MIRA INFORM REPORT

 

 

Report No. :

304046

Report Date :

22.01.2015

 

IDENTIFICATION DETAILS

 

Name :

ALPHA PRECISION TURNING AND ENGINEERING SDN.BHD.

 

 

Registered Office :

Suite S-21-H, Menara Northam, 55, Jalan Sultan Ahmad Shah, 21st Floor, 10050 Pulau Pinang, Pulau Pinang

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2013

 

 

Date of Incorporation :

25.02.1985

 

 

Com. Reg. No.:

135684-D

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Manufacturing of Metal Turning Precision Components

 

 

No. of Employee :

500 [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 :

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 – September 30, 2014

 

Country Name

Previous Rating

(30.06.2014)

Current Rating

(30.09.2014)

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.

:

135684-D

COMPANY NAME

:

ALPHA PRECISION TURNING AND ENGINEERING SDN.BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

25/02/1985

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

SUITE S-21-H, MENARA NORTHAM, 55, JALAN SULTAN AHMAD SHAH, 21ST FLOOR, 10050 PULAU PINANG, PULAU PINANG, MALAYSIA.

BUSINESS ADDRESS

:

LOT 40, LORONG PERUSAHAAN 1, KAWASAN PERINDUSTRIAN KULIM, 09000 KULIM, KEDAH, MALAYSIA.

TEL.NO.

:

04-4891891

FAX.NO.

:

04-4891885

WEB SITE

:

WWW.APTESB.COM

CONTACT PERSON

:

LIM THAM CHENG ( MANAGING DIRECTOR )

INDUSTRY CODE

:

25

PRINCIPAL ACTIVITY

:

MANUFACTURING OF METAL TURNING PRECISION COMPONENTS

AUTHORISED CAPITAL

:

MYR 25,000,000.00 DIVIDED INTO 
ORDINARY SHARE 25,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 11,262,808.00 DIVIDED INTO 
ORDINARY SHARES 2,436,808 CASH AND 8,826,000 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 71,106,456 [2013]

NET WORTH

:

MYR 112,850,961 [2013]

STAFF STRENGTH

:

500 [2015]

BANKER (S)

:

CIMB BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

STRONG

PAYMENT

:

REGULAR

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) manufacturing of metal turning precision components.

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

 

Share Capital History

 

Date

Authorised Shared Capital

Issue & Paid Up Capital

28/05/2014

MYR 25,000,000.00

MYR 11,262,808.00

17/02/2001

MYR 25,000,000.00

MYR 10,301,269.00

30/12/1998

MYR 5,000,000.00

MYR 2,000,000.00

30/12/1996

MYR 1,000,000.00

MYR 1,000,000.00

12/04/1995

MYR 750,000.00

MYR 734,000.00

25/08/1994

MYR 750,000.00

MYR 724,000.00

24/05/1991

MYR 750,000.00

MYR 544,000.00

31/12/1990

MYR 750,000.00

MYR 344,000.00

17/09/1988

MYR 300,000.00

MYR 228,000.00

22/06/1987

MYR 200,000.00

MYR 188,000.00

 

 

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


Name

Address

IC/PP/Loc No

Shareholding

(%)

MR. LIM THAM CHENG +

17, SOLOK BATU UBAN 4, 11700 GELUGOR, PULAU PINANG, MALAYSIA.

510414-07-5345 4240698

3,070,836.00

27.27

MR. CHUAH HWA BEE +

37, LEBUH BUKIT JAMBUL, 11900 BAYAN LEPAS, PULAU PINANG, MALAYSIA.

550520-07-5839 4851728

2,765,986.00

24.56

MR. LEONG YUE CHOY +

46, JALAN PANTAI JERJAK 15, SUNGAI NIBONG, BAYAN LEPAS, 11900 BAYAN LEPAS, PULAU PINANG, MALAYSIA.

490306-07-5115 0955307

1,751,641.00

15.55

MS. ENG SOO KEAW @ OOI SOO KEOW +

56, JALAN MOONLIGHT BAY, 11100 BATU FERINGGI, PULAU PINANG, MALAYSIA.

481018-07-5124 0312560

902,278.00

8.01

MR. TAN YOK KEEN @ TAN YOKE KING +

102, JALAN SATU, CANGKAT MINDEN, 11700 GELUGOR, PULAU PINANG, MALAYSIA.

