MIRA INFORM REPORT

 

 

Report No. :

321627

Report Date :

13.05.2015

 

IDENTIFICATION DETAILS

 

Name :

EPIC CHEMICALS SDN. BHD.

 

 

Registered Office :

1-1B (Room 2), Jalan Pandan Indah 4/34, Pandan Indah, 55100 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2013

 

 

Date of Incorporation :

15.05.2000

 

 

Com. Reg. No.:

514320-M

 

 

Legal Form :

Private Limited (Limited By Share)

 

 

Line of Business :

Trading in all type of chemical and food product and ingredient.

 

 

No. of Employees :

15 [2015]

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

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

Satisfactory

 

Status :

Satisfactory

 

 

Payment Behaviour :

No Complaints

 

 

Litigation :

Clear

 

 

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

 

 

ECGC Country Risk Classification List – December 31, 2014

 

Country Name

Previous Rating

(30.09.2014)

Current Rating

(31.12.2014)

Malaysia

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

MALAYSIA - ECONOMIC OVERVIEW

 

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. The NAJIB administration also is continuing efforts to boost domestic demand and reduce the economy's dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver of the economy. As an oil and gas exporter, Malaysia has profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with sustained budget deficits, has forced Kuala Lumpur to begin to address fiscal shortfalls, through initial reductions in energy and sugar subsidies and the announcement of the 2015 implementation of a 6% goods and services tax. 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.

:

514320-M

COMPANY NAME

:

EPIC CHEMICALS SDN. BHD.

FORMER NAME

:

E3 TECHNOLOGY SDN. BHD. (12/10/2001)

INCORPORATION DATE

:

15/05/2000

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED (LIMITED BY SHARE)

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

1-1B(ROOM 2), JALAN PANDAN INDAH 4/34, PANDAN INDAH, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

17, JALAN INDUSTRI MAS 12, TAMAN MAS SEPANG, 47130 PUCHONG, SELANGOR, MALAYSIA.

TEL.NO.

:

03-80631133

FAX.NO.

:

03-80511838

CONTACT PERSON

:

TAN SOON HOCK ( EXECUTIVE DIRECTOR )

INDUSTRY CODE

:

46691

PRINCIPAL ACTIVITY

:

TRADING IN ALL TYPE OF CHEMICAL AND FOOD PRODUCT AND INGREDIENT

AUTHORISED CAPITAL

:

MYR 1,000,000.00 DIVIDED INTO
ORDINARY SHARE 1,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 650,000.00 DIVIDED INTO
ORDINARY SHARES 650,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 32,981,246 [2013]

NET WORTH

:

MYR 8,532,856 [2013]

STAFF STRENGTH

:

15 [2015]

 

 

 

BANKER (S)

 

ALLIANCE BANK MALAYSIA BHD
OCBC BANK (MALAYSIA) BHD
UNITED OVERSEAS BANK (MALAYSIA) BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

FAIR

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) trading in all type of chemical and food product and ingredient.

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

 

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

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

30/06/2012

MYR 1,000,000.00

MYR 650,000.00

31/12/2007

MYR 500,000.00

MYR 300,000.00

02/12/2002

MYR 100,000.00

MYR 100,000.00

04/12/2001

MYR 100,000.00

MYR 50,000.00

15/05/2000

MYR 100,000.00

MYR 10.00

 

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

 

Name

Address

IC/PP/Loc No

Shareholding

(%)

MR. CHAN KOK WOEI +

9, BATU 6 1/2, JALAN PUCHONG, 58200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

710611-10-5941 A1926151

195,000.00

30.00

EPIC INGREDIENTS SDN. BHD.

19, JALAN INDUSTRI MAS 12, TAMAN MAS SEPANG, 47130 PUCHONG, SELANGOR, MALAYSIA.

