MIRA INFORM REPORT

 

 

Report No. :

338633

Report Date :

05.09.2015

 

IDENTIFICATION DETAILS

 

Name :

NIPPON ELECTRIC GLASS (MALAYSIA) SDN. BHD.

 

 

Registered Office :

Symphony House, Block D13, Pusat Dagangana Dana 1, Jalan Pju 1a/46, Level 8, 47301 Petaling Jaya, Selangor

 

 

Country :

Malaysia

 

 

Financials (as on) :

31.12.2014

 

 

Date of Incorporation :

26.01.1991

 

 

Com. Reg. No.:

211795-M

 

 

Legal Form :

Private Limited

 

 

Line of Business :

Manufacturing of cathode ray tube glass, glass fiber & other

 

 

No. of Employee :

500 [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.

:

211795-M

COMPANY NAME

:

NIPPON ELECTRIC GLASS (MALAYSIA) SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

26/01/1991

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

SYMPHONY HOUSE, BLOCK D13, PUSAT DAGANGANA DANA 1, JALAN PJU 1A/46, LEVEL 8, 47301 PETALING JAYA, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

:

LOT 1-7, LION INDUSTRIAL PARK, PERSIARAN JUBLI PERAK, 40706 SHAH ALAM, SELANGOR, MALAYSIA.

TEL.NO.

:

03-55430000

FAX.NO.

:

03-51910881

CONTACT PERSON

:

ZAINOL AMAN SHAH BIN MOHD NAJIB ( DIRECTOR )

INDUSTRY CODE

:

231

PRINCIPAL ACTIVITY

:

MANUFACTURING OF CATHODE RAY TUBE GLASS, GLASS FIBER & OTHER RELATED PRODUCTS

AUTHORISED CAPITAL

:

MYR 1,460,000,000.00 DIVIDED INTO 
ORDINARY SHARE 1,460,000,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 1,303,574,600.00 DIVIDED INTO 
ORDINARY SHARES 1,303,574,600 CASH OF MYR 1.00 EACH.

SALES

:

MYR 1,372,853,574 [2014]

NET WORTH

:

MYR 1,446,885,876 [2014]

M1000 OVERALL RANKING

:

512[2011]

M1000 INDUSTRY RANKING

:

23[2011]

STAFF STRENGTH

:

500 [2015]

BANKER (S)

:

MALAYAN BANKING BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

LIMITED

PAYMENT

:

GOOD

MANAGEMENT CAPABILITY

:

AVERAGE

COMMERCIAL RISK

:

LOW

CURRENCY EXPOSURE

:

HIGH

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) manufacturing of cathode ray tube glass, glass fiber & other related products.

 

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

 

According to the Malaysia 1000 publication, the Subject's ranking are as follows:

 

 

YEAR

2011

2009

2008

2005

2004

OVERALL RANKING

512

340

286

156

120

INDUSTRY RANKING

23

21

21

14

12

 

The ultimate holding company of the Subject is NIPPON ELECTRIC GLASS CO. LTD., a company incorporated in JAPAN.

 

