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April 23, 2013
Panasonic Information Systems Co., Ltd. Consolidated Financial Statements for the Year Ended March 31, 2013 [JGAAP]
Name of the Company: Panasonic Information Systems Co., Ltd.
Registered Stock Exchange: First Section, Tokyo Stock Exchange
Code No.: 4283
URL: http://is-c.panasonic.co.jp/
Representative: Kazuhiro Maegawa, Representative Director and President
Contact: Tatsuo Yoshikawa, Director and Account Manager
Telephone: +81-6-6906-2801
Planned Date for the Regular Shareholders’ Meeting: June 21, 2013
Planned Dividend Payment Date: June 3, 2013
Planned Submission Date of the Annual Securities Report: June 24, 2013
Availability of Supplementary Briefing Material on Annual Results: Available
Schedule of Annual Results Briefing Session: Scheduled (for institutional investors and analysts)
(Amounts less than one million yen have been omitted.)
1. Operating Results and Financial Position for the Fiscal Year Ended March 31, 2013
(April 1, 2012 – March 31, 2013)
(1) Operating results (% shows the change from the previous year)
Net sales Percentage
change Operating
income Percentage
change Ordinary income
Percentage change
(¥ million) (%) (¥ million) (%) (¥ million) (%)
Year ended March 31, 2013 35,178 (3.3) 4,424 4.0 4,411 2.7
Year ended March 31, 2012 36,373 6.3 4,254 1.2 4,293 0.6
Note: Comprehensive income: Year ended March 31, 2013: ¥2,672 million (21.9%), Year ended March 31, 2012: ¥2,192 million (-8.4%)
Net income Percentage
change Net income per share
Diluted net income per
share
Return on equity
Ratio of ordinary
income to total
assets
Operating margin
(¥ million) (%) (¥) (¥) (%) (%) (%)
Year ended March 31, 2013 2,701 21.3 253.56 - 11.3 14.6 12.6
Year ended March 31, 2012 2,227 (13.7) 209.02 - 10.1 15.2 11.7
Reference: Investment profit or loss on the equity method:Year ended March 31, 2013: ¥- million, Year ended March 31, 2012: ¥- million
(2) Financial positions
Total assets Net assets
Ratio of shareholders' equity to total assets
Net assets per share
(¥ million) (¥ million) (%) (¥)
Year ended March 31, 2013 31,355 24,838 79.2 2,330.98
Year ended March 31, 2012 29,011 22,858 78.8 2,145.22
Reference: Shareholders’ equity: Year ended March 31, 2013: ¥24,838 million, Year ended March 31, 2012: ¥22,858 million
(3) Cash flows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Cash and cash equivalents at the end
of the period
(¥ million) (¥ million) (¥ million) (¥ million)
Year ended March 31, 2013 4,669 (12,298) (940) 5,499
Year ended March 31, 2012 3,834 6,908 (903) 14,069
2. Dividend
Annual dividend per share
Total dividend (Annual)
Payout ratio (Consolidated)
Dividends/ Net assets
(Consolidated)
1Q (¥) 2Q (¥) 3Q (¥)Year end
(¥) Annual
(¥) (¥ million) (%) (%)
Year ended March 31, 2012 - 32.50 - 32.50 65.00 692 31.1 3.1
Year ended March 31, 2013 - 32.50 - 32.50 65.00 692 25.6 2.9
Year ending March 31, 2014 (Forecast)
- 32.50 - 32.50 65.00 25.5
3. Forecast of Operating Results and Financial Position for the Fiscal Year Ending March 31, 2014
(April 1, 2013– March 31, 2014)
(% shows the change from the previous year)
Net sales
Percentage change
Operating income
Percentage change
Ordinary income
Percentage change
(¥ million) (%) (¥ million) (%) (¥ million) (%)
First half ending September 30, 2013
16,900 0.2 2,050 1.3 2,050 0.8
Year ending March 31, 2014 36,000 2.3 4,450 0.6 4,450 0.9
Net income
Percentage change
Net income per share
(¥ million) (%) (¥)
First half ending September 30, 2013
1,250 1.2 117.31
Year ending March 31, 2014 2,720 0.7 255.26
*Annotations
(1) Significant changes in subsidiaries in the fiscal year (transfer of specified subsidiaries resulting in a
change in the scope of consolidation): None
Newly accounted: 0 (Company name: ) Excluded from account: 0 (Company name: )
(2) Changes in accounting policy and accounting estimates, and restatements
(a) Changes accompanying the revisions to items such as accounting standards: None
(b) Other changes: None
(c) Changes in accounting estimates: None
(d) Restatements: None
(3) Number of shares issued (common shares)
(a) Number of shares issued at the end of the period (including treasury shares)
FY ended March 2013 10,656,000 shares
FY ended March 2012 10,656,000 shares
(b) Number of treasury shares at the end of the period
FY ended March 2013 372 shares
FY ended March 2012 320 shares
(c) Average number of shares during the period
FY ended March 2013 10,655,645 shares
FY ended March 2012 10,655,703 shares
(Reference)
Non-consolidated Financial Statements for the Year Ended March 31, 2013
1. Operating Results and Financial Position for the Fiscal Year Ended March 31, 2013
(April 1, 2012 – March 31, 2013)
(1) Operating results (% shows the change from the previous year)
Net sales Percentage
change Operating
income Percentage
change Ordinary income
Percentage change
(¥ million) (%) (¥ million) (%) (¥ million) (%)
Year ended March 31, 2013 33,972 (2.1) 4,397 5.7 4,384 4.4
Year ended March 31, 2012 34,712 6.7 4,162 1.8 4,201 1.1
Net income
Percentage change
Net income per share Diluted net income per share
(¥ million) (%) (¥) (¥)
Year ended March 31, 2013 2.692 23.1 252.71 -
Year ended March 31, 2012 2,188 (13.4) 205.34 -
(2) Financial positions
Total assets Net assets
Ratio of shareholders' equity to total assets
Net assets per share
(¥ million) (¥ million) (%) (¥)
Year ended March 31, 2013 30,930 24,660 79.7 2,314.35
Year ended March 31, 2012 28,552 22,690 79.5 2,129.45
Reference: Shareholders’ equity: Year ended March 31, 2013: ¥24,660 million, Year ended March 31, 2012: ¥22,690 million
* Information regarding the audit implementation status
These consolidated financial statements are not subject to the audit procedures based on the Japanese Financial Instruments
and Exchange Act. However, at the time of the disclosure of these consolidated financial statements, the financial statements audit
procedures based on the Act are being implemented.