472454A

455,000.00

70.00

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

------

650,000.00

100.00

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

=====

+ Also Director

 

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. TAN SOON HOCK

Address

:

R1-01-08, SUBANG PERDANA COURT 8, JALAN PERSIARAN MULIA, 47501 SUBANG JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

A0878414

New IC No

:

671209-07-5239

Date of Birth

:

09/12/1967

Nationality

:

MALAYSIAN

Date of Appointment

:

15/05/2000

 

DIRECTOR 2

 

Name Of Subject

:

MR. CHAN KOK WOEI

Address

:

9, BATU 6 1/2, JALAN PUCHONG, 58200 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

A1926151

New IC No

:

710611-10-5941

Date of Birth

:

11/06/1971

Nationality

:

MALAYSIAN

Date of Appointment

:

18/10/2001

 

 

MANAGEMENT

 

 

1)

Name of Subject

:

TAN SOON HOCK

Position

:

EXECUTIVE DIRECTOR

 

 

 

AUDITOR

 

Auditor

:

KW LOH & ASSOCIATES

Auditor' Address

:

1-1B, JALAN PANDAN INDAH 4/34, PANDAN INDAH, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. YEE KOK WAH

IC / PP No

:

A0748968

New IC No

:

670604-10-5907

Address

:

18, JALAN BJ 14, TAMAN BALAKONG JAYA, 43300 SERI KEMBANGAN, SELANGOR, MALAYSIA.

 

2)

Company Secretary

:

MS. YOONG YUIT YUEN

IC / PP No

:

8111290

New IC No

:

521026-08-5270

Address

:

22, LORONG SS23/10B, 47400 PETALING JAYA, SELANGOR, MALAYSIA.

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

ALLIANCE BANK MALAYSIA BHD

 

2)

Name

:

OCBC BANK (MALAYSIA) BHD

 

3)

Name

:

UNITED OVERSEAS BANK (MALAYSIA) BHD

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

13/02/2006

FACILITIES AGREEMENT, MEMORANDUM OF DEPOSIT

ALLIANCE BANK MALAYSIA BHD

MYR 500,000.00

Satisfied

2

25/09/2007

CASH DEPOSIT AGREEMENT

OCBC BANK (MALAYSIA) BHD

-

Unsatisfied

3

13/11/2009

MEMORANDUM OF LEGAL CHARGE OVER DEPOSITS

UNITED OVERSEAS BANK (MALAYSIA) BHD

-

Unsatisfied

4

30/05/2011

MEMORANDUM OF LEGAL CHARGE OVER DEPOSITS

UNITED OVERSEAS BANK (MALAYSIA) BHD

-

Unsatisfied

5

19/09/2011

FIRST LEGAL CHARGE

UNITED OVERSEAS BANK (MALAYSIA) BHD

MYR 1,700,000.00

Unsatisfied

6

14/10/2011

SECOND LEGAL CHARGE

UNITED OVERSEAS BANK (MALAYSIA) BHD

MYR 2,500,000.00

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

:

CHINA,INDIA



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

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

X

]

Average 61-90 Days

[

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]

 

 

CLIENTELE

 

Local

:

YES

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Export Market

:

ASIA

Credit Term

:

30 - 60 DAYS

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)

Type of Customer

:

FOOD MANUFACTURERS,MANUFACTURING INDUSTRIES

 

 

OPERATIONS

 

Goods Traded

:

CHEMICAL AND FOOD PRODUCT AND INGREDIENT

Ownership of premises

:

LEASED/RENTED

 

Total Number of Employees:

 

YEAR

2015

2014

2013

2012

2011

GROUP

N/A

N/A

N/A

N/A

N/A

COMPANY

15

15

15

10

10

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) trading in all type of chemical and food product and ingredient.

The Subject mainly sells food ingredients and additives.

The Subject sells a wide range of products.

 

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-80631133

Match

:

N/A

Address Provided by Client

:

17, JALAN INDUSTRI MAS 12, TAMAN MAS SEPANG,47130,PUCHONG,SELANGOR.

Current Address

:

17, JALAN INDUSTRI MAS 12, TAMAN MAS SEPANG, 47130 PUCHONG, SELANGOR, MALAYSIA.

Match

:

YES

Latest Financial Accounts

:

YES

 

Other Investigations


On 7th May 2015 we contacted one of the staff from the Subject and he provided some information.

 

 

FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Erratic

[

2009 - 2013

]

Profit/(Loss) Before Tax

:

Decreased

[

2009 - 2013

]

Return on Shareholder Funds

:

Acceptable

[

11.58%

]

Return on Net Assets

:

Acceptable

[

15.24%

]

The fluctuating turnover reflects the fierce competition among the existing and new market players.The Subject's profit fell sharply because of the high operating costs incurred. The Subject's management had generated acceptable return for its shareholders using its assets.

