MIRA INFORM REPORT

 

 

Report No. :

350286

Report Date :

20.11.2015

 

IDENTIFICATION DETAILS

 

Name :

AMAZON BATTERY SDN. BHD.

 

 

Registered Office :

10-1b, Jalan Pandan 2/1, Pandan Jaya, 55100 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2014

 

 

Date of Incorporation :

20.01.2012

 

 

Com. Reg. No.:

975998-P

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Trading of automotive batteries.

 

 

No. of Employee :

15 [2015]

 

 

RATING & COMMENTS

 

MIRA’s Rating :

B

 

RATING

STATUS

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Status :

Moderate

 

 

Payment Behaviour :

Slow but correct

 

 

Litigation :

Clear

 

 

NOTES :

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

 

 

ECGC Country Risk Classification List – March 31, 2015

 

Country Name

Previous Rating

(31.12.2014)

Current Rating

(31.03.2015)

Malaysia

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

MALAYSIA ECONOMIC OVERVIEW

 

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. 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.

:

975998-P

COMPANY NAME

:

AMAZON BATTERY SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

20/01/2012

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

10-1B, JALAN PANDAN 2/1, PANDAN JAYA, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

4 & 5, JALAN RAKAN 12/1, TAMAN RAKAN, 43000 KAJANG, SELANGOR, MALAYSIA.

TEL.NO.

:

03-87379578

FAX.NO.

:

03-92854249

CONTACT PERSON

:

WONG KOK CHEW ( DIRECTOR )

INDUSTRY CODE

:

453

PRINCIPAL ACTIVITY

:

TRADING OF AUTOMOTIVE BATTERIES

AUTHORISED CAPITAL

:

MYR 400,000.00 DIVIDED INTO
ORDINARY SHARE 400,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 300,000.00 DIVIDED INTO
ORDINARY SHARES 300,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 12,063,146 [2014]

NET WORTH

:

MYR 501,522 [2014]

STAFF STRENGTH

:

15 [2015]

BANKER (S)

:

RHB BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

LIMITED

PAYMENT

:

SLOW BUT CORRECT

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

HIGH

CURRENCY EXPOSURE

:

NIL

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

MARGINAL GROWTH

 

 

HISTORY / BACKGROUND

 

The Subject is a private limited company and is allowed to have a minimum of one and a maximum of forty-nine shareholders. As a private limited company, the Subject must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the Subject is capable of owning assets, entering into contracts, sue or be sued by other companies. The liabilities of the shareholders are to the extent of the equity they have taken up and the creditors cannot claim on shareholders' personal assets even if the Subject is insolvent. The Subject is governed by the Companies Act, 1965 and the company must file its annual returns, together with its financial statements with the Registrar of Companies.

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

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

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

30/06/2015

MYR 400,000.00

MYR 300,000.00

18/04/2014

MYR 400,000.00

MYR 200,000.00

15/02/2013

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

(%)

MR. WONG KOK CHEW +

11-2A, JALAN SUNGAI LONG 11/7, BANDAR SUNGAI LONG, 43000 KAJANG, SELANGOR, MALAYSIA.

550120-08-6387 8157146

150,000.00

50.00

MR. BO YIK KHOON +

6, JALAN BSL1/5, BUKIT SUNGAI LONG, 43000 KAJANG, SELANGOR, MALAYSIA.

700411-10-5497 A1543504

150,000.00

50.00

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

------

300,000.00

100.00

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

=====

+ Also Director



DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. WONG KOK CHEW

Address

:

11-2A, JALAN SUNGAI LONG 11/7, BANDAR SUNGAI LONG, 43000 KAJANG, SELANGOR, MALAYSIA.

IC / PP No

:

8157146

New IC No

:

550120-08-6387

Date of Birth

:

20/01/1955

Nationality

:

MALAYSIAN

Date of Appointment

:

20/01/2012

 

DIRECTOR 2

 

Name Of Subject

:

MR. BO YIK KHOON

Address

:

6, JALAN BSL1/5, BUKIT SUNGAI LONG, 43000 KAJANG, SELANGOR, MALAYSIA.

IC / PP No

:

A1543504

New IC No

:

700411-10-5497

Date of Birth

:

11/04/1970

Nationality

:

MALAYSIAN

Date of Appointment

:

20/01/2012


MANAGEMENT

 

 

 

1)

Name of Subject

:

BO YIK KHOON

Position

:

DIRECTOR

 

2)

Name of Subject

:

WONG KOK CHEW

Position

:

DIRECTOR

 

3)

Name of Subject

:

INA

Position

:

STAFF

 

 

 

AUDITOR

 

Auditor

:

W.K.LEE & CO.

