MIRA INFORM REPORT

 

 

Report No. :

308087

Report Date :

18.02.2015

 

IDENTIFICATION DETAILS

 

Name :

METROD (OFHC) SDN. BHD.

 

 

Registered Office :

The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, Level 18, 59200 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2013

 

 

Date of Incorporation :

28.05.1990

 

 

Com. Reg. No.:

198472-W

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Procurement of raw materials, marketing of electrical conductivity grade copper wires, rods

 

 

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 :

Slow but correct

 

 

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.

:

198472-W

COMPANY NAME

:

METROD (OFHC) SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

28/05/1990

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

THE GARDENS NORTH TOWER, MID VALLEY CITY, LINGKARAN SYED PUTRA, LEVEL 18, 59200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

3, LENGKUK KELULI 2, BUKIT RAJA PRIME INDUSTRIAL PARK, 41720 KLANG, SELANGOR, MALAYSIA.

TEL.NO.

:

03-33413422

FAX.NO.

:

03-33436355

EMAIL

:

PRAKASHHANSRAJ@METROD.COM

WEB SITE

:

WWW.METROD.COM

CONTACT PERSON

:

RAJAN MITTAL ( CEO )

INDUSTRY CODE

:

46621

PRINCIPAL ACTIVITY

:

PROCUREMENT OF RAW MATERIALS, MARKETING OF ELECTRICAL CONDUCTIVITY GRADE COPPER WIRES, RODS

AUTHORISED CAPITAL

:

MYR 30,000,000.00 DIVIDED INTO
ORDINARY SHARE 30,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 21,000,000.00 DIVIDED INTO
ORDINARY SHARES 21,000,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 1,299,845,046 [2013]

NET WORTH

:

MYR 94,886,312 [2013]

M1000 OVERALL RANKING

:

390[2011]

M1000 INDUSTRY RANKING

:

17[2011]

STAFF STRENGTH

:

170 [2015]

BANKER (S)

:

RHB BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

GOOD

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

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) procurement of raw materials, marketing of electrical conductivity grade copper wires, rods.

 

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


 

According to the Malaysia 1000 publication, the Subject's ranking are as follows:

 

 

YEAR

2011

2009

2008

2005

OVERALL RANKING

390

226

207

383

INDUSTRY RANKING

17

12

13

24


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

 


Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

29/05/2014

MYR 30,000,000.00

MYR 21,000,000.00

23/01/1997

MYR 30,000,000.00

MYR 20,000,000.00

03/01/1991

MYR 10,000,000.00

MYR 6,550,000.00

16/06/1990

MYR 10,000,000.00

MYR 2.00

 


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


Name

Address

IC/PP/Loc No

Shareholding

(%)

METROD (MALAYSIA) SDN. BHD.

THE GARDEN NORTH TOWER, MID VALLEY CITY, LINGKARAN SYED PUTRA, LEVEL 18, 59200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

66954H

21,000,000.00

100.00

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

------

21,000,000.00

100.00

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

=====

+ Also Director

 

 

DIRECTORS

DIRECTOR 1

 

Name Of Subject

:

RAJAN MITTAL

Address

:

C-20-1, HIJAUAN KIARA CONDOMINIUM, 6, JALAN KIARA 5, MONT KIARA, 50480 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

Z2430822

Nationality

:

INDIAN

Date of Appointment

:

27/12/2010

 

DIRECTOR 2

 

Name Of Subject

:

RAGHVENDRA MITTAL

Address

:

C-11-1, HIJAUAN KIARA CONDOMINIUM, 6,JALAN KIARA 5, MONT KIARA, 50480 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

Z1799505

Nationality

:

INDIAN

Date of Appointment

:

30/06/2013




MANAGEMENT

 

 

 

1)

Name of Subject

:

RAJAN MITTAL

Position

:

CEO

 

2)

Name of Subject

:

ADITYA MOHAN

Position

:

FINANCE MANAGER

 

3)

Name of Subject

:

SAJNI DHARAMDASS

Position

:

HUMAN RESOURCE MANAGER

 

4)

Name of Subject

:

RAYMOND HOO

Position

:

GENERAL MANAGER

 

 

 

 

 

AUDITOR

 

Auditor

:

PRICEWATERHOUSECOOPERS

Auditor' Address

:

1, SENTRAL, JALAN TRAVERS, KUALA LUMPUR CENTRAL, 50706 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. WONG WAI FOONG

New IC No

:

660510-10-6838

Address

:

1164, JALAN 17/64, HAPPY GARDEN, 46400 PETALING JAYA, SELANGOR, MALAYSIA.

