MIRA
INFORM REPORT
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Report Date : |
02.11.2007 |
IDENTIFICATION
DETAILS
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Name : |
TG ORIENTAL STEEL SDN BHD |
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Registered Office : |
45, Jalan Perak, 10150 Pulau Pinang, Pulau Pinang |
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Country : |
Malaysia |
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Financials (as on) : |
31.12.2006 |
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Date of Incorporation : |
23/10/1978 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Manufacturing of Steel Products |
RATING &
COMMENTS
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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 : |
No Complaints |
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Litigation : |
Clear |
* Adopted abbreviations : SC - Subject Company ( the company enquired by you)
N/A - Not Applicable
EXECUTIVE SUMMARY
LOCAL NO : 42683-P
COMPANY NAME : TG ORIENTAL STEEL SDN BHD
FORMER NAME : TG ENGINEERING SDN BHD (21-02-2007)
: TATT GIAP ENGINEERING SDN BHD (30-01-2002)
: ULTIMATE ENTERPRISE SDN BHD
INCORPORATION DATE : 23/10/1978
COMPANY STATUS : EXIST
LEGAL STATUS : PRIVATE LIMITED COMPANY
LISTED STATUS : NO
REGISTERED ADDRESS : 45, JALAN PERAK, 10150 PULAU PINANG, PULAU PINANG,
MALAYSIA.
BUSINESS ADDRESS : LOT 1617, LORONG PERUSHAAHN MAJU 6, PRAI
INDUSTRIAL ESTATE IV, 13600 PERAI, PULAU PINANG,
MALAYSIA.
TEL NO : 04 - 5024920
FAX NO : 04 - 5021100
CONTACT PERSON : SIAH KOK POAY (MANAGING DIRECTOR)
INDUSTRY CODE : 27100
PRINCIPAL ACTIVITY : MANUFACTURING OF STEEL PRODUCTS
AUTHORISED CAPITAL : MYR1,000,000.00 DIVIDED INTO ORDINARY SHARE
1,000,000 OF MYR1.00 EACH.
ISSUED AND PAID UP CAPITAL : MYR1,000,000.00 DIVIDED INTO ORDINARY SHARE
1,000,000 CASH OF MYR1.00 EACH.
SALES : MYR3,587,264 [2006]
NET WORTH : MYR1,003,021 [2006]
STAFF STRENGTH : 31 [2007]
BANKER (S) : MALAYAN BANKING BHD
LITIGATION : CLEAR
FINANCIAL CONDITION : FAIR
PAYMENT : FAIR
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) manufacturing of steel products.
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 major shareholder(s) of the SC are shown as follows :
Name Address IC/PP/Loc
No: Shareholding
MR. SIAH KOK POAY + 6, LORONG TAMBUN INDAH 5, TAMAN 9906552 875,000
TAMBUN
INDAH, 14100 SIMPANG AMPAT, 4671321
PULAU
PINANG, MALAYSIA.
MS. TAN LU ENG + 22, LORONG CENGKEH 5, TAMAN CENGKEH, 9906553 125,000
13400
BUTTERWORTH, PULAU PINANG, 7439151
MALAYSIA.
--------------------
1,000,000
===========
+ Also Director
DIRECTORS
DIRECTOR 1
Name of Subject : MR. SIAH KOK POAY
Address : 6, LORONG TAMBUN INDAH 5, TAMAN TAMBUN INDAH, 14100
SIMPANG AMPAT, PULAU PINANG, MALAYSIA.
IC / PP No. : 4671321
New IC No : 541010-07-5615
Date of Birth : 10/10/1954
Nationality : MALAYSIAN CHINESE
DIRECTOR 2
Name of Subject : MS. TAN LU ENG
Address : 22, LORONG CENGKEH 5, TAMAN CENGKEH, 13400
BUTTERWORTH, PULAU PINANG, MALAYSIA.
