MIRA INFORM REPORT

 

 

Report No. :

327705

Report Date :

20.06.2015

 

IDENTIFICATION DETAILS

 

Name :

TOP TEA (M) SDN. BHD.

 

 

Registered Office :

31B, B, Jalan Sj 17, Taman Selayang Jaya, 68100 Batu Caves, Selangor

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.05.2014

 

 

Date of Incorporation :

04.06.2009

 

 

Com. Reg. No.:

859517-U

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Trading of tea

 

 

No. of Employee :

10 [2015]

 

 

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.

:

859517-U

COMPANY NAME

:

TOP TEA (M) SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

04/06/2009

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

31B, B, JALAN SJ 17, TAMAN SELAYANG JAYA, 68100 BATU CAVES, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

:

4-S, JALAN BIDARA 1, TAMAN BIDARA, SELAYANG, 68100 BATU CAVES, SELANGOR, MALAYSIA.

TEL.NO.

:

03-61275857

FAX.NO.

:

03-61368363

HP.NO.

:

0122902655

CONTACT PERSON

:

NG MEI LAI @ LIM MEI LAI ( DIRECTOR )

INDUSTRY CODE

:

46325

PRINCIPAL ACTIVITY

:

TRADING OF TEA

AUTHORISED CAPITAL

:

MYR 500,000.00 DIVIDED INTO
ORDINARY SHARE 500,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 210,000.00 DIVIDED INTO
ORDINARY SHARES 210,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 5,238,801 [2014]

NET WORTH

:

MYR 232,035 [2014]

STAFF STRENGTH

:

10 [2015]

BANKER (S)

:

PUBLIC BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

GOOD

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

MODERATE

CURRENCY EXPOSURE

:

N/A

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) trading of tea.

 

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



 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

28/11/2014

MYR 500,000.00

MYR 210,000.00

26/05/2011

MYR 500,000.00

MYR 180,000.00

16/11/2009

MYR 500,000.00

MYR 150,000.00

25/06/2009

MYR 100,000.00

MYR 100,000.00

04/06/2009

MYR 100,000.00

MYR 100.00

 


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


Name

Address

IC/PP/Loc No

Shareholding

(%)

MR. LAU CHIN CHUAN +

10, JALAN SU 45, TAMAN SELAYANG UTAMA, 68100 BATU CAVES, SELANGOR, MALAYSIA.

650308-10-7053 A0104084

195,998.00

93.33

MS. NG MEI LAI @ LIM MEI LAI +

10, JALAN SU 45, TAMAN SELAYANG UTAMA, 68100 BATU CAVES, SELANGOR, MALAYSIA.

641023-10-7522 7466807

14,002.00

6.67

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

------

210,000.00

100.00

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

=====

+ Also Director

 


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

 



Local No

Country

Company

(%)

As At

894012V

MALAYSIA

ACCUPACK (M) SDN. BHD.

99.00

31/05/2014

893241H

MALAYSIA

TOP TEA & CAFE (M) SDN. BHD.

99.00

31/05/2015




 

 

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MS. NG MEI LAI @ LIM MEI LAI

Address

:

10, JALAN SU 45, TAMAN SELAYANG UTAMA, 68100 BATU CAVES, SELANGOR, MALAYSIA.

IC / PP No

:

7466807

New IC No

:

641023-10-7522

Date of Birth

:

23/10/1964

Nationality

:

MALAYSIAN

Date of Appointment

:

04/06/2009

 

DIRECTOR 2

 

Name Of Subject

:

MR. LAU CHIN CHUAN

Address

:

10, JALAN SU 45, TAMAN SELAYANG UTAMA, 68100 BATU CAVES, SELANGOR, MALAYSIA.

IC / PP No

:

A0104084

New IC No

:

650308-10-7053

Date of Birth

:

08/03/1965

Nationality

:

MALAYSIAN

Date of Appointment

:

04/06/2009



MANAGEMENT

 

 

 

1)

Name of Subject

:

NG MEI LAI @ LIM MEI LAI

Position

:

DIRECTOR

 

 

 

AUDITOR

 

Auditor

:

KIM & CO.