* Explanation of the proper use of earnings projections and other notes
Forward-looking statements including the forecast of future earnings together with plans, strategies, targets and other matters
stated in this document have been prepared based on currently available information and certain preconditions which the Company
believes to be reasonable, therefore this document does not assure the realization of the plans and forecasts. Actual results may differ
from these forecasts due to their various uncertain factors and the internal and external conditional changes in business operation after
the announcement.
For the notes concerning the use of earnings forecasts, please refer to “1. Analysis of Operating Results” on page 2 of the
Consolidated Financial Statements for the Year Ended March 31, 2013 (Appendix).
Table of Contents for Appendix
I. Operating Results 2
1. Analysis of Operating Results 2
2. Analysis of the Financial Position 5
3. Basic Policies of the Distribution of Profits, Dividends of the Fiscal Year
Ended March 2013 and the Year Ending March 2014 6
II. Corporate Group 7
III. Management Policies 9
1. Fundamental Corporate Management Policies 9
2. Medium- to Long-Term Management Strategy and Issues the Company
Must Work on 9
IV. Consolidated Financial Statements 11
1. Consolidated Balance Sheets 11
2. Consolidated Statements of Income and Comprehensive Income 13
3. Consolidated Statements of Changes in Net Assets 14
4. Consolidated Statements of Cash Flows 16
5. Notes on the Premise of a Going Concern 17
6. Changes in Important Items Forming the Basis of Preparation for the
Consolidated Financial Statements 17
(Change in the Format) 17
7. Notes to Consolidated Financial Statements 17
(Segment Information) 17
(Per Share Information) 17
(Significant Subsequent Events) 17
V. Non-Consolidated Financial Statements 18
1. Non-Consolidated Balance Sheets 18
2. Non-Consolidated Statements of Income 20
3. Non-Consolidated Statements of Changes in Net Assets 21
4. Notes on the Premise of a Going Concern 23
5. Changes in Important Items Forming the Basis of Preparation for the
Non-Consolidated Financial Statements 23
(Change in the Format) 23
VI. Supplementary Information 24
1. Order Backlog 24
2. Sales Performance 24
* Panasonic Information Systems Co., Ltd. is planning to hold a briefing session for investors as detailed below. Information is to be posted on the corporate website immediately after the session.
- Tuesday, April 23, 2013: Financial results presentation meeting for institutional investors and analysts
* Aside from the above session, Panasonic Information Systems Co., Ltd. holds similar meetings
to discuss the Company’s businesses and financial performance for individual investors. For more details including scheduled dates, please visit the corporate website.
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I. Operating Results
1. Analysis of Operating Results
(1) Overview of the Fiscal Year Ended March 31, 2013 During the fiscal year ended March 31, 2013 (April 1, 2012 to March 31, 2013), the Japanese
economy began to show a recovery led by domestic demand, while uncertainty over future conditions linked to the stagnancy of the global economy remained. Business sentiment has been improving since December 2012, lifted by expectations that the economic policies will have a positive impact.
The information service industry held steady, thanks to continued corporate IT investments. In these business conditions, the current fiscal year marks the last year of the Panasonic
Information Systems Group’s medium-term management plan. The Group continues to press ahead to achieve the plan’s themes. These comprise the three themes of “Addressing following objectives to achieve sales of 10,000 million yen to the outside the Panasonic Group (general market),” “Reinforcing partnerships with key clients” and “Strengthening management practices to enable the coexistence of the capacity to expand new markets and the capacity to earn high profits.”
(a) Operating results of the Group for the fiscal year ended March 31, 2013
FY 2011 FY 2012
Amount
(¥ million)
Composition ratio (%)
Amount (¥ million)
Composition ratio (%)
Change (%)
Net sales 36,373 100.0 35,178 100.0 (3.3)
Operating income 4,254 11.7 4,424 12.6 4.0
Ordinary income 4,293 11.8 4,411 12.5 2.7
Net income 2,227 6.1 2,701 7.7 21.3
In the fiscal year ended March 31, 2013, the Group placed a particular emphasis on the expansion of sales to clients in general market, and building and reinforcing partnerships in the Panasonic Group. In addition, the Group continued to drive forward the improvement of its management practices by containing costs, strengthening operating efficiency and other initiatives.
As a result, net sales decreased although the Group secured new orders for both general markets and the Panasonic Group, and worked on the system development. Net income increased, however, thanks to improved management practices such as lower development costs.
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(b) Operating results by product segment for the fiscal year ended March 31, 2013
FY 2011 FY 2012
Net sales (¥ million)
Gross profit ratio on net
sales (%)
Net sales (¥ million)
Gross profit ratio on net
sales (%)
Change in net sales
(%)
Point difference in gross profit ratio on net
sales
(i) System Services 22,244 20.7 22,008 23.2 (1.1) 2.5
(ii) System Solutions 8,004 19.2 7,793 17.6 (2.6) (1.6)
(iii) System and Communications Equipment
6,125 16.2 5,375 16.6 (12.2) 0.4
Total 36,373 19.6 35,178 21.0 (3.3) 1.4
(i) System Services
Net sales fell by 1.1% from the previous year to 22,008 million yen, and the gross profit ratio on net
sales was 20.7% (23.2% in the previous year).
