MIRA INFORM REPORT

 

 

Report No. :

352061

Report Date :

01.12.2015

 

IDENTIFICATION DETAILS

 

Name :

HOGANAS BJUF ASIA PACIFIC SDN. BHD.

 

 

Registered Office :

62C, Jalan SS 21/62, Damansara Utama, 47400 Petaling Jaya, Selangor

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2014

 

 

Date of Incorporation :

08.07.2005

 

 

Com. Reg. No.:

702238-H

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Trading of Refractory and Related Materials.

 

 

No. of Employees :

10 [2015]

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ca

 

RATING

STATUS

PROPOSED CREDIT LINE

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

Limited with full security

 

 

Status :

Moderate

 

 

Payment Behaviour :

Slow

 

 

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. Malaysia is vulnerable to a fall in world commodity prices or a general slowdown in global economic activity.

 

The NAJIB administration 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. Gross exports of goods and services constitute more than 80% of GDP. The oil and gas sector supplied about 29% of government revenue in 2014. 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 trying to lessen its dependence on state oil producer Petronas.

 

Bank Negara Malaysia (the central bank) maintains healthy foreign exchange reserves; a well-developed regulatory regime has limited Malaysia's exposure to riskier financial instruments and the global financial crisis. In order to attract increased investment, NAJIB 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.

:

702238-H

COMPANY NAME

:

HOGANAS BJUF ASIA PACIFIC SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

08/07/2005

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

62C, JALAN SS 21/62, DAMANSARA UTAMA, 47400 PETALING JAYA, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

:

B-02-10, ENDAH PROMENADE, JALAN 3/149E, TAMAN SRI ENDAH, BANDAR BARU SERI PETALING, 57000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

TEL.NO.

:

03-90549978

FAX.NO.

:

03-90549128

CONTACT PERSON

:

GUNNAR PER AKE ERIKSSON ( DIRECTOR )

INDUSTRY CODE

:

466

PRINCIPAL ACTIVITY

:

TRADING OF REFRACTORY AND RELATED MATERIALS

AUTHORISED CAPITAL

:

MYR 500,000.00 DIVIDED INTO
ORDINARY SHARE 500,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 500,000.00 DIVIDED INTO
ORDINARY SHARES 500,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 26,606,101 [2014]

NET WORTH

:

MYR (686,641) [2014]

STAFF STRENGTH

:

10 [2015]

BANKER (S)

:

PUBLIC BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

FAIR

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

HIGH

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

 

 

HISTORY/ BACKGROUND

 

The Subject is a private limited company and is allowed to have a minimum of one and a maximum of forty-nine shareholders. As a private limited company, the Subject must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the Subject is capable of owning assets, entering into contracts, sue or be sued by other companies. The liabilities of the shareholders are to the extent of the equity they have taken up and the creditors cannot claim on shareholders' personal assets even if the Subject is insolvent. The Subject is governed by the Companies Act, 1965 and the company must file its annual returns, together with its financial statements with the Registrar of Companies.

 

The Subject is principally engaged in the (as a / as an) trading of refractory and related materials.

 

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

 

The immediate holding company of the Subject is HOGANAS BJUF AB, a company incorporated in SWEDEN.

 

Former Address(es)

Address

As At Date

NO 11-5 BLOCK E2 JALAN PJU 1/42A, DATARAN PRIMA, 47301, SELANGOR, MALAYSIA

15/02/2013

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

12/08/2015

MYR 500,000.00

MYR 500,000.00

16/09/2005

MYR 500,000.00

MYR 350,000.00

08/07/2005

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

(%)

HOGANAS BJUF AB

BOX 502, 267, 25, BJUV

556264-6272

500,000.00

100.00

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

------

500,000.00

100.00

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

=====

+ Also Director


Former Shareholder(s) :

Name

Country

IC/PP/Loc No

Shareholding

Last Updated

CHAI YONG FOO

MALAYSIA

680201-08-7299

N/A

N/A

OLSEN THIRSTRUP ERIK

MALAYSIA

81814768

N/A

N/A

 

The Subject's interest in other companies (Subsidiaries/Associates) are shown as follow :

 

Local No

Country

Company

Status

(%)

As At

935818U

MALAYSIA

HOGANAS CONTRACTING ASIA PACIFIC SDN. BHD.