Auditor' Address

:

31B, F, JALAN SJ 17, TAMAN SELAYANG JAYA, 68100 BATU CAVES, SELANGOR, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. ONG TEE KEIN

New IC No

:

570101-10-7187

Address

:

85, MEDAN ATHINAHAPAN 2, TAMAN TUN DR ISMAIL, 60000 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

PUBLIC BANK BHD

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

25/05/2010

FACILITY AGREEMENT & FIRST LEGAL CHARGE

PUBLIC BANK BHD

-

Unsatisfied

2

17/10/2011

FACILITY AGREEMENT, FIRST PARTY CHARGE & DEED OF ASSIGNMENT

PUBLIC BANK 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

:

N/A

Overseas

:

N/A


The Subject refused to disclose its suppliers.

The Subject refused to provide any name of trade/service supplier and we are unable to conduct any trade enquiry. However, from financial historical data we conclude that :

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

X

]

Average 61-90 Days

[

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]

 

 

CLIENTELE

 

Local

:

YES

Percentage

:

100%

Domestic Markets

:

MALAYSIA

Overseas

:

NO

Credit Term

:

N/A

Payment Mode

:

CHEQUES

 

 

 

OPERATIONS

 

Goods Traded

:

TEA

 

Total Number of Employees:

YEAR

2015

GROUP

N/A

COMPANY

10

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) trading of tea.

The Subject deals with tea and other beverage products.


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-61275857

Match

:

N/A

Address Provided by Client

:

NO 4 - S JIN BIDARA 1, TMN BIDARA 68100 BT CAVES SELANGOR, MALAYSIA

Current Address

:

4-S, JALAN BIDARA 1, TAMAN BIDARA, SELAYANG, 68100 BATU CAVES, SELANGOR, MALAYSIA.

Match

:

NO

Latest Financial Accounts

:

YES

 

Other Investigations


On 16th June 2015 we contacted Ms Ng the Subject's Director and she provided some information.

The address as per stated in the report.


FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Erratic

[

2010 - 2014

]

Profit/(Loss) Before Tax

:

Increased

[

2010 - 2014

]

Return on Shareholder Funds

:

Unfavourable

[

8.07%

]

Return on Net Assets

:

Acceptable

[

15.32%

]

The fluctuating turnover reflects the fierce competition among the existing and new market players.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

:

Favourable

[

21 Days

]

Debtor Ratio

:

Favourable

[

49 Days

]

Creditors Ratio

:

Favourable

[

27 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

[

0.50 Times

]

Current Ratio

:

Unfavourable

[

0.70 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

[

1.48 Times

]

Gearing Ratio

:

Unfavourable

[

7.79 Times

]

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

Overall Assessment :

Although the turnover was erratic, the Subject had maintained a steady growth in its profit. This indicate the management's efficiency in controlling its costs and profitability. Due to its weak liquidity position, the Subject will be faced with problems in meeting all its short term obligations if no short term loan is obtained or additional capital injected into the Subject. If there is a fall in the Subject's profit or any increase in interest rate, the Subject may not be able to generate sufficient cash-flow to service its interest. The Subject's gearing level was high and its going concern will be in doubt if there is no injection of additional shareholders' funds in times of economic downturn and / or high interest rates.

Overall financial condition of the Subject : POOR

 

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2011

2012

2013

2014*

2015**

Population ( Million)

28.7

29.3

29.8

30.3

30.5

Gross Domestic Products ( % )

5.1

5.6

5.3

6.0

6.0

Domestic Demand ( % )

8.2

9.4

5.6

6.4

6.2

Private Expenditure ( % )

8.2

8.0

8.6

7.9

6.9

Consumption ( % )

7.1

1.0

5.7

6.5

5.6

Investment ( % )

12.2

11.7

13.3

12.0

10.7

Public Expenditure ( % )

8.4

13.3

4.4

2.3

4.2

Consumption ( % )

16.1

11.3

(1.2)

2.1

3.8

Investment ( % )

(0.3)

15.9

4.2

2.6

4.7

Balance of Trade ( MYR Million )

116,058

106,300

71,298

52,314

-

Government Finance ( MYR Million )

(45,511)

(42,297)

(39,993)

(37,291)

-

Government Finance to GDP / Fiscal Deficit ( % )

(5.4)

(4.5)

(4.0)

(3.5)

(3.0)

Inflation ( % Change in Composite CPI)

3.1

1.6

2.5

3.3

4.0

Unemployment Rate

3.3

3.2

3.0

3.0

3.0

Net International Reserves ( MYR Billion )

415

427

-

417

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

3.50

2.20

-

-

-

Average 3 Months of Non-performing Loans ( % )

14.80

14.70

-

-

-

Average Base Lending Rate ( % )

6.60

6.53

6.53

-

-

Business Loans Disbursed( % )

