MIRA INFORM REPORT

Report Date :

18.06.2012

IDENTIFICATION DETAILS

Name :	WHITE HORSE CERAMIC INDUSTRIES SDN BHD
Formerly Known As :	W.H. CERAMIC INDUSTRIES SDN BHD
Registered Office :	Plo 464, Jalan Gangsa, Pasir Gudang Industrial Estate, 81700 Pasir Gudang, Johor
Country :	Malaysia
Financials (as on) :	31.12.2010
Date of Incorporation :	09.05.1991
Com. Reg. No.:	216824-X
Legal Form :	Private Limited
Line of Business :	Manufacturer & Distribution Of Ceramic & Homogeneous Tiles
No. of Employees :	2,000

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 :	Good
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)
Malaysia	A2	A2

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

* Adopted abbreviations :	SC - Subject Company (the company enquired by you)
	N/A - Not Applicable

EXECUTIVE SUMMARY

REGISTRATION NO.

:

216824-X

COMPANY NAME

:

WHITE HORSE CERAMIC INDUSTRIES SDN BHD

FORMER NAME

:

W.H. CERAMIC INDUSTRIES SDN BHD (22/07/1994)

INCORPORATION DATE

:

09/05/1991

COMPANY STATUS

:

EXIST

LEGAL STATUS

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

PLO 464, JALAN GANGSA, PASIR GUDANG INDUSTRIAL ESTATE, 81700 PASIR GUDANG, JOHOR, MALAYSIA.

BUSINESS ADDRESS

:

PLO 464, JALAN GANGSA, PASIR GUDANG INDUSTRIAL ESTATE, 81700 PASIR GUDANG, JOHOR, MALAYSIA.

TEL.NO.

:

07-2518555

FAX.NO.

:

07-2518222

EMAIL

:

whcisb@whitehorse.com.my

WEB SITE

:

www.whitehorse.com.my

CONTACT PERSON

:

TEO SWEE TENG ( DEPUTY MANAGING DIRECTOR )

INDUSTRY CODE

:

26930

PRINCIPAL ACTIVITY

:

MANUFACTURER & DISTRIBUTION OF CERAMIC & HOMOGENEOUS TILES

AUTHORISED CAPITAL

:

MYR 100,000,000.00 DIVIDED INTO
ORDINARY SHARE 100,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 20,680,000.00 DIVIDED INTO
ORDINARY SHARES 14,688,000 CASH AND 5,992,000 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 421,479,316 [2010]

NET WORTH

:

MYR 453,434,716 [2010]

M1000 OVERALL RANKING

:

808[2011]

M1000 INDUSTRY RANKING

:

15[2011]

STAFF STRENGTH

:

2,000 [2012]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

PAYMENT

:

GOOD

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

GOOD

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

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) manufacturer & distribution of ceramic & homogeneous tiles.

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

According to the Malaysia 1000 publication, the SC's ranking are as follows:
YEAR	2011	2009	2008	2005
OVERALL RANKING	808	824	744	724
INDUSTRY RANKING	15	21	16	18

The immediate and ultimate holding company of the SC is WHITE HORSE BHD, a company incorporated in MALAYSIA.

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

Name	Address	IC/PP/Loc No	Shareholding	(%)
WHITE HORSE BHD	PLO 464, JALAN GANGSA, PASIR GUDANG INDUSTRIAL ESTATE, 81700 PASIR GUDANG, JOHOR, MALAYSIA.	455130	20,680,000.00	100.00
			---------------	------
			20,680,000.00	100.00
			============	=====

+ Also Director

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MR. TEO KIM LAP
Address	:	383-D, TAMAN PRINGGIT JAYA, 75400 MELAKA, MELAKA, MALAYSIA.
IC / PP No	:	5717294
New IC No	:	590919-04-5697
Date of Birth	:	19/09/1959
Nationality	:	MALAYSIAN CHINESE
Date of Appointment	:	29/12/1997
Working Experience	:	VENTURED INTO THE CERAMIC TILE INDUSTRY IN 1983 AS A DISTRIBUTOR OF CERAMIC TILES IN MALAYSIA

