MIRA INFORM REPORT

Report Date :

24.01.2014

IDENTIFICATION DETAILS

Name :	SWEE ENG HUP (M) SDN. BHD.
Formerly Known As :	ALAT-ALAT GANTI KERETA SWEE ENG HUP (M) SDN BHD
Registered Office :	36-2, Jalan Usahawan 7, Off Jalan Kilang, Setapak, 53300 Kuala Lumpur, Wilayah Persekutuan
Country :	Malaysia
Financials (as on) :	30.06.2012
Date of Incorporation :	04.06.1987
Com. Reg. No.:	161825-X
Legal Form :	Private Limited
Line of Business :	Subject is engaged in the reconditioning automobile spare parts
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 – 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

EXECUTIVE SUMMARY

REGISTRATION NO.

:

161825-X

COMPANY NAME

:

SWEE ENG HUP (M) SDN. BHD.

FORMER NAME

:

ALAT-ALAT GANTI KERETA SWEE ENG HUP (M) SDN BHD (27/07/1987)

INCORPORATION DATE

:

04/06/1987

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

36-2, JALAN USAHAWAN 7, OFF JALAN KILANG, SETAPAK, 53300 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

25 & 27, JALAN 1/57D, SEGAMBUT, 51200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

TEL.NO.

:

03-62523439

FAX.NO.

:

03-62523584

CONTACT PERSON

:

SWEE BENG CHUAN ( DIRECTOR )

INDUSTRY CODE

:

45300

PRINCIPAL ACTIVITY

:

RECONDITIONING AUTOMOBILE SPARE PARTS

AUTHORISED CAPITAL

:

MYR 800,000.00 DIVIDED INTO
ORDINARY SHARE 800,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 500,000.00 DIVIDED INTO
ORDINARY SHARES 500,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 4,782,923 [2012]

NET WORTH

:

MYR 2,954,553 [2012]

STAFF STRENGTH

:

N/A

BANKER (S)

:

ALLIANCE BANK MALAYSIA BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

STRONG

PAYMENT

:

GOOD

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

MODERATE

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) reconditioning automobile spare parts.

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 800,000.00	MYR 500,000.00

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

Name	Address	IC/PP/Loc No	Shareholding	(%)
MR. SWEE BENG CHUAN +	5, JALAN JAMBU GAJUS 2, JINJANG SELATAN, 52000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.	550517-10-5451 4784000	166,667.00	33.33
MR. SWEE TEONG BOON +	5, JALAN JAMBU GAJUS 2, JINJANG SELATAN, 52000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.	570720-10-5543 5277111	166,667.00	33.33
MR. SWEE HOCK SAN +	5, JALAN JAMBU GAJUS 2, JINJANG SELATAN, 52000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.	530113-14-5141 4360506	166,666.00	33.33
			---------------	------
			500,000.00	100.00
			============	=====

+ Also Director

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MR. SWEE HOCK SAN
Address	:	5, JALAN JAMBU GAJUS 2, JINJANG SELATAN, 52000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	4360506
New IC No	:	530113-14-5141
Date of Birth	:	13/01/1953
Nationality	:	MALAYSIAN
Date of Appointment	:	18/06/1987

DIRECTOR 2

Name Of Subject	:	MR. SWEE BENG CHUAN
Address	:	5, JALAN JAMBU GAJUS 2, JINJANG SELATAN, 52000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	4784000
New IC No	:	550517-10-5451
Date of Birth	:	17/05/1955
Nationality	:	MALAYSIAN
Date of Appointment	:	04/06/1987

DIRECTOR 3

Name Of Subject	:	MR. SWEE TEONG BOON
Address	:	5, JALAN JAMBU GAJUS 2, JINJANG SELATAN, 52000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	5277111
New IC No	:	570720-10-5543
Date of Birth	:	20/07/1957
Nationality	:	MALAYSIAN CHINESE
Date of Appointment	:	04/06/1987

MANAGEMENT

1)	Name of Subject	:	SWEE BENG CHUAN
	Position	:	DIRECTOR

AUDITOR

Auditor	:	CHEAH & CO.
Auditor' Address	:	568-3-25 & 26, KOMPLEKS MUTIARA, BATU 3 1/2, JALAN IPOH, 3RD FLOOR, 51200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MS. YONG MEE YEE
	IC / PP No	:	A2481881
	New IC No	:	730411-14-5074
	Address	:	3-1-4 WAIZURI 1, JALAN 11/27A WANGSA MAJU SECTION 5, 53300 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

ALLIANCE BANK MALAYSIA BHD

ENCUMBRANCE (S)

