MIRA INFORM REPORT

 

 

Report No. :

304084

Report Date :

23.01.2015

 

IDENTIFICATION DETAILS

 

Name :

TSA INDUSTRIES SDN. BHD.

 

 

Formerly Known As :

THIAN SOON INDUSTRIAL HARDWARE SDN BHD

THIAN SOON ENGINEERING HARDWARE SDN BHD

 

 

Registered Office :

Wisma KVC, LOT 3, Jalan P10/12, Kawasan Perusahaan Bangi, 43650 Bandar Baru Bangi, Selangor

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2013

 

 

Date of Incorporation :

04/11/1993

 

 

Com. Reg. No.:

280699-W

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Distribution of Non-Ferrous Metal & Other Industrial Hardware Products

 

 

No. of Employees :

200 [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 – 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.

:

280699-W

COMPANY NAME

:

TSA INDUSTRIES SDN. BHD.

FORMER NAME

:

THIAN SOON INDUSTRIAL HARDWARE SDN BHD (06/05/2004)
THIAN SOON ENGINEERING HARDWARE SDN BHD (19/03/2001)

INCORPORATION DATE

:

04/11/1993

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

WISMA KVC, LOT 3, JALAN P10/12, KAWASAN PERUSAHAAN BANGI, 43650 BANDAR BARU BANGI, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

:

LOT 3998, JALAN 6/2A, TAMAN INDUSTRI SELESA JAYA, 43300 SERI KEMBANGAN, SELANGOR, MALAYSIA.

TEL.NO.

:

03-89622888

FAX.NO.

:

03-89623155

EMAIL

:

TSA@TSA.COM.MY

WEB SITE

:

WWW.TSA.COM.MY

CONTACT PERSON

:

CHEW KUAN FAH ( DIRECTOR )

INDUSTRY CODE

:

46621

PRINCIPAL ACTIVITY

:

DISTRIBUTION OF NON-FERROUS METAL & OTHER INDUSTRIAL HARDWARE PRODUCTS

AUTHORISED CAPITAL

:

MYR 5,000,000.00 DIVIDED INTO
ORDINARY SHARE 5,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 2,300,000.00 DIVIDED INTO
ORDINARY SHARES 2,300,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 181,602,044 [2013]

NET WORTH

:

MYR 73,291,973 [2013]

STAFF STRENGTH

:

200 [2015]

BANKER (S)

:

CIMB BANK BHD
HONG LEONG BANK BHD
HSBC BANK MALAYSIA BHD
RHB BANK BHD
UNITED OVERSEAS BANK (MALAYSIA) BHD
AFFIN BANK BERHAD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

PAYMENT

:

AVERAGE

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

MODERATE

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

 

 

HISTORY / BACKGROUND

 

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

The Subject is principally engaged in the (as a / as an) distribution of non-ferrous metal & other industrial hardware products.

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

 

The immediate holding company of the Subject is KVC CORPORATION SDN. BHD., a company incorporated in MALAYSIA.

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

30/06/2014

MYR 5,000,000.00

MYR 2,300,000.00

31/12/1998

MYR 500,000.00

MYR 500,000.00

17/10/1994

MYR 500,000.00

MYR 250,000.00

08/04/1994

MYR 500,000.00

MYR 100,000.00

10/11/1993

MYR 100,000.00

MYR 3.00

 

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

 

Name

Address

IC/PP/Loc No

Shareholding

(%)

KVC CORPORATION SDN. BHD.

WISMA KVC, LOT 3, JALAN P10/12, KAWASAN PERUSAHAAN BANGI, 43650 BANDAR BARU BANGI, SELANGOR, MALAYSIA.

446118T

2,300,000.00

100.00

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

------

2,300,000.00

100.00

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

=====

+ Also Director

 

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

 

Local No

Country

Company

(%)

As At

726697M

MALAYSIA

TSA INDUSTRIES (JOHOR) SDN. BHD.

100.00

31/12/2013

726698H

MALAYSIA

TSA INDUSTRIES (IPOH) SDN. BHD.

100.00

31/12/2013

MALAYSIA

TSA INDUSTRIES (SEA) PTE.LTD.

