MIRA INFORM REPORT

Report Date :

06.10.2012

IDENTIFICATION DETAILS

Name :	K.S. MURUGAN FLOUR MILL SDN BHD
Registered Office :	B-22, Jalan Sekerat, 1st Floor, 08000 Sungai Petani, Kedah
Country :	Malaysia
Financials (as on) :	31.12.2010
Date of Incorporation :	27.03.2001
Com. Reg. No.:	543045-X
Legal Form :	Private Limited
Line of Business :	Manufacturing of spices, flour ,curry powder & praying products
No. of Employees :	20

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.

:

543045-X

COMPANY NAME

:

K.S. MURUGAN FLOUR MILL SDN BHD

FORMER NAME

:

N/A

INCORPORATION DATE

:

27/03/2001

COMPANY STATUS

:

EXIST

LEGAL STATUS

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

B-22, JALAN SEKERAT, 1ST FLOOR, 08000 SUNGAI PETANI, KEDAH, MALAYSIA.

BUSINESS ADDRESS

:

F-278, MAIN ROAD P.O BOX NO.9, 08300 GURUN, KEDAH, MALAYSIA.

TEL.NO.

:

04-4686187

FAX.NO.

:

04-4680241

CONTACT PERSON

:

SUBRAMANIAM S/O KANAYAH ( MANAGING DIRECTOR )

INDUSTRY CODE

:

15494

PRINCIPAL ACTIVITY

:

MANUFACTURING OF SPICES, FLOUR ,CURRY POWDER & PRAYING PRODUCTS

AUTHORISED CAPITAL

:

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

ISSUED AND PAID UP CAPITAL

:

MYR 250,000.00 DIVIDED INTO
ORDINARY SHARES 250,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 14,927,148 [2010]

NET WORTH

:

MYR 1,869,239 [2010]

STAFF STRENGTH

:

20 [2012]

BANKER (S)

:

CIMB BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

MODERATE

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

PROPOSED CREDIT LIMIT

:

MYR 208,000 (USD 66,000)

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) manufacturing of spices, flour ,curry powder & praying products.

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	(%)
MS. LETCHUMY A/P S SIVALINGAM +	F-278 JALAN RAYA, 08300 GURUN, KEDAH, MALAYSIA.	511116-05-5228 8010136	125,000.00	50.00
MR. SUBRAMANIAM A/L KANAYAH +	F-278 JALAN RAYA, 08300 GURUN, KEDAH, MALAYSIA.	470811-02-5057 7568689	125,000.00	50.00
			---------------	------
			250,000.00	100.00
			============	=====

+ Also Director

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MR. SELVASUNDRAM S/O SUBRAMANIAM
Address	:	F-278, JALAN RAYA, 08300 GURUN, KEDAH, MALAYSIA.
IC / PP No	:	A2004118
New IC No	:	710823-05-5253
Date of Birth	:	23/08/1971
Nationality	:	MALAYSIAN INDIAN
Date of Appointment	:	19/05/2004

DIRECTOR 2

Name Of Subject	:	MR. SIVAKUMAR S/O SUBRAMANIAM
Address	:	F-278, JALAN RAYA, 08300 GURUN, KEDAH, MALAYSIA.
IC / PP No	:	A2417923
New IC No	:	721012-02-5425
Date of Birth	:	12/10/1972
Nationality	:	MALAYSIAN INDIAN
Date of Appointment	:	19/05/2004

DIRECTOR 3

Name Of Subject	:	MS. MOGANASUNDARI D/O SUBRAMANIAM
Address	:	F-278, JALAN RAYA, 08000 SUNGAI PETANI, KEDAH, MALAYSIA.
IC / PP No	:	A2754777
New IC No	:	740404-02-5540
Date of Birth	:	04/04/1974
Nationality	:	MALAYSIAN INDIAN
Date of Appointment	:	19/05/2004

DIRECTOR 4

Name Of Subject	:	MS. SARASWATHI D/O SUBRAMANIAM
Address	:	F-278, JALAN RAYA, 08300 GURUN, KEDAH, MALAYSIA.
IC / PP No	:	A3728064
New IC No	:	770107-02-5242
Date of Birth	:	07/01/1977
Nationality	:	MALAYSIAN INDIAN
Date of Appointment	:	19/05/2004

