MIRA INFORM REPORT

 

 

Report No. :

331182

Report Date :

10.07.2015

 

IDENTIFICATION DETAILS

 

Name :

SONY CORPORATION

 

 

Registered Office :

1-7-1 Konan Minatoku Tokyo 101-8980

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2015

 

 

Date of Incorporation :

May 1946

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Manufactures consumer electronics, audio & video equipment: MC (16%), G & NS (16%), IP & S (9%), HE & S (15%), devices (9%), movie & music (17%), finance &          others (18%)

 

 

No. of Employees :

131,700

 

 

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 81,300.6 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 – 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

 

SONY CORPORATION

 

REGD NAME:   Sony KK

MAIN OFFICE:  1-7-1 Konan Minatoku Tokyo 101-8980 JAPAN

                                    Tel: 03-03-6748-2111     Fax: 03-5443-2148

 

URL:                 http://www.sony.co.jp/; sony.net (Global network)

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

 

ACTIVITIES:     Mfg of consumer electronics, audio visual equipment

BRANCHES:     Tokyo (2), Atsugi, Fujisawa, Tagashiro (Tot 8)

OVERSEAS:     China (6), USA, UK, other, worldwide (Tot 75 including subsidiaries)

 

CHIEF EXEC:   KAZUO HIRAI, PRES & CEO

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                             A/SALES          Yen 8,215,880 M

PAYMENTSREGULAR               CAPITAL           Yen 707,038 M

TREND STEADY                       WORTH            Yen 2,928,469 M

STARTED         1946                             EMPLOYES      131,700

 

COMMENT:      MFR OF CONSUMER ELECTRONICS.  FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

MAX CREDIT LIMIT: YEN 81,300.6 MILLION, 30 DAYS NORMAL TERMS.

 

                     Unit: In Million Yen

Forecast (or estimated) figures for 31/03/2016 fiscal term

 

 

HIGHLIGHTS

 

The subject company was established by Futoshi Ibuka for wholesaling communication equipment.  Incorporated in 1946, gradually shifted the mainstay to consumer electronics.  Business originated in USA where the products were well known and marketed, and returned to Japan for its quality of goods.  (We call it products returning from abroad, like students returning from abroad speaking perfect English).  Globally known mfr of home electronics, and audio video equipment.  Known for strong brand name.  Enjoyed rapid growth of game business.  Diversifying into movies, music and finance.  Formed business collaboration with OLYMPUS field of medical equipment.    Rapidly developing game business, diversifying into movies, music, finance such as insurance.  Enjoyed rapid growth of game business.  Formed business collaboration with OLYMPUS field of medical equipment.  The company has been suffering prolonged slowdown since the late 90’s.  It is working to restructure its business into profit yielding company through personal cutbacks, focus on fewer robust businesses, assets sellout and others.

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2015 fiscal term amounted to Yen 8,215,880 million, a 5.8% up from Yen 7,767,266 million in the previous term.  Sales of electronic devices, game machines remained steady.  In the smartphone business, demand recovered more sharply than anticipated.      The recurring profit was posted at Yen 39,729 million, while net losses at Yen 125,980 million, respectively, compared with Yen 25,741 million recurring profit and Yen 128,369 million net losses, respectively, a year ago. 

           

For the current term ending Mar 2016 the recurring profit is projected at Yen 345,000 million and the net profit at Yen 140,000 million, respectively, on a 3.8% fall in turnover, to Yen 7,900,000 million.  Operating profit will soar, thanks to the strategy emphasizing higher profit margin in the smartphone business, as well as continued steady operations in the games, electronic devices, and financing businesses. 

 

The financial situation is considered FAIR and good for ORDINARY business engagements. Max credit limit is estimated at Yen 81,300.6 million, on 30 days normal terms.

 

 

REGISTRATION

 

Date Registered:                       May 1946

Legal Status:               Limited Company (Kabushiki Kaisha)

Authorized:                  3,600 million shares

Issued:                        1,169,773,260 shares

Sum:                            Yen 707,038 million

           

Major shareholders (%): Citibank for Depositary RH (10.9), Master Trust Bank of Japan T (4.5), Japan Trustee Services T (4.3), Goldman Sachs (Regular) Acct (2.9), State Street Bank & Trust (2.1), Bank of New York Mellon SANV10 (1.5), State Street Bank West Treaty 505234 (1.2), State Street Bank & Trust 505225 (1.2), Japan Trustee Services T1 (1.1), Japan Trustee Services T5 (1.1); foreign owners (56.6).

