MIRA INFORM REPORT

 

 

Report Date :

01.08.2014

 

IDENTIFICATION DETAILS

 

Name :

HOCHIKI CORPORATION

 

 

Registered Office :

2-10-43 Kami-Osaki Shinagawaku Tokyo 141-0021

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014

 

 

Date of Incorporation :

April 1918

 

 

Com. Reg. No.:

0107-01-008973

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Manufacturer of fire alarm systems, smoke control systems, fire-extinguishing systems

 

 

No of Employees :

1,612

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

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

Satisfactory

 

Maximum Credit Limit :

Yen 1,652.1 Million

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

No Complaints

 

 

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 01, 2014

 

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

Japan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low Risk

 

A2

Moderate Low Risk

 

B1

Moderate Risk

 

B2

Moderate High Risk

 

C1

High Risk

C2

Very High Risk

 

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 small agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. While self-sufficient in rice production, Japan imports about 60% of its food on a caloric basis. 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. Modest economic growth continued after 2000, but the economy has fallen into recession three times since 2008. A sharp downturn in business investment and global demand for Japan's exports in late 2008 pushed Japan 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 and the ensuing tsunami in March disrupted manufacturing. The economy has largely recovered in the two years since the disaster, but reconstruction in the Tohoku region has been uneven. Prime Minister Shinzo ABE has declared the economy his government's top priority; he has overturned his predecessor's plan to permanently close nuclear power plants and is pursuing an economic revitalization agenda of fiscal stimulus, monetary easing, and structural reform. Japan joined the Trans Pacific Partnership negotiations in 2013, a pact that would open Japan's economy to increased foreign competition and create new export opportunities for Japanese businesses. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2013 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 2012. The new government will continue a longstanding debate on restructuring the economy and reining in Japan's huge government debt, which is exceeding 230% of GDP. To help raise government revenue and reduce public debt, Japan decided in 2013 to gradually increase the consumption tax to a total of 10% by the year 2015. Japan is making progress on ending deflation due to a weaker yen and higher energy costs, but reliance on exports to drive growth and an aging, shrinking population pose other major long-term challenges for the economy

 

Source : CIA

 

 

COMPANY NAME:

 

HOCHIKI CORPORATION

 

 

REGD NAME:

 

Hochiki KK

 

 

MAIN OFFICE:    

 

2-10-43 Kami-Osaki Shinagawaku Tokyo 141-0021 JAPAN                       

      Tel: 03-3444-4111     Fax: 03-3444-4118     -

 

URL:                 http://www.hochiki.co.jp

E-Mail address: (thru the URL)

 

 

ACTIVITIES: 

 

Mfg of fire alarm systems, smoke control systems, fire-extinguishing systems

 

 

BRANCHES:  

 

35 locations nationwide

 

 

OVERSEAS:  

 

USA, UK, Australia, China, Taiwan, Singapore

 

 

FACTORIES: 

 

Machida, Ibaraki, Kakuda (Miyagi-Pref)

 

 

CHIEF EXEC:

 

KENJI KANAMORI, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY:   

 

FINANCES        FAIR                             A/SALES          Yen 67,733 M

PAYMENTSNO COMPLAINTS    CAPITAL           Yen 3,798 M

TREND UP                                WORTH            Yen 21,372 M

STARTED         1918                             EMPLOYES      1,612

 

 

COMMENT:   

 

MFR OF FIRE ALARM SYSTEMS 

 

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

MAX CREDIT LIMIT: YEN 1,652.1 MILLION, 30 DAYS NORMAL TERMS

 

Business

Terms Ending

Annual Sales*

R.Profit*

N.Profit*

S.Growth

Net Worth*

   Results:

31/03/2011

60,796

2,614

1,305

(%)

18,598

(Consolidated)

31/03/2012

62,466

1,785

616

2.75

19,027

 

31/03/2013

61,763

1,921

1,007

-1.13

20,248

 

31/03/2014

67,733

2,716

1,539

9.67

21,372

 

31/03/2015

68,500

3,000

1,800

1.13

..

                        Unit: In Million Yen

Forecast figures for the 31/03/2015 fiscal term.

 

 

HIGHLIGHTS:

 

This is a Japan’s first fire alarm mfr vying with Nohmi Bosai.  Second-ranked in disaster prevention equipment.  Business developing into electronic equipment, such as CATV centralized monitoring systems.  Maintains alliance with ALSOK and Robert Bosch of Germany.  In the overseas markets, the company focus on increasing personnel and strengthening marketing as it completed expansion of bases.

 

 

FINANCIAL INFORMATION:

 

The sales volume for Mar/2014 fiscal term amounted to Yen 67,733 million, a 9.7% up from Yen 61,763 million in the previous term.  Sales of disaster-prevention products for construction works held firm, and those of products for refurbishment works grew more than expected.  Demand for maintenance works remained steady.  The recurring profit was posted at Yen 2,716 million and the net profit at Yen 1,539 million, respectively, compared with Yen 1,921 million recurring profit and Yen 1,007 million net profit, respectively, a year ago.

 

For the current term ending Mar 2015 the recurring profit is projected at Yen 3,000 million and the net profit at Yen 1,800 million, respectively, on a 1.1% rise in turnover, to Yen 68,500 million.  Overall sales will show a steady rise, aided by sales of disaster-prevention products for refurbishment works and income from maintenance service.

