MIRA INFORM REPORT

Report Date :

07.12.2011

IDENTIFICATION DETAILS

Name :	CHALONG LATEX INDUSTRY CO., LTD.
Registered Office :	75/1 Moo 8, Chana-Nongjik Road, Banna, Chana, Songkhla 90130
Country :	Thailand
Financials (as on) :	31.12.2010
Date of Incorporation :	18.06.1986
Com. Reg. No.:	0905529000322
Legal Form :	Private Limited Company
Line of Business :	Manufacturer, Exporter And Distributor of Natural Rubber And Latex Products
No. of Employees :	120

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 – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
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 and address

CHALONG LATEX INDUSTRY CO., LTD.

SUMMARY

BUSINESS ADDRESS : 75/1 MOO 8, CHANA-NONGJIK ROAD, BANNA,

CHANA, SONGKHLA 90130

TELEPHONE : [66] 74 207-656-9

FAX : [66] 74 207-655

E-MAIL ADDRESS : clitex@loxinfo.co.th

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 1986

REGISTRATION NO. : 0905529000322

CAPITAL REGISTERED : BHT. 70,000,000

CAPITAL PAID-UP : BHT. 70,000,000

SHAREHOLDER’S PROPORTION : THAI : 100%

FISCAL YEAR CLOSING DATE : DECEMBER 31

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. CHALONG TECHAPATRAKUL, THAI

MANAGING DIRECTOR

NO. OF STAFF : 120

LINES OF BUSINESS : NATURAL RUBBER AND LATEX PRODUCTS

MANUFACTURER, EXPORTER AND DISTRIBUTOR

CORPORATE PROFILE

OPERATING TREND : STABLE

PRESENT SITUATION : OPERATING NORMALLY

REPUTATION : GOOD WITH NORMAL BUSINESS ENGAGEMENT

MANAGEMENT STANDARD : MANAGEMENT WITH LOW PERFORMANCE

HISTORY

The subject was established on June 18, 1986 as a private limited company under the registered name CHALONG LATEX INDUSTRY CO., LTD., by Thai groups, with the business objective to manufacture natural rubber and latex products for both export and domestic markets, with BOI promoted by Board Of Investment [BOI]. It currently employs approximate 120 staff.

The subject’s registered address is 75/1 Moo 8, Chana-Nongjik Rd., Banna, Chana, Songkhla 90130, and this is the subject’s current operation address.

THE BOARD OF DIRECTOR

Name		Nationality	Age
Mr. Chalong Techapatrakul	[x]	Thai	67
Mrs. Ladawan Techapatrakul	[x]	Thai	68
Mr. Apichart Techapatrakul	[x]	Thai	38
Mr. Chaiyuth Techapatrakul		Thai	33
Mrs. Kobkul Suthamprachak		Thai	52
Mr. Prayoon Suthamprachak	[x]	Thai	63

AUTHORIZED PERSON

Any two of the mentioned directors [x] can jointly sign on behalf of the subject with company’s affixed.

MANAGEMENT

Mr. Chalong Techapatrakul is the Managing Director.

He is Thai nationality with the age of 67 years old.

Mrs. Ladawan Techapatrakul is the Deputy Managing Director.

She is Thai nationality with the age of 68 years old.

Mr. Apichart Techapatrakul is the Sales & Marketing Manager.

He is Thai nationality with the age of 38 years old.

BUSINESS OPERATIONS

The subject is engaged in manufacturing, exporting and distributing natural rubber products, especially STR products, such as STR 5CV50, STR 5CV60, STR 5L, STR XL, and skim block, with the production capacity of 18,000 tons per annum,

as well as natural latex concentrated, comprising centrifuged latex high ammonia 60% DRC, centrifuged latex medium ammonia 60% DRC and centrifuged latex low ammonium 60% DRC, with the production capacity of 30,000 tons per annum.

The products are supplied to various industries, such as rubber products, industrial gloves, shoe sole, furniture, automobile parts industries and etc.

PURCHASE

100% of natural latex and chemical are purchased from local planters and suppliers.

SALES

90% of the products is exported to Indonesia, Republic of China, Hong Kong, Singapore, U.S.A., Japan, and the countries in Middle East and Europe, the remaining 10% is sold locally.

SUBSIDIARY AND AFFILIATED COMPANY

The subject is not found to have any subsidiary or affiliated company here in Thailand.

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.

Exports are against L/C or T/T.

BANKING

Bangkok Bank Public Co., Ltd.

EMPLOYMENT

The subject employs approximately 120 staff.

LOCATION DETAILS

The premise is owned for administrative office and factory on 320,000 square meters of land at the heading address. Premise is located in provincial, in the Southern region.

