, we will focus on organizational restructuring. To respond to client needs that could not be addressed through the function-specific services we have provided thus far – services such as panel surveys and ad-hoc research1 – we will transform into an organization easily capable of hybrid solutions focused on industry- and client-specific needs. This transformation will help us further strengthen our relationships of trust with clients. By enhancing links between services, we will place the highest priority on client expectations as we propose combinations of the optimal services to suit client needs.

Advanced business use of medical data

With the Japanese government implementing regulatory changes in the medical and pharmaceutical fields and the promotion of next-generation medical ICT, the utilization of real-world data3 and other personal data originating from patients is becoming invaluable. ASKLEP views this as an excellent opportunity for business expansion and has positioned the development of a business for gathering and utilizing medical data as a core theme in our strategy for the medium-term. Driving this strategy will be our ability to process the large-scale data we have collected from post-marketing surveillance, and our PDS4 technology, which we have pursued and developed as a new business. Our challenge shall be to combine the two in our quest for new business developments.

During fiscal 2018, we will increase our market share by further expanding sales of our growth platform, the ADDIN series.5 By building a successful track record at pharmaceutical companies and medical institutions, we will lay a strong foundation for generating new opportunities for the use of medical data. We are also working toward the rapid commercialization of our patient community app developed using PDS technology. In this way we will identify medical data acquisition routes in order to expand the possibilities of the data business.

14 INTAGE HOLDINGS INC.INTAGE HOLDINGS INC.

Becoming a leading company for data value creation

The key to success is to continuously enhance our technological capabilities and the commercialization of products that incorporate market needs.

Enhancing our technological capabilities involves keeping pace with the most advanced technology and applying it toward development of services. Our expertise in the application of cutting-edge technology and our organizational culture for taking on the challenges of new technology are the strengths that have enabled us to enhance our technological capabilities. Moving forward, we will strive to distinguish ourselves in relation to technology in the data utilization field. We will work ceaselessly to ascertain constantly changing customer needs and fold them back into product development.

In fiscal 2018, we will focus on establishing our position as a leading company in the creation of value from data and work to develop a big data high-speed processing platform. At the same time, we will build on our track record of AI utilization and apply that knowledge toward our service offerings and develop a framework of data utilization services. Moreover, we will combine our cumulative understanding of industries and workflows with frontier technology to develop new services and enhance our lineup of offerings.

Transitioning to a platform-based business model

In the IT industry, we are seeing a shrinking trend among conventional IT businesses focused on individual project orders from clients. We ourselves are concerned about the possibility of a gradual decline if we remain solely dependent on management contracts and additional development for existing projects. On the other hand, the rapidly growing IT service markets that leverage big data, IoT and AI are projected to see continued growth.

INTAGE TECHNOSPHERE’s strengths include its technical prowess for building data utilization platforms and its development of services based on a deep understanding of industries and workflows. We will apply these strengths toward riding this trend and implementing business reform to achieve growth.

There are two core themes underpinning our business reform.

The first is the development of a big data high-speed processing platform. Grounded in our existing technical capabilities related to data utilization, we will develop a service platform capable of processing and consolidating big data on the petabyte1 scale at high speeds. We will combine this with such services as AI-based optimization and failure prediction2 and offer them as data services.

The second is the transition to a platform business. We will create a framework for universal services that enables us to take the existing services we provide primarily to the pharmaceuticals and travel industries and offer them to clients in other industries, and will further the development of platform services using advanced technology. In this way we will evolve from a contract-based to a platform-based business model.


● Develop a big data high-speed processing platform and ancillary services● Enhance the company platform to enable business reform● Increase clients for industry-based platforms, develop new services

Realization of a Data Utilization BusinessThat Supports a Data Revolution

KEYPOINTS

INTAGE TECHNOSPHERE Inc.’s Basic Policy under the 12th Medium-Term Management Plan

We will apply our experience toward the development of a big data high-speed processing platform.

Shigemi SugawaPresident and Representative Director, INTAGE TECHNOSPHERE Inc.

1. Petabyte: A unit of measurement for digital information; the next in sequence after gigabyte and terabyte.

2. Optimization and failure prediction: Optimization of distribution delivery routes, predictive detection of malfunctions on plant manufacturing lines, etc. In this case, this refers specifically to solutions for client problems.

15INTAGE GROUP REPORT 2017INTAGE GROUP REPORT 2017

Panel Research

Overview of Services

• Where, in what quantity and by whom products are purchased • Quantitative changes in the market structure associated with purchasing behavior such as

brand switching• Consumer attributes such as the types of people who are purchasing a product

What the data reveal

Using specialized scanners, smartphones and apps, the SCI collects data on purchases of food products, beverages and miscellaneous daily items, consumed both inside and outside the home, from 50,000 male and female panelists nationwide. It is Japan’s largest consumer panel, and provides insight based on high-quality data that gives a detailed picture of consumer purchasing behavior.

SCINationwide Individual ConsumerPanel Research

Consumer panel research What do different types of households and individuals purchase, where and at what prices?

• Which products are sold when, where, in what amounts, at what prices, and at which kinds of stores

• How stores are competing in terms of distribution, merchandise assortment and price, and the resulting sales volume

• Merchandise assortment and hot-selling products by store type


The SRI collects POS data on a variety of product categories, such as food products, beverages and miscellaneous daily items, from approximately 4,000 supermarkets, convenience stores and drugstores and other major retailers nationwide. It has unrivaled strength in this field, and is used as the standard index in various industries.

SRI Nationwide Retail Tracking Research

Retail tracking research What kinds of products are selling when, where, and at what prices?

• What was sold when, where and at what prices• The size of the market for each category• Changes in product market shares


The SDI collects POS data focused on healthcare-related categories, centered on over-the-counter (OTC) drugs, from approximately 3,200 pharmacy, drugstore, supermarket and convenience store outlets nationwide. It has established a position as the sole source of data for learning about the OTC drug market.

SDI Nationwide Drugstore Tracking Research

Other panels


i-SSP Service Overview

Collects purchasing data, media contact data and other data from the same person

TelevisionComputer Smartphone Tablet

Purchases Attributes andvalues

Newspapers, outdoor

advertisements, etc.

Today, with the spread of social networking sites and the use of multiple devices, new approaches to diversifying consumer purchasing behavior are required. The INTAGE Group’s panel research data provides a visual representation of the customer journey,1 and helps to measure the effectiveness of clients’ communication strategies.

The i-SSP collects data from the same person (single source data) on his or her exposure to advertisements and interaction with media such as television, computers and mobile devices, as well as purchasing data from the SCI. It is Japan’s largest cross-media single source panel, and provides comprehensive support for the marketing PDCA cycle from media planning to reach measurement and advertising effectiveness measurement.

INTAGE Single Source Paneli-SSP

Communications Field

Mail Interviews Central location test

(CLT)

Door-to-door interviews

Internet Access panel: approximately

7.13 million2 individuals

Data Collection MethodsThis research is customized to address each client’s issues. We use various research methods and our unique analytical abilities to provide valuable information that reflects the real market situation.

Custom Research

Cue Monitor Official Character “Cuemot”

Conceived to raise awareness of our Cue Monitor system, Cuemot is cast as a “hotshot producer” that appears across a wide range of events and media.

3. Members of NTT DOCOMO’s d Point Club who have consented to participate in surveys conducted by DOCOMO InsightMarketing as part of d Point Club Surveys tendered by NTT DOCOMO.

2. As of May 2017

• The actual media exposure of target segments and the true face of the audience

• How to efficiently reach the target of the ad campaign• Whether the ad campaign strategy led to purchases or a better image


INTAGECue Monitors

MightyMonitors

DOCOMO InsightMarketing d POINT CLUB3

1.45million individuals

Mainlysmartphone-based


MainlyPC-based


● We can flexibly handle requests, from simple surveys to highly challenging research requiring detailed design.

● Panelists are classified by information screened for attributes and specific themes, enabling precise and efficient panelist selection.

● Mobile interviews by chat or video calls that take advantage of the unique characteristics of smartphones are also possible.

The industry’s largest online access panel comprising some 7.13 million2 individuals

“Mighty Monitors”

1. Customer journey: The behavioral, thought and emotional processes that customers go through, from discovering a product or service through to making a purchase.

Mighty Monitors


Business Overview

The INTAGE Group mobilizes its sophisticated research techniques and data analysis capabilities based on data obtained from panel research and custom research to provide one-stop marketing support for a diverse range of clients, including consumer goods manufacturers. In this business, our understanding of consumers is the source of the value we deliver to our clients. Our main strengths in this business are panel data from both consumers and retailers, our understanding of the relationship between contact with media and purchasing behavior in a cross-media environment, and our ability to use Japan’s largest cross-media single source panel to provide a picture of actual consumer behavior.

Marketing Support(Consumer Goods & Services)

Performance in the Year Ended March 31, 2017

We have sought to further increase the profitability and competitiveness of our existing businesses, particularly panel research and custom research. Furthermore, to respond to the growing importance of mobile and digital marketing, we have worked to further expand our services and target clients for INTAGE Single Source Panel (i-SSP) in the communications field. Additionally, we have worked to develop and offer new solutions and services.

While overseas operations experienced difficult conditions in certain countries, we worked toward the development of appealing solutions and promoted governance to improve profitability.

For fiscal 2017, the segment recorded increased revenues and income thanks to firm performance for panel research and Internet surveys in custom research. Net sales were ¥31,433 million, up 4.5% year on year, and operating income was ¥2,387 million, up 16.7%.

Panel research12,987

Custom research9,174

Communication2,740

Overseas subsidiaries3,374

Others3,154

Net sales

¥31,433million

消費財消費財消費財消費財

Main Client Industries

Sales by Service

Consumer goods

Durable consumer

goodsServices Government

agencies

“Mobile Spatial Statistics” is a tool for analyzing population statistical information generated from the DOCOMO mobile phone network. Using the operating data of as many as 75 million domestic mobile phones and 5 million mobile phones of foreign visitors to Japan,2 it is possible to ascertain population distribution across the whole of Japan on an hourly basis, 24 hours a day, 365 days a year. This makes it possible to know timeframes, demographic characteristics, start and end locations, and travel distances for population movements.

