MIRA INFORM REPORT

 

 

Report No. :

356156

Report Date :

23.12.2015

 

IDENTIFICATION DETAILS

 

Name :

MFE FORMWORK TECHNOLOGY SDN. BHD.

 

 

Formerly Known As :

MIVAN FAR EAST SDN BHD

SPIRE FAR EAST SDN BHD

 

 

Registered Office :

Lot 824, Komplek Sun, Jalan Bukit Bintang, 8th Floor, 55100 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2014

 

 

Date of Incorporation :

05.09.1990

 

 

Com. Reg. No.:

203754-U

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Manufacturing of formwork system for civil engineering construction.

 

 

No. of Employee :

600 [2015]

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

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.

:

203754-U

COMPANY NAME

:

MFE FORMWORK TECHNOLOGY SDN. BHD.

FORMER NAME

:

MIVAN FAR EAST SDN BHD (03/12/2007)
SPIRE FAR EAST SDN BHD (12/03/1992)

INCORPORATION DATE

:

05/09/1990

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

LOT 824, KOMPLEK SUN, JALAN BUKIT BINTANG, 8TH FLOOR, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

LOT 4 & 6, JALAN TUN PERAK 3, PERDANA INDUSTRIAL PARK, 42000 PELABUHAN KLANG, SELANGOR, MALAYSIA.

TEL.NO.

:

03-33753000

FAX.NO.

:

03-33753198

EMAIL

:

JIMR@MFEFORMWORK.COM

WEB SITE

:

WWW.MFEFORMWORK.COM

CONTACT PERSON

:

JAMES ROBINSON ( MANAGING DIRECTOR )

INDUSTRY CODE

:

25111

PRINCIPAL ACTIVITY

:

MANUFACTURING OF FORMWORK SYSTEM FOR CIVIL ENGINEERING CONSTRUCTION

AUTHORISED CAPITAL

:

MYR 11,000,000.00 DIVIDED INTO
ORDINARY SHARE 10,000,000.00 OF MYR 1.00 EACH.
PREFERENCE 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 256,537,978 [2014]

NET WORTH

:

MYR 34,626,964 [2014]

STAFF STRENGTH

:

600 [2015]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

STABLE

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

HIGH

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

MARGINAL GROWTH

 

 

HISTORY / BACKGROUND

 

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

The Subject is principally engaged in the (as a / as an) manufacturing of formwork system for civil engineering construction.

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

 

The immediate holding company of the Subject is MFE HOLDING LIMITED, a company incorporated in VIRGIN ISLANDS, BRITISH.

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

30/06/2015

MYR 11,000,000.00

MYR 1,000,000.00

30/01/1991

MYR 10,000,000.00

MYR 1,000,000.00

06/09/1990

MYR 10,000,000.00

MYR 2.00

 

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


Current Shareholder(s) :

Name

Address

IC/PP/Loc No

Shareholding

(%)

MFE HOLDING LIMITED

171, MAIN STREET, ROAD TOWN, TORTOLA VG1110 VIRGIN ISLANDS, BRITISH

1707479

1,000,000.00

100.00

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

------

1,000,000.00

100.00

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

=====

+ Also Director


Former Shareholder(s) :

Name

Country

IC/PP/Loc No

Shareholding

Last Updated

MFE SYSTEM FORMWORK TECHNOLOGY LIMITED

N/A

XLZ00215698

1,000,000.00

23/04/2014

MIVAN FAR EAST (UK) LIMITED

N/A

XLZ00212356

1,000,000.00

04/10/2010

MIVAN LIMITED

N/A

XLZ000100012

1,000,000.00

09/07/2008



DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

DEREK ROY CRANE

Address

:

HOUSE 1, THE MANGROVE, NAM WAI VILLAGE, 348 NAM WAI ROAD, SAI KUNG HONG KONG, HONG KONG.

IC / PP No

:

518002737

Nationality

:

BRITISH

Date of Appointment

:

12/12/2014

 

DIRECTOR 2

 

Name Of Subject

:

MR. ANSHUMANN WOODHULL

Address

:

FT52, 24/F, BLOK C, REPULSE BAY APARTMENT, 101 REPULSE BAY ROAD, REPULSE BAY, HONG KONG, HONG KONG.

