MIRA INFORM REPORT

 

 

Report Date :

02.12.2013

 

IDENTIFICATION DETAILS

 

Name :

MINIDECO SDN. BHD.

 

 

Registered Office :

Menara City One, Letter Box Cp5-01, 3, Jalan Munshi Abdullah, Level 5, 50100 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2012

 

 

Date of Incorporation :

31.12.1997

 

 

Com. Reg. No.:

456083-X

 

 

Legal Form :

Private Limited Company

 

 

Line of Business :

importer and wholesaler of diamonds

Subject sells a wide range of gems, colour precious stones and diamonds

 

 

No. of Employees :

05 (2013)

 

RATING & COMMENTS

 

MIRA’s Rating :

B

 

RATING

STATUS

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Status :

Moderate

 

 

Payment Behaviour :

Slow but Correct  

 

 

Litigation :

Clear

 

NOTES :

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

 

ECGC Country Risk Classification List – September 30th, 2013

 

Country Name

Previous Rating

(30.06.2013)

Current Rating

(30.09.2013)

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. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. The NAJIB administration also is continuing efforts to boost domestic demand and reduce the economy''s dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver of the economy. As an oil and gas exporter, Malaysia has profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with 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 about 35% of government revenue in 2011. Bank Negera Malaysia (central bank) maintains healthy foreign exchange reserves, and a well-developed regulatory regime has limited Malaysia''s exposure to riskier financial instruments and the global financial crisis. Nevertheless, Malaysia could be vulnerable to a fall in commodity prices or a general slowdown in global economic activity because exports are a major component of GDP. In order to attract increased investment, NAJIB 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.

:

456083-X

COMPANY NAME

:

MINIDECO SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

31/12/1997

 

 

 

 

 

 

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

 

 

 

 

 

 

REGISTERED ADDRESS

:

MENARA CITY ONE, LETTER BOX CP5-01, 3, JALAN MUNSHI ABDULLAH, LEVEL 5, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

OFFICE SUITE UNIT A-23-3, TOWER A, MENARA UOA BANGSAR, 5, JALAN BANGSAR UTAMA 1, 59100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

TEL.NO.

:

03-22019192

FAX.NO.

:

03-22881230

CONTACT PERSON

:

UJJWAL MEHTA ( MANAGING DIRECTOR )

 

 

 

INDUSTRY CODE

:

46444

PRINCIPAL ACTIVITY

:

IMPORTER AND WHOLESALER OF DIAMONDS

AUTHORISED CAPITAL

:

MYR 5,000,000.00 DIVIDED INTO 
ORDINARY SHARE 5,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 1,200,000.00 DIVIDED INTO 
ORDINARY SHARES 1,200,000 CASH OF MYR 1.00 EACH.

 

 

 

SALES

:

MYR 18,353,127 [2012]

NET WORTH

:

MYR 2,094,346 [2012]

 

 

 

STAFF STRENGTH

:

5 [2013]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

FAIR

MANAGEMENT CAPABILITY

:

AVERAGE

 

 

 

COMMERCIAL RISK

:

MODERATE

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

AVERAGE 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) importer and wholesaler of diamonds.

 

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

 

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

Name

Address

IC/PP/Loc No

Shareholding

(%)

MS. ROKMINI BINTI MASIRANG +

AG 1-3, JALAN PANDAN INDAH 3/3, PANDAN INDAH, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

770702-12-5686

360,000.00

30.00

PRINCE SANCHETI +

BLOCK A 299-4-4, MENARA BANGSAR, JALAN MAAROF, BANGSAR, 59100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

Z2109502

180,000.00

15.00

UJJWAL MEHTA +

BLOK A 299-4-4, MENARA BANGSAR, JALAN MAAROF, BANGSAR, 59100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

Z2110052

180,000.00

15.00

MR. BALA SUBRAMANIAN A/L MUTHAIAH

A-11-5, GREEN PARK, SRI PUTRAMAS, JALAN PUTRAMAS 1, 51200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

701013-10-6173 A1693556

480,000.00

40.00

 

 

 

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

------

 

 

 

1,200,000.00

100.00

 

 

 

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

=====

 

+ Also Director

 

DIRECTORS



DIRECTOR 1

 

Name Of Subject

:

UJJWAL MEHTA

Address

:

BLOK A 299-4-4, MENARA BANGSAR, JALAN MAAROF, BANGSAR, 59100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

Z2110052

 

