MIRA INFORM REPORT

 

 

Report Date :

11.12.2013

 

IDENTIFICATION DETAILS

 

Name :

SKB STORAGE INDUSTRIES SDN. BHD.

 

 

Registered Office :

Wisma Penang Garden, 42, Jalan Sultan Ahmad Shah, 2nd Floor, 10050 Pulau Pinang, Pulau Pinang

 

 

Country :

Malaysia

 

 

Financials (as on) :

30.06.2012

 

 

Date of Incorporation :

04.09.2001

 

 

Com. Reg. No.:

557922-U

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Manufacturing and Sale of Roller Shutters, Racking Systems, Storage Systems & Related Steel Products

 

 

No. of Employees :

250

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 


 

Status :

Good

 

 

Payment Behaviour :

No complaints

 

 

Litigation :

Clear

 

NOTES:

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

 

ECGC Country Risk Classification List – March, 31st, 2013

 

Country Name

Previous Rating

(31.12.2012)

Current Rating

(31.03.2013)

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

 


EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

557922-U

COMPANY NAME

:

SKB STORAGE INDUSTRIES SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

04/09/2001

 

 

 

 

 

 

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

WISMA PENANG GARDEN, 42, JALAN SULTAN AHMAD SHAH, 2ND FLOOR, 10050 PULAU PINANG, PULAU PINANG, MALAYSIA.

BUSINESS ADDRESS

:

LOT 22, JALAN TEKNOLOGI,TAMAN SAINS SELANGOR 1, KOTA DAMANSARA, 47810 PETALING JAYA, SELANGOR, MALAYSIA.

TEL.NO.

:

03-61572277

FAX.NO.

:

03-61572211

EMAIL

:

SKB@SKB.COM.MY

WEB SITE

:

WWW.SKB-SHUTTERS.COM

CONTACT PERSON

:

SIN KHENG LEE ( MANAGING DIRECTOR )

INDUSTRY CODE

:

25

PRINCIPAL ACTIVITY

:

MANUFACTURING AND SALE OF ROLLER SHUTTERS, RACKING SYSTEMS, STORAGE SYSTEMS & RELATED STEEL PRODUCTS

AUTHORISED CAPITAL

:

MYR 100,000.00 DIVIDED INTO 

ORDINARY SHARE 100,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 100,000.00 DIVIDED INTO

ORDINARY SHARES 100,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 27,011,283 [2012]

NET WORTH

:

MYR 6,268,558 [2012]

STAFF STRENGTH

:

250 [2013]

BANKER (S)

:

EON BANK BHD

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

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) manufacturing and sale of roller shutters, racking systems, storage systems & related steel products.

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

 

The immediate holding company of the SC is SKB SHUTTERS CORPORATION BERHAD, a company incorporated in MALAYSIA.

 

The ultimate holding company of the SC is SKB GLORY SDN BHD, a company incorporated in MALAYSIA.

 

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


Name

Address

IC/PP/Loc No

Shareholding

(%)

SKB SHUTTERS CORPORATION BERHAD

SUITE 2-1, MENARA PENANG GARDEN, 42A, JALAN SULTAN AHMAD SHAH, 2ND FLOOR, 10050 PULAU PINANG, PULAU PINANG, MALAYSIA.

430362U

100,000.00

100.00

 

 

 

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

------

 

 

 

100,000.00

100.00

 

 

 

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

=====

+ Also Director

 

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. SIN CHING SAN

Address

:

1, JALAN PENGATUCARA U1/51D, SEKSYEN U1, GLENMARIE, 40150 SHAH ALAM, SELANGOR, MALAYSIA.

IC / PP No

:

A1177960

New IC No

:

681120-07-5565

Date of Birth

:

20/11/1968

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

09/10/2006

 

 

 

 

 

 

Profile

:

13 YEARS EXPERIENCE & EXPOSURE IN THE ROLLER SHUTTERS & METAL-BASED INDUSTRY.

 

 

 

 


DIRECTOR 2

 

Name Of Subject

:

MS. CHOU LEE SIN

Address

:

14, JALAN U2/48B, LAMAN SAUJANA 2, SUBANG SAUJANA GOLF RESORT, 40150 SHAH ALAM, SELANGOR, MALAYSIA.

