60 years and beyond - クレジットカードのジャッ … lineup. in new businesses, jaccs...
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Profi le
JACCS Co., Ltd., started out as Depart Sinyohanbai Co., Ltd., in Hakodate,
Hokkaido, in 1954. In the 60 years since then, JACCS has continued to
expand its business nationwide in Japan under a founding philosophy that
values trust and reliability. With a total volume of new contracts exceeding
¥2,784 billion, JACCS is one of the leading names in Japan’s consumer
credit sector.
JACCS issues standard credit cards under the Visa, MasterCard,
and JCB brands, and has a membership base of approximately 6,800
thousand cardholders, including those with cards from affi liate partners.
JACCS became a member of Mitsubishi UFJ Financial Group, Inc.
(MUFG), in 2008 through a third-party allocation of new shares.
In April 2012, JACCS launched a new three-year medium-term
business plan, “ACT11.” This plan sets a medium- to long-term vision
of becoming “an innovative consumer fi nance company with its roots
in Japan,” and targets “accelerating growth by turning around and
expanding operating revenue (top line).” ACT11 encompasses the
revitalization of JACCS’ existing businesses, the acceleration of overseas
business expansion, and the development of new businesses.
In overseas operations, the JACCS Group commenced with the
provision of motorcycle loan services in Vietnam in 2010, and continued
its expansion in the ASEAN region through the launch of business
operations in Indonesia in 2013, where it is progressively increasing its
product lineup. In new businesses, JACCS entered the prepaid card
business in 2013.
• With core businesses focused on the consumer credit industry, JACCS continuously strives for excellence in its credit systems.
• JACCS helps consumers realize rich, satisfying lives.
• JACCS contributes to the enhancement of its business partners’ operating performance.
• JACCS approaches all tasks with enthusiasm and good faith.
Management Principles
Focusing management
resources on growth in
our three core operations
Developing our overseas
operations and
new businesses
CreditBusiness
FinancingBusiness
Credit CardBusiness
OverseasOperations
NewBusinesses
To coincide with the 60th anniversary of JACCS’ founding, the
Company introduced a new corporate logo design, replacing
the logo it has used for 38 years since adopting its current
corporate name. The new logo was launched in April 2014.
The new design incorporates elements that express
modernity, innovation, and speed, each of which is a feature
of JACCS’ long-term vision.
The financial data and other business-related information in this publication has been prepared to inform JACCS stakeholders about the business. Any
forecasts regarding future performance contained in these materials are based on estimates and the best judgments of the Company, without guarantee or
security. Readers are advised not to make investment decisions based solely on the information contained in these materials. All business and financial data
relate to the consolidated operations of the Company, unless otherwise noted.
FORWARD-LOOKING STATEMENTS
ContentsGrowth Trajectory 2
Progress of 2014 4
Five-Year Financial Highlights 5
Operational Highlights 5
To Our Stakeholders 6
Expanding Market Presence in Indonesia 9
Creating New Businesses 11
Review of Operations 12
Corporate Governance 16
Founders / Board of Directors and Audit & Supervisory Board Members 18
Executive Offi cers 19
CSR Activities 20
Financial Information 21
Corporate Directory 50
Investor Information 51
JACCS CO., LTD. | Annual Report 2014 1
Growth Trajectory
60 YEARSAND BEYOND
JACCS was founded in June 1954 as Depart Sinyohanbai Co., Ltd., in Hakodate, Hokkaido.
The Company celebrated its 60th anniversary in June 2014.
Looking back over the most recent decade, the Company has faced a range of challenges
in its operating environment. These have included changes in laws covering the credit industry,
reductions in the maximum allowable interest rates, and claims for the repayment of excess
interest, which have had a severe effect on the entire industry.
Against this backdrop, in the fiscal year ended March 31, 2008, the Company formed
a business and capital alliance with The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU), and
Mitsubishi UFJ NICOS Co., Ltd., and became an equity-method affiliate of BTMU. JACCS
also focused on further strengthening its management structure to ensure adaptability to
environmental change. This included an overhaul of the Company’s cost structure and the
Th e essence of JACCS’ founding philosophy is expressed in these Chinese characters, which may be translated as,
“Trust is the basis for all.” Since JACCS’ establishment, we have remained faithful to our founding philosophy—a
strong belief that trust and reliability form the cornerstone of all our activities, taking precedence in our relationships
with consumers and business partners.
JACCS’ Founding Philosophy
June 1954Depart Sinyohanbai Co., Ltd., established in Hakodate,
Hokkaido, with paid-in capital of ¥3.3 million. Began monthly
installment credit service for use at department stores based
on the issuance of installment-shopping coupons to members
who have joined through their workplace
Apr. 1989Began issuing internationally accepted
credit cards, JACCS Visa Card and
JACCS MasterCard
July 1959To coincide with the 5th anniversary
of establishment, the Company’s
name was changed to Kitanihon
Sinyohanbai Co., Ltd.
Dec. 1959Began a credit guarantee service for
fi nancial institutions, the fi rst service of
its type in Japan
Mar. 1969In collaboration with large manufacturers,
began providing a full-fl edged shopping
credit service
July 1972Established the Tokyo Offi ce (currently
the Tokyo Branch) as the Company’s
fi rst presence in the Kanto region
Apr. 1973Shares listed on the Sapporo
Securities Exchange
Aug. 1975Head offi ce functions transferred to Tokyo
Apr. 1976Company name was changed
to JACCS Co., Ltd.
Sept. 1978Listed on the First Section of the Tokyo
Stock Exchange
Apr. 1983Established the Housing Loan Center
(currently the Tokyo Housing Loan Center)
1950 1970 19801960
Sapporo Securities Exchange
Tokyo head offi ce JACCS’ fi rst internationally
accepted credit cards
Corporate brochures
JACCS CO., LTD. | Annual Report 20142
implementation of strategies to improve business profitability.
In fiscal 2013, on a non-consolidated basis, the Company recorded an increase in total operating
revenue for the first time in seven fiscal years, and began to see other positive signs that it was on the
path to achieving sustainable profit growth. JACCS also worked to accurately meet customer needs
through the accelerated development of its overseas operations and the creation of new businesses.
These moves were part of strategic initiatives designed to pave the way for dynamic growth.
Underpinned by JACCS’ founding philosophy, the Company is striving to realize the medium-
to long-term vision of becoming “an innovative consumer finance company with its roots in Japan.”
As the Company looks toward its 70th and 80th anniversaries, and further ahead to its centenary,
everyone at JACCS is committed to achieving steady progress toward the Company’s vision and goals.
Jan. 1991Began issuing JACCS JCB Card
Nov. 1994Head offi ce transferred to the Company’s
new main building, Ebisu Neonato, in
Shibuya-ku, Tokyo
May 2001Began operating a state-of-the-art core
computer system called JANET, the fi rst
such online system in the industry to run
24-hours-a-day, 365-days-a-year
June 2004Celebrated the 50th anniversary of
JACCS’ establishment
Mar. 2008JACCS became an equity-method affi liate
of The Bank of Tokyo-Mitsubishi UFJ,
Ltd., through a third-party allocation of
new shares
Apr. 2008Took over the shopping credit business of
Mitsubishi UFJ NICOS Co., Ltd.
June 2010Established overseas subsidiary JACCS
International Vietnam Finance Co., Ltd.
Dec. 2012Acquired a 40% equity stake in
Indonesian company PT Sasana Artha
Finance
June 2014Celebrated the 60th anniversary of
JACCS’ establishment
May 2014Newly merged PT Mitra
Pinasthika Mustika Finance
(MPMF) commenced operations
Apr. 2014Renewal of the corporate logo
200
150
100
50
0 2006 2007 2008 2009 2010 2011 2012 2013 2014
Medium-term
business plansGrowing 1 VIC10 ACT11
Reinforcement of business foundations
Turnaround
Billions of Yen
2015Target
1990 2000
Current Tokyo head offi ce, Ebisu Neonato JANET
Signing ceremony for the MPMF
merger agreement
Total Operating Revenue
Gearing up for the Next
Ceremony to commemorate
JACCS’ 60th anniversary
JACCS CO., LTD. | Annual Report 2014 3
Progress of 2014JACCS CO., LTD. and Consolidated Subsidiaries
Year ended March 31, 2014
Number of JACCS Cardholders
6,828 thousand
-6.2%
Volume of New Contracts:Credit Card
¥899.9 billion
14.4%
Total Volume of New Contracts
¥2,784.5 billion
12.3%
Volume of New Contracts:Installment Sales Finance
¥293.0 billion
38.5%
Volume of New Contracts:Credit Guarantee
¥687.6 billion
8.0%
Volume of New Contracts:Financing
¥79.0 billion
-4.8%
Total Operating Revenue
¥104.1 billion
1.1%
Operating Income
¥12.2 billion
30.0%
Ordinary Income
¥12.2 billion
4.1%
Net Income
¥6.5 billion
-14.9%
Net Income Per Share
¥37.71
-13.7%
Cash Dividends Per Share
¥14.00
27.3%
JACCS CO., LTD. | Annual Report 20144
Millions of YenThousands ofU.S. Dollars
Years ended March 31 2010 2011 2012 2013 2014 2014
Summary of operations for the year:
Number of JACCS cardholders (Thousands) 9,920 9,601 8,419 7,281 6,828 —
Total volume of new contracts ¥2,316,012 ¥2,328,294 ¥2,387,501 ¥2,480,470 ¥2,784,532 $27,299,333
Volume of new contracts: Credit card 704,064 738,947 749,720 786,669 899,957 8,823,107
Volume of new contracts: Installment sales fi nance 241,957 227,300 230,352 211,539 293,029 2,872,833
Volume of new contracts: Credit guarantee 515,934 551,465 603,873 636,770 687,669 6,741,852
Volume of new contracts: Financing 178,181 118,673 86,418 83,022 79,010 774,607
Volume of new contracts: Other operations 675,874 691,907 717,136 762,469 824,866 8,086,921
Total operating revenue 127,101 116,241 107,384 102,950 104,134 1,020,921
Operating income 8,845 3,137 10,972 9,413 12,236 119,960
Ordinary income 10,433 5,479 13,271 11,750 12,238 119,980
Net income 3,569 4,398 6,822 7,642 6,504 63,764
At year-end:
Total assets ¥2,827,806 ¥2,786,288 ¥2,725,816 ¥2,718,518 ¥2,896,405 $28,396,127
Total net assets 103,273 105,261 111,348 117,486 122,712 1,203,058
Yen U.S. Dollars
Per share data:
Net income ¥ 20.39 ¥ 25.12 ¥ 38.97 ¥ 43.72 ¥ 37.71 $0.36
Net assets 589.74 601.13 636.17 678.38 715.38 7.01
Cash dividends 5.00 5.00 10.00 11.00 14.00 0.13
Note: The U.S. dollar amounts in this report represent translations of Japanese yen, for convenience only, at the rate of ¥102= U.S.$1.00, the prevailing approximate exchange rate at March 31, 2014.
Operational Highlights
Five-Year Financial Highlights
2013
AprilBegan issuing Japan’s fi rst offi cial Ferrari-branded credit card. Cardholders enjoy special benefi ts, including discounts when making purchases at
Ferrari S.p.A.’s offi cial online store.
JuneLaunched a business collaboration with The Shikoku Bank, Ltd., involving guarantees for personal loans specifi cally catering to seniors receiving a
pension. The product is designed so that loan repayments are made in months when pension payments are received (even-numbered months).
JuneCollaboration with Visa Worldwide (Japan) Co., Ltd., and Citibank Japan, Ltd., in the prepaid card business. In July, began issuing Japan’s fi rst multi-
currency prepaid card.
SeptemberCommenced a business collaboration with The Bank of Yokohama, Ltd., involving guarantees for a personal unsecured loan product that covers
auto loans, education loans, and home renovation loans.
NovemberCommenced in-store credit card membership applications using tablet computers. By moving to a paperless system, security is enhanced in the
management of personal information and the operational burden of application processing is reduced.
December
Commenced the industry’s fi rst rent guarantee system to include insurance for tenant suicide and solitary death. The rent guarantee system is
combined with Owner’s Safety* and fi re insurance.* Note: Owner’s Safety is an insurance product covering the event of a solitary death, suicide, or death due to crime within a rented housing property. The insurance provides the property
owner with indemnifi cation for rent loss due to property vacancy and costs to restore the property to its original state. The insurance product was developed by ACE Insurance.
2014
FebruaryReorganized the Group’s Indonesian fi nance company with the aim of expanding the sales network and service lineup. (Please refer to the special
feature on page 9 for details.)
FebruaryAlliance with Kakaku.com, Inc. Began issuing REX CARD Lite, which does not incur annual membership fees and has one of the highest loyalty point-earning
ratios of any Japanese credit card.
FebruaryBegan issuing “The Beatles Club Membership Card” on behalf of the official Beatles fan club in Japan. The membership card includes a
credit card.
MarchBegan issuing the Visa TravelMoney “Gonna” prepaid card, which includes foreign currency exchange functions. (Please refer to the special feature
on page 11 for details.)
JACCS CO., LTD. | Annual Report 2014 5
To Our Stakeholders
Operating Performance: Increase in Operating Revenue Coupled with Significant
Progress in Business Development
In fiscal 2013, ended March 31, 2014, JACCS achieved a turnaround in operating revenue, while both
operating income and ordinary income also increased.
We addressed key tasks in each of the Group’s three main businesses—the credit business, credit
card business, and financing business—and worked to expand new business partnerships and further
deepen existing partnerships. Driven by expectations generated by the economic program of Prime
Minister Shinzo Abe’s administration (often referred to as “Abenomics”) as well as extra demand in the
lead-up to the increase in the consumption tax rate, the total volume of new contracts grew steadily.
These factors contributed to the realization of a turnaround in the Group’s top line (operating revenue).
In the Group’s overseas operations, consolidated subsidiary JACCS International Vietnam Finance
Co., Ltd. (JIVF), expanded its sales territory, leading to an increase in motorcycle dealers joining its
member network as well as a rise in the number of loans handled. In Indonesia, the Company’s equity-
method affiliate PT Sasana Artha Finance (SAF) agreed in February 2014 to a merger with finance
company PT Mitra Pinasthika Mustika Finance (MPMF). The latter company is a member of the corporate
JACCS CO., LTD. | Annual Report 20146
group led by JACCS’ Indonesian business partner PT Mitra Pinasthika Mustika (MPM). Through this
merger, in addition to the motorcycle sales finance business, JACCS’ Indonesian operations will be able to
expand into the auto sales finance business and the leasing business. For further details on initiatives in
the Group’s Indonesian business, please refer to page 9 of this report.
In fiscal 2013, we made substantial progress in the development of new businesses. In July 2013,
we began issuing a prepaid card specifically for overseas use, called Visa TravelMoney “Gonna.” We
followed this up in March 2014 by commencing the issue of a new version of Visa TravelMoney “Gonna”
with expanded functions, including foreign currency exchange and shopping functions that can be used
at Visa-affiliated merchants both in Japan and overseas. This marked progress in our expansion of the
cashless settlement business. For further details on initiatives in the Group’s new businesses, please refer
to page 11 of this report.
As a result of the factors outlined above, on a consolidated basis, the total volume of new contracts
increased 12.3% compared with the previous fiscal year, to ¥2,784,532 million, total operating revenue
rose 1.1%, to ¥104,134 million, and ordinary income increased 4.1%, to ¥12,238 million. Accompanying
the absorption-type merger with consolidated subsidiary JNS Collection Service Co., Ltd., on April 1,
2013, the Company reversed a portion of its deferred tax assets. As a result, there was an increase in
income taxes-deferred, and net income decreased 14.9% compared with the previous fiscal year, to
¥6,504 million.
Progress in the Second-Year of ACT11: Turnaround in Operating Revenue
Under JACCS’ three-year medium-term business plan “ACT11”—spanning the three fiscal years from
April 1, 2012, to March 31, 2015—we have set three core policies:
• Accelerating growth by turning around and expanding operating revenue (top line)
• Further strengthening our management structure to ensure adaptability to environmental change
• Continuously enhancing our compliance system
Total Operating Revenue
2013 2014 2015Target
150
120
90
60
30
0
(Billions of Yen)
104.1102.9 106.9
Ordinary Income
2013 2014 2015Target
15
12
9
6
3
0
(Billions of Yen)
12.211.712.6
JACCS CO., LTD. | Annual Report 2014 7
In fiscal 2013—the second year of “ACT11”—with regard to the first core policy, we achieved a
turnaround in operating revenue driven by such factors as an increase in shopping credits in the credit
business, an expansion in auto loans in the credit business, an increase in the volume of new contracts
and the balance of revolving payments in the credit card business, and a build-up in the balance of loan
guarantees for banks in the financing business.
With regard to the second core policy, through progress in enhancing the quality of our credit
portfolio, we achieved a decrease in bad debt-related expenses for the second consecutive fiscal year.
A build-up in the balance of deferred installment income also contributed to progress in the further
strengthening of our management structure.
With regard to the third core policy, we implemented such measures as the establishment of the
compliance credit control center in February 2014 and other initiatives to build an advanced compliance
system, the preparation of a Business Continuity Plan (BCP) and the implementation of related
training programs to strengthen our business continuity system, and the promotion of corporate social
responsibility (CSR) through various programs that contribute to society.
Outlook for Fiscal 2014, Ending March 31, 2015
In the fiscal year ending March 31, 2015—the final year of “ACT11”—we are shifting our focus from
a turnaround to an expansion in operating revenue, as we gear up for the next stage of growth.
To accomplish this shift to a new growth phase, within the credit business, in shopping credits
JACCS is undertaking measures to expand its lineup of Web-based products, including through the
development of new Web products and quality enhancement of existing Web products. In addition, we
are working to further expand the volume of new contracts in housing-related products by bolstering
the volume of housing renovation loans and other measures. In the auto loan field, JACCS is aiming to
expand its market share by increasing the volume of new contracts in strategic products—such as the
“WeBBy Auto” loan application service—and by rolling out various initiatives targeting auto dealers.
In the credit card business, we are implementing such measures as a strategy of developing
relationships with new business partners that are likely to provide opportunities to expand the number
of high-usage card members, the development of concept cards, and the build-up of the balance of
revolving payments.
