MIRA INFORM REPORT

Report Date :

22.11.2014

IDENTIFICATION DETAILS

Name :	POWERPOINT ELECTRICAL SDN. BHD
Registered Office :	Lots 9240-9243, Section 64, Ktld, Jalan Kwong Lee Bank, 93450 Kuching, Sarawak,
Country :	Malaysia
Financials (as on) :	31.12.2013
Date of Incorporation :	27.10.1987
Com. Reg. No.:	165610-D
Legal Form :	Private Limited
Line of Business :	Trading In Machinery & Electrical Goods
No. of Employees :	30 [2014]

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	No complaints
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – June 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
Malaysia	A2	A2

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

MALAYSIA - ECONOMIC OVERVIEW

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. The NAJIB administration also is continuing efforts to boost domestic demand and reduce the economy's dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver of the economy. As an oil and gas exporter, Malaysia has profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with sustained budget deficits, has forced Kuala Lumpur to begin to address fiscal shortfalls, through initial reductions in energy and sugar subsidies and the announcement of the 2015 implementation of a 6% goods and services tax. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplies about 32% of government revenue in 2013. Bank Negara Malaysia (central bank) maintains healthy foreign exchange reserves, and a well-developed regulatory regime has limited Malaysia's exposure to riskier financial instruments and the global financial crisis. Nevertheless, Malaysia could be vulnerable to a fall in commodity prices or a general slowdown in global economic activity because exports are a major component of GDP. In order to attract increased investment, NAJIB earlier raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but retreated in 2013 after he encountered significant opposition from Malay nationalists and other vested interests. In September 2013 NAJIB launched the new Bumiputra Economic Empowerment Program (BEEP), policies that favor and advance the economic condition of ethnic Malays

Source : CIA

Company name and address

REGISTRATION NO.

:

165610-D

COMPANY NAME

:

POWERPOINT ELECTRICAL SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

27/10/1987

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

LOTS 9240-9243, SECTION 64, KTLD, JALAN KWONG LEE BANK, 93450 KUCHING, SARAWAK, MALAYSIA.

BUSINESS ADDRESS

:

LOT 9240-9243, SECTION 64, KTLD, JALAN KWONG LEE BANK, 93450 KUCHING, SARAWAK, MALAYSIA.

TEL.NO.

:

082-346188

FAX.NO.

:

082-345118

CONTACT PERSON

:

LU NGUANG SIONG ( MANAGER )

INDUSTRY CODE

:

46522

PRINCIPAL ACTIVITY

:

TRADING IN MACHINERY & ELECTRICAL GOODS

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 4,000,000.00 DIVIDED INTO
ORDINARY SHARES 1,000,000 CASH AND 3,000,000 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 53,233,569 [2013]

NET WORTH

:

MYR 15,715,562 [2013]

STAFF STRENGTH

:

30 [2014]

BANKER (S)

:

HONG LEONG BANK BHD PUBLIC BANK BHD UNITED OVERSEAS BANK (MALAYSIA) BHD OCBC BANK (MALAYSIA) BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

PAYMENT

:

FAIR

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) trading in machinery & electrical goods.

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

Share Capital History

Date	Authorised Shared Capital	Issue & Paid Up Capital
15/03/2010	MYR 5,000,000.00	MYR 4,000,000.00
15/04/1997	MYR 5,000,000.00	MYR 1,000,000.00
22/10/1992	MYR 500,000.00	MYR 150,000.00
09/05/1988	MYR 100,000.00	MYR 60,000.00
03/11/1987	MYR 100,000.00	MYR 3.00

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

Name	Address	IC/PP/Loc No	Shareholding	(%)
MR. LU NGUANG SIONG +	323, LORONG 10, JALAN STAMPIN, 93350 KUCHING, SARAWAK, MALAYSIA.	470305-13-5149 K659872	2,600,000.00	65.00
MS. CHAO YEN HONG +	323, LORONG 10, JALAN STAMPIN, 93350 KUCHING, SARAWAK, MALAYSIA.	490921-89-5078	1,400,000.00	35.00
			---------------	------
			4,000,000.00	100.00
			============	=====