 

 

 

 

 

 

 

 

Nationality

:

INDIAN

Date of Appointment

:

20/11/1998

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 2

 

Name Of Subject

:

PRINCE SANCHETI

Address

:

BLOCK A 299-4-4, MENARA BANGSAR, JALAN MAAROF, BANGSAR, 59100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

Z2109502

 

 

 

 

 

 

 

 

 

Nationality

:

INDIAN

Date of Appointment

:

07/08/2006

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 3

 

Name Of Subject

:

MS. ROKMINI BINTI MASIRANG

Address

:

AG 1-3, JALAN PANDAN INDAH 3/3, PANDAN INDAH, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

New IC No

:

770702-12-5686

Date of Birth

:

02/07/1977

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

15/12/2004



MANAGEMENT

 

 

 

1)

Name of Subject

:

UJJWAL MEHTA

 

Position

:

MANAGING DIRECTOR

 

 

 

 

 

 

AUDITOR

 

Auditor

:

WILLIAM SANTOSH A/L JOHN

Auditor' Address

:

MENARA CITY ONE, LETTER BOX CP6-01, 3, JALAN MUNSHI ABDULLAH, LEVEL 6, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

 

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. M. RAMANATHAN A/L S M MEYYAPPAN

 

IC / PP No

:

6057502

 

New IC No

:

600923-10-6815

 

Address

:

15, JALAN DATO ABDUL AZIZ 14/29, 46100 PETALING JAYA, SELANGOR, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

 

 

 

 

 

 

 

 

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

03/08/2007

MEMO OF DEPOSIT OF FIXED DEPOSIT RECEIPT, NEGOTIABLE OF CERTIFICATE OF DEPOSIT (1ST PARTY) & LETTER OF SETOFF

MALAYAN BANKING BHD

MYR 800,000.00

Unsatisfied

2

22/03/2010

THE ASSIGNMENT

UNITED OVERSEAS BANK (MALAYSIA) BHD

N/A

Unsatisfied

3

14/07/2011

N/A

RHB BANK BHD

MYR 700,000.00

Unsatisfied

 

 

LEGAL CHECK AGAINST 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.

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

Overseas

:

YES

Import Countries

:

INDIA


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

[

 

]

 

Fair 91-120 Days

[

X

]

 

Poor >120 Days

[

 

]

 

 

 

 

 

 

 

CLIENTELE

 

Local

:

YES

Domestic Markets

:

MALAYSIA

Overseas

:

YES

 

 

 

Export Market

:

HONG KONG

BELGIUM

Credit Term

:

AS AGREED

 

 

 

 

 

 

Payment Mode

:

CASH
CHEQUES
TELEGRAPHIC TRANSFER (TT)

Type of Customer

:

JEWELLERY SHOP,AGENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATIONS

 

Goods Traded

:

DIAMONDS

 

 

 

 

Ownership of premises

:

OWNED

 

 

Total Number of Employees:

 

YEAR

2013

2010

2009

 

GROUP

N/A

N/A

N/A

 

 

 

 

 

 

COMPANY

5

3

3

 

 

 

 

 

 

 

Branch

:

NO

 

 

Other Information:


The SC is principally engaged in the (as a / as an) importer and wholesaler of diamonds. 

We were informed that the SC sells a wide range of gems, colour precious stones and diamonds.

The SC provides its products based on the customers' requirements.

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-22019192

Match

:

N/A

 

 

 

Address Provided by Client

:

OFF.SUITE UNIT A-23-3 TOWER A, 23RD,JALAN BANGSAR UTAMA 1, 59000,,MALAYSIA

Current Address

:

OFFICE SUITE UNIT A-23-3, TOWER A, MENARA UOA BANGSAR, 5, JALAN BANGSAR UTAMA 1, 59100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

Match

:

NO

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations


we contacted one of the staff from the SC and she provided some information on the SC.

The address provided is incomplete.

FINANCIAL ANALYSIS

 

 

Profitability

 

 

 

 

 

 

Turnover

:

Erratic

[

2008 - 2012

]

 

Profit/(Loss) Before Tax

:

Decreased

[

2008 - 2012

]

 

Return on Shareholder Funds

:

Unfavourable

[

3.27%

]

 

Return on Net Assets

:

Unfavourable

[

5.91%

]

 

 

 

 

 

 

 

 

The fluctuating turnover reflects the fierce competition among the existing and new market players.The dip in profit could be due to the stiff market competition which reduced the SC's profit margin. The unfavourable return on shareholders' funds could indicate that the SC was inefficient in utilising its assets to generate returns.

