MIRA INFORM REPORT

 

 

Report Date :

05.10.2013

 

IDENTIFICATION DETAILS

 

Name :

P.P. STEEL SDN. BHD.

 

 

Registered Office :

10a, Jalan 54, Desa Jaya, 52100 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

29.02.2012

 

 

Date of Incorporation :

24.01.1989

 

 

Com. Reg. No.:

178180-D

 

 

Legal Form :

Private Limited Company

 

 

Line of Business :

Subject is engaged as a steel service centre. It provides a wide range of services such as Slitting, Precision & Warehouse / Storage

 

 

No. of Employees :

50 [2013]

 

RATING & COMMENTS

 

MIRA’s Rating :

B

 

RATING

STATUS

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Status :

Moderate

 

 

Payment Behaviour :

Slow

 

 

Litigation :

Clear

 

 

NOTES :

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

 

ECGC Country Risk Classification List – 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.

:

178180-D

COMPANY NAME

:

P.P. STEEL SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

24/01/1989

 

 

 

 

 

 

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

 

 

 

 

 

 

REGISTERED ADDRESS

:

10A, JALAN 54, DESA JAYA, 52100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

LOT 33, JALAN INDUSTRI 2/1, RAWANG INTEGRATED INDUSTRIAL PARK, 48000 RAWANG, SELANGOR, MALAYSIA.

TEL.NO.

:

03-60929888

FAX.NO.

:

03-60929018

EMAIL

:

SALES@PPSSC.COM.MY

WEB SITE

:

WWW.PPSSC.COM.MY

CONTACT PERSON

:

LEE SIN PEN ( MANAGING DIRECTOR )

 

 

 

INDUSTRY CODE

:

24109

PRINCIPAL ACTIVITY

:

STEEL SERVICE CENTRE

AUTHORISED CAPITAL

:

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

ISSUED AND PAID UP CAPITAL

:

MYR 6,000,000.00 DIVIDED INTO 
ORDINARY SHARES 200,000 CASH AND 5,800,000 OTHERWISE OF MYR 1.00 EACH.

 

 

 

SALES

:

MYR 61,831,925 [2012]

NET WORTH

:

MYR 16,600,961 [2012]

 

 

 

STAFF STRENGTH

:

50 [2013]

BANKER (S)

:

ALLIANCE BANK MALAYSIA BHD
AMBANK (M) BHD
HONG LEONG BANK BHD
PUBLIC BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

FAIR

MANAGEMENT CAPABILITY

:

AVERAGE

 

 

 

COMMERCIAL RISK

:

HIGH

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) steel service centre.

 

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

(%)

DATUK LEE SIN PEN +

107, JALAN DEDAP BATIK, SIERRAMAS RESORT HOMES, 47000 SUNGAI BULOH, SELANGOR, MALAYSIA.

510125-04-5385 4133965

3,000,000.00

50.00

MR. LEE SIN CHOON

174, JALAN BURUNG SINTAR, TAMAN BUKIT MALURI, 51200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

541205-04-5053 4714107

1,200,000.00

20.00

MR. LEE SIN PIN +

22 SD, 11/3C, JALAN KIARA PJU 9, BANDAR SRI DAMANSARA, 52200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

451130-04-5147 0192085

900,000.00

15.00

LEE CHOW HUA

14, JALAN DESA BAHRU, TAMAN BAHRU, 75350 BATU BERENDAM, MELAKA, MALAYSIA.

651108-04-5067 A0230012

900,000.00

15.00

 

 

 

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

------

 

 

 

6,000,000.00

100.00

 

 

 

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

=====

+ Also Director

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. LEE CHOW LIN

Address

:

107, JALAN DEDAP BATIK, SIERRAMAS RESORT HOMES, 47000 SUNGAI BULOH, SELANGOR, MALAYSIA.

 

 

 

New IC No

:

880505-14-5925

Date of Birth

:

05/05/1988

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

07/02/2013

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 2

 

Name Of Subject

:

MR. LEE CHOW HAUR

Address

:

107, JALAN DEDAP BATIK, SIERRAMAS RESORT HOMES, 47000 SUNGAI BULOH, SELANGOR, MALAYSIA.

