MIRA INFORM REPORT

 

 

Report Date :

07.08.2014

 

IDENTIFICATION DETAILS

 

Name :

DAIKIN INDUSTRIES LTD

 

 

Registered Office :

Umeda Center Bldg, 2-4-12 Nakazaki-Nishi Kitaku Osaka 530-8323

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014

 

 

Date of Incorporation :

February 1934

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Manufacturer of commercial-use air conditioners

 

 

No of Employees :

56,240

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

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:

 

DAIKIN INDUSTRIES LTD

 

 

REGD NAME:

 

Daikin Kogyo KK

 

 

MAIN OFFICE:    

 

Umeda Center Bldg, 2-4-12 Nakazaki-Nishi Kitaku Osaka 530-8323 JAPAN

Tel: 06-6373-4312     Fax: 06-6373-4330

 

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

E-Mail address: info@daikin.co.jp

 

 

ACTIVITIES: 

 

Mfg of commercial-use air conditioners

 

 

BRANCHES:  

 

Tokyo (3), Suita, other (Tot 13)

 

 

OVERSEAS:  

 

Europe, USA, Africa, Asia, China, S/E Asia, Oceania, Latin America,

South Asia, other (Tot 76)

 

 

FACTORIES: 

 

Sakai (2), Yodogawa, Shiga, Kashima

 

 

CHIEF EXEC:

 

MASANORI TOGAWA, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY:   

 

FINANCES        FAIR                 A/SALES          Yen 1,783,077 M

PAYMENTSREGULAR   CAPITAL           Yen 85,032 M

TREND UP                    WORTH            Yen 824,348 M

STARTED         1934                 EMPLOYES      56,240

 

 

COMMENT:   

 

MFR SPECIALIZING IN COMMERCIAL-USE AIR CONDITIONERS

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                                               

Business

Terms Ending

Annual Sales*

R.Profit*

N.Profit*

S.Growth

Net Worth*

   Results:

31/03/2011

1,160,330

74,800

19,872

(%)

500,928

(Consolidated)

31/03/2012

1,218,700

81,756

41,171

5.03

515,920

 

31/03/2013

1,290,903

94,145

43,584

5.92

635,996

 

31/03/2014

1,783,077

154,108

91,880

38.13

824,348

 

31/03/2015

1,980,000

166,000

98,000

11.04

..

                        Unit: In Million Yen

                        Forecast (or estimated) figures for 31/03/2015 fiscal term

 

HIGHLIGHTS:

           

This is the largest mfr of commercial-use air conditioners.  Makes household-use air conditioners, too.  Pioneer of application of CFC as refrigerant for freezers.  Diversified business into hydraulic equipment, fluorine resins/gas, and shells/warheads for Defense Agency.  World’s top class in fluorine chemicals.  Holds 18% of domestic share in home-use air conditioners.   Active in overseas operations accounting for about 65% of total sales.  Maintains business alliance with Gree Electric Appliances of Zhuhai, China in many fields.  The firm has 26 branches and subsidiaries in China alone.

 

FINANCIAL INFORMATION:

 

The sales volume for Mar/2014 fiscal term amounted to Yen 1,383,077 million, a 38.1% up from Yen 1,290,903 million in the previous term.  The newly bought subsidiary in the US added Yen 200 billion to sales and Yen 14 billion to operating profits.  Sales of air conditioners grew, buoyed by strong demand for popular products in newly emerging countries as well as steady replacement demand in Japan.  The recurring profit was posted at Yen 154,108 million and the net profit at Yen 91,880 million, respectively, compared with Yen 94,145 million recurring profit and Yen 43,584 million net profit, respectively, a year ago. 

 

(Apr/Jun/2014 results): Sales Yen 489,375 million (up 5.2%), operating profit Yen 54,111 million (up 28.3%), recurring profit Yen 52,717 million (up 24.2%), net profit Yen 35,671 million (up 28.9%).  (% compared with the corresponding period a year ago). 

 

For the current term ending Mar 20151 the recurring profit is projected at Yen 166,000 million and the net profit at Yen 98,000 million, respectively, on an 11.0% rise in turnover, to Yen 1,980,000 million.  Sales will hold steady in North America and newly emerging countries, and will be on a recovery trend in Europe.  \the fluorine business will take an upturn.

 

The financial situation is considered FAIR and good for ORDINARY business engagements. 

 

 

REGISTRATION:

 

Date Registered:                       Feb 1934

Legal Status:               Limited Company (Kabushiki Kaisha)

Authorized:                   500 million shares

Issued:                          293,113,973 shares

Sum:                             Yen 85,032 million

           

Major shareholders (%): Master Trust Bank of Japan (6.1), Japan Trustee Services T (5.0), SMBC (3.0), JTSB (Nippon Steel & Sumitomo Metal) (2.2), JTSB (Norin Chukin Bank) (1.7), MUFG (1.6), State Street Bank & Trust 505225 (1.4), Japan Trustee Services T4 (1.4), Sumitomo Life Ins (1.2), BNP Paribas Securities (1.2); foreign owners (35.6)

 

No. of shareholders: 32,484

 

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

 

Managements (Board of Directors): Noriyuki Inoue, ch; Masanori Togawa, pres; Chiyono Terada (external); Kosuke Ikebuchi (external); Guntaro Kawamura, v pres; Ken Tayano, v pres; Masatsugu Minaka, v pres; Jito Tomita, v pres; Takashi Matsuzaki, v ores; Koichi Takahashi, v pres

 

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

 

Related companies: Daikin Europe, Daikin America, Daikin Consumer Marketing, other   

 

 

OPERATION:

           

  Activities: Manufactures air conditioners & freezers (89%), chemicals (8%), hydraulic,      defense systems, others (3%).

