MIRA
INFORM REPORT
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Report Date : |
12.09.2007 |
IDENTIFICATION DETAILS
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Name : |
TEONG FATT COMMODITIES (M) SDN BHD |
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Registered Office : |
14A, Jalan Todak 3, Pusat Bandar, Bandar |
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Country : |
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Financials (as on) : |
31.08.2006 |
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Date of Incorporation : |
27/05/1991 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Distribution of Agricultural Product and related Equipment |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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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 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
* Adopted abbreviations : SC - Subject Company ( the company enquired by you)
N/A - Not Applicable
EXECUTIVE SUMMARY
LOCAL NO : 217777-X
COMPANY NAME : TEONG FATT COMMODITIES (M) SDN BHD
FORMER NAME : N/A
INCORPORATION DATE : 27/05/1991
COMPANY STATUS : EXIST
LEGAL STATUS : PRIVATE LIMITED COMPANY
LISTED STATUS : NO
REGISTERED ADDRESS : 14A, JALAN TODAK 3, PUSAT BANDAR, BANDAR
SEBERANG
JAYA, 13700
BUSINESS ADDRESS : 4181, LORONG PERDA UTAMA 7, BANDAR PERDA, 14000
BUKIT
MERTAJAM, PULAU
TEL NO : 04 - 5379996
FAX NO : 04 - 5303925/5376669
CONTACT PERSON : NG CHUN LAI (MANAGING DIRECTOR)
INDUSTRY CODE : 51591
PRINCIPAL ACTIVITY : DISTRIBUTION OF AGRICULTURAL PRODUCT AND
RELATED EQUIPMENT
AUTHORISED CAPITAL : MYR5,000,000.00 DIVIDED INTO ORDINARY SHARE
5,000,000 OF MYR1.00 EACH.
ISSUED AND PAID UP CAPITAL : MYR1,150,000.00 DIVIDED INTO ORDINARY SHARE
1,150,000 CASH OF MYR1.00 EACH.
SALES : MYR18,717,987 [2006]
NET WORTH : MYR5,042,065 [2006]
STAFF STRENGTH : 22 [2007]
BANKER (S) : EON BANK BHD
: HONG LEONG BANK BHD
: MALAYAN BANKING BHD
: OCBC BANK (
: PUBLIC BANK BHD
LITIGATION : CLEAR
FINANCIAL CONDITION : FAIR
PAYMENT : GOOD
MANAGEMENT CAPABILITY : AVERAGE
COMMERCIAL RISK : MODERATE
CURRENCY EXPOSURE : MODERATE
GENERAL REPUTATION : SATISFACTORY
INDUSTRY OUTLOOK : MARGINAL 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) distribution of agricultural product and related equipment.
The SC is not listed on
The SC is not qualified to be one of the Top Corporate
Performers in the
The major shareholder(s) of the SC are shown as follows :
Name Address IC/PP/Loc
No:
Shareholding
MR. NG CHUN LAI + 11,
LORONG TAMBUN INDAH 8,
TAMBUN
INDAH, 14100 SIMPANG AMPAT, 490824-02-5337
PULAU
MR. NG SON TEK @ ANG AH 429, JALAN MARKET, 09800 SERDANG, 0133584 198,620
BA
MR. NG CHOON CHOOI + 326, LORONG KENANGAN 8,
KENANGAN,
09410
MR. NG CHONG SENG @ ENG 5, TINGKAT BIJAI 30,
CHONG SENG + 14000
BUKIT MERTAJAM, PULAU
MR. NG CHYE HOCK 429,
JALAN MARKET, 09800 SERDANG, 7013666 81,114
TAN SWEE LENG 31,
TAN SWEE PHENG 31,
MS. TEOH
--------------------
1,150,000
===========
+ Also Director
DIRECTORS
DIRECTOR 1
Name of Subject : MR. NG CHUN LAI
Address : 11, LORONG TAMBUN INDAH 8,
SIMPANG
AMPAT, PULAU
IC / PP No. : 2406593
New IC No : 490824-02-5337
Date of Birth : 24/08/1949
Nationality : MALAYSIAN CHINESE
Date of Appointment : 27/05/1991
DIRECTOR 2
Name of Subject : MR. NG CHOON CHOOI
Address : 326, LORONG KENANGAN 8, TAMAN
KENANGAN, 09410
SERAI,
IC / PP No. : 8016428
New IC No : 441209-08-5011
Date of Birth : 09/12/1944
Nationality : MALAYSIAN CHINESE
Date of Appointment : 08/01/1992
