MIRA INFORM REPORT

Report Date :

24.01.2014

IDENTIFICATION DETAILS

Name :	CAI WANG INDUSTRIAL PARTS (KL) SDN. BHD.
Registered Office :	568-3-53 , Kompleks Mutiara, 3 1/2 Mile Jalan Ipoh, (3rd Floor), 51200 Kuala Lumpur, Wilayah Persekutuan
Country :	Malaysia
Financials (as on) :	31.12.2012
Date of Incorporation :	23.09.2004
Com. Reg. No.:	666938-H
Legal Form :	Private Limited Company
Line of Business :	· Dealer in new & used motor vehicle spare parts, heavy equipment & industrial parts Subject sells spare parts for heavy vehicles and lorries. Subject sells a wide range of spare parts are for end-users and transport companies. Subject sells spare parts for MERCEDEZ, VOLVO & HINO.
No. of Employees :	15 (2014)

RATING & COMMENTS

MIRA’s Rating :

B

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	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.

:

666938-H

COMPANY NAME

:

CAI WANG INDUSTRIAL PARTS (KL) SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

23/09/2004

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

568-3-53 , KOMPLEKS MUTIARA, 3 1/2 MILE JALAN IPOH, (3RD FLOOR), 51200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

27 JALAN 2/57D, SEGAMBUT, 51200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

TEL.NO.

:

03-62502525

FAX.NO.

:

03-62504466

CONTACT PERSON

:

SOH CHWEE KUAN ( DIRECTOR )

INDUSTRY CODE

:

453

PRINCIPAL ACTIVITY

:

DEALER IN NEW & USED MOTOR VEHICLE SPARE PARTS, HEAVY EQUIPMENT & INDUSTRIAL PARTS

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 800,000.00 DIVIDED INTO 
ORDINARY SHARES 2 CASH AND 799,998 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 6,468,238 [2012]

NET WORTH

:

MYR 1,566,442 [2012]

STAFF STRENGTH

:

15 [2014]

BANKER (S)

:

PUBLIC BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

POOR

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

HIGH

CURRENCY EXPOSURE

:

N/A

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) dealer in new & used motor vehicle spare parts, heavy equipment & industrial parts.

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

Share Capital History

Date	Authorised Shared Capital	Issue & Paid Up Capital
30/06/2012	MYR 1,000,000.00	MYR 800,000.00

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

Name	Address	IC/PP/Loc No	Shareholding	(%)
MR. LEE CHAY ONG +	52-3A, JALAN 10/40, TAMAN PUSAT KEPONG, 52100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.	630824-01-5341 7101738	480,000.00	60.00
MS. SOH CHWEE KUAN +	1591, JALAN TIMUR 11, JINJANG UTARA, 52000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.	680701-10-6740 A1006981	80,000.00	10.00
DAGDAG ARMANDO NGO	P, GREGORIO ST, LINGUNAN, VALENZUELA CITY, 1115, PHILIPPINES.	MM789969	240,000.00	30.00
			---------------	------
			800,000.00	100.00
			============	=====

+ Also Director

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MS. SOH CHWEE KUAN
Address	:	1591, JALAN TIMUR 11, JINJANG UTARA, 52000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	A1006981
New IC No	:	680701-10-6740
Date of Birth	:	01/07/1968
Nationality	:	MALAYSIAN
Date of Appointment	:	23/09/2004

DIRECTOR 2

Name Of Subject	:	MR. LEE CHAY ONG
Address	:	52-3A, JALAN 10/40, TAMAN PUSAT KEPONG, 52100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	7101738
New IC No	:	630824-01-5341
Date of Birth	:	24/08/1963
Nationality	:	MALAYSIAN
Date of Appointment	:	23/09/2004

MANAGEMENT

1)	Name of Subject	:	SOH CHWEE KUAN
	Position	:	DIRECTOR

AUDITOR

Auditor	:	YC LEE & CO.
Auditor' Address	:	5A, JALAN 16/155C, BANDAR BUKIT JALIL, 57000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MS. YONG PECK MUI
	IC / PP No	:	5942813
	New IC No	:	600606-10-6344
	Address	:	A1-27 SEKSYEN 1, JALAN 1/18, BANDAR TEKNOLOGI KAJANG, 43500 SEMENYIH, SELANGOR, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

PUBLIC BANK BHD

ENCUMBRANCE (S)

