MIRA INFORM REPORT

Report No. :	510659
Report Date :	24.05.2018

IDENTIFICATION DETAILS

Name :	ADELTEC (MALAYSIA) SDN. BHD.
Registered Office :	68-3A, Jalan Pasar, 41400 Klang, Selangor
Country :	Malaysia
Financials (as on) :	31.12.2016
Date of Incorporation :	21.07.1997
Com. Reg. No.:	439750-M
Legal Form :	Private Limited (Limited By Share)
Line of Business :	The subject is principally engaged in the trading of electrical testing and measurement equipment.
No. of Employees :	11 [2018]

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23^rd January 2017)

MIRA’s Rating :

A

Credit Rating	Explanation	Rating Comments
A	Acceptable Risk	Business dealings permissible with moderate risk of default

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

Country Name	Previous Rating (30.09.2017)	Current Rating (31.12.2017)
Malaysia	A2	A2

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderately Low Risk	B1
Moderate Risk	B2
Moderately High Risk	C1
High Risk	C2
Very High Risk	D

MALAYSIA - ECONOMIC OVERVIEW

Malaysia, an upper middle-income country, has transformed itself since the 1970s from a producer of raw materials into a multi-sector economy. Under current Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020 and to move further up the value-added production chain by attracting investments in high technology, knowledge-based industries and services. NAJIB's Economic Transformation Program 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. Domestic demand continues to anchor economic growth, supported mainly by private consumption, which accounts for 53% of GDP. Nevertheless, exports - particularly of electronics, oil and gas, and palm oil - remain a significant driver of the economy. In 2015, gross exports of goods and services were equivalent to 73% of GDP. The oil and gas sector supplied about 22% of government revenue in 2015, down significantly from prior years amid a decline in commodity prices and diversification of government revenues. Malaysia has embarked on a fiscal reform program aimed at achieving a balanced budget by 2020, including rationalization of subsidies and the 2015 introduction of a 6% value added tax. Sustained low commodity prices throughout the period not only strained government finances, but also shrunk Malaysia’s current account surplus and weighed heavily on the Malaysian ringgit, which was among the region’s worst performing currencies during 2013-17. The ringgit hit new lows following the US presidential election amid a broader selloff of emerging market assets.

Bank Negara Malaysia (the central bank) maintains adequate foreign exchange reserves; a well-developed regulatory regime has limited Malaysia's exposure to riskier financial instruments, although it remains vulnerable to volatile global capital flows. In order to increase Malaysia’s competitiveness, Prime Minister 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, policies that favor and advance the economic condition of ethnic Malays.

Malaysia signed the 12-nation Trans-Pacific Partnership (TPP) free trade agreement in February 2016, although the future of the TPP remains unclear following the US withdrawal from the agreement. Along with nine other ASEAN members, Malaysia established the ASEAN Economic Community in 2015, which aims to advance regional economic integration.

Source : CIA

EXECUTIVE SUMMARY

REGISTRATION NO.

:

439750-M

GST NO.

:

000716120064

COMPANY NAME

:

ADELTEC (MALAYSIA) SDN. BHD.

FORMER NAME

:

N/A

INCORPORATION DATE

:

21/07/1997

COMPANY STATUS

:

EXIST

LEGAL FORM

:

PRIVATE LIMITED (LIMITED BY SHARE)

LISTED STATUS

:

NO

REGISTERED ADDRESS

:

68-3A, JALAN PASAR, 41400 KLANG, SELANGOR, MALAYSIA.

BUSINESS ADDRESS

:

UNIT D3-5-2, (2ND FLOOR), BLOCK D3, DANA 1 COMMERCIAL CENTRE, JALAN PJU 1A/46, 47301 PETALING JAYA, SELANGOR, MALAYSIA.

TEL.NO.

:

03-78429168

FAX.NO.

:

03-78426168

CONTACT PERSON

:

RAYMOND CHONG YUET TWEEN ( DIRECTOR )

INDUSTRY CODE

:

465

PRINCIPAL ACTIVITY

:

TRADING OF ELECTRICAL TESTING AND MEASUREMENT EQUIPMENT

AUTHORISED CAPITAL

:

MYR 500,000.00 DIVIDED INTO 
ORDINARY SHARE 500,000.00 OF MYR 1.00 EACH.

