MIRA INFORM REPORT

 

 

Report Date :

23.05.2014

 

IDENTIFICATION DETAILS

 

Name :

SUI HIN CHAN ENTERPRISE (M) SDN. BHD.

 

 

Registered Office :

19 & 21 (LOT 112 & 113), Jalan Industri 3/4, Taman Perindustrian Temerloh, 28400 Mentakab, Pahang

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2012

 

 

Date of Incorporation :

13.11.2009

 

 

Com. Reg. No.:

879056-V

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Trading Of Food Products, Grocery Products And Provision Goods

 

 

No. of Employees

50

 

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 but correct

Litigation :

Clear

 

NOTES :

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

 

ECGC Country Risk Classification List – March 31, 2014

 

Country Name

Previous Rating

(31.12.2013)

Current Rating

(31.03.2014)

Malaysia

A1

A1

 

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.

:

879056-V

COMPANY NAME

:

SUI HIN CHAN ENTERPRISE (M) SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

13/11/2009

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

19 & 21 (LOT 112 & 113), JALAN INDUSTRI 3/4, TAMAN PERINDUSTRIAN TEMERLOH, 28400 MENTAKAB, PAHANG, MALAYSIA.

BUSINESS ADDRESS

:

19 & 21 (LOT 112 & 113), JALAN INDUSTRI 3/4, TAMAN PERINDUSTRIAN TEMERLOH, 28400 MENTAKAB, PAHANG, MALAYSIA.

TEL.NO.

:

09-2770818

FAX.NO.

:

09-2773843

CONTACT PERSON

:

TEE SIEW HEW ( MANAGING DIRECTOR )

INDUSTRY CODE

:

46329

PRINCIPAL ACTIVITY

:

TRADING OF FOOD PRODUCTS, GROCERY PRODUCTS AND PROVISION GOODS

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 31,811,304 [2012]

NET WORTH

:

MYR 1,017,441 [2012]

STAFF STRENGTH

:

50 [2014]

BANKER (S)

:

PUBLIC BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

HIGH

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 food products, grocery products and provision goods.

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

13/11/2009

MYR 500,000.00

MYR 100.00

 

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

 

Name

Address

IC/PP/Loc No

Shareholding

(%)

MS. TEE SIEW HEW +

F255, JALAN SELAYANG 3, TAMAN SELAYANG, 28000 TEMERLOH, PAHANG, MALAYSIA.

600102-08-6394 5770608

310,000.00

62.00

MR. YAP KEAN CHONG +

F255, JALAN SELAYANG 3, TAMAN SELAYANG, 28000 TEMERLOH, PAHANG, MALAYSIA.

821115-14-5479

95,000.00

19.00

MR. YAP KEAN SING +

F255, JALAN SELAYANG 3, TAMAN SELAYANG, 28000 TEMERLOH, PAHANG, MALAYSIA.

860224-14-5381

95,000.00

19.00

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

------

500,000.00

100.00

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

=====

+ Also Director

DIRECTORS



DIRECTOR 1

 

Name Of Subject

:

MR. YAP KEAN CHONG

Address

:

F255, JALAN SELAYANG 3, TAMAN SELAYANG, 28000 TEMERLOH, PAHANG, MALAYSIA.

New IC No

:

821115-14-5479

Date of Birth

:

15/11/1982

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

02/01/2013

 

DIRECTOR 2

 

Name Of Subject

:

MR. YAP KEAN SING

Address

:

F255, JALAN SELAYANG 3, TAMAN SELAYANG, 28000 TEMERLOH, PAHANG, MALAYSIA.

New IC No

:

860224-14-5381

Date of Birth

:

24/02/1986

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

02/01/2013

 

DIRECTOR 3

 

Name Of Subject

:

MS. TEE SIEW HEW

Address

:

F255, JALAN SELAYANG 3, TAMAN SELAYANG, 28000 TEMERLOH, PAHANG, MALAYSIA.

IC / PP No

:

5770608

New IC No

:

600102-08-6394

Date of Birth

:

02/01/1960

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

13/11/2009

 


MANAGEMENT

 

 

 

1)

Name of Subject

:

TEE SIEW HEW

Position

:

MANAGING DIRECTOR

 

 

AUDITOR

 

Auditor

:

WONG YENG MUN & CO.

