MIRA INFORM REPORT

 

 

Report No. :

353128

Report Date :

10.12.2015

 

IDENTIFICATION DETAILS

 

Name :

DAMAS (M) SDN. BHD.

 

 

Registered Office :

52a, Lebuh Enggang, 41150 Klang, Selangor

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.03.2014

 

 

Date of Incorporation :

04.04.2008

 

 

Com. Reg. No.:

812418-X

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Wholesale of Diamond And Jewellery

 

 

Employees:

3

 

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.

:

812418-X

COMPANY NAME

:

DAMAS (M) SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

04/04/2008

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

52A, LEBUH ENGGANG, 41150 KLANG, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

:

SUITE A-33-3, BLOCK A, MENARA UOA, BANGSAR UTAMA 1, LEVEL 33, 59000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

TEL.NO.

:

03-22011580

FAX.NO.

:

03-22011580

HP.NO.

:

0162211051

CONTACT PERSON

:

LOVELISH JAIN ( EXECUTIVE DIRECTOR )

INDUSTRY CODE

:

46444

PRINCIPAL ACTIVITY

:

WHOLESALE OF DIAMOND AND JEWELLERY

AUTHORISED CAPITAL

:

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

ISSUED AND PAID UP CAPITAL

:

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

SALES

:

MYR 11,059,986 [2014]

NET WORTH

:

MYR (179,295) [2014]

BANKER (S)

MALAYAN BANKING BHD

STAFF STRENGTH

:

3 [2015]

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

SLOW

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

MODERATE

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

 

 

HISTORY / BACKGROUND

 

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

The Subject is principally engaged in the (as a / as an) wholesale of diamond and jewellery.

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

 

Former Address(es)

Address

As At Date

BLOCK E1, FLOOR 2, UNIT 3, PHASE 1, PANTAI HILL PARK, JALAN PANTAI DALAM, 59200, WILAYAH PERSEKUTUAN, MALAYSIA

15/02/2013

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

30/09/2014

MYR 1,000,000.00

MYR 1,000,000.00

07/04/2008

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

(%)

LOVELISH JAIN +

344-23-2, VISTA DAMAI CONDOMINIUM, JALAN TUN RAZAK, 50400 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

Z1800173

999,999.00

100.00

MS. SZURAYNI HANUM BINTI AHMAD +

LOT 1972, JALAN NENAS, MERU, 42200 KAPAR, SELANGOR, MALAYSIA.

791126-10-5478

1.00

0.00

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

------

1,000,000.00

100.00

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

=====

+ Also Director

 

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

VIPUL JITENDRAKUMAR SONI

Address

:

344-23-2, VISTA DAMAI CONDOMINIUM, JALAN TUN RAZAK, 50400 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

L2448863

Date of Appointment

:

06/09/2013

 

DIRECTOR 2

 

Name Of Subject

:

MS. SZURAYNI HANUM BINTI AHMAD

Address

:

LOT 1972, JALAN NENAS, MERU, 42200 KAPAR, SELANGOR, MALAYSIA.

New IC No

:

791126-10-5478

Date of Birth

:

26/11/1979

Nationality

:

MALAYSIAN

Date of Appointment

:

04/04/2008

 

DIRECTOR 3

 

Name Of Subject

:

LOVELISH JAIN

Address

:

344-23-2, VISTA DAMAI CONDOMINIUM, JALAN TUN RAZAK, 50400 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

Other Address(es)

:

E1-2-3 PHASE 1, PANTAI HILL PARK, JALAN PANTAI DALAM, 59200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

Z1800173

Date of Appointment

:

04/04/2008



MANAGEMENT

 

 

 

1)

Name of Subject

:

LOVELISH JAIN

Position

:

EXECUTIVE DIRECTOR

 

 

 

AUDITOR

 

Auditor

:

CROWE HORWATH

Auditor' Address

:

52A-1, LEBUH ENGGANG, 41150 KLANG, SELANGOR, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. YEW ING CHUO

IC / PP No

:

K0055981

New IC No

:

650606-13-5888

Address

:

52A, LEBUH ENGGANG, 41150 KLANG, SELANGOR, MALAYSIA.

