MIRA INFORM REPORT

Report No. :	484839
Report Date :	13.01.2018

IDENTIFICATION DETAILS

Name :	TOKYO EASTERN CEMENT COMPANY LIMITED
Registered Office :	# 469-1/1, Galle Road, Colombo 03
Country :	Sri Lanka
Date of Incorporation :	20.12.2012
Com. Reg. No.:	PB 5092 PV
Legal Form :	Private, Limited Liability Company (In Operation)
Line of Business :	Manufacturing & Distributing of Cement and Related Products
No. of Employees :	1000+ Approximately

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23^rd January 2017)

MIRA’s Rating :

A

Credit Rating	Explanation	Rating Comments
A	Acceptable Risk	Business dealings permissible with moderate risk of default

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

Country Name	Previous Rating (30.06.2017)	Current Rating (30.09.2017)
Sri Lanka	A2	A2

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderately Low Risk	B1
Moderate Risk	B2
Moderately High Risk	C1
High Risk	C2
Very High Risk	D

SRI LANKA - ECONOMIC OVERVIEW

Sri Lanka is attempting to sustain economic growth while maintaining macroeconomic stability under an IMF program. The government's high debt payments and bloated civil service cadre, which have contributed to historically high budget deficits and low tax revenues, remain a concern. Government debt is about 77% of GDP and remains among the highest of the emerging markets.

The new government in 2015 drastically increased wages for public sector employees, which boosted demand for consumer goods but hurt the overall balance of payments and reduced foreign exchange reserves.

Tourism has experienced strong growth during recent years following the resolution of the government's 26-year conflict with the Liberation Tigers of Tamil Eelam. The government has been pursuing large-scale reconstruction and development projects in its efforts to spur growth.

Source : CIA

COMPANY PROFILE

BASIC INFORMATION

a.	Name of Subject of Inquiry	TOKYO EASTERN CEMENT COMPANY LIMITED
b.	Legal Form & Status	Private, Limited Liability Company (In Operation)
c.	Managing Director Chairman	Mr S R Gnanam Mr Harsha Cabral
d.	Primary Line of Business	Manufacturing & Distributing of Cement and Related Products
		# 469 1/1, Galle Road, Colombo 03
		Sri Lanka.
e.	Principal Place of Business	Tel. No: (00 94 11) 2558 100 Fax. No: (00 94 11) 2500 897 E-Mail: sales@tokyocement.lk Web Site: http://www.tokyocement.com/
f.	Employees	1000+ Approximately

Company Details

a.	Registration No	PB 5092
	Date of Registration	20^th December 2012
b.	Re-registration No	PB 5092 PV
	Date of Re-registration	22^nd June 2016
c.	Registered Office	# 469-1/1, Galle Road, Colombo 03, Sri Lanka.
d.	Director Board / Ownership As At 10^th August 2017	Simon Rajaseelan Gnanam	Director
		Warnakulasuriya Christopher Fernando	Director
		Arul Selvaraj Gnanam Gunaseelan	Director
		Elijah Jayaseelan Gnanam	Director
		Ranjeewam Seevaratnam	Director
		Dr. Liyanamohottige Joseph Griharsha Cabral	Director
		Wadngamndallge Marius Ravindra Srilal Dias	Director
		Asite Drapath Bandara Talwatte	Director
e.	Sated Share Capital	LKR 4,150,001,000.00
f.	No. of Shares	4,150,001,000
g.	Preferential Shares	NA
h.	Nominal Value of Share	NA
i.	Auditors	B D O Partners Chartered Accountants Charter House, Sir Chittampalam A Gardinar Mawatha, Colombo 02, Sri Lanka.
j.	Company Secretaries	Seccam (Pvt) Ltd # 1E, 2/1, De Fonseka Place, Colombo 05, Sri Lanka.
k.	Main Bank/s	Commercial Bank of Ceylon PLC, Citi Bank, Bank of Ceylon, Sampath Bank PLC

Shareholders

NO.	NAME	NUMBER OF SHARES
1.	Tokyo Cement Company Lanka Plc (PQ 115)	2,300,001,000
2.	Tokyo Super Cement Company Lanka(Pvt)Ltd (PV 2863)	1,850,000,000

FINANCIAL DETAILS

- Most recent available Financial Information

NA

CURRENT INVESTIGATION

Company Logo

• HISTORY.