-

100.00

26/11/2014




 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. GUNNAR PER AKE ERIKSSON

Address

:

22-01, SEPUTIH PERMAI CONDOMINIUM, JALAN TAMAN SEPUTIH, 58000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

87007290

Date of Appointment

:

01/06/2012

 

DIRECTOR 2

 

Name Of Subject

:

JONAS BERTIL OLDIN

Address

:

BUKARSVAGEN 25, SARO, 42941, SWEDEN.

IC / PP No

:

81751164

Nationality

:

SWEDE

Date of Appointment

:

13/06/2013

 

DIRECTOR 3

 

Name Of Subject

:

MR. HARESH MAHADEVAN

Address

:

656, LORONG SELASIH 2, TAMAN SELASIH SIKAMAT, 70400 SEREMBAN, NEGERI SEMBILAN, MALAYSIA.

Other Address(es)

:

- 40 MURUGESU GARDENS, JALAN DATO SIAMANG GAGAP, 70400 SEREMBAN, NEGERI SEMBILAN, MALAYSIA.

New IC No

:

660628-10-5929

Date of Birth

:

28/06/1966

Nationality

:

MALAYSIAN

Date of Appointment

:

22/04/2013



MANAGEMENT

 

 

1)

Name of Subject

:

GUNNAR PER AKE ERIKSSON

Position

:

DIRECTOR

 

2)

Name of Subject

:

KENNET CHEAH

Position

:

MARKETING MANAGER

 

3)

Name of Subject

:

ANGIE KAT

Position

:

HUMAN RESOURCE MANAGER

 

 

 

AUDITOR

 

Auditor

:

MESSRS FYL CHAN & CO

Auditor' Address

:

3-2, JALAN 2/76C, DESA PANDAN, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. WONG CHOW LAN

New IC No

:

621005-05-5353

Address

:

322, BUKIT LEMON, 70200 SEREMBAN, NEGERI SEMBILAN, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

PUBLIC BANK 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

:

NO

Percentage

:

0%

Overseas

:

YES

Percentage

:

100%

Import Countries

:

SWEDEN,BRAZIL


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

 

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

]

Average 61-90 Days

[

]

Fair 91-120 Days

[

X

]

Poor >120 Days

[

]

 

 

CLIENTELE

 

Local

:

YES

Percentage

:

50%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

50%

Export Market

:

ASIA PACIFIC

Credit Term

:

30 DAYS

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)

Type of Customer

:

STEEL INDUSTRY,CONSTRUCTION INDUSTRY

 

 

OPERATIONS

 

Goods Traded

:

REFRACTORY AND RELATED MATERIALS

Ownership of premises

:

LEASED/RENTED

 

Total Number of Employees:

 

YEAR

2015

2014

2013

2012

2011


GROUP

N/A

N/A

N/A

N/A

N/A

COMPANY

10

10

8

5

5

 

Branch

:

NO

 

 

Other Information:


The Subject is principally engaged in the (as a / as an) trading of refractory and related materials.

The Subject deserved global reputation as a developer, producer and supplier of smart refractory solution.

The Subject require refractories capable of with high temperatures and highly corrosive or abrasive operating conditions.

The Subject refractory products and turnkey solutions that will contribute to increased efficiency and profitability among the customers.

The Subject's products are mainly used for industrial sectors.


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-90549978

Match

:

N/A

Address Provided by Client

:

B-02-10, ENDAH PROMENADE, JALAN 3/149E, TAMAN SRI ENDAH, BANDAR BARU SERI PETALING,57000,KUALA LUMPUR,WILAYAH PERSEKUTUAN.

Current Address

:

B-02-10, ENDAH PROMENADE, JALAN 3/149E, TAMAN SRI ENDAH, BANDAR BARU SERI PETALING, 57000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

Match

:

YES

Latest Financial Accounts

:

YES

 

Other Investigations

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


FINANCIAL ANALYSIS

 

Profitability

Turnover

:

Erratic

[

2010 - 2014

]

Profit/(Loss) Before Tax

:

Decreased

[

2010 - 2014

]

Return on Shareholder Funds

:

Unfavourable

[

202.47%

]

Return on Net Assets

:

Unfavourable

[

203.41%

]

The fluctuating turnover reflects the fierce competition among the existing and new market players.The Subject incurred losses during the year due to the inefficient control of its operating costs. Although the Subject's returns showed positive figures it is not reflective of the true situation. The Subject incurred losses during the year and its shareholders' funds have turned red. The positive returns on shareholders' funds is the result of losses divided by negative shareholders' funds. The Subject's management was inefficient in utilising the assets to generate returns.