IC / PP No. : 7439151
New IC No : 641004-07-5764
Date of Birth : 04/10/1964
Nationality : MALAYSIAN CHINESE
DIRECTOR 3
Name of Subject : MR. ZAINAL ABIDIN BIN ABD RAHMAN
Address : 27, MEDAN BURHANUDDIN HELMI, TAMAN TUN DR ISMAIL, 60000
KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.
IC / PP No. : 0666710
New IC No : 480311-03-5389
Date of Birth : 11/03/1948
Nationality : MALAYSIAN MALAY
DIRECTOR 4
Name of Subject : MR. TAN CHENG MENG
Address : 50, LEBUH BINJAI 2, TAMAN SRI RAMBAI, 14000 BUKIT
MERTAJAM, PULAU PINANG, MALAYSIA.
IC / PP No. : 4357334
New IC No : 521016-07-5167
Date of Birth : 16/10/1952
Nationality : MALAYSIAN CHINESE
DIRECTOR 5
Name of Subject : MR. TYE CHUEEN HONG
Address : 78-5-3, MARINA BAY, 10470 PULAU PINANG, PULAU PINANG, MALAYSIA.
IC / PP No. : 5853376
New IC No : 600313-07-5775
Date of Birth : 13/03/1960
Nationality : MALAYSIAN CHINESE
DIRECTOR 6
Name of Subject : MR. SIAH CHIN JOO
Address : 30, MEDAN PANTAI JERJAK, 11900 BAYAN LEPAS, PULAU
PINANG, MALAYSIA.
IC / PP No. : A3199815
New IC No : 760106-07-5521
Date of Birth : 06/01/1976
Nationality : MALAYSIAN CHINESE
MANAGEMENT
1) Name of Subject : SIAH KOK POAY
Position : MANAGING DIRECTOR
2) Name of Subject : YEOH KHYE HWA
Position : FINANCE MANAGER
3) Name of Subject : AKHBAR BIN HASSAN
Position : PRODUCTION MANAGER
AUDITOR
Auditor : LOOI SOO WAH & CO
Auditors' Address : 255, LEBUH VICTORIA, 10300, PULAU PINANG, MALAYSIA.
COMPANY SECRETARY
1) Company Secretary : MR. KONG HWAN KWAN@KONG FAM KWAN
IC / PP No. : 4487472
New IC No. : 530922-07-5577
Address : 45, JALAN PERAK, 10150 PULAU PINANG, PULAU PINANG,
MALAYSIA.
2) Company Secretary : MR. YEOH WEE LEE
IC / PP No. : A0732962
New IC No. : 670805-07-5097
Address : 4-2-2 SOLOK GANGSA, GREEN LANE HEIGHTS, 11600 PULAU
PINANG, PULAU PINANG, MALAYSIA.
BANKING
Banking relations are maintained principally with :
1) Banker Name : MALAYAN BANKING BHD
The SC enjoys normal banking routine with above mentioned banker(s).
No adverse record was found during our investigation.
ENCUMBRANCE (S)
No encumbrance was found in our databank at the time of investigation.
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
Overseas : YES
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 [ ] Average [ ]
Fair [ X ] Poor [ ]
CLIENTELE
Local : YES Percentage : 100%
Domestic Markets : MALAYSIA.
Overseas : NO Percentage : 0 %
Credit Term : AS AGREED.
Payment Mode : CHEQUES.
OPERATIONS
Products Manufactured : STEEL PRODUCTS
Total Number of Employees :
YEAR 2007
GROUP N/A
COMPANY 31
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 : 04-5024920
Match : N/A
Address Provided By Client : N/A
Current Address : LOT 1617, LORONG PERUSHAAHN MAJU 6, PRAI
INDUSTRIAL ESTATE IV, 13600 PERAI, PULAU
PINANG, MALAYSIA.
Match : N/A
Latest Financial Accounts : YES
Other Investigations
We conducted an interview with Mr Sharol from the SC's Admin Department. He revealed some information pertaining to the SC.
