MIRA
INFORM REPORT
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Report Date : |
31st
January, 2007 |
IDENTIFICATION
DETAILS
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Name : |
B.K.B. HEVEA PRODUCTS SDN BHD |
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Formerly Known as: |
KL-KEPONG HEVEA PRODUCTS SDN BHD |
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Registered Office : |
Wisma Taiko, 1 Jalan S P Seenivasagam, 30000 Ipoh, Malaysia. |
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Country : |
Malaysia |
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Financials (as on) : |
30.09.2005 |
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Date of Incorporation : |
08.02.1992 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Manufacturer
of 3-Ply Parquet Flooring & Other Related Products. |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
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Status : |
Moderate |
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Payment Behaviour : |
Usually
Correct |
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Litigation : |
Clear |
EXECUTIVE SUMMARY
LOCAL NO : 233821-W
COMPANY NAME : B.K.B. HEVEA PRODUCTS SDN BHD
FORMER NAME : KL-KEPONG HEVEA PRODUCTS SDN BHD (15-09-1993)
: MARAZO SDN BHD (03-11-1992)
INCORPORATION DATE : 08/02/1992
COMPANY STATUS : EXIST
LEGAL STATUS : PRIVATE LIMITED COMPANY
LISTED STATUS : NO
REGISTERED ADDRESS : WISMA TAIKO, 1 JALAN S P SEENIVASAGAM, 30000 IPOH,
MALAYSIA.
BUSINESS ADDRESS : 4 LEBUH PERUSAHAAN KELEBANG 5, IGB INTER IND PARK,
JLN KUALA KANGSAR, 31200 CEMOR, PERAK, MALAYSIA.
TEL NO : 05 - 2911599/2469/3536
FAX NO : 05 - 2912140
EMAIL : sales@bkbhevea.com
WEB SITE : www.bkbhevea.com
CONTACT PERSON : DOROTHY KHOO (ACCOUNTANT)
INDUSTRY CODE : 20299
PRINCIPAL ACTIVITY : MANUFACTURE OF 3-PLY PARQUET FLOORING &
RELATED PRODUCTS
AUTHORISED CAPITAL : MYR35,000,000.00 DIVIDED INTO
ORDINARY SHARE 20,000,000 OF MYR1.00 EACH.
PREFERENCE SHARE 30,000,000 OF MYR0.50 EACH.
ISSUED & PAID UP CAPITAL : MYR20,000,000.00 DIVIDED INTO
ORDINARY SHARE 20,000,000 CASH OF MYR1.00 EACH.
SALES : MYR32,067,820 [2005]
NET WORTH : MYR50,813,636 [2005]
STAFF STRENGTH : 355 [2007]
BANKER (S) : MALAYAN BANKING BHD
LITIGATION : CLEAR
FINANCIAL CONDITION : LIMITED
PAYMENT : AVERAGE
MANAGEMENT CAPABILITY : AVERAGE
COMMERCIAL RISK : MODERATE
CURRENCY EXPOSURE : MODERATE
GENERAL REPUTATION : SATISFACTORY
INDUSTRY OUTLOOK : DECLINING
CREDIT RATING : B
HISTORY / BACKGROUND
The SC 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 SC must have at least two directors. A private limited company is a separate legal entity from its shareholders. As a separate legal entity, the SC 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 SC is insolvent. The SC 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 SC is principally engaged in the (as a / as an) manufacture of 3-ply parquet flooring & related products.
The SC is not listed on Bursa Malaysia (Malaysia Stock Exchange).
The SC is not qualified to be one of the Top Corporate Performers in the Malaysia 1000 (M1000) publication, a directory jointly published by Companies Commission of Malaysia (The Registrar Office),
Minister of Domestic Trade and Consumer Affairs and our publication arm, BASIS Publications House
Sdn Bhd.
The immediate holding company of the SC is KL-KEPONG INDUSTRIAL HOLDINGS SDN BHD, a company incorporated in MALAYSIA.
The ultimate holding company of the SC is KUALA LUMPUR KEPONG BERHAD, a company incorporated in MALAYSIA.