ISSUED AND PAID UP CAPITAL

:

MYR 379,824.00 DIVIDED INTO 
ORDINARY SHARES 379,824 CASH OF MYR 1.00 EACH.

SALES

:

MYR 5,696,151 [2016]

NET WORTH

:

MYR 1,319,127 [2016]

STAFF STRENGTH

:

11 [2018]

BANKER (S)

:

HONG LEONG BANK BHD

LITIGATION

:

CLEAR

DEFAULTER CHECK

:

CLEAR

FINANCIAL CONDITION

:

STABLE

PAYMENT

:

NO COMPLAINTS

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

The Subject is principally engaged in the (as a / as an) trading of electrical testing and measurement equipment.

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

complete.

The immediate holding company of the Subject is EXTECH ELECTRONICS CO LTD, a company incorporated in TAIWAN.

Former Address(es)

Address	As At Date
UNIT W-7-1,WEST WING, SUBANG SQUARE BUSINESS PARK, J.SS 15/4B;SELANGOR, 47500, SELANGOR, MALAYSIA	15/02/2013

Share Capital History

Date	Authorised Shared Capital	Issue & Paid Up Capital
09/04/2001	MYR 500,000.00	MYR 379,824.00
21/07/1997	MYR 100,000.00	MYR 2.00

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

Current Shareholder(s) :

Name	Address	IC/PP/Loc No	Shareholding	(%)
EXTECH ELECTRONICS CO LTD	4F, NO 3,5, LANE 194, HUAN HO ST HSI CHIH CITY, TAIPEI COUNTRY, R.O.C TAIWAN	XLZ17038	379,824.00	100.00
			---------------	------
			379,824.00	100.00
			============	=====

+ Also Director

DIRECTORS

DIRECTOR 1

Name Of Subject	:	MR. RAYMOND CHONG YUET TWEEN
Address	:	2, LORONG BATU AM 18 B, BANDAR BUKIT TINGGI, 41200 KLANG, SELANGOR, MALAYSIA.
IC / PP No	:	A0697849
New IC No	:	670623-10-5021
Date of Birth	:	23/06/1967
Nationality	:	MALAYSIAN
Date of Appointment	:	21/07/1997

INTEREST CHECK

Interest in companies	:	see below
Interest in business	:	none in our databank
Former interest	:	none in our databank

INTEREST IN COMPANY

No	Local No	Company	Designation	App Date	Shareholding		Profit/(loss) After Tax	Financial Year	Status	As At
					No.	%
1	439750M	ADELTEC (MALAYSIA) SDN. BHD.	Director	21/07/1997	0.00	-	MYR386,667.00	2016	-	23/04/2018
2	1030749D	M-THREE ENTERTAINMENT SDN. BHD.	Director	24/09/2013	930.00	20.67	MYR(2,415.00)	2014	Disolved by Registrar	23/04/2018

DIRECTOR 2

Name Of Subject	:	MICHAEL ROSS BRAVERMAN
Address	:	D3-5-2 ( 2ND FLOOR), DANA 1, COMMERCIAL CENTRE, JALAN PJU 1A/46, 47301 PETALING JAYA, SELANGOR, MALAYSIA.
IC / PP No	:	211999831
Nationality	:	AMERICAN
Date of Appointment	:	14/02/2014

INTEREST CHECK

Interest in companies	:	see below
Interest in business	:	none in our databank
Former interest	:	none in our databank

INTEREST IN COMPANY

No	Local No	Company	Designation	App Date	Shareholding		Profit/(loss) After Tax	Financial Year	Status	As At
					No.	%
1	439750M	ADELTEC (MALAYSIA) SDN. BHD.	Director	14/02/2014	0.00	-	MYR386,667.00	2016	-	23/04/2018

FORMER DIRECTOR(S)

Name	Address	IC/PP No	Appointed Date	Withdrawn Date
SU YU-MING	45,LEBOH P.PINANG 4, KAW.18,OFF JALAN MERU, SELANGOR	M14555331	12/02/2001	24/08/2004
MA,CHENG-FANG	45,LEBOH PULAU PINANG 4, KAW.18, OFF JALAN MERU, KLANG,SEL., KLANG, SELANGOR, MALAYSIA	131320704	24/08/2004	20/03/2009
CHEN, PIN-YI	D3-5-2 (2ND FLOOR), DANA 1 COMMERCIAL CENTRE, JALAN PJU 1A/46, PETALING JAYA, SELANGOR, MALAYSIA	131246580	20/03/2009	14/02/2014
CHANG THIEN FATT JOHN		430509055187	21/07/1997	12/02/2001

Note : The above information was generated from our database.

