MIRA INFORM REPORT

Report Date :

09.12.2014

IDENTIFICATION DETAILS

Name :	EDARAN FOKUS SDN. BHD.
Registered Office :	47B, Jalan Batai Laut 5, Kawasan 16, Taman Intan, 41300 Klang, Selangor
Country :	Malaysia
Financials (as on) :	31.12.2013
Date of Incorporation :	10.10.2007
Com. Reg. No.:	791520-M
Legal Form :	Private Limited
Line of Business :	Subject is principally engaged in the supplying industrial engineering products and services to oil and gas exploration and processing facilities, chemical and petrochemical industries.
No of Employees :	30 [2014]

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 – September 30, 2014

Country Name	Previous Rating (30.06.2014)	Current Rating (30.09.2014)
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 sustained budget deficits, has forced Kuala Lumpur to begin to address fiscal shortfalls, through initial reductions in energy and sugar subsidies and the announcement of the 2015 implementation of a 6% goods and services tax. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplies about 32% of government revenue in 2013. Bank Negara 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 earlier raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but retreated in 2013 after he encountered significant opposition from Malay nationalists and other vested interests. In September 2013 NAJIB launched the new Bumiputra Economic Empowerment Program (BEEP), policies that favor and advance the economic condition of ethnic Malays.

Source : CIA

EXECUTIVE SUMMARY

REGISTRATION NO.

:

791520-M

COMPANY NAME

:

EDARAN FOKUS SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

10/10/2007

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

47B, JALAN BATAI LAUT 5, KAWASAN 16, TAMAN INTAN, 41300 KLANG, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

:

LOT 1903(B), JALAN KPB7, KAWASAN PERINDUSTRIAN KG. BARU BALAKONG, 43300 BALAKONG, SELANGOR, MALAYSIA.

TEL.NO.

:

03-89623778

FAX.NO.

:

03-89622779

WEB SITE

:

WWW.EDARANFOKUS.COM

CONTACT PERSON

:

SHARI BIN MD NOR ( DIRECTOR )

INDUSTRY CODE

:

465

PRINCIPAL ACTIVITY

:

SUPPLYING INDUSTRIAL ENGINEERING PRODUCTS AND SERVICES TO OIL AND GAS EXPLORATION AND PROCESSING FACILITIES, CHEMICAL AND PETROCHEMICAL INDUSTRIES

AUTHORISED CAPITAL

:

MYR 1,000,000.00 DIVIDED INTO 

ORDINARY SHARE 1,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 1,000,000.00 DIVIDED INTO 

ORDINARY SHARES 1,000,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 28,059,077 [2013]

NET WORTH

:

MYR 5,838,169 [2013]

STAFF STRENGTH

:

30 [2014]

BANKER (S)

:

AMBANK (M) BHD PUBLIC BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

STRONG

PAYMENT

:

PROMPT

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

MODERATE

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

HISTORY / BACKGROUND

The Subject 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 Subject must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the Subject 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 Subject is insolvent. The Subject 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 Subject is principally engaged in the (as a / as an) supplying industrial engineering products and services to oil and gas exploration and processing facilities, chemical and petrochemical industries.

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

Share Capital History

Date	Authorised Shared Capital	Issue & Paid Up Capital
15/02/2013	MYR 1,000,000.00	MYR 1,000,000.00
26/02/2008	MYR 1,000,000.00	MYR 200,000.00
10/10/2007	MYR 100,000.00	MYR 2.00

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

Name	Address	IC/PP/Loc No	Shareholding	(%)
MS. NORIHAN BINTI IBRAHIM	19, LORONG IM8/30, TAMAN POLO, BANDAR INDERA MAHKOTA, 25200 KUANTAN, PAHANG, MALAYSIA.	740915-06-5122	350,000.00	35.00
MR. SHARI BIN MD NOR +	7, PERSIARAN TERATAI 3, SUNGAI RAMAL DALAM, 43000 KAJANG, SELANGOR, MALAYSIA.	551229-05-5431 4918281	350,000.00	35.00
HEXAGON DISTRIBUTORS SDN. BHD.	275, JALAN HARUAN 1, OAKLAND INDUSTRIAL PARK, 1ST FLOOR, 70200 SEREMBAN, NEGERI SEMBILAN, MALAYSIA.	240911M	300,000.00	30.00
			---------------	------
			1,000,000.00	100.00
			============	=====

