MIRA INFORM REPORT

Report Date :

20.09.2014

IDENTIFICATION DETAILS

Name :	TRUWATER COOLING TOWERS SDN. BHD.
Formerly Known As :	TRANSWATER COOLING TOWERS SDN. BHD. TRANSWATER INDUSTRIES SDN. BHD. DECORAX SDN. BHD.
Registered Office :	917, Block A, Kelana Centre Point, 3, Jalan SS 7/19, Kelana Jaya, 47301 Petaling Jaya, Selangor
Country :	Malaysia
Financials (as on) :	31.12.2013
Date of Incorporation :	17.10.1989
Com. Reg. No.:	188113-A
Legal Form :	Private Limited
Line of Business :	Manufacture, Supply and Installation of Cooling Towers.
No. of Employees :	60 [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

EXECUTIVE SUMMARY

REGISTRATION NO.

:

188113-A

COMPANY NAME

:

TRUWATER COOLING TOWERS SDN. BHD.

FORMER NAME

:

TRANSWATER COOLING TOWERS SDN. BHD. (06/12/2004)
TRANSWATER INDUSTRIES SDN. BHD. (15/03/1996)
DECORAX SDN. BHD. (16/05/1990)

INCORPORATION DATE

:

17/10/1989

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

917, BLOCK A, KELANA CENTRE POINT, 3, JALAN SS 7/19, KELANA JAYA, 47301 PETALING JAYA, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

:

EXECUTIVE SUITE 702, BLOCK B, KELANA BUSINESS CENTRE 97, JALAN SS 7/2, 47301 PETALING JAYA, SELANGOR, MALAYSIA.

TEL.NO.

:

03-78808800

FAX.NO.

:

03-78045519

EMAIL

:

TW.COOLING@TRUWATER.COM.MY

WEB SITE

:

WWW.TRUWATER.COM.MY

CONTACT PERSON

:

CHEW KOK SIANG ( CEO )

INDUSTRY CODE

:

35302

PRINCIPAL ACTIVITY

:

MANUFACTURE, SUPPLY & INSTALLATION OF COOLING TOWERS

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 1,600,000.00 DIVIDED INTO
ORDINARY SHARES 1,600,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 41,322,877 [2013]

NET WORTH

:

MYR 24,975,943 [2013]

STAFF STRENGTH

:

60 [2014]

BANKER (S)

:

CITIBANK BHD HONG LEONG BANK BHD EON BANK BHD PUBLIC BANK BHD MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

STRONG

PAYMENT

:

FAIR

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

N/A

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

HISTORY / BACKGROUND

The Subject is a private limited company and is allowed to have a minimum of one and a maximum of forty-nine shareholders. As a private limited company, the Subject must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the Subject is capable of owning assets, entering into contracts, sue or be sued by other companies. The liabilities of the shareholders are to the extent of the equity they have taken up and the creditors cannot claim on shareholders' personal assets even if the Subject is insolvent. The Subject is governed by the Companies Act, 1965 and the company must file its annual returns, together with its financial statements with the Registrar of Companies.

The Subject is principally engaged in the (as a / as an) manufacture, supply & installation of cooling towers.

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

The immediate holding company of the Subject is TRUWATER SDN. BHD., a company incorporated in MALAYSIA.

Share Capital History

Date	Authorised Shared Capital	Issue & Paid Up Capital
31/10/2012	MYR 5,000,000.00	MYR 1,600,000.00