REMARK

MAXIMUM CREDIT SHOULD BE GRANTED AT US$ 300,000.

COMMENT

Subject is a manufacturer, distributor and exporter of rubber and latex products. The products are for industrial users. In 2010, subject was found an outstanding increased of sales revenue compared to the previous year’s level because of expansion of industrial productions. However, the cost of goods sold and selling expenses have risen significantly which resulted in the subject’s net loss at the end of year.

However in 2011 overall industrial conditions had subsequently improved in the first nine months, but massive floods has caused fragility to major industries and led to significantly drop demand of rubber in October and November.

FINANCIAL INFORMATION

The capital was registered at Bht. 2,000,000 divided into 200 shares of Bht. 10,000 each with fully paid.

The capital was increased later as follows:

Bht. 10,000,000 on June 3, 1987

Bht. 20,000,000 on October 12, 1994

Bht. 40,000,000 on July 29, 2004

Bht. 50,000,000 on October 3, 2007

Bht. 70,000,000 on March 30, 2010

The latest registered capital was increased to Bht. 70 million, divided into 7,000 shares of Bht. 10,000 each with fully paid.

THE SHAREHOLDERS LISTED WERE

[as at April 30, 2011]

NAME	HOLDING	%
Mrs. Ladawan Techapatrakul Nationality: Thai Address : 22 Moo 2, Banna, Chana, Songkhla	2,895	41.36
Mr. Chalong Techapatrakul Nationality: Thai Address : 22 Moo 2, Banna, Chana, Songkhla	2,700	38.57
Mr. Apichart Techapatrakul Nationality: Thai Address : 76 Moo 8,, Banna, Chana, Songkhla	770	11.00
Mr. Chaiyuth Techapatrakul Nationality: Thai Address : 75/1 Moo 8, Banna, Chana, Songkhla	608	8.69
Mr. Kasem Techapatrakul Nationality: Thai Address : 59/2 Moo 3, Banna, Chana, Songkhla	10	0.14
Mr. Prayoon Suthamprachak Nationality: Thai Address : 32 Srinil 1 Rd., Hadyai, Songkhla	10	0.14
Mrs. Kobkul Suthamprachak Nationality: Thai Address : 2 Yala Rd., Sataeng, Yala	7	0.10

Total Shareholders : 7

Share Structure [as at April 30, 2011]

Nationality	Shareholders	No. of Share	% Shares
Thai	7	7,000	100.00
Foreign	-	-	-
Total	7	7,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO.

Ms. Somkaew Runglertkriengkrai No. 2715

BALANCE SHEET [BAHT]

The latest financial figures published for December 31, 2010 & 2009 were:

ASSETS

Current Assets	2010	2009
Cash and Cash Equivalent	40,070,003.61	14,462,437.06
Investment - Fixed Account	13,575,325.30	12,003,384.41
Trade Accounts Receivable	93,608,001.50	143,778,086.90
Inventories	99,008,676.85	107,973,008.38
Other Current Assets	2,128,419.78	10,249,805.88
Total Current Assets	248,390,427.04	288,466,722.63
Long-term Investment	1,200,000.00	1,200,000.00
Fixed Assets	151,510,780.19	153,928,916.78
Other Assets	4,300,187.80	4,184,836.71
Total Assets	405,401,395.03	447,780,476.12

LIABILITIES & SHAREHOLDERS’ EQUITY [BAHT]

Current Liabilities	2010	2009
Bank Overdraft & Short-term Loan from Financial Institution	254,750,000.00	311,751,776.12
Trade Accounts Payable	6,371,355.82	34,592,015.45
Short-term Loan from Related Company	-	7,000,000.00
Other Current Liabilities	6,653,977.72	7,360,647.78
Total Current Liabilities	267,775,333.54	360,704,439.35
Long-term Loan from Financial Institution	85,782,525.10	30,400,400.00
Total Liabilities	353,557,858.64	391,104,839.35
Shareholders’ Equity
Share capital : Baht 100 par value authorized, issued and fully paid share capital 7,000 & 5,000 shares in 2010 & 2009 respectively	70,000,000.00	50,000,000.00
Capital Paid	70,000,000.00	50,000,000.00
Retained Earning : Appropriated for Statutory Reserve	4,000,000.00	4,000,000.00
Unappropriated	[22,156,463.61]	2,675,636.77
Total Shareholders' Equity	51,843,536.39	56,675,636.77
Total Liabilities & Shareholders' Equity	405,401,395.03	447,780,476.12

