MIRA INFORM REPORT

Report Date :

19.12.2014

IDENTIFICATION DETAILS

Name :	THK CO., LTD.

Registered Office :	3-11-6, Nishi-Gotanda, Shinagawa-ku, Tokyo 141-0031

Country :	Japan

Financials (as on) :	31.03.2014

Date of Incorporation :	11.03.1946

Com. Reg. No.:	0107-01-006176

Legal Form :	Listed Company

Line of Business :	Manufacturer of Equipment and devices

No. of Employees :	9,177

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Good
Payment Behaviour :	Regular
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

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

THK CO., LTD.

Company summary

Country: Japan

Company name: THK CO., LTD.

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

Office address: 3-11-6, Nishi-gotanda, Shinagawa-ku, Tokyo 141-0031

Office tel: 03-5434-0300

Website: www.thk.com

Business type: Manufacturer

Industry: Equipment and devices

Established: March 11, 1946

Capital: Jp. 34,606,243,557 yen

Employees: 9,177

Corporate formation: Listed

Corporation No.: 0107-01-006176 (Tokyo Legal Affairs Bureau)

MAJOR SHAREHOLDERS

As of March 31, 2014:

Paid in capital : Jp. 34,606,243,557 yen

Number of authorized shares : 465,877,700 shares

Shares issued : 133,856,903 shares

Number of shareholder : 17,484

Name of shareholders Number of thousand shares (%)

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

Master Trust Bank of Japan, Ltd. 8,457 (6.31)

Japan Trustee Services bank, Ltd. 5,304 (3.96)

Mr. Akihiro Terakado, President 3,646 (2.72)

Mellon Bank NA (USA) 3,443 (2.57)

FTC Corp. 2,774 (2.07)

Northern Trust Co. (UK) 2,664 (1.99)

The Bank of New York 132812 (Belgium) 2,023 (1.51)

RBS IST 15 PCT (Canada) 2,020 (1.50)

State Street Bank And Trust Co.(USA) 1,923 (1.43)

JPMCB USA JASDAC 385051 1,923 (1.43)

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

Total 34,192 (25.54)

DETAILED PRODUCT CLASSFICATION & ACTIVITY

Activity Product/Service Description

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

Manufacturing Equipment & devices for machine tools

COMPANY MANAGEMENT

President Mr. Akihiro Teramachi

Nationality: Japan

Vice President Mr. Toshihiro Teramachi

Nationality: Japan

Vice President Mr. Hiroshi Konno

Nationality: Japan

Director Mr. Takashi Okubo

Nationality: Japan

Director Mr. Junichi Sakai

Nationality: Japan

Director Mr. Takashi Teramachi

Nationality: Japan

Director Mr. Masateru Kaisho

Nationality: Japan

Director Mr. Masakatsu Hioki

Nationality Japan

Auditor Mr. Hideyuki Kiuchi

Nationality: Japan

Auditor Mr. Kazunori Igarashi

Nationality: Japan

Auditor Mr. Shizuo Watanabe

Nationality: Japan

Auditor Mr. Masatake Yone

Nationality: Japan

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

*Key Personnel*

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

Mr. Akihiro Teramachi

President and representative director

Born on April 5, 1951

Business career:

Until Oct. 1975: Worked for Okuma Tekkosho.

Oct. 1975: Employed by the subject.

Mar. 1982: Director.

May 1995: President of Daito Seiki Co., Ltd.

Jan. 1997: Representative director and president of the subject.

Other responsibilities: Heading a total of 16 subsidiaries mostly abroad.

Home address: 2-34-8, Higashi-tamagawa, Setagaya-ku, Tokyo

FINANCIALS

Currency: (local currency - Jp. yen)

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

Year | Sales | Net Income

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

2009	179,269,000,000	1,204,000,000
2010	115,330,000,000	loss 14,300,000,000
2011	190,661,000,000	13,959,000,000
2012	196,661,000,000	12,641,000,000
2013	168,366,000,000	9,808,000,000
2014	185,466,000,000	15,590,000,000

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	198,652	193,940	227,890
Cash & deposits	110,788	115,967	138,343
Account receivables	53,034	46,116	52,557
Inventories	26,234	24,098	28,765
Others	8,596	7,759	8,225
Fixed assets	89,680	99,205	108,526
Tangible assets	79,612	87,697	94,838
Intangible assets	2,606	2,767	4,213
Investments & others	7,462	8,740	9,474
Total Assets	288,333	293,145	336,416

Current liabilities	44,542	55,656	54,490
Account payables	27,661	20,846	25,411
Bonds payable due	0	0	10,000
Long term loans due	0	20,000	0
Outstanding taxes	2,151	2,177	5,808
Others	14,730	12,633	13,271

Fixed liabilities	68,274	48,430	59,777
Bonds payable	40,000	40,000	50,000
Long term loans	20,000	0	0
Retirement benefits	3,096	3,122	4,210
Others	5,178	5,308	5,567
Shareholders' equity	188,990	193,678	206,731
Paid up capital	34,606	34,606	34,606
Capital reserves	44,584	44,584	44,584
Retained earnings	121,161	128,416	141,474
Treasury stock	-11,362	-13,928	-13,934
Valuation & adjustment	-15,126	-6,390	13,099
Minority Interest	1,652	1,769	2,317
Total Net Assets	175,516	189,058	222,148
Total Liabilities & Net Assets	288,333	293,145	336,416

