MIRA INFORM REPORT

Report Date :

28.12.2012

IDENTIFICATION DETAILS

Name :	RP PRODUCTS SDN. BHD.
Registered Office :	NO. 6-02, Room B, Jalan Permas 9/3, Bandar Baru Permas Jaya, 81750 Masai, Johor
Country :	Malaysia
Financials (as on) :	31.12.2011
Date of Incorporation :	03.01.2006
Com. Reg. No.:	719869-U
Legal Form :	Private Limited
Line of Business :	Retail sale of household utensils and cutlery, crockery, glassware, chinaware and pottery
No. of Employees :	10

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 – June 30^th, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
Malaysia	A2	A2

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

malaysia - ECONOMIC OVERVIEW

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. The NAJIB administration also is continuing efforts to boost domestic demand and reduce the economy's dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver of the economy. As an oil and gas exporter, Malaysia has profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with strained government finances, has forced Kuala Lumpur to begin to reduce government subsidies. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplies more than 40% of government revenue. The central bank maintains healthy foreign exchange reserves, and a well-developed regulatory regime has limited Malaysia''s exposure to riskier financial instruments and the global financial crisis. Nevertheless, Malaysia could be vulnerable to a fall in commodity prices or a general slowdown in global economic activity because exports are a major component of GDP. In order to attract increased investment, NAJIB has raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but he has encountered significant opposition, especially from Malay nationalists and other vested interests.

Source : CIA

EXECUTIVE SUMMARY

REGISTRATION NO.

:

719869-U

COMPANY NAME

:

RP PRODUCTS SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

03/01/2006

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

NO. 6-02, ROOM B, JALAN PERMAS 9/3, BANDAR BARU PERMAS JAYA, 81750 MASAI, JOHOR, MALAYSIA.

BUSINESS ADDRESS

:

58, JALAN PERMAS 9/13, BANDAR BARU PERMAS JAYA, 81750 MASAI, JOHOR, MALAYSIA.

TEL.NO.

:

07-3880785

FAX.NO.

:

07-3880787

EMAIL

:

sales@rpmalaysia.com

WEB SITE

:

www.rpmalaysia.com

CONTACT PERSON

:

WONG KIM HAI ( MANAGING DIRECTOR )

INDUSTRY CODE

:

47593

PRINCIPAL ACTIVITY

:

DISTRIBUTION OF FIBREGLASS MATERIALS

AUTHORISED CAPITAL

:

MYR 500,000.00 DIVIDED INTO
ORDINARY SHARE 500,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 200,000.00 DIVIDED INTO
ORDINARY SHARES 200,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 10,367,652 [2011]

NET WORTH

:

MYR 1,880,414 [2011]

STAFF STRENGTH

:

10 [2012]

BANKER (S)

:

HSBC BANK MALAYSIA BHD MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

STABLE

PAYMENT

:

GOOD

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

MODERATE

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

PROPOSED CREDIT LIMIT

:

MYR 260,000 (USD 82,000)

HISTORY / BACKGROUND

The SC is a private limited company and is allowed to have a minimum of one and a maximum of forty-nine shareholders. As a private limited company, the SC must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the SC is capable of owning assets, entering into contracts, sue or be sued by other companies. The liabilities of the shareholders are to the extent of the equity they have taken up and the creditors cannot claim on shareholders' personal assets even if the SC is insolvent. The SC is governed by the Companies Act, 1965 and the company must file its annual returns, together with its financial statements with the Registrar of Companies.

The SC is principally engaged in the (as a / as an) distribution of fibreglass materials.

The SC is not listed on Bursa Malaysia (Malaysia Stock Exchange).

The major shareholder(s) of the SC are shown as follows :

Name	Address	IC/PP/Loc No	Shareholding	(%)
MR.WONG KIM HAI +	S-26,, JALAN BUNGA ROS, PLENTONG, 81750 MASAI, JOHOR, MALAYSIA.	680527-01-5527	180,000.00	90.00
MS.HON YOKE PEN +	NO. 05-08, BLOK F, MONBISCA APARTMENT, JALAN PERMAS 6/8, BANDAR BARU PERMAS JAYA, 81750 MASAI, JOHOR, MALAYSIA.	691022-01-5752	20,000.00	10.00
			---------------	------
			200,000.00	100.00
			============	=====