+ Also Director

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MS. HAZLEEN HANITA BINTI ABD HANAN
Address	:	7, PERSIARAN RAJAWALI, TAMAN PAROI JAYA, 70400 SEREMBAN, NEGERI SEMBILAN, MALAYSIA.
IC / PP No	:	A3754355
New IC No	:	770909-05-5056
Date of Birth	:	09/09/1977
Nationality	:	MALAYSIAN
Date of Appointment	:	23/09/2014

DIRECTOR 2

Name Of Subject	:	MR. CHA CHEE PIN
Address	:	4-9C, BLOCK TANJUNG FABER RIA CONDOMINIUM, JALAN DESA SENTOSA, TAMAN DESA, 58000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	A2147066
New IC No	:	720312-01-5347
Date of Birth	:	12/03/1972
Nationality	:	MALAYSIAN
Date of Appointment	:	11/11/2013

DIRECTOR 3

Name Of Subject	:	MR. SHARI BIN MD NOR
Address	:	7, PERSIARAN TERATAI 3, SUNGAI RAMAL DALAM, 43000 KAJANG, SELANGOR, MALAYSIA.
IC / PP No	:	4918281
New IC No	:	551229-05-5431
Date of Birth	:	29/12/1955
Nationality	:	MALAYSIAN
Date of Appointment	:	31/07/2013

MANAGEMENT

1)	Name of Subject	:	SHARI BIN MD NOR
	Position	:	DIRECTOR

AUDITOR

Auditor	:	LEE & LEE
Auditor' Address	:	47, JALAN BATAI LAUT 5, KAWASAN 16, TAMAN INTAN, 41300 KLANG, SELANGOR, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MS. LEE KUE LIAN
	IC / PP No	:	6058415
	New IC No	:	601017-10-5524
	Address	:	9, JALAN RAJAWALI, TAMAN BERKELEY, 41150 KLANG, SELANGOR, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

AMBANK (M) BHD

2)

Name

:

PUBLIC BANK BHD

ENCUMBRANCE (S)

Charge No	Creation Date	Charge Description	Chargee Name	Total Charge	Status
1	06/03/2009	MEMORANDUM OF DEPOSIT & 1ST PARTY LETTER OF SET-OFF	AMBANK (M) BHD	MYR 7,010,000.00	Unsatisfied
2	21/08/2009	MEMORANDUM OF DEPOSIT & 1ST PARTY LETTER OF SET-OFF	AMBANK (M) BHD	MYR 3,800,000.00	Unsatisfied
3	22/08/2014	LETTER OF SET-OFF	PUBLIC BANK BHD	-	Unsatisfied

LITIGATION CHECK AGAINST SUBJECT

* A check has been conducted in our databank againt the Subject 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 SUBJECT

* We have checked through the Subject 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.

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

PAYMENT RECORD

SOURCES OF RAW MATERIALS:
Local	:	YES
Overseas	:	YES

The Subject 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	:	CHEQUES

OPERATIONS

Goods Traded

:

OIL AND GAS EQUIPMENTS

Ownership of premises

:

LEASED/RENTED

Total Number of Employees:
YEAR	2014	2011	2010	2009
GROUP	N/A	N/A	N/A	N/A
COMPANY	30	23	10	8

Branch

:

NO

Other Information:

The Subject is principally engaged in the (as a / as an) supplying industrial engineering products and services to oil and gas exploration and processing facilities, chemical and petrochemical industries. 

The Subject's core business is the supply of industrial engineering products and services to Oil & Gas Exploration and Processing facilities, Chemical and Petrochemical industries.

Some of the product are Flow Handling Equipments, Hydraulic Emergency Shut Down Valves, Valve Actuation, Instrumentation Valves, Sampling, Filtration, Pressure Safety Valves, Auto Drainer for steam / air / gas and Corrosion Resistant pipes, fittings, valves, hoses.

