MIRA INFORM REPORT

 

 

Report Date :

17.10.2014

 

IDENTIFICATION DETAILS

 

Name :

J P SILK SDN. BHD.

 

 

Registered Office :

359-2, 2 1/2 Mile, Jalan Ipoh, 51200 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

30.06.2012

 

 

Date of Incorporation :

15.06.2010

 

 

Com. Reg. No.:

904582-W

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Trading in Textiles, Brassware, Silverware Costume Jeweleries and Utensiles

 

 

No of Employees :

10 [2014]

 

 

RATING & COMMENTS

 

MIRA’s Rating :

B

 

RATING

STATUS

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Status :

Moderate

Payment Behaviour :

Unknown

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.

:

904582-W

COMPANY NAME

:

J P SILK SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

15/06/2010

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

359-2, 2 1/2 MILE, JALAN IPOH, 51200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

LOT 211, WILAYAH COMPLEX, 2, JALAN MUNSHI ABDULLAH, ,SECOND FLOOR, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

TEL.NO.

:

N/A

FAX.NO.

:

N/A

HP.NO.

:

0166851869

CONTACT PERSON

:

LAKSHMINARAYANAN A/L M KRISHNAN ( DIRECTOR )

INDUSTRY CODE

:

46411

PRINCIPAL ACTIVITY

:

TRADING IN TEXTILES,BRASSWARE,SILVERWARE COSTUME JEWELERIES AND UTENSILES

AUTHORISED CAPITAL

:

MYR 1,000,000.00 DIVIDED INTO
ORDINARY SHARE 1,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 1,000,000.00 DIVIDED INTO
ORDINARY SHARES 550,002 CASH AND 449,998 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 817,045 [2012]

NET WORTH

:

MYR 1,010,092 [2012]

STAFF STRENGTH

:

10 [2014]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

PAYMENT

:

N/A

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

HIGH

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) trading in textiles,brassware,silverware costume jeweleries and utensiles.

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 1,000,000.00

MYR 1,000,000.00

15/06/2010

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. LAKSHMINARAYANAN A/L M KRISHNAN +

4, JALAN CHEMPEDAK, OFF JALAN KOVIL HILIR, SENTUL, 51100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

590623-71-5057 5955069

510,000.00

51.00

MR. SUMITHA HANUMANDAN MOHANRAJ +

B-30-7, MENARA CITY ONE, JALAN MUNSHI ABDULLAH, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

H0970060

300,000.00

30.00

MR. JAYAPRAKASH SENGOTAYA GOUNDER MURUGESAN +

171, JALAN SIBU, TAMAN WAHYU, OFF JALAN KUCHING, 68100 BATU CAVES, SELANGOR, MALAYSIA.

Z1774528

190,000.00

19.00

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

------

1,000,000.00

100.00

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

=====

+ Also Director





DIRECTORS



DIRECTOR 1

 

Name Of Subject

:

MR. JAYAPRAKASH SENGOTAYA GOUNDER MURUGESAN

Address

:

171, JALAN SIBU, TAMAN WAHYU, OFF JALAN KUCHING, 68100 BATU CAVES, SELANGOR, MALAYSIA.

IC / PP No

:

Z1774528

Nationality

:

MALAYSIAN

Date of Appointment

:

15/06/2010

 

DIRECTOR 2

 

Name Of Subject

:

MR. SUMITHA HANUMANDAN MOHANRAJ

Address

:

B-30-7, MENARA CITY ONE, JALAN MUNSHI ABDULLAH, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

H0970060

Nationality

:

MALAYSIAN

Date of Appointment

:

07/05/2012

 

DIRECTOR 3

 

Name Of Subject

:

MR. LAKSHMINARAYANAN A/L M KRISHNAN

Address

:

4, JALAN CHEMPEDAK, OFF JALAN KOVIL HILIR, SENTUL, 51100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

5955069

New IC No

:

590623-71-5057

Date of Birth

:

23/06/1959

Nationality

:

MALAYSIAN

Date of Appointment

:

15/06/2010




MANAGEMENT

 

 

1)

Name of Subject

:

LAKSHMINARAYANAN A/L M KRISHNAN

Position

:

DIRECTOR

 

AUDITOR

 

Auditor

:

ARI & CO.

