MIRA INFORM REPORT

Report Date :

31.08.2014

IDENTIFICATION DETAILS

Name :	NAGASE & CO LTD
Registered Office :	1-1-17 Shinmachi Nishiku Osaka 550-8668
Country :	Japan
Financials (as on) :	31.03.2014
Date of Incorporation :	December 1917
Legal Form :	Limited Company
Line of Business :	Subject is engaged in specialized trading house for import, export, wholesale of industrial chemicals
No of Employees :	5,960

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

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 & address

NAGASE & CO LTD

REGD NAME

Nagase Sangyo KK

MAIN OFFICE

1-1-17 Shinmachi Nishiku Osaka 550-8668 Japan

Tel: 06-6535-2114

Fax: 06-6535-2160

*.. The is its Tokyo Office

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

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

ACTIVITIES: Import, export, wholesale of chemicals

BRANCHES: Tokyo, Nagoya, Fukuoka, Hiroshima, Takamatsu, other

OVERSEAS: Europe (4), North America (5), South America (4), China/Korea/Taiwan (11), Asia/Oceania (9)

CHIEF EXEC: HIROSHI NAGASE, PRES & CEO

Yen Amount: In million Yen, unless otherwise stated

SUMMARY

FINANCES FAIR A/SALES Yen 723,212 M

PAYMENTSNO COMPLAINTS CAPITAL Yen 9,699 M

TREND STEADY WORTH Yen 251,892 M

STARTED 1917 EMPLOYES 5,960

COMMENT: TOP-RANKED TRADING HOUSE SPECIALIZING IN INDUSTIRAL CHEMI CALS.

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

Unit: in Million Yen

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

HIGHLIGHTS

The subject company is top-ranked specialist trader of chemical products, including dyestuffs and synthetic resins. Emphasizing semiconductors and LCD-related materials and equipment. Also deals in medical equipment and pharmaceutical intermediates. Acquired bio-related company Hayashibara.

FINANCIAL INFORMATION

The sales volume for Mar/2014 fiscal term amounted to Yen 723,212 million, an 8.5% up from Yen 666,272 million in the previous term. Processed materials benefitted from increased sales for OA equipment and household electric appliances in the Asian market. Sales of electronics also remained in good shape for LCDs in China. The recurring profit was posted at Yen 17,905 million and the net profit at Yen 11,663 million, respectively, compared with Yen 17,927 million recurring profit and Yen 14,182 million net profit, respectively, a year ago.

(Apr/Jun/2014 results): Sales Yen 181,337 million (up 5.8%), operating profit Yen 4,431 million (up 6.3%), recurring profit Yen 5,089 million (down 0.3%), net profit Yen 3,512 million (down 0.4%). (% compared with the corresponding period a year ago).

For the current term ending Mar 2015 the recurring profit is projected at Yen 21,500 million and the net profit at Yen 14,200 million, respectively, on an 8.3% rise in turnover, to Yen 783,000 million. Automobile-related products will drive growth. Hayashibara will advance overseas with sales of trehalose.

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

REGISTRATION

Date Registered: Dec 1917

Legal Status: Limited Company (Kabushiki Kaisha)

Authorized: 346,980,000 shares

Issued: 138,408,235 shares

Sum: Yen 9,699 million

Major shareholders (%): Company’s Treasury Stock (8.2), Northern Trust-AVF Inv I (4.3), Sumitomo Mitsui Trust Bank (4.1), Master Trust Bank of Japan T (4.0), SMBC (3.1), Japan Trustee Services Bank T (3.1), Northern Trust (AVFC) Nontreaty (3.1), Hiroshi Nagase (2.9), Nippon Life Ins (2.9), Reiko Nagase (2.5); foreign owners (27.7)

No. of shareholders: 6,358

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

Managements: Hiroshi Nagase, pres & CEO; Reiji Nagase, s/mgn dir; Kenichi Matsuki, mgn dir; Toshio Yamaguchi, mgn dir; Hiroshi Hanamoto, dir

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

Related companies: Nagase Chemtex, Totaku Ind, Hoei Sangyo, Nagase Logistics, other

OPERATION

Activities: Specialized trading house for import, export, wholesale of industrial chemicals

(Sales breakdown by divisions): dyestuffs, pigments, other industrial chemicals (23%), advanced materials & processing (33%), electronics (19%), automobile & energy (14%), health care & lifestyle materials (11%).

