MIRA INFORM REPORT

 

 

Report No. :

349193

Report Date :

13.11.2015

 

IDENTIFICATION DETAILS

 

Name :

SEGAMAT PANEL BOARDS SDN. BHD.

 

 

Registered Office :

Suite 6.1a, Menara Pelangi, Jalan Kuning, Taman Pelangi, Level 6, 80400 Johor Bahru, Johor

 

 

Country :

Malaysia

 

 

Financials (as on) :

30.06.2014

 

 

Date of Incorporation :

09.08.2001

 

 

Com. Reg. No.:

555843-X

 

 

Legal Form :

Private Limited (Limited By Share)

 

 

Line of Business :

Subject is engaged in the manufacturer of medium density fiberboard (mdf) and related products.

 

 

No. of Employees :

160

 

 

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. Malaysia is vulnerable to a fall in world commodity prices or a general slowdown in global economic activity.

The NAJIB administration 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. Gross exports of goods and services constitute more than 80% of GDP. The oil and gas sector supplied about 29% of government revenue in 2014. 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 trying to lessen its dependence on state oil producer Petronas.

Bank Negara Malaysia (the central bank) maintains healthy foreign exchange reserves; a well-developed regulatory regime has limited Malaysia's exposure to riskier financial instruments and the global financial crisis. In order to attract increased investment, NAJIB 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.

:

555843-X

COMPANY NAME

:

SEGAMAT PANEL BOARDS SDN. BHD.

FORMER NAME

:

IMMEDIATE EXPANSION SDN BHD (31/07/2002)

INCORPORATION DATE

:

09/08/2001

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED (LIMITED BY SHARE)

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

SUITE 6.1A, MENARA PELANGI, JALAN KUNING, TAMAN PELANGI, LEVEL 6, 80400 JOHOR BAHRU, JOHOR, MALAYSIA.

BUSINESS ADDRESS

:

PLOT 201, KAWASAN PERINDUSTRIAN SEGAMAT II, MUKIM POGOH, 85000 SEGAMAT, JOHOR, MALAYSIA.

TEL.NO.

:

07-9279989

FAX.NO.

:

07-9270098

WEB SITE

:

WWW.SPB.COM.MY

CONTACT PERSON

:

SHIGETOYO TAKEUCHI ( DIRECTOR )

INDUSTRY CODE

:

16212

PRINCIPAL ACTIVITY

:

MANUFACTURER OF MEDIUM DENSITY FIBERBOARD (MDF) AND RELATED PRODUCTS

AUTHORISED CAPITAL

:

MYR 5,000,000.00 DIVIDED INTO 
ORDINARY SHARE 5,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 2,500,000.00 DIVIDED INTO 
ORDINARY SHARES 2,500,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 56,441,257 [2014]

NET WORTH

:

MYR 38,387,129 [2014]

STAFF STRENGTH

:

160 [2015]

BANKER (S)

:

AMBANK (M) BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

AVERAGE

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) manufacturer of medium density fiberboard (mdf) and related products.

 

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

 

The immediate holding company of the Subject is KAZO TRADING PTE LTD, a company incorporated in SINGAPORE.

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

18/12/2014

MYR 5,000,000.00

MYR 2,500,000.00

09/08/2001

MYR 100,000.00

MYR 2.00

 

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

 

Current Shareholder(s) :

Name

Address

IC/PP/Loc No

Shareholding

(%)

KAZO TRADING PTE LTD

237, ALEXANDRA ROAD, 06-01, THE ALEXCIER, 159929, SINGAPORE.

199003365G

2,500,000.00

100.00

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

------

2,500,000.00

100.00

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

=====

+ Also Director

 

Former Shareholder(s) :

Name

Country

IC/PP/Loc No

Shareholding

Last Updated

TAKESHI SAKAKIBARA

MALAYSIA

MZ6076006

N/A

N/A

 

 

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

SHIGETOYO TAKEUCHI

Address

:

87, CASHEW ROAD, 06-03 CASHEW HEIGHTS, 679658, SINGAPORE.

IC / PP No

:

MZ0549633

Nationality

:

SINGAPOREAN

Date of Appointment

:

18/09/2002

 

DIRECTOR 2

 

Name Of Subject

:

KOICHI SAITO

Address

:

50, JALAN MUTIARA EMAS 2/7, TAMAN MOUNT AUSTIN, 81100 JOHOR BAHRU, JOHOR, MALAYSIA.

