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Frequently Asked Questions

The following are our responses to frequently asked questions:

Questions about Company information

Q: What market are you listed on? What is your securities code?

A: We have been listed on Jasdaq, Osaka Securities Exchange since March 2003.
Our security code is 2315.

Q: What type of business do you have?

A: We are in the information and communications business.

Q: How can I make inquiries or request documents?

A: You can make inquiries and request documents here.

Q: Where do your announcements appear?

A: The Articles of Incorporation were changed by a resolution adopted at the annual Shareholders’ Meeting held on June 27, 2005 to allow the Company to post online announcements on its website.
Announcements will also be printed in The Nikkei Shimbun in the event of a problem or other contingencies preventing online announcements.

Q: What are your views on corporate governance?

A: We regard the stable and long-term improvement of corporate value as our management goal, and we believe that responding to expectations and winning the trust of all shareholders and investors, business partners, employees and many other stakeholders is the foundation for continued growth for the SJ Group.
For this reason, we have made improving corporate governance an important management goal, and we are adopting structures and policies designed to comply with laws and ordinances, clearly define corporate ethics, take swift and precise decisions, administer the business in an effective manner, and reinforce audits and supervisory functions.

Q: What measures do you take against hostile takeovers?

A: Our basic policy for preventing hostile takeovers is to gain the trust of the market by improving management efficiency and increasing the dividend payout ratio. To detect signs of a hostile takeover, we watch the daily price fluctuations and trading volume of the Company stock and occasionally check shareholder composition.

Q: Are you considering listing your stock on the First or Second Section of the Tokyo
Stock Exchange?

A: Yes, we are, but we do not have any specifics plans at the current time.

Q: What was the aim behind making LianDi Clean Technology Inc. a subsidiary?

A: LianDi Clean Technology Inc. ("LNDT," hereafter) engages in (1) the sale of various equipment and facilities; (2) the provision of control software; (3) the provision of oil tank cleaning services; and (4) the manufacture and sale of petrochemical products for the oil industry, primarily serving the largest energy groups in China. LNDT posted healthy business results for the previous period (fiscal year ended March 2011), with consolidated sales of 12,072 million yen and consolidated net income of 2,069 million yen.
We decided to make LNDT a subsidiary because we determined that doing so would contribute to the business expansion of our Group in China, based on the fact that (1) we can expect to secure business opportunities in the Chinese oil industry, which features a large market size as well as high growth potential; and (2) we can leverage the strengths of SJI in the control software development that LNDT is addressing.

Questions about operations

Q: What are your management philosophy and management policy?

A: Our management philosophy and management policy are as follows:
<Management philosophy>
The SJ Group hopes to contribute to quality of life by respecting the individuality of each and every one of its employees, by bringing together expertise based on technology and experience, and by providing satisfactory services to its customers.
<Management policy>
The SJ Group aims to become a good corporate citizen that people can genuinely trust and rely on by striving to resolve all issues related to our customers’ core businesses.

Q: What is your long-term management goal?

A: The main pillar of our long-term management goal is to establish a unique structure, with operating bases in both Japan and China, to accelerate upstream process development on the basis of the advanced technologies that are a feature of the SJ Group.
By taking advantage of the synergies of our operating bases in both Japan and China, we aim to become a corporate entity that can respond quickly to market needs in both countries.
In doing so, we hope to provide outstanding services to customers and contribute to the quality of life mentioned in the management philosophy above.

Q: To which financial data does the Company attach the greatest importance?

A: We consider all financial data important, since it all has significance, but we attach particular importance to the ratio of operating profit to sales.
We endeavor to manage the Group so that we can maintain sales growth and can secure a high ratio of operating profit to sales.

Q: Please describe your business operations.

A: For information about business operations, please click here.

Q: I have heard that your system development method is unique. Could you tell me how it is unique?

A: The SJ Group has developed a distributed development system in Japan and China.
It is not a vertical development system, or the so-called U.S.- India system, where the development process is divided into upstream and downstream processes and only the downstream process is outsourced to China. Instead, it is a system where Japanese and Chinese collaborate throughout nearly the entire process. The SJ Group has spent the last 15 years accumulating the know-how needed to create this system.
This system became possible because the founders of the Company were Chinese computer science students, sponsored by the Chinese government, and the present management is well versed in the cultures, languages, and business practices of both Japan and China.
The system allows us to take full advantage of competent Japanese and Chinese staff and to provide sophisticated systems for low overall costs.

>>Click here for further details

Q: How do you regard the risks of the Chinese market?

A: Some risk is involved in the markets of every country. Risks used to be particularly high in China, because there were many market regulations, which changed frequently.
The risks have been reduced to a great extent, however, as the Chinese economy has been incorporated into the world economy and China has understood that it would not succeed unless it changed its traditional model.
We expect the Chinese economy to grow at the present pace for some time, despite the uncertainties. We therefore believe that, despite the risks, there will be an increasing advantage to having operations in China.

Q: What effects will a revalued renminbi have on your results?

A: There will be two effects on the SJ Group.
First, since the operating companies in Japan place orders with companies in China, a revalued renminbi will increase costs and thus have a negative impact on results.
Second, if the renminbi is revalued, both sales and profits will rise when they are translated into yen. This is a positive effect.
We aim to mitigate the first effect as far as possible and enjoy the second effect. We believe that we will be able to offset the increased costs of the first effect with improvements in productivity if the revaluation of the renminbi is within 50%.
Meanwhile, we will form a business structure that will not be easily affected by exchange fluctuations by increasing the weight of sales by operating companies in China to the Chinese market.