New Population Statistics Based on Operating Data from 75 Million Mobile Phones1

Mobile Spatial Statistics

Topic: Area Marketing

Data Example

Understanding where people at a given location have come from

Prediction data for origin (home area) of people in Tokyo Station.

Research Overview (Residents of Japan)

Target area: City area: 500 m mesh (250 m in some parts), Suburbs: 1 km mesh Time: Minimum 1 hour units, possible to conduct continuous research by date or day of week Age range: 15–79 years old Home area: Can search by city, town, village or district

Note: “Mobile Spatial Statistics” and the “Mobile Spatial Statistics” logo are trademarks or registered trademarks of NTT DOCOMO, Inc.

1. As of March 2017. The above figures exclude corporate contracts and MVNO data.2. From January 2016 to December 2016, based on DOCOMO proprietary statistics.

Review of Operations

Operating Companies

• INTAGE Inc.

• INTAGE RESEARCH Inc.

• Access JP Inc.

• IXT Inc.

• INTAGE CONSULTING Inc.

• Overseas subsidiaries

Example applications: PR activities Disaster planning Analysis of inbound

tourism Tourism planning

Tokyo Station Tokyo Station

Weekdays Holidays

ManyFew


Market insights and category

insights Consumer insights

Targeting

and profiling

Value design

4P/UX design

Tracking and

optimization

Brand health checkup and optimization

Understand

Mea

su

re

Reach

Create

Che

ck &

A

ct

Do

Plan

n

Communi-cation and execution

Shopper

insights and channel design

Communication design

Case Study: Tracking and Optimization1

Recent changes in mass media and purchasing channels have driven the diversification of purchasing behavior and decision-making processes. Consumers are engaged with products, services and brands not only at the time of purchase, but also have an impact at various other stages, through such means as word-of-mouth reviews and by distributing information via social media before and after making a purchase. This environment has led companies to focus on the following. ● Companies themselves must function as a form of mass media that distributes information ● Companies must partner with consumers to create and foster brands and products

Major environment changes accompanying the new age of circulating marketing

INTAGE provides full-scale PDCA (Plan-Do-Check-Act) support for client marketing activities based on its keen understanding of the constantly changing marketing environment, including the diversification of consumer purchasing patterns and evolution in marketing trends.

Our lineup of marketing PDCA solutions for the communications field (see page 17) is shown to the left.

Support of client PDCA from all angles

Kao is a comprehensive toiletry manufacturer whose operations cover some 50 brands and involve numerous advertising and promotional activities. Kao has an organization dedicated to promoting digital marketing that investigates how best to utilize data in the company’s business activities from the perspective of data analysis.

As shown in the diagram below, Kao measures advertising exposure rates for television and digital, respectively, and uses that analysis to conduct repeated validation of estimates. This allows them to optimize their ad volume plans and work toward implementing an ideal communications plan.

Kao Corporation

INTAGE Inc. Offers Systematic Solutions to Support Companies’ Marketing PDCA Cycles

Wide-Ranging Solutionsin the Communications Field

Use of i-SSP (INTAGE Single Source Panel)

Using i-SSP data, it is possible to measure current consumer television commercial exposure and Internet (i.e. desktop and mobile device) advertisement exposure rates. We combine the data from these two different media formats and categorize consumers in our own proprietary way to evaluate how to optimize ad volume. Specifically, to control over-frequency2 while

maintaining optimal exposure volume and achieve contact with target audiences that do not watch much television, we use i-SSP data to conduct simulations based on the number of deployed television commercials to identify the optimal amount. This type of validation is repeated and used in planning actual distribution plans.

Measure impressions, current exposure

Assess optionsfor maximizing reach Content distribution planning

Initiatives to Optimize the Communications Plan

Measure current exposure Estimate appropriatecontent volume Content volume planningTV (terrestrial)

Digital

: i-SSP data used

THE IDEAL COMMUNICATIONS

PLAN

Initiatives by Kao

1. Tracking and optimization: Continued tracking and analysis of data changes, and optimization of data process.2. Over-frequency: When the deployment of large volumes of commercials causes a specific set of consumers to see the same television commercial

dozens of times.

19INTAGE GROUP REPORT 2017INTAGE GROUP REPORT 2017


Business Overview

The INTAGE Group supports the research and development and marketing activities of pharmaceutical companies with services including marketing research, contract research organization (CRO) services and prescription data analysis for over-the-counter and prescription drugs. The source of our competitiveness in this business is our high-value-added solutions that draw on the insight and expertise we have gained through extensive experience in surveying consumers, patients and healthcare professionals, together with our system development capabilities.


ASKLEP Inc. captured post-marketing surveillance projects at an accelerated rate. Following a capital and business partnership agreement in May 2015 with Kyoto Constella Technologies Co., Ltd., ASKLEP made the company a subsidiary in December 2016. With this move, ASKLEP will move forward with the development of a safety assurance business that makes use of an adverse event information system. ANTERIO Inc., which mainly engages in custom research for pharmaceutical manufacturers, saw favorable performance for its highly competitive custom research services while also offering new forms of research and solutions to meet the needs of client businesses.

As a result, the segment recorded increased revenues and income in fiscal 2017. Net sales were ¥10,693 million, up 9.9% year on year, and operating income was ¥1,483 million, up 8.6%. This was due to favorable performance in post-marketing surveillance by ASKLEP Inc. and Internet surveys in custom research by ANTERIO Inc., among other factors.

Panel research2,509

Custom research2,923

CRO4,437

Others821

Net sales

¥10,693million


Main Client Industry

Sales by Service

Pharmaceuticals

Developing a new drug involves numerous phases, starting with basic research, and takes a long time – typically more than 10 years – and enormous effort and expense. In that process, contract research organizations (CROs) perform and support various related work for pharmaceutical manufacturers, such as clinical trials and post-marketing surveillance. In the INTAGE Group, ASKLEP Inc. conducts this business.

About CROs

An electronic data capture (EDC) system developed to enable the digital management of clinical reports created in hard copy. This system allows drug manufacturers and CROs to collect data input into computers or other terminals by doctors and medical staff over the Internet for real-time monitoring and management. ASKLEP launched sales of their EDC solutions service in 2004 and in 2010 released ADDIN, an EDC system specifically designed for post-marketing surveillance.

ADDIN SeriesEDC System

Service Introduction: CRO and EDC System ADDIN

Pharmaceutical Development

Flow

Basic research 2-3 years

Preclinical studies

3-5 years

Clinical trials 3-7 years

Phase I-III trials

Post-marketing surveillance 4-10 years

LaunchReview ADDIN

specializes here

CRO (contract research organization)

Support

Marketing Support(Healthcare)

Operating Companies

• ANTERIO Inc.

• ASKLEP Inc.

• Japan Medical Information Research Institute Inc.

• PLAMED Inc.

• Plamed Korea Co., Ltd.

• Kyoto Constella Technologies Co., Ltd.



Operating Companies

• INTAGE TECHNOSPHERE Inc.

• DataAge Inc.

Business Overview

The INTAGE Group’s business extends from software development and sales to system operation, maintenance and management, as well as data center operation. In addition, we provide other services in support of management strategies, including support for improvement of business processes related to system development and operation. Our strengths in this business are our ability to solve problems with a unique approach that combines advanced information technology with our marketing insight, and to provide proprietary systems services backed by industry expertise. In recent years, we have also expanded our service offerings to research of the latest information technologies, particularly artificial intelligence and deep learning, and development of related services.


INTAGE TECHNOSPHERE Inc. worked to further strengthen existing business structures related to systems development and management operations, and also focused on new client development. At the same time, the company worked with capital and business alliance partner XCompass Intelligence Ltd. to offer solutions in the AI field and aggressively conducted tests related to the development of new services. We began exploratory considerations with the aim of creating a next-generation data utilization platform that leverages the proprietary high-speed data processing technology held by Kousokuya, Inc., with which INTAGE HOLDINGS Inc. executed a capital and business alliance agreement in August 2016.

In fiscal 2017, revenues increased with net sales rising to ¥5,860 million, up 3.4% year on year, but operating income decreased to ¥398 million, down 15.5%. Although healthcare and travel sector sales were firm, income was impacted by factors including investments in new business relating to the use of AI.


Domestic CG&S*3,489

Healthcare2,370

Net sales

¥5,860million


Main Client Industries

Sales by Service

Health insurancePharmaceuticalsServices

* Consumer goods and services

● Health management support services (Sukoyaka Support 21)● Disease prevention solutions using

health data

● Sales information systems ● MR activities support

● Sales space management systems● Vending machine route planning systems

● Area Manager (commercial area analysis tool) ● Distribution route simulators

● Land Stage (information management system

for real estate use as collateral)

● Settlement systems for travel agents● Internet survey systems for customer

satisfaction research

● Publication point-of-sales systems ● Bookstore information portal sites

● Assistance programs for university management, education and student support

● Utilization of data related to student activities● System solutions

Services and Target Industries/Businesses of INTAGE TECHNOSPHERE

INTAGE TECHNOSPHERE

Wholesale and

retail

Manufacturing

Finance

Universities and

educationPublishing

Travel

Healthinsurance and health

management

Medical


Business Overview

Kyoto Constella Technologies offers system development and contracted analysis support services in the healthcare field, including for basic research on drugs and processing post-marketing side effect and other information, mainly for pharmaceutical companies and medical institutions.

Technology Strengths

Kyoto Constella Technologies successfully commercialized services and products based on technology conceived by Professor Yasushi Okuno of the then-Kyoto University Graduate School of Pharmaceutical Sciences (name as of 2008). The company is unique for its technical expertise in using advanced algorithms, including large-volume data processing in the drug development process and machine learning.

The basic research phase of drug development requires searching for candidate compounds for use as active drug ingredients. However, in theory there are an astronomical number of potential chemical compounds. Efficient drug development therefore requires an exhaustive approach using computer simulations and big data. Kyoto Constella Technologies has a track record of large-scale computations using the K supercomputer and since its founding has provided contracted calculation support services to pharmaceutical and other companies.

