MIRA INFORM REPORT

 

 

Report No. :

336174

Report Date :

12.08.2015

 

IDENTIFICATION DETAILS

 

Name :

NES MANUFACTURING (M) SDN. BHD.

 

 

Registered Office :

41, Jalan Taman Medan Saujana, Taman Medan Saujana, Tingkat 2, 34600 Kamunting, Perak,

 

 

Country :

Malaysia

 

 

Financials (as on) :

30.06.2013

 

 

Date of Incorporation :

05.03.2008

 

 

Com. Reg. No.:

808786-T

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Manufacturing of aluminium products, metal ingots.

 

 

No. of Employee :

Not Available

 

 

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 :

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, 2015

 

Country Name

Previous Rating

(31.12.2014)

Current Rating

(31.03.2015)

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 previously 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. Falling global oil prices in the second half of 2014 have strained government finances, shrunk Malaysia’s current account surplus and put downward pressure on the ringgit. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplied about 29% of government revenue in 2014. 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. Malaysia is a member of the 12-nation Trans-Pacific Partnership free trade agreement negotiations and, with the nine other ASEAN members, will form the ASEAN Economic Community in 2015.

 

Source : CIA

 

 

 

EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

808786-T

COMPANY NAME

:

NES MANUFACTURING (M) SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

05/03/2008

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

41, JALAN TAMAN MEDAN SAUJANA, TAMAN MEDAN SAUJANA, TINGKAT 2, 34600 KAMUNTING, PERAK, MALAYSIA.

BUSINESS ADDRESS

:

BLOK C, LOT 5658, JALAN PERUSAHAAN 1, KAMUNTING INDUSTRIAL ESTATE, MUKIM ASSAM KUMBANG, 34600 KAMUNTING, PERAK, MALAYSIA.

TEL.NO.

:

05-8915880

FAX.NO.

:

05-8915905

CONTACT PERSON

:

MUHAMMAD SAIFUDDIN SUNDAR BIN ABDULLAH ( DIRECTOR )

INDUSTRY CODE

:

24202

PRINCIPAL ACTIVITY

:

MANUFACTURING OF ALUMINIUM PRODUCTS, METAL INGOTS

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

SALES

:

MYR 14,085,777 [2013]

NET WORTH

:

MYR 5,606,548 [2013]

STAFF STRENGTH

:

N/A

BANKER (S)

:

BANK PERUSAHAAN KECIL & SEDERHANA MALAYSIA BHD
MALAYSIAN INDUSTRIAL DEVELOPMENT FINANCE BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

LIMITED

PAYMENT

:

SLOW BUT CORRECT

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

N/A

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) manufacturing of aluminium products, metal ingots.

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


 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

27/12/2013

MYR 5,000,000.00

MYR 5,000,000.00

28/10/2011

MYR 5,000,000.00

MYR 2,000,000.00

28/09/2009

MYR 1,000,000.00

MYR 1,000,000.00

29/05/2008

MYR 500,000.00

MYR 500,000.00

05/03/2008

MYR 100,000.00

MYR 10.00


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

 


Current Shareholder(s) :

Name

Address

IC/PP/Loc No

Shareholding

(%)

MS. NORAZIZAH BINTI OMAR +

23, PERSIARAN BUKIT KECIL 5, TAMAN SRI NIBONG, 11900 BAYAN LEPAS, PULAU PINANG, MALAYSIA.

600611-10-6656 5911217

4,500,000.00

90.00

MR. MUHAMMAD SAIFUDDIN SUNDAR BIN ABDULLAH +

BLOK P, 5, JALAN POKOK ASAM, TAMAN RAJA IDRIS, 34000 TAIPING, PERAK, MALAYSIA.

590101-08-5975 5541081

500,000.00

10.00

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

------

5,000,000.00

100.00

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

=====

+ Also Director

 

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. MUHAMMAD SAIFUDDIN SUNDAR BIN ABDULLAH

Address

:

BLOK P, 5, JALAN POKOK ASAM, TAMAN RAJA IDRIS, 34000 TAIPING, PERAK, MALAYSIA.