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

Name	Address	IC/PP/Loc No	Shareholding	(%)
TRUWATER SDN. BHD.	EXECUTIVE SUITE 702, BLOK B, KELANA BUSINESS CENTRE, 97, JALAN SS 7/2, KELANA JAYA, 47301 PETALING JAYA, SELANGOR, MALAYSIA.	626573W	1,021,000.00	63.81
MR. NG KAH CHOONG +	35, JALAN KUBAH U8/61, SEKSYEN U8, BUKIT JELUTONG, 40150 SHAH ALAM, SELANGOR, MALAYSIA.	630405-08-6049 7012694	160,000.00	10.00
MR. EYU KENG SUNG	1, TAMAN ORKID, 28300 TRIANG, PAHANG, MALAYSIA.	760716-06-5347 A3388034	80,000.00	5.00
MR. WAI CHEE SUWE	20, TAMAN DAMAI, MENGKUANG, 28300 TRIANG, PAHANG, MALAYSIA.	590131-06-5019 5502208	80,000.00	5.00
MR. HOW WUAN KEE	50, JALAN DESA 13/4, BANDAR COUNTRY HOMES, 48000 RAWANG, SELANGOR, MALAYSIA.	700422-04-5223 A1544963	80,000.00	5.00
MS. SIM SIEW AI	52, JALAN BU 12/2, BANDAR UTAMA, 47800 PETALING JAYA, SELANGOR, MALAYSIA.	680516-08-5028 A0978578	80,000.00	5.00
MR. CHEONG BOON HOCK	85, KAMPUNG BARU, MENGKUANG, 28340 TRIANG, PAHANG, MALAYSIA.	621113-06-5217 6906928	80,000.00	5.00
MR. KONG KENG LING	43, JALAN SS22/37, DAMANSARA JAYA, 47400 PETALING JAYA, SELANGOR, MALAYSIA.	561105-08-5865 5129051	19,000.00	1.19
			---------------	------
			1,600,000.00	100.00
			============	=====

+ Also Director

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

Local No	Country	Company	(%)	As At
673057D	MALAYSIA	TRUWATER ASIA PACIFIC SDN. BHD.	100.00	29/03/2013
865792P	MALAYSIA	TRUWATER TECHNOLOGY SDN. BHD.	51.00	29/03/2013
877582V	MALAYSIA	TRU-V LOGISTIC SDN. BHD.	51.00	29/03/2013

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MR. TAN EE PENG
Address	:	57, JALAN SS 23/3, TAMAN SEA, 47301 PETALING JAYA, SELANGOR, MALAYSIA.
IC / PP No	:	5959166
New IC No	:	600622-04-5019
Date of Birth	:	22/06/1960
Nationality	:	MALAYSIAN
Date of Appointment	:	11/07/1995

DIRECTOR 2

Name Of Subject	:	MR. CHEW KOK SIANG
Address	:	20, JALAN MUHIBBAH 9, TAMAN MUHIBBAH, SRI KEMBANGAN, SERDANG, 43300 BALAKONG, SELANGOR, MALAYSIA.
IC / PP No	:	5782005
New IC No	:	591206-08-5271
Date of Birth	:	06/12/1959
Nationality	:	MALAYSIAN
Date of Appointment	:	29/12/1993

DIRECTOR 3

Name Of Subject	:	WU ZHUPING
Address	:	ROOM 402, UNIT JIA BUILDING 4, YANGLIU XIANG CHANGZHOU CITY, JIANGSU PROVINCE, 213000, CHINA, CHINA.
IC / PP No	:	G41979873
Date of Appointment	:	23/12/2013

DIRECTOR 4

Name Of Subject	:	YANG HUA
Address	:	ROOM 1002, UNIT YI BUILDING 7, XIANGSHUWAN FUYUAN XINBEI DISTRICT, CHANGZHOU CITY JIANGSU PROVINCE, 213003, CHINA, CHINA.
IC / PP No	:	G26439477
Date of Appointment	:	23/12/2013

DIRECTOR 5

Name Of Subject	:	LIU LI
Address	:	ROOM 102, UNIT JIA BUILDING 34, SHUIMUNIANHUA XINBEI DISTRICT, CHANGZHOU CITY JIANGSU PROVINCE, 213003, CHINA, CHINA.
IC / PP No	:	G39014492
Date of Appointment	:	23/12/2013

DIRECTOR 6

Name Of Subject	:	HSU CHIH-CHUNG
Address	:	UNIT A2-13, 28 MONT\' KIARA, NO. 32, JALAN KIARA MONT\' KIARA, 50480 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	306740328
Date of Appointment	:	23/12/2013

DIRECTOR 7

Name Of Subject	:	MR. NG KAH CHOONG
Address	:	35, JALAN KUBAH U8/61, SEKSYEN U8, BUKIT JELUTONG, 40150 SHAH ALAM, SELANGOR, MALAYSIA.
IC / PP No	:	7012694
New IC No	:	630405-08-6049
Date of Birth	:	05/04/1963
Nationality	:	MALAYSIAN
Date of Appointment	:	02/05/2010