Consolidated Income Statement
Unit : millions of JP yen
	3/31/2012	3/31/2013	3/31/2014
Sales	196,866	168,366	185,466
Cost of goods sold	142,891	124,067	132,562
Gross profit(loss)	53,975	44,298	52,903
Sales/administrative expenses	34,229	32,605	35,533
Operating profit(loss)	19,745	11,692	17,370
Non operating income	2,174	4,268	7,611
Non operating expenses	2,848	1,196	1,362
Ordinary profit(loss)	19,072	14,765	23,618
Special profits	43	40	608
Special losses	594	69	222
Pretax profit	18,520	14,737	24,004
Taxes & adjustment	5,574	4,874	8,246
Minority interest	304	54	167
Net profit	12,641	9,808	15,590

*Latest Financials *

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

On November 6, 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	Ordinary profit	Net profit
2Q 2014	89,099	7,486	10,897	7,128
2Q 2015	106,207	14,300	15,472	10,887
FY 2015(F)	215,000	28,000	30,000	20,000

Current assets;	238,462
Fixed assets;	103,372
Total assets;	341,834
Current liabilities;	48,763
Fixed liabilities;	70,637
Shareholders’ equity;	214,429
Retained earnings;	149,177
Total net assets;	222,433
Total liabilities and net assets;	341,834

*Bank Details*

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

Bank Name : Mizuho Bank, Ltd.

Branch : Shinjuku corporate banking department

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

Branch : Gotanda

Bank Name : Mitsubishi UFJ Trust & Banking Corp.

Branch : Head office

*Credit Opinion*

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

The subject is the world’s leading manufacturer of so-called LM system to be mounted on machine tools etc. The subject has been maintaining over 50% of market share worldwide in this business sphere.

The recent operating profit has been rapidly growing thanks to increasing demands in the nation, growing demands in North America, and also the business in China and Europe turned into black due to cost improvement.

The record high performance for Mar. 2014 term is renewed further.

A wider application is expected in China as the production facilities there are in full-fledged operation.

Financial condition is sound enough.

Negative factors are not observed in particular at moment.

LOCAL BRANCHES & MANAGEMENT

Branch name: Tokyo branch

Branch address: Nishi-gotanda, Shinagawa-ku, Tokyo

Branch tel: 03-5434-0341

Branch fax: 03-5434-0345

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

Branch name: Nagoya branch

Branch address: Naka-ku, Nagoya-shi, Aichi pref.

Branch tel: 052-883-0851

Branch fax: 052-883-0855

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

Branch name: Osaka branch

Branch address: Chuo-ku, Osaka-shi, Osaka pref.

Branch tel: 06-6222-8211

Branch fax: 06-6222-8212

26 other local branches and sales offices: Tokyo, Kawagoe, Sendai, Akita, Utsunomiya, Nagaoka, Hitachi-naka, Hachioji, Atsugi, Shizuoka, Numazu, Chuo, Suwa, Ueda, Chiryu, Komaki, Kanazawa, Rittoh, Akashi, Fukuoka, Hiroshima, Fukuyama, Matsuyama, Tokushima and Kumamoto cities.

Two order fulfilment centers: Nagoya and Rittoh cities.

PRODUCT, TECHNOLOGY, SERVICE DESCRIPTION

*Main Products & Services*

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

Development, manufacture, export and wholesale of the following products:

Linear motion systems (e.g. LM Guide and Ball Spline)

Ball Screw

XY Tables

Link Balls

Rod Ends and Seismic Isolation Devices

For Mar. 2014 term:

LM system, Japan (58%)

LM system, Americas (15%)

LM system, Europe (10%)

LM system, China (11%)

Others (6%)

Overseas business(46%)

FACTORY FACILITIES & MANUFACTURING CAPABILITIES

Domestic:

Kofu plant: Chuo-shi, Yamanashi pref.

Yamaguchi plant: Sanyo-onoda-shi, Yamaguchi pref.

Yamagata plant: Higashine-shi, Yamagata pref.

Yamagata annex: Kawasaki-shi, Kanagawa pref.

Mie plant: Matsuzaka-shi, Mie pref.

Gifu plant: Fuwa-gun Gifu pref.

ORGANIZATION STRUCTURE

*Address*

=========

Registered address is the same as the operational address.

*Company History*

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

Date Development

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

March 11, 1946 Incorporated under the name of “Toho Seiko Co., Ltd.”

January 1984 Took the current company name.

November 1989 Went public(#6481).

May 1993 Relocated the head office to the current address.

TRADE REFERENCES

*Suppliers*

==========

Group companies(specific names not provided)

*Customers*

==========

Major manufacturers(specific name not provided)

MAJOR SUBSIDIARIES, JOINT-VENTURES & AFFILIATES

Company name: THK Intex Co., Ltd.

Country: Japan

Status: Subsidiary

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

Company name: THK Holdings of America, LLC

Country: U.S.A.

Status: Subsidiary

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

Company name: THK (China) Investment Co., Ltd.

Country: Cina

Status: Subsidiary Joint-Venture

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

RELATED PARTIES DESCRIPTION

*Subsidiaries & Affiliates*

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

As of March 31, 2014 the subject owns and controls a total of 36 subsidiaries and three affiliates at home and abroad.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.63.32
UK Pound	1	Rs.98.68
Euro	1	Rs.78.11

INFORMATION DETAILS

Analysis Done by :	DIV

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.