MIRA INFORM REPORT

Report Date :

07.12.2012

IDENTIFICATION DETAILS

Name :	MURATA MACHINERY LTD
Registered Office :	136 Takeda-Mukaishirocho Fushimiku Kyoto 612-8686
Country :	Japan
Financials (as on) :	31.03.2012
Date of Incorporation :	December 1938
Com. Reg. No.:	1300-01-000054 (Kyoto-Minamiku)
Legal Form :	Limited Company
Line of Business :	Manufacturer of textile machinery, communication equipment, machine tools, automated systems, clean systems
No. of Employees :	1,990

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

Status :	Satisfactory
Payment Behaviour :	No Complaints
Litigation :	--

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 – June 30^th, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
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 a technologically 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. Japan's industrial sector is heavily dependent on imported raw materials and fuels. A tiny agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. Usually self-sufficient in rice, Japan imports about 60% of its food on a caloric basis. Japan maintains one of the world's largest fishing fleets and accounts for nearly 15% of the global catch. For three decades, overall real economic growth had been spectacular - 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 after effects 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. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2011 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 2011. A sharp downturn in business investment and global demand for Japan's exports in late 2008 pushed Japan further into recession. 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 in March disrupted manufacturing. Electricity supplies remain tight because Japan has temporarily shut down almost all of its nuclear power plants after the Fukushima Daiichi nuclear reactors were crippled by the earthquake and resulting tsunami. Estimates of the direct costs of the damage - rebuilding homes, factories, and infrastructure - range from $235 billion to $310 billion, and GDP declined almost 0.5% in 2011. Prime Minister Yoshihiko NODA has proposed opening the agricultural and services sectors to greater foreign competition and boosting exports through membership in the US-led Trans-Pacific Partnership trade talks and by pursuing free-trade agreements with the EU and others, but debate continues on restructuring the economy and reining in Japan's huge government debt, which exceeds 200% of GDP. Persistent deflation, reliance on exports to drive growth, and an aging and shrinking population are other major long-term challenges for the economy

Source : CIA

Company name and address

MURATA MACHINERY LTD

REGD NAME: Murata Kikai KK

MAIN OFFICE: 136 Takeda-Mukaishirocho Fushimiku Kyoto 612-8686 JAPAN

Tel: 075-672-8130 Fax: 075-672-8691

Osaka Branch Office (Logistic & Automation Div)

Osaka Green Bldg 7F No. 2-6-26 Kitahama, Chuo-Ku Osaka 541004

*Inuyama Factory at: Machine Tools division 2 Nakjima Hashizume Inyama City 4848502, Japan

URL: http://www.muratec.net.jp/

E-Mail address: (thru the URL)

ACTIVITIES

Mfg of textile machinery, communication equipment, machine tools, automated systems, clean systems

BRANCHES

Tokyo, Osaka, Nagoya, Yokohama, Fukuoka

FACTORIES

Inuyama, Kaga, Ryuoh, Oita, Ise, Gifu

OVERSEAS

China (6), Hong Kong, Korea (2), Thailand, Vietnam, Indonesia, India (3),

Bangladesh, Pakistan, Europe/Mid East (4), N/S Americas (2) (--subsidiaries)

OFFICERS

Jun’ichi Murata, ch DAISUKE MURATA, PRES

Yosuke Murata, v pres Toshihiro Okada, mgn dir

Akira Maeda, mgn dir Yasuo Uozumi, mgn dir

Yen Amount: In million Yen, unless otherwise stated

SUMMARY

FINANCES FAIR A/SALES Yen 134,291 M

PAYMENTS NO COMPLAINTS CAPITAL Yen 900 M

TREND STEADY WORTH Yen 103,617 M

STARTED 1938 EMPLOYES 1,990

COMMENT

MFR SPECIALIZING IN TEXTILE MACHINERY AND OTHER INDUSTRIAL MACHINERY.

