MIRA INFORM REPORT

Report Date :

16.07.2013

IDENTIFICATION DETAILS

Name :	ZABRO INDUSTRIES (M) SDN. BHD.
Registered Office :	372, Jalan Tuanku Abdul Rahman, 1st Floor, 50100 Kuala Lumpur, Wilayah Persekutuan
Country :	Malaysia
Financials (as on) :	31.12.2011
Date of Incorporation :	16.09.2005
Com. Reg. No.:	709989-D
Legal Form :	Private Limited (Limited By Share)
Line of Business :	Trader of textiles, ready made garments and others
No. of Employees :	05

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Small Company
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 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
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. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. 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 about 35% of government revenue in 2011. Bank Negera Malaysia (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.	:	709989-D
COMPANY NAME	:	ZABRO INDUSTRIES (M) SDN. BHD.
FORMER NAME	:	N/A
INCORPORATION DATE	:	16/09/2005
COMPANY STATUS	:	EXIST
LEGAL FORM	:	PRIVATE LIMITED (LIMITED BY SHARE)
LISTED STATUS	:	NO
REGISTERED ADDRESS	:	372, JALAN TUANKU ABDUL RAHMAN, 1ST FLOOR, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
BUSINESS ADDRESS	:	LOT 2.27, 2ND FLOOR, COMPLEX WILAYAH, 02, JALAN MUNSHI ABDULLAH, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
TEL.NO.	:	03-26924786
FAX.NO.	:	03-26979177
CONTACT PERSON	:	SYED ATIF ( DIRECTOR )
INDUSTRY CODE	:	47510
PRINCIPAL ACTIVITY	:	TRADING OF TEXTILES
AUTHORISED CAPITAL	:	MYR 5,000,000.00 DIVIDED INTO  ORDINARY SHARE 5,000,000.00 OF MYR 1.00 EACH.
ISSUED AND PAID UP CAPITAL	:	MYR 1,500,000.00 DIVIDED INTO  ORDINARY SHARES 1,500,000 CASH OF MYR 1.00 EACH.
SALES	:	MYR 2,618,894 [2011]
NET WORTH	:	MYR 1,039,182 [2011]
STAFF STRENGTH	:	5 [2013]
LITIGATION	:	CLEAR
DEFAULTER CHECK	:	CLEAR
FINANCIAL CONDITION	:	FAIR
PAYMENT	:	PROMPT
MANAGEMENT CAPABILITY	:	AVERAGE
COMMERCIAL RISK	:	MODERATE
CURRENCY EXPOSURE	:	N/A
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) trading of textiles.

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. ZALIZA BINTI SABU +	77A, LORONG MAHSURI, JALAN MAT UDDIN, KAMPUNG BAKONG, 02600 ARAU, PERLIS, MALAYSIA.	690806-09-5178	750,000.00	50.00
SYED ATIF RAZA ZAIDI SYED AMEER ABBAS ZAIDI +	B-4-1, BLOK B, PERMAI RIA CONDOMINIUM, JALAN 1/18B, TAMAN BATU PERMAI, 51200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.	KG414486	350,000.00	23.33
SYEH HAMMAD RAZA ZAIDI +	F-1-1, PERMAI RIA CONDOMINIUM, JALAN 1/18B, TAMAN BATU PERMAI, 51200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.	DB5978791	250,000.00	16.67
SYED SHAHID RAZA ZAIDI SYED AMEER ABBAS ZAIDI	B-4-2, PERMAI RIA CONDOMINIUM, JALAN 1/18B, TAMAN BATU PERMAI, BLOCK B, 51200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.	KA717283	150,000.00	10.00
			---------------	------
			1,500,000.00	100.00
			============	=====

+ Also Director

DIRECTORS

DIRECTOR 1

Name Of Subject	:	SYEH HAMMAD RAZA ZAIDI
Address	:	F-1-1, PERMAI RIA CONDOMINIUM, JALAN 1/18B, TAMAN BATU PERMAI, 51200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	DB5978791
Date of Appointment	:	11/03/2011