Charge No	Creation Date	Charge Description	Chargee Name	Total Charge	Status
1	01/12/1987	DEPOSIT	HONGKONG BANK MALAYSIA BERHAD	$ 108,142.09	Unsatisfied
2	08/06/1989	CHARGE	HONGKONG BANK MALAYSIA BERHAD	MYR 1.00	Satisfied
3	16/05/1991	LOAN AGREEMENT & ASSIGNMENT	STANDARD CHARTERED BANK MALAYSIA BHD	$ 700,000.00	Unsatisfied
4	04/10/1993	LOAN AGREEMENT & ASSIGNMENT	THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD	MYR 196,000.00	Satisfied
5	02/04/1994	N/A	ALLIANCE BANK MALAYSIA BERHAD	MYR 300,000.00	Satisfied
6	10/05/1994	AGREEMENT	STANDARD CHARTERED BANK MALAYSIA BHD	$ 200,000.00	Unsatisfied
7	02/05/1995	N/A	HONGKONG BANK MALAYSIA BERHAD	MYR 196,000.00	Satisfied
8	26/12/1995	N/A	STANDARD CHARTERED BANK MALAYSIA	-	Satisfied
9	22/11/1996	N/A	HONGKONG BANK MALAYSIA BERHAD	MYR 200,000.00	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	:	N/A
Overseas	:	N/A

The Subject 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	[	X	]	Average 61-90 Days	[	]
Fair 91-120 Days	[	]	Poor >120 Days	[		]

CLIENTELE

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

OPERATIONS

Goods Traded

:

AUTOMATIVE SPARE PARTS

Branch

:

NO

Other Information:

The Subject is principally engaged in the (as a / as an) reconditioning automobile spare parts.

The Subject sells spare parts for cars and lorries.

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client	:	N/A
Current Telephone Number	:	03-62523439
Match	:	N/A
Address Provided by Client	:	NO 25-27 JALAN 1/57 DSESAMBUT 51200 KUALA LUMPUR
Current Address	:	25 & 27, JALAN 1/57D, SEGAMBUT, 51200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
Match	:	NO
Latest Financial Accounts	:	YES

Other Investigations

On 22nd January 2014 we contacted one of the staff from the Subject and she provided some information.

The address provided is incorrect.

The Subject refused to disclose its number of employees.

FINANCIAL ANALYSIS

Profitability
Turnover	:	Increased	[	2008 - 2012	]
Profit/(Loss) Before Tax	:	Decreased	[	2008 - 2012	]
Return on Shareholder Funds	:	Unfavourable	[	6.82%	]
Return on Net Assets	:	Unfavourable	[	9.27%	]
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	[	93 Days	]
Debtor Ratio	:	Unfavourable	[	148 Days	]
Creditors Ratio	:	Favourable	[	45 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 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	[	1.66 Times	]
Current Ratio	:	Favourable	[	2.54 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	[	13.66 Times	]
Gearing Ratio	:	Favourable	[	0.08 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 :
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 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

INDUSTRY ANALYSIS

MSIC CODE
45300 : Wholesale and retail sale of all kinds of parts, components, supplies, tools and accessories for motor vehicles
INDUSTRY :	MOTOR VECHICLE
The total industry volume (TIV) for year 2013 forcasted 640 000 units. This is an increase of 2.0% compared to the year 2012. Sales of passenger vehicles in the year 2013 forcasted increase by 2.0% to 563 000 units compared to 552 189 units at the year 2012. While sales of comercial vehicles in year 2013 forcasted 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 forcasted 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 implimentation of the Bank Negara's guidelines on responsible financing practices from 1st January 2012 coused 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 forcast 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 unts 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 1987, the Subject is a Private Limited company, focusing on reconditioning automobile spare parts. With over 2 decades of experience in the business, the Subject has fairly rich experiences in the business and has achieved a certain market share. We considered that the Subject’s business position in the market is much dependent on the efforts of its directors.

Over the years, the Subject should have build up its clientele base and received supports from its regular customers. Investigation revealed that the Subject's interest lies mostly in the local market. Thus, any adverse changes to the local economy might have a negative impact on the Subject's business performance. 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 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 2,954,553, 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.

Overall, the Subject's payment habit is good as the Subject has a good credit control and it could be taking advantage of the cash discounts while maintaining a good reputation with its creditors.

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 normally.

PROFIT AND LOSS ACCOUNT

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

Financial Year End	2012-06-30	2011-06-30	2010-06-30	2009-06-30	2008-06-30
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	SUMMARY	SUMMARY	SUMMARY
Currency	MYR	MYR	MYR	MYR	MYR
TURNOVER	4,782,923	4,686,109	4,229,555	4,247,448	4,233,494
	----------------	----------------	----------------	----------------	----------------
Total Turnover	4,782,923	4,686,109	4,229,555	4,247,448	4,233,494
Costs of Goods Sold	(3,131,718)	(3,052,347)	-	-	-
	----------------	----------------	----------------	----------------	----------------
Gross Profit	1,651,205	1,633,762	-	-	-
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	269,328	284,951	233,403	233,593	563,029
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	269,328	284,951	233,403	233,593	563,029
Taxation	(67,943)	(67,362)	(53,973)	(55,136)	(64,499)
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	201,385	217,589	179,430	178,457	498,530
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	2,253,168	2,035,579	1,856,149	1,677,692	1,179,162
	----------------	----------------	----------------	----------------	----------------
As restated	2,253,168	2,035,579	1,856,149	1,677,692	1,179,162
	----------------	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	2,454,553	2,253,168	2,035,579	1,856,149	1,677,692
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	2,454,553	2,253,168	2,035,579	1,856,149	1,677,692
	=============	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Hire purchase	11,868	637	-	-	-
Others	9,413	17,318	-	-	-
	----------------	----------------	----------------	----------------	----------------
	21,281	17,955	-	-	-
	=============	=============