 

2)

Company Secretary

:

MR. YEAP KOK LEONG

IC / PP No

:

6081387

New IC No

:

601107-10-5771

Address

:

11, JALAN 2/149G, TAMAN SRI ENDAH, 57000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

RHB BANK BHD

 

 

 

ENCUMBRANCE (S)


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

 

 

LITIGATION CHECK AGAINST SUBJECT


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

No legal action was found in our databank.

No winding up petition was found in our databank.

 

DEFAULTER CHECK AGAINST SUBJECT


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

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

 

PAYMENT RECORD

 

 

 

SOURCES OF RAW MATERIALS:

Local

:

N/A

Overseas

:

N/A


The SC 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

[

X

]

Average 61-90 Days

[

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]

 

 

CLIENTELE

 

Local

:

YES

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Export Market

:

ASIA

Credit Term

:

N/A

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)

 

 

OPERATIONS

 

Goods Traded

:

WIRE, COPPER, CABLE & ROD

Services

:

PROCUREMENTS OF RAW MATERIALS

 

Total Number of Employees:

 

YEAR

2015

2014

2011

2010


GROUP

N/A

N/A

N/A

N/A

COMPANY

170

170

150

150

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) procurement of raw materials, marketing of electrical conductivity grade copper wires, rods.

The Subject's high quality copper products are extensively used for many applications, including generation, transmission & distribution of electricity, telecommunications, lightning protection, welding, electronics & automotive parts, magnetic coils, motors, compressors, transformers etc.


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

0333413422

Current Telephone Number

:

03-33413422

Match

:

YES

Address Provided by Client

:

3, LENGKUK KELULI 2 P O BOX 212 BUKIT RAJA PRIME INDUSTRIAL PARK, 41720 KLANG SELANGOR DARUL ESHAN

Current Address

:

3, LENGKUK KELULI 2, BUKIT RAJA PRIME INDUSTRIAL PARK, 41720 KLANG, SELANGOR, MALAYSIA.

Match

:

NO

Latest Financial Accounts

:

YES

 

Other Investigations


On 13th February 2015 we contacted one of the staff from the Subject and he provided some information.

The address provided belongs to the Subject's PO Box address.

 

FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Erratic

[

2009 - 2013

]

Profit/(Loss) Before Tax

:

Decreased

[

2009 - 2013

]

Return on Shareholder Funds

:

Unfavourable

[

3.62%

]

Return on Net Assets

:

Unfavourable

[

6.94%

]

The fluctuating turnover reflects the fierce competition among the existing and new market players.The dip in profit could be due to the stiff market competition which reduced the Subject's profit margin. The unfavourable return on shareholders' funds could indicate that the Subject was inefficient in utilising its assets to generate returns.

Working Capital Control

Stock Ratio

:

Favourable

[

52 Days

]

Debtor Ratio

:

Favourable

[

52 Days

]

Creditors Ratio

:

Favourable

[

13 Days

]

The Subject's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The favourable debtors' days could be due to the good credit control measures implemented by the Subject. The Subject had a favourable creditors' ratio where the Subject could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

Liquidity

Liquid Ratio

:

Unfavourable

[

0.71 Times

]

Current Ratio

:

Unfavourable

[

1.30 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

:

Unfavourable

[

2.33 Times

]

Gearing Ratio

:

Unfavourable

[

2.60 Times

]

The Subject's interest cover was low. If its profits fall or when interest rate rises, it  may not be able to meet all its interest payment. The Subject was highly geared, thus it had a high financial risk. The Subject was dependent on loans to finance its business needs. In times of economic downturn and / or high interest rate, the Subject will become less profitable and competitive than other firms in the same industry, which are lowly geared. This is because the Subject has to service the interest and to repay the loan, which will erode part of its profits. The profits will fluctuate depending on the Subject's turnover and the interest it needs to pay.

Overall Assessment :

The Subject recorded lower profits as its turnover showed a erratic trend. The Subject's management was unable to control its costs efficiently as its profit showed a downward trend. 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. If there is a fall in the Subject's profit or any increase in interest rate, the Subject may not be able to generate sufficient cash-flow to service its interest. The Subject's gearing level was high and its going concern will be in doubt if there is no injection of additional shareholders' funds in times of economic downturn and / or high interest rates.