 

 

 

 

 

 

 

Working Capital Control

 

 

 

 

 

 

Stock Ratio

:

Favourable

[

31 Days

]

 

Debtor Ratio

:

Unfavourable

[

110 Days

]

 

Creditors Ratio

:

Unfavourable

[

83 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

:

Favourable

[

1.01 Times

]

 

Current Ratio

:

Unfavourable

[

1.23 Times

]

 

 

 

 

 

 

 

 

A minimum liquid ratio of 1 should be maintained by the SC in order to assure its creditors of its ability to meet short term obligations and the SC was in a good liquidity position. Thus, we believe the SC is able to meet all its short term obligations as and when they fall due.

 

 

 

 

 

 

 

Solvency

 

 

 

 

 

 

Interest Cover

:

Unfavourable

[

1.92 Times

]

 

Gearing Ratio

:

Unfavourable

[

1.82 Times

]

 

 

 

 

 

 

 

 

The SC'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 SC was highly geared, thus it had a high financial risk. The SC was dependent on loans to finance its business needs. In times of economic downturn and / or high interest rate, the SC will become less profitable and competitive than other firms in the same industry, which are lowly geared. This is because the SC has to service the interest and to repay the loan, which will erode part of its profits. The profits will fluctuate depending on the SC's turnover and the interest it needs to pay.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Assessment :

 

 

 

 

 

 

The SC recorded lower profits as its turnover showed a erratic trend. The SC's management was unable to control its costs efficiently as its profit showed a downward trend. 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. If there is a fall in the SC's profit or any increase in interest rate, the SC may not be able to generate sufficient cash-flow to service its interest. The SC'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 SC : POOR

 

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2009

2010

2011

2012*

2013**

 

 

 

 

 

 

Population ( Million)

28.13

28.35

28.70

29.30

29.80

Gross Domestic Products ( % )

<0.5>

7.2

5.1

5.6

5.3

Domestic Demand ( % )

2.9

6.3

8.2

9.4

5.6

Private Expenditure ( % )

<2.7>

8.1

8.2

8.0

7.4

Consumption ( % )

0.7

6.7

7.1

1.0

5.7

Investment ( % )

<17.2>

17.7

12.2

11.7

13.3

Public Expenditure ( % )

5.2

3.8

8.4

13.3

1.2

Consumption ( % )

3.1

0.2

16.1

11.3

<1.2>

Investment ( % )

8.0

2.8

<0.3>

15.9

4.2

 

 

 

 

 

 

Balance of Trade ( MYR Million )

89,650

118,356

116,058

106,300

110,700

Government Finance ( MYR Million )

<28,450>

<40,482>

<45,511>

<42,297>

<39,993>

Government Finance to GDP / Fiscal Deficit ( % )

<4.8>

<5.6>

<5.4>

<4.5>

<4.0>

Inflation ( % Change in Composite CPI)

<5.2>

5.1

3.1

1.6

2.5

Unemployment Rate

4.5

3.9

3.3

3.2

3.0

 

 

 

 

 

 

Net International Reserves ( MYR Billion )

331

329

415

427

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

2.87

2.20

3.50

2.20

-

Average 3 Months of Non-performing Loans ( % )

11.08

15.30

14.80

14.70

-

Average Base Lending Rate ( % )

5.53

6.30

6.60

6.53

-

Business Loans Disbursed( % )

10.5

14.7

15.3

32.2

-

Foreign Investment ( MYR Million )

22,156.8

22,517.9

23,546.1

26,230.4

-

Consumer Loans ( % )

-

-

-

-

-

 

 

 

 

 

 

Registration of New Companies ( No. )

41,578

44,148

45,455

45,441

-

Registration of New Companies ( % )

<0.1>

6.2

3.0

<0.0>

-

Liquidation of Companies ( No. )

39,075

25,585

132,476

-

-

Liquidation of Companies ( % )

39.6

<34.5>

417.8

-

-

 

 

 

 

 

 

Registration of New Business ( No. )

312,581

271,414

284,598

324,761

-

Registration of New Business ( % )

-

-

-

-

-

Business Dissolved ( No. )

19,345

19,738

20,121

-

-

Business Dissolved ( % )

2.4

2.0

1.9

-

-

 

 

 

 

 

 

Sales of New Passenger Cars (' 000 Unit )

486.3

543.6

535.1

552.2

-

Cellular Phone Subscribers ( Million )

30.1

32.8

35.3

38.5

-

Tourist Arrival ( Million Persons )

23.6

24.6

24.7

25.0

-

Hotel Occupancy Rate ( % )

58.0

63.0

60.6

62.4

-

 

 

 

 

 

 

Credit Cards Spending ( % )

12.8

14.1

15.6

12.6

-

Bad Cheque Offenders (No.)

