MIRA INFORM REPORT

Report No. :	332013
Report Date :	18.07.2015

IDENTIFICATION DETAILS

Name :	LEADER UNIVERSAL ALUMINIUM SDN. BHD.
Formerly Known As :	CHONG SHING CABLES SDN BHD CHONG SHING CABLES & ELECTRICAL INDUSTRY SDN BHD
Registered Office :	Suite 7A, Menara Northam, 55, Jalan Sultan Ahmad Shah, 10050 Pulau Pinang, Pulau Pinang
Country :	Malaysia
Financials (as on) :	31.12.2013
Date of Incorporation :	15.11.1977
Com. Reg. No.:	36093-H
Legal Form :	Private Limited
Line of Business :	Manufacture & Sale of Cables.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate
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 – March 31, 2015

Country Name	Previous Rating (31.12.2014)	Current Rating (31.03.2015)
Malaysia	A2	A2

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

MALAYSIA - ECONOMIC OVERVIEW

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. 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 previously profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with sustained budget deficits, has forced Kuala Lumpur to begin to address fiscal shortfalls, through initial reductions in energy and sugar subsidies and the announcement of the 2015 implementation of a 6% goods and services tax. Falling global oil prices in the second half of 2014 have strained government finances, shrunk Malaysia’s current account surplus and put downward pressure on the ringgit. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplied about 29% of government revenue in 2014. 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. Malaysia is a member of the 12-nation Trans-Pacific Partnership free trade agreement negotiations and, with the nine other ASEAN members, will form the ASEAN Economic Community in 2015.

Source : CIA

EXECUTIVE SUMMARY

REGISTRATION NO.

:

36093-H

COMPANY NAME

:

LEADER UNIVERSAL ALUMINIUM SDN. BHD.

FORMER NAME

:

CHONG SHING CABLES SDN BHD (28/11/2007)
CHONG SHING CABLES & ELECTRICAL INDUSTRY SDN BHD (02/03/1981)

INCORPORATION DATE

:

15/11/1977

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

SUITE 7A, MENARA NORTHAM, 55, JALAN SULTAN AHMAD SHAH, 10050 PULAU PINANG, PULAU PINANG, MALAYSIA.

BUSINESS ADDRESS

:

2, JALAN TAHANA, KAWASAN PERINDUSTRIAN TAMPOI, 81200 JOHOR BAHRU, JOHOR, MALAYSIA.

TEL.NO.

:

07-2381888

FAX.NO.

:

07-2386333

CONTACT PERSON

:

LIM WENG SOON ( MANAGING DIRECTOR )

INDUSTRY CODE

:

27320

PRINCIPAL ACTIVITY

:

MANUFACTURE & SALE OF CABLES

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 22,000,000.00 DIVIDED INTO
ORDINARY SHARES 21,650,000 CASH AND 350,000 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 500,473,000 [2013]

NET WORTH

:

MYR 24,922,000 [2013]

STAFF STRENGTH

:

N/A

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

LIMITED

PAYMENT

:

GOOD

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

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) manufacture & sale of cables.

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

The immediate holding company of the Subject is MALAYSIA NOMINEES (TEMPATAN) SENDIRIAN BERHAD, a company incorporated in MALAYSIA.

Share Capital History

Date	Authorised Shared Capital	Issue & Paid Up Capital
30/06/2014	MYR 25,000,000.00	MYR 22,000,000.00

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

Name	Address	IC/PP/Loc No	Shareholding	(%)
MALAYSIA NOMINEES (TEMPATAN) SENDIRIAN BERHAD	MALAYSIA	6193K	22,000,000.00	100.00
			---------------	------
			22,000,000.00	100.00
			============	=====

+ Also Director

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MR. LIM WENG SOON
Address	:	18, TAMAN HUTCHINGS, GREEN LANE, 11600 PULAU PINANG, PULAU PINANG, MALAYSIA.
IC / PP No	:	A2171115
New IC No	:	720425-07-5979
Date of Birth	:	25/04/1972
Nationality	:	MALAYSIAN
Date of Appointment	:	01/01/2014

DIRECTOR 2

Name Of Subject	:	DATIN JESSICA H'NG HSIEH LING
Address	:	15,JALAN TUNKU ABD RAHMAN, 10350 PULAU PINANG, PULAU PINANG, MALAYSIA.
IC / PP No	:	A0359721
New IC No	:	660325-71-5068
Date of Birth	:	25/03/1966
Nationality	:	MALAYSIAN
Date of Appointment	:	09/07/2012