IC / PP No

:

9533915

New IC No

:

590129-71-5086

Date of Birth

:

29/01/1959

 

 

 

Nationality

:

TAIWANESE

Date of Appointment

:

09/10/2006

 

 

 

Qualification

:

DIP IN SYNTHETIC COMMERCE FROM TAIPEI, TAIWAN.

Profile

:

ATTACHED TO SIN KEAN BOON METAL INDUSTRIES S/B IN 1982 WHICH STATIONED I KL. OVER 19 YEARS EXPERIENCE IN THE ROLLER SHUTTERS & METAL BASED INDUSTRY. JOINED SKB SHUTTERS MANUFACTURING S/B ON MAY 1992 AS A GM. GM OF SKB TRADING S/B .

 

 

 

 

DIRECTOR 3

 

Name Of Subject

:

MR. SIN KHENG LEE

Address

:

14, JALAN U2/48B, JALAM SAUJANA 2, SUBANG SAUJANA GOLF RESORT, 40150 SHAH ALAM, SELANGOR, MALAYSIA.

IC / PP No

:

5206772

New IC No

:

570805-07-5769

Date of Birth

:

05/08/1957

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

04/09/2001

 

 

 

Qualification

:

DIP IN MECHANICAL ENG FROM TAIPEI INST OF TECHNOLOGY IN TAIWAN IN 1979.

Profile

:

JOINED SIN KEAN BOON METAL INDUSTRIES S/B FOR 13 YEARS UNTIL RESIGNED IN MAY 1992. 22 YEARS EXPERIENCE IN THE ROLLER SHUTTERS BUS.

 

 

 



MANAGEMENT

 

 

 

1)

Name of Subject

:

SIN KHENG LEE

 

Position

:

MANAGING DIRECTOR

 

 

AUDITOR

 

Auditor

:

KPMG

Auditor' Address

:

WISMA PENANG GARDEN, 42, JALAN SULTAN AHMAD SHAH, 1ST FLOOR, 10050 PULAU PINANG, PULAU PINANG, MALAYSIA.

 

 

 

 

 

 

 


COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. CHIN LEE PHING

 

IC / PP No

:

A2056059

 

New IC No

:

711216-07-5142

 

Address

:

15, TAMAN LUMBA KUDA, 11400 PULAU PINANG, PULAU PINANG, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

EON BANK BHD

 

 

 

 

 

 

 

 

 

2)

Name

:

MALAYAN BANKING BHD

 

 

 

 

 

 

 

 

 

 

 

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

Overseas

:

YES

Import Countries

:

TAIWAN,CHINA


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

:

AUSTRALIA

SINGAPORE

Credit Term

:

30 DAYS

 

 

 

 

 

 

Payment Mode

:

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATIONS

 

Products manufactured

:

ROLLER SHUTTERS, STORAGE RACK

 

 

 

Member(s) / Affiliate(s)

:

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

 

 

 

Ownership of premises

:

LEASED/RENTED

 

 

Total Number of Employees:

 

YEAR

2013

2011

2010

2009

 

 

 

 

 

GROUP

N/A

N/A

N/A

N/A

 

 

 

 

 

COMPANY

250

253

253

250

 

 

 

 

 

 

Branch

:

NO

 

 

Other Information:


The SC is principally engaged in the (as a / as an) manufacturing and sale of roller shutters, racking systems, storage systems & related steel products. 

We were informed that the SC is sharing the management and premises with its holding company, SKB Shutters Coporation Bhd.

The SC's production site is equipment with advanced automated and semi-automated machineries to ensure production of high quality products.