 

 

 

New IC No

:

850412-04-5311

Date of Birth

:

12/04/1985

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

07/02/2013

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 3

 

Name Of Subject

:

MR. LEE CHOW KIM

Address

:

8, JALAN ELITIS AMBAL BIRU, VALENCIA, 47000 SUNGAI BULOH, SELANGOR, MALAYSIA.

 

 

 

New IC No

:

751220-04-5129

Date of Birth

:

20/12/1975

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

02/05/2012

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 4

 

Name Of Subject

:

MR. LEE CHOW LEONG

Address

:

107, JALAN DEDAP BATIK, SIERRAMAS RESORT HOMES, 47000 SUNGAI BULOH, SELANGOR, MALAYSIA.

 

 

 

New IC No

:

820310-14-5517

Date of Birth

:

10/03/1982

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

02/05/2012

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 5

 

Name Of Subject

:

MR. LEE SIN PIN

Address

:

22 SD, 11/3C, JALAN KIARA PJU 9, BANDAR SRI DAMANSARA, 52200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

0192085

New IC No

:

451130-04-5147

Date of Birth

:

30/11/1945

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

24/01/1989

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 6

 

Name Of Subject

:

DATUK LEE SIN PEN

Address

:

107, JALAN DEDAP BATIK, SIERRAMAS RESORT HOMES, 47000 SUNGAI BULOH, SELANGOR, MALAYSIA.

IC / PP No

:

4133965

New IC No

:

510125-04-5385

Date of Birth

:

25/01/1951

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

24/01/1989

 

 

 

 

 

 

 

 

 

 

 

 



MANAGEMENT

 

 

 

1)

Name of Subject

:

GOH KEA CHUAN

 

Position

:

CREDIT CONTROLLER

 

 

 

 

 

2)

Name of Subject

:

LEE SIN PEN

 

Position

:

MANAGING DIRECTOR

 

 

 

AUDITOR

 

Auditor

:

KHOO & CO.

Auditor' Address

:

SUITE 12.1, WISMA MIRAMA, JALAN WISMA PUTRA, 12TH FLOOR, 50460 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. LING SIOW MOY

 

IC / PP No

:

8380891

 

New IC No

:

540117-10-5162

 

Address

:

17, JALAN RIMBA RIANG 9/8, SEKSYEN 9, KOTA DAMANSARA, 47810 PETALING JAYA, SELANGOR, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

 

 

 

2)

Company Secretary

:

MS. FONG LAI CHEE

 

IC / PP No

:

5485728

 

New IC No

:

580404-10-5946

 

Address

:

40, LORORNG CP 1/8, CHERAS PERDANA, BATU 9 3/4, CHERAS, 43200 BALAKONG, SELANGOR, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

ALLIANCE BANK MALAYSIA BHD

 

 

 

 

 

 

 

 

 

2)

Name

:

AMBANK (M) BHD

 

 

 

 

 

 

 

 

 

3)

Name

:

HONG LEONG BANK BHD

 

 

 

 

 

 

 

 

 

4)

Name

:

PUBLIC BANK BHD

 

 

 

 

