MIRA INFORM REPORT

Report Date :

11.02.2014

IDENTIFICATION DETAILS

Name :	PROMACOL STEEL INDUSTRY SDN. BHD.

Registered Office :	58-02-1, Lorong Batu Nilam 4A, Bandar Bukit Tinggi, 41200 Klang, Selangor

Country :	Malaysia

Financials (as on) :	31.12.2012

Date of Incorporation :	26.10.2004

Com. Reg. No.:	670636-X

Legal Form :	Private Limited

Line of Business :	Trading In Metal Products Include Stainless Steel and Related Activities

No. of Employees :	15 [2014]

RATING & COMMENTS

MIRA’s Rating :

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

Status :	Moderate
Payment Behaviour :	Slow but correct
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, 2013

Country Name

Previous Rating

(30.06.2013)

Current Rating

(30.09.2013)

Malaysia

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

EXECUTIVE SUMMARY

REGISTRATION NO.

670636-X

COMPANY NAME

PROMACOL STEEL INDUSTRY SDN. BHD.

FORMER NAME

N/A

INCORPORATION DATE

26/10/2004

COMPANY STATUS

EXIST

LEGAL FORM

PRIVATE LIMITED

LISTED STATUS

REGISTERED ADDRESS

58-02-1, LORONG BATU NILAM 4A, BANDAR BUKIT TINGGI, 41200 KLANG, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

NO 7-2, 2ND FLOOR, JALAN KASUARINA 7/KS, 7 BANDAR BOTANIC , 41200 KLANG, SELANGOR, MALAYSIA.

TEL.NO.

03-33252889

FAX.NO.

03-33252890

CONTACT PERSON

LOW HOCK LAI ( PRESIDENT )

INDUSTRY CODE

46621

PRINCIPAL ACTIVITY

TRADING IN METAL PRODUCTS INCLUDE STAINLESS STEEL AND RELATED ACTIVITIES

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 5,000,000.00 DIVIDED INTO
ORDINARY SHARES 5,000,000 CASH OF MYR 1.00 EACH.

SALES

MYR 70,272,737 [2012]

NET WORTH

MYR 7,073,536 [2012]

STAFF STRENGTH

15 [2014]

BANKER (S)

RHB BANK BHD
AMBANK (M) 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 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) trading in metal products include stainless steel and related activities.

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 5,000,000.00	MYR 5,000,000.00

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

Name	Address	IC/PP/Loc No	Shareholding	(%)
HOU, CHING-PIN +	55, JALAN SERUNAI 4, TAMAN KLANG JAYA, 41200 KLANG, SELANGOR, MALAYSIA.	302630553	2,000,000.00	40.00
MR. LOW HOCK LAI +	55, JALAN SERUNAI 4, TAMAN KLANG JAYA, 41200 KLANG, SELANGOR, MALAYSIA.	800620-10-5651	1,500,000.00	30.00
MR. LOW HOCK WEI	55, JALAN SERUNAI 4, TAMAN KLANG JAYA, 41200 KLANG, SELANGOR, MALAYSIA.	760709-10-5021 A3306011	1,500,000.00	30.00
			---------------	------
			5,000,000.00	100.00
			============	=====

+ Also Director

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MR. WONG TAI KHENG
Address	:	11, JALAN KERANG, OFF JALAN DATO DOLLAH, 41100 KLANG, SELANGOR, MALAYSIA.

New IC No	:	800727-10-5627
Date of Birth	:	27/07/1980

Nationality	:	MALAYSIAN
Date of Appointment	:	27/07/2012

DIRECTOR 2

Name Of Subject	:	MR. KHOO KENN NEE
Address	:	6, SOLOK RENGAS SATU, TAMAN SELATAN, 41200 KLANG, SELANGOR, MALAYSIA.

New IC No	:	801225-10-5541
Date of Birth	:	25/12/1980

Nationality	:	MALAYSIAN
Date of Appointment	:	27/07/2012

DIRECTOR 3

Name Of Subject	:	MR. LOW HOCK LAI
Address	:	55, JALAN SERUNAI 4, TAMAN KLANG JAYA, 41200 KLANG, SELANGOR, MALAYSIA.

