MIRA INFORM REPORT

 

 

Report Date :

05.02.2013

 

IDENTIFICATION DETAILS

 

Name :

ACERINOX MALAYSIA SDN. BHD.

 

 

Registered Office :

Suite 3.6, Menara Pelangi, 2, Jalan Kuning, Taman Pelangi, Level 3, 80400 Johor Bahru, Johor

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2011

 

 

Date of Incorporation :

03.09.2004

 

 

Com. Reg. No.:

664822-X

 

 

Legal Form :

Private Limited (Limited By Share)

 

 

Line of Business :

Manufacturing of Stainless Steel Products

 

 

No. of Employees :

130

 

RATING & COMMENTS

 

MIRA’s Rating :

Ca

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

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

 

EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

664822-X

COMPANY NAME

:

ACERINOX MALAYSIA SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

03/09/2004

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED (LIMITED BY SHARE)

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

SUITE 3.6, MENARA PELANGI, 2, JALAN KUNING, TAMAN PELANGI, LEVEL 3, 80400 JOHOR BAHRU, JOHOR, MALAYSIA.

BUSINESS ADDRESS

:

PTD 175189, 11 1/2 MILES, JALAN JOHOR BAHRU - KOTA TINGGI, 81800 ULU TIRAM, JOHOR, MALAYSIA.

TEL.NO.

:

07-8625252

FAX.NO.

:

07-8625203

WEB SITE

:

WWW.ACERINOX.COM

CONTACT PERSON

:

RAMOS FLORES BENJAMIN ( MANAGING DIRECTOR )

INDUSTRY CODE

:

24101

PRINCIPAL ACTIVITY

:

MANUFACTURING OF STAINLESS STEEL PRODUCTS

AUTHORISED CAPITAL

:

MYR 50,000,000.00 DIVIDED INTO
ORDINARY SHARE 50,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 24,000,000.00 DIVIDED INTO
ORDINARY SHARES 24,000,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 1,086,494,794 [2011]

NET WORTH

:

MYR <6,254,467> [2011]

STAFF STRENGTH

:

130 [2013]

BANKER (S)

:

DEUTSCHE BANK (MALAYSIA) BHD
MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

POOR

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) manufacturing of stainless steel products.

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

The immediate holding company of the SC is ACERINOX S.A., a company incorporated in SPAIN.

The ultimate holding company of the SC is ACERINOX S A, a company incorporated in SPAIN.

 

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

 

Name

Address

IC/PP/Loc No

Shareholding

(%)

ACERINOX S.A.

CALLESANTIAGO DE COMPOSTELA 100, 28035, SPAIN.

XLZ00002205

23,999,999.00

100.00

INOXIDABLES DE EUSKADI, S.A.

POLIGONO INDUSTRIAL DE JUNDIZ, CALLE LERMANDABIDE 17, 01195, SPAIN.

XLZ00002206

1.00

0.00

 

 

 

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

------

 

 

 

24,000,000.00

100.00

 

 

 

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

=====

 

+ Also Director



DIRECTORS


DIRECTOR 1

 

Name Of Subject

:

MR. MOHD RIZAL BIN OMAR

Address

:

31, JALAN TENANG 12, TAMAN DAMAI JAYA, 81300 JOHOR BHARU, JOHOR, MALAYSIA.

New IC No

:

831129-01-5121

Date of Birth

:

29/11/1983

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

19/07/2006

 

DIRECTOR 2

 

Name Of Subject

:

MR. PETER JOHN A/L FRANCIS

Address

:

32, JALAN BULAT, TAMAN CENTURY, 80250 JOHOR BAHRU, JOHOR, MALAYSIA.

New IC No

:

591109-10-5445

Date of Birth

:

09/11/1959

Nationality

:

MALAYSIAN

Date of Appointment

:

19/07/2006

 

DIRECTOR 3

 

Name Of Subject

:

FERRANDIS TORRES MIGUEL

Address

:

CALLE PABLE VIDAL, 7, 28043 MADRIS (SPAIN)

IC / PP No

:

BE463961

Nationality

:

SPANIARD

Date of Appointment

:

03/09/2004

 

DIRECTOR 4

 

Name Of Subject

:

BENJAMIN RAMOS FLORES

Address

:

132, TANJONG RHU ROAD, FEBBLE BAY 04-10, 436919, SINGAPORE.

