MIRA INFORM REPORT

 

 

Report No. :

327393

Report Date :

18.06.2015

 

IDENTIFICATION DETAILS

 

Name :

MALAYSIAN ALUMINIUM & ALLOYS SDN. BHD.

 

 

Registered Office :

307, Jalan Mahkota, Taman Maluri, Cheras, 1st Floor, 55100 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2013

 

 

Date of Incorporation :

04.10.2001

 

 

Com. Reg. No.:

560655-W

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Subject is manufacturer of aluminium & alloy sheets, stainless steel, silicon steel, carbon steel, pipes, angels, round & flat bars

 

 

No. of Employee :

70 [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 – 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 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 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 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. 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.

:

560655-W

COMPANY NAME

:

MALAYSIAN ALUMINIUM & ALLOYS SDN. BHD.

FORMER NAME

:

M.K. ALUMINIUM MANUFACTURING (M) SDN. BHD. (05/03/2003)

INCORPORATION DATE

:

04/10/2001

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

307, JALAN MAHKOTA, TAMAN MALURI, CHERAS, 1ST FLOOR, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

LOT 2-37, JALAN PERINDUSTRIAN MAHKOTA 7, TAMAN PERINDUSTRIAN MAHKOTA, 43700 BERANANG, SELANGOR, MALAYSIA.

TEL.NO.

:

03-87247991

FAX.NO.

:

03-87247466

EMAIL

:

INFO@MAALOYS.COM.MY

WEB SITE

:

WWW.MAALLOYS.COM.MY

CONTACT PERSON

:

MUTHUKUMAR S/O AYARPADDE ( EXECUTIVE VICE CHAIRMAN )

INDUSTRY CODE

:

24102

PRINCIPAL ACTIVITY

:

MANUFACTURER OF ALUMINIUM & ALLOY SHEETS, STAINLESS STEEL, SILICON STEEL, CARBON STEEL, PIPES, ANGELS, ROUND & FLAT BARS

AUTHORISED CAPITAL

:

MYR 50,000,000.00 DIVIDED INTO
ORDINARY SHARE 50,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 33,000,000.00 DIVIDED INTO
ORDINARY SHARES 13,370,000 CASH AND 19,630,000 OTHERWISE OF MYR 1.00 EACH.

SALES

:

MYR 130,655,590 [2013]

NET WORTH

:

MYR 43,519,611 [2013]

STAFF STRENGTH

:

70 [2015]

BANKER (S)

:

HONG LEONG BANK BHD
MALAYAN BANKING BHD
UNITED OVERSEAS BANK (MALAYSIA) BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

STABLE

PAYMENT

:

AVERAGE

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) manufacturer of aluminium & alloy sheets, stainless steel, silicon steel, carbon steel, pipes, angels, round & flat bars.

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

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

 

Share Capital History

 

Date

Authorised Shared Capital

Issue & Paid Up Capital

13/06/2014

MYR 50,000,000.00

MYR 33,000,000.00

05/08/2009

MYR 25,000,000.00

MYR 15,000,000.00

27/01/2005

MYR 25,000,000.00

MYR 13,370,000.00

24/11/2004

MYR 25,000,000.00

MYR 10,370,000.00

12/07/2004

MYR 5,000,000.00

MYR 3,000,000.00

24/02/2004

MYR 5,000,000.00

MYR 500,000.00

08/10/2001

MYR 100,000.00

MYR 1,000.00

04/10/2001

MYR 100,000.00

MYR 2.00

 

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

 


Name

Address

IC/PP/Loc No

Shareholding

(%)

MK INDUSTRIES (ASIA) SDN. BHD.

307, JALAN MAHKOTA, TAMAN MALURI, CHERAS, 1ST FLOOR, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

735129W

33,000,000.00

100.00

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

------

33,000,000.00

100.00

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

=====

+ Also Director

 


 





DIRECTORS

DIRECTOR 1

 

Name Of Subject

:

DATO' MUTHUKUMAR A/L AYARPADDE

Address

:

66, JALAN SETIAJAYA, BUKIT DAMANSARA, 50490 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

A2733985

New IC No

:

720713-10-5669

Date of Birth

:

13/07/1972

Nationality

:

MALAYSIAN

Date of Appointment

:

04/10/2001

 

DIRECTOR 2

 

Name Of Subject

:

MR. CHONG TIEAN LENG

Address

:

C4-5-1, CYPRESS CONDOMINIUM, PERSIARAN SUNGAI LONG 1, 43000 KAJANG, SELANGOR, MALAYSIA.