Charge No	Creation Date	Charge Description	Chargee Name	Total Charge	Status
1	16/05/2005	FACILITIES AGREEMENT & FIRST PARTY LEGAL CHARGE	PUBLIC BANK BHD	MYR 650,000.00	Unsatisfied
2	17/04/2006	FACILITIES AGREEMENT & FIRST PARTY LEGAL CHARGE	PUBLIC BANK BHD	MYR 350,000.00	Unsatisfied
3	27/09/2006	FACILITIES AGREEMENT & FIRST PARTY LEGAL CHARGE	PUBLIC BANK BERHAD	MYR 200,000.00	Unsatisfied
4	25/09/2007	FACILITIES AGREEMENT & DEED OF ASSIGNMENT & POWER OF ATTORNEY	PUBLIC BANK BERHAD	-	Unsatisfied
5	20/02/2009	LETTER OF SET-OFF	PUBLIC BANK BHD	-	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	:	N/A
Overseas	:	N/A

The SC refused to disclose its suppliers. 

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	[	X	]

CLIENTELE

Local	:	YES	Percentage	:	100%
Domestic Markets	:	MALAYSIA
Overseas	:	NO
Credit Term	:	30 - 60 DAYS
Payment Mode	:	CHEQUES

The Subject sells its products to end-users, walk-in customers as well as to the transport companies. 

OPERATIONS

Goods Traded

:

NEW & USED MOTOR VEHICLE SPARE PARTS, HEAVY EQUIPMENT & INDUSTRIAL PARTS

Total Number of Employees:
YEAR	2014	2013
GROUP	N/A	N/A
COMPANY	15	15

Branch

:

NO

Other Information:

The Subject is principally engaged in the (as a / as an) dealer in new & used motor vehicle spare parts, heavy equipment & industrial parts. 

The Subject sells spare parts for heavy vehicles and lorries.

The Subject sells a wide range of spare parts are for end-users and transport companies.

The Subject sells spare parts for MERCEDEZ, VOLVO & HINO

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client	:	N/A
Current Telephone Number	:	03-62502525
Match	:	N/A
Address Provided by Client	:	NO.27 JALAN 2/57D SEGAMBUT 5120 KUALA LUMPUR
Current Address	:	27 JALAN 2/57D, SEGAMBUT, 51200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, 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	[	2008 - 2012	]
Profit/(Loss) Before Tax	:	Decreased	[	2008 - 2012	]
Return on Shareholder Funds	:	Unfavourable	[	1.38%	]
Return on Net Assets	:	Acceptable	[	10.27%	]
The Subject's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The dip in profit could be due to the stiff market competition which reduced the Subject's profit margin. 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	:	Unfavourable	[	147 Days	]
Debtor Ratio	:	Unfavourable	[	123 Days	]
Creditors Ratio	:	Unfavourable	[	153 Days	]
The Subject could be incurring higher holding cost. As its capital was tied up in stocks, it could face liquidity problems. 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	:	Unfavourable	[	0.56 Times	]
Current Ratio	:	Unfavourable	[	1.07 Times	]
A low liquid ratio means that the Subject may be facing working capital deficiency. If the Subject cannot obtain additional financing or injection of fresh capital, it may face difficulties in meeting its short term obligations.
Solvency
Interest Cover	:	Unfavourable	[	1.27 Times	]
Gearing Ratio	:	Unfavourable	[	2.30 Times	]
The Subject's interest cover was low. If its profits fall or when interest rate rises, it  may not be able to meet all its interest payment. The 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. Due to its weak liquidity position, the Subject will be faced with problems in meeting all its short term obligations if no short term loan is obtained or additional capital injected into the Subject. If there is a fall in the Subject's profit or any increase in interest rate, the Subject may not be able to generate sufficient cash-flow to service its interest. 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 : POOR

