MIRA INFORM REPORT

 

 

Report No. :

321806

Report Date :

15.05.2015

 

IDENTIFICATION DETAILS

 

Name :

FASPRINT TEXTILE PRINTING SDN. BHD.

 

 

Registered Office :

190, Jalan Tembikai, Taman Padang Lallang, Padang Lallang, 1st Floor, 14000 Bukit Mertajam, Pulau Pinang

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2013

 

 

Date of Incorporation :

30.05.1994

 

 

Com. Reg. No.:

302160-A

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Textiles printing services.

 

 

No. of Employee :

30 [2015]

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ca

 

RATING

STATUS

PROPOSED CREDIT LINE

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

 

Status :

Moderate

 

 

Payment Behaviour :

Slow

 

 

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 healthyFOREIGN EXCHANGEhttps://cdncache-a.akamaihd.net/items/it/img/arrow-10x10.png 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.

:

302160-A

COMPANY NAME

:

FASPRINT TEXTILE PRINTING SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

30/05/1994

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

190, JALAN TEMBIKAI, TAMAN PADANG LALLANG, PADANG LALLANG, 1ST FLOOR, 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.

BUSINESS ADDRESS

:

1059, JALAN LIMA, MACHANG BUBOK, 14020 PULAU PINANG, PULAU PINANG, MALAYSIA.

TEL.NO.

:

04-5512388

FAX.NO.

:

04-5516388

CONTACT PERSON

:

HOE CHIEW SENG ( DIRECTOR )

INDUSTRY CODE

:

13

PRINCIPAL ACTIVITY

:

TEXTILES PRINTING SERVICES

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

SALES

:

MYR 2,142,297 [2013]

NET WORTH

:

MYR 128,111 [2013]

STAFF STRENGTH

:

30 [2015]

BANKER (S)

:

BANK PEMBANGUNAN MALAYSIA BHD
BANK PERUSAHAAN KECIL & SEDERHANA MALAYSIA BHD
MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

POOR

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

N/A

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) textiles printing services.

 

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

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

30/06/2014

MYR 1,000,000.00

MYR 1,000,000.00

07/06/1994

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

(%)

MR. HOE CHIEW SENG +

1059, JALAN 5, MACHANG BUBOK, 14020 PULAU PINANG, PULAU PINANG, MALAYSIA.

670213-07-5157 A0611618

600,000.00

60.00

MR. HOE CHIEW HENG +

1059, JALAN 5, MACHANG BUBOK, BUKIT MERTAJAM, 14020 PULAU PINANG, PULAU PINANG, MALAYSIA.

570226-07-5879

400,000.00

40.00

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

------

1,000,000.00

100.00

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

=====

+ Also Director

 

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. HOE CHIEW HENG

Address

:

1059, JALAN 5, MACHANG BUBOK, BUKIT MERTAJAM, 14020 PULAU PINANG, PULAU PINANG, MALAYSIA.

New IC No

:

570226-07-5879

Date of Birth

:

26/02/1957

Nationality

:

MALAYSIAN

Date of Appointment

:

30/05/1994

 

DIRECTOR 2

 

Name Of Subject

:

MR. HOE CHIEW SENG

Address

:

1059, JALAN 5, MACHANG BUBOK, 14020 PULAU PINANG, PULAU PINANG, MALAYSIA.

IC / PP No

:

A0611618

New IC No

:

670213-07-5157

Date of Birth

:

13/02/1967

Nationality

:

MALAYSIAN

Date of Appointment

:

30/05/1994



MANAGEMENT

 

 

 

1)

Name of Subject

:

HOE CHIEW SENG

Position

:

DIRECTOR

 

 

 

AUDITOR

 

Auditor

:

LKH & ASSOCIATES

Auditor' Address

:

190, JALAN TEMBIKAI, TAMAN PADANG LALLANG, PADANG LALLANG, 2ND FLOOR, 14000 BUKIT MERTAJAM, PULAU PINANG, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. GOH SIEW SIEW

IC / PP No

:

A0870280

New IC No

:

680125-02-5028

Address

:

