MIRA INFORM REPORT

Report Date :

10.01.2013

IDENTIFICATION DETAILS

Name :	KULTHORN STEEL COMPANY LIMITED
Registered Office :	124 Latkrabang Industrial Estate, Soi Chalongkrung 31, Chalongkrung Road, Lamplathew, Latkrabang, Bangkok 10520
Country :	Thailand
Financials (as on) :	31.12.2011
Date of Incorporation :	20.06.2007
Com. Reg. No.:	0105550063921
Legal Form :	Private Limited Company
Line of Business :	Manufacturer and Distributor of Steel Cutting and Processing [Coil Center]
No. of Employees :	109

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 :	Slow but Correct
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 – June 30^th, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
Thailand	B1	B1

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

thailand - ECONOMIC OVERVIEW

With a well-developed infrastructure, a free-enterprise economy, generally pro-investment policies, and strong export industries, Thailand enjoyed solid growth from 2000 to 2007 - averaging more than 4% per year - as it recovered from the Asian financial crisis of 1997-98. Thai exports - mostly machinery and electronic components, agricultural commodities, and jewelry - continue to drive the economy, accounting for more than half of GDP. The global financial crisis of 2008-09 severely cut Thailand's exports, with most sectors experiencing double-digit drops. In 2009, the economy contracted 2.3%. In 2010, Thailand's economy expanded 7.8%, its fastest pace since 1995, as exports rebounded from their depressed 2009 level. Steady economic growth at just below 4% during the first three quarters of 2011 was interrupted by historic flooding in October and November in the industrial areas north of Bangkok, crippling the manufacturing sector and leading to a revised growth rate of only 0.1% for the year. The industrial sector is poised to recover from the second quarter of 2012 onward, however, and the government anticipates the economy will probably grow between 5.5 and 6.5% for 2012, while private sector forecasts range between 3.8% and 5.7%.

Source : CIA

Company name

KULTHORN STEEL COMPANY LIMITED

SUMMARY

BUSINESS ADDRESS : 124 LATKRABANG INDUSTRIAL ESTATE,

SOI CHALONGKRUNG 31, CHALONGKRUNG ROAD,

LAMPLATHEW, LATKRABANG, BANGKOK 10520

TELEPHONE : [66] 2326-0851

FAX : [66] 2326-0766

E-MAIL ADDRESS : kkc@kulthorn.com

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 2007

REGISTRATION NO. : 0105550063921

TAX ID NO. : 3032682343

CAPITAL REGISTERED : BHT. 400,000,000

CAPITAL PAID-UP : BHT. 400,000,000

SHAREHOLDER’S PROPORTION : THAI : 100%

FISCAL YEAR CLOSING DATE : DECEMBER 31

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. SUTEE SIMAKULTHORN, THAI

PRESIDENT

NO. OF STAFF : 109

LINES OF BUSINESS : STEEL CUTTING AND PROCESSING [COIL CENTER]

MANUFACTURER 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 June 20, 2007 as a private limited company under the registered name KULTHORN STEEL COMPANY LIMITED by Thai groups, with the objective to engage in steel cutting and processing business. It currently employs 109 staff. The subject is a wholly owned subsidiary of Kulthorn Kirby Public Company Limited, the leading air compressor manufacture in Thailand.

The subject’s registered address was initially located at 61/1 Moo 4, Chalongkrung Rd., Lamplathew, Latkrabang, Bangkok 10520.

On September 1, 2010, subject’s registered address was relocated to 124 Latkrabang Industrial Estate, Soi Chalongkrung 31, Chalongkrung Rd., Lamplathew, Latkrabang, Bangkok 10520, and this is the subject’s current operation address.

THE BOARD OF DIRECTOR

Name		Nationality	Age
Mr. Suraporn Simakulthorn	[x]	Thai	72
Mr. Sutee Simakulthorn	[x]	Thai	44
Ms. Sornsanan Simakulthorn		Thai	43
Mr. Thitisak Simakulthorn		Thai	35
Mr. Paiboon Boonpermvitaya	[x]	Thai	57

AUTHORIZED PERSON

Any two of the mentioned directors [x] can jointly sign or one of the mentioned directors [x] can jointly sign with anyone of the rest directors on behalf of the subject with company’s affixed.

MANAGEMENT

Mr. Sutee Simakulthorn is the President.

He is Thai nationality with the age of 44 years old.

Mr. Paiboon Boonpermvitaya is the Executive Vice President [Manufacturing].

He is Thai nationality with the age of 57 years old.

Mr. Chanachai Kulnoppaleark is the Group Vice President [Finance].

