MIRA INFORM REPORT

Report No. :	323065
Report Date :	23.05.2015

IDENTIFICATION DETAILS

Name :	AAVANTI INDUSTRIES PTE LTD
Registered Office :	17, Phillip Street, 05-01, Grand Building, 048695
Country :	Singapore
Financials (as on) :	30.06.2013
Date of Incorporation :	21.07.1993
Com. Reg. No.:	199304717-K
Legal Form :	Private Limited
Line of Business :	Trading of edible oil, steel products, agriculture products.
No. of Employees :	14 [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 :	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 – December 31, 2014

Country Name	Previous Rating (30.09.2014)	Current Rating (31.12.2014)
Singapore	A1	A1

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

SINGAPORE - ECONOMIC OVERVIEW

Singapore has a highly developed and successful free-market economy. It enjoys a remarkably open and corruption-free environment, stable prices, and a per capita GDP higher than that of most developed countries. Unemployment is very low. The economy depends heavily on exports, particularly in consumer electronics, information technology products, pharmaceuticals, and on a growing financial services sector. The economy contracted 0.6% in 2009 as a result of the global financial crisis, but rebounded 15.1% in 2010, on the strength of renewed exports. Growth in 2014 was slower at 13.9%, largely a result of soft demand for exports during the second European recession. Over the longer term, the government hopes to establish a new growth path that focuses on raising productivity. Singapore has attracted major investments in pharmaceuticals and medical technology production and will continue efforts to establish Singapore as Southeast Asia's financial and high-tech hub. Singapore is a member of the 12-nation Trans-Pacific Partnership free trade agreement negotiations and, with the nine other ASEAN members, will form the ASEAN Economic Community in 2015.

Source : CIA

EXECUTIVE SUMMARY

REGISTRATION NO.	:	199304717-K
COMPANY NAME	:	AAVANTI INDUSTRIES PTE LTD
FORMER NAME	:	N/A
INCORPORATION DATE	:	21/07/1993
COMPANY STATUS	:	EXIST
LEGAL FORM	:	PRIVATE LIMITED
LISTED STATUS	:	NO
REGISTERED ADDRESS	:	17, PHILLIP STREET, 05-01, GRAND BUILDING, 048695, SINGAPORE.
BUSINESS ADDRESS	:	16, RAFFLES QUAY, HONG LEONG BUILDING, 39-03, 048581, SINGAPORE.
TEL.NO.	:	65-64386821/65388233
FAX.NO.	:	65-65382183
CONTACT PERSON	:	EASAW S/O V E THOMAS ( DIRECTOR )
PRINCIPAL ACTIVITY	:	TRADING OF EDIBLE OIL, STEEL PRODUCTS, AGRICULTURE PRODUCTS
ISSUED AND PAID UP CAPITAL	:	7,870,000.00 ORDINARY SHARE, OF A VALUE OF SGD 7,870,000.00
SALES	:	USD 2,470,938,427 [2013]
NET WORTH	:	USD 34,168,714 [2013]
STAFF STRENGTH	:	14 [2015]
BANKER (S)		DBS BANK LTD SOCIETE GENERALE OVERSEA-CHINESE BANKING CORPORATION LTD HSH NORDBANK AG THE HONGKONG & SHANGHAI BANKING CORPORATION LIMITED AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD OVERSEA-CHINESE BANKING CORPORATION LIMITED THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED
LITIGATION	:	CLEAR
FINANCIAL CONDITION	:	POOR
PAYMENT	:	GOOD
MANAGEMENT CAPABILITY	:	AVERAGE
COMMERCIAL RISK	:	LOW
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 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 of edible oil, steel products, agriculture products.

The immediate holding company of the Subject is MERDALE INVESTMENT COMPANY LIMITED, a company incorporated in JERSEY.