IC / PP No

:

5541081

New IC No

:

590101-08-5975

Date of Birth

:

01/01/1959

Nationality

:

MALAYSIAN

Date of Appointment

:

09/07/2012

 

DIRECTOR 2

 

Name Of Subject

:

MS. NORAZIZAH BINTI OMAR

Address

:

23, PERSIARAN BUKIT KECIL 5, TAMAN SRI NIBONG, 11900 BAYAN LEPAS, PULAU PINANG, MALAYSIA.

IC / PP No

:

5911217

New IC No

:

600611-10-6656

Date of Birth

:

11/06/1960

Nationality

:

MALAYSIAN

Date of Appointment

:

05/03/2008


MANAGEMENT

 

 

 

1)

Name of Subject

:

MUHAMMAD SAIFUDDIN SUNDAR BIN ABDULLAH

Position

:

DIRECTOR

 

 

 

AUDITOR

 

Auditor

:

HISHAM & CO

Auditor' Address

:

44A, JALAN TODAK, BANDAR SEBERANG JAYA, 13800 BUTTERWORTH, PULAU PINANG, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. NORHASLINDA BINTI ADENAN

New IC No

:

780727-08-6248

Address

:

98E, LORONG PINANG, KAMPUNG PINANG, 34600 KAMUNTING, PERAK, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

BANK PERUSAHAAN KECIL & SEDERHANA MALAYSIA BHD

 

2)

Name

:

MALAYSIAN INDUSTRIAL DEVELOPMENT FINANCE BHD

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

13/03/2009

FIXED AND FLOATING DEBENTURE

BANK PERUSAHAAN KECIL & SEDERHANA MALAYSIA BHD

-

Unsatisfied

2

28/12/2009

MEMORANDUM OF DEPOSIT AND DEED OF ASSIGNMENT

BANK PERUSAHAAN KECIL & SEDERHANA MALAYSIA BHD

-

Unsatisfied

3

30/04/2010

FACILITY AGREEMENT

CIMB BANK BERHAD

-

Unsatisfied

4

21/01/2011

DEBENTURE AND NEGATIVE PLEDGE

MALAYSIAN INDUSTRIAL DEVELOPMENT FINANCE BHD

-

Unsatisfied

5

05/07/2011

MEMORANDUM OF DEPOSIT AND DEED OF ASSIGNMENT

BANK PERUSAHAAN KECIL & SEDERHANA MALAYSIA BHD

-

Unsatisfied

6

17/10/2011

FACILITY AGREEMENT AND MEMORANDUM OF DEPOSIT

BANK PERUSAHAAN KECIL & SEDERHANA MALAYSIA BHD

-

Unsatisfied

7

02/12/2014

DEBENTURE AND DEED OF ASSIGNMENT

PERBADANAN USAHAWAN NATIONAL BERHAD

MYR 4,000,000.00

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

:

N/A

Overseas

:

N/A


The Subject refused to disclose its suppliers.

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

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

X

]

Average 61-90 Days

[

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]

 

 

CLIENTELE

 

Local

:

N/A

Overseas

:

N/A


The Subject refused to disclose its clientele.

 

 

OPERATIONS

 

Products manufactured

:

ALUMINIUM PRODUCTS, METAL INGOTS

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) manufacturing of aluminium products, metal ingots.

Nes has established an off-site recovery facility for schedule waste metals to recover for use of downstream manufacturing activities.

The ingot manufacturing process begins at its facility in the melt shop with the melting of scrap metal in its furnace.

The melt shop's enhanced the molten chemistry refining capabilities allow us to produce special alloy grades. Finally, molten aluminium is cast into mould.

The ingots are used in die casting of automobile components and in the engineering industry. Its furnace produces a wide range of ingots produce according to customer's specification.


