April 1 2014 September 30 201412th Midterm Business Repor - PDF document

1 April 1, 2014 September 30, 2
April 1, 2014 September 30, 201412th Midterm Business ReportTicker code: 6675 010_0396202832612.indd 2 2014/12/10 10:44:03 To Our Shareholders Japan’s economy during the fiscal midterm under review was on a modest recovery track supported by the government’s economic policies and quantitative easing. However, the future prospects for the Japanese economy remained unclear in view of the impact of the consumption tax increase and sharply rising materials costs reflecting In this economic environment, SAXA Group continued its initiatives of “expanding business fields” and “strengthening our management structure,” while promoting implementation of management improvement measures to establish an earnings structure responsive to the evolving business environment and the changing business structure.With regard to “expanding business fields,” in line with the business growth strategy, the Group aimed to offer systems and services meeting customer needs by concentrating on developing telecommunications network-related systems, which embody the Group’s core competencies of voice and data communication technologies, and promoting the system integration business combining these products with application services.For the office market, we launched the “ZC1000,” a cloud-based virtual private network (VPN) router that is an addition to the Office AGENT series, which includes key telephony systems, application servers, and unified threat management (UTM) appliances. The ZC1000 reduces effort and costs required for construction and operation of a private Through the further reinforcement of network security measures, we will strive to enrich our product mix so that our customers can enjoy the benefits of a safe, secure, comfortable, and convenient office environment.For the social infrastruc

2 ture market, we enriched environmental v
ture market, we enriched environmental visualization solutions and visualization solutions for local government in an effort to offer services attuned to customer needs.With regard to “strengthening our management structure,” we pursued initiatives to establish a stable earnings structure by implementing organizational and personnel streamlining combined with thorough reduction of external outflow expenses, which led to improved earnings.We will continue to promote management improvement measures to secure a stable earnings structure.Consolidated net sales for the fiscal midterm under review decreased 1.0% year on year to ¥19,764 million, mainly due to a decrease in orders received for contracted processing despite an increase in orders received for key telephony systems.In terms of profit, as a result of efforts to lower total costs, including the promotion of management improvement measures, ordinary income amounted to ¥205 million (ordinary loss of ¥694 million for the same period of the previous year) and net income amounted to ¥64 million (net loss of ¥396 million for the same period of the previous year).SAXA Group intends to redouble its efforts to meet the expectations of shareholders. In all our endeavors, we will 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_0396202832612.indd 1 2014/12/10 10:44:03 Consolidated Financial Highlights 2 (yen) Note: The values shown in the graphs are rounded off. Fiscal TermFiscal Term Fiscal Term Fiscal Term Fiscal Term Fiscal TermFiscal Term Fiscal Term Fiscal Term Fiscal Term Fiscal TermFiscal Term Fiscal Term F

3 iscal Term 12thFiscal Midterm(100 millio
iscal Term 12thFiscal Midterm(100 millions of yen)2.90.61.23.80.62.5-4.0-4.62.7 Fiscal TermFiscal Term Fiscal Term Fiscal Term Fiscal Term Fiscal TermFiscal Term Fiscal Term Fiscal Term Fiscal Term Fiscal TermFiscal Term Fiscal Term Fiscal Term 12thFiscal Midterm-1.46.510.32.55.32.17.04.11.42.3-5.9-7.0218429177184390388200431 396.0395.2 428222010100020100200300005100120210 4.5 5.811.42.13.12.85.6-6.5-5.5 1.1375.4 1.41.6-1.3 2.710.0 Net sales (left) Ratio of ordinary income to net sales (right) Operating income Full year forecastFull year forecastFull year forecast Ordinary income Net income Total assets Net assets Net income per share (left) Net assets per share (right) Full year forecast 010_0396202832612.indd 2 2014/12/10 10:44:03 ZC1000 SS3000 ChargeconferencingBS700 ofce UTMSS3000 VPN router PLATIA Topics 34 URL ltering functionWeb antivirus functionFirewall function Spam email blocking functionProhibits access to specic websites based on the website categories designated in advance. Helps prevent deterioration of Blocks unwanted advertising and virus-attached emails. Prevents deterioration of operational efciency and theft of IDs Monitors communication during website browsing. Prevents unauthorized access by determining whether data can be transferred to the internal network based on SAXA, Inc. launched the ZC1000, a cloud-based virtual private network (VPN) router with gigabit an addition to the Office AGENT series. The ZC1000 greatly reduces the effort and costs required for both the Internet and for the subsequent network a cloud-based VPN router that does not require the entering of information onto VPN router for configuration at the time of initial setup or device replacement.Allows to the remote access application for Windows (provided free of charge) makes setting up a VP