Working Capital Control

Stock Ratio

:

Unfavourable

[

72 Days

]

Debtor Ratio

:

Acceptable

[

59 Days

]

Creditors Ratio

:

Favourable

[

13 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

[

1.11 Times

]

Current Ratio

:

Unfavourable

[

1.94 Times

]

A minimum liquid ratio of 1 should be maintained by the Subject in order to assure its creditors of its ability to meet short term obligations and the Subject was in a good liquidity position. Thus, we believe the Subject is able to meet all its short term obligations as and when they fall due.

Solvency

Interest Cover

:

Favourable

[

11.00 Times

]

Gearing Ratio

:

Favourable

[

0.69 Times

]

The interest cover showed that the Subject was able to service the interest. The favourable interest cover could indicate that the Subject was making enough profit to pay for the interest accrued. The Subject was lowly geared thus it had a low financial risk. The Subject was mainly financed by its shareholders' funds and internally generated funds. In times of economic slowdown / downturn, the Subject being a lowly geared company, will be able to compete better than those companies which are highly geared in the same industry.

Overall Assessment :

The Subject recorded lower profits as its turnover showed a erratic trend. The Subject's management was unable to control its costs efficiently as its profit showed a downward trend. The Subject was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the Subject should be able to repay its short term obligations. With the favourable interest cover, the Subject could be able to service all the accrued interest without facing any difficulties. The Subject as a lowly geared company, will be more secured compared to those highly geared companies. It has the ability to meet all its long term obligations.

Overall financial condition of the Subject : FAIR

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

 

Major Economic Indicators:

2011

2012

2013

2014*

2015**

Population ( Million)

28.7

29.3

29.8

30.3

30.5

Gross Domestic Products ( % )

5.1

5.6

5.3

6.0

6.0

Domestic Demand ( % )

8.2

9.4

5.6

6.4

6.2

Private Expenditure ( % )

8.2

8.0

8.6

7.9

6.9

Consumption ( % )

7.1

1.0

5.7

6.5

5.6

Investment ( % )

12.2

11.7

13.3

12.0

10.7

Public Expenditure ( % )

8.4

13.3

4.4

2.3

4.2

Consumption ( % )

16.1

11.3

(1.2)

2.1

3.8

Investment ( % )

(0.3)

15.9

4.2

2.6

4.7

Balance of Trade ( MYR Million )

116,058

106,300

71,298

52,314

-

Government Finance ( MYR Million )

(45,511)

(42,297)

(39,993)

(37,291)

-

Government Finance to GDP / Fiscal Deficit ( % )

(5.4)

(4.5)

(4.0)

(3.5)

(3.0)

Inflation ( % Change in Composite CPI)

3.1

1.6

2.5

3.3

4.0

Unemployment Rate

3.3

3.2

3.0

3.0

3.0

Net International Reserves ( MYR Billion )

415

427

-

417

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

3.50

2.20

-

-

-

Average 3 Months of Non-performing Loans ( % )

14.80

14.70

-

-

-

Average Base Lending Rate ( % )

6.60

6.53

6.53

-

-

Business Loans Disbursed( % )

15.3

32.2

-

-

-

Foreign Investment ( MYR Million )

23,546.1

26,230.4

38,238.0

-

-

Consumer Loans ( % )

-

-

-

-

-

Registration of New Companies ( No. )

45,455

45,441

46,321

-

-

Registration of New Companies ( % )

3.0

(0.0)

1.9

-

-

Liquidation of Companies ( No. )

132,485

17,092

26,430

-

-

Liquidation of Companies ( % )

417.8

(87.1)

54.6

-

-

Registration of New Business ( No. )

284,598

324,761

329,895

-

-

Registration of New Business ( % )

5.0

14.0

2.0

-

-

Business Dissolved ( No. )

20,121

20,380

18,161

-

-

Business Dissolved ( % )

1.9

1.3

(10.9)

-

-

Sales of New Passenger Cars (' 000 Unit )

535.1

552.2

576.7

598.4

610.3

Cellular Phone Subscribers ( Million )

35.3

38.5

43.0

43.8

-

Tourist Arrival ( Million Persons )

24.7

25.0

25.7

28.0

-

Hotel Occupancy Rate ( % )

60.6

62.4

62.6

-

-

Credit Cards Spending ( % )

15.6

12.6

-

-

-

Bad Cheque Offenders (No.)

