Information on clerical operations involving shares
Stock-transfer agent: UFJ Trust Bank Limited.
Handling office: UFJ Trust Bank Limited., Corporate Agency Department
7-10-11, Higashisuna, Koto-ku, Tokyo 137-8081, Japan Tel (+) 81-3-5683-5111
URL http://www.ufjtrustbank.co.jp/
Place of transfer Any UFJ Trust Bank Limited. branch
Fiscal year end March 31
Annual meeting of shareholders
Held in June
Record date Annual meeting of shareholders/dividends March 31
Interim dividends September 30
Other record dates Record dates will be set by giving prior public notice.
Number of one stock trade unit:
100 shares
Newspaper in which public notices are made
Nihon Keizai Shimbun
Each shareholder can inspect the balance sheet and profit and loss statement at the Company’s website
(http://www.bsc.fujitsu.com/ir/).
FUJITSU BROAD SOLUTION
＆
CONSULTING, Inc.
Gate City Ohsaki East Tower 11F,
1-11-2, Osaki, Shinagawa-ku, Tokyo 141-8581, Japan Tel: (+) 81-3-5740-3111 (main number), Fax: (+) 81-3-5740-3100
URL: http://www.bsc.fujitsu.com/
Fujitsu Broad Solution & Consulting, Inc.
URL: http://www.bsc.fujitsu.com Securities code: 4793
April 1, 2003 - March 31, 2004
Mail contact address Telephone inquiry address
To our shareholders
TO OUR SHAREHOLDERS
z Highlight of financial results for 41st term
(Units: Millions of yen) Results of
operations 41
st
term
Sales 32,815 Y/Y comparison +3.9%
Ordinary income 183 -83.4%
Net loss 1,392 (Net profit of ¥589 million in the previous year)
(Units: Millions of yen) Financial standing 41 st term Shareholders’ equity 12,394 Y/Y comparison -11.4% Total assets 24,114 +1.4%
l Share of total sales by type of business
(Units: Millions of yen)
Takao Kaneko, President (CEO)
We are pleased to provide a business overview of the Company for 41st term
(April 1, 2003 - March 31, 2004).
We regret to report that we have registered a loss for the current term, primarily attributable to a major project that proved unprofitable. We
discontinued this project during the term. Based on this experience, we will endeavor to create a more sound corporate structure and to improve
profitability by improving risk management for projects on a company-wide basis.
With respect to term-end dividends, we plan to continue our policy of providing stable dividends in response to the support we receive from our shareholders. Consequently, we will pay a dividend of ¥6 per share.
Business review
During the term under review, although business conditions were improving in the information service industry, the management environment remained severe because of sluggish information technology investment and fierce price competition.
In response, we increasingly focused on
independent business, pursuing a policy which is moving us away from conventional business centered on contract development.
In software development, we used the technology and know-how that we have accumulated through development for customers in the information and telecommunications sectors in areas in which we excel. In particular, in the embedded system business, we have promoted the development of a diverse range of embedded software, such as systems for 2.5G and 3G mobile phone services, systems for digital home appliances with
communications capabilities in the ubiquitous society, and systems for vehicle navigation. Meanwhile, in software services, we operated our solution business primarily through our proprietary package software, and focused on strengthening our marketing expertise and bolstering our service menu. We also provided services ranging from consulting to outsourcing, to further expand this business.
As a result, sales for the term reached ¥32,815 million (up 3.9% year on year).
In profit terms, however, we were registered an ordinary income of ¥183 million in the term under review, lower than the figure recorded for the previous term (actually an 83.4% decline). This was primarily attributable to a decline in contract prices and an increase in costs caused by unprofitable projects, which offset our efforts to significantly reduce costs.
We also registered extraordinary losses of ¥2,457 million, which consisted of losses on the valuation of uncollectible inventory, the destruction of goods in process, the costs of projects in which the development of software was suspended under agreement with customers to avoid further losses arising from the continuation of development, and losses on the valuation of securities. As a result, we posted a net loss of ¥1,392 million for the term (compared with a net income of ¥589 million in the previous term).
An overview by type of business follows: Custom Software Development
Looking at our activities in the information and telecommunications sectors, we restructured key systems of major telecommunications carriers and shipped internal systems to them on an ongoing basis. We also developed systems for terrestrial digital broadcasting which started this year, and shipped those systems to key TV broadcasting stations. In the development of embedded systems, based on the further accumulation of technology involving mobile phones, we were able to increase sales by approaching a number of domestic and overseas manufacturers. In addition, in the digital consumer electronics area, we shipped an array of systems for DVD recorders and digital television sets to major consumer electronics firms. In the ITS*1 market, we developed vehicle information terminal-related systems, such as car navigation systems, for major automakers.