450311-09-5149 3148118

648,989.00

5.76

PERBADANAN NASIONAL BERHAD

MALAYSIA

9157K

2,123,078.00

18.85

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

------

11,262,808.00

100.00

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

=====

 *Also Director

 

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

 



Local No

Country

Company

(%)

As At

225823D

MALAYSIA

TAC PRECISION (M) SDN. BHD.

100.00

26/11/2014

206619K

MALAYSIA

NTA MACHINING (M) SDN. BHD.

30.00

26/11/2014

 

 

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. YEW KOK PENG

Address

:

115, JALAN MAWAR, TAMAN JAYA, 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.

IC / PP No

:

5851830

New IC No

:

600120-02-5333

Date of Birth

:

20/01/1960

Nationality

:

MALAYSIAN

Date of Appointment

:

30/06/2006

 

DIRECTOR 2

 

Name Of Subject

:

MR. P'NG HUN SUN

Address

:

19 M, TAMAN SRI DAMAI, LEBUH RAYA BATU LANCANG, GROUND FLOOR, 11600 PULAU PINANG, PULAU PINANG, MALAYSIA.

IC / PP No

:

3643322

New IC No

:

500601-07-5309

Date of Birth

:

01/06/1950

Nationality

:

MALAYSIAN

Date of Appointment

:

22/09/2006

 

DIRECTOR 3

 

Name Of Subject

:

DATUK SHAH HEADAN BIN AYOOB HUSSAIN SHAH

Address

:

23, LORONG SUNGAI RUSA 1, TAMAN MUTIARA, SUNGAI RUSA, 11010, MALAYSIA.

IC / PP No

:

7323623

New IC No

:

640202-07-5605

Date of Birth

:

02/02/1964

Nationality

:

MALAYSIAN MALAY

Date of Appointment

:

15/01/2014

 

DIRECTOR 4

 

Name Of Subject

:

MR. KENNY P'NG CHUN LOON

Address

:

2B-8-7, LEBUH TUNKU KUDIN 2, BAYSWATER RESORT, CONDOMINIUM, 11700 GELUGOR, PULAU PINANG, MALAYSIA.

IC / PP No

:

A3558244

New IC No

:

761229-07-5577

Date of Birth

:

29/12/1976

Nationality

:

MALAYSIAN

Date of Appointment

:

28/05/2014

 

DIRECTOR 5

 

Name Of Subject

:

MR. MOHD AMY AZHAR BIN HAJI MOHD HARIF PROF MADYA

Address

:

104, JALAN LAGENDA 35, LAGENDA HEIGHTS, 08000 SUNGAI PETANI, KEDAH, MALAYSIA.

IC / PP No

:

A2367197

New IC No

:

730301-08-6245

Date of Birth

:

01/03/1973

Nationality

:

MALAYSIAN

Date of Appointment

:

15/01/2014

 

DIRECTOR 6

 

Name Of Subject

:

MS. NG FOO LANG

Address

:

37, LEBUH BUKIT JAMBUL, 11900 BAYAN LEPAS, PULAU PINANG, MALAYSIA.

IC / PP No

:

4818451

New IC No

:

550416-07-5038

Date of Birth

:

16/04/1955

Nationality

:

MALAYSIAN

Date of Appointment

:

20/11/2014

 

DIRECTOR 7

 

Name Of Subject

:

MR. TAN PING CHET

Address

:

23-22-2, ALPINE TOWER, TINGKAT BUKIT JAMBUL SATU, 11950 BAYAN BARU, PULAU PINANG, MALAYSIA.

IC / PP No

:

A3071218

New IC No

:

750414-07-5575

Date of Birth

:

14/04/1975

Nationality

:

MALAYSIAN

Date of Appointment

:

20/11/2014

 

DIRECTOR 8

 

Name Of Subject

:

MS. LEONG CHAN KAY

Address

:

46, JALAN PANTAI JEREJAK 15, SUNGAI NIBONG, 11900 BAYAN LEPAS, PULAU PINANG, MALAYSIA.

IC / PP No

:

A3787913

New IC No

:

771123-07-5850

Date of Birth

:

23/11/1977

Nationality

:

MALAYSIAN

Date of Appointment

:

20/11/2014

 

DIRECTOR 9

 

Name Of Subject

:

MR. TAN YOK KEEN @ TAN YOKE KING

Address

:

102, JALAN SATU, CANGKAT MINDEN, 11700 GELUGOR, PULAU PINANG, MALAYSIA.