100.00

31/12/2013

726886V

MALAYSIA

TSA INDUSTRIES (PENANG) SDN. BHD.

100.00

31/12/2013

428714A

MALAYSIA

TSA INDUSTRIES (SHAH ALAM) SDN. BHD.

100.00

31/12/2013

505176A

MALAYSIA

ONE CHOICE SALES AND MARKETING SDN. BHD.

100.00

31/12/2013

395174K

MALAYSIA

TSA EAST MALAYSIA SDN. BHD.

100.00

31/12/2013

290974K

MALAYSIA

TSA PIPES MANUFACTURING SDN. BHD.

100.00

31/12/2013

646860U

MALAYSIA

MITRA BINTANG SDN. BHD.

100.00

31/12/2013



DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. YEE KIM YUEN

Address

:

8, LORONG CHERAS PERDANA 8/34, TAMAN CHERAS PERDANA, BATU 9 3/4, 43200 KAJANG, SELANGOR, MALAYSIA.

IC / PP No

:

6110220

New IC No

:

601218-10-6195

Date of Birth

:

18/12/1960

Nationality

:

MALAYSIAN CHINESE

Date of Appointment

:

04/11/1993

 

DIRECTOR 2

 

Name Of Subject

:

MR. CHEW KUAN FAH

Address

:

11A, JALAN WAWASAN 4/8, PUSAT BANDAR PUCHONG, 47100 PUCHONG, SELANGOR, MALAYSIA.

IC / PP No

:

A0132314

New IC No

:

650517-04-5311

Date of Birth

:

17/05/1965

Nationality

:

MALAYSIAN

Date of Appointment

:

09/08/2004

 

DIRECTOR 3

 

Name Of Subject

:

MR. CHEN KHAI VOON

Address

:

2-E,JALAN BKT INDAH, PANGSAPURI BKT MEWAH, 43000 KAJANG, SELANGOR, MALAYSIA.

IC / PP No

:

6050304

New IC No

:

600924-10-6577

Date of Birth

:

24/09/1960

Nationality

:

MALAYSIAN

Date of Appointment

:

21/08/2000

 


MANAGEMENT

 

 

 

1)

Name of Subject

:

CHEW KUAN FAH

Position

:

DIRECTOR, MANAGING DIRECTOR

 

2)

Name of Subject

:

TECK SOON TAN

Position

:

FINANCE MANAGER

 

 

 

AUDITOR

 

Auditor

:

WONG CHAU HWA & CO.

Auditor' Address

:

33A, JALAN SS 15/4E, 47500 SUBANG JAYA, SELANGOR, MALAYSIA.

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. WONG CHOOI FUN

New IC No

:

730808-14-5208

Address

:

29 JALAN HUJAN MANIK, TAMAN OVERSEAS UNION, 58200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

CIMB BANK BHD

 

2)

Name

:

HONG LEONG BANK BHD

 

3)

Name

:

HSBC BANK MALAYSIA BHD

 

4)

Name

:

RHB BANK BHD

 

5)

Name

:

UNITED OVERSEAS BANK (MALAYSIA) BHD

 

6)

Name

:

AFFIN BANK BERHAD

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

09/02/1995

N/A

RHB BANK BHD

MYR 198,000.00

Satisfied

2

30/09/1995

N/A

AFFIN BANK BERHAD

MYR 1,550,000.00

Satisfied

3

30/09/1995

N/A

AFFIN BANK BERHAD

MYR 1,550,000.00

Satisfied

5

11/03/1996

N/A

AFFIN BANK BERHAD

MYR 127,200.00

Satisfied

6

11/03/1996

N/A

AFFIN BANK BERHAD

MYR 127,200.00

Satisfied

4

29/03/1996

N/A

BSN COMMERCIAL BANK MALAYSIA BERHAD

MYR 1,550,000.00

Satisfied

7

24/07/1996

N/A

BSN COMMERCIAL BANK MALAYSIA BERHAD

MYR 550,000.00

Satisfied

8

24/07/1996

N/A

AFFIN BANK BERHAD

MYR 550,000.00

Satisfied

9

04/04/1997

N/A

BSN COMMERCIAL BANK MALAYSIA BERHAD

MYR 550,000.00

Satisfied

10

04/04/1997

N/A

BSN COMMERCIAL BANK MALAYSIA BERHAD

MYR 1,200,000.00

Satisfied

11

04/04/1997

N/A

AFFIN BANK BERHAD

MYR 1,200,000.00

Satisfied

12

04/04/1997

N/A

BSN COMMERCIAL BANK MALAYSIA BERHAD

MYR 1,200,000.00

Satisfied

13

20/06/1997

N/A

BANK OF COMMERCE M BERHAD

MYR 750,000.00

Satisfied

14

23/02/1998

N/A

HONG LEONG BANK BERHAD

MYR 3,400,000.00

Satisfied

15

11/12/2000

N/A

BUMIPUTRACOMMERCE BANK BERHAD

MYR 2,550,000.00

Satisfied

16

11/12/2000

N/A

BUMIPUTRACOMMERCE BANK BERHAD

MYR 800,000.00

Satisfied

17

19/02/2001

N/A

RHB BANK BERHAD

MYR 2,000,000.00

Satisfied

18

17/10/2001

N/A

BUMIPUTRACOMMERCE BANK BERHAD

MYR 3,150,000.00

Satisfied

19

06/12/2001

N/A

UNITED OVERSEAS BANK MALAYSIA BHD

-

Satisfied

20

06/12/2001

N/A

UNITED OVERSEAS BANK MALAYSIA BHD

MYR 6,100,000.00

Satisfied

21

21/01/2002

N/A

HONG LEONG BANK BERHAD

MYR 1,000,000.00

Satisfied

22

14/06/2010

TRADE FINANCING GENERAL AGREEMENT

HSBC BANK MALAYSIA BERHAD

-

Unsatisfied

23

09/08/2011

MEMORANDUM OF LEGAL CHARGE OVER DEPOSITS

UNITED OVERSEAS BANK (MALAYSIA) BHD

-

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

:

TAIWAN,KOREA,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

[

]

Average 61-90 Days

[

X

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]

 

 

CLIENTELE

 

Local

:

YES

Percentage

:

95%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

5%

Export Market

:

ASIA

Credit Term

:

30 - 60 DAYS

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)

Type of Customer

:

DEALERS,END USERS

 

 

OPERATIONS

 

Goods Traded

:

FERROUS AND NON-FERROUS PRODUCTS

Award

:

1 ) BUSINESS SUMMIT AWARD - GRAND STAR WINNER Year :2007

Competitor(s)

:

KEJORA TEGUH SDN BHD
LEON FUAT HARDWARE (KLANG) SDN BHD
ORIENTAL SHEET PILING SDN BHD
PMS MARKETING SDN BHD
S.P. TECHVANCE CORPORATION SDN BHD

Ownership of premises

:

OWNED

 

Total Number of Employees:

 

YEAR

2015

2014

2013

2012

2011


GROUP

N/A

N/A

N/A

N/A

N/A

COMPANY

200

200

200

200

200

 

Branch

:

NO

 

Other Information:


The Subject is principally engaged in the (as a / as an) distribution of non-ferrous metal & other industrial hardware products.

TSA Group is a reputable stainless steel manufacturer of ornamental, square & rectangular pipe under the brand name TSS.

TSA Group also emphasizes on other products such as Pipes & Fittings, Construction Materials, Switchboard Enclosures & Boxes Accessories, Safety & Protection Items and Auto Parts & Components. Furthermore, TSA Group is well-known in offering its customers value-added services such as laser-cutting, plasma cutting and bandsawing that specially cater its customers' requirement and design.

The Subject supplies non-ferrous materials includes copper, brass, bronze and aluminium. The SC is one of the largest importer, stockiest and distributor in hardware industries.

The Subject is a a leading industrial hardware supplier, it also specialised in supplying wide product range of non-ferrous materials, pipes & fittings, switchboard panel & accessories, protection & safety items and other accessories.

Besides that the Subject offers ferrous materials such as stainless steel, mild steel, carbon steel and galvanized steel

We were informed that the Subject sells its products in various shapes (Angle, Flat Bar, Rod, Square, Rectangular, Pipe, Plate, Hexagon) thickness and sizes.