DIRECTOR 2

Name Of Subject	:	MR. TEO KIM TAY
Address	:	383-D, TAMAN PRINGGIT JAYA, 75400 MELAKA, MELAKA, MALAYSIA.
IC / PP No	:	7267439
New IC No	:	640216-04-5597
Date of Birth	:	16/02/1964
Nationality	:	MALAYSIAN CHINESE
Date of Appointment	:	09/05/1991
Working Experience	:	VENTURED IN TILE INDUSTRY IN 1983 & ONE OF THE FOUNDING MEMBERS OF WHITE HORSE CERAMIC INDUSTRIES S/B

DIRECTOR 3

Name Of Subject	:	MR. TEO SWEE TENG
Address	:	383-D, TAMAN PRINGGIT JAYA, 75400 MELAKA, MELAKA, MALAYSIA.
IC / PP No	:	5184387
New IC No	:	570619-04-5507
Date of Birth	:	19/06/1957
Nationality	:	MALAYSIAN
Date of Appointment	:	09/05/1991
Working Experience	:	JOINT VENTURE WITH THE TAIWANESE & S'POREAN INVESTOR.

DIRECTOR 4

Name Of Subject	:	CHENG SOON MONG
Address	:	1, SUNGEI KADUT WAY, 728770, SINGAPORE.
IC / PP No	:	1148647I
Nationality	:	SINGAPOREAN
Date of Appointment	:	09/05/1991

DIRECTOR 5

Name Of Subject	:	LIAO SHEN HUA
Address	:	24 YING-TAO ROAD, YING-KO CHEN, TAIPEI HSIEN, TAIWAN.
IC / PP No	:	P214891668
Nationality	:	TAIWANESE
Date of Appointment	:	15/04/1992
Remark	:	OLD PP: 13235892I

DIRECTOR 6

Name Of Subject	:	LIAO YUAN-SHUN
Address	:	24, YING-TAO ROAD, YING-KO CHEN HSIEN, TAIPEI, TAIWAN.
IC / PP No	:	P210346250
Nationality	:	TAIWANESE
Date of Appointment	:	09/05/1991
Remark	:	OLD PP: M20158111

DIRECTOR 7

Name Of Subject	:	LIAO JUNG CHU
Address	:	24, YING-TAO ROAD, YING-KO CHEN, HSIEN, TAIPEI, TAIWAN.
IC / PP No	:	P213142266
Nationality	:	TAIWANESE
Date of Appointment	:	09/05/1991

MANAGEMENT

1)	Name of Subject	:	TEO SWEE TENG
	Position	:	DEPUTY MANAGING DIRECTOR

2)	Name of Subject	:	LIAO YUAN SHUN
	Position	:	MANAGING DIRECTOR

3)	Name of Subject	:	RAYMOND LOO
	Position	:	ASSISTANT GENERAL MANAGER

4)	Name of Subject	:	ARIEL
	Position	:	SECRETARY

AUDITOR

Auditor	:	ERNST & YOUNG
Auditor' Address	:	LOT 1, MENARA PERTAM, JALAN BBP2, TAMAN BATU BERENDAM PUTRA, 6TH FLOOR, 75350 BATU BERENDAM, MELAKA, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MS. SEAN NE TEO
	IC / PP No	:	A2843698
	New IC No	:	740529-01-5944
	Address	:	334-B, JALAN TERATAI 3, TAMAN BUNGA RAYA, 75450 AIR KEROH, MELAKA, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

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

:

07/03/2002

Description Of Charge

:

NEGATIVE PLEDGE

Amount Secured

:

RM74,400,000.00

Description Of Property Affected

:

FUTURE ASSETS

Name & Address Of Chargee

:

MALAYAN BANKING BHD
69-75 JALAN MERANTI MERAH, TAMAN KEBUN TEH, 80250 JOHOR BAHRU, JOHOR, MALAYSIA.

