MIRA INFORM REPORT

Report Date :

08.07.2013

IDENTIFICATION DETAILS

Name :	MERRY COSMETIC LABORATORIES CO., LTD.
Registered Office :	124/16 Moo 11, T. Omnoi, A. Krathumban, Samutsakorn 74000
Country :	Thailand
Financials (as on) :	31.12.2011
Date of Incorporation :	13.01.2010
Com. Reg. No.:	0105553005115
Legal Form :	Private Limited Company
Line of Business :	Contracted Manufacturer of Cosmetic Products
No. of Employees :	80

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 – March, 31^st, 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
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 achieved steady growth due largely to industrial and agriculture exports - mostly electronics, agricultural commodities, automobiles and parts, and processed foods. Thailand is trying to maintain growth by encouraging domestic consumption and public investment to offset weak exports in 2012. Unemployment, at less than 1% of the labor force, stands as one of the lowest levels in the world, which puts upward pressure on wages in some industries. Thailand also attracts nearly 2.5 million migrant workers from neighboring countries. The Thai government is implementing a nation-wide 300 baht ($10) per day minimum wage policy and deploying new tax reforms designed to lower rates on middle-income earners. The Thai economy has weathered internal and external economic shocks in recent years. The global economic severely cut Thailand's exports, with most sectors experiencing double-digit drops. In 2009, the economy contracted 2.3%. However, in 2010, Thailand's economy expanded 7.8%, its fastest pace since 1995, as exports rebounded. In late 2011 growth was interrupted by historic flooding in the industrial areas in Bangkok and its five surrounding provinces, crippling the manufacturing sector. Industry recovered from the second quarter of 2012 onward with GDP growth at 5.5% in 2012. The government has approved flood mitigation projects worth $11.7 billion, which were started in 2012, to prevent similar economic damage, and an additional $75 billion for infrastructure over the next seven years with a plan to start in 2013.

Source : CIA

Company name and address

MERRY COSMETIC LABORATORIES CO., LTD.

SUMMARY

BUSINESS ADDRESS : 124/16 MOO 11, T. OMNOI, A. KRATHUMBAN,

SAMUTSAKORN 74000, THAILAND

TELEPHONE : [66] 2431-1522

FAX : [66] 2431-1523

E-MAIL ADDRESS : info@merrycosmetic.com

REGISTRATION ADDRESS : 25/55 MOO 8, T. BANGKRASOR, A. MUANG,

NONTHABURI 11000, THAILAND

ESTABLISHED : 2010

REGISTRATION NO. : 0105553005115

TAX ID NO. : 3033755152

CAPITAL REGISTERED : BHT. 200,000

CAPITAL PAID-UP : BHT. 200,000

SHAREHOLDER’S PROPORTION : THAI : 100%

FISCAL YEAR CLOSING DATE : DECEMBER 31

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MS. NANMANUS KUNAKORNCHOTIPHAN, THAI

MANAGING DIRECTOR

NO. OF STAFF : 80

LINES OF BUSINESS : COSMETIC PRODUCTS

CONTRACTED MANUFACTURER

CORPORATE PROFILE

OPERATING TREND : STABLE

PRESENT SITUATION : OPERATING NORMALLY

REPUTATION : FAIR WITH NORMAL BUSINESS ENGAGEMENT

MANAGEMENT STANDARD : MANAGEMENT WITH FAIR PERFORMANCE

HISTORY

The subject was established on January 13, 2010 as a private limited company under the registered name MERRY COSMETIC LABORATORIES CO., LTD. by Thai groups. Its business objective is to provide contracted manufacturing service various kinds of cosmetic products with GMP quality standard, to both domestic and international markets. It currently employs approximately 80 staff.

The subject’s registered and operation address was initially located at 124/16 Moo 11, T. Omnoi, A. Krathumban, Samutsakorn 74000.

On July 1, 2013, its registered address was relocated to 25/55 Moo 8, T. Bangkrasor, A. Muang, Nonthaburi 11000, while the subject’s current operation address is at 124/16 Moo 11, T. Omnoi, A. Krathumban, Samutsakorn 74000.

