MIRA INFORM REPORT

Report Date :

21.04.2011

IDENTIFICATION DETAILS

Name :	TOP LEATHER BAGS LIMITED PARTNERSHIP
Registered Office :	107/19-21 Pracharaj Sai 1 Road, Bangsue, Bangkok 10800
Country :	Thailand
Financials (as on) :	31.12.2009
Date of Incorporation :	26.03.1986
Com. Reg. No.:	0103529007471
Legal Form :	Limited Partnership
Line of Business :	manufacturer and contractor of leather goods

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate
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, 2010

Country Name	Previous Rating (30.09.2010)	Current Rating (31.12.2010)
Thailand	b1	b1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

Company name

TOP LEATHER BAGS LIMITED PARTNERSHIP

SUMMARY

BUSINESS ADDRESS : 107/19-21 PRACHARAJ SAI 1 ROAD,

BANGSUE, BANGKOK 10800

TELEPHONE : [66] 2586-9941-6

FAX : [66] 2912-5125

E-MAIL ADDRESS : marwell@thailand.com

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 1986

REGISTRATION NO. : 0103529007471 [Former : 747/2529]

CAPITAL REGISTERED : BHT. 20,000,000

CAPITAL PAID-UP : BHT. 20,000,000

FISCAL YEAR CLOSING DATE : DECEMBER 31

LEGAL STATUS : LIMITED PARTNERSHIP

EXECUTIVE : MR. NIWAT KIRANANTHAWAT, THAI

MANAGING PARTNER

NO. OF STAFF : 96

LINES OF BUSINESS : LEATHER GOODS

MANUFACTURER AND CONTRACTOR

CORPORATE PROFILE

OPERATING TREND : STABLE

PRESENT SITUATION : OPERATING NORMALLY

REPUTATION : GOOD WITH NORMAL BUSINESS ENGAGEMENT

MANAGEMENT STANDARD : MANAGEMENT WITH FAIR PERFORMANCE

HISTORY

The subject was established on March 26, 1986 as a limited partnership under the name style TOP LEATHER BAGS LIMITED PARTNERSHIP, by Mr. Niwat and Mrs. Teeraporn Kirananthawat, the Thai partners, in order to manufacture and service wide range of leather goods to both domestic and international markets. It currently employs 96 staff.

The subject’s registered address is 107/19-21 Pracharaj Sai 1 Rd., Bangsue, Bangkok 10800, and this is the subject’s current operation address.

THE BOARD AUTHORIZED PERSON

Mr. Niwat Kirananthawat can sign on behalf of the subject with seal affixed. He also bears full financial responsibility by law.

MANAGEMENT

Mr. Niwat Kirananthawat is the Managing Partner.

He is Thai nationality with the age of 55 years old.

Mr. Marut Danaidusdeekul is the Assistant Manager.

He is Thai nationality.

BUSINESS OPERATIONS

The subject is engaged in manufacturing and servicing wide range of leather goods items such as handbags, purses, wallets, belts, briefcases, key holders and etc., according to customer’s requirement.

MAJOR BRANDS

“MARWELL”, “MAYFINE”, “FENNELI” and “KARREN”

PURCHASE

Most of raw materials and accessories are purchased from local suppliers. The remaining is imported from Japan, Republic of China, Germany, France, Taiwan and India.

SALES/SERVICES

The products are sold and serviced by wholesale to both domestic and overseas customers such as Japan, Australia, France, Singapore, Hong Kong and Middle East countries.

MAJOR CUSTOMER

Top Ten Trading Group Co., Ltd. : Thailand

RELATED AND AFFILIATED COMPANY

Top Ten Trading Group Co., Ltd.

Business Type : Manufacturer and distributor of leather goods under the brands

“MARWELL”, “MAYFINE”, “FENNELI” and “KARREN”

LITIGATION

Bankruptcy and Receivership

There are no litigation on bankruptcy and receivership cases filed against the subject found at Legal Execution Department for the past five years.

Others

There are no legal suits filed against the subject for the past two years.

CREDIT

Sales are by cash or on the credits term of 30-60 days.

Local bills are paid by cash or on the credits term of 30-60 days.

Imports are by L/C at sight or T/T.

Exports are against L/C or T/T.

BANKING

Bangkok Bank Public Co., Ltd.

EMPLOYMENT

The subject employs 96 office staff and factory workers.

LOCATION DETAILS

The premise is owned for administrative office, factory and warehouse at the heading address. Premise is located in commercial/residential area.

