MIRA INFORM REPORT

Report Date :

23.11.2012

IDENTIFICATION DETAILS

Name :	EMERSON ELECTRIC [THAILAND] LIMITED
Registered Office :	24 Moo 4, Eastern Seaboard Industrial Estate, T. Pluakdaeng, A. Pluakdaeng, Rayong 21140
Country :	Thailand
Financials (as on) :	30.09.2011
Date of Incorporation :	1991
Com. Reg. No.:	0105534122021 [Former : 12200/2534]
Legal Form :	Private Limited Company
Line of Business :	Manufacturer, Distributor & Exporter of Compressors
No. of Employees :	650

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

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 – June 30^th, 2012

Country Name	Previous Rating (31.03.2011)	Current Rating (30.06.2012)
Thailand	B1	B1

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

thailand - ECONOMIC OVERVIEW

With a well-developed infrastructure, a free-enterprise economy, generally pro-investment policies, and strong export industries, Thailand enjoyed solid growth from 2000 to 2007 - averaging more than 4% per year - as it recovered from the Asian financial crisis of 1997-98. Thai exports - mostly machinery and electronic components, agricultural commodities, and jewelry - continue to drive the economy, accounting for more than half of GDP. The global financial crisis of 2008-09 severely cut Thailand's exports, with most sectors experiencing double-digit drops. In 2009, the economy contracted 2.3%. In 2010, Thailand's economy expanded 7.8%, its fastest pace since 1995, as exports rebounded from their depressed 2009 level. Steady economic growth at just below 4% during the first three quarters of 2011 was interrupted by historic flooding in October and November in the industrial areas north of Bangkok, crippling the manufacturing sector and leading to a revised growth rate of only 0.1% for the year. The industrial sector is poised to recover from the second quarter of 2012 onward, however, and the government anticipates the economy will probably grow between 5.5 and 6.5% for 2012, while private sector forecasts range between 3.8% and 5.7%.

Source : CIA

Company Name

EMERSON ELECTRIC [THAILAND] LIMITED

SUMMARY

BUSINESS ADDRESS : 24 MOO 4, EASTERN SEABOARD INDUSTRIAL ESTATE,

T. PLUAKDAENG, A. PLUAKDAENG,

RAYONG 21140, THAILAND

TELEPHONE : [66] 38 957-000

FAX : [66] 38 957-131

E-MAIL ADDRESS : rachane.m@emerson.com

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 1991

REGISTRATION NO. : 0105534122021 [Former : 12200/2534]

TAX ID NO. : 3011044728

CAPITAL REGISTERED : BHT. 597,500,000

CAPITAL PAID-UP : BHT. 597,500,000

SHAREHOLDER’ PROPORTION : FOREIGN : 100%

FISCAL YEAR CLOSING DATE : SEPTEMBER 30

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. THOMAS ROBERT ZOFKIE, AMERICAN

VICE PRESIDENT & MANAGING DIRECTOR

NO. OF STAFF : 650

LINES OF BUSINESS : COMPRESSORS

MANUFACTURER, DISTRIBUTOR & EXPORTER

CORPORATE PROFILE

OPERATING TREND : STABLE

PRESENT SITUATION : OPERATING NORMALLY

REPUTATION : GOOD WITH NORMAL BUSINESS ENGAGEMENT

MANAGEMENT STANDARD : MANAGEMENT WITH GOOD PERFORMANCE

HISTORY

The subject was established on December 23, 1991 as a private limited company under the registered name Emerson [Thailand] Ltd., by EMR Holdings Inc., U.S.A., in order to produce and export of compressors for air-conditioning and refrigerators. On February 25, 1992 the subject’s name was changed to EMERSON ELECTRIC [THAILAND] LIMITED. It currently employs approximate 650 staff.

Subject is a wholly owned subsidiary of Emerson DHC B.V., Netherlands, which is a member of Emerson Electric Co., the U.S. based and world’s leading supplier of compressors and condensing units for commercial and residential air-conditioning and commercial refrigerate equipment.

The subject was granted an investment promotional privilege from Board of Investment [BOI] for its production.

It achieved the ISO:14001 certification from Underwriters Laboratories Inc., for the environment management on April 17, 2002.

Emerson Group’s Asia regional has its headquarters in Hong Kong and offices in Republic of China, India, Japan, Korea, Indonesia, Malaysia and Singapore.

The subject’s registered address is 24 Moo 4, Eastern Seaboard Industrial Estate,

T. Pluakdaeng, A. Pluakdaeng, Rayong 21140, and this is the subject’s current operation address.

THE BOARD OF DIRECTORS

Name	Nativity	Age
Mrs. Zara Yang Bosko	American	54
Mr. Thomas Robert Zofkie	American	56
Mrs. Vanida Khomna	Thai	47
Ms. Orawan Prateepwatanavit	Thai	47
Mr. Christopher Lee Tucker	American	41
Mr. Ram Rama Krisnan	American	41
Mr. Prakarn Teerapratuengkul	Thai	48

AUTHORIZED PERSON

Two of the above directors can jointly sign on behalf of the subject with company’s affixed.