DIRECTOR 5

Name Of Subject	:	MS. LETCHUMY A/P S SIVALINGAM
Address	:	F-278 JALAN RAYA, 08300 GURUN, KEDAH, MALAYSIA.
IC / PP No	:	8010136
New IC No	:	511116-05-5228
Date of Birth	:	16/11/1951
Nationality	:	MALAYSIAN INDIAN
Date of Appointment	:	27/03/2001

DIRECTOR 6

Name Of Subject	:	MR. SUBRAMANIAM A/L KANAYAH
Address	:	F-278 JALAN RAYA, 08300 GURUN, KEDAH, MALAYSIA.
IC / PP No	:	7568689
New IC No	:	470811-02-5057
Date of Birth	:	11/08/1947
Nationality	:	MALAYSIAN INDIAN
Date of Appointment	:	27/03/2001

MANAGEMENT

1)	Name of Subject	:	SUBRAMANIAM S/O KANAYAH
	Position	:	MANAGING DIRECTOR

AUDITOR

Auditor	:	HISHAM & CO
Auditor' Address	:	44A, JALAN TODAK 2, BANDAR SEBERANG JAYA, LEVEL 1, 13800 BUTTERWORTH, PULAU PINANG, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MR. MOGANA SUNDRAM S/O VERAPATRAN
	IC / PP No	:	A1351357
	New IC No	:	690525-02-5499
	Address	:	22, LORONG 5A, TAMAN PERUDA, 08000 SUNGAI PETANI, KEDAH, MALAYSIA.

2)	Company Secretary	:	MR. RADHAKRISHNAN A/L MUTHYA
	IC / PP No	:	A1904736
	New IC No	:	710219-71-5235
	Address	:	86-V, JALAN PERGAM, 08000 SUNGAI PETANI, KEDAH, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

CIMB BANK 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

:

13/05/2008

Description Of Charge

:

CHARGE

Amount Secured

:

RM1,000,000.00

Description Of Property Affected

:

A LAND HELD UNDER GM 422 LOT 5626, MUKIM GURUN, KUALA MUDA, KEDAH

Name & Address Of Chargee

:

CIMB BANK BHD

Form 40 Dated 28/05/2008

Registered and Numbered 1 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	[	]	Average 61-90 Days	[	X	]
Fair 91-120 Days	[	]	Poor >120 Days	[	]

CLIENTELE

Local	:	YES	Percentage	:	100%
Domestic Markets	:	MALAYSIA
Overseas	:	NO	Percentage	:	0%
Credit Term	:	30 - 60 DAYS
Payment Mode	:	CHEQUES
Type of Customer	:	DEPARTMENTAL STORES,RESTAURANTS

OPERATIONS

Products manufactured

:

SPICES, FLOUR ,CURRY POWDER & PRAYING PRODUCTS

Brand Name

:

PEACOCK

Competitor(s)

:

ADABI CONSUMER INDUSTRIES SDN BHD
BABA PRODUCTS (M) SDN BHD
BESTA CORPORATION SDN BHD
GABAN SPICE MANUFACTURING (M) SDN BHD
SPICES & SEASONINGS SPECIALITIES SDN BHD

Total Number of Employees:
YEAR	2012	2011	2010	2009	2008
GROUP	N/A	N/A	N/A	N/A	N/A
COMPANY	20	20	15	20	25

Branch

:

NO

Other Information:

The SC is principally engaged in the (as a / as an) manufacturing of spices, flour ,curry powder & praying products.

The SC produces and sells wide range of products including vermicelli, pappadam chips, matpe beans, omam water, curry powder, pure gingelly oil and gram dhall flour.

The SC's praying products are such as incense sticks,champhor tablets, gum benjamin tablets and sandal wood powder.

The SC is mainly involved in processing of Indian food products.

The SC has its own brand name which is called as "Peacock".

PROJECTS

No projects found in our databank

CURRENT INVESTIGATION

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client	:	N/A
Current Telephone Number	:	04-4686187
Match	:	N/A
Address Provided by Client	:	F 278 JALAN RAYA, 08300 GURAN KEDAH, DARULAMAN
Current Address	:	F-278, MAIN ROAD P.O BOX NO.9, 08300 GURUN, KEDAH, MALAYSIA.
Match	:	NO
Latest Financial Accounts	:	YES

Other Investigations

On 1st October 2012 we contacted one of the staff from the Admin Department. She provided some information on the SC.

