MIRA INFORM REPORT

Report Date :

10.09.2007

IDENTIFICATION DETAILS

Name :	SMC CORPORATION
Registered Office :	Akihabara UDX Bldg, 4-14-1 Sotokanda Chiyodaku Tokyo 101-0021
Country :	Japan
Financials (as on) :	31.03.2007
Date of Incorporation :	Apr 1959
Legal Form :	Limited Company (Kabushiki Kaisha)
Line of Business :	Manufacturing of pneumatic equipment & systems

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	Yen 11254 millions
Status :	Good
Payment Behaviour :	Regular

name

SMC CORPORATION

REGD NAME

SMC KK

MAIN OFFICE

Akihabara UDX Bldg, 4-14-1 Sotokanda Chiyodaku Tokyo 101-0021 JAPAN

Tel : 03-5207-8271

Fax : 03-5298-5361

URL : http://smcworld.com/

E-Mail address: pro@smc.jpn.co.jp

ACTIVITIES

Mfg of pneumatic equipment & systems

BRANCH(ES)

57 domestic; 260 overseas (outside Japan)

FACTORY(IES)

17 in Japan;

OVERSEAS

China, Singapore, Australia, Korea, Germany, Italy, UK, USA, Canada

CHIEF EXEC

KATSUNORI MARUYAMA, PRES

Yen Amount: In million Yen, unless otherwise stated

SUMMARY

FINANCES FAIR A/SALES Yen 339,689 M

PAYMENTS REGULAR CAPITAL Yen 61,005 M

TREND STEADY WORTH Yen 536,917 M

STARTED 1959 EMPLOYES 5,455

COMMENT

MFR OF PNEUMATIC EQUIPMENT & SYSTEMS. FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

MAX CREDIT LIMIT: YEN 11,254.0 MILLION, 30 DAYS NORMAL TERMS.

Forecast (or estimated) figures for 31/03/2008 fiscal term

HIGHLIGHTS

This is top mfr of pneumatic equipment, including magnetic valves and air cylinders, holding 60% domestic market share and 20% global share. Originally set up in 1959 as Sintering Metal Corp, making sintering metal filters by powder metallurgy. Has wide worldwide networks of subsidiaries.

FINANCIAL INFORMATION

The sales volume for Mar/2007 fiscal term amounted to Yen 339,689 million, a 10.4% up from Yen 307,907 million in the previous term. Sales brisk in Asia and those for Europe grew steadily. Domestic sales increased on recovery of those to automakers. Weaker Yen against foreign currencies also contributed. The recurring profit was posted at Yen 95,987 million and the net profit at Yen 63,073 million, respectively, compared with Yen 82,230 million recurring profit and Yen 53,458 million net profit, respectively, a year ago.

For the current term ending Mar 2008 the recurring profit is projected at Yen 103,500 million and the net profit at Yen 67,200 million, on a 4% rise in turnover, to Yen 354,000 million. Enlarged plant in China and set up of Beijing Technical center will contribute. Also expanding bases in Singapore and Europe. Net profit only edging up dragged by higher interest expense.

The financial situation is considered maintained FAIR and good for ORDINARY business engagements. Max credit limit is estimated at Yen 11,254.0 million, on 30 days normal terms.

REGISTRATION

Date Registered: Apr 1959

Legal Status: Limited Company (Kabushiki Kaisha)

Authorized: 240 million shares

Issued: 71,869,359 shares

Sum: Yen 61,005 million

Major shareholders (%): Allied Materials (6.7), Ton Finance BV (5.3), Japan Trustee Services T (4.3), Takada

International (4.2), Master Trust Bank of Japan T (3.8), Chase London SL Omnibus Acct

(3.2), State Street Bank & Trust 505103 (2.9), Resona Bank (2.7), Dai-Ichi Life Ins (1.3),

Kyoko Neft (1.9); foreign owners (47.9)

No. of shareholders: 10,797

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

Managements: Yoshiyuki Takada, ch; Katsunori Maruyama, pres; Fumitaka Itoh, s/mgn dir; Ikui Usui,

s/mgn dir; Hisao Sagara, s/mgn dir; Yoshiki Takada, mgn dir; Katsunori Tomita, mgn dir;

Sunao Tonami, mgn dir; Keiji Katakura, mgn dir; Kanji Taruoka, mgn dir

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

OPERATION

Activities: Manufactures automatic control equipment & systems, sintered filters, various types of filtration element (--100%).

(Overseas sales ratio 52%).