MANAGEMENT

Mr. Thomas Robert Zofkie is the Vice President and Managing Director.

He is American nationality with the age of 56 years old.

Ms. Orawan Prateepwatanavit is the Financial Controller.

She is Thai nationality with the age of 47 years old.

Mr. Somyoth Miengchom is the Manufacturing Engineering Manager.

He is Thai nationality.

Mrs. Vanida Khomna is the Human Resources Manager.

She is Thai nationality with the age of 47 years old.

Mr. Seksan Komolvilas is the Quality Manager.

He is Thai nationality.

BUSINESS OPERATIONS

The subject’s activity is a manufacturer of wide range of compressors, including hermetic compressor, industrial compressor, scroll compressor, semi-hermetic compressor, and accessories for air-conditioning, refrigerator and other industries. Range of products and brands are as follows:

Types of products are as follows:

1. “Copeland”

- Condensing units, Hermetic Compressors, Scroll Compressors and Semi-Hermeric Compressor.

2. “Emerson”

- AC Drive [building automation]

- Compressor [hermetic compressors, industrial compressors, scroll compressors, semi-hermetic compressors]

- Condensing units [hermetic condensing units, semi-hermetic condensing units, and specialty condensing units]

- Controls [compressor controls, cooling/ refrigeration controls, custom electronic controls, facility controls, furnace controls, hydronic controls, and mechanical controls]

- Electronics-Systems [control link, discus with core sense diagnostics, E2 facility management system, EC3-X32-3, electronic control, EXD-U-00/ iPro DAC, leak detection, power monitoring/ RMS, sensors & transducers, VAV system control, XEV22 superheat control valve driver, XWeb supervisory platform]

3. “Fusite”

- AC & Refrigeration [compressor feedthroughs, power plates, sight glasses]

- Industrial & commercial [sensor feedthroughs, pump feedthroughs, hybrid car compressor seals, initiator components, battery feedthroughs]

- RF/ Microwave [hermetic packages, laser sealing, surface mount, RF/ 50 ohm feedthrus, DC feedthrus, capacitor feedthrus, multi-pin feedthrus].

PRODUCTION

500,000-1,000,000 sets per annum

PURCHASE

80% of raw materials and spare parts are imported from United States of America, Taiwan, Singapore, Republic of China, India, Malaysia, and Japan, the remaining 20% is purchased from local suppliers.

MAJOR SUPPLIERS

U.M.C. Diecasting Co., Ltd. : Thailand

Emerson Electric Co. : United States of America

The Max Value Technology Co., Ltd. : Thailand

S.K. Polymer Co., Ltd. : Thailand

DISTRIBUTION

80% of the products is exported to Emerson Electric Co., in U.S.A., and the remaining 20% is sold locally to refrigerator and air-conditioner manufacturers, such as “SHARP”, “TOSHIBA”, “PANASONIC”, “SANYO”, “MITSUBISHI”, and other brands.

MAJOR CUSTOMERS

Emerson Electric Co. : United States of America

Sanyo Universal Electric Co., Ltd. : Thailand

Mahajak Air Conditioner Co., Ltd. : Thailand

Sang Chai Equipment Co., Ltd. : Thailand

Thai Nair Equipment Supply Co., Ltd. : Thailand

Kulthorn Group : Thailand

PARENT COMPANY

Emerson DHC B.V.

Address : Teleportboulevard 140, 1043 EJ

Amsterdam, The Netherlands

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 credit term of 30-60 days.

Imports are by L/C at sight or T/T on negotiated term.

Exports are against T/T on negotiated term.

BANKING

Kasikornbank Public Co., Ltd.

[Head Office : 1 Kasikorn Lane, Rajburana Rd., Rajburana, Bangkok 10140]

[Rayong Branch : 091 Sukhumvit Rd., Thapradu, Muang, Rayong Province]

Citibank, NA.

[Bangkok Office : 82 North Sathorn Rd., Bangrak, Bangkok 10500]

EMPLOYMENT

The subject employs approximately 650 staff [office staff and factory workers].

LOCATION DETAILS

The premise is owned for administrative office at the heading address on 150,000 square meters of area. Premise is located in industrial area.

Plants are located at the following addresses:

Emerson/Copeland Plant

24 Moo 4, Eastern Seaboard Industrial Estate, T. Pluakdaeng, A. Pluakdaeng, Rayong 21140.

Fusite Plant

500 Moo 7, T. Thatoom, A. Srimahaphote, Prachinburi 25140.

Tel.: [66] 37 629-812, Fax: [66] 37 481-081.

