MIRA
INFORM REPORT
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Report Date : |
16.11.2007 |
IDENTIFICATION
DETAILS
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Name : |
ALLGREEN TIMBER PRODUCTS SDN BHD |
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Registered Office : |
Suite 6.1A, Menara Pelangi, Jalan Kuning, Taman Pelangi, Level 6, 80400 Johor Bahru, Johor |
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Country : |
Malaysia |
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Financials (as on) : |
31.12.2005 |
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Date of Incorporation : |
04/01/2002 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Manufacturer of Particle Board |
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. |
Small |
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Status : |
Moderate |
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Payment Behaviour : |
No Complaints |
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Litigation : |
Clear |
* Adopted abbreviations : SC - Subject Company ( the company enquired by you)
N/A - Not Applicable
EXECUTIVE SUMMARY
LOCAL NO : 567960-T
COMPANY NAME : ALLGREEN
TIMBER PRODUCTS SDN BHD
FORMER NAME : N/A
INCORPORATION DATE : 04/01/2002
COMPANY STATUS : EXIST
LEGAL STATUS : PRIVATE LIMITED COMPANY
LISTED STATUS : NO
REGISTERED ADDRESS : SUITE 6.1A, MENARA PELANGI, JALAN KUNING, TAMAN
PELANGI, LEVEL 6, 80400 JOHOR BAHRU, JOHOR,
MALAYSIA.
BUSINESS ADDRESS : PLO 202, SEGAMAT INDUSTRIAL AREA II, 85000 SEGAMAT,
JOHOR, MALAYSIA.
TEL NO : 07 - 9279933
FAX NO : 07 - 9270033
CONTACT PERSON : KUO JEN CHANG (MANAGING DIRECTOR)
INDUSTRY CODE : 20212
PRINCIPAL ACTIVITY : MANUFACTURER OF PARTICLE BOARD
AUTHORISED CAPITAL : MYR10,000,000.00 DIVIDED INTO ORDINARY SHARE
10,000,000 OF MYR1.00 EACH.
ISSUED AND PAID UP CAPITAL : MYR8,000,000.00 DIVIDED INTO ORDINARY SHARE
3,000,000 CASH AND 5,000,000 OTHERWISE OF MYR1.00
EACH.
SALES : MYR39,688,023 [2005]
NET WORTH : MYR1,006,514 [2005]
STAFF STRENGTH : 250 [2007]
BANKER (S) : RHB BANK BHD
LITIGATION : CLEAR
FINANCIAL CONDITION : POOR
PAYMENT : FAIR
MANAGEMENT CAPABILITY : AVERAGE
COMMERCIAL RISK : MODERATE
CURRENCY EXPOSURE : MODERATE
GENERAL REPUTATION : SATISFACTORY
INDUSTRY OUTLOOK : AVERAGE GROWTH
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) manufacturer of particle board.
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 EVERGREEN FIBREBOARD BHD, a company in incorporated in MALAYSIA.
The major shareholder(s) of the SC are shown as follows :
Name Address IC/PP/Loc
No: Shareholding
EVERGREEN FIBREBOARD SUITE 601A, MENARA PELANGI, JALAN 217120 8,000,000
BHD KUNING,
TAMAN PELANGI, LEVEL 6, 80400
JOHOR
BAHRU, JOHOR, MALAYSIA.
--------------------
8,000,000
===========
+ Also Director
DIRECTORS
DIRECTOR 1
Name of Subject : KUO JEN CHANG
Address : 8, WESTRIDGE WALK, 117824, SINGAPORE.
IC / PP No. : S2184979J
Date of Birth : 19/11/1963
Nationality : SINGAPOREAN
DIRECTOR 2
Name of Subject : KUO JEN CHIU
Address : 3, QUEENS ROAD, 266734, SINGAPORE.
IC / PP No. : S2190875
Date of Birth : 01/10/1966
Nationality : SINGAPOREAN
DIRECTOR 3
Name of Subject : MS. MARY HENERIETTA LIM KIM NEO
Address : 28, JALAN UASTIN HEIGHTS 1/19, AUSTIN HEIGHTS, TAMAN
MOUNT AUSTIN, 81100 JOHOR BAHRU, JOHOR, MALAYSIA.
IC / PP No. : N/A
New IC No : 640110-05-6028
Date of Birth : 10/01/1964
Nationality : MALAYSIAN CHINESE
DIRECTOR 4
Name of Subject : MR. YONG KOK FONG
Address : 34, JALAN LEDANG, TAMAN JOHOR, 81200 JOHOR BAHRU,
JOHOR, MALAYSIA.