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

30/12/1992

N/A

PUBLIC BANK BERHAD

MYR 600,000.00

Unsatisfied

2

24/06/1993

N/A

HONGKONG BANK MALAYSIA BERAHD

MYR 1,000,000.00

Satisfied

3

06/05/1996

N/A

ARABMALAYSIAN BANK BERHAD

MYR 4,500,000.00

Satisfied

4

29/11/1996

N/A

PUBLIC BANK BERHAD

MYR 3,500,000.00

Unsatisfied

5

20/12/1996

N/A

PUBLIC BANK BERHAD

MYR 85,000.00

Unsatisfied

6

20/12/1996

N/A

PUBLIC BANK BERHAD

MYR 85,000.00

Unsatisfied

7

02/04/1997

N/A

HONG LEONG BANK BERHAD

MYR 28,380,000.00

Satisfied

8

13/10/1997

N/A

HONG LEONG BANK BERHAD

MYR 208,000.00

Satisfied

9

18/12/1997

N/A

HONG LEONG BANK BERHAD

MYR 264,000.00

Satisfied

10

23/03/2004

N/A

AMBANK BERHAD

MYR 2,800,000.00

Unsatisfied

11

22/12/2004

N/A

HONG LEONG BANK BERHAD

N/A

Satisfied

12

22/12/2004

N/A

HONG LEONG BANK BERHAD

N/A

Satisfied

13

28/11/2006

N/A

ALLIANCE ISLAMIC BANK BERHAD

N/A

Unsatisfied

14

28/11/2006

N/A

ALLIANCE ISLAMIC BANK BERHAD

N/A

Unsatisfied

15

02/06/2011

N/A

AMBANK (M) BHD

MYR 1,500,000.00

Unsatisfied

16

26/03/2013

FIRST PARTY THIRD LEGAL CHARGE DATED 26/03/2013

AMISLAMIC BANK BERHAD

MYR 2,500,000.00

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. Our databank consists of 99% of the wound up companies in Malaysia.

No legal action was found in our databank. 

No winding up petition was found in our databank. 

DEFAULTER CHECK AGAINST SC


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

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

PAYMENT RECORD

 

 

SOURCES OF RAW MATERIALS:

Local

:

YES

Overseas

:

YES

Import Countries

:

ASIA



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

:

100%

Domestic Markets

:

MALAYSIA

Overseas

:

NO

 

 

 

 

 

 

 

 

 

Credit Term

:

30 DAYS

 

 

 

 

 

 

Payment Mode

:

CHEQUES

Type of Customer

:

END USERS

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATIONS

 

Products manufactured

:

STEEL

 

 

 

Services

:

STEEL SERVICE CENTRE

 

 

 

 

Ownership of premises

:

OWNED

 

 

Total Number of Employees:

 

YEAR

2013

2012

2010

2009

 

GROUP

N/A

N/A

N/A

N/A

 

 

 

 

 

COMPANY

50

50

100

70

 

 

 

 

 

 

Branch

:

NO

 

 

Other Information:


The SC is principally engaged in the (as a / as an) steel service centre. 

The SC provides a wide range of services as follows,

1) Slitting

2) Precision

3) Warehouse/ Storage and others.
The SC serve a wide range of products which include:-

* Electric-Resistance-Welded (ERW) carbon steel pipes 
* Square and rectangular hollow sections 
* Light-gauge lip channels 
* Flat bars 
* Mild steel plates 

The SC sells the production to engineering/construction companies, electrical and electronic industry, automotive industry and others.

The SC's production machineries are semi-automated. 

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the SC indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-60929888

Match

:

N/A

 

 

 

Address Provided by Client

:

LOT 33, JALAN INDUSTRI 2/1, RAWANG INTEGRATED INDUSTRIAL PARK, 48000 RAWANG, SELANGOR DARUL EHSAN

Current Address

:

LOT 33, JALAN INDUSTRI 2/1, RAWANG INTEGRATED INDUSTRIAL PARK, 48000 RAWANG, SELANGOR, 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

[

2008 - 2012

]

 

Profit/(Loss) Before Tax

:

Decreased

[

2008 - 2012

]

 

Return on Shareholder Funds

:

Unfavourable

[

<6.12%>

]

 

Return on Net Assets

:

Unfavourable

[

<0.46%>

]

 

 

 

 

 

 

 

 

The SC's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The SC incurred losses during the year due to the inefficient control of its operating costs. The SC's unfavourable returns on shareholders' funds indicate the management's inefficiency in utilising its assets to generate returns.

