MIRA INFORM REPORT

 

 

Report Date :

19.11.2014

 

IDENTIFICATION DETAILS

 

Name :

SEIKO EPSON CORPORATION

 

 

Registered Office :

3-3-5 Owa Suwa City Nagano-Pref 392-8502

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014

 

 

Date of Incorporation :

Sept., 1959

 

 

Legal Form :

Limited Company (Kabushiki Kaisha)

 

 

Line of Business :

Manufacturer of ink jet printers, LCD modules for mobile phones, other electronic devices

 

 

No. of Employees :

73,131

 

 

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

 

 

Maximum Credit Limit :

YEN 23,040.2 MILLION

 

 

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 1, 2014

 

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

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 and address

 

SEIKO EPSON CORPORATION

 

REGD NAME:               Seiko Epson KK

 

MAIN OFFICE:              3-3-5 Owa Suwa City Nagano-Pref 392-8502 JAPAN

                                                Tel: 0263-52-3131     Fax: 0263-58-8216

 

                                    *.. The is its Hino Branch

 

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

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

 

 

ACTIVITIES

 

Mfg of ink jet printers, LCD modules for mobile phones, other electronic devices

 

 

BRANCHES

 

Nagano, Tokyo, Yamagata, Hokkaido, other (Tot 14)

 

 

OVERSEAS

 

USA (5), China (5), Taiwan (3), Canada, Mexico, UK, Germany, France, Korea, India, other (Tot 59 locations)

(-marketing/sales/servicing operations)

 

 

FACTORIES

 

At the caption address, Nagano (13)

 

 

OVERSEAS

 

USA (3), China (11), Malaysia (2), Indonesia (2), UK, Singapore, other (Tot 23)

 

 

CHIEF EXEC

 

MINORU USUI, PRES & CEO

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                             A/SALES          Yen 1,003,606 M

PAYMENTSREGULAR               CAPITAL           Yen 53,204 M

TREND STEADY                       WORTH            Yen 351,730 M

STARTED         1959                             EMPLOYES      73,131

 

 

COMMENT    

 

MFR SPECIALIZING IN INK JET PRINTERS. 

 

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

 

MAX CREDIT LIMIT: YEN 23,040.2 MILLION, 30 DAYS NORMAL TERMS.

 

 

Unit: In Million Yen

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

 

 

HIGHLIGHTS

 

This is leading printer mfr, based in Nagano-Pref, ranked top domestically with strength in ink jet printers (IJT).  In LCD projector & electronics devices, highly competitive in small & medium-sized LCD modules for mobile phones and other products.  Mainline printers pursue “super high resolution equal to photographs”.  The firm started outsourcing IJT production to Thailand in Oct 2005 (Muramoto Industry Co, subsidiary maker).  The Thai plant will be joining Seiko Epson’s own facilities in China, Philippines, Indonesia, etc in supplying products to Japan, US and Europe.  The outsourcing is aimed to meet short-term changes in demand.  The worldwide operations cover 33 locations in development/mfg (including outsourcing), and 59 locations in marketing/sales/servicing.  Ink consumables as a lucrative product.  Earnings concentrate in the 2nd half of each term.

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2014 fiscal term amounted to Yen 1,003,606 million, a 17.9% up from Yen 851,297 million in the previous term.  The recurring profit was posted at Yen 78,121 million and the net profit at Yen 83,698 million, respectively, compared with Yen 17,629 million recurring profit and Yen 10,091 million net losses, respectively, a year ago. 

 

(Apr/Sept/2014 results): Sales Yen 512,807 million (up 8.8%), operating profit Yen 78,582 million (up 158.2%), recurring profit Yen 80,618 million (up 173.1%), net profit Yen 65,684 million (up 230.1%). (% as compared with the corresponding period a year ago). 

.

For the current term ending Mar 2015 the recurring profit is projected at Yen 132,000 million and net loss at Yen 111,000 million, respectively, on a 5.1% rise in turnover, to Yen 1,060,000 million.  Sales volume of ink jet printers will expand, led by those in newly emerging countries.  Demand for ink cartridges will continue growing.

 

The financials situation is considered FAIR and GOOD for ORDINARY business engagements. Max credit limit is estimated at Yen 23,040.2 million, on 30 days normal terms. 