Share Capital History

Date	Issue & Paid Up Capital
20/05/2015	SGD 7,870,000.00

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

Name	Address	IC/PP/Loc No	Shareholding	(%)
EASAW S/O V E THOMAS +	2, WILBY ROAD, 276291, SINGAPORE.	S1206857C	1.00	0.00
ANJULA THOMAS NEE KHANDELWAL +	2, WILBY ROAD, 276291, SINGAPORE.	S2183449A	1.00	0.00
MERDALE INVESTMENT COMPANY LIMITED	SAINT JAMES HOUSE NEW, SAINT JAMES PLACE, SAINT HELIER JERSEY JE, 4 8WB, CHANNEL ISLANDS, JERSEY.	T08UF0334	7,869,998.00	100.00
			---------------	------
			7,870,000.00	100.00
			============	=====

+ Also Director

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

Local No	Country	Company	(%)	As At
200909117C	SINGAPORE	AAVANTI OFFSHORE PTE. LTD.	100.00	20/05/2015
201108552R	SINGAPORE	RF SOLUTIONS PTE. LTD.	100.00	20/05/2015
201019661D	SINGAPORE	INVESTMENT AND COMMERCIAL ENTERPRISE PTE. LTD.	99.90	20/05/2015
200107825M	SINGAPORE	JUST CONSOLIDATED PTE LTD	50.00	20/05/2015

DIRECTORS

DIRECTOR 1

Name Of Subject	:	EASAW S/O V E THOMAS
Address	:	2, WILBY ROAD, 276291, SINGAPORE.
IC / PP No	:	S1206857C
Nationality	:	SINGAPOREAN
Date of Appointment	:	15/02/1998

DIRECTOR 2

Name Of Subject	:	ANJULA THOMAS NEE KHANDELWAL
Address	:	2, WILBY ROAD, 276291, SINGAPORE.
IC / PP No	:	S2183449A
Nationality	:	SINGAPOREAN
Date of Appointment	:	21/07/1993

MANAGEMENT

1)	Name of Subject	:	EASAW S/O V E THOMAS
	Position	:	DIRECTOR

AUDITOR

Auditor	:	PRUDENTIAL PUBLIC ACCOUNTING CORPORATION
Auditor' Address	:	N/A

COMPANY SECRETARIES

1)	Company Secretary	:	LEE LAI NAH
	IC / PP No	:	S1607980D
	Address	:	73, CAVENAGH ROAD, 02-376, CAVENAGH GARDENS, 229624, SINGAPORE.

2)	Company Secretary	:	RAMANUJAM JEYAPRIYA
	IC / PP No	:	S7136299Z
	Address	:	565B, EAST COAST ROAD, IVORY APARTMENTS, 429080, SINGAPORE.

BANKING

Banking relations are maintained principally with :

1)

Name

:

DBS BANK LTD

2)

Name

:

SOCIETE GENERALE

3)

Name

:

OVERSEA-CHINESE BANKING CORPORATION LTD

4)

Name

:

HSH NORDBANK AG

5)

Name

:

THE HONGKONG & SHANGHAI BANKING CORPORATION LIMITED

6)

Name

:

AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD

7)

Name

:

OVERSEA-CHINESE BANKING CORPORATION LIMITED

8)

Name

:

THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED

ENCUMBRANCE (S)

