MIRA
INFORM REPORT
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Report Date : |
04.12.2007 |
IDENTIFICATION
DETAILS
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Name : |
KISWIRE CORD SDN BHD |
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Registered Office : |
Suite 7E, Menara Ansar, 65 Jalan Trus, Level 7, 80000
Johor Bahru, Johor |
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Country : |
Malaysia |
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Financials (as on) : |
31.12.2006 |
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Date of Incorporation : |
21/08/2003 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Manufacturer of Steel Tyre Cord |
RATING &
COMMENTS
|
MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Satisfactory |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
* Adopted abbreviations : SC - Subject Company ( the company enquired by you)
N/A - Not Applicable
EXECUTIVE SUMMARY
LOCAL NO : 625666-K
COMPANY NAME : KISWIRE CORD SDN BHD
FORMER NAME : N/A
INCORPORATION DATE : 21/08/2003
COMPANY STATUS : EXIST
LEGAL STATUS : PRIVATE LIMITED COMPANY
LISTED STATUS : NO
REGISTERED ADDRESS : SUITE 7E, MENARA ANSAR, 65 JALAN TRUS, LEVEL 7,
80000 JOHOR BAHRU, JOHOR, MALAYSIA.
BUSINESS ADDRESS : 475, JALAN NIBONG, KAWASAN PERINDUSTRIAN TANJUNG
LANGSAT, 81707 PASIR GUDANG, JOHOR, MALAYSIA.
TEL NO : 07 - 2551475/5049
FAX NO : 07 - 2552475
CONTACT PERSON : LEE LIE MOON (MANAGING DIRECTOR)
INDUSTRY CODE : 27100
PRINCIPAL ACTIVITY : MANUFACTURER OF STEEL TYRE CORD
AUTHORISED CAPITAL : MYR100,000,000.00 DIVIDED INTO ORDINARY SHARE
100,000,000 OF MYR1.00 EACH.
ISSUED AND PAID UP CAPITAL : MYR60,004,706.00 DIVIDED INTO ORDINARY SHARE
60,004,706 CASH OF MYR1.00 EACH.
SALES : MYR195,307,093 [2006]
NET WORTH : MYR85,268,563 [2006]
STAFF STRENGTH : 200 [2007]
BANKER (S) : HSBC BANK MALAYSIA BHD
LITIGATION : CLEAR
FINANCIAL CONDITION : FAIR
PAYMENT : GOOD
MANAGEMENT CAPABILITY : AVERAGE
COMMERCIAL RISK : MODERATE
CURRENCY EXPOSURE : MODERATE
GENERAL REPUTATION : SATISFACTORY
INDUSTRY OUTLOOK : STRONG GROWTH
HISTORY / BACKGROUND
The SC 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 SC must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the SC 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 SC is insolvent. The SC 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 SC is principally engaged in the (as a / as an) manufacturer of steel tyre cord.
The SC is not listed on Bursa Malaysia (Malaysia Stock Exchange).
The SC is not qualified to be one of the Top Corporate Performers in the Malaysia 1000 (M1000) publication, a directory jointly published by Companies Commission of Malaysia (The Registrar Office), Minister of Domestic Trade and Consumer Affairs and our publication arm, BASIS Publications House Sdn Bhd.
The immediate holding company of the SC is KISWIRE SDN BHD, a company incorporated in MALAYSIA.
The ultimate holding company of the SC is KISWIRE LTD, a company incorporated in REPUBLIC OF KOREA.
The major shareholder(s) of the SC are shown as follows :
Name Address IC/PP/Loc
No: Shareholding
KISWIRE SDN BHD PLO
475, JALAN KELULI 2, PASIR GUDANG, 181952 30,600,002
81700
PASIR GUDANG, JOHOR, MALAYSIA.
KISWIRE TRADING (S) CO LTD 135 CECIL STREET, #06-06 LKN BUILDING, 23,403,744
069536,
SINGAPORE.
HONGDUK ENGINEERING LTD 363-5, SAMRAK DONG, SASANG KU, PUSAN, 6,000,960
KOREA.
--------------------
60,004,706
===========
+
Also Director
DIRECTORS
DIRECTOR 1
Name of Subject : PAIK IN KEUN
Address : BLOCK C, 12-E2, THE STRAITS VIEW CONDOMINIUM, 8 JALAN
PERMAS SELATAN, BANDAR BARU PERMAS JAYA, 81750 MASAI,
JOHOR, MALAYSIA.
