MIRA INFORM REPORT

Report Date :

01.08.2014

IDENTIFICATION DETAILS

Name :	AEROFLEX CO., LTD.
Registered Office :	770 Moo 6, Theparak Road, T. Theparak, A. Muang, Samutprakarn 10270
Country :	Thailand
Financials (as on) :	31.03.2013
Date of Incorporation :	27.03.2012
Com. Reg. No.:	0115555005597
Legal Form :	Private Limited Company
Line of Business :	Subject is engaged in manufacturing and distributing various kinds of thermal insulation for HVAC & R and roof application
No. of Employees	400

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 :	Slow but correct
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 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
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. 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 in 2013 implemented a nation-wide 300 baht ($10) per day minimum wage policy and deployed 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 recession severely cut Thailand's exports, with most sectors experiencing double-digit drops. In late 2011 Thailand's recovery was interrupted by historic flooding in the industrial areas in Bangkok and its five surrounding provinces, crippling the manufacturing sector. The government 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 following seven years. This was expected to lead to an economic upsurge but growth has remained slow, in part due to ongoing political unrest and resulting uncertainties. Spending on infrastructure will require re-approval once a new government is seated

Source : CIA

Company name

AEROFLEX CO., LTD.

SUMMARY

BUSINESS ADDRESS : 770 MOO 6, THEPARAK ROAD, T. THEPARAK,

A. MUANG, SAMUTPRAKARN 10270, THAILAND

TELEPHONE : [66] 2383-6599

FAX : [66] 2383-6531-3

E-MAIL ADDRESS : sales_eie@aeroflex.co.th

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 2012

REGISTRATION NO. : 0115555005597

TAX ID NO. : 3035011461

CAPITAL REGISTERED : BHT. 600,000,000

CAPITAL PAID-UP : BHT. 600,000,000

SHAREHOLDER’S PROPORTION : THAI : 100%

FISCAL YEAR CLOSING DATE : MARCH 31

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. PAWAT VITOORAPAKORN, THAI

MANAGING DIRECTOR

NO. OF STAFF : 400

LINES OF BUSINESS : THERMAL INSULATION

MANUFACTURER, DISTRIBUTOR & EXPORTER

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 March 27, 2012 as a private limited company under the registered name AEROFLEX CO., LTD., by Thai group, with the business objective to manufacture and distribute thermal insulation for HVAC & R and roof application to both domestic and overseas markets. It currently employs approximately 400 staff.

The subject is a wholly owned subsidiary of Eastern Polymer Group Public Company Limited.

The subject’s registered address is 770 Moo 6, Theparak Road, T. Theparak,

A. Muang, Samutprakarn 10270, and this is the subject’s current operation address.

THE BOARD OF DIRECTOR

Name	Nationality	Age
Mr. Pawat Vitoorapakorn	Thai	63
Mr. Teerawat Vitoorapakorn	Thai	55
Mr. Chamnan Vitoorapakorn	Thai	53
Mr. Chalieo Vitoorapakorn	Thai	52
Mr. Ekawat Vitoorapakorn	Thai	49
Mr. Tanawat Vitoorapakorn	Thai	41

AUTHORIZED PERSON

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

MANAGEMENT

Mr. Pawat Vitoorapakorn is the Managing Director.

He is Thai nationality with the age of 63 years old.

Mr. Teerawat Vitoorapakorn is the Deputy Managing Director.

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

Mr. Chamnan Vitoorapakorn is the Factory Manager.

He is Thai nationality with the age of 53 years old.

Mr. Chalieo Vitoorapakorn is the Sales & Marketing Manager.

He is Thai nationality with the age of 52 years old.

BUSINESS OPERATIONS

The subject is engaged in manufacturing and distributing various kinds of thermal insulation for HVAC & R and roof application as follows:

· “AEROFLEX” closed cell [EPDM] elastomer thermal insulation such as tube insulation and sheet insulation for HVAC & R

· “AERO-ROOF” insulation for roof application

· “AERODUCT” Two double facing flexible aluminium air duct for air duct system.

PURCHASE

Raw materials are purchased from suppliers both domestic and overseas, in Japan, U.S.A., Republic of China and Germany.

SALES

80% of the products is sold locally by wholesale to traders, manufacturer and end-users, the remaining 20% is exported to Republic of China, Malaysia, Taiwan, Korea, Singapore, Hong Kong, India, Vietnam and the countries in Europe.

RELATED AND AFFILIATED COMPANIES

The Eastern Polymer Group consists of :

Aeroklas Co., Ltd.

Business Type : Manufacturer of truck’s bed liners

Eastern Polypack Company Limited

Business Type : disposable food and beverage plastic packaging

EPG Innovation Center Company Limited

Business Type : Research and development center

etc.