The company also provides unique products and services such as real-world data analysis using drug side effect information and data from e-medical charts and medical prescriptions, and the development of information search systems for doctors and pharmacists.

Alliance with the INTAGE Group

Kyoto Constella Technologies has had a capital and business partnership agreement in place with ASKLEP Inc., the INTAGE Group company in charge of the healthcare business (see page 20), since May 2015 and became a subsidiary of ASKLEP in December 2016. The company aims to further stabilize the provision of services and achieve greater business growth while combining the technologies and services of both companies to further contribute to drug development.

Business Overview

Mainly involved in technology provision and consulting related to high-speed data processing.

From big data searches, analysis and processing to machine and system performance improvements, Kousokuya uses high-speed technology and technical know-how to resolve the data processing issues that companies face. The company takes a unique approach to client issues by working with the client company to conduct joint research and leverage its technical strengths to arrive at the optimal solution.

Technology Strengths

Kousokuya holds some 70 international and domestic patents and has a strong reputation as a solutions provider for high-speed data processing. The core of its high-speed processing is the “high-speed tree,” a tree algorithm developed in Japan by Kousokuya. The greatest strength of this high-speed tree is that it can conduct various operations, including large-volume data searches and computations, using fewer computer/hardware resources compared to other data processing technologies. Based on this technology, Kousokuya supports the high-speed processing of the massive and diverse big data handled by the INTAGE Group.

Examples of Technology Solutions

[DENSO Corporation] Destination search engine for car navigation systems

Achieved searching and sorting of large volumes of destination data using low memory resources, something thought beyond the bounds of conventional technology, to enhance car navigation search functions.

[Alpen Co. Ltd.] High-speed processing for nationwide point-of-sales data

Implemented software to speed up gathering and processing of product and inventory data. Compared to the previous system, data processing speed increased approximately 20-fold, enabling nearly real-time visualization of inventory status and sales performance.

The INTAGE Group believes that to achieve further growth will require not only Group internal efforts, but also the harnessing of technology and knowledge of external companies.

Below, we introduce two companies with which we entered into capital and business alliances. Both companies possess unique advanced technological capabilities and, through their alliances with the INTAGE Group, are striving for further shared growth.

Using state-of-the-art computational science to develop drug-related services

Kyoto Constella Technologies Co., Ltd.

An IT systems development company possessing high-speed data processing technology created in Japan

Kousokuya, Inc.

Established in March 2008 as a startup company with roots at Kyoto University. Kyoto Constella Technologies uses state-of-the-art computational science technology to offer unique services and products.

Established in May 2002, Kousokuya, Inc. is an IT systems developer that uses high-speed data processing technology to resolve the various data processing issues faced by companies.

New Group Members Generating New Synergy


Sustainability

At the INTAGE Group, we position our Group Vision - Know today, Power tomorrow - outlined in The INTAGE Group Way

as the ideal situation for which we strive. Our CSR activities are also grounded in our pursuit of this vision. This Group

Vision expresses our commitment to creating greater corporate value through CSR activities that apply the strengths and

character of each company in the INTAGE Group while fulfilling our social responsibilities as a listed company.

INTAGE Group Basic CSR Policy

Based on The INTAGE Group Way, we apply the INTAGE Group’s capabilities to solve

issues facing society through communication with stakeholders while meeting our

fundamental social responsibilities. With this approach, we aim for the continuous

synergistic development of the INTAGE Group and society.

Relationship with Our Employees

Commitment to Our Basic CSR Policy

The INTAGE Group seeks honest communication with all its stakeholders and is committed to engaging in trustworthy management practices. At the same time, through our business activities, we strive to contribute to the sustainable development of society and our company. To achieve these goals, the INTAGE Group adopted a new Basic CSR Policy for fiscal 2018 and beyond.

Initiatives for Promoting Women’s Active Participation in the Workplace

The INTAGE Group has no gender bias in employment conditions or pay scales. We provide a comfortable workplace environment for female employees. Women fill 22.2% of management positions at INTAGE Inc. (fiscal 2017) and we are working steadily to increase this to the goal of 25% outlined in the law to promote the role of women in the workplace in Japan.

In March 2017, INTAGE RESEARCH Inc. was certified as an Eruboshi (“L-Star”) Company as outlined in the law to promote the role of women in the workplace in Japan. The company was named as a three-star company, the highest rank for this recognition. “Eruboshi” Three-Star Company

Certification Mark

Workstyle Reform Initiative

The INTAGE Group launched a workstyle reform initiative for our 14 domestic companies.

We named Yoshiya Nishi, a director at INTAGE HOLDINGS Inc., as the Detector in charge of Promoting Workstyle Reform and established the INTAGE Group Workstyle Reform Project. Our Group is working as one to promote and implement this project.

Beginning in April 2017, INTAGE HOLDINGS took the lead in implementing flextime, which eliminates core work hours. At the same time, we have established and are promoting working remotely, which allows employees to choose where to work without any limits on eligibility or frequency of use.

In addition to creating a supportive work environment, we are striving to cultivate a corporate culture in which all employees have autonomy as professionals and feel motivated in their work. Employment Data

Number of employeesRegular employees: 789, Contract employees: 57, Transfer employees: 7, Direct hire part-time employees: 67

Breakdown of full-time employees, and number and percentage of employees who are union members

Managers: 225, Full-time employees: 564 Union members: 211, Percentage of union employees: 37.4%

Turnover

Number of employees who left in the past year: 56 (36 men and 20 women) Turnover rate: 6.3% (Male employees: 7.4%, Female employees: 5.0%)

Number of female managers 50 (22.2% of total)

Note: Figures shown are for INTAGE Inc. only (as of March 31, 2017)

Leadership team for workstyle reform at the INTAGE Group(From left) Shigeyoshi Matsuo, Senior Manager, HRM Strategy Group, INTAGE HOLDINGS Inc.; Kenji Miyakubi, President and Representative Director; Yoshiya Nishi, Director in charge of Promoting Workstyle Reform


Environment Conservation Efforts

1. A company that provides services related to improving the energy efficiency of buildings.

The INTAGE Group made a donation of ¥10,000,000 through the Japanese Red Cross Society as disaster relief to go toward rebuilding the lives of people affected by the Kumamoto earthquakes that occurred in April 2016. In October, which marked six months since the earthquakes, staff from the Japanese Red Cross Society gave a talk on conditions in the affected areas and relief activities intermixed with video footage.

In March 2017, we participated in the Japanese Red Cross Society project “Forever remembered.” The goal of this project is to ensure that society does not forget the tragedy caused by past disasters and to save lives in potential disasters by raising awareness of disaster prevention and mitigation. During the project period between March 1 and March 31, Group employees in Japan wore project badges and otherwise worked to raise awareness regarding disaster prevention and mitigation.

Relationship with Society

TOPIC Support for Earthquake Victims

Sustainability

Energy Usage

The INTAGE Group operates a data center, which is an energy-intensive business. As such, electricity consumption at the Hibarigaoka Office is significant. The business was designated as a Type 2 designated energy management factory in accordance with the revised Energy Saving Act and a designated place of business subject to global warming prevention measures as outlined in the Tokyo Metropolitan Ordinance on Environmental Protection. However, over a multi-year period, with the cooperation of an energy service company (ESCO),1 we implemented continuous energy conservation measures for the Hibarigaoka Building to rationalize energy consumption. As a result of the large-scale reduction of energy consumed, the above two designations were lifted during the course of fiscal 2017.

Donations and Support for Various Organizations

The INTAGE Group supports the activities of various organizations through donations from shareholders and survey panelists.

To support those affected by the earthquakes that struck Kumamoto Prefecture in April 2016, we called on cue monitors to offer points as donations. As a result, ¥5,711,084 worth of points were collected between April 21 and May 31. This amount was then donated through the Japanese Red Cross Society as the Kyushu Kumamoto Earthquake Disaster Relief Fund (2016 Kumamoto Earthquake Disaster Relief Fund).

Year ended March 31, 2015



Electricity usage(thousands of kWh)

7,210 (5,602)

7,095 (5,435)

6,699(4,904)

Crude oil equivalent (kl) 1,790(1,391)

1,762(1,350)

1,664 (1,218)

Note: Amounts are rounded downFigures in parentheses are for Hibarigaoka only 2. Totals for the Akihabara, Hibarigaoka, Higashikurume offices

Energy Usage at Main Offices2 by Year



The C.W. Nicol Afan Woodland Trust 138,970 107,360

Japan Guide Dog Association 537,740 560,930

UNICEF 425,460 440,930

Japan Earthquake and Tsunami Relief Fund (Japanese Red Cross Society)

76,000 58,000

Total 1,178,170 1,167,220

(Yen)

Donations from Shareholder Benefit Planand Cue Monitors

Web banner for the Kyushu Kumamoto Earthquake Disaster Relief Fund


Basic Approach to Corporate GovernanceWe believe that, as an enterprise made up of numerous stakeholders, the INTAGE Group has an important responsibility not only to improve business results but also to ensure the soundness, fairness and transparency of management.

The INTAGE Group Way, our corporate philosophy, is the cornerstone of our management. To fulfill that philosophy, the INTAGE Group’s Ethical Charter has been established as a set of guidelines that all of the Group’s executives and employees must follow in conducting business activities. Based on this charter, the Group has formulated the INTAGE Group Employee Code of Conduct, which defines the basic attitude and behaviors expected of employees. The code of conduct is instilled in the Group’s executives and employees to ensure that they carry out sound business activities in compliance with laws and regulations.

In keeping with our Basic Policy on Corporate Governance, the Group has implemented all principles set forth in the Corporate Governance Code issued by Tokyo Stock Exchange, Inc.

Corporate Governance StructureOn June 17, 2016, we transitioned from a company with a Board of Corporate Auditors to a company with an Audit & Supervisory Committee. This change strengthens our corporate governance structure by bolstering the oversight and supervision function of the Board of Directors, accelerating decision-making through the delegation of authority, and raising the level of fairness, transparency and effectiveness in business execution.

