MIRA INFORM REPORT

 

 

Report Date :

30.04.2014

 

IDENTIFICATION DETAILS

 

Name :

KCC PAINTS SDN. BHD.

 

 

Formerly Known As :

MATCHEM COATING SDN BHD

 

 

Registered Office :

Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara Heights, Level 7, 50490 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2012

 

 

Date of Incorporation :

19.11.1994

 

 

Com. Reg. No.:

323967-T

 

 

Legal Form :

Private Limited Company

 

 

Line of Business :

manufacturer of high performance marine paints, heavy duty protective coatings, architectural/ decorative paints, general industrial paints & specialised coatings

 

 

No of Employees :

50 [2014]

 

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 31, 2014

 

Country Name

Previous Rating

(31.12.2013)

Current Rating

(31.03.2014)

Malaysia

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low Risk

 

A2

Moderate Low Risk

 

B1

Moderate Risk

 

B2

Moderate High Risk

 

C1

High Risk

C2

Very High Risk

 

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.

:

323967-T

COMPANY NAME

:

KCC PAINTS SDN. BHD.

FORMER NAME

:

MATCHEM COATING SDN BHD (16/07/1997)

INCORPORATION DATE

:

19/11/1994

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

MENARA MILENIUM, JALAN DAMANLELA, PUSAT BANDAR DAMANSARA, DAMANSARA HEIGHTS, LEVEL 7, 50490 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

LOT 13, JALAN ANGGERIK MOKARA 31/54, SEKSYEN 31, KOTA KEMUNING, 40460 SHAH ALAM, SELANGOR, MALAYSIA.

TEL.NO.

:

03-51222900

FAX.NO.

:

03-51221900

WEB SITE

:

WWW.KCCPAINT.COM.MY

CONTACT PERSON

:

TAN KIAN HOCK ( MANAGING DIRECTOR )

INDUSTRY CODE

:

20221

PRINCIPAL ACTIVITY

:

MANUFACTURING OF PAINTS

AUTHORISED CAPITAL

:

MYR 5,000,000.00 DIVIDED INTO 
ORDINARY SHARE 5,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 5,000,000.00 DIVIDED INTO 
ORDINARY SHARES 3,750,002 CASH AND 1,249,998 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 64,125,337 [2012]

NET WORTH

:

MYR 34,107,672 [2012]

STAFF STRENGTH

:

50 [2014]

BANKER (S)

:

HONG LEONG BANK BHD
OCBC BANK (MALAYSIA) BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

STRONG

PAYMENT

:

FAir

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

GOOD

INDUSTRY OUTLOOK

:

AVERAGE GROWTH




HISTORY / BACKGROUND

 

The Subject 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 Subject must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the Subject 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 Subject is insolvent. The Subject 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 Subject is principally engaged in the (as a / as an) manufacturing of paints.

 

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

 

The immediate holding company of the Subject is KCC (SINGAPORE) PTE. LTD., a company incorporated in SINGAPORE.

 

The ultimate holding company of the Subject is KCC CORPORATION, a company incorporated in KOREA.

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

15/02/2013

MYR 5,000,000.00

MYR 5,000,000.00

 

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

Name

Address

IC/PP/Loc No

Shareholding

(%)

KCC (SINGAPORE) PTE. LTD.

1, TUAS AVENUE 2, 639441, SINGAPORE.

199202641M

2,550,000.00

51.00

MR. TAN KIAN HOCK +

11,PERSIARAN WANGSA BAIDURI 6, 47500 SUBANG JAYA, SELANGOR, MALAYSIA.

600128-08-5437 5821636

1,078,000.00

21.56

MR. TIE TECK KEE

14 TERAP LANE, 96000 SIBU, SARAWAK, MALAYSIA.

621009-13-6169 K814816

539,000.00

10.78

MR. LOO YEOU CHAI +

345, JALAN SEPAKAT 7, TAMAN UNITED, 58200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

601230-08-5745 6099562

539,000.00

10.78

MR. SOH KIAN LEE +

22, JALAN TK 5/35, TAMAN MAWAR, KM 13, JALAN PUCHONG, 47100 PUCHONG, SELANGOR, MALAYSIA.

560717-01-5855 4992942

208,250.00

4.17

MR. THENG SOO SIONG

11, JALAN SG 8/15, TAMAN SERI GOMBAK, 68100 BATU CAVES, SELANGOR, MALAYSIA.