Form 40 Dated 14/03/2002

Registered and Numbered 24 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
Overseas	:	YES
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	:	70%
Domestic Markets	:	MALAYSIA
Overseas	:	YES	Percentage	:	30%
Export Market	:	WORLDWIDE
Credit Term	:	30 - 60 DAYS
Payment Mode	:	CHEQUES,LETTER OF CREDIT (LC)

OPERATIONS

Products manufactured

:

CERAMIC TILES, HOMOGENEOUS TILES, GLAZED WALL TILES AND FLOOR TILES

Certification of Products

:

1 ) MS ISO 13006 : 2003

Competitor(s)

:

GUOCERA TILE INDUSTRIES SDN BHD
JOHAN CERAMICS BHD
MALAYSIAN MOSAICS BHD
WEMBLEY INDUSTRIES HOLDINGS BHD

Member(s) / Affiliate(s)

:

FEDERATION OF MALAYSIAN MANUFACTURERS (FMM)

SMI ASSOCIATION OF MALAYSIA

SMALL & MEDIUM ENTERPRISE

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

Ownership of premises

:

OWNED

Production Line

:

8

Total Number of Employees:
YEAR	2012	2011	2010	2009	2008	2007
GROUP	N/A	N/A	N/A	N/A	N/A	N/A
COMPANY	2,000	1,500	1,500	1,500	1,400	1,500

Branch

:

NO

Other Information:

The SC is principally engaged in the (as a / as an) manufacturer & distribution of ceramic & homogeneous tiles.

The SC is a Malaysia's biggest and fastest growing ceramic tile manufacturer.

The SC produces high quality tiles encompassing a full range of products for every corner of beautiful home.

These include full concept wall and floor tiles, porcelain and glazed porcelain tiles, high end multi-effect granite tiles, as well as borders and accessories.

Some of the product that the SC offer are:

- ceramic wall tile

- ceramic floor tiles

- porcelain granite tiles

- porcelain tiles etc

The SC's ceramic tiles offer a wide range of motifs, colours and textures. Matt, polished or gloss, each ceramic tile brings personality and functionality to the buildings in which they are incorporated.

The SC is recognised as one of the leading ceramic tile manufacturers in the Asia-Pacific region.

PROJECTS

No projects found in our databank

CURRENT INVESTIGATION

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client	:	072518555
Current Telephone Number	:	07-2518555
Match	:	YES
Address Provided by Client	:	PLO 464, JALAN GANGSA, PASIR GUDANG INDUSTRIAL ESTATE,81700,PASIR GUDANG,JOHOR.
Current Address	:	PLO 464, JALAN GANGSA, PASIR GUDANG INDUSTRIAL ESTATE, 81700 PASIR GUDANG, JOHOR, MALAYSIA.
Match	:	YES
Latest Financial Accounts	:	YES

Other Investigations

we contacted one of the Senior staff from the Accounts Department. She provided some information on the SC.

FINANCIAL ANALYSIS

Profitability
Turnover	:	Erratic	[	2007 - 2010	]
Profit/(Loss) Before Tax	:	Increased	[	2007 - 2010	]
Return on Shareholder Funds	:	Acceptable	[	13.40%	]
Return on Net Assets	:	Acceptable	[	16.16%	]
The fluctuating turnover reflects the fierce competition among the existing and new market players.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	:	Unfavourable	[	111 Days	]
Debtor Ratio	:	Unfavourable	[	105 Days	]
Creditors Ratio	:	Favourable	[	27 Days	]
The SC could be incurring higher holding cost. As its capital was tied up in stocks, it could face liquidity problems. The SC's debtors ratio was high. The SC should tighten its credit control and improve its collection period. The SC had a favourable creditors' ratio as evidenced by its favourable collection days. The SC could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.
Liquidity
Liquid Ratio	:	Acceptable	[	0.89 Times	]
Current Ratio	:	Unfavourable	[	1.47 Times	]
The SC's liquid ratio was slightly low. This could indicate that the SC's working capital was slightly deficient. The SC will have to improve its liquidity position either by obtaining short term financing or increase its paid up capital so that it can meet all its short term obligations as and when they fall due.
Solvency
Interest Cover	:	Favourable	[	38.63 Times	]
Gearing Ratio	:	Favourable	[	0.02 Times	]
The interest cover showed that the SC was able to service the interest. The favourable interest cover could indicate that the SC was making enough profit to pay for the interest accrued. 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 :
Although the turnover was erratic, the SC had maintained a steady growth in its profit. This indicate the management's efficiency in controlling its costs and profitability. The SC's liquidity was at an acceptable range. If the SC is able to obtain further short term financing, it should be able to meet all its short term obligations. With the favourable interest cover, the SC could be able to service all the accrued interest without facing any difficulties. 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 : FAIR

