MIRA INFORM REPORT

 

 

Report No. :

343871

Report Date :

06.10.2015

 

IDENTIFICATION DETAILS

 

Name :

ANDAVAR METAL INDUSTRY SDN. BHD.

 

 

Registered Office :

35, Lot Pt 3819, Jalan 4/148a, Taman Sungai Besi Industrial Park, 57100 Kuala Lumpur, Wilayah Persekutuan

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2013

 

 

Date of Incorporation :

06.11.2006

 

 

Com. Reg. No.:

752286-K

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Recycling and trading in various types of metals, reusable material and related products

 

 

No. of Employee :

Not Available

 

 

RATING & COMMENTS

 

MIRA’s Rating :

B

 

RATING

STATUS

PROPOSED CREDIT LINE

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

Small

 

Status :

Moderate

 

 

Payment Behaviour :

Slow but correct

 

 

Litigation :

Clear

 

 

NOTES :

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

 

 

ECGC Country Risk Classification List – March 31, 2015

 

Country Name

Previous Rating

(31.12.2014)

Current Rating

(31.03.2015)

Malaysia

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

D

 

 

MALAYSIA ECONOMIC OVERVIEW

 

Malaysia, a middle-income country, has transformed itself since the 1970s from a producer of raw materials into an emerging multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services. NAJIB's Economic Transformation Program (ETP) is a series of projects and policy measures intended to accelerate the country's economic growth. The government has also taken steps to liberalize some services sub-sectors. The NAJIB administration also is continuing efforts to boost domestic demand and reduce the economy's dependence on exports. Nevertheless, exports - particularly of electronics, oil and gas, palm oil and rubber - remain a significant driver of the economy. As an oil and gas exporter, Malaysia has previously profited from higher world energy prices, although the rising cost of domestic gasoline and diesel fuel, combined with sustained budget deficits, has forced Kuala Lumpur to begin to address fiscal shortfalls, through initial reductions in energy and sugar subsidies and the announcement of the 2015 implementation of a 6% goods and services tax. Falling global oil prices in the second half of 2014 have strained government finances, shrunk Malaysia’s current account surplus and put downward pressure on the ringgit. The government is also trying to lessen its dependence on state oil producer Petronas. The oil and gas sector supplied about 29% of government revenue in 2014. Bank Negara Malaysia (central bank) maintains healthy foreign exchange reserves, and a well-developed regulatory regime has limited Malaysia's exposure to riskier financial instruments and the global financial crisis. Nevertheless, Malaysia could be vulnerable to a fall in commodity prices or a general slowdown in global economic activity because exports are a major component of GDP. In order to attract increased investment, NAJIB earlier raised possible revisions to the special economic and social preferences accorded to ethnic Malays under the New Economic Policy of 1970, but retreated in 2013 after he encountered significant opposition from Malay nationalists and other vested interests. In September 2013 NAJIB launched the new Bumiputra Economic Empowerment Program (BEEP), policies that favor and advance the economic condition of ethnic Malays. Malaysia is a member of the 12-nation Trans-Pacific Partnership free trade agreement negotiations and, with the nine other ASEAN members, will form the ASEAN Economic Community in 2015.

 

Source : CIA

 

 

 

EXECUTIVE SUMMARY

 

 

REGISTRATION NO.

:

752286-K

COMPANY NAME

:

ANDAVAR METAL INDUSTRY SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

06/11/2006

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

35, LOT PT 3819, JALAN 4/148A, TAMAN SUNGAI BESI INDUSTRIAL PARK, 57100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

BUSINESS ADDRESS

:

35 LOT PT 3819, JALAN 4/148A, TAMAN SUNGAI BESI INDUSTRIAL PARK, 57100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

TEL.NO.

:

03-79813037

FAX.NO.