IC / PP No

:

A3582403

New IC No

:

770114-08-5999

Date of Birth

:

14/01/1977

Nationality

:

MALAYSIAN

Date of Appointment

:

30/12/2013

 

DIRECTOR 3

 

Name Of Subject

:

MURUGESAN MUTHU MUNIYANDI

Address

:

LOT 2-3-7, JALAN PERINDUSTRIAN MAHKOTA, 43700 BERANANG, SELANGOR, MALAYSIA.

IC / PP No

:

H7760413

Nationality

:

INDIAN

Date of Appointment

:

18/02/2005



MANAGEMENT

 

 

1)

Name of Subject

:

MURUGESAN MUTHU KUNIYANDI

Position

:

DIRECTOR

 

2)

Name of Subject

:

MUTHUKUMAR S/O AYARPADDE

Position

:

EXECUTIVE VICE CHAIRMAN

 

 

AUDITOR

 

Auditor

:

CROWE HORWATH

Auditor' Address

:

TOWER C, MEGAN AVENUE II, 12, JALAN YAP KWAN SENG. LEVEL 16, 50450 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. VIJAYAN A/L SINGARAM

IC / PP No

:

6108136

New IC No

:

601205-10-6639

Address

:

161-4, BLOCK 5, JALAN PERKASA SATU, TAMAN MALURI, CHERAS, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

BANKING

 

Banking relations are maintained principally with :

1)

Name

:

HONG LEONG BANK BHD

 

2)

Name

:

MALAYAN BANKING BHD

 

3)

Name

:

UNITED OVERSEAS BANK (MALAYSIA) BHD

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

16/08/2004

N/A

MALAYAN BANKING BERHAD

MYR 5,200,000.00

Satisfied

2

16/08/2004

N/A

MALAYAN BANKING BERHAD

MYR 6,150,000.00

Satisfied

3

23/02/2005

N/A

HONG LEONG BANK BERHAD

-

Satisfied

4

12/06/2007

FIXED & FLOATING

KUWAIT FINANCE HOUSE (MALAYSIA) BERHAD

-

Satisfied

5

24/09/2012

DEBENTURE

UNITED OVERSEAS BANK (MALAYSIA) BHD

-

Unsatisfied

6

24/09/2012

FIRST LEGAL CHARGE

UNITED OVERSEAS BANK (MALAYSIA) BHD

MYR 33,400,000.00

Unsatisfied

7

24/09/2012

DEBENTURE

UNITED OVERSEAS BANK (MALAYSIA) BHD

MYR 33,400,000.00

Unsatisfied

 

 

LITIGATION CHECK AGAINST SUBJECT


* A check has been conducted in our databank againt the Subject whether the Subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia.
No legal action was found in our databank.
No winding up petition was found in our databank.

 

DEFAULTER CHECK AGAINST SUBJECT


* We have checked through the Subject in our defaulters' database which comprised of debtors that have been blacklisted by our customers and debtors that have been placed or assigned to us for collection.
No blacklisted record & debt collection case was found in our defaulters' databank.

 

PAYMENT RECORD

 

 

SOURCES OF RAW MATERIALS:

Local

:

YES

Overseas

:

YES

Import Countries

:

ASIA



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

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Export Market

:

CHINA

VIETNAM

HONG KONG

TAIWAN

INDONESIA

PHILIPPINES

SINGAPORE

Credit Term

:

30 - 60 DAYS

Payment Mode

:

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

Type of Customer

:

AUTOMOTIVE INDUSTRIES,ELECTRICAL & ELECTRONIC INDUSTRIES,MANUFACTURING INDUSTRIES

 

 

OPERATIONS

 

Products manufactured

:

ALUMINIUM & ALLOY SHEETS, STAINLESS STEEL, SILICON STEEL, CARBON STEEL, PIPES, ANGELS, ROUND & FLAT BARS

Award

:

1 ) MS ISO 14001 Year :2006
2 ) OHSAS 18001 Year :2006
3 ) MS ISO 9001: 2000 Year :0

Member(s) / Affiliate(s)

:

FEDERATION OF MALAYSIAN MANUFACTURERS (FMM)

MALAYSIA EXTERNAL TRADE DEVELOPMENT CORPORATION (MATRADE)

SMALL & MEDIUM ENTERPRISE

Ownership of premises

:

OWNED

Factory Size

:

3 ACRE

Production Capacity

:

APPROXIMATELY 2,500 METRIC TONNES OF ALUMINIUM INGOTS PER MONTH

Shifts

:

2

 

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

70

60

50

50

50

50

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) manufacturer of aluminium & alloy sheets, stainless steel, silicon steel, carbon steel, pipes, angels, round & flat bars.

