MIRA INFORM REPORT

 

 

Report Date :

02.10.2012

 

IDENTIFICATION DETAILS

 

Name :

SOLAR FRONTIER KK

 

 

 

 

Registered Office :

Daiba Frontier Bldg, 2-3-2 Daiba Minatoku Tokyo 135-0091

 

 

Country :

Japan

 

 

Financials (as on) :

31.12.2011

 

 

Date of Incorporation :

August 1994

 

 

Com. Reg. No.:

0104-01-014534 (Tokyo-Minatoku)

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Manufacturer of solar cell, CIS solar modules

 

 

No. of Employees :

760

 

RATING & COMMENTS

 

MIRA’s Rating :

Ca

 

RATING

STATUS

PROPOSED CREDIT LINE

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

Limited with full security

 

Status :

Moderate

Payment Behaviour :

Slow

Litigation :

Clear

 

 

NOTES :

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

ECGC Country Risk Classification List – June 30th, 2012

 

Country Name

Previous Rating

(31.03.2011)

Current Rating

(30.06.2012)

Japan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

JAPAN - ECONOMIC OVERVIEW

 

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop a technologically advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Japan's industrial sector is heavily dependent on imported raw materials and fuels. A tiny agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. Usually self-sufficient in rice, Japan imports about 60% of its food on a caloric basis. Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch. For three decades, overall real economic growth had been spectacular - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the after effects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2011 stood as the fourth-largest economy in the world after second-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2011. A sharp downturn in business investment and global demand for Japan's exports in late 2008 pushed Japan further into recession. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake in March disrupted manufacturing. Electricity supplies remain tight because Japan has temporarily shut down almost all of its nuclear power plants after the Fukushima Daiichi nuclear reactors were crippled by the earthquake and resulting tsunami. Estimates of the direct costs of the damage - rebuilding homes, factories, and infrastructure - range from $235 billion to $310 billion, and GDP declined almost 0.5% in 2011. Prime Minister Yoshihiko NODA has proposed opening the agricultural and services sectors to greater foreign competition and boosting exports through membership in the US-led Trans-Pacific Partnership trade talks and by pursuing free-trade agreements with the EU and others, but debate continues on restructuring the economy and reining in Japan's huge government debt, which exceeds 200% of GDP. Persistent deflation, reliance on exports to drive growth, and an aging and shrinking population are other major long-term challenges for the economy.

Source : CIA

Company name and address

 

SOLAR FRONTIER KK

REGD NAME:   Solar Frontier KK

MAIN OFFICE:  Daiba Frontier Bldg, 2-3-2 Daiba Minatoku Tokyo 135-0091 JAPAN

Tel: 03-5531-5855      Fax: 03-5531-5767

                                               

URL:                 http://www.solar-frontier.com

E-Mail address: (thru the URL)

 

 

ACTIVITIES

 

Mfg of solar cell, CIS solar modules

 

BRANCHES

 

Osaka, Nagoya, Fukuoka

 

OVERSEAS

 

Germany, USA, Saudi Arabia

 

FACTORIES

 

Miyazaki (3)

 

 

OFFICERS

 

SHIGEAKI KAMEDA, PRES                  

Shigetsune Katoh, dir

Jun Arai, dir

                                   

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY    

 

FINANCES        FAIR                 A/SALES          Yen 40,393 M

PAYMENTS SLOW                    CAPITAL           Yen 35,120 M

TREND STEADY           WORTH            Yen 21,705 M

STARTED         1994                 EMPLOYES      760

 

 

COMMENT

 

MFR OF SOLAR CELLS, OWNED BY SHOWA SHELL SEKIYU KK.

FINANCIAL SITUATION CONSIDERED FAIR TO GOOD AND RESPONSIBLE FOR ORDINARY BUSINESS ENGAGEMENTS.

