MIRA INFORM REPORT

 

 

Report Date :

31.12.2012

 

IDENTIFICATION DETAILS

 

Name :

NIHON SPINDLE COOLING TOWERS SDN. BHD.

 

 

Formerly Known As :

NS COOLING TOWERS SDN BHD (17/11/2009)

 

 

Registered Office :

85 Lebuh Pantai, 1st Flr, 10300 Pulau Pinang, Pulau Pinang

 

 

Country :

MALAYSIA.

 

 

Financials (as on) :

31.03.2012

 

 

Date of Incorporation :

10.08.2007

 

 

Com. Reg. No.:

784210-D

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Manufacturer of cooling towers

 

 

No. of Employees :

70 Employees

 

RATING & COMMENTS

 

MIRA’s Rating :

B

 

RATING

STATUS

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Status :

Moderate

Payment Behaviour :

Slow

Litigation :

Clear

 

NOTES :

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

 

ECGC Country Risk Classification List – June 30th, 2012

 

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

Malaysia

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

malaysia - ECONOMIC OVERVIEW

 

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. 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 strained government finances, has forced Kuala Lumpur to begin to reduce government subsidies. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplies more than 40% of government revenue. The 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 has raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but he has encountered significant opposition, especially from Malay nationalists and other vested interests.

 

Source : CIA

 

 

*Adopted abbreviations:     

 

SC - Subject Company (the company enquired by you)                                                     

N/A - Not Applicable      

                                               

                                                                                                                                    

 

EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

784210-D

COMPANY NAME

:

NIHON SPINDLE COOLING TOWERS SDN. BHD.

FORMER NAME

:

NS COOLING TOWERS SDN BHD (17/11/2009)

INCORPORATION DATE

:

10/08/2007

 

 

 

 

 

 

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

 

 

 

 

 

 

REGISTERED ADDRESS

:

85 LEBUH PANTAI, 1ST FLR, 10300 PULAU PINANG, PULAU PINANG, MALAYSIA.

BUSINESS ADDRESS

:

20B, JALAN PERUSAHAAN, PRAI INDUSTRIAL ESTATE 4, 13600 PRAI, PULAU PINANG, MALAYSIA.

TEL.NO.

:

04-5013322

FAX.NO.

:

04-5083355

WEB SITE

:

www.spindle.com.my

CONTACT PERSON

:

MAKOTO ( CEO )

 

 

 

INDUSTRY CODE

:

27900

PRINCIPAL ACTIVITY

:

MANUFACTURER OF COOLING TOWERS.

AUTHORISED CAPITAL

:

MYR 25,000,000.00 DIVIDED INTO
ORDINARY SHARE 25,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 17,200,000.00 DIVIDED INTO
ORDINARY SHARES 17,200,000 CASH OF MYR 1.00 EACH.

 

 

 

SALES

:

MYR 11,518,022 [2012]

NET WORTH

:

MYR 11,323,233 [2012]

 

 

 

STAFF STRENGTH

:

70 [2012]

BANKER (S)

:

HSBC BANK MALAYSIA BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

 

 

 

COMMERCIAL RISK

:

MODERATE

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

MARGINAL 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 cooling towers..

 

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

 

The immediate holding company of the SC is NIHON SPINDLE MANUFACTURING CO.LTD., a company incorporated in JAPAN.

 

The ultimate holding company of the SC is SUMITOMO HEAVY INDUSTRIES LTD, a company incorporated in JAPAN.

 

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



Name

Address

IC/PP/Loc No

Shareholding

(%)

NIHON SPINDLE MANUFACTURING CO.LTD.

 

XLZ00211682

15,535,598.00

90.32

MR. ONG PENG CHOR

 

500921-07-5367

912,000.00

5.30

MR. ONG IK JIN

2-25-605, MAKAMAEDA-CHO 2-25-605, MAKAMAEDA-CHO, 662-0857, JAPAN.