+ Also Director

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MS. CHAO YEN HONG
Address	:	323, LORONG 10, JALAN STAMPIN, 93350 KUCHING, SARAWAK, MALAYSIA.
New IC No	:	490921-89-5078
Date of Birth	:	21/09/1949
Nationality	:	MALAYSIAN
Date of Appointment	:	28/04/2006

DIRECTOR 2

Name Of Subject	:	MR. LU NGUANG SIONG
Address	:	323, LORONG 10, JALAN STAMPIN, 93350 KUCHING, SARAWAK, MALAYSIA.
IC / PP No	:	K659872
New IC No	:	470305-13-5149
Date of Birth	:	05/03/1947
Nationality	:	MALAYSIAN
Date of Appointment	:	27/10/1987

MANAGEMENT

1)	Name of Subject	:	LU NGUANG SIONG
	Position	:	MANAGER

AUDITOR

Auditor	:	NGU KOON TENG & CO
Auditor' Address	:	LOT 306, LEBUH SEKAMA KUCING, 1ST FLOOR, 93300 KUCHING, SARAWAK, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MS. WONG KIE LING
	IC / PP No	:	K263646
	New IC No	:	530104-13-5662
	Address	:	130, JALAN CANNA, 93450 KUCHING, SARAWAK, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

HONG LEONG BANK BHD

2)

Name

:

PUBLIC BANK BHD

3)

Name

:

UNITED OVERSEAS BANK (MALAYSIA) BHD

4)

Name

:

OCBC BANK (MALAYSIA) BHD

ENCUMBRANCE (S)

Charge No	Creation Date	Charge Description	Chargee Name	Total Charge	Status
1	12/03/1992	MEMORANDUM OF CHARGE	PUBLIC BANK BERHAD	MYR 220,000.00	Unsatisfied
2	28/08/1992	MEMORANDUM OF CHARGE	PUBLIC BANK BERHAD	MYR 80,000.00	Unsatisfied
3	20/11/1992	MEMORANDUM OF CHARGE	PUBLIC BANK BERHAD	MYR 40,000.00	Unsatisfied
4	07/04/1995	N/A	BANK UTAMA MALAYSIA BHD	MYR 600,000.00	Satisfied
5	24/01/1996	N/A	ARABMALAYSIAN MERCHANT BANK BHD	MYR 1,280,000.00	Satisfied
6	05/07/1997	MEMORANDUM OF CHARGE	PUBLIC BANK BHD	MYR 1,500,000.00	Unsatisfied
7	16/07/1997	N/A	HONGKONG BANK MALAYSIA BHD	MYR 1,000,000.00	Satisfied
10	07/08/1997	LOAN AGREEMENT & ASSIGNMENT	PUBLIC BANK BHD	MYR 900,000.00	Unsatisfied
8	20/10/1997	MEMORANDUM OF CHARGE	PUBLIC BANK BHD	MYR 400,000.00	Unsatisfied
9	20/10/1997	MEMORANDUM OF CHARGE	PUBLIC BANK BHD	MYR 1,400,000.00	Unsatisfied
11	06/02/2003	N/A	PUBLIC BANK BERHAD	MYR 1,300,000.00	Current
12	17/04/2003	FACILITIES AGREEMENT	HONG LEONG BANK BERHAD	MYR 538,222.00	Unsatisfied
13	17/11/2003	FACILITIES AGREEMENT	PUBLIC BANK BERHAD	MYR 2,000,000.00	Unsatisfied
14	17/11/2003	SUPPLEMENTAL DEED OF ASSIGNMENT	PUBLIC BANK BERHAD	MYR 2,000,000.00	Unsatisfied
15	22/06/2006	N/A	PUBLIC BANK BHD	MYR 1,700,000.00	Unsatisfied
16	15/06/2007	MEMORANDUM OF CHARGE	PUBLIC BANK BHD	MYR 1,000,000.00	Unsatisfied
17	20/11/2007	FIRST LEGAL CHARGE	UNITED OVERSEAS BANK (MALAYSIA) BHD	MYR 3,000,000.00	Unsatisfied
18	28/01/2008	MEMORANDUM OF CHARGE	HONG LEONG BANK BERHAD	MYR 2,500,000.00	Unsatisfied
19	16/06/2008	CORPORATE GUARANTEE	PUBLIC BANK BHD	MYR 7,000,000.00	Unsatisfied
20	05/11/2008	LAND CHARGE	OCBC BANK (MALAYSIA) BHD	-	Unsatisfied
21	10/10/2011	DEED OF ASSIGNMENT	UNITED OVERSEAS BANK (MALAYSIA) BHD	-	Unsatisfied
22	10/10/2011	MEMORANDUM OF CHARGES	UNITED OVERSEAS BANK (MALAYSIA) BHD	-	Unsatisfied

