MIRA INFORM REPORT

Report Date :

25.08.2014

IDENTIFICATION DETAILS

Name :	SODICK CO LTD
Registered Office :	3-12-1 Nakamachidai Tsuzukiku Yokohama 224-8522
Country :	Japan
Financials (as on) :	31.03.2014
Date of Incorporation :	August 1976
Com. Reg. No.:	0200-01-020736
Legal Form :	Limited Company
Line of Business :	Manufactures NC Machine Tools (72%), Industrial Machinery (15%), Food Machinery (6%), Others (7%)
No of Employees :	2,999

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 & address

SODICK CO LTD

REGD NAME

Sodick KK

MAIN OFFICE

3-12-1 Nakamachidai Tsuzukiku Yokohama 224-8522 Japan

Tel: 045-942-3111

Fax: 045-943-5835

*.. The given corporate name is its subsidiary in India

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

E-Mail address: (thru the URL)

ACTIVITIES: Mfg of NC electro dischargers

BRANCHES: Sendai, Saitama, Nagoya, Osaka, Kyoto, Osaka, other (Tot 14)

OVERSEAS: China (3), Singapore, Korea, India (as given), Vietnam, UK, Germany, USA,

Hong Kong (--subsidiaries)

FACTORIES: Fukui, Ishikawa, Kaga; China (4), Thailand

CHIEF EXEC: YUJI KANEKO, PRES

Yen Amount: In million Yen, unless otherwise stated

SUMMARY

FINANCES FAIR A/SALES Yen 56,899 M

PAYMENTSNO COMPLAINTS CAPITAL Yen 20,775 M

TREND UP WORTH Yen 42,451 M

STARTED 1976 EMPLOYES 2,999

COMMENT: MFR OF NC MACHINE TOOLS. FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

Unit: In Million Yen

Forecast (or estimated) figures for 30/03/2015 fiscal term

HIGHLIGHTS

The subject company is pioneer & top-ranked mfr of NC electro dischargers. Ranked second in the world. Maintains strong market share in linear motor-driven type lector dischargers. Has mfg bases in China (4) and Thailand. Transferred the function at Yokohama office to the headquarter plant office in Fukui-Pref, except for the financial section. The firm intends to shift to its production to overseas, to reduce exchange risks. It will market linear motors manufactured in-house for internal use to outside firms. It made Sodick Plustech its wholly owned subsidiary through TOB. Advanced into LED lighting and food machinery. Fostering noodle-making machines.

FINANCIAL INFORMATION

The sales volume for Mar/2014 fiscal term amounted to Yen 56,899 million, a 3.4% up from Yen 55,031 million in the previous term. Orders for mainstay electro dischargers increased in China. The recurring profit was posted at Yen 3,886 million and the net profit at Yen 4,194 million, respectively, compared with Yen 5,356 million recurring profit and Yen 4,191 million net profit, respectively, a year ago.

(Apr/Jun/2014 results): Sales Yen 12,093 million (down 9.5%), operating profit Yen 530 million (down 19.7%, recurring profit Yen 223 million (down 82.2%), net profit Yen 168 million (down 85.2%). (% compared with the corresponding period a year ago).

For the current term ending Mar 2015 the recurring profit is projected at Yen 3,500 million and the net profit at Yen 2,600 million, respectively, on an 8.1% rise in turnover, to Yen 61,500 million. Sales of electro dischargers will grow in Asia.

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

REGISTRATION

Date Registered:　 Aug 1976

Regd No.: 0200-01-020736 (Yokohama-Tsuzukiku)

Legal Status: Limited Company (Kabushiki Kaisha)

Authorized: 150 million shares

Issued: 53,432,150 shares

Sum: Yen 20,775 million

Major shareholders (%): Company’s Treasury Stock (5.8), Chase London SL Omnibus Acct (2.7), Toshihiko Furukawa (2.2), T F Ltd (2.1), Japan Trustee Services T (2.0), Customers’ Kyoeikai Assn (1.9), SMBC (1.5), Masaaki Suzuki (1.3), Hokuriku Bank (1.3), Employees’ S/Holding Assn (1.1); foreign owners (12.4)

