MIRA INFORM REPORT

Report No. :	306358
Report Date :	09.02.2015

IDENTIFICATION DETAILS

Name :	SHREYA GEMS SDN. BHD.
Registered Office :	53A, Lorong Perda Selatan 1, Bandar Perda, 1st Floor, 14000 Bukit Mertajam, Pulau Pinang
Country :	Malaysia
Financials (as on) :	31.12.2013
Date of Incorporation :	13.11.2002
Com. Reg. No.:	598743-W
Legal Form :	Private Limited
LINE OF BUSINESS :	SELLING DIAMONDS, PRECIOUS STONES AND SEMI PRECIOUS STONES
No of Employees :	5 [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 But Correct
Litigation :	Clear

NOTES :

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

ECGC Country Risk Classification List – 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 Risk	A2
Moderate Low Risk	B1
Moderate Risk	B2
Moderate High Risk	C1
High Risk	C2
Very High Risk	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.

:

598743-W

COMPANY NAME

:

SHREYA GEMS SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

13/11/2002

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

53A, LORONG PERDA SELATAN 1, BANDAR PERDA, 1ST FLOOR, 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.

BUSINESS ADDRESS

:

75, LEBUH AH QUEE, 10200 GEORGE TOWN, PULAU PINANG, MALAYSIA.

TEL.NO.

:

04-2624013

FAX.NO.

:

04-2624013

CONTACT PERSON

:

PURAV ASHOK SHAH ( DIRECTOR )

INDUSTRY CODE

:

47733

PRINCIPAL ACTIVITY

:

SELLING DIAMONDS, PRECIOUS STONES AND SEMI PRECIOUS STONES

AUTHORISED CAPITAL

:

MYR 1,000,000.00 DIVIDED INTO
ORDINARY SHARE 1,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 1,000,000.00 DIVIDED INTO
ORDINARY SHARES 150,000 CASH AND 850,000 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 6,989,942 [2013]

NET WORTH

:

MYR 1,184,681 [2013]

STAFF STRENGTH

:

5 [2015]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

LIMITED

PAYMENT

:

POOR

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

MODERATE

CURRENCY EXPOSURE

:

HIGH

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) selling diamonds, precious stones and semi precious stones.

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

Share Capital History

Date	Authorised Shared Capital	Issue & Paid Up Capital
31/03/2014	MYR 1,000,000.00	MYR 1,000,000.00
16/05/2003	MYR 500,000.00	MYR 350,002.00
13/11/2002	MYR 500,000.00	MYR 2.00

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

Name	Address	IC/PP/Loc No	Shareholding	(%)
DATO' WIRA HJ AYOB BIN AZIZ +	36, TAMAN CEMPAKA, OFF JALAN PERMATA 9, ULU KELANG, 53300 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.	531102-02-5325 4534318	699,999.00	70.00
PURAV ASHOK SHAH +	3A-17-7, TANJUNG PARK, PERSIARAN LENGGUAS SATU, 10470 PULAU PINANG, PULAU PINANG, MALAYSIA.	Z1620850	300,000.00	30.00
MR. MOHD FADZIL BIN AHMAD +	23H, TAMAN SETIA BUDI, TIKAM BATU, 08000 SUNGAI PETANI, KEDAH, MALAYSIA.	570330-07-6257 5235003	1.00	0.00
			---------------	------
			1,000,000.00	100.00
			============	=====

+ Also Director

DIRECTORS

DIRECTOR 1

Name Of Subject	:	NIRALI PURAV SHAH
Address	:	3A-17-7, TANJUNG PARK, PERSIARAN LENGGUAS SATU, 10470 PULAU PINANG, PULAU PINANG, MALAYSIA.
IC / PP No	:	F1720455
Nationality	:	INDIAN
Date of Appointment	:	24/06/2004

DIRECTOR 2

Name Of Subject	:	SHAH PRIYANK DILIP
Address	:	PANTAI PANAROMA CONDOMINIUM, BLOCK 2 REMIS, UNIT 3A, JALAN 112H, OFF JALAN KERINCHI, 5TH FLOOR, 59200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	J1669722
Nationality	:	INDIAN
Date of Appointment	:	31/10/2014