631113-01-5761 7194729

85,750.00

1.72

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

------

5,000,000.00

100.00

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

=====

+ Also Director

DIRECTORS


DIRECTOR 1

Name Of Subject

:

KIM KYUNGWON

Address

:

BLK 460, CLEMENTI AVE 3, #10-600, 120460, SINGAPORE.

IC / PP No

:

MP4014132

Date of Appointment

:

25/04/2012

 

DIRECTOR 2

Name Of Subject

:

LEE BYUNG JONG

Address

:

7, TANJONG RHU ROAD, #14-04, 436887, SINGAPORE.

IC / PP No

:

M43061531

Date of Appointment

:

25/04/2012

 

DIRECTOR 3

Name Of Subject

:

PARK SANGHYUK

Address

:

37, JURONG EAST AVE 1, #13-04 PARC OASIS, 609775, SINGAPORE.

IC / PP No

:

M37742881

Date of Appointment

:

25/04/2012

 

DIRECTOR 4

Name Of Subject

:

CHUNG MONG JIN

Address

:

799-10, BANGBAE-DONG, SEOCHO-KU SEOUL, SOUTH KOREA.

IC / PP No

:

JR3531055

Nationality

:

KOREAN

Date of Appointment

:

14/07/2003

 

DIRECTOR 5

Name Of Subject

:

MR. SOH KIAN LEE

Address

:

22, JALAN TK 5/35, TAMAN MAWAR, KM 13, JALAN PUCHONG, 47100 PUCHONG, SELANGOR, MALAYSIA.

IC / PP No

:

4992942

New IC No

:

560717-01-5855

Date of Birth

:

17/07/1956

Nationality

:

MALAYSIAN

Date of Appointment

:

24/04/1995

 

DIRECTOR 6

 

Name Of Subject

:

MR. LOO YEOU CHAI

Address

:

345, JALAN SEPAKAT 7, TAMAN UNITED, 58200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

6099562

New IC No

:

601230-08-5745

Date of Birth

:

30/12/1960

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

14/07/2003

 

DIRECTOR 7

 

Name Of Subject

:

MR. TAN KIAN HOCK

Address

:

11,PERSIARAN WANGSA BAIDURI 6, 47500 SUBANG JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

5821636

New IC No

:

600128-08-5437

Date of Birth

:

28/01/1960

Nationality

:

MALAYSIAN

Date of Appointment

:

24/04/1995



MANAGEMENT

 

 

 

1)

Name of Subject

:

TAN KIAN HOCK

Position

:

MANAGING DIRECTOR

 

2)

Name of Subject

:

JOE TAI

Position

:

HUMAN RESOURCE DIRECTOR

 

3)

Name of Subject

:

LIM LEE HOOI

Position

:

HUMAN RESOURCE MANAGER

 

 

 

AUDITOR

 

Auditor

:

KPMG

Auditor' Address

:

KPMG TOWER, 8 FIRST AVENUE, BANDAR UTAMA, LEVEL 10, 47800 PETALING JAYA, SELANGOR, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. CHUA SIEW CHUAN

IC / PP No

:

5461293

New IC No

:

580826-05-5408

Address

:

6, JALAN SS14/8E, PETALING JAYA, 47500 SUBANG JAYA, SELANGOR, MALAYSIA.

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

HONG LEONG BANK BHD

 

2)

Name

:

OCBC BANK (MALAYSIA) BHD

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

26/03/1998

N/A

HONG LEONG BANK BERHAD

MYR 250,000.00

Unsatisfied

2

10/06/1999

N/A

HONG LEONG BANK BERHAD

MYR 600,000.00

Unsatisfied

3

15/12/2000

N/A

HONG LEONG BANK BERHAD

MYR 2,500,000.00

Unsatisfied

4

23/05/2002

OPEN CHARGE

HONG LEONG BANK BERHAD

-

Unsatisfied

5

31/03/2003

N/A

HONG LEONG BANK BERHAD

-

Unsatisfied

6

03/11/2004

N/A

EON BANK BERHAD

MYR 2,000,000.00

Satisfied

7

03/11/2004

N/A

EON BANK BERHAD

MYR 3,000,000.00

Satisfied

8

28/12/2006

N/A

OCBC BANK (MALAYSIA) BHD

MYR 1,785,000.00

Unsatisfied

 

 

LEGAL CHECK AGAINST SUBJECT


* A check has been conducted in our databank against the Subject 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 SUBJECT


* We have checked through the Subject 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 Subject refused to provide any name of trade/service supplier and we are unable to conduct any trade enquiry. However, from financial historical data we conclude that :

 

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

]

Average 61-90 Days

[

]

Fair 91-120 Days

[

X

]