IC / PP No

:

TZ0460782

Nationality

:

JAPANESE

Date of Appointment

:

15/09/2005

 

DIRECTOR 3

 

Name Of Subject

:

HANS PETER FITCH

Address

:

C-12-1, MENARA BINTANG GOLDHILL, JALAN TUN RAZAK, 50450 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

761319902

Nationality

:

BRITISH

Date of Appointment

:

18/09/2002



MANAGEMENT

 

 

1)

Name of Subject

:

SHIGETOYO TAKEUCHI

Position

:

DIRECTOR

 

 

 

 

 

 

 

 

 

AUDITOR

 

Auditor

:

BDO

Auditor' Address

:

BDO @ MENARA CENTARA, 360 JALAN TUANKU ABDUL RAHMAN, LEVEL 8, 50100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

 

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. LEONG SIEW FOONG

IC / PP No

:

A0828311

New IC No

:

671205-10-5330

Address

:

3, JALAN BAYAM, TAMAN KOTA BESAR, 81900 KOTA TINGGI, JOHOR, MALAYSIA.

 

 

 

 

 

 

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

AMBANK (M) BHD

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

28/03/2011

DEED OF ASSIGNMENT

AMBANK (M) BERHAD

MYR 8,000,000.00

Unsatisfied

2

09/07/2015

N/A

AMBANK (M) BERHAD

-

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



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

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

]

Average 61-90 Days

[

X

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]

 

 

CLIENTELE

 

Local

:

YES

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Export Market

:

ASIA

EUROPE

MIDDLE EAST

Credit Term

:

30 DAYS

Payment Mode

:

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

 

 

OPERATIONS

 

Products manufactured

:

MEDIUM DENSITY FIBERBOARD (MDF) AND RELATED PRODUCTS

Competitor(s)

:

JAYAKUIK SDN BHD

Ownership of premises

:

OWNED

 

Total Number of Employees:

 

YEAR

2015

2014

2013

2010


GROUP

N/A

N/A

N/A

N/A

COMPANY

160

150

150

174

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) manufacturer of medium density fiberboard (mdf) and related products. 

The Subject's core business is to produce high quality wood based thin panels (MDF and Particleboard), with a choice of thickness and sizes.

The Subject's management is made up of an experienced team in MDF manufacturing. 


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

07-9279989

Match

:

N/A

Address Provided by Client

:

PLOT 201, KAWASAN PERINDUSTRIAN SEGAMAT II, MUKIM POGOH,85000,SEGAMAT,JOHOR.

Current Address

:

PLOT 201, KAWASAN PERINDUSTRIAN SEGAMAT II, MUKIM POGOH, 85000 SEGAMAT, JOHOR, MALAYSIA.

Match

:

YES

Latest Financial Accounts

:

YES

 

Other Investigations


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


FINANCIAL ANALYSIS

 

Profitability

Turnover

:

Decreased

[

2010 - 2014

]

Profit/(Loss) Before Tax

:

Increased

[

2010 - 2014

]

Return on Shareholder Funds

:

Unfavourable

[

(11.73%)

]

Return on Net Assets

:

Unfavourable

[

(7.05%)

]

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

[

50 Days

]

Debtor Ratio

:

Favourable

[

33 Days

]

Creditors Ratio

:

Favourable

[

50 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

[

0.14 Times

]

Current Ratio

:

Unfavourable

[

0.26 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

[

(5.09 Times)

]

Gearing Ratio

:

Favourable

[

0.15 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 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'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 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 : 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

3.2

4.0

Unemployment Rate

3.3

3.2

3.0

2.9

3.0

Net International Reserves ( MYR Billion )

415

427

-

417

-

Average Risk-Weighted Capital Adequacy Ratio ( % )

3.50

2.20

-

4.00

-

Average 3 Months of Non-performing Loans ( % )

14.80

14.70

-

-

-

Average Base Lending Rate ( % )

6.60

6.53

6.53

6.85

-

Business Loans Disbursed( % )

15.3

32.2

-

56.0

-

Foreign Investment ( MYR Million )

23,546.1

26,230.4

38,238.0

43,486.6

-

Consumer Loans ( % )

-

-

-

-

-

Registration of New Companies ( No. )

45,455

45,441

46,321

49,144

-

Registration of New Companies ( % )

3.0

(0.0)

1.9

6.1

-

Liquidation of Companies ( No. )