DIRECTOR 2

Name Of Subject	:	SYED ATIF RAZA ZAIDI SYED AMEER ABBAS ZAIDI
Address	:	B-4-1, BLOK B, PERMAI RIA CONDOMINIUM, JALAN 1/18B, TAMAN BATU PERMAI, 51200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	KG414486
Date of Appointment	:	16/09/2005

DIRECTOR 3

Name Of Subject	:	MS. ZALIZA BINTI SABU
Address	:	77A, LORONG MAHSURI, JALAN MAT UDDIN, KAMPUNG BAKONG, 02600 ARAU, PERLIS, MALAYSIA.
New IC No	:	690806-09-5178
Date of Birth	:	06/08/1969
Nationality	:	MALAYSIAN
Date of Appointment	:	30/01/2008

MANAGEMENT

1)	Name of Subject	:	SYED ATIF
	Position	:	DIRECTOR

AUDITOR

Auditor	:	KARTAR SINGH & CO.
Auditor' Address	:	11, LORONG MAAROF, BANGSAR, 59000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MS. NORHAYATI BINTI ADAM
	IC / PP No	:	A1339518
	New IC No	:	690301-08-5978
	Address	:	G 3A07, APARTMENT LESTARI, JALAN PJU 10/1B, DAMANSARA DAMAI, BLOCK G, 47830 PETALING JAYA, SELANGOR, MALAYSIA.

2)	Company Secretary	:	MS. FAZARINA BINTI AZMI
	IC / PP No	:	A0828931
	New IC No	:	671222-04-5050
	Address	:	1 JALAN 21/3, S.E.A. PARK, 46300 PETALING JAYA, SELANGOR, MALAYSIA.

BANKING

No Banker found in our databank. 

ENCUMBRANCE (S)

No encumbrance was found in our databank at the time of investigation. 

LEGAL CHECK AGAINST SC

* A check has been conducted in our databank against 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	:	N/A
Overseas	:	N/A

The SC refused to disclose its suppliers. 

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	[	X	]	Good 31-60 Days	[	]	Average 61-90 Days	[	]
Fair 91-120 Days	[		]	Poor >120 Days	[	]

CLIENTELE

Local	:	YES	Percentage	:	100%
Domestic Markets	:	MALAYSIA
Overseas	:	NO
Credit Term	:	N/A
Payment Mode	:	CASH

OPERATIONS

Goods Traded

:

TEXTILES

Total Number of Employees:
YEAR	2013
GROUP	N/A
COMPANY	5

Branch

:

NO

Other Information:

The SC is principally engaged in the (as a / as an) trading of textiles. 

The SC sells textiles, ready made garments 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	:	N/A
Current Telephone Number	:	03-26924786
Match	:	N/A
Address Provided by Client	:	LOT 1-11, 1ST FLOOR COMPLEX WILAYAH NO. 02, MALAYSIA
Current Address	:	LOT 2.27, 2ND FLOOR, COMPLEX WILAYAH, 02, JALAN MUNSHI ABDULLAH, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
Match	:	NO
Latest Financial Accounts	:	YES

Other Investigations

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

The address provided belongs to the SC's store but it is incomplete.

