MIRA INFORM REPORT
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Report No. : |
331538 |
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Report Date : |
09.07.2015 |
IDENTIFICATION DETAILS
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Name : |
NEC CORPORATION |
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Registered Office : |
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Country : |
Japan |
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Financials (as on) : |
31.03.2015 |
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Date of Incorporation : |
July, 1899 |
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Com. Reg. No.: |
0104-01-022916 (Tokyo-Minatoku) |
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Legal Form : |
Limited Company (Kabushiki Kaisha) |
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Line of Business : |
Manufacturer of Communications/IT Equipment; Offers IT/Networking
Solutions. |
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No. of Employees : |
98,882 |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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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
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Country Name |
Previous Rating (31.12.2014) |
Current Rating (31.03.2015) |
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Japan |
A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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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.
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Source
: CIA |
Company
Name and address
NEC CORPORATION
REGD NAME: Nihon
Denki KK
MAIN OFFICE:
Tel: 03-3454-1111 Fax: 03-3457-7249
URL: http://www.nec.co.jp
E-Mail address: info@nec.co.jp
ACTIVITIES
Mfg of
communications/IT equipment; offers IT/Networking solutions
BRANCHES
Sapporo, Sendai, Fuchu, Kawasaki, Yokohama, Abiko, Saitama, Shizuoka, Nagoya,
Kanazawa, Osaka, Hiroshima, Takamatsu Fukuoka, other (Tot 87)
OVERSEAS
USA, Europe (20),
Latin America (6), Africa (4), Asia (14), Russia, other (Tot 52)
FACTORIES
NEC subsidiary
mfrs (4)
CHIEF
EXEC
NOBUHIRO ENDO,
PRES
Yen Amount: In million Yen, unless otherwise stated
SUMMARY
FINANCES FAIR A/SALES Yen 2,935,517 M
PAYMENTSREGULAR CAPITAL Yen 397,199 M
TREND SLOW WORTH Yen 884,192 M
STARTED 1899 EMPLOYES 98,882
COMMENT
PROVIDER OF COMMUNICATIONS/IT EQUIPMENT & SOLUTIONS.
FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.
Unit: In Million Yen
Forecast
(or estimated) figures for 31/03/2016 fiscal term
HIGHLIGHTS
The subject
company is one of representative high-tech power houses, and top-ranked player
in communications infrastructure
facilities in Japan. Focusing emphasis on IT
services. Carried out integration between NEC Electronics and Renesas Technology
in 2010, and shifted semiconductor and PC businesses to equity-applied firm. In the unprofitable mobile phone businesses,
the firm intends to streamline the production system in the domestic market. It will shift focus to expansion of the cloud and big data businesses.
FINANCIAL
INFORMATION
The sales volume
for Mar/2015 fiscal term amounted to Yen 2,935,517 million, a 3.5% down from
Yen 3,043,114 million in the previous term.
Transfer of the mobile phone mfg and the Internet service provider
businesses eroded sales. The recurring
profit was posted at Yen 112,112 million and the net profit at Yen 57,302
million, respectively, compared with Yen 69,152 million recurring profit and
Yen 33,752 million net losses, respectively, a year ago.
For the current
term ending Mar 2016 the recurring profit is projected at Yen 120,000 million
and the net profit at Yen 65,000 million, respectively, on a 5.6% rise in
turnover, to Yen 3,100,000 million.
Orders related to preparation for the My Number systems will increase
further. Demand for products for fire
safety and protection system from local governments will be steady.
The financial situation is considered FAIR and good for ORDINARY
business engagements. Max credit limit is estimated at
Yen 57,342.9 million, on 30 days normal terms.
REGISTRATION
Date Registered: Jul 1899
Regd No.:
0104-01-022916
(Tokyo-Minatoku)
Legal Status: Limited
Company (Kabushiki Kaisha)
Authorized:
7,500 million shares
Issued:
2,604,732,635 shares
Sum: Yen
397,199 million
Major shareholders
(%):
Master Trust Bank of Japan T (4.9), Japan Trustee Services T (4.0), Employees’
S/Holding Assn (1.9), Chase Manhattan Bank 385036 (1.8), Nippon Life Ins (1.6),
Sumitomo Life Ins (1.5), Bank of New York Mellon SANV10 (1.4), Credit Suisse
Sec (USA) EXCL Bene (1.2), State Street Bank West Treaty (1.2); foreign owners
(36.0)
No. of shareholders: 191,384
Listed on the S/Exchange (s) of: Tokyo
Managements: Kaoru Yano, ch;
Nouhiro Endo, pres; Takashi Nino, v pres; Junji Yasui, v pres; Takaki Shimizu,
v pres; Isamu Kawashima, v pres; Takeshi Kunibe, dir; Hitoshi Ogita, dir; Kaori
Sasaki, dir; Motoyuki Oka, dir; Kunio Noji, dir
Nothing detrimental is known as to the
commercial morality of executives.