FINANCIAL COMMENTS
Profitability :
Turnover : Increased [ 39.41% ]
Profit / ( Loss ) before tax : Increased [ 128.60% ]
Return on Shareholder Funds : Acceptable [ 13.36% ]
Return on Net Assets : Acceptable [ 12.41% ]
The increase in turnover could be due to the SC adopting an aggressive marketing strategy. The higher profit could be attributed to the increase in turnover. The SC's management had generated acceptable return for its shareholders using its assets.
Working Capital Control :
Stocks Ratio : Favourable [ 0 Days ]
Debtors Ratio : Unfavourable [ 135 Days ]
Creditors Ratio : Unfavourable [ 170 Days ]
The SC's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The SC's debtors ratio was high. The SC should tighten its credit control and improve its collection period. The unfavourable creditors' ratio could be due to the SC taking advantage of the credit granted by its suppliers. However this may affect the goodwill between the SC and its suppliers and the SC may inadvertently have to pay more for its future supplies.
Liquidity :
Liquid Ratio : Unfavourable [ 0.62 Times ]
Current Ratio : Unfavourable [ 0.62 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 : Nil [ 0.00 Times ]
Gearing Ratio : Acceptable [ 0.86 Times ]
The SC's interest cover was nil as it did not pay any interest during the year. 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 did not make any interest payment during the year. The SC was dependent on its shareholders' funds to finance its business needs. 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 1978, the SC is principally engaged in the manufacturing of steel products. Its long presence in the industry coupled with its vast experiences has enabled the SC to remain competitive.
The SC's business expansion opportunities is limited as it concentrates solely on the local market and it only has a work force of 31 throughout the years. The SC is vulnerable to the changes in the local market. However, with its stable customers base its business risk is diversified. The SC's business activities are overseen by its Managing Director, Siah Kok Poay and its management capability is average.
During the financial year 2006 turnover of the SC surged by 39.41% to RM3.58 million in 2006. The SC recorded a pre-tax profit of RM190,184 for the year, an increase of 128.60% 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. 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. However the SC had an acceptable liabilities ratio indicating that the SC has an acceptable level of liabilities relative to shareholders' funds. The SC should be able to maintain its business in the near term, given a positive net worth standing at RM1 million.
Investigation revealed that the SC sources its raw materials from both local and overseas countries. As a result, the SC is exposed to foreign currency fluctuation risk.
Based on the historical data we concluded that the payment habit of the SC is fair.
The industry remains robust with continuing strong global demand for its products. The steady growth in the country's economy will further enhance its business and there will be more business opportunities available for the SC in the future. In this competitive industry, the SC may face stiff competition from other players.
In view of the above we recommend credit be granted to the SC normally.
9
THE FINANCIAL STATEMENTS WERE
PREPARED IN ACCORDANCE WITH MALAYSIA ACCOUNTING STANDARD.
PROFIT
AND LOSS ACCOUNT
For
The Year Ended 31-December-2006
TG
ORIENTAL STEEL SDN BHD
2006 2005
MYR MYR
TURNOVER 3,587,264 2,573,212
=========== ===========
PROFIT/(LOSS)
FROM OPERATIONS 190,184 83,195
SHARE OF PROFITS/(LOSSES) OF
ASSOCIATED
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PROFIT/(LOSS)
BEFORE TAXATION 190,184 83,195
Taxation <56,227> <18,215>
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PROFIT/(LOSS)
AFTER TAXATION 133,957 64,980
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PROFIT/(LOSS)
BEFORE EXTRAORDINARY ITEMS 133,957 64,980
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PROFIT/(LOSS)
ATTRIBUTABLE TO SHAREHOLDERS 133,957 64,980
