MIRA INFORM REPORT

Report No. :	305675
Report Date :	05.02.2015

IDENTIFICATION DETAILS

Name :	PUSHPA METAL SDN. BHD.
Registered Office :	177-A, Jalan Batu Tiga Lama, 41300 Klang, Selangor
Country :	Malaysia
Financials (as on) :	31.12.2013
Date of Incorporation :	01.10.1996
Com. Reg. No.:	404344-U
Legal Form :	Private Limited Company
Line of Business :	· Engaged in trading and recycling of Metal & Metal Products.  · Subject deals with Scrap Metals, Aluminium, Brass & Copper. · Subject also engaged in the Recycling Activities.
No of Employees :	30 [2015]

RATING & COMMENTS

MIRA’s Rating :

B

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

Status :	Moderate
Payment Behaviour :	Slow
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 – December 31, 2014

Country Name	Previous Rating (30.09.2014)	Current Rating (31.12.2014)
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.

:

404344-U

COMPANY NAME

:

PUSHPA METAL SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

01/10/1996

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

177-A, JALAN BATU TIGA LAMA, 41300 KLANG, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

:

LOT 726-16B, JALAN SUNGAI RASA, 40200 SHAH ALAM, SELANGOR, MALAYSIA.

TEL.NO.

:

03-55193902

FAX.NO.

:

03-55193920

CONTACT PERSON

:

SHANMUGANATHAN A/L V.VELUCHETTY ( DIRECTOR )

INDUSTRY CODE

:

46622

PRINCIPAL ACTIVITY

:

· Engaged in trading and recycling of Metal & Metal Products. 

· Subject deals with Scrap Metals, Aluminium, Brass & Copper.

· Subject also engaged in the Recycling Activities. 

AUTHORISED CAPITAL

:

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

ISSUED AND PAID UP CAPITAL

:

MYR 2,000,000.00 DIVIDED INTO 
ORDINARY SHARES 2,000,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 20,535,119 [2013]

NET WORTH

:

MYR 2,660,727 [2013]

STAFF STRENGTH

:

30 [2015]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

Slow

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

N/A

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) trading and recycling of metal, metal products.

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

Share Capital History

Date	Authorised Shared Capital	Issue & Paid Up Capital
30/06/2014	MYR 5,000,000.00	MYR 2,000,000.00
10/03/2009	MYR 1,000,000.00	MYR 1,000,000.00
14/06/2005	MYR 1,000,000.00	MYR 850,000.00
28/01/2000	MYR 500,000.00	MYR 500,000.00

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

Name	Address	IC/PP/Loc No	Shareholding	(%)
MR. SHANMUGANATHAN A/L V. VELUCHETTY +	2, JALAN MAHKOTA 1, BANDAR BARU KLANG, 41150 KLANG, SELANGOR, MALAYSIA.	611120-71-5063 8210040	1,200,000.00	60.00
MS. PUSHPAVALLI A/P PUNUSAMY +	2, JALAN MAHKOTA 1, BANDAR BARU KLANG, 41150 KLANG, SELANGOR, MALAYSIA.	661211-02-5004 A0540196	800,000.00	40.00
			---------------	------
			2,000,000.00	100.00
			============	=====

+ Also Director

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MS. PUSHPAVALLI A/P PUNUSAMY
Address	:	2, JALAN MAHKOTA 1, BANDAR BARU KLANG, 41150 KLANG, SELANGOR, MALAYSIA.
IC / PP No	:	A0540196
New IC No	:	661211-02-5004
Date of Birth	:	11/12/1966
Nationality	:	MALAYSIAN
Date of Appointment	:	01/10/1996

DIRECTOR 2

Name Of Subject	:	MR. SHANMUGANATHAN A/L V. VELUCHETTY
Address	:	2, JALAN MAHKOTA 1, BANDAR BARU KLANG, 41150 KLANG, SELANGOR, MALAYSIA.
IC / PP No	:	8210040
New IC No	:	611120-71-5063
Date of Birth	:	20/11/1961
Nationality	:	MALAYSIAN
Date of Appointment	:	01/10/1996