 

 

 

 

 

 

 

Working Capital Control

 

 

 

 

 

 

Stock Ratio

:

Unfavourable

[

90 Days

]

 

Debtor Ratio

:

Unfavourable

[

66 Days

]

 

Creditors Ratio

:

Favourable

[

14 Days

]

 

 

 

 

 

 

 

 

The SC could be incurring higher holding cost. As its capital was tied up in stocks, it could face liquidity problems. The high debtors' ratio could indicate that the SC was weak in its credit control. However, the SC could also giving longer credit periods to its customers in order to boost its sales or to capture / retain its market share. The SC had a favourable creditors' ratio where the SC could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

 

 

 

 

 

 

 

Liquidity

 

 

 

 

 

 

Liquid Ratio

:

Unfavourable

[

0.59 Times

]

 

Current Ratio

:

Unfavourable

[

1.13 Times

]

 

 

 

 

 

 

 

 

A low liquid ratio means that the SC may be facing working capital deficiency. If the SC cannot obtain additional financing or injection of fresh capital, it may face difficulties in meeting its short term obligations.

 

 

 

 

 

 

 

Solvency

 

 

 

 

 

 

Interest Cover

:

Unfavourable

[

<0.14 Times>

]

 

Gearing Ratio

:

Unfavourable

[

1.45 Times

]

 

 

 

 

 

 

 

 

The SC incurred losses in the year. It did not generate sufficient income to service its interest. If the situation does not improve, the SC may be vulnerable to default in servicing the interest. The SC 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 :

 

 

 

 

 

 

Although the SC's turnover increased its profits however showed a reverse trend. The losses could be due to the management's failure to maintain its competitiveness in the market. Due to its weak liquidity position, the SC will be faced with problems in meeting all its short term obligations if no short term loan is obtained or additional capital injected into the SC. The SC's interest cover was negative, indicating that it did not generate sufficient income to service its interest. If its result does not show impressive improvements or succeed obtaining short term financing or capital injection, it may not be able to service its interest and repay the loans. The SC'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

24109 : Manufacture of other basic iron and steel products n.e.c.

 

 

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 government encourage manufacturers to move up the value chain of manufacturing industry. The new growth initiatives by government in the manufacturing sector such as solar and medial services can be important drivers of growth apart from helping to diversify the manufacturing base and contributing to the resilience of the sector.

 

 

OVERALL INDUSTRY OUTLOOK : Average Growth

 

CREDIT RISK EVALUATION & RECOMMENDATION

 

 

Incorporated in 1989, the SC is a Private Limited company, focusing on steel service centre. With its long presence in the industry coupled with its vast experiences in the business, the SC should have built up certain goodwill with its clients over times. The capital standing of the SC is fair. With an adequate share capital, the SC has the potential of expanding its business in future. 

Investigation revealed that the SC concentrates only on the local market. This narrow market segment has placed the SC at high business risk and limits its business expansion opportunities. Any adverse changes to the local economy might have a negative impact on the SC's business performance. The SC is operating on a medium scale and it has approximately 50 employees in its business operations. Overall, we regard that the SC's management capability is average. 

Despite the higher turnover, the SC suffered pre-tax losses which reflected a highly competitive business environment. The SC has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. Due to its weak liquidity position, the SC may face working capital deficiency in meeting its short term financial obligations if no fresh capital are injected into the SC. The high gearing ratio clearly implied that the SC was supported by more debt than equity. Thus, the SC is exposed to high financial risk. 

The SC's supplier are from both the local and overseas countries. This will eliminates the risk of dependency on deliveries from a number of key suppliers and insufficient quantities of its raw materials. 

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

The industry shows an upward trend and this trend is very likely to sustain in the near terms. Hence, the SC is expected to benefit from the favourable outlook of the industry. Nonetheless, the SC should adopt better competitive strategies in order to sustain its business position and to compete with other well established players in the same industry. 

In view of its poor financial performance, 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)

P.P. STEEL SDN. BHD.

