3decades

MIRA INFORM REPORT

Report No. :	488457
Report Date :	30.01.2018

IDENTIFICATION DETAILS

Name :	ARCHROMA (THAILAND) COMPANY LIMITED

Registered Office :	6^th Floor, Vibulthani Tower 1, 3195/11 Rama 4 Road, Klongton, Klongtoey, Bangkok 10110

Country :	Thailand

Financials (as on) :	30.09.2017

Date of Incorporation :	21.05.2013

Com. Reg. No.:	0105556081777

Legal Form :	Private Limited Company

Line of Business :	The subject is engaged in manufacturing, distributing and exporting wide range of specialty chemicals for papers, packaging, textiles, adhesives, coating, sealant and other industries.

No. of Employees :	65

RATING & COMMENTS

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

MIRA’s Rating :

Credit Rating

Explanation

Rating Comments

Medium Risk

Business dealings permissible on a regular monitoring basis

Status :	Moderate

Payment Behaviour :	Slow

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

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 sustained strong growth and 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.

Growth has slowed in the last few years, however, due to domestic political turmoil and sluggish global demand. Nevertheless, 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, Thailand faces labor shortages, and domestic debt levels, political uncertainty, and an aging population pose risks to growth.

Source : CIA

Company name

ARCHROMA (THAILAND) COMPANY LIMITED

SUMMARY

BUSINESS ADDRESS : 6^TH FLOOR, VIBULTHANI TOWER 1,

3195/11 RAMA 4 ROAD, KLONGTON,

KLONGTOEY, BANGKOK 10110, THAILAND

TELEPHONE : [66] 2661-5360

FAX : [66] 2661-4040, 2661-4060

E-MAIL ADDRESS : textile.thailand@archroma.com

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 2013

REGISTRATION NO. : 0105556081777

TAX ID NO. : 3035839621

CAPITAL REGISTERED : BHT. 4,000,000

CAPITAL PAID-UP : BHT. 4,000,000

SHAREHOLDER’S PROPORTION : FOREIGN 100%

FISCAL YEAR CLOSING DATE : SEPTEMBER 30

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. MICHEL PIERRE ZUMSTEIN, FRENCH

MANAGING DIRECTOR

NO. OF STAFF : 65

LINES OF BUSINESS : SPECIALTY CHEMICALS

MANUFACTURER, DISTRIBUTOR AND 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 May 21, 2013 as a private limited company under the registered name ARCHROMA (THAILAND) COMPANY LIMITED by foreign groups, with the business objective to manufacture and distribute wide range of specialty chemicals to both local and overseas markets.

The subject is a joint venture between Archroma Thai Holdings, LLC, the American company and Archroma Textiles Sarl., the Luxembourgish company. It currently employs 65 staff.

The subject’s registered address is 6^th Floor, Vibulthani Tower 1, 3195/11 Rama 4 Road, Klongton, Klongtoey, Bangkok 10110, and this is the subject’s current operation address.

THE BOARD OF DIRECTOR

Name	Nationality	Age

Mr. Michel Pierre Zumstein	French	48
Mr. Aaron Charles Davenport	American	48
Mr. Jerome Truzzolino	American	54
Mr. Mark Nathan Delevie	American	58
Mr. Suriya Vithayatamsopon	Thai	54

AUTHORIZED PERSON

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

MANAGEMENT

Mr. Michel Pierre Zumstein is the Managing Director.

He is French nationality with the age of 48 years old.

BUSINESS OPERATIONS

The subject is engaged in manufacturing, distributing and exporting wide range of specialty chemicals for papers, packaging, textiles, adhesives, coating, sealant and other industries.

TRADEMARK

“ARCHROMA”

PURCHASE

Raw materials are purchased from suppliers both domestic and overseas, mainly in U.S.A., India, Republic of China, Luxembourg, France and Switzerland.

MAJOR SUPPLIERS

Archroma Textiles Sarl. : Luxembourg

Clariant International Ltd. : Switzerland

Clariant (Thailand) Co., Ltd. : Thailand

Thai-MC Company Limited : Thailand

SALES

90% of the products is sold locally to wholesalers, manufacturers and end-users, the remaining 10% is exported to India, Cambodia, India, Singapore and Vietnam.

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 currently employs 65 staff.

LOCATION DETAILS

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

Factory and warehouse are located at 851 Moo 4, Bangpoo Industrial Estate, Soi 11, Sukhumvit Road, T. Praeksa, A. Muang, Samutprakarn 10280.