           

No. of shareholders: 489,316

 

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

 

Managements:  Kazuo Hirai, pres; Ken’ichiro Yoshida, v pres; Tomoyuki Suzuki, v pres; Shiro Kambe, dir; Masashi Imamura, dir; Shigeki Ishizuka, dir

 

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

Related companies: Sony Financial HLD, Sony America, other (consolidated subsidiaries – domestic 23, overseas 75)

 

 

OPERATION

           

Activities: Manufactures consumer electronics, audio & video equipment: MC (16%), G & NS (16%), IP & S (9%), HE & S (15%), devices (9%), movie & music (17%), finance &     others (18%)

 

Overseas Sales Ratio (73%):

 

Clients: [Mfrs, wholesalers] Sony Electronics Inc, Sony Marketing, Sony UK Ltd, Sony Electronics Singapore, Toshiba Devise Corp, other.

No. of accounts: 2,000

Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] Sony EMCS, Sony Semiconductor Kyushu, Sony Energy             Device, Sony Chemical & Information Device, Sony EMCS Sdn Bhd, Sony Electronics, other.

 

Payment record: Regular

 

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

 

Bank References:

SMBC (Gotanda)

MUFG (H/O)

Relations: Satisfactory

 

 

FINANCES

 

 (In Million Yen)

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/03/2015

31/03/2014

INCOME STATEMENT

　

　

  Annual Sales

　

8,215,880

7,767,216

　

  Cost of Sales

5,275,144

5,140,053

　

      GROSS PROFIT

2,940,736

2,627,163

　

  Selling & Adm Costs

2,872,188

2,600,668

　

      OPERATING PROFIT

68,548

26,495

　

  Non-Operating P/L

-28,819

-754

　

      RECURRING PROFIT

39,729

25,741

　

      NET PROFIT

-125,980

-128,369

BALANCE SHEET

　

　

  Cash

　

949,413

1,046,466

　

  Receivables

986,500

946,553

　

  Inventory

665,432

733,943

　

  Securities, Marketable

936,731

832,566

　

  Other Current Assets

659,825

645,358

　

      TOTAL CURRENT ASSETS

4,197,901

4,204,886

　

  Property & Equipment

739,285

750,010

　

  Intangibles

642,361

675,663

　

  Investments, Other Fixed Assets

10,254,784

9,703,161

　

      TOTAL ASSETS

15,834,331

15,333,720

　

  Payables

622,215

712,829

　

  Short-Term Bank Loans

62,008

111,836

　

　

　

　

　

  Other Current Liabs

4,061,367

3,958,949

　

      TOTAL CURRENT LIABS

4,745,590

4,783,614

　

  Debentures

　

　

　

  Long-Term Bank Loans

712,087

916,648

　

  Reserve for Retirement Allw

298,753

284,963

　

  Other Debts

　

7,144,184

6,561,239

　

      TOTAL LIABILITIES

12,900,614

12,546,464

　

      MINORITY INTERESTS

　

　

Common stock

707,038

646,654

　

Additional paid-in capital

1,185,777

1,127,090

　

Retained earnings

813,765

940,262

　

Evaluation p/l on investments/securities

(385,283)

(451,585)

　

Others

611,392

525,004

　

Treasury stock, at cost

(4,220)

(4,284)

　

      TOTAL S/HOLDERS` EQUITY

2,928,469

2,783,141

　

      TOTAL EQUITIES

15,834,331

15,333,720

CONSOLIDATED CASH FLOWS

　

　

Terms ending:

31/03/2015

31/03/2014

　

Cash Flows from Operating Activities

　

754,640

664,116

　

Cash Flows from Investment Activities

-639,636

-710,502

　

Cash Flows from Financing Activities

-263,195

207,877

　

Cash, Bank Deposits at the Term End

　

949,413

1,046,466

ANALYTICAL RATIOS            Terms ending:

31/03/2015

31/03/2014

　

Net Worth (S/Holders' Equity)

2,928,469

2,783,141

　

Current Ratio (%)

88.46

87.90

　

Net Worth Ratio (%)

18.49

18.15

　

Recurring Profit Ratio (%)

0.48

0.33

　

Net Profit Ratio (%)

-1.53

-1.65

　

　

Return On Equity (%)

-4.30

-4.61

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.63.51

UK Pound

1

Rs.97.85

Euro

1

Rs.70.50

 

 

INFORMATION DETAILS

 

Analysis Done by :

RAS

 

 

Report Prepared by :

TPT

 

               

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.