In the financing business, in personal loan guarantees for banks, we are targeting an increase in
the balance of guarantees by strengthening our alliance with The Bank of Tokyo-Mitsubishi UFJ, Ltd.,
and other measures. In housing loan guarantees, we will work to maintain a balance of loan guarantees
over one trillion yen and retain our top market share. In bill collection services, we are striving to secure
stable revenue by increasing the number of invoices handled based on a strategy targeting the regular bill
payment market.
In new businesses, the Group is looking to enter the market for deferred-payment settlement
services and is promoting its prepaid card business.
In overseas operations, in Vietnam we are implementing strategies to increase the volume of
In Indonesia, through a reorganization of our affiliated finance
company, we will enter the auto sales finance business.
JACCS CO., LTD. | Annual Report 20148
Expanding Market Presence
in IndonesiaJACCS is accelerating its overseas business development focusing on
the Asia region. In fiscal 2013, JACCS reorganized its Group finance
company in Indonesia with the aim of expanding operations there.
Merger of PT Sasana Artha Finance and PT Mitra Pinasthika
Mustika Finance
In 2012, JACCS acquired a 40% equity stake in Indonesian finance
company PT Sasana Artha Finance (SAF), and began participating in
the company’s management. In February 2014, JACCS reached an
agreement with its Indonesian business partner, PT Mitra Pinasthika
Mustika (MPM), regarding the merger of SAF and PT Mitra Pinasthika
Mustika Finance (MPMF), a finance company within the MPM Group.
MPMF was made the surviving entity of the merger, and JACCS agreed
to acquire new shares issued by MPMF based on a further investment
of 510 billion rupiahs (¥4.5 billion). Through this transaction, JACCS
retained a 40% equity stake in the merged entity. In May 2014, the
newly merged company commenced operations, and MPMF appointed
two directors from JACCS as part of its participation in the company’s
management.
Entry into Auto Sales Finance and Expansion of Operations
to Cover All of Indonesia
The newly merged company has total assets of over ¥45.0 billion,
making it one of Indonesia’s largest finance companies with an
extensive sales network covering the entire country. Previously, SAF
was focused mainly on the eastern Java region, primarily providing
sales finance for Honda motorcycles. Through the merger with MPMF,
which has sales finance and lease operations throughout Indonesia, the
company will work to further increase the scale of its operations and
maximize synergies. This will specifically involve ongoing growth in the
Honda motorcycle sales finance business, and sales finance for Nissan
automobiles—a business that MPM has newly entered. The Indonesian
automobile market is very large, reaching 1.2 million units sold in 2013.
By the end of 2016, JACCS forecasts that total assets of the merged
company will reach ¥80.0 billion, or 1.7 times the current level. MPMF
aims to become one of Indonesia’s top-10 finance companies.
The Indonesian Market and MPM
Indonesia is the world’s fourth most populous country, with 247 million
people. Over the medium to long term, domestic demand is anticipated
to expand and the country is expected to record significant economic
growth. JACCS’ business partner, MPM, is affiliated with Saratoga,
one of Indonesia’s leading corporate groups, and is broadly developing
its business in the area of automobiles, motorcycles, and related
operations.
Summary of PT Mitra Pinasthika Mustika Finance
・ Head office: Jakarta
・ Establishment: May 3, 1990
・ Principal businesses: 1. Motorcycle and auto sales
finance (installment finance); 2. Finance leases
・ Capital: 1,224 billion rupiahs (¥10.6 billion)
・ Number of employees: 2,878
Indonesia: Key Facts
• Population: 247 million (2012)
• Land area: Approx. 1.89 million square kilometers
• Real GDP growth rate: 5.8% (2013)
Source: Ministry of Foreign Affairs of Japan
Number of automobiles sold (2013):
1,229,901 units (10.2% year-on-year growth)
Source: The Association of Indonesian Automotive Industries (GAIKINDO)
Number of motorcycles sold (2013):
7,743,879 units (9.6% year-on-year growth)
Source: Indonesian Motorcycles Industry Association (AISI)
PT Mitra Pinasthika Mustika Finance
(as of June 30, 2014)
JACCS CO., LTD. | Annual Report 2014 9
motorcycle sales finance handled, while expanding our product lineup and sales territory. In Indonesia,
through a reorganization of our affiliated finance company, we will enter the auto sales finance business.
Based on the measures outlined above, for fiscal 2014, ending March 31, 2015, on a consolidated
basis we have set management targets of achieving operating revenue of ¥106,900 million, along with
ordinary income of ¥12,600 million, and net income of ¥7,600 million.
Delivering Shareholder Value, Celebrating JACCS’ 60th Anniversary
The Company sees stable shareholder return as a key management issue. Simultaneously, we also
recognize that shareholder return must be in line with business performance. Hence, our basic policy
regarding profit distribution strives to reinforce our financial base and keep adequate internal reserves
while implementing dividends based on a comprehensive evaluation of such factors as net income,
financial position, and payout ratio.
In June 2014, JACCS celebrated the 60th anniversary of its founding. Our reaching this milestone
was primarily thanks to the cooperation of our shareholders and all other stakeholders, and we wish to
convey our sincere gratitude for this support. As an expression of this appreciation to our shareholders,
in fiscal 2013 the Company implemented a commemorative dividend of ¥2.00 per share. As a result,
the year-end dividend of ¥8.00 per share comprises an ordinary dividend of ¥6.00 per share along with
the aforementioned commemorative dividend. Consequently, the cash dividend applicable to fiscal 2013
totaled ¥14.00 per share, including an interim dividend of ¥6.00 per share.
Gearing Up for the Next Stage
JACCS is pursuing growth across all spheres of its operations—the credit business, credit card business,
financing business, overseas operations, and new businesses. In fiscal 2014, we will complete “ACT11,”
the Group’s three-year medium-term business plan. We are also striving to realize our medium- to long-
term vision of becoming “an innovative consumer finance company with its roots in Japan.” As we work
to achieve these goals, we look forward to the ongoing support and understanding of our shareholders,
investors, customers, partner companies, and local communities.
August 2014
Yasuyoshi Itagaki
President, CEO, COO and Representative Director
We are looking to enter the market for deferred-payment
settlement services and are promoting our prepaid card business.
JACCS CO., LTD. | Annual Report 201410
Creating New BusinessesAggressively Promoting New Businesses
Under JACCS’ three-year medium-term business plan “ACT11,” one of the Group’s key strategies is the development of new businesses. As part of
this strategy, the Group is aggressively developing new products in such areas as prepaid cards and deferred-payment settlement services, and is
launching a range of products in the market.
Prepaid Card Business
JACCS has developed a new product called “Tametoku Prepaid,” which includes bill collection and prepaid card
functions—the first service of its type in Japan. It is designed to be used for the purchase of goods with a high unit price
and low purchase frequency, and operates on a system whereby a fixed amount of money is transferred monthly from the
card member’s bank account to the prepaid card over a pre-determined period of time (approximately 1–3 years). As an
example of customization of the “Tametoku Prepaid” product, in June 2014 JACCS began issuing “Tametoku10” as an
original prepaid card for partner company CarBell Co., Ltd. This is a prepaid card designed specifically for the purchase
of an automobile, and is the first case of such a product being launched in the auto sales industry in Japan. As a premium
service for card members, when funds are automatically transferred each month to replenish the card’s balance, the
member receives a high bonus—equivalent to 10% of the transferred amount. JACCS intends to roll out “Tametoku
Prepaid” for a wide range of high-unit-price product categories.
Prepaid Cards Featuring Foreign Currency Exchange Functions
In July 2013, JACCS began issuing Visa TravelMoney “Gonna”—Japan’s first multi-currency prepaid card. This card is
based on Visa TravelMoney offered by Visa Worldwide (Japan) Co., Ltd., but features multi-currency use as an extra level
of functionality provided by JACCS. In March 2014, JACCS added new functionality to the card, including foreign currency
exchange and shopping functions that can be used at Visa-affiliated merchants both in Japan and overseas. The card can
be used in over 200 countries and regions worldwide at 38 million Visa-affiliated merchants. It can also be used at over 2.1
million ATMs displaying the Visa and Plus logos. Furthermore, in May 2014 JACCS launched the “Visa TravelMoney “Gonna”
Banco do Brasil Affiliate Card,” which is the first prepaid card in Japan to offer settlement denominated in Brazilian reals.
This product is aimed at enhancing convenience for tourists travelling to Brazil, which is the host country for the 2014
FIFA World Cup and the 2016 Summer Olympics. JACCS intends to expand its range of prepaid card partner companies
to increase market penetration of the “Gonna” brand.
Deferred-Payment Settlement Services
In April 2014, JACCS began offering deferred-payment settlement services targeting the mail-order and online shopping market. This is the first
service of its type in Japan’s shopping credit and credit card industry. The name of the new service is “ATODENE.” This service allows the user to
pay for purchased goods at a convenience store, bank, or other such locations anytime up to two weeks after the receipt of goods from a mail-
order or online retailer. JACCS provides settlement on behalf of the purchaser when the goods are shipped. Through this service, the user can pay
for goods after they have arrived, and it enables users who do not have a credit card to make purchases. For retailers, the risk of non-payment is
eliminated since JACCS provides settlement on behalf of
the purchaser. In addition, the risk of order cancellation is
reduced since shipment of goods can be made immediately
after the receipt of an order. The maximum purchase
amount handled by this service is ¥54,000. In the initial
year following service launch, JACCS aims to sign up 600
retail partners, and is targeting a volume of new contracts
of ¥2,000 million.
• ATODENE Deferred-Payment Settlement System
1. Order (from a PC or mobile device)
4. Shipment of goods
8. Payment made within two
weeks at a convenience
store or other location
2. Request for credit
screening
5. Shipping slip
6. Dispatch of
Invoice
3. Credit screening result
7. Settlement of payment
for goods
Customer Affiliated Store
JACCS CO., LTD. | Annual Report 2014 11
Credit Business
Review of Operations
Further Expansion in the Web Channel, Housing-Related Fields,
Five Major Business Categories, and Auto Loan Market
Strengthening of marketing channels in major business categories
Centering on the five major business categories of home renovation and other housing-related fields,
motorcycles, jewelry, kimono, and consumer electronics, the Company enhanced its lineup of high-usability
Web-based products, and strengthened promotion activities in collaboration with partner stores as it worked to
increase its share of in-store purchases. These efforts contributed to year-on-year growth in the volume of new
contracts across all five categories.
Neo-Variable Plan
This product offers users flexibility in auto loan repayment amounts. Users are free to set their own pattern of
monthly repayments when the loan agreement is signed. After the loan is taken out, the product allows customers
to change (or extend) the number of repayments by bringing forward a portion of repayments or reducing the
monthly repayment amount. JACCS has positioned “WeBBy Auto” and “Neo-Variable Plan ” as strategic
products, and this is leading to growth in the volume of new contracts.
OverviewJACCS shopping credit supports consumers at various life stages, including in such areas as home renovation and
other housing-related fields, as well as in the purchase of jewelry, educational, bridal, and healthcare services.
JACCS also offers Web-based products and other products that meet changing market needs. In the auto loan field,
through partnerships with auto dealers, JACCS facilitates purchases in a broad array of vehicle categories, from
domestic and foreign new vehicles through to used vehicles.
Operating Performance (Non-Consolidated)In shopping credits, the volume of new contracts and operating revenue increased, driven by expansion in major
business categories and heightened demand in the lead-up to the rise in Japan’s consumption tax rate. There was
a turnaround in operating revenue, which rose, reflecting a higher volume of new contracts and an increase in
reversal of deferred installment income.
In auto loans, the volume of new contracts rose, driven by strengthened collaboration with auto dealers and an
increase in the number of dealerships active. Operating revenue rose, reflecting a higher volume of new contracts
and an increase in reversal of deferred installment income.
Strategy under ACT11In shopping credits, JACCS is developing a new lineup of Web-based products to enhance service quality, working
to increase the volume of housing renovation loan contracts through collaboration with housing manufacturers, and
targeting expansion in the volume of new contracts by implementing a range of sales promotion programs centered
on major business categories.
In auto loans, JACCS is implementing sales promotion measures aimed at expanding the volume of “WeBBy
Auto” contracts, working to increase its market share by planning and executing strategies targeting each category
of dealer—domestic brand, foreign brand, and used vehicles—and striving to expand the volume of “Neo-Variable
Plan ” contracts, a product that allows users flexibility in auto loan repayments.
Operating Revenuein Shopping Credits
(Non-Consolidated)
2012 2013 2014
22.0Billions of Yen
Operating Revenuein Auto Loans
(Non-Consolidated)
2012 2013 2014
15.7Billions of Yen
Key Initiatives
Yearly Growth Rate of Volume of New Contracts
in Five Major Business Categories
Home renovation and other
housing-related fields8.8%
Motorcycles 2.9%
Jewelry 21.4%
Kimono 7.0%
Consumer electronics 57.2%
JACCS CO., LTD. | Annual Report 201412
Credit Card Business
Review of Operations
Expanding the Membership Base and Promoting
Increased Card Usage
In-store credit card membership applications using tablet
computers
JACCS commenced receiving credit card applications using tablet computers
for its co-branded card with major sporting goods retailer Alpen Co., Ltd. This
program allows customers to fill out in-store applications for the Alpen Group
Card. Compared to conventional paper-based application procedures, personal information is made much more
secure through electronic encryption of data, the burden for filling out applications is reduced, and the system
contributes to a shortened period necessary for card issuance.
Dedicated department tasked with building up the balance of
revolving payments
To further build up the balance of revolving payments, JACCS established a
dedicated department (call center) to strengthen outbound / inbound programs.
OverviewIn addition to standard credit cards with attractive add-on services, JACCS also issues cards in partnership with
a wide variety of organizations and companies. Through collaborative partnerships with member stores—a key
strength that leverages JACCS’ status as an independent credit card issuer not affiliated with any particular retail
group—we focus on enhancing the value-added of co-branded cards. We are also promoting increased cardholder
use of revolving payment services.
Operating Performance (Non-Consolidated)In card shopping, ongoing promotional campaigns contributed to an increase in the average usage amount per
cardholder and led to a rise in the volume of new contracts. Increases in the volume of new contracts and the
balance of revolving payments underpinned growth in operating revenue.
The volume of new contracts from cash advances declined owing to the continued impact of regulations
concerning the total amount that individual consumers are permitted to borrow. Operating revenue from cash
advances decreased owing to declines in the volume of new contracts and the balance of cash advances.
Strategy under ACT11The core strategy of the credit card business is to expand the cardholder base. We are implementing such measures
as a strategy of developing relationships with new business partners that are likely to provide opportunities to
expand the number of high-usage card members, increasing the range of channels used for recruiting card
members, ongoing reinforcement of the infrastructure for recruiting card members through the Web, and expanding
the lineup of co-branded cards. For existing card members, we are working to stimulate card usage through
continuous promotional campaigns. We are also stepping up outbound / inbound programs, as we work to build
up the balance of revolving payments. In cash advances, we are striving to increase the volume of new contracts
through the running of sales promotion campaigns.
Operating Revenue in Credit Card Business for
Shopping
(Non-Consolidated)
2012 2013 2014
26.7Billions of Yen
Operating Revenue in Credit Card Business for
Cash Advances
(Non-Consolidated)
2012 2013 2014
14.7Billions of Yen
Number and Ratio ofActive Cardholders
2012 2013 2014
341Tens of Thousands
49.9
Number of Active CardholdersRatio of Active Cardholders
%
Key Initiatives
JACCS CO., LTD. | Annual Report 2014 13
Financing Business
Review of Operations
Pursuing Alliances with Financial Institutions and Boosting
Product Appeal
Expansion of partner financial institutions by building a
Web-based system
JACCS has built a system that leverages the particular features of the Web,
and this has enabled the Group to expand its partnerships with financial
institutions.
“Star Rent System” rent guarantee system
Targeting real estate management companies and property owners, JACCS
began offering a rent guarantee system that adds on two insurance
products—“Owner’s Safety” and “Household Contents Insurance” (please
refer to page 5). As a packaged product, this system is a first in the industry,
and JACCS is aggressively marketing it as a core rent guarantee product.
OverviewThe financing business comprises credit guarantees for personal loans extended by banks, credit guarantees for
housing loans, and bill collection services. Housing loan guarantee services specialize in mortgage guarantees on
studio-type apartments purchased for investment purposes. JACCS conducts this business specifically in Tokyo,
Osaka, and Fukuoka, where apartments have sound rental income-earning potential.
Operating Performance (Non-Consolidated)In personal loan guarantees for banks, we successfully expanded transactions with The Bank of Tokyo-Mitsubishi
UFJ, Ltd. (BTMU), and bolstered alliances with leading regional banks. As a result, the balance of loan guarantees
grew and operating revenue increased. In housing loan guarantees, we maintained a stable balance of loan
guarantees above one trillion yen. Operating revenue declined. In bill collection services, operating revenue
increased, driven by growth in the number of invoices handled.
Strategy under ACT11In personal loan guarantees for banks, we are working continuously to expand the balance of loan guarantees by
strengthening collaboration with BTMU. We are also pursuing further partnerships with leading financial institutions
by expanding our lineup of products to meet the needs of our partners.
JACCS is working to maintain its balance of housing loan guarantees at a level exceeding one trillion yen as
well as keep the top market share. We plan to undertake measures to strengthen partnerships with leading real
estate developers.
In bill collection services, JACCS is focusing on making rapid inroads into the market for regular payment
services. By developing superior, differentiated products, we are targeting rent payment collection services for real
estate management companies and membership fee collection services for fitness clubs.
Key Initiatives
Revenue fromGuarantees for Housing
Loans
(Non-Consolidated)
2012 2013 2014
15.4Billions of Yen
2012 2013 2014
3.2Billions of Yen
2012 2013 2014
2.5Billions of Yen
Revenue from Guarantees for Personal Bank Loans
(Non-Consolidated)
Revenue fromBill Collection Services
JACCS CO., LTD. | Annual Report 201414
Overseas Operations
Review of Operations
Expanding the Sales Territory in Vietnam and Striving
for Increased Business Scale in Indonesia
OverviewJACCS is currently developing businesses in Vietnam and Indonesia. In Vietnam, which JACCS entered in 2010, the
Company is expanding its operations by focusing on the motorcycle sales finance business. In Indonesia, JACCS
entered the motorcycle sales finance business in 2012, and in the fiscal year under review successfully entered the
auto sales finance business through a reorganization of local finance companies. We are providing the know-how
we have accumulated in Japan as we aim to expand our business in these regions.
