MIRA INFORM REPORT

Report Date :

30.10.2012

IDENTIFICATION DETAILS

Name :	MAXWELL PHARMA SDN. BHD.
Formerly Known As :	MAXWELL PHARMACY SDN BHD
Registered Office :	339,Mezzanine Floor, Jln Tuanku Abdul Rahman, Kuala Lumpur, 50100 Kuala Lumpur, Wilayah Persekutuan
Country :	Malaysia
Financials (as on) :	30.09.2011
Date of Incorporation :	21.06.2000
Com. Reg. No.:	517543-H
Legal Form :	Private Limited
Line of Business :	Manufacture and Wholesale of Pharmacuetical and Related Product
No. of Employees :	15

RATING & COMMENTS

MIRA’s Rating :

Ca

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Moderate
Payment Behaviour :	Slow
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 (31.03.2011)	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

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

EXECUTIVE SUMMARY

REGISTRATION NO.

:

517543-H

COMPANY NAME

:

MAXWELL PHARMA SDN. BHD.

FORMER NAME

:

MAXWELL PHARMACY SDN BHD (15/04/2009)

INCORPORATION DATE

:

21/06/2000

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

339,MEZZANINE FLOOR, JLN TUANKU ABDUL RAHMAN, KUALA LUMPUR, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

B2-02, PJ INDUSTRIAL PARK, JALAN KEMAJUAN, 46200 PETALING JAYA, SELANGOR, MALAYSIA.

TEL.NO.

:

03-79547877

FAX.NO.

:

03-79543877

EMAIL

:

rachelle.lee@goe.com.my

WEB SITE

:

www.goe.com.my

CONTACT PERSON

:

CHEW SOON KEONG ( CEO )

INDUSTRY CODE

:

2423

PRINCIPAL ACTIVITY

:

MANUFACTURE & WHOLESALE OF PHARMACUETICAL & RELATED PRODUCT

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 4,073,848 [2011]

NET WORTH

:

MYR <618,391> [2011]

STAFF STRENGTH

:

15 [2012]

BANKER (S)

:

PUBLIC BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

POOR

MANAGEMENT CAPABILITY

:

WEAK

COMMERCIAL RISK

:

HIGH

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

SATISFACTORY

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) manufacture & wholesale of pharmacuetical & related product.

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. CHEW SOON KEONG +	41, JALAN SS 1/21, KAMPUNG TUNKU, 47300 PETALING JAYA, SELANGOR, MALAYSIA.	471203-07-5389 2205712	100,000.00	50.00
MS. CHEW LYE LENG +	41, JALAN SS 1/21, KAMOUNG TUNKU, 47300 PETALING JAYA, SELANGOR, MALAYSIA.	470115-07-5464 1851966	100,000.00	50.00
			---------------	------
			200,000.00	100.00
			============	=====

+ Also Director

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MS. CHEW WEI LIN
Address	:	41, JALAN SS 1/21, KAMPUNG TUNKU, 47300 PETALING JAYA, SELANGOR, MALAYSIA.
New IC No	:	811203-14-5736
Date of Birth	:	03/12/1981
Nationality	:	MALAYSIAN CHINESE
Date of Appointment	:	01/10/2010

DIRECTOR 2

Name Of Subject	:	MR. CHEW SOON KEONG
Address	:	41, JALAN SS 1/21, KAMPUNG TUNKU, 47300 PETALING JAYA, SELANGOR, MALAYSIA.
IC / PP No	:	2205712
New IC No	:	471203-07-5389
Date of Birth	:	03/12/1947
Nationality	:	MALAYSIAN CHINESE
Date of Appointment	:	21/06/2000

DIRECTOR 3

Name Of Subject	:	MS. CHEW LYE LENG
Address	:	41, JALAN SS 1/21, KAMOUNG TUNKU, 47300 PETALING JAYA, SELANGOR, MALAYSIA.
IC / PP No	:	1851966
New IC No	:	470115-07-5464
Date of Birth	:	15/01/1947
Nationality	:	MALAYSIAN CHINESE
Date of Appointment	:	21/06/2000

MANAGEMENT

1)	Name of Subject	:	CHEW SOON KEONG
	Position	:	CEO

2)	Name of Subject	:	LETCHUMY
	Position	:	ADMIN MANAGER

AUDITOR

Auditor	:	SAM & CO.
Auditor' Address	:	29-2,PLAZA SINAR,JLN 6/38D,TMN SRI SINAR, SEGAMBUT, WILAYAH PERSEKUTUAN, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MR. APPLASAMY S/O SUPPAROO
	IC / PP No	:	5927339
	New IC No	:	580628-02-5021
	Address	:	63, JALAN KANGSAR, TAMAN RAINBOW, OFF JALAN IPOH, 51200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

PUBLIC 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

:

17/06/2005

Description Of Charge

:

FACILITIES AGREEMENT, DEED ASSIGNMENT & POWER OF ATTORNEY

Amount Secured

:

RM72,000.00

Description Of Property Affected

:

UNIT LIGHT INDUSTRIAL LOT KNOWN AS UNIT P/B/2F/02 WITHIN STOREY 2 FLOOR OF BUILDING BLOCK B DEVELOPMENT KNOWN AS PJ INDUSTRIAL PARK

Name & Address Of Chargee

:

PUBLIC BANK BHD
WISMA LIM FOO YONG, 86, JALAN RAJA CHULAN, GROUND FLOOR, 50200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

Form 40 Dated 27/06/2005

Registered and Numbered 2 In The Register of Charges

ENCUMBRANCE 2

Date of Creation

:

09/11/2005

Description Of Charge

:

FACILITIES AGREEMENT, EXISTING DEED ASSIGNMENT & EXISITING POWER OF ATTORNEY

Amount Secured

:

N/A

Description Of Property Affected

:

UNIT LIGHT INDUSTRIAL LOT KNOWN AS UNIT P/B/2F/02 WITHIN STOREY 2 FLOOR OF BUILDING BLOCK B DEVELOPMENT KNOWN AS PJ INDUSTRIAL PARK

Name & Address Of Chargee

:

PUBLIC BANK BHD
WISMA LIM FOO YONG, 86, JALAN RAJA CHULAN, GROUND FLOOR, 50200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

Form 40 Dated 20/01/2006

Registered and Numbered 3 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

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	[	]
Fair 91-120 Days	[	]	Poor >120 Days	[	X	]

CLIENTELE

Local	:	YES	Percentage	:	100%
Domestic Markets	:	MALAYSIA
Overseas	:	NO	Percentage	:	0%
Credit Term	:	30 - 60 DAYS
Payment Mode	:	CHEQUES,TELEGRAPHIC TRANSFER (TT)

OPERATIONS

Products manufactured

:

JOJ/NATURAL/PRIMOSE/ROSE/ROSA T E OILS

Competitor(s)

:

ASIA PHARMACEUTICAL PRODUCTS SDN BHD
BIOSIS GROUP BHD
HCM-HYGENIC CORPORATION (MALAYSIA) SDN BHD
HEXTAR INDUSTRIAL CHEMICALS SDN BHD
HOVID BHD

Member(s) / Affiliate(s)

:

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

Ownership of premises

:

OWNED

Total Number of Employees:
YEAR	2012	2011	2010	2009
GROUP	N/A	N/A	N/A	N/A
COMPANY	15	15	15	10

Branch

:

NO

Other Information:

The SC is principally engaged in the (as a / as an) manufacture & wholesale of pharmacuetical & related product.

The SC's product concept is base on Natural Healing with Botanicals.

The SC undertakes research and development of its products base on all natural plant extracts / concentrates with known healing properties like Evening Primrose Oil / extracts, Natural Vitamin E, Rosehip Seed Oil / extracts, Grape Seed Oil / extracts, Jojoba Oil etc.

The SC's products are safe and suitable for even the most sensitive skin.

The SC's products do not contain any animal & artificial ingredients, harsh chemicals like SLS alcohol and others.

PROJECTS

No projects found in our databank

CURRENT INVESTIGATION

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client	:	0379547877
Current Telephone Number	:	03-79547877
Match	:	YES
Address Provided by Client	:	B2-02, PJ INDUSTRIAL PARK, JALAN KEMAJUAN,46200,PETALING JAYA,SELANGOR.
Current Address	:	B2-02, PJ INDUSTRIAL PARK, JALAN KEMAJUAN, 46200 PETALING JAYA, SELANGOR, MALAYSIA.
Match	:	YES
Latest Financial Accounts	:	YES

Other Investigations

We contacted one of the staff from the SC and she provided some information on the SC.

FINANCIAL ANALYSIS

Profitability
Turnover	:	Increased	[	2007 - 2011	]
Profit/(Loss) Before Tax	:	Increased	[	2007 - 2011	]
Return on Shareholder Funds	:	Unfavourable	[	<49.75%>	]
Return on Net Assets	:	Favourable	[	1,567.09%	]
The SC's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The higher profit could be attributed to the increase in turnover. The SC's unfavourable returns on shareholders' funds indicate the management's inefficiency in utilising its assets to generate returns.
Working Capital Control
Stock Ratio	:	Favourable	[	35 Days	]
Debtor Ratio	:	Favourable	[	44 Days	]
Creditors Ratio	:	Unfavourable	[	122 Days	]
The SC's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The favourable debtors' days could be due to the good credit control measures implemented by the SC. 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	:	Unfavourable	[	0.46 Times	]
Current Ratio	:	Unfavourable	[	0.78 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	:	Favourable	[	15.62 Times	]
Gearing Ratio	:	Unfavourable	[	<0.55 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's gearing was negative during the year as its shareholders' funds was in the red. This means the SC is running its business using borrowed money. We consider the SC as facing high financial risks.
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. With the favourable interest cover, the SC could be able to service all the accrued interest without facing any difficulties. The SC has high financial risks. If its shareholders do not inject more capital into the company or if its business performance does not improve, its going concern may be in question.
Overall financial condition of the SC : POOR