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

605-8915880

Current Telephone Number

:

05-8915880

Match

:

YES

Address Provided by Client

:

BLOCK C LOT 5658 JALAN PERUSAHAAN 1 KAMUNTING INDUSTRIAL ESTATE MUKIM ASSAM KUMBANG 34600 TAIPING PERAK

Current Address

:

BLOK C, LOT 5658, JALAN PERUSAHAAN 1, KAMUNTING INDUSTRIAL ESTATE, MUKIM ASSAM KUMBANG, 34600 KAMUNTING, PERAK, MALAYSIA.

Match

:

YES

Latest Financial Accounts

:

YES

 

Other Investigations


On 10th August 2015 we contacted one of the staff from the Subject and he provided some information.

The Subject refused to disclose its number of employees.


FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Erratic

[

2009 - 2013

]

Profit/(Loss) Before Tax

:

Decreased

[

2009 - 2013

]

Return on Shareholder Funds

:

Unfavourable

[

1.17%

]

Return on Net Assets

:

Unfavourable

[

2.93%

]

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 unfavourable return on shareholders' funds could indicate that the Subject was inefficient in utilising its assets to generate returns.

Working Capital Control

Stock Ratio

:

Favourable

[

47 Days

]

Debtor Ratio

:

Favourable

[

14 Days

]

Creditors Ratio

:

Favourable

[

19 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

:

Favourable

[

3.21 Times

]

Current Ratio

:

Favourable

[

4.08 Times

]

A minimum liquid ratio of 1 should be maintained by the Subject in order to assure its creditors of its ability to meet short term obligations and the Subject was in a good liquidity position. Thus, we believe the Subject is able to meet all its short term obligations as and when they fall due.

Solvency

Interest Cover

:

Unfavourable

[

1.56 Times

]

Gearing Ratio

:

Favourable

[

0.80 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 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 :

The Subject recorded lower profits as its turnover showed a erratic trend. The Subject's management was unable to control its costs efficiently as its profit showed a downward trend. The Subject was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the Subject should be able to repay its short term obligations. 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 was slightly high and its financial risk was also high. If no plans are made to reduce its gearing, the Subject's performance may deteriorate in the coming year.

Overall financial condition of the Subject : LIMITED

 

 

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2011

2012

2013

2014*

2015**

Population ( Million)

28.7

29.3

29.8

30.3

30.5

Gross Domestic Products ( % )

5.1

5.6

5.3

6.0

6.0

Domestic Demand ( % )

8.2

9.4

5.6

6.4

6.2

Private Expenditure ( % )

8.2

8.0

8.6

7.9

6.9

Consumption ( % )

7.1

1.0

5.7

6.5

5.6

Investment ( % )

12.2

11.7

13.3

12.0

10.7

Public Expenditure ( % )

8.4

13.3

4.4

2.3

4.2

Consumption ( % )

16.1

11.3

(1.2)

2.1

3.8

Investment ( % )

(0.3)

15.9

4.2

2.6

4.7

Balance of Trade ( MYR Million )

116,058

106,300

71,298

52,314

-

Government Finance ( MYR Million )

(45,511)

(42,297)

(39,993)

(37,291)

-

Government Finance to GDP / Fiscal Deficit ( % )

(5.4)

(4.5)

(4.0)

(3.5)

(3.0)

Inflation ( % Change in Composite CPI)

3.1

1.6

2.5

3.2

4.0

Unemployment Rate

3.3

3.2

3.0

2.9

3.0

Net International Reserves ( MYR Billion )

415

427

-

417

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

3.50

2.20

-

4.00

-

Average 3 Months of Non-performing Loans ( % )

14.80

14.70

-

-

-

Average Base Lending Rate ( % )

6.60

6.53

6.53

6.85

-

Business Loans Disbursed( % )

15.3

32.2

-

56.0

-

Foreign Investment ( MYR Million )

