MIRA INFORM REPORT

 

 

Report Date :

01.02.2014

 

IDENTIFICATION DETAILS

 

Name :

SHREYA GEMS SDN. BHD.

 

 

Registered Office :

53A, 1st Floor, Lorong Perda Selatan 1, Bandar Perda, 14000 Bukit Mertajam, Pulau Pinang,

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2011

 

 

Date of Incorporation :

13.11.2002

 

 

Com. Reg. No.:

598743-W

 

 

Legal Form :

Private Limited (Limited By Share)

 

 

Line of Business :

Subject is engaged in Selling diamonds, precious stones and semi precious stones

 

 

No. of Employees :

5 [2014]

 

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 but correct

Litigation :

Clear

 

NOTES :

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

 

 

ECGC Country Risk Classification List – September 30, 2013

 

Country Name

Previous Rating

(30.06.2013)

Current Rating

(30.09.2013)

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.

:

598743-W

COMPANY NAME

:

SHREYA GEMS SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

13/11/2002

 

 

 

 

 

 

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED (LIMITED BY SHARE)

LISTED STATUS

:

NO

 

 

 

 

 

 

REGISTERED ADDRESS

:

53A, 1ST FLOOR, LORONG PERDA SELATAN 1, BANDAR PERDA, 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.

BUSINESS ADDRESS

:

75, LEBUH AH QUEE, 10200 GEORGE TOWN, PULAU PINANG, MALAYSIA.

TEL.NO.

:

04-2624013

FAX.NO.

:

04-2624013

CONTACT PERSON

:

PURAV ASHOK SHAH ( DIRECTOR )

 

 

 

INDUSTRY CODE

:

47733

PRINCIPAL ACTIVITY

:

SELLING DIAMONDS, PRECIOUS STONES AND SEMI PRECIOUS STONES

AUTHORISED CAPITAL

:

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

ISSUED AND PAID UP CAPITAL

:

MYR 1,000,000.00 DIVIDED INTO
ORDINARY SHARES 150,000 CASH AND 850,000 OTHERWISE OF MYR 1.00 EACH.

 

 

 

SALES

:

MYR 5,724,615 [2011]

NET WORTH

:

MYR 1,136,656 [2011]

 

 

 

STAFF STRENGTH

:

5 [2014]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

PAYMENT

:

N/A

MANAGEMENT CAPABILITY

:

AVERAGE

 

 

 

COMMERCIAL RISK

:

MODERATE

CURRENCY EXPOSURE

:

HIGH

GENERAL REPUTATION

:

SATISFACTORY

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) selling diamonds, precious stones and semi precious stones.

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

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

15/02/2013

MYR 1,000,000.00

MYR 1,000,000.00

 

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

 

Name

Address

IC/PP/Loc No

Shareholding

(%)

DATO' HJ AYOB BIN AZIZ +

2204, JALAN PERMATA 10, TAMAN PERMATA, ULU KLANG, 53300 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

531102-02-5325

699,999.00

70.00

MR. PURAV ASHOK SHAH +

MIDLANDS CONDO, UNIT 7, 21ST FLOOR, OFF ADVENTISTS HOSPITAL, 10350 PULAU PINANG, PULAU PINANG, MALAYSIA.

A9813738

300,000.00

30.00

MR. MOHD FADZIL BIN AHMAD +

23H, TAMAN SETIABUDI, TIKAM BATU, 08600 SUNGAI PETANI, KEDAH, MALAYSIA.

570330-07-6257

1.00

0.00

 

 

 

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

------

 

 

 

1,000,000.00

100.00

 

 

 

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

=====

+ Also Director

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

NALI PURAV SHAH

Address

:

3A-17-7, TANJUNG PARK, PERSIARAN LENGGUAS SATU, 10470 PULAU PINANG, PULAU PINANG, MALAYSIA.

IC / PP No

:

F1720455

 

 

 

 

 

 

 

 

 

Nationality

:

INDIAN

Date of Appointment

:

24/06/2004

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 2

 

Name Of Subject

:

MR. NIRALI NATVERLAL SHAH

Address

:

MIDLANDS CONDO, UNIT 7, 21ST FLOOR, OFF ADVENTISTS HOSPITAL, 10350 PULAU PINANG, PULAU PINANG, MALAYSIA.

