MIRA INFORM REPORT

Report Date :

18.12.2014

IDENTIFICATION DETAILS

Name :	MORIMURA BROS., INC.
Registered Office :	Morimura Bldg., 1-3-1, Toranomon, Minato-ku, Tokyo 105-0001
Country :	Japan
Financials (as on) :	31.12.2013
Date of Incorporation :	20.04.1918
Com. Reg. No.:	0104-01-029693
Legal Form :	Private Company
Line of Business :	Trader of Ceramics, electronics, chemicals, metals
No. of Employees :	260

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

Maximum Credit Limits :	US$ 3 million
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 – 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

MORIMURA BROS., INC.

Company summary

Country: Japan

Company name: MORIMURA BROS., INC.

Name in local language: MORIMURA SHOJI K.K. (森村商事株式会社)

Office address: Morimura Bldg., 1-3-1, Toranomon, Minato-ku, Tokyo 105-0001

Office tel: 03-3502-6431

Office fax: 03-3502-2002

Website: www.morimura.co.jp

Business type: Trader

Industry: Ceramics, electronics, chemicals, metals etc.

Established: April 20, 1918

Capital: Jp. 180,000,000 yen

Employees: 260

Corporate formation: Private

Corporation No.: 0104-01-029693 (Tokyo Legal Affairs Bureau)

MAJOR SHAREHOLDERS

Paid in capital : Jp. 180,000,000 yen

Number of authorized shares : 6,000,000 shares

Shares issued : 1,800,000 shares

Number of shareholder : 62

Name of shareholders Number of shares (%)

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Morimura Houmeikai Foundation 221,000 shares (12.3)

Mr. Shunsuke Morimura 220,000 shares (12.2)

Employees shareholders fund 216,250 shares (12.0)

Mr. Yusuke Morimura, President 173,100 shares ( 9.6)

Bank of Tokyo-Mitsubishi UFJ, Ltd. 90,000 shares ( 5.0)

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Total 920,350 shares (51.1)

DETAILED PRODUCT CLASSFICATION & ACTIVITY

Activity Product/Service Description

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

Trading Ceramics

Trading Electronic materials

Trading Chemical products and resins

Trading Metals and metal products

COMPANY MANAGEMENT

President Mr. Yusuke Morimura (*)

Nationality: Japan

Senior Managing Director Mr. Yoshihiro Ueda (*)

Nationality: Japan

Senior Managing Director Mr. Shunji Akieda

Nationality: Japan

Managing Director Mr. Ichiro Wakui

Nationality: Japan

Managing Director Mr. Makoto Katagiri

Nationality: Japan

Director Mr. Norio Kato

Nationality: Japan

Director Mr. Noboru Akahane

Nationality: Japan

Director Mr. Kunio Harimoto

Nationality: Japan

Director Mr. Taro Kato

Nationality: Japan

Director Mr. Takuya Kawasaki

Nationality: Japan

Director Mr. Yukuya Shirane

Nationality: Japan

Director Mr. Junichi Kuwahara

Nationality: Japan

Director Mr. Hajime Morohoshi

Nationality: Japan

Auditor Mr. Takahisa Hasegawa

Nationality: Japan

Auditor Mr. Takaaki Nimura

Nationality: Japan

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

(*) = representative directors

*Key Personnel*

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

Mr. Yusuke Morimura

President and representative director since March 2003

Born on January 7, 1954 in Tokyo

Education: Graduated from Gakushuin University

Home address: 6-2-15, Okuzawa, Setagaya-ku, Tokyo 158-0083

FINANCIALS

Currency: (local currency - Jp. yen)

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

Year | Sales | Net Income

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

2008	88,754,969,000	615,571,000
2009	63,447,274,000	218,341,000
2010	73,873,788,000	57,949,000
2011	77,837,622,000	loss 4,312,112,000
2012	77,626,476,000	1,098,518,000
2013	84,163,635,000	2,160,909,000

FINANCIAL DESCRIPTION

*Book Closing*

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

December 31st

*Financials*

==========

Balance Sheet
Unit: millions of JP yen
	12/31/2011	12/31/2012	12/31/2013
Current Assets	26,851	24,575	24,883
Fixed assets	6,374	5,635	6,901
Total Assets	33,225	30,211	31,785
Current liabilities	26,105	22,484	21,788
Fixed liabilities	4,083	3,392	3,070

Shareholders' equity	3,039	4,138	6,263
Paid up capital	180	180	180
Capital reserves	351	351	351
Retained earnings	2,508	3,607	5,731
Valuation & adjustment	-2	196	663
Total Net Assets	3,037	4,335	6,926
Total Liabilities & Net Assets	33,225	30,211	31,785

