MIRA INFORM REPORT

Report No. :	489403
Report Date :	03.02.2018

IDENTIFICATION DETAILS

Name :	H&R CHEMPHARM (THAILAND) LTD.
Registered Office :	5th Floor, Bangkok City Tower,179 South Sathorn Road, Thungmahamek, Sathorn, Bangkok 10120
Country :	Thailand
Financials (as on) :	31.12.2016
Date of Incorporation :	08.06.2004
Com. Reg. No.:	0105547076944
Legal Form :	Private Limited Company
Line of Business :	The subject is engaged in manufacturing, distributing and exporting petrochemical products mainly slackwaxes, paraffinic oils, label-free oils and aromatic oils for various industries such as packaging, candles, crayons, rubber, cosmetics, pharmaceutical, textiles, tyre, electrical, oil & lubricant, greases, construction, wax polishing.
No. of Employees :	400

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23^rd January 2017)

MIRA’s Rating :

A+

Credit Rating	Explanation	Rating Comments
A+	Low Risk	Business dealings permissible with low risk of default

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

Country Name	Previous Rating (30.06.2017)	Current Rating (30.09.2017)
Thailand	A2	A2

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderately Low Risk	B1
Moderate Risk	B2
Moderately High Risk	C1
High Risk	C2
Very High Risk	D

THAILAND - ECONOMIC OVERVIEW

With a relatively well-developed infrastructure, a free-enterprise economy, and generally pro-investment policies, Thailand is highly dependent on international trade, with exports accounting for about two-thirds of GDP. Thailand’s exports include electronics, agricultural commodities, automobiles and parts, and processed foods. The industry and service sectors produce about 90% of GDP. The agricultural sector, comprised mostly of small-scale farms, contributes only 10% of GDP but employs about one-third of the labor force. Thailand has attracted an estimated 3.0-4.5 million migrant workers, mostly from neighboring countries.

Over the last few decades, Thailand has reduced poverty substantially. In 2013, the Thai Government implemented a nationwide 300 baht (roughly $10) per day minimum wage policy and deployed new tax reforms designed to lower rates on middle-income earners.

Thailand’s economy is recovering from slow growth during the years since the 2014 coup. Thailand’s economic fundamentals are sound, with low inflation, low unemployment, and reasonable public and external debt levels. Tourism and government spending - mostly on infrastructure and short-term stimulus measures – have helped to boost the economy, and The Bank of Thailand has been supportive, with several interest rate reductions.

Over the longer-term, household debt levels, political uncertainty, and an aging population pose risks to growth.

Source : CIA

Company name and address

H&R CHEMPHARM (THAILAND) LTD.

[FORMER : H&R GSP CO., LTD.]

SUMMARY

BUSINESS ADDRESS : 5^th FLOOR, BANGKOK CITY TOWER,

179 SOUTH SATHORN ROAD, THUNGMAHAMEK,

SATHORN, BANGKOK 10120, THAILAND

TELEPHONE : [66] 2359-9003-5

FAX : [66] 2287-1335

E-MAIL ADDRESS : info.asia@hur.com

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 2004

REGISTRATION NO. : 0105547076944

TAX ID NO. : 3031407497

CAPITAL REGISTERED : BHT. 5,000,000

CAPITAL PAID-UP : BHT. 5,000,000

SHAREHOLDER’S PROPORTION : THAI : 61.02%

GERMAN : 38.98%

FISCAL YEAR CLOSING DATE : DECEMBER 31

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. SOPHON YOURUCHATANGERN, THAI

PRESIDENT

NO. OF STAFF : 400

LINES OF BUSINESS : SLACKWAXES AND PARAFFINIC OIL

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 8, 2004 as a private limited company under the originally registered name “H&R GSP Co., Ltd.” by Thai and German groups. On May 29, 2007, its registered name was changed to H&R CHEMPHARM (THAILAND) LTD. Its business objective is to manufacture and distribute petrochemical products mainly slackwaxes, paraffinic oils, label-free oils and aromatic oils for both domestic and international markets. It currently employs approximately 400 staff.

The subject is a joint venture between H&R Global Special Products Co., Ltd., and H&R International GmbH, with holding at 61.02% and 38.98% of the subject’s shares respectively.