MANAGEMENT

1)	Name of Subject	:	SHANMUGANATHAN A/L V.VELUCHETTY
	Position	:	DIRECTOR

AUDITOR

Auditor	:	C T ANG & COMPANY
Auditor' Address	:	12A-02-2, LORONG BATU NILAM 4A, BANDAR BUKIT TINGGI, 41200 KLANG, SELANGOR, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MR. S. RAVICHANDER A/L V. SUPPIAH
	IC / PP No	:	6753601
	New IC No	:	620226-10-5671
	Address	:	41, JALAN BATAI LAUT 2, TAMAN BUKIT CEMERLANG, 41300 KLANG, SELANGOR, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

ENCUMBRANCE (S)

Charge No	Creation Date	Charge Description	Chargee Name	Total Charge	Status
1	27/07/2005	LIEN ON FIXED DEPOSIT	BUMIPUTRA-COMMERCE BANK BHD	MYR 400,000.00	Unsatisfied
2	24/04/2008	FACILITIES AGREEMENT, THIRD PARTY ASSIGNMENT AND POWER OF ATTORNEY	CIMB BANK BERHAD	MYR 1,918,125.00	Unsatisfied
3	29/01/2014	TERM LOAN AGREEMENT, DEED OF ASSIGNMENT AND POWER OF ATTORNEY	ALLIANCE BANK MALAYSIA BERHAD	-	Unsatisfied
4	29/01/2014	TERM LOAN AGREEMENT, DEED OF ASSIGNMENT AND POWER OF ATTORNEY	ALLIANCE BANK MALAYSIA BERHAD	-	Unsatisfied

LITIGATION CHECK AGAINST SUBJECT

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

No legal action was found in our databank.

No winding up petition was found in our databank.

DEFAULTER CHECK AGAINST SUBJECT

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

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	[	]	Poor >120 Days	[	X	]

CLIENTELE

Local	:	N/A
Overseas	:	N/A

The Subject refused to disclose its clientele. 

OPERATIONS

Goods Traded

:

METAL

Total Number of Employees:
YEAR	2015
GROUP	N/A
COMPANY	30

Branch

:

NO

Other Information:

The Subject is principally engaged in the (as a / as an) trading and recycling of metal & metal products. 

The Subject deals with scrap metals, aluminium, brass & copper.

The Subject also engaged in the recycling activities. 

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client	:	03-55193902/03-55131040
Current Telephone Number	:	03-55193902
Match	:	YES
Address Provided by Client	:	NO 726-16B JALAN SUNGAI RASA 40200 SHAH ALAM, SELANGOR DARUL EHSAN
Current Address	:	LOT 726-16B, JALAN SUNGAI RASA, 40200 SHAH ALAM, SELANGOR, MALAYSIA.
Match	:	YES
Latest Financial Accounts	:	YES

Other Investigations

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

FINANCIAL ANALYSIS

Profitability
Turnover	:	Increased	[	2009 - 2013	]
Profit/(Loss) Before Tax	:	Decreased	[	2009 - 2013	]
Return on Shareholder Funds	:	Unfavourable	[	(29.02%)	]
Return on Net Assets	:	Unfavourable	[	(18.87%)	]
The Subject's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The Subject incurred losses during the year due to the inefficient control of its operating costs. The Subject's unfavourable returns on shareholders' funds indicate the management's inefficiency in utilising its assets to generate returns.
Working Capital Control
Stock Ratio	:	Unfavourable	[	72 Days	]
Debtor Ratio	:	Acceptable	[	60 Days	]
Creditors Ratio	:	Favourable	[	0 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 management was quite efficient in handling its debtors. The Subject's debtors days were at an acceptable range, thus the risk of its debts turning bad was minimised. 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	:	Unfavourable	[	0.47 Times	]
Current Ratio	:	Unfavourable	[	0.74 Times	]
A low liquid ratio means that the Subject may be facing working capital deficiency. If the Subject cannot obtain additional financing or injection of fresh capital, it may face difficulties in meeting its short term obligations.
Solvency
Interest Cover	:	Unfavourable	[	(5.22 Times)	]
Gearing Ratio	:	Unfavourable	[	1.31 Times	]
The Subject incurred losses in the year. It did not generate sufficient income to service its interest.  If the situation does not improve, the Subject may be vulnerable to default in servicing the interest. The Subject was highly geared, thus it had a high financial risk. The Subject was dependent on loans to finance its business needs. In times of economic downturn and / or high interest rate, the Subject will become less profitable and competitive than other firms in the same industry, which are lowly geared. This is because the Subject has to service the interest and to repay the loan, which will erode part of its profits. The profits will fluctuate depending on the Subject's turnover and the interest it needs to pay.
Overall Assessment :
Although the Subject's turnover increased its profits however showed a reverse trend. The losses could be due to the management's failure to maintain its competitiveness in the market. Due to its weak liquidity position, the Subject will be faced with problems in meeting all its short term obligations if no short term loan is obtained or additional capital injected into the Subject. The Subject's interest cover was negative, indicating that it did not generate sufficient income to service its interest. If its result does not show impressive improvements or succeed obtaining short term financing or capital injection, it may not be able to service its interest and repay the loans. The Subject's gearing level was high and its going concern will be in doubt if there is no injection of additional shareholders' funds in times of economic downturn and / or high interest rates.
Overall financial condition of the Subject : POOR