COMMENT

The subject’s operating performance as of September 30, 2017 was slowdown from a decrease in both sales income and a net loss comparing to the previous year, resulted by slowdown of economy and less consumption of specialty chemical from related industries. Nevertheless, the subject’s business is still promising in long-term prospect in line with an improvement and growth of both local and overseas industries.

FINANCIAL INFORMATION

The capital was registered at Bht. 3,000,000 divided into 30,000 shares of Bht. 100 each.

On May 25, 2016, the registered capital was increased to Bht. 4,000,000 divided into 40,000 shares of Bht. 100 each with fully paid.

THE SHAREHOLDERS LISTED WERE : [as at December 22, 2016] at

Bht. 4,000,000 of capitalization

NAME	HOLDING	%

Archroma Thai Holdings, LLC Nationality: American Address : 1209 Orange Street, Wilmington, New Castle, Delaware, U.S.A.	20,400	51.00
Archroma Textiles SARL Nationality: Luxembourg Address : 19 Ru de Bitbourg, L-1273 Luxembourg	19,599	49.00
Archroma Paper SARL Nationality: Luxembourg Address : 19 Ru de Bitbourg, L-1273 Luxembourg	1	-

Total Shareholders : 3

Share Structure [as at December 22, 2016]

Nationality	Shareholders	No. of Share	% Shares

Thai	-	-	-
Foreign	3	40,000	100.00
Total	3	40,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO. :

Mr. Bandit Tangpakorn No. 8509

BALANCE SHEET [BAHT]

The latest financial figures published for September 30, 2017, 2016 and 2015 were:

ASSETS

Current Assets	2017	2016	2015

Cash and Cash Equivalents	20,276,305	36,950,140	42,547,946
Trade Accounts and Other Receivable	183,480,413	172,964,588	191,347,557
Inventories	139,846,515	151,750,460	174,602,089
Other Current Assets	75,794,261	74,016,273	49,997,731
Total Current Assets	419,397,494	435,681,461	458,495,323

Property, Plant and Equipment	197,060,224	151,988,817	138,383,912
Intangible Assets	1,609,057	1,973,943	2,313,584
Total Assets	618,066,775	589,644,221	599,192,819

LIABILITIES & SHAREHOLDERS' EQUITY [BAHT]

Current Liabilities	2017	2016	2015

Trade Accounts and Other Payable	255,230,352	250,884,967	268,050,933
Short-term Loan	181,410,284	153,800,955	161,116,704
Other Current Liabilities	19,713,699	16,665,671	13,565,684
Total Current Liabilities	456,354,335	421,351,593	442,733,321

Provision for Employee Benefits	11,245,296	6,885,452	8,065,618
Other Non-current Liabilities	10,582,643	15,787,420	8,709,154
Total Liabilities	478,182,274	444,024,465	459,508,093

Shareholders’ Equity

Share capital : Baht 100 par value authorized, and issued share capital 40,000 shares in 2017 & 2016	4,000,000	4,000,000
30,000 shares in 2015			3,000,000
Capital Paid	4,000,000	4,000,000	3,000,000
Premium on Share Capital	57,762,233	57,762,233	57,762,233
Retained Earning -Unappropriated [Deficit]	78,122,268	83,857,523	78,922,493
Total Shareholders’ Equity	139,884,501	145,619,756	139,684,726
Total Liabilities and Shareholders’ Equity	618,066,775	589,644,221	599,192,819

PROFIT & LOSS ACCOUNT

Revenue	2017	2016	2015

Sales or Services Income	922,604,501	996,916,161	981,570,584
Other Income	31,621,942	27,495,704	21,396,836
Total Revenues	954,226,443	1,024,411,865	1,002,967,420
Expenses

Cost of Goods Sold or Services	707,873,248	752,961,071	734,444,863
Selling Expenses	80,107,802	86,957,285	85,751,596
Administrative Expenses	161,111,993	152,626,996	157,865,300
Other Expenses	-	-	23,612,545
Total Expenses	949,093,043	992,545,352	1,001,674,304

Profit /[Loss] before Financial Cost and Income Tax	5,133,400	31,866,513	1,293,116
Financial Cost	[14,868,913]	[11,668,197]	[14,145,943]

Profit /[Loss] before Income Tax	[9,735,513]	20,198,316	[12,852,827]
Income Tax Expenses	4,000,258	[15,263,286]	7,477,370
Net Profit / [Loss]	[5,735,255]	4,935,030	[5,375,457]