3-09, PANGSAPURI MELUR, JALAN MELUR, 12300 BUTTERWORTH, PULAU PINANG, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

BANK PEMBANGUNAN MALAYSIA BHD

 

2)

Name

:

BANK PERUSAHAAN KECIL & SEDERHANA MALAYSIA BHD

 

3)

Name

:

MALAYAN BANKING BHD

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

2

30/10/1996

N/A

BANK PERUSAHAAN KECIL & SEDERHANA MALAYSIA BHD

MYR 1,600,000.00

Satisfied

1

13/01/1997

N/A

MALAYAN BANKING BHD

MYR 100,000.00

Satisfied

3

26/06/1998

N/A

BANK PEMBANGUNAN MALAYSIA BERHAD

MYR 320,000.00

Satisfied

 

 

LITIGATION CHECK AGAINST SUBJECT


* A check has been conducted in our databank againt the Subject whether the Subject has been involved in any litigation. Our databank consists of 99% of the wound up companies in Malaysia.

No legal action was found in our databank.

No winding up petition was found in our databank.

 

DEFAULTER CHECK AGAINST SUBJECT


* We have checked through the Subject in our defaulters' database which comprised of debtors that have been blacklisted by our customers and debtors that have been placed or assigned to us for collection.

No blacklisted record & debt collection case was found in our defaulters' databank.

 

PAYMENT RECORD

 

 

 

SOURCES OF RAW MATERIALS:

Local

:

YES

Overseas

:

YES



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

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

]

Average 61-90 Days

[

]

Fair 91-120 Days

[

]

Poor >120 Days

[

X

]

 

 

CLIENTELE

 

Local

:

N/A

Overseas

:

N/A


The Subject refused to disclose its clientele.

 

 

OPERATIONS

 

Services

:

TEXTILES PRINTING

Member(s) / Affiliate(s)

:

SMALL & MEDIUM ENTERPRISE

 

Total Number of Employees:

 

YEAR

2015

2013

2011

2010

GROUP

N/A

N/A

N/A

N/A

COMPANY

30

20

20

20

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) textiles printing services.

The Subject refused to disclose its operation.

 

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

045512388 / 204 5513388

Current Telephone Number

:

04-5512388

Match

:

YES

Address Provided by Client

:

1059, JALAN LIMA, MACHANG BUBOK,14020,BUKIT MERTAJAM,PULAU PINANG.

Current Address

:

1059, JALAN LIMA, MACHANG BUBOK, 14020 PULAU PINANG, PULAU PINANG, MALAYSIA.

Match

:

YES

Latest Financial Accounts

:

YES

 

Other Investigations


On 12th May 2015 we contacted one of the staff from the Subject and he provided limited information.


FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Decreased

[

2009 - 2013

]

Profit/(Loss) Before Tax

:

Increased

[

2009 - 2013

]

Return on Shareholder Funds

:

Unfavourable

[

(149.86%)

]

Return on Net Assets

:

Unfavourable

[

(91.39%)

]

The continuous fall in turnover could be due to the lower demand for the Subject's products / services.Higher losses before tax during the year could be due to the higher operating costs incurred. The Subject's unfavourable returns on shareholders' funds indicate the management's inefficiency in utilising its assets to generate returns.

Working Capital Control

Stock Ratio

:

Favourable

[

51 Days

]

Debtor Ratio

:

Favourable

[

35 Days

]

Creditors Ratio

:

Unfavourable

[

313 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 unfavourable creditors' ratio could be due to the Subject taking advantage of the credit granted by its suppliers. However this may affect the goodwill between the Subject and its suppliers and the Subject may inadvertently have to pay more for its future supplies.

Liquidity

Liquid Ratio

:

Unfavourable

[

0.16 Times

]

Current Ratio

:

Unfavourable

[

0.31 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

[

(57.46 Times)

]

Gearing Ratio

:

Unfavourable

[

1.57 Times

]

The Subject incurred losses in the year. It did not generate sufficient income to service its interest.  If the situation does not improve, the Subject may be vulnerable to default in servicing the interest. The Subject was highly geared, thus it had a high financial risk. The Subject was dependent on loans to finance its business needs. In times of economic downturn and / or high interest rate, the Subject will become less profitable and competitive than other firms in the same industry, which are lowly geared. This is because the Subject has to service the interest and to repay the loan, which will erode part of its profits. The profits will fluctuate depending on the Subject's turnover and the interest it needs to pay.