36,667

33,568

32,627

26,982

-

Individual Bankruptcy ( No.)

16,228

18,119

19,167

19,575

-

Individual Bankruptcy ( % )

16.7

11.7

5.8

2.1

-

 

 

 

 

 

 

INDUSTRIES ( % of Growth ):

2009

2010

2011

2012*

2013**

 

 

 

 

 

 

Agriculture

0.4

2.1

5.9

0.6

2.4

Palm Oil

<1.1>

<3.4>

10.8

<2.8>

-

Rubber

<19.8>

9.9

6.1

<0.6>

-

Forestry & Logging

<5.9>

<3.3>

<7.6>

<2.2>

-

Fishing

5.5

5.6

2.1

<0.7>

-

Other Agriculture

9.0

7.9

7.1

6.4

-

Industry Non-Performing Loans ( MYR Million )

413.7

508.4

634.1

-

-

% of Industry Non-Performing Loans

1.3

2.1

3.2

-

-

 

 

 

 

 

 

Mining

<3.8>

0.2

<5.7>

1.5

2.7

Oil & Gas

2.1

0.5

<1.7>

-

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

44.2

49.7

46.5

-

-

% of Industry Non-performing Loans

0.1

0.1

0.1

-

-

 

 

 

 

 

 

Manufacturing #

<9.4>

11.4

4.7

4.2

4.9

Exported-oriented Industries

<19.0>

12.1

2.8

4.1

-

Electrical & Electronics

<30.3>

28.4

<4.9>

1.6

-

Rubber Products

<10.1>

25.3

15.4

3.6

-

Wood Products

<24.1>

20.1

<4.9>

4.6

-

Textiles & Apparel

<19.5>

<0.4>

14.8

<7.1>

-

Domestic-oriented Industries

<9.8>

16.3

6.5

8.6

-

Food, Beverages & Tobacco

0.2

3.0

4.2

-

-

Chemical & Chemical Products

<7.7>

16.2

5.5

9.9

-

Plastic Products

<9.1>

2.4

3.8

-

-

Iron & Steel

<32.7>

29.3

2.4

-

-

Fabricated Metal Products

<2.5>

14.9

25.2

-

-

Non-metallic Mineral

<15.5>

20.2

27.1

6.6

-

Transport Equipment

<13.5>

36.5

<10.4>

13.7

-

Paper & Paper Products

<5.0>

18.7

14.8

<7.8>

-

Crude Oil Refineries

0.2

<11.4>

9.3

-

-

Industry Non-Performing Loans ( MYR Million )

6,007.3

6,217.5

6,537.2

-

-

% of Industry Non-Performing Loans

18.3

23.8

25.7

-

-

 

 

 

 

 

 

Construction

5.8

5.1

4.4

15.5

11.2

Industry Non-Performing Loans ( MYR Million )

3,241.8

4,038.5

3,856.9

-

-

% of Industry Non-Performing Loans

9.9

10.7

10.2

-

-

 

 

 

 

 

 

Services

2.6

6.5

6.4

5.5

5.6

Electric, Gas & Water

0.4

8.5

5.6

4.8

-

Transport, Storage & Communication

1.6

7.7

6.5

7.3

-

Wholesale, Retail, Hotel & Restaurant

2.8

4.7

5.2

6.9

-

Finance, Insurance & Real Estate

3.8

6.1

6.3

6.5

-

Government Services

2.0

6.7

7.6

5.6

-

Other Services

4.4

4.2

5.4

5.7

-

Industry Non-Performing Loans ( MYR Million )

6,631.3

7,384.6

6,825.2

-

-

% of Industry Non-Performing Loans

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

46444 : Wholesale of jewellery

 

 

INDUSTRY :

TRADING

 

 

 

According to the Retail Group Malaysia (RGM), the wholesale and retail trade sector forecast to grow to 6% in year 2013. During the first quarter of year 2013, RGM is estimating the retail industry to grow 6.9%. Many retailers have been enjoying better sales since the government handed out cash from mid-January of 2013 under the second round of Bantuan Rakyat 1Malaysia to more than 12 million Malaysians. Bookstores and related retail stores have also started enjoying rising sales since the RM250 1Malaysia Book Voucher was distributed to 1.3 million private and public university students. Besides, since early February 2013, handphone traders and retailers selling smartphone accessories have started to benefit from the RM200 rebate on smartphones for 1.5 million young adults aged between 21 and 30 years with a monthly income of not more than RM3,000.