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 T/T on negotiated terms.

Exports are against T/T.

BANKING

Bangkok Bank Public Co., Ltd.

Kasikornbank Public Co., Ltd.

EMPLOYMENT

The subject currently employs approximately 400 staff.

LOCATION DETAILS

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

Factory II is located at 111/7, 111/11 Moo 2, T. Makhamku, A. Nikompattana,

Rayong 21000 Tel : [66] 38 917-111.

Sales Office:

1179/21-25 Rama IV Road, Klongton, Klongtoey, Bangkok 10110.

Tel. : [66] 2249-3976.

COMMENT

The subject is a manufacture of Thermal Insulation products. The subject has been entrusted with the quality standards and innovations that can help save energy in buildings, offices, factories, airports and conference centers throughout the world. Today, Aero Flex has a distribution network of more than 100 countries worldwide.

The subject’s sales and services is outstanding with growing demand from construction works.

FINANCIAL INFORMATION

The capital was registered at Bht. 1,000,000 divided into 10,000 shares of Bht. 100 each with fully paid.

On December 20, 2012, the registered capital was increased to Bht. 600,000,000 divided into 6,000,000 shares of Bht. 100 each with fully paid.

THE SHAREHOLDERS LISTED WERE : [as at November 5, 2013]

NAME	HOLDING	%
Eastern Polymer Group public Company Limited Nationality: Thai Address : 770 Moo 6, Theparak Road, T. Theparak, A. Muang, Samutprakarn	5,999,998	100.00
Mr. Pawat Vitoorapakorn Nationality: Thai Address : 33/5 Moo 1, T. Bangkaew, A. Bangplee, Samutprakarn	1	-
Mr. Teerawat Vitoorapakorn Nationality: Thai Address : 36/28 Moo 16, T. Bangkaew, A. Bangplee, Samutprakarn	1	-

Total Shareholders : 3

Share Structure [as at November 5, 2013]

Nationality	Shareholders	No. of Share	% Shares
Thai	3	6,000,000	100.00
Foreign	-	-	-
Total	3	6,000,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO. :

Mrs. Suwimol Kritayakian No. 2982

BALANCE SHEET [BAHT]

The latest financial figures published for March 31, 2013 & 2012 were:

ASSETS

Current Assets	2013	2012 [Adjusted]
Cash and Cash Equivalents	8,402,253.42	1,000,000.00
Trade Account & Other Receivable	416,218,452.71	-
Short-term Loan to Related Company	6,343,750.00	-
Inventories	309,707,952.29	-
Total Current Assets	740,672,408.42	1,000,000.00
Investment in Associated	111,264,396.60	-
Investment in Subsidiaries	372,262,775.00	-
Fixed Assets	572,184,560.44	-
Cash at Bank pledged at a Collateral	75,000,000.00	-
Deferred Income Tax	6,344,329.32	3,960.60
Other Non-current Assets	80,000.00	-
Total Assets	1,877,808,469.78	1,003,960.60

LIABILITIES & SHAREHOLDERS' EQUITY [BAHT]

Current Liabilities	2013	2012 [Adjusted]
Short-term Loan from Bank	534,122,384.56	-
Trade Account & Other Payable	138,240,965.02	17,220.00
Current Portion of Long-term Liabilities	80,100,000.00	-
Accrued Income Tax	5,164,537.69	-
Payable for Investment Purchase	76,297,896.60	-
Total Current Liabilities	833,925,783.87	17,220.00
Long-term Loan	360,300,000.00	-
Employee Benefits Obligation	27,247,172.00	-
Total Liabilities	1,221,472,955.87	17,220.00
Shareholders' Equity
Share capital : Baht 100 value authorized, issued and fully paid share capital 6,000,000 shares in 2013 & 10,000 shares in 2012	600,000,000.00	1,000,000.00
Capital Paid	600,000,000.00	1,000,000.00
Retained Earning - Unappropriated Deficit]	56,335,513.91	[13,259.40]
Total Shareholders' Equity	656,335,513.91	986,740.60
Total Liabilities & Shareholders' Equity	1,877,808,469.78	1,003,960.60

PROFIT & LOSS ACCOUNT

Revenue	2013	2012 [Adjusted]
Sales Income	355,856,511.43	-
Other Income
Interest Income	724,863.01	-
Gain on Exchange Rate	72,639.01	-
Other income	1,428,748.99	-
Total Revenues	358,082,762.44	-
Expenses
Cost of Goods Sold	241,153,682.58	-
Selling Expenses	16,210,199.81	17,220.00
Administrative Expenses	32,938,398.43	-
Financial Cost	12,600,069.75	-
Total Expenses	302,902,350.57	17,220.00
Profit / [Loss] before Income Tax	55,180,411.87	[17,220.00]
Income Tax	1,168,361.44	3,960.60
Net Profit / [Loss]	56,348,773.31	[13,259.40]

