MIRA INFORM REPORT

Report No. :	345868
Report Date :	23.10.2015

IDENTIFICATION DETAILS

Name :	N & N FOODS COMPANY LIMITED
Registered Office :	5/7-8, 5/10 Moo 4, Sai Setthakij Road, T. Nadee, A. Muang, Samutsakorn 74000
Country :	Thailand
Financials (as on) :	31.03.2015
Date of Incorporation :	03.01.1990
Com. Reg. No.:	0105533000649
Legal Form :	Private Limited Company
Line of Business :	Manufacturer & Exporter of Frozen Food Products.
No. of Employees :	700

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 – March 31, 2015

Country Name	Previous Rating (31.12.2014)	Current Rating (31.03.2015)
Thailand	A2	A2

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

Company name

N & N FOODS COMPANY LIMITED

SUMMARY

BUSINESS ADDRESS : 5/7-8, 5/10 MOO 4, SAI SETTHAKIJ ROAD, T.

NADEE, A. MUANG, SAMUTSAKORN 74000, THAILAND

TELEPHONE : [66] 34 425-279, 34 826-338, 34 426-952

FAX : [66] 34 426-951, 34 423-537

E-MAIL ADDRESS : khaesuda@nnfoods.co.th

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 1990

REGISTRATION NO. : 0105533000649

TAX ID NO. : 3101787139

CAPITAL REGISTERED : BHT. 50,000,000

CAPITAL PAID-UP : BHT. 50,000,000

SHAREHOLDER’S PROPORTION : JAPANESE : 96.40%

THAI : 3.60%

FISCAL YEAR CLOSING DATE : MARCH 31

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. SHINJI KAWAGUCHI, JAPANESE

MANAGING DIRECTOR

NO. OF STAFF : 700

LINES OF BUSINESS : FROZEN FOOD PRODUCTS

MANUFACTURER & EXPORTER

CORPORATE PROFILE

OPERATING TREND : STABLE

PRESENT SITUATION : OPERATING NORMALLY

REPUTATION : GOOD WITH NORMAL BUSINESS ENGAGEMENT

MANAGEMENT STANDARD : MANAGEMENT WITH FAIR PERFORMANCE

HISTORY

The subject was established on January 3, 1990 as a private limited company under the registered name N & N FOODS COMPANY LIMITED. by Thai and Japanese groups. Its business objective is to manufacture and export various kinds of frozen food products. It currently employs approximately 700 staff. The subject is a subsidiary of Maruha Nichiro Corporation, in Japan.

The subject’s registered address is 5/7-8, 5/10 Moo 4, Sai Setthakij Rd., T. Nadee,

A. Muang, Samutsakorn 74000, and this is the subject’s current operation address.

THE BOARD OF DIRECTOR

Name		Nationality	Age
Mr. Hiroaki Onishi		Japanese	57
Mr. Hiroshi Soeda	[x]	Japanese	45
Mr. Nobuyuki Morita	[x]	Japanese	55
Mr. Hideo Kikuchi		Japanese	59
Mr. Shinji Kawaguchi	[x]	Japanese	59

AUTHORIZED PERSON

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

MANAGEMENT

Mr. Shinji Kawaguchi is the Managing Director.

He is Japanese nationality with the age of 59 years old.

BUSINESS OPERATIONS

The subject is engaged in manufacturing and exporting various kinds of Japanese foods and frozen seafood products, consist of 5 main products as follows:

1. Breaded Products

- Breaded shrimp

- Breaded shrimp patties

- Breaded skewers

- Breaded cream croquette

- Breaded pork

2. Fried Products

- Kakiage

- Shrimp fritter

- Shrimp tempura

3. Baked Products

- Takoyaki

- Okonomiyaki

4. Wreped products

- Shrimp stick roll

- Spring roll

5. Other Products

- Ebi chili & tomato base sauce

- Dim sum products

- Shrimp gyoza/shrimp toast

- Gyoza [Japanese style]

- Shaomai [Japanese style]

- Chimaki [Japanese style]

PRODUCTION CAPACITY

30 tons per day

PURCHASE

80% of raw materials is purchased from local suppliers, the remaining 20% is imported from Japan, India, Myanmar, Vietnam, Australia and Republic of China.

MAJOR SUPPLIER

Narong Seafood Co., Ltd.

EXPORT

100% of the products is exported to Japan, Singapore, Indonesia, India, Hong Kong, Republic of China, Malaysia, U.S.A., and the countries in Europe.

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

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

Imports are by L/C or T/T.

Exports are against T/T.

BANKING

Mizuho Corporate Bank Ltd.

[Bangkok Branch, 48 North Sathorn Road, Silom, Bangrak, Bangkok]

Siam Commercial Bank Public Co., Ltd.

Bangkok Bank Public Co., Ltd.

EMPLOYMENT

The subject employs approximately 700 staff.

