MIRA INFORM REPORT

 

 

Report No. :

345140

Report Date :

19.10.2015

 

IDENTIFICATION DETAILS

 

Name :

KSP MANUFACTURING SDN. BHD.

 

 

Registered Office :

Wisma Taiko, 1, Jalan S.P. Seenivasagam, 30000 Ipoh, Perak

 

 

Country :

Malaysia

 

 

Financials (as on) :

30.09.2014

 

 

Date of Incorporation :

02.06.1984

 

 

Com. Reg. No.:

120900-P

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Subject is manufacturer of soap noodles

 

 

No. of Employee :

100 [2015]

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

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

Satisfactory

 

Status :

Satisfactory

 

 

Payment Behaviour :

No complaints

 

 

Litigation :

Clear

 

 

NOTES :

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

 

 

ECGC Country Risk Classification List – 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.

:

120900-P

COMPANY NAME

:

KSP MANUFACTURING SDN. BHD.

FORMER NAME

:

BITULINE INDUSTRIES SDN BHD (08/11/1994)

INCORPORATION DATE

:

02/06/1984

 

 

 

 

 

 

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

 

 

 

 

 

 

REGISTERED ADDRESS

:

WISMA TAIKO, 1, JALAN S.P. SEENIVASAGAM, 30000 IPOH, PERAK, MALAYSIA.

BUSINESS ADDRESS

:

LOT 1245, KUNDANG INDUSTRIAL ESTATE, 48020 RAWANG, SELANGOR, MALAYSIA.

TEL.NO.

:

03-60341213/60341218

FAX.NO.

:

03-60343090

CONTACT PERSON

:

YEOW AH KOW ( MANAGING DIRECTOR )

 

 

 

INDUSTRY CODE

:

20231

PRINCIPAL ACTIVITY

:

MANUFACTURER OF SOAP NOODLES

AUTHORISED CAPITAL

:

MYR 25,000,000.00 DIVIDED INTO
ORDINARY SHARE 23,300,000.00 OF MYR 1.00 EACH.
PREFERENCE SHARE 17,000,000.00 OF MYR 0.10 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 22,500,000.00 DIVIDED INTO
ORDINARY SHARES 7,500,000 CASH AND 15,000,000 OTHERWISE OF MYR 1.00 EACH.

 

 

 

SALES

:

MYR 165,640,000 [2014]

NET WORTH

:

MYR 35,604,000 [2014]

 

 

 

STAFF STRENGTH

:

100 [2015]

BANKER (S)

:

RHB BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

STRONG

PAYMENT

:

NO COMPLAINTS

MANAGEMENT CAPABILITY

:

AVERAGE

 

 

 

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

MODERATE

GENERAL REPUTATION

:

GOOD

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 soap noodles.

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

 

The immediate holding company of the Subject is PALM-OLEO SDN BHD, a company incorporated in MALAYSIA.

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

12/12/2014

MYR 25,000,000.00

MYR 22,500,000.00

15/01/1996

MYR 10,000,000.00

MYR 7,500.00

24/10/1994

MYR 100,000.00

MYR 1,000.00

 

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


Current Shareholder(s) :

Name

Address

IC/PP/Loc No

Shareholding

(%)

PALM-OLEO SDN BHD

WISMA TAIKO, 1, JALAN S.P SEENIVASAGAM, 30000 IPOH, PERAK, MALAYSIA.

185886V

22,500,000.00

100.00

 

 

 

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

------

 

 

 

22,500,000.00

100.00

 

 

 

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

=====

+ Also Director


Former Shareholder(s) :

Name

Country

IC/PP/Loc No

Shareholding

Last Updated

KL-KEPONG INDUSTRIAL HOLDINGS SDN. BHD.

MALAYSIA

300525M

18,000,000.00

20/01/2012



DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

MR. YEOW AH KOW

Address

:

3, JALAN SS 19/3C, SUBANG JAYA, 47500 SUBANG JAYA, SELANGOR, MALAYSIA.

 

 

 

New IC No

:

540203-05-5085

Date of Birth

:

03/02/1954

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

16/03/1998

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 2

 

Name Of Subject

:

MR. PUNG KOK HOOI

Address

:

1, JALAN SS 24/19, TAMAN MEGAH, 47301 PETALING JAYA, SELANGOR, MALAYSIA.

