MIRA INFORM REPORT

 

 

Report Date :

26.02.2013

 

IDENTIFICATION DETAILS

 

Name :

ACERINOX SC MALAYSIA SDN. BHD.

 

 

Formerly Known as:

YICK HOE METAL INDUSTRIES 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 :

11.06.1990

 

 

Com. Reg. No.:

199110-U

 

 

Legal Form :

Private Limited (Limited By Share)

 

 

Line of Business :

Processing and trading of metal and stainless steel products

 

 

No. of Employees :

160

 

 

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

 

 

 

 

* Adopted abbreviations :

SC - Subject Company (the company enquired by you)

 

 

N/A - Not Applicable

 

 

 

EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

199110-U

COMPANY NAME

:

ACERINOX SC MALAYSIA SDN. BHD.

FORMER NAME

:

YICK HOE METAL INDUSTRIES SDN BHD (02/07/2012)
AIK HOE METAL ENTERPRISE SDN BHD (26/07/1997)
THERMAL FLUID ENGINEERING SDN BHD (22/07/1996)
A.H. HARDWARE SDN BHD (13/03/1992)

INCORPORATION DATE

:

11/06/1990

 

 

 

 

 

 

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

TEL.NO.

:

07-8625252

FAX.NO.

:

07-8636252

CONTACT PERSON

:

RAMOS FLORES BENJAMIN ( DIRECTOR )

 

 

 

INDUSTRY CODE

:

24101

PRINCIPAL ACTIVITY

:

PROCESSING AND TRADING OF METAL AND STAINLESS STEEL PRODUCTS

AUTHORISED CAPITAL

:

MYR 10,000,000.00 DIVIDED INTO 
ORDINARY SHARE 10,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 10,000,000.00 DIVIDED INTO 
ORDINARY SHARES 10,000,000 CASH OF MYR 1.00 EACH.

 

 

 

SALES

:

MYR 175,446,050 [2011]

NET WORTH

:

MYR <56,135,708> [2011]

M1000 OVERALL RANKING

:

535[2009]

M1000 INDUSTRY RANKING

:

11[2009]

 

 

 

STAFF STRENGTH

:

160 [2013]

BANKER (S)

:

BANK ISLAM MALAYSIA BHD
CIMB BANK BHD
HONG LEONG BANK BHD
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) processing and trading of metal and stainless steel products.

 

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

According to the Malaysia 1000 publication, the SC's ranking are as follows:

 

 

 

 

YEAR

2009

2008

 

OVERALL RANKING

535

638

 

INDUSTRY RANKING

11

13

 

 

The immediate 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.

CALLE SANTIAGO DE COMPOSTELA, 100, 28035 MADRID, SPAIN.

ES011000

10,000,000.00

100.00

 

 

 

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

------

 

 

 

10,000,000.00

100.00

 

 

 

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

=====

 

+ Also Director

 

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

BENJAMIN RAMOS FLORES

Address

:

19-B, JALAN STULANG DARAT, 80300 JOHOR BAHRU, JOHOR, MALAYSIA.

IC / PP No

:

XDA690962

 

 

 

 

 

 

 

 

 

 

 

 

Date of Appointment

:

20/05/2009

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 2

 

Name Of Subject

:

LUCIEN MAURICE MATTHEWS

Address

:

170, JALAN MOLEK 2/17, TAMAN MOLEK, 81100 JOHOR BAHRU, JOHOR, MALAYSIA.

IC / PP No

:

478176551

 

 

 

Date of Birth

:

08/07/1959

 

 

 

 

 

 

Date of Appointment

:

14/02/2012

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 3

 

Name Of Subject

:

VALENCIA DIAZ JOSE CARLOS

Address

:

CALLE BRISTOL 18, 280828 MADRID, SPAIN.