• Board of DirectorsThe Board of Directors consists of six directors (excluding directors serving as Audit & Supervisory Committee members; including one outside director), and four directors

serving as Audit & Supervisory Committee members (including three outside directors), who meet once a month, in principle, to make decisions on policies and other important matters concerning the Company’s business execution, and oversee the execution of duties by executive officers and directors, including the representative directors. By appointing outside directors as directors serving as Audit & Supervisory Committee members, we further strengthen the oversight function of the Board of Directors and incorporate objective views on the Company’s overall management. Those views are reflected in the Board’s discussions and decisions.

• CommitteesThe Company has established the Internal Control Committee to promote internal control initiatives in the Group, the Crisis Management Committee to respond to crises involving the Group’s business, the Management System Committee to further improve the Group’s management systems, and the Information Security Committee to identify and resolve information security issues.

• Audit & Supervisory CommitteeThe Audit & Supervisory Committee consists of four directors serving as Audit & Supervisory Committee members (including three outside directors), and convenes once a month in principle. Directors serving as full-time Audit & Supervisory Committee members attend meetings of the Internal Control Committee and other key meetings. They then report to the other directors serving as Audit & Supervisory Committee members (the outside directors) at Audit & Supervisory Committee meetings, collect the views of the Audit & Supervisory Committee, and otherwise strengthen auditing and oversight of management.

In addition, through the Company’s internal control system, Audit & Supervisory Committee members regularly receive reports on the status and results of internal audits.

Corporate Governance

Corporate Governance StructureGeneral Meeting of Shareholders

Crisis Managem

ent Comm

ittee

Board of Directors (6 inside directors and

4 outside directors)

Audit & Supervisory Committee

(1 inside and 3 outside members)

President and Representative Director

Executive Committee

Internal Audit Department

Operating departments and management departments of

INTAGE HOLDINGS and Group companies

Group Management Meeting

Managem

ent System Com

mittee

Internal Control Comm

ittee Independent Auditor

Consulting Law Office

• The INTAGE Group Way• INTAGE Group’s Ethical Charter

• INTAGE Group Employee Code of Conduct• Basic Policy on Internal Control Systems

Promote

Emergency response

Accounting audits/ Audits of internal control over financial reporting

Reporting of legal or compliance violations

Legal consultation/Reports of compliance violations

Instruct

Collaboration

Collaboration

Internal audits

Report

Report Audit andsupervisionInstruct

Internal control departments


They may also request reports as necessary from directors, executive officers and business execution departments of the Company and Group companies.

Outside DirectorsThe Company has four outside directors, three of whom are Audit & Supervisory Committee members.

As of March 31, 2017, outside directors Shizue Kishi, Hajime Nakajima and Eiichi Izumo held 800 shares, 800 shares and 100 shares, respectively, of the Company’s common stock. There are no special interests between the Company and the outside directors.

The functions and roles of the outside directors in supervising the Company are to draw on their experience, achievements and professional insight to provide advice and recommendations from an independent standpoint to promote sound, appropriate decision-making by the Board of Directors. At meetings of the Audit & Supervisory Committee, they make statements and recommendations aimed at ensuring sound business operations, which are reflected in the Company’s management.

The Company believes that appointing outside directors enables it to reflect a broad range of expertise from an independent standpoint in its management decisions. The Company’s criteria for the independence of outside directors are based on its Independence Criteria for Outside Directors, with reference to the independence criteria of Tokyo Stock Exchange, Inc.

The outside directors share information on audits with the Internal Audit Department and internal control departments through the activities of the Audit & Supervisory Committee. They also maintain close cooperation with the Company’s independent auditors by exchanging opinions on each other’s audits and sharing information on the status and results of audits.

Internal Control SystemsIn addition to the regular meetings of the Board of Directors and the Audit & Supervisory Committee, the Group Management Meeting, which is responsible for reporting, deliberation and decision-making on management policies and measures and matters related to business operations, convenes once a month, and is attended by directors (excluding Audit & Supervisory Committee members), directors serving as full-time Audit & Supervisory Committee members, executive officers and the presidents of Group companies. The Executive Committee, which consists of directors (excluding Audit & Supervisory Committee members), directors serving as full-time Audit & Supervisory Committee members, and executive officers, meets every other week to support the Board of Directors, report on and discuss various matters, and improve management efficiency.

Risk Management StructureIn accordance with the Basic Policy on Internal Control Systems, the Group appoints a director as Chief Risk Officer, and has set up the Internal Control Committee comprising representatives from Group companies to establish mechanisms for recognizing and assessing risks, as well as rules for risk management. This committee also collaborates and cooperates with the Management System Committee to increase the effectiveness of risk management and handles cross-sectional risk management for the entire INTAGE Group. Furthermore, the Group appoints an executive officer as Chief

Information Officer, and has set up the Information Security Committee comprising representatives from Group companies to deliberate and decide matters relating to the establishment and execution of measures for identifying and resolving Group information security issues.

Furthermore, Group companies acquire ISO9001 certification where appropriate to the nature of their operations, and quality management is carried out in conformance with this standard and subject to regular internal and external audits. In addition, a system for the protection of personal information based on the Privacy Mark, which the Company has obtained, is applied and implemented throughout the INTAGE Group. The INTAGE Group’s Ethical Charter and the INTAGE Group Employee Code of Conduct are publicized to all employees on the Company intranet, and compliance training is provided on a regular basis through e-learning and other systems, to promote compliance throughout the Group. Moreover, a compliance hotline that connects to the Company’s law firm has been set up to facilitate adherence to and maintenance of the compliance system.

Audits by the Audit & Supervisory Committee and Internal Audits The Audit & Supervisory Committee consists of four directors serving as Audit & Supervisory Committee members. In accordance with the audit policies set by the Audit & Supervisory Committee, the Audit & Supervisory Committee members attend meetings of the Board of Directors and other important meetings, monitor the process of decision-making on matters concerning management, clearly express their opinions as appropriate, and conduct audits to ascertain the status of timely business execution and verify its legality.

The Internal Audit Department, which is responsible for internal audits, consists of seven members and conducts audits of the Company and Group companies to confirm the fairness, accuracy and effectiveness of organizational management and the conduct of business in accordance with the Company’s management philosophy, management policies and regulations.

The Internal Audit Department also exchanges opinions and information concerning audits with independent auditors, and maintains close cooperation with internal control departments, which centrally monitor the status of these audits and internal control activities.

Communication with Shareholders and InvestorsRecognizing the importance of listening to the views of its shareholders and investors and reflecting them in its management, the Company works to enhance communication with them through IR activities.

For communication with individual shareholders and investors, the Company holds regular information meetings for individual investors throughout Japan, in addition to the general meeting of shareholders.

For communication with analysts and institutional investors, the Company holds regular briefings in conjunction with announcements of financial results for the fiscal year and for the first half, and also holds numerous individual meetings.

For overseas shareholders and investors, the Company provides information through its website and conducts individual meetings as necessary.

Corporate Governance


Shizue Kishi

Outside Director

“I will work to enhance strengths that arenot easily copied.”

“I will promote micro monitoring and macro principles.”

“I will voice my opinion in a variety of areas to promote appropriate decision-making.”

The role of the outside director is to monitor Company management from an independent perspective. I believe this means looking at the Company from a viewpoint that is close to that of a shareholder. In terms of what this entails for the Board of Directors, it means not allowing the Board of Directors to become an extension of internal meetings. Put another way, it involves conducting micro monitoring of Company management from the perspective of legal affairs and accounting. Additionally, it includes taking a third-party perspective and interjecting long-term, macro principles into discussions. To achieve this role, I will work proactively to communicate and discuss principles with those in charge of operations.

Even in this age of AI, IoT, and big data, it is people that are able to convert information into value. For the INTAGE Group to achieve further growth, I believe it must build a framework that promotes the Group-wide sharing of the experience and untapped knowledge of Group members in order to pass this on to the next generation. My role is to provide a broad range of opinions as an attorney and also to conduct monitoring from an independent, third-party perspective to ensure that decision-making is conducted appropriately.

Hajime Nakajima

Director Serving on the Audit & Supervisory Committee (Outside Director)

Yuzo Miyama

Director Serving on the Audit & Supervisory Committee(Outside Director)

“I will view change as both opportunity and risk, and act with a sense of speed.”

Amid the rapid, dramatic changes in the operating environment, the INTAGE Group has made great changes to its governance structure, including transitioning to a holding structure and replacing directors. Market changes bring both opportunity and risk. I will fulfill my role as a director by ensuring I have a sufficient grasp and understanding of the INTAGE Group’s operating environment, its organization and internal personnel, and its supervisory structure. From an independent perspective, I will evaluate whether the Company is acting quickly to invest in opportunities while at the same time questioning whether the Company has sufficiently evaluated and prepared for risks.

Eiichi Izumo

Director Serving on the Audit & Supervisory Committee(Outside Director)

Comments from Outside Directors

The strength of the INTAGE Group is its framework and expertise related to gathering and analyzing the large-volume data that is vital to digital marketing and is a core aspect of consumer behavior patterns, media penetration, and storefront sales. The Group has continued to grow by applying that expertise to overseas markets and the domestic pharmaceuticals business. “Intelligence,” the inspiration for the Company name,* is something that is not easily copied and as we head into the age of AI, will become an even more invaluable management resource. As an academic researcher of advertising, marketing and consumer behavior, I hope to be able to provide advice in those areas.

* As part of the change in company name from Marketing Intelligence Corporation in 2001, we defined the 21st century as the “Intelligence Age,” with “INTAGE” representing our mission to pioneer a new age.


