13th Fiscal Business Report

Transcription

1 Fiscal Business Report April 1, 215 March 31, 216 Ticker code: 6675

2 NOTICE OF RESOLUTIONS OF THE ORDINARY GENERAL SHAREHOLDERS MEETING This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or for direct, indirect or any other forms of damages arising from the translation. To All Shareholders June 29, 216 Naoki Matsuo President & C.E.O. NBF Platinum Tower, 17-3, Shirokane 1-chome, Minato-ku, Tokyo NOTICE OF RESOLUTIONS OF THE ORDINARY GENERAL SHAREHOLDERS MEETING We are pleased to announce that the matters outlined below were reported and resolved at the Ordinary General Shareholders Meeting of the Company held today. Matters reported: Matters resolved: Proposal No. 1: 1. Business Report, Consolidated Financial Statements for the (from April 1, 215 to March 31, 216) and results of audits by the Accounting Auditor and the Board of Auditors of the Consolidated Financial Statements 2. Non-Consolidated Financial Statements for the (from April 1, 215 to March 31, 216) The particulars of the above 1 and 2 were reported. Distribution from Surplus The proposal was approved and adopted as proposed. (The year-end dividend is 3 per share.) Introduction (Renewal) of Countermeasures against Large-scale Purchases of the Company s Shares (Takeover Defense Measures) The proposal was approved and adopted as proposed. Election of Seven Directors The proposal was approved and adopted as proposed. Naoki Matsuo, Hiroshi Kimura, Mitsugu Osaka, and Fumihisa Isono were re-elected as Directors and assumed office, and Koji Nakamura, Yoichi Inoue, and Hideo Yamamoto were newly elected as Directors and assumed office. Hideo Yamamoto is an Outside Director. Proposal No. 4: Proposal No. 5: Proposal No. 6: Election of Two Auditors The proposal was approved and adopted as proposed. Susumu Eto and Takenari Shimizu were elected as Auditors and assumed office. Takenari Shimizu is an Outside Auditor. Election of Two Substitute Auditors The proposal was approved and adopted as proposed. Yoshitake Kamino and Hayato Yamazaki were elected as Substitute Auditors. Yoshitake Kamino and Hayato Yamazaki are Substitute Auditors for Outside Auditor Kenji Iimori and for Outside Auditor Takenari Shimizu, respectively. Payment of Bonuses to Directors and Auditors The proposal was approved and adopted as proposed. Proposal No. 2: Proposal No. 3: 1

3 To Our Shareholders With regard to expansion of business, in line with the Company s growth strategy, we aimed to offer products and realize systems and services attuned to customer needs in the market. For that purpose, we concentrated on developing telecommunications network-related systems, which embody the Group s core competencies of voice and data communication technologies, and combining new technologies such as sensing and video storage. Specifically, for the office market, we expanded the Office AGENT series with the release of Actys III, a business communication system with enhanced IP-ready key telephone systems for small offices. At the same time, we worked to expand sales of the SS3 unified threat management (UTM) appliance in order to respond to growing demand in line with the rising interest in network security. Naoki Matsuo President & C.E.O. I am Naoki Matsuo, and I have been appointed President & C. E.O. of SAXA Holdings. I ask for your support as I strive even harder toward the development of the SAXA Group. Japan s economy during the fiscal term under review was on a modest recovery track supported by the government s economic policies and quantitative easing. As for the economy overseas, though the U.S. economy is recovering, there are concerns about the slowing tempo of China s economy, as well as of other emerging economies. And in view of the risk of fluctuations in financial markets in Japan, economic prospects continued to be uncertain. In this economic environment, SAXA Group formulated a midterm business plan, covering the three years from the Fiscal Term to the 15th (from April 1, 215 to March 31, 218). Based on the plan s basic policies of shift to businesses that can grow sustainably and transformation into ideal earning structure, the Company implemented initiatives to expand the business and strengthen the management structure. Furthermore, by offering the SAXA Hikari fiber optic access service for corporate customers, we have positioned ourselves as a one-stop solution provider for Internet connection services and SAXA products. Going forward, we intend to enrich the Office AGENT series in response to the Internet of Things (IoT), cloud services, and video solutions. In the systems integration business, in addition to marketing of Voice over IP (VoIP) solutions, we launched initiatives to respond to cloud computing and the emergence increasingly sophisticated services associated with the advent of the IoT era. Specifically, utilizing the scheme of the systems integration business, which is a mainstay of the SAXA Group, we focused on the timely offering of business applications attuned to customer needs, such as systems for transportation service operators and data interchange solutions. Additionally, in response to growing demand for network cameras associated with society s increasing concerns with security issues, namely terrorism, crime, and disasters, we are offering services to support a safe and secure society, such as longduration video recording made possible by image analysis and image compression technology, and cloud-based services among many others. Cautionary Statement This business report has been prepared for the sole purpose of facilitating understanding of the Company s financial position and operations, and is not intended to solicit investments. Investors are advised to exercise their own judgment when making investment decisions. 2

