MIRA INFORM REPORT

 

 

Report Date :

17.12.2014

 

IDENTIFICATION DETAILS

 

Name :

SHIMA SEIKI MFG., LTD. 

 

 

Registered Office :

85, Sakata, Wakayama-shi, Wakayama pref. 641-0003

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014 (Consolidated)

30.09.2014 (Quarterly)

 

 

Date of Incorporation :

24.08.1976

 

 

Com. Reg. No.:

1700-01-001508 (Wakayama)

 

 

Legal Form :

Private Limited Company

 

 

Line of Business :

Engaged in Development, manufacture, export and sales of the following machines and systems:

·         Computerized weft(flat) knitting machines

·         Seamless Glove knitting machines

·         sock knitting machines

·         Computer graphic systems

·         Design systems

·         CAD/CAM systems

 

 

No of Employees :

1,751 (as of March 31, 2014, consolidated)

 

 

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 – September 30, 2014

 

Country Name

Previous Rating

(30.06.2014)

Current Rating

(30.09.2014)

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 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

 

SHIMA SEIKI MFG., LTD.

 

 

company OUTLINE

 

Company name:            SHIMA SEIKI MFG., LTD.

Name in local language: SHIMA SEIKI SEISAKUSHO, K.K.

Office address:             85, Sakata, Wakayama-shi, Wakayama pref. 641-0003

Country:                        Japan

Office tel:                                 073-471-0511

Office fax:                    073-474-8267

Website:                       www.shimaseiki.co.jp 

Business type:              Manufacturer 

Industry:                                   Knitting machines, design system, CAD/CAM systems

Established:                  August 24, 1976

Capital:                                     Jp. 14,859,800,000 yen

Employees:                  1,751 (as of March 31, 2014, consolidated)

Corporate formation:     Listed 

Corporation No.:           1700-01-001508 (Wakayama Legal Affairs Bureau)

 

 

MAJOR SHAREHOLDERS

 

As of March 31, 2014:

Paid in capital :                         Jp. 14,859,800,000 yen

Number of authorized shares :   142,000,000 shares

Shares issued :                         36,600,000 shares

Number of shareholder :                        18,628

 

Name of shareholders              Number of thousand shares (%)

------------------------------------------------------------------------------------------------------------

Washima Kosan Co., Ltd.                                   2,870 (7.84)

Kiyo Bank, Ltd.                                                  1,310 (3.58)

NK Kosan Co., Ltd.                                            1,150 (3.14)

Mr. Masahiro Shima, President                            1,070 (2.92)

Mr. Mitsuhiro Shima, Vice President                    1,060 (2.90)

Bank of Tokyo-Mitsubishi UFJ, Ltd.                       880 (2.40)

Wako G.K.                                                                      765 (2.09)

Employees shareholders fund                               738 (2.02)

Senshu-Ikeda Bank, Ltd.                                       700 (1.91)

Ms. Hiromi Goto                                                   697 (1.91)

------------------------------------------------------------------------------------------------------------

Total                                                                 11,240 (30.71)

 

 

DETAILED PRODUCT CLASSFICATION & ACTIVITY

 

Activity                         Product/Service Description

-------------------------------------------------------------------------------

Manufacturing               Computerized weft knitting machines

Manufacturing               Glove knitting machines

Manufacturing               Socks knitting machines

Service                         Design systems

Service                         CAD/CAM systems

Service                         Computer graphic systems

 

 

COMPANY MANAGEMENT

 

President                      Mr. Masahiro Shima

Nationality:                    Japan

 

Vice President               Mr. Mitsuhiro Shima

Nationality:                    Japan

 

 

Managing Director         Mr. Takashi Wada

Nationality:                    Japan

 

Managing Director         Mr. Reiji Arikita

Nationality:                    Japan

 

Managing Director        Mr. Ikuto Umeda

Nationality:                    Japan

 

Director                        Mr. Osamu Fujita

Nationality:                    Japan

 

Director                                    Mr. Toshio Nakashima

Nationality:                   Japan

 

Director                                    Mr. Takashi Nanki

Nationality:                    Japan

 

Director                        Mr. Hirokazu Nishitani

Nationality:                    Japan

           

Director                                    Mr. Kiyokata Nishikawa

Nationality:                    Japan

 

Director                       Mr. Yoshio Ichiryu

Nationality:                    Japan

 

Auditor                                     Mr. Mitsunori Ueda

Nationality:                    Japan

 

Auditor                                     Mr. Masao Tanaka

Nationality:                    Japan

 

Auditor                                     Mr. Yuuki Matoba

Nationality:                    Japan

 

Auditor                                     Mr. Daisuke Shinkawa

Nationality:                    Japan

 

Note: The names of director(s) and auditor(s) are phonetically spelt.

