MIRA INFORM REPORT

Report Date :

18.03.2013

IDENTIFICATION DETAILS

Name :	GANO EXCEL INDUSTRIES SDN. BHD.
Registered Office :	10, Kompleks Perniagaan Taman Bistari, Lebuhraya Sultan Abdul Halim, Tingkat Satu, 05400 Alor Setar, Kedah
Country :	Malaysia
Financials (as on) :	30.06.2011
Date of Incorporation :	01.03.2001
Com. Reg. No.:	540854-H
Legal Form :	Private Limited (Limited By Share)
Line of Business :	Manufacturing of Food Supplement, Beverages
No. of Employees :	200

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Good
Payment Behaviour :	No Complaints
Litigation :	Clear

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – 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.	:	540854-H
COMPANY NAME	:	GANO EXCEL INDUSTRIES SDN. BHD.
FORMER NAME	:	N/A
INCORPORATION DATE	:	01/03/2001
COMPANY STATUS	:	EXIST
LEGAL FORM	:	PRIVATE LIMITED (LIMITED BY SHARE)
LISTED STATUS	:	NO
REGISTERED ADDRESS	:	10, KOMPLEKS PERNIAGAAN TAMAN BISTARI, LEBUHRAYA SULTAN ABDUL HALIM, TINGKAT SATU, 05400 ALOR SETAR, KEDAH, MALAYSIA.
BUSINESS ADDRESS	:	LOT 2774, LEBUHRAYA BUKIT KAYU HITAM, PEKAN ASUN, 06000 JITRA, KEDAH, MALAYSIA.
TEL.NO.	:	04-9172888
FAX.NO.	:	04-9162988
EMAIL	:	INFO@GANOEXCEL.COM
WEB SITE	:	WWW.GANOEXCEL.COM
CONTACT PERSON	:	LEW SOON KIAK ( CEO )
INDUSTRY CODE	:	10
PRINCIPAL ACTIVITY	:	MANUFACTURING OF FOOD SUPPLEMENT, BEVERAGES
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 49,703,272 [2011]
NET WORTH	:	MYR 24,986,346 [2011]
STAFF STRENGTH	:	200 [2013]
BANKER (S)	:	HONG LEONG BANK BHD
LITIGATION	:	CLEAR
DEFAULTER CHECK	:	CLEAR
FINANCIAL CONDITION	:	STABLE
PAYMENT	:	GOOD
MANAGEMENT CAPABILITY	:	AVERAGE
COMMERCIAL RISK	:	LOW
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) manufacturing of food supplement, beverages.

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. LEOW SOON SENG +	111, TAMAN BERJAYA, JALAN PEGAWAI, 05050 ALOR SETAR, KEDAH, MALAYSIA.	631003-02-5125 7162666	600,000.00	40.00
MR. LEW SOON KIAK +	111, TAMAN BERJAYA, JALAN PEGAWAI, 05050 ALOR SETAR, KEDAH, MALAYSIA.	440617-02-5347 3923633	150,000.00	10.00
MR. OOI KHENG SENG +	40, JALAN LANGGAR, 05460 ALOR SETAR, KEDAH, MALAYSIA.	450726-02-5097 2229186	150,000.00	10.00
MR. LEOW AH BAH +	122 LORONG ANGGERIK 1/8, TAMAN PELANGI, 05050 ALOR SETAR, KEDAH, MALAYSIA.	490502-02-5561 1901803	135,000.00	9.00
MS. LIAU LEW EI	111 TAMAN BERJAYA, JALAN PEGAWAI, 05050 ALOR SETAR, KEDAH, MALAYSIA.	460513-02-5324 1903329	120,000.00	8.00
MS. LEOW THEW SWEEM	111 TAMAN BERJAYA, JALAN PEGAWAI, 05050 ALOR SETAR, KEDAH, MALAYSIA.	520815-02-5524 4302214	105,000.00	7.00
MS. LEOW LEW KEOK	52, TAMAN SRI ABADI 2/5, LORONG KEMBOJA, JALAN KUALA KEDAH, 06600 KUALA KEDAH, KEDAH, MALAYSIA.	581128-02-5150 5555397	105,000.00	7.00
MR. TEOH SIN YIT +	80 JALAN ANGGERIK 3A, TAMAN ANGGERIK, 05050 ALOR SETAR, KEDAH, MALAYSIA.	560325-07-5795 4961854	75,000.00	5.00
MS. LEOW THEW SEE	111 TAMAN BERJAYA, JALAN PEGAWAI, 05050 ALOR SETAR, KEDAH, MALAYSIA.	601225-02-5908 6111408	60,000.00	4.00
			---------------	------
			1,500,000.00	100.00
			============	=====

