MIRA INFORM REPORT

Report Date :

29.08.2014

IDENTIFICATION DETAILS

Name :	MURATA MACHINERY LTD
Registered Office :	136 Takeda-Mukaishirocho Fushimiku Kyoto 612-8686
Country :	Japan
Financials (as on) :	31.03.2014
Date of Incorporation :	December 1938
Com. Reg. No.:	1300-01-000054
Legal Form :	Limited Company
Line of Business :	Manufacturing of textile machinery, communication equipment, machine tools, automated systems, clean systems
No. of Employees	3,000

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 1, 2014

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

*.. The is its Osaka Branch Office (Logistic & Automation Div)

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 177,945 M

PAYMENTS NO COMPLAINTS CAPITAL Yen 900 M

TREND STEADY WORTH Yen 126,291 M

STARTED 1938 EMPLOYES 3,000

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/2014 fiscal term amounted to Yen 177,945 million, a 33% up from Yen 133,205 million in the previous term. The recurring profit was posted at Yen 18,066 million and the net profit at Yen 10,042 million, respectively, compared with Yen 7,382 million recurring profit and Yen 7,513 million net profit, respectively, a year ago.

For the current term ending Mar 2015 the recurring profit is projected at Yen 19,000 million and the net profit at Yen 11,000 million, respectively, on a 5% rise in turnover, to Yen 186,500 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 (26%): spinning frames, auto winders, electric dobbins;

Communication Equipment (8%): digital multifunctional products, laser & thermal

Fax machines;

Logistics & Automation Equipment Systems (22%): systems for medical supplies,

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

Machine Tools (23%): tuning machines, sheet metal fabricating machines, lathes;

Others (29%)

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 Technologies, Fuji Xerox, Tokai EC, SMC, Uster Technologies, Takebishi Corp, NEC Fielding, Okura

Yusoki 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:		31/03/2015	31/03/2014	31/03/2013	31/03/2012
Annual Sales		186,500	177,945	133,205	134,291
Recur. Profit		19,000	18,066	7,382	1,256
Net Profit		11,000	10,042	7,513	359
Total Assets			336,314	225,611	218,229
Current Assets			164,317	162,953	153,599
Current Liabs			101,342	111,482	114,612
Net Worth			126,291	114,129	103,617
Capital, Paid-Up			900	900	900
Div.P.Share(¥)			0.00	10.00	0.00
<Analytical Data>		(%)	(%)	(%)	(%)
S.Growth Rate		4.81	33.59	-0.81	8.82
Current Ratio		..	162.14	146.17	134.02
N.Worth Ratio		..	37.55	50.59	47.48
R.Profit/Sales		10.19	10.15	5.54	0.94
N.Profit/Sales		5.90	5.64	5.64	0.27
Return On Equity		..	7.95	6.58	0.35

Notes: Forecast figures for the 31/03/2015 fiscal term.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.47
UK Pound	1	Rs.100.35
Euro	1	Rs.78.86

INFORMATION DETAILS

Analysis Done by :	KAR
Report Prepared by :	SHG

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.