:

03-79812984

WEB SITE

:

WWW.ANDAVARMETAL.COM

CONTACT PERSON

:

SHANKAR A/L GOPAL CHETTIAR ( DIRECTOR )

INDUSTRY CODE

:

46622

PRINCIPAL ACTIVITY

:

RECYCLING AND TRADING IN VARIOUS TYPES OF METALS, REUSABLE MATERIAL AND RELATED PRODUCTS

AUTHORISED CAPITAL

:

MYR 10,000,000.00 DIVIDED INTO
ORDINARY SHARE 10,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 10,000,000.00 DIVIDED INTO
ORDINARY SHARES 10,000,000 CASH OF MYR 1.00 EACH.

SALES

:

MYR 122,734,964 [2013]

NET WORTH

:

MYR 5,448,390 [2013]

STAFF STRENGTH

:

N/A

BANKER (S)

:

UNITED OVERSEAS BANK (MALAYSIA) BHD
STANDARD CHARTERED BANK MALAYSIA BHD
MALAYAN BANKING BHD
RHB BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

POOR

PAYMENT

:

GOOD

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

SATISFACTORY

INDUSTRY OUTLOOK

:

AVERAGE GROWTH

 

 

HISTORY / BACKGROUND

 

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

 

The Subject is principally engaged in the (as a / as an) recycling and trading in various types of metals, reusable material and related products.

 

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

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

02/01/2015

MYR 10,000,000.00

MYR 10,000,000.00

30/06/2014

MYR 5,000,000.00

MYR 4,000,000.00

15/02/2013

MYR 5,000,000.00

MYR 2,000,000.00

31/12/2011

MYR 5,000,000.00

MYR 1,500,000.00

20/11/2006

MYR 1,000,000.00

MYR 1,000,000.00

06/11/2006

MYR 1,000,000.00

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. SHANKAR A/L GOPAL CHETTIAR +

16-5-8, WINNER COURT B 1/125B, TAMAN DESA PETALING, 57100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

750228-07-5491

8,200,000.00

82.00

MS. RAJALAKSHMI A/P KESAVAN +

16-5-8, WINNER COURT B 1/125B, TAMAN DESA PETALING, 57100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

820306-07-5456

1,800,000.00

18.00

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

------

10,000,000.00

100.00

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

=====

+ Also Director

 

 

DIRECTORS

DIRECTOR 1

 

Name Of Subject

:

MS. RAJALAKSHMI A/P KESAVAN

Address

:

16-5-8, WINNER COURT B 1/125B, TAMAN DESA PETALING, 57100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

New IC No

:

820306-07-5456

Date of Birth

:

06/03/1982

Nationality

:

MALAYSIAN

Date of Appointment

:

27/12/2011

 

DIRECTOR 2

 

Name Of Subject

:

MR. SHANKAR A/L GOPAL CHETTIAR

Address

:

16-5-8, WINNER COURT B 1/125B, TAMAN DESA PETALING, 57100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

New IC No

:

750228-07-5491

Date of Birth

:

28/02/1975

Nationality

:

MALAYSIAN INDIAN

Date of Appointment

:

06/11/2006


MANAGEMENT

 

 

 

1)

Name of Subject

:

SHANKAR A/L GOPAL CHETTIAR

Position

:

DIRECTOR

 

 

 

AUDITOR

 

Auditor

:

WSJ & CO.

Auditor' Address

:

C/O 6-7-3, BLOCK 6, QUEEN'S AVENUE, JALAN BAYAM, OFF JALAN PEEL, LEVEL 7, 55100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MR. M RAMANATHAN A/L S M MEYYAPPAN

IC / PP No

:

6057502

New IC No

:

600923-10-6815

Address

:

15, JALAN DATO ABDUL AZIZ, 14/29, 46100 PETALING JAYA, SELANGOR, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

UNITED OVERSEAS BANK (MALAYSIA) BHD

 

2)

Name

:

STANDARD CHARTERED BANK MALAYSIA BHD

 

3)

Name

:

MALAYAN BANKING BHD

 

4)

Name

:

RHB BANK BHD

 

 

 

ENCUMBRANCE (S)

 