Other Address(es)

:

FLAT C52, 101 REPULSE BAY, ROAD, HONGKONG

New IC No

:

681207-10-6037

Date of Birth

:

07/12/1968

Nationality

:

MALAYSIAN

Date of Appointment

:

12/12/2014

 

DIRECTOR 3

 

Name Of Subject

:

PATRICK GERARD GORHAM

Address

:

B36-1, SENI MONT KIARA, NO.2A, CHANGKAT DUTA, KIARA, MONT KIARA, 50480 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

Other Address(es)

:

B27-2, KIARAMAS SUTERA CONDOMINIUM, NO. 7, JALAN DESA KIARA, BUKIT KIARA, 50480 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

PV7765418

Nationality

:

IRISH

Date of Appointment

:

09/06/2010

 

DIRECTOR 4

 

Name Of Subject

:

JASON ALEKSANDER KARDACHI

Address

:

162, WATTEN ESTATE, ROAD, SINGAPORE 287611, SINGAPORE.

IC / PP No

:

E4035148

Nationality

:

AUSTRALIAN

Date of Appointment

:

23/08/2011

 

DIRECTOR 5

 

Name Of Subject

:

JAMES ROBINSON

Address

:

A-19-5, MONT KIARA AMAN, 4, JALAN KIARA 2, MONT KIARA, 50480 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

761327682

Nationality

:

BRITISH

Date of Appointment

:

28/09/2009

 

DIRECTOR 6

 

Name Of Subject

:

MATHEW WILLIAM MORAHAN

Address

:

14, BROMBOROUGH ROAD, ROSEVILLE, SYDNEY, NSW 2069, AUSTRALIA.

IC / PP No

:

PS1498854

Nationality

:

IRISH

Date of Appointment

:

16/03/2015



MANAGEMENT

 

 

 

1)

Name of Subject

:

JAMES ROBINSON

Position

:

MANAGING DIRECTOR

 

2)

Name of Subject

:

PUAH

Position

:

FINANCE MANAGER

 

3)

Name of Subject

:

ELAINE LAI

Position

:

HUMAN RESOURCE MANAGER

 

4)

Name of Subject

:

JAMES TEO

Position

:

OPERATIONS MANAGER

 

 

 

AUDITOR

 

Auditor

:

KPMG

Auditor' Address

:

KPMG TOWER 8, FIRST AVENUE, BANDAR UTAMA, 47800 PETALING JAYA, SELANGOR, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. TAN BENG HOCK

IC / PP No

:

4086144

New IC No

:

361028-07-5295

Address

:

162, JALAN SS 2/4, 47300 PETALING JAYA, SELANGOR, MALAYSIA.

 

2)

Company Secretary

:

MS. LAI SOOK HEAN

IC / PP No

:

A1854741

New IC No

:

710503-08-6122

Address

:

164, JELAPANG N/V, 30020 IPOH, PERAK, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

29/10/1992

N/A

PUBLIC INVESTMENT BANK BERHAD

-

Satisfied

2

04/11/1992

N/A

THE PACIFIC BANK BHD

-

Satisfied

3

26/12/1992

N/A

THE PACIFIC BANK BHD

MYR 1,000,000.00

Satisfied

4

16/06/1993

N/A

THE PACIFIC BANK BERHAD

MYR 1,000,000.00

Satisfied

5

07/07/1995

N/A

NATIONAL AUSTRALIA MERCHANT BANK SINGAPORELTD

-

Satisfied

6

06/07/1999

N/A

MALAYAN BANKING BERHAD

MYR 1,200,000.00

Satisfied

7

01/11/2007

DEBENTURE

ABN AMRO BANK N.V. LABUAN BRANCH

MYR 5,000,000.00

Satisfied

8

08/06/2012

DEBENTURE

THE ROYAL BANK OF SCOTLAND BERHAD

MYR 8,300,000.00

Unsatisfied

9

08/06/2012

DEBENTURE

THE ROYAL BANK OF SCOTLAND, PLC, LABUAN BRANCH

USD 5,000,000.00

Unsatisfied

10

08/06/2012

DEBENTURE

PATRICK GERARD GORHAM (PASSPORT NO. LT0009566)

USD 300,000.00

Unsatisfied

11

25/11/2014

DEBENTURE

VENTURE OPPORTUNITY (LABUAN) LIMITED

-

Unsatisfied

 

 

LITIGATION CHECK AGAINST SUBJECT


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

No legal action was found in our databank.