IC / PP No

:

U073438

 

 

 

 

 

 

 

 

 

 

 

 

Date of Appointment

:

24/06/2004

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 3

 

Name Of Subject

:

MR. MOHD FADZIL BIN AHMAD

Address

:

23H, TAMAN SETIABUDI, TIKAM BATU, 08600 SUNGAI PETANI, KEDAH, MALAYSIA.

 

 

 

New IC No

:

570330-07-6257

Date of Birth

:

30/03/1957

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

13/11/2002

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 4

 

Name Of Subject

:

MR. PURAV ASHOK SHAH

Address

:

MIDLANDS CONDO, UNIT 7, 21ST FLOOR, OFF ADVENTISTS HOSPITAL, 10350 PULAU PINANG, PULAU PINANG, MALAYSIA.

IC / PP No

:

A9813738

 

 

 

 

 

 

 

 

 

 

 

 

Date of Appointment

:

18/11/2002

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 5

 

Name Of Subject

:

DATO' HJ AYOB BIN AZIZ

Address

:

2204, JALAN PERMATA 10, TAMAN PERMATA, ULU KLANG, 53300 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

New IC No

:

531102-02-5325

Date of Birth

:

02/11/1953

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

13/11/2002

 

 

 



MANAGEMENT

 

 

 

1)

Name of Subject

:

PURAV ASHOK SHAH

 

Position

:

DIRECTOR

 

 

 

 

 

AUDITOR

 

Auditor

:

RAGENDRAN & CO

Auditor' Address

:

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

 

 

 

 

 

 

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. HENG PEI CHIEN

 

 

 

 

 

New IC No

:

840910-07-5178

 

Address

:

2578, JALAN KILANG UBI, ALMA, 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

 

 

 

 

 

 

 

 

 

 

 

ENCUMBRANCE (S)


No encumbrance was found in our databank at the time of investigation.

 

 

LEGAL CHECK AGAINST SUBJECT


* A check has been conducted in our databank againt 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

:

NO

Percentage

:

0%

Overseas

:

YES

Percentage

:

100%

Import Countries

:

INDIA



CLIENTELE

 

Local

:

YES

Percentage

:

100%

Domestic Markets

:

MALAYSIA

Overseas

:

NO

 

 

 

 

 

 

 

 

 

Credit Term

:

AS AGREED

 

 

 

 

 

 

Payment Mode

:

CASH
CHEQUES

Type of Customer

:

END USERS,DEALERS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATIONS

 

Goods Traded

:

PRECIOUS STONES & SEMI PRECIOUS STONES

 

 

 

 

Competitor(s)

:

LUXURYCONCEPTS WATCHES AND JEWELLERY SDN BHD
POH KONG JEWELLERS SDN BHD
SINCERE WATCH SDN BHD
TOMEI CONSOLIDATED BHD
UPTOWN ALLIANCE (M) SDN BHD

 

 

 

 

 

 

 

 

Ownership of premises

:

LEASED/RENTED

 

 

Total Number of Employees:

 

YEAR

2014

2011

2010

2009

 

 

 

 

 

GROUP

N/A

N/A

N/A

N/A

 

 

 

 

 

COMPANY

5

5

5

5

 

 

 

 

 

 

Branch

:

NO

 

Other Information:


The Subject is principally engaged in the (as a / as an) selling diamonds, precious stones and semi precious stones.

The Subject sells imported stones especially from India.

The Subject sells variety of lucky and precious stones.

The Subject sells in both loose and large quantities.


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

60164216081

Current Telephone Number

:

04-2624013

Match

:

NO

 

 

 

Address Provided by Client

:

BLOCK 2 GEMS, PANTAI PANORAMA CONDOMINIUS JALAN 112H, OFF JALAN KERINCHI 59200 KAUALA LUMPUR

Current Address

:

75, LEBUH AH QUEE, 10200 GEORGE TOWN, PULAU PINANG, MALAYSIA.

Match

:

NO

 

 

 

Latest Financial Accounts

:

NO

 

Other Investigations


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

The Subject refused to verify the address provided.


