MIRA INFORM REPORT

Report Date :

05.09.2014

IDENTIFICATION DETAILS

Name :	SUMMIT SHOWA MANUFACTURING CO., LTD.
Registered Office :	199/2 Moo 3, T. Tungsukla, a. Sriracha, chonburi 20230,
Country :	Thailand
Financials (as on) :	31.03.2014
Date of Incorporation :	09.03.1993
Com. Reg. No.:	0115536001395
Legal Form :	Private Limited Company
Line of Business :	Subject is engaged in manufacturing choke absorbers and related equipments such as power steering, bottom cases & rods for automobile and motorcycle production industry
No. of Employees	900

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Good
Payment Behaviour :	Regular
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 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
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 achieved steady growth due largely to industrial and agriculture exports - mostly electronics, agricultural commodities, automobiles and parts, and processed foods. Unemployment, at less than 1% of the labor force, stands as one of the lowest levels in the world, which puts upward pressure on wages in some industries. Thailand also attracts nearly 2.5 million migrant workers from neighboring countries. The Thai government in 2013 implemented a nation-wide 300 baht ($10) per day minimum wage policy and deployed new tax reforms designed to lower rates on middle-income earners. The Thai economy has weathered internal and external economic shocks in recent years. The global economic recession severely cut Thailand's exports, with most sectors experiencing double-digit drops. In late 2011 Thailand's recovery was interrupted by historic flooding in the industrial areas in Bangkok and its five surrounding provinces, crippling the manufacturing sector. The government approved flood mitigation projects worth $11.7 billion, which were started in 2012, to prevent similar economic damage, and an additional $75 billion for infrastructure over the following seven years. This was expected to lead to an economic upsurge but growth has remained slow, in part due to ongoing political unrest and resulting uncertainties. Spending on infrastructure will require re-approval once a new government is seated.

Source : CIA

Company name

SUMMIT SHOWA MANUFACTURING CO., LTD.

SUMMARY

BUSINESS ADDRESS : 199/2 MOO 3, T. TUNGSUKLA, A. SRIRACHA,

CHONBURI 20230, THAILAND

TELEPHONE : [66] 38 490-448-55

FAX : [66] 38 491-376-7

E-MAIL ADDRESS : thunwa.b@summit-showa.co.th

REGISTRATION ADDRESS : SAME AS BUSINESS ADDRESS

ESTABLISHED : 1993

REGISTRATION NO. : 0115536001395 [Former : SOR POR. 3916]

TAX ID NO. : 3271027929

CAPITAL REGISTERED : BHT. 160,000,000

CAPITAL PAID-UP : BHT. 160,000,000

SHAREHOLDER’S PROPORTION : THAI : 47%

JAPANESE : 53%

FISCAL YEAR CLOSING DATE : MARCH 31 [Former : DECEMBER 31]

LEGAL STATUS : PRIVATE LIMITED COMPANY

EXECUTIVE : MR. SHOJI MATSUMOTO, JAPANESE

PRESIDENT

NO. OF STAFF : 900

LINES OF BUSINESS : SHOCK ABSORBER AND POWER STEERING

MANUFACTURER, DISTRIBUTOR AND EXPORTER

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 March 9, 1993 as a private limited company under the name style SUMMIT SHOWA MANUFACTURING CO., LTD., by joint venture between Thai and Japanese groups, with the business objective to manufacture shock absorber and power steering for automotive industry. It currently employs 900 staff.

The major shareholders are Showa Corporation and Summit Auto Body Industry Co., Ltd., which are holding at 53% and 25% of the subject’s shares respectively.

The subject’s registered address is 199/2 Moo 3, T. Tungsukla, A. Sriracha, Chonburi 20230, and this is the subject’s current operation address.

THE BOARD OF DIRECTORS

Name		Nationality	Age
Mr. Tsutomu Kajino	[x]	Japanese	52
Mr. Takuji Eguchi	[x]	Japanese	47
Mr. Kornkrit Jurangkool		Thai	36
Mr. Shoji Matsumoto	[x]	Japanese	59
Mr. Yutaka Ueno	[x]	Japanese	56
Mr. Thanathorn Chuengrungruengkij		Thai	36
Mr. Sanya Yossanant		Thai	53
Mr. Sunsern Jurangkool		Thai	72
Mr. Hidehiko Koyano	[x]	Japanese	51

AUTHORIZED PERSON

One of the above directors [x] can jointly sign with one of the rest directors on behalf of the subject with company’s affixed.