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

Major Economic Indicators:	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
# Based On Manufacturing Production Index (Source : Department of Statistics / Economic Report / Bank Negara Report)

INDUSTRY ANALYSIS

MSIC CODE
46622 : Wholesale of ferrous and non-ferrous semi-finished metal ores and products n.e.c.
INDUSTRY :	TRADING
The wholesale and retail trade is expected to increase 7.1% in 2015 (2014: 7.7%) driven by strong domestic consumption and higher tourist arrivals following the Malaysia Year of Festivals 2015. Besides, in 2014, the wholesale and retail trade subsector is expected to increase 7.7% (2013: 6.4%) supported by strong domestic consumption.
According to Retail Group Malaysia (RGM), the pharmacy and personal care sub-sector had slow growth rate of 2.6% for the first quarter of 2014, while "other specialty stores" grew at a rate of 3.5%. During the first quarter of 2014, fashion and fashion accessories recorded a sustainable growth of 6.3% as compared with the same period last year (3.6%).
The retail segment increased 10.1% (January - June 2013: 7.1%) attributed to brisk sales in retail outlets such as hypermarkets and large-scale superstores. Since the launch of the Small Retailer Transformation programme (TUKAR) in January 2011 up to end-July 2014, 1,761 small retailer stores (end-July 2013: 1,381) have been modernized to improve their competitiveness. In addition, the strong growth of the retail segment was supported by 1Malaysia Unified Sales held from 29 June 2014 to 1 September 2014 to attract foreign and local tourists to shop in Malaysia. Meanwhile, the wholesale segment expanded 8.2% (January - June 2013: 4.9%) due to higher sales of non-agricultural intermediate products, such as petrol, diesel, lubricants and household goods. Furthermore, food and beverage outlets, laundry outlets, car wash centres, abd health and beauty outlets took a hit from the water rationing in the Klang Valley since February this year.
On the other hand, in 2014, Malaysia's total trade is expected to grow 5.2% to RM1.44 trillion (2013: 4.5%; RM1.37 trillion) underpinned by recovery in key advanced economies, resilient regional demand, and partly due to the base effect arising from sluggish exports in the corresponding period last year. Gross exports are anticipated to expand 6% to RM762.8 billion while import decreased 4.3% to RM677.2 billion (2013: 2.4%; RM719.8 billion; 7%; RM 649.1 billion). Consequently, the trade surplus is expected to be higher at RM85.6 billion or 7.9% of GDP in 2014 (2013: RM70.7 billion; 7.2%).
Furthermore, gross exports rebounded by 10.7% to RM441.3 billion during the first seven months of 2014 (January - July 2013: -2.8%; RM398.5 billion), with manufactured and mining exports rising at a double digit pace of 11.4% and 12.5%. Shipment of agriculture products grew at a slower pace of 2.7%, primarily due to lower receipts of crude rubber (-24.6%) while export growth of other commodities remained steady. Consequently, exports of manufactured and mining products are expected to grow 6.1% and 6.4% in 2014 (2013: 5.1%; 3.3%). Meanwhile, agriculture exports are expected to rebound sharply by 4.5% in 2014 (2013: -14.4%) despite moderating commodity prices. Malaysia's top 3 trading partners are China, Singapore, and Japan.
Over 60% of Gross Domestic Product (GDP) is contributed by domestic consumption. Therefore the wholesale and retail sector plays a crucial role in driving Malaysia's growth over the next decade despite the ongoing global economic slowdown. By 2020, Malaysia's wholesale and retail sector is expected to boost the country's total Gross National Income (GNI) by RM156 billion, creating 454,190 new jobs.
OVERALL INDUSTRY OUTLOOK : Average Growth

