MIRA INFORM REPORT

Report Date :

18.12.2014

IDENTIFICATION DETAILS

Name :	SUMITOMO ELCTRIC WIRING SYSTEMS [THAILAND] LIMITED
Registered Office :	60/2 Moo 3, Siam Eastern Industrial Park, T. Mabyangporn, A. Pluakdaeng, Rayong 21140
Country :	Thailand
Financials (as on) :	31.03.2014
Date of Incorporation :	28.06.1994
Com. Reg. No.:	0105537074566
Legal Form :	Private Limited Company
Line of Business :	Manufacturer, Distributor and Exporter of Wiring Harness, Wires and Cables.
No of Employees :	7,600

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
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, 2014

Country Name	Previous Rating (30.06.2014)	Current Rating (30.09.2014)
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

SUMITOMO ELCTRIC WIRING SYSTEMS [THAILAND] LIMITED

SUMMARY

BUSINESS ADDRESS : 60/2 MOO 3, SIAM EASTERN INDUSTRIAL PARK,

T. MABYANGPORN, A. PLUAKDAENG,

RAYONG 21140, THAILAND

TELEPHONE : [66] 38 891-140

FAX : [66] 38 891-141-2

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 1994

REGISTRATION NO. : 0105537074566

TAX ID NO. : 3011441770

CAPITAL REGISTERED : BHT. 290,000,000

CAPITAL PAID-UP : BHT. 290,000,000

SHAREHOLDER’S PROPORTION : THAI : 51.00%

JAPANESE : 49.00%

FISCAL YEAR CLOSING DATE : MARCH 31

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. SATOSHI SUGAWARA, JAPANESE

PRESIDENT

NO. OF STAFF : 7,600

LINES OF BUSINESS : WIRING HARNESS, WIRES AND CABLES

MANUFACTURER, DISTRIBUTOR AND 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 June 28, 1994 as a private limited company under the name style SUMITOMO ELECTRIC WIRING SYSTEMS [THAILAND] LIMITED by Thai and Japanese groups. Its business objective is to manufacture wiring harness, wires and cables to both local and overseas markets. It currently employs 7,600 staff.

The major shareholders are S.E.I. Thai Holding Co., Ltd., Sumitomo Wiring Systems Ltd., and Sumitomo Electric Industries Ltd., with holding around 47.72%, 30% and 19% of the subject’s share respectively.

The subject achieved an international standard ISO 9002 and QS 9000 certification.

The subject’s registered address is 60/2 Moo 3, Siam Eastern Industrial Park,

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

THE BOARD OF DIRECTORS

Name		Nationality	Age
Mr. Norikutsu Ishida	[x]	Japanese	53
Mr. Jiraphan Oulpathorn	[x]	Thai	67
Mr. Masami Makido		Japanese	59
Mr. Hiroshi Kiyokawa		Japanese	53
Mr. Hidekazu Azuma		Japanese	59
Mr. Yukihiko Kigugawa		Japanese	53
Mr. Tomohiro Tomita	[x]	Japanese	53
Mr. Kenichi Urushibata		Japanese	57
Mr. Satoshi Sugawara	[x]	Japanese	61

AUTHORIZED PERSON

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

MANAGEMENT

Mr. Satoshi Sugawara is the President

He is Japanese nationality with the age of 61 years old.

Mr. Norikutsu Ishida is the Vice President.

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

BUSINESS OPERATIONS

The subject’s activity is a manufacturer, distributor and exporter of wire harness, wire and cables, as well as connector housing and fuse boxes for automobiles, motorcycle, electric appliance and electronic industries.

PURCHASE

Raw materials and electronic parts are purchased from both local and overseas suppliers in Japan, Singapore, Republic of China, Germany, Australia and France.