+ Also Director

The SC interest in other companies (Subsidiaries/Associates) are shown as follow :

Local No	Country	Company	(%)	As At
BN011005	BRUNEI DARUSSALAM	PRIMACAP ASIA LTD	100	30/06/2011

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MR. TEOH SIN YIT
Address	:	80 JALAN ANGGERIK 3A, TAMAN ANGGERIK, 05050 ALOR SETAR, KEDAH, MALAYSIA.
IC / PP No	:	4961854
New IC No	:	560325-07-5795
Date of Birth	:	25/03/1956
Nationality	:	MALAYSIAN
Date of Appointment	:	21/02/2010

DIRECTOR 2

Name Of Subject	:	MR. LEOW AH BAH
Address	:	122 LORONG ANGGERIK 1/8, TAMAN PELANGI, 05050 ALOR SETAR, KEDAH, MALAYSIA.
IC / PP No	:	1901803
New IC No	:	490502-02-5561
Date of Birth	:	02/05/1949
Nationality	:	MALAYSIAN
Date of Appointment	:	21/02/2010

DIRECTOR 3

Name Of Subject	:	MR. LEW SOON KIAK
Address	:	111, TAMAN BERJAYA, JALAN PEGAWAI, 05050 ALOR SETAR, KEDAH, MALAYSIA.
IC / PP No	:	3923633
New IC No	:	440617-02-5347
Date of Birth	:	17/06/1944
Nationality	:	MALAYSIAN
Date of Appointment	:	08/03/2001

DIRECTOR 4

Name Of Subject	:	MR. OOI KHENG SENG
Address	:	40, JALAN LANGGAR, 05460 ALOR SETAR, KEDAH, MALAYSIA.
IC / PP No	:	2229186
New IC No	:	450726-02-5097
Date of Birth	:	26/07/1945
Nationality	:	MALAYSIAN
Date of Appointment	:	08/03/2001

DIRECTOR 5

Name Of Subject	:	MR. LEOW SOON SENG
Address	:	111, TAMAN BERJAYA, JALAN PEGAWAI, 05050 ALOR SETAR, KEDAH, MALAYSIA.
IC / PP No	:	7162666
New IC No	:	631003-02-5125
Date of Birth	:	03/10/1963
Nationality	:	MALAYSIAN
Date of Appointment	:	08/03/2001

MANAGEMENT

1)	Name of Subject	:	LEW SOON KIAK
	Position	:	CEO

2)	Name of Subject	:	LEOW SOON SENG
	Position	:	PRESIDENT

AUDITOR

Auditor	:	S.T.OOI & ASSOCIATES.
Auditor' Address	:	1018, LORONG MERPATI, FIRST FLOOR, 05200 ALOR SETAR, KEDAH, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MS. OOI PHO LIN
	IC / PP No	:	4219148
	New IC No	:	520201-02-5060
	Address	:	D-92 TAMAN SETIA FASA 1D, JALAN KILANG TEBU, 05050 ALOR SETAR, KEDAH, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

HONG LEONG BANK BHD

The SC enjoys normal banking routine with above mentioned banker(s). No adverse record was found during our investigation.

ENCUMBRANCE (S)

ENCUMBRANCE 1

Date of Creation

:

12/12/2011

Description Of Charge

:

N/A

Amount Secured

:

N/A

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

UNITED OVERSEAS BANK (MALAYSIA) BHD.