132,485

17,092

26,430

21,753

-

Liquidation of Companies ( % )

417.8

(87.1)

54.6

(17.7)

-

Registration of New Business ( No. )

284,598

324,761

329,895

332,723

-

Registration of New Business ( % )

5.0

14.0

2.0

1.0

-

Business Dissolved ( No. )

20,121

20,380

18,161

21,436

-

Business Dissolved ( % )

1.9

1.3

(10.9)

18.0

-

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

63.2

-

Credit Cards Spending ( % )

15.6

12.6

-

13.5

-

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)

-

-

3.0

-

Other Mining

-

-

-

46.6

-

Industry Non-performing Loans ( MYR Million )

46.5

-

-

-

-

% of Industry Non-performing Loans

0.1

-

-

-

-

Manufacturing #

4.7

4.8

3.4

6.4

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

1.4

-

Plastic Products

3.8

-

-

2.7

-

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

-

-

13.0

-

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

 

16212 : Manufacture of particle board and fibreboard

INDUSTRY :

MANUFACTURING

The manufacturing sector is expected to grow by 5.5% in 2015. It will be bolstered by strong domestic and export-oriented industries in line with growing investment activities and favorable external demand. Moreover, in 2014, the manufacturing sectors have spearheading growth. The manufacturing sector is estimated to grow at a faster pace in 2014 on higher exports of electronics and electrical (E&E) products as external demand improves.

The manufacturing sector expanded strongly during the first half of 2014, the highest growth in three years, spurred by higher global semiconductor sales. Value-added of the manufacturing sector expanded 7.1% during the first half of 2014. Production of the sector rose 6.6% in the first seven months of 2014 supported by resilient domestic demand and recovery in the external sector during the first seven months of the years. The sales value of manufactured products rebounded by 7.7% in the first seven months of 2014. The strong performance of the sector was on account of higher output at 9.4% from the domestic-oriented industries, particularly transport equipment, food and beverage.

The manufacturing sector continued to attract domestic and foreign investment with investment approved by Malaysian Investment Development Authority (MIDA) totaling RM47.4 billion during the first six months of 2014, mainly from Japan, China and Germany. Meanwhile, the capacity utilization rate remained steady at 80.4% during the second quarter of 2014 while average wage per employee and productivity improved to RM2,772 per month and 5.9%, respectively during the first seven months of 2014. Boosted by favorable domestic economic activity and recovery in the external sector, the manufacturing sector is expected to record a better performance with growth of 6.4% in 2014.

In the meantime, production of wood products rebounded by 5.1% largely supported by higher output in the saw-milling and planning of wood segment at 25.9% during the first seven months of 2014. The positive performance was attributed to vibrant residential and commercial construction activities which contributed to increased use of timber frame and glued laminated timber for cost savings compared to the use of concrete and steel. Increased demand from major export destination such as the US, Japan and Australia for Malaysian made furniture contributed to the higher output, particularly wooden and cane furniture which rebounded by 2.2%.

Production of rubber products contracted 0.3% in the first seven months of 2014 on account of slower demand for rubber gloves and rubber tyres. The decline in rubber tyres for vehicles was due to the weaker external demand from the automotive industry, particularly from China. Output of other rubber products contracted 3.8% following the product shift from rubber-based to plastics, silicones and metal alloys in the manufacture of medical devices.

Besides, exports of manufactured products are expected to grow 6.1% in 2014 boosted by the growing demand from advanced economies. However, during the first seven months of 2014, manufactured exports surged 11.4%. The robust growth was buoyed by strengthening demand in the US and EU, reflecting significant exposure of Malaysian exports to the economic performance in the advance economies. The strength in export was broad-based with robust growth in both E&E and non- E&E subsectors.

Under budget 2015, the Government will provide incentive in the form of capital allowance on automation expenditure to encourage automation in the manufacturing sector, which may help in the manufacturing sector.

OVERALL INDUSTRY OUTLOOK : Average Growth



CREDIT RISK EVALUATION & RECOMMENDATION

 


Incorporated in 2001, the Subject is a Private Limited company, focusing on manufacturer of medium density fiberboard (mdf) and related products. With its long establishment in the market, the Subject has received strong support from its stable customers base. Its business position in the market is quite stable and it is expected to enjoy better market shares over its rivals. A paid up capital of MYR 2,500,000 allows the Subject to expand its business more comfortably. 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. The Subject is a fairly large and rapidly growing company with over 160 staff in its operations Overall, we regard that the Subject's management capability is average. This indicates that the Subject has greater potential to improve its business performance and raising income for the Subject. 