Income Statement
Unit : millions of JP yen
	12/31/2011	12/31/2012	12/31/2013
	n. a.
Sales		77,626	84,163
Cost of goods sold		72,268	78,491
Gross profit(loss)		5,358	5,672
Sales/administrative expenses		4,019	3,929
Operating profit(loss)		1,339	1,742
Non operating income		1,320	931
Non operating expenses		179	191
Ordinary profit(loss)		2,479	2,482
Special profits		0	163
Special losses		157	15
Pretax profit		2,321	2,630
Taxes & adjustment		1,222	468
Net profit		1,098	2,160

*Bank Details*

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

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

Branch : Toranomon

Bank Name : Mizuho Bank, Ltd.

Branch : Toranomon

Bank Name : Resona Bank, Ltd.

Branch : Akasaka

*Credit Opinion*

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

The subject is a Tokyo-based time-honored trading firm since 1876.

Major ceramic-related companies such as Noritake, TOTO, INAX(now LIXIL) and NGK were founded by the same person as that of the subject.

The subject has been specializing in major industrial materials and products for more than three decades.

The subject, however, posted a huge amount of loss for Dec. 2011 term due to failure with derivative relating to currency exchange.

For Dec. 2012 sales remained flat and got rid of such financial mistake.

Further recovery was made successfully for Dec. 2013 term.

Negative factors are not observed in particular at present.

Our standard suggestion would be up to US$ 3 million on terms of 90 days.

LOCAL BRANCHES & MANAGEMENT

Branch name: Nagoya branch

Branch address: Meieki-minami, Nakamura-ku, Nagoya city, Aichi pref.

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Branch name: Osaka branch

Branch address: Kyutaro-machi, Chuo-ku, Osaka city, Osaka pref.

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Branch name: Kyushu sales office

Branch address: Kokura-kita-ku, Kita-Kyushu city, Fukuoka pref.

Another sales office in Okayama city, Okayama pref.

PRODUCT, TECHNOLOGY, SERVICE DESCRIPTION

*Main Products & Services*

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

Imports, exports and wholesale of the following products:

- Ceramics and ceramic products

- Electronic components and materials

- Chemical products and resins

- Metals and metal products

ORGANIZATION STRUCTURE

*Address*

=========

Registered address is the same as the operational address.

*Company History*

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

Date Development

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

Started business in Tokyo.

1904 Founded “Noritake Co., Ltd.”

April 20, 1918 Incorporated under the name of “Morimura-gumi K.K.” with an

investment of JPY 20 million.

1917 Founded “TOTO Ltd.”

1919 Founded “NGK(Nihon Gaishi Kaisha).”

1929 “Morimura Bank, Ltd.” was merged by Mitsubishi Bank, Ltd. (now

Bank of Tokyo-Mitsubishi UFJ, Ltd.)”

July 1946 The subject changed the company name to the current “Morimura

Bros., Inc.” Paid up capital; JPY 2.5 million.

1977 Increased the capital to the current JPY 180 million.

TRADE REFERENCES

*Suppliers*

==========

Alcoa Inc.

Sumitomo Chemical Co., Ltd.

Almatis Corp.

Morimura Bros. U.S.A.　

Sumitomo Bakelite Co., Ltd.

Morimura Chemical Co., Ltd.

Toso Co., Ltd.

Alcoa World Alumina Australia Pty. Ltd.

Murata Manufacturing Co., Ltd..

Toray Industries, Inc.

*Customers*

==========

Fuji Heavy Industries, Ltd.

Kawasaki Heavy Industries, Ltd.

Sumitomo Corp.

NGK Insulators, Ltd.

Hitachi Zosen Corp.

Kurosaki Harima Co., Ltd.

Shigeru Co.,Ltd.

Morimura Bros. (HK) Ltd.

Mitsubishi Heavy Industries, Ltd.

Morimura Bros. (Shanghai) Co., Ltd.

MAJOR SUBSIDIARIES, JOINT-VENTURES & AFFILIATES

Company name: Morimura Real Estate Co., Ltd.

Country: Japan

Status: Subsidiary

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Company name: Morimura Chemical Co., Ltd.

Country: Japan

Status: Subsidiary

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

Company name: Morimura Bros. USA, Inc.

Country: U.S.A.

Status: Subsidiary

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RELATED PARTIES DESCRIPTION

*Subsidiaries & Affiliates*

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

As of April 1, 2014 the subject owns and controls a total of 18 subsidiaries at home and abroad.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.63.58
UK Pound	1	Rs.99.98
Euro	1	Rs.79.39

INFORMATION DETAILS

Analysis Done by :	RAS
Report Prepared by :	NIS

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.