Branch Office [Sales]:

34^th Floor, Nation Tower, 1858/133 Bangna-Trad Rd., Bangna, Bangkok 10260.

Tel : [66] 2716-4700, Fax : [66] 2751-4240-1.

COMMENT

The subject is one of the leading manufacturers and exporters of compressor for cooling systems. A recipient of continuous compressor technology innovation, has enabled its manufacturing to produce wide range of world-standard compressors for diverse needs of its global customers.

The subject is one of the major exporters of technological advanced scroll air-conditioning compressors to world market. With its high production efficiency has resulted in improved competitiveness and customer satisfaction for both the local and international markets.

Its business has significantly grown and continued to keep abreast of customers needs to maintain its leading position in the industry. Subject maintains a solid business.

FINANCIAL INFORMATION

The capital was registered at Bht. 2,500,000 divided into 100,000 shares of Bht. 25 each.

The capital was increased later as followings:

Bht. 175,000,000 on February 14, 1996

Bht. 177,500,000 on March 26, 1996

Bht. 597,500,000 on December 22, 1999

The latest registered capital was increased to Bht. 597,500,000 divided into 23,900,000 shares of Bht. 25 each with fully paid.

THE SHAREHOLDERS LISTED WERE

[as at January 27, 2012]

NAME	HOLDING	%
Emerson DHC B.V. Nationality: Dutch Address : Teleport Boulevard 140, 1043 EJ Amsterdam, The Netherlands	23,899,994	100.00
Emerson Sub 11 LLC Nationality: American Address : 8000 West Florissant Avenue, St. Louis, Missouri 63136, U.S.A.	1	-
Emerson Sub 12 LLC Nationality: American Address : 8000 West Florissant Avenue, St. Louis, Missouri 63136, U.S.A	1	-
Emerson Sub 10 LLC Nationality: American Address : 8000 West Florissant Avenue, St. Louis, Missouri 63136 , U.S.A	1	-
Emerson Sub 7 LLC Nationality: American Address : 8000 West Florissant Avenue, St. Louis, Missouri 63136, U.S.A	1	-
Emerson Sub 9 LLC Nationality: American Address : 8000 West Florissant Avenue, St. Louis, Missouri 63136, U.S.A	1	-
Emerson Sub 8 LLC Nationality: American Address : 8000 West Florissant Avenue, St. Louis, Missouri 63136, U.S.A	1	-

Total Shareholders : 7

Share Structure

[as at January 27, 2012]

Nationality	Shareholders	No. of Share	% Shares
Thai	-	-	-
Foreign	7	23,900,000	100.00
Total	7	23,900,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO.

Ms. Ranchapawee Daengnoi No. 9013

BALANCE SHEET [BAHT]

The latest financial figures published for September 30, 2011 & 2010 were:

ASSETS

Current Assets	2011	2010
Cash in Hand & at Bank	568,637,816	405,161,018
Trade Accounts Receivable	1,176,181,419	1,129,576,505
Other Receivable - Related Company	319,953,498	58,555,421
Inventories	503,543,692	474,906,051
Assets available for Sale	-	308,385,451
Other Current Assets	76,947,006	60,910,074
Total Current Assets	2,645,263,431	2,437,494,520
Fixed Assets	1,394,200,062	1,350,622,962
Other Assets	1,203,775	2,631,348
Total Assets	4,040,667,268	3,790,748,830

LIABILITIES & SHAREHOLDERS' EQUITY [BAHT]

Current Liabilities	2011	2010
Trade Accounts Payable	1,277,204,382	1,099,834,707
Other Payable - Related Company	249,262,381	251,607,599
Accrued Income Tax	261,103,213	141,085,102
Discount after Accrued Expenses	132,707,560	84,248,247
Reserve for Goods Warranty	25,633,440	26,853,096
Other Current Liabilities	254,665,085	190,244,625
Total Current Liabilities	2,200,576,061	1,793,873,376
Total Liabilities	2,200,576,061	1,793,873,376
Shareholders' Equity
Share capital : Baht 25 par value authorized, issued and fully paid share capital 23,900,000 shares	597,500,000	597,500,000
Capital Paid	597,500,000	597,500,000
Retained Earning Appropriated for Statutory Reserve	59,750,000	59,750,000
Unappropriated	1,182,841,207	1,339,625,454
Total Shareholders' Equity	1,840,091,207	1,996,875,454
Total Liabilities & Shareholders' Equity	4,040,667,268	3,790,748,830

