April 1 2015 September 30 2015Ticker code 6675 - PDF document

1 April 1, 2015 September 30, 2
April 1, 2015 September 30, 2015Ticker code: 6675 13th Midterm Business Report 010_0396202832712.indd 2 2015/12/15 15:45:28 To Our Shareholders Japan’s economy during the fiscal midterm under review remained on a modest recovery track as corporate earnings improved owing to the government’s economic policies and quantitative easing. However, in view of changes in the U.S. monetary policy, concerns over the slowing of the Chinese economy, and the impact of changes in foreign currency exchange rates, economic prospects continued to be uncertain. In this economic environment, SAXA Group formulated a mid-term business plan that covers the three years from the 13th Fiscal Term to the 15th Fiscal Term (from April 1, 2015 to March 31, 2018). Based on the plan’s basic policies of “shift to businesses that can grow sustainably” and “transformation into ideal earning structure,” the Company started initiatives to expand the business and strengthen the management structure.With regard to “expansion of business,” in line with the growth strategy, the Group aimed to offer products and realize systems 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 Specifically, for the office market, we launched the SAXA Hikari time, 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. Thus, by offering Internet connection services and the range of SAXA products, we have positioned ourselves as a one-stop solution provider.In order to respond to the needs associated with society’s growing preo

2 ccupation with disaster and crime preven
ccupation with disaster and crime prevention, we intend to vigorously introduce video-related equipment and 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. 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 ¥55.0 billion or more, ordinary income of ¥3.0 billion or more, and ROE of 5% or more) by fiscal Consolidated net sales for the fiscal midterm under review increased 13.8% year on year to ¥22,495 million, mainly due to demand for network security-related equipment increasing earlier than expected due to the enforcement of the Social Security and Tax Number System, and an increase in orders received for systems integration and contracted processing as certain orders originally anticipated for the third quarter or later were booked earlier. Both sales and profit exceeded the initial forecast.In terms of profit, despite an increase in profit in line with an increase in sales and the results of initiatives to lower total costs, the Company recorded an ordinary loss of ¥75 million (ordinary income of ¥205 million for the same period of the previous year) because of the change in the product mix. The Company recorded a net loss attributable to owners of parent of ¥512 million (net income of ¥64 million for the same period of the previous year) owing to the recording of special losses, including business structure improvement

3 expenses for measures for SAXA Group in
expenses for measures for 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.President & C.E.O. 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. 010_0396202832712.indd 1 2015/12/15 15:45:28 Consolidated Financial Highlights 2 (yen) Note: The values shown in the graphs are rounded off. Ordinary income Fiscal TermFiscal Term Fiscal Term Fiscal Term Fiscal Term Fiscal TermFiscal Term Fiscal Term Fiscal Term Fiscal TermTotal assets Fiscal TermFiscal Term Fiscal Term Fiscal Term Net income per share (left)Net assets per share (right) Income attributable to owners of parent -5.15.0-4.0-4.62.7 Fiscal TermFiscal Term Fiscal Term Fiscal Term Fiscal Term Net sales (left) 剡瑩漠潦r摩湡特⁩湣潭攠瑯整⁳慬敳
物杨琩 Fiscal TermFiscal Term Fiscal Term Fiscal Term Fiscal Term Fiscal TermFiscal Term Fiscal Term Fiscal Term 13thFiscal Midterm6.52.55.32.18.61.42.3-5.9-7.0177184390388200431 198437 396.0395.2 437229 4202150101000201002003000 Full year forecast Full year forecast Full year forecast Full year forecast 4.5 2.13.12.85.6-6.5-5.5 386.9 1.42.03.3-1.3 -0.815.0 2.710.5 -0.4 4.9363.5 -8.7 15.0 010_0396202832712.indd 2 2015/12/15 15:45:28 SS3000UTMUnied threat management ActysKey telephone system Electronic medical ZC1000VPN router Ofce safety conferencing Topics 3 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 solu

