April 1 2012 September 30 2012Ticker code 667510th Midte - PDF document

1 April 1, 2012 September 30, 2
April 1, 2012 September 30, 2012Ticker code: 667510th Midterm Business Report 010_0396202832412.indd 2 2013/03/04 17:31:07 To Our Shareholders The business performance of SAXA Group is outlined in the 10th Midterm Business Report (from April 1, 2012 to September 30, 2012) presented herein.Japan’s economy during the fiscal midterm under review showed a modest recovery supported by demand associated with reconstruction in the aftermath of the Great East Japan Earthquake. However, there is uncertainty regarding the future prospects for Japan’s economy, in view of the persisting European sovereign debt crisis and the slowing tempo of emerging economies, as well as concerns regarding the trends of SAXA Group remains committed to the medium-term management strategies of “strengthening our management structure” and “expanding business fields.” With regard to “expanding business fields,” the Group has continued to develop products which combined our core competencies of networking technology, visual technology, and security technology. We also sought to provide customer-oriented solutions, offering our customers peace of mind, safety, comfort, Products and services SAXA Group launched in the office market The NV1000 network video recorder which responds to diverse monitoring needs and a cloud-based IP camera monitoring system that records video on the center server A cloud-based business telephony service through that allows sharing of data on client PCs without the need to assign a system administrator and prevents data loss through data backup. This product is attuned to the increasing focus on compliance, information sharing, and business continuity Began service and sale of the TS-NT 1003 transmitter for mechanical security systems that is IP camera-ready and equipped with a function to send email

2 with attachments of We introduced the f
with attachments of We introduced the following products and services in the passengers on buses using stereoscopic image recognition Field testing of applications of safety monitoring systems for roads etc.We also launched two models of wireless LAN sensors for monitoring safety and security of companies and homes, which helps facilitate secure and relaxed lifestyles: the WL110 equipped with motion, temperature and humidity, illuminance, and acceleration sensors to meet diverse sensing needs and capable visualization of power consumption in response to the need for energy saving.With regard to “strengthening our management structure,” we made revisions to SAXA Group’s organizational functions in order to shift to a more stable revenue structure. We also continued efforts to increase operational efficiency, lower total costs and spend more efficiently.Consolidated net sales for the fiscal midterm under review increased 4.1% year over year to ¥18,387 million. Ordinary income increased 60.7% year over year to ¥230 million as a result of higher net sales and reduced cost of sales, and net income soared 89.6% to ¥121 million.SAXA Group intends to strive even harder to meet the expectations of its shareholders, and we greatly appreciate your President & CEO 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_0396202832412.indd 1 2013/03/04 17:31:07 Consolidated Financial Highlights 2 (yen) Note: The values shown in the graphs are rounded off. Ordinary income Fiscal TermFiscal Term Fiscal Term Fiscal Term 10thFiscal Midterm Operating income (100 millions of yen) Fiscal TermFiscal Term Fiscal Term Fiscal Term

3 Total assets Net assets Fiscal
Total assets Net assets Fiscal TermFiscal Term Fiscal Term Fiscal Term Net income per share (left) Net assets per share (right) (100 millions of yen) Net income 1.42.90.61.25.02.7 -3.9-13.6 Fiscal TermFiscal Term Fiscal Term Fiscal Term 10thFiscal Midterm Net sales (left) Ratio of ordinary income to net sales (right) (100 millions of yen)(%)218 Fiscal TermFiscal Term Fiscal Term Fiscal Term 10thFiscal Midterm439386-0.5(yen) Fiscal TermFiscal Term Fiscal Term Fiscal Term 226228 Full year forecastFull year forecastFull year forecast Full year forecast 0100210 4.5 6.05.811.42.13.12.811.0 1.3 010_0396202832412.indd 2 2013/03/04 17:31:07 Topics SAXA Holdings, Inc. disposed of shares of treasury stock through third-party allocation of shares to Oki Electric Industry Co., Ltd. (Oki). SAXA, Inc. (SAXA) and formed a business a view to introducing new products in the field of IP telephony At the same time, the two companies explored opportunities 2012, signed an agreement to form such a business alliance.In August 2012, SAXA, Inc. introduced a file server for small In terms of its scope, the business alliance includes complementary products and services in the field of IP mutual utilization of sales channels and technologies. Taking in the possibility of collaboration in other fields, we aim to enhance the corporate value of SAXA Group.In view of the above, having recognized the need to strengthen the capital relationship with Oki in order to promote smooth progress of the business alliance, SAXA Holdings allocated shares of treasury stock to Oki on July 27, 2012. secure data administration. The SB1000 allows easy sharing of data assets managed on individual PCs and prevents data loss in the event of PC breakdown by thorough data backup. Equipped with self-diagnostics & notification functions that dispense with the specialist knowledge, the