Operating Performance (Non-Consolidated)In Vietnam, the number of motorcycle dealers in our sales network, the number of loans handled, and the balance of
operating receivables are all growing. The business is centered on the southern part of Vietnam, which includes Ho Chi
Minh City. We have also begun offering unsecured loans to customers who have fully paid off their motorcycle loan.
In Indonesia, we steadily grew the volume of new contracts and number of loans in the motorcycle sales
finance business.
Strategy under ACT11Consolidated subsidiary JACCS International Vietnam Finance Co., Ltd. (JIVF), plans to expand its sales territory to
include Hanoi in the northern part of the country. We are also working to expand unsecured loans to customers who
have fully paid off their motorcycle loan.
In Indonesia, we are striving for further growth driven by robust conditions in the motorcycle sales market.
Through the reorganization of local finance companies, we are aiming for greater business scale and to maximize
synergies. This includes developing an auto sales finance business covering all of Indonesia, and expanding the
sales territory of our Honda motorcycle sales finance business. We are also planning to commence handling sales
finance for Nissan automobiles.
Aggressive expansion of sales territory in Vietnam
Following the lifting of regulatory restrictions on store openings that
were implemented in October 2012, we have almost tripled the
number of dealers in our sales network year on year.
Reorganization of finance companies in Indonesia
Indonesian finance company PT Sasana Artha Finance (SAF) merged
with PT Mitra Pinasthika Mustika Finance (MPMF), and JACCS made
a new equity investment in MPMF as the surviving entity. We are
participating in the management of this company, and this has given
us a sound platform for development of the finance business in
Indonesia (please refer to page 9).
Key Initiatives
Balance of OperatingReceivables in Vietnam
2011 2012 2013
1,817Millions of Yen
(Years ended December 31)
Number of MemberStores in Vietnam
2011 2012 2013
314
(Years ended December 31)
JACCS CO., LTD. | Annual Report 2014 15
Corporate Governance
Corporate Governance Structure
Election / Dismissal Election / Dismissal Election / Dismissal
Audit & Supervisory BoardBoard of Directors
Cooperation
General Meeting of Shareholders
Cooperation
Individual DepartmentsDirectors, Executive Officers, Others
Internal Control Committee
Compliance Committee
Personal Information Protection Committee
and Others
President, CEO, COO andRepresentative Director
Audit Office
Accounting Auditor
Operational Audit
Accounting AuditManagementCommittee
Fundamental Corporate Governance PhilosophyThe Company works to maintain the trust and respond to the expectations of a
broad cross-section of stakeholders, including shareholders, business partners,
employees, consumers, and local communities. Furthermore, the Company
pursues management that places signifi cant importance on corporate social
responsibility (CSR), and believes that enhancing corporate value and
contributing to society as well as the realization of a society based on trust
are key management issues. To achieve these goals, the Company works to
increase the soundness of its business, improve transparency, and strengthen
its management control systems and audit functions, while undertaking
corporate activities in accordance with principles of social justice.
Corporate Governance Structure Under its corporate governance structure, the Company appoints a Board of
Directors and an Audit & Supervisory Board, and has introduced a system of
executive offi cers.
Board of Directors
As of June 27, 2014, the Board of Directors comprises nine members
(including two outside directors). The Board of Directors determines the
Company’s basic management policies, and makes decisions regarding
important operational matters and other matters delegated by resolution
of the General Meeting of Shareholders. The Board of Directors also makes
decisions on matters stipulated by law and the Company’s Articles of
Incorporation, and receives reports regarding the status of signifi cant
operational matters. Based on this structure, the Board of Directors oversees
the operational execution of the Company’s management. The term of
appointment for directors is one year.
Audit & Supervisory Board Members and the Audit & Supervisory Board
As of June 27, 2014, the Company had four Audit & Supervisory Board
Members (including two outside Audit & Supervisory Board Members). As
independent offi cers functioning under a mandate from the General Meeting
of Shareholders, the Audit & Supervisory Board Members audit the directors’
execution of duties. The Audit & Supervisory Board is a body that holds
discussions and makes decisions regarding the audits undertaken by the
Audit & Supervisory Board Members for the purpose of formulating opinions.
Each Audit & Supervisory Board Member utilizes the Audit & Supervisory
Board as a means of ensuring effectiveness. As a body to support the Audit
& Supervisory Board Members’ execution of duties, the Company has
established the Audit & Supervisory Board Members’ Secretariat and has
appointed dedicated staff to this body.
Management Committee
As an advisory body to the COO, the Management Committee comprises
mainly executive offi cers responsible for supervising each function of the
Company’s business organization. In principle, the Management Committee
convenes three times per month and broadly considers and debates matters
delegated by the Board of Directors, important operational matters and various
issues, as part of a system designed to facilitate expeditious execution.
Audit Offi ce
The Audit Offi ce functions as an internal auditing unit, which reports directly
to the President, CEO, COO and Representative Director and maintains
independence from the rest of the Company’s organization. As of June 27,
2014, the Audit Offi ce comprised 20 staff, including the Audit Offi ce General
Manager. The Audit Offi ce considers and evaluates overall business-related
JACCS CO., LTD. | Annual Report 201416
risk management control and the effectiveness of governance processes
at each of the Group’s operational sites, and conducts internal auditing
operations based on the Company’s internal control system policies.
Committees
• Internal Control Committee
The Internal Control Committee is tasked with establishing systems to
ensure that the Group’s operations are conducted appropriately, and has
the objective of promoting integrated and effi cient internal control and
risk management.
• Compliance Committee
The Compliance Committee has the objective of promoting business
operations within the Group that achieve an extremely rigorous level of
compliance.
• Personal Information Protection Committee
The Company acquires personal information and provides credit as part of
its business operations. For this reason, it is essential that the entire Group
works to ensure the protection of personal information. The Personal
Information Protection Committee is the Company’s highest body responsible
for matters relating to the handling of personal information.
The reason the Company adopted this corporate governance structure is to
enhance the effectiveness of the Board of Directors’ decision-making and
oversight and the Audit & Supervisory Board Members’ (Audit & Supervisory
Board) management audit functions. Furthermore, this structure clearly
defi nes the respective roles and responsibilities of directors and executive
offi cers who have a deep knowledge of the Company’s operations, and
day-to-day management. Hence, the Company believes that this structure is
optimal for facilitating autonomous, responsible, and speedy management.
Internal Control and Compliance StructureIn addition to building an expeditious and effi cient structure for operational
execution, the Company believes that strengthening the compliance system
of the entire Group and establishing a highly independent internal audit
system is extremely important. Hence, the Company has established
specialist organizational units responsible for each of these functions. The
Company has passed a resolution regarding its “Policy for the Establishment
of the Internal Control System,” and is building its internal control system
based on this policy.
Outside Directors and Outside Audit & Supervisory
Board MembersThe Company has appointed two outside directors and two outside Audit &
Supervisory Board Members.
Although the Company has not established any specifi c standards
relating to independence in the appointment of outside directors and outside
Audit & Supervisory Board Members, appointment decisions are based on
the principles that persons appointed must not have any benefi cial interests
in the Company, be able to express opinions and advice from an independent
and objective perspective so as to sustain the soundness and transparency
of the Company’s management, and must not have the risk of confl icts of
interest arising with ordinary shareholders of the Company.
Compensation of Offi cers
Offi cer category
Total com-pensation
(millions of yen)
Total compensation by type (millions of yen) Number ofdirectors
or Audit & Supervi-
sory Board Members
Basic compensa-
tion
Stockoptions
BonusesRetirement allowance
Directors (excluding outside directors)
241 219 21 __ __ 9
Audit & Supervisory Board Members (excluding outside Audit & Supervisory Board Members)
30 30 __ __ __ 3
Outside offi cers 21 21 __ __ __ 5
Note: The above table includes three directors and one Audit & Supervisory Board Member who
retired as of the Ordinary General Meeting of Shareholders held on June 27, 2013, and one
Audit & Supervisory Board Member who retired on August 31, 2013.
Information Disclosure SystemTo ensure management transparency and enhance accountability, the
Company conducts timely, appropriate, and fair information disclosure
through investor relations (IR) activities aimed at shareholders and investors.
Measures to Revitalize the General Meeting of Shareholders and Promote
the Exercise of Voting Rights
The Company works to dispatch notices of General Meeting of
Shareholders as early as possible. Notice of the Ordinary General Meeting
of Shareholders held on June 26, 2014, was dispatched on June 6, 2014.
To promote the exercise of voting rights, the Company participates in an
electronic voting platform.
IR Activities
The Company holds briefi ngs for analysts and institutional investors twice
yearly approximately one week after the results announcement. In addition
to the results announcement at the Tokyo Stock Exchange (TSE), the
Company posts its securities fi ling (Yuka Shoken Hokokusho), briefi ng
materials for analysts and institutional investors, shareholders’ newsletters,
English annual report, and other materials on its website.
http://www.jaccs.co.jp/corporate/ir/index.html
A dedicated IR manager is appointed within the Corporate Planning and
Communication Department.
JACCS CO., LTD. | Annual Report 2014 17
Founder and Honorary Chairman
Kaname Yamane
Founder and Counselor
Tatsuya Watanabe
Senior Adviser
Naoe Sugimoto
President, CEO, COO
and Representative Director
Yasuyoshi Itagaki
Deputy President and
Representative Director
Tsutomu Sugiyama
Director and Senior Managing
Executive Offi cer
Hidechika Kobayashi
Credit and Credit Card, Business Strategy
Directors and Managing
Executive Offi cers
Noboru Kawakami
General Affairs, Personnel and Compliance
Minekazu Sugano
Information System
Directors and Senior Executive Offi cers
Kojun Sato
Corporate Planning
Shigeki Ogata
Accounting and Finance
Haruo Kamioka*
Kuniaki Hara*
* Outside Directors
Audit & Supervisory Board Members
Akihiro Urabe (Full-time)
Takayuki Hiroi (Full-time)
Saburosuke Fujisaki*
Satoru Fujimura*
* Outside Audit & Supervisory Board Members
(Front, from
left to right)
(Back, from
left to right)
Director and Managing
Executive Offi cer
Noboru Kawakami
Deputy President and
Representative Director
Tsutomu Sugiyama
Director and Senior
Executive Offi cer
Shigeki Ogata
President, CEO, COO and
Representative Director
Yasuyoshi Itagaki
Director and Managing
Executive Offi cer
Minekazu Sugano
Director and Senior
Managing Executive Offi cer
Hidechika Kobayashi
Director and Senior
Executive Offi cer
Kojun Sato
Founders / Board of Directors and Audit & Supervisory Board Members As of June 27, 2014
JACCS CO., LTD. | Annual Report 201418
Managing Executive Offi cer
Satoru Shiroishi
Shutoken Area
Senior Executive Offi cers
Akira Furukawa
Kita-Kanto Area
Yoshinao Osawa
Finance Business, Business Strategy
Yukihiko Kamagata
Audit
Hitoshi Chino
Credit Supervision and Operation
Hideo Yoshino
PT Mitra Pinasthika Mustika Finance (Indonesia)
Kenichi Oshima
Credit Administration
Toru Yamazaki
Kinki Area
Takahiro Nagoshi
Sales, Business Strategy
Akira Kuzukami
Chubu Area
Executive Offi cers
Masayuki Nemoto
Credit Card Business Promotion, Business Strategy
Isao Yanagihara
Hokkaido Area
Ryo Murakami
Credit Business Promotion, Business Strategy
Shingo Yuzue
Housing Loan Guarantee, Business Strategy
Toshio Sotoguchi
Auto Loans, Business Strategy
Masatoshi Kishi
Chugoku-Shikoku Area
Kazuo Yamamoto
Corporate Planning
Noboru Taniguchi
Credit Administration
Masahiro Hasukawa
Credit Supervision and Operation
Toshiyuki Hijikata
Compliance
Hiroki Yoshida
Tohoku Area
Atsushi Hazawa
Kyushu Area
Executive Offi cersAs of June 27, 2014
JACCS CO., LTD. | Annual Report 2014 19
CSR Activities
Ongoing seminar program for member stores
Every year, JACCS holds seminars with the objective of supporting member stores’ efforts
to strengthen their compliance systems. In fi scal 2013, we held 39 seminars nationwide
under such themes as “Avoiding Consumer Disputes,” “Legal Aspects of Handling
Complaints,” and “Dealing with Workplace Bullying.” A total of 1,521 participants from
567 companies took part in these seminars. Participants reported that the seminars had
contributed to enhanced business performance and smoother operations at member
stores. We will continue to organize seminars as we strive to maintain our position as
a trusted partner.
Contributing to society through credit cards
As part of JACCS’ efforts to contribute to society through its business activities, the
Company issues credit cards that provide a charitable donation based on usage. A certain
percentage of the card’s total annual purchase amount is donated to a specifi ed charitable
organization or local area. JACCS fully incurs the amount that is donated to charity, and no
monetary cost is borne by the cardholder. The aim is to support efforts to revitalize local
economies as well as raise awareness of the importance of making a social contribution.
Members may select from the following card lineup.
“Through all of our interactions with society, we aim to honor the trust placed in us by our stakeholders, and strive to
enhance the level of satisfaction we provide.” This statement conveys JACCS’ core CSR philosophy. When undertaking
CSR activities, we are also conscious of our commitment to being “a company that generates sustainable profi ts and
always acts in good faith.”
Japan Guide Dog Association Card
Donations go to the Japan Guide
Dog Association (JGDA)
Kumamoto Card
Donations go to the “Kumamoto
Hometown Support” program
JACCS CARD Link
When joining, members select a
charitable organization—which
receives donations—from an
extensive list. The list includes
such organizations as the Japan
Committee for UNICEF, the
Japanese Red Cross Society, and
the Japan Association for UNHCR.
Hakodate Card HOKKAIDO I CARD
Donations go to Hakodate City to
support aid programs for child-
rearing and other social welfare
programs
Donations go to the Hokkaido
Heritage Council
JACCS CO., LTD. | Annual Report 201420
Seven-Year Financial Summary
Years ended March 31Millions of Yen
2008 2009 2010 2011 2012 2013 2014
Summary of operations for the year:
Total volume of new contracts ¥2,448,288 ¥2,412,646 ¥2,316,012 ¥2,328,294 ¥2,387,501 ¥2,480,470 ¥2,784,532
Volume of new contracts: Credit card 714,783 723,126 704,064 738,947 749,720 786,669 899,957
Volume of new contracts: Installment sales fi nance 325,794 306,343 241,957 227,300 230,352 211,539 293,029
Volume of new contracts: Credit guarantee 562,889 527,433 515,934 551,465 603,873 636,770 687,669
Volume of new contracts: Financing 251,888 211,317 178,181 118,673 86,418 83,022 79,010
Volume of new contracts: Other operations 592,933 644,425 675,874 691,907 717,136 762,469 824,866
Total operating revenue 139,912 142,039 127,101 116,241 107,384 102,950 104,134
Operating income (loss) (8,020) 5,271 8,845 3,137 10,972 9,413 12,236
Income (loss) before income taxes and minority interests (15,457) 4,711 7,460 5,571 12,203 11,764 12,730
Net income (loss) (9,758) 2,587 3,569 4,398 6,822 7,642 6,504
Net cash provided by (used in) operating activities 58,022 94,774 122,877 104,111 36,236 15,157 (89,429)
Net cash provided by (used in) investing activities (5,511) (4,956) 1,708 (4,533) (4,181) (8,934) (8,355)
Net cash provided by (used in) fi nancing activities 22,731 (124,126) (116,864) (33,883) (61,147) (47,933) 72,821
At year-end:
Total assets ¥2,788,607 ¥3,024,588 ¥2,827,806 ¥2,786,288 ¥2,725,816 ¥2,718,518 ¥2,896,405
Total net assets 99,538 97,849 103,273 105,261 111,348 117,486 122,712
Yen
Per share data:
Net income (loss) ¥ (65.90) ¥ 14.78 ¥ 20.39 ¥ 25.12 ¥ 38.97 ¥ 43.72 ¥ 37.71
Net assets 568.30 558.74 589.74 601.13 636.17 678.38 715.38
Cash dividends — 4.00 5.00 5.00 10.00 11.00 14.00
Key ratios (%):
ROA (0.3)% 0.2% 0.4% 0.2% 0.5% 0.4% 0.4%
ROE (9.5) 2.6 3.6 4.2 6.3 6.7 5.4
Equity ratio 3.6 3.2 3.7 3.8 4.1 4.3 4.2
Supplementary data:
Number of JACCS cardholders (Thousands) 9,911 9,714 9,920 9,601 8,419 7,281 6,828
Number of shares outstanding at year-end 175,395,808 175,395,808 175,395,808 175,395,808 175,395,808 175,395,808 175,395,808
Number of employees 2,934 2,977 2,714 2,839 2,977 3,096 3,355
Financial Information
21 Seven-Year Financial Summary
22 Management’s Discussion and Analysis
26 Business Risks
28 Consolidated Balance Sheets
30 Consolidated Statements of Income
31 Consolidated Statements of Changes in Net Assets
33 Consolidated Statements of Cash Flows
34 Notes to the Consolidated Financial Statements
48 Independent Auditor’s Report
JACCS CO., LTD. | Annual Report 2014 21
About Five Key Business Lines
The three core businesses operated by JACCS
that are introduced on pages 12–14 are classifi ed
according to the following fi ve business segments
for Japanese accounting and regulatory disclosure
purposes.
Credit Card
JACCS issues credit cards to customers who pass
a credit check conducted by JACCS. Customers who
become cardholders receive offers for shopping and
other services by presenting their card and signing at
member stores partnering with JACCS. These include
department stores, specialty stores, dining establishments,
hotels, leisure facilities, and more. JACCS pays member
stores for purchases in a single lump payment, and
collects the money from the cardholder using payment
methods set down in the contract. Aside from the proper
card issued by JACCS, there also exists partner cards,
called house cards.