The
major shareholder(s) of the SC are shown as follows :
|
Name |
Address |
IC/PP/Loc No: |
Shareholding |
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KL-KEPONG
INDUSTRIAL HOLDINGS SDN BHD |
WISMA
TAIKO, 1 JALAN S P SEENIVASAGAM, 30000 IPOH, PERAK, MALAYSIA |
300525 |
20,000,000 |
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20,000,000 |
+ Also
Director
MANAGEMENT
1) Name of Subject : DOROTHY
KHOO
Position : ACCOUNTANT
2) Name of Subject : DEH
THEAM SEONG
Position : OPERATIONS MANAGER
3) Name of Subject : FAN
CHEE KUM
Position : EXECUTIVE DIRECTOR
AUDITOR
Auditor : ERNST & YOUNG
Auditors'
Address : 21 & 23, JALAN
HUSSEIN, !ST FLOOR, 30250 IPOH, PERAK, MALAYSIA.
COMPANY SECRETARY
1)Company
Secretary : MR. LIM JIT CHEW
IC / PP
No. : 0491704
New IC
No. : 480817-10-5639
Address : 9, PERSIARAN BUKIT
MERU 4, BUKIT MERU, 30020 IPOH, PERAK,
MALAYSIA.
Date of
Appointment : 21/03/2001
2)Company
Secretary : MS. CHEAH LEE
NGO
IC / PP
No. :
4541196
New IC
No. :
531108-08-6110
Address : 45, BEHIND
BP PETROL STATION, OFF JALAN BESAR, 31100
SUNGAI SIPUT, PERAK, MALAYSIA.
Date of
Appointment : 21/03/2001
BANKING
Banking
relations are maintained principally with :
1)
Banker Name : MALAYAN BANKING BHD
The SC
enjoys normal banking routine with above mentioned banker(s).
No
adverse record was found during our investigation.
ENCUMBRANCE (S)
No
encumbrance was found in our databank at the time of investigation.
LEGAL CHECK AGAINST THE SC
*A check
has been conducted in our databank against the SC 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 data bank
PAYMENT RECORD
SOURCES OF RAW MATERIALS :
Local : YES Percentage : 40%
Overseas : YES Percentage : 60%
Import
Countries : UNITED STATES ,
EUROPE , CANADA , AUSTRALIA , AFRICA.
The SC
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 [ ] Good [ ] Average [ X ]
Fair [ ] Poor [ ]
CLIENTELE
Local : YES
Domestic
Markets : MALAYSIA.
Overseas : YES
Export
Market : ASEAN COUNTRIES ,
EUROPEAN COUNTRIES & ETC.
Credit
Term : 30 - 60 DAYS.
Payment
Mode : CHEQUES , TELEGRAPHIC
TRANSFER (TT).
Type of
Customer : DEALER , DISTRIBUTOR
, CONTRACTOR .
The SC's
mainly focuses on the overseas markets.
OPERATIONS
Products
Manufactured : 3-PLY PARQUET FLOORING
& OTHER RELATED PRODUCTS
Award : 1 ) MS ISO 9001 :
2000 Year : 1999
Competitor(s) : EKOWOOD INTERNATIONAL BHD
KTS
TIMBER INDUSTRIES BHD
GOLDEN PHAROS DOORS SDN BHD
FINEWOOD FOREST PRODUCTS SDN BHD
FORCE TIMBER INDUSTRIES (M) SDN BHD
Ownership
of premises : OWNED
Shifts : 2 SHIFTS
Total
Number of Employees :
YEAR 2007 2006 2005
GROUP N/A N/A N/A
COMPANY 355 350 343
Branch : YES
No of
Branches : 2
Branch(es)
LOT PT
101910, 101911, 101916 & 101917, IGB INTERNATIONAL INDUSTRIAL PARK, JALAN
KUALA KANGSAR, 31200 IPOH, PERAK.
LOT 7.2,
MENARA LIEN HOE, 8 PERSIARAN TROPICANA, 47410 PETALING JAYA, SELANGOR.
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 SC indicated that :
Telephone
Number Provided By Client : N/A
Current
Telephone Number :
05-2911599/2469/3536
Match :
N/A
Address
Provided By Client : 4
LEBUH PERUSAHAAN KELEBANG 5, IGB
INTERNATIONAL PARK, KUALA KANGSAR, 31200
IPOH, PERAK.
Current
Address : 4 LEBUH
PERUSAHAAN KELEBANG 5, IGB INTER
IND
PARK, JLN KUALA KANGSAR, 31200 CEMOR,
PERAK, MALAYSIA.
