MIRA INFORM REPORT

 

 

Report Date :

11.11.2013

 

IDENTIFICATION DETAILS

 

Name :

INTERNATIONAL BRASS INDUSTRIES SDN. BHD.

 

 

Registered Office :

307, Jalan Mahkota, Taman Maluri, Cheras, 1st Floor, 55100 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2012

 

 

Date of Incorporation :

18.06.2003

 

 

Com. Reg. No.:

618782-K

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Manufacturing Brass Rods

 

 

No. of Employees :

91

 

 

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

EXECUTIVE SUMMARY

 

 

 

REGISTRATION NO.

:

618782-K

COMPANY NAME

:

INTERNATIONAL BRASS INDUSTRIES SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

18/06/2003

 

 

 

 

 

 

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

 

 

 

 

 

 

REGISTERED ADDRESS

:

307, JALAN MAHKOTA, TAMAN MALURI, CHERAS, 1ST FLOOR, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

NO. 1, JALAN PERUSAHAAN UTAMA, TAMAN INDUSTRI SELESA JAYA, 43300 BALAKONG, SELANGOR, MALAYSIA.

TEL.NO.

:

03-89618118

FAX.NO.

:

03-89616511

WEB SITE

:

WWW.IBIBRASS.COM

CONTACT PERSON

:

MUTHUKUMAR S/O AYARPADDE ( MANAGING DIRECTOR )

 

 

 

INDUSTRY CODE

:

25994

PRINCIPAL ACTIVITY

:

MANUFACTURING BRASS RODS

AUTHORISED CAPITAL

:

MYR 25,000,000.00 DIVIDED INTO
ORDINARY SHARE 25,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 12,000,000.00 DIVIDED INTO
ORDINARY SHARES 12,000,000 CASH OF MYR 1.00 EACH.

 

 

 

SALES

:

MYR 119,708,961 [2012]

NET WORTH

:

MYR 28,880,262 [2012]

 

 

 

STAFF STRENGTH

:

91 [2013]

BANKER (S)

:

AMBANK (M) BHD
CIMB BANK BHD
EXPORT-IMPORT BANK OF MALAYSIA BHD
STANDARD CHARTERED BANK MALAYSIA BHD

LITIGATION

:

TRACED

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

FAIR

MANAGEMENT CAPABILITY

:

AVERAGE

 

 

 

COMMERCIAL RISK

:

LOW

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) manufacturing brass rods.

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

The immediate holding company of the SC is MK INDUSTRIES (ASIA) SDN. BHD., a company incorporated in MALAYSIA.

 

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

 

Name

Address

IC/PP/Loc No

Shareholding

(%)

MK INDUSTRIES (ASIA) SDN. BHD.

307, JALAN MAHKOTA, TAMAN MALURI, CHERAS, 1ST FLOOR, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

735129W

12,000,000.00

100.00

 

 

 

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

------

 

 

 

12,000,000.00

100.00

 

 

 

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

=====

+ Also Director

DIRECTORS



DIRECTOR 1

 

Name Of Subject

:

MR. MURUGESAN MUTHU MUNIYANDI

Address

:

797, BATU 13, JALAN BALAKONG, SERI KEMBANGAN, KAJANG, 43300 BALAKONG, SELANGOR, MALAYSIA.

IC / PP No

:

A9394400

 

 

 

 

 

 

 

 

 

Nationality

:

INDIAN

Date of Appointment

:

30/12/2004

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 2

 

Name Of Subject

:

DATO' MUTHUKUMAR A/L AYARPADDE

Address

:

66, JALAN SETIAJAYA, BUKIT DAMANSARA, 50490 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

A2733985

New IC No

:

720713-10-5669

Date of Birth

:

13/07/1972

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

25/09/2006


MANAGEMENT

 

 

 

 

1)

Name of Subject

:

MUTHUKUMAR S/O AYARPADDE

 