 

 

 

New IC No

:

660414-07-5357

Date of Birth

:

14/04/1966

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

26/12/2008

 

 

 

 

 

 

 

 

 

 

 

 

 

DIRECTOR 3

 

Name Of Subject

:

MR. MADHEV A/L BALA SUBRAMANIAM

Address

:

4, SS 24/9, TAMAN MEGAH, 47301 PETALING JAYA, SELANGOR, MALAYSIA.

IC / PP No

:

8294889

New IC No

:

600913-71-5115

Date of Birth

:

13/09/1960

 

 

 

Nationality

:

MALAYSIAN

Date of Appointment

:

01/10/2005

 

 

 

 

 

 

 

 

 

 

 

 



MANAGEMENT

 

 

 

1)

Name of Subject

:

YEOW AH KOW

 

Position

:

MANAGING DIRECTOR

 

 

 

AUDITOR

 

Auditor

:

KPMG

Auditor' Address

:

KPMG TOWER, 8, FIRST AVENUE, BANDAR UTAMA, LEVEL 10, 47800 PETALING JAYA, SELANGOR, MALAYSIA.

 

 

 

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. YAP MIOW KIEN

 

IC / PP No

:

A1171235

 

New IC No

:

681220-05-5334

 

Address

:

12, LINGKARAN MERU VALLEY 1A, LAKEVIEW VILLA, MERU VALLEY GOLF RESORT, JALAN BUKIT MERU, 30020 IPOH, PERAK, MALAYSIA.

 

 

 

 

 

 

 

 

 

 

 

 

 

2)

Company Secretary

:

MR. PUNG KOK HOOI

 

 

 

 

 

New IC No

:

660414-07-5357

 

Address

:

1, JALAN SS 24/19, TAMAN MEGAH, 47301 PETALING JAYA, SELANGOR, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

RHB BANK BHD

 

 

 

 

 

 

 

ENCUMBRANCE (S)


No encumbrance was found in our databank at the time of investigation.

 

 

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

[

X

]

 

Average 61-90 Days

[

 

]

 

Fair 91-120 Days

[

 

]

 

Poor >120 Days

[

 

]

 

 

 

 

 

 

 

 

CLIENTELE

 

Local

:

YES

Domestic Markets

:

MALAYSIA

Overseas

:

YES

 

 

 

Export Market

:

ASIA

Credit Term

:

30 - 60 DAYS

 

 

 

 

 

 

Payment Mode

:

CHEQUES
TELEGRAPHIC TRANSFER (TT)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATIONS

 

Products manufactured

:

SOAP NOODLES

 

 

 

Competitor(s)

:

COLGATE-PALMOLIVE (MALAYSIA) SDN. BHD.
KAO SOAP (MALAYSIA) SDN BHD
PACIFIC SOAP MFG SDN BHD
SENSORY BASICS SDN BHD
UNITED DETERGENT INDUSTRIES SDN. BHD.

 

 

 

 

 

 

 

 

Member(s) / Affiliate(s)

:

MALAYSIA FOOD & BEVERAGE INDUSTRY

 

 

 

Ownership of premises

:

OWNED

 

 

Total Number of Employees:

 

YEAR

2015

2014

2012

2011

2010

 

 

 

 

 

GROUP

N/A

N/A

N/A

N/A

N/A

 

 

 

 

COMPANY

100

100

100

100

100

 

 

 

 

 

Branch

:

NO

 

Other Information:


The Subject is principally engaged in the (as a / as an) manufacturer of soap noodles.

The Subject main production is soap noodles.

Soap noodles is one of the raw materials used by soap manufactures to produce soap.

The main raw material used to produce the soap noodles is palm oil.


RECENT DEVELOPMENT


We have checked with the Malaysian National News Agency's (BERNAMA)database, but no latest development was noted in our investigation.

 

CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-60341213/60341218

Match

:

N/A

 

 

 

Address Provided by Client

:

LOT 1245, KUNDANG INDUSTRIAL ESTATE,48020,RAWANG,SELANGOR.

Current Address

:

LOT 1245, KUNDANG INDUSTRIAL ESTATE, 48020 RAWANG, SELANGOR, MALAYSIA.

Match

:

YES

 

 

 

Latest Financial Accounts

:

YES

 

Other Investigations


We contacted one of the staff from the Subject's registered office and she provided some information.