IC / PP No

:

3148118

New IC No

:

450311-09-5149

Date of Birth

:

11/03/1945

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

07/04/2000

 

DIRECTOR 10

 

Name Of Subject

:

MS. ENG SOO KEAW @ OOI SOO KEOW

Address

:

56, JALAN MOONLIGHT BAY, 11100 BATU FERINGGI, PULAU PINANG, MALAYSIA.

IC / PP No

:

0312560

New IC No

:

481018-07-5124

Date of Birth

:

18/10/1948

Nationality

:

MALAYSIAN

Date of Appointment

:

05/04/2000

 

DIRECTOR 11

 

Name Of Subject

:

MR. LEONG YUE CHOY

Address

:

46, JALAN PANTAI JERJAK 15, SUNGAI NIBONG, BAYAN LEPAS, 11900 BAYAN LEPAS, PULAU PINANG, MALAYSIA.

IC / PP No

:

0955307

New IC No

:

490306-07-5115

Date of Birth

:

06/03/1949

Nationality

:

MALAYSIAN

Date of Appointment

:

21/09/2006

DIRECTOR 12

 

Name Of Subject

:

MR. CHUAH HWA BEE

Address

:

37, LEBUH BUKIT JAMBUL, 11900 BAYAN LEPAS, PULAU PINANG, MALAYSIA.

IC / PP No

:

4851728

New IC No

:

550520-07-5839

Date of Birth

:

20/05/1955

Nationality

:

MALAYSIAN

Date of Appointment

:

02/08/2006

 

DIRECTOR 13

 

Name Of Subject

:

MR. LIM THAM CHENG

Address

:

17, SOLOK BATU UBAN 4, 11700 GELUGOR, PULAU PINANG, MALAYSIA.

IC / PP No

:

4240698

New IC No

:

510414-07-5345

Date of Birth

:

14/04/1951

Nationality

:

MALAYSIAN

Date of Appointment

:

25/02/1985

 

 

MANAGEMENT

 

 

 

1)

Name of Subject

:

LIM THAM CHENG

Position

:

MANAGING DIRECTOR

 

2)

Name of Subject

:

YEW KOK PENG

Position

:

ACCOUNT MANAGER

 

3)

Name of Subject

:

KHOR SWEE LEE

Position

:

MARKETING MANAGER

 

 

 

AUDITOR

 

Auditor

:

CROWE HORWATH

Auditor' Address

:

17.01, MENARA BOUSTEAD PENANG, 39, JALAN SULTAN AHMAD SHAH, 10050 PULAU PINANG, PULAU PINANG, MALAYSIA.

 

 


COMPANY SECRETARIES

 

 

1)

Company Secretary

:

MS. LEE MEI MEI

IC / PP No

:

A0359638

New IC No

:

660324-07-5644

Address

:

35-B ZOO ROAD, 11500 AYER ITAM, PULAU PINANG, MALAYSIA.

 

2)

Company Secretary

:

MS. ANGELINA CHEAH GAIK SUAN

IC / PP No

:

A2557331

New IC No

:

731125-07-5284

Address

:

42-1121 TIARA VIEW, JALAN LOH POH HENG, 11200 TANJONG TOKONG, PULAU PINANG, 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