FINANCIAL ANALYSIS

ITEM	UNIT	2017	2016	2015

LIQUIDITY RATIO
CURRENT RATIO	TIMES	0.92	1.03	1.04
QUICK RATIO	TIMES	0.45	0.50	0.53

ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	4.68	6.56	7.09
TOTAL ASSETS TURNOVER	TIMES	1.49	1.69	1.64
INVENTORY CONVERSION PERIOD	DAYS	72.11	73.56	86.77
INVENTORY TURNOVER	TIMES	5.06	4.96	4.21
RECEIVABLES CONVERSION PERIOD	DAYS	72.59	63.33	71.15
RECEIVABLES TURNOVER	TIMES	5.03	5.76	5.13
PAYABLES CONVERSION PERIOD	DAYS	131.60	121.62	133.21
CASH CONVERSION CYCLE	DAYS	13.09	15.27	24.71

PROFITABILITY RATIO
COST OF GOODS SOLD	%	76.73	75.53	74.82
SELLING & ADMINISTRATION	%	26.15	24.03	24.82
INTEREST	%	1.61	1.17	1.44
GROSS PROFIT MARGIN	%	26.70	27.23	27.36
NET PROFIT MARGIN BEFORE EX. ITEM	%	0.56	3.20	0.13
NET PROFIT MARGIN	%	(0.62)	0.50	(0.55)
RETURN ON EQUITY	%	(4.10)	3.39	(3.85)
RETURN ON ASSET	%	(0.93)	0.84	(0.90)
EARNING PER SHARE	BAHT	(143.38)	123.38	(179.18)

LEVERAGE RATIO
DEBT RATIO	TIMES	0.77	0.75	0.77
DEBT TO EQUITY RATIO	TIMES	3.42	3.05	3.29
TIME INTEREST EARNED	TIMES	0.35	2.73	0.09

ANNUAL GROWTH
SALES GROWTH	%	(7.45)	1.56
OPERATING PROFIT	%	(83.89)	2,364.32
NET PROFIT	%	(216.22)	191.81
FIXED ASSETS	%	29.65	9.83
TOTAL ASSETS	%	4.82	(1.59)

ANNUAL GROWTH : ACCEPTABLE

An annual sales growth is -7.45%. Turnover has decreased from THB 996,916,161.00 in 2016 to THB 922,604,501.00 in 2017. While net profit has decreased from THB 4,935,030.00 in 2016 to THB -5,735,255.00 in 2017. And total assets has increased from THB 589,644,221.00 in 2016 to THB 618,066,775.00 in 2017.

PROFITABILITY : RISKY

PROFITABILITY RATIO

Gross Profit Margin	26.70	Satisfactory	Industrial Average	39.67
Net Profit Margin	(0.62)	Deteriorated	Industrial Average	2.56
Return on Assets	(0.93)	Deteriorated	Industrial Average	3.90
Return on Equity	(4.10)	Deteriorated	Industrial Average	9.47

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 26.7%. 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 -0.62%. 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 -0.93%.

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 -4.1%.

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	0.92	Risky	Industrial Average	1.02
Quick Ratio	0.45
Cash Conversion Cycle	13.09

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 0.92 times in 2017, decrease from 1.03 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 0.45 times in 2017, decrease from 0.5 times, 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 14 days.

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

Current Ratio Downtrend

LEVERAGE : RISKY

LEVERAGE RATIO

Debt Ratio	0.77	Acceptable	Industrial Average	0.62
Debt to Equity Ratio	3.42	Risky	Industrial Average	1.62
Times Interest Earned	0.35	Risky	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 0.35 lower than 1, so the company is not generating enough cash from EBIT to meet its interest obligations.

Debt Ratio shows the proportion of a company's assets which are financed through debt. The company's figure is 0.77 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 : IMPRESSIVE

ACTIVITY RATIO

Fixed Assets Turnover	4.68	Impressive	Industrial Average	-
Total Assets Turnover	1.49	Satisfactory	Industrial Average	1.53
Inventory Conversion Period	72.11
Inventory Turnover	5.06	Satisfactory	Industrial Average	6.92
Receivables Conversion Period	72.59
Receivables Turnover	5.03	Satisfactory	Industrial Average	6.07
Payables Conversion Period	131.60

The company's Account Receivable Ratio is calculated as 5.03 and 5.76 in 2017 and 2016 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 2017 decreased from 2016. 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 decreased from 74 days at the end of 2016 to 72 days at the end of 2017. This represents a positive trend. And Inventory turnover has increased from 4.96 times in year 2016 to 5.06 times in year 2017.

The company's Total Asset Turnover is calculated as 1.49 times and 1.69 times in 2017 and 2016 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 63.55
UK Pound	1	INR 89.82
Euro	1	INR 78.87
Thai Baht	1	INR 2.02

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

INFORMATION DETAILS

Analysis Done by :	VAR

Report Prepared by :	TPT

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)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.

MIRA INFORM REPORT

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