Share Capital History

Date

Authorised Shared Capital

Issue & Paid Up Capital

05/03/2015

MYR 1,460,000,000.00

MYR 1,303,574,600.00

29/03/2011

MYR 1,460,000,000.00

MYR 1,270,383,500.00

17/02/2011

MYR 1,460,000,000.00

MYR 1,214,775,500.00

28/12/2010

MYR 1,460,000,000.00

MYR 1,140,385,500.00

04/11/2010

MYR 1,460,000,000.00

MYR 1,027,999,500.00

21/10/2010

MYR 1,460,000,000.00

MYR 913,570,500.00

28/09/2010

MYR 1,460,000,000.00

MYR 801,847,500.00

25/08/2010

MYR 1,460,000,000.00

MYR 635,023,500.00

18/06/2010

MYR 1,460,000,000.00

MYR 524,314,500.00

17/08/1998

MYR 360,000,000.00

MYR 358,800,000.00

01/11/1995

MYR 350,000,000.00

MYR 348,800,000.00

05/09/1995

MYR 350,000,000.00

MYR 260,000,000.00

08/07/1994

MYR 180,000,000.00

MYR 175,000,000.00

08/05/1994

MYR 180,000,000.00

MYR 127,500,000.00

25/02/1992

MYR 90,000,000.00

MYR 80,000,000.00

07/02/1992

MYR 90,000,000.00

MYR 64,000,000.00

22/11/1991

MYR 65,000,000.00

MYR 54,000,000.00

02/10/1991

MYR 65,000,000.00

MYR 39,000,000.00

15/07/1991

MYR 35,000,000.00

MYR 34,000,000.00

18/06/1991

MYR 20,025,000.00

MYR 16,000,000.00

24/04/1991

MYR 20,025,000.00

MYR 6,000,000.00

06/02/1991

MYR 25,000.00

MYR 2.00

 

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

 

Current Shareholder(s) :

Name

Address

IC/PP/Loc No

Shareholding

(%)

NIPPON ELECTRIC GLASS CO LTD

7-1, SEIRAN 2-CHOME, OTSU-SHIGA, 520-8639, JAPAN.

XLZ000008797

1,303,574,600.00

100.00

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

------

1,303,574,600.00

100.00

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

=====

+ Also Director

 

 

DIRECTORS

 

DIRECTOR 1

 

Name Of Subject

:

SHIGERU GOTO

Address

:

UNIR 37-20-2, SRI PENAGA CONDOMINIUM, JALAN MEDANG SERAI, BUKIT BANDARAYA, 59100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

TZ1021858

Nationality

:

JAPANESE

Date of Appointment

:

01/04/2011

 

DIRECTOR 2

 

Name Of Subject

:

MR. ZAINOL AMAN SHAH BIN MOHD NAJIB

Address

:

2, JALAN ESEI DUA U2/41, TTDI JAYA, 40150 SHAH ALAM, SELANGOR, MALAYSIA.

IC / PP No

:

A2000096

New IC No

:

710828-02-5037

Date of Birth

:

28/08/1971

Nationality

:

MALAYSIAN

Date of Appointment

:

01/04/2014

 

DIRECTOR 3

 

Name Of Subject

:

ICHIRO NAKANO

Address

:

UNIT 28-2-4, CASCADIUM CONDOMINIUM, JALAN PENAGA, BUKIT BANDARAYA, 59100 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

IC / PP No

:

TR2308687

Nationality

:

JAPANESE

Date of Appointment

:

01/10/2014

MANAGEMENT

 

 

 

1)

Name of Subject

:

SHIGERU GOTO

Position

:

MANAGING DIRECTOR

 

2)

Name of Subject

:

ZAINOL AMAN SHAH BIN MOHD NAJIB

Position

:

DIRECTOR

 

 

 

AUDITOR

 

Auditor

:

PRICEWATERHOUSECOOPERS

Auditor' Address

:

1 SENTRAL, JALAN TRAVERS, KUALA LUMPUR CENTRAL, P.O.BOX 10192, LEVEL 10, 50706 KUALA LUMPUR, WILAYAH PERSEKUTUAN, MALAYSIA.

 

 

 

COMPANY SECRETARIES

 

1)

Company Secretary

:

MS. CHAN SAU LENG

IC / PP No

:

A1278792

New IC No

:

690409-08-5646

Address

:

14, JALAN HELANG 3, BANDAR PUCHONG JAYA, 47170 PUCHONG JAYA, SELANGOR, MALAYSIA.

 

 

 

BANKING


Banking relations are maintained principally with :

1)

Name

:

MALAYAN BANKING 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

Percentage

:

30%

Overseas

:

YES

Percentage

:

70%

Import Countries

:

EUROPE,ASIA



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

Percentage

:

10%

Domestic Markets

:

MALAYSIA

Overseas

:

YES

Percentage

:

90%

Export Market

:

WORLDWIDE

Credit Term

:

N/A

Payment Mode

:

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

Type of Customer

:

DEALERS,DISTRIBUTORS

 

 

 

OPERATIONS

 

Products manufactured

:

CATHODE RAY TUBE GLASS, GLASS FIBER & OTHER RELATED PRODUCTS

Award

:

1 ) MS ISO 9001 : 2000 Year :2004
2 ) MS ISO 14001 : 2004 Year :2001

Competitor(s)