15/05/1990

N/A

BANK OF COMMERCE BHD

MYR 300,000.00

Unsatisfied

2

19/03/1991

PRINCIPAL SECOND DEBENTURE

BANK OF COMMERCE BERHAD

MYR 200,000.00

Unsatisfied

3

10/07/1992

PRINCIPAL THIRD DEBENTURE

BANK OF COMMERCE (M) BERHAD

MYR 200,000.00

Unsatisfied

4

08/12/1993

DEBENTURE

MALAYSIAN INDUSTRIAL DEVELOPMENT FINANCE BERHAD

MYR 620,000.00

Satisfied

5

29/01/1994

FOURTH DEBENTURE AND COLLATERAL SUPPLEMENTARY LOAN AGREEMENT

BANK OF COMMERCE M BERHAD

MYR 300,000.00

Unsatisfied

6

22/06/1994

CREATING OR EVIDENCING THE CHARGE

BANK OF COMMERCE M BHD

MYR 2,500,000.00

Unsatisfied

7

22/06/1994

DEBENTURE

BANK OF COMMERCE M BHD

MYR 1,500,000.00

Unsatisfied

8

29/06/1994

DEBENTURE

BANK OF COMMERCE M BHD

MYR 200,000.00

Unsatisfied

9

29/06/1994

CREATING OR EVIDENCING THE CHARGE

BANK OF COMMERCE M BHD

MYR 200,000.00

Unsatisfied

10

28/07/1994

N/A

MALAYSIAN INDS DEV FINANCE BHD

MYR 620,000.00

Satisfied

11

19/12/1996

DEED OF DEBENTURE AND COLLATERAL SUPPLEMENTAL AGREEMENT

BANK OF COMMERCE M BHD

MYR 1,300,000.00

Unsatisfied

12

12/07/1997

OPEN CHARGE

BANK KERJASAMA RAKYAT MALAYSA BHD

MYR 1.00

Satisfied

13

17/10/1998

N/A

BANK OF COMMERCE M BERHAD

MYR 2,000,000.00

Unsatisfied

14

31/03/2005

N/A

BUMIPUTRACOMMERCE BANK BERHAD

MYR 20,000,006.00

Unsatisfied

15

24/08/2011

FACILITY AGREEMENT, SUBSIDIARY SUPPLEMENTAL DEED OF ASSIGNMENT AND SUBSIDIARY LEGAL CHARGE

CIMB BANK BERHAD

MYR 6,500,000.00

Unsatisfied

16

30/01/2012

FIRST PARTY FOURTH LEGAL CHARGE & ANNEXURE, FIRST PARTY FOURTH LEGAL CHARGE & ANNEXURE AND SUPPLEMENTAL DEED OF ASSIGNMENT

CIMB BANK BERHAD

MYR 3,000,000.00

Unsatisfied

17

22/05/2013

FIRST PARTY NINTH DEBENTURE

CIMB BANK BERHAD

MYR 8,010,000.00

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

Percentage

:

60%

Overseas

:

YES

Percentage

:

40%

Import Countries

:

CHINA,KOREA,EUROPE


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

FRANCE

GERMANY

SINGAPORE

UNITED STATES

Credit Term

:

30 - 60 DAYS

Payment Mode

:

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

Type of Customer

:

MULTINATIONAL COMPANIES,FREE TRADE ZONE (FTZ) COMPANIES

 

OPERATIONS

 

Products manufactured

:

METAL TURNING PARTS / COMPONENTS

Award

:

1 ) MS ISO 9001 : 2000 Year :1997

Member(s) / Affiliate(s)

:

FEDERATION OF MALAYSIAN MANUFACTURERS (FMM)

SMI ASSOCIATION OF MALAYSIA

SMALL & MEDIUM ENTERPRISE

Ownership of premises

:

OWNED

 

 

 

 

Total Number of Employees:

 

YEAR

2015

2014

2013

2012

2011

2010

GROUP

N/A

N/A

N/A

N/A

N/A

N/A

COMPANY

500

500

500

360

360

360

 

Branch

:

YES

 

Other Information:


The Subject is principally engaged in the (as a / as an) manufacturing of metal turning precision components. 

The Subject's products range are includes as follows:

* Hard disc drive and watch industries
* Engine components for the automotive and motorcycle industries
* Stainless steel 316 connectors and valve components for the oil and gas industries
* Spindles for handpower tools

The Subject's products are used in various industries including automotive, motorcycle, electrical and electronics and oil and gas.

The Subject utilizes the advanced automated and semi-automates machineries to ensure production of high quality products.

The designs of the products are custom-made. However the Subject also provides consultation on the designs if required by its customers. 

 

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

 

Telephone Number Provided By Client

:

044891891

Current Telephone Number

:

04-4891891

Match

:

YES

Address Provided by Client

:

LOT 2 A KULIM INDUSTRIAL ESTATE JALAN LUNAS 09000 KULIM KEDAH MALAYSIA

Current Address

:

LOT 40, LORONG PERUSAHAAN 1, KAWASAN PERINDUSTRIAN KULIM, 09000 KULIM, KEDAH, MALAYSIA.

Match

:

NO

Latest Financial Accounts

:

YES

 

Other Investigations

FINANCIAL ANALYSIS


We contacted one of the staff from the Subject and she provided some information.
The address provided belongs to the Subject's factory also.