DIRECTOR 3
Name of Subject : MR. NG CHONG SENG @ ENG CHONG SENG
Address : 5, TINGKAT BIJAI 30,
MERTAJAM,
PULAU
IC / PP No. : 1610035
New IC No : 480615-02-5235
Date of Birth : 15/06/1948
Nationality : MALAYSIAN CHINESE
Date of Appointment : 26/04/2002
DIRECTOR 4
Name of Subject : MS. NG SWEE LUANG
Address : 429, JALAN PASAR, 09800 SERDANG,
IC / PP No. : A0273319
New IC No : 650907-02-5666
Date of Birth : 07/09/1965
Nationality : MALAYSIAN CHINESE
Date of Appointment : 28/08/1997
MANAGEMENT
1) Name of Subject : NG CHUN LAI
Position : MANAGING DIRECTOR
AUDITOR
Auditor : SH YEOH & CO
Auditors' Address : 14, JALAN TODAK 3, PUSAT BANDAR, BANDAR SEBERANG JAYA,
13700
BUTTERWORTH, PULAU
COMPANY SECRETARY
1) Company Secretary : MR. LIM KIM TECK
IC / PP No. : 5538757
New IC No. : 590613-07-5607
Address : 8B-2-6, LEBUHRAYA THEAN TEIK, 11500 AYER ITAM, PULAU
Date of Appointment : 27/02/2002
2) Company Secretary : MS. TEH AI GEIK@TEH AI GEK
IC / PP No. : A1193529
New IC No. : 690118-08-5056
Address : 11A, LORONG KIKIK 6,
PULAU
Date of Appointment : 27/02/2002
BANKING
Banking relations are maintained principally with :
1) Banker Name : EON BANK BHD
2) Banker Name : HONG LEONG BANK BHD
3) Banker Name : MALAYAN BANKING BHD
4) Banker Name : OCBC
BANK (
5) Banker Name : PUBLIC 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 : 06 Jun 1997
Description of Charge : N/A
Amount Secured : RM 6,000,000.00
Description of Property Affected : N/A
Name & Address of Chargee : HONG LEONG BANK BHD
Form 40 Dated
Registered and Numbered 5 In The Register of Charges
ENCUMBRANCE 2
Date of Creation : 06 Jun 1997
Description of Charge : N/A
Amount Secured : RM 6,000,000.00
Description of Property Affected : N/A
Name & Address of Chargee : HONG LEONG BANK BHD
Form 40 Dated
Registered and Numbered 6 In The Register of Charges
ENCUMBRANCE 3
Date of Creation : 06 Jul 2000
Description of Charge : N/A
Amount Secured : RM 1,800,000.00
Description of Property Affected : N/A
Name & Address of Chargee : MALAYAN BANKING BHD
Form 40 Dated
Registered and Numbered 7 In The Register of Charges
ENCUMBRANCE 4
Date of Creation : 30 Oct 2002
Description of Charge : N/A
Amount Secured : RM 1,175,000.00
Description of Property Affected : N/A
Name & Address of Chargee : EON BANK BHD
Form 40 Dated
Registered and Numbered 9 In The Register of Charges
ENCUMBRANCE 5
Date of Creation : 30 Oct 2002
Description of Charge : N/A
Amount Secured : RM 125,000.00
Description of Property Affected : N/A
Name & Address of Chargee : EON BANK BHD
Form 40 Dated
Registered and Numbered 10 In The Register of Charges
ENCUMBRANCE 6
Date of Creation : 25 May 2004
Description of Charge : THIRD LEGAL CHARGE
Amount Secured : RM 250,000.00
Description of Property Affected : ALL THAT PIECE OF LAND AND HEREDITAMENTS KNOWN
AS
DAERAH BANDAR BAHARU, NEGERI KEDAH
Name & Address of Chargee : EON BANK BHD
WISMA CYCLECARRI, 288 JALAN RAJA LAUT, 12TH FLOOR,
50350
Form 40 Dated 18 Aug 2004
Registered and Numbered 11 In The Register of Charges
ENCUMBRANCE 7
Date of Creation : 03 Oct 2005
Description of Charge : N/A
Amount Secured : N/A
Description of Property Affected : N/A
Name & Address of Chargee : OCBC BANK (
Form 40 Dated 15 Feb 2006
Registered and Numbered 15 In The Register of Charges
ENCUMBRANCE 8
Date of Creation : 15 May 2006
Description of Charge : FOURTH LEGAL CHARGE
Amount Secured : RM 500,000.00
Description of Property Affected : ALL THAT PIECE OF LAND AND HEREDITAMENTS KNOWN
AS
611), MUKIM OF SERDANG, TEMPAT AYER PUTEH, DAERAH