Clients: [Auto makers, electric appliances mfrs] Toyota Motor, Nissan Motors, Matsushita Electric Ind, other.

No. of accounts: 2,000

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Sumitomo Light Metal Ind, Mitsubishi Aluminum, Matsushita Automation Controls, other.

Payment record: Regular

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

Bank References

Resona (Shimbashi)

Mizuho Bank (Shimbashi)

Relations: Satisfactory

FINANCES

(In Million Yen)

FINANCES: (Consolidated in million yen)

　

　

Terms Ending:

31/03/2007

31/03/2006

INCOME STATEMENT

Annual Sales

　

339,689

307,827

Cost of Sales

173,007

163,149

GROSS PROFIT

166,681

144,677

Selling & Adm Costs

77,717

69,153

OPERATING PROFIT

88,964

75,524

Non-Operating P/L

7,023

6,706

RECURRING PROFIT

95,987

82,230

　

NET PROFIT

63,073

53,458

BALANCE SHEET

Cash

　

176,597

146,312

Receivables

90,387

82,774

Inventory

133,857

112,110

Securities, Marketable

7,790

6,864

Other Current Assets

16,820

15,022

TOTAL CURRENT ASSETS

425,451

363,082

Property & Equipment

99,730

91,961

Intangibles

7,082

6,397

Investments, Other Fixed Assets

155,567

151,948

TOTAL ASSETS

687,830

613,388

Payables

53,820

49,005

Short-Term Bank Loans

2,989

4,520

　

　

　

Other Current Liabs

50,065

45,588

TOTAL CURRENT LIABS

106,874

99,113

Debentures

5,525

5,645

Long-Term Bank Loans

7,235

5,850

Reserve for Retirement Allw

23,408

23,436

Other Debts

　

7,871

7,492

TOTAL LIABILITIES

150,913

141,536

MINORITY INTERESTS

2,094

Common stock

61,005

61,005

Additional paid-in capital

72,678

72,576

Retained earnings

367,543

311,640

Evaluation p/l on investments/securities

11,629

15,138

Others

24,316

9,687

Treasury stock, at cost

(254)

(288)

TOTAL S/HOLDERS` EQUITY

536,917

469,758

　

TOTAL EQUITIES

687,830

613,388

CONSOLIDATED CASH FLOWS

Terms ending:

31/03/2007

31/03/2006

Cash Flows from Operating Activities

　

56,435

59,121

Cash Flows from Investment Activities

-28,842

-34,605

Cash Flows from Financing Activities

-7,926

-9,261

　

Cash, Bank Deposits at the Term End

　

144,714

121,708

ANALYTICAL RATIOS Terms ending:

31/03/2007

31/03/2006

Net Worth (S/Holders' Equity)

536,917

469,758

Current Ratio (%)

398.09

366.33

Net Worth Ratio (%)

78.06

76.58

Recurring Profit Ratio (%)

28.26

26.71

Net Profit Ratio (%)

18.57

17.37

Return On Equity (%)