FINANCIAL ANALYSIS

Profitability
Turnover	:	Erratic	[	2007 - 2011	]
Profit/(Loss) Before Tax	:	Increased	[	2007 - 2011	]
Return on Shareholder Funds	:	Unfavourable	[	0.65%	]
Return on Net Assets	:	Unfavourable	[	0.96%	]
The fluctuating turnover reflects the fierce competition among the existing and new market players.The higher profit could be attributed to the increase in turnover. The unfavourable return on shareholders' funds could indicate that the SC was inefficient in utilising its assets to generate returns.
Working Capital Control
Stock Ratio	:	Favourable	[	34 Days	]
Debtor Ratio	:	Unfavourable	[	115 Days	]
Creditors Ratio	:	Favourable	[	10 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 debtors ratio was high. The SC should tighten its credit control and improve its collection period. The SC had a favourable creditors' ratio where the SC could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.
Liquidity
Liquid Ratio	:	Favourable	[	4.07 Times	]
Current Ratio	:	Favourable	[	5.09 Times	]
A minimum liquid ratio of 1 should be maintained by the SC in order to assure its creditors of its ability to meet short term obligations and the SC was in a good liquidity position. Thus, we believe the SC is able to meet all its short term obligations as and when they fall due.
Solvency
Interest Cover	:	Acceptable	[	6.60 Times	]
Gearing Ratio	:	Favourable	[	0.03 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 :
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 was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the SC should be able to repay its short term obligations. The SC 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:	2009	2010	2011	2012*	2013**
Population ( Million)	28.13	28.35	28.70	29.30	29.80
Gross Domestic Products ( % )	<0.5>	7.2	5.1	5.6	5.3
Domestic Demand ( % )	2.9	6.3	8.2	9.4	5.6
Private Expenditure ( % )	<2.7>	8.1	8.2	8.0	7.4
Consumption ( % )	0.7	6.7	7.1	1.0	5.7
Investment ( % )	<17.2>	17.7	12.2	11.7	13.3
Public Expenditure ( % )	5.2	3.8	8.4	13.3	1.2
Consumption ( % )	3.1	0.2	16.1	11.3	<1.2>
Investment ( % )	8.0	2.8	<0.3>	15.9	4.2
Balance of Trade ( MYR Million )	89,650	118,356	116,058	106,300	110,700
Government Finance ( MYR Million )	<28,450>	<40,482>	<45,511>	<42,297>	<39,993>
Government Finance to GDP / Fiscal Deficit ( % )	<4.8>	<5.6>	<5.4>	<4.5>	<4.0>
Inflation ( % Change in Composite CPI)	<5.2>	5.1	3.1	1.6	2.5
Unemployment Rate	4.5	3.9	3.3	3.2	3.0
Net International Reserves ( MYR Billion )	331	329	415	427	-
Average Risk-Weighted Capital Adequacy Ratio ( % )	2.87	2.20	3.50	2.20	-
Average 3 Months of Non-performing Loans ( % )	11.08	15.30	14.80	14.70	-
Average Base Lending Rate ( % )	5.53	6.30	6.60	6.53	-
Business Loans Disbursed( % )	10.5	14.7	15.3	32.2	-
Foreign Investment ( MYR Million )	22,156.8	22,517.9	23,546.1	26,230.4	-
Consumer Loans ( % )	-	-	-	-	-
Registration of New Companies ( No. )	41,578	44,148	45,455	45,441	-
Registration of New Companies ( % )	<0.1>	6.2	3.0	<0.0>	-
Liquidation of Companies ( No. )	39,075	25,585	132,476	-	-
Liquidation of Companies ( % )	39.6	<34.5>	417.8	-	-
Registration of New Business ( No. )	312,581	271,414	284,598	324,761	-
Registration of New Business ( % )	-	-	-	-	-
Business Dissolved ( No. )	19,345	19,738	20,121	-	-
Business Dissolved ( % )	2.4	2.0	1.9	-	-
Sales of New Passenger Cars (' 000 Unit )	486.3	543.6	535.1	552.2	-
Cellular Phone Subscribers ( Million )	30.1	32.8	35.3	38.5	-
Tourist Arrival ( Million Persons )	23.6	24.6	24.7	25.0	-
Hotel Occupancy Rate ( % )	58.0	63.0	60.6	62.4	-
Credit Cards Spending ( % )	12.8	14.1	15.6	12.6	-
Bad Cheque Offenders (No.)	36,667	33,568	32,627	26,982	-
Individual Bankruptcy ( No.)	16,228	18,119	19,167	19,575	-
Individual Bankruptcy ( % )	16.7	11.7	5.8	2.1	-
INDUSTRIES ( % of Growth ):	2009	2010	2011	2012*	2013**
Agriculture	0.4	2.1	5.9	0.6	2.4
Palm Oil	<1.1>	<3.4>	10.8	<2.8>	-
Rubber	<19.8>	9.9	6.1	<0.6>	-
Forestry & Logging	<5.9>	<3.3>	<7.6>	<2.2>	-
Fishing	5.5	5.6	2.1	<0.7>	-
Other Agriculture	9.0	7.9	7.1	6.4	-
Industry Non-Performing Loans ( MYR Million )	413.7	508.4	634.1	-	-
% of Industry Non-Performing Loans	1.3	2.1	3.2	-	-
Mining	<3.8>	0.2	<5.7>	1.5	2.7
