MIRA INFORM REPORT

Report Date :

25.09.2013

IDENTIFICATION DETAILS

Name :	HEAP LEE CHAN TRADING COMPANY SDN. BHD. - 236077
Registered Office :	395, Mukim 6, Simpang 4, 14000 Bukit Mertajam, Pulau Pinang
Country :	Malaysia
Financials (as on) :	31.03.2012
Date of Incorporation :	04.12.1989
Com. Reg. No.:	190345-D
Legal Form :	Private Limited
Line of Business :	Wholesale of sundry goods, food products.
No. of Employees :	30

RATING & COMMENTS

MIRA’s Rating :

Ba

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

Status :	Satisfactory
Payment Behaviour :	No complaints
Litigation :	Clear

NOTES :

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

ECGC Country Risk Classification List – 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.

:

190345-D

COMPANY NAME

:

HEAP LEE CHAN TRADING COMPANY SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

04/12/1989

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

395, MUKIM 6, SIMPANG 4, 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.

BUSINESS ADDRESS

:

395, MUKIM 6, SIMPANG EMPAT, 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.

TEL.NO.

:

04-5392600

FAX.NO.

:

04-5392594

CONTACT PERSON

:

NG CHENG HOCK ( MANAGING DIRECTOR )

INDUSTRY CODE

:

47219

PRINCIPAL ACTIVITY

:

WHOLESALE OF SUNDRY GOODS, FOOD PRODUCTS

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 1,900,000.00 DIVIDED INTO 
ORDINARY SHARES 1,300,000 CASH AND 600,000 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 136,277,859 [2012]

NET WORTH

:

MYR 14,018,130 [2012]

STAFF STRENGTH

:

30 [2013]

BANKER (S)

:

EON BANK BHD RHB BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

LIMITED

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

MODERATE

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) wholesale of sundry goods, food products.

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

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

Name	Address	IC/PP/Loc No	Shareholding	(%)
MS. NG CHIANG CHONG @ YEAP CHIANG CHONG +	395, PERMATANG BATU, S.P.(T), 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.	620531-07-5499 6782328	316,675.00	16.67
MR. NG CHENG HOCK @ YEAP CHENG HOCK +	395, PERMATANG BATU, S.P.(T), 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.	600501-07-5211 5907841	316,675.00	16.67
MR. NG SENG LEONG @ YIAP SENG LEONG +	395, PERMATANG BATU, S.P.(T), 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.	670819-07-5039 A0773783	316,675.00	16.67
MR. NG SENG TIEN @ YEAP SENG TIEN +	395, PERMATANG BATU, S.P.(T), 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.	700611-07-5253 A1590804	316,675.00	16.67
MS. ONG SIEW HAR +	395, PERMATANG BATU, S.P.(T), 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.	400506-71-5226 7946313	316,650.00	16.67
MR. NG CHENG GUAN @ YEAP CHENG GUAN +	395, PERMATANG BATU, S.P.(T), 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.	340506-71-5347 4090001	316,650.00	16.67
			---------------	------
			1,900,000.00	100.00
			============	=====

+ Also Director

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

Local No	Country	Company	(%)	As At
721964D	MALAYSIA	RENTAK SINAR SDN. BHD.	100.00	29/03/2013

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MS. ONG SIEW HAR
Address	:	395, PERMATANG BATU, S.P.(T), 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.
IC / PP No	:	7946313
New IC No	:	400506-71-5226
Date of Birth	:	06/05/1940
Nationality	:	MALAYSIAN
Date of Appointment	:	04/12/1989

DIRECTOR 2

Name Of Subject	:	MR. NG CHENG GUAN @ YEAP CHENG GUAN
Address	:	395, PERMATANG BATU, S.P.(T), 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.
IC / PP No	:	4090001
New IC No	:	340506-71-5347
Date of Birth	:	06/05/1934
Nationality	:	MALAYSIAN
Date of Appointment	:	04/12/1989