No winding up petition was found in our databank.

 

DEFAULTER CHECK AGAINST SUBJECT


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

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

 

PAYMENT RECORD

 

 

SOURCES OF RAW MATERIALS:

 

Local

:

YES

Percentage

:

20%

Overseas

:

YES

Percentage

:

80%

Import Countries

:

EUROPE,ASIA



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

:

30%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

70%

Export Market

:

ASIA

MIDDLE EAST

Credit Term

:

N/A

Payment Mode

:

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

 

OPERATIONS

 

Products manufactured

:

FORMWORK SYSTEM FOR CIVIL ENGINEERING CONSTRUCTION

Ownership of premises

:

OWNED

 

Total Number of Employees:

 

YEAR

2015

2014

2013

2012

2011

GROUP

N/A

N/A

N/A

N/A

N/A

COMPANY

600

600

600

650

650

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) manufacturing of formwork system for civil engineering construction.

The Subject is a revolutionary aluminium formwork construction system.

The Subject has many experiences for forming cast in place reinforced concrete building structures. Using this unique system, all walls, floor slabs, columns, beams, stairs, balconies, together with door and window openings are cast in place in a single site based operation.

There are four main elements in the Subject's business, which are design, manufacturing, technical support and safety and environment.

The combination of bespoke software and the experience of the designers, the Subject guarantees the most efficient construction process, incorporating the optimum assembly procedures, economical panel selection and ultimately minimizing capital and operational costs.


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

0333753000

Current Telephone Number

:

03-33753000

Match

:

YES

Address Provided by Client

:

LOT 4 & 6,JALAN TUN PERAK 3,PERDANA INDUSTRIAL PARK,42000,PELABUHAN KLANG,SELANGOR.

Current Address

:

LOT 4 & 6, JALAN TUN PERAK 3, PERDANA INDUSTRIAL PARK, 42000 PELABUHAN KLANG, SELANGOR, MALAYSIA.

Match

:

YES

Latest Financial Accounts

:

YES

 

Other Investigations


On 21st December 2015, we contacted one of the staff from the Subject and he provided some information.



FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Increased

[

2010 - 2014

]

Profit/(Loss) Before Tax

:

Increased

[

2010 - 2014

]

Return on Shareholder Funds

:

Favourable

[

89.31%

]

Return on Net Assets

:

Favourable

[

44.65%

]

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. Generally the Subject was profitable. The favourable return on shareholders' funds and return on net assets indicate that the Subject's management was efficient in utilising the assets to generate returns.

Working Capital Control

Stock Ratio

:

Acceptable

[

63 Days

]

Debtor Ratio

:

Unfavourable

[

82 Days

]

Creditors Ratio

:

Favourable

[

51 Days

]

The Subject kept adequate stocks to meet its normal business transactions without incurring excessive storage costs. The high debtors' ratio could indicate that the Subject was weak in its credit control. However, the Subject could also giving longer credit periods to its customers in order to boost its sales or to capture / retain its market share. The Subject had a favourable creditors' ratio where the Subject could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

Liquidity

Liquid Ratio

:

Favourable

[

1.46 Times

]

Current Ratio

:

Favourable

[

2.13 Times

]

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

Solvency

Interest Cover

:

Favourable

[

16.95 Times

]

Gearing Ratio

:

Unfavourable

[

1.85 Times

]

The interest cover showed that the Subject was able to service the interest. The favourable interest cover could indicate that the Subject was making enough profit to pay for the interest accrued. 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 was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the Subject should be able to repay its short term obligations. With the favourable interest cover, the Subject could be able to service all the accrued interest without facing any difficulties. 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 : STABLE

 

 

 

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

49,203

-

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

25111 : Manufacture of industrial frameworks in metal

INDUSTRY :

MANUFACTURING

The manufacturing sector is expected to grow by 4.3% in 2015. Export-oriented industries are expected to benefit from higher demand as a result of improving growth in advanced economies, while domestic-oriented industries will be boosted by resilient domestic economic activities. The resource-based industry is envisaged to grow steadily attributed to improved demand for chemical, petroleum, rubber, wood and plastic products. In addition, strong construction activities following the implementation of infrastructure projects under the 11MP will augur well for growth in iron and steel as well as cement segments.