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
26930 : Manufacture of structural non-refractory clay and ceramic products
INDUSTRY :	CONSTRUCTION
The construction sector will drive the national economy in 2012 by a budgeted growth of 7%, much has to be done now to meet the target, especially when the Malaysian construction industry is set to grow by a bullish RM92 billion in 2012 from RM85 billion in 2010. Timely awards and implementation of projects as per the 10th Malaysia Plan (10MP) and the Economic Transformation Programme (ETP) from now will contribute positively to the growth in 2012, as the projects require a gestation period in order to generate impact to the economy.
The Master Builders Association of Malaysia (MBAM) is concerned that the construction sector may underperform in 2011 if the sector's 4Q 2011 performance does not improve substantially. The construction sector had seen only 3% growth in 3Q 2011. The sector grew by only 3.8% and 0.6% in the first two quarters of 2011 respectively. The overall growth for 2010 was 5.3%.
Major building material producers, such as cement and steel manufacturers, have been reporting lesser demands for the year to date. For projects involving foreign direct investments (FDI) and domestic investors, the timely issue of construction permits will further improve confidence of the investors.
Rising building material costs are haunting construction companies again. Local builders say construction costs may rise at a faster pace than earnings, prompting players to seek greater liberty to import building materials and equipment at lower tariffs. Construction cost could rise more than 15% in 2012. For now, local builders can import steel products and cement at zero import duties. But players are lamenting that import taxes of 30% for other materials such as marble and tiles, are on the high side.
Rising expenses were stifling builders' profits as players were subject to fixed-price contracts. There would be cost overruns, delays and a higher risk of project failures when builders were unable to absorb the cost increases.
A planned and progressive award of projects will reduce any abrupt increase in demands for building materials and manpower which may jeopardise the targeted growth due to temporary shortages in supply as well as preventing unnecessary price increases which will burden contractors. The imminent enactment of the proposed Construction Industry Payment and Adjudication Act (CIPAA) will make the industry more healthy and sustainable for all players of the industry.
OVERALL INDUSTRY OUTLOOK : Average Growth

CREDIT RISK EVALUATION & RECOMMENDATION

Incorporated in 1991, the SC is a Private Limited company, focusing on manufacturer & distribution of ceramic & homogeneous tiles. The SC has been in business for over two decades. It has built up a strong clientele base and good reputation will enable the SC to further enhance its business in the near term. The SC is expected to enjoy a stable market shares. The SC is well backed by a listed company shareholders which would stimulate further growth for the SC. Hence, the potential growth of the SC is positive. The SC is a large entity with strong capital position. We are confident with the SC's business and its future growth prospect.

Over the years, the SC has established an extensive clientele base in the market. Besides catering to the local market, the SC has penetrated into other countries. With the contribution of both local and overseas customers, the SC is likely to be exposed to lower commercial risk. Hence, we believe that the SC has better business expansion opportunities in the future. Being a large entity, the SC has a steady workforce of 2,000 personnel to support its business operations. Its future prospects seem to be fairly good as its business operations are running relatively stable. Overall, we regard that the SC's management capability is average. This indicates that the SC has greater potential to improve its business performance and raising income for the SC.

We noted that both the turnover and profits have increased compared to the previous year. The higher profit could be due to increase in turnover and better control over its operating costs. 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 managed to maintain an adequate liquidity level, indicating that the SC has the ability to meet its 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 453,434,716, the SC should be able to maintain its business in the near terms.

Having a strong assets backing, the SC possesses latent assets as collateral for further financial extension. Hence, it has good chance of getting loans if the needs arises. 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 promptly.