The Subject also providing some service such as:
- Technical support service
- after sale service
- inspection, installation, and testing service

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client	:	N/A
Current Telephone Number	:	03-89623778
Match	:	N/A
Address Provided by Client	:	LOT 1903 (B) JALAN KPB 7, KAWASAN PERINDUSTRIAN KG BARU BALAKONG 43300 SERI KEMBANGAN SELANGOR
Current Address	:	LOT 1903(B), JALAN KPB7, KAWASAN PERINDUSTRIAN KG. BARU BALAKONG, 43300 BALAKONG, SELANGOR, MALAYSIA.
Match	:	YES
Latest Financial Accounts	:	YES

Other Investigations

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

FINANCIAL ANALYSIS

Profitability
Turnover	:	Increased	[	2010 - 2013	]
Profit/(Loss) Before Tax	:	Increased	[	2010 - 2013	]
Return on Shareholder Funds	:	Acceptable	[	29.93%	]
Return on Net Assets	:	Favourable	[	41.88%	]
The Subject's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The Subject's management have been efficient in controlling its operating costs. The Subject's management had generated acceptable return for its shareholders using its assets.
Working Capital Control
Stock Ratio	:	Favourable	[	6 Days	]
Debtor Ratio	:	Unfavourable	[	71 Days	]
Creditors Ratio	:	Favourable	[	22 Days	]
The Subject's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The high debtors' ratio could indicate that the Subject was weak in its credit control. However, the Subject could also giving longer credit periods to its customers in order to boost its sales or to capture / retain its market share. The Subject had a favourable creditors' ratio where the Subject could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.
Liquidity
Liquid Ratio	:	Favourable	[	1.63 Times	]
Current Ratio	:	Unfavourable	[	1.68 Times	]
A minimum liquid ratio of 1 should be maintained by the Subject in order to assure its creditors of its ability to meet short term obligations and the Subject was in a good liquidity position. Thus, we believe the Subject is able to meet all its short term obligations as and when they fall due.
Solvency
Interest Cover	:	Nil	[	0.00 Times	]
Gearing Ratio	:	Favourable	[	0.00 Times	]
The Subject's interest cover was nil as it did not pay any interest during the year. The Subject had no gearing and hence it had virtually no financial risk. The Subject was financed by its shareholders' funds and internally generated fund. During the economic downturn, the Subject, having a zero gearing, will be able to compete better than those which are highly geared in the same industry.
Overall Assessment :
Generally, the Subject's performance has improved with higher turnover and profit. The Subject was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the Subject should be able to repay its short term obligations. The Subject did not make any interest payment during the year. The Subject was dependent on its shareholders' funds to finance its business needs. The Subject was a zero gearing company, it was solely dependant on its shareholders to provide funds to finance its business. The Subject has good chance of getting loans, if the needs arises.
Overall financial condition of the Subject : STRONG