DIRECTOR 3

Name Of Subject	:	DATO' H'NG CHUN HSIANG
Address	:	15, JALAN TUNKU ABDUL RAHMAN, 10350 PULAU PINANG, PULAU PINANG, MALAYSIA.
IC / PP No	:	A1728499
New IC No	:	700802-07-5037
Date of Birth	:	02/08/1970
Nationality	:	MALAYSIAN
Date of Appointment	:	01/10/2010

DIRECTOR 4

Name Of Subject	:	H'NG BOK SAN @ H'NG AH BA
Address	:	1-D JALAN PANTAI MOLEK, 10470 PULAU PINANG, PULAU PINANG, MALAYSIA.
IC / PP No	:	3087837
New IC No	:	391115-07-5303
Date of Birth	:	15/11/1939
Nationality	:	MALAYSIAN
Date of Appointment	:	01/10/2010

DIRECTOR 5

Name Of Subject	:	MR. KON TED LIUK @ DJN @ PKT
Address	:	168-21-03, FETTES RESIDENCES CONDOMINIUM, JALAN TANJUNG TOKONG, 10470 PULAU PINANG, PULAU PINANG, MALAYSIA.
New IC No	:	540928-13-5613
Date of Birth	:	28/09/1954
Nationality	:	MALAYSIAN
Date of Appointment	:	03/01/2005

MANAGEMENT

1)	Name of Subject	:	LIM WENG SOON
	Position	:	MANAGING DIRECTOR

AUDITOR

Auditor	:	ERNST & YOUNG
Auditor' Address	:	LEVEL 23A, MENARA MILENIUM, JALAN DAMANLELA,, PUSAT BANDAR DAMANSARA, DAMANSARA HEIGHTS, 50490 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MS. ONG SWAD SARN
	New IC No	:	650104-07-5790
	Address	:	NO. 3, LORONG SENTOSA 5, 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.

2)	Company Secretary	:	MR. KON TED LIUK @ DJN @ PKT
	New IC No	:	540928-13-5613
	Address	:	168-21-03, FETTES RESIDENCES CONDOMINIUM, JALAN TANJUNG TOKONG, 10470 PULAU PINANG, PULAU PINANG, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING BHD

ENCUMBRANCE (S)

Charge No	Creation Date	Charge Description	Chargee Name	Total Charge	Status
1	19/04/1979	N/A	THE CHASE MANHATAN BANK	MYR 200,000.00	Satisfied
2	04/05/1984	N/A	CHASE MANHATTAN BANK NA	MYR 1,000,000.00	Satisfied
3	12/08/1993	LETTER OF PLEDGE & AGREEMENT	HONGKONG BANK MALAYSIA BHD	MYR 2.00	Satisfied

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

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	:	NEW ZEALAND ASIA
Credit Term	:	N/A
Payment Mode	:	CHEQUES TELEGRAPHIC TRANSFER (TT)

OPERATIONS

Products manufactured

:

CABLES

Total Number of Employees:
YEAR	2014
GROUP	N/A
COMPANY	200

Branch

:

NO

Other Information:

The Subject is principally engaged in the (as a / as an) manufacture & sale of cables.

The Subject manufactures high voltage as well as upstream products such as copper and aluminium rods and wires.

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client	:	072381888
Current Telephone Number	:	07-2381888
Match	:	YES
Address Provided by Client	:	2, JALAN TAHANA, KAWASAN PERINDUSTRIAN TAMPOI,81200,JOHOR BAHRU,JOHOR.
Current Address	:	2, JALAN TAHANA, KAWASAN PERINDUSTRIAN TAMPOI, 81200 JOHOR BAHRU, JOHOR, MALAYSIA.
Match	:	YES
Latest Financial Accounts	:	YES

Other Investigations

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

FINANCIAL ANALYSIS

Profitability
Turnover	:	Decreased	[	14.75%	]
Profit/(Loss) Before Tax	:	Increased	[	21.76%	]
Return on Shareholder Funds	:	Acceptable	[	27.58%	]
Return on Net Assets	:	Acceptable	[	26.50%	]
The lower turnover could be due to the intense market competition.The Subject's management have been efficient in controlling its operating costs. The Subject's management had generated acceptable return for its shareholders using its assets.
Working Capital Control
Stock Ratio	:	Favourable	[	28 Days	]
Debtor Ratio	:	Favourable	[	26 Days	]
Creditors Ratio	:	Favourable	[	7 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	[	0.54 Times	]
Current Ratio	:	Unfavourable	[	0.84 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	[	(1,330.15 Times)	]
Gearing Ratio	:	Unfavourable	[	2.80 Times	]
The Subject incurred losses in the year. It did not generate sufficient income to service its interest.  If the situation does not improve, the Subject may be vulnerable to default in servicing the interest. 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 :
Due to the efficient control of its operating costs, the Subject was able to remain profitable despite lower turnover achieved during the year. 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. The Subject's interest cover was negative, indicating that it did not generate sufficient income to service its interest. If its result does not show impressive improvements or succeed obtaining short term financing or capital injection, it may not be able to service its interest and repay the loans. 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 : LIMITED

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
27320 : Manufacture of other electronic and electric wires and cables
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 1977, the Subject is a Private Limited company, focusing on manufacture & sale of cables. 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. The Subject is a large entity with strong capital position of MYR 22,000,000. 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. 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.