THE BOARD OF DIRECTOR

Name	Nationality	Age
Ms. Nanmanus Kunakornchotiphan	Thai	38
Mrs. Siriphan Pichetveerachai	Thai	48

AUTHORIZED PERSON

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

MANAGEMENT

Ms. Nanmanus Kunakornchotiphan is the Managing Director.

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

BUSINESS OPERATIONS

The subject is engaged in contracted manufacturing various kinds of body care cosmetic products, including cleanse dirty/make-up remover, cleansing products, toners, whitening products, anti-wrinkle products, treatment products, sunscreen products, body lotions, bathing products and etc., under various customer’s brands.

PURCHASE

Raw materials and chemicals are purchased from both domestic and overseas suppliers in Italy, France and Switzerland.

SALES/ SERVICES

80% of the products is served locally by wholesale to traders, the remaining 20% is exported to Republic of China, Japan, Hong Kong, Korea, and Singapore.

MAJOR CUSTOMER

Beauty Home Mart Co., Ltd. [Asada brand] : Thailand

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.

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

Exports are against T/T.

BANKING

Kasikornbank Public Co., Ltd.

EMPLOYMENT

The subject currently employs approximately 80 staff.

LOCATION DETAILS

The premise is owned for administrative office and factory at the heading address. Premise is located in provincial.

COMMENT

The subject is a contracted manufacturer of cosmetic products under GMP (Good Manufacturing Practice). The subject had a moderate business in 2011. In 2013, the subject’s business is doing moderately in the first half of this year, as it strives to reach new customers from both local and overseas, as well as to obtain an increase in number of orders from existing customers.

FINANCIAL INFORMATION

The capital was registered at Bht. 200,000 divided into 20,000 shares of Bht. 10 each with fully paid.

THE SHAREHOLDERS LISTED WERE

[as at January 11, 2012]

NAME	HOLDING	%
Ms. Nanmanus Kunakornchotiphan Nationality: Thai Address : 289 Paitoey Rd., T. Huayjarakae, A. Muang, Nakornpathom	10,200	51.00
Mrs. Siriphan Pichetveerachai Nationality: Thai Address : 101/114 Moo 7, Laksong, Bangkae, Bangkok	9,000	45.00
Mrs. Pui Saejang Nationality: Thai Address : 125/40 Moo 2, Bangkaenua, Bangkae, Bangkok	800	4.00

Total Shareholders : 3

Share Structure [as at January 11, 2012]

Nationality	Shareholders	No. of Share	% Shares
Thai	3	20,000	100.00
Foreign	-	-	-
Total	3	20,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO.

Mr. Yuthapong Ngamvichan No. 7613

Note:

The 2012 financial statement was not submitted to the Commercial Registration Department during investigation.

BALANCE SHEET [BAHT]

The latest financial figures published for December 31, 2011 & 2010 were:

ASSETS

Current Assets	2011	2010
Cash in Hand & at Bank	2,005,181.31	2,282,375.48
Other Current Assets	7,899.78	28,314.56
Total Current Assets	2,013,081.09	2,310,690.04
Equipment	1,699,602.87	1,734,234.02
Total Assets	3,712,683.96	4,044,924.06

LIABILITIES & SHAREHOLDERS' EQUITY [BAHT]

Current Liabilities	2011	2010
Loan from Related Person	1,720,000.00	3,020,000.00
Other Liabilities	568,348.41	368,275.51
Total Current Liabilities	2,288,348.41	3,388,275.51
Total Liabilities	2,288,348.41	3,388,275.51
Shareholders' Equity
Share capital : Baht 10 par value authorized, issued and fully paid share capital 20,000 shares	200,000.00	200,000.00
Capital Paid	200,000.00	200,000.00
Retained Earning - Unappropriated	1,224,335.55	456,648.55
Total Shareholders' Equity	1,424,335.55	656,648.55
Total Liabilities & Shareholders' Equity	3,712,683.96	4,044,924.06

PROFIT & LOSS ACCOUNT

Revenue	2011	Jan. 13, 2010 - Dec. 31, 2010
Sales	5,358,593.88	3,924,605.40
Other Income	-	2,371.73
Total Revenues	5,358,593.88	3,926,977.13
Expenses
Cost of Goods Sold	2,036,673.89	2,245,187.67
Administrative Expenses	2,443,619.46	1,171,026.11
Total Expenses	4,480,293.35	3,416,213.78
Profit / [Loss] before Income Tax	878,300.53	510,763.35
Income Tax	[110,613.53]	[54,114.80]
Net Profit / [Loss]	767,987.00	456,648.55