The address provided is incomplete.

FINANCIAL ANALYSIS

Profitability
Turnover	:	Increased	[	2008 - 2010	]
Profit/(Loss) Before Tax	:	Increased	[	2008 - 2010	]
Return on Shareholder Funds	:	Acceptable	[	16.61%	]
Return on Net Assets	:	Acceptable	[	16.29%	]
The SC's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.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	[	24 Days	]
Debtor Ratio	:	Acceptable	[	56 Days	]
Creditors Ratio	:	Favourable	[	50 Days	]
The SC's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The SC's management was quite efficient in handling its debtors. The SC's debtors days were at an acceptable range, thus the risk of its debts turning bad was minimised. 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	:	Unfavourable	[	0.69 Times	]
Current Ratio	:	Unfavourable	[	0.99 Times	]
A low liquid ratio means that the SC may be facing working capital deficiency. If the SC cannot obtain additional financing or injection of fresh capital, it may face difficulties in meeting its short term obligations.
Solvency
Interest Cover	:	Acceptable	[	8.69 Times	]
Gearing Ratio	:	Favourable	[	0.53 Times	]
The SC's interest cover was slightly low. If there is no sharp fall in its profit or sudden increase in the interest rates, we believe the SC is able to generate sufficient income to service its interest and repay the loans. 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 :
Generally, the SC's performance has improved with higher turnover and profit. Due to its weak liquidity position, the SC will be faced with problems in meeting all its short term obligations if no short term loan is obtained or additional capital injected into the SC. The SC had an acceptable interest cover. If there is no sudden sharp increase in interest rate or fall in the SC's profit, we do believe the SC is able to generate sufficient cash flow to service its interest payment. 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
15494 : Manufacture of spices and curry powder
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 2001, the SC is a Private Limited company, focusing on manufacturing of spices, flour ,curry powder & praying products. Having been in the industry for over a decade, the SC has achieved a certain market share and has built up a satisfactory reputation in the market. It should have received supports from its regular customers. However, with a small paid up capital, the SC should put more efforts on its business to gain higher market share while competing aggressively in the market.

Over the years, the SC should have build up its clientele base and received supports from its regular customers. Investigation revealed that the SC's interest lies mostly in the local market. Thus, any adverse changes to the local economy might have a negative impact on the SC's business performance. Currently, the SC's business operation is supported by 20 employees. 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. 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. However, due to its weak liquidity position, the SC may face working capital deficiency in meeting its short term financial obligations if no fresh capital are injected into the SC. Nevertheless, given a positive net worth standing at MYR 1,869,239, 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.

The SC's payment habit is average. With its adequate working capital, the SC should be able to pay its short term debts.

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. The SC however faces moderate business risk as it has to compete with many well established players in the same field.

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)

K.S. MURUGAN FLOUR MILL SDN BHD

Financial Year End	31/12/2010	31/12/2009	31/12/2008
Months	12	12	12
Consolidated Account	Company	Company	Company
Audited Account	YES	YES	YES
Unqualified Auditor's Report (Clean Opinion)	YES	YES	YES
Financial Type	FULL	FULL	FULL
Currency	MYR	MYR	MYR
TURNOVER	14,927,148	12,723,508	11,621,086
Other Income	61,572	61,572	-
	----------------	----------------	----------------
Total Turnover	14,988,720	12,785,080	11,621,086
Costs of Goods Sold	<12,990,160>	<10,990,300>	-
	----------------	----------------	----------------
Gross Profit	1,998,560	1,794,780	-
	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	400,752	315,419	396,503
	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	400,752	315,419	396,503
Taxation	<90,251>	<106,059>	<82,482>
	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	310,501	209,360	314,021
	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	1,308,738	1,099,378	785,357
	----------------	----------------	----------------
As restated	1,308,738	1,099,378	785,357
	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	1,619,239	1,308,738	1,099,378
	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	1,619,239	1,308,738	1,099,378
	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Bank overdraft	-	101	1,222
Hire purchase	7,670	-	1,022
Term loan / Borrowing	44,411	55,396	28,859
	----------------	----------------	----------------
	52,081	55,497	31,103