Net sales fell below that of the previous year, as the downward trend in service prices to existing
clients continued, although net sales to general market increased with better operation rates at the Osaka
Central Data Center.
However, the gross profit ratio on net sales was higher than the ratio for the previous year, as the
Group pursued out-and-out efficiency in the management of system operations and other measures,
offsetting the negative effect of the reduction in service prices.
(ii) System Solutions
Net sales decreased by 2.6% from the previous year to 7,793 million yen, and the gross profit ratio
on net sales were 17.6% (19.2% in the previous year).
During the fiscal year, this segment worked on several system development businesses including
the development of a ticketing system for aquariums and an ERP system for a specialized trading
company and a human resource service business. The Group also began working on new projects of
system development mainly for the Panasonic Group, but net sales for this segment fell short of the result
of the previous year.
The gross profit ratio to net sales was lower than the ratio for the previous year, primarily because
the Group deployed more personnel in development in order to adhere to the delivery schedule and
ensure quality for projects to be delivered at the end of FY2012.
(iii) System and Communications Equipment
Net sales decreased by 12.2% from the previous year to 5,375 million yen, and the gross profit ratio
on net sales were 16.6% (16.2% in the previous year).
During the fiscal year, net sales was lower than that of the previous year, due to a decrease in
sales of the equipment by itself.
The gross profit ratio on net sales was higher than that for the previous year.
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(2) Forecast for the Fiscal Year Ending March 31, 2014 Although there are high hopes that the Japanese economy will achieve a recovery on the back of a
weaker yen and rising share prices, persistent cautiousness about the future is expected to influence
corporate IT investment. Moreover, it is projected that the focus of IT needs will shift from the
enhancement of operational efficiency to the contribution to management.
In light of this outlook, the Group’s consolidated financial results forecasts for the year ending
March 31, 2014 are as follows.
FY 2012 FY 2013 Change
(¥ million) (¥ million) (%)
Net sales 35,178 36,000 2.3
Operating income 4,424 4,450 0.6
Ordinary income 4,411 4,450 0.9
Net income 2,701 2,720 0.7
Risks Concerning Forecasts Forecasts described above have been made based on information available as of the date of the announcement and
assumptions that seem to be reasonable, but actual results may differ from these forecasts.
Although possible risks are listed below, these are not all. Please also refer to the annual security report
providing information on risks, uncertainties and other factors.
• Rapid changes in the Japanese economic conditions or demand for products and services • Trends of demand in industry • Shortages of raw materials or sharp rise in their prices • Changes in social infrastructure brought about by a rapid technological change • Trends in business concerning alliances and cooperation between the Group and other companies • The possibility of incurring expenses as a result of defects or flaws relating to products or services • Limitations on the use of the patents and other intellectual property of third parties • Changes in the market value of assets such as investment securities or the valuation of assets such as deferred
tax assets or other changes in accounting policies • Natural disasters such as an earthquake and other factors that could disrupt business activities
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2. Analysis of the Financial Position
(1) Assets, liabilities and net assets
As of the end of the fiscal year ended March 31, 2013, total assets increased by 2,343 million yen
(8.1%) from the end of the previous year to 31,355 million yen.
(a) Current assets
Current assets increased by 3,431 million yen (15.4%) from the end of the previous year to
25,730 million yen, mainly due to an increase of 2,237 million yen in deposits paid to Panasonic
Corporation and others, and an increase of 1,425 million yen in notes and accounts receivable-
trade owing to increasing sales in March 2013.
(b) Noncurrent assets
Noncurrent assets decreased by 1,087 million yen (16.2%) from the end of the previous year to
5,624 million yen, mainly due to a 708 million yen decrease of property, plant and equipment
resulting from the depreciation of hardware and other noncurrent assets.
(c) Current liabilities
Current liabilities increased by 578 million yen (10.1%) from the end of the previous year to
6,295 million yen. This is mainly due to a 406 million yen and 103 million yen increase in accounts
payable-trade and accounts payable-other, respectively, because of an increase in the purchase of
goods and equipment in March 2013.
(d) Noncurrent liabilities
Due to factors such as progress in the repayment of lease obligations, noncurrent liabilities fell by
213 million yen (49.1%) from the end of the previous year to 221 million yen.
(e) Net assets
Net assets showed an increase of 1,979 million yen (8.7%) from the end of the previous year to
24,838 million yen as net income of 2,701 million yen was posted, although a year-end dividend of
the previous year and an interim dividend of 692 million yen in total were paid.
(2) Cash flows
Cash and cash equivalents (hereinafter referred to as “funds”) at the end of the year ended March
31, 2013 decreased by 8,569 million yen from the end of the previous year to 5,499 million yen.
(a) Cash flows from operating activities
Funds generated from operating activities increased by 835 million yen to 4,669 million yen from
the previous year.
The main factors of the increase were as follows.
Income before income taxes and minority interests amounted to 4,411 million yen; depreciation
and amortization amounted to 1,817 million yen; and income taxes paid amounted to 1,888 million
yen.
(b) Cash flows from investing activities
Funds used in investing activities were 12,298 million yen (revenues of 6,908 million yen in the
previous year).
This was mainly due to deposits paid to Panasonic Corporation amounted to 11,000 million yen
and purchase of property, plant and equipment amounted to 1,232 million yen.
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(c) Cash flows from financing activities
Funds used in financing activities increased by 37 million yen to 940 million yen.
This mainly attributed to cash dividends paid which amounted to 692 million yen and repayments
of finance lease obligations which amounted to 247 million yen.
(d) Free cash flows
Due to the aforementioned operating and investing activities, free cash flows resulted in a cash
outlay of 7,628 million yen (a cash inflow of 10,742 million yen in the previous year).