RETAINED PROFIT/(ACCUMULATED LOSS)
BROUGHT
FORWARD
As previously
reported 219,064 154,084
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As restated 219,064 154,084
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PROFIT AVAILABLE
FOR APPROPRIATIONS 353,021 219,064
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RETAINED PROFIT/(ACCUMULATED LOSS)
CARRIED
FORWARD 353,021 219,064
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RETAINED
BY: The Company 353,021 219,064
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353,021 219,064
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INTEREST
EXPENSE (as per notes to P&L)
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BALANCE SHEET
As
At 31-December-2006
TG
ORIENTAL STEEL SDN BHD
2006 2005
MYR MYR
ASSETS EMPLOYED:
FIXED ASSETS 2,382,665 2,465,282
LONG TERM
INVESTMENTS/OTHER ASSETS
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INTANGIBLE
ASSETS
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TOTAL LONG
TERM ASSETS 2,382,665 2,465,282
CURRENT
ASSETS
Stocks 169 169
Trade debtors 1,325,013 645,784
Other
debtors, deposits & prepayments 22,067 54,330
Loans &
advances - current portion 250 250
Items in transit between head
office & branches
Cash &
bank balances 12,931 3,859
------------------- -------------------
TOTAL CURRENT
ASSETS 1,360,430 704,392
CURRENT
LIABILITIES
Trade
creditors 1,668,035 963,827
Other
creditors & accruals 84,822 80,868
Short term
borrowings/Term loans 337,655 337,655
Amounts owing
to director 80,722 71,340
Provision for
taxation 39,000 15,000
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TOTAL CURRENT
LIABILITIES 2,210,234 1,468,690
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NET CURRENT
ASSETS/(LIABILITIES) <849,804> <764,298>
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TOTAL NET
ASSETS 1,532,861 1,700,984
=========== ===========
FINANCED BY:
SHARE CAPITAL
Ordinary
share capital 650,000 650,000
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TOTAL SHARE
CAPITAL 650,000 650,000
RESERVES
Retained profit/(Accumulated loss)
carried
forward 353,021 219,064
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TOTAL
RESERVES 353,021 219,064
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SHAREHOLDERS'
FUNDS/EQUITY 1,003,021 869,064
LONG TERM
& DEFERRED LIABILITIES & PROVISIONS
Long term
loans 441,852 699,928
Hire purchase
creditors 87,988 131,992
------------------- -------------------
TOTAL LONG TERM & DEFERRED
LIABILITIES &
PROVISIONS 529,840 831,920
------------------- -------------------
1,532,861 1,700,984
=========== ===========
FINANCIAL RATIOS
As
At 31-December-2006
TG
ORIENTAL STEEL SDN BHD
2006 2005
MYR MYR
TYPES OF FUNDS
Cash 12,931 3,859
Net Liquid
Funds <324,724> <333,796>
Net Liquid
Assets <849,973> <764,467>
Net Current Assets/(Liabilities) <849,804> <764,298>
Net Tangible
Assets 1,532,861 1,700,984
Net Monetary
Assets <1,379,813> <1,596,387>
BALANCE SHEET
ITEMS
Total
Borrowings 867,495 1,169,575
Total
Liabilities 2,740,074 2,300,610
Total Assets 3,743,095 3,169,674
Net Assets 1,532,861 1,700,984
Net Assets
Backing 1,003,021 869,064
Shareholders''
Funds 1,003,021 869,064
Total Share
Capital 650,000 650,000
Total
Reserves 353,021 219,064
LIQUIDITY
(Times)
Cash Ratio 0.01 0.00
Liquid Ratio 0.62 0.48
Current Ratio 0.62 0.48
WORKING
CAPITAL CONTROL (Days)
Stock Ratio 0 0
Debtors Ratio 135 92
Creditors
Ratio 170 137
SOLVENCY
RATIOS (Times)
Gearing Ratio 0.86 1.35
Liabilities
Ratio 2.73 2.65
Times
Interest Earned Ratio 0 0
PERFORMANCE
RATIO (%)
Operating
Profit Margin 5.30 3.23
Net Profit
Margin 3.73 2.53
Return On Net
Assets 12.41 4.89
Return On
Capital Employed 10.17 4.08
Return On
Shareholders'' Funds/Equity 13.36 7.48
Dividend Pay
Out Ratio (Times) 0 0
NOTES TO
ACCOUNTS
Contingent
Liabilities 0 0
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
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>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 |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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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%)