Liquidity

Current Ratio

:

Unfavourable

[

0.92 Times

]

Due to its weak liquidity position, the Subject will be faced with problems in meeting all its short term obligations if no short term loan is obtained or additional capital injected into the Subject.

Solvency

Liability Ratio

:

Unfavourable

[

(17.13 Times)

]

The Subject has an unfavourable liabilities ratio and it may face financial difficulties if no additional capital is injected.

Overall Assessment :

The Subject's losses increased but its turnover showed a  fluctuating trend. This indicate the Subject was slowly losing its market share due to its competitors. 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. The Subject has high financial risks. If its shareholders do not inject more capital into the company or if its business performance does not improve, its going concern may be in question.

Overall financial condition of the Subject : POOR

 

 

 

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

466 : Other specialized wholesale

INDUSTRY :

TRADING

The wholesale and retail trade is expected to increase 7.1% in 2015 (2014: 7.7%) driven by strong domestic consumption and higher tourist arrivals following the Malaysia Year of Festivals 2015. Besides, in 2014, the wholesale and retail trade subsector is expected to increase 7.7% (2013: 6.4%) supported by strong domestic consumption.

According to Retail Group Malaysia (RGM), the pharmacy and personal care sub-sector had slow growth rate of 2.6% for the first quarter of 2014, while "other specialty stores" grew at a rate of 3.5%. During the first quarter of 2014, fashion and fashion accessories recorded a sustainable growth of 6.3% as compared with the same period last year (3.6%).

The retail segment increased 10.1% (January - June 2013: 7.1%) attributed to brisk sales in retail outlets such as hypermarkets and large-scale superstores. Since the launch of the Small Retailer Transformation programme (TUKAR) in January 2011 up to end-July 2014, 1,761 small retailer stores (end-July 2013: 1,381) have been modernized to improve their competitiveness. In addition, the strong growth of the retail segment was supported by 1Malaysia Unified Sales held from 29 June 2014 to 1 September 2014 to attract foreign and local tourists to shop in Malaysia. Meanwhile, the wholesale segment expanded 8.2% (January - June 2013: 4.9%) due to higher sales of non-agricultural intermediate products, such as petrol, diesel, lubricants and household goods. Furthermore, food and beverage outlets, laundry outlets, car wash centres, abd health and beauty outlets took a hit from the water rationing in the Klang Valley since February this year.

On the other hand, in 2014, Malaysia's total trade is expected to grow 5.2% to RM1.44 trillion (2013: 4.5%; RM1.37 trillion) underpinned by recovery in key advanced economies, resilient regional demand, and partly due to the base effect arising from sluggish exports in the corresponding period last year. Gross exports are anticipated to expand 6% to RM762.8 billion while import decreased 4.3% to RM677.2 billion (2013: 2.4%; RM719.8 billion; 7%; RM 649.1 billion). Consequently, the trade surplus is expected to be higher at RM85.6 billion or 7.9% of GDP in 2014 (2013: RM70.7 billion; 7.2%).

Furthermore, gross exports rebounded by 10.7% to RM441.3 billion during the first seven months of 2014 (January - July 2013: -2.8%; RM398.5 billion), with manufactured and mining exports rising at a double digit pace of 11.4% and 12.5%. Shipment of agriculture products grew at a slower pace of 2.7%, primarily due to lower receipts of crude rubber (-24.6%) while export growth of other commodities remained steady. Consequently, exports of manufactured and mining products are expected to grow 6.1% and 6.4% in 2014 (2013: 5.1%; 3.3%). Meanwhile, agriculture exports are expected to rebound sharply by 4.5% in 2014 (2013: -14.4%) despite moderating commodity prices. Malaysia's top 3 trading partners are China, Singapore, and Japan.

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

OVERALL INDUSTRY OUTLOOK : Average Growth



CREDIT RISK EVALUATION & RECOMMENDATION

 


Incorporated in 2005, the Subject is a Private Limited company, focusing on trading of refractory and related materials. Having been in the industry for over a decade, the Subject has achieved a certain market share and has built up a satisfactory reputation in the market. It should have received supports from its regular customers. The Subject have a strong support from its shareholder. However, the Subject does not have a strong capital position. Without a strong capital, the Subject may face difficulties to expand its business compared to other large corporation.

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 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.