4 To Our Shareholders With regard to strengthening our management structure, we pursued initiatives to establish a stable earnings structure by implementing organizational and personnel optimization combined with thorough reduction of external outflow expenses. To reinforce corporate governance and enhance efficiency of organizational functions, we streamlined Group functions in April and optimized personnel at the end of July. And these measures produced results as intended. By continuing to reinforce the financial standing and transform human resources qualitatively, we will do our utmost to achieve the performance indicator targets (net sales of 55. billion or more, ordinary income of 3. billion or more, and ROE of 5% or more) by the 15th (term ending March 31, 218). Despite a decrease in contracted processing, consolidated net sales rose 6.2% year on year to 46,379 million mainly due to an increase in orders received for network security-related equipment due to the enforcement of the Social Security and Tax Number System, and an increase in orders received for contracted development of systems. In terms of profit, thanks to the increase in net sales and the results of initiatives to lower total costs, ordinary income amounted to 1,678 million, an increase of 94.6% year on year, despite the impact of fluctuations in currency exchange rates. Furthermore, while a gain on the contribution of securities to the retirement benefit trust was recorded as special profit, we recorded special losses due to business structure reform expenses including measures for personnel optimization. As a result, net income attributable to owners of the parent amounted to 52 million, an increase of 81.3% year on year. SAXA Group intends to redouble its efforts to meet the expectations of shareholders. In all our endeavors, we will greatly appreciate your continuing support and cooperation. 3

5 Progress Report on Mid-term Business Plan The SAXA Group completed the first year of the mid-term business plan that covers the three years from the to the 15th (from April 1, 215 to March 31, 218), which was announced in May 215. The plan's basic policies continue to be shift to businesses that can grow sustainably and transformation into ideal earning structure. And based on these basic policies, we will continue our efforts to achieve the plan's targets, namely, consolidated net sales of 55. billion or more, consolidated ordinary income of 3. billion or more, and ROE of 5% or more by the 15th. Positioning of each year covered by the mid-term business plan (Targets) Consolidated net sales: 55. billion or more Consolidated ordinary income: 3. billion or more ROE: achieve 5% or more early 15th Basic policies of the mid-term business plan Shift to businesses that can grow sustainably Transformation into ideal earning structure Achieve targets of the mid-term business plan 14th (Forecast) Consolidated net sales: 47.5 billion Consolidated ordinary income: 2.1 billion ROE: 4.2% (Results) Consolidated net sales: 46.4 billion Consolidated ordinary income: 1.7 billion ROE: 2.3% Return to the growth track Development of the profitable management base for business growth 4

6 Topics SS3 Unified threat management (UTM) appliance The SS3 reduces risks of virus infection, spyware, network intrusion, phishing, cyber-attacks on corporate networks, and other threats on the Internet. In addition, this product can also block access to social media and obtain Internet browsing histories. The SS3 has been popular ever since its launch in November 214, reflecting customers growing awareness of security and also due to the enforcement of the Social Security and Tax Number System. Camera Cloud computing PC Key telephone system UPS Actys Multi-function printer Unified threat management (UTM) appliance SS3 IP-PBX SP1 integrated with UTM HUB Audio conferencing Call center File server Nurse call SB2 Fax AP HUB Cloud VPN router Electronic medical card service ZC1 Fee 5 Sensor Electric lock Camera Office safety transmitter BS7 The Office AGENT series of agent systems meet the needs of small and medium-size offices without information systems departments. Integrating SAXA s expertise in office solutions and combining it with our network products, we offer speedy solutions to our customers problems.

7 Cloud-based All-in-one 36-degree Service for Integrated Management of PC Assets Integrated information security management in a cloud computing environment reduces management burden of information systems department In May 216, SAXA, Inc. launched Managed Client Security (MCS) Global Cloud solutions which realize the integrated management of the extensive PC assets of companies through cloud technology. MCS Global Cloud enables not only management of hardware such as equipment and facilities, but also management of information security including that of PC software and connections, thus covering information leakage via , via the Web and networks, and via external storage media. 36-degree security countermeasures il or ga l Bluetooth te Printer wa y USB ic e c SD card SCSI Phy IEEE 1394 Device control module ity D ev (Web control) l tr o n tr o Operation control module Bulletin board on co t (Device control) ur Ma tw Information leakage via network rk WiFi k co rol wo Ne (Management of file and printer logs) N et LAN Messenger Information assets Basic module (Management of PC assets) Log management module nt Web rol ga Information leakage via the Web ec Ma i co Browser (Web mail) Browser Mailer b nt (Control of software usage, Control of Web access) We y ay Operation control module at a ew ew lg Information leakage via a sic ls Information leakage via external storage media Utilization support module (Management and distribution of various software/remote support functions) 6

