MIRA INFORM REPORT

 

 

Report Date :

10.06.2014

 

IDENTIFICATION DETAILS

 

Name :

CHEM METALLURGICAL SDN. BHD.

 

 

Registered Office :

Room 101, 368, Jalan Pudu, 1st Floor, 55100 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2012

 

 

Date of Incorporation :

02.12.1995

 

 

Com. Reg. No.:

369216-H

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Supplying Equipment and Foundary Consumable Product & Other Related Product

 

 

No. of Employees :

10 [2014]

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

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

Satisfactory

 


 

Status :

Satisfactory

Payment Behaviour :

No complaints

Litigation :

Clear

 

NOTES :

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

 

 

ECGC Country Risk Classification List – March 31, 2014

 

Country Name

Previous Rating

(31.12.2013)

Current Rating

(31.03.2014)

Malaysia

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low Risk

 

A2

Moderately Low Risk

 

B1

Moderate Risk

 

B2

Moderately High Risk

 

C1

High Risk

 

C2

Very High Risk

 

D

 


 

MALAYSIA - ECONOMIC OVERVIEW

 

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. The NAJIB administration also is continuing efforts to boost domestic demand and reduce the economy's dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver of the economy. As an oil and gas exporter, Malaysia has profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with sustained budget deficits, has forced Kuala Lumpur to begin to address fiscal shortfalls, through initial reductions in energy and sugar subsidies and the announcement of the 2015 implementation of a 6% goods and services tax. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplies about 32% of government revenue in 2013. Bank Negara 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 earlier raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but retreated in 2013 after he encountered significant opposition from Malay nationalists and other vested interests. In September 2013 NAJIB launched the new Bumiputra Economic Empowerment Program (BEEP), policies that favor and advance the economic condition of ethnic Malays.

 

Source : CIA

 

 

 

 


EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

369216-H

COMPANY NAME

:

CHEM METALLURGICAL SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

02/12/1995

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

ROOM 101, 368, JALAN PUDU, 1ST FLOOR, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

7, JALAN PENGGAWA U1/75, TAMAN PERINDUSTRIAN BATU 3, 40150 SHAH ALAM, SELANGOR, MALAYSIA.

TEL.NO.

:

03-55103488

FAX.NO.

:

03-55103277

EMAIL

:

INFO@CHEMTECH.COM.MY

WEB SITE

:

WWW.CHEMTECH.COM.MY

CONTACT PERSON

:

LIM SOON LAN ( DIRECTOR )

INDUSTRY CODE

:

46594

PRINCIPAL ACTIVITY

:

SUPPLYING EQUIPMENT AND FOUNDARY CONSUMABLE PRODUCT & OTHER RELATED PRODUCT

AUTHORISED CAPITAL

:

MYR 100,000.00 DIVIDED INTO
ORDINARY SHARE 100,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 100,000.00 DIVIDED INTO
ORDINARY SHARES 2 CASH AND 99,998 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 4,591,831 [2012]

NET WORTH

:

MYR 2,078,412 [2012]

STAFF STRENGTH

:

10 [2014]

BANKER (S)

:

CIMB BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

STABLE

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

MODERATE

CURRENCY EXPOSURE

:

N/A

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) supplying equipment and foundary consumable product & other related product.

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

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

28/06/2013

MYR 100,000.00

MYR 100,000.00

02/12/1995

MYR 100,000.00

MYR 2.00

 

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

 

Name

Address

IC/PP/Loc No

Shareholding

(%)

MR. YAP ONN WAH +

2A, JALAN TR9/3, GREEN ACRES, TROPICANA GOLF AND COUNTRY RESORT, 47410 PETALING JAYA, SELANGOR, MALAYSIA.

560323-08-6239 4934254

80,000.00

80.00

MS. LIM SOON LAN +

2A, JALAN TR9/3, GREEN ACRES, TROPICANA GOLF AND COUNTRY RESORT, 47410 PETALING JAYA, SELANGOR, MALAYSIA.

540319-08-6000 4579120

20,000.00

20.00

 

 

 

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

------

 

 

 

100,000.00

100.00

 

 

 

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

=====

+ Also Director

 

 

DIRECTORS


DIRECTOR 1

 

Name Of Subject

:

MS. LIM SOON LAN

Address

:

2A, JALAN TR9/3, GREEN ACRES, TROPICANA GOLF AND COUNTRY RESORT, 47410 PETALING JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

4579120

New IC No

:

540319-08-6000

Date of Birth

:

19/03/1954

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

02/12/1995

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 2

 

Name Of Subject

:

MR. YAP ONN WAH

Address

:

2A, JALAN TR9/3, GREEN ACRES, TROPICANA GOLF AND COUNTRY RESORT, 47410 PETALING JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

4934254

New IC No

:

560323-08-6239

Date of Birth

:

23/03/1956

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

02/12/1995

 

 

 

 

 

 

 

 

 

 

 

 


MANAGEMENT

 

 

 

1)

Name of Subject

:

LIM SOON LAN

 

Position

:

DIRECTOR

 

 

 

 

 

 

AUDITOR

 

Auditor

:

EMKAY TANG & CO.