He is Thai nationality.

BUSINESS OPERATIONS

The subject is engaged in steel cutting and processing [coil center] for motor compressor, electric motors and other parts, with the production capacity of 15,000 tons per month for cutting works and 1,000,000 strokes per month for processing works.

PURCHASE

100% of its raw materials is purchased from local supplier.

SALES

100% of the products is sold locally by wholesale to manufacturers and end-users.

MAJOR CUSTOMERS

Kulthorn Kirby Public Company Limited : Thailand

Kulthorn Premier Co., Ltd. : Thailand

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 IRICO’S DATABASE 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.

BANKING

TMB Bank Public Co., Ltd.

EMPLOYMENT

The subject currently employs 109 staff.

LOCATION DETAILS

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

COMMENT

The subject is a manufacturer of steel cutting. In 2011 the subject had been recorded a good performance in its sales and services, as well as continue expanding throughout the year 2012. This has resulted by company earning a good outstanding work and services.

FINANCIAL INFORMATION

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

The capital was increased later as follows:

Bht. 200,000,000 on October 21, 2008

Bht. 400,000,000 on June 9, 2010

The latest registered capital was increased to Bht. 400 million, divided into 4,000,000 shares of Bht. 100 each with fully paid.

THE SHAREHOLDERS LISTED WERE

[as at April 23, 2012]

NAME	HOLDING	%
Kulthorn Kirby Public Company Limited Nationality: Thai Address : 44/1 Moo 7, Chalongkrung Rd., Lamplathew, Latkrabang, Bangkok	3,999,993	100.00
Mr. Sumeth Simakulthorn Nationality: Thai Address : 237-237/1-2 Larnluang Rd., Wat Somanus, Pomprabsattrupai, Bangkok	1	-
Mr. Suraporn Simakulthorn Nationality: Thai Address : 420 Soi Pattanakarn 53, Suanluang, Bangkok	1	-
Mr. Sutee Simakulthorn Nationality: Thai Address : 204/98 Moo 6, Prawet, Bangkok	1	-
Mr. Kamol Upalanont Nationality: Thai Address : 204/167 Moo 6, Prawet, Bangkok	1	-
Mr. Paiboon Boonpermvitaya Nationality: Thai Address : 79/331 Moo 8, Sapansung, Bangkok	1	-
Mr. Thitisak Simakulthorn Nationality: Thai Address : 420 Soi Pattanakarn 53, Suanluang, Bangkok	1	-
Ms. Sornsanan Simakulthorn Nationality: Thai Address : 180/1-2 Larnluang Rd., Klongmahanark, Pomprabsattrupai, Bangkok	1	-

Total Shareholders : 8

Share Structure

[as at April 23, 2012]

Nationality	Shareholders	No. of Share	% Shares
Thai	8	4,000,000	100.00
Foreign	-	-	-
Total	8	4,000,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO.

Ms. Saifon Inthkaew No. 4434

BALANCE SHEET [BAHT]

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

ASSETS

Current Assets	2011	2010
Cash and Cash Equivalents	13,051,731	4,191,486
Trade Accounts & Other Receivable	423,024,556	397,744,627
Inventories	262,047,134	181,899,692
Other Current Assets	6,481,725	344,013
Total Current Assets	704,605,146	584,179,818
Cash at Bank pledged as a Collateral	760,000	760,000
Fixed Assets	330,473,828	357,330,871
Other Non-current Assets	554,688	516,186
Total Assets	1,036,393,662	942,786,875

LIABILITIES & SHAREHOLDERS’ EQUITY [BAHT]

Current Liabilities	2011	2010
Bank Overdraft from Financial Institutions	384,053,281	353,445,881
Trade Accounts & Other Payable	135,149,033	52,403,574
Current Portion of Hire-purchase Payable and Financial Lease Contract Liabilities	12,231,274	37,900,926
Accrued Income Tax	-	10,628,159
Other Current Liabilities	7,720,862	546,279
Total Current Liabilities	539,154,450	454,924,819
Hire-purchase Payable and Financial Lease Contract Liabilities, Net of Current Portion	1,176,476	13,407,750
Reserve for Employee’s Benefit	1,430,639	-
Total Liabilities	541,761,565	468,332,569
Shareholders' Equity
Share capital : Baht 100 value authorized, issued and fully paid share capital 4,000,000 shares	400,000,000	400,000,000
Capital Paid	400,000,000	400,000,000
Retained Earning - Unappropriated	94,632,097	74,454,306
Total Shareholders' Equity	494,632,097	474,454,306
Total Liabilities & Shareholders' Equity	1,036,393,662	942,786,875