Match :
YES
Latest
Financial Accounts :
YES
Other Investigations
On 22nd
January 2007 we contacted one of the Senior staff from the Finance Department.
She provided
some
information on the SC.
FINANCIAL COMMENTS
Profitability
:
Turnover : Erratic [ 2003-2005 ]
Profit /
( Loss ) before tax : Decreased [ 2003-2005 ]
Return
on Shareholder Funds : Unfavourable [ 5.62% ]
Return
on Net Assets : Unfavourable [ 5.16% ]
The
fluctuating turnover reflects the fierce competition among the existing and new
market players. The
SC's
profit fell sharply because of the high operating costs incurred. The
unfavourable return on shareholders' funds and net assets could indicate that
the SC's management was inefficient in utilising its assets to generate
returns.
Working
Capital Control :
Stocks
Ratio : Unfavourable [ 294 Days ]
Debtors
Ratio : Favourable [ 50 Days ]
Creditors
Ratio : Favourable [ 6 Days ]
The SC
could be incurring higher holding cost. As its capital was tied up in stocks,
it could face liquidity problems. The favourable debtors' days could be due to
the good credit control measures implemented by the SC. The SC had a favourable
creditors' ratio as evidenced by its favourable collection days. The
SC could
be taking advantage of the cash discounts and also wanting to maintain goodwill
with its creditors.
Liquidity
:
Liquid
Ratio : Acceptable [ 0.85 Times ]
Current
Ratio : Favourable [ 3.11 Times ]
The SC's
liquid ratio was slightly low. This could indicate that the SC's working
capital was slightly deficient. The SC will have to improve its liquidity
position either by obtaining short term financing or increase its paid up
capital so that it can meet all its short term obligations as and when they
fall due.
Solvency
:
Interest
Cover : Favourable [ 92.61 Times ]
Gearing
Ratio : Favourable [ 0.05 Times ]
The
interest cover showed that the SC was able to service the interest. The
favourable interest cover could indicate that the SC was making enough profit
to pay for the interest accrued. The SC was lowly geared thus it had a low
financial risk. The SC was mainly financed by its shareholders' funds and
internally generated funds. In times of economic slowdown / downturn, the SC
being a lowly geared company, will be able to compete better than those
companies which are highly geared in the same industry.
Overall
Assessment :
The SC
recorded lower profits as its turnover showed a erratic trend. The SC's
management was unable to control its costs efficiently as its profit showed a
downward trend.The SC's liquidity was at an acceptable range. If the SC is able
to obtain further short term financing, it should be able to meet all its short
term obligations.With the favourable interest cover, the SC could be able to
service all the accrued interest without facing any difficulties.The SC, 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 SC:
LIMITED
BASIS COMMENTS
Incorporated
in 1992, as a private limited company the SC is principally engaged in
manufacture of 3-ply parquet flooring and related products. Its long presence
in the industry has enabled the SC to gain market shares and established
rapport with its clients. Being backed by a strong established company, allows
the SC to enjoy the benefit of timely financial assistance if the needs arise.
With these favourable conditions, the SC has minimised its risk in the industry
compared to other players. With RM20,000,000 in issued and paid up capital, the
SC has the potential of capturing a higher market shares as it icompeting
aggressively in the market.
Our
investigation revealed that the SC serves both local and overseas clients. This
global approach has diversifies the business risk in the event of uncertainties
in the local market. Generally, the business risk of the SC is moderated. At
present, the SC has a manpower strength of 355 staff in its operation and the
management capability of the SC is average.
During
the financial year ended 31 December 2005, turnover of the SC grew by 10.09% to
RM32,067,820. The SC recorded a pre-tax profit of RM2,649,575 for the year, a
decrease of 63.76% over the previous year. Return on shareholders' funds of the
SC is relatively low, indicating that the SC did not generate an acceptable
amount of profits based on its existing shareholders' funds. Beside this due to
its weak liquidity position, the SC 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 SC. The SC has high liabilities ratio and it may face
financial difficulties if no additional capital is injected. Nevertheless the
given a healthy net worth standing at RM50,813,636, we believe that the SC
should be able to maintain its business in the near terms.