IC / PP No

:

AAB747701

 

 

 

 

 

 

 

 

 

Nationality

:

SPANIARD

Date of Appointment

:

17/06/2011

 

 

 



MANAGEMENT

 

 

 

1)

Name of Subject

:

RAMOS FLORES BENJAMIN

 

Position

:

DIRECTOR

 

                                  

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

2)

Company Secretary

:

MS. PHUA YEN NEE

 

 

 

 

 

New IC No

:

780804-06-5126

 

Address

:

3, JALAN BUKIT IMPIAN 10, TAMAN IMPIAN EMAS, 81300 JOHOR BHARU, JOHOR, MALAYSIA.

 

 

 

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

BANK ISLAM MALAYSIA BHD

 

 

 

 

 

2)

Name

:

CIMB BANK BHD

 

 

 

 

 

3)

Name

:

HONG LEONG BANK BHD

 

 

 

 

 

4)

Name

:

MALAYAN BANKING BHD

 

 

 

 

 

The SC enjoys normal banking routine with above mentioned banker(s). The SC has bank charges with above mentioned banker(s).

 

 

ENCUMBRANCE (S)


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

 

LEGAL CHECK AGAINST SC


* A check has been conducted in our databank againt the SC whether the subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia.

No legal action was found in our databank. 

No winding up petition was found in our databank. 


DEFAULTER CHECK AGAINST SC


* We have checked through the SC in our defaulters' database which comprised of debtors that have been blacklisted by our customers and debtors that have been placed or assigned to us for collection since 1990. Information was provided by third party where the debt amount can be disputed. Please check with creditors for confirmation as alleged debts may have been paid since recorded or are being disputed. 

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


PAYMENT RECORD

 

 

SOURCES OF RAW MATERIALS:

Local

:

YES

Overseas

:

YES

Import Countries

:

JAPAN,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

[

 

]

 

Fair 91-120 Days

[

X

]

 

Poor >120 Days

[

 

]

 

 

 

 

 

 



CLIENTELE



Local

:

YES

Domestic Markets

:

MALAYSIA

Overseas

:

YES

 

 

 

Export Market

:

ASIA

Credit Term

:

30 DAYS

 

 

 

 

 

 

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)

Type of Customer

:

DEALERS

 

 

 

 

 

 

 

 

 

 

 

 



OPERATIONS



Products manufactured

:

METAL AND STEEL PRODUCTS

 

 

 

Member(s) / Affiliate(s)

:

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

 

 

 

Ownership of premises

:

OWNED

 

 

Total Number of Employees:

 

YEAR

2013

2011

2010

2009

2008

 

 

 

 

 

GROUP

N/A

N/A

N/A

N/A

N/A

 

 

 

 

COMPANY

160

160

150

150

200

 

 

 

 

 

Branch

:

NO

 

Other Information:


The SC is principally engaged in the (as a / as an) processing and trading of metal and stainless steel products. 

The SC's products range includes stainless steelplates, stainless steel chequered plates, stainless steel flat bars, stainless steel round bar, stainless steel shaft, stainless steels quare bars, stainless steel angle iron, stainless steel I-beams, stainless steel U-Channels etc.

Besides that the SC also operates a service center with coil shearing services provided to shear stainless steel coils with the thickness ranging from 0.3mm - 9.0mm thickness, 4 feet - 2m width and a maximum length of 40 feet, and slitting services for stainless steel coils with the thickness ranging from 0.3mm - 3.0mm with a maximum width of 5FT.

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

Besides that the SC has a warehouse located at the same premises to keep stock 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

:

N/A

Current Telephone Number

:

07-8625252

Match

:

N/A

 

 

 

Address Provided by Client

:

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

Current Address

:

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

Match

:

YES

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations


we contacted Ms Kimberly from the Human Resouce Department. She provided some information on the SC.