The Subject's products are mainly use in building materials, electrical products, automotive industry and others.

The Subject consistently produces aluminium products of the highest quality and conducts extensive quality testing on all its products from souring and sorting of raw materials right through to the final product.

We were informed that all the Subject's products are analysed for metal composition using advanced Spectrometer, Vaccum pump for porosity testing, microscopic observation and 'K' mould testing.

The Subject ensures that adjustments and modifications are carried out as required by the Quality Control Department and to meet customers' specific requirements.

The Subject utilizes the state-of-the-art, computer controlled laboratory equipments and proven statistical process control methods.

The Subject offers a wide range of products as follows :

* Electronic Components - Telecommunications, Computer Peripherals, Consumer Electrical, Audio / Video

* Automotive Components - Car Audio, Bicylce Parts, Engine Block

* Other Components - Medical Equipment, Fishing Equipment, Industrial


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-87247991

Match

:

N/A

Address Provided by Client

:

LOT 2-37 JALAN PERINDUSTRIAN MAHKOTA 7, TAMAN PERINDUSTRIAN MAHKOTA,43700,BERANANG,SELANGOR.

Current Address

:

LOT 2-37, JALAN PERINDUSTRIAN MAHKOTA 7, TAMAN PERINDUSTRIAN MAHKOTA, 43700 BERANANG, SELANGOR, MALAYSIA.

Match

:

YES

Latest Financial Accounts

:

YES

 

Other Investigations


On 16th June 2015 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

:

Acceptable

[

16.99%

]

Return on Net Assets

:

Acceptable

[

20.61%

]

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 Subject's management had generated acceptable return for its shareholders using its assets.

Working Capital Control

Stock Ratio

:

Unfavourable

[

70 Days

]

Debtor Ratio

:

Acceptable

[

60 Days

]

Creditors Ratio

:

Favourable

[

42 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 management was quite efficient in handling its debtors. The Subject's debtors days were at an acceptable range, thus the risk of its debts turning bad was minimised. 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

[

1.37 Times

]

Current Ratio

:

Favourable

[

2.01 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

:

Acceptable

[

6.23 Times

]

Gearing Ratio

:

Acceptable

[

0.86 Times

]

The Subject's interest cover was slightly low. If there is no sharp fall in its profit or sudden increase in the interest rates, we believe the Subject is able to generate sufficient income to service its interest and repay the loans. 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. The Subject had an acceptable interest cover. If there is no sudden sharp increase in interest rate or fall in the Subject's profit, we do believe the Subject is able to generate sufficient cash flow to service its interest payment. 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 : STABLE

 

 

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

24102 : Production of bars and rods of stainless steel or other alloy steel

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 2001, the Subject is a Private Limited company, focusing on manufacturer of aluminium & alloy sheets, stainless steel, silicon steel, carbon steel, pipes, angels, round & flat bars. Having been in the industry for over a decade, the Subject has achieved a certain market share and has built up a good reputation in the market. It should have received supports from its regular customers. With an issued and paid up capital of MYR 33,000,000 and strong backing from its holding company, the Subject has the ability to further expand its business in the future compared to other corporation.