Auditor' Address

:

ROOM 102, 368, JALAN PUDU, 1ST FLOOR, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

 

 

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. CHAN MEI CHEE

 

IC / PP No

:

A1616083

 

New IC No

:

700723-10-5218

 

Address

:

2, JALAN DAMAI PERDANA 9/2H, BANDAR DAMAI PERDANA, CHERAS, 56000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

CIMB BANK BHD

 

 

 

 

 

 

 

 

 

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

25/10/2010

LOAN AGREEMENT, DEED OF ASSIGNMENT, POWER OF ATTORNEY & 3RD PARTY CHARGE

CIMB BANK BERHAD

-

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

:

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

[

X

]

 

Fair 91-120 Days

[

 

]

 

Poor >120 Days

[

 

]

 

 

 

 

 

 

 

 

CLIENTELE

 

Local

:

YES

Percentage

:

100%

Domestic Markets

:

MALAYSIA

Overseas

:

NO

 

 

 

 

 

 

 

 

 

Credit Term

:

N/A

 

 

 

 

 

 

Payment Mode

:

CHEQUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATIONS

 

Goods Traded

:

EQUIPMENT AND FOUNDARY CONSUMABLE PRODUCT

 

 

 

 

Competitor(s)

:

BRASS ALLOYS SDN BHD
DYNACAST (MELAKA) SDN BHD
IRYAS INCORPORATION (M) SDN BHD
SENA DIECASTING INDUSTRIES SDN BHD
TEKNICAST SDN BHD

 

 

 

 

 

 

 

 

 

Total Number of Employees:

YEAR

2014

2011

 


GROUP

N/A

N/A

 

 

 

 

 

 

 

COMPANY

10

10

 

 

 

 

 

 

 

 

Branch

:

NO

 

Other Information:


The Subject is principally engaged in the (as a / as an) supplying equipment and foundary consumable product & other related product.


The Subject is one of the leading trading company in Malaysia specialized in supplying equipment and foundary consumable (ferrous casting & non-ferrous casting), permanent mould diecastings and induction furnace linings.

 

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-55103488

Match

:

N/A

 

 

 

Address Provided by Client

:

N/A

Current Address

:

7, JALAN PENGGAWA U1/75, TAMAN PERINDUSTRIAN BATU 3, 40150 SHAH ALAM, SELANGOR, MALAYSIA.

Match

:

N/A

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations


On 5th June 2014 we contacted one of the staff from the Subject and she provided some information.



FINANCIAL ANALYSIS

 

 

Profitability

 

 

 

 

 

 

Turnover

:

Erratic

[

2008 - 2012

]

 

Profit/(Loss) Before Tax

:

Decreased

[

2008 - 2012

]

 

Return on Shareholder Funds

:

Acceptable

[

21.09%

]

 

Return on Net Assets

:

Acceptable

[

17.90%

]

 

 

 

 

 

 

 

 

The fluctuating turnover reflects the fierce competition among the existing and new market players.The dip in profit could be due to the stiff market competition which reduced the Subject's profit margin. The Subject's management had generated acceptable return for its shareholders using its assets.

 

 

 

 

 

 

 

Working Capital Control

 

 

 

 

 

 

Stock Ratio

:

Favourable

[

16 Days

]

 

Debtor Ratio

:

Unfavourable

[

81 Days

]

 

Creditors Ratio

:

Unfavourable

[

74 Days

]

 

 

 

 

 

 

 

 

The Subject's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The high debtors' ratio could indicate that the Subject was weak in its credit control. However, the Subject could also giving longer credit periods to its customers in order to boost its sales or to capture / retain its market share. 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

[

1.12 Times

]

 

Current Ratio

:

Unfavourable

[

1.27 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

:

Favourable

[

99.21 Times

]

 

Gearing Ratio

:

Favourable

[

0.65 Times

]

 

 

 

 

 

 

 

 

The interest cover showed that the Subject was able to service the interest. The favourable interest cover could indicate that the Subject was making enough profit to pay for the interest accrued. The Subject was lowly geared thus it had a low financial risk. The Subject was mainly financed by its shareholders' funds and internally generated funds. In times of economic slowdown / downturn, the Subject being a lowly geared company, will be able to compete better than those companies which are highly geared in the same industry.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Assessment :

 

 

 

 

 

 

The Subject recorded lower profits as its turnover showed a erratic trend. The Subject's management was unable to control its costs efficiently as its profit showed a downward trend. 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. With the favourable interest cover, the Subject could be able to service all the accrued interest without facing any difficulties. The Subject as a lowly geared company, will be more secured compared to those highly geared companies. It has the ability to meet all its long term obligations.

