MIRA INFORM REPORT

 

 

Report Date :

11.06.2013

 

IDENTIFICATION DETAILS

 

Name :

MAXCOVER STEEL INDUSTRIES (M) SDN. BHD.

 

 

Registered Office :

No. 28-2, Lorong Batu Nilam 3a, Bandar Bukit Tinggi, 41200 Klang, Selangor

 

 

Country :

Malaysia

 

 

Financials (as on) :

30.09.2011

 

 

Date of Incorporation :

26.05.2001

 

 

Com. Reg. No.:

548735-U

 

 

Legal Form :

Private Limited (Limited By Share)

 

 

Line of Business :

Trading in scrap metal

 

 

No. of Employees :

20 [2013]

 

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 :

Satisfactory 

 

 

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

 

* Adopted abbreviations :

SC - Subject Company (the company enquired by you)

 

 

 

N/A - Not Applicable

 

 

 

 

 

 

EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

548735-U

COMPANY NAME

:

MAXCOVER STEEL INDUSTRIES (M) SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

26/05/2001

 

 

 

 

 

 

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED (LIMITED BY SHARE)

LISTED STATUS

:

NO

 

 

 

 

 

 

REGISTERED ADDRESS

:

NO. 28-2, LORONG BATU NILAM 3A, BANDAR BUKIT TINGGI, 41200 KLANG, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

:

LOT 14853 & 14854, JALAN UDANG GALAH, TELOK GONG, 42000 PELABUHAN KLANG, SELANGOR, MALAYSIA.

TEL.NO.

:

03-31342288

FAX.NO.

:

03-31342529

CONTACT PERSON

:

CHIA HONG WOO ( DIRECTOR )

 

 

 

INDUSTRY CODE

:

46698

PRINCIPAL ACTIVITY

:

TRADING IN SCRAP METAL

AUTHORISED CAPITAL

:

MYR 2,000,000.00 DIVIDED INTO 
ORDINARY SHARE 2,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 2,000,000.00 DIVIDED INTO 
ORDINARY SHARES 500,000 CASH AND 1,500,000 OTHERWISE OF MYR 1.00 EACH.

 

 

 

SALES

:

MYR 53,419,482 [2011]

NET WORTH

:

MYR 1,306,703 [2011]

 

 

 

STAFF STRENGTH

:

20 [2013]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

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) trading in scrap metal.

 

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

 

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

Name

Address

IC/PP/Loc No

Shareholding

(%)

MR. CHIA HONG WOO +

825, JALAN RAMBA, PANDAMARAN, 41400 KLANG, SELANGOR, MALAYSIA.

610128-10-6049

1,000,000.00

50.00

MR. LUM WAH CHAI +

95, JALAN SR 7/1, TAMAN SERDANG RAYA, 43300 BALAKONG, SELANGOR, MALAYSIA.

440520-10-5009

1,000,000.00

50.00

 

 

 

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

------

 

 

 

2,000,000.00

100.00

 

 

 

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

=====

+ Also Director

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. CHIA HONG WOO

Address

:

825, JALAN RAMBA, PANDAMARAN, 41400 KLANG, SELANGOR, MALAYSIA.

 

 

 

New IC No

:

610128-10-6049

Date of Birth

:

28/01/1961

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

02/11/2010

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 2

 

Name Of Subject

:

MR. LUM WAH CHAI

Address

:

95, JALAN SR 7/1, TAMAN SERDANG RAYA, 43300 BALAKONG, SELANGOR, MALAYSIA.

 

 

 

New IC No

:

440520-10-5009

Date of Birth

:

20/05/1944

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

02/11/2010

 

 

 

 

 

 

 

 

 

 

 

 

 

MANAGEMENT

 

 

1)

Name of Subject

:

CHIA HONG WOO

 

Position

:

DIRECTOR

 

 

 

 

 

2)

Name of Subject

:

LUM WAH CHAI

 

Position

:

DIRECTOR

 

 

 

 

 

3)

Name of Subject

:

SALLY

 

Position

:

HEAD OF HUMAN RESOURCE

 

 

 

 

 

4)

Name of Subject

:

NG

 

Position

:

MANAGER

 

 

 

AUDITOR

 

Auditor

:

SKL & CO.

Auditor' Address

:

40A, JALAN SS 21/39, DAMANSARA UTAMA, 47400 PETALING JAYA, SELANGOR, MALAYSIA.

