MIRA INFORM REPORT

 

 

Report Date :

11.11.2014

 

IDENTIFICATION DETAILS

 

Name :

FUSAN CLAYS & GLAZES SDN. BHD.

 

 

Registered Office :

Suite 102, 46, Persiaran Mergastua, Jalan 56, Kepong Baru, 1st Floor, 52100 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2013

 

 

Date of Incorporation :

20.03.1997

 

 

Com. Reg. No.:

423909-W

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Manufacturing of Composite Glaze,

 

 

No. of Employees :

25 [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 – June 1, 2014

 

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

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 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.

:

423909-W

COMPANY NAME

:

FUSAN CLAYS & GLAZES SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

20/03/1997

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

SUITE 102, 46, PERSIARAN MERGASTUA, JALAN 56, KEPONG BARU, 1ST FLOOR, 52100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

31-2, 2ND FLOOR, BLOK J, JAYA ONE, JALAN UNIVERSITI, SEKSYEN 13, 46200 PETALING JAYA, SELANGOR, MALAYSIA.

TEL.NO.

:

03-79607863

FAX.NO.

:

03-79604831

CONTACT PERSON

:

KONG TECK SENG ( MANAGING DIRECTOR )

INDUSTRY CODE

:

23921

PRINCIPAL ACTIVITY

:

MANUFACTURING OF COMPOSITE GLAZE

AUTHORISED CAPITAL

:

MYR 5,000,000.00 DIVIDED INTO
ORDINARY SHARE 5,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 2,339,460.00 DIVIDED INTO
ORDINARY SHARES 2 CASH AND 2,339,458 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 20,038,229 [2013]

NET WORTH

:

MYR 4,186,667 [2013]

STAFF STRENGTH

:

25 [2014]

BANKER (S)

:

EON BANK BHD
UNITED OVERSEAS BANK (MALAYSIA) BHD
ALLIANCE BANK MALAYSIA BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

PAYMENT

:

FAIR

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

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) manufacturing of composite glaze.

 

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

 

The immediate holding company of the Subject is H. ROGERS (M) SDN. BHD., a company incorporated in MALAYSIA.

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

15/02/2013

MYR 5,000,000.00

MYR 2,339,460.00

09/06/1997

MYR 1,000,000.00

MYR 630,000.00

27/03/1997

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

(%)

H. ROGERS (M) SDN. BHD.

H-93-2, BLOCK H, JAYA ONE, 72A, JALAN UNIVERSITI, 46200 PETALING JAYA, SELANGOR, MALAYSIA.

134955D

2,339,460.00

100.00

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

------

2,339,460.00

100.00

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

=====

+ Also Director



DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MS. FOO MEE NEE

Address

:

5, JALAN SRI HARTAMAS 10, 50480 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

A0843936

New IC No

:

671029-08-5720

Date of Birth

:

29/10/1967

Nationality

:

MALAYSIAN

Date of Appointment

:

01/07/2012

 

DIRECTOR 2

 

Name Of Subject

:

MR. KONG TECK WOON

Address

:

1, JALAN 21/14, SEA PARK, 46300 PETALING JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

A1926989

New IC No

:

710702-10-5023

Date of Birth

:

02/07/1971

Nationality

:

MALAYSIAN

Date of Appointment

:

15/07/2008

 

DIRECTOR 3

 

Name Of Subject

:

MR. KONG TECK SENG

Address

:

1, JALAN 21/14, SEA PARK, 46300 PETALING JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

A0122008

New IC No

:

641226-10-7469

Date of Birth

:

26/12/1964

Nationality

:

MALAYSIAN

Date of Appointment

:

20/03/1997

 


MANAGEMENT

 

 

 

1)

Name of Subject

:

KONG TECK SENG

Position

:

MANAGING DIRECTOR

 

 

 

AUDITOR

 

Auditor

:

SEOW & CO.