DIRECTOR 3

Name Of Subject	:	MS. NG CHIANG CHONG @ YEAP CHIANG CHONG
Address	:	395, PERMATANG BATU, S.P.(T), 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.
IC / PP No	:	6782328
New IC No	:	620531-07-5499
Date of Birth	:	31/05/1962
Nationality	:	MALAYSIAN
Date of Appointment	:	05/01/1990

DIRECTOR 4

Name Of Subject	:	MR. NG SENG TIEN @ YEAP SENG TIEN
Address	:	395, PERMATANG BATU, S.P.(T), 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.
IC / PP No	:	A1590804
New IC No	:	700611-07-5253
Date of Birth	:	11/06/1970
Nationality	:	MALAYSIAN
Date of Appointment	:	05/01/1990

DIRECTOR 5

Name Of Subject	:	MR. NG CHENG HOCK @ YEAP CHENG HOCK
Address	:	395, PERMATANG BATU, S.P.(T), 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.
IC / PP No	:	5907841
New IC No	:	600501-07-5211
Date of Birth	:	01/05/1960
Nationality	:	MALAYSIAN
Date of Appointment	:	05/01/1990

DIRECTOR 6

Name Of Subject	:	MR. NG SENG LEONG @ YIAP SENG LEONG
Address	:	395, PERMATANG BATU, S.P.(T), 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.
IC / PP No	:	A0773783
New IC No	:	670819-07-5039
Date of Birth	:	19/08/1967
Nationality	:	MALAYSIAN
Date of Appointment	:	05/01/1990

MANAGEMENT

1)	Name of Subject	:	NG CHENG HOCK
	Position	:	MANAGING DIRECTOR

AUDITOR

Auditor	:	MCMILLAN WOODS YGL
Auditor' Address	:	16, CHINA STREET, 10200 GEORGE TOWN, PULAU PINANG, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MS. OOI ENG CHOO
	IC / PP No	:	A0531319
	New IC No	:	660911-07-5710
	Address	:	17, PINHORN ROAD, 11600 PULAU PINANG, PULAU PINANG, MALAYSIA.

2)	Company Secretary	:	HO SIEW BEE
	IC / PP No	:	S1136428D
	Address	:	17, PINHORN ROAD, 11600 PULAU PINANG, PULAU PINANG, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

EON BANK BHD

2)

Name

:

RHB BANK BHD

ENCUMBRANCE (S)

Charge No	Creation Date	Charge Description	Chargee Name	Total Charge	Status
1	22/07/1993	NEGATIVE PLEDGE	DEVELOPMENT COMMERCIAL BANK BHD	MYR 2,522,500.00	Unsatisfied
2	22/09/1997	1ST CHARGE	RHB BANK BHD	MYR 622,000.00	Unsatisfied
3	29/03/1998	N/A	RHB BANK BERHAD	MYR 500,000.00	Unsatisfied
4	28/02/2000	N/A	RHB BANK BERHAD	MYR 500,000.00	Unsatisfied
5	01/12/2003	LETTER OF SET-OFF	EON BANK BERHAD	MYR 48,869.00	Unsatisfied

LEGAL CHECK AGAINST SC

* A check has been conducted in our databank againt the SC whether the subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia.

No legal action was found in our databank. 

No winding up petition was found in our databank. 

DEFAULTER CHECK AGAINST SC

* We have checked through the SC in our defaulters' database which comprised of debtors that have been blacklisted by our customers and debtors that have been placed or assigned to us for collection since 1990. Information was provided by third party where the debt amount can be disputed. Please check with creditors for confirmation as alleged debts may have been paid since recorded or are being disputed. 

No blacklisted record & debt collection case was found in our defaulters' databank. 