FINANCIAL ANALYSIS

 

 

Profitability

 

 

 

 

 

 

Turnover

:

Erratic

[

2007 - 2011

]

 

Profit/(Loss) Before Tax

:

Increased

[

2007 - 2011

]

 

Return on Shareholder Funds

:

Unfavourable

[

1.90%

]

 

Return on Net Assets

:

Unfavourable

[

2.18%

]

 

 

 

 

 

 

 

 

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 unfavourable return on shareholders' funds could indicate that the Subject was inefficient in utilising its assets to generate returns.

 

 

 

 

 

 

 

Liquidity

 

 

 

 

 

 

Current Ratio

:

Favourable

[

1.85 Times

]

 

 

 

 

 

 

 

 

The Subject was in good liquidity position with its current  liabilities  well covered by its current assets. With its net current assets, the Subject should be able to repay its short term obligations.

 

 

 

 

 

 

 

Solvency

 

 

 

 

 

 

Liability Ratio

:

Unfavourable

[

1.17 Times

]

 

 

 

 

 

 

 

 

The Subject has high liabilities ratio and it may face financial difficulties if no additional capital is injected.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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's liabilities 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 Subject : FAIR

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2009

2010

2011

2012*

2013**

 

 

 

 

 

 

Population ( Million)

28.13

28.35

28.70

29.30

29.80

Gross Domestic Products ( % )

(0.5)

7.2

5.1

5.6

5.3

Domestic Demand ( % )

2.9

6.3

8.2

9.4

5.6

Private Expenditure ( % )

(2.7)

8.1

8.2

8.0

7.4

Consumption ( % )

0.7

6.7

7.1

1.0

5.7

Investment ( % )

(17.2)

17.7

12.2

11.7

13.3

Public Expenditure ( % )

5.2

3.8

8.4

13.3

1.2

Consumption ( % )

3.1

0.2

16.1

11.3

(1.2)

Investment ( % )

8.0

2.8

(0.3)

15.9

4.2

 

 

 

 

 

 

Balance of Trade ( MYR Million )

89,650

118,356

116,058

106,300

110,700

Government Finance ( MYR Million )

(28,450)

(40,482)

(45,511)

(42,297)

(39,993)

Government Finance to GDP / Fiscal Deficit ( % )

(4.8)

(5.6)

(5.4)

(4.5)

(4.0)

Inflation ( % Change in Composite CPI)

(5.2)

5.1

3.1

1.6

2.5

Unemployment Rate

4.5

3.9

3.3

3.2

3.0

 

 

 

 

 

 

Net International Reserves ( MYR Billion )

331

329

415

427

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

2.87

2.20

3.50

2.20

-

Average 3 Months of Non-performing Loans ( % )

11.08

15.30

14.80

14.70

-

Average Base Lending Rate ( % )

5.53

6.30

6.60

6.53

-

Business Loans Disbursed( % )

10.5

14.7

15.3

32.2

-

Foreign Investment ( MYR Million )

22,156.8

22,517.9

23,546.1

26,230.4

-

Consumer Loans ( % )

-

-

-

-

-

 

 

 

 

 

 

Registration of New Companies ( No. )

41,578

44,148

45,455

45,441

-

Registration of New Companies ( % )

(0.1)

6.2

3.0

(0.0)

-

Liquidation of Companies ( No. )

39,075

25,585

132,476

-

-

Liquidation of Companies ( % )

39.6

(34.5)

417.8

-

-

 

 

 

 

 

 

Registration of New Business ( No. )

312,581

271,414

284,598

324,761

-

Registration of New Business ( % )

-

-

-

-

-

Business Dissolved ( No. )

19,345

19,738

20,121

-

-

Business Dissolved ( % )

2.4

2.0

1.9

-

-

 

 

 

 

 

 

Sales of New Passenger Cars (' 000 Unit )

486.3

543.6

535.1

552.2

-

Cellular Phone Subscribers ( Million )

30.1

32.8

35.3

38.5

-

Tourist Arrival ( Million Persons )

23.6

24.6

24.7

25.0

-

Hotel Occupancy Rate ( % )

58.0

63.0

60.6

62.4

-

 

 

 

 

 

 

Credit Cards Spending ( % )

12.8

14.1

15.6

12.6

-

Bad Cheque Offenders (No.)

36,667

33,568

32,627

26,982

-

Individual Bankruptcy ( No.)