FINANCIAL ANALYSIS

 

Profitability

 

 

 

 

 

 

Turnover

:

Decreased

[

2007 - 2011

]

 

Profit/(Loss) Before Tax

:

Increased

[

2007 - 2011

]

 

Return on Shareholder Funds

:

Unfavourable

[

48.99%

]

 

Return on Net Assets

:

Unfavourable

[

36.88%

]

 

 

 

 

 

 

 

 

The continuous fall in turnover could be due to the lower demand for the SC's products / services.Higher losses before tax during the year could be due to the higher operating costs incurred. 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

:

Unfavourable

[

134 Days

]

 

Debtor Ratio

:

Unfavourable

[

158 Days

]

 

Creditors Ratio

:

Favourable

[

2 Days

]

 

 

 

 

 

 

 

 

The SC could be incurring higher holding cost. As its capital was tied up in stocks, it could face liquidity problems. The SC's debtors ratio was high. The SC should tighten its credit control and improve its collection period. 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

[

0.35 Times

]

 

Current Ratio

:

Unfavourable

[

0.60 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

[

<3.05 Times>

]

 

Gearing Ratio

:

Favourable

[

0.00 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 had no gearing and hence it had virtually no financial risk. The SC was financed by its shareholders' funds and internally generated fund. During the economic downturn, the SC, having a zero gearing, will be able to compete better than those which are highly geared in the same industry.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Assessment :

 

 

 

 

 

 

The SC's losses could be attributed to the lower turnover which in turn could be the result of unfavourable market conditions. 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 was a zero gearing company, it was solely dependant on its shareholders to provide funds to finance its business. The SC has good chance of getting loans, if the needs arises.

 

 

 

 

 

 

 

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 1990, the SC is a Private Limited company, focusing on processing and trading of metal and stainless steel products. With over 2 decades of experience in the business, the SC has fairly rich experiences in the business and has achieved a certain market share. Having strong support from its holding company has enabled the SC to remain competitive despite the challenging business environment. The SC is a large entity with strong capital position. 


Over the years, the SC has penetrated into both the local and overseas market. The SC has positioned itself in the global market and is competing in the industry. However, being a loss making company indicates that the SC faces difficulties in the market. The SC is a fairly large and rapidly growing company with over 160 staff in its operations. An unfavourable return on shareholders' funds implies that the SC's management capability is weak.


Due to the challenging market conditions, the SC's business performance seems to be deteriorating and losses incurred. The SC has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. 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 56,135,708. 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. 


We regard that the SC's overall payment habit is fair. With poor financial condition, the SC may unable to pay its creditors on the given period of time.


The industry shows an upward trend and this trend is very likely to sustain in the near terms. However, the SC does not take any advantage from this favourable condition as it is making losses in this few years. The SC should adopt more competitive strategies to retain its business position in the market.


Although having support from its holding company with large capital, the management not able to turn the SC into profit making company reflecting its poor management. In view of this, we are strictly against granting any credit to the SC.



PROFIT AND LOSS ACCOUNT

 

 

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

ACERINOX SC 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

175,446,050

268,741,611

277,653,717

451,271,543

565,319,659

 

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

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

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

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

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

Total Turnover

175,446,050

268,741,611

277,653,717

451,271,543

565,319,659

Costs of Goods Sold

<187,527,326>

<267,399,560>

-

-

-

 

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

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

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

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

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

Gross Profit

<12,081,276>

1,342,051

-

-

-

 

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

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

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

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

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

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

<27,502,444>

<20,121,931>

<28,166,523>

<68,698,842>

41,935,169

 

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

<27,502,444>

<20,121,931>

<28,166,523>

<68,698,842>

41,935,169

Taxation

-

-

-

2,236,162

<3,883,124>

 

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

<27,502,444>

<20,121,931>

<28,166,523>

<66,462,680>

38,052,045

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

<38,633,264>

<18,511,333>

9,655,190

76,117,870

43,065,825

 

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

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

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

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

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

As restated

<38,633,264>

<18,511,333>

9,655,190

76,117,870

43,065,825

 