Auditor' Address

:

1 & 1A, ROOM 1, JALAN IPOH KECIL, 2ND FLOOR, 50350 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. LEE SIEW CHING

New IC No

:

780524-02-5226

Address

:

11A, LORONG WANGSA 5B, TAMAN WANGSA UKAY, BUKIT ANTARABANGSA, 68000 AMPANG, SELANGOR, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

RHB BANK BHD

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

10/10/2014

1ST PARTY LEGAL CHARGE

RHB BANK 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

Percentage

:

100%

Overseas

:

NO

Percentage

:

0%



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

:

YES

Percentage

:

100%

Domestic Markets

:

MALAYSIA

Overseas

:

NO

Credit Term

:

N/A

Payment Mode

:

N/A

 

 

OPERATIONS

 

Goods Traded

:

AUTOMOTIVE BATTERIES

 

Total Number of Employees:

YEAR

2015

GROUP

N/A

COMPANY

15

 

Branch

:

NO

Other Information:


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

The Subject is the company trading with automotive batteries.

 

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

0392857601

Current Telephone Number

:

03-87379578

Match

:

NO

Address Provided by Client

:

10-1B, JALAN PANDAN 2/1, PANDAN JAYA,55100,KUALA LUMPUR,WILAYAH PERSEKUTUAN.

Current Address

:

4 & 5, JALAN RAKAN 12/1, TAMAN RAKAN, 43000 KAJANG, SELANGOR, MALAYSIA.

Match

:

NO

Latest Financial Accounts

:

YES

 

Other Investigations


On 18th November 2015 we contacted one of the staff from the Subject and she provided some information.

The telephone number provided belongs to the Subject's secretary firm.

The address provided belongs to the Subject's registered address.


FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Increased

[

2012 - 2014

]

Profit/(Loss) Before Tax

:

Increased

[

2012 - 2014

]

Return on Shareholder Funds

:

Acceptable

[

19.89%

]

Return on Net Assets

:

Acceptable

[

11.83%

]

The Subject's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The higher profit could be attributed to the increase in turnover. The Subject's management had generated acceptable return for its shareholders using its assets.

Working Capital Control

Stock Ratio

:

Unfavourable

[

172 Days

]

Debtor Ratio

:

Favourable

[

1 Days

]

Creditors Ratio

:

Unfavourable

[

92 Days

]

The Subject could be incurring higher holding cost. As its capital was tied up in stocks, it could face liquidity problems. 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

[

0.55 Times

]

Current Ratio

:

Unfavourable

[

1.07 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

:

Favourable

[

13.60 Times

]

Gearing Ratio

:

Unfavourable

[

3.08 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 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 :

Generally, the Subject's performance has improved with higher turnover and profit. 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. With the favourable interest cover, the Subject could be able to service all the accrued interest without facing any difficulties. 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 : LIMITED

 

 

 

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

453 : Sale of motor vehicle parts and accessories

INDUSTRY :

MOTOR VECHICLE

The forecasted annual Total Industry Volume (TIV) in the year 2015 is 693,500 units, which is the forecasted increase of 2.0% compared to the forecasted annual TIV of 680,000 units for year 2014. The forecasted TIV for year 2014 is an estimated increase of 3.7% compared to the actual TIV of year 2013 (655,793 units). The factors that affected the forecasted TIV for year 2014 are the improving global economic conditions, investments in mega projects related to Economic Transformation Projects (ETP), positive consumer's sentiments, introduction of new models especially Energy Efficient Vehicles (EEV), and aggressive promotional campaigns by car companies. However, moderation in consumer's spending due to higher cost of living, and more stringent lending practices including hire purchase loan also have an effect in the forecasted TIV for year 2014.

Besides that, the annual sales of passenger vehicles in the year 2015 are forecasted to be 610,300 units and it's an estimated increase of 2.0% compared to the forecasted sales of passenger cars for year 2014. The forecasted annual sales of passenger cars for year 2014 have an estimated increase by 3.8% to 598,400 units compared to 576,657 units at the year 2013. While annual sales of commercial vehicles in year 2015 is forecasted to be 83,200 units, which is a forecasted increase 2.0% compared to the forecasted annual sales of commercial car in year 2014. The forecasted annual sales of commercial car in year 2014 were estimated to increase by 3.1% to 81,600 units compared to 79,136 units at the year 2013.

Other than that, for the total registration of new passenger vehicles in the first six months of year 2014, it reached 296,779 units compare with 275,991 units over the same period in year 2013. This had brought an increase of 7.5% (20,788 units) of growth rate in the registration of passenger vehicles. While the total registration for commercial vehicles in the first six months of year 2014 were 36,363 units, which was a decrease of 3.0%. Besides, the production of new vehicles also recorded an increase of 8.3% (24,381 units) over the first six months of year 2014.