4 tions and combining it with our network
tions and combining it with our network products, we offer speedy solutions to our customers’ problems.SAXA, Inc. enriched the Actys II IP-ready key telephone system for small offices, completed the development of mobile devices, but it also offers motion sensor-based safety functions and is ready for Earthquake Early Warning. A variety of advanced functions have been consolidated into its compact body.Enriched functionality with the addition of direct connection to the Hikari fiber optic line and Earthquake Early Warning Actys 010_0396202832712.indd 3 2015/12/15 15:45:30 4 Offering Products in response to the Social Security and Tax Number System SAXA, Inc. offers the following products that are capable of security management measures, such as information leakage countermeasures and control of access to information, which companies need to implement in connection with the Social Security and Tax Number System under which the use of Individual Numbers will start in January 2016.A business model whereby service providers that use the wholesale fiber optic access service (Flet’s Hikari) provided by NTT East or NTT West provide As an initiative to expand the systems integration business, SAXA Group has strengthened collaboration with Nextgen, Inc. to offer full IP-PBX systems for large-scale service providers by expanding VoIP solutions. We offer comprehensive full IP-PBX systems that encompass everything from consideration of specifications, design, development, construction to maintenance, all carried out in accordance with the customer’s preferences and requests. The systems cover various services using multiline-ready IP Moreover, in light of recent incidents of unauthorized use of IP telephones, we offer security solutions. To ensure that corporate and other customers can use risks, propose securi

5 ty measures for information assets, and
ty measures for information assets, and offer optimal Providing VoIP solutions for large-scale service providers SAXA, Inc. started sales of the SAXA Hikari fiber optic access service for corporate customers using the Hikari Collaboration Model* offered by Nippon Telegraph and Telephone East Corporation (NTT East) and Nippon Telegraph and Telephone West Corporation (NTT West). Prospective users are small and medium-sized offices to which SAXA has been mainly offering key telephone systems.The SS3000 reduces risks of virus infection, spyware, network intrusion, phishing, cyber-attacks on corporate networks, and other threats on the Internet. It can also prohibit access to social media and create logs of PC operations and use of USB devices. SS3000 The SB2000 allows setting of folder access rights to restrict access to information files to authorized users. It also enables clarification of the system usage status, detection of prohibited software, and usage restriction. SB2000 The ZC1000 enables secure remote access to an office network while away from the office or at home by using remote VPN access software. ZC1000 Voice recognitionIP gatewayVoIP securityCloud/on-premises IP-PBX system クラウド／オンプレミス　IP-PBXシステム 010_0396202832712.indd 4 2015/12/15 15:45:30 Consolidated Financial Statements (Condensed) 5Consolidated Balance Sheets (Millions of yen) 12th Fiscal TermCurrent assetsProperty, plant and equipmentDeferred assetsTotal assetsCurrent liabilitiesTotal liabilitiesShareholders’ equity Retained earnings Treasury stockAccumulated other comprehensive incomeNon-controlling interestsTotal net assetsTotal liabilities and net assets (Millions of yen) Gross profitOrdinary income (loss) Special profitsIncome (loss) before income taxes Tax expense non-controlling int