Despite the lower turnover, the Subject's pre-tax profit have increased compared to the previous year. The higher profit could be due to better control of its operating costs and efficiency in utilising its resources. Return on shareholders' funds of the Subject was at a favourable range which indicated that the management was efficient in utilising its funds to generate income. Due to its weak liquidity position, the Subject may face working capital deficiency in meeting its short term financial obligations if no fresh capital are injected into the Subject. 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 24,922,000, the Subject should be able to maintain its business in the near terms.

The Subject's supplier are from both the local and overseas countries. This will eliminates the risk of dependency on deliveries from a number of key suppliers and insufficient quantities of its raw materials. Overall the Subject has a good control over its resources.

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

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

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

PROFIT AND LOSS ACCOUNT

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

LEADER UNIVERSAL ALUMINIUM 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	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	SUMMARY	SUMMARY	SUMMARY
Currency	MYR	MYR	MYR	MYR	MYR
TURNOVER	500,473,000	587,046,000	-	-	-
	----------------	----------------	----------------	----------------	----------------
Total Turnover	500,473,000	587,046,000	-	-	-
Costs of Goods Sold	(471,454,000)	(558,463,000)	-	-	-
	----------------	----------------	----------------	----------------	----------------
Gross Profit	29,019,000	28,583,000	-	-	-
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	11,581,000	9,511,000	(981,763)	(812,276)	(828,136)
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	11,581,000	9,511,000	(981,763)	(812,276)	(828,136)
Taxation	(4,708,000)	(1,735,000)	-	-	-
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	6,873,000	7,776,000	(981,763)	(812,276)	(828,136)
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	(2,443,000)	(10,218,845)	(9,237,082)	(8,424,806)	(7,596,670)
Prior year adjustment	-	(155)	-	-	-
	----------------	----------------	----------------	----------------	----------------
As restated	(2,443,000)	(10,219,000)	(9,237,082)	(8,424,806)	(7,596,670)
	----------------	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	4,430,000	(2,443,000)	(10,218,845)	(9,237,082)	(8,424,806)
DIVIDENDS - Ordinary (paid & proposed)	(3,713,000)	-	-	-	-
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	717,000	(2,443,000)	(10,218,845)	(9,237,082)	(8,424,806)
	=============	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
Others	(8,700)	2,191	-	-	-
	----------------	----------------	----------------	----------------	----------------
	(8,700)	2,191	-	-	-
	=============	=============	-	-	-

BALANCE SHEET

LEADER UNIVERSAL ALUMINIUM SDN. BHD.

ASSETS EMPLOYED:
FIXED ASSETS	53,746,000	39,657,000	4,772,380	4,772,380	4,711,018
Foreclosed properties	10,671,000	11,305,000	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM INVESTMENTS/OTHER ASSETS	10,671,000	11,305,000	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	64,417,000	50,962,000	4,772,380	4,772,380	4,711,018
Stocks	38,093,000	55,036,000	-	-	-
Trade debtors	36,172,000	43,464,000	-	-	-
Other debtors, deposits & prepayments	1,277,000	1,112,000	-	-	-
Short term deposits	1,260,000	-	-	-	-
Amount due from holding company	16,156,000	3,993,000	-	-	-
Amount due from related companies	11,938,000	2,543,000	-	-	-
Amount due from associated companies	-	561,000	-	-	-
Cash & bank balances	2,044,000	4,756,000	-	-	-
Others	175,000	-	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	107,115,000	111,465,000	107,061	107,041	107,121
	----------------	----------------	----------------	----------------	----------------
TOTAL ASSET	171,532,000	162,427,000	4,879,441	4,879,421	4,818,139
	=============	=============	=============	=============	=============
CURRENT LIABILITIES
Trade creditors	9,407,000	31,874,000	-	-	-
Other creditors & accruals	7,809,000	8,525,000	-	-	-
Hire purchase & lease creditors	65,000	61,000	-	-	-
Short term borrowings/Term loans	4,000,000	333,000	-	-	-
Bill & acceptances payable	49,410,000	4,150,000	-	-	-
Other liabilities & accruals	32,000	187,000	-	-	-
Amounts owing to related companies	-	25,552,000	-	-	-
Provision for taxation	424,000	338,000	-	-	-
Other liabilities	56,711,000	70,669,000	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	127,858,000	141,689,000	7,764,734	6,382,151	5,107,793
	----------------	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	(20,743,000)	(30,224,000)	(7,657,673)	(6,275,110)	(5,000,672)
	----------------	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	43,674,000	20,738,000	(2,885,293)	(1,502,730)	(289,654)
	=============	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	22,000,000	22,000,000	7,000,000	7,000,000	7,000,000
	----------------	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	22,000,000	22,000,000	7,000,000	7,000,000	7,000,000
Revaluation reserve	2,229,000	-	-	-	-
General reserve	(24,000)	(139,000)	-	-	-
Retained profit/(loss) carried forward	717,000	(2,443,000)	(10,218,845)	(9,237,082)	(8,424,806)
	----------------	----------------	----------------	----------------	----------------
TOTAL RESERVES	2,922,000	(2,582,000)	(10,218,845)	(9,237,082)	(8,424,806)
	----------------	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	24,922,000	19,418,000	(3,218,845)	(2,237,082)	(1,424,806)
Long term loans	16,000,000	-	-	-	-
Hire purchase creditors	205,000	270,000	-	-	-
Deferred taxation	2,547,000	1,050,000	-	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	18,752,000	1,320,000	333,552	734,352	1,135,152
	----------------	----------------	----------------	----------------	----------------
	43,674,000	20,738,000	(2,885,293)	(1,502,730)	(289,654)
	=============	=============	=============	=============	=============