 

 

 

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. LAW HOE YEN

 

 

 

 

 

New IC No

:

740904-08-6737

 

Address

:

NO. 41, JALAN KIARA 10/KS6, BANDAR BOTANIC, 41200 KLANG, SELANGOR, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

BANKING

 

Banking relations are maintained principally with :

1)

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)



ENCUMBRANCE 1

Date of Creation

:

14/09/2011

Description Of Charge

:

MEMORANDUM OF DEPOSIT OF FIXED DEPOSIT RECEIPTS AND LETTER OF SET-OFF

 

Amount Secured

:

RM100,000.00

Description Of Property Affected

:

FIXED DEPOSIT RECEIPT

 

Name & Address Of Chargee

:

MALAYAN BANKING BERHAD

 

 

 

 

 

 

 

Form 40 Dated 15/09/2011

Registered and Numbered 1 In The Register of Charges



ENCUMBRANCE 2

Date of Creation

:

16/12/2011

Description Of Charge

:

MEMORANDUM OF DEPOSIT OF FIXED DEPOSIT RECEIPT AND LETTER OF SET-OFF

 

Amount Secured

:

RM300,000.00

Description Of Property Affected

:

FIXED DEPOSIT RECEIPT

 

Name & Address Of Chargee

:

MALAYAN BANKING BERHAD

 

 

 

 

 

 

 

Form 40 Dated 20/12/2011

Registered and Numbered 2 In The Register of Charges



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

:

NO

Percentage

:

0%

 

 

 

 

 

 




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

:

INDIA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Type of Customer

:

MANUFACTURING INDUSTRIES

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATIONS

 

Goods Traded

:

SCRAP METAL

 

 

 

 

Competitor(s)

:

DELUXE FORUM SDN BHD
GRS INTERNATIONAL SDN BHD
METAL RECOVERY INDUSTRIES SDN BHD
PG WORLDWIDE TRADE SDN BHD
SIN YEAP HOLDINGS (M) SDN BHD

 

 

 

 

 

 

 

 

 

Total Number of Employees:

YEAR

2013

2012

 

GROUP

N/A

N/A

 

 

 

 

 

 

 

COMPANY

20

20

 

 

 

 

 

 

 

 

Branch

:

NO

 

 

Other Information:


The SC is principally engaged in the (as a / as an) trading in scrap metal. 

The SC engage in exporting of all kind of scrap metals.

Follows are the types of scrap metal that the SC have:
* Ferrous Scrap like steel and iron
* Nonferrous Scrap like copper, aluminum, lead, nickel and zinc.
* Obsolete Scrap like old radiators, used photography film and old pipes

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

:

03-31342288

Match

:

N/A

 

 

 

Address Provided by Client

:

LOT 14853 AND 14854 JALAN UDANG GALAH KAMPUNG TELOK GONG 42000

Current Address

:

LOT 14853 & 14854, JALAN UDANG GALAH, TELOK GONG, 42000 PELABUHAN KLANG, SELANGOR, MALAYSIA.

Match

:

NO

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations

we contacted Miss Sally from Human Resource Department. She provided some information of the SC.

The address provided is incomplete.

FINANCIAL ANALYSIS

 

 

Profitability

 

 

 

 

 

 

Turnover

:

Increased

[

2007 - 2011

]

 

Profit/(Loss) Before Tax

:

Decreased

[

2007 - 2011

]

 

Return on Shareholder Funds

:

Unfavourable

[

7.05%

]

 

Return on Net Assets

:

Unfavourable

[

9.44%

]

 

 

 

 

 

 

 

 

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's profit fell sharply because of the high operating costs incurred. The unfavourable return on shareholders' funds could indicate that the SC was inefficient in utilising its assets to generate returns.

 

 

 

 

 

 

 

Working Capital Control

 

 

 

 

 

 

Stock Ratio

:

Favourable

[

7 Days

]

 

Debtor Ratio

:

Favourable

[

30 Days

]

 

Creditors Ratio

:

Favourable

[

60 Days

]

 

 

 

 

 

 

 

 

The SC's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The favourable debtors' days could be due to the good credit control measures implemented by the SC. 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

[

0.73 Times

]

 

Current Ratio

:

Unfavourable

[

0.84 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

:

Favourable

[

27.24 Times

]

 

Gearing Ratio

:

Favourable

[

0.07 Times

]

 

 

 

 

 

 

 

 