IC / PP No. : A3531480
New IC No : 761118-14-5851
Date of Birth : 18/11/1976
Nationality : MALAYSIAN CHINESE
MANAGEMENT
1) Name of Subject : KUO JEN CHANG
Position : MANAGING DIRECTOR
2) Name of Subject : TEE KIM FOOM
Position : FINANCE MANAGER
3) Name of Subject : VIVIAN LAY
Position : HUMAN RESOURCE MANAGER
AUDITOR
Auditor : ERNST & YOUNG
Auditors' Address : SUITE 11.2A, MENARA PELANGI, JALAN KUNING, TAMAN PELANGI,
LEVEL 6, 80400 JOHOR BAHRU, JOHOR, MALAYSIA.
COMPANY SECRETARY
1) Company Secretary : MS. LEONG SIEW FOONG
IC / PP No. : A0828311
New IC No. : 671205-10-5330
Address : 3, JALAN BAYAM, TAMAN KOTA BESAR, 81900 KOTA TINGGI,
JOHOR, MALAYSIA.
BANKING
Banking relations are maintained principally with :
1) Banker Name : RHB BANK BHD
The SC enjoys normal banking routine with above mentioned banker(s).
The SC has bank charges with above mentioned banker(s).
ENCUMBRANCE (S)
ENCUMBRANCE 1
Date of Creation : 24 Feb 2003
Description of Charge : N/A
Amount Secured : RM 4,900,000.00
Description of Property Affected : N/A
Name & Address of Chargee : RHB BANK BHD
Form 40 Dated
Registered and Numbered 1 In The Register of Charges
ENCUMBRANCE 2
Date of Creation : 24 Feb 2003
Description of Charge : N/A
Amount Secured : RM 4,900,000.00
Description of Property Affected : N/A
Name & Address of Chargee : RHB BANK BHD
Form 40 Dated
Registered and Numbered 2 In The Register of Charges
ENCUMBRANCE 3
Date of Creation : 24 Feb 2003
Description of Charge : N/A
Amount Secured : RM 11,890,653.00
Description of Property Affected : N/A
Name & Address of Chargee : RHB BANK BHD
Form 40 Dated
Registered and Numbered 3 In The Register of Charges
ENCUMBRANCE 4
Date of Creation : 24 Feb 2003
Description of Charge : N/A
Amount Secured : FOREIGN CURRENCY
Description of Property Affected : N/A
Name & Address of Chargee : CITIBANK MALAYSIA (L) LTD
Form 40 Dated
Registered and Numbered 4 In The Register of Charges
ENCUMBRANCE 5
Date of Creation : 24 Feb 2003
Description of Charge : N/A
Amount Secured : RM 21,884,653.00
Description of Property Affected : N/A
Name & Address of Chargee : RHB BANK BHD
Form 40 Dated
Registered and Numbered 5 In The Register of Charges
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
back dated since 1900.
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
Overseas : YES
Import Countries : ASIA.
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 [ ]
Fair [ X ] Poor [ ]
CLIENTELE
Local : YES Percentage : 30%
Domestic Markets : MALAYSIA.
Overseas : YES Percentage : 70%
Export Market : TAIWAN , PHILIPPINES , CHINA , INDONESIA , INDIA.
Credit Term : 30 - 60 DAYS , 60 - 90 DAYS.
Payment Mode : CHEQUES , LETTER OF CREDIT (LC) , TELEGRAPHIC TRANSFER (TT).
Type of Customer : FURNITURE INDUSTRY, CONSTRUCTION INDUSTRY , DISTRIBUTORS .
OPERATIONS
Products Manufactured : PARTICLE BOARD
Competitor(s) : HUME FIBREBOARD SDN BHD
MERBOK HILIR BHD
PAHANCO MANUFACTURING SDN BHD
TAITEC INDUSTRIES (M) SDN BHD
Ownership of premises : OWNED
Factory Size : 23 ACRES
Production lines : 1
Production capacity : 120,000 METER TONS PER YEAR
Shifts : 2
Total Number of Employees :
YEAR 2007 2006 2005 2004
GROUP N/A N/A N/A N/A
COMPANY 250 200 284 236
Branch : NO
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 : 07-9279933
Match : N/A
Address Provided By Client : PLO202 SEGAMAT INDUSTRIAL AREA 2 85000
SEGAMAT/JOHOR MALAYSIA
Current Address : PLO 202, SEGAMAT INDUSTRIAL AREA II, 85000
SEGAMAT, JOHOR, MALAYSIA.
Match : YES
Latest Financial Accounts : YES
Other Investigations
We contacted one of the Senior staff from the Accounts Department. She provided some information on the SC. Later we contacted one of the Senior Supervisor from the Production Division for further information on the SC.