FINANCIAL ANALYSIS

ITEM	UNIT	2013
LIQUIDITY RATIO
CURRENT RATIO	TIMES	0.89
QUICK RATIO	TIMES	0.52
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	0.62
TOTAL ASSETS TURNOVER	TIMES	0.19
INVENTORY CONVERSION PERIOD	DAYS	468.76
INVENTORY TURNOVER	TIMES	0.78
RECEIVABLES CONVERSION PERIOD	DAYS	426.91
RECEIVABLES TURNOVER	TIMES	0.85
PAYABLES CONVERSION PERIOD	DAYS	209.24
CASH CONVERSION CYCLE	DAYS	686.44
PROFITABILITY RATIO
COST OF GOODS SOLD	%	67.77
SELLING & ADMINISTRATION	%	13.81
INTEREST	%	3.54
GROSS PROFIT MARGIN	%	32.86
NET PROFIT MARGIN BEFORE EX. ITEM	%	15.51
NET PROFIT MARGIN	%	15.83
RETURN ON EQUITY	%	8.59
RETURN ON ASSET	%	3.00
EARNING PER SHARE	BAHT	9.39
LEVERAGE RATIO
DEBT RATIO	TIMES	0.65
DEBT TO EQUITY RATIO	TIMES	1.86
TIME INTEREST EARNED	TIMES	4.38

PROFITABILITY : ACCEPTABLE

PROFITABILITY RATIO

Gross Profit Margin	32.86	Deteriorated	Industrial Average	74.99
Net Profit Margin	15.83	Impressive	Industrial Average	6.83
Return on Assets	3.00	Deteriorated	Industrial Average	10.69
Return on Equity	8.59	Deteriorated	Industrial Average	21.18

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 32.86%. When compared with the industry average, the ratio of the company was lower. This indicated that company may have 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. Net Profit Margin ratio is 15.83%, 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. When compared with the industry average, it was lower, the company's figure is 3%.

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 8.59%.

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

Return on Assets Uptrend

Return on Equity Uptrend

LIQUIDITY : RISKY

LIQUIDITY RATIO

Current Ratio	0.89	Risky	Industrial Average	1.50
Quick Ratio	0.52
Cash Conversion Cycle	686.44

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 0.89 times in 2013, 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 0.52 times in 2013, 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 687 days.

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

Current Ratio Uptrend

LEVERAGE : ACCEPTABLE

LEVERAGE RATIO

Debt Ratio	0.65	Acceptable	Industrial Average	0.44
Debt to Equity Ratio	1.86	Risky	Industrial Average	0.78
Times Interest Earned	4.38	Impressive	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 higher the percentage means that the company is using less equity and has stronger leverage position.

Times Interest Earned measuring a company's ability to meet its debt obligations. Ratio is 4.38 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 0.65 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 Stable

ACTIVITY : ACCEPTABLE

ACTIVITY RATIO

Fixed Assets Turnover	0.62	Impressive	Industrial Average	-
Total Assets Turnover	0.19	Deteriorated	Industrial Average	1.57
Inventory Conversion Period	468.76
Inventory Turnover	0.78	Deteriorated	Industrial Average	6.76
Receivables Conversion Period	426.91
Receivables Turnover	0.85	Deteriorated	Industrial Average	5.42
Payables Conversion Period	209.24

The company's Account Receivable Ratio is calculated as 0.85 in 2013. This ratio measures the efficiency of the company in managing its trade debtors to generate revenue. A lower ratio may indicate over extension and collection problems. Conversely, a higher ratio may indicate an overtly stringent policy. In this case, the company's A/R ratio in 2013 is 0.85. This would suggest the company had good performance in the management of its debt collections.

Inventory Turnover in Days Ratio indicates the liquidity of inventory. It estimates the number of days that it will take to sell the current inventory. Inventory is particularly sensitive to change in business activities. The inventory turnover in days is 469 days at the end of 2013. This represents a negative trend. And Inventory turnover is 0.78 times in year 2013.

The company's Total Asset Turnover is calculated as 0.19 times in 2013. 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 Stable

Total Assets Turnover Uptrend

Inventory Turnover Uptrend

Receivables Turnover Uptrend

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.25
UK Pound	1	Rs.101.92
Euro	1	Rs.80.70

INFORMATION DETAILS

Analysis Done by :	RAS
Report Prepared by :	NIS

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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