The National Automotive Policy 2014 envisions for Malaysia to be an Energy Efficient Vehicles (EEV) hub in ASEAN including the production of hybrids and electric vehicles (EV). This encompasses strategies and measures to strengthen the entire value chain of the automotive industry. Thus, the national car manufacturers, Proton and Perodua, lead in the industry's response. Proton launched "Iriz" and believes the global standard car will help to capture a larger share of the automotive market. Besides, Perodua came up with the Axia model, which is Malaysia's first EEV and it received similarly good response from consumers.

Moreover, Auto industry players believe that the 2015 Budget will spur manufacturing automation in their industry, due to the automation capital allowance of up to 200 per cent on the expenditure incurred within a specific period is a specialised incentive package, and will benefit manufacturers of energy-efficient vehicles (EEVs), said by the CEO of Malaysian Automotive Institute (MAI).

The Goods and Services Tax (GST) that set at 6% will be implemented on April 1, 2015, and the Sales and Services Tax (SST) of 10% will be abolished on that same day. According to Malaysian Automotive Institute (MAI), the implementation of the GST in 2015 should stimulate demand for vehicles with the reduction of prices due to the abolishment of the SST. However, according to Bernama, the gains could be offset by higher prices of imported auto parts due to foreign exchange factors, even though prices for new cars are generally expected to come down by between 1-3% after the implementation of the Goods and Services Tax (GST). As auto components are mainly imported from Japan, if the yen appreciates against the ringgit, the savings of 1-3% could be much less because the components would now cost more and that would affect retail car prices.

OVERALL INDUSTRY OUTLOOK : Marginal Growth



CREDIT RISK EVALUATION & RECOMMENDATION

 


Incorporated in 2012, the Subject is a Private Limited company, focusing on trading of automotive batteries. The Subject has been in business for less than 5 years and it has slowly been building up contact with its clients while competing in the industry. However, it has yet to enjoy a stable market shares as it need to compete many well established players in the same field. With an issued and paid up capital of MYR 300,000 contributed by individual shareholders, the Subject may face difficulties in its attempt to further expand its business in the future. Thus, the Subject should put more efforts on its business to gain higher market share while competing aggressively in the market.

Investigation revealed that the Subject concentrates only on the local market. This narrow market segment has placed the Subject at high business risk and limits its business expansion opportunities. Any adverse changes to the local economy might have a negative impact on the Subject's business performance. Being a small company, the Subject's business operation is supported by 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.

We noted that both the turnover and profits have increased compared to the previous year. The higher profit could be due to increase in turnover and better control over its operating costs. Return on shareholders' funds of the Subject was at an acceptable range which indicated that the management was efficient in utilising its funds to generate income. Due to its weak liquidity position, the Subject may face working capital deficiency in meeting its short term financial obligations if no fresh capital are injected into the Subject. The high gearing ratio clearly implied that the Subject was supported by more debt than equity. Thus, the Subject is exposed to high financial risk. Given a positive net worth standing at MYR 501,522, the Subject should be able to maintain its business in the near terms.

We noted that the Subject's supplies are solely sourced from local market. Being highly dependent on a limited number of suppliers could lead to delays, lost of revenue and increased costs if such resources become unavailable or shortage.

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 has reached its maturity stage and only enjoying a marginal growth. The steady growth of the country's economy will further enhance the industry activities. Thus, the Subject's future performance is very much depend on its marketing strategies in order to retain its position in the market.

In view of the above, we recommend credit be granted to the Subject with close monitoring.

 



PROFIT AND LOSS ACCOUNT

 

 

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

 

Financial Year End

2014-12-31

2013-12-31

2012-12-31

Months

12

12

11

Consolidated Account

Company

Company

Company

Audited Account

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

Financial Type

FULL

FULL

FULL

Currency

MYR

MYR

MYR

TURNOVER

12,063,146

7,661,591

2,825,973

Other Income

1,000

6,983

-

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

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

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

Total Turnover

12,064,146

7,668,574

2,825,973

Costs of Goods Sold

(10,816,191)

(6,940,741)

(2,488,021)

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

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

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

Gross Profit

1,247,955

727,833

337,952

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

162,477

115,445

28,947

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

162,477

115,445

28,947

Taxation

(62,745)

(36,311)

(6,291)