+ Also Director

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MS. HON YOKE PEN
Address	:	NO. 05-08, BLOK F, MONBISCA APARTMENT, JALAN PERMAS 6/8, BANDAR BARU PERMAS JAYA, 81750 MASAI, JOHOR, MALAYSIA.
New IC No	:	691022-01-5752
Date of Birth	:	22/10/1969
Nationality	:	MALAYSIAN

DIRECTOR 2

Name Of Subject	:	MR. WONG KIM HAI
Address	:	S-26,, JALAN BUNGA ROS, PLENTONG, 81750 MASAI, JOHOR, MALAYSIA.
New IC No	:	680527-01-5527
Date of Birth	:	27/05/1968
Nationality	:	MALAYSIAN

MANAGEMENT

1)	Name of Subject	:	WONG KIM HAI
	Position	:	MANAGING DIRECTOR

AUDITOR

Auditor	:	CMK & ASSOCIATES
Auditor' Address	:	#02-59, JALAN MUTIARA EMAS 9/3, AUSTIN BOULEVARD, TAMAN MOUNT AUSTIN, 81100 JOHOR BAHRU, JOHOR, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MS. TEY SIR FOON
	IC / PP No	:	A1515965
	New IC No	:	700210-01-5380
	Address	:	31, JALAN INDAH 18/1, TAMAN BUKIT INDAH, 81200 JOHOR BAHRU, JOHOR, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

HSBC BANK MALAYSIA BHD

2)

Name

:

MALAYAN BANKING BHD

The SC enjoys normal banking routine with above mentioned banker(s). The SC has bank charges with above mentioned banker(s).

ENCUMBRANCE (S)

ENCUMBRANCE 1

Date of Creation

:

18/10/2007

Description Of Charge

:

N/A

Amount Secured

:

RM470,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

MALAYAN BANKING BHD

Form 40 Dated

Registered and Numbered 1 In The Register of Charges

ENCUMBRANCE 2

Date of Creation

:

23/05/2008

Description Of Charge

:

N/A

Amount Secured

:

RM2,100,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

MALAYAN BANKING BHD

Form 40 Dated

Registered and Numbered 2 In The Register of Charges

ENCUMBRANCE 3

Date of Creation

:

20/10/2010

Description Of Charge

:

N/A

Amount Secured

:

RM400,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

EONCAP ISLAMIC BANK BERHAD

Form 40 Dated

Registered and Numbered 3 In The Register of Charges

ENCUMBRANCE 4

Date of Creation

:

22/04/2011

Description Of Charge

:

N/A

Amount Secured

:

RM2,000,000.00

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

HSBC BANK MALAYSIA BHD

Form 40 Dated

Registered and Numbered 4 In The Register of Charges

LEGAL CHECK AGAINST SC

* A check has been conducted in our databank againt the SC whether the subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia.

No legal action was found in our databank.

No winding up petition was found in our databank.

DEFAULTER CHECK AGAINST SC

* We have checked through the SC in our defaulters' database which comprised of debtors that have been blacklisted by our customers and debtors that have been placed or assigned to us for collection since 1990. Information was provided by third party where the debt amount can be disputed. Please check with creditors for confirmation as alleged debts may have been paid since recorded or are being disputed.

No blacklisted record & debt collection case was found in our defaulters' databank.

PAYMENT RECORD

SOURCES OF RAW MATERIALS:
Local	:	YES	Percentage	:	70%
Overseas	:	YES	Percentage	:	30%
Import Countries	:	ASIA

The SC refused to provide any name of trade/service supplier and we are unable to conduct any trade enquiry. However, from financial historical data we conclude that :

OVERALL PAYMENT HABIT
Prompt 0-30 Days	[	]	Good 31-60 Days	[	X	]	Average 61-90 Days	[	]
Fair 91-120 Days	[	]	Poor >120 Days	[		]

CLIENTELE

Local	:	YES	Percentage	:	100%
Domestic Markets	:	MALAYSIA
Overseas	:	YES
Export Market	:	VIETNAM, PHILIPPINES, INDONESIA, SRI LANKA, MALDIVES, AUSTRALIA, BANGLADESH, INDIA, PAKISTAN, THAILAND
Credit Term	:	30 - 60 DAYS
Payment Mode	:	CHEQUES,TELEGRAPHIC TRANSFER (TT)
Type of Customer	:	CONTRACTOR,CONSTRUCTION

OPERATIONS

Goods Traded

:

FIBREGLASS MATERIALS

Competitor(s)

:

AMWAY (MALAYSIA) HOLDINGS BHD
CHUNS TRADING SDN BHD
G-ORANGE HOMEMART SDN BHD
GELANG TIGA SDN BHD
HOCATSU (M) SDN BHD

Member(s) / Affiliate(s)

:

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

Total Number of Employees:
YEAR	2012	2011	2010	2008	2007
GROUP	N/A	N/A	N/A	N/A	N/A
COMPANY	10	10	6	10	5

Branch

:

NO

Other Information:

The SC is principally engaged in the (as a / as an) distribution of fibreglass materials.