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

<66,135,708>

<38,633,264>

<18,511,333>

9,655,190

81,117,870

DIVIDENDS - Ordinary (paid & proposed)

-

-

-

-

<5,000,000>

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

<66,135,708>

<38,633,264>

<18,511,333>

9,655,190

76,117,870

 

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

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

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

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

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

 

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Bank overdraft

-

-

2,509

94,895

48,424

Hire purchase

-

-

24,830

82,594

110,676

Revolving loans

-

-

57,347

241,584

230,656

Term loan / Borrowing

-

-

799,996

1,428,020

1,026,564

Trust receipts

-

-

-

-

17,636

Others

6,796,992

7,885,747

8,692,248

8,993,727

6,570,141

 

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

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

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

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

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

 

6,796,992

7,885,747

9,576,930

10,840,820

8,004,097

 

 

 

BALANCE SHEET

 

 

ACERINOX SC MALAYSIA SDN. BHD.

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

48,648,037

56,355,038

59,080,328

59,282,363

46,431,622

 

 

 

 

 

 

LONG TERM INVESTMENTS/OTHER ASSETS

 

 

 

 

 

Deposits

21,350

24,150

23,750

-

-

 

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

21,350

24,150

23,750

-

-

 

 

 

 

 

 

 

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

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

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

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

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

TOTAL LONG TERM ASSETS

48,669,387

56,379,188

59,104,078

59,282,363

46,431,622

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Stocks

64,601,153

58,681,597

68,460,594

146,869,120

195,797,166

Trade debtors

75,765,443

82,286,271

98,224,428

91,929,510

98,823,521

Other debtors, deposits & prepayments

537,814

504,024

360,193

3,481,726

5,100,885

Short term deposits

5,000,000

-

-

5,745,513

970,000

Amount due from holding company

13,447

13,095

-

-

-

Amount due from related companies

978,690

11,998,752

944,024

-

-

Cash & bank balances

3,848,453

9,541,832

8,539,154

2,803,887

2,987,684

Others

4,448,741

10,954,413

10,954,413

10,954,413

4,961,096

 

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

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

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

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

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

TOTAL CURRENT ASSETS

155,193,741

173,979,984

187,482,806

261,784,169

308,640,352

 

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

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

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

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

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

TOTAL ASSET

203,863,128

230,359,172

246,586,884

321,066,532

355,071,974

 

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

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

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

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

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

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade creditors

805,797

3,027,847

115,948,589

54,460,324

63,566,548

Other creditors & accruals

1,373,676

796,960

3,529,628

7,632,325

20,864,436

Hire purchase & lease creditors

-

-

-

593,842

702,458

Bank overdraft

-

-

-

1,923,990

95,767

Short term borrowings/Term loans

-

-

-

11,158,809

3,857,685

Other borrowings

-

-

-

4,500,000

4,500,000

Bill & acceptances payable

39,500,000

29,500,000

-

211,432,154

162,461,588

Amounts owing to holding company

1,363,537

-

-

-

-

Amounts owing to related companies

216,955,826

225,667,629

135,620,000

-

-

 

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

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

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

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

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

TOTAL CURRENT LIABILITIES

259,998,836

258,992,436

255,098,217

291,701,444

256,048,482

 

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

<104,805,095>

<85,012,452>

<67,615,411>

<29,917,275>

52,591,870

 

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

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

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

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

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

TOTAL NET ASSETS

<56,135,708>

<28,633,264>

<8,511,333>

29,365,088

99,023,492

 

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

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

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

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

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

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

10,000,000

10,000,000

10,000,000

10,000,000

10,000,000

 

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

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

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

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

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

TOTAL SHARE CAPITAL

10,000,000

10,000,000

10,000,000

10,000,000

10,000,000

 

 

 

 

 

 

RESERVES

 

 

 

 

 

Retained profit/(loss) carried forward

<66,135,708>

<38,633,264>

<18,511,333>

9,655,190

76,117,870

 

