MIRA INFORM REPORT

Report Date :

29.09.2012

IDENTIFICATION DETAILS

Name :	GREE INC

Registered Office :	Roppongi Hills Mori Tower, 6-10-1 Roppongi Minatoku Tokyo 106-6112

Country :	Japan

Financials (as on) :	30.06.2012

Date of Incorporation :	December 2004

Com. Reg. No.:	0104-01-055923 (Tokyo-Minatoku)

Legal Form :	Limited Company

Line of Business :	Operation of SNS “GREE”, large-scale communication website

No. of Employees :	1203 employees

RATING & COMMENTS

MIRA’s Rating :

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

Status :	Good
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 – June 30^th, 2012

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

Japan

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

GREE INC

REGD NAME

Gree KK

MAIN OFFICE

Roppongi Hills Mori Tower, 6-10-1 Roppongi Minatoku Tokyo 106-6112 JAPAN

Tel: 03-5770-9500 -

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

E-Mail address: adsales@gree.co.jp

ACTIVITIES

Operation of SNS “GREE”, large-scale communication website

BRANCHES

Osaka

OVERSEAS

Vancouver, San Francisco, London, Amsterdam, Durban, San Paolo, Beijing,Seoul, Singapore

CHIEF EXEC

YOSHIKAZU TANAKA, PRES

Yen Amount: In million Yen, unless otherwise stated

SUMMARY

FINANCES FAIR 　A/SALES Yen 158,231 M

PAYMENTS REGULAR 　CAPITAL Yen 2,172 M

TREND UP 　WORTH Yen 83,985 M

STARTED 2004 　EMPLOYES 1,203

COMMENT

COMMUNICATION WEBSITE OPERATOR

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

Unit: In Million Yen

Forecast figures for the 30/06/2013 fiscal term.

HIGHLIGHTS

This is operator of SNS (Social Networking Service) “GREE”, large-scale communication website mainly for mobile phone users, which recognized as official sites for KDDI au, NTT DoCoMo and Softbank. Rapidly growing on major hits of social networking games featuring various communications among users. Major earnings sources comprised of advertising income and item charges. .

FINANCIAL INFORMATION

The sales volume for Jun/2012 fiscal term amounted to Yen 158,237 million, a 146.6% up from Yen 64,178 million in the previous term. Social networking games fared extremely well, led by “Doliland”. Sales rose, easily offsetting the upsurge in payroll costs. The recurring profit was posted at Yen 81,935 million and the net profit at Yen 47,967 million, respectively, compared with Yen 30,828 million recurring profit and Yen 18,239 million net profit, respectively, a year ago.

For the current term ending Jun 2013 the recurring profit is projected at Yen 74,00 million and the net profit at Yen 46,000 million, on a 23.2% rise in turnover, to Yen 195,000 million. The firm projects to achieve sales of Yen 205,000 million. Business is seen rapidly growing.

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

REGISTRATION

Date Registered:　Dec 2004

Regd No.: 0104-01-055923 (Tokyo-Minatoku)

Legal Status: Limited Company (Kabushiki Kaisha

Authorized: 840 million shares

Issued: 233,820,000

Sum: Yen 2,172 million

Major shareholders (%): Yoshikazu Tanaka (48.3), KDDI Corp (6.8), Master Trust Bank of Japan T (3.6), Japan Trustee Services T (3.3), Kotaro Yamagishi (2.6), State Street Bank & Trust (1.7), Goldman Sachs (Regular) Acct (1.6), Morgan Stanley & Co (1.5), JP Morgan Chase Bank (1.1), Mellon Bank Mellon Omnibus US P (1.0); foreign owners (22.0)

No. of shareholders: 24,930

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

Managements: Yoshikazu Tanaka, pres; Kotaro Yamagishi, v pres, Masaki Fujimoto, s/mgn dir; Noah Aoyagi, s/mgn dir; Toshitake Amemiya, mgn dir; Takeshi Natsuno, dir

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

Related companies: Atlantis, Open Feint, Green International, other.

OPERATION

Activities: Communication website operator of SNS “GREE”: Advertising media income (15%), fee income (85%)

Clients: [Users, communication companies] NTT DoCoMo, KDDI Corp, Softbank Mobile, Web Money Corp, other

No. of accounts: 100

Domestic areas of activities: Nationwide

Suppliers: Communications firms, other

Payment record: Regular

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

Bank References:

SMBC (Hibiya)

Relations: Satisfactory

FINANCES

(In Million Yen)

FINANCES: (Consolidated in million yen)
			Terms Ending:		30/06/2012	30/06/2011
INCOME STATEMENT
	Annual Sales				158,231	64,178
	Cost of Sales				13,099	5,513
	GROSS PROFIT				145,132	58,664
	Selling & Adm Costs				62,403	27,529
	OPERATING PROFIT				82,729	31,135
	Non-Operating P/L				-794	-307
	RECURRING PROFIT				81,935	30,828
	NET PROFIT				47,967	18,239
BALANCE SHEET
	Cash				72,759	22,254
	Receivables				28,238	16,944
	Inventory
	Securities, Marketable
	Other Current Assets				21,290	8,409
	TOTAL CURRENT ASSETS				122,287	47,607
	Property & Equipment				2,541	959
	Intangibles				26,204	10,246
	Investments, Other Fixed Assets				14,265	4,043
	TOTAL ASSETS				165,297	62,855
	Payables				25,988	13,757
	Short-Term Bank Loans				6,048

	Other Current Liabs				36,476	11,445
	TOTAL CURRENT LIABS				68,512	25,202
	Debentures
	Long-Term Bank Loans				11,412
	Reserve for Retirement Allw
	Other Debts				1,387	191
	TOTAL LIABILITIES				81,311	25,393
	MINORITY INTERESTS
	Common stock				2,179	2,135
	Additional paid-in capital				2,177	2,133
	Retained earnings				79,338	33,434
	Evaluation p/l on investments/securities				737	97
	Others				(444)	(335)
	Treasury stock, at cost				(2)	(2)
	TOTAL S/HOLDERS` EQUITY				83,985	37,462
	TOTAL EQUITIES				165,297	62,855
CONSOLIDATED CASH FLOWS
				Terms ending:	30/06/2012	30/06/2011
	Cash Flows from Operating Activities				59,578	15,678
	Cash Flows from Investment Activities				-24,488	-3,272
	Cash Flows from Financing Activities				15,479	-1,090
	Cash, Bank Deposits at the Term End				72,759	22,254
ANALYTICAL RATIOS Terms ending:					30/06/2012	30/06/2011
		Net Worth (S/Holders' Equity)			83,985	37,462
		Current Ratio (%)			178.49	188.90
		Net Worth Ratio (%)			50.81	59.60
		Recurring Profit Ratio (%)			51.78	48.04
		Net Profit Ratio (%)			30.31	28.42
		Return On Equity (%)			57.11	48.69

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.52.70
UK Pound	1	Rs.85.72
Euro	1	Rs.68.15

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.