MIRA INFORM REPORT

Report Date :

14.03.2012

IDENTIFICATION DETAILS

Name :	KAWASHIMA SELKON TEXTILE CO LTD
Registered Office :	265 Shizuichi-Ichiharacho Sakyoku Kyoto 601-1123
Country :	Japan
Financials (as on) :	31.03.2011
Date of Incorporation :	May 1938
Com. Reg. No.:	(Kyoto-Sakyoku) 000056
Legal Form :	Limited Company
Line of Business :	Manufacturer of kimonos, car/train/airplane interiors
No. of Employees :	1,063

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	Yen 709.0 Million
Status :	Moderate
Payment Behaviour :	Regular
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 – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
Japan	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

Company name and address

KAWASHIMA SELKON TEXTILE CO Ltd

REGD NAME: Kawashima Orimono KK

MAIN OFFICE: 265 Shizuichi-Ichiharacho Sakyoku Kyoto 601-1123 JAPAN

Tel: 075-741-411 Fax: 075-741-4309

*.. The is its Tokyo Headquarters-(International Division)

URL: http://www.kawashimaselkon.co.jp

E-Mail address: (thru the URL)

ACTIVITIES

Mfr of kimonos, car/train/airplane interiors

BRANCHES

Tokyo, Osaka, Nagoya, Fukuoka, Sapporo, Sendai, Yokohama, other (Tot 24)

FACTORIES

At the caption address

OFFICERS

MASAO NAKANISHI, PRES Takaaki Ishida, s/mgn dir

Shinzo Okuno, dir Hitoshi Mori, dir

Akira Mitsuoka, dir Tadamasa Kondo, dir

Yen Amount: In million Yen, unless otherwise stated

SUMMARY

FINANCES FAIR 　A/SALES Yen 40,841 M

PAYMENTS REGULAR 　CAPITAL Yen 6,913 M

TREND SLOW 　WORTH Yen 8,218 M

STARTED 1938 　EMPLOYES 1,063

COMMENT

MFR OF KIMONO, VEHICLES INTERIOR GOODS

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

MAX CREDIT LIMIT: YEN 709.0 MILLION, 30 DAYS NORMAL TERMS

Forecast figures for the 31/03/2012 fiscal term.

HIGHLIGHTS

This is a long-established “Nishijin” (brand-name of kimono textiles) fabrics mfr founded as kimono store in1843 in Edo period. Excels in high-quality products, such as traditional Japanese “obi” and art fabrics. Top-ranked maker of “obi”. Merged with Selkon Co, mfr of interiors for automobiles, trains and air planes, and advanced into this area. The company plans to reinforce sales of own-brand environment-friendly curtains. The kimono sales subsidiary will pull out from unprofitable stores, including in department stores. In July 2010, transferred part of interior products for vehicles, such as autos, trains and airplanes, to a subsidiary equity-method firm, TB Kawashima KK, jointly founded with Toyota Tsusho Corp and Toyota Boshoku Corp. In Aug 2011, the firm went into business tie-up with JS Group Corp (See REGISTRATION) and became its consolidated subsidiary, and delisted from the Tokyo S/E.

FINANCIAL INFORMATION

The sales volume for Mar/2011 fiscal term amounted to Yen 40,841 million, a 27.5% down from Yen 56,336 million in the previous term. This is largely referred to the said transfer of vehicle interior operations to another firm and excluded from the consolidated sales. The operations continued in the red to register Yen 149 million recurring loss and Yen 1,372 million net losses, respectively, compared with Yen 1,307 million recurring loss and Yen 1,454 million net losses, respectively, a year ago.　

(Apr/Sept/2011 results): Sales Yen 16,052 million (down 27.9%), recurring loss Yen 598 million (previously Yen 421 million loss), net loss Yen 648 million (previously Yen 1,496 million loss). (% & figures compared with the corresponding period a year ago.) The decrease is referred to the said of transfer of vehicle interior operations and aftermath impact of the Great North Japan Earthquake that occurred on 11/03/2011. Housing investment is showing signs of recovery but hovered at a low level. Business environment was tough with significant negative impacts to the supply chain from the Great East Japan Earthquake and the Thai Flood.

