MIRA INFORM REPORT

 

 

Report Date :

22.02.2014

 

IDENTIFICATION DETAILS

 

Name :

CONSUCARE INC. SDN. BHD.

 

 

Registered Office :

Suite 2-2-5, Menara Klh Business Centre, 2, Jalan Kasipillay, 2 1/2 Miles, Jalan Ipoh, 2nd Floor, 51200 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2012

 

 

Date of Incorporation :

08.07.2002

 

 

Com. Reg. No.:

585519-T

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Subject is engaged in the Distribute of Skin Care Related Products

 

 

No. of Employees :

5 [2014]

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ca

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

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 – 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.

:

585519-T

COMPANY NAME

:

CONSUCARE INC. SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

08/07/2002

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

SUITE 2-2-5, MENARA KLH BUSINESS CENTRE, 2, JALAN KASIPILLAY, 2 1/2 MILES, JALAN IPOH, 2ND FLOOR, 51200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

15 & 17, JALAN TSB 2, TAMAN INDUSTRI SUNGAI BULOH, 47000 SUNGAI BULOH, SELANGOR, MALAYSIA.

TEL.NO.

:

03-61412278

FAX.NO.

:

03-61412272

EMAIL

:

INFO@LIVINGPROOF.COM.MY

WEB SITE

:

WWW.LIVINGPROOF.COM.MY

CONTACT PERSON

:

CHO SEE YOO ( DIRECTOR )

INDUSTRY CODE

:

96020

PRINCIPAL ACTIVITY

:

DISTRIBUTE OF SKIN CARE RELATED PRODUCTS

AUTHORISED CAPITAL

:

MYR 500,000.00 DIVIDED INTO
ORDINARY SHARE 500,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 500,000.00 DIVIDED INTO
ORDINARY SHARES 380,098 CASH AND 119,902 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 303,035 [2012]

NET WORTH

:

MYR (1,146,359) [2012]

STAFF STRENGTH

:

5 [2014]

BANKER (S)

:

PUBLIC BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

POOR

MANAGEMENT CAPABILITY

:

WEAK

COMMERCIAL RISK

:

HIGH

CURRENCY EXPOSURE

:

N/A

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

MARGINAL 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) distribute of skin care related products.

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

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

30/06/2012

MYR 500,000.00

MYR 500,000.00

 

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

 

Name

Address

IC/PP/Loc No

Shareholding

(%)

MS. LAM EN HUI +

2, JALAN CECAWI 6/5, SEKSYEN 6, KOTA DAMANSARA, 47810 PETALING JAYA, SELANGOR, MALAYSIA.

560731-02-5726 8217448

300,000.00

60.00

MR. CHO SEE YOO +

2, JALAN CECAWI 6/5, SEKSYEN 6, KOTA DAMANSARA, 47810 PETALING JAYA, SELANGOR, MALAYSIA.

551111-08-5117 8195987

125,000.00

25.00

MR. CHO WE JUN

2, JALAN CECAWI 6/5, SEKSYEN 6, KOTA DAMANSARA, 47810 PETALING JAYA, SELANGOR, MALAYSIA.

820927-10-5777

75,000.00

15.00

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

------

500,000.00

100.00

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

=====

+ Also Director



DIRECTORS


DIRECTOR 1

 

Name Of Subject

:

MR. CHO SEE YOO

Address

:

2, JALAN CECAWI 6/5, SEKSYEN 6, KOTA DAMANSARA, 47810 PETALING JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

8195987

New IC No

:

551111-08-5117

Date of Birth

:

11/11/1955

Nationality

:

MALAYSIAN

Date of Appointment

:

24/07/2007

Qualification

:

B.SC (HONS) HOUSING, BLDG & PLANNING USM IN 1980.

Profile

:

HAS VAST EXPERIENCE IN THE CONSTRUCTION OF VARIOUS COMMERCIAL & RESIDENTAL PROJECTS. STARTED CAREER IN YEOH CHENG LIAM CONSTRUCTION S/B IN 1980 WHERE HE WORKED AS SITE AGENT FOR 4 YEARS. JOINED K.H ANG & BROTHERS CONSTRUCTION S/B & SUTERA AMAN S/B AS PARTNER UNTIL 1992 & 1993 RESPECTIVELY.