PROFIT AND LOSS ACCOUNT

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

WHITE HORSE CERAMIC INDUSTRIES SDN BHD

Financial Year End	31/12/2010	31/12/2009	31/12/2008	31/12/2007
Months	12	12	12	12
Consolidated Account	Company	Company	Company	Company
Audited Account	YES	YES	YES	YES
Unqualified Auditor's Report (Clean Opinion)	YES	YES	YES	YES
Financial Type	FULL	FULL	FULL	FULL
Currency	MYR	MYR	MYR	MYR
TURNOVER	421,479,316	385,781,979	389,219,003	336,254,212
	----------------	----------------	----------------	----------------
Total Turnover	421,479,316	385,781,979	389,219,003	336,254,212
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	76,624,631	71,689,076	69,000,036	40,953,972
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	76,624,631	71,689,076	69,000,036	40,953,972
Taxation	<15,858,839>	<17,063,000>	<15,433,440>	<618,418>
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	60,765,792	54,626,076	53,566,596	40,335,554
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE EXTRAORDINARY ITEMS	60,765,792	54,626,076	53,566,596	40,335,554
Extraordinary items	-	-	-	59,810
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) ATTRIBUTABLE TO SHAREHOLDERS	60,765,792	54,626,076	53,566,596	40,395,364
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	354,167,452	333,094,676	291,542,870	269,263,186
Prior year adjustment	-	-	4,899,210	-
	----------------	----------------	----------------	----------------
As restated	354,167,452	333,094,676	296,442,080	269,263,186
	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	414,933,244	387,720,752	350,008,676	309,658,550
DIVIDENDS - Ordinary (paid & proposed)	<15,960,000>	<33,553,300>	<16,914,000>	<18,115,680>
	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	398,973,244	354,167,452	333,094,676	291,542,870
	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Others	2,036,377	3,953,598	7,557,828	10,791,401
	----------------	----------------	----------------	----------------
	2,036,377	3,953,598	7,557,828	10,791,401
	=============	=============	=============	=============

BALANCE SHEET

WHITE HORSE CERAMIC INDUSTRIES SDN BHD

ASSETS EMPLOYED:
FIXED ASSETS	335,947,049	346,419,591	301,013,611	333,018,773
LONG TERM INVESTMENTS/OTHER ASSETS
Subsidiary companies	11,260,373	8,911,245	8,911,245	8,911,245
Investment properties	35,970,540	35,863,281	33,915,000	28,614,373
Others	378,967	378,967	49,060,875	50,095,137
	----------------	----------------	----------------	----------------
TOTAL LONG TERM INVESTMENTS/OTHER ASSETS	47,609,880	45,153,493	91,887,120	87,620,755
	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	383,556,929	391,573,084	392,900,731	420,639,528
CURRENT ASSETS
Stocks	128,161,759	128,019,246	125,739,179	136,514,318
Trade debtors	121,487,502	107,511,903	105,564,795	108,687,782
Other debtors, deposits & prepayments	48,307,892	12,270,626	12,518,452	7,811,717
Short term deposits	22,084,445	25,570,000	38,900,000	-
Amount due from subsidiary companies	-	-	1,109,373	-
Cash & bank balances	2,634,185	12,793,084	9,468,589	36,194,326
	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	322,675,783	286,164,859	293,300,388	289,208,143
	----------------	----------------	----------------	----------------
TOTAL ASSET	706,232,712	677,737,943	686,201,119	709,847,671
	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	31,562,462	27,455,076	26,759,140	17,894,732
Other creditors & accruals	145,822,332	136,467,724	18,133,780	36,575,269
Hire purchase & lease creditors	-	24,164	58,059	-
Short term borrowings/Term loans	-	30,000,000	-	10,000,000
Other borrowings	10,000,000	10,000,000	45,000,000	25,000,000
Bill & acceptances payable	20,940,093	23,532,948	25,663,130	20,144,738
Amounts owing to holding company	-	-	111,067,602	43,286,250
Provision for taxation	5,008,431	5,799,946	6,109,936	1,156,703
Other liabilities	6,200,678	-	-	-
	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	219,533,996	233,279,858	232,791,647	154,057,692
	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	103,141,787	52,885,001	60,508,741	135,150,451
	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	486,698,716	444,458,085	453,409,472	555,789,979
	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	20,680,000	20,680,000	20,680,000	20,680,000
	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	20,680,000	20,680,000	20,680,000	20,680,000
RESERVES
Share premium	9,312,000	9,312,000	9,312,000	9,312,000
Revaluation reserve	24,469,472	24,469,472	24,469,472	23,228,455
Retained profit/(loss) carried forward	398,973,244	354,167,452	333,094,676	291,542,870
	----------------	----------------	----------------	----------------
TOTAL RESERVES	432,754,716	387,948,924	366,876,148	324,083,325
	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	453,434,716	408,628,924	387,556,148	344,763,325
LONG TERM LIABILITIES
Long term loans	-	-	-	70,000,000
Other long term borrowings	-	-	30,000,000	-
Hire purchase creditors	-	-	24,163	-
Deferred taxation	33,264,000	35,829,161	35,829,161	41,045,254
Others	-	-	-	99,981,400
	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	33,264,000	35,829,161	65,853,324	211,026,654
	----------------	----------------	----------------	----------------
	486,698,716	444,458,085	453,409,472	555,789,979
	=============	=============	=============	=============