Installment Sales Finance
When a consumer makes a purchase at a member
store partnering with JACCS, JACCS pays the purchase
amount for customers who pass the credit check
conducted by JACCS. In other words, consumers who
do not have credit cards can also make high-priced
purchases. Consumers have the option of making
several payments, or paying all at once. This is the
business area where JACCS is stronger than other
credit card companies.
Analysis of Operating Performance
Overview
In fi scal 2013, ended March 31, 2014, the second year of JACCS’ three-year medium-term business
plan—“ACT11”—the Group addressed the highest priority task set under the plan of turning around and
expanding operating revenue (top line). Specifi cally, the Group implemented measures to stimulate growth
in its three core businesses—the credit business, credit card business, and fi nancing business—while
reinforcing initiatives aimed at developing its overseas operations and new businesses. As a result, the
Company achieved a turnaround in its top line.
On a consolidated basis, the total volume of new contracts amounted to ¥2,784,532 million
(US$27,299 million), an increase of ¥304,062 million (US$2,981 million), or 12.3%, compared with the
previous fi scal year. Total operating revenue grew ¥1,184 million (US$11 million), or 1.1%, to ¥104,134
million (US$1,020 million).
Results by Business
Credit Card
In credit card operations, the volume of new contracts grew steadily, underpinned by new membership
campaigns and an array of promotions JACCS ran to stimulate card usage. Expansion in the volume of
new contracts was also driven by growth in the Reader’s Card, KAMPO STYLE CLUB CARD, and REX
CARD—which have built a strong reputation and offer users enhanced point-earning ratios—as well
as co-branded cards issued in collaboration with major consumer electronics retail chains. In addition,
JACCS began providing various new services to enhance the convenience for customers and affi liate
stores. This included receiving credit card applications in-store using tablet computers for a co-
branded card with a major sporting goods retailer.
As a result, on a consolidated basis, in the credit card business, the volume of new contracts
increased 14.4% compared with the previous fiscal year, to ¥899,957 million (US$8,823 million),
and operating revenue increased ¥2,937 million (US$28 million), or 13.7%, to ¥24,418 million
(US$239 million).
Management’s Discussion and Analysis
Composition of Total Volume
of New Contracts (%)
Credit Card32.3%
Installment SalesFinance10.5%Credit Guarantee
24.7%
Financing2.8%
Other Operations29.7%
JACCS CO., LTD. | Annual Report 201422
Credit Guarantee
Member stores such as automobile dealerships or
housing companies who partner with JACCS can have
JACCS run a credit check on those consumers when
they apply to make a purchase. Consumers who pass
the check get fi nancing from a partner fi nancial
institution, and JACCS handles debt guarantees, as well as
collection for installment payments. Most of our guarantee
operations are in auto loans and housing loans.
Financing
Cash advance services are available at cash dispensers
and ATMs for holders of JACCS credit cards or loan
cards. Credit checks are run on consumers who apply
for loans from JACCS, and persons who pass can borrow
money in the form of collateralized or uncollateralized
direct fi nancing and housing loans.
Other Operations
This area is dominated by our bill collection services, in
which JACCS acts as an agent for partner companies in
collecting payments, eliminating the need for the partner
company to allocate its own time, personnel, and money.
The bill collection business is an asset-less, fee-based
business which sees stable income once a contract is
signed.
Installment Sales Finance
In shopping credits, in addition to a recovery in purchases of big-ticket items, such major business
categories as motorcycles, jewelry, kimono, and consumer electronics performed strongly. In particular,
consumer electronics purchases remained robust from the start of the fi scal year and recorded
substantial year-on-year growth. In the focus area of Web-related services, JACCS added new
functionality to the “WeBBy” in-store credit application service, resulting in an increase in usage.
In auto loans, as well as focusing on foreign new vehicles, JACCS worked to strengthen its
partnerships with domestic-brand automobile dealerships and used-vehicle dealers through a range of
marketing programs. JACCS also promoted the adoption and usage of its “WeBBy Auto” service—a
Web-based paperless auto loan application system.
In both shopping credits and auto loans, from the third quarter of the fi scal year extra demand
moved into full swing in the run-up to the increase in Japan’s consumption tax rate in April 2014. This
helped to drive a large increase in the volume of new contracts.
As a result, on a consolidated basis, the installment sales fi nance business recorded a 38.5%
increase in the volume of new contracts, to ¥293,029 million (US$2,872 million). Operating revenue
increased ¥1,158 million (US$11 million), or 7.1%, to ¥17,475 million (US$171 million).
Credit Guarantee
Within personal loan guarantees for banks, new partnerships with regional banks, an expanded lineup
of products handled, and a strengthened alliance with BTMU contributed to a robust performance by
loans on deed, including personal auto loan guarantees.
In housing loan guarantees on condominiums for investment purposes, as competition intensifi ed
due to such factors as the market entry of new participants, JACCS achieved steady performance
underpinned by ongoing, effective sales activities. In housing-related products, JACCS maintained
robust results in such areas as loans for commercial solar power generation systems and housing
renovation loans. Auto loan guarantees achieved a similar performance to auto loans in the installment
sales fi nance business.
As a result, on a consolidated basis, the credit guarantee business recorded an 8.0% increase in
Total Volume of New Contracts
Otheroperations
Financing
Creditguarantee
Installmentsales finance
Credit card
2010
2,316 2,3282,387
2,480
2,784
2011 2012 2013 2014
3,000
2,500
2,000
1,500
1,000
500
0
(Billions of Yen)
JACCS CO., LTD. | Annual Report 2014 23
the volume of new contracts, to ¥687,669 million (US$6,741 million). Operating revenue rose ¥628
million (US$6 million), or 1.6%, to ¥39,183 million (US$384 million).
Financing
The implementation of promotional campaigns to attract new customers and stimulate usage among
existing customers led to a bottoming out of the declining trend in the consolidated volume of new
contracts for cash advances.
As a result, on a consolidated basis, the fi nancing business posted a 4.8% decrease in the
volume of new contracts, to ¥79,010 million (US$774 million). Operating revenue fell ¥3,566 million
(US$34 million), or 19.4%, to ¥14,782 million (US$144 million).
Other Operations
Bill collection services achieved a robust volume of new contracts, driven by such areas as rent
collection and fi tness club membership fees. JACCS also revamped its bill collection system, enabling
it to offer services with a greater level of functionality. Consolidated subsidiaries in other operations
focused on expanding such businesses as non-life and life insurance agency services, leasing, and
servicer operations.
As a result, on a consolidated basis, other operations posted an 8.2% increase in the volume
of new contracts, to ¥824,866 million (US$8,086 million). Operating revenue* increased ¥28 million
(US$0.2 million), or 0.3%, to ¥8,274 million (US$81 million).
* Operating revenue presented for other operations is the sum of other operating revenue and fi nancial revenue.
Operating Expenses and Net Income
Total operating expenses declined ¥1,639 million (US$16 million), or 1.8%, compared with the
previous fi scal year, to ¥91,898 million (US$900 million).
Operating income increased ¥2,823 million (US$27 million), or 30.0%, compared with the
previous fi scal year, to ¥12,236 million (US$119 million), and ordinary income rose ¥488 million
(US$4 million), or 4.1%, to ¥12,238 million (US$119 million).
Accompanying the absorption-type merger with consolidated subsidiary JNS Collection Service Co.,
Ltd., on April 1, 2013, the Company reversed a portion of its deferred tax assets. As a result, there was
an increase in income taxes-deferred. Consequently, consolidated net income decreased ¥1,138 million
(US$11 million), or 14.9%, compared with the previous fi scal year, to ¥6,504 million (US$63 million).
Net income per share amounted to ¥37.71 (US$0.36), a decrease of 13.7% compared with the
previous fi scal year. The Company implemented cash dividends totaling ¥14.00 (US$0.13) per share
applicable to the fi scal year under review, an increase of 27.3% compared with the previous fi scal year.
Analysis of Financial Position
Fund Procurement
The Company’s basic fund procurement policy is to maintain and strengthen the relationships it has
Net Income
2010
3.5
4.3
6.8
7.6
6.5
2011 2012 2013 2014
8
6
4
2
0
(Billions of Yen)
Total Assets
2010
2,827 2,786 2,725
2011 2012 2013 2014
3,500
2,800
2,100
1,400
700
0
(Billions of Yen)
2,718
2,896
Total Operating Revenue
2010
127
116
107102 104
2011 2012 2013 2014
150
120
90
60
30
0
(Billions of Yen)
JACCS CO., LTD. | Annual Report 201424
established to date with fi nancial institutions while diversifying fund procurement, and emphasizing
stability and cost considerations.
Since the Company undertakes direct financing in capital markets, it obtains credit ratings for
its bonds.
Financial Position
Total assets at March 31, 2014, amounted to ¥2,896,405 million (US$28,396 million), an increase
of ¥177,887 million (US$1,743 million), or 6.5%, compared with the previous fi scal year-end. Total
current assets increased ¥174,287 million (US$1,708 million), to ¥2,831,720 million (US$27,761
million). Although cash and deposits decreased, there were increases in accounts receivable-
installment and accounts receivable-installment sales-credit guarantee. Total noncurrent assets
increased ¥3,598 million (US$35 million) compared with the previous fi scal year-end, to ¥64,684
million (US$634 million), refl ecting increases in software.
Total current liabilities at March 31, 2014, amounted to ¥2,339,788 million (US$22,939 million),
an increase of ¥102,146 million (US$1,001 million) compared with the previous fi scal year-end,
refl ecting increases in accounts payable-credit guarantee and commercial papers. Total noncurrent
liabilities at fi scal year-end increased ¥70,513 million (US$691 million), to ¥433,903 million
(US$4,253 million), refl ecting increases in such items as bonds payable and long-term loans payable.
Total net assets increased ¥5,226 million (US$51 million), to ¥122,712 million (US$1,203
million), refl ecting an increase in retained earnings. The equity ratio fell 0.1 percentage point, to 4.2%.
Net assets per share amounted to ¥715.38 (US$7.01) at fi scal year-end, an increase of 5.4%
compared with the previous fi scal year-end.
Cash Flows
Net cash used in operating activities amounted to ¥89,429 million (US$876 million). Signifi cant items
included increase in notes and accounts payable-trade of ¥85,967 million (US$842 million), income
before income taxes and minority interests of ¥12,730 million (US$124 million), and increase in notes
and accounts receivable-trade of ¥191,937 million (US$1,881 million).
Net cash used in investing activities amounted to ¥8,355 million (US$81 million). Signifi cant
items included proceeds from sales of investment securities of ¥1,906 million (US$18 million) and
purchase of property, plant and equipment and intangible assets of ¥10,591 million (US$103 million).
Net cash provided by fi nancing activities amounted to ¥72,821 million (US$713 million).
Signifi cant items included proceeds from long-term loans payable of ¥113,415 million (US$1,111
million), net increase in commercial papers of ¥59,900 million (US$587 million), repayment of long-
term loans payable of ¥113,508 million (US$1,112 million), and redemption of bonds of ¥30,000
million (US$294 million).
As a result, cash and cash equivalents at end of period totaled ¥70,883 million (US$694 million),
a decrease of ¥24,836 million (US$243 million) compared with the previous fi scal year-end.
Total Net Assets
2010
103105
111
2011 2012 2013 2014
125
100
75
50
25
0
(Billions of Yen)
117122
Cash Flows
2010
-116.8
-33.8
-61.1
-4.5 -4.1
1.7
104.1
122.8
36.2
2011 2012 2013 2014
150
100
50
0
-50
-100
-150
(Billions of Yen)
CF from Operating Activities
CF from Investing Activities
CF from Financing Activities
-47.9
-89.4
-8.9 -8.3
15.1
72.8
Credit Rating
R&IR&I JCRJCR
Long termLong term A-A- A-A-
Short termShort term a-1a-1 J-1J-1
JACCS CO., LTD. | Annual Report 2014 25
Business Risks
1. Credit risk
Risk of increase in allowance for doubtful accounts
The incidence of customer arrears is at a stable level, and at present the Company
does not see any factors likely to lead to a large increase in arrears cases. Hence, the
Company expects the quality of its receivables portfolio to remain high. Accompanying
growth in the total amount of receivables, although the Company anticipates that a
certain percentage of receivables will fall into arrears, cases of arrears due to customers
declaring bankruptcy or debt-workout—the main causes of write-offs of doubtful
accounts—are on a declining trend, and the impact of such cases on the Company’s
operating performance is likely to be minimal.
Claims for the repayment of excess interest are likely to have a minimal impact on
the Company’s operating performance since the Company complied with the interest
rate ceilings stipulated in the Interest Limitation Law.
Member store risk
There is the possibility that member stores may fall into bankruptcy owing to deterioration
in fi nancial soundness, and that such stores may cease the provision of services or the
delivery of goods to the Company’s customers. In such cases, the Company may suffer
damage, which may affect its operating performance.
Pursuant to a revision of the Installment Sales Law in 2008, if a specifi ed-contract
member store were to engage in inappropriate sales activity (excessive-volume sales,
misrepresentation, etc.), customers subject to such behavior would be able to withdraw
their declaration of intent regarding the application to enter into a contract with the
seller. If inappropriate sales activity were recognized to have occurred, affected
customers could claim refunds from the credit company. If there were an increase in
inappropriate sales activity by member stores, the Company may suffer damage, which
may affect its operating performance.
2. Market-related risk
Risk of increase in funding interest rates
As of March 31, 2014, the Group’s overall fund procurement (including straight
corporate bonds and commercial papers) fi xed interest-rate ratio (including swaps)
stood at 57.0%, and the fl oating interest-rate ratio stood at 43.0%. While funding
interest rates fl uctuate according to market trends, interest rates applied to loans
extended by the Company and transaction conditions between the Company and
member stores and customers in its credit card operations and installment sales
fi nance operations are determined comprehensively through a variety of factors,
including competitive conditions, and furthermore are contingent upon changes in
member rules and contracts. Consequently, since a time lag arises before any increase
in interest rates is refl ected in transaction conditions, a change in the fi nancial situation
leading to funding interest rate fl uctuations may affect the Group’s operating
performance. As of March 31, 2014, the Company has received the following credit
ratings from Japan Credit Rating Agency, Ltd. (JCR), and Rating and Investment
Information, Inc. (R&I): Long-term bonds both A-, commercial papers J-1 (JCR) and a-1
(R&I). The Company’s commercial paper issuing limit is set at ¥300 billion (US$3,191
million), and there are unlikely to be diffi culties in fund procurement in the near term.
However, if the Group’s operating performance were to deteriorate, its credit ratings and
creditworthiness would be downgraded and it would be forced to raise funds at higher
interest rates than normal. Consequently, the Company would face higher funding costs
from capital markets and fi nancial institutions, which may affect its operating performance.
Risk of decline in prices of investment securities
As of March 31, 2014, the Group holds investment securities amounting to ¥16,222
million (US$159 million) (market-listed and unlisted shares, etc.) and property, plant
and equipment amounting to ¥20,446 million (US$200 million) (land, buildings and
structures, etc.). There is the possibility that the Company may record valuation losses
on such holdings owing to declines in market prices or impairment of investment value.
3. Administrative risk
In the operation of its businesses, the Group conducts a wide variety and high volume
of administrative processing. The Group works to ensure that all administrative
processing is carried out correctly and in accordance with fundamental rules, and aims
to enhance the effi ciency of these operations, including through the implementation of
measures to improve the accuracy of processing, prevent fraud, and increase the level
of processing systemization. However, in the event that an accident or fraud were to
occur stemming from a failure to carry out correct administrative processing, depending
on the nature and scale of such an occurrence, it may affect the trust of the Group’s
customers or member store businesses. In such a case, the Company may face liability
for damages and a loss of public credibility, which may affect the Group’s operating
performance.
4. System risk
While the Company’s core information system comprises the security management
structures outlined below, in the event of a malfunction or stoppage in the core
information system, the Group’s operations may be halted, which may affect the
Company’s operating performance.
(1) The Company’s core computer system, called “JANET,” comprises three main
systems—processing, input/output (I/O), and operational monitoring. All three systems
are installed in an information center managed by a contracted operations company.
This information center has taken earthquake countermeasures and installed multiple
electric power supply lines as well as electrical generator equipment. Hence, even if
outside supply were disrupted, the center could remain operational for several days
using its own supply. The information center makes a backup of data necessary for
the resumption of operations, which is stored at a separate location more than 60
kilometers away. Furthermore, in case of a contingency affecting I/O center processing,
such critical operations as member store settlement operations can be performed at an
alternate processing center. In such a case, since operations would be carried out on a
temporary basis, customer services may be adversely affected.
(2) The Company uses the JANET system to manage most information relating to its
operations, including customer personal and credit information and member store
transaction conditions. JANET comprises a dedicated network, and although external
access paths are completely blocked, the Company implements a range of other
measures as part of its security management, as summarized below:
(i) JANET terminal functions are set up in such a way that each user is restricted to an
authorized set of functions necessary for business operations, depending on the
terminal’s location and the user’s position and job.
(ii) Each set of terminal operations is recorded in a log, which is monitored to ensure
that operations are valid.
(iii) Terminals are all controlled through a system of locks, and the terminal equipment
cannot be removed from its installed location.
(iv) Terminals do not include I/O ports for removable recording media, and the
equipment is confi gured so that individuals cannot introduce, input, output, or
record data.
(v) System access for system developers and operators must be authorized in advance
and requires the application for and approval of a user ID, which must be
surrendered again after use. Monitoring is carried out on a daily basis to ensure
that usage is appropriate.
(vi) Within the scope of “Management of the JANET Host System Development,
Maintenance and Operation,” the Company has acquired certifi cation under the
international standard relating to information security, ISO/IEC 27001:2005. Based
on this standard, the Company is able to effectively pursue measures relating to
information security.