4 SB1000 periodically performs self-diagn
SB1000 periodically performs self-diagnosis to detect events that may lead to trouble and prevent occurrence of failure, thus minimizing the risk of interruption of system operation. Moreover, the five-year warranty with same-day on-site service is offered for enhanced assurance. In addition to the hardware, an optional cloud backup service is scheduled for introduction.The launch of this next-generation file server attuned to the needs of small and medium-size businesses helps position SAXA as a one-stop solution provider. Alliance with Oki and Disposition of Treasury Stock by Third-party Allocation of SharesSB1000 next-generation server equipped with self-diagnostics for easy installation and secure * For remote access, a user needs to create a Windows Live account.* Tablets and smartphones can be used for browsing by remote access. A separate application is required. * Windows is a registered trademark of Microsoft Corporation in the United States and other countries.* Mac OS is a registered trademark of Apple, Inc. in the United States and other countries. Self-diagnostics & notication functions Remote access PC backup/le sharing File server System Architecture HomeGuest (partner companies)SB1000SS1000 SAXASupport Center Easy access from a home PC to the company’s PC server to the support center Client PC Strengthened redundancy backup Access rights setting for individual users Automatic data backup of client PCs Internet UPS HDD(RAID1) 010_0396202832412.indd 3 2013/03/04 17:31:07 for mechanical Security Alarm System for medium-size and large businesses in September 2012 as the latest addition to The NexBe Security System is a series of Security Alarm System, suitable for wide-ranging applications extending from multi-tenant buildings to offices, factories, and shopping malls the control center.Although the TS-NT1003 is

5 the latest addition to the NexBe Securit
the latest addition to the NexBe Security System, it can also replace the existing VS and RTS models. Moreover, the new product is compatible with 2-channel serial communication sensors to enhance convenience of installation. It is also IP camera-ready and has of intrusion. Color universal design is adopted for easy-to-view, easy-to-use Web registration screen.In the security market, SAXA intends to strengthen video analysis, and enrich the line-up by adding wireless sensors and new card readers to increase sales of security systems. TS-NT1003 transmitter for Security Alarm System for Medium-size and Large Businesses Modem / PB / DchVoice TS-SC01H/01Caccess controllerTS-DU16displayTS-IO1003input/outputexpansion rackIP camera TS-NT1003 transmitteremailIPModem / PBNexBecenter systemSB-100 / SB-200 serialcommunication sensorTS-SC64/64Caccess controllerTS-IP0401Vimage IP transmitter IP Network INS Net 64 /analogtelephonelines System Architecture 010_0396202832412.indd 4 2013/03/04 17:31:09 Consolidated Financial Statements (Condensed) 5Consolidated Balance Sheets (Millions of yen) Account item9th Fiscal TermCurrent assetsProperty, plant and equipmentDeferred assetsTotal assetsCurrent liabilitiesTotal liabilitiesShareholders’ equity Retained earnings Treasury stockAccumulated other comprehensive incomeMinority interestsTotal net assetsTotal liabilities and net assets (Millions of yen) Gross profitOrdinary income Special profitsIncome before income taxes Tax expenseIncome before minority interestsMinority interest in income (loss)Consolidated Statements of Comprehensive Income (Millions of yen) Income before minority interestsOther comprehensive income (loss)Comprehensive income (loss) (Millions of yen) Cash flows from operating activitiesCash flows from investing activitiesCash flows from financing activitiesEffect of exchange