IC / PP No

:

XDA690962

Date of Appointment

:

03/09/2004

 

DIRECTOR 5

 

Name Of Subject

:

VALENCIA DIAZ JOSE CARLOS

Address

:

CALLE BRISTOL 18, 280828 MADRID (SPAIN)

IC / PP No

:

AAB747701

Nationality

:

SPANIARD

Date of Appointment

:

03/09/2004



MANAGEMENT

 

 

 

1)

Name of Subject

:

RAMOS FLORES BENJAMIN

 

Position

:

MANAGING DIRECTOR

 

 

 

 

 

2)

Name of Subject

:

IRENE TEO

 

Position

:

HUMAN RESOURCE MANAGER

 

 

 

 

 

3)

Name of Subject

:

MOR

 

Position

:

CORPORATE COMMUNICATIONS MANAGER

 

 

 

AUDITOR

 

Auditor

:

KPMG

Auditor' Address

:

MENARA ANSAR 65, JALAN TRUS, LEVEL 14, 80000 JOHOR BAHRU, JOHOR, MALAYSIA.

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. SUJATA MENON A/P K.R.D.S. CHANDRAN

 

New IC No

:

700202-01-5954

 

Address

:

3, JALAN PUTEH 5, TAMAN PELANGI, 80400 JOHOR BAHRU, JOHOR, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

DEUTSCHE BANK (MALAYSIA) BHD

 

 

 

 

 

2)

Name

:

MALAYAN BANKING BHD

 

 

 

 

 

The SC enjoys normal banking routine with above mentioned banker(s). No adverse record was found during our investigation.

 

 

ENCUMBRANCE (S)


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

 

 

LEGAL CHECK AGAINST 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


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

[

 

]

 

Poor >120 Days

[

X

]

 

 

 

 

 

 

 

 

CLIENTELE

 

Local

:

YES

Percentage

:

60%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

40%

Export Market

:

EUROPE

ASIA

Credit Term

:

30 - 60 DAYS

Payment Mode

:

TELEGRAPHIC TRANSFER (TT)
TELEGRAPHIC TRANSFER (TT)CHEQUES

Type of Customer

:

INDUSTRIAL SECTOR

 

 

OPERATIONS

 

Products manufactured

:

STAINLESS STEEL PRODUCTS

Ownership of premises

:

LEASED/RENTED

 

Factory / Premises

:

LOT PTD 3532,JALAN TEGAR,PERINDUSTRIAN TANJUNG LANGSAT, 81700 PASIR GUDANG, JOHOR, MALAYSIA.
Tel No: 07-78631767
Fax No: 07-78617377

 

 

 

 

 

Total Number of Employees:

 

YEAR

2013

2012

2011

2010

2009

 

GROUP

N/A

N/A

N/A

N/A

N/A

 

 

 

 

COMPANY

130

130

137

100

100

 

 

 

 

 

Branch

:

NO

 

 

Other Information:


The SC is principally engaged in the (as a / as an) manufacturing of stainless steel products.

We were informed that the SC's Head Office is based in Spain and it has related companies located in USA, South Africa and Europe.

In addition, the SC's management office is based in Singapore.

The SC involved in smelting and refining ferrous and non-ferrous metals from ore or scrap, using electrometallurgical and other process metallurgical techniques.

The SC's products ranges are including:

* billets

* hot rolled coils

* flat bars

* cold rolled coils

* cold rolled sheets

Besides that the SC has a warehouse lcoated at the same premises to keep stocks and materials.

 

 

PROJECTS


No projects found in our databank

 

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client

:

07 6625230

Current Telephone Number

:

07-8625252

Match

:

NO

Address Provided by Client

:

SUITE 5-3A, LEVEL 5, MENARA PELANGI NO. 2, JALAN KUNING TAMAN PELANGI

Current Address

:

PTD 175189, 11 1/2 MILES, JALAN JOHOR BAHRU - KOTA TINGGI, 81800 ULU TIRAM, JOHOR, MALAYSIA.

Match

:

NO

Latest Financial Accounts

:

YES

 

Other Investigations


On 30th January 2013 we contacted one of the staff from the SC and she provided some information on the SC.

The address provided belongs to the SC's former registered office.


FINANCIAL ANALYSIS

 

 

Profitability

 

 

 

 

 

 

Turnover

:

Increased

[

2007 - 2011

]

 

Profit/(Loss) Before Tax

:

Decreased

[

2007 - 2011

]

 

Return on Shareholder Funds

:

Unfavourable

[

360.83%

]

 

Return on Net Assets

:

Unfavourable

[

322.53%

]

 

The SC's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The SC incurred losses during the year due to the inefficient control of its operating costs. Although the SC's returns showed positive figures it is not reflective of the true situation. The SC incurred losses during the year and its shareholders' funds have turned red. The positive returns on shareholders' funds is the result of losses divided by negative shareholders' funds. The SC's management was inefficient in utilising the assets to generate returns.