820209-07-5315

285,000.00

1.66

MR. ONG IK CHUANG

21 JALAN KIKIK TAMAN INDERAWASIH, 13600 PRAI, PULAU PINANG, MALAYSIA.

790108-07-5071

285,000.00

1.66

MR. GOH GEE KHEONG

21 JALAN KIKIK TAMAN INDERAWASIH, 13600 PRAI, PULAU PINANG, MALAYSIA.

600504-08-5765

182,400.00

1.06

YASUSHI NEMOTO

 

TH9110470

1.00

0.00

KOICHI INAOKA +

 

6048807

1.00

0.00

 

 

 

---------------

------

 

 

 

17,200,000.00

100.00

 

 

 

============

=====

 

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

KOICHI INAOKA

Address

:

2-12-2026, KAWASAKI-CHO, AKASHI-SHI, HYOGO, 673-0014, JAPAN, FOREIGN, MALAYSIA.

IC / PP No

:

TH6048807

 

 

 

Date of Birth

:

26/02/1960

 

 

 

Nationality

:

JAPANESE

Date of Appointment

:

01/06/2011

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 2

 

Name Of Subject

:

SHINYA SUZUKI

Address

:

NO. 113-05-11 GOLD COAST, PERSIARAN BAYAN INDAH, 11900 BAYAN LEPAS, PULAU PINANG, MALAYSIA.

IC / PP No

:

TH5853978

 

 

 

Date of Birth

:

29/09/1970

 

 

 

 

 

 

Date of Appointment

:

30/03/2012

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 3

 

Name Of Subject

:

KOTARO FUJIKAWA

Address

:

3-8-16 TSUKAWAKI, TAKATSUKI-SHI, OSAKA, 569-1036 JAPAN, FOREIGN, MALAYSIA.

IC / PP No

:

TH4998110

 

 

 

Date of Birth

:

31/12/1950

 

 

 

Nationality

:

JAPANESE

Date of Appointment

:

01/06/2011

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 4

 

Name Of Subject

:

MAKOTO SUGIMOTO

Address

:

35-27-4 MUTIARA VILLA, JALAN BAGAN JERMAL, 10250 GEORGETOWN, PULAU PINANG, MALAYSIA.

IC / PP No

:

TH1259025

 

 

 

Date of Birth

:

09/12/1961

 

 

 

 

 

 

Date of Appointment

:

01/06/2011

 

 

 

 

 

 

 

 

 

 

 

 

 

MANAGEMENT

 

 

 

1)

Name of Subject

:

MAKOTO

 

Position

:

CEO

 

 

 

 

 

2)

Name of Subject

:

LIM PENG LAN

 

Position

:

FINANCE MANAGER

 

 

 

 

 

3)

Name of Subject

:

JEFFRY GOH

 

Position

:

PRODUCTION MANAGER

 

 

 

 

 

4)

Name of Subject

:

MAKOTO SUGIMOTO

 

Position

:

MANAGER

 

 

 

 

 

 

AUDITOR

 

Auditor

:

BDO

Auditor' Address

:

MENARA UNI ASIA, 1008, JALAN SULTAN ISMAIL, 12TH FLOOR, 50250 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

 

 

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. HENG FOOK TAU

 

 

 

 

 

New IC No

:

550202-01-5507

 

Address

:

UNIT N-9-8, TAMAN PERMAI INDAH, JALAN HELANG, 11700 GELUGOR, PULAU PINANG, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BANKING


Banking relations are maintained principally with :

 

1)

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)


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

LEGAL CHECK AGAINST SC


* A check has been conducted in our databank againt the SC 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 SC


* We have checked through the SC 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 since 1990. Information was provided by third party where the debt amount can be disputed. Please check with creditors for confirmation as alleged debts may have been paid since recorded or are being disputed.

No blacklisted record & debt collection case was found in our defaulters' databank.