Poor >120 Days

[

]



CLIENTELE

 

Local

:

YES

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Export Market

:

SINGAPORE

THAILAND

Credit Term

:

30 DAYS

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)

 

OPERATIONS

 

Products manufactured

:

PAINTS

Product Brand Name

:

KCC

Certification of Products

:

1 ) MS 164 : 1991

Member(s) / Affiliate(s)

:

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

CHEMICAL INDUSTRIES COUNCIL OF MALAYSIA (CICM)

Ownership of premises

:

OWNED

Factory Size

:

7,000 SQ.FT

Production Capacity

:

APPROXIMATELY 100,000 LITERS PER MONTH

 

Total Number of Employees:

 

YEAR

2014

2013

2012

2010

2009

GROUP

N/A

N/A

N/A

N/A

N/A

COMPANY

50

50

50

48

50

 

Branch

:

NO

 

Other Information:

The Subject is principally engaged in the (as a / as an) manufacturing of paints. 

The Subject is fully engaged in the development, manufacturing, distribution and marketing of a wide range of high performance architectural paint. 

The Subject manufactures a wide range of high performance marine paints, heavy duty protective coatings, architectural/ decorative paints, general industrial paints & specialised coatings

The Subject's paints are normally used for exterior wall, interior wall, ceiling, metal (mild steel),galvanized/ stainless steel surface, timber surface, wood varnish and others.

The Subject's offers its paints in various colour concept as follows:

1) Primary.

2) Secondary.

3) Tertiary.

Some of the Subject's products include roof care, medisilk 4-IN-1, timber stain, koreton matt,polyetch 100, koramel undercoat, korepox 509, roadline paint, koresil 401, koresil 400,zinc chromate primer, red oxide primer, korevon lite, koramel, korevon, korevon silk and etc.

We were informed that the Subject has been involved in various painting projects mainly for governments.

The Subject is equipped with both automated and semi-automated machineries at the production site. 

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-51222900

Match

:

N/A

Address Provided by Client

:

NO 1, JALAN ANGGERIK MOKARA 31/54,SEKSYEN31, KOTA KEMUNING, 40460 SHAH ALAM, D.E.

Current Address

:

LOT 13, JALAN ANGGERIK MOKARA 31/54, SEKSYEN 31, KOTA KEMUNING, 40460 SHAH ALAM, SELANGOR, MALAYSIA.

Match

:

NO

Latest Financial Accounts

:

YES

 

Other Investigations


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

The address provided does not belong to the Subject.

FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Erratic

[

2008 - 2012

]

Profit/(Loss) Before Tax

:

Increased

[

2008 - 2012

]

Return on Shareholder Funds

:

Acceptable

[

21.62%

]

Return on Net Assets

:

Acceptable

[

27.87%

]

The fluctuating turnover reflects the fierce competition among the existing and new market players.The higher profit could be attributed to the increase in turnover. The Subject's management had generated acceptable return for its shareholders using its assets.

Working Capital Control

Stock Ratio

:

Unfavourable

[

81 Days

]

Debtor Ratio

:

Unfavourable

[

140 Days

]

Creditors Ratio

:

Unfavourable

[

87 Days

]

The Subject could be incurring higher holding cost. As its capital was tied up in stocks, it could face liquidity problems. The Subject's debtors ratio was high. The Subject should tighten its credit control and improve its collection period. The unfavourable creditors' ratio could be due to the Subject taking advantage of the credit granted by its suppliers. However this may affect the goodwill between the Subject and its suppliers and the Subject may inadvertently have to pay more for its future supplies.

Liquidity

Liquid Ratio

:

Favourable

[

1.40 Times

]

Current Ratio

:

Favourable

[

2.08 Times

]

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

Solvency

Interest Cover

:

Nil

[

0.00 Times

]

Gearing Ratio

:

Favourable

[

0.00 Times

]

The Subject's interest cover was nil as it did not pay any interest during the year. The Subject had no gearing and hence it had virtually no financial risk. The Subject was financed by its shareholders' funds and internally generated fund. During the economic downturn, the Subject, having a zero gearing, will be able to compete better than those which are highly geared in the same industry.

Overall Assessment :

Although the turnover was erratic, the Subject had maintained a steady growth in its profit. This indicate the management's efficiency in controlling its costs and profitability. The Subject was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the Subject should be able to repay its short term obligations. The Subject did not make any interest payment during the year. The Subject was dependent on its shareholders' funds to finance its business needs. The Subject was a zero gearing company, it was solely dependant on its shareholders to provide funds to finance its business. The Subject has good chance of getting loans, if the needs arises.