Auditor' Address

:

19, JALAN 1/57A, BATU 3, JALAN IPOH, 1ST FLOOR, 51200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. LEE MOOI YOKE

IC / PP No

:

A0899404

New IC No

:

680421-10-6316

Address

:

12A, JALAN PJU 1A/43B, ARA DAMANSARA, 47301 PETALING JAYA, SELANGOR, MALAYSIA.

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

PUBLIC BANK BHD

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

20/07/2010

OPEN ALL MONIES 3RD PARTY 1ST LEGAL CHARGE & FACILITIES AGREEMENT & JOINT AND SEVERAL GUARANTEE & CORPORATE GUARANTEE & LETTER OF OFFER

PUBLIC BANK BERHAD

MYR 2,500,000.00

Unsatisfied

2

17/01/2012

FACILITIES AGREEMENT & OPEN ALL MONIES 1ST PARTY CHARGE & JOINT AND SEVERAL GUARANTEE & LETTER OF OFFER

PUBLIC BANK BERHAD

-

Unsatisfied

3

10/01/2014

OPEN ALL MONIES 3RD PARTY CHARGE & FACILITIES AGREEMENT & JOINT AND SEVERAL GUARANTEE & CORPORATE GUARANTEE & LETTER OF OFFER DATED 9TH OF OCTOBER, 2013 AND EXTENSION LETTER OF OFFER DATED 14TH OF OCTOBER, 2013 FROM M/S PUBLIC BANK BERHAD

PUBLIC BANK BERHAD

MYR 680,000.00

Unsatisfied

4

17/01/2014

1ST PARTY 1ST LEGAL CHARGE & MASTER FACILITY AGREEMENT (CASH LINE-I) & FACILITY AGREEMENT (ACCEPTED BILLS-I) & ASSET SALE AGREEMENT & LETTER OF GUARANTEE & LETTER OF OFFER DATED 3RD OF SEPTEMBER, 2013

MAYBANK ISLAMIC BERHAD

MYR 2,475,000.00

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

Percentage

:

40%

Overseas

:

YES

Percentage

:

60%

Import Countries

:

ASIA


The Subject refused to provide any name of trade/service supplier and we are unable to conduct any trade enquiry. However, from financial historical data we conclude that :

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

]

Average 61-90 Days

[

X

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]

 

 

CLIENTELE

Local

:

YES

Percentage

:

100%

Domestic Markets

:

MALAYSIA

Overseas

:

NO

Credit Term

:

N/A

Payment Mode

:

CASH

 

OPERATIONS

 

Goods Traded

:

FOOD PRODUCTS, GROCERY PRODUCTS AND PROVISION GOODS

Competitor(s)

:

7-ELEVEN MALAYSIA SDN BHD
CHECKERS HYPERMARKET SDN BHD
FARM FRESH AGRICULTURE SDN BHD
IREKA SDN BHD
PACIFIC DEPARTMENT STORE SDN BHD

 

Total Number of Employees:

 

YEAR

2014

2013

2011

2010

GROUP

N/A

N/A

N/A

N/A

COMPANY

50

50

20

10

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) trading of food products, grocery products and provision goods.

The Subject sells food products such as onions, dry chillies and others.

The Subject sells its products both in loose and large quantities.

The Subject is also able to provide transport delivery for large quantity purchase.

According to the Subject, its sales increases during the festive season.

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

09-2770818

Match

:

N/A

Address Provided by Client

:

19 & 21 (LOT 112 & 113), JALAN INDUSTRI 3/4, TAMAN PERINDUSTRIAN TEMERLOH,28400,MENTAKAB,PAHANG.

Current Address

:

19 & 21 (LOT 112 & 113), JALAN INDUSTRI 3/4, TAMAN PERINDUSTRIAN TEMERLOH, 28400 MENTAKAB, PAHANG, MALAYSIA.

Match

:

YES

Latest Financial Accounts

:

YES

 

Other Investigations


On 19th May 2014 we contacted one of the staff from the Subject and she provided some information.

FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Erratic

[

2010 - 2012

]

Profit/(Loss) Before Tax

:

Decreased

[

2010 - 2012

]

Return on Shareholder Funds

:

Unfavourable

[

(3.77%)

]

Return on Net Assets

:

Unfavourable

[

5.67%

]

The fluctuating turnover reflects the fierce competition among the existing and new market players.The Subject's profit fell sharply because of the high operating costs incurred. The Subject's unfavourable returns on shareholders' funds indicate the management's inefficiency in utilising its assets to generate returns.

Working Capital Control

Stock Ratio

:

Favourable

[

19 Days

]

Debtor Ratio

:

Favourable

[

23 Days

]

Creditors Ratio

:

Favourable

[

32 Days

]

The Subject's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The favourable debtors' days could be due to the good credit control measures implemented by the Subject. The Subject had a favourable creditors' ratio where the Subject could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

Liquidity

Liquid Ratio

:

Unfavourable

[

0.56 Times

]

Current Ratio

:

Unfavourable

[

0.89 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

[

1.41 Times

]

Gearing Ratio

:

Unfavourable

[

2.24 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 :

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. 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. 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 : 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
(Source : Department of Statistics / Economic Report / Bank Negara Report)

 

INDUSTRY ANALYSIS

 

MSIC CODE

46329 : Wholesale of other foodstuffs

INDUSTRY :

TRADING

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

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

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

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

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

OVERALL INDUSTRY OUTLOOK : Average Growth

 

CREDIT RISK EVALUATION & RECOMMENDATION

 

 


Incorporated in 2009, the Subject is a Private Limited company, focusing on trading of food products, grocery products and provision goods. The Subject has been in business for less than 5 years and it has slowly been building up contact with its clients while competing in the industry. However, it has yet to enjoy a stable market shares as it need to compete many well established players in the same field. Without a strong capital, the business expansion opportunities of the Subject is limited.

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. The Subject is operating on a medium scale and it has approximately 50 employees in its business operations. Overall, we regard that the Subject's management capability is average. This indicates that the Subject has greater potential to improve its business performance and raising income for the Subject.

The Subject's business performance showed a reverse trend as both its turnover and pre-tax profit have decreased compared to the previous year. 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 high gearing ratio clearly implied that the Subject was supported by more debt than equity. Thus, the Subject is exposed to high financial risk. Given a positive net worth standing at MYR 1,017,441, the Subject should be able to maintain its business in the near terms.

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.

In view of its poor financial performance, we only recommend credit be granted to the Subject with close monitoring.

 

 

PROFIT AND LOSS ACCOUNT

 

 

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

SUI HIN CHAN ENTERPRISE (M) SDN. BHD.

 

Financial Year End

2012-12-31

2011-12-31

2010-12-31

Months

12

12

12

Consolidated Account

Company

Company

Company

Audited Account

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

Financial Type

FULL

FULL

SUMMARY

Currency

MYR

MYR

MYR

TURNOVER

31,811,304

34,770,610

31,419,640

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

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

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

Total Turnover

31,811,304

34,770,610

31,419,640

Costs of Goods Sold

(27,778,545)

(31,147,206)

-

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

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

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

Gross Profit

4,032,759

3,623,404

-

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

32,443

430,550

305,368

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

32,443

430,550

305,368

Taxation

(70,829)

(97,654)

(82,437)

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

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

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

PROFIT/(LOSS) AFTER TAXATION

(38,386)

332,896

222,931

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

555,827

222,931

-

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

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

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

As restated

555,827

222,931

-

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

517,441

555,827

222,931

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

517,441

555,827

222,931

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Bank overdraft

7,884

236

-

Bankers' acceptance

3,855

7,371

-

Hire purchase

32,122

34,564

-

Term loan / Borrowing

16,436

-

-

Others

18,686

21,373

-

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

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

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

78,983

63,544

-

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

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

 

 

 

BALANCE SHEET

 

 

SUI HIN CHAN ENTERPRISE (M) SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