LOCATION DETAILS

The premise is rented for administrative office, factory and warehouse on 42,072 square meters of land, at the heading address. Premise is located in provincial, on the outskirts of Bangkok.

COMMENT

The subject’s sales revenue and net profit as of March 31, 2015 were decreased comparing to the same period of the previous year. However, the subject would have an advantage from a weakness of Thai baht against other currencies at the moment which is favourable to the exporter. Generally, frozen food products is still promising for export markets.

FINANCIAL INFORMATION

The capital was registered at Bht. 50,000,000 divided into 50,000 shares of Bht. 1,000 each with fully paid.

THE SHAREHOLDERS LISTED WERE

[as at July 10, 2015]

NAME	HOLDING	%
Maruha Nichiro Corporation Nationality: Japanese Address : 2-20-3 Chome Toyotsu, Koto-ku, Tokyo, Japan	48,198	96.40
Narong Seafood Co., Ltd. Nationality: Thai Address : 5/4-6 Moo 4, Sai Setthakij Rd., T. Nadee, A. Muang, Samutsakorn	1,796	3.59
Mrs. Wanida Piboontanapattana Nationality: Thai Address : 50/122 Moo 14, T. Bangkaew, A. Bangplee, Samutprakarn	3
Mr. Viroj Limsanit Nationality: Thai Address : 236/61 Nanglinchee Rd., Bangpongpang, Yannawa, Bangkok	1	= 0.01
Mr. Nobuyuki Morita Nationality: Japanese Address : 5-2-1 Taishomashi Omuta-City, Fukuoka, Japan	1
Mr. Hiroshi Soeda Nationality: Japanese Address : Japan	1

Total Shareholders : 6

Share Structure [as at July 10, 2015]

Nationality	Shareholders	No. of Share	% Shares
Thai	3	1,800	3.60
Foreign - Japanese	3	48,200	96.40
Total	6	50,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO.

Ms. Bongkot Amsa-ngiem No. 3684

BALANCE SHEET [BAHT]

The latest financial figures published as at March 31, 2015, 2014 & 2013 were:

ASSETS

Current Assets	2015	2014	2013
Cash and Cash Equivalents	148,805,396	149,632,394	46,038,752
Trade Accounts Receivable	27,748,692	35,894,993	52,425,074
Other Receivable	18,403,908	23,426,788	28,033,287
Inventories	103,320,507	77,397,106	148,079,665
Other Current Assets	590,716	628,040	614,046
Total Current Assets	298,869,219	286,979,321	275,190,824
Fixed Assets	142,664,582	148,262,628	152,599,340
Intangible Assets	1,820,030	30	40,679
Other Non-current Assets	913,984	1,440,490	1,067,325
Total Assets	444,267,815	436,682,469	428,898,168

LIABILITIES & SHAREHOLDERS’ EQUITY [BAHT]

Current Liabilities	2015	2014	2013
Trade Accounts Payable	22,818,305	16,671,002	29,559,502
Other Payable	11,295,361	11,596,406	17,031,050
Accrued Income Tax	2,413,458	3,217,249	1,208,642
Current Portion of Financial Lease Contract Liabilities	310,649	290,427	750,499
Total Current Liabilities	36,837,773	31,775,084	48,549,693
Financial Lease Contract Liabilities	418,902	729,552	1,019,979
Employee Benefits Obligation	10,188,666	13,099,584	12,915,997
Total Liabilities	47,445,341	45,604,220	62,485,669
Shareholders' Equity
Share capital : Baht 1,000 par value authorized and issued share capital 50,000 shares	50,000,000	50,000,000	50,000,000
Capital Paid	50,000,000	50,000,000	50,000,000
Retained Earnings: Appropriated for statutory reserve	5,000,000	5,000,000	5,000,000
Unappropriated	341,822,474	336,078,249	311,412,499
Total Shareholders' Equity	396,822,474	391,078,249	366,412,499
Total Liabilities & Shareholders' Equity	444,267,815	436,682,469	428,898,168

PROFIT & LOSS ACCOUNT

Revenue	2015	2014	2013
Sales Income	701,178,777	755,872,424	869,947,034
Investment Income	742,473	659,023	172,652
Gain on Exchange Rate	5,087,434	69,696,165	33,089,469
Other Income	6,822,940	3,051,711	4,427,227
Total Revenues	713,831,624	829,279,323	907,636,382
Expenses
Cost of Goods Sold	637,050,576	727,497,553	810,025,946
Selling Expenses	19,112,953	24,697,008	28,268,694
Administrative Expenses	43,763,812	47,541,363	58,587,310
Total Expenses	699,927,341	799,735,924	896,881,950
Profit / [Loss] before Income Tax	13,904,283	29,543,399	10,754,432
Income Tax	[3,160,058]	[4,877,649]	[2,344,612]
Net Profit / [Loss]	10,744,225	24,665,750	8,409,820

