MIRA INFORM REPORT

 

 

Report No. :

338426

Report Date :

27.08.2015

 

IDENTIFICATION DETAILS

 

Name :

INTERNATIONAL BRASS INDUSTRIES SDN. BHD.

 

 

Registered Office :

307, Jalan Mahkota, Taman Maluri, Cheras, 1st Floor, 55100 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2013

 

 

Date of Incorporation :

18.06.2003

 

 

Com. Reg. No.:

618782-K

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Manufacturing Brass Rods and Other Related Products.

 

 

No. of Employees :

90 [2015]

 

 

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 :

No Complaints

Litigation :

Exist

 

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.

:

618782-K

COMPANY NAME

:

INTERNATIONAL BRASS INDUSTRIES SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

18/06/2003

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

307, JALAN MAHKOTA, TAMAN MALURI, CHERAS, 1ST FLOOR, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

1, JALAN PERUSAHAAN UTAMA, TAMAN INDUSTRI SELESA JAYA, SERI KEMBANGAN, 43300 SERI KEMBANGAN, SELANGOR, MALAYSIA.

TEL.NO.

:

03-89618118

FAX.NO.

:

03-89616511

WEB SITE

:

WWW.IBIBRASS.COM

CONTACT PERSON

:

MUTHUKUMAR A/L AYARPADDE ( MANAGING DIRECTOR )

INDUSTRY CODE

:

24

PRINCIPAL ACTIVITY

:

MANUFACTURING BRASS RODS AND OTHER RELATED PRODUCTS

AUTHORISED CAPITAL

:

MYR 50,000,000.00 DIVIDED INTO
ORDINARY SHARE 50,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 37,000,000.00 DIVIDED INTO
ORDINARY SHARES 12,000,000 CASH AND 25,000,000 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 156,872,111 [2013]

NET WORTH

:

MYR 30,115,875 [2013]

STAFF STRENGTH

:

90 [2015]

BANKER (S)

:

AMBANK (M) BHD
CIMB BANK BHD
EXPORT-IMPORT BANK OF MALAYSIA BHD
STANDARD CHARTERED BANK MALAYSIA BHD
UNITED OVERSEAS BANK (MALAYSIA) BHD
HONG LEONG BANK BHD
ALLIANCE BANK MALAYSIA BHD

LITIGATION

:

TRACED

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

HIGH

GENERAL REPUTATION

:

GOOD

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 brass rods and other related products.

 

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

 

The immediate holding company of the Subject is MK INDUSTRIES (ASIA) SDN. BHD., a company incorporated in MALAYSIA.

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

02/06/2014

MYR 50,000,000.00

MYR 37,000,000.00

24/01/2007

MYR 25,000,000.00

MYR 12,000,000.00

26/05/2005

MYR 5,000,000.00

MYR 1,255,654.00

29/04/2005

MYR 500,000.00

MYR 155,654.00

18/06/2003

MYR 100,000.00

MYR 2.00

 

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


Current Shareholder(s) :

Name

Address

IC/PP/Loc No

Shareholding

(%)

MK INDUSTRIES (ASIA) SDN. BHD.

307, JALAN MAHKOTA, TAMAN MALURI, CHERAS, 1ST FLOOR, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

735129W

37,000,000.00

100.00

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

------

37,000,000.00

100.00

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

=====

+ Also Director



DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. MUTHUKUMAR A/L AYARPADDE

Address

:

66, JALAN SETIAJAYA, BUKIT DAMANSARA, 50490 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

A2733985

New IC No

:

720713-10-5669

Date of Birth

:

13/07/1972

Nationality

:

MALAYSIAN

Date of Appointment

:

25/09/2006

 

DIRECTOR 2

 

Name Of Subject

:

MURUGESAN MUTHU MUNIYANDI

Address

:

LOT 2-3-7, JALAN PERINDUSTRIAN MAHKOTA, 43700 BERANANG, SELANGOR, MALAYSIA.

IC / PP No

:

H7760413

Nationality

:

INDIAN

Date of Appointment

:

30/12/2004


MANAGEMENT

 

 

 

1)

Name of Subject

:

MUTHUKUMAR A/L AYARPADDE

Position

:

MANAGING DIRECTOR

 

 

 

AUDITOR

 

Auditor

:

RAJA MANICK & CO

Auditor' Address

:

SUITE 7A, PEARL COURT 61, JALAN THAMBY ABDULLAH, 50470 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. VIJAYAN A/L SINGARAM

IC / PP No

:

6108136

New IC No

:

601205-10-6639

Address

:

161-4, BLOCK 5, JALAN PERKASA SATU, TAMAN MALURI, CHERAS, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

AMBANK (M) BHD

 