LITIGATION CHECK AGAINST SUBJECT

* A check has been conducted in our databank againt the Subject whether the Subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia.

No legal action was found in our databank.

No winding up petition was found in our databank.

DEFAULTER CHECK AGAINST SUBJECT

* We have checked through the Subject in our defaulters' database which comprised of debtors that have been blacklisted by our customers and debtors that have been placed or assigned to us for collection.

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

PAYMENT RECORD

SOURCES OF RAW MATERIALS:
Local	:	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	[	]	Average 61-90 Days	[	]
Fair 91-120 Days	[	X	]	Poor >120 Days	[	]

CLIENTELE

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

OPERATIONS

Goods Traded

:

MACHINERY AND ELECTRICAL GOODS

Member(s) / Affiliate(s)

:

THE ELECTRICAL AND ELECTRONICS ASSOCIATION OF MALAYSIA (TEEAM)

MALAYSIAN INTERNATIONAL CHAMBER OF COMMERCE AND INDUSTRY (MICCI)

Total Number of Employees:
YEAR	2014
GROUP	N/A
COMPANY	30

Branch

:

YES

Other Information:

The Subject is principally engaged in the (as a / as an) trading in machinery & electrical goods.

The Subject is primarily engaged as an importer and trader of machinery and electrical components for utilities industries such as power, water, oil and gas industries.

The Subject's products comprised of cables, transformers, lightings and others. The Subject caters for both Lower Voltage (LV) and High Voltage (HV) electrical appliances.

Besides the Subject also trades several types machineries for the construction and manufacturing sectors. Most of the machineries are of high technology.

The Subject provides maintenance services upon customers' requirements.

RECENT DEVELOPMENT

We have checked with the Malaysian National News Agency's (BERNAMA)

