2008 SJ Group Report. Contents. SJ Holdings Inc

Transcription

1 Securities code : SJ Group Report Contents A Message to Our Shareholders 1 Consolidated Results and Assets and Liabilities 2 Breakdown of Results (1): By Business Category 3 Breakdown of Results (2): By Location 4 Consolidated Financial Statements 5 Corporate Profile 9 Details of Shares 1 Important Information for Shareholders/Our Website 11

2 A Message to Our Shareholders I greatly appreciate your continuing courtesies and support for the Company. The SJ Group has been developing businesses both in Japan and China, two countries with close economic cooperation. Our basic strategy lies in meeting demand from the public and customers that will bring synergies for our business expansion and greater profits. Our main business is the Information Service business, which offers systems development, software products, and information-related products. Our most recent measures include institutional rearrangements for growth in the future, including the elimination of overlapped functions within the Group and a review of the portfolios of our companies. The SJ Group will continue emphasizing profit as well as reviewing business portfolios from time to time, while focusing on China related business. These measures will lead to Group s balanced sales ratios between Japan and China. In the Japanese market, we seek continuing and stable expansion of our existing systems development, while starting to offer information services to Japanese companies in China in anticipation of new business opportunities to boost revenues. Meanwhile, the SJ Group has been focusing on three business areas. First, we will expand the development of systems that are designed in Japan and manufactured in China for Japanese and other overseas customers. Second, our current SI service in China targets primarily the telecommunications sector, electric power companies, and energy suppliers. Since sales of leading companies in the Chinese SI service are only about 2 billion to 3 billion yen, we anticipate significant growth in the future. Third, we focus on the petrochemicals sector. Our business in this area offers control software by designing equipment and control systems as well as providing project management to SINOPEC, PETRO CHINA, and CNOOC, all of which are leading petroleum-related agencies and corporations in China. As noted, the SJ Group has been reviewing its businesses to respond to changing business environments and pursuing strategies for steady growth. We look forward to your continued support as we pursue these initiatives. June 28 Chairman of the Board and Chief Executive Officer 1 (Jian Lee)

3 Consolidated Results and Assets and Liabilities Sales Ordinary profit (Million yen) 4, 35,241 (Million yen) 2,5 2,371 32, 2, 1,976 24, 23,616 25,863 1,5 1,633 16, 1,55 1, 1,433 8, 5 FY24 FY25 FY26 FY27 Current profit FY24 FY25 FY26 FY27 Net assets (Million yen) 1,4 1,353 (Million yen) 12, 11,44 1,5 7 1,16 9, 7,633 8,647 1, , 3, FY24 FY25 FY26 FY27 FY24 FY25 FY26 FY27 Current net profit per share (Yen) 15, (%) 1 Capital adequacy ratio 1, 8 5, 2, , , , 2-1, FY24 FY25 FY26 FY27 FY24 FY25 FY26 FY27 * Current net profit per share has been calculated based on the average total number of issued shares during the year. The impact of share splits has not been taken into consideration. The net loss in FY24 was the result of a one-time amortization of consolidation adjustments (goodwill) 2

4 Breakdown of Results (1): By Business Category The SJ Group operates an Information Service business that provides systems development, software products, and information-related products; a Petrochemicals Engineering Service business; and Other business. Information Service business Our Information Service business for the fiscal year under review benefited from operational support-based development projects and systems development in China. Nonetheless, consolidated sales decreased to 22,742 million yen (down 3.2% year on year) and consolidated operating profit fell to 2,39 million yen (down 3.4% year on year), primarily because Alphatec Solutions Co., Ltd. was removed from consolidation and contracted bulk development was delayed. Petrochemical Engineering Service business Sales from our Petrochemical Engineering Service business rose to 438 million yen, while operating profit climbed to 221 million yen, with the consolidation of Huanshen Trading (International) Limited into a subsidiary. Other business Our Other business for the consolidated fiscal year under review saw strong sales of ATM and POS systems. Sales from this segment increased to 2,682 million yen (up.2% year on year), while operating profit stood at 24 million yen (compared with a loss of 47 million yen for the preceding consolidated fiscal year), mainly reflecting increased costs for outsourcing the product maintenance service, increased R&D expenses on intensified competition, and our withdrawal from the media business. Sales 32,563 Information Service Business Petrochemical Engineering Service Business Other Business Operating profit Information Service Business Petrochemical Engineering Service Business Other Business 22,742 2,929 2,39 2,678 2, FY26 FY27 FY26 FY27 * Total operating profits for each business category differ from the operating profit figures on our consolidated financial statement due to the fact that operating expenses for the company as a whole (holding company expenses, etc) are not included in operating profit according to business category. 3