PAYMENT RECORD

 

 

SOURCES OF RAW MATERIALS:

 

Local

:

YES

Percentage

:

30%

Overseas

:

YES

Percentage

:

70%

Import Countries

:

UNITED STATES,EUROPE,ASIA



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 0-30 Days

[

 

]

 

Good 31-60 Days

[

 

]

 

Average 61-90 Days

[

X

]

 

Fair 91-120 Days

[

 

]

 

Poor >120 Days

[

 

]

 

 

 

 

 

 

 

CLIENTELE

 

Local

:

YES

Domestic Markets

:

MALAYSIA

Overseas

:

YES

 

 

 

Export Market

:

ASIA, MIDDLE EAST

Credit Term

:

30 - 90 DAYS

 

 

 

 

 

 

Payment Mode

:

CHEQUES,LETTER OF CREDIT (LC),TELEGRAPHIC TRANSFER (TT)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATIONS

 

Products manufactured

:

COOLING TOWERS

 

 

 

Competitor(s)

:

ANCOM LOGISTICS BHD

COB TECHNOLOGY ASIA SDN BHD

EITA RESOURCES BHD

MEMS TECHNOLOGY BHD

MIKRO MSC BHD

 

 

 

Ownership of premises

:

LEASED/RENTED

 

Total Number of Employees:

 

YEAR

2012

2011

2010

2009

2008

 

 

 

 

 

GROUP

N/A

N/A

N/A

N/A

N/A

 

 

 

 

COMPANY

70

70

70

40

30

 

 

 

 

 

Branch

:

NO

 

Other Information:


The SC is principally engaged in the (as a / as an) manufacturer of cooling towers..

We were informed that the SC produces Nihon Spindle cooling towers.

The SC's factory has the followings:

* Built on a 6.7 acre land with a combined production floor space of 60,000 sq ft

* Combined office space of 5,000 sq ft

* Dedicated CTI standard test facility for cooling towers of 15,000 sq ft

* Manufacturing, Design, Quality Control and R&D led by qualified Japanese managers.

The cooling towers are installed at shopping complexes, supermarkets, factories and others.

The SC utilizes advanced automated and semi-automated machineries to ensure production of high quality products.

PROJECTS


No projects found in our databank

CURRENT INVESTIGATION

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client

:

045013322

Current Telephone Number

:

04-5013322

Match

:

YES

 

 

 

Address Provided by Client

:

20B, JALAN PERUSAHAAN, PRAI INDUSTRIAL ESTATE 4,13600,PRAI,PULAU PINANG.

Current Address

:

20B, JALAN PERUSAHAAN, PRAI INDUSTRIAL ESTATE 4, 13600 PRAI, PULAU PINANG, MALAYSIA.

Match

:

YES

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations


On 26th December 2012 we contacted one of the staff from the SC and she provided some information on the SC.

FINANCIAL ANALYSIS

 

 

Profitability

 

 

 

 

 

 

Turnover

:

Erratic

[

2008 - 2012

]

 

Profit/(Loss) Before Tax

:

Increased

[

2008 - 2012

]

 

Return on Shareholder Funds

:

Unfavourable

[

<29.95%>

]

 

Return on Net Assets

:

Unfavourable

[

<27.84%>

]

 

 

 

 

 

 

 

 

The fluctuating turnover reflects the fierce competition among the existing and new market players.Higher losses before tax during the year could be due to the higher operating costs incurred. The SC's unfavourable returns on shareholders' funds indicate the management's inefficiency in utilising its assets to generate returns.

 

 

 

 

 

 

 

Liquidity

 

 

 

 

 

 

Current Ratio

:

Favourable

[

2.31 Times

]

 

 

 

 

 

 

 

 

The SC was in good liquidity position with its current liabilities well covered by its current assets. With its net current assets, the SC should be able to repay its short term obligations.

 

 

 

 

 

 

 

Solvency

 

 

 

 

 

 

Liability Ratio

:

Favourable

[

0.70 Times

]

 

 

 

 

 

 

 

 

A low liabilities ratio has minimised the SC's financial risk.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Assessment :

 

 

 

 

 

 

The SC's losses increased but its turnover showed a fluctuating trend. This indicate the SC was slowly losing its market share due to its competitors. The SC was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the SC should be able to repay its short term obligations. The SC has high financial risks. If its shareholders do not inject more capital into the company or if its business performance does not improve, its going concern may be in question.