MANAGEMENT

Mr. Shoji Matsumoto is the President.

He is Japanese nationality with the age of 59 years old.

Mr. Sanya Yossanant is the Vice President [Administrative].

He is Thai nationality with the age of 53 years old.

Mr. Takuji Eguchi is the Vice President [Manufacturing].

He is Japanese nationality with the age of 47 years old.

Ms. Wannaporn Rojanaprasertkul is the Sales & Marketing Manager.

She is Thai nationality.

BUSINESS OPERATIONS

The subject is engaged in manufacturing choke absorbers and related equipments such as power steering, bottom cases & rods for automobile and motorcycle production industry. The products are supplied to the international leading automobile assemblers, such as Honda, Toyota, Mitsubishi, Kawasaki, Yamaha and etc., as well as auto parts manufacturers.

PRODUCTIONS

400,000-500,000 units per annum for automobile

300,000-400,000 units per annum for motorcycle

PURCHASE

Most of raw materials and accessories are purchased from local suppliers, and the remaining, as well as machinery are imported from Japan, Republic of China, France and Germany.

SALES

80% of the products is sold locally by wholesale to assemblers, and the remaining 20% is exported to Japan, Malaysia, Vietnam, Republic of China, Indonesia, Philippines and the country in Europe.

MAJOR CUSTOMERS

MMC Sittipol Co., Ltd.

Honda Cars Manufacturing [Thailand] Co., Ltd.

Thai Kawasaki Motors Co., Ltd.

International Vehicle Co., ltd.

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 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 L/C at sight or T/T.

BANKING

Bangkok Bank Public Co., Ltd.

Bank of Tokyo-Mitsubishi UFJ Ltd.

Bank of Ayudhya Public Co., Ltd.

EMPLOYMENT

The subject employs approximately 900 staff.

LOCATION DETAILS

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

COMMENT

The subject was formed in 1993 as a manufacturer and distributor of automotive parts for automobile and motorcycle. The products are mainly served to local manufactures.

Subject has witnessed persistent increase in its business turnover in addition to secure reliable product quality during the past few years. Subject has built up good-term supply and marketing relations with numerous recognized companies both domestic and internationals.

FINANCIAL INFORMATION

The capital was registered at Bht. 40,000,000 divided into 400,000 shares of Bht. 100

each.

The capital was increased later as following:

Bht. 80,000,000 on January 31, 1995

Bht. 160,000,000 on May 29, 1998

The latest registered capital was increased to Bht. 160,000,000 divided into 1,600,000 shares of Bht. 100 each with fully paid.

THE SHAREHOLDERS LISTED WERE : [as at June 13, 2014]

NAME	HOLDING	%
Showa Corporation Nationality: Japanese Address : 1-14-1 Fujiwara-cho, Gyoda-shi, Saitama 361, Japan	848,000	53.00
Summit Auto Body Industry Co., Ltd. Nationality: Thai Address : 32-33 Moo 17, Bangpleeyai, Bangplee, Samutprakarn	400,000	25.00
Thai Summit Auto Parts Industry Co., Ltd. Nationality: Thai Address : 4/3 Moo 1, Bangna-Trad Rd., Bangchalong, Bangplee, Samutprakarn	80,000	5.00
H P D Co., Ltd. Nationality: Thai Address : 161 Rajdamri Rd., Lumpini, Pathumwan, Bangkok	80,000	5.00
Mrs. Somporn Chuengrungruengkij Nationality: Thai Address : 157 Moo 9, Dokmai, Prawet, Bangkok	60,000	3.75
Mr. Sunsern Jurangkool Nationality: Thai Address : 97/2 Nanglichee Rd., Chongnonsi, Yannawa, Bangkok	48,000	3.00
Mr. Suriya Chuengrungruengkij Nationality: Thai Address : 6/7-8 Sap Rd., Siphya, Bangrak, Bangkok	48,000	3.00
Ms. Chanaphan Chuengrungruengkij Nationality: Thai Address : 157 Moo 9, Dokmai, Prawet, Bangkok	10,000	0.625
Mr. Thanathorn Chuengrungruengkij Nationality: Thai Address : 157 Moo 9, Dokmai, Prawet, Bangkok	10,000	0.625
Mr. Taweechat Jurangkool Nationality: Thai Address : 97/2 Nanglichee Rd., Chongnonsi, Yannawa, Bangkok	8,000	0.50
Mr. Kornkrit Jurangkool Nationality: Thai Address : 97/2 Nanglichee Rd., Chongnonsi, Yannawa, Bangkok	8,000	0.50