FINANCIAL COMMENTS
Profitability :
Turnover : Decreased [ 7.85% ]
Profit / ( Loss ) before tax : Decreased [ 610.24% ]
Return on Shareholder Funds : Unfavourable [ < 39.64% > ]
Return on Net Assets : Unfavourable [ < 34.81% > ]
The lower turnover could be due to the unfavourable market conditions. The SC incurred losses during the year due to the inefficient control of its operating costs. The SC's unfavourable returns on shareholders' funds indicate the management's inefficiency in utilising its assets to generate returns.
Working Capital Control :
Stocks Ratio : Favourable [ 43 Days ]
Debtors Ratio : Favourable [ 34 Days ]
Creditors Ratio : Favourable [ 23 Days ]
The SC'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 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 : Unfavourable [ 0.14 Times ]
Current Ratio : Unfavourable [ 0.24 Times ]
A low liquid ratio means that the SC may be facing working capital deficiency. If the SC cannot obtain additional financing or injection of fresh capital, it may face difficulties in meeting its short term obligations.
Solvency :
Interest Cover : Unfavourable [ < 2.26 Times > ]
Gearing Ratio : Unfavourable [ 6.75 Times ]
The SC incurred losses in the year. It did not generate sufficient income to service its interest. If the situation does not improve, the SC may be vulnerable to default in servicing the interest. The SC was highly geared, thus it had a high financial risk. The SC was dependent on loans to finance its business needs. In times of economic downturn and / or high interest rate, the SC will become less profitable and competitive than other firms in the same industry, which are lowly geared. This is because the SC has to service the interest and to repay the loan, which will erode part of its profits. The profits will fluctuate depending on the SC's turnover and the interest it needs to pay.
Overall Assessment :
The SC's losses could be attributed to the lower turnover which in turn could be the result of unfavourable market conditions. 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'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 SC's gearing level was high and its going concern will be in doubt if there is no injection of additional shareholders' funds in times of economic downturn and / or high interest rates.
Overall financial condition of the SC: POOR
COMMENTS
Established in 2002, the SC is principally engaged in the manufacturer of particle board. Throughout its year of establishment, the SC has slowly been building up contacts with its clients and competing in the industry. Being backed by the holding 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 RM8 million in issued and paid up capital, the SC has the potential of capturing a higher market shares as it is competing aggressively in the market.
Our investigation revealed that the SC serves both local and overseas clients. Penetrating into the overseas countries such as Taiwan, China, Indonesia and etc has well diversified its business risk and at the same time added strength to its capabilities in capturing higher market shares. At present the workforce of the SC is 250 and the SC's business activities are overseen by its Managing Director, Kuo Jen Chang and its management capability is average.
During the financial year 2005 turnover of the SC dropped by 7.84% to RM39.68 million in 2005. The SC recorded a pre-tax losses of RM2.43 million for the year. Due to the losses, the SC has generated an unfavourable return on shareholders' funds which indicated that the management was inefficient in utilising its shareholders' funds to generate returns. Moreover, the SC is in weak liquidity position with its current liabilities well exceeding its current assets. Thus, it may faces difficulties in meeting its short term obligations if no short term loan is obtained or additional capital injected. The gearing ratio of the SC is high indicating that the SC faces high financial. The SC should be able to maintain its business in the near term, given a positive net worth standing at RM1 million.
Investigation revealed that the SC sources its raw materials from both local and overseas countries. As a result, the SC is exposed to foreign currency fluctuation risk.
Based on the historical financial data, we concluded that the SC's payment habit is fair. The industry remains robust with continuing strong global demand for its products. The steady growth in the country's economy will further enhance its business and there will be more business opportunities available for the SC in the future. In this competitive industry, the SC may face stiff competition from other players.