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

Major Economic Indicators:	2011	2012	2013	2014*	2015**
Population ( Million)	28.7	29.3	29.8	30.3	30.5
Gross Domestic Products ( % )	5.1	5.6	5.3	6.0	6.0
Domestic Demand ( % )	8.2	9.4	5.6	6.4	6.2
Private Expenditure ( % )	8.2	8.0	8.6	7.9	6.9
Consumption ( % )	7.1	1.0	5.7	6.5	5.6
Investment ( % )	12.2	11.7	13.3	12.0	10.7
Public Expenditure ( % )	8.4	13.3	4.4	2.3	4.2
Consumption ( % )	16.1	11.3	(1.2)	2.1	3.8
Investment ( % )	(0.3)	15.9	4.2	2.6	4.7
Balance of Trade ( MYR Million )	116,058	106,300	71,298	52,314	-
Government Finance ( MYR Million )	(45,511)	(42,297)	(39,993)	(37,291)	-
Government Finance to GDP / Fiscal Deficit ( % )	(5.4)	(4.5)	(4.0)	(3.5)	(3.0)
Inflation ( % Change in Composite CPI)	3.1	1.6	2.5	3.3	4.0
Unemployment Rate	3.3	3.2	3.0	3.0	3.0
Net International Reserves ( MYR Billion )	415	427	-	417	-
Average Risk-Weighted Capital Adequacy Ratio ( % )	3.50	2.20	-	-	-
Average 3 Months of Non-performing Loans ( % )	14.80	14.70	-	-	-
Average Base Lending Rate ( % )	6.60	6.53	6.53	-	-
Business Loans Disbursed( % )	15.3	32.2	-	-	-
Foreign Investment ( MYR Million )	23,546.1	26,230.4	38,238.0	-	-
Consumer Loans ( % )	-	-	-	-	-
Registration of New Companies ( No. )	45,455	45,441	46,321	-	-
Registration of New Companies ( % )	3.0	(0.0)	1.9	-	-
Liquidation of Companies ( No. )	132,485	17,092	26,430	-	-
Liquidation of Companies ( % )	417.8	(87.1)	54.6	-	-
Registration of New Business ( No. )	284,598	324,761	329,895	-	-
Registration of New Business ( % )	5.0	14.0	2.0	-	-
Business Dissolved ( No. )	20,121	20,380	18,161	-	-
Business Dissolved ( % )	1.9	1.3	(10.9)	-	-
Sales of New Passenger Cars (' 000 Unit )	535.1	552.2	576.7	598.4	610.3
Cellular Phone Subscribers ( Million )	35.3	38.5	43.0	43.8	-
Tourist Arrival ( Million Persons )	24.7	25.0	25.7	28.0	-
Hotel Occupancy Rate ( % )	60.6	62.4	62.6	-	-
Credit Cards Spending ( % )	15.6	12.6	-	-	-
Bad Cheque Offenders (No.)	32,627	26,982	28,876	-	-
Individual Bankruptcy ( No.)	19,167	19,575	21,984	-	-
Individual Bankruptcy ( % )	5.8	2.1	12.3	-	-

INDUSTRIES ( % of Growth ):	2011	2012	2013	2014*	2015**
Agriculture	5.8	1.0	2.1	3.8	3.1
Palm Oil	10.8	(0.3)	2.6	6.7	-
Rubber	6.1	(7.9)	(10.1)	(10.4)	-
Forestry & Logging	(7.6)	(4.5)	(7.8)	(4.2)	-
Fishing	2.1	4.3	1.6	2.7	-
Other Agriculture	7.1	6.4	8.2	6.2	-
Industry Non-Performing Loans ( MYR Million )	634.1	-	-	-	-
% of Industry Non-Performing Loans	3.2	-	-	-	-
Mining	(5.4)	1.4	0.9	(0.8)	2.8
Oil & Gas	(1.7)	-	-	-	-
Other Mining	-	-	-	-	-
Industry Non-performing Loans ( MYR Million )	46.5	-	-	-	-
% of Industry Non-performing Loans	0.1	-	-	-	-
Manufacturing #	4.7	4.8	3.4	6.6	5.5
Exported-oriented Industries	4.1	6.5	3.3	5.6	-
Electrical & Electronics	(4.0)	12.7	6.9	13.3	-
Rubber Products	20.7	3.0	11.7	(0.3)	-
Wood Products	(5.1)	8.7	(2.7)	5.1	-
Textiles & Apparel	13.2	(7.1)	(2.6)	11.5	-
Domestic-oriented Industries	10.7	1.7	6.8	9.4	-
Food, Beverages & Tobacco	4.80	2.70	3.60	6.13	6.13
Chemical & Chemical Products	10.0	10.8	5.6	-	-
Plastic Products	3.8	-	-	-	-
Iron & Steel	2.2	(6.6)	5.0	0.1	-
Fabricated Metal Products	21.8	13.8	9.9	2.9	-
Non-metallic Mineral	12.1	2.9	(2.0)	5.4	-
Transport Equipment	12.0	3.4	13.8	22.9	-
Paper & Paper Products	9.5	3.1	1.8	4.7	-
Crude Oil Refineries	9.3	-	-	-	-
Industry Non-Performing Loans ( MYR Million )	6,537.2	-	-	-	-
% of Industry Non-Performing Loans	25.7	-	-	-	-
Construction	4.7	18.6	10.9	12.7	10.7
Industry Non-Performing Loans ( MYR Million )	3,856.9	-	-	-	-
% of Industry Non-Performing Loans	10.2	-	-	-	-
Services	7.1	6.4	5.9	5.9	5.6
Electric, Gas & Water	3.5	4.4	4.2	3.6	3.9
Transport, Storage & Communication	6.50	7.10	7.30	7.50	7.15
Wholesale, Retail, Hotel & Restaurant	5.2	4.7	5.9	6.9	6.5
Finance, Insurance & Real Estate	6.90	9.70	3.70	4.65	4.25
Government Services	12.4	9.4	8.3	6.1	5.6
Other Services	5.1	3.9	5.1	4.8	4.5
Industry Non-Performing Loans ( MYR Million )	6,825.2	-	-	-	-
% of Industry Non-Performing Loans	23.4	-	-	-	-
* Estimate / Preliminary
** Forecast
# Based On Manufacturing Production Index