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client	:	N/A
Current Telephone Number	:	082-346188
Match	:	N/A
Address Provided by Client	:	LOT 9240-9243, SECTION 64, KTLD, JALAN KWONG LEE BANK,93450,KUCHING,SARAWAK.
Current Address	:	LOT 9240-9243, SECTION 64, KTLD, JALAN KWONG LEE BANK, 93450 KUCHING, SARAWAK, 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	:	Erratic	[	2010 - 2013	]
Profit/(Loss) Before Tax	:	Decreased	[	2010 - 2013	]
Return on Shareholder Funds	:	Unfavourable	[	7.63%	]
Return on Net Assets	:	Acceptable	[	14.09%	]
The fluctuating turnover reflects the fierce competition among the existing and new market players.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	[	34 Days	]
Debtor Ratio	:	Unfavourable	[	81 Days	]
Creditors Ratio	:	Unfavourable	[	77 Days	]
The Subject's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The high debtors' ratio could indicate that the Subject was weak in its credit control. However, the Subject could also giving longer credit periods to its customers in order to boost its sales or to capture / retain its market share. The unfavourable creditors' ratio could be due to the Subject taking advantage of the credit granted by its suppliers. However this may affect the goodwill between the Subject and its suppliers and the Subject may inadvertently have to pay more for its future supplies.
Liquidity
Liquid Ratio	:	Favourable	[	1.07 Times	]
Current Ratio	:	Unfavourable	[	1.28 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	:	Acceptable	[	4.41 Times	]
Gearing Ratio	:	Favourable	[	0.70 Times	]
The Subject's interest cover was slightly low. If there is no sharp fall in its profit or sudden increase in the interest rates, we believe the Subject is able to generate sufficient income to service its interest and repay the loans. The Subject was lowly geared thus it had a low financial risk. The Subject was mainly financed by its shareholders' funds and internally generated funds. In times of economic slowdown / downturn, the Subject being a lowly geared company, will be able to compete better than those companies which are highly geared in the same industry.
Overall Assessment :
The Subject recorded lower profits as its turnover showed a erratic trend. The Subject's management was unable to control its costs efficiently as its profit showed a downward trend. The Subject was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the Subject should be able to repay its short term obligations. The Subject had an acceptable interest cover. If there is no sudden sharp increase in interest rate or fall in the Subject's profit, we do believe the Subject is able to generate sufficient cash flow to service its interest payment. 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 : FAIR

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

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

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

INDUSTRY ANALYSIS

MSIC CODE
46522 : Wholesale of electronic components and wiring accessories
INDUSTRY :	ELECTRICAL & ELECTRONIC
The Electrical & Electronics (E&E) industry is the leading industry within the manufacturing sector and is the largest contributor to manufacturing output, employment, investment, exports and imports. Malaysia is a key player in the fast expanding Asia Pacific E&E market, its major export destinations include Singapore, United States, Europe, Japan and Taiwan. The E&E industry is targeted under the National Key Economic Areas ( NKEA ) to gear the nation towards high-income economy by focusing on high-value and high-growth manufacturing activities.
According to Ministry of Finance, in the year 2013 the electrical and electronic (E&E) subsector is expected to grow further, driven by higher demand for electronic equipment and parts as well as semiconductors in line with recovery in advanced economies.
Output of E&E rebounded 1.6% during the first seven months of 2012 mainly driven by the higher production of semiconductor devices (14.5%) as well as audio, visual and communication apparatus (6%). The improved performance of E&E was partly due to chip vendors and storage producers taking advantage of stable prices and supply of parts to replenish inventories as well as the launching of new products which was delayed by massive floods in Thailand during the fourth quarter of 2011.
Despite the slowdown in global demand, E&E manufacturers continued to invest in new technology and product development to upscale the value chain. Approved capital spending in the E&E subsector amounted to RM1.72 billion in 46 projects, of which RM1.35 billion were from foreign investors. This further reaffirms Malaysia as an attractive and cost-efficient E&E manufacturing base in the region. The continued strong investments will further strengthen growth in the E&E subsector and create more skilled jobs.
Softening of world demand for solar panels impact Malaysia on it's downturn in small scale compared to China where it facing great impact. The decline in E&E products was also due to the weak global demand.
E&E has been instrumental in the development of the Northern Corridor Klang Valley, Johor and Sarawak, contributing significantly to the socio-economic development of the relevant communities.However, the E&E sector faces significant challenges in maintaining growth with intense competition from China, Taiwan, Singapore and other Asian countries. Over the last 10 years, E&E's share of Malaysian exports has gradually declined.
Malaysia's E&E sector remains focused on assembly, the lower value-added part of the industry while Taiwan, South Korea and Singapore have captured the higher value-added activities in research and development, design and manufacturing.
To propel the E&E industry to a higher level, under the Economic Transformation Programme (ETP) launched by the Government, a few sub-sectors namely integrated circuits, solar photovoltaics, light emitting diodes, and solid state lighting & integrated electronics have been identified for greater promotion based on their potential to contribute significantly towards Gross National Income (GNI) targets 2020.
OVERALL INDUSTRY OUTLOOK : Marginal Growth

CREDIT RISK EVALUATION & RECOMMENDATION

Incorporated in 1987, the Subject is a Private Limited company, focusing on trading in machinery & electrical goods. The Subject has been in business for over two decades. It has built up a strong clientele base and satisfactory reputation will enable the Subject to further enhance its business in the near term. The Subject is expected to enjoy a stable market shares. A paid up capital of MYR 4,000,000 allows the Subject to expand its business more comfortably. We considered that the Subject's business position in the market is much dependent on the efforts of its directors.