Auditor' Address

:

SUITE 101, 46, PERSIARAN MERGASTUA, JALAN 56, KEPONG BARU, FIRST FLOOR, 52100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. NG KAM MAY

IC / PP No

:

A0791198

New IC No

:

670928-05-5088

Address

:

11A, JALAN SS 22/28, DAMANSARA JAYA, 47400 PETALING JAYA, SELANGOR, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

 

1)

Name

:

EON BANK BHD

 

2)

Name

:

UNITED OVERSEAS BANK (MALAYSIA) BHD

 

3)

Name

:

ALLIANCE BANK MALAYSIA BHD

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

20/05/1998

FIXED

EON BANK BERHAD

MYR 618,000.00

Satisfied

2

20/05/1998

FIXED

EON BANK BERHAD

MYR 500,000.00

Satisfied

3

19/09/2000

N/A

ARABMALAYSIAN FINANCE BERHAD

MYR 100,000.00

Satisfied

4

21/11/2001

FIXED

EON BANK BERHAD

MYR 600,000.00

Satisfied

5

21/11/2001

FIXED

EON BANK BERHAD

MYR 350,000.00

Satisfied

6

14/05/2002

N/A

AMFINANCE BERHAD

MYR 400,000.00

Satisfied

7

08/07/2004

N/A

EXPORTIMPORT BANK OF MALAYSIA BERHAD

MYR 500,000.00

Satisfied

8

08/07/2004

N/A

EXPORTIMPORT BANK OF MALAYSIA BERHAD

MYR 500,000.00

Satisfied

9

07/09/2006

FIRST LEGAL CHARGE

UNITED OVERSEAS BANK (MALAYSIA) BHD.

MYR 2,600,000.00

Unsatisfied

10

07/09/2006

FIRST LEGAL CHARGE

UNITED OVERSEAS BANK (MALAYSIA) BHD.

MYR 400,000.00

Unsatisfied

11

27/12/2007

THIRD LEGAL CHARGE

UNITED OVERSEAS BANK (MALAYSIA) BHD.

MYR 800,000.00

Unsatisfied

12

27/12/2007

MEMO OF LEGAL CHARGE

UNITED OVERSEAS BANK (MALAYSIA) BHD.

-

Unsatisfied

13

15/01/2009

1ST LEGAL CHARGE

UNITED OVERSEAS BANK (MALAYSIA) BHD.

MYR 139,000.00

Unsatisfied

14

23/02/2010

MEMO OF LEGAL CHARGE

UNITED OVERSEAS BANK (MALAYSIA) BHD.

-

Unsatisfied

15

12/01/2011

ALL MONIES LOAN AGREEMENT CUM DEED OF ASSIGNMENT

UNITED OVERSEAS BANK (MALAYSIA) BHD.

-

Unsatisfied

16

22/06/2011

2ND LEGAL CHARGE UNDER THE NATIONAL LAND CODE

UNITED OVERSEAS BANK (MALAYSIA) BHD.

MYR 5,600,000.00

Unsatisfied

17

22/06/2011

4TH LEGAL CHARGE UNDER THE NATIONAL LAND CODE

UNITED OVERSEAS BANK (MALAYSIA) BHD.

MYR 2,200,000.00

Unsatisfied

18

21/03/2012

MEMO OF DEPOSIT

ALLIANCE BANK MALAYSIA BHD.

-

Unsatisfied

 

 

LITIGATION 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.

 

No blacklisted record & debt collection case was found in our defaulters' databank.

 

 

PAYMENT RECORD

 

SOURCES OF RAW MATERIALS:

Local

:

YES

Overseas

:

YES



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

 

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

]

Average 61-90 Days

[

]

Fair 91-120 Days

[

X

]

Poor >120 Days

[

]

 

 

CLIENTELE

Local

:

YES

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Export Market

:

ASIA

Credit Term

:

30 - 60 DAYS

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)

 

OPERATIONS

Products manufactured

:

COMPOSITE GLAZE

Competitor(s)

:

GUOCERA TILE INDUSTRIES SDN BHD

Member(s) / Affiliate(s)

:

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

Ownership of premises

:

OWNED

 

Total Number of Employees:

 

YEAR

2014

2013

2012

2011

2010


GROUP

N/A

N/A

N/A

N/A

N/A

COMPANY

25

25

25

20

20

 

Branch

:

NO

 

Other Information:


The Subject is principally engaged in the (as a / as an) manufacturing of composite glaze.

The Subject specialises in custom blending minerals/chemicals for special applications.

The Subject undertakes custom blending of additives, clay-blends, clay-bodies, composite-glazes, pigments and others.

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that:

 

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-79607863

Match

:

N/A

Address Provided by Client

:

J-32-2, BLOCK-J, N 72A/5 JALAN UNIVERCITY 46200 PETALING JAYA SELANGOR

Current Address

:

31-2, 2ND FLOOR, BLOK J, JAYA ONE, JALAN UNIVERSITI, SEKSYEN 13, 46200 PETALING JAYA, SELANGOR, MALAYSIA.