Form 40 Dated 21/12/2011

Registered and Numbered 8 In The Register of Charges

ENCUMBRANCE 2

Date of Creation

:

04/01/2006

Description Of Charge

:

N/A

Amount Secured

:

N/A

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

OCBC BANK (MALAYSIA) BERHAD

Form 40 Dated 23/01/2006

Registered and Numbered 6 In The Register of Charges

ENCUMBRANCE 3

Date of Creation

:

25/01/2006

Description Of Charge

:

OPEN CHARGE

Amount Secured

:

N/A

Description Of Property Affected

:

N/A

Name & Address Of Chargee

:

OCBC BANK (MALAYSIA) BERHAD

Form 40 Dated

Registered and Numbered 7 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	[	X	]	Average 61-90 Days	[	]
Fair 91-120 Days	[	]	Poor >120 Days	[		]

CLIENTELE

Local	:	YES
Domestic Markets	:	MALAYSIA
Overseas	:	YES
Export Market	:	WORLDWIDE
Credit Term	:	30 - 60 DAYS
Payment Mode	:	CHEQUES TELEGRAPHIC TRANSFER (TT)

OPERATIONS

Products manufactured	:	FOOD SUPPLEMENT, BEVERAGES
Member(s) / Affiliate(s)	:	FEDERATION OF MALAYSIAN MANUFACTURERS (FMM) CHEMICAL INDUSTRIES COUNCIL OF MALAYSIA (CICM)

Total Number of Employees:
YEAR	2013	2011	2010	2008
GROUP	N/A	N/A	N/A	N/A
COMPANY	200	100	100	100

Branch

:

NO

Other Information:

The SC is principally engaged in the (as a / as an) manufacturing of food supplement, beverages.

The SC is a fast growing manufacturing company & is the premier wellness industry dedicated and committed to Ganoderma nutritional immunology.

The SC constantly develops the best health products, rejects any shortcomings, re-test, re-think and continuously research till the formulation becomes perfect as well as maintains products quality & safety.

PROJECTS

No projects found in our databank

CURRENT INVESTIGATION

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client	:	049172888
Current Telephone Number	:	04-9172888
Match	:	YES
Address Provided by Client	:	LOT 2774, LEBUHRAYA BUKIT KAYU HITAM, PEKAN ASUN,06000,JITRA,KEDAH.
Current Address	:	LOT 2774, LEBUHRAYA BUKIT KAYU HITAM, PEKAN ASUN, 06000 JITRA, KEDAH, MALAYSIA.
Match	:	YES
Latest Financial Accounts	:	YES

Other Investigations

On 15th March 2013 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	:	Decreased	[	2007 - 2011	]
Return on Shareholder Funds	:	Acceptable	[	16.08%	]
Return on Net Assets	:	Acceptable	[	21.11%	]
The SC's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The dip in profit could be due to the stiff market competition which reduced the SC's profit margin. The SC's management had generated acceptable return for its shareholders using its assets.
Working Capital Control
Stock Ratio	:	Favourable	[	26 Days	]
Debtor Ratio	:	Acceptable	[	59 Days	]
Creditors Ratio	:	Unfavourable	[	70 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 unfavourable creditors' ratio could be due to the SC taking advantage of the credit granted by its suppliers. However this may affect the goodwill between the SC and its suppliers and the SC may inadvertently have to pay more for its future supplies.
Liquidity
Liquid Ratio	:	Favourable	[	1.22 Times	]
Current Ratio	:	Unfavourable	[	1.42 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	:	Favourable	[	52.58 Times	]
Gearing Ratio	:	Favourable	[	0.24 Times	]
The interest cover showed that the SC was able to service the interest. The favourable interest cover could indicate that the SC was making enough profit to pay for the interest accrued. The SC was lowly geared thus it had a low financial risk. The SC was mainly financed by its shareholders' funds and internally generated funds. In times of economic slowdown / downturn, the SC being a lowly geared company, will be able to compete better than those companies which are highly geared in the same industry.
Overall Assessment :
Although the SC's turnover had increased, its profits had declined over the same corresponding period. This could be due to the stiffer market competition and / or higher operating costs which lowered the SC's profit margin. 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. With the favourable interest cover, the SC could be able to service all the accrued interest without facing any difficulties. The SC as a lowly geared company, will be more secured compared to those highly geared companies. It has the ability to meet all its long term obligations.
Overall financial condition of the SC : STABLE