Working Capital Control

 

 

 

 

 

 

Stock Ratio

:

Favourable

[

50 Days

]

 

Debtor Ratio

:

Unfavourable

[

72 Days

]

 

Creditors Ratio

:

Favourable

[

0 Days

]

 

The SC's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The high debtors' ratio could indicate that the SC was weak in its credit control. However, the SC could also giving longer credit periods to its customers in order to boost its sales or to capture / retain its market share. The SC had a favourable creditors' ratio as evidenced by its favourable collection days. The SC could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

Liquidity

 

 

 

 

 

 

Liquid Ratio

:

Unfavourable

[

0.74 Times

]

 

Current Ratio

:

Unfavourable

[

0.99 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

:

Unfavourable

[

<8.42 Times>

]

 

Gearing Ratio

:

Unfavourable

[

<0.19 Times>

]

 

The SC incurred losses in the year. It did not generate sufficient income to service its interest. If the situation does not improve, the SC may be vulnerable to default in servicing the interest. The SC's gearing was negative during the year as its shareholders' funds was in the red. This means the SC is running its business using borrowed money. We consider the SC as facing high financial risks.

Overall Assessment :

 

 

 

 

 

 

Although the SC's turnover increased its profits however showed a reverse trend. The losses could be due to the management's failure to maintain its competitiveness in the market. 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's interest cover was negative, indicating that it did not generate sufficient income to service its interest. If its result does not show impressive improvements or succeed obtaining short term financing or capital injection, it may not be able to service its interest and repay the loans. 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 : POOR

 

 

 

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

24101 : Production of pig iron and spiegeleisen in pigs, blocks or other primary forms

INDUSTRY :

MANUFACTURING


The manufacturing sector is expected to be driven by higher value-added activities in Malaysia.The GDP growth for first quarter 2012 indicating manufacturing maintain its growth of 4.5%, similar to year 2011.Malaysia recorded a 12% jump in approved investments in the manufacturing sector in the first quarter of 2012 compared with the corresponding period 2011. According to Federation of Malaysian Manufacturers (FMM), manufacturing sector expected to improve in the third quarter 2012 despite concerns over external developments and the rising cost of production.


The rubber products sub-sector is expected to remain resilient supported by continuous improvements in medical and healthcare standards in emerging markets as well as demand from niche markets such as the oil and gas sector for rubber hoses. Malaysia rubber exports are forecast to grow at 10%, at the end of 2012 driven by global demand for medical gloves as well as rubber tyres and tubes.Rubber glove exports make up 70 % of total rubber shipments in Malaysia due to hospitals and clinics place more intrest on rising health and hygiene awareness.


The 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.


Chemical production are expected to show 6.2% in year 2012 and 7.5 % in year 2013 inline with Malaysia as one of the largest contributor in world Chemicals & Chemical industries.


According to Malaysian Iron and Steel Industry Federation, first half of 2012 would remain weak for the local steel industry due to eurozone crisis, slowdown in China's economy and less robust construction activities in the developed countries. At first quarter 2012, the average local steel price is trading atRM2,300 per tonne compared with the average international price of US$740 (RM2,331) per tonne.


According to the Department of Statistics, Malaysia during the first quarter 2012, the manufacturing output increased due to activities in major sub-sectors such as petroleum, chemical, rubber and plastic products (10.5 %), and non-metallic mineral products, basic metal and fabricated metal products (3.9 %). Meanwhile, it's also announced that the manufacturing sector's sales grew by 10 % in May 2012 to record RM52.5 billion compared with RM47.7 billion in May 2011. The Industrial Production Index (IPI ) increased 7.6 % in May (2012) due to increases in manufacturing (6.5 %).


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 as solar 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 2004, the SC is a Private Limited company, focusing on manufacturing of stainless steel products. Throughout its years of establishment, the SC has slowly been building up contacts with its clients and competing in the industry. Having strong support from its holding company has enabled the SC to remain competitive despite the challenging business environment. Presently, the issued and paid up capital of the SC stands at RM24,000,000.


