MIRA INFORM REPORT

 

 

Report No. :

305844

Report Date :

05.02.2015

 

IDENTIFICATION DETAILS

 

Name :

HANIFFA SDN. BHD.

 

 

Registered Office :

Wisma Haniffa, 149, Jalan Masjid India, 50100 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2013

 

 

Date of Incorporation :

29.12.1976

 

 

Com. Reg. No.:

30840-D

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Subject is trading of textiles & running of departmental stores.

 

 

No. of Employee :

170 [2015]

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

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

Satisfactory

 

Status :

Satisfactory

 

 

Payment Behaviour :

No complaints

 

 

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 – December 31, 2014

 

Country Name

Previous Rating

(30.09.2014)

Current Rating

(31.12.2014)

Malaysia

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

MALAYSIA - ECONOMIC OVERVIEW

 

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. The NAJIB administration also is continuing efforts to boost domestic demand and reduce the economy's dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver of the economy. As an oil and gas exporter, Malaysia has 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. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplies about 32% of government revenue in 2013. Bank Negara Malaysia (central bank) maintains healthy foreign exchange reserves, and a well-developed regulatory regime has limited Malaysia's exposure to riskier financial instruments and the global financial crisis. Nevertheless, Malaysia could be vulnerable to a fall in commodity prices or a general slowdown in global economic activity because exports are a major component of GDP. In order to attract increased investment, NAJIB earlier raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but retreated in 2013 after he encountered significant opposition from Malay nationalists and other vested interests. In September 2013 NAJIB launched the new Bumiputra Economic Empowerment Program (BEEP), policies that favor and advance the economic condition of ethnic Malays.

 

Source : CIA

 

 

 

 

 

 

EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

30840-D

COMPANY NAME

:

HANIFFA SDN. BHD.

FORMER NAME

:

HANIFFA TEXTILES SDN BHD (21/05/2007)

INCORPORATION DATE

:

29/12/1976

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

WISMA HANIFFA, 149, JALAN MASJID INDIA, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

WISMA HANIFFA, 149 JALAN MASJID INDIA, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

TEL.NO.

:

03-26938620

FAX.NO.

:

03-26912909

EMAIL

:

ADMIN@HANIFFA.COM

CONTACT PERSON

:

O K MOHAMED HANIFFA ( MANAGING DIRECTOR )

INDUSTRY CODE

:

47192

PRINCIPAL ACTIVITY

:

TRADING OF TEXTILES & RUNNING OF DEPARTMENTAL STORES

AUTHORISED CAPITAL

:

MYR 50,000,000.00 DIVIDED INTO
ORDINARY SHARE 5,000,000.00 OF MYR 10.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 30,000,000.00 DIVIDED INTO
ORDINARY SHARES 860,100 CASH AND 2,139,900 OTHERWISE OF MYR 10.00 EACH.

SALES

:

MYR 262,855,617 [2013]

NET WORTH

:

MYR 49,062,720 [2013]

STAFF STRENGTH

:

170 [2015]

BANKER (S)

:

CIMB BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

PAYMENT

:

GOOD

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

MODERATE

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

GOOD

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

 

HISTORY / BACKGROUND

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

The Subject is principally engaged in the (as a / as an) trading of textiles & running of departmental stores.

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

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

16/06/2014

MYR 50,000,000.00

MYR 30,000,000.00

08/12/2009

MYR 25,000,000.00

MYR 15,300,000.00

17/12/2002

MYR 25,000,000.00

MYR 12,000,000.00

28/10/1999

MYR 10,000,000.00

MYR 10,000,000.00

20/10/1995

MYR 5,000,000.00

MYR 5,000,000.00

 

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

 

Name

Address

IC/PP/Loc No

Shareholding

(%)

ABDUL SAMAD O. K. MOHAMED HANIFFA +

118, KENG LEE ROAD, 308404, MALAYSIA.

S7712397J

1,893,292.00

63.11

MS. RAZINAH BEGUM BINTI O. K. MOHAMED HANIFFA +

149, JALAN MASJID INDIA, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

850130-66-5168 S8501955D

909,688.00

30.32

SITI ZUBAIDAH HANIFFA +

118, KENG LEE ROAD, 308404, SINGAPORE.

