MIRA INFORM REPORT

 

 

Report Date :

23.01.2014

 

IDENTIFICATION DETAILS

 

Name :

TAI BENG HARDWARE MACHINERY SDN. BHD.

 

 

Registered Office :

2-6-29, Harbour Trade Centre, 2, Gat Lebuh Macallum, 10300 George Town, Pulau Pinang

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.03.2012

 

 

Date of Incorporation :

31.12.1996

 

 

Com. Reg. No.:

415406-W

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Trading of Hardwares and Building Materials

 

 

No. of Employees :

15 [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 – 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.

:

415406-W

COMPANY NAME

:

TAI BENG HARDWARE MACHINERY SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

31/12/1996

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

2-6-29, HARBOUR TRADE CENTRE, 2, GAT LEBUH MACALLUM, 10300 GEORGE TOWN, PULAU PINANG, MALAYSIA.

BUSINESS ADDRESS

:

28-Q, JALAN PINTASAN CECIL 4, 10300 GEORGE TOWN, PULAU PINANG, MALAYSIA.

TEL.NO.

:

04-2639059

FAX.NO.

:

04-2628179

CONTACT PERSON

:

CH'NG KEAN CHYE ( DIRECTOR )

INDUSTRY CODE

:

46639

PRINCIPAL ACTIVITY

:

TRADING OF HARDWARES AND BUILDING MATERIALS

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 500,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 23,286,803 [2012]

NET WORTH

:

MYR 3,065,088 [2012]

STAFF STRENGTH

:

15 [2014]

BANKER (S)

:

CIMB BANK BHD

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

LIMITED

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

MODERATE

CURRENCY EXPOSURE

:

MODERATE

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) trading of hardwares and building materials.

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 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

(%)

MR. CH'NG KEAN CHYE +

28-Q, JALAN PINTASAN CECIL 4, 10300 GEORGE TOWN, PULAU PINANG, MALAYSIA.

670116-07-6027 A0609647

275,000.00

55.00

MR. CH'NG KOK CHYE +

28-Q, JALAN PINTASAN CECIL 4, 10300 GEORGE TOWN, PULAU PINANG, MALAYSIA.

570725-07-5611 5206123

75,000.00

15.00

MS. CH'NG BENG KHUAN +

82, MAGAZINE ROAD, 10200 GEORGE TOWN, PULAU PINANG, MALAYSIA.

640822-07-5702 7376782

75,000.00

15.00

MS. CH'NG BENG HONG +

82, MAGAZINE ROAD, 10200 GEORGE TOWN, PULAU PINANG, MALAYSIA.

610611-07-5780 6191797

75,000.00

15.00

 

 

 

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

------

 

 

 

500,000.00

100.00

 

 

 

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

=====

+ Also Director

 

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MS. CH'NG BENG KHUAN

Address

:

82, MAGAZINE ROAD, 10200 GEORGE TOWN, PULAU PINANG, MALAYSIA.

IC / PP No

:

7376782

New IC No

:

640822-07-5702

Date of Birth

:

22/08/1964

 

 

 

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

21/01/1997

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 2

 

Name Of Subject

:

MR. CH'NG KOK CHYE

Address

:

28-Q, JALAN PINTASAN CECIL 4, 10300 GEORGE TOWN, PULAU PINANG, MALAYSIA.

IC / PP No

:

5206123

New IC No

:

570725-07-5611

Date of Birth

:

25/07/1957

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

31/12/1996

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 3

 

Name Of Subject

:

MS. CH'NG BENG HONG

Address

:

82, MAGAZINE ROAD, 10200 GEORGE TOWN, PULAU PINANG, MALAYSIA.

IC / PP No

:

6191797

New IC No

:

610611-07-5780

Date of Birth

:

11/06/1961

 

 

 

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

21/01/1997

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 4

 

Name Of Subject

:

MR. CH'NG KEAN CHYE

Address

:

28-Q, JALAN PINTASAN CECIL 4, 10300 GEORGE TOWN, PULAU PINANG, MALAYSIA.

