MIRA INFORM REPORT

 

 

Report Date :

29.03.2013

 

IDENTIFICATION DETAILS

 

Name :

KIRAN GEMS SDN. BHD.

 

 

Registered Office :

First Floor,, Acctax Corporate Centre, 2, Jalan Bawasah, 10050 Pulau Pinang, Pulau Pinang

 

 

Country :

Malaysia

 

 

Financials (as on) :

30.09.2011

 

 

Date of Incorporation :

14.10.1997

 

 

Com. Reg. No.:

449909-X

 

 

Legal Form :

Private Limited (Limited By Share)

 

 

Line of Business :

Trading of Diamond, Precious Stones

 

 

No. of Employees :

2

 

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 :

Usually Correct

Litigation :

Clear

 

 

NOTES :

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

 

ECGC Country Risk Classification List – June 30th, 2012

 

Country Name

Previous Rating

(31.03.2011)

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.

:

449909-X

COMPANY NAME

:

KIRAN GEMS SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

14/10/1997

 

 

 

 

 

 

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED (LIMITED BY SHARE)

LISTED STATUS

:

NO

 

 

 

 

 

 

REGISTERED ADDRESS

:

FIRST FLOOR,, ACCTAX CORPORATE CENTRE, 2, JALAN BAWASAH, 10050 PULAU PINANG, PULAU PINANG, MALAYSIA.

BUSINESS ADDRESS

:

73, AH QUEE STREET, 10200 PULAU PINANG, PULAU PINANG, MALAYSIA.

TEL.NO.

:

04-2635575

FAX.NO.

:

04-2635575

CONTACT PERSON

:

PATEL RAKESHBHAI SOMABHAI ( MANAGING DIRECTOR )

 

 

 

INDUSTRY CODE

:

47733

PRINCIPAL ACTIVITY

:

TRADING OF DIAMOND, PRECIOUS STONES

AUTHORISED CAPITAL

:

MYR 1,000,000.00 DIVIDED INTO
ORDINARY SHARE 1,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 1,000,000.00 DIVIDED INTO
ORDINARY SHARES 350,003 CASH AND 649,997 OTHERWISE OF MYR 1.00 EACH.

 

 

 

SALES

:

MYR 5,850,194 [2011]

NET WORTH

:

MYR 1,106,972 [2011]

 

 

 

STAFF STRENGTH

:

2 [2013]

BANKER (S)

:

MALAYAN BANKING BHD
CIMB BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

PAYMENT

:

GOOD

MANAGEMENT CAPABILITY

:

AVERAGE

 

 

 

COMMERCIAL RISK

:

MODERATE

CURRENCY EXPOSURE

:

HIGH

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 of diamond, precious stones.

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. ABDUL RAHMAN BIN MOHAMED IBRAHIM +

G-13-2, PADANG TEMBAK FLATS, 11400 PULAU PINANG, PULAU PINANG, MALAYSIA.

741008-07-5735 A2886138

275,000.00

27.50

MR. TAN KOK SEONG +

23, LEBUHARAYA HALIA, 10470 PULAU PINANG, PULAU PINANG, MALAYSIA.

740218-07-5587 A2721958

225,000.00

22.50

MR. PATEL RAKESHBHAI SOMABHAI +

3B-15-7, TANJUNG PARK, JALAN TANJUNG TOKONG, 10470 PULAU PINANG, PULAU PINANG, MALAYSIA.

E2063905

200,000.00

20.00

LATHIYA HIMATBHAI POPATBHAI +

500-3-2, TANJUNG TIARA, JALAN TANJUNG TIARA, 11200 TANJONG TOKONG, PULAU PINANG, MALAYSIA.

E2666089

200,000.00

20.00

MS. NORAINI BINTI ABDUL JALIL +

1, JALAN TAN IU GHEE, 10460 PULAU PINANG, PULAU PINANG, MALAYSIA.

651010-07-5460 A0255508

100,000.00

10.00

 

 

 

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

------

 

 

 

1,000,000.00

100.00

 

 

 

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

=====

+ Also Director

DIRECTORS



DIRECTOR 1

 

Name Of Subject

:

MS. NORAINI BINTI ABDUL JALIL

Address

:

1, JALAN TAN IU GHEE, 10460 PULAU PINANG, PULAU PINANG, MALAYSIA.