The interest cover showed that the SC was able to service the interest. The favourable interest cover could indicate that the SC was making enough profit to pay for the interest accrued. 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. With the favourable interest cover, the SC could be able to service all the accrued interest without facing any difficulties. 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

46698 : Wholesale of metal and non-metal waste and scrap and materials for recycling

 

 

INDUSTRY :

TRADING

 

 

 

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

 

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

 

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

 

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

 

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

 

 

 

OVERALL INDUSTRY OUTLOOK : Average Growth


CREDIT RISK EVALUATION & RECOMMENDATION

 

 

Incorporated in 2001, the SC is a Private Limited company, focusing on trading in scrap metal. Having been in the industry for over a decade, the SC has achieved a certain market share and has built up a satisfactory reputation in the market. It should have received supports from its regular customers. With a weak shareholders' backing, the SC's capital position is weak. Inadequate capital may be a constraint to the SC as it limits its ability to expand its business in future. The capital standing of the SC is fair. With an adequate share capital, the SC has the potential of expanding its business in future. 

Over the years, the SC has penetrated into both the local and overseas market. The SC has positioned itself in the global market and is competing in the industry. Its stable clientele base will enable the SC to further enhance its business in the near term. Being a small company, the SC's business operation is supported by 20 employees. 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. 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 low 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. 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. Given a positive net worth standing at MYR 1,306,703, the SC should be able to maintain its business in the near terms. 

We noted that the SC's supplies are solely sourced from local market. Being highly dependent on a limited number of suppliers could lead to delays, lost of revenue and increased costs if such resources become unavailable or shortage. 

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

The industry shows an upward trend and this trend is very likely to sustain in the near terms. Hence, the SC is expected to benefit from the favourable outlook of the industry. 

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

 

 

 

PROFIT AND LOSS ACCOUNT

 

 

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

MAXCOVER STEEL INDUSTRIES (M) SDN. BHD.

 

Financial Year End

30/09/2011

30/09/2010

30/09/2009

30/09/2008

30/09/2007

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

SUMMARY

SUMMARY

SUMMARY

Currency

MYR

MYR

MYR

MYR

MYR

 

 

 

 

 

 

TURNOVER

53,419,482

21,592,435

16,950,141

29,077,404

53,249,155

Other Income

77,608

116,933

-

-

-

 

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

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

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

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

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

Total Turnover

53,497,090

21,709,368

16,950,141

29,077,404

53,249,155

Costs of Goods Sold

<50,634,738>

<19,074,237>

-

-

-

 

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

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

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

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

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

Gross Profit

2,862,352

2,635,131

-

-

-

 

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

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

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

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

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

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

128,269

235,534

163,787

170,625

212,528

 

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

128,269

235,534

163,787

170,625

212,528

Taxation

<36,185>

<47,860>

<65,520>

<24,578>

<40,027>

 

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

92,084

187,674

98,267

146,047

172,501

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

714,619

526,945

428,678

282,631

110,130

 

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

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

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

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

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

As restated

714,619

526,945

428,678

282,631

110,130

 

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

806,703

714,619

526,945

428,678

282,631

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

806,703

714,619

526,945

428,678

282,631

 

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

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

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

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

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

 

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Hire purchase

4,889

5,461

-

-

-

 

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

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

 

 

 

 

4,889

5,461

 

 

 

 

 

 

BALANCE SHEET

 

 

MAXCOVER STEEL INDUSTRIES (M) SDN. BHD.

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

346,034

446,372

612,788

423,829

389,408

 

 

 

 

 

 

LONG TERM INVESTMENTS/OTHER ASSETS

 

 

 

 

 

Investment properties

2,414,753

2,407,833

-

-

-

 

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

2,414,753

2,407,833

2,407,833

-

-

 

 

 

 

 

 

 

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

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

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

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

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

TOTAL LONG TERM ASSETS

2,760,787

2,854,205

3,020,621

423,829

389,408

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Stocks

961,413

1,107,567

-

-

-

Trade debtors

4,444,837

2,206,915

-

-

-

Other debtors, deposits & prepayments

83,900

86,020

-

-

-

Short term deposits

100,000

-

-

-

-

Amount due from director

4,500

-

-

-

-

Cash & bank balances

1,458,844

402,847

-

-

-

Others

33,646

37,526

-

-

-

 

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

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

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

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

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

TOTAL CURRENT ASSETS

7,087,140

3,840,875

4,166,808

3,922,395

5,917,658

 