Overall financial condition of the Subject : STRONG

 

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

20221 : Manufacture of paints, varnishes and similar coatings ink and mastics

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 1994, the Subject is a Private Limited company, focusing on manufacturing of paints. Its impressive track record shows that the Subject has been able to keep its business going despite the passing of two decades of highs and lows in the local economy. Having strong support from its holding company has enabled the Subject to remain competitive despite the challenging business environment. The capital standing of the Subject is fair. With an adequate share capital, the Subject has the potential of expanding its business in future. 

Over the years, the Subject has penetrated into both the local and overseas market. The Subject has positioned itself in the global market and is competing in the industry. Its stable clientele base will enable the Subject to further enhance its business in the near term. The Subject is operating on a medium scale and it has approximately 50 employees in its business operations. Overall, we regard that the Subject's management capability is average. This indicates that the Subject has greater potential to improve its business performance and raising income for the Subject. 

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. Return on shareholders' funds of the Subject was at an acceptable range which indicated that the management was efficient in utilising its funds to generate income. The Subject 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 Subject 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 34,107,672, the Subject should be able to maintain its business in the near terms. 

Having a strong assets backing, the Subject possesses latent assets as collateral for further financial extension. Hence, it has good chance of getting loans if the needs arises. The Subject'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 Subject has a good control over its resources. 

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

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

 

 

PROFIT AND LOSS ACCOUNT

 

 

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

KCC PAINTS SDN. BHD.

 

Financial Year End

2012-12-31

2011-12-31

2010-12-31

2009-12-31

2008-12-31

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

64,125,337

49,631,115

50,034,951

47,106,808

39,812,378

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

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

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

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

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

Total Turnover

64,125,337

49,631,115

50,034,951

47,106,808

39,812,378

Costs of Goods Sold

(49,120,671)

(42,299,678)

-

-

-

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

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

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

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

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

Gross Profit

15,004,666

7,331,437

-

-

-

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

9,602,459

3,944,223

4,120,811

6,955,348

4,699,797

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

9,602,459

3,944,223

4,120,811

6,955,348

4,699,797

Taxation

(2,228,701)

(1,031,050)

(864,053)

(1,825,348)

(1,111,602)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

7,373,758

2,913,173

3,256,758

5,130,000

3,588,195

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

21,733,914

18,820,741

15,563,983

10,433,983

6,845,788

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

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

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

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

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

As restated

21,733,914

18,820,741

15,563,983

10,433,983

6,845,788

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

29,107,672

21,733,914

18,820,741

15,563,983

10,433,983

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

29,107,672

21,733,914

18,820,741

15,563,983

10,433,983

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Bank overdraft

-

-

48

547

158

Bankers' acceptance

-

16,263

-

-

-

Term loan / Borrowing

-

-

9,555

11,002

119,766

Others

-

-

63,735

54,459

62,250

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

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

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

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

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

-

16,263

73,338

66,008

182,174

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

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

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

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

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

 

 

 

BALANCE SHEET

 