INDUSTRY ANALYSIS

MSIC CODE
465 : Wholesale of machinery, equipment and supplies
INDUSTRY :	MACHINERY
Malaysia is presently the leading manufacturer of automation machinery and equipment (M&E) in the ASEAN region with a total of 22 companies in production. The machinery and equipment industry has expanded and produce a diverse range of machinery which give importance to the overall industrial development of the country, due to its cross cutting linkages with all industrial sectors.
Growth of the domestic-oriented industries such as machinery and transportation equipment is expected to remain favourable in 2014, in line with resilient domestic consumption and robust private investment. However, the output of general-purpose machinery decreased 8.8% in the first seven moths of 2014 (January - July 2013: -1.8%) due to the decline in manufacture of air-conditioning machine (-17.9%) as well as lifting and handling equipment (-8.2%).
Besides, shipments of machinery, appliances and parts continued to expand rapidly by 12.5% in the first seven months of 2014 (January - July 2013: 1.4%) with stronger demand from Singapore, the US, China and Australia. Growth was mainly contributed by specialized machinery for specific industries (16.3%), particularly for civil engineering and manufacture of semiconductors as well as general industrial machinery and equipment (9.2%) such as heating and cooling equipment and parts as well as mechanical handling equipment and parts.
According to the World Bank's Doing Business 2014 Report, Malaysia improved to 15th from 25th position in the 2014 Foreign Direct Investment Confidence Index, with highlighted Malaysia's efforts in building its competitive position in electronics, automotive, and machinery manufacturing to move up the value chain into high technology and skill-intensive segments.
The Government has identified the M&E industry to be one of the key areas for growth and development. The growth will focus on the manufacture of high value-added and high technology M&E. For the further development of the M&E industry, six strategic thrusts have been set during the Third Industrial Master Plan (IMP3), 2006 - 2020 period:-
- Promoting Malaysia as a regional production, trading and distribution centre for M&E
- Rising the development and promotion of selected specialized and high technology M&E
- Strengthening the engineering support industries and support services
- Developing Malaysian Standards for machinery and equipment
- Developing sufficient highly skilled workforce
- Strengthening the institutional support for the further development of the industry
OVERALL INDUSTRY OUTLOOK : Average Growth

CREDIT RISK EVALUATION & RECOMMENDATION

Incorporated in 2007, the Subject is a Private Limited company, focusing on supplying industrial engineering products and services to oil and gas exploration and processing facilities, chemical and petrochemical industries. Having been in business for more than 5 years, the Subject has established a remarkable clientele base for itself which has contributed to its business growth. A paid up capital of MYR 1,000,000 allows the Subject to expand its business more comfortably. We considered that the Subject's business position in the market is much dependent on the efforts of its directors. 

Over the years, the Subject should have build up its clientele base and received supports from its regular customers. Investigation revealed that the Subject's interest lies mostly in the local market. Thus, any adverse changes to the local economy might have a negative impact on the Subject's business performance. Being a small company, the Subject's business operation is supported by 30 employees. Overall, we regard that the Subject's management capability is average. This indicates that the Subject has greater potential to improve its business performance and raising income for the Subject. 