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
453 : Sale of motor vehicle parts and accessories
INDUSTRY :	MOTOR VECHICLE
The total industry volume (TIV) for year 2013 forecasted 640 000 units. This is an increase of 2.0% compared to the year 2012. Sales of passenger vehicles in the year 2013 forecasted increase by 2.0% to 563 000 units compared to 552 189 units at the year 2012. While sales of commercial vehicles in year 2013 forecasted to increase by 2.0% to 77 000 units compared to 75 564 units at the year 2012.
It is a big challenge for the TIV of year 2013 to create another high record. However, Malaysia's GPD growth is forecasted to be 5.6% in year 2013. This is driven by exports and domestic demand and is expected to give confidence in consumer sentiments. Besides, multiplier effects from the Economic Transformation Programme's (ETP) projects would give a further boost to the domestic economy and create greater demand for new vehicles.
According to the Malaysian Automotive Association (MAA), the implementation of the Bank Negara's guidelines on responsible financing practices from 1st January 2012 caused a slowdown in new vehicle purchase in first quarter 2012. However, the total industry volume (TIV) of the year 2012 surged to a historical high of 627,753 units which is an all time record achievement for the industry. This record had overtaken the previous highest record of 605,156 units achieved in 2010. It had also outperformed the MAA's TIV forecast of 615,000 units. The main contributors to the growth were led by Perodua and Proton, followed by Toyota, Honda and Nissan.
The total registration of new passenger vehicles in year 2012 reached 552,189 units compare with 535,113 units in year 2011. Which had bring an increase of 3.2% (17,076 units) of growth rate in the registration of passenger vehicles. While the total registration for commercial vehicles n 2012 was 75,564 units which is an increase of 6.2% (10,554 units). Besides, the production of new vehicles also recorded an increase of 6.8% (36,105 units) in year 2012. According to the president of Malaysian Automotive Association (MAA), the record new vehicle sales in 2012 was due to factors such as strong economic growth, the implementation of infrastructure projects under the Economic Transformation Programme (ETP), increased consumer spending and consumption due to stable employment and rising disposable income, introduction of new models at competitive prices as well as aggressive sales campaigns by car companies.
OVERALL INDUSTRY OUTLOOK : Marginal Growth

CREDIT RISK EVALUATION & RECOMMENDATION

Incorporated in 2004, the Subject is a Private Limited company, focusing on dealer in new & used motor vehicle spare parts, heavy equipment & industrial parts. 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. Presently, issued and paid up capital of the Subject stand at MYR800,000. 

Investigation revealed that the Subject concentrates only on the local market. This narrow market segment has placed the Subject at high business risk and limits its business expansion opportunities. 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. 

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. Due to its weak liquidity position, the Subject may face working capital deficiency in meeting its short term financial obligations if no fresh capital are injected into the Subject. The high gearing ratio clearly implied that the Subject was supported by more debt than equity. Thus, the Subject is exposed to high financial risk. 

The poor payment habit may affect the goodwill between the Subject and its suppliers and the Subject may inadvertently have to pay more for its future supplies. 

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. 

In view of the above, we recommend credit be granted to the Subject with close monitoring.

PROFIT AND LOSS ACCOUNT

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

CAI WANG INDUSTRIAL PARTS (KL) SDN. BHD.

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	SUMMARY	SUMMARY
Currency	MYR	MYR	MYR	MYR	MYR
TURNOVER	6,468,238	5,330,922	4,613,484	5,024,773	6,402,827
Other Income	113,272	109,079	110,070	-	-
	----------------	----------------	----------------	----------------	----------------
Total Turnover	6,581,510	5,440,001	4,723,554	5,024,773	6,402,827
Costs of Goods Sold	(5,248,101)	(4,169,725)	(3,498,864)	-	-
	----------------	----------------	----------------	----------------	----------------
Gross Profit	1,333,409	1,270,276	1,224,690	-	-
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	60,978	80,845	85,851	96,762	120,010
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	60,978	80,845	85,851	96,762	120,010
Taxation	(39,293)	(23,360)	(39,057)	(28,686)	(29,338)
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	21,685	57,485	46,794	68,076	90,672
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	744,757	687,272	640,478	572,402	481,730
	----------------	----------------	----------------	----------------	----------------
As restated	744,757	687,272	640,478	572,402	481,730
	----------------	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	766,442	744,757	687,272	640,478	572,402
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	766,442	744,757	687,272	640,478	572,402
	=============	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Bank overdraft	96,503	92,099	62,636	-	-
Hire purchase	3,537	5,200	5,119	-	-
Term loan / Borrowing	89,251	62,116	68,401	-	-
Trust receipts	35,404	38,932	25,923	-	-
Others	473	475	493	-	-
	----------------	----------------	----------------	----------------	----------------
	225,168	198,822	162,572	-	-
	=============	=============	=============

BALANCE SHEET

CAI WANG INDUSTRIAL PARTS (KL) SDN. BHD.