Position

:

MANAGING DIRECTOR

 

 

 

 

 

2)

Name of Subject

:

VELMURUGAN

 

Position

:

ACCOUNT MANAGER

 

 

 

 

 

3)

Name of Subject

:

FALIZA

 

Position

:

HUMAN RESOURCE MANAGER

 

 

 

 

 

 

AUDITOR

 

Auditor

:

RAJA MANIC & CO

Auditor' Address

:

7A, PEARL COURT, 61, JALAN THAMBY ABDULLAH, BRICKFIELDS, 50470 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

 

 

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. VIJAYAN A/L SINGARAM

 

IC / PP No

:

6108136

 

New IC No

:

601205-10-6639

 

Address

:

161-4, BLOCK 5, JALAN PERKASA SATU, TAMAN MALURI, CHERAS, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

AMBANK (M) BHD

 

 

 

 

 

 

 

 

 

2)

Name

:

CIMB BANK BHD

 

 

 

 

 

 

 

 

 

3)

Name

:

EXPORT-IMPORT BANK OF MALAYSIA BHD

 

 

 

 

 

 

 

 

 

4)

Name

:

STANDARD CHARTERED BANK MALAYSIA BHD

 

 

 

 

 

 

 

 

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

30/01/2007

IJARAH FACILITY AGREEMENT & MURABAHAH LETTER OF CREDIT FACILITY AGREEMENT

KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD

N/A

Satisfied

2

10/05/2007

N/A

EXPORT-IMPORT BANK OF MALAYSIA BHD

MYR 5,000,000.00

Unsatisfied

3

25/07/2007

N/A

EXPORT-IMPORT BANK OF MALAYSIA BHD

MYR 5,000,000.00

Unsatisfied

4

03/08/2007

N/A

CIMB BANK BERHAD

MYR 189,000.00

Unsatisfied

5

03/08/2007

N/A

CIMB BANK BERHAD

MYR 100,000.00

Unsatisfied

6

08/07/2008

N/A

AMBANK (M) BHD

MYR 8,100,000.00

Unsatisfied

7

28/01/2010

N/A

STANDARD CHARTERED BANK MALAYSIA BHD

USD 8,000,000.00

Unsatisfied

8

03/04/2012

N/A

UNITED OVERSEAS BANK (MALAYSIA) BHD

MYR 51,000,000.00

Unsatisfied

 

 

LEGAL CHECK AGAINST SC


* A check has been conducted in our databank against the SC whether the subject has been involved in any litigation.

LEGAL ACTION

 

 

 

Code No

:

72

Case No

:

62716

 

 

 

 

 

Year

:

2009

Place

:

KUALA LUMPUR

 

 

 

 

 

Court

:

MAGISTRATE COURT

 

 

 

 

 

 

 

 

Date Filed

:

05/06/2009

 

 

 

 

 

 

 

 

Solicitor

:

SAADIAH KHOO LO & CO

 

 

 

 

 

 

 

 

Solicitor Tel. No.

:

03-40239328/9329

 

 

 

 

 

 

 

 

Solicitor Address

:

1-1,TKT 1,PEKELILING BUSS CTR, JLN 65C,OFF JLN PAHANG BARAT, 53000 KUALA LUMPUR

 

 

 

 

 

Solicitor Ref

:

SKL/UOB/08/2601/E

 

 

 

 

 

 

 

 

Plaintiff

:

UNITED OVERSEAS BANK-CARD CENTRE,KL

 

 

 

Defendants

:

INTERNATIONAL BRASS INDUSTRIES SDN. BHD. (618782)

 

 

 

 

 

Amount Claimed

:

RM3855

 

 

 

 

 

 

 

 

Nature of Claim

:

SUMMONS

 

 

 

 

 

 

 

 

 

NOTE:

Please check with creditors for confirmation as alleged debts may have been paid since recorded or are being disputed. The person wo has been sued has the same name as the subject. However, we are unable to determine whether the person sued is the one and the same person.