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS

HIGHLIGHTS

The subject company was established by a certain Murata for mfg textile machinery and has been succeeded by his descendants. The firm has since diversified operations into communications equipment, logistics & automated systems, machine tools, etc, in addition to textile machinery, which still remains as the main pillar. Focusing on FA/OA equipment & systems, and communications/networking equipment. In 2009, acquired Assist Technologies Japan, mfr of automated semiconductor making machinery. Aggressively advancing into overseas markets, with exports accounting for 65% of total sales.

FINANCIAL INFORMATION

The sales volume for Mar/2012 fiscal term amounted to Yen 134,291 million, a 9% up from Yen 123,411 million in the previous term. Demand rose sharply, particularly for textile machinery in China and other S/E Asian countries. The sales growth offset the loss from the high Yen. The recurring profit was posted at Yen 3,256 million and the net profit at Yen 359 million, respectively, compared with Yen 4,917 million recurring profit and Yen 3,847 million net profit, respectively, a year ago.

For the current term ending Mar 2013 the recurring profit is projected at Yen 3,300 million and the net profit at Yen 360 million, respectively, on a 3% rise in turnover, to Yen 138,000 million. Business is seen expanding steadily.

The financial situation is considered FAIR and good for ORDINARY business engagements.

REGISTRATION

Date Registered: Dec 1938

Regd No.: 1300-01-000054 (Kyoto-Minamiku)

Legal Status: Limited Company (Kabushiki Kaisha)

Authorized: 18 million shares

Issued: 13,820,000 shares

Sum: Yen 900 million

Major shareholders (%): Murata KK*(39.3), Murata Kosan KK*(15.2), Jun’ichi Murata (13.9), Daisuke Murata (4.9), Yosuke Murata (4.0)

* Group subsidiaries

No. of shareholders: 20

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

OPERATION

Activities: Manufactures:

Textile Machinery (37%): spinning frames, auto winders, electric dobbins;

Communication Equipment (10%): digital multifunctional products, laser & thermal Fax machines;

Logistics & Automation Equipment Systems (36%): systems for medical supplies,

apparel, beverages, foodstuffs, sporting, data management, others;

Machine Tools (16%): tuning machines, sheet metal fabricating machines, lathes;

Hydraulic riveting machines, magnetic induction sensors, others (--1%).

Export (65%).

Clients: [Mfrs, wholesalers] Itochu Systech Corp, Toyota Tsusho Corp, Asahi Breweries, Nippon Paint, Marubeni Techmatecs, Taisei Corp, Toppan Printing, Oki Electric Ind, Yamato Transport Co, Hitachi Zosen Corp, other.

No. of accounts: 1,000

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Fanuc Ltd, Konica Minolta Business Solutions, Fuji Xerox, Tokai EC, SMC, Uster Technologies, Takebishi Corp, NEC Fielding, Okura Yu soki Co, other.

Payment record: No Complaints

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

Bank References:

Mizuho Bank (Kyoto-Chuo)

SMBC (Kyoto)

Relations: Satisfactory

FINANCES

(In Million Yen)

Terms Ending:		31/03/2013	31/03/2012	31/03/2011	31/03/2010
Annual Sales		138,000	134,291	123,411	84,938
Recur. Profit		3,300	3,256	4,917	-189
Net Profit		360	359	3,847	-845
Total Assets			218,229	207,039	179,080
Current Assets			153,599	142,636	121,383
Current Liabs			114,612	104,033	67,013
Net Worth			103,617	103,006	100,892
Capital, Paid-Up			900	900	900
Div.P.Share(¥)			10.00	10.00	0.00
<Analytical Data>		(%)	(%)	(%)	(%)
S.Growth Rate		2.76	8.82	45.30	-30.31
Current Ratio		..	134.02	137.11	181.13
N.Worth Ratio		..	47.48	49.75	56.34
R.Profit/Sales		2.39	2.42	3.98	-0.22
N.Profit/Sales		0.26	0.27	3.12	-0.99
Return On Equity		..	0.35	3.73	-0.84

Notes: Forecast figures for the 31/03/2013fiscal term.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.47
UK Pound	1	Rs.87.63
Euro	1	Rs.71.12

INFORMATION DETAILS

Report Prepared by :

MNL

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%)

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.