nec capital consolidated financial results for the fiscal...

Consolidated Financial Results for the Fiscal Year Ended March 31, 2017

April 27, 2017

Corporate name: NEC Capital Solutions Limited

Stock exchange listings: Tokyo Stock Exchange, First Section

Stock code: 8793

Website (URL): http://www.necap.co.jp/

Representative’s name and title: Masahiro Annaka, President

Contact: Seiichiro Kodama, General Manager of IR & PR Department

TEL (03) 6720-8400

(Amounts are rounded down to the nearest million yen) 1. Consolidated Financial Results for the fiscal year ended March 31, 2017(From April 1, 2016 to March 31, 2017)

(Percentage shows increase/decrease from previous term)

(1) Consolidated Business Results

Revenues Operating Income Ordinary Income Profit attributable to

owners of parent

Million Yen % Million Yen % Million Yen % Million Yen %

Fiscal year ended March

31, 2017 215,718 6.5 6,024 23.7 6,537 8.4 3,517 5.5

Fiscal year ended March

31, 2016 202,637 (5.2) 4,870 (19.4) 6,031 27.4 3,334 18.4

(Note) Comprehensive income: FY2016: 5,699 Million Yen 174.8% FY2015: 2,074 Million Yen (14.2)%

Net Income

per Share:

Basic

Net Income

per Share:

Diluted

Ratio of Net Income

to Shareholders’

Equity

Ratio of Ordinary

Income to Total

Assets

Ratio of Operating

Income to Net Sales

Yen Yen % % %

Fiscal year ended

March 31, 2017 163.35 － 4.5 0.8 2.8

Fiscal year ended

March 31, 2016 154.85 － 4.4 0.7 2.4

(Reference) Equity in earnings of affiliated companies: FY2016: 95 Million Yen FY2015: 43 Million Yen

(2) Consolidated Financial Position

Total Assets Net Assets Equity Ratio Net Assets per share

Million Yen Million Yen % Yen

As of March 31, 2017 860,482 108,821 9.2 3,675.84

As of March 31, 2016 828,943 101,026 9.2 3,529.64

(Reference) Shareholders’ Equity: March 31,2017: 79,151 Million Yen March 31 2016: 76,003 Million Yen

http://www.necap.co.jp/

NEC Capital Solutions Limited (8793) Consolidated Financial Results for the fiscal year ended March 31, 2017

(3) Consolidated 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 year

Million Yen Million Yen Million Yen Million Yen

Fiscal year ended March 31, 2017

(5,866) (9,127) 28,839 43,831


(18,004) (12,673) 18,482 30,577

2. Dividends Status

Annual Dividends Total

Dividends

Paid

Dividend

Payout

Ratio

Dividend

on Net

Assets

Ratio

1st quarter-end

2nd quarter-end

3rd quarter-end

Fiscal year-end Total

Yen Yen Yen Yen Yen Million Yen % % Fiscal year ended March 31, 2016

－ 22.00 － 22.00 44.00 947 28.4 1.3


－ 22.00 － 22.00 44.00 947 26.9 1.2

Fiscal year ending March 31, 2018 (Forecasts)

－ 22.00 － 22.00 44.00 27.1

3. Forecasts for the fiscal year ending March 31, 2018 (April 1, 2017 to March 31, 2018)

(Percentage shows increase/decrease from previous term）

Revenues Operating Income Ordinary Income

Profit attributable to owners of

parent

Net Income per Share: Basic

Million Yen % Million Yen % Million Yen % Million Yen % Yen

Six months ending

September 30, 2017 100,000 4.3 4,500 62.9 4,500 6.9 2,000 (31.6) 92.88

Fiscal year ending

March 31, 2018 200,000 (7.3) 7,500 24.5 7,500 14.7 3,500 (0.5) 162.54

4. Other

(1) Changes in significant consolidated subsidiaries: Yes

New: 5 companies

(RISA Corporate Solution Fund ⅣInvestment Limited Partnership ,AR Investment Limited Partnership,

CSV Venture Fund Limited Liability Partnership ,Anonymous Partnership Blue and Anonymous Partnership

Hirono Higashi Machi Residence)