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

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

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

PROFIT/(LOSS) AFTER TAXATION

99,732

79,134

22,656

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

101,790

22,656

-

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

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

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

As restated

101,790

22,656

-

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

201,522

101,790

22,656

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

201,522

101,790

22,656

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Bank overdraft

4,188

163

-

Hire purchase

5,611

714

-

Term loan / Borrowing

3,100

-

-

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

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

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

12,899

877

-

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

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

-

DEPRECIATION (as per notes to P&L)

136,285

21,461

-

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

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

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

136,285

21,461

-

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

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

 

 

 

BALANCE SHEET

 

 

 

ASSETS EMPLOYED:

FIXED ASSETS

1,098,335

95,430

-

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

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

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

TOTAL LONG TERM ASSETS

1,098,335

95,430

-

Stocks

2,839,947

3,001,734

1,582,201

Contract work-in-progress

2,850,498

2,332,071

-

Trade debtors

21,755

-

657,735

Other debtors, deposits & prepayments

150,000

-

-

Cash & bank balances

13,075

171,207

34,509

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

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

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

TOTAL CURRENT ASSETS

5,875,275

5,505,012

2,274,445

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

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

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

TOTAL ASSET

6,973,610

5,600,442

2,274,445

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

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

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

CURRENT LIABILITIES

Trade creditors

2,716,311

2,711,269

130,169

Other creditors & accruals

512,272

401,016

621,261

Hire purchase & lease creditors

100,038

16,416

-

Bank overdraft

426,961

242,773

-

Short term borrowings/Term loans

35,412

-

-

Amounts owing to director

1,637,667

1,819,935

1,494,066

Provision for taxation

62,745

36,311

6,291

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

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

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

TOTAL CURRENT LIABILITIES

5,491,406

5,227,720

2,251,787

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

383,869

277,292

22,658

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

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

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

TOTAL NET ASSETS

1,482,204

372,722

22,658

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

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

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

SHARE CAPITAL

Ordinary share capital

300,000

200,000

2

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

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

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

TOTAL SHARE CAPITAL

300,000

200,000

2

Retained profit/(loss) carried forward

201,522

101,790

22,656

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

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

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

TOTAL RESERVES

201,522

101,790

22,656

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

501,522

301,790

22,658

Other long term borrowings

591,831

-

-

Hire purchase creditors

388,851

70,932

-

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

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

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

TOTAL LONG TERM LIABILITIES

980,682

70,932

-

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

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

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

1,482,204

372,722

22,658

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

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

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

 

 

FINANCIAL RATIO

 

 

 

TYPES OF FUNDS

Cash

13,075

171,207

34,509

Net Liquid Funds

(413,886)

(71,566)

34,509

Net Liquid Assets

(2,456,078)

(2,724,442)

(1,559,543)

Net Current Assets/(Liabilities)

383,869

277,292

22,658

Net Tangible Assets

1,482,204

372,722

22,658

Net Monetary Assets

(3,436,760)

(2,795,374)

(1,559,543)

PROFIT & LOSS ITEMS

Earnings Before Interest & Tax (EBIT)

175,376

116,322

28,947

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

311,661

137,783

28,947

BALANCE SHEET ITEMS

Total Borrowings

1,543,093

330,121

0

Total Liabilities

6,472,088

5,298,652

2,251,787

Total Assets

6,973,610

5,600,442

2,274,445

Net Assets

1,482,204

372,722

22,658

Net Assets Backing

501,522

301,790

22,658

Shareholders' Funds

501,522

301,790

22,658

Total Share Capital

300,000

200,000

2

Total Reserves

201,522

101,790

22,656

LIQUIDITY (Times)

Cash Ratio

0

0.03

0.02

Liquid Ratio

0.55

0.48

0.31

Current Ratio

1.07

1.05

1.01

WORKING CAPITAL CONTROL (Days)

Stock Ratio

172

254

204

Debtors Ratio

1

0

85

Creditors Ratio

92

143

19

SOLVENCY RATIOS (Times)

Gearing Ratio

3.08

1.09

0

Liabilities Ratio

12.90

17.56

99.38

Times Interest Earned Ratio

13.60

132.64

0

Assets Backing Ratio

4.94

1.86

11,329.00

PERFORMANCE RATIO (%)

Operating Profit Margin

1.35

1.51

1.02

Net Profit Margin

0.83

1.03

0.80

Return On Net Assets

11.83

31.21

127.76

Return On Capital Employed

8.73

18.41

127.76

Return On Shareholders' Funds/Equity

19.89

26.22

99.99

Dividend Pay Out Ratio (Times)

0

0

0

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

0

 


 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.66.11

UK Pound

1

Rs.101.03

Euro

1

Rs.70.71

 

 

INFORMATION DETAILS

 

Analysis Done by :

HNA

 

 

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.