FINANCIAL ANALYSIS

 

 

Profitability

 

 

 

 

 

 

Turnover

:

Erratic

[

2010 - 2014

]

 

Profit/(Loss) Before Tax

:

Decreased

[

2010 - 2014

]

 

Return on Shareholder Funds

:

Acceptable

[

11.79%

]

 

Return on Net Assets

:

Acceptable

[

15.78%

]

 

 

 

 

 

 

 

 

The fluctuating turnover reflects the fierce competition among the existing and new market players.The dip in profit could be due to the stiff market competition which reduced the Subject's profit margin. The Subject's management had generated acceptable return for its shareholders using its assets.

 

 

 

 

 

 

 

Working Capital Control

 

 

 

 

 

 

Stock Ratio

:

Favourable

[

17 Days

]

 

Debtor Ratio

:

Favourable

[

40 Days

]

 

Creditors Ratio

:

Favourable

[

3 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

:

Favourable

[

3.12 Times

]

 

Current Ratio

:

Favourable

[

3.94 Times

]

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

Solvency

 

 

 

 

 

 

Interest Cover

:

Favourable

[

36.77 Times

]

 

Gearing Ratio

:

Favourable

[

0.00 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 had no gearing and hence it had virtually no financial risk. The Subject was financed by its shareholders' funds and internally generated fund. During the economic downturn, the Subject, having a zero gearing, will be able to compete better than those which are highly geared in the same industry.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Overall Assessment :

 

 

 

 

 

 

The Subject recorded lower profits as its turnover showed a erratic trend. The Subject's management was unable to control its costs efficiently as its profit showed a downward trend. The Subject was in good liquidity position with its total current liabilities well covered by its total current assets. With its current net assets, the Subject should be able to repay its short term obligations. With the favourable interest cover, the Subject could be able to service all the accrued interest without facing any difficulties. The Subject was a zero gearing company, it was solely dependant on its shareholders to provide funds to finance its business. The Subject has good chance of getting loans, if the needs arises.

 

 

 

 

 

 

 

Overall financial condition of the Subject : STRONG

 

 

 

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

 

20231 : Manufacture of soap and detergents, cleaning and polishing preparations

 

 

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 1984, the Subject is a Private Limited company, focusing on manufacturer of soap noodles. The Subject has been in business for over two decades. It has built up a strong clientele base and good reputation will enable the Subject to further enhance its business in the near term. The Subject is expected to enjoy a stable market shares. The Subject have a strong capital position of MYR 22,500,000. We are confident with the Subject's business and its future growth prospect. Having strong support from its holding company has enabled the Subject to remain competitive despite the challenging business environment.


Over the years, the Subject has penetrated into both the local and overseas market. The Subject has positioned itself in the global market and is competing in the industry. Its stable clientele base will enable the Subject to further enhance its business in the near term. Being a moderate size company, the Subject has a total workforce of 100 employees in its business 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.

 
Financially, the Subject registered a higher turnover compared to previous year. However, its profits showed a reverse trend. The lower profit achieved was a result of higher operating cost and increased competition. Return on shareholders' funds of the Subject was at an acceptable range which indicated that the management was efficient in utilising its funds to generate income. The Subject is in good liquidity position with its current liabilities well covered by it current assets. Hence, it has sufficient working capital to meet its short term financial obligations. Being a zero geared company, the Subject virtually has no financial risk as it is mainly dependent on its internal funds to finance its business. Given a positive net worth standing at MYR 35,604,000, 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.


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

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

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

 



PROFIT AND LOSS ACCOUNT

 

 

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

KSP MANUFACTURING SDN. BHD.