We noted that both the turnover and profits have increased compared to the previous year. The higher profit could be due to increase in turnover and better control over its operating costs. Return on shareholders' funds of the Subject was at a favourable range which indicated that the management was efficient in utilising its funds to generate income. The Subject 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 zero geared company, the Subject virtually has no financial risk as it is mainly dependent on its internal funds to finance its business. Given a positive net worth standing at MYR 5,838,169, the Subject should be able to maintain its business in the near terms. 

Having a strong assets backing, the Subject possesses latent assets as collateral for further financial extension. Hence, it has good chance of getting loans if the needs arises. The Subject'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 Subject has a good control over its resources. 

We regard that the Subject's overall payment habit is prompt. The Subject 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 Subject is expected to benefit from the favourable outlook of the industry. 

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

PROFIT AND LOSS ACCOUNT

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

EDARAN FOKUS SDN. BHD.

Financial Year End	2013-12-31	2012-12-31	2012-03-31	2011-03-31	2010-03-31
Months	12	9	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	FULL
Currency	MYR	MYR	MYR	MYR	MYR
TURNOVER	28,059,077	20,721,942	18,222,838	22,200,218	8,497,967
	----------------	----------------	----------------	----------------	----------------
Total Turnover	28,059,077	20,721,942	18,222,838	22,200,218	8,497,967
Costs of Goods Sold	(24,419,355)	(15,580,696)	-	-	-
	----------------	----------------	----------------	----------------	----------------
Gross Profit	3,639,722	5,141,246	-	-	-
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	2,454,307	2,327,368	894,341	1,246,571	290,672
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	2,454,307	2,327,368	894,341	1,246,571	290,672
Taxation	(706,792)	(600,662)	(205,749)	(316,252)	(68,994)
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	1,747,515	1,726,706	688,592	930,319	221,678
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	3,090,654	1,363,948	675,356	(254,963)	(476,641)
	----------------	----------------	----------------	----------------	----------------
As restated	3,090,654	1,363,948	675,356	(254,963)	(476,641)
	----------------	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	4,838,169	3,090,654	1,363,948	675,356	(254,963)
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	4,838,169	3,090,654	1,363,948	675,356	(254,963)
	=============	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Bankers' acceptance	-	7,416	-	-	-
Others	-	-	-	-	(53,126)
	----------------	----------------	----------------	----------------	----------------
	-	7,416	-	-	(53,126)
	=============	=============		=============	=============

BALANCE SHEET

EDARAN FOKUS SDN. BHD.

ASSETS EMPLOYED:
FIXED ASSETS	127,522	118,941	128,413	130,278	76,463
LONG TERM INVESTMENTS/OTHER ASSETS
Subsidiary companies	180,000	-	-	-	-
Deferred assets	-	2,170	-	-	9,867
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM INVESTMENTS/OTHER ASSETS	180,000	2,170	-	-	9,867
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	307,522	121,111	128,413	130,278	86,330
Stocks	442,960	704,447	-	-	950,673
Trade debtors	5,434,049	7,846,678	-	-	5,358,988
Other debtors, deposits & prepayments	354,564	257,243	-	-	19,337
Short term deposits	2,556,730	572,260	-	-	2,163,365
Short term loans & advances	-	-	-	-	1,000
Cash & bank balances	2,467,950	2,933,014	-	-	481,643
Amount owing by customer	2,242,153	2,255,608	-	-	-
Amount owing by shareholders	-	62,705	-	-	-
Others	179,716	179,716	-	-	92,798
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	13,678,122	14,811,671	10,782,110	15,123,293	9,067,804
	----------------	----------------	----------------	----------------	----------------
TOTAL ASSET	13,985,644	14,932,782	10,910,523	15,253,571	9,154,134
	=============	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	1,482,077	7,781,049	-	-	2,808,156
Other creditors & accruals	1,635,175	1,679,969	-	-	1,289,777
Bank overdraft	-	-	-	-	461,756
Deposits from customers	3,749,745	775,428	-	-	-
Bill & acceptances payable	-	-	-	-	1,219,000
Amounts owing to subsidiary companies	170,000	-	-	-	-
Provision for taxation	1,087,974	605,682	-	-	-
Other liabilities	-	-	-	-	2,630,408
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	8,124,971	10,842,128	8,474,349	13,578,215	8,409,097
	----------------	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	5,553,151	3,969,543	2,307,761	1,545,078	658,707
	----------------	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	5,860,673	4,090,654	2,436,174	1,675,356	745,037
	=============	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000
	----------------	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000
Retained profit/(loss) carried forward	4,838,169	3,090,654	1,363,948	675,356	(254,963)
	----------------	----------------	----------------	----------------	----------------
TOTAL RESERVES	4,838,169	3,090,654	1,363,948	675,356	(254,963)
	----------------	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	5,838,169	4,090,654	2,363,948	1,675,356	745,037
Deferred taxation	22,504	-	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	22,504	-	72,226	-	-
	----------------	----------------	----------------	----------------	----------------
	5,860,673	4,090,654	2,436,174	1,675,356	745,037
	=============	=============	=============	=============	=============