The SC sells products for water tanks and for building construction.

The SC sells the products based on the customers' requirements.

The SC sells other building materials including cutting tools, hand tools and others based on the customer's orders.

PROJECTS

No projects found in our databank

CURRENT INVESTIGATION

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client	:	073880785
Current Telephone Number	:	07-3880785
Match	:	YES
Address Provided by Client	:	58, JALAN PERMAS 9/13, BANDAR BARU PERMAS JAYA,81750,MASAI,JOHOR.
Current Address	:	58, JALAN PERMAS 9/13, BANDAR BARU PERMAS JAYA, 81750 MASAI, JOHOR, MALAYSIA.
Match	:	YES
Latest Financial Accounts	:	YES

Other Investigations

On 20th December 2012 we contacted one of the staff from the SC and she provided some information on the SC.

FINANCIAL ANALYSIS

Profitability
Turnover	:	Decreased	[	2007 - 2011	]
Profit/(Loss) Before Tax	:	Increased	[	2007 - 2011	]
Return on Shareholder Funds	:	Acceptable	[	19.44%	]
Return on Net Assets	:	Acceptable	[	23.27%	]
The continuous fall in turnover could be due to the lower demand for the SC's products / services.The SC's management have been efficient in controlling its operating costs. The SC's management had generated acceptable return for its shareholders using its assets.
Working Capital Control
Stock Ratio	:	Favourable	[	28 Days	]
Debtor Ratio	:	Unfavourable	[	65 Days	]
Creditors Ratio	:	Unfavourable	[	69 Days	]
The SC's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The high debtors' ratio could indicate that the SC was weak in its credit control. However, the SC could also giving longer credit periods to its customers in order to boost its sales or to capture / retain its market share. The unfavourable creditors' ratio could be due to the SC taking advantage of the credit granted by its suppliers. However this may affect the goodwill between the SC and its suppliers and the SC may inadvertently have to pay more for its future supplies.
Liquidity
Liquid Ratio	:	Favourable	[	1.42 Times	]
Current Ratio	:	Unfavourable	[	1.83 Times	]
A minimum liquid ratio of 1 should be maintained by the SC in order to assure its creditors of its ability to meet short term obligations and the SC was in a good liquidity position. Thus, we believe the SC is able to meet all its short term obligations as and when they fall due.
Solvency
Interest Cover	:	Unfavourable	[	<17.17 Times>	]
Gearing Ratio	:	Favourable	[	0.05 Times	]
The SC incurred losses in the year. It did not generate sufficient income to service its interest. If the situation does not improve, the SC may be vulnerable to default in servicing the interest. The SC was lowly geared thus it had a low financial risk. The SC was mainly financed by its shareholders' funds and internally generated funds. In times of economic slowdown / downturn, the SC being a lowly geared company, will be able to compete better than those companies which are highly geared in the same industry.
Overall Assessment :
Due to the efficient control of its operating costs, the SC was able to remain profitable despite lower turnover achieved during the year. The SC was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the SC should be able to repay its short term obligations. The SC's interest cover was negative, indicating that it did not generate sufficient income to service its interest. If its result does not show impressive improvements or succeed obtaining short term financing or capital injection, it may not be able to service its interest and repay the loans. The SC as a lowly geared company, will be more secured compared to those highly geared companies. It has the ability to meet all its long term obligations.
Overall financial condition of the SC : STABLE