 

 

REGISTRATION

 

Date Registered:  Sept 1959

Legal Status:       Limited Company (Kabushiki Kaisha)

Authorized:         607,458,368 shares

Issued:                196,364,592 shares

Sum:                   Yen 53,204 million

           

Major shareholders (%): Company’s Treasury Stock (10.4), Sanko Kigyo (7.7), Japan Services Trustees T (5.3), Master Trust Bank of Japan T (4.3), Seiko Holdings (3.9), Yasuo Hattori (2.9), Employees’ S/Holding Assn (2.9), Noboru Hattori (2.8), Dai-ichi Life Ins (2.1), TCSB (Mizuho Bank) (2.0); foreign owners (25.6)

 

No. of shareholders: 30,109

 

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

 

Managements: Minoru Usui, pres; Masayuki Morozumi, s/mgn dir; Noriyuki Hama, mgn dir; Shigeki Inoue, mgn dir; Yoneharu Fukushima, dir; Koichi Kubota, dir; Motonori Okumura, dir; Jun’ichi Watanabe, dir; Masayuki Kawana, dir

 

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

 

Related companies: Epson Sales Japan Corp, Tohoku Epson, other (Tot 94: Japan 21, overseas 73)

 

           


OPERATION

 

Activities: Development, manufacturing, sales, marketing and servicing of:

 

(Sales Breakdown by Divisions):

Information-related Equipment (84.0%)

Electronic Devices & Precision Equipment (14.0%)

Sensing System & Industrial Solutions (2%)    

Overseas sales ratio (72%)

 

Clients: [Mfrs, wholesalers] Epson Sales Japan Corp (subsidiary) for marketing/distribution in Japan market, Seiko Watch, other. 

Exports to Epson Europe BV (Netherlands), Epson America Inc, Epson Hong Kong Ltd, Epson Europe Electronics GmbH (Germany), other.

No. of accounts: 3,000 (through subsidiary agent dealers)

Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] Imports from Epson Precision Ltd (Hong Kong, Malaysia, Philippines), PT Indonesia Epson Industry (Indonesia), Suzhou Epson Co (China), other.  Also supplied from: Konica Minolta Business Technologies,

 

Payment record: Regular

 

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

 

Bank References:

            Mizuho Bank (H/O)

            MUFG (Tokyo)

            Relations: Satisfactory

 

 

FINANCES

(In Million Yen)

 

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/03/2014

31/03/2013

INCOME STATEMENT

 

　

　

  Annual Sales

　

1,003,606

851,297

　

  Cost of Sales

680,630

616,857

　

      GROSS PROFIT

322,976

234,439

　

  Selling & Adm Costs

238,007

213,184

　

      OPERATING PROFIT

84,968

21,255

　

  Non-Operating P/L

-6,347

-3,626

　

      RECURRING PROFIT

78,121

17,629

　

      NET PROFIT

83,698

-10,091

BALANCE SHEET

 

 

　

　

  Cash

　

118,570

106,678

　

  Receivables

 

146,085

132,289

　

  Inventory

 

183,627

163,528

　

  Securities, Marketable

85,013

70,012

　

  Other Current Assets

69,157

46,950

　

      TOTAL CURRENT ASSETS

602,452

519,457

　

  Property & Equipment

216,170

217,388

　

  Intangibles

 

14,732

13,368

　

  Investments, Other Fixed Assets

32,518

28,334

　

      TOTAL ASSETS

865,872

778,547

　

  Payables

 

72,821

57,249

　

  Short-Term Bank Loans

57,955

53,626

　

　

 

　

　

　

  Other Current Liabs

182,860

215,813

　

      TOTAL CURRENT LIABS

313,636

326,688

　

  Debentures

 

90,000

90,000

　

  Long-Term Bank Loans

50,500

52,500

　

  Reserve for Retirement Allw

44,221

29,304

　

  Other Debts

　

15,784

21,248

　

      TOTAL LIABILITIES

514,141

519,740

　

      MINORITY INTERESTS

 

　

　

Common stock

53,204

53,204

　

Additional paid-in capital

84,321

84,321

　

Retained earnings

259,426

179,305

　

Evaluation p/l on investments/securities

5,782

2,621

　

Others

 

(30,546)

(40,192)

　

Treasury stock, at cost

(20,457)

(20,453)

　

      TOTAL S/HOLDERS` EQUITY

351,730

258,806

　

      TOTAL EQUITIES

865,872

778,547

CONSOLIDATED CASH FLOWS

 

　

　

 

Terms ending:

31/03/2014

31/03/2013

　

Cash Flows from Operating Activities

　

111,253

42,992

　

Cash Flows from Investment Activities

-39,519

-39,511

　

Cash Flows from Financing Activities

-56,567

21,298

　

Cash, Bank Deposits at the Term End

　

211,570

184,639

ANALYTICAL RATIOS            Terms ending:

31/03/2014

31/03/2013

　

 

Net Worth (S/Holders' Equity)

351,730

258,806

　

 

Current Ratio (%)

192.09

159.01

　

 

Net Worth Ratio (%)

40.62

33.24

　

 

Recurring Profit Ratio (%)

7.78

2.07

　

 

Net Profit Ratio (%)

8.34

-1.19

　

　

Return On Equity (%)

23.80

-3.90

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.61.81

UK Pound

1

Rs.96.77

Euro

1

Rs.77.09

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

NIT

 

               

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.