 

2)

Company Secretary

:

MR. NG SAY OR

IC / PP No

:

4537146

New IC No

:

531118-10-6103

Address

:

6, SOLOK PEGAGA SATU, OFF JALAN PEGAGA, TAMAN CHI LIUNG, 41200 KLANG, SELANGOR, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

 

 

 

ENCUMBRANCE (S)


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

 

 

LITIGATION CHECK AGAINST SUBJECT

 

* A check has been conducted in our databank againt the Subject whether the Subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia.

No legal action was found in our databank.

No winding up petition was found in our databank.

 

DEFAULTER CHECK AGAINST SUBJECT


* We have checked through the Subject in our defaulters' database which comprised of debtors that have been blacklisted by our customers and debtors that have been placed or assigned to us for collection.

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



PAYMENT RECORD

 

 

SOURCES OF RAW MATERIALS:

Local

:

N/A

Overseas

:

N/A


The Subject refused to disclose its suppliers.

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

[

]

Poor >120 Days

[

X

]

 

 

CLIENTELE

 

Local

:

YES

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Export Market

:

HONG KONG

Credit Term

:

N/A

Payment Mode

:

N/A

 

 

OPERATIONS

 

Goods Traded

:

DIAMOND AND JEWELLERY

Competitor(s)

:

LUXURYCONCEPTS WATCHES AND JEWELLERY SDN BHD
PAJAK GADAI THYE FOH SDN BHD

 

Total Number of Employees:

YEAR

2015

2010

GROUP

N/A

N/A

COMPANY

3

1

 

Branch

:

NO

 

Other Information:


The Subject is principally engaged in the (as a / as an) wholesale of diamond and jewellery.

The major products sold by the Subject is the diamond.

The Subject sells the products based on its customers' orders.


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-22011580

Match

:

N/A

Address Provided by Client

:

NO 52A LEBUH ENGGANG 41150 KLANG SELANGOR 59000

Current Address

:

SUITE A-33-3, BLOCK A, MENARA UOA, BANGSAR UTAMA 1, LEVEL 33, 59000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

Match

:

NO

Latest Financial Accounts

:

YES

 

Other Investigations


On 3rd December 2015 we contacted the director of the Subject and he provided some information on the Subject.

The Subject refused to disclose it's number of employees.

The address provided belongs to the Subject's registered office.


FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Decreased

[

2010 - 2014

]

Profit/(Loss) Before Tax

:

Increased

[

2010 - 2014

]

Return on Shareholder Funds

:

Unfavourable

[

794.59%

]

Return on Net Assets

:

Unfavourable

[

791.05%

]

The continuous fall in turnover could be due to the lower demand for the Subject's products / services.Higher losses before tax during the year could be due to the higher operating costs incurred. 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.

Working Capital Control

Stock Ratio

:

Unfavourable

[

1068 Days

]

Debtor Ratio

:

Favourable

[

22 Days

]

Creditors Ratio

:

Unfavourable

[

1247 Days

]

The Subject could be incurring higher holding cost. As its capital was tied up in stocks, it could face liquidity problems. The favourable debtors' days could be due to the good credit control measures implemented by the Subject. The unfavourable creditors' ratio could be due to the Subject taking advantage of the credit granted by its suppliers. However this may affect the goodwill between the Subject and its suppliers and the Subject may inadvertently have to pay more for its future supplies.

Liquidity

Liquid Ratio

:

Unfavourable

[

0.03 Times

]

Current Ratio

:

Unfavourable

[

0.99 Times

]

A low liquid ratio means that the Subject may be facing working capital deficiency. If the Subject cannot obtain additional financing or injection of fresh capital, it may face difficulties in meeting its short term obligations.

Solvency

Interest Cover

:

Nil

[

0.00 Times

]

Gearing Ratio

:

Favourable

[

0.00 Times

]

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

Overall Assessment :

The Subject's losses could be attributed to the lower turnover which in turn could be the result of unfavourable market conditions. 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. The Subject did not make any interest payment during the year. The Subject was dependent on its shareholders' funds to finance its business needs. The Subject was a zero gearing company, it was solely dependant on its shareholders to provide funds to finance its business. The Subject has good chance of getting loans, if the needs arises.