 

*Key Personnel*

==============

Mr. Masahiro Shima

President and representative director

Born on March 10, 1937

Business career:

Jul. 1961: Founded “Sanshin Seiki, Ltd.” as the president.

Mar. 2009: Representative director and president, general manager of sales of the subject.

Home address: 4-3-33, Fukiage, Wakayama-shi, Wakayama pref.

 

 

FINANCIALS

 

Currency: (local currency - Jp. yen)

-------------------------------------------------------------------------------------

 Year |         Sales            |      Net Income    

-------------------------------------------------------------------------------------

2009

48,970,000,000

1,765,000,000

2010

36,874,000,000

loss 1,885,000,000

2011

42,781,000,000

769,000,000

2012

37,327,000,000

loss 642,000,000

2013

34,970,000,000

1,754,000,000

2014

40,636,000,000

4,863,000,000

 

 

FINANCIAL DESCRIPTION

 

*Book Closing*

============

March 31st

*Financials*

==========

Consolidated Balance Sheet

 

 

 

Unit: millions of JP yen

 

 

 

                          

3/31/2012

3/31/2013

3/31/2014

Current assets  

67,491

73,754

80,297

 Cash & deposits      

14,910

19,737

16,002

 Account receivables   

29,857

33,700

42,964

 Inventories          

20,884

18,343

19,589

 Others

1,840

1,974

1,742

 

 

Fixed assets           

39,372

38,334

39,430

 Tangible assets      

20,940

20,138

19,876

 Intangible assets    

5,151

4,816

4,852

 Investments & others  

13,279

13,378

14,700

Total Assets       

106,863

112,089

119,727

　

　

　

　

Current liabilities     

17,330

16,109

18,514

 Account payables  

4,294

4,445

4,290

 Short term loans    

5,701

5,399

6,695

 Long term loans due   

3,000

1,500

-　

 Outstanding taxes    

66

384

2,310

 Others

4,269

4,381

5,219

Fixed liabilities      

5,365

8,597

7,989

 Long term loans     

1,500

5,000

5,000

 Retirement benefits    

2,473

2,290

526

 Others

1,392

1,307

2,463

Shareholders' equity    

95,998

97,000

100,837

 Paid up capital      

14,859

14,859

14,859

 Capital reserves      

21,724

21,724

21,724

 Retained earnings    

66,303

67,321

71,158

 Treasury stock        

-6,889

-6,905

-6,904

Valuation & adjustment 

-11,995

-9,811

-7,808

Minority Interest    

11

12

13

Warrants

153

181

180

Total Net Assets       

84,167

87,382

93,222

Total Liabilities & Net Assets     

106,863

112,089

119,727

 

 

 

 

Consolidated Income Statement

 

 

 

Unit : millions of JP yen

 

 

 

                          

3/31/2012

3/31/2013

3/31/2014

Sales          

37,327

34,970

40,636

Cost of goods sold      

22,894

22,758

23,367

Gross profit(loss)    

14,432

12,212

17,269

Sales/administrative expenses  

13,549

12,720

14,537

Operating profit(loss)    

883

-508

2,731

Non operating income         

851

4,977

5,000

Non operating expenses       

1,947

299

379

Ordinary profit(loss)      

-212

4,168

7,352

Special profits                

0

42

0

Special losses             

324

848

122

Pretax profit                 

-537

3,362

7,230

Taxes & adjustment           

104

1,607

2,365

Net profit      

-642

1,754

4,863

 

*Latest Financials *

================

On October 31, 2014, the subject released the following business results and forecast:

As of September 30, 2014 (2Q 2015 term)

Unit: millions of JPY

Year term 

Sales  

Operating profit

Ordinary profit 

Net profit

2Q 2014       

20,942

1,887

4,360

3,176

2Q 2015       

25,784

3,044

4,382

3,003

FY 2015(F)    

51,000

6,000

6,800

4,600

 

Current assets;

85,337

Fixed assets;

38,091

Total assets;

123,428

Current liabilities;

19,135

Fixed liabilities;

7,984

Shareholders’ equity;

102,529

  Retained earnings;

72,850

Total net assets;

96,309

Total liabilities and net assets;

123,428

 

 

Bank Details

 

Bank Name :     Bank of Tokyo-Mitsubishi UFJ, Ltd.

Branch :            Wakayama

 

Bank Name :     Senshu-Ikeda Bank, Ltd.

Branch :            Wakayama

 

Bank Name :     Kiyo Bank, Ltd.