Match

:

NO

Latest Financial Accounts

:

YES

 

Other Investigations


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

The Subject is not aware of the address provided.

FINANCIAL ANALYSIS

 

Profitability

Turnover

:

Erratic

[

2009 - 2013

]

Profit/(Loss) Before Tax

:

Increased

[

2009 - 2013

]

Return on Shareholder Funds

:

Favourable

[

30.76%

]

Return on Net Assets

:

Favourable

[

37.32%

]

The fluctuating turnover reflects the fierce competition among the existing and new market players.The higher profit could be attributed to the increase in turnover. Generally the Subject was profitable. The favourable return on shareholders' funds and return on net assets indicate that the Subject's management was efficient in utilising the assets to generate returns.

Working Capital Control

Stock Ratio

:

Favourable

[

10 Days

]

Debtor Ratio

:

Favourable

[

47 Days

]

Creditors Ratio

:

Unfavourable

[

75 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 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

[

1.00 Times

]

Current Ratio

:

Unfavourable

[

1.07 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

:

Acceptable

[

3.53 Times

]

Gearing Ratio

:

Unfavourable

[

1.16 Times

]

The Subject's interest cover was slightly low. If there is no sharp fall in its profit or sudden increase in the interest rates, we believe the Subject is able to generate sufficient income to service its interest and repay the loans. 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 :

Although the turnover was erratic, the Subject had maintained a steady growth in its profit. This indicate the management's efficiency in controlling its costs and profitability. The Subject was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the Subject should be able to repay its short term obligations. The Subject had an acceptable interest cover. If there is no sudden sharp increase in interest rate or fall in the Subject's profit, we do believe the Subject is able to generate sufficient cash flow to service its interest payment. 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 : FAIR

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2010

2011

2012

2013

2014**

Population ( Million)

28.35

28.70

29.30

29.80

30.30

Gross Domestic Products ( % )

7.2

5.1

5.6

5.3

6.0

Domestic Demand ( % )

6.3

8.2

9.4

5.6

6.4

Private Expenditure ( % )

8.1

8.2

8.0

7.4

7.9

Consumption ( % )

6.7

7.1

1.0

5.7

6.5

Investment ( % )

17.7

12.2

11.7

13.3

12.0

Public Expenditure ( % )

3.8

8.4

13.3

1.2

2.3

Consumption ( % )

0.2

16.1

11.3

(1.2)

2.1

Investment ( % )

2.8

(0.3)

15.9

4.2

2.6

Balance of Trade ( MYR Million )

118,356

116,058

106,300

110,700

52,314

Government Finance ( MYR Million )

(40,482)

(45,511)

(42,297)

(39,993)

(37,291)

Government Finance to GDP / Fiscal Deficit ( % )

(5.6)

(5.4)

(4.5)

(4.0)

(3.5)

Inflation ( % Change in Composite CPI)

5.1

3.1

1.6

2.5

3.3

Unemployment Rate

3.9

3.3

3.2

3.0

3.0

Net International Reserves ( MYR Billion )

329

415

427

-

417

Average Risk-Weighted Capital Adequacy Ratio ( % )

2.20

3.50

2.20

-

-

Average 3 Months of Non-performing Loans ( % )

15.30

14.80

14.70

-

-

Average Base Lending Rate ( % )

6.30

6.60

6.53

6.53

-

Business Loans Disbursed( % )

14.7

15.3

32.2

-

-

Foreign Investment ( MYR Million )

22,517.9

23,546.1

26,230.4

38,238.0

-

Consumer Loans ( % )

-

-

-

-

-

Registration of New Companies ( No. )

44,148

45,455

45,441

46,321

-

Registration of New Companies ( % )

6.2

3.0

(0.0)

1.9

-

Liquidation of Companies ( No. )

25,585

132,476

-

-

-

Liquidation of Companies ( % )

(34.5)

417.8

-

-

-

Registration of New Business ( No. )

271,414

284,598

324,761

329,895

-

Registration of New Business ( % )

-

-

-

-

-

Business Dissolved ( No. )

19,738

20,121

-

-

-

Business Dissolved ( % )

2.0

1.9

-

-

-

Sales of New Passenger Cars (' 000 Unit )

543.6

535.1

552.2

-

-

Cellular Phone Subscribers ( Million )

32.8

35.3

38.5

43.0

-

Tourist Arrival ( Million Persons )

24.6

24.7

25.0

25.7

-

Hotel Occupancy Rate ( % )

63.0

60.6

62.4

62.6

-

Credit Cards Spending ( % )

14.1

15.6

12.6

-

-

Bad Cheque Offenders (No.)