Q: What are your M&A policy and plan?

A: We have two policies.
One is that the other company is in good financial health. The other is that a merger or acquisition must bolster the expertise and overall strength of the SJ Group and generate business synergy.
With regard to operations in China, we will carefully consider investing in companies that are expected to grow rapidly.
We will disclose M&A plans as soon as they can be announced under JASDAQ , Osaka Securities Exchange disclosure regulations.

Q: Please tell us about developments in the business partnership with the Digital China Group.

A: With respect to the business partnership with the Digital China Group, we are now in the midst of integrating specific businesses based on the partnership agreement concluded in November 2009.
Providing excellent Japanese IT solutions to China is a mainstay of the partnership, but this will be achieved only after the management consensus on all conditions of the Digital China Group and major Japanese corporations, and we have found that there are some areas where it is difficult to control progress.
When we are ready to announce specific results with respect to this partnership, we plan to make a timely announcement using the appropriate methods.

Q: What was the aim behind making LianDi Clean Technology Inc. a subsidiary?

A: LianDi Clean Technology Inc. ("LNDT," hereafter) engages in (1) the sale of various equipment and facilities; (2) the provision of control software; (3) the provision of oil tank cleaning services; and (4) the manufacture and sale of petrochemical products for the oil industry, primarily serving the largest energy groups in China. LNDT posted healthy business results for the previous period (fiscal year ended March 2011), with consolidated sales of 12,072 million yen and consolidated net income of 2,069 million yen.
We decided to make LNDT a subsidiary because we determined that doing so would contribute to the business expansion of our Group in China, based on the fact that (1) we can expect to secure business opportunities in the Chinese oil industry, which features a large market size as well as high growth potential; and (2) we can leverage the strengths of SJI in the control software development that LNDT is addressing.

Questions about settlement and financial information

Q: Please describe the changes in the financial data?

A: Click here.

Q: What are your dividend policy and dividend results?

A: We place top priority on our management policy of distributing profits to shareholders. Bearing in mind the increase in operating capital following the expansion of the scale of operations, and also the replenishment of internal reserves to prepare for strategic investment aiming to further reinforce our corporate foundations, we are giving comprehensive consideration to business strategies, financial conditions, and profit levels. We regard the continuous redistribution of profits as a fundamental policy.
To see our dividend results, click here.

Questions about IR

Q: What presentations does the Company make to individual investors?

A: The Company holds irregular presentation meetings for private investors.Investors who cannot participate in the meetings can obtain the documents used in the presentation meeting and a summary of the presentation on the Company's website in Japanese.

Q: What are your views on IR?

A: IR activities are conducted primarily by the Administrative Division. We believe that the most important thing in IR is to disclose accurate information in a timely and easy-to-understand manner.
IR is the contact point between shareholders and corporate activities. IR should be interactive, so that shareholders are able to understand the Company, and shareholders’ opinions are reflected in Company management.

Questions about shares

Q: I would like to conduct some business concerning the company’s shares. Please give
me the contact information.

A: The Stock Transfer Agency Department of the Mizuho Trust & Banking Co., Ltd. handles such procedures, including changes of address, transfers of shares, and changes in registered seals.
Please ask Mizuho Trust & Banking Co., Ltd.
Inquiries by post or telephone
　　 Stock Transfer Agency Department
　　 Mizuho Trust & Banking Co. Ltd.
　　 1-17-7 Saga, Koto-ku, Tokyo 135-8722
　　 Tel: 0120-288-324 (toll-free)

Q: Do you pay interim dividends?

A: No, we do not.

Q: How can I receive a dividend warrant?

A: Please ask Mizuho Trust & Banking Co., Ltd.
Inquiries by post or telephone
　　 Stock Transfer Agency Department
　　 Mizuho Trust & Banking Co. Ltd.
　　 1-17-7 Saga, Koto-ku, Tokyo 135-8722
　　 Tel: 0120-288-324 (toll-free)

Q: Do you have any special benefit plans for shareholders?

A: No, we do not.

Q: What are your views on stock prices?

A: Stock market prices are formulated by various judgments made in the course of market transactions. Since various factors affect stock prices, including the stock market environment and the numbers of outstanding shares, there are varying views about stock prices.
We believe the best policy is to strive to be highly regarded by investors in both the medium- and long-terms. To this end, the SJ Group will do its best to improve business results.

Q: What is your share price policy?

A: Our basic policy is to encourage investor understanding through comprehensible and timely IR.
If we discover any actions that may distort proper price formation in a sound market, including rumors, we will investigate them and take necessary actions including reporting them to the Securities and Exchange Surveillance Commission.

Q: Stock prices seem to have fallen because of investor speculation. What actions does the Company take against such speculation?

A: Since investors in individual market transactions are generally not disclosed except in large volume disclosure documents, it is difficult to obtain information on individual transactions.
If we discover actions with the potential to distort proper price formation in a sound market, including actions to manipulate prices, we will investigate them and take necessary actions including reporting them to the Securities and Exchange Surveillance Commission.

Q: Please describe your stock split plan.

A: Improving the liquidity of Company shares and increasing the number of shareholders are important challenges in our capital policy. To reduce the investment unit, we carried out a 5-to-1 stock split on May 20, 2005. We believe that the current share price is at an appropriate level, but we will continue to consider stock splits, taking share prices trends into account.