In the public sector, we continued our involvement in the development of the social insurance system of the Ministry of Health, Labour and Welfare, the postal savings system of Japan Post, and the base system and electrical application system of the Ministry of Finance. 1 2 Hardware Sales 1,054 3.2% Production and Sales of Packaged Software 416 1.3% Software Services 10,308 31.4% Custom Software Development 21,036 64.1%
To our shareholders
TO OUR SHAREHOLDERS
In the financial services sector, we developed key systems at major financial institutions. And for the distribution industry, we shipped POS systems*2 and product analysis systems.
In addition, we created customer management systems and DWH*3 for the electric power sector. As a result, sales reached ¥21,036 million (up 3.2% year on year)
Software services
We provide our clients with a diverse array of software services, such as the provision of solutions and the creation of network systems. We also provide operational support, as well as a temporary staffing service.
In our solution business, we enjoyed healthy sales of BI*4 solutions, in which data is analyzed and
used in the context of product and customer information by telecommunications carriers and in the financial services and distribution sectors. We also registered stronger sales of security solutions using our security software as core programs. This performance reflected the introduction of personal data protection legislation and heightened needs for security.
With respect to the IP telephone solution, using IP networks*5, we promoted sales to Japanese corporations operating in China. We successfully received system orders that will enable us to further development this business.
We also promoted sales of the ERP*6 solution CAP 21, and received a solid volume of orders.
For other services, we received orders for such services as the creation of network systems, system operation and maintenance, and monitoring of systems operation. We also found demand for outsourcing services for central government agencies and major carriers.
In our temporary staffing service, we dispatched engineers to major telecommunications carriers, among other clients.
As a result, sales were ¥10,308 million (up 11.7% year on year).
Production and Sales of Packaged Software For sales of our proprietary package software, we focused mainly on the F
*
TRAN series or products, our established file conversion products, and the FENCE series of security products. In particular, the FENCE series proved popular as core security solutions, with strong sales to financial institutions and local municipalities. However, with users postponing investment in information technology, sales fell to ¥416 million (down 34.6% year on year).Hardware Sales
In sales of system equipment, we sold hardware products incidental to the package software
SAGENT. We had purchased from the supplier and sold it as part of solution business as well as for the creation of network systems.
Sales came to ¥1,054 million (down 20.4% year-on-year).
Challenges for the Company
Although the Company registered an extraordinary loss in the term under review, it plans to use that experience to take the following measures to improve profitability and enhance its
competitiveness. With these measures, we believe that we will be able to generate profits, even in a severe management environment:
(1) Promoting independent businesses
By bolstering our technologies and know-how in embedded systems and giving them a greater weighting,
we will actively expand our operations in the digital consumer electronics and ITS spheres, thereby establishing a competitive advantage. We will also add new product lines involving package products and expand our solution menu, to sell more products that will enable us to better promote independent businesses.
(2) Improving profitability
[1] We will not only strictly review order status, the development environment, and estimates from the order negotiation stage, but we will also enhance risk management at the management level according to the development size of projects and the degree of risk; [2] To reduce costs, the entire Company will focus on
measures such as reducing personnel expenses by improving the effectiveness of development operations and controlling orders for cooperating firms;
[3] We will continue to improve the productivity of development and the quality of our software products by promoting comprehensive standardization for project management.
(3) Development of human resources
We will encourage the strategic development of human resources based on the career
framework (development through a planned career path). This will enable us to develop engineers with sophisticated skills and cost awareness, giving them the ability to respond to customer needs.
The arrival of the ubiquitous society, in which information can be exchanged via the Internet at any time and any place, has brought sharp change to business and lifestyles. The Company will correctly identify new trends, and will focus its management resources on a shift to a solution and service business, moving away from
conventional operations centering on contract development. This approach will enable the Company to achieve sustained growth. We hope that we can continue to count on the support of our shareholders as we pursue this initiative.
June 2004
3 4
Explanation of terms:
*1 <Intelligent Transport Systems (ITS)>
ITS is a new traffic system that can be used to resolve road traffic problems, such as accidents and congestion, by networking people, vehicles, and roads through information using
cutting-edge information and telecommunications technologies. It comprises a few elemental technologies, including the Vehicle Information and Communication System Center (VICS) and the electric toll collection system (ETC).