 

The financial situation is considered FAIR and good for ORDINARY business engagements.  Max credit limit is estimated at Yen 1,652.1 million, on 30 days normal terms.

 

 

REGISTRATION:

           

      Date Registered:　            Apr 1918

      Regd No.:                           0107-01-008973 (Tokyo-Shinagawaku)

Legal Status:               Limited Company (Kabushiki Kaisha

Authorized:                  57.6 million shares

Issued:                         29,172,000 shares

Sum:                            Yen 3,798 million

 

Major shareholders (%): Sohgo Security Services (15.0), Robert Bosch Investment Nederland (13.5), Tokio Marine & Nichido Fire Ins (8.0), Sanwa Holdings (7.7), Employees’ S/Holding Assn (3.8), Mitsui Sumitomo Ins (3.4), Toa Reinsurance (2.9), Mitsubishi UFJ Trust & Bank (2.1), Japan Trustee Services T (1.4), SECOM (1.4); foreign owners (16.5)

 

No. of shareholders: 3,130

 

Listed on the S/Exchange (s) of: Tokyo

 

Managements: Kenzo Nemoto, ch; Kenji Kanamori, pres; Akio Yamagata, s/mgn dir; Jun’ichi Saito, s/mgn dir; Yuji Hirai, mgn dir; Hiroyuki Uemura, dir; Seiichi Matsumoto, dir; Tadanori Kawamura, dir; Tatsuro Matsuura, dir; Minako Adachi, dir

 

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

 

Related companies: Hochiki Ibaraki Electronics Co, other.

 

 

OPERATION:

           

Activities: Manufactures disaster prevention systems (79%), information & communications, others (21%)

 

(Mfg items): fire alarm systems, smoke control systems, fire extinguishing systems, network systems, security systems, other

           

Clients: [Mfrs, wholesalers] Kinden Corp, Kandenko Co, ALSOK, Kyoto City, Sanki Engineering Co, Gun Ei Chemical Ind, Kyudenko, other

No. of accounts: 1,000

Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] JVC Kenwood, Aiphon Co, Air Water Safety Service Inc, Hochiki Ibaraki Electronics, Saxa Precision Inc, Ryosan Co, other

 

Payment record: No Complaints

 

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

 

Bank References:

                        Mitsubishi UFJ Trust & Bank (H/O)

                        Mizuho Bank (Meguro)

                        Relations: Satisfactory

 

FINANCES

 

(In Million Yen)

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/03/2014

31/03/2013

INCOME STATEMENT

 

　

　

  Annual Sales

　

67,733

61,763

　

  Cost of Sales

47,149

43,716

　

      GROSS PROFIT

20,583

18,046

　

  Selling & Adm Costs

17,925

16,131

　

      OPERATING PROFIT

2,658

1,915

　

  Non-Operating P/L

58

6

　

      RECURRING PROFIT

2,716

1,921

　

      NET PROFIT

1,539

1,007

BALANCE SHEET

 

 

　

　

  Cash

　

4,596

4,203

　

  Receivables

 

21,871

17,864

　

  Inventory

 

5,748

5,168

　

  Securities, Marketable

　

　

　

  Other Current Assets

3,890

3,792

　

      TOTAL CURRENT ASSETS

36,105

31,027

　

  Property & Equipment

6,640

6,619

　

  Intangibles

 

2,434

2,978

　

  Investments, Other Fixed Assets

5,650

5,122

　

      TOTAL ASSETS

50,829

45,746

　

  Payables

 

10,544

8,765

　

  Short-Term Bank Loans

1,211

523

　

　

 

　

　

　

  Other Current Liabs

10,070

8,556

　

      TOTAL CURRENT LIABS

21,825

17,844

　

  Debentures

 

　

　

　

  Long-Term Bank Loans

478

1,648

　

  Reserve for Retirement Allw

6,131

4,855

　

  Other Debts

　

1,023

1,150

　

      TOTAL LIABILITIES

29,457

25,497

　

      MINORITY INTERESTS

 

　

　

Common stock

3,798

3,798

　

Additional paid-in capital

2,728

2,728

　

Retained earnings

15,775

14,617

　

Evaluation p/l on investments/securities

673

456

　

Others

 

(1,544)

(1,295)

　

Treasury stock, at cost

(58)

(56)

　

      TOTAL S/HOLDERS` EQUITY

21,372

20,248

　

      TOTAL EQUITIES

50,829

45,746

CONSOLIDATED CASH FLOWS

 

　

　

 

Terms ending:

31/03/2014

31/03/2013

　

Cash Flows from Operating Activities

　

1,880

2,043

　

Cash Flows from Investment Activities

-582

-1,856

　

Cash Flows from Financing Activities

-959

-213

　

Cash, Bank Deposits at the Term End

　

4,596

4,203

ANALYTICAL RATIOS            Terms ending:

31/03/2014

31/03/2013

　

 

Net Worth (S/Holders' Equity)

21,372

20,248

　

 

Current Ratio (%)

165.43

173.88

　

 

Net Worth Ratio (%)

42.05

44.26

　

 

Recurring Profit Ratio (%)

4.01

3.11

　

 

Net Profit Ratio (%)

2.27

1.63

　

　

Return On Equity (%)

7.20

4.97

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs. 60.24

UK Pound

1

Rs. 101.92

Euro

1

Rs. 80.69

 

 

INFORMATION DETAILS

 

Analysis Done by :

RSM

 

 

Report Prepared by :

DPT

 

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.