Management Team

13579

Directors

Kenji MiyakubiPresident and Representative Director

1980 Joined the Company2007 Director and General Manager, Incubation Center2010 Executive Director and General Manager, Business Development Group2011 President, Representative Director and General Manager, Business Development Group2012 President and Representative Director (current position)

1

Noriaki IshizukaRepresentative Director and Executive Vice President

1982 Joined the Company2006 Director and Deputy General Manager, Sales Group2008 Director and Unit Director, Business Solutions Unit2009 Director and General Manager, Sales Group2011 Director and General Manager, DCG and Services Business Group2013 Executive Director President and Representative Director, INTAGE Inc. (current position)2015 Director 2017 Representative Director and Executive Vice President (current position)

2

Kenji IkeyaDirector and CFO, in charge of Internal Controls

1980 Joined The Saitama Bank, Ltd.2011 General Manager, Corporate Management Division2013 Executive Officer and General Manager, Finance &

Investor Relations Division2014 Executive Officer in charge of Finance & Investor

Relations Division and General Manager, Corporate Administration Office

2015 Executive Officer in charge of Finance & Investor Relations Division and General Manager,

President’s Office Senior Executive Officer in charge of Finance, Crisis

Management Committee, Internal Control Committee2016 Senior Executive Officer in charge of Corporate

Finance Division, President’s Office, Internal Control and Risk Management Division, Crisis Management Committee, Internal Control Committee

2016 Director and CFO, in charge of Internal Controls (current position)

3

Yoshiya NishiDirector, Executive Officer in charge of Group Healthcare Business, in charge of Promoting Workstyle Reform

1992 Joined Social Survey Research Information Co., Ltd.1994 Director, TM Marketing Inc. (currently ANTERIO Inc.)2005 Vice President and Representative Director, TM Marketing Inc.2007 President and Representative Director, TM Marketing

Inc. (current position)2014 Executive Officer in charge of Group Healthcare Solutions2015 Executive Officer in charge of Group Healthcare Business Director, ASKLEP Inc. (current position)2016 Director in charge of Group Healthcare Business2017 Director in charge of Group Healthcare Business, in charge of Promoting Workstyle Reform (current position)

4

Kiyomi MiyauchiDirector, in charge of Group Overseas Business, Chief Director of Overseas Business

1983 Joined the Company2005 General Manager, Global Research Division, Solution Group2007 General Manager, Sales Division IX, Sales Group2008 Chief Executive Officer, INTAGE (Thailand) Co., Ltd.

(current position)2014 Executive Officer in charge of Overseas Business,

ASEAN and India, Representative, INTAGE HOLDINGS Inc. Regional Office (current position)

2015 Executive Officer in charge of Group Overseas Business Senior Executive Officer in charge of Group Overseas Business2016 Senior Executive Officer, in charge of Group Overseas

Business, Chief Director of Overseas Business2017 Director, in charge of Group Overseas Business, Chief Director of Overseas Business (current position)

5

Shizue KishiOutside Director

1983 Full-time Instructor, Faculty of Commerce, Nagoya University of Commerce & Business

1988 Assistant Professor, Faculty of Economics, Nagoya City University

1996 Professor1998 Professor, Faculty of Business Administration, Tokyo

Keizai University (current position), Executive Director, Japan Academy of Advertising (current position)

2010 Chairperson, Japan Academy of Advertising2014 Dean, Faculty of Business Administration, Tokyo

Keizai University2015 Director, the Company2016 Director serving on the Audit & Supervisory Committee 2017 Outside Director (current position)

6

(As of June 27, 2017)


2 4 6 8 10

Directors Serving on the Audit & Supervisory Committee

Ayumi HigakiSenior Executive Officer, in charge of Group Business Strategy

Director, INTAGE Inc.

Director (part-time), INTAGE TECHNOSPHERE Inc.

Shigemi SugawaExecutive Officer, Group CIO, in charge of Information Security

President and Representative Director, INTAGE TECHNOSPHERE Inc.

Toshio OdagiriExecutive Officer, in charge of Affiliated Companies, in charge of Management Planning, in charge of Incubation Promotion

Jiro KimuraExecutive Officer, in charge of Group Shared Services

President and Representative Director, INTAGE ASSOCIATES Inc.

Executive Officers and Their Responsibilities

Takashi ItoDirector Serving on the Audit & Supervisory Committee (full-time)

1977 Joined IBM Japan, Ltd.2008 Deputy General Manager, Sales Group2012 Executive Officer, General Manager, FMCG

Business Group2015 Senior Executive, Auditing Staff and in charge of

Internal Audit Office2016 Senior Executive, Auditing Staff and in charge of

Internal Audit Division Director serving on the Audit & Supervisory Committee (full-time) (current position)

7 Eiichi IzumoDirector Serving on the Audit & Supervisory Committee (Outside Director)

1995 Joined Tohmatsu & Co. (currently Deloitte Touche Tohmatsu LLC)

1998 Registered as Certified Public Accountant2010 Partner, Deloitte Touche Tohmatsu LLC2015 Representative, Izumo Certified Public Accountant Office (current position), Substitute Corporate Auditor, the Company Outside Audit & Supervisory Board Member, Benesse Holdings, Inc. (current position)2016 Outside Audit & Supervisory Board Member,

TORII PHARMACEUTICAL CO., LTD. (current position), Director serving on the Audit &

Supervisory Committee (current position)

9

Hajime NakajimaDirector Serving on the Audit & Supervisory Committee (Outside Director)

1986 Appointed as Judge1997 Judge, Tokyo District Court2002 General Manager, Administrative Bureau, Secretarial Training Institute, Supreme Court2004 General Manager of Training, Comprehensive

Training Institute for Court Staff2005 Judge, Tokyo High Court2007 Retired as Judge, Tokyo High Court, Professor, Toin Law School (current position), Registered as an Attorney2014 Substitute Corporate Auditor, the Company2015 Outside Corporate Auditor, the Company2016 Director serving on the Audit & Supervisory Committee (current position)

8

Yuzo MiyamaDirector Serving on the Audit & Supervisory Committee (Outside Director)

1983 Registered as lawyer (Dai-ichi Tokyo Bar Association)1986 Established Yuzo Miyama Law Office2001 Representative, Miyama Law Office (current position)2007 Outside Director, Ai Holdings Corporation (current position)2016 Member of the independent committee, the Company2017 Director serving on the Audit & Supervisory Committee (current position)

10


Scope of ConsolidationThe INTAGE Group (the “Group”) consists of INTAGE HOLDINGS Inc. (the “Company”), 24 consolidated subsidiaries and 4 affiliated companies.

The Group’s activities are classified according to client industry and services provided. The three reportable segments are “Marketing Support (Consumer Goods & Services),” “Marketing Support (Healthcare)” and “Business Intelligence.”

In Marketing Support (Consumer Goods & Services), the Group provides data services, custom research, analytical models, communication services and other services based on various types of independently collected data, research techniques and data analysis. In Marketing Support (Healthcare), the Group conducts marketing research for over-the-counter and prescription pharmaceuticals, performs data management and analysis on consignment from pharmaceutical manufacturers, and provides contract research organization (CRO) services to support pharmaceutical development. In Business Intelligence, the Group’s services include software development and sales, system operation, maintenance and management, and data center operation.

The Group also helps clients to solve issues in their businesses by blending its research techniques, system technologies, industry and operations knowledge, consulting capabilities and other professional skills, backed by a comprehensive understanding of marketing, to provide intelligence that aids in decision-making. In addition, the Group proposes new business models.

Summary of ResultsIn fiscal 2017 (the consolidated fiscal year ended March 31, 2017), the Japanese economy followed a moderate recovery path owing to a pickup in corporate earnings and consumer spending backed by the government’s economic policies and an improved employment and income environment. On the other hand, the state of overseas economies remained uncertain, due primarily to the slowdown in emerging market economies such as China, the new U.S. policies under the Trump administration and the U.K.’s planned withdrawal from the European Union.

Under these circumstances, in fiscal 2017, the final year of the INTAGE Group’s 11th Medium-Term Management Plan, the Group worked to achieve the plan’s priority objectives with “Renovation & Innovation: Toward accelerated growth utilizing our deep insights on people as our greatest asset” as the Group’s basic policy.

As a result, the INTAGE Group’s net sales for fiscal 2017 were ¥47,987 million (up 5.5% year on year), with operating income of ¥4,268 million (up 9.9%), ordinary income of ¥4,392 million (up 11.3%) and net income attributable to owners of the parent of ¥2,871 million (up 23.4%).

Results by Business Segment• Marketing Support (Consumer Goods & Services)

In the Marketing Support (Consumer Goods & Services) segment, both sales and profits increased, bolstered mainly by solid performance of panel research and Internet surveys in the custom research area.

As a result, sales in the Marketing Support (Consumer Goods & Services) segment totaled ¥31,433 million (up 4.5% year on year), with operating income of ¥2,387 million (up 16.7%).

• Marketing Support (Healthcare)

In the Marketing Support (Healthcare) segment, both sales and profits increased, buoyed chiefly by the strong performance of post-marketing surveillance at ASKLEP Inc., as well as Internet surveys in the custom research area at ANTERIO Inc.

As a result, sales in the Marketing Support (Healthcare) segment totaled ¥10,693 million (up 9.9% year on year), with operating income of ¥1,483 million (up 8.6%).

• Business Intelligence

In the Business Intelligence segment, despite an increase in sales, profits declined, attributable mainly to investments in a new business utilizing AI, which offset strong orders for healthcare- and travel-related projects.

As a result, sales in the Business Intelligence segment totaled ¥5,860 million (up 3.4% year on year), with operating income of ¥398 million (down 15.5%).

Management’s Discussion and Analysis


Sales and Income• Net Sales

In the Marketing Support (Consumer Goods & Services) segment, sales increased, bolstered mainly by solid performance of panel research and Internet surveys in the custom research area.

In the Marketing Support (Healthcare) segment, sales increased, buoyed chiefly by the strong performance of post-marketing surveillance at ASKLEP Inc., as well as Internet surveys in the custom research area at ANTERIO Inc.

In the Business Intelligence segment, sales increased, mainly attributable to strong orders for healthcare- and travel-related projects.

As a result, net sales increased ¥2,506 million compared with the previous fiscal year to ¥47,987 million, an increase of 5.5%.

• Cost of Sales and Selling, General and Administrative Expenses

Cost of sales increased ¥1,345 million, or 4.0%, year on year to ¥34,603 million, largely due to the increase in operating costs associated with growth in net sales. The cost-to-sales ratio was 72.1%, a decrease of 1.0 percentage points from the previous fiscal year.

Selling, general and administrative (SG&A) expenses increased ¥775 million, or 9.3%, year on year to ¥9,115 million, mainly because of increased selling expenses accompanying increased net sales. The ratio of SG&A expenses to net sales was 19.0%, up 0.7 percentage points from the previous fiscal year.