IC / PP No. : MA0007795
Nationality : KOREAN
Date of Appointment : 21/08/2003
Remark : OLD P/P: P1037647 & JR1675212
DIRECTOR 2
Name of Subject : LEE LIE MOON
Address : BLOCK A, 18-W2 THE STRAITS VIEW CONDO, 8 JALAN PERMAS
SELATAN, JOHOR, MALAYSIA.
IC / PP No. : SG0007011
Nationality : KOREAN
Date of Appointment : 21/08/2003
Remark : OLD P/P: BS1148226
DIRECTOR 3
Name of Subject : HONG YOUNG CHUL
Address : 101, KUKI BILLA, 160-3, KUKI-DONG, JONGRO-KU SEOUL, KOREA.
IC / PP No. : JR2291669
Nationality : KOREAN
Date of Appointment : 18/12/2003
DIRECTOR 4
Name of Subject : SHIN DAE YONG
Address : 75, SOOME-DONG, BUNDANG-KU, SUNGNAM CITY, SUCHO-KU
SEOUL, KOREA.
IC / PP No. : JR1599049
Nationality : KOREAN
Date of Appointment : 19/12/2003
DIRECTOR 5
Name of Subject : CHOOI SOO SUNG
Address : 51-201, HYUNDAI VILLA, 7-51(9-5), YANGJAE-DONG, SUCHO-KU
SEOUL, KOREA.
IC / PP No. : JR1977495
Nationality : KOREAN
Date of Appointment : 19/12/2003
MANAGEMENT
1) Name of Subject : LEE LIE MOON
Position : MANAGING DIRECTOR
2) Name of Subject : MAHANI KASDI
Position : ACCOUNT MANAGER
3) Name of Subject : TAN BAN HUAT
Position : MARKETING MANAGER
4) Name of Subject : BELINDA WONG
Position : SALES MANAGER
5) Name of Subject : ZAINUDDIN ABDUL HAMID
Position : HUMAN RESOURCE MANAGER
AUDITOR
Auditor : KPMG
Auditors' Address : MENARA ANSAR, 65 JALAN TRUS, LEVEL 14, 80000 JOHOR BAHRU,
JOHOR, MALAYSIA.
COMPANY SECRETARY
1) Company Secretary : MS. ANG MUI KIOW
IC / PP No. : 7032746
New IC No. : 630530-01-5426
Address : 27, JALAN NIBONG 18, TAMAN DAYA, 81100 JOHOR BAHRU,
JOHOR, MALAYSIA.
Date of Appointment : 21/08/2003
BANKING
Banking relations are maintained principally with :
1) Banker Name : HSBC BANK MALAYSIA BHD
The SC enjoys normal banking routine with above mentioned banker(s).
The SC has bank charges with above mentioned banker(s).
ENCUMBRANCE (S)
ENCUMBRANCE 1
Date of Creation : 01 Jul 2004
Description of Charge : OPEN CHARGE
Amount Secured : N/A
Description of Property Affected : N/A
Name & Address of Chargee : HSBC BANK MALAYSIA BHD
Form 40 Dated
Registered and Numbered 1 In The Register of Charges
ENCUMBRANCE 2
Date of Creation : 01 Jul 2004
Description of Charge : OPEN CHARGE
Amount Secured : N/A
Description of Property Affected : N/A
Name & Address of Chargee : HSBC BANK MALAYSIA BHD
Form 40 Dated
Registered and Numbered 2 In The Register of Charges
ENCUMBRANCE 3
Date of Creation : 02 Dec 2004
Description of Charge : OPEN CHARGE
Amount Secured : N/A
Description of Property Affected : N/A
Name & Address of Chargee : HSBC BANK MALAYSIA BHD
Form 40 Dated
Registered and Numbered 3 In The Register of Charges
ENCUMBRANCE 4
Date of Creation : 25 Jul 2007
Description of Charge : 2ND DEBENTURE
Amount Secured : RM 30,000,000.00
Description of Property Affected : ALL & SINGULAR THE FIXED ASSETS OF THE COMPANY
Name & Address of Chargee : HSBC BANK MALAYSIA BHD
HSBC BANK BUILDING, 2 LEBOH AMPANG, LEVEL 2, 50100
KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
Form 40 Dated 06 Aug 2007
Registered and Numbered 4 In The Register of Charges
ENCUMBRANCE 5
Date of Creation : 25 Jul 2007
Description of Charge : 2ND LEGAL CHARGE
Amount Secured : RM 30,000,000.00
Description of Property Affected : ALL THAT PIECE OF LEASEHOLD INDUSTRIAL COMPLEX &
PRESENTLY HELD UNDER HSD 375494, PTD 3614, MUKIM
OF SG TIRAM, JOHOR BAHRU, JOHOR TOGETHER WITH
FACTORY-CUM-OFFICE TO ERECTED THEREON
Name & Address of Chargee : HSBC BANK MALAYSIA BHD
HSBC BANK BUILDING, 2 LEBOH AMPANG, 50100 KUALA
LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
Form 40 Dated 06 Aug 2007
Registered and Numbered 5 In The Register of Charges
LEGAL CHECK AGAINST THE SC
* A check has been conducted in our databank against the SC whether the subject has been
involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia
back dated since 1900.