 

DIRECTOR 2

 

Name Of Subject

:

MS. LAM EN HUI

Address

:

2, JALAN CECAWI 6/5, SEKSYEN 6, KOTA DAMANSARA, 47810 PETALING JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

8217448

New IC No

:

560731-02-5726

Date of Birth

:

31/07/1956

Nationality

:

MALAYSIAN

Date of Appointment

:

26/12/2007


MANAGEMENT

 

 

1)

Name of Subject

:

CHO SEE YOO

Position

:

DIRECTOR

 

2)

Name of Subject

:

LAM EN HUI

Position

:

MANAGING EDITOR

 

 

 

AUDITOR

 

Auditor

:

WONG & CO

Auditor' Address

:

SUITES 2-5-6 & 2-5-7, MENARA KLH BUSINESS CENTRE, 2, JALAN KASIPILLAY, 2 1/2 MILES, JALAN IPOH, 5TH FLOOR, 51200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 


COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. WONG WING KAI @ WONG WENG FONG

IC / PP No

:

1618409

New IC No

:

490629-03-5003

Address

:

3, JALAN TENGAS (8/8), 46050 PETALING JAYA, SELANGOR, MALAYSIA.

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

PUBLIC BANK 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

:

N/A

Overseas

:

N/A


The Subject refused to disclose its suppliers


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

[

]

Poor >120 Days

[

X

]



CLIENTELE

 

Local

:

YES

Percentage

:

100%

Domestic Markets

:

MALAYSIA

Overseas

:

NO

Credit Term

:

N/A

Payment Mode

:

LETTER OF CREDIT (LC)
TELEGRAPHIC TRANSFER (TT)

Type of Customer

:

PHARMACIES

CUSTOMER(S)

:

1) AEON CO. (M) BHD.

 

 

OPERATIONS

 

Goods Traded

:

PRODUCT FOR SKIN CARE SYSTEM, ESSENTIALS, SUPPLEMENT, SPA BODY LINES, CLINICAL, TREATMENT AND SPECIAL FUNCTIONS

 

Total Number of Employees:

YEAR

2014

2013

GROUP

N/A

N/A

COMPANY

5

2

 

Branch

:

NO

 


Other Information:


The Subject is principally engaged in the (as a / as an) distribute of skin care related products.


According to Subject, they are pioneers in the use of advanced scientific research and breakthrough technology from Europe including Gemmotheraphy*, to develop anti-aging skincare and other personal products, dedicated to promote health, wellness, beauty and everlasting youth.


Featuring ultra-active Phyto-Placentaâ (plant placenta) and enhanced with proven beauty ingredients that are endorsed even by the reowned Harley Street, London cosmetic surgeons and doctors who specialise in the beauty needs of Europe's celebrities.


Subject advanced dermaceutical range of Living Proof live-cell skincare for face and body, features the bio-stimulating plant placenta, Phyto-PlacentaTM, active ingredients, which are extracted using breakthrough Live Cell Skincare Technology in Laboratorie Gattefossé s.a., Paris, France



CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

0361412278

Current Telephone Number

:

03-61412278

Match

:

YES

Address Provided by Client

:

15 & 17, JLN TSB 2, TMN INDUSTRI SUNGAI BULOH, 47000 PETALING JAYA, SELANGOR KUALA LUMPUR

Current Address

:

15 & 17, JALAN TSB 2, TAMAN INDUSTRI SUNGAI BULOH, 47000 SUNGAI BULOH, SELANGOR, MALAYSIA.

Match

:

YES

Latest Financial Accounts

:

YES

 

Other Investigations


On 18th February 2014 we contacted one of the staff from the Subject and she provided some information.

 

 

FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Decreased

[

2008 - 2012

]

Profit/(Loss) Before Tax

:

Increased

[

2008 - 2012

]

Return on Shareholder Funds

:

Unfavourable

[

38.53%

]

Return on Net Assets

:

Unfavourable

[

44.88%

]

The continuous fall in turnover could be due to the lower demand for the Subject's products / services.Higher losses before tax during the year could be due to the higher operating costs incurred. Although the Subject's returns showed positive figures it is not reflective of the true situation. The Subject incurred losses during the year and its shareholders' funds have turned red. The positive returns on shareholders' funds is the result of losses divided by negative shareholders' funds. The Subject's management was inefficient in utilising the assets to generate returns.