New IC No	:	800620-10-5651
Date of Birth	:	20/06/1980

Nationality	:	MALAYSIAN
Date of Appointment	:	21/03/2006

DIRECTOR 4

Name Of Subject	:	HOU, CHING-PIN
Address	:	55, JALAN SERUNAI 4, TAMAN KLANG JAYA, 41200 KLANG, SELANGOR, MALAYSIA.
IC / PP No	:	302630553




Date of Appointment	:	17/04/2007

MANAGEMENT

1)	Name of Subject	:	LOW HOCK LAI
	Position	:	PRESIDENT

AUDITOR

Auditor	:	SKL & CO.
Auditor' Address	:	40A, JALAN SS21/39, DAMANSARA UTAMA, 47400 PETALING JAYA, SELANGOR, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MR. LAW HOE YEN
	IC / PP No	:	A2854896
	New IC No	:	740904-08-6737
	Address	:	14, JALAN KIARA 4/KS6, BANDAR BOTANIC, 41200 KLANG, SELANGOR, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)	Name	:	RHB BANK BHD

2)	Name	:	AMBANK (M) BHD

ENCUMBRANCE (S)

Charge No	Creation Date	Charge Description	Chargee Name	Total Charge	Status
1	19/02/2009	DEBENTUREN	RHB BANK BERHAD	-	Satisfied
2	08/08/2012	N/A	AMBANK (M) BHD	-	Unsatisfied

LEGAL 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 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

[

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]

CLIENTELE

Local	:	YES	Percentage	:	100%
Domestic Markets	:	MALAYSIA
Overseas	:	NO

Credit Term	:	30 - 60 DAYS

Payment Mode	:	CHEQUES TELEGRAPHIC TRANSFER (TT)
Type of Customer	:	CONSTRUCTION INDUSTRY,DEALERS

OPERATIONS

Goods Traded

STAINLESS STEEL PRODUCTS

Services

CUTTING AND PACKING

Competitor(s)

KEJORA TEGUH SDN BHD

METROD (OFHC) SDN BHD

ORIENTAL SHEET PILING SDN BHD

PMS MARKETING SDN BHD

STAR SHINE MARKETING SDN BHD

Ownership of premises

LEASED/RENTED

Total Number of Employees:
YEAR	2014	2013	2012

GROUP	N/A	N/A	N/A
COMPANY	15	15	13

Branch

Other Information:

The Subject is principally engaged in the (as a / as an) trading in metal products include stainless steel and related activities.

The Subject supplies stainless steel products such as bars, plates, coils and many more.

The products are used in the construction industry.

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client	:	N/A
Current Telephone Number	:	03-33252889
Match	:	N/A

Address Provided by Client	:	NO 7-2, 2ND FLOOR, JALAN KASUARINA 7 BANDAR BOTANIC 41200 KLANG SELANGOR DARUL EHSAN
Current Address	:	NO 7-2, 2ND FLOOR, JALAN KASUARINA 7/KS, 7 BANDAR BOTANIC , 41200 KLANG, SELANGOR, MALAYSIA.
Match	:	NO

Latest Financial Accounts	:	YES

Other Investigations

On 10th February 2014 we contacted one of the staff from the Subject and she provided some information.

The address provided is incomplete.

FINANCIAL ANALYSIS

Profitability
Turnover	:	Increased	[	2008 - 2012	]
Profit/(Loss) Before Tax	:	Decreased	[	2008 - 2012	]
Return on Shareholder Funds	:	Unfavourable	[	2.01%	]
Return on Net Assets	:	Unfavourable	[	4.98%	]

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 profit fell sharply because of the high operating costs incurred. The unfavourable return on shareholders' funds could indicate that the Subject was inefficient in utilising its assets to generate returns.

Working Capital Control
Stock Ratio	:	Favourable	[	20 Days	]
Debtor Ratio	:	Favourable	[	51 Days	]
Creditors Ratio	:	Favourable	[	3 Days	]

The Subject'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 Subject. 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	[	1.23 Times	]
Current Ratio	:	Unfavourable	[	1.58 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	[	11.48 Times	]
Gearing Ratio	:	Unfavourable	[	1.17 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 highly geared, thus it had a high financial risk. The Subject was dependent on loans to finance its business needs. In times of economic downturn and / or high interest rate, the Subject will become less profitable and competitive than other firms in the same industry, which are lowly geared. This is because the Subject has to service the interest and to repay the loan, which will erode part of its profits. The profits will fluctuate depending on the Subject's turnover and the interest it needs to pay.


