MIRA INFORM REPORT

Report Date :

06.02.2014

IDENTIFICATION DETAILS

Name :	ARTMATRIX TECHNOLOGY SDN. BHD.
Registered Office :	13-A, Jalan Ss21/56b, Damansara Utama, 47400 Petaling Jaya, Selangor
Country :	Malaysia
Financials (as on) :	30.06.2013
Date of Incorporation :	09.06.2005
Com. Reg. No.:	694144-X
Legal Form :	Private Limited Company
Line of Business :	Designing, Manufacturing and Supplying office furniture primarily to corporate offices and institutions.
No. of Employees :	Not Available

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 – december 01, 2013

Country Name	Previous Rating (30.09.2013)	Current Rating (01.12.2013)
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.

:

694144-X

COMPANY NAME

:

ARTMATRIX TECHNOLOGY SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

09/06/2005

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

13-A, JALAN SS21/56B, DAMANSARA UTAMA, 47400 PETALING JAYA, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

:

LOT 32789, JALAN 5/1A, TAMAN PERINDUSTRIAN SELESA JAYA, 43300 BALAKONG, SELANGOR, MALAYSIA.

TEL.NO.

:

03-89622286

FAX.NO.

:

03-89618862

EMAIL

:

SALES@ARTMATRIX.COM.MY

WEB SITE

:

WWW.ARTMATRIX.COM.MY

CONTACT PERSON

:

HERBERT KOH ( CEO )

INDUSTRY CODE

:

46592

PRINCIPAL ACTIVITY

:

Designing, Manufacturing and Supplying office furniture primarily to corporate offices and institutions.

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 500,000 CASH AND 500,000 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 31,230,577 [2013]

NET WORTH

:

MYR 34,542,123 [2013]

STAFF STRENGTH

:

N/A

BANKER (S)

:

CIMB BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

STRONG

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

MARGINAL 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) designing, manufacturing and supplying office furniture primarily to corporate offices and institutions.

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

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

Name	Address	IC/PP/Loc No	Shareholding	(%)
VECTOR PROJECTS INDIA (PTE) LTD	112/113, MARATHON MAX, MULUD-GOREGAON LINK ROAD, MULUD (WEST), MUMBAI, 400 080, INDIA.	U29299 MH 2001 PTC 1	400,000.00	40.00
MR. KOH WOOI KHIANG +	2, JALAN USJ HEIGHTS 3/1D, 47610 SUBANG JAYA, SELANGOR, MALAYSIA.	540731-07-5151 4631950	210,000.00	21.00
MR. LIM CHOON KEAT +	25, JALAN BS10/3A, SEKSYEN 10, TAMAN BUKIT SERDANG, SERI KEMBANGAN, 43300 BALAKONG, SELANGOR, MALAYSIA.	681015-10-6139 A1076861	190,000.00	19.00
MR. LAU SIA HUNG	A-6-3, PANGSAPURI IMPIAN, BANDAR PUCHONG JAYA, 47100 PUCHONG, SELANGOR, MALAYSIA.	711111-13-5049 K0258084	100,000.00	10.00
MR. KOH YIN GUAN	17, JALAN RP10/2, TAMAN RAWANG PERDANA 2, 48000 RAWANG, SELANGOR, MALAYSIA.	760327-14-5597 A3346267	50,000.00	5.00
MR. SOON KEE LEK	7, TKT PANTAI JERJAK, BATU UBAN, 11700 GELUGOR, PULAU PINANG, MALAYSIA.	470615-08-5407 2523819	50,000.00	5.00
			---------------	------
			1,000,000.00	100.00
			============	=====

+ Also Director

The Subject's interest in other companies (Subsidiaries/Associates) are shown as follow :

Local No	Country	Company	(%)	As At
693659U	MALAYSIA	ARTMATRIX MANUFACTURING SDN. BHD.	100.00	29/03/2013

DIRECTORS

DIRECTOR 1

Name Of Subject	:	RAO UMESH PRABHAKAR
Address	:	803, MARATHON GALAXY, L.B.S. MARG, MULUND (WEST), MUMBAI-80, INDIA.
IC / PP No	:	Z-1589862
Nationality	:	INDIAN
Date of Appointment	:	12/01/2006