• Operating Income

Operating income increased ¥385 million, or 9.9%, year on year to ¥4,268 million as the increase in net sales exceeded the increase in cost of sales and SG&A expenses.

• Non-Operating Income and Expenses

Non-operating income increased ¥100 million, or 76.5%, year on year to ¥231 million due to factors including increased share of profit of entities accounted for using equity method. Non-operating expenses increased ¥41 million, or 61.2%, to ¥108 million as a result of an increase in loss on investments in partnership, among other factors.

• Extraordinary Loss

Extraordinary loss decreased ¥12 million, or 9.7%, to ¥118 million, mainly because of the absence of a loss on valuation of shares of subsidiaries and associates recorded in the previous fiscal year.

• Net Income Attributable to Owners of the Parent

Net profit before income taxes increased ¥457 million and income taxes decreased ¥96 million compared with the previous fiscal year. As a result of these and other factors, net income attributable to owners of the parent increased ¥545 million, or 23.4%, year on year to ¥2,871 million.

• Cash Flows

Cash and cash equivalents (“cash”) as of March 31, 2017 totaled ¥10,418 million, an increase of ¥605 million from the end of the previous fiscal year. The increase was the result of ¥4,072 million in cash provided by operating activities, ¥2,110 million in cash used in investing activities and ¥1,300 million in cash used in financing activities.

Cash Flows from Operating ActivitiesNet cash provided by operating activities was ¥4,072 million, an increase of ¥2,358 million from the previous fiscal year. This was mainly because the increase in notes and accounts receivable–trade was less than in the previous year and the decrease in accrued consumption taxes was less than in the previous year.

Cash Flows from Investing ActivitiesNet cash used in investing activities was ¥2,110 million, an increase of ¥318 million from the previous fiscal year. This was mainly due to an increase in payments for purchases of property, plant and equipment and an increase in payments for purchases of investment securities.

Cash Flows from Financing Activities Net cash used in financing activities was ¥1,300 million, compared with net cash provided by financing activities of ¥1,566 million in the previous fiscal year. This was chiefly due to an increase in repayments of short-term loans payable.


Analysis of Financial Position• Assets

Current assets as of March 31, 2017 increased ¥1,421 million from the end of the previous fiscal year to ¥25,694 million. This was mostly due to increases of ¥643 million in cash and deposits and ¥893 million in notes and accounts receivable–trade.

Non-current assets increased ¥816 million from the end of the previous fiscal year to ¥13,373 million, reflecting changes including an increase of ¥1,116 million in investment securities.

As a result, total assets increased ¥2,237 million to ¥39,067 million.

• Liabilities

Current liabilities increased ¥113 million from the end of the previous fiscal year to ¥11,999 million. While income taxes payable decreased ¥414 million, accounts payable–trade increased ¥371 million and provision for bonuses increased ¥137 million.

Non-current liabilities decreased ¥310 million to ¥3,295 million, largely because of decreases in long-term loans payable of ¥200 million and lease obligations of ¥107 million.

As a result, total liabilities decreased ¥196 million to ¥15,295 million.

• Net Assets

Total net assets increased ¥2,433 million from the end of the previous fiscal year to ¥23,771 million. This increase was mostly because of a ¥2,218 million increase in retained earnings.

Dividend Policy The INTAGE Group’s basic policy is to distribute earnings while considering the balance between dividends and retained earnings, based on consolidated results that reflect the performance of the Group’s management. INTAGE HOLDINGS considers the return of earnings to shareholders to be one of its highest management priorities, and targets a consolidated payout ratio of 35%. Retained earnings are used for investment to continually enhance the Group’s growth and profitability. Our aim is to ensure returns to shareholders through efforts to enhance performance.

The Company plans to pay a dividend of ¥35.00 per share (a payout ratio of 24.3%) for the fiscal year ended March 31, 2017. For the fiscal year ending March 31, 2018, the Company plans to pay a dividend of ¥40.00 per share.

Performance Outlook for the Year Ending March 31, 2018In fiscal 2018 (the consolidated fiscal year ending March 31, 2018), although there are concerns about uncertainty over the future of overseas economies and the volatility of financial and capital markets, the Japanese economy is likely to remain on a moderate recovery trend underpinned by a range of government measures.

In fiscal 2018, the first year of its 12th Medium-Term Management Plan, the INTAGE Group will set Take the Initiative—in the field of data-activation as its basic policy, implement proactive investments, and sharply increase R&D spending in areas such as AI and robotics, thereby accelerating the development of next-generation services.

The INTAGE Group expects consolidated net sales of ¥51,000 million (up 6.3% year on year) in fiscal 2018, with operating income of ¥4,000 million (down 6.3%), ordinary income of ¥4,150 million (down 5.5%) and net income attributable to owners of the parent of ¥2,800 million (down 2.5%).

Management Discussion and Analysis


1. Information ManagementThe information services industry in which the INTAGE Group participates involves handling a large volume and variety of corporate and personal information, given the characteristics of the business. Therefore, in addition to utilizing a system for protection of personal information in accordance with the Personal Information Protection Law and the Privacy Mark, the INTAGE Group gives adequate attention to management of various types of information, including establishing a specialized unit for information security management systems (ISMS) and computer security incidents and taking security measures for the public disclosure system.

In addition, as there is a risk that various types of information held by the Group may be improperly obtained or falsified as a result of unauthorized access to the Group’s information systems, stringent verification is conducted when systems are used, and necessary measures are taken to protect their security.

However, any leakage or other misuse of information could cause a loss of public trust in the Group and could have a material impact on the Group’s business results.

2. Dependence on Second-Half PerformanceThe business performance of the INTAGE Group is disproportionately weighted toward the second half of the fiscal year. This imbalance is attributable to three main factors: in the Marketing Support business, research required by corporate clients for the preparation of the following year’s marketing plans is concentrated toward the end of the fiscal year; completion and delivery periods for reports commissioned by governmental agencies are concentrated toward the end of the fiscal year; and, in the Business Intelligence business, a high proportion of systems development contracts stipulate delivery at the end of the fiscal year.

Risks related to the INTAGE Group’s business operations and financial condition that may have a significant impact on investor decisions are described below. Note that any references to the future in this section are based on the judgment of the Group’s management as of March 31, 2017.

Apr.-Sep. 2015 Oct. 2015-Mar. 2016 Apr.-Sep. 2016 Oct. 2016-Mar. 2017

Net sales 20,343 (44.7) 25,137 (55.3) 21,448 (44.7) 26,539 (55.3)

Marketing Support(Consumer Goods & Services) 13,282 (44.2) 16,798 (55.8) 13,828 (44.0) 17,604 (56.0)

Marketing Support (Healthcare) 4,568 (46.9) 5,165 (53.1) 5,098 (47.7) 5,595 (52.3)

Business Intelligence 2,492 (44.0) 3,172 (56.0) 2,521 (43.0) 3,339 (57.0)

Operating income 1,319 (34.0) 2,564 (66.0) 1,373 (32.2) 2,895 (67.8)

Ordinary income 1,333 (33.8) 2,614 (66.2) 1,370 (31.2) 3,022 (68.8)

For Reference: Performance in Each Half of the Past Two Fiscal Years

3. Business Investment The INTAGE Group makes investments that are necessary for ensuring growth in its established businesses and developing new areas of business.

However, negative effects that arise as a result of these investments, or the inability to obtain results from the investments as expected, could adversely affect the INTAGE Group’s business performance and business development.

In addition, the delayed discovery of problems at a company the INTAGE Group has invested in and inability to take prompt corrective action, or the INTAGE Group’s inability to devote sufficient personnel or other resources to investment activities, could adversely affect the INTAGE Group’s business performance and business development.

4. Business Risk(1) In panel research, the core service of the INTAGE Group’s Consumer Goods & Services business, the Group is introducing new products and working to increase added value through a shift from data provision to solutions provision in order to secure further growth potential. Should these measures fail to progress as anticipated, the INTAGE Group’s business performance could be adversely affected.

In the custom research sector, competition is intensifying with the emergence of companies specializing in Internet research. To overcome this competition, the INTAGE Group must constantly invest in systems at each stage of collecting, processing, analyzing and providing research data. If the results of this competition and the cost of system investment become an excessive burden, the INTAGE Group’s business performance could be adversely affected.

Parentheses indicate percentage of total amounts for the year.

(Millions of yen)

Business-Related Risks


(2) The Healthcare business can be greatly affected by trends in the pharmaceutical industry. The Group’s business performance could be adversely affected in the event of a contraction of the market resulting from factors such as a decrease in new drug development in Japan, or by changes such as revisions to the Pharmaceutical Affairs Act or other laws or regulations.

(3) In the Business Intelligence business, the INTAGE Group is strengthening its solution functions for specific industries based on the industry knowledge and client base it has cultivated by providing services in close contact with clients, such as operation, maintenance and management of systems. However, the Group’s business performance could be adversely affected if these efforts do not progress as expected.

5. PersonnelAs the INTAGE Group engages in many highly specialized businesses, the recruitment and development of human assets is an important matter. Recruitment of global human assets has also become urgent as the Group actively expands its business internationally.

Accordingly, the INTAGE Group continuously reviews the implementation of systems related to recruitment, development and evaluation of personnel, and the plan. Furthermore, the Group places priority on developing the next generation of managers, and is working to speed up succession.

However, should human asset development fail to progress satisfactorily despite these measures, the INTAGE Group’s business performance could be adversely affected.

6. Conditions in Overseas MarketsThe INTAGE Group conducts the custom research business at consolidated subsidiaries INTAGE CHINA Inc. in China, CONSUMER SEARCH HONG KONG LIMITED in Hong Kong and MACAO RESEARCH CENTRE LTD. in Macao; the healthcare research business at Plamed Korea Co., Ltd. in Korea; the custom research business at INTAGE (Thailand) Co., Ltd. in Thailand and INTAGE VIETNAM LIMITED LIABILITY COMPANY in Vietnam; the panel research and custom research businesses at INTAGE SINGAPORE PTE. LTD. in Singapore; and the custom research business at PT. INTAGE INDONESIA in Indonesia and INTAGE INDIA Private Limited in India.