 

 

 

 

 

 

 

Overall financial condition of the SC : FAIR

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2008

2009

2010

2011*

2012**

 

 

 

 

 

 

Population ( Million)

27.73

28.13

28.35

28.70

29.10

Gross Domestic Products ( % )

4.6

<0.5>

7.2

5.5

5.3

Domestic Demand ( % )

6.9

2.9

6.3

4.8

7.6

Private Expenditure ( % )

7.1

<2.7>

8.1

7.0

8.7

Consumption ( % )

8.4

0.7

6.7

6.3

7.1

Investment ( % )

1.5

<17.2>

17.7

16.2

15.9

Public Expenditure ( % )

6.5

5.2

3.8

7.6

4.7

Consumption ( % )

11.6

3.1

0.2

8.9

3.0

Investment ( % )

0.7

8.0

2.8

0.6

7.0

 

 

 

 

 

 

Balance of Trade ( MYR Million )

129,563

89,650

118,356

116,058

-

Government Finance ( MYR Million )

<34,462>

<28,450>

<40,482>

<45,511>

<43,021>

Government Finance to GDP / Fiscal Deficit ( % )

<4.8>

<4.8>

<5.6>

<5.4>

<4.7>

Inflation ( % Change in Composite CPI)

<3.3>

<5.2>

5.1

3.1

-

Unemployment Rate

3.7

4.5

3.9

3.3

-

 

 

 

 

 

 

Net International Reserves ( MYR Billion )

388

331

329

415

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

1.91

2.87

2.20

3.50

-

Average 3 Months of Non-performing Loans ( % )

13.24

11.08

15.30

14.80

-

Average Base Lending Rate ( % )

6.72

5.53

6.30

6.60

-

Business Loans Disbursed( % )

11.6

10.5

14.7

15.3

-

Foreign Investment ( MYR Million )

23,261.4

22,156.8

22,517.9

23,546.1

-

Consumer Loans ( % )

-

-

-

-

-

 

 

 

 

 

 

Registration of New Companies ( No. )

41,599

41,578

44,148

-

-

Registration of New Companies ( % )

<4.0>

<0.1>

6.2

-

-

Liquidation of Companies ( No. )

27,992

39,075

25,585

-

-

Liquidation of Companies ( % )

23.7

39.6

<34.5>

-

-

 

 

 

 

 

 

Registration of New Business ( No. )

269,866

312,581

271,414

-

-

Registration of New Business ( % )

-

-

-

-

-

Business Dissolved ( No. )

18,885

19,345

19,738

-

-

Business Dissolved ( % )

<7.6>

2.4

2.0

-

-

 

 

 

 

 

 

Sales of New Passenger Cars (' 000 Unit )

497.5

486.3

543.6

363.0

-

Cellular Phone Subscribers ( Million )

25.1

30.1

32.8

35.3

-

Tourist Arrival ( Million Persons )

21.5

23.6

24.6

25.3

-

Hotel Occupancy Rate ( % )

68.0

58.0

63.0

51.3

-

 

 

 

 

 

 

Credit Cards Spending ( % )

17.1

12.8

14.1

15.6

-

Bad Cheque Offenders (No.)

34,834

36,667

33,568

27,208

-

Individual Bankruptcy ( No.)

13,907

16,228

18,119

16,155

-

Individual Bankruptcy ( % )

5.1

16.7

11.7

<10.8>

-

 

INDUSTRIES ( % of Growth ):

2008

2009

2010

2011*

2012**

 

 

 

 

 

 

Agriculture

3.6

0.4

2.1

4.7

4.1

Palm Oil

7.0

<1.1>

<3.4>

7.3

-

Rubber

<1.1>

<19.8>

9.9

6.4

-

Forestry & Logging

<1.5>

<5.9>

<3.3>

<4.7>

-

Fishing

4.0

5.5

5.6

2.8

-

Other Agriculture

5.9

9.0

7.9

8.5

-

Industry Non-Performing Loans ( MYR Million )

393.0

413.7

508.4

634.1

-

% of Industry Non-Performing Loans

<2.0>

1.3

2.1

3.2

-

 