6 erestsowners of parentConsolidated State
erestsowners of parentConsolidated Statements of Comprehensive Income (Millions of yen) Other comprehensive incomeComprehensive income (loss) (Millions of yen) Cash flows from operating activitiesCash flows from investing activitiesCash flows from financing activitiesEffect of exchange rate changes on cash and cash equivalentsNet increase (decrease) in cash and cash equivalentsNote: The values shown on page 5 are rounded down to the nearest indicated unit. 010_0396202832712.indd 5 2015/12/15 15:45:31 Group Companies 6 SAXA Holdings, Inc.&#xHold;&#xing ;omp; ny0; SAXA BusinessSystem, Inc.&#xSale;&#xs, w;&#xork ; nd ;&#xmain;&#xtena;&#xnce ;service company SAXA Precision, Inc. e business SAXA Techno, Inc. SAXA SystemAmazing, Inc.&#xSyst;m d;vel;&#xopme;&#xnt00;company SAXA SystemEngineering, Inc.&#xSyst;m d;vel;&#xopme;&#xnt00;company Meister Corporation&#xSyst;m d;vel;&#xopme;&#xnt00;company Coretac, Inc. SAXA Proassist, Inc.in the Gr�oup Electronic Co., Ltd. System K Corporation&#xSyst;m d;vel;&#xopme;&#xnt00;company Notes: 1. Fuse, and Kimio Oguchi are outside directors. In addition, the Group has filed the required notification to the Tokyo Stock Exchange of the appointment of Kimio Oguchi as an independent officer as prescribed by the Exchange. 2. Takashi Kouno and Kenji Iimori are outside auditors. In addition, the Group has filed the required notification to the Tokyo Stock Exchange of the appointment of Takashi Kouno and Kenji Iimori as independent officers as prescribed by the Exchange. (12 group companies)  Head OfceNBF Platinum Tower, 17-3, Shirokane 1-chome, Minato-ku, TokyoManagement consultation for its subsidiaries that engage in the development, manufacture and Directors and Auditors President & C.E.O.Vice President & Repre-s

7 entative DirectorSenior Managing Directo
entative DirectorSenior Managing DirectorYuzuru SuzukiManaging DirectorTadashi Minagawa DirectorHiroshi Kimura DirectorMitsugu OsakaDirectorFumihisa IsonoDirectorDirectorMasashi FuseDirectorKimio Oguchi Standing AuditorMasaki OhuchiTakashi Kouno 010_0396202832712.indd 6 2015/12/15 15:45:31 Stock Information (as of September 30, 2015) April 1, 2015 September 30, 2015Ticker code: 6675 13th Midterm Business Report Shares Total number of shares authorized to be issued Total number of shares issued Number of shareholders Major Shareholders Distribution of Shareholders by Category Individuals, etc.43.5% Domestic corporations (excluding nancial 13.9%Financial institutions32.4%Foreign-afliated corporations and foreigners5.7% Securities companies4.5% Note: The values shown in “Distribution of Shareholders by Category” are rounded off. Shareholder nameNumber of shares Shareholding CBNY DFA INTL SMALL CAP VALUE PORTFOLIOBank of Tokyo-Mitsubishi UFJ, Ltd.Mizuho Trust & Banking Co., Ltd.SAXA Group Employee Stock OwnershipMitsui Sumitomo Insurance Company, LimitedThe Master Trust Bank of Japan, Ltd. (trust account) Although the Company holds 3,697 thousand shares of treasury stock, it is not included Shareholding ratio is calculated by deducting the number of shares of trfrom the total number of shares issued. The number of shares held by Oki Electric Industry Co., Ltd., includes the Company’s 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

8 shares held by Mizuho Bank, Ltd., inclu
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.Shareholder Information Fiscal YearApril 1 to March 31Record Date for March 31Ordinary General Shareholders’ MeetingRecord DateMarch 31If necessary, another day may be designated as the record date by public http://www.saxa.co.jp, in the event that accidents or other unavoidable reasons prevent use of the method of electronic announcement, the Company will make If you have a brokerage account at If you do not have a brokerage Mailing AddressYour securities company.Stock Transfer Agency DepartmentMizuho Trust & Banking Co., Ltd.TokyoTelephone Referral0120-288-324 (Toll-free call)Agencies for procedures dress, change of method for receiving dividends, Head ofce and all branches Mizuho Trust & Banking Co., Ltd.: Head ofce and all branches nationwideMizuho Bank Co., Ltd.: Head ofce and all branches nationwideaddress, telephone referral or agencies for procedures that are for the purpose of purchasing fractional shares, you need rst to implement the transfer of shares by opening a brokerage account 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 advance by Mizuho Trust & Banking 010_0396202832712.indd 1 2015/12/15 15