Besides that the SC also provides 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

:

03-61572277

Match

:

N/A

 

 

 

Address Provided by Client

:

LOT 22 JALAN TEKNOLOGI TAMAN SAINS SELANGOR KOTA DAMANSARA 47810 PETALING JAYA SELANGOR DARUL EHSAN

Current Address

:

LOT 22, JALAN TEKNOLOGI,TAMAN SAINS SELANGOR 1, KOTA DAMANSARA, 47810 PETALING JAYA, SELANGOR, MALAYSIA.

Match

:

YES

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations


On 10th December 2013 we contacted one of the staff from the SC and she provided some information on the SC.


FINANCIAL ANALYSIS

 

 

Profitability

 

 

 

 

 

 

Turnover

:

Increased

[

2008 - 2012

]

 

Profit/(Loss) Before Tax

:

Decreased

[

2008 - 2012

]

 

Return on Shareholder Funds

:

Acceptable

[

18.94%

]

 

Return on Net Assets

:

Acceptable

[

22.15%

]

 

 

 

 

 

 

 

 

The SC's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The dip in profit could be due to the stiff market competition which reduced the SC's profit margin. The SC's management had generated acceptable return for its shareholders using its assets.

 

 

 

 

 

 

 

Working Capital Control

 

 

 

 

 

 

Stock Ratio

:

Unfavourable

[

216 Days

]

 

Debtor Ratio

:

Favourable

[

10 Days

]

 

Creditors Ratio

:

Unfavourable

[

77 Days

]

 

 

 

 

 

 

 

 

The SC could be incurring higher holding cost. As its capital was tied up in stocks, it could face liquidity problems. The favourable debtors' days could be due to the good credit control measures implemented by the SC. 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

[

0.13 Times

]

 

Current Ratio

:

Unfavourable

[

1.21 Times

]

 

 

 

 

 

 

 

 

A low liquid ratio means that the SC may be facing working capital deficiency. If the SC cannot obtain additional financing or injection of fresh capital, it may face difficulties in meeting its short term obligations.

 

 

 

 

 

 

 

Solvency

 

 

 

 

 

 

Interest Cover

:

Acceptable

[

5.48 Times

]

 

Gearing Ratio

:

Favourable

[

0.58 Times

]

 

 

 

 

 

 

 

 

The SC's interest cover was slightly low. If there is no sharp fall in its profit or sudden increase in the interest rates, we believe the SC is able to generate sufficient income to service its interest and repay the loans. The SC was lowly geared thus it had a low financial risk. The SC was mainly financed by its shareholders' funds and internally generated funds. In times of economic slowdown / downturn, the SC being a lowly geared company, will be able to compete better than those companies which are highly geared in the same industry.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Assessment :

 

 

 

 

 

 

Although the SC's turnover had increased, its profits had declined over the same corresponding period. This could be due to the stiffer market competition and / or higher operating costs which lowered the SC's profit margin. Due to its weak liquidity position, the SC will be faced with problems in meeting all its short term obligations if no short term loan is obtained or additional capital injected into the SC. The SC had an acceptable interest cover. If there is no sudden sharp increase in interest rate or fall in the SC's profit, we do believe the SC is able to generate sufficient cash flow to service its interest payment. The SC as a lowly geared company, will be more secured compared to those highly geared companies. It has the ability to meet all its long term obligations.

 

 

 

 

 

 

 

Overall financial condition of the SC : FAIR

 

 

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

25 : MANUFACTURE OF FABRICATED METAL PRODUCTS EXCEPT MACHINERY AND EQUIPMENT 

 

 

INDUSTRY :

MANUFACTURING

 

 

 

The Manufacturing sector is one of the important sectors to the growth of the Malaysian economy. According to Ministry of Finance, the manufacturing sector is expected to grow 4.9% in year 2013. Export oriented-industries are expected to benefit from the higher growth of global trade, while domesticoriented industries expand in line with the better consumer sentiment and business confidence. The resource-based industries are envisaged to grow steadily attributed to improved demand for petroleum, chemical, rubber and plastic products. With better job prospects and higher disposable income, the transportation equipment subsector, in particular, the passenger car segment is expected to expand. 