CREDIT RISK EVALUATION & RECOMMENDATION

Incorporated in 1996, the Subject is a Private Limited company, focusing on trading and recycling of metal, metal products. Having been in the industry for over a decade, the Subject has achieved a certain market share and has built up a satisfactory reputation in the market. It should have received supports from its regular customers. A paid up capital of MYR 2,000,000 allows the Subject to expand its business more comfortably. However, the Subject does not have strong shareholders’ backing. Without a strong shareholders' backing, the opportunity of the Subject to expand its business is limited.

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. 

Despite the higher turnover, the Subject suffered pre-tax losses which reflected a highly competitive business environment. The Subject has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. Due to its weak liquidity position, the Subject may face working capital deficiency in meeting its short term financial obligations if no fresh capital are injected into the Subject. The high gearing ratio clearly implied that the Subject was supported by more debt than equity. Thus, the Subject is exposed to high financial risk. Given a positive net worth standing at MYR 2,660,727, the

Subject should be able to maintain its business in the near terms. 

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

The industry shows an upward trend and this trend is very likely to sustain in the near terms. 

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

PROFIT AND LOSS ACCOUNT

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

PUSHPA METAL SDN. BHD.

Financial Year End	2013-12-31	2012-12-31	2011-12-31	2010-12-31	2009-12-31
Months	12	12	12	12	12
Consolidated Account	Company	Company	Company	Company	Company
Audited Account	YES	YES	YES	YES	YES
Unqualified Auditor's Report (Clean Opinion)	YES	YES	YES	YES	YES
Financial Type	FULL	FULL	SUMMARY	SUMMARY	SUMMARY
Currency	MYR	MYR	MYR	MYR	MYR
TURNOVER	20,535,119	16,028,967	14,493,534	15,651,483	11,819,568
	----------------	----------------	----------------	----------------	----------------
Total Turnover	20,535,119	16,028,967	14,493,534	15,651,483	11,819,568
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	(743,952)	626,079	71,154	430,542	103,791
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	(743,952)	626,079	71,154	430,542	103,791
Taxation	(28,240)	(137,339)	(48,728)	(110,654)	(60,218)
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	(772,192)	488,740	22,426	319,888	43,573
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	1,432,919	944,179	921,753	601,865	558,292
	----------------	----------------	----------------	----------------	----------------
As restated	1,432,919	944,179	921,753	601,865	558,292
	----------------	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	660,727	1,432,919	944,179	921,753	601,865
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	660,727	1,432,919	944,179	921,753	601,865
	=============	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Bank overdraft	13,944	15,167	-	-	-
Bankers' acceptance	51,672	64,702	-	-	-
Hire purchase	7,651	-	-	-	-
Term loan / Borrowing	15,189	23,276	-	-	-
Others	31,104	23,739	-	-	-
	----------------	----------------	----------------	----------------	----------------
	119,560	126,884	-	-	-
	=============	=============

BALANCE SHEET

PUSHPA METAL SDN. BHD.