IC / PP No

:

A0255508

New IC No

:

651010-07-5460

Date of Birth

:

10/10/1965

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

28/10/2002

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 2

 

Name Of Subject

:

MR. PATEL RAKESHBHAI SOMABHAI

Address

:

3B-15-7, TANJUNG PARK, JALAN TANJUNG TOKONG, 10470 PULAU PINANG, PULAU PINANG, MALAYSIA.

IC / PP No

:

E2063905

 

 

 

 

 

 

 

 

 

Nationality

:

INDIAN

Date of Appointment

:

17/10/1997

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 3

 

Name Of Subject

:

LATHIYA HIMATBHAI POPATBHAI

Address

:

500-3-2, TANJUNG TIARA, JALAN TANJUNG TIARA, 11200 TANJONG TOKONG, PULAU PINANG, MALAYSIA.

IC / PP No

:

E2666089

 

 

 

 

 

 

 

 

 

Nationality

:

INDIAN

Date of Appointment

:

19/04/2004

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 4

 

Name Of Subject

:

MR. TAN KOK SEONG

Address

:

23, LEBUHARAYA HALIA, 10470 PULAU PINANG, PULAU PINANG, MALAYSIA.

IC / PP No

:

A2721958

New IC No

:

740218-07-5587

Date of Birth

:

18/02/1974

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

04/01/2000

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 5

 

Name Of Subject

:

MR. ABDUL RAHMAN BIN MOHAMED IBRAHIM

Address

:

G-13-2, PADANG TEMBAK FLATS, 11400 PULAU PINANG, PULAU PINANG, MALAYSIA.

IC / PP No

:

A2886138

New IC No

:

741008-07-5735

Date of Birth

:

08/10/1974

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

22/09/1998

 

 

 

 

 

 

 

 

 

 

 

 



MANAGEMENT

 

 

 

1)

Name of Subject

:

PATEL RAKESHBHAI SOMABHAI

 

Position

:

MANAGING DIRECTOR

 

 

 

 

 

AUDITOR

 

Auditor

:

RAGENDRAN & COM.

Auditor' Address

:

1ST FLOOR, 34, LORONG ABU SITI, 10400 PULAU PINANG, PULAU PINANG, MALAYSIA.

 

 

 

 

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. WONG MEE CHOON

 

IC / PP No

:

7376295

 

New IC No

:

640707-07-5328

 

Address

:

35 LEBUH RAMBAI 10, PAYA TERUBONG, 11060 PULAU PINANG, PULAU PINANG, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

 

 

 

 

 

2)

Name

:

CIMB BANK 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

:

NO

Percentage

:

0%

Overseas

:

YES

Percentage

:

100%

Import Countries

:

INDIA



The SC refused to provide any name of trade/service supplier and we are unable to conduct any trade enquiry. However, from financial historical data we conclude that :

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

 

]

 

Good 31-60 Days

[

X

]

 

Average 61-90 Days

[

 

]

 

Fair 91-120 Days

[

 

]

 

Poor >120 Days

[

 

]

 

 

 

 

 

 

 

CLIENTELE

 

Local

:

YES

Percentage

:

100%

Domestic Markets

:

MALAYSIA

Overseas

:

NO

 

 

 

 

 

 

 

 

 

Credit Term

:

AS AGREED

 

 

 

 

 

 

Payment Mode

:

CHEQUES
CASH

Type of Customer

:

WHOLESALERS

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATIONS

 

Goods Traded

:

DIAMOND, PRECIOUS STONES

 

 

 

 

Competitor(s)

:

KAH HONG TRADING SDN BHD
LS GOLD BULLION SDN BHD
MALAYSIAN INDUSTRIAL DIAMOND & SYNTHESIZING SDN BHD
PUSAT EMAS & PERMATA AHMAD ISMAIL SDN BHD
WAH CHAN CONSOLIDATED SDN BHD

 

 

 

 

 

 

 

 

 

Total Number of Employees:

 

YEAR

2013

2012

2010

 

GROUP

N/A

N/A

N/A

 

 

 

 

 

 

COMPANY

2

1

2

 

 

 

 

 

 

 

Branch

:

NO

 

Other Information:


The SC is principally engaged in the (as a / as an) trading of diamond, precious stones.