 

 

 

 

 

Mining

<0.8>

<3.8>

0.2

<2.4>

2.5

Oil & Gas

12.7

2.1

0.5

<1.7>

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

36.0

44.2

49.7

46.5

-

% of Industry Non-performing Loans

0.1

0.1

0.1

0.1

-

 

 

 

 

 

 

Manufacturing #

1.3

<9.4>

11.4

5.6

4.5

Exported-oriented Industries

2.7

<19.0>

12.1

2.8

-

Electrical & Electronics

2.4

<30.3>

28.4

<4.9>

-

Rubber Products

4.2

<10.1>

25.3

15.4

-

Wood Products

<6.0>

<24.1>

20.1

<7.3>

-

Textiles & Apparel

1.9

<19.5>

<0.4>

14.8

-

Domestic-oriented Industries

9.9

<9.8>

16.3

6.3

-

Food, Beverages & Tobacco

9.5

0.2

3.0

4.2

-

Chemical & Chemical Products

1.4

<7.7>

16.2

5.6

-

Plastic Products

6.5

<9.1>

2.4

3.8

-

Iron & Steel

16.8

<32.7>

29.3

2.4

-

Fabricated Metal Products

14.7

<2.5>

14.9

25.2

-

Non-metallic Mineral

8.3

<15.5>

20.2

16.3

-

Transport Equipment

27.1

<13.5>

36.5

<9.4>

-

Paper & Paper Products

8.6

<5.0>

18.7

15.6

-

Crude Oil Refineries

7.8

0.2

<11.4>

9.3

-

Industry Non-Performing Loans ( MYR Million )

5,729.4

6,007.3

6,217.5

6,537.2

-

% of Industry Non-Performing Loans

16.8

18.3

23.8

25.7

-

 

 

 

 

 

 

Construction

2.1

5.8

5.1

4.4

7.0

Industry Non-Performing Loans ( MYR Million )

4,149.8

3,241.8

4,038.5

3,856.9

-

% of Industry Non-Performing Loans

12.2

9.9

10.7

10.2

-

 

 

 

 

 

 

Services

7.3

2.6

6.5

6.4

6.5

Electric, Gas & Water

5.0

0.4

8.5

5.6

4.8

Transport, Storage & Communication

7.8

1.6

7.7

6.5

7.3

Wholesale, Retail, Hotel & Restaurant

10.0

2.8

4.7

5.2

6.9

Finance, Insurance & Real Estate

9.2

3.8

6.1

6.3

6.5

Government Services

8.6

2.0

6.7

7.6

5.6

Other Services

5.9

4.4

4.2

5.4

5.7

Industry Non-Performing Loans ( MYR Million )

8,281.4

6,631.3

7,384.6

6,825.2

-

% of Industry Non-Performing Loans

24.3

20.2

25.7

23.4

-

 

 

 

 

 

 

 

 

 

 

 

 

* Estimate / Preliminary

 

 

 

 

 

** Forecast

 

 

 

 

 

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

 

 

 

 

 

 



INDUSTRY ANALYSIS

 

MSIC CODE

27900 : Manufacture of miscellaneous electrical equipment other than motors, generators and transformers, batteries and accumulators, wires and wiring devices, lighting equipment or domestic appliances

 

INDUSTRY : ELECTRICAL & ELECTRONIC


The E&E industry is an important contributor to the national economy, accounting for RM37 billion or 6% of the Gross National Income (GNI) and RM250 billion or 40% of total exports, and provides about 522,000 skilled and semi-skilled jobs. The Malaysian economy is likely to pick up momentum in the latter part of 2012 as improving external conditions boost demand for the electrical and electronic products. There are 1,900 active companies in the electrical and electronics (E&E) which offering products with unique market characteristics.


The economy expected to grow at an average moderate pace of 4.41% in 2012 with contribution of E&E sector. Base effects on electrical and electronics (E&E) sector shows a near-term slowdown but more favourable base effects, will increase electrical and electronics (E&E) exports and fiscal will lift at the second half 2012.