Due to the challenging market conditions, the Subject's business performance seems to be deteriorating and losses incurred. The Subject has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. Due to its weak liquidity position, the Subject may face working capital deficiency in meeting its short term financial obligations if no fresh capital are injected into the Subject. The Subject has an unfavourable liabilities ratio and it may face financial difficulties if no additional capital is injected. The Subject's unfavourable financial performance over the years has wiped out its shareholders' funds to a deficit of MYR -686,641. Therefore, the Subject as a going concern is much dependent on its ability to generate sufficient cash flow and obtain additional financing to meet its future obligations.

Investigation revealed that the Subject's supplies are 100% sourced from overseas countries. As an imported oriented company, its forex exposure is high. The Subject faces foreign currency fluctuation which may affect its overall operating costs.

The Subject's overall payment habit is fair and this clearly implied a weak credit control of the Subject.

The industry shows an upward trend and this trend is very likely to sustain in the near terms.

Based on the above unfavourable condition, we regard granting credit to the Subject to be quite risky. Hence, credit is not recommended.

 



PROFIT AND LOSS ACCOUNT

 

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

HOGANAS BJUF ASIA PACIFIC SDN. BHD.

 

Financial Year End

2014-12-31

2013-12-31

2012-12-31

2011-12-31

2010-12-31

Months

12

12

12

12

12

Consolidated Account

GROUP

GROUP

GROUP

GROUP

GROUP

Audited Account

YES

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

YES

Financial Type

SUMMARY

FULL

FULL

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

26,606,101

32,032,600

21,190,547

20,484,953

22,161,196

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

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

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

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

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

Total Turnover

26,606,101

32,032,600

21,190,547

20,484,953

22,161,196

Costs of Goods Sold

-

(27,388,031)

(16,185,012)

(14,081,444)

(17,114,381)

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

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

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

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

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

Gross Profit

-

4,644,569

5,005,535

6,403,509

5,046,815

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

(1,396,695)

216,988

318,625

1,701,880

1,839,245

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

(1,396,695)

216,988

318,625

1,701,880

1,839,245

Taxation

6,466

202

(192,569)

(422,676)

(566,073)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

(1,390,229)

217,190

126,056

1,279,204

1,273,172

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

353,588

136,398

1,310,342

1,431,138

3,007,966

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

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

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

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

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

As restated

353,588

136,398

1,310,342

1,431,138

3,007,966

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

(1,036,641)

353,588

1,436,398

2,710,342

4,281,138

DIVIDENDS - Ordinary (paid & proposed)

-

-

(1,300,000)

(1,400,000)

(2,850,000)

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

(1,036,641)

353,588

136,398

1,310,342

1,431,138

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Others

-

37,055

35,405

17,960

28,942

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

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

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

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

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

-

37,055

35,405

17,960

28,942

-

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

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

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

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

DEPRECIATION (as per notes to P&L)

-

84,708

111,077

57,129

32,467

AMORTIZATION

-

-

-

-

77,398

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

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

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

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

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

-

84,708

111,077

57,129

109,865

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

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

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

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

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

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE SHEET

 

HOGANAS BJUF ASIA PACIFIC SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

263,726

317,735

408,650

240,814

255,653

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

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

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

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

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

TOTAL LONG TERM ASSETS

263,726

317,735

408,650

240,814

255,653

Stocks

-

-

-

172,500

-

Trade debtors

-

3,882,015

2,400,985

207,073

4,463,536

Other debtors, deposits & prepayments

-

470,139

236,468

56,279

28,291

Amount due from holding company

-

3,842,000

1,818,000

2,760,400

1,858,500

Cash & bank balances

-

2,360,143

3,289,863

4,710,386

1,954,451

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

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

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

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

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

TOTAL CURRENT ASSETS

10,814,979

10,554,297

7,745,316

7,906,638

8,304,778

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

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

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

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

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

TOTAL ASSET

11,078,705

10,872,032

8,153,966

8,147,452

8,560,431

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

-

6,369,914

5,623,116

5,310,051

4,546,490

Other creditors & accruals

-

258,650

381,081

99,110

320,804

Hire purchase & lease creditors

-

133,326

173,331

-

-

Amounts owing to holding company

-

3,400,088

1,490,040

1,043,093

1,733,526

Provision for taxation

-

6,466

-

34,856

178,473

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

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

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

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

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

TOTAL CURRENT LIABILITIES

11,765,346

10,168,444

7,667,568

6,487,110

6,779,293

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

(950,367)