23,546.1

26,230.4

38,238.0

43,486.6

-

Consumer Loans ( % )

-

-

-

-

-

Registration of New Companies ( No. )

45,455

45,441

46,321

49,144

-

Registration of New Companies ( % )

3.0

(0.0)

1.9

6.1

-

Liquidation of Companies ( No. )

132,485

17,092

26,430

21,753

-

Liquidation of Companies ( % )

417.8

(87.1)

54.6

(17.7)

-

Registration of New Business ( No. )

284,598

324,761

329,895

332,723

-

Registration of New Business ( % )

5.0

14.0

2.0

1.0

-

Business Dissolved ( No. )

20,121

20,380

18,161

21,436

-

Business Dissolved ( % )

1.9

1.3

(10.9)

18.0

-

Sales of New Passenger Cars (' 000 Unit )

535.1

552.2

576.7

598.4

610.3

Cellular Phone Subscribers ( Million )

35.3

38.5

43.0

43.8

-

Tourist Arrival ( Million Persons )

24.7

25.0

25.7

28.0

-

Hotel Occupancy Rate ( % )

60.6

62.4

62.6

63.2

-

Credit Cards Spending ( % )

15.6

12.6

-

13.5

-

Bad Cheque Offenders (No.)

32,627

26,982

28,876

-

-

Individual Bankruptcy ( No.)

19,167

19,575

21,984

-

-

Individual Bankruptcy ( % )

5.8

2.1

12.3

-

-



INDUSTRIES ( % of Growth ):

2011

2012

2013

2014*

2015**

Agriculture

5.8

1.0

2.1

3.8

3.1

Palm Oil

10.8

(0.3)

2.6

6.7

-

Rubber

6.1

(7.9)

(10.1)

(10.4)

-

Forestry & Logging

(7.6)

(4.5)

(7.8)

(4.2)

-

Fishing

2.1

4.3

1.6

2.7

-

Other Agriculture

7.1

6.4

8.2

6.2

-

Industry Non-Performing Loans ( MYR Million )

634.1

-

-

-

-

% of Industry Non-Performing Loans

3.2

-

-

-

-

Mining

(5.4)

1.4

0.9

(0.8)

2.8

Oil & Gas

(1.7)

-

-

3.0

-

Other Mining

-

-

-

46.6

-

Industry Non-performing Loans ( MYR Million )

46.5

-

-

-

-

% of Industry Non-performing Loans

0.1

-

-

-

-

Manufacturing #

4.7

4.8

3.4

6.4

5.5

Exported-oriented Industries

4.1

6.5

3.3

5.6

-

Electrical & Electronics

(4.0)

12.7

6.9

13.3

-

Rubber Products

20.7

3.0

11.7

(0.3)

-

Wood Products

(5.1)

8.7

(2.7)

5.1

-

Textiles & Apparel

13.2

(7.1)

(2.6)

11.5

-

Domestic-oriented Industries

10.7

1.7

6.8

9.4

-

Food, Beverages & Tobacco

4.80

2.70

3.60

6.13

6.13

Chemical & Chemical Products

10.0

10.8

5.6

1.4

-

Plastic Products

3.8

-

-

2.7

-

Iron & Steel

2.2

(6.6)

5.0

0.1

-

Fabricated Metal Products

21.8

13.8

9.9

2.9

-

Non-metallic Mineral

12.1

2.9

(2.0)

5.4

-

Transport Equipment

12.0

3.4

13.8

22.9

-

Paper & Paper Products

9.5

3.1

1.8

4.7

-

Crude Oil Refineries

9.3

-

-

13.0

-

Industry Non-Performing Loans ( MYR Million )

6,537.2

-

-

-

-

% of Industry Non-Performing Loans

25.7

-

-

-

-

Construction

4.7

18.6

10.9

12.7

10.7

Industry Non-Performing Loans ( MYR Million )