BALANCE SHEET

ASSETS EMPLOYED:
FIXED ASSETS	1,004,089	961,940	849,757	890,289	934,975
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	1,004,089	961,940	849,757	890,289	934,975
CURRENT ASSETS
Stocks	1,222,942	1,135,105	-	-	-
Trade debtors	1,937,611	1,944,799	-	-	-
Other debtors, deposits & prepayments	62,469	76,479	-	-	-
Short term deposits	233,919	228,896	-	-	-
Cash & bank balances	20,458	94,110	-	-	-
Others	38,766	95,856	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	3,516,165	3,575,245	3,304,034	3,195,150	3,305,664
	----------------	----------------	----------------	----------------	----------------
TOTAL ASSET	4,520,254	4,537,185	4,153,791	4,085,439	4,240,639
	=============	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	383,988	889,707	-	-	-
Other creditors & accruals	24,934	24,803	-	-	-
Hire purchase & lease creditors	53,082	27,102	-	-	-
Amounts owing to director	719,298	719,769	-	-	-
Other liabilities	202,816	-	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	1,384,118	1,661,381	1,618,212	1,728,095	2,047,726
	----------------	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	2,132,047	1,913,864	1,685,822	1,467,055	1,257,938
	----------------	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	3,136,136	2,875,804	2,535,579	2,357,344	2,192,913
	=============	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	500,000	500,000	500,000	500,000	500,000
	----------------	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	500,000	500,000	500,000	500,000	500,000
RESERVES
Retained profit/(loss) carried forward	2,454,553	2,253,168	2,035,579	1,856,149	1,677,692
	----------------	----------------	----------------	----------------	----------------
TOTAL RESERVES	2,454,553	2,253,168	2,035,579	1,856,149	1,677,692
	----------------	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	2,954,553	2,753,168	2,535,579	2,356,149	2,177,692
LONG TERM LIABILITIES
Hire purchase creditors	178,252	120,708	-	-	-
Deferred taxation	3,331	1,928	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	181,583	122,636	-	1,195	15,221
	----------------	----------------	----------------	----------------	----------------
	3,136,136	2,875,804	2,535,579	2,357,344	2,192,913
	=============	=============	=============	=============	=============

FINANCIAL RATIO

TYPES OF FUNDS
Cash	254,377	323,006	-	-	-
Net Liquid Funds	254,377	323,006	-	-	-
Net Liquid Assets	909,105	778,759	1,685,822	1,467,055	1,257,938
Net Current Assets/(Liabilities)	2,132,047	1,913,864	1,685,822	1,467,055	1,257,938
Net Tangible Assets	3,136,136	2,875,804	2,535,579	2,357,344	2,192,913
Net Monetary Assets	727,522	656,123	1,685,822	1,465,860	1,242,717
BALANCE SHEET ITEMS
Total Borrowings	231,334	147,810	-	-	-
Total Liabilities	1,565,701	1,784,017	1,618,212	1,729,290	2,062,947
Total Assets	4,520,254	4,537,185	4,153,791	4,085,439	4,240,639
Net Assets	3,136,136	2,875,804	2,535,579	2,357,344	2,192,913
Net Assets Backing	2,954,553	2,753,168	2,535,579	2,356,149	2,177,692
Shareholders' Funds	2,954,553	2,753,168	2,535,579	2,356,149	2,177,692
Total Share Capital	500,000	500,000	500,000	500,000	500,000
Total Reserves	2,454,553	2,253,168	2,035,579	1,856,149	1,677,692
LIQUIDITY (Times)
Cash Ratio	0.18	0.19	-	-	-
Liquid Ratio	1.66	1.47	-	-	-
Current Ratio	2.54	2.15	2.04	1.85	1.61
WORKING CAPITAL CONTROL (Days)
Stock Ratio	93	88	-	-	-
Debtors Ratio	148	151	-	-	-
Creditors Ratio	45	106	-	-	-
SOLVENCY RATIOS (Times)
Gearing Ratio	0.08	0.05	-	-	-
Liabilities Ratio	0.53	0.65	0.64	0.73	0.95
Times Interest Earned Ratio	13.66	16.87	-	-	-
Assets Backing Ratio	6.27	5.75	5.07	4.71	4.39
PERFORMANCE RATIO (%)
Operating Profit Margin	5.63	6.08	5.52	5.50	13.30
Net Profit Margin	4.21	4.64	4.24	4.20	11.78
Return On Net Assets	9.27	10.53	9.21	9.91	25.67
Return On Capital Employed	9.11	10.43	9.21	9.91	25.67
Return On Shareholders' Funds/Equity	6.82	7.90	7.08	7.57	22.89
Dividend Pay Out Ratio (Times)	0.00	0.00	-	-	-
NOTES TO ACCOUNTS
Contingent Liabilities	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 :

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%)

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