2,523,029

1,529,165

1,039,806

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

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

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

TOTAL LONG TERM ASSETS

2,523,029

1,529,165

1,039,806

Stocks

1,647,130

1,243,536

-

Trade debtors

1,974,657

1,505,191

-

Other debtors, deposits & prepayments

151,073

201,844

-

Amount due from related companies

86,823

341,196

-

Amount due from director

11,754

40,778

-

Cash & bank balances

489,215

1,326,924

-

Others

79,170

-

-

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

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

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

TOTAL CURRENT ASSETS

4,439,822

4,659,469

5,066,005

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

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

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

TOTAL ASSET

6,962,851

6,188,634

6,105,811

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

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

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

CURRENT LIABILITIES

Trade creditors

2,415,669

3,783,993

-

Other creditors & accruals

918,661

556,711

-

Hire purchase & lease creditors

436,678

178,695

-

Bank overdraft

847,757

-

-

Short term borrowings/Term loans

33,336

-

-

Bill & acceptances payable

105,000

151,000

-

Amounts owing to related companies

242,081

31,690

-

Amounts owing to director

-

60,000

-

Provision for taxation

-

21,404

-

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

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

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

TOTAL CURRENT LIABILITIES

4,999,182

4,783,493

5,011,751

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

(559,360)

(124,024)

54,254

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

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

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

TOTAL NET ASSETS

1,963,669

1,405,141

1,094,060

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

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

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

SHARE CAPITAL

Ordinary share capital

500,000

500,000

500,000

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

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

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

TOTAL SHARE CAPITAL

500,000

500,000

500,000

Retained profit/(loss) carried forward

517,441

555,827

222,931

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

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

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

TOTAL RESERVES

517,441

555,827

222,931

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

1,017,441

1,055,827

722,931

Long term loans

184,911

-

-

Hire purchase creditors

671,317

307,314

-

Deferred taxation

90,000

42,000

-

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

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

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

TOTAL LONG TERM LIABILITIES

946,228

349,314

371,129

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

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

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

1,963,669

1,405,141

1,094,060

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

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

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

 

 

 

 

FINANCIAL RATIO

 

 

SUI HIN CHAN ENTERPRISE (M) SDN. BHD.

 

TYPES OF FUNDS

Cash

489,215

1,326,924

-

Net Liquid Funds

(463,542)

1,175,924

-

Net Liquid Assets

(2,206,490)

(1,367,560)

54,254

Net Current Assets/(Liabilities)

(559,360)

(124,024)

54,254

Net Tangible Assets

1,963,669

1,405,141

1,094,060

Net Monetary Assets

(3,152,718)

(1,716,874)

(316,875)

BALANCE SHEET ITEMS

Total Borrowings

2,278,999

637,009

-

Total Liabilities

5,945,410

5,132,807

5,382,880

Total Assets

6,962,851

6,188,634

6,105,811

Net Assets

1,963,669

1,405,141

1,094,060

Net Assets Backing

1,017,441

1,055,827

722,931

Shareholders' Funds

1,017,441

1,055,827

722,931

Total Share Capital

500,000

500,000

500,000

Total Reserves

517,441

555,827

222,931

LIQUIDITY (Times)

Cash Ratio

0.10

0.28

-

Liquid Ratio

0.56

0.71

-

Current Ratio

0.89

0.97

1.01

WORKING CAPITAL CONTROL (Days)

Stock Ratio

19

13

-

Debtors Ratio

23

16

-

Creditors Ratio

32

44

-

SOLVENCY RATIOS (Times)

Gearing Ratio

2.24

0.60

-

Liabilities Ratio

5.84

4.86

7.45

Times Interest Earned Ratio

1.41

7.78

-

Assets Backing Ratio

3.93

2.81

2.19

PERFORMANCE RATIO (%)

Operating Profit Margin

0.10

1.24

0.97

Net Profit Margin

(0.12)

0.96

0.71

Return On Net Assets

5.67

35.16

27.91

Return On Capital Employed

3.43

31.20

27.91

Return On Shareholders' Funds/Equity

(3.77)

31.53

30.84

Dividend Pay Out Ratio (Times)

0.00

0.00

-

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

 


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.58.57

UK Pound

1

Rs.98.87

Euro

1

Rs.80.05

 

INFORMATION DETAILS

 

Analysis Done by :

SUB

 

 

Report Prepared by :

PDT

 

               

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.