Profitability

Turnover

:

Increased

[

2009 - 2013

]

Profit/(Loss) Before Tax

:

Decreased

[

2009 - 2013

]

Return on Shareholder Funds

:

Acceptable

[

11.90%

]

Return on Net Assets

:

Acceptable

[

14.35%

]

 

The Subject's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The dip in profit could be due to the stiff market competition which reduced the Subject's profit margin. The Subject's management had generated acceptable return for its shareholders using its assets.

Working Capital Control

Stock Ratio

:

Unfavourable

[

113 Days

]

Debtor Ratio

:

Unfavourable

[

102 Days

]

Creditors Ratio

:

Favourable

[

34 Days

]

 

The Subject could be incurring higher holding cost. As its capital was tied up in stocks, it could face liquidity problems. The Subject's debtors ratio was high. The Subject should tighten its credit control and improve its collection period. 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

[

2.69 Times

]

Current Ratio

:

Favourable

[

4.56 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

[

67.39 Times

]

Gearing Ratio

:

Favourable

[

0.04 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 :

Although the Subject's turnover had increased, its profits had declined over the same corresponding period. This could be due to the stiffer market competition and / or higher operating costs which lowered the Subject's profit margin. 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 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 : STRONG

 

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



INDUSTRY ANALYSIS

MSIC CODE

25 : MANUFACTURE OF FABRICATED METAL PRODUCTS EXCEPT MACHINERY AND EQUIPMENT 

 

INDUSTRY : MANUFACTURING

The manufacturing sector is expected to grow by 5.5% in 2015. It will be bolstered by strong domestic and export-oriented industries in line with growing investment activities and favorable external demand. Moreover, in 2014, the manufacturing sectors have spearheading growth. The manufacturing sector is estimated to grow at a faster pace in 2014 on higher exports of electronics and electrical (E&E) products as external demand improves.

The manufacturing sector expanded strongly during the first half of 2014, the highest growth in three years, spurred by higher global semiconductor sales. Value-added of the manufacturing sector expanded 7.1% during the first half of 2014. Production of the sector rose 6.6% in the first seven months of 2014 supported by resilient domestic demand and recovery in the external sector during the first seven months of the years. The sales value of manufactured products rebounded by 7.7% in the first seven months of 2014. The strong performance of the sector was on account of higher output at 9.4% from the domestic-oriented industries, particularly transport equipment, food and beverage.

The manufacturing sector continued to attract domestic and foreign investment with investment approved by Malaysian Investment Development Authority (MIDA) totaling RM47.4 billion during the first six months of 2014, mainly from Japan, China and Germany. Meanwhile, the capacity utilization rate remained steady at 80.4% during the second quarter of 2014 while average wage per employee and productivity improved to RM2,772 per month and 5.9%, respectively during the first seven months of 2014. Boosted by favorable domestic economic activity and recovery in the external sector, the manufacturing sector is expected to record a better performance with growth of 6.4% in 2014.

In the meantime, production of wood products rebounded by 5.1% largely supported by higher output in the saw-milling and planning of wood segment at 25.9% during the first seven months of 2014. The positive performance was attributed to vibrant residential and commercial construction activities which contributed to increased use of timber frame and glued laminated timber for cost savings compared to the use of concrete and steel. Increased demand from major export destination such as the US, Japan and Australia for Malaysian made furniture contributed to the higher output, particularly wooden and cane furniture which rebounded by 2.2%.

Production of rubber products contracted 0.3% in the first seven months of 2014 on account of slower demand for rubber gloves and rubber tyres. The decline in rubber tyres for vehicles was due to the weaker external demand from the automotive industry, particularly from China. Output of other rubber products contracted 3.8% following the product shift from rubber-based to plastics, silicones and metal alloys in the manufacture of medical devices.

Besides, exports of manufactured products are expected to grow 6.1% in 2014 boosted by the growing demand from advanced economies. However, during the first seven months of 2014, manufactured exports surged 11.4%. The robust growth was buoyed by strengthening demand in the US and EU, reflecting significant exposure of Malaysian exports to the economic performance in the advance economies. The strength in export was broad-based with robust growth in both E&E and non- E&E subsectors.

Under budget 2015, the Government will provide incentive in the form of capital allowance on automation expenditure to encourage automation in the manufacturing sector, which may help in the manufacturing sector.