BALANCE SHEET

K.S. MURUGAN FLOUR MILL SDN BHD

ASSETS EMPLOYED:
FIXED ASSETS	2,818,396	2,607,030	2,429,386
	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	2,818,396	2,607,030	2,429,386
CURRENT ASSETS
Stocks	995,211	892,854	618,257
Trade debtors	2,270,782	1,941,268	1,752,125
Other debtors, deposits & prepayments	8,608	3,650	3,650
Cash & bank balances	18,702	95,312	93,314
	----------------	----------------	----------------
TOTAL CURRENT ASSETS	3,293,303	2,933,084	2,467,346
	----------------	----------------	----------------
TOTAL ASSET	6,111,699	5,540,114	4,896,732
	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	1,770,731	1,507,661	1,135,361
Other creditors & accruals	722,429	746,997	797,155
Hire purchase & lease creditors	66,684	24,000	-
Short term borrowings/Term loans	35,627	34,164	30,746
Amounts owing to director	711,180	685,905	622,108
Provision for taxation	25,124	10,243	54,758
	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	3,331,775	3,008,970	2,640,128
	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	<38,472>	<75,886>	<172,782>
	----------------	----------------	----------------
TOTAL NET ASSETS	2,779,924	2,531,144	2,256,604
	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	250,000	250,000	250,000
	----------------	----------------	----------------
TOTAL SHARE CAPITAL	250,000	250,000	250,000
RESERVES
Retained profit/(loss) carried forward	1,619,239	1,308,738	1,099,378
	----------------	----------------	----------------
TOTAL RESERVES	1,619,239	1,308,738	1,099,378
	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	1,869,239	1,558,738	1,349,378
LONG TERM LIABILITIES
Long term loans	720,542	856,818	899,432
Hire purchase creditors	174,642	96,000	-
Deferred taxation	15,501	19,588	7,794
	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	910,685	972,406	907,226
	----------------	----------------	----------------
	2,779,924	2,531,144	2,256,604
	=============	=============	=============

FINANCIAL RATIO

K.S. MURUGAN FLOUR MILL SDN BHD

TYPES OF FUNDS
Cash	18,702	95,312	93,314
Net Liquid Funds	18,702	95,312	93,314
Net Liquid Assets	<1,033,683>	<968,740>	<791,039>
Net Current Assets/(Liabilities)	<38,472>	<75,886>	<172,782>
Net Tangible Assets	2,779,924	2,531,144	2,256,604
Net Monetary Assets	<1,944,368>	<1,941,146>	<1,698,265>
BALANCE SHEET ITEMS
Total Borrowings	997,495	1,010,982	930,178
Total Liabilities	4,242,460	3,981,376	3,547,354
Total Assets	6,111,699	5,540,114	4,896,732
Net Assets	2,779,924	2,531,144	2,256,604
Net Assets Backing	1,869,239	1,558,738	1,349,378
Shareholders' Funds	1,869,239	1,558,738	1,349,378
Total Share Capital	250,000	250,000	250,000
Total Reserves	1,619,239	1,308,738	1,099,378
LIQUIDITY (Times)
Cash Ratio	0.01	0.03	0.04
Liquid Ratio	0.69	0.68	0.70
Current Ratio	0.99	0.97	0.93
WORKING CAPITAL CONTROL (Days)
Stock Ratio	24	26	19
Debtors Ratio	56	56	55
Creditors Ratio	50	50	36
SOLVENCY RATIOS (Times)
Gearing Ratio	0.53	0.65	0.69
Liabilities Ratio	2.27	2.55	2.63
Times Interest Earned Ratio	8.69	6.68	13.75
Assets Backing Ratio	11.12	10.12	9.03
PERFORMANCE RATIO (%)
Operating Profit Margin	2.68	2.48	3.41
Net Profit Margin	2.08	1.65	2.70
Return On Net Assets	16.29	14.65	18.95
Return On Capital Employed	15.91	14.52	18.95
Return On Shareholders' Funds/Equity	16.61	13.43	23.27
Dividend Pay Out Ratio (Times)	0.00	0.00	0.00
NOTES TO ACCOUNTS
Contingent Liabilities	0	0	0

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.51.61
UK Pound	1	Rs.83.57
Euro	1	Rs.67.17

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.