MANAGEMENT

1)	Name of Subject	:	RAYMOND CHONG YUET TWEEN
	Position	:	DIRECTOR

AUDITOR

Auditor	:	SHAISTRI & CO.
Auditor' Address	:	JALAN KAPAR, 41400 KLANG, SELANGOR, MALAYSIA.

COMPANY SECRETARIES

1)	Company Secretary	:	MR. LIM AH HUAT
	IC / PP No	:	7083258
	New IC No	:	630627-10-7239
	Address	:	44,LINTANG SUNGAI KERAMAT 9-D, TMN KLANG UTAMA, 41200 KLANG, SELANGOR, MALAYSIA.

BANKING

Banking relations are maintained principally with :

1)

Name

:

HONG LEONG BANK BHD

ENCUMBRANCE (S)

Charge No	Creation Date	Charge Description	Chargee Name	Total Charge	Status
1	17/09/1999	MEMORANDUM OF FIXED DEPOSIT AND LETTER OF SET-OFF	MALAYAN BANKING BERHAD	MYR 20,000.00	Unsatisfied

CIVIL LITIGATION CHECK - SUBJECT COMPANY AS A DEFENDANT

* A check has been conducted in our databank against 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.

CRIMINAL RECORDS CHECK - SUBJECT COMPANY AS A DEFENDANT

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

No criminal record was found in our databank.

CIVIL LITIGATION CHECK - SUBJECT COMPANY AS A PLAINTIFF

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

No plaintiff record was found in our databank.

CRIMINAL RECORDS CHECK - SUBJECT COMPANY AS A PLAINTIFF

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

No plaintiff record 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 listed by our customers and debtors that have been placed or assigned to us for collection. 

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

RED ALERT FROM CENTRAL BANK OF MALAYSIA

* A check has been conducted with the Central Bank of Malaysia whether the Subject has carried out any illegal or suspicious financial activities.

The Subject has not been carried out any illegal money services business without licence under the Money Services Business Act 2011.

The Subject has not been placed under the Financial Consumer Alert list by the Central Bank of Malaysia.

INVESTOR ALERT BY SECURITIES COMMISSION MALAYSIA & BURSA MALAYSIA

* A check has been conducted with the Securities Commission Malaysia whether the Subject has involved in any unlicensed capital market activities under the Securities Laws and Bursa Malaysia should the Subject is listed as Practice Note (PN) 17 or Guidance Note (GN) 3.

The Subject has not been carried out any unlicensed capital market activities.

PAYMENT RECORD

SOURCES OF RAW MATERIALS:
Local	:	N/A
Overseas	:	N/A

The Subject refused to disclose its suppliers. 

CLIENTELE

Local	:	YES
Domestic Markets	:	MALAYSIA
Overseas	:	YES
Export Market	:	ASIA JAPAN KOREA
Credit Term	:	AS AGREED
Payment Mode	:	CHEQUES TELEGRAPHIC TRANSFER (TT)
Type of Customer	:	ELECTRICAL & ELECTRONIC INDUSTRIES

OPERATIONS

Goods Traded

:

ELECTRICAL TESTING AND MEASUREMENT EQUIPMENT

Member(s) / Affiliate(s)

:

SMI ASSOCIATION OF MALAYSIA

Total Number of Employees:
YEAR	2018	2017
GROUP	N/A	N/A
COMPANY	11	11

Branch

:

NO

Other Information:

The Subject is principally engaged in the (as a / as an) trading of electrical testing and measurement equipment. 

The Subject's electrical safety test solution is provided to test electrical safety of electronic components, information technology products, home appliances, audio and video apparatus, lamps and etc. 

It is to be used in Research & Development, Quality Assurance, Production, and Laboratory. 

RECENT DEVELOPMENT

We have checked with the Malaysian National News Agency's (BERNAMA) database, but no recent development was noted during the time of inspection.