Total Shareholders : 11

Share Structure [as at June 13, 2014]

Nationality	Shareholders	No. of Share	% Shares
Thai	10	752,000	47.00
Foreign-Japanese	1	848,000	53.00
Total	11	1,600,000	100.00

NAME OF AUDITOR & CERTIFIED PUBLIC ACCOUNTANT NO. :

Ms. Siriwan Surathepin No. 4604

BALANCE SHEET [BAHT]

The latest financial figures published as at March 31, 2014, December 31, 2013 & 2012 were:

ASSETS

Current Assets	Mar. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash and Cash Equivalents	54,101,368	59,242,317	78,825,735
Short-term Investment	870,000,000	750,000,000	1,260,000,000
Trade Accounts & Other Receivable	409,549,508	416,526,526	590,517,736
Inventories	204,368,296	219,387,929	211,101,459
Other Current Assets	6,340,063	9,405,390	8,543,890
Total Current Assets	1,544,359,235	1,454,562,162	2,148,988,820
Fixed Assets	359,002,377	343,537,634	239,237,140
Intangible Assets	13,545,655	15,610,510	36,801,662
Other Non - current Assets	153,664	153,663	155,663
Total Assets	1,917,060,931	1,813,863,969	2,425,183,285

LIABILITIES & SHAREHOLDERS’ EQUITY [BAHT]

Current Liabilities	Mar. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Trade Accounts & Other Payable	1,084,413,852	644,019,932	790,262,846
Accrued Income Tax	58,032,631	47,707,641	62,709,485
Short-term Provisions	3,311,611	4,436,483	4,115,625
Other Current Liabilities	5,133,090	3,358,952	3,052,978
Total Current Liabilities	1,150,891,184	699,523,008	860,140,934
Reserve for Employee Benefits	51,794,308	48,066,070	25,016,906
Long-term Provisions	1,336,648	2,909,781	8,032,164
Total Liabilities	1,204,022,140	750,498,859	893,190,004
Shareholders' Equity
Share capital : Baht 100 par value authorized, issued and fully paid share capital 1,600,000 shares	160,000,000	160,000,000	160,000,000
Capital Paid	160,000,000	160,000,000	160,000,000
Retained Earnings: Appropriated for Statutory Reserve	16,000,000	16,000,000	16,000,000
Unappropriated	537,038,791	887,365,110	1,355,993,281
Total Shareholders' Equity	713,038,791	1,063,365,110	1,531,993,281
Total Liabilities & Shareholders' Equity	1,917,060,931	1,813,863,969	2,425,183,285

PROFIT & LOSS ACCOUNT

Revenue	Jan. 1, 2014 -Mar. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Sales Income	917,964,631	4,386,132,764	4,214,249,012
Interest Income	2,797,090	18,898,021	26,068,145
Other Income	4,108,842	34,155,935	37,553,748
Total Revenues	924,870,563	4,439,186,720	4,277,870,905
Expenses
Cost of Goods Sold	739,093,675	3,524,083,700	3,386,327,954
Selling Expenses	10,640,849	46,417,769	32,280,780
Administrative Expenses	66,758,027	313,948,374	290,845,744
Total Expenses	816,492,551	3,884,449,843	3,709,454,478
Profit / [Loss] before Financial Expenses & Income Tax Expenses	108,378,012	554,736,877	568,416,427
Financial Expenses	[125,990]	[461,564]	[338,849]
Profit / [Loss] before Income Tax Expenses	108,252,022	554,275,313	568,077,578
Income Tax Expenses	[10,578,341]	[106,503,484]	[131,745,428]
Net Profit / [Loss]	97,673,681	447,771,829	436,332,150