Reference: Indicators relative to cash flows
FY ended
March 2010 FY ended
March 2011 FY ended
March 2012 FY ended
March 2013
Ratio of shareholders’ equity to total assets (%) 78.2 78.2 78.8 79.2
Ratio of shareholders’ equity to total assets on a market value basis (%)
100.3 81.5 81.3 74.8
Cash flows to interest bearing debt (years) 0.1 0.3 0.2 0.1
Interest coverage ratio (times) 460.4 269.5 269.9 357.9
Ratio of shareholders’ equity to total assets: Shareholders’ equity/Total assets
Ratio of shareholders’ equity to total assets on a market value basis: Total market capitalization/Total assets
Cash flows to interest bearing debt: Interest-bearing debt/Cash flows from operating activities
Interest coverage ratio: Cash flows from operating activities/Interest payments
* All indicators are calculated using consolidated financial results.
* Total market capitalization is calculated by multiplying the final share price at the end of the fiscal year by the total number of shares
issued exclusive of treasury shares.
* Interest-bearing debt constitutes all liabilities included in the consolidated balance sheet concerning which interest is paid.
3. Basic Policies of the Distribution of Profits, and Dividends of the Fiscal Year Ended March 2013 and the Year Ending March 2014
(1) Policy on determinations of dividends from surplus
We believe that providing returns to shareholders is one of the most important management issues.
We have adopted a policy to actively and stably distribute surplus funds based on financial performance
while keeping in mind the need to increase internal reserves for reinforcing management foundations and
long term growth.
The Articles of Incorporation provide that March 31, September 30, and other days specified by the
Board of Directors shall be the record dates for the dividends from surplus funds and that the Board of
Directors shall be the decision-making body concerning the dividends from surplus funds. With respect to
profit distribution, our bottom line is to maintain a stable dividend payout of 55 yen per share each year to
our shareholders while making the distribution of profits to the greatest extent possible in accordance with
our consolidated financial performance in a fundamental policy based on comprehensive considerations
of our status of fund, financial standing, and payout ratio.
Internal reserves are allocated first to increasing corporate value and then to reinforcing financial
constitution as well as capital investments with an eye towards future business growth and expansion,
research and development of new technologies and new businesses, and human resource development.
(2) Dividends from surplus
The year-end dividend based on the record on March 31, 2013 will be 32.50 yen per share. This is
the regular dividend (stable dividend of 27.50 yen and a performance-tied dividend of 5 yen). With regard
to an interim dividend based on the record on September 30, 2012, we paid 32.50 yen per share (a stable
dividend of 27.50 yen and a performance-tied dividend 5 yen). Therefore, the annual dividend will be 65
yen per share, and the payout ratio per share will be 25.6% on a consolidated basis.
In the fiscal year ending March 2014, we plan to pay interim and year-end dividends of 32.50 yen
per share for a total annual dividend of 65 yen per share. The resulting payout ratio will be 25.5%.
6
II. Corporate Group The Group comprises Panasonic Information Systems Co., Ltd. and its two consolidated
subsidiaries, and engages in the information service business.
Concrete business activities comprise system services including system operation services and
system maintenance services; system solutions including system development, system solution provision,
and sales of our own software; and system and communications equipment business including system
equipment sales, communication equipment sales, and sales of the software of other companies. The
positioning of subsidiaries with respect to business activities is as follows.
Panasonic Net Solutions Co., Ltd. develops groupware and other products, while V-Internet
Operations, Inc. develops security systems and other products.
Our parent company is Panasonic Corporation. Panasonic Corporation sells system equipment and
leases software and office space to the Company.
The following business diagram illustrates the description above.
(Business Diagram)
Development of security
systems, etc.
Development of groupware, etc.
System operation services,
System maintenance services,
System development,
System solutions,
Sales of our own software,
System equipment sales,
Communication device sales, etc.
Panasonic Net Solutions Co., Ltd. V-Internet Operations, Inc.
System operation services,
System equipment sales, etc.
System operation services,
System equipment sales, etc.
The Company
Customers
Software leasing,
Office space leasing,
System equipment sales, etc.
t
Panasonic Corporation
7
(Group Companies)
(1) Parent company
(As of March 31, 2013)
Relationship Company
name Location
Capital(¥ million)
Main Business
Ratio of voting
rights (%) (indirect holdings)
Directors of both
companies
Business transactions
Loans receivable
Equipment hiring
notes
Panasonic Corporation
Kadoma City, Osaka
258,740
Sales and manufacturing of
electric and electronic
equipment and others
64.04 (0.33)
None
We provide the company information
system services.
None Yes *
(2) Consolidated subsidiaries
(As of March 31, 2013)
Relationship Company
name Location
Capital (¥ million)
Main Business Ratio of voting
rights (%)Directors of
both companies
Business transactions
Loans receivable
Equipment hiring
notes
Panasonic Net
Solutions Co., Ltd.
Minato-ku, Tokyo
70 Information
services 100.00 Yes
We provide the company
system operation
services and sell system equipment.
Yes Yes
V-Internet Operations,
Inc.
Chuo-ku, Osaka
60 Information
services 100.00 None
We provide the company
system operation
services and sell system equipment.
None None
1. In the percentage of the voting rights owned column, figures in parentheses indicate indirect holdings of the total percentage.
2. *: A company that submits annual securities reports.
8
III. Management Policies 1. Fundamental Corporate Management Policies
The management philosophy of the Group is to strive for the creation of new values, by pursuing
user-friendliness and accomplishing high-tech mindset, driven by challenging spirits and full speed of
actions.
Based on the philosophy, the Group works with customers to develop solutions to their problems,
striving through IT to contribute to reforms of customers and create value for them.