PROFIT & LOSS ACCOUNT

Revenue	2011	2010
Sales	9,508,297,396	8,857,751,615
Gain on Exchange Rate	35,017,209	-
Other Income	36,941,300	31,012,278
Total Revenues	9,580,255,905	8,888,763,893
Expenses
Cost of Goods Sold	6,612,267,087	5,870,736,004
Selling Expenses	503,622,330	447,765,742
Administrative Expenses	148,089,328	121,833,826
Loss on Exchange Rate	-	148,136,304
Total Expenses	7,263,978,745	6,588,471,876
Profit / [Loss] before Income Tax	2,316,277,160	2,300,292,017
Income Tax	[495,061,407]	[246,074,325]
Net Profit / [Loss]	1,821,215,753	2,054,217,692

FINANCIAL ANALYSIS

ITEM	UNIT	2011	2010
LIQUIDITY RATIO
CURRENT RATIO	TIMES	1.20	1.36
QUICK RATIO	TIMES	0.94	0.89
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	6.82	6.56
TOTAL ASSETS TURNOVER	TIMES	2.35	2.34
INVENTORY CONVERSION PERIOD	DAYS	27.80	29.53
INVENTORY TURNOVER	TIMES	13.13	12.36
RECEIVABLES CONVERSION PERIOD	DAYS	45.15	46.55
RECEIVABLES TURNOVER	TIMES	8.08	7.84
PAYABLES CONVERSION PERIOD	DAYS	70.50	68.38
CASH CONVERSION CYCLE	DAYS	2.44	7.69
PROFITABILITY RATIO
COST OF GOODS SOLD	%	69.54	66.28
SELLING & ADMINISTRATION	%	6.85	6.43
INTEREST	%	-	-
GROSS PROFIT MARGIN	%	31.21	34.07
NET PROFIT MARGIN BEFORE EX. ITEM	%	24.36	25.97
NET PROFIT MARGIN	%	19.15	23.19
RETURN ON EQUITY	%	98.97	102.87
RETURN ON ASSET	%	45.07	54.19
EARNING PER SHARE	BAHT	76.20	85.95
LEVERAGE RATIO
DEBT RATIO	TIMES	0.54	0.47
DEBT TO EQUITY RATIO	TIMES	1.20	0.90
TIME INTEREST EARNED	TIMES	-	-
ANNUAL GROWTH
SALES GROWTH	%	7.34
OPERATING PROFIT	%	0.69
NET PROFIT	%	(11.34)
FIXED ASSETS	%	3.23
TOTAL ASSETS	%	6.59

PROFITABILITY RATIO

Gross Profit Margin	31.21	Impressive	Industrial Average	10.26
Net Profit Margin	19.15	Impressive	Industrial Average	3.10
Return on Assets	45.07	Impressive	Industrial Average	8.27
Return on Equity	98.97	Impressive	Industrial Average	18.13

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 31.21%. When compared with the industry average, the ratio of the company was higher, this indicated that company was more profitable than the same industry.

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 19.15%, higher figure when compared with those of its average competitors in the same industry, indicated that business was an efficient operator in a dominant position within its industry.

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. Return on Assets ratio is 45.07%, higher figure when compared with those of its average competitors in the same industry, indicated that business was an efficient profit in a dominant position within its industry.

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. Return on Equity ratio is 98.97%, higher figure when compared with those of its average competitors in the same industry, indicated that business was an efficient profit in a dominant position within its industry.

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	1.20	Acceptable	Industrial Average	1.70
Quick Ratio	0.94
Cash Conversion Cycle	2.44

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 1.2 times in 2011, decreased from 1.36 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 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 0.94 times in 2011, increased from 0.89 times, by excluding inventory, the company may have problems meeting current liabilities.

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 3 days.

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

Current Ratio Uptrend

LEVERAGE RATIO

Debt Ratio	0.54	Acceptable	Industrial Average	0.46
Debt to Equity Ratio	1.20	Risky	Industrial Average	0.94
Times Interest Earned	-		Industrial Average	11.69

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.

Debt Ratio shows the proportion of a company's assets which are financed through debt. The company's figure is 0.54 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	6.82	Acceptable	Industrial Average	10.38
Total Assets Turnover	2.35	Satisfactory	Industrial Average	2.76
Inventory Conversion Period	27.80
Inventory Turnover	13.13	Impressive	Industrial Average	9.62
Receivables Conversion Period	45.15
Receivables Turnover	8.08	Impressive	Industrial Average	6.60
Payables Conversion Period	70.50

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

Fixed Assets Turnover Uptrend

Total Assets Turnover Uptrend

Inventory Turnover Uptrend

Receivables Turnover Uptrend

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.55.16
UK Pound	1	Rs.88.03
Euro	1	Rs.70.86

INFORMATION DETAILS

Report Prepared by :

SDA

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.