No. of shareholders: 13,915

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

Managements: Toshihiko Furukawa, ch; Yuji Kaneko, pres; Kenichi Furukawa, v pres; Keisuke Takagi, s/mgn dir; Takashi Matsui, s/mgn dir; Misao Fujikawa, s/mgn dir; Kenichi Osaka, mgn dir; Sadao Sano, mgn dir; Hirofumi Maejima, mgn dir; Hideki Tsukamoto, dir; Kenichi Tsugami, dir

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

Related companies: Sodick Plastic, Sodick FT, other

OPERATION

Activities: Manufactures NC machine tools (72%), industrial machinery (15%), food machinery (6%), others (7%)

Overseas Sales Ratio (60%)

(Mfg items): CNC die-sinker EDM, CNC wire EDM, CNC high-speed small hole drilling EDM, customized EDM & optional equipment (pallet changers & robots), CNC & power supply devices, precision EDM tooling, high speed precision milling center, nano-level precision machines, computer integrated mfg, high-precision injection molding machines, engineering ceramics, linear motors for machine tool & industrial production machines, electrochemical machines, EDM wires, precision tool and precise molding goods, electronic components, software, food machines, other.

Clients: [Mfrs, wholesalers] Yuasa Trading, Sodick Europe, Kanematsu KGK, Sodick Singapore, Sodick Inc, Yamazen Corp, Sodick Taiwan, Sodick Thailand, other

No. of accounts: 1,000

Domestic areas of activities: Nationwide

Suppliers: [Mfrs, wholesalers] Sodick Thailand, Sodick Engineering, THK, Sodick EMG, Sodick FT, Yasukawa Mechatrec, other.

Payment record: No Complaints

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

Bank References:

SMBC (Yokohama-Ekimae)

Mizuho Bank (Yokohama)

Relations: Satisfactory

FINANCES

(In Million Yen)

FINANCES: (Consolidated in million yen)
		Terms Ending:	31/03/2014	31/03/2013
INCOME STATEMENT
	Annual Sales		56,899	55,031
	Cost of Sales		40,232	38,296
	GROSS PROFIT		16,667	16,734
	Selling & Adm Costs		14,016	12,713
	OPERATING PROFIT		2,651	4,021
	Non-Operating P/L		1,235	1,335
	RECURRING PROFIT		3,886	5,356
	NET PROFIT		4,194	4,191
BALANCE SHEET
	Cash		24,049	25,533
	Receivables		14,968	12,927
	Inventory		21,962	21,375
	Securities, Marketable
	Other Current Assets		3,578	2,853
	TOTAL CURRENT ASSETS		64,557	62,688
	Property & Equipment		24,450	23,458
	Intangibles		4,346	3,583
	Investments, Other Fixed Assets		5,423	5,312
	TOTAL ASSETS		98,776	95,041
	Payables		8,530	8,508
	Short-Term Bank Loans		5,181	5,604
	Other Current Liabs		16,068	16,807
	TOTAL CURRENT LIABS		29,779	30,919
	Debentures		16	30
	Long-Term Bank Loans		24,656	25,840
	Reserve for Retirement Allw		1,003	892
	Other Debts		870	1,326
	TOTAL LIABILITIES		56,324	59,007
	MINORITY INTERESTS
	Common stock		20,775	20,775
	Additional paid-in capital		5,879	5,879
	Retained earnings		13,714	10,435
	Evaluation p/l on investments/securities		658	400
	Others		3,120	239
	Treasury stock, at cost		(1,695)	(1,695)
	TOTAL S/HOLDERS` EQUITY		42,451	36,033
	TOTAL EQUITIES		98,776	95,041
CONSOLIDATED CASH FLOWS
		Terms ending:	31/03/2014	31/03/2013
	Cash Flows from Operating Activities		5,577	2,766
	Cash Flows from Investment Activities		-4,181	-4,776
	Cash Flows from Financing Activities		-3,696	-1,163
	Cash, Bank Deposits at the Term End		23,647	25,514
ANALYTICAL RATIOS Terms ending:			31/03/2014	31/03/2013
		Net Worth (S/Holders' Equity)	42,451	36,033
		Current Ratio (%)	216.79	202.75
		Net Worth Ratio (%)	42.98	37.91
		Recurring Profit Ratio (%)	6.83	9.73
		Net Profit Ratio (%)	7.37	7.62
		Return On Equity (%)	9.88	11.63

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.77
UK Pound	1	Rs.100.72
Euro	1	Rs.80.55

INFORMATION DETAILS

Analysis Done by :	KAR
Report Prepared by :	TPT

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.