Charge No

Creation Date

Charge Description

Chargee Name

Total Charge

Status

1

17/05/2007

LETTER OF SET-OFF

RHB BANK BHD

MYR 850,000.00

Unsatisfied

2

19/02/2009

FACILITIES AGREEMENT & 3RD PARTY 2ND LEGAL CHARGE

RHB BANK BHD

-

Unsatisfied

3

03/03/2009

N/A

UNITED OVERSEAS BANK (MALAYSIA) BHD

MYR 1,200,000.00

Satisfied

4

03/03/2009

N/A

UNITED OVERSEAS BANK (MALAYSIA) BHD

MYR 1,600,000.00

Satisfied

5

09/12/2009

MEMORANDUM OF LEGAL CHARGE OVER DEPOSITS

UNITED OVERSEAS BANK (MALAYSIA) BHD

-

Unsatisfied

6

04/11/2010

N/A

UNITED OVERSEAS BANK (MALAYSIA) BHD

MYR 460,000.00

Satisfied

7

04/11/2010

N/A

UNITED OVERSEAS BANK (MALAYSIA) BHD

MYR 300,000.00

Satisfied

8

04/11/2010

THIRD LEGAL CHARGE

UNITED OVERSEAS BANK (MALAYSIA) BHD

MYR 800,000.00

Unsatisfied

9

30/03/2011

FACILITIES AGREEMENT, 3RD PARTY CHARGE OVER THE PROPERTY

HONG LEONG BANK BERHAD

-

Unsatisfied

10

06/07/2012

N/A

MALAYAN BANKING BHD

MYR 200,000.00

Satisfied

11

10/09/2012

LETTER OF SET OFF

HONG LEONG BANK BERHAD

-

Unsatisfied

12

03/10/2012

FIRST PARTY LEGAL CHARGE

HONG LEONG BANK BERHAD

-

Unsatisfied

13

04/03/2013

SECURITY AGREEMENT

STANDARD CHARTERED BANK MALAYSIA BHD

-

Unsatisfied

14

09/05/2013

FIRST LEGAL CHARGE

STANDARD CHARTERED BANK MALAYSIA BHD

-

Unsatisfied

 

 

LITIGATION CHECK AGAINST SUBJECT


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

No legal action was found in our databank.

No winding up petition was found in our databank.

 

DEFAULTER CHECK AGAINST SUBJECT


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

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

 

PAYMENT RECORD

 

 

SOURCES OF RAW MATERIALS:

Local

:

N/A

Overseas

:

N/A


The Subject refused to disclose its suppliers.

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

OVERALL PAYMENT HABIT

Prompt 0-30 Days

[

]

Good 31-60 Days

[

X

]

Average 61-90 Days

[

]

Fair 91-120 Days

[

]

Poor >120 Days

[

]

 

 

CLIENTELE

 

Local

:

YES

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Export Market

:

ASIA

Credit Term

:

N/A

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)

 

 

OPERATIONS

 

Goods Traded

:

VARIOUS TYPES OF METALS, REUSABLE MATERIAL AND RELATED PRODUCTS

Services

:

RECYCLING OF METALS

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) recycling and trading in various types of metals, reusable material and related products.

The Subject buys all kinds of metal from petty traders mainly from places surrounding Kuala Lumpur and throughout Peninsular Malaysia (also deals with suppliers from Kelantan, Terengganu, Pahang and Johor Baru).

The Subject handles ferrous and non-ferrous materials in a variety of grades. Besides trading the scrap, the SC also convert the scrap into value added products, for example, converting brass scrap to brass rods and aluminium scrap to aluminium ingots.


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-79813037

Match

:

N/A

Address Provided by Client

:

35 LOT PT 3819, JALAN 4/148A, TAMAN SUNGAI BESI INDUSTRIAL PARK,57100,KUALA LUMPUR,WILAYAH PERSEKUTUAN.

Current Address

:

35 LOT PT 3819, JALAN 4/148A, TAMAN SUNGAI BESI INDUSTRIAL PARK, 57100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

Match

:

YES

Latest Financial Accounts

:

YES

 

Other Investigations


On 17th August 2015 we contacted one of the staff from the Subject and she provided some information.