The subject’s registered address is 5^th Floor, Bangkok City Tower, 179 South Sathorn Road, Thungmahamek, Sathorn, Bangkok 10120, and this is the subject’s current operation address.

THE BOARD OF DIRECTOR

Name	Nationality	Age
Mr. Sophon Youruchatangern	Thai	68
Mr. Niels Heinz Hansen	German	53
Mr. Sukit Ungpakorn	Thai	50
Ms. Nantiya Rungloetsittikun	Thai	54

AUTHORIZED PERSON

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

MANAGEMENT

Mr. Sophon Youruchatangern is the President.

He is Thai nationality with the age of 68 years old.

Mr. Niels Heinz Hansen is the Managing Director.

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

Mr. Phalatt Phonwetamnuai is the Sales Manager I.

He is Thai nationality.

Mr. Sukit Ungpakorn is the Sales Manager II.

He is Thai nationality with the age of 50 years old.

Mr. Permsak Leelathongtal is the Business Manager.

He is Thai nationality.

BUSINESS OPERATIONS

The subject is engaged in manufacturing, distributing and exporting petrochemical products mainly slackwaxes, paraffinic oils, label-free oils and aromatic oils for various industries such as packaging, candles, crayons, rubber, cosmetics, pharmaceutical, textiles, tyre, electrical, oil & lubricant, greases, construction, wax polishing and etc.

The products are as the followings:

· Slackwaxes : Slackwax 55, Slackwax 60, and Slackwax 70

· Paraffinic Oils : Tudalen 11, Tudalen 13, and Tudalen 16

· Label-Free Oils : Vivatec 200, Vivatec 400, Vivatec 500, Vivatec 700 and

Vivatec 800

· Aromatic Oils : Tudalen 81, Tudalen 84, Tudalen 65 and Tudalen 58

PURCHASE

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

MAJOR SUPPLIERS

H&R International GmbH. : Germany

H&R Wax & Specialties GmbH. : Germany

Thai-MC Company Limited : Thailand

SALES

The products are sold by wholesale to both local and overseas customers in Malaysia, Indonesia, Japan, Vietnam, Hong Kong, India, Republic of China and Germany.

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 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

Bangkok Bank Public Company Limited

EMPLOYMENT

The subject employs approximately 400 staff.

LOCATION DETAILS

The premise is rented for administrative office at the heading address. Premise is located in a prime commercial area.

Factory and warehouse are located at 221/10 Moo 6, Pinthong Industrial Estate, Phase 3, T. Bueng, A. Sriracha, Chonburi 20230. Tel. [66] 38 190-112-3, Fax. [66] 38 190-114.

Warehouse:

- 163/78 Moo 7, Aowudom Road, T. Thungsukhla, A. Sriracha, Chonburi 20230

- 41/19 Moo 1, T. Thungsukhla, A. Sriracha, Chonburi 20230

- 284 Moo 1, Suksawad Road, T. Pakklong Bangplagod, A. Phrasamutjaedi,

Samutprakarn 10290

- 84/19-22 Moo 9, T. Bangwua, A. Bangpakong, Chachoengsao 24180

COMMENT

Subject is a manufacturer, distributor and exporter of petrochemical products such as label-free oil, aromatic oil, slackwax and paraffinic oil. The products are mainly served to industrial users. Though the country’s sluggish economy has deterred spending from various industries, its business in general remains solid and profitable.

Subject is making products targeted at specific segments with strong potential.

FINANCIAL INFORMATION

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

each with fully paid.

The latest registered capital was increased to Bht. 5,000,000 divided into 50,000 shares

of Bht. 100 each with fully paid.

THE SHAREHOLDERS LISTED WERE : [as at April 25, 2016]

NAME	HOLDING	%
H&R Global Special Products Co., Ltd. Nationality: Thai Address : 179 South Satjhorn Road, Thungmahamek, Sathorn, Bangkok	30,510	61.02
H&R International GmbH Nationality: German Address : Am Sandtorkai 64, D-20457 Hamburg, Germany	19,488	38.98
Ms. Sunipa Thanalekhapat Nationality: Thai Address : 520/195 Moo 2, T. Prachathipat, A. Thanyaburi, Pathumthani	2	-

Total Shareholders : 3

Share Structure [as at April 25, 2016]

Nationality	Shareholders	No. of Share	% Shares
Thai	2	30,512	61.02
Foreign - German	1	19,488	38.98
Total	3	50,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO. :