 

 

 

 

 

 

 

Overall financial condition of the Subject : STABLE

 

 

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

46594 : Wholesale of industrial machinery, equipment and supplies

 

 

INDUSTRY :

MACHINERY

 

 

 

Malaysia is presently the leading manufacturer of automation machinery and equipment (M&E) for the electrical and electronics (E&E) industry in the ASEAN region with a total of 22 companies in production. The machinery and equipment industry has expanded and produce a diverse range of machinery which give importance to the overall industrial development of the country, due to its cross cutting linkages with all industrial sectors.

 

Malaysia implemented Industrial Master Plan 3 (IMP3, 2006-2020), which the machinery and equipment industry has been established as one of the key areas for growth and development. The implementation focused on the manufacture of high value-added and high technology machinery and equipment (M&E). Under this plan, M&E will positioned Malaysia as the regional production hub for high technology and specialized M&E in the ASEAN region for 2012.

 

Furthemore for the year 2012, Malaysia is the largest manufacturing hub of boilers in the Southeast Asia region. The exports are mainly directed to the neighboring countries such as Indonesia, Philippines, Thailand and Cambodia. Exports of machinery and equipment registered a double-digit growth of 12.6% in the frst seven month of 2012 mainly driven by general industrial machinery and equipment as well as specialised machinery for specific industries.

 

For enhance the machinery and equipment (M&E), the government has introduced two major tax incentives for companies investing in the manufacturing sector where the pioneer status and the investment tax allowance. The tax incentives would remain to be a competitive industry within ASEAN.

 

 

OVERALL INDUSTRY OUTLOOK : Average Growth



CREDIT RISK EVALUATION & RECOMMENDATION

 


Incorporated in 1995, the Subject is a Private Limited company, focusing on supplying equipment and foundary consumable product & other related product. 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.


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. Being a small company, the Subject's business operation is supported by 10 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.


The Subject's business performance showed a reverse trend as both its turnover and pre-tax profit have decreased compared to the previous year. Return on shareholders' funds of the Subject was at an acceptable range which indicated that the management was efficient in utilising its funds to generate income. The Subject is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. Being a lowly geared company, the Subject is exposed to low financial risk as it is mainly dependent on its internal funds to finance its business needs. Given a positive net worth standing at MYR 2,078,412, 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 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 promptly.

 



PROFIT AND LOSS ACCOUNT

 

 

 

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

SUMMARY

SUMMARY

SUMMARY

Currency

MYR

MYR

MYR

MYR

MYR

 

 

 

 

 

 

TURNOVER

4,591,831

4,998,812

4,870,406

4,424,620

4,915,994

 

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

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

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

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

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

Total Turnover

4,591,831

4,998,812

4,870,406

4,424,620

4,915,994

Costs of Goods Sold

(3,205,851)

(3,570,649)

-

-

-

 

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

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

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

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

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

Gross Profit

1,385,980

1,428,163

-

-

-

 

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

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

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

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

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

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

565,718

579,993

606,891

504,336

493,414

 

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

565,718

579,993

606,891

504,336

493,414

Taxation

(127,445)

(132,289)

(141,126)

(116,447)

(101,959)

 

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

438,273

447,704

465,765

387,889

391,455

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

1,540,139

1,092,435

876,670

698,781

307,326

 

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

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

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

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

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

As restated

1,540,139

1,092,435

876,670

698,781

307,326

 

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

1,978,412

1,540,139

1,342,435

1,086,670

698,781

DIVIDENDS - Ordinary (paid & proposed)

-

-

(250,000)

(210,000)

-

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

1,978,412

1,540,139

1,092,435

876,670

698,781

 

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

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

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

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

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

 

 

 

 

 

 

Hire purchase

5,760

5,643

-

-

-

 

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

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

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

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

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

 

5,760

5,643

-

-

-

 

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

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

 

 

 

 

 

BALANCE SHEET

 

 

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

2,828,769

2,888,370

1,314,419

266,453

92,862

 

 

 

 

 

 

 

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

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

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

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

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

TOTAL LONG TERM ASSETS

2,828,769

2,888,370

1,314,419

266,453

92,862

 

 

 

 

 

 

Stocks

205,291

160,157

-

-

-

Trade debtors

1,014,342

1,044,698

-

-

-

Other debtors, deposits & prepayments

19,373

5,207

-

-

-

Cash & bank balances

464,818

262,334

-

-

-

 