BANDAR BARU, NEGERI KEDAH
Name & Address of Chargee : EON BANK BHD
MENARA EON BANK, 288 JALAN RAJA LAUT, 12TH FLOOR,
50350
Form 40 Dated 25 May 2006
Registered and Numbered 16 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
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
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 [ X ] Average [ ]
Fair [ ] Poor [ ]
CLIENTELE
Local : YES Percentage : 100%
Domestic Markets :
Overseas : NO Percentage : 0 %
Credit Term : AS AGREED.
Payment Mode : CHEQUES , CASH.
Type of Customer : WHOLESALERS , DISTRIBUTORS .
OPERATIONS
Goods Traded : AGRICULTURAL PRODUCTS AND RELATED EQUIPMENT
Competitor(s) : UMW CORPORATION SDN BHD
TRACTORS
UMW
(
DELCOM SERVICES SDN BHD
MALAYSIAN
INTERNATIONAL TRADING CORPORATION (
Ownership of premises : OWNED
Total Number of Employees :
YEAR 2007 2006 2005
GROUP N/A N/A N/A
COMPANY 22 28 21
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 : 04-5379996
Match : NO
Address Provided By Client :
Current Address : 4181, LORONG PERDA UTAMA 7, BANDAR PERDA,
14000
BUKIT MERTAJAM, PULAU
Match : NO
Latest Financial Accounts : YES
Other Investigations
We conducted an interview with Mr Ng from the SC's Sales Department. He revealed some information pertaining to the SC.
FINANCIAL COMMENTS
Profitability :
Turnover : Increased [ 14.91% ]
Profit / ( Loss ) before tax : Increased [ 71.65% ]
Return on Shareholder Funds : Acceptable [ 13.85% ]
Return on Net Assets : Acceptable [ 15.80% ]
The higher turnover could be attributed to the favourable market condition and the SC could be gaining the market share progressively. The higher profit could be attributed to the increase in turnover. The SC's management had generated acceptable return for its shareholders using its assets.
Working Capital Control :
Stocks Ratio : Favourable [ 46 Days ]
Debtors Ratio : Unfavourable [ 69 Days ]
Creditors Ratio : Favourable [ 10 Days ]
The SC's stocks were moving fast thus reducing its holding cost. This had reduced funds being tied up in stocks. The high debtors' ratio could indicate that the SC was weak in its credit control. However, the SC could also giving longer credit periods to its customers in order to boost its sales or to capture / retain its market share. 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 [ 0.97 Times ]
Current Ratio : Unfavourable [ 1.38 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 : Acceptable [ 3.71 Times ]
Gearing Ratio : Unfavourable [ 1.31 Times ]
The SC's interest cover was slightly low. If there is no sharp fall in its profit or sudden increase in the interest rates, we believe the SC is able to generate sufficient income to service its interest and repay the loans. 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 :
Generally, the SC's performance has improved with higher turnover and profit. 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. The SC had an acceptable interest cover. If there is no sudden sharp increase in interest rate or fall in the SC's profit, we do believe the SC is able to generate sufficient cash flow to service its interest payment. 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: FAIR
COMMENTS
Established in 1991, the SC is principally engaged in the distribution of agricultural product and related equipment. Its long presence in the industry coupled with its vast experience has enabled the SC to remain competitive. With an adequate share capital of RM1.15 million, the SC has the potential of expanding its business in future.