KCC PAINTS SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

10,666,055

10,415,140

10,936,029

11,244,656

10,198,348

Others

1,096,729

704,550

908,238

953,973

-

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

1,096,729

704,550

908,238

953,973

-

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

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

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

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

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

TOTAL LONG TERM ASSETS

11,762,784

11,119,690

11,844,267

12,198,629

10,198,348

Stocks

14,259,693

17,608,954

18,226,166

13,828,635

11,140,518

Trade debtors

24,664,891

10,081,394

5,108,303

3,722,024

924,095

Other debtors, deposits & prepayments

115,841

100,576

104,302

117,686

124,546

Amount due from holding company

-

-

-

20,238

34,463

Amount due from related companies

59,000

61,364

3,417,691

3,870,611

4,116,848

Cash & bank balances

4,697,226

2,824,523

829,344

1,341,471

1,036,431

Others

-

33,900

-

-

-

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

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

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

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

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

TOTAL CURRENT ASSETS

43,796,651

30,710,711

27,685,806

22,900,665

17,376,901

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

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

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

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

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

TOTAL ASSET

55,559,435

41,830,401

39,530,073

35,099,294

27,575,249

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

11,667,861

6,892,691

7,440,391

6,661,731

5,294,540

Other creditors & accruals

4,950,387

2,918,416

3,020,943

3,323,201

2,055,812

Short term borrowings/Term loans

-

-

-

-

540,000

Bill & acceptances payable

-

-

-

2,336,000

1,928,000

Amounts owing to holding company

-

-

7,610

-

59,598

Amounts owing to related companies

3,178,184

5,000,000

5,009,958

1,050,689

-

Provision for taxation

1,307,659

-

-

814,454

495,215

Other liabilities

-

-

-

118,806

-

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

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

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

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

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

TOTAL CURRENT LIABILITIES

21,104,091

14,811,107

15,478,902

14,304,881

10,373,165

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

22,692,560

15,899,604

12,206,904

8,595,784

7,003,736

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

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

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

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

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

TOTAL NET ASSETS

34,455,344

27,019,294

24,051,171

20,794,413

17,202,084

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

5,000,000

5,000,000

5,000,000

5,000,000

5,000,000

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

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

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

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

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

TOTAL SHARE CAPITAL

5,000,000

5,000,000

5,000,000

5,000,000

5,000,000

Retained profit/(loss) carried forward

29,107,672

21,733,914

18,820,741

15,563,983

10,433,983

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

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

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

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

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

TOTAL RESERVES

29,107,672

21,733,914

18,820,741

15,563,983

10,433,983

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

34,107,672

26,733,914

23,820,741

20,563,983

15,433,983

Long term loans

-

-

-

-

1,679,011

Deferred taxation

347,672

285,380

230,430

230,430

89,090

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

347,672

285,380

230,430

230,430

1,768,101

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

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

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

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

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

34,455,344

27,019,294

24,051,171

20,794,413

17,202,084

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

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

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

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

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

 

 

 

FINANCIAL RATIO

 

 

KCC PAINTS SDN. BHD.

 

TYPES OF FUNDS

Cash

4,697,226

2,824,523

829,344

1,341,471

1,036,431

Net Liquid Funds

4,697,226

2,824,523

829,344

(994,529)

(891,569)

Net Liquid Assets

8,432,867

(1,709,350)

(6,019,262)

(5,232,851)

(4,136,782)

Net Current Assets/(Liabilities)

22,692,560

15,899,604

12,206,904

8,595,784

7,003,736

Net Tangible Assets

34,455,344

27,019,294

24,051,171

20,794,413

17,202,084

Net Monetary Assets

8,085,195

(1,994,730)

(6,249,692)

(5,463,281)

(5,904,883)

BALANCE SHEET ITEMS

Total Borrowings

0

0

0

2,336,000

4,147,011

Total Liabilities

21,451,763

15,096,487

15,709,332

14,535,311

12,141,266

Total Assets

55,559,435

41,830,401

39,530,073

35,099,294

27,575,249

Net Assets

34,455,344

27,019,294

24,051,171

20,794,413

17,202,084

Net Assets Backing

34,107,672

26,733,914

23,820,741

20,563,983

15,433,983

Shareholders' Funds

34,107,672

26,733,914

23,820,741

20,563,983

15,433,983

Total Share Capital

5,000,000

5,000,000

5,000,000

5,000,000

5,000,000

Total Reserves

29,107,672

21,733,914

18,820,741

15,563,983

10,433,983

LIQUIDITY (Times)

Cash Ratio

0.22

0.19

0.05

0.09

0.10

Liquid Ratio

1.40

0.88

0.61

0.63

0.60

Current Ratio

2.08

2.07

1.79

1.60

1.68

WORKING CAPITAL CONTROL (Days)

Stock Ratio

81

130

133

107

102

Debtors Ratio

140

74

37

29

8

Creditors Ratio

87

59

54

52

49

SOLVENCY RATIOS (Times)

Gearing Ratio

0.00

0.00

0.00

0.11

0.27

Liabilities Ratio

0.63

0.56

0.66

0.71

0.79

Times Interest Earned Ratio

0.00

243.53

57.19

106.37

26.80

Assets Backing Ratio

6.89

5.40

4.81

4.16

3.44

PERFORMANCE RATIO (%)

Operating Profit Margin

14.97

7.95

8.24

14.77

11.80

Net Profit Margin

11.50

5.87

6.51

10.89

9.01

Return On Net Assets

27.87

14.66

17.44

33.77

28.38

Return On Capital Employed

27.87

14.66

17.44

33.77

28.38

Return On Shareholders' Funds/Equity

21.62

10.90

13.67

24.95

23.25

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





 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.60.52

UK Pound

1

Rs.101.77

Euro

1

Rs.83.92

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

MNL

 

RATING EXPLANATIONS

 

RATING

STATUS

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

Credit not recommended

--

NB

                                       New Business

--

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                  Payment record (10%)

Credit history (10%)                   Market trend (10%)                                Operational size (10%)

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.