MANAGEMENT

1)	Name of Subject	:	CHEW KOK SIANG
	Position	:	CEO

AUDITOR

Auditor	:	CROWE HORWATH
Auditor' Address	:	16, TOWER C, MEGAN AVENUE II,12,JLN.YAP KWAN SENG.KL, WILAYAH PERSEKUTUAN, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MS. LAU SAW HONG
	IC / PP No	:	A3441832
	New IC No	:	760908-14-5392
	Address	:	36, JALAN RIMBUNAN, MELATI 1, LAMAN RIMBUNAN, KEPONG, 52100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

CITIBANK BHD

2)

Name

:

HONG LEONG BANK BHD

3)

Name

:

EON BANK BHD

4)

Name

:

PUBLIC BANK BHD

5)

Name

:

MALAYAN BANKING BHD

ENCUMBRANCE (S)

Charge No	Creation Date	Charge Description	Chargee Name	Total Charge	Status
1	25/08/2004	N/A	MALAYAN BANKING BERHAD	MYR 1,100,000.00	Satisfied
2	25/08/2004	N/A	MALAYAN BANKING BERHAD	MYR 1,100,000.00	Satisfied
3	17/05/2006	N/A	MALAYAN BANKING BHD	MYR 1,000,000.00	Satisfied
4	17/05/2006	N/A	MALAYAN BANKING BHD	MYR 1,000,000.00	Satisfied
5	30/08/2006	N/A	EON BANK BHD	MYR 170,000.00	Unsatisfied
6	30/08/2006	N/A	EON BANK BHD	-	Unsatisfied
7	04/04/2008	N/A	CITIBANK BHD	MYR 450,000.00	Unsatisfied
8	25/08/2009	N/A	PUBLIC BANK BHD	MYR 109,000.00	Unsatisfied
9	28/01/2010	N/A	CITIBANK BHD	MYR 557,333.00	Unsatisfied
10	03/03/2010	N/A	CITIBANK BHD	-	Unsatisfied
11	25/10/2010	LETTER OF SET-OFF	HONG LEONG BANK BERHAD	-	Unsatisfied
12	25/10/2010	1ST LEGAL CHARGE	HONG LEONG BANK BERHAD	-	Satisfied
13	29/06/2011	OPEN CHARGE	INDUSTRIAL AND COMMERCIAL BANK OF CHINA (MALAYSIA) BERHAD	-	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	[	]	Average 61-90 Days	[	]
Fair 91-120 Days	[	X	]	Poor >120 Days	[	]

CLIENTELE

Local	:	YES	Percentage	:	60%
Domestic Markets	:	MALAYSIA
Overseas	:	YES	Percentage	:	40%
Export Market	:	THAILAND SINGAPORE CHINA INDONESIA
Credit Term	:	AS AGREED
Payment Mode	:	CHEQUES LETTER OF CREDIT (LC)

OPERATIONS

Products manufactured

:

COOLING TOWER

Product Brand Name

:

TRUWATER

Competitor(s)

:

POLLUTION ENGINEERINGS (M) SDN BHD

Member(s) / Affiliate(s)

:

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

Ownership of premises

:

LEASED/RENTED

Total Number of Employees:
YEAR	2014	2013	2011	2010	2009
GROUP	N/A	N/A	65	63	N/A
COMPANY	60	60	60	59	38

Branch

:

NO

Other Information:

The Subject is principally engaged in the (as a / as an) manufacture, supply & installation of cooling towers.

The Subject engaged in manufacture of cooling tower product such as

- country flow type

- crossflow type

The Subject has constructed very highly efficient and environmentally friendly cooling towers for the air-conditioning, power generation, biomass co-generation, petrochemical, chemical, oil & gas, steel mills, food and other processing industries.

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client	:	N/A
Current Telephone Number	:	03-78808800
Match	:	N/A
Address Provided by Client	:	SELANGOR.
Current Address	:	EXECUTIVE SUITE 702, BLOCK B, KELANA BUSINESS CENTRE 97, JALAN SS 7/2, 47301 PETALING JAYA, SELANGOR, MALAYSIA.
Match	:	NO
Latest Financial Accounts	:	YES

Other Investigations

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

The address provided is incomplete.