 

Value-added of the manufacturing sector expanded 5% during the first half of 2012. Output of the sector rose 5.2% during the first sevenmonths of 2012 in line with the increase in sales value of manufactured products by 6.5% to RM363.1 billion. Output from domesticoriented industries continued to expand 8.6% while export-oriented industries grew 4.1%.

 

According to the Department of Statistics, the sales value of the Manufacturing sector in January 2013 posted a growth of 7.4% (RM3.6 billion) to record RM52.4 billion as compared to RM48.8 billion reported in year 2012. Meanwhile, month-on-month basis, the sales value has decreased by 0.4% (RM0.2 billion) as compared with the preceding month. The sales value in December 2012 has been revised positive 7.5% year-on-year to record RM52.6 billion. 

 

Output of rubber products increased 3.6% in the first seven month of 2012 mainly supported by continuous demand for rubber gloves. Output of rubber gloves grew 5.9% on account of the expansion in the global healthcare industry and wider usage of gloves in other sectors. Similarly, output of catheters, especially for use in medical appliances, also registered a strong growth of 12.6%. Nevertheless, production of rubber tyres and tubes reduced 10.9% in tandem with slowing external demand from the automotive industry, especially China. 

 

Meanwhile, production of wood and wood products rebounded 4.6% largely supported by higher demand for wooden and cane furniture (33.5%). The positive performance was attributed to vibrant higher demand from major export destinations such as China and the United States (US) for Malaysian-made furniture. Demand from China accelerated further following the country’s rising income level and the implementation of zero import duty on Malaysian made-furniture. Malaysia government has growth target of 6.5% for wood based furniture where estimated to reach up to RM53 billion by year 2020.The government providing pioneer status for tax exemption and investment tax allowance for this industry as a boost up step towards produce good quality product and to meet the world demand.

 

The output of chemicals and chemical products rose 9.9% in the first seven month of year 2012 on account of increasing demand for plastic products (11.8%) and basic chemicals (11.1%). External demand for plastic packaging materials surged during the early part of the year 2012, particularly from Japan and Thailand, as manufacturers resumed operations, which were interrupted by natural calamities and power outages. Chemical production are expected to show 7.5 % in year 2013 inline with Malaysia as one of the largest contributor in world Chemicals & Chemical industries. 

 

Tax and non-tax incentives provided by goverment encourage manufacturers to move up the value chain of manufacturing industry. The new growth initiatives by goverment in the manufacturing sector such assolar and medial services can be important drivers of growth apart from helping to diversify the manufacturing base and contributing to the resilience of the sector.

 

 

OVERALL INDUSTRY OUTLOOK : Average Growth



CREDIT RISK EVALUATION & RECOMMENDATION

 

 

Incorporated in 2001, the SC is a Private Limited company, focusing on manufacturing and sale of roller shutters, racking systems, storage systems & related steel products. With its long establishment in the market, the SC has received strong support from its stable customers base. Its business position in the market is quite stable and it is expected to enjoy better market shares over its rivals. The SC is well backed by a listed company shareholders which would stimulate further growth for the SC. Hence, the potential growth of the SC is positive.


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. The SC is a fairly large and rapidly growing company with over 250 staff in its operations. Overall, we regard that the SC's management capability is average. This indicates that the SC has greater potential to improve its business performance and raising income for the SC.


Financially, the SC registered a higher turnover compared to previous year. However, its profits showed a reverse trend. The lower profit achieved was a result of higher operating cost and increased competition. Return on shareholders' funds of the SC was at an acceptable range which indicated that the management was efficient in utilising its funds to generate income. Being a lowly geared company, the SC is exposed to low financial risk as it is mainly dependent on its internal funds to finance its business needs. However, due to its weak liquidity position, the SC may face working capital deficiency in meeting its short term financial obligations if no fresh capital are injected into the SC. Given a positive net worth standing at MYR 6,268,558, the SC should be able to maintain its business in the near terms.