By strengthening our corporate value with above initiatives, we conduct management to satisfy all
of our stakeholders (shareholders, investors, customers, business partners and employees).
2. Medium- to Long-Term Management Strategy and Issues the Company Must Work on
Aiming to be an IT services company which keeps delivering value to customers, the Group is
providing IT solutions.
The Group has been assisting its clients with IT system restructuring and business process reforms
by leveraging on-site capabilities, namely, our technological and problem-solving capabilities covering
systems development and operation.
The principal objective of IT is rapidly changing from the enhancement of operational efficiency to
the contribution to management. Responding to this change, the new medium-term management plan
aims to broaden and deepen our business domain and level where we can bring our on-site capabilities
into full play. By accomplishing this goal, we strive to be a “true business partner” contributing directly to
clients’ management and businesses, not just a mere partner for systems development and operation.
■Outline of the medium-term management plan (FY2013-FY2015)
Numerical targets for FY2015 are consolidated net sales of 38,000 million yen and consolidated
operating income of 4,600 million yen (operating income ratio on net sales of 12.1%). In order to achieve
these numerical targets, we will promote the following initiatives centering on clients and products.
1) Reinforce business in general market
Clients-oriented
• Strengthening of relationships with existing clients
We will promote a business model that broaden and deepen our relationships with
clients. Our commitment to clients ends neither with the delivery of systems and equipment
nor upon the launch of a service. Through the cultivation of broader and deeper relationships
with clients, we always endeavor to discover their potential needs so that we can offer
additional services that enable them to resolve their business issues.
• Capturing of new clients by offering a wider range of IT services
The flexibility and diversity of our services and solutions will be enhanced. We will offer
a range of IT services that meets the needs of diverse clients, whose businesses vary greatly
in size, and thus broaden and deepen our client base by attracting new clients.
9
Products-oriented
• Achievement of synergy of the Panasonic Group
We will create solutions by combining the Panasonic Group’s products and services
with the Panasonic Information Systems Group’s IT services. We capitalize on the synergy
achieved through combination of the strengths of the Panasonic Group and the Panasonic
Information Systems Group. With the advantage, we aim to offer new value to existing clients
and cultivate new markets.
• Select and focus on key businesses
We will further step up promotion of the growing businesses that we have been
promoting—IT infrastructure construction and operation, enterprise system construction, and
collaboration with the Panasonic Group. At the same time, we will also implement technology
and product strategies that are designed to lead to creation of new markets. Through these
initiatives, we aim to generate net sales of 7,000 million yen.
2) Reinforce partnerships with the Panasonic Group
We will cultivate stronger and closer relationships with the Panasonic Group, our largest client,
by contributing to the Panasonic Group in terms of both business processes and businesses.
3) Develop business in new markets while maintaining high profitability
We will invest for growth and development of the Group while striving to maintain a high-profit
structure in order to enhance corporate value.
• Development of human resources
As an IT services company, we recognize that people are our most valuable asset.
Therefore, we will prioritize human resources development so that each of us can make a
growing contribution to clients’ management. By enhancing quality not only in terms of
technology but also that of human resources, we aim to delight our clients, not merely satisfy
them.
• Thorough pursuit of rationalization and streamlining
We will thoroughly pursue rationalization and streamlining by continuously repeating the
process of accumulating and applying know-how. For example, thorough utilization of the latest
IT technologies will be promoted.
■ Research and development
The new medium-term management plan regards research and development activities for the
creation of new businesses and technologies as important measures. We plan to invest a total of 500
million yen in these areas over a three-year period.
The Group’s research and development activities are mainly conducted in the R&D Center.
During the fiscal year ended March 31, 2013, research and development expenditures amounted to
135 million yen. The main expenditures were for verifying the functionality of new technologies and
commercial licenses.
10
IV. Consolidated Financial Statements
1. Consolidated Balance Sheets
(¥ million)
As of March 31, 2012 As of March 31, 2013
Assets
Current assets
Cash and deposits 175 268
Notes and accounts receivable-trade 5,325 6,750
Construction deferred payment 1,543 831
Inventories 151 382
Deferred tax assets 407 498
Deposits paid 13,999 16,236
Other 695 761
Total current assets 22,299 25,730
Noncurrent assets
Property, plant and equipment
Buildings, net 691 651
Tools, furniture and fixtures, net 2,087 2,194
Lease assets, net 488 317
Construction in progress 745 142
Total property, plant and equipment 4,013 3,305
Intangible assets
Software 586 435
Lease assets 37 -
Other 123 78
Total intangible assets 747 514
Investments and other assets
Investment securities 279 231
Deferred tax assets 23 42
Prepaid pension cost 843 679
Other 810 852
Allowance for doubtful accounts (6) (0)
Total investments and other assets 1,951 1,805
Total noncurrent assets 6,712 5,624
Total assets 29,011 31,355
11
(¥ million)
As of March 31, 2012 As of March 31, 2013
Liabilities
Current liabilities
Notes and accounts payable-trade 1,846 2,253
Income taxes payable 1,015 947
Accounts payable-other 1,555 1,658
Accrued expenses 307 163
Accrued consumption taxes 120 258
Deposits received 6 17
Provision for bonuses 533 670
Provision for directors' bonuses 12 24
Other 319 301
Total current liabilities 5,717 6,295
Noncurrent liabilities
Provision for retirement benefits 7 10
Long-term deposits received 43 35
Deferred tax liabilities 22 -
Lease obligations 362 175
Total noncurrent liabilities 435 221
Total liabilities 6,152 6,517
Net assets