Consumer electronic product sales are predicted to rise from US$11.47billion in 2012 to US$14.44billion in 2016, an increase of 25.8%, boosted by demand from the tech-literate urban middle class and by a growing interest in electronic products from under-penetrated areas outside the Klang Valley.


Integrated circuits and LED chip manufacturing also expecting a good demand at the second half 2012.On the industrial electronic products sector the second quarter expected to improve over the first half 2012, which fell compared with the first half 2011.


According to Statistics Department, exports jumped 14.5% year-on-year in February 2012 to RM56.9billion largely due to demand for electrical and electronic products, which rose 7.8% to RM18.6billon. More than half of Malaysia exports to the US are electrical and electronic (E&E) goods which is semiconductor devices, ICs, transistors and valves. E&E contributes 34.1% of the manufactured goods, which contribute 67.7 %of the total Malaysian exports compared to "price sensitive" commodities, which contribute 28.6%. The electrical and electronic exports expected to pick up in the second half 2012.


Softening of world demand for solar panels impact Malaysia on it's downturn in small scale compared to China where it facing great impact. The decline in E&E products was also due to the weak global demand.


E&E has been instrumental in the development of the Northern Corridor Klang Valley, Johor and Sarawak, contributing significantly to the socio-economic development of the relevant communities.However, the E&E sector faces significant challenges in maintaining growth with intense competition from China, Taiwan, Singapore and other Asian countries. Over the last 10 years, E&E's share of Malaysian exports has gradually declined.


Malaysia's E&E sector remains focused on assembly, the lower value-added part of the industry while Taiwan, South Korea and Singapore have captured the higher value-added activities in research and development, design and manufacturing.


To propel the E&E industry to a higher level, under the Economic Transformation Programme (ETP) launched by the Government, a few sub-sectors namely integrated circuits, solar photovoltaics, light emitting diodes, and solid state lighting & integrated electronics have been identified for greater promotion based on their potential to contribute significantly towards Gross National Income (GNI) targets 2020.

 

OVERALL INDUSTRY OUTLOOK : Marginal Growth

 

CREDIT RISK EVALUATION & RECOMMENDATION

 


Incorporated in 2007, the SC is a Private Limited company, focusing on manufacturer of cooling towers. The SC has been in business for almost 5 years and it has slowly been building up contact with its clients while competing in the industry. Having strong support from its holding company has enabled the SC to remain competitive despite the challenging business environment. The SC is a large entity with strong capital position.


Over the years, the SC has penetrated into both the local and overseas market. The SC has positioned itself in the global market and is competing in the industry. Its stable clientele base will enable the SC to further enhance its business in the near term. Being a moderate size company, the SC has a total workforce of 70 employees in its business operations. Overall, we regard that the SC's management capability is average.


Due to the challenging market conditions, the SC's business performance seems to be deteriorating and losses incurred. The SC has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. However, the SC is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. A low liabilities ratio has minimised the SC's financial risk. Given a positive net worth standing at MYR 11,323,233, the SC should be able to maintain its business in the near terms.


The SC'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 SC has a good control over its resources.


The SC's payment habit is average.


The industry has reached its maturity stage and only enjoying a marginal growth. The steady growth of the country's economy will further enhance the industry activities. Thus, the SC's future performance is very much depend on its marketing strategies in order to retain its position in the market.


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

 

PROFIT AND LOSS ACCOUNT

 

 

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

NIHON SPINDLE COOLING TOWERS SDN. BHD.

 

Financial Year End

31/03/2012

31/03/2011

31/03/2010

31/03/2009

31/03/2008

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

SUMMARY

FULL

FULL

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

 

 

 

 

 

 

TURNOVER

11,518,022

18,494,658

11,815,606

14,585,994

568,625

 

----------------

----------------

----------------

----------------

----------------

Total Turnover

11,518,022

18,494,658

11,815,606

14,585,994

568,625

 

----------------

----------------

----------------

----------------

----------------

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

<3,390,834>

<564,861>

<1,047,334>

<164,027>

<709,457>

 