DIRECTOR 3

Name Of Subject	:	MR. MOHD FADZIL BIN AHMAD
Address	:	23H, TAMAN SETIA BUDI, TIKAM BATU, 08000 SUNGAI PETANI, KEDAH, MALAYSIA.
IC / PP No	:	5235003
New IC No	:	570330-07-6257
Date of Birth	:	30/03/1957
Nationality	:	MALAYSIAN
Date of Appointment	:	13/11/2002

DIRECTOR 4

Name Of Subject	:	PURAV ASHOK SHAH
Address	:	3A-17-7, TANJUNG PARK, PERSIARAN LENGGUAS SATU, 10470 PULAU PINANG, PULAU PINANG, MALAYSIA.
IC / PP No	:	Z1620850
Nationality	:	INDIAN
Date of Appointment	:	18/11/2002

DIRECTOR 5

Name Of Subject	:	DATO' WIRA HJ AYOB BIN AZIZ
Address	:	36, TAMAN CEMPAKA, OFF JALAN PERMATA 9, ULU KELANG, 53300 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No	:	4534318
New IC No	:	531102-02-5325
Date of Birth	:	02/11/1953
Nationality	:	MALAYSIAN MALAY
Date of Appointment	:	13/11/2002

MANAGEMENT

1)	Name of Subject	:	PURAV ASHOK SHAH
	Position	:	DIRECTOR

AUDITOR

Auditor	:	RAGENDRAN & CO.
Auditor' Address	:	34, LORONG ABU SITI, 10400 GEORGETOWN, PULAU PINANG, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MS. ONG PHAIK KUN
	New IC No	:	870529-38-5158
	Address	:	653, LORONG DESA MAKMUR 9/4, TAMAN DESA MAKMUR 2, 09600 LUNAS, KEDAH, MALAYSIA.

2)	Company Secretary	:	MS. HENG PEI CHIEN
	New IC No	:	840910-07-5178
	Address	:	12A, LORONG IMPIAN RIA 1, TAMAN IMPIAN RIA, 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

ENCUMBRANCE (S)

No encumbrance was found in our databank at the time of investigation.

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	:	NO	Percentage	:	0%
Overseas	:	YES	Percentage	:	100%
Import Countries	:	INDIA

The Subject refused to provide any name of trade/service supplier and we are unable to conduct any trade enquiry. However, from financial historical data we conclude that :

OVERALL PAYMENT HABIT
Prompt 0-30 Days	[	]	Good 31-60 Days	[		]	Average 61-90 Days	[	]
Fair 91-120 Days	[	]	Poor >120 Days	[	X	]

CLIENTELE

Local	:	YES	Percentage	:	100%
Domestic Markets	:	MALAYSIA
Overseas	:	NO
Credit Term	:	AS AGREED
Payment Mode	:	CASH CHEQUES
Type of Customer	:	END USERS,DEALERS

OPERATIONS

Goods Traded

:

PRECIOUS STONES & SEMI PRECIOUS STONES

Competitor(s)

:

LUXURYCONCEPTS WATCHES AND JEWELLERY SDN BHD
POH KONG JEWELLERS SDN BHD
SINCERE WATCH SDN BHD
TOMEI CONSOLIDATED BHD
UPTOWN ALLIANCE (M) SDN BHD

Ownership of premises

:

LEASED/RENTED

Total Number of Employees:
YEAR	2015	2014	2011	2010
GROUP	N/A	N/A	N/A	N/A
COMPANY	5	5	5	5

Branch

:

NO

Other Information:

The Subject is principally engaged in the (as a / as an) selling diamonds, precious stones and semi precious stones.

The Subject sells imported stones especially from India.

The Subject sells variety of lucky and precious stones.

The Subject sells in both loose and large quantities.

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client	:	042624013
Current Telephone Number	:	04-2624013
Match	:	YES
Address Provided by Client	:	75, LEBUH AH QUEE,10200,PULAU PINANG,PULAU PINANG.
Current Address	:	75, LEBUH AH QUEE, 10200 GEORGE TOWN, PULAU PINANG, MALAYSIA.
Match	:	YES
Latest Financial Accounts	:	YES