11.75

11.38

INCOME STATEMENT
	Annual Sales		339,689	307,827
	Cost of Sales		173,007	163,149
	GROSS PROFIT		166,681	144,677
	Selling & Adm Costs		77,717	69,153
	OPERATING PROFIT		88,964	75,524
	Non-Operating P/L		7,023	6,706
	RECURRING PROFIT		95,987	82,230
	NET PROFIT		63,073	53,458
BALANCE SHEET
	Cash		176,597	146,312
	Receivables		90,387	82,774
	Inventory		133,857	112,110
	Securities, Marketable		7,790	6,864
	Other Current Assets		16,820	15,022
	TOTAL CURRENT ASSETS		425,451	363,082
	Property & Equipment		99,730	91,961
	Intangibles		7,082	6,397
	Investments, Other Fixed Assets		155,567	151,948
	TOTAL ASSETS		687,830	613,388
	Payables		53,820	49,005
	Short-Term Bank Loans		2,989	4,520
	Other Current Liabs		50,065	45,588
	TOTAL CURRENT LIABS		106,874	99,113
	Debentures		5,525	5,645
	Long-Term Bank Loans		7,235	5,850
	Reserve for Retirement Allw		23,408	23,436
	Other Debts		7,871	7,492
	TOTAL LIABILITIES		150,913	141,536
	MINORITY INTERESTS			2,094
	Common stock		61,005	61,005
	Additional paid-in capital		72,678	72,576
	Retained earnings		367,543	311,640
	Evaluation p/l on investments/securities		11,629	15,138
	Others		24,316	9,687
	Treasury stock, at cost		(254)	(288)
	TOTAL S/HOLDERS` EQUITY		536,917	469,758
	TOTAL EQUITIES		687,830	613,388
CONSOLIDATED CASH FLOWS
		Terms ending:	31/03/2007	31/03/2006
	Cash Flows from Operating Activities		56,435	59,121
	Cash Flows from Investment Activities		-28,842	-34,605
	Cash Flows from Financing Activities		-7,926	-9,261
	Cash, Bank Deposits at the Term End		144,714	121,708
ANALYTICAL RATIOS Terms ending:			31/03/2007	31/03/2006
		Net Worth (S/Holders' Equity)	536,917	469,758
		Current Ratio (%)	398.09	366.33
		Net Worth Ratio (%)	78.06	76.58
		Recurring Profit Ratio (%)	28.26	26.71
		Net Profit Ratio (%)	18.57	17.37
		Return On Equity (%)	11.75	11.38
FINANCES: (Consolidated in million yen)
		Terms Ending:	31/03/2007	31/03/2006
INCOME STATEMENT
	Annual Sales		339,689	307,827
	Cost of Sales		173,007	163,149
	GROSS PROFIT		166,681	144,677
	Selling & Adm Costs		77,717	69,153
	OPERATING PROFIT		88,964	75,524
	Non-Operating P/L		7,023	6,706
	RECURRING PROFIT		95,987	82,230
	NET PROFIT		63,073	53,458
BALANCE SHEET
	Cash		176,597	146,312
	Receivables		90,387	82,774
	Inventory		133,857	112,110
	Securities, Marketable		7,790	6,864
	Other Current Assets		16,820	15,022
	TOTAL CURRENT ASSETS		425,451	363,082
	Property & Equipment		99,730	91,961
	Intangibles		7,082	6,397
	Investments, Other Fixed Assets		155,567	151,948
	TOTAL ASSETS		687,830	613,388
	Payables		53,820	49,005
	Short-Term Bank Loans		2,989	4,520
	Other Current Liabs		50,065	45,588
	TOTAL CURRENT LIABS		106,874	99,113
	Debentures		5,525	5,645
	Long-Term Bank Loans		7,235	5,850
	Reserve for Retirement Allw		23,408	23,436
	Other Debts		7,871	7,492
	TOTAL LIABILITIES		150,913	141,536
	MINORITY INTERESTS			2,094
	Common stock		61,005	61,005
	Additional paid-in capital		72,678	72,576
	Retained earnings		367,543	311,640
	Evaluation p/l on investments/securities		11,629	15,138
	Others		24,316	9,687
	Treasury stock, at cost		(254)	(288)
	TOTAL S/HOLDERS` EQUITY		536,917	469,758
	TOTAL EQUITIES		687,830	613,388
CONSOLIDATED CASH FLOWS
		Terms ending:	31/03/2007	31/03/2006
	Cash Flows from Operating Activities		56,435	59,121
	Cash Flows from Investment Activities		-28,842	-34,605
	Cash Flows from Financing Activities		-7,926	-9,261
	Cash, Bank Deposits at the Term End		144,714	121,708
ANALYTICAL RATIOS Terms ending:			31/03/2007	31/03/2006
		Net Worth (S/Holders' Equity)	536,917	469,758
		Current Ratio (%)	398.09	366.33
		Net Worth Ratio (%)	78.06	76.58
		Recurring Profit Ratio (%)	28.26	26.71
		Net Profit Ratio (%)	18.57	17.37
		Return On Equity (%)	11.75	11.38
FINANCES: (Consolidated in million yen)
		Terms Ending:	31/03/2007	31/03/2006
INCOME STATEMENT
	Annual Sales		339,689	307,827
	Cost of Sales		173,007	163,149
	GROSS PROFIT		166,681	144,677