IC / PP No

:

A0609647

New IC No

:

670116-07-6027

Date of Birth

:

16/01/1967

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

31/12/1996

 

 

 

 

 

 

 

 

 

 

 

 




MANAGEMENT

 

 

 

1)

Name of Subject

:

CH'NG KEAN CHYE

 

Position

:

DIRECTOR

 

 

 

 

 

 

 

AUDITOR

 

Auditor

:

LEONG,CHEONG & ASSOCIATES

Auditor' Address

:

2-6-29(A), HARBOUR TRADE CENTRE, GAT LEBUH MACALLUM, 10300 GEORGE TOWN, PULAU PINANG, MALAYSIA.

 

 

 

 

 

 

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. CHEAH TOO NEE

 

IC / PP No

:

6953315

 

New IC No

:

630107-07-5798

 

Address

:

12, LORONG 34, TAMAN MERAK, 14100 SIMPANG AMPAT, PULAU PINANG, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

CIMB BANK BHD

 

 

 

 

 

 

 

 

 

2)

Name

:

MALAYAN BANKING BHD

 

 

 

 

 

 

 

 

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

28/10/1999

N/A

MALAYAN BANKING BERHAD

-

Unsatisfied

2

29/06/2001

N/A

PUBLIC BANK BERHAD

MYR 630,000.00

Satisfied

3

27/11/2004

N/A

CIMB BANK BERHAD

-

Unsatisfied

4

19/03/2008

FACILITY AGREEMENT

MALAYAN BANKING BHD

MYR 500,000.00

Unsatisfied

5

19/03/2008

FACILITY AGREEMENT

MALAYAN BANKING BHD

MYR 200,000.00

Unsatisfied

6

15/07/2008

DEBENTURE

MALAYAN BANKING BHD

-

Unsatisfied

7

15/07/2008

FACILITY AGREEMENT

MALAYAN BANKING BHD

MYR 520,000.00

Unsatisfied

8

20/05/2009

2ND LEGAL CHARGE

CIMB BANK BERHAD

MYR 300,000.00

Unsatisfied

9

22/10/2009

1ST LEGAL CHARGE

CIMB BANK BERHAD

MYR 270,000.00

Unsatisfied

 

 

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

:

YES

 

Overseas

:

YES

 

Import Countries

:

TAIWAN,CHINA,JAPAN,GERMANY



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

[

X

]

 

Fair 91-120 Days

[

 

]

 

Poor >120 Days

[

 

]

 

 

 

 

 

 

CLIENTELE

 

Local

:

YES

Percentage

:

100%

Domestic Markets

:

MALAYSIA

Overseas

:

NO

 

 

 

 

 

 

 

 

 

Credit Term

:

30 - 60 DAYS

 

 

 

 

 

 

Payment Mode

:

CHEQUES
CASH

Type of Customer

:

DEALERS,END USERS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATIONS

 

Goods Traded

:

HARDWARE PRODUCTS, ENGINEERING PRODUCTS & ACCESSORIES

 

 

 

Ownership of premises

:

OWNED

 

Total Number of Employees:

 

YEAR

2014

2013

2012

 

 

 

 

 

 

 

GROUP

N/A

N/A

N/A

 

 

 

 

 

 

COMPANY

15

15

15

 

 

 

 

 

 

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) trading of hardwares and building materials.


The Subject offers a wide range of hardware products including wires, netting, brushes, padlocks, pump, valves and others.


We were informed that the Subject's products are mainly used in construction and engineering industries.


The Subject's products are used for various applications such as automotive, construction, plantation, water treatment and others.


The Subject's products come in different sizes and models.


The Subject also able to source hardware products according to its customers' requirements.