33,568

32,627

26,982

28,876

-

Individual Bankruptcy ( No.)

18,119

19,167

19,575

21,984

-

Individual Bankruptcy ( % )

11.7

5.8

2.1

12.3

-

 

INDUSTRIES ( % of Growth ):

2010

2011

2012

2013

2014**

Agriculture

2.4

5.8

1.0

2.1

3.8

Palm Oil

(3.4)

10.8

(0.3)

2.6

-

Rubber

9.9

6.1

(7.9)

(10.1)

-

Forestry & Logging

(3.3)

(7.6)

(4.5)

(7.8)

-

Fishing

5.6

2.1

4.3

1.6

-

Other Agriculture

7.9

7.1

6.4

8.2

-

Industry Non-Performing Loans ( MYR Million )

508.4

634.1

-

-

-

% of Industry Non-Performing Loans

2.1

3.2

-

-

-

Mining

(0.3)

(5.4)

1.4

0.9

(0.8)

Oil & Gas

0.5

(1.7)

-

-

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

49.7

46.5

-

-

-

% of Industry Non-performing Loans

0.1

0.1

-

-

-

Manufacturing #

11.9

4.7

4.8

3.4

6.6

Exported-oriented Industries

12.1

4.1

6.5

3.3

5.6

Electrical & Electronics

28.4

(4.0)

12.7

6.9

13.3

Rubber Products

25.3

20.7

3.0

11.7

(0.3)

Wood Products

20.1

(5.1)

8.7

(2.7)

5.1

Textiles & Apparel

(0.4)

13.2

(7.1)

(2.6)

11.5

Domestic-oriented Industries

16.3

10.7

1.7

6.8

9.4

Food, Beverages & Tobacco

3.0

4.8

2.7

3.6

6.1

Chemical & Chemical Products

16.2

10.0

10.8

5.6

-

Plastic Products

2.4

3.8

-

-

-

Iron & Steel

29.3

2.2

(6.6)

5.0

0.1

Fabricated Metal Products

14.9

21.8

13.8

9.9

2.9

Non-metallic Mineral

20.2

12.1

2.9

(2.0)

5.4

Transport Equipment

36.5

12.0

3.4

13.8

22.9

Paper & Paper Products

18.7

9.5

3.1

1.8

4.7

Crude Oil Refineries

(11.4)

9.3

-

-

-

Industry Non-Performing Loans ( MYR Million )

6,217.5

6,537.2

-

-

-

% of Industry Non-Performing Loans

23.8

25.7

-

-

-

Construction

11.4

4.7

18.6

10.9

10.0

Industry Non-Performing Loans ( MYR Million )

4,038.5

3,856.9

-

-

-

% of Industry Non-Performing Loans

10.7

10.2

-

-

-

Services

7.4

7.0

6.4

5.9

6.2

Electric, Gas & Water

7.8

3.5

4.4

4.2

3.6

Transport, Storage & Communication

7.7

6.5

7.1

7.3

7.5

Wholesale, Retail, Hotel & Restaurant

4.7

5.2

4.7

5.9

6.9

Finance, Insurance & Real Estate

6.10

6.90

9.70

3.70

4.65

Government Services

5.9

12.4

9.4

8.3

6.1

Other Services

4.4

5.1

3.9

5.1

4.8

Industry Non-Performing Loans ( MYR Million )

7,384.6

6,825.2

-

-

-

% of Industry Non-Performing Loans

25.7

23.4

-

-

-

* Estimate / Preliminary

** Forecast

# Based On Manufacturing Production Index 

 

INDUSTRY ANALYSIS

 

MSIC CODE

 

23921 : Manufacture of non-refractory ceramic

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 1997, the Subject is a Private Limited company, focusing on manufacturing of composite glaze. 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. A paid up capital of MYR 2,339,460 allows the Subject to expand its business more comfortably. Having strong support from its holding company has enabled the Subject to remain competitive despite the challenging business environment.

Over the years, the Subject has penetrated into both the local and overseas market. The Subject has positioned itself in the global market and is competing in the industry. Its stable clientele base will enable the Subject to further enhance its business in the near term. Being a small company, the Subject's business operation is supported by 25 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. Based on the higher profitability, the Subject has generated a favourable return based on its existing shareholders' funds 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. 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 4,186,667, 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 overall payment habit is fair and this clearly implied a weak credit control of the Subject.