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

Percentage

:

40%

Overseas

:

YES

Percentage

:

60%

Import Countries

:

CHINA,AUSTRALIA



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

Percentage

:

40%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

60%

Export Market

:

THAILAND

HONG KONG

TAIWAN

AUSTRALIA

SINGAPORE

EUROPE

INDIA

CHINA

Credit Term

:

30 - 60 DAYS

 

 

 

 

 

 

Payment Mode

:

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

Type of Customer

:

MANUFACTURING INDUSTRIES,DISTRIBUTORS

 

 

 

 

 

 

CUSTOMER(S)

:

1) STEEL RECON INDUSTRIES SDN BHD

 

OPERATIONS

 

 

Products manufactured

:

BRASS

 

 

 

Competitor(s)

:

SHOWA DENKO HD (MALAYSIA) SDN BHD

 

 

 

 

Ownership of premises

:

OWNED

 

 

Total Number of Employees:

YEAR

2013

 

 

GROUP

N/A

 

 

 

 

 

 

 

 

COMPANY

91

 

 

 

 

 

 

 

 

 

Branch

:

NO

 

Other Information:


The SC is principally engaged in the (as a / as an) manufacturing brass rods.

The SC produces high quality brass products for various industrial applications.

We were informed that the SC has integrated environment friendly manufacturing plant, complete with environment and waste management system.

The SC manufactures high quality brightly annealed brass rods, wires, hexagons, squares and profiles of diameter 5.5mm up to 80mm.

The products are manufactured in accordance to established international standards JIS, ASTM DIN and BS to meet the very stringent needs of clients.


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client

:

0389618118

Current Telephone Number

:

03-89618118

Match

:

YES

 

 

 

Address Provided by Client

:

NO. 1, JALAN PERUSAHAAN UTAMA, TAMAN INDUSTRI SELESA JAYA,43300,BALAKONG,SELANGOR.

Current Address

:

NO. 1, JALAN PERUSAHAAN UTAMA, TAMAN INDUSTRI SELESA JAYA, 43300 BALAKONG, SELANGOR, MALAYSIA.

Match

:

YES

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations


On 1st November 2013 we contacted a staff from the SC and she provided some information regarding the SC.


FINANCIAL ANALYSIS

 

 

Profitability

 

 

 

 

 

 

Turnover

:

Increased

[

2008 - 2012

]

 

Profit/(Loss) Before Tax

:

Increased

[

2008 - 2012

]

 

Return on Shareholder Funds

:

Unfavourable

[

2.12%

]

 

Return on Net Assets

:

Unfavourable

[

9.51%

]

 

 

 

 

 

 

 

 

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

:

Unfavourable

[

69 Days

]

 

Debtor Ratio

:

Favourable

[

47 Days

]

 

Creditors Ratio

:

Favourable

[

43 Days

]

 

 

 

 

 

 

 

 

The SC could be incurring higher holding cost. As its capital was tied up in stocks, it could face liquidity problems. The favourable debtors' days could be due to the good credit control measures implemented by the SC. The SC had a favourable creditors' ratio where the SC could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

 

 

 

 

 

 

 

Liquidity

 

 

 

 

 

 

Liquid Ratio

:

Acceptable

[

0.83 Times

]

 

Current Ratio

:

Unfavourable

[

1.23 Times

]

 

 

 

 

 

 

 

 

The SC's liquid ratio was slightly low. This could indicate that the SC's working capital was slightly deficient. The SC will have to improve its liquidity position either by obtaining short term financing or increase its paid up capital so that it can meet all its short term obligations as and when they fall due.