Auditor' Address

:

24-4-2, JALAN 4/50, DIAMOND SQUARE BUSINESS CENTRE, OFF JALAN GOMBAK BATU 3 1/2, 53000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. RATHA KRISHNAN A/L NADARAJAN

IC / PP No

:

5964178

New IC No

:

600827-08-6033

Address

:

254, JALAN MEDAN 16, TAMAN MEDAN, 46000 PETALING JAYA, SELANGOR, MALAYSIA.

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

 

 

 

ENCUMBRANCE (S)


No encumbrance was found in our databank at the time of investigation.

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

:

N/A

Overseas

:

N/A


The Subject refused to disclose its suppliers.

CLIENTELE

 

Local

:

YES

Percentage

:

100%

Domestic Markets

:

MALAYSIA

Overseas

:

NO

Credit Term

:

N/A

Payment Mode

:

CASH

 

OPERATIONS

 

Goods Traded

:

TEXTILES,BRASSWARE,SILVERWARE COSTUME JEWELERIES AND UTENSILES

 

Total Number of Employees:

YEAR

2014


GROUP

N/A

COMPANY

10

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) trading in textiles,brassware,silverware costume jeweleries and utensiles.

The Subject is engaged in the trading of textiles and household products.


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

014-7511668

Current Telephone Number

:

0166851869

Match

:

NO

Address Provided by Client

:

LOT 2.11, 2ND FLOOR, KAMPLEKS WILAYAH, NO 2 JALAN MUNSHI ABDULLAH 50100 KUALA LUMPUR

Current Address

:

LOT 211, WILAYAH COMPLEX, 2, JALAN MUNSHI ABDULLAH, ,SECOND FLOOR, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

Match

:

YES

Latest Financial Accounts

:

YES

 

Other Investigations


On 13th October 2014 we contacted one of the SC's Director, Mr Lakshminarayan on his mobile at 0166851869 and he provided some information on the Subject.

The Subject can only be contacted via mobile at 0166851869.

The Subject does not use fax facility.

FINANCIAL ANALYSIS

 

Profitability

Turnover

:

Increased

[

63.56%

]

Profit/(Loss) Before Tax

:

Increased

[

17.36%

]

Return on Shareholder Funds

:

Unfavourable

[

0.54%

]

Return on Net Assets

:

Unfavourable

[

0.54%

]

The increase in turnover could be due to the Subject adopting an aggressive marketing strategy.The Subject's management have been efficient in controlling its operating costs. The unfavourable return on shareholders' funds could indicate that the Subject was inefficient in utilising its assets to generate returns.

Working Capital Control

Stock Ratio

:

Unfavourable

[

176 Days

]

Debtor Ratio

:

Acceptable

[

64 Days

]

Creditors Ratio

:

Favourable

[

0 Days

]

The Subject could be incurring higher holding cost. As its capital was tied up in stocks, it could face liquidity problems. The Subject's management was quite efficient in handling its debtors. The Subject's debtors days were at an acceptable range, thus the risk of its debts turning bad was minimised. 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

:

Favourable

[

144.96 Times

]

Current Ratio

:

Favourable

[

237.69 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

:

Nil

[

0.00 Times

]

Gearing Ratio

:

Favourable

[

0.00 Times

]

The Subject's interest cover was nil as it did not pay any interest during the year. The Subject had no gearing and hence it had virtually no financial risk. The Subject was financed by its shareholders' funds and internally generated fund. During the economic downturn, the Subject, having a zero gearing, will be able to compete better than those which are highly geared in the same industry.

Overall Assessment :

Generally, the Subject's performance has improved with higher turnover and profit. The Subject was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the Subject should be able to repay its short term obligations. The Subject did not make any interest payment during the year. The Subject was dependent on its shareholders' funds to finance its business needs. The Subject was a zero gearing company, it was solely dependant on its shareholders to provide funds to finance its business. The Subject has good chance of getting loans, if the needs arises.

Overall financial condition of the Subject : FAIR

 

 

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

28,876

Individual Bankruptcy ( No.)