RECENT DEVELOPMENT


We have checked with the Malaysian National News Agency's (BERNAMA)

 

 

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

04-2639059

Match

:

N/A

 

 

 

Address Provided by Client

:

28-Q, JALAN PINTASAN CECIL 4,10300,PULAU PINANG

Current Address

:

28-Q, JALAN PINTASAN CECIL 4, 10300 GEORGE TOWN, PULAU PINANG, MALAYSIA.

Match

:

YES

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations


On 16th January 2014 we contacted one of the staff from the Subject and she provided some information.


FINANCIAL ANALYSIS

 

 

Profitability

 

 

 

 

 

 

Turnover

:

Increased

[

2008 - 2012

]

 

Profit/(Loss) Before Tax

:

Increased

[

2008 - 2012

]

 

Return on Shareholder Funds

:

Unfavourable

[

8.12%

]

 

Return on Net Assets

:

Acceptable

[

17.01%

]

 

 

 

 

 

 

 

 

The Subject's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The higher profit could be attributed to the increase in turnover. The unfavourable return on shareholders' funds could indicate that the Subject was inefficient in utilising its assets to generate returns.

 

 

 

 

 

 

 

Working Capital Control

 

 

 

 

 

 

Stock Ratio

:

Favourable

[

21 Days

]

 

Debtor Ratio

:

Unfavourable

[

111 Days

]

 

Creditors Ratio

:

Unfavourable

[

68 Days

]

 

 

 

 

 

 

 

 

The Subject's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. 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

[

1.08 Times

]

 

Current Ratio

:

Unfavourable

[

1.25 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

:

Unfavourable

[

1.88 Times

]

 

Gearing Ratio

:

Unfavourable

[

1.15 Times

]

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Assessment :

 

 

 

 

 

 

Generally, the Subject's performance has improved with higher turnover and profit. 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. If there is a fall in the Subject's profit or any increase in interest rate, the Subject may not be able to generate sufficient cash-flow to service its interest. The Subject's gearing level was high and its going concern will be in doubt if there is no injection of additional shareholders' funds in times of economic downturn and / or high interest rates.

 

 

 

 

 

 

 

Overall financial condition of the Subject : LIMITED

 

 

 

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

46639 : Wholesale of other construction materials, hardware, plumbing and heating equipment and supplies n.e.c.

 

 

INDUSTRY :

CONSTRUCTION

 

 

 

The construction sector consists of four subsectors: residential, non-residential, civil engineering and special trade works. During a period of rapid economic expansion, the sector generally outperforms Gross Domestic Product (GDP) growth.

 

Construction's contribution to gross domestic product (GDP) is expected to fall to 11.2% in 2013 from 15 % in 2012, with all subsectors registering steady growth. The sector is expected to benefit from the acceleration of ongoing construction activities, particularly from the Economic Transformation Programme (ETP) and Second Rolling Plan (RP2) construction-related projects. Of significance, exploration activities in O&G industries and major projects such as the electrified double-tracking between lpoh -Padang Besar, LPT2 Jabur - Kuala Terengganu, MRT and the River of Life are expected to drive the growth of the civil engineering subsector. The non-residential subsector is expected to expand spurred by the industrial building segment and the commencement of construction of the Tun Razak Exchange (TRX). The residential subsector is also projected to expand, albeit at a moderate pace, after recording several years of strong growth. Key housing development projects, particularly in Sungai Buloh and Bandar Malaysia in Sungai Besi, which are expected to commence in 2013, will support residential construction activities. According to the Minister of Finance, the domestic demand is expected to grow at 5.6% and will remain the main driver of growth in 2013 underpinned by strong private sector expenditure.

 

The industry is set to receive a further boost from a wave of new developments earmarked for 2013, including rail projects worth an estimated $52 billion that should be launched in the coming year. It was predicted that the growth in other sectors will largely drive Malaysia's economy but the construction sector's contribution to GDP could still remain stable. However, while the construction sector is expected to have a solid 2013, it remains hampered by a shortage of skilled labourers, with rapid growth in recent years triggering a drain on its workforce. In late November of 2012, the Builders Association Malaysia (MBAM) request the government to do more to facilitate the training of building workers or run the risk of supplyside bottlenecks delaying new projects.