Other Investigations

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

FINANCIAL ANALYSIS

Profitability
Turnover	:	Erratic	[	2009 - 2013	]
Profit/(Loss) Before Tax	:	Decreased	[	2009 - 2013	]
Return on Shareholder Funds	:	Unfavourable	[	1.83%	]
Return on Net Assets	:	Unfavourable	[	2.68%	]
The fluctuating turnover reflects the fierce competition among the existing and new market players. The dip in profit could be due to the stiff market competition which reduced the Subject's profit margin. The unfavourable return on shareholders' funds could indicate that the Subject was inefficient in utilising its assets to generate returns.
Working Capital Control
Stock Ratio	:	Unfavourable	[	82 Days	]
Debtor Ratio	:	Favourable	[	50 Days	]
Creditors Ratio	:	Unfavourable	[	96 Days	]
The Subject could be incurring higher holding cost. As its capital was tied up in stocks, it could face liquidity problems. The favourable debtors' days could be due to the good credit control measures implemented by the Subject. 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	:	Acceptable	[	0.81 Times	]
Current Ratio	:	Unfavourable	[	1.57 Times	]
The Subject's liquid ratio was slightly low. This could indicate that the Subject's working capital was slightly deficient. The Subject will have to improve its liquidity position either by obtaining short term financing or increase its paid up capital so that it can meet all its short term obligations as and when they fall due.
Solvency
Interest Cover	:	Favourable	[	11.65 Times	]
Gearing Ratio	:	Favourable	[	0.00 Times	]
The interest cover showed that the Subject was able to service the interest. The favourable interest cover could indicate that the Subject was making enough profit to pay for the interest accrued. The Subject had no gearing and hence it had virtually no financial risk. The Subject was financed by its shareholders' funds and internally generated fund. During the economic downturn, the Subject, having a zero gearing, will be able to compete better than those 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's liquidity was at an acceptable range. If the Subject is able to obtain further short term financing, it should be able to meet all its short term obligations. With the favourable interest cover, the Subject could be able to service all the accrued interest without facing any difficulties. The Subject was a zero gearing company, it was solely dependant on its shareholders to provide funds to finance its business. The Subject has good chance of getting loans, if the needs arises.
Overall financial condition of the Subject : LIMITED

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

INDUSTRY ANALYSIS

MSIC CODE
47733 : Retail sale of jewellery
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 2002, the Subject is a Private Limited company, focusing on selling diamonds, precious stones and semi precious stones. 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 1,000,000 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 5 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 managed to maintain an adequate liquidity level, indicating that the Subject has the ability to meet its financial obligations. Being a zero geared company, the Subject virtually has no financial risk as it is mainly dependent on its internal funds to finance its business. Given a positive net worth standing at MYR 1,184,681, the Subject should be able to maintain its business in the near terms.

Without a strong assets backing, the Subject may face difficulties in getting loans for its future expansion and continued growth . Investigation revealed that the Subject's supplies are 100% sourced from overseas countries. As an imported oriented company, its forex exposure is high. The Subject faces foreign currency fluctuation which may affect its overall operating costs.

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. 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 normally.

PROFIT AND LOSS ACCOUNT

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

SHREYA GEMS 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	FULL	FULL	FULL
Currency	MYR	MYR	MYR	MYR	MYR
TURNOVER	6,989,942	7,058,347	5,724,615	4,208,015	4,243,856
	----------------	----------------	----------------	----------------	----------------
Total Turnover	6,989,942	7,058,347	5,724,615	4,208,015	4,243,856
Costs of Goods Sold	(6,714,161)	(6,760,259)	-	-	-
	----------------	----------------	----------------	----------------	----------------
Gross Profit	275,781	298,088	-	-	-
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	28,981	31,574	24,826	15,640	55,765
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	28,981	31,574	24,826	15,640	55,765
Taxation	(7,285)	(5,709)	(3,199)	(893)	(12,293)
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	21,696	25,865	21,627	14,747	43,472
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	162,985	136,656	113,394	91,561	48,089
	----------------	----------------	----------------	----------------	----------------
As restated	162,985	136,656	113,394	91,561	48,089
	----------------	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	184,681	162,521	135,021	106,308	91,561
TRANSFER TO RESERVES - General	-	464	1,524	7,086	-
DIVIDENDS - Ordinary (paid & proposed)	-	-	111	-	-
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	184,681	162,985	136,656	113,394	91,561
	=============	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Others	2,720	3,611	-	-	-
	----------------	----------------	----------------	----------------	----------------
	2,720	3,611	-	-	-
	=============	=============

BALANCE SHEET

SHREYA GEMS SDN. BHD.

