MIRA INFORM REPORT

Report Date :

01.12.2011

IDENTIFICATION DETAILS

Name :	KING MILLING CO., LTD.
Registered Office :	49 Moo 2, Soi Suksawad 43, Suksawad Road, T. Bangkru, A. Phrapradaeng, Samutprakarn 10130
Country :	Thailand
Financials (as on) :	31.12.2010
Date of Incorporation :	12.01.2000
Com. Reg. No.:	0115543000340
Legal Form :	Private Limited Company
Line of Business :	Manufacturer, Distributor and Distributor of Wheat Flour Products
No. of Employees :	220

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 :	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, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
Thailand	B1	B1

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

Company name

KING MILLING CO., LTD.

SUMMARY

BUSINESS ADDRESS : 49 MOO 2, SOI SUKSAWAD 43, SUKSAWAD ROAD,

T. BANGKRU, A. PHRAPRADAENG,

SAMUTPRAKARN 10130 , THAILAND

TELEPHONE : [66] 2828-3090-1, 2818-3053-4

FAX : [66] 2818-3139

E-MAIL ADDRESS : info@kinghuat.com

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 2000

REGISTRATION NO. : 0115543000340

CAPITAL REGISTERED : BHT. 185,000,000

CAPITAL PAID-UP : BHT. 185,000,000

SHAREHOLDER’S PROPORTION : THAI : 100%

FISCAL YEAR CLOSING DATE : DECEMBER 31

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. SOMSAK YONGYINGSAKTHAVORN, THAI

MANAGING DIRECTOR

NO. OF STAFF : 220

LINES OF BUSINESS : WHEAT FLOUR PRODUCTS

MANUFACTURER, DISTRIBUTOR AND

DISTRIBUTOR

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 January 12, 2000 as a private limited company under the name style KING MILLING CO., LTD., by Thai groups, with the business objective to manufacture various kinds of wheat flour products to domestic and overseas markets. It currently employs 220 staff.

The subject’s registered address is 49 Moo 2, Soi Suksawad 43, Suksawad Rd., T. Bangkru, A. Phrapradaeng, Samutprakarn 10130, and this is the subject’s current operation address.

THE BOARD OF DIRECTOR

Name	Nationality	Age
Mr. Somboon Yongyingsakthavorn	Thai	33
Mr. Somsak Yongyingsakthavorn	Thai	39
Mr. Somkiat Yongyingsakthavorn	Thai	-

AUTHORIZED PERSON

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

MANAGEMENT

Mr. Somsak Yongyingsakthavorn is the Managing Director.

He is Thai nationality with the age of 39 years old.

BUSINESS OPERATIONS

The subject is engaged in manufacturing, exporting and distributing various kinds of wheat flour and corn starch products, with the production capacity of 110,000 tons per annum.

MAJOR BRANDS

“GOLD HORSE”, “BLUE HORSE”, “RED HORSE”, “GOLD CHERRY”, “PIGEON”,

“YELLOW K”, “TULIP”, “RED CROWN”, “GREEN CROWN”, “PURPLE CROWN” and “RED CHERRY”

PURCHASE

Some of its raw material, such as sodium benzoate, tapioca starch and etc., as well as machinery are imported from U.S.A., Republic of China, Japan, Taiwan and European countries.

SALES

80% of the products is sold locally by wholesale to dealers, manufacturers and end-users.

EXPORT

20% of the products is exported to Japan, Hong Kong, Singapore, Republic of China, Taiwan, Korea, Malaysia and Indonesia.

MAJOR CUSTOMER

King Huat International Limited Partnership

RELATED AND AFFILIATED COMPANIES

King Huat International Limited Partnership

Business Type : Distributor of food additives, bakery ingredient & others.

King Milling [Suratthani] Co., Ltd.

Business Type : Manufacturer of wheat flour

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 L/C at sight or T/T.

Exports are against T/T.

BANKING

Bangkok Bank Public Co., Ltd.

Kasikornbank Public Co., Ltd.

EMPLOYMENT

The subject employs approximately 220 staff.

LOCATION DETAILS

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

REMARK

MAXIMUM CREDIT SHOULD BE GRANTED AT US$ 1,000,000.

COMMENT

Wheat flour has been used in various industries from food to consumer goods. The market is still promising as local consumption and exports remains healthy.