----------------

----------------

----------------

----------------

----------------

PROFIT/(LOSS) BEFORE TAXATION

<3,390,834>

<564,861>

<1,047,334>

<164,027>

<709,457>

Taxation

0

-

<254>

-

-

 

----------------

----------------

----------------

----------------

----------------

PROFIT/(LOSS) AFTER TAXATION

<3,390,834>

<564,861>

<1,047,588>

<164,027>

<709,457>

 

----------------

----------------

----------------

----------------

----------------

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

<2,485,933>

<1,921,072>

<873,484>

<709,457>

-

 

----------------

----------------

----------------

----------------

----------------

As restated

<2,485,933>

<1,921,072>

<873,484>

<709,457>

-

 

----------------

----------------

----------------

----------------

----------------

PROFIT AVAILABLE FOR APPROPRIATIONS

<5,876,767>

<2,485,933>

<1,921,072>

<873,484>

<709,457>

 

----------------

----------------

----------------

----------------

----------------

RETAINED PROFIT/(LOSS) CARRIED FORWARD

<5,876,767>

<2,485,933>

<1,921,072>

<873,484>

<709,457>

 

=============

=============

=============

=============

=============

 

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Bank overdraft

-

4,944

4,583

3,303

-

Hire purchase

-

10,009

8,972

8,132

511

Term loan / Borrowing

-

62,052

61,181

44,531

-

Others

-

155,086

83,761

113,676

-

 

----------------

----------------

----------------

----------------

----------------

 

-

232,091

158,497

169,642

511

 

 

BALANCE SHEET

 

 

NIHON SPINDLE COOLING TOWERS SDN. BHD.

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

2,910,779

3,004,975

2,507,413

2,779,494

836,273

 

 

 

 

 

 

 

----------------

----------------

----------------

----------------

----------------

TOTAL LONG TERM ASSETS

2,910,779

3,004,975

2,507,413

2,779,494

836,273

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Stocks

-

3,703,737

2,866,052

3,867,622

1,080,896

Trade debtors

-

5,107,484

4,301,764

4,106,638

-

Other debtors, deposits & prepayments

-

130,533

99,907

36,725

659,058

Cash & bank balances

-

1,107,796

798,533

2,064,852

1,922,026

 

----------------

----------------

----------------

----------------

----------------

TOTAL CURRENT ASSETS

16,350,285

10,049,550

8,066,256

10,075,837

3,661,980

 

----------------

----------------

----------------

----------------

----------------

TOTAL ASSET

19,261,064

13,054,525

10,573,669

12,855,331

4,498,253

 

=============

=============

=============

=============

=============

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade creditors

-

1,735,018

2,022,517

3,271,535

855,093

Other creditors & accruals

-

2,900,161

515,851

783,503

1,137,375

Hire purchase & lease creditors

-

70,030

47,516

45,124

24,650

Short term borrowings/Term loans

-

234,813

235,329

242,161

-

Bill & acceptances payable

-

3,790,000

3,150,000

1,868,000

-

Amounts owing to holding company

-

-

215,438

1,005,451

60,000

Amounts owing to subsidiary companies

-

-

-

-

18,526

Other liabilities

-

-

-

-

3,715

 

----------------

----------------

----------------

----------------

----------------

TOTAL CURRENT LIABILITIES

7,081,608

8,730,022

6,186,651

7,215,774

2,099,359

 

----------------

----------------

----------------

----------------

----------------

NET CURRENT ASSETS/(LIABILITIES)

9,268,677

1,319,528

1,879,605

2,860,063

1,562,621

 

----------------

----------------

----------------

----------------

----------------

TOTAL NET ASSETS

12,179,456

4,324,503

4,387,018

5,639,557

2,398,894

 

=============

=============

=============

=============

=============

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

17,200,000

5,700,000

5,000,000

5,000,000

3,000,000

 

----------------

----------------

----------------

----------------

----------------

TOTAL SHARE CAPITAL

17,200,000

5,700,000

5,000,000

5,000,000

3,000,000

 

 

 

 

 

 

RESERVES

 

 

 

 

 

