MIRA INFORM REPORT

Report Date :

21.08.2012

IDENTIFICATION DETAILS

Name :	THAI STEEL SERVICE CENTER LIMITED
Registered Office :	47 Moo 7, Soi Watmahawongse, Poochaosamingprai Road, Phrapradaeng, Samutprakarn 10130
Country :	Thailand
Financials (as on) :	31.12.2011
Date of Incorporation :	16.09.1980
Com. Reg. No.:	0105523016402
Legal Form :	Private Limited Company
Line of Business :	Importer & distributor of steel products
No. of Employees :	400 employees

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^st, 2012

Country Name	Previous Rating (31.12.2011)	Current Rating (31.03.2012)
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

THAI STEEL SERVICE CENTER LIMITED

SUMMARY

BUSINESS ADDRESS : 47 MOO 7, SOI WATMAHAWONGSE,

POOCHAOSAMINGPRAI ROAD, PHRAPRADAENG,

SAMUTPRAKARN 10130, THAILAND

TELEPHONE : [66] 2398-0153-4

FAX : [66] 2398-5339, 2748-3842

E-MAIL ADDRESS : thaipiya@tsscthai.com

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 1980

REGISTRATION NO. : 0105523016402 [Former : 1643/2523]

TAX ID NO. : 3101120271

CAPITAL REGISTERED : BHT. 216,000,000

CAPITAL PAID-UP : BHT. 216,000,000

SHAREHOLDER’S PROPORTION : THAI : 15.61%

JAPANESE : 84.39%

FISCAL YEAR CLOSING DATE : DECEMBER 31

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. KEIZO HASHIMOTO, JAPANESE

PRESIDENT

NO. OF STAFF : 400

LINES OF BUSINESS : STEEL PRODUCTS

IMPORTER & 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 September 16, 1980 as a private limited company under the name style THAI STEEL SERVICE CENTER LIMITED, by Thai and Japanese groups, to import and distribute of steel products. It currently employs approximate 400 staff. Subject is a subsidiary of Sumitomo Corporation of Japan.

The subject received ISO 9002 certification for coil processing center from LRQA on May 27, 2000.

The subject’s registered address is 47 Moo 7, Soi Watmahawongse, Poochasamingprai Rd., Phrapradaeng, Samutprakarn 10130, and this is the subject’s current operation address.

THE BOARD OF DIRECTORS

Name	Nationality	Age
Mr. Hisahiro Maeda	Japanese	50
Mr. Keizo Hashimoto	Japanese	51
Mr. Noriaki Akaike	Japanese	41
Mr. Takeshi Kawanari	Japanese	36

AUTHORIZED PERSON

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

MANAGEMENT

Mr. Keizo Hashimoto is the President.

He is Japanese nationality with the age of 51 years old.

Mr. Wuthinan Aroonroj is the General Manager & Factory Manager.

He is Thai nationality.

Mr. Charnchai Luekhajornsak is the Sales & Marketing Manager.

He is Thai nationality.

BUSINESS OPERATIONS

The subject’s activities are importer and distributor of steel products for automobile & home appliance industries such as hot rolled steel sheet, cold rolled steel sheet, electric galvanized steel sheet, hot dip galvanized steel sheet, high dipped galvanized alloy steel sheet, high carbon steel sheet, aluminized, alumi-alloy coated steel sheet and etc.

The subject also provides steel cutting, rolling, bending and modifying services.

PURCHASE

80% of its products is imported from Japan and Republic of China, and the rest 20% is purchased locally.

MAJOR SUPPLIERS

Sumitomo Corporation : Japan

Thai Cold Rolled Steel Sheet Public Company Limited : Thailand

Sahaviriya Steel Industries Public Company Limited : Thailand

Nisshin Steel Co., Ltd. : Japan

Sumitomo Metal Industries Ltd. : Japan

JFE Steel Corporation : Japan

Nippon Steel Corporation : Japan

China Steel Corporation : Republic of China

SALES [LOCAL]

100% of its products is sold locally by wholesale to manufacturer and end-users, in automobile, home appliances, furniture and construction industries.

MAJOR CUSTOMERS

Honda Trading [Thailand] Co., Ltd. : Thailand

Nitco Siam Co., Ltd. : Thailand

Toyota Tsusho [Thailand] Co., Ltd. : Thailand

Thai Suzuki Motor Co., Ltd. : Thailand

Thai Yamaha Group : Thailand

Thai Summit Autoparts Industry Co., Ltd. : Thailand

Summit Autobody Co., Ltd. : Thailand

Mitsubishi Electric Kan Yong Watana Co., Ltd. : Thailand

Thai Toshiba Electric Industrial Co., Ltd. : Thailand

Sumitomo Corporation Thailand Ltd. : Thailand

SUBSIDIARY COMPANY

Sumisho Laser Welding [Thailand] Ltd.

