MIRA INFORM REPORT

Report Date :

29.12.2011

IDENTIFICATION DETAILS

Name :	VERTEX CHEMICAL CO., LTD.
Registered Office :	22 Soi Premier 1 Yaek 4, Srinakarin 57 Road, Nongbon, Pravet, Bangkok 10250
Country :	Thailand
Financials (as on) :	31.12.2010
Date of Incorporation :	14.02.2000
Com. Reg. No.:	0105543015657
Legal Form :	Private Limited Company
Line of Business :	Importer and Distributor of Petroleum Chemicals
No. of Employees :	8

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, 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

VERTEX CHEMICAL CO., LTD.

SUMMARY

BUSINESS ADDRESS : 22 SOI PREMIER 1 YAEK 4, SRINAKARIN 57 ROAD,

NONGBON, PRAVET, BANGKOK 10250,

THAILAND

TELEPHONE : [66] 2743-3855

FAX : [66] 2743-3866

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 2000

REGISTRATION NO. : 0105543015657

CAPITAL REGISTERED : BHT. 15,000,000

CAPITAL PAID-UP : BHT. 15,000,000

SHAREHOLDER’S PROPORTION : THAI : 100%

FISCAL YEAR CLOSING DATE : DECEMBER 31

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. KAMOL CHANKAJORN, THAI

MANAGING DIRECTOR

NO. OF STAFF : 8

LINES OF BUSINESS : PETROLEUM CHEMICALS

IMPORTER AND DISTRIBUTOR

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 February 14, 2000 as a private limited company under the name style VERTEX CHEMICAL CO., LTD., by Thai groups, in order to import and distribute various kinds of chemicals for petroleum industry. It currently employs 8 staff.

The subject’s registered address is 22 Soi Premier 1 Yaek 4, Srinakarin 57 Rd., Nongbon, Pravet, Bangkok 10250, and this is the subject’s current operation address.

THE BOARD OF DIRECTOR

Mr. Kamol Chankajorn

AUTHORIZED PERSON

The above director can sign on behalf of the subject with company’s affixed.

MANAGEMENT

Mr. Kamol Chankajorn is the Managing Director.

He is Thai nationality with the age of 46 years old.

Mrs. Somsri Chankajorn is the Deputy Managing Director [Sales Manager].

She is Thai nationality.

BUSINESS OPERATIONS

The subject is engaged in importing and distributing various kinds of industrial chemicals, specialty additive chemical and surface modifiers chemical such as sodium, caustic soda and etc., mainly for petroleum, oil, paints and coating industries.

IMPORT

Most of the products are imported from U.S.A., France, Germany, Republic of China and Taiwan.

MAJOR SUPPLIER

Raybo Chemical Company : U.S.A.

SALES

The products are sold locally by wholesale to manufacturers and end-users.

RELATED AND AFFILIATED COMPANIES

Sang Mongkol Oil Co., Ltd.

Business Type : Distributor of petroleum products.

Sang Thong Petroleum Co., Ltd.

Business Type : Distributor of petroleum products.

Sang Anan Petroleum Co., Ltd.

Business Type : Rental service of fuel oil trucks.

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.

BANKING

Bangkok Bank Public Company Limited.

EMPLOYMENT

The subject employs 8 staff.

LOCATION DETAILS

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

REMARK

MAXIMUM CREDIT SHOULD BE GRANTED AT US$ 500,000.

COMMENT

The subject was formed in 2000 as an importer and distributor of petroleum chemicals. Its products are served mainly to industrial sector. Sales has significantly dropped in 2010 compared to the previous year.

However, during the massive floods in September-November sales were dropped sharply from supply disrupted, but estimated that after flood demand of industrial chemicals will ramp up from industrial improvement.

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. 3,000,000 on September 10, 2003

Bht. 15,000,000 on September 10, 2004

The latest registered capital was increased to Bht. 15 million, divided into 150,000 shares of Bht. 100 each with fully paid.

THE SHAREHOLDERS LISTED WERE

[as at April 30, 2011]

NAME	HOLDING	%
Mrs. Somsri Chankajorn Nationality: Thai Address : 129/4 Na Ranong Rd., Klongtoey, Bangkok	57,000	38.00
Mr. Kamol Chankajorn Nationality: Thai Address : 149/66 Nonsee Rd., Chongnonsi, Yannawa, Bangkok	30,000	20.00
Mr. Vichai Larpsongsuk Nationality: Thai Address : 93-95 Charoennakorn 13 Rd., Klongtonsai, Bangkok	30,000	20.00
Mrs. Aree Larpsongsuk Nationality: Thai Address : 93-95 Charoennakorn 13 Rd., Klongtonsai, Bangkok	30,000	20.00
Mrs. Kalaya Phanpakdeesakul Nationality: Thai Address : 230 Kohlak Rd., Kohlak, Muang, Prachuabkirikhan	1,000

Mr. Sitthichai Aoonhasuthiyanont Nationality: Thai Address : 234 Kohlak Rd., Kohlak, Muang, Prachuabkirikhan	1,000	= 2.00
Mrs. Aree Aoonhasuthiyanont Nationality: Thai Address : 1/15 Sukchit Rd., Muang, Prachuabkirikhan	1,000

Total Shareholders : 7

Share Structure [as at April 30, 2011]

Nationality	Shareholders	No. of Share	% Shares
Thai	7	150,000	100.00
Foreign	-	-	-
Total	7	150,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO.