We were informed that the SC offers a wide range of diamonds and precious stones.


PROJECTS


No projects found in our databank

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client

:

0164192055 / 042635575

Current Telephone Number

:

04-2635575

Match

:

YES

 

 

 

Address Provided by Client

:

73, AH QUEE STREET,10200,PULAU PINANG,PULAU PINANG.

Current Address

:

73, AH QUEE STREET, 10200 PULAU PINANG, PULAU PINANG, MALAYSIA.

Match

:

YES

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations


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

FINANCIAL ANALYSIS

 

 

Profitability

 

 

 

 

 

 

Turnover

:

Increased

[

2007 - 2011

]

 

Profit/(Loss) Before Tax

:

Increased

[

2007 - 2011

]

 

Return on Shareholder Funds

:

Unfavourable

[

1.50%

]

 

Return on Net Assets

:

Unfavourable

[

2.21%

]

 

 

 

 

 

 

 

 

The SC's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The higher profit could be attributed to the increase in turnover. 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

[

37 Days

]

 

Debtor Ratio

:

Favourable

[

31 Days

]

 

Creditors Ratio

:

Favourable

[

30 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

:

Favourable

[

2.03 Times

]

 

Current Ratio

:

Favourable

[

3.22 Times

]

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Solvency

 

 

 

 

 

 

Interest Cover

:

Favourable

[

25.69 Times

]

 

Gearing Ratio

:

Favourable

[

0.00 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 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 :

 

 

 

 

 

 

Generally, the SC's performance has improved with higher turnover and profit. The SC was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the SC should be able to repay its short term obligations. With the favourable interest cover, the SC could be able to service all the accrued interest without facing any difficulties. 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 : FAIR

 

 

 

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

47733 : Retail sale of jewellery

 

 

INDUSTRY :

TRADING

 

 

 


The wholesale and retail trade sector grew 7.1% in the first half of the year 2011 supported by strong consumer spending amid favourable labour market conditions and sustained disposable income. This was reflected in the higher distributive trade index which increased 15.9%, with wholesale and retail trade indices increasing 19.2% and 7.8%, respectively.


It is anticipated that the retail industry will grow 6.0 per cent in the year 2012.


Malaysia's retail sector for 2011 is expected to grow 6 per cent or RM81.59 billion worth of retail sales, similar to the year 2010, due to concerns of high oil prices, declining purchasing power and high cost of doing business. The Middle East and North Africa civil wars have caused the world oil prices to climb. This has led to further rise in the cost of running retail businesses, especially in terms of transportation cost. Many retailers have no choice but to pass the increased cost to end consumers. At the same time, natural disasters (tsunamis, floods, droughts, snow storms, tornadoes and earthquakes) that occurred in all parts of the world has also led to a shortage in the supply of food and raw materials. The phenomenon has pushed retail prices up.In addition, the continual removal of government subsidies since 2010 has pushed inflation upwards. Consequently, rising prices of retail goods contributed to an expectation of moderate performance.


During the first seven months of 2011, other consumption indicators such as imports of consumption goods and credit card spending increased 12.8% and 11.8%, respectively. Sales of motor vehicles declined 3% on account of supply chain disruptions following devastating March 2011 earthquake and tsunami in Japan.


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.


Meanwhile, the Government has introduced the Retail Shop Transformation (TUKAR) programme. Under this programme, selected large format retailers will assist small retailers to improve their premises and layout which include attractive product display shelves, enhanced lighting and point-of-sales system to manage product inventory,

 

 

OVERALL INDUSTRY OUTLOOK : Average Growth

 

CREDIT RISK EVALUATION & RECOMMENDATION

 


Incorporated in 1997, the SC is a Private Limited company, focusing on trading of diamond and precious stones. Having been in the industry for over a decade, the SC has achieved a certain market share and has built up a satisfactory reputation in the market. It should have received supports from its regular customers. The capital standing of the SC is fair. With an adequate share capital, the SC has the potential of expanding its business in future.


