MIRA INFORM REPORT

Report Date :

09.12.2014

IDENTIFICATION DETAILS

Name :	KOEI CHEMICAL CO., LTD.
Registered Office :	2-12-13, Hanaten-nishi, Joto-ku, Osaka-shi
Country :	Japan
Financials (as on) :	31.03.2014 (Consolidated)
Date of Incorporation :	17.06.1917
Com. Reg. No.:	1200-01-077410 (Osaka)
Legal Form :	Private Company
Line of Business :	Engaged in manufacturing and selling Plastic products & all kinds of chemical products, especially polyhydric alcohols, pyridine bases, pyrazines, and amines.
No of Employees :	292

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 :	Slow but Correct
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	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

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 :	Slow but Correct
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	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

KOEI CHEMICAL CO., LTD.

company OUTLINE

Company name: KOEI CHEMICAL CO., LTD.

Name in local language: KOEI KAGAKU KOGYO, K.K.

Office address: 1-8, Nihonbashi-koami-cho, Chuo-ku, Tokyo 103-0016

Country: Japan

Office tel: 03-6837-9300

Office fax: 03-6837-9307

Website: www.koeichem.com

Business type: Manufacturer

Industry: Industrial chemicals

Established: June 17, 1917

Capital: Jp. 2,343,000,000 yen

Employees: 292

Corporate formation: Listed

Corporation No.: 1200-01-077410 (Osaka Legal Affairs Bureau)

MAJOR SHAREHOLDERS

Paid in capital : Jp. 2,343,000,000 yen

Number of authorized shares : 80,000,000 shares

Shares issued : 24,500,000 shares

Number of shareholder : 1,426

Name of shareholders Number of thousand shares (%)

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

Sumitomo Chemical Co., Ltd. 13,657 (55.74)

Shionogi Pharmaceutical Co., Ltd. 1,671 ( 6.82)

Takeda Pharmaceutical Co., Ltd. 1,457 ( 5.94)

Mitsubishi Tanabe Pharma Corporation 910 ( 3.71)

Employees shareholders fund 248 ( 1.01)

operation

Engaged in manufacturing and selling Plastic products & all kinds of chemical products, especially polyhydric alcohols, pyridine bases, pyrazines, and amines.

DETAILED PRODUCT CLASSFICATION & ACTIVITY

Activity Product/Service Description

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

Manufacturing Fine chemicals

Manufacturing Plastics

COMPANY MANAGEMENT

President Mr. Shigenori Tsuda

Nationality: Japan

Director Mr. Toshiki Matsumura

Nationality: Japan

Director Mr. Tsuyoshi Yasukawa

Nationality: Japan

Director Mr. Kiyotaka Ishiuchi

Nationality: Japan

Director Mr. Makoto Hattori

Nationality: Japan

Director Mr. Keiichi Sakata

Nationality: Japan

Auditor Mr. Hideo Fukae

Nationality: Japan

Auditor Mr. Seiichi Tanaka

Nationality: Japan

Auditor Mr. Kenjiro Fukubayashi

Nationality: Japan

Auditor Mr. Akira Iwasaki

Nationality: Japan

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

*Key Personnel*

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

Mr. Shigenori Tsuda

President and representative director

Born on February 1, 1952

Business career:

Apr. 1974: Employed by Sumitomo Chemical Co., Ltd.

Apr. 2009: Advisor.

Jun. 2009: President of Taoka Chemical Co., Ltd.

Jun. 2014: Representative director and president of the subject.

Home address: 3-1-52-612, Tohguh-cho, Ibaraki-shi, Osaka pref.

FINANCIALS

Currency: (local currency - Jp. yen)

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

Year | Sales | Net Income

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

2009	23,584,190,000	593,070,000
2010	20,605,572,000	226,406,000
2011	19,950,301,000	286,633,000
2012	19,712,474,000	159,334,000
2013	18,221,494,000	loss 244,601,000
2014	18,583,481,000	70,831,000

FINANCIAL DESCRIPTION

*Book Closing*

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

March 31st

*Financials*

==========

Consolidated Balance Sheet
Unit: millions of JP yen
	3/31/2012	3/31/2013	3/31/2014
Current assets	10,629	10,972	11,171
Cash & deposits	415	404	428
Account receivables	5,435	5,139	5,049
Inventories	4,599	5,215	5,410
Others	180	214	284
Fixed assets	11,360	11,602	10,431
Tangible assets	9,586	9,410	8,277
Intangible assets	35	26	29
Investments & others	1,738	2,165	2,123
Total Assets	21,990	22,574	21,603
Current liabilities	7,250	8,111	7,033
Account payables	3,816	3,226	3,744
Short term loans	2,291	3,948	2,585
Outstanding taxes	91	13	11
Others	1,052	924	693
Fixed liabilities	2,093	1,983	2,032
Long term loans	206	75	0
Retirement benefits	1,440	1,461	1,570
Others	447	447	462
Shareholders' equity	11,997	11,581	11,651
Paid up capital	2,343	2,343	2,343
Capital reserves	1,551	1,551	1,551
Retained earnings	8,112	7,696	7,767
Treasury stock	-9	-9	-10
Valuation & adjustment	615	863	849
Minority Interest	31	34	35
Total Net Assets	12,645	12,479	12,536
Total Liabilities & Net Assets	21,990	22,574	21,603