The Subject refused to disclose its number of employees.


FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Increased

[

2009 - 2013

]

Profit/(Loss) Before Tax

:

Increased

[

2009 - 2013

]

Return on Shareholder Funds

:

Unfavourable

[

3.36%

]

Return on Net Assets

:

Acceptable

[

14.66%

]

The Subject's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The Subject's management have been efficient in controlling its operating costs. The unfavourable return on shareholders' funds could indicate that the Subject was inefficient in utilising its assets to generate returns.

Working Capital Control

Stock Ratio

:

Favourable

[

13 Days

]

Debtor Ratio

:

Favourable

[

18 Days

]

Creditors Ratio

:

Favourable

[

4 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

:

Acceptable

[

0.85 Times

]

Current Ratio

:

Unfavourable

[

1.17 Times

]

The Subject's liquid ratio was slightly low. This could indicate that the Subject's working capital was slightly deficient. The Subject will have to improve its liquidity position either by obtaining short term financing or increase its paid up capital so that it can meet all its short term obligations as and when they fall due.

Solvency

Interest Cover

:

Unfavourable

[

1.33 Times

]

Gearing Ratio

:

Unfavourable

[

2.53 Times

]

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

Overall Assessment :

Generally, the Subject's performance has improved with higher turnover and profit. The Subject's liquidity was at an acceptable range. If the Subject is able to obtain further short term financing, it should be able to meet all its short term obligations. If there is a fall in the Subject's profit or any increase in interest rate, the Subject may not be able to generate sufficient cash-flow to service its interest. The Subject's gearing level was high and its going concern will be in doubt if there is no injection of additional shareholders' funds in times of economic downturn and / or high interest rates.

Overall financial condition of the Subject : POOR

 

 

 

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

 

Major Economic Indicators:

2011

2012

2013

2014*

2015**

Population ( Million)

28.7

29.3

29.8

30.3

30.5

Gross Domestic Products ( % )

5.1

5.6

5.3

6.0

6.0

Domestic Demand ( % )

8.2

9.4

5.6

6.4

6.2

Private Expenditure ( % )

8.2

8.0

8.6

7.9

6.9

Consumption ( % )

7.1

1.0

5.7

6.5

5.6

Investment ( % )

12.2

11.7

13.3

12.0

10.7

Public Expenditure ( % )

8.4

13.3

4.4

2.3

4.2

Consumption ( % )

16.1

11.3

(1.2)

2.1

3.8

Investment ( % )

(0.3)

15.9

4.2

2.6

4.7

Balance of Trade ( MYR Million )

116,058

106,300

71,298

52,314

-

Government Finance ( MYR Million )

(45,511)

(42,297)

(39,993)

(37,291)

-

Government Finance to GDP / Fiscal Deficit ( % )

(5.4)

(4.5)

(4.0)

(3.5)

(3.0)

Inflation ( % Change in Composite CPI)

3.1

1.6

2.5

3.2

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

46622 : Wholesale of ferrous and non-ferrous semi-finished metal ores and products n.e.c.

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 2006, the Subject is a Private Limited company, focusing on recycling and trading in various types of metals, reusable material and related products. Having been in business for more than 5 years, the Subject has established a remarkable clientele base for itself which has contributed to its business growth. A paid up capital of MYR 10,000,000 allows the Subject to expand its business more comfortably. We considered that the Subject's business position in the market is much dependent on the efforts of its directors.

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. Overall, we regard that the Subject's management capability is average. This indicates that the Subject has greater potential to improve its business performance and raising income for the Subject.

We noted that both the turnover and profits have increased compared to the previous year. The higher profit could be due to increase in turnover and better control over its operating costs. The Subject has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. The Subject managed to maintain an adequate liquidity level, indicating that the Subject has the ability to meet its financial obligations. 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 5,448,390, the Subject should be able to maintain its business in the near terms.