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. 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 38,387,129, the Subject should be able to maintain its business in the near terms. 

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

The Subject's payment habit is average. With its adequate working capital, the Subject should be able to pay its short term debts. 

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

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

 



PROFIT AND LOSS ACCOUNT

 

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

SEGAMAT PANEL BOARDS SDN. BHD.

 

Financial Year End

2014-06-30

2013-06-30

2012-06-30

2011-06-30

2010-06-30

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

56,441,257

61,461,904

69,801,926

62,764,673

62,134,961

Other Income

104,428

1,068,928

167,141

2,190,322

2,004,058

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

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

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

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

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

Total Turnover

56,545,685

62,530,832

69,969,067

64,954,995

64,139,019

Costs of Goods Sold

(46,013,790)

(50,638,596)

(51,140,475)

(45,254,223)

(46,010,386)

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

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

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

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

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

Gross Profit

10,531,895

11,892,236

18,828,592

19,700,772

18,128,633

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

(4,501,225)

(3,691,456)

377,126

1,798,257

1,941,653

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

(4,501,225)

(3,691,456)

377,126

1,798,257

1,941,653

Taxation

-

(1,097)

(154,774)

60,530

1,139,152

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

(4,501,225)

(3,692,553)

222,352

1,858,787

3,080,805

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

40,388,354

44,080,907

43,858,555

41,905,575

38,824,770

Prior year adjustment

-

-

-

94,193

-

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

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

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

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

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

As restated

40,388,354

44,080,907

43,858,555

41,999,768

38,824,770

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

35,887,129

40,388,354

44,080,907

43,858,555

41,905,575

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

35,887,129

40,388,354

44,080,907

43,858,555

41,905,575

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Hire purchase

-

-

-

952

1,429

Loan from holding company

118,023

109,000

947,669

138,883

-

Others

620,949

611,949

(752,295)

797,209

-

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

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

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

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

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

738,972

720,949

195,374

937,044

1,429

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

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

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

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

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

DEPRECIATION (as per notes to P&L)

7,431,003

7,470,476

5,627,092

4,953,533

5,864,309

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

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

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

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

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

7,431,003

7,470,476

5,627,092

4,953,533

5,864,309

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

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

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

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

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

 

 

 

 

 

 

 

 

BALANCE SHEET

 

SEGAMAT PANEL BOARDS SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

101,010,421

107,188,768

113,778,764

111,720,879

100,406,091

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

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

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

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

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

TOTAL LONG TERM ASSETS

101,010,421

107,188,768

113,778,764

111,720,879

100,406,091

Stocks

7,664,820

5,935,529

7,089,717

4,691,257

3,797,094

Trade debtors

5,075,135

2,101,821

2,972,398

2,144,991

3,186,562

Other debtors, deposits & prepayments

811,691

876,144

1,302,449

1,434,532

834,486

Short term deposits

-

-

-

2,194,492

4,118,466

Amount due from holding company

947,640

905,396

481,139

481,139

481,139

Cash & bank balances

1,937,679

4,192,187

2,242,402

2,455,501

3,893,542

Others

26,413

35,043

146,201

209,219

67,559

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

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

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

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

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

TOTAL CURRENT ASSETS

16,463,378

14,046,120

14,234,306

13,611,131

16,378,848

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

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

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

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

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

TOTAL ASSET

117,473,799

121,234,888

128,013,070

125,332,010

116,784,939

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

6,315,522

6,615,924

10,191,005

7,263,077

5,612,616

Other creditors & accruals

7,243,827

5,506,933

5,672,170

9,840,801

9,537,733

Hire purchase & lease creditors

-

-

-

-

13,420

Short term borrowings/Term loans

-

-

7,241,563

6,293,612

-

Other borrowings

5,791,682

7,460,801

-

-

-

Other liabilities & accruals

17,086

47,678

557,263

60,455

-

Amounts owing to holding company

-

-

3,186,600

1,852,181

863,125

Amounts owing to related companies

44,733,886

40,757,685

-

-

855,106

Other liabilities

-

-

52,553,301

46,699,400

-

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

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

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

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

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

TOTAL CURRENT LIABILITIES

64,102,003

60,389,021

79,401,902

72,009,526

16,882,000

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

(47,638,625)

(46,342,901)