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 moderate size company, the Subject has a total workforce of 70 employees in its business 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. 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. The gearing level of the Subject is slightly high, therefore it faces moderate financial risk. Given a positive net worth standing at MYR 43,519,611, 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)

MALAYSIAN ALUMINIUM & ALLOYS 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

18

Consolidated Account

Company

Company

Company

Company

Company

Audited Account

YES

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

YES

Financial Type

FULL

FULL

FULL

FULL

SUMMARY

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

130,655,590

122,716,265

111,557,383

119,184,077

157,799,304

Other Income

1,117,571

428,465

764,087

346,414

-

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

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

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

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

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

Total Turnover

131,773,161

123,144,730

112,321,470

119,530,491

157,799,304

Costs of Goods Sold

(116,061,157)

(112,960,167)

(104,120,681)

(108,571,195)

-

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

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

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

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

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

Gross Profit

15,712,004

10,184,563

8,200,789

10,959,296

-

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

10,220,689

3,916,763

2,876,362

5,407,028

8,810,765

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

10,220,689

3,916,763

2,876,362

5,407,028

8,810,765

Taxation

(2,828,000)

(1,289,460)

(858,300)

(2,680,355)

(330,000)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

7,392,689

2,627,303

2,018,062

2,726,673

8,480,765

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

12,712,005

10,084,702

10,566,640

10,839,967

5,687,799

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

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

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

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

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

As restated

12,712,005

10,084,702

10,566,640

10,839,967

5,687,799

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

20,104,694

12,712,005

12,584,702

13,566,640

14,168,564

TRANSFER TO RESERVES - General

-

-

-

-

(1,630,000)

DIVIDENDS - Ordinary (paid & proposed)

-

-

(2,500,000)

(3,000,000)

(1,698,597)

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

20,104,694

12,712,005

10,084,702

10,566,640

10,839,967

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Bankers' acceptance

360,390

88,857

72,523

98,551

-

Hire purchase

29,679

37,192

31,273

20,083

-

Letter of credit

-

25,307

-

-

-

Term loan / Borrowing

1,562,969

1,015,033

325,754

777,544

-

Others

-

1,060,362

2,111,630

2,120,609

-

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

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

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

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

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

1,953,038

2,226,751

2,541,180

3,016,787

-

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

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

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

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

-

DEPRECIATION (as per notes to P&L)

1,351,772

1,316,157

1,327,006

1,267,452

-

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

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

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

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

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

1,351,772

1,316,157

1,327,006

1,267,452

-

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

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

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

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

 

 

 

BALANCE SHEET

 

MALAYSIAN ALUMINIUM & ALLOYS SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