 

Financial Year End

2012-02-29

2011-02-28

2010-02-28

2009-02-28

2008-02-29

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

SUMMARY

Currency

MYR

MYR

MYR

MYR

MYR

 

 

 

 

 

 

TURNOVER

61,831,925

53,553,918

52,349,482

65,551,638

75,832,627

Other Income

230,207

249,211

200,459

-

-

 

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

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

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

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

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

Total Turnover

62,062,132

53,803,129

52,549,941

65,551,638

75,832,627

Costs of Goods Sold

<54,686,163>

<42,183,982>

<43,733,277>

-

-

 

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

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

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

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

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

Gross Profit

7,375,969

11,619,147

8,816,664

-

-

 

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

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

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

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

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

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

<655,661>

613,674

<3,041,121>

145,685

3,221,406

 

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

<655,661>

613,674

<3,041,121>

145,685

3,221,406

Taxation

<360,274>

<337,045>

390,915

<262,376>

<1,110,426>

 

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

<1,015,935>

276,629

<2,650,206>

<116,691>

2,110,980

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

11,616,896

11,340,267

13,990,473

14,107,164

11,996,184

 

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

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

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

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

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

As restated

11,616,896

11,340,267

13,990,473

14,107,164

11,996,184

 

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

10,600,961

11,616,896

11,340,267

13,990,473

14,107,164

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

10,600,961

11,616,896

11,340,267

13,990,473

14,107,164

 

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

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

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

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

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

 

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Bank overdraft

402,585

303,023

264,376

115,384

-

Bankers' acceptance

111,491

100,955

91,512

212,325

-

Hire purchase

14,461

11,383

36,204

55,721

-

Term loan / Borrowing

48,327

59,664

67,184

91,714

-

Trust receipts

-

-

6,778

256,458

-

Others

-

-

319

450

-

 

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

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

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

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

 

 

576,864

475,025

466,373

732,052

 

 

 

 

BALANCE SHEET

 

 

P.P. STEEL SDN. BHD.

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

12,963,475

13,763,840

12,282,459

13,580,406

14,116,825

 

 

 

 

 

 

LONG TERM INVESTMENTS/OTHER ASSETS

 

 

 

 

 

Investments

360,000

360,000

360,000

360,000

-

Deferred assets

195,667

99,380

397,635

-

-

 

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

555,667

459,380

757,635

360,000

360,000

 

 

 

 

 

 

 

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

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

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

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

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

TOTAL LONG TERM ASSETS

13,519,142

14,223,220

13,040,094

13,940,406

14,476,825

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Stocks

15,227,414

15,788,820

9,748,318

12,910,158

-

Trade debtors

11,156,615

10,497,586

8,706,016

8,097,505

-

Other debtors, deposits & prepayments

4,870,010

10,931,509

4,246,725

2,972,081

-

Amount due from director

28,168

27,746

27,746

27,465

-

Cash & bank balances

329,852

578,279

1,169,275

1,649,133

-

Others

380,071

861,210

1,179,848

-

-

 

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

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

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

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

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

TOTAL CURRENT ASSETS

31,992,130

38,685,150

25,077,928

25,656,342

36,444,147

 

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

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

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

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

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

TOTAL ASSET

45,511,272

52,908,370

38,118,022

39,596,748

50,920,972

 

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

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

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

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

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

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade creditors

2,161,756

7,150,904

541,239

1,704,989

-

Other creditors & accruals

1,884,859

4,514,223

1,135,777

1,566,983

-

Hire purchase & lease creditors

76,460

106,673

99,821

211,391

-

Bank overdraft

6,186,277

4,177,990

3,669,986

3,913,218

-

Short term borrowings/Term loans

209,039

195,907

189,025

171,367

-

Other borrowings

983,275

-

-

1,955,085

-

Bill & acceptances payable

16,152,532

17,597,600

13,447,042

7,417,357

-

Amounts owing to director

744,662

744,662

744,662

827,661

-

Provision for taxation

-

-

-

532,923

-

 

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

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

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

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

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

TOTAL CURRENT LIABILITIES

28,398,860

34,487,959

19,827,552

18,300,974

29,062,814

 

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

3,593,270

4,197,191

5,250,376

7,355,368

7,381,333

 

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

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

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

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

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

TOTAL NET ASSETS

17,112,412

18,420,411

18,290,470

21,295,774

21,858,158

 