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

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

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

 



PROFIT AND LOSS ACCOUNT

 

 

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

 

Financial Year End

2013-12-31

2012-12-31

2011-12-31

2010-12-31

2009-12-31

Months

12

12

12

12

12

Consolidated Account

Company

Company

Company

Company

Company

Audited Account

YES

YES

YES

YES

YES

Unqualified Auditor's Report (Clean Opinion)

YES

YES

YES

YES

YES

Financial Type

FULL

FULL

FULL

SUMMARY

SUMMARY

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

122,734,964

105,192,384

98,899,764

84,056,918

57,434,570

Other Income

69,421

46,049

775,719

-

-

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

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

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

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

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

Total Turnover

122,804,385

105,238,433

99,675,483

84,056,918

57,434,570

Costs of Goods Sold

(118,602,138)

(101,660,143)

(95,648,241)

-

-

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

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

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

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

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

Gross Profit

4,202,247

3,578,290

4,027,242

-

-

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

287,439

234,629

1,334,288

552,998

369,701

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

287,439

234,629

1,334,288

552,998

369,701

Taxation

(104,429)

(81,750)

(116,272)

(109,369)

(78,636)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

183,010

152,879

1,218,016

443,629

291,065

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

2,265,380

2,112,501

894,485

450,856

159,791

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

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

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

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

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

As restated

2,265,380

2,112,501

894,485

450,856

159,791

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

2,448,390

2,265,380

2,112,501

894,485

450,856

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

2,448,390

2,265,380

2,112,501

894,485

450,856

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Bank overdraft

121,701

94,876

72,280

-

-

Bankers' acceptance

321,555

229,358

206,260

-

-

Hire purchase

36,990

28,935

21,435

-

-

Term loan / Borrowing

194,010

79,312

102,324

-

-

Others

209,237

115,981

52,749

-

-

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

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

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

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

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

883,493

548,462

455,048

-

-

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

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

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

-

-

DEPRECIATION (as per notes to P&L)

494,377

458,397

392,969

-

-

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

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

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

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

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

494,377

458,397

392,969

-

-

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

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

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

 

 

 

BALANCE SHEET

 

 

ANDAVAR METAL INDUSTRY SDN. BHD.

 

ASSETS EMPLOYED:

FIXED ASSETS

5,618,329

5,683,410

3,551,448

3,846,005

2,814,646

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

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

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

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

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

TOTAL LONG TERM ASSETS

5,618,329

5,683,410

3,551,448

3,846,005

2,814,646

Stocks

4,372,014

2,324,568

2,011,146

-

-

Trade debtors

6,076,994

5,385,940

3,931,981

-

-

Other debtors, deposits & prepayments

1,499,007

697,787

406,502

-

-

Short term deposits

2,544,259

1,916,662

1,449,447

-

-

Cash & bank balances

1,672,626

322,151

1,465,561

-

-

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

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

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

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

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

TOTAL CURRENT ASSETS

16,164,900

10,647,108

9,264,637

7,192,943

4,326,718

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

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

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

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

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

TOTAL ASSET

21,783,229

16,330,518

12,816,085

11,038,948

7,141,364

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

1,187,197

864,979

770,469

-

-

Other creditors & accruals

771,273

436,558

694,476

-

-

Hire purchase & lease creditors

576,883

643,955

530,865

-

-

Bank overdraft

1,428,804

1,678,325

1,139,276

-

-

Other borrowings

9,217,500

5,200,000

4,200,000

-

-

Amounts owing to director

605,978

570,080

823,126

-

-

Provision for taxation

8,429

81,750

116,272

-

-

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

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

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

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

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

TOTAL CURRENT LIABILITIES

13,796,064

9,475,647

8,274,484

7,536,330

4,508,100

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

2,368,836

1,171,461

990,153

(343,387)

(181,382)