(2) Changes in accounting policies, accounting estimates or restatements

1) Changes in accounting policies accompanying revision of accounting standards: Yes

2) Any other changes, except those mentioned in 1) above: No

3) Changes in accounting estimates: No

4) Restatements: No

(3) Number of shares issued (common stock)

1) Outstanding shares at the end of the year (including treasury shares)

Fiscal year ended March 31, 2017: 21,533,400 shares


2) Number of treasury shares at the end of the year

Fiscal year ended March 31, 2017: 398 shares

Fiscal year ended March 31, 2016: 398 shares

3) Average numbers of shares during the year




This Consolidated Financial Results Report for the fiscal year is out of scope of the audit procedures based on the Financial

Instruments and Exchange Act of Japan.

Forecasts are based on the information available to management at the time they were made. Actual results may differ

materially from forecasts for a number of reasons.


Consolidated Financial Report (1) Consolidated Balance Sheets

(Unit: Million Yen)

Term

Items As of March 31, 2016 As of March 31, 2017

（Assets）

I. Current assets

1. Cash on hand and in banks 30,254 43,950

2. Accounts receivable, installment sales 17,090 15,891

3. Leases receivables and investment in leases 413,200 404,535

4. Accounts receivable, leases 17,633 19,315

5. Accounts receivable, loans 189,265 212,962

6. Purchased receivables 17,135 20,725

7. Operational investment securities 6,399 11,240

8. Real estate for sale 39,698 28,206

9. Prepaid expenses 618 582

10. Income taxes receivable 174 153

11. Deferred tax assets 4,140 4,091

12. Other 12,442 12,011

13. Allowance for doubtful accounts (7,601) (7,394)

Total current assets 740,452 766,272

II. Fixed assets

(1) Property and equipment, net

(A) Leased assets

1. Leased assets 46,099 45,593

Total leased assets 46,099 45,593

(B) Assets held for own use

1. Buildings 313 295

2. Machinery and equipment 3,117 3,644

3. Furniture and fixtures 266 202

Total assets held for own use 3,697 4,141

Total Property and equipment, net 49,797 49,735

(2) Intangible assets

(A) Computer programs leased to customers

1. Leased assets 939 1,078

Total computer programs leased to customers 939 1,078

(B) Other intangible assets

1. Software 3,341 2,229

2. Software in progress 230 181

3. Goodwill 5,454 4,377

4. Other 23 22

Total other intangible assets 9,049 6,811

Total Intangible assets 9,988 7,890


(Unit: Million Yen)

Term


(3) Investments and other assets

1. Investment securities 19,435 27,125

2. Claims provable in bankruptcy, claims

provable in rehabilitation and other 6,879 6,528

3. Long-term prepaid expenses 607 880

4. Net defined benefit asset - 207

5. Deferred tax assets 1,698 1,392

6. Other 2,468 2,534

7. Allowance for doubtful accounts (2,384) (2,086)

Total investments and other assets 28,704 36,584

Total fixed assets 88,490 94,209

Total assets 828,943 860,482


(Unit: Million Yen)

Term


（Liabilities）

I. Current liabilities

1. Notes payable, trade 1,123 417

2. Accounts payable, trade 12,770 14,273

3. Short-term borrowings 24,873 49,343

4. Current portion of long-term debt 154,180 111,602

5. Current portion of bonds 10,000 -

6. Commercial paper 107,000 152,000

7. Payable under securitized lease receivables

due within a year 9,219 6,399

8. Accounts payable, other 1,443 783

9. Accrued expenses 4,026 4,369

10. Accrued income taxes 2,865 197

11. Advances received, lease 9,546 9,526

12. Deposits received 3,738 3,613

13. Unearned revenue 376 530

14. Allowance for bonuses 617 671

15. Other 572 591

Total current liabilities 342,353 354,321

II. Long-term liabilities

1. Bonds 50,000 70,000

2. Long-term debt 316,739 305,672

3. Payable under securitized lease receivables 7,184 10,729

4. Net defined benefit liability 1,975 2,275

5. Other 9,662 8,662

Total long-term liabilities 385,562 397,339

Total liabilities 727,916 751,661

(Net assets)