5 Breakdown of Results (2): By Location Our results according to location are as follows. Japan Consolidated sales decreased to 18,944 million yen (down 35.2% year on year). Consolidated operating profit also declined, to 1,34 million yen (down 2.3% year on year). The falls are primarily attributable to the delay in Sun Japan s contracted bulk development and slumping EDI business, and the removed from consolidation of Alphatec Solutions Co., Ltd. In contrast, demand was steady for operational supportbased development projects. China Consolidated sales in China rose to 8,143 million yen (up 18.5% year on year), whereas consolidated operating profit decreased to 967 million yen (down 19.6% year on year). The mixed results are attributable to steady demand for systems development from Japanese and Chinese customers, a failure to receive orders for SI projects in the Chinese public sector, weaker feasibility in our Other business, and the removal of Fujian shaifang Culture Propagation Co. Ltd. from the scope of consolidation. Sales Operating profit Japan Japan China China 29,224 1,682 18,944 1,23 1, ,873 8,143 FY26 FY27 FY26 FY27 * Sales according to location include internal sales and transfers between locations. Operating profit figures meanwhile do not include operating expenses for the company as a whole (holding company expenses, etc) and have not had internal operating profits between locations deducted. Consequently, the individual sales and operating profit figures for each location differ from the relevant figures listed on our consolidated financial statement. 4

6 Consolidated Financial Statements Consolidated balance sheet Item FY27 (Year ending March 31, 28) FY26 (Year ending March 31, 27) Assets Current assets 17,891 17,787 Cash and deposits 4,785 4,757 Trade notes and accounts receivable 6,65 6,798 Securities 11 Inventory assets Advance payments 2,219 Deferred tax assets Short-term loans 1,181 Accounts due 2,111 Suspense payments 1,74 Other payments 2,355 1,594 Allowance for bad debt Fixed assets 4,315 5,386 Tangible fixed assets Buildings and structures Machinery and vehicles Tools and equipment Land Construction in progress 14 Intangible fixed assets 2,162 1,758 Goodwill 1,945 1,648 Other Investments and other assets 1,61 2,912 Investment securities Investments 4 4 Deferred tax assets Guarantee for deposits 359 1,366 Other Allowance for bad debt 3 3 Total assets 22,26 23,174 * All figures are rounded down to the nearest million yen. POINT * The increase in advance payments incorporates the posting of alliance-related capital for the expansion of business in China. * The increase in short-term loans is attributable to loans to companies and subsidiaries whose controlling voting rights are held by officers of the Company. * The decrease in guarantee for deposits reflects the transfer of a portion of the guarantee that is scheduled to be transferred to real estate. 5

7 Item FY27 (Year ending March 31, 28) FY26 (Year ending March 31, 27) Liabilities Current Liabilities 1,63 9,445 Trade notes and accounts payable 2,215 2,25 Short-term loans and debts 5,629 4,244 Long-term loans scheduled for repayment within one year Income taxes payable, etc Allowance for bonuses Other 1,643 1,217 Fixed liabilities 1,271 2,323 Long-term loans and debts 1,42 1,991 Allowance for retirement benefits Other 99 Total liabilities 11,874 11,769 Net Assets Shareholders equity 8,552 9,49 Capital 1,23 1,23 Capital surplus 6,539 6,91 Retained earnings 1,835 2,493 Treasury stock Difference on valuation, exchange, etc Valuation difference on other securities 8 11 Foreign exchange adjustment account Share warrants 34 1 Minor interest 2,139 1,667 Total net assets 1,331 11,44 Total liabilities and net assets 22,26 23,174 POINT * The increase in short-term loans and debts is associated with the fundraising to acquire Huanshen Trading (International) Limited into a subsidiary. * The decrease in long-term loans and debts is attributable to the repayment of the counter value of the stock of Alphatec Solutions Holdings Co., Ltd. * The increase in treasury stock is attributable to our purchase of 1, shares in the stock market from May 23 to July 12, 27. 6

8 Consolidated Financial Statements Consolidated profit and loss statement Item FY27 (April 1, 27-March 31, 28) FY26 (April 1, 26-March 31, 27) Sales 25,863 35,241 Cost of sales 19,731 27,48 Gross profit on sales 6,131 7,761 Selling, general, and administrative expenses 4,461 5,375 Operating profit 1,67 2,386 Non-operating income Non-operating expenses Ordinary profit 1,633 2,371 Extraordinary profit Extraordinary loss Current net profit before taxes and other adjustments 796 2,685 Income tax, residential tax and business tax Income tax adjustments Minority interest income Current net profit 185 1,353 * All figures are rounded down to the nearest million yen. POINT * The declines in sales and operating profit are attributable mainly to the removal from consolidation of Alphatec Solutions Co., Ltd., a delay in contracted bulk systems development, and weaker feasibility. * The decrease in current net profit reflects Sun Japan s liquidation of the EDI business and posting of an extraordinary loss, including the accrual of a loss on valuation of receivables of a Chinese subsidiary. Consolidated statement of changes in shareholders equity, etc. * All figures are rounded down to the nearest million yen. POINT Capital Capital surplus FY27 (April 1, 27-March 31, 28) Shareholders equity Retained earnings Treasury stock Total shareholders equity Balance as of March 31, 27 1,23 6,539 2, ,49 Changes during consolidated accounting year Issue of new shares Dividend on retained earnings Current net profit Acquisition of treasury stock Changes to items other than shareholders equity during consolidated accounting year (net) Total changes during consolidated financial year Balance as of March 31, 28 1,23 6,539 1, ,552 - A dividend of 8 yen per share was paid out on earnings in FY26. Dividends at the 7