FINANCIAL ANALYSIS

Profitability
Turnover	:	Erratic	[	2010 - 2013	]
Profit/(Loss) Before Tax	:	Increased	[	2010 - 2013	]
Return on Shareholder Funds	:	Acceptable	[	29.62%	]
Return on Net Assets	:	Favourable	[	31.24%	]
The fluctuating turnover reflects the fierce competition among the existing and new market players.The Subject's management have been efficient in controlling its operating costs. The Subject's management had generated acceptable return for its shareholders using its assets.
Liquidity
Current Ratio	:	Favourable	[	1.60 Times	]
The Subject was in good liquidity position with its current  liabilities  well covered by its current assets. With its net current assets, the Subject should be able to repay its short term obligations.
Solvency
Liability Ratio	:	Unfavourable	[	1.32 Times	]
The Subject has high liabilities ratio and it may face financial difficulties if no additional capital is injected.
Overall Assessment :
Although the turnover was erratic, the Subject had maintained a steady growth in its profit. This indicate the management's efficiency in controlling its costs and profitability. 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's liabilities 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 : 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	28,876
Individual Bankruptcy ( No.)	16,228	18,119	19,167	19,575	21,984
Individual Bankruptcy ( % )	16.7	11.7	5.8	2.1	12.3

INDUSTRIES ( % of Growth ):	2009	2010	2011	2012*	2013**
Agriculture	0.1	2.4	5.8	1.3	2.1
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	(6.5)	(0.3)	(5.4)	1.0	0.7
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 #	(9.0)	11.9	4.7	4.8	3.5
Exported-oriented Industries	(19.0)	12.1	2.8	4.1	-
Electrical & Electronics	(30.3)	28.4	(4.0)	12.7	18.6
Rubber Products	(10.1)	25.3	20.7	3.0	8.2
Wood Products	(24.1)	20.1	(5.1)	8.7	(3.1)
Textiles & Apparel	(19.5)	(0.4)	13.2	(7.1)	(2.6)
Domestic-oriented Industries	(9.8)	16.3	6.5	8.6	-
Food, Beverages & Tobacco	0.2	3.0	4.8	2.7	3.6
Chemical & Chemical Products	(7.7)	16.2	10.0	10.8	(0.7)
Plastic Products	(9.1)	2.4	3.8	-	-
Iron & Steel	(32.7)	29.3	2.2	(6.6)	3.4
Fabricated Metal Products	(2.5)	14.9	21.8	13.8	12.2
Non-metallic Mineral	(15.5)	20.2	12.1	2.9	(0.4)
Transport Equipment	(13.5)	36.5	12.0	3.4	13.8
Paper & Paper Products	(5.0)	18.7	9.5	3.1	2.3
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	6.2	11.4	4.7	18.6	10.9
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	2.9	7.4	7.1	6.4	5.9
Electric, Gas & Water	1.4	7.8	3.5	4.4	4.2
Transport, Storage & Communication	1.6	7.7	6.5	7.1	7.3
Wholesale, Retail, Hotel & Restaurant	2.8	4.7	5.2	4.7	5.9
Finance, Insurance & Real Estate	3.8	6.1	6.9	9.7	3.7
Government Services	3.4	5.9	12.4	9.4	8.3
Other Services	3.8	4.4	5.1	3.9	5.1
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
35302 : Production and distribution of cooled air, chilled water for cooling purposes
INDUSTRY :	MANUFACTURING
The Manufacturing sector is one of the important sectors to the growth of the Malaysian economy. According to Ministry of Finance, the manufacturing sector is expected to grow 4.9% in year 2013. Export oriented-industries are expected to benefit from the higher growth of global trade, while domesticoriented industries expand in line with the better consumer sentiment and business confidence. The resource-based industries are envisaged to grow steadily attributed to improved demand for petroleum, chemical, rubber and plastic products. With better job prospects and higher disposable income, the transportation equipment subsector, in particular, the passenger car segment is expected to expand.
Value-added of the manufacturing sector expanded 5% during the first half of 2012. Output of the sector rose 5.2% during the first sevenmonths of 2012 in line with the increase in sales value of manufactured products by 6.5% to RM363.1 billion. Output from domesticoriented industries continued to expand 8.6% while export-oriented industries grew 4.1%.
According to the Department of Statistics, the sales value of the Manufacturing sector in January 2013 posted a growth of 7.4% (RM3.6 billion) to record RM52.4 billion as compared to RM48.8 billion reported in year 2012. Meanwhile, month-on-month basis, the sales value has decreased by 0.4% (RM0.2 billion) as compared with the preceding month. The sales value in December 2012 has been revised positive 7.5% year-on-year to record RM52.6 billion.
Output of rubber products increased 3.6% in the first seven month of 2012 mainly supported by continuous demand for rubber gloves. Output of rubber gloves grew 5.9% on account of the expansion in the global healthcare industry and wider usage of gloves in other sectors. Similarly, output of catheters, especially for use in medical appliances, also registered a strong growth of 12.6%. Nevertheless, production of rubber tyres and tubes reduced 10.9% in tandem with slowing external demand from the automotive industry, especially China.
Meanwhile, production of wood and wood products rebounded 4.6% largely supported by higher demand for wooden and cane furniture (33.5%). The positive performance was attributed to vibrant higher demand from major export destinations such as China and the United States (US) for Malaysian-made furniture. Demand from China accelerated further following the country’s rising income level and the implementation of zero import duty on Malaysian made-furniture. Malaysia government has growth target of 6.5% for wood based furniture where estimated to reach up to RM53 billion by year 2020.The government providing pioneer status for tax exemption and investment tax allowance for this industry as a boost up step towards produce good quality product and to meet the world demand.
The output of chemicals and chemical products rose 9.9% in the first seven month of year 2012 on account of increasing demand for plastic products (11.8%) and basic chemicals (11.1%). External demand for plastic packaging materials surged during the early part of the year 2012, particularly from Japan and Thailand, as manufacturers resumed operations, which were interrupted by natural calamities and power outages. Chemical production are expected to show 7.5 % in year 2013 inline with Malaysia as one of the largest contributor in world Chemicals & Chemical industries.
Tax and non-tax incentives provided by goverment encourage manufacturers to move up the value chain of manufacturing industry. The new growth initiatives by goverment in the manufacturing sector such assolar and medial services can be important drivers of growth apart from helping to diversify the manufacturing base and contributing to the resilience of the sector.
OVERALL INDUSTRY OUTLOOK : Average Growth