Based on
our investigation we revealed that SC is exposed to currency fluctuation risk
and operating costs as its products are mainly imported from foreign countries
namely United States, Europe, Canada, Australia and Canada.
Besides
that, based on our financial historical data we concluded that the SC's payment
record is average. It is clear of any litigation.
The wood
industry demonstrate downward trend, The immediate outlook for the industry is
unfavourable. With this unconductive industry environment, it might pressure
down the SC performance.
In view
of the above and based on our assessment we recommend credit be granted to the
SC with monitoring.
THE FINANCIAL STATEMENTS WERE PREPARED IN ACCORDANCE WITH MALAYSIA ACCOUNTING STANDARD.
PROFIT AND LOSS ACCOUNT
For The Year Ended 30-September-2005
2005 2004 2003
MYR MYR MYR
TURNOVER 32,067,820 35,669,380 25,757,962
=========== =========== ===========
PROFIT/(LOSS)
FROM OPERATIONS 2,649,575 7,312,011 5,802,133
SHARE OF PROFITS/(LOSSES) OF ASSOCIATED
------------------- ------------------- -------------------
PROFIT/(LOSS)
BEFORE TAXATION 2,649,575 7,312,011 5,802,133
Taxation 203,715 <1,338,388> <400,980>
------------------- ------------------- -------------------
PROFIT/(LOSS)
AFTER TAXATION 2,853,290 5,973,623 5,401,153
------------------- ------------------- -------------------
PROFIT/(LOSS)
BEFORE EXTRAORDINARY ITEMS 2,853,290 5,973,623 5,401,153
------------------- ------------------- -------------------
PROFIT/(LOSS)
ATTRIBUTABLE TO SHAREHOLDERS 2,853,290 5,973,623 5,401,153
RETAINED PROFIT/(ACCUMULATED LOSS) BROUGHT
FORWARD
As
previously reported 30,580,346 26,706,723 21,305,570
------------------- ------------------- -------------------
As
restated 30,580,346 26,706,723 21,305,570
------------------- ------------------- -------------------
PROFIT
AVAILABLE FOR APPROPRIATIONS 33,433,636 32,680,346 26,706,723
DIVIDENDS
- Ordinary (paid & proposed) <10,120,000> <2,100,000> -
------------------- ------------------- -------------------
RETAINED PROFIT/(ACCUMULATED LOSS) CARRIED
FORWARD 23,313,636 30,580,346 26,706,723
=========== =========== ===========
RETAINED
BY: The Company 23,313,636 30,580,346 26,706,723
------------------- ------------------- -------------------
23,313,636 30,580,346 26,706,723
=========== =========== ===========
INTEREST
EXPENSE (as per notes to P&L)
Other
interest expenses 28,921 27 20
------------------- ------------------- -------------------
28,921 27 20
=========== =========== ===========
BALANCE SHEET
As At 30-September-2005
2005 2004 2003
MYR MYR MYR
ASSETS EMPLOYED:
FIXED
ASSETS 27,396,315 14,153,249 15,420,348
LONG
TERM INVESTMENTS/OTHER ASSETS
Subsidiary
companies 2 2 2
------------------- ------------------- -------------------
TOTAL
LONG TERM INVESTMENTS/OTHER ASSETS 2 2 2
INTANGIBLE
ASSETS
Deferred/Expenditure
carried forward 381,402 - -
------------------- ------------------- -------------------
TOTAL
INTANGIBLE ASSETS 381,402 - -
------------------- ------------------- -------------------
TOTAL
LONG TERM ASSETS 27,777,719 14,153,251 15,420,350
CURRENT
ASSETS
Stocks 25,841,691 19,031,713 17,781,403
Trade
debtors 4,352,440 2,665,822 2,898,515
Other
debtors, deposits & prepayments 349,689 752,704 516,001
Short
term deposits - 6,760,340 11,659,830
Items in transit between head office &
branches
Amount
due from subsidiary companies 119,827 - 26,938
Amount
due from related companies 3,473,398 7,626,943 790,733
Amount
due from director - - 26,750
Cash
& bank balances 623,996 579,839 368,584
tax
recoverable 835,970 - 76,516