5. Compliance risk
Within the Group, the Company conducts money lending, credit card, and installment
sales fi nance operations, and the Company’s consolidated subsidiaries conduct servicer
and other operations. Pursuant to laws and regulations, these businesses require
registration with or permits issued by the relevant authorities. From the fi scal year
ended March 31, 2014, the Company has commenced several new businesses in such
areas as advance-payment methods and the transfer of funds. The scale of these new
JACCS CO., LTD. | Annual Report 201426
businesses is still small. To ensure strict compliance with laws and regulations, the
Group has established compliance systems as outlined below. However, in the event
that the Group engaged in activity that was in violation of laws or regulations, the Group
may be subject to punishment by relevant authorities pursuant to laws and regulations
(business improvement order, partial or full business suspension order, revocation of
registration, etc.), which may affect the Company’s operating performance.
Installment Sales Law and Special Transactions Law
The Company’s credit card and installment sales fi nance operations are subject to the
Installment Sales Law. For this reason, the Company is subject to a variety of regulations
(excessive credit prevention, member store investigation, disclosure of transaction
conditions, delivery of written documents, plea for suspension of payments, cooling off/
release/cancellation of credit contracts, damages relating to cancellation of contracts,
appropriate management of credit card numbers, etc.). The Company must also comply
with the voluntary rules of the Accredited Installment Sales Association, which are
based on the Installment Sales Law. This law’s objectives are to “strive for the sound
development of transactions relating to installment sales, etc., through the assurance
of fair transactions, prevention of infringements against purchasers, and establishment
of measures necessary for the appropriate management of credit card numbers, etc.,
as well as to protect the interests of purchasers, facilitate the smooth distribution of
goods and provision of services, and thereby contribute to the country’s economic
development.” The Company conducts its business operations so that these objectives
are properly realized.
Pursuant to the 2008 revision of the Installment Sales Law, the Company
implemented a major review of its business relationships with stores that are subject
to the Special Transactions Law to ensure that the Company executes appropriate
examination of such stores. The Company also reformed its organization and undertook
development of its processing system to ensure its ability to investigate and estimate
the potential amount customers are capable of paying. Although the impact on the
Company’s operating performance was not insignifi cant immediately following the law’s
revision, the abovementioned measures also led to a remarkable improvement in the
quality of receivables. At present, the Company is conducting business operations in
accordance with the Installment Sales Law without any particular problems.
Money Lender Business Law and Interest Limitation Law
The Company’s fi nancing business is subject to the Money Lender Business Law, the
Law on Regulation of Receipt of Capital Subscription, Deposits, and Interest Rates, etc.,
and the Interest Limitation Law. For this reason, the Company’s fi nancing business, to
which the Money Lender Business Law applies, is subject to a variety of regulations
(prohibition of excessive lending, disclosure of lending conditions and indicators,
delivery of written documents, keeping of account ledger, collection activity regulation,
return of claim deed, etc.). In the execution of its lending business, the Company
conducts its operations so as not to violate these regulations.
In the consumer credit industry, the impact of claims for the repayment of excess
interest, regulation limiting total credit extension to a borrower, and reduction of
maximum permitted interest rates has led to a large contraction in the market. However,
in the fi scal year ended March 31, 2014, the market appeared to make a turnaround
after bottoming out.
6. Information-related risk
The nature of the Group’s business involves the acquisition, retention, and use of
a large volume of personal information, particularly centered on personal credit
information (including credit card numbers and other stand-alone information). Although
the Group has rigorously handled such information since prior to the enactment of
the Personal Information Protection Law, in the event of a leak or loss of personal
information from the Group or its outside contractors, or the fraudulent use of such
information, the Group may face a loss of credibility and liability for damages, which
may affect the Company’s operating performance. In addition, if the Company were to
commit a legal violation as a business operator that handles personal information, it
may be subject to administrative measures, including recommendations and orders.
Led by the Compliance Control Department, the Group strives to ensure that
personal information is handled appropriately and to maintain sound security
management. The Company and three of its consolidated subsidiaries have acquired
Privacy Mark certifi cation—a system to assess measures to protect personal
information—from the Japan Information Processing Development Corporation
(JIPDEC), and are working to ensure its effectiveness.
7. Disaster risk
In preparation for unexpected situations, including earthquakes, large-scale disasters,
and accidents, the Group has established a safety-confi rmation system, prepared
a major-disaster response manual, formulated operational rules for its Emergency
Response Committee, and established a Business Continuity Plan (BCP). These and
other measures are focused on building the Group’s crisis management system.
However, in the event of a crisis whose scale exceeds the Group’s assumptions, leading
to decisive damage to the Group’s physical and human assets, there is the possibility
that this may result in the suspension of operations or make the continuation of
operations problematic.
8. Tangible asset risk
There is the possibility that tangible assets owned by the Group may sustain damage
owing to natural disasters, such as earthquakes and typhoons, or man-made disasters,
such as acts of terrorism. The Group regularly ascertains the status of the movable
property and real estate assets that it manages, and implements disaster prevention
and crime prevention measures.
9. Personnel risk
Since the Group undertakes business operations involving a wide array of fi elds, it has
an ongoing program for recruiting high-quality personnel, and it is essential for the
Group to develop and train the people it has employed. However, if the Group were
unable to recruit or retain high-quality personnel, or it became unable to adequately
train its employees, this may affect the Group’s operating performance.
10. Reputation risk
The Group’s reputation is extremely important to the maintenance of its relationships
with customers, investors, regulatory agencies, and society in general. The Group’s
reputation may be damaged by any of a diverse range of factors, including compliance
violations, employee fraud, computer system failures, or the behavior of third parties
that is diffi cult or impossible to control. If the Group were unable to avoid such factors
or respond adequately to such factors, it may lose current or future customers or
investors, and this may affect the Group’s operating performance.
11. Related-company risk
The Group comprises the Company and its affi liates (fi ve consolidated subsidiaries and
one equity-method affi liate). The Group’s consolidated-to-nonconsolidated ratio stands
at 0.99 on a total assets basis, and 1.01 on an operating revenue basis (as of March
31, 2014). Hence, within the Group’s businesses, the proportion accounted for by the
Company is extremely high. Consequently, even in the event that a business risk relating
to a subsidiary materialized, it would not immediately have a signifi cant effect on the
Group as a whole. However, in the event of the occurrence of an adverse situation, this
may affect the Group’s operating performance.
The business risks outlined above are based on information available to the Group as
of the fi ling date of the Company’s fi nancial results for the fi scal year ended March 31,
2014, and include information regarding major potential business risks envisaged by
the Group. However, this summary of risks does not cover all possible risks, and there
is the possibility that new risks may occur owing to a variety of contingent factors,
including changes in the future economic situation or the industry’s operating
environment.
JACCS CO., LTD. | Annual Report 2014 27
Consolidated Balance SheetsJACCS CO., LTD. and Consolidated Subsidiaries
As of March 31Millions of Yen
Thousands ofU.S. Dollars
2014 2013 2014
ASSETS
Current assets:
Cash and deposits ¥ 70,883 ¥ 95,968 $ 694,931
Accounts receivable-installment 943,782 832,684 9,252,764
Accounts receivable-installment sales-credit guarantee 1,762,417 1,685,888 17,278,598
Lease investment assets 14,145 9,134 138,676
Prepaid expenses 1,461 1,346 14,323
Deferred tax assets 2,499 2,705 24,500
Advances paid 32,175 28,570 315,441
Accounts receivable-other 16,434 15,752 161,117
Other 1,391 1,115 13,637
Allowance for doubtful accounts (13,472) (15,733) (132,078)
Total current assets 2,831,720 2,657,432 27,761,960
Noncurrent assets:
Property, plant and equipment:
Buildings and structures 8,310 8,166 81,470
Accumulated depreciation (4,714) (4,521) (46,215)
Buildings and structures, net 3,596 3,644 35,254
Land 14,988 14,988 146,941
Other 4,012 2,824 39,333
Accumulated depreciation (2,150) (1,731) (21,078)
Other, net 1,861 1,093 18,245
Total property, plant and equipment 20,446 19,727 200,450
Intangible assets:
Software 19,612 13,890 192,274
Other 35 35 343
Total intangible assets 19,648 13,925 192,627
Investments and other assets:
Investment securities 16,222 16,194 159,039
Bad debts 2,840 3,445 27,843
Long-term prepaid expenses 364 284 3,568
Deferred tax assets 13 2,957 127
Guarantee deposits 1,883 2,055 18,460
Prepaid pension cost — 4,273 —
Net defi ned benefi t asset 4,165 — 40,833
Other 1,199 619 11,754
Allowance for doubtful accounts (2,098) (2,397) (20,568)
Total investments and other assets 24,589 27,433 241,068
Total noncurrent assets 64,684 61,086 634,156
Total assets ¥ 2,896,405 ¥ 2,718,518 $ 28,396,127
The accompanying notes are an integral part of these statements. Previous year’s fi gures are presented solely for the convenience of readers.
JACCS CO., LTD. | Annual Report 201428
As of March 31Millions of Yen
Thousands ofU.S. Dollars
2014 2013 2014
LIABILITIES
Current liabilities:
Notes and accounts payable-trade ¥ 39,877 ¥ 30,496 $ 390,950
Accounts payable-credit guarantee 1,762,417 1,685,888 17,278,598
Short-term loans payable 150,679 149,829 1,477,245
Current portion of bonds payable — 30,000 —
Current portion of long-term loans payable 86,341 110,208 846,480
Commercial papers 148,700 88,800 1,457,843
Accounts payable-other 2,454 2,565 24,058
Accrued expenses 1,062 1,171 10,411
Income taxes payable 265 2,910 2,598
Deposits received 44,933 42,740 440,519
Unearned revenue 287 369 2,813
Provision for bonuses 2,665 2,661 26,127
Provision for point card certifi cates 2,534 2,137 24,843
Deferred installment income 93,002 84,487 911,784
Other 4,564 3,375 44,745
Total current liabilities 2,339,788 2,237,641 22,939,098
Noncurrent liabilities:
Bonds payable 47,300 2,300 463,725
Long-term loans payable 380,592 356,819 3,731,294
Provision for retirement benefi ts — 24 —
Provision for directors’ retirement benefi ts 29 75 284
Provision for loss on interest repayment 1,319 1,418 12,931
Deferred tax liabilities 1,838 — 18,019
Long-term guarantee deposited 2,681 2,496 26,284
Other 142 255 1,392
Total noncurrent liabilities 433,903 363,390 4,253,950
Total liabilities 2,773,692 2,601,031 27,193,058
NET ASSETS
Shareholders’ equity:
Capital stock 16,138 16,138 158,215
Capital surplus 30,482 30,468 298,843
Retained earnings 74,359 69,830 729,009
Treasury stock (1,768) (997) (17,333)
Total shareholders’ equity 119,211 115,439 1,168,735
Accumulated other comprehensive income:
Valuation difference on available-for-sale securities 3,190 2,416 31,274
Deferred gains or losses on hedges (31) (38) (303)
Foreign currency translation adjustment (8) (385) (78)
Remeasurements of defi ned benefi t plans 276 — 2,705
Total accumulated other comprehensive income 3,426 1,993 33,588
Subscription rights to shares 74 36 725
Minority interests — 17 —
Total net assets 122,712 117,486 1,203,058
Total liabilities and net assets ¥ 2,896,405 ¥ 2,718,518 $ 28,396,127
JACCS CO., LTD. | Annual Report 2014 29
Consolidated Statements of IncomeJACCS CO., LTD. and Consolidated Subsidiaries
Years ended March 31Millions of Yen
Thousands ofU.S. Dollars
2014 2013 2014
Operating revenue:
Revenue from credit card business ¥ 24,418 ¥ 21,481 $ 239,392
Revenue from installment sales fi nance business 17,475 16,317 171,323
Revenue from credit guarantee 39,183 38,555 384,147
Financing revenue 14,782 18,348 144,921
Other operating revenue 7,841 7,754 76,872
Financial revenue
Interest income 112 193 1,098
Dividends income 320 298 3,137
Other fi nancial revenue 0 0 0
Total fi nancial revenue 433 492 4,245
Total operating revenue 104,134 102,950 1,020,921
Operating expenses:
Selling, general and administrative expenses 83,045 83,833 814,166
Financial expenses:
Interest on loans 7,499 8,215 73,519
Interest on commercial papers 176 153 1,725
Other fi nancial expenses 1,176 1,334 11,529
Total fi nancial expenses 8,852 9,704 86,784
Total operating expenses 91,898 93,537 900,960
Operating income 12,236 9,413 119,960
Non-operating income:
Amortization of negative goodwill — 2,403 —
Equity in earnings of affi liates 108 — 1,058
Miscellaneous income 79 83 774
Total non-operating income 187 2,486 1,833
Non-operating expenses
Provision for loss on interest repayment 162 65 1,588
Loss on derivative settlement — 55 —
Miscellaneous loss 23 27 225
Total non-operating expenses 185 149 1,813
Ordinary income 12,238 11,750 119,980
Extraordinary income:
Gain on sales of investment securities 560 92 5,490
Total extraordinary income 560 92 5,490
Extraordinary loss:
Loss on retirement of noncurrent assets 53 27 519
Loss on sales of investment securities — 8 —
Loss on valuation of investment securities 14 3 137
Impairment loss — 39 —
Total extraordinary losses 68 79 666
Income before income taxes and minority interests 12,730 11,764 124,803
Income taxes-current 1,785 4,569 17,500
Income taxes-deferred 4,439 (448) 43,519
Total income taxes 6,225 4,121 61,029
Income before minority interests 6,505 7,643 63,774
Minority interests in income 0 0 0
Net income ¥ 6,504 ¥ 7,642 $ 63,764
The accompanying notes are an integral part of these statements. Previous year’s fi gures are presented solely for the convenience of readers.
JACCS CO., LTD. | Annual Report 201430
Consolidated Statements of Changes in Net AssetsJACCS CO., LTD. and Consolidated Subsidiaries
Millions of Yen
Shareholders’ equity
Year ended March 31, 2014 Capital stock Capital surplus Retained earnings Treasury stock Total shareholders’ equity
Balance at beginning of year ¥ 16,138 ¥ 30,468 ¥ 69,830 ¥ (997) ¥ 115,439
Changes during the consolidated fi scal year
Dividends from surplus — — (2,078) — (2,078)
Net income — — 6,504 — 6,504
Purchase of treasury stock — — — (916) (916)
Disposal of treasury stock — 13 — 146 159
Changes in the scope of consolidation — — 103 — 103
Inserted directly into net assets-foreign currecy translation adjustment
— — — — —
Net changes of items other than shareholders’ equity
— — — — —
Total changes during the consolidated fi scal year
— 13 4,529 (770) 3,771
Balance as of March 31, 2014 ¥ 16,138 ¥ 30,482 ¥ 74,359 ¥ (1,768) ¥ 119,211
Millions of Yen
Shareholders’ equity
Year ended March 31, 2013 Capital stock Capital surplus Retained earnings Treasury stock Total shareholders’ equity
Balance at beginning of year ¥ 16,138 ¥ 30,468 ¥ 64,815 ¥ (184) ¥ 111,237
Changes during the consolidated fi scal year
Dividends from surplus — — (2,624) — (2,624)
Net income — — 7,642 — 7,642
Purchase of treasury stock — — — (831) (831)
Disposal of treasury stock — — (2) 17 15
Changes in the scope of consolidation — — — — —
Inserted directly into net assets-foreign currecy translation adjustment
— — — — —
Net changes of items other than shareholders’ equity
— — — — —
Total changes during the consolidated fi scal year
— — 5,015 (813) 4,201
Balance as of March 31, 2013 ¥ 16,138 ¥ 30,468 ¥ 69,830 ¥ (997) ¥ 115,439
Millions of Yen
Accumulated other comprehensive income
Year ended March 31, 2014
Valuation differ-ence on available-for-sale securities
Deferred gains or losses on
hedges
Foreign cur-rency translation
adjustment
Remeasure-ments of
defi ned benefi t plans
Total accumulated other comprehensive income
Subscription rights toshares
Minorityinterests
Total netassets
Balance at beginning of year ¥ 2,416 ¥ (38) ¥ (385) ¥ — ¥ 1,993 ¥ 36 ¥ 17 ¥ 117,486
Changes during the consolidated fi scal year
Dividends from surplus — — — — — — — (2,078)
Net income — — — — — — — 6,504
Purchase of treasury stock — — — — — — — (916)
Disposal of treasury stock — — — — — — — 159
Changes in the scope of consolidation — — — — — — — 103
Inserted directly into net assets-foreign currecy translation adjustment
— — 377 — 377 — — 377
Net changes of items other than shareholders’ equity
773 6 — 276 1,056 37 (17) 1,076
Total changes during the consolidated fi scal year
773 6 377 276 1,433 37 (17) 5,226
Balance as of March 31, 2014 ¥ 3,190 ¥ (31) ¥ (8) ¥ 276 ¥ 3,426 ¥ 74 ¥ — ¥ 122,712
JACCS CO., LTD. | Annual Report 2014 31
The accompanying notes are an integral part of these statements. Previous year’s fi gures are presented solely for the convenience of readers.