DIRECTOR 2

Name Of Subject	:	MR. LIM CHOON KEAT
Address	:	25, JALAN BS10/3A, SEKSYEN 10, TAMAN BUKIT SERDANG, SERI KEMBANGAN, 43300 BALAKONG, SELANGOR, MALAYSIA.
IC / PP No	:	A1076861
New IC No	:	681015-10-6139
Date of Birth	:	15/10/1968
Nationality	:	MALAYSIAN
Date of Appointment	:	10/09/2005

DIRECTOR 3

Name Of Subject	:	MR. KOH WOOI KHIANG
Address	:	2, JALAN USJ HEIGHTS 3/1D, 47610 SUBANG JAYA, SELANGOR, MALAYSIA.
IC / PP No	:	4631950
New IC No	:	540731-07-5151
Date of Birth	:	31/07/1954
Nationality	:	MALAYSIAN
Date of Appointment	:	09/06/2005

MANAGEMENT

1)	Name of Subject	:	HERBERT KOH
	Position	:	CEO

AUDITOR

Auditor	:	JB LAU & KHOO
Auditor' Address	:	13-M, JALAN SS21/56B, DAMANSARA UTAMA, 47400 PETALING JAYA, SELANGOR, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MS. FOO LI LING
	IC / PP No	:	A1728204
	New IC No	:	701111-07-5286
	Address	:	67, JALAN BUNGA ANGGERIK 2, DATARAN UKAY, 68000 AMPANG, SELANGOR, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

CIMB BANK BHD

ENCUMBRANCE (S)

Charge No	Creation Date	Charge Description	Chargee Name	Total Charge	Status
1	19/11/2009	N/A	CIMB BANK BERHAD	MYR 1,500,000.00	Unsatisfied
2	30/07/2010	N/A	RHB BANK BHD	MYR 750,000.00	Unsatisfied
3	25/11/2010	N/A	CIMB BANK BERHAD	MYR 1,500,000.00	Unsatisfied

LEGAL CHECK AGAINST SUBJECT

* A check has been conducted in our databank against 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 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 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	[	]	Good 31-60 Days	[	]	Average 61-90 Days	[	X	]
Fair 91-120 Days	[	]	Poor >120 Days	[	]

CLIENTELE

Local	:	YES
Domestic Markets	:	MALAYSIA
Overseas	:	YES
Export Market	:	ASIA SINGAPORE UNITED ARAB EMIRATES
Credit Term	:	N/A
Payment Mode	:	CHEQUES TELEGRAPHIC TRANSFER (TT)

OPERATIONS

Goods Traded

:

OFFICE FURNITURE

Product Brand Name

:

ARTMATRIX

Award

:

1 ) ENTERPRISE 50 AWARD Year :2009
2 ) GOLDEN BULL AWARD Year :2008
3 ) ASIA PACIFIC SUPER EXCELLENT BRAND AWARD Year :2008

Member(s) / Affiliate(s)

:

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

Branch

:

NO

Other Information:

The Subject is principally engaged in the Designing, Manufacturing and Supplying office furniture primarily to corporate offices and institutions.

The Group is the first Malaysian office furniture manufacturer to have a range of workstation carrying Environmental Choice Australia (ECA) eco label, assessed and verified by Good Environmental Choice Australia (GECA).

The manufacturing processes and products are assessed in accordance to ISO14024 and licenced with Global Environmental Standard (GES). 

In addition, Eco-label products are laboratory tested against ANSI/BIFMA M7.1-2007 for its low emission, comply to LEED requirement for the Indoor Air Quality.

The Subject focuses on R&D and branding, marketing, distribution and project management of system furniture. 

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client	:	N/A
Current Telephone Number	:	03-89622286
Match	:	N/A
Address Provided by Client	:	N/A
Current Address	:	LOT 32789, JALAN 5/1A, TAMAN PERINDUSTRIAN SELESA JAYA, 43300 BALAKONG, SELANGOR, MALAYSIA.
Match	:	N/A
Latest Financial Accounts	:	YES

Other Investigations

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

The Subject refused to disclose its number of employees.