Charge No	Creation Date	Charge Description	Chargee Name	Total Charge	Status
9504610	26/07/1995	N/A	SOCIETE GENERALE	-	Unsatisfied
200005623	21/11/2000	N/A	DBS BANK LTD.	-	Unsatisfied
200104805	03/10/2001	N/A	SOCIETE GENERALE	-	Unsatisfied
200205650	24/12/2002	N/A	SOCIETE GENERALE	-	Unsatisfied
C200305583	19/11/2003	N/A	STANDARD CHARTERED BANK	-	Unsatisfied
C200400106	07/01/2004	N/A	OVERSEA-CHINESE BANKING CORPORATION LIMITED	-	Unsatisfied
C200506980	10/11/2005	N/A	THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED	-	Unsatisfied
C200604202	29/06/2006	N/A	SOCIETE GENERALE	-	Unsatisfied
C200604204	29/06/2006	N/A	SOCIETE GENERALE	-	Unsatisfied
C200604205	29/06/2006	N/A	SOCIETE GENERALE	-	Unsatisfied
C200702493	02/04/2007	N/A	SOCIETE GENERALE	-	Unsatisfied
C200702495	02/04/2007	N/A	SOCIETE GENERALE	-	Unsatisfied
C200702496	02/04/2007	N/A	SOCIETE GENERALE	-	Unsatisfied
C200702643	05/04/2007	N/A	STANDARD CHARTERED BANK	-	Unsatisfied
C200702867	17/04/2007	N/A	STANDARD CHARTERED BANK	-	Unsatisfied
C200710757	06/12/2007	N/A	DBS BANK LTD.	-	Unsatisfied
C200710804	07/12/2007	N/A	DBS BANK LTD.	-	Unsatisfied
C200710812	07/12/2007	N/A	STANDARD CHARTERED BANK	-	Unsatisfied
C200800042	02/01/2008	N/A	OVERSEA-CHINESE BANKING CORPORATION LIMITED	-	Unsatisfied
C200803803	23/04/2008	N/A	DBS BANK LTD.	-	Unsatisfied
C200806325	11/07/2008	N/A	HSH NORDBANK AG	-	Unsatisfied
C200808077	28/08/2008	N/A	STANDARD CHARTERED BANK	USD 16,000,000.00	Unsatisfied
C200810012	03/11/2008	N/A	THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED	-	Unsatisfied
C201005563	02/07/2010	N/A	COOPERATIEVE CENTRALE RAIFFEISENBOERENLEENBANK B.A.(''RABOBANK NEDERLAND, RABOBANK INTERNATIONAL'')	-	Unsatisfied
C201005568	02/07/2010	N/A	COOPERATIEVE CENTRALE RAIFFEISENBOERENLEENBANK B.A.(''RABOBANK NEDERLAND, RABOBANK INTERNATIONAL'')	-	Unsatisfied
C201010231	29/10/2010	N/A	SOCIETE GENERALE	-	Unsatisfied
C201010233	29/10/2010	N/A	SOCIETE GENERALE	-	Unsatisfied
C201010236	29/10/2010	N/A	SOCIETE GENERALE	-	Unsatisfied
C201201940	20/02/2012	N/A	AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED	-	Unsatisfied
C201201989	21/02/2012	N/A	AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED	-	Unsatisfied
C201300643	14/01/2013	N/A	STATE BANK OF INDIA	-	Unsatisfied
C201308858	01/07/2013	N/A	CTBC BANK CO., LTD.	-	Unsatisfied
C201308860	01/07/2013	N/A	CTBC BANK CO., LTD.	-	Unsatisfied
C201402945	21/03/2014	N/A	SOCIETE GENERALE	-	Unsatisfied
C201402946	21/03/2014	N/A	SOCIETE GENERALE	-	Unsatisfied
C201402948	21/03/2014	N/A	SOCIETE GENERALE	-	Unsatisfied
C201413623	03/12/2014	N/A	COOPERATIEVE CENTRALE RAIFFEISENBOERENLEENBANK B.A.(''RABOBANK NEDERLAND, RABOBANK INTERNATIONAL'')	-	Unsatisfied
C201503699	24/03/2015	N/A	COOPERATIEVE CENTRALE RAIFFEISENBOERENLEENBANK B.A.(''RABOBANK NEDERLAND, RABOBANK INTERNATIONAL'')	-	Unsatisfied

LITIGATION CHECK AGAINST SUBJECT

* A check has been conducted in our databank againt the Subject whether the subject has been involved in any litigation.

No legal action was found in our databank.

No winding up petition was found in our databank.