3,856.9

-

-

-

-

% of Industry Non-Performing Loans

10.2

-

-

-

-

Services

7.1

6.4

5.9

5.9

5.6

Electric, Gas & Water

3.5

4.4

4.2

3.6

3.9

Transport, Storage & Communication

6.50

7.10

7.30

7.50

7.15

Wholesale, Retail, Hotel & Restaurant

5.2

4.7

5.9

6.9

6.5

Finance, Insurance & Real Estate

6.90

9.70

3.70

4.65

4.25

Government Services

12.4

9.4

8.3

6.1

5.6

Other Services

5.1

3.9

5.1

4.8

4.5

Industry Non-Performing Loans ( MYR Million )

6,825.2

-

-

-

-

% of Industry Non-Performing Loans

23.4

-

-

-

-

* Estimate / Preliminary

** Forecast

# Based On Manufacturing Production Index 

 

 

INDUSTRY ANALYSIS

 

MSIC CODE

24202 : Production of aluminium from alumina

INDUSTRY :

MANUFACTURING

The manufacturing sector is expected to grow by 5.5% in 2015. It will be bolstered by strong domestic and export-oriented industries in line with growing investment activities and favorable external demand. Moreover, in 2014, the manufacturing sectors have spearheading growth. The manufacturing sector is estimated to grow at a faster pace in 2014 on higher exports of electronics and electrical (E&E) products as external demand improves.

The manufacturing sector expanded strongly during the first half of 2014, the highest growth in three years, spurred by higher global semiconductor sales. Value-added of the manufacturing sector expanded 7.1% during the first half of 2014. Production of the sector rose 6.6% in the first seven months of 2014 supported by resilient domestic demand and recovery in the external sector during the first seven months of the years. The sales value of manufactured products rebounded by 7.7% in the first seven months of 2014. The strong performance of the sector was on account of higher output at 9.4% from the domestic-oriented industries, particularly transport equipment, food and beverage.

The manufacturing sector continued to attract domestic and foreign investment with investment approved by Malaysian Investment Development Authority (MIDA) totaling RM47.4 billion during the first six months of 2014, mainly from Japan, China and Germany. Meanwhile, the capacity utilization rate remained steady at 80.4% during the second quarter of 2014 while average wage per employee and productivity improved to RM2,772 per month and 5.9%, respectively during the first seven months of 2014. Boosted by favorable domestic economic activity and recovery in the external sector, the manufacturing sector is expected to record a better performance with growth of 6.4% in 2014.

In the meantime, production of wood products rebounded by 5.1% largely supported by higher output in the saw-milling and planning of wood segment at 25.9% during the first seven months of 2014. The positive performance was attributed to vibrant residential and commercial construction activities which contributed to increased use of timber frame and glued laminated timber for cost savings compared to the use of concrete and steel. Increased demand from major export destination such as the US, Japan and Australia for Malaysian made furniture contributed to the higher output, particularly wooden and cane furniture which rebounded by 2.2%.

Production of rubber products contracted 0.3% in the first seven months of 2014 on account of slower demand for rubber gloves and rubber tyres. The decline in rubber tyres for vehicles was due to the weaker external demand from the automotive industry, particularly from China. Output of other rubber products contracted 3.8% following the product shift from rubber-based to plastics, silicones and metal alloys in the manufacture of medical devices.

Besides, exports of manufactured products are expected to grow 6.1% in 2014 boosted by the growing demand from advanced economies. However, during the first seven months of 2014, manufactured exports surged 11.4%. The robust growth was buoyed by strengthening demand in the US and EU, reflecting significant exposure of Malaysian exports to the economic performance in the advance economies. The strength in export was broad-based with robust growth in both E&E and non- E&E subsectors.

Under budget 2015, the Government will provide incentive in the form of capital allowance on automation expenditure to encourage automation in the manufacturing sector, which may help in the manufacturing sector.