Shareholders' equity
Capital stock 1,040 1,040
Capital surplus 870 870
Retained earnings 20,891 22,900
Treasury stock (0) (0)
Total shareholders' equity 22,801 24,810
Accumulated other comprehensive income
Valuation difference on available-for-sale securities 57 27
Total accumulated other comprehensive income 57 27
Total net assets 22,858 24,838
Total liabilities and net assets 29,011 31,355
12
2. Consolidated Statements of Income and Comprehensive Income
(¥ million)
Year ended March 31, 2012
(From April 1, 2011 to March 31, 2012)
Year ended March 31, 2013
(From April 1, 2012 to March 31, 2013)
Net sales 36,373 35,178
System service sales 22,244 22,008
System solution sales 8,004 7,793
System and communications equipment sales 6,125 5,375
Cost of sales 29,238 27,804
System service cost of goods sold 17,634 16,895
System solution cost of goods sold 6,470 6,425
System and communications equipment cost of goods sold 5,133 4,483
Gross profit 7,134 7,374
Selling, general and administrative expenses 2,879 2,949
Operating income 4,254 4,424
Non-operating income
Interest income 58 29
Dividends income 5 5
Other 4 2
Total non-operating income 68 36
Non-operating expenses
Interest expenses 14 13
The fixed assets abandonment is disadvantageous 7 1
Exchange loss 2 8
Taxes and dues - 22
Other 5 4
Total non-operating expenses 29 50
Ordinary income 4,293 4,411
Extraordinary loss
Restructuring expenses 451 -
Total extraordinary loss 451 -
Income before income taxes and minority interests 3,842 4,411
Income taxes-current 1,808 1,822
Income taxes-deferred (192) (113)
Total income taxes 1,615 1,709
Income before minority interests 2,227 2,701
Net income 2,227 2,701
Income before minority interests 2,227 2,701
Other comprehensive income
Valuation difference on available-for-sale securities (34) (29)
Total other comprehensive income (34) (29)
Comprehensive income 2,192 2,672
Comprehensive income attributable to
Comprehensive income attributable to owners of the parent 2,192 2,672
Comprehensive income attributable to minority interests - -
13
3. Consolidated Statements of Changes in Net Assets
(¥ million)
Year ended March 31, 2012
(From April 1, 2011 to March 31, 2012)
Year ended March 31, 2013
(From April 1, 2012 to March 31, 2013)
Shareholders' equity
Capital stock
Balance at the beginning of current period 1,040 1,040
Changes of items during the period
Total changes of items during the period - -
Balance at the end of current period 1,040 1,040
Capital surplus
Balance at the beginning of current period 870 870
Changes of items during the period
Total changes of items during the period - -
Balance at the end of current period 870 870
Retained earnings
Balance at the beginning of current period 19,356 20,891
Changes of items during the period
Dividends from surplus (692) (692)
Net income 2,227 2,701
Total changes of items during the period 1,534 2,009
Balance at the end of current period 20,891 22,900
Treasury stock
Balance at the beginning of current period (0) (0)
Changes of items during the period
Purchase of treasury stock (0) (0)
Total changes of items during the period (0) (0)
Balance at the end of current period (0) (0)
Total shareholders' equity
Balance at the beginning of current period 21,266 22,801
Changes of items during the period
Dividends from surplus (692) (692)
Net income 2,227 2,701
Purchase of treasury stock (0) (0)
Total changes of items during the period 1,534 2,009
Balance at the end of current period 22,801 24,810
14
(¥ million)
Year ended March 31, 2012
(From April 1, 2011 to March 31, 2012)
Year ended March 31, 2013
(From April 1, 2012 to March 31, 2013)
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Balance at the beginning of current period 92 57
Changes of items during the period
Net changes of items other than shareholders' equity (34) (29)
Total changes of items during the period (34) (29)
Balance at the end of current period 57 27
Accumulated other comprehensive income
Balance at the beginning of current period 92 57
Changes of items during the period
Net changes of items other than shareholders' equity (34) (29)
Total changes of items during the period (34) (29)
Balance at the end of current period 57 27
Net assets
Balance at the beginning of current period 21,358 22,858
Changes of items during the period
Dividends from surplus (692) (692)
Net income 2,227 2,701
Purchase of treasury stock (0) (0)
Net changes of items other than shareholders' equity (34) (29)
Total changes of items during the period 1,499 1,979
Balance at the end of current period 22,858 24,838
15
4. Consolidated Statements of Cash Flows
(¥ million)
Year ended March 31, 2012
(From April 1, 2011 to March 31, 2012)
Year ended March 31, 2013
(From April 1, 2012 to March 31, 2013)
Net cash provided by (used in) operating activities
Income before income taxes and minority interests 3,842 4,411
Depreciation and amortization 2,161 1,817
The fixed assets abandonment is disadvantageous 7 1
Increase (decrease) in allowance for doubtful accounts (19) (6)
Interest and dividends income (64) (34)
Interest expenses 14 13
Decrease (increase) in notes and accounts receivable-trade (407) (707)
Decrease (increase) in inventories 52 (231)
Decrease (increase) in other current assets 8 (65)
Decrease (increase) in prepaid pension costs 47 164
Increase (decrease) in provision for retirement benefits 7 3
Increase (decrease) in notes and accounts payable-trade (123) 406
Increase (decrease) in other current liabilities 261 809
Increase (decrease) in other noncurrent liabilities (2) (8)
Other, net (170) (36)
Subtotal 5,615 6,537
Interest and dividends income received 87 34
Interest expenses paid (14) (13)
Income taxes paid (1,854) (1,888)
Net cash provided by (used in) operating activities 3,834 4,669
Net cash provided by (used in) investing activities
Decrease in paid (8,000) (19,100)
Decrease in deposits paid 16,500 8,100
Purchase of property, plant and equipment (1,163) (1,232)
Proceeds from sales of property, plant and equipment 1 2
Purchase of software (430) (171)
Other, net 1 102
Net cash provided by (used in) investing activities 6,908 (12,298)
Net cash provided by (used in) financing activities
Repayments of finance lease obligations (211) (247)
Cash dividends paid (692) (692)
Net cash provided by (used in) financing activities (903) (940)
Net increase (decrease) in cash and cash equivalents 9,838 (8,569)
Cash and cash equivalents at beginning of period 4,230 14,069
Cash and cash equivalents at end of period 14,069 5,499
16
5. Notes on the Premises of a Going Concern
There is no relevant information.