OVERALL INDUSTRY OUTLOOK : Average Growth




 

CREDIT RISK EVALUATION & RECOMMENDATION

 

 

Incorporated in 1985, the Subject is a Private Limited company, focusing on manufacturing of metal turning precision components. 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 MYR 11,262,808 in issued and paid up capital, the Subject has the potential of capturing a higher market shares as it is competing aggressively in the market. 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 penetrated into both the local and overseas market. The Subject has positioned itself in the global market and is competing in the industry. Its stable clientele base will enable the Subject to further enhance its business in the near term. Being a large entity, the Subject has a steady workforce of 500 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. To improve its quality products and services, we noted that the Subject has received a number of certifications & awards. This will improve the customer's confidence level to 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. 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. 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. 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 112,850,961, 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. 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 promptly.

 


 

PROFIT AND LOSS ACCOUNT

 

 

 

 

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

ALPHA PRECISION TURNING AND ENGINEERING SDN.BHD.

 

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

GROUP

GROUP

GROUP

GROUP

GROUP

Audited Account

YES

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

YES

Financial Type

FULL

FULL

FULL

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

71,106,456

64,239,854

63,788,368

51,160,810

36,072,990

Other Income

5,018,700

2,293,649

3,243,304

2,369,326

1,731,862

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

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

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

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

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

Total Turnover

76,125,156

66,533,503

67,031,672

53,530,136

37,804,852

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

15,546,015

11,517,551

8,426,348

8,619,945

5,560,811

SHARE OF PROFITS/(LOSSES) OF ASSOCIATED COMPANIES

1,504,429

9,705,496

-

-

-

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

17,050,444

21,223,047

8,426,348

8,619,945

5,560,811

Taxation

(3,626,276)

(2,714,612)

(2,538,347)

(1,046,856)

(353,768)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

13,424,168

18,508,435

5,888,001

7,573,089

5,207,043

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

87,144,170

70,325,156

65,563,436

63,621,751

60,667,270

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

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

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

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

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

As restated

87,144,170

70,325,156

65,563,436

63,621,751

60,667,270

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

100,568,338

88,833,591

71,451,437

71,194,840

65,874,313

DIVIDENDS - Ordinary (paid & proposed)

(3,378,842)

(1,689,421)

(1,126,281)

(5,631,404)

(2,252,562)

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

97,189,496

87,144,170

70,325,156

65,563,436

63,621,751

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Others

256,829

276,010

51,952

4,080

67,709

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

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

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

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

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

256,829

276,010

51,952

4,080

67,709

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

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

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

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

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

 

BALANCE SHEET

 

 

 

 

 

 

ALPHA PRECISION TURNING AND ENGINEERING SDN.BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

43,933,022

42,329,773

39,992,610

31,673,951

25,712,004

Associated companies

34,833,316

32,019,258

23,705,002

28,347,551

27,589,340

Others

-

-

-

-

1,009,361

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

34,833,316

32,019,258

23,705,002

28,347,551

28,598,701

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

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

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

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

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

TOTAL LONG TERM ASSETS

78,766,338

74,349,031

63,697,612

60,021,502

54,310,705

Stocks

21,927,267

20,964,731

17,034,400

12,855,441

10,158,425

Trade debtors

19,841,133

17,639,144

18,703,339

13,087,728

10,184,954

Other debtors, deposits & prepayments

895,868

1,083,092

1,010,426

690,602

604,316

Short term deposits

5,561,704

1,261,704

761,704

758,093

7,889,507

Cash & bank balances

5,384,581

4,266,433

981,544

3,391,701

4,083,873

Others

33,875

2,600,361

-

135,451

-

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

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

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

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

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

TOTAL CURRENT ASSETS

53,644,428

47,815,465

38,491,413

30,919,016

32,921,075

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

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

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

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

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

TOTAL ASSET

132,410,766

122,164,496

102,189,025

90,940,518

87,231,780

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

6,604,478

6,602,432

6,416,998

4,914,344

3,442,554

Other creditors & accruals

1,954,212

2,079,482

1,305,599

1,639,371

1,066,555

Short term borrowings/Term loans

1,509,760

1,441,989

846,647

-

572,805

Provision for taxation

1,701,525

1,725,519

1,662,437

1,527

657,418

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

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

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

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

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

TOTAL CURRENT LIABILITIES

11,769,975

11,849,422

10,231,681

6,555,242

5,739,332

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

41,874,453

35,966,043

28,259,732

24,363,774

27,181,743

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

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

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

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

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

TOTAL NET ASSETS

120,640,791

110,315,074

91,957,344

84,385,276

81,492,448

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

11,262,808

11,262,808

11,262,808

11,262,808

11,262,808

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

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

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

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

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

TOTAL SHARE CAPITAL

11,262,808

11,262,808

11,262,808

11,262,808

11,262,808

RESERVES

Share premium

3,974,304

3,974,304

3,974,304

3,974,304

3,974,304

Exchange equalisation/fluctuation reserve

424,353

(1,185,276)