15.3

32.2

-

-

-

Foreign Investment ( MYR Million )

23,546.1

26,230.4

38,238.0

-

-

Consumer Loans ( % )

-

-

-

-

-

Registration of New Companies ( No. )

45,455

45,441

46,321

-

-

Registration of New Companies ( % )

3.0

(0.0)

1.9

-

-

Liquidation of Companies ( No. )

132,485

17,092

26,430

-

-

Liquidation of Companies ( % )

417.8

(87.1)

54.6

-

-

Registration of New Business ( No. )

284,598

324,761

329,895

-

-

Registration of New Business ( % )

5.0

14.0

2.0

-

-

Business Dissolved ( No. )

20,121

20,380

18,161

-

-

Business Dissolved ( % )

1.9

1.3

(10.9)

-

-

Sales of New Passenger Cars (' 000 Unit )

535.1

552.2

576.7

598.4

610.3

Cellular Phone Subscribers ( Million )

35.3

38.5

43.0

43.8

-

Tourist Arrival ( Million Persons )

24.7

25.0

25.7

28.0

-

Hotel Occupancy Rate ( % )

60.6

62.4

62.6

-

-

Credit Cards Spending ( % )

15.6

12.6

-

-

-

Bad Cheque Offenders (No.)

32,627

26,982

28,876

-

-

Individual Bankruptcy ( No.)

19,167

19,575

21,984

-

-

Individual Bankruptcy ( % )

5.8

2.1

12.3

-

-



INDUSTRIES ( % of Growth ):

2011

2012

2013

2014*

2015**

Agriculture

5.8

1.0

2.1

3.8

3.1

Palm Oil

10.8

(0.3)

2.6

6.7

-

Rubber

6.1

(7.9)

(10.1)

(10.4)

-

Forestry & Logging

(7.6)

(4.5)

(7.8)

(4.2)

-

Fishing

2.1

4.3

1.6

2.7

-

Other Agriculture

7.1

6.4

8.2

6.2

-

Industry Non-Performing Loans ( MYR Million )

634.1

-

-

-

-

% of Industry Non-Performing Loans

3.2

-

-

-

-

Mining

(5.4)

1.4

0.9

(0.8)

2.8

Oil & Gas

(1.7)

-

-

-

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

46.5

-

-

-

-

% of Industry Non-performing Loans

0.1

-

-

-

-

Manufacturing #

4.7

4.8

3.4

6.6

5.5

Exported-oriented Industries

4.1

6.5

3.3

5.6

-

Electrical & Electronics

(4.0)

12.7

6.9

13.3

-

Rubber Products

20.7

3.0

11.7

(0.3)

-

Wood Products

(5.1)

8.7

(2.7)

5.1

-

Textiles & Apparel

13.2

(7.1)

(2.6)

11.5

-

Domestic-oriented Industries

10.7

1.7

6.8

9.4

-

Food, Beverages & Tobacco

4.80

2.70

3.60

6.13

6.13

Chemical & Chemical Products

10.0

10.8

5.6

-

-

Plastic Products

3.8

-

-

-

-

Iron & Steel

2.2

(6.6)

5.0

0.1

-

Fabricated Metal Products

21.8

13.8

9.9

2.9

-

Non-metallic Mineral

12.1

2.9

(2.0)

5.4

-

Transport Equipment

12.0

3.4

13.8

22.9

-

Paper & Paper Products

9.5

3.1

1.8

4.7

-

Crude Oil Refineries

9.3

-

-

-

-

Industry Non-Performing Loans ( MYR Million )

6,537.2

-

-

-

-

% of Industry Non-Performing Loans

25.7

-

-

-

-

Construction

4.7

18.6

10.9

12.7

10.7

Industry Non-Performing Loans ( MYR Million )

3,856.9

-

-

-

-

% of Industry Non-Performing Loans

10.2

-

-

-

-

Services

7.1

6.4

5.9

5.9

5.6

Electric, Gas & Water

3.5

4.4

4.2

3.6

3.9

Transport, Storage & Communication

6.50

7.10

7.30

7.50

7.15

Wholesale, Retail, Hotel & Restaurant

5.2

4.7

5.9

6.9

6.5

Finance, Insurance & Real Estate

6.90

9.70

3.70

4.65

4.25

Government Services

12.4

9.4

8.3

6.1

5.6

Other Services

5.1

3.9

5.1

4.8

4.5

Industry Non-Performing Loans ( MYR Million )

6,825.2

-

-

-

-

% of Industry Non-Performing Loans

23.4

-

-

-

-

* Estimate / Preliminary

** Forecast

# Based On Manufacturing Production Index 



INDUSTRY ANALYSIS

 

MSIC CODE

46325 : Wholesale of coffee, tea, cocoa and other beverages

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 2009, the Subject is a Private Limited company, focusing on trading of tea. Having been in business for more than 5 years, the Subject has established a remarkable clientele base for itself which has contributed to its business growth. We noted that the issued and paid up capital of the Subject stands at MYR 210,000. Under the control of its directors, we considered that the Subject's business position in the market is much dependent on their abilities.