 

Financial Year End

2014-09-30

2013-09-30

2012-09-30

2011-09-30

2010-09-30

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

SUMMARY

SUMMARY

Currency

MYR

MYR

MYR

MYR

MYR

 

 

 

 

 

 

TURNOVER

165,640,000

129,305,000

144,646,000

156,421,000

156,317,000

 

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

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

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

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

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

Total Turnover

165,640,000

129,305,000

144,646,000

156,421,000

156,317,000

Costs of Goods Sold

(156,496,000)

(117,291,000)

(131,521,000)

-

-

 

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

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

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

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

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

Gross Profit

9,144,000

12,014,000

13,125,000

-

-

 

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

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

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

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

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

 

 

 

 

 

 

PROFIT/(LOSS) FROM OPERATIONS

5,544,000

6,820,000

10,455,000

14,526,000

9,355,000

 

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

5,544,000

6,820,000

10,455,000

14,526,000

9,355,000

Taxation

(1,346,000)

(1,547,000)

(3,010,000)

(3,575,000)

(2,203,000)

 

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

4,198,000

5,273,000

7,445,000

10,951,000

7,152,000

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

 

 

 

 

 

As previously reported

9,906,000

17,008,000

13,276,000

16,659,000

37,737,000

Prior year adjustment

-

-

-

707,000

-

 

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

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

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

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

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

As restated

9,906,000

17,008,000

13,276,000

17,366,000

37,737,000

 

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

14,104,000

22,281,000

20,721,000

28,317,000

44,889,000

TRANSFER TO RESERVES - General

-

-

-

-

(15,000,000)

DIVIDENDS - Ordinary (paid & proposed)

(2,700,000)

(12,375,000)

(3,713,000)

(15,041,000)

(13,230,000)

 

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

11,404,000

9,906,000

17,008,000

13,276,000

16,659,000

 

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

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

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

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

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

 

 

 

 

 

 

INTEREST EXPENSE (as per notes to P&L)

 

 

 

 

 

Others

155,000

229,000

275,000

-

-

 

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

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

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

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

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

 

155,000

229,000

275,000

-

-

 

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

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

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

-

-

 

 

 

 

 

 

DEPRECIATION (as per notes to P&L)

1,019,000

973,000

1,051,000

-

-

 

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

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

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

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

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

 

1,019,000

973,000

1,051,000

-

-

 

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

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

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

 

 

 

 

BALANCE SHEET

 

 

KSP MANUFACTURING SDN. BHD.

 

ASSETS EMPLOYED:

 

 

 

 

 

FIXED ASSETS

9,271,000

9,350,000

10,038,000

10,570,000

10,889,000

 

 

 

 

 

 

TOTAL LONG TERM INVESTMENTS/OTHER ASSETS

-

-

-

-

0

 

 

 

 

 

 

 

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

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

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

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

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

TOTAL LONG TERM ASSETS

9,271,000

9,350,000

10,038,000

10,570,000

10,889,000

 

 

 

 

 

 

Stocks

7,466,000

9,696,000

13,444,000

-

-

Contract work-in-progress

315,000

163,000

-

-

-

Trade debtors

18,152,000

10,141,000

3,246,000

-

-

Other debtors, deposits & prepayments

773,000

189,000

82,000

-

-

Short term deposits

3,403,000

5,906,000

16,089,000

-

-

Amount due from holding company

128,000

38,000

31,000

-

-

Amount due from related companies

4,799,000

5,509,000

3,540,000

-

-

Cash & bank balances

177,000

428,000

233,000

-

-

Others

735,000

344,000

769,000

-

-

 

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

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

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

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

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

TOTAL CURRENT ASSETS

35,948,000

32,414,000

37,434,000

35,437,000

52,918,000

 

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

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

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

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

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

TOTAL ASSET

45,219,000

41,764,000

47,472,000

46,007,000

63,807,000

 

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

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

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

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

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

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Trade creditors

1,173,000

1,176,000

767,000

-

-

Other creditors & accruals

3,664,000

3,313,000

2,562,000

-

-

Amounts owing to holding company

3,668,000

2,164,000

2,097,000

-

-

Amounts owing to related companies

242,000

35,000

38,000

-

-

Other liabilities

368,000

620,000

-

-

-

 

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

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

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

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

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

TOTAL CURRENT LIABILITIES

9,115,000

7,308,000

5,464,000

7,731,000

8,548,000

 

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

26,833,000

25,106,000

31,970,000

27,706,000

44,370,000

 

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

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

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

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

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

TOTAL NET ASSETS

36,104,000

34,456,000

42,008,000

38,276,000

55,259,000

 

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

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

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

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

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

 

 

 

 

 

 

SHARE CAPITAL

 

 

 

 

 

Ordinary share capital

22,500,000

22,500,000

22,500,000

22,500,000

22,500,000

 

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

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

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

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

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

TOTAL SHARE CAPITAL

22,500,000

22,500,000

22,500,000

22,500,000

22,500,000

 