ASSETS EMPLOYED:
FIXED ASSETS	4,246	6,292	8,966	9,847	13,897
Deferred assets	501	1,060	0	0	0
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM INVESTMENTS/OTHER ASSETS	501	1,060	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	4,747	7,352	8,966	9,847	13,897
Stocks	1,576,271	434,895	-	-	-
Trade debtors	952,783	1,254,727	-	-	-
Other debtors, deposits & prepayments	136,586	195,630	-	-	-
Cash & bank balances	576,023	432,659	0	0	0
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	3,241,663	2,317,911	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL ASSET	3,246,410	2,325,263	8,966	9,847	13,897
	=============	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	1,765,825	989,091	-	-	-
Other creditors & accruals	99,865	129,087	-	-	-
Amounts owing to director	192,914	32,290	0	0	0
Provision for taxation	3,125	11,810	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	2,061,729	1,162,278	-	-	-
	----------------	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	1,179,934	1,155,633	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	1,184,681	1,162,985	8,966	9,847	13,897
	=============	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000
	----------------	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000
Retained profit/(loss) carried forward	184,681	162,985	136,656	113,394	91,561
	----------------	----------------	----------------	----------------	----------------
TOTAL RESERVES	184,681	162,985	136,656	113,394	91,561
	----------------	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	1,184,681	1,162,985	1,136,656	1,113,394	1,091,561
Retirement benefits provision	-	-	0	0	0
Others	-	-	(1,127,690)	(1,103,547)	(1,077,664)
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	-	-	(1,127,690)	(1,103,547)	(1,077,664)
	----------------	----------------	----------------	----------------	----------------
	1,184,681	1,162,985	8,966	9,847	13,897
	=============	=============	=============	=============	=============

FINANCIAL RATIO

SHREYA GEMS SDN. BHD.

TYPES OF FUNDS
Cash	576,023	432,659	0	0	0
Net Liquid Funds	576,023	432,659	0	0	0
Net Liquid Assets	(396,337)	720,738	0	0	0
Net Current Assets/(Liabilities)	1,179,934	1,155,633	0	0	0
Net Tangible Assets	1,184,681	1,162,985	8,966	9,847	13,897
Net Monetary Assets	(396,337)	720,738	1,127,690	1,103,547	1,077,664
BALANCE SHEET ITEMS
Total Borrowings	0	0	0	0	0
Total Liabilities	2,061,729	1,162,278	(1,127,690)	(1,103,547)	(1,077,664)
Total Assets	3,246,410	2,325,263	8,966	9,847	13,897
Net Assets	1,184,681	1,162,985	8,966	9,847	13,897
Net Assets Backing	1,184,681	1,162,985	1,136,656	1,113,394	1,091,561
Shareholders' Funds	1,184,681	1,162,985	1,136,656	1,113,394	1,091,561
Total Share Capital	1,000,000	1,000,000	1,000,000	1,000,000	1,000,000
Total Reserves	184,681	162,985	136,656	113,394	91,561
LIQUIDITY (Times)
Cash Ratio	0.28	0.37	0.00	0.00	0.00
Liquid Ratio	0.81	1.62	0.00	0.00	0.00
Current Ratio	1.57	1.99	0.00	0.00	0.00
WORKING CAPITAL CONTROL (Days)
Stock Ratio	82	22	0	0	0
Debtors Ratio	50	65	0	0	0
Creditors Ratio	96	53	0	0	0
SOLVENCY RATIOS (Times)
Gearing Ratio	0.00	0.00	0.00	0.00	0.00
Liabilities Ratio	1.74	1.00	(0.99)	(0.99)	(0.99)
Times Interest Earned Ratio	11.65	9.74	0.00	0.00	0.00
Assets Backing Ratio	1.18	1.16	0.01	0.01	0.01
PERFORMANCE RATIO (%)
Operating Profit Margin	0.41	0.45	0.43	0.37	1.31
Net Profit Margin	0.31	0.37	0.38	0.35	1.02
Return On Net Assets	2.68	3.03	276.89	158.83	401.27
Return On Capital Employed	2.68	3.03	276.89	158.83	401.27
Return On Shareholders' Funds/Equity	1.83	2.22	1.90	1.32	3.98
Dividend Pay Out Ratio (Times)	0.00	0.00	0.01	0.00	0.00
NOTES TO ACCOUNTS
Contingent Liabilities	0	0	0	0	0

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 61.73
UK Pound	1	Rs. 94.65
Euro	1	Rs. 70.78

INFORMATION DETAILS

Analysis Done by :	DIV
Report Prepared by :	DPT

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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