PAYMENT RECORD

SOURCES OF RAW MATERIALS:
Local	:	YES	Percentage	:	40%
Overseas	:	YES	Percentage	:	60%

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

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

CLIENTELE

Local	:	YES	Percentage	:	60%
Domestic Markets	:	SINGAPORE
Overseas	:	YES	Percentage	:	40%
Export Market	:	WORLDWIDE
Credit Term	:	15 - 30 DAYS
Payment Mode	:	CHEQUES CASH LETTER OF CREDIT (LC)

OPERATIONS

Goods Traded

:

EDIBLE OIL, STEEL PRODUCTS, AGRICULTURE PRODUCTS

Ownership of premises

:

OWNED

Total Number of Employees:
YEAR	2015	2014	2013	2012	2011
GROUP	N/A	N/A	N/A	N/A	N/A
COMPANY	14	14	15	15	15

Branch

:

NO

Other Information:

The Subject is principally engaged in the (as a / as an) trading of edible oil, steel products, agriculture products.

The Subject refused to reveal detail information regarding to its business operation.

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client	:	65 65388233
Current Telephone Number	:	65-64386821/65388233
Match	:	YES
Address Provided by Client	:	17 PHILLIP STREET HEX 05-01, GRAND BUILDING SINGAPORE 048695
Current Address	:	16, RAFFLES QUAY, HONG LEONG BUILDING, 39-03, 048581, SINGAPORE.
Match	:	NO

Other Investigations

On 18th May 2015 we contacted one of the staff from the Subject and she provided some information.

The address provided belongs to the Subject's registered office.

FINANCIAL ANALYSIS

Profitability
Turnover	:	Erratic	[	2009 - 2013	]
Profit/(Loss) Before Tax	:	Decreased	[	2009 - 2013	]
Return on Shareholder Funds	:	Unfavourable	[	0.90%	]
Return on Net Assets	:	Favourable	[	40.73%	]
The fluctuating turnover reflects the fierce competition among the existing and new market players.The Subject's profit fell sharply because of the high operating costs incurred. The unfavourable return on shareholders' funds could indicate that the Subject was inefficient in utilising its assets to generate returns.
Working Capital Control
Stock Ratio	:	Favourable	[	1 Days	]
Debtor Ratio	:	Favourable	[	21 Days	]
Creditors Ratio	:	Favourable	[	19 Days	]
The Subject's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The favourable debtors' days could be due to the good credit control measures implemented by the Subject. 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	:	Acceptable	[	0.99 Times	]
Current Ratio	:	Unfavourable	[	1.02 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	:	Unfavourable	[	1.05 Times	]
Gearing Ratio	:	Unfavourable	[	4.13 Times	]
The Subject's interest cover was low. If its profits fall or when interest rate rises, it  may not be able to meet all its interest payment. 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 :
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. If there is a fall in the Subject's profit or any increase in interest rate, the Subject may not be able to generate sufficient cash-flow to service its interest. 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