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

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

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

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

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

TOTAL ASSET

9,847,927

6,695,080

7,187,429

4,346,224

6,307,066

 

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

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

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

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

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

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade creditors

8,289,005

5,105,632

-

-

-

Other creditors & accruals

102,408

54,357

-

-

-

Hire purchase & lease creditors

28,008

88,848

-

-

-

Amounts owing to director

-

21,000

-

-

-

Provision for taxation

18,574

33,419

-

-

-

 

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

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

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

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

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

TOTAL CURRENT LIABILITIES

8,437,995

5,303,256

6,074,661

3,417,546

5,524,435

 

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

<1,350,855>

<1,462,381>

<1,907,853>

504,849

393,223

 

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

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

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

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

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

TOTAL NET ASSETS

1,409,932

1,391,824

1,112,768

928,678

782,631

 

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

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

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

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

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

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

500,000

500,000

500,000

500,000

500,000

 

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

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

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

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

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

TOTAL SHARE CAPITAL

500,000

500,000

500,000

500,000

500,000

 

 

 

 

 

 

RESERVES

 

 

 

 

 

Retained profit/(loss) carried forward

806,703

714,619

526,945

428,678

282,631

 

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

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

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

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

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

TOTAL RESERVES

806,703

714,619

526,945

428,678

282,631

 

 

 

 

 

 

 

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

1,306,703

1,214,619

1,026,945

928,678

782,631

 

 

 

 

 

 

LONG TERM LIABILITIES

 

 

 

 

 

Hire purchase creditors

62,535

118,303

-

-

-

Deferred taxation

40,694

58,902

-

-

-

 

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

103,229

177,205

85,823

-

-

 

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

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

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

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

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

 

1,409,932

1,391,824

1,112,768

928,678

782,631

 

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

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

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

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

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

 

 

 

 

 

 

 

 

 

FINANCIAL RATIO

 

 

MAXCOVER STEEL INDUSTRIES (M) SDN. BHD.

 

TYPES OF FUNDS

 

 

 

 

 

Cash

1,558,844

402,847

-

-

-

Net Liquid Funds

1,558,844

402,847

-

-

-

Net Liquid Assets

<2,312,268>

<2,569,948>

<1,907,853>

504,849

393,223

Net Current Assets/(Liabilities)

<1,350,855>

<1,462,381>

<1,907,853>

504,849

393,223

Net Tangible Assets

1,409,932

1,391,824

1,112,768

928,678

782,631

Net Monetary Assets

<2,415,497>

<2,747,153>

<1,993,676>

504,849

393,223

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

90,543

207,151

-

-

-

Total Liabilities

8,541,224

5,480,461

6,160,484

3,417,546

5,524,435

Total Assets

9,847,927

6,695,080

7,187,429

4,346,224

6,307,066

Net Assets

1,409,932

1,391,824

1,112,768

928,678

782,631

Net Assets Backing

1,306,703

1,214,619

1,026,945

928,678

782,631

Shareholders' Funds

1,306,703

1,214,619

1,026,945

928,678

782,631

Total Share Capital

500,000

500,000

500,000

500,000

500,000

Total Reserves

806,703

714,619

526,945

428,678

282,631

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

0.18

0.08

-

-

-

Liquid Ratio

0.73

0.52

-

-

-

Current Ratio

0.84

0.72

0.69

1.15

1.07

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

7

19

-

-

-

Debtors Ratio

30

37

-

-

-

Creditors Ratio

60

98

-

-

-

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

0.07

0.17

-

-

-

Liabilities Ratio

6.54

4.51

6.00

3.68

7.06

Times Interest Earned Ratio

27.24

44.13

-

-

-

Assets Backing Ratio

2.82

2.78

2.23

1.86

1.57

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

0.24

1.09

0.97

0.59

0.40

Net Profit Margin

0.17

0.87

0.58

0.50

0.32

Return On Net Assets

9.44

17.32

14.72

18.37

27.16

Return On Capital Employed

9.26

16.28

14.72

18.37

27.16

Return On Shareholders' Funds/Equity

7.05

15.45

9.57

15.73

22.04

Dividend Pay Out Ratio (Times)

0.00

0.00

-

-

-

NOTES TO ACCOUNTS

 

 

 

 

 

Contingent Liabilities

0

0

 

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.57.78

UK Pound

1

Rs.89.71

Euro

1

Rs.76.24

 

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.