For the current term ending Mar 2012 the recurring profit is projected at Yen 100 million and the net profit at Yen 100 million, on a 16.0% fall in turnover, to Yen 34,300 million.

The financial situation is considered FAIR and good for ORDINARY business engagements. Max credit limit is estimated at Yen 709.0 million, on 30 days normal terms.

REGISTRATION

Date Registered:　May 1938

Regd No.: (Kyoto-Sakyoku) 000056

Legal Status: Limited Company (Kabushiki Kaisha

Authorized: 176,167,000 shares

Issued: 93,903,222 shares

Sum: Yen 9,381 million

Major shareholders (%): JS Group Corp* (47), Kawashima Selkon Kyoeikai Assn (6), SMBC (4), Hayashi Telemp (3), Employees’ S/Holding Assn (3)

No. of shareholders: 7,244

*.. JS Group Corp, largest mfr of housing facilities and comprehensive maker of building

Materials, Tokyo, founded 1949, listed Tokyo S/E, capital Yen 68,121 million, sales Yen 1,214,939 million, operating profit Yen 40,409 million, recurring profit Yen 39,180 million, net profit Yen 15,779 million, total assets Yen 1,166,834 million, net worth Yen 536,408 million, employees 42,162, pres Yoichiro Ushioda

Consolidated Financials are attached (See SUPPLEMENTS)

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

Related companies: Kawashima Selkon Sewing, Kashia Selkon Butsuryu, other.

OPERATION

Activities: Manufactures: kimono & artistic fabrics (6%), interior fabrics (curtains, carpets, drapers, walling, other) (60%), interiors for automobiles, trains and airplanes (32%), others (1%).

Clients: [Mfrs, wholesalers] Honda Motor, Leo Palace 21, Johnson Controls Automotive Systems, Takashimaya, Daimaru Matsuzakaya Department Store, Sogo Seibu Department Store, Moriden Co, Hayashi Telempu Co, Seiwa Corp, other

No. of accounts: 1,000

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Chori Co, NI Teijin Shoji, Tachikawa Co, Kawashima Textile Shanghai, Bridgestone Corp, Kawashima Selkon Sewing Co, Toso Co, Nichibei Co, Tajima Inc, Yamamoto Sangyo Co, other

Payment record: Regular

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

Bank References:

SMBC (Kyoto)

MUFG (Kyoto-Chuo)

Relations: Satisfactory

FINANCES

(In Million Yen)

FINANCES: (Consolidated in million yen)
			Terms Ending:		31/03/2011	31/03/2010
INCOME STATEMENT
	Annual Sales				40,841	56,336
	Cost of Sales				29,847	44,479
	GROSS PROFIT				10,994	11,856
	Selling & Adm Costs				10,560	12,857
	OPERATING PROFIT				433	-1,000
	Non-Operating P/L				-284	-307
	RECURRING PROFIT				-149	-1,307
	NET PROFIT				-1,372	-1,454
BALANCE SHEET
	Cash				969	2,389
	Receivables				7,131	11,960
	Inventory				4,129	6,223
	Securities, Marketable
	Other Current Assets				875	1,653
	TOTAL CURRENT ASSETS				13,104	22,225
	Property & Equipment				10,832	15,195
	Intangibles				1,139	1,424
	Investments, Other Fixed Assets				3,754	3,193
	TOTAL ASSETS				28,829	42,037
	Payables				7,435	13,422
	Short-Term Bank Loans				4,585	8,377
	Other Current Liabs				6,763	4,758
	TOTAL CURRENT LIABS				18,783	26,557
	Debentures					400
	Long-Term Bank Loans				22	1,671
	Reserve for Retirement Allw				1,553	2,144
	Other Debts				252	4,088
	TOTAL LIABILITIES				20,610	34,860
	MINORITY INTERESTS
	Common stock				9,381	8,277
	Additional paid-in capital				3,329	2,254
	Retained earnings				(6,707)	(5,094)
	Evaluation p/l on investments/securities				109	110
	Others				2,107	1,676
	Treasury stock, at cost				(1)	(47)
	TOTAL S/HOLDERS` EQUITY				8,218	7,176
	TOTAL EQUITIES				28,828	42,036
CONSOLIDATED CASH FLOWS
				Terms ending:	31/03/2011	31/03/2010
	Cash Flows from Operating Activities				575	-1,225
	Cash Flows from Investment Activities				155	631
	Cash Flows from Financing Activities				-2,072	781
	Cash, Bank Deposits at the Term End				969	2,302
ANALYTICAL RATIOS Terms ending:					31/03/2011	31/03/2010
		Net Worth (S/Holders' Equity)			8,218	7,176
		Current Ratio (%)			69.77	83.69
		Net Worth Ratio (%)			28.51	17.07
		Recurring Profit Ratio (%)			-0.36	-2.32
		Net Profit Ratio (%)			-3.36	-2.58
		Return On Equity (%)			-16.70	-20.26

