MIRA INFORM REPORT

Report Date :

09.12.2014

IDENTIFICATION DETAILS

Name :	KCM CORPORATION
Registered Office :	2680, Oka, Inami-cho, Kako-gun, Hyogo pref. 675-1113
Country :	Japan
Financials (as on) :	31.03.2014
Date of Incorporation :	05.01.2009
Com. Reg. No.:	1400-01-045975
Legal Form :	Private Company
Line of Business :	Manufacturer of Construction machine
No of Employees :	567

RATING & COMMENTS

MIRA’s Rating :

B

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

Status :	Moderate
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 – September 30, 2014

Country Name	Previous Rating (30.06.2014)	Current Rating (30.09.2014)
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

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

KCM CORPORATION

OUTLINE

Country: Japan

Company name: KCM CORPORATION

Name in local language: KCM, K.K. (株式会社ＫＣＭ)

Office address: 2680, Oka, Inami-cho, Kako-gun, Hyogo pref. 675-1113

Office tel: 079-495-1211

Office fax: 079-495-1226

Website: www.khi.co.jp/kenki/

Business type: Manufacturer

Industry: Construction machine

Established: January 5, 2009

Capital: Jp. 4,825,023,500 yen

Employees: 567

Corporate formation: Private

Corporation No.: 1400-01-045975 (Kobe Legal Affairs Bureau)

MAJOR SHAREHOLDERS

Paid in capital : Jp. 4,825,023,500 yen

Number of authorized shares : 300,000 shares

Shares issued : 4,049 shares

Number of shareholder : 1

Hitachi Construction Machinery Co., Ltd.

DETAILED PRODUCT CLASSFICATION & ACTIVITY

Activity Product/Service Description

-------------------------------------------------------------------------------

Manufacturing Construction machines

COMPANY MANAGEMENT

President Mr. Tadashi Mikawauchi

Nationality: Japan

Director Mr. Takayuki Matsuura

Nationality: Japan

Director Mr. Aiichiro Tanaka

Nationality: Japan

Director Mr. Hisashi Ishizaki

Nationality: Japan

Director Mr. Toshihiro Ohno (Corporate officer of Hitachi Constructin

Machinery Co., Ltd.)

Nationality: Japan

Director Mr. Akira Tomita

Nationality: Japan

Auditor Mr. Takashi Ando

Nationality: Japan

Auditor Mr. Hideki Mizumachi

Nationality: Japan

Auditor Mr. Osamu Isono

Nationality Japan

Note: The names of director(s) and auditor(s) are phonetically spelt.

*Key Personnel*

==============

Mr. Tadashi Mikawauchi

President and representative director

Born on December 25, 1957

Home address: 3-4-1, Ibukidai, Nishi-ku, Kobe-shi 651-2242

FINANCIALS

Currency: (local currency - Jp. yen)

-------------------------------------------------------------------------------------

Year | Sales | Net Income

------------------------------------------------------------------------------------

2009	n. a.	loss 630,000
2010	13,262,000,000	loss 6,263,000,000
2011	18,607,492,000	loss 571,546,000
2012	24,272,000,000	229,000,000
2013	25,229,000,000	213,000,000
2014	26,356,000,000	38,000,000

FINANCIAL DESCRIPTION

*Book Closing*

============

March 31st

*Financials*

==========

Balance Sheet
Unit: millions of JP yen
	3/31/2012	3/31/2013	3/31/2014
Current assets	14,666	16,704	14,502
Fixed assets	4,293	4,072	4,299
Tangible assets	2,314	2,315	2,679
Intangible assets	347	321	283
Investments & others	1,631	1,436	1,336
Total Assets	18,959	20,777	18,802
Current liabilities	13,513	15,646	13,577
Fixed liabilities	2,364	2,298	2,382
Retirement benefits	2,279	2,193	2,332
Others	85	105	50
Shareholders' equity	3,043	3,256	2,960
Paid up capital	4,825	4,825	4,825
Capital reserves	4,825	4,825	4,825
Retained earnings	-6,606	-6,393	-6,689
Valuation & adjustment	38	-424	-119
Total Net Assets	3,082	2,832	2,841
Total Liabilities & Net Assets	18,959	20,777	18,802
Income Statement
Unit : millions of JP yen
	3/31/2012	3/31/2013	3/31/2014
Sales	24,272	25,229	26,356
Cost of goods sold	23,174	24,036	24,576
Gross profit(loss)	1,097	1,193	1,780
Sales/administrative expenses	749	814	957
Operating profit(loss)	347	379	822
Non operating income	6	8	13
Non operating expenses	61	142	835
Ordinary profit(loss)	292	245	0
Special profits	57	33	43
Special losses	121	58	0
Pretax profit	227	220	43
Taxes & adjustment	-2	7	5
Net profit	229	213	38

*Bank Details*

============

Bank Name : Mizuho Bank, Ltd.

Branch : Hamamatsu-cho

Bank Name : Sumitomo Mitsui Banking Corp.

Branch : Kakogawa

*Credit Opinion*

=============

The latest status of the subject is a subsidiary, wholly owned by Hitachi Construction Machinery Co., Ltd. though its origin was a member of Kawasaki Heavy Industries, Ltd. group.

Since the company name, KCM, came from Kawasaki Construction Machinery, it may be renamed someday.

While its business has yet to take off, it is expected to grow under a strong backing by the new parent that is ranked as No.3 in the world.

The parent carries JPN 220,374 million of retained earnings as of June 30, 2014.

Negative factors are not observed in particular at moment.

LOCAL BRANCHES & MANAGEMENT

Branch name: Tokyo branch

Branch address: Minami-suna, Koto-ku, Tokyo

Branch tel: 03-3615-5195

Branch fax: 03-3615-5206

----------------------------------------------------------------------------------------------------

PRODUCT, TECHNOLOGY, SERVICE DESCRIPTION

*Main Products & Services*

======================

Development, manufacture and sales of the following construction machines:

- Shovel truck loader

- Tractor shovel

- Other construction machines and parts

FACTORY FACILITIES & MANUFACTURING CAPABILITIES

At the location of the head office

ORGANIZATION STRUCTURE

*Address*

=========

Registered address is the same as the operational address.

*Company History*

================

Date Development

-----------------------------------------------------------------------------------------------

1960 Started manufacturing tire roller at Hyogo plant of then “Kawasaki

Rolling Stock, Ltd.” (now Kawasaki Heavy Industry Rolling Stock Company)

2009 The subject was founded by separating the above business assets.

Then it became a joint venture between Kawasaki Heavy Industries, Ltd.(66%) and Hitachi Construction Machinery Co., Ltd.(34%).

October 1, 2014 Hitachi Construction Machinery Co., Ltd. acquired 100% of the issued shares.

TRADE REFERENCES

*Suppliers*

==========

Kawasaki Heavy Industries, Ltd.

Kawasaki Trading Co., Ltd.

Cummins Japan K.K.

Isuzu Motors Ltd.

Hitachi Construction Machinery Co., Ltd.

Bridgestone Corp.

*Customers*

==========

KCMJ Corp.

KCMA Corp.

ENKA Corp.

Kawaju Kenki Co., Ltd.

Hitachi Construction Machinery Co., Ltd.

Toyota Tsusho Corp.

Itochu Corp.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 61.92
UK Pound	1	Rs. 96.37
Euro	1	Rs. 76.10

INFORMATION DETAILS

Analysis Done by :	SUB
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%)

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.