 

 

 

OVERALL INDUSTRY OUTLOOK : Average Growth



CREDIT RISK EVALUATION & RECOMMENDATION

 


Incorporated in 1996, the Subject is a Private Limited company, focusing on trading of hardwares and building materials. 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 Subject is considered as a medium size company with issued and paid up capital standing at MYR 500,000.

Information revealed that the Subject solely focuses on domestic market rather than overseas market. We believe that this narrow market segment would limit the Subject's business opportunities and the Subject is likely to be affected by the uncertainties in local economy. However, its long presence in the market has enabled the Subject to gain certain market shares and established good rapport with its clients. Thus, its business risk is diversified. To date, the Subject's business operation is supported by 15 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 high gearing ratio clearly implied that the Subject was supported by more debt than equity. Fortunately, 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 3,065,088, 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 payment habit is average. With its adequate working capital, the Subject should be able to pay its short term debts.

 
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)

 

Financial Year End

2012-03-31

2011-03-31

2010-03-31

2009-03-31

2008-03-31

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

23,286,803

22,318,750

18,724,503

21,433,407

20,845,395

 

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

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

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

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

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

Total Turnover

23,286,803

22,318,750

18,724,503

21,433,407

20,845,395

Costs of Goods Sold

(20,937,128)

(20,250,856)

(16,546,827)

(21,433,407)

(20,845,395)

 

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

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

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

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

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

Gross Profit

2,349,675

2,067,894

2,177,676

-

-

 

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

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

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

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

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

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

347,563

208,651

497,519

535,220

578,888

 

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

347,563

208,651

497,519

535,220

578,888

Taxation

(98,646)

(92,523)

(157,250)

(138,594)

(184,723)

 

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

248,917

116,128

340,269

396,626

394,165

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

2,316,171

2,200,043

1,859,774

1,463,148

1,068,983

 

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

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

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

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

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

As restated

2,316,171

2,200,043

1,859,774

1,463,148

1,068,983

 

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

2,565,088

2,316,171

2,200,043

1,859,774

1,463,148

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

2,565,088

2,316,171

2,200,043

1,859,774

1,463,148

 

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

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

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

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

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

 

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Bank overdraft

-

13,881

17,177

-

-

Hire purchase

-

23,069

25,757

-

-

Term loan / Borrowing

-

75,371

58,456

-

-

Others

394,743

287,389

169,067

-

-

 

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

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

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

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

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

 

394,743

399,710

270,457

-

-

 

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

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

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

 

 

 

BALANCE SHEET

 

 

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

2,289,692

2,393,338

2,129,052

1,817,282

1,871,124

 

 

 

 

 

 

LONG TERM INVESTMENTS/OTHER ASSETS

 

 

 

 

 

Deferred assets

23,471

3,076

3,416

-

-

 

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

23,471

3,076

3,416

-

-

 

 

 

 

 

 

 

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

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

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

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

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

TOTAL LONG TERM ASSETS

2,313,163

2,396,414

2,132,468

1,817,282

1,871,124

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Stocks

1,346,098

814,764

865,264

-

-

Trade debtors

7,075,516

7,001,199

5,292,973

-

-

Other debtors, deposits & prepayments

1,061,676

702,976

598,430

-

-

Amount due from director

821,744

784,224

936,162

-

-

Cash & bank balances

50,555

216,693

168,877

-

-

 

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

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

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

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

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

TOTAL CURRENT ASSETS

10,355,589

9,519,856

7,861,706

7,432,041

7,540,651

 

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

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

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

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

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

TOTAL ASSET

12,668,752

11,916,270

9,994,174

9,249,323

9,411,775

 