No legal action was found in our databank.
No winding up petition was found in our data bank
PAYMENT RECORD
SOURCES OF RAW MATERIALS :
Local : YES Percentage : 40%
Overseas : YES Percentage : 60%
Import Countries : ASIA , EUROPE.
The SC 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 [ ] Good [ X ] Average [ ]
Fair [ ] Poor [ ]
CLIENTELE
Local : YES Percentage : 50%
Domestic Markets : PENINSULAR MALAYSIA.
Overseas : YES Percentage : 50%
Export Market : SINGAPORE , KOREA.
Credit Term : 30 DAYS.
Payment Mode : CHEQUES.
Type of Customer : END USERS .
OPERATIONS
Products Manufactured : STEEL TYRE CORD
Competitor(s) : AMSTEEL MILLS SDN BHD
LION CORPORATION BHD
MEGASTEEL SDN BHD
PERWAJA STEEL SDN BHD
SOUTHERN STEEL BHD
Ownership of premises : OWNED
Shifts : 2 SHIFTS
Total Number of Employees :
YEAR 2007 2006 2005
GROUP N/A N/A N/A
COMPANY 200 194 184
Branch : NO
RECENT DEVELOPMENT
We have checked with the Malaysian National News Agency's (BERNAMA) database, but no latest development was noted in our investigation.
CURRENT INVESTIGATION
Latest fresh investigations carried out on the SC indicated that :
Telephone Number Provided By Client : N/A
Current Telephone Number : 07-2551475/5049
Match : N/A
Address Provided By Client : 475, JALAN NIBONG, KAWASAN PERINDUSTRIAN
TANJUNG LANGSAT, 81707, PASIR GUDANG, JOHOR.
Current Address : 475, JALAN NIBONG, KAWASAN PERINDUSTRIAN
TANJUNG LANGSAT, 81707 PASIR GUDANG,
JOHOR, MALAYSIA.
Match : YES
Latest Financial Accounts : YES
Other Investigations
We conducted an interview with the SC's staff from Account Dept, Ms Farah. She furnished us some information on the SC.
FINANCIAL COMMENTS
Profitability :
Turnover : Increased [ 33.12% ]
Profit / ( Loss ) before tax : Increased [ 9.15% ]
Return on Shareholder Funds : Acceptable [ 15.64% ]
Return on Net Assets : Acceptable [ 16.69% ]
The increase in turnover could be due to the SC adopting an aggressive marketing strategy. The SC's management have been efficient in controlling its operating costs. The SC's management had generated acceptable return for its shareholders using its assets.
Working Capital Control :
Stocks Ratio : Unfavourable [ 95 Days ]
Debtors Ratio : Acceptable [ 64 Days ]
Creditors Ratio : Favourable [ 23 Days ]
The SC could be incurring higher holding cost. As its capital was tied up in stocks, it could face liquidity problems. The SC's management was quite efficient in handling its debtors. The SC's debtors days were at an acceptable range, thus the risk of its debts turning bad was minimized. The SC had a favourable creditors' ratio as evidenced by its favourable collection days. The SC could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.
Liquidity :
Liquid Ratio : Unfavourable [ 0.34 Times ]
Current Ratio : Unfavourable [ 0.73 Times ]
A low liquid ratio means that the SC may be facing working capital deficiency. If the SC cannot obtain additional financing or injection of fresh capital, it may face difficulties in meeting its short term obligations.
Solvency :
Interest Cover : Acceptable [ 3.56 Times ]
Gearing Ratio : Acceptable [ 0.94 Times ]
The SC's interest cover was slightly low. If there is no sharp fall in its profit or sudden increase in the interest rates, we believe the SC is able to generate sufficient income to service its interest and repay the loans. The SC's gearing was slightly high. The SC is utilising the leverage concept to fund its expansion. However, the high gearing has added financial risks to the SC. It will be more vulnerable in times of economy downturn.