FINANCIAL ANALYSIS

ITEM	UNIT	2011	2010
LIQUIDITY RATIO
CURRENT RATIO	TIMES	0.88	0.68
QUICK RATIO	TIMES	0.88	0.67
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	3.15	2.26
TOTAL ASSETS TURNOVER	TIMES	1.44	0.97
INVENTORY CONVERSION PERIOD	DAYS	-	-
INVENTORY TURNOVER	TIMES	-	-
RECEIVABLES CONVERSION PERIOD	DAYS	-	-
RECEIVABLES TURNOVER	TIMES	-	-
PAYABLES CONVERSION PERIOD	DAYS	-	-
CASH CONVERSION CYCLE	DAYS	-	-
PROFITABILITY RATIO
COST OF GOODS SOLD	%	38.01	57.21
SELLING & ADMINISTRATION	%	45.60	29.84
INTEREST	%	-	-
GROSS PROFIT MARGIN	%	61.99	42.85
NET PROFIT MARGIN BEFORE EX. ITEM	%	16.39	13.01
NET PROFIT MARGIN	%	14.33	11.64
RETURN ON EQUITY	%	53.92	69.54
RETURN ON ASSET	%	20.69	11.29
EARNING PER SHARE	BAHT	38.40	22.83
LEVERAGE RATIO
DEBT RATIO	TIMES	0.62	0.84
DEBT TO EQUITY RATIO	TIMES	1.61	5.16
TIME INTEREST EARNED	TIMES	-	-
ANNUAL GROWTH
SALES GROWTH	%	36.54	-
OPERATING PROFIT	%	71.96	-
NET PROFIT	%	68.18	-
FIXED ASSETS	%	(2.00)	-
TOTAL ASSETS	%	(8.21)	-

PROFITABILITY : EXCELLENT

PROFITABILITY RATIO

Gross Profit Margin	61.99	Impressive	Industrial Average	19.72
Net Profit Margin	14.33	Impressive	Industrial Average	4.93
Return on Assets	20.69	Impressive	Industrial Average	9.74
Return on Equity	53.92	Impressive	Industrial Average	21.85

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. Gross Profit Margin is 61.99%. When compared with the industry average, the ratio of the company was higher, 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. Net Profit Margin ratio is 14.33%, 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 20.69%, 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 53.92%, 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 : ACCEPTABLE

LIQUIDITY RATIO

Current Ratio	0.88	Risky	Industrial Average	1.46
Quick Ratio	0.88
Cash Conversion Cycle	-

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 0.88 times in 2011, decrease from 0.68 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 0.88 times in 2011, decrease from 0.67 times, by excluding inventory, the company may have problems meeting current liabilities.

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

Current Ratio Downtrend

LEVERAGE : RISKY

LEVERAGE RATIO

Debt Ratio	0.62	Acceptable	Industrial Average	0.56
Debt to Equity Ratio	1.61	Risky	Industrial Average	1.26
Times Interest Earned	-		Industrial Average	-

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 0.62 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 Uptrend

Times Interest Earned Downtrend

ACTIVITY : SATISFACTORY

ACTIVITY RATIO

Fixed Assets Turnover	3.15	Impressive	Industrial Average	-
Total Assets Turnover	1.44	Acceptable	Industrial Average	1.98
Inventory Conversion Period	-
Inventory Turnover	-		Industrial Average	6.90
Receivables Conversion Period	-
Receivables Turnover	-		Industrial Average	3.56
Payables Conversion Period	-

The company's Total Asset Turnover is calculated as 1.44 times and 0.97 times in 2011 and 2010 respectively. This ratio is determined by dividing total assets into total sales turnover. The ratio measures the activity of the assets and the ability of the firm to generate sales through the use of the assets.

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

Fixed Assets Turnover Downtrend

Total Assets Turnover Uptrend

Inventory Turnover Uptrend

Receivables Turnover Uptrend

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.34
UK Pound	1	Rs.90.78
Euro	1	Rs.77.81

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.