FINANCIAL RATIO

LEADER UNIVERSAL ALUMINIUM SDN. BHD.

TYPES OF FUNDS
Cash	3,304,000	4,756,000	-	-	-
Net Liquid Funds	(46,106,000)	606,000	-	-	-
Net Liquid Assets	(58,836,000)	(85,260,000)	(7,657,673)	(6,275,110)	(5,000,672)
Net Current Assets/(Liabilities)	(20,743,000)	(30,224,000)	(7,657,673)	(6,275,110)	(5,000,672)
Net Tangible Assets	43,674,000	20,738,000	(2,885,293)	(1,502,730)	(289,654)
Net Monetary Assets	(77,588,000)	(86,580,000)	(7,991,225)	(7,009,462)	(6,135,824)
PROFIT & LOSS ITEMS
Earnings Before Interest & Tax (EBIT)	0	0	-	-	-
Earnings Before Interest, Taxes, Depreciation And Amortization (EBITDA)	0	0	-	-	-
BALANCE SHEET ITEMS
Total Borrowings	69,680,000	4,814,000	-	-	-
Total Liabilities	146,610,000	143,009,000	8,098,286	7,116,503	6,242,945
Total Assets	171,532,000	162,427,000	4,879,441	4,879,421	4,818,139
Net Assets	43,674,000	20,738,000	(2,885,293)	(1,502,730)	(289,654)
Net Assets Backing	24,922,000	19,418,000	(3,218,845)	(2,237,082)	(1,424,806)
Shareholders' Funds	24,922,000	19,418,000	(3,218,845)	(2,237,082)	(1,424,806)
Total Share Capital	22,000,000	22,000,000	7,000,000	7,000,000	7,000,000
Total Reserves	2,922,000	(2,582,000)	(10,218,845)	(9,237,082)	(8,424,806)
LIQUIDITY (Times)
Cash Ratio	0.03	0.03	-	-	-
Liquid Ratio	0.54	0.40	-	-	-
Current Ratio	0.84	0.79	0.01	0.02	0.02
WORKING CAPITAL CONTROL (Days)
Stock Ratio	28	34	-	-	-
Debtors Ratio	26	27	-	-	-
Creditors Ratio	7	21	-	-	-
SOLVENCY RATIOS (Times)
Gearing Ratio	2.80	0.25	-	-	-
Liabilities Ratio	5.88	7.36	(2.52)	(3.18)	(4.38)
Times Interest Earned Ratio	(1,330.15)	4,341.94	-	-	-
Assets Backing Ratio	1.99	0.94	(0.41)	(0.21)	(0.04)
PERFORMANCE RATIO (%)
Operating Profit Margin	2.31	1.62	-	-	-
Net Profit Margin	1.37	1.32	-	-	-
Return On Net Assets	26.50	45.87	34.03	54.05	285.91
Return On Capital Employed	26.46	45.74	34.03	54.05	285.91
Return On Shareholders' Funds/Equity	27.58	40.05	30.50	36.31	58.12
Dividend Pay Out Ratio (Times)	0.54	0.00	-	-	-
NOTES TO ACCOUNTS
Contingent Liabilities	0	0

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.63.49
UK Pound	1	Rs.99.43
Euro	1	Rs.69.14

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%)

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