16,228

18,119

19,167

19,575

-

Individual Bankruptcy ( % )

16.7

11.7

5.8

2.1

-

 

 

 

 

 

 



INDUSTRIES ( % of Growth ):

2009

2010

2011

2012*

2013**

 

 

 

 

 

 

Agriculture

0.4

2.1

5.9

0.6

2.4

Palm Oil

(1.1)

(3.4)

10.8

(2.8)

-

Rubber

(19.8)

9.9

6.1

(0.6)

-

Forestry & Logging

(5.9)

(3.3)

(7.6)

(2.2)

-

Fishing

5.5

5.6

2.1

(0.7)

-

Other Agriculture

9.0

7.9

7.1

6.4

-

Industry Non-Performing Loans ( MYR Million )

413.7

508.4

634.1

-

-

% of Industry Non-Performing Loans

1.3

2.1

3.2

-

-

 

 

 

 

 

 

Mining

(3.8)

0.2

(5.7)

1.5

2.7

Oil & Gas

2.1

0.5

(1.7)

-

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

44.2

49.7

46.5

-

-

% of Industry Non-performing Loans

0.1

0.1

0.1

-

-

 

 

 

 

 

 

Manufacturing #

(9.4)

11.4

4.7

4.2

4.9

Exported-oriented Industries

(19.0)

12.1

2.8

4.1

-

Electrical & Electronics

(30.3)

28.4

(4.9)

1.6

-

Rubber Products

(10.1)

25.3

15.4

3.6

-

Wood Products

(24.1)

20.1

(4.9)

4.6

-

Textiles & Apparel

(19.5)

(0.4)

14.8

(7.1)

-

Domestic-oriented Industries

(9.8)

16.3

6.5

8.6

-

Food, Beverages & Tobacco

0.2

3.0

4.2

-

-

Chemical & Chemical Products

(7.7)

16.2

5.5

9.9

-

Plastic Products

(9.1)

2.4

3.8

-

-

Iron & Steel

(32.7)

29.3

2.4

-

-

Fabricated Metal Products

(2.5)

14.9

25.2

-

-

Non-metallic Mineral

(15.5)

20.2

27.1

6.6

-

Transport Equipment

(13.5)

36.5

(10.4)

13.7

-

Paper & Paper Products

(5.0)

18.7

14.8

(7.8)

-

Crude Oil Refineries

0.2

(11.4)

9.3

-

-

Industry Non-Performing Loans ( MYR Million )

6,007.3

6,217.5

6,537.2

-

-

% of Industry Non-Performing Loans

18.3

23.8

25.7

-

-

 

 

 

 

 

 

Construction

5.8

5.1

4.4

15.5

11.2

Industry Non-Performing Loans ( MYR Million )

3,241.8

4,038.5

3,856.9

-

-

% of Industry Non-Performing Loans

9.9

10.7

10.2

-

-

 

 

 

 

 

 

Services

2.6

6.5

6.4

5.5

5.6

Electric, Gas & Water

0.4

8.5

5.6

4.8

-

Transport, Storage & Communication

1.6

7.7

6.5

7.3

-

Wholesale, Retail, Hotel & Restaurant

2.8

4.7

5.2

6.9

-

Finance, Insurance & Real Estate

3.8

6.1

6.3

6.5

-

Government Services

2.0

6.7

7.6

5.6

-

Other Services

4.4

4.2

5.4

5.7

-

Industry Non-Performing Loans ( MYR Million )

6,631.3

7,384.6

6,825.2

-

-

% of Industry Non-Performing Loans

20.2

25.7

23.4

-

-

 

 

 

 

 

 

 

 

 

 

 

 

* Estimate / Preliminary

 

 

 

 

 

** Forecast

 

 

 

 

 



INDUSTRY ANALYSIS

 

MSIC CODE

47733 : Retail sale of jewellery

 

 

INDUSTRY :

TRADING

 

 

 

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

 

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

 

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

 

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

 

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

 

 

OVERALL INDUSTRY OUTLOOK : Average Growth



CREDIT RISK EVALUATION & RECOMMENDATION

 


Incorporated in 2002, the Subject is a Private Limited company, focusing on selling diamonds, precious stones and semi precious stones. Having been in the industry for over a decade, the Subject has achieved a certain market share and has built up a satisfactory reputation in the market. It should have received supports from its regular customers. The capital standing of the Subject is fair. With an adequate share capital, the Subject has the potential of expanding its business in future.