Millions of Yen
Accumulated other comprehensive income
Year ended March 31, 2013
Valuation differ-ence on available-for-sale securities
Deferred gains or losses on
hedges
Foreign cur-rency translation
adjustment
Remeasure-ments of
defi ned benefi t plans
Total accumulated other comprehensive income
Subscription rights toshares
Minorityinterests
Total netassets
Balance at beginning of year ¥ 725 ¥ (19) ¥ (612) ¥ — ¥ 93 ¥ — ¥ 16 ¥ 111,348
Changes during the consolidated fi scal year
Dividends from surplus — — — — — — — (2,624)
Net income — — — — — — — 7,642
Purchase of treasury stock — — — — — — — (831)
Disposal of treasury stock — — — — — — — 15
Changes in the scope of consolidation — — — — — — — —
Inserted directly into net assets-foreign currecy translation adjustment
— — 227 — 227 — — 227
Net changes of items other than shareholders’ equity
1,691 (18) — — 1,672 36 0 1,709
Total changes during the consolidated fi scal year
1,691 (18) 227 — 1,899 36 0 6,138
Balance as of March 31, 2013 ¥2,416 ¥ (38) ¥ (385) ¥ — ¥ 1,993 ¥ 36 ¥ 17 ¥ 117,486
Thousands of U.S. Dollars
Shareholders’ equity
Year ended March 31, 2014 Capital stock Capital surplus Retained earnings Treasury stock Total shareholders’ equity
Balance at beginning of year $ 158,215 $ 298,705 $ 684,607 $ (9,774) $ 1,131,754
Changes during the consolidated fi scal year
Dividends from surplus — — (20,372) — (20,372)
Net income — — 63,764 — 63,764
Purchase of treasury stock — — — (8,980) (8,980)
Disposal of treasury stock — 127 — 1,431 1,558
Changes in the scope of consolidation — — 1,009 — 1,009
Inserted directly into net assets-foreign currecy translation adjustment
— — — — —
Net changes of items other than shareholders’ equity
— — — — —
Total changes during the consolidated fi scal year
— 127 44,401 (7,549) 36,970
Balance as of March 31, 2014 $ 158,215 $ 298,843 $ 729,009 $ (17,333) $ 1,168,735
Thousands of U.S. Dollars
Accumulated other comprehensive income
Year ended March 31, 2014
Valuation differ-ence on available-for-sale securities
Deferred gains or losses on
hedges
Foreign cur-rency translation
adjustment
Remeasure-ments of
defi ned benefi t plans
Total accumulated other comprehensive income
Subscription rights toshares
Minorityinterests
Total netassets
Balance at beginning of year $ 23,686 $ (372) $ (3,774) $ — $ 19,539 $ 352 $ 166 $ 1,151,823
Changes during the consolidated fi scal year
Dividends from surplus — — — — — — — (20,372)
Net income — — — — — — — 63,764
Purchase of treasury stock — — — — — — — (8,980)
Disposal of treasury stock — — — — — — — 1,558
Changes in the scope of consolidation — — — — — — — 1,009
Inserted directly into net assets-foreign currecy translation adjustment
— — 3,696 — 3,696 — — 3,696
Net changes of items other than shareholders’ equity
7,578 58 — 2,705 10,352 362 (166) 10,549
Total changes during the consolidated fi scal year
7,578 58 3,696 2,705 14,049 362 (166) 51,235
Balance as of March 31, 2014 $ 31,274 $ (303) $ (78) $ 2,705 $ 33,588 $ 725 $ — $ 1,203,058
JACCS CO., LTD. | Annual Report 201432
Consolidated Statements of Cash FlowsJACCS CO., LTD. and Consolidated Subsidiaries
Years ended March 31Millions of Yen
Thousands ofU.S. Dollars
2014 2013 2014
Cash fl ows from operating activities:
Income before income taxes and minority interests ¥12,730 ¥ 11,764 $124,803
Depreciation and amortization 4,406 3,279 43,196
Amortization of negative goodwill — (2,403) —
Increase (decrease) in allowance for doubtful accounts (2,563) (4,143) (25,127)
Increase (decrease) in provision for bonuses 10 167 98
Increase (decrease) in provision for point card certifi cates 397 292 3,892
Increase (decrease) in provision for retirement benefi ts 1 (1) 9
Increase (decrease) in provision for loss on interest repayment (99) (207) (970)
Interest and dividends income (433) (492) (4,245)
Interest expenses 8,076 8,917 79,176
Foreign exchange losses (gains) 10 4 98
Loss on retirement of property, plant and equipment and intangible assets 53 27 519
Loss (gain) on sales of investment securities (560) (83) (5,490)
Loss (gain) on valuation of investment securities 14 3 137
Equity in earnings (losses) of affi liates (108) — (1,058)
Impairment loss — 39 —
Decrease (increase) in notes and accounts receivable-trade (191,937) (13,510) (1,881,735)
Decrease (increase) in accounts receivable-other (680) (5,589) (6,666)
Decrease (increase) in prepaid pension costs 4,273 265 41,892
Decrease (increase) in net defi ned benefi t asset (3,739) — (36,656)
Increase (decrease) in notes and accounts payable-trade 85,967 30,121 842,813
Increase (decrease) in deferred installment income 8,504 3,649 83,372
Decrease (increase) in other assets (5,349) (3,366) (52,441)
Increase (decrease) in other liabilities 3,816 4 37,411
Subtotal (77,208) 28,736 (756,941)
Interest and dividends income received 442 511 4,333
Interest expenses paid (8,210) (9,040) (80,490)
Income taxes paid (4,452) (5,050) (43,647)
Net cash provided by (used in) operating activities (89,429) 15,157 (876,754)
Cash fl ows from investing activities:
Payments into time deposits — (520) —
Proceeds from redemption of time deposits 278 749 2,725
Purchase of property, plant and equipment and intangible assets (10,591) (7,062) (103,833)
Purchase of investment securities (18) (1,902) (176)
Proceeds from sales of investment securities 1,906 106 18,686
Payments for guarantee deposits (96) (410) (941)
Proceeds from collection of guarantee deposits 152 90 1,490
Payments of loans receivable (11) (17) (107)
Collection of loans receivable 25 32 245
Net decrease (increase) in short-term loans receivable — 0 —
Net cash provided by (used in) investing activities (8,355) (8,934) (81,911)
Cash fl ows from fi nancing activities:
Net increase (decrease) in short-term loans payable 850 (820) 8,333
Net increase (decrease) in commercial papers 59,900 3,700 587,254
Proceeds from long-term loans payable 113,415 96,323 1,111,911
Repayment of long-term loans payable (113,508) (129,194) (1,112,823)
Proceeds from issuance of bonds 45,000 — 441,176
Redemption of bonds (30,000) (14,500) (294,117)
Proceeds from sales of treasury stock 159 13 1,558
Purchase of treasury stock (916) (831) (8,980)
Cash dividends paid (2,078) (2,624) (20,372)
Net cash provided by (used in) fi nancing activities 72,821 (47,933) 713,931
Effect of exchange rate change on cash and cash equivalents 126 94 1,235
Net increase (decrease) in cash and cash equivalents (24,836) (41,616) (243,490)
Cash and cash equivalents at beginning of year 95,720 137,337 938,431
Cash and cash equivalents at end of year ¥70,883 ¥ 95,720 $694,931
The accompanying notes are an integral part of these statements. Previous year’s fi gures are presented solely for the convenience of readers.
JACCS CO., LTD. | Annual Report 2014 33
Notes to the Consolidated Financial StatementsJACCS CO., LTD. and Consolidated Subsidiaries
Basis of Presenting the Consolidated Financial Statements
The accompanying consolidated fi nancial statements of JACCS CO., LTD. (the “Company”) and consolidated subsidiaries (together the “Group”) have been
prepared in accordance with accounting principles generally accepted in Japan (“Japanese GAAP”). The consolidated balance sheets, statements of income,
changes in net assets and related notes are translated into English from the consolidated statutory report required under Japanese Companies Act. The
consolidated statements of cash fl ows and related notes, which are not required under Japanese Companies Act, are prepared and presented in accordance
with the accounting principles and practices applicable to the consolidated statements of cash fl ows under the Financial Instruments Exchange Law of Japan.
The Company has included the consolidated statements of cash fl ows and related notes in the consolidated fi nancial statements solely for the convenience of
readers outside Japan.
Certain accounting principles and practices under Japanese GAAP are different in certain respects from International Financial Reporting Standards and
standards in other countries as to application and disclosure requirements. Accordingly, the accompanying consolidated fi nancial statements are intended for
use only by those who are informed about Japanese GAAP.
Translations of Japanese yen amounts into U.S. dollars are presented solely for convenience, using the prevailing approximate exchange rate at March 31,
2014, which was ¥102 to US$1. These translations should not be construed as a representation that Japanese yen amounts have been, could have been or
could in the future be converted into U.S. dollars at this or any other rate of exchange.
Comparative information is not required to be disclosed under Japanese Companies Act, but is disclosed for the convenience of readers.
1. Scope of Consolidation
(1) Number of consolidated subsidiaries: 5
JACCS Loan-Collection Service Co., Ltd.
JACCS Total Service Co., Ltd.
JACCS Lease Co., Ltd.
JACCS Payment Solutions Co., Ltd.
JACCS International Vietnam Finance Co., Ltd.
Notes:
1. On April 1, 2013, the name of JACCS Car Lease Co., Ltd., was changed to JACCS Lease Co., Ltd.
2. On April 1, 2013, JNS Collection Service Co., Ltd., was merged by the Company.
3. On July 1, 2013, JACCS Information System Service Co., Ltd., was merged by the Company.
4. On August 1, 2013, JACCS Business Support Co., Ltd., was merged by JACCS Total Service Co., Ltd.
5. On September 1, 2013, the Company sold all shares of SUPPORT CORPORATION.
(2) Name of non-consolidated subsidiary
JACCS INTERNATIONAL (Hong Kong) Co., Ltd.
(Reason for excluding from the scope of consolidation)
This non-consolidated subsidiary is small in size and its total assets, operating revenue, net income/loss for the Company’s equity interest and retained
earnings for the Company’s equity interest do not have a signifi cant impact on the consolidated fi nancial statements.
2. Application of the Equity Method
(1) Number of equity-method affiliates: 1
PT Sasana Artha Finance
(2) Name of non-consolidated subsidiary not accounted for by the equity method
JACCS INTERNATIONAL (Hong Kong) Co., Ltd.
(Reason for excluding from application of the equity method)
The equity method does not apply to the above subsidiary because its net income/loss and retained earnings for the Company’s equity interest do not have a
signifi cant impact on the consolidated fi nancial statements on an individual basis, nor on an aggregate basis.
(3) Matters of particular importance related to procedures for the application of the equity method
Owing to the difference in fi scal year-end date of PT Sasana Artha Finance from the consolidated fi scal year-end, the fi nancial statements of PT Sasana Artha
Finance with its individual balance sheet date is used in preparing the consolidated fi nancial statements.
3. Fiscal Years of Consolidated Subsidiaries
The fi scal year-end date of JACCS International Vietnam Finance Co., Ltd. is December 31. The fi nancial statements of JACCS International Vietnam Finance
Co., Ltd. as of and for the year ended December 31 is used in preparing the consolidated fi nancial statements of the Company. All material transactions that
occur during the period from January 1 to March 31 are adjusted for in the consolidation process.
JACCS CO., LTD. | Annual Report 201434
4. Summary of Signifi cant Accounting Policies
(1) Basis and method of valuation of signifi cant assets
1. Securities
Available-for-sale securities with fair market value readily available are stated at fair value as of the balance sheet date. The related valuation differences are
directly included in net assets and the cost of available-for-sale securities sold is determined by the moving-average method. Available-for-sale securities
without fair market value readily available are stated at the moving-average cost.
2. Derivatives
Derivatives are stated at fair value.
(2) Depreciation of signifi cant depreciable assets
1. Property, plant and equipment (except for leased assets)
The declining-balance method is used, however, the straight-line method is used for buildings (excluding building fi xtures) acquired on or after April 1, 1998.
2. Intangible assets (except for leased assets)
Software for internal use is amortized over the estimated useful lives using the straight-line method (the maximum period being 5 years).
3. Leased assets
Leased assets related to fi nance leases without transferring ownership are depreciated over the lease period as useful life using the straight-line method with
no residual value.
(3) Accounting for signifi cant allowance and provisions
1. Allowance for doubtful accounts
Allowance for doubtful accounts is provided for possible losses on the collection of receivables. The amount of the allowance for general receivables is based
on the past write-off ratio. For certain receivables, such as the ones from debtors whose solvency is in doubt, the recoverability of each receivable is examined
individually and the estimated unrecoverable amounts are recognized as the allowance.
2. Provision for bonuses
For payment of bonuses to employees and executive offi cers having employee positions, provision for bonuses is provided for in the amount that is expected
to be paid.
3. Provision for point card certifi cates
For covering the cost of future card-point redemption when credit card members use their card-points given by the Company, the provision for point card
certifi cates is provided for in the amount that is expected to be used as of the balance sheet date.
4. Provision for directors’ retirement benefi ts
For payment of retirement benefi ts to directors and corporate auditors, provision for directors’ retirement benefi ts is provided for in the amount required to be
accrued at year-end in accordance with internal rules. Provided amounts on the consolidated balance sheets are solely for consolidated subsidiaries.
5. Provision for loss on interest repayment
Provision for loss on interest repayment is provided in order to prepare for requests for the repayment of interest on loans exceeding the Interest Rate Restriction
Act in the future, in the amount deemed necessary based on an estimate of the future repayment amount in consideration of the actual past results.
(4) Accounting method for employee retirement benefi ts
1. Method of period attribution for estimated retirement benefi ts
To calculate the employee retirement benefi t obligations, the point criteria is applied in attributing the estimated retirement benefi ts up to the end of this
consolidated fi scal year.
2. Methods for amortizing actuarial differences and past service costs
Past service costs are amortized using the straight-line method over a certain number of years (5 years) within the average remaining service period of the
employees as of the time such costs are incurred. With respect to actuarial differences for each consolidated fi scal year, the amount divided proportionally using
the straight-line method over a certain number of years (5 years) within the average remaining service period of employees as of the arising of such differences is
amortized from the immediately following consolidated fi scal year.
(5) Recognition of operating revenues
a. Revenue from individual customers
Revenue from individual customers is recognized at the time of payment due date by the following method:
• Revenue from credit card business: remaining debt balance method
• Revenue from installment sales fi nance business: remaining debt balance method
• Revenue from credit guarantee: remaining debt balance method(partially at time of concluding the guarantee contract)
• Financing revenue: remaining debt balance method
JACCS CO., LTD. | Annual Report 2014 35
b. Commission from member stores
Commission from member stores is recognized at the time of computing volume of new contracts.
(6) Translation of signifi cant assets and liabilities denominated in foreign currencies into yen
Monetary assets and liabilities denominated in foreign currencies have been translated into yen at the exchange rates in effect at the fi scal year-end. The
resulting exchange gain or loss is charged or credited to income. Assets and liabilities of the overseas subsidiary have been translated into yen at the
exchange rates in effect as of the settlement date of them, and revenues and expenses of the overseas subsidiary have been translated into yen at the
average rates prevailing during the period. The resulting translation differences are included in “foreign currency translation adjustment” in net assets.
(7) Accounting for signifi cant hedging activities
a. Accounting for hedging activities
When derivative fi nancial instruments are used as hedges and meet certain hedging criteria, gains or losses resulting from changes in the fair values of the
derivative fi nancial instruments are deferred until the corresponding losses or gains on the hedged items are recognized.
Interest rate swaps which qualify for exceptional treatments are accounted for according to the exceptional treatments.
b. Hedging instruments and hedged items
Hedging instruments...........Derivatives transactions (interest rate swap)
Hedged items......................Loans payable
c. Hedging policy
Derivatives transactions are utilized to reduce risks arising from interest rate and foreign exchange fl uctuations in the future.
d. Assessment of the effi cacy of hedging activities
The aggregate of changes in cash fl ows from the hedging instruments and the hedged items is compared to every quarterly account, and evaluation of the
effectiveness of hedging activities is made. With regard to interest rate swaps accounted for according to the exceptional treatments, assessment of the
effectiveness is omitted.
(8) Amortization of negative goodwill
Negative goodwill is amortized equally over fi ve years.
(9) Other signifi cant basis of presenting the consolidated fi nancial statements
Accounting for consumption taxes
Consumption taxes are excluded from each transaction amount. Consumption taxes paid at acquisition of noncurrent assets, which are not deducted on the
consumption taxes calculation, are recorded as “Other” in investments and other assets and amortized equally over fi ve years.
Changes in Accounting Policies
Effective from the year ended March 31, 2014, the Company and its consolidated domestic subsidiaries have applied the Accounting Standard for Retirement
Benefits (ASBJ Statement No. 26, May 17, 2012 (hereinafter, the “Accounting Standard”)) and the Guidance on Accounting Standard for Retirement Benefits
(ASBJ Guidance No. 25, May 17, 2012 (hereinafter, the “Guidance”)) except for the article 35 of the Accounting Standard and the article 67 of the Guidance and
actuarial gains and losses and past service costs that are yet to be recognized have been recognized and the difference between retirement benefit obligations
and plan assets has been recognized as a net defined benefit asset.
In accordance with article 37 of the Accounting Standard, the effect of the change in accounting policies arising from initial application has been recognized
in remeasurements of defined benefit plans in accumulated other comprehensive income.
As a result of the application, a net defined benefit asset in the amount of ¥426 million (US$4,176 thousand) has been recognized, deferred tax liabilities
has increased by ¥151 million (US$1,480 thousand) and accumulated other comprehensive income has increased by ¥274 million (US$2,686 thousand)
at this year end. However, remeasurements of defined benefit plans for an equity method company abroad are not included in the amount affected by this
accounting policy change.
In addition, net assets per share has increased by ¥1.60 (US$0.01).
JACCS CO., LTD. | Annual Report 201436
Change in Method of Presentation
Prior to April 1, 2013, “Purchase of investments in subsidiaries resulting in change in scope of consolidation” was disclosed separately in cash flows from
investing activities of the consolidated statement of cash flows. Since during this fiscal year ended March 31, 2014, the items of this account have been
reviewed with the objective of increasing clarity, such amount is now included in “Purchase of investment securities” within cash flows from investing
activities of the consolidated statement of cash flows. The amount included in “Purchase of investment securities” for the year ended March 31, 2013, was
¥4 million (US$39 thousand).
Notes to the Consolidated Balance Sheets
Notes: Comparative information is not required to be disclosed under Japanese Companies Act, but is disclosed for the convenience of readers.
1. Pledged Assets
Millions of YenThousands ofU.S. Dollars
2014 2013 2014
Assets pledged as collateral:
Accounts receivable-installment ¥ 284,259 ¥ 320,401 $ 2,786,852
Debt secured by the above collateral:
Short-term loans payable ¥ 59,925 ¥ 78,075 $ 587,500
Current portion of long-term loans payable 34,324 70,263 336,509
Long-term loans payable 190,772 172,501 1,870,313
Total ¥ 285,021 ¥ 320,839 $ 2,794,323
2. Guarantee obligations
The Company has a guarantee obligation in relation to the borrowings from fi nancial institutions of a company outside the scope of consolidation.