SINGAPORE ECONOMIC / INDUSTRY OUTLOOK

Major Economic Indicators :	2009	2010	2011	2012	2013
Population (Million)	4.98	5.08	5.18	5.31	5.40
Gross Domestic Products ( % )	(0.8)	14.5	4.9	1.3	3.7
Consumer Price Index	0.6	2.8	5.2	4.6	2.4
Total Imports (Million)	356,299.3	423,221.8	459,655.1	474,554.0	466,762.0
Total Exports (Million)	391,118.1	478,840.7	514,741.2	510,329.0	513,391.0
Unemployment Rate (%)	3.2	2.2	2.1	2.0	1.9
Tourist Arrival (Million)	9.68	11.64	13.17	14.49	15.46
Hotel Occupancy Rate (%)	75.8	85.6	86.5	86.4	86.3
Cellular Phone Subscriber (Million)	1.37	1.43	1.50	1.52	1.97
Registration of New Companies (No.)	26,414	29,798	32,317	31,892	37,288
Registration of New Companies (%)	4.3	12.8	8.5	(1.3)	9.8
Liquidation of Companies (No.)	22,393	15,126	19,005	17,218	17,369
Liquidation of Companies (%)	113.4	(32.5)	25.6	9.4	(5.3)
Registration of New Businesses (No.)	26,876	23,978	23,494	24,788	22,893
Registration of New Businesses (%)	8.15	(10.78)	2.02	5.51	1.70
Liquidation of Businesses (No.)	23,552	24,211	23,005	22,489	22,598
Liquidation of Businesses (%)	11.4	2.8	(5)	(2.2)	0.5
Bankruptcy Orders (No.)	2,058	1,537	1,527	1,748	1,992
Bankruptcy Orders (%)	(11.5)	(25.3)	(0.7)	14.5	14.0
Bankruptcy Discharges (No.)	3,056	2,252	1,391	1,881	2,584
Bankruptcy Discharges (%)	103.7	(26.3)	(38.2)	35.2	37.4
INDUSTRIES ( % of Growth ) :
Agriculture
Production of Principal Crops	3.25	(0.48)	4.25	3.64	-
Fish Supply & Wholesale	(1.93)	(10.5)	12.10	(0.5)	-
Manufacturing *	71.5	92.8	100.0	100.3	102.0
Food, Beverages & Tobacco	90.4	96.4	100.0	103.5	103.5
Textiles	145.9	122.1	100.0	104.0	87.1
Wearing Apparel	211.0	123.3	100.0	92.1	77.8
Leather Products & Footwear	79.5	81.8	100.0	98.6	109.8
Wood & Wood Products	101.4	104.0	100.0	95.5	107.4
Paper & Paper Products	95.4	106.1	100.0	97.4	103.2
Printing & Media	100.9	103.5	100.0	93.0	86.1
Crude Oil Refineries	96.4	95.6	100.0	99.4	93.5
Chemical & Chemical Products	80.3	97.6	100.0	100.5	104.1
Pharmaceutical Products	49.1	75.3	100.0	109.7	107.2
Rubber & Plastic Products	101.2	112.3	100.0	96.5	92.9
Non-metallic Mineral	91.9	92.5	100.0	98.2	97.6
Basic Metals	92.6	102.2	100.0	90.6	76.5
Fabricated Metal Products	90.8	103.6	100.0	104.3	105.1
Machinery & Equipment	57.3	78.5	100.0	112.9	114.5
Electrical Machinery	86.8	124.1	100.0	99.3	108.5
Electronic Components	85.2	113.6	100.0	90.6	94.3
Transport Equipment	96.0	94.0	100.0	106.3	107.5
Construction	(36.9)	14.20	20.50	28.70	-
Real Estate	1.4	21.3	25.4	31.9	-
Services
Electricity, Gas & Water	1.70	4.00	7.00	6.30	-
Transport, Storage & Communication	3.90	12.80	7.40	5.30	-
Finance & Insurance	(16.4)	(0.4)	8.90	0.50	-
Government Services	4.50	9.70	6.90	6.00	-
Education Services	0.10	(0.9)	(1.4)	0.30	-
* Based on Index of Industrial Production (2011 = 100)