The subject company was initially formed on 24^th June 1999 under N (PVS) 32935 under the Companies Act of Sri Lanka. The subject company was subsequently Re-registered on 19^th December 2008 under PV 10347 under the Companies Act No 7, of 2007 as per the mandatory regulations of Sri Lanka.

Caption

The fully-automated, hi-tech plant is the company's fourth mill and is slated to nearly double their production capacity when it begins commercial operations in February 2017. The cement grinding mill and bulk cement manufacturing facility once in full operations will add 1 million metric tonnes per annum to the existing capacity of Tokyo Cement, bringing the total to 2.8 million MTs per annum.

The pilot operation was inaugurated by Ube Industries Japan Director and Senior Managing Executive Officer Tadashi Matsunami, the technology services partner of Tokyo Cement.

Chairman Dr. Harsha Cabral and Tokyo Cement Managing Director S.R. Gnanam and Directors of the Tokyo Cement Group were present.

Tokyo Cement Managing Director S.R. Gnanam said, "Our strategic priorities pivot on expanding capacity and strengthening our supply chains in order to meet anticipated demand growth fuelled by the country's development momentum. Today, we set forth on yet another momentous journey and in the upcoming months we will strive to ensure that Tokyo Cement is fully geared to meet the rising demands of the construction industry and the national infrastructural growth."

The state-of-the-art machinery from Japan, India and Germany that are being trialled at the new factory is a reflection of Tokyo Cement's commitment to invest in innovative technology whilst adopting an environmentally-efficient production process.

This plant commissioning symbolised the beginning of an ambitious expansion plan undertaken by the Tokyo Eastern Cement Company (Private) Limited, a fully owned subsidiary of Tokyo Cement Company (Lanka) to reinforce the company's leadership position.

This plan will see the company investing over US$ 50 million over the next few months to increase manufacturing capacity of Tokyo Cement's products, trusted for decades for their superior strength and quality.

The multipronged project will include the setting up of a fully-automated dry mortar manufacturing plant to produce the company's innovative range of value added products.

Upholding the company's commitment to environmental sustainability, the company will also commission an 8 MW sustainable biomass power plant geared to meet the energy requirements of the new factory. As part of this planned expansion drive, Tokyo Cement will develop the private jetty in Trincomalee to accommodate larger vessels that can transport bulk quantities of raw material and finished product to and fro from the new plant.

• OPERATIONAL DETAILS

General

The company Tokyo Eastern Cement Company is an Importer and manufacturer and distributor of Cement and related products in Sri Lanka. The company a fully owned subsidiary of the Tokyo Cement group has its factories across the Island for cement manufacturing the recent built in Trincomalee.

Products

Portland Cement (Nippon Brand) Tokyo Super OPC - Ordinary Portland cement Tokyo Super PPC - Portland Pozzolana Cement Tokyo Super Mix - Concrete Mixture

Tokyo Super bond - Tile Adhesive (Standard, Fast Drying, Rapid etc..)

Tokyo Super Seal - Water Proofing Cement

Tokyo Super Floor - Flooring Compound

Tokyo Super Cast - Internal & External Plaster Cement

Tokyo Super Set - Screed Mortar, Block Bond

Tokyo Super Lite - Blocks

Employees

1000+ approximately with workers on contract basis (Approximately 890 Permeant)

Export Countries

NA

Import Countries

Japan, Germany, India

Associate / Subsidiary Companies

Fuji Cement Company (Lanka) Limited merged with Tokyo Cement Company (Lanka) PLC 100 percent owned