CREDIT RISK EVALUATION & RECOMMENDATION

Incorporated in 1989, the Subject is a Private Limited company, focusing on manufacture, supply & installation of cooling towers. The Subject has been in business for over two decades. It has built up a strong clientele base and good reputation will enable the Subject to further enhance its business in the near term.  The Subject is expected to enjoy a stable market shares. Having strong support from its holding company has enabled the Subject to remain competitive despite the challenging business environment. The capital standing of the Subject is fair. With an adequate share capital, the Subject has the potential of expanding its business in future.

Over the years, the Subject has established an extensive clientele base in the market. Besides catering to the local market, the Subject has penetrated into other countries. With the contribution of both local and overseas customers, the Subject is likely to be exposed to lower commercial risk. Hence, we believe that the Subject has better business expansion opportunities in the future. Being a moderate size company, the Subject has a total workforce of 60 employees in its business operations. 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.

Return on shareholders' funds of the Subject was at an acceptable range which indicated that the management was efficient in utilising its funds to generate income. The Subject is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. The Subject has high liabilities ratio and it may face financial difficulties if no additional capital is injected. Given a positive net worth standing at MYR 24,975,943, 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 shows an upward trend and this trend is very likely to sustain in the near terms. Hence, the Subject is expected to benefit from the favourable outlook of the industry.

Based on the above condition, we recommend credit be granted to the Subject promptly.

PROFIT AND LOSS ACCOUNT

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

TRUWATER COOLING TOWERS SDN. BHD.