Over the years, the SC has established an extensive clientele base in the market. Besides catering to the local market, the SC has penetrated into other countries. With the contribution of both local and overseas customers, the SC is likely to be exposed to lower commercial risk. The SC is a fairly large company with over 130 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.


Despite the higher turnover, the SC suffered pre-tax losses which reflected a highly competitive business environment. The SC has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. 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. The SC has generated an unfavourable gearing ratio indicated that the SC is in high financial risk. The SC's unfavourable financial performance over the years has wiped out its shareholders' funds to a deficit of MYR -6,254,467. Therefore, the SC as a going concern is much dependent on its ability to generate sufficient cash flow and obtain additional financing to meet its future obligations.


Without a strong assets backing, the SC may face difficulties in getting loans for its future expansion and continued growth . 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 poor payment habit may affect the goodwill between the SC and its suppliers and the SC may inadvertently have to pay more for its future supplies.


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 unfavourable condition, we regard granting credit to the SC to be quite risky. Hence, credit is not recommended.

 

 

PROFIT AND LOSS ACCOUNT

 

 

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

ACERINOX MALAYSIA SDN. BHD.

 

Financial Year End

31/12/2011

31/12/2010

31/12/2009

31/12/2008

31/12/2007

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

1,086,494,794

1,070,456,625

847,982,474

1,026,678,366

1,367,851,253

Other Income

2,529,865

42,571,408

-

-

-

 

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

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

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

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

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

Total Turnover

1,089,024,659

1,113,028,033

847,982,474

1,026,678,366

1,367,851,253

Costs of Goods Sold

<1,070,025,309>

<1,037,514,095>

-

-

-

 

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

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

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

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

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

Gross Profit

18,999,350

75,513,938

-

-

-

 

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

<22,568,023>

33,305,816

<45,492,323>

<16,989,493>

48,240,567

 

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

<22,568,023>

33,305,816

<45,492,323>

<16,989,493>

48,240,567

Taxation

-

<1,640,627>

<81,000>

-

<400,000>

 

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

<22,568,023>

31,665,189

<45,573,323>

<16,989,493>

47,840,567

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

<7,686,444>

<39,351,633>

6,221,690

113,211,183

65,370,616

 

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

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

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

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

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

As restated

<7,686,444>

<39,351,633>

6,221,690

113,211,183

65,370,616

 

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

<30,254,467>

<7,686,444>

<39,351,633>

96,221,690

113,211,183

DIVIDENDS - Ordinary (paid & proposed)

-

-

-

<90,000,000>

-

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

<30,254,467>

<7,686,444>

<39,351,633>

6,221,690

113,211,183

 

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Others

2,395,410

2,704,696

-

-

-

 

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

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

 

 

 

 

2,395,410

2,704,696

 

 

 

 

 

 

BALANCE SHEET

 

 

ACERINOX MALAYSIA SDN. BHD.

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

226,241

228,488

7,581

8,043

8,546

LONG TERM INVESTMENTS/OTHER ASSETS

 

 

 

 

 

Deferred assets

-

-

-

81,000

81,000

 

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

-

-

-

81,000

81,000

 

 

 

 

 

 

 

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

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

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

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

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

TOTAL LONG TERM ASSETS

226,241

228,488

7,581

89,043

89,546

CURRENT ASSETS

 

 

 

 

 

Stocks

147,690,868

131,239,129

114,007,406

67,569,611

171,734,975

Trade debtors

215,025,126

191,438,179

164,578,655

117,911,594

276,447,817

Other debtors, deposits & prepayments

330,101

55,237

361,231

-

-

Amount due from holding company

232,380

728,461

-

143,442

293,678

Amount due from related companies

212,998,917

226,392,511

244,313,342

896,094

759,274

Cash & bank balances

2,327,019

7,940,581

2,424,165

723,141

14,882,045

Others

970,945

-

382,183

214,126

-

 

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

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

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

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

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

TOTAL CURRENT ASSETS

579,575,356

557,794,098

526,066,982

187,458,008

464,117,789

 

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

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

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

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

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

TOTAL ASSET

579,801,597

558,022,586

526,074,563

187,547,051

464,207,335

 

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

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

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

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

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

CURRENT LIABILITIES

 

 

 

 

 

Other creditors & accruals

6,467,434

5,327,655

10,168,449

11,256,725

28,091,586

Hire purchase & lease creditors

1,176,752

544,607

-

-

-

Deposits from customers

3,868,648

3,363,688

-

-

-

Amounts owing to holding company

208,433,579

110,795,538

201,327,865

34,479,298

115,029,935

Amounts owing to related companies

366,109,651

420,990,260

329,929,882

111,589,338

183,774,947

Provision for taxation

-

687,282

-

-

99,684

 