The SC's business expansion opportunities are limited as it concentrates solely on the local market and it only has a work force of 22 throughout the years. The SC is vulnerable to the changes in the local market. However, with its stable customers base its business risk is diversified. The SC's business activities are overseen by its Managing Director, Ng Chun Lai and its management capability is average.
During the financial under review, turnover of the SC surged by 14.90% to RM18.71 million in 2006. The SC recorded a pre-tax profit of RM774,993 for the year, an increase of 71.65% over the previous year. The SC generated an acceptable return on shareholders' funds indicating that the SC was efficient in utilising its shareholders' funds to generate favourable returns. Besides this, it also has an adequate liquidity position with its current liabilities well covered by its current assets. With its net current assets, the SC should be able to repay its short term obligations. However the SC posted a high gearing ratio. Nonetheless the SC should be able to maintain its business in the near term, given a positive net worth standing at RM5.04 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.
The potential growth for the industry is marginal and it is quite competitive. It is much dependent on the SC's capacity in sustaining its performance in the market. As the SC is long presence in the market, it should have acquired competitive edge against other players in the same fields.
In view of the above we recommend credit be granted to the SC normally.
THE FINANCIAL
STATEMENTS WERE PREPARED IN ACCORDANCE WITH
PROFIT
AND LOSS ACCOUNT
For
The Year Ended 31-August-2006
TEONG
FATT COMMODITIES (M) SDN BHD
2006 2005
MYR MYR
TURNOVER 18,717,987 16,289,726
=========== ===========
PROFIT/(LOSS)
FROM OPERATIONS 774,993 451,487
SHARE OF PROFITS/(LOSSES) OF
ASSOCIATED
------------------- -------------------
PROFIT/(LOSS)
BEFORE TAXATION 774,993 451,487
Taxation <76,846> <146,530>
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PROFIT/(LOSS)
AFTER TAXATION 698,147 304,957
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PROFIT/(LOSS)
BEFORE EXTRAORDINARY ITEMS 698,147 304,957
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PROFIT/(LOSS)
ATTRIBUTABLE TO SHAREHOLDERS 698,147 304,957
RETAINED PROFIT/(ACCUMULATED LOSS)
BROUGHT
FORWARD
As
previously reported 3,423,918 3,233,961
------------------- -------------------
As
restated 3,423,918 3,233,961
------------------- -------------------
PROFIT
AVAILABLE FOR APPROPRIATIONS 4,122,065 3,538,918
DIVIDENDS
- Ordinary (paid & proposed) <230,000> <115,000>
------------------- -------------------
RETAINED PROFIT/(ACCUMULATED LOSS)
CARRIED
FORWARD 3,892,065 3,423,918
=========== ===========
RETAINED
BY: The Company 3,892,065 3,423,918
------------------- -------------------
3,892,065 3,423,918
=========== ===========
INTEREST
EXPENSE (as per notes to P&L)
Other
interest expenses 285,661 234,170
------------------- -------------------
285,661 234,170
=========== ===========
BALANCE SHEET
As
At 31-August-2006
TEONG
FATT COMMODITIES (M) SDN BHD
2006 2005
MYR MYR
ASSETS EMPLOYED:
FIXED
ASSETS 3,962,688 2,273,541
LONG
TERM INVESTMENTS/OTHER ASSETS