(994,036)

(136,272)

(441,415)

Retained profit/(loss) carried forward

97,189,496

87,144,170

70,325,156

65,563,436

63,621,751

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

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

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

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

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

TOTAL RESERVES

101,588,153

89,933,198

73,305,424

69,401,468

67,154,640

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

112,850,961

101,196,006

84,568,232

80,664,276

78,417,448

Long term loans

3,296,830

4,807,068

3,448,112

-

-

Deferred taxation

4,493,000

4,312,000

3,941,000

3,721,000

3,075,000

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

7,789,830

9,119,068

7,389,112

3,721,000

3,075,000

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

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

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

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

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

120,640,791

110,315,074

91,957,344

84,385,276

81,492,448

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

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

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

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

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

 

 

 

FINANCIAL RATIO

 

 

 

 

 

ALPHA PRECISION TURNING AND ENGINEERING SDN.BHD.

 

TYPES OF FUNDS

Cash

10,946,285

5,528,137

1,743,248

4,149,794

11,973,380

Net Liquid Funds

10,946,285

5,528,137

1,743,248

4,149,794

11,973,380

Net Liquid Assets

19,947,186

15,001,312

11,225,332

11,508,333

17,023,318

Net Current Assets/(Liabilities)

41,874,453

35,966,043

28,259,732

24,363,774

27,181,743

Net Tangible Assets

120,640,791

110,315,074

91,957,344

84,385,276

81,492,448

Net Monetary Assets

12,157,356

5,882,244

3,836,220

7,787,333

13,948,318

BALANCE SHEET ITEMS

Total Borrowings

4,806,590

6,249,057

4,294,759

0

572,805

Total Liabilities

19,559,805

20,968,490

17,620,793

10,276,242

8,814,332

Total Assets

132,410,766

122,164,496

102,189,025

90,940,518

87,231,780

Net Assets

120,640,791

110,315,074

91,957,344

84,385,276

81,492,448

Net Assets Backing

112,850,961

101,196,006

84,568,232

80,664,276

78,417,448

Shareholders' Funds

112,850,961

101,196,006

84,568,232

80,664,276

78,417,448

Total Share Capital

11,262,808

11,262,808

11,262,808

11,262,808

11,262,808

Total Reserves

101,588,153

89,933,198

73,305,424

69,401,468

67,154,640

LIQUIDITY (Times)

Cash Ratio

0.93

0.47

0.17

0.63

2.09

Liquid Ratio

2.69

2.27

2.10

2.76

3.97

Current Ratio

4.56

4.04

3.76

4.72

5.74

WORKING CAPITAL CONTROL (Days)

Stock Ratio

113

119

97

92

103

Debtors Ratio

102

100

107

93

103

Creditors Ratio

34

38

37

35

35

SOLVENCY RATIOS (Times)

Gearing Ratio

0.04

0.06

0.05

0.00

0.01

Liabilities Ratio

0.17

0.21

0.21

0.13

0.11

Times Interest Earned Ratio

67.39

77.89

163.19

2,113.73

83.13

Assets Backing Ratio

10.71

9.79

8.16

7.49

7.24

PERFORMANCE RATIO (%)

Operating Profit Margin

23.98

33.04

13.21

16.85

15.42

Net Profit Margin

18.88

28.81

9.23

14.80

14.43

Return On Net Assets

14.35

19.49

9.22

10.22

6.91

Return On Capital Employed

14.35

19.49

9.22

10.22

6.91

Return On Shareholders' Funds/Equity

11.90

18.29

6.96

9.39

6.64

Dividend Pay Out Ratio (Times)

0.25

0.09

0.19

0.74

0.43

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

0

0

0

 


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs. 61.61

UK Pound

1

Rs. 93.49

Euro

1

Rs. 71.37

 

 

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.