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

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

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

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

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

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

6,000,000

6,000,000

6,000,000

6,000,000

6,000,000

 

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

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

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

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

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

TOTAL SHARE CAPITAL

6,000,000

6,000,000

6,000,000

6,000,000

6,000,000

 

 

 

 

 

 

RESERVES

 

 

 

 

 

Retained profit/(loss) carried forward

10,600,961

11,616,896

11,340,267

13,990,473

14,107,164

 

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

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

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

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

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

TOTAL RESERVES

10,600,961

11,616,896

11,340,267

13,990,473

14,107,164

 

 

 

 

 

 

 

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

16,600,961

17,616,896

17,340,267

19,990,473

20,107,164

 

 

 

 

 

 

LONG TERM LIABILITIES

 

 

 

 

 

Long term loans

340,443

556,048

754,063

1,305,301

-

Hire purchase creditors

171,008

247,467

196,140

-

-

 

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

511,451

803,515

950,203

1,305,301

1,750,994

 

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

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

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

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

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

 

17,112,412

18,420,411

18,290,470

21,295,774

21,858,158

 

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

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

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

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

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

 

 

 

FINANCIAL RATIO

 

 

P.P. STEEL SDN. BHD.

 

TYPES OF FUNDS

 

 

 

 

 

Cash

329,852

578,279

1,169,275

1,649,133

-

Net Liquid Funds

<22,008,957>

<21,197,311>

<15,947,753>

<9,681,442>

-

Net Liquid Assets

<11,634,144>

<11,591,629>

<4,497,942>

<5,554,790>

7,381,333

Net Current Assets/(Liabilities)

3,593,270

4,197,191

5,250,376

7,355,368

7,381,333

Net Tangible Assets

17,112,412

18,420,411

18,290,470

21,295,774

21,858,158

Net Monetary Assets

<12,145,595>

<12,395,144>

<5,448,145>

<6,860,091>

5,630,339

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

24,119,034

22,881,685

18,356,077

14,973,719

-

Total Liabilities

28,910,311

35,291,474

20,777,755

19,606,275

30,813,808

Total Assets

45,511,272

52,908,370

38,118,022

39,596,748

50,920,972

Net Assets

17,112,412

18,420,411

18,290,470

21,295,774

21,858,158

Net Assets Backing

16,600,961

17,616,896

17,340,267

19,990,473

20,107,164

Shareholders' Funds

16,600,961

17,616,896

17,340,267

19,990,473

20,107,164

Total Share Capital

6,000,000

6,000,000

6,000,000

6,000,000

6,000,000

Total Reserves

10,600,961

11,616,896

11,340,267

13,990,473

14,107,164

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

0.01

0.02

0.06

0.09

-

Liquid Ratio

0.59

0.66

0.77

0.70

-

Current Ratio

1.13

1.12

1.26

1.40

1.25

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

90

108

68

72

-

Debtors Ratio

66

72

61

45

-

Creditors Ratio

14

62

5

9

-

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

1.45

1.30

1.06

0.75

-

Liabilities Ratio

1.74

2.00

1.20

0.98

1.53

Times Interest Earned Ratio

<0.14>

2.29

<5.52>

1.20

-

Assets Backing Ratio

2.85

3.07

3.05

3.55

3.64

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

<1.06>

1.15

<5.81>

0.22

4.25

Net Profit Margin

<1.64>

0.52

<5.06>

<0.18>

2.78

Return On Net Assets

<0.46>

5.91

<14.08>

4.12

14.74

Return On Capital Employed

<0.34>

4.79

<11.67>

3.45

14.74

Return On Shareholders' Funds/Equity

<6.12>

1.57

<15.28>

<0.58>

10.50

Dividend Pay Out Ratio (Times)

0.00

0.00

0.00

0.00

-

NOTES TO ACCOUNTS

 

 

 

 

 

Contingent Liabilities

0

0

0

0

 



FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.61.41

UK Pound

1

Rs.99.29

Euro

1

Rs.83.68

 

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 (

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.