Mr. Teerasak Chuasrisakul No. 6624

financial

BALANCE SHEET [BAHT]

The latest financial figures published for December 31, 2016, 2015 and 2014 were:

ASSETS

Current Assets	2016	2015	2014
Cash and Cash Equivalents	738,103,807	1,599,265,469	967,305,347
Trade Accounts and Other Receivable	647,683,626	479,439,603	499,249,168
Short-term Loans to Related Company	-	46,700,290	42,656,640
Inventories	201,589,775	184,564,276	369,370,740
Other Current Assets	45,376,078	67,986,587	45,494,860
Total Current Assets	1,632,753,286	2,377,956,225	1,924,076,755
Cash at Bank Pledged as a Collateral	793,844,015	-	14,500,000
Property, Plant and Equipment	290,197,535	243,840,537	224,611,537
Other Non-current Assets	18,707,540	18,177,440	2,883,073
Total Assets	2,735,502,376	2,639,974,202	2,166,071,365

LIABILITIES & SHAREHOLDERS' EQUITY [BAHT]

Current Liabilities	2016	2015	2014
Trade Accounts and Other Payable	351,777,700	288,605,775	284,778,113
Accrued Income Tax	68,556,926	78,963,787	58,982,730
Other Current Liabilities	39,553,707	34,387,154	26,783,046
Total Current Liabilities	459,888,333	401,956,716	370,543,889
Other Non-current Liabilities	4,191,282	11,214,721	10,394,747
Total Liabilities	464,079,615	413,171,437	380,938,636
Shareholders' Equity
Share capital : Baht 100 par value authorized and issued share capital 50,000 shares	5,000,000	5,000,000	5,000,000
Capital Paid	5,000,000	5,000,000	5,000,000
Retained Earning : [Deficit] Appropriated for statutory reserve	500,000	500,000	500,000
Unappropriated	2,265,922,761	2,221,302,765	1,779,632,729
Total Shareholders' Equity	2,271,422,761	2,226,802,765	1,785,132,729
Total Liabilities and Shareholders' Equity	2,735,502,376	2,639,974,202	2,166,071,365

PROFIT & LOSS ACCOUNT

Revenue	2016	2015	2014
Sales or Services Income	4,730,331,516	5,256,502,483	5,280,802,342
Other Income	14,436,041	31,083,652	25,691,153
Total Revenues	4,744,767,557	5,287,586,135	5,306,493,495
Expenses
Cost of Goods Sold or Services	3,635,574,598	4,162,467,216	4,454,757,910
Selling Expenses	289,161,191	279,567,634	208,951,351
Administrative Expenses	202,431,884	174,805,480	175,987,673
Total Expenses	4,127,167,673	4,616,840,330	4,839,696,934
Profit / [Loss] before Income Tax	617,599,884	670,745,805	466,796,561
Income Tax	[122,979,888]	[129,075,769]	[99,286,158]
Net Profit / [Loss]	494,619,996	541,670,036	367,510,403

FINANCIAL ANALYSIS

ITEM	UNIT	2016	2015	2014
LIQUIDITY RATIO
CURRENT RATIO	TIMES	3.55	5.92	5.19
QUICK RATIO	TIMES	3.01	5.29	4.07
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	16.30	21.56	23.51
TOTAL ASSETS TURNOVER	TIMES	1.73	1.99	2.44
INVENTORY CONVERSION PERIOD	DAYS	20.24	16.18	30.26
INVENTORY TURNOVER	TIMES	18.03	22.55	12.06
RECEIVABLES CONVERSION PERIOD	DAYS	49.98	33.29	34.51
RECEIVABLES TURNOVER	TIMES	7.30	10.96	10.58
PAYABLES CONVERSION PERIOD	DAYS	35.32	25.31	23.33
CASH CONVERSION CYCLE	DAYS	34.90	24.17	41.44
PROFITABILITY RATIO
COST OF GOODS SOLD	%	76.86	79.19	84.36
SELLING & ADMINISTRATION	%	10.39	8.64	7.29
INTEREST	%	-	-	-
GROSS PROFIT MARGIN	%	23.45	21.40	16.13
NET PROFIT MARGIN BEFORE EX. ITEM	%	13.06	12.76	8.84
NET PROFIT MARGIN	%	10.46	10.30	6.96
RETURN ON EQUITY	%	21.78	24.33	20.59
RETURN ON ASSET	%	18.08	20.52	16.97
EARNING PER SHARE	BAHT	9,892.40	10,833.40	7,350.21
LEVERAGE RATIO
DEBT RATIO	TIMES	0.17	0.16	0.18
DEBT TO EQUITY RATIO	TIMES	0.20	0.19	0.21
TIME INTEREST EARNED	TIMES	-	-	-
ANNUAL GROWTH
SALES GROWTH	%	(10.01)	(0.46)
OPERATING PROFIT	%	(7.92)	43.69
NET PROFIT	%	(8.69)	47.39
FIXED ASSETS	%	19.01	8.56
TOTAL ASSETS	%	3.62	21.88