MAJOR SUPPLIER

SEWS-Asia Technical Center Ltd. : Thailand

SALES/SERVICES

80% of its products is sold locally by wholesale mainly to automotive assemblers, such as TOYOTA, HONDA, MAZDA, FORD, MITSUBISHI and NISSAN, and motorcycle assembler, such as YAMAHA, KAWAZAKI and SUZUKI, as well as electronics and electric appliance industries. The remaining 20% is exported to Japan, Indonesia, Republic of China, Indonesia, Taiwan, Vietnam, Germany, Singapore and Malaysia.

MAJOR CUSTOMER

Sumitomo Wiring Systems Ltd. : Japan

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 according to the past two years.

CREDIT

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

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

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

Exports are against T/T.

BANKING

The Siam Commercial Bank Public Co., Ltd.

Bank of Tokyo-Mitsubishi UFJ Ltd.

Sumitomo Mitsui Banking Corporation

EMPLOYMENT

The subject employs approximately 7,600 office staff & factory workers, comprising 4,600 permanent staff and 3,000 temporary staff.

LOCATION DETAILS

The premise is owned for administrative office, factory I and warehouse at the heading address. Premise is located in industrial area, in the Eastern region of Thailand.

Factories:

Factory II : 7/125 Moo 4, Amata City Industrial Estate, T. Mabyangporn,

A. Pluakdaeng, Rayong 21140.

Factory III : 36 Moo 15, T. Khaoklung, A. Banpong, Ratchaburi 70110.

Factory IV : 188 Moo 9, T. Pongtaru, A. Thamuang, Kanchanaburi 71110.

Bangkok Office:

- 284 Moo 4, Onnuch Road, Prawet, Bangkok 10250.

COMMENT

The company was formed in 1994 as a manufacturer of wire harness and wire & cables for automobile, motorcycle, electric appliance and electronic products. It is now a major production base for wire harnesses and components, providing superior products and services to related company in Japan, as well as to other car assembly manufactures in Thailand and overseas.

However domestic industrial slowdown from lower demand and the faltering economy of export markets have affected on subject’s business performance since 2013.

FINANCIAL INFORMATION

The capital was registered at Bht. 290,000,000 divided into 29,000,000 shares of Bht. 10 each with fully paid.

THE SHAREHOLDERS LISED WERE: [as at July 2, 2014]

Name	Holding	%
S.E.I. Thai Holding Co., Ltd. Nationality : Thai Address : 54 Sukhumvit 21 Rd., North Klongtoey, Wattana, Bangkok	13,840,000	47.72
Sumitomo Wiring Systems Ltd. Nationality: Japanese Address : Japan	8,700,000	30.00
Sumitomo Electric Industries Ltd. Nationality : Japanese Address : Osaka, Japan	5,510,000	19.00
Sumipol Co., Ltd. Nationality : Thai Address : 284 Onnuch Rd., Praves, Bangkok	950,000	3.28

Total Shareholders : 4

Share Structure [as at July 2, 2014]

Nationality	Shareholders	No. of Share	% Shares
Thai	2	14,790,000	51.00
Foreign - Japanese	2	14,210,000	49.00
Total	4	29,000,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO.

Mr. Bunyarit Thanomcharoen No. 7900

BALANCE SHEET [BAHT

The latest financial figures published for March 31, 2014, 2013 & 2012 were:

ASSETS

Current Assets	2014	2013	2012
Cash and Cash Equivalents	4,088,873	1,491,810	938,660
Trade Accounts Receivable	1,746,144,407	2,476,516,606	1,873,358,072
Short-term Loan to Related Company	291,884,548	295,999,976	-
Inventories	1,331,831,740	1,395,504,235	1,478,925,475
Value Added Tax Receivable	15,681,483	2,010,348	26,605,004
Other Current Assets	33,346,590	41,792,695	41,761,787
Total Current Assets	3,422,977,641	4,213,315,670	3,421,588,998
Long-term Investment	6,820,225	6,820,225	6,820,225
Fixed Assets	1,896,319,696	1,799,548,379	1,785,344,342
Intangible Assets	23,565,498	25,326,561	20,092,635
Other Intangible Assets	12,948,490	5,204,103	3,391,075
Total Assets	5,362,631,550	6,050,214,938	5,237,237,275