FINANCIAL RATIO

WHITE HORSE CERAMIC INDUSTRIES SDN BHD

TYPES OF FUNDS
Cash	24,718,630	38,363,084	48,368,589	36,194,326
Net Liquid Funds	24,718,630	8,363,084	48,368,589	26,194,326
Net Liquid Assets	<25,019,972>	<75,134,245>	<65,230,438>	<1,363,867>
Net Current Assets/(Liabilities)	103,141,787	52,885,001	60,508,741	135,150,451
Net Tangible Assets	486,698,716	444,458,085	453,409,472	555,789,979
Net Monetary Assets	<58,283,972>	<110,963,406>	<131,083,762>	<212,390,521>
BALANCE SHEET ITEMS
Total Borrowings	10,000,000	40,024,164	75,082,222	105,000,000
Total Liabilities	252,797,996	269,109,019	298,644,971	365,084,346
Total Assets	706,232,712	677,737,943	686,201,119	709,847,671
Net Assets	486,698,716	444,458,085	453,409,472	555,789,979
Net Assets Backing	453,434,716	408,628,924	387,556,148	344,763,325
Shareholders' Funds	453,434,716	408,628,924	387,556,148	344,763,325
Total Share Capital	20,680,000	20,680,000	20,680,000	20,680,000
Total Reserves	432,754,716	387,948,924	366,876,148	324,083,325
LIQUIDITY (Times)
Cash Ratio	0.11	0.16	0.21	0.23
Liquid Ratio	0.89	0.68	0.72	0.99
Current Ratio	1.47	1.23	1.26	1.88
WORKING CAPITAL CONTROL (Days)
Stock Ratio	111	121	118	148
Debtors Ratio	105	102	99	118
Creditors Ratio	27	26	25	19
SOLVENCY RATIOS (Times)
Gearing Ratio	0.02	0.10	0.19	0.30
Liabilities Ratio	0.56	0.66	0.77	1.06
Times Interest Earned Ratio	38.63	19.13	10.13	4.80
Assets Backing Ratio	23.53	21.49	21.93	26.88
PERFORMANCE RATIO (%)
Operating Profit Margin	18.18	18.58	17.73	12.18
Net Profit Margin	14.42	14.16	13.76	12.00
Return On Net Assets	16.16	17.02	16.88	9.31
Return On Capital Employed	16.16	15.94	16.88	9.15
Return On Shareholders' Funds/Equity	13.40	13.37	13.82	11.70
Dividend Pay Out Ratio (Times)	0.26	0.61	0.32	0.45
NOTES TO ACCOUNTS
Contingent Liabilities	0	0	0	0

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.55.76
UK Pound	1	Rs.86.69
Euro	1	Rs.70.44

INFORMATION DETAILS

Report Prepared by :

PRL

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.