Retained profit/(loss) carried forward

<5,876,767>

<2,485,933>

<1,921,072>

<873,484>

<709,457>

 

----------------

----------------

----------------

----------------

----------------

TOTAL RESERVES

<5,876,767>

<2,485,933>

<1,921,072>

<873,484>

<709,457>

 

 

 

 

 

 

 

----------------

----------------

----------------

----------------

----------------

SHAREHOLDERS' FUNDS/EQUITY

11,323,233

3,214,067

3,078,928

4,126,516

2,290,543

 

 

 

 

 

 

LONG TERM LIABILITIES

 

 

 

 

 

Long term loans

-

966,271

1,197,792

1,355,268

-

Hire purchase creditors

-

144,165

110,298

157,773

108,351

 

----------------

----------------

----------------

----------------

----------------

TOTAL LONG TERM LIABILITIES

856,223

1,110,436

1,308,090

1,513,041

108,351

 

----------------

----------------

----------------

----------------

----------------

 

12,179,456

4,324,503

4,387,018

5,639,557

2,398,894

 

=============

=============

=============

=============

=============

 

 

 

 

 

 

 

 

FINANCIAL RATIO

 

 

NIHON SPINDLE COOLING TOWERS SDN. BHD.

 

TYPES OF FUNDS

 

 

 

 

 

Cash

-

1,107,796

798,533

2,064,852

1,922,026

Net Liquid Funds

-

872,983

563,204

1,822,691

1,922,026

Net Liquid Assets

9,268,677

<2,384,209>

<986,447>

<1,007,559>

481,725

Net Current Assets/(Liabilities)

9,268,677

1,319,528

1,879,605

2,860,063

1,562,621

Net Tangible Assets

12,179,456

4,324,503

4,387,018

5,639,557

2,398,894

Net Monetary Assets

8,412,454

<3,494,645>

<2,294,537>

<2,520,600>

373,374

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

-

1,415,279

1,590,935

1,800,326

133,001

Total Liabilities

7,937,831

9,840,458

7,494,741

8,728,815

2,207,710

Total Assets

19,261,064

13,054,525

10,573,669

12,855,331

4,498,253

Net Assets

12,179,456

4,324,503

4,387,018

5,639,557

2,398,894

Net Assets Backing

11,323,233

3,214,067

3,078,928

4,126,516

2,290,543

Shareholders' Funds

11,323,233

3,214,067

3,078,928

4,126,516

2,290,543

Total Share Capital

17,200,000

5,700,000

5,000,000

5,000,000

3,000,000

Total Reserves

<5,876,767>

<2,485,933>

<1,921,072>

<873,484>

<709,457>

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

-

0.13

0.13

0.29

0.92

Liquid Ratio

-

0.73

0.84

0.86

1.23

Current Ratio

2.31

1.15

1.30

1.40

1.74

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

-

73

89

97

694

Debtors Ratio

-

101

133

103

0

Creditors Ratio

-

34

62

82

549

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

-

0.44

0.52

0.44

0.06

Liabilities Ratio

0.70

3.06

2.43

2.12

0.96

Times Interest Earned Ratio

-

<1.43>

<5.61>

0.03

<1,387.37>

Assets Backing Ratio

0.71

0.76

0.77

0.99

0.42

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

<29.44>

<3.05>

<8.86>

<1.12>

<124.77>

Net Profit Margin

<29.44>

<3.05>

<8.87>

<1.12>

<124.77>

Return On Net Assets

<27.84>

<7.69>

<20.26>

0.10

<29.55>

Return On Capital Employed

<27.84>

<7.19>

<19.03>

0.09

<29.25>

Return On Shareholders' Funds/Equity

<29.95>

<17.57>

<34.02>

<3.97>

<30.97>

Dividend Pay Out Ratio (Times)

-

0.00

0.00

0.00

0.00

NOTES TO ACCOUNTS

 

 

 

 

 

Contingent Liabilities

-

0

0

0

0




 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.54.84

UK Pound

1

Rs.88.39

Euro

1

Rs.72.62

 

INFORMATION DETAILS

 

Report Prepared by :

NLM

 

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%)

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.