6. Changes in Important Items Forming the Basis of Preparation for the Consolidated Financial Statements
(Change in the Format) (Consolidated Statements of Income and Comprehensive Income) “Exchange loss” was included in “Other” under “Non-operating expenses” in the previous fiscal
year, but is shown separately from the fiscal year ended March 31, 2013 because they constitute more than 10% of total assets. Certain amounts in the consolidated financial statements for the previous fiscal year have been reclassified to conform to current fiscal year presentation.
As a result, 7 million yen under “Other” in the previous consolidated statements of income and comprehensive income has been reclassified as 2 million yen under “Exchange loss” and 5 million yen under “Other.”
The disclosure for the items that are not listed above is omitted since there were no significant changes from the description in the latest Annual Securities Report submitted on June 18, 2012.
7. Notes to Consolidated Financial Statements
(Segment Information) The Group conducts a single-unit business, which comprises an information service business and
its auxiliary businesses. In this light, information is omitted as there is no segment subject to disclosure.
(Per Share Information) Year ended March 31, 2012 Year ended March 31, 2013
(From April 1, 2011 to March 31, 2012) (From April 1, 2012 to March 31, 2013)
Net assets per share 2,145.22 yen 2,330.98 yen
Net income per share 209.02 yen 253.56 yen
Diluted net income per share - -
The basis of the calculation for net assets per share and net income per share is as follows:
Year ended March 31, 2012 Year ended March 31, 2013
(From April 1, 2011 to March 31, 2012) (From April 1, 2012 to March 31, 2013)
Net assets per share
Total assets 22,858 million yen 24,838 million yen
The amount that should be deducted
from total assets - million yen - million yen
(Portion of minority interest) - million yen - million yen
Year-end net assets related to
common stock 22,858 million yen 24,838 million yen
Number of common stock used for the
calculation of net assets per share 10,655 thousand shares 10,655 thousand shares
Net income per share
Net income 2,227 million yen 2,701 million yen
Amounts not attributable to common
shareholders - million yen - million yen
Net income related to common stock 2,227 million yen 2,701 million yen
Number of average common stocks 10,655 thousand shares 10,655 thousand shares
(Significant Subsequent Events)
There is no relevant information. (Omission of Disclosure)
The notes other than above are omitted as considered as there is no significant need for the disclosure of the financial statements.
17
V. Non-Consolidated Financial Statements 1. Non-Consolidated Balance Sheets
(¥ million)
As of March 31, 2012 As of March 31, 2013
Assets
Current assets
Cash and deposits 172 229
Accounts receivable-trade 4,968 6,485
Construction deferred payment 1,518 806
Merchandise and finished goods 65 289
Work in process 66 70
Supplies 0 1
Advance payments-trade 135 92
Prepaid expenses 498 587
Deferred tax assets 386 468
Accounts receivable-other 60 65
Deposits paid 13,704 15,993
Short-term loans receivable from subsidiaries and affiliates 220 200
Current portion of long-term loans receivable from subsidiaries and affiliates
42 42
Other - 13
Total current assets 21,839 25,346
Noncurrent assets
Property, plant and equipment
Buildings, net 691 651
Tools, furniture and fixtures, net 2,073 2,144
Lease assets, net 488 317
Construction in progress 745 139
Total property, plant and equipment 4,000 3,252
Intangible assets
Software 435 307
Software in progress 36 42
Lease assets 37 -
Other 39 13
Total intangible assets 548 364
Investments and other assets
Investment securities 279 231
Stocks of subsidiaries and affiliates 203 203
Long-term loans receivable from subsidiaries and affiliates 42 -
Long-term receipt claim 6 0
Long-term prepaid expenses 550 579
Prepaid pension cost 843 679
Deferred tax assets - 29
Other 244 243
Allowance for doubtful accounts (6) (0)
Total investments and other assets 2,163 1,966
Total noncurrent assets 6,712 5,583
Total assets 28,552 30,930
18
(¥ million)
As of March 31, 2012 As of March 31, 2013
Liabilities
Current liabilities
Accounts payable-trade 1,687 2,119
Accounts payable-other 1,562 1,662
Accrued consumption taxes 112 256
Accrued expenses 295 151
Income taxes payable 998 947
Advances received 31 53
Deposits received 3 12
Provision for bonuses 482 642
Provision for directors' bonuses 12 17
Other 247 195
Total current liabilities 5,434 6,058
Noncurrent liabilities
Long-term deposits received 43 35
Deferred tax liabilities 21 -
Lease obligations 362 175
Total noncurrent liabilities 427 211
Total liabilities 5,861 6,269
Net assets
Shareholders' equity
Capital stock 1,040 1,040
Capital surplus
Legal capital surplus 870 870
Total capital surplus 870 870
Retained earnings
Legal retained earnings 10 10
Other retained earnings
Retained earnings brought forward 20,712 22,712
Total retained earnings 20,723 22,723
Treasury stock (0) (0)
Total shareholders' equity 22,633 24,633
Valuation and translation adjustments
Valuation difference on available-for-sale securities 57 27
Total valuation and translation adjustments 57 27
Total net assets 22,690 24,660
Total liabilities and net assets 28,552 30,930
19
2. Non-Consolidated Statements of Income
(¥ million)
Year ended March 31, 2012
(From April 1, 2011 to March 31, 2012)
Year ended March 31, 2013
(From April 1, 2012 to March 31, 2013)
Net sales 34,712 33,972
System service sales 22,001 21,744
System solution sales 7,602 7,443
System device and sales related to telecommunications equipment
5,107 4,784
Cost of sales 28,140 27,077
System service cost of goods sold 17,625 16,846
System solution cost of goods sold 6,218 6,198
System device and sales related to telecommunications equipment
4,296 4,033