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

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

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

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

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

TOTAL CURRENT LIABILITIES

586,056,064

541,709,030

541,426,196

157,325,361

326,996,152

 

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

<6,480,708>

16,085,068

<15,359,214>

30,132,647

137,121,637

 

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

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

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

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

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

TOTAL NET ASSETS

<6,254,467>

16,313,556

<15,351,633>

30,221,690

137,211,183

 

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

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

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

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

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

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

24,000,000

24,000,000

24,000,000

24,000,000

24,000,000

 

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

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

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

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

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

TOTAL SHARE CAPITAL

24,000,000

24,000,000

24,000,000

24,000,000

24,000,000

RESERVES

 

 

 

 

 

Retained profit/(loss) carried forward

<30,254,467>

<7,686,444>

<39,351,633>

6,221,690

113,211,183

 

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

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

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

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

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

TOTAL RESERVES

<30,254,467>

<7,686,444>

<39,351,633>

6,221,690

113,211,183

 

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

<6,254,467>

16,313,556

<15,351,633>

30,221,690

137,211,183

 

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

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

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

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

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

 

<6,254,467>

16,313,556

<15,351,633>

30,221,690

137,211,183

 

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

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

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

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

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

 

 

 

FINANCIAL RATIO

 

 

ACERINOX MALAYSIA SDN. BHD.

 

TYPES OF FUNDS

 

 

 

 

 

Cash

2,327,019

7,940,581

2,424,165

723,141

14,882,045

Net Liquid Funds

2,327,019

7,940,581

2,424,165

723,141

14,882,045

Net Liquid Assets

<154,171,576>

<115,154,061>

<129,366,620>

<37,436,964>

<34,613,338>

Net Current Assets/(Liabilities)

<6,480,708>

16,085,068

<15,359,214>

30,132,647

137,121,637

Net Tangible Assets

<6,254,467>

16,313,556

<15,351,633>

30,221,690

137,211,183

Net Monetary Assets

<154,171,576>

<115,154,061>

<129,366,620>

<37,436,964>

<34,613,338>

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

1,176,752

544,607

0

0

0

Total Liabilities

586,056,064

541,709,030

541,426,196

157,325,361

326,996,152

Total Assets

579,801,597

558,022,586

526,074,563

187,547,051

464,207,335

Net Assets

<6,254,467>

16,313,556

<15,351,633>

30,221,690

137,211,183

Net Assets Backing

<6,254,467>

16,313,556

<15,351,633>

30,221,690

137,211,183

Shareholders' Funds

<6,254,467>

16,313,556

<15,351,633>

30,221,690

137,211,183

Total Share Capital

24,000,000

24,000,000

24,000,000

24,000,000

24,000,000

Total Reserves

<30,254,467>

<7,686,444>

<39,351,633>

6,221,690

113,211,183

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

0.00

0.01

0.00

0.00

0.05

Liquid Ratio

0.74

0.79

0.76

0.76

0.89

Current Ratio

0.99

1.03

0.97

1.19

1.42

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

50

45

49

24

46

Debtors Ratio

72

65

71

42

74

Creditors Ratio

0

0

0

0

0

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

<0.19>

0.03

0.00

0.00

0.00

Liabilities Ratio

<93.70>

33.21

<35.27>

5.21

2.38

Times Interest Earned Ratio

<8.42>

13.31

0.00

0.00

0.00

Assets Backing Ratio

<0.26>

0.68

<0.64>

1.26

5.72

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

<2.08>

3.11

<5.36>

<1.65>

3.53

Net Profit Margin

<2.08>

2.96

<5.37>

<1.65>

3.50

Return On Net Assets

322.53

220.74

296.34

<56.22>

35.16

Return On Capital Employed

397.28

213.61

296.34

<56.22>

35.16

Return On Shareholders' Funds/Equity

360.83

194.10

296.86

<56.22>

34.87

Dividend Pay Out Ratio (Times)

0.00

0.00

0.00

<5.30>

0.00

NOTES TO ACCOUNTS

 

 

 

 

 

Contingent Liabilities

0

0

0

0

0

 

 

 

 

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.52.97

UK Pound

1

Rs.83.17

Euro

1

Rs.72.20

 

INFORMATION DETAILS

 

Report Prepared by :

SDA

 

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.