I. Shareholders’ equity

1. Common stock 3,776 3,776

2. Capital surplus 4,648 4,648

3. Retained earnings 67,277 69,847

4. Treasury stock, at cost (0) (0)

Total shareholders’ equity 75,701 78,271

II. Accumulated other comprehensive income

1. Net unrealized gains on marketable securities 805 917

2. Deferred losses on hedging derivatives (597) (219)

3. Foreign currency translation adjustments 197 199

4. Remeasurements of defined benefit plans (103) (17)

Total accumulated other comprehensive

income 302 880

III. Non-controlling interests 25,023 29,669

Total net assets 101,026 108,821

Total liabilities and net assets 828,943 860,482


(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income

(i) Consolidated Statements of Income (Unit: Million Yen)

Term

Items

Fiscal year ended

March 31, 2016

Fiscal year ended

March 31, 2017

I. Revenues 202,637 215,718

II. Costs 181,391 192,401

Gross profit 21,245 23,316

III. Selling, general and administrative

expenses 16,374

17,292

Operating income 4,870 6,024

IV. Non-operating income

1. Interest income 16 7

2. Dividend income 38 61

3. Gain on sales of investment securities 14 3

4. Equity in earnings of affiliates 43 95

5. Foreign exchange gains 897 297

6. Gain on bad debts recovered - 63

7. Gain on investment in partnerships 147 50

8. Other 142 35

Subtotal 1,300 615

V. Non-operating expenses

1. Interest expense 44 31

2. Loss on investment in partnerships 49 50

3. Loss on valuation of investment securities 12 18

4. Other 32 1

Subtotal 139 102

Ordinary income 6,031 6,537

VI. Extraordinary income

Gain on reversal of foreign currency

transaction adjustment - 70

Subtotal - 70

Income before income taxes and minority

interests

6,031

6,608

Income taxes, current 3,014 1,393

Income taxes, deferred 188 133

Total 3,203 1,527

Profit 2,828 5,080

Loss attributable to non-controlling interests (505) 1,563

Profit attributable to owners of parent 3,334 3,517


(ii) Consolidated Statements of Comprehensive Income (Unit: Million Yen)

Term

Items

Fiscal year ended

March 31, 2016

Fiscal year ended

March 31, 2017

I. Profit 2,828 5,080

II. Other comprehensive income

1. Net unrealized gains (losses) on marketable

securities (320) 121

2. Deferred losses on hedging derivatives (81) 351

3. Foreign currency translation adjustments (65) 1

4. Remeasurements of defined benefit plans (170) 86

5. Share of other comprehensive income of

associates accounted for using equity method (116) 57

Subtotal (754) 618

Comprehensive income 2,074 5,699

Comprehensive income attributable to:

Owners of the parent 2,582 4,095

Non-controlling interests (508) 1,603


(3) Consolidated Statement of Changes in Net Assets

Fiscal year ended March 31, 2016 (Unit: Million Yen)

Shareholders’ equity

Common

stock

Capital

surplus

Retained

earnings

Treasury

stock

Total

shareholders’

equity

Balance at March 31,

2015 3,776 4,648 64,890 (0) 73,314

Changes of items

during the fiscal year

Cash dividends (947) (947)

Profit attributable to

owners of parent 3,334 3,334

Net changes of items

other than shareholders’

equity during the fiscal

year

Total changes of items

during the fiscal year －－ 2,386 － 2,386


2016 3,776 4,648 67,277 (0) 75,701

Accumulated other comprehensive income

Non- controlling

interests

Total net assets

Net unrealized gains (losses) on marketable

securities

Deferred

losses on hedging

derivatives

Foreign

currency translation

adjustments

Remeasurements

of defined benefit

plans

Total accumulated

other

comprehensive income


2015 1,145 (420) 262 66 1,054 31,558 105,927

Changes of items


Cash dividends (947)


owners of parent 3,334




year

(339) (177) (64) (170) (751) (6,535) (7,287)


during the fiscal year (339) (177) (64) (170) (751) (6,535) (4,900)


2016 805 (597) 197 (103) 302 25,023 101,026


Fiscal year ended March 31, 2017 (Unit: Million Yen)