8 Consolidated Financial Highlights Net sales Operating income Ordinary income (1 millions of yen) (1 millions of yen) (1 millions of yen) (5.5) (5.9) 9th 1th 11th 12th 9th 1th 11th 12th 9th 1th 11th 12th Net income attributable to owners of parent ROE Total assets Net assets Earnings per share (left) Net assets per share (right) (1 millions of yen) (%) 6 6 (1 millions of yen) 5 (yen) 1 (yen) % % 1.6% 1.3% (4.6) 9th 1th (2.%) 11th 12th 9th 1th 11th 12th 9th 1th (7.8) 11th 12th 7 Note: The values shown in the graphs are rounded off.

9 Consolidated Financial Statements (Condensed) Consolidated Balance Sheets (Millions of yen) Account item 12th Assets Current assets 23,738 25,231 Fixed assets 19,944 17,355 Property, plant and equipment 9,998 9,688 Intangible fixed assets 4,2 3,35 Investments and other assets 5,926 4,631 Deferred assets 18 1 Total assets 43,71 42,597 Liabilities Current liabilities 12,68 11,98 Long-term liabilities 8,212 8,457 Total liabilities 2,82 2,365 Net assets Shareholders equity 21,498 21,75 Common stock 1,836 1,836 Capital surplus 6,23 6,23 Retained earnings 5,812 6,23 Treasury stock (1,173) (1,177) Accumulated other comprehensive income 1, Non-controlling interests Total net assets 22,88 22,232 Total liabilities and net assets 43,71 42,597 Consolidated Statements of Income (Millions of yen) Account item 12th Net sales 43,677 46,379 Cost of goods sold 33,955 36,363 Gross profit 9,722 1,15 Selling, general and administrative expenses 8,677 8,413 Operating income 1,45 1,62 Nonoperating income Nonoperating expenses Ordinary income 862 1,678 Special profits 5 43 Special losses Income before income taxes 829 1,114 Tax expense Net income Net income (loss) attributable to non-controlling interests (3) 2 Net income attributable to owners of parent Consolidated Statements of Cash Flows (Millions of yen) Account item 12th Cash flows from operating activities 2,922 2,411 Cash flows from investing activities (2,577) (1,687) Cash flows from financing activities (262) 26 Effect of exchange rate changes on cash and cash equivalents (1) 5 Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the term 6,188 6,27 Cash and cash equivalents at the end of the term 6,27 7,25 Consolidated Statements of Comprehensive Income (Millions of yen) Account item 12th Net income Other comprehensive income (loss) 775 (862) Comprehensive income (loss) 1,59 (321) * Figures in consolidated financial statements are rounded down to the nearest indicated unit. 8

10 Group Companies and Company Profile (12 group companies) (as of April 1, 216) SAXA Holdings, Inc. <Holding SAXA, Inc. <Core business SAXA Precision, Inc. <Manufacturing and sales SAXA Business System, Inc. <Sales, work and maintenance service SAXA Techno, Inc. <Manufacturing SAXA System Engineering, Inc. <System development SAXA System Amazing, Inc. <System development System K Corporation <System development Meister Corporation <System development SAXA Proassist, Inc. <Service company in the Group> Donggun Kobishi Electronic Co., Ltd. <Manufacturing Coretac, Inc. <Manufacturing (as of March 31, 216) Established February 2, 24 Capital Stock 1,836,678,4 Number of Employees 1,111 (Consolidated) 31 (Nonconsolidated) Head Office Business NBF Platinum Tower, 17-3, Shirokane 1-chome,Minato-ku, Tokyo Management consultation for its subsidiaries that engage in the development, manufacture and sales of information communication system equipment and components Directors and Auditors (as of June 26, 216) President & C.E.O. Naoki Matsuo Senior Managing Director Yuzuru Suzuki Managing Director Fumihisa Isono (promoted) Director Hiroshi Kimura Director Mitsugu Osaka Director Koji Nakamura (newly elected) Director Yoichi Inoue (newly elected) Director Director Masashi Fuse Kimio Oguchi Director Hideo Yamamoto (newly elected) Standing Auditor Susumu Eto (newly elected) Auditor Katsuhiko Hatori Auditor Kenji Iimori Auditor Takenari Shimizu (newly elected) 9 Notes:1. Masashi Fuse, Kimio Oguchi, and Hideo Yamamoto are outside directors. In addition, the Group has filed the required notification to the Tokyo Stock Exchange of the appointment of Kimio Oguchi and Hideo Yamamoto as independent officers as prescribed by the Exchange. 2. Kenji Iimori and Takenari Shimizu are outside auditors. In addition, the Group has filed the required notification to the Tokyo Stock Exchange of the appointment of Kenji Iimori and Takenari Shimizu as independent officers as prescribed by the Exchange.