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

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

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

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

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

TOTAL NET ASSETS

7,987,165

6,854,871

4,541,601

3,502,618

2,633,264

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

2,000,000

2,000,000

1,500,000

1,000,000

1,000,000

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

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

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

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

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

TOTAL SHARE CAPITAL

2,000,000

2,000,000

1,500,000

1,000,000

1,000,000

RESERVES

Share premium

1,000,000

-

-

-

-

Retained profit/(loss) carried forward

2,448,390

2,265,380

2,112,501

894,485

450,856

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

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

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

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

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

TOTAL RESERVES

3,448,390

2,265,380

2,112,501

894,485

450,856

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

5,448,390

4,265,380

3,612,501

1,894,485

1,450,856

Long term loans

2,538,775

2,589,491

929,100

-

-

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

2,538,775

2,589,491

929,100

1,608,133

1,182,408

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

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

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

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

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

7,987,165

6,854,871

4,541,601

3,502,618

2,633,264

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

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

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

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

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

 

 

 

FINANCIAL RATIO

 

 

 

TYPES OF FUNDS

Cash

4,216,885

2,238,813

2,915,008

-

-

Net Liquid Funds

2,788,081

560,488

1,775,732

-

-

Net Liquid Assets

(2,003,178)

(1,153,107)

(1,020,993)

(343,387)

(181,382)

Net Current Assets/(Liabilities)

2,368,836

1,171,461

990,153

(343,387)

(181,382)

Net Tangible Assets

7,987,165

6,854,871

4,541,601

3,502,618

2,633,264

Net Monetary Assets

(4,541,953)

(3,742,598)

(1,950,093)

(1,951,520)

(1,363,790)

PROFIT & LOSS ITEMS

Earnings Before Interest & Tax (EBIT)

1,170,932

783,091

1,789,336

-

-

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

1,665,309

1,241,488

2,182,305

-

-

BALANCE SHEET ITEMS

Total Borrowings

13,761,962

10,111,771

6,799,241

-

-

Total Liabilities

16,334,839

12,065,138

9,203,584

9,144,463

5,690,508

Total Assets

21,783,229

16,330,518

12,816,085

11,038,948

7,141,364

Net Assets

7,987,165

6,854,871

4,541,601

3,502,618

2,633,264

Net Assets Backing

5,448,390

4,265,380

3,612,501

1,894,485

1,450,856

Shareholders' Funds

5,448,390

4,265,380

3,612,501

1,894,485

1,450,856

Total Share Capital

2,000,000

2,000,000

1,500,000

1,000,000

1,000,000

Total Reserves

3,448,390

2,265,380

2,112,501

894,485

450,856

LIQUIDITY (Times)

Cash Ratio

0.31

0.24

0.35

-

-

Liquid Ratio

0.85

0.88

0.88

-

-

Current Ratio

1.17

1.12

1.12

0.95

0.96

WORKING CAPITAL CONTROL (Days)

Stock Ratio

13

8

7

-

-

Debtors Ratio

18

19

15

-

-

Creditors Ratio

4

3

3

-

-

SOLVENCY RATIOS (Times)

Gearing Ratio

2.53

2.37

1.88

-

-

Liabilities Ratio

3.00

2.83

2.55

4.83

3.92

Times Interest Earned Ratio

1.33

1.43

3.93

-

-

Assets Backing Ratio

3.99

3.43

3.03

3.50

2.63

PERFORMANCE RATIO (%)

Operating Profit Margin

0.23

0.22

1.35

0.66

0.64

Net Profit Margin

0.15

0.15

1.23

0.53

0.51

Return On Net Assets

14.66

11.42

39.40

15.79

14.04

Return On Capital Employed

11.72

8.53

28.81

15.79

14.04

Return On Shareholders' Funds/Equity

3.36

3.58

33.72

23.42

20.06

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.65.22

UK Pound

1

Rs.102.23

Euro

1

Rs.72.39

 

 

INFORMATION DETAILS

 

Analysis Done by :

KAR

 

 

Report Prepared by :

TPT

 

 

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.