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

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

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

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

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

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade creditors

3,924,871

3,311,568

2,167,473

-

-

Other creditors & accruals

494,487

408,672

384,122

-

-

Hire purchase & lease creditors

193,340

210,049

163,260

-

-

Bank overdraft

364,696

134,486

-

-

-

Short term borrowings/Term loans

112,137

104,364

2,921,980

-

-

Other borrowings

2,848,841

3,075,285

-

-

-

Amounts owing to director

146,189

126,324

94,270

-

-

Provision for taxation

219,625

258,429

270,414

-

-

 

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

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

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

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

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

TOTAL CURRENT LIABILITIES

8,304,186

7,629,177

6,001,519

5,681,421

6,569,582

 

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

2,051,403

1,890,679

1,860,187

1,750,620

971,069

 

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

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

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

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

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

TOTAL NET ASSETS

4,364,566

4,287,093

3,992,655

3,567,902

2,842,193

 

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

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

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

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

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

 

 

 

 

 

 

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

2,565,088

2,316,171

2,200,043

1,859,774

1,463,148

 

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

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

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

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

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

TOTAL RESERVES

2,565,088

2,316,171

2,200,043

1,859,774

1,463,148

 

 

 

 

 

 

 

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

3,065,088

2,816,171

2,700,043

2,359,774

1,963,148

 

 

 

 

 

 

LONG TERM LIABILITIES

 

 

 

 

 

Others

1,299,478

1,470,922

1,292,612

-

-

 

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

1,299,478

1,470,922

1,292,612

1,208,128

879,045

 

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

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

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

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

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

 

4,364,566

4,287,093

3,992,655

3,567,902

2,842,193

 

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

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

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

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

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

 

 

 

 

 

 

 

FINANCIAL RATIO

 

 

 

TYPES OF FUNDS

 

 

 

 

 

Cash

50,555

216,693

168,877

-

-

Net Liquid Funds

(314,141)

82,207

168,877

-

-

Net Liquid Assets

705,305

1,075,915

994,923

1,750,620

971,069

Net Current Assets/(Liabilities)

2,051,403

1,890,679

1,860,187

1,750,620

971,069

Net Tangible Assets

4,364,566

4,287,093

3,992,655

3,567,902

2,842,193

Net Monetary Assets

(594,173)

(395,007)

(297,689)

542,492

92,024

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

3,519,014

3,524,184

3,085,240

-

-

Total Liabilities

9,603,664

9,100,099

7,294,131

6,889,549

7,448,627

Total Assets

12,668,752

11,916,270

9,994,174

9,249,323

9,411,775

Net Assets

4,364,566

4,287,093

3,992,655

3,567,902

2,842,193

Net Assets Backing

3,065,088

2,816,171

2,700,043

2,359,774

1,963,148

Shareholders' Funds

3,065,088

2,816,171

2,700,043

2,359,774

1,963,148

Total Share Capital

500,000

500,000

500,000

500,000

500,000

Total Reserves

2,565,088

2,316,171

2,200,043

1,859,774

1,463,148

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

0.01

0.03

0.03

-

-

Liquid Ratio

1.08

1.14

1.17

-

-

Current Ratio

1.25

1.25

1.31

1.31

1.15

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

21

13

17

-

-

Debtors Ratio

111

114

103

-

-

Creditors Ratio

68

60

48

-

-

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

1.15

1.25

1.14

-

-

Liabilities Ratio

3.13

3.23

2.70

2.92

3.79

Times Interest Earned Ratio

1.88

1.52

2.84

-

-

Assets Backing Ratio

8.73

8.57

7.99

7.14

5.68

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

1.49

0.93

2.66

2.50

2.78

Net Profit Margin

1.07

0.52

1.82

1.85

1.89

Return On Net Assets

17.01

14.19

19.23

15.00

20.37

Return On Capital Employed

15.08

13.13

18.48

15.00

20.37

Return On Shareholders' Funds/Equity

8.12

4.12

12.60

16.81

20.08

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.61.92

UK Pound

1

Rs.101.98

Euro

1

Rs.83.93

 

 

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.