1077315F

98,510.00

3.28

LUHU FARDHIBA BINTI R A ABU BACKER

118, KENG LEE ROAD, 308404, SINGAPORE.

S8072976F

98,510.00

3.28

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

------

3,000,000.00

100.00

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

=====

+ Also Director




DIRECTORS



DIRECTOR 1

 

Name Of Subject

:

MR. O. K. MOHAMED HANIFFA @ MOHAMED HANIFFA

Address

:

149, JALAN MASJID INDIA, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

New IC No

:

400701-75-5055

Date of Birth

:

01/07/1940

Nationality

:

MALAYSIAN

Date of Appointment

:

29/12/1976

 

DIRECTOR 2

 

Name Of Subject

:

SITI ZUBAIDAH HANIFFA

Address

:

118, KENG LEE ROAD, 308404, SINGAPORE.

IC / PP No

:

1077315F

Nationality

:

SINGAPOREAN

Date of Appointment

:

29/12/1976

 

DIRECTOR 3

 

Name Of Subject

:

MS. RAZINAH BEGUM BINTI O. K. MOHAMED HANIFFA

Address

:

149, JALAN MASJID INDIA, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

S8501955D

New IC No

:

850130-66-5168

Date of Birth

:

30/01/1985

Nationality

:

MALAYSIAN

Date of Appointment

:

27/06/2005

 

DIRECTOR 4

 

Name Of Subject

:

ABDUL SAMAD O. K. MOHAMED HANIFFA

Address

:

118, KENG LEE ROAD, 308404, MALAYSIA.

IC / PP No

:

S7712397J

Nationality

:

SINGAPOREAN

Date of Appointment

:

17/01/1976

 

MANAGEMENT

 

 

 

1)

Name of Subject

:

O K MOHAMED HANIFFA

Position

:

MANAGING DIRECTOR

 

 

 

AUDITOR

 

Auditor

:

AHAMAD NAINA MYDIN & ASSOCIATES

Auditor' Address

:

LOT 1, 14, JALAN KEMUJA BANGSAR UTAMA, LEVEL 1, 59100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

COMPANY SECRETARIES

 

 

1)

Company Secretary

:

MS. SURINA JENNY BINTI ABDULLAH

IC / PP No

:

5648847

New IC No

:

590403-10-6700

Address

:

LOT 3-306, CEMPAKA APARTMENT, JALAN 3/9, BANDAR BARU SELAYANG, 68100 BATU CAVES, SELANGOR, MALAYSIA.

 

 

BANKING

 


Banking relations are maintained principally with

 

1)

Name

:

CIMB BANK BHD

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

27/12/1978

LETTER OF HYPOTHECATION

UNITED ASIAN BANK BHD

MYR 335,000.00

Unsatisfied

2

27/12/1978

DEBENTURE & LETTER OF HYPOTHECATION

UNITED ASIAN BANK BERHAD

MYR 165,000.00

Unsatisfied

3

01/12/1982

DEBENTURE

UNITED ASIAN BANK BERHAD

MYR 755,000.00

Unsatisfied

3U1

01/12/1982

SUPPLEMENTAL DEBENTURE

UNITED ASIAN BANK BERHAD

MYR 430,000.00

Unsatisfied

4

03/03/1987

DEED OF ASSIGNMENT OF BOOK DEBTS

UNITED ASIAN BANK BERHAD

MYR 920,000.00

Unsatisfied

5

01/11/2000

N/A

BSN COMMERCIAL BANK MALAYSIA BERHAD

MYR 300,000.00

Satisfied

6

28/01/2003

N/A

BUMIPUTRACOMMERCE BANK BERHAD

MYR 2,850,000.00

Satisfied

7

28/06/2007

FACILITIES AGREEMENT & DEED OF ASSIGNMENT

CIMB BANK BERHAD

MYR 5,000,000.00

Unsatisfied

 

 

LITIGATION CHECK AGAINST SUBJECT

 

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

No legal action was found in our databank.

No winding up petition was found in our databank.