 

Overseas sales ratio (71%).

           

(Handling items by divisions):

 

Air Conditioning & Refrigerator Div: Room air conditioners, room air cleaners, Commercial-use air conditioners, commercial-use air cleaners, large-scale refrigerators, marine-type container refrigeration units, container refrigeration, marine vessel air conditioners & refrigerators, water chillers;

 

Oil Hydraulic Div: oil hydraulic products for industrial machinery, oil hydraulic products for mobile equipment, centralized lubrication units & systems;

 

Defense Systems Div: ammunition, precision components for aircrafts, warheads for serial torpedoes; home oxygen therapy equipment, veterinary equipment;

 

Chemical Div: fluoro polymers, synthesized products, fluoro carbon gas, fluoro coatings, fluoro elastomers, high performance chemicals;

 

New Operations Div: computer graphics systems.

 

Clients: [Wholesalers, government agencies] Daikin Kucho Tokyo (Kucho means Air Conditioners, Daikin Europe NV, Daikin Kucho Osaka, Sumitomo Corp, National Defense Agency, Daikin Kucho Tokai, Daikin America Inc, Daikin Kucho Kyushu, Daikin Kucho China, Itochu Non-ferrous Material, other.

No. of accounts: 1,000

Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] Matsushita Electric Ind, Sumikei Corp, Daikin Facilities, Fuso Ind, Chofu Seisakusho, Daikin Electronic Parts Inc, Arai Seisakusho, Shimohira Electric Ind, Ryusho Ind, Daikin Industry Thailand, DTL Japan, other.

 

Payment record: Regular

 

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

 

Bank References:

                        SMBC (Osaka H/O)　　　　　　　　

                        MUFG (Osaka)

                        Relations: Satisfactory

 

 

FINANCES (In Million Yen)

 

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/03/2014

31/03/2013

INCOME STATEMENT

 

　

　

  Annual Sales

　

1,783,077

1,290,903

　

  Cost of Sales

1,216,216

902,856

　

      GROSS PROFIT

566,860

388,046

　

  Selling & Adm Costs

411,785

299,418

　

      OPERATING PROFIT

155,075

88,627

　

  Non-Operating P/L

-967

5,518

　

      RECURRING PROFIT

154,108

94,145

　

      NET PROFIT

91,880

43,584

BALANCE SHEET

 

 

　

　

  Cash

　

257,295

185,571

　

  Receivables

 

319,449

263,322

　

  Inventory

 

316,665

285,167

　

  Securities, Marketable

　

　

　

  Other Current Assets

74,462

69,266

　

      TOTAL CURRENT ASSETS

967,871

803,326

　

  Property & Equipment

299,716

274,201

　

  Intangibles

 

545,756

510,888

　

  Investments, Other Fixed Assets

199,187

147,421

　

      TOTAL ASSETS

2,012,530

1,735,836

　

  Payables

 

162,084

127,364

　

  Short-Term Bank Loans

43,325

63,407

　

　

 

　

　

　

  Other Current Liabs

328,228

192,856

　

      TOTAL CURRENT LIABS

533,637

383,627

　

  Debentures

 

120,000

150,000

　

  Long-Term Bank Loans

430,475

483,033

　

  Reserve for Retirement Allw

9,975

3,960

　

  Other Debts

　

94,094

79,219

　

      TOTAL LIABILITIES

1,188,181

1,099,839

　

      MINORITY INTERESTS

 

　

　

Common stock

85,032

85,032

　

Additional paid-in capital

83,549

83,016

　

Retained earnings

514,583

438,671

　

Evaluation p/l on investments/securities

40,065

18,430

　

Others

 

105,668

17,619

　

Treasury stock, at cost

(4,549)

(6,772)

　

      TOTAL S/HOLDERS` EQUITY

824,348

635,996

　

      TOTAL EQUITIES

2,012,530

1,735,836

CONSOLIDATED CASH FLOWS

 

　

　

 

Terms ending:

31/03/2014

31/03/2013

　

Cash Flows from Operating Activities

　

179,713

103,160

　

Cash Flows from Investment Activities

-80,834

-218,386

　

Cash Flows from Financing Activities

-38,249

143,520

　

Cash, Bank Deposits at the Term End

　

257,295

185,571

ANALYTICAL RATIOS            Terms ending:

31/03/2014

31/03/2013

　

 

Net Worth (S/Holders' Equity)

824,348

635,996

　

 

Current Ratio (%)

181.37

209.40

　

 

Net Worth Ratio (%)

40.96

36.64

　

 

Recurring Profit Ratio (%)

8.64

7.29

　

 

Net Profit Ratio (%)

5.15

3.38

　

　

Return On Equity (%)

11.15

6.85

 

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs. 61.33

UK Pound

1

Rs. 103.43

Euro

1

Rs. 81.96

 

 

INFORMATION DETAILS

 

Analysis Done by :

SUB

 

 

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.