Financial Year End	2013-12-31	2013-04-30	2012-04-30	2011-04-30	2010-04-30
Months	8	12	12	12	12
Consolidated Account	GROUP	GROUP	GROUP	GROUP	GROUP
Audited Account	YES	YES	YES	YES	YES
Unqualified Auditor's Report (Clean Opinion)	YES	YES	YES	YES	YES
Financial Type	SUMMARY	FULL	FULL	FULL	FULL
Currency	MYR	MYR	MYR	MYR	MYR
TURNOVER	41,322,877	56,168,684	48,182,179	39,133,649	32,829,063
Other Income	-	753,450	535,460	-	-
	----------------	----------------	----------------	----------------	----------------
Total Turnover	41,322,877	56,922,134	48,717,639	39,133,649	32,829,063
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	10,472,620	8,946,636	6,447,897	3,008,015	1,523,296
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	10,472,620	8,946,636	6,447,897	3,008,015	1,523,296
Taxation	(2,584,557)	(2,144,304)	(1,145,736)	(525,451)	(409,011)
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	7,888,063	6,802,332	5,302,161	2,482,564	1,114,285
Minority interests	(489,125)	(375,289)	(211,532)	(247,716)	(37,987)
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE EXTRAORDINARY ITEMS	7,398,938	6,427,043	5,090,629	2,234,848	1,076,298
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) ATTRIBUTABLE TO SHAREHOLDERS	7,398,938	6,427,043	5,090,629	2,234,848	1,076,298
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	15,487,533	9,540,490	4,449,861	2,695,013	1,618,715
	----------------	----------------	----------------	----------------	----------------
As restated	15,487,533	9,540,490	4,449,861	2,695,013	1,618,715
	----------------	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	22,886,471	15,967,533	9,540,490	4,929,861	2,695,013
DIVIDENDS - Ordinary (paid & proposed)	-	(480,000)	-	(480,000)	-
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	22,886,471	15,487,533	9,540,490	4,449,861	2,695,013
	=============	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Bank overdraft	-	46,128	31,332	-	-
Bankers' acceptance	-	9,382	21,415	-	-
Hire purchase	-	46,851	39,848	-	-
Lease interest	-	-	-	30,749	22,818
Term loan / Borrowing	-	343,535	320,821	-	-
Others	-	14,451	-	91,129	11,549
	----------------	----------------	----------------	----------------	----------------
	-	460,347	413,416	121,878	34,367
	=============	=============	=============	=============	=============

BALANCE SHEET

TRUWATER COOLING TOWERS SDN. BHD.

ASSETS EMPLOYED:
FIXED ASSETS	17,064,927	17,288,316	15,671,832	5,301,173	2,592,864
Investment properties	-	606,944	606,944	606,944	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM INVESTMENTS/OTHER ASSETS	1,692,288	606,944	606,944	606,944	-
Goodwill on consolidation	-	1,090,149	1,157,635	1,225,120	-
	----------------	----------------	----------------	----------------	----------------
TOTAL INTANGIBLE ASSETS	-	1,090,149	1,157,635	1,225,120	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	18,757,215	18,985,409	17,436,411	7,133,237	2,592,864
Stocks	-	5,417,105	4,186,080	3,790,080	3,583,830
Trade debtors	-	17,512,255	13,914,318	13,274,546	9,748,177
Other debtors, deposits & prepayments	-	539,446	412,403	1,208,735	121,461
Short term deposits	-	1,714,350	1,668,704	2,296,760	2,590,995
Amount due from holding company	-	-	474,564	425,394	361,084
Amount due from related companies	-	-	8,920	-	-
Cash & bank balances	-	5,951,708	3,404,387	6,221,233	4,064,466
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	39,208,354	31,134,864	24,069,376	27,216,748	20,470,013
	----------------	----------------	----------------	----------------	----------------
TOTAL ASSET	57,965,569	50,120,273	41,505,787	34,349,985	23,062,877
	=============	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	-	15,739,672	14,709,759	20,315,162	15,912,664
Other creditors & accruals	-	2,775,685	2,945,034	3,126,013	1,442,240
Hire purchase & lease creditors	-	216,228	176,690	233,624	165,810
Bank overdraft	-	860,900	1,476,471	-	31,789
Short term borrowings/Term loans	-	585,903	589,591	160,821	33,654
Bill & acceptances payable	-	802,360	212,000	-	-
Amounts owing to director	-	653,375	1,180,417	1,176,577	-
Provision for taxation	-	727,934	32,174	65,780	38,409
Other liabilities	-	457,961	418,297	312,245	318,973
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	24,442,691	22,820,018	21,740,433	25,390,222	17,943,539
	----------------	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	14,765,663	8,314,846	2,328,943	1,826,526	2,526,474
	----------------	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	33,522,878	27,300,255	19,765,354	8,959,763	5,119,338
	=============	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	1,600,000	1,600,000	1,600,000	1,600,000	1,600,000
	----------------	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	1,600,000	1,600,000	1,600,000	1,600,000	1,600,000
RESERVES
Share premium	-	-	-	(2,340)	-
Exchange equalisation/fluctuation reserve	-	(1,114)	1,232	-	-
Retained profit/(loss) carried forward	22,886,471	15,487,533	9,540,490	4,449,861	2,695,013
Others	(979,819)	-	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL RESERVES	21,906,652	15,486,419	9,541,722	4,447,521	2,695,013
MINORITY INTEREST	1,469,291	1,145,046	769,757	561,186	62,487
	----------------	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	24,975,943	18,231,465	11,911,479	6,608,707	4,357,500
Long term loans	-	7,960,311	6,872,036	2,089,354	561,679
Hire purchase creditors	-	884,479	734,069	254,592	200,159
Deferred taxation	-	224,000	247,770	7,110	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	8,546,935	9,068,790	7,853,875	2,351,056	761,838
	----------------	----------------	----------------	----------------	----------------
	33,522,878	27,300,255	19,765,354	8,959,763	5,119,338
	=============	=============	=============	=============	=============

