MIRA INFORM REPORT

 

 

Report Date :

17.10.2014

 

IDENTIFICATION DETAILS

 

Name :

HONDA MOTOR CO LTD

 

 

Registered Office :

2-1-1 Minami-Aoyama Minatoku Tokyo 107-8556

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2014

 

 

Date of Incorporation :

Sept., 1948

 

 

Com. Reg. No.:

0104-01-027577 (Tokyo-Minatoku)

 

 

Legal Form :

Limited Company (Kabushiki Kaisha)

 

 

Line of Business :

Manufacturer of Motorcycles, Four-Wheeled Cars, Power Equipment

 

 

No. of Employees :

23,467

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

 

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

 

HONDA MOTOR CO LTD

 

REGD NAME:               Honda Giken Kogyo KK

 

MAIN OFFICE:              2-1-1 Minami-Aoyama Minatoku Tokyo 107-8556 JAPAN

Tel: 03-3423-1111     Fax: 03-5412-1515     -

 

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

E-Mail address:            (thru the URL)

 

 

ACTIVITIES

 

Mfr of motorcycles, four-wheeled cars, power equipment

 

 

BRANCHES

 

Shizuoka, Mie, Saitama, Tochigi, Kumamoto

 

 

OVERSEAS

 

Worldwide

 

 

FACTORIES  

 

Saitama, Hamamatsu, Suzuka, Kumamoto, Tochigi, other (Tot 8)

 

 

CHIEF EXEC

 

TAKANOBU ITO, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                 　A/SALES       Yen 11,842,451 M

PAYMENTS      REGULAR         　CAPITAL        Yen 86,067 M

TREND             UP                    　WORTH         Yen 5,918,979 M

STARTED         1948                 　EMPLOYES   23,467

 

 

COMMENT

 

MFR OF MOTORCYCLES, FOUR-WHEELED CARS, OTHER 

FINANCIAL SITUATION COSIDERED FAI AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

 

Unit: In Million Yen

Forecast figures for the 31/03/2015 fiscal term.

 

 

HIGHLIGHTS

 

This is the major car maker ranking in 2nd in domestic market and world’s top motorcycle mfr.  Also produces power products like cultivators.  Last to begin 4-wheeler production.  One of Japan’s fastest growth companies after WWII along with Sony Corp.  Established worldwide operations, maintaining strong position in the US market.  . 

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2014 fiscal term amounted to Yen 11,842,451 million, a 19.9% up from Yen 9,877,947 million in the previous term.  Sales of mainline four wheelers rose 10% over the preceding term.  Sales in Japan were rebounded, thanks to full model changes to light cars and the “Fit”.  New-model car sales were also rising in Asia.  The recurring profit was posted at Yen 728,940 million and the net profit at Yen 574,107 million, respectively, compared with Yen 488,891 million recurring profit and Yen 367,149 million net profit, respectively, a year ago. 

 

(Apr/Jun/2014 results): Sales Yen 2,988,279 million (up 5.4%), operating profit Yen 198,043 million (up 7.1%), recurring profit Yen 198,813 million (up 15.6%), net profit Yen 146,512 million (up 19.6%).  (% as compared with the corresponding period a year ago).

           

For the current term ending Mar 2015 the recurring profit is projected at Yen 755,000 million and the net profit at Yen 600,000 million, respectively, on an 8.1% rise in turnover, to Yen 12,800,000 million.  Sales in Japan will continue rising, and sales in Asia will also grow.  North America sales will remain at a high level.  

 

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

 

 

REGISTRATION

           

Date Registered:　    Sept 1948

Regd No.:                                 0104-01-027577 (Tokyo-Minatoku)

Legal Status:                Limited Company (Kabushiki Kaisha)

Authorized:                  7,086 million shares

Issued:                         1,811,428,430 shares

Sum:                            Yen 86,067 million

 

Major shareholders (%): Japan Trustee Services T (6.4), Master Trust Bank of Japan T (4.7), Moxley & Co (3.0), Meiji Yasuda Life Ins (2.8), Tokio Marine & Nichido Fire Ins (2.3), State Street Bank & Trust 505223 (2.2), JP Morgan Chase Bank 380055 (2.6), SSBT OD05 Omnibus Acct Treaty CI (2.0), MUFG (2.0), Nippon Life Ins (1.7), Mitsui Sumitomo Ins (1.4); foreign owners (40.9)

 

No. of shareholders: 204,758

 

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

 

Managements: Fumihiko Ike, ch; Takanobu Ito, pres; Tetsuo Iwamura, v pres; Takushi Yamamoto, s/mgn dir; Yoshiharu Yamamoto, s/mgn dir; Toshihiko Nonaka, mgn dir; Masahiro Yoshida, mgn dir; Nobuo Kuroyanagi, dir; Hideko Kunii, dir; Yuji Shiga, dir; Kohei Takeuchi, dir; Shinji Aoyama, dir; Noriya Kaibara, dir

 

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

 

Related companies: Honda USA, Honda Engineering, Honda R&D Co, other.