In first six months of 2015, the sector expanded at a slower pace of 4.9%. Output of the sector moderated to 4.8% while the sales value of manufactured products grew marginally by 0.1% to RM379.9 billion during the first seven months of 2015. Output from export-oriented industries also increased at a slower pace of 5.3% due to weaker global demand. The manufacturing sector continued to attract domestic and foreign investments, with projects approved by the Malaysian Investment Development Authority (MIDA) valued at RM49.5 billion for the first six months of 2015.

Besides that, production of wood and wood products rose by 7.1% largely supported by higher demand for wooden and cane furniture as well as particleboard and fibreboard with output up by 6.5% and 35.4%, respectively. The overall positive performance of the wood products sub-sector was attributed to higher demand from the US, Singapore and Australia. Output of rubber products rebounded to 3.4%, mainly due to higher output of rubber gloves and rubber tires for vehicles. The rubber-based industry stands to benefit from the strengthening US dollar, as most of the input costs are in ringgit while sales are in US dollar.

Exports of manufactured goods decreased by 3% due to the high base effect during the corresponding period in year 2014. Although, a weak ringgit should have bolstered exports, however, softened by weak external demand coupled with the depreciation in regional currencies during the period. During the first eight months of 2015, the slower expansion in E&E exports and weaker earnings from the non-E&E segment weighed down the overall exports of manufactured goods. Receipts from chemicals and chemical products continued to grow, albeit at a slower pace of 5.7%, mainly due to a slack in the demand for organic chemical products (-3.5%) as major markets. However, the overall growth in the sub-sector was supported by higher exports of plastics in primary form.

In addition, export earnings of wood products remained high at RM9.8 billion during the first eight months of 2015, it supported by strong demand for wooden furniture. demand for veneer and plywood, contracted by 7.4% following lower demand mainly from Japan. Exports of textile, clothing and footwear grew at a slower pace of 6.8% mainly due to a contraction in the exports of the textile segment, particularly textile yarns and woven fabrics. During the first eight months of 2015, the total registered foreign workers in the country increased to 2.2 million. The employment of foreign workers was largely concentrated in the manufacturing sectors. Under the 11MP, the Government will improve the management of foreign workers through the establishment of an improved framework to take into consideration the relevant laws, rules, regulations, national policies and directives relating to recruitment, employment and repatriation of workers.

Under budget 2015, the Government will provide a new incentive that is, Special Reinvestment Allowance to promote reinvestment among existing companies in the manufacturing sectors. The rate of claim is at 60% of the qualifying capital expenditure and is allowed to be set off against 70% of statutory income from year of assessment 2016 to 2018.

OVERALL INDUSTRY OUTLOOK : Marginal Growth



CREDIT RISK EVALUATION & RECOMMENDATION

 


Incorporated in 1990, the Subject is a Private Limited company, focusing on manufacturing of formwork system for civil engineering construction. The Subject has been in business for over two decades. It has built up a strong clientele base and satisfactory reputation will enable the Subject to further enhance its business in the near term. The Subject is expected to enjoy a stable market shares. A paid up capital of MYR 1,000,000 allows the Subject to expand its business more comfortably. We considered that the Subject's business position in the market is much dependent on the efforts of its directors.

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 large entity, the Subject has a steady workforce of 600 personnel to support its business operations. Its future prospects seem to be fairly good as its business operations are running relatively stable. 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. Based on the higher profitability, the Subject has generated a favourable return based on its existing shareholders' funds which indicated that the management was efficient in utilising its funds to generate income. The Subject is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. The 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 34,626,964, 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 has reached its maturity stage and only enjoying a marginal growth. The steady growth of the country's economy will further enhance the industry activities. Thus, the Subject's future performance is very much depend on its marketing strategies in order to retain its position in the market.