 

The wholesale and retail trade sector grew 6.1% in the first half of the year 2012 driven by strong domestic consumption and the increasing number of large format stores operating in Malaysia, including 180 foreign hypermarkets, superstores and departmental stores as at end of August 2012. In addition, other indicators such as imports of consumption goods were higher by 15.2%.

 

In 2012, the wholesale and retail trade sector growth to 5.5% driven by higher consumption which benefited from Government initiatives under the 2012 Budget such as BR1M, Baucar Buku 1Malaysia (BB1M) and the RM100 assistance for all primary and secondary school students. The performance of the sector will also be supported by ongoing efforts to modernise the retail segment under the ETP. In 2012, 500 retail shops and 50 workshops are targeted to be modernised under the Retail Shop Transformation (TUKAR) and Automotive Workshop Modernisation (ATOM) programmes, respectively. As at end of July 2012, 95 workshops have been modernised, surpassing the yearly target, while 393 retail shops have been modernised.

 

Growth of the sector is anticipated to remain encouraging with ongoing efforts by the Government to increase its contribution to the economy. Major initiatives include increasing the number of large format stores such as hypermarkets, superstores and departmental stores are carried out to boost the economy.

 

Over 60% of Gross Domestic Product (GDP) is contributed by domestic consumption, therefore the wholesale and retail sector plays a crucial role in driving Malaysia's growth over the next decade despite the ongoing global economic slowdown. By 2020, Malaysia's wholesale and retail sector is expected to boost the country's total Gross National Income (GNI) by RM156 billion, creating 454,190 new jobs.

 

 

OVERALL INDUSTRY OUTLOOK : Average Growth

 

CREDIT RISK EVALUATION & RECOMMENDATION

 

 

Incorporated in 1997, the SC is a Private Limited company, focusing on import and wholesale of diamonds. Having been in the industry for over a decade, the SC has achieved a certain market share and has built up a satisfactory reputation in the market. It should have received supports from its regular customers. The capital standing of the SC is fair. However, the SC does not have strong shareholders’ backing. 

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 small company, the SC's business operation is supported by 5 employees. Overall, we regard that the SC's management capability is average. 

The SC's business performance showed a reverse trend as both its turnover and pre-tax profit have decreased compared to the previous year. The SC has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. The SC is in good liquidity position with its current liabilities well covered by it current assets. However, the high gearing ratio clearly implied that the SC was supported by more debt than equity. Thus, the SC is exposed to high financial risk. 

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. 

The SC's overall payment habit is fair and this clearly implied a weak credit control of the SC. 

The industry shows an upward trend and this trend is very likely to sustain in the near terms. Hence, the SC is expected to benefit from the favourable outlook of the industry. Nonetheless, the SC should adopt better competitive strategies in order to sustain its business position and to compete with other well established players in the same industry. 

In view of its poor financial condition, 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)

MINIDECO SDN. BHD.

 

Financial Year End

2012-12-31

2011-12-31

2010-12-31

2009-12-31

2008-12-31

Months

12

12

12

12

12

Consolidated Account

Company

Company

Company

Company

Company

Audited Account

YES

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

YES

Financial Type

FULL

FULL

FULL

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

 

 

 

 

 

 

TURNOVER

18,353,127

19,215,739

17,409,641

15,876,447

16,618,491

Other Income

134,171

123,567

197,929

-

-

 

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

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

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

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

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

Total Turnover

18,487,298

19,339,306

17,607,570

15,876,447

16,618,491

Costs of Goods Sold

<17,515,542>

<18,344,546>

<16,580,717>

-

-

 

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

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

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

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

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

Gross Profit

971,756

994,760

1,026,853

-

-

 

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

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

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

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

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

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

94,636

108,846

254,658

105,354

124,548

 

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

94,636

108,846

254,658

105,354

124,548

Taxation

<26,152>

<39,185>

<31,266>

<25,967>

<33,092>

 