           

           

HIGHLIGHTS

           

            The subject company was established on the basis of a solar cell division separated from Showa Shell Sekiyu KK, major oil distributor of Royal Dutch/Shell Group (See REGISTRATION).  Originally named as Showa Shell Solar KK and in Apr/2010 renamed as captioned.  This is a specialized mfr of CIS solar cell, CIS solar modules, systems.  Operates 3 plants in Miyazaki.  The Third Miyazaki Plant, which is the world’s largest CIS production facility (1t 900 MW) as single plant, started production in 2011.  Has three overseas subsidiaries: Germany, USA and Saudi Arabia.  The firm agreed with General Electric (GE) that it will supply GE with its proprietary CIS thin-film modules and will provide GE branded panels.  Further the firm decided to supply its CIS solar modules in projects in the Kingdom of Saudi Arabia and the Kingdom of Thailand.  With regard to R&D activities, the firm has signed an agreement to jointly develop thin film solar cell technology with IBM based on the elements copper, zing, tin, sulphur and selenium (CZTS) as next generation solar technology without using rate metals.  Goods are distributed domestically thru appointed dealership nationwide.

 

 

FINANCIAL INFORMATION

           

            The sales volume for Dec/2011 fiscal term amounted to Yen 40,393 million, a 250% up from Yen 11,537 million in the previous term.  This is attributed to the start of commercial production of Miyazaki third plant to contribute for the full term.  The operations continued in the deficit to post Yen 26,777 million recurring loss and Yen 32,393 million net losses, respectively, compared with Yen 11,537 million recurring loss and Yen 10,755 million net losses, respectively, a year ago.  Posted Yen 8,890 million extraordinary losses coming from the preparation for a new plant in Miyazaki.

 

            For the current term ending Dec 2012 the deficit operations are projected to continue to post Yen 10,000 million recurring loss and Yen 10,000 million net losses, respectively, on a 20% rise in turnover, to Yen 48,500 million.  The deficit operations are weighed down by the start-up cost of a new plant.  World-largest solar battery plant has started operation with annual output capacity of 1 gigawatt.  The appreciation of the Yen and the fall in market prices of solar cell may affect sales.   

 

The financial situation is considered FAIR to GOOD and responsible for ORDINARY business engagements. 

REGISTRATION

 

Date Registered:  Aug 1994

Regd No.:         0104-01-014534 (Tokyo-Minatoku)

Legal Status:       Limited Company (Kabushiki Kaisha)

Authorized:         2,800 million shares

Issued:                702 million shares

Sum:                   Yen 35,120 million

Major shareholders (%): Showa Shell Sekiyu* (100)

 

*.. Major oil distributor of Royal Dutch/Shell Group, founded 1942, listed Tokyo S/E, capital Yen 34,197 million, sales Yen 2,771,418 million, operating profit Yen 60,288 million, recurring profit Yen 61,807 million, net profit Yen 23,110 million, total assets Yen 1,208,442 million, net worth Yen 279,152 million, employees 5,947, pres Jun Arai

Consolidated Financials are attached (See SUPPLEMENTS)

 

Nothing detrimental is known as to the commercial morality of executives.

 

 

OPERATION

           

Activities: Manufactures CIS solar cells, CIS solar modules, systems, other (--100%).

 

Clients: [Mfrs, wholesalers] Solar Frontier America, Solar Frontier Europe, other.

Domestically distributed through appointed dealerships nationwide

No. of accounts: 1,000

Domestic areas of activities: Nationwide

Suppliers: Mfrs, wholesalers, other

 

Payment record: Slow

 

Location: Business area in Tokyo.  Office premises at the caption address are owned and maintained satisfactorily.

 

Bank References:

                        Mizuho Corporate Bank (H/O)

                        Relations: Satisfactory

 

 

FINANCES

 (In Million Yen)

 

       Terms Ending:

31/12/2012

31/12/2011

31/12/2010

31/12/2009

Annual Sales

　

48,500

40,393

11,537

4,518

Recur. Profit

　

-10,000

-26,777

-8,780

-4,306

Net Profit

　

-10,000

-32,392

-10,755

-3,531

Total Assets

　

　

124,310

102,262

42,625

Current Assets

　

　

26,128

9,134

7,411

Current Liabs

　

　

101,364

47,145

12,645

Net Worth

　

　

21,705

54,097

29,853

Capital, Paid-Up

　

　

35,120

35,120

35,120

Div.P.Share(¥)

　

　

0.00

0.00

0.00

<Analytical Data>

(%)

(%)

(%)

(%)

    S.Growth Rate

20.07

250.12

155.36

12.47

    Current Ratio

 

..