Shareholders’ equity

Common

stock

Capital

surplus

Retained

earnings

Treasury

stock

Total

shareholders’

equity


2016 3,776 4,648 67,277 (0) 75,701

Changes of items


Cash dividends (947) (947)


owners of parent 3,517 3,517




year


during the fiscal year －－ 2,570 － 2,570


2017 3,776 4,648 69,847 (0) 78,271

Accumulated other comprehensive income

Non- controlling

interests

Total net assets

Net unrealized gains on

marketable securities

Deferred losses on

hedging

derivatives

Foreign currency

translation

adjustments

Remeasurements

of defined benefit plans

Total

accumulated

other comprehensive

income


2016 805 (597) 197 (103) 302 25,023 101,026

Changes of items


Cash dividends (947)


owners of parent 3,517




year

111 378 2 86 578 4,646 5,224


during the fiscal year 111 378 2 86 578 4,646 7,794


2017 917 (219) 199 (17) 880 29,669 108,821


(4) Consolidated Statements of Cash Flows (Unit: Million Yen)

Term

Items

Fiscal Year ended

March 31, 2016

Fiscal Year ended

March 31, 2017

I. Cash Flows From Operating Activities

Income before income taxes and minority interests 6,031 6,608

Depreciation and amortization 9,572 9,680

Impairment loss 717 -

Amortization of goodwill 1,077 1,077

(Decrease) in allowance for doubtful accounts (2,050) (504)

Increase in allowance for bonuses 9 54

Increase in net defined benefit liability 14 275

Interest and dividend income (54) (69)

Interest expense 4,795 4,728

Equity in earnings of affiliated companies (43) (95)

Exchange gain (3,444) 414

Gain on sales of investment securities (14) (3)

Loss on valuation of investment securities 12 18

Gain on reversal of foreign currency transaction

adjustment - (70)

Decrease (Increase) in installment sales receivables (1,546) 1,199

Decrease (Increase) in lease receivables and investment

in leases (16,284) 8,664

(Increase) in loans receivable (14,999) (23,696)

(Increase) in trading receivables (885) (1,682)

(Increase) Decrease in purchased receivables 3,011 (3,590)

(Increase) Decrease in operational investment securities 2,768 (4,841)

Decrease in real estate for sale 5,323 10,226

Purchases of leased assets (6,126) (5,982)

Proceeds from sales of leased assets 1,097 2,173

Increase (Decrease) in trading accounts payables (2,535) 1,232

Other, net (816) (3,039)

Subtotal (14,369) 2,778

Interest and dividend income received 59 69

Interest paid (4,898) (4,732)

Income taxes paid (508) (3,982)

Income taxes refund 1,711 -

Net cash used in operating activities (18,004) (5,866)

II. Cash Flows From Investing Activities

Purchases of assets held for own use (3,329) (1,844)

Purchases of investment securities (11,912) (10,445)

Proceeds from sales of investment securities 176 364

Proceeds from redemption of investment securities 2,320 2,648

Other, net 72 150

Net cash used in investing activities (12,673) (9,127)


(Unit: Million Yen)

Term

Items

Fiscal Year ended

March 31, 2016

Fiscal Year ended

March 31, 2017

III. Cash Flows From Financing Activities

Increase in short-term borrowings, net 12,716 24,439

Increase in commercial paper 41,000 45,000

Increase in long-term debt 156,862 119,667

Repayment of long-term debt (192,753) (173,101)

Proceeds from securitized lease receivables 10,133 10,705

Repayment of securitized lease receivables (7,502) (9,980)

Proceeds from issuance of bonds 20,000 20,000

Redemption of bonds (15,000) (10,000)

Cash dividends paid (947) (926)

Cash dividends paid to non-controlling interests (8,832) (3,033)

Proceeds from stock issuance to non-controlling

shareholders 2,805 6,069

Net cash provided by financing activities 18,482 28,839

Foreign currency translation adjustments on cash and

cash equivalents (428) (591)

IV. Net increase (decrease) in cash and cash equivalents (12,623) 13,254

V. Cash and cash equivalents at beginning of year 43,200 30,577

VI. Cash and cash equivalents at end of year 30,577 43,831

nec capital consolidated financial results for the fiscal...

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