MIRA INFORM REPORT

Report Date :

09.08.2014

IDENTIFICATION DETAILS

Name :	NIPPON CARGO AIRLINES CO LTD

Registered Office :	Onarimon Yusen Bldg 6F 3-23-5 Nishishimbashi Minatoku Tokyo 105-0003

Country :	Japan

Financials (as on) :	31.03.2014

Date of Incorporation :	September 1978

Legal Form :	Limited Company

Line of Business :	Subject is provide Scheduled & non-scheduled air cargo transport services

No of Employees :	620

RATING & COMMENTS

MIRA’s Rating :

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

Maximum Credit Limit :	Yen (-) 3,897.4 million

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 01, 2014

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

Japan

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:

NIPPON CARGO AIRLINES CO LTD

REGD NAME:

Nihon Kamotsu Kouku KK

MAIN OFFICE:

Onarimon Yusen Bldg 6F 3-23-5 Nishishimbashi Minatoku Tokyo 105-0003 JAPAN

Tel: 03-5402-3003 Fax: 03-5402-1808

*.. MAIN OPERATION CENTER: Cargo Administration Bldg 4F, New Tokyo International Airport, Narita City Chiba-Pref 282-0021,

URL: http://www.nca.aero/

E-Mail address: info@nca.aero

ACTIVITIES:

Scheduled & non-scheduled air cargo transport services

BRANCHES:

Narita Airport, Kansai Airport, Central Japan Airport

OVERSEAS:

Europe (18), Asia (17), North/South America (9). (--Including airport offices and Sales agents)

OFFICERS:

FUKASHI SAKAMOTO, PRES Yoshio Yamamoto, s/mgn dir

Koji Miyahara, ch Narihiro Sekiguchi, mgn dir

Takeshi Naka, mgn dir Kunio Ito, mgn dir

Yen Amount: In million Yen, unless otherwise stated

SUMMARY:

FINANCES R/WEAK A/SALES Yen 88,941 M

PAYMENTS SLOW CAPITAL Yen 50,574 M

TREND UP WORTH Yen (-) 54,896 M

STARTED 1978 EMPLOYES 620

COMMENT:

AIR CARGO TRANSPORT SERVICE PROVIDER, OWNED BY NIPPON YUSEN KK.

FINANCIAL SITUATION CONSIDERED RATHER WEAK BUT SHOULD BE GOOD FOR MODERATE BUSINESS ENGAGEMENTS.

MAX CREDIT LIMIT: YEN (-) 3,897.4 MILLION, 30 DAYS NORMAL TERMS.

NEGATIVE NET WORTH AND ANY CREDITS ARE RECOMMENDED ON SECURED TERMS FROM THE PARENT, NIPPON YUSEN KAISHA LTD.

HIGHLIGHTS:

The subject company was established by five companies: Kawasaki Kisen KK, Nippon Yusen KK, Yamashita-Shinnihon KK, Mitsui OSK Lines and All Nippon Airways in order to advance into air cargo transport services. In Aug 1983, granted license for scheduled air cargo transportation from the then Ministry of Transport. Offers scheduled and non-scheduled air cargo transport services around the world, having 40 locations: Japan (4), North/South America (9), Asia (17), including airport offices and sales agents. Operates 8 Boeing 747-400Fs and 747-8Ffleets, servicing to and from these areas. In 2005, became financially consolidated subsidiary of Nippon Yusen KK.

FINANCIAL INFORMATION:

The sales volume for Mar/2014 fiscal term amounted to Yen 88,941 million, a 14.0% up from Yen 77,969 million in the previous term. Sales increased in all areas. Weaker Yen aided the earnings up in Yen terms. The operations continued in the red to post Yen 7,363 million recurring loss and Yen 16,319 million net losses, respectively, compared with Yen 4,855 million recurring loss and Yen 5,047 million net losses, respectively, a year ago.

For the current term ending Mar 2015 the recurring profit is projected at Yen 40,000 million and the net profit at Yen 25,000 million, respectively, on a 7% rise in turnover, to Yen 95,500 million.

The financial situation is considered RATHER WEAK but should be good for MODERATE business engagements. Max credit limit is estimated at Yen (-) 3,897.4 million, on 30 days normal terms. Negative net worth and any credits to be recommended on strictly secured terms from the parent, Nippon Yusen KK.

REGISTRATION:

Date Registered: Sept 1978

Legal Status: Limited Company (Kabushiki Kaisha)

Authorized: 4.8 million shares

Issued: 1,590,373,000 shares

Sum: Yen 50,574 million

Major shareholders (%): Company’s Treasury Stock (66.4), Nippon Yusen KK*(33.6),

No. of shareholders: 2

*.. Nippon Yusen KK, Japan’s largest shipping company with century-old history, Tokyo, mi founded 1885, listed Tokyo S/E, capital Yen 144,319 million, turnover Yen 2,237,239 million, operating profit Yen 44,995 million, recurring profit Yen 58,424 million, total assets Yen 2,551,236 million, net worth Yen 720,231 million, employees 32,342, pres Yasumi Kudo

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

OPERATION:

Activities: Air cargo transport service provider, offering scheduled and non-scheduled air cargo transport services, operating 11 air cargo crafts, with warehousing facilities at major international airports worldwide (--100%).

Operating aircrafts: Eight Boeing 747-400Fs and five 747-8F’s

Overseas Sales Ratio (65%)

Clients: [Air freight forwarders, cargo owners] Nippon Express (7.7%), Kintetsu World Express, MO Air System, Hankyu Express International, Alitalia, other.

No. of accounts: 500

Domestic areas of activities: Nationwide

Suppliers: [Oil refineries, mfrs, wholesalers] JX Nippon Oil & Energy Corp, NYK Lines, KLM, Kintetsu Express, other.

Payment record: Slow

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

Bank References:

Mizuho Bank (Tokyo)

MUFG (H/O)

Relations: Satisfactory

FINANCES (In Million Yen)

Terms Ending:	31/03/2015	31/03/2014	31/03/2013	31/03/2012
Annual Sales	95,500	88,941	77,969	82,736
Recur. Profit	40,000	-7,363	-4,855	3,394
Net Profit	25,000	-16,319	-5,047	3,380
Total Assets		78,466	89,914	69,292
Current Assets		17,209	14,533	13,736
Current Liabs		112,824	108,783	108,881
Net Worth		-54,896	-41,434	-48,709
Capital, Paid-Up		50,574	50,574	50,574
Div.P.Share(¥)		0.00	0.00	0.00
*<Analytical Data>*	(%)	(%)	(%)	(%)
S.Growth Rate	7.37	14.07	-5.76	-5.31
Current Ratio	..	15.25	13.36	12.62
N.Worth Ratio	..	-69.96	-46.08	-70.30
R.Profit/Sales	41.88	-8.28	-6.23	4.10
N.Profit/Sales	26.18	-18.35	-6.47	4.09

Notes: Forecast (or estimated) figures for the 31/03/2015 fiscal term.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 61.55
UK Pound	1	Rs. 103.50
Euro	1	Rs. 82.41

INFORMATION DETAILS

Analysis Done by :	KRN

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%)

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