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
2423 : Manufacture of pharmaceuticals, medicinal chemicals and botanical products
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 2000, the SC is a Private Limited company, focusing on manufacture & wholesale of pharmacuetical & related product. 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. However, 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. The capital standing of the SC is weak. The SC may face difficulties to expand its business compared to other large corporation. Without a strong capital, the business expansion opportunities of the SC is limited.

Investigation revealed that the SC concentrates only on the local market. This narrow market segment has placed the SC at high business risk and limits its business expansion opportunities. Any adverse changes to the local economy might have a negative impact on the SC's business performance. Being a small company, the SC's business operation is supported by 15 employees. Overall, we regard that the SC's management capability is weak. Without capable management, the SC is unlikely to be successful and often contribute to unacceptable levels of accountability. Weak management can affect productivity, profitability, sales growth and ultimately can result in the failure of a business.

We noted that both the turnover and profits have increased compared to the previous year. However, the SC has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. 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. The SC has generated an unfavourable gearing ratio indicated that the SC is in high financial risk. The SC's unfavourable financial performance over the years has wiped out its shareholders' funds to a deficit of MYR 618,391. Therefore, the SC as a going concern is much dependent on its ability to generate sufficient cash flow and obtain additional financing to meet its future obligations.

Without a strong assets backing, the SC may face difficulties in getting loans for its future expansion and continued growth. 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 poor payment habit may affect the goodwill between the SC and its suppliers and the SC may inadvertently have to pay more for its future supplies.

The industry shows an upward trend and this trend is very likely to sustain in the near terms. However, the SC does not take any advantage from this favourable condition as it is making losses in this few years. The SC should adopt more competitive strategies to retain its business position in the market.

Based on the above unfavourable condition, we regard granting credit to the SC to be quite risky. Hence, credit is not recommended.

PROFIT AND LOSS ACCOUNT

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

MAXWELL PHARMA SDN. BHD.

Financial Year End	30/09/2011	30/09/2010	30/09/2009	30/09/2008	30/09/2007
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	FULL	FULL	FULL
Currency	MYR	MYR	MYR	MYR	MYR
TURNOVER	4,073,848	2,727,429	2,399,589	1,454,882	1,423,659
Other Income	85,658	86,274	-	-	-
	----------------	----------------	----------------	----------------	----------------
Total Turnover	4,159,506	2,813,703	2,399,589	1,454,882	1,423,659
Costs of Goods Sold	<2,079,841>	<1,363,485>	-	-	-
	----------------	----------------	----------------	----------------	----------------
Gross Profit	2,079,665	1,450,218	-	-	-
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	307,664	58,737	<344,934>	<274,172>	<193,731>
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	307,664	58,737	<344,934>	<274,172>	<193,731>
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	307,664	58,737	<344,934>	<274,172>	<193,731>
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	<1,126,055>	<1,184,792>	<839,858>	<565,686>	<371,955>
	----------------	----------------	----------------	----------------	----------------
As restated	<1,126,055>	<1,184,792>	<839,858>	<565,686>	<371,955>
	----------------	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	<818,391>	<1,126,055>	<1,184,792>	<839,858>	<565,686>
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	<818,391>	<1,126,055>	<1,184,792>	<839,858>	<565,686>
	=============	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Bank overdraft	9,438	8,701	10,458	11,154	15,365
Hire purchase	4,295	-	-	812	3,435
Term loan / Borrowing	5,662	6,084	7,111	9,825	8,126
Others	1,654	967	1,201	18,667	-
	----------------	----------------	----------------	----------------	----------------
	21,049	15,752	18,770	40,458	26,926

BALANCE SHEET

MAXWELL PHARMA SDN. BHD.