*2 <POS system>
A POS system is one that records information on the sale of products each time a product is sold in a store, and uses the results of calculation for inventory control or as marketing material. The system is also known as a “point of sale” system.
*3 <Data Warehouse (DWH)>
The DWH is a system used to obtain information that is useful for management by accumulating data that arises from management activities in the key system, and analyzing that data by purpose.
*4 <Business Intelligence (BI)>
BI refers to the effective use of information that a company has accumulated for prompt, accurate decision-making and greater business efficiency throughout the company by analyzing the information.
*5 <IP network>
The IP network is a network in which a communications route is created based on Internet Protocol (IP). IP telephones that use IP networks can provide services at a lower cost compared with conventional telephone networks.
*6 <Enterprise Resource Planning (ERP)>
ERP denotes a management approach whereby management resources are completely administrated and controlled virtually in real time.
Financial statements
TO OUR SHAREHOLDERS
Balance sheet(as of March 31, 2004)
Account title Amount Assets
Current assets
Cash & cash equivalents 4,323,278 Notes receivable 34,480 Accounts receivable 9,988,354 Marketable securities 10,526 Inventories 3,342,447 Other current assets 564,066 Deferred tax assets 1,261,226 Allowance for doubtful
account (9000)
Total current assets 19,515,381 Fixed assets
Investments and long-term loans
Investment securities 140,641 Investment in affiliate 52,925
Total investments and
long-term loans 193,567 Property, plant and equipment
Land 1,268,884
Buildings 1,844,426
Structures 30,466
Equipment 845,955
Accumulated depreciation (1,480,310)
Total property, plant
and equipment 2,509,423 Others assets 1,896,205
Total fixed assets 4,599,195 Total assets 24,114,576
Notes:
1. Amounts are rounded down to the nearest one thousand yen.
2. Claims in affiliates (short term) ¥ 6,668,461,000 3. Debts due to affiliates (short term) ¥ 64,412,000 4. The items of inventories
Merchandises 4,341 Materials 6,123
Goods in process 3,331,982
(Unit: Thousand-yen)
Account title Amount Liabilities and Shareholders’
equity
Current liabilities 8,466,315
Accounts payable 3,874,529 Short-term borrowings 2,300,000 Accrued expenses 1,832,880 Other current liabilities 458,905 Total current liabilities 8,466,315
Long-term liabilities 3,253,700
Provision for employee
retirement benefits 3,131,594 Provision for retirement
benefits to officers 122,105
Total Long-term liabilities 3,253,700
Total liabilities 11,720,015 Shareholder’s equity Common stock Authorized-43,200,000 shares Issued-11,800,000 shares 1,970,000 Capital surplus 3,012,500 Retained earnings 7,418,085
Unrealized gain on investment
securities, net of tax (6,024) Total shareholders’ equity 12,394,561 Total liabilities and shareholders'
equity 24,114,576
Profit and loss statement(April 1, 2003 - March 31, 2004)
(Unit: Thousand-yen)
Account title Amount
Net Sales 3,208,561
Selling, general and administrative expenses 2,692,346
Operating income 516,215
Other income
Interest income and dividends 19,945
Miscellaneous income 71,688 91,634 Other expenses Interest expense 3,108 Miscellaneous expenditure 421,242 424,350 Ordinary profit 183,498 Extraordinary losses
Loss from cancellation of commissioned software development 1,239,785
Inventory written down 1,154,742
Loss from revaluation of investment securities 63,282 2,457,810
Net loss before tax 2,274,311
Income taxes, inhabitant taxes and business taxes 13,012
Adjustment of income taxes (894,497) (881,484)
Net loss 1,392,826
Retained profits brought forward 159,069
Interim dividend amount 70,800
Undisposed loss at end of period 1,304,557
Notes:
1. Amounts are rounded down to the nearest one thousand yen. 2. Transactions with affiliates
Amount of operating transactions
Sales 19,816,176 (thousand-yen)
Purchases 331,557 (thousand-yen)
Amount of transactions other than operating transactions 191,156 (thousand-yen) 3. Net loss per share 118.03 Yen
Profit appropriation
(Unit: Yen)
Account title Amount
Undisposed loss at end of period 1,304,557,684
Reversal of reserve for programs 30,485,340
Reversal of special depreciation allowances 6,159,767
Reversal of general reserve 1,530,000,000
Total 262,087,423
The following appropriation is made: Dividends
(¥6 per share)
70,800,000
Special depreciation allowances 45,713,743
Retained profits carried forward 145,573,680
Note: Interim dividends of ¥70,800,000 (¥6 per share) were paid on November 28, 2003.