CURRENT INVESTIGATION

Latest fresh investigations carried out on the Subject indicated that :

Telephone Number Provided By Client	:	N/A
Current Telephone Number	:	03-78429168
Match	:	N/A
Address Provided by Client	:	UNIT D3-5-2 (2ND FLOOR) BLOCK D3, DANA 1 COMMERCIAL CENTRE,JALAN PJU 1A/46, 47301 PETALING JAYA, SELANGOR
Current Address	:	UNIT D3-5-2, (2ND FLOOR), BLOCK D3, DANA 1 COMMERCIAL CENTRE, JALAN PJU 1A/46, 47301 PETALING JAYA, SELANGOR, MALAYSIA.
Match	:	YES
Latest Financial Accounts	:	YES

Other Investigations

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

FINANCIAL ANALYSIS

Profitability
Turnover	:	Increased	[	2012 - 2016	]
Profit/(Loss) Before Tax	:	Increased	[	2012 - 2016	]
Return on Shareholder Funds	:	Acceptable	[	29.31%	]
Return on Net Assets	:	Favourable	[	36.15%	]
The Subject's turnover increased steadily as the demand for its products / services increased due to the goodwill built up over the years.The higher profit could be attributed to the increase in turnover. The Subject's management had generated acceptable return for its shareholders using its assets.
Liquidity
Current Ratio	:	Acceptable	[	1.34 Times	]
The Subject has an adequate liquidity position with its current liabilities well covered by its current assets. With its net current assets, the Subject should be able to repay its short term obligations.
Solvency
Liability Ratio	:	Unfavourable	[	2.59 Times	]
The Subject has high liabilities ratio and it may face financial difficulties if no additional capital is injected.
Overall Assessment :
Generally, the Subject's performance has improved with higher turnover and profit. 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. The Subject's liabilities 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 : STABLE

MALAYSIA ECONOMIC / INDUSTRY OUTLOOK

Major Economic Indicators:	2014	2015	2016	2017*	2018**
Population ( Million)	30.0	31.0	31.6	32.1	32.9
Gross Domestic Products ( % )	6.0	4.6	4.2	5.3	5.4
Domestic Demand ( % )	6.4	6.2	4.3	6.3	6.4
Private Expenditure ( % )	7.9	6.9	7.8	7.4	7.3
Consumption ( % )	6.5	6.1	5.1	6.9	6.8
Investment ( % )	12.0	8.1	10.0	9.3	8.9
Public Expenditure ( % )	2.3	4.2	3.3	5.3	5.5
Consumption ( % )	2.1	4.3	2.0	2.7	1.3
Investment ( % )	2.6	(1.0)	1.1	3.4	3.8
Balance of Trade ( MYR Million )	82,480	91,577	88,145	94,593	96,993
Government Finance ( MYR Million )	(37,414)	(37,194)	(38,401)	(39,887)	(39,790)
Government Finance to GDP / Fiscal Deficit ( % )	(3.4)	(3.2)	(3.1)	(3.0)	(2.8)
Inflation ( % Change in Composite CPI)	3.2	4.0	2.1	3.5	3.0
Unemployment Rate	2.9	3.1	3.4	3.4	3.3
Net International Reserves ( MYR Billion )	428	441	451	450	423
Average Risk-Weighted Capital Adequacy Ratio ( % )	4.00	3.50	-	-	-
Average 3 Months of Non-performing Loans ( % )	2.10	2.00	1.90	-	-
Average Base Lending Rate ( % )	6.85	6.79	6.81	6.73	-
Business Loans Disbursed( % )	18.6	2.2	-	-	-
Foreign Investment ( MYR Million )	43,486.6	43,435.0	-	-	-
Consumer Loans ( % )	-	-	-	-	-
Registration of New Companies ( No. )	49,203	45,658	43,255	47,871	-
Registration of New Companies ( % )	6.1	(7.2)	(5.3)	10.7	-
Liquidation of Companies ( No. )	33,226	34,667	36,778	38,632	-
Liquidation of Companies ( % )	0.5	4.3	6.1	5.0	-
Registration of New Business ( No. )	332,723	364,230	376,720	484,029	-
Registration of New Business ( % )	1.0	9.0	3.0	29.0	-
Business Dissolved ( No. )	26,966	-	-	-	-
Business Dissolved ( % )	48.5	-	-	-	-
Sales of New Passenger Cars (' 000 Unit )	588.3	591.3	514.6	527.8	-
Cellular Phone Subscribers ( Million )	44.0	44.2	44.0	-	-
Tourist Arrival ( Million Persons )	27.4	25.7	30.2	30.1	-
Hotel Occupancy Rate ( % )	63.6	58.8	61.2	-	-
Credit Cards Spending ( % )	5.8	6.8	6.3	-	-
Bad Cheque Offenders (No.)	-	-	-	-	-
Individual Bankruptcy ( No.)	22,351	18,457	19,588	18,227	-
Individual Bankruptcy ( % )	1.7	(17.4)	6.1	(7.0)	-