PAYMENT RECORD

SOURCES OF RAW MATERIALS:
Local	:	YES
Overseas	:	YES
Import Countries	:	THAILAND,INDIA

The SC refused to provide any name of trade/service supplier and we are unable to conduct any trade enquiry. However, from financial historical data we conclude that :

OVERALL PAYMENT HABIT
Prompt 0-30 Days	[	]	Good 31-60 Days	[	]	Average 61-90 Days	[	X	]
Fair 91-120 Days	[	]	Poor >120 Days	[	]

CLIENTELE

Local	:	YES	Percentage	:	100%
Domestic Markets	:	MALAYSIA
Overseas	:	NO
Credit Term	:	AS AGREED
Payment Mode	:	CASH CHEQUES
Type of Customer	:	SUPERMARKETS,WHOLESALERS

OPERATIONS

Goods Traded

:

SUNDRY GOODS, FOOD PRODUCTS

Ownership of premises

:

OWNED

Total Number of Employees:
YEAR	2013	2012	2011	2010	2009
GROUP	N/A	N/A	N/A	N/A	N/A
COMPANY	30	40	33	38	40

Branch

:

NO

Other Information:

The SC is principally engaged in the (as a / as an) wholesale of sundry goods, food products. 

The SC's products range includes dried chillies, onions, garlics, potatos, ground nuts, green beans and others.

Besides that the SC has warehouse located at the same premises to keep stock and materials.

We were informed that the SC imports products based on the customers' requirements.

CURRENT INVESTIGATION

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client	:	00604 539 2600
Current Telephone Number	:	04-5392600
Match	:	YES
Address Provided by Client	:	395 MK 6 SIMPANG 4, 14000 BUKIT MERTAJAM, SEBERANG PERAI MALAYSIA
Current Address	:	395, MUKIM 6, SIMPANG EMPAT, 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.
Match	:	NO
Latest Financial Accounts	:	YES

Other Investigations

On 18th September 2013 we contacted one of the staff from the SC and she provided some information on the SC.

The address provided is incomplete.

FINANCIAL ANALYSIS

Profitability
Return on Shareholder Funds	:	Unfavourable	[	8.96%	]
Return on Net Assets	:	Acceptable	[	18.86%	]
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	[	10 Days	]
Debtor Ratio	:	Favourable	[	48 Days	]
Creditors Ratio	:	Favourable	[	21 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 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	[	1.06 Times	]
Current Ratio	:	Unfavourable	[	1.18 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	:	Unfavourable	[	2.86 Times	]
Gearing Ratio	:	Unfavourable	[	1.60 Times	]
The SC's interest cover was low. If its profits fall or when interest rate rises, it may not be able to meet all its interest payment. The SC was highly geared, thus it had a high financial risk. The SC was dependent on loans to finance its business needs. In times of economic downturn and / or high interest rate, the SC will become less profitable and competitive than other firms in the same industry, which are lowly geared. This is because the SC has to service the interest and to repay the loan, which will erode part of its profits. The profits will fluctuate depending on the SC's turnover and the interest it needs to pay.
Overall Assessment :
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. If there is a fall in the SC's profit or any increase in interest rate, the SC may not be able to generate sufficient cash-flow to service its interest. The SC's gearing level was high and its going concern will be in doubt if there is no injection of additional shareholders' funds in times of economic downturn and / or high interest rates.
Overall financial condition of the SC : LIMITED

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
47219 : Retail sale of other food products n.e.c.
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 1989, the SC is a Private Limited company, focusing on wholesale of sundry goods, food products. With over 2 decades of experience in the business, the SC has fairly rich experiences in the business and has achieved a certain market share. A paid up capital of RM1.9 million allows the SC to expand its business more comfortably. We considered that the SC's business position in the market is much dependent on the efforts of its directors. 

Over the years, the SC should have build up its clientele base and received supports from its regular customers. Investigation revealed that the SC's interest lies mostly in the local market. Thus, any adverse changes to the local economy might have a negative impact on the SC's business performance. Being a small company, the SC's business operation is supported by 30 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. 

The SC has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. 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. The high gearing ratio clearly implied that the SC was supported by more debt than equity. Thus, the SC is exposed to high financial risk. Given a positive net worth standing at MYR 14,018,130, 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. 

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

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

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)

HEAP LEE CHAN TRADING COMPANY SDN. BHD.