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

Major Economic Indicators:	2008	2009	2010	2011*	2012**
Population ( Million)	27.73	28.13	28.35	28.70	29.10
Gross Domestic Products ( % )	4.6	<0.5>	7.2	5.5	5.3
Domestic Demand ( % )	6.9	2.9	6.3	4.8	7.6
Private Expenditure ( % )	7.1	<2.7>	8.1	7.0	8.7
Consumption ( % )	8.4	0.7	6.7	6.3	7.1
Investment ( % )	1.5	<17.2>	17.7	16.2	15.9
Public Expenditure ( % )	6.5	5.2	3.8	7.6	4.7
Consumption ( % )	11.6	3.1	0.2	8.9	3.0
Investment ( % )	0.7	8.0	2.8	0.6	7.0
Balance of Trade ( MYR Million )	129,563	89,650	118,356	116,058	-
Government Finance ( MYR Million )	<34,462>	<28,450>	<40,482>	<45,511>	<43,021>
Government Finance to GDP / Fiscal Deficit ( % )	<4.8>	<4.8>	<5.6>	<5.4>	<4.7>
Inflation ( % Change in Composite CPI)	<3.3>	<5.2>	5.1	3.1	-
Unemployment Rate	3.7	4.5	3.9	3.3	-
Net International Reserves ( MYR Billion )	388	331	329	415	-
Average Risk-Weighted Capital Adequacy Ratio ( % )	1.91	2.87	2.20	3.50	-
Average 3 Months of Non-performing Loans ( % )	13.24	11.08	15.30	14.80	-
Average Base Lending Rate ( % )	6.72	5.53	6.30	6.60	-
Business Loans Disbursed( % )	11.6	10.5	14.7	15.3	-
Foreign Investment ( MYR Million )	23,261.4	22,156.8	22,517.9	23,546.1	-
Consumer Loans ( % )	-	-	-	-	-
Registration of New Companies ( No. )	41,599	41,578	44,148	-	-
Registration of New Companies ( % )	<4.0>	<0.1>	6.2	-	-
Liquidation of Companies ( No. )	27,992	39,075	25,585	-	-
Liquidation of Companies ( % )	23.7	39.6	<34.5>	-	-
Registration of New Business ( No. )	269,866	312,581	271,414	-	-
Registration of New Business ( % )	-	-	-	-	-
Business Dissolved ( No. )	18,885	19,345	19,738	-	-
Business Dissolved ( % )	<7.6>	2.4	2.0	-	-
Sales of New Passenger Cars (' 000 Unit )	497.5	486.3	543.6	363.0	-
Cellular Phone Subscribers ( Million )	25.1	30.1	32.8	35.3	-
Tourist Arrival ( Million Persons )	21.5	23.6	24.6	25.3	-
Hotel Occupancy Rate ( % )	68.0	58.0	63.0	51.3	-
Credit Cards Spending ( % )	17.1	12.8	14.1	15.6	-
Bad Cheque Offenders (No.)	34,834	36,667	33,568	27,208	-
Individual Bankruptcy ( No.)	13,907	16,228	18,119	16,155	-
Individual Bankruptcy ( % )	5.1	16.7	11.7	<10.8>	-

