MIRA INFORM REPORT

Report No. :	312082.2
Report Date :	29.04.2015

IDENTIFICATION DETAILS

Name :	CONNECT HOLDINGS CORP
Registered Office :	2-10-2 Minami-Azabu Minatoku Tokyo 106-0047
Country :	Japan
Financials (as on) :	31.08.2014
Date of Incorporation :	March 2011
Legal Form :	Limited Company (Kabushiki Kaisha)
Line of Business :	Holding Company: business alliance, concept marketing shops [Note: We tried to confirm / obtain the detailed activity but the same is not available from any sources]
No. of Employee :	37

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 Limit :	Yen 34.2 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 – December 31, 2014

Country Name	Previous Rating (30.09.2014)	Current Rating (31.12.2014)
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. Since the complete shutdown of Japan’s nuclear reactors after the earthquake and tsunami disaster in 2011, Japan's industrial sector has become 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 four 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. A sales tax increase caused the economy to contract during the 2nd and 3rd quarters of 2014. The economy has largely recovered in the three years since the disaster, but reconstruction in the Tohoku region has been uneven due to labor shortages. 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 2014 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 government will continue a longstanding debate on restructuring the economy and reining in Japan's huge government debt, which amounts to more than 240% 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 2015, although the government in 2014 decided to postpone the final phase of the increase until 2017 to give the economy time to recover from the 2014 increase. 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

CONNECT HOLDINGS CORP

REGD NAME: Connect Holdings KK

MAIN OFFICE: 2-10-2 Minami-Azabu Minatoku Tokyo 106-0047 JAPAN

Tel: 03-5439-6580 Fax: 03-5439-6581 -

URL: http://www.connect-hd.co.jp

E-Mail address: (thru the URL)

ACTIVITIES

Holding Company

BRANCHES

Nil

CHIEF EXEC

NOBUMI NAGAKURA, PRES

Yen Amount: In million Yen, unless otherwise stated

SUMMARY

FINANCES R/WEAK A/SALES Yen 1,510 M

PAYMENTSNO COMPLAINTS CAPITAL Yen 416 M

TREND UP WORTH Yen 487 M

STARTED 2011 EMPLOYES 37

COMMENT

HOLDING COMPANY

FINANCIAL SITUATION COSIDERED RATHER WEAK BUT SHOULD BE GOOD FOR MODERATE BUSINESS ENGAGEMENTS.

MAX CREDIT LIMIT: YEN 34.2 MILLION, 30 DAYS NORMAL TERMS

Unit: In Million Yen

Forecast figures for the 31/08/2015 fiscal term.

HIGHLIGHTS

This is a Holding Company of SBY Co, and was established by Connect Technologies Corp, listed on the Tokyo S/E, but was delisted on this establishment. SBY is engaged in selling miscellaneous goods for young girls. Started solar power generation business in Nov 2014. Also engaged in the system sales business making contribution to earnings.

FINANCIAL INFORMATION

The sales volume for Aug/2014 fiscal term amounted to Yen 1,510 million, a 3.7% up from Yen 1,456 million in the previous term. The recurring profit was posted at Yen 29 million and the net profit at Yen 11 million, respectively, compared with Yen 27 million recurring profit and Yen 42 million net profit, respectively, a year ago.

For the current term ending Aug 2015 the recurring profit is projected at Yen 60 million and the net profit at Yen 60 million, respectively, on a 25.8% rise in turnover, to Yen 1,900 million.

Newly started solar generation business and the systems sales business will contribute to raise earnings.

(Sept/2014/Feb/2015 results): Sales Yen 643 million (down 13.4%), operating loss Yen 82 million (previously Yen 23 million profit), recurring loss Yen 92 million (previously Yen 13 million profit), net loss Yen 65 million (previously Yen 1 million profit). (% & figures as compared with the corresponding period a year ago).

The financial situation is considered RATHER WEAK but should be good for MODERATE business engagements. Max credit limit is estimated at Yen 34.2 million, on 30 days normal terms.

REGISTRATION

Date Registered:　 Mar 2011

Legal Status: Limited Company (Kabushiki Kaisha

Authorized: 164 million shares

Issued: 55,008,601 shares

Sum: Yen 416 million

Major shareholders (%): Tatsuo Sato (51.3), Mitsuru Yabuki (6.4), Chuzo Takeyama (1.7), Shigeki Nishitani (1.0), Tsukasa Maeda (0.9), other; foreign owners (0.7)

No. of shareholders: 6,403

Listed on the S/Exchange (s) of: Tokyo (Second section)

Managements: Nobumi Nagakura, pres; Taiji Okuda, dir; Toshiyuki Sekimoto, dir; Tatsuo Sato, dir; Wataru Kawakura, dir; Yujiro Yamada, dir; Yoko Nagoshi, dir; Masafumi Kikumoto, dir

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

Related companies: SBY.

OPERATION

Activities: Holding Company: business alliance (61%), concept marketing shops (39%)

Clients: [Mfrs, wholesalers] SBY

No. of accounts: 1 (for distribution nationwide)

Domestic areas of activities: Nationwide

Suppliers: Mfrs, wholesalers, other

Payment record: No Complaints

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

Bank References:

MUFG (Omotesando)

Relations: Satisfactory

FINANCES

(In Million Yen)

FINANCES: (Consolidated in million yen)
		Terms Ending:	31/08/2014		31/08/2013
INCOME STATEMENT
	Annual Sales		1,510		1,456
	Cost of Sales		753		650
	GROSS PROFIT		757		806
	Selling & Adm Costs		721		765
	OPERATING PROFIT		35		40
	Non-Operating P/L		-6		-13
	RECURRING PROFIT		29		27
	NET PROFIT		11		42
BALANCE SHEET
	Cash		70		110
	Receivables		96		78
	Inventory		194		103
	Securities, Marketable
	Other Current Assets		331		92
	TOTAL CURRENT ASSETS		691		383
	Property & Equipment		62		70
	Intangibles		59		80
	Investments, Other Fixed Assets		81		127
	TOTAL ASSETS		893		660
	Payables		92		59
	Short-Term Bank Loans		77		37
	Other Current Liabs		128		112
	TOTAL CURRENT LIABS		297		208
	Debentures
	Long-Term Bank Loans		107		48
	Reserve for Retirement Allw
	Other Debts		1		2
	TOTAL LIABILITIES		405		258
	MINORITY INTERESTS
	Common stock		416		381
	Additional paid-in capital		422		387
	Retained earnings		(356)		(367)
	Evaluation p/l on investments/securities
	Others		5		0
	Treasury stock, at cost
	TOTAL S/HOLDERS` EQUITY		487		401
	TOTAL EQUITIES		893		660
CONSOLIDATED CASH FLOWS
		Terms ending:	31/08/2014		31/08/2013
	Cash Flows from Operating Activities		-15		-17
	Cash Flows from Investment Activities		-208		-68
	Cash Flows from Financing Activities		182		93
	Cash, Bank Deposits at the Term End		68		110
ANALYTICAL RATIOS Terms ending:			31/08/2014		31/08/2013
		Net Worth (S/Holders' Equity)		487	401
		Current Ratio (%)		232.66	184.13
		Net Worth Ratio (%)		54.54	60.76
		Recurring Profit Ratio (%)		1.92	1.85
		Net Profit Ratio (%)		0.73	2.88
		Return On Equity (%)		2.26	10.47

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.63.33
UK Pound	1	Rs.96.52
Euro	1	Rs.68.93

INFORMATION DETAILS

Analysis Done by :	RAS
Report Prepared by :	ANK

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.