16,228

18,119

19,167

19,575

21,984

Individual Bankruptcy ( % )

16.7

11.7

5.8

2.1

12.3

 

INDUSTRIES ( % of Growth ):

2009

2010

2011

2012

2013

Agriculture

0.1

2.4

5.8

1.3

2.1

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

(6.5)

(0.3)

(5.4)

1.0

0.7

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 #

(9.0)

11.9

4.7

4.8

3.5

Exported-oriented Industries

(19.0)

12.1

2.8

4.1

-

Electrical & Electronics

(30.3)

28.4

(4.0)

12.7

18.6

Rubber Products

(10.1)

25.3

20.7

3.0

8.2

Wood Products

(24.1)

20.1

(5.1)

8.7

(3.1)

Textiles & Apparel

(19.5)

(0.4)

13.2

(7.1)

(2.6)

Domestic-oriented Industries

(9.8)

16.3

6.5

8.6

-

Food, Beverages & Tobacco

0.2

3.0

4.8

2.7

3.6

Chemical & Chemical Products

(7.7)

16.2

10.0

10.8

(0.7)

Plastic Products

(9.1)

2.4

3.8

-

-

Iron & Steel

(32.7)

29.3

2.2

(6.6)

3.4

Fabricated Metal Products

(2.5)

14.9

21.8

13.8

12.2

Non-metallic Mineral

(15.5)

20.2

12.1

2.9

(0.4)

Transport Equipment

(13.5)

36.5

12.0

3.4

13.8

Paper & Paper Products

(5.0)

18.7

9.5

3.1

2.3

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

6.2

11.4

4.7

18.6

10.9

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

2.9

7.4

7.1

6.4

5.9

Electric, Gas & Water

1.4

7.8

3.5

4.4

4.2

Transport, Storage & Communication

1.6

7.7

6.5

7.1

7.3

Wholesale, Retail, Hotel & Restaurant

2.8

4.7

5.2

4.7

5.9

Finance, Insurance & Real Estate

3.8

6.1

6.9

9.7

3.7

Government Services

3.4

5.9

12.4

9.4

8.3

Other Services

3.8

4.4

5.1

3.9

5.1

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

46411 : Wholesale of yarn and fabrics

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

 


Established in 2010, the Subject is a Private Limited company with core business in the trading in textiles, brassware, silverware costume jeweleries and utensiles. 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. A paid up capital of MYR 1,000,000 allows the Subject to expand its business more comfortably. We considered that the Subject's business position in the market is much dependent on the efforts of its directors.

Investigation revealed that the Subject's interest lies mostly in the local market. The Subject should have build up its clientele base and received supports from its regular customers. 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.

We noted that both the turnover and profits have increased compared to the previous year. The higher profit could be due to increase in turnover and better control over its operating costs. The Subject has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. The 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 zero geared company, the Subject virtually has no financial risk as it is mainly dependent on its internal funds to finance its business. Given a positive net worth standing at MYR 1,010,092, the Subject should be able to maintain its business in the near terms.

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

The industry shows an upward trend and this trend is very likely to sustain in the near terms. Hence, the Subject is expected to benefit from the favourable outlook of the industry.

Based on the above condition, we recommend credit be granted to the Subject normally.

 

PROFIT AND LOSS ACCOUNT

 

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

J P SILK SDN. BHD.

 

Financial Year End

2012-06-30

2011-06-30

Months

12

12

Consolidated Account

Company

Company

Audited Account

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

Financial Type

FULL

FULL

Currency

MYR

MYR

TURNOVER

817,045

499,546

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

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

Total Turnover

817,045

499,546

Costs of Goods Sold

(667,636)

(380,539)

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

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

Gross Profit

149,409

119,007

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

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

PROFIT/(LOSS) FROM OPERATIONS

5,449

4,643

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

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

PROFIT/(LOSS) BEFORE TAXATION

5,449

4,643

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

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

PROFIT/(LOSS) AFTER TAXATION

5,449

4,643

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

4,643

-

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

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

As restated

4,643

-

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

10,092

4,643

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

10,092

4,643

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

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

 

 

 

 

BALANCE SHEET

 

J P SILK SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

4,148

5,004

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

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

TOTAL LONG TERM ASSETS

4,148

5,004

Stocks

394,116

470,001

Trade debtors

144,057

137,400

Other debtors, deposits & prepayments

9,002

9,000

Amount due from director

421,643

-

Cash & bank balances

41,376

1,229

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

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

TOTAL CURRENT ASSETS

1,010,194

617,630

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

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

TOTAL ASSET

1,014,342

622,634

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

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

Other creditors & accruals

4,250

6,600

Amounts owing to director

-

611,389

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

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

TOTAL CURRENT LIABILITIES

4,250

617,989

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

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

NET CURRENT ASSETS/(LIABILITIES)

1,005,944

(359)

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

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

TOTAL NET ASSETS

1,010,092

4,645

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

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

SHARE CAPITAL

Ordinary share capital

1,000,000

2

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

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

TOTAL SHARE CAPITAL

1,000,000

2

Retained profit/(loss) carried forward

10,092

4,643

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

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

TOTAL RESERVES

10,092

4,643

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

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

SHAREHOLDERS' FUNDS/EQUITY

1,010,092

4,645

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

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

1,010,092

4,645

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

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

 

 

 

 

FINANCIAL RATIO

 

J P SILK SDN. BHD.