Oil & Gas	2.1	0.5	<1.7>	-	-
Other Mining	-	-	-	-	-
Industry Non-performing Loans ( MYR Million )	44.2	49.7	46.5	-	-
% of Industry Non-performing Loans	0.1	0.1	0.1	-	-
Manufacturing #	<9.4>	11.4	4.7	4.2	4.9
Exported-oriented Industries	<19.0>	12.1	2.8	4.1	-
Electrical & Electronics	<30.3>	28.4	<4.9>	1.6	-
Rubber Products	<10.1>	25.3	15.4	3.6	-
Wood Products	<24.1>	20.1	<4.9>	4.6	-
Textiles & Apparel	<19.5>	<0.4>	14.8	<7.1>	-
Domestic-oriented Industries	<9.8>	16.3	6.5	8.6	-
Food, Beverages & Tobacco	0.2	3.0	4.2	-	-
Chemical & Chemical Products	<7.7>	16.2	5.5	9.9	-
Plastic Products	<9.1>	2.4	3.8	-	-
Iron & Steel	<32.7>	29.3	2.4	-	-
Fabricated Metal Products	<2.5>	14.9	25.2	-	-
Non-metallic Mineral	<15.5>	20.2	27.1	6.6	-
Transport Equipment	<13.5>	36.5	<10.4>	13.7	-
Paper & Paper Products	<5.0>	18.7	14.8	<7.8>	-
Crude Oil Refineries	0.2	<11.4>	9.3	-	-
Industry Non-Performing Loans ( MYR Million )	6,007.3	6,217.5	6,537.2	-	-
% of Industry Non-Performing Loans	18.3	23.8	25.7	-	-
Construction	5.8	5.1	4.4	15.5	11.2
Industry Non-Performing Loans ( MYR Million )	3,241.8	4,038.5	3,856.9	-	-
% of Industry Non-Performing Loans	9.9	10.7	10.2	-	-
Services	2.6	6.5	6.4	5.5	5.6
Electric, Gas & Water	0.4	8.5	5.6	4.8	-
Transport, Storage & Communication	1.6	7.7	6.5	7.3	-
Wholesale, Retail, Hotel & Restaurant	2.8	4.7	5.2	6.9	-
Finance, Insurance & Real Estate	3.8	6.1	6.3	6.5	-
Government Services	2.0	6.7	7.6	5.6	-
Other Services	4.4	4.2	5.4	5.7	-
Industry Non-Performing Loans ( MYR Million )	6,631.3	7,384.6	6,825.2	-	-
% of Industry Non-Performing Loans	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
47510 : Retail sale of textiles in specialized stores
INDUSTRY :	TRADING
According to the Retail Group Malaysia (RGM), the wholesale and retail trade sector forecast to grow to 6% in year 2013. During the first quarter of year 2013, RGM is estimating the retail industry to grow 6.9%. Many retailers have been enjoying better sales since the government handed out cash from mid-January of 2013 under the second round of Bantuan Rakyat 1Malaysia to more than 12 million Malaysians. Bookstores and related retail stores have also started enjoying rising sales since the RM250 1Malaysia Book Voucher was distributed to 1.3 million private and public university students. Besides, since early February 2013, handphone traders and retailers selling smartphone accessories have started to benefit from the RM200 rebate on smartphones for 1.5 million young adults aged between 21 and 30 years with a monthly income of not more than RM3,000.
The wholesale and retail trade sector grew 6.1% in the first half of the year 2012 driven by strong domestic consumption and the increasing number of large format stores operating in Malaysia, including 180 foreign hypermarkets, superstores and departmental stores as at end of August 2012. In addition, other indicators such as imports of consumption goods were higher by 15.2%.
In 2012, the wholesale and retail trade sector growth to 5.5% driven by higher consumption which benefited from Government initiatives under the 2012 Budget such as BR1M, Baucar Buku 1Malaysia (BB1M) and the RM100 assistance for all primary and secondary school students. The performance of the sector will also be supported by ongoing efforts to modernise the retail segment under the ETP. In 2012, 500 retail shops and 50 workshops are targeted to be modernised under the Retail Shop Transformation (TUKAR) and Automotive Workshop Modernisation (ATOM) programmes, respectively. As at end of July 2012, 95 workshops have been modernised, surpassing the yearly target, while 393 retail shops have been modernised.
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.
Over 60% of Gross Domestic Product (GDP) is contributed by domestic consumption, therefore the wholesale and retail sector plays a crucial role in driving Malaysia's growth over the next decade despite the ongoing global economic slowdown. By 2020, Malaysia's wholesale and retail sector is expected to boost the country's total Gross National Income (GNI) by RM156 billion, creating 454,190 new jobs.
OVERALL INDUSTRY OUTLOOK : Average Growth