2)

Name

:

CIMB BANK BHD

 

3)

Name

:

EXPORT-IMPORT BANK OF MALAYSIA BHD

 

4)

Name

:

STANDARD CHARTERED BANK MALAYSIA BHD

 

5)

Name

:

UNITED OVERSEAS BANK (MALAYSIA) BHD

 

6)

Name

:

HONG LEONG BANK BHD

 

7)

Name

:

ALLIANCE BANK MALAYSIA BHD

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

30/01/2007

IJARAH FACILITY AGREEMENT & MURABAHAH LETTER OF CREDIT FACILITY AGREEMENT

KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD

-

Satisfied

2

10/05/2007

CASH COLLATERAL AGREEMENT & FIXED DEPOSIT RECEIPT

EXPORT-IMPORT BANK OF MALAYSIA BHD

MYR 5,000,000.00

Unsatisfied

3

25/07/2007

DEED OF ASSIGNMENT

EXPORT-IMPORT BANK OF MALAYSIA BHD

MYR 5,000,000.00

Unsatisfied

4

03/08/2007

FIRST LEGAL CHARGE

CIMB BANK BERHAD

MYR 189,000.00

Unsatisfied

5

03/08/2007

DEPOSIT AND LETTER OF SET-OFF

CIMB BANK BERHAD

MYR 100,000.00

Unsatisfied

6

08/07/2008

FIXED DEPOSIT RECEIPT

AMBANK (M) BHD

MYR 8,100,000.00

Unsatisfied

7

28/01/2010

CASH DEPOSIT AND FIRST PARTY

STANDARD CHARTERED BANK MALAYSIA BHD

USD 8,000,000.00

Unsatisfied

8

19/04/2012

LEGAL CHARGE

UNITED OVERSEAS BANK (MALAYSIA) BHD

MYR 51,000,000.00

Unsatisfied

9

05/08/2014

ASSIGNMENT AND EXPORT PROCEEDS

EXPORT-IMPORT BANK OF MALAYSIA BHD

-

Unsatisfied

10

20/11/2014

DEED OF ASSIGNMENT

HONG LEONG BANK BHD

-

Unsatisfied

11

31/03/2015

FIXED DEPOSIT RECEIPT AND LETTER OF SET-OFF

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.

There is/are litigation case(s) on the Subject in our database as below:

- 1 case(s) filed in year 2009
- 1 case(s) filed in year 2014

According to the Credit Reporting Agencies Act 2010, consent from the Subject is required for the disclosure of this credit information. In order to have the consent from the Subject, we need to serve a notice to the Subject by disclose the following according to the Act Section 23(1) :

1) Enquirer or Company who request for this credit information.
2) Contact person of Enquirer
3) Purpose of this credit information being used.
4) Contact person of the Subject.

We shall appreciate if you can furnish us the above in order for us to serve a notice or inform the Subject accordingly. Otherwise, we are prohibited to disclose this credit information if there is no consent from the Subject according to the Act Section 24(1)(a).

No winding up petition was found in our affiliate's company 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

Percentage

:

40%

Overseas

:

YES

Percentage

:

60%

Import Countries

:

ASIA,AUSTRALIA


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

 

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

]

Average 61-90 Days

[

X

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]

 

 

CLIENTELE

 

Local

:

YES

Percentage

:

40%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

60%

Export Market

:

THAILAND

HONG KONG

TAIWAN

AUSTRALIA

SINGAPORE

EUROPE

INDIA

CHINA

Credit Term

:

30 - 60 DAYS

Payment Mode

:

LETTER OF CREDIT (LC)
CHEQUES
TELEGRAPHIC TRANSFER (TT)

Type of Customer

:

MANUFACTURING INDUSTRIES,DISTRIBUTORS

 

 

OPERATIONS

 

Products manufactured

:

BRASS RODS AND OTHER RELATED PRODUCTS

Competitor(s)

:

SHOWA DENKO HD (MALAYSIA) SDN BHD

Ownership of premises

:

OWNED

 

Total Number of Employees:

 

YEAR

2015

2014

2013


GROUP

N/A

N/A

N/A

COMPANY

90

100

91

 

Branch

:

NO

 

Other Information:


The Subject is principally engaged in the (as a / as an) manufacturing brass rods and other related products.

The Subject produces high quality brass products for various industrial applications.


The Subject has integrated environment friendly manufacturing plant, complete with environment and waste management system.


The Subject manufactures high quality brightly annealed brass rods, wires, hexagons, squares and profiles of diameter 5.5mm up to 80mm.