OVERALL INDUSTRY OUTLOOK : Average Growth



CREDIT RISK EVALUATION & RECOMMENDATION

 

 


Incorporated in 2008, the Subject is a Private Limited company, focusing on manufacturing of aluminium products, metal ingots. Having been in business for more than 5 years, the Subject has established a remarkable clientele base for itself which has contributed to its business growth. A paid up capital of MYR 5,000,000 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.

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. 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 gearing level of the Subject is slightly high, therefore it faces moderate financial risk. Given a positive net worth standing at MYR 5,606,548, the Subject should be able to maintain its business in the near terms.

Overall, the Subject's payment habit is good as the Subject has a good credit control and it could be taking advantage of the cash discounts while maintaining a good reputation with its creditors.

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

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

 



 

PROFIT AND LOSS ACCOUNT

 

 

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

 

Financial Year End

2013-06-30

2012-06-30

2011-06-30

2010-06-30

2009-06-30

Months

12

12

12

12

12

Consolidated Account

Company

Company

Company

Company

Company

Audited Account

YES

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

YES

Financial Type

FULL

FULL

SUMMARY

SUMMARY

SUMMARY

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

14,085,777

19,708,383

12,456,317

12,252,137

6,641,132

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

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

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

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

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

Total Turnover

14,085,777

19,708,383

12,456,317

12,252,137

6,641,132

Costs of Goods Sold

(11,037,353)

(16,020,279)

-

-

-

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

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

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

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

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

Gross Profit

3,048,424

3,688,104

-

-

-

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

92,382

285,671

125,493

119,546

83,019

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

92,382

285,671

125,493

119,546

83,019

Taxation

(26,850)

(25,832)

-

(18,646)

(28,235)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

65,532

259,839

125,493

100,900

54,784

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

541,016

281,177

155,684

54,784

-

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

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

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

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

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

As restated

541,016

281,177

155,684

54,784

-

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

606,548

541,016

281,177

155,684

54,784

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

606,548

541,016

281,177

155,684

54,784

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Hire purchase

48,019

52,400

-

-

-

Term loan / Borrowing

115,667

108,055

-

-

-

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

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

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

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

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

163,686

160,455

-

-

-

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

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

-

-

-

DEPRECIATION (as per notes to P&L)

586,277

566,844

-

-

-

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

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

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

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

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

586,277

566,844

-

-

-

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

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

 

 

 

BALANCE SHEET

 