FINANCIAL RATIO

TRUWATER COOLING TOWERS SDN. BHD.

TYPES OF FUNDS
Cash	-	7,666,058	5,073,091	8,517,993	6,655,461
Net Liquid Funds	-	6,002,798	3,384,620	8,517,993	6,623,672
Net Liquid Assets	14,765,663	2,897,741	(1,857,137)	(1,963,554)	(1,057,356)
Net Current Assets/(Liabilities)	14,765,663	8,314,846	2,328,943	1,826,526	2,526,474
Net Tangible Assets	33,522,878	26,210,106	18,607,719	7,734,643	5,119,338
Net Monetary Assets	6,218,728	(6,171,049)	(9,711,012)	(4,314,610)	(1,819,194)
BALANCE SHEET ITEMS
Total Borrowings	-	11,310,181	10,060,857	2,738,391	993,091
Total Liabilities	32,989,626	31,888,808	29,594,308	27,741,278	18,705,377
Total Assets	57,965,569	50,120,273	41,505,787	34,349,985	23,062,877
Net Assets	33,522,878	27,300,255	19,765,354	8,959,763	5,119,338
Net Assets Backing	24,975,943	18,231,465	11,911,479	6,608,707	4,357,500
Shareholders' Funds	24,975,943	18,231,465	11,911,479	6,608,707	4,357,500
Total Share Capital	1,600,000	1,600,000	1,600,000	1,600,000	1,600,000
Total Reserves	21,906,652	15,486,419	9,541,722	4,447,521	2,695,013
LIQUIDITY (Times)
Cash Ratio	-	0.34	0.23	0.34	0.37
Liquid Ratio	-	1.13	0.91	0.92	0.94
Current Ratio	1.60	1.36	1.11	1.07	1.14
WORKING CAPITAL CONTROL (Days)
Stock Ratio	-	35	32	35	40
Debtors Ratio	-	114	105	124	108
Creditors Ratio	-	102	111	189	177
SOLVENCY RATIOS (Times)
Gearing Ratio	-	0.62	0.84	0.41	0.23
Liabilities Ratio	1.32	1.75	2.48	4.20	4.29
Times Interest Earned Ratio	-	20.43	16.60	25.68	45.32
Assets Backing Ratio	20.95	16.38	11.63	4.83	3.20
PERFORMANCE RATIO (%)
Operating Profit Margin	25.34	15.93	13.38	7.69	4.64
Net Profit Margin	17.91	11.44	10.57	5.71	3.28
Return On Net Assets	31.24	34.46	34.71	34.93	30.43
Return On Capital Employed	29.93	30.73	29.39	28.51	28.96
Return On Shareholders' Funds/Equity	29.62	35.25	42.74	33.82	24.70
Dividend Pay Out Ratio (Times)	-	0.07	0.00	0.21	0.00
NOTES TO ACCOUNTS
Contingent Liabilities	-	0	0	0	0

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.81
UK Pound	1	Rs.100.06
Euro	1	Rs.78.47

INFORMATION DETAILS

Analysis Done by :	SUM
Report Prepared by :	NIT

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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