6 rate changes on cash and cash equivalent
rate changes on cash and cash equivalentsNet increase (decrease) in cash and cash equivalents* Figures on page 5 are rounded down to the nearest million yen. 010_0396202832412.indd 5 2013/03/04 17:31:09 Group Companies 6 e business SAXA Technical Meister Corporation&#xSyst;m d;vel;&#xopme;&#xnt00;company SAXA Precision, Inc. SAXA Techno, Inc.SAXA Proassist, Inc.in the Gr�oup Coretac, Inc. Electronic Co., Ltd. Number of Employees1,357 (Consolidated)Head OfceNBF Platinum Tower, 17-3, Shirokane 1-chome, Minato-ku, TokyoManagement consultation for its subsidiaries that engage in the development, manufacture Number of Employees602Development, manufacture and sales of information communication system equipment and Directors and AuditorsDirectors and AuditorsExecutive Officers President & C.E.O.Vice President & Representative DirectorManaging DirectorYuzuru SuzukiManaging DirectorMutsuo Takematsu DirectorDirectorHiroshi KimuraDirectorTadashi Minagawa DirectorDirectorToshiya HatakeyamaDirectorToshiharu ShimadaTakashi Kouno 1. Toshiya Hatakeyama and Keizo Ikeda are outside directors. 2. Takashi Kouno and Masahiko Inohana are outside auditors. In addition, the Group has filed the required notification to the Tokyo Stock Exchange of the appointment of Takashi Kouno and Masahiko Inohana as independent officers as prescribed by the Exchange. President and C.E.O.Vice President and Representative DirectorDirectorYuzuru SuzukiDirectorMutsuo TakematsuDirectorDirectorHiroshi Kimura DirectorTadashi MinagawaDirectorDirectorTomoyuki ShimadaToshiharu ShimadaTakashi Kouno President & C.E.O.Vice President & Executive OfcerSenior Executive OfcerYuzuru SuzukiSenior Executive OfcerMutsuo TakematsuSenior Executive OfcerSenior Executive OfcerHiroshi KimuraSenior Executive OfcerTadashi MinagawaSenior Executive OfcerSe

7 nior Executive OfcerTomoyuki Shimad
nior Executive OfcerTomoyuki ShimadaSenior Executive Ofcer Executive OfcerExecutive OfcerYoichi InoueExecutive OfcerExecutive OfcerToshikatsu KazamaExecutive OfcerExecutive OfcerHirotaka YajimaExecutive OfcerSatoshi WadaExecutive OfcerNote: Takashi Kouno is an outside auditor. (13 group companies) 010_0396202832412.indd 6 2013/03/04 17:31:10 Stock Information (as of September 30, 2012) April 1, 2012 September 30, 2012Ticker code: 667510th Midterm Business Report Shares Total number of shares authorized to be issued otal number of shares issued Number of shareholders Distribution of Shareholders by Category Individuals, etc.43.36%Domestic corporations (excluding nancial 13.06%Financial institutions Foreign-afliated corporations and foreignersSecurities companies2.38% Major Shareholders Notes:1. Although the Company holds 3,645 thousand shares of tramong the Major Shareholders listed above. Shareholding ratio is calculated by deducting the number of shares of treasury stock from the total number of shares issued. The number of shares held by Oki Electric Industry Co., Ltd., includes the Company’6,059 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 (Mizu

8 ho Bank Account) for the Re-trust by the
ho Bank Account) for the Re-trust by the Trustee of Trust & Custody Services Bank, Ltd.” on the register of shareholders.) The values in the above table for the number of shares held and the sharare rounded down to the units indicated. Shareholder nameNumber of shares Shareholding Japan Trustee Services Bank, Ltd. (trust account)CBNY DFA INTL SMALL CAP VALUE PORTFOLIOBank of Tokyo-Mitsubishi UFJ, Ltd.The Master Trust Bank of Japan, Ltd. (trust account)SAXA Group Employee Stock OwnershipMizuho Trust & Banking Co., Ltd.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.jpNote: The Company makes public announcement by electronic means. However, in the event that trouble 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.Mizuho Trust & Banking Co., Ltd.TokyoTelephone Referral0120-288-324 (Toll-free call)Agencies for procedures such as change of address, receiving dividends, etc.Head ofce and branches nationwide Mizuho Trust & Banking Co., Ltd.: 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 purpose of purchasing fractional shares, you need rst to implement the transfer of shares by opening a brokerage account at a securities If you would like to make a request for additional purchase of fractional shares via Mizuho Investors make a remittance to the account Trust & Banking Co., Ltd. 010_0396202832412.indd 1 2013/03/04 1