DEFAULTER CHECK AGAINST SUBJECT


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

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

PAYMENT RECORD

 

SOURCES OF RAW MATERIALS:

Local

:

YES

Overseas

:

YES

Import Countries

:

SINGAPORE,TAIWAN,CHINA,JAPAN



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

 

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

X

]

Average 61-90 Days

[

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]

 

 

CLIENTELE

 

Local

:

YES

Percentage

:

100%

Domestic Markets

:

MALAYSIA

Overseas

:

NO

Credit Term

:

30 DAYS

Payment Mode

:

CASH
TELEGRAPHIC TRANSFER (TT)

Type of Customer

:

WALK IN CUSTOMERS,END USERS,DEALERS

 

OPERATIONS

 

Goods Traded

:

TEXTILES

Services

:

DEPARTMENTAL STORE

Product Brand Name

:

PASAR RAYA HANIFFA SDN BHD

Competitor(s)

:

AEON CO. (M) BHD

 

 

TOTAL NUMBER OF EMPLOYEES:

 

YEAR

2015

2014

2012

2011

2010

GROUP

N/A

N/A

N/A

N/A

N/A

COMPANY

170

170

100

80

70

 

Other Information:


The Subject is principally engaged in the (as a / as an) trading of textiles & running of departmental stores.

The Subject has department stores in Klang and Pulau Pinang. The Subject acts as the headquarters.

The Subject's products can be categorized into the followings:

1) Textiles
2) Ready made garments
3) Fabrics
4) Consumer goods

The Subject sells all kinds of fashionable ready made garments for children, men and women.

The Subject's Consumer Goods division consists of watches, cosmetics, electrical goods and others.

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

 

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-26938620

Match

:

N/A

Address Provided by Client

:

WISMA HANIFFA, 149 JALAN MASJID INDIA,50100,KUALA LUMPUR,WILAYAH PERSEKUTUAN.

Current Address

:

WISMA HANIFFA, 149 JALAN MASJID INDIA, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

Match

:

YES

Latest Financial Accounts

:

YES

 

Other Investigations


On 30th January 2015 we contacted one of the staff from the Subject and he provided some information.

FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Increased

[

2009 - 2013

]

Profit/(Loss) Before Tax

:

Increased

[

2009 - 2013

]

Return on Shareholder Funds

:

Acceptable

[

14.84%

]

Return on Net Assets

:

Acceptable

[

21.14%

]

The Subject's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The Subject's management have been efficient in controlling its operating costs. The Subject's management had generated acceptable return for its shareholders using its assets.

Working Capital Control

Stock Ratio

:

Unfavourable

[

67 Days

]

Debtor Ratio

:

Favourable

[

0 Days

]

Creditors Ratio

:

Favourable

[

7 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 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

:

Unfavourable

[

0.77 Times

]

Current Ratio

:

Favourable

[

4.68 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

:

Favourable

[

23.95 Times

]

Gearing Ratio

:

Favourable

[

0.07 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 lowly geared thus it had a low financial risk. The Subject was mainly financed by its shareholders' funds and internally generated funds. In times of economic slowdown / downturn, the Subject being a lowly geared company, will be able to compete better than those companies which are highly geared in the same industry.

Overall Assessment :

Generally, the Subject's performance has improved with higher turnover and profit. 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. With the favourable interest cover, the Subject could be able to service all the accrued interest without facing any difficulties. The Subject as a lowly geared company, will be more secured compared to those highly geared companies. It has the ability to meet all its long term obligations.

Overall financial condition of the Subject : FAIR

 

 

 

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

3.3

4.0

Unemployment Rate

3.3

3.2

3.0

3.0

3.0

Net International Reserves ( MYR Billion )

415

427

-

417

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

3.50

2.20

-

-

-

Average 3 Months of Non-performing Loans ( % )

14.80

14.70

-

-

-

Average Base Lending Rate ( % )

6.60

6.53

6.53

-

-

Business Loans Disbursed( % )

15.3

32.2

-

-

-

Foreign Investment ( MYR Million )

23,546.1

26,230.4

38,238.0

-

-

Consumer Loans ( % )

-

-

-

-

-

Registration of New Companies ( No. )

45,455

45,441

46,321

-

-

Registration of New Companies ( % )

