MIRA INFORM REPORT

 

 

Report No. :

346677

Report Date :

24.10.2015

 

IDENTIFICATION DETAILS

 

Name :

HONDA MOTOR CO LTD

 

 

Registered Office :

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

 

 

Country :

Japan

 

 

Financials (as on) :

31.05.2015

 

 

Date of Incorporation :

September, 1948

 

 

Com. Reg. No.:

0104-01-027577 (Tokyo-Minatoku)

 

 

Legal Form :

Limited Company (Kabushiki Kaisha

 

 

Line of Business :

Mfr of motorcycles, four-wheeled cars, power equipment

 

 

No. of Employee :

22,954

 

RATING & COMMENTS

 

MIRA’s Rating :

AA

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

Maximum Credit Limit :

Yen 344,919.5 million

 

Status :

Excellent 

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 first-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

 

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     -

 

                        *.. The is its Tochigi Branch/Factory

 

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

 

TAKAHIRO HACHIGO, PRES

 

 

Yen Amount

 

In million Yen, unless otherwise stated

 

 

SUMMARY

 

FINANCES        FAIR                 　A/SALES       Yen 13,328,099 M

PAYMENTS      REGULAR         　CAPITAL        Yen 86,067 M

TREND UP                    　WORTH         Yen 7,382,821 M

STARTED         1948                 　EMPLOYES   22,954

 

 

COMMENT

 

MFR OF MOTORCYCLES, FOUR-WHEELED CARS, OTHER 

FINANCIAL SITUATION COSIDERED FAI AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

MAX CREDIT LIMIT: YEN 344,919.5 MILLION, 30 DAYS NORMAL TERMS

 

 

                        Unit: In Million Yen.  Firm introduced IFRS (International Standard) from the                                               Mar/2015.

Forecast figures for the 31/03/2016 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.  Business expansion in emerging counties is an issue after a delayed market entry.  Broadening the lineup of hybrid cars.  Expanding from general-purpose equipment, such as tillers, to humanoid robots and small jets.  Proactive in technology.  Founder’s name remains but the founding family has no influence.  

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2015 fiscal term amounted to Yen 13,328,099 million, a 6.6% up from Yen 12,506,091 million in the previous term.  The recurring profit was posted at Yen 806,237 million and the net profit at Yen 561,098 million, respectively, compared with Yen 933,903 million recurring profit and Yen 665,911 million net profit, respectively, a year ago. 

 

(Apr/Jun/2015 results): Sales Yen 2,704,782 million (up 15.5%), operating profit Yen 239,286 million (up 15.9%), recurring profit Yen 282,327 million (up 15.9%), net profit Yen 203,876 million (up 22.0%).  (% as compared with the corresponding period a year ago).

           

For the current term ending Mar 2016 the recurring profit is projected at Yen 805,000 million and the net profit at Yen 525,000 million, respectively, on an 8.8% rise in turnover, to Yen 14,500,000 million.  Domestic new car sales will contribute to earnings.  

 

The financial situation is considered FAIR and good for ORDINARY business engagements.  Max credit limit is estimated at Yen 344,919.5 million, on 30 days normal terms.

 

 

 

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 (5.7), Moxley & Co (4.6), Master Trust Bank of Japan T (3.9), State Street Bank & Trust 505223 (2.8), Meiji Yasuda Life Ins (2.8), State Street Bank & Trust (2.4), Tokio Marine & Nichido Fire Ins (2.3), MUFG (2.0), Nippon Life Ins (1.4), Mitsui Sumitomo Ins (1.4); foreign owners (43.6)

 

No. of shareholders: 186,746

 

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 (2%) Overseas Sales (86%)

           

Clients:             [Subsidiary agent dealers] Honda Patents & Technologies North America, American Honda Motor, Honda Automobile, 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:

31/03/2015

31/03/2014

INCOME STATEMENT

　

　

  Annual Sales

　

13,328,099

12,506,091

　

  Cost of Sales

10,330,084

9,590,557

　

      GROSS PROFIT

2,998,015

2,915,534

　

  Selling & Adm Costs

2,327,412

2,091,670

　

      OPERATING PROFIT

670,603

823,864

　

  Non-Operating P/L

135,634

10,039

　

      RECURRING PROFIT

806,237

933,903

　

      NET PROFIT

561,098

665,911

BALANCE SHEET

　

　

  Cash

　

1,471,730

1,193,584

　

  Receivables

820,681

736,871

　

  Inventory

1,498,312

1,334,775

　

  Securities, Marketable

　

　

　

  Other Current Assets

2,505,417

2,283,928

　

      TOTAL CURRENT ASSETS

6,296,140

5,549,158

　

  Property & Equipment

3,189,511

2,821,542

　

  Intangibles

759,535

669,783

　

  Investments, Other Fixed Assets

8,180,651

7,007,955

　

      TOTAL ASSETS

18,425,837

16,048,438

　

  Payables

1,157,738

1,079,318

　

  Short-Term Bank Loans

2,833,563

2,622,436

　

　

　

　

　

  Other Current Liabs

1,309,753

1,050,046

　

      TOTAL CURRENT LIABS

5,301,054

4,751,800

　

  Debentures

　

　

　

  Long-Term Bank Loans

3,926,276

3,224,512

　

  Reserve for Retirement Allw

592,724

463,163

　

  Other Debts

　

1,222,962

1,050,035

　

      TOTAL LIABILITIES

11,043,016

9,489,510

　

      MINORITY INTERESTS

　

　

Common stock

86,067

86,067

　

Additional paid-in capital

171,118

171,117

　

Retained earnings

6,083,573

5,831,140

　

Evaluation p/l on investments/securities

794,034

273,359

　

Others

274,194

223,394

　

Treasury stock, at cost

(26,165)

(26,149)

　

      TOTAL S/HOLDERS` EQUITY

7,382,821

6,558,928

　

      TOTAL EQUITIES

18,425,837

16,048,438

CONSOLIDATED CASH FLOWS

　

　

Terms ending:

31/03/2015

31/03/2014

　

Cash Flows from Operating Activities

　

1,020,404

449,108

　

Cash Flows from Investment Activities

-840,496

-921,023

　

Cash Flows from Financing Activities

12,488

355,458

　

Cash, Bank Deposits at the Term End

　

1,471,730

1,193,584

ANALYTICAL RATIOS            Terms ending:

31/03/2015

31/03/2014

　

Net Worth (S/Holders' Equity)

7,382,821

6,558,928

　

Current Ratio (%)

118.77

116.78

　

Net Worth Ratio (%)

40.07

40.87

　

Recurring Profit Ratio (%)

6.05

7.47

　

Net Profit Ratio (%)

4.21

5.32

　

　

Return On Equity (%)

7.60

10.15

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.64.88

UK Pound

1

Rs.99.89

Euro

1

Rs.72.06

 

INFORMATION DETAILS

 

Analysis Done by :

HEE

 

 

Report Prepared by :

SDA

 

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.