MIRA INFORM REPORT

Report Date :

06.09.2014

IDENTIFICATION DETAILS

Name :	ITOCHU SYSTECH CORPORATION
Registered Office :	Ito Bldg 9F, 3-6-14 Minami-Honmachi Chuoku Osaka 541-0054
Country :	Japan
Financials (as on) :	31.03.2014
Date of Incorporation :	April 1969
Com. Reg. No.:	1200-01-074630
Legal Form :	Limited Company
Line of Business :	Import, export, wholesale of textile machinery
No. of Employees	116

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

ITOCHU SYSTECH CORPORATION

REGD NAME: Itochu Systech KK

MAIN OFFICE: Ito Bldg 9F, 3-6-14 Minami-Honmachi Chuoku Osaka 541-0054 JAPAN

Tel: 06-6282-1114 Fax: 06-6282-1109

URL: http://www.itochu-systech.co.jp/

E-Mail address: (thru the URL)

ACTIVITIES

Import, export, wholesale of textile machinery

BRANCHES

Tokyo, Nagoya

OVERSEAS

Shanghai, Jakarta, Istanbul, Karachi, USA, Germany, France, Italy, Singapore

(--subsidiaries)

OFFICER(S)

HIROYUKI SONODA, PRES Yoichi Umeda, dir

Shoichi Murakami, dir Kazunori Iwaki, dir

Masahiko Mori, dir Masao Morita, dir

Yen Amount: In million Yen, unless otherwise stated

SUMMARY

FINANCES FAIR A/SALES Yen 25,191 M

PAYMENTSNO COMPLAINTS CAPITAL Yen 480 M

TREND UP WORTH Yen 1,524 M

STARTED 1969 EMPLOYES 116

COMMENt

TRADING FIRM SPECIALIZING IN TEXTILE MACHINERY, OWNED

BY ITOCHU CORP

FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

HIGHLIGHTS

The subject company was established on the basis of a machinery export division separated from Itochu Corp, a leading general trading house, Tokyo (See REGISTRATION), as Itochu Texmac Corp. In Apr 2008, merged a sister company, Itochu Plamac Corp, and renamed as captioned. This is a trading firm for export, and partially import, of textile machinery & peripheral equipment in the main, hi-tic polymer processing machinery, including their parts & attachments. Also offers installation, maintenance and engineering services. Export destinations are China, Pakistan, Thailand, Turkey, Indonesia, India, Bangladesh, Europe, USA, etc. In Apr 2011, merged three sister firms to make them consolidated subsidiaries in order to streamline & strengthen business activities in the Asian markets. Clients include major textile makers, apparel makers, other.

FINANCIAL INFORMATION

The sales volume for Mar/2014 fiscal term amounted to Yen 15,191 million, a 69% up from Yen 14,875 million in the previous term. Group firms were integrated and sales rose. Export was robust into S/E Asian countries. Business volume expanded. Weaker Yen also contributed. The net profit is not precisely disclosed but is estimated to post at Yen 530 million, compared with Yen 300 million a year ago.

For the current term ending Mar 2015 the net profit is projected at Yen 550 million, on a 5% rise in turnover, to Yen 26,500 million. Weaker Yen may push the export sales revenues in Yen terms. .

The financial situation is considered FAIR and good for ORDINARY business engagements.

REGISTRATION

Date Registered: Apr 1969

Regd No.: 1200-01-074630 (Osaka-Chuoku)

Legal Status: Limited Company (Kabushiki Kaisha)

Authorized: 38,400 shares

Issued: 9,600 shares

Sum: Yen 480 million

Major shareholders (%): Itochu Corp* (75), Mori Seiki (17), Itochu Machine-Technos (8) No. of shareholders: 3

*.. One of big 5 general trading houses, at the caption address, founded 1949, listed Tokyo S/E, capital Yen 202,241 million, turnover Yen 14,566,820 million, operating profit Yen 279,094 million, recurring profit Yen 373,808 million, net profit Yen 310,267 million, total assets Yen 7,848,440 million, net worth Yen 2,146,913 million, employees 102,376, pres Masahiro Okafuji

Nothing detrimental is known as to the commercial morality of executives.

OPERATION

Activities: Exports, imports and wholesales textile machinery/equipment: spinning machinery, dyeing & finishing machinery, synthetic fiber machines, high-tech polymer processing machinery, automatic side hemming machines for towels, automatic towel slitting machines, cross hemming machines, their parts & components, offering installation, maintenance & engineering services (--100%).

Clients: [Textile mfrs, wholesalers] Exports to Texmac Inc (USA), Texmac Europe Spa (Italy), Weiqiao Tex, Colony Tex, Sheikh Spinning, Crescent Steel, other to China, India, Indonesia, Turkey, Bangladesh, Pakistan, Thailand, other.

Domestic clients: Kawashima Selcon Textiles, Sato Pharmaceutical, Tokyo Neo Print, Unitika, Daifuku Co, Kaihara Co, Toyota Automatic Loom Works, Kuraray, CI Kasei Co, Sumitomo Chemical, Sanko Co, other

No. of accounts: 300

Domestic areas of activities: Nationwide

Suppliers: [Mfrs] For exports, supplied from Murata Machinery, Toyoda Automatic Loom Works, Tsudakoma Corp, Happy Ind, TMT Machinery, Plastic Research Laboratory of Plastic Technology Co, other.

Partially imports from: Van de Wiele, Bonas Textile Machinery, CF Scheer & Cie GmbH, other fromGermany, Switz, Belgium, Korea, etc.

Payment record: No complaints

Location: Business area in Osaka. Office premises at the caption address are leased and maintained satisfactorily.

Bank References:

Mizuho Bank (Semba)

SMBC (Semba)

Relations: Satisfactory

FINANCES

(In Million Yen)

Terms Ending:		31/03/2015	31/03/2014	31/03/2013	31/03/2012
Annual Sales		26,500	25,191	14,875	13,007
Recur. Profit
Net Profit		550	530	300	185
Total Assets			8,218	6,106	5,801
Current Assets			7,596	5,357	5,079
Current Liabs			6,556	4,476	4,343
Net Worth			1,524	1,496	1,307
Capital, Paid-Up			480	480	490
Div.Ttl in Million (¥)			0.00	0.00	84
<Analytical Data>		(%)	(%)	(%)	(%)
S.Growth Rate		5.20	69.35	14.36	-6.73
Current Ratio		..	115.86	119.68	116.95
N.Worth Ratio		..	18.54	24.50	22.53
R.Profit/Sales		..	..	..	..
N.Profit/Sales		2.08	2.10	2.02	1.42
Return On Equity		..	34.78	20.05	14.15

Notes: Profits for the 31/03/2014 fiscal term are not precisely disclosed and estimated.

Forecast (or estimated) figures for the 31/03/2015 fiscal term.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.44
UK Pound	1	Rs.98.64
Euro	1	Rs.78.20

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.