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

The Subject's business performance showed a reverse trend as both its turnover and pre-tax profit have decreased compared to the previous year. 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 15,715,562, the Subject should be able to maintain its business in the near terms.

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

The Subject's overall payment habit is fair and this clearly implied a weak credit control of the Subject.

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)

POWERPOINT ELECTRICAL SDN. BHD.

Financial Year End	2013-12-31	2012-12-31	2011-12-31	2010-12-31
Months	12	12	12	12
Consolidated Account	Company	Company	Company	Company
Audited Account	YES	YES	YES	YES
Unqualified Auditor's Report (Clean Opinion)	YES	YES	YES	YES
Financial Type	FULL	FULL	FULL	SUMMARY
Currency	MYR	MYR	MYR	MYR
TURNOVER	53,233,569	69,334,018	51,975,357	36,589,729
	----------------	----------------	----------------	----------------
Total Turnover	53,233,569	69,334,018	51,975,357	36,589,729
Costs of Goods Sold	(48,878,902)	(62,837,149)	(45,557,052)	-
	----------------	----------------	----------------	----------------
Gross Profit	4,354,667	6,496,869	6,418,305	-
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	1,722,106	3,541,398	3,205,097	1,686,797
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	1,722,106	3,541,398	3,205,097	1,686,797
Taxation	(522,731)	(925,184)	(938,009)	-
	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	1,199,375	2,616,214	2,267,088	1,686,797
	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	10,516,187	7,899,973	5,632,885	6,946,088
	----------------	----------------	----------------	----------------
As restated	10,516,187	7,899,973	5,632,885	6,946,088
	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	11,715,562	10,516,187	7,899,973	8,632,885
DIVIDENDS - Ordinary (paid & proposed)	-	-	-	(3,000,000)
	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	11,715,562	10,516,187	7,899,973	5,632,885
	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Hire purchase	9,347	8,006	6,854	-
Term loan / Borrowing	1,036	2,414	3,120	-
Others	494,723	483,355	608,092	-
	----------------	----------------	----------------	----------------
	505,106	493,775	618,066	-
	=============	=============	=============

BALANCE SHEET

POWERPOINT ELECTRICAL SDN. BHD.