ASSETS EMPLOYED:
FIXED ASSETS	6,430,642	3,082,187	3,484,968	3,587,395	3,337,206
Investments	945,135	528,904	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM INVESTMENTS/OTHER ASSETS	945,135	528,904	103,503	103,503	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	7,375,777	3,611,091	3,588,471	3,690,898	3,337,206
Stocks	4,058,160	5,513,035	-	-	-
Trade debtors	3,386,826	5,149,527	-	-	-
Other debtors, deposits & prepayments	3,868,959	444,089	-	-	-
Short term deposits	-	1,092,194	-	-	-
Cash & bank balances	49,338	71,440	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	11,363,283	12,270,285	3,963,112	3,392,877	3,249,739
	----------------	----------------	----------------	----------------	----------------
TOTAL ASSET	18,739,060	15,881,376	7,551,583	7,083,775	6,586,945
	=============	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	14,952	52,375	-	-	-
Other creditors & accruals	7,649,536	7,744,005	-	-	-
Hire purchase & lease creditors	129,107	-	-	-	-
Bank overdraft	44,146	221,085	-	-	-
Short term borrowings/Term loans	21,137	198,137	-	-	-
Bill & acceptances payable	2,636,280	1,928,000	-	-	-
Amounts owing to director	4,916,387	2,043,729	-	-	-
Provision for taxation	19,093	18,346	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	15,430,638	12,205,677	5,044,072	-	4,254,637
	----------------	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	(4,067,355)	64,608	(1,080,960)	3,392,877	(1,004,898)
	----------------	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	3,308,422	3,675,699	2,507,511	7,083,775	2,332,308
	=============	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	2,000,000	2,000,000	1,000,000	1,000,000	1,000,000
	----------------	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	2,000,000	2,000,000	1,000,000	1,000,000	1,000,000
Retained profit/(loss) carried forward	660,727	1,432,919	944,179	921,753	601,865
	----------------	----------------	----------------	----------------	----------------
TOTAL RESERVES	660,727	1,432,919	944,179	921,753	601,865
	----------------	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	2,660,727	3,432,919	1,944,179	1,921,753	1,601,865
Long term loans	108,107	171,851	-	-	-
Hire purchase creditors	539,588	-	-	-	-
Deferred taxation	-	70,929	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	647,695	242,780	563,332	5,162,022	730,443
	----------------	----------------	----------------	----------------	----------------
	3,308,422	3,675,699	2,507,511	7,083,775	2,332,308
	=============	=============	=============	=============	=============

FINANCIAL RATIO

PUSHPA METAL SDN. BHD.

TYPES OF FUNDS
Cash	49,338	1,163,634	-	-	-
Net Liquid Funds	(2,631,088)	(985,451)	-	-	-
Net Liquid Assets	(8,125,515)	(5,448,427)	(1,080,960)	3,392,877	(1,004,898)
Net Current Assets/(Liabilities)	(4,067,355)	64,608	(1,080,960)	3,392,877	(1,004,898)
Net Tangible Assets	3,308,422	3,675,699	2,507,511	7,083,775	2,332,308
Net Monetary Assets	(8,773,210)	(5,691,207)	(1,644,292)	(1,769,145)	(1,735,341)
BALANCE SHEET ITEMS
Total Borrowings	3,478,365	2,519,073	-	-	-
Total Liabilities	16,078,333	12,448,457	5,607,404	5,162,022	4,985,080
Total Assets	18,739,060	15,881,376	7,551,583	7,083,775	6,586,945
Net Assets	3,308,422	3,675,699	2,507,511	7,083,775	2,332,308
Net Assets Backing	2,660,727	3,432,919	1,944,179	1,921,753	1,601,865
Shareholders' Funds	2,660,727	3,432,919	1,944,179	1,921,753	1,601,865
Total Share Capital	2,000,000	2,000,000	1,000,000	1,000,000	1,000,000
Total Reserves	660,727	1,432,919	944,179	921,753	601,865
LIQUIDITY (Times)
Cash Ratio	0.00	0.10	-	-	-
Liquid Ratio	0.47	0.55	-	-	-
Current Ratio	0.74	1.01	0.79	-	0.76
WORKING CAPITAL CONTROL (Days)
Stock Ratio	72	126	-	-	-
Debtors Ratio	60	117	-	-	-
Creditors Ratio	0	1	-	-	-
SOLVENCY RATIOS (Times)
Gearing Ratio	1.31	0.73	-	-	-
Liabilities Ratio	6.04	3.63	2.88	2.69	3.11
Times Interest Earned Ratio	(5.22)	5.93	-	-	-
Assets Backing Ratio	1.65	1.84	2.51	7.08	2.33
PERFORMANCE RATIO (%)
Operating Profit Margin	(3.62)	3.91	0.49	2.75	0.88
Net Profit Margin	(3.76)	3.05	0.15	2.04	0.37
Return On Net Assets	(18.87)	20.48	2.84	6.08	4.45
Return On Capital Employed	(17.93)	19.32	2.84	6.08	4.45
Return On Shareholders' Funds/Equity	(29.02)	14.24	1.15	16.65	2.72
Dividend Pay Out Ratio (Times)	0.00	0.00	-	-	-

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.68
UK Pound	1	Rs.93.53
Euro	1	Rs.70.75

INFORMATION DETAILS

Analysis Done by :	KAR
Report Prepared by :	MNL

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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