25.78

19.37

58.61

    N.Worth Ratio

..

17.46

52.90

70.04

    R.Profit/Sales

 

-20.62

-66.29

-76.10

-95.31

    N.Profit/Sales

-20.62

-80.19

-93.22

-78.15

    Return On Equity

..

..

-19.88

-11.82

 

Notes: Forecast (or estimated) figures for the 31/12/2012 fiscal term.

 

 

SUPPLEMENTS

 

CONSOLIDATED FINANCIALS OF THE PARENT, SHOWA SHELL SEKIYU KK

FINANCES: (Consolidated in million yen)

 

　

　

Terms Ending:

31/12/2011

31/12/2010

INCOME STATEMENT

 

 

 

  Annual Sales

　

2,771,418

2,346,081

 

  Cost of Sales

2,582,339

2,183,536

 

      GROSS PROFIT

189,078

162,545

 

  Selling & Adm Costs

128,790

125,844

 

      OPERATING PROFIT

60,288

36,701

 

  Non-Operating P/L

1,519

5,447

 

      RECURRING PROFIT

61,807

42,148

　

      NET PROFIT

23,110

15,956

BALANCE SHEET

 

 

 

 

  Cash

　

15,562

20,943

 

  Receivables

 

325,622

291,104

 

  Inventory

 

273,944

236,390

 

  Securities, Marketable

　

　

 

  Other Current Assets

43,576

54,538

 

      TOTAL CURRENT ASSETS

658,704

602,975

 

  Property & Equipment

454,571

473,719

 

  Intangibles

 

11,031

12,836

 

  Investments, Other Fixed Assets

84,136

103,619

 

      TOTAL ASSETS

1,208,442

1,193,149

 

  Payables

 

294,276

273,531

 

  Short-Term Bank Loans

58,340

40,381

 

　

 

　

　

 

  Other Current Liabs

285,735

354,605

 

      TOTAL CURRENT LIABS

638,351

668,517

 

  Debentures

 

35,000

35,000

 

  Long-Term Bank Loans

133,022

110,470

 

  Reserve for Retirement Allw

75,335

72,426

 

  Other Debts

　

47,582

43,730

 

      TOTAL LIABILITIES

929,290

930,143

 

      MINORITY INTERESTS

 

 

 

Common stock

34,197

34,197

 

Additional paid-in capital

22,113

22,113

 

Retained earnings

199,182

182,959

 

Evaluation p/l on investments/securities

557

1,117

 

Others

 

23,287

22,803

 

Treasury stock, at cost

(184)

(183)

 

      TOTAL S/HOLDERS` EQUITY

279,152

263,006

　

      TOTAL EQUITIES

1,208,442

1,193,149

CONSOLIDATED CASH FLOWS

 

 

 

 

Terms ending:

31/12/2011

31/12/2010

 

Cash Flows from Operating Activities

　

50,551

89,836

 

Cash Flows from Investment Activities

-24,560

-82,510

 

Cash Flows from Financing Activities

-31,159

-8,671

　

Cash, Bank Deposits at the Term End

　

14,466

19,746

ANALYTICAL RATIOS            Terms ending:

31/12/2011

31/12/2010

 

 

Net Worth (S/Holders' Equity)

279,152

263,006

 

 

Current Ratio (%)

103.19

90.20

 

 

Net Worth Ratio (%)

23.10

22.04

 

 

Recurring Profit Ratio (%)

2.23

1.80

 

 

Net Profit Ratio (%)

0.83

0.68

 

 

Return On Equity (%)

8.28

6.07

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.52.78

UK Pound

1

Rs.85.16

Euro

1

Rs.67.78

 

 

INFORMATION DETAILS

 

Report Prepared by :

PRL

 

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

--

NB

New Business

 

--

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                  Payment record (10%)

Credit history (10%)                   Market trend (10%)                                Operational size (10%)

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.