Overall Assessment :
Although the Subject's turnover had increased, its profits had declined over the same corresponding period. This could be due to the stiffer market competition and / or higher operating costs which lowered the Subject's profit margin. 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'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 Subject : 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

INDUSTRY ANALYSIS

MSIC CODE
46621 : Wholesale of ferrous and non-ferrous metal ores and metals

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 2004, the Subject is a Private Limited company, focusing on trading in metal products include stainless steel and related activities. Having been in the industry for a decade, the Subject should have built up its reputation and image in the market. 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 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 15 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

Financially, the Subject registered a higher turnover compared to previous year. However, its profits showed a reverse trend. The lower profit achieved was a result of higher operating cost and increased competition. The Subject has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. The high gearing ratio clearly implied that the Subject was supported by more debt than equity. However, 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. Given a positive net worth standing at MYR 7,073,536, the Subject should be able to maintain its business in the near terms.

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 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 normally.

PROFIT AND LOSS ACCOUNT

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

Financial Year End	2012-12-31	2011-12-31	2010-12-31	2009-12-31	2008-12-31
Months	12	12	12	12	12
Consolidated Account	Company	Company	Company	Company	Company
Audited Account	YES	YES	YES	YES	YES
Unqualified Auditor's Report (Clean Opinion)	YES	YES	YES	YES	YES
Financial Type	FULL	FULL	FULL	FULL	SUMMARY
Currency	MYR	MYR	MYR	MYR	MYR

TURNOVER	70,272,737	66,741,094	23,753,074	19,156,619	17,814,650
Other Income	241,650	203,628	-	-	-
	----------------	----------------	----------------	----------------	----------------
Total Turnover	70,514,387	66,944,722	23,753,074	19,156,619	17,814,650
Costs of Goods Sold	(68,451,192)	(65,307,834)	(22,413,511)	(17,873,483)	-
	----------------	----------------	----------------	----------------	----------------
Gross Profit	2,063,195	1,636,888	1,339,563	1,283,136	-
	----------------	----------------	----------------	----------------	----------------

PROFIT/(LOSS) FROM OPERATIONS	336,188	485,396	46,859	139,797	114,572
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	336,188	485,396	46,859	139,797	114,572
Taxation	(193,920)	(150,404)	(42,506)	(67,745)	(51,532)
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	142,268	334,992	4,353	72,052	63,040
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	1,931,268	1,596,276	1,591,923	1,519,871	1,456,831
	----------------	----------------	----------------	----------------	----------------
As restated	1,931,268	1,596,276	1,591,923	1,519,871	1,456,831
	----------------	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	2,073,536	1,931,268	1,596,276	1,591,923	1,519,871
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	2,073,536	1,931,268	1,596,276	1,591,923	1,519,871
	=============	=============	=============	=============	=============

INTEREST EXPENSE (as per notes to P&L)
Bank overdraft	28,770	15,085	-	2,464	-
Hire purchase	3,297	1,872	468	-	-
	----------------	----------------	----------------	----------------	----------------
	32,067	16,957	468	2,464	-
	=============	=============	=============	=============

BALANCE SHEET

ASSETS EMPLOYED:
FIXED ASSETS	876,807	466,234	193,798	450,115	694,333

	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	876,807	466,234	193,798	450,115	694,333

CURRENT ASSETS
Stocks	3,921,385	3,016,543	1,202,058	3,618,014	-
Trade debtors	9,837,548	7,440,712	6,509,992	10,407,164	-
Other debtors, deposits & prepayments	2,358,193	3,575,205	5,808,334	5,108,172	-
Short term deposits	1,113,934	100,000	-	-	-
Amount due from director	-	73,971	-	11,294	-
Cash & bank balances	155,934	446,772	151,170	200,428	-
Others	390,790	374,211	447,772	398,880	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	17,777,784	15,027,414	14,119,326	19,743,952	13,576,058
	----------------	----------------	----------------	----------------	----------------
TOTAL ASSET	18,654,591	15,493,648	14,313,124	20,194,067	14,270,391
	=============	=============	=============	=============	=============