Overall Assessment :

The Subject's losses could be attributed to the lower turnover which in turn could be the result of unfavourable market conditions. Due to its weak liquidity position, the Subject will be faced with problems in meeting all its short term obligations if no short term loan is obtained or additional capital injected into the Subject. The Subject's interest cover was negative, indicating that it did not generate sufficient income to service its interest. If its result does not show impressive improvements or succeed obtaining short term financing or capital injection, it may not be able to service its interest and repay the loans. The Subject's gearing level was high and its going concern will be in doubt if there is no injection of additional shareholders' funds in times of economic downturn and / or high interest rates.

Overall financial condition of the Subject : 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

13 : MANUFACTURE OF TEXTILES

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 1994, the Subject is a Private Limited company, focusing on textiles printing services. The Subject has been in business for over two decades. It has built up a strong clientele base and satisfactory reputation will enable the Subject to further enhance its business in the near term. The Subject is expected to enjoy a stable market shares. A paid up capital of MYR 1,000,000 allows the Subject to expand its business more comfortably. However, the Subject does not have strong shareholders’ backing. Without a strong shareholders' backing, the opportunity of the Subject to expand its business is limited.

Being a small company, the Subject's business operation is supported by 30 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.

Due to the challenging market conditions, the Subject's business performance seems to be deteriorating and losses incurred. 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.

Without a strong assets backing, the Subject may face difficulties in getting loans for its future expansion and continued growth . 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 poor payment habit may affect the goodwill between the Subject and its suppliers and the Subject may inadvertently have to pay more for its future supplies.

The industry shows an upward trend and this trend is very likely to sustain in the near terms.

Based on the above unfavourable condition, we regard granting credit to the Subject to be quite risky. Hence, credit is not recommended.

 



 

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

SUMMARY

SUMMARY

SUMMARY

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

2,142,297

2,398,247

2,443,453

2,452,869

2,792,403

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

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

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

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

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

Total Turnover

2,142,297

2,398,247

2,443,453

2,452,869

2,792,403

Costs of Goods Sold

(1,832,639)

(1,991,904)

-

-

-

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

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

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

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

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

Gross Profit

309,658

406,343

-

-

-

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

(191,981)

(50,313)

(224,782)

(133,975)

(175,476)

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

(191,981)

(50,313)

(224,782)

(133,975)

(175,476)

Taxation

-

10,630

35,286

20,905

13,624

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

(191,981)

(39,683)

(189,496)

(113,070)

(161,852)

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

(679,908)

(640,225)

(450,729)

(337,659)

(175,807)

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

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

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

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

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

As restated

(679,908)

(640,225)

(450,729)

(337,659)

(175,807)

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

(871,889)

(679,908)

(640,225)

(450,729)

(337,659)

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

(871,889)

(679,908)

(640,225)

(450,729)

(337,659)

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Bank overdraft

30

32

-

-

-

Hire purchase

3,254

-

-

-

-

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

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

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

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

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

3,284

32

-

-

-

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

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

-

-

-

DEPRECIATION (as per notes to P&L)

280,001

292,559

-

-

-

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

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

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

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

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

280,001

292,559

-

-

-

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

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

 

 

 

BALANCE SHEET

 

 

 

ASSETS EMPLOYED:

FIXED ASSETS

1,561,432

1,437,862

1,726,453

1,368,404

1,310,330

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

-

-

-

0

-

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

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

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

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

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

TOTAL LONG TERM ASSETS

1,561,432

1,437,862

1,726,453

1,368,404

1,310,330

Stocks

298,958

20,670

-

-

-

Trade debtors

205,343

405,730

-

-

-

Other debtors, deposits & prepayments

100,245

80,245

-

-

-

Cash & bank balances

4,406

25,901

-

-

-

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

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

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

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

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

TOTAL CURRENT ASSETS

608,952

532,546

698,957

778,384

1,232,624

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

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

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

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

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

TOTAL ASSET

2,170,384

1,970,408

2,425,410

2,146,788

2,542,954

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

1,570,915

1,374,043

-

-

-

Other creditors & accruals

225,118

210,883

-

-

-

Short term borrowings/Term loans

122,987

-

-

-

-

Amounts owing to director

28,094

48,585

-

-

-

Provision for taxation

16,805

16,805

-

-

-

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

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

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

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

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

TOTAL CURRENT LIABILITIES

1,963,919

1,650,316

2,055,005

1,551,601

1,812,105

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

(1,354,967)

(1,117,770)

(1,356,048)

(773,217)

(579,481)

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

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

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

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

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

TOTAL NET ASSETS

206,465

320,092

370,405

595,187

730,849

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

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

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

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

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

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

TOTAL SHARE CAPITAL

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

Retained profit/(loss) carried forward

(871,889)

(679,908)

(640,225)

(450,729)

(337,659)

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

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

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

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

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

TOTAL RESERVES

(871,889)

(679,908)

(640,225)

(450,729)

(337,659)

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

128,111

320,092

359,775

549,271

662,341

Other long term borrowings

78,354

-

-

-

-

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

78,354

-

10,630

45,916

68,508

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

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

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

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

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

206,465

320,092

370,405

595,187

730,849

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

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

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

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

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

 

 

 

FINANCIAL RATIO

 

 

 

TYPES OF FUNDS

Cash

4,406

25,901

-

-

-

Net Liquid Funds

4,406

25,901

-

-

-

Net Liquid Assets

(1,653,925)

(1,138,440)

(1,356,048)

(773,217)

(579,481)

Net Current Assets/(Liabilities)

(1,354,967)

(1,117,770)

(1,356,048)

(773,217)

(579,481)

Net Tangible Assets

206,465

320,092

370,405

595,187

730,849

Net Monetary Assets

(1,732,279)

(1,138,440)

(1,366,678)

(819,133)

(647,989)

BALANCE SHEET ITEMS

Total Borrowings

201,341

0

-

-

-

Total Liabilities

2,042,273

1,650,316

2,065,635

1,597,517

1,880,613

Total Assets

2,170,384

1,970,408

2,425,410

2,146,788

2,542,954

Net Assets

206,465

320,092

370,405

595,187

730,849

Net Assets Backing

128,111

320,092

359,775

549,271

662,341

Shareholders' Funds

128,111

320,092

359,775

549,271

662,341

Total Share Capital

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

Total Reserves

(871,889)

(679,908)

(640,225)

(450,729)

(337,659)

LIQUIDITY (Times)

Cash Ratio

0.00

0.02

-

-

-

Liquid Ratio

0.16

0.31

-

-

-

Current Ratio

0.31

0.32

0.34

0.50

0.68

WORKING CAPITAL CONTROL (Days)

Stock Ratio

51

3

-

-

-

Debtors Ratio

35

62

-

-

-

Creditors Ratio

313

252

-

-

-

SOLVENCY RATIOS (Times)

Gearing Ratio

1.57

0.00

-

-

-

Liabilities Ratio

15.94

5.16

5.74

2.91

2.84

Times Interest Earned Ratio

(57.46)

(1,571.28)

-

-

-

Assets Backing Ratio

0.21

0.32

0.37

0.60

0.73

PERFORMANCE RATIO (%)

Operating Profit Margin

(8.96)

(2.10)

(9.20)

(5.46)

(6.28)

Net Profit Margin

(8.96)

(1.65)

(7.76)

(4.61)

(5.80)

Return On Net Assets

(91.39)

(15.71)

(60.69)

(22.51)

(24.01)

Return On Capital Employed

(91.39)

(15.71)

(60.69)

(22.51)

(24.01)

Return On Shareholders' Funds/Equity

(149.86)

(12.40)

(52.67)

(20.59)

(24.44)

Dividend Pay Out Ratio (Times)

0.00

0.00

-

-

-

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.63.84

UK Pound

1

Rs.100.65

Euro

1

Rs.72.88

 

 

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.