 

 

 

 

 

 

 

Solvency

 

 

 

 

 

 

Interest Cover

:

Unfavourable

[

1.37 Times

]

 

Gearing Ratio

:

Unfavourable

[

2.02 Times

]

 

 

 

 

 

 

 

 

The SC's interest cover was low. If its profits fall or when interest rate rises, it may not be able to meet all its interest payment. The SC was highly geared, thus it had a high financial risk. The SC was dependent on loans to finance its business needs. In times of economic downturn and / or high interest rate, the SC will become less profitable and competitive than other firms in the same industry, which are lowly geared. This is because the SC has to service the interest and to repay the loan, which will erode part of its profits. The profits will fluctuate depending on the SC's turnover and the interest it needs to pay.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Assessment :

 

 

 

 

 

 

Generally, the SC's performance has improved with higher turnover and profit. The SC's liquidity was at an acceptable range. If the SC is able to obtain further short term financing, it should be able to meet all its short term obligations. If there is a fall in the SC's profit or any increase in interest rate, the SC may not be able to generate sufficient cash-flow to service its interest. The SC's gearing level was high and its going concern will be in doubt if there is no injection of additional shareholders' funds in times of economic downturn and / or high interest rates.

 

 

 

 

 

 

 

Overall financial condition of the SC : POOR

 

 

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

25994 : Manufacture of metal household articles

 

 

INDUSTRY :

MANUFACTURING

 

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

OVERALL INDUSTRY OUTLOOK : Average Growth

 


CREDIT RISK EVALUATION & RECOMMENDATION

 

 


Incorporated in 2003, the SC is a Private Limited company, focusing on manufacturing brass rods. 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. Having strong support from its holding company has enabled the SC to remain competitive despite the challenging business environment. With a huge paid up capital, the SC is allowed to expand its business comfortably.

Over the years, the SC has established an extensive clientele base in the market. Besides catering to the local market, the SC has penetrated into other countries. With the contribution of both local and overseas customers, the SC is likely to be exposed to lower commercial risk. Hence, we believe that the SC has better business expansion opportunities in the future. Being a moderate size company, the SC has a total workforce of 91 employees in its business operations. Overall, we regard that the SC's management capability is average. This indicates that the SC has greater potential to improve its business performance and raising income for the SC.

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. The SC managed to maintain an adequate liquidity level, indicating that the SC has the ability to meet its financial obligations. The high gearing ratio clearly implied that the SC was supported by more debt than equity. Thus, the SC is exposed to high financial risk. Given a positive net worth standing at MYR 28,880,262, the SC should be able to maintain its business in the near terms.

Having a strong assets backing, the SC possesses latent assets as collateral for further financial extension. Hence, it has good chance of getting loans if the needs arises. The SC's supplier are from both the local and overseas countries. This will eliminates the risk of dependency on deliveries from a number of key suppliers and insufficient quantities of its raw materials. Overall the SC has a good control over its resources.

The SC's 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.

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)

INTERNATIONAL BRASS INDUSTRIES SDN. BHD.

 

Financial Year End

2012-12-31

2011-12-31

2010-12-31

2009-12-31

2008-06-30

Months

12

12

12

18

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

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

 

 

 

 

 

 

TURNOVER

119,708,961

98,493,453

93,380,130

147,348,060

202,608,527

Other Income

766,046

2,282,001

-

-

-

 

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

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

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

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

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

Total Turnover

120,475,007

100,775,454

93,380,130

147,348,060

202,608,527

Costs of Goods Sold

<109,493,155>

<91,806,492>

-

-

-

 

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

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

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

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

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

Gross Profit

10,981,852

8,968,962

-

-

-

 

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

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

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

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

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

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

1,258,857

766,100

404,306

2,032,141

6,038,360

 

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

1,258,857

766,100

404,306

2,032,141

6,038,360

Taxation

<645,411>

<176,448>

1,323,594

<225,245>

<864,100>

 

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

613,446

589,652

1,727,900

1,806,896

5,174,260

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

10,739,485

10,149,833

8,421,933

9,202,167

7,726,419

 