ANNUAL GROWTH : ACCEPTABLE

An annual sales growth is -10.01%. Turnover has decreased from THB 5,256,502,483.00 in 2015 to THB 4,730,331,516.00 in 2016. While net profit has decreased from THB 541,670,036.00 in 2015 to THB 494,619,996.00 in 2016. And total assets has increased from THB 2,639,974,202.00 in 2015 to THB 2,735,502,376.00 in 2016.

PROFITABILITY : IMPRESSIVE

PROFITABILITY RATIO

Gross Profit Margin	23.45	Satisfactory	Industrial Average	26.90
Net Profit Margin	10.46	Impressive	Industrial Average	6.99
Return on Assets	18.08	Impressive	Industrial Average	13.57
Return on Equity	21.78	Impressive	Industrial Average	19.83

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 23.45%. 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 10.46%, 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 18.08%, 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 21.78%, 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 : IMPRESSIVE

LIQUIDITY RATIO

Current Ratio	3.55	Impressive	Industrial Average	1.78
Quick Ratio	3.01
Cash Conversion Cycle	34.90

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 3.55 times in 2016, decrease from 5.92 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 3.01 times in 2016, decrease from 5.29 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 35 days.

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

Current Ratio Uptrend

LEVERAGE : EXCELLENT

LEVERAGE RATIO

Debt Ratio	0.17	Impressive	Industrial Average	0.29
Debt to Equity Ratio	0.20	Impressive	Industrial Average	0.40
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 0.17 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 : IMPRESSIVE

ACTIVITY RATIO

Fixed Assets Turnover	16.30	Impressive	Industrial Average	-
Total Assets Turnover	1.73	Satisfactory	Industrial Average	1.94
Inventory Conversion Period	20.24
Inventory Turnover	18.03	Impressive	Industrial Average	10.92
Receivables Conversion Period	49.98
Receivables Turnover	7.30	Satisfactory	Industrial Average	11.61
Payables Conversion Period	35.32

The company's Account Receivable Ratio is calculated as 7.30 and 10.96 in 2016 and 2015 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 2016 decreased from 2015. This would suggest the company had deteriorated 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 16 days at the end of 2015 to 20 days at the end of 2016. This represents a negative trend. And Inventory turnover has decreased from 22.55 times in year 2015 to 18.03 times in year 2016.

The company's Total Asset Turnover is calculated as 1.73 times and 1.99 times in 2016 and 2015 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	INR 64.08
UK Pound	1	INR 91.34
Euro	1	INR 80.03
THB	1	INR 2.04

Note : Above are approximate rates obtained from sources believed to be correct

INFORMATION DETAILS

Analysis Done by :	DIV
Report Prepared by :	TRU

RATING EXPLANATIONS

Credit Rating	Explanation	Rating Comments
A++	Minimum Risk	Business dealings permissible with minimum risk of default
A+	Low Risk	Business dealings permissible with low risk of default
A	Acceptable Risk	Business dealings permissible with moderate risk of default
B	Medium Risk	Business dealings permissible on a regular monitoring basis
C	Medium High Risk	Business dealings permissible preferably on secured basis
D	High Risk	Business dealing not recommended or on secured terms only
NB	New Business	No recommendation can be done due to business in infancy stage
NT	No Trace	No recommendation can be done as the business is not traceable

NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.

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 are as follows:

· Financial condition covering various ratios

· Company background and operations size

· Promoters / Management background

· Payment record

· Litigation against the subject

· Industry scenario / competitor analysis

· Supplier / Customer / Banker review (wherever available)

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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.