FINANCIAL ANALYSIS

Profitability
Turnover	:	Decreased	[	2009 - 2013	]
Profit/(Loss) Before Tax	:	Decreased	[	2009 - 2013	]
Return on Shareholder Funds	:	Acceptable	[	14.72%	]
Return on Net Assets	:	Acceptable	[	12.62%	]
The continuous fall in turnover could be due to the lower demand for the Subject's products / services.The dip in profit could be due to the stiff market competition which reduced the Subject's profit margin. The Subject's management had generated acceptable return for its shareholders using its assets.
Working Capital Control
Stock Ratio	:	Favourable	[	23 Days	]
Debtor Ratio	:	Unfavourable	[	119 Days	]
Creditors Ratio	:	Unfavourable	[	75 Days	]
The Subject's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The Subject's debtors ratio was high. The Subject should tighten its credit control and improve its collection period. The unfavourable creditors' ratio could be due to the Subject taking advantage of the credit granted by its suppliers. However this may affect the goodwill between the Subject and its suppliers and the Subject may inadvertently have to pay more for its future supplies.
Liquidity
Liquid Ratio	:	Favourable	[	4.44 Times	]
Current Ratio	:	Favourable	[	4.71 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	:	Favourable	[	10.11 Times	]
Gearing Ratio	:	Favourable	[	0.26 Times	]
The interest cover showed that the Subject was able to service the interest. The favourable interest cover could indicate that the Subject was making enough profit to pay for the interest accrued. The Subject was lowly geared thus it had a low financial risk. The Subject was mainly financed by its shareholders' funds and internally generated funds. In times of economic slowdown / downturn, the Subject being a lowly geared company, will be able to compete better than those companies which are highly geared in the same industry.
Overall Assessment :
The Subject's performance deteriorated over the years with lower 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. With the favourable interest cover, the Subject could be able to service all the accrued interest without facing any difficulties. The Subject 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 Subject : STRONG

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
46592 : Wholesale of office furniture
INDUSTRY :	FURNITURE & FIXTURES
Malaysia is a leading furniture exporter and was ranked as the 8th world furniture exporter in 2011. Exports account for 67% of domestic production. Exports are mainly destined for the United States, Japan, Singapore, Australia and the United Kingdom, which together absorbed almost 60% of the total.Government target growth of 6.5% where it estimated to reach RM53 billion by 2020.
In April 2012, rubber-wood prices per tonne hovers between RM1,800 to RM2,000, compared to RM1,500 to RM1,800 per tonne in November 2011. At January 2012, US purchase Malaysian made furniture products at the value of RM163million compared with RM158.8million in January 2011, an increase of about 3%. Eventhough, Malaysia External Trade Corporation (MATRADE) reported In January 2012, where Malaysia's furniture export total sales came down by 14.7% to RM571million in January 2012 from RM670.6million in January 2011 due to the shorter working days in January 2012 and also less orders from key customers such as Japan and Singapore. Japan imported about RM64.2million worth of furniture products from Malaysia in January 2012, compared to RM80.8million in January 2011, down by 20.6%.
In 2012, Malaysian furniture was exported to 199 countries worldwide and was valued at RM8billion, increasing 4.3% from the year before with a 10.9% increase in furniture exports to the United States. The Ministry of Plantation Industries and Commodities aims to surpass in year 2013, the RM8 billion mark for total Malaysian furniture exported in 2012.
Under the the National Timber Industry Policy (MTIP), the government has targeted RM16 billion furniture exports by 2020. The value of Malaysian furniture exports represented 3% of total world exports. Demand for Malaysian furniture increasing due to rising afflunce and sophistication in customer expectation. Malaysia furniture stand with its original design as well its good work ethics in world furniture market.
The furniture industry is highly export oriented with over 90% of its production are destined for overseas market which accounted 3% value of global exports.The furniture industry’s adoption of high technology production manufacturing capabilities coupled with greater emphasis on design, market expansion and aggressive promotional efforts, the Malaysian furniture industry has the potential to increase exports for a bigger global market share.
OVERALL INDUSTRY OUTLOOK : Marginal Growth

CREDIT RISK EVALUATION & RECOMMENDATION

Incorporated in 2005, the Subject is a Private Limited company, focusing on trading of office furniture. Having been in business for 9 years, the Subject has established a remarkable clientele base for itself which has contributed to its business growth. Having strong support from its shareholder has enabled the Subject to remain competitive despite the challenging business environment. The capital standing of the Subject is fair. With an adequate share capital, the Subject has the potential of expanding its business in future. 