5 6
Total assets (Million-yen) Sales (Million-yen)
39th term 40th term
41st
term 39th term 40th term
41st
term Shareholders’
equity (Million-yen) Ordinary income (Million-yen)
39th term 40th term 41st term 39th term 40th term 41st term
Net income or loss (-) per share (Million-yen)
Net income or loss (-) per share (yen)
-118.03 -1,392 39th term 40th term 41st term 39th term 40th term 41st term
Note: As the method for calculating net income per share has changed since the 40th term, net income per share for 39th term is also indicated based on the same calculation method as that used in the 40th term.
We will endeavor to step up planning and design of products, total solutions from development to assessment and examination, and package products for embedded systems, in markets such as
next-generation mobile phones, digital consumer electronics, and ITS that demand sophisticated functions. We believe that this initiative will enable us to increase sales.
With the growing use of broadband communications, mobile area markets, including markets for digital consumer electronics, ITS, and mobile phones, are likely to expand. Meanwhile, corporate IT investment in the security, ERP (Enterprise Resource Planning), and BI (Business Inteligence) areas has been increasing steadily.
We will improve our capability to provide solutions in these areas, to establish an independent business base.
z Provide embedded software programs for DVD recorders and digital TVs
z Expand and strengthen cooperation with semiconductor manufacturers
z Expand the IP TV telephone platform/solution
z Expand the examination business to check malfunctions of digital home appliances (V-labo), and provide a lifeline for them
Digital consumer electronics DIGITAL CONSUMAR ELECTRONICS
Primary target areas and priority measures
z Provide embedded software programs for third-generation mobile phones that require increasing functionality
z Expand operations in China where demand for mobile phones is set to grow
z Develop mobile/security-use software packages for mobile phones that boast greater functionality, including e-commerce
Mobile phones MOBILE
z Approach car navigation terminal manufacturers with DVD technology
z Expand operations related to server systems used for the transmission of information in ITS z Look at entering the Chinese market in cooperation with Japanese corporations
ITS area INTELLIGENT TRANSPORT SYSTEMS
Intelligent Transport Systems (ITS) is a generic name for new road traffic systems created to control people, roads, and vehicles under one total system. ITS employs the cutting-edge information and telecommunications technologies for the purpose of improving road safety, transport efficiency, and comfort.
Sales in the
embedded system area
FY2003 (results)
* “Other” includes ITS.
Digital consumer electronics ¥1.3 billion 30% Other ¥0.8 billion 17% Mobile phones/PHS ¥2.4 billion 53%
¥
¥
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.
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7 8 Finance/general accounting (ERP) Management analysis (BI) Workflow Settlement Security Middleware platform IP Fee collection Groupware Mobile connection Development management (CAD/PDM) Demand forecast (SCP) Production management Procurement/ purchases HR and wages Project management Product planning Maintenance and inspection Contact Center Sales promotion (SFA) Marketing analysis Sales management Inventory LogisticsPriority items in the solution business
l Merchandizing new solutions in the information security and IP areas
l Bolstering the functions of “CAP 21” ERP package products for the construction sector
l Promoting the provision of solutions in the corporate mobile area by applying the embedded system technology to mobile middleware platforms, etc.
l Enhancing the consulting capability in the financial/general accounting (ERP) area as well as the management analysis (BI) area
Focusing on enhancing the solution business
operations in the embedded system area
Company profile TO OUR SHAREHOLDERS Stock information STOCK INFORMATION
As of March 31, 2004 As of March 31, 2004
Trade name: FUJITSU BROAD
SOLUTION & CONSULTING Inc.
Establishment: November 20, 1963
Capital: 1,970,000,000 yen
Number of employees: 1,883
Primary business lines
The Company engages in software development, software services, sales of package products, and sales of system equipment. Its primary businesses are as follows:
● Custom Software
Development Business application software Embedded systems Control systems for networks and precision instruments, etc.
