MIRA INFORM REPORT

Report No. :	319623
Report Date :	28.04.2015

IDENTIFICATION DETAILS

Name :	SHIMAMURA MUSIC CO LTD
Registered Office :	6-37-3 Hirai Edogawa-ku, Tokyo, 132-0035
Country :	Japan
Financials (as on) :	28.02.2015
Year of Establishment :	1962
Com. Reg. No.:	0117-01-003943
Legal Form :	Limited Company (Kabushiki Kaisha)
Line of Business :	Imports, wholesales and retails (including online shops) musical instruments and accessories; operates piano & electronic organ classes.
No. of Employee :	1876

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 183.8 Million
Status :	Satisfactory
Payment Behaviour :	Slow but correct
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 – December 31, 2014

Country Name	Previous Rating (30.09.2014)	Current Rating (31.12.2014)
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

SHIMAMURA MUSIC CO LTD
Japanese company name	Shimamura Gakki KK
Registered Office
1. Street Number and District	6-37-3 Hirai Edogawa-ku
2. City and Perefecture	Tokyo
3. ZIP Code	132-0035
4. Country	JAPAN
TEL	03-3613-4111
FAX	03-3613-4117
URL	www.shimamura.co.jp/
Email Address	inquiry@shimamura.co.jp
Activities (Services & Products)	Imports, wholesales and retails (including online shops) musical instruments and accessories; operates piano & electronic organ classes.
SUMMARY OF REPORT
Annual Sales (MM YEN)	31,500
Capital Amount (MM YEN)	100
Net Worth (MM YEN)	Unavailable
FINANCES	FAIR
TREND	UP
EMPLOYEES	1876
OTHER INFORMATION FOLLOWS
YEAR STARTED	1962
YEAR REGISTERED	Mar. 1969
REGD NO.	0117-01-003943
LEGAL STATUS	Limited Company(Kabushiki Kaisha)
MAJOR SHAREHOLDERS
1	Shimamura Sogyo (25.5)
2	Mototsugu Shimamura (12.8)
3	Mayuko Sugano (10.4)
NUMBER OF SHAREHOLDERS	19
AUTHORIZED SHARES (MM)	17.28
ISSUED SHARES (MM)	5.31
SUM	Yen 100 million
EXECUTIVES
PRESIDENT	TOSHIAKI HIROSE
CHAIRMAN	Mototsugu Shimamura
VICE PRESIDENT
SENIOR MGN DIRECTOR
DIRECTOR	Keiichi Oshima
DIRECTOR	Fumitaka Haga
DIRECTOR	Satoko Shimamura
DIRECTOR	Mayuko Shimamura
MAIN BANKS
1	SMBC(Kameido)
2	MUFG(Kameido-kitaguchi)
RELATIONS	Satisfactory
CLIENTS
1	General consumers
2	Schools
3	Government agencies
4	Other
SUPPLIERS
1	Yamaha Corp
2	Roland
3	Fernandes Co
4	Korg
5	Other
BRANCHES
1	Tokyo
2	Sapporo
3	Sendai
4	Chiba
5	Other(Tot 153)
FACTORIES
1	None
OVERSEAS
1	None
HIGHLIGHT and COMMENT Shimamura Music was founded in 1962 by Mototsugu Shimamura and opened its first music school that same year with 48 students. Musical instrument sales were later started for students who had a desire to learn but were unable to practice at home. 　They have since expanded the business, with most of new stores opening in major shopping centers throughout Japan. Success in developing stores and music schools that meet the expectations of various levels of players can be seen in their approximately 10% share of the musical instruments retail market in Japan, currently estimated at JPY 250 billion (US$2.8 billion). Shimamura Music has become the largest musical instruments retailer in Japan, with annual sales of Yen 30 billion and 140 locations nationwide, and the third largest music school operator, after Yamaha and Kawai.
FINANCIAL information Financials are disclosed only partially. The sales volume for Feb/2014 fiscal term amounted to Yen 30,000 million, a 2.7% up from Yen 29,210 million in the previous term. The net profit amounted at Yen 350 million which is increased from Yen 266 million in 2013. For the current term ending Feb/2015, the net profit at Yen 409 million is estimated based on a 5% rise in turnover, to Yen 31,500 million. Only sales figures for 2015 has been disclosed. The financial situation is considered FAIR and good for ORDINARY business engagements.
PLEASE ATTACH THE FINANCIALS BELOW
Terms Ending:	28/02/2015	28/02/2014	28/02/2013	28/02/2012
Annual Sales	31,500	30,000	29,210	28,932
Recur. Profit	..	..	..	..
Net Profit	409	350	266	257
Total Assets
Net Worth
Capital, Paid-Up
Div.P.Share(¥)		0.00	0.00	0.00
<Analytical Data>	(%)	(%)	(%)	(%)
S.Growth Rate	5.00	2.70	0.96	n/a
Current Ratio		..	..	..
N.Worth Ratio		..	..	..
N.Profit/Sales	1.30	1.17	0.91	0.89

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.62.39
UK Pound	1	Rs.91.06
Euro	1	Rs.66.16

INFORMATION DETAILS

Analysis Done by :	DIV
Report Prepared by :	ANK

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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