Overall financial condition of the Subject : POOR

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2011

2012

2013

2014*

2015**

Population ( Million)

28.7

29.3

29.8

30.0

30.5

Gross Domestic Products ( % )

5.1

5.6

5.3

6.0

4.7

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

82,480

85,258

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

3.2

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

44.0

44.2

Tourist Arrival ( Million Persons )

24.7

25.0

25.7

27.4

29.4

Hotel Occupancy Rate ( % )

60.6

62.4

62.6

63.6

58.8

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)

1.0

0.7

0.7

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

5.3

Electrical & Electronics

(4.0)

12.7

6.9

13.3

7.9

Rubber Products

20.7

3.0

11.7

(0.3)

3.4

Wood Products

(5.1)

8.7

(2.7)

5.1

7.1

Textiles & Apparel

13.2

(7.1)

(2.6)

11.5

7.2

Domestic-oriented Industries

10.7

1.7

6.8

9.4

3.3

Food, Beverages & Tobacco

4.80

2.70

3.60

6.13

8.90

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

3.6

Non-metallic Mineral

12.1

2.9

(2.0)

5.4

7.2

Transport Equipment

12.0

3.4

13.8

22.9

7.6

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

46444 : Wholesale of jewellery

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 2008, the Subject is a Private Limited company, focusing on wholesale of diamond and jewellery. 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 1,000,000 allows the Subject to expand its business more comfortably. However, the Subject does not have strong shareholders’ backing. Without a strong shareholders' backing, the opportunity of the Subject to expand its business is limited.

Over the years, the Subject has penetrated into both the local and overseas market. The Subject has positioned itself in the global market and is competing in the industry. Its stable clientele base will enable the Subject to further enhance its business in the near term. Being a small company, the Subject's business operation is supported by only 3 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. Being a zero geared company, the Subject virtually has no financial risk as it is mainly dependent on its internal funds to finance its business. The Subject's unfavourable financial performance over the years has wiped out its shareholders' funds to a deficit of MYR -179,295. 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.

The poor payment habit may affect the goodwill between the Subject and its suppliers and the Subject may inadvertently have to pay more for its future supplies.

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)

DAMAS (M) SDN. BHD.

 

Financial Year End

2014-03-31

2013-03-31

2012-03-31

2011-03-31

2010-03-31

Months

12

12

12

12

12

Consolidated Account

Company

Company

Company

Company

Company

Audited Account

YES

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

YES

Financial Type

FULL

FULL

SUMMARY

SUMMARY

SUMMARY

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

11,059,986

11,806,947

12,593,239

12,617,899

4,176,471

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

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

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

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

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

Total Turnover

11,059,986

11,806,947

12,593,239

12,617,899

4,176,471

Costs of Goods Sold

(9,856,267)

(11,157,814)

-

-

-

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

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

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

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

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

Gross Profit

1,203,719

649,133

-

-

-

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

(1,414,110)

(26,207)

117,715

160,388

88,228

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

(1,414,110)

(26,207)

117,715

160,388

88,228

Taxation

(10,554)

(62,838)

(27,501)

(32,794)

(19,004)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

(1,424,664)

(89,045)

90,214

127,594

69,224

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

245,369

334,414

244,200

116,606

47,382

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

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

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

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

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

As restated

245,369

334,414

244,200

116,606

47,382

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

(1,179,295)

245,369

334,414

244,200

116,606

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

(1,179,295)

245,369

334,414

244,200

116,606

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

DEPRECIATION (as per notes to P&L)

11,953

10,171

-

-

-

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

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

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

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

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

11,953

10,171

-

-

-

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

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

 

 

BALANCE SHEET

 

 

DAMAS (M) SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

26,843

29,886

40,057

7,241

5,693

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

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

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

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

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

TOTAL LONG TERM ASSETS

26,843

29,886

40,057

7,241

5,693

Stocks

32,371,304

32,607,398

-

-

-

Trade debtors

666,513

627,783

-

-

-

Other debtors, deposits & prepayments

81,792

100,645

-

-

-

Cash & bank balances

388,970

425,470

-

-

-

Others

14,525

-

-

-

-

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

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

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

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

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

TOTAL CURRENT ASSETS

33,523,104

33,761,296

11,131,967

11,407,848

12,943,141

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

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

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

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

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

TOTAL ASSET

33,549,947

33,791,182

11,172,024

11,415,089

12,948,834

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

33,676,188

32,340,380

-

-

-

Other creditors & accruals

52,523

143,430

-

-

-

Amounts owing to director

-

15,819

-

-

-

Provision for taxation

-

45,653

-

-

-

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

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

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

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

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

TOTAL CURRENT LIABILITIES

33,728,711

32,545,282

9,835,610

10,170,889

11,832,228

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

(205,607)