However, the INTAGE Group’s business performance could be adversely affected if laws or regulations related to the Group’s business overseas are enacted, amended or otherwise changed; if situations that hinder the Group’s business operations arise as a result of political factors; or if unforeseen events such as natural disasters or infectious disease epidemics occur.

7. Management IssuesThe INTAGE Group maintains the Management System Committee to respond to various management issues.

Furthermore, the Group has an Internal Control Committee and is placing particular emphasis on strengthening the compliance structure.

Nevertheless, should these mechanisms fail to function adequately and inadequate inculcation of the spirit of compliance at the individual employee level occur, the INTAGE Group’s business performance could be adversely affected.

8. Changes in Foreign Exchange RatesThe INTAGE Group translates the financial statements of the overseas Group companies listed above in 6. from local currencies into Japanese yen. Consequently, changes in exchange rates could adversely affect the INTAGE Group’s business performance.

9. Systems FailureThe INTAGE Group’s data center is manned around the clock, and the management system incorporates thorough security measures including the installation of surveillance cameras and information control at the time of entry and exit by means of electronic key cards. In addition, all possible measures are taken to ensure stable operation at all times, including an earthquake-resistant structure, fire-extinguishing equipment, redundancy of electric power facilities, and the installation of on-site power generation facilities.

Nevertheless, the inability to use the Group’s facilities or networks due to unexpected serious events such as the occurrence of a system or hardware failure, a malicious computer virus, a hacker attack, a large-scale power outage or an earthquake, fire, flood, accident or other disaster of unexpected magnitude could adversely affect the INTAGE Group’s business performance.

10. Intellectual PropertyIn the course of conducting its business activities, the INTAGE Group takes meticulous care not to violate the patents, trademarks or other intellectual property rights of third parties. Nevertheless, should the Group violate the intellectual property rights of a third party, or should a third party newly establish intellectual property rights in one of the INTAGE Group’s business areas, the Group may be forced to discontinue business operations in the field in question, or receive demands for compensation, an injunction, or other claims from that third party. Such outcomes could adversely affect the INTAGE Group’s business performance.

11. Holding Company 11. Holding Company INTAGE HOLDINGS Inc., the listed holding company representing the INTAGE Group, derives its income from management fees paid to the Company by the operating companies whose shares it directly holds, and from dividends paid according to the business results and financial position of the operating companies. Therefore, deterioration of the financial position of operating companies resulting in their inability to pay dividends to the Company could adversely affect the Company’s business performance.

Business-Related Risks


Consolidated Statements of Income INTAGE HOLDINGS Inc. and Consolidated SubsidiariesFor the fiscal years ended March 31, 2016 and 2017

Millions of yen Thousands of U.S. dollars*

2016 2017 2017

Net sales ¥45,481 ¥47,987 $427,729Cost of sales 33,257 34,603 308,432

Gross profit 12,223 13,384 119,297 Selling, general and administrative expenses 8,340 9,115 81,246

Operating income 3,883 4,268 38,042

Non-operating income

Interest income 6 6 53 Dividend income 37 45 401 Share of profit of entities accounted for using equity method 39 122 1,087 Insurance benefit received and dividends 11 24 213 Other 36 32 285

Total non-operating income 131 231 2,059

Non-operating expenses

Interest expenses 20 26 231 Loss on investments in partnership 6 33 294 Loss on retirement of non-current assets 5 17 151 Foreign exchange losses 17 11 98 Other 18 20 178

Total non-operating expenses 67 108 962

Ordinary income 3,947 4,392 39,147

Extraordinary loss

Impairment loss — 118 1,051Loss on valuation of shares of subsidiaries and associates 120 — —

Other 11 — —

Total extraordinary loss 131 118 1,051 Net profit before income taxes 3,815 4,273 38,087 Income taxes - current 1,259 1,498 13,352 Income taxes - deferred 225 (109) (971)

Total 1,485 1,388 12,371 Net income 2,330 2,885 25,715 Net income attributable to non-controlling interests 3 13 115 Net income attributable to owners of the parent ¥ 2,326 ¥ 2,871 $ 25,590

Consolidated Statements of Comprehensive IncomeINTAGE HOLDINGS Inc. and Consolidated SubsidiariesFor the fiscal years ended March 31, 2016 and 2017


2016 2017 2017

Net income ¥2,330 ¥2,885 $25,715

Other comprehensive income

Valuation difference on available-for-sale securities 170 305 2,718 Foreign currency translation adjustments (74) (79) (704)Remeasurements of defined benefit plans (424) (63) (561)

Total of other comprehensive income (loss) (328) 162 1,443 Comprehensive income ¥2,001 ¥3,047 $27,159

Comprehensive income attributable to:

Comprehensive income attributable to owners of the parent ¥2,004 ¥3,037 $27,070 Comprehensive income attributable to non-controlling interests (2) 8 71

* The U.S. dollar amounts presented are calculated from Japanese yen at US$1 = ¥112.19, the rate prevailing on March 31, 2017.

Consolidated Financial Statements


Consolidated Balance SheetsINTAGE HOLDINGS Inc. and Consolidated SubsidiariesAs of March 31, 2016 and 2017


2016 2017 2017

ASSETS

Current assets:

Cash and deposits ¥ 9,823 ¥10,466 $ 93,288

Notes and accounts receivable–trade 10,640 11,533 102,798

Work in progress 1,240 1,620 14,439

Stored item 49 80 713

Deferred tax assets 1,102 1,187 10,580

Other current assets 1,423 810 7,219

Allowance for doubtful accounts (5) (4) (35)

Total current assets 24,273 25,694 229,022

Non-current assets:

Property, plant and equipment:

Buildings and structures 5,838 5,898 52,571

Accumulated depreciation (4,046) (4,279) (38,140)

Net buildings and structures 1,792 1,619 14,430

Equipment and fixtures 1,229 1,219 10,865

Accumulated depreciation (839) (902) (8,039)

Net equipment and fixtures 390 317 2,825

Land 1,998 1,998 17,809

Lease assets 1,440 1,315 11,721

Accumulated depreciation (654) (667) (5,945)

Net lease assets 786 647 5,767

Other 0 0 0

Accumulated depreciation (0) (0) (0)

Net other 0 0 0

Net property, plant and equipment 4,966 4,582 40,841

Intangible assets:

Goodwill 336 117 1,042

Other intangible assets 1,520 1,790 15,955

Total intangible assets 1,857 1,908 17,006

Investments and other assets:

Investment securities 2,211 3,327 29,655

Deferred tax assets 755 669 5,963

Net defined benefit retirement assets 1,296 1,329 11,845

Other 1,469 1,55 6 13,869

Allowance for doubtful accounts (0) (1) (8)

Total investments and other assets 5,732 6,882 61,342

Total non-current assets 12,556 13,373 119,199

Total assets ¥36,830 ¥39,067 $348,221





2016 2017 2017

LIABILITIES

Current liabilities:

Accounts payable–trade ¥ 2,693 ¥ 3,065 $ 27,319

Short-term loans payable 2,354 2,200 19,609

Lease obligations 307 271 2,415

Income taxes payable 1,147 733 6,533

Provision for bonuses 1,640 1,778 15,848

Allowance for point program 1,113 1,218 10,856

Allowance for directors’ bonuses 10 17 151

Provision for stock benefits 1 1 8

Other current liabilities 2,616 2,713 24,182

Total current liabilities 11,885 11,999 106,952

Non-current liabilities:

Long-term loans payable 200 — —

Lease obligations 555 448 3,993

Provision for stock benefits 49 76 677

Retirement allowance for directors 2,797 2,763 24,627

Other non-current liabilities 3 7 62

Total non-current liabilities 3,606 3,295 29,369

Total liabilities 15,491 15,295 136,331

NET ASSETS

Shareholders’ equity:

Capital stock 1,681 1,681 14,983

Capital surplus 1,336 1,336 11,908

Retained earnings 17,433 19,651 175,158

Treasury stock, at cost (216) (207) (1,845)

Total shareholders’ equity 20,234 20,462 182,387

Accumulated other comprehensive income:

Valuation difference on available-for-sale securities 284 589 5,250

Foreign currency translation adjustments 464 390 3,476

Remeasurements of defined benefit plans 179 115 1,025

Total accumulated other comprehensive income 928 1,095 9,760

Non-controlling interests 175 214 1,907

Total net assets 21,338 23,771 211,881

Total liabilities and net assets ¥36,830 ¥39,067 $348,221



Consolidated Statements of Changes in Net AssetsINTAGE HOLDINGS Inc. and Consolidated SubsidiariesFor the fiscal years ended March 31, 2016 and 2017

Millions of yen

Shareholders’ equity Accumulated other comprehensive income

2016Capitalstock

Capital surplus

Retained earnings

Treasurystock Total

Valuation difference on available-for-sale securities

Foreign currency

translation adjustment

Remeasurements of defined benefit

plans Total Non-controlling

interestsTotal

net assets

Balance at the previous year-end ¥1,681 ¥1,336 ¥15,692 ¥(221) ¥18,489 ¥113 ¥532 ¥ 603 ¥1,249 ¥178 ¥19,917Change during period shown:

Dividends from surplus — — (603) — (603) — — — — — (603)Net income attributable to

owners of the parent — — 2,326 — 2,326 — — — — — 2,326

Disposition of treasury stock — — — 5 5 — — — — — 5Purchase of treasury stock — — — (0) (0) — — — — — (0)Changes in the scope of

consolidation — — 17 — 17 — — — — — 17

Change in ownership interest of the parent due to transactions with non-controlling interests

— — — — — — — — — — —

Net changes of items other than shareholders’ equity — — — — — 170 (67) (424) (321) (2) (324)

Total — — 1,740 5 1,745 170 (67) (424) (321) (2) 1,421Balance at fiscal year-end ¥1,681 ¥1,336 ¥17,433 ¥(216) ¥20,234 ¥284 ¥464 ¥ 179 ¥ 928 ¥175 ¥21,338