Investments 565,812 1,554,951
------------------- -------------------
TOTAL
LONG TERM INVESTMENTS/OTHER ASSETS 565,812 1,554,951
INTANGIBLE
ASSETS
------------------- -------------------
------------------- -------------------
TOTAL
LONG TERM ASSETS 4,528,500 3,828,492
CURRENT
ASSETS
Stocks 2,359,113 2,209,764
Trade
debtors 3,526,873 2,414,134
Other
debtors, deposits & prepayments 766,426 734,469
Short term
deposits 622,373 600,196
Items in transit between head
office & branches
Amount
due from director 575,930 711,995
Cash
& bank balances 35,686 20,291
tax
receivable 52,185 189,339
------------------- -------------------
TOTAL
CURRENT ASSETS 7,938,586 6,880,188
CURRENT
LIABILITIES
Trade
creditors 531,106 420,352
Other
creditors & accruals 258,133 246,233
Hire
purchase & lease creditors 28,284 42,090
Bank
overdraft 807,166 1,205,976
Short
term borrowings/Term loans 151,252 72,709
Other
borrowings 3,976,000 3,211,497
------------------- -------------------
TOTAL
CURRENT LIABILITIES 5,751,941 5,198,857
------------------- -------------------
NET
CURRENT ASSETS/(LIABILITIES) 2,186,645 1,681,331
------------------- -------------------
TOTAL NET
ASSETS 6,715,145 5,509,823
=========== ===========
FINANCED
BY:
SHARE
CAPITAL
Ordinary
share capital 1,150,000 1,150,000
TOTAL
SHARE CAPITAL 1,150,000 1,150,000
RESERVES
Retained profit/(Accumulated loss)
carried
forward 3,892,065 3,423,918
------------------- -------------------
TOTAL
RESERVES 3,892,065 3,423,918
------------------- -------------------
SHAREHOLDERS'
FUNDS/EQUITY 5,042,065 4,573,918
LONG
TERM & DEFERRED LIABILITIES & PROVISIONS
Long
term loans 1,560,894 923,502
Hire
purchase creditors 99,186 2,403
Deferred
taxation 13,000 10,000
------------------- -------------------
TOTAL LONG TERM & DEFERRED
LIABILITIES &
PROVISIONS 1,673,080 935,905
------------------- -------------------
6,715,145 5,509,823
=========== ===========
FINANCIAL RATIOS
As
At 31-August-2006
TEONG
FATT COMMODITIES (M) SDN BHD
2006 2005
MYR MYR
TYPES OF FUNDS
Cash 658,059 620,487
Net
Liquid Funds <300,359> <658,198>
Net
Liquid Assets <172,468> <528,433>
Net
Current Assets/(Liabilities) 2,186,645 1,681,331
Net
Tangible Assets 6,715,145 5,509,823
Net
Monetary Assets <1,845,548> <1,464,338>
BALANCE
SHEET ITEMS
Total
Borrowings 6,622,782 5,458,177
Total
Liabilities 7,425,021 6,134,762
Total
Assets 12,467,086 10,708,680
Net
Assets 6,715,145 5,509,823
Net
Assets Backing 5,042,065 4,573,918
Shareholders''
Funds 5,042,065 4,573,918
Total
Share Capital 1,150,000 1,150,000
Total
Reserves 3,892,065 3,423,918
LIQUIDITY
(Times)
Cash
Ratio 0.11 0.12
Liquid
Ratio 0.97 0.90
Current
Ratio 1.38 1.32
WORKING
CAPITAL CONTROL (Days)
Stock
Ratio 46 50
Debtors
Ratio 69 54
Creditors
Ratio 10 9
SOLVENCY
RATIOS (Times)
Gearing
Ratio 1.31 1.19
Liabilities
Ratio 1.47 1.34
Times
Interest Earned Ratio 3.71 2.93
PERFORMANCE
RATIO (%)
Operating
Profit Margin 4.14 2.77
Net
Profit Margin 3.73 1.87
Return
On Net Assets 15.79 12.44
Return
On Capital Employed 13.77 10.04
Return
On Shareholders'' Funds/Equity 13.85 6.67
Dividend
Pay Out Ratio (Times) 0.33 0.38
NOTES
TO ACCOUNTS
Contingent
Liabilities 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. |
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%)