PROFIT & LOSS ACCOUNT

Revenue	2011	2010
Sales & Services	1,275,503,881	1,489,077,048
Sales Scarp Income	60,486,112	56,827,317
Gain on Exchange Rate	-	35,350,374
Other Income	2,146,817	527,709
Total Revenues	1,338,136,810	1,581,782,448
Expenses
Cost of Goods Sold and Services	1,259,519,915	1,426,837,291
Selling and Services Expenses	3,717,652	4,522,519
Administrative Expenses	21,116,444	20,327,530
Loss on Exchange Rate	20,026,308	-
Total Expenses	1,304,380,319	1,451,687,340
Profit before Financial Costs & Income Tax	33,756,491	130,095,108
Financial Costs	[11,834,821]	[23,400,772]
Profit before Income Tax	21,921,670	106,694,336
Income Tax	[1,743,879]	[17,113,134]
Net Profit / [Loss]	20,177,791	89,581,202

FINANCIAL ANALYSIS

ITEM	UNIT	2011	2010
LIQUIDITY RATIO
CURRENT RATIO	TIMES	1.31	1.28
QUICK RATIO	TIMES	0.81	0.88
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	3.86	4.17
TOTAL ASSETS TURNOVER	TIMES	1.23	1.58
INVENTORY CONVERSION PERIOD	DAYS	75.94	46.53
INVENTORY TURNOVER	TIMES	4.81	7.84
RECEIVABLES CONVERSION PERIOD	DAYS	121.05	97.49
RECEIVABLES TURNOVER	TIMES	3.02	3.74
PAYABLES CONVERSION PERIOD	DAYS	39.17	13.41
CASH CONVERSION CYCLE	DAYS	157.83	130.62
PROFITABILITY RATIO
COST OF GOODS SOLD	%	98.75	95.82
SELLING & ADMINISTRATION	%	1.95	1.67
INTEREST	%	0.93	1.57
GROSS PROFIT MARGIN	%	6.16	10.41
NET PROFIT MARGIN BEFORE EX. ITEM	%	2.65	8.74
NET PROFIT MARGIN	%	1.58	6.02
RETURN ON EQUITY	%	4.08	18.88
RETURN ON ASSET	%	1.95	9.50
EARNING PER SHARE	BAHT	5.04	22.40
LEVERAGE RATIO
DEBT RATIO	TIMES	0.52	0.50
DEBT TO EQUITY RATIO	TIMES	1.10	0.99
TIME INTEREST EARNED	TIMES	2.85	5.56
ANNUAL GROWTH
SALES GROWTH	%	(14.34)
OPERATING PROFIT	%	(74.05)
NET PROFIT	%	(77.48)
FIXED ASSETS	%	(7.52)
TOTAL ASSETS	%	9.93

PROFITABILITY RATIO

Gross Profit Margin	6.16	Deteriorated	Industrial Average	14.05
Net Profit Margin	1.58	Deteriorated	Industrial Average	3.37
Return on Assets	1.95	Deteriorated	Industrial Average	4.00
Return on Equity	4.08	Acceptable	Industrial Average	7.42

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 6.16%. 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 1.58%. 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 1.95%.

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 4.08%.

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	1.31	Satisfactory	Industrial Average	1.39
Quick Ratio	0.81
Cash Conversion Cycle	157.83

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 1.31 times in 2011, increased from 1.28 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 0.81 times in 2011, decreased from 0.88 times, by excluding inventory, the company may have problems meeting current liabilities.

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 158 days.

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

Current Ratio Uptrend

LEVERAGE RATIO

Debt Ratio	0.52	Acceptable	Industrial Average	0.49
Debt to Equity Ratio	1.10	Risky	Industrial Average	0.90
Times Interest Earned	2.85	Acceptable	Industrial Average	4.54

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 2.86 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 0.52 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 Uptrend

ACTIVITY RATIO

Fixed Assets Turnover	3.86	Impressive	Industrial Average	2.20
Total Assets Turnover	1.23	Impressive	Industrial Average	1.17
Inventory Conversion Period	75.94
Inventory Turnover	4.81	Satisfactory	Industrial Average	5.14
Receivables Conversion Period	121.05
Receivables Turnover	3.02	Acceptable	Industrial Average	5.24
Payables Conversion Period	39.17

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 Uptrend

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.96
UK Pound	1	Rs.88.23
Euro	1	Rs.71.92

INFORMATION DETAILS

Report Prepared by :

SDA

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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