INDUSTRY ANALYSIS

INDUSTRY :	TRADING
The wholesale and retail trade sectors have expanded by 2.0% in the third quarter of 2014, extending the 1.8 per cent growth in the previous quarter. In 2013, the wholesale and retail sector expanded by 5.0%, after declining by 1.4% the year before. Growth of the sector was driven by the wholesale trade segment.
The domestic wholesale trade index has increased by 3.2% in the fourth quarter of 2013, moderating from the 6.6% growth in the previous quarter. The slower growth was due to a decline in the sales of furniture and household equipment (-12%) and petroleum and petroleum products (-0.6%). For the full year, the domestic wholesale trade index grew by 5.2% reversing the 2.2% decline in 2012. On the other hand, the foreign wholesale trade index has increased by a slower pace of 5.6% in the fourth quarter, compared to the 7.7% expansion in the preceding quarter. The slowdown was due to a fall in the sales of telecommunication equipment and computer (-3.8%) and petroleum and petroleum products (-2.5%). For the full year, the growth of the foreign wholesale trade index moderated slightly to 8.6% from 9.1% in the previous year.
In the fourth quarter of 2013, retail sales volume fell by 6.2%, extending the 5.6% decline in the previous quarter. Excluding motor vehicles, retail sales volume increased by 0.4%, a slower pace of expansion as compared to the 1.6% gain in the preceding quarter. The sales volume of motor vehicles fell by 33% in the fourth quarter of 2013, extending the 32% decline in the previous quarter. Meanwhile, the sales of several discretionary items also fell in the fourth quarter of 2013. For instance, the sales of telecommunications apparatus and computers fell by 12%, while the sales of furniture and household equipment declined by 5.4%.
For the full year, retail sales volume contracted by 4.3%, a reversal from the 1.3% expansion in 2012. Excluding motor vehicle sales, the retail sales volume grew by 1.1% in 2013, slower than the 1.7% increase in 2012. Watches and jewellery recorded the largest increase (11%) in sales in 2013, followed by optical goods and book (3%) and medical goods and toiletries (3%). By contrast, the sales of telecommunications apparatus and computer (-7.3%), furniture and household equipment (-4.2%) and petrol service stations (-1.4) declined in 2013.
OVERALL INDUSTRY OUTLOOK : AVERAGE GROWTH

CREDIT RISK EVALUATION & RECOMMENDATION

Incorporated in 1993, the Subject is a Private Limited company, focusing on trading of edible oil, steel products, agriculture products. The Subject has been in business for over two decades. It has built up a strong clientele base and satisfactory reputation will enable the Subject to further enhance its business in the near term. The Subject is expected to enjoy a stable market shares. A paid up capital of SGD 7,870,000 allows the Subject to expand its business more comfortably. With a strong backing from its holding company, the Subject enjoys timely financial assistance should the needs arise.

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 small company, the Subject's business operation is supported by 14 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. 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 USD 34,168,714, 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 supplier are from both the local and overseas countries. This will eliminates the risk of dependency on deliveries from a number of key suppliers and insufficient quantities of its raw materials. Overall the Subject has a good control over its resources.

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

The industry 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 SINGAPORE FINANCIAL REPORTING STANDARDS.

Financial Year End	2013-06-30	2012-06-30	2011-06-30	2010-06-30	2009-06-30
Months	12	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	FULL	FULL	FULL	FULL	FULL
Currency	USD	USD	USD	USD	USD
TURNOVER	2,470,938,427	2,487,347,793	1,986,406,114	1,405,288,793	1,552,931,671
Other Income	10,621,533	9,779,120	16,614,614	1,233,295	518,945
	----------------	----------------	----------------	----------------	----------------
Total Turnover	2,481,559,960	2,497,126,913	2,003,020,728	1,406,522,088	1,553,450,616
Costs of Goods Sold	(2,450,737,082)	(2,463,357,482)	(1,974,160,617)	(1,391,095,913)	(1,526,832,847)
	----------------	----------------	----------------	----------------	----------------
Gross Profit	30,822,878	33,769,431	28,860,111	15,426,175	26,617,769
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	622,237	8,588,110	16,797,345	2,518,599	1,219,488
SHARE OF PROFITS/(LOSSES) OF ASSOCIATED COMPANIES	-	-	-	(27,193)	(44,175)
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	622,237	8,588,110	16,797,345	2,491,406	1,175,313
Taxation	(285,954)	(170,876)	(330,675)	(1,062,733)	590,036
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	336,283	8,417,234	16,466,670	1,428,673	1,765,349
Minority interests	(29,697)	(308,413)	(26,558)	-	-
Pre-acquisition profit/(loss)	-	-	-	(29,000)	-
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE EXTRAORDINARY ITEMS	306,586	8,108,821	16,440,112	1,399,673	1,765,349
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) ATTRIBUTABLE TO SHAREHOLDERS	306,586	8,108,821	16,440,112	1,399,673	1,765,349
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	28,985,552	20,876,731	6,066,443	4,780,386	3,058,015
Prior year adjustment	-	-	(1,629,824)	-	-
	----------------	----------------	----------------	----------------	----------------
As restated	28,985,552	20,876,731	4,436,619	4,780,386	3,058,015
	----------------	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	29,292,138	28,985,552	20,876,731	6,180,059	4,823,364
TRANSFER TO RESERVES - General	-	-	-	(113,616)	(42,978)
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	29,292,138	28,985,552	20,876,731	6,066,443	4,780,386
	=============	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Trust receipts	2,358,566	3,427,473	1,514,877	1,437,564	2,612,546
Others	11,091,217	15,090,071	6,145,489	7,886,714	18,584,407
	----------------	----------------	----------------	----------------	----------------
	13,449,783	18,517,544	7,660,366	9,324,278	21,196,953
	=============	=============	=============	=============	=============
DEPRECIATION (as per notes to P&L)	128,168	83,103	10,174	544,361	402,158
	----------------	----------------	----------------	----------------	----------------
	128,168	83,103	10,174	544,361	402,158
	=============	=============	=============	=============	=============