INDUSTRIES ( % of Growth ):	2008	2009	2010	2011*	2012**
Agriculture	3.6	0.4	2.1	4.7	4.1
Palm Oil	7.0	<1.1>	<3.4>	7.3	-
Rubber	<1.1>	<19.8>	9.9	6.4	-
Forestry & Logging	<1.5>	<5.9>	<3.3>	<4.7>	-
Fishing	4.0	5.5	5.6	2.8	-
Other Agriculture	5.9	9.0	7.9	8.5	-
Industry Non-Performing Loans ( MYR Million )	393.0	413.7	508.4	634.1	-
% of Industry Non-Performing Loans	<2.0>	1.3	2.1	3.2	-
Mining	<0.8>	<3.8>	0.2	<2.4>	2.5
Oil & Gas	12.7	2.1	0.5	<1.7>	-
Other Mining	-	-	-	-	-
Industry Non-performing Loans ( MYR Million )	36.0	44.2	49.7	46.5	-
% of Industry Non-performing Loans	0.1	0.1	0.1	0.1	-
Manufacturing #	1.3	<9.4>	11.4	5.6	4.5
Exported-oriented Industries	2.7	<19.0>	12.1	2.8	-
Electrical & Electronics	2.4	<30.3>	28.4	<4.9>	-
Rubber Products	4.2	<10.1>	25.3	15.4	-
Wood Products	<6.0>	<24.1>	20.1	<7.3>	-
Textiles & Apparel	1.9	<19.5>	<0.4>	14.8	-
Domestic-oriented Industries	9.9	<9.8>	16.3	6.3	-
Food, Beverages & Tobacco	9.5	0.2	3.0	4.2	-
Chemical & Chemical Products	1.4	<7.7>	16.2	5.6	-
Plastic Products	6.5	<9.1>	2.4	3.8	-
Iron & Steel	16.8	<32.7>	29.3	2.4	-
Fabricated Metal Products	14.7	<2.5>	14.9	25.2	-
Non-metallic Mineral	8.3	<15.5>	20.2	16.3	-
Transport Equipment	27.1	<13.5>	36.5	<9.4>	-
Paper & Paper Products	8.6	<5.0>	18.7	15.6	-
Crude Oil Refineries	7.8	0.2	<11.4>	9.3	-
Industry Non-Performing Loans ( MYR Million )	5,729.4	6,007.3	6,217.5	6,537.2	-
% of Industry Non-Performing Loans	16.8	18.3	23.8	25.7	-
Construction	2.1	5.8	5.1	4.4	7.0
Industry Non-Performing Loans ( MYR Million )	4,149.8	3,241.8	4,038.5	3,856.9	-
% of Industry Non-Performing Loans	12.2	9.9	10.7	10.2	-
Services	7.3	2.6	6.5	6.4	6.5
Electric, Gas & Water	5.0	0.4	8.5	5.6	4.8
Transport, Storage & Communication	7.8	1.6	7.7	6.5	7.3
Wholesale, Retail, Hotel & Restaurant	10.0	2.8	4.7	5.2	6.9
Finance, Insurance & Real Estate	9.2	3.8	6.1	6.3	6.5
Government Services	8.6	2.0	6.7	7.6	5.6
Other Services	5.9	4.4	4.2	5.4	5.7
Industry Non-Performing Loans ( MYR Million )	8,281.4	6,631.3	7,384.6	6,825.2	-
% of Industry Non-Performing Loans	24.3	20.2	25.7	23.4	-
* Estimate / Preliminary
** Forecast
# Based On Manufacturing Production Index (Source : Department of Statistics / Economic Report / Bank Negara Report)

INDUSTRY ANALYSIS

MSIC CODE
47593 : Retail sale of household utensils and cutlery, crockery, glassware, chinaware and pottery
INDUSTRY :	TRADING
The wholesale and retail trade sector grew 7.1% in the first half of the year 2011 supported by strong consumer spending amid favourable labour market conditions and sustained disposable income. This was reflected in the higher distributive trade index which increased 15.9%, with wholesale and retail trade indices increasing 19.2% and 7.8%, respectively.
It is anticipated that the retail industry will grow 6.0 per cent in the year 2012.
Malaysia's retail sector for 2011 is expected to grow 6 per cent or RM81.59 billion worth of retail sales, similar to the year 2010, due to concerns of high oil prices, declining purchasing power and high cost of doing business. The Middle East and North Africa civil wars have caused the world oil prices to climb. This has led to further rise in the cost of running retail businesses, especially in terms of transportation cost. Many retailers have no choice but to pass the increased cost to end consumers. At the same time, natural disasters (tsunamis, floods, droughts, snow storms, tornadoes and earthquakes) that occurred in all parts of the world has also led to a shortage in the supply of food and raw materials. The phenomenon has pushed retail prices up.In addition, the continual removal of government subsidies since 2010 has pushed inflation upwards. Consequently, rising prices of retail goods contributed to an expectation of moderate performance.
During the first seven months of 2011, other consumption indicators such as imports of consumption goods and credit card spending increased 12.8% and 11.8%, respectively. Sales of motor vehicles declined 3% on account of supply chain disruptions following devastating March 2011 earthquake and tsunami in Japan.
Growth of the sector is anticipated to remain encouraging with ongoing efforts by the Government to increase its contribution to the economy. Major initiatives include increasing the number of large format stores such as hypermarkets, superstores and departmental stores are carried out to boost the economy.
Meanwhile, the Government has introduced the Retail Shop Transformation (TUKAR) programme. Under this programme, selected large format retailers will assist small retailers to improve their premises and layout which include attractive product display shelves, enhanced lighting and point-of-sales system to manage product inventory,
OVERALL INDUSTRY OUTLOOK : Average Growth

CREDIT RISK EVALUATION & RECOMMENDATION

Incorporated in 2006, the SC is a Private Limited company, focusing on distribution of fibreglass materials. Having been in business for 7 years, the SC has established a remarkable clientele base for itself which has contributed to its business growth. With a weak shareholders' backing, the SC's capital position is weak. Inadequate capital may be a constraint to the SC as it limits its ability to expand its business in future. Presently, the issued and paid up capital of the SC stands at RM200,000.