According to the Subject, it also provides value-added services such as CO2 laser-cutting, plasma cutting, oxy acetylene cut, guillotine shear and bandsawing that specially cater its customers' requirement and design.

The Subject acts as the Headquarter and it has established a wide network of offices strategically and well spread across different parts of Peninsular Malaysia and East Malaysia to provide a consistent and faster responses to any customer enquiries need and requirements.


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-89622888

Match

:

N/A

Address Provided by Client

:

LOT 3998, JALAN 6/2A, TAMAN INDUSTRI SELESA JAYA,43300,BALAKONG,SELANGOR.

Current Address

:

LOT 3998, JALAN 6/2A, TAMAN INDUSTRI SELESA JAYA, 43300 SERI KEMBANGAN, SELANGOR, MALAYSIA.

Match

:

YES

Latest Financial Accounts

:

YES

 

Other Investigations


We contacted one of the staff from the Subject and she provided some information.

 

 

FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Increased

[

2009 - 2013

]

Profit/(Loss) Before Tax

:

Increased

[

2009 - 2013

]

Return on Shareholder Funds

:

Unfavourable

[

6.66%

]

Return on Net Assets

:

Acceptable

[

10.15%

]

The Subject's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The higher profit could be attributed to the increase in turnover. 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

:

Unfavourable

[

95 Days

]

Debtor Ratio

:

Unfavourable

[

88 Days

]

Creditors Ratio

:

Favourable

[

32 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

[

1.36 Times

]

Current Ratio

:

Favourable

[

2.16 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

:

Unfavourable

[

2.94 Times

]

Gearing Ratio

:

Acceptable

[

0.90 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's gearing was slightly high. The Subject is utilising the leverage concept to fund its expansion. However, the high gearing has added financial risks to the Subject. It will be more vulnerable in times of economy downturn.

Overall Assessment :

Generally, the Subject's performance has improved with higher turnover and profit. The Subject was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the Subject should be able to repay its short term obligations. 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 was slightly high and its financial risk was also high. If no plans are made to reduce its gearing, the Subject's performance may deteriorate in the coming year.

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

 

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 1993, the Subject is a Private Limited company, focusing on distribution of non-ferrous metal & other industrial hardware products. The Subject has been in business for over two decades. It has built up a strong clientele base and satisfactory reputation will enable the Subject to further enhance its business in the near term. The Subject is expected to enjoy a stable market shares. A paid up capital of MYR 2,300,000 allows the Subject to expand its business more comfortably. With a strong backing from its holding company, the Subject enjoys timely financial assistance should the needs arise.

Apart from supplying its products to the local market, the Subject also exports to overseas countries. Its ability to penetrate into the global market has benefited the Subject in terms of higher profitability and well diversified its business risk. Hence, better growth prospect can be expected. The Subject is a fairly large and rapidly growing company with over 200 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. 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.

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. The Subject has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. The Subject is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. The gearing level of the Subject is slightly high, therefore it faces moderate financial risk. Given a positive net worth standing at MYR 73,291,973, 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.

The Subject's payment habit is average. With its adequate working capital, the Subject should be able to pay its short term debts.

The industry 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)

TSA INDUSTRIES 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

Company

Company

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

181,602,044

167,058,245

262,346,468

206,150,294

123,355,489

Other Income

463,411

2,335,685

1,786,531

1,772,620

2,898,398

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

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

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

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

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

Total Turnover

182,065,455

169,393,930

264,132,999

207,922,914

126,253,887

Costs of Goods Sold

(151,937,424)

(139,467,596)

(209,986,423)

(184,255,288)

(99,804,314)

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

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

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

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

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

Gross Profit

30,128,031

29,926,334

54,146,576

23,667,626

26,449,573

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

6,530,101

4,146,216

33,093,540

6,727,354

9,468,561

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

6,530,101

4,146,216

33,093,540

6,727,354

9,468,561

Taxation

(1,650,541)

(2,238,933)

(8,128,889)

(1,606,208)