LIABILITIES & SHAREHOLDERS' EQUITY [BAHT]

Current Liabilities	2014	2013	2012
Short-term Loan from Related Company	-	-	288,522,782
Trade Accounts Payable	1,064,314,084	1,566,157,212	1,205,325,421
Other Payable	420,537,586	616,849,630	442,039,415
Current Portion of Financial Lease Contract Liabilities	215,781	456,636	540,937
Accrued Income Tax	36,146,640	113,949,920	26,848,192
Accrued Bonus & Salary	160,884,248	155,496,982	132,306,397
Other Current Liabilities	74,560,041	75,895,265	59,387,522
Total Current Liabilities	1,756,658,380	2,528,805,645	2,154,970,666
Financial Lease Contract Liabilities	165,179	400,023	856,659
Reserve for Employee’s Benefits	258,062,987	218,543,581	142,043,852
Total Liabilities	2,014,886,546	2,747,749,249	2,297,871,177
Shareholders' Equity
Share capital : Baht 10 par value authorized, issued and fully paid share capital 29,000,000 shares	290,000,000	290,000,000	290,000,000
Capital Paid	290,000,000	290,000,000	290,000,000
Retained Earning Appropriated for Statutory Reserve	29,000,000	29,000,000	29,000,000
Unappropriated	3,028,745,004	2,983,465,689	2,620,366,098
Total Shareholders' Equity	3,347,745,004	3,302,465,689	2,939,366,098
Total Liabilities & Shareholders' Equity	5,362,631,550	6,050,214,938	5,237,237,275

PROFIT & LOSS ACCOUNT

Revenue	2014	2013	2012
Sales	13,543,966,371	16,391,538,173	11,865,022,141
Other Income	182,636,743	199,422,911	231,940,641
Total Revenues	13,726,603,114	16,590,961,084	12,096,962,782
Expenses
Cost of Goods Sold	11,555,957,332	13,849,859,565	10,363,685,268
Selling Expenses	673,834,006	844,891,377	464,166,517
Administrative Expenses	511,180,197	482,219,570	427,891,229
Total Expenses	12,740,971,535	15,176,970,512	11,255,743,014
Profit before Financial Cost & Income Tax	985,631,579	1,413,990,572	841,219,768
Financial Cost	[33,372]	[899,411]	[4,990,593]
Profit before Income Tax	985,598,207	1,413,091,161	836,229,175
Income Tax	[114,688,892]	[186,435,165]	[129,548,596]
Net Profit / [Loss]	870,909,315	1,226,655,996	706,680,579

FINANCIAL ANALYSIS

ITEM	UNIT	2014	2013	2012
LIQUIDITY RATIO
CURRENT RATIO	TIMES	1.95	1.67	1.59
QUICK RATIO	TIMES	1.16	1.10	0.87
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	7.14	9.11	6.65
TOTAL ASSETS TURNOVER	TIMES	2.53	2.71	2.27
INVENTORY CONVERSION PERIOD	DAYS	42.07	36.78	52.09
INVENTORY TURNOVER	TIMES	8.68	9.92	7.01
RECEIVABLES CONVERSION PERIOD	DAYS	47.06	55.15	57.63
RECEIVABLES TURNOVER	TIMES	7.76	6.62	6.33
PAYABLES CONVERSION PERIOD	DAYS	33.62	41.27	42.45
CASH CONVERSION CYCLE	DAYS	55.51	50.65	67.27
PROFITABILITY RATIO
COST OF GOODS SOLD	%	85.32	84.49	87.35
SELLING & ADMINISTRATION	%	8.75	8.10	7.52
INTEREST	%	0.00	0.01	0.04
GROSS PROFIT MARGIN	%	16.03	16.72	14.61
NET PROFIT MARGIN BEFORE EX. ITEM	%	7.28	8.63	7.09
NET PROFIT MARGIN	%	6.43	7.48	5.96
RETURN ON EQUITY	%	26.01	37.14	24.04
RETURN ON ASSET	%	16.24	20.27	13.49
EARNING PER SHARE	BAHT	30.03	42.30	24.37
LEVERAGE RATIO
DEBT RATIO	TIMES	0.38	0.45	0.44
DEBT TO EQUITY RATIO	TIMES	0.60	0.83	0.78
TIME INTEREST EARNED	TIMES	29,534.69	1,572.13	168.56
ANNUAL GROWTH
SALES GROWTH	%	(17.37)	38.15
OPERATING PROFIT	%	(30.29)	68.09
NET PROFIT	%	(29.00)	73.58
FIXED ASSETS	%	5.38	0.80
TOTAL ASSETS	%	(11.36)	15.52