CREDIT RISK EVALUATION & RECOMMENDATION

Incorporated in 2005, the SC is a Private Limited company, focusing on trading of textiles. Having been in business for 8 years, the SC has established a remarkable clientele base for itself which has contributed to its business growth. The capital standing of the SC is fair. With an adequate share capital, the SC has the potential of expanding its business in future. 

At present, the local market remains the SC's biggest market. It depends solely on the sales in the domestic market to achieve its profitability. With the only concentration in the local market, the SC is vulnerable to the changes in the local events. We noted that the demand for the SC's products is on the rise due to the continuing growth of its sales volume and profitability. Hence, the SC's business potential remains favourable. Being a small company, the SC's business operation is supported by 5 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. The SC has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. Fortunately, the SC is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. Being a lowly geared company, the SC is exposed to low financial risk as it is mainly dependent on its internal funds to finance its business needs. Given a positive net worth standing at MYR 1,039,182, the SC should be able to maintain its business in the near terms. 

We regard that the SC's overall payment habit is prompt. The SC had a favourable creditors' ratio as evidenced by its favourable collection days. 

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

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

PROFIT AND LOSS ACCOUNT

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

ZABRO INDUSTRIES (M) SDN. BHD.

Financial Year End	31/12/2011	31/12/2010	31/12/2009	31/12/2008	31/12/2007
Months	12	12	12	12	12
Consolidated Account	Company	Company	Company	Company	Company
Audited Account	YES	YES	YES	YES	YES
Unqualified Auditor's Report (Clean Opinion)	YES	YES	YES	YES	YES
Financial Type	FULL	FULL	SUMMARY	SUMMARY	SUMMARY
Currency	MYR	MYR	MYR	MYR	MYR
TURNOVER	2,618,894	2,416,340	3,759,487	3,192,706	2,971,075
	----------------	----------------	----------------	----------------	----------------
Total Turnover	2,618,894	2,416,340	3,759,487	3,192,706	2,971,075
Costs of Goods Sold	<2,225,266>	<1,996,016>	-	-	-
	----------------	----------------	----------------	----------------	----------------
Gross Profit	393,628	420,324	-	-	-
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	8,631	6,224	7,095	4,412	14,952
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	8,631	6,224	7,095	4,412	14,952
Taxation	<1,846>	<1,257>	<1,433>	<1,240>	<1,009>
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	6,785	4,967	5,662	3,172	13,943
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	32,397	27,430	21,768	18,596	4,653
	----------------	----------------	----------------	----------------	----------------
As restated	32,397	27,430	21,768	18,596	4,653
	----------------	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	39,182	32,397	27,430	21,768	18,596
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	39,182	32,397	27,430	21,768	18,596
	=============	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Others	1,540	1,540	-	-	-
	----------------	----------------
	1,540	1,540

BALANCE SHEET

ZABRO INDUSTRIES (M) SDN. BHD.