(2,573,222)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

4,879,560

1,907,283

24,964,651

5,121,146

6,895,339

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

66,151,638

62,708,798

37,744,147

34,123,751

45,646,116

Prior year adjustment

-

1,535,557

-

-

-

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

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

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

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

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

As restated

66,151,638

64,244,355

37,744,147

34,123,751

45,646,116

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

71,031,198

66,151,638

62,708,798

39,244,897

52,541,455

DIVIDENDS - Ordinary (paid & proposed)

-

-

-

(1,500,750)

-

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

71,031,198

66,151,638

62,708,798

37,744,147

52,541,455

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Bank overdraft

86,939

78,358

169,318

53,811

1,154

Hire purchase

-

-

-

1,181

24,882

Lease interest

31,157

206,879

140,725

-

-

Term loan / Borrowing

1,664,374

2,059,904

1,120,909

830,320

487,209

Others

1,581,797

1,747,021

2,264,986

1,163,912

154,772

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

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

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

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

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

3,364,267

4,092,162

3,695,938

2,049,224

668,017

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

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

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

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

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

 

BALANCE SHEET

 

 

TSA INDUSTRIES SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

28,932,226

31,596,890

6,777,628

2,721,456

30,604,366

LONG TERM INVESTMENTS/OTHER ASSETS

Subsidiary companies

-

-

7,059,658

7,059,658

-

Investments

55

24,588

4,694

4,600

29,200

Deferred assets

-

-

-

-

100,434

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

55

24,588

7,064,352

7,064,258

129,634

Goodwill on consolidation

-

-

-

-

48,094

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

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

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

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

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

TOTAL INTANGIBLE ASSETS

-

-

-

-

48,094

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

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

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

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

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

TOTAL LONG TERM ASSETS

28,932,281

31,621,478

13,841,980

9,785,714

30,782,094

Stocks

47,423,876

46,239,880

24,808,307

21,890,770

42,803,742

Trade debtors

43,718,785

43,770,155

83,211,714

67,367,658

52,452,680

Other debtors, deposits & prepayments

14,661,487

18,686,298

27,366,097

15,663,663

849,045

Short term deposits

-

-

420,000

-

-

Amount due from holding company

11,374,336

12,479,480

15,780,507

-

-

Amount due from subsidiary companies

-

-

21,809,145

12,163,939

-

Amount due from related companies

92,107

117,137

-

-

878,811

Cash & bank balances

8,810,280

4,427,796

5,659,036

6,505,511

6,091,936

Others

1,249,406

2,303,164

523,054

621,101

3,901,976

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

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

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

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

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

TOTAL CURRENT ASSETS

127,330,277

128,023,910

179,577,860

124,212,642

106,978,190

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

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

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

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

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

TOTAL ASSET

156,262,558

159,645,388

193,419,840

133,998,356

137,760,284

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

13,262,867

10,817,353

24,934,273

13,195,211

7,085,256

Other creditors & accruals

3,010,850

3,189,682

1,466,498

2,298,033

2,823,329

Hire purchase & lease creditors

1,338,683

1,250,183

1,262,128

-

111,072

Bank overdraft

-

694,279

1,463,684

1,564,413

-

Short term borrowings/Term loans

3,633,748

4,489,346

4,740,591

1,340,591

4,015,229

Other borrowings

-

-

6,141,609

4,818,880

-

Bill & acceptances payable

37,463,167

40,656,878

45,905,666

35,972,172

33,328,158

Amounts owing to holding company

-

-

-

1,517,133

13,694,762

Amounts owing to subsidiary companies

-

-

4,779,250

18,572,698

-

Amounts owing to related companies

25,963

4,897

2,221,443

1,122,786

26,649

Provision for taxation

84,085

-

-

-

110,721

Other liabilities

-

-

-

7,984

-

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

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

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

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

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

TOTAL CURRENT LIABILITIES

58,819,363

61,102,618

92,915,142

80,409,901

61,195,176

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

68,510,914

66,921,292

86,662,718

43,802,741

45,783,014

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

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

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

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

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

TOTAL NET ASSETS

97,443,195

98,542,770

100,504,698

53,588,455

76,565,108

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

2,300,000

2,300,000

2,300,000

2,300,000

2,300,000

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

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

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

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

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

TOTAL SHARE CAPITAL

2,300,000

2,300,000

2,300,000

2,300,000

2,300,000

General reserve

(39,225)