PT Sasana Artha Finance ¥1,958 million (US$19,196 thousand)
(220,000 million Indonesian rupiahs)
Foreign currency-denominated guarantee obligations are translated into yen at the exchange rate prevailing on the account closing date.
Note: Comparative information is not required to be disclosed under Japanese Companies Act, but is disclosed for the convenience of readers.
3. Deferred Installment Income
Millions of YenThousands ofU.S. Dollars
2014 2013 2014
Credit card business ¥ 834 ¥ 783 $ 8,176
Installment sales fi nance 29,907 22,623 293,205
Credit guarantee 62,228 61,032 610,078
Financing 32 47 313
Other 0 0 0
Total ¥ 93,002 ¥ 84,487 $ 911,784
JACCS CO., LTD. | Annual Report 2014 37
Notes to the Consolidated Statements of Changes in Net Assets
1. Type and Number of Shares Issued as of March 31, 2014 and 2013
2014 2013
Common stock: 175,395,808 shares 175,395,808 shares
2. Matters Concerning Dividends
2014
(1) Cash dividends paid
(2) Of the dividends whose record date belongs to the current fi scal year, the dividend whose effective date falls in the following fi scal year is as follows:
Resolution Type of shares Total amount of dividend Dividend per share Record date Effective date
June 27, 2013 Ordinary General
Meeting of Shareholders Common stock
¥1,050 million
(US$10,294 thousand)
¥6.00
(US$0.058) March 31, 2013 June 28, 2013
November 5, 2013
Board of Directors’ Meeting Common stock
¥1,049 million
(US$10,284 thousand)
6.00
(US$0.058) September 30, 2013 December 5, 2013
Resolution Type of shares Dividend source Total amount of dividend Dividend per share Record date Effective date
June 26, 2014 Ordinary General
Meeting of Shareholders Common stock Retained earnings
¥1,383 million
(US$13,558 thousand)
¥8.00
(US$0.078) March 31, 2014 June 27, 2014
Note: The total dividend amount planned for a resolution at the Ordinary General Meeting of Shareholders held on June 26, 2014, includes ¥12 million (US$117 thousand) for The
Master Trust Bank of Japan, Ltd. (Employee Shareholding ESOP Trust Account 75579).
Notes: The total dividend amount approved by a resolution of the Ordinary General Meeting of Shareholders held on June 27, 2013, includes ¥11 million (US$107 thousand) for The
Master Trust Bank of Japan, Ltd. (Employee Shareholding ESOP Trust Account 75579).
The total dividend amount approved by a resolution of the Board of Directors on November 5, 2013, includes ¥10 million (US$98 thousand) for The Master Trust Bank of
Japan, Ltd. (Employee Shareholding ESOP Trust Account 75579).
2013
(1) Cash dividends paid
Resolution Type of shares Total amount of dividend Dividend per share Record date Effective date
June 28, 2012 Ordinary General
Meeting of ShareholdersCommon stock ¥1,750 million ¥10.00 March 31, 2012 June 29, 2012
November 5, 2012
Board of Directors’ MeetingCommon stock ¥874 million ¥5.00 September 30, 2012 December 10, 2012
(2) Of the dividends whose record date belongs to the fi scal year ended March 31, 2013, the dividend whose effective date falls in the following fi scal year is as follows:
Resolution Type of shares Dividend source Total amount of dividend Dividend per share Record date Effective date
June 27, 2013 Ordinary General
Meeting of ShareholdersCommon stock Retained earnings ¥1,050 million ¥6.00 March 31, 2013 June 28, 2013
Note: The total dividend amount approved by a resolution of the Ordinary General Meeting of Shareholders held on June 27, 2013, includes ¥11 million for The Master Trust Bank of
Japan, Ltd. (Employee Shareholding ESOP Trust Account 75579).
3. Subscription rights to shares as of March 31, 2014 and 2013
2014 2013
Common stock: 385,000 shares 289,000 shares
Note: Comparative information is not required to be disclosed under Japanese Companies Act, but is disclosed for the convenience of readers.
JACCS CO., LTD. | Annual Report 201438
Note: Comparative information is not required to be disclosed under Japanese Companies Act, but is disclosed for the convenience of readers.
Reconciliation of cash and cash equivalents in the consolidated statements of cash fl ows and the consolidated balance sheets
Millions of YenThousands ofU.S. Dollars
2014 2013 2014
Cash and deposits ¥ 70,883 ¥ 95,968 $ 694,931
Less: Time deposits with deposit term of over 3 months — (247) —
Cash and cash equivalents ¥ 70,883 ¥ 95,720 $ 694,931
Notes to the Consolidated Statements of Cash Flows
Notes to Financial Instruments
1. Outline of Utilization of Financial Instruments
(1) Management policies
The Group operates consumer credit services including installment sales, credit card, credit guarantee and fi nancing. To do such business, the Group
borrows money from banks as indirect fi nance, and raises money by issuing bonds and commercial papers in consideration of market conditions and length
of fi nance. Thereby, the Group holds fi nancial assets and liabilities having interest rate fl uctuation risks. To avoid its unfavorable effect, the Company applies
asset liability management (ALM) using derivatives transactions as a measure. In addition, a consolidated subsidiary operates leasing business.
(2) Contents of fi nancial instruments and their risks
Financial assets held by the Group, which are mainly installment receivables on domestic installment sales fi nance and credit card business, are exposed to
the credit risks of the corresponding customers’ default of payments.
In terms of investment securities, which are mainly composed of equity stocks related to business or capital tie-ups and the like with business partners,
these assets are exposed to the credit risk of the issuer and the risk of market value fl uctuations.
Loans payable, bonds payable and commercial papers are exposed to liquidity risk. There exists the possibility that the Group may have diffi culty making
payment on a due date, such as the Company may not be able to raise funds in the markets under certain circumstances. Loans payable with variable
interest rates expose the Company to the risk of interest rate fl uctuation. To avoid such risks, a part of loans payable is hedged by interest swap transactions.
Deposits at banks in foreign currencies are exposed to fl uctuation of foreign exchanges.
Derivatives transactions include interest swap transactions which are carried as a measure of ALM. Interest fl uctuation risks on loans payable hedged
by such hedging instruments are accounted for by the hedge accounting method. The effectiveness of hedging is assessed by comparing and evaluating
accumulated cash fl ow change of hedged items and that of hedging instruments during the period from the start of hedging and assessment time. In
addition, the Company uses exceptional treatments permitted for interest rate swaps hedging long-term loans payable.
(3) Risk management system of fi nancial instruments
1. Control of credit risk
The Group establishes and operates credit control systems which practice credit assessment, establishment of credit limit, credit information control,
internal rating, setting of guarantee and mortgage and response to loans in trouble in conformity with the rules of credit control for each installment
loan. These credit controls are carried out by each credit investigation section and each area control division. In addition, conditions of credit control are
reviewed by the Credit Supervision & Operation Department, the Credit Administration Department and the Inspection Department.
2. Control of market risk
a. Control of interest risk
The Group controls interest fl uctuation risk by means of ALM. Regulations and internal rules of ALM specify risk control measures and procedures and
the results of control are confi rmed by the Board of Directors in conformity with ALM policies decided by the ALM Committee. The Finance Department
analyzes daily interest rate sensitivity based on estimated interest rates and makes a report every other month to the ALM Committee. Interest fl uctuation
risks are hedged by interest rate swaps as a part of ALM.
b. Control of foreign exchange risk
The Group utilizes partially forward contracts, as for each matter, to cope with foreign exchange fl uctuation risks, and there is not the handling now, but
may use part forward exchange contracts in future.
c. Control of market fl uctuation risk
As investment securities are mainly composed of equity shares issued by companies which have relations with the Company in transactions or in capital
coalition, market environment and fi nancial conditions of the issuing companies are monitored periodically. The Company carries out ongoing monitoring
of prices of investment securities. By considering the circumstances comprehensively and reporting these to senior management, the Company aims to
reduce the price fl uctuation risk of its equity securities holdings.
JACCS CO., LTD. | Annual Report 2014 39
d. Derivatives transactions
Each section of execution of derivatives transactions, assessment of hedge effectiveness and operation control is separated to enhance internal checks.
Operations are carried out in conformity with regulations and internal rules.
e. Quantitative information relating to market risk
Financial instruments for trading purposes
The Company does not hold any fi nancial instruments for trading purposes.
Financial instruments for other than trading purposes
The fi nancial instruments most affected by the interest rate risk that is a main risk variable are mainly “short-term loans payable,” “long-term loans
payable,” “bonds payable” and “interest swap transactions.”
As for these fi nancial instruments, the Company calculates the amount of infl uence that gives profi t and loss of six months for the time being, using the
rational expected band of the interest rate of around six months after the term end. The Company uses the calculated amount of infl uence in a quantitative
analysis on managing the change risk of the interest rate. In calculations of the amount of infl uence concerned, the Company separates the fi nancial
instruments concerned into the fi xed interest rate group and the fl oating interest rate group. The Company then calculates the amount of infl uence that
gives profi t and loss using the interest rate band during each appropriate period depending on an interest rate date. The Company assumes the risk
variable except for the interest rate is constant. That is, the Company does not consider correlation between interest rate and other risk variables.
As of March 31, 2014, the Company calculates that if the index interest rate had been higher by 10 basis point (0.1%), fi nancial expenses would
increase ¥179 million (US$1,754 thousand).
However, infl uence exceeding the amount of calculation may occur if a fl uctuation occurs beyond the rational expected band of the interest rate.
3. Control of liquidity risk on fundraising
The Group controls timely fund operations of the total group by ALM and manages liquidity risk by diversifi cation of fundraising measures, acquisition of
commitment lines from multiple fi nancial institutions and adjustment of length of fundraising in consideration of the market environment.
(4) Supplementary explanation to fair values of fi nancial instruments
Fair values of fi nancial instruments are composed of market prices and rationally computed prices in case market prices are not available. As the
computation of prices is subject to certain presumptions, prices may change under different presumptions. Contractual values of derivatives transactions in “2.
Fair Values of Financial Instruments” do not represent the market risks on derivatives themselves.
2. Fair Values of Financial Instruments
The tables below show the amounts of fi nancial instruments recorded in the consolidated balance sheets and their fair values as of March 31, 2014 and 2013,
as well as their differences. Financial instruments of which fair values were hardly available are not represented herein (See Note 2).
March 31, 2014
Millions of Yen
Consolidated balance sheet amount
Fair value Differences
Cash and deposits ¥ 70,883 ¥ 70,883 ¥ —
Accounts receivable-installment: 943,782
Allowance for doubtful accounts (13,472)
Deferred installment income (30,541)
899,768 927,193 27,425
Investment securities:
Available-for-sale securities 13,925 13,925 —
Total assets ¥ 984,578 ¥1,012,003 ¥ 27,425
Short-term loans payable ¥ 150,679 ¥ 150,679 ¥ —
Commercial papers 148,700 148,700 —
Bonds payable*1 47,300 48,098 798
Long-term loans payable*2 466,934 470,206 3,271
Total liabilities ¥ 813,613 ¥ 817,683 ¥ 4,070
Derivatives transactions*3:
Hedge accounting applied ¥ (49) ¥ (49) ¥ —
Total derivatives transactions ¥ (49) ¥ (49) ¥ —
Other:
Loan guarantee contracts ¥ 209,229
*1 Current portion of long-term loans payable is included in long-term loans payable.
*2 Figures presented are net receivable or payable totals resulting from derivatives transactions. If the total is a payable amount, the fi gure is shown in ( ).
JACCS CO., LTD. | Annual Report 201440
March 31, 2013
Millions of Yen
Consolidated balance sheet amount
Fair value Differences
Cash and deposits ¥ 95,968 ¥ 95,968 ¥ —
Accounts receivable-installment: 832,684
Allowance for doubtful accounts (15,733)
Deferred installment income (23,318)
793,632 824,485 30,853
Investment securities:
Available-for-sale securities 13,950 13,950 —
Total assets ¥ 903,550 ¥ 934,403 ¥ 30,853
Short-term loans payable ¥ 149,829 ¥ 149,829 ¥ —
Commercial papers 88,800 88,800 —
Bonds payable*1 32,300 32,442 142
Long-term loans payable*2 467,028 472,299 5,271
Total liabilities ¥ 737,957 ¥ 743,371 ¥ 5,414
Derivatives transactions*3:
Hedge accounting applied ¥ (59) ¥ (59) ¥ —
Total derivatives transactions ¥ (59) ¥ (59) ¥ —
Other:
Loan guarantee contracts ¥ 209,455
*1 Current portion of bonds payable is included in bonds payable.
*2 Current portion of long-term loans payable is included in long-term loans payable.
*3 Figures presented are net receivable or payable totals resulting from derivatives transactions. If the total is a payable amount, the fi gure is shown in ( ).
March 31, 2014
Thousands of U.S. Dollars
Consolidated balance sheet amount
Fair value Differences
Cash and deposits $ 694,931 $ 694,931 $ —
Accounts receivable-installment: 9,252,764
Allowance for doubtful accounts (132,078)
Deferred installment income (299,421)
8,821,254 9,090,127 268,872
Investment securities:
Available-for-sale securities 136,519 136,519 —
Total assets $ 9,652,725 $ 9,921,598 $ 268,872
Short-term loans payable $ 1,477,245 $ 1,477,245 $ —
Commercial papers 1,457,843 1,457,843 —
Bonds payable*1 463,725 471,549 7,823
Long-term loans payable*2 4,577,784 4,609,862 32,068
Total liabilities $ 7,976,598 $ 8,016,500 $ 39,901
Derivatives transactions*3:
Hedge accounting applied $ (480) $ (480) $ —
Total derivatives transactions $ (480) $ (480) $ —
Other:
Loan guarantee contracts $ 2,051,264
*1 Current portion of long-term loans payable is included in long-term loans payable.
*2 Figures presented are net receivable or payable totals resulting from derivatives transactions. If the total is a payable amount, the fi gure is shown in ( ).
Note 1: Measurement of fair value of fi nancial instruments and matters on securities and derivatives transactions
Assets:
(1) Cash and deposits
The book values are used as the fair values since all the deposits are short-term and the fair values approximate their book values.
JACCS CO., LTD. | Annual Report 2014 41
(2) Accounts receivable-installment
Fair values of accounts receivable-installment are computed by discounting probable collection amounts of principals and interest by secure interest rates
corresponding to the remaining period.
(3) Investment securities
Fair market values readily available are used as the fair values of available-for-sale securities.
Liabilities:
(1) Short-term loans payable
These instruments are settled in a short time and fair value is closely equal to book value. The fair value is, therefore, stated at book value.
(2) Commercial papers
These instruments are settled in a short time and fair value is closely equal to book value. The fair value is, therefore, stated at book value.
(3) Bonds payable
Fair values of bonds payable are measured at market prices.
(4) Long-term loans payable
Book values of long-term loans payable with variable interest rate are deemed fair values as the prices refl ect market timely and credit conditions of the
Company have not changed signifi cantly after time of borrowing. Book values of long-term loans payable with fi xed interest are computed by discounting
probable payment amounts of principals and interest by expected interest rate of similar borrowing, by group of length of borrowing.
March 31, 2014 Millions of Yen
Accounting for hedging activities Type of derivatives transactions Hedged itemsContractual value
Fair valueTotal Over 1 year
PrincipleInterest rate swap
Payment fi xed/Receipt variableShort-term loans payable ¥ 4,000 ¥ 4,000 ¥ (49)*1
Total ¥ 4,000 ¥ 4,000 ¥ (49)
March 31, 2014 Thousands of U.S. Dollars
Accounting for hedging activities Type of derivatives transactions Hedged itemsContractual value
Fair valueTotal Over 1 year
PrincipleInterest rate swap
Payment fi xed/Receipt variableShort-term loans payable $ 39,215 $ 39,215 $ (480)*1
Total $ 39,215 $ 39,215 $ (480)
March 31, 2013 Millions of Yen
Accounting for hedging activities Type of derivatives transactions Hedged itemsContractual value
Fair valueTotal Over 1 year
PrincipleInterest rate swap
Payment fi xed/Receipt variableShort-term loans payable ¥ 5,000 ¥ 4,000 ¥ (59)*1
Exceptional treatment of
interest rate swap
Interest rate swap
Payment fi xed/Receipt variableLong-term loans payable 1,500 — —*2
Total ¥ 6,500 ¥ 4,000 ¥ (59)
Derivatives transactions:
Contractual values or principal equivalents under the contracts of derivatives transactions as of March 31, 2014 and 2013, accounted for by hedge accounting,
are shown below, by each accounting for hedging activity.
*1 Fair value is based on the price presented by the related fi nancial institutions.
*2 As fair value of interest rate swap accounted for by exceptional treatment is measured along with long-term loans payable (hedged item), the details are shown in the above “Liabilities (4).”
JACCS CO., LTD. | Annual Report 201442
Other:
(Credit guarantee contracts)
Market values of credit guarantee contracts are measured by discounting collectible amounts of guarantee commissions, less uncollectible portion by
subrogation estimated by possibility of guarantee fulfi llment and mortgage value, at the secure interest rate corresponding to length of remaining periods.
Note 2: Financial instruments of which fair market values are hardly available are as follows.
Fair values of the above shares without market prices are not represented herein as calculation of their fair values are hardly available. For the year ended March 31, 2013,
impairment loss of the unlisted shares amounted to ¥3 million.