Basic software such as platforms and middleware
● Software Services Solution service
System integration service
Creation/ operation service related to the Internet and LAN
Outsourcing service Temporary staffing service ● Production and
Sales of Packaged Software
Package software developed by the Company
(Tool package, security package, groupware package, ERP package)
Directors and auditors (as of June 29, 2004) President (CEO): Takao Kaneko Executive Director: Haruyuki Kodama Managing Director: Mitsuhiro Nakata
Director: Hiromichi Hirata
Director: Tsuneyoshi Ishii
Director: Kazuhiro Eguchi
Director: Hirokazu Kadowaki
Director: Tsugio Niijima
Director: Hiroshi Asakawa
Standing Auditor: Seishi Osato
Auditor: Kazuhiko Kato
Auditor: Takashi Nakamura
Notes: 1. Hiromichi Hirata, Director, is an outside director as stipulated in Article 188-2-7-2 of the Commercial Code.
2. Kazuhiko Kato, Auditor, and Takashi Nakamura, Auditor, are outside auditors as stipulated in Article 18-1 of the Law for Special Exceptions to the Commercial Code Concerning Audits, etc., of
Kabushiki-kaisha.
Audit corporation: Shin Nihon & Co.
● Hardware Sales System equipment and peripherals Package software of other companies
Primary offices Head office:
Gate City Ohsaki East Tower 11F, 1-11-2, Osaki, Shinagawa-ku, Tokyo 141-8581, Japan
Development center:
Tokyo Develop Center (Minato, Tokyo) Fukuoka Develop Center (Hakata, Fukuoka, Fukuoka)
Branch:
Sendai Branch (Miyagi), Numazu Branch (Shizuoka), Osaka Branch (Osaka) Human resources center:
Tokyo Human Resources Center, Osaka Human Resources Center
State of business combination
The Company’s parent is Fujitsu Ltd., which holds 6,660,000 shares in the Company (share of voting rights: 56.47%). The Company has been
commissioned by its parent to develop software, and sales from such activity account for 60.4% of total sales.
Authorized share capital: 43,200,000 shares
Shares outstanding: 11,800,000 shares
Number of shareholders: 11,817
Major shareholders
Equity stake in the Company Name of shareholder No. of shares
held Percentage
shares %
Fujitsu Ltd. 6,660,000 56.47 Onoe Kigyo K.K. 432,000 3.66 Fujitsu BSC employee stock
ownership society 149,900 1.27 UBS Luxembourg S.A. 143,500 1.21
The Chase Manhattan Bank N.A.,
London SL Omnibus Account 80,200 0.68 Japan Trustee Services Bank, Ltd. 66,100 0.56
Nikko City Trust Bank Co. 58,700 0.49 Hidefumi Ito 50,000 0.42 Goldman Sachs International 40,900 0.34 Noriaki Kato 34,000 0.28
Note: The Company has no equity in major shareholders.
Acquisition, disposal, and ownership of treasury stock No relevant item
9 10 Financial institutions/ securities companies 1.43% Distribution of number of shares by shareholder Individuals/other 34.95% Other corporations 61.37% Foreign companies 2.25% Distribution by No. of
shares held 1 stock trade units 12.89%
5,000 stock trade units
56.44% 5 stock trade units 5.48%
10 stock trade units 11.60% 1,000 stock trade units
6.15% 50 stock trade units 2.47%
500 stock trade units
Information on clerical operations involving shares
Stock-transfer agent: UFJ Trust Bank Limited.
Handling office: UFJ Trust Bank Limited., Corporate Agency Department
7-10-11, Higashisuna, Koto-ku, Tokyo 137-8081, Japan Tel (+) 81-3-5683-5111
URL http://www.ufjtrustbank.co.jp/
Place of transfer Any UFJ Trust Bank Limited. branch
Fiscal year end March 31
Annual meeting of shareholders
Held in June
Record date Annual meeting of shareholders/dividends March 31
Interim dividends September 30
Other record dates Record dates will be set by giving prior public notice.
Number of one stock trade unit:
100 shares
Newspaper in which public notices are made
Nihon Keizai Shimbun
Each shareholder can inspect the balance sheet and profit and loss statement at the Company’s website
(http://www.bsc.fujitsu.com/ir/).
FUJITSU BROAD SOLUTION
＆
CONSULTING, Inc.
Gate City Ohsaki East Tower 11F,
1-11-2, Osaki, Shinagawa-ku, Tokyo 141-8581, Japan Tel: (+) 81-3-5740-3111 (main number), Fax: (+) 81-3-5740-3100
URL: http://www.bsc.fujitsu.com/
Fujitsu Broad Solution & Consulting, Inc.
URL: http://www.bsc.fujitsu.com Securities code: 4793
April 1, 2003 - March 31, 2004
Mail contact address Telephone inquiry address