Apart from supplying its products to the local market, the SC also exports to overseas countries. Its ability to penetrate into the global market has benefited the SC in terms of higher profitability and well diversified its business risk. Hence, better growth prospect can be expected. Being a small company, the SC's business operation is supported by 10 employees. Overall, we regard that the SC's management capability is average.

Despite the lower turnover, the SC's pre-tax profit have increased compared to the previous year. The higher profit could be due to better control of its operating costs and efficiency in utilising its resources. Return on shareholders' funds of the SC was at an acceptable range which indicated that the management was efficient in utilising its funds to generate income. The SC is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. Being a lowly geared company, the SC is exposed to low financial risk as it is mainly dependent on its internal funds to finance its business needs. Given a positive net worth standing at MYR 1,880,414, the SC should be able to maintain its business in the near terms.

The SC's supplier are from both the local and overseas countries. This will eliminates the risk of dependency on deliveries from a number of key suppliers and insufficient quantities of its raw materials. Overall the SC has a good control over its resources.

Overall, the SC's payment habit is good as the SC has a good credit control and it could be taking advantage of the cash discounts while maintaining a good reputation with its creditors.

The industry shows an upward trend and this trend is very likely to sustain in the near terms. Hence, the SC is expected to benefit from the favourable outlook of the industry.

Based on the above condition, we recommend credit be granted to the SC normally.

PROFIT AND LOSS ACCOUNT

THE FINANCIAL STATEMENTS WERE PREPARED IN ACCORDANCE WITH MALAYSIAN FINANCIAL REPORTING STANDARDS(FRS)

RP PRODUCTS SDN. BHD.

Financial Year End	31/12/2011	31/12/2010	31/12/2009	31/12/2008	31/12/2007
Months	12	12	12	12	12
Consolidated Account	Company	Company	Company	Company	Company
Audited Account	YES	YES	YES	YES	YES
Unqualified Auditor's Report (Clean Opinion)	YES	YES	YES	YES	YES
Financial Type	FULL	FULL	SUMMARY	SUMMARY	SUMMARY
Currency	MYR	MYR	MYR	MYR	MYR
TURNOVER	10,367,652	11,778,802	12,598,061	16,879,921	13,457,899
	----------------	----------------	----------------	----------------	----------------
Total Turnover	10,367,652	11,778,802	12,598,061	16,879,921	13,457,899
Costs of Goods Sold	<8,848,866>	<9,799,366>	-	-	-
	----------------	----------------	----------------	----------------	----------------
Gross Profit	1,518,786	1,979,436	-	-	-
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	471,376	462,149	246,967	351,658	392,924
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	471,376	462,149	246,967	351,658	392,924
Taxation	<105,743>	<99,392>	<58,757>	<66,836>	<85,583>
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	365,633	362,757	188,210	284,822	307,341
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	1,314,781	1,025,024	836,814	551,992	208,151
	----------------	----------------	----------------	----------------	----------------
As restated	1,314,781	1,025,024	836,814	551,992	208,151
	----------------	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	1,680,414	1,387,781	1,025,024	836,814	515,492
DIVIDENDS - Ordinary (paid & proposed)	-	-	-	-	36,500
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	1,680,414	1,387,781	1,025,024	836,814	551,992
	=============	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Others	<25,941>	<48,198>	-	-	-
	----------------	----------------
	<25,941>	<48,198>

BALANCE SHEET

RP PRODUCTS SDN. BHD.