CURRENT LIABILITIES
Trade creditors	632,627	3,102,132	1,117,064	4,372,049	-
Other creditors & accruals	1,740,439	487,074	77,247	200,111	-
Hire purchase & lease creditors	58,600	8,494	17,340	-	-
Bank overdraft	1,034,238	-	904,392	886,070	-
Bill & acceptances payable	6,993,000	4,918,000	3,159,000	2,395,000	-
Amounts owing to director	797,405	-	2,409,817	5,666,817	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	11,256,309	8,515,700	7,684,860	13,520,047	7,750,520
	----------------	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	6,521,475	6,511,714	6,434,466	6,223,905	5,825,538
	----------------	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	7,398,282	6,977,948	6,628,264	6,674,020	6,519,871
	=============	=============	=============	=============	=============

SHARE CAPITAL
Ordinary share capital	5,000,000	5,000,000	5,000,000	5,000,000	5,000,000
	----------------	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	5,000,000	5,000,000	5,000,000	5,000,000	5,000,000

RESERVES
Retained profit/(loss) carried forward	2,073,536	1,931,268	1,596,276	1,591,923	1,519,871
	----------------	----------------	----------------	----------------	----------------
TOTAL RESERVES	2,073,536	1,931,268	1,596,276	1,591,923	1,519,871

	----------------	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	7,073,536	6,931,268	6,596,276	6,591,923	6,519,871

LONG TERM LIABILITIES
Hire purchase creditors	217,567	-	8,494	-	-
Deferred taxation	107,179	46,680	23,494	82,097	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	324,746	46,680	31,988	82,097	-
	----------------	----------------	----------------	----------------	----------------
	7,398,282	6,977,948	6,628,264	6,674,020	6,519,871
	=============	=============	=============	=============	=============

FINANCIAL RATIO

TYPES OF FUNDS
Cash	1,269,868	546,772	151,170	200,428	-
Net Liquid Funds	(6,757,370)	(4,371,228)	(3,912,222)	(3,080,642)	-
Net Liquid Assets	2,600,090	3,495,171	5,232,408	2,605,891	5,825,538
Net Current Assets/(Liabilities)	6,521,475	6,511,714	6,434,466	6,223,905	5,825,538
Net Tangible Assets	7,398,282	6,977,948	6,628,264	6,674,020	6,519,871
Net Monetary Assets	2,275,344	3,448,491	5,200,420	2,523,794	5,825,538
BALANCE SHEET ITEMS
Total Borrowings	8,303,405	4,926,494	4,089,226	3,281,070	-
Total Liabilities	11,581,055	8,562,380	7,716,848	13,602,144	7,750,520
Total Assets	18,654,591	15,493,648	14,313,124	20,194,067	14,270,391
Net Assets	7,398,282	6,977,948	6,628,264	6,674,020	6,519,871
Net Assets Backing	7,073,536	6,931,268	6,596,276	6,591,923	6,519,871
Shareholders' Funds	7,073,536	6,931,268	6,596,276	6,591,923	6,519,871
Total Share Capital	5,000,000	5,000,000	5,000,000	5,000,000	5,000,000
Total Reserves	2,073,536	1,931,268	1,596,276	1,591,923	1,519,871
LIQUIDITY (Times)
Cash Ratio	0.11	0.06	0.02	0.01	-
Liquid Ratio	1.23	1.41	1.68	1.19	-
Current Ratio	1.58	1.76	1.84	1.46	1.75
WORKING CAPITAL CONTROL (Days)
Stock Ratio	20	16	18	69	-
Debtors Ratio	51	41	100	198	-
Creditors Ratio	3	17	18	89	-
SOLVENCY RATIOS (Times)
Gearing Ratio	1.17	0.71	0.62	0.50	-
Liabilities Ratio	1.64	1.24	1.17	2.06	1.19
Times Interest Earned Ratio	11.48	29.63	101.13	57.74	-
Assets Backing Ratio	1.48	1.40	1.33	1.33	1.30
PERFORMANCE RATIO (%)
Operating Profit Margin	0.48	0.73	0.20	0.73	0.64
Net Profit Margin	0.20	0.50	0.02	0.38	0.35
Return On Net Assets	4.98	7.20	0.71	2.13	1.76
Return On Capital Employed	4.34	7.19	0.63	1.88	1.76
Return On Shareholders' Funds/Equity	2.01	4.83	0.07	1.09	0.97
Dividend Pay Out Ratio (Times)	0.00	0.00	0.00	0.00	-
NOTES TO ACCOUNTS
Contingent Liabilities	0	0	0	0

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.62.19
UK Pound	1	Rs.102.14
Euro	1	Rs.84.74

INFORMATION DETAILS

Report Prepared by :

NNA

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.