ASSETS EMPLOYED:
FIXED ASSETS	5,176,711	4,712,010	9,340,354	9,413,099
Investment properties	4,046,404	4,876,645	-	-
	----------------	----------------	----------------	----------------
TOTAL LONG TERM INVESTMENTS/OTHER ASSETS	4,046,404	4,876,645	-	-
	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	9,223,115	9,588,655	9,340,354	9,413,099
Stocks	4,951,005	3,821,250	1,475,306	-
Trade debtors	11,876,901	11,886,085	7,258,263	-
Other debtors, deposits & prepayments	11,273,796	11,118,422	10,558,865	-
Short term deposits	1,544,373	1,145,854	803,124	-
Amount due from director	500,827	-	105,952	-
Cash & bank balances	156,028	99,189	76,810	-
Others	30,105	-	1,284,721	-
	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	30,333,035	28,070,800	21,563,041	18,249,934
	----------------	----------------	----------------	----------------
TOTAL ASSET	39,556,150	37,659,455	30,903,395	27,663,033
	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	10,261,436	9,239,569	8,683,244	-
Other creditors & accruals	2,507,133	2,214,445	2,675,356	-
Hire purchase & lease creditors	72,373	46,821	32,512	-
Bank overdraft	4,666,053	2,557,405	6,970,840	-
Short term borrowings/Term loans	5,730	20,944	19,582	-
Bill & acceptances payable	6,236,000	8,557,000	-	-
Amounts owing to director	-	26,135	-	-
Provision for taxation	-	395,135	525,326	-
	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	23,748,725	23,057,454	18,906,860	17,890,258
	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	6,584,310	5,013,346	2,656,181	359,676
	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	15,807,425	14,602,001	11,996,535	9,772,775
	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	4,000,000	4,000,000	4,000,000	4,000,000
	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	4,000,000	4,000,000	4,000,000	4,000,000
Retained profit/(loss) carried forward	11,715,562	10,516,187	7,899,973	5,632,885
	----------------	----------------	----------------	----------------
TOTAL RESERVES	11,715,562	10,516,187	7,899,973	5,632,885
	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	15,715,562	14,516,187	11,899,973	9,632,885
Long term loans	-	5,465	26,402	-
Hire purchase creditors	80,412	71,734	61,818	-
Deferred taxation	11,451	8,615	8,342	-
	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	91,863	85,814	96,562	139,890
	----------------	----------------	----------------	----------------
	15,807,425	14,602,001	11,996,535	9,772,775
	=============	=============	=============	=============

FINANCIAL RATIO

POWERPOINT ELECTRICAL SDN. BHD.

TYPES OF FUNDS
Cash	1,700,401	1,245,043	879,934	-
Net Liquid Funds	(9,201,652)	(9,869,362)	(6,090,906)	-
Net Liquid Assets	1,633,305	1,192,096	1,180,875	359,676
Net Current Assets/(Liabilities)	6,584,310	5,013,346	2,656,181	359,676
Net Tangible Assets	15,807,425	14,602,001	11,996,535	9,772,775
Net Monetary Assets	1,541,442	1,106,282	1,084,313	219,786
BALANCE SHEET ITEMS
Total Borrowings	11,060,568	11,259,369	7,111,154	-
Total Liabilities	23,840,588	23,143,268	19,003,422	18,030,148
Total Assets	39,556,150	37,659,455	30,903,395	27,663,033
Net Assets	15,807,425	14,602,001	11,996,535	9,772,775
Net Assets Backing	15,715,562	14,516,187	11,899,973	9,632,885
Shareholders' Funds	15,715,562	14,516,187	11,899,973	9,632,885
Total Share Capital	4,000,000	4,000,000	4,000,000	4,000,000
Total Reserves	11,715,562	10,516,187	7,899,973	5,632,885
LIQUIDITY (Times)
Cash Ratio	0.07	0.05	0.05	-
Liquid Ratio	1.07	1.05	1.06	-
Current Ratio	1.28	1.22	1.14	1.02
WORKING CAPITAL CONTROL (Days)
Stock Ratio	34	20	10	-
Debtors Ratio	81	63	51	-
Creditors Ratio	77	54	70	-
SOLVENCY RATIOS (Times)
Gearing Ratio	0.70	0.78	0.60	-
Liabilities Ratio	1.52	1.59	1.60	1.87
Times Interest Earned Ratio	4.41	8.17	6.19	-
Assets Backing Ratio	3.95	3.65	3.00	2.44
PERFORMANCE RATIO (%)
Operating Profit Margin	3.24	5.11	6.17	4.61
Net Profit Margin	2.25	3.77	4.36	4.61
Return On Net Assets	14.09	27.63	31.87	17.26
Return On Capital Employed	10.84	23.45	20.12	17.26
Return On Shareholders' Funds/Equity	7.63	18.02	19.05	17.51
Dividend Pay Out Ratio (Times)	0.00	0.00	0.00	1.78
NOTES TO ACCOUNTS
Contingent Liabilities	0	0	0

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.85
UK Pound	1	Rs.97.01
Euro	1	Rs.77.62

INFORMATION DETAILS

Analysis Done by :	DIV
Report Prepared by :	NIS

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.