Over the years, the SC should have build up its clientele base and received supports from its regular customers. Investigation revealed that the SC's interest lies mostly in the local market. Thus, any adverse changes to the local economy might have a negative impact on the SC's business performance. Being a small company, the SC's business operation is supported by 2 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.


We noted that both the turnover and profits have increased compared to the previous year. The higher profit could be due to increase in turnover and better control over its operating costs. The SC has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. However, the SC is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. Being a zero geared company, the SC virtually has no financial risk as it is mainly dependent on its internal funds to finance its business. Given a positive net worth standing at MYR 1,106,972, the SC should be able to maintain its business in the near terms.


Investigation revealed that the SC's supplies are 100% sourced from overseas countries. As an imported oriented company, its forex exposure is high. The SC faces foreign currency fluctuation which may affect its overall operating costs.


Overall, the SC's payment habit is good as the SC has a good credit control and it could be taking advantage of the cash discounts while maintaining a good reputation with its creditors.


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


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


PROFIT AND LOSS ACCOUNT

 

 

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

KIRAN GEMS 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

FULL

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

 

 

 

 

 

 

TURNOVER

5,850,194

5,561,467

4,922,144

3,151,509

2,710,247

 

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

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

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

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

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

Total Turnover

5,850,194

5,561,467

4,922,144

3,151,509

2,710,247

 

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

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

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

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

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

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

23,525

17,196

25,761

11,618

20,460

 

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

23,525

17,196

25,761

11,618

20,460

Taxation

<6,960>

<4,500>

<5,500>

<3,550>

<4,100>

 

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

16,565

12,696

20,261

8,068

16,360

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

90,407

77,711

57,450

49,382

33,022

 

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

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

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

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

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

As restated

90,407

77,711

57,450

49,382

33,022

 

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

106,972

90,407

77,711

57,450

49,382

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

106,972

90,407

77,711

57,450

49,382

 

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

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

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

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

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

 

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Others

953

754

596

447

403

 

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

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

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

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

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

 

953

754

596

447

403

 

 

 

BALANCE SHEET

 

 

KIRAN GEMS SDN. BHD.

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

3,808

5,930

5,121

3,739

2,821

 

 

 

 

 

 

 

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

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

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

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

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

TOTAL LONG TERM ASSETS

3,808

5,930

5,121

3,739

2,821

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Stocks

588,785

586,372

530,162

392,684

376,425

Trade debtors

503,470

483,876

576,348

316,752

290,174

Other debtors, deposits & prepayments

3,975

3,975

400

400

400

Amount due from director

123,205

162,100

266,199

-

-

Cash & bank balances

382,554

229,744

65,858

34,151

32,237

 

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

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

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

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

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

TOTAL CURRENT ASSETS

1,601,989

1,466,067

1,438,967

743,987

699,236

 

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

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

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

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

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

TOTAL ASSET

1,605,797

1,471,997

1,444,088

747,726

702,057

 

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

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

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

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

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

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade creditors

487,365

372,590

346,827

284,930

245,643

Other creditors & accruals

4,500

4,500

4,500

2,500

2,500

Amounts owing to director

-

-

-

43,293

48,529

Provision for taxation

6,379

4,500

15,050

9,550

6,000

 

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

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

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

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

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

TOTAL CURRENT LIABILITIES

498,244

381,590

366,377

340,273

302,672

 

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

1,103,745

1,084,477

1,072,590

403,714

396,564

 

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

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

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

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

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

TOTAL NET ASSETS

1,107,553

1,090,407

1,077,711

407,453

399,385

 

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

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

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

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

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

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

1,000,000

1,000,000

1,000,000

350,003

350,003

 

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

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

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

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

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

TOTAL SHARE CAPITAL

1,000,000

1,000,000

1,000,000

350,003

350,003

 

 

 

 

 

 

RESERVES

 

 

 

 

 

Retained profit/(loss) carried forward

106,972

90,407

77,711

57,450

49,382

 