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

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

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

INDUSTRY ANALYSIS

MSIC CODE
10 : MANUFACTURE OF FOOD PRODUCTS
INDUSTRY :	MANUFACTURING
The manufacturing sector is expected to be driven by higher value-added activities in Malaysia.The GDP growth for first quarter 2012 indicating manufacturing maintain its growth of 4.5%, similar to year 2011.Malaysia recorded a 12% jump in approved investments in the manufacturing sector in the first quarter of 2012 compared with the corresponding period 2011. According to Federation of Malaysian Manufacturers (FMM), manufacturing sector expected to improve in the third quarter 2012 despite concerns over external developments and the rising cost of production.
The rubber products sub-sector is expected to remain resilient supported by continuous improvements in medical and healthcare standards in emerging markets as well as demand from niche markets such as the oil and gas sector for rubber hoses. Malaysia rubber exports are forecast to grow at 10%, at the end of 2012 driven by global demand for medical gloves as well as rubber tyres and tubes.Rubber glove exports make up 70 % of total rubber shipments in Malaysia due to hospitals and clinics place more intrest on rising health and hygiene awareness.
The Malaysia government has growth target of 6.5% for wood based furniture where estimated to reach up to RM53 billion by year 2020.The government providing pioneer status for tax exemption and investment tax allowance for this industry as a boost up step towards produce good quality product and to meet the world demand.
Chemical production are expected to show 6.2% in year 2012 and 7.5 % in year 2013 inline with Malaysia as one of the largest contributor in world Chemicals & Chemical industries.
According to Malaysian Iron and Steel Industry Federation, first half of 2012 would remain weak for the local steel industry due to eurozone crisis, slowdown in China's economy and less robust construction activities in the developed countries. At first quarter 2012, the average local steel price is trading atRM2,300 per tonne compared with the average international price of US$740 (RM2,331) per tonne.
According to the Department of Statistics, Malaysia during the first quarter 2012, the manufacturing output increased due to activities in major sub-sectors such as petroleum, chemical, rubber and plastic products (10.5 %), and non-metallic mineral products, basic metal and fabricated metal products (3.9 %). Meanwhile, it's also announced that the manufacturing sector's sales grew by 10 % in May 2012 to record RM52.5 billion compared with RM47.7 billion in May 2011. The Industrial Production Index (IPI ) increased 7.6 % in May (2012) due to increases in manufacturing (6.5 %).
Tax and non-tax incentives provided by goverment encourage manufacturers to move up the value chain of manufacturing industry. The new growth initiatives by goverment in the manufacturing sector such as solar and medial services can be important drivers of growth apart from helping to diversify the manufacturing base and contributing to the resilience of the sector.
OVERALL INDUSTRY OUTLOOK : Average Growth

CREDIT RISK EVALUATION & RECOMMENDATION

Incorporated in 2001, the SC is a Private Limited company, focusing on manufacturing of food supplement, beverages. With its long establishment in the market, the SC has received strong support from its stable customers base. Its business position in the market is quite stable and it is expected to enjoy better market shares over its rivals. Presently, issued and paid up capital of the SC stand at MYR 1,500,000.

Over the years, the SC has penetrated into both the local and overseas market. The SC has positioned itself in the global market and is competing in the industry. Its stable clientele base will enable the SC to further enhance its business in the near term. The SC is a fairly large and rapidly growing company with over 200 staff in its operations 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.

Financially, the SC registered a higher turnover compared to previous year. However, its profits showed a reverse trend. The lower profit achieved was a result of higher operating cost and increased competition. Return on shareholders' funds of the SC was at an acceptable range which indicated that the management was efficient in utilising its funds to generate income. The SC is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. Being a lowly geared company, the SC is exposed to low financial risk as it is mainly dependent on its internal funds to finance its business needs. Given a positive net worth standing at MYR 24,986,346, the SC should be able to maintain its business in the near terms.

Having a strong assets backing, the SC possesses latent assets as collateral for further financial extension. Hence, it has good chance of getting loans if the needs arises. The SC's supplier are from both the local and overseas countries. This will eliminates the risk of dependency on deliveries from a number of key suppliers and insufficient quantities of its raw materials. Overall the SC has a good control over its resources.

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

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

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

PROFIT AND LOSS ACCOUNT

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

GANO EXCEL INDUSTRIES SDN. BHD.