FINANCIAL RATIO

EDARAN FOKUS SDN. BHD.

TYPES OF FUNDS
Cash	5,024,680	3,505,274	-	-	2,645,008
Net Liquid Funds	5,024,680	3,505,274	-	-	964,252
Net Liquid Assets	5,110,191	3,265,096	2,307,761	1,545,078	(291,966)
Net Current Assets/(Liabilities)	5,553,151	3,969,543	2,307,761	1,545,078	658,707
Net Tangible Assets	5,860,673	4,090,654	2,436,174	1,675,356	745,037
Net Monetary Assets	5,087,687	3,265,096	2,235,535	1,545,078	(291,966)
BALANCE SHEET ITEMS
Total Borrowings	0	0	-	-	1,680,756
Total Liabilities	8,147,475	10,842,128	8,546,575	13,578,215	8,409,097
Total Assets	13,985,644	14,932,782	10,910,523	15,253,571	9,154,134
Net Assets	5,860,673	4,090,654	2,436,174	1,675,356	745,037
Net Assets Backing	5,838,169	4,090,654	2,363,948	1,675,356	745,037
Shareholders' Funds	5,838,169	4,090,654	2,363,948	1,675,356	745,037
Total Share Capital	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000
Total Reserves	4,838,169	3,090,654	1,363,948	675,356	(254,963)
LIQUIDITY (Times)
Cash Ratio	0.62	0.32	-	-	0.31
Liquid Ratio	1.63	1.30	-	-	0.97
Current Ratio	1.68	1.37	1.27	1.11	1.08
WORKING CAPITAL CONTROL (Days)
Stock Ratio	6	12	-	-	41
Debtors Ratio	71	138	-	-	230
Creditors Ratio	22	182	-	-	121
SOLVENCY RATIOS (Times)
Gearing Ratio	0.00	0.00	-	-	2.26
Liabilities Ratio	1.40	2.65	3.62	8.10	11.29
Times Interest Earned Ratio	0.00	314.83	-	-	(4.47)
Assets Backing Ratio	5.86	4.09	2.44	1.68	0.75
PERFORMANCE RATIO (%)
Operating Profit Margin	8.75	11.23	4.91	5.62	3.42
Net Profit Margin	6.23	8.33	3.78	4.19	2.61
Return On Net Assets	41.88	57.08	36.71	74.41	31.88
Return On Capital Employed	41.88	57.08	36.71	74.41	19.68
Return On Shareholders' Funds/Equity	29.93	42.21	29.13	55.53	29.75
Dividend Pay Out Ratio (Times)	0.00	0.00	-	-	0.00
NOTES TO ACCOUNTS
Contingent Liabilities	0	0		-	0

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.93
UK Pound	1	Rs.96.37
Euro	1	Rs.76.10

INFORMATION DETAILS

Analysis Done by :	DIV
Report Prepared by :	SMN

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%)

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