Over the years, the Subject has penetrated into both the local and overseas market. The Subject has positioned itself in the global market and is competing in the industry. Its stable clientele base will enable the Subject to further enhance its business in the near term. 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. 

The Subject's business performance showed a reverse trend as both its turnover and pre-tax profit have decreased compared to the previous year. Return on shareholders' funds of the Subject was at an acceptable 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 lowly geared company, the Subject 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 34,542,123, 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. 

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

The industry has reached its maturity stage and only enjoying a marginal growth. The steady growth of the country's economy will further enhance the industry activities. Thus, the Subject's future performance is very much depend on its marketing strategies in order to retain its position in the market. 

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)

ARTMATRIX TECHNOLOGY SDN. BHD.

Financial Year End	2013-06-30	2012-06-30	2011-06-30	2010-06-30	2009-06-30
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	SUMMARY	SUMMARY	SUMMARY
Currency	MYR	MYR	MYR	MYR	MYR
TURNOVER	31,230,577	41,094,246	51,328,998	31,865,719	25,194,848
	----------------	----------------	----------------	----------------	----------------
Total Turnover	31,230,577	41,094,246	51,328,998	31,865,719	25,194,848
Costs of Goods Sold	(20,210,033)	(27,956,794)	-	-	-
	----------------	----------------	----------------	----------------	----------------
Gross Profit	11,020,544	13,137,452	-	-	-
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	4,841,979	5,040,318	9,987,799	4,109,852	4,586,259
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	4,841,979	5,040,318	9,987,799	4,109,852	4,586,259
Taxation	241,252	(1,073,825)	(23,909)	(55,390)	(25,860)
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	5,083,231	3,966,493	9,963,890	4,054,462	4,560,399
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	30,440,789	28,474,296	19,510,406	16,455,944	12,895,545
	----------------	----------------	----------------	----------------	----------------
As restated	30,440,789	28,474,296	19,510,406	16,455,944	12,895,545
	----------------	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	35,524,020	32,440,789	29,474,296	20,510,406	17,455,944
TRANSFER TO RESERVES - General	18,103	-	-	-	-
DIVIDENDS - Ordinary (paid & proposed)	(2,000,000)	(2,000,000)	(1,000,000)	(1,000,000)	(1,000,000)
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	33,542,123	30,440,789	28,474,296	19,510,406	16,455,944
	=============	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Others	531,364	598,681	-	-	-
	----------------	----------------	----------------	----------------	----------------
	531,364	598,681	-	-	-
	=============	=============

BALANCE SHEET

ARTMATRIX TECHNOLOGY SDN. BHD.

ASSETS EMPLOYED:
FIXED ASSETS	15,832,778	15,988,909	12,853,152	1,519,049	1,671,594
LONG TERM INVESTMENTS/OTHER ASSETS
TOTAL LONG TERM INVESTMENTS/OTHER ASSETS	-	-	511,007	104,557	360,044
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	15,832,778	15,988,909	13,364,159	1,623,606	2,031,638
CURRENT ASSETS
Stocks	1,951,843	1,695,853	-	-	-
Trade debtors	10,207,508	14,508,284	-	-	-
Other debtors, deposits & prepayments	409,417	447,198	-	-	-
Short term deposits	17,772,251	14,766,333	-	-	-
Amount due from associated companies	208,443	208,443	-	-	-
Cash & bank balances	3,309,905	4,557,061	-	-	-
Others	74,631	42,995	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	33,933,998	36,226,167	37,350,202	27,958,229	22,223,830
	----------------	----------------	----------------	----------------	----------------
TOTAL ASSET	49,766,776	52,215,076	50,714,361	29,581,835	24,255,468
	=============	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	4,149,066	5,633,868	-	-	-
Other creditors & accruals	1,739,358	2,047,031	-	-	-
Hire purchase & lease creditors	90,856	203,176	-	-	-
Bank overdraft	-	47,763	-	-	-
Short term borrowings/Term loans	486,810	454,238	-	-	-
Other borrowings	63,470	962,943	-	-	-
Bill & acceptances payable	551,000	1,844,000	-	-	-
Provision for taxation	122,500	1,032,494	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	7,203,060	12,225,513	12,167,632	8,093,286	6,219,340
	----------------	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	26,730,938	24,000,654	25,182,570	19,864,943	16,004,490
	----------------	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	42,563,716	39,989,563	38,546,729	21,488,549	18,036,128
	=============	=============	=============	=============	=============
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
RESERVES
Share premium	-	-	2,642	6,002	1,808
Exchange equalisation/fluctuation reserve	-	18,103	-	-	-
Retained profit/(loss) carried forward	33,542,123	30,440,789	28,474,296	19,510,406	16,455,944
	----------------	----------------	----------------	----------------	----------------
TOTAL RESERVES	33,542,123	30,458,892	28,476,938	19,516,408	16,457,752
	----------------	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	34,542,123	31,458,892	29,476,938	20,516,408	17,457,752
LONG TERM LIABILITIES
Long term loans	7,926,495	8,422,017	-	-	-
Hire purchase creditors	7,798	98,654	-	-	-
Deferred taxation	87,300	10,000	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	8,021,593	8,530,671	9,069,791	972,141	578,376
	----------------	----------------	----------------	----------------	----------------
	42,563,716	39,989,563	38,546,729	21,488,549	18,036,128
	=============	=============	=============	=============	=============