1,216,014

1,296,357

1,236,959

1,110,913

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

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

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

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

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

TOTAL NET ASSETS

(178,764)

1,245,900

1,336,414

1,244,200

1,116,606

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

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

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

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

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

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

TOTAL SHARE CAPITAL

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

Retained profit/(loss) carried forward

(1,179,295)

245,369

334,414

244,200

116,606

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

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

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

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

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

TOTAL RESERVES

(1,179,295)

245,369

334,414

244,200

116,606

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

(179,295)

1,245,369

1,334,414

1,244,200

1,116,606

Deferred taxation

531

531

-

-

-

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

531

531

2,000

-

-

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

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

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

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

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

(178,764)

1,245,900

1,336,414

1,244,200

1,116,606

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

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

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

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

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

 

 

FINANCIAL RATIO

 

 

DAMAS (M) SDN. BHD.

 

TYPES OF FUNDS

Cash

388,970

425,470

-

-

-

Net Liquid Funds

388,970

425,470

-

-

-

Net Liquid Assets

(32,576,911)

(31,391,384)

1,296,357

1,236,959

1,110,913

Net Current Assets/(Liabilities)

(205,607)

1,216,014

1,296,357

1,236,959

1,110,913

Net Tangible Assets

(178,764)

1,245,900

1,336,414

1,244,200

1,116,606

Net Monetary Assets

(32,577,442)

(31,391,915)

1,294,357

1,236,959

1,110,913

PROFIT & LOSS ITEMS

Earnings Before Interest & Tax (EBIT)

(1,414,110)

(26,207)

-

-

-

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

(1,402,157)

(16,036)

-

-

-

BALANCE SHEET ITEMS

Total Borrowings

0

0

-

-

-

Total Liabilities

33,729,242

32,545,813

9,837,610

10,170,889

11,832,228

Total Assets

33,549,947

33,791,182

11,172,024

11,415,089

12,948,834

Net Assets

(178,764)

1,245,900

1,336,414

1,244,200

1,116,606

Net Assets Backing

(179,295)

1,245,369

1,334,414

1,244,200

1,116,606

Shareholders' Funds

(179,295)

1,245,369

1,334,414

1,244,200

1,116,606

Total Share Capital

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

Total Reserves

(1,179,295)

245,369

334,414

244,200

116,606

LIQUIDITY (Times)

Cash Ratio

0.01

0.01

-

-

-

Liquid Ratio

0.03

0.04

-

-

-

Current Ratio

0.99

1.04

1.13

1.12

1.09

WORKING CAPITAL CONTROL (Days)

Stock Ratio

1,068

1,008

-

-

-

Debtors Ratio

22

19

-

-

-

Creditors Ratio

1,247

1,058

-

-

-

SOLVENCY RATIOS (Times)

Gearing Ratio

0

0

-

-

-

Liabilities Ratio

(188.12)

26.13

7.37

8.17

10.60

Times Interest Earned Ratio

0

0

-

-

-

Assets Backing Ratio

(0.18)

1.25

1.34

1.24

1.12

PERFORMANCE RATIO (%)

Operating Profit Margin

(12.79)

(0.22)

0.93

1.27

2.11

Net Profit Margin

(12.88)

(0.75)

0.72

1.01

1.66

Return On Net Assets

791.05

(2.10)

8.81

12.89

7.90

Return On Capital Employed

791.05

(2.10)

8.81

12.89

7.90

Return On Shareholders' Funds/Equity

794.59

(7.15)

6.76

10.26

6.20

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.66.75

UK Pound

1

Rs.100.29

Euro

1

Rs.72.89

MYR

1

Rs.15.68

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

 

INFORMATION DETAILS

 

Analysis Done by :

KAS

 

 

Report Prepared by :

SDA

 

 

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.