9 Consolidated Cash Flow Statement Item FY27 (April 1, 27-March 31, 28) FY26 (April 1, 26-March 31, 27) Cash flow from operating activities Cash flow from investment activities 198 1,536 Cash flow from financial activities 746 1,98 Exchange rate difference in relation to cash and cash equivalents Increase (or decrease) in cash and cash equivalents Opening balance of cash and cash equivalents 4,768 5,331 Closing balance of cash and cash equivalents 4,585 4,768 * All figures are rounded down to the nearest million yen. POINT * Cash generated by operating activities increased as factors such as current net profit before taxes and other adjustments of 796 million yen and a 77 million yen decrease in accounts receivable outweighed factors including an 876 million yen in the payment of income taxes. * Cash used by investment activities included factors such as a 1,496 million yen transfer to a subsidiary for investment and 1,525 million yen in loans, offset by 2,8 million yen from the sale of shares of a subsidiary. * Cash used by financing activities reflected the repayment of 1,632 million yen in long-term loans and debts and the purchase of 728 million yen in treasury stock, which overcame an increase of 1,594 million yen in short-term loans and debt. Difference on valuation, exchange, etc. Valuation difference on other securities Foreign exchange adjustment account Total difference on valuation, exchange, etc. Share warrants Minority interest Total net assets ,667 11, , ,139 1,331 end of FY27 were 2 yen per share. 8

10 Corporate Profile Name Address Shinagawa Seaside East Tower Higashi Shinagawa, Shinagawa-ku, Tokyo 14-2 Established July 14, 1989 (Established as holding company and name changed on April 1, 25) Business activities Management and running of SJ Group information services Capital 1,23,61,24 yen (as of March 31, 28) Workforce Main subsidiaries 2,886 employees (consolidated basis as of March 31, 28) Sun Japan Corporation SJ Alpine Inc. Liandi (Nanjing) Information Systems Co. Ltd. USTC e-business Technology Co. Ltd. Huanshen Trading (International) Limited Directors Chairman of the Board and Chief Executive Officer Executive Vice President Director Director and Senior Advisor Director Director Director Auditor Auditor Auditor Jian Lee Hirofumi Kotoi Yutaka Kimura Koji Tsujikawa Noboru Hirata Mikako Takase Kiyoshi Saito Satoru Makita Teruo Masuda Susumu Miyamoto 9

11 Details of Shares Overview (as of March 31, 28) Number of issuable shares 1,41, Number of issued shares 497, Number of shareholders 15,687 * Of the total number of shareholders, 79 have odd-lots of shares only Breakdown of shares according to shareholder (as of March 31, 28) Number of shareholders :15,687 Other domestic companies 116 shareholders (.74%) Securities companies Shares held by Japan Securities Depository Center (JASDEC) 3 shareholders (.19%) 1 shareholder (.1%) Financial institutions Treasury stock 2 shareholders (.13%) 1 shareholder (.1%) Overseas companies, etc. 45 shareholders (.29%) Individuals and others 15,474 shareholders (98.64%) Number of shares :497, Other domestic companies 6,943 shares (12.25%) Securities companies 12,2 shares (2.41%) Financial institutions 55,897 shares (11.23%) Overseas companies, etc. 16, shares (3.35%) Treasury stock 12, shares (2.46%) Shares held by Japan Securities Depository Center (JASDEC) 2,28 shares (.41%) Individuals and others 337,821.4 shares (67.89%) Share price and trading volume (as of April 3, 28) Share price (yen) 21, Trading volume (thousand shares) 18, 15, 12, 9, 6, 3,

12 Important Information for Shareholders Business year April 1 to March 31 the following year Shareholder March 31 every year dividend date (Interim dividends paid out on September 3 if applicable) Annual shareholders meeting June every year Reference date March 31 If the reference date needs to be changed, the revised date will be announced in advance. Shareholder register Mizuho Trust & Banking Co., Ltd. administrator Yaesu, Chuo-ku, Tokyo Administrator s Stock Transfer Agency Department (Head Office) office Mizuho Trust & Banking Co. Ltd Yaesu, Chuo-ku, Tokyo Inquiries by post Stock Transfer Agency Department ( or telephone ) Mizuho Trust & Banking Co. Ltd Saga, Koto-ku, Tokyo Tel: (toll-free) Administrator access points Announcements Mizuho Trust & Banking Co. Ltd. branches nationwide Mizuho Investors Securities Co. Ltd. Head Office and branches nationwide Online announcements posted on our website ( Announcements will be printed in the Nikkei Shimbun in the event of a problem or other circumstances preventing online announcements. Our Website We make every effort to disclose information accurately, in a timely fashion and in an easy to understand manner via the SJ Holdings website to give our shareholders, investors, and all other stakeholders access to essential information.