Having a strong assets backing, the SC possesses latent assets as collateral for further financial extension. Hence, it has good chance of getting loans if the needs arises. 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. With its adequate working capital, the SC should be able to pay its short term debts. 

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.


Based on the above condition, we recommend credit be granted to the SC promptly.

 



PROFIT AND LOSS ACCOUNT

 

 

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

 

Financial Year End

2012-06-30

2011-06-30

2010-06-30

2009-06-30

2008-06-30

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

27,011,283

23,829,829

23,514,763

34,806,302

28,554,917

 

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

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

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

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

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

Total Turnover

27,011,283

23,829,829

23,514,763

34,806,302

28,554,917

Costs of Goods Sold

<22,697,767>

<19,350,941>

-

-

-

 

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

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

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

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

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

Gross Profit

4,313,516

4,478,888

-

-

-

 

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

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

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

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

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

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

1,234,817

1,389,327

1,029,537

1,194,211

1,671,710

 

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

1,234,817

1,389,327

1,029,537

1,194,211

1,671,710

Taxation

<47,830>

<431,091>

<61,945>

<189,096>

<429,254>

 

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

1,186,987

958,236

967,592

1,005,115

1,242,456

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

4,981,571

4,023,335

3,055,743

2,050,628

808,172

 

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

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

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

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

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

As restated

4,981,571

4,023,335

3,055,743

2,050,628

808,172

 

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

6,168,558

4,981,571

4,023,335

3,055,743

2,050,628

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

6,168,558

4,981,571

4,023,335

3,055,743

2,050,628

 

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

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

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

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

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

 

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Bank overdraft

95,333

76,263

26,735

23,461

-

Bankers' acceptance

90,398

49,130

-

-

-

Lease interest

75,315

115,753

136,874

89,972

67,197

Term loan / Borrowing

-

-

-

-

2,413

Others

14,478

39,835

120,219

282,239

544,101

 

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

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

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

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

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

 

275,524

280,981

283,828

395,672

613,711

 

 

BALANCE SHEET

 

 

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

3,685,910

4,339,898

5,166,995

3,787,242

3,199,310

 

 

 

 

 

 

 

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

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

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

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

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

TOTAL LONG TERM ASSETS

3,685,910

4,339,898

5,166,995

3,787,242

3,199,310

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Stocks

16,003,966

20,551,528

17,507,388

12,608,752

14,422,077

Trade debtors

715,770

1,626,697

1,868,016

2,344,515

2,667,197

Other debtors, deposits & prepayments

217,205

214,140

266,251

146,515

689,452

Cash & bank balances

1,017,521

1,044,986

1,682,645

730,023

242,120

Others

-

-

354,117

678,491

125,651

 

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

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

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

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

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

TOTAL CURRENT ASSETS

17,954,462

23,437,351

21,678,417

16,508,296

18,146,497

 

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

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

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

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

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

TOTAL ASSET

21,640,372

27,777,249

26,845,412

20,295,538

21,345,807

 

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

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

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

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

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

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade creditors

4,772,365

12,410,102

-

1,438,929

6,364,062

Other creditors & accruals

1,379,758

2,001,785

5,399,658

645,365

79,192

Hire purchase & lease creditors

636,768

877,111

895,373

502,890

368,833

Bank overdraft

1,324,770

1,080,920

378,316

433,030

-

Bill & acceptances payable

1,331,000

1,085,000

600,000

1,246,000

-

Amounts owing to holding company

4,401,975

3,486,883

-

-

-

Amounts owing to related companies

263,457

239,985

8,639,016

11,765,475

10,966,772

Provision for taxation

65,810

130,044

-

-

-

Other liabilities

645,476

484,953

5,036,106

-

500,000

 

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

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

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

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

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

TOTAL CURRENT LIABILITIES

14,821,379

21,796,783

20,948,469

16,031,689

18,278,859

 

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

3,133,083

1,640,568

729,948

476,607

<132,362>

 

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

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

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

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

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

TOTAL NET ASSETS

6,818,993

5,980,466

5,896,943

4,263,849

3,066,948

 