SUPPLEMENTS

CONSOLIDATED FINANCIALS OF JS GROUP CORP

FINANCES: (Consolidated in million yen)
			Terms Ending:		31/03/2011	31/03/2010
INCOME STATEMENT
	Annual Sales				1,214,939	982,606
	Cost of Sales				834,277	683,572
	GROSS PROFIT				380,661	299,034
	Selling & Adm Costs				340,251	273,050
	OPERATING PROFIT				40,409	25,983
	Non-Operating P/L				-1,249	1,874
	RECURRING PROFIT				39,160	27,857
	NET PROFIT				15,779	-5,331
BALANCE SHEET
	Cash				97,029	98,504
	Receivables				283,134	218,299
	Inventory				139,799	113,254
	Securities, Marketable				4,522	20,987
	Other Current Assets				85,409	70,936
	TOTAL CURRENT ASSETS				609,893	521,980
	Property & Equipment				421,943	391,880
	Intangibles				23,742	17,841
	Investments, Other Fixed Assets				111,256	101,802
	TOTAL ASSETS				1,166,834	1,033,503
	Payables				162,810	121,603
	Short-Term Bank Loans				61,396	47,319
	Other Current Liabs				155,195	124,247
	TOTAL CURRENT LIABS				379,401	293,169
	Debentures				50,140	50,280
	Long-Term Bank Loans				116,995	120,876
	Reserve for Retirement Allw				30,815	11,001
	Other Debts				53,074	41,855
	TOTAL LIABILITIES				630,425	517,181
	MINORITY INTERESTS
	Common stock				68,121	68,121
	Additional paid-in capital				160,179	259,702
	Retained earnings				260,154	256,403
	Evaluation p/l on investments/securities				1,953	2,659
	Others				98,883	(6,798)
	Treasury stock, at cost				(52,882)	(63,766)
	TOTAL S/HOLDERS` EQUITY				536,408	516,321
	TOTAL EQUITIES				1,166,834	1,033,503
CONSOLIDATED CASH FLOWS
				Terms ending:	31/03/2011	31/03/2010
	Cash Flows from Operating Activities				48,680	68,073
	Cash Flows from Investment Activities				-13,542	-27,334
	Cash Flows from Financing Activities				-41,686	-27,825
	Cash, Bank Deposits at the Term End				92,329	89,302
ANALYTICAL RATIOS Terms ending:					31/03/2011	31/03/2010
		Net Worth (S/Holders' Equity)			536,408	516,321
		Current Ratio (%)			160.75	178.05
		Net Worth Ratio (%)			45.97	49.96
		Recurring Profit Ratio (%)			3.22	2.84
		Net Profit Ratio (%)			1.30	-0.54
		Return On Equity (%)			2.94	-1.03

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.49.84
UK Pound	1	Rs.77.97
Euro	1	Rs.65.61

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.