Working Capital Control

Stock Ratio

:

Unfavourable

[

492 Days

]

Debtor Ratio

:

Unfavourable

[

381 Days

]

Creditors Ratio

:

Unfavourable

[

596 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

:

Unfavourable

[

0.15 Times

]

Current Ratio

:

Unfavourable

[

0.33 Times

]

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

Solvency

Interest Cover

:

Unfavourable

[

(71.85 Times)

]

Gearing Ratio

:

Favourable

[

0.00 Times

]

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

The Subject's losses could be attributed to the lower turnover which in turn could be the result of unfavourable market conditions. Due to its weak liquidity position, the Subject 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 Subject. The Subject'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 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 : 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



INDUSTRY ANALYSIS

 

MSIC CODE

96020 : Hairdressing and other beauty treatment

INDUSTRY :

ECONOMY

The country's gross domestic product (GDP) expanded by 6.4% in the 4th quarter ended Dec 31 2012 on a year-on-year basis driven by sustained domestic demand and high investment growth. For the full year 2012, the GDP growth hit 5.6%, well above the government’s revised forecast of 4.5%-5.0% made in year 2011. Despite the weak and uncertain global economic conditions, there is remarkable optimism that Malaysia's economy could still continue to grow at a relatively healthy pace. The government has, in fact, targeted a gross domestic product (GDP) growth rate of between 4.5% and 5.5% for 2013. This is quite an encouraging growth rate, and an achievable one at that, according to most economists.

Additionally, tepid economic growth in advanced economies and the slowdown of emerging economies especially in China and India, point to weakening global economic prospects. The deterioration in the external environment and correction in commodity prices are expected to weigh on Malaysia’s export performance during the second half of 2012. Nevertheless, the vibrant domestic demand is expected to be sustained during the second half of 2012, supported by both public and private sectors amid conducive financial market conditions, stable prices and a favourable labour market. The external sector provided little support with exports showing a slower pace of decrease in 4th quarter of year 2012 to -1.5%, while imports also decreased by -0.9% resulting in an actual increase in the level of net exports compared to 3rd quarter of year 2012, although growth remained negative relative to 4th quarter of year 2012.

Domestic demand will be the main driver of the Malaysian economy supported by private and public sector expenditure. Growth in private consumption is expected to be buoyed by stable employment and income coupled with lower inflation. The salary revision and bonus for civil servants, cash assistance under Bantuan Rakyat 1Malaysia (BR1M), reward to the Federal Land Development Authority (FELDA) settlers and other cash payments to assist various groups supported private consumption. Private investment is envisaged to drive economic growth over the medium term, underpinned by the ongoing implementation of the Economic Transformation Programme (ETP) and vibrant construction activity. Growth in private investment will be broad-based in line with positive investors’ confidence and strong domestic demand. Public investment will be largely led by the Non-Financial Public Enterprises’ (NFPEs) capital spending on oil and gas (O&G), telecommunications and transportrelated industries. The Investment expenditure was about evenly divided between structures and machinery & equipment, but the former category showed continued strong growth at 25.0% over the 4th quarter ended Dec 31 2011, while growth in the latter category slowed to 7.6% from 22.3% in 3rd quarter ended Sept 30 2012.

Growth was broad based with all major sectors registering increases. The only subsectors that posted declines were the textile manufacturing and forestry and logging activities. The construction sector posted the strongest growth, hitting 15% on the year 2012, not surprising given the spate of major projects and related private sector property investment over the year. Besides, the agriculture sectors had a slightly grew at 0.6% while the manufacturing and mining industries continued growth at 4.2% and 1.5% respectively. The service sector had drop to 5.5%. However, according to the Minister of Finance, the agriculture and construction sectors are projected to expand 2.4% and 11.2% respectively while the manufacturing and the mining industries are forecast to grow 4.9% and 2.7& respectively. Meanwhile, the service sector is expected to grow 5.6%.

With domestic demand remaining robust and signs of improvement in the external sector, there are far less grounds for an interest rate cut, unlike in the rest of the region where growth has, with the exception of Thailand, been less than impressive. High capacity utilisation, strong credit growth and the need to rein in household debt are all mitigating factors against an easing of policy. Meanwhile, in maintaining the balance between economic growth and inflationary pressures in Malaysia, it is expected that interest rates in the country will remain stable through 2013. The benchmark overnight policy rate (OPR) currently stands at 3%, which has been supportive of the country's economic growth amid a low inflation environment with consumer price index (CPI) growing at less than 2% in 2012. But with price pressures expected to pick up in year 2014, with CPI expected to increase around 2% to 3%, some economists expect the OPR to likely be raised by 25 basis points to 3.25% in the second half of year 2014.