Branch :            Head office

 

 

Credit Opinion

 

The subject is a reputed manufacturer of automatic knitting machines, and now enjoys the world’s No1. Player in that business sphere with 100% market share in Japan and 40%;overseas.

Its worldwide marketing and technical support network covers 83 countries with 127 business strongholds, associated with local business partners.

The recent big hit is a whole garment knitting machine, which does not require any sewing process in the garment making process.

The demands in Bangladesh and China hit a bottom, and other users in Asia are growing.

A record high performance was posted for Mar. 2014 term.

The subject is developing new markets of sports and nursing care-related garments fields in The United States.

Financial condition is sound enough.

Negative factors are not observed in particular at present.

 

 

LOCAL BRANCHES & MANAGEMENT

 

Branch name:                Tokyo branch

Branch address:            Nihonbashi, Chuo-ku, Tokyo

Branch tel:                    03-3246-0511

Branch fax:                   03-3246-0515

----------------------------------------------------------------------------------------------------

Branch name:                Nishi-Nippon branch

Branch address:            Umeda, Kita-ku, Osaka-shi, Osaka pref.

Branch tel:                    06-6344-0511

Branch fax:                   06-6344-2204

----------------------------------------------------------------------------------------------------

Branch name:                Higashi-Nippon branch

Branch address:            Funakoshi, Gosen-shi, Niigata pref.

Branch tel:                    0250-43-0511

Branch fax:                   0250-43-0981

 

One overseas office in Taipei, Taiwan

 

Technical service centers:

-       Showa-cho, Yamanashi pref.

-       Ota-ku, Tokyo

-       Yamagata-shi, Yamagata pref.

-       Date-shi, Fukushima pref.

-       Nagoya-shi, Aichi pref.

-       Higashi-Kagawa-shi, Kagawa pref.

-       Izumi-ohtsu-shi, Osaka pref.

PRODUCT, TECHNOLOGY, SERVICE DESCRIPTION

 

*Main Products & Services*

======================

Development, manufacture, export and sales of the following machines and systems:

·         Computerized weft(flat) knitting machines

·         Seamless Glove knitting machines

·         sock knitting machines

·         Computer graphic systems

·         Design systems

·         CAD/CAM systems

 

FACTORY FACILITIES & MANUFACTURING CAPABILITIES

 

At the location of the head office

 

 

ORGANIZATION STRUCTURE

 

*Address*

=========

Registered address is the same as the operational address.

 

*Company History*

================

Date                 Development

-----------------------------------------------------------------------------------------------

July 1961                      Started manufacturing a glove knitting machine under the name of

“Sanshin Seiki.”

August 24, 1976            Incorporated under the current name.

August 1985                  Acquired a firm in the U.K.(now Shima Seiki Europe Ltd.)

April 1986                     Founded “Shima Seiki U.S.A. Inc.” in N.J., USA.

December 1990             Went public(#6222).

March 2001                   Founded a design center in Milan, Italy.

July 2006                      Founded a design center in New York, USA.

August 2012                  Developed automatic cutting machine for carbon fiber and composite

materials jointly with two local colleges.

 

TRADE REFERENCES

 

*Suppliers*

==========

Groz-Beckert Japan K.K.

Terauchi Seisakusho Co., Ltd.

Sanwa Technos Corp.

Techno Hagiwara Co., Ltd.

 

 

*Customers*

==========

Benetton s.p.a.

Stefanella s.p.a.

Tosho Corp.

World Co., Ltd.

Naigai Co., Ltd.

Renown Inc.

Onward Kashiyama Co., Ltd.

 

 

MAJOR SUBSIDIARIES, JOINT-VENTURES & AFFILIATES

 

Company name:            Shima Seiki Europe Ltd.

Country:                        U.K.

Status:                          Subsidiary   

----------------------------------------------------------------------------------------------------

Company name:            Shima Seiki U.S.A. Inc.

Country:                        U.S.A.

Status:                          Subsidiary  

----------------------------------------------------------------------------------------------------

Company name:            Shima Seiki(Hong Kong) Ltd.

Country:                        Hong Kong

Status:                         Subsidiary  

----------------------------------------------------------------------------------------------------

 

 

RELATED PARTIES DESCRIPTION

 

*Subsidiaries & Affiliates*

=====================

As of March 31, 2014 the subject owns and controls a total of 16 subsidiaries and affiliates at home and abroad.

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.63.41

UK Pound

1

Rs.99.30

Euro

1

Rs.79.00

 

INFORMATION DETAILS

 

Analysis Done by :

SUB

 

 

Report Prepared by :

MNL

 

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.