The subject is doing good business and has strong potential in long term prospect.

FINANCIAL INFORMATION

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

The capital was increased later as following:

Bht. 50,000,000 on September 5, 2002

Bht. 80,000,000 on September 16, 2004

Bht. 100,000,000 on September 1, 2005

Bht. 185,000,000 on June 16, 2006

The latest registered capital was increased to Bht. 185,000,000 divided into 1,850,000 shares of Bht. 100 each with fully paid.

THE SHAREHOLDERS LISTED WERE

[as at August 25, 2011]

NAME	HOLDING	%
Mr. Somboon Yongyingsakthavorn Nationality: Thai Address : 98/360 Chongnonsi, Yannawa, Bangkok	462,425	24.99
Mr. Somsak Yongyingsakthavorn Nationality: Thai Address : 95/359 Chongnonsi, Yannawa, Bangkok	462,425	24.99
Mr. Somyos Yongyingsakthavorn Nationality: Thai Address : 95/360 Chongnonsi, Yannawa, Bangkok	462,425	24.99
Mr. Somkiat Yongyingsakthavorn Nationality: Thai Address : 49 Moo 2, Suksawad 43 Rd., Bangkru, Phrapradaeng, Samutprakarn	462,425	24.99
Ms. Sunee Saetang Nationality: Thai Address : 95/358 Chongnonsi, Yannawa, Bangkok	100
Mrs. Kularb Viwatthanasarn Nationality: Thai Address : 72/15 Chongnonsi, Yannawa, Bangkok	100	= 0.04
Mr. Sombat Viwatthanasarn Nationality: Thai Address : 72/15 Chongnonsi, Yannawa, Bangkok	100

Total Shareholders : 7

Shareholders Structure [as at August 25, 2011]

Nationality	Shareholders	No. of Share	% Shares
Thai	7	1,850,000	100.00
Foreign	-	-	-
Total	7	1,850,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO.

Mrs. Sajee Puangphradej No. 1696

BALANCE SHEET [BAHT]

The latest financial figures published for December 31, 2010 & 2009 were:

ASSETS

Current Assets	2010	2009
Cash and Cash Equivalent	10,138,132.68	7,890,466.51
Short-term Investment	19,000,000.00	-
Trade Accounts & Notes Receivable	204,491,109.39	157,599,081.84
Inventories	427,962,723.13	598,472,334.43
Other Current Assets	119,928,888.75	67,317,656.82
Total Current Assets	781,520,853.95	831,279,539.60
Fixed Assets	230,147,979.33	244,995,674.32
Intangible Assets	-	2,368.46
Other Assets	235,179.88	235,179.88
Total Assets	1,011,904,013.16	1,076,512,762.26

LIABILITIES & SHAREHOLDERS' EQUITY [BAHT]

Current Liabilities	2010	2009
Bank Overdraft & Short-term Loan from Financial Institute	178,548,165.44	391,244,761.25
Trade Accounts & Notes Payable	189,677,946.05	97,244,122.88
Current Portion of Long-term Loans	32,444,987.75	33,380,494.80
Current Portion of Hire-purchase Payable	-	536,431.00
Short-term Loan from Person or Related Company	250,400,000.00	222,900,000.00
Other Current Liabilities	109,470,869.34	51,441,213.49
Total Current Liabilities	760,541,968.58	796,747,023.42
Other Long-term Loan	46,326,000.00	78,811,487.95
Total Liabilities	806,867,968.58	875,558,511.37
Shareholders' Equity
Share capital : Baht 100 par value authorized, issued and fully paid share capital 1,850,000 shares	185,000,000.00	185,000,000.00
Capital Paid	185,000,000.00	185,000,000.00
Retained Earning - Unappropriated	20,036,044.58	15,954,250.89
Total Shareholders' Equity	205,036,044.58	200,954,250.89
Total Liabilities & Shareholders' Equity	1,011,904,013.16	1,076,512,762.26

