MIRA INFORM REPORT

Report Date :

29.07.2014

IDENTIFICATION DETAILS

Name :	NIPPON ELECTRIC GLASS CO LTD

Registered Office :	2-7-1 Seiran Ohtsu City Shiga-Pref520-0833

Country :	Japan

Financials (as on) :	31.03.2014

Date of Incorporation :	October 1944

Legal Form :	Limited Company

Line of Business :	Manufacturer of LCD & plasma display glass

No. of Employees	5,275

RATING & COMMENTS

MIRA’s Rating :

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 1, 2014

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

Japan

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 and address

NIPPON ELECTRIC GLASS CO LTD

REGD NAME: Nippon Denki Garasu KK

MAIN OFFICE: 2-7-1 Seiran Ohtsu City Shiga-Pref520-0833 JAPAN

Tel: 077-537-1700 Fax: 077-534-4967

* The is its Osaka Branch Office at: 4-1-14 Miyahara Yodogawaku Osaka, as given; Tel: 06-6399-2711; Fax: 06-6399-2731

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

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

ACTIVITIES

Mfg of LCD & plasma display glass

BRANCHES

Tokyo, Osaka

OVERSEAS

USA (2), Malaysia, Indonesia, China (3), Taiwan, Korea (2), Germany

(--subsidiaries)

FACTORIES

Ohtsu, Shiga-Takatsuki, Notogawa, Wakasa-Kaminaka, Fujisawa

CHIEF EXEC

MASAYUKI ARIOKA, PRES

Yen Amount

In million Yen, unless otherwise stated

SUMMARY

FINANCES FAIR A/SALES Yen 252,548 M

PAYMENTS NO COMPLAINTS CAPITAL Yen 32,155 M

TREND SLOW WORTH Yen 510,807 M

STARTED 1944 EMPLOYES 5,275

COMMENT

MFR OF LCD & PLASMA DISPLAY GLASS.

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

Business	Terms Ending	Annual Sales*	R.Profit*	N.Profit*	S.Growth	Net Worth*
Results:	31/03/2011	390,195	114,299	68,608	(%)	468,037
(Consolidated)	31/03/2012	338,214	56,855	19,408	-13.32	475,736
	31/03/2013	287,303	22,767	10,603	-15.05	495,294
	31/03/2014	252,548	14,372	12,431	-12.10	510,807
	31/03/2015	210,000	14,000	11,000	-16.85	..

Unit: In Million Yen

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

HIGHLIGHTS

The subject company was established originally by NEC Corp and later absorbed as NEC’s glass section. And in 1949 separated as independent firm. Top-class producer of CRT glass bulbs and plasma display glass. Produces diverse high-tech products in electronic and optical areas, including LCD-use thin sheet glass. Also makes glass fibers for automobiles. Aggressive in production overseas.

FNANCIAL INFORMATION:

The sales volume for Mar/2014 fiscal term amounted to Yen 252,548 million, a 12.1% down from Yen 287,303 million in the previous term. Weaker demand for LCD panel-use substrate glass posed heavy burden. The recurring profit was posted at Yen 13,372 million and the net profit at Yen 12,431 million, respectively, compared with Yen 22,767 million recurring profit and Yen 10,603 million net profit, respectively, a year ago.

For the current term ending Mar 2015 the recurring profit is projected at Yen 14,000 million and the net profit at Yen 11,000 million, on a 16.6% fall in turnover, to Yen 210 million.

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

REGISTRATION

Date Registered: Oct 1944

Legal Status: Limited Company (Kabushiki Kaisha)

Authorized: 1,200 million shares

Issued: 497,616,234 shares

Sum: Yen 32,155 million

Major shareholders (%): Nipro Corp (17.0), Japan Trustee Services T (6.1), Master Trust Bank of Japan T (5.2), Sajap (2.3), Shiga Bank (1.6), Bank of New York 133524 (1.4), Trust & Custody Services Inv T (1.3), Japan Trustee Services T4 (1.2), Tam Two (1.2), BNP Paribas Securities (1.0); foreign owners (30.6).

No. of shareholders: 17,269

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

Managements: Yuzo Izutsu, ch; Masayuki Arioka, pres; Shigeru Yamamoto, s/mgn dir; Koichi Inamatsu, s/mgn dir; Motoharu Matsumoto, s/mgn dir; Motoharu Matsumoto, s/mgn dir; Masahiro Tomamoto, mgn dir; Hirokazu Takeuchi, mgn dir

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

Related companies: NEG Malaysia, NEG Korea, Techneglas Inc, other (Tot 28)

Overseas subsidiaries: Nippon Electric Glass (Malaysia) Sdn Bhd; PT Nippon

Electric Glass Indonesia; Techneglas Inc (USA); Nippon Electric Glass America Inc; Nippon Electric Glass (Fuzhou) Co Ltd; Nippon Electric Glass (Korea) Co Ltd;

Paju Electric Glass Co Ltd (Korea); Nippon Electric Glass Taiwan Co Ltd, other.