:

IWAKI GLASS (MALAYSIA) SDN BHD
KIG GLASS INDUSTRIAL BHD
MSG SAFETY GLASS SDN BHD
OZONE GLASS DESIGN SDN BHD
SEOWON PRECISION GLASS (M) SDN BHD

Member(s) / Affiliate(s)

:

FEDERATION OF MALAYSIAN MANUFACTURERS (FMM)

SMI ASSOCIATION OF MALAYSIA

SMALL & MEDIUM ENTERPRISE

Ownership of premises

:

OWNED

 

Total Number of Employees:

 

YEAR

2015

2014

2013

2012

2011

GROUP

N/A

N/A

N/A

N/A

N/A

COMPANY

500

500

500

500

520

 

Branch

:

NO

Other Information:


The Subject is principally engaged in the (as a / as an) manufacturing of cathode ray tube glass, glass fiber & other related products. 

The Subject's products range includes glass bulbs for CRT, glasstubes, chopped strands, glass fibre and etc.

We were informed that the Subject's products are used in televisions, computers, microwaves and others.

Besides that the Subject also undertakes manufacturing of internal glass for the microwaves mainly for SAMSUNG.

The Subject utilizes the advanced automated and semi-automated machinery to ensure production of high quality products.

The Subject's product is developed with the characteristics, shapes, and high levels of quality and precision that optimally meet the needs of customers. 

High-Tech glass is used in information devices such as flat panel displays, cellular phones, and digital cameras. It is also increasingly found in everything from kitchen appliances to automobiles and building materials.

The Subject's product range can be divide into 4 :-

1. Glass for Display Devices
- Glass for Liquid Crystal Displays
- Glass for Organic LED Display
- Glass for Cathode Ray Tubes

2. Glass for Electronic Devices
- Glass for Electronic Devices
- Glass for Optical Devices

3. Glass Fiber

4. Building Materials, Heat-Resistant Glass, and More
- Glass for Building Materials
- Heat-Resistant Glass
- Glass for Lighting, Medical, and More 


CURRENT INVESTIGATION

 

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client

:

N/A

Current Telephone Number

:

03-55430000

Match

:

N/A

Address Provided by Client

:

LOT 1-7, LION INDUSTRIAL PARK, PERSIARAN JUBLI PERAK,40706,SHAH ALAM,SELANGOR.

Current Address

:

LOT 1-7, LION INDUSTRIAL PARK, PERSIARAN JUBLI PERAK, 40706 SHAH ALAM, SELANGOR, MALAYSIA.

Match

:

YES

Latest Financial Accounts

:

YES

 

Other Investigations


On 25th August 2015, we contacted one of the staff from the Subject and he provided some information.



FINANCIAL ANALYSIS

 

 

Profitability

Turnover

:

Increased

[

2010 - 2014

]

Profit/(Loss) Before Tax

:

Increased

[

2010 - 2014

]

Return on Shareholder Funds

:

Unfavourable

[

(0.82%)

]

Return on Net Assets

:

Unfavourable

[

(0.31%)

]

The Subject's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.Higher losses before tax during the year could be due to the higher operating costs incurred. The Subject's unfavourable returns on shareholders' funds indicate the management's inefficiency in utilising its assets to generate returns.

Working Capital Control

Stock Ratio

:

Favourable

[

53 Days

]

Debtor Ratio

:

Favourable

[

38 Days

]

Creditors Ratio

:

Favourable

[

26 Days

]

The Subject's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The favourable debtors' days could be due to the good credit control measures implemented by the Subject. The Subject had a favourable creditors' ratio where the Subject could be taking advantage of the cash discounts and also wanting to maintain goodwill with its creditors.

Liquidity

Liquid Ratio

:

Unfavourable

[

0.69 Times

]

Current Ratio

:

Unfavourable

[

1.11 Times

]

A low liquid ratio means that the Subject may be facing working capital deficiency. If the Subject cannot obtain additional financing or injection of fresh capital, it may face difficulties in meeting its short term obligations.