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

 

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

FUSAN CLAYS & GLAZES SDN. BHD.

 

Financial Year End

2013-12-31

2012-12-31

2011-12-31

2010-12-31

2009-12-31

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

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

20,038,229

18,938,308

20,581,362

19,475,680

18,303,270

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

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

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

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

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

Total Turnover

20,038,229

18,938,308

20,581,362

19,475,680

18,303,270

Costs of Goods Sold

(18,707,662)

(16,697,797)

-

(17,486,699)

(16,516,649)

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

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

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

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

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

Gross Profit

1,330,567

2,240,511

-

1,988,981

1,786,621

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

1,278,028

215,426

243,234

258,118

234,038

SHARE OF PROFITS/(LOSSES) OF ASSOCIATED COMPANIES

-

-

-

23,039

(29,854)

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

1,278,028

215,426

243,234

281,157

204,184

Taxation

9,993

(106,756)

(20,990)

(146,493)

(55,430)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

1,288,021

108,670

222,244

134,664

148,754

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

1,198,501

1,089,831

953,954

936,263

876,509

Prior year adjustment

-

-

13,633

-

11,000

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

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

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

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

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

As restated

1,198,501

1,089,831

967,587

936,263

887,509

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

2,486,522

1,198,501

1,189,831

1,070,927

1,036,263

TRANSFER TO RESERVES - General

360,685

-

-

-

-

DIVIDENDS - Ordinary (paid & proposed)

(1,000,000)

-

(100,000)

(116,973)

(100,000)

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

1,847,207

1,198,501

1,089,831

953,954

936,263

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Bank overdraft

157,817

151,736

-

67,020

81,790

Bankers' acceptance

208,961

215,530

-

143,077

136,861

Hire purchase

26,141

34,911

-

13,075

-

Term loan / Borrowing

28,663

43,221

-

20,495

21,952

Trust receipts

93,133

65,386

-

14,192

17,330

Others

(10,184)

(10,272)

-

27,817

27,156

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

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

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

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

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

504,531

500,512

-

285,676

285,089

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

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

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

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

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

 

 

 

BALANCE SHEET

 

 

FUSAN CLAYS & GLAZES SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

2,205,960

3,887,338

3,913,535

3,155,636

2,455,785

Associated companies

-

1,133,566

-

-

-

Investments

2,000,000

2,000,000

-

514,727

491,688

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

2,000,000

3,133,566

1,133,566

514,727

491,688

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

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

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

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

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

TOTAL LONG TERM ASSETS

4,205,960

7,020,904

5,047,101

3,670,363

2,947,473

Stocks

561,100

836,512

-

986,623

777,180

Trade debtors

2,592,430

2,487,970

-

3,168,553

3,071,605

Other debtors, deposits & prepayments

1,847,435

3,036,903

-

743,893

567,165

Short term deposits

943,827

1,411,517

-

827,650

577,109

Amount due from holding company

493,918

-

-

-

-

Amount due from related companies

551,041

-

-

648,780

646,497

Amount due from associated companies

-

1,318,176

-

1,526,282

1,064,310

Amount due from director

948,652

-

-

-

979,524

Cash & bank balances

44,760

20,458

-

49,822

60,297

Others

872,435

-

-

774,331

768,652

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

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

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

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

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

TOTAL CURRENT ASSETS

8,855,598

9,111,536

11,549,580

8,725,934

8,512,339

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

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

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

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

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

TOTAL ASSET

13,061,558

16,132,440

16,596,681

12,396,297

11,459,812

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

3,867,704

2,814,134

-

2,492,410

2,375,901

Other creditors & accruals

145,267

484,103

-

85,118

170,354

Hire purchase & lease creditors

150,568

168,195

-

94,358

-

Bank overdraft

1,928,534

2,103,605

-

1,688,745

1,098,911

Short term borrowings/Term loans

107,965

199,471

-

83,112

83,112

Other borrowings

899,121

1,167,512

-

277,956

255,915

Bill & acceptances payable

1,185,000

4,382,000

-

2,136,000

3,310,000

Amounts owing to director

710

-

-

1,000,650

-

Provision for taxation

-

47,806

-

20,079

93,024

Dividends payable/proposed

-

-

-

116,973

100,000

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

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

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

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

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

TOTAL CURRENT LIABILITIES

8,284,869

11,366,826

11,573,416

7,995,401

7,487,217

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

570,729

(2,255,290)