Financial Year End	2012-03-31	2011-03-31	2010-03-31	2009-03-31	2008-03-31
Months	12	12	12	12	12
Consolidated Account	GROUP	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	136,277,859	177,296,340	163,138,705	180,121,216	147,848,928
Other Income	427,704	533,765	585,575	-	-
	----------------	----------------	----------------	----------------	----------------
Total Turnover	136,705,563	177,830,105	163,724,280	180,121,216	147,848,928
Costs of Goods Sold	<130,069,933>	<167,115,141>	<157,999,328>	-	-
	----------------	----------------	----------------	----------------	----------------
Gross Profit	6,635,630	10,714,964	5,724,952	-	-
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	1,745,189	2,516,813	2,007,964	1,399,908	1,452,832
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	1,745,189	2,516,813	2,007,964	1,399,908	1,452,832
Taxation	<489,407>	<632,765>	<505,579>	<472,157>	<345,649>
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	1,255,782	1,884,048	1,502,385	927,751	1,107,183
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	10,863,148	8,979,100	7,476,715	6,548,964	5,441,781
	----------------	----------------	----------------	----------------	----------------
As restated	10,863,148	8,979,100	7,476,715	6,548,964	5,441,781
	----------------	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	12,118,930	10,863,148	8,979,100	7,476,715	6,548,964
TRANSFER TO RESERVES - General	<800>	-	-	-	-
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	12,118,130	10,863,148	8,979,100	7,476,715	6,548,964
	=============	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Bank overdraft	-	-	1,150	4,048	7,582
Bankers' acceptance	921,251	-	-	-	-
Hire purchase	19,017	12,367	17,195	14,744	14,523
Trust receipts	-	1,174,197	941,039	1,385,363	1,231,192
	----------------	----------------	----------------	----------------	----------------
	940,268	1,186,564	959,384	1,404,155	1,253,297

BALANCE SHEEt

HEAP LEE CHAN TRADING COMPANY SDN. BHD.

ASSETS EMPLOYED:
FIXED ASSETS	6,612,805	3,943,887	3,341,235	2,302,222	2,162,733
LONG TERM INVESTMENTS/OTHER ASSETS
Investments	1,870,400	1,870,400	6,001,198	9,050,841	8,064,713
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM INVESTMENTS/OTHER ASSETS	1,870,400	1,870,400	6,001,198	9,050,841	8,064,713
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	8,483,205	5,814,287	9,342,433	11,353,063	10,227,446
CURRENT ASSETS
Stocks	3,918,319	2,850,680	2,710,880	2,303,179	4,031,025
Trade debtors	18,021,383	25,505,378	21,191,595	20,050,819	22,448,870
Other debtors, deposits & prepayments	444,735	135,981	139,263	438,384	595,763
Short term deposits	-	-	-	-	56,681
Amount due from director	-	314,402	233,771	486,054	289,215
Cash & bank balances	16,115,716	21,042,458	14,848,993	12,742,524	12,145,036
Others	-	-	-	207,270	246,255
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	38,500,153	49,848,899	39,124,502	36,228,230	39,812,845
	----------------	----------------	----------------	----------------	----------------
TOTAL ASSET	46,983,358	55,663,186	48,466,935	47,581,293	50,040,291
	=============	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	7,426,103	6,895,615	4,548,610	5,113,564	8,739,537
Other creditors & accruals	67,719	57,183	74,854	64,371	42,792
Hire purchase & lease creditors	296,684	165,005	152,927	287,510	209,987
Bank overdraft	-	-	609,811	5,502	300,612
Bill & acceptances payable	21,886,000	35,412,000	32,007,000	32,576,000	31,984,000
Amounts owing to director	3,012,628	-	1,113	-	202,599
Provision for taxation	55,168	196,242	153,513	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	32,744,302	42,726,045	37,547,828	38,046,947	41,479,527
	----------------	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	5,755,851	7,122,854	1,576,674	<1,818,717>	<1,666,682>
	----------------	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	14,239,056	12,937,141	10,919,107	9,534,346	8,560,764
	=============	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	1,900,000	1,900,000	1,900,000	1,900,000	1,900,000
	----------------	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	1,900,000	1,900,000	1,900,000	1,900,000	1,900,000
RESERVES
Retained profit/(loss) carried forward	12,118,130	10,863,148	8,979,100	7,476,715	6,548,964
	----------------	----------------	----------------	----------------	----------------
TOTAL RESERVES	12,118,130	10,863,148	8,979,100	7,476,715	6,548,964
	----------------	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	14,018,130	12,763,148	10,879,100	9,376,715	8,448,964
LONG TERM LIABILITIES
Hire purchase creditors	180,665	133,327	24,975	131,235	100,000
Deferred taxation	40,261	40,666	15,032	26,396	11,800
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	220,926	173,993	40,007	157,631	111,800
	----------------	----------------	----------------	----------------	----------------
	14,239,056	12,937,141	10,919,107	9,534,346	8,560,764
	=============	=============	=============	=============	=============