ASSETS EMPLOYED:
FIXED ASSETS	272,495	68,385	91,546	147,521	134,468
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	272,495	68,385	91,546	147,521	134,468
CURRENT ASSETS
Stocks	808,012	1,036,550	-	-	-
Trade debtors	1,848,075	2,500,828	-	-	-
Other debtors, deposits & prepayments	15,000	16,513	-	-	-
Short term deposits	274,000	100,000	-	-	-
Amount due from director	125,000	25,000	-	-	-
Cash & bank balances	549,063	1,194,709	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	3,619,150	4,873,600	4,671,466	3,653,942	3,388,044
	----------------	----------------	----------------	----------------	----------------
TOTAL ASSET	3,891,645	4,941,985	4,763,012	3,801,463	3,522,512
	=============	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	1,663,355	2,792,881	-	-	-
Other creditors & accruals	105,206	611,094	-	-	-
Hire purchase & lease creditors	70,220	14,893	-	-	-
Bill & acceptances payable	136,796	-	-	-	-
Other liabilities & accruals	1,555	8,336	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	1,977,132	3,427,204	3,593,995	2,799,693	2,923,969
	----------------	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	1,642,018	1,446,396	1,077,471	854,249	464,075
	----------------	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	1,914,513	1,514,781	1,169,017	1,001,770	598,543
	=============	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	200,000	200,000	200,000	200,000	100,000
	----------------	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	200,000	200,000	200,000	200,000	100,000
RESERVES
Retained profit/(loss) carried forward	1,680,414	1,387,781	1,025,024	836,814	551,992
Others	-	<73,000>	<73,000>	<3,788,986>	<73,000>
	----------------	----------------	----------------	----------------	----------------
TOTAL RESERVES	1,680,414	1,314,781	952,024	<2,952,172>	478,992
	----------------	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	1,880,414	1,514,781	1,152,024	<2,752,172>	578,992
LONG TERM LIABILITIES
Hire purchase creditors	23,099	-	-	-	-
Deferred taxation	11,000	-	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	34,099	-	16,993	3,753,942	19,551
	----------------	----------------	----------------	----------------	----------------
	1,914,513	1,514,781	1,169,017	1,001,770	598,543
	=============	=============	=============	=============	=============

FINANCIAL RATIO

RP PRODUCTS SDN. BHD.

TYPES OF FUNDS
Cash	823,063	1,294,709	-	-	-
Net Liquid Funds	823,063	1,294,709	-	-	-
Net Liquid Assets	834,006	409,846	1,077,471	854,249	464,075
Net Current Assets/(Liabilities)	1,642,018	1,446,396	1,077,471	854,249	464,075
Net Tangible Assets	1,914,513	1,514,781	1,169,017	1,001,770	598,543
Net Monetary Assets	799,907	409,846	1,060,478	<2,899,693>	444,524
BALANCE SHEET ITEMS
Total Borrowings	93,319	14,893	-	-	-
Total Liabilities	2,011,231	3,427,204	3,610,988	6,553,635	2,943,520
Total Assets	3,891,645	4,941,985	4,763,012	3,801,463	3,522,512
Net Assets	1,914,513	1,514,781	1,169,017	1,001,770	598,543
Net Assets Backing	1,880,414	1,514,781	1,152,024	<2,752,172>	578,992
Shareholders' Funds	1,880,414	1,514,781	1,152,024	<2,752,172>	578,992
Total Share Capital	200,000	200,000	200,000	200,000	100,000
Total Reserves	1,680,414	1,314,781	952,024	<2,952,172>	478,992
LIQUIDITY (Times)
Cash Ratio	0.42	0.38	-	-	-
Liquid Ratio	1.42	1.12	-	-	-
Current Ratio	1.83	1.42	1.30	1.31	1.16
WORKING CAPITAL CONTROL (Days)
Stock Ratio	28	32	-	-	-
Debtors Ratio	65	77	-	-	-
Creditors Ratio	69	104	-	-	-
SOLVENCY RATIOS (Times)
Gearing Ratio	0.05	0.01	-	-	-
Liabilities Ratio	1.07	2.26	3.13	<2.38>	5.08
Times Interest Earned Ratio	<17.17>	<8.59>	-	-	-
Assets Backing Ratio	9.57	7.57	5.85	5.01	2.99
PERFORMANCE RATIO (%)
Operating Profit Margin	4.55	3.92	1.96	2.08	2.92
Net Profit Margin	3.53	3.08	1.49	1.69	2.28
Return On Net Assets	23.27	27.33	21.13	35.10	65.65
Return On Capital Employed	22.44	27.06	21.13	35.10	65.65
Return On Shareholders' Funds/Equity	19.44	23.95	16.34	<10.35>	53.08
Dividend Pay Out Ratio (Times)	0.00	0.00	-	-	0.12
NOTES TO ACCOUNTS
Contingent Liabilities	0	0

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.84
UK Pound	1	Rs.88.54
Euro	1	Rs.72.63

INFORMATION DETAILS

Report Prepared by :

PDT

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%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

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