Overseas Sales Ratio (48%)

Clients: [Chemical mfrs, wholesalers] Japan Display, Denso Corp, DIC Corp, Sharp Corp, Calsonic Kansei Corp, other.

No. of accounts: 1,000

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Sumitomo Chemical, Daicel Chemical Ind, Nippon

Shokubai, Mitsubishi Chemical, Tottori Sanyo Electric, Mitsui Chemical, other.

Payment record: No Complaints

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

Bank References:

SMBC (H/O)

Mitsui Sumitomo Trust Bank (H/O)

Relations: Satisfactory

FINANCES

(In Million Yen)

FINANCES: (CONSOLIDATED IN MILLION YEN)
		TERMS ENDING:	31/03/2014	31/03/2013
INCOME STATEMENT
	Annual Sales		723,212	666,272
	Cost of Sales		634,276	583,689
	GROSS PROFIT		88,936	82,583
	Selling & Adm Costs		73,146	67,004
	OPERATING PROFIT		15,789	15,578
	Non-Operating P/L		2,116	2,349
	RECURRING PROFIT		17,905	17,927
	NET PROFIT		11,663	14,182
BALANCE SHEET
	Cash		34,980	46,693
	Receivables		202,996	196,001
	Inventory		57,458	51,862
	Securities, Marketable
	Other Current Assets		10,928	11,195
	TOTAL CURRENT ASSETS		306,362	305,751
	Property & Equipment		63,914	60,967
	Intangibles		53,030	55,295
	Investments, Other Fixed Assets		74,835	64,734
	TOTAL ASSETS		498,141	486,747
	Payables		105,014	107,941
	Short-Term Bank Loans		28,818	25,061
	Other Current Liabs		29,814	32,810
	TOTAL CURRENT LIABS		163,646	165,812
	Debentures		30,000	30,000
	Long-Term Bank Loans		27,140	32,614
	Reserve for Retirement Allw		11,875	10,283
	Other Debts		13,588	10,232
	TOTAL LIABILITIES		246,249	248,941
	MINORITY INTERESTS
	Common stock		9,699	9,699
	Additional paid-in capital		10,242	10,041
	Retained earnings		206,351	199,160
	Evaluation p/l on investments/securities		24,725	17,943
	Others		7,791	8,072
	Treasury stock, at cost		(6,916)	(7,109)
	TOTAL S/HOLDERS` EQUITY		251,892	237,806
	TOTAL EQUITIES		498,141	486,747
CONSOLIDATED CASH FLOWS
		Terms ending:	31/03/2014	31/03/2013
	Cash Flows from Operating Activities		12,721	18,576
	Cash Flows from Investment Activities		-14,171	-9,529
	Cash Flows from Financing Activities		-11,833	1,164
	Cash, Bank Deposits at the Term End		33,825	45,816
ANALYTICAL RATIOS TERMS ENDING:			31/03/2014	31/03/2013
		Net Worth (S/Holders' Equity)	251,892	237,806
		Current Ratio (%)	187.21	184.40
		Net Worth Ratio (%)	50.57	48.86
		Recurring Profit Ratio (%)	2.48	2.69
		Net Profit Ratio (%)	1.61	2.13
		Return On Equity (%)	4.63	5.96

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.47
UK Pound	1	Rs.100.35
Euro	1	Rs.79.86

INFORMATION DETAILS

Analysis Done by :	KAR
Report Prepared by :	TPT

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.