NES MANUFACTURING (M) SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

2,322,814

2,889,090

3,194,634

1,831,377

1,186,939

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

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

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

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

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

TOTAL LONG TERM ASSETS

2,322,814

2,889,090

3,194,634

1,831,377

1,186,939

Stocks

1,825,214

1,401,675

-

-

-

Trade debtors

549,250

834,673

-

-

-

Other debtors, deposits & prepayments

937,400

542,400

-

-

-

Amount due from director

5,039,662

5,335,718

-

-

-

Cash & bank balances

146,564

184,107

-

-

-

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

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

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

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

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

TOTAL CURRENT ASSETS

8,498,090

8,298,573

1,888,273

2,096,372

855,519

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

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

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

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

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

TOTAL ASSET

10,820,904

11,187,663

5,082,907

3,927,749

2,042,458

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

561,755

619,745

-

-

-

Other creditors & accruals

85,621

135,945

-

-

-

Hire purchase & lease creditors

257,555

305,116

-

-

-

Bank overdraft

411,682

430,955

-

-

-

Short term borrowings/Term loans

665,712

180,585

-

-

-

Provision for taxation

99,563

72,713

-

-

-

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

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

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

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

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

TOTAL CURRENT LIABILITIES

2,081,888

1,745,059

1,760,046

1,528,412

592,457

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

6,416,202

6,553,514

128,227

567,960

263,062

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

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

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

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

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

TOTAL NET ASSETS

8,739,016

9,442,604

3,322,861

2,399,337

1,450,001

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

5,000,000

5,000,000

1,000,000

1,000,000

500,000

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

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

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

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

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

TOTAL SHARE CAPITAL

5,000,000

5,000,000

1,000,000

1,000,000

500,000

Retained profit/(loss) carried forward

606,548

541,016

281,177

155,684

80,556

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

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

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

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

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

TOTAL RESERVES

606,548

541,016

281,177

155,684

80,556

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

5,606,548

5,541,016

1,281,177

1,155,684

580,556

Long term loans

2,755,442

3,319,495

-

-

-

Hire purchase creditors

377,026

582,093

-

-

-

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

3,132,468

3,901,588

2,041,684

1,243,653

869,445

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

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

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

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

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

8,739,016

9,442,604

3,322,861

2,399,337

1,450,001

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

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

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

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

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

 

 

 

FINANCIAL RATIO

 

 

 

TYPES OF FUNDS

Cash

146,564

184,107

-

-

-

Net Liquid Funds

(265,118)

(246,848)

-

-

-

Net Liquid Assets

4,590,988

5,151,839

128,227

567,960

263,062

Net Current Assets/(Liabilities)

6,416,202

6,553,514

128,227

567,960

263,062

Net Tangible Assets

8,739,016

9,442,604

3,322,861

2,399,337

1,450,001

Net Monetary Assets

1,458,520

1,250,251

(1,913,457)

(675,693)

(606,383)

PROFIT & LOSS ITEMS

Earnings Before Interest & Tax (EBIT)

256,068

446,126

-

-

-

Earnings Before Interest, Taxes, Depreciation And Amortization (EBITDA)

842,345

1,012,970

-

-

-

BALANCE SHEET ITEMS

Total Borrowings

4,467,417

4,818,244

-

-

-

Total Liabilities

5,214,356

5,646,647

3,801,730

2,772,065

1,461,902

Total Assets

10,820,904

11,187,663

5,082,907

3,927,749

2,042,458

Net Assets

8,739,016

9,442,604

3,322,861

2,399,337

1,450,001

Net Assets Backing

5,606,548

5,541,016

1,281,177

1,155,684

580,556

Shareholders' Funds

5,606,548

5,541,016

1,281,177

1,155,684

580,556

Total Share Capital

5,000,000

5,000,000

1,000,000

1,000,000

500,000

Total Reserves

606,548

541,016

281,177

155,684

80,556

LIQUIDITY (Times)

Cash Ratio

0.07

0.11

-

-

-

Liquid Ratio

3.21

3.95

-

-

-

Current Ratio

4.08

4.76

1.07

1.37

1.44

WORKING CAPITAL CONTROL (Days)

Stock Ratio

47

26

-

-

-

Debtors Ratio

14

15

-

-

-

Creditors Ratio

19

14

-

-

-

SOLVENCY RATIOS (Times)

Gearing Ratio

0.80

0.87

-

-

-

Liabilities Ratio

0.93

1.02

2.97

2.40

2.52

Times Interest Earned Ratio

1.56

2.78

-

-

-

Assets Backing Ratio

1.75

1.89

3.32

2.40

2.90

PERFORMANCE RATIO (%)

Operating Profit Margin

0.66

1.45

1.01

0.98

1.25

Net Profit Margin

0.47

1.32

1.01

0.82

0.82

Return On Net Assets

2.93

4.72

3.78

4.98

5.73

Return On Capital Employed

2.72

4.38

3.78

4.98

5.73

Return On Shareholders' Funds/Equity

1.17

4.69

9.80

8.73

9.44

Dividend Pay Out Ratio (Times)

0

0

-

-

-

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

 

 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.64.17

UK Pound

1

Rs.99.85

Euro

1

Rs.70.36

 

 

INFORMATION DETAILS

 

Analysis Done by :

KIN

 

 

Report Prepared by :

ANK

 


 

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.