FINANCIAL RATIO

HEAP LEE CHAN TRADING COMPANY SDN. BHD.

TYPES OF FUNDS
Cash	16,115,716	21,042,458	14,848,993	12,742,524	12,201,717
Net Liquid Funds	<5,770,284>	<14,369,542>	<17,767,818>	<19,838,978>	<20,082,895>
Net Liquid Assets	1,837,532	4,272,174	<1,134,206>	<4,121,896>	<5,697,707>
Net Current Assets/(Liabilities)	5,755,851	7,122,854	1,576,674	<1,818,717>	<1,666,682>
Net Tangible Assets	14,239,056	12,937,141	10,919,107	9,534,346	8,560,764
Net Monetary Assets	1,616,606	4,098,181	<1,174,213>	<4,279,527>	<5,809,507>
BALANCE SHEET ITEMS
Total Borrowings	22,363,349	35,710,332	32,794,713	33,000,247	32,594,599
Total Liabilities	32,965,228	42,900,038	37,587,835	38,204,578	41,591,327
Total Assets	46,983,358	55,663,186	48,466,935	47,581,293	50,040,291
Net Assets	14,239,056	12,937,141	10,919,107	9,534,346	8,560,764
Net Assets Backing	14,018,130	12,763,148	10,879,100	9,376,715	8,448,964
Shareholders' Funds	14,018,130	12,763,148	10,879,100	9,376,715	8,448,964
Total Share Capital	1,900,000	1,900,000	1,900,000	1,900,000	1,900,000
Total Reserves	12,118,130	10,863,148	8,979,100	7,476,715	6,548,964
LIQUIDITY (Times)
Cash Ratio	0.49	0.49	0.40	0.33	0.29
Liquid Ratio	1.06	1.10	0.97	0.89	0.86
Current Ratio	1.18	1.17	1.04	0.95	0.96
WORKING CAPITAL CONTROL (Days)
Stock Ratio	10	6	6	5	10
Debtors Ratio	48	53	47	41	55
Creditors Ratio	21	15	11	10	22
SOLVENCY RATIOS (Times)
Gearing Ratio	1.60	2.80	3.01	3.52	3.86
Liabilities Ratio	2.35	3.36	3.46	4.07	4.92
Times Interest Earned Ratio	2.86	3.12	3.09	2.00	2.16
Assets Backing Ratio	7.49	6.81	5.75	5.02	4.51
PERFORMANCE RATIO (%)
Operating Profit Margin	1.28	1.42	1.23	0.78	0.98
Net Profit Margin	0.92	1.06	0.92	0.52	0.75
Return On Net Assets	18.86	28.63	27.18	29.41	31.61
Return On Capital Employed	18.47	28.27	25.40	28.53	29.83
Return On Shareholders' Funds/Equity	8.96	14.76	13.81	9.89	13.10
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.62.66
UK Pound	1	Rs.100.46
Euro	1	Rs.84.60

INFORMATION DETAILS

Report Prepared by :

NIS

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.