Gross profit 6,571 6,895
Selling, general and administrative expenses 2,409 2,497
Operating income 4,162 4,397
Non-operating income
Interest income 59 30
Dividends income 5 5
Other 3 1
Total non-operating income 68 36
Non-operating expenses
Interest expenses 14 13
The fixed assets abandonment is disadvantageous 7 1
Exchange loss 2 8
Taxes and dues - 22
Other 5 4
Total non-operating expenses 29 50
Ordinary income 4,201 4,384
Extraordinary loss
Restructuring expenses 446 -
Total extraordinary loss 446 -
Income before income taxes 3,754 4,384
Income taxes-current 1,770 1,807
Income taxes-deferred (203) (115)
Total income taxes 1,566 1,691
Net income 2,188 2,692
20
3. Non-Consolidated Statements of Changes in Net Assets
(¥ million)
Year ended March 31, 2012
(From April 1, 2011 to March 31, 2012)
Year ended March 31, 2013
(From April 1, 2012 to March 31, 2013)
Shareholders' equity
Capital stock
Balance at the beginning of current period 1,040 1,040
Changes of items during the period
Total changes of items during the period - -
Balance at the end of current period 1,040 1,040
Capital surplus
Legal capital surplus
Balance at the beginning of current period 870 870
Changes of items during the period
Total changes of items during the period - -
Balance at the end of current period 870 870
Total capital surplus
Balance at the beginning of current period 870 870
Changes of items during the period
Total changes of items during the period - -
Balance at the end of current period 870 870
Retained earnings
Legal retained earnings
Balance at the beginning of current period 10 10
Changes of items during the period
Total changes of items during the period - -
Balance at the end of current period 10 10
Other retained earnings
Retained earnings brought forward
Balance at the beginning of current period 19,217 20,712
Changes of items during the period
Dividends from surplus (692) (692)
Net income 2,188 2,692
Total changes of items during the period 1,495 2,000
Balance at the end of current period 20,712 22,712
Total retained earnings
Balance at the beginning of current period 19,227 20,723
Changes of items during the period
Dividends from surplus (692) (692)
Net income 2,188 2,692
Total changes of items during the period 1,495 2,000
Balance at the end of current period 20,723 22,723
21
(¥ million)
Year ended March 31, 2012
(From April 1, 2011 to March 31, 2012)
Year ended March 31, 2013
(From April 1, 2012 to March 31, 2013)
Treasury stock
Balance at the beginning of current period (0) (0)
Changes of items during the period
Purchase of treasury stock (0) (0)
Total changes of items during the period (0) (0)
Balance at the end of the current period (0) (0)
Total shareholders' equity
Balance at the beginning of current period 21,138 22,633
Changes of items during the period
Dividends from surplus (692) (692)
Net income 2,188 2,692
Purchase of treasury stock (0) (0)
Total changes of items during the period 1,495 2,000
Balance at the end of current period 22,633 24,633
Valuation and translation adjustments
Valuation difference on available-for-sale securities
Balance at the beginning of current period 92 57
Changes of items during the period
Net changes of items other than shareholders' equity (34) (29)
Total changes of items during the period (34) (29)
Balance at the end of current period 57 27
Total valuation and translation adjustments
Balance at the beginning of current period 92 57
Changes of items during the period
Net changes of items other than shareholders' equity (34) (29)
Total changes of items during the period (34) (29)
Balance at the end of current period 57 27
Total net assets
Balance at the beginning of current period 21,230 22,690
Changes of items during the period
Dividends from surplus (692) (692)
Net income 2,188 2,692
Purchase of treasury stock (0) (0)
Net changes of items other than shareholders' equity (34) (29)
Total changes of items during the period 1,460 1,970
Balance at the end of current period 22,690 24,660
22
4. Notes on the Premise of a Going Concern
There is no relevant information.
5. Changes in Important Items Forming the Basis of Preparation for the Non-Consolidated Financial
Statements
(Change in the Format) (Non-Consolidated Statements of Income) “Exchange loss” was included in “Other” under “Non-operating expenses” in the previous fiscal
year, but is shown separately from the fiscal year ended March 31, 2013 because they constitute more than 10% of total assets. Certain amounts in the financial statements for the previous fiscal year have been reclassified to conform to current fiscal year presentation.
As a result, 7 million yen under “Other” in the previous non-consolidated statements of income has been reclassified as 2 million yen under “Exchange loss” and 5 million yen under “Other.”
The disclosure for the items that are not listed above is omitted since there were no significant changes from the description in the latest Annual Securities Report submitted on June 18, 2012.
23
24
VI. Supplementary Information
1. Order Backlog
The amount of orders received during the fiscal year ended March 31, 2013 and order backlog as
of the end of the fiscal year are shown below:
End of FY2011 End of FY2012 Change
(¥ million) (¥ million) (%)
System Services 766 629 (17.8)
System Solutions 1,463 1,960 33.9
System and Communications Equipment 4 7 51.1
Total 2,235 2,597 16.2
Notes: 1. Above figures do not include consumption tax, etc.
2. Amounts of orders for the system and communications equipment represent only those related to “information-related
works.”
2. Sales Performance
FY2011 FY2012
Amount Composition ratio Amount Composition ratio
(¥ million) (%) (¥ million) (%)
Change (%)
Panasonic Group 29,019 79.8 28,338 80.6 (2.3)
General market 7,354 20.2 6,839 19.4 (7.0)
Total 36,373 100.0 35,178 100.0 (3.3)
Note: Above figures do not include consumption tax, etc.