INDUSTRIES ( % of Growth ):	2014	2015	2016	2017*	2018**
Agriculture	2.0	1.3	(5.1)	5.6	2.4
Palm Oil	6.7	7.0	(12.7)	11.8	-
Rubber	(10.4)	(11.0)	(6.3)	10.8	-
Forestry & Logging	(4.2)	(7.2)	(3.0)	(15.0)	-
Fishing	2.7	2.1	2.2	0.2	-
Other Agriculture	6.2	6.0	5.1	2.4	-
Industry Non-Performing Loans ( MYR Million )	303.8	343.7	420.3	-	-
% of Industry Non-Performing Loans	1.4	1.5	1.8	-	-
Mining	3.3	5.3	2.2	0.5	0.9
Oil & Gas	3.0	3.5	4.5	-	-
Other Mining	46.6	47.1	42.6	-	-
Industry Non-performing Loans ( MYR Million )	63.5	180.1	190.0	-	-
% of Industry Non-performing Loans	0.3	0.8	0.8	-	-
Manufacturing #	6.1	4.9	4.4	5.5	5.3
Exported-oriented Industries	7.1	6.5	4.3	6.5	-
Electrical & Electronics	11.8	9.2	6.8	9.3	-
Rubber Products	(1.3)	5.1	5.0	6.9	-
Wood Products	7.8	7.0	7.8	7.3	-
Textiles & Apparel	10.8	7.5	7.5	7.4	-
Domestic-oriented Industries	7.7	4.7	3.4	6.2	-
Food, Beverages & Tobacco	6.1	8.9	7.5	11.0	-
Chemical & Chemical Products	1.4	3.5	4.5	3.5	-
Plastic Products	2.7	3.9	5.1	-	-
Iron & Steel	2.8	1.6	2.2	-	-
Fabricated Metal Products	2.8	4.6	5.6	4.6	-
Non-metallic Mineral	6.9	6.8	6.3	5.4	-
Transport Equipment	14.4	5.2	(3.1)	4.7	-
Paper & Paper Products	4.7	3.2	5.4	5.8	-
Crude Oil Refineries	13.0	14.3	13.7	-	-
Industry Non-Performing Loans ( MYR Million )	5,730.8	4,243.7	4,214.1	-	-
% of Industry Non-Performing Loans	25.6	19.0	18.5	-	-
Construction	11.7	8.2	7.4	7.6	7.5
Industry Non-Performing Loans ( MYR Million )	1,666.4	1,638.0	1,793.9	-	-
% of Industry Non-Performing Loans	7.5	7.3	7.9	-	-
Services	6.6	5.1	5.6	5.9	5.8
Electric, Gas & Water	3.8	3.6	5.4	2.5	2.6
Transport, Storage & Communication	7.70	7.55	6.85	7.35	7.30
Wholesale, Retail, Hotel & Restaurant	7.70	6.65	6.65	7.05	6.65
Finance, Insurance & Real Estate	5.15	2.90	4.70	5.70	5.90
Government Services	6.3	4.0	4.9	4.4	4.5
Other Services	4.8	4.7	4.8	5.3	5.3
Industry Non-Performing Loans ( MYR Million )	5,373.5	6,806.6	7,190.6	-	-
% of Industry Non-Performing Loans	24.1	30.5	31.5	-	-
* Estimate / Preliminary
** Forecast
# Based On Manufacturing Production Index