FINANCIAL ANALYSIS

ITEM	UNIT	2015	2014	2013
LIQUIDITY RATIO
CURRENT RATIO	TIMES	8.11	9.03	5.67
QUICK RATIO	TIMES	5.29	6.58	2.61
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	4.91	5.10	5.70
TOTAL ASSETS TURNOVER	TIMES	1.58	1.73	2.03
INVENTORY CONVERSION PERIOD	DAYS	59.20	38.83	66.73
INVENTORY TURNOVER	TIMES	6.17	9.40	5.47
RECEIVABLES CONVERSION PERIOD	DAYS	14.44	17.33	22.00
RECEIVABLES TURNOVER	TIMES	25.27	21.06	16.59
PAYABLES CONVERSION PERIOD	DAYS	13.07	8.36	13.32
CASH CONVERSION CYCLE	DAYS	60.57	47.80	75.40
PROFITABILITY RATIO
COST OF GOODS SOLD	%	90.85	96.25	93.11
SELLING & ADMINISTRATION	%	8.97	9.56	9.98
INTEREST	%	-	-	-
GROSS PROFIT MARGIN	%	10.95	13.47	11.22
NET PROFIT MARGIN BEFORE EX. ITEM	%	1.98	3.91	1.24
NET PROFIT MARGIN	%	1.53	3.26	0.97
RETURN ON EQUITY	%	2.71	6.31	2.30
RETURN ON ASSET	%	2.42	5.65	1.96
EARNING PER SHARE	BAHT	214.88	493.32	168.20
LEVERAGE RATIO
DEBT RATIO	TIMES	0.11	0.10	0.15
DEBT TO EQUITY RATIO	TIMES	0.12	0.12	0.17
TIME INTEREST EARNED	TIMES	-	-	-
ANNUAL GROWTH
SALES GROWTH	%	(7.24)	(13.11)
OPERATING PROFIT	%	(52.94)	174.71
NET PROFIT	%	(56.44)	193.30
FIXED ASSETS	%	(3.78)	(2.84)
TOTAL ASSETS	%	1.74	1.81

ANNUAL GROWTH : RISKY

An annual sales growth is -7.24%. Turnover has decreased from THB 755,872,424.00 in 2014 to THB 701,178,777.00 in 2015. While net profit has decreased from THB 24,665,750.00 in 2014 to THB 10,744,225.00 in 2015. And total assets has increased from THB 436,682,469.00 in 2014 to THB 444,267,815.00 in 2015.

PROFITABILITY : RISKY

PROFITABILITY RATIO

Gross Profit Margin	10.95	Deteriorated	Industrial Average	70.16
Net Profit Margin	1.53	Deteriorated	Industrial Average	3.84
Return on Assets	2.42	Deteriorated	Industrial Average	5.16
Return on Equity	2.71	Deteriorated	Industrial Average	12.38

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 10.95%. 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. The company's figure is 1.53%. 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 2.42%.

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 2.71%.

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

Return on Assets Uptrend

Return on Equity Uptrend

LIQUIDITY : IMPRESSIVE

LIQUIDITY RATIO

Current Ratio	8.11	Impressive	Industrial Average	1.23
Quick Ratio	5.29
Cash Conversion Cycle	60.57

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 8.11 times in 2015, decrease from 9.03 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 5.29 times in 2015, decrease from 6.58 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 61 days.

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

Current Ratio Uptrend

LEVERAGE : EXCELLENT

LEVERAGE RATIO

Debt Ratio	0.11	Impressive	Industrial Average	0.51
Debt to Equity Ratio	0.12	Impressive	Industrial Average	1.05
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 0.11 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 : EXCELLENT

ACTIVITY RATIO

Fixed Assets Turnover	4.91	Impressive	Industrial Average	-
Total Assets Turnover	1.58	Impressive	Industrial Average	1.27
Inventory Conversion Period	59.20
Inventory Turnover	6.17	Impressive	Industrial Average	3.68
Receivables Conversion Period	14.44
Receivables Turnover	25.27	Impressive	Industrial Average	2.27
Payables Conversion Period	13.07

The company's Account Receivable Ratio is calculated as 25.27 and 21.06 in 2015 and 2014 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 2015 increased from 2014. 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 39 days at the end of 2014 to 59 days at the end of 2015. This represents a negative trend. And Inventory turnover has decreased from 9.4 times in year 2014 to 6.17 times in year 2015.

The company's Total Asset Turnover is calculated as 1.58 times and 1.73 times in 2015 and 2014 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 Downtrend

Inventory Turnover Downtrend

Receivables Turnover Downtrend

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.64.89
UK Pound	1	Rs.100.39
Euro	1	Rs.73.52

INFORMATION DETAILS

Analysis Done by :	KAR
Report Prepared by :	NIT

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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