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

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

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

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

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

TOTAL RESERVES

106,972

90,407

77,711

57,450

49,382

 

 

 

 

 

 

 

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

1,106,972

1,090,407

1,077,711

407,453

399,385

 

 

 

 

 

 

LONG TERM LIABILITIES

 

 

 

 

 

Deferred taxation

581

-

-

-

-

 

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

581

-

-

-

-

 

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

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

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

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

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

 

1,107,553

1,090,407

1,077,711

407,453

399,385

 

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

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

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

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

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

 

 

 

 

 

 

 

 

 

FINANCIAL RATIO

 

 

KIRAN GEMS SDN. BHD.

 

TYPES OF FUNDS

 

 

 

 

 

Cash

382,554

229,744

65,858

34,151

32,237

Net Liquid Funds

382,554

229,744

65,858

34,151

32,237

Net Liquid Assets

514,960

498,105

542,428

11,030

20,139

Net Current Assets/(Liabilities)

1,103,745

1,084,477

1,072,590

403,714

396,564

Net Tangible Assets

1,107,553

1,090,407

1,077,711

407,453

399,385

Net Monetary Assets

514,379

498,105

542,428

11,030

20,139

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

0

0

0

0

0

Total Liabilities

498,825

381,590

366,377

340,273

302,672

Total Assets

1,605,797

1,471,997

1,444,088

747,726

702,057

Net Assets

1,107,553

1,090,407

1,077,711

407,453

399,385

Net Assets Backing

1,106,972

1,090,407

1,077,711

407,453

399,385

Shareholders' Funds

1,106,972

1,090,407

1,077,711

407,453

399,385

Total Share Capital

1,000,000

1,000,000

1,000,000

350,003

350,003

Total Reserves

106,972

90,407

77,711

57,450

49,382

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

0.77

0.60

0.18

0.10

0.11

Liquid Ratio

2.03

2.31

2.48

1.03

1.07

Current Ratio

3.22

3.84

3.93

2.19

2.31

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

37

38

39

45

51

Debtors Ratio

31

32

43

37

39

Creditors Ratio

30

24

26

33

33

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

0.00

0.00

0.00

0.00

0.00

Liabilities Ratio

0.45

0.35

0.34

0.84

0.76

Times Interest Earned Ratio

25.69

23.81

44.22

26.99

51.77

Assets Backing Ratio

1.11

1.09

1.08

1.16

1.14

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

0.40

0.31

0.52

0.37

0.75

Net Profit Margin

0.28

0.23

0.41

0.26

0.60

Return On Net Assets

2.21

1.65

2.45

2.96

5.22

Return On Capital Employed

2.21

1.65

2.45

2.96

5.22

Return On Shareholders' Funds/Equity

1.50

1.16

1.88

1.98

4.10

Dividend Pay Out Ratio (Times)

0.00

0.00

0.00

0.00

0.00

NOTES TO ACCOUNTS

 

 

 

 

 

Contingent Liabilities

0

0

0

0

0




DIAMOND INDUSTRY – INDIA

 

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

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

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

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

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

-          The diamond jewellery industry in India today may be more than Rs 60000 mil and is rated amongst the fastest growing  in the world. Indi ranks third in the world in domestic diamond consumption.

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

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

 

DIAMOND SAGA – DIRTY DOZEN STUCK WITH 2K CR DEBT

This could be the biggest credibility crisis the Indian diamond industry has ever faced. Fifteen banks run the risk of losing Rs 2000 crore lent to a dozen diamond firms in Surat. Until about two months ago, they had not repaid  these dues. Bankers believe many diamantaires borrowed money during the economic downturn two years ago and diverted funds to businesses like real estate and capital markets. Many of themselves made money from these businesses but their diamond companies have gone sick and declared insolvency.

-          Most of the money borrowed from the banks in the name of their diamond business has been diverted in real estate and the share market. The banks are not in a position to seize their properties because in many cases, these were purchased in the name of their relatives and friends.

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.54.39

UK Pound

1

Rs.82.32

Euro

1

Rs.69.54

 

 

INFORMATION DETAILS

 

Report Prepared by :

PRL

 

 

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.