4 N for access to the office network very
N for access to the office network very simple while away from the office or at home. In addition, an application for VPN connection for maintenance enables remote maintenance in a secure network environment.SAXA, Inc. started sales in November 2014 of the “SS3000,” a unified threat management (UTM) appliance, which is the latest addition to the Office AGENT seriesThe SS3000’s risk-reduction capabilities cover not only virus infection but also spyware, network intrusion, phishing, cyber-attacks on corporate networks, and other threats on the Internet, thereby helping small and medium-size offices greatly lower their network running costs while minimizing the administrative burden.offers greater security than the previous model by significant improvements in - High-speed High-security VPN Environment Realized Simply and Quickly - Allows to access the office LAN at anytime from anywhere to check email and browse files. A high-speed VPN connects the head office and branch offices. Introduction of antivirus protection Head ofceInternetView of ofce Further reinforcement of the SS1000’s security functions. Equipped with the world-leading The Office AGENT series are agent systems to 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. * Kaspersky is a trademark or a register Windows is a registered trademark of Microsoft Corporation Consolidated Financial Statements (Condensed) 5Consolidated Balance Sheets (Millions of yen) 11th Fiscal TermCurrent assetsProperty, plant and equipmentDeferred assetsTotal assetsCurrent liabilitiesTotal liabilitiesShareholders’ equity Retained earnings Treasury stockAccumulated

5 other comprehensive incomeMinority inte
other comprehensive incomeMinority interestsTotal net assetsTotal liabilities and net assets (Millions of yen) 11th Fiscal TermGross profitOrdinary income (loss) Special profitsIncome (loss) before income taxes Tax expenseIncome (loss) before minority interestsMinority interest in income (loss)Consolidated Statements of Comprehensive Income (Millions of yen) 11th Fiscal TermIncome (loss) before minority interestsOther comprehensive incomeComprehensive income (loss) (Millions of yen) 11th Fiscal TermCash 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_0396202832612.indd 5 2014/12/10 10:44:06 Group Companies 6 Meister Corporation&#xSyst;m d;vel;&#xopme;&#xnt00;company SAXA Holdings, Inc.&#xHold;&#xing ;omp; ny0; SAXA BusinessSystem, Inc.&#xSale;&#xs an; ma;&#xinte;&#xnanc; 00;service company SAXA Precision, Inc. e business SAXA Techno, Inc. System K Corporation&#xSyst;m d;vel;&#xopme;&#xnt00;company SAXA SystemEngineering, Inc.&#xSyst;m d;vel;&#xopme;&#xnt00;company SAXA Proassist, Inc.in the Gr�oup Coretac, Inc. Electronic Co., Ltd. SAXA Technical (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-sentative DirectorManaging DirectorYuzuru SuzukiManaging DirectorTadashi Minagawa DirectorHiroshi Kimura DirectorMitsugu OsakaDirectorFumihisa IsonoDirectorToshiya HatakeyamaDirectorKeizo IkedaStanding AuditorMasaki Ohuchi Takashi Kouno 1.

6 Toshiya Hatakeyama and Keizo Ikeda ar
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. 010_0396202832612.indd 6 2014/12/10 10:44:06 Stock Information (as of September 30, 2014) April 1, 2014 September 30, 201412th Midterm Business ReportTicker code: 6675 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. easons 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, ofce and branches nationwide and 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 Shares Total number of shares authorized to be issued Total number of shares issued Number of shareholders Major Shareholders Notes

7 :1. Although the Company holds 3,669
:1. Although the Company holds 3,669 thousand shares of treasury stock, it is not included among 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 and by rounding them down to the nearest indicated unit. The number of shares held by Oki Electric Industry Co., Ltd., includes the Company’s 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 (Mizuho Bank Account) for the Re-trust by the Trustee of Trust & Custody Services Bank, Ltd.” on the register of shareholders.)Notes: The values shown in “Distribution of Shareholders by Category” are rounded off. Shareholder nameNumber of shares Shareholding CBNY DFA INTL SMALL CAP VALUE PORTFOLIOSAXA Group Employee Stock OwnershipJapan Trustee Services Bank, Ltd. (trust account)Bank of Tokyo-Mitsubishi UFJ, Ltd.Mizuho Trust & Banking Co., Ltd.The Master Trust Bank of Japan, Ltd. (trust account)Distribution of Shareholders by Category Individuals, etc.44.5% Domestic corporations (excluding nancial 13.4% Financial institutions32.6% Foreign-afliated corporations and foreigners7.5% Securities companies 010_0396202832612.indd 1 2014/12/10 10:44:02