Business Type : Steel welding and cutting service.

Investment : 99.99% of total shares

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 credit term of 30-60 days.

Imports are by L/C at sight or T/T.

BANKING

Sumitomo Mitsui Banking Corporation

[Bangkok Branch]

Kasikornbank Public Co., Ltd.

[Head Office : 1 Kasikorn Lane, Rajburana Rd., Rajburana , Bangkok 10140]

EMPLOYMENT

The subject employs approximately 400 staff. [office staff and factory workers]

LOCATION DETAILS

The premise is owned for operating office, factory I & warehouse in a 2 storey building at the heading address on 32,000 square meters plot of land in an industrial area.

Factory II is located at 789/2 Moo 1, T. Nongkham, A. Sriracha, Cholburi 20110 on 36,800 square meters plot of land.

COMMENT

Various industries claimed that domestic steel supply was insufficient to meet demand, therefore imported steel could help ease supply shortage and high prices in the local market. Steel importer would stay in positive position as current demand in domestic market remains surge.

FINANCIAL INFORMATION

The capital was initially registered at Bht. 28 million, divided into 28,000 shares of Bht. 1,000 each.

The capital was increased later as followings :

Bht. 32 million in June, 1987

Bht. 47 million in September, 1990

Bht. 94 million in January, 1992

Bht. 194 million on August 25, 1992

Bht. 216 million on February 19, 1999

The latest registered capital was increased to Bht. 216 million, divided into 216,000 shares of Bht. 1,000 each with fully paid.

THE SHAREHOLDERS LISTED WERE : [as of April 25, 2012]

NAME	HOLDING	%
Sumitomo Corporation Nationality: Japanese Address : 1-8-11, Harumi, Suo-ku, Tokyo, 104-8610 Japanese	182,279	84.39
Sumitomo Corporation Thailand Ltd. Nationality: Thai Address : 87 Wireless Rd., Lumpini, Pathumwan, Bangkok	33,720	15.61
Mr. Keizo Hashimoto Nationality: Japanese Address : 3-3-17 Seikimashinami, Nerima-ku, Tokyo, Japan	1	-

Total shareholders : 3

Share Structure [as at April 25, 2012]

Nationality	Shareholders	No. of Share	% Shares
Thai	1	33,720	15.61
Foreign-Japanese	2	182,280	84.39
Total	3	216,000	100.00

Mrs. Siriphen Sukcharoenyingyong No. 3636

BALANCE SHEET [BAHT]

The latest financial figures published as at December 31, 2011 & 2010 were:

ASSETS

Current Assets	2011	2010
Cash in hand & at Bank	20,413,103	11,409,523
Trade Accounts Receivable	814,794,184	926,309,328
Receivable - Related Companies	1,754,475	888,356
Inventories	1,541,376,927	891,259,105
Other Current Assets	9,1940,030	2,570,946
Total Current Assets	2,470,278,719	1,832,437,258
Investment in Subsidiary	96,202,334	-
Investment in Other Equity Securities	28,346,425	31,586,425
Fixed Assets	509,053,931	422,307,822
Intangible Assets	6,919,191	5,951,237
Other Assets	2,236,069	1,485,000
Total Assets	3,113,036,669	2,293,767,742

LIABILITIES & SHAREHOLDERS' EQUITY [BAHT]

Current Liabilities	2011	2010
Short-term Loan from Financial Institution	1,362,000,000	500,000,000
Trade Accounts & Notes Payable	612,544,417	758,118,568
Accrued Income Tax	449,697	20,050,977
Other Current Liabilities	97,678,662	39,860,669
Total Current Liabilities	2,072,672,776	1,318,030,214
Obligation for Employee Benefits	12,327,127	-
Total Liabilities	2,084,999,903	1,318,030,214
Shareholders' Equity
Share capital : Baht 1,000 par value authorized, issued and fully paid share capital 216,000 shares	216,000,000	216,000,000
Capital Paid	216,000,000	216,000,000
Retained Earning Appropriated for Statutory Reserve	23,020,387	23,020,387
Unappropriated	789,016,379	736,717,141
Total Shareholders' Equity	1,028,036,766	975,737,528
Total Liabilities & Shareholders' Equity	3,113,036,669	2,293,767,742

