MIRA INFORM REPORT

Report Date :

07.08.2014

IDENTIFICATION DETAILS

Name :	KOYO MACHINE INDUSTRIES CO LTD
Registered Office :	2-34 Minami-Uematsucho Yao City Osaka-Pref 581-0091
Country :	Japan
Financials (as on) :	31.03.2014
Date of Incorporation :	August 1961
Com. Reg. No.:	1220-01-018494
Legal Form :	Limited Company
Line of Business :	Manufacturer of machine tools, FA systems, precision apparatus, other
No of Employees :	921

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 :	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 01, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
Japan	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderate Low Risk	B1
Moderate Risk	B2
Moderate High Risk	C1
High Risk	C2
Very High Risk	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 small agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. While self-sufficient in rice production, Japan imports about 60% of its food on a caloric basis. 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. Modest economic growth continued after 2000, but the economy has fallen into recession three times since 2008. A sharp downturn in business investment and global demand for Japan's exports in late 2008 pushed Japan 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 and the ensuing tsunami in March disrupted manufacturing. The economy has largely recovered in the two years since the disaster, but reconstruction in the Tohoku region has been uneven. Prime Minister Shinzo ABE has declared the economy his government's top priority; he has overturned his predecessor's plan to permanently close nuclear power plants and is pursuing an economic revitalization agenda of fiscal stimulus, monetary easing, and structural reform. Japan joined the Trans Pacific Partnership negotiations in 2013, a pact that would open Japan's economy to increased foreign competition and create new export opportunities for Japanese businesses. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2013 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 2012. The new government will continue a longstanding debate on restructuring the economy and reining in Japan's huge government debt, which is exceeding 230% of GDP. To help raise government revenue and reduce public debt, Japan decided in 2013 to gradually increase the consumption tax to a total of 10% by the year 2015. Japan is making progress on ending deflation due to a weaker yen and higher energy costs, but reliance on exports to drive growth and an aging, shrinking population pose other major long-term challenges for the economy.

Source : CIA

COMPANY NAME:

KOYO MACHINE INDUSTRIES CO LTD

REGD NAME:

Koyo Kikai Kogyo KK

MAIN OFFICE:

2-34 Minami-Uematsucho Yao City Osaka-Pref 581-0091 JAPAN

Tel: 072-922-7881 Fax: 072-924-1318

URL: http://www.koyo-machine.co.jp

E-Mail address: (thru the URL)

ACTIVITIES:

Mfg of machine tools, FA systems, precision apparatus, other

BRANCHES:

Tokyo, Nagoya

OVERSEAS:

China, Thailand, USA, Korea (--mfg operations)

FACTORIES:

At the caption address, Nara (2); four overseas mfg plants

OFFICERS:

RYUICHI KAKUI, PRES Motoyasu Nakamura, v pres

Naoki Miyabe, s/mgn dir Takefumi Rokuyama, s/mgn dir

Kazuo Hashimoto, mgn dir Kin’ichi Hara, dir

Yen Amount: In million Yen, unless otherwise stated

SUMMARY:

FINANCES FAIR A/SALES Yen 39,046 M

PAYMENTSNO COMPLAINTS CAPITAL Yen 1,100 M

TREND SLOW WORTH Yen 14,660 M

STARTED 1961 EMPLOYES 921

COMMENT:

MFR OF MACHINE TOOLS, OTHER.

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

HIGHLIGHTS:

The subject company was established on the basis of a division separated from Koyo Seiko Co Ltd (now JTECT Corp) (See REGISTRATION). This is a specialized mfr of machine tools, FA systems, precision apparatus, other (See OPERATION). Has overseas factory by licensing out of mfg: China (3), Thailand, USA and Korea. Clients include major carmakers, heavy machinery mfrs, other, nationwide.

FINANCIAL INFORMATION:

The sales volume for Mar/2014 fiscal term amounted to Yen 39,046 million, a 12% down from Yen 44,526 million in the previous term. Orders for machine tools were substantially decreased. The recurring profit was posted at Yen 2,713 million and the net profit at Yen 1,559 million, respectively, compared with Yen 4,021 million recurring profit and Yen 2,521 million net profit, respectively, a year ago.

For the current term ending Mar 20154 the recurring profit is projected at Yen 2,800 million and the net profit at Yen 1,600 million, respectively, on a 4% rise in turnover, to Yen 40,500 million.

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

REGISTRATION:

Date Registered: Aug 1961

Regd No.: 1220-01-018494 (Osaka-Yao)

Legal Status: Limited Company (Kabushiki Kaisha)

Authorized: 5.6 million shares

Issued: 1.4 million shares

Sum: Yen 1,100 million

Major shareholders (%): JTEKT Corp* (99), Koyo Sales Co (1)

No. of shareholders: 2

*.. JTEKT Corp, leading bearing mfr, Nagoya, founded 1935, listed Tokyo S/E, capital Yen 45,591 million, sales Yen 1,260,192 million, operating profit Yen58,207 million, recurring profit Yen 58,207 million, recurring profit Yen 61,856 million, net profit Yen 23,384 million, total assets Yen 1,066,469 million, net worth Yen 395,834 million, employees 43,456, pres Tetsuo Agata

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

OPERATION:

Activities: Manufactures machine tools (42%), FA systems (47%), precision apparatus, others (--11%)

(Mfg Items):

Machine Tools: centerless grinding machine, surface grinding machine, multi-head grinding machine, special purpose grinding machine;

FA Systems: automatic measuring systems, automatic assembly systems, combined systems;

Precision Apparatus: precision ball screws, indexing chucks, spindle units, other

Clients: [Mfrs, wholesalers] JTEKT Corp (62%), Toyota Motor, Nissan Motor, Mitsubishi Heavy Ind, Daihatsu Ind, KJT, Suzuki Motors, Hino Motors Ltd, Denso Corp, other

No. of accounts: 500

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] JTEKT Corp, KJT, Matsuda Seiko, Koki Techno, Tachibana Eletech, other

Payment record: No Complaints

Location: Business area in Yao, Osaka-Pref. Office premises at the caption address are owned and maintained satisfactory.

Bank References:

Resona Bank (Osaka)

MUFG (Osaka)

Relations: Satisfactory

FINANCES (In Million Yen)

Terms Ending:		31/03/2015	31/03/2014	31/03/2013	31/03/2012
Annual Sales		40,500	39,046	44,528	41,236
Recur. Profit		2,800	2,713	4,021	3,876
Net Profit		1,600	1,559	2,521	1,296
Total Assets			33,058	37,116	35,529
Current Assets			19,964	23,336
Current Liabs			13,083	17,521
Net Worth			14,660	13,882	11,752
Capital, Paid-Up			1,100	1,100	1,100
Div.Ttl in Million (¥)			665	882	36
<Analytical Data>		(%)	(%)	(%)	(%)
S.Growth Rate		3.72	-12.31	7.98	26.82
Current Ratio		..	152.59	133.19	..
N.Worth Ratio		..	44.35	37.40	33.08
R.Profit/Sales		6.91	6.95	9.03	9.40
N.Profit/Sales		3.95	3.99	5.66	3.14
Return On Equity		..	10.63	18.16	11.03

Notes: Forecast (or estimated) figures for the 31/03/2015 fiscal term.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 61.33
UK Pound	1	Rs. 103.43
Euro	1	Rs. 81.96

INFORMATION DETAILS

Analysis Done by :	DIV
Report Prepared by :	DPT

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.