MIRA INFORM REPORT

 

 

Report No. :

330237

Report Date :

01.07.2015

 

IDENTIFICATION DETAILS

 

Name :

LEC INC

 

 

Registered Office :

Nihombashi Yasuda Sky Gate 6F, 3-15-1 Nihombashi-Hamacho Chuoku Tokyo

103-0007

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2015

 

 

Date of Incorporation :

March, 1983

 

 

Com. Reg. No.:

0100-01-128155 (Tokyo-Chuoku)

 

 

Legal Form :

Limited Company (Kabushiki Kaisha)

 

 

Line of Business :

Manufacturer of Household Goods, Furniture, Kitchen Equipment, Other

 

 

No. of Employees :

1,075

 

 

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 1,245.5 Million

 

 

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 – March 31, 2015

 

Country Name

Previous Rating

(31.12.2014)

Current Rating

(31.03.2015)

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 an 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. Scarce in many natural resources, Japan has long been dependent on imported raw materials. Since the complete shutdown of Japan’s nuclear reactors after the earthquake and tsunami disaster in 2011, Japan's industrial sector has become even more dependent than it was previously on imported fossil 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 impressive - 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 aftereffects 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 four times since 2008. 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 of that year disrupted manufacturing. The economy has largely recovered in the four years since the disaster, although reconstruction in the affected Tohoku region has lagged, in part due to a shortage of labor in the construction sector. Japan enjoyed a sharp uptick in growth in 2013 on the basis of Prime Minister Shinzo Abe’s “Three Arrows” economic revitalization agenda - dubbed “Abenomics” - of monetary easing, “flexible” fiscal policy, and structural reform. Abe’s government has replaced the preceding administration’s plan to phase out nuclear power with a new policy of seeking to restart nuclear power plants that meet strict new safety standards, and emphasizing nuclear energy’s importance as a base-load electricity source. Japan joined the Trans-Pacific Partnership (TPP) 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 2014 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. While seeking to stimulate and reform the economy, the government must also devise a strategy for reining in Japan's huge government debt, which amounts to more than 230% of GDP. To help raise government revenue, Japan adopted legislation in 2012 to gradually raise the consumption tax rate to 10% by 2015, beginning with a hike from 5% to 8% implemented in April 2014. That increase had a contractionary effect on GDP, however, so PM Abe in late 2014 decided to postpone the final phase of the increase until April 2017 to give the economy more time to recover. Led by the Bank of Japan’s aggressive monetary easing, Japan is making progress in ending deflation, but demographics - low birthrate and an aging, shrinking population - pose major long-term challenges for the economy.

 

Source : CIA

 

 

Company Name and address

 

LEC INC

 

REGD NAME:               KK Lec

 

MAIN OFFICE:              Nihombashi Yasuda Sky Gate 6F, 3-15-1 Nihombashi-Hamacho Chuoku Tokyo

                                                103-0007 JAPAN

                                                Tel: 03-5847-0600     Fax: 03-5847-0605     -

           

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

E-Mail address:                        (thru the URL)

 

 

ACTIVITIES

 

Mfg of household goods, furniture, kitchen equipment, other

 

 

BRANCHES

 

Sapporo, Sendai, Takasaki, Nagoya, Osaka, Hiroshima, Fukuoka, other (Tot 11)

 

 

OVERSEAS

 

China & Singapore

 

 

FACTORIES

 

Mitaka, Shizuoka (2), other (Tot 4)

 

 

CHIEF EXEC

 

TAKAKI NAGAMORI, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                             A/SALES                      Yen 29,315 M

PAYMENTSNO COMPLAINTS    CAPITAL                       Yen 5,491 M

TREND UP                                WORTH                        Yen 22,731 M

STARTED         1983                             EMPLOYES                 1,075

 

 

COMMENT

 

MFR OF HOUSEHOLD GOODS & SUPPLIES

 

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

MAX CREDIT LIMIT: YEN 1,245.5 MILLION, 30 DAYS NORMAL TERMS

 

Unit: In Million Yen

Forecast figures for the 31/03/2016 fiscal term.

 

 

HIGHLIGHTS

 

This is former Suruga Industry, and engaged in mfg and sales of household goods to 100-Yen shops and supermarkets. Acquired Lee in the same industry from Nifco, in 2003 and converted it to a subsidiary.  Changed its name to Lee at the time of the merger in 2009. Mainstay products include kitchen goods, bath and toilet goods, and cleaning products. Operates 5 mfg subsidiaries and two sales subsidiaries in China, and advancing also into Singapore.  .

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2015 fiscal term amounted to Yen 29,315 million, a 5.7% up from Yen 27,723 million in the previous term.  The recurring profit was posted at Yen 939 million and the net profit at Yen 254 million, respectively, compared with Yen 254 million recurring profit and Yen 74 million net losses, respectively, a year ago.

 

For the current term ending Mar 2016 the recurring profit is projected at Yen 500 million and the net profit at Yen 230 million, respectively, on a 9.8% rise in turnover, to Yen 32,200 million.  Sales volume of mainline products, including cleaning products and sanitary goods, will increase. 