Investigation revealed, the Subject should have build up its clientele base and received supports from its regular customers. Investigation revealed that the Subject's interest lies mostly in the local market. Thus, any adverse changes to the local economy might have a negative impact on the Subject's business performance. Being a small company, the Subject's business operation is supported by 10 employees. 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.

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. 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 232,035, the Subject should be able to maintain its business in the near terms.

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

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

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

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

 

 

 

PROFIT AND LOSS ACCOUNT

 

 

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

 

Financial Year End

2014-05-31

2013-05-31

2012-05-31

2011-05-31

2010-05-31

Months

12

12

12

12

12

Consolidated Account

GROUP

GROUP

GROUP

GROUP

GROUP

Audited Account

YES

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

YES

Financial Type

FULL

FULL

SUMMARY

SUMMARY

SUMMARY

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

5,238,801

4,013,829

4,768,633

4,437,969

3,985,927

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

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

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

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

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

Total Turnover

5,238,801

4,013,829

4,768,633

4,437,969

3,985,927

Costs of Goods Sold

(4,575,946)

(3,536,753)

-

-

-

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

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

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

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

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

Gross Profit

662,855

477,076

-

-

-

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

50,028

17,198

2,244

36,953

34,487

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

50,028

17,198

2,244

36,953

34,487

Taxation

(31,244)

(19,742)

(20,966)

(16,479)

(3,187)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

18,784

(2,544)

(18,722)

20,474

31,300

Minority interests

(48)

-

25

-

(52)

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

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

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

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

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

PROFIT/(LOSS) BEFORE EXTRAORDINARY ITEMS

18,736

(2,544)

(18,697)

20,474

31,248

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

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

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

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

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

PROFIT/(LOSS) ATTRIBUTABLE TO SHAREHOLDERS

18,736

(2,544)

(18,697)

20,474

31,248

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

(19,019)

(16,475)

2,222

31,248

-

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

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

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

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

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

As restated

(19,019)

(16,475)

2,222

31,248

-

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

(283)

(19,019)

(16,475)

51,722

31,248

DIVIDENDS - Ordinary (paid & proposed)

-

-

-

(49,500)

-

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

(283)

(19,019)

(16,475)

2,222

31,248

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Bank overdraft

6,713

9,132

-

-

-

Hire purchase

2,093

3,588

-

-

-

Term loan / Borrowing

38,596

40,712

-

-

-

Others

57,502

28,977

-

-

-

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

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

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

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

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

104,904

82,409

-

-

-

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

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

-

-

-

DEPRECIATION (as per notes to P&L)

100,648

83,514

-

-

-

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

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

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

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

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

100,648

83,514

-

-

-

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

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

 

 

BALANCE SHEET

 

 

 

ASSETS EMPLOYED:

FIXED ASSETS

1,464,865

1,479,839

1,537,798

810,767

826,274

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

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

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

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

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

TOTAL LONG TERM ASSETS

1,464,865

1,479,839

1,537,798

810,767

826,274

Stocks

296,088

365,925

-

-

-

Trade debtors

698,583

323,960

-

-

-

Other debtors, deposits & prepayments

35,586

127,504

-

-

-

Amount due from director

-

10,800

-

-

-

Cash & bank balances

4,657

21,152

-

-

-

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

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

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

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

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

TOTAL CURRENT ASSETS

1,034,914

849,341

734,734

605,244

492,281

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

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

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

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

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

TOTAL ASSET

2,499,779

2,329,180

2,272,532

1,416,011

1,318,555

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

339,830

383,021

-

-

-

Other creditors & accruals

23,476

51,455

-

-

-

Hire purchase & lease creditors

12,612

17,500

-

-

-

Bank overdraft

104,990

100,693

-

-

-

Short term borrowings/Term loans

43,580

43,302

-

-

-

Bill & acceptances payable

870,191

654,081

-

-

-

Amounts owing to director

79,236

81,220

-

-

-

Provision for taxation

14,486

5,949

-

-

-

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

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

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

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

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

TOTAL CURRENT LIABILITIES

1,488,401

1,337,221

1,217,975

900,703

786,144

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

(453,487)