385,853

77,748

1,419,528

1,525,485

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

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

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

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

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

TOTAL NET ASSETS

(686,641)

703,588

486,398

1,660,342

1,781,138

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

350,000

350,000

350,000

350,000

350,000

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

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

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

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

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

TOTAL SHARE CAPITAL

350,000

350,000

350,000

350,000

350,000

Retained profit/(loss) carried forward

(1,036,641)

353,588

136,398

1,310,342

1,431,138

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

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

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

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

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

TOTAL RESERVES

(1,036,641)

353,588

136,398

1,310,342

1,431,138

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

(686,641)

703,588

486,398

1,660,342

1,781,138

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

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

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

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

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

(686,641)

703,588

486,398

1,660,342

1,781,138

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

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

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

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

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

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCIAL RATIO

 

HOGANAS BJUF ASIA PACIFIC SDN. BHD.

 

TYPES OF FUNDS

Cash

-

2,360,143

3,289,863

4,710,386

1,954,451

Net Liquid Funds

-

2,360,143

3,289,863

4,710,386

1,954,451

Net Liquid Assets

(950,367)

385,853

77,748

1,247,028

1,525,485

Net Current Assets/(Liabilities)

(950,367)

385,853

77,748

1,419,528

1,525,485

Net Tangible Assets

(686,641)

703,588

486,398

1,660,342

1,781,138

Net Monetary Assets

(950,367)

385,853

77,748

1,247,028

1,525,485

PROFIT & LOSS ITEMS

Earnings Before Interest & Tax (EBIT)

-

254,043

354,030

1,719,840

1,868,187

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

-

338,751

465,107

1,776,969

1,978,052

BALANCE SHEET ITEMS

Total Borrowings

-

133,326

173,331

0

0

Total Liabilities

11,765,346

10,168,444

7,667,568

6,487,110

6,779,293

Total Assets

11,078,705

10,872,032

8,153,966

8,147,452

8,560,431

Net Assets

(686,641)

703,588

486,398

1,660,342

1,781,138

Net Assets Backing

(686,641)

703,588

486,398

1,660,342

1,781,138

Shareholders' Funds

(686,641)

703,588

486,398

1,660,342

1,781,138

Total Share Capital

350,000

350,000

350,000

350,000

350,000

Total Reserves

(1,036,641)

353,588

136,398

1,310,342

1,431,138

LIQUIDITY (Times)

Cash Ratio

-

0.23

0.43

0.73

0.29

Liquid Ratio

-

1.04

1.01

1.19

1.23

Current Ratio

0.92

1.04

1.01

1.22

1.23

WORKING CAPITAL CONTROL (Days)

Stock Ratio

-

0

0

3

0

Debtors Ratio

-

44

41

4

74

Creditors Ratio

-

85

127

138

97

SOLVENCY RATIOS (Times)

Gearing Ratio

-

0.19

0.36

0

0

Liabilities Ratio

(17.13)

14.45

15.76

3.91

3.81

Times Interest Earned Ratio

-

6.86

10.00

95.76

64.55

Assets Backing Ratio

(1.96)

2.01

1.39

4.74

5.09

PERFORMANCE RATIO (%)

Operating Profit Margin

(5.25)

0.68

1.50

8.31

8.30

Net Profit Margin

(5.23)

0.68

0.59

6.24

5.75

Return On Net Assets

203.41

36.11

72.79

103.58

104.89

Return On Capital Employed

203.41

30.35

53.66

103.58

104.89

Return On Shareholders' Funds/Equity

202.47

30.87

25.92

77.04

71.48

Dividend Pay Out Ratio (Times)

-

0

10.31

1.09

2.24

NOTES TO ACCOUNTS

Contingent Liabilities

-

0

0

0

0

 


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.66.81

UK Pound

1

Rs.100.37

Euro

1

Rs.70.68

MYR

1

Rs.15.73

Note : Above are approximate rates obtained from sources believed to be correct

 

 

INFORMATION DETAILS

 

Analysis Done by :

TRI

 

 

Report Prepared by :

NIT

 

               


 

RATING EXPLANATIONS

 

RATING

STATUS

PROPOSED CREDIT LINE

 

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

 

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

 

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

 

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

 

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

 

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

 

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

Credit not recommended

 

--

NB

New Business

--

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                  Payment record (10%)

Credit history (10%)                   Market trend (10%)                                Operational size (10%)

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.