Solvency

Interest Cover

:

Unfavourable

[

(0.73 Times)

]

Gearing Ratio

:

Favourable

[

0.15 Times

]

The Subject incurred losses in the year. It did not generate sufficient income to service its interest.  If the situation does not improve, the Subject may be vulnerable to default in servicing the interest. The Subject was lowly geared thus it had a low financial risk. The Subject was mainly financed by its shareholders' funds and internally generated funds. In times of economic slowdown / downturn, the Subject being a lowly geared company, will be able to compete better than those companies which are highly geared in the same industry.

Overall Assessment :

Although the Subject's turnover increased its profits however showed a reverse trend. The losses could be due to the management's failure to maintain its competitiveness in the market. Due to its weak liquidity position, the Subject will be faced with problems in meeting all its short term obligations if no short term loan is obtained or additional capital injected into the Subject. The Subject's interest cover was negative, indicating that it did not generate sufficient income to service its interest. If its result does not show impressive improvements or succeed obtaining short term financing or capital injection, it may not be able to service its interest and repay the loans. The Subject as a lowly geared company, will be more secured compared to those highly geared companies. It has the ability to meet all its long term obligations.

Overall financial condition of the Subject : 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

231 : Manufacture of glass and glass products

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 1991, the Subject is a Private Limited company, focusing on manufacturing of cathode ray tube glass, glass fiber & other related products. 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 is a large entity with strong capital position of MYR 1,303,574,600. We are confident with the Subject's business and its future growth prospect. Having strong support from its shareholder has enabled the Subject to remain competitive despite the challenging business environment. 

Over the years, the Subject has established an extensive clientele base in the market. Besides catering to the local market, the Subject has penetrated into other countries. With the contribution of both local and overseas customers, the Subject is likely to be exposed to lower commercial risk. Hence, we believe that the Subject has better business expansion opportunities in the future. Being a large entity, the Subject has a steady workforce of 500 personnel to support its business operations. Its future prospects seem to be fairly good as its business operations are running relatively stable. 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. To improve its quality products and services, we noted that the Subject has received a number of certifications & awards. This will improve the customer's confidence level to the Subject. 

Despite the higher turnover, the Subject suffered pre-tax losses which reflected a highly competitive business environment. The Subject has generated an unfavourable return on shareholders' funds indicating that the management was inefficient in utilising its funds to generate return. Due to its weak liquidity position, the Subject may face working capital deficiency in meeting its short term financial obligations if no fresh capital are injected into the Subject. Being a lowly geared company, the Subject is exposed to low financial risk as it is mainly dependent on its internal funds to finance its business needs. Given a positive net worth standing at MYR 1,446,885,876, 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 normally.

 

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

2011-12-31

2010-12-31

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

FULL

FULL

Currency

MYR

MYR

MYR

MYR

MYR

TURNOVER

1,372,853,574

1,269,668,704

1,205,789,034

1,203,518,305

1,017,528,370

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

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

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

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

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

Total Turnover

1,372,853,574

1,269,668,704

1,205,789,034

1,203,518,305

1,017,528,370

Costs of Goods Sold

(1,150,435,980)

(1,114,963,965)

(1,189,895,967)

(1,181,440,081)

(863,188,106)

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

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

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

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

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

Gross Profit

222,417,594

154,704,739

15,893,067

22,078,224

154,340,264

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

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

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

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

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

PROFIT/(LOSS) FROM OPERATIONS

(11,814,631)

(6,432,894)

(155,592,202)

(172,568,414)

(9,836,620)

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

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

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

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

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

PROFIT/(LOSS) BEFORE TAXATION

(11,814,631)

(6,432,894)

(155,592,202)

(172,568,414)

(9,836,620)

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

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

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

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

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

PROFIT/(LOSS) AFTER TAXATION

(11,814,631)

(6,432,894)

(155,592,202)

(172,568,414)

(9,836,620)

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

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

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

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

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

RETAINED PROFIT/(LOSS) BROUGHT FORWARD

As previously reported

155,125,907

161,558,801

317,151,003

489,719,417

499,556,037

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

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

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

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

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

As restated

155,125,907

161,558,801

317,151,003

489,719,417

499,556,037

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

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

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

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

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

PROFIT AVAILABLE FOR APPROPRIATIONS

143,311,276

155,125,907

161,558,801

317,151,003

489,719,417

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

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

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

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

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

RETAINED PROFIT/(LOSS) CARRIED FORWARD

143,311,276

155,125,907

161,558,801

317,151,003

489,719,417

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

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

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

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

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

INTEREST EXPENSE (as per notes to P&L)