(23,836)

730,533

1,025,122

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

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

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

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

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

TOTAL NET ASSETS

4,776,689

4,765,614

5,023,265

4,400,896

3,972,595

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

2,339,460

2,339,460

2,339,460

2,339,460

2,339,460

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

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

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

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

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

TOTAL SHARE CAPITAL

2,339,460

2,339,460

2,339,460

2,339,460

2,339,460

Revaluation reserve

-

360,685

360,685

360,685

360,685

Retained profit/(loss) carried forward

1,847,207

1,198,501

1,089,831

953,954

936,263

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

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

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

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

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

TOTAL RESERVES

1,847,207

1,559,186

1,450,516

1,314,639

1,296,948

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

4,186,667

3,898,646

3,789,976

3,654,099

3,636,408

Long term loans

356,009

466,424

-

226,735

286,666

Hire purchase creditors

220,968

352,375

-

399,718

-

Deferred taxation

13,045

48,169

-

120,344

49,521

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

590,022

866,968

1,233,289

746,797

336,187

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

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

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

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

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

4,776,689

4,765,614

5,023,265

4,400,896

3,972,595

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

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

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

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

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

 

 

 

FINANCIAL RATIO

 

 

FUSAN CLAYS & GLAZES SDN. BHD.

 

TYPES OF FUNDS

Cash

988,587

1,431,975

-

877,472

637,406

Net Liquid Funds

(2,124,947)

(5,053,630)

-

(2,947,273)

(3,771,505)

Net Liquid Assets

9,629

(3,091,802)

(23,836)

(256,090)

247,942

Net Current Assets/(Liabilities)

570,729

(2,255,290)

(23,836)

730,533

1,025,122

Net Tangible Assets

4,776,689

4,765,614

5,023,265

4,400,896

3,972,595

Net Monetary Assets

(580,393)

(3,958,770)

(1,257,125)

(1,002,887)

(88,245)

BALANCE SHEET ITEMS

Total Borrowings

4,848,165

8,839,582

-

4,906,624

5,034,604

Total Liabilities

8,874,891

12,233,794

12,806,705

8,742,198

7,823,404

Total Assets

13,061,558

16,132,440

16,596,681

12,396,297

11,459,812

Net Assets

4,776,689

4,765,614

5,023,265

4,400,896

3,972,595

Net Assets Backing

4,186,667

3,898,646

3,789,976

3,654,099

3,636,408

Shareholders' Funds

4,186,667

3,898,646

3,789,976

3,654,099

3,636,408

Total Share Capital

2,339,460

2,339,460

2,339,460

2,339,460

2,339,460

Total Reserves

1,847,207

1,559,186

1,450,516

1,314,639

1,296,948

LIQUIDITY (Times)

Cash Ratio

0.12

0.13

-

0.11

0.09

Liquid Ratio

1.00

0.73

-

0.97

1.03

Current Ratio

1.07

0.80

1.00

1.09

1.14

WORKING CAPITAL CONTROL (Days)

Stock Ratio

10

16

-

18

15

Debtors Ratio

47

48

-

59

61

Creditors Ratio

75

62

-

52

53

SOLVENCY RATIOS (Times)

Gearing Ratio

1.16

2.27

-

1.34

1.38

Liabilities Ratio

2.12

3.14

3.38

2.39

2.15

Times Interest Earned Ratio

3.53

1.43

-

1.98

1.72

Assets Backing Ratio

2.04

2.04

2.15

1.88

1.70

PERFORMANCE RATIO (%)

Operating Profit Margin

6.38

1.14

1.18

1.44

1.12

Net Profit Margin

6.43

0.57

1.08

0.69

0.81

Return On Net Assets

37.32

15.02

4.84

12.88

12.32

Return On Capital Employed

26.00

10.17

4.84

9.17

9.65

Return On Shareholders' Funds/Equity

30.76

2.79

5.86

3.69

4.09

Dividend Pay Out Ratio (Times)

0.78

0.00

0.45

0.87

0.67

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

-

0

0


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.61.45

UK Pound

1

Rs.97.76

Euro

1

Rs.76.68

 

INFORMATION DETAILS

 

Analysis Done by :

KAR

 

 

Report Prepared by :

NIT

 

               

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.