The products are manufactured in accordance to established international standards JIS, ASTM DIN and BS to meet the very stringent needs of clients.



CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

0389618118

Current Telephone Number

:

03-89618118

Match

:

YES

Address Provided by Client

:

1, JALAN PERUSAHAAN UTAMA, TAMAN INDUSTRI SELESA JAYA, SERI KEMBANGAN,43300,BALAKONG,SELANGOR.

Current Address

:

1, JALAN PERUSAHAAN UTAMA, TAMAN INDUSTRI SELESA JAYA, SERI KEMBANGAN, 43300 SERI KEMBANGAN, SELANGOR, MALAYSIA.

Match

:

YES

Latest Financial Accounts

:

YES

 

 

Other Investigations
We contacted one of the staff from the Subject and he provided some information.


FINANCIAL ANALYSIS

 

Profitability

Turnover

:

Increased

[

2009 - 2013

]

Profit/(Loss) Before Tax

:

Increased

[

2009 - 2013

]

Return on Shareholder Funds

:

Unfavourable

[

4.10%

]

Return on Net Assets

:

Acceptable

[

10.93%

]

The Subject's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The higher profit could be attributed to the increase in turnover. 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

[

51 Days

]

Debtor Ratio

:

Favourable

[

50 Days

]

Creditors Ratio

:

Favourable

[

35 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

:

Acceptable

[

0.82 Times

]

Current Ratio

:

Unfavourable

[

1.16 Times

]

The Subject's liquid ratio was slightly low. This could indicate that the Subject's working capital was slightly deficient. The Subject will have to improve its liquidity position either by obtaining short term financing or increase its paid up capital so that it can meet all its short term obligations as and when they fall due.

Solvency

Interest Cover

:

Unfavourable

[

1.69 Times

]

Gearing Ratio

:

Unfavourable

[

1.80 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 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 :

Generally, the Subject's performance has improved with higher turnover and profit. The Subject's liquidity was at an acceptable range. If the Subject is able to obtain further short term financing, it should be able to meet all 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 level was high and its going concern will be in doubt if there is no injection of additional shareholders' funds in times of economic downturn and / or high interest rates.

Overall financial condition of the Subject : POOR

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

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

3.3

4.0

Unemployment Rate

3.3

3.2

3.0

3.0

3.0

Net International Reserves ( MYR Billion )

415

427

-

417

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

3.50

2.20

-

-

-

Average 3 Months of Non-performing Loans ( % )

14.80

14.70

-

-

-

Average Base Lending Rate ( % )

6.60

6.53

6.53

-

-

Business Loans Disbursed( % )

15.3

32.2

-

-

-

Foreign Investment ( MYR Million )

23,546.1

26,230.4

38,238.0

-

-

Consumer Loans ( % )

-

-

-

-

-

Registration of New Companies ( No. )

45,455

45,441

46,321

-

-

Registration of New Companies ( % )

3.0

(0.0)

1.9

-

-

Liquidation of Companies ( No. )

132,485

17,092

26,430

-

-

Liquidation of Companies ( % )

417.8

(87.1)

54.6

-

-

Registration of New Business ( No. )

284,598

324,761

329,895

-

-

Registration of New Business ( % )

5.0

14.0

2.0

-

-

Business Dissolved ( No. )

20,121

20,380

18,161

-

-

Business Dissolved ( % )

1.9

1.3

(10.9)

-

-

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

-

-

Credit Cards Spending ( % )

15.6

12.6

-

-

-

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 ):

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)

-

-

-

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

46.5

-

-

-

-

% of Industry Non-performing Loans

0.1

-

-

-

-

Manufacturing #

4.7

4.8

3.4

6.6

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

-

-

Plastic Products

3.8

-

-

-

-

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

-

-

-

-

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

24 : MANUFACTURE OF BASIC METALS

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 2003, the Subject is a Private Limited company, focusing on manufacturing brass rods and other related products. With its long establishment in the market, the Subject has received strong support from its stable customers base. Its business position in the market is quite stable and it is expected to enjoy better market shares over its rivals. A paid up capital of MYR 14,800,000 allows the Subject to expand its business more comfortably. With a strong backing from its holding company, the Subject enjoys timely financial assistance should the needs arise.

Over the years, the Subject has established an extensive clientele base in the market. Besides catering to the local market, the Subject has penetrated into other countries. With the contribution of both local and overseas customers, the Subject is likely to be exposed to lower commercial risk. Hence, we believe that the Subject has better business expansion opportunities in the future. Being a moderate size company, the Subject has a total workforce of 90 employees in its business operations. Overall, we regard that the Subject's management capability is average. This indicates that the Subject has greater potential to improve its business performance and raising income for the Subject.