Loan from holding company

2,384,651

2,983,296

3,832,875

3,919,276

-

Others

4,456,244

5,838,454

4,306,876

6,358,335

10,988,486

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

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

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

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

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

6,840,895

8,821,750

8,139,751

10,277,611

10,988,486

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

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

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

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

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

DEPRECIATION (as per notes to P&L)

143,512,756

167,264,792

209,691,010

245,007,928

131,884,863

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

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

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

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

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

143,512,756

167,264,792

209,691,010

245,007,928

131,884,863

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

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

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

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

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

 

 

 

BALANCE SHEET

 

 

 

ASSETS EMPLOYED:

FIXED ASSETS

1,575,921,335

1,404,776,608

1,507,483,575

1,652,264,442

1,671,094,058

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

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

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

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

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

TOTAL LONG TERM ASSETS

1,575,921,335

1,404,776,608

1,507,483,575

1,652,264,442

1,671,094,058

Stocks

200,611,934

183,726,297

253,110,940

281,372,429

224,566,704

Trade debtors

141,089,456

147,007,295

101,838,000

109,583,274

123,100,300

Other debtors, deposits & prepayments

5,046,889

1,878,067

1,560,135

3,685,979

1,307,752

Short term deposits

-

-

-

1,100,000

1,100,000

Short term loans & advances

-

-

-

-

45,429,310

Amount due from related companies

64,128,613

69,305,268

36,789,677

42,559,268

14,127,567

Cash & bank balances

119,664,792

72,739,309

50,137,670

40,427,832

118,958,711

Others

-

-

1,842,858

43,014,713

375,375

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

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

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

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

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

TOTAL CURRENT ASSETS

530,541,684

474,656,236

445,279,280

521,743,495

528,965,719

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

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

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

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

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

TOTAL ASSET

2,106,463,019

1,879,432,844

1,952,762,855

2,174,007,937

2,200,059,777

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

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

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

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

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

CURRENT LIABILITIES

Trade creditors

81,308,127

69,570,779

78,674,948

71,322,472

76,026,321

Other creditors & accruals

162,629,027

41,760,037

26,798,161

14,673,404

43,782,739

Short term borrowings/Term loans

14,785,320

31,705,960

36,047,440

41,218,760

38,496,480

Other borrowings

29,249,220

45,804,460

42,459,040

37,553,060

35,072,880

Amounts owing to holding company

123,128,100

49,490,827

92,088,966

57,733,895

115,995,850

Other liabilities

66,723,554

35,150,557

-

-

-

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

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

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

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

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

TOTAL CURRENT LIABILITIES

477,823,348

273,482,620

276,068,555

222,501,591

309,374,270

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

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

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

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

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

NET CURRENT ASSETS/(LIABILITIES)

52,718,336

201,173,616

169,210,725

299,241,904

219,591,449

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

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

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

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

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

TOTAL NET ASSETS

1,628,639,671

1,605,950,224

1,676,694,300

1,951,506,346

1,890,685,507

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

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

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

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

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

SHARE CAPITAL

Ordinary share capital

1,303,574,600

1,303,574,600

1,303,574,600

1,303,574,600

1,140,385,500

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

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

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

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

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

TOTAL SHARE CAPITAL

1,303,574,600

1,303,574,600

1,303,574,600

1,303,574,600

1,140,385,500

Retained profit/(loss) carried forward

143,311,276

155,125,907

161,558,801

317,151,003

489,719,417

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

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

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

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

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

TOTAL RESERVES

143,311,276

155,125,907

161,558,801

317,151,003

489,719,417

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

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

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

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

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

SHAREHOLDERS' FUNDS/EQUITY

1,446,885,876

1,458,700,507

1,465,133,401

1,620,725,603

1,630,104,917

Long term loans

-

15,852,980

54,071,160

103,046,900

134,737,680

Other long term borrowings

176,781,000

126,917,830

153,629,060

224,218,650

-

Retirement benefits provision

4,972,795

4,478,907

3,860,679

3,515,193

3,087,830

Others

-

-

-

-

122,755,080

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

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

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

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

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

TOTAL LONG TERM LIABILITIES

181,753,795

147,249,717

211,560,899

330,780,743

260,580,590

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

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

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

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

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

1,628,639,671

1,605,950,224

1,676,694,300

1,951,506,346

1,890,685,507

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

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

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

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

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

 