(65,167,596)

(58,398,395)

(503,152)

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

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

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

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

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

TOTAL NET ASSETS

53,371,796

60,845,867

48,611,168

53,322,484

99,902,939

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

2,500,000

2,500,000

2,500,000

2,500,000

2,500,000

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

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

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

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

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

TOTAL SHARE CAPITAL

2,500,000

2,500,000

2,500,000

2,500,000

2,500,000

Retained profit/(loss) carried forward

35,887,129

40,388,354

44,080,907

43,858,555

41,905,575

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

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

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

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

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

TOTAL RESERVES

35,887,129

40,388,354

44,080,907

43,858,555

41,905,575

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

38,387,129

42,888,354

46,580,907

46,358,555

44,405,575

Deferred taxation

-

-

-

-

48,530

Others

14,984,667

17,957,513

2,030,261

6,963,929

55,448,834

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

14,984,667

17,957,513

2,030,261

6,963,929

55,497,364

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

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

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

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

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

53,371,796

60,845,867

48,611,168

53,322,484

99,902,939

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

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

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

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

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

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCIAL RATIO

 

SEGAMAT PANEL BOARDS SDN. BHD.

 

TYPES OF FUNDS

Cash

1,937,679

4,192,187

2,242,402

4,649,993

8,012,008

Net Liquid Funds

1,937,679

4,192,187

2,242,402

4,649,993

8,012,008

Net Liquid Assets

(55,303,445)

(52,278,430)

(72,257,313)

(63,089,652)

(4,300,246)

Net Current Assets/(Liabilities)

(47,638,625)

(46,342,901)

(65,167,596)

(58,398,395)

(503,152)

Net Tangible Assets

53,371,796

60,845,867

48,611,168

53,322,484

99,902,939

Net Monetary Assets

(70,288,112)

(70,235,943)

(74,287,574)

(70,053,581)

(59,797,610)

PROFIT & LOSS ITEMS

Earnings Before Interest & Tax (EBIT)

(3,762,253)

(2,970,507)

572,500

2,735,301

1,943,082

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

3,668,750

4,499,969

6,199,592

7,688,834

7,807,391

BALANCE SHEET ITEMS

Total Borrowings

5,791,682

7,460,801

7,241,563

6,293,612

13,420

Total Liabilities

79,086,670

78,346,534

81,432,163

78,973,455

72,379,364

Total Assets

117,473,799

121,234,888

128,013,070

125,332,010

116,784,939

Net Assets

53,371,796

60,845,867

48,611,168

53,322,484

99,902,939

Net Assets Backing

38,387,129

42,888,354

46,580,907

46,358,555

44,405,575

Shareholders' Funds

38,387,129

42,888,354

46,580,907

46,358,555

44,405,575

Total Share Capital

2,500,000

2,500,000

2,500,000

2,500,000

2,500,000

Total Reserves

35,887,129

40,388,354

44,080,907

43,858,555

41,905,575

LIQUIDITY (Times)

Cash Ratio

0.03

0.07

0.03

0.06

0.47

Liquid Ratio

0.14

0.13

0.09

0.12

0.75

Current Ratio

0.26

0.23

0.18

0.19

0.97

WORKING CAPITAL CONTROL (Days)

Stock Ratio

50

35

37

27

22

Debtors Ratio

33

12

16

12

19

Creditors Ratio

50

48

73

59

45

SOLVENCY RATIOS (Times)

Gearing Ratio

0.15

0.17

0.16

0.14

0

Liabilities Ratio

2.06

1.83

1.75

1.70

1.63

Times Interest Earned Ratio

(5.09)

(4.12)

2.93

2.92

1,359.75

Assets Backing Ratio

21.35

24.34

19.44

21.33

39.96

PERFORMANCE RATIO (%)

Operating Profit Margin

(7.98)

(6.01)

0.54

2.87

3.12

Net Profit Margin

(7.98)

(6.01)

0.32

2.96

4.96

Return On Net Assets

(7.05)

(4.88)

1.18

5.13

1.94

Return On Capital Employed

(7.05)

(4.88)

1.18

5.13

1.94

Return On Shareholders' Funds/Equity

(11.73)

(8.61)

0.48

4.01

6.94

Dividend Pay Out Ratio (Times)

0

0

0

0

0

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

0

0

0



FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.66.35

UK Pound

1

Rs.100.28

Euro

1

Rs.71.30

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

TRU

 

               

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.