OPERATION

Activities: Manufactures LCD & plasma display glass, glass fibers, building materials, others:

(Sales Breakdown by Divisions):

Display-use Glass Division (72%): LCD substrate glass, CRT glass bulbs, PDP substrate glass, glass for optical devices, glass tubing for lighting, heat resistant glass, radiation shielding glass, others;

Electronic parts-use Glass Division (10%): glass for electronic devices, power glass, high-precision glass tubes, others;

Glass Fiber Division (8%): E-fiber yarn, E-fiber chopped strands, E-fiber roving, ARG fiber, glass fibers, others;

Building Materials & other Divisions (10%): glass-ceramic building materials, glass blocks, heat-resistant glass for fire doors, radiation shielding glass, recycled glass tiles, solar collectors, others;

Overseas Sales Ratio (78%)

Clients: [Electronic mfrs, wholesalers] Matsushita Electric Ind, NEG Taiwan, NEG Korea, Paju Electric (Korea), Maeda Glass Co, Panasonic Liquid Display, other.

No. of accounts: 1,000

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Newman Power Service, NEG Taiwan, SGS Engineering, NEG Butsuryu Service, Nichiden Glass Processing, other..

Payment record: No complaints

Location: Business area in Ohtsu City, Shiga-Pref. Office premises at the caption address are owned and maintained satisfactorily.

Bank References:

SMBC (Kyoto)

Mitsui Sumitomo Trust Bank (Kyoto)

Relations: Satisfactory

FINANCES

(In Million Yen)

FINANCES: (Consolidated in million yen)
		Terms Ending:	31/03/2014	31/03/2013
INCOME STATEMENT
	Annual Sales		252,548	287,303
	Cost of Sales		208,065	235,226
	GROSS PROFIT		44,482	52,077
	Selling & Adm Costs		28,311	27,109
	OPERATING PROFIT		16,170	24,967
	Non-Operating P/L		-1,798	-2,200
	RECURRING PROFIT		14,372	22,767
	NET PROFIT		12,431	10,603
BALANCE SHEET
	Cash		134,139	129,420
	Receivables		44,317	45,824
	Inventory		57,319	55,225
	Securities, Marketable
	Other Current Assets		11,727	13,107
	TOTAL CURRENT ASSETS		247,502	243,576
	Property & Equipment		393,750	395,375
	Intangibles		2,659	2,090
	Investments, Other Fixed Assets		63,110	56,344
	TOTAL ASSETS		707,021	697,385
	Payables		28,143	35,805
	Short-Term Bank Loans		15,185	22,712

	Other Current Liabs		43,641	29,521
	TOTAL CURRENT LIABS		86,969	88,038
	Debentures		30,000	40,000
	Long-Term Bank Loans		41,306	36,891
	Reserve for Retirement Allw
	Other Debts		37,938	37,162
	TOTAL LIABILITIES		196,213	202,091
	MINORITY INTERESTS
	Common stock		32,155	32,155
	Additional paid-in capital		34,351	34,351
	Retained earnings		422,893	418,419
	Evaluation p/l on investments/securities		13,670	10,852
	Others		8,014	(213)
	Treasury stock, at cost		(276)	(270)
	TOTAL S/HOLDERS` EQUITY		510,807	495,294
	TOTAL EQUITIES		707,021	697,385
CONSOLIDATED CASH FLOWS
		Terms ending:	31/03/2014	31/03/2013
	Cash Flows from Operating Activities		46,699	65,111
	Cash Flows from Investment Activities		-33,842	-46,545
	Cash Flows from Financing Activities		-11,189	7,666
	Cash, Bank Deposits at the Term End		123,887	121,740
ANALYTICAL RATIOS Terms ending:			31/03/2014	31/03/2013
		Net Worth (S/Holders' Equity)	510,807	495,294
		Current Ratio (%)	284.59	276.67
		Net Worth Ratio (%)	72.25	71.02
		Recurring Profit Ratio (%)	5.69	7.92
		Net Profit Ratio (%)	4.92	3.69
		Return On Equity (%)	2.43	2.14

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.10
UK Pound	1	Rs.102.04
Euro	1	Rs.80.74

INFORMATION DETAILS

Analysis Done by :	KAR

Report Prepared by :	NIS

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.