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

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

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

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

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

TOTAL RESERVES

<66,135,708>

<38,633,264>

<18,511,333>

9,655,190

76,117,870

 

 

 

 

 

 

 

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

<56,135,708>

<28,633,264>

<8,511,333>

19,655,190

86,117,870

 

 

 

 

 

 

LONG TERM LIABILITIES

 

 

 

 

 

Long term loans

-

-

-

9,042,810

10,004,837

Hire purchase creditors

-

-

-

667,088

641,897

Deferred taxation

-

-

-

-

2,258,888

 

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

-

-

-

9,709,898

12,905,622

 

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

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

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

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

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

 

<56,135,708>

<28,633,264>

<8,511,333>

29,365,088

99,023,492

 

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

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

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

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

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

 

 

 

 

 

 

 

FINANCIAL RATIO

 

 

ACERINOX SC MALAYSIA SDN. BHD.

 

TYPES OF FUNDS

 

 

 

 

 

Cash

8,848,453

9,541,832

8,539,154

8,549,400

3,957,684

Net Liquid Funds

8,848,453

9,541,832

8,539,154

6,625,410

3,861,917

Net Liquid Assets

<169,406,248>

<143,694,049>

<136,076,005>

<176,786,395>

<143,205,296>

Net Current Assets/(Liabilities)

<104,805,095>

<85,012,452>

<67,615,411>

<29,917,275>

52,591,870

Net Tangible Assets

<56,135,708>

<28,633,264>

<8,511,333>

29,365,088

99,023,492

Net Monetary Assets

<169,406,248>

<143,694,049>

<136,076,005>

<186,496,293>

<156,110,918>

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

0

0

57,347

28,128,123

20,033,300

Total Liabilities

259,998,836

258,992,436

255,098,217

301,411,342

268,954,104

Total Assets

203,863,128

230,359,172

246,586,884

321,066,532

355,071,974

Net Assets

<56,135,708>

<28,633,264>

<8,511,333>

29,365,088

99,023,492

Net Assets Backing

<56,135,708>

<28,633,264>

<8,511,333>

19,655,190

86,117,870

Shareholders' Funds

<56,135,708>

<28,633,264>

<8,511,333>

19,655,190

86,117,870

Total Share Capital

10,000,000

10,000,000

10,000,000

10,000,000

10,000,000

Total Reserves

<66,135,708>

<38,633,264>

<18,511,333>

9,655,190

76,117,870

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

0.03

0.04

0.03

0.03

0.02

Liquid Ratio

0.35

0.45

0.47

0.39

0.44

Current Ratio

0.60

0.67

0.73

0.90

1.21

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

134

80

90

119

126

Debtors Ratio

158

112

129

74

64

Creditors Ratio

2

4

152

44

41

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

0.00

0.00

<0.01>

1.43

0.23

Liabilities Ratio

<4.63>

<9.05>

<29.97>

15.33

3.12

Times Interest Earned Ratio

<3.05>

<1.55>

<1.94>

<5.34>

6.24

Assets Backing Ratio

<5.61>

<2.86>

<0.85>

2.94

9.90

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

<15.68>

<7.49>

<10.14>

<15.22>

7.42

Net Profit Margin

<15.68>

<7.49>

<10.14>

<14.73>

6.73

Return On Net Assets

36.88

42.73

218.41

<197.03>

50.43

Return On Capital Employed

36.88

42.73

219.89

<180.11>

49.91

Return On Shareholders' Funds/Equity

48.99

70.27

330.93

<338.14>

44.19

Dividend Pay Out Ratio (Times)

0.00

0.00

0.00

0.00

0.13

NOTES TO ACCOUNTS

 

 

 

 

 

Contingent Liabilities

0

0

0

0

0

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.54.04

UK Pound

1

Rs.81.80

Euro

1

Rs.71.41

 

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.