3.0

(0.0)

1.9

-

-

Liquidation of Companies ( No. )

132,485

17,092

26,430

-

-

Liquidation of Companies ( % )

417.8

(87.1)

54.6

-

-

Registration of New Business ( No. )

284,598

324,761

329,895

-

-

Registration of New Business ( % )

5.0

14.0

2.0

-

-

Business Dissolved ( No. )

20,121

20,380

18,161

-

-

Business Dissolved ( % )

1.9

1.3

(10.9)

-

-

Sales of New Passenger Cars (' 000 Unit )

535.1

552.2

576.7

598.4

610.3

Cellular Phone Subscribers ( Million )

35.3

38.5

43.0

43.8

-

Tourist Arrival ( Million Persons )

24.7

25.0

25.7

28.0

-

Hotel Occupancy Rate ( % )

60.6

62.4

62.6

-

-

Credit Cards Spending ( % )

15.6

12.6

-

-

-

Bad Cheque Offenders (No.)

32,627

26,982

28,876

-

-

Individual Bankruptcy ( No.)

19,167

19,575

21,984

-

-

Individual Bankruptcy ( % )

5.8

2.1

12.3

-

-



INDUSTRIES ( % of Growth ):

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)

-

-

-

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

46.5

-

-

-

-

% of Industry Non-performing Loans

0.1

-

-

-

-

Manufacturing #

4.7

4.8

3.4

6.6

5.5

Exported-oriented Industries

4.1

6.5

3.3

5.6

-

Electrical & Electronics

(4.0)

12.7

6.9

13.3

-

Rubber Products

20.7

3.0

11.7

(0.3)

-

Wood Products

(5.1)

8.7

(2.7)

5.1

-

Textiles & Apparel

13.2

(7.1)

(2.6)

11.5

-

Domestic-oriented Industries

10.7

1.7

6.8

9.4

-

Food, Beverages & Tobacco

4.80

2.70

3.60

6.13

6.13

Chemical & Chemical Products

10.0

10.8

5.6

-

-

Plastic Products

3.8

-

-

-

-

Iron & Steel

2.2

(6.6)

5.0

0.1

-

Fabricated Metal Products

21.8

13.8

9.9

2.9

-

Non-metallic Mineral

12.1

2.9

(2.0)

5.4

-

Transport Equipment

12.0

3.4

13.8

22.9

-

Paper & Paper Products

9.5

3.1

1.8

4.7

-

Crude Oil Refineries

9.3

-

-

-

-

Industry Non-Performing Loans ( MYR Million )

6,537.2

-

-

-

-

% of Industry Non-Performing Loans

25.7

-

-

-

-

Construction

4.7

18.6

10.9

12.7

10.7

Industry Non-Performing Loans ( MYR Million )

3,856.9

-

-

-

-

% of Industry Non-Performing Loans

10.2

-

-

-

-

Services

7.1

6.4

5.9

5.9

5.6

Electric, Gas & Water

3.5

4.4

4.2

3.6

3.9

Transport, Storage & Communication

6.50

7.10

7.30

7.50

7.15

Wholesale, Retail, Hotel & Restaurant

5.2

4.7

5.9

6.9

6.5

Finance, Insurance & Real Estate

6.90

9.70

3.70

4.65

4.25

Government Services

12.4

9.4

8.3

6.1

5.6

Other Services

5.1

3.9

5.1

4.8

4.5

Industry Non-Performing Loans ( MYR Million )

6,825.2

-

-

-

-

% of Industry Non-Performing Loans

23.4

-

-

-

-

* Estimate / Preliminary

** Forecast

# Based On Manufacturing Production Index




INDUSTRY ANALYSIS

 

MSIC CODE

 

47192 : Department stores and supermarket

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 1976, the Subject is a Private Limited company, focusing on trading of textiles & running of departmental stores. The Subject has been in business for over two decades. It has built up a strong clientele base and good reputation will enable the Subject to further enhance its business in the near term.  The Subject is expected to enjoy a stable market shares. With a large issued and paid up capital of MYR 30,000,000, the Subject's business has been expanding comfortably over the years. 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 should have build up its clientele base and received supports from its regular customers. Investigation revealed that the Subject's interest lies mostly in the local market. Thus, any adverse changes to the local economy might have a negative impact on the Subject's business performance. The Subject is a fairly large and rapidly growing company with over 170 staff in its operations Overall, we regard that the Subject's management capability is average. This indicates that the Subject has greater potential to improve its business performance and raising income for the Subject.