PROFIT & LOSS ACCOUNT

Revenue	2010	2009
Sales	763,855,882.46	501,627,496.76
Other Income	9,267,587.50	393,261.91
Total Revenues	773,123,469.96	502,020,758.67
Expenses
Cost of Goods Sold	730,578,701.56	434,482,057.62
Selling Expenses	8,065.00	-
Administrative Expenses	14,239,202.71	16,404,007.55
Total Expenses	744,825,969.27	450,886,065.17
Profit / [Loss] before Interest Expenses & Income Tax	28,297,500.69	51,134,693.50
Interest Expenses	[21,599,230.57]	[48,400,827.91]
Income Tax	[2,647,148.90]	[1,833,001.00]
Net Profit / [Loss]	4,051,121.22	900,864.59
Retained Earning, beginning of year	15,984,923.36	15,053,386.30
Retained Earning, end of year	20,036,044.58	15,954,250.89

FINANCIAL ANALYSIS

ITEM	UNIT	2010	2009
LIQUIDITY RATIO
CURRENT RATIO	TIMES	1.03	1.04
QUICK RATIO	TIMES	0.31	0.21
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	3.32	2.05
TOTAL ASSETS TURNOVER	TIMES	0.75	0.47
INVENTORY CONVERSION PERIOD	DAYS	213.81	502.77
INVENTORY TURNOVER	TIMES	1.71	0.73
RECEIVABLES CONVERSION PERIOD	DAYS	97.71	114.67
RECEIVABLES TURNOVER	TIMES	3.74	3.18
PAYABLES CONVERSION PERIOD	DAYS	94.76	81.69
CASH CONVERSION CYCLE	DAYS	216.76	535.75
PROFITABILITY RATIO
COST OF GOODS SOLD	%	95.64	86.61
SELLING & ADMINISTRATION	%	1.87	3.27
INTEREST	%	2.83	9.65
GROSS PROFIT MARGIN	%	5.57	13.46
NET PROFIT MARGIN BEFORE EX. ITEM	%	3.70	10.19
NET PROFIT MARGIN	%	0.53	0.18
RETURN ON EQUITY	%	1.98	0.45
RETURN ON ASSET	%	0.40	0.08
EARNING PER SHARE	BAHT	2.19	0.49
LEVERAGE RATIO
DEBT RATIO	TIMES	0.80	0.81
DEBT TO EQUITY RATIO	TIMES	3.94	4.36
TIME INTEREST EARNED	TIMES	1.31	1.06
ANNUAL GROWTH
SALES GROWTH	%	52.28
OPERATING PROFIT	%	(44.66)
NET PROFIT	%	349.69
FIXED ASSETS	%	(6.06)
TOTAL ASSETS	%	(6.00)

PROFITABILITY RATIO

Gross Profit Margin	5.57	Deteriorated	Industrial Average	12.10
Net Profit Margin	0.53	Deteriorated	Industrial Average	4.63
Return on Assets	0.40	Deteriorated	Industrial Average	6.48
Return on Equity	1.98	Deteriorated	Industrial Average	13.87

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 5.57%. When compared with the industry average, the ratio of the company was lower, indicated that company was originated from the 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 0.53%. 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 0.4%.

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 1.98%.

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

Return on Assets Uptrend

Return on Equity Uptrend

LIQUIDITY RATIO

Current Ratio	1.03	Satisfactory	Industrial Average	1.33
Quick Ratio	0.31
Cash Conversion Cycle	216.76

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 1.03 times in 2010, decrease from 1.04 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 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 0.31 times in 2010, increase from 0.21 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 217 days.

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

Current Ratio Uptrend

LEVERAGE RATIO

Debt Ratio	0.80	Acceptable	Industrial Average	0.58
Debt to Equity Ratio	3.94	Risky	Industrial Average	1.26
Times Interest Earned	1.31	Deteriorated	Industrial Average	3.55

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 1.32 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 0.8 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 Uptrend

ACTIVITY RATIO

Fixed Assets Turnover	3.32	Impressive	Industrial Average	2.97
Total Assets Turnover	0.75	Acceptable	Industrial Average	1.40
Inventory Conversion Period	213.81
Inventory Turnover	1.71	Deteriorated	Industrial Average	4.69
Receivables Conversion Period	97.71
Receivables Turnover	3.74	Acceptable	Industrial Average	5.27
Payables Conversion Period	94.76

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

Fixed Assets Turnover Uptrend

Total Assets Turnover Downtrend

Inventory Turnover Downtrend

Receivables Turnover Downtrend

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.52.16
UK Pound	1	Rs.81.29
Euro	1	Rs.69.47

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