INDUSTRY ANALYSIS

MSIC CODE
465 : Wholesale of machinery, equipment and supplies
INDUSTRY :	MACHINERY
Malaysia is presently the leading manufacturer of automation machinery and equipment (M&E) in the ASEAN region with a total of 22 companies in production. The machinery and equipment industry assumes an important role in the industrial development of the country, in view of its extensive linkages to major economic sectors, such as manufacturing, construction, transportation, mining and agriculture. The industry supports a large number of Small and Medium Enterprises (SMEs), which are capable of producing machinery and equipment for both domestic and export markets. In turn, the industry is supported by a wide range of important engineering services, which mainly involve SMEs.
Exports of machinery, appliances and parts continued to post double-digit growth of 14.3% driven largely by specialized machinery for specific industries, particularly for civil engineering as well as the manufacture of semiconductors and parts. In addition, higher demand also emanated from general industrial machinery and equipment, particularly heating and cooling equipment as well as pumps, compressors, fans and parts. Key export destinations for machinery, appliances and parts were Singapore, Thailand, the US, China and Vietnam.
In 2015, machinery and equipment investment turned around to record a positive growth of 5.8%. According to MATRADE Malaysia, the exports of machinery, appliances and parts to Japan had increased by RM98 million in 2015 compared to 2014. However, export to China is decreased in 2015. Moreover, Machinery, appliances and parts also one of the major import products in Malaysia that is 8.9% of all total import products.
Under Budget 2016, Government will focus into chemical, electrical and electronics, machinery and equipment, aerospace and medical devices industries as well as services. For this, RM730 million is allocated to funds under the Malaysian Investment Development Authority (MIDA).
The Government has identified the M&E industry to be one of the key areas for growth and development. The growth will focus on the manufacture of high value-added and high technology M&E. For the further development of the M&E industry, six strategic thrusts have been set during the Third Industrial Master Plan (IMP3), 2006 - 2020 period:-
- Promoting Malaysia as a regional production, trading and distribution centre for M&E
- Rising the development and promotion of selected specialized and high technology M&E
- Strengthening the engineering support industries and support services
- Developing Malaysian Standards for machinery and equipment
- Developing sufficient highly skilled workforce
- Strengthening the institutional support for the further development of the industry
OVERALL INDUSTRY OUTLOOK : Average Growth

CREDIT RISK EVALUATION & RECOMMENDATION

Incorporated in 1997, the Subject is a Private Limited company, focusing on trading of electrical testing and measurement equipment. The Subject has been in business for over two decades. It has built up a strong clientele base and satisfactory reputation will enable the Subject to further enhance its business in the near term. The Subject is expected to enjoy a stable market shares. Presently, the issued and paid up capital of the Subject stands at MYR 379,824. However, with a strong backing from its holding company, the Subject enjoys timely financial assistance should the needs arise. 

Over the years, the Subject has penetrated into both the local and overseas market. The Subject has positioned itself in the global market and is competing in the industry. Its stable clientele base will enable the Subject to further enhance its business in the near term. Being a small company, the Subject's business operation is supported by 11 employees. Overall, we regard that the Subject's management capability is average. This indicates that the Subject has greater potential to improve its business performance and raising income for the Subject. 

We noted that both the turnover and profits have increased compared to the previous year. The higher profit could be due to increase in turnover and better control over its operating costs. Return on shareholders' funds of the Subject was at a favourable range which indicated that the management was efficient in utilising its funds to generate income. The Subject managed to maintain an adequate liquidity level, indicating that the Subject has the ability to meet its financial obligations. The Subject has high liabilities ratio and it may face financial difficulties if no additional capital is injected. Given a positive net worth standing at MYR 1,319,127, the Subject should be able to maintain its business in the near terms. 

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)

ADELTEC (MALAYSIA) SDN. BHD.