Financial Year End	30/06/2011	30/06/2010	30/06/2009	30/06/2008	30/06/2007
Months	12	12	12	12	12
Consolidated Account	GROUP	GROUP	GROUP	GROUP	GROUP
Audited Account	YES	YES	YES	YES	YES
Unqualified Auditor's Report (Clean Opinion)	YES	YES	YES	YES	YES
Financial Type	FULL	FULL	FULL	FULL	SUMMARY
Currency	MYR	MYR	MYR	MYR	MYR
TURNOVER	49,703,272	44,062,720	41,065,924	25,948,714	22,864,216
Other Income	73,582	104,746	-	-	-
	----------------	----------------	----------------	----------------	----------------
Total Turnover	49,776,854	44,167,466	41,065,924	25,948,714	22,864,216
Costs of Goods Sold	<36,642,143>	<32,067,720>	-	-	-
	----------------	----------------	----------------	----------------	----------------
Gross Profit	13,134,711	12,099,746	-	-	-
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	6,371,256	6,762,567	6,004,434	1,953,413	973,105
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	6,371,256	6,762,567	6,004,434	1,953,413	973,105
Taxation	<1,465,987>	<986,496>	<900,912>	<506,887>	<467,527>
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	4,017,637	5,776,071	5,103,522	1,446,526	505,578
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE EXTRAORDINARY ITEMS	4,017,637	5,776,071	5,103,522	1,446,526	505,578
Extraordinary items	887,632	-	-	-	-
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) ATTRIBUTABLE TO SHAREHOLDERS	4,905,269	5,776,071	5,103,522	1,446,526	505,578
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	18,914,739	13,138,668	8,203,896	6,757,370	6,251,792
	----------------	----------------	----------------	----------------	----------------
As restated	18,914,739	13,138,668	8,203,896	6,757,370	6,251,792
	----------------	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	23,820,008	18,914,739	13,307,418	8,203,896	6,757,370
DIVIDENDS - Ordinary (paid & proposed)	-	-	<168,750>	-	-
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	23,820,008	18,914,739	13,138,668	8,203,896	6,757,370
	=============	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Bank overdraft	-	-	141,989	194,431	-
Hire purchase	-	-	4,240	10,101	-
Term loan / Borrowing	-	-	245,564	118,422	-
Others	123,529	162,168	-	-	-
	----------------	----------------	----------------	----------------	----------------
	123,529	162,168	391,793	322,954	-
	=============	=============	=============	=============

BALANCE SHEET

GANO EXCEL INDUSTRIES SDN. BHD.

ASSETS EMPLOYED:
FIXED ASSETS	23,332,162	24,331,589	23,503,806	23,423,540	21,011,810
LONG TERM INVESTMENTS/OTHER ASSETS
TOTAL LONG TERM INVESTMENTS/OTHER ASSETS	-	-	-	-	4
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	23,332,162	24,331,589	23,503,806	23,423,540	21,011,814
CURRENT ASSETS
Stocks	3,491,376	3,159,202	4,039,268	4,778,239	-
Trade debtors	8,045,135	5,782,562	8,522,305	5,355,192	-
Other debtors, deposits & prepayments	522,651	636,299	1,124,340	1,188,513	-
Short term deposits	91,024	88,934	86,801	84,804	-
Amount due from director	1,380,176	1,463,296	381,383	430,320	-
Cash & bank balances	11,482,759	5,031,582	1,343,108	805,587	-
Others	-	12,336	76,337	541,636	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	25,013,121	16,174,211	15,573,542	13,184,291	7,122,199
	----------------	----------------	----------------	----------------	----------------
TOTAL ASSET	48,345,283	40,505,800	39,077,348	36,607,831	28,134,013
	=============	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	7,042,398	5,533,135	8,831,701	8,840,697	-
Other creditors & accruals	7,428,452	3,850,300	3,183,270	3,936,776	-
Hire purchase & lease creditors	202,113	189,729	107,078	103,232	-
Bank overdraft	-	-	520,497	3,808,232	-
Short term borrowings/Term loans	660,422	716,390	801,462	807,957	-
Amounts owing to director	2,035,377	3,335,377	4,041,615	1,822,180	-
Other liabilities	215,038	-	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	17,583,800	13,624,931	17,485,623	19,319,074	12,815,173
	----------------	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	7,429,321	2,549,280	<1,912,081>	<6,134,783>	<5,692,974>
	----------------	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	30,761,483	26,880,869	21,591,725	17,288,757	15,318,840
	=============	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	1,500,000	1,500,000	1,500,000	1,500,000	1,500,000
	----------------	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	1,500,000	1,500,000	1,500,000	1,500,000	1,500,000
RESERVES
Share premium	-	-	-	-	3,325
Exchange equalisation/fluctuation reserve	<333,662>	<103,643>	-	-	-
Retained profit/(loss) carried forward	23,820,008	18,914,739	13,138,668	8,203,896	6,757,370
Others	-	-	80,430	<10,454>	-
	----------------	----------------	----------------	----------------	----------------
TOTAL RESERVES	23,486,346	18,811,096	13,219,098	8,193,442	6,760,695
	----------------	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	24,986,346	20,311,096	14,719,098	9,693,442	8,260,695
LONG TERM LIABILITIES
Long term loans	4,857,518	5,486,471	6,162,905	7,169,532	-
Hire purchase creditors	205,950	408,063	178,404	35,482	-
Deferred taxation	711,669	675,239	531,318	390,301	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	5,775,137	6,569,773	6,872,627	7,595,315	7,058,145
	----------------	----------------	----------------	----------------	----------------
	30,761,483	26,880,869	21,591,725	17,288,757	15,318,840
	=============	=============	=============	=============	=============