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

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

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

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

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

As restated

10,739,485

10,149,833

8,421,933

9,202,167

7,726,419

 

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

11,352,931

10,739,485

10,149,833

11,009,063

12,900,679

TRANSFER TO RESERVES - General

-

-

-

-

164,697

DIVIDENDS - Ordinary (paid & proposed)

-

-

-

<2,587,130>

<3,863,209>

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

11,352,931

10,739,485

10,149,833

8,421,933

9,202,167

 

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

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

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

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

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

 

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Bank overdraft

654,670

1,562,124

-

2,209,359

1,537,241

Bankers' acceptance

1,928,218

252,332

-

-

-

Hire purchase

19,636

21,181

-

40,992

11,843

Letter of credit

149,794

121,697

-

-

-

Term loan / Borrowing

691,208

1,396,803

-

1,933,245

1,580,460

Others

-

-

-

629,168

980,643

 

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

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

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

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

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

 

3,443,526

3,354,137

-

4,812,764

4,110,187

 

BALANCE SHEET

 

INTERNATIONAL BRASS INDUSTRIES SDN. BHD.

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

36,523,395

35,309,861

37,353,981

39,128,015

41,844,786

 

 

 

 

 

 

 

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

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

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

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

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

TOTAL LONG TERM ASSETS

36,523,395

35,309,861

37,353,981

39,128,015

41,844,786

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Stocks

22,611,667

17,131,608

-

11,758,582

13,308,242

Trade debtors

15,441,624

13,822,954

-

15,229,925

15,793,785

Other debtors, deposits & prepayments

2,043,888

3,043,882

-

2,086,528

2,418,941

Short term deposits

3,493,667

3,453,099

-

11,590,856

2,000,000

Amount due from holding company

21,583,891

21,583,891

-

18,092,666

2,592,281

Amount due from related companies

1,383,386

-

-

-

1,068,857

Cash & bank balances

2,029,129

2,461,523

-

3,709,098

3,916,754

Others

245,363

732,562

-

252,834

1,076,321

 

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

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

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

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

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

TOTAL CURRENT ASSETS

68,832,615

62,229,519

64,163,748

62,720,489

42,175,181

 

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

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

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

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

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

TOTAL ASSET

105,356,010

97,539,380

101,517,729

101,848,504

84,019,967

 

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

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

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

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

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

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade creditors

12,858,395

10,876,314

-

1,121,129

4,600,176

Other creditors & accruals

1,348,056

864,070

-

659,292

822,154

Hire purchase & lease creditors

160,421

12,000

-

199,213

217,537

Bank overdraft

630,329

598,927

-

741,432

34,542

Short term borrowings/Term loans

8,258,865

3,367,313

-

3,527,935

2,255,193

Bill & acceptances payable

31,450,155

24,366,214

-

26,354,310

23,701,000

Amounts owing to related companies

1,189,568

1,337,508

-

1,730,384

-

Amounts owing to director

25,225

6,041,225

-

3,419,179

1,875

Dividends payable/proposed

-

-

-

-

3,863,209

Other liabilities

-

-

-

2,573,973

-

 

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

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

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

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

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

TOTAL CURRENT LIABILITIES

55,921,014

47,463,571

39,897,904

40,326,847

35,495,686

 

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

12,911,601

14,765,948

24,265,844

22,393,642

6,679,495

 

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

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

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

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

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

TOTAL NET ASSETS

49,434,996

50,075,809

61,619,825

61,521,657

48,524,281

 

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

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

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

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

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

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

12,000,000

12,000,000

12,000,000

12,000,000

12,000,000

 

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

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

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

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

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

TOTAL SHARE CAPITAL

12,000,000

12,000,000

12,000,000

12,000,000

12,000,000

 

 

 

 

 

 

RESERVES

 

 

 

 

 