Over the years, the Subject should have build up its clientele base and received supports from its regular customers. Investigation revealed that the Subject's interest lies mostly in the local market. Thus, any adverse changes to the local economy might have a negative impact on the Subject's business performance. the Subject's business operation is supported by 5 employees. 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. The Subject has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. The Subject has high liabilities ratio and it may face financial difficulties if no additional capital is injected. However, 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. Given a positive net worth standing at MYR 1,136,656, the Subject should be able to maintain its business in the near terms.

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

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.

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

 

 

 

PROFIT AND LOSS ACCOUNT

 

 

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

SHREYA GEMS SDN. BHD.

 

Financial Year End

2011-12-31

2010-12-31

2009-12-31

2008-12-31

2007-12-31

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

SUMMARY

SUMMARY

SUMMARY

SUMMARY

FULL

Currency

MYR

MYR

MYR

MYR

MYR

 

 

 

 

 

 

TURNOVER

5,724,615

4,208,015

4,243,856

3,505,102

1,518,290

 

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

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

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

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

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

Total Turnover

5,724,615

4,208,015

4,243,856

3,505,102

1,518,290

 

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

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

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

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

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

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

24,826

15,640

55,765

42,384

15,887

 

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

24,826

15,640

55,765

42,384

15,887

Taxation

(3,199)

(893)

(12,293)

(11,862)

(5,517)

 

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

21,627

14,747

43,472

30,522

10,370

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

113,394

91,561

48,089

17,567

7,197

 

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

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

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

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

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

As restated

113,394

91,561

48,089

17,567

7,197

 

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

135,021

106,308

91,561

48,089

17,567

TRANSFER TO RESERVES - General

1,524

7,086

-

-

-

DIVIDENDS - Ordinary (paid & proposed)

111

-

-

-

-

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

136,656

113,394

91,561

48,089

17,567

 

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

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

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

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

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

 

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Hire purchase

-

-

-

-

1,867

 

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

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

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

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

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

 

-

-

-

-

1,867

 

 

 

 

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

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

 

 

 

BALANCE SHEET

 

 

SHREYA GEMS SDN. BHD.

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

8,966

9,847

13,897

34,561

50,704

 

 

 

 

 

 

LONG TERM INVESTMENTS/OTHER ASSETS

 

 

 

 

 

Deferred assets

-

-

-

-

676

 

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

-

-

-

-

676

 

 

 

 

 

 

 

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

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

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

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

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

TOTAL LONG TERM ASSETS

8,966

9,847

13,897

34,561

51,380

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Stocks

-

-

-

-

2,456,361

Trade debtors

-

-

-

-

1,861,633

Other debtors, deposits & prepayments

-

-

-

-

332,524

Cash & bank balances

-

-

-

-

6,133

 

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

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

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

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

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

TOTAL CURRENT ASSETS

2,462,384

2,854,890

3,981,080

3,038,764

4,656,651

 

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

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

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

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

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

TOTAL ASSET

2,471,350

2,864,737

3,994,977

3,073,325

4,708,031

 

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

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

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

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

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

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade creditors

-

-

-

-

709,295

Other creditors & accruals

-

-

-

-

3,071,313

Hire purchase & lease creditors

-

-

-

-

12,307

Amounts owing to director

-

-

-

-

525,315

Provision for taxation

-

-

-

-

2,621

 

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

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

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

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

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

TOTAL CURRENT LIABILITIES

1,334,515

1,751,343

2,898,033

2,668,544

4,320,851

 

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

1,127,869

1,103,547

1,083,047

370,220

335,800

 

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

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

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

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

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

TOTAL NET ASSETS

1,136,835

1,113,394

1,096,944

404,781

387,180

 

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

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

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

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

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

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

1,000,000

1,000,000

1,000,000

350,002

350,002

 

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

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

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

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

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

TOTAL SHARE CAPITAL

1,000,000

1,000,000

1,000,000

350,002

350,002

 

 

 

 

 

 

RESERVES

 

 

 

 

 