Mr. Withaya Wattanosoponwong No. 2342

BALANCE SHEET [BAHT]

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

ASSETS

Current Assets	2010	2009
Cash and Cash Equivalents	1,331,197.45	1,502,959.30
Trade Accounts Receivable	16,085,666.77	12,871,441.46
Inventories	15,671,927.09	15,110,440.74
Other Current Assets	140,162.50	481,540.94
Total Current Assets	33,228,953.81	29,966,382.44
Fixed Assets	5,283,802.59	6,689,876.09
Total Assets	38,512,756.40	36,656,258.53

LIABILITIES & SHAREHOLDERS' EQUITY [BAHT]

Current Liabilities	2010	2009
Trade Accounts Payable	1,281,164.50	3,478,976.40
Accrued Income Tax	920,644.06	1,021,896.67
Other Current Liabilities	163,806.52	204,736.82
Total Current Liabilities	2,365,615.08	4,705,609.89
Total Liabilities	2,365,615.08	4,705,609.89
Shareholders' Equity
Share capital : Baht 100 value authorized, issued and fully paid share capital 150,000 shares	15,000,000.00	15,000,000.00
Capital Paid	15,000,000.00	15,000,000.00
Retained Earning- Unappropriated	21,147,141.32	16,950,648.64
Total Shareholders' Equity	36,147,141.32	31,950,648.64
Total Liabilities & Shareholders' Equity	38,512,756.40	36,656,258.53

PROFIT & LOSS ACCOUNT

Revenue	2010	2009
Sales Income	46,134,465.12	99,252,789.02
Other Income	6,116.66	3,244.48
Total Revenues	46,140,581.78	99,256,033.50
Expenses
Cost of Goods Sold	34,002,202.79	87,692,962.58
Selling Expenses	166,675.54	170,113.24
Administrative Expenses	5,654,552.88	5,391,882.28
Total Expenses	39,823,431.21	93,254,958.10
Profit Before Income Tax	6,317,150.57	6,001,075.40
Income Tax	[2,120,657.89]	[2,011,919.22]
Net Profit / [Loss]	4,196,492.68	3,989,156.18

FINANCIAL ANALYSIS

ITEM	UNIT	2010	2009
LIQUIDITY RATIO
CURRENT RATIO	TIMES	14.05	6.37
QUICK RATIO	TIMES	7.36	3.05
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	8.73	14.84
TOTAL ASSETS TURNOVER	TIMES	1.20	2.71
INVENTORY CONVERSION PERIOD	DAYS	168.23	62.89
INVENTORY TURNOVER	TIMES	2.17	5.80
RECEIVABLES CONVERSION PERIOD	DAYS	127.26	47.33
RECEIVABLES TURNOVER	TIMES	2.87	7.71
PAYABLES CONVERSION PERIOD	DAYS	13.75	14.48
CASH CONVERSION CYCLE	DAYS	281.74	95.75
PROFITABILITY RATIO
COST OF GOODS SOLD	%	73.70	88.35
SELLING & ADMINISTRATION	%	12.62	5.60
INTEREST	%	-	-
GROSS PROFIT MARGIN	%	26.31	11.65
NET PROFIT MARGIN BEFORE EX. ITEM	%	13.69	6.05
NET PROFIT MARGIN	%	9.10	4.02
RETURN ON EQUITY	%	11.61	12.49
RETURN ON ASSET	%	10.90	10.88
EARNING PER SHARE	BAHT	27.98	26.59
LEVERAGE RATIO
DEBT RATIO	TIMES	0.06	0.13
DEBT TO EQUITY RATIO	TIMES	0.07	0.15
TIME INTEREST EARNED	TIMES	-	-
ANNUAL GROWTH
SALES GROWTH	%	(53.52)
OPERATING PROFIT	%	5.27
NET PROFIT	%	5.20
FIXED ASSETS	%	(21.02)
TOTAL ASSETS	%	5.06

PROFITABILITY RATIO

Gross Profit Margin	26.31	Impressive	Industrial Average	25.03
Net Profit Margin	9.10	Impressive	Industrial Average	(1.41)
Return on Assets	10.90	Impressive	Industrial Average	2.25
Return on Equity	11.61	Impressive	Industrial Average	7.58

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 26.31%. When compared with the industry average, the ratio of the company was higher, this 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 9.1%, 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 10.9%, 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 11.61%, higher figure when compared with those of its average competitors in the same industry, indicated that business was an efficient profits in a dominant position within its industry.

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

Return on Assets Downtrend

Return on Equity Downtrend

LIQUIDITY RATIO

Current Ratio	14.05	Acceptable	Industrial Average	18.85
Quick Ratio	7.36
Cash Conversion Cycle	281.74

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 14.05 times in 2010, increased from 6.37 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 7.36 times in 2010, increased from 3.05 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 282 days.

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

Current Ratio Uptrend

LEVERAGE RATIO

Debt Ratio	0.06	Impressive	Industrial Average	0.64
Debt to Equity Ratio	0.07	Impressive	Industrial Average	2.03
Times Interest Earned	-		Industrial Average	609.62

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 0.06 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 Uptrend

Times Interest Earned Uptrend

ACTIVITY RATIO

Fixed Assets Turnover	8.73	Deteriorated	Industrial Average	3,447.02
Total Assets Turnover	1.20	Acceptable	Industrial Average	1.61
Inventory Conversion Period	168.23
Inventory Turnover	2.17	Deteriorated	Industrial Average	18.76
Receivables Conversion Period	127.26
Receivables Turnover	2.87	Deteriorated	Industrial Average	9.76
Payables Conversion Period	13.75

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

Fixed Assets Turnover Uptrend

Total Assets Turnover Uptrend

Inventory Turnover Uptrend

Receivables Turnover Uptrend

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.53.21
UK Pound	1	Rs.83.32
Euro	1	Rs.69.51

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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