Overall financial condition of the Subject : POOR

 

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

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

46621 : Wholesale of ferrous and non-ferrous metal ores and metals

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 1990, the Subject is a Private Limited company, focusing on procurement of raw materials, marketing of electrical conductivity grade copper wires, rods. 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. The Subject is a large entity with strong capital position of MYR 21,000,000. We are confident with the Subject's business and its future growth prospect. Having strong support from its holding company has enabled the Subject to remain competitive despite the challenging business environment.

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. 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.

Financially, the Subject registered a higher turnover compared to previous year. However, its profits showed a reverse trend. The lower profit achieved was a result of higher operating cost and increased competition. The Subject has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. Due to its weak liquidity position, the Subject may face working capital deficiency in meeting its short term financial obligations if no fresh capital are injected into the Subject. The 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 94,886,312, the Subject should be able to maintain its business in the near terms.

Having a strong assets backing, the Subject possesses latent assets as collateral for further financial extension. Hence, it has good chance of getting loans if the needs arises.

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

1,299,845,046

1,157,079,944

1,316,031,282

1,259,665,265

923,194,412

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

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

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

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

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

Total Turnover

1,299,845,046

1,157,079,944

1,316,031,282

1,259,665,265

923,194,412

Costs of Goods Sold

(1,288,019,913)

(1,144,469,577)

(1,300,761,457)

(1,234,707,188)

-

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

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

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

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

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

Gross Profit

11,825,133

12,610,367

15,269,825

24,958,077

-

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

3,791,283

4,699,886

(3,115,399)

13,546,773

6,515,364

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

3,791,283

4,699,886

(3,115,399)

13,546,773

6,515,364

Taxation

(359,523)

(466,568)

(599,753)

(2,601,420)

1,125,292

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

3,431,760

4,233,318

(3,715,152)

10,945,353

7,640,656

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

70,454,552

65,479,998

69,604,877

58,705,131

51,319,475

Prior year adjustment

-

-

(413,131)

(45,607)

-

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

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

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

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

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

As restated

70,454,552

65,479,998

69,191,746

58,659,524

51,319,475

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

73,886,312

69,713,316

65,476,594

69,604,877

58,960,131

TRANSFER TO RESERVES - General

-

741,236

3,404

-

-

DIVIDENDS - Ordinary (paid & proposed)

-

-

-

-

(255,000)

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

73,886,312

70,454,552

65,479,998

69,604,877

58,705,131

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Term loan / Borrowing

2,856,551

3,433,011

2,926,738

1,390,145

2,630,750

Others

-

-

-

304,534

-

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

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

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

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

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

2,856,551

3,433,011

2,926,738

1,694,679

2,630,750

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

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

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

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

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

 

 

 

BALANCE SHEET

 

 

ASSETS EMPLOYED:

FIXED ASSETS

129,742

6,811,302

5,681,634

4,729,366

4,775,680

Deferred assets

323,732

306,654

615,169

343,174

2,231,494

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

323,732

306,654

615,169

343,174

2,231,494

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

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

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

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

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

TOTAL LONG TERM ASSETS

453,474

7,117,956

6,296,803

5,072,540

7,007,174

Stocks

186,454,902

151,902,174

98,311,448

128,496,862

99,957,443

Trade debtors

184,091,442

166,658,075

136,327,307

138,425,339

100,071,642

Other debtors, deposits & prepayments

27,532,552

948,466

1,301,241

1,189,583

770,218

Short term deposits

-

2,000,000

3,000,000

-

-

Deposits with financial institutions

-

-

-

5,206,322

-

Amount due from related companies

-

-

29,160,782

32,448,818

3,046,467

Cash & bank balances

14,579,069

39,016,187

6,163,449

8,009,571

3,208,818

Others

638,193

856,278

43,437

2,172,056

500,000

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

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

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

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

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

TOTAL CURRENT ASSETS

413,296,158

361,381,180

274,307,664

315,948,551

207,554,588

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

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

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

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

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

TOTAL ASSET

413,749,632

368,499,136

280,604,467

321,021,091

214,561,762

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

44,891,467

57,099,040

29,808,297

43,984,258

49,453,381

Other creditors & accruals

4,415,011

4,636,358

4,712,099

6,550,574

2,215,789

Short term borrowings/Term loans

246,440,650

165,148,200

107,954,460

136,509,629

70,544,700

Bill & acceptances payable

-

-

-

7,000,000

-

Amounts owing to holding company

14,092,288

42,531,472

41,483,745

31,552,388

11,322,506

Amounts owing to related companies

6,975,087

6,770,340

8,100,462

3,599,662

378,660

Provision for taxation

-

-

85,466

-

-

Other liabilities

1,131,732

50,146

249,872

218,444

147,970

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

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

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

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

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

TOTAL CURRENT LIABILITIES

317,946,235

276,235,556

192,394,401

229,414,955

134,063,006

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

95,349,923

85,145,624

81,913,263

86,533,596

73,491,582

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

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

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

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

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

TOTAL NET ASSETS

95,803,397

92,263,580

88,210,066

91,606,136

80,498,756

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

21,000,000

21,000,000

21,000,000

21,000,000

21,000,000

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

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

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

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

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

TOTAL SHARE CAPITAL

21,000,000

21,000,000

21,000,000

21,000,000

21,000,000

Retained profit/(loss) carried forward

73,886,312

70,454,552

65,479,998

69,604,877

58,705,131

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

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

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

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

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

TOTAL RESERVES

73,886,312

70,454,552

65,479,998

69,604,877

58,705,131

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

94,886,312

91,454,552

86,479,998

90,604,877

79,705,131

Retirement benefits provision

-

-

-

1,001,259

-

Others

917,085

809,028

1,730,068

-

793,625

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

917,085

809,028

1,730,068

1,001,259

793,625

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

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

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

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

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

95,803,397

92,263,580

88,210,066

91,606,136

80,498,756

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

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

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

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

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

 

 

 

FINANCIAL RATIO

 

 

 

TYPES OF FUNDS

Cash

14,579,069

41,016,187

9,163,449

8,009,571

3,208,818

Net Liquid Funds

14,579,069

41,016,187

9,163,449

1,009,571

3,208,818

Net Liquid Assets

(91,104,979)

(66,756,550)

(16,398,185)

(41,963,266)

(26,465,861)

Net Current Assets/(Liabilities)

95,349,923

85,145,624

81,913,263

86,533,596

73,491,582

Net Tangible Assets

95,803,397

92,263,580

88,210,066

91,606,136

80,498,756

Net Monetary Assets

(92,022,064)

(67,565,578)

(18,128,253)

(42,964,525)

(27,259,486)

BALANCE SHEET ITEMS

Total Borrowings

246,440,650

165,148,200

107,954,460

143,509,629

70,544,700

Total Liabilities

318,863,320

277,044,584

194,124,469

230,416,214

134,856,631

Total Assets

413,749,632

368,499,136

280,604,467

321,021,091

214,561,762

Net Assets

95,803,397

92,263,580

88,210,066

91,606,136

80,498,756

Net Assets Backing

94,886,312

91,454,552

86,479,998

90,604,877

79,705,131

Shareholders' Funds

94,886,312

91,454,552

86,479,998

90,604,877

79,705,131

Total Share Capital

21,000,000

21,000,000

21,000,000

21,000,000

21,000,000

Total Reserves

73,886,312

70,454,552

65,479,998

69,604,877

58,705,131

LIQUIDITY (Times)

Cash Ratio

0.05

0.15

0.05

0.03

0.02

Liquid Ratio

0.71

0.76

0.91

0.82

0.80

Current Ratio

1.30

1.31

1.43

1.38

1.55

WORKING CAPITAL CONTROL (Days)

Stock Ratio

52

48

27

37

40

Debtors Ratio

52

53

38

40

40

Creditors Ratio

13

18

8

13

20

SOLVENCY RATIOS (Times)

Gearing Ratio

2.60

1.81

1.25

1.58

0.89

Liabilities Ratio

3.36

3.03

2.24

2.54

1.69

Times Interest Earned Ratio

2.33

2.37

(0.06)

8.99

3.48

Assets Backing Ratio

4.56

4.39

4.20

4.36

3.83

PERFORMANCE RATIO (%)

Operating Profit Margin

0.29

0.41

(0.24)

1.08

0.71

Net Profit Margin

0.26

0.37

(0.28)

0.87

0.83

Return On Net Assets

6.94

8.81

(0.21)

16.64

11.36

Return On Capital Employed

6.94

8.81

(0.21)

16.64

11.36

Return On Shareholders' Funds/Equity

3.62

4.63

(4.30)

12.08

9.59

Dividend Pay Out Ratio (Times)

0.00

0.00

0.00

0.00

0.03

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

0

0

0

 

 


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.62.20

UK Pound

1

Rs.96.00

Euro

1

Rs.71.00

 

 

INFORMATION DETAILS

 

Analysis Done by :

RAS

 

 

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.