Related companies: NEC Electronics,
NEC Personal Products, NEC Fields, other
OPERATION
Activities: Manufactures communications/IT equipment,
offering solutions services:
Public (28%),
enterprise (9%), telecom carrier (25%), system platform (25%), others (13%)
Overseas Sales Ratio (20%)
(Products): PC & servers (PC’s (desktop PCs,
Notebooks, workstations); servers, super computers,
virtual PC center); Storage (NAS/SAN,
tape storage); Software (middleware, ERP software); semiconductors &
components (system LSI, IC & Discrete semiconductor, compound
semiconductor); Peripherals (monitors, projectors, optical disc drives, floppy
disk drives, printers); Networking (for Network service provider, for
enterprise & Broadcasting (digital broadcast products); Home Appliances,
others.
Clients: [Governments, telecommunications carriers,
business firms, wholesalers] NTT Corp, KDDI Corp, Defense Ministry, JR group firms, other
No. of accounts:
2,000
Domestic areas of
activities: Nationwide
Suppliers: [Mfrs,
wholesalers] Supplied from group subsidiary firms: NEC Saitama, NEC Personal Products, NEC Fielding, NEC Communication Systems, NEC
Computer Techno, NEC Soft, NEC System Technology, NEC Infrontia, NEC Networks
& System Integration Services, NEC Engineering, other. .
Payment record: Regular
Location: Business area in Tokyo.
Office premises at the caption address are owned and maintained
satisfactorily.
Bank References:
SMBC (Tokyo)
MUFG (H/O)
Relations:
Satisfactory
FINANCIALS
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FINANCES: (Consolidated
in million yen) |
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Terms Ending: |
31/03/2015 |
31/03/2014 |
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INCOME STATEMENT |
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Annual Sales |
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2,935,517 |
3,043,114 |
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Cost of Sales |
2,039,499 |
2,128,457 |
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GROSS PROFIT |
896,018 |
914,657 |
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Selling & Adm Costs |
767,934 |
808,464 |
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OPERATING PROFIT |
128,084 |
106,193 |
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Non-Operating P/L |
-15,972 |
-37,041 |
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RECURRING PROFIT |
112,112 |
69,152 |
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NET PROFIT |
57,302 |
33,742 |
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BALANCE SHEET |
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Cash |
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159,764 |
192,668 |
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Receivables |
928,367 |
842,308 |
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Inventory |
241,146 |
214,395 |
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Securities, Marketable |
23,340 |
16,291 |
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Other Current Assets |
224,168 |
237,247 |
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TOTAL CURRENT ASSETS |
1,576,785 |
1,502,909 |
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Property & Equipment |
338,115 |
346,186 |
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Intangibles |
188,409 |
198,781 |
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Investments, Other Fixed Assets |
517,343 |
457,453 |
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TOTAL ASSETS |
2,620,652 |
2,505,329 |
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Payables |
466,677 |
446,494 |
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Short-Term Bank Loans |
28,988 |
32,415 |
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Other Current Liabs |
573,883 |
506,676 |
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TOTAL CURRENT LIABS |
1,069,548 |
985,585 |
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Debentures |
50,000 |
140,000 |
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Long-Term Bank Loans |
332,404 |
333,534 |
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Reserve for Retirement Allw |
228,686 |
220,457 |
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Other Debts |
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55,822 |
58,090 |
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TOTAL LIABILITIES |
1,736,460 |
1,737,666 |
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MINORITY INTERESTS |
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Common
stock |
397,199 |
397,199 |
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Additional
paid-in capital |
148,694 |
148,402 |
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Retained
earnings |
207,021 |
182,570 |
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Evaluation
p/l on investments/securities |
47,385 |
34,292 |
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Others |
86,918 |
8,176 |
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Treasury
stock, at cost |
(3,025) |
(2,976) |
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TOTAL S/HOLDERS` EQUITY |
884,192 |
767,663 |
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TOTAL EQUITIES |
2,620,652 |
2,505,329 |
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CONSOLIDATED CASH FLOWS |
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Terms ending: |
31/03/2015 |
31/03/2014 |
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Cash
Flows from Operating Activities |
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87,917 |
94,124 |
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Cash
Flows from Investment Activities |
-47,510 |
-38,893 |
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Cash
Flows from Financing Activities |
-72,027 |
-49,983 |
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Cash,
Bank Deposits at the Term End |
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181,132 |
206,637 |
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ANALYTICAL RATIOS Terms
ending: |
31/03/2015 |
31/03/2014 |
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Net
Worth (S/Holders' Equity) |
884,192 |
767,663 |
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Current
Ratio (%) |
147.43 |
152.49 |
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Net
Worth Ratio (%) |
33.74 |
30.64 |
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Recurring
Profit Ratio (%) |
3.82 |
2.27 |
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Net
Profit Ratio (%) |
1.95 |
1.11 |
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Return
On Equity (%) |
6.48 |
4.40 |
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
Rs.63.57 |
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1 |
Rs.98.22 |
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Euro |
1 |
Rs.69.93 |
INFORMATION DETAILS
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Analysis Done by
: |
KAR |
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Report Prepared
by : |
NIT |
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
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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 |
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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 |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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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 |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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-- |
NB |
New Business |
-- |
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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%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.