ANNUA GROWTH: RISKY

An annual sales growth is -17.37%. Turnover has decreased from THB 16,391,538,173.00 in 2013 to THB 13,543,966,371.00 in 2014. While net profit has decreased from THB 1,226,655,996.00 in 2013 to THB 870,909,315.00 in 2014. And total assets has decreased from THB 6,050,214,938.00 in 2013 to THB 5,362,631,550.00 in 2014.

PROFITABILITY : IMPRESSIVE

PROFITABILITY RATIO

Gross Profit Margin	16.03	Impressive	Industrial Average	15.96
Net Profit Margin	6.43	Satisfactory	Industrial Average	7.01
Return on Assets	16.24	Satisfactory	Industrial Average	18.52
Return on Equity	26.01	Satisfactory	Industrial Average	32.95

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 16.03%. 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. The company's figure is 6.43%. 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 16.24%.

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 26.01%.

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

Return on Assets Uptrend

Return on Equity Uptrend

LIQUIDITY : SATISFACTORY

LIQUIDITY RATIO

Current Ratio	1.95	Impressive	Industrial Average	1.77
Quick Ratio	1.16
Cash Conversion Cycle	55.51

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 1.95 times in 2014, increased from 1.67 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 1.16 times in 2014, increased from 1.1 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 56 days.

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

Current Ratio Uptrend

LEVERAGE : EXCELLENT

LEVERAGE RATIO

Debt Ratio	0.38	Impressive	Industrial Average	0.42
Debt to Equity Ratio	0.60	Impressive	Industrial Average	0.73
Times Interest Earned	29,534.69	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 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 29534.69 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 0.38 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 Stable

ACTIVITY : SATISFACTORY

ACTIVITY RATIO

Fixed Assets Turnover	7.14	Impressive	Industrial Average	-
Total Assets Turnover	2.53	Satisfactory	Industrial Average	2.72
Inventory Conversion Period	42.07
Inventory Turnover	8.68	Acceptable	Industrial Average	15.33
Receivables Conversion Period	47.06
Receivables Turnover	7.76	Satisfactory	Industrial Average	8.78
Payables Conversion Period	33.62

The company's Account Receivable Ratio is calculated as 7.76 and 6.62 in 2014 and 2013 respectively. 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 2014 increased from 2013. 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 has increased from 37 days at the end of 2013 to 42 days at the end of 2014. This represents a negative trend. And Inventory turnover has decreased from 9.92 times in year 2013 to 8.68 times in year 2014.

The company's Total Asset Turnover is calculated as 2.53 times and 2.71 times in 2014 and 2013 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 Stable

Total Assets Turnover Uptrend

Inventory Turnover Uptrend

Receivables Turnover Uptrend

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.63.58
UK Pound	1	Rs.99.98
Euro	1	Rs.79.39

INFORMATION DETAILS

Analysis Done by :	DIV
Report Prepared by :	ANK

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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