Financial Year End	2016-12-31	2015-12-31	2014-12-31	2013-12-31	2012-12-31
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	SUMMARY	FULL	FULL	FULL	FULL
Currency	MYR	MYR	MYR	MYR	MYR
TURNOVER	5,696,151	5,589,437	4,615,775	4,099,328	4,221,982
Other Income	-	102,052	575,347	-	13,999
	----------------	----------------	----------------	----------------	----------------
Total Turnover	5,696,151	5,691,489	5,191,122	4,099,328	4,235,981
Costs of Goods Sold	-	(3,672,502)	(3,232,839)	(2,849,811)	(3,019,120)
	----------------	----------------	----------------	----------------	----------------
Gross Profit	-	2,018,987	1,958,283	1,249,517	1,216,861
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) FROM OPERATIONS	476,804	265,671	230,573	38,405	168,164
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) BEFORE TAXATION	476,804	265,671	230,573	38,405	168,164
Taxation	(90,137)	(63,764)	(49,328)	(9,262)	(35,465)
	----------------	----------------	----------------	----------------	----------------
PROFIT/(LOSS) AFTER TAXATION	386,667	201,907	181,245	29,143	132,699
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) BROUGHT FORWARD
As previously reported	552,636	350,729	169,484	140,341	7,642
	----------------	----------------	----------------	----------------	----------------
As restated	552,636	350,729	169,484	140,341	7,642
	----------------	----------------	----------------	----------------	----------------
PROFIT AVAILABLE FOR APPROPRIATIONS	939,303	552,636	350,729	169,484	140,341
	----------------	----------------	----------------	----------------	----------------
RETAINED PROFIT/(LOSS) CARRIED FORWARD	939,303	552,636	350,729	169,484	140,341
	=============	=============	=============	=============	=============
INTEREST EXPENSE (as per notes to P&L)
DEPRECIATION (as per notes to P&L)	-	121,217	38,854	62,652	60,829
	----------------	----------------	----------------	----------------	----------------
Total Amortization And Depreciation	-	121,217	38,854	62,652	60,829
	=============	=============	=============	=============	=============

BALANCE SHEET

ADELTEC (MALAYSIA) SDN. BHD.

ASSETS EMPLOYED:
FIXED ASSETS	458,118	425,900	71,952	160,048	205,212
LONG TERM INVESTMENTS/OTHER ASSETS
Deferred assets	-	9,148	-	2,668	1,819
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM INVESTMENTS/OTHER ASSETS	-	9,148	-	2,668	1,819
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM ASSETS	458,118	435,048	71,952	162,716	207,031
CURRENT ASSETS
Stocks	-	70,905	-	-	6,219
Trade debtors	-	2,128,694	1,101,819	1,601,901	896,849
Other debtors, deposits & prepayments	-	135,052	54,958	36,150	57,740
Cash & bank balances	-	784,900	595,973	1,049,873	590,491
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT ASSETS	4,282,047	3,119,551	1,752,750	2,687,924	1,551,299
	----------------	----------------	----------------	----------------	----------------
TOTAL ASSET	4,740,165	3,554,599	1,824,702	2,850,640	1,758,330
	=============	=============	=============	=============	=============
CURRENT LIABILITIES
Other creditors & accruals	-	352,688	181,779	10,804	295,594
Hire purchase & lease creditors	-	42,990	-	-	23,320
Amounts owing to holding company	-	1,961,862	865,244	2,278,642	882,745
Amounts owing to director	-	512	512	512	512
Provision for taxation	-	66,877	43,715	11,374	35,994
	----------------	----------------	----------------	----------------	----------------
TOTAL CURRENT LIABILITIES	3,205,542	2,424,929	1,091,250	2,301,332	1,238,165
	----------------	----------------	----------------	----------------	----------------
NET CURRENT ASSETS/(LIABILITIES)	1,076,505	694,622	661,500	386,592	313,134
	----------------	----------------	----------------	----------------	----------------
LONG TERM LIABILITIES
Long term loans	-	197,210	-	-	-
Deferred taxation	-	-	2,899	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL LONG TERM LIABILITIES	215,496	197,210	2,899	-	-
	----------------	----------------	----------------	----------------	----------------
TOTAL NET ASSETS	1,319,127	932,460	730,553	549,308	520,165
	=============	=============	=============	=============	=============
SHARE CAPITAL
Ordinary share capital	379,824	379,824	379,824	379,824	379,824
	----------------	----------------	----------------	----------------	----------------
TOTAL SHARE CAPITAL	379,824	379,824	379,824	379,824	379,824
RESERVES
Retained profit/(loss) carried forward	939,303	552,636	350,729	169,484	140,341
	----------------	----------------	----------------	----------------	----------------
TOTAL RESERVES	939,303	552,636	350,729	169,484	140,341
	----------------	----------------	----------------	----------------	----------------
SHAREHOLDERS' FUNDS/EQUITY	1,319,127	932,460	730,553	549,308	520,165
	=============	=============	=============	=============	=============

FINANCIAL RATIO

ADELTEC (MALAYSIA) SDN. BHD.