Retained profit/(loss) carried forward

136,656

113,394

91,561

48,089

17,567

 

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

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

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

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

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

TOTAL RESERVES

136,656

113,394

91,561

48,089

17,567

 

 

 

 

 

 

 

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

1,136,656

1,113,394

1,091,561

398,091

367,569

 

 

 

 

 

 

LONG TERM LIABILITIES

 

 

 

 

 

Hire purchase creditors

-

-

-

-

19,611

 

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

179

-

5,383

6,690

19,611

 

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

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

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

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

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

 

1,136,835

1,113,394

1,096,944

404,781

387,180

 

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

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

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

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

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

 

 

 

 

 

 

 

 

 

FINANCIAL RATIO

 

 

SHREYA GEMS SDN. BHD.

 

TYPES OF FUNDS

 

 

 

 

 

Cash

-

-

-

-

6,133

Net Liquid Funds

-

-

-

-

6,133

Net Liquid Assets

1,127,869

1,103,547

1,083,047

370,220

(2,120,561)

Net Current Assets/(Liabilities)

1,127,869

1,103,547

1,083,047

370,220

335,800

Net Tangible Assets

1,136,835

1,113,394

1,096,944

404,781

387,180

Net Monetary Assets

1,127,690

1,103,547

1,077,664

363,530

(2,140,172)

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

-

-

-

-

31,918

Total Liabilities

1,334,694

1,751,343

2,903,416

2,675,234

4,340,462

Total Assets

2,471,350

2,864,737

3,994,977

3,073,325

4,708,031

Net Assets

1,136,835

1,113,394

1,096,944

404,781

387,180

Net Assets Backing

1,136,656

1,113,394

1,091,561

398,091

367,569

Shareholders' Funds

1,136,656

1,113,394

1,091,561

398,091

367,569

Total Share Capital

1,000,000

1,000,000

1,000,000

350,002

350,002

Total Reserves

136,656

113,394

91,561

48,089

17,567

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

-

-

-

-

0.00

Liquid Ratio

-

-

-

-

0.51

Current Ratio

1.85

1.63

1.37

1.14

1.08

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

-

-

-

-

591

Debtors Ratio

-

-

-

-

448

Creditors Ratio

-

-

-

-

171

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

-

-

-

-

0.09

Liabilities Ratio

1.17

1.57

2.66

6.72

11.81

Times Interest Earned Ratio

-

-

-

-

9.51

Assets Backing Ratio

1.14

1.11

1.10

1.16

1.11

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

0.43

0.37

1.31

1.21

1.05

Net Profit Margin

0.38

0.35

1.02

0.87

0.68

Return On Net Assets

2.18

1.40

5.08

10.47

4.59

Return On Capital Employed

2.18

1.40

5.08

10.47

4.44

Return On Shareholders' Funds/Equity

1.90

1.32

3.98

7.67

2.82

Dividend Pay Out Ratio (Times)

0.01

-

-

-

0.00

NOTES TO ACCOUNTS

 

 

 

 

 

Contingent Liabilities

 

 

 

-

0




 

DIAMOND INDUSTRY – INDIA

 

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

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

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

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

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

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

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

 

-            Gem & Jewellery Export Promotion Council in its statistical data has shown the export of polished diamonds to have increase by 28 % in February 2013. Compared to $ 1.4 bn worth of polished diamond export in February, 2012, India exported $ 1.84 billion worth of polished diamonds in February 2013. A senior executive of GJEPC said, “Export of cut and polished diamonds started falling month-wise after the imposition of 2 % of import duty on the polished diamonds. But February, 2013 has given a new ray of hope to the industry as the export of polished diamonds has actually increased by 28 %. It means the industry  is on the track of recovery and round tripping of diamonds has stopped completely.” Demand has started coming from the US, the UK, Japan and China. India’s polished diamond export is expected to cross $ 21 bn in 2013-14.

 

-            The banking sector has started exercising restraint while following prudent risk management norms when lending money to gems and jewellery sector. This follows the implementation of Basel III accord – a global voluntary regulatory standard on bank capital adequacy, stress testing and market liquidity.

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.62.48

UK Pound

1

Rs.102.95

Euro

1

Rs.84.60

 

 

INFORMATION DETAILS

 

Report Prepared by :

NIS

 

 

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.