Share premium

-

-

5,527,331

-

-

Revaluation reserve

5,527,331

5,527,331

-

5,527,331

5,527,331

Retained profit/(loss) carried forward

11,352,931

10,739,485

10,149,833

8,421,933

9,202,167

 

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

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

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

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

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

TOTAL RESERVES

16,880,262

16,266,816

15,677,164

13,949,264

14,729,498

 

 

 

 

 

 

 

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

28,880,262

28,266,816

27,677,164

25,949,264

26,729,498

 

 

 

 

 

 

LONG TERM LIABILITIES

 

 

 

 

 

Long term loans

17,300,475

19,084,889

-

31,368,524

17,184,213

Hire purchase creditors

417,799

45,856

-

220,703

532,483

Deferred taxation

2,836,460

2,678,248

-

3,983,166

4,078,087

 

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

20,554,734

21,808,993

33,942,661

35,572,393

21,794,783

 

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

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

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

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

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

 

49,434,996

50,075,809

61,619,825

61,521,657

48,524,281

 

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

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

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

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

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

 

FINANCIAL RATIO

 

INTERNATIONAL BRASS INDUSTRIES SDN. BHD.

 

TYPES OF FUNDS

 

 

 

 

 

Cash

5,522,796

5,914,622

-

15,299,954

5,916,754

Net Liquid Funds

<26,557,688>

<19,050,519>

-

<11,795,788>

<17,818,788>

Net Liquid Assets

<9,700,066>

<2,365,660>

24,265,844

10,635,060

<6,628,747>

Net Current Assets/(Liabilities)

12,911,601

14,765,948

24,265,844

22,393,642

6,679,495

Net Tangible Assets

49,434,996

50,075,809

61,619,825

61,521,657

48,524,281

Net Monetary Assets

<30,254,800>

<24,174,653>

<9,676,817>

<24,937,333>

<28,423,530>

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

58,218,044

47,475,199

-

62,412,117

43,924,968

Total Liabilities

76,475,748

69,272,564

73,840,565

75,899,240

57,290,469

Total Assets

105,356,010

97,539,380

101,517,729

101,848,504

84,019,967

Net Assets

49,434,996

50,075,809

61,619,825

61,521,657

48,524,281

Net Assets Backing

28,880,262

28,266,816

27,677,164

25,949,264

26,729,498

Shareholders' Funds

28,880,262

28,266,816

27,677,164

25,949,264

26,729,498

Total Share Capital

12,000,000

12,000,000

12,000,000

12,000,000

12,000,000

Total Reserves

16,880,262

16,266,816

15,677,164

13,949,264

14,729,498

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

0.10

0.12

-

0.38

0.17

Liquid Ratio

0.83

0.95

-

1.26

0.81

Current Ratio

1.23

1.31

1.61

1.56

1.19

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

69

63

-

29

24

Debtors Ratio

47

51

-

38

28

Creditors Ratio

43

43

-

3

8

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

2.02

1.68

-

2.41

1.64

Liabilities Ratio

2.65

2.45

2.67

2.92

2.14

Times Interest Earned Ratio

1.37

1.23

-

1.42

2.47

Assets Backing Ratio

4.12

4.17

5.13

5.13

4.04

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

1.05

0.78

0.43

1.38

2.98

Net Profit Margin

0.51

0.60

1.85

1.23

2.55

Return On Net Assets

9.51

8.23

0.66

11.13

20.91

Return On Capital Employed

9.36

8.13

0.66

10.96

20.81

Return On Shareholders' Funds/Equity

2.12

2.09

6.24

6.96

19.36

Dividend Pay Out Ratio (Times)

0.00

0.00

-

1.43

0.75

NOTES TO ACCOUNTS

 

 

 

 

 

Contingent Liabilities

0

0

-

0

0

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.62.73

UK Pound

1

Rs.100.92

Euro

1

Rs.84.06

 

 

INFORMATION DETAILS

 

Report Prepared by :

PDT

 

 

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.