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

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

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

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

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

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

100,000

100,000

100,000

100,000

100,000

 

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

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

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

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

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

TOTAL SHARE CAPITAL

100,000

100,000

100,000

100,000

100,000

 

 

 

 

 

 

RESERVES

 

 

 

 

 

Retained profit/(loss) carried forward

6,168,558

4,981,571

4,023,335

3,055,743

2,050,628

 

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

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

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

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

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

TOTAL RESERVES

6,168,558

4,981,571

4,023,335

3,055,743

2,050,628

 

 

 

 

 

 

 

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

6,268,558

5,081,571

4,123,335

3,155,743

2,150,628

 

 

 

 

 

 

LONG TERM LIABILITIES

 

 

 

 

 

Lease obligations

340,435

596,895

1,474,008

930,806

701,320

Deferred taxation

210,000

302,000

299,600

177,300

215,000

 

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

550,435

898,895

1,773,608

1,108,106

916,320

 

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

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

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

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

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

 

6,818,993

5,980,466

5,896,943

4,263,849

3,066,948

 

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

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

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

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

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

 

FINANCIAL RATIO

 

 

 

TYPES OF FUNDS

 

 

 

 

 

Cash

1,017,521

1,044,986

1,682,645

730,023

242,120

Net Liquid Funds

<1,638,249>

<1,120,934>

704,329

<949,007>

242,120

Net Liquid Assets

<12,870,883>

<18,910,960>

<16,777,440>

<12,132,145>

<14,554,439>

Net Current Assets/(Liabilities)

3,133,083

1,640,568

729,948

476,607

<132,362>

Net Tangible Assets

6,818,993

5,980,466

5,896,943

4,263,849

3,066,948

Net Monetary Assets

<13,421,318>

<19,809,855>

<18,551,048>

<13,240,251>

<15,470,759>

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

3,632,973

3,639,926

3,347,697

3,112,726

1,070,153

Total Liabilities

15,371,814

22,695,678

22,722,077

17,139,795

19,195,179

Total Assets

21,640,372

27,777,249

26,845,412

20,295,538

21,345,807

Net Assets

6,818,993

5,980,466

5,896,943

4,263,849

3,066,948

Net Assets Backing

6,268,558

5,081,571

4,123,335

3,155,743

2,150,628

Shareholders' Funds

6,268,558

5,081,571

4,123,335

3,155,743

2,150,628

Total Share Capital

100,000

100,000

100,000

100,000

100,000

Total Reserves

6,168,558

4,981,571

4,023,335

3,055,743

2,050,628

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

0.07

0.05

0.08

0.05

0.01

Liquid Ratio

0.13

0.13

0.20

0.24

0.20

Current Ratio

1.21

1.08

1.03

1.03

0.99

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

216

315

272

132

184

Debtors Ratio

10

25

29

25

34

Creditors Ratio

77

234

0

15

81

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

0.58

0.72

0.81

0.99

0.50

Liabilities Ratio

2.45

4.47

5.51

5.43

8.93

Times Interest Earned Ratio

5.48

5.94

4.63

4.02

3.72

Assets Backing Ratio

68.19

59.80

58.97

42.64

30.67

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

4.57

5.83

4.38

3.43

5.85

Net Profit Margin

4.39

4.02

4.11

2.89

4.35

Return On Net Assets

22.15

27.93

22.27

37.29

74.52

Return On Capital Employed

17.20

21.04

18.32

30.58

66.52

Return On Shareholders' Funds/Equity

18.94

18.86

23.47

31.85

57.77

Dividend Pay Out Ratio (Times)

0.00

0.00

0.00

0.00

0.00

NOTES TO ACCOUNTS

 

 

 

 

 

Contingent Liabilities

0

0

0

0

0





 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.61.21

UK Pound

1

Rs.100.65

Euro

1

Rs.84.15

 

 

INFORMATION DETAILS

 

Report Prepared by :

NNA

 

 

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.