ASSETS EMPLOYED:
FIXED ASSETS	76,097	92,117	108,137	71,070	81,611
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	76,097	92,117	108,137	71,070	81,611
CURRENT ASSETS
Stocks	244,360	295,874	-	-	-
Trade debtors	823,547	624,886	-	-	-
Other debtors, deposits & prepayments	66,780	188,390	-	-	-
Cash & bank balances	87,990	133,565	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	1,222,677	1,242,715	1,281,069	944,743	639,415
	----------------	----------------	----------------	----------------	----------------
TOTAL ASSET	1,298,774	1,334,832	1,389,206	1,015,813	721,026
	=============	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	62,580	85,176	-	-	-
Other creditors & accruals	33,250	48,690	-	-	-
Hire purchase & lease creditors	7,836	7,836	-	-	-
Amounts owing to director	134,705	134,705	-	-	-
Provision for taxation	1,846	357	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	240,217	276,764	329,809	494,045	202,430
	----------------	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	982,460	965,951	951,260	450,698	436,985
	----------------	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	1,058,557	1,058,068	1,059,397	521,768	518,596
	=============	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	1,000,000	1,000,000	1,000,000	500,000	500,000
	----------------	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	1,000,000	1,000,000	1,000,000	500,000	500,000
RESERVES
Retained profit/(loss) carried forward	39,182	32,397	27,430	21,768	18,596
	----------------	----------------	----------------	----------------	----------------
TOTAL RESERVES	39,182	32,397	27,430	21,768	18,596
	----------------	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	1,039,182	1,032,397	1,027,430	521,768	518,596
LONG TERM LIABILITIES
Hire purchase creditors	19,375	25,671	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	19,375	25,671	31,967	-	-
	----------------	----------------	----------------	----------------	----------------
	1,058,557	1,058,068	1,059,397	521,768	518,596
	=============	=============	=============	=============	=============

FINANCIAL RATIO

ZABRO INDUSTRIES (M) SDN. BHD.

TYPES OF FUNDS
Cash	87,990	133,565	-	-	-
Net Liquid Funds	87,990	133,565	-	-	-
Net Liquid Assets	738,100	670,077	951,260	450,698	436,985
Net Current Assets/(Liabilities)	982,460	965,951	951,260	450,698	436,985
Net Tangible Assets	1,058,557	1,058,068	1,059,397	521,768	518,596
Net Monetary Assets	718,725	644,406	919,293	450,698	436,985
BALANCE SHEET ITEMS
Total Borrowings	27,211	33,507	-	-	-
Total Liabilities	259,592	302,435	361,776	494,045	202,430
Total Assets	1,298,774	1,334,832	1,389,206	1,015,813	721,026
Net Assets	1,058,557	1,058,068	1,059,397	521,768	518,596
Net Assets Backing	1,039,182	1,032,397	1,027,430	521,768	518,596
Shareholders' Funds	1,039,182	1,032,397	1,027,430	521,768	518,596
Total Share Capital	1,000,000	1,000,000	1,000,000	500,000	500,000
Total Reserves	39,182	32,397	27,430	21,768	18,596
LIQUIDITY (Times)
Cash Ratio	0.37	0.48	-	-	-
Liquid Ratio	4.07	3.42	-	-	-
Current Ratio	5.09	4.49	3.88	1.91	3.16
WORKING CAPITAL CONTROL (Days)
Stock Ratio	34	45	-	-	-
Debtors Ratio	115	94	-	-	-
Creditors Ratio	10	16	-	-	-
SOLVENCY RATIOS (Times)
Gearing Ratio	0.03	0.03	-	-	-
Liabilities Ratio	0.25	0.29	0.35	0.95	0.39
Times Interest Earned Ratio	6.60	5.04	-	-	-
Assets Backing Ratio	1.06	1.06	1.06	1.04	1.04
PERFORMANCE RATIO (%)
Operating Profit Margin	0.33	0.26	0.19	0.14	0.50
Net Profit Margin	0.26	0.21	0.15	0.10	0.47
Return On Net Assets	0.96	0.73	0.67	0.85	2.88
Return On Capital Employed	0.95	0.73	0.67	0.85	2.88
Return On Shareholders' Funds/Equity	0.65	0.48	0.55	0.61	2.69
Dividend Pay Out Ratio (Times)	0.00	0.00	-	-	-
NOTES TO ACCOUNTS
Contingent Liabilities	0	0

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.05
UK Pound	1	Rs.90.71
Euro	1	Rs.78.47

INFORMATION DETAILS

Report Prepared by :

MNL

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.