ASSETS EMPLOYED:
FIXED ASSETS	2,428,728	2,414,986	2,592,556	2,546,249	2,625,889
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	2,428,728	2,414,986	2,592,556	2,546,249	2,625,889
CURRENT ASSETS
Stocks	2,598,079	1,952,810	1,800,721	-	-
Trade debtors	2,181,433	2,096,387	2,192,540	-	-
Other debtors, deposits & prepayments	356,496	105,180	419,073	-	-
Short term deposits	332,513	322,696	-	-	-
Cash & bank balances	23,876	227,437	29,321	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	5,492,397	4,704,510	4,441,655	4,207,556	4,126,926
	----------------	----------------	----------------	----------------	----------------
TOTAL ASSET	7,921,125	7,119,496	7,034,211	6,753,805	6,752,815
	=============	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	2,199,830	1,159,644	855,349	-	-
Other creditors & accruals	54,610	147,466	762,250	-	-
Hire purchase & lease creditors	28,368	13,340	40,428	-	-
Bank overdraft	-	-	1,418,621	-	-
Short term borrowings/Term loans	-	-	152,003	-	-
Other borrowings	2,406,380	2,712,602	-	-	-
Amounts owing to director	415,360	343,744	576,300	-	-
Provision for taxation	30,409	31,684	41,642	-	-
Other liabilities	-	-	523,193	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	5,134,957	4,408,480	4,369,786	4,049,213	4,135,242
	----------------	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	357,440	296,030	71,869	158,343	(8,316)
	----------------	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	2,786,168	2,711,016	2,664,425	2,704,592	2,617,573
	=============	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	800,000	800,000	800,000	800,000	800,000
	----------------	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	800,000	800,000	800,000	800,000	800,000
RESERVES
Retained profit/(loss) carried forward	766,442	744,757	687,272	640,478	572,402
	----------------	----------------	----------------	----------------	----------------
TOTAL RESERVES	766,442	744,757	687,272	640,478	572,402
	----------------	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	1,566,442	1,544,757	1,487,272	1,440,478	1,372,402
LONG TERM LIABILITIES
Long term loans	-	-	1,033,920	-	-
Other long term borrowings	1,082,407	1,095,852	-	-	-
Hire purchase creditors	83,200	25,172	89,925	-	-
Deferred taxation	54,119	45,235	53,308	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	1,219,726	1,166,259	1,177,153	1,264,114	1,245,171
	----------------	----------------	----------------	----------------	----------------
	2,786,168	2,711,016	2,664,425	2,704,592	2,617,573
	=============	=============	=============	=============	=============

FINANCIAL RATIO

CAI WANG INDUSTRIAL PARTS (KL) SDN. BHD.

TYPES OF FUNDS
Cash	356,389	550,133	29,321	-	-
Net Liquid Funds	356,389	550,133	(1,389,300)	-	-
Net Liquid Assets	(2,240,639)	(1,656,780)	(1,728,852)	158,343	(8,316)
Net Current Assets/(Liabilities)	357,440	296,030	71,869	158,343	(8,316)
Net Tangible Assets	2,786,168	2,711,016	2,664,425	2,704,592	2,617,573
Net Monetary Assets	(3,460,365)	(2,823,039)	(2,906,005)	(1,105,771)	(1,253,487)
BALANCE SHEET ITEMS
Total Borrowings	3,600,355	3,846,966	2,734,897	-	-
Total Liabilities	6,354,683	5,574,739	5,546,939	5,313,327	5,380,413
Total Assets	7,921,125	7,119,496	7,034,211	6,753,805	6,752,815
Net Assets	2,786,168	2,711,016	2,664,425	2,704,592	2,617,573
Net Assets Backing	1,566,442	1,544,757	1,487,272	1,440,478	1,372,402
Shareholders' Funds	1,566,442	1,544,757	1,487,272	1,440,478	1,372,402
Total Share Capital	800,000	800,000	800,000	800,000	800,000
Total Reserves	766,442	744,757	687,272	640,478	572,402
LIQUIDITY (Times)
Cash Ratio	0.07	0.12	0.01	-	-
Liquid Ratio	0.56	0.62	0.60	-	-
Current Ratio	1.07	1.07	1.02	1.04	1.00
WORKING CAPITAL CONTROL (Days)
Stock Ratio	147	134	142	-	-
Debtors Ratio	123	144	173	-	-
Creditors Ratio	153	102	89	-	-
SOLVENCY RATIOS (Times)
Gearing Ratio	2.30	2.49	1.84	-	-
Liabilities Ratio	4.06	3.61	3.73	3.69	3.92
Times Interest Earned Ratio	1.27	1.41	1.53	-	-
Assets Backing Ratio	3.48	3.39	3.33	3.38	3.27
PERFORMANCE RATIO (%)
Operating Profit Margin	0.94	1.52	1.86	1.93	1.87
Net Profit Margin	0.34	1.08	1.01	1.35	1.42
Return On Net Assets	10.27	10.32	9.32	3.58	4.58
Return On Capital Employed	10.17	10.27	6.02	3.58	4.58
Return On Shareholders' Funds/Equity	1.38	3.72	3.15	4.73	6.61
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.61.99
UK Pound	1	Rs.102.67
Euro	1	Rs.83.98

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.