In view of the above 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 31-December-2005
ALLGREEN
TIMBER PRODUCTS SDN BHD
2005 2004
MYR MYR
TURNOVER 39,688,023 43,066,784
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PROFIT/(LOSS)
FROM OPERATIONS <2,436,966> 477,614
SHARE OF PROFITS/(LOSSES) OF
ASSOCIATED
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PROFIT/(LOSS)
BEFORE TAXATION <2,436,966> 477,614
Taxation 2,038,000 <267,000>
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PROFIT/(LOSS)
AFTER TAXATION <398,966> 210,614
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PROFIT/(LOSS)
BEFORE EXTRAORDINARY ITEMS <398,966> 210,614
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PROFIT/(LOSS)
ATTRIBUTABLE TO SHAREHOLDERS <398,966> 210,614
RETAINED PROFIT/(ACCUMULATED LOSS)
BROUGHT
FORWARD
As
previously reported <6,594,520> <6,805,134>
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As
restated <6,594,520> <6,805,134>
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PROFIT
AVAILABLE FOR APPROPRIATIONS <6,993,486> <6,594,520>
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RETAINED PROFIT/(ACCUMULATED LOSS)
CARRIED
FORWARD <6,993,486> <6,594,520>
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RETAINED
BY: The Company <6,993,486> <6,594,520>
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<6,993,486> <6,594,520>
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INTEREST
EXPENSE (as per notes to P&L)
Term
loan 659,542 796,474
Revolving
loans 88,202 32,304
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747,744 828,778
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BALANCE SHEET
As
At 31-December-2005
ALLGREEN
TIMBER PRODUCTS SDN BHD
2005 2004
MYR MYR
ASSETS EMPLOYED:
FIXED
ASSETS 36,570,850 34,923,856
LONG
TERM INVESTMENTS/OTHER ASSETS
Deferred
assets 4,393,000 2,362,000
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TOTAL
LONG TERM INVESTMENTS/OTHER ASSETS 4,393,000 2,362,000
INTANGIBLE
ASSETS
------------------- -------------------
------------------- -------------------
TOTAL
LONG TERM ASSETS 40,963,850 37,285,856
CURRENT
ASSETS
Stocks 4,700,212 3,554,805
Trade
debtors 3,677,660 4,671,340
Other
debtors, deposits & prepayments 2,659,717 976,494
Short
term deposits - 200,000
Items in transit between head
office & branches
Cash
& bank balances 237,933 1,158,198
tax
recoverable 8,742 -
repurchase
agreements - 4,490,000
------------------- -------------------
TOTAL
CURRENT ASSETS 11,284,264 15,050,837
CURRENT
LIABILITIES
Trade
creditors 2,522,469 2,778,969
Other
creditors & accruals 3,207,715 5,574,527
Short
term borrowings/Term loans 2,948,230 5,539,136
Other
borrowings - 2,500,000
Amounts
owing to holding company 38,717,600 21,221,189
Provision
for taxation - 490
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TOTAL
CURRENT LIABILITIES 47,396,014 37,614,311
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NET
CURRENT ASSETS/(LIABILITIES) <36,111,750> <22,563,474>
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TOTAL
NET ASSETS 4,852,100 14,722,382
=========== ===========
FINANCED
BY:
SHARE
CAPITAL
Ordinary
share capital 8,000,000 8,000,000
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TOTAL
SHARE CAPITAL 8,000,000 8,000,000
RESERVES
Retained profit/(Accumulated loss)
carried
forward <6,993,486> <6,594,520>
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TOTAL
RESERVES <6,993,486> <6,594,520>
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SHAREHOLDERS'
FUNDS/EQUITY 1,006,514 1,405,480
LONG
TERM & DEFERRED LIABILITIES & PROVISIONS
Long
term loans 3,845,586 13,316,902
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TOTAL LONG TERM & DEFERRED
LIABILITIES &
PROVISIONS 3,845,586 13,316,902
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4,852,100 14,722,382
=========== ===========
FINANCIAL RATIOS
As
At 31-December-2005
ALLGREEN
TIMBER PRODUCTS SDN BHD
2005 2004
MYR MYR
TYPES OF FUNDS
Cash 237,933 1,358,198
Net
Liquid Funds <2,710,297> <4,180,938>
Net
Liquid Assets <40,811,962> <26,118,279>
Net
Current Assets/(Liabilities) <36,111,750> <22,563,474>
Net
Tangible Assets 4,852,100 14,722,382
Net
Monetary Assets <44,657,548> <39,435,181>
BALANCE
SHEET ITEMS
Total
Borrowings 6,793,816 21,356,038
Total
Liabilities 51,241,600 50,931,213
Total
Assets 52,248,114 52,336,693
Net
Assets 4,852,100 14,722,382
Net
Assets Backing 1,006,514 1,405,480
Shareholders''
Funds 1,006,514 1,405,480
Total
Share Capital 8,000,000 8,000,000
Total
Reserves <6,993,486> <6,594,520>
LIQUIDITY
(Times)
Cash
Ratio 0.01 0.04
Liquid
Ratio 0.14 0.31
Current
Ratio 0.24 0.40
WORKING
CAPITAL CONTROL (Days)
Stock
Ratio 43 30
Debtors
Ratio 34 40
Creditors
Ratio 23 24
SOLVENCY
RATIOS (Times)
Gearing
Ratio 6.75 15.19
Liabilities
Ratio 50.91 36.24
Times
Interest Earned Ratio <2.26> 1.58
PERFORMANCE
RATIO (%)
Operating
Profit Margin <6.14> 1.11
Net
Profit Margin <1.01> 0.49
Return
On Net Assets <34.81> 8.87
Return
On Capital Employed <21.66> 6.45
Return
On Shareholders'' Funds/Equity <39.64> 14.99
Dividend
Pay Out Ratio (Times) 0 0
NOTES
TO ACCOUNTS
Contingent
Liabilities 0 0
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
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>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. |
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 |
|
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%)