Tokyo Cement Colombo Terminal (Pvt) Limited 89.17 % owned

Tokyo Super Cement Company Lanka (Pvt) Limited

100 percent owned

Tokyo Cement Power (Lanka) Limited

100 percent owned

Tokyo Eastern Cement Company Limited (Initial stage) 100% owned

Factory / Warehouse and Sales Outlets

Owned

Personal Details of Key Persons

Director 1
ITEM	DETAIL
Name	Simon Rajaseelan Gnanam
ID Number	561240272V
Nationality	Sri Lankan
Gender	Male
Date of Birth	03^rd May 1956
Age	61 Years
Address	# 14, Joseph Frazer Road, Colombo 05, Sri Lanka.
Director 2
ITEM	DETAIL
Name	Warnakulasuriya Christopher Fernando
ID Number	483292325V
Nationality	Sri Lankan
Gender	Male
Date of Birth	24^th November 1948
Age	69 Years
Address	# 469-1/1, Galle Road, Colombo 03, Sri Lanka.
Director 3
ITEM	DETAIL
Name	Arul Selvaraj Gnanam Gunaseelan
ID Number	510653700V
Nationality	Sri Lankan
Gender	Male
Date of Birth	05^th March 1951
Age	66 Years
Address	# 16, Frankfort Place, Colombo 04, Sri Lanka.
Director 4
ITEM	DETAIL
Name	Elijah Jayaseelan Gnanam
ID Number	631200176V
Nationality	Sri Lankan
Gender	Male
Date of Birth	29^th April 1963
Age	54 Years
Address	# 145, Park Road,Colombo 05, Sri Lanka.
Director 5
ITEM	DETAIL
Name	Ranjeewam Seevaratnam
ID Number	432681750V
Nationality	Sri Lankan
Gender	Male
Date of Birth	24^th September 1943
Age	74 Years
Address	# 19-4/6, Station Court, 19, Station Road, Colombo 06, Sri Lanka.
Director 6
ITEM	DETAIL
Name	Dr. Liyanamohottige Joseph Griharsha Cabral
ID Number	600521454V
Nationality	Sri Lankan
Gender	Male
Date of Birth	21^st February 1960
Age	57 Years
Address	# 114/8, Horton Place, Colombo 07, Sri Lanka.
Director 7
ITEM	DETAIL
Name	Wadngamndallge Marius Ravindra Srilal Dias
ID Number	541982396V
Nationality	Sri Lankan
Gender	Male
Date of Birth	16^th July 1954
Age	63 Years
Address	# 18/122, Evergreen Park, Dabare Mawatha, Colombo 05, Sri Lanka.
Director 8
ITEM	DETAIL
Name	Asite Drapath Bandara Talwatte
ID Number	551260208V
Nationality	Sri Lankan
Gender	Male
Date of Birth	05^th May 1955
Age	62 Years
Address	# 14, Cambridge Terrece, Colombo 07, Sri Lanka.

Information Declined

UNABLE TO CONTACT

(00 94 11) 2558 100 (Number is Continuously Ringing)

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	INR 63.53
UK Pound	1	INR 86.05
Euro	1	INR 76.53
LKR	1	INR 0.41

Note: Above are approximate rates obtained from sources believed to be correct

INFORMATION DETAILS

Information Gathered by :	SPR
Analysis Done by :	NIY
Report Prepared by :	NIT

RATING EXPLANATIONS

Credit Rating	Explanation	Rating Comments
A++	Minimum Risk	Business dealings permissible with minimum risk of default
A+	Low Risk	Business dealings permissible with low risk of default
A	Acceptable Risk	Business dealings permissible with moderate risk of default
B	Medium Risk	Business dealings permissible on a regular monitoring basis
C	Medium High Risk	Business dealings permissible preferably on secured basis
D	High Risk	Business dealing not recommended or on secured terms only
NB	New Business	No recommendation can be done due to business in infancy stage
NT	No Trace	No recommendation can be done as the business is not traceable

NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.

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 are as follows:

· Financial condition covering various ratios

· Company background and operations size

· Promoters / Management background

· Payment record

· Litigation against the subject

· Industry scenario / competitor analysis

· Supplier / Customer / Banker review (wherever available)

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