FINANCIAL ANALYSIS

ITEM	UNIT	2013	2012
LIQUIDITY RATIO
CURRENT RATIO	TIMES	2.08	2.50
QUICK RATIO	TIMES	1.75	2.24
ACTIVITY RATIO
FIXED ASSETS TURNOVER	TIMES	12.77	17.62
TOTAL ASSETS TURNOVER	TIMES	2.42	1.74
INVENTORY CONVERSION PERIOD	DAYS	22.72	22.75
INVENTORY TURNOVER	TIMES	16.06	16.04
RECEIVABLES CONVERSION PERIOD	DAYS	34.66	51.15
RECEIVABLES TURNOVER	TIMES	10.53	7.14
PAYABLES CONVERSION PERIOD	DAYS	66.70	85.18
CASH CONVERSION CYCLE	DAYS	(9.32)	(11.28)
PROFITABILITY RATIO
COST OF GOODS SOLD	%	80.35	80.35
SELLING & ADMINISTRATION	%	8.22	7.67
INTEREST	%	0.01	0.01
GROSS PROFIT MARGIN	%	20.86	21.16
NET PROFIT MARGIN BEFORE EX. ITEM	%	12.65	13.49
NET PROFIT MARGIN	%	10.21	10.35
RETURN ON EQUITY	%	42.11	28.48
RETURN ON ASSET	%	24.69	17.99
EARNING PER SHARE	BAHT	279.86	272.71
LEVERAGE RATIO
DEBT RATIO	TIMES	0.41	0.37
DEBT TO EQUITY RATIO	TIMES	0.71	0.58
TIME INTEREST EARNED	TIMES	1,201.86	1,677.49
ANNUAL GROWTH
SALES GROWTH	%	4.08	-
OPERATING PROFIT	%	(2.41)	-
NET PROFIT	%	2.62	-
FIXED ASSETS	%	43.60	-
TOTAL ASSETS	%	(25.21)	-

PROFITABILITY : EXCELLENT

PROFITABILITY RATIO

Gross Profit Margin	20.86	Impressive	Industrial Average	20.46
Net Profit Margin	10.21	Impressive	Industrial Average	6.63
Return on Assets	24.69	Impressive	Industrial Average	15.34
Return on Equity	42.11	Impressive	Industrial Average	26.91

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 20.86%. When compared with the industry average, the ratio of the company was higher, 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 10.21%, 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 24.69%, 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 42.11%, 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 Uptrend

Return on Equity Uptrend

LIQUIDITY : IMPRESSIVE

LIQUIDITY RATIO

Current Ratio	2.08	Impressive	Industrial Average	1.73
Quick Ratio	1.75
Cash Conversion Cycle	(9.32)

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 2.08 times in 2013, decrease from 2.5 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 1.75 times in 2013, decrease from 2.24 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 -10 days.

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

Current Ratio Uptrend

LEVERAGE : IMPRESSIVE

LEVERAGE RATIO

Debt Ratio	0.41	Acceptable	Industrial Average	0.41
Debt to Equity Ratio	0.71	Impressive	Industrial Average	0.69
Times Interest Earned	1,201.86	Impressive	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 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 1201.87 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 0.41 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 Downtrend

Times Interest Earned Stable

ACTIVITY : EXCELLENT

ACTIVITY RATIO

Fixed Assets Turnover	12.77	Impressive	Industrial Average	-
Total Assets Turnover	2.42	Impressive	Industrial Average	2.32
Inventory Conversion Period	22.72
Inventory Turnover	16.06	Impressive	Industrial Average	13.19
Receivables Conversion Period	34.66
Receivables Turnover	10.53	Impressive	Industrial Average	7.82
Payables Conversion Period	66.70

The company's Account Receivable Ratio is calculated as 10.53 and 7.14 in 2013 and 2012 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 2013 increased from 2012. This would suggest the company had good performance 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 is 23 days at the end of 2012, same number of days as in 2013. And Inventory turnover has increased from 16.04 times in year 2012 to 16.06 times in year 2013.

The company's Total Asset Turnover is calculated as 2.42 times and 1.74 times in 2013 and 2012 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	Rs.60.45
UK Pound	1	Rs.99.46
Euro	1	Rs.79.46

INFORMATION DETAILS

Analysis Done by :	RAS
Report Prepared by :	NIS

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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