FINANCIAL RATIO

ARTMATRIX TECHNOLOGY SDN. BHD.

TYPES OF FUNDS
Cash	21,082,156	19,323,394	-	-	-
Net Liquid Funds	20,531,156	17,431,631	-	-	-
Net Liquid Assets	24,779,095	22,304,801	25,182,570	19,864,943	16,004,490
Net Current Assets/(Liabilities)	26,730,938	24,000,654	25,182,570	19,864,943	16,004,490
Net Tangible Assets	42,563,716	39,989,563	38,546,729	21,488,549	18,036,128
Net Monetary Assets	16,757,502	13,774,130	16,112,779	18,892,802	15,426,114
BALANCE SHEET ITEMS
Total Borrowings	9,126,429	12,032,791	-	-	-
Total Liabilities	15,224,653	20,756,184	21,237,423	9,065,427	6,797,716
Total Assets	49,766,776	52,215,076	50,714,361	29,581,835	24,255,468
Net Assets	42,563,716	39,989,563	38,546,729	21,488,549	18,036,128
Net Assets Backing	34,542,123	31,458,892	29,476,938	20,516,408	17,457,752
Shareholders' Funds	34,542,123	31,458,892	29,476,938	20,516,408	17,457,752
Total Share Capital	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000
Total Reserves	33,542,123	30,458,892	28,476,938	19,516,408	16,457,752
LIQUIDITY (Times)
Cash Ratio	2.93	1.58	-	-	-
Liquid Ratio	4.44	2.82	-	-	-
Current Ratio	4.71	2.96	3.07	3.45	3.57
WORKING CAPITAL CONTROL (Days)
Stock Ratio	23	15	-	-	-
Debtors Ratio	119	129	-	-	-
Creditors Ratio	75	74	-	-	-
SOLVENCY RATIOS (Times)
Gearing Ratio	0.26	0.38	-	-	-
Liabilities Ratio	0.44	0.66	0.72	0.44	0.39
Times Interest Earned Ratio	10.11	9.42	-	-	-
Assets Backing Ratio	42.56	39.99	38.55	21.49	18.04
PERFORMANCE RATIO (%)
Operating Profit Margin	15.50	12.27	19.46	12.90	18.20
Net Profit Margin	16.28	9.65	19.41	12.72	18.10
Return On Net Assets	12.62	14.10	25.91	19.13	25.43
Return On Capital Employed	12.60	14.01	25.91	19.13	25.43
Return On Shareholders' Funds/Equity	14.72	12.61	33.80	19.76	26.12
Dividend Pay Out Ratio (Times)	0.39	0.50	0.10	0.25	0.22
NOTES TO ACCOUNTS
Contingent Liabilities	0	0

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.62.45
UK Pound	1	Rs.102.00
Euro	1	Rs.84.35

INFORMATION DETAILS

Report Prepared by :

MNL

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.