ASSETS EMPLOYED:
FIXED ASSETS	294,827	152,319	144,331	160,127	177,016
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	294,827	152,319	144,331	160,127	177,016
CURRENT ASSETS
Stocks	389,621	210,648	303,315	317,187	247,680
Trade debtors	486,737	263,243	221,260	347,994	74,298
Other debtors, deposits & prepayments	26,963	46,614	6,128	5,681	4,952
Cash & bank balances	27,456	33,297	19,534	8,182	698
Others	18,865	18,865	18,865	17,800	11,000
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	949,642	572,667	569,102	696,844	338,628
	----------------	----------------	----------------	----------------	----------------
TOTAL ASSET	1,244,469	724,986	713,433	856,971	515,644
	=============	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	696,711	409,132	332,168	445,877	238,266
Other creditors & accruals	65,674	151,298	39,954	18,664	56,781
Hire purchase & lease creditors	37,621	-	-	-	4,919
Bank overdraft	145,229	54,289	229,266	143,424	170,512
Short term borrowings/Term loans	15,352	15,829	13,874	11,627	10,811
Amounts owing to director	262,906	444,709	490,922	259,672	261,176
Other liabilities	-	-	-	10,000	20,140
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	1,223,493	1,075,257	1,106,184	889,264	762,605
	----------------	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	<273,851>	<502,590>	<537,082>	<192,420>	<423,977>
	----------------	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	20,976	<350,271>	<392,751>	<32,293>	<246,961>
	=============	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	200,000	200,000	200,000	200,000	200,000
	----------------	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	200,000	200,000	200,000	200,000	200,000
RESERVES
Retained profit/(loss) carried forward	<818,391>	<1,126,055>	<1,184,792>	<839,858>	<565,686>
	----------------	----------------	----------------	----------------	----------------
TOTAL RESERVES	<818,391>	<1,126,055>	<1,184,792>	<839,858>	<565,686>
	----------------	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	<618,391>	<926,055>	<984,792>	<639,858>	<365,686>
LONG TERM LIABILITIES
Long term loans	61,534	75,784	92,041	107,565	118,725
Hire purchase creditors	77,833	-	-	-	-
Others	500,000	500,000	500,000	500,000	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	639,367	575,784	592,041	607,565	118,725
	----------------	----------------	----------------	----------------	----------------
	20,976	<350,271>	<392,751>	<32,293>	<246,961>
	=============	=============	=============	=============	=============

FINANCIAL RATIO

MAXWELL PHARMA SDN. BHD.

TYPES OF FUNDS
Cash	27,456	33,297	19,534	8,182	698
Net Liquid Funds	<117,773>	<20,992>	<223,606>	<146,869>	<180,625>
Net Liquid Assets	<663,472>	<713,238>	<840,397>	<509,607>	<671,657>
Net Current Assets/(Liabilities)	<273,851>	<502,590>	<537,082>	<192,420>	<423,977>
Net Tangible Assets	20,976	<350,271>	<392,751>	<32,293>	<246,961>
Net Monetary Assets	<1,302,839>	<1,289,022>	<1,432,438>	<1,117,172>	<790,382>
BALANCE SHEET ITEMS
Total Borrowings	337,569	145,902	335,181	262,616	304,967
Total Liabilities	1,862,860	1,651,041	1,698,225	1,496,829	881,330
Total Assets	1,244,469	724,986	713,433	856,971	515,644
Net Assets	20,976	<350,271>	<392,751>	<32,293>	<246,961>
Net Assets Backing	<618,391>	<926,055>	<984,792>	<639,858>	<365,686>
Shareholders' Funds	<618,391>	<926,055>	<984,792>	<639,858>	<365,686>
Total Share Capital	200,000	200,000	200,000	200,000	200,000
Total Reserves	<818,391>	<1,126,055>	<1,184,792>	<839,858>	<565,686>
LIQUIDITY (Times)
Cash Ratio	0.02	0.03	0.02	0.01	0.00
Liquid Ratio	0.46	0.34	0.24	0.43	0.12
Current Ratio	0.78	0.53	0.51	0.78	0.44
WORKING CAPITAL CONTROL (Days)
Stock Ratio	35	28	46	80	64
Debtors Ratio	44	35	34	87	19
Creditors Ratio	122	110	51	112	61
SOLVENCY RATIOS (Times)
Gearing Ratio	<0.55>	<0.16>	<0.34>	<0.41>	<0.83>
Liabilities Ratio	<3.01>	<1.78>	<1.72>	<2.34>	<2.41>
Times Interest Earned Ratio	15.62	4.73	<17.38>	<5.78>	<6.19>
Assets Backing Ratio	0.10	<1.75>	<1.96>	<0.16>	<1.23>
PERFORMANCE RATIO (%)
Operating Profit Margin	7.55	2.15	<14.37>	<18.84>	<13.61>
Net Profit Margin	7.55	2.15	<14.37>	<18.84>	<13.61>
Return On Net Assets	1,567.09	<21.27>	83.05	723.73	67.54
Return On Capital Employed	161.27	<25.17>	218.01	<190.39>	274.72
Return On Shareholders' Funds/Equity	<49.75>	<6.34>	35.03	42.85	52.98
Dividend Pay Out Ratio (Times)	0.00	0.00	0.00	0.00	0.00
NOTES TO ACCOUNTS
Contingent Liabilities	0	0	0	0	0

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.53.81
UK Pound	1	Rs.86.52
Euro	1	Rs.69.50

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.