 

 

FINANCIAL RATIO

 

 

 

TYPES OF FUNDS

Cash

119,664,792

72,739,309

50,137,670

41,527,832

120,058,711

Net Liquid Funds

119,664,792

72,739,309

50,137,670

41,527,832

120,058,711

Net Liquid Assets

(147,893,598)

17,447,319

(83,900,215)

17,869,475

(4,975,255)

Net Current Assets/(Liabilities)

52,718,336

201,173,616

169,210,725

299,241,904

219,591,449

Net Tangible Assets

1,628,639,671

1,605,950,224

1,676,694,300

1,951,506,346

1,890,685,507

Net Monetary Assets

(329,647,393)

(129,802,398)

(295,461,114)

(312,911,268)

(265,555,845)

PROFIT & LOSS ITEMS

Earnings Before Interest & Tax (EBIT)

(4,973,736)

2,388,856

(147,452,451)

(162,290,803)

1,151,866

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

138,539,020

169,653,648

62,238,559

82,717,125

133,036,729

BALANCE SHEET ITEMS

Total Borrowings

220,815,540

220,281,230

286,206,700

406,037,370

208,307,040

Total Liabilities

659,577,143

420,732,337

487,629,454

553,282,334

569,954,860

Total Assets

2,106,463,019

1,879,432,844

1,952,762,855

2,174,007,937

2,200,059,777

Net Assets

1,628,639,671

1,605,950,224

1,676,694,300

1,951,506,346

1,890,685,507

Net Assets Backing

1,446,885,876

1,458,700,507

1,465,133,401

1,620,725,603

1,630,104,917

Shareholders' Funds

1,446,885,876

1,458,700,507

1,465,133,401

1,620,725,603

1,630,104,917

Total Share Capital

1,303,574,600

1,303,574,600

1,303,574,600

1,303,574,600

1,140,385,500

Total Reserves

143,311,276

155,125,907

161,558,801

317,151,003

489,719,417

LIQUIDITY (Times)

Cash Ratio

0.25

0.27

0.18

0.19

0.39

Liquid Ratio

0.69

1.06

0.70

1.08

0.98

Current Ratio

1.11

1.74

1.61

2.34

1.71

WORKING CAPITAL CONTROL (Days)

Stock Ratio

53

53

77

85

81

Debtors Ratio

38

42

31

33

44

Creditors Ratio

26

23

24

22

32

SOLVENCY RATIOS (Times)

Gearing Ratio

0.15

0.15

0.20

0.25

0.13

Liabilities Ratio

0.46

0.29

0.33

0.34

0.35

Times Interest Earned Ratio

(0.73)

0.27

(18.12)

(15.79)

0.10

Assets Backing Ratio

1.25

1.23

1.29

1.50

1.66

PERFORMANCE RATIO (%)

Operating Profit Margin

(0.86)

(0.51)

(12.90)

(14.34)

(0.97)

Net Profit Margin

(0.86)

(0.51)

(12.90)

(14.34)

(0.97)

Return On Net Assets

(0.31)

0.15

(8.79)

(8.32)

0.06

Return On Capital Employed

(0.31)

0.15

(8.79)

(8.32)

0.06

Return On Shareholders' Funds/Equity

(0.82)

(0.44)

(10.62)

(10.65)

(0.60)

Dividend Pay Out Ratio (Times)

0

0

0

0

0

NOTES TO ACCOUNTS

Contingent Liabilities

0

0

0

0

0

 

FOREIGN EXCHANGE RATES

 

Currency

Unit

Indian Rupees

US Dollar

1

Rs.66.40

UK Pound

1

Rs.101.19

Euro

1

Rs.73.89

 

 

INFORMATION DETAILS

 

Analysis Done by :

TRI

 

 

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.