32,627

26,982

28,876

-

-

Individual Bankruptcy ( No.)

19,167

19,575

21,984

-

-

Individual Bankruptcy ( % )

5.8

2.1

12.3

-

-

 

INDUSTRIES ( % of Growth ):

2011

2012

2013

2014*

2015**

Agriculture

5.8

1.0

2.1

3.8

3.1

Palm Oil

10.8

(0.3)

2.6

6.7

-

Rubber

6.1

(7.9)

(10.1)

(10.4)

-

Forestry & Logging

(7.6)

(4.5)

(7.8)

(4.2)

-

Fishing

2.1

4.3

1.6

2.7

-

Other Agriculture

7.1

6.4

8.2

6.2

-

Industry Non-Performing Loans ( MYR Million )

634.1

-

-

-

-

% of Industry Non-Performing Loans

3.2

-

-

-

-

Mining

(5.4)

1.4

0.9

(0.8)

2.8

Oil & Gas

(1.7)

-

-

-

-

Other Mining

-

-

-

-

-

Industry Non-performing Loans ( MYR Million )

46.5

-

-

-

-

% of Industry Non-performing Loans

0.1

-

-

-

-

Manufacturing #

4.7

4.8

3.4

6.6

5.5

Exported-oriented Industries

4.1

6.5

3.3

5.6

-

Electrical & Electronics

(4.0)

12.7

6.9

13.3

-

Rubber Products

20.7

3.0

11.7

(0.3)

-

Wood Products

(5.1)

8.7

(2.7)

5.1

-

Textiles & Apparel

13.2

(7.1)

(2.6)

11.5

-

Domestic-oriented Industries

10.7

1.7

6.8

9.4

-

Food, Beverages & Tobacco

4.80

2.70

3.60

6.13

6.13

Chemical & Chemical Products

10.0

10.8

5.6

-

-

Plastic Products

3.8

-

-

-

-

Iron & Steel

2.2

(6.6)

5.0

0.1

-

Fabricated Metal Products

21.8

13.8

9.9

2.9

-

Non-metallic Mineral

12.1

2.9

(2.0)

5.4

-

Transport Equipment

12.0

3.4

13.8

22.9

-

Paper & Paper Products

9.5

3.1

1.8

4.7

-

Crude Oil Refineries

9.3

-

-

-

-

Industry Non-Performing Loans ( MYR Million )

6,537.2

-

-

-

-

% of Industry Non-Performing Loans

25.7

-

-

-

-

Construction

4.7

18.6

10.9

12.7

10.7

Industry Non-Performing Loans ( MYR Million )

3,856.9

-

-

-

-

% of Industry Non-Performing Loans

10.2

-

-

-

-

Services

7.1

6.4

5.9

5.9

5.6

Electric, Gas & Water

3.5

4.4

4.2

3.6

3.9

Transport, Storage & Communication

6.50

7.10

7.30

7.50

7.15

Wholesale, Retail, Hotel & Restaurant

5.2

4.7

5.9

6.9

6.5

Finance, Insurance & Real Estate

6.90

9.70

3.70

4.65

4.25

Government Services

12.4

9.4

8.3

6.1

5.6

Other Services

5.1

3.9

5.1

4.8

4.5

Industry Non-Performing Loans ( MYR Million )

6,825.2

-

-

-

-

% of Industry Non-Performing Loans

23.4

-

-

-

-

* Estimate / Preliminary

** Forecast

# Based On Manufacturing Production Index



INDUSTRY ANALYSIS

 

MSIC CODE

46691 : Wholesale of industrial chemicals

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 2000, the Subject is a Private Limited company, focusing on trading in all type of chemical and food product and ingredient. Having been in the industry for over a decade, the Subject has achieved a certain market share and has built up a satisfactory reputation in the market. It should have received supports from its regular customers. Presently, the issued and paid up capital of the Subject stands at MYR 650,000. However, with a strong backing from its holding company, the Subject enjoys timely financial assistance should the needs arise.

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 small company, the Subject's business operation is supported by 15 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.