BALANCE SHEET

ASSETS EMPLOYED:
FIXED ASSETS	3,108,884	3,050,521	188,125	31,117,383	7,849,251
Associated companies	758,795	715,964	646,439	550,465	289,573
Investment properties	498,336	504,222	510,108	515,994	521,880
Others	8,747,372	-	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM INVESTMENTS/OTHER ASSETS	10,004,503	1,220,186	1,156,547	1,066,459	811,453
Own goodwill	-	382,118	-	-	-
Goodwill on consolidation	-	-	-	11,401,019	11,157,640
Others	14,175,317	12,043,005	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL INTANGIBLE ASSETS	14,175,317	12,425,123	-	11,401,019	11,157,640
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	27,288,704	16,695,830	1,344,672	43,584,861	19,818,344
Stocks	9,552,322	16,968,494	24,703,382	1,862,688	1,303,687
Trade debtors	139,737,552	238,986,768	311,371,286	106,250,483	205,303,047
Other debtors, deposits & prepayments	20,404,592	71,977,961	40,081,193	1,488,673	1,156,200
Short term deposits	73,576,500	86,521,097	-	1,212,366	5,416,550
Amount due from associated companies	-	109,687	1,042,752	-	-
Cash & bank balances	33,946,608	20,932,635	48,379,879	14,563,410	5,134,487
Others	26,750,845	83,377,852	69,381,288	7,053,486	13,785,707
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	303,968,419	518,874,494	494,959,780	132,431,106	232,099,678
	----------------	----------------	----------------	----------------	----------------
TOTAL ASSET	331,257,123	535,570,324	496,304,452	176,015,967	251,918,022
	=============	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	127,626,630	149,137,257	196,068,170	63,100,340	61,463,917
Other creditors & accruals	12,164,635	28,841,595	20,116,031	3,542,687	2,247,968
Hire purchase & lease creditors	17,120	-	-	-	-
Short term borrowings/Term loans	140,604,112	262,985,296	231,233,304	73,143,147	160,811,237
Deposits from customers	685,758	22,476,591	-	-	-
Amounts owing to associated companies	1,705,425	-	-	-	-
Provision for taxation	340,699	311,131	343,161	994,856	251,876
Other liabilities	13,565,050	39,436,656	12,598,625	970,856	808,977
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	296,709,429	503,188,526	460,359,291	141,751,886	225,583,975
	----------------	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	7,258,990	15,685,968	34,600,489	(9,320,780)	6,515,703
	----------------	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	34,547,694	32,381,798	35,945,161	34,264,081	26,334,047
	=============	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	4,779,070	4,779,070	4,779,070	4,779,070	4,779,070
	----------------	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	4,779,070	4,779,070	4,779,070	4,779,070	4,779,070
Revaluation reserve	-	-	-	22,443,287	-
Exchange equalisation/fluctuation reserve	(484,925)	(304,583)	18,868	-	-
Retained profit/(loss) carried forward	29,292,138	28,985,552	20,876,731	6,066,443	4,780,386
Others	-	(2,020,870)	9,814,553	(512,902)	(774,718)
	----------------	----------------	----------------	----------------	----------------
TOTAL RESERVES	28,807,213	26,660,099	30,710,152	27,996,828	4,005,668
MINORITY INTEREST	582,431	562,667	48,550	1,116,957	31,261
	----------------	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	34,168,714	32,001,836	35,537,772	33,892,855	8,815,999
Long term loans	378,980	379,962	407,389	371,226	17,518,048
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	378,980	379,962	407,389	371,226	17,518,048
	----------------	----------------	----------------	----------------	----------------
	34,547,694	32,381,798	35,945,161	34,264,081	26,334,047
	=============	=============	=============	=============	=============