PROFIT & LOSS ACCOUNT

Revenue	2010	2009
Sales Income	2,051,035,919.96	1,350,211,938.27
Other Income	4,133,567.86	5,525,738.11
Total Revenues	2,055,169,487.82	1,355,737,676.38
Expenses
Cost of Goods Sold	1,970,049,895.29	1,250,257,662.10
Selling Expenses	74,552,831.90	73,316,390.19
Administrative Expenses	19,994,233.46	18,303,850.46
Total Expenses	2,064,596,960.65	1,341,877,902.75
Profit before Financial Cost	[9,427,472.83]	13,859,773.63
Financial Cost	[15,404,627.55]	[12,953,902.23]
Net Profit / [Loss]	[24,832,100.38]	905,871.40

FINANCIAL ANALYSIS

ITEM	UNIT	2010	2009
LIQUIDITY RATIO
CURRENT RATIO	TIMES	0.93	0.80
QUICK RATIO	TIMES	0.55	0.47
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	13.54	8.77
TOTAL ASSETS TURNOVER	TIMES	5.06	3.02
INVENTORY CONVERSION PERIOD	DAYS	18.34	31.52
INVENTORY TURNOVER	TIMES	19.90	11.58
RECEIVABLES CONVERSION PERIOD	DAYS	16.66	38.87
RECEIVABLES TURNOVER	TIMES	21.91	9.39
PAYABLES CONVERSION PERIOD	DAYS	1.18	10.10
CASH CONVERSION CYCLE	DAYS	33.82	60.29
PROFITABILITY RATIO
COST OF GOODS SOLD	%	96.05	92.60
SELLING & ADMINISTRATION	%	4.61	6.79
INTEREST	%	0.75	0.96
GROSS PROFIT MARGIN	%	4.15	7.81
NET PROFIT MARGIN BEFORE EX. ITEM	%	(0.46)	1.03
NET PROFIT MARGIN	%	(1.21)	0.07
RETURN ON EQUITY	%	(47.90)	1.60
RETURN ON ASSET	%	(6.13)	0.20
EARNING PER SHARE	BAHT	(35.47)	1.81
LEVERAGE RATIO
DEBT RATIO	TIMES	0.87	0.87
DEBT TO EQUITY RATIO	TIMES	6.82	6.90
TIME INTEREST EARNED	TIMES	(0.61)	1.07
ANNUAL GROWTH
SALES GROWTH	%	51.90
OPERATING PROFIT	%	(168.02)
NET PROFIT	%	(2,841.24)
FIXED ASSETS	%	(1.57)
TOTAL ASSETS	%	(9.46)

PROFITABILITY RATIO

Gross Profit Margin	4.15	Acceptable	Industrial Average	5.71
Net Profit Margin	(1.21)	Deteriorated	Industrial Average	0.90
Return on Assets	(6.13)	Deteriorated	Industrial Average	3.33
Return on Equity	(47.90)	Deteriorated	Industrial Average	11.37

Gross Profit Margin used to assess a firm's financial health by revealing the proportion of money left over from revenues 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 4.15%. When compared with the industry average, the ratio of the company was lower, 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 -1.21%. 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 -6.13%.

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 -47.9%.

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	0.93	Risky	Industrial Average	1.09
Quick Ratio	0.55
Cash Conversion Cycle	33.82

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 0.93 times in 2010, decreased from 0.8 times, then the company may have problems meeting its short-term obligations. When compared with the industry average, the ratio of the company was lower.

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 0.55 times in 2010, increased from 0.47 times, then the company has not enough current assets that presumably can be quickly converted to cash for pay financial obligations.

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 34 days.

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

Current Ratio Uptrend

LEVERAGE RATIO

Debt Ratio	0.87	Acceptable	Industrial Average	0.71
Debt to Equity Ratio	6.82	Risky	Industrial Average	2.37
Times Interest Earned	(0.61)	Risky	Industrial Average	1.92

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 -0.62 lower than 1, so the company is not generating enough cash from EBIT to meet its interest obligations.

Debt Ratio shows the proportion of a company's assets which are financed through debt. The company's figure is 0.87 greater than 0.5, most of the company's assets are financed through debt.

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

Debt Ratio Downtrend

Times Interest Earned Uptrend

ACTIVITY RATIO

Fixed Assets Turnover	13.54	Impressive	Industrial Average	9.79
Total Assets Turnover	5.06	Impressive	Industrial Average	3.25
Inventory Conversion Period	18.34
Inventory Turnover	19.90	Impressive	Industrial Average	6.17
Receivables Conversion Period	16.66
Receivables Turnover	21.91	Impressive	Industrial Average	9.41
Payables Conversion Period	1.18

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.51.45
UK Pound	1	Rs.80.38
Euro	1	Rs.69.12

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.