The Subject's business performance showed a reverse trend as both its turnover and pre-tax profit have decreased compared to the previous year. Return on shareholders' funds of the Subject was at an acceptable range which indicated that the management was efficient in utilising its funds to generate income. The Subject is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. Being a lowly geared company, the Subject is exposed to low financial risk as it is mainly dependent on its internal funds to finance its business needs. Given a positive net worth standing at MYR 8,532,856, the Subject should be able to maintain its business in the near terms.

Having a strong assets backing, the Subject possesses latent assets as collateral for further financial extension. Hence, it has good chance of getting loans if the needs arises. The Subject's supplier are from both the local and overseas countries. This will eliminates the risk of dependency on deliveries from a number of key suppliers and insufficient quantities of its raw materials. Overall the Subject has a good control over its resources.

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


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


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

 

 

 

PROFIT AND LOSS ACCOUNT

 

 

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

 

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

FULL

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

32,981,246

44,817,503

37,643,854

27,022,479

22,515,254

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

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

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

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

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

Total Turnover

32,981,246

44,817,503

37,643,854

27,022,479

22,515,254

Costs of Goods Sold

(27,489,374)

(38,563,180)

(32,064,781)

(22,831,330)

(19,306,564)

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

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

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

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

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

Gross Profit

5,491,872

6,254,323

5,579,073

4,191,149

3,208,690

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

1,345,457

2,009,552

1,809,327

1,451,397

922,061

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

1,345,457

2,009,552

1,809,327

1,451,397

922,061

Taxation

(357,453)

(546,206)

(492,094)

(387,854)

(230,715)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

988,004

1,463,346

1,317,233

1,063,543

691,346

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

7,096,352

5,633,007

4,315,774

3,327,231

2,635,885

Prior year adjustment

-

(1)

-

-

-

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

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

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

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

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

As restated

7,096,352

5,633,006

4,315,774

3,327,231

2,635,885

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

8,084,356

7,096,352

5,633,007

4,390,774

3,327,231

DIVIDENDS - Ordinary (paid & proposed)

(201,500)

-

-

(75,000)

-

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

7,882,856

7,096,352

5,633,007

4,315,774

3,327,231

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Bank overdraft

425

2,238

-

-

1,282

Bankers' acceptance

48,783

114,109

231,044

173,049

98,854

Hire purchase

13,585

15,804

17,810

15,205

15,777

Term loan / Borrowing

71,741

93,312

50,524

34,041

46,636

Trust receipts

-

-

-

4,754

18,917

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

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

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

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

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

134,534

225,463

299,378

227,049

181,466

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

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

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

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

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

DEPRECIATION (as per notes to P&L)

195,671

171,062

196,520

172,160

122,800

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

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

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

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

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

195,671

171,062

196,520

172,160

122,800

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

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

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

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

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

 

 


BALANCE SHEET

 

 

 

 

ASSETS EMPLOYED:

FIXED ASSETS

2,335,419

2,239,621

2,296,800

543,078

392,818

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

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

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

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

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

TOTAL LONG TERM ASSETS

2,335,419

2,239,621

2,296,800

543,077

392,818

Stocks

6,510,760

5,536,963

5,661,038

4,500,354

2,940,937

Trade debtors

5,360,465

9,078,980

10,008,797

6,128,746

4,946,228

Other debtors, deposits & prepayments

491,153

1,082,642

346,480

501,927

336,481

Short term deposits

2,130,110

1,889,152

1,664,995

643,364

637,576

Amount due from holding company

109,554

57,100

48,191

179,852

14,359

Amount due from director

-

121,000

121,000

100,000

130,000

Cash & bank balances

613,105

1,251,369

420,280

44,588

225,323

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

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

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

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

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

TOTAL CURRENT ASSETS

15,215,147

19,017,206

18,270,781

12,098,831

9,230,904

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

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

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

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

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

TOTAL ASSET

17,550,566

21,256,827

20,567,581

12,641,908

9,623,722

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

954,628

873,547

1,338,686

1,304,775

705,819

Other creditors & accruals

1,370,681

1,320,973

3,592,429

907,410

1,026,190

Hire purchase & lease creditors

33,897

95,362

98,868

118,870

95,118

Bank overdraft

-

-

37,473

387,922

-

Short term borrowings/Term loans

4,658,714

8,851,517

430,272

249,366

321,012

Other borrowings

-

-

5,381,954

2,503,742

1,467,370

Amounts owing to holding company

23,540

175,989

1,271,513

1,256,046

896,862

Amounts owing to director

435,000

285,000

295,000

308,000

400,000

Provision for taxation

359,728

549,684

492,763

375,958

236,456

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

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

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

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

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

TOTAL CURRENT LIABILITIES

7,836,188

12,152,072

12,938,958

7,412,088

5,148,827

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

7,378,959

6,865,134

5,331,823

4,686,743

4,082,077

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

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

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

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

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

TOTAL NET ASSETS

9,714,378

9,104,755

7,628,623

5,229,820

4,474,895

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

650,000

650,000

300,000

300,000

300,000

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

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

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

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

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

TOTAL SHARE CAPITAL

650,000

650,000

300,000

300,000

300,000

Retained profit/(loss) carried forward

7,882,856

7,096,352

5,633,007

4,315,774

3,327,231

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

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

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

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

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

TOTAL RESERVES

7,882,856

7,096,352

5,633,006

4,315,774

3,327,231

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

8,532,856

7,746,352

5,933,006

4,615,774

3,627,231

Long term loans

1,113,965

1,254,674

1,566,007

384,900

607,172

Hire purchase creditors

51,259

85,156

107,558

206,426

229,668

Deferred taxation

16,298

18,573

22,052

22,721

10,824

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

1,181,522

1,358,403

1,695,617

614,046

847,664

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

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

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

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

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

9,714,378

9,104,755

7,628,623

5,229,820

4,474,895

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

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

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

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

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

 

 

FINANCIAL RATIO

 

 

 

 

TYPES OF FUNDS

Cash

2,743,215

3,140,521

2,085,275

687,952

862,899

Net Liquid Funds

2,743,215

3,140,521

2,047,802

300,030

862,899

Net Liquid Assets

868,199

1,328,171

(329,215)

186,389

1,141,140

Net Current Assets/(Liabilities)

7,378,959

6,865,134

5,331,823

4,686,743

4,082,077

Net Tangible Assets

9,714,378

9,104,755

7,628,623

5,229,820

4,474,895

Net Monetary Assets

(313,323)

(30,232)

(2,024,832)

(427,657)

293,476

BALANCE SHEET ITEMS

Total Borrowings

5,857,835

10,286,709

7,622,132

3,851,226

2,720,340

Total Liabilities

9,017,710

13,510,475

14,634,575

8,026,134

5,996,491

Total Assets

17,550,566

21,256,827

20,567,581

12,641,908

9,623,722

Net Assets

9,714,378

9,104,755

7,628,623

5,229,820

4,474,895

Net Assets Backing

8,532,856

7,746,352

5,933,006

4,615,774

3,627,231

Shareholders' Funds

8,532,856

7,746,352

5,933,006

4,615,774

3,627,231

Total Share Capital

650,000

650,000

300,000

300,000

300,000

Total Reserves

7,882,856

7,096,352

5,633,006

4,315,774

3,327,231

LIQUIDITY (Times)

Cash Ratio

0.35

0.26

0.16

0.09

0.17

Liquid Ratio

1.11

1.11

0.97

1.03

1.22

Current Ratio

1.94

1.56

1.41

1.63

1.79

WORKING CAPITAL CONTROL (Days)

Stock Ratio

72

45

55

61

48

Debtors Ratio

59

74

97

83

80

Creditors Ratio

13

8

15

21

13

SOLVENCY RATIOS (Times)

Gearing Ratio

0.69

1.33

1.28

0.83

0.75

Liabilities Ratio

1.06

1.74

2.47

1.74

1.65

Times Interest Earned Ratio

11.00

9.91

7.04

7.39

6.08

Assets Backing Ratio

14.95

14.01

25.43

17.43

14.92

PERFORMANCE RATIO (%)

Operating Profit Margin

4.08

4.48

4.81

5.37

4.10

Net Profit Margin

3.00

3.27

3.50

3.94

3.07

Return On Net Assets

15.24

24.55

27.64

32.09

24.66

Return On Capital Employed

15.18

24.29

27.16

29.26

24.15

Return On Shareholders' Funds/Equity

11.58

18.89

22.20

23.04

19.06

Dividend Pay Out Ratio (Times)

0.20

0.00

0.00

0.07

0.00

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

0

0

0

 


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.64.20

UK Pound

1

Rs.100.03

Euro

1

Rs.71.91

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

VNT

 

               

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.