We noted that both the turnover and profits have increased compared to the previous year. The higher profit could be due to increase in turnover and better control over its operating costs. Return on shareholders' funds of the Subject was at an acceptable range which indicated that the management was efficient in utilising its funds to generate income. 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 lowly geared company, the Subject is exposed to low financial risk as it is mainly dependent on its internal funds to finance its business needs. Given a positive net worth standing at MYR 49,062,720, 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.

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

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

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

 




PROFIT AND LOSS ACCOUNT

 

 

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

 

Financial Year End

2013-12-31

2012-12-31

2011-12-31

2010-12-31

2009-12-31

Months

12

12

12

12

12

Consolidated Account

Company

Company

Company

Company

Company

Audited Account

YES

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

YES

Financial Type

FULL

FULL

FULL

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

262,855,617

222,637,462

200,308,532

178,695,227

135,338,522

Other Income

2,156,335

1,688,015

1,250,980

-

-

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

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

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

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

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

Total Turnover

265,011,952

224,325,477

201,559,512

178,695,227

135,338,522

Costs of Goods Sold

(245,210,521)

(204,284,564)

(182,855,646)

(165,223,844)

(123,889,156)

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

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

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

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

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

Gross Profit

19,801,431

20,040,913

18,703,866

13,471,383

11,449,366

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

9,937,784

9,026,295

9,094,235

6,319,187

4,760,929

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

9,937,784

9,026,295

9,094,235

6,319,187

4,760,929

Taxation

(2,655,064)

(2,465,409)

(2,401,312)

(1,843,463)

(968,923)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

7,282,720

6,560,886

6,692,923

4,475,724

3,792,006

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

29,503,202

22,942,316

16,249,393

11,773,669

11,281,663

Prior year adjustment

(2,202)

-

-

-

-

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

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

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

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

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

As restated

29,501,000

22,942,316

16,249,393

11,773,669

11,281,663

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

36,783,720

29,503,202

22,942,316

16,249,393

15,073,669

TRANSFER TO RESERVES - General

(14,700,000)

-

-

-

-

CAPITALISATION FOR BONUS ISSUES

-

-

-

-

(3,300,000)

DIVIDENDS - Ordinary (paid & proposed)

(3,021,000)

-

-

-

-

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

19,062,720

29,503,202

22,942,316

16,249,393

11,773,669

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Others

432,967

389,664

378,632

332,938

173,168

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

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

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

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

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

432,967

389,664

378,632

332,938

173,168

 

 



BALANCE SHEET

 

 

ASSETS EMPLOYED:

FIXED ASSETS

3,818,658

4,134,026

4,551,431

4,966,286

4,994,008

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

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

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

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

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

TOTAL LONG TERM ASSETS

3,818,658

4,134,026

4,551,431

4,966,286

4,994,008

Stocks

48,053,741

45,467,661

33,518,507

25,749,561

25,217,395

Other debtors, deposits & prepayments

639,389

211,486

580,345

521,368

1,036,654

Amount due from related companies

2,425,410

2,823,748

5,606,698

8,552,000

7,039,837

Cash & bank balances

6,436,715

2,799,511

5,245,807

680,113

801,154

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

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

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

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

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

TOTAL CURRENT ASSETS

57,555,255

51,302,406

44,951,357

35,503,042

34,095,040

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

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

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

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

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

TOTAL ASSET

61,373,913

55,436,432

49,502,788

40,469,328

39,089,048

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

4,885,394

5,168,067

3,830,993

3,008,454

4,605,462

Other creditors & accruals

60,320

62,828

86,919

271,259

286,214

Bank overdraft

-

-

-

347,242

19,895

Bill & acceptances payable

3,208,000

3,018,000

3,631,000

2,675,000

2,902,000

Amounts owing to related companies

541,709

-

-

-

1,682,859

Amounts owing to director

3,057,396

2,133,087

2,658,489

2,082,945

2,434,931

Provision for taxation

558,374

251,248

1,053,071

535,035

48,018

Other liabilities

-

-

-

-

36,000

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

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

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

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

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

TOTAL CURRENT LIABILITIES

12,311,193

10,633,230

11,260,472

8,919,935

12,015,379

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

45,244,062

40,669,176

33,690,885

26,583,107

22,079,661

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

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

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

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

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

TOTAL NET ASSETS

49,062,720

44,803,202

38,242,316

31,549,393

27,073,669

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

30,000,000

15,300,000

15,300,000

15,300,000

15,300,000

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

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

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

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

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

TOTAL SHARE CAPITAL

30,000,000

15,300,000

15,300,000

15,300,000

15,300,000

Retained profit/(loss) carried forward

19,062,720

29,503,202

22,942,316

16,249,393

11,773,669

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

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

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

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

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

TOTAL RESERVES

19,062,720

29,503,202

22,942,316

16,249,393

11,773,669

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

49,062,720

44,803,202

38,242,316

31,549,393

27,073,669

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

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

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

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

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

49,062,720

44,803,202

38,242,316

31,549,393

27,073,669

 

 

FINANCIAL RATIO

 

 

 

TYPES OF FUNDS

Cash

6,436,715

2,799,511

5,245,807

680,113

801,154

Net Liquid Funds

3,228,715

(218,489)

1,614,807

(2,342,129)

(2,120,741)

Net Liquid Assets

(2,809,679)

(4,798,485)

172,378

833,546

(3,137,734)

Net Current Assets/(Liabilities)

45,244,062

40,669,176

33,690,885

26,583,107

22,079,661

Net Tangible Assets

49,062,720

44,803,202

38,242,316

31,549,393

27,073,669

Net Monetary Assets

(2,809,679)

(4,798,485)

172,378

833,546

(3,137,734)

BALANCE SHEET ITEMS

Total Borrowings

3,208,000

3,018,000

3,631,000

3,022,242

2,921,895

Total Liabilities

12,311,193

10,633,230

11,260,472

8,919,935

12,015,379

Total Assets

61,373,913

55,436,432

49,502,788

40,469,328

39,089,048

Net Assets

49,062,720

44,803,202

38,242,316

31,549,393

27,073,669

Net Assets Backing

49,062,720

44,803,202

38,242,316

31,549,393

27,073,669

Shareholders' Funds

49,062,720

44,803,202

38,242,316

31,549,393

27,073,669

Total Share Capital

30,000,000

15,300,000

15,300,000

15,300,000

15,300,000

Total Reserves

19,062,720

29,503,202

22,942,316

16,249,393

11,773,669

LIQUIDITY (Times)

Cash Ratio

0.52

0.26

0.47

0.08

0.07

Liquid Ratio

0.77

0.55

1.02

1.09

0.74

Current Ratio

4.68

4.82

3.99

3.98

2.84

WORKING CAPITAL CONTROL (Days)

Stock Ratio

67

75

61

53

68

Debtors Ratio

0

0

0

0

0

Creditors Ratio

7

9

8

7

14

SOLVENCY RATIOS (Times)

Gearing Ratio

0.07

0.07

0.09

0.10

0.11

Liabilities Ratio

0.25

0.24

0.29

0.28

0.44

Times Interest Earned Ratio

23.95

24.16

25.02

19.98

28.49

Assets Backing Ratio

1.64

2.93

2.50

2.06

1.77

PERFORMANCE RATIO (%)

Operating Profit Margin

3.78

4.05

4.54

3.54

3.52

Net Profit Margin

2.77

2.95

3.34

2.50

2.80

Return On Net Assets

21.14

21.02

24.77

21.08

18.22

Return On Capital Employed

21.14

21.02

24.77

20.86

18.21

Return On Shareholders' Funds/Equity

14.84

14.64

17.50

14.19

14.01

Dividend Pay Out Ratio (Times)

0.41

0.00

0.00

0.00

0.00

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

0

0

0

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs. 61.68

UK Pound

1

Rs. 93.53

Euro

1

Rs. 70.74

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

ASH

 

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.