TYPES OF FUNDS
Cash	-	784,900	595,973	1,049,873	590,491
Net Liquid Funds	-	784,900	595,973	1,049,873	590,491
Net Liquid Assets	1,076,505	623,717	661,500	386,592	306,915
Net Current Assets/(Liabilities)	1,076,505	694,622	661,500	386,592	313,134
Net Tangible Assets	1,319,127	932,460	730,553	549,308	520,165
Net Monetary Assets	861,009	426,507	658,601	386,592	306,915
PROFIT & LOSS ITEMS
Earnings Before Interest & Tax (EBIT)	-	265,671	230,573	38,405	168,164
Earnings Before Interest, Taxes, Depreciation And Amortization (EBITDA)	-	386,888	269,427	101,057	228,993
BALANCE SHEET ITEMS
Total Borrowings	-	240,200	-	-	23,320
Total Liabilities	3,421,038	2,622,139	1,094,149	2,301,332	1,238,165
Total Assets	4,740,165	3,554,599	1,824,702	2,850,640	1,758,330
Net Assets	1,319,127	932,460	730,553	549,308	520,165
Net Assets Backing	1,319,127	932,460	730,553	549,308	520,165
Shareholders' Funds	1,319,127	932,460	730,553	549,308	520,165
Total Share Capital	379,824	379,824	379,824	379,824	379,824
Total Reserves	939,303	552,636	350,729	169,484	140,341
GROWTH RATIOS (Year on Year) (%)
Revenue	1.91	21.09	12.60	(2.91)	4.53
Proft/(Loss) Before Tax	79.47	15.22	500.37	(77.16)	106.53
Proft/(Loss) After Tax	91.51	11.40	521.92	(78.04)	108.76
Total Assets	33.35	94.80	(35.99)	62.12	(21.60)
Total Liabilities	30.47	139.65	(52.46)	85.87	(33.26)
LIQUIDITY (Times)
Cash Ratio	-	0.32	0.55	0.46	0.48
Liquid Ratio	-	1.26	1.61	1.17	1.25
Current Ratio	1.34	1.29	1.61	1.17	1.25
WORKING CAPITAL CONTROL (Days)
Stock Ratio	-	5	-	-	1
Debtors Ratio	-	139	87	143	78
SOLVENCY RATIOS (Times)
Gearing Ratio	-	0.26	-	-	0.04
Liabilities Ratio	2.59	2.81	1.50	4.19	2.38
Assets Backing Ratio	3.47	2.45	1.92	1.45	1.37
PERFORMANCE RATIO (%)
Operating Profit Margin	8.37	4.75	5.00	0.94	3.98
Net Profit Margin	6.79	3.61	3.93	0.71	3.14
Return On Net Assets	36.15	28.49	31.56	6.99	32.33
Return On Capital Employed	31.07	22.66	31.44	6.99	30.94
Return On Shareholders' Funds/Equity	29.31	21.65	24.81	5.31	25.51

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	INR 68.21
UK Pound	1	INR 91.43
Euro	1	INR 80.24
MYR	1	INR 15.04

Note : Above are approximate rates obtained from sources believed to be correct

INFORMATION DETAILS

Analysis Done by :	VIV
Report Prepared by :	TPT

RATING EXPLANATIONS

Credit Rating	Explanation	Rating Comments
A++	Minimum Risk	Business dealings permissible with minimum risk of default
A+	Low Risk	Business dealings permissible with low risk of default
A	Acceptable Risk	Business dealings permissible with moderate risk of default
B	Medium Risk	Business dealings permissible on a regular monitoring basis
C	Medium High Risk	Business dealings permissible preferably on secured basis
D	High Risk	Business dealing not recommended or on secured terms only
NB	New Business	No recommendation can be done due to business in infancy stage
NT	No Trace	No recommendation can be done as the business is not traceable

NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.

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 are as follows:

· Financial condition covering various ratios

· Company background and operations size

· Promoters / Management background

· Payment record

· Litigation against the subject

· Industry scenario / competitor analysis

· Supplier / Customer / Banker review (wherever available)

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