(10,805)

-

-

-

Retained profit/(loss) carried forward

71,031,198

66,151,638

62,708,798

37,744,147

52,541,455

Others

-

11,010

94

-

-

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

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

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

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

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

TOTAL RESERVES

70,991,973

66,151,843

62,708,892

37,744,147

52,541,455

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

73,291,973

68,451,843

65,008,892

40,044,147

54,841,455

Long term loans

22,883,766

27,482,468

32,550,661

13,534,308

21,235,298

Lease obligations

582,946

1,865,029

-

-

-

Hire purchase creditors

-

-

2,619,963

-

-

Deferred taxation

684,510

743,430

325,182

10,000

488,355

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

24,151,222

30,090,927

35,495,806

13,544,308

21,723,653

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

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

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

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

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

97,443,195

98,542,770

100,504,698

53,588,455

76,565,108

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

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

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

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

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

 

FINANCIAL RATIO

 

 

TSA INDUSTRIES SDN. BHD.

 

TYPES OF FUNDS

Cash

8,810,280

4,427,796

6,079,036

6,505,511

6,091,936

Net Liquid Funds

(28,652,887)

(36,923,361)

(41,290,314)

(31,031,074)

(27,236,222)

Net Liquid Assets

21,087,038

20,681,412

61,854,411

21,911,971

2,979,272

Net Current Assets/(Liabilities)

68,510,914

66,921,292

86,662,718

43,802,741

45,783,014

Net Tangible Assets

97,443,195

98,542,770

100,504,698

53,588,455

76,517,014

Net Monetary Assets

(3,064,184)

(9,409,515)

26,358,605

8,367,663

(18,744,381)

BALANCE SHEET ITEMS

Total Borrowings

65,902,310

76,438,183

94,684,302

57,230,364

58,689,757

Total Liabilities

82,970,585

91,193,545

128,410,948

93,954,209

82,918,829

Total Assets

156,262,558

159,645,388

193,419,840

133,998,356

137,760,284

Net Assets

97,443,195

98,542,770

100,504,698

53,588,455

76,565,108

Net Assets Backing

73,291,973

68,451,843

65,008,892

40,044,147

54,841,455

Shareholders' Funds

73,291,973

68,451,843

65,008,892

40,044,147

54,841,455

Total Share Capital

2,300,000

2,300,000

2,300,000

2,300,000

2,300,000

Total Reserves

70,991,973

66,151,843

62,708,892

37,744,147

52,541,455

LIQUIDITY (Times)

Cash Ratio

0.15

0.07

0.07

0.08

0.10

Liquid Ratio

1.36

1.34

1.67

1.27

1.05

Current Ratio

2.16

2.10

1.93

1.54

1.75

WORKING CAPITAL CONTROL (Days)

Stock Ratio

95

101

35

39

127

Debtors Ratio

88

96

116

119

155

Creditors Ratio

32

28

43

26

26

SOLVENCY RATIOS (Times)

Gearing Ratio

0.90

1.12

1.46

1.43

1.07

Liabilities Ratio

1.13

1.33

1.98

2.35

1.51

Times Interest Earned Ratio

2.94

2.01

9.95

4.28

15.17

Assets Backing Ratio

42.37

42.84

43.70

23.30

33.27

PERFORMANCE RATIO (%)

Operating Profit Margin

3.60

2.48

12.61

3.26

7.68

Net Profit Margin

2.69

1.14

9.52

2.48

5.59

Return On Net Assets

10.15

8.36

36.60

16.38

13.24

Return On Capital Employed

10.02

8.20

35.64

15.91

13.21

Return On Shareholders' Funds/Equity

6.66

2.79

38.40

12.79

12.57

Dividend Pay Out Ratio (Times)

0.00

0.00

0.00

0.29

0.00

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

0

0

0

 


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.61.69

UK Pound

1

Rs.93.33

Euro

1

Rs.71.49

 

INFORMATION DETAILS

 

Analysis Done by :

KAR

 

 

Report Prepared by :

NIT

 

               

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.