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 managed to maintain an adequate liquidity level, indicating that the Subject has the ability to meet its 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 30,115,875, the Subject should be able to maintain its business in the near terms.

The Subject's supplier are from both the local and overseas countries. This will eliminates the risk of dependency on deliveries from a number of key suppliers and insufficient quantities of its raw materials. Overall the Subject has a good control over its resources.

The Subject's payment habit is average. With its adequate working capital, the Subject should be able to pay its short term debts.

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

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)

INTERNATIONAL BRASS INDUSTRIES 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

FULL

SUMMARY

FULL

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

156,872,111

119,708,961

98,493,453

93,380,130

147,348,060

Other Income

404,085

766,046

2,282,001

-

1,389,921

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

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

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

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

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

Total Turnover

157,276,196

120,475,007

100,775,454

93,380,130

148,737,981

Costs of Goods Sold

(145,863,630)

(109,493,155)

(91,806,492)

-

(136,316,155)

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

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

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

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

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

Gross Profit

11,412,566

10,981,852

8,968,962

-

12,421,826

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

2,049,048

1,258,857

766,100

404,306

2,032,141

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

2,049,048

1,258,857

766,100

404,306

2,032,141

Taxation

(813,435)

(645,411)

(176,448)

1,323,594

(225,245)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

1,235,613

613,446

589,652

1,727,900

1,806,896

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

11,352,931

10,739,485

10,149,833

8,421,933

9,202,167

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

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

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

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

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

As restated

11,352,931

10,739,485

10,149,833

8,421,933

9,202,167

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

12,588,544

11,352,931

10,739,485

10,149,833

11,009,063

DIVIDENDS - Ordinary (paid & proposed)

-

-

-

-

(2,587,130)

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

12,588,544

11,352,931

10,739,485

10,149,833

8,421,933

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Bank overdraft

3,845

654,670

1,562,124

-

2,209,359

Bankers' acceptance

1,585,212

1,928,218

252,332

-

-

Hire purchase

31,516

19,636

21,181

-

40,992

Letter of credit

337,571

149,794

121,697

-

-

Term loan / Borrowing

996,236

691,208

1,396,803

-

1,933,245

Others

-

-

-

-

629,168

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

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

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

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

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

2,954,380

3,443,526

3,354,137

-

4,812,764

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

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

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

-

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

DEPRECIATION (as per notes to P&L)

2,341,992

2,305,051

2,120,976

-

3,203,567

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

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

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

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

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

2,341,992

2,305,051

2,120,976

-

3,203,567

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

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

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

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

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

 

BALANCE SHEET

 

 

INTERNATIONAL BRASS INDUSTRIES SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