 

The financial situation is considered FAIR and good for ORDINARY business engagements. Max credit limit is estimated at Yen 1,245.5 million, on 30 days normal terms.

 

 

REGISTRATION

           

Date Registered:　                   Mar 1983

Regd No.:                                 0100-01-128155 (Tokyo-Chuoku)

Legal Status:                Limited Company (Kabushiki Kaisha

Authorized:                              28,891,240 shares

Issued:                         9,541,335 shares

Sum:                            Yen 5,491 million

 

Major shareholders (%): Mitsuo Aoki (5.6), Takaki Nagahori (5.2), SN Kosan (5.2), Company’s Treasury Stock (5.0), Norikazu Watanabe (4.2), Shigeru Takabayashi (4.2), Trust & Custody Services Bank (2.7), Employees’ S/Holding Assn (2.5), Goldman Sachs (Regular) Acct (2.3), Bank of New York Jasdec Treaty (2.2); foreign owners (13.6)

 

No. of shareholders: 11,707

 

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

 

Managements: Mitsuo Aoki, ch; Takaki Nagahori, pres; Ken’ichi Watanabe, v pres; Isamu Aoki, s/mgn dir; Mutsuo Kumazawa, mgn dir; Masayoshi Abe, mgn dir; Kazutoshi Ozawa, mgn dir; Hideo Masuda, dir; Teruo Ozawa, dir; Toshiyuki Asano, dir

 

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

 

Related companies: Hotta Carpet, Plus Minus Zero Co, other.

 

 

OPERATION

           

Activities: Manufactures household goods: storage furniture (13%), sanitary goods (19%), washing goods (8%), home-use cleaning goods (19%), kitchen equipment (13%), baby & kids’ goods (13%), others (16%)

           

Clients: [Mfrs, wholesalers] Daiso Sangyo Inc, Nishimatsuya Chain, Aoki Trans, Akatsuki Corp, Top Sangyo, other

No. of accounts: 50

Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] Nagoya Customs, Marubeni Intex, Yuwa, BASF, other

 

Payment record: No complaints

 

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

 

Bank References:

            Shizuoka Bank (H/O)

            Mizuho Bank (Kobunacho)

            Relations: Satisfactory

 

 

FINANCES

 (In Million Yen)

 

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/03/2015

31/03/2014

INCOME STATEMENT

　

　

  Annual Sales

　

29,315

27,723

　

  Cost of Sales

21,462

20,001

　

      GROSS PROFIT

7,853

7,721

　

  Selling & Adm Costs

7,630

7,892

　

      OPERATING PROFIT

222

-170

　

  Non-Operating P/L

717

298

　

      RECURRING PROFIT

939

234

　

      NET PROFIT

254

-74

BALANCE SHEET

　

　

  Cash

　

5,589

6,063

　

  Receivables

4,297

4,355

　

  Inventory

6,795

5,732

　

  Securities, Marketable

100

903

　

  Other Current Assets

1,223

1,804

　

      TOTAL CURRENT ASSETS

18,004

18,857

　

  Property & Equipment

9,753

9,229

　

  Intangibles

187

198

　

  Investments, Other Fixed Assets

4,698

3,148

　

      TOTAL ASSETS

32,642

31,432

　

  Payables

947

927

　

  Short-Term Bank Loans

1,159

250

　

　

　

　

　

  Other Current Liabs

1,680

1,584

　

      TOTAL CURRENT LIABS

3,786

2,761

　

  Debentures

　

68

　

  Long-Term Bank Loans

4,386

5,428

　

  Reserve for Retirement Allw

410

330

　

  Other Debts

　

1,328

648

　

      TOTAL LIABILITIES

9,910

9,235

　

      MINORITY INTERESTS

　

　

Common stock

5,491

5,491

　

Additional paid-in capital

7,030

7,023

　

Retained earnings

8,823

8,989

　

Evaluation p/l on investments/securities

847

674

　

Others

1,583

1,063

　

Treasury stock, at cost

(1,043)

(1,043)

　

      TOTAL S/HOLDERS` EQUITY

22,731

22,197

　

      TOTAL EQUITIES

32,641

31,432

CONSOLIDATED CASH FLOWS

　

　

Terms ending:

31/03/2015

31/03/2014

　

Cash Flows from Operating Activities

　

748

272

　

Cash Flows from Investment Activities

-684

-1,283

　

Cash Flows from Financing Activities

-740

64

　

Cash, Bank Deposits at the Term End

　

5,362

5,836

ANALYTICAL RATIOS            Terms ending:

31/03/2015

31/03/2014

　

Net Worth (S/Holders' Equity)

22,731

22,197

　

Current Ratio (%)

475.54

682.98

　

Net Worth Ratio (%)

69.64

70.62

　

Recurring Profit Ratio (%)

3.20

0.84

　

Net Profit Ratio (%)

0.87

-0.27

　

　

Return On Equity (%)

1.12

-0.33

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.63.75

UK Pound

1

Rs.100.12

Euro

1

Rs.71.20

 

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.