11 Stock Information (as of March 31, 216) Shares Total number of shares authorized to be issued... 24,, Total number of shares issued... 62,449,621 Number of shareholders... 7,265 Major Shareholders Shareholder name Number of shares held (thousand) Shareholding ratio (%) Oki Electric Industry Co., Ltd. 8, NEC Corporation 2,36 4. Mizuho Bank, Ltd. 2, Sumitomo Mitsui Banking Corporation 1, CBNY DFA INTL SMALL CAP VALUE PORTFOLIO 1, The Master Trust Bank of Japan, Ltd. (trust account) Bank of Tokyo-Mitsubishi UFJ, Ltd Mizuho Trust & Banking Co., Ltd SAXA Group Employee Stock Ownership Mitsui Sumitomo Insurance Company, Limited Notes: 1. Although the Company holds 3,712 thousand shares of treasury stock, it is not included among the Major Shareholders listed above. 2. Shareholding ratio is calculated by deducting the number of shares of treasury stock from the total number of shares issued. 3. The number of shares held by Oki Electric Industry Co., Ltd., includes the Company s 6,59 thousand shares, which are contributed by Oki Electric Industry Co., Ltd., as the trust estate of the retirement benefit trust. (They are recorded in the name of Mizuho Trust & Banking Co., Ltd., Retirement Benefit Trust (Oki Electric Industry Account) for the Re-trust by the Trustee of Trust & Custody Services Bank, Ltd. on the register of shareholders.) 4. The number of shares held by Mizuho Bank, Ltd., includes the Company s 1,778 thousand shares, which are contributed by Mizuho Bank, Ltd., as the trust estate of the retirement benefit trust. (They are recorded in the name of Mizuho Trust & Banking Co., Ltd., Retirement Benefit Trust (Mizuho Bank Account) for the Re-trust by the Trustee of Trust & Custody Services Bank, Ltd. on the register of shareholders.) 5. The values shown in Number of shares held are rounded down to the nearest indicated unit, and the values shown in Shareholding ratio are rounded off. Distribution of Shareholders by Category Foreign-affiliated corporations and foreigners 6.1% Domestic corporations (excluding financial institutions and securities companies) 13.8% Securities companies 3.% Individuals, etc. 44.1% Financial institutions 33.% Note: The values shown in Distribution of Shareholders by Category are rounded off. 1

12 Shareholder Information Fiscal Year April 1 to March 31 Record Date for Payment of Dividends Ordinary General Shareholders Meeting Record Date URL for Public Announcements Mailing Address Telephone Referral Agencies for procedures such as change of address, change of method for receiving dividends, etc. Payment of dividends payable Notes March 31 June March 31 If necessary, another day may be designated as the record date by public announcement. Note: The Company makes public announcement by electronic means. However, in the event that accidents or other unavoidable reasons prevent use of the method of electronic announcement, the Company will make announcements in the Nihon Keizai Shimbun (daily newspaper). If you have a brokerage account at your securities company Your securities company. If you do not have a brokerage account but a special account at a securities company or other financial institution Stock Transfer Agency Department Mizuho Trust & Banking Co., Ltd. 8-4, Izumi 2-chome, Suginami-ku, Tokyo (Toll-free call) (9: 17: on weekdays) Mizuho Securities Co., Ltd.: Head office and branches nationwide and Planet Booths (in the Mizuho Bank, Ltd.) Mizuho Trust & Banking Co., Ltd.: Head office and all branches nationwide Mizuho Trust & Banking Co., Ltd.: Head office and all branches nationwide Mizuho Bank Co., Ltd.: Head office and all branches nationwide For the issuance of payment statements, please use the mailing address, telephone referral or agencies for procedures that are listed in the right-hand column for special accounts. As special accounts cannot be used for trading securities except for the purpose of purchasing fractional shares, you need first to implement the transfer of shares by opening a brokerage account at a securities company or other financial institution of your choice. If you would like to make a request for additional purchase of fractional shares via Mizuho Securities Co., Ltd., you need to make a remittance to the account designated in advance by Mizuho Trust & Banking Co., Ltd.