Overall Assessment :
Generally, the SC's performance has improved with higher turnover and profit. Due to its weak liquidity position, the SC 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 SC. The SC had an acceptable interest cover. If there is no sudden sharp increase in interest rate or fall in the SC's profit, we do believe the SC is able to generate sufficient cash flow to service its interest payment. The SC's gearing was slightly high and its financial risk was also high. If no plans are made to reduce its gearing, the SC's performance may deteriorate in the coming year.
Overall financial condition of the SC: FAIR
COMMENTS
Established in 2003, the SC is principally engaged as a manufacturer of steel tyre cord. Throughout its year of establishment, the SC has slowly been building up contact with its clients and competing in the industry. With RM60 million in issued and paid up capital, the SC has the potential of capturing a higher market shares as it is competing aggressively in the market. Being backed by the holding company allows the SC to enjoy the benefit of timely financial assistance if the needs arise. With these favourable conditions, the SC has minimised its risk in the industry compared to other players.
Our investigation revealed that the SC serves both local and overseas clients. Penetrating into the overseas countries such as Singapore and Korea has well diversified its business risk and at the same time added strength to its capabilities in capturing higher market shares. At present the workforce of the SC is 200 and the SC's business activities are overseen by its Managing Director, Lee Lie Moon and overall the management capability of the SC is average.
During the financial year 2006, turnover of the SC surged by 33.12% to RM195.30 million in 2006. The SC recorded a pre-tax profit of RM18.43 million for the year, an increase of 9.14% over the previous year. The SC generated an acceptable return on shareholders' funds indicating that the SC was efficient in utilising its shareholders' funds to generate favourable returns. The SC had an acceptable gearing ratio indicating that the SC has an acceptable level of liabilities relative to shareholders' funds. However due to its weak liquidity position, the SC will be face with problems in meeting all its short term obligations if no short term loan is obtained or additional capital injected into the SC. With the comfortable networth standing at RM85.27 million, the SC is able to sustain its business performance in the near terms.
Investigation revealed that the SC's supplies are sourced from both local and overseas suppliers. Hence, the SC is subjected to currency fluctuation risk and high operating costs.
Based on the historical data we concluded that the payment habit of the SC is good.
The industry shows an upward trend and this trend is very likely to sustain in the near future. With the promising outlook of the industry performance, the business potential of the SC should be favourable. Moreover, with the SC's strong background, the SC has a competitive edge against other players in the same fields.
In view of the above we recommend credit be granted to the SC normally.
THE FINANCIAL STATEMENTS WERE
PREPARED
IN ACCORDANCE WITH MALAYSIA
ACCOUNTING
STANDARD.
PROFIT
AND LOSS ACCOUNT
For
The Year Ended 31-December-2006
KISWIRE
CORD SDN BHD
2006 2005
MYR MYR
TURNOVER 195,307,093 146,714,451
=========== ===========
PROFIT/(LOSS)
FROM OPERATIONS 18,433,117 16,888,413
SHARE OF PROFITS/(LOSSES) OF
ASSOCIATED
------------------- -------------------
PROFIT/(LOSS)
BEFORE TAXATION 18,433,117 16,888,413
Taxation <5,095,396> <4,850,000>
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PROFIT/(LOSS)
AFTER TAXATION 13,337,721 12,038,413
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PROFIT/(LOSS)
BEFORE EXTRAORDINARY ITEMS 13,337,721 12,038,413
------------------- -------------------
PROFIT/(LOSS)
ATTRIBUTABLE TO SHAREHOLDERS 13,337,721 12,038,413
RETAINED PROFIT/(ACCUMULATED LOSS)
BROUGHT
FORWARD
As previously
reported 11,926,136 <112,277>
------------------- -------------------
As restated 11,926,136 <112,277>
------------------- -------------------
PROFIT