In conclusion, the outlook for the Malaysian economy is going to be challenging, with the ongoing global economic slowdown in view of the debt crisis in Europe and the weakening of the US economy. Besdies, the loss of growth momentum in Malaysia will continue and become serious enough to sidetrack the country from its long-term development goals. Thus, nominal Gross National Income (GNI) per capita is expected to increase 6.4% to RM32,947 in year 2013. In terms of Public-Private Partnership (PPP) Facilitation Fund, per capita income is expected to grow 4.4% to reach USD16,368.

OVERALL INDUSTRY OUTLOOK : Marginal Growth




CREDIT RISK EVALUATION & RECOMMENDATION

 


Incorporated in 2002, the Subject is a Private Limited company, focusing on distribution of skin care related products. 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. With a weak shareholders' backing, the Subject's capital position is weak. Inadequate capital may be a constraint to the Subject as it limits its ability to expand its business in future.


Investigation revealed that the Subject concentrates only on the local market. This narrow market segment has placed the Subject at high business risk and limits its business expansion opportunities. Any adverse changes to the local economy might have a negative impact on the Subject's business performance. Being a small company, the Subject's business operation is supported by 5 employees. Overall, we regard that the Subject's management capability is weak. Without capable management, the Subject is unlikely to be successful and often contribute to unacceptable levels of accountability. Weak management can affect productivity, profitability, sales growth and ultimately can result in the failure of a business


Due to the challenging market conditions, the Subject's business performance seems to be deteriorating and losses incurred. The Subject 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 Subject may face working capital deficiency in meeting its short term financial obligations if no fresh capital are injected into the Subject. The Subject's unfavourable financial performance over the years has wiped out its shareholders' funds to a deficit of MYR 1,146,359. Therefore, the Subject as a going concern is much dependent on its ability to generate sufficient cash flow and obtain additional financing to meet its future obligations.


Without a strong assets backing, the Subject may face difficulties in getting loans for its future expansion and continued growth


The poor payment habit may affect the goodwill between the Subject and its suppliers and the Subject may inadvertently have to pay more for its future supplies


The industry has reached its maturity stage and only enjoying a marginal growth. The steady growth of the country's economy will further enhance the industry activities. Thus, the Subject's future performance is very much depend on its marketing strategies in order to retain its position in the market


Based on the above unfavourable condition, we regard granting credit to the Subject to be quite risky. Hence, credit is not recommended.

 



PROFIT AND LOSS ACCOUNT

 

 

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

 

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

SUMMARY

SUMMARY

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

303,035

334,396

390,322

275,070

1,256,349

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

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

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

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

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

Total Turnover

303,035

334,396

390,322

275,070

1,256,349

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

(521,621)

(414,346)

(198,353)

(169,411)

(240,070)

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

(521,621)

(414,346)

(198,353)

(169,411)

(240,070)

Taxation

79,971

81,030

32,160

31,405

33,337

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

(441,650)

(333,316)

(166,193)

(138,006)

(206,733)

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

(1,204,709)

(871,393)

(705,200)

(567,194)

(360,461)

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

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

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

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

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

As restated

(1,204,709)

(871,393)

(705,200)

(567,194)

(360,461)

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

(1,646,359)

(1,204,709)

(871,393)

(705,200)

(567,194)

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

(1,646,359)

(1,204,709)

(871,393)

(705,200)

(567,194)

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Bank overdraft

7,160

18,531

16,855

-

-

Letter of credit

-

1,476

-

-

-

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

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

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

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

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

7,160

20,007

16,855

-

-

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

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

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

BALANCE SHEET

 

 

 

ASSETS EMPLOYED:

FIXED ASSETS

50,818

78,303

107,318

50,300

51,759

LONG TERM INVESTMENTS/OTHER ASSETS

Deferred assets

340,815

260,844

179,814

-

-

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

340,815

260,844

179,814

-

-

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

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

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

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

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

TOTAL LONG TERM ASSETS

391,633

339,147

287,132

50,300

51,759

CURRENT ASSETS

Stocks

408,473

27,532

93,047

-

-

Trade debtors

315,962

801,719

420,270

-

-

Other debtors, deposits & prepayments

13,902

15,073

126,616

-

-

Cash & bank balances

25,235

27,977

5,065

-

-

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

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

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

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

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

TOTAL CURRENT ASSETS

763,572

872,301

644,998

471,202

364,966

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

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

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

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

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

TOTAL ASSET

1,155,205

1,211,448

932,130

521,502

416,725

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

494,551

49,097

40,930

-

-

Other creditors & accruals

1,781,452

1,199,484

587,521

-

-

Bank overdraft

-

258,353

265,849

-

-

Amounts owing to director

25,561

409,224

409,224

-

-

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

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

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

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

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

TOTAL CURRENT LIABILITIES

2,301,564

1,916,158

1,303,524

726,702

483,919

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

(1,537,992)