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

 



PROFIT AND LOSS ACCOUNT

 

 

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

 

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

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

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

256,537,978

216,515,208

144,850,455

203,474,081

166,066,246

Other Income

-

-

-

-

4,009,906

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

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

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

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

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

Total Turnover

256,537,978

216,515,208

144,850,455

203,474,081

170,076,152

Costs of Goods Sold

(190,974,322)

(162,137,717)

(116,465,122)

(174,690,585)

(138,688,192)

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

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

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

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

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

Gross Profit

65,563,656

54,377,491

28,385,333

28,783,496

31,387,960

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

36,275,133

26,832,049

9,574,339

13,685,200

8,336,760

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

36,275,133

26,832,049

9,574,339

13,685,200

8,336,760

Taxation

(5,351,359)

(6,871,616)

(2,037,389)

(1,467,786)

(2,969,747)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

30,923,774

19,960,433

7,536,950

12,217,414

5,367,013

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

31,432,107

17,992,974

27,552,037

16,659,436

14,493,811

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

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

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

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

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

As restated

31,432,107

17,992,974

27,552,037

16,659,436

14,493,811

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

62,355,881

37,953,407

35,088,987

28,876,850

19,860,824

DIVIDENDS - Ordinary (paid & proposed)

(29,728,917)

(6,521,300)

(17,096,013)

(1,324,813)

(3,201,388)

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

32,626,964

31,432,107

17,992,974

27,552,037

16,659,436

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Bank overdraft

-

-

171,705

299,049

686,865

Hire purchase

-

-

9,104

4,238

8,786

Lease interest

110,546

61,449

-

-

-

Revolving loans

328,350

433,134

141,103

-

-

Term loan / Borrowing

1,671,724

918,252

375,132

-

-

Others

163,761

58,685

170,535

74,790

205,775

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

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

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

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

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

2,274,381

1,471,520

867,579

378,077

901,426

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

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

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

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

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

DEPRECIATION (as per notes to P&L)

4,368,950

6,959,350

3,874,373

5,117,590

1,535,408

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

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

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

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

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

4,368,950

6,959,350

3,874,373

5,117,590

1,535,408

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

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

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

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

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

 

 

 

BALANCE SHEET

 

 

 

ASSETS EMPLOYED:

FIXED ASSETS

10,449,061

13,999,103

12,040,004

8,053,641

9,180,149

Investments

7,670

7,670

7,670

7,670

7,670

Deferred assets

1,801,207

1,801,207

-

-

-

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

1,808,877

1,808,877

7,670

7,670

7,670

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

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

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

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

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

TOTAL LONG TERM ASSETS

12,257,938

15,807,980

12,047,674

8,061,311

9,187,819

Stocks

43,934,266

24,824,897

19,403,505

21,087,528

18,562,350

Trade debtors

57,443,689

61,367,283

45,396,111

42,616,219

34,591,513

Other debtors, deposits & prepayments

16,171,146

7,956,489

2,565,395

3,418,518

2,401,481

Amount due from holding company

12,256,611

8,177,194

2,940,686

-

-

Amount due from related companies

8,966

5,998

-

-

120,299

Cash & bank balances

9,612,446

10,018,045

785,535

426,924

6,596,188

Others

-

-

4,448,509

5,185,981

4,458,304

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

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

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

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

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

TOTAL CURRENT ASSETS

139,427,124

112,349,906

75,539,741

72,735,170

66,730,135

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

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

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

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

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

TOTAL ASSET

151,685,062

128,157,886

87,587,415

80,796,481

75,917,954

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

26,597,310

42,054,143

24,904,139

29,460,910

33,990,168

Other creditors & accruals

16,879,281

14,858,070

14,965,560

11,466,706

8,532,873

Hire purchase & lease creditors

1,029,433

953,198

563,507

27,010

34,198

Bank overdraft

-

-

-

4,456,059

4,265,600

Short term borrowings/Term loans

11,153,130

14,450,040

-

-

-

Other borrowings

-

12,982,059

11,326,938

5,204,014

9,025,393

Amounts owing to holding company

6,993,600

3,264,900

-

86,158

69,725

Amounts owing to related companies

926,153

1,027,986

531,636

238,948

198,943

Amounts owing to director

-

985,230

897,210

-

-

Provision for taxation

1,766,255

4,043,910

-

-

-

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

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

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

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

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

TOTAL CURRENT LIABILITIES

65,345,162

94,619,536

53,188,990

50,939,805

56,116,900

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

74,081,962

17,730,370

22,350,751

21,795,365

10,613,235

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

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

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

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

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

TOTAL NET ASSETS

86,339,900

33,538,350

34,398,425

29,856,676

19,801,054

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

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

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

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

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

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

32,626,964

31,432,107

17,992,974

27,552,037

16,659,436

Capital redemption reserve

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

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

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

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

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

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

TOTAL RESERVES

33,626,964

32,432,107

18,992,974

28,552,037

17,659,436

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

34,626,964

33,432,107

19,992,974

29,552,037

18,659,436

Long term loans

51,509,213

-

13,159,080

-

-

Lease obligations

203,723

106,243

-

-

-

Hire purchase creditors

-

-

574,870

60,734

87,737

Deferred taxation

-

-

671,501

243,905

1,053,881

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

51,712,936

106,243

14,405,451

304,639

1,141,618

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

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

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

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

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

86,339,900

33,538,350

34,398,425

29,856,676

19,801,054

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

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

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

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

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

 

 


FINANCIAL RATIO

 

 

 

TYPES OF FUNDS

Cash

9,612,446

10,018,045

785,535

426,924

6,596,188

Net Liquid Funds

9,612,446

10,018,045

785,535

(4,029,135)

2,330,588

Net Liquid Assets

30,147,696

(7,094,527)

2,947,246

707,837

(7,949,115)

Net Current Assets/(Liabilities)

74,081,962

17,730,370

22,350,751

21,795,365

10,613,235

Net Tangible Assets

86,339,900

33,538,350

34,398,425

29,856,676

19,801,054

Net Monetary Assets

(21,565,240)

(7,200,770)

(11,458,205)

403,198

(9,090,733)

PROFIT & LOSS ITEMS

Earnings Before Interest & Tax (EBIT)

38,549,514

28,303,569

10,441,918

14,063,277

9,238,186

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

42,918,464

35,262,919

14,316,291

19,180,867

10,773,594

BALANCE SHEET ITEMS

Total Borrowings

64,223,849

28,924,674

25,765,498

9,747,817

13,412,928

Total Liabilities

117,058,098

94,725,779

67,594,441

51,244,444

57,258,518

Total Assets

151,685,062

128,157,886

87,587,415

80,796,481

75,917,954

Net Assets

86,339,900

33,538,350

34,398,425

29,856,676

19,801,054

Net Assets Backing

34,626,964

33,432,107

19,992,974

29,552,037

18,659,436

Shareholders' Funds

34,626,964

33,432,107

19,992,974

29,552,037

18,659,436

Total Share Capital

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

Total Reserves

33,626,964

32,432,107

18,992,974

28,552,037

17,659,436

LIQUIDITY (Times)

Cash Ratio

0.15

0.11

0.01

0.01

0.12

Liquid Ratio

1.46

0.93

1.06

1.01

0.86

Current Ratio

2.13

1.19

1.42

1.43

1.19

WORKING CAPITAL CONTROL (Days)

Stock Ratio

63

42

49

38

41

Debtors Ratio

82

103

114

76

76

Creditors Ratio

51

95

78

62

89

SOLVENCY RATIOS (Times)

Gearing Ratio

1.85

0.87

1.29

0.33

0.72

Liabilities Ratio

3.38

2.83

3.38

1.73

3.07

Times Interest Earned Ratio

16.95

19.23

12.04

37.20

10.25

Assets Backing Ratio

86.34

33.54

34.40

29.86

19.80

PERFORMANCE RATIO (%)

Operating Profit Margin

14.14

12.39

6.61

6.73

5.02

Net Profit Margin

12.05

9.22

5.20

6.00

3.23

Return On Net Assets

44.65

84.39

30.36

47.10

46.66

Return On Capital Employed

43.96

81.04

29.75

40.95

38.33

Return On Shareholders' Funds/Equity

89.31

59.70

37.70

41.34

28.76

Dividend Pay Out Ratio (Times)

0.96

0.33

2.27

0.11

0.60

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

0

0

0




 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.66.30

UK Pound

1

Rs.98.71

Euro

1

Rs.72.33

MYR

1

Rs.15.35

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

 

 

INFORMATION DETAILS

 

Analysis Done by :

KAR

 

 

Report Prepared by :

ANK

 


 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

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

 

Unlimited

71-85

Aa

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

 

Large

56-70

A

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

 

Fairly Large

41-55

Ba

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

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

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

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

--

NB

                                       New Business

 

--

 

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

 

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

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

 

 

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

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