35,476,273

36,523,395

35,309,861

37,353,981

39,128,015

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

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

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

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

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

TOTAL LONG TERM ASSETS

35,476,273

36,523,395

35,309,861

37,353,981

39,128,015

Stocks

21,888,537

22,611,667

17,131,608

-

11,758,582

Trade debtors

21,356,560

15,441,624

13,822,954

-

15,229,925

Other debtors, deposits & prepayments

2,652,093

2,043,888

3,043,882

-

2,086,528

Short term deposits

4,000

3,493,667

3,453,099

-

11,590,856

Amount due from holding company

21,583,891

21,583,891

21,583,891

-

18,092,666

Amount due from related companies

2,575,341

1,383,386

-

-

-

Cash & bank balances

5,016,707

2,029,129

2,461,523

-

3,709,098

Others

-

245,363

732,562

-

252,834

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

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

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

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

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

TOTAL CURRENT ASSETS

75,077,129

68,832,615

62,229,519

64,163,748

62,720,489

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

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

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

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

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

TOTAL ASSET

110,553,402

105,356,010

97,539,380

101,517,729

101,848,504

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

14,145,187

12,858,395

10,876,314

-

1,121,129

Other creditors & accruals

1,708,464

1,348,056

864,070

-

659,292

Hire purchase & lease creditors

197,855

160,421

12,000

-

199,213

Bank overdraft

-

630,329

598,927

-

741,432

Short term borrowings/Term loans

6,286,141

8,258,865

3,367,313

-

3,527,935

Bill & acceptances payable

34,934,361

31,450,155

24,366,214

-

26,354,310

Amounts owing to related companies

396,368

1,189,568

1,337,508

-

1,730,384

Amounts owing to director

7,025,225

25,225

6,041,225

-

3,419,179

Provision for taxation

98,020

-

-

-

-

Other liabilities

-

-

-

-

2,573,973

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

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

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

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

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

TOTAL CURRENT LIABILITIES

64,791,621

55,921,014

47,463,571

39,897,904

40,326,847

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

10,285,508

12,911,601

14,765,948

24,265,844

22,393,642

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

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

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

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

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

TOTAL NET ASSETS

45,761,781

49,434,996

50,075,809

61,619,825

61,521,657

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

12,000,000

12,000,000

12,000,000

12,000,000

12,000,000

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

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

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

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

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

TOTAL SHARE CAPITAL

12,000,000

12,000,000

12,000,000

12,000,000

12,000,000

Revaluation reserve

5,527,331

5,527,331

5,527,331

5,527,331

5,527,331

Retained profit/(loss) carried forward

12,588,544

11,352,931

10,739,485

10,149,833

8,421,933

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

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

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

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

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

TOTAL RESERVES

18,115,875

16,880,262

16,266,816

15,677,164

13,949,264

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

30,115,875

28,880,262

28,266,816

27,677,164

25,949,264

Long term loans

12,580,595

17,300,475

19,084,889

-

31,368,524

Hire purchase creditors

358,799

417,799

45,856

-

220,703

Deferred taxation

2,706,512

2,836,460

2,678,248

-

3,983,166

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

15,645,906

20,554,734

21,808,993

33,942,661

35,572,393

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

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

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

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

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

45,761,781

49,434,996

50,075,809

61,619,825

61,521,657

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

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

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

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

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

 

FINANCIAL RATIO

 

 

INTERNATIONAL BRASS INDUSTRIES SDN. BHD.

 

TYPES OF FUNDS

Cash

5,020,707

5,522,796

5,914,622

-

15,299,954

Net Liquid Funds

(29,913,654)

(26,557,688)

(19,050,519)

-

(11,795,788)

Net Liquid Assets

(11,603,029)

(9,700,066)

(2,365,660)

24,265,844

10,635,060

Net Current Assets/(Liabilities)

10,285,508

12,911,601

14,765,948

24,265,844

22,393,642

Net Tangible Assets

45,761,781

49,434,996

50,075,809

61,619,825

61,521,657

Net Monetary Assets

(27,248,935)

(30,254,800)

(24,174,653)

(9,676,817)

(24,937,333)

PROFIT & LOSS ITEMS

Earnings Before Interest & Tax (EBIT)

5,003,428

4,702,383

4,120,237

-

6,844,905

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

7,345,420

7,007,434

6,241,213

-

10,048,472

BALANCE SHEET ITEMS

Total Borrowings

54,357,751

58,218,044

47,475,199

-

62,412,117

Total Liabilities

80,437,527

76,475,748

69,272,564

73,840,565

75,899,240

Total Assets

110,553,402

105,356,010

97,539,380

101,517,729

101,848,504

Net Assets

45,761,781

49,434,996

50,075,809

61,619,825

61,521,657

Net Assets Backing

30,115,875

28,880,262

28,266,816

27,677,164

25,949,264

Shareholders' Funds

30,115,875

28,880,262

28,266,816

27,677,164

25,949,264

Total Share Capital

12,000,000

12,000,000

12,000,000

12,000,000

12,000,000

Total Reserves

18,115,875

16,880,262

16,266,816

15,677,164

13,949,264

LIQUIDITY (Times)

Cash Ratio

0.08

0.10

0.12

-

0.38

Liquid Ratio

0.82

0.83

0.95

-

1.26

Current Ratio

1.16

1.23

1.31

1.61

1.56

WORKING CAPITAL CONTROL (Days)

Stock Ratio

51

69

63

-

29

Debtors Ratio

50

47

51

-

38

Creditors Ratio

35

43

43

-

3

SOLVENCY RATIOS (Times)

Gearing Ratio

1.80

2.02

1.68

-

2.41

Liabilities Ratio

2.67

2.65

2.45

2.67

2.92

Times Interest Earned Ratio

1.69

1.37

1.23

-

1.42

Assets Backing Ratio

3.81

4.12

4.17

5.13

5.13

PERFORMANCE RATIO (%)

Operating Profit Margin

1.31

1.05

0.78

0.43

1.38

Net Profit Margin

0.79

0.51

0.60

1.85

1.23

Return On Net Assets

10.93

9.51

8.23

0.66

11.13

Return On Capital Employed

10.89

9.36

8.13

0.66

10.96

Return On Shareholders' Funds/Equity

4.10

2.12

2.09

6.24

6.96

Dividend Pay Out Ratio (Times)

0

0

0

-

1.43

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

0

-

0

 


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.66.16

UK Pound

1

Rs.103.87

Euro

1

Rs.75.89

 

 

INFORMATION DETAILS

 

Analysis Done by :

KAS

 

 

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.