(1,043,857)

(658,526)

(255,500)

(118,953)

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

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

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

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

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

TOTAL NET ASSETS

(1,146,359)

(704,710)

(371,394)

(205,200)

(67,194)

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

500,000

500,000

500,000

500,000

500,000

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

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

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

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

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

TOTAL SHARE CAPITAL

500,000

500,000

500,000

500,000

500,000

RESERVES

Retained profit/(loss) carried forward

(1,646,359)

(1,204,709)

(871,393)

(705,200)

(567,194)

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

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

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

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

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

TOTAL RESERVES

(1,646,359)

(1,204,710)

(871,394)

(705,200)

(567,194)

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

(1,146,359)

(704,710)

(371,394)

(205,200)

(67,194)

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

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

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

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

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

(1,146,359)

(704,710)

(371,394)

(205,200)

(67,194)

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

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

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

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

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

 

 

FINANCIAL RATIO

 

 

 

TYPES OF FUNDS

Cash

25,235

27,977

5,065

-

-

Net Liquid Funds

25,235

(230,376)

(260,784)

-

-

Net Liquid Assets

(1,946,465)

(1,071,389)

(751,573)

(255,500)

(118,953)

Net Current Assets/(Liabilities)

(1,537,992)

(1,043,857)

(658,526)

(255,500)

(118,953)

Net Tangible Assets

(1,146,359)

(704,710)

(371,394)

(205,200)

(67,194)

Net Monetary Assets

(1,946,465)

(1,071,389)

(751,573)

(255,500)

(118,953)

BALANCE SHEET ITEMS

Total Borrowings

0

258,353

265,849

-

-

Total Liabilities

2,301,564

1,916,158

1,303,524

726,702

483,919

Total Assets

1,155,205

1,211,448

932,130

521,502

416,725

Net Assets

(1,146,359)

(704,710)

(371,394)

(205,200)

(67,194)

Net Assets Backing

(1,146,359)

(704,710)

(371,394)

(205,200)

(67,194)

Shareholders' Funds

(1,146,359)

(704,710)

(371,394)

(205,200)

(67,194)

Total Share Capital

500,000

500,000

500,000

500,000

500,000

Total Reserves

(1,646,359)

(1,204,710)

(871,394)

(705,200)

(567,194)

LIQUIDITY (Times)

Cash Ratio

0.01

0.01

0.00

-

-

Liquid Ratio

0.15

0.44

0.42

-

-

Current Ratio

0.33

0.46

0.49

0.65

0.75

WORKING CAPITAL CONTROL (Days)

Stock Ratio

492

30

87

-

-

Debtors Ratio

381

875

393

-

-

Creditors Ratio

596

54

38

-

-

SOLVENCY RATIOS (Times)

Gearing Ratio

0.00

(0.37)

(0.72)

-

-

Liabilities Ratio

(2.01)

(2.72)

(3.51)

(3.54)

(7.20)

Times Interest Earned Ratio

(71.85)

(19.71)

(10.77)

-

-

Assets Backing Ratio

(2.29)

(1.41)

(0.74)

(0.41)

(0.13)

PERFORMANCE RATIO (%)

Operating Profit Margin

(172.13)

(123.91)

(50.82)

(61.59)

(19.11)

Net Profit Margin

(145.74)

(99.68)

(42.58)

(50.17)

(16.46)

Return On Net Assets

44.88

55.96

48.87

82.56

357.28

Return On Capital Employed

44.88

88.35

171.96

82.56

357.28

Return On Shareholders' Funds/Equity

38.53

47.30

44.75

67.25

307.67

Dividend Pay Out Ratio (Times)

0.00

0.00

0.00

-

-

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

0



FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.62.16

UK Pound

1

Rs.103.44

Euro

1

Rs.85.27

 

 

INFORMATION DETAILS

 

Report Prepared by :

NNA

 

 

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.