 

TYPES OF FUNDS

Cash

41,376

1,229

Net Liquid Funds

41,376

1,229

Net Liquid Assets

611,828

(470,360)

Net Current Assets/(Liabilities)

1,005,944

(359)

Net Tangible Assets

1,010,092

4,645

Net Monetary Assets

611,828

(470,360)

BALANCE SHEET ITEMS

Total Borrowings

0

0

Total Liabilities

4,250

617,989

Total Assets

1,014,342

622,634

Net Assets

1,010,092

4,645

Net Assets Backing

1,010,092

4,645

Shareholders' Funds

1,010,092

4,645

Total Share Capital

1,000,000

2

Total Reserves

10,092

4,643

LIQUIDITY (Times)

Cash Ratio

9.74

0.00

Liquid Ratio

144.96

0.24

Current Ratio

237.69

1.00

WORKING CAPITAL CONTROL (Days)

Stock Ratio

176

343

Debtors Ratio

64

100

Creditors Ratio

0

0

SOLVENCY RATIOS (Times)

Gearing Ratio

0.00

0.00

Liabilities Ratio

0.00

133.04

Times Interest Earned Ratio

0.00

0.00

Assets Backing Ratio

1.01

2,322.50

PERFORMANCE RATIO (%)

Operating Profit Margin

0.67

0.93

Net Profit Margin

0.67

0.93

Return On Net Assets

0.54

99.96

Return On Capital Employed

0.54

99.96

Return On Shareholders' Funds/Equity

0.54

99.96

Dividend Pay Out Ratio (Times)

0.00

0.00

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

 

 

DIAMOND INDUSTRY – INDIA

 

-            From time immemorial, India is well known in the world as the birthplace for diamonds.  It is difficult to trace the origin of diamonds but history says that in the remote past, diamonds were mined only in India. Diamond production in India can be traced back to almost 8th Century B.C.  India, in fact, remained undisputed leader till 18th Century when Brazilian fields were discovered in 1725 followed by emergence of S. Africa, Russia and Australia.

-            The achievement of the Indian diamond industry was possible only due to combination of the manufacturing skills of the Indian workforce and the untiring and unflagging efforts of the Indian diamantaires, supported by progressive Government policies.

-            The area of study of family owned diamond businesses derives its importance from the huge conglomerate of family run organizations which operate in the diamond industry since many generations.

-            Some of the basic traits of family run business enterprises include spirit of entrepreneurship, mutual trust lowers transaction costs, small, nimble and quick to react, information as a source of advantage and philanthropy.

-            Family owned diamond businesses need to improve on many fronts including higher standard of corporate governance, long-term performance – focused strategies, modern management and technology.

-            Utmost caution is to be exercised while dealing with some medium and large diamond traders which are usually engaged in fictitious import – export, inter-company transactions, financially assisted by banks. In the process, several public sector banks lost several hundred million rupees. They mostly diverted borrowed money for diamond business into real estate and capital markets.

-            Excerpts from Times of India dated 30th October 2010 is as under –

 

-            Gem & Jewellery Export Promotion Council in its statistical data has shown the export of polished diamonds to have increase by 28 % in February 2013. Compared to $ 1.4 bn worth of polished diamond export in February, 2012, India exported $ 1.84 billion worth of polished diamonds in February 2013. A senior executive of GJEPC said, “Export of cut and polished diamonds started falling month-wise after the imposition of 2 % of import duty on the polished diamonds. But February, 2013 has given a new ray of hope to the industry as the export of polished diamonds has actually increased by 28 %. It means the industry  is on the track of recovery and round tripping of diamonds has stopped completely.” Demand has started coming from the US, the UK, Japan and China. India’s polished diamond export is expected to cross $ 21 bn in 2013-14.

 

-            The banking sector has started exercising restraint while following prudent risk management norms when lending money to gems and jewellery sector. This follows the implementation of Basel III accord – a global voluntary regulatory standard on bank capital adequacy, stress testing and market liquidity.

 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.61.47

UK Pound

1

Rs.98.23

Euro

1

Rs.78.66

 

 

INFORMATION DETAILS

 

Analysis Done by :

SUB

 

 

Report Prepared by :

TPT

 


 

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.