Consolidated Income Statement
Unit : millions of JP yen
	3/31/2012	3/31/2013	3/31/2014
Sales	19,712	18,221	18,583
Cost of goods sold	16,255	15,739	15,770
Gross profit(loss)	3,456	2,482	2,812
Sales/administrative expenses	3,172	3,037	2,809
Operating profit(loss)	284	-555	3
Non operating income	175	252	195
Non operating expenses	75	56	66
Ordinary profit(loss)	384	-359	132
Special profits	0	0	0
Special losses	0	0	0
Pretax profit	384	-359	132
Taxes & adjustment	224	-117	61
Minority interest	-	3	-
Net profit	159	-244	70

*Latest Financials *

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

On October 30, 2014, the subject released the following business results and forecast:

As of September 30, 2014(2Q 2015 term)

Unit: millions of JPY

Year term	Sales	Operating profit(loss)	Ordinary profit(loss)	Net profit(loss)
2Q 2015	8,664	-74	-44	-33
FY 2015(F)	19,300	200	210	130

Current assets;	10,540
Fixed assets;	10,013
Total assets;	20,553
Current liabilities;	6,045
Fixed liabilities;	2,023
Shareholders’ equity;	11,485
Retained earnings;	7,601
Total net assets;	12,484
Total liabilities and net assets;	20,553

Bank Details

Bank Name : Sumitomo Mitsui Banking Corp.

Branch : Tokyo business banking department

Bank Name : Sumitomo Mitsui Trust & Banking Co., Ltd.

Branch : Head office

Bank Name : Bank of Tokyo-Mitsubishi UFJ, Ltd.

Branch : Osaka-chuo

Credit Opinion

The subject is a subsidiary of Sumitomo Chemical Co., Ltd., a leading company of Sumitomo business group.

Backed by Sumitomo Chemical, the subject is putting the focus on its three major business segments; i.e. medical intermediate agent, catalyst for petrochemical products, and ion fluid for electronics.

While catalyst and ion fluid are contributing to its business activity, medical products is facing a slow recovery.

As the subject liquidated its last subsidiary this year, it will terminate the consolidated accounting method from Mar. 2015 term.

The ratio of overseas business is planned to stay within 45% in order to control the bottom line steadily.

The parent, Sumitomo Chemical Co., Ltd. carries JPY 449,126 million of retained earnings as of June 30, 2014.

Negative factors are not observed in particular at present.

LOCAL BRANCHES & MANAGEMENT

Branch name: Osaka business headquarters office

Branch address: 2-12-13, Hanaten-nishi, Joto-ku, Osaka-shi

Branch tel: 06-6961-0252

Branch fax: 06-6961-0498

PRODUCT, TECHNOLOGY, SERVICE DESCRIPTION

*Main Products & Services*

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

For Mar. 2014 term:

- Fine chemical products (68%)

- Plastic products (32%)

Overseas business (44%)

FACTORY FACILITIES & MANUFACTURING CAPABILITIES

Osaka plant: Joto-ku, Osaka-shi

Chiba plant: Sodegaura-shi, Chiba pref.

R&D: Sodegaura-shi, Chiba pref.

ORGANIZATION STRUCTURE

*Address*

=========

Registered address: 2-12-13, Hanaten-nishi, Joto-ku, Osaka-shi

Operating head office: 1-8, Nihonbashi-koami-cho, Chuo-ku, Tokyo

The quoted address, Chinonogi Honcho Kyodo Bldg., 3-7-2, Nihonbashi-honcho, Chuo-ku, Tokyo, is the previous operational head office.

The quoted phone number was for the previous PR department.

*Company History*

Date Development

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

June 17, 1917 Incorporated with an investment of JPY 500,000 under the name of

Koei Seiyaku(Pharmaceutical) Co., Ltd.

May 1926 Renamed as Koei Co., Ltd.

July 1950 Took the current company name.

October 1997 Listed on the OSE(#4367).

January 2003 Relocated the registered head office to the current address within

Osaka City.

December 2013 Liquidated only one subsidiary.

TRADE REFERENCES

*Suppliers*

==========

Sumitomo Chemical Co., Ltd.

BASAF Japan K.K.

Sumitomo Shoji Chemical Co., Ltd.

*Customers*

==========

Sumitomo Corp.

Sumitomo Shoji Chemical Co., Ltd.

Dow Agro Sciences Inc.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.93
UK Pound	1	Rs.96.37
Euro	1	Rs.76.10

INFORMATION DETAILS

Analysis Done by :	SUM
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.