 

 

OPERATION

           

Activities: Manufactures motorcycles (14%), four-wheeled cars (77%), financing (6%), general-purpose power products & others (3%)

Overseas Sales (84%)

           

Clients: [Subsidiary agent dealers] Honda Four-wheel car sales, Honda Motorcycle Sales, Honda Power Equipment Sales, America Honda Motor, Honda Motor Europe, Asia Honda Motor, other

No. of accounts: 1,000-2,000

Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] Keihin Corp, Denso Corp, TS Tech Co, Yachiyo Ind, Showa Corp, Honda Trading, Honda Automobile, Yamada Mfg Co, other

 

Payment record: Regular

 

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

 

Bank References:

            MUFG (H/O)

            Resona Bank (Tokyo)

            Relations: Satisfactory

 

 

FINANCES

(In Million Yen)

 

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/03/2014

31/03/2013

INCOME STATEMENT

　

　

  Annual Sales

　

11,842,451

9,877,947

　

  Cost of Sales

8,761,083

7,345,162

　

      GROSS PROFIT

3,081,368

2,532,785

　

  Selling & Adm Costs

2,331,087

1,987,975

　

      OPERATING PROFIT

750,281

544,810

　

  Non-Operating P/L

-21,341

-55,919

　

      RECURRING PROFIT

728,940

488,891

　

      NET PROFIT

574,107

367,149

BALANCE SHEET

　

　

  Cash

　

1,168,914

1,206,128

　

  Receivables

1,158,671

1,005,981

　

  Inventory

1,302,895

1,215,421

　

  Securities, Marketable

　

　

　

  Other Current Assets

2,140,786

1,895,523

　

      TOTAL CURRENT ASSETS

5,771,266

5,323,053

　

  Property & Equipment

2,818,432

2,399,530

　

  Intangibles

　

　

　

  Investments, Other Fixed Assets

7,032,333

5,912,774

　

      TOTAL ASSETS

15,622,031

13,635,357

　

  Payables

1,071,179

956,660

　

  Short-Term Bank Loans

1,303,464

945,046

　

　

　

　

　

  Other Current Liabs

2,336,686

2,187,298

　

      TOTAL CURRENT LIABS

4,711,329

4,089,004

　

  Debentures

　

　

　

  Long-Term Bank Loans

3,234,066

2,710,845

　

  Reserve for Retirement Allw

　

　

　

  Other Debts

　

1,563,238

1,630,085

　

      TOTAL LIABILITIES

9,508,633

8,429,934

　

      MINORITY INTERESTS

　

　

Common stock

86,067

86,067

　

Additional paid-in capital

171,117

171,117

　

Retained earnings

6,431,682

6,001,649

　

Evaluation p/l on investments/securities

　

　

　

Others

(549,319)

(1,027,286)

　

Treasury stock, at cost

(26,149)

(26,124)

　

      TOTAL S/HOLDERS` EQUITY

6,113,398

5,205,423

　

      TOTAL EQUITIES

15,622,031

13,635,357

CONSOLIDATED CASH FLOWS

　

　

Terms ending:

31/03/2014

31/03/2013

　

Cash Flows from Operating Activities

　

1,229,191

800,744

　

Cash Flows from Investment Activities

-1,708,744

-1,069,756

　

Cash Flows from Financing Activities

370,555

119,567

　

Cash, Bank Deposits at the Term End

　

1,168,914

1,206,128

ANALYTICAL RATIOS            Terms ending:

31/03/2014

31/03/2013

　

Net Worth (S/Holders' Equity)

6,113,398

5,205,423

　

Current Ratio (%)

122.50

130.18

　

Net Worth Ratio (%)

39.13

38.18

　

Recurring Profit Ratio (%)

6.16

4.95

　

Net Profit Ratio (%)

4.85

3.72

　

　

Return On Equity (%)

9.39

7.05

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.61.48

UK Pound

1

Rs.98.24

Euro

1

Rs.78.66

 

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.