REMARK

THE CREDIT OF US$ 125,000 AGAINST D/A TERMS SHOULD BE IN ORDER.

COMMENT

The subject is a manufacturing contract of leather goods for various brands. The current economic growth has potential for leather products, as well as consumption is also rising well. Though the subject’s sales revenue in 2009 was decreased comparing the previous year, but the subject managed to obtain net profit at the end of year. Generally, market demand from both domestic and exports is still positive.

FINANCIAL INFORMATION

The capital was registered at Bht. 20,000,000 which was carried by 2 persons as followed:

Name Age Amount

Mr. Niwat Kirananthawat [55] Bht. 10,000,000 [unlimited partner]

Mrs. Teeraporn Kirananthawat [59] Bht. 10,000,000

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO. :

Mr. Kanchit Pruthichai No. 3888

BALANCE SHEET [BAHT]

The latest financial figures published for December 31, 2009 & 2008 were:

ASSETS

Current Assets	2009	2008
Cash and Cash Equivalent	5,018.25	831,329.22
Trade Accounts Receivable	21,268,115.85	17,519,795.02
Inventories	8,260,350.44	9,709,634.01
Other Current Assets	1,494,267.60	362,478.49
Total Current Assets	31,027,752.14	28,423,236.74
Fixed Assets	8,821,731.81	10,099,836.89
Other Assets	217,980.00	327,780.00
Total Assets	40,067,463.95	38,850,853.63

LIABILITIES & SHAREHOLDERS’ EQUITY [BAHT]

Current Liabilities	2009	2008
Bank Overdraft	446,124.49	726,573.66
Trade Accounts Payable	4,461,452.86	3,761,801.39
Short-term Loan Partner	6,437,308.52	6,437,308.52
Other Current Liabilities	1,115,733.50	1,265,530.63
Total Current Liabilities	12,460,619.37	12,191,214.20
Total Liabilities	12,460,619.37	12,191,214.20
Shareholders’ Equity
Capital Paid	20,000,000.00	20,000,000.00
Retained Earning- Unappropriated	7,606,844.58	6,659,639.43
Total Shareholders' Equity	27,606,844.58	26,659,639.43
Total Liabilities & Shareholders' Equity	40,067,463.95	38,850,853.63

PROFIT & LOSS ACCOUNT

Sale	2009	2008
Sales Income	70,961,958.20	80,423,370.68
Other Income	96,092.00	96,116.66
Total Sale s	71,058,050.20	80,519,487.34
Expenses
Cost of Goods Sold	65,616,492.54	75,163,856.64
Selling Expenses	1,082,788.52	-
Administrative Expenses	2,865,745.02	3,961,942.70
Other Expenses	51,736.10	-
Total Expenses	69,616,762.18	79,125,799.34
Profit before Financial Cost & Income Tax	1,441,288.02	1,393,688.00
Financial Cost	[19,616.79]	[20,015.36]
Profit / [Loss] before Income Tax	1,421,671.23	1,373,672.64
Income Tax	[474,466.08]	[495,845.15]
Net Profit / [Loss]	947,205.15	877,827.49

FINANCIAL ANALYSIS

ITEM	UNIT	2009	2008
LIQUIDITY RATIO
CURRENT RATIO	TIMES	2.49	2.33
QUICK RATIO	TIMES	1.71	1.51
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	8.04	7.96
TOTAL ASSETS TURNOVER	TIMES	1.77	2.07
INVENTORY CONVERSION PERIOD	DAYS	45.95	47.15
INVENTORY TURNOVER	TIMES	7.94	7.74
RECEIVABLES CONVERSION PERIOD	DAYS	109.39	79.51
RECEIVABLES TURNOVER	TIMES	3.34	4.59
PAYABLES CONVERSION PERIOD	DAYS	24.82	18.27
CASH CONVERSION CYCLE	DAYS	130.53	108.40
PROFITABILITY RATIO
COST OF GOODS SOLD	%	92.47	93.46
SELLING & ADMINISTRATION	%	5.56	4.93
INTEREST	%	0.03	0.02
GROSS PROFIT MARGIN	%	7.67	6.66
NET PROFIT MARGIN BEFORE EX. ITEM	%	2.03	1.73
NET PROFIT MARGIN	%	1.33	1.09
RETURN ON EQUITY	%	3.43	3.29
RETURN ON ASSET	%	2.36	2.26
EARNING PER SHARE	BAHT	#DIV/0!	#DIV/0!
LEVERAGE RATIO
DEBT RATIO	TIMES	0.31	0.31
DEBT TO EQUITY RATIO	TIMES	0.45	0.46
TIME INTEREST EARNED	TIMES	73.47	69.63
ANNUAL GROWTH
SALES GROWTH	%	(11.76)
OPERATING PROFIT	%	3.42
NET PROFIT	%	7.90
FIXED ASSETS	%	(12.65)
TOTAL ASSETS	%	3.13