FINANCIAL RATIO

TYPES OF FUNDS
Cash	107,523,108	107,453,732	48,379,879	15,775,776	10,551,037
Net Liquid Funds	107,523,108	107,453,732	48,379,879	15,775,776	10,551,037
Net Liquid Assets	(2,293,332)	(1,282,526)	9,897,107	(11,183,468)	5,212,016
Net Current Assets/(Liabilities)	7,258,990	15,685,968	34,600,489	(9,320,780)	6,515,703
Net Tangible Assets	20,372,377	19,956,675	35,945,161	22,863,062	15,176,407
Net Monetary Assets	(2,672,312)	(1,662,488)	9,489,718	(11,554,694)	(12,306,032)
BALANCE SHEET ITEMS
Total Borrowings	141,000,212	263,365,258	231,640,693	73,514,373	178,329,285
Total Liabilities	297,088,409	503,568,488	460,766,680	142,123,112	243,102,023
Total Assets	331,257,123	535,570,324	496,304,452	176,015,967	251,918,022
Net Assets	34,547,694	32,381,798	35,945,161	34,264,081	26,334,047
Net Assets Backing	34,168,714	32,001,836	35,537,772	33,892,855	8,815,999
Shareholders' Funds	34,168,714	32,001,836	35,537,772	33,892,855	8,815,999
Total Share Capital	4,779,070	4,779,070	4,779,070	4,779,070	4,779,070
Total Reserves	28,807,213	26,660,099	30,710,152	27,996,828	4,005,668
LIQUIDITY (Times)
Cash Ratio	0.36	0.21	0.11	0.11	0.05
Liquid Ratio	0.99	1.00	1.02	0.92	1.02
Current Ratio	1.02	1.03	1.08	0.93	1.03
WORKING CAPITAL CONTROL (Days)
Stock Ratio	1	2	5	0	0
Debtors Ratio	21	35	57	28	48
Creditors Ratio	19	22	36	17	15
SOLVENCY RATIOS (Times)
Gearing Ratio	4.13	8.23	6.52	2.17	20.23
Liabilities Ratio	8.69	15.74	12.97	4.19	27.58
Times Interest Earned Ratio	1.05	1.46	3.19	1.27	1.06
Assets Backing Ratio	4.26	4.18	7.52	4.78	3.18
PERFORMANCE RATIO (%)
Operating Profit Margin	0.03	0.35	0.85	0.18	0.08
Net Profit Margin	0.01	0.33	0.83	0.10	0.11
Return On Net Assets	40.73	83.71	68.04	34.48	84.96
Return On Capital Employed	28.53	59.74	67.95	25.26	59.62
Return On Shareholders' Funds/Equity	0.90	25.34	46.26	4.13	20.02
Dividend Pay Out Ratio (Times)	0.00	0.00	0.00	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.63.57
UK Pound	1	Rs.99.67
Euro	1	Rs.70.83

INFORMATION DETAILS

Analysis Done by :	DIV
Report Prepared by :	VNT

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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