AVAILABLE FOR APPROPRIATIONS 25,263,857 11,926,136
------------------- -------------------
RETAINED PROFIT/(ACCUMULATED LOSS)
CARRIED
FORWARD 25,263,857 11,926,136
=========== ===========
RETAINED
BY: The Company 25,263,857 11,926,136
------------------- -------------------
25,263,857 11,926,136
=========== ===========
INTEREST
EXPENSE (as per notes to P&L)
Other
interest expenses 7,201,036 5,076,107
------------------- -------------------
7,201,036 5,076,107
=========== ===========
BALANCE SHEET
As
At 31-December-2006
KISWIRE
CORD SDN BHD
2006 2005
MYR MYR
ASSETS EMPLOYED:
FIXED ASSETS 189,594,909 185,310,265
LONG TERM
INVESTMENTS/OTHER ASSETS
------------------- -------------------
INTANGIBLE
ASSETS
------------------- -------------------
------------------- -------------------
TOTAL LONG
TERM ASSETS 189,594,909 185,310,265
CURRENT
ASSETS
Stocks 50,738,790 42,339,467
Trade debtors 34,055,568 25,236,496
Other
debtors, deposits & prepayments 447,184 5,119,634
Short term
deposits 1,825,200 -
Items in transit between head
office & branches
Amount due
from holding company 295,720 344,841
Amount due
from related companies 3,367,894 2,043,460
Cash &
bank balances 4,664,171 3,393,885
------------------- -------------------
TOTAL CURRENT
ASSETS 95,394,527 78,477,783
CURRENT
LIABILITIES
Trade
creditors 12,491,396 -
Other creditors
& accruals 10,823,419 14,915,058
Short term
borrowings/Term loans 21,937,500 10,594,688
Bill &
acceptances payable 39,703,473 29,657,667
Amounts owing
to holding company 45,390,462 42,061,810
Amounts owing
to related companies 1,070,248 5,972,671
Provision for
taxation - 4,000
------------------- -------------------
TOTAL CURRENT
LIABILITIES 131,416,498 103,205,894
------------------- -------------------
NET CURRENT
ASSETS/(LIABILITIES) <36,021,971> <24,728,111>
------------------- -------------------
TOTAL NET
ASSETS 153,572,938 160,582,154
=========== ===========
FINANCED BY:
SHARE CAPITAL
Ordinary
share capital 60,004,706 60,004,706
------------------- -------------------
TOTAL SHARE
CAPITAL 60,004,706 60,004,706
RESERVES
Retained profit/(Accumulated loss)
carried
forward 25,263,857 11,926,136
------------------- -------------------
TOTAL
RESERVES 25,263,857 11,926,136
------------------- -------------------
SHAREHOLDERS'
FUNDS/EQUITY 85,268,563 71,930,842
LONG TERM
& DEFERRED LIABILITIES & PROVISIONS
Long term
loans 58,134,375 83,580,312
Deferred
taxation 10,170,000 5,071,000
------------------- -------------------
TOTAL LONG TERM & DEFERRED
LIABILITIES &
PROVISIONS 68,304,375 88,651,312
------------------- -------------------
153,572,938 160,582,154
=========== ===========
FINANCIAL RATIOS
As
At 31-December-2006
KISWIRE
CORD SDN BHD
2006 2005
MYR MYR
TYPES OF FUNDS
Cash 6,489,371 3,393,885
Net Liquid
Funds <15,448,129> <7,200,803>
Net Liquid
Assets <86,760,761> <67,067,578>
Net Current
Assets/(Liabilities) <36,021,971> <24,728,111>
Net Tangible
Assets 153,572,938 160,582,154
Net Monetary
Assets <155,065,136> <155,718,890>
BALANCE SHEET
ITEMS
Total
Borrowings 80,071,875 94,175,000
Total
Liabilities 199,720,873 191,857,206
Total Assets 284,989,436 263,788,048
Net Assets 153,572,938 160,582,154
Net Assets
Backing 85,268,563 71,930,842
Shareholders''
Funds 85,268,563 71,930,842
Total Share
Capital 60,004,706 60,004,706
Total
Reserves 25,263,857 11,926,136
LIQUIDITY
(Times)
Cash Ratio 0.05 0.03
Liquid Ratio 0.34 0.35
Current Ratio 0.73 0.76
WORKING
CAPITAL CONTROL (Days)
Stock Ratio 95 105
Debtors Ratio 64 63
Creditors
Ratio 23 0
SOLVENCY
RATIOS (Times)
Gearing Ratio 0.94 1.31
Liabilities
Ratio 2.34 2.67
Times
Interest Earned Ratio 3.56 4.33
PERFORMANCE
RATIO (%)
Operating
Profit Margin 9.44 11.51
Net Profit
Margin 6.83 8.21
Return On Net
Assets 16.69 13.68
Return On
Capital Employed 14.61 12.83
Return On
Shareholders'' Funds/Equity 15.64 16.74
Dividend Pay
Out Ratio (Times) 0 0
NOTES TO
ACCOUNTS
Contingent
Liabilities 0 0
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 |
Unfavourable & favourable factors carry similar weight in credit
consideration. 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 |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|
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%)