------------------- ------------------- -------------------
TOTAL
CURRENT ASSETS 35,597,011 37,417,361 34,145,270
CURRENT
LIABILITIES
Trade
creditors 553,406 695,928 142,325
Other
creditors & accruals 2,693,037 1,206,049 2,026,347
Short
term borrowings/Term loans 2,715,000 - -
Amounts
owing to holding company 807,500 - -
Amounts
owing to subsidiary companies - 29,046 -
Provision
for taxation - 636,491 -
provision
for products warranty 175,829 177,852 127,225
amount
owing to ultimate holding company 4,519,322 - -
------------------- ------------------- -------------------
TOTAL
CURRENT LIABILITIES 11,464,094 2,745,366 2,295,897
------------------- ------------------- -------------------
NET
CURRENT ASSETS/(LIABILITIES) 24,132,917 34,671,995 31,849,373
------------------- ------------------- -------------------
TOTAL
NET ASSETS 51,910,636 48,825,246 47,269,723
=========== =========== ===========
FINANCED
BY:
SHARE
CAPITAL
Ordinary
share capital 20,000,000 10,000,000 12,100,000
------------------- ------------------- -------------------
TOTAL
SHARE CAPITAL 20,000,000 10,000,000 12,100,000
RESERVES
Share
premium - - 2,100,000
Capital
reserve - - 5,400,000
Retained profit/(Accumulated loss) carried
forward 23,313,636 30,580,346 26,706,723
capital
redemption reserve 7,500,000 7,500,000 -
------------------- ------------------- -------------------
TOTAL
RESERVES 30,813,636 38,080,346 34,206,723
------------------- ------------------- -------------------
SHAREHOLDERS'
FUNDS/EQUITY 50,813,636 48,080,346 46,306,723
LONG
TERM & DEFERRED LIABILITIES & PROVISIONS
Deferred
taxation 1,097,000 744,900 963,000
------------------- ------------------- -------------------
TOTAL LONG TERM & DEFERRED LIABILITIES
&
PROVISIONS 1,097,000 744,900 963,000
------------------- ------------------- -------------------
51,910,636 48,825,246 47,269,723
=========== =========== ===========
FINANCIAL RATIOS
As At 30-September-2005
2005 2004 2003
MYR MYR MYR
TYPES OF FUNDS
Cash 623,996 7,340,179 12,028,414
Net
Liquid Funds <2,091,004> 7,340,179 12,028,414
Net
Liquid Assets <1,708,774> 15,640,282 14,067,970
Net
Current Assets/(Liabilities) 24,132,917 34,671,995 31,849,373
Net
Tangible Assets 51,529,234 48,825,246 47,269,723
Net
Monetary Assets <2,805,774> 14,895,382 13,104,970
BALANCE
SHEET ITEMS
Total
Borrowings 2,715,000 0 0
Total
Liabilities 12,561,094 3,490,266 3,258,897
Total
Assets 63,374,730 51,570,612 49,565,620
Net
Assets 51,910,636 48,825,246 47,269,723
Net
Assets Backing 50,813,636 48,080,346 46,306,723
Shareholders''
Funds 50,813,636 48,080,346 46,306,723
Total
Share Capital 20,000,000 10,000,000 12,100,000
Total
Reserves 30,813,636 38,080,346 34,206,723
LIQUIDITY
(Times)
Cash
Ratio 0.05 2.67 5.24
Liquid
Ratio 0.85 6.70 7.13
Current
Ratio 3.11 13.63 14.87
WORKING
CAPITAL CONTROL (Days)
Stock
Ratio 294 195 252
Debtors
Ratio 50 27 41
Creditors
Ratio 6 7 2
SOLVENCY
RATIOS (Times)
Gearing
Ratio 0.05 0 0
Liabilities
Ratio 0.25 0.07 0.07
Times
Interest Earned Ratio 92.61 270,816.22 290,107.65
PERFORMANCE
RATIO (%)
Operating
Profit Margin 8.26 20.50 22.53
Net
Profit Margin 8.90 16.75 20.97
Return
On Net Assets 5.16 14.98 12.27
Return
On Capital Employed 4.94 14.98 12.27
Return
On Shareholders'' Funds/Equity 5.62 12.42 11.66
Dividend
Pay Out Ratio (Times) 3.55 0.35 0
NOTES
TO ACCOUNTS
Contingent
Liabilities 0 0 0
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 |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
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 |
|
NR |
In view of the lack of information, we
have no basis upon which to recommend credit dealings |
No Rating |
|