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

68,484

69,661

223,392

79,387

91,456

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

825,862

756,201

532,809

453,422

361,966

 

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

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

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

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

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

As restated

825,862

756,201

532,809

453,422

361,966

 

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

894,346

825,862

756,201

532,809

453,422

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

894,346

825,862

756,201

532,809

453,422

 

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

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

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

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

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

 

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Bank overdraft

31,679

23,553

17,175

-

-

Hire purchase

5,465

6,315

4,371

-

1,944

Term loan / Borrowing

65,382

56,887

51,537

-

-

Others

-

-

134,902

156,352

-

 

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

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

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

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

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

 

102,526

86,755

207,985

156,352

1,944

 

 

 

BALANCE SHEET

 

 

MINIDECO SDN. BHD.

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

1,667,398

1,572,990

1,664,106

688,860

725,892

 

 

 

 

 

 

 

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

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

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

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

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

TOTAL LONG TERM ASSETS

1,667,398

1,572,990

1,664,106

688,860

725,892

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Stocks

1,578,287

1,512,759

1,886,328

1,900,547

1,110,560

Trade debtors

5,555,769

6,640,394

6,275,291

7,204,430

6,077,134

Other debtors, deposits & prepayments

55,983

53,983

53,983

158,839

26,000

Short term deposits

1,357,073

1,385,914

919,756

878,556

831,904

Cash & bank balances

259,086

301,223

34,827

26,946

253,823

 

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

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

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

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

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

TOTAL CURRENT ASSETS

8,806,198

9,894,273

9,170,185

10,169,318

8,299,421

 

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

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

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

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

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

TOTAL ASSET

10,473,596

11,467,263

10,834,291

10,858,178

9,025,313

 

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

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

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

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

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

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade creditors

3,997,655

4,700,234

5,066,048

5,769,437

4,771,385

Other creditors & accruals

55,648

172,559

466,910

755,901

979,662

Hire purchase & lease creditors

216,344

143,576

180,071

55,623

12,156

Bank overdraft

373,691

382,137

202,530

224,656

200,624

Short term borrowings/Term loans

-

-

-

-

54,000

Other borrowings

1,980,000

1,986,000

1,590,106

1,610,000

1,271,738

Amounts owing to director

497,205

643,524

390,966

492,414

351,537

Provision for taxation

15,314

28,310

20,428

14,972

19,060

 

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

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

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

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

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

TOTAL CURRENT LIABILITIES

7,135,857

8,056,340

7,917,059

8,923,003

7,660,162

 

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

1,670,341

1,837,933

1,253,126

1,246,315

639,259

 

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

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

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

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

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

TOTAL NET ASSETS

3,337,739

3,410,923

2,917,232

1,935,175

1,365,151

 

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

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

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

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

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

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

1,200,000

1,200,000

1,200,000

1,000,000

500,000

 

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

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

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

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

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

TOTAL SHARE CAPITAL

1,200,000

1,200,000

1,200,000

1,000,000

500,000

 

 

 

 

 

 

RESERVES

 

 

 

 

 

Retained profit/(loss) carried forward

894,346

825,862

756,201

532,809

453,422

 

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

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

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

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

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

TOTAL RESERVES

894,346

825,862

756,201

532,809

453,422

 

 

 

 

 

 

 

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

2,094,346

2,025,862

1,956,201

1,532,809

953,422

 

 

 

 

 

 

LONG TERM LIABILITIES

 

 

 

 

 

Long term loans

1,243,393

1,385,061

961,031

402,366

356,106

Hire purchase creditors

-

-

-

-

55,623

 

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

1,243,393

1,385,061

961,031

402,366

411,729

 

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

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

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

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

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

 

3,337,739

3,410,923

2,917,232

1,935,175

1,365,151

 

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

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

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

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

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

 

 

 

FINANCIAL RATIO

 

 

MINIDECO SDN. BHD.