(487,880)

(483,241)

(295,459)

(293,863)

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

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

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

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

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

TOTAL NET ASSETS

1,011,378

991,959

1,054,557

515,308

532,411

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

210,000

210,000

210,000

180,000

150,000

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

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

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

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

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

TOTAL SHARE CAPITAL

210,000

210,000

210,000

180,000

150,000

RESERVES

Share premium

22,424

22,424

22,424

22,424

-

Retained profit/(loss) carried forward

(283)

(19,019)

(16,475)

2,222

31,248

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

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

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

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

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

TOTAL RESERVES

22,141

3,405

5,949

24,646

31,248

MINORITY INTEREST

(106)

(154)

(208)

(183)

54

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

232,035

213,251

215,741

204,463

181,302

Long term loans

734,845

776,598

-

-

-

Hire purchase creditors

42,388

-

-

-

-

Deferred taxation

2,110

2,110

-

-

-

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

779,343

778,708

838,816

310,845

351,109

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

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

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

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

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

1,011,378

991,959

1,054,557

515,308

532,411

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

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

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

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

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

 

 

FINANCIAL RATIO

 

 

 

TYPES OF FUNDS

Cash

4,657

21,152

-

-

-

Net Liquid Funds

(970,524)

(733,622)

-

-

-

Net Liquid Assets

(749,575)

(853,805)

(483,241)

(295,459)

(293,863)

Net Current Assets/(Liabilities)

(453,487)

(487,880)

(483,241)

(295,459)

(293,863)

Net Tangible Assets

1,011,378

991,959

1,054,557

515,308

532,411

Net Monetary Assets

(1,528,918)

(1,632,513)

(1,322,057)

(606,304)

(644,972)

PROFIT & LOSS ITEMS

Earnings Before Interest & Tax (EBIT)

154,932

99,607

-

-

-

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

255,580

183,121

-

-

-

BALANCE SHEET ITEMS

Total Borrowings

1,808,606

1,592,174

-

-

-

Total Liabilities

2,267,744

2,115,929

2,056,791

1,211,548

1,137,253

Total Assets

2,499,779

2,329,180

2,272,532

1,416,011

1,318,555

Net Assets

1,011,378

991,959

1,054,557

515,308

532,411

Net Assets Backing

232,035

213,251

215,741

204,463

181,302

Shareholders' Funds

232,035

213,251

215,741

204,463

181,302

Total Share Capital

210,000

210,000

210,000

180,000

150,000

Total Reserves

22,141

3,405

5,949

24,646

31,248

LIQUIDITY (Times)

Cash Ratio

0.00

0.02

-

-

-

Liquid Ratio

0.50

0.36

-

-

-

Current Ratio

0.70

0.64

0.60

0.67

0.63

WORKING CAPITAL CONTROL (Days)

Stock Ratio

21

33

-

-

-

Debtors Ratio

49

29

-

-

-

Creditors Ratio

27

40

-

-

-

SOLVENCY RATIOS (Times)

Gearing Ratio

7.79

7.47

-

-

-

Liabilities Ratio

9.77

9.92

9.53

5.93

6.27

Times Interest Earned Ratio

1.48

1.21

-

-

-

Assets Backing Ratio

4.82

4.72

5.02

2.86

3.55

PERFORMANCE RATIO (%)

Operating Profit Margin

0.95

0.43

0.05

0.83

0.87

Net Profit Margin

0.36

(0.06)

(0.39)

0.46

0.78

Return On Net Assets

15.32

10.04

0.21

7.17

6.48

Return On Capital Employed

13.72

8.97

0.21

7.17

6.48

Return On Shareholders' Funds/Equity

8.07

(1.19)

(8.67)

10.01

17.24

Dividend Pay Out Ratio (Times)

0.00

0.00

-

2.42

-

NOTES TO ACCOUNTS

Contingent Liabilities

0

0


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.63.82

UK Pound

1

Rs.101.26

Euro

1

Rs.72.36

 

 

INFORMATION DETAILS

 

Analysis Done by :

KAR

 

 

Report Prepared by :

ANK

 


 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

--

NB

                                       New Business

 

--

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                  Payment record (10%)

Credit history (10%)                   Market trend (10%)                                Operational size (10%)

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.