 

 

 

 

 

Capital reserve

-

-

1,700,000

1,700,000

-

Retained profit/(loss) carried forward

11,404,000

9,906,000

17,008,000

13,276,000

16,659,000

Capital redemption reserve

1,700,000

1,700,000

-

-

-

 

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

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

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

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

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

TOTAL RESERVES

13,104,000

11,606,000

18,708,000

14,976,000

31,659,000

 

 

 

 

 

 

 

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

35,604,000

34,106,000

41,208,000

37,476,000

54,159,000

 

 

 

 

 

 

Deferred taxation

500,000

350,000

800,000

-

-

 

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

500,000

350,000

800,000

800,000

1,100,000

 

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

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

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

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

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

 

36,104,000

34,456,000

42,008,000

38,276,000

55,259,000

 

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

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

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

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

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

 

 

 

 

 

 

 

 

 

FINANCIAL RATIO

 

 

KSP MANUFACTURING SDN. BHD.

 

TYPES OF FUNDS

 

 

 

 

 

Cash

3,580,000

6,334,000

16,322,000

-

-

Net Liquid Funds

3,580,000

6,334,000

16,322,000

-

-

Net Liquid Assets

19,367,000

15,410,000

18,526,000

27,706,000

44,370,000

Net Current Assets/(Liabilities)

26,833,000

25,106,000

31,970,000

27,706,000

44,370,000

Net Tangible Assets

36,104,000

34,456,000

42,008,000

38,276,000

55,259,000

Net Monetary Assets

18,867,000

15,060,000

17,726,000

26,906,000

43,270,000

PROFIT & LOSS ITEMS

 

 

 

 

 

Earnings Before Interest & Tax (EBIT)

5,699,000

7,049,000

10,730,000

-

-

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

6,718,000

8,022,000

11,781,000

-

-

BALANCE SHEET ITEMS

 

 

 

 

 

Total Borrowings

0

0

0

-

-

Total Liabilities

9,615,000

7,658,000

6,264,000

8,531,000

9,648,000

Total Assets

45,219,000

41,764,000

47,472,000

46,007,000

63,807,000

Net Assets

36,104,000

34,456,000

42,008,000

38,276,000

55,259,000

Net Assets Backing

35,604,000

34,106,000

41,208,000

37,476,000

54,159,000

Shareholders' Funds

35,604,000

34,106,000

41,208,000

37,476,000

54,159,000

Total Share Capital

22,500,000

22,500,000

22,500,000

22,500,000

22,500,000

Total Reserves

13,104,000

11,606,000

18,708,000

14,976,000

31,659,000

LIQUIDITY (Times)

 

 

 

 

 

Cash Ratio

0.39

0.87

2.99

-

-

Liquid Ratio

3.12

3.11

4.39

-

-

Current Ratio

3.94

4.44

6.85

4.58

6.19

WORKING CAPITAL CONTROL (Days)

 

 

 

 

 

Stock Ratio

17

28

34

-

-

Debtors Ratio

40

29

8

-

-

Creditors Ratio

3

4

2

-

-

SOLVENCY RATIOS (Times)

 

 

 

 

 

Gearing Ratio

0

0

0

-

-

Liabilities Ratio

0.27

0.22

0.15

0.23

0.18

Times Interest Earned Ratio

36.77

30.78

39.02

-

-

Assets Backing Ratio

1.60

1.53

1.87

1.70

2.46

PERFORMANCE RATIO (%)

 

 

 

 

 

Operating Profit Margin

3.35

5.27

7.23

9.29

5.98

Net Profit Margin

2.53

4.08

5.15

7.00

4.58

Return On Net Assets

15.78

20.46

25.54

37.95

16.93

Return On Capital Employed

15.78

20.46

25.54

37.95

16.93

Return On Shareholders' Funds/Equity

11.79

15.46

18.07

29.22

13.21

Dividend Pay Out Ratio (Times)

0.64

2.35

0.50

1.37

1.85

NOTES TO ACCOUNTS

 

 

 

 

 

Contingent Liabilities

0

0

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.64.97

UK Pound

1

Rs.100.55

Euro

1

Rs.73.99

 

INFORMATION DETAILS

 

Analysis Done by :

DIV

 

 

Report Prepared by :

ASH

 

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.