19,607,397

11,205,428

11,313,273

11,941,301

12,786,575

LONG TERM INVESTMENTS/OTHER ASSETS

Subsidiary companies

112,350

-

-

-

-

Investments

-

-

76,000

76,000

-

Others

76,000

76,000

-

-

-

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

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

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

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

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

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

188,350

76,000

76,000

76,000

-

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

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

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

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

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

TOTAL LONG TERM ASSETS

19,795,747

11,281,428

11,389,273

12,017,301

12,786,575

Stocks

25,002,207

19,878,882

12,222,007

15,487,442

-

Trade debtors

21,380,631

16,379,338

24,905,250

22,894,727

-

Other debtors, deposits & prepayments

1,769,278

1,946,471

2,996,866

762,382

-

Amount due from holding company

19,286,876

16,709,401

6,913,901

12,447,201

-

Amount due from related companies

9,727,571

10,717,545

8,188,877

1,011,367

-

Cash & bank balances

1,181,253

1,860,393

3,387,807

790,942

-

Others

-

613,981

5,584,280

9,686,281

-

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

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

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

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

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

TOTAL CURRENT ASSETS

78,347,816

68,106,011

64,198,988

63,080,342

57,357,714

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

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

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

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

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

TOTAL ASSET

98,143,563

79,387,439

75,588,261

75,097,643

70,144,289

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

13,364,959

12,777,803

10,299,838

5,864,814

-

Other creditors & accruals

1,248,081

1,564,221

966,072

1,819,648

-

Hire purchase & lease creditors

-

-

209,903

186,752

-

Short term borrowings/Term loans

23,257,052

19,436,596

913,463

862,598

-

Bill & acceptances payable

-

-

2,658,450

1,578,200

-

Amounts owing to related companies

-

72,298

-

-

-

Provision for taxation

1,204,756

-

-

-

-

Other liabilities

-

-

31,360,453

34,470,892

-

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

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

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

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

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

TOTAL CURRENT LIABILITIES

39,074,848

33,850,918

46,408,179

44,782,904

38,956,924

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

39,272,968

34,255,093

17,790,809

18,297,438

18,400,790

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

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

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

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

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

TOTAL NET ASSETS

59,068,715

45,536,521

29,180,082

30,314,739

31,187,365

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

15,000,000

15,000,000

15,000,000

15,000,000

15,000,000

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

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

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

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

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

TOTAL SHARE CAPITAL

15,000,000

15,000,000

15,000,000

15,000,000

15,000,000

Revaluation reserve

8,414,917

-

-

-

-

Retained profit/(loss) carried forward

20,104,694

12,712,005

10,084,702

10,566,640

10,839,967

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

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

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

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

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

TOTAL RESERVES

28,519,611

12,712,005

10,084,702

10,566,640

10,839,967

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

43,519,611

27,712,005

25,084,702

25,566,640

25,839,967

Long term loans

13,571,504

16,428,560

2,843,516

3,741,931

-

Hire purchase creditors

401,233

535,956

391,864

146,168

-

Deferred taxation

1,576,367

860,000

860,000

860,000

-

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

15,549,104

17,824,516

4,095,380

4,748,099

5,347,398

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

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

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

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

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

59,068,715

45,536,521

29,180,082

30,314,739

31,187,365

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

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

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

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

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

 

 

 

FINANCIAL RATIO

 

MALAYSIAN ALUMINIUM & ALLOYS SDN. BHD.

 

TYPES OF FUNDS

Cash

1,181,253

1,860,393

3,387,807

790,942

-

Net Liquid Funds

1,181,253

1,860,393

729,357

(787,258)

-

Net Liquid Assets

14,270,761

14,376,211

5,568,802

2,809,996

18,400,790

Net Current Assets/(Liabilities)

39,272,968

34,255,093

17,790,809

18,297,438

18,400,790

Net Tangible Assets

59,068,715

45,536,521

29,180,082

30,314,739

31,187,365

Net Monetary Assets

(1,278,343)

(3,448,305)

1,473,422

(1,938,103)

13,053,392

PROFIT & LOSS ITEMS

Earnings Before Interest & Tax (EBIT)

12,173,727

6,143,514

5,417,542

8,423,815

-

Earnings Before Interest, Taxes, Depreciation And Amortization (EBITDA)

13,525,499

7,459,671

6,744,548

9,691,267

-

BALANCE SHEET ITEMS

Total Borrowings

37,229,789

36,401,112

7,017,196

6,515,649

-

Total Liabilities

54,623,952

51,675,434

50,503,559

49,531,003

44,304,322

Total Assets

98,143,563

79,387,439

75,588,261

75,097,643

70,144,289

Net Assets

59,068,715

45,536,521

29,180,082

30,314,739

31,187,365

Net Assets Backing

43,519,611

27,712,005

25,084,702

25,566,640

25,839,967

Shareholders' Funds

43,519,611

27,712,005

25,084,702

25,566,640

25,839,967

Total Share Capital

15,000,000

15,000,000

15,000,000

15,000,000

15,000,000

Total Reserves

28,519,611

12,712,005

10,084,702

10,566,640

10,839,967

LIQUIDITY (Times)

Cash Ratio

0.03

0.05

0.07

0.02

-

Liquid Ratio

1.37

1.42

1.12

1.06

-

Current Ratio

2.01

2.01

1.38

1.41

1.47

WORKING CAPITAL CONTROL (Days)

Stock Ratio

70

59

40

47

-

Debtors Ratio

60

49

81

70

-

Creditors Ratio

42

41

36

20

-

SOLVENCY RATIOS (Times)

Gearing Ratio

0.86

1.31

0.28

0.25

-

Liabilities Ratio

1.26

1.86

2.01

1.94

1.71

Times Interest Earned Ratio

6.23

2.76

2.13

2.79

-

Assets Backing Ratio

3.94

3.04

1.95

2.02

2.08

PERFORMANCE RATIO (%)

Operating Profit Margin

7.82

3.19

2.58

4.54

5.58

Net Profit Margin

5.66

2.14

1.81

2.29

5.37

Return On Net Assets

20.61

13.49

18.57

27.79

28.25

Return On Capital Employed

20.61

13.49

18.43

27.62

28.25

Return On Shareholders' Funds/Equity

16.99

9.48

8.04

10.66

32.82

Dividend Pay Out Ratio (Times)

0.00

0.00

1.24

1.10

0.20

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

0

0

 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.64.11

UK Pound

1

Rs.100.32

Euro

1

Rs.72.17

 

 

INFORMATION DETAILS

 

Analysis Done by :

KAR

 

 

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.