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

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

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

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

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

TOTAL CURRENT ASSETS

1,703,824

1,472,396

1,916,573

1,584,531

1,586,550

 

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

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

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

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

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

TOTAL ASSET

4,532,593

4,360,766

3,230,992

1,850,984

1,679,412

 

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

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

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

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

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

 

 

 

 

 

 

CURRENT LIABILITIES

Trade creditors

653,820

559,620

-

-

-

Other creditors & accruals

155,244

122,062

-

-

-

Hire purchase & lease creditors

40,008

40,008

-

-

-

Short term borrowings/Term loans

204,600

204,600

-

-

-

Amounts owing to director

247,402

537,802

-

-

-

Provision for taxation

38,251

48,367

-

-

-

 

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

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

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

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

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

TOTAL CURRENT LIABILITIES

1,339,325

1,512,459

1,042,899

743,714

860,534

 

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

364,499

(40,063)

873,674

840,817

726,016

 

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

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

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

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

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

TOTAL NET ASSETS

3,193,268

2,848,307

2,188,093

1,107,270

818,878

 

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

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

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

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

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

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

100,000

100,000

100,000

100,000

100,000

 

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

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

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

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

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

TOTAL SHARE CAPITAL

100,000

100,000

100,000

100,000

100,000

 

 

 

 

 

 

Retained profit/(loss) carried forward

1,978,412

1,540,139

1,092,435

876,670

698,781

Others

-

-

500,000

-

-

 

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

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

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

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

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

TOTAL RESERVES

1,978,412

1,540,139

1,592,435

876,670

698,781

 

 

 

 

 

 

 

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

2,078,412

1,640,139

1,692,435

976,670

798,781

 

 

 

 

 

 

Other long term borrowings

1,060,068

1,113,400

-

-

-

Hire purchase creditors

50,810

90,818

-

-

-

Deferred taxation

3,978

3,950

-

-

-

 

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

1,114,856

1,208,168

495,658

130,600

20,097

 

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

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

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

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

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

 

3,193,268

2,848,307

2,188,093

1,107,270

818,878

 

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

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

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

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

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

 

 

 

 

 

 

 

 

FINANCIAL RATIO

 

 

 

TYPES OF FUNDS

 

 

 

 

 

Cash

464,818

262,334

-

-

-

Net Liquid Funds

464,818

262,334

-

-

-

Net Liquid Assets

159,208

(200,220)

873,674

840,817

726,016

Net Current Assets/(Liabilities)

364,499

(40,063)

873,674

840,817

726,016

Net Tangible Assets

3,193,268

2,848,307

2,188,093

1,107,270

818,878

Net Monetary Assets

(955,648)

(1,408,388)

378,016

710,217

705,919

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

1,355,486

1,448,826

-

-

-

Total Liabilities

2,454,181

2,720,627

1,538,557

874,314

880,631

Total Assets

4,532,593

4,360,766

3,230,992

1,850,984

1,679,412

Net Assets

3,193,268

2,848,307

2,188,093

1,107,270

818,878

Net Assets Backing

2,078,412

1,640,139

1,692,435

976,670

798,781

Shareholders' Funds

2,078,412

1,640,139

1,692,435

976,670

798,781

Total Share Capital

100,000

100,000

100,000

100,000

100,000

Total Reserves

1,978,412

1,540,139

1,592,435

876,670

698,781

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

0.35

0.17

-

-

-

Liquid Ratio

1.12

0.87

-

-

-

Current Ratio

1.27

0.97

1.84

2.13

1.84

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

16

12

-

-

-

Debtors Ratio

81

76

-

-

-

Creditors Ratio

74

57

-

-

-

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

0.65

0.88

-

-

-

Liabilities Ratio

1.18

1.66

0.91

0.90

1.10

Times Interest Earned Ratio

99.21

103.78

-

-

-

Assets Backing Ratio

31.93

28.48

21.88

11.07

8.19

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

12.32

11.60

12.46

11.40

10.04

Net Profit Margin

9.54

8.96

9.56

8.77

7.96

Return On Net Assets

17.90

20.56

27.74

45.55

60.25

Return On Capital Employed

17.67

20.28

27.74

45.55

60.25

Return On Shareholders' Funds/Equity

21.09

27.30

27.52

39.72

49.01

Dividend Pay Out Ratio (Times)

0.00

0.00

0.54

0.54

-

NOTES TO ACCOUNTS

 

 

 

 

 

Contingent Liabilities

0

0

 

 

 





 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.59.06

UK Pound

1

Rs.99.35

Euro

1

Rs.80.62

 

INFORMATION DETAILS

 

Analysis Done by :

KAR

 

 

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.