PROFITABILITY RATIO

Gross Profit Margin	7.67	Acceptable	Industrial Average	13.99
Net Profit Margin	1.33	Acceptable	Industrial Average	1.93
Return on Assets	2.36	Satisfactory	Industrial Average	3.00
Return on Equity	3.43	Deteriorated	Industrial Average	7.33

Gross Profit Margin used to assess a firm's financial health by revealing the proportion of money left over from sale s after accounting for the cost of goods sold. Gross profit margin serves as the source for paying additional expenses and future savings. The company's figure is 7.67%. When compared with the industry average, the ratio of the company was lower. This indicated that company was originated from the problems with control over its costs.

Net Profit Margin is the indicator of the company's efficiency in that net profit takes into consideration all expenses of the company. A low profit margin indicates a low margin of safety, higher risk that a decline in sales will erase profits and result in a net loss. The company's figure is 1.33%. When compared with the industry average, the ratio of the company was lower.

Return on Assets measures how efficiently profits are being generated from the assets employed in the business when compared with the ratios of firms in a similar business. A low ratio in comparison with industry averages indicates an inefficient use of business assets. When compared with the industry average, it was lower, the company's figure is 2.36%.

Return on Equity indicates how profitable a company is by comparing its net income to its average shareholders' equity, ROE measures how much the shareholders earned for their investment in the company. When compared with the industry average, it was lower, the company's figure is 3.43%.

Trend of the average competitors in the same industry for last 5 years

Return on Assets Uptrend

Return on Equity Uptrend

LIQUIDITY RATIO

Current Ratio	2.49	Impressive	Industrial Average	1.23
Quick Ratio	1.71
Cash Conversion Cycle	130.53

The Current Ratio is to ascertain whether a company's short-term assets are readily available to pay off its short-term liabilities. The company's figure is 2.49 times in 2009, increase from 2.33 times, then it is generally considered to have good short-term financial strength. When compared with the industry average, the ratio of the company was higher, indicated that company was an efficient operator in a dominant position within its industry.

The Quick Ratio is a liquidity indicator that further refines the current ratio by measuring the amount of the most liquid current assets there are to cover current liabilities. The company's figure is 1.71 times in 2009, increase from 1.51 times, although excluding inventory so the company still have good short-term financial strength.

The Cash Conversion Cycle measures the number of days a company's cash is tied up in the production and sales process of its operations and the benefit from payment terms from its creditors. It meant the company could survive when no cash inflow was received from sale for 131 days.

Trend of the average competitors in the same industry for last 5 years

Current Ratio Downtrend

LEVERAGE RATIO

Debt Ratio	0.31	Impressive	Industrial Average	0.59
Debt to Equity Ratio	0.45	Impressive	Industrial Average	1.38
Times Interest Earned	73.47	Impressive	Industrial Average	2.87

Debt to Equity Ratio a measurement of how much suppliers, lenders, creditors and obligors have committed to the company versus what the shareholders have committed. A lower the percentage means that the company is using less leverage and has a stronger equity position.

Times Interest Earned measuring a company's ability to meet its debt obligations. Ratio is 73.48 higher than 1, so the company can pay interest expenses on outstanding debt.

Debt Ratio shows the proportion of a company's assets which are financed through debt. The company's figure is 0.31 less than 0.5, most of the company's assets are financed through equity.

Trend of the average competitors in the same industry for last 5 years

Debt Ratio Downtrend

Times Interest Earned Downtrend

ACTIVITY RATIO

Fixed Assets Turnover	8.04	Impressive	Industrial Average	4.28
Total Assets Turnover	1.77	Impressive	Industrial Average	1.55
Inventory Conversion Period	45.95
Inventory Turnover	7.94	Impressive	Industrial Average	4.16
Receivables Conversion Period	109.39
Receivables Turnover	3.34	Satisfactory	Industrial Average	4.02
Payables Conversion Period	24.82

Trend of the average competitors in the same industry for last 5 years

Fixed Assets Turnover Downtrend

Total Assets Turnover Downtrend

Inventory Turnover Downtrend

Receivables Turnover Downtrend

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.38
UK Pound	1	Rs.72.56
Euro	1	Rs.63.92

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

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%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.