	Selling & Adm Costs		77,717	69,153
	OPERATING PROFIT		88,964	75,524
	Non-Operating P/L		7,023	6,706
	RECURRING PROFIT		95,987	82,230
	NET PROFIT		63,073	53,458
BALANCE SHEET
	Cash		176,597	146,312
	Receivables		90,387	82,774
	Inventory		133,857	112,110
	Securities, Marketable		7,790	6,864
	Other Current Assets		16,820	15,022
	TOTAL CURRENT ASSETS		425,451	363,082
	Property & Equipment		99,730	91,961
	Intangibles		7,082	6,397
	Investments, Other Fixed Assets		155,567	151,948
	TOTAL ASSETS		687,830	613,388
	Payables		53,820	49,005
	Short-Term Bank Loans		2,989	4,520
	Other Current Liabs		50,065	45,588
	TOTAL CURRENT LIABS		106,874	99,113
	Debentures		5,525	5,645
	Long-Term Bank Loans		7,235	5,850
	Reserve for Retirement Allw		23,408	23,436
	Other Debts		7,871	7,492
	TOTAL LIABILITIES		150,913	141,536
	MINORITY INTERESTS			2,094
	Common stock		61,005	61,005
	Additional paid-in capital		72,678	72,576
	Retained earnings		367,543	311,640
	Evaluation p/l on investments/securities		11,629	15,138
	Others		24,316	9,687
	Treasury stock, at cost		(254)	(288)
	TOTAL S/HOLDERS` EQUITY		536,917	469,758
	TOTAL EQUITIES		687,830	613,388
CONSOLIDATED CASH FLOWS
		Terms ending:	31/03/2007	31/03/2006
	Cash Flows from Operating Activities		56,435	59,121
	Cash Flows from Investment Activities		-28,842	-34,605
	Cash Flows from Financing Activities		-7,926	-9,261
	Cash, Bank Deposits at the Term End		144,714	121,708
ANALYTICAL RATIOS Terms ending:			31/03/2007	31/03/2006
		Net Worth (S/Holders' Equity)	536,917	469,758
		Current Ratio (%)	398.09	366.33
		Net Worth Ratio (%)	78.06	76.58
		Recurring Profit Ratio (%)	28.26	26.71
		Net Profit Ratio (%)	18.57	17.37
		Return On Equity (%)	11.75	11.38
FINANCES: (Consolidated in million yen)
		Terms Ending:	31/03/2007	31/03/2006
INCOME STATEMENT
	Annual Sales		339,689	307,827
	Cost of Sales		173,007	163,149
	GROSS PROFIT		166,681	144,677
	Selling & Adm Costs		77,717	69,153
	OPERATING PROFIT		88,964	75,524
	Non-Operating P/L		7,023	6,706
	RECURRING PROFIT		95,987	82,230
	NET PROFIT		63,073	53,458
BALANCE SHEET
	Cash		176,597	146,312
	Receivables		90,387	82,774
	Inventory		133,857	112,110
	Securities, Marketable		7,790	6,864
	Other Current Assets		16,820	15,022
	TOTAL CURRENT ASSETS		425,451	363,082
	Property & Equipment		99,730	91,961
	Intangibles		7,082	6,397
	Investments, Other Fixed Assets		155,567	151,948
	TOTAL ASSETS		687,830	613,388
	Payables		53,820	49,005
	Short-Term Bank Loans		2,989	4,520
	Other Current Liabs		50,065	45,588
	TOTAL CURRENT LIABS		106,874	99,113
	Debentures		5,525	5,645
	Long-Term Bank Loans		7,235	5,850
	Reserve for Retirement Allw		23,408	23,436
	Other Debts		7,871	7,492
	TOTAL LIABILITIES		150,913	141,536
	MINORITY INTERESTS			2,094
	Common stock		61,005	61,005
	Additional paid-in capital		72,678	72,576
	Retained earnings		367,543	311,640
	Evaluation p/l on investments/securities		11,629	15,138
	Others		24,316	9,687
	Treasury stock, at cost		(254)	(288)
	TOTAL S/HOLDERS` EQUITY		536,917	469,758
	TOTAL EQUITIES		687,830	613,388
CONSOLIDATED CASH FLOWS
		Terms ending:	31/03/2007	31/03/2006
	Cash Flows from Operating Activities		56,435	59,121
	Cash Flows from Investment Activities		-28,842	-34,605
	Cash Flows from Financing Activities		-7,926	-9,261
	Cash, Bank Deposits at the Term End		144,714	121,708
ANALYTICAL RATIOS Terms ending:			31/03/2007	31/03/2006
		Net Worth (S/Holders' Equity)	536,917	469,758
		Current Ratio (%)	398.09	366.33
		Net Worth Ratio (%)	78.06	76.58
		Recurring Profit Ratio (%)	28.26	26.71
		Net Profit Ratio (%)	18.57	17.37
		Return On Equity (%)	11.75	11.38

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	Unfavourable & favourable factors carry similar weight in credit consideration. 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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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