PROFIT & LOSS ACCOUNT

Revenue	2011	2010
Sales & Service Income	3,777,856,859	3,608,842,803
Other Income	36,744,604	26,025,004
Gain on Exchange Rate	9,017,380	3,780,813
Total Revenues	3,823,618,843	3,638,648,620
Expenses
Cost of Goods Sold & Service	3,527,776,907	3,301,837,258
Selling Expenses	61,576,383	65,636,268
Administrative Expenses	112,199,521	75,858,503
Total Expenses	3,701,552,811	3,443,332,029
Profit before Financial Cost & Income Tax	122,066,032	195,316,591
Financial Cost	[27,890,834]	[6,415,838]
Income Tax	[31,481,423]	[52,921,580]
Net Profit / [Loss]	62,693,775	135,979,173

FINANCIAL ANALYSIS

ITEM	UNIT	2011	2010
LIQUIDITY RATIO
CURRENT RATIO	TIMES	1.19	1.39
QUICK RATIO	TIMES	0.40	0.71
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	7.42	8.55
TOTAL ASSETS TURNOVER	TIMES	1.21	1.57
INVENTORY CONVERSION PERIOD	DAYS	159.48	98.52
INVENTORY TURNOVER	TIMES	2.29	3.70
RECEIVABLES CONVERSION PERIOD	DAYS	78.72	93.69
RECEIVABLES TURNOVER	TIMES	4.64	3.90
PAYABLES CONVERSION PERIOD	DAYS	63.38	83.81
CASH CONVERSION CYCLE	DAYS	174.82	108.41
PROFITABILITY RATIO
COST OF GOODS SOLD	%	93.38	91.49
SELLING & ADMINISTRATION	%	4.60	3.92
INTEREST	%	0.74	0.18
GROSS PROFIT MARGIN	%	7.83	9.33
NET PROFIT MARGIN BEFORE EX. ITEM	%	3.23	5.41
NET PROFIT MARGIN	%	1.66	3.77
RETURN ON EQUITY	%	6.10	13.94
RETURN ON ASSET	%	2.01	5.93
EARNING PER SHARE	BAHT	290.25	629.53
LEVERAGE RATIO
DEBT RATIO	TIMES	0.67	0.57
DEBT TO EQUITY RATIO	TIMES	2.03	1.35
TIME INTEREST EARNED	TIMES	4.38	30.44
ANNUAL GROWTH
SALES GROWTH	%	4.68
OPERATING PROFIT	%	(37.50)
NET PROFIT	%	(53.89)
FIXED ASSETS	%	20.54
TOTAL ASSETS	%	35.72

PROFITABILITY RATIO

Gross Profit Margin	7.83	Impressive	Industrial Average	6.34
Net Profit Margin	1.66	Impressive	Industrial Average	1.14
Return on Assets	2.01	Impressive	Industrial Average	1.22
Return on Equity	6.10	Impressive	Industrial Average	2.51

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. Gross Profit Margin is 7.83%. 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. Net Profit Margin ratio is 1.66%, 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 2.01%, 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 6.1%, 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 Downtrend

Return on Equity Downtrend

LIQUIDITY RATIO

Current Ratio	1.19	Impressive	Industrial Average	1.03
Quick Ratio	0.40
Cash Conversion Cycle	174.82

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 1.19 times in 2011, decrease from 1.39 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 0.4 times in 2011, decrease from 0.71 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 175 days.

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

Current Ratio Downtrend

LEVERAGE RATIO

Debt Ratio	0.67	Acceptable	Industrial Average	0.65
Debt to Equity Ratio	2.03	Risky	Industrial Average	1.74
Times Interest Earned	4.38	Impressive	Industrial Average	1.37

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 4.38 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 0.67 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 Downtrend

Times Interest Earned Downtrend

ACTIVITY RATIO

Fixed Assets Turnover	7.42	Impressive	Industrial Average	2.83
Total Assets Turnover	1.21	Satisfactory	Industrial Average	1.24
Inventory Conversion Period	159.48
Inventory Turnover	2.29	Acceptable	Industrial Average	3.78
Receivables Conversion Period	78.72
Receivables Turnover	4.64	Satisfactory	Industrial Average	5.84
Payables Conversion Period	63.38

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

Fixed Assets Turnover Downtrend

Total Assets Turnover Downtrend

Inventory Turnover Downtrend

Receivables Turnover Downtrend

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.55.70
UK Pound	1	Rs.87.55
Euro	1	Rs.68.85

INFORMATION DETAILS

Report Prepared by :

MNL

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.