 

TYPES OF FUNDS

 

 

 

 

 

Cash

1,616,159

1,687,137

954,583

905,502

1,085,727

Net Liquid Funds

1,242,468

1,305,000

752,053

680,846

885,103

Net Liquid Assets

92,054

325,174

<633,202>

<654,232>

<471,301>

Net Current Assets/(Liabilities)

1,670,341

1,837,933

1,253,126

1,246,315

639,259

Net Tangible Assets

3,337,739

3,410,923

2,917,232

1,935,175

1,365,151

Net Monetary Assets

<1,151,339>

<1,059,887>

<1,594,233>

<1,056,598>

<883,030>

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

3,813,428

3,896,774

2,933,738

2,292,645

1,950,247

Total Liabilities

8,379,250

9,441,401

8,878,090

9,325,369

8,071,891

Total Assets

10,473,596

11,467,263

10,834,291

10,858,178

9,025,313

Net Assets

3,337,739

3,410,923

2,917,232

1,935,175

1,365,151

Net Assets Backing

2,094,346

2,025,862

1,956,201

1,532,809

953,422

Shareholders' Funds

2,094,346

2,025,862

1,956,201

1,532,809

953,422

Total Share Capital

1,200,000

1,200,000

1,200,000

1,000,000

500,000

Total Reserves

894,346

825,862

756,201

532,809

453,422

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

0.23

0.21

0.12

0.10

0.14

Liquid Ratio

1.01

1.04

0.92

0.93

0.94

Current Ratio

1.23

1.23

1.16

1.14

1.08

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

31

29

40

44

24

Debtors Ratio

110

126

132

166

133

Creditors Ratio

83

94

112

133

105

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

1.82

1.92

1.50

1.50

2.05

Liabilities Ratio

4.00

4.66

4.54

6.08

8.47

Times Interest Earned Ratio

1.92

2.25

2.22

1.67

65.07

Assets Backing Ratio

2.78

2.84

2.43

1.94

2.73

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

0.52

0.57

1.46

0.66

0.75

Net Profit Margin

0.37

0.36

1.28

0.50

0.55

Return On Net Assets

5.91

5.73

15.86

13.52

9.27

Return On Capital Employed

5.02

4.97

14.02

11.81

8.02

Return On Shareholders' Funds/Equity

3.27

3.44

11.42

5.18

9.59

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

 

DIAMOND INDUSTRY – INDIA

 

-            From time immemorial, India is well known in the world as the birthplace for diamonds.  It is difficult to trace the origin of diamonds but history says that in the remote past, diamonds were mined only in India. Diamond production in India can be traced back to almost 8th Century B.C.  India, in fact, remained undisputed leader till 18th Century when Brazilian fields were discovered in 1725 followed by emergence of S. Africa, Russia and Australia.

-            The achievement of the Indian diamond industry was possible only due to combination of the manufacturing skills of the Indian workforce and the untiring and unflagging efforts of the Indian diamantaires, supported by progressive Government policies.

-            The area of study of family owned diamond businesses derives its importance from the huge conglomerate of family run organizations which operate in the diamond industry since many generations.

-            Some of the basic traits of family run business enterprises include spirit of entrepreneurship, mutual trust lowers transaction costs, small, nimble and quick to react, information as a source of advantage and philanthropy.

-            Family owned diamond businesses need to improve on many fronts including higher standard of corporate governance, long-term performance – focused strategies, modern management and technology.

-            Utmost caution is to be exercised while dealing with some medium and large diamond traders which are usually engaged in fictitious import – export, inter-company transactions, financially assisted by banks. In the process, several public sector banks lost several hundred million rupees. They mostly diverted borrowed money for diamond business into real estate and capital markets.

-            Excerpts from Times of India dated 30th October 2010 is as under –

 

-            Gem & Jewellery Export Promotion Council in its statistical data has shown the export of polished diamonds to have increase by 28 % in February 2013. Compared to $ 1.4 bn worth of polished diamond export in February, 2012, India exported $ 1.84 billion worth of polished diamonds in February 2013. A senior executive of GJEPC said, “Export of cut and polished diamonds started falling month-wise after the imposition of 2 % of import duty on the polished diamonds. But February, 2013 has given a new ray of hope to the industry as the export of polished diamonds has actually increased by 28 %. It means the industry  is on the track of recovery and round tripping of diamonds has stopped completely.” Demand has started coming from the US, the UK, Japan and China. India’s polished diamond export is expected to cross $ 21 bn in 2013-14.

 

-            The banking sector has started exercising restraint while following prudent risk management norms when lending money to gems and jewellery sector. This follows the implementation of Basel III accord – a global voluntary regulatory standard on bank capital adequacy, stress testing and market liquidity.

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.62.39

UK Pound

1

Rs.102.06

Euro

1

Rs.84.98

 

INFORMATION DETAILS

 

Report Prepared by :

MNL

 

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.