Millions of YenThousands ofU.S. Dollars
2014 2013 2014
Description Book value Book value Book value
Unlisted shares ¥ 2,296 ¥ 2,244 $ 22,509
Note 3: Maturity of monetary assets after the balance sheet date
March 31, 2014 Millions of Yen
Within one year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years
Cash and deposits ¥ 70,883 ¥ — ¥ — ¥ — ¥ — ¥ —
Accounts receivable-installment 327,937 153,006 109,746 73,889 47,409 231,791
Total ¥ 398,821 ¥ 153,006 ¥ 109,746 ¥ 73,889 ¥ 47,409 ¥ 231,791
March 31, 2013 Millions of Yen
Within one year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years
Cash and deposits ¥ 95 968 ¥ — ¥ — ¥ — ¥ — ¥ —
Accounts receivable-installment 298,917 136,698 96,715 66,875 37,357 196,119
Total ¥ 394,886 ¥ 136,698 ¥ 96,715 ¥ 66,875 ¥ 37,357 ¥ 196,119
Note 4: Repayment schedule of bonds payable, long-term loans payable and other interest-bearing liabilities after the balance sheet date
March 31, 2014 Millions of Yen
Within one year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years
Short-term loans payable ¥ 150,679 ¥ — ¥ — ¥ — ¥ — ¥ —Commercial papers 148,700 — — — — —Bonds payable — 2,300 — — 15,000 30,000
Long-term loans payable 86,341 106,700 143,426 63,715 36,850 29,900
Total ¥ 385,720 ¥ 109,000 ¥ 143,426 ¥ 63,715 ¥ 51,850 ¥ 59,900
March 31, 2013 Millions of Yen
Within one year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years
Short-term loans payable ¥ 149,829 ¥ — ¥ — ¥ — ¥ — ¥ —Commercial papers 88,800 — — — — —Bonds payable 30,000 — 2,300 — — —Long-term loans payable 110,208 86,341 106,700 86,261 58,715 18,800
Total ¥ 378,837 ¥ 86,341 ¥ 109,000 ¥ 86,261 ¥ 58,715 ¥ 18,800
March 31, 2014 Thousands of U.S. Dollars
Within one year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years
Cash and deposits $ 694,931 $ — $ — $ — $ — $ —Accounts receivable – installment 3,215,068 1,500,058 1,075,941 724,401 464,794 2,272,460
Total $ 3,910,009 $ 1,500,058 $ 1,075,941 $ 724,401 $ 464,794 $ 2,272,460
JACCS CO., LTD. | Annual Report 2014 43
Other Notes
1. Income Taxes
(1) Signifi cant components of deferred tax assets and liabilities as of March 31, 2014 and 2013 are as follows:
(2) Modifi cations to the amount of deferred tax assets and liabilities due to changes of corporate taxation rates
Due to the promulgation of the “Act for Partial Amendment of the Income Tax Act, etc.” (Act No.10, 2014) on March 31, 2014, the Special Reconstruction Corporation
Tax will not be imposed from the fi scal year starting from April 1, 2014 or later. As a result, the effective statutory tax rate to be used in the calculation of deferred
tax assets and liabilities, in association with temporary differences that are expected to be settled in the fi scal year starting from April 1, 2014, has been revised to
35.5% from 37.9% of the prior fi scal year. The effect of these changes for this consolidated fi scal year is immaterial on the consolidated fi nancial statement.
(Per share information)Yen U.S. Dollars
2014 2013 2014
Net assets per share ¥ 715.38 ¥ 678.38 $ 7.01
Net income per share 37.71 43.72 0.36
Note: Comparative information is not required to be disclosed under Japanese Companies Act, but is disclosed for the convenience of readers.
Millions of YenThousands ofU.S. Dollars
2014 2013 2014
Deferred tax assets:
Operating loss carryforwards ¥ 625 ¥ 4,012 $ 6,127
Provision for bonuses 939 1,004 9,205
Provision for point card certifi cates 899 810 8,813
Allowance for doubtful accounts 31 26 303
Valuation difference on investments in subsidiaries — 4,555 —
Provision for loss on interest repayment 468 537 4,588
Investment securities 490 494 4,803
Depreciation 579 388 5,676
Other 782 1,273 7,666
Less amounts offset against deferred tax liabilities (1,083) (2,625) (10,617)
Subtotal 3,733 10,477 36,598
Valuation allowance (1,220) (4,814) (11,960)
Total deferred tax assets ¥ 2,512 ¥ 5,662 $ 24,627
Deferred tax liabilities:
Prepaid pension cost ¥ — ¥ (1,573) $ —
Net defi ned benefi t asset (1,478) — (14,490)
Valuation difference on available-for-sale securities (1,442) (1,051) (14,137)
Other (0) (1) (0)
Less amounts offset against deferred tax assets 1,083 2,625 10,617
Total deferred tax liabilities ¥ (1,838) ¥ — $ (18,019)
Net deferred tax assets ¥ 673 ¥ 5,662 $ 6,598
Note: Comparative information is not required to be disclosed under Japanese Companies Act, but is disclosed for the convenience of readers.
March 31, 2014 Thousands of U.S. Dollars
Within one year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over 5 years
Short-term loans payable $ 1,477,245 $ — $ — $ — $ — $ —Commercial papers 1,457,843 — — — — —Bonds payable — 22,549 — — 147,058 294,117
Long-term loans payable 846,480 1,046,078 1,406,137 624,656 361,274 293,137
Total $ 3,781,568 $ 1,068,627 $ 1,406,137 $ 624,656 $ 508,333 $ 587,254
(Investment and rental properties)
Disclosure has been omitted since this is considered immaterial.
Note: Comparative information is not required to be disclosed under Japanese Companies Act, but is disclosed for the convenience of readers.
JACCS CO., LTD. | Annual Report 201444
2. Retirement Benefi ts
2014
(1) Overview of the retirement benefi t plans adopted
To provide for employee retirement benefi ts, the Company and its consolidated subsidiaries operate a funded defi ned-benefi t plan and a defi ned contribution
plan. Under the defi ned benefi t corporate pension plan (fully funded plan), a lump sum or pension are paid in accordance with the employee’s salary and the
length of service.
(2) Defi ned benefi t plans
① Movement in retirement benefi t obligations, except plan applied simplifi ed method
Millions of Yen Thousand of U.S. Dollars
2014 2014
Balance at April 1, 2013 ¥19,264 $188,862
Service cost 1,047 10,264
Interest cost 192 1,882
Actuarial loss 85 833
Benefi ts paid (756) (7,411)
Balance at March 31, 2014 ¥19,834 $194,450
② Movement in plan assets, except plan applied simplifi ed method
Millions of Yen Thousand of U.S. Dollars
2014 2014
Balance at April 1, 2013 ¥22,428 $219,882
Expected return on plan assets 448 4,392
Actuarial gain 810 7,941
Contributions paid by the employer 1,068 10,470
Benefi ts paid (756) (7,411)
Balance at March 31, 2014 ¥23,999 $235,284
③ Movement in liability for retirement benefi ts of plan applied simplifi ed method
Millions of Yen Thousand of U.S. Dollars
2014 2014
Balance at April 1, 2013 ¥ 24 $ 235
Retirement benefi t costs 1 9
Benefi ts paid — —
Contributions paid by the employer — —
Other (25) (245)
Balance at March 31, 2014 ¥ — $ —
④ Reconciliation from retirement benefi t obligations and net defi ned benefi t liability (asset)
Millions of Yen Thousand of U.S. Dollars
2014 2014
Funded retirement benefi t obligations ¥ 19,834 $ 194,450
Pension assets (23,999) (235,284)
(4,165) (40,833)
Unfunded retirement benefi t obligations — —
Net defi ned benefi t liability (asset) at March 31, 2014 (4,165) (40,833)
Liabilities for retirement benefi ts — —
Assets for retirement benefi ts (4,165) (40,833)
Net defi ned benefi t liability (asset) at March 31, 2014 ¥ (4,165) $ (40,833)
JACCS CO., LTD. | Annual Report 2014 45
2. Long-term expected rate of return
Current and target asset allocations, historical and expected returns on various categories of plan assets have been considered in determining the long-term
expected rate of return.
⑦ Plan assets
1. Plan assets comprise:
2014
Bonds 43%
Equity securities 24%
General account 28%
Cash and deposits 2%
Other 3%
Total 100%
(3) Defi ned contribution plan
The required contribution amount for the Company and its consolidated subsidiaries to the defi ned contribution plan is ¥458 million (U.S.$4,490 thousand).
⑧ Actuarial assumptions
The principal actuarial assumptions at March 31, 2014 follow:
2014
Discount rate 1.0%
Long-term expected rate of return 2.0%
⑤ Retirement benefi t costs
Millions of Yen Thousand of U.S. Dollars
2014 2014
Service cost ¥1,047 $10,264
Interest cost 192 1,882
Expected return on plan assets (448) (4,392)
Net actuarial loss amortization 810 7,941
Past service costs amortization — —
Retirement benefi t costs based on the simplifi ed method 1 9
Other 30 294
Total retirement benefi t costs for the fi scal year ended March 31, 2014 ¥1,633 $16,009
⑥ Remeasurements of defi ned benefi t plans
Millions of Yen Thousand of U.S. Dollars
2014 2014
Past service costs that are yet to be recognized ¥ — $ —
Actuarial gains and losses that are yet to be recognized (426) (4,176)
Total balance at March 31, 2014 ¥(426) $(4,176)
JACCS CO., LTD. | Annual Report 201446
2013
(1) Overview of the retirement benefi t plan adopted
The Company and its domestic consolidated subsidiaries have a defi ned benefi t corporate pension plan as its defi ned-benefi t plan. There are also cases when
an employee is given a severance pay premium on leaving the Company.
(2) Projected benefi t obligation
Note: Domestic consolidated subsidiaries apply the simplifi ed method for calculating projected benefi t obligation.
(3) Retirement benefi t expenses
Millions of Yen
2013
① Projected benefi t obligation ¥ (19,288)
② Pension assets 22.428
③ Unfunded projected benefi t obligation (①+②) 3.139
④ Unrecognized actuarial differences 1,109
⑤ Unrecognized prior service cost —⑥ Net amount (③+④+⑤) 4,249
⑦ Prepaid pension cost 4,273
⑧ Provision for retirement benefi ts (⑥-⑦) ¥ (24)
Millions of Yen
2013
① Service costs ¥ 892
② Interest cost on projected benefi t obligation 342
③ Expected return on plan assets 393
④ Amortization of actuarial differences 1,361
⑤ Additional retirement benefi ts paid 17
⑥ Contribution to defi ned contribution pension plan 451
⑦ Retirement benefi t expenses ¥ 2,672
(4) Assumptions in calculating projected benefi t obligation2013
① Period allocation method of estimated retirement payments Point basis
② Discount rate 1.0%
③ Expected rate of return on plan assets 2.0%
④ Amortization of prior service costs 5 years
⑤ Amortization of actuarial differences 5 years
⑥ Difference incurred on accounting change Charged to income at occurrence
Notes: Comparative information is not required to be disclosed under Japanese Companies Act, but is disclosed for the convenience of readers.Figures in these consolidated fi nancial statements are rounded down to the nearest million of yen.
JACCS CO., LTD. | Annual Report 2014 47
Independent Auditor’s Report
To the Board of Directors of JACCS Co., Ltd.
We have audited the accompanying consolidated fi nancial statements of JACCS Co., Ltd. and its consolidated subsidiaries, which comprise the consolidated balance sheets
as at March 31, 2014 and the consolidated statements of income, statements of changes in net assets and statements of cash fl ows for the years then ended and the
related notes.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated fi nancial statements in accordance with accounting principles generally accepted
in Japan, and for such internal control as management determines is necessary to enable the preparation of consolidated fi nancial statements that are free from material
misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on the consolidated fi nancial statements based on our audit as independent auditor. We conducted our audit in accordance with
auditing standards generally accepted in Japan. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
fi nancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated fi nancial statements. The procedures selected
depend on our judgement, including the assessment of the risks of material misstatement of the consolidated fi nancial statements, whether due to fraud or error. In making
those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the consolidated fi nancial statements in order to design audit
procedures that are appropriate in the circumstances, while the objective of the fi nancial statement audit is not for the purpose of expressing an opinion on the effectiveness
of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the consolidated fi nancial statements.
We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated fi nancial statements present fairly, in all material respects, the fi nancial position of JACCS Co., Ltd. and its consolidated subsidiaries as at
March 31, 2014 and its fi nancial performance and cash fl ows for the years then ended in accordance with accounting principles generally accepted in Japan.
Emphasis of Matter
Without qualifying our opinion, we draw attention to the notes to the consolidated fi nancial statements, which describe the basis of accounting. The consolidated balance
sheets, consolidated statements of income, consolidated statements of changes in net assets and related notes have been translated into English from the consolidated
statutory reports required under Japanese Companies Act. The consolidated statements of cash fl ows and its related notes, which are not required under Japanese
Companies Act, are prepared and presented in accordance with accounting principles and practices applicable to the consolidated statements of cash fl ows under the
Financial Instruments Exchange Law of Japan.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated fi nancial statements with respect to the year ended March 31, 2014 are presented solely for convenience.
Our audit also included the translation of yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made on the basis described in notes to the
consolidated fi nancial statements.
Other Matter
Our fi rm and engagement partners have no interest in the Company which should be disclosed pursuant to the provisions of the Certifi ed Public Accountants Law of Japan.
June 26, 2014
Tokyo, Japan
JACCS CO., LTD. | Annual Report 201448
Corporate Directory(As of July 1, 2014)
Name: JACCS CO., LTD.
URL: http://www.jaccs.co.jp/
Founded: June 29, 1954
Paid-in Capital:
¥16,138,182,260 (US$158 million)
Registered Head Offi ce:
2-5, Wakamatsu-cho, Hakodate,
Hokkaido 040-0063, Japan
Principal Executive Offi ce:
Ebisu Neonato Bldg.,
1-18, Ebisu 4-chome, Shibuya-ku,
Tokyo 150-8932, Japan
Phone: (03) 5448-1311
Facsimile: (03) 5448-9514
Area Head Offi ces:
Hokkaido Area:
Urbannet Sapporo Bldg., 5th Floor,
1-2, Kita 1-jo Nishi 6-chome,
Chuo-ku, Sapporo 060-8577
Phone: (011) 241-0811
Tohoku Area:
Sendai MT Bldg., 13th Floor,
2-3, Tsutsuji-ga-oka 4-chome,
Miyagino-ku, Sendai 983-8544
Phone: (022) 292-4475
Kita-kanto Area:
Sino Omiya North Wing Bldg.,
18th Floor,
10-16, Sakuragi-cho 1-chome,
Omiya-ku, Saitama 330-9696
Phone: (048) 644-1722
Shutoken Area:
Shin Meguro Tokyu Bldg.,
7th Floor,
25-2, Kami-Osaki 2-chome, Shinagawa-ku,
Tokyo 141-8659
Phone: (03) 5487-4611
Chubu Area:
Nagoya Hirokoji Bldg., 9th Floor,
3-1, Sakae 2-chome, Naka-ku,
Nagoya 460-0008
Phone: (052) 221-7985
Kinki Area:
Meiji Yasuda Seimei Osaka
Midousuji Bldg., 8th Floor,
1-1 Fushimi 4-chome, Chuo-ku,
Osaka 541-0044
Phone: (06) 6201-6350
Chugoku-Shikoku Area:
Asahi Seimei Hiroshima Ebisu-cho Bldg.,
9th Floor,
4-21, Ebisu-cho, Naka-ku,
Hiroshima 730-0021
Phone: (082) 241-9955
Kyushu Area:
Hakata Ekimae Sukuea Bldg., 9th Floor,
21-28, Hakata-Ekimae 1-chome,
Hakata-ku, Fukuoka 812-0011
Phone: (092) 433-1290
Business Volume:
(Year ended March 31, 2014)
¥2,784,532 million (US$27,299 million)
Number of Employees:
(Year ended March 31, 2014)
2,660 (Parent)
3,355 (Consolidated)
Network:
Branches & Sales Offi ces: 65
Associated Companies:
Domestic:
JACCS Total Service Co., Ltd.
JACCS Lease Co., Ltd.
JACCS Loan-Collection Service Co., Ltd.
JACCS Payment Solutions Co., Ltd.
Overseas:
JACCS INTERNATIONAL (Hong Kong) Co., Ltd.
JACCS International Vietnam Finance Co., Ltd.
PT Mitra Pinasthika Mustika Finance
A
B
C
DE
F
G
H
The JACCS Services Network
JACCS divides Japan into 8 sales areas, each overseen by a
branch offi ce. In all, there are 65 JACCS offi ces nationwide.
A Hokkaido Area
B Tohoku Area
C Kita-kanto Area
D Shutoken Area
E Chubu Area
F Kinki Area
G Chugoku-Shikoku Area
H Kyushu Area
JACCS CO., LTD. | Annual Report 201450
Investor Information(As of March 31, 2014)
Number Of Shareholders:
6,983
Shares Outstanding:
175,395,808
Stock Listings:
Tokyo Stock Exchange (First Section)
Sapporo Stock Exchange
Transfer Agent:
Mitsubishi UFJ Trust and Banking Corporation
4-5, Marunouchi 1-chome, Chiyoda-ku,
Tokyo 100-8212, Japan
Principal Shareholders:
The Bank of Tokyo-Mitsubishi UFJ, Ltd. 20.00%
Japan Trustee Services Bank, Ltd. (Trust Accounts) 9.13
The Dai-ichi Mutual Life Insurance Company, Limited 3.87
Meiji Yasuda Life Insurance Company 3.63
The Master Trust Bank of Japan, Ltd. (Trust Accounts) 3.00
Shareholding Association of JACCS 2.52
JACCS Co., Ltd. Employee Stock Ownership Association 1.97
Nippon Life Insurance Company 1.67
Mitsubishi UFJ Trust and Banking Corporation 1.60
Mizuho Bank, Ltd. 1.50
Total 48.89%
Common Stock Price Range: (Tokyo Stock Exchange)
FY2011 FY2012 FY2013
High Low High Low High Low
First Quarter ¥245 ¥188 ¥310 ¥203 ¥707 ¥433
Second Quarter 274 216 313 227 609 425
Third Quarter 279 222 506 277 528 426
Fourth Quarter 306 227 627 392 533 404
Stock Held by Investor Type
Cash Dividends:
FY2011 FY2012 FY2013
Yearly ¥10.00 ¥11.00 ¥14.00
Interim — 5.00 6.00
1,000
800
600
400
200
0
Monthly Range of Stock Price (Left Scale) Nikkei 225 Stock Index (Right Scale)
(Yen)
18,000
16,000
14,000
12,000
10,000
8,000
(Yen)
FY2011 FY2012 FY2013
Financial Institutions
63.7%
Individuals and Others
16.6%
Overseas
Institutions
14.6%
Other Corporations
3.9%
Securities Companies
1.2%
JACCS CO., LTD. | Annual Report 2014 51
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