FINANCIAL RATIO

GANO EXCEL INDUSTRIES SDN. BHD.

TYPES OF FUNDS
Cash	11,573,783	5,120,516	1,429,909	890,391	-
Net Liquid Funds	11,573,783	5,120,516	909,412	<2,917,841>	-
Net Liquid Assets	3,937,945	<609,922>	<5,951,349>	<10,913,022>	<5,692,974>
Net Current Assets/(Liabilities)	7,429,321	2,549,280	<1,912,081>	<6,134,783>	<5,692,974>
Net Tangible Assets	30,761,483	26,880,869	21,591,725	17,288,757	15,318,840
Net Monetary Assets	<1,837,192>	<7,179,695>	<12,823,976>	<18,508,337>	<12,751,119>
BALANCE SHEET ITEMS
Total Borrowings	5,926,003	6,800,653	7,770,346	11,924,435	-
Total Liabilities	23,358,937	20,194,704	24,358,250	26,914,389	19,873,318
Total Assets	48,345,283	40,505,800	39,077,348	36,607,831	28,134,013
Net Assets	30,761,483	26,880,869	21,591,725	17,288,757	15,318,840
Net Assets Backing	24,986,346	20,311,096	14,719,098	9,693,442	8,260,695
Shareholders' Funds	24,986,346	20,311,096	14,719,098	9,693,442	8,260,695
Total Share Capital	1,500,000	1,500,000	1,500,000	1,500,000	1,500,000
Total Reserves	23,486,346	18,811,096	13,219,098	8,193,442	6,760,695
LIQUIDITY (Times)
Cash Ratio	0.66	0.38	0.08	0.05	-
Liquid Ratio	1.22	0.96	0.66	0.44	-
Current Ratio	1.42	1.19	0.89	0.68	0.56
WORKING CAPITAL CONTROL (Days)
Stock Ratio	26	26	36	67	-
Debtors Ratio	59	48	76	75	-
Creditors Ratio	70	63	78	124	-
SOLVENCY RATIOS (Times)
Gearing Ratio	0.24	0.33	0.53	1.23	-
Liabilities Ratio	0.93	0.99	1.65	2.78	2.41
Times Interest Earned Ratio	52.58	42.70	16.33	7.05	-
Assets Backing Ratio	20.51	17.92	14.39	11.53	10.21
PERFORMANCE RATIO (%)
Operating Profit Margin	12.82	15.35	14.62	7.53	4.26
Net Profit Margin	8.08	13.11	12.43	5.57	2.21
Return On Net Assets	21.11	25.76	29.62	13.17	6.35
Return On Capital Employed	20.98	25.58	28.79	10.74	6.35
Return On Shareholders' Funds/Equity	16.08	28.44	34.67	14.92	6.12
Dividend Pay Out Ratio (Times)	0.00	0.00	0.03	0.00	-
NOTES TO ACCOUNTS
Contingent Liabilities	0	0	0	0

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.54.16
UK Pound	1	Rs.81.74
Euro	1	Rs.70.50

INFORMATION DETAILS

Report Prepared by :

SDA

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.