Millions of yen


2017Capitalstock

Capital surplus

Retained earnings

Treasurystock Total


Foreign currency



plans TotalNon-controlling

interestsTotal

net assets

Balance at the previous year-end ¥1,681 ¥1,336 ¥17,433 ¥(216) ¥20,234 ¥284 ¥464 ¥179 ¥ 928 ¥175 ¥21,338Change during period shown:

Dividends from surplus — — (653) — (653) — — — — — (653)Net income attributable to


Disposition of treasury stock — — — 9 9 — — — — — 9Purchase of treasury stock — — — (0) (0) — — — — — (0)Changes in the scope of

consolidation — — — — — — — — — — —


— (0) — — (0) — — — — — (0)

Net changes of items other than shareholders' equity — — — — — 305 (74) (63) 167 39 206

Total — (0) 2,218 9 2,227 305 (74) (63) 167 39 2,433Balance at fiscal year-end ¥1,681 ¥1,336 ¥19,651 ¥(207) ¥22,462 ¥589 ¥390 ¥115 ¥1,095 ¥214 ¥23,771

Thousands of U.S. dollars*


2017Capitalstock

Capital surplus

Retained earnings

Treasurystock Total


Foreign currency



plans Total Non-controlling

interestsTotal

net assets

Balance at the previous year-end $14,983 $11,908 $155,388 $(1,925) $180,354 $2,531 $4,135 $1,595 $8,271 $1,559 $190,195 Change during period shown:

Dividends from surplus — — (5,820) — (5,820) — — — — — (5,820)Net income attributable to


Disposition of treasury stock — — — 80 80 — — — — — 80 Purchase of treasury stock — — — (0) (0) — — — — — (0)

Changes in the scope of consolidation — — — — — — — — — — —


— (0) — — (0) — — — — — (0)

Net changes of items other than shareholders' equity — — — — — 2,718 (659) (561) 1,488 347 1,836

Total — (0) 19,770 80 19,850 2,718 (659) (561) 1,488 347 21,686 Balance at fiscal year-end $14,983 $11,908 $175,158 $(1,845) $200,213 $5,250 $3,476 $1,025 $9,760 $1,907 $211,881



Consolidated Statements of Cash FlowsINTAGE HOLDINGS Inc. and Consolidated SubsidiariesFor the fiscal years ended March 31, 2016 and 2017


2016 2017 2017Cash flows from operating activities:

Income before income tax and minority interests ¥ 3,815 ¥ 4,273 $ 38,087 Depreciation 1,562 1,417 12,630 Impairment loss − 118 1,051 Amortization of goodwill 91 116 1,033 Decrease (increase) in net defined benefit retirement assets 272 (32) (285)Increase (decrease) in net defined benefit retirement liability (43) (33) (294)Increase (decrease) in provision for directors’ retirement benefits (4) − −Increase (decrease) in accrued employees’ bonuses 148 138 1,230 Increase (decrease) in provision for directors’ bonuses 4 6 53 Increase (decrease) in allowance for doubtful accounts (0) (0) (0) Increase (decrease) in allowance for point program 152 105 935 Increase (decrease) in provision for stock benefits 24 26 231 Interest and dividend income (43) (52) (463)Equity in (earnings) losses of affiliates (39) (122) (1,087)Interest expenses 20 26 231 Loss (gain) on investments in partnership 6 33 294 Loss on retirement of non-current assets 5 17 151 Loss on valuation of shares of subsidiaries and associates 120 − −Decrease (increase) in notes and accounts receivable–trade (1,454) (701) (6,248)Decrease (increase) in inventories 123 (417) (3,716)Increase (decrease) in notes and accounts payable–trade 260 392 3,494 Increase (decrease) in accrued consumption taxes (623) (39) (347)Other (506) 763 6,800

Sub total 3,893 6,036 53,801 Proceeds from interest and dividend income 44 52 463 Interests expenses paid (20) (26) (231)Income taxes paid (2,203) (1,990) (17,737)

Net cash provided by operating activities 1,713 4,072 36,295 Cash flows from investing activities:

Payments into time deposits (9) (38) (338)Proceeds from withdrawal of time deposits 9 4 35 Payments for purchases of property, plant and equipment (127) (520) (4,634)Payments for acquisition of intangible assets (1,022) (829) (7,389)Payments for purchases of investment securities (356) (684) (6,096)Payments for loans (0) (25) (222)Proceeds from loans receivable 0 4 35 Purchase of investments in affiliates resulting in change in scope of consolidation − (12) (106)Payments for security deposits (328) (27) (240)Proceeds from refund of security deposits 34 19 169 Other 8 0 0

Net cash used in investing activities (1,791) (2,110) (18,807)Cash flows from financing activities:

Proceeds from short-term loans payable 2,356 4,032 35,939 Repayments of short-term loans payable (56) (4,381) (39,049)Proceeds from long-term loans payable 200 − −Repayments of lease obligations (336) (322) (2,870)Proceeds from payments from non-controlling interests − 31 276 Payments for acquisition of treasury stock (0) (0) (0) Dividends paid (596) (659) (5,873)Payments for dividends paid to non-controlling interests − (0) (0)

Net cash provided by (used in) financing activities 1,566 (1,300) (11,587)Effect of exchange rate changes on cash and cash equivalents (38) (55) (490)Net increase (decrease) in cash and cash equivalents 1,449 605 5,392 Cash and cash equivalents at beginning of year 8,366 9,812 87,458 Decrease in cash and cash equivalents due to exclusion from consolidation (3) − −Cash and cash equivalents at end of year ¥ 9,812 ¥10,418 $ 92,860



Company Name INTAGE HOLDINGS Inc.

Established March 1960

President and Representative Director Kenji Miyakubi

Capital ¥1,681.4 million

Net Sales (Consolidated) ¥47.9 billion (fiscal year ended March 2017)

Employees (Consolidated) 2,431

Head Office INTAGE Akihabara Building, 3 Kanda-Neribeicho, Chiyoda-ku, Tokyo 101-0022, Japan Tel: +81-3-5294-7411 Fax: +81-3-5294-0199

Corporate Data

Overseas Group Companies

Company Capital or Amount Invested Percentage ofVoting Rights Held*

INTAGE CHINA Inc. 31,978 thousand yuan 99.0 (99.0)

INTAGE (Thailand) Co., Ltd. 105,000 thousand baht 94.3 (91.0)

INTAGE VIETNAM LIMITED LIABILITY COMPANY 3,100 million Vietnamese dong 93.6 (93.6)

INTAGE INDIA Private Limited 325 million Indian rupees 98.8 (1.3)

INTAGE SINGAPORE PTE. LTD. 1.5 million Singaporean dollars 100.0

CONSUMER SEARCH HONG KONG LIMITED 13.8 million H.K. dollars 51.0 (51.0)

PT. INTAGE INDONESIA 5 billion Indonesian rupiah 60.0 (60.0)

Plamed Korea Co., Ltd. 350 million Korean won 51.0 (51.0)

* Numbers in parentheses in percentage of voting rights held indicate the percentage held indirectly.

Domestic Group Companies

CompanyCapital or Amount Invested

(Thousands of yen)Percentage of

Voting Rights Held*

INTAGE Inc. 450,000 100.0

IXT Inc. 100,000 100.0 (100.0)

Access JP Inc. 10,000 100.0 (100.0)

INTAGE RESEARCH Inc. 40,000 100.0 (100.0)

INTAGE CONSULTING Inc. 140,000 100.0

ASKLEP Inc. 150,000 100.0

Kyoto Constella Technologies Co., Ltd. 40,750 65.8 (65.8)

ANTERIO Inc. 145,400 100.0

PLAMED Inc. 90,000 100.0 (100.0)

Japan Medical Information Research Institute Inc. 188,250 100.0

INTAGE TECHNOSPHERE Inc. 400,000 100.0

DataAge Inc. 100,000 80.0 (80.0)

INTAGE ASSOCIATES Inc. 30,000 100.0

INTAGE Group

Corporate Data/INTAGE Group (As of March 31, 2017)


1 2 3 4 5 6 7 8 9 10 11 12 12 1 2 3

900,000

2,000

1,500

2,500

1,000

500

600,000

300,000

0

2014

1 2 3 4 5 6 7 8 9 10 11

2015

121 2 3 4 5 6 7 8 9 10 11

2016 2017

Authorized Shares 74,000,000

Shares Issued 20,118,000

Number of Shareholders 3,807

Distribution Chart

Investment in INTAGE

Number ofShares Held

Shareholding Ratio (%)

Mizuho Trust & Banking Co., Ltd. as trustee forRetirement Benefit Trust of Eisai Co., Ltd. (reentrusted to Trust & Custody Services Bank, Ltd.)

1,800,000 8.9

BBH Fidelity Low-Priced Stock Fund(Principal All Sector Subportfolio) 1,789,000 8.9

INTAGE Group Employees’ StockholdingAssociation 1,065,756 5.3

BNP PARIBAS SEC SERVICES LUXEMBOURGJASDEC ABERDEEN GLOBAL CLIENT ASSETS 949,900 4.7

Goldman Sachs and Company Regular Account 941,681 4.7

Saitama Resona Bank, Ltd. 935,000 4.6

Hoei Jitsugyo Co., Ltd. 910,000 4.5

Mizuho Bank, Ltd. 700,000 3.5

The Dai-ichi Mutual Life Insurance Company 700,000 3.5

Daiei Real Estate & Development 628,000 3.1

Stock Information

Major Shareholders Stock

Note: Shareholding ratio is calculated after deducting treasury stock (5,173 shares).

Securities Firms

1.3%Treasury Stock

0.0%

OtherCorporations

12.4%Foreign Companies,

Others

26.7%

Individuals and Others

24.5%

Total

3,807shareholders

Financial Institutions

35.1%

Stock Price and Trading Volume

(Yen)

(Shares)

Stock price of INTAGE HOLDINGS (left scale)

TOPIX (left scale)

Trading volume (right scale)

Stock Information (As of March 31, 2017)


Further Information: INTAGE HOLDINGS Inc.

INTAGE Akihabara Building, 3 Kanda-Neribeicho, Chiyoda-ku, Tokyo 101-0022, Japan

Tel. +81-3-5294-7411

Fax. +81-3-5294-0199

http://www.intageholdings.co.jp/english/

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